Keefe: Court Spells Out Employer's Liability Limits

Wednesday, January 24, 2018 | 0

The Illinois Appellate Court, Workers' Compensation Division, ruled an Illinois employer's liability for an injured worker’s medical benefits was limited to the amount actually paid to the treatment providers, even if they were paid at a discounted rate negotiated by the worker’s personal health insurance carrier.

Eugene Keefe

In Perez v. IWCC, issued Jan. 9, claimant Perez worked as an assistant manager at a Wendy’s restaurant. She allegedly injured her left knee in June 2007 when she slipped on a wet floor at work. She received medical care, including surgery, which was paid for by her private health care insurance.

The insurance carrier made payments of $17,597.96 for Perez’s care, and she made copays of $260, but counsel for Wendy’s conceded that the state Medical Fee Schedule would have required payment of $37,767.32 to the health care providers and surgeons.

In April 2011, former Arbitrator Kinnaman found Perez’s knee injury was not work-related. The Illinois Workers’ Compensation Commission agreed, as did a circuit court judge.

Perez sought review by the Appellate Court, WC Division. In March 2014, the Appellate Court reversed in one of its unusual and controversial “secret” or “non-published” rulings, finding her injury was compensable.

Having reviewed that 20-page “sort-of-unpublished” ruling, the court’s members made all sorts of important evidentiary findings and legal determinations that, in my respectful opinion, should always be published.

On remand, the IWCC determined that Perez was entitled to about four and a half weeks of temporary total disability benefits, as well as 43 weeks of benefits in the amount of $288 per week for the permanent loss of use of her leg.

The commission panel also ordered Perez’s employer to pay her medical expenses but did not specify the amount. An appeal followed, and a circuit court judge later ordered the commission to determine the amount of medical benefits due to Perez.

After the case was remanded again, the IWCC ordered the employer to pay Perez’s medical providers $17,857.96. The circuit court upheld the commission’s decision.

In their second ruling on this never-ending knee claim, the Appellate Court, WC Division, explained the Illinois Workers’ Compensation Act obligates an employer to pay a care provider’s negotiated rate, if applicable, or the lesser of the provider’s actual charges, or the state Fee Schedule amount.

Perez’s care providers accepted a low negotiated rate from her private health insurance carrier. The court said that meant the employer was liable only for the amount of medical expenses actually paid, pursuant to the negotiated rate, even though it hadn’t been involved in the negotiations.

The court’s ruling said “there is no limiting language that requires the employer to pay the negotiated rate only when it is negotiated by the employer or the employer’s own insurance carrier.” Had the legislature intended to limit negotiated rates and agreements to those between the employer or the employer’s own insurance carrier, the court posited, it could have included the restriction.

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.