3-6-2017; Where Are the Wrestling Midgets In Springfield?; IL WC Wins or Loses (?) for Most Attorney Involvement per WCRI; New IL WC Arb Ketki Steffen Appointed and more

Synopsis: Where Are the Wrestling Midgets in Springfield?

Editor’s comment: Some years ago, I wanted to see Terry Gene Bollea, better known by his ring name Hulk Hogan. Not sure why but my son and I liked the guy. A friend gave me the tickets and I took my middle child, assuming it would be fun and clearly different. I assure my readers it was very different and within some reasonable parameters, innocent fun. Then at the eighth bout, they sent in the midget wrestlers. Not expecting the contrast with Hulk Hogan who is 6’8” tall, we decided we had enough of what we both felt was foolishness and left. To any of the smaller folks among my readership, I am sensitive to objections to the use of the term ‘midget’ but I don’t know how to write this and not use that troublesome word.

 

The point I am trying to make is my concern our General Assembly and brave Governor Rauner are descending into broad legislative and executive farce. What is happening in Springfield isn’t funny and reminds me of complete and utter chaos. If there weren’t literally billions at stake, I would rip up my tickets and leave the arena but I continue to watch and report to you.

 

Current IL WC Legislative Amendment Scraps Drug Formulary and Adopts Hybrid Medicare-Based Fee Schedule

 

Reports from Springfield confirm a workers’ comp closed drug formulary has been scrapped, and a hybrid Medicare-based fee schedule has been proposed as part of El Bargain Grande, the workers’ compensation “reform bill” still plugging along in the Illinois Senate under the tutelage of Senate President Cullerton and Sen. Christine Radogno of the Republican side of the aisle. SB 12 is part of a bigger legislative package dubbed the “Grand Bargain” aimed at breaking the longest state budget impasse in our nation’s history. If you aren’t sure, IL state gov’t is “bankrupt” under the current General Assembly and Governor to the extent we aren’t even close to paying bills on time.

 

Senate Bill 12 with new Amendment 3, proposes restrictions on compounded drugs and the creation of a new and silly “blue ribbon” task force to monitor medical provider profits derived from treating injured workers. We are not impressed.

 

This ongoing dispute between Republican Gov. Bruce Rauner and the Democratic-led legislature headed by multi-millionaire House Speaker Michael Madigan has kept Illinois government without a state gov’t spending plan for 20 months. Meanwhile, the State has racked up $12 billion in unpaid vendor bills, a $130 billion and growing unfunded (and unfundable) state government retiree pension liability and the worst credit rating of any state in the history of state credit ratings.

 

Governor Rauner doggedly demands workers’ compensation reform without really appearing to know what would best reform our system. I assure you he hasn’t asked me or many of my top defense competitors. Gov. Rauner is also seeking gov’t pension reforms and a property tax freeze before he will sign off on proposed legislation that would dramatically raise the state’s personal income tax from 3.5% to 4.99%, among other new and unprecedented tax increases. What we aren’t seeing from Governor Rauner, Senate President Cullerton or Senator Radogno are any true spending cuts. In my view, if you dramatically raise taxes, borrow billions but don’t cut spending, aren’t you simply treading water? Won’t the growing deficit continue to rise until you have to again raise taxes and borrow even more money? Isn’t this as silly as watching wrestling midgets?

 

SB 12 and other parts of the combined package — if one bill fails, they all do — were supposed to reach a full Senate vote last Wednesday, but talks broke down after Senate President Cullerton accused Governor Rauner of negotiating in bad faith.

 

SB 12, as introduced, from a workers comp perspective creates a closed drug formulary, capped the maximum weekly compensation PPD rate, decreased many medical fees by 15% and enacted new anti-fraud provisions. We aren’t sure if the drug and medical fee cuts are serious or more window-dressing. We are sure the cap on such costs is “real” and can’t be manipulated in our liberal and activist reviewing courts. Our problem is we have no idea and no one is telling us what the IL WC cost savings might be.

 

Amendment 3 to SB 12 proposes a quasi-Medicare-based fee schedule grouped into as many as 14 geo-regions. This proposal calls for the IL Workers’ Compensation Commission to calculate the maximum reimbursement rate under the current fee schedule as a percentage of what Medicare pays for each Current Procedural Terminology or CPT code and each Diagnosis-Related Group code using the most recent data available.

 

Thirty days after completing that, the IWCC would be required to set comp reimbursement rates at specific Medicare percentages based on the following formulas:

 

§  For reimbursements of 125% or less of Medicare, the maximum fee would be set at 125%.

§  For 126% to 150% of Medicare, the maximum fee for that CPT or DRG code would remain the same.

§  For Medicare rates at 151% to 225%, the rate would be adjusted to 150% of Medicare or 80% of the most recent workers’ compensation maximum amount under the current fee schedule, whichever amount is higher.

§  For Medicare percentages of 226% to 428.57%, the rate would be set at 191.25% or 70% of the most recent maximum amount under the current fee schedule, whichever is greater.

§  If more than 428.57% of Medicare, the rate would be adjusted so that it equals 275% of the most recent Medicare maximum.

 

Amendment 3 also scraps the closed formulary proposed in the original bill and replaces it with minor restrictions on controversial drug compounds. Payment for compounds would be allowed only if there is no readily available, commercially manufactured and therapeutically equivalent product or no other Food and Drug Administration-approved alternative that is appropriate. We assure our readers this is a solid concept but isn’t going to save you much in managing IL WC claims.

 

Bring on the Wrestling Midgets--Another Goofy, Dopey and Dumb-o WC Blue Ribbon Panel!!

 

Amendment 3 also would create the six-member Workers’ Compensation Transparency Task Force to supposedly collect data on the effects of reforms. IL WC medical providers would be required to report gross revenue attributable to workers’ compensation, their expenses, the number of comp patients treated and profits. The IL WCTTF would be required to file annual reports with the governor and legislature by Dec. 31 of each year through 2021. The task group would be disbanded the following March 31. IL WC medical providers would be subject to daily penalties of $100 for not reporting to the IL WCTTF. If a provider runs up $10,000 in penalties, you license could be suspended.

 

We remember the IL State Government WC Review Board or whatever that dopey blue ribbon panel is called. They took over a year to pick who was going to be on the panel. Having made the selections, the panel never, ever met. By “never met” we mean they never have ever gotten together or done literally anything! Obviously, it was public relations fluff designed to sound good. The IL WCTTF doesn’t even sound good to me.

 

In my view, the IL WCTTF should hire a bunch of midget wrestlers for their panel membership and start tossing each other across a room with some regularity. Maybe they can call “heads” or “tails” before one of the midgets land to decide who will be the chairperson. Kidding aside, I hate to see our State become the laughing stock of the entire country in proposing such dumb ideas as if they are actually reforming anything.

 

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

 

 

Synopsis: Hot Off the Presses at the WCRI Annual Shindig—They Announce Illinois is No. 1 for Claimants' Attorney Involvement; N.J. a Close Contender.

 

Editor’s comment: Injured workers in Illinois are more likely to lawyer up than any of 18 other states studied by the Workers Compensation Research Institute, while only a small fraction of claimants in Wisconsin and Texas had legal representation, according to preliminary findings released on the close of the 2017 WCRI annual conference.

 

The undertone to this announcement is the message there has to be something intrinsically wrong with attorneys who are possibly protecting/guaranteeing their clients’ rights on both sides of the WC matrix. It is hard to buy that message but I want our readers to know it is out there.

Legislative policy debates about attorney involvement have disparate themes from state to state. Workers’ or Claimant attorneys argue they help workers receive moderately complex benefits injured workers might not be able to obtain themselves. They also help workers navigate a challenging system. Without question, claimant attorneys protect workers from reprisals or discrimination from the employer or insurer. Advocates for employers and insurers complain attorneys are involved more often than necessary, injured workers can often receive benefits they are entitled to without representation, and attorneys reduce the total amount of benefits that workers receive by taking fees. In our view, one feature of attorney involvement can be delay, delay and more delay.

 

Some existing attorney involvement is arguably unnecessary—for example, cases where the injured worker would have received a statutory entitlement that is easily defined without resorting to hiring an attorney. If unnecessary attorney involvement can be avoided, this would be a “win-win-win” scenario. Injured workers would receive benefits without the expense of paying an attorney and the delays of dispute resolution; employers and insurers would save the costs of defending the case; and increasingly resource-short state workers’ compensation agencies would have smaller caseloads to manage and would have to provide fewer dispute resolution services.

 

This WCRI study Avoiding Litigation: What Can Employers, Insurers, and State Workers’ Compensation Agencies Do? identifies and quantifies some of the more important factors that lead injured workers to seek representation by an attorney, providing some key take-aways for employers, claims organizations and state agencies.

 

Major Findings

 

The WCRI study found injured workers were more likely to seek attorneys when they felt threatened after a work-related injury or illness. Several sources of those perceptions of threats were found in:

 

•              The employment relationship. Workers believed they would be fired as a result of the injury, and/or workers perceived that the supervisor did not think the injury was legitimate.

•              The claims process. The worker perceived that his or her claim had been denied, although it was later paid. This perception may have stemmed from a formal denial, delays in payment, or communications that the worker deemed to be a denial.

 

Using data collected as part of its annual CompScope benchmark reports, WCRI researchers reported workers had attorneys in just over half of Illinois WC claims with more than seven days of lost work time. New Jersey was a close second at 49%, with Georgia following at 41% then California at 40% and North Carolina fifth at 38%. You may note those aren’t the five highest states in the Oregon WC Premium study—this sort of makes one wonder why WCRI focused on this issue.

 

On the other end of the spectrum, injured workers had legal representation in only 13% of Wisconsin claims and 14% of Texas claims. Workers had legal representation in 17% of Michigan claims and 18% of Indiana claims.

 

The WCRI stat rats noted that until this year, Texas limited attorney fees to $150 per hour. Texas raised that hourly fee to $200 in January. Also, Texas has strict limits on lump-sum settlements, an efficient dispute resolution process, and a faster time to the first indemnity payment.

Wisconsin also allows lump-sum settlements under limited circumstances and has an efficient disability assessment process, as well as administrative processes for resolving disputes, and clear standards for terminating temporary disability benefits, WCRI said.

 

Explaining the high rate of attorney involvement in Illinois, the researchers noted our WC system bases permanent partial disability benefits on several legislatively defined factors in addition to physical impairment. The WCRI researcher also felt it may be more difficult in Illinois to terminate temporary disability benefits than in other states. On top of those issues, the difference between maximum permanent partial disability and temporary total disability benefits is much wider in Illinois than in other states. The maximum TD rate in Illinois is $1,362, while the maximum PPD rate is $775, providing what WCRI felt was an “incentive” for injured workers to keep their cases open.

 

I don’t agree with any of their theories—if you want my thoughts on how to slow or stop high levels of attorney involvement in IL WC claims, send a reply.

 

If you want to read the synopsis of their study and/or buy it, go to https://www.wcrinet.org/studies/public/abstracts/avoiding_litigation-ab.html

 

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

 

 

Synopsis: Just What IL WC Needs—Another Arbitrator!

 

Editor’s comment: I don’t get Governor Rauner or his IL WC team at all. I feel what IL WC and all government agencies need is less government, not more. Instead of cutting back and saving taxpayer dollars, we are hiring and hiring and hiring.

 

I want to make clear my political and economic views have little to do with our newest IL WC Arbitrator and assure my readers our firm has the greatest respect for her and her shining record.

 

We just received news Governor Rauner just appointed new Arbitrator Ketki “Kay” Steffen to work at the IWCC.

 

Ms. Steffen was a Cook County Circuit Court Judge pursuant to an IL Supreme Court appointment on November 12, 2015. Prior to that appointment, she was an IL WC Arbitrator for the Illinois Workers' Compensation Commission from September 2013 through November 2015.

 

Ms. Steffen also previously served as a Cook County Circuit Court Judge where she presided in the Domestic Violence Courtrooms in Chicago and Rolling Meadows from January of 2010 through December of 2012. Prior to serving on the bench, Judge Steffen served as an Assistant State's Attorney at the Rolling Meadows Courthouse for eighteen years.

 

As a prosecutor, she specialized in prosecuting violent crimes and helping keep our communities safe. She was recognized for her outstanding work in Domestic Violence and is the proud recipient of the 'Partners in Peace Award' and the 'Building Bridges Award'. Judge Steffen was instrumental in the proposal and passage of the 'Cynthia Bischof GPS Legislation' that allows judges to place tracking bracelets on repeat offenders.

 

As a prosecutor, Kay Steffen was an authority on International Extraditions and specialized in bringing to justice the most violent offenders who try to escape our justice system and hide in foreign countries after committing their crimes. Her outstanding work in this area has resulted in bringing back to justice several murderers and child molesters who were subsequently prosecuted and sentenced to long terms of imprisonment. Her philosophy as a prosecutor was that no one is above the law and that the safety and security of the community is vital to its well-being.

 

We wish her the best in her new post.

2-27-2017; Two New IL Commissioners Appointed--Will The Process Ever Open Up?; Does IL WC Truly Need All These Administrators; New Jersey Limits Opioid Use--Shouldn't You? and much more

Synopsis: Two New IL WC Commissioners Appointed. Will Illinois Ever Open Up the Selection Process?

Editor’s comment: On February 24, 2017, Governor Bruce Rauner filed the following new appointments to the Illinois Workers’ Compensation Commission: 

Defense attorney L. Elizabeth Coppoletti to replace Commissioner Mario Basurto and Arbitrator Deborah Simpson to replace Commissioner Ruth White. 

Click to view the letters.

I continue to hate the “secret squirrel” method of hiring hearing officers in a fashion where you and I first learn about the selection long after the decision has been made. In other states outside Illinois, openings for such positions are advertised, resumes accepted for consideration and an open vetting process takes place. In Illinois, even under a reformer and iconoclast like Bruce Rauner, we still have secret, back-door politics to choose the folks that control our multi-billion-dollar workers’ compensation system.

One has to wonder if Governor Rauner or his team discussed his eternal need to lower IL workers’ compensation costs with these new appointees.

One also has to wonder how anyone thinks the current secret system for selecting our administrators looks like anything other than more politics, politics, politics. You clearly have to know someone who knows someone because all the gossips, tipsters and sources I have around the IL WC Commission weren’t aware of these openings, much less the appointments until late today.

The lawyers, staff and friends of Keefe, Campbell, Biery & Associates says farewell and adieu to former Commissioner Ruth White who started working at the good ole Illinois Industrial Commission back in 1979. I still remember the first time I appeared before former Arbitrator White, she had a court reporter that would talk into a cone to record the hearing—the reporter would later type up her recording. It was an oddity I have never seen again in the state or federal courts. It is our assumption former Commissioner White will take one of Illinois’ golden and unfundable gov’t pensions that should pay her 85% of her highest annual salary to start with 3% compounded annual increases and lifetime health care coverage. With all those retirement perks, why keep listening to all the whining as a hearing officer, some of which comes from Claimants?

We also wish all the best to former Commissioner Mario Basurto who came from Liberty Mutual’s house counsel operation directly to become a Commissioner. He learned very quickly on the job and generally did solid work in a tough position.

New Commissioner Elizabeth Coppoletti comes from the IL WC defense industry and knows the IL WC Act and Rules backwards and forwards. We consider her a leading IL WC legal authority. She oversaw the preparations of briefs and other filings at various levels of the appellate process and handled oral arguments at all judicial levels. We are certain she will be a solid administrator.

New Commissioner Deborah Simpson of Kane County has more than 25 years of government and law, having served since 2000 in the Office of the Illinois Attorney General’s Administrative Review / Civil Prosecutions Unit. Previously Ms. Simpson was attorney at the State’s Attorney’s Offices for Kane, Vermilion and Cook Counties. She has been a part-time instructor at the Danville Area Community College, and is a member of several community organizations. She holds a J.D. from the John Marshall Law School and a B.A. from DePaul University.

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

Synopsis: Does IL WC Truly Need All These Administrators?

Editor’s comment: I was quoted in the Madison County Record this past week for my stance on the need for less government in this nutty state.

http://madisonrecord.com/stories/511082985-workers-comp-attorney-praises-wisconsin-governor-for-proposed-elimination-of-review-board#.WLSETRKYx04.email

As you read this, all the simple and undeniable metrics for Illinois government point to financial Armageddon or something like it. We have over $12 billion in unpaid state government bills with state vendors either suing or going broke or both. That number is expected to double before the next statewide election in 2018. The State of Illinois also has government pension debt at $130 billion and growing by millions each day. IL State government credit rating is abysmal and getting worse by the minute. Take a look at Moody’s https://www.moodys.com/credit-ratings/Illinois-State-of-credit-rating-600024371. This isn’t a Republican or Democrat issue—it is simple math, folks! Now is the time to get serious about cutting government costs and spending. If we don’t, I assure all of my readers they are going to have to raise already wildly high state income tax and real estate taxes and impose higher tolls and fees and do lots of stuff that will drive more paying taxpayers away, making the problems even more acute.

In the IL WC system, our administration grew and grew and grew more over the last twenty years while at the same time, IL WC claims continue to drop.

This is from page 7 of the IL WC Commission’s 2015 annual report http://www.iwcc.il.gov/FiscalYear2015AnnualReport.pdf. You will note they assert about 50,000 new IL WC claims are filed each year—I am betting the actual number is about 45,000. Fifteen years ago, that number was around 75,000 new claims. IL WC claims have an average shelf-life of about three years so there are around 135,000 claims in this system, down from 225,000 just fifteen years ago.

 

 

I don’t believe the math (as I am sure it is high) but they say 1500 cases are decided at the Commission level each year. We will start with those numbers for this analysis.

The Commissioners typically don’t hear any testimony or take evidence. They read the Arbitrator’s ruling, consider briefs filed by the parties, listen to oral argument and write decisions.

 

There are currently nine IL WC Commissioners with two full-time attorney assistants. There are a total of 27 attorneys working at this administrative level—9 Commissioners who each have two attorney aides. Their combined salaries are around $3M a year. All that money comes from a levy on IL business. If you just use their numbers above, the 27 lawyers at this level would by themselves only decide about 55 cases per hearing officer/aide a year—that is about one ruling per lawyer each week. Some of the rulings are a page, most are three to five pages. In my view, that is less than a full day’s work.

 

In the past, the Commission used to report about one-half of these rulings were summarily affirmances—when the Commissioner or their aide summarily affirm the Arbitrator’s decision, after considering everything, they simply agree with and adopt the Arbitrator’s decision. If they summarily affirm one-half of the Arbitrator’s decisions, simple math indicates the 27 lawyers are deciding about one contested case every two weeks.

 

To me and with respect to all of them, that means we have too many hearing officers at this level. If they cut this group down to six Commissioners, the savings would be about $900K in salary alone.

 

If they get serious about efficiency, I am sure three Commissioners with two attorneys assistants could also do the same job if they do what you and I call “hard work.” I hate to say it but we also could get along with fewer Arbitrators, if we continue to have fewer and fewer claims to adjudicate at the primary level. I still remember when IL WC had less than 15 Arbitrators handling claims across the State—we now have around 30 or double that amount for about half the claims.

 

In summary, at some point, Illinois is going to have to mark hard decisions about our soaring gov’t debt, unpaid gov’t bills and spiraling taxes. If we don’t start cutting government and doing something to make things more efficient and effective, the world may correct this for us and not in ways we would like or choose.

 

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

 

Synopsis: Should Your State Limit Opioid Use in All Medicine to Include Workers’ Comp Claims?

Editor’s comment: We salute New Jersey Gov. Chris Christie who recently signed into law a bill that limits initial prescribing of opioids for acute pain to a five-day supply, in what is being called our nation’s strongest opioid reform. Senate Bill 3 also requires insurers to cover treatment of substance use disorders that has been deemed necessary by the patient’s physician, psychologist or psychiatrist. It spells out requirements for opioid prescriptions following the initial supply and mandates opioid education for prescribers.

The bill sailed through the New Jersey Legislature in a matter of weeks.

“A five-day limit on initial opioid prescriptions will be imposed, lowered from 30 days, which is the current law, and most of you know that most physicians write 30 days automatically, no longer,” Christie said in signing the bill on Feb. 15. “Five days is now the initial that they can write it for.”

Several other Northeastern states, including Massachusetts, Connecticut, Maine, New York and Vermont, have enacted limits on initial opioid prescriptions of seven days.

The requirements in New Jersey SB 3 include a requirement for doctors to document a patient’s history of opioid use, before writing the initial prescription, as well as their response to non-opioid therapies including alternative drugs or non-drug treatments.

The Medical Society of New Jersey asked lawmakers to carve out an exception for post-surgical patients, allowing an opioid prescription to cover up to 14 days. After major surgeries, the Medical Society asserts a patient may risk rupturing sutures if they have to go to see the doctor for a refill of pain medications. The bill was not amended to accommodate the request.

In Maine, a proposal to limit initial opioid prescriptions to a three-day supply for acute pain and 15 days for chronic pain was changed to seven days and 30 days, respectively, in response to concerns from the Maine Medical Association, according to an article in ACP Internist, a publication of the American College of Physicians.

Workers’ compensation drug formularies may limit the number of days for opioid prescriptions in which preauthorization is not required.

In New Jersey, Christie is reportedly devoting his final year in office to the opioid crisis. The Republican governor is set to leave office in January 2018 due to term limits. 

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

 

Synopsis: Illinois WC Rates Jump Again and Your PPD Reserves Need To Be UPDATED RETROACTIVELY(!). Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

 

Editor’s comment: There continues to be an upward spiral of IL WC rates. As mentioned twice every year, starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, our WC rates keep climbing.

 

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $775.18. When it was published, this rate changed retroactively from July 1, 2016 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong. If you have a claim with a date of loss after July 2016 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies. WORD OF CAUTION: There is pending legislation which Gene reported last week and this week which currently states “The maximum compensation rate for the period July 1, 2017 through June 30, 2021, except as hereinafter provided, shall be $755.22. Effective July 1, 2021 and on July 1 of each year thereafter the maximum weekly compensation rate, except as hereinafter provided, shall be determined as follows: if during the preceding 12-month period there shall have been an increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act, the weekly compensation rate shall be proportionately increased by the same percentage as the percentage of increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act during such period.” THIS NEW LEGISLATION WOULD POTENTIALLY CHANGE THIS PPD MAX AGAIN. If this isn’t clear, send a reply to Shawn at sbiery@keefe-law.com.

 

The current TTD weekly maximum has risen to $1,435.17. A worker has to make over $2,152.76 per week or $111,943.52 per year to hit the new IL WC maximum TTD rate. Does any state in the United States have a TTD maximum that high?

 

The new IL WC minimum death benefit is 25 years of compensation or $538.19 per week x 52 weeks in a year x 25 years or $699,647.00! The new maximum IL WC death benefit is $1,435.17 times 52 weeks times 25 years or a lofty $1,865,721.00 plus burial benefits of $8K. On top of this massive benefit, Illinois employers/governments have to pay COLA increases.

 

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. If you want it, simply reply to Shawn at sbiery@keefe-law.com or email Marissa with your mailing address if you would like to be mailed a laminated copy at mpatel@keefe-law.com and they will get a copy routed to you before they raise the rates again!

2-20-2017; Governor Rauner Wishes IL WC Could Become Massachusetts??; AG Madigan Loses Bid to Shut-Down State Gov't and the IWCC; IL WC Fraud Enforcement Remains an Embarrassment and more

Synopsis: Governor Rauner Hopes to Rub a Magic Lamp and Turn Illinois Workers’ Comp into Massachusetts?? 

 

Editor’s comment: We strongly respect our fearless leader in Illinois Governor Bruce Rauner. We truly feel his efforts to make sense of the first- or second-worst run states in the United States would be entertaining if there wasn’t so much at stake. From last week’s budget speech, he said:

 

To bring good jobs to Illinois, we have to make Illinois a place where it is good to do business. We must fix our workers comp system, labor regulations, liability costs, and property taxes that make us uncompetitive, and push job creators out. The cost of worker’s comp is the biggest factor driving our job losses. If we simply aligned our workers’ comp costs with those of a state like Massachusetts – which is hardly a bastion of conservatism – we can save state and local taxpayers over $300 million per year, while protecting those who suffer workplace injuries, and grow more careers at higher wages.

 

Let’s get it done!

 

Other than to point to “The Bay State,” Governor Rauner provided no details or analysis on how to turn our WC system into something Bean-Town might like. Rauner also did not speak specifically about any element of the Illinois budget compromise package. But he said the compromise must include structural changes to avoid future deficits, term limits for state legislators, property tax relief and workers’ compensation reforms that will “get job creators excited.” With respect to Governor Rauner, it doesn’t appear he has a whole lot of solid planning and specifics to bring to the table. We prefer to listen to Wisconsin Governor Scott Walker who actually does his homework and makes concrete proposals to actually save Cheese-taxpayers money.

 

So All We Have to Do is to Make IL WC into Mas-Cha-Who-Setts??

 

Well, seems pretty easy to me so I looked up the Massachusetts WC Unit. Not very fancy but seems pretty utilitarian. In the every-other-year rankings by the State of Oregon, Massachusetts WC premiums were 44th out of 50 which is considered dramatically better than IL WC which remains fairly high, tied with Oklahoma at number 7.

 

So I took a deeper look. Unlike IL WC with its own agency and budget, the Mass WC Unit is a sub-set of the Executive Office for Administration and Finance. We have asked and begged our great Governor to work/fight to consolidate Illinois state agencies from 88 down to about 30, as other states do. Get rid of redundant and do-nothing state jobs. We are still waiting for someone to join with us in asking about it.

 

We thought Massachusetts wouldn’t have a lot of manufacturing workers—actually, they have a very sizable manufacturing presence. http://www.nam.org/Data-and-Reports/State-Manufacturing-Data/State-Manufacturing-Data/Manufacturing-Employment-by-State-March-2016/

 

Going back to state-to-state comparisons, Massachusetts WC has a five day waiting period to start work-related lost time benefits. They pay lost time benefits at 60% of the average wage which is less than the IL WC TTD rate at 66-2/3’s. They have a form-based system that typically makes me think their bean-counters are watching what the employers and insurance carriers do. Other than that, from the outside-looking-in, I can’t tell why Mass WC premiums are about ½ of what Illinois pays. I have to believe their traditions/benefits are lower than ours and Illinois needs to continue to make progress in cutting WC costs.

 

However, we don’t think the Governor is getting great advice on how to cut IL WC costs. As we have written over and over, all he has to do is talk to the IL WC Arbitrators and Commissioner who report to him and tell them to cut our state’s moderate to high WC costs. If they won’t do so, the issue lies with the Governor and not with them—he can find/select and retain new and improved hearing officers in his image and likeness. We are absolutely sure he can save the $300 million a year he wants to save for IL businesses by just doing that—we are happy to meet with him or his team to discuss this in greater detail any time anyone might want. If anyone wants easy legislative and administrative changes/reforms, we promise we have lots and lots of them too.

 

Another Bi-Partisan WC Cost-Saving Thought—Limit All IL WC Claims to Adjudication by The IL WC Commission?

 

Right now, IL WC claims can run on and on and on. Either side can clown around for at least three years before the Arbitrator and maybe more if Claimant’s counsel whines enough. After 3+ years, the matter gets tried and then can be appealed, effectively for free and then stall around for about another year “on review” before an IL WC Commission panel. By that time, the case can be five, six or more years old. From there, it can be appealed to the Circuit Court—another year wasted. Then the Appellate Court, WC Division to blow another year. After that, it is possible for a simple WC claim to make it all the way to the IL Supreme Court. As an example of endless litigation, you may note the ruling in Beelman Trucking v. IWCC took about 14 years to become final!

 

Watching all this over-litigious silliness, please note IL WC claims by many state government employees legally can’t and aren’t appealed to the courts—by law, they get a hearing at Arbitration and then a single appeal. In our view, if this were extended to all Illinois workers, things would move much quicker and outcomes be more certain. Faster and more certain benefits would save IL business and local governments lots and lots of bucks.

 

We could see a situation where the Commission panel might make a purely legal ruling and the panel ask for a decision by the Courts—that would hopefully be a once or twice a year type thing. If the Commission were to want such legal analysis of their rulings so be it but for decisions on the facts, the idea has always been for the Commission to make the final call and the chips lay where they lay. We see literally no value in clowning around over the “manifest weight of the evidence” in the IL reviewing courts.

 

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

 

 

Synopsis: In A Not-So-Shocker, IL Attorney General Lisa Madigan Loses Effort to Block Pay to State Workers. IL WC Commission to Remain Open for Business.

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Editor’s comment: As we have advised, everything was pointing to an IL government shut-down on Feb. 28. Government shutdown = IL WC Commission shutdown. Problem averted for now.

 

Late last week, news from St. Clair County came in that our plucky AG, Lisa Madigan lost her effort to put any pressure on the IL General Assembly to actually pass a “Grand Bargain” and institute a budget that might allow for our state’s bills to be paid. The last time we saw the math on this, the unpaid bills were way over $10 billion and rising by the millions each day.

 

St. Clair County Circuit Judge Robert LeChien refused to reverse a previous court order requiring Illinois to pay state employees in the absence of a spending plan. Madigan argued stopping pay would hasten a budget agreement.

 

Republican Gov. Bruce Rauner criticized AG Madigan’s legal move, suggesting the daughter of House Speaker Michael Madigan wanted to create a “crisis” that would shut down the government.

 

“We’re pleased our hard working state employees, who show up to work every day on behalf of the people of Illinois, will continue to be paid,” Rauner Administration General Counsel Dennis Murashko said in a statement, adding he hopes Madigan drops her efforts and allow negotiations in the Senate on a balanced budget to succeed.

 

Rauner and Democrats who control the Legislature have been fighting over how to balance the budget. Rauner repeated that he will support a tax increase to help close a multibillion-dollar budget deficit, but only if it is accompanied by measures he wants to help businesses, such as reduced workers’ compensation costs.

 

Democrats oppose Rauner’s agenda, with Speaker Madigan calling it “extreme” and harmful to the middle class.

 

Without a budget in place, social service agencies, higher education and other programs have suffered. Other spending has continued, however, because of court orders or state law. That has included employee pay.

 

We will continue to watch and report as this battle unfolds.

 

 

Synopsis: Everyone Continues to Note IL WC System Does a Rotten Job Ferreting Out Work Comp Fraud by Workers.

 

Editor’s comment: The proof is in the pudding—over a decade ago, the State of Illinois criminalized workers’ compensation fraud by workers. Despite the law, the agency created to “bust” WC Fraud by workers has managed only 42 convictions, or fewer than five a year. In short, the Illinois Workers’ Compensation Fraud Unit had three convictions in each of 2015 and 2016. In contrast, the State of Ohio, with 1.3 million fewer residents than Illinois, averages 11 convictions a month.

 

In 2015, the Illinois WC Fraud Unit dropped to two ineffective investigators, its lowest staffing level in five years, as the number of complaints more than tripled from 100 to 331.

 

“The WCFU is already in the process of hiring additional investigators; however, this decrease in staff, coupled with the length of time it takes to bring new investigators on board, has already negatively affected the number of investigations opened,” the WCFU 2016 annual report states.

 

“An increase in the WCFU’s appropriation would allow for the hiring of more investigators, allow for more investigations to be completed, and lessen the impact the departure of a single investigator has on the unit,” it states.

 

Illinois has been hampered by the lack of a full state spending plan for the past 19 months, the American Insurance Association said. “The budget impasse over the last couple of years, I believe, has restricted the department’s ability to prosecute workers’ compensation fraud,” said Stephen Schneider, AIA Midwest region vice president. “Anything in terms of resources that can assist them ought to be done.”

 

“We think Illinois should do it tougher and bigger and bolder in pursuing workers’ compensation fraud,” he said. “There’s certainly a lot more that can be done. When you look at states like Florida and Ohio, obviously they’re doing something right.”

 

Illinois criminalized workers’ compensation fraud and noncompliance for the first time with House Bill 2137 in 2005. HB 2137, which became Public Act 94-277, required the Illinois Department of Insurance to create the Workers’ Compensation Fraud Unit and identified eight specific fraudulent acts, whereas before they were not specifically defined as unlawful. (Those acts are described here.)

 

The General Assembly beefed up fraud enforcement again in 2011 with HB 1698, which became Public Act 97-18.

 

The IL WC Act added a ninth prohibition, making it illegal to “intentionally present a bill or statement for the payment for medical services that were not provided.” It introduced a new criminal penalty scheme, gave the WCFU subpoena power and removed the 120-day time limit for the Unit to complete an investigation.

 

In my view, the lack of any effort to stop IL WC Fraud by workers highlights how odd our state can be. If someone were to steal a large truck, everyone would expect SWAT units to be mustered and the bad guys/gals to be arrested and face heavy penalties. In contrast, if someone creates a phony WC accident or works while on benefits and steals the same amount of money, everyone in government says that is a “civil” matter and the employer should sue the employee in Circuit Court.

 

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Synopsis: Illinois WC Rates Jump Again and Your PPD Reserves Need To Be UPDATED RETROACTIVELY(!). Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

 

Editor’s comment: There continues to be an upward spiral of IL WC rates. As mentioned twice every year, starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, our WC rates keep climbing.

 

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $775.18. When it was published, this rate changed retroactively from July 1, 2016 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong. If you have a claim with a date of loss after July 2016 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies. WORD OF CAUTION: There is pending legislation which Gene reported last week and this week which currently states “The maximum compensation rate for the period July 1, 2017 through June 30, 2021, except as hereinafter provided, shall be $755.22. Effective July 1, 2021 and on July 1 of each year thereafter the maximum weekly compensation rate, except as hereinafter provided, shall be determined as follows: if during the preceding 12-month period there shall have been an increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act, the weekly compensation rate shall be proportionately increased by the same percentage as the percentage of increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act during such period.” THIS NEW LEGISLATION WOULD POTENTIALLY CHANGE THIS PPD MAX AGAIN. If this isn’t clear, send a reply to Shawn at sbiery@keefe-law.com.

 

The current TTD weekly maximum has risen to $1,435.17. A worker has to make over $2,152.76 per week or $111,943.52 per year to hit the new IL WC maximum TTD rate. Does any state in the United States have a TTD maximum that high?

 

The new IL WC minimum death benefit is 25 years of compensation or $538.19 per week x 52 weeks in a year x 25 years or $699,647.00! The new maximum IL WC death benefit is $1,435.17 times 52 weeks times 25 years or a lofty $1,865,721.00 plus burial benefits of $8K. On top of this massive benefit, Illinois employers/governments have to pay COLA increases.

 

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. If you want it, simply reply to Shawn at sbiery@keefe-law.com or email Marissa with your mailing address if you would like to be mailed a laminated copy at mpatel@keefe-law.com and they will get a copy routed to you before they raise the rates again!