Reform: An Up to the Minute Primer (Redux) Part II

December 2015

By Francis M. Brady

The following concludes the Firm's review of all "reform" measures currently under consideration in the Illinois General Assembly.[1]

Medical

In 2011, reimbursement of certain medical charges under the existing Fee Schedule was reduced 30%. Even with that reduction, Illinois was, according to the Oregon Workers' Compensation Premium Rate Ranking Summary, still the 7th costliest state concerning workers' compensation. The Senate Republicans added language to SB0994 effectuating limitations of an additional 30% relative to reimbursement to care providers. The cuts, however, are not across the board. They impact specific services as follows: ambulatory surgical treatment centers; anesthesia services; hospital inpatient services, both standard and trauma; hospital outpatient services; and, professional services. No reductions would occur to reimbursement of emergency room services; evaluation, management, or physical medicine services.

Nature and Extent

The business community charges that the reforms of 2011, including the implementation of AMA Standards regarding impairment, simply nibble "around the edges of our tremendous cost problem here in Illinois" (Business Insurance, March 1, 2015). To rectify this imbalance, the language of the Senate Republicans in Amendment 1, SB0994 mandates that the Commission consider independent medical examinations along with treating medical records and, as well, can consider AMA Guidelines as the sole determinant of disability (820 ILCS 305/8.1(b)). To further reduce nature and extent exposures, language proposed by Senate Republicans credits an employer for past whole man recoveries secured by petitioner.

The Senate Democrats do not allow the Commission to determine impairment based solely on an AMA report. To the contrary, the Senate Democrats eliminate the requirement that an AMA report need even be introduced. Neither do they provide for 8(d)(2) credits. They do acknowledge, however, that Section 12 examinations shall be specifically considered as to the question of disability.

Procedural

The Senate Democrats in Amendment 1 to SB0162 eliminate the current requirement that an Arbitrator sit at one location for only two years. Instead, their proposal allows discretion to the Chairperson of the Commission to assign and reassign Arbitrators as needed (820 ILCS 305/14(k)(2)). The legislation proposed by the Senate Republicans basically mirrors this language.

Senate Democrats also propose to establish a department within the Illinois Workers' Compensation Commission tasked with developing a plan of rendering assistance to all regions of the state. Personnel in the department (ombudsmen) are tasked with helping injured employees understand their rights, file claims, and obtain documentation (for example, from medical providers as well as their employers). The ombudsmen, per the Senate Democrats, are also to render assistance to employers and medical providers.

Moreover, the ombudsmen are to answer questions about fraud; counsel injured employees regarding local, state, and federal financial assistance, rehabilitation and work placement programs; and "perform other duties as required by the Chairman" (820 ILCS 305/14.2). While discharging these extensive obligations, the ombudsmen are not to "appear or intervene...before the Commission on behalf..." of any stakeholder.

Finally, the Senate Democrats propose a sort of Commission within the Commission entitled "Workers' Compensation Edit, Alignment, and Reform Commission" (or WEAR for short). The WEAR is charged with developing a recodification of the Workers' Compensation Act ensuring its user friendliness. It is to streamline the Act, making it more understandable, and replacing outdated and obsolete language. Membership of the WEAR Commission shall be comprised of two senators and two representatives, two each from the majority and minority parties, plus four Petitioners' lawyers and four Respondents' lawyers (to be appointed by the President and Minority Leader of the Senate and the Speaker and Minority Leader of the House). The WEAR Commission is to be headed by the Chairperson of the Illinois Workers' Compensation Commission and no member of the WEAR Commission shall be compensated for the service. While the Senate Republicans do not consider either the ombudsmen program or the WEAR Commission, their counterparts in the House do incorporate them in HB4248.

The Senate Democrats provide for other "system improvements" including an updated computer system with the capacity to facilitate electronic filing; numerous data fields not currently available (or in use) to generate various reports, including the total number of decisions by Arbitrators; the total number of awards by injury type; penalties issued and their recipients; cases decided by the individual Commission panel; and expanding upon the user's ability to electronically search for documentation like lump sum settlement contracts. Just as with the ombudsmen program and the WEAR Commission, the House Republicans have adopted these same improvement measures in HB4248.

In HB1287 Amendment 4, the House Democrats direct that workers' compensation premiums "shall not be excessive" meaning the premium shall not "produce a long run profit that is unreasonably high." The proposed legislation goes on to give an insured the right to ask the Director of the Department of Insurance to review its premiums and mandates that the carrier "shall provide all information requested by the Director...necessary to assist in review of (the) premium(s)..." Employers who formulate a workers' compensation safety program or return to work program may have the Workers' Compensation Commission certify the programs to the Department of Insurance, thereafter which shall order the employer's workers' compensation carrier to recalculate its workers' compensation premiums to take into account the certified program(s).

Under Amendment 7 to HB1287, the House Democrats went on to address workers' compensation insurance premiums. A Task Force is created and charged with studying "the National Council on Compensation Insurance's recommendation for workers' compensation premium rates and the extent to which Illinois employers' actual premiums reflect those recommended rates." The Task Force is to be made up of eight legislative members divided equally between the Republicans and the Democrats in the House and Senate and four members appointed by the Governor, each representing a different stakeholder (i.e., retailers, manufacturers, laborer interests, and the injured workers).

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[1]HB1287 (Amendments 4, 5, 6, 7, and 8) filed 6/3/15 by Representative Jay Hoffman; HB4248, filed 7/8/15 by Representative Jim Durkin; SB0994 (Amendment 1) filed 5/22/15 by Senator Christine Radogno; and, SB0162 (Amendment 1) filed by Senator Kwame Raoul on 8/4/15.