Keefe, Campbell & Associates, LLC

Editor’s comment: As we approach the holidays, we want all of our readers to think about this simple concept—in this modern day and age, we are much more in control of our health. We just have to have the guts and the drive to take necessary steps to do something about it.

Earlier this year, we heard a brilliant commentator point out one encompassing reason Americans are so much fatter than folks from most other countries. The commentator’s point was we don’t have a chance. He pointed out every day; Americans are bombarded with ads, coupons and promotions for things like “butter-burgers,” deep-fried potato sticks and donut “holes.” These are unquestionably delicious food choices that aren’t designed to be good for you or the slightest bit healthy; they are designed to sell. One of the highest cholesterol-laden foods on this planet is otherwise healthy chicken that is pressure-cooked to crush in enormous quantities of fat and salt; it is sold at a national fast food chain very well known to every American school child.

In order to sell food, many fast food chains and grocery store food purveyors analyze and test their foods with hundreds and hundreds of focus groups and testing panels. The overriding concern of the people who employ focus groups is not to make healthy food; it is to create foods you will love, pine for, purchase and eat regularly. What happens when we eat such heavily consumer-tested food is we get obese and unhealthy. Unhealthy folks need more medical care than healthy folks. The point of the commentator mentioned above is you have to have the strength of a thousand U.S. Marines to avoid or even limit eating foods that are designed to make you crave. For the weak of heart and stomach, we truly don’t have a chance.

Voluntary Corporate Wellness Programs are a simple concept that will save both health care and workers’ comp costs

While researching other things, we note an Illinois employer started a wellness program and within two years, they feel they are experiencing a 10:1 return on investment. Robinson Engineering, a South Holland, Illinois-based municipal civil engineering firm, said most of the company’s 108 employees were excited about a wellness program. They started the program at their annual meeting in May 2007 and were really surprised with the positive reaction when they asked for volunteers. The program was implemented with help from The Horton Group, an insurance brokerage agency based in Orland Park.

Their program starts off with a health screening and a questionnaire, on which employees are asked about things such as diet and exercise. The Horton Group then works with companies to produce reports for each client. The company gets the screening data, compliant with HIPAA standards of confidentiality on things such as blood pressure, smoking and diabetes. The corporate wellness program is based on that initial survey and data.

The company didn’t expect to see a return on its investment right away, but were interested in the program for its long term benefits—both financially and for employee morale. Company representatives didn’t see any initial return on the program during the first year of implementation. But Robinson Engineering had an incentive in mind–employees have the option of participating in the wellness program, but should they choose not to participate, the company held them responsible to pay a portion of their group health care insurance costs. We caution this may cause Illinois’ aggressive work comp claimant attorneys, Commission and judiciary to later find participation is not “voluntary” making injuries occurring during the program to potentially be work-related. Regardless, Robinson Engineering kicked off the program with hosted health screenings and then decided to address the largest concern reported from employee questionnaire responses that is so common throughout America–challenges with weight loss.

When the program started in 2007, Robinson Engineering employees focused on weight management, so they kicked off their own version of The Biggest Loser. With 50 percent participation, they announced the winners at their annual holiday party and gave away prizes such as running shoes. The company also began focusing on nutritional food choices. Topics were chosen each month for “lunch-and-learns” based on themes such as weight management, healthy eating, stress reduction, first aid and CPR training.

In addition to health-related luncheons, the company began incentivizing employees to walk more as part of a program titled Virgin HealthMiles. The program provides employee health programs that pay people to get active, attracting an average of 40 percent of employees who participate in the program regularly, which helps their organization reduce medical costs and improve employee productivity and satisfaction. Each participant has a pedometer that comes with a USB cable and they can find out how many steps you take per day. Depending on how much they walk, the worker can earn up to $500 per year.

Please note this overall concept may not apply in the workers’ compensation arena; there are no co-pays or other concepts that cause employees to care at all about their health and concomitant skyrocketing WC costs. We are hoping some day, enlightened minds may bring a revolution in workers’ comp concepts so employees share responsible for increased costs due to unhealthy personal activities. To the extent Illinois employers are becoming more and more liable for conditions of life and not the more traditional “accidental injuries,” we feel our society is going to have to address rising WC costs as a joint concern of both employers and their workers.

At present, zero per cent of Robinson Engineering’s employees are in the high health care risk category, down from three percent when the program began in 2007. They report a dramatic improvement in employee cholesterol, reduced glucose levels and improvement in HDL and LDL levels.

We are suggesting all Illinois employers consider and provide such programs for their work force. If you are concerned about injuries occurring during the voluntary wellness program, send an email and we will send you our employee consent form for your review and use, as part of program implementation. We feel voluntary corporate wellness programs should be considered by all the law firms (even the Petitioner firms!!), nurse case managers, voc counselors, TPA’s/Insurance carriers and everyone who reads this Update. We promise our readers Keefe, Campbell & Associates is going to start and we will report the results to you. Some day, we hope Illinois governmental bodies start to implement it, just because it makes good common sense. We appreciate your thoughts and comments or you can post them on our blog at www.keefe-law.com/blog

Editor’s comment: We note on the IWCC website they have announced a group is going to review and possibly amend the Rules Governing Practice before the Commission. A blue-ribbon panel has been created for this purpose composed of petitioner attorneys, defense attorneys, Arbitrators and Commissioners. We view such changes with the same dread that we viewed the failed effort to “reform” the Workers’ Compensation Act in 2004 and the tortured amendments that were passed by the Illinois legislature and put into law when signed by our former Governor-awaiting-trial during the fall of 2005.

Many of the group who contributed to the 2005 WC Act Amendments are back in the fold for this effort. Once rules revisions are formalized, they will be voted upon by the Commission, as a body. The proposed rules will then proceed through the formal rulemaking process during which the public will have opportunity to review and comment.

We will report progress as information is received that is fit to print—sometimes you don’t want to watch as sauerkraut is being made! If you have thoughts and comments about needed changes to the rules, please reply or post them on our blog at www.keefe-law.com/blog and we will pass them along.

Editor’s comment: We report this to be sure everyone in HR, benefits and safety is aware of it for future preventative measures and training. Without intending to sound insensitive, we ask our readers to tell us how this amount of money can bear any semblance of common sense when one considers this young lady has no visible or permanent physical injury of any kind. Yes, we do feel bad for her and we are certain she had some psychological impact but, in our minds, she will be laughing while toting her millions in a stretch limo all the way to the bank.

We consider this a patent example of an awful fact of American life and modern personal injury litigation–something bad happened so a random corporate defendant has to pay heavily. We feel one could just as easily have blamed the phone company for providing the phones used in the scam, the surveillance camera installers who put in cameras that recorded the event but didn’t stop it or any random police department you want to pick—their “culpability” for the bad and unfortunate choices made by the employees of McDonalds during and after this event was just as strained. When the U.S. personal injury system starts to look like a poor person’s lottery, as it does here, we think reforms are needed.

At some point, starting in the mid-1990s, some moron started to call fast food restaurants and masquerade as the local police, FBI or other authority. The caller would then ask company managers to start ordering workers to do strange things, like impromptu cavity searches or jumping jacks as part of a purported criminal investigation. Numerous incidents were reported around the country. The actual bad guy(s) got away and their identities remain unknown.

What happened in one rural McDonald’s in Mt. Washington, Kentucky clearly went dramatically over the top. We cannot publish all the details because your spam blockers will not let them all through but suffice it to say the young employee and those around her underwent substantial discomfiture as part of the hoax. The corporate defendant came under attack because they were alleged to have “known” of this scam by a random goof and did not take steps felt necessary to warn or train folks not to lose their minds and all sense of decency and judgment when they received such calls.

The matter went to hearing before a jury. We are confident the legal department of McDonalds was stunned when they ruled claimant was entitled to $6.1 million in compensatory and punitive damages. The Kentucky Court of Appeals just issued a ruling which exhaustively looked at all the facts and law but still affirmed. The ruling and details are on the web at:

http://www.leagle.com/unsecure/news.do?feed=yellowbrix&storyid=1000038480

The corporate office of this major U.S. food retailer made their position crystal-clear in an official statement:

We are extremely disappointed with today’s Appellate Court decision. McDonald’s is not disputing that what happened to [Plaintiff] was wrong. However, it has been our position throughout these proceedings that she was the victim of a malicious hoax perpetrated by individuals not representing McDonald’s.

The dollar amount McDonalds owes as of November 15th is $10,900,000. As we indicate above, we were reluctant to publish this sad legal note but we want our readers to understand you need to address it as part of your training programs to avoid the chance someone pulls such a prank on your organization.

Editor’s comment: Commission veterans may remember this quiet hard-working and gentle man who was at the old Industrial Commission for a number of decades. He was a teacher to younger lawyers and honest, diligent hearing officer. Keefe, Campbell & Associates sends our deepest condolences to his family and friends.

Services will be on Monday, Nov. 30, 2009 at 12:00 noon at Weinstein’s Funerals, 111 Skokie Blvd., Wilmette, IL. His family is planning a reception after the burial, but those plans are not finalized yet. Anyone wishing to speak should email Norm’s daughter Iris at: iberger2@verizon.net

Donations in Norm’s memory can be made to the Community Hospice of Albany County, 445 N. Karner Rd., NY, 12205. We thank the nice reader who provided this information for the WC community.

Editor’s comment: We remember a great OccHealth doctor asking us this year if one of these Illinois government organizations would like his expert services because he could assist them to save millions in WC costs. We told him if he donates enough money to the proper politician(s), some day they might let him do a little work. He then said, “Don’t they care about WC costs?” We again pointed out they sort of care about costs, if the right amount of money is donated for the right amount of time to the right Illinois or local politician. We also pointed out that, if he got any work, the doctor couldn’t question any claim by “somebody’s-brother’s-cousin’s-uncle’s-kid” or he would be shut out of all work. He continues to remain perplexed about this obvious government incongruity. Welcome to Illinois, doc.

We consider the WC programs of the State of Illinois, County of Cook and City of Chicago to be shamefully managed and they clearly don’t have any true risk-management guidance—politics abound at every level of the WC process. Every now and then, the worst cases hit the papers and TV; but most of the time; we all grin and bear it. In other words, the State of Illinois, County of Cook and City of Chicago continue to run wasteful and comically managed WC programs. No private organization would ever be in business and manage this increasing and business-busting cost so poorly. We also point out these organizations combine to have over 100,000 workers and the mismanagement of their WC programs permeates our Commission along with Illinois business and society. The main problem is the voters don’t truly understand either workers’ comp principles or what a well-run workers’ comp program looks like. Illinois WC at these government agencies clearly isn’t “ready for reform” just yet.

Several news sources report this year, the County of Cook has paid more than $7.3 million in worker’s compensation claims. Last week, county commissioners approved nearly $300,000 in claims. The payments apparently included:

• More than $60,000 to a highway worker for injuries suffered in 1996 and 1998;
• Nearly $70,000 to an autopsy technician for back injuries he sustained lifting a 300-pound body from a dumpster in 2006;
• About $14,000 to a sheriff’s custodian for injuries sustained in 1997 and 1998 – both of which occurred while she “was reaching around to pick up a piece of toilet paper and twisted her back”;
• More than $2,400 to a clerk who got tendonitis from “extensive writing”;
• And a $51,539.56 claim or a correctional officer who injured his elbow, which led to kidney malfunction.

We are happy to hear County Commissioner Bridget Gainer says there’s a flaw in the County’s worker’s comp process, which has little oversight and few opportunities for the board members to investigate workers’ claims. We point out the State of Illinois, County of Cook and City of Chicago do a generally horrible job of managing workers’ compensation losses. They generally fail at

• Inculcating safety protocols to avoid injuries; and
• Aggressively investigating new claims with a goal of authentication and documentation; and
• Having jobs analyzed to maximize ergonomic developments; and
• Aggressively implementing light work or return to work programs; and
• Wasting millions letting people stay off on full pay or TTD when they would and should otherwise work light or modified duty; and
• Refusing to use SIU or surveillance because they might catch a politician’s kid or scion misstating their disability; and
• Allowing more than one thousand total and permanent claimants to get lifetime workers’ compensation benefits and COLA increases without any offset for the lifetime pensions paid for by the taxpayers—such individuals get substantially more money on workers’ compensation and their pensions than they received while working!!!!

The claimant attorneys who regularly represent injured employees of these governmental organization are the elite of the workers’ comp bar—most of them are very, very well-to-do. We laugh to hear Commissioner Gainer tell the County Board’s Finance Committee the recent settlement approvals seem to be “an excessive amount of dollars for ridiculous claims. How do you pay someone $2,400 for excessive writing?” Gainer, a Democrat who made a career in the insurance business before becoming a commissioner earlier this year, believes there is a need to reform the way worker’s compensation is dealt with. “The people that review worker’s comp at the state, it’s very similar to the arbitration boards we go to in collective bargaining. It’s very pro-worker. That sounds great, except who’s paying for all these payments? It’s the taxpayer,” says Gainer, whose call for reform was backed by Commissioner Timothy Schneider, a Republican. A better system for measuring claims could result in more money for vital services like health care and safety, says Gainer. And with the partial repeal of the county’s sales tax, commissioners will be looking for ways to plug budget holes in 2011.

“It gave us fair warning,” Gainer says. “Liabilities like workers’ comp, litigation payout, pension – they are huge liabilities for these public entities and because they drip and drip and bleed out slowly, you don’t see them as this crazy thing. “The world is divided into solvable and unsolvable problems. There have to be portions of this that are on the solvable side of the problem.”

We are happy to send this article to Ms. Gainer and Mr. Schneider and seek their further input into reforming this badly flawed system. Such reforms may start next year after the state-wide elections. We appreciate your thoughts and comments.

Editor’s comment: A few weeks ago, a client asked us to review some Illinois lump sum settlement contract language he was not familiar with. The claimant’s attorney in a workers compensation claim was reserving all Section 16 rights under the Act. When asked, the attorney explained that if for some reason, the insurer settled the matter and then waited six months or a year before payment, that without reserving their Section 16 rights, they would be unable to file for penalties and fees on late payment. With due respect to this attorney, and we believe they are technically correct, the Act offers another vehicle for achieving the same result that does not require the reserving of rights. We also wonder how many “rights” one can reserve in a settlement that still closes the case.

The final paragraph of Section 16 states as follows:

Whenever the Commission shall find that the employer, his or her agent, service company or insurance carrier has been guilty of delay or unfairness towards an employee in the adjustment, settlement or payment of benefits due such employee within the purview of the provisions of paragraph (c) of Section 4 of this Act; or has been guilty of unreasonable or vexatious delay, intentional under‑payment of compensation benefits, or has engaged in frivolous defenses which do not present a real controversy, within the purview of the provisions of paragraph (k) of Section 19 of this Act, the Commission may assess all or any part of the attorney’s fees and costs against such employer and his or her insurance carrier. (emphasis added)

The PA in our scenario above indicated that without reserving the Section 16 rights, they would have no way of obtaining, or even a valid way of filing for, such penalties. While we agree that Section 16 allows for such, it is not the only way to achieve this goal, and also not the most effective way. That vehicle is Section 19(g), which states in relevant part:

Except in the case of a claim against the State of Illinois, either party may present a certified copy of the award of the Arbitrator, or a certified copy of the decision of the Commission when the same has become final, when no proceedings for review are pending, providing for the payment of compensation according to this Act, to the Circuit Court of the county in which such accident occurred or either of the parties are residents, whereupon the court shall enter a judgment in accordance therewith. In a case where the employer refuses to pay compensation according to such final award or such final decision upon which such judgment is entered the court shall in entering judgment thereon, tax as costs against him the reasonable costs and attorney fees in the arbitration proceedings and in the court entering the judgment for the person in whose favor the judgment is entered, which judgment and costs taxed as therein provided shall, until and unless set aside, have the same effect as though duly entered in an action duly tried and determined by the court, and shall with like effect, be entered and docketed. (emphasis added)

Essentially Section 19(g) allows a duly entered and approved settlement contract, which has the same legal status as an Arbitrator’s award, to be enforced by the Circuit Court. In cases of late payment, the Circuit Court shall assess fees and costs; it does not say they may assess, it says they shall (read: must) assess fees and costs. Essentially this is a vehicle that allows for fees and costs without having to litigate the issue of whether to assess them at multiple levels and over a longer timeframe.

If one had to proceed through Section 16, it would have to first be filed with the Commission, then could have the potential of either a denial of fees and costs, or possible appeal of such an order to the Circuit Courts. Section 19(g) is a direct action in the Circuit Court with a much shorter timeframe for judgment, and an easier potential for fees and costs to be assessed.

This article was written by Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com. If you have any questions or comments, please post them in response to this article on our blog. www.keefe-law.com/blog

Editor’s comment: This article applies to risk managers, TPAs and insurers across the country. We have received a number of inquiries recently about the required language in your medical releases. If you aren’t aware, U.S. law changed way back in 1996. All current medical releases needed to be updated to comply—a medical release that doesn’t comply with applicable federal law puts you at risk for litigation with your friends in the federal government.

We recently reviewed a medical release from a major U.S. TPA that is very well-known in this industry—their release clearly did not comply with federal law and they are unquestionably violating the law in all of their claims involving use of this release. We have told them it has to be updated. And we just reviewed a medical release from a major Illinois employer and immediately noted a number of deficiencies. We are pretty confident no one in these organizations took the steps necessary to comply with the law more than a decade ago. We have made detailed recommendation on how they should do so and hope they catch up before the Federales catch up first.

HIPAA (it is not HIPPA) is the Health Insurance Portability and Accountability Act. It was signed into law by President Bill Clinton on August 21, 1996. Most healthcare insurance companies and providers were to adhere to the HIPAA regulation guidelines by October 2002. The HIPAA law presents a multi-step approach geared to improve the United States’ health and WC insurance system. One approach of the HIPAA regulations was to protect patient privacy. This provision is in Title IV which defines rules for protection of patient information.

All healthcare providers, health organizations, and government health plans that use, store, maintain, or transmit patient health care information are required to comply with the privacy regulations of HIPAA. We also feel all Illinois and U.S. employers need to create a “HIPAA circle” of the managers who are able to receive, consider and disseminate private health information. To protect your organization, you should consider creating such a “circle” if you haven’t already done so. If you need guidance or counsel on how to set up a HIPAA circle in your organization, send a reply.

One easy step in analyzing all medical releases is to look and see whether the medical release provides the power of revocation. Older releases don’t have such language. Both of the organizations mentioned above presented medical releases that did not allow revocation. When we see a release that doesn’t allow for revocation, we then assume most of the other HIPAA requirements aren’t present.

Here are the HIPAA requirements right out of the applicable Federal Code:

A valid HIPAA authorization under this section must contain at least the following elements:

(i) A description of the information to be used or disclosed that identifies the information in a specific and meaningful fashion.

(ii) The name or other specific identification of the person(s), or class of persons, authorized to make the requested use or disclosure.

(iii) The name or other specific identification of the person(s), or class of persons, to whom the covered entity may make the requested use or disclosure.

(iv) A description of each purpose of the requested use or disclosure. The statement “at the request of the individual” is a sufficient description of the purpose when an individual initiates the authorization and does not, or elects not to, provide a statement of the purpose.

(v) An expiration date or an expiration event that relates to the individual or the purpose of the use or disclosure.

(vi) Signature of the individual and date. If the authorization is signed by a personal representative of the individual, a description of such representative’s authority to act for the individual must also be provided.

Required statements In addition to the core elements, the authorization must contain statements adequate to place the individual on notice of all of the following:

(i) The individual’s right to revoke the authorization in writing, and either:

(A) The exceptions to the right to revoke and a description of how the individual may revoke the authorization; or

(B) To the extent that the information in paragraph (c)(2)(i)(A) of this section is included in the notice required by § 164.520, a reference to the covered entity’s notice.

(ii) The ability or inability to condition treatment, payment, enrollment or eligibility for benefits on the authorization, by stating either:

(A) The covered entity may not condition treatment, payment, enrollment or eligibility for benefits on whether the individual signs the authorization when the prohibition on conditioning of authorizations In paragraph (b)(4) of this section applies; or

(B) The consequences to the individual of a refusal to sign the authorization when, in accordance with paragraph (b)(4) of this section, the covered entity can condition treatment, enrollment in the health plan, or eligibility for benefits on failure to obtain such authorization.

(iii) The potential for information disclosed pursuant to the authorization to be subject to redisclosure by the recipient and no longer be protected by this rule.

Plain language requirement The authorization must be written in plain language. No one knows whether “plain language” relates to folks who have law degrees or folks whose highest grade level was junior high in rural Appalachia.

Copy to the individual If a covered entity seeks an authorization from an individual for a use or disclosure of protected health information, the covered entity must provide the individual with a copy of the signed authorization.

If you need us to review your current medical release, we are happy to do so without charge—send it along. We appreciate your thoughts and/or comments or simply post them on our award-winning blog run by our Blogmaster, Arik D. Hetue at www.keefe-law.com/blog

Editor’s comment: As many business observers are aware, beginning in 2005, Illinois has a wildly hefty penalty for any company that does business in Illinois and doesn’t have workers’ compensation insurance. The minimum penalty is $10,000 and the fines can be $500 for every day a company is in operation without coverage. If you do the math, a company that doesn’t have coverage for a year can readily be fined enough money to force it to be quickly disbanded or bankrupted. In this rotten economy, hundreds of WC insurance coverage complaints are now pending against businesses all over the state.

In the situation of small or start-up businesses, the cost of workers’ compensation coverage can be a determining factor in corporate viability, representing a hefty anti-business penalty as the Illinois workers’ compensation system now imposes can be a death knell. As we tell all of our readers and everyone who will listen, Illinois WC needs to be made more business-friendly if business and jobs are going to survive and grow in this state. We are not only concerned about the anti-business penalties, we are deeply concerned about the spiraling cost that gave rise to them—Illinois’ workers’ compensation insurance premiums that have to be among the highest in the U.S.

We were advised these punitive anti-business insurance coverage penalties made it to the desk of an unknown legislator. The legislator probably found out what we have known since 2005—any Illinois business that made even an innocent mistake on insurance coverage can still be locked into a potential bind from which they may never recover. Some of the folks at the Commission don’t care if they “kill” such businesses—the mindset is force WC insurance coverage or get out. Obviously, the legislator may have wanted to create some quiet leeway or gap in the rules for the “right” people. We consider it a shame he or she didn’t get to the root of the problem—wildly high WC premiums. We will leave that issue for a later date.

Our sources indicate the legislator supposedly put in a call to the secret-powers-that-be who run the Illinois Commission. The word went out to the Commission staff involved to cut the lack-of-coverage penalties to more bearable levels in selected situations. The internal grapevine at the Commission advised us the former Manager of Insurance Compliance responded to the call to cut the penalties with a simple response—the statute doesn’t allow it. We have been advised this former Manager who is a licensed Illinois attorney and was a former Assistant States’ Attorney in Cook County clearly indicated she swore an oath to enforce the laws and Illinois Constitution and would continue to follow that oath. We are advised she was then told to do what she was being asked or hit the highway. Welcome to Illinois!

Commission observers can now look at the IWCC’s website and note someone has been quietly appointed a new Acting Manager of Insurance Compliance in our state. We again ask all of our readers if this is a solid way to run the joint—should things like this be kept on the QT? Should there be open meetings where the so-called “Commission” considers and votes on such issues and policies? Does everyone at the IWCC owe their jobs to the secret-powers-that-be who wield all-encompassing political power?

Our answer is consider reform, Illinois. The next statewide election is 351 days away, folks. If we are going to do something, it is going to happen between now and then. We will keep you posted if we see any candidate on either side of the political parties who is willing to work hard to open up the political labyrinth that is the Commission and bring Illinois back into the middle of the fold on WC costs—we consider it a gargantuan task. Please let us know if you have thoughts and comments on the process. Please also do not hesitate to put such thoughts on our award-winning blog at www.keefe-law.com/blog

Editor’s comment: KC&A would like to take this opportunity to highlight some of the most important cases in Illinois workers’ compensation history. This is the final installment in a three-part series.

For those industry insiders who know Illinois workers’ compensation law like the back of their hands, this may be a bit of a review, but we recently updated our “Noteworthy Cases” spreadsheet and thought we would take this opportunity to point out some of the cases that have impacted Illinois over the years.

National Manufacturing v. Industrial Commission – No penalties/fees can be awarded on undetermined amounts of permanency. Many defense observers also feel this ruling mandates presentation of unpaid medical bills and supporting documentation in advance of the hearing to allow a claim for penalties and fees. *** Please note *** as outlined in the article above, in claims involving amputations, Nobile v. Midwest Wrecking Co. and Kinnaird v. Greene Welding & Hardware hold the employer/insurance carrier responsible for immediate payment on statutory loss when it is uncontested.

Navistar International v. Industrial Commission – Employer was only entitled to a credit for net amount of compensation “after taxes” claimant received under employer’s group health or STD/LTD plan rather than for the gross amount of benefits paid to claimant—note IRS regulations and forms allow such payments to be nontaxable and we argue full credit should be provided in such an instance.

Pathfinder Co. v. Industrial Commission – A sudden, unforeseen and shocking psychological injury, even without physical injury, is compensable under the Illinois WC Act. Illinois remains reluctant to adopt what is sometimes called “California” or “mental-mental” stress claims. It isn’t considered an “accidental injury” in Illinois if your boss is mean to you or you have to work hard to make a living.

R.D. Masonry, Inc. v. Industrial Commission – An injured worker must submit to a section 12 IME even if all benefits are fully disputed and aren’t being paid. Mileage expense has to be send with the notice of the IME. Refusal will be sufficient reason for non-payment.

Saunders v. Industrial Commission – Claimant denied benefits as injury did not arise out of employment, since claimant was getting off a forklift he was riding as a passenger in violation of enforced safety rule and was going to lunch and not working when injured.

Sisbro v. Industrial Commission, Boyd Electric v. Dee, Twice Over Clean v. Industrial Commission – Factual findings on causal connection issues are “within manifest weight of the evidence” in derogation of prior legal rulings or defenses relating to accident disputes for various medical conditions personal to claimant. Note: decisions on facts are supposedly limited to facts of that case but continued legal trend clearly indicates current reviewing courts may not follow traditional legal principles to overrule IWCC.

Sylvester, Ronald v. Industrial Commission – Determined the “average weekly wage” in Section 10 may be the “average hourly wage” by calculating the hourly rate x 40 x 52. Of the three possible methods to determine the wage, this is clearly the most radically pro-employee with the Appellate Court agreeing the interpretation may result in a “windfall” where the injured worker may get much more money disabled than they actually earned while working.

If you have any questions or comments, please forward them to our resident Blog Administrator, Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com.

Editor’s comment: We were recently informed of what appears to be an unheralded shift in policy at the Commission concerning payment on statutory loss claims. Where the 1996 ruling in Modern Drop Forge Corp. v. Industrial Commission previously held Illinois employers/insurance carriers must institute payment of weekly PPD after claimant reaches MMI and the end of TTD, a couple of recent cases make it clear there is now a potential for penalties/fees when weekly PPD payment is not “immediate” upon stabilization in the post-injury setting. Yes, the word “immediate” concerns us.

As you can imagine, it’s a routine question we are faced with as workers compensation defense attorneys: “If Peter Petitioner cut off his small finger and half of his ring finger in an industrial accident, when do I have to start to pay the statutory PPD loss?” Up until earlier this year, we were operating under the holding outlined above, and advising our clients who were dealing with amputation losses:

• Medical care was to be provided;
• TTD was to be paid during recovery;
• Once Petitioner was at MMI and TTD discontinued, the weekly PPD checks should start to issue for the statutory loss.

Turns out that is not a correct statement of how they are interpreting Illinois law at the Commission and reviewing courts these days. We have to admit to our readers and clients we were arguably wrong to the extent we were following the “plain English language” version of the Act. Please read this article carefully and implement it in all your Illinois amputation claims. Please don’t hesitate to contact us about it at any time.

Illinois “mega-rates”—we have very high weekly amputation PPD minimums and maximums

Along with concerns about when to start paying such claims, we also caution everyone there is a very high PPD minimum and maximum in Illinois for amputation losses. The current minimum is $466.13. You don’t hit the amputation minimum until claimant makes more than $776.88 per week or a little over $40,000 per year—anyone who makes less and suffers an amputation will receive the minimum weekly amount.

The maximum amputation rate is 60% of the average weekly wage to the TTD and not PPD maximum. The current Illinois TTD maximum is $1,243.00 per week. Someone who makes $2,017.67 or more per week will receive PPD due to an amputation loss at that rate–$1,243.00 per week. The amputation value for 100% LOU of one arm for such an individual in Illinois pays a whopping $314,479.00.

We also caution these “mega-rates” only currently apply to the body member values for the amputated member—we have not seen the Commission or reviewing courts apply the much higher rates if claimant suffers an amputation and also injures other body parts. For example, if a worker making $200 per week loses the right little finger and also breaks their left arm, you would owe the amputation rate of $466.13 for the right little finger but would owe PPD for the left arm at $200. Due to the disparity in rates, veteran claims handlers will advise an amputated little finger can be more valuable to the claimant than a badly broken arm.

We also had one observer advise defining an “amputation” loss is sometimes difficult to do, particularly in the realm of modern science. It is our view an amputation occurs when there is bone loss only—you need to check x-rays to confirm there actually is bone loss versus all other possible tissues of the human body. We have never heard of any other type of “amputation” being given the special treatment it is given in this state.

Going on the presumption “amputation” means bone loss, questions still arise

• Is it an amputation loss if the finger/toe or other member is surgically reattached?
• Is it an amputation loss if the middle section of a bone is removed/trimmed and grows back?
• If the surgeon can graft bone back into the arm or leg to get it to regrow and recover, it is still an amputation?
• Is a total knee or hip replacement an “amputation” of the leg?

We have no idea what the Commission would do with such questions and will report to you if we get a definitive answer now or in the future. We hope there is no penalty and fee exposure until such questions are clearly answered.

Understanding how the Commission and reviewing courts are now ruling in amputation losses

Going back to “when to pay” weekly amputation benefits, we point out Section 8(e) of the Act specifically states a Petitioner will first receive medical care under Section 8(a). At the same time, they should receive TTD under Section 8(b). Our “plain English version” of the Act then says they “shall receive in addition thereto compensation for a further period for the specific loss herein mentioned.” Our interpretation of that legislative statement, specifically the phrase “for a further period” necessarily means the duty to pay weekly PPD should not begin until “the further period” after weekly TTD ends. Well, as we have told our readers and law students over and over, there is no legislative history to the Illinois WC Act and the administrators and courts sometimes create the rules as they go along. Whether you agree with them or not, you have to follow them, in this instance to avoid penalties and fees.

We recently ran across a pair of IWCC cases which state differently – Bobby D. Kinnaird, Jr. v. Greene Welding & Hardware, decided by the Commission in July 2008 and Lary Nobile v. Midwest Wrecking Co., decided by the Commission in July 2009. According to these two cases, payment of weekly PPD for an amputation is due “immediately” upon the worker suffering the amputation, MMI or no, when no dispute exists as to the compensability of the accident or the amputation itself. There is no waiting period or other possible delay contemplated—if you read the cases, they mean you owe benefits the day of injury until the full statutory amount is paid in full.

Modern Drop Forge Corp. v. Industrial Commission was the old standard we judged this issue by, but it is not directly on point – there the issue was Petitioner’s potential wage differential claim, Respondent argued since it did not know what remedy Petitioner would select, it had a reasonable delay in starting payment. The court in Modern Drop Forge ruled the delay was not reasonable as the statutory loss could have been applied as a credit on any wage loss settlement or award. Penalties/fees were applied in that case because Respondent waited three years to offer any payment.

Since Section 8(e) of the Act specifically states a Petitioner will receive TTD and then “shall receive in addition thereto compensation for a further period for the specific loss herein mentioned” – our interpretation of that statement, specifically the phrase “for a further period” necessarily meant PPD did not begin until TTD ends. As such, combined with our interpretation of Modern Drop Forge, exposure for penalties/fees in an amputation loss would begin to run the minute a claimant was at MMI from a work injury, as that is when PPD should begin. We are no longer providing such advice.

In Kinnaird, Respondent, similar to what we have outlined herein, did not pay the PPD portion until Petitioner was at MMI, even though Petitioner had returned to light duty work for some time. The Kinnaird decision goes so far as to state “Respondent’s argument that Petitioner had not reached maximum medical improvement, and, consequently, payment was not yet due, is without merit. There are no cases cited in support of such an argument and such requirement is not found within the language of the Act to indicate such a legislative intent. Respondent provided no acceptable explanation to show any reasonable belief to justify the delay in payment for this statutory loss injury.”  In Nobile, the Respondent argued since it was undetermined whether Petitioner lost 50% or 100% of the finger, penalties should not have applied on the late payment. There, the Commission cited Kinnaird and held penalties applicable to the 50% of the finger not at issue.

After our review, it is our reasoned legal opinion you should start paying weekly amputation at the correct amputation rate as soon as you have confirmed there is an amputation loss in a compensable event. Such payments should begin essentially on the day of the injury if you want to be sure to avoid penalties/fees. We hope a reasonable period of time would be provided to the claims handler beyond the day of injury, say for up to a month, in order to set up a file and issue the first check for whatever had accrued. We do note existing IWCC case law states 60 days to start such weekly payments is too long, and you may get hit with penalties and fees if you wait that long. As is the case in any litigation – if you are disputing the loss, please consult with defense counsel and document your files accordingly. In amputation losses, you need to have clear, convincing and reliable evidence to avoid the additional exposures that come with serious and unquestioned injuries.

This article was researched and written by Arik D. Hetue, J.D. If you have thoughts and comments, please send a reply to ahetue@keefe-law.com, or post them later today on our award-winning blog at www.keefe-law.com/blog.