Keefe: Massive Comp Amendments Proposed and May Be Coming

Tuesday, January 17, 2017 | 0

We thank J. Todd Foster of WorkCompCentral for giving us the heads up on this new proposed legislation. It is part of a bigger package of 13 — yes, lucky 13 — bills proposed by the Illinois Senate that have to all be agreed upon by everyone or they all fall to the wayside.

Eugene Keefe

Please note that state income taxes are poised to go up to 4.95% as part of the combined legislative proposal. There is also going to be a new state tax on sugary sweetened colas/drinks like Coke and Pepsi.

Please note we created this legislative summary very rapidly didn’t have time to triple-check everything. All of our reporting and opinions are subject to modification at a later time, as more information is released.

Please further note that I agree with this comment I saw in the Capitol Fax Blog:

“The elephant in the room on workers' compensation is that the number of filings statewide has continued to decrease annually. In 2016, I don’t think 40,000 statewide was cracked. Reforming workers' compensation is a speck in the universe of Illinois’ problems. I never understood the vehemence of the [WC] reform movement.”

In my view, the many changes to state law don’t truly address the giant metrics of unfundable state government pensions, spiraling debt, unresponsive leadership, and rising and new taxes. We haven’t heard Gov. Bruce Rauner, Speaker Michael Madigan or Senate President John Cullerton talk about, or fight for, budget cuts or ending redundant and outdated state jobs.

There are still going to be lots of worthless do-nothing remote offices staffed by nice folks that get coffee for the lawyers and keep track of the copying machines. We still have a Comptroller’s Office that is a duplicate of the Treasurer’s Office. There are still thousands of state workers on taxpayer-paid workers’ comp and other state disability programs instead of bringing them back to sedentary and light jobs.

Either way, we have to report these important facts, and here they are:

Sec. 17-10.4 — workers' compensation fraud
 (a) It is unlawful for any person, company, corporation, insurance carrier, health care provider or other entity to:
(1) Intentionally present or cause to be presented any false or fraudulent claim for the payment of any workers' compensation benefit.
(2) Intentionally make or cause to be made any false or fraudulent material statement or material representation for the purpose of obtaining or denying any workers' compensation benefit.
(3) Intentionally make or cause to be made any false or fraudulent statements with regard to entitlement to workers' compensation benefits, with the intent to prevent an injured worker from making a legitimate claim for any workers' compensation benefit.
(4) Intentionally prepare or provide an invalid, false or counterfeit certificate of insurance as proof of workers' compensation insurance.
(5) Intentionally make or cause to be made any false or fraudulent material statement or material representation for the purpose of obtaining workers' compensation insurance at less than the proper amount for that insurance.
(6) Intentionally make or cause to be made any false or fraudulent material statement or material representation on an initial or renewal self-insurance application or accompanying financial statement for the purpose of obtaining self-insurance status or reducing the amount of security that may be required to be furnished pursuant to Section 4 of the Workers' Compensation Act.
(7) Intentionally make or cause to be made any false or fraudulent material statement to the Department of Insurance's fraud and insurance non-compliance unit in the course of an investigation of fraud or insurance non-compliance.
(8) Intentionally present a bill or statement for the payment for medical services that were not provided.
(9) Intentionally assist, abet, solicit or conspire with any person, company or other entity to commit any of the acts in paragraph (1), (2), (3), (4), (5), (6), (7), or
(8) of this subsection (a).

Enhanced criminal sentences are outlined but omitted here.

This isn’t a major change. Section 3 might be a basis for the aggressive state plaintiff bar to threaten imprisonment of defense lawyers, claims handlers, risk managers and others if the attorney could prove there was something “false” in claim handling or as reported to the attorney.

It might — just might — also open up criminal liability for nurse case managers, who are hated by the plaintiff bar if they communicate on an ex parte basis with a treater. I don’t think the legislation says that, but I bet claimant lawyers might try to get a liberal hearing officer or reviewing court to consider the idea.

(e) Traveling employees.
(1) Except as otherwise provided under this section, accidental injuries sustained while traveling to or from work do not arise out of and in the course of employment.
(2) Accidental injuries are considered to be "arising out of and in the course of the employment" where an employee is required to travel away from his or her employer's premises in order to perform his or her job and when the conduct in which he or she was engaged at the time of the injury is reasonable, and when that conduct might have been anticipated or foreseen by the employer.
(3) Accidental injuries while traveling do not occur in the course of employment if the accident occurs during a purely personal deviation or personal errand, unless such deviation or errand is insubstantial.
(4) In determining whether an employee is required to travel away from his or her employer's premises in order to perform his or her job, along with all other relevant factors, the following factors may be considered: whether the employer had knowledge that the employee may be required to travel to perform the job; whether the employer furnished any mode of transportation to or from the employee; whether the employee received or the employer paid or agreed to pay any remuneration or reimbursement for costs or expenses of any form of travel; whether the
employer in any way directed the course or method of travel; whether the employer in any way assisted the employee in making any travel arrangements; whether the employer furnished lodging or in any way reimbursed the employee for lodging; or whether the employer received any benefit from the employee traveling.

I continue to hate — literally despise — the language above and consider it to be an expansion of Illinois comp coverage. I believe our state Reformin’ Republicans think this is reining in the “traveling employee” concept. In my view, this poorly created language would expand workers’ comp coverage for an admin going to get gum or aspirin at a local drug store. It also includes language making a trucker staying at a hotel of his/her choice to be covered if the employer “assisted” in making travel arrangements, or the dumbest language of all — whether the employer received “any benefit” from the travel. 

I strongly feel Gov. Rauner and his people are being completely hoodwinked. I wish they would allow/order the arbitrators and commissioners to rein in the concept by using what other states call “common sense.”

(f) Neutral risks.
Accidental injuries resulting from neutral risk arise out of and in the course of the employment if the employment quantitatively or qualitatively contributes in any way to the neutral risk.

I have no idea what this impossible-to-understand legislative language might mean and assume it is also going to be twisted and spun against business and local government by our “activist” reviewing courts who created it. There is no reason for Gov. Rauner or his team to support this tomfoolery. Try to imagine 50 silly rulings on qualitative v. quantitative v. quantifiable before you start to gag to read what this legislative silliness might be turned into. I consider it nonsense and hope it is deleted.

For my readers among the plaintiff bar, please hold off on any urge to reply and define your view of what neutral v. non-neutral risk might be. I already have a headache.

(g) Intervening cause.
(1) Except as otherwise provided under this section, every natural consequence that flows from an injury that arose out of and in the course of employment is compensable under this act. A work-related injury need not be the sole causative factor or the primary causative factor as long as it was a causative factor in the resulting condition such that the condition would not have occurred but for the work-related injury.
(2) Where an intervening cause breaks the chain of causation, any subsequent consequence flowing from the intervening cause is not compensable under this act. An intervening cause is a cause that completely breaks the chain of causation.
 (3) Notwithstanding any provision of this act to the contrary, if an employee, who sustained an accidental injury compensable under this act — which results in a responsibility to pay compensation on the part of the employer — subsequently sustains another injury due to his or her own intentional conduct or negligence that accelerates, aggravates or worsens the effects or disability of the first injury in any manner, regardless of whether or not he or she has fully recovered from the effects of the first injury, the employer's responsibility to pay compensation to the employee or his or her dependents shall not be increased due to the effects or disability resulting from the subsequent injury.

This is a legislative effort to reverse the ruling in Vogel v. IIC and its progeny. No one will be able to tell if it will work until the reviewing courts throw it in their blender. This legislation will save money for Illinois business and local governments if the reviewing courts give this  language its English-language meaning. I don’t feel that happens very often in our reviewing courts, but we will have to wait and see.

(b) If the period of temporary total incapacity for work lasts more than 5 working days, weekly compensation as hereinafter provided shall be paid beginning on the 6th day of such temporary total incapacity and continuing as long as the total temporary incapacity lasts. In cases where the temporary total incapacity for work continues for a period of 14 days or more from the day of the accident, compensation shall commence on the day after the accident.

This changes the state WC waiting period to start temporary total disability from three to five days. In my view, this change is minimal and unneeded, as it may save business and local government about a dollar.

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

I believe this provision locks in what I believe is last year’s max permanency rate for more than four years or until June 2021. It should be a modest savings for trucking and construction companies, and other employers who have high-wage earners.

For accidental injuries involving professional athletes that occur on or after the effective date of this amendatory act of the 100th General Assembly, an award for wage differential under this subsection shall be effective for the expected remaining duration of the employee's professional sports athletic career. As used in this paragraph (d)1, "professional athlete" means an individual whose employer is a professional athletic team that is based in Illinois, including, but not limited to, any professional baseball, basketball, football, soccer or hockey team based in Illinois and who derives the majority of his or her income from playing athletics for the professional athletic team. The expected remaining duration of an employee's professional sports athletic career shall continue until the employee reaches the age of 35 or for a period of five years from the date of the injury, whichever is later, unless the employer or employee is able to successfully prove, by a preponderance of the evidence, that the expected remaining duration of such employee's professional sports athletic career has a shorter or longer duration.

This will change will be a savings to the Cubs, White Sox, Bears, Blackhawks and Fire. I didn’t know they were even aware of the unfairness caused by the Illinois Workers' Compensation Act and am happy to see someone is doing this.

For purposes of awards under this subdivision (e), injuries to the shoulder shall be considered injuries to part of the arm. The foregoing change made by this amendatory act of the 100th General Assembly to this subdivision (e)10 of this Section 8 is declarative of existing law and is not a new enactment. For purposes of awards under this subdivision (e), injuries to the hip shall be considered injuries to part of the leg. The foregoing change made by this amendatory act of the 100th General Assembly to this subdivision (e)12 of this Section 8 is declarative of existing law and is not a new enactment.

These two provisions change/reverse the unusual ruling in the Will County Forest Preserve District v. IWCC case, where the Illinois Appellate Court, Workers' Compensation Division, reversed more than 100 years of state comp law and practice to judicially remove the shoulder from the arm, and the hip from the leg. I consider it a positive step, and something state business and local governments should be very happy with.

Any employee who has previously suffered the loss or permanent and complete loss of the use of any of such members or loss under Section 8(d)2 due to accidental injuries to the same part of the spine, and in a subsequent independent accident loses another or suffers the permanent and complete loss of the use of any one of such members or loss under Section 8(d)2 due to accidental injuries to the same part of the spine, the employer for whom the injured employee is working at the time of the last independent accident is liable to pay compensation only for the loss or permanent and complete loss of the use of the member or loss under Section 8(d)2 due to accidental injuries to the same part of the spine occasioned by the last independent accident. For purposes of this subdivision (e)18 only, "same part of the spine" means: (1) cervical spine and thoracic spine from vertebra C1 throughT12; and (2) lumbar and sacral spine and coccyx from vertebra L1 through S5.

This provision is mildly confusing to me, but it makes enormous sense and appears to be an effort to provide credit for prior body-as-a-whole settlements/awards. Again, Illinois business and local governments will love the change, in my view.

(b) In determining the level of permanent partial disability, the commission shall base its determination on the following factors: (i) the reported level of impairment pursuant to subsection (a), if such a report exists; (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the employee's future earning capacity; and (v) evidence of disability corroborated by the treating medical records or examination under Section 12 of this Act. No single enumerated factor shall be the sole determinant of disability. Where an impairment report exists, it must be considered by the commission in its determination. 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.
(c) A report of impairment prepared pursuant to subsection (a) is not required for an arbitrator or the commission to make an award for permanent partial disability or permanent total disability benefits or any award for benefits under subsection (b). In determining the level of permanent partial disability, the commission shall base its determination on the following factors: (i) the reported level of impairment pursuant to subsection (a), if such a report exists; (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the employee's future earning capacity; and (v) evidence of disability corroborated by the treating medical records or examination under Section 12 of this act. No single enumerated factor shall be the sole determinant of disability. Where an impairment report exists,
it must be considered by the commission in its determination. 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. (c) A report of impairment prepared pursuant to subsection (a) is not required for an arbitrator or the commission to make an award for permanent partial disability or permanent total disability benefits or any award for benefits under subsection (c) of Section 8 or subsection (d) of Section 8 of this act or to approve a Settlement Contract Lump Sum Petition.

Blah, blah, blah. This whole section was sought by Gov. Rauner for his “turnaround” agenda. It would be unnecessary if the arbitrators he selected, and the arbs he let keep their jobs, simply were told to implement lower permanency values with whatever metrics they want.

(a-2.5) For procedures, treatments, services or supplies covered under this act and rendered or to be rendered on or after June 1, 2017, the maximum allowable payment for the following service categories set forth in Title 50, Section 7110.90 of the Illinois Administrative Code shall be 85% of the fee schedule amounts in effect on May 31, 2017, which shall be adjusted yearly by the Consumer Price Index-U, as described in subsection (a) of this section:
(1) Section 1: ambulatory surgical treatment center (ASTC) and accredited ambulatory surgical treatment facility (ASTF).
(2) Section 7(C): hospital outpatient — radiology.
(3) Section 7(D): hospital outpatient — pathology and laboratory.
(4) Section 8(F): professional services — pathology and laboratory.
(5) Section 8(G): professional services — radiology.
(a-2.6) For procedures, treatments, services or supplies covered under this act and rendered or to be rendered on or after June 1, 2017, the maximum allowable payment for the following service categories set forth in Title 50, Section 7110.90 of the Illinois Administrative Code shall be 90% of the fee schedule amounts in effect on May 31, 2017, which shall be adjusted yearly by the Consumer Price Index-U, as described in subsection (a) of this section:
(1) Section 7(F): hospital outpatient surgical facility.
(2) Section 8(D): professional services — surgery.

I am told this brings Illinois workers' comp more in line with other states and counters the growth of aggressive-billing ambulatory surgical centers. I am sure all defense folks will like the savings. I also feel the docs and health care givers won’t like it.

(a-3) Prescriptions filled and dispensed outside of a licensed pharmacy shall be subject to a fee schedule that shall not exceed the average wholesale price (AWP) plus a dispensing fee of $4.18. AWP or its equivalent as registered by the National Drug Code shall be set forth for that drug on that date as published in Medispan.
(a-4) The commission, in consultation with the Workers' Compensation Medical Fee Advisory Board, shall promulgate by rule an evidence-based drug formulary and any rules necessary for its administration. Prescriptions prescribed for workers' compensation cases shall be limited to those prescription drugs and doses on the closed formulary. A request for a prescription that is not on the closed formulary shall be reviewed pursuant to Section 8.7 of this act.

I am sure this is designed to stop the growth and use of endless opioids in Illinois comp claims. I consider it a great and money-saving concept if/when they put it in place.

(4) Ensure that health care providers have at least 15 business days to comply with records requested by employers and insurers for the authorization of the payment of workers' compensation claims.
(5) Ensure that health care providers are responsible for supplying only those medical records pertaining to the provider's own claims that are minimally necessary.
(6) Provide that any electronically submitted bill determined to be complete but not paid or objected to within 30 days shall be subject to penalties pursuant to Section 8.2(d)(3) of this act to be entered by the commission.
(7) Provide that the Department of Insurance may impose an administrative fine if it determines that an employer or insurer has failed to comply with the electronic claims acceptance and response process. The amount of the administrative fine shall be no greater than $1,000 per each violation, but shall not exceed $10,000 for identical violations during a calendar year.
(c) The rules requiring employers and insurers to accept electronic claims for payment of medical services shall be proposed on or before March 1, 2017, and shall require all employers and insurers to accept electronic claims for payment of medical services on or before Sept. 1, 2017.

Clear, simple and blunt. Not sure if it is going to work this time. If you look at the legislative language, it was enacted in 2012 following the 2011 amendments to the Illinois Workers' Compensation Act, and everyone ignored it.

(k) For injuries occurring on or after Jan. 1, 2018, an employee shall be entitled to up to 24 chiropractic, occupational therapy or physical therapy visits per claim. If an employee exceeds 24 chiropractic, occupational therapy or physical therapy visits per claim, an employer or insurer may petition to the commission to decide whether additional treatment is warranted. An employer or insurer that files a bona fide petition in good faith under this section shall not be subject to penalties under the act. This section does not apply to visits for post-surgical rehabilitation services.

Oddly written legislation but a great, truly great, idea. The defense industry will be thrilled to see caps on such care that most defense folks feel is abused.

The chairman of the Workers' Compensation Commission shall have discretion to assign and reassign arbitrators to each hearing site as needed.
No arbitrator shall hear cases in any county, other than Cook County, for more than two years in each three-year term.

Yawn. Do they really have to legislate this?

(a) There is created the Workers' Compensation Edit, Alignment and Reform Commission, which shall be known as the WEAR Commission. The purpose of the WEAR Commission is to develop a proposed recodification of the Workers' Compensation Act that meets the following goals:
(1) to make this act more accessible to laypeople seeking benefits under this act, and employers seeking insurance coverage for their responsibilities under this act;
(2) to aid the commission, attorneys, and judges in understanding and applying the provisions of this act;
(3) to prevent disputes over interpretations of this act that can add additional costs to the function and administration of the workers' compensation system;
(4) to reduce the size of each section of this act to promote understanding, interpretation and indexing of this act;
(5) to assist policymakers so that they can more easily understand the implication of amendments to this act that may be proposed in the future;
(6) to replace outdated and obsolete language within this act;
(7) to limit the opportunity for lengthy and expensive appeals due to confusion or contrary language within this act; and
(8) to meet the preceding objectives without changing substantive law or disturbing established case law precedent.
Nothing in this Section 14.3 shall be construed to allow or authorize the WEAR Commission to seek to or to diminish, restrict, limit, expand, abrogate, alter or change in any way the current interpretation of any substantive or procedural provision of this act by the commission or any Court.
(e) This section is repealed on Jan. 1, 2018.

Triple yawn. The IWCC has about six blue-ribbon advisory boards that occasionally meet and do even less. Any one of the advisory panels could be deputized to do this simple task without having to empanel another bunch of secretive and do-nothing blue ribbon panelists. It is great to see they only will be WEAR-ing this one for a year.

3. When an arbitrator conducts a status call of cases that appear on the arbitrator's docket in accordance with the rules of the commission, parties or their attorneys may appear by telephone, video conference or other remote electronic means as prescribed by the commission.

Whoa — this is a stunning change to IWCC status calls, and IWCC court clerking services may be out of business! Can the arbitrators remote-in and save mileage expense?

The State of Illinois, including its constitutional officers, boards, commissions, agencies, public institutions of higher learning, and funds administered by the treasurer ex officio, and every county, city, town, township, incorporated village, school district, body politic or municipal corporation against whom the commission shall have rendered an award for the payment of money, shall not be required to file a bond to secure the payment of the award and the costs of the proceedings in the court to authorize the court to issue such summons.

This reverses a nutty ruling where a government agency was required to pay a denied claim when the reviewing court said a state agency needed a bond to file an appeal.

(a-5) The commission shall annually submit to the governor and the General Assembly a written report that details the state of self-insurance for workers' compensation in Illinois. The report shall be based on information currently collected by the commission or the Department of Insurance from self-insurers, as of the effective date of this amendatory act of the 100th General Assembly. The report shall be completed by April 1 of each year, beginning in 2017. The report shall be posted on the commission's internet website. Information to be included in the report shall be for the preceding calendar year.

This is an effort to allow our stat rats to come up with metrics to compete with Oregon’s every-other-year WC premium rating report. I consider a colossal waste of taxpayer money.

Eugene Keefe is a founding partner of Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted with his permission from the firm's client newsletter.