8-25-2015; Will IL WC Lawyers Get Aced Out By Their Own Actions?; Join Jay Shattuck in His Grass Root WC Reform Efforts; New Arbitrator Douglas Steffenson Selected by Governor Rauner and much more

Synopsis: Will IL WC Lawyers Get Aced Out by Their Own Actions?

Editor’s comment: We are seeing shocking developments on many fronts that are scary to longtime WC veterans. We are worried some sectors of the Petitioner’s bar want any work problem to be globally covered under workers’ compensation regardless of what the legislation might say. As we have told our readers there are two things that come with global coverage of anything that happens as work, if you call it all an “injury.”

Ø  The first thing that comes from global and indefensible coverage under workers’ comp of any medical problem that occurs at work is staggeringly high claim costs. If there is one thing that will drive every major and minor business from our state, it is global WC coverage of every sore [insert body part].

Ø  The second thing that comes from global coverage under work comp of any medical problem that occurs at work is going to be the end of lawyers on either side, hearing officers and any litigation. There is very little need for lawyer to litigate anything in such a nutty system—insurance carriers and TPA’s will simply set up payment schedules then accept, price and pay everything, like they do in group health claims.

On the Legislative Front:

IL Senate Bill 162 has been passed by the IL Senate and is pending before the IL House as you read this. We assume this bill was designed to scare the business community and, sadly that concept is working. We assure our readers Senate Bill 162 provides global and indefensible coverage of anything a worker does when the worker is off the premises of their employer and is acting “reasonably.” What in tarnation does that mean?

In our view, a flight attendant who becomes lonely while on the road and has a romantic encounter and becomes pregnant would have a work-related pregnancy and be entitled to full WC benefits during the pregnancy and perhaps after under the provisions of the new and poorly thought-out IL Senate bill. A truck driver who smokes cigarettes like a chimney and gets lung cancer from the bad habit would clearly be entitled to all care under work comp. If you send your admin to get both of you lunch across the street and he/she trips on their own feet, you would be on the hook for WC benefits.

We vote with sticking with the traditional analysis of AOO/ICO or “arising out of and in the course of” already in the IL WC Act. Please note Senate Bill 162 is not yet law—it has been passed by one of the two houses of our IL General Assembly.

On the Judicial Front:

When did turning in a chair or walking on a normal staircase or putting on a winter coat become an IL WC “accidental injury?” The answer to this sad IL WC trivia question is—last week.

In their controversial ruling in Adcock v. IWCC, the Illinois Appellate Court, WC Division reversed the IWCC denial (and in our view, years of IL Supreme Court precedents) and ruled a welder who felt pain in his knee rolling on a wheeled stool was entitled to IL WC benefits. The ruling noted moving around on a wheeled stool is a "neutral risk of daily living" that anyone might encounter anywhere. The decision indicated “work” caused the welder to confront a greater risk of harm than an ordinary member of the general public would because of the various times he had to perform his job duties during a normal shift. The majority ruled it "should not award benefits for injuries caused by everyday activities like walking, bending, or turning, even if an employee was ordered or instructed to perform those activities as part of his job duties, unless the employee’s job required him to perform those activities more frequently than members of the general public or in a manner that increased the risk."

In our view, this ruling creates global and indefensible WC coverage for “repetitive working” claims. We don’t feel lawyers will be needed to litigate such claims and Arbitrators won’t be needed to conduct hearings for such claims and we won’t need reviewing courts to hear appeals. We agree with most readers our term “repetitive working” is intentionally redundant. Please note anyone who has a job performs normal activities at work more than in their daily lives. Duh! That is one of the reasons we call it “work” because you do some things over and over again. Work by its definition involves repetition.

From an academic perspective, please note the nomenclature used by almost all of our hearing officers at every level of this tortuous claim refer to the event of unexpected knee dysfunction as an “injury.” In our view, once you characterize “repetitive working” problems as an “injury,” the employer has lost and global WC coverage is present. We again assert global coverage of any event of physical dysfunction as a work-related injury strips out all defenses to any claim of accident. If there are no defenses, lawyers, hearing officers and judges aren’t needed.

The facts of the claim are simple. Petitioner Adcock worked as a welder for Knaak Manufacturing. After he initially injured his right knee on the job, his doctor imposed limitations on his ability to twist, kneel or walk extensively. In order to accommodate his restrictions, Knaak provided him with a wheeled stool so he could move about his workspace in a seated position. Basically he had to stand before he started work and arise when he stopped. Claimant testified he was constantly moving along the length of the workstation on the stool, swiveling from side-to-side, as he worked. We salute him for describing his work but don’t view such work activities as physically dangerous or obviously injurious.

Claimant asserted he was unable to maneuver the stool using his right leg because of his knee injury to that leg, so he always had to use his left leg to propel the chair. Petitioner said he felt his left knee "pop" while he was twisting at his work station in May 2010. His doctors later determined he had torn the meniscus in his left or opposite knee. We do not see the torsion turn of the joint in this record that would cause a meniscal rupture.

The Arbitrator ruled the event was compensable. The Workers' Compensation Commission reversed the Arbitrator, specifically finding "(t)he act of turning, even in a chair, is an activity of everyday life," so it was "a hazard to which the employee would have been equally exposed apart from the employment." The Commission ruling is consistent with the landmark decisions in Board of Trustees of the University of Illinois; Greater Peoria Mass Transit District; Hansel & Gretel Day Care Center by our Supreme and Appellate Courts.

The IL Appellate Court, WC Division reversed on the “manifest weight of the evidence” standard. We point out the last high court ruling on this area of law was Sisbro v. IWCC where our IL Supreme Court cautioned this interim reviewing court not to reverse the IWCC on the manifest weight of the evidence and supplant the IWCC’s decision with their own view of the facts. Since the Sisbro ruling was issued by our highest court we have seen 7-10 WC appellate rulings that reverse IWCC denials to insure benefits are awarded. We have yet to see a single appellate ruling where benefits awarded by the IWCC were reversed to see a denial by our penultimate reviewing court.

In our view, this new ruling sets out the “activist” judicial plan to make any and every action at work into an “injury” and thereby compensable—all you have to do is say you did the “activity of daily life” twice or maybe three times a shift. When that evidence is in the record, the claim becomes magically and indefensibly compensable. Our overall point is clear—work isn’t supposed to be an “injury.” If we are going to make “work” into a compensable injury, we are going to see skyrocketing workers’ comp costs and a greatly decreased need for lawyers and hearing officers.

On the Administrative Front:

We caution our new Governor and all our readers we may be looking at the first salvo in a new battlefield. The IWCC is getting mildly conservative or somewhat business friendly, as indicated by their own statistics in their most recent annual report. In contrast, the IL WC  Appellate Court remains strongly supported by and amenable to the theories espoused by the Illinois Trial Lawyers Ass’n. We may see lots of IWCC rulings reversed moving forward by the “activist” five-member panel composed of Appellate Court justices from the five appellate districts in this state. We may also see them judicially dismantle and disintegrate the concept of “major contributing cause” currently espoused by our Governor and his supporters as an IL work comp reform.

Our thoughts for our Governor and everyone who is concerned about an Illinois “turnaround” is to point out our IL Supreme Court designates who sits on the IL Appellate Court, WC Division. The Supreme Court isn’t composed of all Democrats. Our highest court has three Republican members. In contrast, the IL Appellate Court, Workers’ Comp Division has no justice who has filed a single dissent on behalf of the interests of Illinois business in several decades. Most corporate CEO’s and government leaders have no idea how these justices are selected and get to make these crucial decisions that have a lasting impact on the IL WC matrix.

We suggest our Governor reach out to IL Supreme Chief Justice Rita Garman and discuss these issues and see if there can be a member or two on this appellate panel who match the WC goals currently being presented to our legislature. If something like that doesn’t happen, we assume some ITLA member may come up with some sort of constitutional challenge to any WC reform legislation and such a challenge may fall on friendly ears and go nowhere for years to come.

                ----------------------------------------------------

Synopsis: if You Truly Care about WC Reform in IL, Consider Joining the IL State Chamber and Their Grass Roots Efforts, As Outlined by Jay Shattuck.

Editor’s comment: Shattuck & Associates Consulting, Inc. has helped develop a grassroots guide for Illinois businesses that want to contact their legislators and urge them to approve meaningful workers' compensation reform. A copy of the Illinois Workers' Compensation Reform Action Packet is available by contacting Jay Shattuck at the phone number or email address below. If you care about rising IL WC costs, contacting your legislator takes about 5 minutes, and this packet provides all the resources you will need to make the call.

Jay points out since 2005, the Illinois General Assembly has jacked up workers' compensation costs giving Illinois the 7th highest workers' compensation costs in the country which has helped drive companies and families out of Illinois. He wants you to take five minutes and let your legislators know that:

·         Workers' compensation should only cover injuries that are primarily caused by your workplace; and

·         Ask your legislators why they require IL employers to pay for 100% of an injury that was only 1% caused at work.

We agree with Jay and have reported the Illinois General Assembly has been discussing ineffective, short-sighted changes to Illinois' workers' compensation reform all session. As we report above, some of these changes aren’t “reforms” at all but will even further boost IL WC costs. Governor Bruce Rauner has been promoting real reform to Illinois' workers' compensation system that would actually drive WC costs down and still protect injured workers whose injuries were primarily caused by their work.

We assure you IL legislators are seeking examples of how the workers' compensation system has been unfair to your business. If you have an example of a claim that you believe was unfair to your company, and you would like to have it shared as information on the House or Senate floor, please pass them on to Jay Shattuck. He will maintain the confidentiality of your company and not release the name of the company or worker, just the facts of the workers' compensation claim.

If you have any questions about contacting your legislator, the WC Reform Action Packet, or would like to pass on an example of an unfair WC claim, contact Jay Shattuck at either 217-544-5490 or email jaydeeshattuck@gmail.com

            -----------------------------------------------------

Synopsis: Illinois Gov. Bruce Rauner has appointed Douglas Steffenson, a workers' compensation defense attorney as the newest arbitrator with the IL Workers' Compensation Commission.

Editor’s comment: It is mildly unusual to hear this news from a national news source and not from the IWCC’s otherwise informative website. Mr. Steffenson was an attorney with a major Chicago-based workers' compensation defense firm and worked with the firm for 15 years and has more than 24 years of legal experience. He was also an assistant state’s attorney for Cook County from 1991-97. It appears from our research he was also licensed to practice in Iowa. Aside from workers' compensation law, Steffenson has experience with employer liability law. He holds a law degree from DePaul University.

We are confident new Arbitrator Steffenson is expected to be a business-friendly hearing officer but we will have to see. We are told there may be at least two more Arbitrators appointed in the near future.

8-18-15; Our IL Courts Demand IL WC Arbitrators Rule on WC Fraud--Will They?; Win! Win! For IL Employers--Employer’s Settlement Agreement is Good to Go; If You Go Voc, Go Real Voc and much more

Synopsis: Our Illinois Courts Demand IL WC Arbitrators Rule on WC Fraud—Will They??

Editor’s comment: In a controversial ruling that is a bitter pill to any IL WC risk manager or claims handler, it now appears the Illinois 3d District Appellate Court joined with the First District to determine there is no civil remedy for unquestioned workers’ comp fraud and theft of such benefits. The Appellate Court was divided on the question of whether a trial judge or jury had jurisdiction to decide whether an injured truck driver became ineligible for temporary total disability benefits by lying about physical limitations and abilities.

Presiding Justice Mary McDade wrote a biting dissent indicating she found that idea "untenable and unjust." As the IL WC Commission regularly denies having jurisdiction to decide if WC fraud was committed where there are alleged misrepresentations coming from an employer against an injured worker, Justice McDade complained the majority ruling leaves ABF Freight and other major and minor Illinois employers without any civil remedy in claims involving clear evidence of WC fraud.

Defendant Fretts was a tractor-trailer truck driver for Plaintiff ABF Freight. In 2009, Fretts filed two IL workers' compensation claims for alleged injuries to his right shoulder. The treating physician provided permanent lifting restrictions, and Fretts told ABF the restrictions would not allow him to work as an over-the-road driver. Relying on Fretts’ representations, ABF innocently paid Fretts substantial temporary total disability benefits. In September 2011, ABF learned Fretts was secretly working as a long-distance truck driver for Havener Enterprises. When ABF got the tip, they hired an investigator to conduct surveillance.

As part of a global investigation, the operative took startling videotape of Defendant Fretts lifting heavy weights at a local gym with his supposedly disabled arm and shoulder—at one point, Fretts was seen curling a whopping 55lbs. with each arm. An orthopedic surgeon who viewed the videotape confirmed Fretts fully recovered and appeared capable of exceeding the “permanent” lifting restrictions placed upon him by his treating doctor.

Using the video and the opinion of the orthopedic surgeon, ABF brought a motion for determination of workers' compensation fraud before the Illinois Workers' Compensation Commission. ABF contended Fretts made knowing misrepresentations regarding the extent and nature of his shoulder injuries, his asserted disabilities/recovery and his alleged inability to work. One week later, ABF filed a civil complaint against Fretts, stating claims for insurance fraud, work comp fraud and common-law fraud. In short, ABF wanted their money back from paying a fraud.

ABF's motion for determination of WC fraud was heard before an IWCC Arbitrator in August 2012. At the hearing, Fretts admitted he worked for Havener, driving a flatbed and a pickup truck from IL to Louisiana, but he claimed he was unable to locate other work. The Arbitrator determined a limited amount of driving work was not a basis to end Fretts' continued TTD benefits, and she found ABF failed to prove Fretts had intentionally or fraudulently acted in relation to the work admittedly performed for Havener Enterprises.

After the Arbitrator issued her decision, Fretts moved to dismiss ABF's civil complaint. Kankakee County Circuit Court Judge Wenzelman granted his motion, finding the doctrine of collateral estoppel or issue preclusion barred ABF from relitigating the same theories of fraud presented to and decided by the Arbitrator.

Last week, the Third District Illinois Appellate Court of Illinois ruled as a matter of law dismissal was proper because the Circuit Court lacked jurisdiction to even consider the case. The majority ruling indicated the IL WC Commission and the circuit courts have concurrent jurisdiction to decide workers' compensation cases, however the IL Supreme Court has said the IWCC "should be given wide latitude in resolving factual issues," while "questions of law are more appropriately answered by the circuit court." The majority outlined ABF's claims presented "questions of fact, such as the extent of Fretts' injury and his representations to medical personnel regarding his injury both before and during the workers' compensation proceedings." As such, the majority felt the IWCC was "in a better position" to address the allegations being raised.

Appellate Court Justice Schmidt wrote separately, saying he agreed ABF's complaint was properly dismissed, but he was not persuaded the IWCC had any sort of "special expertise that equips it better than the circuit court to deal with issues of fraud." He also said he believed ABF's fraud claim should have been barred by principles of res judicata or issue preclusion as opposed to an absence of jurisdiction.

As we outline above, Justice McDade was the lone dissent, arguing there is no tribunal in Illinois to resolve ABF's justiciable claim of fraud under the majority's reasoning, because the IWCC has repeatedly ruled it won't decide fraud cases. In 2010, the IWCC handed down a ruling in Leviege v. Ford Motor Co. in which the Commission panel expressly indicated it can make findings regarding credibility of witnesses and weight of evidence but "(it) does not have jurisdiction to determine what, if any, fraud was committed." That issue, the IWCC said, "is the jurisdiction of another tribunal." Thus, Justice McDade contended, "if the majority is correct in stating our courts do not have jurisdiction to rule on issues of fraud in workers' compensation benefits cases and the commission is also correct in concluding it too lacks jurisdiction," then ABF is left without a tribunal from which it can seek a remedy. Justice McDade suggested the more prudent course of action when the commission has already clearly stated that it is not the proper forum for determinations of fraud, is for the courts to step up.

We point out WC fraud is stealing. If someone stole a tractor-trailer from ABF, we assume SWAT teams might be called and every judge and justice would be quick to put the stop to theft or fraud. We remain completely baffled how and why our judiciary seem confused about WC fraud. We ask our readers the question—if you innocently paid an injured worker a million dollars in IL WC benefits to then learn the claimant was a liar and cheat and made the whole thing up—don’t you feel our courts should be a place you could go to get your money back? In our view, the IWCC would simply deny the claim and not award anything—that doesn’t get you a penny in return.

Please also note there are lots of WC issues that are decided in our circuit courts:

1.    In Kelsay v. Motorola, claims for retaliatory discharge for filing a workers’ comp claim are to be brought in the civil courts. Please note the proscription against such retaliation is contained in the IL WC Act.

2.    Claims to adjudicate a workers compensation lien under Section 5 of the IL WC Act can and are typically brought in the civil courts. While the IWCC could adjudicate a “set-off” of benefits in this setting, most of the time such issues are handled by our circuit court judges.

3.    In their ruling in Illinois Graphics v. Nickum, the civil courts ruled when WC benefits were paid in error, the litigation to recover such monies had to be brought in the circuit court.

The IL WC Commission Can’t Decide All Claims of WC Fraud Because All WC Claims Aren’t at the IL WC Commission

Please also note our courts seem to presume all WC benefits arise from litigation—in fact the opposite is true. The vast majority of IL WC claims are medical only or medical only-lost time claims. The IWCC may only get involved in such claims at the very end, if there is a settlement. There is no current method for the IWCC to handle WC fraud claims in non-litigated settings because the only proper party Petitioner in an IL WC claim is the worker—there is no provision for an employer to file an Application for Adjustment of Claim to seek redress for fraud or anything else.

In a similar vein, we assure our readers workers’ comp litigation in this state is driven by the Petitioner’s bar. If they won’t want to go to hearing, cases are very rarely heard. If a Petitioner was caught red-handed creating a claim for a fake accident or working while on TTD, all they would have to do is stall, stall and stall some more until all the witnesses for Respondent have disappeared or died.

Where Is IL WC at Right Now With WC Fraud Remedies?

      This ruling has nothing to do with criminal investigation and prosecution of WC fraud in this state—that concept hasn’t changed at all;

      Our Governor is trying to move the initial WC fraud investigation from the minimally active IL Dep’t of Insurance to the IWCC—we strongly support that concept to bring some accountability to WC fraud investigations;

      In the right case with clear evidence of WC fraud, our readers, clients and the WC defense industry should present Petitions for WC Fraud before the Arbitrator assigned consistent with above ruling and the First District ruling in Country Financial Services v. Roberts.

We hope the judges and justice in this state start to understand the extent of the WC fraud problem caused by miscreants such as the one who is the subject of this article. IL WC managers want to pay injured workers what is due but they do not want to be misled or stolen from.

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

            ---------------------------------

Synopsis: Win! Win! For IL Employers--Employer’s Settlement Agreement is Good to Go and No Need to Pay 25% Attorney Fees For Suspended Future Medical Payments. Analysis by Bradley J. Smith, J.D.

Editor's Comment: In Bayer v. Panduit Corporation, the Illinois First District Appellate Court affirmed the circuit court judge’s entry of a good-faith finding related to Area Erectors, Inc.’s (Area) direct settlement with Plaintiff Bayer. Simultaneously, the Appellate Court reversed the circuit court judge’s award of attorney fees to Bayer’s attorneys to be paid by Area. On June 20, 2007, Bayer, an employee of Area, was working as an ironworker on a construction site when he allegedly fell and sustained injuries. As a result of those injuries, Bayer became a quadriplegic. Bayer filed a workers’ compensation claim against Area.

Similar to any other construction jobsite, there were multiple parties involved. Panduit was the general contractor on the jobsite.  Panduit hired Garbe Iron Works, Inc. (Garbe) for the expansion of Panduit’s warehouse facility. Garbe then hired Area, to “[f]urnish all labor and equipment (including supervision) to upload and erect” structural steel, in exchange for $520,485.00. The purchase order specified Area would name Garbe and Panduit as additional insureds on a $2 million insurance policy.

On September 19, 2007, Bayer filed a civil lawsuit against Panduit alleging negligence. In turn, on April 30, 2009, Panduit filed a third-party complaint for contribution against Bayer’s employer, Area, contending Area was also negligent in failing to ensure the safety of its employees, including Bayer. On October 1, 2012, Area and Bayer filed a joint motion for a good-faith finding and approval of a settlement agreement between Bayer and Area. The motion for a good-faith finding alleged that Bayer had filed a workers’ compensation claim against his employer, Area; that Area has honored Bayer’s workers’ compensation claim and Bayer had been paid and continued to be paid temporary total disability and medical expenses; that the amount of workers’ compensation lien to date totaled $5,275,585.57; that Bayer and Area, through area’s insurer Arch Insurance Company, have entered into a settlement agreement through an arm’s length bargaining process; and the settlement agreement was supported by consideration. Routinely, the motion for a good-faith finding also attached a copy of the settlement agreement.

Shortly after the finding for good-faith settlement, Garbe also settled with Bayer leaving only Panduit for trial. At trial, a jury awarded Bayer $80 million dollars in damages, but reduced it by 20% for Bayer’s own contributory negligence, for a total of $64 million verdict against Panduit.

Panduit argued the settlement agreement was not made in good faith. Specifically, Panduit contended the settlement agreement lacked consideration. The Appellate Court reviewed the circuit court’s finding on an abuse of discretion standard lending discretion to the circuit court’s decision. In order to prove whether a settlement agreement was negotiated in good faith, the settling parties carry the initial burden of making the preliminary showing of good faith. Once that showing is made, the burden of proof shifts to the non-settling party, who challenges the good-faith settlement. The standard of proof is by a preponderance of the evidence. Area made the initial showing by attaching its settlement agreement to the motion. The Appellate Court found Panduit failed to demonstrate—by a preponderance of the evidence—any showing of bad faith by the settling parties

.

The Appellate Court cited multiple consideration contained within the settlement agreement supporting the good faith finding. The essential element of consideration is a bargained-for exchange of promises or performances that may consist of a promise, an act, a forbearance, or the creation, modification, or destruction of a legal relation. There were multiple contingency lien waivers in the settlement agreement, which were sufficient consideration. Additionally, the agreement not to suspend workers’ compensation payments to Bayer at any time prior to the final resolution of the litigation against all of the parties also qualifies as adequate consideration. Accordingly, the Appellate Court affirmed the circuit court’s good-faith finding.

Also, on appeal, was the circuit court’s entry to a 25% attorney fees award to Bayer’s attorneys from Area. The motion for attorney fees, citing section 5(b) of the Workers’ Compensation Act (IWCA) and the holding in Zuber, requested the circuit court enter an order compelling Area to pay attorney fees in an amount representing 25% of future workers’ compensation benefits for Bayer that had been suspended by statute as a result of the underlying settlements in the negligence action.

As the issue required the interpretation of provisions under the IWCA, which is a question of law, the Appellate Court considered the issue under the de novo standard of review. The Court reviewed the language of Section 5(b) of the IWCA, to find the IWCA does not require an employer to pay attorney fees for suspended future medical payments. Further, the Court reasoned had the legislature intended for fees under section 5(b) to include future medical expenses, the legislature could easily have drafted section 5(b) to say that the employer’s right to reimbursement included the amount of compensation paid or to be paid by the employer to or on behalf of the employee, which would have encompassed the medical expenses paid “to the provider on behalf of the employee” under section 8(a) of the IWCA. Consequently, the Appellate Court reversed the circuit court’s entry awarding Bayer’s attorney 25% attorney fees on future suspended medical payments.

Since 25% of any future award of medical payments—in this case—is a significant recovery, we are continuing to monitor Bayer’s request for a petition for certiorari to appeal the issue to the Illinois Supreme Court. We will update you once we are aware whether or not the petition for certiorari is granted or denied.

The research and writing of this article was performed by Bradley J. Smith, J.D. Bradley can be reached with any questions regarding general litigation defense and workers’ compensation defense at bsmith@keefe-law.com

            -----------------------------------

Synopsis: Catalyst RTW Might Not Be the Answer for the IL WC Return to Work Challenge. Thoughts and analysis by John A. Karis, JD.

Editor’s comment: In Perkins v. Turner Industries Group (issued June 19, 2015), Petitioner was a carpenter for 29 years and was injured at work. An FCE released Petitioner to medium physical demand level position. Petitioner began vocational rehabilitation with Coventry from April 2011 to January 2013. Petitioner allegedly applied for 1000 jobs but claimed he was unable to secure employment. We consider it comical for anyone to claim they have looked for 1,000 jobs without success—in our view, claimant had to be doing something to avoid locating medium-level work, as there are literally hundreds of available jobs that fit that description in this state.

In January 2013, Respondent Turner obviously decided to take action about ongoing TTD. Petitioner received a letter from a national company named Catalyst RTW offering him at home-based employment through a company called AllFacilities. The website for this company is http://www.catalystrtw.com/. According to Petitioner he never applied for this position—it was given to him. On March 25, 2013 Petitioner began working for AllFacilities. However, on July 10, 2013 Petitioner was terminated from AllFacilities due to his failure to produce enough “A leads.”

Catalyst RTW's purpose in cases such as the one at bar is to assist companies in saving money on workers' compensation claims and markets itself as providing lower workers' compensation settlements when they have been involved in a case. Catalyst specifically markets that if an individual is non-cooperative, declines the offer of work or is terminated for cause they will document those facts and be available to testify for Respondent. Their witness testifies about 25 to 30 times per year, or more than twice every month according to testimony by a Catalyst RTW employee. Catalyst RTW takes difficult cases, a case such as this and then usually refers them to AllFacilities which provides them with at home employment within their restrictions.

The Arbitrator noted the insurance company paid Catalyst RTW to arrange the interview, paid AllFacilities to hold the interview, paid Petitioner's wages while at AllFacilities, paid an administration fee to AllFacilities to allow Petitioner to perform this activity, and would have gotten a refund of their initial costs if AllFacilities had not offered Petitioner work.

The Arbitrator in his decision stated a review of the testimony and evidence in this case revealed the at-home work positions with AllFacilities were not found to be competitive or “real” employment. The record indicated of the 661 referrals from Catalyst RTW only three unsubsidized workers were still employed there. The Arbitrator further noted it was clear a referral to AllFacilities through Catalyst RTW has a nearly non-existent chance of turning into long-term employment. The Arbitrator reasoned less than ½ of 1% of the individuals referred to AllFacilities from Catalyst RTW in the last three years continue their employment with AllFacilities after their subsidized work period has ended.

Additionally, a review of the testimony of two vocational counselors led the Arbitrator to the conclusion the system in place between Catalyst RTW and AllFacilities was not a legitimate attempt to return the injured worker into the job market. The vocational counselor explained in her testimony Petitioner was “doomed” to fail at this position. Therefore, the Arbitrator awarded permanent total disability benefits. We consider that a very challenging decision.

Although Catalyst RTW sounds like a tool to assist in difficult IL WC cases involving return to work, our IL WC readers may want to carefully consider using their services and possibly choose more bona fide vocational counselors. As we have advised our readers, there are lots of claimants out there who try to appear to look for work while never actually finding work. It is our understanding some attorneys coach them to do so. Our vote is to push reluctant claimants into trucking, ambulance or 911 dispatch jobs that are seated positions and actually pay solid money. If you have interest in this approach, send a reply.

            -------------------------------------

Synopsis: Congrats from the U.S. Workers’ Comp Community to Beau and Mary Claire Spreck!!

Editor’s comment: Last weekend at the Drake Hotel in Chicago, Beau and Mary Claire Spreck were united in matrimony. Beau and Mary Claire both attended Lyons Township High School and lived just down the street from each other in the Arrowhead Farm subdivision. In the summer of 2006, they started officially dating. They remained a couple through college and finally tied the knot!

More information on their wedding can be found online at: http://www.weddingwire.com/weddings/3304726/wedding_new_website#!/website/2429769 We note both sides of the IL WC matrix were present with Jim and Mary Marszalek present for the Petitioner side and Shawn/Debbie Biery and Gene/Angela Keefe holding down the fort for the defense side.

Beau is with EagleOne CMS, a leading solutions-based independent medical case management company in the United States providing workers compensation case management services since 1991. You may see him at national, regional and local events.

We wish this great couple the very best as they continue a wonderful relationship and start to build a family.

8-10-2015; Can IL WC Reforms Sought By New Governor Rauner Break the Budget Deadlock?; Will Obamacare Influence Workers Compensation?; Will “Killer-Math” of Gov’t Pensions Kill Illinois? and much more

Synopsis: All Eyes Turn to Springfield--Can IL Work Comp Reform Agreement Break the Deadlock?

Editor’s comment: Our Governor is keeping the state on the “verge” of disaster to try to force the other side to make progress in lots of pro-business areas. Most media sources indicate the State of Illinois financial and budgetary situation remains a mess with Gov. Bruce Rauner, a Republican, and House Speaker Mike Madigan and Senate President John Cullerton, Chicago Democrats battling over the state budget with a deadlock that has left Illinois without a spending plan since June 30. Last week, it was reported Madigan, Rauner and Cullerton indicated workers’ compensation reform was a legislative area where compromise was possible. We consider the following to be important developments for our IL WC readers to follow closely. It seems to us the two sides remain fairly distant, as you will read.

Governor Rauner sent a five-page letter to the General Assembly, thanking legislators for their willingness to potentially compromise on proposed reforms to workers’ compensation laws, outlining areas of agreement, disagreement and issues to discuss. In response, the IL State Senate elected not to act on House Bill 1287. We felt HB 1287 was and is a kooky bill passed by the IL House of Representatives on June 4 that included a provision to prohibit insurers from charging "excessive rates." As we reported when we saw this bill in June 2015, we consider this legislative effort counterproductive to the important progress made in cutting workers’ comp costs and litigation.

In response to Governor Rauner’s letter, the IL Senate approved its own version of workers' comp reform, SB 162, which included some of the ideas contained in Rauner’s memo and missed on others. After Senate passage, the next day the IL House referred it to its Rules Committee where it currently sits. This new IL Senate bill contains a definition of causation Governor Rauner finds objectionable, but creates a WEAR or Workers' Compensation Edit, Alignment and Reform Commission to further review existing laws. As we have advised our readers, the role of the WEAR Commission is identical to that of the existing Illinois Workers’ Comp Commission that already has ten members. There are already lots of advisory panels for the IWCC—do we really need a sixth/seventh blue ribbon WC panel so our legislators feel like they have done something?

SB 162 also moves the IL Workers’ Compensation Fraud Unit from the do-nothing IL Department of Insurance to the IWCC. A recent media report indicated the IL WC system had six convictions in a year where other states our size get that many WC fraud convictions in a month. We agree something needs to be done to actually have WC fraud investigations occur and mean something to this industry.

What Important Things are Changed In SB 162?

Traveling Employee WC Coverage Expanded--the prior limitation or proposed reform of the concept of “traveling employees” is not limited at all but greatly expanded to cover most activities when an employee “travels away from the employer’s premises.” Basically, anything a worker in transit does is going to be fully covered under Illinois workers’ comp with dramatically higher costs. Police officers, firefighters, truckers, bus drivers, garbage handlers, anyone who works behind the wheel of a vehicle would now be wholly covered all day for anything they might “reasonably” be expected to do or mis-do. We urge our leaders to jettison this massive expansion of workers’ comp benefits that is confusing, contradictory and unneeded. If an accident doesn’t arise out of and occur in the course of employ, it shouldn’t be covered—this legislation completely contradicts that basic concept and greatly, almost wildly expands WC coverage. If you don’t understand how and why, send a reply.

The Proposed 30% IL WC Medical Fee Schedule Cuts are Dropped In this New Senate Bill--What our physician, hospital and healthcare givers among our readership may note is the proposed deep cuts to the IL WC Medical Fee Schedule have been redacted, dropped and omitted. As Dr. David Fletcher of SafeWorks Illinois and others have noted, these changes might have resulted in healthcare givers turning down work comp patients, as WC care comes with more required documentation and the higher charges for such care allow healthcare providers to make up the difference. As you may read below, Governor Rauner hasn’t given up trying to get these cuts into place.

Whether successful compromise effort on workers’ compensation reform can break the IL budget stalemate or not is challenging to predict. Gov. Rauner said he supports a spending plan that includes a moderate tax increase if Democrats agree to a list of to-do items, including workers’ compensation reform. A related concern is whether SB 162 is “enough”—have IL State Democrats handed our Governor a workers' comp reform bill he feels is bona fide and worth ending the battle?

Jay Dee Shattuck, a lobbyist for the Illinois Chamber of Commerce is quoted as confirming our view rising IL workers’ compensation benefits could cause Illinois to lose business to neighboring states. Jay feels legislative compromise could help, but he does not like either bill. He is quoted as saying “(HB) 1287 is a terrible bill and (SB) 162 is a bad bill”. “They both drive up the costs of doing business in the state." The defense attorneys at KCB&A wholeheartedly agree with this knowledgeable leader.

Other issues Gov. Rauner told lawmakers he was willing to discuss or has to have included are the use of electronic billing records, limited coverage for injuries to employees incurred while traveling for work, reducing medical fees for specialties like surgery whose permitted fees far exceed Medicare costs, a proposal for an ombudsman to help guide people through the IL WC process, more prompt payment for medical expenses and use of AMA guidelines when determining impairment. In contrast to SB 162, Governor Rauner wants to limit the “traveling employee” concept “The travel must be necessary for the performance of job duties and the employee must receive reimbursement for the travel,” Gov. Rauner said in his letter. "We are seeking to clarify that injuries sustained while traveling to or from work and injuries that occur while running a personal errand or on break are not compensable.” We strongly agree with our new Governor’s approach to the ‘traveling employee” concept.

Gov. Rauner continues to seek a reduction of allowable fees for medical specialties that are substantially higher than the payment allowed under Medicare. He has backed off from an earlier suggestion to cut medical fees by another 30% across the board. Medical rates were already cut by 30% in the 2011 reform legislation. “Surgery costs are the most egregious WC fee schedule abuses, with rates 300% to 400% above Medicare rates and 100% to 200% above group health rates,” Rauner said in his letter.

We will continue to watch and report what is happening in our State Capitol. We appreciate your thoughts and comments. Please feel free to post them on our award-winning blog.

            --------------------------------------------------------------

Synopsis: The Patient Protection and Affordable Care Act or PPACA--Will Obamacare Influence Workers Compensation?

Editor’s comment: John Campbell and Gene Keefe will be criss-crossing Illinois this week presenting to various audiences about the PPACA. If you have interest in such a presentation for your company or local industry or business group at a future time, send a reply.

We note the blog of Joe Paduda called Managed Care Matters accurately points out Obamacare appears to be embedded in our country with minimal debate or movement to dramatically change it among the Republican party leaders on the topic:

[D]uring the GOP Presidential candidate debate last week, there were fewer mentions of Obamacare than there were candidates on stage. Over the two hour debate, the biggest change to the American health care system in fifty years was mentioned 8 times. Abortion, Planned Parenthood, ISIS, immigration, Mexico, Russia all garnered more time than health reform. If there was any doubt whether the Affordable Care Act is here to stay, the lack of attention paid to PPACA by the moderators and candidates should lay that to rest.  That’s not to say all is bright and cheery in health reform land; rates are going up (albeit at much lower rates than predicted); there are still millions of Americans without coverage; and the wrenching changes in our health care delivery system (some – but by no means all – resulting from PPACA) are being felt far and wide. While almost all of the 17 GOP candidates have positions on health care, health reform, and PPACA, health care reform is no longer an issue worthy of debate.

Perhaps the most telling evidence that PPACA is here to stay is this: Sen. Marco Rubio purchased health insurance thru the D.C. Exchange (and took advantage of a $10k federal subsidy), a decision that seems stunning but wasn’t worthy of mention by any of the moderators or fellow candidates.

What does this mean for you? PPACA is here to stay. See more at: http://www.joepaduda.com/#sthash.NrRtE9yC.dpuf

In our view, all WC participants need to have a basic understanding of the PPACA to get an idea how it may change your jobs and goals. Please remember Obamacare for some workers has moderate to high deductibles with some subsidies. We still feel most U.S. citizens aspire to 100% on-demand coverage of all conceivable medical care and prescription drugs—that model isn’t going to work indefinitely. One has to wonder if deductibles will ever come to the workers’ comp arena to try to make the injured worker join, even minimally, in the cost or cost-effectiveness of their extended medical care.

We note the WCRI or the stat-rats at the Workers Compensation Research Institute are closely watching the development and implementation of the PPACA and how it is going to influence all U.S. workers’ comp programs. Obviously, the expanded access to group healthcare with substantial government subsidies is going to be felt as the years roll on. In line with the WCRI’s ongoing analysis of the PPACA and its impact on workers’ compensation systems throughout the United States, everyone in our industry will be watching for cost shifting of medical care to workers’ comp insurers from private and public group health insurers.

Certainty of healthcare coverage for lots more folks under Obamacare should prevent questionable or fraudulent workers comp claims from being “created” and/or filed with a goal of insuring full coverage of medical care under workers’ comp.

Some national commentators have speculated because PPACA promotes an increase in technology such as wearable monitoring devices, telehealth Google Glass, 3-D printing, internet connected sensors, robotic devices and other additional technological advancements. Workers’ comp insurers and TPA’s who have been slow to sign off on healthcare technology may be amenable to doing so if such innovations lower the overall cost of work-related treatment. There is a defined variance in state laws with respect to introduction of healthcare technology solutions. National research indicates forty-three states and the District of Columbia do provide Medicaid reimbursement for telehealth services.

There is no question PPACA has very limited WC references in the entirety of the PPACA—if you look carefully, there are only two specific references to work compensation in the PPACA. The first reference is found in Section 2401, which deals with providers of home and community based attendant services. The second reference is where the federal legislature seeks guidance with respect to how the Social Security Act applies to automobile and work compensation healthcare cases.

Most commentators feel the PPACA is still way too new to truly analyze how heavily it will influence workers’ compensation claims in the United States. As more studies are published, if they demonstrate more people get more access to better health coverage under the PPACA, workers’ compensation claims and costs of medical treatment associated with claims may go down.

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

            -----------------------------------------------------

Synopsis: Will “Killer-Math” of Gov’t Pensions Kill Illinois?

Editor’s comment: We saw an amazing article in Crain’s Chicago Business from the legendary Dave McKinney titled—The Illinois Pension Disaster, What Went Wrong? Take a look http://www.chicagobusiness.com/section/pensions

We don’t mean to unfairly criticize Mr. McKinney but we hate the term "unfunded pensions" because it sounds to our readers like there are no "funds" to pay the retirees. To the contrary, IL government fake pensions are "back-funded" because we end up waiting until after the worker is no longer working to find all the money needed to pay their fake pensions via borrowing or new taxes. The “back-funding” of government fake pensions is why we call them fake—most folks think of a “pension” as being front-funded. The “back-funded” monies are eventually paid by taxpayers to gov’t retirees years and decades after retirement because there isn't nearly enough money set-aside up front to cover their retirement needs.

We feel Illinois is the land of the “government-double-salary”—one job with a salary while a gov’t worker is working for us; one salary with giant increases outlined below after they have stopped working in government but were vested in the fake gov’t pension program. We know at least three friends in their early 60’s who are basically on the dole because of limited government service but they and thousands more like them will be paid by you and me for the rest of their lives with annual 3% fake pension raises.

Please note what we consider simple and immutable “killer-math” that isn’t going to truly allow Illinois to recover with the current fake gov’t pension programs in place. Unlike many states where pensions are at 60% of the highest salary, most IL gov’t retirees start at 85% of their highest salary with 3% compounded annual increases. Do the killer-math with us for a second in your mind—after one year, they are making 88% of their highest gov’t salary, in the second year, they are at about 91%, third year 95%, then 99%.

Please don’t stop there—math is math, folks. At about their 23d year out, at 3% compounded increases, they will have doubled their initial annual pension. Around the 37th year, their post-employment pension payments will have tripled and continue to rise. Don’t trust us, you can do the calculations here: http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Ballotpedia indicates there are over 962,000 folks currently in IL government fake pensions programs. They indicate our state has 656 fake government pension plans. This growing problem is causing businesses and individuals to leave the state in droves because I/we don’t want to owe government workers these fake pension benefits for the rest of their lives. http://ballotpedia.org/Public_pensions_in_Illinois

Please also note there are thousands of participants that are double- and triple-dipping to have two or three or more fake pensions, so their doubled fake pension income is going up 6% each year.

We repeatedly point out you can’t and shouldn’t blame participants. They didn’t cause or contribute to the disaster. But there remains lots of uncertainty for participants that is unfair to them—they are paying what they were told to pay and no one knows what may happen with the money runs out—the Chicago Tribune made this chilling point about City of Chicago fake pensions in their editorial column today. We hope the participants start to understand killer-math in gov’t fake pensions and reach out to their legislators and Governor along with the rest of us. We need a united front to make sense of these issues moving forward.

In the similar vein, the so-called "pension clause" in the IL Constitution is a "protect-government-retirees-from-legislators-and-the-Governor-at-the-expense-of-taxpayers" clause. Understanding you probably can’t change existing pension benefits, if we want a clause to protect-future-taxpayers-from-legislators-and-the-Governor, we suggest a state constitutional amendment limiting government retiree pension pay to the sum of three things

• Their pension contributions during their service,
• Whatever the government put into the program for them while they were employed for us and
• Investment income at any time.

From the perspective of what we have said above, we feel there are at least three government pensions that are virtually "impossible-to-prefund."

1. Chicago school teachers put 2% of their annual pay into their pensions. After twenty years, they are fully vested but have only contributed 40% of one year’s pay—they get all that money back in the first six months of retirement. To “pre-fund” an 85% pension with 3% compounded increases based on the killer-math above, we think a CPS teacher would have to put their entire salary into the pension program and the CPS would have to more than match their salary. That is clearly a fake pension program requiring enormous pre- and post-funding challenges that city taxpayers shouldn't have to eat.

2. Full Circuit Court judges currently make $203K a year with 3% annual increases guaranteed in the IL Constitution. They only need 9 years of service with limited contributions to be fully funded and receive 85% of their highest pay the first year with guaranteed 3% compound raises for life. They start their pensions at $170K a year. As we outline above, after 23 years, a retired judge would be getting close to $400K a year. We assure you a vested IL Circuit Court judge can receive as much as $9M from their fake pensions, if they live long enough, for just nine years of service. In our view, based on the killer-math, such a pension truly can't be "pre-funded" without having judges contribute their entire salary for the nine years and then “matching” that by giving judges the equivalent of about $700K a year in salary and government pension matching contributions. Do you understand this immutable math and how crazy the numbers are?

3, Finally, IL legislators are vested in only four years of part-time service. They clearly don't contribute one full year of pay to then get paid for the rest of their lives. The late Judy Baar Topinka worked for six years as a legislator and contributed about $36K to the pension program. When she passed at age 70 earlier this year, her pension payout was $150K a year. If she had lived 20 more years, she would have received over $4M for her contribution of $36K. As I indicate throughout this article, we think IL legislators would have to contribute their entire salary and the state might have to quadruple what they are paid to pre-fund what they receive in retirement. Do we understand how nutty it is to pay a lifetime pension to a part-time legislator after only four years of service needed to become vested?

Our challenge to our readers is to tell us the options to get out of this business-busting pension disaster before everyone and every business moves elsewhere as is happening right now.

Here are some quick options that need lots more thinking:

1. An emergency “Con-Con” or constitutional convention to completely rewrite the whole thing for existing and new workers.
2. A constitutional amendment to try to do the same thing.
3. End/abolish the Judicial Retirement System and the Legislative Retirement system for new judges and legislators because they are already well-taken care of.
4. Consider terminating or re-starting all state workers and rehire them with new and less-fake pension agreements.
5. Consider outsourcing lots of state jobs to staffing companies so pensions aren’t owed.

We hope you have better and less-controversial thoughts—send them along. We don’t see a realistic financial future for this state if the gov’t fake pensions aren’t changed in some fashion. You have our permission to use any or all of these ideas whenever you want. We appreciate your thoughts and comments. Please post them on our award-winning blog.