6-15-15; Warning--Radioactive WC Legislation Pending Before IL Senate; Liberty Mutual May Prove WC Profitability is Over-Stated; One More WC Bill You Need to Know Of and more

Synopsis: Warning--Radioactive WC Legislation Pending Before IL Senate!

Editor’s comment: We aren’t reporting actual radioactivity, folks. Our concerns for our readers and IL Business are with IL House Floor Amendments 5, 6, and 7 to HB 1287 that are being presented to the IL Senate as “WC reforms” when they are certain to increase the cost of WC in this state. We note Senate President John Cullerton is sponsoring this legislative morass and we hope this solid leader drops his sponsorship and sends this whole concept to the nearest shredder.

IL House Floor Amendment 5 Is Certain to Cause IL WC Benefits to Skyrocket

House Floor Amendment 5 provides where an employee is required to travel away from his or her employer's premises in order to perform his or her job, the traveling employee's accidental injuries arise out of and in the course of his or her employment when the conduct in which he or she was engaged at the time of his or her injury is reasonable and when that conduct might have been anticipated or foreseen by the employer. In reasoned legal view, this is an enormous departure from the traditional concept of what a “traveling employee” might be and greatly expands workers comp coverage to just about anything a worker does when they are “in movement” or traveling. This language basically reverses the concepts turned aside/discarded by our IL Supreme Court in the ruling drafted by Chief Justice Rita Garman in Venture-Newberg-Perini Stone & Webster v. IWCC issued on December 19, 2013. We told our readers then and we restate right now, workers’ comp costs in this state will skyrocket to expand the “traveling employee” concept in this fashion. We again point out the term “traveling employee” isn’t in the IL WC Act and doesn’t have to be—this new and unprecedented legislative definition doesn’t help at all. If we simply follow the existing law about “arising out of” and “in the course of” employ, we have the needed limitations with arbitrators, commissioners and jurists who use the “English language” interpretations of those two phrases.

Please remember the traditional definition of a “traveling employee” was someone who is supposedly engaged in foreign travel. Such a worker faces unusual dangers and risks—there are language differences, varying kinds of currency, food that may cause lots of diseases or problems you wouldn’t face in your home state and other increased risks. In our view, the idea of expanding WC coverage for someone in a totally foreign and dangerous environment makes some sense. That said, “traveling employees” aren’t folks who are walking around their home town, like the city inspector in the IL WC Appellate Court ruling in Nee v. IWCC. The bordering-on-malpractice decision made by the defense attorney in that claim is they stipulated the worker was a “traveler” when he was in a totally familiar and risk-neutral environment. They made the mistake the IL House and maybe Senate could make if we enact this disastrous new legislation.

What is wrong with Amendment 5? Well, it defines a “traveler” as someone “required to travel away from his or her employer’s premises.” What in tarnation does that mean? What is a “premises?” Doesn’t that mean all truckers, bus drivers, construction workers, staffing employees, government workers of all sorts and anyone going to get coffee at Starbucks for their boss would be “travelers?” And what is covered for such workers—any “reasonable” activity leading to injury or illness that might be foreseen by the employer? Isn’t that just about anything short of playing with gasoline and matches?

IL House Floor Amendment 6 is almost as bad as 5—We Predict Passage Will Cause IL WC Claims and Resulting Contribution Litigation to Erupt

It greatly expands coverage to allow lots of employers to be brought into litigation and have to defend themselves with medical-legal opinions and more depositions. It sets forth provisions providing if an award is made for benefits in connection with repetitive or cumulative injury resulting from employment with more than one employer, the employer liable for award or its insurer is entitled to contribution or reimbursement from each of the employee's prior employers or their insurers for the prior employer's pro rata share of responsibility. This amendment provides after the Illinois Workers' Compensation Commission makes an award for benefits in connection with repetitive or cumulative injury, the employer liable under the award or its insurer may institute proceedings before the Commission for the purpose of determining the right of contribution or reimbursement. This collateral and post-award proceeding shall not delay, diminish, restrict, or alter in any way the benefits to which the employee or his or her dependents are entitled, but shall be limited to a determination of the respective contribution or reimbursement rights and the responsibilities of all the employers joined in the proceeding.

Some employers might innocently like the idea of contribution in repetitive trauma claims—we caution our readers and all observers it isn’t a solid idea. Why? Well, right now, one employer owes all of an IL work comp claim or none of it. If you allow for cross-claims for contribution, claimants are going to sue everyone they have worked for over the years. No single employer will have to lead the fight, insuring confusion. The statutory language and administrative outcome is going to insure WC benefits will be paid and rapidly due to the worker—thereafter all the carriers for all the employers are going to get to fight out who owes what and why. Trust us, you don’t want lots more “repetitive working” claims where it is almost impossible to avoid some tiny wedge of liability to then have to fight it out or settle with everyone who had the misfortune to hire the man or woman in the past. If you don’t see this as a legislative and administrative disaster—please let us know your thoughts as to why.

IL House Floor Amendment 7 Creates Another “Do-Nothing” Panel or “Task Force” That May Never Meet!

This Floor Amendment indicates the IL Department of Insurance shall report annually on the state of self-insurance for workers' compensation in Illinois and outlines the contents of their expected report. This Floor Amendment also creates the Workers' Compensation Premium Rates Task Force. The legislation provides for the membership and duties of the Task Force and requires the Task Force to issue its recommendations by December 31, 2015.

Yucch. We hate legislation that creates dopey “task forces.” To best demonstrate why we hate them, we remind everyone of the 2011 Amendments to the IL WC Act where they created advisory body or “task force” known as the IL State Workers’ Compensation Program Advisory Board designed to review, assess and make recommendations to improve the State workers’ compensation program. The Governor was to appoint one member of the Board with the Speaker Of The House and Minority Leader to appoint other members. The members of this board were to serve three year terms.

What happened after this was completed was about one year of fighting over who would make the Board and then…. Nothing. Absolutely nothing. We don’t think the IL SWCPAB ever met, even once. If they did, they didn’t do anything anyone is aware of. IL State WC claims remain high and costs are even higher. They still need someone to force IL State government to implement obvious and simple cost-saving concepts like bringing injured workers back to light work. When we consider what a failure the SWCPAB was, we predict the same sort of ennui and lack of action is going to happen with the IL WCPRTF. Such silliness sounds good and gives legislators grist for the campaign trail but in real-time, it is meaningless. We hope and pray this House Floor Amendment doesn’t pass either.

In summary, call your senator or state rep and ask them to put the kibosh on all this silliness. We assume the party-in-power might have floated these amendments out there to cause confusion and a crazy-counter-point to Governor Rauner’s proposals. We truly don’t want WC “de-form” legislation that would cause immediate consternation and confusion in the business community and lead to even more drainage across state lines.

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

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Synopsis: If Work Comp Insurance is Wildly Profitable, Why is Liberty Mutual Making More Dough with Less Work Comp Insurance?

Editor’s comment: A familiar whine of the IL Trial Lawyers Ass’n and their supporters is the proposition that workers’ comp insurance is a definite money-maker. Both National Public Radio and ProPublica also take up the same mantra, asserting every WC insurer is rolling in mountains of cash. We are sure there are over 300 insurance carriers writing WC insurance in this state—that may be the reason for the minimal margins.

Joe Paduda who is a long-time industry observer and blogger rebuts that suggestion. In his blog, Managed Care Matters, he strongly asserts, over the past decade or so, work comp insurance is barely a breakeven proposition.

Liberty Mutual Holding Co. followed through on its announced plan to reduce its workers compensation exposures and reported lower comp premiums for 2014, which one expert said raises the question of whether the insurer plans to completely leave the work comp market altogether. Liberty Mutual reported its voluntary workers comp net written premiums declined 14% last year to $2.15 billion.

The Boston Globe reports Liberty Mutual, who used to be the U.S. WC industry leader has greatly cut back its work comp participation and exposure over the last few years. In doing so, they are now ramping up personal lines and other insurance business lines while reducing their WC premiums by over a third. Liberty has dropped to now be the 4th largest underwriter of WC and they are paying Berkshire Hathaway $3 billion to take over a big chunk of its exposure for legacy WC and some environmental claims.

It appears clear the decisions above have dramatically increased their corporate profitability. The math indicates Liberty Mutual’s overall profitability increased from $284 million in 2011 to $1.7 billion last year. This clearly means the national work comp insurer that controlled the U.S. WC industry for decades has moved away to seek other opportunities. We agree with Mr. Paduda, the reason is basic, work comp insurance simply isn’t as profitable as many claim.

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

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Synopsis: One More Important Piece of Potential IL WC Reform Legislation You Need to Know About.

Editor’s comment: A bill requiring small to mid-sized IL WC insurers to collect collateral from employers with large-deductible workers' compensation policies was cleared by the IL Senate and has also been passed by the House. It now awaits Governor Rauner’s signature to become law. Our sources indicate this may be model legislation for the 30-something states that allow high-deductible WC policies.

Senate Bill 1805 sponsored by Sen. William R. Haine, D-Alton, would require any workers' comp insurer with less than an "A-" rating from A.M. Best Co. and less than $200 million in group surplus to require collateral from policyholders who purchase a policy with a deductible of $100,000 or more. The collateral could be posted in cash or securities, such as a bond or irrevocable letter of credit, held in trust by a third party.

The bill would require insurers to limit the size of a WC policyholder's obligations under a large-deductible agreement to 20% of the total net worth of the policyholder at each policy inception. This new bill would also give the state director of insurance authority to prohibit insurers that are determined to be in a financially hazardous condition from issuing or renewing large-deductible policies. The new bill would take effect July 1 if signed into law by Gov. Bruce Rauner.

Large-deductible workers’ comp policies have proven to be a headache for U.S. WC insurance regulators. The collapse of Park Avenue Co. and affiliate Providence Property & Casualty Co. -- blamed in part on the failure of policyholders to pay their deductibles -- have left insurance guaranty associations around the U.S. with more than $100 million in liabilities.

Problems Associated with Using a High Deductible WC Insurance Plan

• The shock of having to pay the insurance company the deductible – some employers go into deductible plans with the idea they will never incur a claim so they will never have to fund the deductible. This expectation creates lots of controversy. Small employers are enticed by the idea of significant premium savings. However, in reality, an employer with a guaranteed WC insurance premium of $20,000 might sign up for a $5,000 deductible plan, save $1,000 in up-front premium but then be charged with repaying the insurance carrier $5000 when the first WC claim occurs.

• Collection of the Deductible – Most states include a provision which kicks in when an employer does not pay the required deductible then the insurance company can quickly cancel the employers WC insurance policy for non-payment of premium. This now exposes an IL employer to civil and criminal liability.

• Payment of claims – Claims are handled by the insurance company claim department. There is the potential for bona fide WC claims not to be reported or disagreement as to how claims are accepted, processed and paid.

Now, if this new law is signed by Governor Rauner, IL employers will have to post collateral to even get a high-deductible policy in place. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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6-8-15; Can We Stop Worrying about Work Comp and Tackle the 800lb Gorilla?; IL Appellate Court Re-Opens and Re-Settles a WC Claim; IWCC Arb. Survey and more

Synopsis: Gov. Rauner “Verging” Illinois--How About Stop Worrying about Work Comp and Going After the 800lb. Gorilla?

Editor’s comment: As you read this, the entire Illinois political world is basically moving toward chaos. New Governor Bruce Rauner has announced bedlam, turmoil and pandemonium are going to start on July 1, 2015 which is the beginning of the new fiscal year for Illinois state government. He is using his ability to approve or reject the State’s 2015-2016 budget to get what we feel are minor changes to IL government.

What we are calling “verging” is the willingness of the Governor to put everything on the “verge” of non-funding many state government functions. The Rauner camp has promised they won’t agree to or sign off on a new state budget unless he gets what he wants for workers’ comp changes, term limits and a local property tax freeze. Lots of Il WC players, particularly doctors and health care givers feel Gov. Rauner’s reforms haven’t been carefully vetted and are being thrust on them. Looking at a projected lack of funding or at least lots of delays, our contacts/readers across the state indicate there is dramatic unrest in school districts and many local governments that depend on the state for support and income.

Either way, the IL House passed and sent an IL work comp “reform” bill to the Democrat-controlled IL Senate in a 63-39 vote. The media didn’t feel it important enough to actually outline what the legislation addresses or how it would change the IL WC Act or Rules. No one has any idea whether the bill will be treated with the same disdain if passed by the Senate but it is certain the Governor won’t sign it and a veto would have to be overridden with strong support from all state Democrats.

IL Republicans blasted the work comp reform measure as being one-sided and falling far short of what the Governor was seeking to entice outside businesses to come here and local businesses to expand here. Governor Rauner labeled the bill "phony reform." He also reiterated his insistence lawmakers address Illinois' structural problems through his “turnaround agenda” before debate about taxes and new revenue sources could be negotiated.

What About the 800lb. Pink Gorilla No One Can Miss?

In our view, this is fiddle-fooling around. The major crisis facing every Illinoisan and Chicagoans isn’t workers comp, term limits or local property taxes. These issues have some relevance but they aren’t close to being game-changers. There aren’t businesses and CEO’s across our country that are petrified of any issue other than our “de-funded’ fake state and local government pensions and the staggering debt they have brought to Illinois and its biggest city. We note Chicago Mayor Rahm Emanuel needs to come up with $634M by the end of June, yes this month, to cover the inconceivably underfunded Chicago Public School fake pensions. We are certain Mayor Emanuel is going to have to borrow billions—there is no way to get a tax in place to get the money in the next 22 days. The Mayor is also going to have to fund his own City of Chicago fake pensions as well as the Chicago Transit Authority pensions. With about $3.5B in annual income, he is well over $33B in debt and that debt is spiraling as they borrow money to pay the “vig” or debt on the debt. At some point,

·         Lots of new and anti-business taxes are going to be levied on lots of things;

·         Some IL cities and government taxing bodies may become “bankrupt” whether it is legal to do so or not; and

·         Someone on Wall Street may pull the plug on more borrowing.

Governor Rauner hasn’t done literally anything about state/local government fake pensions since our IL Supreme Court recently ruled existing pensions can’t be cut. Gov. Rauner is looking at $110B in state debt and the amount due is going up at over $20M each day of the year. If you do the same math, that means City of Chicago pension debt is also going up about $7M each day. If you want U.S. business to look favorably at our state, you have to start fighting that ugly fight right now.

Hard to Blame State/Local Gov’t Workers But Someone Has to “Correct” Fake Pensions

We are sure there are thousands of state and local workers that don’t want the free lunch or the retirement-welfare-state caused by “unfunded” or defunded fake pensions. Conservative state/local workers don’t want future taxpayers to be forced to pay them in retirement due to lack of funding on all sides of the pension matrix. They want certain and fair retirement benefits and should be entitled to it whether it be a 401K plan or something that makes monetary sense and isn’t a house-of-cards.

We hope Governor Rauner, Senate President Cullerton and House Speaker Madigan get together to either call for Con-Con or an emergency constitutional amendment to realign state and local retirement programs so they are “funded” as well as safe, fair and protect both taxpayers and the folks who receive the benefits.

If you aren’t sure why we call them “fake” pensions, please send a reply. Happy to hear your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: IL Appellate Court Rules LUMC Has to Spend New Money to Reimburse LTD/STD Reductions After What Was Supposedly a Final Settlement.

Editor’s comment: In Loyola University vs. IWCC, 1-13-0984WC (1st Dist. 2015), the Workers’ Compensation Division of the Illinois Appellate Court reversed the Circuit Court and reinstated an IWCC decision finding the Commission retains subject matter jurisdiction to interpret an approved settlement contract and order a payment of new settlement dollars long after the settlement was final. As an aside, we are not certain why the IL Appellate Court ruling lists Loyola University of Chicago as the party appellee when the IWCC website indicates Loyola University Medical Center or LUMC is the named respondent. They are different corporations to our knowledge.

In Loyola University, Petitioner Mikesh suffered 2003 and 2005 work injuries resulting in a later settlement contract between the parties. The settlement contract between the parties was approved by the IWCC and was paid, for the most part. The settlement contract contained a provision confirming Respondent LUMC would hold Petitioner harmless from any claim for reimbursement from the settlement by any entity which provided long term or short term disability payments. We would assume this means if the LTD or STD carrier came back at Petitioner to recover LTD or STD paid as part of the settlement, the employer or carrier would cover that cost or defend claimant—that isn’t what happened in this ruling.

After the settlement contract was approved, the long term disability carrier learned Petitioner received Social Security payments and due to such payments, the LTD carrier reduced Petitioner’s long term disability benefits. No action was taken by the LTD carrier due to the lump sum settlement contract itself. Petitioner’s counsel contacted Respondent and demanded it reimburse Petitioner for the reduction by the long term disability carrier due to the Social Security related reduction. Respondent refused to reimburse Petitioner—we are sure they asserted the claim brought by Petitioner wasn’t for “hold harmless” protection of the settlement but for fresh money outside the settlement terms.

 
Petitioner’s counsel filed a Petition for Penalties under Sections 19(k) and 19(l) of the Act along with attorney’s fees under Section 16. Petitioner’s counsel alleged Respondent refused to add monies to the settlement for the reduction by the group LTD carrier due to Social Security benefits. The IWCC ordered Respondent to add monies to the settlement. The IWCC declined to award penalties and attorney’s fees. Respondent sought review in the Circuit Court of Cook County. The lower court held the IWCC did not have jurisdiction to interpret the settlement contract so as to add monies to the settlement at a later time. Petitioner appealed to the Appellate Court.

  
The Appellate Court reversed the Circuit Court and held the IWCC had jurisdiction to interpret the settlement contract.  The Appellate Court ruled the IWCC correctly concluded Respondent was liable for the reimbursement of an “overpayment” of the long term disability payments made to Petitioner by the LTD carrier.  The Appellate Court held the IWCC had jurisdiction to award attorney’s fees and costs.  In this case the respondent’s interpretation of the settlement contract was not unreasonable or vexatious so penalties and attorneys’ fees were not awarded.

We feel the Appellate Court effectively ruled Respondent somehow became a “guarantor” of the benefits due under the LTD plan due to the settlement contract language. When benefits under the LTD plan were cut pursuant to the terms of the plan, we have no idea why the former employer would owe new money in reimbursement of the amounts cut. We don’t agree that is what the settlement contract language says at all. We don’t have any idea how a future settlement contract should now read, based on the unusual view this Court had in its review of the contract language.

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

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Synopsis: The IWCC is asking for your thoughts and comments on our IL WC Arbitrators—Step Up!!

Editor’s comment: We commend new IWCC Chair Joann Fratianni on her efforts to ask members of the practicing bar and you, Illinois businesspeople, for your opinions on any Arbitrator you have appeared before. If you can’t rate an IL WC Arbitrator, we are asking you to get engaged and be ready for the same survey next year.

Please find below the link to the IL WC Arbitrator Evaluation Survey. The Commission is asking their Arbitrators are to be rated only on the basis of your personal knowledge. It is possible you will not be able to rate all of the Arbitrators or answer all of the questions for each Arbitrator on the evaluation form.

If you have specific knowledge as to the qualifications of an Arbitrator to give a fair, informed opinion as to those qualifications, please respond to the questions for that Arbitrator by answering “Y” (Yes) or “N” (No) to the questions asked. If you have no opinion on a particular question, the question should not be answered and will be tabulated as a “No Opinion” response that will not affect the arbitrator’s rating.  Specific instructions on form completion and submittal are available on the link.

If you do not have specific knowledge as to the qualifications of an Arbitrator please skip that Arbitrator and move on to the next Arbitrator. Forms must be submitted to the IL WC Commission by June 12, 2015. 

http://www.iwcc.il.gov/news.htm#arbeval

6-1-15; IL WC Reform May Not Be Happening But The Sky Isn’t Falling--Yet; Joint Employer Immunity Upheld by Matt Gorski; Important Petrillo Decision and more

Synopsis: As Of Now, The IL WC Legislative Reforms May Not Be Happening But For the IL WC Industry, The Sky Isn’t Falling Just Yet.

Editor’s comment: There is lots going on in Springfield and we have seen the IL House shoot down WC reforms and the IL Senate balk, then modify them and then shoot them down in committee. Both sides of the legislature are fighting with new Governor Rauner and he is fighting back in the media and with attack ads. As you read this, the IL General Assembly was supposed to have adjourned by now but they might be moving into extended session. The General Assembly plan appears to be to finish their business without consensus on a 2016 budget approved by Democrats that is more than $3 billion out of whack. Everyone assumes our leaders are going to borrow billions or raise taxes. There is no indication they might do what we want--enact ABBC—Across-the-Board-Budget-Cuts. Try to imagine Illinois legislators and administrators reaching the simple understanding we don’t have the money for 10% of what they are spending/wasting and having them

Ø  Consolidate 88 IL state agencies into 44?

Ø  Cut comically bloated and unquestionably redundant state agency budgets and staff?

Ø  Get rid of satellite offices that do virtually nothing of value to taxpayers?

Ø  Fully automate the tollways and stop spending $100M a year to have humans collect IL highway tolls?

Ø  Start using staffing employees for lots of administrative jobs so taxpayers don’t have to “double-pay” state workers with a salary while they are working for the state and a fake pension when they leave state employ so future taxpayers have to keep paying them more than half their retirement income for life?

Ø  Bring injured state workers back to light work and stop paying TTD for years/decades (or even their lifetimes) to workers that can and should be working?

Gov. Rauner says he won't sign any budget plan until Democrats pass some of his priorities to include WC reform. We will continue to watch and see where it ends. We hope our Governor and the legislature continue to work on real government pension reform which remains the mega-issue for our state.

Please Note the Proposed WC Reforms Aren’t Present in Indiana WC

We don’t feel “the sky is falling” if WC reforms aren’t enacted. IL WC legislative disappointments shouldn’t be too depressing for IL business. In our view, the four legislative amendments weren’t carefully considered or brought to the mainstream for everyone’s thoughts and input. The article we published from Dr. David Fletcher last week and this new article he just published Rauner's workers' comp plan is bad medicine for workers emphasize how “clunky” and uncertain these rapidly-created-and-presented WC reforms are.

Everyone keeps looking to the east at Indiana and their WC system appears to be nirvana for some because their system is sometimes so painfully low and limited in WC benefit levels. If IL WC is supposed to be “Like-Indiana” we caution Indiana worker’s comp has none of the facets of the proposed and currently failed IL WC legislative reforms. For example, they don’t have a “causation” or accident standard in their IN WC Act—they use common sense. The Indiana WC Board and their law doesn’t define “traveling employee” in their IN Act—Indiana hearing members (who are the equivalent of our Arbitrators) use prudence, rationality and sound judgment when they interpret their law in claims administration, hearings and appeals. How about letting our newly appointed IWCC do the same thing?

The Defense Team at KCB&A Wants Our IL WC Commission to Get the Chance to Demonstrate Common Sense in WC Claims

We have said this before and we will keep saying it. The current IL WC is in the process of “reforming itself” with better hearing officers and commissioners who are going to use common sense in reaching decisions. We assure our readers our team is closely watching every ruling from the IWCC and through those published rulings, the Arbitrators who are having their decisions appealed. We pray someone talk to the IL Appellate Court, WC Division and try to get them on board with reasonable cost-cutting.

We want to emphasize the defense team at KCB&A is going to closely watch, report and applaud when we see solid progress in stricter implementation of legal standards for accidents and lower PPD awards for folks smart enough to present claims properly to our hearing officers. If we see loose causation/accident decisions and goofy traveling employee awards, we will also let everyone in the industry know about it. And if you aren’t happy with your IL WC defense, hire us—we have one client who proudly advised us we helped him save $2M in IL WC costs last year with strong advice on his litigated and non-litigated claims. If you want to call him, send a reply.

As one example, we are advised some IL Arbitrators, particularly in downstate or “outstate” Illinois may be taking the Will County Forest Preserve District v. IWCC ruling as a basis to effectively “double” all shoulder permanency awards by changing traditional loss of use of the arm awards into loss of use of the body as a whole for the same permanency values. We didn’t read the decision to justify doubling permanency for shoulder injuries across the board. If that is happening, it is going to inflame the IL business community. Claimant Smothers in Will County Forest Preserve District only received 25% BAW for a truly messed up arm, oops we mean shoulder and a dramatic life change. Very few injured workers with operated shoulders undergo a dramatic life change—lots of men and woman recover unremarkably and have unremarkable permanency/impairment. If you are seeing this phenomenon, we want our readership to know it is out there, as it affects reserves, settlements and trial outcomes along with possible reform legislation. If you see it, please drop us a line with the case name/number.

In the same vein, the overall goal for IL WC is to get our benefits back to the middle of the United States and help our local economies compete with IN, WI, MI, IA and everywhere else in our country. The State of Oregon WC Premium Rankings come out in October 2016 or in sixteen months or so. The best place to track IWCC progress in making solid decisions on what is an accidental injury, what is related to such injuries and what injured workers should be receiving for permanency or impairment is right here. At least once a month, we are going to summarize what we see coming from our hearing officers. If you see outliers or odd rulings, please, please send them along.

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

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Synopsis: New Ruling on When a Joint Employer is Protected From Civil Suit by the WC Exclusive Remedy Clause. Thoughts and Analysis by Matthew G. Gorski.

Editor’s comment: On April 23, 2015, a recent decision in the IL Second District Appellate Court was filed regarding the issues of joint employers and the WC exclusive remedy clause in Section 5 of the IL WC Act. In Kay v. Centegra Health System, our Appellate Court affirmed the trial court’s decision to deny Plaintiff’s motion for summary judgment and granted Defendant Centegra Health System’s motion for summary judgment.

Kay involved an employee of Northern Illinois Medical Center (NIMC) who tripped over a cable while working in a lab at NIMC. She sustained injuries and pursued a workers’ compensation claim against her employer, NIMC. Following trial and appeal to the IWCC, she successfully received substantial workers’ compensation benefits of 60% BAW under coverage from NIMC.

Plaintiff then pursued a personal injury action against Centegra for negligence revolving around this same occurrence. Centegra was a corporate affiliate and sole member of NIMC. Before the trial court, Centegra successfully won on summary judgment arguing they were a joint employer with NIMC because they helped pay for and were listed as “Employer” with NIMC on the workers’ compensation policy that issued benefits to Plaintiff/Petitioner Kay. Therefore, Centegra was immune from civil suit under the exclusive remedy clause.

The Appellate Court did not find Plaintiff’s argument compelling that Centegra was not listed as a party respondent or took any active part of any of the workers’ compensation proceedings. The Appellate Court found it more compelling Centegra helped pay for the WC benefits that were issued to Plaintiff in her WC claim.

For all those companies and their insurance brokers out there who are listed on a joint WC policy with another company, be aware you are helping pay for the WC benefits of employees of the joint company. This ruling is a must-read to insure you are protected in similar settings. This concept may provide immunity to you in a personal injury action by the same worker under Section 5 of the IL WC Act, as you technically have paid or contributed to benefits to the injured worker who sought and received IL WC benefits from a joint employer.

This article was researched and written by Matthew G. Gorski, JD. Matt can be reached 24/7/365 for questions about WC at mgorski@keefe-law.com.

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Synopsis: Petrillo Expands in the Cook County Circuit Court—We Await Appeal to the Supreme Court.

Editor’s comment: All defense attorneys and adjusters/risk managers should beware of an unexpected ruling by Cook County Circuit Judge Kathy Flanagan, which appears to expand the rule in Petrillo v. Syntex Laboratories, Inc. and may create significant risk for defense counsels and their clients. If it isn’t changed on appeal, this ruling might impact WC law and practice at some point. In writing this article, we want to confirm we respectfully disagree with her thinking but we hold Judge Flanagan in the highest academic, scholarly and legal regard.

In Thompson v. University of Chicago Medical Center, Judge Flanagan ruled a defense attorney violated Petrillo by forwarding a copy of Plaintiff’s complaint to the attorney retained by a treating physician prior to the treaters deposition. Judge Flanagan entered substantial sanctions against Defendant. She further ruled defense counsel could not ask opinion questions of the witness, either at the deposition or at trial, and acted to strike many of the questions and answers from the witness’ deposition.

In Petrillo, the IL Appellate Court ruled defense counsel could not engage in ex parte communications with Plaintiff’s treating physician. The Appellate Court ruled “discussions between defense counsel and a plaintiff’s treating physicians should be pursuant to the rules of discovery only.” This unexpected decision caused numerous challenges about the scope of the new limitation and attacks by the defense bar on the rationale of the decision. The ostensible rationale of the Petrillo decision was a physician has a fiduciary and protected connection with their patient. Therefore, ex parte discussions or communications between the physician and defense counsel are felt to unfairly interfere with the patient’s rights and civil claims. We have often characterized this court-created protection as seeking to block the defense attorney from turning the treater into a “ventriloquist’s dummy” so they are somehow “tainted” by knowledge and supposedly say only what the defense wants them to say. We don’t feel doctors are so gullible and accepting they can’t talk to a defense attorney and still not be swayed or unduly influenced from their medical and scientific opinions.

Despite the Petrillo prohibition, the courts have also recognized a treating physician has the right to retain and consult with their own attorney, even though the physician may not be a party to the pending suit or before suit is filed. Thus, a physician has the right to seek the representation of counsel at any time they are to be deposed or testify, even if the physician is not a party. Presumably, the right to counsel includes the right for the physician’s personal counsel to be fully informed about Plaintiff’s claims, so their personal counsel can adequately “represent” the physician.

According to Judge Flanagan in Thompson this concept is not as clear. In Thompson, Plaintiff filed suit against the University of Chicago Medical Center (“UCMC”) and others alleging medical malpractice stemming from surgery performed by one of its surgeons. After written discovery of the parties was complete, the parties began depositions of treating physicians. Defense counsel for UCMC wanted to depose Dr. John Grayhack as he performed surgery on the minor Plaintiff similar to surgery performed at UCMC a year earlier. As he was concerned about being sued, Dr. Grayhack retained a personal attorney to represent him during the deposition. UCMC’s defense counsel obtained permission from Plaintiff’s attorney to send medical records to be used at the deposition to Dr. Grayhack’s attorney. When UCMC’s counsel sent the medical records, he also included health professionals’ reports attached to Plaintiff’s second amended complaint. Plaintiff’s counsel was copied on the correspondence to Dr. Grayhack. In our view, this means nothing was hidden.

When Plaintiff’s attorney learned defense counsel for UCMC forwarded the reviewing professionals’ reports to Dr. Grayhack’s attorney, he brought a motion to bar testimony at deposition. Judge Flanagan ruled any communication with the personal attorney for the physician which had not been specifically authorized by Plaintiff’s attorney was a violation of Petrillo, and barred defense counsel from asking Dr. Grayhack any opinion questions, and further “deputized” Plaintiff’s counsel in advance of the deposition to instruct Dr. Grayhack not to answer any such questions if they were asked. During his deposition, Dr. Grayhack testified he had never seen the copy of Plaintiff’s complaint or the attached health professional reports.

Following the deposition, the court barred large parts of Dr. Grayhack’s testimony from being used at trial. UCMC filed a petition for a supervisory order to reverse Judge Flanagan’s ruling before the Illinois Supreme Court, and the IL legal community awaits a ruling on its petition.

We consider Judge Flanagan’s ruling to go far beyond the scope of Petrillo. We note UCMC’s defense counsel did not communicate directly with Dr. Grayhack. Next, the communication UCMC’s counsel had with the counsel for Dr. Grayhack was limited to forwarding medical records, as agreed by Plaintiff’s counsel and a copy of Plaintiff’s complaint and reviewing health professional reports. UCMC’s counsel was not sneaky about doing this--he copied counsel for Plaintiff on the correspondence. For that reason, we have no idea how it can be an “ex parte” communication—it is what we call an in parte communication. Further, Plaintiff’s complaint was a matter of public record, so Dr. Grayhack’s counsel could easily gone to the courthouse and obtained a copy of the complaint and reviewing healthcare practitioners’ reports. Finally, competent counsel representing a witness in a lawsuit such as this would attempt to analyze Plaintiff’s complaint and healthcare practitioners reports so they would be able to prepare their client for testimony.

We feel all Illinois trial defense counsels should be aware of this unusual ruling. We will continue to track progress on the final determination. We appreciate your thoughts and comments. Please post them on our award-winning blog.