10-7-13; If You Need Ethics for Adjusters CEU's, Let Us Know!; Subcontractor Off the Hook on Defending General Contractor, Analysis by Chris St. Peter, J.D.; Stat...

Synopsis: Continuing Education Units—Does Your Claims Team Need Presentations on Ethics for Adjusters 2013-2014? Do You Want the Needed CEUs This Year??

Editor’s comment: We had a reader approach us at the recent smash presentation by Accelerated Rehabilitation Centers® about the need for adjusters to get CEUs, particularly on Ethics. In response to her suggestion, we have worked hard and developed Ethics for Adjusters 2013-2014. Our goal was to touch on all the ethical issues important for your claims staff. As you read this, we have sent a draft of the presentation to a number of clients and claims managers for their final review, comments and suggestions. Our goal is to provide an entertaining and informative presentation that will meet your CEU requirements.

Some of the topics we will cover include:

·         Defining Ethics for Claims Handlers;

·         Who’s On First--No Side Deals or Dealings;

·         Ethics in Handling Medicare Set-Aside Accounts;

·         Ethical Considerations in Dealing with Resignations;

·         How Do You Insure You Are Talking to an Attorney?;

·         What If a Lawyer Starts to Act Unlike a Lawyer?;

·         Understanding HIPAA in Handling Personal Injury/WC Claims;

·         Avoiding Conflicts of Interest;

·         Always Tell the Truth;

·         Be Clear and Open about Important Claims Decisions;

·         Don’t Leave Your Defense Attorney Dangling;

·         Be Crystal-Clear about Settlement Demands and Offers;

·         Keep Your Claims to Yourself, Account and Company;

·         Bad Faith Claims Handling;

·         You May Be Responsible for Vendors Acting in Bad Faith;

·         Attack Claims Fraud When You are Sure of It;

·         And more!!

We are happy to present these comprehensive and thoroughly researched materials in a lunch and learn at your offices. We can tailor the time involved to your needs. If you want that presentation communicated to claims staff across the country in a webinar, we are happy to assist to set that up. Our presentation team includes your editor, Shawn R. Biery, J.D., M.S.C.C. and John P. Campbell, Jr., J.D. who all teach Workers’ Compensation Law and Ethics at The John Marshall Law School in Chicago.

If you have interest in a presentation, please reply. Please feel free to post comments and thoughts on our award-winning blog.

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Synopsis: The Illinois Appellate Court rules a subcontractor’s liability carrier had no duty to defend the general contractor from a negligence claim brought by the subcontractor’s injured employee alleging the general contractor alone was directly negligent. Analysis by Chris St. Peter, J.D.

Editor’s comment: We feel the Illinois Appellate Court correctly applied the plain language of the policy to the facts alleged in the original underlying complaint—and not to additional facts in the general contractor’s third-party complaint—to hold there was no duty to defend where there were no allegations of vicarious liability. Any other result would allow a party seeking coverage to plead additional “self-serving” facts in a third-party complaint for the sole purpose of obtaining coverage.       

By way of background, in November 2009, R. A. Cullinan & Son, Inc. (“Cullinan”) became the general contractor of a construction project for the Illinois Department of Transportation in Peoria, Illinois. Cullinan entered into a subcontract agreement with Durdel & Sons Tree Service & Landscaping, Inc. (“Durdel”) to clear trees and logs at the work site. In June 2010, one of Durdel’s employees, Charles Hill, Jr., was injured when the equipment he was operating struck a live overhead power line.

In May 2011, Hill filed a two-count negligence complaint in Peoria County against Cullinan and another defendant alleging both defendants were directly negligent in supervising, maintaining, and/or providing warnings regarding the live overhead power lines near the work site. Of note, Hill’s complaint did not contain any allegations that his employer, Durdel, was negligent in any manner. In April 2012—nearly a year after the original complaint was filed—Cullinan filed a third-party complaint alleging Durdel was solely negligent for Hill’s injuries. Cullinan then contacted Durdel’s liability carrier, Pekin Insurance Company, Inc. (“Pekin”), claiming it had a duty to defend Cullinan as an additional insured under Durdel’s policy. Pekin refused to represent Cullinan, claiming Durdel’s policy did not cover Cullinan when the complaint alleged Cullinan was directly negligent for Hill’s injuries, and not vicariously liable for Durdel’s negligent actions. Pekin sought declaratory relief asking the court to find Pekin had no duty to defend Cullinan. However, the trial court ruled against Pekin and held it did, in fact, have a duty to defend Cullinan under the terms of the policy.

In Pekin Insurance Co. v. United Contractor Midwest, 2013 IL App (3d) 120803 (Sept. 18, 2013), the Illinois Appellate Court, Third District, reversed and remanded the trial court’s ruling. The Appellate Court first looked to the plain language of the insurance policy and noted it only provided coverage for vicarious liability proximately resulting from Durdel’s “ongoing operations performed for that Additional Insured during the Policy Period.” In interpreting this provision, the court noted the general rule that a person who employs an independent contractor is not vicariously liable for the acts or omissions of an independent contractor except under very specific circumstances where the general contractor retains control over the independent contractor’s work.

Next, the Appellate Court looked to the underlying allegations of Hill’s negligence complaint to determine whether it alleged sufficient facts that the injuries occurred during Durdel’s “ongoing operations performed for that Additional Insured during the Policy Period.” In doing so, the Court noted the complaint did not allege any facts identifying a negligent act performed by Durdel which resulted from the directives of the general contractor. Instead, the court noted the complaint alleged Cullinan, acting alone, negligently failed to supervise and warn Hill of the dangers posed by the live overhead power lines on the work site. Accordingly, the Court held that the failure to specify a negligent act committed by Durdel not only failed to trigger coverage to an additional insured in Durdel’s insurance policy, but also defeated a theory of vicarious liability.

Of note, the court further declined to consider Cullinan’s “potentially self-serving, third-party complaint” for allegations of Durdel’s negligence, as such a complaint filed after declaratory relief was sought could be used “to supply the missing allegations from the original complaint in an attempt to gain coverage as the additional insured under the policy.”

As noted above, we feel this is the correct result. The allegations of the original underlying complaint contained no facts that would trigger coverage as an additional insured under the theory of vicarious liability. Simply stated, if the insurance policy does not cover an additional insured’s direct negligence, then there is no duty to defend in an action alleging the additional insured was directly negligent. Moreover, an additional insured should not be able to plead additional “self-serving” facts as an end-around to obtain coverage.

This article was researched and written by general liability and employment practices liability law specialist Chris St. Peter, J.D. Contact him at cstpeter@keefe-law.com or (312) 756-3714 and ask him to review your insurance policies and other contracts.

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Synopsis: The Fun Bunch at NCCI Provide More WC Statistics Than You Can Shake a Stick At.

Editor’s comment: If you can’t sleep some night and want to do some in-depth analysis of how the IL WC system compares to the rest of the country, take a look at this excellent statistical treatise from NCCI that is online at: https://www.ncci.com/documents/SAF_IL.pdf

Titled Illinois State Advisory Forum and dated September 13, 2013, the report is lengthy, detailed and challenging to fully comprehend. We do note our solid and hard-working IWCC Chairman Michael Latz participated in creating and presenting this analysis. Illinois highlights are listed as:

·         Approved loss costs are 14% below their level prior to the 2011 IL Workers’ Compensation Reforms—we consider this very positive news;

·         Despite lagging economic recovery, increases in payrolls are contributing to workers’ compensation premium increases;

·         Our Combined Ratio is below 100% for the first time in more than a decade.

The report confirms when many businesspeople already know about our state—job losses in the past two recessions greatly exceeded the national average and show no signs of lessening. Further, the IL unemployment rate and lack of growth in recovery is well over the U.S. average—there is a pronounced and growing gap we feel is due to the miserable way our State and City of Chicago governments are run.

We were mildly aghast to see IL State Rep. Barbara Flynn Currie attacking long-time Illinois-based agri-processor Archer Daniels Midland for seeking tax incentives from State government—she specifically characterized it as “blackmail” in a fashion we consider ludicrous. Obviously, she could just stand opposed and avoid the hysterical attack on this major IL employer. We are certain how elated other states and cities might be to have ADM move their HQ there. As the vast majority of IL taxes are now going to fund and pay what some people call “government pensions” for folks that no longer work for our state, certainly State government can’t lose any tax dollars to keep major businesses here or have them expand their operations in our state. One has to wonder how long our government unions can continue to block “pension” reform in Springfield and whether that might occur before the hollow house of cards falls into the same dark hole in which the City of Detroit’s pensions are currently sitting.

The NCCI report also provides clear documentation of the industries in IL that continue to struggle. Construction employment is down over 30%--this may be exacerbated by the silly new court-created “traveling employee” rule that extends WC coverage of non-work-related accidents/illnesses to all construction workers in our state. Manufacturing jobs are also down more than 13%. We were mildly surprised to see jobs in the information industry demonstrate a 13.7% loss, as it seems that job sector continues to grow. Trade/Transportation and Utility jobs showed an almost 5% loss—again this sector is certain to continue to show more job losses as the “traveling employee” concept takes hold.

Other statistical metrics of note include:

      Illinois lost time claim frequency is down 35.2% for the period from 1997-2011 (we feel this is one of the main reason overall WC claims are down);

      Average claim frequency in IL is down and remains under the level of our sister states;

      IL Permanent Partial Claim Frequency is higher than all of our bordering states and close to double the national average;
Indemnity benefits in IL are dramatically higher than medical benefits—we pay so much for PPD and lost time compared to other states and the national average;

      Indemnity severity in IL has noticeably declined since 2008.

All of it continues to change and morph as we move into the rest of this decade. We are sure most of the current IL Arbitrators/Commissioners are greatly improved and are doing their best to keep Illinois in line with other states.

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

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Synopsis: Chairman Latz and the IWCC announce the 2014 Arbitration Assignments.

Editor’s comment: Whoever the Arbitrator might be that is currently handling your downstate claims right now is almost certainly going to change. Most business observers feel the changes are relatively reasonable—please remember you can’t pick 30 Arbitrators that I might like and I can’t pick 30 Arbitrators that you might like—we are all human and the nature of litigation is resolving differences fairly and amicably. We again assert the IL WC Arbitrators are dramatically honest, generally fair and professional. They are much more sensitive to WC fraud by claimants than in years past. We encourage all business representatives to attend pretrials and hearings and meet our hearing officers to insure you are getting solid value from our state WC administration that you pay for.

2014 IL WC Arbitration assignments announced

Effective January 1, 2014, these IL WC Arbitrators will have the following assignments:

Zone 1:   Collinsville, Herrin, Mt Vernon: 

Lee, Lindsay, Zanotti

Zone 2:   Springfield, Quincy, Urbana: 

Dearing, Gallagher, Pulia

Zone 3:   Bloomington, Peoria, Rock Island: 

Erbacci, Holland, McCarthy

Zone 4:   Geneva, New Lenox, Ottawa:  

Granada, Mathis, O'Malley

Zone 5:   Rockford, Waukegan, Woodstock:  

Andros, Falcioni, Fratianni

Zone 6:  Chicago, Wheaton:  

Cronin, Doherty, Luskin

Zone 7:  Chicago:  

Black, Carlson, Dollison, Flores, Huebsch, Kane, Kelmanson, Mason, Simpson, Steffen, Thompson-Smith, Williams

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

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Synopsis: Dr. Steven Delheimer, rest in peace

Editor’s comment: Dr. Steven C. Delheimer, MD, 64, of Peru died last week in his home. He was a longtime participant in the IL WC system and testified in numerous hearings and reported decisions. He was a positive and healing force in many people’s lives.

Dr. Delheimer was born in Streator, IL. He earned his undergraduate degree from the University of Illinois at Urbana-Champaign and earned his doctorate in medicine from the University of Illinois Rockford School of Medicine. He completed a surgical internship at Dartmouth College in New Hampshire and a neurosurgical residency at Mayo Clinic in Rochester, Minn. After finishing his studies, he was a practicing neurosurgeon in Rockford for several years then in La Salle-Peru and Bloomington. In lieu of flowers, memorials may be directed to the charity of the donor’s choice or the family of Steven C. Delheimer. Online condolences may be directed to the family at duffyfuneralhome.com.
 

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9-30-13; Should IL Employers Manage "Travelers" Away From Work?; New IL WC Rule for Company Vehicles; Two or More Accidents = Two or More Awards, Analysis by Tim O'Gorman and much more

Synopsis: If Illinois Employers Are Responsible under WC for "Traveling Employees," Can/Should They Supervise Them During Non-Work-Related Travel? How Much Do You Feel The Wildly Expanded WC Coverage Will Cost Us???

Editor's comment: As we have advised the IL WC System has newly expanded WC coverage for millions of workers who can be called "traveling employees" to cover risks, injuries and illnesses on the way to and from work and during breaks. We again emphasize a "traveling employee" doesn't have to be "traveling" to get WC coverage. Non-work-related injuries have unquestionably been swept into Illinois’ very generous workers comp and occupational disease coverage. This is going to cost Illinois employers billions once it becomes widely known and workers start to sign up and make claims for this new coverage. No state or country provides such expanded WC coverage for some of the reasons we outline below.

Allowing Motorcycle Use To and From Work for Traveling Employees Now Expands WC Risk/Costs

So here is another test question and fact situation--we have a short-haul truck driver who would qualify for "traveling employee" status, as an essential element of his work is traveling. There is an IL Appellate Court ruling that specifically finds such workers to be TE's or traveling employees. If you aren't sure, such workers are now covered when they leave their homes until they return. If he carelessly spills hot coffee on himself on the way to work at a Wendy's®, the employer would owe for medical care, lost time and any disfigurement or disability that might ensue.

Our concern is the driver mentioned above has an aching back. He is claiming it is due to driving in our trucks. This is what we characterize as a "repetitive working" claim. To defend such claims, we point out the truck seats are truly state of the art--they cost about $15,000 per seat to insure they are the most ergonomic and spine-friendly seats in the world. Our bio-engineers confirm you can't get a bad back or sore spine riding in such seats. Illinois Arbitrators will carefully weigh such evidence in hearings and make a solid call on whether the condition is or is not related to work.

What our truck driver also drives when he isn't in our super-truck-seat at work is his personal motorcycle. Everyone at the truck dock knows he drives a full-dress Harley® to and from work every day. Our expert physician indicates such a worker, at his age and girth, is almost certainly going to have spinal dysfunction from vibration, twisting and bouncing around on a motorcycle riding an hour to and from work every day. Motorcycles may be the least spine friendly means of personal transportation. Motorcycles are also one of the most dangerous conveyances on the planet; thousands of such drivers are injured and killed in statistical comparison to folks that drive cars and trucks.

As we told you in the first several paragraphs at the top of this article, it would appear the employer is now responsible for any problems or accidents this truck driver has riding his motorcycle while going to and from work. We don't see any current method to defend such a claim based on the four "traveling employee" Appellate Court rulings applicable to such facts. You don't and will never again need an Arbitrator or lawyers on either side to deal with such a claim--the money is owed for all WC benefits, as a matter of law, according to our Courts.

We Don’t Feel There is Much to Litigate about the “Foreseeability” of Accidents, as Foreseeability Is In the Eye of the Beholder

The radical lawyers at ITLA who we feel may be behind this new and unprecedented legal expansion of the “traveling employee” concept are suggesting lawyers on both sides and Arbitrators will be able to litigate “foreseeability” of an accident. The IL Appellate Court, WC Division identifies this as a source of needed litigation in the most recent ruling in Admiral Mechanical v. IWCC where they write:

We further disagree with respondent’s overstated fear that the traveling-employee doctrine threatens to turn the Act into a strict-liability statute. The burden remains with the employee to prove causation (Hoffman, 109 Ill. 2d at 199), and the employee fulfills this burden by showing that the conduct he or she was engaged in at the time of the accident was reasonable and foreseeable. Respondent’s protestations to the contrary notwithstanding, this standard has provided employers with viable defenses in various situations. See, e.g., Jensen, 305 Ill. App. 3d at 280-81 (holding that manner in which the claimant used an ATV was not reasonable or foreseeable); Howell Tractor & Equipment Co. v. Industrial Comm’n, 78 Ill. 2d 567, 575-76 (1980) (holding that an employee’s “late-night excursion through an unfamiliar and potentially hazardous area” of a town was not reasonable or foreseeable.”); U.S. Industries, Production Machine Division, 40 Ill. 2d at 475 (“Claimant's action in undertaking a midnight pleasure drive in unfamiliar, mountainous terrain was, in our judgment, a clearly unanticipated, unforeseeable and unreasonable activity not normally to be expected of a traveling employee.”).

In our view, all of the cases mentioned could just as easily been determined to be foreseeable as not foreseeable—it was clearly up to the whim of the courts in making that determination. The reason we say it is clearly up to the notion or caprice of the finder of fact is there is no defined legal standard for “foreseeability” of an unexpected occurrence. Most accidents are to some extent the result of bad judgment or error by someone—how “bad” does bad judgment have to be to reach the magical level of being “unforeseeable?” In stark contrast, lots of accidents, like the one involved in Venture-Newberg-Perini didn’t involve any failure or error on the part of the injured worker—in that claim, his co-worker was driving the vehicle, slid on ice and hit a bridge, causing injuries to the claimant. Nothing about that claim by a passenger in a motor vehicle has anything to do with “foreseeability” and from the perspective of the IL WC Appellate Court’s ruling, foreseeability was clearly a “given” and could not have been viewed as a defense. Please also note Mlynarczyk, Kertis and Admiral Mechanical, the other new and controversial “traveling employee” Appellate rulings were completely indefensible, as all the accidents and injuries were locks on the issue of “foreseeability.”

4,609 Americans died on the job in 2011. About 40 percent of work-related fatalities were roadway incidents involving motor vehicles. Smaller numbers of work-related fatalities involved slips, trips, and falls, workers struck by objects and equipment and workplace violence which included 458 homicides. Illinois has now expanded coverage for fatalities to non-work-related risk for TE’s. We ask the rhetorical question—what is there to litigate about the “foreseeability” of a motor vehicle accident going to and coming from work? What is there to litigate about the “foreseeability” of an unexplained slip/trip, fall-down or homicide making the trek to or from your job? Isn’t all human error, poor judgment and/or bad luck arguably “foreseeable?” Illinois used to provide workers’ comp benefits with concerns to litigate what is an "accident" have been swept away by these unprecedented, judicially created and Illinois-only rulings and ill-defined legal standards.

Please understand in the IL WC setting if the truck driver mentioned above with a personal Harley-Davidson needs a spinal fusion and later can't drive a truck due to non-work-related motorcycle vibration, jostling and bouncing, the reserves for such a claim could be well over $1 million for the surgery, post-surgical care, TTD and the expected wage loss differential claim. Our client, his employer will owe such benefits "as a matter of law" under current rulings—in our view, the IL Appellate Court has stripped out all defenses for TE's. What they haven't addressed is how Illinois employers can possibly control these shocking new exposures and costs.

The risk management question we ask our readers is simple--if we owe for his pain and problems due to motorcycle riding, can we order him to stop riding his hog to and from work? Should we start vehicular safety training to address safety while traveling? Can/should Illinois employers inspect and approve all conveyances that bring traveling employees to and from work? If there are lots of injuries and accidents, are they OSHA-recordable? Will OSHA start to supervise safety protocols in this setting? Going further, can we order such workers not to make personal or recreational stops for any reason on the way to and from work? Can we ask them to sign forms/releases confirming if they do make such stops, they will be sanctioned leading to termination?

What Do You Think This Expansion of the Traveling Employee Concept Will Cost? Please Give Us Your Thoughts.

The total cost of workers’ compensation insurance to U.S. employers is more than $95 billion annually. We estimate the IL WC Commission handles about $3-5 billion in WC benefits each year. According to the U.S. Bureau of Labor Statistics, 3 million nonfatal workplace accidents occurred in the United States in 2012. Most of these cases, almost 95 percent, involved occupational injuries while workplace illnesses accounted for the other five percent. Try to imagine our IL WC system adding the cost of non-work-related injuries/illnesses going to-from work and during lunch/coffee breaks.

Right now in the IL WC system, we are certain all construction workers, staffing and transportation workers are TE’s; the IL Courts have clearly defined them as such. Similarly, most all government workers are TE’s. We don’t know how to “cost out” what this new WC coverage will cost our clients and readers.

Right now, our law partners are debating what the new “traveling employee” expansion is going to cost you. Some of us feel it will be a complete monetary disaster for all industries affected by these rulings. In contrast, one of our law partners feels it may be only a 5% bump. It is the consensus of most of the defense attorneys in our firm the biggest catastrophe about the newly expanded concept is going to be in government. Other than the few people who only work at a single desk in a given City/County Hall, basically all other government employees are now “travelers.” For example, police/firemen/EMTs all “travel” as an essential part of their work. All building/electrical/plumbing inspectors and streets workers “travel.” We think the WC costs for IL counties, townships and municipalities can be expected to at least double.

We are asking our readers—what do you think? What is this going to mean for your organization to have to include non-work-related injuries with work injuries? We appreciate your thoughts and comments. Please feel free to post them on our award-winning blog.

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Synopsis: IL Employers Now Have to Revisit Company Vehicle Provision/Maintenance/Use.

Editor’s comment: We want our readers to also understand a related and new IL WC coverage expansion--if you allow workers to use company vehicles when off work, two Appellate Court rulings confirm you are now a guarantor under IL WC of their health and safety for all activities they do with the vehicle during, after and before work. We aren’t making this up, folks.

If you let them use the company or government vehicle for personal, off-work use, we assure you that you now owe

·         IL WC benefits if they are injured driving their children to a ball game;

·         If they are injured at a grocery store buying groceries and get hit in the parking lot;

·         For all risks, injuries and illnesses using company vehicles on weekends and holidays.

Our further suggestion is to consider requiring/ordering workers to limit personal use for trips going to and coming from work. You might want them to use the work vehicle only to go to and from work sites. Try to insure they have alternate personal vehicles so they aren't using your car or truck on weekends and holidays. Make sure company vehicles are kept in safe condition and regularly inspected.

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

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Synopsis: Illinois Appellate Court rules a change in pathology or nature of an injury constitutes an intervening accident, unless you’re talking about an award for permanency. Analysis by Timothy J. O’Gorman, J.D.

Editor’s Comment: Petitioner in National Freight Industries v. Illinois Workers’ Compensation Comm’n suffered two injuries involving his low back while working for two separate employers. The first occurred in 2006 while pulling boxes of freight off a truck, Petitioner experienced a “pop” in his low back and felt sharp pain radiating into his right leg. Petitioner was working at Fischer Lumber at the time of his first injury. Petitioner continued to treat for this injury and went back to work for National Freight in 2007. While working as a driver for National Freight, the second Respondent, Petitioner was involved in a motor vehicle accident in 2008.

At hearing, the Arbitrator found Petitioner’s 2008 incident proved to be an intervening and superseding event at which point Fischer Lumber’s liability was cut off. The Commission affirmed the decision of the Arbitrator seemingly placing the bill at the feet of whichever employer a Petitioner works for last in regard to TTD/medical benefits. The IWCC also affirmed the decision that since no MMI date had been established on the first accident, permanency could not be determined regarding the first injury. According to the Commission, National Freight Industries would have to pay the full brunt of Petitioner’s remaining benefits for both indemnity and medical.

Petitioner appealed and the case was affirmed by the Madison County Circuit Court which resulted in three consistent opinions. Petitioner appealed to the Illinois Appellate Court, Workers’ Compensation Division—their ruling went contrary to all three lower court decisions and overturned the decision of the Commission on the issue of permanency. The Appellate Court found Petitioner was able to maintain his claim to permanency against both Respondents National Freight & Fischer Lumber whereas the three previous decisions only allowed for a permanency determination against National Freight.

The reason the three previous panels disallowed a permanency determination against Fischer Lumber is because Petitioner was not yet at MMI at the time of what we feel should have been intervening and superseding accident. Typically, no one can make a determination of how permanent a condition will affect someone’s ability or disability until a doctor finishes treatment and declares Petitioner as good as they are going to get. After that, the parties and the judge/Commissioners can make a determination as to how the injury will affect their life. Until that point, no one knows how much or little a person will improve with more treatment.

The decision of the Appellate Court now creates a scenario where an interim permanency determination will be left to what we feel is speculation which, by definition, is typically not allowed to be taken into account. Our penultimate reviewing court apparently will not allow the concept of “intervening and superseding” event to apply in our state—it is almost as if two or more injuries to the same body part have to mystically result in two or more permanency awards, as a matter of law.

IL Employees and employers may now have to fight over how disabled someone “could have been” at the end of treatment for an initial accident without any medical evidence pointing one way or the other. The IL Appellate Court has changed the way employers will now have to view an employee’s course of treatment and the goal to bring Petitioner’s back to MMI is more important than ever.

If any of our readers have questions regarding this or any workers’ compensation matter, please feel free to call Tim O’Gorman at (312)-756-3724 or email him at togorman@keefe-law.com.

9-23-13; Chiro Sues Over Unpaid Bills and Civil Court Works Out WC Issue, analysis by Shawn Biery, J.D.; "Traveling Employee" Orals in IL Supreme Court; Supposedly Sick Lawyer Faces ARDC Beef and more

Synopsis: The Illinois Appellate Court on the Civil Side Now Handling WC Issues—Sort Of. Analysis by Shawn R. Biery, J.D., M.S.C.C.

Editor’s comment: In this ruling, the IL Appellate Court weighed in on IL WC Fee Schedule payments in a ruling which should discourage balance billing and may encourage more detail in settlement documents. Attorneys on the other side of the bar should know and understand this important ruling that might lead to malpractice claims or ARDC complaints if they don’t fully explain such issues to their clients.

In Tiburzi Chiropractic v. Kline, 2013 IL App (4th) 121113 (September 16, 2013) which was appealed from the Circuit Court of Macoupin Co. (decision found on the web at (http://www.state.il.us/court/Opinions/AppellateCourt/2013/4thDistrict/4121113.pdf), Plaintiff Tiburzi Chiropractic filed a small-claims complaint against Defendant David Kline to collect the balance of chiro fees charged following the performance of chiropractic services which were alleged as WC. In November 2012, the Circuit Court found in favor of Plaintiff and ordered Defendant to pay $2,155 with that award being the subject of this appeal. Defendant argued the trial court erred in entering a money judgment in favor of Plaintiff. The Appellate Court modified and affirmed an award for a lower value.

Briefly as background, in October 2008, Defendant Kline alleged an injury working for third-party defendant, Rovey Seed Company, Inc and filed a workers' compensation claim with a portion of his claim alleging treatment sought and received from Plaintiff's chiro office in Carlinville was related. In August 2010, Kline and Rovey Seed entered into a settlement contract whereby Rovey Seed agreed to satisfy, pursuant to the IL WC fee schedule, all medical bills for medically causally related treatment received on or before June 10, 2010. Obviously, some chiro billing went unpaid.

In March 2011, Plaintiff Tiburzi filed a small-claims complaint against their patient Kline, alleging Kline owed $2,336.60 for an overdue account related to those chiro services. In May 2012, Kline filed a petition and application under Section 19(g) of the Workers' Compensation Act (Act) (820 ILCS 305/19(g) (West 2010)) for judgment on a workers' compensation award. Defendant attached a certified copy of the final award to the petition. Kline also demanded Rovey Seed pay all such bills pursuant to the fee schedule and Rovey Seed claimed it made full payment. In July 2012, the trial court entered an order on Kline’s section 19(g) petition and found Rovey Seed had made full payment pursuant to the terms of the settlement contract, including payment pursuant to the fee schedule and section 8 of the Act. The court held Kline and Rovey Seed had met all of their obligations under the IL WC Act. The court denied Kline’s demand for additional payment, costs, fees, and interest because of the payments. It was noted after the 19(g) filing, Rovey Seed conducted utilization review and paid a portion of the Tiburzi chiro bill according to the IL WC fee schedule.

One apparent twist in this case is that Tiburzi testified, when Kline came to his first visit, he doubted any prospective treatment by him for Kline would qualify for payment under the IL WC Act, because he was the third physician—he knew such care might be owed by the patient, consistent with Section 8(a-3) of the IL WC Act. Tiburzi testified Kline requested a specific type of treatment and Kline advised Tiburzi his attorney affirmatively advised he would be paid for the treatment under the IL WC Act. Tiburzi advised Kline he would accept him as a patient; however, he would be personally required to pay the cost for treatment in full even if not covered by the workers' compensation insurance carrier. Tiburzi testified the parties reached an oral agreement to that effect and Kline signed an agreement consistent with the parties' oral statement guaranteeing payment in full as a private pay patient. Tiburzi testified on several occasions he submitted his bill, in the amount of $3,000.00, to the employer's workers' compensation insurance company and their WC carrier, according to Tiburzi, paid $663.40 and he applied that amount to the bill.

In the proceeding before the IL Appellate Court, Kline argued the trial court erred in entering a money judgment in favor of Tiburzi for treatment rendered under and paid pursuant to the IL WC Act based on the private-pay agreement. Kline argued Section 8(a) of the Act (820 ILCS 305/8(a) (West 2006)), entitled recovery of reasonable medical expenses, the incurrence of which are causally related to an accident arising out of and in the scope of employment and which were necessary to diagnose, relieve, or cure the effects of the claimant's injury. They also noted medical expenses are governed by section 8(a) of the Act (820 ILCS 305/8(a) (West 2010)), which states, in part, as follows:

The employer shall provide and pay the negotiated rate, if applicable, or the lesser of the health care provider's actual charges or according to a fee schedule, subject to Section 8.2, in effect at the time the service was rendered for all the necessary first aid, medical and surgical services, and all necessary medical, surgical and hospital services thereafter incurred, limited, however, to that which is reasonably required to cure or relieve from the effects of the accidental injury.

Kline further noted pursuant to the Act, the employer must adjust the medical bills to conform to the IL WC fee schedule found in Section 8.2. 820 ILCS 305/8.2 (West 2010) and “Except as provided under subsections (e-5), (e-10), (e-15), and (e-20), a provider shall not bill or otherwise attempt to recover from the employee the difference between the provider's charge and the amount paid by the employer or the insurer on a compensable injury." 820 ILCS 305/8.2(e) (West 2010). This is the “balance billing” proscription in our law.

Tiburzi relied on the exception in subsection (e-20) (820ILCS 305/8.2(e-20) (West 2010)), which states as follows:

Upon a final award or judgment by an Arbitrator or the Commission, or a settlement agreed to by the employer and the employee, a provider may resume any and all efforts to collect payment from the employee for the services rendered to the employee and the employee shall be responsible for payment of any outstanding bills for a procedure, treatment, or service rendered by a provider as well as the interest awarded under subsection (d) of this Section. In the case of a procedure, treatment, or service deemed compensable, the provider shall not require a payment rate, excluding the interest provisions under subsection (d), greater than the lesser of the actual charge or the payment level set by the Commission in the fee schedule established in this Section. Payment for services deemed not covered or not compensable under this Act is the responsibility of the employee unless a provider and employee have agreed otherwise in writing. Services not covered or not compensable under this Act are not subject to the fee schedule in this Section.

The IL Appellate Court agreed any compensable services under the Act were not recoverable and noted contrary to Tiburzi's argument, it did not truly treat Defendant as a private-pay patient and did submit billing to Kline's workers' compensation insurance carrier. Since evidence reflected that except for 20 cold packs ($10 each), the chiropractic services were deemed compensable by the insurer and were paid at the fee-schedule rate, Tiburzi was not entitled to the balance due for the compensable care. However since the workers' compensation insurer paid nothing for the 20 cold packs, each billed in the amount of $10. Tiburzi was therefore entitled to judgment in the amount of $200, plus costs for a total of $345. Legal fees for both sides through the two-levels of the judiciary had to be exponentially higher.

Arguably the biggest take-away from this case for both sides of the bar is payment under the IL WC Fee Schedule should end any responsibility for balance bill payments and as the Petitioner bar is likely to receive the initial balance bills in most claims, we suggest a letter citing this ruling to confirm the Appellate Court will not award balance bills over the IL WC Medical Fee Schedule. From the medical provider standpoint, they would have been better positioned by billing Petitioner directly once they formed the opinion the treatment may not be compensable under WC.

We also feel it important for Petitioner’s attorneys to discuss “private pay” agreements with their clients and insure the client is fully advised of the pertinent issues. Failure to anticipate such problems may lead to protracted litigation, hurt feelings and judgments such as the one in this claim. It might all have been avoided by full discussion of the matters raised in this ruling.

For our defense side readers, as we recommend almost every day, it is best to have the terms of any contract as detailed as possible and while those in the electronic bill review community don’t believe that it takes more than a modest amount of time to draft a settlement agreement, the strong and detailed agreement initially is the true way to avoid litigation costs after the fact. As always, if you have any questions about successful resolution of your claims, you can contact our office. This article was researched and written by Shawn R. Biery, J.D., M.S.C.C. and you can reach him atsbiery@keefe-law.com.

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Synopsis: It Appears IL Supreme Court Oral Arguments in Venture-Newberg-Perini Went Well.

Editor’s comment: If you haven’t been paying attention, the “traveling employee” concept is probably the most controversial expansion of WC coverage in any WC system on the planet. Only in the People’s Republic of Illinois could someone think this is a good idea—almost all of the concepts are court-created because the many legal terms such as “traveling employee” aren’t in the IL WC Act. Please understand the worker does NOT have to be traveling or in transit to be entitled to WC benefits—all they have to do is have “traveling employee” status. What it means to your IL WC claims is:

“Traveling employees” are defined by the court as any worker who

·         Doesn’t work on the “premises of their employer”—no one has any current idea what the “premises of the employer” might be;

·         Works on the premises of their employer but goes to two or more locations as a part of their work;

·         Is involved in “traveling” as an essential part of their work.

If a worker can establish “traveling employee” status, they are covered either 24-7 while continuously living in the area around a work site, which is how the IL Appellate Court, WC Division ruled for Claimant in Venture-Newberg-Perini or from the moment they leave their home until the moment they return home. The upshot of this unbelievable expansion of IL WC coverage is millions of workers are now covered while going to and coming from work and on any break for any non-work-related auto accident, slip-fall or any illness or malady that might befall them. It will also be much harder to defend “repetitive working” claims for such workers because their non-work-related activities magically become work-related. We feel “at-home” workers are covered basically all day and all night for any risk. Please also note if you give an employee a company vehicle to drive, you will owe full WC benefits for any injury whether they are working or not.

Last week, the first of about five “traveling employee” rulings made it to orals before our highest court. The orals can be viewed or listened to online by clicking on the links at the right side of this box:

09/18/13

115728

The Venture-Newberg Perini Stone and Webster v. Illinois Workers' Compensation Commission

Ted Powers, J.D. is handling the appeal and orally argued the matter is a solid and experienced attorney with the Rusin, Maciorowski & Friedman firm. These are his unedited comments:

Overall, I believe the Arguments went well. The justices focused on the employers' premises issue and travelling employee exception as opposed to the "exigency exception". Opposing counsel focused on the demands of the employment, the job hours and need to be available for emergencies. This would create an expanded "exigency exception" where the mode or course of travel no longer plays a role. Instead, the demands of the job itself for employees living remote from the job site would determine if the travel is part of the service.  I do not believe an extension of this type is viable under the existing exception - it would drastically change the purpose for the exception. An employee could now argue that travel to a remote location required he be close to the job site to meet the exception, regardless of any direction or control of the employer over the travel. It further ignores that an employee's decision to seek a job remote from his residence is a purely personal choice. I doubt the Supreme Court wants to carve out a new or expanded exception. It is now a question of votes. I am optimistic that we will get the votes of the Republican justices based on their focus.  I also sensed that at least one other justice appeared to question how clamant could be construed as a travelling employee based on facts re the job and fixed job site. Of course, the process is unpredictable; but I am hopeful we will prevail based on the facts and the law.

Our associate Timothy J. O’Gorman, J.D. attended the oral arguments and he felt our Supreme Court Justices seemed more conflicted in relation to Petitioner’s counsel’s legal position than Ted Powers for Respondent. The Justices asked several very pertinent and common-sense questions regarding the expansion of the “traveling employee” doctrine to include an employee who voluntarily moves to take a job away from his home. The Justices asked Petitioner’s counsel to explain why someone would be considered a “traveling employee” if they only report to work at one job site, travel only to and from that one job site and did not have to take the job away from his hometown. Counsel for Petitioner argued his point citing the employer’s need for labor outside of the local union hall and that the “exigencies and duties” of his job required he relocate to lodging closer to his work. Petitioner’s counsel cited the employer’s need for employees capable of working long hours and reporting to work at short notice.

The IL Supreme Court has now taken the case under advisement and we expect a ruling within two to four months. We strongly hope the Court takes a common sense approach to the issues at hand and comes to a decision that does not render millions of IL workers “traveling employees” to be covered for all risks from the moment they wake up in the morning until the moment they go to bed.

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

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Synopsis: Ooops, Attorneys Can’t Fake Illnesses, Skip Orals and Get Away with It—ARDC is Watching. Will This New-Found Vigilance Apply at the IWCC?

Editor’s comment: An Illinois lawyer is accused in an ethics complaint of faking illness to avoid oral arguments before the federal 7th U.S. Circuit Court of Appeals. We don’t think that is a strong idea. The Aug. 29 complaint by the Illinois Registration and Disciplinary Commission alleges Attorney Michael Joseph Finn told a federal court clerk on the day of oral arguments that he vomited that morning and was too ill to come to court. In contrast to that claim, the three-count ARDC complaint alleges attorney Finn didn’t need medical care and didn’t get any.

“He did not vomit and he was well enough to go to court,” the ARDC complaint alleges. “Respondent did not go to court because he felt unprepared.” The complaint does not outline the facts that lead to the conclusion. It does say Attorney Finn paid an appellate brief writer $5,000 to prepare drafts of appeals briefs on behalf of his client. Finn charged $15,000 in legal fees to handle the matter.

According to the complaint, the federal clerk’s office called him and told Finn to keep his phone nearby in case his appearance was required, but Finn did not answer or return phone messages. The 7th Circuit panel conducted oral arguments without Finn and, not surprisingly, Finn’s client lost the appeal. In an order to show cause, the federal Appeals Court said Finn should supply medical documentation of asserted illness, such as a certificate showing his admission to a hospital emergency room. Finn supplied no documentation and the court fined him $1,000 in its Sept. 15, 2011 opinion, the complaint says.

The 7th Circuit opinion did not say anything about Finn's report of illness, however. Instead, the opinion said he "has failed to offer any explanation—or even drop a hint—as to why he abandoned Clark at that critical moment."

Finn offered this explanation after the ARDC opened its investigation:

On the evening of April 13, 2011, I went to bed with a headache and with a queasy feeling in my stomach. During the night, I had cold sweats and had difficulty sleeping. On the morning of April 14, 2011, I got out of bed sometime around 5 a.m. I went to the bathroom and vomited. I went back to bed and got up again around 8:30 a.m. Although I felt much better at this time, I thought I was not well enough to go to court. After going back and forth about it, I decided to stay home. … I simply was ill on a critical day of court for my client. In retrospect, I believe I was medically able to participate in oral arguments, but it was a close call and at the time I thought that I was too ill.

Finn also said in a sworn statement that he didn’t take phone calls because he was in bed. From our perspective, it doesn’t appear this attorney felt he would be facing the notoriety that has followed his absence from oral argument in federal court.

Typically, when they write their rulings, the IWCC doesn’t mention if the attorneys are present or absent at oral arguments. We aren’t sure if this new requirement for needed illness documentation might not apply in workers’ compensation orals before the IWCC. We will have to watch and see if the trend expands. We appreciate your thoughts and comments.

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Synopsis: How to Best Certify/Authorize Medical Care and Avoid Litigation in an IL WC Claim.

Editor’s comment: Last week we reported there are a group of clinics/doctors who are suing lots of employers and carriers, claiming when you “authorize WC medical care” you implicitly accept whatever their pricing might be without any deductions. In response, we have an awesome IL WC adjuster who is among our readership. She advised she puts all treatment and surgery authorizations in writing & these 4 things are in every letter: 

Item #1: 
Please be advised prescriptions cannot be dispensed from the physician’s office. Bills received for this service will be denied. Please issue a written prescription to the employee for any medication prescribed. 

Item #2: 
Please note [insert employer] has an extensive light duty program and is anxious to have [insert claimant name] return to work as soon as he/she is capable of light duty work. Contact us for further details.

Item #3 
We will pay for this surgical procedure and follow up care according to either your PPO contract or the Illinois WC Fee Schedule or the combination thereof, whichever applies and is lower. 

Item #4: 
Pre-authorization for any further specialist referral or testing/treatment beyond routine x-rays such as Physical or Occupational Therapy, MRI, EMG NCV, Work Hardening/Conditioning, additional SURGERY or FCE is required. Please contact [insert your name] at [insert your number] for any approval needed.

We feel this sort of language (or something like it) should be used to bring clarity to this part of an IL WC adjuster’s job and avoid the sort of litigation we reported last week. We thank our intrepid reader for sharing this with everyone. We are not going to be responsible for this advice if you aren’t using it in conjunction with an attorney at KCB&A—this is sample language only.

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

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Synopsis: New Improvements/Developments at KCB&A. New Southern IL Law Office, New Defense Lawyer!!

Editor’s comment: As we continue to grow our southern IL defense practice, we have now opened a satellite office in St. Louis, MO. It will be managed by our law partner Jim Egan and his team to assist coverage across the lower half of our state. The new address is

Keefe, Campbell, Biery & Associates

7733 Forsythe Boulevard

11th Floor

St. Louis, MO 63105

Phone 855-322-6290

Fax: 855 322-9950

Website www.keefe-law.com.

The new lawyer is Dave Iammartino, J.D. who has substantial experience at the IWCC across our state. Dave has been licensed since 1996 and brings a strong defense focus to his new position. His phone numbers are office: 312-756-3717; cell 773-653-6202; diammartino@keefe-law.com.

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KCB&A Job Description—Immediate opening; email resume, please.

Classification:  IT Manager/Help Desk/Tech Support. 

Compensation:  $35K-55K per year with flexibility on hours.

Solid and Growing Downtown Chicago defense law firm is seeking an experienced IT Support Specialist to join our firm!

Responsibilities for the role include

• Deliver effective end-user training and technical support for information technology systems utilized by the Firm, to include desktop software applications, computers, peripheral devices, and phones.
• Conduct phone and desk-side training and support for attorneys, paralegals, secretaries and support staff.
• Assist team members with support, work continuously to improve processes and responses, and document detailed resolutions into a database.
• Manage/improve website and social media.

Job Requirements

• Qualified candidates must have prior law firm IT experience and in-depth experience manipulating, revising, and repairing MS Word documents.
• Demonstrated proficiency in Microsoft Office. Proficiency in Time Matters and Juris is desirable.

Please do not reply to tell us you know someone and are going to relay or thank us or you can’t do it—we understand, please just delete.