Major Government Entities still Need WC Defense Reform

Tuesday, May 14, 2013 | 0

From our perspective in the trenches, the Illinois Workers' Compensation Commission and its component players have greatly improved their administrative functions. We are confident the implementation of the workers' compensation preferred provider program concept is going to dramatically cut workers' compensation claim costs for Illinois employers. We note great politicians like State Rep. Dwight Kay are still trying to add even more workers' compensation reforms—we don’t truly think there is legislative traction or a defined need for sweeping workers' compensation reform. The hard work has been done and great progress has been made in cutting costs.

The reason we feel the reforms have been effective is that, in the last eight years, Illinois has enacted amazing cost-cutting features to our Illinois Workers' Compensation Act. The Illinois workers' compensation medical fee schedule initially cut medical reimbursements to 76% of Illinois-led amounts—the values are now at 53%! We also enacted—and the Workers' Compensation Commission is generally enforcing—utilization review, which is presumptively correct in its determinations about the extent of medical care. On top of the workers' compensation medical fee schedule reductions, it is now possible for Illinois employers to use the workers' compensation preferred provider programs, which promise to provide even lower reimbursements. For the first time in more than 100 years of the Illinois workers' compensation system, employers can direct medical care via the approved workers' compensation PPP process if they have the guts and drive to do so.

Please note the highest cost in all workers' compensation systems across the globe is medical care for injured workers. In the past eight years, Illinois significantly cut such workers' compensation costs. While we feel we may now be in the bottom half of the United States in workers' compensation medical costs, we will have to wait for the stat raters at the National Council on Compensation Insurance to come back and tell us how much. If you take a look at the study from the Workers Compensation Research Institute in 2010 on the Web, you will note as recently as 2010, Illinois employers were paying some of the highest costs in all medical areas studied. We are certain the next time that analysis is performed, Illinois medical reimbursements in the workers' compensation arena will be in the bottom half of the U.S. We are unaware of any state that has cut workers' compensation medical reimbursements more in the past decade than Illinois.

We are also letting all of our readers know our Illinois workers' compensation arbitrators and commissioners are now performing in a dramatically more professional and fair way. The system is no longer a lock for petitioners’ counsels and their clients—they now have to follow the rules and prove their claims. We are seeing many carpal tunnel and cubital tunnel claims denied, not simply cut in value but completely denied when the claim arises from “repetitive work” and not trauma or equipment malfunction. Even when such benefits are awarded, there is a statutory cap on permanent partial disability values.

We are also seeing many of our arbitrators starting to approve pro se settlement contracts at lower values when impairment ratings are brought to them for consideration. As one great petition lawyer openly confirmed when the 2011 amendments were enacted, Illinois workers' compensation benefits got a “haircut” and the hair continues to fly. We continue to see strong evidence that Illinois PPD values are coming into line with other states.

On a different aspect of the Illinois workers' compensation matrix, we are starting to see major government entities fight to control their runaway costs. We send kudos to Cook County Sheriff Tom Dart, who made headlines about his current situation. Recently Sheriff Dart’s administration undertook a comprehensive review of their workers’ compensation process, including an examination of the status of claims made by Sheriff's Office employees. It has become clear the process lacks accountability and prioritization that must be in place when taxpayer dollars are at issue.

We were stunned to learn the Sheriff’s Office is asking for a competitively bid temporary appointment of a private law firm specializing in workers’ compensation defense. We strongly urge them to put this up for bid—we have not yet seen it posted on the County website, but we will be happy to show them how to save millions, given the opportunity to bid.

Sheriff Dart was quoted as saying, “Currently, over $8,000,000 of my budget is allocated for the payment of workers' compensation claims, yet I have no control of how the claims are investigated, defended or paid.”

As we told many of our readers, start to pull your security videos when an accident is reported to find out what happened and how things went wrong—it appears Sheriff Dart’s team is now doing so. Last month, the Sheriff’s Office filed written charges for cause against a correctional officer, alleging he attempted to defraud Cook County and the Sheriff’s Office by falsely claiming to have suffered a duty injury in the workplace and by falsely submitting official reports of injury suffered while on duty. The security video clearly contradicted this shyster. It was documented by multiple Correctional Department employees that this employee called himself the “Duty Injury King.” Well, right now the “King” is currently suspended without pay, pending the outcome of the administrative proceedings and the Sheriff’s Office is seeking to charge him criminally.

The Sheriff’s Office has about 6,500 workers and they have over 440 cases pending before the Workers’ Compensation Commission. This means about 7% of the Sheriff’s Office is on comp or is seeking such benefits. “While I understand the difficulties of managing the multitude of workers’ compensation claims filed by County employees, it is clear the system is failing and must be overhauled,” said Sheriff Dart.

The City of Chicago is spending over $100 million per year on workers' compensation costs in a municipal budget that is awash in red ink. Our State of Illinois government is spending over $150 million per year, and they supposedly have over 20,000 pending Illinois workers' compensation claims. Trust us, these maniacally high numbers aren’t due to the workplaces being so dangerous. It is because the state, county and Chicago’s workers' compensation programs need truly professional assistance with claims and litigation defense. We again point out they are being penny-wise and pound-foolish in not having enough training, adjusters and solid defense assistance at every step of the workers' compensation process. When and if they get it, their costs could be cut at every step of the process.

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