9-19-11; Just the Biggest of the Big—Here the Ten Major Changes that have come to the Illinois Workers’ Comp System in 2011 that our readers need to know and remember

Trust us, you could care less about most of the rest of the details. Here is the shortest version we can write about what is hitting this WC system right now.

1.    AMA Guidelines will now be used, in part, to determine permanent partial disability

Under new Section 8.1b, permanent partial disability shall be determined in part according to the most current edition of the American Medical Association's "Guide for the Evaluation of Permanent Impairment" for injuries occurring on or after September 1, 2011. The AMA guidelines shall define loss of range of motion, loss of strength, any atrophy or tissue mass reduction, or any other measurement that may establish the nature and extent of the impairment. The IL WC Commission must base its determination of the level of permanent partial disability on the amount of impairment as defined by the AMA guidelines but also must consider factors such as the occupation of the injured employee, the age of the employee at the time of the injury, the employee's future earning capacity, and evidence of disability corroborated by the treating medical records. No single enumerated factor shall be the sole determent of disability. Risk managers, claims adjusters and attorneys on both sides are going to have to catch up and figure out how to use this new claim tool—it isn’t a maybe, it is the law. We have several KC&A defense attorneys who have expertise in understanding and implementing this new IL WC standard. We will work with the eminent Dr. David Fletcher of SafeWorks Illinois to start training programs for the industry shortly. While the law says what it says, we point out our understanding there is not one IL WC Commission employee who has any training on the AMA Guidelines. You can buy a copy of the AMA Guidelines, new or used from Amazon online at http://www.amazon.com/dp/1579478883/?tag=googhydr-20&hvadid=5654301197&ref=pd_sl_183l98wpkr_b

2.    Injured Workers' Choice of Doctor can be limited by providing a PPP choice

In the past, Sections 8.1a and 8.a.4 of the IL WC Act qualified a Petitioner's right to have two separate choices of medical provider along with referrals from both choices of provider. To cut that choice in half, the Illinois employer or its insurance company/TPA can now create an approved network of medical providers and submit that panel to the Illinois Department of Insurance for approval. As you read this several PPP’s have pending applications at the IL Department of Insurance awaiting full approval. We hope the Department gets starts approving and stops stalling.

Once PPP’s are approved, while the injured worker can opt out of the provider's network, disincentives for doing so are built into the law. After an injured employee notifies the employer of his injury or files a claim for workers' compensation, the employer must inform the employee in writing of his right to be treated by a physician of his or her choice from the preferred provider program or network. Someday, we hope the Illinois Workers' Compensation Commission will get around to creating forms necessary to comply with this section—the new laws were passed by both houses of the Illinois legislature prior to Memorial Day 2011. Do you think the IWCC might have a one-page form ready for use by Christmas?

If the employee accepts the medical provider within that network, that constitutes his or her first choice. Unlimited referrals within the network will not count as another choice. Note, however, employees may not move from doctor to doctor even within the network without a referral. An employee may decline in writing to be treated within the network, but the act of declining constitutes a “choice,” which effectively limits an injured worker to one choice of doctor and subsequent referrals.

If the employer doesn’t offer an approved preferred provider program, the employee retains the right to choose two separate medical providers. We feel this is a major change and will result in hundreds of millions in savings for Illinois employers smart enough to sign up for it. If you don’t understand how, send a reply. If you haven’t started the process to get a PPP in place, send a reply and we are happy to assist in any way possible.

3.    Recovery for repetitive trauma hand injuries limited

Section 8(e)(9) reduces the number of weeks for a repetitive or cumulative trauma hand injury to a maximum of 190 weeks, down from 205 that will apply to all other hand injuries. The new Section also limits permanency for such claims to a maximum of 15 percent of the loss of use of a hand unless there is “clear and convincing” evidence of more disability, with an upper limit on recovery at 30 percent loss of the use of the hand.

4.    Wage loss differential limited; TPD calculation clarified

For injuries on and after 9/1/2011, Section 8(d)1, which provides for wage loss differential benefits for workers whose injury arguably causes them to get a lower-paying job, has been amended so that an employee is entitled to his wage loss differential on a weekly basis until they reach the age of 67 or five years from the date of any final award, whichever is longer. This caps, to a certain extent, the benefits due in wage loss claims. We expect a battle may ensue over the “date of loss” in wage loss claims so the date can arguably be set prior to this limit. In a somewhat related change, the calculation of temporary partial disability or TPD is now changed to clarify the calculations are gross earnings subtracted from the AWW with 2/3 of the remaining amount due. This eliminates confusion over how the “net” amount was reached.”

5.    The Illinois WC Medical Fee Schedule dramatically reduces medical reimbursements for care after 9/1/2011

In a massive change for medical providers, Section 8.2.(a) rolls the IL Medical Fee Schedule back by 30 percent. Medical implants will be reimbursed at 25 percent above the manufacture's invoice price, less rebates. Prescriptions that are filled outside a licensed pharmacy will be reimbursed at a rate that does not exceed the average wholesale price plus $4.18 for a dispensing fee.

6.    Medical bills to become electronic

We are told there will be an electronic billing standard to be put into place by the IL Department of Insurance by January 1, 2012. No idea if that may actually happen with Illinois’ wildly slow administration.

7.    Docs and Hospitals to be paid in 30 days

Section 19(k)1 now provides medical providers must now be paid within 30 days after the employer has received the bill and appropriate records or face a one percent per month interest charge. The interest will be payable to the medical provider. We understand most medical providers are now smart enough to automatically start adding interest charges.

8.    Utilization Review Changes

Section 8.7 provides for utilization review or an employer-sought expert medical review of the employee's treatment to determine whether it is excessive. UR has to be based upon recognized treatment guidelines and evidence based medicine. Upon receipt of written notice an employer or its agent wishes to invoke the utilization review process, the medical provider is required to submit to the review and make reasonable efforts to provide timely and complete reports of clinical information needed to support a request for treatment. Providers who fail to comply might not be allowed to bill the employer or claimant for their services. The reporting requirements imposed on the provider should not be unreasonable or unduly burdensome, and he or she must be given written notice of utilization review decisions.

An employer may deny payment for medical services if an accredited utilization review finds treatment is excessive. When that happens, the employee must show by a preponderance of the evidence the treatment in question is reasonably required. The medical professional responsible for the review must be available in person or for deposition by telephone, videoconference, or other remote electronic means. The interview or deposition shall be conducted in a fair, open and cost effective manner. The employer must pay for the interview or the deposition.

9.    Intoxication defense

Section 11 now includes an intoxication defense. Employees will not be entitled to any WC compensation if their intoxication was the proximate cause of the accidental injury or they were so intoxicated when the injury occurred that it constituted a departure from the employment. If at the time of the injury the employee refuses to submit to testing of blood, breath, or urine, the refusal raises a rebuttable presumption the employee was intoxicated and intoxication was the proximate cause of the employee's injury. The amended Act specifies what blood tests are admissible and how evidence is to be preserved. Intoxication can be caused by any substance, not just alcohol.

10WC Fraud Busting

New Section 25.5 governs fraud and applies not only to employers and employees but also to medical providers. The new Amendments make WC Fraud a Class A misdemeanor if the amount stolen via fraud is less than $300. If more than $300 and less than $1,000 it is a Class III felony. If more than $10,000 it is a Class II felony, and if more than $100,000 it is a Class I felony.

9-13-11; Murdering the Golden Goose and kicking it down the nearest alley—should we really tax services in Chicago or IL? Is the challenge to see how fast services will move to other cities...

We recently saw a blurb about Chicago Mayor Rahm Emanuel thinking it may somehow be a good idea to stop taxing mostly real estate and the sales of goods and to start globally taxing services. We are growing sick of hearing our elected leaders finding new fertile places to levy taxes rather than cut bloated budgets.

We urge all vendors and basically everyone in the service industry of the workers’ comp arena to contact your favorite politician and tell them to stop the madness. Most of us are less than thrilled to see the State of Illinois bump up the income tax and jump the cost of riding on our tollways to record high levels—do they really have to add even one more insult to all the current and painful tax levels?

Please note almost every vendor in the Illinois workers’ compensation milieu may be subject to new service taxes—insurance carriers/TPAs, brokers, nurse case managers, physicians and other healthcare givers, surveillance operatives, vocational counselors and attorneys on both sides may be brought into the mix. None of them want to have to charge our Chicago or Illinois clients an additional vigorish for the services we provide. We hope Mayor Emanuel and other politicians understand how fast everyone who provides such services can and will move from your bailiwick. The last law firm to leave may or may not turn off the lights, as our clients can call and email/text us in other cities and/or states, as easily as they call and email/text to Chicago.

From recent press coverage, it appears Mayor Emanuel is considering transforming a silly campaign sound bite into reality. While specifics are wholly unclear, what Emanuel was talking about is an idea kicked around like a bad tin can for a long time in Illinois—taxing both purchases of goods and adding services that represent a fast-growing segment of the Illinois economy.

The underlying concept is supposed to be a trade-off, sort of like the silly concept of instituting tolls to build toll roads to then cut them off when the roads are paid for—that didn’t seem to work, now did it? Mayor Emanuel asserts sales tax rates will come down across the board—sure, we are happy to trust that concept, as Illinois tolls are being just about doubled. He also asserts government won't be broke as long as most services are taxed, as we indicate above. We can hardly wait to see the political battlefield unfold with every trade association and professional group fighting to bribe the right alderman to leave their members out of the mix.

At present, the State of Illinois relies on sales tax revenue to pay about one-fourth of its day-to-day operations. At present, the City of Chicago relies on sales tax for 16 percent of its budget.

The sales tax is a hot button topic and hardly in a good way. Many retail shoppers across Chicago, Cook County and across our state are furious about having purchases taxed at 9-9.75% which is a rate among the highest sales tax rates in the U.S.. Sales tax rates in many Chicago suburbs aren't far behind Chicago’s record high rates. As you may have read, retailers and other businesses have turned to creative but controversial ways to route transactions through far-flung communities where sales tax levies are lower. For some reason, Mayor Emanuel doesn’t think the phenomenon will apply to services.

At the same time, Illinois' heavy reliance on the sales tax as a major revenue source has come under growing criticism as unfair, a drag on commerce and a tool that makes it harder for government bodies to cope with economic downturns. A key problem, as many tax critics view the situation, is Illinois has been far slower than other states to recognize our citizens spend an increasing share of their dollars on simple purchases for services such as lawyers, landscaping, nail care and recreation. Illinois is very much a service economy, as the retail sector has moved to the internet whenever possible.

9-13-11; Claimant’s claim work-related stress caused tummy ulcers which under FMLA were hard for the Federal Courts to “digest” and dismissal affirmed

Our Federal Seventh Circuit Court of Appeals falls in line with other federal circuits on FMLA. In doing so, the Court defines limits to liability under FMLA protections and offers the rather elementary observation a claimant must be entitled to FMLA leave in order to establish a cause of action under the Statute. In Breneisen and Lineweaver, v. Motorola, Inc. (2011 WL 3873771, 7th Circuit, Sept. 2d 2011), the Seventh Circuit affirmed the District Court’s dismissal, finding Plaintiff failed to establish a wrongful discharge claim arising out of the stress imparted by his supervisors, since his FMLA leave was already exhausted earlier in the year.

Plaintiff Breneisen was employed at various Motorola facilities and took FMLA leave to receive treatment for gastroesophageal reflux. He returned to work twelve weeks later and was assigned to a different position, allegedly because his position had been eliminated during his leave and his former duties had been dispersed among several other positions. He received the same pay and benefits, but personally considered the change a demotion.

On April 20, 2001, just weeks after returning to work, Plaintiff Breneisen took medical leave again, this time for esophageal surgery. He returned to work in September 2001, but in February 2002, he took leave for a third time to undergo a total esophagectomy. 0Breneisen never returned from this leave and was eventually terminated in June 2003. He alleges the esophagectomy was necessary because a supervisor at Motorola caused him to suffer stress, high blood pressure, and stomach reflux, all of which exacerbated his pre-existing medical condition.

The crux of Breneisen's argument is the alleged mistreatment he received from his supervisor at Motorola upon returning from his second leave in September 2001 exacerbated his pre-existing condition and caused him to take the third leave, from which he never returned. He asserted the evidence the District Court excluded was offered to prove this alleged causal link.

In the Court’s analysis, our Seventh Circuit turned to a similar case from the Sixth Circuit, where they ruled FMLA does not address the cause of an employee's injury. Edgar, 443 F.3d at 516. Our Seventh Circuit agreed the cause of an injury was irrelevant under the FMLA, although the Court commented the cause of an injury would be relevant to a claim based in tort law, noting Breneisen already filed an intentional infliction of emotional distress claim. The Court already affirmed summary judgment in favor of Motorola on that claim when the case first came before them in 2008.

The Federal Appellate Court went on to point out that, even if the cause of an employee's medical condition were relevant under the FMLA, it would not be relevant in Plaintiff Breneisen's case, since the exacerbating conduct he alleges occurred after a second, unprotected leave. There seems to be no dispute Defendant Motorola fully complied with the requirements of the FMLA during and immediately following Breneisen's first leave. At the end of that leave, his entitlement to twelve weeks of leave per year for a qualifying condition had been exhausted.

In April 2001, Motorola again allowed him to take leave; when he returned to work five months later, the company reinstated him. His second reinstatement did not occur because the FMLA required it; rather, it appears to have been a courtesy extended to a long-standing and veteran employee. Although his second leave may have been “approved,” an employer's approval of extra leave time has no bearing on the established parameters of taking leave pursuant to the FMLA. Since the retaliatory conduct which Plaintiff Breneisen alleges occurred happened when he was no longer subject to the FMLA's clearly defined protections, he was not entitled to recovery for an alleged FMLA violation.

The Court also commented “stress can adversely affect many common ailments from which physically infirm employees suffer, granting relief on this basis would contravene the straightforward premise of the FMLA—to protect employees from adverse actions by their employers during finite periods when short-term personal or family medical needs require it”. When serious medical issues render an employee unable to work for longer than the twelve-week period contemplated under the statute, the FMLA no longer applies. This is true regardless of the cause of the infirmity.

This article was researched and written by John P. Campbell, Jr., J.D. Please feel free to contact John directly at jcampbell@keefe-law.com.