10-18-11; What a Hoot!!! The City of Chicago admits their annual budget for WC claims will exceed $100M!

We read a recent article in the Chicago Sun-Times indicating Mayor Rahm Emanuel and Ald. Edward M. Burke, chairman of the Chicago City Council’s Finance Committee, are dealing with the City’s $100-a-year million tab for workers compensation claims. As the City has about 30,000 workers, we are fairly confident they may have the highest WC cost to employee ratio on the planet. If you compare the City of Chicago to companies like Ford Motor Company, AT&T and General Electric that have about 300,000 employees or ten times as many workers, such organizations would owe $1 billion per year if they had the same WC cost per employee!

We note the City of Chicago has a vastly overwhelmed claims and legal staff to handle their claims. In our view, this may be penny-wise and pound-foolish. To our understanding, the City of Chicago has one claims handler dealing with 3,000 pending IL WC claims and a single attorney with the Corporation Counsel’s office to “defend” them. We urge Mayor Emanuel and Chairman Burke to reach out to the IL WC claims community and seek a better overall strategy by using real municipal WC consultants like the top-notch folks at IRMA.

The Sun-Times report does indicate the City fathers are going to perform a “safety analysis” of working conditions that will be conducted in every city department to produce and then implement specific safety protocols. The Sun-Times further notes the City’s Department of Streets and Sanitation has one-third of its garbage collectors sidelined every single working day of the year. This is what we characterize as a “ghost workforce”—the City apparently needs 133 workers with full salaries, pensions and other benefits to have only 100 working on any given day. No private company could survive with that level of absenteeism.

In contrast, we note there are numerous private companies that could provide these same routine environmental collection services to our citizenry at a dramatically cheaper cost. Again, the City’s failure to reduce accidents, surveil folks who may be off too long and rapidly return such workers to light and then full duty jobs causes the “ghost workforce” at very high cost to taxpayers who are all deeply concerned about spiraling City budget deficits.

Alderman Burke, who has had sole authority to process and settle workers compensation claims openly commits to more aggressively investigate and manage individual cases—this may be the third or fourth time he has publicly committed to do so. The City Council’s Finance Committee asserts it will now work with other City officials to bring injured City employees back to work and establish a new protocol for regularly updating the ongoing disability status of employees.

In another announcement that may bring smiles to veteran WC observers, for the first time anyone can remember the City Council’s Finance Committee has announced for employees who cannot be rehired into a City job, the Committee will “engage in vocational rehabilitation.” As the Illinois WC claims industry has been doing that for about as long as the four-plus decades Chairman Burke has been in office, we are happy to see he is catching up. We hope it doesn’t take him forty-plus years to have the City Council get a WC PPP into place, consistent with the 2011 Amendments to the IL WC Act.

10-18-11; Oh, That’s Gross!! The Appellate Court, Workers’ Compensation Division flips another case on “manifest weight.”

As we reported way back on August 29, 2011, we are mildly surprised to see the ruling in Johnson v. IWCC, (No. 2-10-0418, issued August 15, 2011). In that ruling, the Illinois Appellate Court, Workers’ Compensation provided a split decision that overruled the IWCC and, in our opinion, replaced their fact-finding with the court majority’s view of the facts. In so doing, they found the Commission’s decision was clearly erroneous and “against the manifest weight of the evidence.”

Most academic observers note the last statement on this legal concept came from the Illinois Supreme Court who outlined the Appellate Court justices were to adhere strongly to the manifest weight of the evidence rule—this came from not one but two decisions from our highest court in Sisbro and Twice Over Clean. In both rulings, denials of benefits came from the Appellate Court’s well-reasoned decisions and the Supreme Court acted to reinstate benefits.

As we indicate above, in Johnson, it is our view the Appellate Court may have ignored what was arguably dereliction of duty by a Will County Sheriff who inexplicably left his post to the detriment of fellow officers and the public. He was injured returning to duty. The Appellate Court found the Commission’s decision to deny benefits on the facts was patently erroneous and awarded benefits.

Now, less than sixty days later, we read a new controversial ruling from the same panel. In Gross v. Illinois Workers' Compensation Commission, (100615WC, opinion issued October 6, 2011), the Court considered a claim from a retired coal miner who filed a claim for benefits under the Workers' Occupational Diseases Act, alleging his lungs and/or heart were affected by inhalation of coal dust for more than 39 years.

One physician assessed claimant with mild chronic obstructive pulmonary disorder or COPD, caused by a combination of his former cigarette smoking and his exposure to coal and rock dust. From our view, the IL WC Commission carefully considered the facts, medical evidence and law and denied the claim.

In its analysis, a 4-1 split in the Appellate Court found the IL WC Commission patently erred in accepting the expert opinion of another specialist, who opined COPD was caused solely by claimant's cigarette smoking. The reviewing court asserted this expert failed to give an adequate and detailed explanation of the basis of his professional opinion. In our opinion, “adequate and detailed” are comparative terms used to analyze an expert opinion that are clearly in the eye of the beholder. Obviously, the IL WC Commission felt the expert opinion was sufficient to justify denial.

Justice McCullough dissented in Johnson v. IWCC above and in this new Gross opinion. In our view, kudos to him for doing so. As business observers of this system, we remain amazed to see this appellate majority do what we feel is the opposite of the Supreme Court’s last statement on this simple legal concept. As we have been told by many observers, decisions such as this give onlookers the sense there is one abiding rule in this state—assume either the Commission in the first instance or reviewing courts as the “final resort” will do whatever it takes to give out benefits. We aren’t sure how this may measure up to the Governor’s new WC standard on “professional, transparent and fair” but we are all going to have to take a wait-and-see approach.

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