Synopsis: IL Medical Care Providers Cannot “Lien” An IL Worker's Claim or Settlement To Recover Unpaid Medical Bills.

Editor’s comment: In their ruling in In Re Hernandez, No. 124661, our Illinois Supreme Court followed longstanding precedent to rule a pending WC claim and the proceeds of an IL workers' compensation settlement are not amenable to liens or claims by medical providers who treated the illness or injury.

The facts indicate between 2009 and 2011, Claimant Hernandez sustained on-the-job injuries and received medical treatment from Ambulatory Surgical Care Facility, Marque Medicos Fullerton LLC, and Medicos Pain and Surgical Specialists S.C.

In December 2016, she filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court for the Northern District of Illinois. She reported she owed

$28,709.60 to Ambulatory Surgical,
$58,901.20 to Marque Medicos Fullerton, and
$50,161.26 to Medicos Pain and Surgical Specialists.

You will note these medical bills total $137,772.06.

Claimant Hernandez reported minimal assets, listing $1,300 in bank accounts, some inexpensive jewelry, and her pending workers' compensation claim, which she valued at $31,000.

Two days later, Hernandez settled her claim for $30,566.33 or 7.5% BAW. You will also note the unpaid bills were around 4 times the amount the claim settled for. The settlement was approved by Arbitrator Kane. Claimant entered into the settlement without consulting the bankruptcy trustee because she believed the full amount of her settlement was exempt under Section 21 of the IL Workers’ Compensation Act.

Section 21 generally provides no payment under the IL WC Act shall be assignable or subject to most liens or be used in any way for most debts, penalties or damages. The three medical providers, Ambulatory, Marque Medicos Fullerton and Medicos Pain protested, and a bankruptcy court judge found Hernandez’s settlement proceeds were not off-limits to the named care providers.

Claimant Hernandez appealed to the U.S. District Court for the Northern District of Illinois. A judge affirmed and Hernandez sought review by the U.S. 7th Circuit Court of Appeals. The Seventh Circuit is the penultimate step before a case might go to the U.S. Supreme Court. The parties agreed Section 21 historically placed workers’ compensation awards beyond the reach of creditors in bankruptcy proceedings, but they disagreed as to whether the rule remained true after the IL WC Act was amended in 2005.

The 7th Circuit noted neither the Illinois Appellate Court nor the Illinois Supreme Court has addressed the effect of the 2005-2006 Amendments to Section 21, so it certified the issue/questions to the Illinois Supreme Court.

The Illinois Supreme Court noted federal bankruptcy laws contain provisions specifying what property may be claimed as exempt, but an individual may “opt out” of the exemption scheme. Illinois has exercised the option, which means that in federal bankruptcy proceedings, state residents are restricted to exemptions granted by state law. For purposes of determining whether property is exempt under Illinois law, the IL Supreme Court said the critical inquiry is simply whether the provision unequivocally protects the identified property against all forms of collection.

Section 21 of the IL WC Act expressly provides any payment, award or decision under the Workers’ Compensation Act is generally free from claims to satisfy debts, the opinion said. The IL Supreme Court confirmed there are a few statutory exceptions to Section 21, including one allowing the beneficiary of a deceased employee who was a member or annuitant under Article 14 of the Illinois Pension Code to assign benefits payable under the Act to the State Employees' Retirement System. The General Assembly has also created an exception to Section 21 to allow workers’ compensation recoveries to be fully subject to unpaid child support monies due. The IL Supreme Court said the provisions demonstrate, when the IL General Assembly intended to create an exception, it expressed its intention in language so clear and explicit that it could not be misunderstood.

“No similarly explicit exception for claims by health care providers appears in the Workers' Compensation Act itself or in any other Illinois statute,” the Supreme Court opinion states.

The health care providers' claim to an exception to Section 21's exemption rests exclusively on the 2005 amendments to the Workers’ Compensation Act. The amendments changed the amount of compensation due employees for accidental injury not resulting in death, and created fee schedules limiting the amount that can be collected for treating compensable injuries. The providers argued an exception to Section 21 for claims by health care providers was somehow “implicit” in the statutory changes, but the Supreme Court was not persuaded.

“The repeal or amendment of statutes by implication is not favored,” the court’s opinion said. “Had the legislature intended to alter the clear and unambiguous provisions of Section 21 by conferring on health care providers a new exception to the exemption, it would have had to indicate a clear intent to do so.”

While one of the 2005 amendments allows health care providers to seek payment directly from an injured employee for outstanding bills, plus interest, following a final compensation award, judgment or settlement, the Supreme Court said the change does not permit health care providers to look to the proceeds as a source of payment.

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Synopsis: Contact Tracking Apps May Be Inexorably Coming to the U.S. and World Workplace.

Editor’s comment: As I have advised my readers, we are not in the first world pandemic and this isn’t going to be the last. The cost of this pandemic has bankrupted various businesses and will be a continuing challenge for all of us in the work comp arena. As I have advised the least expensive WC/OD-related death in IL work comp can be worth over $700K and the top is several million dollars. As we can all tell from what is happening across the globe, pandemics are life-changing events.

How Do Companies and Local Governments “Defend” OccDisease Claims?

In short, we are going to go “analog” to try to track human contacts who might have infected a worker. As a risk or claims manager you would simply ask the sick worker where they have been and who they have been with. You then have to see who might have infected your worker(s), if you can get cooperation from the folks you poll. To me, this is cumbersome and allows for what I will call “fudging.”

On the other hand, a “digital” approach is called “Contact Tracking Apps.”

As the covid-19 pandemic rages, technologists everywhere have been rushing to build apps, services, and systems for contact tracing: identifying and notifying all those who come in contact with a carrier. Some are lightweight and temporary, while others are pervasive and invasive: China’s system, for example, sucks up data including citizens’ identity, location, and even online payment history so local police can watch for those who break quarantine rules. Americans and lots of other folks across the globe don’t want their privacy invaded.

Some services are being produced locally by small groups of coders, while others are vast, global operations. Apple and Google are mobilizing huge teams to build their upcoming systems that notify people of potential exposure, which could be used by hundreds of millions of people almost immediately.

Opinions differ on whether these apps are just a technocratic daydream or—if done correctly—a potentially useful supplement to manual tracing, in which human workers interview people who’ve been diagnosed with Covid-19 and then track down their recent contacts. But the reality is that these services are already rolling out, and many more are likely to come in the next few months.

Despite the avalanche of new tech, we know very little about them or how they could affect society. How many people will download and use them, and how widely used do they have to be in order to succeed? What data will they collect, and who is it shared with? How will that information be used in the future? Are there policies in place to prevent abuse?

When comparing apps around the world, you will learn there was no central repository of information; just incomplete, constantly changing data spread across a wide range of sources. Nor was there a single, standard approach being taken by developers and policymakers: citizens of different countries were seeing radically different levels of surveillance and transparency.

MIT Database

The geniuses at MIT are seeking to create a database with a compendium of information about contact tracing apps. It is easy to find with a simple Google search.

If you’d like to know more about automated contact tracing and exposure notification, here are a few relevant papers and documents.

Outpacing the Virus: Digital Response to Containing the Spread of COVID-19 while Mitigating Privacy Risks (Harvard Center for Ethics)

COVID-19 Rapid Evidence Review: Exit through the App Store? (Ada Lovelace Institute)

Contact Tracing Mobile Apps for COVID-19: Privacy Considerations and Related Trade-offs (Cho, Ippolito, Yu)

PACT: Private Automated Contact Tracing (MIT)

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

Synopsis: Join KCBA’s very own Brad Smith, J.D. for his podcast discussing all trending legal topics.

Editor’s comment: In Brad’s Everything Legal Podcast, Brad discusses the legal world in an understandable and practical way. In his initial episode Brad analyzes the legislation that matters to you and other notable circumstances surrounding the COVID-19 Pandemic. Brad’s podcast will continue to explore legal topics of significance on an ongoing basis. We hope you can subscribe and happy listening to you.

Please subscribe on Apple Podcasts, Spotify, or Anchor by searching “Brad’s Everything Legal Podcast.”

You can also link to the Apple Podcast here: Brad's Everything Legal Podcast.

Synopsis: The “Nuts and Bolts” of Investigating OccDisease Claims with a Specific Focus on this Pandemic and New Rules Mentioned Above—Consider Asking Shawn R. Biery, J.D. for His OccDisease Investigation Protocol.

Editor’s Comment: Shawn R. Biery of Keefe, Campbell, Biery & Assoc understands the challenges this crisis has brought to you and your claims management protocols. Suddenly, we are all being asked to figure out when/where and how someone contracted a life-threatening disease which comes with possible 7-figure OD claims exposure. To understand the risks and costs, please remember Shawn regularly updates his Illinois WC Rate Sheet—if you want a copy, send an email to Shawn or his great assistant Marissa Patel at mpatel@keefe-law.com

What Shawn has begun to detail are crucial investigation materials which you might want to consider--his new OccDisease Investigation protocol to allow you to:

Investigate and verify OccDisease claims for emergency workers covered under the new Rules promulgated by the IWCC;
Investigate and verify claims for other workers possibly not covered by the Rules and
Insure you have a strong basis to accept or deny OccDisease benefits in settings that may come at you and your company very rapidly.

We are constantly working to update the potential investigation protocols. Please again note, as we outline above, any Covid-19 exposure may come with 7-figure risk/reserves on a per claim basis—this is possibly a business-busting concept.

Please also make note, if you don’t diligently investigate, even without a presumption, our IL WC Commission may rule any Covid-19 claim is going to be adjudicated to be compensable.

Those supervisors, managers and adjusters who are now becoming OccDisease investigators will need the following skills:

Interviewing – the ability to draw out the relevant information through effective questioning

Communication (verbal and written) – the ability to interact effectively with injured persons, witnesses and suspects, as well as other investigators, and to communicate the findings of the investigation to a wide variety of individuals and organizations

Technical competence – the awareness of safe working procedures that should be adopted, with particular relevance to the event under investigation

Hazard recognition – the ability to ensure workers and investigators are not exposed to unnecessary risk

Interaction – personal attributes that enable effective relations with other people

Deduction – the ability to scrutinize all the evidence obtained, e.g. through observation, from witnesses’ statements and from documentary evidence, and to form a coherent picture that enables the causal factors to be identified

If you want a copy or someone to consult with an OccDisease Investigations and Rules, feel free to contact Shawn at sbiery@keefe-law.com or John Campbell at jcampbell@keefe-law.com

KCBA Blog

6-1-2020; IL Medical Care Providers Cannot “Lien” An IL Worker's Claim or Settlement To Recover Unpaid Medical Bills; Contact Tracking Apps May Be Inexorably Coming to the U.S. and World Workplace