Synopsis: Just When You Thought It Was Safe to Settle! Illinois Medical Providers Filing Post-Settlement Suits for Statutory Interest on Unpaid Medical Bills.
Editor’s Comment: There is a new “trend” out there we feel the entire IL WC community needs to be aware of and adjust claims handling as appropriate. Our research has identified several recent Cook County Circuit Court claims filed by a prominent workers’ compensation medical provider against employers, TPA’s and their insurance providers for payment of medical bills to include recovery of 1% monthly statutory interest on unpaid medical bills pursuant to Section 8.2(d)(3) of the Act. If you aren’t sure, the relevant language from Section 8.2(d)(3) of the IL WC Act states:
(d) When a patient notifies a provider that the treatment, procedure, or service being sought is for a work-related illness or injury and furnishes the provider the name and address of the responsible employer, the provider shall bill the employer directly. The employer shall make payment and providers shall submit bills and records in accordance with the provisions of this Section. (3) In the case of nonpayment to a provider within 30 days of receipt of the bill which contained substantially all of the required data elements necessary to adjudicate the bill or nonpayment to a provider of a portion of such a bill up to the lesser of the actual charge or the payment level set by the Commission in the fee schedule established in this Section, the bill, or portion of the bill, shall incur interest at a rate of 1% per month payable to the provider. Any required interest payments shall be made within 30 days after payment.
Please note the statutory language requires the medical billing be sent to the “employer.” We don’t know how medical bills being misdirected to the employee or their attorney would/should be handled. Please further note the medical billing must include “substantially all of the required data elements necessary to adjudicate the bill or nonpayment…” We are sure lots and lots of medical billing is sent without “required data elements.”
However, if the work-related medical bills are owed and required data elements are forwarded to the TPA/Insurer, the 1% monthly or 12% annual interest rate on medical billing starts. This significant added statutory interest would be owed to all doctors, hospitals and other caregivers providing work-related treatment. We are asked by many of our clients, readers and others if the interest is simple or compounded—the statute cited above doesn’t indicate it is compound interest so our advice is to treat it as simple interest which starts on the date you have “required data elements.”
In our view, at the time of settling IL WC claims, the rank and file of Illinois defense lawyers and insurance carrier/TPA claims adjusters aren’t aware of or simply don’t address this significant statutory interest issue. We are sure some insurance carriers and TPAs let medical bills sit for a variety of reasons—some of the bills await processing and payment at the end of the claim. That may not be a solid claims concept any more. Please remember if you have a properly coded surgical bill for $100,000 that isn’t paid for 20 months while the litigation is pending before the IWCC, an additional $20,000 is owed under IL law. Due to that significant added charge, we are now concerned many parties may be taking a short-sighted view of the settlement process. Standard lump sum settlement language about medical billing simply indicates “bills will be paid by Respondent” for medical care known to the insurance carrier or TPA. However, the language in disputed claims may also indicate Petitioner assumes further liability for all bills and any unpaid statements for work-related medical care.
Statutory Interest Appears to Start When “Required Data Elements” Are Received by the Insurance Carrier/TPA
This litigation we found and highlight below is asserting if the insurance carrier or TPA hasn’t paid the bills but has the “required data elements” needed to calculate what is owed over the life of the claim, they may owe statutory interest from the date of receipt of the data elements. On the other side of the bar, if Petitioner assumes liability for medical bills and they received the required data elements as part of billing, they may owe the statutory interest. In our view, whoever agrees to pay such bills at the time of settlement, you implicitly or explicitly agree to also pay statutory interest under the law.
If you don’t want to pay statutory interest on WC medical bills you are first processing after a settlement, you probably have to document that you don’t have the required data elements or you have to outline what you may owe in the lump sum settlement documentation. We would love the thoughts of any veteran claims handlers or risk managers about how to best address this situation and insure settled claims stay settled. We do feel there may be legal malpractice concerns for Petitioner/Plaintiff attorneys in some situations, if their clients are sued by aggressive medical providers who learn the worker took on liability for all medical bills but didn’t insure statutory interest was paid.
What Happened to the Best Thing About IL WC—Final Closure of Claims at Settlement?
From discussions with claims handlers and risk managers across the U.S., one thing everyone likes about our challenging WC system is closure of medical rights at the time of lump sum settlement contract approval. This new trend, if it survives motions to dismiss in the Circuit Courts, may reverse that concept. It will be an very odd thing to pay the amounts due for TTD/PPD and then see payment of medical bills after settlement erupt into even more litigation over statutory interest.
Please also note one of the most irritating aspects of our IL WC system to claims managers across our country—the status calls and setting and resetting of trial dates—might change if there are significant medical bills outstanding and no one can tell if the
y are due now or going to be due. If there is a 1% per month charge while the litigation is pending, Respondent attorneys will have another tool to fight for firm hearing dates and stop the other side from stalling. Respondent attorneys also have to be sensitive about transmitting unpaid medical bills to their clients for processing to avoid interest charges.
An interesting side note to all of this is we have three adjunct professors of law at KCB&A. From an academic perspective, we don’t feel an IL WC medical provider can or should be able to directly sue an insurance carrier or TPA—the IL WC Act doesn’t provide for such litigation. The rights and interests of a medical provider flow through the patient—their rights should be against only their patient. Obviously Plaintiff counsel for this aggressive medical provider disagrees and they are proceeding with lots of litigation that we feel our IL WC claims community should be aware of. Each of the 8.2(d)(3) claims we cite is supported by an Exhibit attached to each claim. It is Company Bulletin 2012-9 from the Illinois Department of Insurance notifying all insurance companies to maintain compliance with the statutory interest provision in 8.2(d)(3) dated December 13, 2012. It reminds companies of the June 28, 2011 Amendments to the IL WC Act.
Current Cook County Litigation Against Employers/Insurance Carriers/TPA’s
The claim was heard by the Arbitrator, IWCC and the Cook County Circuit Court eventually decided the underlying WC case. Medical bills accrued and were timely submitted between 2010 and 2012. These bills were not paid until 2013 after the case went from arbitration to the Commission and finally to the Circuit Court. Originally, the Arbitrator awarded a lump sum. The medical provider is suing the TPA for the 1% per month statutory interest accrued under three counts
1) breach of contract implied in fact,
2) breach of contract implied in law, and
3) breach of statutory duty.
Their argument is
1) A relationship existed between the parties such that some payments were made and
2) The medical provider was directed to send the bills to the TPA that implies a contract in fact;
3) This same set of facts implies a contract by law, and
4) Under 8.2 of the Act there is a statutory duty to pay the interest. The medical provider asserts it is “damaged as result of failure to pay interest.”
Originally, the Arbitrator awarded total medical bills per fee schedule. Then, the Commission changed the award to omit a few thousand dollars in travel charges. – “It is further ordered by the Commission that Respondent pay to Petitioner the sum of $270,857.60 for medical expenses.” The Circuit Court upheld the Commission’s ruling.
This litigation is ongoing. FYI, the annual cost for 12% interest on the medical award of $270,857.60 is $32,502.91.
This underlying WC claim was settled by lump sum settlement contract. Count I alleges breach of contract claiming the medical provider is an intended third party beneficiary of the contract that has not received payment for some of its bills. Nowhere does the contract name the medical provider or accept employer liability of any further medical bills. In pertinent part, the contract reads, “This settlement included liability for TTD and all medical, surgical, and hospital expenses incurred or to be incurred or allegedly resulting from the said accidental injury for all of which the Petitioner expressly assumes responsibility.” The second and third counts allege breach of statutory duty for interest on paid bills and on unpaid bills. It reproduces the argument in the first reported claim above asserting Section 8.2(d)(3) creates a statutory duty for the 1% interest to be paid.
In our view, the italicized language above would make Petitioner responsible for statutory interest, as they assumed liability for such payments. We are unsure how the employer could be a party to such a claim. This case was transferred to another venue, outside Cook County, and continued as of January 21, 2014.
Defendant Insurance Carrier:
This underlying IL WC claim is also based upon a settlement agreement and prays accrued interest and outstanding medical bills. The pertinent part of this agreement reads, “Respondent offers and Petitioner accepts … in full, final and complete settlement of this case; Respondent is hereby released, acquitted and discharged from any and all liability under The Worker’s Compensation Act … in any way arising out of the accidental occurrence.” The first count is the same as above with an addition after the claim of intended third party beneficiary. This addition reads, “Moreover, Plaintiffs are the assignees of any and all right to compensation for treatment which [Petitioner] holds as an employee, under the Act and otherwise.” The second count is breach of contract implied by fact and follows the argument laid out in the first analysis above. The third count is a breach of statutory duty again under 8.2(d)(3).
Again, we see no basis for a claim against the insurance carrier based on the simple italicized language above. This case is ongoing.
Defendant Insurance Carrier:
This underlying WC case is also based on a settlement agreement and prays accrued interest and outstanding medical bills. Unlike the claims above, where the settlement contracts read “has not paid all medical bills,” this contract reads “has paid all medical bills.” Its rider states, “The Respondent agrees to medical bills pursuant to Section 8(a) of the Act through date of settlement contract approval.” The complaint again alleges breach of contract claiming the health care provider is an intended third party beneficiary of the Settlement Contract. It further alleges the breach of statutory duty pursuant to 8.2(d)(3) for unpaid interest.
This case was recently dismissed by stipulation or agreement.
Defendant Insurance Carrier:
Again, based on a settlement contract, this claim includes all four of the above counts: 1) breach of statutory duty for the interest, 2) breach of contract implied by law for interest due on paid bills, 3) breach of contract for unpaid services, again asserting the medical provider is an intended third party beneficiary to the Settlement Contract, and further the contract reads all bills submitted prior to the approval of the contract which of course all bills had been timely submitted, and 4) breach of contract implied by fact.
This contract reads, “Respondent will pay all necessary and related medical expenses …that have been submitted to Respondent prior to contract approval and that contain all the required data elements necessary ..” This case is ongoing.
Defendant Insurance Carrier:
Once more based on a settlement contract, this claim prays accrued interest and outstanding medical bills through claims of breach of contract based on the settlement contract itself, breach of contract implied by fact based on the relationship between the parties such that some payments were made and the medical provider was directed to send the bills to insurance carrier, and breach of statutory duty under 8.2(d)(3). This case is ongoing.
What These Claims Mean for Our Clients, Readers and Prospective Clients
If you agree to pay reasonable and related medical expenses, confirm it in writing and pay the bills as soon as they are provided to you with the required data elements (e.g., bills on HCFA 1500’s, CPT codes, etc.). If the providers fail to provide you with the required data elements, advise them in writing and document your file about the request—this documentation should block statutory interest. Additionally, when closing claim files via settlement, your lump sum settlement contract language must be clear and succinct. Consider including a list of bills you agree to pay directly as part of the contract and add language limiting your liability for statutory interest. If you don’t have required data elements, consider confirming that fact, as part of the settlement.
Just as important, confirm Petitioner will be liable for any bills not specifically mentioned in the contract. These are just a few simple but useful suggestions for avoiding any surprising post contract or post payment claims.
If you have any specific questions, send a reply. We appreciate your thoughts and comments.
Synopsis: Part II on Handling Medical Bills in an IL WC Settlement—Never, Ever Agree to Pay “After-Discovered” Medical Bills.
Editor’s Comment: Our goal in settling IL WC claims is to get all accepted medical care paid to insure an innocent Petitioner isn’t left stuck holding the bag because work-related medical billing was in transit or under consideration by the insurance carrier/TPA or self-insured employer. We recently were asked about language included in draft lump sum settlement contracts indicating the employer/insurance carrier would pay any and all medical bills, even if they weren’t aware of such medical care or billing at the time of settlement. The attorneys at KCB&A would never sign WC settlement contracts with the “after-discovered” medical bill language.
We urge all our defense readers and clients not to do so and here is why. In our view, you should only agree to pay bills for medical facilities of which you are aware or for care you approved/certified prior to contract approval. We have had several Petitioner/Plaintiff attorneys intentionally hold back bills because they knew it would block settlement. In handling a recent claim, one well-known Petitioner/Plaintiff attorney held the bills back and waited until after the contracts were drafted to then tell us there was $45K in medical care neither we, as defense counsel, or our client ever knew about.
The settlement in question was for a relatively reasonable amount of money for PPD—let’s say it was $10,000. In handling a settlement of that size, counsel knew if they tossed $45K in unpaid bills on the table, we might nix the settlement due to the highly increased and surprise amount. Please note if the client acting without counsel or if we, as defense counsel had signed settlement contracts with “after-discovered” language requiring payment of any and all medical bills, we would have owed the $10,000 and the $45,000 in bills if that was the amount they would code at under the IL WC Medical Fee Schedule. We are certain our client hadn’t reserved for that amount and everyone would have been furious to learn we had been taken advantage of.
You can also ask the rhetorical question--what if there were $145K in unpaid and unknown bills? What if there were $245K? In our view, you want your files to close when you settle them. As we indicate in the article above, one of the best things about IL WC law and practice is finality at the time of settlements to include closure of medical rights. If you sign lump sum contracts with “after-discovered” language, you haven’t closed anything. Years later a claimant could first come forward with unpaid bills that you knew nothing about and seek payment and/or a judgment under Section19(g) against you.
If you don’t think there are Petitioner attorneys out there who might ask you to blindly agree to pay medical bills at whatever amount, trust us, they are everywhere. The best approach is to contact KCB&A about your settlement contracts to insure they are functional, match the statute and protect you by effectively and forever close your claims.
We appreciate your thoughts and comments.
Synopsis: Another International “Mega-Study” Confirms No Scientific Association Between Carpal Tunnel Syndrome and Typing/Mousing or other Computer Use
Editor’s Comment: We see claim after claim asserting keyboarding, typing, mouse clicking and mouse dragging cause or contribute to carpal tunnel syndrome or CTS. At one point, over half of the workers at an Illinois correctional institution were making CTS claims (we note those claims arose from supposedly using keys to open cell doors and driving supposedly shaking steering wheels). Both the Arbitrator adjudicating such claims and the state adjuster at CMS got CTS settlements. At one point in IL WC, it seemed like CTS claims were indefensible and a source of major awards/settlements. It is our view that in the last three-four years, the CTS trend has turned back dramatically in Illinois.
We feel everyone with a sore wrist always points to their keyboard or mouse as the basis for the claim. We have seen study after study on the topic and lots of debate. As we have advised Arbitrators/Commissioners in Illinois WC and Hearing Members in Indiana WC, scientific data developed across the globe to date does not show a scientific association between the two. Our concern is the lack of a scientific link doesn’t stop WC rulings that rely wholly on complaints of the claimants but have no basis in science, research or medicine. Please remember if you have CTS and suffer from its symptoms, you are going to have it at work—the appearance of symptoms doesn’t mean they were caused or “aggravated” by work.
A group of French researchers has completed what is called a meta-analysis of various epidemiological studies conducted on this subject over a twenty-year period. A “meta-analysis” uses a statistical approach to combine the results from multiple research studies over a long period of time and from many sources. The results and analysis were published in the February 2014 edition of Journal of Occupational and Environmental Medicine: Is Carpal Tunnel Syndrome Related to Work Exposure at Work? A Review and Meta-Analysis. In short, the review and meta-analysis found, “it was not possible to show an association between computer use and CTS.”
Four databases (PubMed, Embase, Web of Science and the French Public Health Database) were searched for relevant studies conducted during the 1992-2012 timeframe. This originally yielded 77 different research studies, a number which was further reduced by including only those studies which
a) Used a control group;
b) Confirmed a CTS diagnosis by electrophysiological investigation or hand surgeons; and
c) Assessed the association between computer use and CTS with blind-reviewing.
Using these parameters, the final tally of studies included in the meta-review totaled six. There were three scientific studies from the United States, 1 from Denmark, 1 from Sweden and 1 from Taiwan. The meta-analysis reviewed all the raw data collected by these studies. This included the type of computer use, the number of hours worked and the ergonomic conditions at work.
Based on the data in the reviewed studies, the meta-analysis reached a scientific conclusion there was no evidence of a scientific association between computer work and CTS.
Various studies have found complaints of finger, hand and arm pain are common among computer users. Does this signal a contradiction in findings? The meta-analysis suggests several reasons, one of the most prominent being the complexity involved in evaluating computer work exposure. For example, some of the data reviewed indicated that when evaluating finger, wrist and forearm positions, there may be a difference between keyboard use and typing and mouse use. Besides differences in computer usage mechanics, variables in hours worked and ergonomic conditions may cause variations. For example, one study reviewed indicated symptoms increased when working more than 12 hours per day.
As to ergonomic conditions, while these “may be associated with an increased CTS risk, requiring intervention” the risk is “not sufficient to claim occupational compensation for computer use.” Moreover, while the meta-analysis suggests the possibility of an increased CTS risk for prolonged mouse use, coupled with ergonomic “errors”, it does not state how much mouse use is considered “prolonged” nor identify the perceived ergonomic “errors”.
We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: Eight Days to the IL Gubernatorial Primary—We Join with the Chicago Tribune to Endorse Bruce Rauner in the Illinois Republican Primary.
Editor’s comment: Our goal as a news source is to remain bipartisan. Therefore, if you are a Democrat, vote for incumbent Governor Pat Quinn in the Democratic side of the March 18, 2014 primary.
On the Republican side, we were happy to see the Chicago Tribune endorse Mr. Rauner. We join with them in doing so. Please note a few fairly important things:
· Illinois taxes and highway tolls have been recently raised to record levels;
· Our state’s unemployment is wildly high—people, jobs and businesses are leaving;
· Our state pension debt is over $100B—the soaring debt won’t result in “bankruptcy” as state governments can’t seek bankruptcy protection but it is certain to cause more business-busting taxes and tolls;
· Our state is effectively “bankrupt” as we haven’t timely paid bills in years and are always several billion behind;
· IL Senate President John Cullerton has openly confirmed the only path their administration has to bring government back into economic shape is to dramatically raise taxes and tolls even further;
· Illinois has 88 state agencies, many of which are admittedly redundant and duplicative; actually most of IL government is redundant/duplicative, as IL politicians like to control lots of jobs whether we need them or not;
· There are literally hundreds of ways our state government could provide the same or better services for less money but would require strong management we aren’t getting—if you want some of our thoughts on simple cost-cutting measures, send a reply.
Bruce Rauner is an amazing and successful business person.
· He is the first gubernatorial candidate in years who can’t be bribed and doesn’t owe any group political “tokens” or pay-backs;
· He will pick the best candidates for important state positions and work to select the best vendors to supply state agencies;
· He will make strong decisions to save taxpayers money and cut waste and government redundancy.
If you like the status quo, vote for one of the other Republicans who all have been in our dysfunctional state government for years without any answers or plan. If you think we need a change, vote for Bruce Rauner today or at your polling place on March 18, 2014.