1-14-2019; Here is My Thought For Our New IL Governor--Run State Gov't Like a Hyatt Hotel!!!; Litigious City of Chicago Worker Gets Lots of WC Benefits 13 Years Post-Injury and more

Synopsis: Hey, New Governor Pritzker--Run IL State Gov’t Like a Hyatt Hotel!!

Editor’s comment: Today, January 14, 2019, J.B. Pritzker was sworn in as the new Governor of Illinois. Our State has the fifth highest population of the entire U.S. We also have the wealthiest Governor in U.S. history, I think.

New Gov. Pritzker is dropping some hints about what’s likely to be in his first state budget, but the governor-elect still isn’t committing to much definite except giving full details in his upcoming February 2019 speech. In an interview, Pritzker said his spending plan will be balanced and indicated he wants it passed on time by late spring.

One thing that won’t be in the budget is an ersatz version of the graduated income tax, one that raises our tax rates but then eliminates them for many lower-income taxpayers by sharply increasing deductions. Pritzker appeared to be leaning in that direction earlier, suggesting it would be a good way to pursue change before a needed constitutional amendment authorizing a graduated tax can be implemented.

Instead, the Gov’s budget likely will rely on revenues from taxes on legalizing the recreational sale of marijuana products, expanded legal gambling and sports betting. To me, the most intriguing statement is the new Governor’s statement “efficiencies in state government” will be part of the “balanced budget” package.

If You Want Gov’t Efficiency, Consider Running State Gov’t Like a Private Company!!!

Please note IL State Gov’t has 88 State agencies. We need about 20. We have amazing and almost record redundancy in these many agencies. When you have 88 agencies, you have 88 Agency Heads and 88 Ass’t Agency Heads and 88 HR managers and basically 88 everythings. Judy Baar Topinka, rest her soul, pointed out the IL State Treasurer and the IL State Comptroller are essentially the same agency—they were created back in the day to effectively watch each other spend our money. To combine those agencies would probably save $10M in a fell swoop. Similarly, why is there an IL Dep’t of Transportation and the IL Toll Authority? Don’t they clearly do precisely the same thing for toll and non-tool roads? Please also note the State of IL has seven, count ‘em, seven State Police Departments!!! Couldn’t all those cops be combined in the IL State Police? What does the Secretary of State Police Department do anyway?

In my view, State workers are over-paid, over-staffed and “over-retired.” We have the highest paid prison/correction guards in the U.S. In rural Pontiac, IL, www.indeed.com indicates our IL corrections officers’ pay is 44% over the national average. Almost all IL State workers make more than the national average for their jobs, regardless of how rural the area they are working in might be. The Springfield Journal-Register confirmed there are almost 75,000 Illinois State workers and their total payroll is around $4.5B dollars!!

Please remember all of such workers are entitled to the gigantic fake gov’t pension program which pays retiring workers 85% of their highest salaries along with 3% compounded annual increases and virtually free medical coverage until they finally pass! As I have repeatedly reported, these fake gov’t pension and healthcare benefits are currently $200B in debt and that amount is going up by the millions each minute of every day. One way to cut that future debt is to trim unneeded gov’t jobs.

Please JB, Automate Thousands of State Jobs!!

As a simple example, the State of Illinois wastes literally millions of dollars every year with humans taking tolls on our toll roads. In contrast, the Indiana State Toll Road has no humans, not a single person is engaged in taking dollars/coins or making change for their toll-road users. You can pay Indiana tolls with a credit card or go online but you can’t give money to a human. There are literally thousands of other IL State gov’t jobs that can and should be eliminated or replaced by what my kid calls a “computer” with one goal in mind—save money for taxpayers who are shouldering the highest combined tax burden in the country.

I have seen job postings for positions across the State where gov’t workers are doing things in the most inefficient and least effective way—the sole reason for the inefficiency is to protect the job and leave the burden for it on taxpayers.

How About the IL WC Commission?

Well, I am sorry to say this but I think the IWCC could get along with about half of their staff and still be effective. We have more than 30 Arbitrators—Indiana to our east has five. I am sure we could have 15 Arbitrators who would be busy but the current roster is close to double what it might take to be “busy” because IL WC claims keep dropping every year and more people keep fleeing our State due to ever-rising taxes. Please note no one in State gov’t ever talks about how few people are needed to fulfill a function—once a state gov’t job is created, it is virtually impossible to end it.

In 2005, the IWCC went from six Commissioners to nine—each Commissioner has two full time attorney assistants. With respect, I consider all 27 of these jobs to be the cushiest administrative jobs in the U.S.—if all 27 lawyers issued one decision on a contested claim each week, they would have nothing to do in ninety days. If you want the math, send a reply. I am sure we could easily go back to six or even three Commissioners.

The most egregious and open example of wasting our tax dollars are the four “remote” IWCC offices across the State, in Springfield, Collinsville, Peoria and Rockford. These are almost hilarious to contemplate—the IWCC website says “If you intend to visit our Peoria or Rockford office, please call first to make sure the office is open.” Why not just permanently close all such offices and let the public figure out how to access online forms and other information?

Summary

We wish our new Governor all the best in his chosen position. He spent literally millions to bring his new face and expertise to IL State gov’t. We hope he takes hold of the reins and does something no IL Governor has done in recent memory—streamline gov’t and run it like a competitive private company would be operated. We will have to wait and see how things go. Please watch this space for news as I report it.

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Synopsis: Odd and Almost Never-Ending WC Ruling For Litigious City of Chicago Worker.

Editor’s comment: In Pisano v. Illinois Workers’ Compensation Commission, you may note at least one of the claims took 13 years to resolve!! From my count, Claimant Pisano had 14 different IL WC claims against the City and settled all but these three. Some of the claims may have been handled by the City’s corporation counsel and some of them appear to have been farmed out to the “emergency-only” outside defense firm picked by Alderman Ed Burke. To my understanding both the defense firm and the Claimant firm donate regularly and heavily to Alderman Burke’s 18th Ward Organization or his other secret political entities. I promise “only the Shadow knows” where and how much money has been donated.

Either way, it appears Claimant was a hoist engineer for the City of Chicago who alleged he injured his wrist, elbow, and shoulders in three separate incidents from 2005 to 2010. For reasons I don’t understand, the claims were “consolidated” which is supposed to mean they are heard in order—such claims are not supposed to be “blended” into one claim, as clearly occurred with these three old claims.

An Arbitrator awarded Claimant PPD or Permanent Partial Disability for his elbow and wrist injury in the first incident. The Arbitrator also awarded wage-differential benefits for a wrist injury in the second event. The Arbitrator ruled the third incident was part and parcel to the first two and did not require additional PPD benefits. The Arbitrator denied Claimant’s request for Permanent Total Disability because he was physically capable of obtaining other employment if he went through and cooperated with vocational training. The Illinois Workers’ Compensation Commission approved the ruling, with some changes to the wage-differential rate.

The Illinois Appellate Court, WC Division recently overturned the trial court’s ruling on whether a claimant could receive two forms of workers’ compensation benefits from separate injuries that were “consolidated” or blended into one claim. The Court ruling indicated are several types of benefits that the Illinois Workers’ Compensation Commission can award, including:

• Specific loss

• Body as a whole

• Wage loss and

• Total and permanent disability.

The trial court remanded the case back to the IWCC, stating Claimant should receive only one form of benefits that encompasses all of his injuries. The IWCC chose to award Claimant wage-differential benefits. The Appellate Court overturned the trial court’s ruling while also modifying the IWCC’s original ruling:

• The wrist and elbow injuries were “separate” and Claimant can receive a different form of IL WC benefits for each one; but

• Claimant could not receive both PPD and wage-differential benefits for the wrist injury, as the IWCC originally ruled.

The IL WC Appellate Court ruled Claimant should receive PPD benefits for his elbow, which he injured in the first incident, and wage-differential benefits for his wrist, which he injured in the first incident and reinjured in the second incident.

The ruling can be viewed online at http://www.illinoiscourts.gov/Opinions/WorkersComp/2018/1172712WC.pdf

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1-7-2019; Chicago/Illinois Gov't Slime Finds Its Own Level--Can We Find Higher Ground?; Kevin Boyle on a Shocking Development in IN WC Administrators and more

Synopsis: Chicago Political and Gov’t Slime Finds Its Own Level—Can We Find Higher Ground?

Editor’s comment: Last week, Chicago Alderman Ed Burke was criminally charged by federal prosecutors with a count of attempted extortion on Jan. 3, 2019. Ed Burke is the longest sitting alderman in the history of aldermen/women. The federal criminal charge alleges Burke tried to use his elected position to get legal work out of a fast food restaurant that sought his clearance for a remodeling and driveway project in 2017. A federal criminal complaint unsealed last Thursday charged Burke with attempted extortion for allegedly using his position as alderman to try to steer thousands of dollars in RE tax “appeal” business to his private law firm from a company seeking to renovate a fast-food restaurant in his ward. The charge carries a maximum of 20 years in prison on conviction.

The complaint also alleged Burke asked one of the company’s executives in December 2017 to attend an upcoming political fundraiser for "another politician." Sources identified the politician as Cook County Board President Toni Preckwinkle, who is running for Chicago mayor.

Authorities were allowed to seal the warrant to arrest Ald. Burke so he wouldn't flee. The case filed in U.S. District Court in Chicago started a little more than a month after the FBI carried out two raids on Burke’s City Hall office, working for hours behind windows covered with brown butcher paper before leaving down a back staircase with computers and files. The unveiling of the criminal charges touched off a scene last Thursday at the Dirksen U.S. Courthouse, where Burke turned himself in to federal prosecutors before appearing before a magistrate judge in a packed courtroom on the building’s 17th floor. He was released on a $10,000 bond.

According to an FBI agent’s affidavit, executives from the fast food company sought Burke’s clearance for a City of Chicago building permit. Burke arranged to meet with the executives and “used his position as an Alderman — including his apparent ability to withhold his official support for the building permit and a related driveway permit — in order to corruptly solicit unlawful personal financial advantage in the form of fees arising from the retention of Burke’s law firm, Klafter and Burke.”

What Does This Have to Do With Workers’ Comp?

For decades Ed Burke has chaired the Chicago City Council’s omnipotent Finance Committee, which controls city spending, as well as what some folks call the City of Chicago’s $100 million-plus a year workers’ compensation “defense” system. The reason I put in quotes--the….$100 million-plus a year WC “defense” system is because no one on this planet can figure out what is defended and exactly how much is spent/wasted on workers’ comp in the City of Chicago. In my opinion and understanding, Alderman Burke “hides” the money for workers’ comp benefits in a large assortment of places—some of it is in department budgets, some of it is in a workers’ comp budget, lots of it is virtually impossible to trace. I am told but cannot prove the City of Chicago may have as many as 3,000 pending litigated WC claims at any given time. I have searched the City of Chicago employee database and there was no one listed as a “workers’ comp adjuster” at any time. I have been advised there is one adjuster and one Corp. Counsel defense lawyer for all those claims. To my further understanding, the responsibilities of managing millions in WC benefits for City workers could be switched regularly under Alderman Burke.

To my understanding, you don’t get to be a City of Chicago WC vendor without working out some deal with Alderman Burke where you pay and pay and pay to see if he might wave his magic wand at your company. In my opinion, he could care less about whether your company might be the best claims adjusting company, law firm, nurse case management concern, voc rehab provider or whatever, his primary concern was to have you make regular political donations and bring his law firm all of your clients’ real estate tax adjustment work. To my further understanding, Alderman Burke received regular political donations from one WC defense firm that handled the City’s so-called “emergency” WC claims; Ed Burke also received lots of donations from three Petitioner/Plaintiff firms.  

Alderman Burke also is unique because for decades, he would not allow workers to be brought back to light work, allowing them to stay off and receive tax-free work comp benefits for decades in some cases. The whole time the injured City of Chicago worker was on WC benefits, they would continue to accrue pension credit and then get a nice lump-sum settlement along with a lifetime fake gov’t pension. Alderman Burke was also an opponent of surveillance of the injured workers under his supervision because he did not want to deal with anyone learning someone who might be getting work comp benefits was also running a business or working a second job. I am sure but can’t prove to you the number of WC fraud charges brought against City of Chicago workers under Alderman Burke was zero, zip, nada.

Outside looking in, what I feel Alderman Burke did was to basically use the City of Chicago workers’ comp program as a way to turn city workers into his serfs or peons—anyone who would receive years, maybe decades of tax-free benefits and no longer have to work at all after suffering a minor injury would be a loyal political worker. Please note that tawdry claims concept isn’t expressly illegal, it is just what I feel is an ethical abomination.

What Other Arguable Skullduggery Occurred Under Alderman Burke?

Well, most folks don’t know the City of Chicago Police and Fire Disability Systems were under the direction and control of Alderman Burke. Ed Burke would allow police officers and firefighters to remain on disability pay for decades at taxpayer expense. While on such “disability pay,” some of these supposedly disabled folks would go to college and law school and better themselves, all while on the dole. The idea of bringing an injured cop back to a 911 desk seemed to me to be too challenging for Alderman Burke—why not just allow that worker to feast on the benefit stream and remain loyal during elections to whoever Alderman Burke pointed them to?

Last but not least, Alderman Burke was famous for seeking real estate tax adjustment business for his law firm. In my view, the fake and phony process of what our legislators and administrators call real estate property tax “appeals,” is a complete joke and should be a national embarrassment. Basically thousands of assessments are created by moron county clerk-types who screw the assessments up regularly. No one is ever called to task for making such mistakes. There is no effort by the Cook County Assessor’s Office to insure the assessments are triple-checked and run through what our kids call “computers” so the levy is accurate to the dollar. Basically what has gone on for decades in Cook County is

• The assessor’s clerks screw up the levy;

• All real estate owners are of the impression they need to hire a lawyer to “appeal” or more likely seek an adjustment of their proposed real estate taxes and

• The real estate “appeal” lawyers rake in literally billions in getting the taxes adjusted.

If you think I am kidding when I say this fake and phony process actually costs real estate owners in Cook County billions of dollars, please send a reply and I will show you what I have as strong proof. Please note any discount given by the County over their initial mispricing of the levy doesn’t mean real estate owners don’t lose between 1/3-1/2 of the supposed “savings” by having to pay the lawyers.

Please note there is almost no legal work involved in this fake and phony real estate tax adjustment process—the so-called “appeal” form is almost always filled out by an admin for the lawyers’ firms. No lawyer files a motion or orally argues anything—the same clerks who screwed up the assessment read the “appeal” form and may cut the assessment in reliance thereon.

Actually, real estate tax “appeal” law isn’t taught in any Illinois law school and there have never been any real estate tax questions on the Illinois bar exam. I have never seen a seminar or continuing legal education on improving legal acumen in the real estate tax adjustment process. I have also never seen an appellate court or supreme court ruling on a real estate tax adjustment.

To my understanding, Alderman Burke has resigned from the Chairmanship of the Finance Committee. An audit has been called for to try to locate the money wasted on the City’s WC program. As there is an election very shortly, let’s hope the new mayor takes a hard look at how the City’s WC defense program has been run and brings in some outside folks to cut the claims and get injured workers back to work and save taxpayers millions of dollars.

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

Synopsis: Short but interesting news from Kevin Boyle, J.D. about Indiana’s WC administrators.

Editor’s comment: Kevin reports Bridget Repay was set to take over District 1 for Single Hearing Member Gerald Ediger. However, it was just disclosed she is not taking the position. Single Hearing Member Sarkisian will temporarily cover District 1 until a replacement is announced. As soon as a new one  is announced, Kevin will let you know.

Kevin is one of the top defense attorneys in Indiana and handles WC and GL claims across the State. No one closes them faster—feel free to contact Kevin any time with your toughest Hoosier WC questions at kboyle@keefe-law.com.

1-1-2019; State of the State of IL WC; Workers' Comp Drug Formulary Coming to Indiana Starting Today! and more

Synopsis: State of the State of IL Work Comp From Gene Keefe’s Perspective.

Editor’s comment: Welcome to the New Year, Folks! Understanding IL Work Comp as a legislative/administrative concept started shortly after the Cherry, IL Mine Disaster in 1909, our work-injury/exposure-compensation system has survived 110 years of growth. Where is it going from here?

New Multi-Zillionaire Governor

Short term, the State of Illinois will have a new Governor on Inauguration Day Jan. 14—JB Pritzker who is the billionaire heir to the Hyatt Hotel business. As I reported, he has done as much as anyone possibly could to make turn the State of Illinois into a one-party government and his political party used his funds to now have strong “super-majorities” in the IL House and Senate. In short, the only thing limiting the Democrats in Illinois state and most local governments is their imagination and drive. One-party governments are dysfunction, if you look at how horridly run the City of Chicago gov’t is. It is possible the Republicans may find a better zillionaire candidate for the next gubernatorial race in around four years so it is hard to predict this State will forever be a one-party gov’t but you never know.

To my understanding, Illinois State Democrats can easily and quickly change the IL Constitution starting in two years. I join with the editorial board of Crain’s Chicago Business to voice the hope the power of new Governor Pritzker along with our great Senate President John  Cullerton and House Speaker Michael Madigan will be focused on stopping/ending State and local fake government pensions from basically robbing taxpayers with their currently unfundable format. The so-called “pension clause” in the current IL Constitution was drafted by an Illinoisan and can be ended by Illinoisans to save our State from eventual bankruptcy. You can’t have government workers contribute $100,000 over their careers to their fake government pension plans to then receive literally millions from taxpayers in return after leaving gov’t employ. If you don’t believe me about fake gov’t pensions being the equivalent of winning the lottery at your expense, send a reply. The same thing goes for government workers’ completely unfunded healthcare plans in retirement. The current combined deficits for both the fake gov’t pension plans and healthcare coverage for gov’t retirees is well over $200B and rising by the millions every minute of every day.

Going back to workers’ comp

The Illinois Workers’ Comp Commission is currently headed by Chairperson Joann Fratianni. I consider her an excellent administrator and fair to all sides. I am sure the secret powers that be who run the IWCC have already interviewed candidates and Joann may be replaced in the coming days/weeks. I salute her hard work and pluck for the time she has been in the “eye-of-the-WC-hurricane” at the IWCC. Things have run quietly and professionally under her aegis. In other news, I am sure former IL WC Arbitrator Nancy Lindsay left her post effective yesterday and I/we wish her the best in any new endeavor she enters. At least 11 other Commission posts are in the lurch as you read this—I will continue to report changes as the news comes out.

Under the outbound administration and Governor, IL WC insurance premiums have dropped to the middle of the U.S. pack—the State of Oregon’s every-other-year survey indicates Illinois WC is now No. 22 among the fifty United States. I almost hate to write about it because I am worried the forces of ITLA or the IL Trial Lawyers Ass’n may be focused on changing the law or administrators to get Illinois back into the top ten or even top five in WC premiums, as we were after Blago-Now-in-Jail brought in lots of liberals and radicals to run the IWCC. Let’s hope Governor Pritzker will keep things in the middle and encourage existing businesses to remain here and new businesses to start here. Please also note some goof at ITLA is still claiming those unnamed WC insurance carriers aren’t passing the WC cost savings along to their customers—“DUH”—the reason IL WC is now at No. 22 is because of lower WC insurance premiums. In short, the urge of some Democrats to create an hilariously tiny WC insurance carrier to make WC premiums competitive is gone. We hope they don’t continue to try to waste $10M in the fashion that was vetoed by our outbound gov.

Higher Minimum Wage Will Change IL WC

Governor-elect J.B. Pritzker repeatedly indicated he would like to move quickly to begin raising the minimum wage in Illinois with an eventual goal of raising it to $15 an hour. Pritzker said raising wages and the standard of living in Illinois is a priority. But he also said he would look for ways to minimize the impact of that wage increase on small businesses, without specifying what steps he might take to accomplish that. Pritzker has not indicated how long it might take to gradually raise the wage to $15 an hour. From a workers’ comp perspective, the higher wages go, concomitant wage replacement benefits like TTD and TPD will also rise for injured workers. The impact of a higher minimum wage will change the nature of wage loss differential claims in some industries—please watch this space for guidance on reserving and managing such claims as things move forward.

Happy New Year!!

Let’s keep our fingers crossed to see our new Governor and Democratic House and Senate use this opportunity for good and not evil. Some day, someone is going to address the fact out State and local Gov’ts waste money with duplicative and unnecessary agencies/jobs and silliness. IL State Gov’t has 88 agencies with 88 Dep’t Heads, Ass’ts to the Dep’t Head and HR peeps, etc. Lots of other states have combined agencies and shrunk staff. Cutting out unneeded and duplicative state jobs and using computers to streamline things would save taxpayers billions. If Hyatt Hotels were run in the fashion IL State Gov’t is run, they would be out of business in a year. Let’s see if JB Pritzker has the chops to bring efficiency and effective management to our State gov’t and become the best governor in modern history.

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

Synopsis: Workers' Comp Drug Formulary Coming to Indiana Starting Today! Research and reporting by Kevin Boyle, J.D., KCB&A’s Indiana WC defense team leader and Gene Keefe, J.D.

Editor’s comment: Indiana Senate Bill 369 was signed into law. This new law requires implementation of a workers’ compensation drug formulary based on the Official Disability Guidelines (ODG) Workers' Compensation Drug Formulary Appendix A, effective today, January 1, 2019.

Under the formulary requirements, reimbursement for ODG-designated “N” drugs will not be permitted without prior approval from the employer. However, to address pre-existing drug therapy, if the injured/disabled worker began use of the “N” drug before July 1, 2018 and continues use after today, January 1, 2019, reimbursement will be permitted under the law until January 1, 2020. There is an additional authorization exemption in cases of medical emergency.

The authorization process includes submission of a request by the prescriber to the employer which contains their reason for requesting use of the “N” drug. If the employer does not approve the medication(s), they will be required to send the request to a third party certified by the Utilization Review Accreditation Commission  or URAC to make a determination on the request. The employer will be required to notify the prescriber and injured/disabled worker of the UR determination not more than 5 business days after receiving the request. Failure to provide that notice leads the prescriber's request to be considered approved and reimbursement authorized. If the determination is to deny, the injured/disabled worker will be able to appeal to the IN Worker's Compensation Board for a final determination.

We will continue to watch the Indiana Workers’ Compensation Board as they work to implement the new formulary requirements. Further communications for our IN clients on this new formulary will be forthcoming.  For now, we urge our clients to review the legislation and become familiar with the requirements. Information on the bill, including the final text, can be viewed online here: https://iga.in.gov/legislative/2018/bills/senate/369.

Send any questions or concerns about any IN WC issue to Kevin Boyle at kboyle@keefe-law.com.