Synopsis: Why are Illinois Workers Compensation Rates So Expensive? Thoughts from a Reader.
Editor’s comments: Following our KCB&A Update about Governor Rauner’s Turnaround Agenda, a reader provided his best thoughts on needed IL WC reform for your consideration. We have heard similar thoughts from many readers and publish this important article for your consideration and comment.
Why are IL WC Costs So Expensive:
It is a simple answer that is directly linked to the symbiotic relationship Petitioner attorneys sometimes have with a selected group of medical providers. These medical providers (typically the proprietors of their practice) have an endless stream of referrals and financially benefit from prolonging the course of treatment which in turn drives up the value of the claim for their attorney counterparts.
The high cost and duration of supposedly work-related medical care then extends far beyond what would normally be considered reasonable or necessary if there was no underlying litigation. And if that was not enough, these money-driven medical providers legally have the ability to offer and direct unlimited referrals to their counterparts. This endless and unhappy cycle leads to ballooning work comp settlements or awards which in turn increases Illinois insurance rates which are presently the 7th highest in the nation, and far beyond any of our neighboring states.
Medical Accountability Needed
Illinois needs to hold accountable those medical providers seeking to game the system by creating a way to effectively discipline them. This discipline needs to be enforced at the state level and most importantly by Illinois arbitrators. Arbitrators are far more likely to rule fairly if legislation provides specific guidelines, as it did with the recent limit on the value of carpel tunnel claims.
One of the only saving graces insureds and self-insureds in Illinois currently have, is the ability to request utilization reviews (URs), which are based on ODG guidelines. URs are used to demonstrate what is considered reasonable medical treatment and are presented to all parties involved in the case. It is commonplace for massive amounts of medical treatment to overshadow UR non-certifications and those attorneys who directed the medical care are fully aware of that. Arbitrators become mediators over medical care, forcing insureds to pay for medical care and bills that were deemed medically unwarranted by the UR. Under the present system, IL WC Arbitrators decide what is medically warranted/reasonable, rather than deferring to the expert tool specifically designed by the state legislature for this purpose.
IL WC Has No True Remedy for Unneeded and Expensive Medical Treatment But Needs One!
If an employer or claims handler would like to take an aggressive stance against a medical provider, they can presently file a claim with the IDFPR. However, you will likely be rewarded for your trouble with a complete lack of any response no matter how egregious the medical provider’s excessive medical treatment or billing is. In my view, that has to change and something has to be done about unneeded, endless and expensive medical care in the workers’ comp arena.
At some point, we hope the IL WC Commission itself consider steps to black-list or bar some medical providers from the system. The IWCC can’t stick its head in the sand forever—when everyone knows a medical provider is abusing the process, something needs to be done to push back.
Issues of causation, fraud, prescription of medically questionable durable equipment and compounds and excessive medical costs are topics for another day, but much of it would not be allowed to sully our system if these aforementioned relationships did not exist. These medical providers, some of which can be tracked back to the Federal investigations and scandals of Raghuveer Nayak, Blagojevich and Jesse Jackson Jr (notice a trend), will continue to damage the state of Illinois’ workers compensation system and financial well being if there is no legal recourse in place to keep them in check. If we had the ability to cut the head off the snake, the snake could not bite us. If we develop effective ways to challenge and possibly bar questionable medical providers in this state, we would be better able to get to the goal of moving IL WC costs to the middle of the pack of all U.S. WC systems.
Ben Lewis, Surestaff Risk Manager
Synopsis: Overview and Definition of Illinois Work Comp Benefits
Editor’s comment: As we begin the summer, we wanted to provide our readers with a WC teaching update.
Workers’ compensation throughout Illinois and the world provides three main benefits for injured workers: medical care, temporary total disability and permanency. This is a quick outline of Illinois WC benefits:
Medical benefits: Injured workers are entitled to full medical coverage of all reasonable, necessary and related medical care arising from their injury. Illinois enacted a medical fee schedule, effective February 1, 2006, for all related and necessary medical treatment. The fee schedule is changed every year to follow inflation.
Temporary total disability: Illinois allows for 66-2/3% of an employee’s average weekly wage during all periods they are temporarily totally disabled from all work.
Temporary partial disability: If an employee returns to any work following injury—part-time or full-time light duty work at a lower rate of pay on a temporary basis—Illinois law requires an employer make up the difference as TPD, or continue to pay temporary total disability until the employee returns to full duty.
Permanent disability in the IL WC system is awarded in six ways:
1. Serious and permanent disfigurement: Typically, burns or scarring outside the ‘strike zone’.
2. Specific loss: Some relative legal definition of percentage of loss of a specified body part or ‘member’—Illinois relies in part on AMA ratings in determining specific permanent loss.
3. Nonspecific loss (typically referred to as ‘body as a whole’): Some relative legal definition of percentage of loss of the whole body—again Illinois relies on AMA ratings as one of five factors in determining permanent loss/impairment/disability.
4. Wage differential benefits: Two-thirds of the difference between what the employee would have been making in his old job at present wage levels versus a new, permanent lower-paying job caused by work-related injury or disability.
5. Total and permanent disability: Two-thirds of the average weekly wage for life. Please note Illinois has a very high minimum and maximum rate for total and permanent disability, and unlike other states there is no cap on the number of years.
6. Death: Two-thirds of the average weekly wage is payable to the surviving spouse and dependents for twenty-five years. Please note Illinois has a very high minimum and maximum rate for death benefits.
Other matters which may be characterized as WC benefits which any adjuster should be fully aware of:
Vocational rehabilitation is a benefit that may be claimed and/or awarded in specific circumstances. In rare instances, the Commission may order complete re-education or retraining of an individual at the employer’s expense due to an injury-related limitation and job change.
‘Maintenance’ was a term with a tortuous history in Illinois. In 2006, it was codified to equate with the TTD benefit when someone is in vocational counseling and hasn’t yet returned to any work. We always thought we were smart enough to know TTD and maintenance are the same thing but our old Chairman fought to use a duplicate term for the same thing!
Mileage to treating doctors is also a question mark in Illinois—there is no requirement that Illinois employers pay mileage to medical providers in our Rules or Act. There is one odd case that says it is due—the ruling has been routinely ignored. We tell all of our defense clients, don’t, please don’t pay mileage to treating doctors.
For Respondent to schedule an Independent Medical Examination and have the employee legally required to attend, the employee is entitled to mileage, meals, and time lost from work in advance of the appointment. Effective July 20, 2005, the mileage amount based on the current IRS mileage rate is required to be sent to the employee with notice of the IME.
An Illinois employee can seek civil damages for retaliatory discharge and termination or failure to recall as a result of seeking workers’ compensation benefits. This would arise from a separate common law action and would not be heard by the IL WC Commission.
Penalties in Illinois are 50% of the amounts payable for temporary total disability or permanent partial disability which are not paid for frivolous reasons or withheld solely for delay. Penalties can be awarded for not paying penalties resulting in an additional 50% of the 50% already awarded. Although we are not aware of it happening, this could occur on an indefinite basis!
There is an additional penalty of $30 dollars a day with a cap of $10,00.00 which can be awarded for not paying temporary total disability for frivolous reasons or solely for delay.
There is an additional penalty of $30 dollars a day with a cap of $10,000.00 which can be awarded for not paying medical bills that are submitted with appropriate documentation after thirty days has passed.
Attorneys’ fees in Illinois, typically 20% of the disputed benefits can be ordered payable by the Respondent at the discretion of the Commission when benefits are withheld frivolously or solely for delay.
If you have questions or concerns about any of these issues, send a reply. We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: Why It Is Challenging to Create Teaching Materials in Work Comp Across the U.S.
Editor’s comment: We are asked all the time why there aren’t more solid resources for beginners and mid-level execs + claims handlers to understand WC law and practice. In Illinois Workers’ Compensation Practice, there is a distinct challenge when creating reference materials. It is the goal of our lawyers and firm to provide you with the ‘rules’ or what is sometimes called the ‘letter of the law.’ The difficulty is that portions of the Illinois Workers’ Compensation Act and administrative rules are virtually impossible to accurately decipher. For one simple example, take a look and try to make sense of Section 10 on the calculation of the average weekly wage. Because of this arcane nature and the vague and unpredictable rulings which result, a student of the law could spend years reading the statute and still have no idea how to predict the outcome of a fact situation based on Commission and reviewing courts interpretations of those laws.
Illinois workers’ compensation law may be intentionally or unintentionally drafted to allow administrators substantial leeway in interpretation depending on the political group in power or even the whim of the interpreter. By contrast, Indiana WC law is clear and their administrators work hard to keep it simple and patent for both sides.
Illinois workers’ compensation rules and law also are subject to reinterpretation as rapidly as the turnover from state and judicial elections, along with the quirky political tides between elections. For those reasons and more, if you are going to understand the ‘letter of the law,’ you must not look solely at the language of the statute or rules—you must also investigate the chatter, gossip and rulings with the current interpretation of the statutes.
Another problem present today is the daunting complexity of the issues involved. For example, our average weekly wage calculation has been the subject of endless debate yet remains a convoluted concept. It is easy to understand the problem of the writers of this legislation when faced with the task of drafting a statute that will fairly value the wage of the minimum wage earner, the seasonal construction laborer, the truck driver, and the professional who may pay their own expenses from earnings, and all the other means that income is paid to a particular worker. Some courts have expressly indicated that they interpret this Section to provide a ‘windfall’ to the worker - others have recoiled from such largesse. The current Section 10 is not a brilliant effort as enacted but it is the reality of what you will face when handling Illinois workers’ compensation law.
Another issue with consistent application of a statute is that many times the letter of the law is simply ignored by the court or arbitrator but no one has a sufficient monetary stake to actually fight to a conclusion in the Appellate or Supreme Court. A clear example of this concept is ‘mileage to treating medical providers.’ We challenge anyone reading the Illinois statute or administrative rules to locate language that indicates this expense is to be paid by the employer.
If you become challenged in understanding how longstanding IL workers’ compensation law can be routinely changed by the reviewing courts, we recommend you review the Illinois State Chamber’s 2013 treatise The Impact of Judicial Activism in Illinois, Workers’ Compensation Rulings from the Employer’s Perspective. This document remains available online at
This source indicates how the Illinois reviewing courts’ analysis of the law may change rapidly. This document outlines the problems of accurately advising our readers and students ‘this is what the Commission is doing’ without being able to point to clear legislative language which indicates why.
Either way, like it or not, much of Illinois workers’ compensation practice requires that you keep in close touch with knowledgeable defense counsel like the team at KCB&A. You sometimes need to know what is currently happening at the IWCC rather than read a boring statute!
We appreciate your thoughts and comments. Please post them on our award-winning blog.