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Newsletter of Garofalo, Schreiber, Hart & Storm, Chartered                        LAW UPDATE - SUMMER, 2011From the Desk o...
                                                               DISCLAIMER	  The	   following	   contains	   materials	   p...
TABLE OF CONTENTSPAGE   TOPICS5      A VENDOR FOR STATE WORKERS’ COMPENSATION       PROGRAM – effective June 28, 20115    ...
TREATMENT DETERMINED BY THE COMMISSION TO     BE EXCESSIVE OR UNNECESSARY – effective June 28,     201141   TEMPORARY PART...
A VENDOR FOR STATE WORKERS’ COMPENSATION PROGRAMThis following provisions change The Department of Central ManagementServi...
Program Advisory Board to review, assess, and provide recommendations toimprove the State workers compensation program and...
in a professional character, necessary to enable him or her professionally toserve the patient, except…upon the issuance o...
employment. Accordingly, a lesser standard of proof appears to have been requiredin repetitive trauma cases than in cases ...
may accept an uncompensated appointment to a governmental committee,commission or other position that is concerned with is...
information regarding the identity of any client or borrowing companylisted on a workers’ compensation policy as an additi...
source of all medical and related treatment provided under this Act;           (3) The use of a limited list of impartial ...
(6) The method by which mediators or arbitrators are to be selected.      (e) Filing. A copy of the agreement and a statem...
(2) The number of occurrences of work-related injuries or diseases;           (3) The breakdown within the ADR program of ...
that is binding on the parties. In general, alternative dispute resolution uses privateArbitrators hired by the parties in...
MEDICAL CHOICESSection 8(a):Every hospital, physician or surgeon or other person rendering treatment orservices in accorda...
may choose in writing at any time to decline the preferred provider program, inwhich case that would constitute one of the...
“If, after the accidental injury has been sustained, the employee as a resultthereof becomes partially incapacitated from ...
settlement. This is due in large part to petitioner’s desire for a lump sumsettlement and the insurance carrier’s desire t...
amendatory Act of the 94th General Assembly but before February 1, 2006.205 weeks if thee accidental injury occurs on or a...
the hand and as high as 25% loss of use if it were the dominant hand. Inthese types of claims, the recent changes should r...
PREFERRED PROVIDER PROGRAMS820 ILCS 305/8.1aSec. 8.1a. Preferred Provider Programs. Starting on the effective date of this...
(b) The administrator of any preferred provider program under this Act thatuses economic evaluation shall file with the Di...
(1) When the injured employee notifies the employer of the injury orfiles a claim for workers compensation with the employ...
employee shall be considered the “Beneficiary”).Beyond being subject to the approval of the Illinois Department ofInsuranc...
3. All medical, surgical and hospital services arising from employeessecond choice and within the “chain of referral” from...
in Illinois workers compensation law. The employees, whether (union)organized or not, will not have any input regarding th...
a written order.SummaryThis is a substantive change in the law. The legislature has pronouncedthat the effective date is S...
b.     Step 2 is analysis of findings, including diagnoses, MMI                   status, current abilities for activities...
upon by the Illinois Workers Compensation Commission in            determining PPD. It refers to physicians “licensed to p...
•    Focus on the portions of the history pertinent to        the impairment rating.The physical examination should be per...
with the final report. This will ensure that the process of impairmentevaluation according to the Guides is transparent an...
consistent with the provisions of this paragraph. Providers of out-of-state procedures,treatments, services, products, or ...
(viii) Sangamon and Menard Counties;               (ix) McLean County;               (x) Lake County;               (xi) M...
Act and rendered or to be rendered on or after September 1, 2011, the            maximum allowable payment shall be 70% of...
Compensation Act. Therefore, for the majority of out of state medicaltreatment, the other state’s Medical Fee Schedule wil...
reimbursement shall occur at 53.2% of charges and fees as determined bythe Commission in a manner consistent with the prov...
denial and/or describing any additional necessary data elements requiredto adjudicate the bill. This written notice is to ...
It has been estimated that the amendments will save Illinois businesses acombined 500 million to 700 million dollars annua...
the signing date. Clearly this does not impact the rights of either of the customaryparties to the litigation, but it does...
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
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Transcript of "Legislation summary 2001 amendments to illinois workers' compensation act"

  1. 1. Newsletter of Garofalo, Schreiber, Hart & Storm, Chartered LAW UPDATE - SUMMER, 2011From the Desk of Joe GarofaloCulminating months of hearings, consideration of numerous competing bills, andprotracted negotiations among representatives of business, labor, the medicalcommunity and ITLA, House Bill 1698 passed both houses of the Illinois GeneralAssembly on May 31, 2011. The bill marks a major reform of The IllinoisWorkersʼ Compensation Act. Anticipated annual savings to businesses resultingfrom the changes are estimated at $500 to $700 million.Governor Quinn signed the bill into law on June 28, 2011. The law becameeffective the day it is signed into law unless specific provisions within the lawdesignated different effective dates. These will be discussed in this summary.It is further necessary to understand those aspects of the law that are proceduralchanges as opposed to substantive changes. With the amendments that do nothave specific effective dates assigned to them, the changes that are proceduralapply not only to future claims, but also to pending claims. The changes that aresubstantive only apply to claims occurring on or after June 28, 2011. Generallyspeaking, and based upon prior case law, substantive changes are those thatlimit or expand the right of recovery of a party. Procedural changes are thosethat impact the manner in which the parties pursue or defend their respectiverights. For example, the changes regarding wage differential are substantive, butthis is also an example of a change that has an effective date (9/1/2011)assigned to it. An example of a procedural change, applicable to pending as wellas future claims, would be the fraud unitʼs power to subpoena records. Anotherexample of a change that is likely procedural is the Alternative DisputeResolution provision pertaining to two unions to be selected. Note that becausethe benefits under the provision are not to be changed by requirement of thestatute the recovery rights of the parties are neither limited nor expanded.We have outlined the major changes made in these Amendments. In eachportion we have recited the statutory language for the new provisions orunderlined the new provisions in the context of the existing statute. A summaryand comment follows each new change. We hope you find this to be helpful inunderstanding these changes and welcome your questions and comments. Joe Garofalo
  2. 2.   DISCLAIMER  The   following   contains   materials   pertaining   to   workers’   compensation   law.     Editorial  inquiries   should   be   directed   to   Joseph   A.   Garofalo   at   Garofalo,   Schreiber,   Hart   &   Storm,  Chartered.     This   information   does   not   provide   solutions   to   individual   problems.     Please  consult   an   attorney   concerning   your   particular   situation.     If   you   do   not   want   to   receive  similar  information  in  the  future,  please  advise  and  you  will  be  removed  from  our  mailing  list.        Under  professional  rules,  these  materials  should  be  regarded  as  advertising  materials.    ©2011.    All  rights  reserved.   Garofalo,  Schreiber,  Hart  &  Storm,  Chartered   55  W.  Wacker  Drive  –  10th  Floor   Chicago,  Illinois  60606   Telephone:    (312)  670-­‐2000   Facsimile:    (312)  419-­‐1336   www.GSHSLAW.COM
  3. 3. TABLE OF CONTENTSPAGE TOPICS5 A VENDOR FOR STATE WORKERS’ COMPENSATION PROGRAM – effective June 28, 20115 STATE WORKERS’ COMPENSATION PROGRAM ADVISORY BOARD CREATED – effective June 28, 20116 FRAUD UNIT ALLOWED TO ISSUE SUBPOENAS FOR MEDICAL RECORDS – effective June 28, 20117 BURDEN OF PROOF – effective June 28, 20118 STANDARDS OF CONDUCT FOR ABITRATORS AND COMMISSIONERS – effective June 28, 2011 9 EMPLOYEE LEASING COMPANIES REQUIRED TO DISCLOSE INFORMATION – effective June 28, 201110 ALTERNATIVE DISPUTE RESOLUTION SYSTEM CREATED – effective June 28, 201114 CITATIONS OF EMPLOYERS FOR NON-COMPLIANCE – effective June 28, 201115 MEDICAL CHOICES (See also Preferred Provider Programs at page 21) - effective June 28, 2011.17 WAGE LOSS – effective September 1, 201119 SPECIFIC LOSS CLAIMS FOR CARPAL TUNNEL SYNDROME – effective June 28, 201121 PREFERRED PROVIDER PROGRAMS – effective June 28, 201126 EVALUATING PERMANENT DISABILITY – effective September 1, 201131 FEE SCHEDULE – effective September 1, 201139 MEDICAL PROVIDERS PROHIBITED FROM COLLECTING AGAINST CLAIMANTS FOR MEDICAL SERVICES FOR
  4. 4. TREATMENT DETERMINED BY THE COMMISSION TO BE EXCESSIVE OR UNNECESSARY – effective June 28, 201141 TEMPORARY PARTIAL DISABILITY – effective June 28, 201142 UTILIZATION REVIEW PROGRAMS – effective September 1, 201145 INTOXICATION DEFENSE – effective September 1, 201149 TRAINING PROGRAMS FOR COMMISSIONERS – effective June 28, 201150 WORKERS’ COMPENSATION ADVISORY BOARD – effective June 28, 201151 AMENDMENTS PERTAINING TO ARBITRATORS – effective June 28, 201155 GIFT BAN – effective June 28, 201157 CLAIMS BY COMMISSION EMPLOYEES – effective June 28, 201158 UNLAWFUL TO PRESENT FALSE MEDICAL BILL FOR PAYMENT – effective June 28, 201162 RECALCUATION OF PREMIUM RATES – effective June 28, 201162 INSURANCE OVERSIGHT – effective April 1, 2012
  5. 5. A VENDOR FOR STATE WORKERS’ COMPENSATION PROGRAMThis following provisions change The Department of Central ManagementServices Law of the Civil Administrative Code of Illinois:20 ILCS 405/405-105(10a) If the Director determines it would be in the best interests of the State andits employees, prepare and implement a plan providing for: (i) the purchase ofworkers compensation insurance for workers compensation liability; (ii) third-party administration of self-insurance, in whole or in part, for workerscompensation liability; or (iii) a combination of purchased insurance and self-insurance for workers compensation liability, including reinsurance or stop-lossinsurance. Any contract for insurance or third-party administration shall be onterms consistent with State policy; awarded in compliance with the IllinoisProcurement Code; and based on, but not limited to, the following criteria:administrative cost, service capabilities of the carrier or other contractor andpremiums, fees, or charges. By April 1 of each year, the Director must report andprovide information to the State Workers Compensation Program Advisory Boardconcerning the status of the State workers compensation program for the nextfiscal year. Information includes, but is not limited to, documents, reports ofnegotiations, bid invitations, requests for proposals, specifications, copies ofproposed and final contracts or agreements, and any other materials concerningcontracts or agreements for the program. By the first of each month thereafter,the Director must provide updated, and any new, information to the StateWorkers Compensation Program Advisory Board until the State workerscompensation program for the next fiscal year is determined.SummaryWe consider this change to be procedural and effective immediately. Thisprovides that the Director can purchase workers’ compensation insuranceand/or secure the services of a third-party administrator to administer theworkers’ compensation program for the State of Illinois and its employees.The Director of Insurance is required to provide certain information to theState Workers’ Compensation Program Advisory Board regarding thestatus of the State workers’ compensation program.STATE WORKERS’ COMPENSATION PROGRAM ADVISORY BOARDCREATED(e) There is hereby created within the Department of Central ManagementServices an advisory body to be known as the State Workers Compensation
  6. 6. Program Advisory Board to review, assess, and provide recommendations toimprove the State workers compensation program and to ensure that the Statemanages the program in the interests of injured workers and taxpayers. TheGovernor shall appoint one person to the Board, who shall serve as theChairperson. The Speaker of the House of Representatives, the Minority Leaderof the House of Representatives, the President of the Senate, and the MinorityLeader of the Senate shall each appoint one person to the Board. Each memberinitially appointed to the Board shall serve a term ending December 31, 2013,and each Board member appointed thereafter shall serve a 3-year term. A Boardmember shall continue to serve on the Board until his or her successor isappointed. In addition, the Director of the Department of Central ManagementServices, the Attorney General, the Director of the Department of Insurance, theSecretary of the Department of Transportation, the Director of the Department ofCorrections, the Secretary of the Department of Human Services, the Director ofthe Department of Revenue, and the Chairman of the Illinois WorkersCompensation Commission, or their designees, shall serve as ex officio, non-voting members of the Board. Members of the Board shall not receivecompensation but shall be reimbursed from the Workers CompensationRevolving Fund for reasonable expenses incurred in the necessary performanceof their duties, and the Department of Central Management Services shallprovide administrative support to the Board. The Board shall meet at least 3times per year or more often if the Board deems it necessary or proper. BySeptember 30, 2011, the Board shall issue a written report, to be delivered to theGovernor, the Director of the Department of Central Management Services, andthe General Assembly, with a recommended set of best practices for the Stateworkers compensation program. By July 1 of each year thereafter, the Boardshall issue a written report, to be delivered to those same persons or entities,with recommendations on how to improve upon such practices.SummaryThis is a procedural change and effective immediately. This creates anAdvisory Board to review, assess and provide recommendations toimprove the State workers’ compensation program. The members who willserve on the Board will be political appointees—with one memberappointed by the Governor whom will be the Chairperson and the othermembers appointed by the Speaker of the House of Representatives, theMinority Leader of the House of Representatives, the President of theSenate, and the Minority Leader of the Senate.FRAUD UNIT ALLOWED TO ISSUE SUBPOENAS FOR MEDICAL RECORDSThe following is a change to the Code of Civil Procedure:Sec. 8-802. Physician and patient. No physician or surgeon shall be permittedto disclose any information he or she may have acquired in attending any patient
  7. 7. in a professional character, necessary to enable him or her professionally toserve the patient, except…upon the issuance of a subpoena pursuant to Section25.5 of the Workers’ Compensation Act.SummaryWe consider this change to be procedural and effective immediately. As aprocedural change it would apply to currently pending investigations aswell as those occurring after June 28, 2011. This allows the fraud and non-compliance unit of the Illinois Workers Compensation Commission tosubpoena medical records as part of their investigation and requiresphysicians to release the subpoenaed medical records.The following are changes to the Illinois Workers Compensation Act:BURDEN OF PROOFSection 1(d)To obtain compensation under this Act, an employee bears the burden of showing, by apreponderance of the evidence, that he or she has sustained accidental injuries arising outof and in the course of the employment.SUMMARYThis amendment is effective June 28, 2011. To the extent that this amounts to achange in the law we consider it procedural and we intend to argue this point in allpending cases. By a cursory reading of this amendment, it appears that thelegislature has simply restated the previously well-established standard a claimantalways needed to achieve in order to prove a compensable accident arising out ofand in the course of his employment. However, while codifying this well establishedstandard of proof, we believe that a strong argument now can be made that thelegislature also changed the standard of roof required in repetitive trauma cases.This amendment addresses the standard of proof for proving all “accidental injuriesarising out of and in the course of the employment”. This includes accidents onspecific dates as well as injuries that “manifest themselves” as in cases broughtunder a theory of repetitive trauma. For repetitive trauma cases, implicit in afinding of “manifestation” is that the injury is causally related to the work activitysince the “manifestation” is said to occur when it becomes apparent to a reasonableperson that there exists an injury and it is causally related to the work activity. Inrepetitive trauma cases brought before this amendment it was necessary for aclaimant to show only that the work activity “could or might have been a causativefactor” in order to successful carry claimant’s burden of proof on the issue ofcausation. Once accomplished, a finding of “manifestation” occurred and thus theclaimant successfully proved an accident arising out of and in the course of the
  8. 8. employment. Accordingly, a lesser standard of proof appears to have been requiredin repetitive trauma cases than in cases where a sudden definable breakdownoccurred on a specific date, where a preponderance of the evidence was required toprove accident in such cases.Now with this amendment, since it is necessary for a claimant to prove an accidentarising out of and in the course of employment by a preponderance of the evidence,a claimant in a repetitive trauma case will be required to prove causation by apreponderance of the evidence or otherwise he would be unable to carry his burdenof proof on the issue of accident by a preponderance of the evidence. Now if aclaimant in a repetitive trauma case is able to prove only that the work activitycould or might have been a causative factor in causing an injury, his claim shouldfail since the burden of proof by a preponderance of the evidence on the issue ofaccident will not have been achieved.Based upon our analysis of this new amendment, we believe that a claimant’sburden of proof in repetitive trauma cases has been raised from the heretoforeminimal burden to prove that the work activity could or might have been acausative factor in causing an injury to one now requiring that the claimant provecausation by a preponderance of the evidence in order to establish a compensableaccident arising out of and in the course of the employment.STANDARDS OF CONDUCT FOR ARBITRATORS AND COMMISSIONERSSec. 1.1. Standards of conduct.(a) Commissioners and arbitrators shall dispose of all Workers Compensationmatters promptly, officially and fairly, without bias or prejudice. Commissionersand arbitrators shall be faithful to the law and maintain professional competencein it. They shall be unswayed by partisan interests, public clamor, or fear ofcriticism. Commissioners and arbitrators shall take appropriate action or initiateappropriate disciplinary measures against a Commissioner, arbitrator, lawyer, orothers for unprofessional conduct of which the Commissioner or arbitrator maybecome aware. (b) Except as otherwise provided in this Act, the Canons of theCode of Judicial Conduct as adopted by the Supreme Court of Illinois govern thehearing and non-hearing conduct of members of the Commission and arbitratorsunder this Act. The Commission may set additional rules and standards, not lessstringent than those rules and standards established by the Code of JudicialConduct, for the conduct of arbitrators. (c) The following provisions of the Codeof Judicial Conduct do not apply under this Section: (1) Canon 3(B), relating toadministrative responsibilities of Judges. (2) Canon 6(C), relating to annual filingsof economic interests. Instead of filing declarations of economic interests with theClerk of the Illinois Supreme Court under Illinois Supreme Court Rule 68,members of the Commission and arbitrators shall make filings substantiallysimilar to those required by Rule 68 with the Chairman, and such filings shall bemade available for examination by the public. (d) An arbitrator or a Commissioner
  9. 9. may accept an uncompensated appointment to a governmental committee,commission or other position that is concerned with issues of policy on matterswhich may come before the arbitrator or Commissioner if such appointmentneither affects his or her independent professional judgment nor the conduct ofhis or her duties. (e) Decisions of an arbitrator or a Commissioner shall be basedexclusively on evidence in the record of the proceeding and material that hasbeen officially noticed. Any findings of fact made by the arbitrator based oninquiries, investigations, examinations, or inspections undertaken by thearbitrator shall be entered into the record of the proceeding. (f) Nothing in thisSection shall prohibit an arbitrator from holding a pre-trial conference inaccordance with the rules of the Commission.SummaryThis amendment is procedural and effective June 28, 2011. Thisestablishes that Arbitrators and Commissioners are required by statute toconduct themselves and treat the parties fairly and without bias orprejudice. They are required to follow a code of judicial and professionalconduct. Their rulings and decision shall be based solely on the evidenceand record. They are also allowed to conduct a pre-trial conference. Thismight seem like a small provision, but this is important because it firmlystates and establishes that the Arbitrators and Commissioners mustconduct themselves with appropriate judicial demeanor.EMPLOYEE LEASING COMPANIES REQUIRED TO DISCLOSEINFORMATION(a-2) Every Employee Leasing Company (ELC), as defined in Section 15 of theEmployee Leasing Company Act, shall at a minimum provide the followinginformation to the Commission or any entity designated by the Commissionregarding each workers compensation insurance policy issued to the ELC: (1)Any client company of the ELC listed as an additional named insured. (2) Anyinformational schedule attached to the master policy that identifies any individualclient companys name, FEIN, and job location. (3) Any certificate of insurancecoverage document issued to a client company specifying its rights andobligations under the master policy that establishes both the identity and statusof the client, as well as the dates of inception and termination of coverage, ifapplicable.SummaryThis change is procedural and is effective immediately. The legislativeintent clearly is for this information to be provided by existing companiesregarding existing obligations. Leasing or loaning companies are requiredto provide the Illinois Workers Compensation Commission with
  10. 10. information regarding the identity of any client or borrowing companylisted on a workers’ compensation policy as an additional named insured;information about the client or borrowing company listed on a masterinsurance policy; and specifics regarding any rights and obligations,identification information, and coverage information listed on anycertificate of coverage issued to a client company.ALTERNATIVE DISPUTE RESOLUTION SYSTEM CREATED(820 ILCS 305 / 4b new)Sec. 4b. Collective Bargaining Pilot Program. (a) The Director of the Department of Labor shall adopt a selection process todesignate 2 labor organizations to participate in the collective bargaining processprovided for in this Section. (a-5) For purposes of this Section, the term "construction employer" means anyperson or legal entity or group of persons or legal entities engaging in or planning toengage in any constructing, altering, reconstructing, repairing, rehabilitating, refinishing,refurbishing, remodeling, remediating, renovating, custom fabricating, maintaining,landscaping, improving, wrecking, painting, decorating, demolishing, and adding to orsubtracting from any building, structure, airport facility, highway, roadway, street, alley,bridge, sewer, drain, ditch, sewage disposal plant, water works, parking facility, railroad,excavation or other project, structure, development, real property or improvement, or todo any part thereof, whether or not the performance of the work herein describedinvolves the addition to, or fabrication into, any project, structure, development, realproperty or improvement herein described, and shall also include any moving ofconstruction-related materials on the job site or to or from the job site. For purposes of this Section, "labor organization" means the exclusiverepresentative of a construction employers employees recognized or certified pursuant tothe National Labor Relations Act. (b) Upon appropriate filing, the Commission and the courts of this State shallrecognize as valid and binding any provision in a collective bargaining agreementbetween any construction employer or group of construction employers and a labororganization, which contains certain obligations and procedures relating to workerscompensation. This agreement must be limited to, but need not include, all of thefollowing: (1) An alternative dispute resolution ("ADR") system to supplement, modifyor replace the procedural or dispute resolution provisions of this Act. The system mayinclude mediation, arbitration, or other dispute resolution proceedings, the results ofwhich shall be final and binding upon the parties; (2) An agreed list of medical treatment providers that may be the exclusive
  11. 11. source of all medical and related treatment provided under this Act; (3) The use of a limited list of impartial physicians to conduct independentmedical examinations; (4) The creation of a light duty, modified job, or return to work program; (5) The use of a limited list of individuals and companies for theestablishment of vocational rehabilitation or retraining programs that may be theexclusive source of rehabilitation and retraining services provided under this Act; or (6) The establishment of joint labor management safety committees andsafety procedures. (c) Void agreements. Nothing in this Section shall be construed to authorize anyprovision in a collective bargaining agreement that diminishes or increases a constructionemployers entitlements under this Act or an employees entitlement to benefits asotherwise set forth in this Act. For the purposes of this Section, the procedural rights anddispute resolution agreements under subparagraphs (1) through (6) of subsection (b) ofthis Section are not agreements which diminish or increase a construction employersentitlements under this Act or an employees entitlement to benefits under this Act. Anyagreement that diminishes or increases a construction employers entitlements under thisAct or an employees entitlement to benefits as set forth in this Act is null and void.Nothing in this Section shall be construed as creating a mandatory subject of bargaining. (d) Form of agreement. The agreement reached herein shall demonstrate that: (1) The construction employer or group of construction employers and therecognized or certified exclusive bargaining representative have entered into a bindingcollective bargaining agreement adopting the ADR plan for a period of no less than 2years; (2) Contractual agreements have been reached with the constructionemployers workers compensation carrier, group self-insurance fund, and any excesscarriers relating to the ADR plan; (3) Procedures have been established by which claims for benefits byemployees will be lodged, administered, and decided while affording procedural dueprocess; (4) The plan has designated forms upon which claims for benefits shall bemade; (5) The system and means by which the construction employers obligation tofurnish medical services and vocational rehabilitation and retraining benefits shall befulfilled and provider selected;
  12. 12. (6) The method by which mediators or arbitrators are to be selected. (e) Filing. A copy of the agreement and a statement identifying the parties to theagreement shall be filed with the Commission. Within 21 days of receipt of an agreement,the Chairman shall review the agreement for compliance with this Section and notify theparties of its acceptance or notify the parties of any additional information required orany recommended modification that would bring the agreement into compliance. If noadditional information or modification is required, the agreement shall be valid andbinding from the time the parties receive acceptance of the agreement from the Chairman.Upon receipt of any requested information or modification, the Chairman shall notify theparties within 21 days whether the agreement is in compliance with this Section. Allrejections made by the Chairman under this subsection shall be subject to review by thecourts of this State, said review to be taken in the same manner and within the same timeas provided by Section 19 of this Act for review of awards and decisions of theCommission. Upon the review, the Circuit Court shall have power to review all questionsof fact as well as of law. (f) Notice to insurance carrier. If the construction employer is insured under thisAct, it shall provide notice to and obtain consent from its insurance carrier, in the mannerprovided in the insurance contract, of its intent to enter into an agreement as provided inthis Section with its employees. (g) Employees claims for workers compensation benefits. (1) Claims for benefits shall be filed with the ADR plan administrator withinthose periods of limitation prescribed by this Act. Within 10 days of the filing of a claim,the ADR plan administrator shall serve a copy of the claim application upon theCommission, which shall maintain records of all ADR claims and resolutions. (2) Settlements of claims presented to the ADR plan administrator shall beevidenced by a settlement agreement. All such settlements shall be filed with the ADRplan administrator, who within 10 days shall forward a copy to the Commission forrecording. (3) Upon assignment of claims, unless settled, mediators and arbitrators shallrender final orders containing essential findings of fact, rulings of law and referring toother matters as pertinent to the questions at issue. The ADR plan administrator shallmaintain a record of the proceedings. (h) Reporting requirements. Annually, each ADR plan administrator shall submit areport to the Commission containing the following information: (1) The number of employees within the ADR program;
  13. 13. (2) The number of occurrences of work-related injuries or diseases; (3) The breakdown within the ADR program of injuries and diseases treated; (4) The total amount of disability benefits paid within the ADR program; (5) The total medical treatment cost paid within the ADR program; (6) The number of claims filed within the ADR program; and (7) The disposition of all claims.SummaryBecause this amendment is dependent on the collective bargaining agreements of theselected unions, and assuming each CBA contemplates both future and pendingclaims, this change can be considered procedural. It is effective June 28, 2011. Inaddition, the change specifically states (para. c) that nothing in this Sectiondiminishes or increases rights or benefits to which the parties are otherwise entitledunder the current Act. New Section 4b makes no immediate change in the day-to-day operations of the Illinois Workers Compensation Commission; but it doesintroduce concepts that depart from how the workers’ compensation program hasbeen administered for generations.The new section does not apply to everyone. It is only an invitation to several Illinoisconstruction-industry labor unions to join with their respective constructionemployers in designing an experimental program to manage work-related injuries,and possibly even to adjudicate them. The Illinois Secretary of Labor will identifytwo collective bargaining units to submit proposals.Such experimental programs could continue to utilize the administrative apparatusof the Illinois Workers Compensation Commission, but are allowed to “streamline”it with any of the following: 1. 1. An exclusive panel of medical treatment providers, 2. 2. An exclusive panel of doctors to perform Independent medical evaluations, 3. 3. An exclusive return to work program, 4. 4. An excusive panel rehabilitation service providers, or 5. 5. Joint safety committees or procedures.The experiment may go much further than just these five streamlining measures. Alabor management plan may abandon the Illinois Workers CompensationCommission entirely and substitute a private alternative dispute resolution system
  14. 14. that is binding on the parties. In general, alternative dispute resolution uses privateArbitrators hired by the parties in place of public employee Arbitrators andCommissioners assigned by the government. “Privatization”, however, is not unlimited since the new Section 4b forbids anylabor-management plan from increasing or decreasing the employer’s or employee’sexisting rights and responsibilities under the Workers’ Compensation Act. Webelieve that the General Assembly intended that the substance of the Workers’Compensation Act will still apply, but the procedures under it may change and thatit may be administered privately rather than publicly. Said another way, the newsection addresses the how, not the what.It strikes us as ironic that the level of dissatisfaction with the current system hasreached a point where an “alternative” is being explored. After all, workerscompensation was the original “alternative dispute resolution”, born nearly 100years ago out of similar dissatisfaction with the legal system that existed at the time.Section 4(d)CITATIONS OF EMPLOYERS FOR NON-COMPLIANCEAn investigator with the Illinois Workers Compensation Commission InsuranceCompliance Division may issue a citation to any employer that is not in compliance withits obligation to have workers compensation insurance under this Act. The amount of thefine shall be based on the period of time the employer was in non-compliance, but shallbe no less than $500, and shall not exceed $2,500. An employer that has been issued acitation shall pay the fine to the Commission and provide to the Commission proof that itobtained the required workers compensation insurance within 10 days after the citationwas issued. This Section does not affect any other obligations this Act imposes onemployers.SummaryThis is a substantive change and is effective as of June 28, 2011. Thissection has been amended to allow Insurance investigators the authority toissue citations in the amount of $500 to $2,500 to “any Employer that is notin compliance with its obligations to have workers’ compensationinsurance.” After receiving a citation, an Employer will have 10 days topay the fine and provide proof that it secured proper workers’compensation insurance.This provision strengthens the 2005 amendments, which allowed for bothCriminal and Civil liability for any Employer who knowingly failed toprovide worker’s compensation coverage for its employees.
  15. 15. MEDICAL CHOICESSection 8(a):Every hospital, physician or surgeon or other person rendering treatment orservices in accordance with provisions of this Section shall upon written requestfurnish full and complete reports thereof to, and permit their records to be copiedby, the employer, the employee or his dependents, as the case may be, or anyother party to any proceeding for compensation before the Commission or theirattorneys.Notwithstanding the foregoing, the employers liability to pay for such medicalservices selected by an employee of an employer without an approved preferredprovider program pursuant to Section 8.1a on the date the employee sustainedhis or her accidental injuries shall be limited to:(1) all first aid and emergency treatment; plus(2) all medical surgical and hospital services provided by the physician, surgeonor hospital initially chosen by the employee or by other physician , consultant,expert, institution or other provider of services recommended by said initialservice provider or any subsequent provider of medical services in the chain ofreferrals from said initial service provider; plus(3) all medical, surgical and hospital services provided by any second physician,surgeon or hospital subsequently chosen by the employee or by any otherphysician, consultant, expert, institution or other provider of servicesrecommended by said second service provider or any subsequent provider ofmedical services in the chain of referrals from said second service provider.There after the employer shall select and pay for all necessary medical, surgicaland hospital treatment and the employee may not select a provider of medicalservices at the employers expense unless the employer agrees to suchselection. At any time the employee may obtain any medical treatment hedesires at his own expense. This paragraph shall not affect the duty to pay forrehabilitation referred to above.(4) The following shall apply for injuries occurring on or after the effective date ofthis amendatory Act of the 97th General Assembly and only when an employerhas an approved preferred provider program pursuant to Section 8.1a on thedate the employee sustained his or her accidental injuries: (A) The employer shall, in writing, on a form promulgated by theCommission, inform the employee of the preferred provider program; (B) Subsequent to the report of an injury by an employee, the employee
  16. 16. may choose in writing at any time to decline the preferred provider program, inwhich case that would constitute one of the two choices of medical providers towhich the employee is entitled under subsection (a)(2) or (a)(3); and (C) Prior to the report of an injury by an employee, when an employeechooses non-emergency treatment from a provider not within the preferredprovider program, that would constitute the employees one choice of medicalproviders to which the employee is entitled under Section (a)(2) or (a)(3).SummaryThis is a substantive change, effective June 28, 2011, and impacting claimson or after that date. This amendment to the Illinois WorkersCompensation Commission Act provides that the employer is entitled toprovide a written and approved medical provider program pursuant toSection 8.1a of the Act. To do so, the Employer must provide written noticeof the program on a form supplied by the Illinois Workers CompensationCommission. As of the writing of this summary the forms do not yet exist.If Employer does not have an approved provider plan, the employeesrights to treatment do not change from the existing statute.If the employee reports an accident and provides a written declination oftreatment within the Preferred Provider Network, such declinationconstitutes one of the employees two choices of medical providers.If the employee does not report an accident and seeks non-emergencytreatment outside of the preferred provider plan, the employee is notentitled to seek yet another medical provider because he exercised hischoice by seeking non-emergency care, his other choice being waived byhis implicit rejection of the employer’s PPP. However, the claimant couldstill treat with the PPP if he did not provide a written rejection of the PPP.The primary change to this section is the employers ability to provide apreferred provider plan. This is obviously a response to the freedom thatwas previously provided the employee and the high medical fees that wereassociated. In only those instances where the employer does not providea preferred provider plan is the petitioner given the freedom same to selecta doctor that currently exists.WAGE LOSSSection 8(d)1 pertains to claims for wage differential. This provision previouslystated:
  17. 17. “If, after the accidental injury has been sustained, the employee as a resultthereof becomes partially incapacitated from pursuing his usual and customaryline of employment, he shall, except in cases compensated under the specificschedule set forth in paragraph (e) of the Section, receive compensation for theduration of his disability, subject to the limitations as to maximum amounts fixedin paragraph (b) of the Section, equal to 66-2/3% of the difference between theaverage amount which he would be able to earn in the full performance of hisduties in the occupation in which he was engaged at the time of the accident andthe average amount which he is earning or is able to earn in some suitableemployment or business after the accident.”What was added.“For accidental injuries that occur on or after September 1, 2011, an award forwage differential under this subsection shall be effective only until the employeereaches the age of 67 or 5 years from the date the award becomes final,whichever is later.”SummaryThis is a substantive change effective September 1, 2011. This shouldrepresent a savings for the respondent, the degree of which will dependupon each case scenario. On average, the life expectancy of males is 80years and females 83 years. At the 67 year cap, this is a reduction of 13and 16 years of wage differential benefits respectively.What this means in dollars and cents will vary with each case. If weassume a maximum wage differential rate of $930.39, thirteen years ofbenefits equals $628,943.64. Sixteen years of benefits equals $774,084.48.At a more modest $275.00 per week, thirteen years of benefits is$185,900.00. At sixteen years, $228,800.00.The present cash value savings are also encouraging. For example,assume a 55 year old male with a maximum wage differential rate of$930.39. The present cash value of such a claim, assuming a 5% rate ofreturn before the amendment is $681,866.82. For an accident occurringafter September 1, 2011, the same claim has a value of $428,808.00. Thisresults is a potential savings of $253,057.89.Assuming a wage differential rate of $275.00 per week, the same scenarioresults in a pre-amendment present cash value of $191,818.77. Post-amendment value is $126,745.19 a difference of $65,073.58.Practical application.At present, the majority of wage differential claims are resolved via
  18. 18. settlement. This is due in large part to petitioner’s desire for a lump sumsettlement and the insurance carrier’s desire to close the file. The abilityto reach a settlement and the settlement value of the case involves severalfactors only one of which is the life expectancy of the claimant. More oftenthan not, the deciding factors in the resolution of a wage differential are adisputed earning potential, rate of return and or the degree that the presentcash value can be discounted in exchange for a lump sum payment. Withthe advent of the wage differential cap, we will be armed with yet anotherfactor we can use to bring about a favorable outcome.We are very concerned with the language tying the wage differential cap of5 years to when “the award becomes final”. With this language, we canconceive of situations, particularly as petitioner gets closer to age 67, inwhich it would be in the claimant’s best interest to hold off proceeding totrial for as long as possible. We can and will motion matters for hearingwhere an Application has been filed. The difficulty will lie in cases in whichno dispute exists. Case law states that wage differential benefits are to bepaid once the extent of the differential is known. There is no requirementfor an Application to be filed. The statute of limitations allows a filing of anApplication two years from the last payment of benefits. Under thisscenario we can envision situations in which the “award” is never enteredor an award is entered more than 5 years after the petitioner has reachedthe age of 67.In these cases, our ability to resolve matters at favorable rates anddiscounts will depend significantly upon either the claimant’s or opposingcounsel’s desire for a lump sum over weekly benefits.SPECIFIC LOSS CLAIMS FOR CARPAL TUNNEL SYNDROMESection 8(e) pertains to specific loss claims. This provision has been modified soas to reduce the overall exposure for hand injuries and specifically place limits oncarpal tunnel syndrome. The provision previously stated:“For accidental injuries in the following schedule, the employee shall receivecompensation for the period of temporary total incapacity for work resulting fromsuch accidental injury, under subparagraph 1 of paragraph (b) of this Section,and shall receive in addition thereto compensation for a further period for thespecific loss herein mentioned, but shall not receive any compensation under anyother provisions of this Act. The following listed amounts apply to either the lossof or the permanent and complete loss of use of the member specified, suchcompensation for the length of time as follow:Hand-190 weeks if the accidental injury occurs on or after the effective date of the
  19. 19. amendatory Act of the 94th General Assembly but before February 1, 2006.205 weeks if thee accidental injury occurs on or after February 1, 2006.”What was added:“190 weeks if the accidental injury occurs on or after the effective date of thisamendatory Act of the 97th General Assembly and if the accidental injuryinvolves carpal tunnel syndrome due to repetitive or cumulative trauma, in whichcase the permanent partial disability shall not exceed 15% loss of use of thehand, except for cause shown by clear and convincing evidence and in whichcase the award shall not exceed 30% loss of use of the hand.”Summary:This is a substantive change effective June 28, 2011 and applicable only toaccidents occurring after that date. Some practitioners have questionedwhether this change reduces the number of weeks to be used inpermanency calculations for ALL hand injuries. If that is the case, thiswould represent an approximate 7% savings on all hand injuries. However,most practitioners interpret this change to 190 weeks for the specific lossof a hand to apply only to carpal tunnel syndrome cases and only if theyare causally related to repetitive trauma or cumulative trauma.Carpal tunnel injuries caused by repetitive or cumulative trauma have beenfurther limited to 15% loss of the hand, or 28.5 weeks of compensation. Inextreme cases, shown by clear and convincing evidence, the permanencycan be increased to 30% loss of the hand or 57 weeks of compensation.Practical applicationCarpal tunnel syndrome claims at the Commission were fairly common andwere generally valued based upon whether surgery was required, the endresult and whether the condition involved the dominant hand. For a non-operated carpal tunnel syndrome with a full duty release, a typicalexposure would be in the area of 10% of the hand and possibly 12% loss ofuse if it were the dominant hand. The new maximum percentage enactedwill not affect these claims, though we will certainly argue that the intentionof the changes was a reduction in permanency. If 15% loss is meant torepresent an operated carpal tunnel syndrome with favorable results, amore appropriate award for an un-operated carpal tunnel syndrome shouldbe in the area of 5% to 7% loss of the hand. The inclusion of AMA guides,discussed elsewhere, will also play a role in these assessments.If surgery were required, and again assuming a return to full duty, thetypical exposure for such a claim would be in the area of 20% loss of use of
  20. 20. the hand and as high as 25% loss of use if it were the dominant hand. Inthese types of claims, the recent changes should result in significantsavings. Again assuming an average weekly wage of $600.00 per week, anoperated carpal tunnel syndrome in the dominant hand would have had anexposure in the area of $18,450.00. Post-Amendment, that same claim willhave an exposure of $10,260.00, a difference of $8,190.00. The savingsincrease as the average weekly wage increases. Assuming an averageweekly wage of $1000.00 per week, the operated carpal tunnel syndromehas an exposure of up to $30,750.00. Post-Amendment, the same claim willhave an exposure of $17,100.00, a savings of $13,650.00.What the Commission means by “except for cause shown by clear andconvincing evidence and in which case the award shall not exceed 30%loss of use of the hand” is not particularly clear. We can only surmise thatunder certain circumstances, the Arbitrator can award up to 30% loss ofthe hand. At present, 30% loss of use of the hand for a carpal tunnelsyndrome claim would be exceptionally high and would only be seen inunusual circumstances. We suspect the Petitioner’s bar will focus on thislanguage to push for decisions that are consistent with the exposure ofbetween 20% and 25% loss of use of the hand.In addition to the discussion regarding whether this change applies to allhand injuries, an additional debate has ensued regarding the level of proofrequired to meet the burden to establish a compensable claim. Mostpractitioners have taken the position that the claimant need only prove by apreponderance of the evidence that he or she has sustained acompensable carpal tunnel syndrome as a result of repetitive or cumulativetrauma. Some feel, however, that the legislature intended to increase theburden of proof to that of clear and convincing evidence not only for theenhanced percentage loss (over 15%), but also for causation.Certainly, our position will be that the limiting nature of the languagedemonstrates a clear intent to reduce the exposure on all carpal tunnelclaims caused by repetitive or cumulative trauma. The language “exceptfor cause shown by clear and convincing evidence” would denote anexception to the norm and should be an indication of an unusualcircumstance needed to receive any award higher than the 15% mandatedby the Amendment (or perhaps even as to causal relationship).The Amendments to the Act do not preclude a claimant from seekingbenefits under the previously discussed Section 8(d)1 of the Act.Accordingly, the caps placed on carpal tunnel syndrome claims will notcome into affect in situations in which ultimate restrictions are such that aclaimant is unable to return to his customary line of work resulting in areduction in wages.
  21. 21. PREFERRED PROVIDER PROGRAMS820 ILCS 305/8.1aSec. 8.1a. Preferred Provider Programs. Starting on the effective date of thisamendatory Act of the 97th General Assembly, to satisfy its liabilities under thisAct for the provision of medical treatment to injured employees, an employer mayutilize a preferred provider program approved by the Illinois Department ofInsurance as in compliance with Sections 370k, 370l, 370m, and 370p of ArticleXX-1/2 of the Illinois Insurance Code. For the purposes of compliance withthese Sections, the employee shall be considered the "beneficiary" and theemployer shall be considered the "insured". Employers and insurers contractingdirectly with providers or utilizing multiple preferred provider programs toimplement a preferred provider program providing workers compensationbenefits shall be subject to the above requirements of Article XX-1/2 applicable toadministrators with regard to such program, with the exception of Section 370l ofthe Illinois Insurance Code. (a) In addition to the above requirements of Article XX-1/2 of the IllinoisInsurance Code, all preferred provider programs under this Section shall meetthe following requirements: (1) The provider network shall include an adequate number ofoccupational and non-occupational providers. (2) The provider network shall include an adequate number and typeof physicians or other providers to treat common injuries experienced by injuredworkers in the geographic area where the employees reside. (3) Medical treatment for injuries shall be readily available atreasonable times to all employees. To the extent feasible, all medical treatmentfor injuries shall be readily accessible to all employees. (4) Physician compensation shall not be structured in order to achievethe goal of inappropriately reducing, delaying, or denying medical treatment orrestricting access to medical treatment. (5) Before entering into any agreement under this Section, a programshall establish terms and conditions that must be met by non-institutionalproviders wishing to enter into an agreement with the program. These terms andconditions may not discriminate unreasonably against or among non-institutionalproviders. Neither difference in prices among non-institutional providersproduced by a process of individual negotiation nor price differences amongother non-institutional providers in different geographical areas or differentspecialties constitutes unreasonable discrimination.
  22. 22. (b) The administrator of any preferred provider program under this Act thatuses economic evaluation shall file with the Director of Insurance a description ofany policies and procedures related to economic evaluation utilized by theprogram. The filing shall describe how these policies and procedures are used inutilization review, peer review, incentive and penalty programs, and in providerretention and termination decisions. The Director of Insurance may denyapproval of any preferred provider program that uses any policy or procedure ofeconomic evaluation to inappropriately reduce, delay or deny medical treatment,or to restrict access to medical treatment. Evaluation of providers based uponobjective medical quality and patient outcome measurements, appropriate use ofbest clinical practices and evidence based medicine, and use of healthinformation technology shall be permitted. If approved, the employer shallprovide a copy of the filing to all participating providers. (1) The Director of the Department of Insurance shall make eachadministrators filing available to the public upon request. The Director of theDepartment of Insurance may not publicly disclose any information submittedpursuant to this Section that is determined by the Director of the Department ofInsurance to be confidential, proprietary, or trade secret information pursuant toState or federal law. (2) For the purposes of this subsection (b), "economic evaluation" shallmean any evaluation of a particular physician, provider, medical group, orindividual practice association based in whole or in part on the economic costs orutilization of services associated with medical care provided or authorized by thephysician, provider, medical group, or individual practice association. Economicevaluation shall not include negotiated rates with a provider. (c) Except for the provisions of subsection (a) of Section 26 and for injuriesoccurring on or after the effective date of this amendatory Act of the 97th GeneralAssembly, an employee of an employer utilizing a preferred provider programshall only be allowed to select a participating network provider from the network.[emphasis added] An employer shall be responsible for: (i) all first aid andemergency treatment; (ii) all medical, surgical, and hospital services provided bythe participating network provider initially selected by the employee or by anyother participating network provider recommended by the initial participatingnetwork provider or any subsequent participating network provider in the chain ofreferrals from the initial participating network provider; and (iii) all medical,surgical, and hospital services provided by the participating network providersubsequently chosen by the employee or by any other participating networkprovider recommended by the subsequent participating network provider or anysubsequent participating network provider in the chain of referrals from thesecond participating network provider. An employer shall not be liable forservices determined by the Commission not to be compensable. An employershall not be liable for medical services provided by a non-authorized providerwhen proper notice is provided to the injured worker.
  23. 23. (1) When the injured employee notifies the employer of the injury orfiles a claim for workers compensation with the employer, the employer shallnotify the employee of his or her right to be treated by a physician of his or herchoice from the preferred provider network established pursuant to this Section,and the method by which the list of participating network providers may beaccessed by the employee, except as provided in subsection (a)(4) of Section 8. (2) Consistent with Article XX-1/2 of the Illinois Insurance Code,treatment by a specialist who is not a member of the preferred provider networkshall be permitted on a case-by-case basis if the medical provider network doesnot contain a physician who can provide the approved treatment, and if theemployee has complied with any pre-authorization requirements of the preferredprovider network. Consent for the employee to visit an out-of-network providermay not be unreasonably withheld. When a non-network provider is authorizedpursuant to this subparagraph (2), the non-network provider shall not hold anemployee liable for costs except as provided in subsection (e) of Section 8.2. (3) The Director shall not approve, and may withdraw prior approval of,a preferred provider program that fails to provide an injured employee withsufficient access to necessary treating physicians, surgeons, and specialists. (d) Except as provided in subsection (a)(4) of Section 8, upon a finding bythe Commission that the care being rendered by the employees second choiceof provider within the employers network is improper or inadequate, theemployee may then choose a provider outside of the network at the employersexpense. The Commission shall issue a decision on any petition filed pursuant tothis Section within 5 working days. (e) The Director of the Department of Insurance may promulgate such rulesas are necessary to carry out the provisions of this Section relating to approvaland regulation of preferred provider programs.SummaryThis amendment is substantive and effective as of June 28, 2011. This is awholly new section added to the Act with these latest Amendments. Thisprovision essentially gives employers the option to satisfy liability formedical treatment under the Act through the use of a Preferred ProviderProgram (PPP).The PPP must be approved by the Illinois Department of Insurance andcomply with applicable portions of the Illinois Insurance Code. (in order todeal with issues of compliance with the applicable portions of theInsurance Code the employer shall be considered the “Insured” and the
  24. 24. employee shall be considered the “Beneficiary”).Beyond being subject to the approval of the Illinois Department ofInsurance the PPP must also meet the following requirements:1. Include an “adequate” number of BOTH occupational and non-occupational medical providers2. Include an “adequate” number and type of physicians (or otherproviders) to treat common injuries experienced by injured workers in thegeographic area where the employees reside (not simply where theworkplace is located). It is entirely unclear how this will work forcompanies that frequently employ union members who travel across thestate or even from out-of-state. It is unclear whether “reside” refers to theemployee’s permanent residence or, if he / she is traveling, to his or hertemporary / motel residence.3. Medical treatment for injuries shall be “readily available” and “readilyaccessible”, as reasonable, to ALL employees4. Physician compensation SHALL NOT be structured in a manner thatcould be said to reduce, delay or deny medical treatment or restrict accessto such treatment. In other words, compensation cannot be so low that theemployees cannot get access to the physicians.5. The PPP must establish terms/conditions that must be met for aprovider to be able to become a part of the PPP and such terms/conditionscannot discriminate unreasonably. The price of services as aterm/condition does not constitute discrimination. However, the employermust file with the Department of Insurance a written description of alleconomic valuations that are utilized as terms/conditions and the Directorof Insurance may deny approval of a PPP that uses any suchterm/condition in a manner felt to reduce, delay, or deny medical treatment.The employer must provide a copy of the network filing to all participatingproviders and this shall be a matter of public record.An injured employee of an employer that has established such a PPP isonly permitted to select a physician from those within the network.Assuming the employee does so, the employer shall be liable for:1. All first aid and emergency treatment,2. All medical, surgical and hospital services within the network fromemployees first choice of network provider or “within the chain of referral”from the initial network provider
  25. 25. 3. All medical, surgical and hospital services arising from employeessecond choice and within the “chain of referral” from that choice. Anemployer is NOT liable for any medical services either found not to becompensable by the IWCC or for any services provided by a non-authorized provider when proper notice is given the employee.When an employee reports an injury and/or files an Application theemployer must notify the employee of his/her right to obtain medicaltreatment from a physician within the PPP network, and instructions toaccess the list of network providers.An exception allows an employee to obtain treatment from a specialist whois NOT a member of the PPP on a ‘case-by-case” basis if the PPP does notcontain a physician who can provide the treatment in question (forexample, a cardiologist, a dermatologist, a pulmonologist) and theemployee complies with any pre-authorization requirements of the PPP.An employer may NOT unreasonably deny such care.If the Illinois Workers Compensation Commission finds that medical carerendered by employee’s second choice of provider within the PPP isimproper or inadequate, the employee may then choose a providerOUTSIDE the PPP at the employer’s expense. This can be determined byway of a Section 8(a) Petition and a Decision must be filed within five (5)business days of any such hearing (expedited process).Historically, case law has established that third parties (employers,adjusters) may not communicate with a treating doctor about treatmentissues associated with an injured worker. This amendment does notchange that prohibition even though the employer is instrumental inestablishing the panel and selecting the panel members that will, in wholeor part, treat the injured employee. The exception to this restriction iseither that the employer obtain permission (a release) from the employee,in which case communication is allowed, or that the employer seek onlythe minimal information necessary to administer the claim, e.g. thediagnosis, prognosis, treatment  plan,  restrictions, and copies of records orreports.By the same token, assembling a panel does not mean that the panelmembers are the agents of the employer or speak for the employer.Nevertheless, it is an accepted observation before the Commission that ifan employer selects a doctor to conduct an examination (Section 12) or toprovide treatment, the presumption is that the employer respects thedoctor’s qualifications and opinions; giving the impression of agencywhere none actually exists.This amendment clearly creates some medical control heretofore unknown
  26. 26. in Illinois workers compensation law. The employees, whether (union)organized or not, will not have any input regarding the makeup of thepanel(s). On the other hand, the legislation makes it possible for doctorshistorically known as being “petitioner’s doctors” to seek to join localpanels. Paragraph 5, above, requires that the rules to join a panel may notbe discriminatory. The legislation does not establish how large a panelmay be, only that it may not be so small as to prevent the employees fromgetting access to medical care with customary treating professionals(orthopedists, neurologists, neurosurgeons, physiatrists, occupationalmedicine specialists). The reference to “other providers” could allow theinclusion of, for instance, chiropractors or other healers.EVALUATING PERMANENT DISABILITY(820 ILCS 305/8.1b new)Sec. 8.1b. Determination of permanent partial disability. For accidental injuriesthat occur on or after September 1, 2011, permanent partial disability shall beestablished using the following criteria: (a) A physician licensed to practice medicine in all of its branches preparing a permanent partial disability impairment report shall report the level of impairment in writing. The report shall include an evaluation of medically defined and professionally appropriate measurements of impairment that include, but are not limited to: loss of range of motion; loss of strength; measured atrophy of tissue mass consistent with the injury; and any other measurements that establish the nature and extent of the impairment. The most current edition of the American Medical Associations "Guides to the Evaluation of Permanent Impairment" shall be used by the physician in determining the level of impairment. (b) In determining the level of permanent partial disability, the Commission shall base its determination on the following factors: (i) the reported level of impairment pursuant to subsection (a); (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the employees future earning capacity; and (v) evidence of disability corroborated by the treating medical records. No single enumerated factor shall be the sole determinant of disability. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in
  27. 27. a written order.SummaryThis is a substantive change in the law. The legislature has pronouncedthat the effective date is September 1, 2011. For accidental injuries thatoccur on or after September 1, 2011, permanent partial disability shall beestablished using following criteria:A. Level of Impairment: Physician licensed to practice medicine in all its branches preparing a permanent partial disability impairment report shall report written level of impairment and shall include evaluation of medically defined and professionally appropriate measurements of impairment that include, but are not limited to: 1. Loss of range of motion 2. Loss of strength 3. Measured atrophy of tissue mass consistent with the injury 4. Any other measurements that establish the nature and extent of the injury 5. The most current edition of the American Medical Associations "Guides to the Evaluation of Permanent Impairment" shall be used by the physician in determining the level of impairment. Currently the 6th Edition, 2008 is the most current edition. In AMA Guides (6th edition 2008), the three– step process for evaluating impairment is contained in section 2.7. This section is required reading, as it contains many important requirements for the impairment rater. See attachment Section 2.7. a. Step 1 is clinical evaluation, which requires a review of medical records and documenting inconsistencies. The examinee should be encouraged to give full effort in the physical examination, and the physician should review the diagnostic studies.
  28. 28. b. Step 2 is analysis of findings, including diagnoses, MMI status, current abilities for activities of daily (ADLs), and flagging of missing data. c. Step 3 is a specific discussion of how the impairment rating was calculated, and the discussion should cite the pages and tables in the AMA Guides that are used and how they are used.B. Permanent Partial Disability:In determining PPD, the Commission shall base its determination on thefollowing factors: 1. The reported level of impairment pursuant to subsection (a) 2. The occupation of the injured employee; 3. The age of the employee at the time of the injury; 4. The employees future earning capacity; and 5. Evidence of disability corroborated by the treating medical records.C. No single enumerated factor shall be the sole determinant of disability.D. Relevance and weight of factors must be explained in writing. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order.E. Questions: 1. Section 12 examinations, commonly known as Independent medical examinations are to be done by “duly qualified medical practitioner or surgeon selected by the employer” and “for the purpose of determining the nature, extent, and probable duration and probable duration of the injury received by the employee, and for the purpose of ascertaining the amount of compensation which may be due the employee from time to time for disability” according to the provisions of the Act. Section 8.1b limits the type of evidence that can be relied
  29. 29. upon by the Illinois Workers Compensation Commission in determining PPD. It refers to physicians “licensed to practice medicine in all its branches” issuing a permanent partial disability impairment report. Does this limit physicians such as chiropractors and podiatrists from issuing permanent partial disability impairment reports or mean that reports from such physicians cannot be relied upon by the Commission, even though Section 12 does not specify this?2. Section 8.1b places no limitation on treating physicians “licensed topractice medicine in all its branches” from issuing permanent partialdisability impairment reports as long as its requirements are followed.However, if such reports are contained in the patient’s medical records, arethey subject to an objection by an employer attorney as being made inanticipation of litigation so that such reports do not go into evidenceautomatically under Section 16?Section 2.7 of Guides to the Evaluation of Permanent Impairment, 6thedition, 2008 - Preparing ReportsA clear, accurate and complete report must be pro- vided to support arating of permanent impairment. The following 3-step process is requiredby the examiner to estimate impairment according to the Guides:Clinical evaluation, analysis of the findings, and discussion of how theimpairment rating was calculated.2.7a Clinical EvaluationThe relevant history is obtained by a review of medical records reflectingpast medical history and the patient’s presentation of the current history. Itis important to review medical records before performing an impairmentrating, as this will enable the examiner, among other things. to: • Clarify or at least document inconsistencies. if any, between the history provided by the patient and the history contained in the medical records. • Reconcile inconsistencies, if any, between the patients history during the examination and other previous medical records. It is necessary to clarify historical inconsistencies because several issues, including causation. are primarily determined by the history.
  30. 30. • Focus on the portions of the history pertinent to the impairment rating.The physical examination should be performed in a manner and settingthat facilitates the effective communication between the patient and theexaminer, thereby decreasing anxiety and increasing concentration andeffort. If the examiner believes the patient may be giving an inconsistenteffort during the physical examination, the patient should be encouraged togive a full effort. For extremity impairment evaluations, findings should bedocumented bilaterally; if the contralateral extremity is uninjured. this mayserve as the baseline for defining “normal” for the impaired extremity. Theresults of specific measurements must be reproducible to be valid. Reviewof all available diagnostic studies and laboratory data is critical in this step.2.7b Analysis of the FindingsDiscuss how specific findings relate to the conclusion of diagnoses andMMI status. Refer to the current abilities of ADLs and any validateddeficiencies. Explain the absence of any pertinent data and how thephysician determined the impairment rating with limited data.2.7c Discussion of How the Impairment Rating Was CalculatedDiscussion of how the Guides’ criteria were applied to medical informationthat generated the specific rating is required for an impairment evaluationto be consistent with the Guides. Compare the appropriate informationobtained on history and objective findings with the criteria described in theapplicable chapter of the Guides. Include an explanation of eachimpairment value with reference, including pages and table number, to theapplicable criteria of the Guides. Combine multiple impairments for a finalcomposite whole person impairment number, unless otherwise directed byjurisdictional application. Discuss how individual ratings were combinedor added to create a final number; explain why certain ratings weredisregarded in the final analysis due to invalid measurements and testresults; and perform apportionment, where applicable. Include a summarylist of impairments and impairment ratings by percentage, includingcalculation of the whole person impairment. as appropriate.A standard report format Figure 2-3, that the evaluator may use is providedin this chapter; the purpose of this form is to ensure that all essentialelements are included in the impairment evaluation report. This form maybe reproduced without permission from the American Medical Association.When relevant chapters include a data collection form or summary formthat identifies the specific features to consider for each category of organsystem impairment, it must be used to document the data and be attached
  31. 31. with the final report. This will ensure that the process of impairmentevaluation according to the Guides is transparent and is subject tounderstanding by all parties interested in the outcome.The 3-step process described in this section applies to rating all organsystems. Although the underlying impairment evaluation criteria may differ,the process is essentially the same for rating all organ systems. The first 2steps must be performed by a licensed physician. and if the clinicalfindings are fully described, any knowledgeable observer may check thefindings against the Guides’ criteria.FEE SCHEDULESECTION 8.2 OF THE ILLINOIS WORKERS’ COMPENSATION(820 ILCS 305/8.2)Sec. 8.2. Fee schedule.(a) Except as provided for in subsection (c), for procedures, treatments, or servicescovered under this Act and rendered or to be rendered on and after February 1, 2006, themaximum allowable payment shall be 90% of the 80th percentile of charges and fees asdetermined by the Commission utilizing information provided by employers andinsurers national databases, with a minimum of 12,000,000 Illinois line item charges andfees comprised of health care provider and hospital charges and fees as of August 1, 2004but not earlier than August 1, 2002. These charges and fees are provider billed amountsand shall not include discounted charges. The 80th percentile is the point on an ordereddata set from low to high such that 80% of the cases are below or equal to that point andat most 20% are above or equal to that point. The Commission shall adjust thesehistorical charges and fees as of August 1, 2004 by the Consumer Price Index-U for theperiod August 1, 2004 through September 30, 2005. The Commission shall establish feeschedules for procedures, treatments, or services for hospital inpatient, hospitaloutpatient, emergency room and trauma, ambulatory surgical treatment centers, andprofessional services. These charges and fees shall be designated by geozip or anysmaller geographic unit. The data shall in no way identify or tend to identify any patient,employer, or health care provider. As used in this Section, "geozip" means a three-digitzip code based on data similarities, geographical similarities, and frequencies. A geozipdoes not cross state boundaries. As used in this Section, "three-digit zip code" means ageographic area in which all zip codes have the same first 3 digits. If a geozip does nothave the necessary number of charges and fees to calculate a valid percentile for aspecific procedure, treatment, or service, the Commission may combine data from thegeozip with up to 4 other geozips that are demographically and economically similar andexhibit similarities in data and frequencies until the Commission reaches 9 charges orfees for that specific procedure, treatment, or service. In cases where the compiled datacontains less than 9 charges or fees for a procedure, treatment, or service, reimbursementshall occur at 76% of charges and fees as determined by the Commission in a manner
  32. 32. consistent with the provisions of this paragraph. Providers of out-of-state procedures,treatments, services, products, or supplies shall be reimbursed at the lesser of that statesfee schedule amount or the fee schedule amount for the region in which the employeeresides. If no fee schedule exists in that state, the provider shall be reimbursed at thelesser of the actual charge or the fee schedule amount for the region in which theemployee resides. Not later than September 30 in 2006 and each year thereafter, theCommission shall automatically increase or decrease the maximum allowable paymentfor a procedure, treatment, or service established and in effect on January 1 of that yearby the percentage change in the Consumer Price Index-U for the 12 month period endingAugust 31 of that year. The increase or decrease shall become effective on January 1 ofthe following year. As used in this Section, "Consumer Price Index-U" means the indexpublished by the Bureau of Labor Statistics of the U.S. Department of Labor, thatmeasures the average change in prices of all goods and services purchased by all urbanconsumers, U.S. city average, all items, 1982-84=100. (a-1) Notwithstanding theprovisions of subsection (a) and unless otherwise indicated, the following provisions shallapply to the medical fee schedule starting on September 1, 2011: (1) The Commission shall establish and maintain fee schedules forprocedures, treatments, products, services, or supplies for hospital inpatient, hospitaloutpatient, emergency room, ambulatory surgical treatment centers, accreditedambulatory surgical treatment facilities, prescriptions filled and dispensed outside of alicensed pharmacy, dental services, and professional services. This fee schedule shall bebased on the fee schedule amounts already established by the Commission pursuant tosubsection (a) of this Section. However, starting on January 1, 2012, these fee scheduleamounts shall be grouped into geographic regions in the following manner: (A) Four regions for non-hospital fee schedule amounts shall be utilized: (i) Cook County; (ii) DuPage, Kane, Lake, and Will Counties; (iii) Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe, Montgomery, Randolph, St. Clair, and Washington Counties; and (iv) All other counties of the State. (B) Fourteen regions for hospital fee schedule amounts shall be utilized: (i) Cook, DuPage, Will, Kane, McHenry, DeKalb, Kendall, and Grundy Counties; (ii) Kankakee County; (iii) Madison, St. Clair, Macoupin, Clinton, Monroe, Jersey, Bond, and Calhoun Counties; (iv) Winnebago and Boone Counties; (v) Peoria, Tazewell, Woodford, Marshall, and Stark Counties; (vi) Champaign, Piatt, and Ford Counties; (vii) Rock Island, Henry, and Mercer Counties;
  33. 33. (viii) Sangamon and Menard Counties; (ix) McLean County; (x) Lake County; (xi) Macon County; (xii) Vermilion County; (xiii) Alexander County; and (xiv) All other counties of the State. (2) If a geozip, as defined in subsection (a) of this Section, overlaps into oneor more of the regions set forth in this Section, then the Commission shall average orrepeat the charges and fees in a geozip in order to designate charges and fees for eachregion. (3) In cases where the compiled data contains less than 9 charges or fees for aprocedure, treatment, product, supply, or service or where the fee schedule amountcannot be determined by the non-discounted charge data, non-Medicare relative valuesand conversion factors derived from established fee schedule amounts, codingcrosswalks, or other data as determined by the Commission, reimbursement shall occur at76% of charges and fees until September 1, 2011 and 53.2% of charges and feesthereafter as determined by the Commission in a manner consistent with the provisions ofthis paragraph. (4) To establish additional fee schedule amounts, the Commission shall utilizeprovider non-discounted charge data, non-Medicare relative values and conversionfactors derived from established fee schedule amounts, and coding crosswalks. TheCommission may establish additional fee schedule amounts based on either the charge orcost of the procedure, treatment, product, supply, or service. (5) Implants shall be reimbursed at 25% above the net manufacturers invoiceprice less rebates, plus actual reasonable and customary shipping charges whether or notthe implant charge is submitted by a provider in conjunction with a bill for all otherservices associated with the implant, submitted by a provider on a separate claim form,submitted by a distributor, or submitted by the manufacturer of the implant. "Implants"include the following codes or any substantially similar updated code as determined bythe Commission: 0274 (prosthetics/orthotics); 0275 (pacemaker); 0276 (lens implant);0278 (implants); 0540 and 0545 (ambulance); 0624 (investigational devices); and 0636(drugs requiring detailed coding). Non-implantable devices or supplies within these codesshall be reimbursed at 65% of actual charge, which is the providers normal rates underits standard chargemaster. A standard chargemaster is the providers list of charges forprocedures, treatments, products, supplies, or services used to bill payers in a consistentmanner. (6) The Commission shall automatically update all codes and associated ruleswith the version of the codes and rules valid on January 1 of that year. (a-2) For procedures, treatments, services, or supplies covered under this
  34. 34. Act and rendered or to be rendered on or after September 1, 2011, the maximum allowable payment shall be 70% of the fee schedule amounts, which shall be adjusted yearly by the Consumer Price Index-U, as described in subsection (a) of this Section. (a-3) Prescriptions filled and dispensed outside of a licensed pharmacy shall be subject to a fee schedule that shall not exceed the Average Wholesale Price (AWP) plus a dispensing fee of $4.18. AWP or its equivalent as registered by the National Drug Code shall be set forth for that drug.SummaryThis is a substantive change; however the real impact is not on the rightsof the parties as much as on the rights of the medical providers. To allowthe providers to acclimate their practices to the new requirements thisamendment will not be effective until September 1, 2011. With the 2005Amendments, the Illinois Workers’ Compensation Act established a FeeSchedule for medical treatment related to workers’ compensation injuries.At the time, the Fee Schedule was to provide substantial savings to IllinoisBusinesses and offset the increases in benefits to Petitioners providedalong with the 2005 Amendments. Unfortunately, the savings promised bythe Medical Fee Schedule did not materialize as hoped.The current Medical Fee Schedule amendments will provide substantialsavings to Illinois Business not seen subsequent to the enactment of theoriginal fee schedule. In fact, Politicians and Business groups havesuggested that the Medical Fee Schedule changes as part of House Bill1698 will save Illinois businesses as much as $500,000,000.00 annually.This represents a majority of the overall estimated savings to Illinoisbusinesses anticipated with these amendments.
Section 8.2 of the Illinois Worker’s Compensation Act established the medical fee schedule. Substantial changes were made to Section 8.2 of the Act as part of House Bill 1698.The first change concerns treatment rendered by out-of-state providers.The amendment states that providers of out-of-state procedures,treatments, services, products or supplies shall be reimbursed at the lesserof that state’s Fee Schedule amount or the Fee Schedule amount for theregion in which the employee resides. If no Fee Schedule exists in thatstate, the provider shall be reimbursed at the lesser of the actual charge orthe Fee Schedule amount for the region in which the employee resides.Even after the current changes to the Fee Schedule, Illinois still has thesecond highest Medical Fee Schedule reimbursement rate to providers ofthe thirty-seven states that have Fee Schedules as part of their Workers’
  35. 35. Compensation Act. Therefore, for the majority of out of state medicaltreatment, the other state’s Medical Fee Schedule will likely control the costof that medical care. However, there still may be some savings resultingfor this amendment.In addition, with regard to the application of the Fee Schedule, there werechanges made to the “geozips” identified in Section 8.2 of the Act.Geozips refer to a three digit zip code based upon data similarities,geographical similarities, and frequencies. For treatment subsequent toSeptember 1, 2011, there will be four such regions for non-hospital FeeSchedule amounts and fourteen such regions for hospital Fee Scheduleamounts. The regions are identified by county. The four non-hospital FeeSchedule regions are the following: (1) Cook County; (2) DuPage, Kane, Lake and Will Counties; (3) Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe, Montgomery, Randolph, St. Clair, and Washington Counties; and, (4) all other counties of the state.The fourteen regions for hospital Fee Schedule amounts are the following: (1) Cook, DuPage, Will, Kane, McHenry, DeKalb, Kendall and Grundy Counties; (2) Kankakee County; (3) Madison, St. Clair, Macoupin, Clinton, Monroe, Jersey, Bond and Calhoun Counties; (4) Winnebago and Boone Counties; (5) Peoria, Tazewell, Woodford, Marshall, and Stark Counties; (6) Champaign, Piatt and Ford Counties; (7) Rock Island, Henry and Mercer Counties; (8) Sangamon and Menard Counties; (9) McLean County; (10) Lake County; (11) Macon County; (12) Vermillion County; (13) Alexander County; and, (14) all other counties of the state.In cases where the compiled data contains less than nine charges or feesfor a procedure, treatment, product, supply or service or where the FeeSchedule amount cannot be determined by the non-discounted chargedata, non-Medicare relative values and conversion factors derived fromestablished Fee Schedule amounts, coding, crosswalks or other data asdetermined by the Commission, for charges after September 1, 2011,
  36. 36. reimbursement shall occur at 53.2% of charges and fees as determined bythe Commission in a manner consistent with the provisions of thisparagraph. For such charges prior to September 1, 2011, reimbursementwas at seventy-six percent of the charges and fees. This represents a 30%reduction in these fees and should provide substantial savings whereapplicable.With the current amendment, Section 8.2 of the Act will now cover implantsas well. Implants shall be reimbursed at 25% above the net manufacturer’sinvoice price less rebates. Reimbursement will also include actualreasonable and customary shipping charges. House bill 1698 specificallyidentifies the codes to be considered as implants but does allowsubstantially similar updated codes as determined by the Commission.Non-implantable devices or supplies within these defined codes are to bereimbursed at sixty-five percent of the actual charge.The most substantial change to Section 8.2 in House Bill 1698 provides thatfor procedures, treatments, services or supplies covered under the Act andrendered or to be rendered on or after September 1, 2011, the maximumallowable payment shall be seventy percent of the Fee Schedule amount.The Fee Schedule amount is to be adjusted yearly by the Consumer PriceIndex – U as described in the amendments to the Act and placement of theFee Schedule in the 2005 amendments.Essentially, House Bill 1698 provides for a thirty percent reduction in theprior Fee schedule. According to Insurance estimates, medical expensesfor work related injuries in Illinois are now in the area of $1.5 billion dollarsannually. Thus, it has been estimated that the thirty percent reduction inthe fee schedule rate will result in savings of approximately$500,000,000.00 for Illinois businesses.The amendment also addresses prescriptions filled and dispensed outsideof a licensed pharmacy. Those charges shall be subject to a Fee Schedulethat shall not exceed the average wholesale price plus a dispensing fee of$4.18.In addition to amending the Medical Fee Schedule rate and increasing theamount of covered expenses, the amendments also address the timeframeupon which payment for services rendered shall be made. Previously,employers had sixty days from receipt of all of the necessary data elementsto adjudicate the bill to make payment. With the amendment, thistimeframe is reduced to thirty days. Furthermore, the changes address theresponsibility on the employers when the bill does not include all thenecessary data elements to adjudicate the bill. In this scenario, or in thecase where the bill is denied for any other reason, the employer shallprovide written notification to the provider explaining the basis for the
  37. 37. denial and/or describing any additional necessary data elements requiredto adjudicate the bill. This written notice is to be provided within thirtydays of receipt of the bill.The amendments provide that interest is to accrue at a rate of 1% permonth in the case of non-payment within thirty days of receipt of a bill thatcontains substantially all of the required data elements necessary toadjudicate the bill. While the interest charge did not change in theamendment, the timeframe for accrual of interest dropped to thirty days,consistent with the drop in the timeframe to make payment on the bill. Theamendment provides that any required interest payments shall be madewithin thirty days of payment of the bill.With these changes, of course, though reducing the amount that providerswill receive under the new Act, the legislature is trying to speed up thepayment process.In addition to the above, Section 8.2(a) has been added to the IllinoisWorkers’ Compensation Act. This section deals with electronic claims forpayment of medical services. Under this section, the director of insuranceis to adopt rules to: (1) ensure that all healthcare providers and facilitiessubmit medical bills for payment on standardized forms; (2) requireacceptance by employers and insurers of electronic claims for payment ofmedical services; and, (3) ensure confidentiality of medical informationsubmitted on electronic claims for payment of medical services. Wherepossible, the rules shall be consistent with existing standards under theFederal Health Insurance Portability and Accountability Act (HIPAA) of 1996as well as standard adopted under the Illinois Health Insurance Exchangeand Technology Act.Section 8.2(a) provides that the rules referenced above shall be proposedon or before January 1, 2012. The section requires all employers andinsurers to accept electronic claims for payment of medical services on orbefore June 30, 2012.Finally, Section 8.2 has been amended to include language that a providershall not bill or otherwise attempt to recover from the employee for medicalservices or treatment determined by the Commission to be excessive orunnecessary. Prior to this change, employers were not liable for medicalservices or treatment determined by the Commission to be excessive orunnecessary. However, after such a finding by the commission, themedical providers could seek payment of the medical services or treatmentdirectly from the petitioner. It is hoped that this language will curbexcessive or unnecessary treatment, a problem that has plaguingemployers, business, and Petitioners alike.
  38. 38. It has been estimated that the amendments will save Illinois businesses acombined 500 million to 700 million dollars annually. The majority of thosesavings are anticipated to come from changes made to Section 8.2 of theIllinois Workers’ Compensation Act. Savings were promised in 2005 whenthe Medical Fee Schedule was established. The savings, were not realized.However, these amendments should result in substantial savings forIllinois business.However, as noted above, thirty-seven states presently have Medical FeeSchedules in place as part of their state’s Workers’ Compensation Act. Outof those thirty-seven states, Illinois’ Medical Fee Schedule, prior to HouseBill 1698 provided for the second highest reimbursement rate. Even afterthe thirty percent reduction in the Medical Fee Schedule discussed above,Illinois will still rank as the having the second highest reimbursement ratefor medical services rendered as part of a workers’ Compensation injury.Thus, House Bill 1698 was criticized by some as not going far enough tobring Illinois more in line with other states in the Union.MEDICAL PROVIDERS PROHIBITED FROM COLLECTING AGAINSTCLAIMANTS FOR MEDICAL SERVICES OR TREATMENT DETERMINEDBY THE COMMISSION TO BE EXCESSIVE OR UNNECESSARY(820 ILCS 305/8.2)Sec. 8.2. Fee schedule(e) Except as provided in subsections (e-5), (e-10), and 7 (e-15), a provider shall not holdan employee liable for costs related to a non-disputed procedure, treatment, or servicerendered in connection with a compensable injury. The provisions of subsections (e-5),(e-10), (e-15), and (e-20) shall not apply if an employee provides information to theprovider regarding participation in a group health plan. If the employee participates in agroup health plan, the provider may submit a claim for services to the group health plan.If the claim for service is covered by the group health plan, the employees responsibilityshall be limited to applicable deductibles, co-payments, or co-insurance. Except asprovided under subsections (e-5), (e-10), (e-15), and (e-20), a provider shall not bill orotherwise attempt to recover from the employee the difference between the providerscharge and the amount paid by the employer or the insurer on a compensable injury, orfor medical services or treatment determined by the Commission to be excessive orunnecessary.SUMMARYThere is a debate as to whether this is procedural or substantive. We consider itsubstantive and effective immediately (June 28, 20111), impacting cases arising after
  39. 39. the signing date. Clearly this does not impact the rights of either of the customaryparties to the litigation, but it does affect property rights of medical providers.Based on this new provision, if the Commission determines that medical services ortreatment were excessive or unnecessary, the medical provider will be prohibitedfrom pursuing recovery for his charges against the claimant despite the fact that theclaimant retained the medical provider and had an implied contract to pay for themedical services rendered. While we welcome this provision which hopefully willend some of the abusive over-treatment, over-utilization of certain medical services,and excessive charges we often see, we expect this to become somewhat problematicin the day-to-day practice before the Commission. In the case where a medicalprovider has made excessive charges or has rendered unnecessary treatment whichare challenged, it now should be necessary, with acknowledgment of due processconcerns, to bring that medical provider before the Commission to give the provideran opportunity to be heard and to justify their charges or the reasonableness of thetreatment they rendered. If those medical providers whose bills are challenged arenot given an opportunity to be heard before their bills are adjudicated, they willhave a strong argument that they were denied the due process of law and left withno avenue to recover the charges for the service they rendered. This would clearlybe improper.Prior to this amendment, if the Commission found a medical bill to be excessive ormedical services to be unreasonable or unnecessary, the Commission would simplydeny payment of the bill as part of the award. In that event the medical providercould still pursue recovery for the unpaid balance against theclaimant/employee/patient in the Circuit Court under a theory that there had been avalid contract for his services. The claimant would have to dispute the charges inthat forum. However, with this provision in effect, the claimant/employee/patient’sliability for the disallowed charges is eliminated by a finding by the Commission.Accordingly, it will be imperative to give such medical providers with challengedbills an opportunity to be heard before their bills are adjudicated.Since now it will likely be necessary to bring medical providers whose bills arechallenged (and their attorneys) before the Commission for them to participate inthe hearing regarding their bills, it will be necessary for the Commission to createsome mechanism or process by which such medical providers can be joined asnecessary parties to a pending workers’ compensation case. Since liens for medicalservices are not recognized under the Workers’ Compensation Act, and there is noestablished procedure to bring necessary parties before the Commission, it will benecessary for the Illinois Workers Compensation Commission to promulgate Rulesgoverning how such parties should be joined to the action pending before theCommission. Accordingly, by passing this provision, the legislature had goodintentions of protecting claimants from liability for excessive medical bills and billsfor unnecessary treatment, but has increased the burden on the Commission whichis charged with adjudicating those disputed bills. This will accordingly addadditional parties and lawyers to the proceedings which were always intended to besimple and summary. Unfortunately, the practice before the Commission is coming

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