7-17-12; Odd and Odder MVA Claim involving Municipal Defendant—we consider it relatively important for muni-risk managers to be aware of

In Ponto v. Levan, 2012 IL App (2d) 110355 (June 27, 2012), Plaintiff sued Defendant auto driver for injuries suffered in an auto accident. Plaintiff alleged negligence and asserted Defendant drove the vehicle while intoxicated.

In turn, Defendant’s counsel answered the complaint and filed a third-party counterclaim for contribution against the municipality, alleging the City's negligent maintenance of its water mains created an ice patch that caused Defendant's vehicle to skid into Plaintiff's vehicle.

Defendant auto driver admitted liability, and the jury found in Plaintiff's favor, finding Defendant 65% at fault and the City 35% at fault. After the verdict that was based on the counterclaim, the Court properly denied Plaintiff leave to amend to add the City as direct Defendant, as the one-year limitations period of Tort Immunity Act applied, and Section 2-406 of the Code of Civil Procedure did not act so as to extend the period.

Thus, unless and until Defendant auto driver pays Plaintiff more than 65% of verdict, the City as a defendant owes nothing. The Appellate Court found the trial court properly denied City's motions for discretionary immunity; on date of accident, as their water superintendent was not exercising discretion as to any improvement or plan of road where accident occurred.

We join with one of our experienced claim managers in finding the Appellate Court was arguably incorrect on the immunity decision, but that is not the unusual aspect of the case.

Regarding the inability of Plaintiff to collect from the City, the initial reaction was it was inherently unfair Plaintiff will receive nothing from the City after the jury found the city partially at fault. However, the reason this occurred is Plaintiff failed to sue the City as a direct defendant.

In that regard, the inability to recover from the City is based on the same concept that is regularly applied if someone fails to bring a civil action against an IL municipality within one year. There are many situations when the passage of time has not prejudiced the ability to investigate the incident. One vehicle could rear-end another and a video of the entire incident could be on the web, but the one year statute would still apply.

The failure here may be with Plaintiff’s attorney. There was plenty of time for an amended complaint to bring the City in within the applicable one-year statute. We thank our intrepid reader for his thoughts and comments on this important ruling.

7-17-12; NO FEES ALLOWED on MSA values for Claimant/Plaintiff counsels???……not so fast, my friends. Thoughts from Shawn R. Biery, our certified MSA lawyer/consultant

In what appears to be a further erosion of the basic consideration to protect future medical interests when dealing with a potential for Medicare payments, a California Workers' Compensation Board has ruled Plaintiff attorneys can take a fee on the MSA value. Their June 22 decision in Viale v. Lockheed Martin, Nos. ADJ3845272 and ADJ 1335789, is a change from a similar claim decision reached two years ago in Pratt v. Wells Fargo, No. ADJ579864.

No one knows how the troops at ITLA and aggressive claimant attorneys from other states will handle this situation but we are sure they are watching and want to dig in and get their attorney-members more money, if there is any plausible way to do so.

In Viale, attorney John Bloom negotiated a global settlement of $638,982 for a 2001 injury which included $46,066 as a lump to start a Medicare set-aside (MSA) and $175,514 was used to fund an annuity for making future payments to the MSA. Bloom requested attorney fees on the total value including the MSA funds.  Workers' Compensation Administrative Law Judge James Johnson awarded him only $40,000, which was roughly 15% of the settlement outside the MSA value and in doing so reasoned the MSA funds "have not placed the applicant in a more advantageous position" since he continued to need treatment and since he could only use the funds for future medical and in this case the funds did not pass to the estate upon death.

California ALJ Johnson further took support for his position from the California WCAB's 2010 decision in Pratt which involved a claim for attorney fees on a $485,000 settlement where the attorney was awarded $15,000 of the $45,440 he had requested. On reconsideration in Pratt, the WCAB panel noted the applicant in the Pratt case had previously obtained an award of further medical treatment, entitling her to lifetime care paid by her employer, but the MSA would supplant that award and require she fund her own medical treatment outside Medicare with a buy-out also taking place so the attorney was awarded 15% of the amount the applicant would have received if the parties had not agreed to a buy-out of the applicant's medical treatment award, which wound up being $21,752—or a fee on the amount which created a more advantageous position essentially.

The Board appears to have distinguished the current Viale claim from Pratt due to the lack of record in Pratt allowed the board to deduce whether or not the applicant benefited from the MSA and in Viale, the Commissioners rejected ALJ Johnson's determination the applicant had not benefited by the MSA because the MSA allowed applicant to avoid having to deal with the adversarial process inherent in the workers' compensation system. (And some would say being out of the WC system is better than winning the lottery).

It should be noted since the panel decision is not binding precedent, this doesn’t become the law in California or anywhere else—however it gives us some insight. Plaintiff attorneys in related news articles appear to be supportive of the decision and argue they are entitled to the fee for all of their “work” on the MSA and gaining the extra benefit for their clients. The defense bar doesn’t seem to have much of a concern if it doesn’t raise the cost for them or their clients (with the argument that it simply comes out of what was already offered with a bigger portion going to counsel and less to claimant).

As we reported recently, taking some portion of an MSA for other purposes is gaining in popularity with the courts. The last Illinois case we reported was  In re Marriage of Christopher Washkowiak and Rosana Washkowiak 2012 IL App (3d) 110174, where the Court in that case ruled since money did not actually go to Medicare, it was a “proceed” and the spouse had a right to her portion with the court concluding they were simply enforcing the agreement Christopher had entered into with Rosana.

As a defense attorney who solely defends claims and also deals with MSA questions on a daily basis, I haven’t seen an enormous amount of “work” performed to determine an MSA on the plaintiff side to justify thousands of dollars in fees but there are those claims where it could be an additional annoyance and some fee is probably justified. Regardless of personal feelings, moving monies which are set aside for future medical care to other parties will erode the “protection” of Medicare’s interests in the minds of those in power at CMS and we believe it will create more problems than solutions.  Multiple issues arise with all of these types of rulings because, since no party can contract around Medicare’s interest, the portioning of the MSA for fees and other interests lead to a less than fully funded MSA which could create issues in the future, not only for the Plaintiff/Petitioner, but the other parties if Medicare issues conditional payments and seeks reimbursement.

We feel this ruling along with the Washkowiak ruling continue to open the door for individuals to use the MSA in non-medical circumstances with unknown consequences. This writer continues to believe it will lead to more supervision and possibly direct federal control of the MSA proceeds upon completion of settlements.  We will continue to provide updates they further muddy MSA issues. For a copy of the cases noted above or with any other CMS related questions or questions regarding these ongoing cases, please email Shawn R Biery JD, MSCC at sbiery@keefe-law.com or call him directly at 312-756-3701.

7-17-12; As the Beatles’ song says, “it was twenty years ago today”--20 years ago this month in July 1992, we started writing this KCB&A Update

When this was first written/printed and published, we put it out with a bubble-jet printer as a three-fold flyer that was mailed to our readers (does anyone remember “snail mail.”). About a dozen years ago, it morphed into email and we currently only print and mail it to one former Arbitrator who doesn’t “do” email. The initial readership was about 500—today, we have over 7,500 weekly readers that we know of. It appears there are lots of “secondary readers” who read the KCB&A Update and send it along to their friends and colleagues.. We have written numerous articles from questions received from our readers. We thank everyone for your contributions and support over these many years.

The goal of the Update over the decades was to tell the defense industry about developments and the sometimes secret changes being made to our law. Since that time, basically every claimant lawyer in the entire state has made it a point to tell us the KCB&A Update is defense-oriented and riles up HR, claims and other defense folks to look at their sometimes rising WC costs. We have spent about twenty years telling the claimant bar we understand and respect their views and still think someone in this state has to take up the side of the Illinois business and the claims/defense industry. In our view, we are still fighting the good fight and have our clients to thank for it.

In surveying 20 years of changes to the IL WC system, we note it has evolved dramatically. We remain very happy to see our Appellate Court, Workers’ Comp Division stop their prior practice of issuing secret Rule 23 decisions that we felt hid changes in the law from the folks who need to know it the most. While Rule 23 is still being used for some appellate rulings, all decisions are now published on the web for everyone to see.

In our view, without any question, the biggest and most important change to the IL WC system is reigning in rising medical costs which remain the number one cost in all U.S. workers’ comp systems. In the larger picture of all workers’ compensation systems across the globe, the challenge for the future is getting solid medical care for work-related accidental injuries at a fair price. We assure our readers the matrix has switched from employers complaining bitterly about ever-rising costs to doctors and hospital and other caregivers complaining bitterly about WC cost-cutting measures.

We expect that trend to continue. We aren’t sure where it will all end but we are certain all Americans have a relatively unrealistic goal of unlimited-on-demand medical care. We feel there are some doctors and other care-givers who are willing to feed that flame. At some future time, we are going to have to realize the unlimited-on-demand care model is unrealistically expensive. We feel Americans are going to have to sit back and measure the cost-effectiveness of medical options in both workers’ compensation and group health settings. We are also certain Americans aren’t going to be able to sue and get random but giant med-mal awards when doctors provide necessary but scientifically limited testing and care.

What are the best options to control medical costs in IL WC?? We were recently asked by a client about this situation--claimant had a finger injury and was released to one-handed work. The worker was going to a noted overtreater who wanted a CAT scan for a finger injury and took the worker off all work. The question was—what is the best or most effective way to counter that medical advice? Our recommendation was a rapid trip to an intrepid OccHealth provider with other options waiting in the wings. OccHealth is rapid, inexpensive and can be effective when properly implemented. We would love to hear your thoughts on handling that one.

As to mainstream WC medical cost controls, here are the main tools:

·         OccHealth Providers—we are telling every and all Illinois employers to get a solid OccHealth provider for all claims. While your claimants can go to their own docs, we recommend you have a “policy” requiring them to go to yours. If the worker won’t follow your policy, deny benefits until they do. You can get a worker into an OccHealth provider on basically an “any-day” basis and you should consider this a cost control mechanism to get solid care for your injured workers with an OccHealth provider to manage the claim. OccHealth providers will give you a rapid second opinion on the need for diagnostics, surgeries, time off and interim work restrictions.

·         IME’s or Independent Medical Exams—they are still out there folks. We consider them the best tool to fight casual, oops, we mean causal connection and the need for major surgeries. The problem with IME’s is the concept we call “character assassination” of IME doctors where anything the IME says is somehow “tainted” by the fact they don’t agree with claimant’s attorney and the need for never-ending care. We ask IME doctors to rely on science and national;/international studies to justify their decisions. Don’t make it your “personal opinion” on care versus the treaters—that is bound to lose. If you want our list of recommended IME providers who are solid treaters but also provide thorough and detailed opinions, send a reply.

·         UR or utilization review—this concept landed in IL WC on February 1, 2006. In our view, it is a very solid idea that should be used at the beginning of all medical care for a work-related injury and end when care ends. Basically, a UR nurse can approve care but can’t non-certify. If the nurse non-certifies proposed care, the issue moves to a general M.D. for their opinions. If the generalist M.D. non-certifies the care, it can be brought to a specialist in a UR appeal process. We feel the IWCC is strongly adhering to this concept in cutting payments and approvals for overtreatment, particularly where it relates to chiro care and physical therapy. Please note traditional UR providers can’t and won’t comment on causal connection and leave that issue to the IME doctors for final determination. Our favorite folks for this one are CID Management and GENEX who provide rapid and excellent UR results.

·         Medical Fee Schedule—this was also started as something of a pilot project in February 2006. Medical fee schedule reimbursements were greatly reduced last year and the scope of the IL WC Medical Fee Schedule has been greatly expanded to cover lots of prior gaps. At present, the medical “sticker price” charged by most medical and other healthcare givers for their care is reduced by 53% based upon our online schedule that can be viewed at: https://iwcc.ingenix.com/download.asp. In our view, Illinois business is saving millions due to this medical cost control concept.

·         PPPs or Preferred Provider Programs are about to hit and will put employers who are smart enough to enroll into a system where their employees have one ready-made choice of doctors/care-givers or their own single second choice. You can reign in care just by offering the PPProgram! We feel this is a great concept that will save Illinois business even more money in the medical side of their claims. We recommend you get more information about PPP’s from Guy Swanson at HFN, Inc. You can reach Guy or his staff at HFNAccountManagement@HFNINC.COM. For medical providers who want in on the network, feel free to email them at: HFNProviderManagement@HFNINC.COM. We expect it all to roll-out for your IL WC claims this fall or in the next quarter of 2012.

·         Nurse case managers—the most unfairly maligned of all IL WC medical cost controls are the intrepid nurses who provide telephonic or onsite management of WC medical care. They do great work and provide solid value in non-litigated claims. When cases go to lawyers, many of them are still able to provide transparent reporting to both sides. Someday, we hope there will be “rules in the knife-fight” and NCM’s will get statutory approval of their great work in litigated claims.

·         Illinois Arbitration staff—one thing our administrators do very well is to provide quiet and circumspect advice to both sides on disputes over questionable claims or surgeries. We look to our hearing officers when possible to ask them for their veteran thoughts on what to do about medical disputes. To the extent they may provide their eventual rulings on a medical difference of opinion, pretrials before the highly professional and knowledgeable Arbitrators can go a long way toward rapidly ending disagreements.

Please note there are strengths and weaknesses to each facet of cost-control outlined above. We feel our 14 defense lawyers and staff can assist all of our readers with advice on how to best optimize medical cost-savings in any claim. Please note we have Ellen Keefe-Garner, J.D., R.N. on staff who is a licensed and veteran defense lawyer and nurse in both Illinois and Michigan. She is at the top of the WC industry on what should be appropriate care in a medical-legal setting and is available to consult at any time-send a reply.

We hope the national risk managers and others who have criticized our IL WC system in the past are now starting to experience the giant savings presented by these many cost-cutting concepts. We hope you provide us any further thoughts on how to make IL WC medical care certain, fair and effective for injured workers. Please do not hesitate to post your thoughts on our award-winning blog.