5-24-2011; Illinois Workers’ Compensation Reform Week in Review

We are clearly in the last lap, folks; as you read this, the clock is rapidly ticking down the last eight days of May 2011 and the scheduled end of the current legislative session. We feel confident they aren’t going to waste money by going into overtime sessions, particularly because the State is soooo broke. So, if IL WC reform ever will happen during 2011, it will probably come this week or possibly not this year, infuriating business representatives and corporate CEO’s. Either way, we feel WC reform is needed but we are concerned the powers-that-be are so eager to pass reform that they may be doing things in a hasty and rushed fashion. For this reason, we are concerned the legislation could be less than ideal, with unintended consequences upon implementation.

There is a chance the workers’ compensation reform process may be deferred from the current legislative session and move into an agreed bill process. In the agreed bill reform process, things are hashed out until both sides have things they want and then the legislature and then the Governor basically signs off on it. From our perspective, the problem with the agreed bill process is everything happens completely in secret. We have no idea how one is invited to the table. We are certain the media and public can’t find out what the secret attendees are up to until just before the Governor considers it and signs it. The idea of “public debate” in an agreed bill process is out the door. So whatever happens, keep watching this space—if a bill gets posted on the General Assembly website that we feel may have a chance of passage, we will let you know. We are also going to provide a free webinar to anyone in the IL WC industry who wants our thoughts and expertise. The webinar will be offered sooner rather than later.

RUMORS ABOUND--ARE THEY GOING TO FIRE ALL THE ARBITRATORS AND/OR COMMISSIONERS??

On a related “WC reform” issue, we have to ask our readers--are they going to fire all the Arbitrators? We are now hearing rumor after rumor. Will someone please provide the Illinois WC industry information and direction on what is going on with them? Can the politicians leave our veteran and beleaguered Arbitrators alone and find someone or something else to pick on? We were advised by numerous reliable sources there may be a plan bouncing around to fire all the sitting Arbitrators and possibly Commissioners at the end of the State of Illinois’ fiscal year in five weeks on June 30, 2011. Thereafter, the Governor or the Chairman or some unknown group is supposed to considering reinstating individual Arbitrators and/or Commissioners on a case-by-case basis. There is also a concern a lot of “newbie” and untested Arbitrators may be named. In our view, that is a very poorly hatched plan and we have no idea why it is being bandied about.

This past week, we were advised there may be some Arbitrators who are concerned they cannot ethically set hearings in July 2011 or thereafter. We do feel there may be ethical concerns with setting trial/hearing dates in July if the sitting Arbitrators may not be employed by the State after next month. If the rumors are true and they fire all the sitting Arbitrators, we cannot wait to see the newspaper, TV or web-based news where a widow, widower or starving family cannot get a hearing or a settlement considered because there is no one with a brain available to handle a complex workers’ compensation dispute. As veteran defense lawyers we are always infuriated when politicians and other observers outside this system think it is simple and/or “child’s play” to resolve multifaceted workers’ compensation legal challenges. Veteran Illinois WC Arbitrators have to understand arbitration procedures outlined in the Rules Governing Practice along with the intricacies of the Illinois Workers’ Compensation Act. On top of that, they face the demanding challenge of keeping up with a continuing stream of Appellate and Supreme Court rulings which routinely change the minutiae of their day-to-day decision-making.

Please note the Arbitrators have not been asked by us or anyone else about the “fire-everyone-hire-some-back” plan we outline above. We didn’t ask to avoid jeopardizing their jobs—there is an encompassing clamp-down by the Governor on any comments or discussions by our Arbitrators with the media. All questions of any kind have to be directed to an “I-don’t-know-but-I-might-get-back-to-you-on-that” public relations flack with the Governor’s staff whose job is to deflect and deflect the media from finding out what is actually happening with this $30 million dollar a year state agency. We are certain any inquiry to the PR flack will provide no information of value. We feel this public relations approach from Governor Quinn highlights various contradictions in his governance of our state.

First, he has claimed there is a strong Freedom of Information Act impetus to open up state government to view by the taxpayers. We consider the clamp on the Arbitrators to be a complete contradiction solely designed to dominate the workings of our WC Commission, some of it by people who don’t understand the system.

Second, our Arbitrators are supposed to be civil servants. In contrast to the Commissioners whose positions are openly political, Arbitrators are supposed to be independent and have job protection which allows them to fairly decide the facts before them. That is what “civil service” is for—we have no idea how they are going to summarily fire all these civil servants without hearings or any due process. Whoever thought of this goofy idea is doing precisely the opposite of what “civil service protection” is supposed to mean.

Instead, one of Illinois’ WC system’s age-old secrets is that many of the Arbitrators are treated as political appointees and therefore subject to termination at the whim of the Governor or any other politician. We have long complained the selection process for Arbitrators has been guarded like nuclear missile secrets—we have no idea why the civil service process is hidden from the media. It is also somewhat comical to consider civil service testing results for police and firefighters across our state are openly published but testing for the Arbitrator position which pays double the amount of police/fire positions is kept a tightly guarded secret.

If firing all of the arbitrators is truly being considered, we consider it a travesty. Although we certainly don’t always agree with their decisions, we cannot endorse a mass termination of our seasoned adjudicators. Individual reviews would be a far more prudent approach to consider. If it is coming from the Governor, he hasn’t announced it on his website or in the media. The IWCC itself didn’t meet to make the decision. The Illinois Workers’ Comp Advisory Board didn’t meet to make such a determination. We have no idea who is doing this, how it is being done or why. Hey, the Commission handles something like $3 billion in benefits for injured workers and spouses of decedents in this state; is it conceivable there is anything good about firing every Arbitrator and Commissioner to put the whole thing up for grabs and into chaos? If you have any information fit to print, please send it along.

WHAT IS GOING ON WITH ARBITRATOR DIBBLE AND ARBITRATOR CARRIL?

We recently had a reader forward an article from the Belleville-News Democrat about Arbitrators John Dibble and the former Jennifer Teague who has filed court papers necessary to change her last name to Carril. They were put on paid administrative leave on February 15, 2011 and remain on such leave. One would think someone should be considering the next step on this one but again, all information is locked tighter than King Tut’s sarcophagus. We will just have to wait and see where all this goes in the secret world of Illinois workers’ compensation.

DO YOU WANT TO READ THE FREEDOM OF INFORMATION ACT RULING ABOUT EMG’S/NCV’S AT MENARD C.C.?

We thank one of our readers who forwarded the link to the determination by Attorney General Lisa Madigan and her staff about the refusal of Central Management Services (CMS) to disclose the diagnostic testing which led to all the carpal tunnel syndrome and cubital tunnel syndrome claims coming from the Menard prison. We were fascinated to hear Central Management Services would try to hide it, even though the request only asked for 50 tests and they agreed all identifying information should be kept out of the disclosure.

The link to the determination allowing disclosure along those terms is on the web at: http://foia.ilattorneygeneral.net/pdf/opinions/2011/11-005.pdf

The Belleville-News Democrat FOIA requests are pitting two state agencies against each other. The legal battle could escalate rapidly today when the deadline expires for anonymous medical tests conducted on Menard Correctional Center guards who received settlements for carpal tunnel syndrome and other repetitive trauma injuries. Attorneys for the state Central Management Services Department may file a circuit court appeal of the Illinois Attorney General's opinion the records are public and should be released. Or, they could turn over the records. A spokeswoman for CMS agreed to provide a comment but later could not be reached.

Read more: http://www.bnd.com/2011/05/23/1719014/request-deadline-is-today.html#ixzz1NCmXY86t

The request we want someone to make is to ask CMS how many times each year they get hit with awards of penalties and attorney’s fees. Our sources tell us the amount is well into the millions which results when one state employee, the Arbitrator, penalizes another state employee—the CMS adjuster to the benefit of a third state employee—the injured worker. Again, this is another patent example of longstanding mishandling of State Government workers’ compensation claims by impossibly overworked adjusters that we consider scandalous.

All of these shenanigans hit you and me, the taxpayers with unnecessarily higher State government WC costs. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog at www.keefe-law.com/blog.

5-24-2011; Several items of importance to report with regard to Medicare and the swirl of new information…or is it all that new?

Within the last two weeks, Medicare has had their conditional payment process battered by a Federal District Court and a new memo has been released which doesn’t appear to have significant changes and appears to serve more as a refresher to their previously known review guidelines.

Initially, on May 9th a Federal District Court in Arizona struck down two elements of Medicare’s conditional payment recovery process, ruling the procedures do not conform to the requirements of the Medicare Secondary Payer (“MSP”) statute. The case, Haro v. Sebelius (CV 09-134 TUC DCB Fed. D. Az.), was pursued by the Center for Medicare Advocacy to certify a class action and seek declaratory and injunctive relief curbing Medicare’s recovery processes. The Federal Court granted summary judgment to the plaintiffs.

This will have some  impact on two critical elements of current CMS practice:

1)     The decision enjoined Medicare from requiring payment of a conditional payment demand pending a Medicare beneficiary’s request for appeal or waiver of a conditional payment as it was found that the current procedure (collecting interest pre-resolution) exceeds CMS’ authority under the MSP statute.

2)     And probably more significant, the Court enjoined Medicare from seeking direct recovery for conditional payment funds from Plaintiff attorneys and indicated “There is no statutory authority, expressed or implied, to support a direct action against attorneys, except to the extent that they are end-point recipients of settlement proceeds.”

The ultimate impact of the Haro decision pends a likely appeal but for now appears to counter established case law on the MSP statute with the Court’s decision to effectively bar enforcement against attorneys (expect insofar as they hold settlement proceeds) which is in direct conflict of other federal case law. It also appears to have a significant effect on Petitioners and the companies (insurance and employers) as well as TPAs in that any burden to discover and remedy any conditional payment concern falls to them.

In other Medicare news, CMS has released a new policy memorandum dated May 11, 2011 regarding workers’ compensation (WC-MSAs).  CMS doesn’t appear to have made any substantive changes or issue any new policy guidelines but simply appears to reiterate and clarify points related to its WC-MSA process including highlighting that the review thresholds are only work load guidelines and not safe harbors.  This new Memo should be read in conjunction with prior memos to confirm the entire scope of determining and developing MSAs. A copy of the May 11, 2011 memo can be obtained online at  http://www.nqbp.com/docs/uploads/cmsmemomay112011.pdf.

The value of strong and knowledgeable defense counsel is highlighted even more with this ruling and the ongoing release of CMS memos. Please feel free to contact Shawn R. Biery, J.D., M.S.S.C. at sbiery@keefe-law.com with any questions regarding Medicare Set-Aside issues.

5-12-2011; The Appellate Court, Workers’ Compensation Division rules an injured Illinois workers only gets one bite at the permanency apple.

We consider this a solid outcome for the defense side of the practice. In Baumgardner v. Illinois Workers' Compensation Commission,  No. 1-10-0727WC (1st Dist. April 11, 2011), a claimant who suffered a knee injury, followed by two subsequent injuries exacerbating the condition, was entitled to permanency benefits under a determination based upon a single section of the Workers' Compensation Act. The Appellate Court, Workers’ Compensation Division ruled when a claimant sustained two separate and distinct injuries to the same body part and the workers' compensation claims were consolidated for hearing and decision, it was proper for the Commission to consider all of the evidence presented and enter a single award encompassing the full extent of the disability demonstrated at the final hearing.

Claimant was a Cook County employee and evidence from the record indicated he injured his knee on three separate occasions while working for the County. The first injury resulted in knee surgery, followed by an unrestricted release back to work. The second injury occurred at the claimant's home, and resulted in Claimant returning to work with a knee brace. The third injury occurred at work and as a result, Claimant's work was somewhat restricted. The County reassigned Claimant to light duty work and reclassified his position, which reduced hourly earnings. The County paid him wage differential benefits under the assumption he would receive such benefits after an award by the Arbitrator under Section 8(d)(1) of Act.

After surgery in 2002, Claimant filed three Applications for Adjustment of Claim seeking benefits. A consolidated arbitration hearing was conducted on all three applications. The County's proposed order included a provision Claimant was entitled to receive a scheduled permanent partial disability (PPD) award for a 35% loss of use of his right leg. Claimant's proposed order did not contain such a provision, and he filed a motion to “adopt” County's proposed order.

The Arbitrator issued a single decision covering all three consolidated claims. The Arbitrator awarded temporary total disability (TTD) benefits for 53 weeks for the first injury, and 53 additional weeks for the second injury. The Arbitrator additionally determined Claimant was entitled to receive wage differential benefits for the duration of his disability. Finally, the Arbitrator denied claimant's request to adopt the county's proposed PPD order providing an additional 35% LOU of the leg.

The Illinois Workers' Compensation Commission affirmed the Arbitrator’s order TTD benefits for the original injury and modified the order to include 13-2/7 weeks of TTD benefits for the third injury. The Commission also affirmed the grant of wage differential benefits, and rejected the claimant's argument he was also entitled to a scheduled PPD award for the first injury. In reaching its conclusion, the Commission determined the question of the nature and extent of the claimant's permanent disability was to be based on his condition at the time of the hearing and not based on the condition that existed 10 years earlier. The Circuit Court confirmed the Commission's decision at the initial level of appeal.

On appeal to the Appellate Court, Claimant contended he was entitled to the scheduled PPD award for his first injury because the Act does not preclude such an award when wage differential benefits were awarded on a second, aggravating injury to the same body part. Even though the facts of the case were undisputed, the Appellate Court examined whether the Commission's decision, finding Claimant was not entitled to a scheduled PPD award for his first injury, was against the manifest weight of the evidence. We don’t technically agree with their standard of review, as this would appear to be a completely legal issue, allowing de novo analysis by the Court.

The Appellate Court disagreed with Claimant's argument the Commission erred in finding his condition of ill-being resulting from the first injury had to be evaluated at the time of the arbitration hearing. The Court’s members noted the Act clearly contemplates a single determination as to the permanency of a claimant's condition as a result of a work accident.

In addition, the Court’s members asserted our WC Act prohibits a claimant from receiving any other compensation under the Act when granted a scheduled award. Therefore, the Appellate Court held, from a procedural and practical standpoint, where a claimant has sustained two separate and distinct injuries to the same body part and the claims are consolidated for hearing and decision, it is proper for the Commission to consider all of the evidence presented to determine the nature and extent of his permanent disability as of the date of the hearing.

From a purely academic perspective and with respect to the members of this Court, we do not feel this ruling is consistent with the Supreme Court’s ruling in Beelman Trucking. Please understand we consider the Beelman Trucking ruling the equivalent of a legal aberration and this ruling in Baumgardner is a much more accurate statement of what Illinois workers’ compensation law is and should be. In Beelman Trucking, claimant suffered tragic and severe injuries to all his extremities. There is no question or dispute he was a statutory total and permanent disability. On top of the lifetime statutory total and permanent award, he was then given benefits for loss of use of the arms. In Beelman Trucking, for the first and only time in Illinois WC history “double weekly permanency” was awarded where in Baumgardner this reviewing court technically refused to do that based on the facts before it. From an academic perspective, we feel this is the proper outcome but please remember we aren’t the Supreme Court—you have to follow their ruling given the applicable facts.