12-5-11; We wonder if the WC crisis will ever stop in this State? Is there a fresh slate at the IWCC? It is our hope the press in Belleville will continue their watch

As about forty readers have sent us the story, we have to report the top-notch investigative team at the Belleville News-Democrat, George Pawlaczyk and Beth Hundsdorfer are back on the attack and probably won’t stop unless and until Governor Quinn gets off his hands and starts doing something about it other than firing lots of folks to replace them with his buddies, pals and political cronies. As we have advised, the State of Illinois and City of Chicago are now neck and neck for the highest workers’ compensation costs for any private or government entity on the planet. The State of Illinois is running a budget for WC of about $133M per year. The City of Chicago is soon to exceed $100M per year with only 30,000 workers!!! We are told both government bodies have literally thousands of workers off all work and on TTD, every single day of each year. When the “injured” workers are done with care and ready to return to work, the State of Illinois and City of Chicago routinely refuse to bring them back to alternative positions, citing archaic work rules as an excuse.

When State of Illinois and City of Chicago workers aren’t provided alternative work by the government agency they used to work for, they are then turned into what we call “lazy-lot” total and permanent disability claimants who receive:

·         Related medical care for life;

·         Tax-free TTD/TPD for life;

·         Whatever disability or regular pension to which they are eligible.

Such workers “retire” at more money than they receive when working! We are told this costs the State of Illinois over $7M each year in WC benefits alone and there are lots more folks trying to sign up for it. Almost all of that money could be saved for the taxpayers starting today, if the State would simply locate jobs for such claimants.

This concept is all tied to one of the crookest aspects of the whole WC system in IL—in our system, it is the employer’s job to somehow magically demonstrate injured claimants can work. All a claimant has to do to seek total and permanent disability or wage loss differential benefits is to stall around and do a bad job finding work—sounds kind of like what happens with unemployment compensation right? Folks won’t actually get jobs, they just show the state they are somehow “trying” to find work to then become entitled to as much as four years of unemployment benefits. In the WC arena, our office has claims for minor injuries to the arm, ankle and knee. All of the claimants are seeking well over $500,000 as “odd-lot” total and permanent claimants. They are all putting on the appearance of looking for work to seek these monster settlements to THEN return to work.

The Belleville News-Democrat reporting team notes former IL workers' compensation arbitrators awarded millions of taxpayer dollars to prison guards for arm and wrist injuries but ignored testimony of state medical experts who challenged these claims. In fact, the Arbitrators supposedly threatened to impose higher awards and/or settlements if defense lawyers for Attorney General Lisa Madigan continued fight claims. One of the Arbitrators asserted the State of Illinois did win some repetitive trauma cases. We haven’t seen such results to date and if any of our readers see such a ruling, please forward it.

Evading the “cloak of secrecy” the Governor placed on the whole WC system, staff attorneys from Lisa Madigan’s officer are reportedly again preparing to challenge repetitive trauma cases brought by State of Illinois workers statewide. The BN-D reporters indicate the Attorney General's office, which represents taxpayers, is spearheading a joint effort with Central Management Services to challenge questionable carpal tunnel syndrome or repetitive trauma injury cases. CMS acts as a claims adjuster for state workers.

From Jan. 1, 2008 to August 2011, CMS denied 50 claims but every single claim was awarded by an Arbitrator or through appeal to the Illinois Workers' Compensation Commission. The BN-D team reports new downstate arbitrators may take a fresh view of defense evidence and arguments that were routinely rejected by past arbitrators. The new 2011 Amendments to the IL WC Act also reign in CTS awards to no more than 15% LOU of the hand unless there is clear evidence to the contrary. We also hope impairment ratings, if used by CMS and all IL WC adjusters will drive down the level of awards and settlements.

As of Friday, December 2, 2011, Attorney General Madigan’s defense team failed to block even one of at least 255 claims filed by Menard guards who alleged operating locking devices caused injury to their wrists or elbows. Madigan's office is focusing an overall effort to challenge repetitive trauma cases by initially targeting a single carpal tunnel syndrome claim filed this year by a $100,000-per-year information systems analyst for the state. This employee who is with the Department of Commerce and Economic Opportunity filed a claim in Springfield alleging she incurred carpal tunnel syndrome by typing on a computer. There are at least three major medical research studies, including a 2008 study from Harvard Medical School, which indicate normal typing on a keyboard does not cause or contribute to the development of carpal tunnel syndrome.

As you may note from reading this BN-D article from the link below, your editor was quoted and we do believe there may be a clean slate at the IWCC in this state. We are hoping the new and existing Arbitrators, Commissioners and reviewing courts start to see the enormous drain it is on our economy and competitive position in relation to other states. “Non-accident accidents” arising from “repetitive work” have to be looked at a lot more carefully. We strongly hope someone with a brain will take a look at the abusive concept of global door-to-door WC coverage being provided to workers when two words that are not in the IL WC Act are implemented in the judicial fantasy that is the “traveling employee” concept in this state. As we have advised in the past, we consider the “traveling employee” concept unconstitutionally vague for numerous reasons.

Finally, we think it is something of a tragicomedy to see State employees at the IWCC giving out millions of taxpayer dollars to other State employees who are claiming "non-accident accidents." As we have advised, the IWCC reports directly to Governor Quinn—he could immediately cut state WC claim costs in whatever amount he wanted with one phone call/meeting/carrier-pigeon-message to IWCC Chairman Weisz—State of IL employee claims cannot be appealed past the IWCC by law, so they wouldn’t be concerned about our liberal reviewing courts. One has to wonder if these brilliant reporters at this great newspaper can get the message to Illinois taxpayers that we are getting the short-end of the stick from folks we elect!!!

Read more: http://www.bnd.com/2011/12/04/1966254/arbitrators-ignored-state-experts.html.

11-28-11; The heat is getting turned on staffing companies who are playing fast and loose with WC insurance rules. Please note Defendant Select Staffing has numerous claims in the IL WC system...

We saw a recent article in the national press indicating the California State Compensation Insurance Fund (SCIF) will seek $50 million from Select Staffing Co. Inc. following a jury finding this employer guilty of fraud. The jury's finding earlier this month stems from a lawsuit brought by SCIF alleging the Santa Barbara, Calif.-based temporary staffing company avoided paying tens of millions of dollars in premiums by “piggybacking” on a workers compensation policy purchased by a now-defunct professional employment organization.

In this case, “piggybacking” refers to Select Staffing allegedly gaining a lower experience modification by making its workers employees of a defunct PEO named Onvoi Business Solutions Inc., sources said. Insurers use experience modifications to calculate a policyholder's losses and premiums. The lower the experience-modification, the lower the premiums; and sources said Onvoi had an experience-modification of about 70 while Select Staffing's was closer to 300. SCIF also alleged Select Staffing underreported its payroll.

California law allowed San Francisco-based SCIF to choose among various options to calculate damages. On Thursday, a spokeswoman for the state insurer said it chose an option that results in the $50 million it is seeking from Select Staffing.

Select Staffing said that it strongly disagrees with the finding against it and will appeal. Select also said the dispute with California State Fund stemmed from a business relationship it entered with Onvoi 10 years ago and SCIF's employees were aware of the arrangement. Select Staffing management asserted they paid a fair price for the insurance. Obviously, the jury disagreed.

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11-28-11; Medicare grabs their money back in a motor vehicle settlement and Plaintiff may get the short straw in the deal

In Hadden v. U.S., Medicare paid about $82,000 in medical bills to claimant after a motor vehicle accident, as he was and remains a Medicare beneficiary. Plaintiff Hadden sued and settled the claim against the company whose driver hit him in the accident. Defendant was were willing to pay him $125,000.00 to close all rights in the claim.

Medicare was willing to deduct attorney’s fees to recover their money, leaving them a net lien of about $62,000. Please note that would mean Medicare would get just under one-half of the entire settlement. It is our understanding Plaintiff’s attorney would also get legal fees on the remaining balance to be paid to Plaintiff Hadden over and above the Medicare lien recovery, so Plaintiff might receive as little as $25,000 of the $125,000 being paid. Obviously, personal injury lawyers don’t like such outcomes as the attorney would get as much or more in combined legal fees from Medicare and claimant, as claimant would receive himself. In this claim, we would estimate

·         Medicare would receive $62,000;

·         The attorney’s fees on that money were about $20,000;

·         There is about $43,000 of the original offer of $125,000 left after netting out Medicare’s recovery and fees related to the recovery;

·         Claimant would have to pay his attorney a 1/3 fee on that money, giving claimant about $28,666.67;

·         Attorney’s fees on $43,000 at 1/3 are $14,333.32.

If the above approximations are accurate, the payout about be:

·         $62,000 to Medicare;

·         $34,333.32 to the attorney who is actually working for both Medicare and Plaintiff;

·         $28,666.67 to Plaintiff Hadden.

Ouch.

At long last, the 6th Circuit Court of Appeals finally rendered their decision in the appeal on November 21, 2011, only 404 days after oral arguments were presented. It is no surprise to observers to note the majority followed the status quo and ruled in favor of Medicare. In their five page opinion, the court says little more than strict interpretation of the MSP gives Medicare a fairly opened ended, unquestioned right to recovery without the burden of equity considerations. This is the way that it has always been dating back to Zinman v. Shalala in 1995.

In all of its attempts to avoid the issue, observers feel this Federal Appellate Court’s ruling is somewhat troubling as they tried to create a basis for the decision on the distinction between liability and responsibility. The MSP states:

A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this subchapter with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. . . .

One can assume responsibility or be made responsible by order of a court. Anything short of that does not equate to "responsibility" as some legal scholars view it. Insurance settlements represent financial transactions in which injured parties sell the right to bring legal claims against purported tortfeasors. Injured parties receives compensation in exchange for a release from liability in an amount commensurate with their likelihood of prevailing at trial--each right released carries a monetary value.

In this personal injury claim, it is important to note Kentucky is a pure comparative negligence state. Arguably the defendant driver was only minimally at fault given all he did was swerve to avoid a more significant catastrophe. Based on such facts, many view Plaintiff Hadden would have received a fair settlement. Critics feel Medicare should be satisfied taking the portion of compensation representative of medical expenses and then use its subrogation rights and seek the remaining balance directly from the defendant. Scholars feel the government will not assert its own claims against what it deems "responsible" primary payers, where it would actually have to prove its claims to reimbursement. They feel the government elects to wait until others have spent time and resources obtaining compensation and then just step forward and take what it wants regardless of the underlying issues.

In summary, we feel the industry should look to Medicare’s recovery as a “hard” lien that will not be subject to discounts based on relative fault. Everyone in the U.S. personal injury industry has to take notice and fall into line, unless and until the U.S. Supreme Court takes a test claim and reaches a different outcome.

If you want a cite to the ruling on the web, send a reply. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.