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More workers’ comp thoughts

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Illinois

* Louis Atsaves in comments…

I have practiced in the field of Workers’ Compensation in Illinois for 35 years both as a defense (respondent) and plaintiff (petitioner) attorney.

A day or so ago someone claimed the cost for carpal tunnel syndrome surgery was $2,000.00. I threw out a bunch or real numbers. No one seemed to want to talk about them.

Some issued raised in this posting need more clarification:

Causation: Exists under the Act, in spite of some opinions to the contrary. The same causation standard exists in Illinois as in Indiana. A Petitioner who fails to prove causation at the Commission loses his case and gets nothing. A Respondent who fails to rebut a causation opinion loses their case and pays off an award.

Demanding primary cause or principle cause for compensation purposes will probably create a cottage industry of physicians who would be willing to testify to their “opinion” mirroring the new statutory requirements. Respondents still have a industry of physicians who hardly ever find causation or pretend temporary causation for a few weeks based on a 15 minute examination. I predict an increase in litigation as a result. Since reasonable doctors can differ in their opinions and diagnosis, the odds of a fraud prosecution here would be extremely rate. For a system at the Commission that relies upon a nearly 90% settlement rate, it would cost business more money to add additional Arbitrators and Court Reporters. Why? Because business through a portion of their premiums pay for the lions share of costs of running the Illinois Workers’ Compensation system.

Apportioning fault in repetitive trauma cases is an interesting concept, but I don’t see too many cases like that happening that actually could apportion fault within a three year statute of limitations. Current statute of limitations on repetitive trauma cases (such as carpal tunnel syndrome) start the clock when a reasonable person would understand they are suffering from this problem and seek a diagnosis, or upon diagnosis. Other than filling Arbitration hearing rooms with lawyers, little will be accomplished by these provisions as I have seen them in legislative form.

The traveling employee hysterics are similar to those approximately 15 years ago when a handful of employees were injured at company picnics/outings and sought compensation. The proposal then was to use a sledgehammer towards a tiny handful of cases while allowing major problems to continue to fester. This diversion tactic seems to be in full bloom with traveling employees this year. Savings? Practically non-existent.

Comparing total payouts for 100% loss of arms on a state by state basis using maximum rates for injured workers making high wages is not a true comparison. Use what a nurse’s aid makes and the numbers tighten up considerably. A small percentage of workers in Illinois seeking Workers Compensation receive maximum rates. Using extreme situations will not solve any problems.

The insurance premium savings is an issue worthy of additional study. The NCCI benchmarks are a start, but the strange math used to claim a billion dollars in savings is being pocketed was displayed in front of Rep. Hoffman when he chaired the Committee as a Whole of the House recently.

Want to save money in this field without hurting the injured workers right to compensation?

Return to 2005 PPD standards by repealing the 7.5% increase passed by the House and Senate and signed by Blagojevich. We went from 23rd in costs among all the states to 2nd within 2 years after that stunt.

Under Section 8(e) specific loss cases, employers receive credit towards older cases a petitioner is compensated for under the Act. Under Section 8(d)2 where most back injuries and now shoulder injuries receive compensation, no credits for prior injuries occur.

Create new categories under Section 8(e) for lumbar, thoracic and cervical spine injuries, add hips and shoulders, and allow credits for prior injuries. Now an employee can sprain/strain his back 10 times over 20 years, receive awards for 2% man as a whole (10 weeks at his PPD rate) for each. For knee cases, if the employee under Section 8(e) receives 2% leg, and later reinjures that knee, if it becomes a 3% case, he gets paid 1% and the employer gets credit for 2%.

Fix the medical fee schedule. Some medical providers receive 85-90% of their bills in comp, others barely 55-60%. Other states make it more uniform using Medicare rates as a baseline and adding a surcharge that is the same across the board.

Fix Section 10 of the Act, which concerns calculation of the average weekly wage. The current form is convoluted and at times creates a windfall for an injured worker, and other times screws him. The average weekly wage is used to calculate lost time and permanency benefits, and is important. Other states have more fairer, streamlined calculations.

Remove all the hotheads who “testify” before uninformed legislators who have no idea what is going on in Workers’ Comp. in Illinois. Every time they use “fair” in their testimony, I cringe. Both sides have redefined “fair.” Bring in some individuals with technical expertise who can figure out how to reduce costs while maintaining benefits.

The system was originally designed to be “simple and summary in nature” as a tradeoff against going to circuit court and getting bogged down in rules. Over the years, the Act has become bulkier and less simple and summary. And the complaints about the system and Act as a result are getting louder.

Discuss.

posted by Rich Miller
Friday, Jun 12, 15 @ 9:26 am

Comments

I’m shocked, shocked to see thoughtful and intelligent commentary on an important subject. Thank you Louis and thanks for re-posting Rich.

Comment by Chicago Hack Friday, Jun 12, 15 @ 9:31 am
I don’t agree with Louis on much, but he gets a lot right in there, especially on his critique of the current reform ideas. I’m leery of cutting PPD benefits, though.

Comment by Arsenal Friday, Jun 12, 15 @ 9:33 am
Saw this late last night. Well done.

Comment by A guy Friday, Jun 12, 15 @ 9:34 am
Thanks for the insight into how the system works, Louis. There’s been way too much baloney thrown around in the comments lately on this topic. Great to read something from someone that knows the topic inside and out.

Comment by DuPage Dave Friday, Jun 12, 15 @ 9:34 am
This sounds very reasonable, but I have yet to see the IL General Assembly simplify anything. Every time they “reform” something, they make it more convoluted and difficult to understand, creating more unintended consequences but making new and improved opportunities to make money off those complications. Not just WC; everything.

Comment by Harry Friday, Jun 12, 15 @ 9:35 am
Louis’ understanding of the workers’ compensation is unmatched and balanced. He provides a number of suggestions that could positively benefit employers while fundamentally preserving a viable benefit for employees. However, it does beg the question what does “real reform” look like to the governor. We’ve heard the Democrats efforts characterized as “phony” and a “sham” but I’ve seen nothing from the governor that suggests what he believes should be done to address the issue.

Comment by pundent Friday, Jun 12, 15 @ 9:38 am
I hope someone from the Governor’s office and the statehouse read this commentary and try to find some common ground on this issue.

Comment by The Colossus of Roads Friday, Jun 12, 15 @ 9:38 am
Reading this, I’m not sure I see where anything is fundamentally broken with the current causation rules.

Comment by Bill White Friday, Jun 12, 15 @ 9:46 am
There also needs to be changes to the rebuttable presumption language for firefighters. In 2008, the Act was changed to require any condition which results directly or indirectly from any blood borne pathogen, lung disease, heart disease, hypertension, tuberculosis, cancer, hernia, or hearing loss resulting in any disability to be rebuttably presumed to arise out of employment. • Prior to the inclusion of this language in the Act, any of these conditions could have been covered by the Act if the employee could prove that the condition was from their work. The new language now places the burden on employers to prove that the condition did not occur on the job.

Comment by Anon Friday, Jun 12, 15 @ 9:48 am
I am also very impressed with these remarks, particularly as one who deals with WC on the margins every few years that lacks the practical knowledge/experience to discern when one side of the question (or the other) is blowing smoke on some point of contention in the debate. Again, well done.

Comment by Tired Burocrat Friday, Jun 12, 15 @ 9:49 am
Louis, well done. I don’t have the experience or knowledge to agree or disagree. However, your piece was well written and discussed the issues in a even-handed manner. It even took on some of the “problems” that have been tossed out by the business community.

It was nice to see this side of you Louis.

Comment by Norseman Friday, Jun 12, 15 @ 9:53 am
I often wonder how many of the state’s problems could be resolved if government was handed over to the reasonable people at CapitolFax for a few weeks. Louis’ comments present an opportunity for compromise and the “real reform” Rauner has been screaming about.

Comment by Tournaround Agenda Friday, Jun 12, 15 @ 9:59 am
Great analysis of the facts and not just emotional outbursts! Sounds like the causation is not the issue and workers comp claims are down 31 since 2003 and 24% in the past two years. Sounds like a “crisis” created by Rauner to help his business buddies. If you read the NPR article, Illinois is not the top or bottom and helps people keep ahold on a decent life when they lose a limb.

Comment by RunBikeSwim Friday, Jun 12, 15 @ 10:04 am
I have to agree with previous comments, very well written, The only trouble it contains too much “COMMON SENSE” especially for politicians to comprehend.

Comment by Short Bus Rider Friday, Jun 12, 15 @ 10:07 am
This was a terrific read, great work Louis.

Comment by The Captain Friday, Jun 12, 15 @ 10:19 am
A great example of someone with useful subject matter knowledge and good policy concepts. It would be great if the governor understood what he was asking for.

But I still think he does not want the facts to get in the way of the story he is telling.

Comment by siriusly Friday, Jun 12, 15 @ 10:37 am
WOW. Louis needs to be on whatever Rauner committee is looking into this. He seems to be to WC what RNUG is to public pensions…

Comment by Arizona Bob Friday, Jun 12, 15 @ 10:40 am
Thanks Louis.
You popped a whole lot of hot air balloons floating around the Dome.
Thank you.

Comment by VanillaMan Friday, Jun 12, 15 @ 10:44 am
The first thing that comp reform needs to do is to mandate that the fees for service go through the patient’s health insurance program. The purpose is to capture the discounts that all insurance programs negotiate for their plan members. Once the bills are paid the health care insurance provider is reimbursed for the discounted amounts paid by the comp carrier.

This allows one of two possible outcomes. The patient can receive more health care before the cap on expenses is reached if needed or the insurance company pay a discounted rate and saves money on their side.

When we had a medical issue that went through this kind of process, the bills were reduced by 60-80% from the billed amounts. A win for all involved.

Comment by plutocrat03 Friday, Jun 12, 15 @ 10:46 am
Wonder how Rauner will react when he sees the husband of his Workers’ Comp Commission Chairperson is off the reservation with some independent thinking?

Comment by Closing in on 60 Friday, Jun 12, 15 @ 10:50 am
As always, CapFax has a stable of master class instructors on the current topic. Thank you Louis Atsaves for this brilliant clarification.

Comment by Name Withheld Friday, Jun 12, 15 @ 10:55 am
Thank you Louis. Good presentation.

Just one follow up: How many of these ideas are in the bills offered by Durkin/Radogno or Cullerton/Madigan? Or are these new ideas for consideration?

Comment by walker Friday, Jun 12, 15 @ 10:56 am
A ProPublica study identified Illinois workers comp rate @ $2.35 / $100 of wages and a national average of $1.85. (Series of articles @ http://www.propublica.org/series/workers-compensation ). A median wage income used for Illinois bankruptcy is $47,536 (http://www.justice.gov/ust/eo/bapcpa/20131115/bci_data/median_income_table.htm ). For a company the cost of an employee at median wages might be nearing $70,000 with wages and $23,000 cost of various benefits, FICA, etc.

If IL workers comp is changed to national lavel a company saves $238 per person which also results in needing about 294 employees to save enough for one new median income job. Companies with 300 or more are not the most common. So, job growth based on workers compa reduction is likely to be small.

Small business owners might gain a few hundred to several thousand dollars. I do not know a source of number and size of small business in Illinois to do a guess at possible total impact. Who’s aware of a reasonable source?

What would those small businesses do with the savings? I doubt not much state economic impact. I’m unaware of Bruce providing any economic impact.

So why should this change be made? The only reason to me for Bruce’s demand is to cost shift risk or debilitating injuries to those least able to afford. Standard Bruce idea of harm as many others so he and his millionaire pals profit.

Comment by IL17Progressive Friday, Jun 12, 15 @ 10:59 am
I have worked in various capacities of loss prevention & work comp for 15 years. This is as concise and fair analysis of the wc issues in IL as I have ever read. It is spot on. Politics so often focuses on the outliers in this State because both sides seek a win & damage to the other. There are reasonable solutions if all will stop the games, put their big boy pants on and do their real job of leading this State

Comment by Minutiae Friday, Jun 12, 15 @ 11:01 am
(Tips cap, in deference to - Louis G Atsaves -)

Comment by Oswego Willy Friday, Jun 12, 15 @ 11:17 am
Great job, Louis. Question for you if you see this - what’s the biggest dollar savings potential for employers that doesn’t significantly harm the workers? My wild guess is this one:

==Fix the medical fee schedule. Some medical providers receive 85-90% of their bills in comp, others barely 55-60%. Other states make it more uniform using Medicare rates as a baseline and adding a surcharge that is the same across the board.==

Comment by Robert the Bruce Friday, Jun 12, 15 @ 11:20 am
A buddy of mine is a defense guy in workers comp. The big issue biz apparently has with causation is this: an accident qualifies for benefits “if it might or could be a cause” of the injury condition. If a doctor can testify that an accident might be a cause of a condition, and that the contribution from that accident is 1% of the total contribution, it becomes workers comp. So the big issue with them, right or wrong, is they then have to cover the entire condition even if 99% of it existed before the accident. Again, I dont know enough of the ins and outs like Louis, but that is my understanding of what the beef is about.

Comment by Kodachrome Friday, Jun 12, 15 @ 11:22 am
Kodachrome - Your example is a bit extreme as instances where the split is 1% vs. 99% likely don’t exist. However there is an element of pre-existing condition exposure under each and every state’s workers’ compensation system. But that’s part of the trade-off. Consider the situation where the employer is 99% responsible for the employees injury. If that happens with anyone other than your employer you would file a lawsuit and the recovery for compensatory and potentially punitive damages could dwarf what you might seen under workers’ comp. That’s part of the bargain. You can’t reap the benefits without taking some of the risk.

Comment by pundent Friday, Jun 12, 15 @ 11:29 am
@Kodachrome, if a Petitioner proves 1% is the cause of an injury, he will lose 99% of the time and receive nothing. Grasping at straws is not a winning strategy. Doctors on both sides are asked for opinions on causation “within a reasonable degree of medical and surgical certainty” similar to testimony in circuit court or social security disability cases. When an attorney has to reach to the”might or could be a cause” threshold, a good hearing officer sees red flags. The red flag is the “anything is possible” approach. At that point, the case gets higher scrutiny from the hearing officer and he/she needs to determine credibility of such an opinion.

Comment by Louis G Atsaves Friday, Jun 12, 15 @ 11:36 am
Excellent analysis. Also, while not directly dealing with Worker’s Compensation there is an analysis of the “truth in Medical Expenses Awards” in the SJ-R. http://www.sj-r.com/article/20150611/OPINION/150619847

Comment by I wonder... Friday, Jun 12, 15 @ 11:36 am
Agree for the most part about the suggested reforms. However, the medical fee schedule needs to stand as it is. It is fair and the docs already took a hair cut - why keep hitting the patient and the doctor in reform. Also, pegging it to Medicare would be bad news. First off, the fee schedule is already near usual and customary. Usual and customary probably accounts for % differences that Lou speaks about….Some providers charge more and some less and at the end of the day the fee schedule we have near usual and customary. If a doc group charges higher than usual and customary, then the bill will be reduced at a higher percent. You cannot look at contracted rates and say that those are “fair” to doctors here. First off, they are not contracted. For company doctors, I am sure they get contracted rates. Also, pegging to medicare problematic. There are the same problems with that fee schedule with codes not being reimbursed appropriately. All fee schedules have problems. Except if we move to medicare pegging and there is an issue with the rate of reimbursement that causes access issues and then you have to correct the rate at the federal level - and good luck with that. I think there is a fundamental misunderstanding about how much more work is involved for doctors to treat workers compensation patients. Want to make it like other payers? Then change the system to remove the paperwork, remove the payment delays, remove the uncertainty of ever getting paid…and then we should talk about giving the docs another haircut.

Comment by Anon Friday, Jun 12, 15 @ 11:36 am
@Robert the Bruce, fixing the medical fee schedule is a short term fix that can develop into long term savings. It would be a good start.

Comment by Louis G Atsaves Friday, Jun 12, 15 @ 11:42 am
Pundent - agreed, that is the extreme. I talked to him about what I read by Louis Atsaves last nite. He agreed with a lot of it. His causation point to me was not the percentages, but more the language of “might or could”, being a pretty easy standard, as well as only “a” cause. Again, I don’t claim to be an expert - but I think my buddy is pretty well versed in this, and he basically feels that this allows people to work the system if they are so inclined. You might be in pain daily, but not enough to go to a doctor, tweak it a little at work, and then the company buys your whole condition. Being honest, it certainly seems fair that insurance rates should come down commensurately with any benefit reductions, since it is the employers who are complaining of costs, not INs co’s

As to Anon, sounds to me like the docs still get way more in WC than any other insurance. They might have to work to provide records and information to insurers more often to keep benefits going for their patients, but otherwise it sounds like another haircut could still keep them paid well within WC.

Comment by Kodachrome Friday, Jun 12, 15 @ 11:47 am
I should know the answer to this question, but I am not certain.

Can one receive WC for an injury that was not on the job?

If anybody knows, please inform me.

Comment by Federalist Friday, Jun 12, 15 @ 11:55 am
Well said.

For me, you need one bill with 1 sentence.

Work comp insurers shall adjust premiums to match the NCCI recommendations.

The concept is you make work comp cheaper for employes, it creates jobs. This is just about screwing workers for insurance companies if we don’t start there. Take this year and get rates to reflect the prior amendments and then see if additional cuts are necessary.

In 2006 a friend of mine who made a lot of money on the comp system was very angry at the 2005 Amendments. I was confused because he was in line to start making a lot more money. He said, we are all making a good living now and no one is paying attention, we got greedy and now we are going draw attention to the system and f@#$ it all up.

Comment by the Patriot Friday, Jun 12, 15 @ 12:07 pm
I hear about a great deal of management frustration about how long WC claims take to be resolved and how difficult it is to prove fraud. The fraud in particular seems to defy regular common sense. Any ideas on how to address those management concerns?

Comment by Wondering Woman Friday, Jun 12, 15 @ 12:27 pm
Louis, my thanks for taking the time to write an excellent article. It certainly filled the gaps in my knowledge and then some.
The overblown State-by-State figures on $ per limb and similar “comparisons” have really started bugging me lately. Pro Publics for one has a huge database of med/pharm claim data that is ripe for manipulation.

Comment by Arthur Andersen Friday, Jun 12, 15 @ 1:09 pm
Louis: Fine work, well done.

Ages ago in Michigan, a guy in a basement soldering transistors into printed circuit boards was in the same WC class as the guys working on high voltage power lines (that’s true, not hyperbole btw.) How much of that is there, and could cleaning up those sorts of discrepancies help?

Comment by Skeptic Friday, Jun 12, 15 @ 2:14 pm
It all looks spot on to me

I like the idea of taking the Medicaid rate and adding a fixed or agreed to surcharge…basically set a reimbursement schedule that is fair for the doctors but fixes costs. Plus setting weeks for herniated discs, and other injuries like we do for an arm or a leg.

If you do a lot more detail in setting the number of weeks for many types of injuries there will be less to fight over and make it faster and cheaper to resolve cases. a chunk of the current expense is of course fighting over perm totals and the number of weeks its worth. Same for I think its 8a, medical expense. Set some caps on the total payout for medical based the injuries the same way you do for the loss of a limb.

Comment by Ghost Friday, Jun 12, 15 @ 2:21 pm
“As always, CapFax has a stable of master class instructors on the current topic. Thank you Louis Atsaves for this brilliant clarification.”

I second this. Thank you Louis Atsaves for this expert information. I want to make some time very soon to digest this great information, since I know practically nothing about workers compensation.

Comment by Grandson of Man Friday, Jun 12, 15 @ 3:27 pm
Louis, your even-handed and in-depth comment is much appreciated.

Comment by cover Friday, Jun 12, 15 @ 3:35 pm
-Wondering Woman-
Illinois actually has some of the toughest fraud penalties and leads the nation in efforts to root out labor fraud–the effects of the 2011 reforms.
“Illinois is second in the nation in the number of misclassified workers detected per audit, according to the state Department of Employment Security. More than 9,000 Illinois workers were identified as misclassified last year, resulting in the collection of more than $2.3 million in unreported taxes.”
http://www.mcclatchydc.com/static/features/Contract-to-cheat/New-York-Illinois-find-success-in-tackling-labor-violation.html?brand=mcd

Comment by liberal muse Friday, Jun 12, 15 @ 4:08 pm
I can just say that as far as work comp reform goes, I had a legitimate claim a few years back and became ill from a condition in our building because of a bat problem. This was in the summer months. My claim was denied and I was sick for 5 months. Then in January, they investigated the building and claimed they found no bats in the building so my claim was unsubstantial. The bats were on the 2nd floor ceiling area and they checked the 1st floor (in January). So we need work comp reform to keep them from denying claims that should be awarded. BTW: I finally recovered but was told at one point that I had 6 months to live. So I am one who does not want to hear their work comp reform bull.

Comment by Crispy Critter Friday, Jun 12, 15 @ 4:13 pm