10-18-11; Thoughts and Comments from the Sidelines of the New, Possibly Improved IWCC

We give credit for these changes to the amazing members of the Fourth Estate. The two quiet hard-working reporters at the Belleville News-Democrat, George Pawlaczyk and Beth Hundsdorfer, turned the world of Illinois workers’ compensation on its collective ear with stories about a claim-crazy prison, Arbitrators getting WC settlements and how things were going in southern IL. Add the influence of the Illinois State Chamber’s President Doug Whitley and Jay Dee Shattuck and you will note the 2011 Amendments to the IL WC Act are about as sweeping as any in the history of this system. One of the things that was changed was all sitting Arbitrators were put under a microscope in a vetting process that created lots of hard feelings, litigation and uncertainty from May 28, 2011 when the legislation was passed by the IL House and Senate until October 14, 2011 when these changes in our Arbitration staff were announced.

Last Friday, October 14, 2011, nine sitting IL WC Arbitrators were not reappointed by the Governor and are now out of work. We are saddened to hear they were given short notice of their change in status. All of them were knowledgeable, hard-working, honest and veteran hearing officers: John Dibble, Gilberto Galicia, James Giordano, Kathleen Hagan, Robert Lammie, Andrew Nalefski, Richard Peterson and Joseph Prieto. One arbitrator, Charles DeVriendt, is to be appointed as a Commissioner. Former Arbitrator Jennifer Teague, now Carril, resigned on her own July 30, 2011.

These sitting Arbitrators were reappointed: Peter Akemann, George Andros, Milton Black, Kurt Carlson, Brian Cronin, Greg Dollison, Anthony Erbacci, Robert Falcioni, Joann Fratianni-Atsaves, Douglas Holland, Gerald Jutila, David Kane, Jacqueline Kinnaman, Edward Lee, Stephen Mathis, Neva Neal Mundstock, Peter O’Malley, Maureen Pulia, Jeffrey E. Tobin, Ruth White and Robert Williams. By our count, that is 21 hearing officers. The Governor’s press release indicates they will now suddenly make our WC system “professional, transparent and fair.” Lots of our defense clients want us to get shirts or lapel pins printed with those three words or even the letters P.T.F. on them. Let us know if you have interest.

Newbies who were selected and are also certain to follow this new P.T.F. standard are: Carolyn Doherty, Barbara Flores, Gerald Granada, Svetlana Kelmanson, Joshua Luskin, Molly Mason and Lynette Thompson-Smith. Again, we count 7 new hearing officers, bringing the total number of Arbitrators to 28.

Thought Number One – Hanging All Arbitrators Out to Dry with NO TENURE and Short Appointment Terms Isn’t a Great Idea

Back in the good ole days when your editor started working as a defense lawyer, we heard tales about the IL WC Commission being totally political. Basically, the Arbitrators were sudden slaves to the politics of the time. If the Republicans were in power, we had Republican Arbitrators. If the Democrats took over, all the Republican Arbitrators knew they were canned and found new jobs on election night when the results were final. Basically, every four years, we got new folks to decide cases. Someone with vision didn’t like that and brought civil service protections to the job.

Truth be told, the Arbitrator job remained a political position because the testing was always kept secret and everyone had a “china-person.” However, once civil service protection was added, we are certain a few Arbitrators stayed on even when their political party was ousted. Further, they could occasionally provide mildly to moderately controversial rulings without being immediately canned. There was some semblance of protection and tenure in their jobs. Trust us, that is now gone. We don’t think that is necessarily a great idea, particularly in a state as corrupt as Illinois has been in years past.

Under a “reform” Governor in Patrick Quinn, we have now gone back to the pre-civil service system of wholly political appointments. Some of you may consider that a step back and not forward. There is no Arbitrator in this state whose job is guaranteed for more than three years. Some Arbitrators have terms that end in just 362 days because they were reappointed last Friday. We don’t understand how the three attorneys who interviewed all  of them and remain on the IL WC Advisory Board aren’t going to have obvious conflicts of interest in appearing before such hearing officers when they could vote to fire them in less than a year if the attorneys don’t get the arbitration awards they seek. To us, that power creates a clear conflict of interest.

And going beyond that obvious problem, we can now expect all Arbitrators are going to align with the party in power because they have no job protections of any kind if the administration changes. Whichever side of the political fence you are on, we don’t think this is an improvement. Again, we are going to have to wait and see if that works out well or not at all.

Everyone Will Need to Watch to Monitor the Governor’s Press-Release Promise of a “nearly 9 per cent decrease in compensation costs for IL employers”

As observers of this system, we have been asked whether the newly appointed 28 Arbitrators are now mostly middle-of-the-road folks. In our view, what happened is gut-wrenching but it is mostly public relations fluff. Statistically, they haven’t made much of a change—about 75% of the Arbitrators under the old system are back. Lots of former claimant attorneys are still very much in the Arbitration mix.

We assume all of the “new” Arbitrators are being advised to tone it down on awards, adhere to PTF and find a median that may make IL WC less shocking and more palatable to the public and most employers. We are also confident they will be the safest Arbitrators who have ever worked at the Commission because they may assume if they get injured while working, it better occur in front of a nun, a minister and a rabbi who all just got back from eye tests and combine to agree an accident occurred. In short, we feel any “new” Arbitrator who makes a questionable WC claim for a work-related injury may assume they need to find new work as soon as their short terms are up.

Will The “New” Arbitrators Follow Traditional Workers’ Compensation Law concepts?

What we are looking for in the future and will report to our readers are several legal trends:

A.    One trend we feel greatly expanded the coverage of the Act was the stripping out of lots of common-sense defenses. As we have written, one galling example was occurred when a truck driver strained his back and hadn’t recovered enough to actually return to his old job. While still on TTD, he fell off his personal motorcycle and ended up in ICU with all sorts of new medical issues, including a pain pump. The age-old and common-sense concept of “intervening and superseding event” was ignored and the employer is now being forced to pay for the motorcycle accident that had literally nothing to do with work.

B.    Another odd trend from the last decade is the wild expansion of the “traveling employee” concept. We are concerned lots of injured IL workers still going to be viewed as “traveling employees” so as to end the “arising out of” requirement for anyone who is moving in any way at the time they are injured. As we have advised on numerous occasions, this legal trend at the IWCC started about eight-ten years ago. The concept of expansion of the traveling employee concept basically ended the “arising out of” requirement.

If you take a look at Professor Arthur Larsen’s seminal work on workers’ compensation, the term “traveling employee” was supposed to be someone whose employment sent them to a wholly foreign place for work. In a foreign country, the worker faces challenges in coping with foreign language, customs, diseases and dangers. It makes sense to globally cover a worker in such a setting.

The concept has been wildly expanded to the point that anyone who is moving when injured may be characterized as a “traveling employee.” For one sad example, a police officer was asked directions while walking his normal beat. He injured himself in the simple act of turning around. The Commission and courts found him to be a “traveling employee” and found this event was covered. Now, the new Amendments seem to require strict proof of the “arising out of” concept—we are going to have to wait and see how that may be implemented.

C.   Another odd trend may be what got us the WC reforms in the first place. Basically, if the words “repetitive trauma” appear in an arbitration ruling, benefits were awarded. We continue to fight and will always fight the concept that all work is inherently “repetitive” so anyone having pain at work should somehow be covered by the IL WC Act. This odd concept could bring awards for falling arches, aging eardrums, beer bellies, varicose veins—all conditions of life that inevitably hit us as we age, whether we like it or not. Folks in other states laugh until they cry to see IL WC awards being provided when “repetitive work” claims were being made. It is our hope the “new” Arbitrators will start to demand actual “accidents” are proven.

D.   Last but not least, utilization review or UR is now supposed to be a strong measure of the limits of medical necessity. Lots of the “new” Arbitrators have been in their jobs since UR was added to our IL WC Act in July 2005. It is our hope these “professional, transparent and fair” Arbitrators start to adhere to UR and not award medical treatment and bills that aren’t certified by UR. Again, the proof will be in the pudding.

If you want to read Governor Quinn’s press release, it is on the web at: http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=2&RecNum=9797

10-14-11; The Supreme Court yields to good sense and reasonableness in overturning another Madison County attempt to expand the scope of liability product manufactures face

We here at KCA have been providing you with our case analyses in this update for quite a while now. You may have read in these pages that our State’s own Madison County has been described as a “judicial hellhole” and was very Plaintiff friendly. If you don’t recall, it’s the home of the original multi-billion dollar tobacco verdict. The Illinois Supreme Court is routinely very liberal, but Madison County is even more so. A recent decision by the Supreme Court of Illinois reversing a Madison County jury award in excess of $40 million confirmed Illinois is going to stick with the precedent on its books and not expand manufacturer liability in a few interesting ways the Plaintiff in that suit was trying to assert.

As a backdrop, we present a snapshot of the law in Illinois – the law for some time has been that manufacturers are not required to guard against every risk to the consumer. When a design defect is present at the time of sale, the manufacturer has a duty to take reasonable steps to warn at least the purchaser of the risk as soon as the manufacturer learns or should have learned of the risk created by its fault. (see Woodill v. Parke Davis & Co) That duty has not been expanded beyond the point of sale – and in fact, a manufacturer is under no duty to issue post-sale warnings or to retrofit its products to remedy defects first discovered after a product has left its control.” (see Modelski v. Navistar International Transportation Corp.) If a manufacturer, however, does warn consumers, or makes modifications to goods, they can be held liable if the warnings are insufficient or if the corrective measures are in themselves negligent. In Jablonski v. Ford Motor Company, decided last month, the Illinois Supreme Court overturned a $43 million judgment in a 5-0 vote, based in part on an expansion of the law argued at the lower court that would have expanded a manufactures liability beyond this point.

Jablonski was filed as a result of a rear-end car accident involving Dora Mae and John Jablonski, who in 2003 were driving their 1993 Lincoln Town Car when they were struck by another vehicle travelling in excess of 60 mph. The Jablonski’s were essentially stopped when hit, and the collision caused their rear end to crumple. It also propelled a pipe wrench in the trunk through the trunk wall and into the adjacent fuel tank. The punctured fuel tank caused the car to catch fire, leaving  Mr. Jablonski dead and his wife severely burned. The widow brought suit under a multitude of theories, and throughout the course of litigation, the theories of recovery continually evolved. Ultimately Plaintiffs received a $43 million award for what the trial court ruled was the auto manufacturer's negligence, as all potential strict liability claims had been dropped. The Appellate Court summarily affirmed and this appeal was taken the Supreme Court.

Of note were the two issues the reversal was based upon – failure to expand Illinois’s duty to warn to include post-sale duty, and an analysis of the “voluntary undertaking” doctrine. In regard to a post-sale duty to warn, Plaintiff argued for, and the jury was instructed in, a duty to warn of a product-related risk after the time of sale, whether or not the product is defective at the time of original sale, if a reasonable person in the seller’s position would provide a warning under the enumerated circumstances. This is a theory of law not in existence in Illinois, and the Supreme Court essentially said as much, also noting application of such a theory would require facts which were not presented to the jury before an award could be based on it, as even if this law were adopted, it would require more information as to what warning a reasonable person in the seller’s position would provide.

The other basis upon which the reversal was based was the voluntary undertaking doctrine. It is a somewhat intuitive doctrine, when a manufacturer (or reseller for that matter) undertakes, freely or for compensation, to render services to another which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking. This duty is limited, however, to the extent of the undertaking. In Jablonski, Plaintiff argued since Ford had done some testing for police vehicles, which were of an almost exact same design, and recommended changing location of the fuel tank and providing guidance to officers regarding proper placement in the trunk to avoid similar fuel tank punctures, this duty extended to the common public to warn them in a similar fashion. The Supreme Court held the duty in this setting applied only to those persons warned – read, the police. Since the public was never warned about the potential fuel tank punctures, there was no duty stemming from the warning to the police. While somewhat convoluted, the theory is based in the fact that the duty from this undertaking stems from failing to perform the warnings or modifications in a reasonably safe manner – since no warnings or modifications were ever propounded to the public, there was no duty to the Jablonski’s which could be breached. In essence, a claim under this doctrine could only be brought by an officer who was warned about proper trunk usage and who was injured despite following Fords’ guidance regarding tools in the trunk.

This article was researched and written by Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com.

10-14-11; There is a new policy from CMS addressing liability MSAs and it mirrors advise we have been giving for some time now. And in other news, the MSPRC Self Service Information Service is up...

The Centers for Medicare and Medicaid Services (CMS) has released a policy memorandum (dated September 29, 2011) pertaining to liability Medicare set-aside (L-MSA) arrangements. CMS has indicated the new guidelines and procedures are effective “upon publication of this memorandum” so they are already applicable, folks.

Per CMS, the memo provides information regarding proposed Liability Medicare Set-Aside Arrangement (L-MSA) amounts related to liability insurance (including self-insurance) settlements, judgments, awards, or other payments (which they note as “settlements”). Through this memo, CMS indicates they will consider Medicare’s interests regarding future medicals to be “satisfied” upon procurement of specific information from the plaintiff’s treating physician as follows:

Where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the liability insurance (including self-insurance) ‘settlement’ has been completed as of the date of the ‘settlement,’ and that future medical items and/or services for that injury will not be required, Medicare considers its interest, with respect to future medicals for that particular ‘settlement,’ satisfied. If the beneficiary receives additional ‘settlements’ related to the underlying injury or illness, he/she must obtain a separate physician certification for those additional ‘settlements.

If the physician certification as referenced above is obtained, according to CMS you do not need to submit the certification or any proposed L-MSA to be reviewed. In keeping with their tradition of refusing to provide any parties with significant confirmation that they have made appropriate efforts, CMS will not provide the parties with any type of confirmation indicating Medicare’s interest regarding future medicals is satisfied and instead they strongly suggest plaintiffs and/or their representative maintain the physician’s certification.

To obtain a copy of CMS’ September 29, 2011 memo, please email Shawn R Biery at sbiery@keefe-law.com.

AND

In other CMS news, you can now attempt to contact CMS to determine conditional payments if you have the necessary information and use an automated service. It appears to be working as long as you have all of the necessary info. The MSPRC phone number is the same, (866)677-7220, but now it gives you the option to use the automated service or to speak to an associate. 

To use the automated service, you will need to have the following information:

• Case Identification Number (as found on the Rights and Responsibilities letter)
• Date of Loss
• Beneficiary's Date of Birth
• Last four digits of the SSN
• First four digits of beneficiary's last name
• Medicare Number

After receiving the status on a file, it will ask if you want to search for another case or speak to an associate. Remember, to speak to an associate, there will be an extended hold time (with Shawn’s personal best being over 70 minutes). For more information on the MSP automated response feature, go to www.msprc.info .

Our law partner, Shawn R. Biery, J.D. holds the M.S.S.C. certification and has presented opinions in seminars throughout the U.S. If you have had the pleasure of working with him in the past, you know that he has been advocating for obtaining confirmation of “no further treatment” from treating physicians for an extended period already. If you have questions or concerns about such issues, please feel free to contact Shawn at sbiery@keefe-law.com.