7-27-15; Thoughts From Dr. Fletcher on Illinois' Unbalanced WC Medical Fee Schedule; Former Arbs Dibble and Akemann Lose Federal Appeals; Shawn Biery's Updated IL WC Rate Sheet Now Available and more

Synopsis: Thoughts From Dr. David Fletcher on Important WCRI Research Report on IL WC Medical Costs..

Editor’s comment: The Workers Compensation Research Institute or WCRI is an independent, not-for-profit research organization providing high-quality, objective information about public policy issues involving workers' compensation systems. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures.

You can analyze and review the recent IL-focused WCRI statistical study by using this link: Illinois Chamber Presentation 2015

This is a current and up-to-date WCRI analysis of IL WC Medical Costs prepared for the IL WC State Chamber Working Group. This group is composed of a number of influential Illinois leaders from business, industry and our IWCC Administration. Dr. Fletcher is the CEO of SafeWorks Illinois and a leading source of workers’ comp information and guidance to other medical and industry leaders. As we have advised our readers over the years, the IL State Chamber is on the point as the lead organization looking out for the interests of Illinois business in the WC arena. We urge all our business readers to consider joining the IL State Chamber to learn more about the strengths and weaknesses of the IL work comp system and possible legislative and other changes.

Dr. Fletcher advised:

Illinois has a very unbalanced fee schedule that incentivizes surgical procedures over conservative management for injured workers.

Until July 2014, the reimbursement for evaluation and management  (E&M) codes was below Medicare and this low reimbursement caused access to care issues as documented by WCRI research and Dr. Fletcher’s experience trying to refer injured workers to non-surgical specialists for care.

Currently, the Illinois Workers’ Comp Medical Fee Schedule posted rates for typical office visits as documented by WCRI in their findings are 20% below the national median average and ranks Illinois as the 6th lowest fee schedule state in the entire country. In contrast, surgery reimbursement remains high and averages around 400% above Medicare (see slide 9 of the link above). WCRI documents Illinois WC surgical fees rank 3rd highest in the nation.

Injured worker primary gatekeepers, such as occupational medicine specialists, that control return to work decisions and referrals to other specialists for care, have the most effect on controlling costs in work injury care. Due to the current IL WC Medical Fee Schedule the private practice of occupational medicine in Illinois is dying because $80 reimbursement for an office visit that may require 30 minutes of direct patient interaction, but requires an hour of additional unreimbursed professional time (most WC carriers refuse to pay for CPT code 99358 for prolonged non-face time even though Medicare recognizes this case management service as vital in controlling costs) to update the employer, interact with an external case manager, review diagnostic studies, consult with the physical therapist, issue a return-to-work slip, and prepare a detailed narrative report that a practitioner may have to defend line-by-line in a future deposition.

Thirty-one (31) states of the 43 states that have a WC medical fee schedule construct a fee schedule that is based on relative value (Medicare RVU-relative value units is the most common system) in contrast to Illinois’ unbalanced WC medical fee schedule.

Neighboring states, Iowa, Indiana, Wisconsin, often cited as models for the Illinois WC system, pay substantially higher E&M codes than Illinois and have much lower costs.

Bottom-line, Illinois needs a balanced RVS-based fee schedule that would encourage and reward effective office management of complex work injuries as opposed to rushing off to surgery when such indications are not clear-cut.  Higher reimbursement for office visits would bring back many Illinois primary care practitioners, who will no longer see injured workers, because the reimbursement is not worth the time and effort required to manage such patients.  

Dr. Fletcher is personally advocating for an IL WC fee schedule that is 200% above Medicare across the board that recognizes taking care of injured worker takes more physician or healthcare resources and time than a typical Medicare patient, where decision-making on return to work and communication with multiple parties are not necessary.

For the last five years, Dr. Fletcher has been one of the two WCRI advisory committee physician members. We salute him for letting you, as our readers, know what is happening right now for this crucial IL WC working group.

From your editor—we want our readers to understand the number one cost in workers’ comp across the United States and the world is medical care. The recent statistical study documents current measurements on the cost of some aspects of IL WC care aren’t nearly as bad as the popular business or government perception.

We also note the IL WC Commission has a  Workers' Compensation Medical Fee Advisory Board which includes among its members leading WC medical and legal gurus like Dr. Michael I. Vender, Dr. Avi Bernstein and David Menchetti, J.D. along with others from both sides of the WC matrix. We hope the Medical Fee Advisory Board members are closely watching what is happening in Springfield and working hard to save money for Illinois businesses and local governments while also insuring injured workers get solid medical care.

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

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Synopsis: Former Arbitrators John Dibble and Peter Akemann Lose Their Federal Appeals Over Getting Canned. Sadly, You Are Still Paying Them.

Editor’s comment: Former Arbitrators John Dibble and Peter Akemann were hearing officers for the Illinois Workers’ Compensation Commission. At the time of their appointments, the IL Workers’ Compensation Act, 820 ILCS 305/14, provided each arbitrator would be appointed for a term of six years, with the possibility of reappointment.

The Illinois General Assembly passed Public Act 97–18, which was signed on June 28, 2011 and took effect three days later, ending the terms of all incumbent IL WC arbitrators effective July 1, 2011 and providing Governor Quinn could make new appointments, basically at his whim. The new law allowed incumbent arbitrators to serve as holdovers until the Governor made new appointments.

In the interim, Governor Quinn was booed off the stage at the Illinois State Fair by a group of union members who were unhappy about proposed legislation that would have limited their fake pensions and lifetime-taxpayer-paid health care benefits. Shortly thereafter former Arbitrators Jackie Kinnaman, Peter Akemann and John Dibble were summarily terminated. As these hearing officers came from opposite sides of the political fence, it is hard to understand why they were summarily canned. We assure our readers former Arbitrator Kinnaman was always considered liberal and pro-union—she was also married to an important union official. Former Arbitrator Akemann was the son of a west suburban judge and considered to be a middle-ground hearing officer for representatives of business and labor. Former Arbitrator John Dibble surfed on the challenging waves in southern Illinois where some Petitioner attorneys used to have plenary power to get someone appointed or fired as an Arbitrator.

Former Arbitrator John Dibble was a middle-of-the-road hearing officer who generally got along with the rabidly pro-labor lawyers in southern Illinois. John Dibble had the stigma of receiving a favorable bilateral carpal tunnel WC settlement for $48,790.45 at a time when hundreds of prison guards and Central Management Services WC adjusters were also getting favorable WC settlements in a setting that made the settlements appear questionable. In 2010, Dibble, who was not an attorney, received a tax-free payment on his claim he incurred "delayed onset" carpal tunnel syndrome as the result of falling on steps at a workers' comp hearing site in Herrin, IL. The award was withheld from the public record until the Belleville News-Democrat reported it. One embarrassing aspect of the settlement is the claim was brought against the State, defended by the Attorney General’s office and then-Arbitrator, now current IWCC Commissioner Ruth White had to approve the deal.

We note former Arbitrator Peter Akemann had a work comp claim for an injury occurring in 2010 and, in 2014, got an award of 10% LOU BAW or $33,236.00 as the result of an arbitration decision by an independent IL WC Arbitrator named Alan Rosen.

Either way, by July 1, 2012, both John Dibble and Peter Akemann lost their IWCC positions. They alleged by shortening their six‐year terms as arbitrators under the prior law, Public Act 97–18 deprived them of a property interest without due process of law. The Seventh Circuit affirmed judgments for Defendants. Plaintiffs’ claims for injunctive relief were moot, and Defendants were entitled to qualified immunity on Plaintiffs’ claims for damages. Even if Plaintiffs plausibly alleged a constitutional violation, the applicable law was not clearly established under the circumstances of these  cases, where a statutory amendment eliminated the property interest the statute previously conferred.

From our perspective, They were both solid hearing officers who did nothing wrong. They showed up and worked hard. These former Arbitrators who received either a settlement or decision got caught up in the moment in a fashion we consider wholly unfair—it shouldn’t be a stigma to suffer from a work injury in a system that provides benefits for injuries.

Don’t Cry Too Hard for Them

We want our readers to note, you never truly “fire” any IL state employee who is vested in their fake or comically defunded IL government pensions. By law, we as taxpayers have to keep paying them and they no longer have to work. To our knowledge, former Arbitrator Dibble should be getting a full fake pension and IL taxpayers continue to compensate him, despite his termination. He will also get compounded 3% annual increases so he is probably making more from taxpayers than he made while actually working. His fake government pension may double or triple, if he lives long enough. He also gets taxpayer-paid lifetime health care—not a bad deal either.

Our research indicates former Arbitrator Peter Akemann worked for the State starting in 1983 with IDOT and then as an Arbitrator—we are confident he remains on our dime and is getting lots of your tax dollars. He is a good man and among many other things, Peter is on the board of a kid’s theatre group http://www.cteelgin.com/about-us/board/

It is weird how things work out. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: If You Handle IL WC Claims, the WC Rates are Updated again So Get the Updated Version of Shawn R. Biery’s IL WC Rate Sheet.

Editor’s comment: The new IL WC minimums and maximums have been posted and our updated KCB&A IL WC Rate Sheet is now available via email or snail mail if you prefer the fancy laminated version. We note IL WC rates continue to increase based upon the reported increase in the statewide average weekly wage or SAWW and the increase was more significant than the WC rate increase last July.

The reality on the streets still doesn’t seem to match the hefty increase however as noted in the past, since the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, your WC minimum rates somehow keep climbing.

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now updated too—the new MAX is $749.06!! The new PPD max rate becomes retroactively effective on July 1, 2015. You have to retroactively change reserves on all claims. If this isn’t clear, send a reply or email IL WC rate wiz, Shawn R. Biery at sbiery@keefe-law.com.

The current TTD weekly maximum is $1,379.73. A worker has to make over $2,069.60 per week or $107,619.20 per year to hit the new IL WC maximum TTD rate. 

The new IL WC minimum death benefit is 25 years of compensation or $517.40 per week x 52 weeks in a year x 25 years or $672,620.00! The new maximum IL WC death benefit is $1,379.73 times 52 weeks times 25 years or a lofty $1,793,649.00 plus burial expense benefits of $8,000. These numbers make it very important to keep your workplace safe and free from hazards.

The best way to make sense of all of this is to get Shawn Biery’s awesome and easy-to-understand IL WC Rate Sheet. If you want one, they are free so simply reply or email Shawn at sbiery@keefe-law.com  and we will send it along.

If you would like fancy/shiny laminated copies, copy Marissa at mpatel@keefe-law.com and let her know the number of copies and your MAILING ADDRESS!

7-20-2015: Signs of the Gov't Apocalypse are Nigh--Can We Reform IL Gov't Pensions?; Lindsay Vanderford on an Important Employment Retaliation Ruling; New Development in IL Speeding Sentencing and...

Synopsis: Signs of the IL Gov’t Apocalypse Are All Around—Can We Reform Our Gov’t Pensions in Time?

Editor’s comment: If you are watching the news closely, you may note:

·         The Chicago Public Schools just passed an annual “budget” including $500M in ghost dollars they admittedly don’t have. Unless they can borrow a $1B+ as announced today, the school system is certain to shut down in the middle of the year when they run out of “actual” money;

·         Chicago Mayor Rahm Emanuel just borrowed over $1B at 8% interest to make a state-required pension payment and otherwise keep the City operating—you may note the cost of borrowing another billion for Chicago taxpayers is going to be $80M. The City doesn’t have $80M to make the interest payments and taxes are certain to skyrocket at some future point.

·         Cook County Board Chair Toni Preckwinkle just raised County sales tax so it is again in double-figures, making it one of the highest sales tax rates in the U.S.

State and local governments in Illinois are borrowing billions and raising old taxes and finding new things to tax primarily for one reason—fake pensions.

What is Financially Killing Chicago and the State of Illinois?--Fake Pensions.

Illinois had six statewide fake pension systems as of April 2015:

·         Illinois State Employees Retirement System;

·         Illinois General Assembly Retirement System;

·         Illinois Judges Retirement System;

·         Illinois Teachers Retirement System;

·         Illinois University Retirement System;

·         Illinois Municipal Retirement Fund.

In addition to the aforementioned state-level pension systems, there were 650 locally administered fake pension systems in Illinois. As of 2013, total membership in Illinois hundreds of government pension systems totaled 961,952. To our knowledge, no state in the U.S. (or probably the world) has even close to that many different pension programs. In the WC/Disability arena, there are two fake pension programs—line-of-duty disability fake pensions for police and firefighters along with “odd-lot” total and permanent disability pensions. If you don’t understand why those are fake pensions, send a reply.

Why Do We Call Them “Fake” Pensions?

It is easy—real pensions should be “funded” or to be more precise—“prefunded” from three sources. Participant contributions, “matching” contributions from the respective government body and interest income earned any time. The problem with Illinois’ challenging government pensions is many of them have been “deformed” with two virtually impossible-to-fund retirement benefits: 85% of highest salary payouts with 3% compounded annual increases. If you do the math, if you give someone an 85% pension and then provide 3% annual compounded increases, in less than five years of retirement, they are making as much as they made while working. And the 3% compounded increase means their annual pension payout will unquestionably double, triple and quadruple if they live long enough.

So let’s take a simple example—a Chicago public school teacher. They make $80K a year. If they retire at 85% of their pay, they will get $68K the first year. They only contribute 2% of their annual income to the pension program or about $1,600 a year. To provide them $68K in annual income, you have to pre-fund each vested teachers’ pension to the tune of about $1.5M. If you do the math, you have to pay them salary of $80K a year and also “double-pay” them another $80K a year to get to the kitty of $1.5M. That amount doesn’t cover the 3% compounded annual increases. We estimate to cover those increases, the Chicago Public School system would have to invest over $100K each year a retiree works until vested to fully pre-fund their pensions. As we have advised, we feel the IL state legislative and judicial pensions require state contributions for each participant of around $500K a year or more to pre-fund those pensions due to their inconceivably short vesting periods.

We assure you appropriate pre-funding isn’t close to happening, which is why we call IL government pensions “fake.” Across-the-board Illinois government pensions aren’t even 50% “pre-funded” so more than half of the continuing payout or “back-funding” is from current tax dollars. What is happening is the lack of pre-funding is causing the fake pension payouts and borrowing to be paid by unsuspecting taxpayers for decades after government workers have retired. And government officials/legislators are reluctant to explain this to you or raise your taxes so you will get mad at them for higher taxes. So what we are all seeing is our legislators and administrators borrowing billions and billions to fund it. What they aren’t doing is anything to stop this impending disaster. We assure our readers the problem is starting to dramatically threaten the entire state and all local government bodies.

Please Don’t Blame the Participants!

We caution everyone, you can’t get mad at the pension participants. From our perspective, the vast majority of them are innocent and had no direct role in the pensions becoming unglued and billions being borrowed. They have a right to some certainty in their retirement programs. We hope they are starting to read articles like this and join with the rest of us to get this disaster averted. We also want everyone to be sure—this isn’t a Democrat or Republican issue. It is simple finance—our state/local governments are all pointed toward chaos and are certain to sink to the bottom of the ocean, as the “unsinkable” RMS Titanic did a little over 100 years ago. Someone has to restart the whole concept and we haven’t seen anything from either Speaker Madigan or Senate President Cullerton once the IL Supreme Court ruled former Gov. Quinn’s attempts to be unconstitutional.

Governor Rauner has a Plan to Help

The fake pension reform proposed by Governor Rauner could impact more than just public pensions. State and local public workers in Illinois would lose collective bargaining rights for pensions, wages, work hours and tenure through this single reform. The global plan, which Gov. Rauner announced last week, contains significant pension reforms, but also contains measures Bruce Rauner has tried unsuccessfully to get through the legislature. A higher standard of proof for employee injury claims and bankruptcy eligibility for Illinois municipalities are among them. It also allocates funds from a Chicago casino for Chicago police and firefighter pensions even though legislation for a city casino has not been debated during Rauner's time in office.

Here is Governor Rauner's proposal:

1. Removes pensions, wages, hours of work and employee tenure from the collective bargaining process.

2. Applies changes to items removed from collective bargaining:

Wages would not decline for five years.

Vacation resets to two weeks for members with less than 15 years of service, and three weeks for those who have more than 15 years of service.

Adjusts vacancy and overtime rights.

Overtime pay would kick in at 40 hours instead of 37.5 hours, matching federal law.

3. Offers incentives for employees to move to the lower benefit plan:

Salary package - $2,000 transition bonus, one-time $3,000 salary increase, overtime pay at 37.5 hours and no additional vacation days.

Vacation package - $2,000 transition bonus, one-time $2,000 salary increase, overtime pay at 37.5 hours and two additional weeks of vacation

Overtime/vacancy package - $2,000 transition bonus, no salary increase, overtime pay at 37.5 hours, two additional weeks of vacation; priority rights in work schedule, vacation, overtime and "bumping."

4. Those now eligible for the highest pension benefits (in the Tier 1 plan that applies to employees hired before 2011) would have to choose between switching to a reduced cost of living adjustment in retirement or agreeing all future salary increases will be excluded from their pension calculations. Under current law, they receive a 3 percent, annually compounded increase in their pension every year. The new formula would grant annual, non-compounded increases of the lesser of 3 percent or half the U.S. Consumer Price Index.

5. Employees in Cook County would have to choose between the pension plan introduced by the County-except for the aforementioned collective bargaining changes-or choose between a reduced COLA benefit or agree all future salary increases are excluded from pension benefit calculations.

6. The funding schedule for Chicago Police and Fire pensions would change from the current target of 90 percent by 2040 to 90 percent by 2055, including a five-year period from fiscal year 2016 to fiscal year 2021 where mandatory pension payments are set in statute.

7. Downstate police and fire pension funding schedules would also change to 90 percent funded by 2055.

8. Transfers the investment assets of 642 individual downstate police and fire pension funds to the $35.6 billion Illinois Municipal Retirement Fund. The state's police and fire pension funds would remain independent entities administered apart from IMRF.

9. Changes the definition of catastrophic injury in the Public Safety Employee Benefit Act so it clearly states that such an injury would preclude the injured employee from performing gainful work.

10. Newly hired public safety employees would receive Tier 3 benefits, which is a hybrid defined-benefit and defined-contribution plan with local control on defined contribution benefits.

If you don’t think this is important, you are not thinking very much or you don’t care about the foibles of Illinois and the City of Chicago. Something has to be done and very soon. We consider pension reform to be the only path to “save” Illinois government. We assure our readers what happened in the country of Greece, the City of Detroit and five cities in California can and will happen here, if nothing is done.

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

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Synopsis: No Evidence, No Retaliation. The federal Seventh Circuit affirms summary judgment against employees alleging race discrimination retaliation in failure to promote claims. Thoughts and Analysis by Lindsay R. Vanderford, JD.

Editor’s comment: In Burks v. Union Pacific Railway Co., the Seventh Circuit struck down two Union Pacific employees’ unsound attempts to claim that they were retaliated against under Union Pacific’s promotion process. The Seventh Circuit Court of Appeals found that Magistrate Judge Maria Valdez did not err in granting Union Pacific's motion for summary judgment in an action alleging that defendant retaliated against two employees by denying them requested promotions. Union Pacific employed Frank Burks and Cornelius Jones.  They claimed that Union Pacific denied them the opportunity to take a test that was required for promotion and did so based on impermissible retaliation.

The promotion process took place in two ways:

1) the external process, and

2) the internal process.

Both employees chose to use the internal process. Under the internal route, the employee could apply into a centralized applicant pool. That pool would be open only to current Union Pacific employees. If an Assistant Signal Person position became available in the applicant’s seniority district, the employee would be invited to take the required test. Applications to the pool eventually expire, after which time an applicant must reapply if he remains interested in taking the test. Both employees had made prior complaints of racial discrimination on the job.

In order to get to a trial, the employees should have proffered evidence of unlawful retaliation. To do so, they could have proceeded under the direct method or indirect method of proof. Under the direct method, the employees could have provided either “smoking gun” or circumstantial evidence. Under the indirect method, the employees could have proceeded under the well-established burden-shifting method.

The record showed:

(1) certain individuals responsible for giving one employee information about the application process were unaware of any prior protest of race discrimination; and

(2) there were no available positions within that employee’s district while that plaintiff had an application on file.

Also, the second employee could provide only speculation that defendant's losing of his application was motivated by prior complaint of race discrimination. He also failed to submit any evidence that anyone providing him with information regarding the application process was aware of his prior complaint of discrimination. Without evidence of awareness or available positions that would have prompted the necessary invitations, both claims were denied as no material factual issues existed. Accordingly, the Seventh Circuit affirmed the District Court’s entry of summary judgment on Union Pacific’s behalf.

The Seventh Circuit saw the employees’ claims for what they were, lacking any evidentiary support.  Although it was unnecessary for the employees to prove their case at the summary judgment stage, they still needed to bring forth enough evidence to demonstrate that there were material issues of fact ripe for a jury’s consideration. As the Union Pacific employees could not do so, their claims were tossed out of court.

This article was researched and written by Lindsay R. Vanderford, J.D.  Lindsay can be reached with any questions related to workers’ compensation defense and employment law defense at lvanderford@keefe-law.com.

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Synopsis: There May Be Hope for IL Speeders Seeking Court Supervision After New Circuit Court Ruling.

Editor’s comment: The IL Legislature recently enacted a relatively draconian sentencing law for folks who are caught driving too fast. Now a Cook County judge found the law precluding court supervision for “excessive speeding” unconstitutional.

In People v. Rizzo, Defendant was charged with speeding well over the posted speed limit. In his motion, he argued our new aggravated speeding statute is unconstitutional as violating both Due Process and Equal Protection, and preclusion of court supervision on the charge violates the proportionate penalties clause of the Illinois Constitution. In the Circuit Court's Memorandum Decision and Order, Judge Gubin rejected Defendant’s first argument. She found, given the “serious problems that individuals operating a vehicle at excessive speed can cause,” Illinois had a legitimate interest in enacting legislation designating speeding more than 25 mph over the limit as a Class B misdemeanor, and 35 mph and more over as a Class A crime.

Judge Gubin went on to address Defendant’s argument that aggravated speeding is identical to reckless driving, and, because reckless driving is eligible for court supervision and aggravated speeding is not, the result is a violation of the proportionate penalties clause: “All penalties shall be determined both according to the seriousness of the offense and with the objective of restoring the offender to useful citizenship.” Judge Gubin rejected that argument, as a charge of reckless driving has an element of willful and wanton disregard for the safety of persons and property, while aggravated speeding does not contain such an element, thus the charges are not identical.

The Judge went on to rule the prohibition on court supervision for aggravated speeding was an unconstitutional violation of the proportionate penalties clause because it is cruel and degrading. She listed the charges for which court supervision was unavailable, noting many of them arise from crimes which involve bodily injury. She also confirmed offenses for which court supervision was continuously available include driving while suspended or revoked, driving under the influence, and theft.

Judge Gubin concluded mandating a misdemeanor conviction on a first offense, and not allowing a judge to consider mitigating factors, resulting in a non-expungable, permanent criminal conviction, with ongoing ramifications in many areas of a person’s life, is cruel and degrading, and therefore unconstitutional.

Please note we are reporting this important development as some of our colleagues, clients and their families have faced sentencing under this new law. We aren’t trying to encourage speeding or reckless driving—we want our readers to know the law has been struck down by one judge in one county. We don’t know what the Appellate or Supreme Courts may do with the ruling, should it reach those levels.

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

7-13-15; OMG-LOL, Great IL WC Statistical News--Not Another IL WC Committee!?; Dan Boddicker on Iowa Sup. Court WC on Surveillance; Jim Egan on 19H v. 19G IL WC Ruling; Get New IL/IN Rate Sheets...

Synopsis: OMG-LOL—Great IL WC Statistical News; Some New IL WC Legislative Recommendations but Please Not Another Illinois Workers’ Comp Committee!!?

Editor’s comment: Great news for Illinois businesses, insurance carriers/TPA’s and government bodies—the IWCC’s 2014 Annual Report is out and indicates there has been a 19% drop in IL WC costs since 2011! There has been a 16% drop in medical costs for the most recent statistical period of 2010-2012. We truly consider this solid news for our defense clients and we expect more progress in the days/months/years to come.

We do feel the every-other-year report from the State of Oregon is a solid statistical comparison of where Illinois stands in relation to other states but please remember their analysis becomes stale as the years roll forward—their last analysis on WC insurance premiums are for research/statistics from 2013 and prior. We are certain IL WC will be much closer to the middle when the report from Oregon next year is issued. In contrast, this new annual report from the IWCC is dramatically more current and outlines scientifically significant news on great progress in our state’s WC system. Take a look online at http://www.iwcc.il.gov/annualreportFY14.pdf

Over the weekend, we also saw various new changes to the proposed IL WC reform legislation coming from the Republicans in Springfield. Once again, we like some of them but have issues with two main changes, as we outline below. The new legislation is HB 4248. You can review it only at http://www.ilga.gov/legislation/99/HB/PDF/09900HB4248lv.pdf

The Proposed Legislation maintains the prior Republican proposals on

Ø  “Causation” or the requirement an accidental injury arises in a situation where the work is felt to be the major contributing cause of the deleterious and work-related medical condition—we feel this legislative change is unnecessary and could be easily and rapidly implemented on an administrative level;

Ø  “Traveling employee” coverage is somewhat confusingly defined but is designed to insure a worker who is “traveling” is only covered for injuries or illnesses when they are actually working, engaged in a work-related risk and not on a paid or unpaid break—we do agree with this legislative effort to rein in the more expansive interpretation seen by some reviewing courts. We also reassert that such a statutory change would be unnecessary if the current statutory construction were strictly construed;

Ø  Credit for any award or settlement under Section 8(d-2) of the IL WC Act.—again, we agree with this concept and hope injuries to the shoulder will again become loss of use of the arm and not loss of use to the body. Again, we feel our legislature is reining in the reviewing courts;

Ø  Medical services covered under the IL WC Act are going to be cut 30% more on June 1, 2016—please note this reduction is infuriating physicians and healthcare givers across our state who provide care to injured workers. We understand it is designed to match what group healthcare providers pay in medical reimbursements—every doctor we have discussed this with affirms there are lots more charges and issues with providing work comp care and the legislation is matching apples to oranges. Many doctors may turn down WC claimants if the reimbursements are not sufficient to cover their growing costs. Please also note Dr. David Fletcher of SafeWorks has written numerous articles contesting the basis for these additional cuts.

New and solid legislative recommendations:

v  No Impairment rating required for the Arb to write PPD. Not a major issue for anyone.

v  Electronic claims for payment of medical care—we assume docs and hospitals will still be mad at our legislators and lawyers but this legislation does appear to be a step forward;

v  State of IL and lots of government agencies and WC funds do not have to file WC appeal bonds—this clarifies what we consider to be a poorly reasoned ruling from our reviewing courts where they contradictorily found an injury claim legally wasn’t a work comp injury but then stripped out their ability to reverse the award due to the failure of the State to file an appeal bond for the fund it represented;

v  WC Fraud investigation and recommendations for prosecution are moving to the IWCC from the inert and hilariously inept IL Dep’t of Insurance that never wanted to handle this any way; and

v  The IWCC is supposed to get a slick new computer system with lots of new super-fast online stuff.

A new proposed IL WC Ombudsman Program

This concept is interesting but truly isn’t needed. If you grab a dictionary, you will note an ombudsman or public advocate is someone appointed with a degree of independence, who is charged with investigating and addressing complaints of maladministration or a perceived violation of rights. Here is the new proposed legislation:

Sec. 14.2. Workers' Compensation Ombudsman Program.

(a) The Illinois Workers' Compensation Commission shall establish  the  Workers'  Compensation  Ombudsman  Program  as a program within the Commission no later than July 1, 2016. The Ombudsman Program shall provide assistance to all regions of the  State. The Ombudsman  Program  shall  be  staffed  with personnel who are trained in techniques performed by ombudsmen and who are familiar with the Commission.

The Ombudsman Program may:

(1)  assist  injured  workers  with  the  use  of  the Commission's information portal;

(2) provide information to employers, employees, and medical   provider   with   questions   about   workers' compensation fraud;

(3) assist injured employees with referral to local, State, and federal financial assistance, rehabilitation, and  work  placement  programs,  as  well  as  other  social services that the Ombudsman Program considers appropriate;

(4) respond to inquiries and complaints relative to the workers' compensation program; and

(5)  serve  as  an  information  source  for  employees, employers,   medical,   vocational,   and   rehabilitation personnel,  insurers,  third-party  administrators,  and self-insurers.

(b) Individuals within the Ombudsman Program may not appear or intervene, as a party or otherwise, before the Commission on behalf of an injured employee, employer, or medical provider.

This Section shall not construed as requiring or allowing legal representation for an injured employee by the Ombudsman Program in any proceeding for the Commission.

Our concern with this program is the State already has an IL WC ‘Ombudsman’ and we don’t need another one. If you aren’t sure, her name is Joann Fratianni-Atsaves and she is the current IWCC chair. Joann is brilliant, tough and fair. There is no maladministration that might occur under her watch. She has lots of folks running around what we feel could be a smaller and streamlined agency who are currently doing good things—we suspect she has some of them acting as ombudsmen already. We see no reason for legislation to do anything outlined in the proposal above that can’t already be done. We recommend Governor Rauner call the great IWCC Chair he appointed and have her start doing all this stuff today/pronto.

WEARING IL WC Out

The final new proposal we have to make fun of is what they are calling the WEAR Commission. We aren’t sure which legislative intern came up with this idea but we hope the idea “wears off”—if you get the pun. The legislation seeks to create the  Workers'  Compensation Edit, Alignment, and Reform Commission, which shall be known as the WEAR Commission. The  purpose  of  the  WEAR  Commission is to develop a proposed recodification of the IL Workers' Compensation Act.

We point out the IWCC is a ‘commission’ itself. The IL WC Commission has lots of boards, blue-ribbon panels and commissions underneath it. They have a:

1.    WC Commission Review Board

2.    Self-Insurers Advisory Board

3.    Workers' Compensation Advisory Board

4.    Workers’ Compensation Commission

5.    Workers' Compensation Medical Fee Advisory Board

As we have repeatedly advised our readers the 2011 Amendments added a seventh committee/commission/blue ribbon panel named the Illinois State Workers' Compensation Program Advisory Board. That board has 13 members and it took about a year to get them empaneled. To our knowledge, they have never met, not even once. The problems they were appointed to attack were the hilariously high overpayment of WC benefits to Illinois state workers. Those problems remain today. This dysfunctional board is our main issue with the new WEAR Commission—are they going to meet and actually do anything?

In our view, if a proposed recodification of the IL WC Act is needed, have the nine veteran and knowledgeable members and the Chair of the bipartisan IL WC Commission handle the concept, hold hearings and propose it. We understand they are busy and hard-working folks but we know they are also devoted to their tasks. We don’t feel another “will-this-work-and-will-we-show-up” committee is a solid legislative concept. While it sounds good to the masses, it is probably all Springfield PR fluff.

We appreciate your thoughts and comments. Please post them on our award-winning blog at www.keefe-law.com/blog.

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Synopsis: Iowa Supreme Court Rules Surveillance of Injured Workers Obtained by Employers and Insurers Doesn’t Have to Be Disclosed Prior to Hearing. Analysis by Dan Boddicker, J.D., A former Hawkeye and our Iowa WC Defense Team Leader.

Editor’s comment: Recently, the Supreme Court of Iowa decided the issue of whether the Iowa Division of Workers' Compensation correctly interpreted Iowa Code section 85.27(2) as overriding the work product immunity and requiring the disclosure of surveillance video of any claimant seeking workers’ compensation benefits before deposition in the negative. Their highest Court concluded Iowa Code section 85.27(2) is limited to health-care related privileges such as the physician-patient privilege and does not affect privileges and protections related to the litigation process such as the work product doctrine.

In Iowa Insurance Institute, et al v. Core Group of the Iowa Association for Justice, et al, No. 13-1627, June 12, 2015, the Iowa Supreme Court upheld work product doctrine immunity with regard to disclosure of surveillance video before a medical or lay deposition in its opinion which limited Iowa Code section 85.27(2).

The Iowa Insurance Institute case was started when Christopher J. Godfrey, Iowa Division Workers’ Compensation Commissioner, ruled on a petition for declaratory order concluding Iowa Code section 85.27(2) applies to surveillance materials and waives the work product privilege except to the extent that requested materials contain mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation. The Commissioner concluded employers or insurers must produce surveillance materials upon request from a claimant and may not withhold the materials until after deposing the claimant.

The Court noted the Iowa standard that if a document or tangible thing may fairly be said to have been prepared or obtained because litigation is foreseeable or ongoing, it constitutes work product. The Court agreed that in Iowa surveillance materials are protected as work product, at least initially. The Court stated that surveillance lose the status of protected work product once a determination is made that the surveillance will be used at trial.

The Supreme Court used statutory interpretation to interpret Iowa Code section as being limited to health care provider records and held the declaratory order of Commissioner Godfrey erroneously determined the Iowa Code section 85.27(2) applies to surveillance.

We consider this ruling to be favorable to Iowa business and government entities who can save surveillance until they choose to disclose it.

This article was researched and written by Daniel J. Boddicker, J.D. Dan can be reached for questions, concerns or discussion of Iowa workers’ comp, general liability and employment law at dboddicker@keefe-law.com.

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Synopsis: Petition to Modify IL WC Award Doesn’t Block Claim for Judgment to Collect Undisputed Amounts. Analysis by Jim Egan, J.D.

Editor’s comment: The Illinois Appellate Court has ruled that the fact an injured workers’ petition to modify an award of benefits is pending does preclude the trial judge of jurisdiction to enter a judgment for payment of that award.

In a published decision, Sunrise Assisted Living v Banach, No. 11-MR-1348, the IL Appellate Court held the filing of a 19(h) petition is not a petition for review as considered by 19(g), which would bar a judge from entering a judgment on an award.

Claimant Banach worked for Sunrise Assisted Living and filed a workers' compensation claim after suffering a serious on-the-job injury in March 2007. An arbitrator determined she was entitled to temporary total disability benefits of $250.00 per week for 107 5/7 weeks; permanent partial disability benefits of 45% BAW totaling 225 weeks at the PPD rate of $225.00; $322,922 for her medical expenses; and $1,520 in interest. IWCC upheld the award, as did the Circuit Court and the Appellate Court. Sunrise then paid the award in three installments.

While the case was pending at the Appellate Court, Claimant filed a petition to modify the award due to an alleged worsening of her condition, requesting additional benefits. After employer Sunrise made payment, but before the Commission ruled on her modification petition, Claimant filed an application in the trial court for a judgment on the original award. She also demanded payment of an additional $56,395 as interest that accrued after the date the Commission upheld her award, until Sunrise paid her award.

Sunrise moved to dismiss the application for judgment, arguing the trial court lacked jurisdiction over the matter since Banach’s petition for modification was still pending. It also insisted it owed no additional post-award interest. The trial judge agreed with Sunrise's later argument and denied Banach's request for additional interest.

Analysis: In ruling the trial judge could not enter judgment on a workers' compensation award while the Commission was reviewing whether that award is proper, but judgment on the original award may be entered when the Commission is deciding whether a material change in circumstances warrants a prospective modification, The Appellate Court followed the 1978 ruling in Ahlers v Sears Roebuck Co., 73 Ill. 2d 259,262. In Ahlers, the Court held the prospective nature of a 19(h) petition was different from the subject matter contemplated by 19(g). Accordingly the Court held the Circuit Court judge properly found he had jurisdiction to rule on Banach's application for judgment.

The Court then went on to say that the judge properly found Banach wasn't entitled to additional interest because Sunrise had paid her award before Banach filed her application for judgment.

From a technical perspective, we remain concerned the petition to modify benefits doesn’t guarantee the current amounts due—it could be possible for the IL WC Commission to either increase or reduce the prior amounts at issue. This ruling seems to contemplate only an increase was possible.

This article was researched and drafted by Jim Egan, J.D. Jim can be reached for comment and questions at jegan@keefe-law.com. Please also consider posting questions and concerns on our award-winning blog.

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Synopsis: New IL and IN WC Rate Sheets due out any day—sign up!!

Editor’s comment: Shawn R. Biery, J.D., MSCC and Kevin Boyle, J.D. issue new and updated workers’ comp rate sheets for the states of Illinois and Indiana, respectively. Feel free to sign up for this free and helpful claims information—we will send it as soon as you ask for it. Shawn can be reached at sbiery@keefe-law.com. Kevin is at kboyle@keefe-law.com.