5-1-12; Can this level of WC claims mismanagement in a sitting President’s home state affect the November Election?

Illinois Auditor General provides their scathing audit report documenting the smoking mess that is the Illinois WC program for our State Workers. Will all this government bungling rub off on the President?

Our President is an interesting and somewhat charismatic man—we know he is very popular in some quarters but we also feel he will be asked to take responsibility for our economy and general outlook moving forward. His opponent is clearly a solid businessperson who is going to make a strong pitch that you can’t run government on charisma and we would be better suited to look at the bottom line in these difficult economic times. We are sure the challenger is going to be able to point at Illinois’ troubled and chaotic government and tell U.S. voters our country can’t afford to go down the path the current President came from.

Right now, as loyal Illinois citizens and businesspeople, we have never seen any state in the United States so poorly administered. This state has problems with long-unpaid bills to its vendors, spiraling debt that is soon to be in the tens of billions of dollars, unfunded pensions, a Medicaid program they simply can’t seem to cut and a state government workers’ compensation program that is a model for how not to run a workers’ comp program. Taxes and tolls are jumping in cost and we probably will soon have speed cameras on every corner to help raise even more money on the taxpayers’ dime. Our new state motto may soon be—“Illinois, be sure to drive slow and enjoy the taxes!”

In the midst of all this, the Illinois Auditor General has released his department’s scathing review of the State of IL WC program. If you want the link to the report, send a reply. We find the results, for lack of a better term, revolting. The situation is so bad, it is hard to imagine how anyone can dig out of it. Even someone as upbeat as the President has to be shaking his head in disgust.

According to the report, for the four-year period January 1, 2007, through December 31, 2010, IL State workers filed a total of 26,101 workers’ compensation claims—to our understanding there are about 50,000 such state workers so that may be roughly one WC claim for every two workers. As of July 2011, over $295 million was paid in workers’ compensation for IL State employees on claims filed during the four-year period. We assume that amount doesn’t include WC benefits paid to state university/college workers. If you do the math, you can see the WC cost per employee is about $6,000 per worker, injured or not, over that four-year period. As we have told our readers, no private business on the planet would ever survive paying that much in WC benefits.

The audit of the IL State government workers’ compensation claims handling/adjusting program found:

Ø  Their data was incomplete, inaccurate, and inconsistent.

Ø  State adjusters handled claims and made decisions regarding compensability without appropriate investigation forms being submitted.

Ø  The claims managers and adjusters did not have caseload standards and could not always provide adjuster caseloads.

Ø  They have eight or nine adjusters who handle or “mishandle” about 1,500 claims each!!! We assure you it is not possible to actually adjust that many Illinois WC claims—in our view, they have to be overpaying and/or double-paying benefits on a routine basis. Please note it is much easier for an adjuster to endlessly pay benefits than take the many steps needed to cut them off.

Ø  The claims managers and adjusters needed to establish clearer policies regarding settlement contracts and approval limits.

Ø  The claims managers and adjusters did not seek legal counsel and negotiated settlement contract terms directly with the injured employee’s legal counsel—as we have told many of our clients and potential clients, it is a terrible claims mistake to “rely” on claimant attorneys to handle settlement contracts language as their ethical duties are to their clients and not you.

Ø  State adjusters do not have formal policies for conflicts of interest for adjusters or other employees who process workers’ compensation claims.

The audit of the Workers’ Compensation Commission found:

Ø  Their data was incomplete, inaccurate, and inconsistent.

Ø  They do not conduct annual reviews to evaluate Arbitrator performance. We feel the reason for this is how highly politicized and secretive the Commission has been under past regimes—we actually think the current administration is much more open than most.

Ø  There are no true guidelines for Arbitrators regarding permanency awards. We do feel this may change if/when impairment ratings come to general use as required by the statute.

Ø  Someone finally noticed the IWCC Review Board responsible for conducting investigations of complaints against Arbitrators and Commissioners did not meet for 3 1?2 years.

Ø  The agency did not have a formal policy or specific procedures to identify and prevent WC fraud. We feel this is because the many ITLA members who quietly seek to influence IWCC policy-making want to keep WC fraud a “secret” in the hopes no one will notice it.

What the state auditors couldn’t have pointed out because it is almost impossible to find is how many times the IWCC “penalized” the state adjusters and claims handlers for their mismanagement. We are confident penalties and attorneys fees are routinely awarded against the State by the State to the tune of millions. The problem with finding out how much it is points out how comically bad CMS’s database is. This startling feature of our impossible-to-comprehend WC system means one state agency, the IWCC is “penalizing” another state agency, Central Management Services to the benefit of Illinois State workers and to the wild detriment of taxpayers. Please note the reason we put “penalizing” in quotes is the penalties don’t truly mean anything because the state’s managers and adjusters aren’t disciplined about it in any meaningful way.

Like the City of Chicago, we consider it comical to note some state claims are handled by outside defense counsel as the result of a random and secretive RFP process—the lead State of IL WC defense attorney in the Chicago area is a Plaintiff attorney who has the State of Illinois as his sole defense client. We feel confident his main problem is getting the State to pay him for his defense work within a couple of years of providing the services.

The Auditor General’s report identified numerous shortcomings in both the structure and operations of the workers’ compensation program as it applies to State employees. These problems led to a program ill-designed to protect the State’s best interests as it relates to processing and adjudicating workers’ compensation claims for State employees.

As we indicate above, these sort of systemic problems may invariably “rub off” on the President as he faces numerous challenges in seeking re-election. We hope he will quietly tell the Illinois politicians who supported him during his first run to get their ship back into shape to avoid the embarrassment we are all starting to feel as citizens of this disorganized and anarchic state.

We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.

4-23-12; Amputations Remain a Demanding Claim to Manage in IL WC

We keep getting questions and keep answering them quickly and accurately. Here is some short-hand to remember if you get an amputation claim.

First, in this state, “amputation” equals bone loss as a result of a compensable injury. As soon as you become aware of an accepted WC injury involving an amputation, i.e., bone loss, you owe PPD for the amputation.

Second, the IL amputation rates aren’t just sort of high—they are wildly high. Right now the weekly PPD rates for an amputation start at $483.36 and cap at a lofty maximum of $1,288.96. An amputated arm in IL can cost an employer as much as $326,106.88

Third, PPD rates for amputation losses are 60% of the average weekly wage within the maximums and minimums above. If someone makes $50 per week and loses a finger or a toe, you owe weekly PPD at $483.36.

Fourth, we have heard and dislike the term “partial amputation.” If someone loses any part of the bone of the distal phalange of a finger or toe, they get 50% LOU of that finger or toe at the rates above. If the worker loses any part of the middle phalange of a finger or toe, they get 100% LOU at the amputation range we outline.

Fifth and finally, the attorney fee for a claimant attorney who handles an accepted amputation is $100. Due to the low amount, claimant attorneys rarely want the claim. But they will turn on the claim handler for hefty penalties and fees if you don’t immediately pay the amputation benefit at the amputation rates we outline.

Our recommendation in dealing with any amputation is to call, email or text any of our KC&A lawyers. We assure you we will provide clear and timely advice in handling these major claims. For contact information, look at the bottom of this email or just send a reply.

4-23-12; Illinois Taxpayers May Lose Twice When Two State Employees Go For A Joyride

For a while there was a large billboard on Interstate 80 near the Indiana-Illinois border that stated something like, “Ill-Annoyed About Taxes.” The billboard contained one of the many writings in Illinois to speak loudly about how this state is unable to pay its bills and obligations. Illinois taxpayers are already heavily burdened with state debt insofar as we have to pay a near-10% sales tax for every single item bought in this state. Our Gov and legislators have raised our income taxes and tolls also. Well, hold onto your seatbelts Illinois taxpayers because our State just got hit with another big bill because of a joyride taken by two state employees. 

In the appellate ruling of Isom v. Barham, our Appellate Court outlined the new debt that is to be placed on Illinois taxpayers to pay both the workers’ compensation benefits of the negligent driver of a state-owned automobile and a $1 million dollar verdict for the wrongful death of a state-employed passenger in the same vehicle. 

In Isom, the widow of a state-employed prison-dietician brought suit after her husband died in a single car automobile accident. The evidence indicated the warden of an Illinois state prison had caused the accident. Ultimately both the warden and the dietician’s widow were awarded money from the taxpayers of Illinois because of the accident.

The warden got workers’ compensation benefits since it was determined he was acting in his official capacity and within the scope of his employment when he rammed a state-owned car into a tree while driving home after stopping at a bar following a political event. In addition, the dietician’s widow got a $1 million dollar verdict when the trial court ruled the workers’ compensation exclusivity provision in Section 5 of our WC Act did not bar the prison-dietician’s widow from suing her husband’s boss, the warden, in a tort action arising from the accident. 

The case arose when the prison warden used his state-owned car to take the state’s prison director to a political event.  After dropping off the director, he and the decedent went to a bar where the warden drank a couple of beers. After the warden and the decedent left the bar, the warden drove the state- owned car off the road and into a tree.  Sadly, the dietician, who was the passenger in the car, died of his injuries at the scene of the accident.

Based on their investigation, prosecutors charged the warden with reckless homicide and he was convicted and sentenced to four years in prison.  This conviction was later reversed on appeal based on the argument that there had been insufficient evidence to prove the warden was guilty beyond a reasonable doubt. 

In addition to the criminal charges, the decedent’s widow sued the warden for killing her husband.  During trial, the warden raised the Workers’ Compensation Act’s exclusivity provision as an affirmative defense. In asserting this defense, the warden’s attorney argued that the exclusivity provision of the Workers’ Compensation Act barred recovery because the decedent had been working within the scope of his employment when he died.  Despite the widow’s arguments that her husband had not been in the scope of his employment when he died, both sides agreed and stipulated that the warden had been within the scope of his employment at the time of the accident. 

The widow asked the trial court to rule as matter of law her husband was not within the scope of his employment as the prison dietician when he was riding in the car with the warden. Ultimately, both the trial court and the Appellate Court agreed with her argument and ruled her husband had been outside of the scope of his employment when he died. Of course, this ruling cleared the way for the widow to recover in her wrongful death case since she was no longer constrained from taking a smaller recovery by bringing a workers’ compensation case as a workers’ compensation widow. 

Everyone who is reading this blog undoubtedly knows Section 5 of the Workers’ Compensation Act operates to make workers’ compensation benefits the exclusive remedy for an injured employee who brings suit against a negligent co-employee. Ultimately, the trial court in Isom ruled as a matter of law Decedent had been outside the scope of his employment during the accident since Decedent accompanied the warden voluntarily and not as an obligation of his work. Other factors the court looked at to rule in favor of the widow included the fact the warden had not asked Decedent to accompany him to the fundraiser and because the warden, and not Decedent, was driving the car when the accident occurred. The Appellate Court agreed with this ruling and stated, “no reasonable person could conclude the decedent had been acting within the scope of his employment as a dietician” when he died.

As we outline in the first article above, Decedent could have been treated as a “traveling employee” because he was an employee and clearly was “traveling” when this unfortunate event occurred. We consider this another example how the Illinois courts sometimes contradict themselves to use “both sides” of the law to insure hefty benefits are provided no matter what path things need to go.

One has to feel sorry for the widow of the prison dietician since she lost her husband in such a tragic accident. Although it is sad that a life was lost, the outcome of this case raises a legal paradox: could the warden be acting within the scope of employment so he could recover workers’ compensation benefits while his state-employed passenger was, at the same time, so clearly outside the scope of employment so his widow could benefit from the more than $1 million dollar verdict she would have lost if her husband had been inside the same employment scope as his warden-boss?

Whatever happens, in this state, you can only be sure the taxpayers are the losers. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.

This article was researched and written by Ellen Keefe-Garner, J.D., RN, BSN. She is happy to send you the website for the case above and can be reached at EMKeefe@keefe-law.com.