Illinois Workers Comp Medical Costs below neighboring states Wisconsin, Iowa and Indiana

CRAIN'S Chicago Business, Senior Reporter, Thomas Corfman ( http://bit.ly/1MtlVdW ) recently reported that under the 2011 IL workers comp reforms, medical costs per claim have now dropped by 15%.   Citing a report from the Workers Compensation Research Institute ( http://bit.ly/1Q7kgve ),  CRAIN"S Chicago Business reported that Illinois Workers Comp medical payments fell by over 15%, down to an average of $14,513 per claim, during the 12-month period ending Sept. 30, 2013, which was over15% down from $17,140 per claim incurred in 2010-11.

I expect that when the final numbers roll in from 2014 and 2015 we should see some substantial medical savings documented for Illinois employers from the major workers comp reforms put in place in 2011.

According to the WCRI report, Illinois' medical payments per claim are down lower than Indiana ($18,863), Wisconsin ($17,787) and Iowa ($16,051) for the same review period. JUST AMAZING.

This is great news for all Illinois employers who have been waiting patiently (or not so patiently) for lower workers comp premiums based upon the lowered Illinois medical fee schedule rates and UR reforms.

Some of the medical savings incurred are likely due and directly attributable to the 30% slashing of the IL Workers Comp Medical Fee Schedule reimbursement rates from 2011 and some of the savings are likely attributable to new utilization review enforcement which challenges what medical care is actually being approved by Illinois workers comp insurance carriers as being both "reasonable and necessary".

Widespread utilization review is now often leading to great difficulty for injured Illinois workers seeking recommended medical treatment.  Out-of-state UR doctors in a "medical records review only" are often utilized to deny medical treatment recommended by Illinois physicians including lumbar fusions, length of PT, objective testing or common surgical procedures. 

Perhaps this review process needs to be brought back into our state to compare apples to apples on what is considered both reasonable or necessary.

Injured Illinois employees are typically forced to seek out representation by an experienced Chicago workers compensation attorney  for medical treatment which has been recommended but denied and for pursuing UR appeals.  Trial may often prove necessary to contest the initial UR denial of medical care but, for better or worse, the overall reform package of 2011 is working to cut medical costs for Illinois employers.


Illinois workers comp reform: Notice of Preferred Medical Provider


The Illinois Workers Compensation Commission has approved the official language to be used to notify injured employees of employer selected "Preferred Provider Programs" (PPP) that is, employer selected medical networks for work injury related medical care. This is the official form language to be used to notify the injured employee of the employer's selection of their medical provider network as soon as the employer is made aware of the work injury. 

Employers can voluntarily issue an advance notice of workers comp medical network by using the additional form language provided.  However, even if the advanced general notice of workers comp medical network is posted or given to all employees, the above official Notice of Workers Comp Medical Provider (PPP) must still be issued in a timely manner soon after the employer receives notice of an actual work accident or work injury.

These PPP networks must still be approved by the IL Dept of Insurance and approvals are expected for use by Jan 1, 2012. The Illinois Department of Insurance is currently accepting Preferred Provider Program applications for approval and as the process unfolds, the approved list of  "Preferred Providers" ( pdf download) will be available on their website.

The IL Dept of Insurance website also provides FAQs regarding Workers’ Compensation Preferred Provider Programs and any additional questions concerning PPP applications can be directed to Kari Dennison (217) 782-1771 with the Illinois Department of Insurance.

Illinois workers comp attorneys -- 10-26-11


New 2012 Illinois Downstate Arbitration Hearing Locations


As part of the new Illinois workers compensation reform package, downstate hearing locations will be consolidated into the 6 regions listed below to take effect on January 1, 2012.  The reduction in hearing locations is structured to conform to the new rotating arbitrator requirements in House Bill 1698/Public Act 97-18. 

The reduction of the current 23 downstate hearing locations to the 16 new locations will increase the efficiency of the Commission by reducing associated facility costs and attempt to evenly spread out pending caseloads between arbitrators for more efficient allocation of human resources. The reduction will also require some injured workers to drive greater distances to have their claims heard for trial.

Three arbitrators will now appear at each of the new hearing site locations in rotation at each location as required by the new law and cases will be randomly assigned among them.  A set of 3 arbitrators will circulate within the designated geographical zones with each arbitrator taking their turn at handling monthly hearings and motions with a return to the 90-day continuance cycles.  

The rotation of the 3 arbitrators through a particular downstate hearing location was put into place by the new Illinois workers comp reform law to prevent what was perceived as overly familiar relationships between practicing attorneys and sitting arbitrators.  The legislators specifically wanted to bust up what they perceived as being overly familiar or overly "cozy" relationships between practicing attorneys and arbitrators regularly appearing at specific downstate hearing locations. 

New 2012 Arbitration Regions/Hearing site locations effective 1-01-2012

1) Collinsville, Herrin, Mt. Vernon

2) Quincy, Springfield, Urbana

3) Bloomington, Kewanee, Peoria

4) Geneva, Joliet, Ottawa

5) Rockford, Waukegan, Woodstock

6) Wheaton -- 3 Chicago arbitrators will be assigned to Wheaton

The Workers Compensation Commission will shortly proceed to reassign all pending downstate cases to the new hearing locations and will make new assignments to individual arbitrators once all the arbitrator re-appointments have been made and the new hires for arbitrator are announced.   Notice of Hearing forms are expected to issue reflecting both the new geographic location for hearing and the new arbitrator assignments.  Partially tried cases will continue to stay with the original arbitrator assigned where ever possible for completion of hearings and issuance of decision.

Questions regarding the new hearing locations should be directed to Ms. Bertha Parker at bertha.parker@illinois.gov .

Illinois workers compensation attorney
  -- 9-05-11


IL Workers Comp Reform: Aggravated DUI will be denied


On August 8, 2011, Governor Quinn signed Senate Bill1147 into law to prevent workers convicted of serious crimes from claiming workers compensation benefits.

Senate Bill 1147 denies workers compensation benefits for injuries sustained during the commission of 1) a forcible felony, 2) an aggravated DUI or 3) during a reckless homicide if those crimes resulted in the death or severe injury to another person.

According to a Chicago Tribune article, the new law was inspired by the Illinois State Police trooper's high-speed wreck that killed 2 sisters in down state Collinsville. The state trooper was reportedly driving more than 100 mph and using his cell phone on I-64 in southern Illinois when his cruiser crossed the median and slammed into another car killing the 2 sisters.  The public was outraged that the injured officer could apply for and perhaps receive workers compensation benefits resulting from his own outrageous conduct.  The trooper subsequently resigned and his workers compensation case was denied but even the possibility of collecting benefits caused the new law to be pushed into place as part of the new Illinois workers compensation reforms.

Now, after a worker is even charged with a forcible felony, an aggravated DUI or reckless homicide resulting in injury, the injured employee is prohibited from collecting workers compensation benefits until their criminal case is finally concluded.  The employer can terminate or refuse to pay benefits until the conclusion of any pending criminal case.

Under the new law, an acquittal or dismissal of the criminal charges does not guarantee receipt of benefits. After the criminal case, an injured worker who is not convicted will still need to prove entitlement to benefits just like any other injured worker but, a finding of guilty will prohibit benefits for injuries sustained during the criminal conduct because the injured employee is considered not to be “in the course of employment” during the commission of any of these crimes.

Usually an employee committing a crime would not collect benefits even without the new law.  Criminal activities are not considered to be in the scope of employment and workers committing crimes are generally not awarded benefits. Traffic offenses were not always included in that prohibition.  It is possible that an employee entertaining business clients or traveling on business might be guilty of drunk driving and recover benefits in an accident.  Now however, if the drunk driving results in injuries to a 3rd party and the employee is convicted,  he or she will be prohibited from collecting benefits.  Workers entertaining clients might want to think twice before driving under the influence. They may be working but their resulting injuries may not be paid and that would also include medical bills.

Conviction for driving drunk or under the influence of drugs and injuring another person will now prohibit the injured worker from collecting benefits including medical bills.  This new law slams the door shut on the possibility of workers trying to collect benefits if found guilty of injuring another person during otherwise criminal conduct.

Illinois Workers Compensation Attorney -- 8-22-11


Attorneys Fees on MSA Funds Confirmed in N.J.


The New Jersey Superior Court recently considered whether Medicare regulations and CMS allowed an attorney to recover attorneys fees for creating a settlement obtained on behalf of a client in a civil suit from the Medicare set aside funds itself.   Surprisingly, they said Yes.

The Court in Hinsinger v. Showboat  (L-3460-07, released 5/19/11) reviewed the provision in the Code of Federal Regulations 42 C.F.R. 411.37 permitting the reduction of procurement costs from MSP recoveries in conjunction with the CMS Memo of May 7, 2004 regarding attorney set up costs associated with MSA trust accounts and found no reason why attorneys fees shouldn't apply to procurement of MSA recoveries in civil settlements as well as other primary insurance such as workers comp.

This case would approve taking attorney's fees on procurement of workers compensation MSA funds as proper under the Code of Federal Regulations.  I know of no controlling case law in Illinois governing the subject to the contrary but, the propriety of taking attorneys fees on funds created for MSA accounts has come up many times in discussions.

This New Jersey civil case would seem to stand for the proposition that attorney's fees for procurement of MSA funds are proper in both personal injury and workers compensation settlements.  42 C.F.R. 411.37 permits the costs borne by the party against which CMS seeks to recover be deducted from Medicare's recovery amount.

Read the Hinsinger article on the MedVal  Official Medicare Set Aside Blog by Jennifer Jordan and Ryan Roth.   It happens to be my best source for keeping up with all things Medicare Set Aside and MSP compliance.   I have previously endorsed Jennifer Jordan's excellent new book on MSP Compliance and Medicare Set Asides .  It is a must read for attorneys and industry professionals involved in MSA or MSP compliance, mandatory claim reporting and those who need insight into CMS  requirements and procedures.   The book covers the regulations, the statutory revisions and relevant case law all in one  place with practical instruction, commentary and recommendations for MSP compliance. 

The problem remains presently that CMS and Medicare do not currently recognize any reduction in the approved MSA funds for attorneys fees for workers comp.  It seems a fairly standard practice in Illinois to allow attorneys fees on most subrogation claims where the settlement funds recovered for the client are paid out to a 3rd party lien holder interest pursuant to the Common Fund Doctrine.  It remains to be seen however whether regular Medicare coverage will kick back in on an MSA fund account that has been reduced for attorneys fees. 

At least in a civil case, the New Jersey ruling would tend to support a claim that Medicare's interests in the litigation were adequately protected even where the MSA future medical funds were reduced by attorneys fees.

Contact our office to speak with an  Illinois workers comp attorney to discuss open medical rights and Medicare set aside fund coordination in Illinois workers compensation claims.

Chicago workers compensation attorney  -- 8-18-11


2011 Illinois workers comp reform: Medical Causation


    Has the test for causation changed with the new 2011 workers comp reforms ?? A change may have taken place in the "causative factor test" to now require proof of medical causation by a "preponderance" of the evidence.   The new law is subject to Appellate Court review and interpretation but, the newly stated preponderance of the evidence standard may eliminate claims that "could or might" be related to a work injury. 

    Before the 2011 reforms, the "causative factor test" was used on whether or not the work accident "could or might" be related to the resulting injury.  That is, if the work injury could or might be a causative factor in
producing the disability or in producing the need for medical treatment. 

    Under the new codified definition of causation, (820 ILCS 305/1(d) on pg. 23) the statute now reads as requiring proof by a "preponderance of the evidence" that the injury arises out of and in the course of the employment.  It was explained that this new definition merely restates what was already Supreme Court case law but Illinois workers compensation attorneys are questioning whether the old test of "could or might be related” is in fact dead.  

     Without a crystal ball, no one is certain yet on how the Courts will apply the newly codified definition of causation but going forward that new test may require a higher burden of medical proof.  It would be a substantive change and would likely apply to accidents occurring on or after July 1, 2011.  The new test probably requires that the disability or the need for medical treatment was "more probably than not" related to the work injury.  The unofficial definition of "preponderance of the evidence” is by a greater weight or more probably than not. 

     A medical opinion may be required stating that the physical injury was "more probably than not" related to the work accident rather than by stating medical opinions as mere possibilities under the old test.  I can see where the old test of "could or might be related" is now arguably insufficient to award compensation. 

      Further efforts at changing the statutory definition of "causation" may not be necessary.  Any pending suggestions for changing the definition of causation further to "primary cause" or "sole cause" are aimed primarily at eliminating claims for aggravation of preexisting condition.  I suspect that the primary motive for any proposal changing the definition of causation to "primary cause" or "sole cause" is aimed directly at eliminating aggravation of preexisting condition claims in older workers.

     As I see it, that is problematic for 2 reasons: 1) older workers all have preexisting conditions so changing the definition would discriminate against all older workers, and the older the worker, the more it discriminates and 2) more importantly, the question of "causation" or "aggravation"  has always been a medical question for the doctors and not for the lawyers.  If the injured worker's treating doctors do not give an opinion supporting causation, the workers comp claim will usually be denied for a failure of proof. 

     The new question now presents itself on how much medical proof will an injured worker be required to show under the newly codified definition of causation??  I could be wrong but I believe that the statute now requires medical proof  by a “preponderance” of the evidence, or in my translation, a medical opinion that the disability is "more probably than not” work related.
      We will need to wait for the Illinois Courts to confirm the proof required in medical causation but in the mean time we can expect a lot of litigation involving changes in the new reforms.

      I believe the battle ground in many cases will now be the "causative factor test" and whether it requires a showing that the work injury is "more probably than not" the cause for disability or the cause for medical treatment.

      The old standard of "could or might be related” was recently criticized by the State's Attorney General, Lisa Madigan.  She correctly indicated that the old threshold test on causation made it difficult to defend questionable cases.  The old test of "could or might be related" was criticized as an extremely low threshold for establishing medical causation.  If the new definition of causation is now read to require proof by a "preponderance" of the evidence, that may no longer be the case. The old "could or might be related" medical opinions may now be inadequate to win a claim for compensation. 

     There is some room for legal debate and the courts will have to decide the issue but proving a claim for compensation may now be much more difficult under the new changes effective 7/1/11.

     The question of medical causation is still largely a question for the doctors on whether a work accident "aggravated or accelerated" an underlying medical condition but changing the law on causation any further to require that work be the "sole cause" or "primary cause" would shift the costs of aggravation of pre-existing condition claims over to employer or union group health care plans, over to the employer and union disability plans and eventually, shift the cost of those injuries over to the Federal or State Public Aid, Medicare, Medicaid and Social Security disability programs. 

      Proposals to change causation to eliminate aggravation of pre-existing condition claims in older workers would shift those costs over to other plans.  I don't see the actual savings there for Illinois employers.  Workers comp premiums would go down but their group health care costs would go up.  There is no real savings advantage that I see for business in changing the wording of causation further but merely a cost shifting over to a different loss column.  It doesn’t seem to be either humane or a practical political reality to eliminate compensation for older workers with pre-existing conditions, especially where those pre-existing conditions were caused by the job itself. 

     Under the newly codified definition of causation, further efforts at changing the statutory definition of causation may now prove unnecessary.  As they say, only time (and litigation) will tell.

Chicago workers compensation attorney --  7-17-11


Keep the Arbitrators and Return Injured Workers to Work


    Keep our Arbitrators. On behalf of my clients, I emphatically request not getting rid of our highly trained and experienced arbitrators in favor of new appointees.  Commissioners are known to be appointed to short terms coming in. The sitting Governor's office has always held sway over the political bent or philosophical leaning of the Commission by regular appointment of Commissioners. But, our Arbitrators as the initial hearing officers were always civil service employees to prevent political persuasion from constantly effecting their judgment in awarding or denying compensation.

     I would think that all Illinois business interests, unions, employers and the insurance companies would all want predictable results from our experienced hearing officers rather than random erroneous decisions by new hearing officers.  Workers compensation is full of complicated legal exceptions, full of known and accepted doctrines of risks that arise from the employment and full of numerous and unending exceptions.  It takes a fairly long time to learn all the law, the medical terminology and the human anatomy to correctly sift through questions of work trauma or aggravation of a medical condition versus idiopathic pre-existing conditions for a determination of cause and effect in awarding or denying compensation.  Add in some physician CPT billing codes with some ICD-9 hospital codes on the medical bill forms, mixed with some Medical Fee Schedule calculations and add in battles over average weekly wage formulas for correctly deciding weekly benefits and you start to get my drift.  It's a hell of a lot more complicated than it looks.

    Medical causation is a crucial question for all our hearing officers.  So crucial in fact that our legislators have been fighting over the legal definition of causation for Illinois workers comp cases for the last 8 months (and really since 1975).  Illinois business interests and the unions should both make a concerted push to retain most if not all of our arbitrators and Commissioners to guarantee consistent application of the workers compensation law. 

     It must be clearly stated that our arbitrators, the Courts and the Commission have not been the problem on driving up workers compensation costs in the recent past.  I know that certain attorneys have blamed them.  But in tracking these awards for over 25 years, the value of most of these disability awards has actually been falling. Part of that decline in the awards is the result of arthroscopic surgery and our doctors are getting much better surgical outcomes which result in far less disability.  These arbitrators and Commissioners do not need to be replaced in wholesale fashion as the main culprit in increasing the costs of workers compensation claims.  Medical inflation had been a real factor since 1995 in driving up costs but that was capped off in the 2005 reforms.  Recently, Medicare Set Aside funding for Social Security applicants has had a huge impact on driving up the medical costs per claim on our Illinois workers compensation cases for the past 10 years.

      Employers, Medicare and the "Great Recession" should all step up and take a big bow for their outstanding performance on the huge run up in Illinois workers compensation claim costs.  Laying off workers with work related disabilities or medical restrictions in a recession costs big money.  Whenever an employer refuses to take an injured employee back to work within the medical restrictions, the value of the claim jumps dramatically.  That is an understatement.  The claim costs jump by 500%, 1,000% or 2,000% or more.  A lot of Illinois employers were their own worst enemy by not taking their own injured workers back to work.   

     That failure to return an injured employee to work within their restrictions results in large wage differential claims (costly partial pensions for life)  or sometimes full permanent disability benefit pensions for life if that worker can't find any reemployment in any job at all.  If they then happen to apply for Social Security disability, you can add on MSA funding.  That is, Medicare wants all possible future medical expenses for an expected lifetime of benefits to be paid out of the worker’s comp settlement.  Often that's anywhere from an extra $40,000 to $200,000 dollar increase added on top of back surgery claims and on top of the lost earnings portion of the claim.

     If an Illinois employer doesn't want their injured worker back to work within restrictions, how can they expect the insurance company or the worker to find comparable employment or expect other Illinois employers to hire that same worker with those same restrictions at their same former rate of pay.  It doesn't happen.  The worker almost always suffers a large wage loss and a big earnings reduction.  It’s every worker's worst nightmare that the work injury will end their career and end their employment and their ability to support their family.  Let's not be uneducated or ignorant of the consequences.  If an employer blows a worker out of his/her career due to a job injury, expect to pay a lot of money for it.  And, I might add, in this unending recession, don't expect them to find a high paying job elsewhere.

      Illinois employers who routinely treat their injured workers like disposable goods (especially in the construction industry) and throw them to the street when slightly damaged like throwing out the produce in the vegetable isle at the grocery store have directly shot themselves in the foot or shot themselves in both feet for many of the past several years.  It’s almost a cultural habit of retaliation for the worker getting hurt to begin with.  I've heard risk managers say "I'm not taking that !#!*^&!* back to work here" as if anyone in their right mind would ever intentionally want a hip replacement or back fusion to begin with.  It's a very, very bad and very costly habit.

     I‘m going to give away my #1 best kept secret in lowering an employer's worker's compensation costs -- take your injured workers back to work -- early and often -- don't blame the system, don't blame the arbitrators, don't blame your attorneys or don't blame the Commission for the high costs of your workers comp claims when treating injured workers like disposable machinery.  Needless to say, even throwing away serviceable machinery like cars and trucks before their time is costly too.   My plea here is to keep the current experienced Arbitrators and have all our Illinois employers learn to stop habitually throwing away their injured workers.  If a few arbitrators are knowingly replaced for good cause, then so be it.  But keep the rest of the highly trained and experienced good ones and let Illinois employers kill off their most costly workers comp claims by taking injured workers back to work.  Spare those huge lost earnings claims and stop paying those huge Medicare future medical accounts by simply returning injured workers to work.

Illinois workers comp attorney -- http://wc-chicago.com --  7-11-11


Illinois Workers Comp Reform: 2011 Major Workers Comp Reform Summary


      With the on again, off again, drama of Illinois workers comp reform, many wanted to know what the reforms were about, what they actually meant, questioned the future impact of the reforms and questioned whether the reforms were far too little or far too great or in the wrong direction? It seems that everyone had a suggestion and a strong opinion on what needed to be done. From what I see, your position and your opinion depend on where you sit and the view from your perspective. Myself, I have never seen so many differing proposals or so much sponsored workers comp legislation.

     Let me start off by saying that before the 2005 reforms, Illinois had no medical fee schedule in place for workers compensation. Doctors and hospitals would charge what they considered to be the "usual and customary" rates in any given area. Those rates varied greatly by  provider and injured employees were allowed their own choice of 2 doctors for work injury care.  Both factors made estimating or controlling the medical costs or medical reserves for employers and insurance carriers difficult.  Many employers accused employees of doctor shopping for a favorable opinion. Some of that was certainly true and much of it was guided by the advice of an experienced Illinois workers compensation attorney.  Of course workers always have their own network of favorable doctors by word of mouth.

     The 2005 Medical Fee Schedule introduced certainty on medical costs and medical inflation by placing caps on doctor and hospital medical fees but they did not limit outpatient services and did not limit the choice of doctor for the injured worker. In 2009 the Illinois workers compensation fee schedule was extended to cover all outpatient facilities like physical therapy and ambulatory surgical centers but the 2005 reforms failed to regulate pharmacy, medical hardware or medical implants. These caps provided some reliability on what the doctors and hospitals could charge for procedures but they did not control all associated medical expense. The caps also failed to address out of state medical providers except to limit payment to 76% of actual charges.

     Importantly, the 2005 medical reforms capped rates of medical inflation and tied increases in the fee schedule to the increase in the consumer price index for urban areas (CPI-U) but our schedule was criticized as the 2nd highest workers comp reimbursement rates for hospitals and doctors in the nation (I should point out for those states that have a fee schedule since some states still don't).

     Attempts at limiting medical care with Utilization Review under the 2005 reforms were largely ineffective in limiting the number of visits to physical therapy, number of chiropractic visits or the number of visits for ongoing pain management because the UR reports (Utilization Review) although granted by statute were largely held to be hearsay documents and therefore not admissible into evidence. The insurance carriers can blame themselves for UR reports not being admitted into evidence.  If they had used local in-state, Illinois doctors, surgeons, physicians and chiropractors as suggested for their Utilization Review programs for assessment of proper reasonable medical care, the depositions of the certifying doctor denying care could have been available to the opposing attorneys and then their opinions could have gone into evidence in the form of a deposition but subject to cross examination rights by the injured workers' attorney.

     If I were the judge, even if the UR reports did come into evidence, I don't know that I would ever believe some out of state doctor from New Jersey on what remained reasonable and necessary medical care in Illinois on a cold review of medical records either, especially when that doctor had never examined the patient.  Nonetheless, UR might have worked far more effectively for insurance defense carriers and attorneys if they had used Illinois doctors for their reports.

     Recently, in this unrelenting recession, our Illinois employers were loudly demanding cuts in high workers compensation costs. Our Illinois Senate spent the last 7 months reviewing options and holding public hearings throughout the state. Multiple reform measures were introduced by multiple parties but none could be agreed upon politically, largely because in any reduction in workers compensation costs, it would have to be borne by someone invested in the system-- either by reduced benefits for the injured workers, the doctors, the lawyers, the hospitals or the insurance carriers. There was very little agreement on who should give up money or any rights and while the haggling persisted, some of our major Illinois employers threatened to leave the state.

      Governor Quinn promised to deliver Illinois business a new package of Illinois workers comp reforms and Michael Madigan and the Illinois Democrats in the House were able to deliver and pass the reform legislation on 5/31/11 after much haggling and fighting. The legislature passed these reforms in the name of attracting new JOBS.

     Republicans in the House would not support the workers compensation reform package largely because medical rates for doctors and hospitals were to be cut by 30% off the current fee schedule in the 2011 reforms. These drastic cuts of 30% in reimbursement payments were fairly severe for anyone's operating budget and several hospitals testified they would be forced out of business.  But, I have never seen Republicans not want to cut costs for Illinois business.  It seems that the House Republicans wanted Illinois workers comp reform but they didn't want to severely cut medical costs by 30%.

     It should be noted however that Illinois House Republicans were willing to cut medical payments in Illinois workers comp payments by 20% but they were dealt the severe blow of 30% reductions in payments as to what is considered "reasonable" payment for medical.  Those cut rates still far exceed Blue Cross payments, Medicare or Public Aid payments but now some of our best doctors in Illinois may elect to opt out of Illinois workers comp and not accept the new reduction in payments, especially if they don't need to.

     In private conversations with insurance specialists, there is some talk among workers comp insurance professionals that they are willing to pay a higher workers comp premium rate over the now allowed Illinois workers comp medical reimbursement rates for exceptional operative results and outstanding surgical outcomes. The carriers after all save far more money when the permanent injuries are limited by talented doctors and a worker can return to work.  Those workers comp payment rates can be governed by a contract for workers compensation medical care and a provider contract will control over the current Illinois workers comp medical fee schedule reimbursement rates.

     I suppose its much like the old saying that "you get what you pay for".  Discounted prices will usually lead to higher frequency of visits on discounted medical rates for services and in the real world, the best results cost money.

   In the new 2011 Illinois workers comp reforms, PPO plans have now been introduced to limit the choice of doctor by the injured worker to a PPO network (for participating employers with contractual PPP agreements with providers) with limited exceptions for choice of outside medical provider for the injured worker.

    The 2011 compromise package is somewhere in the middle between the previous rights of injured workers to choose their own medical care and the full list of demands by Illinois business groups for slashing workers compensation costs.  These new 2011 Illinois workers comp reforms represent the most major reforms in decades, and in my view, probably the largest reforms since 1975.  Greg Baise, president of the Illinois Manufacturers’ Association has said “We have been fighting for this kind of reform since 1975.” as quoted in the Insurance Journal.

    For the 1st time in my career, the injured worker's choice of doctor is very limited whenever an employer participates in a new approved PPP plan. UR reports will now be admissible into evidence but telephone depositions will be available to cross examine out of state physicians, surgical hardware and surgical implant costs will be regulated to a cost plus basis, costs for prescriptions that are dispensed outside of a pharmacy or through a doctor's office will be regulated, presumptions exist against a compensable accident in cases with blood alcohol intoxication of .08 or with any evidence of drug impairment and many other numerous changes have transpired including a hugely dramatic change of all Commission staff by terminating all the Hearing officers of the current administration.  Of course, some of the best and most experienced arbitrators and Commissioners are expected to be reappointed but not all will be reappointed and a fairly large reduction is expected in the number of hearing sites and downstate arbitrators. (see our subsequent post on reduction of downstate hearing sites)

     No, these new 2011 workers comp reforms do not meet all the demands by Illinois business groups for complete control of medical care, and no they don't severely slash workers benefits all the way back to the days of the company store but they do meet half way in the middle somewhere by introducing PPO plans, by introducing AMA Guides as a reference point for arbitrators in permanency awards and in cutting the length of workers' wage differential awards for injured workers with partially reduced earnings due to injury.

    Going forward with these new reforms, Illinois will be a much more "business friendly" place to encourage job growth and to encourage companies to locate here.  But, there is no question that these cost reductions were borne by cutting rights of injured workers to choice of medical care and by cutting payments to doctors and hospitals by 30% in order to lower the workers compensation costs for the employers. Was the compromise worth it ?? Will there be enough savings ?? Will there be the promise of new jobs or just higher profits by insurance carriers ??  I say yes there will be savings but exactly how much will sort of depend on whether the employer participates in the new PPO preferred medical provider programs or not and on the profit margins of the insurance carriers.  There are some new major changes in place to monitor profitability of insurance companies and to keep an eye on the Illinois insurance market. I am sure that insurance carriers aren't happy with these new reporting restrictions on them either but they are still lucky that their profits weren't capped as well like some of the other states. Everybody invested in the system had to "have some skin in the game" to share a portion of the cuts to quote Kwame Raoul.

   The Dept. of Insurance expects up to 10% reductions on employer insurance premiums mainly due to the 30% cuts in medical fees but I expect that savings will be much greater in the 15% or even higher range generated by the new PPO plans, especially when it comes to the construction trades and total loss of medical choice to PPO plans.  New pilot programs are yet to be set up for handling workers comp rights through the collective bargaining agreements but these changes are coming.  The savings on medical payments will be fairly immediate starting in September 1, 2011 when the 30% medical fee cuts kick in but savings through PPO plans and other regulations will take time for full integration and acceptance by the industry at large and time to track and report the changes.
    A pilot program is being approved by the Dept. of Labor for 2 construction trade unions that are allowed to negotiate away worker's choice of doctor in collective bargaining agreements for complete employer control of medical choice restricted only to PPO plans and will now allow for alternative dispute resolution such as going through binding arbitration, mediation or union grievance procedures instead of the Workers Compensation Commission. Details are still in formation.

    Here is our short list of the major reform package of 2011.  Its not intended to be all-inclusive list but only an overview of major 2011 Illinois workers compensation reforms.  16 Major Illinois Workers Comp Reforms 2011 (slow loading  .pdf

    We will try to update or modify the summary as needed and as more details become available. 

    Thank the Governor and the Democrats in the House and a bipartisan effort in the Senate for significantly cutting our Illinois workers compensation costs and for trying to attract new jobs and bring new business to Illinois. See Rich Miller's political description from the Capitolfax.com blog.  He tracked the constant progress of reforms and other legislative efforts this session.  As the legislative effort unfolded, I kept a constant eye on Capitolfax.com and Illinois.StatehouseNewsonline.com .  Let me give a shout out to both for excellent coverage.

     There are many ways to cut costs in our system but its complicated, someone's interests will always get cut. Someone's Ox will always get gored.  There is no doubt that these reforms lower Illinois workers compensation costs for employers, there is no doubt that they reduce medical provider fees by 30% and there is no doubt that they restrict the rights of injured Illinois workers to choice of medical care.  Our medical providers still remain the 2nd highest paid workers comp reimbursement rates in the nation so they cannot scream too loudly about the cuts but, some of our best doctors may decide to stop treating injured workers.

    The number of claims has been dwindling by 40% due to much higher safety standards and safety enforcement but employers have continued to see a rise in premium costs.  The new insurance reporting should soon tell us where and why those costs continue to go up as claims go down.  Employers should soon see premium savings from their carriers.  It will take some time for some of these changes to start showing up with significant savings but the Department of Insurance will request new premium advisory rates based on these changes and reforms to be announced fairly soon by September.

     For questions on changes or how it will effect employers, Illinois medical providers or injured Illinois workers, it would be wise to consult an Illinois workers comp atttorney or experienced risk manager or experienced broker or maybe even all three for a conference. If not us, then consult at least someone experienced in Illinois workers compensation. These are very significant changes despite the heavy background drum beat by the pessimists and the naysayers. Some of the new rules and forms have yet to be implemented but if they don't produce some savings, expect some heads to roll and some much heavier insurance regulation. Some of the changes require the Dept. of Insurance and the Illinois Workers Compensation Commission to adopt new rules, forms and procedures.

     Several prominent workers compensation lawyers will be giving seminars and webinars.  Some of the dates for certain changes in the new provisions are staggered. Governor Quinn signed the workers comp reform bill into law on June 28, 2011.

    While we don't have a crystal ball on the subject, the structure and outline of the actual major workers compensation reform package is set out in HB1698 which recently passed Illinois House approval on May 31, 2011.

Chicago Workers Compensation Attorney -- 6-08-11


2011 Illinois Workers Comp Reform Employer PPO Plans

The Illinois Workers Comp Reforms of 2011 offer major changes which are too many to list in a single post but I will try to cover the summary of major changes in future posts.

The two biggest changes under the 2011 Illinois Workers Comp Reforms are 1) reduction of the Medical Fee Schedule rates by 30% and 2) the introduction of employer PPO plans approved by the IL Dept of Insurance that attempt to limit the employer's liability for medical treatment.

A fellow workers comp attorney in Texas asked whether the Opt-Out provision for our new workers comp PPO plans was big enough to drive a truck through and I provided my answer in typical lawyerly fashion by  proceeding to qualify my answer.  The easy answer is the employer has "1st dibs" on medical treatment by adopting workers comp PPO plans.

The injured worker can only "Opt-Out" of the employer's PPO plan in writing and before exhausting their 2 choices of doctor in network. After using up 2 choices of physicians within the PPO network, the injured worker can only request a hearing at the Commission for a finding on the "adequacy of care" to see if they are allowed to go out of network.

the not so obvious medical treatment options following the new reforms are:

    (1) if the employer has no PPO provider, the employee retains the right to choose 2 doctors;

     (2) if the employer has an Illinois workers comp PPO plan and notifies the injured employee of the PPO plan in writing, soon after receiving the report of injury,  injury treatment options are limited to the PPO plan or;

     (3) if the employee declines the PPO and Opts-out  (in writing) before treating with the PPO plan, the worker automatically loses 1 choice of doctor and has only 1 choice of doctor left to go outside of network

     (4) if the employee "opts out" (in writing)  after initial treatment by a PPO plan doctor, they also have only 1 choice of doctor left to go outside of network;

      (5) if the employee stays in network and uses up both choices of doctor in network, they have no doctor choices left -- they can only go outside of network upon a hearing at the Commission and after a finding of "improper or inadequate" medical care.
All medical care for an injured Illinois worker is limited in some fashion by the introduction of  PPO plans in the new reforms.  Needless to say this is a huge boon to Illinois medical provider networks that qualify as PPO providers through the Illinois Department of  Insurance.

All workers that use up their 2 choices of doctor within the PPO plan (which I suspect will happen quite often)  are severely restricted as they have no rights outside of the PPO plan absent a hearing on the adequacy of care at the Commission.  I should say that injured workers can still pay out of pocket as an option at any time without expecting reimbursement but that is not going to happen all that often.

The rules for medical providers qualifying for the new PPO plans are not set out yet and the Commission has yet to develop forms for "Notice of PPO Plan" for employers to notify injured workers of the PPO plan nor are rules created yet to deal with hearings on adequacy of medical care as this package of major workers compensation reforms just unfolded on May 31, 2011 when the measures of HB1698 passed the Illinois House of Representatives to go to Governor Quinn for signature.

let me quote the relevant Opt-Out section for non-believers and nay sayers:

8a(4)(B)  " …the employee may choose in writing at any time to decline
the preferred provider program,.. which …would constitute one of the two choices
of medical providers to which the employee is entitled"

1) the opt out must be in writing;  and
2) even the act of  "opting out" uses up 1 choice of doctor, so the injured worker has only 1 choice of doctor left after opting out of the employer's workers comp PPO plan thereby limiting doctor shopping.

As I see it -- besides the 30 % reduction on the medical fee schedule for out of network providers, the introduction of  workers comp PPO plans is the biggest reform in decades and the biggest money saver for Illinois employers in the 2011 package.

All savvy employers will now sign up for PPO plans to get contract discount rates below the medical fee schedule and the injured worker loses 1 choice of doctor under the ILWC Act no matter what they do if the employer has a PPO plan.

The injured worker can certainly select 2 choices of doctor inside the PPO plan but never 2 choices outside the PPO plan.  If the injured worker opts out of the PPO plan it must be in writing -- so in my reading of the changes, a lot of injured workers who go to their own family doctor outside of the PPO plan without sending a written notice "opting out" to the employer as required will find themselves coming out of pocket.

As I see it, PPO plans are a double bonus for Illinois employers -- contract medical fee discounts and restrictions on doctor shopping by injured workers -- this will likely result in big savings for Illinois employers over the present options for medical care. The reforms restrict the rights of injured workers to select medical providers but that is a political and social compromise reached to attract new JOBS and make Illinois more "business friendly" going forward.  Non network medical providers and injured workers were the biggest losers this round but it could have been much worse for both.

Questions?? Call a Illinois workers compensation attorney for answers.  We can gaze at our crystal ball to look for answers on the implications of the new Illinois workers comp reforms and provide individual instruction.

Chicago workers compensation attorney -- 6-04-11


Review: Complete Guide to Medicare Secondary Payer Compliance & liability claims


The Complete Guide to Medicare Secondary Payer Compliance
, by Jennifer C. Jordan, Editor-in-Chief (Published by LexisNexis®)
To order by phone, call 1-800-223-1940
To order online, click here

Brand new out from LexisNexis® - This is a complete Guide Book for achieving MSP compliance in workers comp and liability settlements. This book combines a rare industry insider's review of the statutory changes as seen by MSA industry insider, Jen Jordan, General Counsel at MEDVAL LLC, and delivers current relevant case law with case summaries that review where we are at today. I recently received and reviewed parts of an early draft edition and thoroughly enjoyed the reading.

Jen Jordan has been involved in the trenches of structured settlements for workers comp and MSA (Medicare Set Aside) submissions and an active participant in following all the "Town Hall" conferences that CMS has been holding with industry participants regarding the new MSP claim reporting requirements for Workers Comp, Liability and non-group health plans.

I must admit that I have been a longtime reader of the MedVal Blog for updates on MSP developments and MSA requirements. I have personally tracked all the major MSA settlement companies and many of their websites for any MSA updates or information on MSP compliance over the past 8 years. I was always searching for any new consensus of opinion on MSA submissions and MSP compliance. My lengthy search had covered the numerous twists and turns in both the case law and the changes in CMS Memos dealing with workers comp. I also personally reviewed all the changes in the actual wording of the statutory language in the Federal Regulations. This Guide Book saves the reader from my long and somewhat painful search.

This new Guide Book on MSP Compliance and MSA submissions exceeds all of my research efforts to date and delivers a comprehensive beacon of light in an otherwise dark and murky lagoon of disjointed MSA/MSP written information. I have read many of the conflicting or modified answers in Memos issued by CMS since 2001 and read many of the changes in the statutory MSP language and reviewed multiple changes in the MSP claim reporting requirements that had left me and a lot of other people frankly scratching their heads.

Finally, someone delivers a clear, concise reading in this area, with some definitive answers for both lawyers and claims specialists and accurate reporting dealing with MSP compliance and MSA allocations with all of the necessary resources found in one place. This book is a "must read" for anyone responsible for MSP compliance and no, I am not being paid for this endorsement although I will disclose that I recently received a copy of the book for my work in reviewing and providing feedback on early outlines and case law summaries.

Along with a handful of other Illinois workers compensation attorneys, I have ardently followed and analyzed all the CMS Internal Memos and alerts from Medicare. I must admit that I have even used the "Ask Jen" feature on MedVal’s Blog to ask some rather tough questions on my concerns for large Illinois workers compensation settlements with rather large MSA structured settlements that were not exactly covered by any of the reported case law decisions nor answered by any of the CMS Memos. Thankfully, Jen Jordan had provided me with some very direct answers on my tough questions and I have been a faithful fan of the MedVal Blog by her and Ryan Roth ever since.

As everyone knows, CMS has been morphing the Liability and Workers Comp MSP claim reporting requirements that will take effect for carriers and self insureds as of January 1, 2011. This new Guide Book on MSP compliance couldn't be delivered anymore timely or anymore helpful.

And for all those out there that think MSA allocations have nothing to do with Liability settlements, think again. Why on earth would the government mandate the reporting of all liability claims involving Medicare beneficiaries all across the nation if there wasn't an intended purpose? Medicare intends on denying all future Medicare payments for any treatment related to injuries received that are the subject of a liability law suit unless there is an accurate and adequate consideration (read future medical allocation and funding) of “Medicare's interests” at the time of the settlement.

Liability lawyers from now on are going to have to shy away from the standard boiler plate language in a "General Release" and modify their settlement language to suit the circumstances where their client is a Medicare beneficiary or soon to be expected Medicare beneficiary. Jordan's chapter on Liability Settlements is a "must read" for every plaintiff and defense lawyer drafting releases with some practical tips on possible liability MSA applications and even some suggested modified "Release" language.

While liability settlements presently do not go through any of the MSA prior submission process established for workers comp, CMS totally intends on tracking all liability settlements to ensure repayment of their Medicare liens for "conditional" payments made and to prevent any double compensation where future medical monies have already been received in a law suit. The Philadelphia office for CMS has reportedly already hired someone to review MSA liability settlements. That alone should tell you something. In situations of an inadequate recovery due to limited insurance coverage or in situations of incomplete compensation for injuries due to liability issues, this book provides some very practical suggestions for post settlement hearings and findings by the Court as well as modified "Release" language.

Liability plaintiff's attorneys heretofore have had to make an assessment whether to even take a personal injury client's case if the Medicare "conditional" lien payments were expected to exceed the insurance coverage available because Medicare's lien repayments could in fact leave their client with nothing left for compensation for their injuries.

However, there may be some new light shed at the end of that dark tunnel with a recent decision reported by Jen Jordan on the LexisNexis Workers Compensation Blog. See her summary on the opinion in Bradley v. Sebelius recently decided out of Florida that was published on September 29, 2010. Jen's analysis of the Court's opinion is that it supports a position for "apportionment" in Medicare lien repayment cases that settle for less than full value of the claim and/or contain compensation for non-medical claims. Liability lawyers might very well want to read both the summary and the actual decision and continue to read Jen Jordan's further analysis on the LexisNexis Workers Compensation Blog as we wait for some final word on the situation.

Importantly, this new MSP book provides guidelines on accurate MSA submissions for workers comp settlements to prevent over funding of any MSA submissions. It is extremely important for insurance adjusters or lawyers to note and define injuries for which workers comp liability is accepted and state any future medical or body parts that are totally disputed (with the basis for the dispute documented of course) when submitting their MSA proposals and in drafting their settlements. Similar considerations also apply when making any future medical allocations for Medicare’s interests in liability settlements.

This brand new book from LexisNexis will help industry claims people and lawyers alike take control of their settlements by explaining how to:

• comply with MSP reporting requirements and avoid penalties
• avoid pitfalls and delays under CMS’ policies and procedures
• identify which cases to actually submit for CMS review
• achieve better CMS approval rates and avoid overly inflated MSAs
• defend less costly MSA allocations for future medical expenses
• avoid rejection of MSA proposals for inadequate drug information
• understand MSA evaluations and the options for funding MSAs
• and determine when MSAs should be used in liability settlements

That pretty much covers a lot of ground in one complete Guide Book. Twice a year updates are already anticipated as well as more current update coverage on both on the MedVal Blog and on the LexisNexis Workers Compensation Law Community powered by Larson’s.

Jen Jordan will personally be available at the upcoming National Workers Compensation Conference & Expo in Las Vegas, Nov. 10 thru 12th. For more information on the conference see here.

I want to congratulate both Jen Jordan and her editor, Robin Kobayashi, of LexisNexis for an outstanding job on delivering a thoroughly accurate presentation of MSP/MSA guideline information on what has been a constantly morphing and moving target.

Mistakes in this MSP/MSA area can literally cost tens of thousands of dollars and the book is moderately priced at just $179 dollars for the 2010 Edition. To order by phone, call 1-800-223-1940. To order online, click here

Chicago workers compensation attorney -- 11-01-10