5-18-15; IL Speaker Madigan Jamming IL WC Reform for a "Fail;" Is the Worker an Employee or Independent Contractor by Arik Hetue, JD; Are IL Gov't Fake Pensions "Unfundable?" and more

Synopsis: Springfield Update—IL Speaker Madigan to Jam WC Reform Legislation for a “Fail.”

Editor’s comment: As you read this, IL House Speaker Michael Madigan set two different “Committees as a Whole” in the Illinois House—a “Committee as a Whole” hearing is a combined hearing for all members of the Illinois General Assembly. In both such hearings, the testimony at the first hearing was directed at knocking down the proposed IL WC reforms with a second session designed to rail and rock against caps on medical malpractice claims or tort reform. It appeared to us the Illinois Trial Lawyers Ass’n effectively got control of the inner workings of the Illinois General Assembly to dominate the hearings and present their positions on either subject. The amount of testimony from the side of Illinois business was relatively limited.

Did this strategy work? Well, this morning the news was Speaker Madigan was calling the WC reforms for a vote on Thursday, May 21, 2015. What is odd about that announcement is the IL WC reform measures haven’t been reduced to actual legislation by their sponsors. All we have seen to date are media proposals from new Governor Rauner without any real language for the legislators to actually consider or seek to modify, as they always do. We assume Governor Rauner and his team continue to troll for WC reform votes from our legislators without having to actually write anything down.

What it appears may now happen is House Speaker Madigan is going to have his staff create and propose similar WC “reform legislation” so that can be called for a vote and then knocked out by the heavily Democrat-controlled General Assembly. Obviously Speaker Madigan feels he has little to no concern about any meaningful WC reform passing. We assume the expectations of Speaker Madigan in using this unusual tactic is to quell debate and get WC reform off the State’s agenda so they can move forward to deal with other issues that have been discombobulated by our kooky legislators in years past.

As we have repeatedly advised our readers, we feel the true WC reform in this state is going to come from our hearing officers at both the Arbitration and Commission level. If they start to handle “causation” or “major contributing cause” with a common sense approach, you don’t need WC legislative reform. If they start to handle the “traveling employee” concept consistent with the language of the IL WC Act that requires an accident to “arise out of” the employment, you don’t need WC legislative reform. Arbitrators and Commissioners can currently deal with impairment ratings as they feel best, even as they consider all the other statutory factors in the IL WC Act.

In short, we hope our administrators start to apply the current English-language version of the Illinois Workers’ Compensation Act and drive our State to the middle of the fifty United States and get workers’ comp reform off the legislative agenda. When that happens, Speaker Madigan and his troops can stop their shenanigans and public relations fluff.

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

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Synopsis: Is the Worker an Employee or an Independent Contractor? Recent Case Law Clarifies IL’s Position on this Complex Question. Thoughts and analysis by Arik D. Hetue, J.D.

Editor’s comment:  We have seen this scenario played out many times in the past, and business is always trying to navigate a very sticky wicket of how to have just enough control over a worker such that they will be classified as an independent contractor. Over the past 10 years, the rise of former trucking companies which style themselves as logistics companies who then farm out the driving to “independent” drivers was the most recent version of this intricate dance. Please, Illinois business, be careful when trying to tango with our law.

In the case of Steel & Machinery Transportation v. IWCC, published on May 1, 2015, the IL Appellate Court, WC Division confirmed, again, the more control over a driver a company asserts, the more likely the driver will be found to be an employee of the company. As many of our readers are aware, there is no bright line rule for this classification. In Illinois, as in many of our sister states, we resort to a multi-factor analysis to determine a driver’s status. Among the various issues to be analyzed are who is providing the insurance, how the driver is paid, who controls the routes, who decides the jobs, whether logos are in place, and a variety of other factors. We have seen in the past the primary factors will generally be the nature of the work, who controls the work, and whether the driver has independent WC insurance.

In  4-1 split decision, the Workers Compensation Division of the Illinois Appellate Court ruled a truck driver was entitled to our generous IL WC benefits after his injuries from a crash necessitated the partial amputation of his leg since he was an “employee” of the company that hired him to transport a load from Indiana to Wisconsin.

The facts were essentially uncontested – Driver Radomir Cvetkovski worked as an over-the-road truck driver and he owned his own tractor-trailer. In June 2005, Respondent Steel & Machinery Transportation contracted with Mr. Cvetkovski to transport a shipment of steel from Indiana to Wisconsin. After Mr. Cvetkovski picked up the load in Indiana, he drove his vehicle to a truck stop, and then went home for the weekend as the delivery was due on Monday. On Monday morning, he left to deliver the load, but during his transit to WI, he was in a severe accident and the result was a below-the-knee amputation to his left leg.  

Mr. Cvetkovski filed a claim for IL WC benefits, but Steel & Machinery disputed the claim, arguing it should be denied as Mr. Cvetkovski was an “independent contractor.” Please note his “independence” did not include the purchase of a policy of WC insurance to cover himself in case of a work-related loss or injury. An Arbitrator, the Commission, and the Circuit Court all agreed Mr. Cvetkovski satisfied the requirements to be considered an employee and awarded benefits.

Among the facts related to this finding, the most important tended to be in the area of control – while Claimant owned the truck he was driving, according to the Agreement between the parties, the truck and equipment used were for Steel & Machinery’s “exclusive possession, control and use for the duration of [the] Agreement.” Also – while Claimant was on driving routes, the testimony indicated he drove solely for Respondent during his years working with them, and he suffered negative consequences if he ever turned down a delivery. While he could technically work for other parties, the Agreement subjected this activity to a wide range of subjective hoops he would have to jump through and approval would be required before he could do so. While driving, he would be contacted every couple of hours by a Respondent dispatcher, who would direct routes and deliveries.

Going the other way, there were facts that lead to an inference Claimant was an independent contractor – specifically, his ownership of the truck, payment of upkeep for the truck, his per job payments with no tax withholdings, and the fact the company did not require him to submit to a dress code or appearance code.

In any case, this determination was a finding of fact – and as such, following the Commission decision, it could only be overturned under the business-dreaded “manifest weight of the evidence” standard. In light of the fact there were reasonable facts on both sides of the employee/independent contractor question, either decision by the Commission would have been sustained under the manifest weight standard. As any defense veteran knows, this is an extraordinary burden to meet.

Presiding Justice William Holdridge issued a very interesting dissent where he noted "under our court’s current interpretation of the law, it has become virtually impossible for a trucking company and an independent driver/lessor to structure their relationship in a way that reliably precludes a finding of an employment relationship, even if that is the clear and expressed intent of both parties." Justice Holdridge felt a more reasonable approach would be to adopt a position allowing a trucking company's compliance with regulations that require it to exercise control over a driver to not equate to evidence of the company’s control over the driver for the purposes of determining the driver’s contractor status. What this means for us in IL business is the more control, the more likely it is an employee status. Even if the control asserted is required under federal law. Please be very careful in how you handle such relationships.

Editor’s note: If this employer “forced” or otherwise required this claimant to have his own WC coverage and provide a certificate of insurance to them, there is a much stronger chance this driver would have been viewed as “independent.” It is our view, as the driver had no WC coverage, the reviewing court put the WC coverage on the company that had it. We tell all our clients and readers—never, ever hire a sole proprietor to work for you and allow them to “opt-out” of WC coverage. It can be financially disastrous to do so—if you aren’t sure, send a reply and we will explain further. Please note, this claim involved an partial leg amputation. The cost of such a claim could be $300K or over seven-figures, if the guy can never drive or work again. You may also note the claim has been pending for around 10 years—litigation costs are probably high.

An Illinois worker who is injured for an employer that doesn’t have any WC coverage for them can:

• Sue in Circuit Court for the injuries;
• Sue at the IL Work Comp Commission too;
• Any benefits received from either venue don’t offset;
• The employee can “pierce the corporate veil” and seek to go after the employer’s personal assets;
• It is a felony to operate in IL without WC coverage.

This article was researched and written by Arik D. Hetue, J.D. who can be reached at ahetue@keefe-law.com. If you would like to review a copy of this decision, please feel free to email him with any comments or concerns, or you can post them to our award winning blog!

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Synopsis: Another Quick Thought on IL Fake Government Pensions—It is Hard to Pre-Fund Them When The Multi-Million Dollar Benefits Are The Equivalent Of Winning the Lottery!

Editor’s comment: A reader sent us a quick note about articles being published across our state by Robert Rich who is the retired director of the Institute of Gov’t and Public Affairs at the U. of I.  If you want links, send a reply. His articles follow a tired theme—why doesn’t IL government simply “pre-fund” what is or will be due on the state government fake pensions? Trust us, that sounds simple but isn’t nearly that easy when you consider how lucrative the fake pensions are when the workers get to the money.

We assure you some of the fake pensions are simply “unfundable” if you understand the math. Pensions are supposed to be pre-funded with three sources—personal contributions, “matching” state contributions and investment income. When they are not pre-funded, the “pension clause” requires taxpayers to make up the balance after the sometimes retired worker leaves gov’t employ. So consider pre-funding one legislative fake pension. Just one. Please note the late Judy Baar Topinka was a legislator for six years. As a legislator, she made $60K a year and put in 10% of her salary to become vested in only four years of service. Her total personal contribution to the fake pension plan in six years was six years times $6K a year or $36K. When she passed, she was seventy years old. Her annual pension for six years of work was $150K or 2-1/2 times her highest legislative salary.

If Judy lived to 90 years of age, and lots of folks are living to ninety, she would have received $150K a year with annual 3% compounded increases over twenty more years. Her annual fake pension payout would have doubled to over $300K. In short, she would have received another $4-5M in that time. Try to get your head around Judy making a $36K contribution while working for us and then be entitled to literally millions and millions after working for us. As Mr. Rich’s articles validly point out, most of the “unfunded money” is “back-funded” and therefore comes from current tax dollars. The eventual payout to all Illinois legislators is the equivalent to winning the Lottery when you consider they can easily get millions for a four-year contribution less than $50,000.

To pre-fund or set aside what is needed to justify that much pension money for Judy Baar Topinka, the State of IL would have had to put about $500,000 a year or more into Judy’s pension fund every year she was working as a legislator. That is a LOT of pre-funding. There are 113 Illinois legislators and they change with great regularity. We assure you President Obama was in our General Assembly and is eligible for the same fake pension right now and can also receive millions over the rest of his life for his limited IL pension contributions.

We assure you this math is accurate. We are not annuitants, like Mr. Rich but we are sure for our State to pay out $4-5M in fake pension benefits over 20 years, you need to start with something like $3M or more. The current annual amounts being back-funded and annually paid to former Illinois legislators is over a quarter of a billion dollars a year and continuing to rise. In our view, our fake legislative pension program is designed to be “unfundable” and seems similar to legislators stealing our tax dollars to almost secretly get that much from us long after they have stopped working in the legislature. The judicial fake pension set-up is similarly shockingly unfundable and pays millions to each jurist after they have left the bench. As another egregious fake pension, City of Chicago school teachers only contribute 2% of their annual income to their pensions—in 20 years to become vested, they haven’t put one full year of salary into the “kitty.” That pension system is relatively “unfundable” costing Chicago taxpayers billions. Hard-working taxpayers hated welfare programs because folks got lots of your money for doing nothing. Why doesn’t that same ethic apply to fake government pensions?

Either way, while they are working for us, we don’t want to pay any legislator their annual salary and set aside literally millions in their four years of service to pre-fund these gigantic lifetime pensions. Illinois legislators aren’t full time employees—the legislature is in session about 50 days each year! Lots of them don’t have 100% attendance and show up when something important happens.

We vote Illinoisans consider Con-Con--an emergency constitutional convention and rewrite the whole thing. In making that recommendation, we would end the legislative fake pension program completely—there is no reason a part-time worker earns a generous lifetime pension with guaranteed annual increases after only four years of part-time service. And as a final note, we agree with Mr. Rich to the extent that we feel our IL Constitution should have a “taxpayer-protection” clause requiring any and all money used for a government pension should have to come from either the pensioners’ contributions or whatever the Government paid to match their money while they were employed by taxpayers.

Rant over—we appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Can the IL WC Community Help Dominic Secure His Forever Friend!

Editor’s comment: Please consider making a donation to Dominic’s GoFundMe account to aide in efforts to obtain a service dog. Dominic is an amazing 7-year-old non-verbal autistic boy who was recently diagnosed with seizures in January of 2015. It became very clear he needed to do more on a more personal level to help Dominic with his confidence and self-esteem. Research on service dogs followed and the family learned this was the right choice. This young man struggles on a daily basis to dress himself, bathe himself and almost daily suffers from self-injurious behavior because of his inability to be able to communicate. The family reached out to an organization called Argos Unlimited K9 who work with service dogs and they immediately told the family they would be able to help Dominic! Some of the things they will be able to assist Dominic with are

·         To help prevent him from wandering or running away by wearing a tether or barking to alert us of his whereabouts that are not safe.

·         To help with self-soothing during melt-downs. The tactile stimulation, whether by petting, hugging, or having the dog actually lie on the child, can help the child learn the skills of calming themselves.

·         Socialization including serving as a "social bridge", so as children and adults come over and ask about the dog, the child with autism is prompted to answer. The parent should not answer questions, but should refer all inquiries to the child. Thus with the dog, rather than having just the parent or teacher try to bring the child out of their own world, the entire community is talking to the child.)

·         4)The dog will wear Dominic’s communication device so that he will not have to travel to find it and he can communicate more easily.

·         5)Dominic has also show a great interest in water and the number 1 killer amongst children in children of the autistic community is accidental drowning. The service dog will be trained not only in water rescue but also to alert the family by barking if Dominic goes into the nearby lake in his subdivision or also gets into our bathtub without the family’s knowledge.

This is where you come in……the cost of a service dog is $12,000.00. Since starting their GoFundMe account the family has been blessed with donations from other family members, colleagues and friends and would like to keep the momentum going for Dominic. They would like to share with you a picture of their beloved Dominic and the service dog Jax who is in training now to hopefully come to the family within the next 18 months to help Dominic in his daily living. She will attend school with Dominic and be a lifelong companion to not only Dominic but the family. They want to thank you all should you consider making a donation!

The attorneys at KCB&A have already donated and may donate even more. Consider $10, $25, $50 or $100—give what you feel best. To contribute to this great cause or for more info, go to http://www.gofundme.com/lk29y8

5-11-15; Let's Have Our Administrators Move IL WC To The Middle and Not "Race" Anywhere; IL Fake Pensions Need Constitutional Congress for Reform; Shawn Biery, JD, MSCC on CMS Update and much more

Synopsis: IL Speaker Madigan Urges Our Legislators Not To “Race to the Bottom” in the Illinois Work Comp Arena.

Editor’s comment: In what some commentators view as a legislative publicity stunt, Illinois House Speaker Michael Madigan called a rare “Committee of the Whole” to allow testimony from folks all across the United States in what may have been an effort to slow or block proposed changes to our workers’ comp system by folks loyal to Governor Rauner. As much as Speaker Madigan argued Illinois shouldn’t “race to the bottom”  or get  too cheap when it comes to work comp reforms, the other side says they want Illinois to continue to work to the middle of all the United States to be competitive and business-friendly. Epitomizing the approach of Illinois labor, Democratic Jay Hoffman agreed everyone wants Illinois to be more competitive in the WC field but, in his words, “not on the backs of injured workers.” We hope the sore backs of injured workers also survive all the public relations fluff coming from our Capitol.

The Committee hearing featured a former Indiana work comp official who is now a Plaintiff/Petitioner attorney highlighting how several injured Illinois workers would have been less happily treated if injured in Indiana and subject to that state’s second-lowest-WC-costs-in-the-U.S. benefit structure. In response, Greg Baise, the current president of the IMA or Illinois Manufacturers’ Association asserted he didn’t want Illinois WC to turn into a copy of the Hoosier state’s WC program. Greg indicated “….what we’re looking for is a fairness in the system.” Baise felt the number one WC complaint his organization regularly hears is the growing cost of workers’ compensation in Illinois in relation to our sister states.

The Committee as a Whole testimony included lots of workers injured on the job in other states, including Oklahoma as well as Indiana. The testimony wasn’t specifically directed at the current proposed WC changes from the Rauner administration. Instead the focus of the endless and somewhat boring testimony was implicitly directed at keeping IL benefits moderate to higher than other states.

A group of employer associations indicated they don’t want to reduce workers comp benefits for injured workers, but they do want to root out what they asserted was work comp “fraud” by increasing the causation standard to insure an actual injury occurred at the workplace before any benefits were due. Just before the full-day joint House-Senate hearings, several Illinois business groups held a press conference applauding the focus on reforming workers’ comp in Illinois. However, many were critical the legislative hearings were too one-sided.

Stephen Schneider, the American Insurance Association (AIA) Midwest region vice president testified on the effects of the 2011 workers’ compensation reforms and urged further reforms might be needed.  Mr. Schneider represented a coalition of insurers which includes AIA, the Illinois Insurance Association (IIA) and the Property Casualty Insurers Association of America (PCI). His testimony outlined a 2014 report by the Illinois Department of Insurance which ranked Illinois as the most competitive state in the country for workers’ compensation insurance. The study indicated there are 333 insurers authorized to compete for WC insurance business. Schneider also indicated further reforms may improve the system for both employers and employees. He feels additional WC reforms should include addressing abuses associated with the practice of dispensing prescription drugs by doctors or in non-pharmacy settings. He also indicated there is a need for a renewed examination of the present IL WC medical fee schedule, suggesting as an alternative the use of a Medicare rate-based schedule, as many other states use.

Our vote on all of it is stop worrying about the legislative branch of government and focus on WC administration and our administrators. We feel the IL WC system needs to allow the current IWCC Arbitrators and Commissioners to lead our  troubled state and its WC claims to rank in the mid-teens or twenties in the Oregon WC Insurance Premium report that will be posted next year. Solid professionals like Josh Luskin, Mike Brennan, Kevin Lamborn and Ruth White are knowledgeable and moderate WC veterans who will require “real” accidents and disability/impairment to be demonstrably present before they consider significant awards. They can’t do so unless and until we give them the chance to show us their stuff. As we told you last week, we don’t need new legislation, we need better thinkers to implement the IL WC Act as written.

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

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Synopsis: Couldn’t IL House Speaker Madigan Paid for Coffee at Starbucks® or Panera® and Informally Learned How the IL Supreme Court Would Rule on the Fake Pensions Speaker Madigan Helped Create and Now Can’t Change?

Editor’s comment: Speaker Mike Madigan has been around the IL General Assembly for almost half a century. He is also the Chairman of the Democratic Party of Illinois. He has been a member of the Illinois House since 1971. If you do the math, he has been around for everything financially bad that has happened in our state government for 44 years and still counting. He is an honest man and strong personality but you will never see or hear him take credit or blame for anything. If you think we are overstating this and being unfair, we ask—how do you justify being the long-time and dominant leader of a state government that is over $100,000,000,000 in debt?

The silly thing that just happened is a bill passed in 2013 by Speaker Madigan to “reform” Illinois’ fake pensions was just knocked out by a unanimous IL Supreme Court. The august members of our highest Court affirmed the IL Constitution’s “Pension Clause” that we call the “stick-it-to-the-taxpayers” clause. Basically, if the legislature, in Madigan’s wisdom, wants to give billions to state workers when they retire, taxpayers are stuck with that decision and can’t change it without a change to the IL Constitution.

You might recall the IL Supreme Court recently ruled the lifetime healthcare benefits paid to any IL state government worker who is vested in their fake pension cannot be changed by the legislature. Retired IL State workers don’t have to pay a nickel for full and lifetime group health coverage; only you and I do. The legal fees for fighting the bill to try to change the lifetime cost of healthcare for IL government workers is $1.5M to the attorneys for the government workers. Guess who has to pay the legal bills on both sides? You and I do.

Despite watching his daughter completely lose that debate, in 2013, Speaker Madigan supported and passed a bill to slightly reform IL government pensions. Lisa Madigan, our plucky IL Attorney General fought to have both the earlier healthcare reforms and the current pension “reforms” stick and was basically hooted out of court on both occasions. The combined cost of Plaintiff legal fees in the dual losses for IL taxpayers is going to be around $3M. Ouch.

One of the many problems with this morass is IL Democratic Party Chair Mike Madigan has met, vetted and clearly knows the Democratic Justices on the IL Supreme Court. We ask the rhetorical question—couldn’t he have sprung for coffee to ask them the informal question about how they felt about the “Pension Clause” and what the chances of getting the fake pensions reigned in? Did we really have to fight this through the Circuit and now Supreme Court and blow $3M of the taxpayers’ dough to summarily lose?

IL Legislative Fake Pensions Can’t Truly be “Funded”—Can We Dump Them?

For everyone who is interested enough to read it, let’s look at just one fake pension that you can’t and won’t ever make sense of—legislative pensions. Right now, IL legislators make about $80K a year. Their pension contribution for a married legislator is about 10% of that income or $8K a year. They only have to be a legislator for 4 years, yes, 4 years to be fully vested. That means they only have to put in $32K in the fake pension program to be fully vested. When they reach the right age, their pensions start at 85% of the highest pay or $68K a year. You may note they get their entire contribution back in six months of retiring. They also get 3% compounded increases each year guaranteeing within four or five years, they are getting as much as they made working as an IL legislator or more. After something like 20 years, their pensions will be double.

How about we pay legislators when they legislate and stop paying them when they stop working for us? Does that seem too hard to understand? Can we consider a constitutional amendment to protect taxpayers so we only have to pay government workers when they are working in government and not the rest of their lives? What rhymes with welfare?

When you hear anyone complain IL State Government doesn’t pay enough to contribute to such pensions, please note such pensions are almost unfundable—by that we mean, our state government would have to pay their legislative salaries at $80K a year and probably add $400-500K a year for the four years to have enough of a kitty to pay them the amount they would be due on an annual basis following retirement. The math on those amounts cannot be challenged—it is immutable. We don’t feel Illinoisans understand how much these pensions truly cost. The current annual cost of funding these “unfunded” pensions is around a quarter of a billion dollars and continues to increase. We assert no state pays that much to its legislators and Illinois shouldn’t either.

In our view, all IL state fake government pensions need to be completely retooled. In our further view, as the IL Supreme Court has found the “Pension Clause” to be the irresistible force or the immovable object, the entire IL Constitution has to be reconsidered on the issue of fake pensions. We appreciate your thoughts and comments.

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Synopsis: CMS Appeal Rights Webinar Breakdown—What We Learned With Regard to Medicare Second Payer Appeals.  Analysis by Shawn R. Biery, J.D., MSCC.

Editor’s comment: As reported several weeks ago, the Centers for Medicare & Medicaid Services (CMS) issued a final rule implementing certain provisions of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART ACT). With this final rule, a formal appeals process is established for applicable plans (liability insurance—including self-insurance, no-fault insurance, and workers’ compensation laws or plans) in situations where Medicare Secondary Payer (MSP) recovery is sought directly from an applicable plan. TO REITERATE—the rule is effective now and applies to demand letters issued on or after April 28, 2015.  

Again recapping, the appeals process established in the final rule parallels the existing process for claims-based beneficiary and other appeals for both non-MSP and MSP, and will be used for appeals involving both pre-payment denials as well as overpayments.

PROVISIONS OF THE FINAL RULE: 

The formal appeals process applies to MSP recovery demand letters issued directly to applicable plans as the identified debtor on or after April 28, 2015. Receipt of a courtesy copy (“cc”) of a MSP recovery demand letter by an applicable plan does not necessarily mean the applicable plan has the ability to file an appeal.

There will be a formal multilevel appeal process for applicable plans where MSP recovery is pursued directly from the applicable plan. The MSP recovery demand letter and any subsequent appeal determination will specify any timeframe or other requirement to proceed to the next level of appeal. There are six steps in the new appeals process and at each level you access, there will be a letter of instruction on procedure to move to the next step if there has not been some level of satisfaction with the result of the prior level of appeal.

The appeal process will be formally applied to the “Demand Letter”, and is not applicable to the initial determination or conditional payment letter because that letter is technically not a demand letter. We correctly noted the six levels in our prior update as:  

Ø  An “initial determination” (the MSP recovery demand letter),

Ø  A “redetermination” by the contractor issuing the recovery demand,

Ø  A “reconsideration” by a Qualified Independent Contractor,

Ø  A hearing by an administrative law judge (ALJ),

Ø  A review by the Departmental Appeals Board's Medicare Appeals Council, and

Ø  Judicial review.

Some other important details covered in the call include:

Ø  Monthly interest will accrue—so we recommend you issue payment for any undisputed amounts so you avoid interest being assessed (assuming you prevail on the appeal of the disputed amounts). Interest would accrue on the amounts being appealed if you do not prevail.

Ø  You need to make a swift decision on whether you wish to appeal—the timing starts rapidly and you are out of luck 120 days from initial determination. If you fail to respond in the time frames given, you lost your right to appeal.

Ø  You must have Proof of Representation if you are representing the plan and it must be current within a year of the appeal. The POR must be submitted with the appeal if not submitted prior to the appeal.

Ø  You must also submit a cover letter and specify the exact issues you are appealing such as relatedness of services, amounts alleged, verification of payments already paid the provider, etc.

Ø  Causation is not CMS’ concern so they don’t care if there is not a determination of liability in a disputed settlement. We interpret that to mean that if you dispute the conditional payments in a case you settled on a disputed basis, you should expect to be liable for the conditional payments because “causation is not CMS' concern” and they only want their money back.

It was also highlighted the applicable plan is the only entity with appeal rights/party status when Medicare pursues recovery directly from the applicable plan. The beneficiary is not a party to applicable plan appeals, however CMS is required to provide notice to the beneficiary of the applicable plan’s intent to appeal and will provide such notice if the applicable plan files a request for a redetermination.

It remains the applicable plan may appeal:

Ø  the amount of the debt and/or 

Ø  the existence of the debt. 

The regulation does not permit applicable plans to appeal the issue of who is the responsible party/correct debtor. Requests for appeal on the basis the applicable plan is not the correct debtor will therefore be dismissed. Medicare’s decision regarding who or what entity it is pursuing recovery from is not subject to appeal.

While the process was fleshed out somewhat, we still believe the process has pitfalls and gaps and how well the appeals process will work is still to be determined. We will follow the process closely and identify those cases in our office in which an appeal may be appropriate and test the process aggressively. If you have any cases which may have the potential, KCB&A has several MSCC certified attorneys to consult with. This article was researched and written by Shawn R. Biery JD, MSCC who can be reached at sbiery@keefe-law.com with any comment or question.

5-4-15; The World of IL Work Comp Looks to Springfield for WC Change; Dan Boddicker, JD on New EEOC Conciliation Standard; New Research on Value of PT versus Back Surgery--Consider Athletico and more

Synopsis: The IL General Assembly “Committee as a Whole” Will Convene Tomorrow to Try to Set Illinois WC Policy for What May Be the Next Seven Years.

Editor’s comment: Governor Bruce Rauner was sworn in a little over 100 days ago. He faced lots of challenges since taking over one of the worst-run state governments in the entire country and maybe the world. He took on the task of trying to make Illinois government more business-friendly. One of the issues he put high on his calendar is additional reforms to the IL WC system. As we expect Governor Rauner to be around for seven more years or until 2022; these legislative changes may be present for his expected two terms in office.

In response, IL House Speaker Mike Madigan is calling a mildly unusual legislative hearing named the “Committee as a Whole” to convene the entire IL General Assembly. They will take testimony and consider the legislative changes proposed by the Governor’s staff. We are told the hearings will be available for you to watch or listen to online—if you have strong interest and want the link to that website, send a reply.

There is no question our IL WC system became an outlier in relation to our surrounding states under former and now disgraced Governor Blagojevich. To win an early primary election, Rod Blagojevich promised complete control of the good ole Industrial Commission to Plaintiff-Petitioner lawyers from southern Illinois. When that group got power, they

·         Changed the name of the place from the IL Industrial Commission to the IL Workers’ Compensation Commission;

·         Retooled funding of the place to create a special insurance premium levy on IL business only;

·         Brought in lots of Plaintiff-Petitioner lawyers as hearing officers to greatly liberalize the system;

·         Provided broad WC coverage theories to encompass questionable conditions/claims and

·         Started awarding dramatically higher WC benefits.

When Governor Quinn got into office, he started to slowly change things for the better. The 2011 Amendments to the IL WC Act were enacted to identify and directly counter many of what were considered IL WC abuses. IL Senate President John Cullerton was quoted as saying lots of government programs, including workers’ comp, were getting a “haircut.” Supporters of the 2011 Amendments hoped IL employers and governments would save at least $500 million a year after strong reduction of medical fees for doctors/hospitals who treat injured employees were scaled back and other significant changes were enacted. The debate over the savings rages on and IL dropped from the third-highest state to the seventh-highest state in the every-other-year Oregon WC Premium rankings.

Four years later, former Gov. Quinn is enjoying his hefty state pension and Governor Bruce Rauner is in for what could be as long as seven more years of service. In the WC field, major business groups and municipalities complain they've seen just a fraction of the promised savings from the 2011 Amendments. Rauner hopes to

·         Toughen “causation” or standards workers must meet to prove their injury is due to their job,

·         Limit the ability of employees to claim an injury while doing literally anything when “traveling” for work,

·         Dramatically reduce reimbursement rates for doctors, hospitals and pharmacies that treat injured workers; and

·         Legislatively grant arbitrators the ability to use American Medical Association impairment ratings guidelines as the sole factor in determining how much a seriously injured worker is paid.

Tomorrow, House Speaker Michael Madigan will convene the rare “Committee of the Whole” meeting to allow all 118 legislative members to consider the state of our State’s WC system. Governor Rauner has his own group of lawmakers who will be sitting in to examine the topic. The defense team at KCB&A will be watching, listening and reporting what happens for our readers.

Here are our thoughts on the four issues above:

·         On causation, we don’t think you need legislation; you need common sense. The new IWCC administration headed by Chair Joann Fratianni-Atsaves is certain to reign in the silly “causation” rulings of the past. Please let them do their jobs.

·         On the traveling employee concept, we again feel legislation is going to be challenging and you still have to actually enforce it—a “traveling employee” on the road is always “in the course of employment.” The question is whether the injury “arises out of employment”—that language is already in the IL WC Act. We don’t feel the typical traveling employee should receive expanded WC coverage if they decide to go to a bar and watch a ball game and fall off a bar stool to get injured in the bar. Such injuries don’t arise out of their work. We need hearing officers to deny such claims or get better hearing officers. We recently reported the Appellate Court, IWCC Division ruling in Nee v. IWCC where the majority appears to assert walking on a normal city street in the city where you work in makes you a “traveling employee” and, when you have that status, tripping over a normal city curb is supposedly compensable—we feel this runs directly contradictory to the last IL Supreme Court ruling on the same facts. We also don’t think walking on a city street has anything to do with traditional definitions of traveling employee status.

·         On cutting payments to doctors/hospitals, we feel WC reimbursements should match and not be less than what major non-WC medical bill payers like Blue Cross/Blue Shield pay for the same care. The State of Hawai’i made their WC medical reimbursements lower than local group providers and chaos resulted. You can only tweak medical reimbursements so much before docs and hospitals tweak back.

·         On implementing impairment ratings as a sole factor in determining PPD value, it will certainly save business/ insurance companies money with potentially drastically lower awards but may also cause lots of consternation and possibly unexpected issues that legislators may not anticipate. We offer this comparison/example:

o    Two people enter a building. One is a friendly visitor, say a college intern who wants to see the company. The other is a worker who is in the course of employ.

o    Both people fall down on a slippery substance left in the lobby by company cleaners who know it is there and took a break before marking the area as dangerous.

o    The college intern and the worker both fall and badly break the same arm.

o    The intern sues for negligence and gets an award of $500K from the premises insurance carrier.

o    The injured worker brings an IL WC claim and gets a rating of 8% of the arm and receives $5K.

o    Please note the intention of the WC system is to provide swift, sure and fair benefits for workers who can’t sue in the courts.

o    This comparison exemplifies our concern about this proposed change to IL WC benefits. A strict interpretation of AMA ratings equating to PPD value may result in nominal compensation for serious injuries. The Arbitrator may have no room to “judge” the case and reach a reasonable middle-ground.

o    While there are constant comparisons between the IL WC system and the IN WC system, can we also compare Illinois to Wisconsin, Michigan and Iowa?—they are clearly included in our competition.

o    We don’t want the IL WC system to award giant settlements or any WC benefits for injuries/conditions unrelated to work.

o    Governor Rauner is quoted as saying he wants a WC system to be “competitive, reasonable and balanced.”

o    We don’t feel impairment ratings are uniformly reasonable and balanced—they are simply cheap.

o    Please also remember if you are going to make impairment ratings the sole calculus for permanency partial disability evaluation, we are certain we are going to have to fight lots more wage loss differential or “odd lot” T&P claims. Those exposures are dramatically higher and more expensive to fight. PPD values need to stay somewhat fair and comparable on serious injuries to avoid a shift by the Plaintiff-Petitioner bar in their focus on seeking reasonable benefits.

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

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Synopsis: U.S. Supreme Court to EEOC—The Courts will be Watching Your Conciliation Efforts! Analysis by Daniel J. Boddicker, J.D.

Editor’s comment: A unanimous SCOTUS resolved a dispute between the Federal Appellate Circuits by holding Title VII permits limited judicial review of whether the EEOC has fulfilled its duty to attempt conciliation prior to suit. We consider this a win for U.S. business as it may avoid your company being sued by the EEOC with their effectively unlimited litigation budget.

Before suing an employer for discrimination, the Equal Employment Opportunity Commission (EEOC) must attempt to resolve  perceived unlawful workplace practices through informal methods of conciliation. In Mach Mining, LLC v. Equal Employment Opportunity Commission, SCOTUS held a court may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit. The Supreme Court reasoned the scope of that review is narrow and set out a standard for future court’s review of conciliation efforts. This decision gives some clarity to a historically confusing section in Title VII.

Title VII of the Civil Rights Act of 1964, 78 Stat. 241, 42 U.S.C. § 2000e et seq., sets out a multi-step procedure wherein the EEOC enforces the statute’s prohibition on employment discrimination. If the EEOC finds reasonable cause an allegation has merit it must “endeavor to eliminate alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.” Said language is mandatory and the duty it imposes serves as a necessary precondition to filing a lawsuit pursuant to Title VII. Nonetheless, the EEOC holds the ultimate decision whether to accept a settlement or instead bring a lawsuit. Only if its attempt to conciliate has first failed may the EEOC file suit against an employer. 

In Mach Mining, a woman filed a charge with the EEOC claiming Mach Mining, LLC, refused to hire her as a coal miner because of her sex. The EEOC investigated the allegation and found reasonable cause to believe Mach Mining discriminated against the complainant, along with a class of women who had similarly applied for mining jobs. In a letter announcing its determination, the EEOC invited both the company and the complainant to participate in “informal methods” of dispute resolution, promising a Commission representative would soon contact them to begin the conciliation process. Approximately one year later the EEOC sent a second letter stating such conciliation efforts as were required by law occurred and were unsuccessful and any further efforts would be futile.

The EEOC then sued Mach Mining in federal district court alleging sex discrimination in hiring. The complaint alleged all conditions precedent to the institution of this lawsuit—including, an attempt to end the challenged practice through conciliation—were fulfilled. In response, Mach Mining disputed that allegation and asserted via an affirmative defense the EEOC failed to engage in good faith conciliation efforts prior to filing suit. The EEOC moved for partial summary judgment on that issue, which was denied by the District Judge. Thereafter, the EEOC appealed to the Seventh Circuit Appellate Court seeking reversal. Upon de novo review, the Appellate Court reversed, holding the statutory directive to attempt conciliation is not subject to judicial review. Given the obvious split amongst Appellate Circuits, SCOTUS granted certiorari to address whether and to what extent such an attempt to conciliate is subject to judicial review. Ultimately, SCOTUS vacated the judgment of the Seventh Circuit and remanded the case for further proceedings consistent with the opinion.

Justice Kagan (writing for a unanimous court) explained Title VII pronounces certain concrete standards pertaining to what the EEOC’s efforts at conciliation must entail. The methods necessarily involve communication between parties, including the exchange of information and views. They involve consultation and/or discussion, an attempt to reconcile different positions, and a means of argument, reasoning, or entreaty. SCOTUS held the EEOC must tell the employer about the claim, what practice has harmed which person or class, and must provide the employer with an opportunity to discuss the matter in an effort to achieve voluntary compliance. If the EEOC does not take said actions, it has not satisfied Title VII’s requirement to attempt conciliation.

In discussing the proper scope of judicial review of the EEOC’s conciliation activities, SCOTUS retained a narrow scope. It held the appropriate scope of review enforces the statute’s requirements, that the EEOC afford the employer a chance to discuss and rectify a specified discriminatory practice, but goes no further.  

In her opinion, Justice Kagan discussed the party’s positions on scope of judicial review and chose to espouse her own standard rather than the obviously one-sided standards proposed by the EEOC and Mach Mining respectively. SCOTUS stated contrary to the EEOC’s position, its two letters do not themselves fulfill the conciliation condition: The first declared only that the process will start soon, and the second only that it has concluded. SCOTUS stated to treat the letters as sufficient is simply to accept the EEOC’s unverified word that it complied with the law. The point of judicial review is instead to verify the EEOC’s word, that is, to determine the EEOC actually—and not just purportedly—attempted to conciliate a discrimination charge.

SCOTUS refused to accept Mach Mining’s suggestion for a review based on a standard set out in the National Labor Relations Act (NLRA), i.e. whether the EEOC negotiated in good faith over a discrimination claim. SCOTUS noted Mach Mining’s proposed code of conduct conflicts with the latitude Title VII gives the EEOC to pursue voluntary compliance with the statute. It noted the EEOC need only endeavor to conciliate a claim, without devoting a set amount of time or resources to that project. Further, the attempt need not involve any specific steps or measures; rather, the EEOC may use whatever informal means of conference, conciliation, and persuasion it deems appropriate. The Court stated Mach Mining’s proposed review would also flout Title VII’s protection of the confidentiality of conciliation efforts. SCOTUS declared to accept Mach Mining’s proposed standard would not enforce the law Congress wrote, but would impose extra procedural requirements.

SCOTUS explained the proper scope of judicial review matches the terms of Title VII’s conciliation provision. The EEOC must communicate in some way about an “alleged unlawful employment practice in an endeavor to achieve an employer’s voluntary compliance.” In other words, the EEOC must inform the employer about the specific allegation, as the Commission typically does in a letter announcing its determination of reasonable cause. Such notice properly describes both what the employer has done and which employees (or what class of employees) have suffered as a result. And the EEOC must try to engage the employer in some form of discussion (whether written or oral), so as to give the employer an opportunity to remedy the allegedly discriminatory practice. Judicial review of those requirements ensures the EEOC complied with the statute. Simultaneously, the discretion allows the EEOC to exercise all the expansive discretion Title VII gives it to decide how to conduct conciliation efforts and when to end them. A court reviews whether the EEOC attempted to confer about a charge, and not to what happened (i.e., statements made or positions taken) during those discussions.

SCOTUS explained a sworn affidavit from the EEOC stating it has undertaken the aforementioned conciliation steps will suffice to overcome any affirmative defense for failure to exhaust administrative remedies. If, however, the employer provides credible evidence of its own, in the form of an affidavit or otherwise, indicating the EEOC did not provide the requisite information about the charge or attempt to engage in a discussion about conciliating the claim, a jury will decide. Should the court find in favor of the employer, the appropriate remedy is to order the EEOC to undertake conciliation efforts

This article was researched and written by Daniel J. Boddicker, J.D. Dan can be reached for questions, concerns, or discussion at dboddicker@keefe-law.com.

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Synopsis: New Study Confirms Physical Therapy Effects Equal to Surgery for Treating Spinal Stenosis Symptoms—Consider Athletico for Such Care.

Editor’s comment: A study reported last week indicates physical therapy for spinal stenosis is as effective as surgery and should be fully considered as a first-choice treatment option. This is the first such study to directly compare a single, evidence-based physical therapy regimen with decompression surgery among patients who agreed to be randomly assigned to either approach. The study focused on self-reported physical function among 169 participants diagnosed with lumbar spinal stenosis after 2 years, but it also tracked function measurements along the way--at baseline, 10 weeks, 6 months, and 12 months. Researchers found not only were 2-year effects similar for the 2 groups (87 who began with surgery and 82 who started with physical therapy), the increase in function followed similar trajectories from baseline on.

This important research was conducted between 2000-2007, and limited to patients 50 years and older who had no previous lumbar spine stenosis and had no additional conditions including dementia, vascular disease, metastatic cancer or a recent history of heart attack. The study, which appears in the Annals of Internal Medicine (abstract only available—click the link), was led by Anthony Delitto, PT, PhD, FAPTA, with coauthors including Sara R. Pilva, PT, PhD, FAAOMP, OCS, Julie M. Fritz, PT, PhD, FAPTA, and Deborah A. Josbeno, PT, PhD, NCS. The findings have been reported in Reuters, the Pittsburgh Post-Gazette, Medpage Today and other outlets. According to an editorial that accompanies the article (sample), what makes this research important is it restricted the nonsurgical approach to a single physical therapy regimen and participants—all of whom were prequalified for surgery—consented to a randomized treatment approach. Previous studies focused on surgical vs. (mostly unspecified) "nonsurgical" approaches, and some allowed patients to self-select their treatment groups.

From evaluation to discharge at Athletico, their physical therapists can help back pain in many ways and below are a few examples of how.

1.         During the evaluation the worker’s past medical history will be reviewed so any prior injuries, surgeries or medical conditions that could affect spinal health are uncovered and can be addressed if appropriate or necessary throughout ongoing treatment.

2.         The injured worker’s posture will be assessed and reviewed with a progression of corrective strategies initiated throughout treatment if deficits exist.

3.         The licensed physical therapist will want to know more about their patient’s occupation, daily household activities, hobbies and recreational sports so the worker can be educated in safe spine positioning, body mechanics and even ergonomics to help decrease any possible repetitive stress that may exist.

4.         A strength assessment will be performed for the worker’s core muscles, scapular stabilizers and hips/lower extremities as needed with a progression of exercises given throughout the course of treatment to improve strength, stability and motor control.

5.         Joint range of motion and tissue flexibility will be evaluated with education and performance of stretching techniques as well as manual work per the physical therapists’ discretion.

6.         Many therapists have advanced training to  assess spinal joint range of motion and restrictions and through the application of manual therapy techniques can restore motion at spinal segments.

7.         Also muscle energy techniques may be administered to also normalize joint integrity. 

8.         To help manage pain, the Athletico therapist may utilize a variety of different therapeutic techniques to ease discomfort such as heat, ice, ultrasound, TENS or traction.

9.         Pain can cause stress and uncertainty so many times a physical therapist helps most just by listening and encouraging through difficult times.

To learn more about this new study or to schedule care at one of the 330 Athletico locations, go to their website at http://www.athletico.com/our-company/the-athletico-story/ or call Mike Trombetta, their Director of Industrial Rehabilitation at 630-575-6209.