5-2-16; 'Dirty Lancing'- IL App. Court Again Reverses To Insure Benefits Awarded; Lindsay Vanderford Analyzes Important Kotecki Ruling; Shocking Child Support Judgmt--Don't Let It Happen to You

Synopsis: “Dirty Lancing”--Illinois Appellate Court, Workers’ Comp Division Maintains Its Role as a Super-Commission to Readily Reverse WC Denials.

Editor’s comment: Taking you back down the path of the “manifest weight of the evidence” rule in IL work comp, we remember the last two decisions on the subject for the IL Supreme Court were Sisbro and Twice Over Clean, both decided about a decade ago. In those rulings, the august members of our highest court were considering awards of benefits from the IL Work Comp Commission. When the decisions were taken on appeal to the IL Appellate Court, WC Division, the reviewing panels reversed to deny benefits. These well-reasoned and carefully thought-out Appellate Court decisions clearly outlined their view that a reviewing court could do so based on the “manifest weight of the evidence” rule. The Appellate Court found the facts didn’t match the record and denied. After lengthy consideration, the IL Supreme Court made it clear the interim reviewing courts weren’t to reverse on the facts and, they are only to reverse the IWCC when the opposite conclusion is very clearly apparent and there is no real support in the record for the factual decision the IWCC reached.

Once those rulings came down, most veteran defense lawyers, risk managers and claims handlers were unimpressed. As the years have rolled on, we have seen ruling after ruling come from the Appellate Court where WC denials mystically turn into benefit awards. It appears to have become so common, the current Appellate Court, WC rulings no longer even try to hide the obvious fact the Appellate Court in work comp appears to act as a “Super-Commission” to insert their own view of the facts whenever they feel it appropriate. In our respectful opinion, this is in direct contradiction to the rulings from the Supreme Court we cite above.

So, last week, we saw a new decision in Dunteman v. Illinois Workers' Compensation Comm'n, (issued April 29, 2016). In this ruling, Claimant filed an application for workers' compensation benefits for a foot blister sustained during work. In our view, the veteran and knowledgeable defense attorney for Big Cat or Caterpillar Tractor stipulated there was an “accident” when this Claimant’s foot rubbed in his shoe.

Claimant supposedly developed a blister on bottom of his left foot at work from having to repeatedly push a clutch down forcefully in operating a machine. A medical concern that clouded everything was Claimant was an uncontrolled diabetic. After Claimant lanced this foot blister using what he testified was his version of a sterilized needle, he later developed a serious infection in the foot that appeared to be due to diabetes and not the blister. Either way, for medical reasons clearly in dispute, the foot and toe required several foot surgeries and partial amputation of one toe.

As to lancing of the blister, the IL Appellate Court decision states:

The claimant testified that on or about June 25, 2011, while bathing, he noticed a water blister under the callus on the bottom of his left foot between his third and fourth toes. He went to the kitchen, sterilized a needle by boiling it in hot water on the stove, propped up his foot, and inserted the needle to relieve the pressure of the water blister. He testified that pure "water" drained from the blister. He then used peroxide on a cotton swab to wipe the area. He indicated that he had performed this procedure, which his mother had taught him at a young age, many times in the past without complications. He stated that no physician had ever told him not to pop blisters on his foot in this manner.

To our understanding the word “water” in the paragraph above isn’t water; it is opaque bodily liquid produced in infected tissue, consisting of dead white blood cells and bacteria with tissue debris and serum. There is a possibility Claimant caused infection to the tissue lanced due to any number of reasons, including how clean his hands were, the sanitation in the area where he lanced the blister and numerous other factors. Plaintiff’s counsel hired their medical version of a “hired gun” who said everything was related and caused by work.

Defense counsel for Caterpillar hired their medical version of a hired gun, a noted specialist who is board certified in internal medicine, occupational and environmental medicine, and public health and epidemiologic medicine. Caterpillar’s expert found no causal relationship between the surgeries and Claimant's work duties and asserted Claimant's infection "happened on the top of his foot, not on the bottom." Although this expert acknowledged Claimant's repetitive use of the clutch caused a foot blister and once a blister has formed, complications can arise from it, he believed that neither the blister nor the lancing of the blister contributed to the claimant's foot infection. The defense expert testified Claimant had uncontrolled diabetes and was not exercising proper diabetic foot care. He testified Claimant had roughened and chapped feet with slight cracking of the top of his left foot. On examination, this noted expert found brownish discoloration consistent with atrophic changes involving the left foot consistent with poor blood supply in addition to the lack of any diabetic foot care.

In reliance on this careful and clearly outlined expert testimony, the Commission panel denied benefits. In our view, there is strong support in the record for their determinations and factual findings. Based on the rulings in Sisbro and Twice Over Clean, the Commission decision should have been quickly affirmed by the reviewing courts.

Instead, we feel the Appellate Court, WC Division unanimously drew their own Plaintiff-focused conclusions, which they had to do to reverse. They ruled even if Claimant's lancing of blister was the immediate cause of infection, the infection would not have occurred "but for" the existence of work-related blister. Thus, his employment remained a cause of his current condition of ill-being.

We ask our readers to carefully consider the factual basis for the Commission’s decision is the lancing of the blister and the blister itself had nothing to do with the problem for which Claimant was being treated—the defense expert said there were problems away from the site of the blister and the “dirty lancing” issue. The defense expert felt the problems leading to surgeries and amputation of a toe were due to improper diabetic foot care and skin/tissue problems at a different part of the foot. If that is the basis for the IWCC ruling, how does the appellate panel properly substitute their own version of the facts and resolve medical issues wholly contrary to that of the IWCC? You have to decide--does that view comply with the last rulings of our highest court on factual issues?

Another concern for the IL business and insurance community is this ruling is going to be another demonstration of the unwillingness of our reviewing courts to join in the effort to rein in IL WC costs. Caterpillar CEO Douglas R. Oberhelman is a strident critic of the IL WC system and this ruling is going to be like throwing gasoline on a box of lit matches for him. We hope someone some day gets a message to the members of this appellate panel to try to act in a more moderate fashion while there are still a few large businesses like Caterpillar left in this state.

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

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Synopsis: The “Kotecki Cap” – Good To the Last (Shoe) Drop(s). Thoughts and Analysis by Lindsay R. Vanderford, JD.

Editor’s comment: The IL Appellate Court confirms a Kotecki defense is a set-off which does not have to be pled unless accident is at issue, and an employer can choose to waive its 5(b) lien after trial.

On April 28, 2016, the IL Court of Appeals for the Third District affirmed the Circuit Court in its decision in Burhmester v. Steve Spiess Construction, (issued April 28, 2016). The holding: an employer is not required to raise its Kotecki setoff limit or workers' compensation lien as an affirmative defense or before a trial. As it was undisputed Plaintiff Burhmester was an injured employee receiving compensation under the Illinois Workers Compensation Act from his employer, L.J. Keefe Co., there was no need for L.J. Keefe Co., who was the third-party Defendant in the civil action, to place the Kotecki issue before the jury by pleading an affirmative defense, and the court could address the issue by post-trial motion.

In brief reminder, Kotecki comes from a 1991 Illinois court decision involving a worker’s job-related injury. A contractor’s employee was hurt on the job and sued while working at a property owner’s location. After collecting workers’ compensation benefits, the worker sued the property owner for damages arising from his injury. The property owner then sued the worker’s employer for contribution. The suit resulted in the decision that an employer’s maximum liability for contribution is limited to the amount of the workers’ compensation claim. This is now referred to as the “Kotecki Cap.”

In Burhmester v. Steve Spiess Construction, Burhmester was working for an electrical subcontractor, L.J. Keefe Co., when he sustained a severe electrical shock. L.J. Keefe Co. was subcontracted by Spiess Construction, as the general. Burhmester brought a workers’ compensation claim against L.J. Keefe Co. and a negligence claim against Spiess Construction. Spiess Construction then filed a third party action against L.J. Keefe Co., attempting to assert L.J. Keefe Co. should contribute to any money damages awarded to Burhmester in the negligence claim.

At the close of evidence, Spiess Construction made an oral motion for a directed verdict against L.J. Keefe Co. asserting this employer had provided no evidence to establish its Kotecki claim. The trial denied the motion, deciding Kotecki automatically applies in contribution claims, and a claim under Kotecki does not need to be raised as an affirmative defense or proven at trial. The jury awarded Burhmester $534,608.82 and apportioned liability 20% to Burhmester, 30% to Spiess Construction, and 50% to L.J. Keefe Co.

L.J. Keefe Co. then filed a post-trial motion to waive its Section 5 lien and dismiss Speiss Construction’s contribution action. L.J. Keefe Co. argued it could choose to waive its workers’ compensation lien after trial. The trial court granted L.J. Keefe Co.’s motion to dismiss the complaint and vacated the judgment against L.J. Keefe Co. Spiess Construction was given a set-off of $95,487.23 (the amount of the WC lien).

On appeal, the Third District affirmed the trial court’s decision, noting case law including Kim v. Alvey, Inc. and LaFever v. Kemlite Co. which clearly allow an employer to raise its lien in a post-trial motion and that by waiving that lien, the employer may avoid liability for contribution to other parties allegedly responsible for the worker’s injury.

The Appellate Court clarified, “…a defense under the Act does not need to be plead before the matter is tried before a jury to be controlling. …[T]he fact that the plaintiff was an injured employee receiving compensation under the Act from L.J. Keefe Co. was not in dispute. Thus, there was no need for L.J. Keefe Co.  to place the issue before the jury by pleading an affirmative defense. Rather, the trial court could effectively address the issue by means of a post-trial motion.” Burhmester at 18. 

Thanks to this decision, we have a road map for protecting employers’ liens. If accident is at issue, be sure to plead the Kotecki setoff and provide evidence of the lien. No question of accident, no pleadings necessary. That lien remains enforceable until the final decision has come down, at which time, an employer can either enforce or waive the lien and remove itself from liability for contribution. A quick cost-benefit analysis can be performed, and the determination of whether to file that post-trial motion should be at hand.

This article was researched and written by Lindsay R. Vanderford, JD.  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: Remember WC Folks, Child Support Liens Attach to All Pending WC Claims and Benefits!

Editor’s comment: We get asked all the time about what liens will legally attach to work comp claims. The main kahuna of effective liens on WC benefits are child support liens. If you have notice of them in any fashion, you have to address them during payment of any WC benefit or settlement.

Failure to address and pay benefits can come with a hefty penalty. Last month, a Cook County Circuit Court Judge on issued one of the largest child support rulings in Illinois history, ordering Country Chevrolet Inc. in Herscher to pay $2.3 million in a case that originally was filed for $7,820 in past due payments! This massive judgment, levied by Cook County Judge Bonita Coleman, surpasses a previous case that went all the way up to the Illinois Supreme Court, ultimately resulting in a judgment of $1.2 million.

Plaintiff in this recent case, currently of Flossmoor, was married to Country Chevrolet's former finance manager. The mother argued the Herscher dealership intentionally shirked state law when it didn't withhold part of the finance manager’s earnings that should have gone toward child support. The mother filed the lawsuit in 2010 over $7,820 and Country Chevrolet eventually paid it. But under another part of the state's child support law, employers can be fined $100 per day for intentionally failing to withhold wages; and those overdue payments can be compounded.

While possibly being the largest child support amount ever granted by a judge in such a case, it is not the first ruling of its kind. The Illinois Supreme Court in 2007 upheld a ruling in favor of child support recipient for $1.2 million in penalties in a precedent-setting case. In recent years, the IL State Legislature has sought to strengthen child support laws by removing caps on penalties and damages.

Country Chevrolet attempted to defend itself by arguing the missed payments were clerical errors and the finance manager was an independent contractor — not an employee. In the ruling this week, Judge Coleman ruled Country Chevrolet's intentionally ignored withholding monthly child support payments. The company wrote a check that bounced, produced witnesses in court whom the judge deemed not credible and ultimately failed to make a convincing legal argument against the claims.

If you have questions and/or concerns about child support issue in a pending WC claim, feel free to send a reply on a 24/7/365 basis and we will get back to you to insure you are protected in handling resolution.

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Synopsis: Kevin Boyle’s NEW Indiana WC RATE SHEETS ARE HERE, if you want the new one, just send an email!

Editor’s comment: We now have the even newer 2016 IN WC Rate Sheet, adding that recent Indiana WC mileage change. We are happy to send to anyone who asks. For IN WC adjusters, you still need to check your PPD Reserves and insure they are in line with the new rates. To get a complimentary copy, simply email Kevin at KBoyle@keefe-law.com and/or Alea at AMcNellis@keefe-law.com for Kevin Boyle’s Updated IN WC Rate-Sheet!

AGAIN—If you want just one or a dozen or more, simply reply to Kevin at KBoyle@keefe-law.com and/or Alea at AMcNellis@keefe-law.com  They will get a copy routed to you before they raise the rates again! Please confirm your mailing address if you would like laminated copies sent to your home or office!

4-25-2016; Do IL Employers Get Credit for Prior 'Arm As A Whole' Awards?; Don't Blindly Trust Claimant Attorneys About Legal Issues; Get Kevin Boyle's IN WC Rate Sheet; John Karis on Psych Exams

Synopsis: In IL Work Comp, Is An Employer Provided Credit for Prior “Arm as a Whole” Awards/Settlements When There Is A New Arm Injury?

Editor’s comment: Illinois workers’ comp is a very odd place to work sometimes. For reasons known only to our Appellate Court, Workers’ Comp Division, in a controversial ruling in 2012 titled Will County Forest Preserve District v. Illinois Workers’ Compensation Comm’n, 1-14-3044WC they unexpectedly ruled the ‘shoulder’ was no longer to be considered part of the “arm.” In so doing, they reversed about one hundred years of prior and otherwise unremarkable workers’ comp law, rulings and settlements where the shoulder was always considered part of the arm. With respect to the members of this panel, we also think their ruling simply doesn’t match our version of common sense—if you punch someone in the shoulder, most folks think you have struck them in the arm.

Why did the “shoulder” suddenly get legally divorced from the arm in IL WC? Well, we feel there are lots of theories that start with the Plaintiff/Petitioner bar and then somehow make it into law. There can be no area of jurisprudence in this state where the Appellate Court “legislates” more than in workers’ compensation. Many folks feel this comes from ITLA and its leaders who have enormous say before the IL Courts, as they legally donate millions of dollars to IL judicial campaigns. ITLA is also credited with creating what may soon be the highest judicial salaries in the nation with an annual 3% kicker every year. Illinois judges also have the highest “fake” judicial pension program on this planet—we call it “fake” because it is wildly unfunded and most judges/justices who have been retired for a couple of years aren’t receiving pension benefits from the fake pension fund, they are getting paid by you and I from current tax dollars.

So what’s wrong with the concept of judicial legislation in work comp? Well, judges/justices can only decide the new law based on the facts in front of them—unlike legislators, judges/justices cannot consider all the nuances and impact their rulings will have in the future when different facts are presesnt. What does that have to do with taking injuries to the shoulder away from being considered injuries to the “arm”—well, under the new “division” of an arm, do IL employers get credit for prior “arm as a whole” injuries? We are jokingly using the phrase “arm as a whole” because in “body as a whole” awards under Section 8(d-2), there is no legislative language which provides credit for prior awards or settlements. In our view, the reason the Will County Forest Preserve claim was brought to the Appellate Court, WC Division with precisely that idea in mind—strip out any credit for prior shoulder awards/settlements so each IL WC shoulder claim occurs in a vacuum.

Well, what if the injured worker had a prior shoulder claim that was awarded before 2012 for loss of use of the arm?

In Dorsey v. Illinois Workers' Compensation Comm'n, (decided April 8, 2016), the Appellate Court, WC Div., considered a claim by a City of Chicago street light maintenance electrician employee who filed a claim for workers' compensation benefits for undisputed injuries to his left arm. Claimant acknowledged he had a previous injury to his left shoulder (rotator cuff) which resulted in a settled WC claim with his employer for 30% loss of use of left arm. Under traditional analysis, any new injury to the same wing would come with a credit to the employer for that settlement.

In the new claim, the IL WC Commission awarded Claimant benefits for 15.57 weeks, which was for 37.5% of loss of use of left arm minus a credit for 30% loss of use of same arm as a result of prior settlement. Medical records from the prior injury indicate that surgery was limited to an area near the elbow, supporting the IL WC Commission's finding of prior injury to the arm and not the “shoulder.” The unanimous Appellate Court majority ruled the IL WC Commission properly awarded this municipal employer a credit per Section 8(e)(17) of Workers' Compensation Act, as the prior settlement was under Section 8(e) of the Act, for partial loss of use of left arm.

We think the whole thing is a model for how odd IL workers’ comp claims can be. We wish this reviewing court would simply return to the days where the shoulder was part of the arm so these anomalies would end. If they won’t, we hope some day the IL Legislature would consider the issue and legislatively “re-attach” the shoulder to the arm.

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

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Synopsis: “Mind-Speak” From the Workers’ Comp Section of the IL Bar Ass’n.

Editor’s comment: Like the article above, we saw an analysis of the “traveling employee” doctrine in the ISBA Section on Workers’ Compensation Law Quarterly Report for April 2016. The long-time and hardworking newsletter editor Rich Hannigan of Hannigan & Botha, Ltd. http://www.illinoisworkerscomplawyer.com/ is a strident and otherwise brilliant Plaintiff-Petitioner attorney from Lake County and the northern part of our state published this statement:

An injury that occurs when an employee is traveling from his home to work is not compensable because it does not occur in the course of the employment. An exception to this rule applies when employee qualifies as a “traveling employee.” A traveling employee is one whose work duties required him to travel away from his employer’s premises and therefore the traveling employee is considered to be in the course of his employment from the time he leaves his home until the time he returns.

What we take issue with is the summary fashion in which Editor Hannigan defines the term “traveling employee” as if that term appears in the IL WC Act or the IL Rules Governing Practice Before the Workers’ Comp Commission. We assure all of our readers it doesn’t. Again, you can take what you want from the “judicial legislation” that may or may not follow what he writes but we truly feel he should indicate he is providing you his personal theory or version of what he wants a “traveling employee” to be and why he wants it that way.

Please also remember lots of claims handlers mistakenly ask Claimant attorneys what they thing about a set of facts—from our experience, many claimant lawyers simply tell you how they think a situation is compensable. They rarely add the fact they are putting forward their theories or versions of what may be complex factual and legal questions. You can’t blame them for doing this—their job is to make money for their clients! We urge our readers including claims handlers, adjusters, risk managers, brokers, consultants to send an email for the KCB&A answer to any legal issue. We promise we won’t summarily tell you our version—we will give you research and case law on all situations or versions with the strengths and weaknesses of each. Just send a reply!!!

Attorney Hannigan does properly report the last decision on the topic by the IL Supreme Court in a ruling we shorten to Venture-Newburg-Perini denies the injured worker “traveling employee” status and work comp coverage. The editor also accurately notes the last decision by our Appellate  Court, Workers’ Compensation Division in United Airlines v. Illinois WC Commission also denies both traveling employee status and coverage to a flight attendant injured on a United Airlines flight.

In short, we think the definition of what is a “traveling employee” is in constant flux. In our respectful view, we believe Editor Hannigan may want to agree the definition he provides in the quote above doesn’t match his analysis of the last two rulings on the issue by our reviewing courts.

To any and all of our readers, we aren’t shy to tell you we despise the made-up term “traveling employee” because it is questionable as a tool and arises from quirky and unpredictable judicial legislation. We ask everyone on both sides of the IL WC matrix to stop using the goofy concept “traveling employee” that to a pure analysis makes little sense—no worker should get workers’ comp benefits for the simple/sole fact they are arguably “traveling” when injured.

We prefer you use the traditional legal analysis that actually is in our legislation along with that of many of our sister states—“arising out of and in the course of” employment.

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

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Synopsis: Kevin Boyle’s NEW Indiana WC RATE SHEETS ARE HERE, if you want the new one, just send an email!

Editor’s comment: We now have the even newer 2016 IN WC Rate Sheet, adding that recent Indiana WC mileage change. We are happy to send to anyone who asks. For IN WC adjusters, you still need to check your PPD Reserves and insure they are in line with the new rates. To get a complimentary copy, simply email Kevin at KBoyle@keefe-law.com and/or Alea at AMcNellis@keefe-law.com for Kevin Boyle’s Updated IN WC Rate-Sheet!

AGAIN—If you want just one or a dozen or more, simply reply to Kevin at KBoyle@keefe-law.com and/or Alea at AMcNellis@keefe-law.com  They will get a copy routed to you before they raise the rates again! Please confirm your mailing address if you would like laminated copies sent to your home or office!

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Synopsis: Are You NUTS?? When Can An Employer Demand a Worker Undergo a Psych Eval--Federal Appellate Court Finds No ADA Violation When the Facts Are There. Analysis by John Karis, J.D.

Editor’s Comment: Sometimes alarming statements made at work may justify a fitness examination. Earlier this month, the 6th Circuit Court of Appeals found the Ohio State University Medical Center did not violate the ADA with the use of a psychiatric examination to determine if Plaintiff was still capable of performing her job. The Federal Court found there was enough evidence to allow the employer to inquire whether the Plaintiff was still capable of performing her job.

In the case of Barnum v. The Ohio State University Medical Center, Plaintiff worked as a Certified Registered Nurse Anesthetist. In 2011, she was having issues at home due to a divorce and other family matters. A co-employee advised her supervisor that Barnum said, “…maybe I’d be better off (if) I wasn’t here, maybe I should just put a gun to my head, maybe I should just not be here.”

An anesthesiologist at the hospital also became concerned about the employee’s ability to concentrate on taking care of patients. A surgeon had to ask her twice to raise a patient’s operating table because she was not paying attention. When the surgeon got the employee’s attention, she said words to the effect that “I’m not worth anything or I’m worthless, what good does it do or what difference does it make, why should I even be here, maybe I should do everybody a favor and not be around.” For her part, the employee denied ever having this specific conversation with this doctor, but she did admit to being unable to adjust the height of the operating table and becoming frustrating and tearful.

Several doctors at the hospital became concerned about possible suicidal risk, leading the hospital to place the employee on sick time leave for one to two weeks in October 2011. The hospital requested a fitness-for-duty examination with a psychiatrist. The employee was concerned about doing this in part because her husband worked as a case manager for the OSU mental health department and he might see the medical records. Eventually the employee saw a psychiatrist, Dr. Masterson, on November 16, 2011. The hospital wanted to make sure this psychiatrist spoke with one of the physicians from the hospital who was aware of some of the comments that had been made at work.

Dr. Masterson prepared her report, which the employee delivered on February 22, 2012. In that report the doctor stated the employee was fit for duty and always had been. However, the doctor had not spoken with the key physicians at the hospital, so the hospital would not allow its employee to return to work. The employee filed a Charge of Discrimination with the Ohio Civil Rights Commission in April 2012 because she was not being permitted to return to work. Eventually, the employee signed an authorization allowing Dr. Masterson to speak with two doctors at the hospital about her behavior and comments at work. On July 31, 2012 the employee presented a second medical report from Dr. Masterson stating the conversations with the doctors did not change her opinion: The employee remained fit for duty.

On November 9, 2012, the employee was reinstated to her position. She then sued for discrimination on the basis of disability. She argued OSU violated the Americans with Disabilities Act by requiring her to undergo a medical examination that was not job related. The Sixth Circuit Court of Appeals disagreed:

An employer may request a medical examination when ‘there is significant evidence that could cause a reasonable person to inquire as to whether the employee is still capable of performing her job… The burden is on the Defendants in this case to show that the required mental-health evaluations were ‘job-related and consistent with business necessity.’

The Federal Court said in this case there were numerous and legitimate concerns about whether the employee could perform job tasks and concentrate at work. The hospital had been informed the employee had made a comment suggesting suicidal thoughts. “These circumstances constitute significant evidence that would cause a reasonable person to inquire whether the employee is still capable of performing her job.” The Court therefore dismissed Plaintiff’s suit.

It is important to consider this decision when handling delicate matters similar to this case. Psychiatric examinations are a sensitive topic but as this decision shows, if the warning signs are there and the employee is having difficulty completing their tasks, it is okay for an employer to request a psychiatric fitness examination to determine if an employee is capable of working.

This article was researched and written by John Karis, J.D. You can reach John 24/7/365 for questions about general liability, employment law and workers’ compensation at jkaris@keefe-law.com

4-18-2016; New IL Task Force for Healthcare and WC--Is It Real?; Lily Picazo Reports on Impairment Rating Presentation by WCLA; Kevin Boyle on Important IN Appellate Ruling on Retaliatory Discharge...

Synopsis: Will New IL Health Care Fraud Task Force Stop Medical Fraud and Waste in the State Work Comp System Or Is It Another Phony, Feel-Good Blue-Ribbon Panel?

Editor’s comment: Most folks forget work comp benefits are primarily health care costs. Three main benefits are provided to an injured Illinois worker

Ø  Health care coverage for reasonable, necessary and related medical care;

Ø  Lost time or wage replacement benefits called TTD and TPD in this state and

Ø  “The Settlement” or something for permanent loss or impairment.

Of the three main WC benefits, we are sure medical costs are supposed to be the main or highest cost in any work comp claim, whether in Illinois or across the globe.

With those factors in mind, on April 5, 2016, Governor Bruce Rauner signed Executive Order 16-05, creating a new IL Health Care Fraud Elimination Task Force (or IHCFETF) to address abuse and waste in our State's health care programs. From our perspective in the trenches, it appears their focus is going to be group healthcare for non-work-related injuries but one never knows. The Task Force will be led by Executive Inspector General Maggie Hickey and consist of 11 other designated officials, including the Director of the State Police Medicaid Fraud Control Unit. Unless further renewed by a subsequent Executive Order, the Task Force is currently scheduled to continue until June 30, 2019. The executive order can be viewed online https://www.illinois.gov/Government/ExecOrders/Pages/2016_5.aspx

According to the Order and the Governor's Office, the Task Force is directed to take a "comprehensive," "holistic," and "cross-agency, data-driven" approach to stopping and eliminating health care fraud, waste, and abuse in all IL taxpayer-funded programs, like the

Ø  Illinois Medicaid program,

Ø  State Employees Group Insurance Program, and

Ø  Workers' Compensation Program for Illinois agencies, boards, and commissions.

This Executive Order highlights Illinois's FY 2015 expenditure of more than $19 billion each year on IL State health care programs such as Medicaid and group insurance and notes the innovative and successful anti-fraud efforts being taken by the federal government, other states, the private sector, and various Illinois state agencies. The Task Force will reportedly draw on these approaches and other information gathered to recommend strategies for improving Illinois's fraud prevention and enforcement efforts.

Specifically, the IL Health Care Fraud Elimination Task Force has been charged with gathering information on areas such as:

Ø  The forms of fraud currently present in state-administered health care programs, including system wide fraud and abuse.

Ø  State agencies and resources currently involved in health care fraud prevention and enforcement.

Ø  Best practices for fraud prevention and enforcement used by the private sector, the federal government, and other states.

Ø  The use of data analysis, predictive analysis, trend evaluation, and modeling approaches.

Additionally, this Executive Order directs the Task Force to, among other things:

Ø  Develop, in tandem with industry experts, a multifaceted strategy for reducing exposure to healthcare fraud and recovering taxpayer funds.

Ø  Recommend improved internal controls for state agencies.

Ø  Identify, if applicable, additional agencies and resources that should be involved in health care fraud prevention and enforcement.

Ø  Assess how the observed best practices can be applied in Illinois.

Ø  Prioritize prevention and enforcement areas to optimize taxpayer investment.

The IL Health Care Fraud Elimination Task Force is required to conduct at least one public meeting per quarter. By October 2016, submit an initial report to Governor Rauner on their identification efforts. Following the October 2016 report, periodic reports will be made to the governor and public on the Task Force's progress.

We hope this isn’t another phony, feel-good blue-ribbon panel that never meets and never does anything. We remember the 2011 Amendments to the IL WC Act created the IL State Workers’ Compensation Program Advisory Board designed to review, assess and make recommendations to improve the State workers’ compensation program. The Governor was to appoint one member of the IWCPA Board with the Speaker Of The House and Minority Leader to appoint other members. Members of this board were to serve three year terms. Our kooky legislative leaders debated who was to be on the IWCPAB for a long time and finally made their picks. Thereafter, the IWCPAB has never had a single meeting or done a darned thing. Turns out IL State government is still shoveling out over $100M in work comp costs to state workers that we feel is the highest in the U.S., other than California. You may note they still carefully track who is on this do-nothing Board at http://appointments.illinois.gov/appointmentsDetail.cfm?id=428.

Please also remember the IL State WC Program still isn’t using what one of our clients called a “complete no-brainer” to save medical costs—an IL WC PPP or Preferred Provider Program. Only in Illinois would our goofy legislators create and sanction this solid method of saving medical costs and not use it for their own workers. When it comes to saving tax dollars for Illinois taxpayers, we have one of the most comical groups of leaders in the entire country—it appears they just don’t get it. Let’s hope someone tips the IHCFETF to this simple change to save zillions.

We also hope someone in the new IHCFETF will start to notice there are a number of doctors, clinics and chiropractors across the state that engage in predatory practices to manipulate billing/coding to insure they demand astronomically high medical charges for questionable medical care. For one hilarious example, we saw a doctor prescribe a tube of “pain” paste that he wanted $5,000 for—the tube’s content included Ketamine, a horse tranquilizer and psychedelic drug. Everyone knows who does silly stuff like this and little is done to actively stop it. For another example, the concept of having patients “pre-assign” medical rights to allow civil actions directly against employers and insurance carriers is, in our view, another such questionable medical/legal practice.

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

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Synopsis: Illinois Workers' Compensation Lawyers' Assn. CLE Presentation on the Continuing Development and Implementation of AMA Ratings. Thoughts and analysis by Lilia Y. Picazo, JD.

Editor's Comment: On April 14, 2015, WCLA representatives discussed various cases using impairment ratings in a continuing legal education format. As you know, Section 8.1(b) of the Act requires the level of permanent disability be based on the following factors:

Ø  Reported level of medical impairment rating;

Ø  Occupation;

Ø  Age;

Ø  Future earning capacity; and

Ø  Evidence of disability corroborated by the treating medical records.

From the IL WC Act "No single enumerating factor shall be the sole determinant of disability. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order." It is initially important to distinguish "disability" and "impairment" as they relate to a permanent partial disability award. The most current AMA Guide indicates disability is determined by an administrative law judge and may or may not have a relationship to impairment. In other words, the AMA impairment rating is an element of the permanent partial disability award.

The jury remains out on this concept as the Arbitrators and IWCC still sort of follow ratings and sort of don’t. It seems the word “shall” in the IL WC Act may be unclear to some of them. The following are examples of cases where impairment ratings were analyzed:

Darnel Dash v. City of Chicago: This case involved a 55 year old asphalt helper who sustained soft-tissue injuries to his lower back as a result of an undisputed lifting injury. Petitioner was prescribed physical therapy and medication and received twenty-nine weeks of TTD. From traditional IL WC reserve analysis, we would consider this a 0-5% BAW claim. At arbitration, the Arbitrator awarded Petitioner 6% MAW. In determining the PPD award, the Arbitrator analyzed the above five factors. We note no weight was given to an AMA rating as no PPD impairment report or opinion was submitted into evidence. With regard to the remaining four factors, the Arbitrator gave greater weight to Petitioner's occupation and age noting Petitioner was 54 years old at the time of the injury and the nature of his job required heavy-type work. While Petitioner returned to work at the time of arbitration, the Arbitrator gave some weight to Petitioner's future earning capacity and pointed out Petitioner had not yet performed his winter work responsibilities. The evidence of disability was corroborated by medical reports, including MRI exams.

The Commission modified the Arbitrator's award down to 3% MAW. The Commission noted most arbitrators use a claimant's advanced age as a factor in limiting a PPD award rather than increasing it because of the shorter period of time one lives with the disability. Furthermore, the Commission found the simple fact Petitioner had not yet commenced his winter work duties should not have been taken into account for increasing a PPD award based on future loss of earning potential.

Andrew Tull v. Evergreen FS: This case involved a 55 year old fertilizer plant manager who sustained injuries to both shoulders and back as a result of a slip and fall. Petitioner underwent two surgeries to his left shoulder, one surgery to the right shoulder and conservative treatment for the back. Under traditional analyses, the value would be 20% BAW for the double-operated shoulder and 15% BAW for the single operated shoulder with something like 0-5% BAW for the back strain.  Here, an impairment rating was performed by the eminent Dr. David Fletcher pursuant to the AMA Guide Sixth Edition. Dr. Fletcher provided an impairment rating of 0% for the lumbosacral sprain, 5% for the right shoulder and 4% for the left shoulder. At the time of arbitration, Petitioner was 55 years old with 26 years of experience as a fertilizer plant manager and had returned to his prior job. Petitioner's complaints were corroborated by the medical evidence presented.

Upon analysis of the relevance and weight of the five factors, the Arbitrator awarded Petitioner 12.5% MAW for the left shoulder, 10% MAW for the right shoulder, and 0% MAW for the back. In our view, the Arbitrator didn’t adopt Dr. Fletcher’s rating but the values were mildly lower. The award was affirmed and adopted by the Commission.

Paul Lowther v. Decatur Ambulance: This case involved a 52 year old paramedic who sustained injuries to his back moving a heavy tool box. Petitioner was treated conservatively with pain medication and physical therapy. At the time of Arbitration, Petitioner had not yet returned to his prior job position. The Arbitrator awarded Petitioner 10% MAW. Respondent requested an impairment rating by Dr. Soriano. Dr. Soriano gave a zero rating and opined Petitioner did not sustain any permanent disability based "on an objective radiological and physical exam basis."

Here, the Arbitrator gave no weight to the medical impairment rating when determining the PPD award. The Arbitrator claimed there was difference between the concepts of "disability" and "impairment" as defined by the AMA Guides Sixth Addition noting it was unclear whether Dr. Soriano "appropriately applied the AMA Guides in formulating his opinion." We consider that complete guess work by our hearing officer. The Commission affirmed and adopted the arbitration award. In our view, such a response flies directly in the face of the simple language of the statute which requires a rating to be considered in some fashion.

Ronda Young v. SOI DHFS: This case involved a 39 year old case worker who sustained right carpal tunnel syndrome as a result of repetitive trauma. Petitioner underwent right carpal tunnel release. Respondent's Section 12 Examiner, Dr. Li, stated in his IME report and confirmed at his deposition Petitioner had an AMA impairment rating of 1%. The Arbitrator, after analyzing the five factors awarded Petitioner 12.5% loss of use of the right hand. Again, we consider such a ruling to completely ignore the statutory requirement.

Here, the Arbitrator gave minimal weight to Dr. Li's impairment rating noting Dr. Li did not state in his report or at deposition whether the AMA impairment rating was in regard to the right upper extremity or the body as a whole. The Commission affirmed and adopted the Arbitrator's award, but modified the statement regarding Dr. Li's AMA impairment rating to "1% entrapment of the right upper extremity or 1% of the whole person." With regards to the weight given, the Commission modified "minimal" to "moderate."

We note AMA impairment ratings are customarily provided and have been considered in claims to provide lower permanency ratings for any injury occurring after September 1, 2011.

This article was researched and written by Lilia Y. Picazo, JD. The opinions Lilia is voicing are hers and not those of any member of WCLA or its board. Lilia can be reached 24/7/365 for questions about WC at lpicazo@keefe-law.com.

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Synopsis: Indiana Employee Retaliatory Discharge Claim Still Survived and Thrived Even When Employer Had A Non-Retaliatory Reason For Termination. Research and Analysis by our IN Defense Team Leader, Kevin Boyle, JD.

Editor’s comment: In a somewhat shocking development from typically conservative Indiana courts, the Indiana Court of Appeals recently affirmed a former employee’s $412,680 verdict where his employer allegedly fired him without cause after he filed a worker’s compensation claim in Best Formed Plastics, LLC v. Shoun, 2016 WL 614025 (February 16, 2016 Ind. Ct. App.). 

In this claim, the Employee injured his shoulder at work, received treatment, and returned to employer with restrictions thereafter. However, when he returned, the employee and his boss had some verbal arguments about the severity of his injuries and how much it had cost the employer. The employee continued to work under his medical restrictions for a few more weeks, but then was told “due to lack of work,” employee should not come back to work for a few weeks but if “sales rise, we will bring him back.”  No other employees were told their services were no longer needed due to this alleged downturn in sales. In fact, the evidence showed sales were not down but actually increased during this time period.

The evidence also included some strongly worded employer’s Facebook posts and emails on their doubts about out his injury and the negative effects it would have on their work comp insurance. The employer eventually terminated him and he filed this civil case for multiple claims including he was fired as retaliation for filing his compensation claim.

After discovery and a trial, the jury awarded him $412,680 in compensatory and punitive damages on the retaliatory discharge and invasion of privacy claims. The employer filed a timely appeal.

On appeal, the employer claimed there was clear evidence he was physically unable to perform the functions of his pre-injury work. The Court disagreed and held an employer cannot defeat a retaliatory discharge claim merely because employer articulated a non-retaliatory reason for discharge. In Indiana, the Frampton three-step analysis is used which requires employees to present evidence that directly or indirectly implies the necessary inference of causation between the filing of a worker’s compensation claim and the termination.

The burden then shifts to employer to articulate a legitimate nondiscriminatory reason for the discharge. If the employer carries its burden, the employee then must prove employer’s reason is a pretext. i.e. the reasons are:

1)    Factually baseless or made-up;

2)    Not the actual motivation for this discharge;  or

3)    Insufficient to motivate the discharge. 

The reviewing Court held based on the evidence, the employer terminated him solely in retaliation for filing his worker’s compensation claim. In this case, the analysis did not end merely when employer found a non-retaliatory reason.

The Court also affirmed the jury’s damages awards. They found the jury’s award of $337,680 on the retaliatory discharge claim for lost income and benefits was not excessive. The extra $50,000 in punitive damages on the claim was also affirmed giving juries “a great deal of discretion in assessing damages.” After subtracting unemployment and worker’s compensation benefits received, as well as other wages earned, his loss of past income was $71,809.36, and his future loss of income and benefits was $265,870.64, all of which were “clearly within the bounds” of the evidence.

In our view, the employer might have been better suited to seek to replace the worker “in the normal and ordinary course of business.” Indiana and Illinois allow an employer to keep their businesses operating and when someone is off for extended period after an injury, you can replace them to keep your business running. If you keep the worker on your payroll and bring them back to the workplace, it is much more challenging to let them go without reasonable accommodation required under ADA.

If you have EPLI defense lawyers from the big blue-blood defense firms, you may be paying $500, $600, $700 per hour or more!! You can’t possibly “defend” your company at those staggering legal defense rates—you are certain to “lose” the employment practices or retaliatory discharge claim to your own high defense costs. Our rates are under $300 an hour and we do very solid defense work and counseling. If you have concerns about retaliatory discharge or employment practices in IN claims, feel free to contact Kevin Boyle for his best defense advice and thoughts at kboyle@keefe-law.com. For IL retaliatory discharge or employment practices claims, contact Brad Smith at bsmith@keefe-law.com.

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