Keefe: Illinois Workers' Comp Reform Update

Tuesday, January 24, 2017 | 0

The battle in Springfield continues to rage. Here are our thoughts along with the analysis/comments of the workers' compensation gurus at the Illinois Chamber of Commerce. We like to tell all of our readers that chamber President Todd Maisch and his expert lobbyist, Jay Dee Shattuck, are the go-to folks to monitor and protect the interests of Illinois business, and local government, whenever WC reform is afoot.

Eugene Keefe

The chamber and I agree that most current Illinois WC reform provisions need additional work and careful consideration.

Here are some key issues for Illinois employers.

Traveling employee

The provision codifies current case law regarding “traveling employee” beyond the ruling of the Illinois Supreme Court in Venture Newburg by establishing a “reasonable and foreseeable” standard for determining compensability. The legislation adds that a compensable accidental injury does not include travel that is a “purely personal deviation or personal errand, unless such deviation or errand is substantial.” It also references factors for determining traveling employee status from Venture Newburg.

From my perspective, this concept doesn’t need legislation at all. The words “traveling employee” don’t appear in the state WC Act and don't need to be added. I think the proposed “reform” actually expands coverage in ways that may be very adverse to employers. The legislation already in place about “arising out of and in the course of” employment is covered by common sense. If Gov. George Rauner’s arbitrators/commissioners don’t use common sense in defining “traveling employees,” he should quickly fire them.

The state chamber is on record to oppose because it feels it is codification of current case law and locks in the expansion of liability for employers imposed by the state courts over the past decade. The chamber has an alternative proposal that recognizes circumstances where an employee traveling to perform job duties and injured is compensable.

Neutral risk

This provison adds that “accidental injuries resulting from a 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 provision might mean or how our activist and very liberal reviewing courts would handle it. Quantifiable, schmantifiable. I have no idea what might be behind door number 1 if we open this legislative can of worms, so why even go there?

The chamber opposes this move because codification of current case law locks in the courts' undermining of the “neutral risk” doctrine, which has been case law for nearly 100 years. Neutral risk requires the employment to provide a risk greater than what the general public is exposed to. The chamber has alternative language for the state Senate to consider.

Intervening cause

This creates a new “intervening cause” standard that codifies current case law regarding causation. It provides that “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.” It also provides that “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.” 

Again, we have no idea what and how the reviewing courts and Workers' Compensation Commission will handle what appears to be well-intentioned legislation.

The state chamber opposes, indicating codification of current case law locks in the expansion of liability for employers imposed by the courts over the past decade. The chamber has alternative legislation that strengthens the requirement that the injury or illness arise out of and in the course of employment.

Medical fee schedule reductions

The sponsor indicates there are new provisions that will be presented for consideration. The intent is to revise those services identified by the Workers Compensation Research Institute as exceptionally higher than other state fee schedules and presented in previous versions provided by Gov. Rauner.

I support “hard” or unchangeable fee schedule reductions in appropriately selected medical services. We aren’t truly knowledgeable about the details but hope the sponsors hit the target they are shooting for.

The state chamber supports these provisions — when finalized and following its review of the new language.

Drug formulary

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 for workers' compensation cases shall be limited to those drugs and doses on the closed formulary.

I strongly support any common-sense limitations on drug prescriptions in Illinois workers' comp claims.

The state chamber supports this legislation.

Statewide average weekly wage freeze

This provision freezes the SAWW for four years the maximum weekly wage rate of $755.22, beginning July 1, 2017.

I feel this would provide savings to employers and local governments. It wouldn’t be a dramatic savings, but any savings is better than none.

The state chamber supports the provision for the comp savings it proposes for their members and others.

AMA guidelines for determining permanency

This legislation allows AMA guideline submission of impairment ratings for permanent partial disability benefits and requires the commission to consider an AMA impairment rating, if one is presented.

I consider the debate over impairment rating evidence to be something of a red herring in the comp reform process. If the arbitrators and commissioners are told to consider ratings, they will do so or face early retirement.

The chamber opposes, as it believes additional strengthening is needed due to the Continental Tire decision. The chamber feels the law should require the commission to make the impairment determination by a preponderance of credible evidence.

Credits for body as a whole awards

This legislation provides credits of prior injuries under 8(d)(2) for “body as a whole” injuries, and provides for a definition of “same part of a spine.”

I consider this a common-sense change that implicitly “reverses” the liberal and activist decisions by our reviewing courts that would allow someone to be adjudicated 200% or 300% (or more) disabled.

The state chamber is on record in support, but feels the legislation needs correcting language.

Shoulder to be a part of the arm, and hip to be part of the leg

This provision reversed the Will County Forest Preserve v. IWCC Appellate Court ruling regarding the shoulder not being part of the arm, and establishes one’s hip is part of the leg, returning Illinois comp to anatomical correctness.

With respect to our judiciary, I personally feel it is a shame we have to pass legislation and waste time returning to common-sense principles.

The chamber is on record in support, as this provision returns 100 years of legal precedence the courts took away under the Will County Forest Preserve decision in 2012.

Waiting period at start of total temporary disability

This provision revises the current three days, to five working days, the period for when temporary total disability begins. It revises, from the fourth day to sixth day, the beginning of weekly TTD compensation payments.

This will provide some savings but not much.

The chamber is on record supporting the new law but confirms it will have minor impact on comp savings for employers.

Wage differential changes for professional athletes

This legislation provides a wage differential cap for professional athletes.

I don’t have a problem but the effect/scope is very limited.

The chamber supports this move but confirms there is no savings impact for those that do not employ professional athletes.

Physical therapy, occupational therapy and chiro visit limits

The legislation limits chiropractic, occupational therapy or physical therapy to up to 24 visits per claim.

This reform would cure a common complaint of all of our defense clients across the state. I think the state chamber’s concerns are spot on and make more sense than my view because the “limit” might cause every claimant to want to blow the insurance carrier or self-insured employer's money to get all 24 visits provided. I am also sure all claimant attorneys would start coaching/telling doctors and injured workers to prescribe and get all 24 visits.

The chamber opposes the new provision, as it would entitle an injured employee up to 24 visits per claim. The chamber supports requiring providers to render services that are medically necessary, reasonable, are based on medical evidence and meet nationally recognized peer review standards of care and guidelines.

Arbitrator rotation

The commission chairman determines arbitrator assignments, rather than using two-year rotations.

I don’t feel this needs legislation, and the chairman should simply follow current law.

The chamber says this proposal needs revision. It has language to preserve the original purpose of protecting injured workers and employers from arbitrators who are unfair or become too “comfortable” with claimant attorneys in their call area.

Arbitration status calls go electronic/online

This provision allows parties or their attorneys to appear by telephone, video conference or other remote electronic means as prescribed by the commission.

I am concerned that this is going to turn into non-lawyers practicing law, but we will have to see. I don’t feel we can stop the intrusion of electronics/online services into our lives.

The chamber supports the provision because it should save some costs for its members and potential members.

Appeal bond requirement

This provision removes the WC appeal bond requirement for State of Illinois and its agencies.

I don’t see this having much of an impact for your business or mine.

The gurus at the state chamber feel all Illinois employers with viable WC insurance or self-insured status should be able to waive and save the additional cost of an unneeded and expensive appeal bond.

Comp fraud

This provision adds to the Criminal Code criminal penalties for acts of fraud that are listed in the Workers’ Compensation Act. The intent is to eliminate the response from certain states' attorneys who will not prosecute workers’ compensation fraud, as they view such cases simply as a civil matter. The provision also revises penalties for fraud in the WC Act.

I support it but don’t feel it is much of a change.

The chamber supports it as well.

More penalties on employers

This provision adds new penalties on employers but does not improve medical care for injured workers, provide more timely benefits or reduce friction in the system.

I don’t see any reason for these proposed reforms and don’t feel they will improve anything.

The chamber supports changes to improve the system for legitimately injured workers and employers.

Electronic medical billing requirement

There are two new electronic billing penalties: An IWCC penalty of 1% per month in interest if a complete electronic bill is not paid or objected to within 30 days; and a Department of Insurance penalty of $1,000 to $10,000 for simple failure to comply with the electronic claims acceptance and response process.

Illinois workers' compensation is inexorably moving to electronic medical bill submission and processing.

The chamber opposes this provision and has alternative language that you can can and should ask about.

Requirement for rapid medical authorization of proposed/recommended WC care

This provision addresses the Hollywood Casino v. IWCC decision establishing penalties for unreasonable or vexatious delay of authorization of medical care.

We hate this concept and feel the arbitrators and commissioners should use common sense in handling slow or non-authorization of important medical care.

The chamber is on record to oppose and has drafted alternative language that utilizes Section 19(I) provisions, which were part of SB 2901 approved by the House Democrats on Jan. 9, 2017.

WEAR Commission

Creates a WC Edit, Alignment and Reform Commission composed of legislators, petitioner attorneys and respondent attorneys, for the purpose of recodifying the act without changing substantive law or established case law. The commission is to report by Jan. 1, 2018.

I consider this another do-nothing blue-ribbon panel. The tasks described could be taken up by the commission, the Commission Advisory Board, the Medical Fee Schedule Advisory Board or others.

The chamber is neutral, as this provision will be of no help to employers.

Self-insurer reporting

This provision requires more reporting to the IWCC and DOI for self-insurers. It is meant to protect proprietary information and requires reporting of aggregate data.

I don’t see the reason for even more reporting and regulation.

The chamber is on record as neutral, as the legislation adds additional government burdens on self-insured employers without any clear benefit for employers.

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.