Illinois Comp By The Numbers

May 2018

By Francis M. Brady

Outside influences can redirect the course of Illinois Workers’ Compensation Practice. Recent publications from two of them, the Workers’ Compensation Research Institute and the Illinois Legislature, have the potential to do just that.

WCRI, an independent, not-for-profit facility, located in Cambridge, Massachusetts, mines data from numerous sources, assesses it, and publishes various studies and reports. Its mission is not to advocate positions but, instead, to assist workers’ compensation policy makers and stakeholders in improving their systems.

To that end, WCRI last month published its 18th “Benchmarks for Illinois” reporting on the performance of the system in its various aspects. Adopting 3/31/17 as its data point, one measure evaluated “total cost per claim,” defined as the “sum of medical and indemnity payments, benefit delivery expense payments, and payments for vocational rehabilitation…” for claims with loss dates between 10/1/10 and 9/30/11 and also claims arising out of accidents from 10/1/13 to 9/30/14. In the first period, the average total cost was $62,037.00. Claims arising in the second had an average total cost of $50,719.00. For comparison, the figures in Iowa were $55,368.00/$50,412.00; Wisconsin, $41,445.00/$41,181.00; and, Indiana, $38,187.00/38,385.00.

Indemnity benefits, not medical expenses, were the largest component of total costs in Illinois, accounting for 50% of total payments.

While Illinois had higher defense counsel involvment per claim, payments to these lawyers were among the lowest of all the states assessed.

From 2011 to 2013, claim frequency per 100,000 workers in Illinois was 2,955. In Iowa, it was 4,326.00; 4,396.00 in Wisconsin; and, 3,946.00 in Indiana.

As of 2016, premium per $100.00 of payroll was $2.23 in Illinois, representing the 8th highest state counted. Still, that was an improvement from 2014 when Illinois ranked 7th at $2.35.

Data from the Illinois Workers’ Compensation Commission confirm that the number of cases filed at the Commission has been trending downwards. In 2016, 41,777 cases were filed, down from 46,689 in 2012.

So, Illinois, by the numbers, seems to be improving as a place for business. The issue, now, is how to accelerate the pace of reform. And that’s where our second change agent, the Illinois Legislature, comes in. There are a number of measures now pending in Spring- field, which if passed, will definitely impact Illinois workers’ compensation processes. Whether the impact will be beneficial to employers is open to question.

The Bill which appears to have priority is Senate Bill 2863. Sponsored by Senator Kwame Raoul, who, as well as serving as Senator, is running for the Office of State Attorney General, the measure introduces substantive changes. First it imposes new regulations regarding the rates insurance carriers use to charge premium. The proposed Bill gives the Director of the Department of Insurance broader power to invalidate proposed rates as excessive.

The Bill also seeks to codify various court decisions regarding compensability of injuries sustained in the course of travel and bring specificity to criteria to be used in determining whether a traveling employee is in the course of his employment.

Another feature of the Act allows for an employer to establish a safety program including return to work guidelines. The employer can ask that the Commission consider its program for certification and if the certification is awarded, the employer’s insurance carrier has to recalculate premiums, taking into account the certified program. In the case of a self-insured with a certified safety program, the annual fee charged to guarantee financial responsibility is reduced.

The proposed legislation, as a matter of law, characterizes shoulder injuries as loss of use of the arm and hip injuries as loss of use of the leg.

In what would appear to be a significant benefit to employers, credit for prior back injuries is afforded.

On a similar note, the measure allows an employer paying an award for benefits arising from a repetitive or cumulative injury to seek contribution from the petitioner’s prior employers. The language of this section contemplates awards and thus seemingly excludes credit towards benefits paid pursuant to lump sum settlements.

The measure also codifies recent case law reflecting that an AMA Rating is not required to award benefits. But, if the report exists and is admitted into evidence, it must be considered by the Commission along with the other statutory factors like the worker’s age, occupation, and future earning capacity. Also, for the first time, the Bill provides that an IME must be taken into account relative to the extent of petitioner’s disability.

The Bill orders the Commission to promulgate rules establishing an evidence-based drug formulary regarding prescriptions in workers’ compensation cases. The Commission is also tasked with clarifying Fee Scheduling of care rendered by ambulatory surgical centers.

On a less encouraging note for employers, the Bill limits, to a degree, the employer’s ability to get at medical records regarding petitioner.

The Bill obligates an employer to comply with the Electronic Claims Acceptance and Response Process regarding satisfying bills sent by caregivers.

Finally, it declares that a “delay in payment of 14 days or more from the employer’s receipt of all appropriate records and data…needed to make a determination” regarding authorization of care constitutes a rebuttable presumption of undue delay. One way to rebut it is to seek Utilization Review.

SB 2863 was passed by the Senate last month basically on a party line vote. It passed out of the House Labor and Commerce Committee on 5/16/18 and now sits on Second Reading. Since a similar, perhaps identical, measure was passed by both Houses last year, it may well be that SB 2863, too, will be approved. The Governor vetoed last year’s version and is expected to do the same to this year’s measure.

Another measure pending in the Legislature, HR 4595, does not amend the Workers’ Compensation Act itself but will, if enacted, nevertheless, have a significant impact. The Bill proposes to do nothing less than establish a state run workers’ compensation insurance company. Initial funding for the company would come from a $10 million dollar loan from the Department of Insurance. This measure was passed by the House on April 26, 2018 but now sits in the Senate Judiciary Committee awaiting further action.