2-8-12; Lots of things promised in the 2011 Amendments aren’t going to be happening any time soon.

A brilliant reader pointed out there are lots of things the Illinois legislature did that aren’t going to happen for some time, if ever. In our view, it is part of the “crazy-making” that happens in every legislative session designed to misdirect our attention from more important things.

First, Governor Quinn and most legislators passed a law indicating they might actually do something about the scandal that is the continuing mismanagement of State of IL workers’ comp defense program. This amazingly screwed-up program is marked by claims adjusters that have an impossible number of claims to adjust, defense attorneys who roll over on every claim because they aren’t given evidence to present in defense of the claim and penalties/fees issued by state employees (Arbitrators) against state employees (claims adjusters) to the enormous benefit of the injured state worker and to the immense detriment of Illinois taxpayers. Over $100 million in WC benefits are paid to Illinois state workers every single year. Some day, they may actually do something about it in a state awash in a sea of red ink.

Second, we are all awaiting the PPP concept to allow great managers like Darren Stahulak of CorVel and David Kolb of HFN to do their magic and give Illinois employers control over medical care in this state. We are all awaiting JCAR or the Joint Committee on Administrative Rules to get their things together and issue final rules and allow implementation. The expected savings is $500 million or more.

Third, we are advised there is a reporting concept that isn’t going to match the statute. New Section 29.2 of the IL WC Act says (in pertinent part):

(b) The Director of Insurance shall promulgate rules requiring each insurer licensed to write workers' compensation coverage in the State to record and report the following information on an aggregate basis to the Department of Insurance before March 1 of each year, relating to claims in the State opened within the prior calendar year:

        (1) The number of claims opened.

        (2) The number of reported medical only claims.

        (3) The number of contested claims.

        (4) The number of claims for which the employee has attorney representation.

         (5) The number of claims with lost time and the number of claims for which temporary total disability was paid.

         (6) The number of claim adjusters employed to adjust workers' compensation claims.

         (7) The number of claims for which temporary total disability was not paid within 14 days from the first full day off, regardless of reason.

         (8) The number of medical bills paid 60 days or later from date of service and the average days paid on those paid after 60 days for the previous calendar year.

         (9) The number of claims in which in-house defense counsel participated, and the total amount spent on in-house legal services.

         (10) The number of claims in which outside defense counsel participated, and the total amount paid to outside defense counsel.

         (11) The total amount billed to employers for bill review.

         (12) The total amount billed to employers for fee schedule savings.

         (13) The total amount charged to employers for any and all managed care fees.

         (14) The number of claims involving in-house medical nurse case management, and the total amount spent on in-house medical nurse case management.

         (15) The number of claims involving outside medical nurse case management, and the total amount paid for outside medical nurse case management.

         (16) The total amount paid for Independent Medical exams.

         (17) The total amount spent on in-house Utilization Review for the previous calendar year.

         (18) The total amount paid for outside Utilization Review for the previous calendar year.

We assume this information may be of interest when it is published. The Department shall make the submitted information publicly available on the Department's Internet website or such other media as appropriate in a form useful for consumers. At present, the Illinois Department of Insurance hasn’t promulgated the required rules. We will all watch to see if the Department will promulgate the rules any time soon. Such rules may have to go through the JCAR process which is the Joint Committee on Administrative Rules and the rules haven’t even been written yet.

We thank the reader who sent this note to us. We appreciate your thoughts and comments. Please feel free to post them on our award-winning blog.

2-8-12; If you are defending/adjusting “non-accident accidents” watch your nomenclature, defense folks.

You can lose or mitigate all defenses by making one simple mistake. We have one great KC&A defense lawyer defending a claim involving a guy walking with a dolly (or two-wheeler) loaded with product and his leg got sore and/or popped. Claimant didn’t slip, trip or have anything even slightly unusual happen. Sadly, claimant is an older worker with a sore leg. We don’t see an accident in the accident investigation or medical histories but they are claiming one occurred.

Another KC&A defense attorney is defending a fully disputed stroke case—the guy felt a headache a couple hours before work and the condition really got bad an hour or two into work. Claimant wasn’t doing anything rushed, emergent or unusual. However, counsel is seeking full coverage. Please note if they prevail on this stroke, even though claimant is back to full work, if he has another stroke at work or at home or at a ballgame, the IWCC might relate it to this “event.”

If you review the facts above, neither case has an “accident” described—by that we mean nothing hit either claimant, they didn’t hit anything, no slip/trip, there was no safety breakdown or failure by the employer. You can’t prevent “non-accident accidents.”

In such claims, not to sound fussy, please take out the words “accident” and “injury” from any analysis, report or review. Please do not use the word “accident” or “injury” in your file, summaries or the IME background letter.

Probably more important for defense claims handlers, please ask your defense IME doctor and other experts not to use those words in their reports unless they are given a medical history of trauma or unusual occurrence that we don’t have. If you are an IME doctor in this state and want to provide value to your defense clients, consider this article carefully before you casually use such terminology.

Instead, we strongly urge everyone on the defense side of the workers’ comp matrix to characterize such events as “onset” or “alleged occurrence” or “event.” The problem we feel occurs if we call or name the onset of a medical condition at work an “accident” or “injury” and then send a letter to the IME saying it is an accident or injury, we start down the road of admitting an “accident” or “injury” occurred when the main issue is whether the sore hip/stroke or onset of problems has anything to do with work.

When you or an IME doc starts by calling the event/onset an “accident” or “injury”, in our view as veteran defense observers, you have gone half-way or more to losing the claim.

In the leg claim above, our IME doctor said the “accident was a temporary exacerbation of the underlying degenerative problem”—in Illinois, the Arbitrators aren’t going to focus on the word “temporary” in that opinion, they are going to focus on the implicit admission claimant had an “accident” when he didn’t have an event your mom or pop would consider accidental. Again, if you call it onset or claimed event or alleged occurrence, we affirm this problem at work had nothing to do with a  safety breakdown, trauma to client from an outside source or any of the issues that surround any definition of “accident” or “injury.” We should still be able to defend it.

To fully disclose, we are defending the claims above, we have not included strong identifying information and have no intention of affecting the outcome of the litigation—our goal is to advise our readers of the problem for future claims. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.

2-8-12; The Workers Compensation Research Institute reports Illinois highest in WC hospital outpatient costs. Sort of.

Please note some of these research results are from prior to the modified Illinois Medical Fee Schedule and some results are after it. Most important, this research cannot evaluate the impact of the sweeping cuts implemented by the 2011 Amendments to the Illinois Workers’ Compensation Act where actual treatment costs were brought down to just over 50% of hospital billings in the workers’ comp sector. For those reasons, we don’t consider their report/research to be critically important for our administrators and legislators to be concerned about. We do feel the report is noteworthy and wanted to give our readers the chance to review and understand this national news story.

Either way, WCRI just issued a report comparing outpatient hospital costs among 17 different states. WCRI researchers found the costs in states without fee schedules were 27-73 percent higher than the median of the study states with fee schedules. Also, states with fee schedule regulations based on a percentage-of-charges had higher costs compared to states with other types of fee schedules, such as per-procedure based or ambulatory payment classification based fee schedules with the exception of Illinois. The study measured hospital outpatient/ASC costs paid over a seven-year period from 2003 to 2009. Please note Illinois adopted medical cost reforms in 2005-6 and additional medical cost controls were enacted in 2011. The cost impact of PPP’s has not yet hit, as the concept is still tied up in rules committees.

Either way, WCRI found Illinois had the highest hospital outpatient costs among the 17 states and was 45 percent above the median study state, as of 2009. Researchers focused on services associated with the most common surgeries performed in workers' comp cases "since surgery-related costs make up approximately 60 to 70 percent of all outpatient costs," the report says. The services included diagnostic conditions involving knees and shoulders.

The 17 states studied were California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. They represent 60 percent of the workers' comp benefits paid in the U.S., according to the researchers. While Illinois had the highest costs among the states, Massachusetts had the lowest and was 60 percent lower than the 17-state median. Illinois' cost was more than three times the cost in Massachusetts for similar outpatient surgical episodes.

Five states studied had no fee schedule regulation as of 2009 -- Iowa, Indiana, New Jersey, Virginia, and Wisconsin. All had higher costs compared to states with fee schedules. Four states had fee schedule regulations based on percent of charges -- Florida, Louisiana, Minnesota, and North Carolina. The costs in those states were "67 to 113 percent higher than the median of the study states with other types of fee schedules," the study says.

With the exception of Illinois, states with per-procedure based or ambulatory payment classification-based fee schedules had relatively lower costs among the states studied. This analysis held true for six states including California, Maryland, Massachusetts, Pennsylvania, Tennessee, and Texas.

The researchers found growth in hospital outpatient/ASC costs resumed at faster rates after fee schedule changes in states with fee schedule regulations based on percent of charges rather than other types of fee schedules. For example, both Florida and California saw short-term cost decreases due to fee schedule reductions imposed around the same time. However, the costs in Florida resumed at faster rates than California. In 2004, California adopted an ambulatory payment classification-based fee schedule with maximum facility fees set at 120 percent of Medicare, while Florida adopted a percent of charge-based fee schedule. The following year, the hospital outpatient/ASC costs in Florida grew at 7 percent a year and increased 42 percent from 2004 to 2009. California, on the other hand, saw a slower increase of 30 percent, driven mainly by increases in the components of the fee schedule regulation, according to the report.

We thank the nice reader who sent this article for review and analysis. If you want the link to the WCRI article, send a reply. We appreciate your thoughts and comments.