8-4-14; Can Chairman Latz Throw the Money Lenders Out of the Commission?; Gov. Quinn Mistakenly Cites Advisory Rates But IL WC is Better-for-Business; Mike Shanahan Reviews ADA Ruling of Note and more

Synopsis: Can the Current IWCC Chairman Throw the Money Lenders Out of the Commission?

Editor’s Comment: This week WorkCompCentral.com reports Lisa Rickard from the U.S. Chamber Institute for Legal Reform has written IWCC Chairman Michael Latz, Governor Quinn and Illinois Attorney General Lisa Madigan about the craziness that is lawsuit lending in Illinois workers’ compensation. The letter was sent prior to the Fourth of July. Since then, it appears nothing has happened. We note the IL WC Commission has nine members plus the Chairman and lots of other lawyers on staff, all who appear to be ignoring this request and it is starting to appear embarrassing during an election year. To paraphrase Ms. Rickard’s main points

Lawsuit lending is an important public policy issue for the U.S. Chamber Institute for Legal Reform or ILR and a national coalition of business groups. ILR is an affiliate of the U.S. Chamber of Commerce dedicated to making our nation’s overall civil legal system simpler, fairer and faster for all participants. It came to their attention various lawsuit lending firms are marketing and providing loans to injured workers compensation claimants in Illinois. They point out the Illinois Workers Compensation Act expressly prohibits assignment of any payment, claim, award or decision. (see 820 ILCS 305/21) In their view, any lender issuing loans in return for present or future payments from Illinois Workers Compensation claims is doing so in violation of the Illinois Workers Compensation Act. They formally asked the IWCC conduct an investigation and review of this potential violation by consumer credit lenders.

We strongly agree with their overall focus. If you want to read the language we have paraphrased above and attachments, see http://www.instituteforlegalreform.com/uploads/sites/1/ILR_on_Lawsuit_Loans_to_Workers_Compensation_Claimants.pdf

From the Petitioner’s Side of the Bar

Let’s take a stroll down memory lane. You may recall a very prominent central IL WC lawyer got into problems when he lent one of his claimants some money in anticipation of a future WC award or settlement. When Claimant finally got his money from his WC claim, he didn’t want to make good on the loan provided by his lawyer. The lawyer sued Claimant for the money and the whole matter made it up to the reviewing courts. In a simultaneous rebuke, the higher courts found the loan to be against public policy and dismissed the claim. They also made it clear Plaintiff/Petitioner lawyers couldn’t lend money to their clients as part of the services provided.

The other nuance you might miss is this sort of lawsuit lending can lead to a tawdry type of “auction” where an injured worker might go to two or more firms and sign an attorney representation agreement with the lawyer willing to lend the most money. If claimant wanted even more money, he/she might borrow a substantial sum from one Plaintiff/Petitioner lawyer and then fire that lawyer to borrow even more money from the second, third or fourth lawyer.

What came into Illinois and many states were independent or “third-party” lawsuit lenders who are more than willing to lend moderate amounts of money against WC claims in exchange for high interest rates as high as 60%. The loans allow the rates to compound with interest being charged on interest. In some situations, the entire settlement can quickly be owed to the lawsuit lender.

From these abuses, about three years ago, the New York City Bar Association outlined these pitfalls with litigation lending:

1.    Illegality: The litigation lending agreement itself may be illegal. As outlined above, we agree with the U.S. Chamber’s Institute for Legal Reform to note the IL WC Act prohibits assignment of WC claims in this state. We feel the IWCC or courts should enforce the IL WC Act as written. There is no question these contracts outline or create a voluntary and impermissible assignment of workers’ comp benefits.

2.    Attorney as Advisor: If asked to recommend a source for such financing, or review or negotiate such an agreement, the attorney should candidly advise the client of the costs and benefits of such arrangements and suggest alternatives. Costs may include fees that are “excessive relative to other financing options, such as bank loans.” On the other hand, a benefit may be the client’s ability to cover expenses and avoid the need for funds forcing the client into a premature (and lower) settlement.

3.    Conflicts of Interest: The lawyer must be wary of conflicts of interest. For example, when may the lawyer accept a referral fee from the financing company? How does the lawyer advise the client objectively about financing when the client cannot afford the litigation without it and might drop a valid claim?

4.    Waiver of Privilege: Disclosure of certain information to a litigation lending company may waive the attorney-client privilege, and the “common interest” privilege may not apply. A lawyer should obtain informed consent from the client before disclosing privileged information to the litigation lending company.

5.    Control Over the Proceeding: Attorneys must guard against the litigation company exerting undue control over the legal proceeding.

We are aware of many challenging ethical issues for Petitioners’ firms in handling and dealing with such loans. To our understanding Petitioner firms are asked and provide some sort of estimate of future “value” of Petitioner’s claim. They also agree to let the litigation lender know when the settlement or decision is being paid.

From the Defense/Risk Side of the Bar

Why don’t businesses and their defense teams, like KCB&A want litigation lending? We are advised as many as 40% of IL WC claims involve litigation lenders. The impetus for some work injury claims are fast money and litigation lenders provide it. Insurance carriers, self-insured employers and others see questionable claims that might not even start without such lending. We also see claims run on for years because no one wants to tell claimant they are not going to get any money at the end of the claim because the shylocks will now get it all.

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

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Synopsis: IL WC Advisory Rates Not Big News in IL Governor’s Race—Expect the Real News in October.

Editor’s comment: Late last week Gov. Pat Quinn announced a 5.5 percent drop in IL WC rates for 2015 was being recommended by the National Council on Compensation Insurance. The Quinn administration said if enacted it would represent a cumulative 18 percent cut in the ethereal advisory rates since the IL work comp reforms were enacted by the current administration in 2011.

However, the latest IL WC advisory rate announcement keeps with the same silly trend we have seen once a year at the IWCC for decades. Just last November, we addressed this annual announcement in which NCCI recommended lower advisory rates for WC insurance should drop. One funny thing we have seen once every year for decades and decades is an annual announcement in August about the stat-rats at NCCI recommending advisory rates for WC insurance should drop, by either a little or a lot. We consider this to be similar to selling stock in the Golden Gate Bridge—it sounds good but it isn’t worth anything to anyone. Last fall, the PR mill at the IL WC Commission just dropped this WC advisory rate hot flash:

NCCI files for 4.5% decrease in 2014 WC advisory insurance rates-The National Council on Compensation Insurance filed for an 4.5% decrease in voluntary advisory insurance rates, effective January 1, 2014, following the 3.8% decrease in 2013.

Before we start popping champagne corks and tossing confetti, we recommend everyone calm down. We have no true idea what advisory rates might be and why anyone thinks they are news. If rates dropped as much as NCCI says they should, WC insurance should be free in this state! Every year, year in and year out, NCCI recommends decreases in IL WC advisory rates. In the 2009 IWCC annual report, the IWCC heralded the fact advisory rates dropped 33% from 1990 to 2008. The IWCC indicated the massive reduction in advisory rates was calculated using advisory rates filed annually by the National Council on Compensation Insurance, a rating organization authorized to file rates on behalf of companies pursuant to Section 459 of the Illinois Insurance Code (215 ILCS 5/459).

Blah, blah, blah. In 2012, IL WC advisory rates dropped 3.8%.

http://insurance.illinois.gov/newsrls/2012/08/DOIReviewsReductionOfWorkersCompRate.pdf

In 2011, IL WC advisory rates dropped 8.8%. Starting to notice a trend?

http://www.insurancejournal.com/magazines/features/2011/09/19/216159.htm

Please don’t tell us any more about IL WC advisory rates and how they are dropping. Advisory rates are clearly trumped by actual WC insurance premiums. The every-other-year analysis by the State of Oregon is the best source for the actual WC premium ranking that we were advised will be again published this October::

http://www.cbs.state.or.us/external/dir/wc_cost/files/report_summary.pdf

There is nothing advisory about these metrics—the State of Oregon looks at what IL business is actually paying and, when last published we were number 4 in the country. By number 4, they mean fourth highest or, to be more blunt, fourth worst. premiums. Yes, folks; we care about actual premiums; not advisory and ethereal rates. Let’s hope IL WC has moved back to the middle of the pack and gotten out of the top ten worst.

As good news, we do feel significant progress has been made at the IL WC Commission. IL WC Medical reimbursements are dramatically lower. There is no question PPD values have dropped in a solid but fair fashion. We feel the IL WC Arbitrators are professional, knowledgeable and very sensitive about claims involving WC fraud or over-reaching. We still feel our Arbitrators and Commissioners can make improvement in getting claims to hearing or reasonable settlement but we are also sure they might have their own recommendations for the attorneys who appear before them. In contrast to the IWCC hearing officers, we don’t feel the reviewing courts have any concerns at all about the cost-effectiveness of their “activist” or liberal rulings.

Perhaps this year's announcement of a recommended drop in advisory rates is only compelling because it precedes the upcoming Illinois gubernatorial election. Work comp costs are an emerging election issue. Both candidates continue to address this issue. If Oregon's October 2014 report shows little or no improvement, Mr. Rauner may have proof that the reforms did not go far enough. If that's the case, support for Mr. Rauner may certainly increase his lead over Mr. Quinn, who is already shown to be behind as much as fourteen points in a July poll. Regardless of the election and all politics aside, the KCB&A defense team is hopeful this new study will show improvement for the State of Illinois. Decreasing work comp rates and premiums will only help Illinois' work comp system and our business environment become more competitive with other states in our region.

This article was researched and drafted by Jennifer Maxwell, J.D. along with your editor. You can reach Jenn to discuss this and other defense issues at jmaxwell@keefe-law.com.

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Synopsis: Jewel Companies Dodges Bullet on Challenging Down Syndrome Worker’s ADA Beef--Important Seventh Circuit ADA Ruling with analysis by Michael L. Shanahan, J.D.

Editor’s Comment: The Seventh Circuit Appellate Court in Reeves v. Jewel Food Stores granted summary judgment in favor of Jewel Food Stores on an Americans With Disabilities Act (“ADA”) failure to provide a reasonable accommodation claim because the Plaintiff’s parents did not make reasonable efforts to determine what accommodations were necessary. This decision appears to be a victory for employers as it promotes joint responsibility for developing and providing reasonable accommodations to disabled workers.

EMPLOYERS MUST ENGAGE IN AN “INTERACTIVE PROCESS” TO ARRIVE AT A REASONABLE ACCOMMODATION

The centerpiece of the ADA—in terms of workplace rights—is the right to request a reasonable accommodation. A reasonable accommodation is a change to the work environment, in the workplace, the job itself, or process that would allow a person with a specific disability to apply for a job or perform the essential functions of the job once in the position.

Under the ADA, it is illegal for an employer to discriminate against any employee who requests or needs a reasonable accommodation. After the employee requests or the employer learns the employee needs a reasonable accommodation, the employer and employee should discuss possible solutions and try to arrive together at an accommodation that works for the employee. This discussion is formally known as the “interactive process.”  However, the employer does not have to provide a reasonable accommodation if it requires significant difficulty or expense.  Nonetheless, whether a reasonable accommodation requires significant difficult or expense is a factual intensive inquiry that is beyond the scope of the instant article.

In Reeves, the employee worked as a bagger at Jewel and suffered from Down Syndrome. When Plaintiff was initially hired, Jewel provided a job coach, an individual training program on the daily tasks, and a supervision policy in tandem with the employee’s parents. Additionally, the employee was exempt from certain duties such as collecting shopping carts from the parking lot.

Over the course of Plaintiff's employment, there were several instances where he cursed at managers or fellow coworkers in front of customers and on one occasion where he took a pin without realizing they were for sale. However, despite these incidents, the Plaintiff was not terminated. Following the pin incident, the Plaintiff's parents requested Jewel hire a job coach again, but Jewel thought it was unnecessary and Plaintiff's parents no longer persisted. Ultimately, Plaintiff was terminated after an outburst where he cursed and yelled at a fellow coworker in front of customers.

In granting Jewel summary judgment on the merits, the Court found Plaintiff's parents did not make reasonable efforts to decide and convey what reasonable accommodations were necessary. It appears the Court relied heavily on the fact Plaintiff's parents did not press the job coach issue further, they did not request an alternative accommodation, and they did not indicate that said coach could have prevented future profane outbursts. Furthermore, the Court found the request was made after the pin incident, which did not imply an accommodation for inappropriate verbal outbursts.

This decision is an indication that the “interactive process” is more than simply a request.  Instead, the “interactive process” requires a meaningful discussion with specific recommendations and suggestions by both the employer and the employee (or in this case, the parents on behalf of the disabled employee/Plaintiff).

Nonetheless, despite Jewel’s victory, employers would be wise to investigate reasonable accommodations requested by their employees with diligence. Notably, if the request by Plaintiff’s parents was related to the cursing and yelling repeatedly committed by Plaintiff, then Jewel likely would have had to engage in an “interactive process” to review whether they could have provided the reasonable accommodation as requested.

This article was researched and written by Michael L. Shanahan, J.D. He is available for answers to any questions about general liability, employment law, or workers’ compensation at mshanahan@keefe-law.com.

7-28-14; To the Labors of Motherhood May Come New Civil Rights--Illinois and Federal; EEOC Issues New Guides about Rights of Pregnant Workers; IL WC Medical Fee Schedule Goes Up and much more

Synopsis: To the Labors of Motherhood May Come New Illinois Civil Rights Protections and More Challenges for Business and All Illinoisans.

Editor’s comment: HB 8 was hurriedly rushed through the IL House and Senate and on June 26, 2014 it was sent for Gov. Quinn’s signature. If he signs it, the bill won’t become effective until January 1, 2015. In our view, it is more unneeded regulations for Illinois business. We feel the public relations impact for our legislators to “take care of pregnant women” was too hard for them to turn down. You may note 32 legislative sponsors of this bill were women. The bill arguably promotes workplace fairness for pregnant workers by requiring employers to make reasonable accommodation for conditions related to pregnancy, childbirth, lactation and related conditions, unless the employer can demonstrate the reasonable accommodation would impose an undue hardship on the ordinary operation of the employer’s business—just as employers do for reasonable accommodations caused by other conditions.

What Was Wrong with Federal ADA and PDA?

The bill is supposedly modeled after the Americans with Disabilities Act, the Pregnancy Discrimination Act and analogous state law. We ask the rhetorical question, why not simply rely on the ADA and PDA? Proponents assert HB 8 was necessary because state and federal law and enforcement was supposedly unclear—as you will see below, the EEOC just changed their guidelines. Proponents further claim courts and employers continued to deny pregnant workers the kinds of job modifications they routinely offered to other employees who are similar in their ability or inability to work—we have no idea what rulings were being referred to. We know of one jury verdict against a well-known Chicago restaurant where a pregnant employee recovered $300,000 along with her attorney’s fees and costs for alleged employment discrimination due to pregnancy. There is no question Illinois state employment laws and federal law require employers to provide pregnant workers the same treatment and benefits provided other workers who require temporary accommodations.

Little Illinois Companies and Large Illinois Employers May Have to Learn and Implement This New Legislation

In our view, this bill may apply to your home-based nanny, cleaning lady, babysitter, dog-walker, any single person you hire to work for you. If it becomes law, the new Public Act amends the Illinois Human Rights Act and defines "pregnancy" as pregnancy, childbirth, or related conditions. It now defines an "employer" to include any person employing one or more employees when a complainant alleges civil rights violation due to unlawful discrimination based upon pregnancy. It doesn’t make a distinction between part-time or full-time workers.

The provisions regarding pregnancy are applicable regardless of the source of the employee's inability to work or employment classification or status, including part-time, full-time, or probationary. The bill also provides it is a civil rights violation for an employer, with respect to pregnancy, childbirth, or a related condition:

(1)  not to make reasonable accommodations, if so requested, unless the employer can demonstrate that the accommodation would impose an undue hardship on the ordinary operation of the business of the employer;

(2)  to deny employment opportunities or benefits to or take adverse action against an otherwise qualified job applicant or employee;

(3)  to require a job applicant or employee to accept an accommodation the applicant or employee chooses not to accept; or

(4)  to require an employee to take leave under any leave law or policy of the employer if another reasonable accommodation can be provided.

Can You “Misclassify” a Pregnant Worker to Try to Avoid the New Law?

One potential way around the new law might be to hire a “business” to provide small-scale services needed, like house-cleaning and dog-walking. What we mean by “misclassify” is to treat anyone you hire as a separate company. When you hire one person to perform a service like housekeeping, can you treat them as a “business” and issue a 1099 for payments made to them. What if the “business” you hire is a sole proprietor? We aren’t recommending creating ruses or participating in fraud to avoid the new laws—we just want our readers to better understand if you hire one worker, the new state law appears to come with employment status. On the other hand, if you hire a business to provide a service for you, the business is supposed to reasonable accommodate the pregnant worker. We have no idea is a sole proprietor of a dog-walking business has to accommodate herself if she is a business versus just a dog-walker! For larger companies, you risk the IL Department of Labor coming after you when you misclassify workers.

Do the Civil Rights Protections for Pregnant Workers Start When They Learn They are Pregnant and End with Childbirth?

No—the protections start when reasonable accommodation of pregnancy starts and end with the cessation of lactation or other medical sequalae of the pregnancy. For some mothers, this might be several years. If you aren’t sure about whether you need to accommodate at any time, send a reply and a KCB&A defense team member will give you our best thoughts.

Can an Illinois Business or Individual “Drug Test” to Confirm Pregnancy?

Some time ago, we had a client who wanted to terminate an ineffective worker—when the client talked to her worker, the troubled employee indicated she was pregnant. Our client tried to reasonably accommodate the worker for several months to then have the employee quit without notice and basically disappear. Our client felt she was bamboozled and she felt the employee completely faked her claimed pregnant status. The client asked a reasonable question—in the future, if another worker advised of pregnant status, could the client ask the employee to drug test to prove she was pregnant? It would seem reasonable under either state or federal law for documentation of status to be part of due diligence in handling all claims.

We have asked this question of many of our closest readers and friends and the uniform answer was not to require a pregnancy test. Instead, our readers/friends of the firm felt a much better approach was to ask the worker to provide a note from an OB-GYN or other similar physician to confirm

·         The fact of pregnant status and

·         The needed reasonable accommodation due to that status.

In taking that approach, you basically are following a much more effective model or process. You are also setting up a path for continued documentation of accommodation needs. We are happy to consider your best thoughts on this issue.

An IL Employer Can’t Force a Pregnant Employee to Stay Off Work

We know the City of Chicago sends pregnant workers in some departments home from work for a full year, whether the worker wants to work with accommodation or not. The reason you don’t hear much about this practice in the press/media is relatively few women will turn down and fight over a year off work with full pay and benefits. Both state and federal law make such practices an actual or potential violation of a pregnant worker’s civil rights. We hope City administrators stop that practice and try instead to keep hard-working employees in jobs with accommodation.

IL Employers Will Have to Change Your Workplace Notices and Handbooks Next Year

It will be a civil rights violation for an IL employer to fail to post, keep posted, or fail to include in any employee handbook information concerning an employee's rights under the Act, a notice, to be prepared or approved by the Department of Human Rights, summarizing the requirements of the Act and information pertaining to the filing of a charge, including the right to be free from unlawful discrimination and the right to certain reasonable accommodations. The bill also provides it is a civil rights violation to retaliate against a person because he or she has requested, attempted to request, used, or attempted to use a reasonable accommodation. HB 8 does not require employers to create new jobs or to fire, transfer an employee with more seniority, or promote an unqualified employee. The theory is to provide pregnant employees with reasonable, temporary accommodations to increase worker productivity, retention, and morale, decreases re-training costs, and reduces health care costs associated with pregnancy complications.

As we outline above, the bill was sent to the Governor on June 26, 2014. Assuming the Governor signs it and every indication is he will, the bill will become effective on January 1, 2015. If you need help implementing the new law or seek assistance with defending pregnancy claims, contact our defense team leader Brad Smith at bsmith@keefe-law.com. To read the new law, click here:

http://ilga.gov/legislation/billstatus.asp?DocNum=8&GAID=12&GA=98&DocTypeID=HB&LegID=68233&SessionID=85

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

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Synopsis: The U.S. Equal Opportunity Commission has released new guidelines for the enforcement of laws prohibiting workplace discrimination against pregnant women.

Editor’s comment: These are the first new federal guidelines on pregnancy discrimination in more than 30 years. The document, titled EEOC Enforcement Guidance on Pregnancy Discrimination Related Issues, seeks to clarify or better outline federal rules on discrimination against pregnant workers under both the Pregnancy Discrimination Act and the Americans with Disabilities Act.

The EEOC is responding to an increase in Pregnancy Discrimination charges/complaints; They also feel the Federal Courts are leaving both sides confused in their rulings

The guidelines were issued following a rising number of complaints regarding pregnancy discrimination in the workplace, as well as differing interpretations of existing law by different courts. The U.S. Supreme Court recently agreed to hear a pregnancy discrimination case during its October 2014 term, in part because of lower courts' differing views of the existing law.

New EEOC Guidelines Clarify Their View of Pregnancy Discrimination

The EEOC's new guidelines seek to make things fairly clear, emphasizing workplace discrimination against pregnant women is a prohibited form of sex discrimination. For U.S. employers and risk managers, please remember the EEOC has virtually unlimited funds and can and will sue employers over their view of what should be U.S. law. While most of these charges/claims settle, the EEOC then can force employers to accept and pay for discrimination counseling for years to come. They will also audit to insure you are complying.

Here are the important facets of the new guidelines:

Ø  Pregnancy-related conditions are considered disabilities under the ADA, which require employers to provide reasonable accommodations as they would for any other medical disability.

Ø  Employers may not fire, demote, or refuse to hire women based on a current or potential future pregnancy or any other pregnancy-related medical condition.

Ø  Lactation is a medical condition and has to be afforded "reasonable break time" to address lactation-related needs.

Ø  Women may not be forced to take leave during or following a pregnancy if they can still adequately perform their assigned tasks.

Ø  Women may not be treated differently or restricted from doing certain jobs, such as those that may expose them to hazardous chemicals, solely based on their ability to become pregnant.

Ø  An employer may not inquire about whether a woman intends to become pregnant, as such inquiries will be generally regarded as evidence of pregnancy discrimination in the event of any future unfavorable action.

The new EEOC guidelines on pregnancy discrimination take effect immediately, and can be read online in their entirety at the EEOC's website. http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm

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Synopsis: The Illinois WC Commission Increases WC Fee Schedule Payment for Medical Evaluation and Management Procedures Such as Office Visits. Analysis by Pankhuri Parti, J.D.

Editor’s comment: While the purpose of the Order seems innocuous enough – ensuring the injured workers still have access to doctors willing to treat their work injuries, we fear the consequence of this new order may be to overburden the employers, who already face an uphill battle in the Petitioner friendly workers’ compensation system of Illinois.

How the IL WC Medical Fee Schedule at the Illinois Workers’ Compensation Commission Works?

Through the 2005-2006 Amendments of the IL WC Act, the IL legislature ordered the IL WC Commission to create fee schedules for treatment provided on or after February 1, 2006. Under this approach the payment to the medical provider would be the lesser amount of either the actual charge or the amount deemed appropriate in the fee schedule. Section 8.2 of the Workers’ Compensation Act stated clearly the fee schedule set the "maximum allowable payment;" and the employer was expected to pay to the medical provider either the actual amount billed or the fee schedule amount, whichever was less. Inherent in this approach was the liberty granted to the parties – the medical provider and the employer – to contract for amounts different than the fee schedule rates and if the contracted/billed amount was less than the fee schedule rate then the employer would be bound to pay that amount. In all these situations the amount charged, the fee schedule amount, and the contracted amount, would represent full payment for the services rendered by the medical professional.

It is important to note the fee schedule only affects the amount of payment made to the medical provider by the employer. It has nothing to do with the question of whether or not the treatment being undergone by Petitioner is reasonable and necessary and covered by workers’ compensation. 

At the time the fee schedule was first implemented the maximum allowable payment was deemed to be 90% of the 80th percentile of charges and fees as determined by the IL WC Commission and based on the information on the provider billed amounts obtained from employers’ and insurers’ national database. The Commission was then to adjust these charges by the Consumer Price Index-U or Consumer Price Index-M. As a result of the legislation the Commission established fee schedules for procedures, treatments, and services for hospital inpatient, hospital outpatient, emergency room and trauma, ambulatory surgical treatment centers, and professional services. For the services for which the fees could not be calculated, the fees were set, by default, at 76% of the charged amount.

Changes in the IL WC Fee Schedule System over the Years

On February 2009 the IL WC Commission created new fee schedules for ambulatory surgical treatment centers, hospital outpatient radiology, pathology, and laboratory, physical medicine and rehabilitation services, and surgical services, and rehabilitation hospitals. Based on its work with the Workers’ Compensation Medical Fee Advisory Board, the Commission decided the change the reimbursement methods for certain services but later repealed this changed. Instead it was decided the treatment would be paid at the 65%-of-charge rule.

On June 28, 2011 Governor Quinn signed the House Bill 1698 and one of the provisions in the bill reduced all fee schedules by 30% and reduced the default pay 76% of charge to pay 53.2% of charge instead. Doctors and hospitals in our state started screaming at their lobbyists over these dramatic cuts. However, many observers still feel the discounted values remained higher than group health reimbursements.

On July 16, 2014 the Illinois WC Commission passed an order to increase the reimbursements for certain identified services to the recommended levels so as to increase the injured employees’ access to health care.

The New IWCC Order and Recommended Changes

The Commission passed this order under Section 8.2(b) of the Act which allows the Commission to change the CPI-U if it finds there is a significant limitation on access to quality health care in either a specific field or geographical location. The order was based on a December 2013 memo which highlighted concerns about some Illinois Workers’ Compensation fee schedule payments, claiming they were at rates which might limit access to medical care. The memo raised the possibility of healthcare providers ceasing to treat injured workers where payments were unreasonably low and identified the possible reasons as the influx of millions of new insureds into the healthcare market and the Affordable Care Act.

The analysis on which the decision was reached compared the fee schedule amounts after the 30% reduction in September 2011 with payments made to providers under Medicare and noted fee schedule amounts for many Evaluation and Management codes were less than that provided under Medicare. Additionally, the commercial payments were significantly above those deemed as appropriate in the fee schedule. Because the commercial payments were so much higher than the fee schedule and the Medicare payments were also higher in many instances, the memo concluded there was a reasonable chance of primary care physicians ceasing to treat injured workers when they could so easily fill their schedules with better insured patients.

As a result the purpose of the changes was to bring the payments under the fee schedule for evaluation and management services to a level comparable to Medicare. Some of the evaluation and management procedures identified for the purposes of increasing the reimbursements rates are: office/outpatient visit new, office/outpatient visit established, home visit new patient, and home visit established patient. The order accepts the proposed CPI percentage increase, the proposed dollar increase, and the proposed fee schedule amount recommended by the memo. The IWCC memo detailing the changes can be accessed at http://www.iwcc.il.gov/EMorder.pdf

We appreciate your thoughts and comments. Please post them on our award-winning blog. This article was researched and written by Pankhuri Parti, J.D. She can be reached for information or assistance with this and other defense issues atpparti@keefe-law.com.

7-21-14; Confusion about Intrusion into Seclusion--When/How can Adjusters Record Statements by Joe D'Amato, JD; Matt Ignoffo Reports Great News for RUMC; Did the OD Act End for Some Workers and more

Synopsis: Can We Record or Not? Here is the Current State of Confusion for IL Claims Adjusters and Risk Managers. Analysis by Joseph F. D’Amato, J.D.

Editor’s comment: Constitutional challenges to IL eavesdropping statute leave our’ “two party consent status” up in the air. As risk managers, investigators and adjusters who regularly read this space are aware, Illinois was one of a dozen states where it was illegal to record a conversation you are having with another person (we are a so-called “two party consent” state). All parties to the conversation must agree to the recording to avoid liability in Illinois.

The statute criminalizing this behavior was known as the “eavesdropping statute.” The statute made it a crime to use an "eavesdropping device" to overhear or record a phone call or personal face-to-face conversation without the consent of all parties to the conversation. The law defined an "eavesdropping device" as "any device capable of being used to hear or record oral conversation or intercept, retain, or transcribe electronic communication whether such conversation or electronic communication is conducted in person, by telephone, or by any other means." The law made no distinction as to whether the conversation is face-to-face or over the phone. Actually, cell phones memo applications could be used in a fashion that might cause legal liability under the old legislation.

In practice, if you were investigating an alleged accident and decided to take a claimant’s or witness’s recorded statement without his or her consent, you faced a class four felony and one to three years in prison. While Illinois is in the minority of states on this issue, it is unlikely we will be for long due to two relatively recent Illinois Supreme Court Decisions.

In People v. Melongo, Defendant serendipitously recorded three conversations between herself and the Assistant Administrator of the Cook County Court Reporter’s Office and posted the audio to her website. In People v. Clark, Defendant recorded a child support hearing without obtaining the consent of either the judge presiding over the hearing or the opposing attorney. Although the procedural methods in both cases differed, both Defendants challenged the Illinois Eavesdropping Statute on both First Amendment and so-called Substantive Due Process grounds. The Circuit Courts of Cook and Kane County, respectively, agreed the Illinois eavesdropping statute was unconstitutional. Attorneys for the state appealed the decisions all the way to the Illinois Supreme Court.

Without taking our readers on a journey through the academic trappings of both cases, the Illinois Supreme Court agreed the eavesdropping statute violated the First Amendment to the United States and Illinois Constitutions, primarily because the legislation was overly broad. The Court noted the public policy of the statute was to protect conversational privacy. However, the statute as written criminalized conversations never meant to be private. For example, the Court noted the statute criminalized and prohibited recording a loud argument on the street, a political debate in a park and any other conversation loud enough to be overheard by others whether in a private or public setting.

What does this mean for risk managers, investigators and claims adjusters looking to quickly take recorded statements without worrying about uncooperative claimants or witnesses? We point out the IL statute, although currently held to be unconstitutional, is still on the books but the situation is a little murky.

This does not mean, however, that recording of all communications is now universally permitted in Illinois:

• Recordings may still be subject to the one-party consent rule of the Federal wiretap act.
• Communications electronically reaching into other states may be subject to the wiretapping laws of the second state and not just Illinois.
• Secret recordings may still support an Illinois common-law claim for “intrusion into seclusion” or the privacy of another.
• Another Illinois statute, not necessarily affected by the decision in the Melongo case, makes it illegal to "videotape, photograph, or film" people without their consent in "a restroom, tanning bed, or tanning salon, locker room, changing room or hotel bedroom.”

At present, if you attempt to record a conversation without all parties’ consent you may be violating the precise terms of the law and you might still be subject to criminal prosecution. In practice, we feel it’s highly unlikely prosecutors will try to enforce the law as currently written in light of the IL Supreme Court’s rulings. Our advice to claims adjusters and risk managers taken statements in post-accident investigations—continue to ask for everyone’s consent. This is the best path to avoid litigation.

We also suspect these two decisions by our IL Supreme Court have sent the folks in Springfield scrambling to either amend the statute to make Illinois a “one party consent” state or try to create boundaries or rules where two-party consent may still be appropriate.. Stay tuned to this space for further updates.

This article was researched and written by Joe D’Amato, JD. Joe can be reached for questions and comments at jdamato@keefe-law.com or (312) 756-3708.

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Synopsis: Orthopedic Program at Rush University Medical Center Named Highest Ranked Program in Illinois and #6 in the Nation!!! Analysis by Matthew Ignoffo, J.D.

Editor’s Comment: U.S. News & World Report just released its 2014 rankings for the best hospitals in the nation and we are pleased to report our long-time client at Rush is right at the top. The Report reviewed 1,646 hospital orthopedic programs nationwide. All of these programs treat significant numbers of complicated inpatient cases. Rush is ranked in seven of 16 categories included in the magazine’s 2014-15 “America’s Best Hospitals” issue, which became available online on July 15, and is one of the two top-ranked hospitals in Illinois overall.

Rush remains among a small group of hospitals that rank highly in multiple specialties. Only 144 of the approximately 5,000 hospitals in the United States — approximately 3 percent — scored high enough this year to rank in even one specialty nationally by U.S. News.

Rush’s orthopedics program was ranked No. 6 nationwide, making it the highest ranked orthopedics program in Illinois. Rush’s other ranked programs were geriatrics (No. 17); neurology and neurosurgery (No. 17); nephrology (No. 31); urology (No. 43); cardiology and heart surgery (No. 46); and cancer (No. 48).

U.S. News also noted that the following Rush specialty services are “high-performing”: diabetes and endocrinology; ear, nose and throat; gastroenterology; gynecology; and pulmonary.

In fact, a hospital is reviewed only if it treated at least 338 such inpatients in 2010, 2011 and 2012. Other criteria used in the ranking were reputation with specialists, survival, patient safety, patient volume, nursing intensity and nurse magnet recognition.

As noted in the rankings article, Rush University Medical Center is a 669-bed general medical and surgical facility with 30,810 admissions in the most recent year reported. It performed 10,780 annual inpatient and 9,537 outpatient surgeries. Its emergency room had 55,519 visits. Rush University Medical Center is a teaching hospital.

RUMC It is also accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF). As many of you know, Rush's orthopedic program is entirely staffed by physicians from Midwest Orthopaedics at Rush, also the team physicians for the Chicago Bulls and Chicago White Sox.

This article was researched and written by Matthew Ignoffo, J.D., M.S.C.C. Please feel free to contact Matt at mignoffo@keefe-law.com.

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Synopsis: Did the Folta v. Ferro Engineering ruling end the IL OD Act for hundreds, even thousands of workers? What is the correct insurance coverage for these new claim—GL or EL?

Editor’s comment: We had one of our long-time readers ask an very important question after reading our article on the ruling in Folta. Illinois OD law states (in pertinent part): 

(f) No compensation shall be payable for or on account of any occupational disease unless disablement, as herein defined, occurs within two years after the last day of the last exposure to the hazards of the disease…

If you read that carefully, please note numerous IL OD claims, not just asbestosis, may be drawn into this new “exception” to the OD Act, if the Appellate Court’s ruling isn’t reversed. The provision above confirms IL OD claims require an employee to show “disablement” within two years of the date of exposure to a pathogen. The IL OD Act says nothing about “knowledge” of the ailing worker about the exposure to the pathogen.

In other IL OD rulings, “disablement” is defined as missing one day of work due to the exposure.

This new ruling appears to open up civil liability for OD claims against employers when the worker doesn’t know the link between the pathogen and the later illness until they become sick and/or suffer from an exposure but didn’t know the cause.Consistent with what we feel is the strained logic of Folta, it would appear their medical problems would have to extend past the OD statute of limitations/repose so they “weren’t covered” but could now sue the employer directly in circuit court.

This new ruling would appear to find the employee could sue their employer if they were exposed to a pathogen at work and didn’t know of the bad effects of exposure for a couple/three years. In our view, that happens a lot, particularly in the health care or nursing home field.

Again, if that theory remains IL law, it could open up hundreds of new civil claims for things like “bad building syndrome” where workers claim to be sick for years. To the extent this theory may be opening up lots of new litigation, what do you feel the appropriate coverage might be to protect Illinois employers from such claims?

We would love your thinking. Either way, we feel you need to let your underwriters know about it.