1-7-13; DOI "Offshoring" Prohibition for UR/TPAs Won't Affect IL WC; Cook County is a Model for IL Gov't WC Programs; Appellate Court "Dents" An IL Employer For More WC Care and much more

Synopsis: The IL Dep’t of Insurance Issued Confusing and Unprecedented Memo Threatened to End Out-of-State UR and TPA’s;Then…

Editor’s comment: You have to love this nutty State. A source sent us a December 20, 2012 edict issued by Andrew Boron, Director of the IL Department of Insurance. It appears to indicate you can’t conduct utilization review or UR or run a third party administrator or TPA outside our state boundaries. That would be a seminal change in the IL WC system. When we received it, we started our research and also sent it to a number of confidential contacts for their thoughts.

From what we could tell in a simple reading, the Director of the IL Department of Insurance was suddenly requiring all TPA’s and UR providers to move their offices/operations into Illinois or be barred from doing business here. This unusual Memo can be reviewed on the IWCC website’s News section:

Dept of Insurance issues UR memo

The Department of Insurance has issued a memo on utilization review services. To read it, go to http://www.iwcc.il.gov/CB2012-12.pdf

To clarify, the memo speaks to both UR and TPA services and their licensure. We did diligent research and reviewed the statutes listed in the memo. As veteran defense lawyers, we don’t agree at all with Director Boron’s legal position on what the Managed Care Reform and Patient Rights Act says and how the IL DOI now appears to want to enforce it. That said, for a number of reasons, we don’t want UR and TPA’s to be “offshored” or situated in foreign countries. On the opposite side of the same debate, we don’t think of UR’s or TPA’s in Indiana, Tennessee or California to be “offshored” work. One also has to wonder about what the IL DOI will do if you have an Illinois office with UR reviewers or claims adjusters “remoting in” from across the U.S.

We then sent an email inquiry to IL DOI Director Boron and asked for the specific language in the Managed Care Reform and Patient Rights Act to which he referred. We are confident our various sources/contacts also sent similar inquiries. At the time you read this article, we assure our readers he hasn’t officially replied directly to our inquiry. The whole thing was then reported to the entire country inwww.workcompcentral.com and their intrepid Central Bureau Chief, Bill Kidd. He quoted your editor on our thoughts and he also quoted one of the top Plaintiff/Petitioner attorneys in IL WC, David Menchetti who indicated he felt UR providers should practice in the state where they are performing reviews. Mr. Menchetti was quoted as comparing UR and medicine in Indiana to India—with respect to this solid lawyer and advocate, we are fairly sure there may be some distinct differences between the practice of medicine in those disparate and distant venues.

We later got a “semi-official” response from the IL DOI sent to one of our contacts. The response is from an analyst with the IL DOI—we don’t have her permission to use her name so we aren’t going to publish it. To the extent her reply is from a state official in response to an official inquiry from whatever source, here is what it says (in pertinent part):

After receiving several calls and emails from your contracted companies this morning I felt it would be beneficial for me to intervene and attempt to clarify the intent of the company bulletin.  At this time, the above referenced bulletin does not include worker’s compensation or independent review organizations registered with this Department. All URO’s providing health utilization reviews will be required to have an Illinois office and hold contracts with Illinois licensed physician reviewers. Going forward all companies registered to perform UR (health) will have at a minimum of 1 year to comply with this bulletin. Our staff is currently working on a Q&A reference page to address all of the questions/concerns we have received.

We have no idea why or how this distinction can or should be made by our state administrators. We point out it is almost impossible to tell when medical care is going to be “workers’ comp” versus non-work-related healthcare; that status may change or morph on a minute-by-minute basis.

From the perspective of the workers’ comp industry, we assume from the official response above, the IL Dep’t of Insurance isn’t coming after you for either out-of-state WC UR or TPA services now or in the future. To our readers in the healthcare industry apart from workers’ comp, this memo will clearly affect your operations. If would appear you have a decision to make—if the DOI is going to require an Illinois office/presence, you can add one, if you don’t have one. If you don’t have one and don’t want to get one, you may have to sue the Department to block enforcement of this concept. Again, it is our strong perspective they don’t have a strong legal basis for what they are doing.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Cook County’s WC Cost Containment Program Success – A Shining Example of Good Government That Should Be A Paradigm for Others.

Editor’s comment: As WC healthcare costs continue to rise employers in both the private and public sector are looking for ways to reduce workers’ compensation costs. The second largest county in the nation, Cook County Government is no different.

In 2008, the Cook County Risk Management Dep’t in collaboration with a leading provider of integrated managed care GENEX Services Inc. developed and implemented a customized cost containment program. This was an ambitious endeavor which has become a comprehensive program that has expanded in phases over the past 5 years. Their medical cost containment program includes

v  Medical Bill Review (MBR)

v  Preferred Provider Organizations (PPO)

v  Case Management

v  Medical Diagnostic Testing and

v  Utilization Review (UR).

These initiatives continue to yield to impressive results for Cook County. Combined savings from program inception in August 2008 through fiscal year 2012 is over $47 million. Savings in 2012 alone reached a staggering $17 million. Medical Bill Review is the largest contributor with over $30 million in savings with $3.8 million realized from PPO discounts. The Return on Investment by this government body continues to grow year over year. As predicted, 2012 delivered an impressive ROI of $52.07 to 1, up from the 2008 ROI of $10.76 to 1.

The biggest surprise in savings was Utilization Review or UR. In 2005, the Illinois legislature passed Amendments to the IL WC Act which brought UR to our state for the first time. UR legislation was not widely accepted and often criticized in some quarters. The IWCC slowly and surely has accepted the UR claims tool to the point it has become commonplace. As we told our readers when it started in 2005-6, if you use it in non-litigated WC claims, you can’t miss on savings while also insuring your claimants receive quality care.

As IL employers in the public and private sector began to use this effective claim tool it became more understood, accepted and respected. Cook County has realized over $8 million in saving since implementing UR in 2008. The UR program was expanded in phases as the success began to impact costs and influence treatment patterns. By using the IL UR Guidelines the County of Cook has reduced unnecessary and excessive Physical Therapy by 26,000 visits. The more recent 2011 Illinois Work Comp reform strengthens the UR provisions giving additional consideration and credibility to UR determinations. The new provisions offer support for the program and contributed to increased medical cost savings opportunities.

Since 2008 Cook County’s workers compensation spend has averaged $20M and their team manages about a thousand claims a year. They also contribute their success to an increased effort on early intervention, improving overall communication, and a focus on Return to Work.

From their success, we urge our readers to get moving on the facets that have worked so well for this large organization. Their WC program successes are easy to quantify. If you need consultation and assistance on implementing UR, Medical Bill Review, PPO’s (with PPP’s to follow later this year), Nurse Case Management and Medical Diagnostic Testing, please send a reply.

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Synopsis: “Dent” Minimus, Non Curat Lex?? Is There No Imperfection So Tiny In IL WC That Our Reviewing Courts Won’t Demand Illinois Employers Fork Over Even More Money in WC Benefits?

Editor’s comment: Again, we don’t feel you can make this up, folks. In what we consider an astounding IL WC ruling in Dye v. IWCC, No. 3-11-0907WC, December 31, 2012, a divided 4-1 Appellate majority considered a claim for an infinitesimal “dent” on the side of an injured worker’s forehead. This microscopic “dent” was described by a physician as being one centimeter high and two centimeters wide—if you aren’t sure how metric measures translate, those measurements indicate the “dent” was .39 of an inch high by .78 of an inch wide. We consider that eenzy-teenzy facial imperfection, as described, to be a miniature issue to deal with; unworthy of appellate concern. Our headline above is a play on the Latin saying de minimus non curat lex which means little things can’t or shouldn’t be “cured” in law.

Claimant was asking for prospective medical care to refine the tiny dent into something less than a dimple. She was also asking for penalties and fees against her employer for their refusal to voluntarily offer additional medical care to render her “dentless.” The claim for penalties/fees was denied from the first request to present; the endless fight over medical care endured.

From our review of the various arbitration, review, circuit and appellate court decisions, it appears the employer paid for a hospital visit, a CT scan and two different visits to family doctors. After hearing the case, the Arbitrator found claimant already saw enough doctors under Section 8(a-3) of the IL WC Act. The Commission didn’t follow that view, as the two doctors legally provided to an injured worker under Section 8(a-3) were in the same clinic. However, the Commission didn’t award prospective “dent repair” as there wasn’t evidence of an observable disfigurement.

Our Appellate Court majority would have none of it. They reversed under the “manifest weight of the evidence” standard. As we have advised our readers on numerous occasions, we feel the “manifest weight” standard exists only to insure claimants receive benefits because it is almost never employed by our reviewing courts to deny benefits. If you carefully read their ruling, we have no true idea why the appellate majority didn’t feel either the Arbitrator or Commission didn’t fully and carefully consider the facts before them and rule this miniscule facial blemish didn’t need additional expensive medical attention. We also point out innumerable appellate rulings join to summarily find resolution of workers’ comp medical issues are within the sound province of the IWCC. We also read with chagrin the dissent by Justice Turner who pointed out the record before the Appellate Court didn’t have any photographic or other competent evidence of visible disfigurement.

Finally, we point out the relative madness of a claimant and her attorney taking a case for a “bumps and bruises” injury from January 2007 for a blemish the size of this capital letter O through four different levels of litigation to now have it remanded back to the IWCC for further findings. We have to wonder if the six years that have passed and the normal aging process have resulted in the complete disappearance of this tiny blemish since its “born-on” date. One has to wonder what the Commission will do on remand if the dimple has completely disappeared!

The ruling is on the web at: http://www.state.il.us/court/Opinions/WorkersComp/2012/3110907WC.pdf. We appreciate your thoughts and comments.

1-1-13; Can Someone Find a Lobbyist for IL Taxpayers?; Jim Egan, J.D. Reviews 12-year-old IL WC Claim Going Backward; Joseph B. Moore, J.D. on Unemployment Denial and much more

Synopsis: If “Kids Need Lobbyists,” In Relation to Illinois and Chicago’s Nutty “Pension” Crisis, So Do Illinois Taxpayers and Businesses, Folks.

Editor’s comment: We were mildly surprised to see our Illinois Workers’ Compensation Commission’s website weigh in on Illinois and Chicago’s impossible-to-fix public employee “pension” crisis. The IWCC’s excellent and newsworthy website athttp://www.iwcc.il.gov/news.htm#mw2 points to two different www.youtube videos on the web they feel are worth watching. We ask our readers to take a look if you have the time and interest to do so. Our problem with Illinois government-employee “pension” programs match the same concerns we have about most things with Illinois government—embedded chaos, disarray and turmoil on numerous levels of state and city government. We have long-time, decades-old leaders like Illinois House Speaker Mike Madigan, a member of the Illinois House since 1971 and City of Chicago Finance Committee Chair Ed Burke, first elected in 1969 who know precisely how we got there and appear to care less about the mess they have supervised. They are clearly not openly accountable for any of it. The last thing we hate about all of this is the answer to any government issue in this state is unlimited borrowing because no one has the guts to raise taxes to pay for government commitments. Simply put, instead of new taxes, the multi-zillion-dollar government borrowing is starting to inexorably bob to the surface, like flipping over a giant iceberg.

Illinois Government Pensions are the Best Investment on the Planet for Government Workers and the Worst Deal in History for Taxpayers and Businesses

If you owned and operated a hot dog stand, a shoe-shine booth or a law firm, would you ever hire a worker who could work for you for twenty years, pay something like 5-6% of their salary into a so-called “pension” fund and then force you to pay their salary and health care benefits for up to fifty more years, long after they had departed from your employ? Would you offer that impossible-to-finance benefit for all your workers over the years and have more folks on “pensions” than on your active payroll? Could any business survive in doing so? As you read this, the State of Illinois and City of Chicago may have as many as a million workers who are receiving or will be certain to receive “pensions” during their lifetimes. Some of them will use the “pensions” to live, thrive and survive; some of them will use the “pension” as a generous second income source from which to make a tidy profit. If you want the poster child for triple-dipped post-government income, former Chicago Mayor Rich Daley gets a City Pension, a State Pension and doesn’t “need” either pension from the way-past-broke government pension funds because he is working at a law firm making solid money as a consultant.

For an example of the above financial model, about ten years ago, some misguided bureaucrat who worked with Finance Chairman Ed Burke agreed to allow Chicago Public School teachers to only contribute 2% of their annual pay into that CPS teacher “pension” fund. Right now, Chicago Public School teachers make about $75,000 on average. If you do the math, 2% of $75,000 is $1,500. After twenty years of contributing, a Chicago teacher would put only $1,500 times 20 years or $30,000 into the kitty for their future lifetime pension rights. When that teacher is fully vested, they would get about $60,000 a year until their passing. To our understanding, they also get 3% COLA increases too. For a career investment of only $30,000, they will go through that career “pension” contribution in half a year and may receive $60,000 each year for twenty, thirty, forty or fifty years! The incredible but certain payout over that time could be more than $3,000,000 based upon career contributions of $30,000!!! We consider that an amazing return for the worker unlike any in the history of the planet and an awful shot to city taxpayers who are truly funding this financially incomprehensible mess. We want to emphasize you can’t blame the teachers who are taking what they are being given—there is enough blame to go around for everyone in Chicago government. Our city fathers are now trying to sell Midway Airport to put a tiny patch on the monster and spiraling problem.

For another example, Circuit Court judges in this state make between $155,000-$180,000 in annual salary. They contribute a little bit more to their judicial pension kitty that Chicago teachers—judges contribute about 8% for single judges to 12% for married judges. The problem with judicial pensions is it only takes six years to be fully vested. Starting at the end of their sixth year, a sitting judge hasn’t contributed one-half of a single year’s salary into the “pension” fund but can sign up for a lifetime payout of about $120,000 a year with COLA increases. Again, they may receive that money for 10-50 years. For their short-career “pension” contributions of as low as $75,000, a retired judge might get $5-10 Million in return plus lifetime health care coverage. We consider that an amazing deal for the jurists involved and an unbelievable bad deal for Illinois taxpayers and businesses who don’t even know it is happening. Again, you can’t blame the judges who work hard and put their lives on the line every day of every year but six year’s “pension” contributions to get millions and millions after you are off the front lines seems unsustainable.

The point we are making isn’t to fix blame or fault upon pensioners; our point is you can’t create a sensible “pension” program where the pensioners don’t contribute at least 3, 5, 10 years’ salary into the program to then receive guaranteed and substantial lifetime income. In our view, the current programs can’t be maintained as they are today—they have to be dramatically revised to make any sense.

Will The Media and Everyone Else Stop/Cease/Desist on Using the Term “Unfunded” When It Comes to Illinois/Chicago Government Pensions? Please!!!?

Another thing about state/city “pensions” that we despise and dislike is the continued use of the blurring accounting term “unfunded” to refer to Illinois “pension” shortfalls. No one other than an accountant or actuary truly knows what it means—for the inside scoop, you have now come to the right place. We assure you right now Illinois state pensions are “funded” at about 40% of the annual payout.

What does “funded” versus “unfunded” mean? It is simple—“pensions” in state governments across the country are “funded” with three apparent sources and one hidden and confusing “unfunded” source.

1.    One is employee contributions—as we outline above, the employees are putting in a certain level of money from their paychecks as contributions. That level varies from government pension to pension.

2.    The next source of “pension” income is investment income from wherever the State or City of Chicago put the money to obtain a safe investment return. Returns on investments are down across our country since about 2008 when the current recession started.

3.    The final source of “pension” income is taxpayer dollars. The problem at both State and City levels came from politicians not putting enough money in to meet the requirements of the pension funds to pay out what is owed to the government workers.

The hidden and confusing “unfunded-funding” source is again from taxpayers—it is billions of dollars being borrowed to pay the shortfall in pension contributions from all sources. Right now, Illinois state pensions are less than 40% “funded” meaning they can’t pay even half of what is owed from the three “funding” sources--employee contributions, investments and government/taxpayer-matching funds. There are about 750,000 workers who are in these pension systems and billions and billions are needed to make up the 60% that isn’t in the kitty. What does government do when they don’t have money? Sadly, no one has even slightly suggested levying a new tax to pay what they have tied us into—instead they borrow it which means we have to eventually pay both principal and interest on billions we admittedly don’t have.

Guess who has to pay back the billions being borrowed—YOU DO!! This is why the Illinois Workers’ Compensation Commission and our Governor are putting out www.youtube.com videos about your kids needing lobbyists. They are letting us know we are all basically smoked; we can’t keep borrowing money to pay the interest and principal on the whopping debt that is building up. We don’t think your kids have to worry about it—in five to ten years, this State and the City of Chicago are going to be so deeply in hock, “pensions” may cause government bankruptcies.

The Final Camel-Back-Breaking Straw in Illinois/Chicago “Pension” Reform That We Hate—Everyone Points to the Illinois Constitution As Requiring Government Bankruptcy!!!

The last thing we heard from the Chicago Tribune® report today on “pension” reform are statements like this:

Few states have enshrined pension protections in their constitutions quite as emphatically as Illinois. The charter's so-called pension clause — which states that pensions cannot "be diminished or impaired" — was written at a time when the financial condition of many retirement systems in Illinois was nearly as bad as now. The difference back then was that courts in Illinois considered pensions a "gratuity" that could be reduced in a financial pinch, and actually had been in other states with similar legal standards. The pension language was added to the constitution to address state workers' fears about benefit cuts, records of the 1970 Constitutional Convention show.

In response to such silliness, we tell our fellow members of the media and everyone in state/city government the simple phrase “Darn the Torpedoes, Full Speed Ahead.” We are facing the mega-crisis of all crises in this state. In our view, we need to start fresh with a new Constitution and new laws on “pensions” that make simple financial sense. The State Constitution was drafted by Illinoisans and can be changed by Illinoisans. If that is a lot of work; well, get started. If we don’t make better sense of what we are doing, we are certainly going to face more giant budget cuts in non-pension government needs and unquestioned bankruptcy that will require others to make those decisions for us.

Simple Financial Solutions That No One Will Consider to Fix State/City “Pensions?”

·         Limit the post-employment “Pension” payout to a fixed period, say 5, 10 or 20 years?

·         Match “Pension” contributions/investments to what the pensioner receives? We understand this is how the State of Wisconsin offers their pensions.

·         Make “Pensions” only for folks who are not working at all after leaving government service—if a pensioner has a post-government job, have the State/City money be set off by that amount until they stop the other job and actually retire?

·         Right now today; move everyone to a 401K style retirement system, like the rest of the U.S. in the private sector.

·         Hold a symposium or three and listen to all sides including kids, pension experts, rabid union members, local governments, businesses and everyone interested.

We salute IWCC Chairman Weisz and our Governor for their work to bring these issues to the forefront. We hope everyone who cares about our State and its biggest City start to get involved and find a fix for this looming financial disaster. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Twelve Years of Litigation and Back to Square One—thoughts by James F. Egan, J.D. on New and Unprecedented IL WC Appellate Ruling.

Editor’s comment: The Illinois Appellate Court, Workers’ Compensation Division in a relatively rare situation involving claimed injuries stemming from a 1999 date of loss, ruled as two commissioners who found claimant was entitled to receive WC benefits did not agree as to a specific permanency award, a majority of the commissioners did not approve the PPD award, and the Commission's decision was therefore not final as it did not dispose of claimant's request for permanent disability benefits per Section 19(e). In absence of a final determination by the Commission, the Circuit Court lacked requisite subject-matter jurisdiction to enter an order confirming the Commission's decision.

We note Section 19(e) of the Workers' Compensation Act provides, in relevant part, that "a decision of the Commission shall be approved by a majority of a panel of 3 members of the Commission.” In University of Illinois Hospital v. Illinois Workers' Compensation Commission, 2012 IL App (1st) 113130WC (December 21, 2012)  Claimant presented evidence regarding her 10-year employment with University of IL Hospital and her condition of carpal tunnel syndrome. She also presented opinion evidence to support her claim that she was permanently and totally disabled under the supposed “odd-lot” category. We remind our readers the term “odd-lot” doesn’t appear in our Rules or Act.

The government employer presented evidence and indicating Claimant's injury and current condition of ill-being were caused by a systemic disease not related to her employment, Claimant was not permanently and totally disabled and was capable of performing the necessary functions of a clerical-assistant, a position that had been offered to Claimant in December 2005, but which she had rejected.

The Arbitrator found Claimant sustained a work-related injury which aggravated a pre-existing condition, and the current condition of ill-being in the claimant's wrists and hands was causally connected to the employment onset. The arbitrator determined Claimant was entitled to temporary total disability (TTD) benefits for 179 4/7 weeks from February 14, 2000, through July 29, 2003 and also found Claimant sustained a permanent partial disability (PPD) to the extent of 25% loss of use of the right hand and 22.5% loss of use of the left hand.

Both parties sought review of the Arbitrator's decision before the Commission. In a sense the IWCC panel proceeded to muddy the waters with their decision. The panel, with one Commissioner dissenting and one Commissioner concurring in part and dissenting in part, corrected and clarified certain portions of the Arbitrator's decision, but affirmed and adopted the Arbitrator's decision as to causation, TTD, and medical expenses. The Commission's decision also sought to award Claimant 90 1/7 weeks of PPD benefits, based, in part, on the determination Claimant was not permanently and totally disabled under the odd-lot category and, therefore, was not entitled to PTD benefits. However, only one Commissioner expressed the view Claimant was entitled to PPD benefits and was not entitled to PTD benefits under the odd-lot theory. A second Commissioner dissented in part concluding Claimant had proven she was permanently and totally disabled under the odd-lot category and was entitled to PTD benefits. The third Commissioner dissented from the entire decision determining Claimant had failed to prove that her injury and current condition of ill-being were causally related to her employment.

The Circuit Court of course did nothing at all to clarify the confusion and merely rubber-stamped the Commission decision, which then wound its way to the  Appellate Court.

Jurisdiction was not raised on appeal, however; the Appellate Court considered subject matter jurisdiction sua sponte and ultimately held, correctly we feel, that as the IWCC review record affirmatively demonstrated there was no approval by a majority of the 3-member panel of commissioners with regard to Claimant's entitlement to a permanent disability award and in the absence of a final determination by the Commission, the Circuit Court lacked the requisite subject-matter jurisdiction to entertain this matter and enter its order confirming the Commission's decision. Therefore the Circuit Court decision was vacated and the matter punted back to the Commission for a determination on permanency.

Clearly upon receipt of the Commission decision, the parties should have motioned the matter immediately to stay further appeal timelines and bring the matter back before the Commission panel for a majority decision. This article was researched and written by James F. Egan, J.D.,please feel free to contact him about it at jegan@keefe-law.com.

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Synopsis: Denial of Unemployment Benefits Affirmed Following HIPAA Misconduct by Health Care Worker; Analysis by Joseph B. Moore III, J.D.

Editor’s comment: In Pesoli v. The Department of Employment Security, 2012 IL App (1st) 111835 (December 19, 2012), Plaintiff Pesoli was denied unemployment benefits by the Illinois Department Employment Security (IDES) following her termination for misconduct after improperly accessing patient records. Appeals to the Compensation Board, Circuit Court, and finally the Appellate Court, all affirmed the denial of benefits. 

Plaintiff-Appellant Pesoli worked as a secretary in the radiology department at Advocate Lutheran General Hospital for more than a decade. She was terminated after accessing secure patient files on the hospital computer network. The IDES adjuster initially found her eligible for unemployment benefits. Advocate Hospital appealed, assert Pesoli was discharged for “misconduct,” and ineligible under the Illinois Unemployment Insurance Act. The appeal referee agreed with Advocate Hospital and Pesoli appealed but the Board affirmed denial of benefits. A further administrative review action was filed in the Circuit Court of Cook County, who again affirmed the Board's denial.

In the Illinois Appellate Court, Pesoli argued the facts in her favor were not properly introduced and her actions did not constitute “misconduct” under the Act. The Appellate Court disagreed with Pelosi and affirmed the denial of benefits was not contrary to the weight of the evidence. Furthermore, Pelosi failed to request testimony from her co-worker or any additional evidence regarding unauthorized access of records in violation of HIPAA. During her administrative hearing, these issues were procedurally defaulted and therefore waived. Pelosi also argued unsuccessfully hospital human resources testimony was hearsay and should not have been admitted. Lastly, Pesoli's termination for “misconduct” was found to be proper, meeting three basic elements: (a.) deliberate and willful violation (b.) of a reasonable rule (c.) causing harm to the employer. 

On its face, this Appellate opinion confirms an employee terminated for misconduct shall appropriately be denied benefits. However, the opinion touches on a few other key issues, especially for health care employers. 

First, the court rejects efforts to make new factual arguments at the Appellate level. A failure to make appropriate objections to factual issues at the administrative review level shall deem them “procedurally defaulted.” Hospital rules and procedures to comply with HIPAA, a federal health care law, were found to be reasonable. Lastly, while Plaintiff's actions did not specifically harm the patient whose records were accessed, the court held that breaking HIPAA laws could expose the hospital to potential lawsuits or loss of business. 

An employee may break rules or laws without causing “actual harm.” Keep in mind the “potential harm” demonstrated in this case. When evaluating the actions of a terminated employee, answer these questions. Was the violation deliberate or intentional? Was the employee properly trained and aware of the reasonable law, rule, or regulation? Did the violation expose the business to actual or potential harm? Employers should keep these issues in mind when dealing with instances of employee misconduct. 

This article was written by attorney Joseph B. Moore III, J.D. He is licensed and representing defense clients in both IL and IN. If you have thoughts and comments, please send a reply to jmoore@keefe-law.com or post them on our blog at www.keefe-law.com/blog.

12-17-12; PART 1: Did IL WC Litigation End on 12/6/12?; The Madison County Multi-Billion Tobacco Litigation Is Over; Be Prepared for Ramped-Up OSHA and much more

Synopsis: Did IL WC Litigation End on 12-6-12? Should We Send the Lawyers, Arbitrators and Commissioners Home and Start 24-Hour Coverage of Most IL WC Claims?

Editor’s comment: If you read our KCB&A Update last week, you read about the shocking and sweeping IL WC Appellate ruling in The Venture-Newberg Perini Stone and Webster v. Illinois Workers' Compensation Commission. We want our readers to understand we consider this ruling a seminal change, a veritable tsunami when it comes to defending WC claims in this nutty state moving forward and another reason you need to always get the best defense attorneys available.

Understanding What Just Hit Both Sides of the IL WC Industry

Well, the forces of ITLA have tried to take advantage of their political advantage to make our WC system more and more liberal. The problem with doing so is, at some magical point, you won’t have “litigation” anymore because there are even more limited WC disputes which can be fought and defenses become much more difficult. When everything is potentially globally compensable, you don’t need as many hearing officers or court reporters and only the best lawyers survive because more cases being flatly compensable mean less plaintiffs who need a lawyer. We feel the majority of Illinois workers now have arguable WC claims under the “traveling employee” doctrine as our State is implementing it.

This became clear to us and our readers after the controversial ruling above was issued on December 6, 2012--we are shortening the case name above to Venture-Newberg. We want our readers to understand the case contains what we feel is an aberrant workers’ comp focus/analysis unlike any in the entire world. If you understand the logic of this legal concept, Claimant Daugherty would have been covered for choking on a hot dog in a snack, for playing softball in a game with his buddies and for rolling off the bed in his sleep. Everything he did while “traveling” the entire time he was in Cordova, IL would have been covered. The majority opinion in Venture-Newberg holds two new game-changing legal concepts are present in the WC system in this state:

1. If a worker is scheduled/assigned work that isn’t on the “premises” of their employer, they magically become “traveling employees.”
2. An employer is fully responsible under workers’ compensation for any injury or disease suffered by the worker while they are on the way to or from and/or engaged in any activity most of their day that is “reasonable and foreseeable” to the employer.

While those two sentences don’t seem to be challenging, trust us, they are an unbelievable and massive change to WC benefits, insurance, self-insurance, underwriting and claims handling. If you aren’t sure, Claimant Daughtery in Venture-Newberg was not on the clock or soon to be on the clock—he was in a car crash but still miles away while going to work. Like all union workers, the jobsite wasn’t on the “premises” of their employer. Most union companies have relatively small offices and limited office staff. Yes, you may think that is how construction companies work—they build, maintain and erect construction on someone else’s land and “premises.” If you adhere to the legal standard in Sentence 1 above, all construction workers are now “traveling employees.”

How Many IL Workers Are Now Legally Transformed Into “Traveling Employees”—Short Answer, A LOT!

Several million Illinois workers don’t work on the “premises” of the employer, if you define “premises” as not being the job site, if that property is owned by someone else, as it was in Venture-Newberg. Our research indicates there are about 5.5 million people working in this state. By this new and unprecedented definition, we feel most of them are now going to be “traveling employees.” As we outline above, all construction workers are now in that status.

These workers magically become “traveling employees”:

v  Traveling Salespeople and Related Occupations                              595,820

v  Transportation and Material Moving Occupations                             439,130

v  Construction, Demolition and Extraction Occupations                      201,230

v  Installation, Maintenance, and Repair Occupations                           188,520

v  Building/Grounds Cleaning and Maintenance Occupations               185,200

v  Healthcare Support Occupations                                                       159,410

v  Protective Service Occupations                                                         141,550

v  Computer and Mathematical Occupations                                        128,460

That list above covers over 40% of the workers in our state. Lots of other workers will fall into an odd mix where some folks will be working on the premises of the employer and some folks won’t. For one simple example, most Hospital Emergency Room personnel seem to be working for the hospital that employs them—in fact, lots of them are under contract with a different company that leases them to the hospital. Many hospitals, university and schools also have food/culinary staff that appear to be employed by the hospital or school when in fact they are employed by an off-premises provider that does so. All such individuals are now “traveling employees.”

We also wonder about school teachers and related personnel who basically work on the “premises” of the school but occasionally take the children on school outings/field trips. Are they now globally “traveling employees” or only when on a trip? Do we really need expanded WC coverage for school teachers on their morning trip to work because they are later taking kids to a local museum?

Actually, probably several hundred thousand workers across our state work for and are paid by PEO’s, logistics and staffing companies. None of those workers work on the “premises” of their PEO/staffing/logistics employer who locates/hires and pays them. By the Venture-Newbergdefinition, all staffing employees are now “traveling employees.”

Further, the vast majority of government workers for the state, counties, townships and cities/villages don’t work in City Hall—they go out into the field and work to protect/maintain/inspect businesses/buildings/workplaces that clearly aren’t owned by the government body. For a simple example, firefighters don’t put out a lot of fires in government buildings, they are called to homes and commercial properties that aren’t government-owned properties. In our view, thousands of such IL government workers are now “traveling employees.”

Okay, So There Are A LOT of Traveling Employees in Our State—How Does That Affect WC Coverage?

Well folks, as you read this, Illinois employers are now globally responsible under IL WC for almost all illnesses and injuries of any nature from the moment such workers walk out the door of their homes to go to work until they are back home. Actually, workers who work in their homesare also “traveling employees” because they aren’t working at their employer’s premises, as this ruling mandates.

By “almost all” the limiting language is no longer “arising out of” and “in the course of” employ—please remember Claimant Daughtery in Venture-Newberg unquestionably wasn’t on the clock and wasn’t doing anything for his employer other than coming to work like millions of other workers. We aren’t aware of any state in the U.S., other than maybe Crazy California, where benefits would be payable to such a worker. To make this event compensable, the IL Appellate majority stuck the employer with Sentence 2 above—if the employee can attain “traveling employee” status, the employer is responsible for any behavior, incident or illness felt to be the result of “reasonable and foreseeable” activity.

What does that mean? Well, we feel it means Illinois employers are now responsible for literally anything that happens to a worker other than for the worker’s insane, criminal or psychotic behavior. Please note the person driving in Venture-Newberg appears to have been going too fast for conditions and the vehicle slid on ice, causing injuries to claimant. Obviously, the Appellate Court majority ruled it “reasonable and foreseeable” for someone to drive too fast for conditions, despite the fact that is arguably criminal behavior. Painting with a very broad brush, this major IL employer is now on the hook for over a million in medical bills, lost time and permanency.

Traditional IL WC Accident Defenses/Limitations are Gone With This Wind

Please note our view the IL Appellate Court has completely replaced the statutory requirement for “arising out of” and “in the course of” employ with this new “reasonable and foreseeable” standard for millions of workers. This new legal standard creates an indefensible situation where just about any and every activity can be work-related. In our view, all traditional accident defenses are gone. We provide this quick list of traditional defenses:

ü  Arising out of

ü  In the Course of

ü  Risk Common to the Public

ü  Idiopathic/Unexplained Falls

ü  Aggressor in a Fight

ü  Frolic and Detour

ü  Horseplay

ü  Intoxication

We feel they are all gone and swept under an Illinois WC rug. For example, “traveling employees” will still get WC benefits if they fall for no apparent reason—how can you say falling without any reason isn’t “reasonable and foreseeable.” As we advised last week, a traveling employee engaged in horseplay, like the firefighter wrestling in a hotel room received benefits, as his childish antics were “reasonable and foreseeable.” Claimant Daugherty could have fallen in the bathtub taking a shower on a weekend and such injuries would now be compensable.

Do you get it? Are you starting to see this theory is the Royal Straight Flush???? for the claimant bar and their clients? Well, they have to be careful what they wish for—if a claim is much more likely to be compensable, it is much more likely to simply be accepted so no plaintiff lawyer will ever be needed.

The Problem with Judicial Legislation Is It Isn’t Legislation

If you aren’t sure what judicial legislation might be, it is judges moving on a case-by-case path to create new rules, concepts and, in this case, benefits not outlined in the laws provided by to all of us by our legislature. Judges/Justices don’t hold legislative hearings or truly take comment from the groups affected. They don’t balance interests other than the interests of the parties litigating the claim. We assure our readers Venture-Newberg and its progeny Cox v. IWCC are random judicial legislation of the worst sort. We also point out the same Appellate Court justice wrote both majority opinions—in Venture-Newberg the majority opinion adhered to the “manifest weight of the evidence” standard to award benefits while in Cox they reversed the Commission’s denial as against the “manifest weight” of the evidence to award benefits. Does anyone see a trend there—basically, we feel the IL Appellate Court is effectively mandating the term “traveling employee” equals global WC benefits.

The traditional or historic workers’ comp concept of “traveling employee” is outlined in Professors Arthur and Lex Larsen’s compendium 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 expansion of WC coverage and limited defenses for workers traveling out of the country provides appropriate protection to most businesspeople who face extraordinary risk and the impact on insurance costs/premiums/underwriting are miniscule.

But to the extent the “traveling employee” concept has expanded from probably a couple of thousand workers who would travel abroad for work for major Illinois employers to millions of workers for businesses large and small who perform routine work within the boundaries of our state and face the same risks “common to the public” that we all face, you have to stop and consider what happened. Looking at our legislation, we assure you that you can look and look all day; you won’t find the term “traveling employee” outlined in the IL WC Act or Rules. There is no “source of law” or definition of the concept. In contrast, unlike Illinois, several states codified “traveling employee” and provide guidance.

For example, Florida Statutes, Title XXXI, Chapter 440 § 440.092 state

(4) TRAVELING EMPLOYEES—An employee who is required to travel in connection with his or her employment who suffers an injury in travel status shall be eligible for benefits under this chapter only if the injury arises out of and in the course of employment while he or she is actively engaged in the duties of employment. This subsection applies to travel necessarily incident to performance of the employee’s job responsibility but does not include travel to and from work as provided in subsection (2).

As Illinois doesn’t have such statutory language, in our state the “traveling employee” status/designation is as clear as mud—once an employee reaches “traveling employee” status, we have no way to know if they maintain it while traveling, while assigned to a single jobsite for a specific term or for their entire career with that employer? To be more precise, are all truck/bus/cab drivers “traveling employees” whenever they start out for any work or is it while they are “traveling” or in movement? Do we have to take claim after claim to the Appellate Court to get their piecemeal outline of coverage?

Further, what is the reason for this newly expanded WC coverage? Do we want cab drivers and construction workers to have additional protection and coverage for silly but “reasonable and foreseeable” things they might do away from work and on the way home? And if you compare Florida law cited above to the facts of the Venture-Newberg ruling our Courts could have ruled this event non-compensable in about six different ways. Does anyone feel this new, unnecessary and overbroad legal concept has an unconstitutionally vague definition?

We Need/Demand Clarity Or We Are Looking At The End Of Our System of Workers’ Comp Litigation In IL?

Right now, we feel ITLA and its forces are trying to quietly and slowly “spring” the traveling employee concept on the defense industry in selected claims. Basically, we feel they are using it as an “ace in the hole” to guarantee the toughest claims are winning hands for Plaintiffs/Petitioners. They are hoping everyone keeps it hush-hush and we assure our readers they don’t like to read articles like this one that let everyone know what is happening. The problem we have is our conviction this unparalleled concept isn’t good for anyone in the workers’ compensation system other than folks like the fellow in Venture-Newberg who unfortunately got seriously hurt while NOT working along with his lawyer who will get hundreds of thousands in unexpected attorney fees.

We consider this to be the sort of chicanery we are used to from the claimant bar in this state. If we are truly going to mystically make several million workers “traveling employees,” we feel IL WC insurance companies and more important, their underwriters have to know it. We truly feel the main way they may adapt is to start charging greatly increased premiums based on expanded and basically universal coverage of all such WC claims. Basically, we feel the IL WC insurance concept may soon be acutely expensive “24-hour WC coverage” for all such workers.

Under this new ITLA legal model, IL WC risk managers and adjusters aren’t going to let some claims go to either side because they can’t be defended on the issue of accident. They may start to treat many WC claims like group health claims—“you have a job and a problem, you are covered; fill out these forms and we may start paying.” Please also remember IL WC accident disputes sometimes come with hefty penalties and fees for not paying benefits—the next ironworker, trucker or school teacher who alleges an injury going to or coming from work or wrestling like a school kid in a bar between shifts might cause unforeseen penalties/fees if unsuspecting IL WC adjusters don’t rapidly accept/pay. While there are other legal issues in IL workers’ comp claims requiring solid defense attorneys, we don’t feel our IWCC and reviewing courts should greatly expand WC coverage and strip out accident defenses.

If/when that happens, there may be little need for lawyers, hearing officers or litigation because it will be a major challenge to defend “traveling employee” status and a bigger challenge to defend “reasonable and foreseeable” as a limiting factor. We also feel these increased WC insurance costs aren’t going to be well-received by major employers like Caterpillar, Nestlé, United Airlines and the rest. Greatly increased WC premiums may kill many small and mid-sized employers.

Where Is the Traveling Employee Concept At Right Now and Where Is It Going?

Well, we are asking our clients and readers to keep fighting and using KCB&A to lead this crucial fight. Please don’t move your worksites and employees out of Illinois just yet. Please let this situation advance and watch this space for developments. We are fairly sure the two dissenting Justices in this Venture-Newberg Appellate Court ruling may certify it for further appeal to the IL Supreme Court. If they certify it, we hope IL Supreme Court Chief Justice Thomas L. Kilbride and the other members of the Supreme Court accept and then hear the appeal. We assure our readers we will be asking everyone to consider joining us in writing an amicus curiae or “friend of the court” brief to let our highest Court know the challenge we will all face if this unprecedented situation “sticks” and WC benefits and coverage expand to become global coverage for accidents/illnesses both at and away from work for millions of IL workers.

On the legislative side, we know Senate President Cullerton and House Speaker Madigan have staff who read this KCB&A Update every week. Both of them wanted things to calm down and they both supported a “haircut” for all sides in lowering WC benefits with the 2011 Amendments to the IL WC Act. We can’t believe they want things in the WC arena to go wildly higher and they may take action to stop what is happening. We are certain they don’t want Illinois to become less business-friendly in this economy. It is possible they will get our message and consider legislation to rein in the courts and limit the whole “traveling employee” thing. We also hope IL State Chamber President Doug Whitley and his legislative team ask their other WC defense gurus to find out what just hit their membership. Their input and support in seeking legislative reform may also help. Finally, we hope the bipartisan IL Workers’ Compensation Lawyers Ass’n steps up and seeks to return things to the IL WC system we have had for over 100 years.

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