7-10-2018; Jay Shattuck and State Chamber Reply to Dr. David Fletcher's Comments on IL Senate Bill 904; John T. Bowman and Steve Williams, RIP and more

Synopsis: Jay Shattuck and Our IL State Chamber Reply to Dr. David Fletcher’s Comments on IL SB 904.

Editor’s comment: I received permission to reprint these comments and I am doing so with minimal editing. I will point out Jay Shattuck and IL State Chamber President Todd Maisch are among the sharpest folks in this State when it comes to understanding legislation, in work comp and many other fields. I consider these comments required reading for any doctor, hospital administrator or anyone else who cares about the medical side of IL Workers’ Comp. I encourage my readers to join the IL State Chamber of Commerce that is the leading voice for Illinois business and all taxpayers in Springfield. For more information, visit their website at www.Ilchamber.org.

From Jay Shattuck:

In the recent commentary provided to you and your readers by Dr. David Fletcher, there is little to argue with about his thoughts on the friction in our workers’ compensation system between medical providers and employers paying for medical care. Yes, the court has decided that medical providers do not have a mechanism to collect the 1% per month interest for untimely payment of medical bills and one should be created. Also, there is no justifiable reason for payers to require paper submission of medical bills by medical providers. These seem to be the two main issues that he and many in the medical profession believe need to be remedied to improve the system and retain doctor care for workers’ compensation injuries. What Dr. Fletcher’s commentary and those interests supporting SB 904 fail to explain though is how SB 904 will implement the remedies and the negative impact SB 904 will have on employers responsible for paying of medical services in  our workers’ compensation system.

Like the Greeks were able to fool the Trojans, SB 904 is a Trojan horse piece of legislation. Here’s why:

SB 904 could apply to all medical bills, not just undisputed bills…proponents of SB 904 argued that the changes will only apply to undisputed medical bills meaning that the 1% per month interest penalty would be required on any undisputed bill not paid within 30 days. However, nowhere does SB 904 limit the 1% per month penalty to undisputed medical bills. During legislative debate, legislative intent was offered to clarify that the intent was to limit the changes to undisputed bills. Okay, but any first year law student understands that when a court reviews a statute for its purpose, the court looks at the clear reading of the statute.  If SB 904 is signed into law, here is how the 1% per month penalty subsection will read:

(3) In the case (i) 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, (ii) of or nonpayment to a provider of a portion of such a bill, or (iii) where the provider has not been issued an explanation of benefits for a bill, the bill, or portion of the 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, shall incur interest at a rate of 1% per month payable by the employer to the provider. Any required interest payments shall be made by the employer or its insurer to the provider not later than 30 days after payment of the bill.

 If, the changes in SB 904 were meant to apply only to undisputed bills, why was that not specified in the legislation?

The mechanism in SB 904 to collect the 1% per month is the circuit court… Medical providers argue that circuit court is the appropriate mechanism given the court's familiarity with bill collection issues. That may be true for ordinary business transactions, however the determination of whether a workers' compensation medical bill is compensable is far from ordinary. To decide whether the 1% per month interest penalty is due, a circuit court judge will need to determine whether the bill is for a workers’ compensation injury…is the injury work-related and whether the services were necessary. These are not issues that circuit court judges have expertise. The expertise is found at the Illinois Workers’ Compensation Commission. The initial determination of these issues has been the exclusive purview of the Commission and should remain there.

Arguing these issues at circuit court could prematurely expose the employer's defense arguments, providing an advantage to the petitioner's lawyer and harming the employer's case at the Commission. Also, it is possible that the circuit court could render a decision that is diametrically different than what is determined at the Commission. We believe going to circuit court will lead to more friction and litigation in our workers' compensation system, delaying decisions at the Commission for injured workers and employers.

Instead of circuit court, the Illinois Chamber and other business groups suggested that an award of the 1% per month interest penalty be determined in an expedited process at the Commission. Our proposal also allows a medical provider to petition the Commission and have a decision within 180 days as to whether the 1% per month penalty applies. If the medical provider is unsatisfied with the Commission’s decision, we allow an appeal of the decision to go to circuit court.

 SB 904 could limit access to medical records…Two important change proposed in SB 904 could place significant limits on what records an employer can obtain from a medical provider.

First, during the negotiations of the medical bill payment provisions back in 2005, the employer community was very careful in choosing the word “claim” versus “bill” regarding the requirement for the providing of “substantially all the required data elements necessary to adjudicate the bills” to trigger the 30 day clock. SB 904 in two, critical places changes “claim” to “bill”. These changes could be interpreted to limit records provided by a medical provider to only those needed to adjudicate the bill, (rather than the claim), for the specific services provided by the medical provider. This would trigger the 30 day, 1% per month interest penalty, clock requiring payment before an employer has additional information to determine the cause of the injury, whether it’s a work-related injury, and if the services were necessary.

SB 904 also requires the Department of Insurance to adopt rules to " ensure that health care providers are responsible for supplying only those medical records pertaining to the provider's own claims that are minimally necessary under the federal Health Insurance Portability and Accountability Act of 1996". Employers rely on the ability to access appropriate medical records from treating medical providers to determine causation and whether the injury is work-related. This change allows a medical provider to only provide medical records minimally necessary to pay for the services being billed.  

SB 904 creates new penalties for failure to comply with electronic claims process…A new penalty being sought in SB 904 is adding the 1% per month interest penalty for any reason there is a failure to pay or object to an electronically submitted bill within 30 days. This will add additional confusion as to how and when the 1% per month interest penalty applies.

A second, additional new penalty regarding electronic claims provides an administrative fine of up to $1,000 per each violation, not to exceed $10,000 for identical violations during a calendar year. We believe this is overly punitive and any penalty should be limited to intentional non-compliance or a pattern of failing to comply.

It should be noted that current law does not require a medical provider to submit its bill electronically. If a bill is submitted electronically the payor is obligated to accept electronic claims for payment. The Illinois Chamber has supported electronic billing and electronic payment since its inclusion in the statute in 2005 and believes the time is right to require all transactions to be electronic both from medical providers and payers. 

Illinois Chamber additional suggestions to expedite medical bill payments…We propose adding three provisions to SB 904 to help advance the expediting of medical bills and to reduce friction in the payment process.

  • First, upon receipt of notice of injury, the employer is to provide the employee or the injured employee’s medical provider mailing and electronic addresses to send medical bills to. Adding this step will help prevent medical bills from being sent to improper addresses which results in unnecessary delay of bill payment.
  • Second, an employer is able to timely process medical bills when the bills are submitted to the employer by the medical provider in a timely fashion. To that end, we recommend that a medical provider submit its bill to the employer within 90 days of providing its service to the injured worker.
  • Finally, we recommend that an employer providing a compliant utilization review report has a rebuttable presumption that the 1% per month interest penalty does not apply to the services covered in the utilization report. This will incentivize a medical provider to cooperate with the employer in what is authorized and will reduce the friction caused when payment is sought for unauthorized services.

Dr. Fletcher indicates a crisis is at hand for medical providers in receiving medical payment for services provided in workers’ compensation. The Illinois Chamber hears his words and we agree medical care is a strong determinant of whether the injured worker is able to return to work, the timeliness of the return to work, the need for future medical care, and the impact on disability and indemnity costs to employers. However, SB 904 is not the solution and could dramatically tip the balance in favor of medical providers in a system where Illinois has the second highest medical fee schedule in the country for overall professional services and the highest in the country for major surgery services. SB 904 as sent to the Governor also will diminish an employer's ability to determine causation and whether an injury is work-related.

To show our good faith in solving the two issues Dr. Fletcher points out needing to be addressed, the Illinois Chamber and other business groups had SB 3617 and HB 5910  introduced at the end of May. As we said during the closing weeks of the Spring session when SB 904 was amended with the Illinois State Medical Association’s language, we are prepared to solve their issues with legislative changes that work for them as well as the employer community.

As your editor, I appreciate your thoughts and comments. I am happy to pass them along to both Jay Shattuck and Dr. Fletcher. Please also post them on our award-winning blog.

Synopsis: Steve Williams and John T. Bowman, RIP.

Editor’s comment: The IL WC community was mildly stunned to recently hear of the passing of these two stalwarts of our industry. John Bowman was a long-time friend and colleague of mine and will always be missed. I still remember his battles with a former law partner that I believe went all the way to the IL Supreme Court.

Steven Robert Williams was the son and law partner of the venerable Bob Williams at Williams and Swee—they were both fixtures at the Bloomington IL WC call for decades. Steve and I didn’t always agree but we did have great respect for one another. He left us much too early in his mid-40’s.

KCB&A sends our condolences to their friends and families.