Synopsis: Will New IL Health Care Fraud Task Force Stop Medical Fraud and Waste in the State Work Comp System Or Is It Another Phony, Feel-Good Blue-Ribbon Panel?

Editor’s comment: Most folks forget work comp benefits are primarily health care costs. Three main benefits are provided to an injured Illinois worker

Ø Health care coverage for reasonable, necessary and related medical care;

Ø Lost time or wage replacement benefits called TTD and TPD in this state and

Ø “The Settlement” or something for permanent loss or impairment.

Of the three main WC benefits, we are sure medical costs are supposed to be the main or highest cost in any work comp claim, whether in Illinois or across the globe.

With those factors in mind, on April 5, 2016, Governor Bruce Rauner signed Executive Order 16-05, creating a new IL Health Care Fraud Elimination Task Force (or IHCFETF) to address abuse and waste in our State's health care programs. From our perspective in the trenches, it appears their focus is going to be group healthcare for non-work-related injuries but one never knows. The Task Force will be led by Executive Inspector General Maggie Hickey and consist of 11 other designated officials, including the Director of the State Police Medicaid Fraud Control Unit. Unless further renewed by a subsequent Executive Order, the Task Force is currently scheduled to continue until June 30, 2019. The executive order can be viewed online https://www.illinois.gov/Government/ExecOrders/Pages/2016_5.aspx

According to the Order and the Governor's Office, the Task Force is directed to take a "comprehensive," "holistic," and "cross-agency, data-driven" approach to stopping and eliminating health care fraud, waste, and abuse in all IL taxpayer-funded programs, like the

Ø Illinois Medicaid program,

Ø State Employees Group Insurance Program, and

Ø Workers' Compensation Program for Illinois agencies, boards, and commissions.

This Executive Order highlights Illinois's FY 2015 expenditure of more than $19 billion each year on IL State health care programs such as Medicaid and group insurance and notes the innovative and successful anti-fraud efforts being taken by the federal government, other states, the private sector, and various Illinois state agencies. The Task Force will reportedly draw on these approaches and other information gathered to recommend strategies for improving Illinois's fraud prevention and enforcement efforts.

Specifically, the IL Health Care Fraud Elimination Task Force has been charged with gathering information on areas such as:

Ø The forms of fraud currently present in state-administered health care programs, including system wide fraud and abuse.

Ø State agencies and resources currently involved in health care fraud prevention and enforcement.

Ø Best practices for fraud prevention and enforcement used by the private sector, the federal government, and other states.

Ø The use of data analysis, predictive analysis, trend evaluation, and modeling approaches.

Additionally, this Executive Order directs the Task Force to, among other things:

Ø Develop, in tandem with industry experts, a multifaceted strategy for reducing exposure to healthcare fraud and recovering taxpayer funds.

Ø Recommend improved internal controls for state agencies.

Ø Identify, if applicable, additional agencies and resources that should be involved in health care fraud prevention and enforcement.

Ø Assess how the observed best practices can be applied in Illinois.

Ø Prioritize prevention and enforcement areas to optimize taxpayer investment.

The IL Health Care Fraud Elimination Task Force is required to conduct at least one public meeting per quarter. By October 2016, submit an initial report to Governor Rauner on their identification efforts. Following the October 2016 report, periodic reports will be made to the governor and public on the Task Force's progress.

We hope this isn’t another phony, feel-good blue-ribbon panel that never meets and never does anything. We remember the 2011 Amendments to the IL WC Act created the IL State Workers’ Compensation Program Advisory Board designed to review, assess and make recommendations to improve the State workers’ compensation program. The Governor was to appoint one member of the IWCPA Board with the Speaker Of The House and Minority Leader to appoint other members. Members of this board were to serve three year terms. Our kooky legislative leaders debated who was to be on the IWCPAB for a long time and finally made their picks. Thereafter, the IWCPAB has never had a single meeting or done a darned thing. Turns out IL State government is still shoveling out over $100M in work comp costs to state workers that we feel is the highest in the U.S., other than California. You may note they still carefully track who is on this do-nothing Board at http://appointments.illinois.gov/appointmentsDetail.cfm?id=428.

Please also remember the IL State WC Program still isn’t using what one of our clients called a “complete no-brainer” to save medical costs—an IL WC PPP or Preferred Provider Program. Only in Illinois would our goofy legislators create and sanction this solid method of saving medical costs and not use it for their own workers. When it comes to saving tax dollars for Illinois taxpayers, we have one of the most comical groups of leaders in the entire country—it appears they just don’t get it. Let’s hope someone tips the IHCFETF to this simple change to save zillions.

We also hope someone in the new IHCFETF will start to notice there are a number of doctors, clinics and chiropractors across the state that engage in predatory practices to manipulate billing/coding to insure they demand astronomically high medical charges for questionable medical care. For one hilarious example, we saw a doctor prescribe a tube of “pain” paste that he wanted $5,000 for—the tube’s content included Ketamine, a horse tranquilizer and psychedelic drug. Everyone knows who does silly stuff like this and little is done to actively stop it. For another example, the concept of having patients “pre-assign” medical rights to allow civil actions directly against employers and insurance carriers is, in our view, another such questionable medical/legal practice.

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Synopsis: Illinois Workers' Compensation Lawyers' Assn. CLE Presentation on the Continuing Development and Implementation of AMA Ratings. Thoughts and analysis by Lilia Y. Picazo, JD.

Editor's Comment: On April 14, 2015, WCLA representatives discussed various cases using impairment ratings in a continuing legal education format. As you know, Section 8.1(b) of the Act requires the level of permanent disability be based on the following factors:

Ø Reported level of medical impairment rating;

Ø Occupation;

Ø Age;

Ø Future earning capacity; and

Ø Evidence of disability corroborated by the treating medical records.

From the IL WC Act "No single enumerating factor shall be the sole determinant of disability. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order." It is initially important to distinguish "disability" and "impairment" as they relate to a permanent partial disability award. The most current AMA Guide indicates disability is determined by an administrative law judge and may or may not have a relationship to impairment. In other words, the AMA impairment rating is an element of the permanent partial disability award.

The jury remains out on this concept as the Arbitrators and IWCC still sort of follow ratings and sort of don’t. It seems the word “shall” in the IL WC Act may be unclear to some of them. The following are examples of cases where impairment ratings were analyzed:

Darnel Dash v. City of Chicago: This case involved a 55 year old asphalt helper who sustained soft-tissue injuries to his lower back as a result of an undisputed lifting injury. Petitioner was prescribed physical therapy and medication and received twenty-nine weeks of TTD. From traditional IL WC reserve analysis, we would consider this a 0-5% BAW claim. At arbitration, the Arbitrator awarded Petitioner 6% MAW. In determining the PPD award, the Arbitrator analyzed the above five factors. We note no weight was given to an AMA rating as no PPD impairment report or opinion was submitted into evidence. With regard to the remaining four factors, the Arbitrator gave greater weight to Petitioner's occupation and age noting Petitioner was 54 years old at the time of the injury and the nature of his job required heavy-type work. While Petitioner returned to work at the time of arbitration, the Arbitrator gave some weight to Petitioner's future earning capacity and pointed out Petitioner had not yet performed his winter work responsibilities. The evidence of disability was corroborated by medical reports, including MRI exams.

The Commission modified the Arbitrator's award down to 3% MAW. The Commission noted most arbitrators use a claimant's advanced age as a factor in limiting a PPD award rather than increasing it because of the shorter period of time one lives with the disability. Furthermore, the Commission found the simple fact Petitioner had not yet commenced his winter work duties should not have been taken into account for increasing a PPD award based on future loss of earning potential.

Andrew Tull v. Evergreen FS: This case involved a 55 year old fertilizer plant manager who sustained injuries to both shoulders and back as a result of a slip and fall. Petitioner underwent two surgeries to his left shoulder, one surgery to the right shoulder and conservative treatment for the back. Under traditional analyses, the value would be 20% BAW for the double-operated shoulder and 15% BAW for the single operated shoulder with something like 0-5% BAW for the back strain. Here, an impairment rating was performed by the eminent Dr. David Fletcher pursuant to the AMA Guide Sixth Edition. Dr. Fletcher provided an impairment rating of 0% for the lumbosacral sprain, 5% for the right shoulder and 4% for the left shoulder. At the time of arbitration, Petitioner was 55 years old with 26 years of experience as a fertilizer plant manager and had returned to his prior job. Petitioner's complaints were corroborated by the medical evidence presented.

Upon analysis of the relevance and weight of the five factors, the Arbitrator awarded Petitioner 12.5% MAW for the left shoulder, 10% MAW for the right shoulder, and 0% MAW for the back. In our view, the Arbitrator didn’t adopt Dr. Fletcher’s rating but the values were mildly lower. The award was affirmed and adopted by the Commission.

Paul Lowther v. Decatur Ambulance: This case involved a 52 year old paramedic who sustained injuries to his back moving a heavy tool box. Petitioner was treated conservatively with pain medication and physical therapy. At the time of Arbitration, Petitioner had not yet returned to his prior job position. The Arbitrator awarded Petitioner 10% MAW. Respondent requested an impairment rating by Dr. Soriano. Dr. Soriano gave a zero rating and opined Petitioner did not sustain any permanent disability based "on an objective radiological and physical exam basis."

Here, the Arbitrator gave no weight to the medical impairment rating when determining the PPD award. The Arbitrator claimed there was difference between the concepts of "disability" and "impairment" as defined by the AMA Guides Sixth Addition noting it was unclear whether Dr. Soriano "appropriately applied the AMA Guides in formulating his opinion." We consider that complete guess work by our hearing officer. The Commission affirmed and adopted the arbitration award. In our view, such a response flies directly in the face of the simple language of the statute which requires a rating to be considered in some fashion.

Ronda Young v. SOI DHFS: This case involved a 39 year old case worker who sustained right carpal tunnel syndrome as a result of repetitive trauma. Petitioner underwent right carpal tunnel release. Respondent's Section 12 Examiner, Dr. Li, stated in his IME report and confirmed at his deposition Petitioner had an AMA impairment rating of 1%. The Arbitrator, after analyzing the five factors awarded Petitioner 12.5% loss of use of the right hand. Again, we consider such a ruling to completely ignore the statutory requirement.

Here, the Arbitrator gave minimal weight to Dr. Li's impairment rating noting Dr. Li did not state in his report or at deposition whether the AMA impairment rating was in regard to the right upper extremity or the body as a whole. The Commission affirmed and adopted the Arbitrator's award, but modified the statement regarding Dr. Li's AMA impairment rating to "1% entrapment of the right upper extremity or 1% of the whole person." With regards to the weight given, the Commission modified "minimal" to "moderate."

We note AMA impairment ratings are customarily provided and have been considered in claims to provide lower permanency ratings for any injury occurring after September 1, 2011.

This article was researched and written by Lilia Y. Picazo, JD. The opinions Lilia is voicing are hers and not those of any member of WCLA or its board. Lilia can be reached 24/7/365 for questions about WC at lpicazo@keefe-law.com.

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Synopsis: Indiana Employee Retaliatory Discharge Claim Still Survived and Thrived Even When Employer Had A Non-Retaliatory Reason For Termination. Research and Analysis by our IN Defense Team Leader, Kevin Boyle, JD.

Editor’s comment: In a somewhat shocking development from typically conservative Indiana courts, the Indiana Court of Appeals recently affirmed a former employee’s $412,680 verdict where his employer allegedly fired him without cause after he filed a worker’s compensation claim in Best Formed Plastics, LLC v. Shoun, 2016 WL 614025 (February 16, 2016 Ind. Ct. App.).

In this claim, the Employee injured his shoulder at work, received treatment, and returned to employer with restrictions thereafter. However, when he returned, the employee and his boss had some verbal arguments about the severity of his injuries and how much it had cost the employer. The employee continued to work under his medical restrictions for a few more weeks, but then was told “due to lack of work,” employee should not come back to work for a few weeks but if “sales rise, we will bring him back.” No other employees were told their services were no longer needed due to this alleged downturn in sales. In fact, the evidence showed sales were not down but actually increased during this time period.

The evidence also included some strongly worded employer’s Facebook posts and emails on their doubts about out his injury and the negative effects it would have on their work comp insurance. The employer eventually terminated him and he filed this civil case for multiple claims including he was fired as retaliation for filing his compensation claim.

After discovery and a trial, the jury awarded him $412,680 in compensatory and punitive damages on the retaliatory discharge and invasion of privacy claims. The employer filed a timely appeal.

On appeal, the employer claimed there was clear evidence he was physically unable to perform the functions of his pre-injury work. The Court disagreed and held an employer cannot defeat a retaliatory discharge claim merely because employer articulated a non-retaliatory reason for discharge. In Indiana, the Frampton three-step analysis is used which requires employees to present evidence that directly or indirectly implies the necessary inference of causation between the filing of a worker’s compensation claim and the termination.

The burden then shifts to employer to articulate a legitimate nondiscriminatory reason for the discharge. If the employer carries its burden, the employee then must prove employer’s reason is a pretext. i.e. the reasons are:

1) Factually baseless or made-up;

2) Not the actual motivation for this discharge; or

3) Insufficient to motivate the discharge.

The reviewing Court held based on the evidence, the employer terminated him solely in retaliation for filing his worker’s compensation claim. In this case, the analysis did not end merely when employer found a non-retaliatory reason.

The Court also affirmed the jury’s damages awards. They found the jury’s award of $337,680 on the retaliatory discharge claim for lost income and benefits was not excessive. The extra $50,000 in punitive damages on the claim was also affirmed giving juries “a great deal of discretion in assessing damages.” After subtracting unemployment and worker’s compensation benefits received, as well as other wages earned, his loss of past income was $71,809.36, and his future loss of income and benefits was $265,870.64, all of which were “clearly within the bounds” of the evidence.

In our view, the employer might have been better suited to seek to replace the worker “in the normal and ordinary course of business.” Indiana and Illinois allow an employer to keep their businesses operating and when someone is off for extended period after an injury, you can replace them to keep your business running. If you keep the worker on your payroll and bring them back to the workplace, it is much more challenging to let them go without reasonable accommodation required under ADA.

If you have EPLI defense lawyers from the big blue-blood defense firms, you may be paying $500, $600, $700 per hour or more!! You can’t possibly “defend” your company at those staggering legal defense rates—you are certain to “lose” the employment practices or retaliatory discharge claim to your own high defense costs. Our rates are under $300 an hour and we do very solid defense work and counseling. If you have concerns about retaliatory discharge or employment practices in IN claims, feel free to contact Kevin Boyle for his best defense advice and thoughts at kboyle@keefe-law.com. For IL retaliatory discharge or employment practices claims, contact Brad Smith at bsmith@keefe-law.com.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

KCBA Blog

4-18-2016; New IL Task Force for Healthcare and WC--Is It Real?; Lily Picazo Reports on Impairment Rating Presentation by WCLA; Kevin Boyle on Important IN Appellate Ruling on Retaliatory Discharge...