More Gold-Digging in the Tunnels of Illinois

Tuesday, November 3, 2009 | 0

By Eugene Keefe

Synopsis: More gold-digging in the “Tunnels of Illinois.” Are lawsuit lenders now “creating” claims by financing workers' compensation surgeries?
 
Editor’s comment: From our review, it would appear lawsuit lenders may be funding allegedly work-related surgeries in central Illinois. We are learning more and more about this interesting medical/surgical situation. A hand/arm surgeon appears to be diagnosing “repetitive trauma” conditions and then doing numerous arm, elbow, wrist and hand surgeries on workers’ compensation claimants. We understand the surgeon is doing bilateral CTS releases, he also does repeat bilateral CTS releases. In our experience, most hand surgeons do not repeat or perform revision CTS releases. For example, take a look on the web at: http://content.karger.com/produktedb/produkte.asp?typ
 
Our research further indicates this hand/arm surgeon is joining with a lawsuit lender and is clearly mining what we have called the “Tunnels of Illinois” by doing not only bilateral CTS releases; the surgeon also combines that type of surgery with bilateral cubital tunnel releases. In some patients, this surgeon does the “Big Six” by doing six surgeries on the same claimant, sometimes based on subjective complaints alone. The surgeon does both carpal tunnels, both cubital tunnels and both shoulders, sometimes on patients with minimal, moderate or non-existent EMG/NCV findings. As we have advised in the past, we feel the incidence and prevalence of cubital tunnel surgeries in Illinois workers’ compensation vastly outpaces the incidence of this rare surgery anywhere else on the planet—the reason for the high level of cubital tunnel surgery is the reward. Most folks currently receive $15,000 to $50,000 in permanency for what is truly a minor surgical revision of the elbow(s)—while that is a lot of money anywhere, it is a pile of gold in depressed central Illinois.
 
In the vast majority of patients we are aware of, this surgeon has not recommended any pre-surgical conservative care for any of them. Therefore, it remains unknown whether conservative care could have alleviated the symptoms. We understand these surgeries are being financed by what we feel is an unusual financial/medical practice of this hand/arm surgeon selling “accounts receivable” to the subsidiary of a lawsuit lending company named MedFinance for 48.5% of the applicable CPT code in the Illinois Medical Fee Schedule. MedFinance is on the web at http://www.medfinance.us/index.asp.
 
The “accounts receivable” sale occurs either before or immediately after surgery is performed to insure the surgeon is paid the 48.5% of the Medical Fee Schedule amount immediately. The surgeon claims MedFinance is in the “risk buying” business. If the disputed surgical bill is later awarded by an Arbitrator and affirmed by the Commission, MedFinance gets as much as 100% of the fee schedule and, having already paid 48.5% out, they would receive the balance when paid. It would appear obvious that someone somewhere thinks the chance of getting an award on the most questionable carpal tunnel, cubital tunnel and shoulder surgeries is a wildly easy bet in this state. It is our further understanding that, in their view, there is no “kickback” in such an arrangement and they are not charging or sharing medical fees. It is our understanding MedFinance asked this hand/arm surgeon to set up shop downstate. We also understand the hand/arm surgeon has never sold an account receivable to MedFinance on anything other than a WC case. The hand/arm surgeon has advised he sold his “accounts receivable” to MedFinance prior to surgery actually being performed.
 
The hand/arm surgeon advised the various patients do not undergo conservative care as no one would treat them because they did not have the means to pay for it. We counter to indicate it is our understanding the surgeon is not checking for group medical coverage—the patients where this is happening all come from the workers’ comp arena.
 
We did the research and the Illinois Secretary of State’s website indicates MedFinance is owned by a corporation named Lawsuit Cash Advance LLC, with its corporate headquarters listed in Minneapolis, Minn. You can readily find this organization on the web at: http://www.lawsuitcashadvance.com. These are the nice folks who will lend a claimant $5,000 today and, if they get a lawsuit recovery in 36 months, they have to pay back a mere $28,000. Don’t take our word for that—they have a calculator on their website that provides the result. Trust us, that math is making lots of workers’ comp claims start to move like greased lightning.
 
What is troublesome for the Illinois WC industry when one sees such hand, arm and elbow surgeries being financed and paid for in the unusual fashion outlined in the middle of this article is Illinois’ sky-high permanency values that come with each related surgery. For example, most of these surgeries will provide the worker with permanency values of 15-25% loss of use of the hand for the CTS release and 20-60% loss of use of the arm for the combination of cubital tunnel and rotator cuff surgeries to a single arm. When such surgeries are being performed on both hands/elbows and shoulders, if the employee returns to work at the same job and same rate of pay, the PPD value for even a mid-range income will be well into the six-figure range. As we have told all of you, if the employee gets the “golden diagnosis” of permanent restrictions and cannot return to the same job at the same rate of pay, an Illinois claim falls into the wage differential dance and the claim moves into the high six-figure to low seven-figure range.
 
We know there are folks at the IWCC who are learning of these issues. We are asking everyone to start taking a hard look at the need for surgeries when there is no attempt at pre-surgical conservative care. We hope our honest and hard-working Arbitrators and Commissioners at the IWCC are going to start to ask tough questions about these interesting surgical and financial practices. Our advice to our defense clients is to start to learn and further investigate what is going on and fight, fight, fight—the Commission can’t take any action if you blindly accept what is going on.
 
Eugene Keefe is a partner with the workers' compensation defense law firm of Keefe, Campbell & Associates in Chicago. This column was reprinted with his permission from the law firm's newsletter.