The document discusses the legal implications and outcomes of cases involving medical providers seeking interest payments from insurance companies under the Illinois Workers' Compensation Act, focusing on their status as third-party beneficiaries and the implied rights for action. It outlines various legal counts dismissed against the insurance companies, the importance of statutory timelines for interest payments, and the evolving processes for addressing medical bills and utilization reviews in the context of worker's compensation claims. Additionally, it suggests best practices for settlement agreements and the potential defenses for medical providers in circuit court disputes over unpaid medical bills.

1. Marque Medicos Fullerton v. Zurich, et al 2017 Ill.App(1st
) 160756 – August 2017
A medical provider seeking interest pursuant to 8.2(d)(3) directly from insurance companies directly.
Count 1: alleged medical providers are 3rd
party beneficiaries of the WC insurance policies.
Providers found not to be intended 3rd
party beneficiaries to insurance policies between employers and insurers;
Count 2: alleged medical providers had implied right of action for violation of WC Act.
Providers did not have implied right of action for insurers’ failure to comply with interest provision of the Act
because they were not members of the class benefited by the Act.
Count 3: alleged a breach of contract for Employers’ failure to comply with interest provision of Act
Plaintiffs concede that defendants’ purported consideration for any asserted implied-in-fact contract was to be
performed pursuant to pre-existing duties. A preexisting duty cannot be valid consideration. White v. Village of
Homewood, 256 Ill.App.3d 354 (1st
Dist. 1993).
Count 4: alleged a violation of the Insurance Code entitling them to attorney fees and statutory damages due to
violation of the Insurance Code.
The Illinois Supreme Court recognized that section 155 of the insurance code extends only to the party insured and
policy assignees, not third parties. Yassin v. Certified Grocers of Illinois, 133 Ill.2d 458 (1990). Plaintiffs are neither.

2. Michael B. Beatty v. Accident Fund, et al. 3:17-cv-01001
On 09/19/2017 Dr. Michael Beatty filed a class action proposal on behalf of “all Illinois physicians who, from July
20, 2005 to present, rendered medical services to an employee covered by the provisions of the Illinois Worker’s
Compensation Act and who were not paid interest as required by as 820 ILCS 305/8.2(d)(1-3).
The case was brought against 45 insurance carriers and claims:
1. “Defendants have fraudulently concealed their failure to pay the statutory interest…”
2. Defendants have failed to pay the statutory interest “as part of a common scheme and conspiracy,
the object of which is to deprive Illinois physicians of the payments they are entitled to under 820 ILCS
305/8.2(d)(1-3).
The case is currently pending in the US District Court – Southern District of Illinois

3. Interest – Section 8.2(d)(3)
In the case of nonpayment to a provider within 30 days of receipt of the bill which contained substantially all of
the required data elements necessary to adjudicate the bill or nonpayment to a provider of a portion of such a
bill up to the lesser of the actual charge or the payment level set by the Commission in the fee schedule
established in this Section, the bill, or portion of the bill, shall incur interest at a rate of 1% per month payable to
the provider. Any required interest payments shall be made within 30 days after payment.
Interest first payable after 60 days in the 2005 Amendments but changed to 30 days in the 2011 Amendments

4. Where did we come from – Statute prior to 2005 Amendments
Employer responsible for Related, Reasonable and Necessary medical bills.
Section 12 – IME Examinations was the most common way for Respondent’s to obtain a medical opinion stating
that the medical treatment was not causally related to the accident and not reasonable or medically necessary to
cure & treat a condition. (Record reviews also used to dispute related, reasonable and necessary).
Section 16 – allows the Commission to determine the dollar amount of the Reasonable medical bill
The Commission shall have the power to determine the reasonableness and fix the amount of any fee of
compensation charged by any person, including attorneys, physicians, surgeons and hospitals, for any service
performed in connection with this Act…

5. Where are we now? After Amendments
Section 12 - IME Examinations remains the most common way for Respondent’s to obtain a medical opinion
stating that the medical treatment was not causally related to the accident only. Can no longer be used to
dispute if the treatment is reasonable and necessary.
Section 8.2 – Medical Fee Schedule determines the reasonable amount of the medical bills. (NOT Section 16)
Section 8.2(e) – No Balance Billing – determines the reasonable amount of medical bills.
The three sections that are currently on fire to be discussed in detail:
Section 8.7 – Utilization Review to determine if treatment is reasonable and necessary.
Section 8.2 (e-20) – allows providers to pursue collection after case resolved.
Section 8.2 (d)(3) – Interest - 1% per month after 30 days (originally 60 days in 2005)

6. Utilization Review 8.7 – the doctor has a duty to participate
"Utilization review" means the evaluation of proposed or provided health care services to determine the
appropriateness of both the level of health care services medically necessary and the quality of health care
services provided to a patient, including evaluation of their efficiency, efficacy, and appropriateness of treatment,
hospitalization, or office visits based on medically accepted standards… Utilization techniques may include
prospective review, second opinions, concurrent review, discharge planning, peer review, independent medical
examinations, and retrospective review …
Only a health care professional may make determinations regarding the medical necessity of health care services
during the course of utilization review…
When making retrospective reviews, utilization review programs shall base reviews solely on the medical
information available to the attending physician or ordering provider at the time the health care services were
provided…
(i) Upon receipt of written notice that the employer or the employer's agent or insurer wishes to invoke the
utilization review process, the provider of medical, surgical, or hospital services shall submit to the
utilization review, following accredited procedural guidelines.
(1) The provider shall make reasonable efforts to provide timely and complete reports of clinical information
needed to support a request for treatment. If the provider fails to make such reasonable efforts, the charges
for the treatment or service may not be compensable nor collectible by the provider or claimant from the
employer, the employer's agent, or the employee. The reporting obligations of providers shall not be
unreasonable or unduly burdensome.

7. (2) Written notice of utilization review decisions, including the clinical rationale for certification or non-
certification and references to applicable standards of care or evidence-based medical guidelines, shall be
furnished to the provider and employee…
(5) The medical professional responsible for review in the final stage of utilization review or appeal must be
available in this State for interview or deposition; or must be available for deposition by telephone, video
conference, or other remote electronic means...
(j) When an employer denies payment of or refuses to authorize payment… if that denial or refusal to
authorize complies with a utilization review program… and complies with all other requirements of this Section,
then there shall be a rebuttable presumption that the employer shall not be responsible for payment of
additional compensation pursuant to Section 19(k) of this Act and if that denial or refusal to authorize does not
comply with a utilization review program registered under this Section and does not comply with all other
requirements of this Section, then that will be considered by the Commission, along with all other evidence and
in the same manner as all other evidence, in the determination of whether the employer may be responsible for
the payment of additional compensation pursuant to Section 19(k) of this Act.

8. Section 8.2 (e-20) collection may resume after case resolved
(e-20) Upon a final award or judgment by an Arbitrator or the Commission, or a settlement agreed to by the
employer and the employee, a provider may resume any and all efforts to collect payment from the employee
for the services rendered to the employee and the employee shall be responsible for payment of any
outstanding bills for a procedure, treatment, or service rendered by a provider as well as the interest awarded
under subsection (d) of this Section. In the case of a procedure, treatment, or service deemed compensable, the
provider shall not require a payment rate, excluding the interest provisions under subsection (d), greater than the
lesser of the actual charge or the payment level set by the Commission in the fee schedule established in this
Section. Payment for services deemed not covered or not compensable under this Act is the responsibility of
the employee unless a provider and employee have agreed otherwise in writing. Services not covered or not
compensable under this Act are not subject to the fee schedule in this Section.

9. “old” settled cases
Typical language
Reasonable and necessary medical bills have been/will be paid
Respondent will pay submitted medical bills through (specific date) (date of contract approval)
We are finding that after the case is settled, paid, disbursed and closed, the insurance company is performing a
retroactive UR denying bills as reasonable and necessary.
Now we have the doctor seeking payment from the Petitioner or from our office but the case is settled,
approved, paid and disbursed.

10. The new world of settlement
We have drafted new Terms of Settlement to attempt to address these issues:
To resolve the disputed issue of the nature and extent of disability, Respondent offers and Petitioner accepts
_________________ representing ______________ in full and final settlement of all claims under the Illinois
Worker's Compensation Act. The Parties agree all rights under Sections 8(a), 19(h), 8.7 and 5(b) of the Act are
waived and extinguished. Respondent agrees to pay all outstanding medical expenses and interest. These
outstanding medical expenses are agreed to be related, causally connected, necessary and reasonable and
Respondent agrees to pay these medical expenses at or prior to the time of executing the settlement draft.
Respondent agrees to hold harmless and indemnify Petitioner against reimbursement for claims under group
health insurance. The Parties, pursuant to Section 9070.40, reserve the right to amend an approved Settlement
Contract to conform with regulatory requirements including, but not limited to, Social Security and Medicare.
Petitioner confirms they are not receiving Social Security or Medicare benefits and has not applied for same at
the time of executing this contract.
*without this type of language, it may be best practice to treat these cases like PI cases: negotiate the bill and get
the doctor to agree to a lower dollar amount as full and final payment including any claim for statutory interest
pursuant to Section 8.2(d) of the Act.
Be aware, the Respondents are attempting to include language about interest in their contracts as well:
“Respondent will not pay interest on any unpaid medical bills. The parties agree no interest is due for any
medical bill pursuant to Section 8.2(d) of the Act.”

11. We have also drafted a Rider to our Power of Attorney to be used in situations when the client demands no
payment of medical bills to the providers:
I, ________________________, understand that my case is disputed. There are outstanding medical bills related
and unrelated to my case. My lawyer has offered to negotiate the outstanding medical bills to lower amounts.
My lawyer has advised that medical providers may attempt to hold me responsible for medical bill balances
owed, interest and costs of collection. My lawyer desired to negotiate outstanding medical bills to satisfy medical
providers and to avoid future collection issues. My lawyer has advised that there are no medical bill liens in
Workers’ Compensation cases, so the medical providers do not have a lien against my case. My lawyer has
specifically advised me that the medical providers may pursue collection of their related medical bills to include
interest at 1% per month (or 12% per year) interest, plus costs. My lawyer will perform no legal work, following
my signing of this Direction, relating to medical bills including not representing me in any manner or matter for
defense of medical collection.
I direct my attorneys, against legal advice, to disburse my settlement funds without negotiating and/or paying my
medical bills. I understand that I may be responsible for any and all outstanding medical bills plus interest and
costs. I understand that the medical providers may refuse to provide me further or future medical treatment for
me and possibly members of my family, pursue collection actions, report the debt on my credit report, file a
lawsuit, garnish my wages, lien my holdings, contact me by telephone and mail, harass me for payment, and all
further means of collection available under law.
I have been fully advised by my attorneys. There have been no special promises made to me. I have fully
considered my attorneys advice. I have not made this decision under duress. I hereby direct my attorneys not to
negotiate and/or pay any medical bills.

12. We need a finding of “related” medical expenses for the IWCC to retain jurisdiction
If the finding of “related” is missing from your Settlement Contract or Decision, and the treatment is found
unreasonable and unnecessary, you are opening your client up to litigation in Circuit Court.
Respondents can dispute “related” by an IME report but not with UR.

13. The Request for Hearing form or “stip sheet” is silent when it comes to “related” medical

14. The Commission “paragraphs” for the Arbitrator’s Decision is silent when it comes to “related” medical

15. – the first time it is an “option” is on Review. Petitioner has burden of proof based on medical opinions.

16. We need the doctors on notice that they are a part of the Statutory Scheme and we are sending a letter

17. Doctor at trial
The doctor is not a party – however, under 8.7 they have a statutory duty to participate before the Commission.
This is why we are putting the doctor on notice of their duty.
The question of how you want the doctor to participate may come down to the amount of the outstanding bill
and the medical provider’s level of cooperation.
Subpoena – if the response to the subpoena includes UR responses and dates of submission of medical bills for
interest, maybe that will be strong enough to proceed?
Deposition – If you need to depose the doctor, the question again becomes the cost/benefit analysis. Is the
doctor demanding a witness fee to get his bill paid when he has not participated in the UR process appropriately?
Certified letter to doctor requesting that he appear to defend the medical bills and treatment, still does not make
provider a party. But, again, did the doctor participate.
Subpoena/Subpoena enforcement in Circuit Court is a lengthy and expensive process that none of us wants to
pursue.
Start with your letter writing campaign putting the medical provider on notice that they are a part of the process!

18. Arbitrator Findings that you want in the IWCC forms:
1. Medical provider did participate with UR.
2. Treatment related to the accident.
3. Interest is being awarded.
If the doctor is not cooperating we need Arbitrator Findings to document to protect clients:
1. Medical provider failed to participate in UR.
2. Medical provider put on notice by letters detailing the duty to cooperate and participate in UR.
3. Doctor failed to comply with subpoena/submit to deposition/testify live following certified
letter/subpoena/subpoena enforcement.
4. The doctor made a choice not to participate in the proper venue and they are barred from seeking recovery
in another venue.

19. Section 19(p):
After filing an application… but prior to the hearing on arbitration the parties may voluntarily agree to submit
such application… for decision by an arbitrator under this subsection (p) where such application… raises only a
dispute over temporary total disability, permanent partial disability or medical expenses. Such agreement shall
be in writing in such form as provided by the Commission. Applications for adjustment of claim submitted for
decision by an arbitrator under this subsection (p) shall proceed according to rule as established by the
Commission... The findings of fact made by an arbitrator acting within his or her powers under this subsection (p)
in the absence of fraud shall be conclusive. However, the arbitrator may… correct any clerical errors or errors in
computation within 15 days after the date of receipt of such award of the arbitrator… The decision of the
arbitrator under this subsection (p) shall be considered the decision of the Commission and proceedings for
review of questions of law arising from the decision may be commenced by either party pursuant to subsection
(f) of Section 19… By agreement, the parties shall select one arbitrator from among the 5 persons selected by
the chairman except that if the parties do not agree on an arbitrator from among the 5 persons, the parties may,
by agreement, select an arbitrator of the American Arbitration Association, whose fee shall be paid by the
State in accordance with rules promulgated by the Commission. Arbitration under this subsection (p) shall be
voluntary.

20. Possible Legislation to amend 19p
1. Allow in camera review of medical records when injured worker has been put in jeopardy by a medical
provider
2. Allow the special arbitrator to name the medical provider as a party respondent for full hearing on the
merits.

21. Defenses to the doctor collecting in Circuit Court
1. Res judicata (1) there was a final judgment on the merits by a court of competent jurisdiction; (2) there was
an identity of causes of action; and (3) there was an identify of parties or their privies.” Currie v. Wisconsin
Central, Ltd. 2011 WL 4579598 (1st Dist 2001). To apply the doctrine of res judicata, a court must determine
whether the two lawsuits involve the same cause of action; the test that the Illinois courts generally use to
determine this is whether the evidence needed to sustain the second action would have sustained the first
action. Torcasso v. Standard Outdoor Sales, Inc. 157 Ill.2d 484, 626 N.E.2d 225, 228 (1992).
2. The medical treatment rendered was an integral part of the workers compensation claim. The injured
worker must have notified the provider of the dispute over the bills. The doctor is legislatively required to
participate in UR to present evidence to support the medical treatment provided. The doctor was given an
opportunity to present evidence to support the medical treatment. Evidence that the doctor made the choice
not to participate at the proper venue and/or chose not to fully participate in the hearing.
3. We can use notice to doctor and failure to participate with UR, deposition, subpoenas, testimony as an
affirmative defense. They chose not to participate at the tribunal who had the proper jurisdiction, the IWCC.