Keefe, Campbell & Associates, LLC

Editor’s comment: In our view, Illinois is unquestionably the worst managed of all fifty of the United States. In beautiful Cook County, we clearly have the highest sales tax of all sales taxes in the country. Our local real estate and state income taxes are already staggering and certain to spike, as government spending spirals.

Despite record-level tax loads next year, the State of Illinois is expected to have a budget deficit equivalent to 20% of the approximately $60 billion dollar budget. Illinois will owe $12,000,000,000.00 that we don’t have and won’t collect in taxes or fees. Right now, about $5 billion in state bills remain unpaid and are well overdue. Whoever gets the Governor’s job is going to have a herculean task in front of them. Assume it may be almost impossible for that person to do what needs to be done and remain popular to anyone but his dog.

Over the last fifty years, Illinois voters have shown abysmally bad judgment when voting. We elected four Governors who went to jail for one thing or another. One former Governor who is in jail right now, admitted to some of the blame for not properly licensing truckers and had a trucker who never got a real CDL improperly tie down an angle iron causing it to fly under a minivan full of kids—in the resulting fire, a number of little children were tragically burned to death.

The fifth potential felon to be elected by Illinois voters to our Governor’s mansion is currently out on bond and continues to insist on making a complete fool of himself in the media. This past week, we read the new indictment filed by the U.S. Attorney for the Northern District of Illinois—the purpose of the modified indictment was to avoid a U.S. Supreme Court ruling that may technically end some of the federal laws this former Governor was charged with and supplanted them with new charges of bribery and extortion. If you read the new indictment online, you may note the worst of his federal charges clearly have to be the allegations he sought to extort money from a children’s hospital that saves the lives of hundreds of little babies every year.

The recent state primary election has to be the stuff of a Saturday Night Live® comedy script. It is our understanding the Democratic Party candidate chosen for Lieutenant Governor admitted to scandal after scandal in his past. His background and training for the political post was being a successful pawnbroker and having several million to invest in his campaign. It is almost impossible to imagine the voters had done any research on him and simply liked his name. He has now withdrawn and isn’t supposed to recover the millions he spent to get the nod.

We also strongly support merit-selection of judges and justices of the reviewing courts and not leave that process to apathetic, disinterested and confused voters. Elections and voting for judges is tantamount to buying judicial opinions for those who understand our political structure. It is comical to consider our Illinois Supreme Court waited until two days after the primary and struck down the medical malpractice caps designed to keep doctors in our state. If you regularly read this Update, you understand it is our reasoned view the Illinois Trial Lawyers Ass’n strongly supports the candidates for the Supreme Court who may concomitantly support the policies and goals of ITLA. Right now, ITLA doesn’t want malpractice caps and, for the third time, they got them knocked out by our highest Court. Please assume all neurosurgeons south of Springfield will again move to Missouri. This may result in no one being able to treat a closed head injury in the bottom-half of Illinois—all such patients will all be med-evac’d to St. Louis or Terre Haute.

The only way the Illinois State Medical Ass’n can trump ITLA is to have Illinois doctors start to regularly pony up more cash to get new justices who might find malpractice caps to be constitutional. We don’t feel that is the way judicial rulings should occur but, as a wise man once said, “you can’t take the politics out of politics.” We can if we would go to merit selection and de-politicize the selection of judges and justices.

Going back to government, it is clear to us that we need a city manager-type of government at all levels. If you need more information on how it works, send a reply. We truly feel Illinois would be much better off with professional managers who have no stake in raising money as part of the government decision-making process. And we truly feel the Governor and legislature should simply provide direction and set policy for the professional managers. We feel politicians who are mostly lawyers can’t and shouldn’t try to run budgets in the range of $60 billion dollars.

The reasons we don’t feel voters can ever do a solid job is patently clear in several spheres:

No one is voting and apathy is at an all time high.

Voters are basically giving up the antique concept—less than 1 in 5 eligible voters voted in this month’s primary;

The folks who are voting and simply going by what they see and hear with very little knowledgeable research;

With all the monster input of the Internet Age, it is truly demanding to have to research literally hundreds of legislative and judicial candidates and concomitant issues.

How does workers’ comp point in this direction? Here are just a couple of the anomalies.

First, Doug Whitley, the president of the Illinois State Chamber and one of the sharpest folks in our state wrote a brilliant analysis of how Illinois can dig out of the monster budget hole we have put ourselves in. One of his biggest issues is the wildly generous state pensions that wait for all state workers at the end of any reasonable tenure in government. What Doug may not know is workers’ comp provides hundreds of retired state workers with what is effectively a “double-pension!!”

If an Illinois state worker is adjudicated totally and permanently disabled or entitled to wage loss differential benefits and also gets an Illinois state pension, they get to keep both without any offset. The current cost of this benefit to eligible claimants is well into the millions. If you don’t understand what this means, state workers who qualify for both receive more money from the two pensions than they could have possibly received while working—the state pension is about 60% of the highest wage at the end of their career. The combined total and permanent disability award is 66-2/3s of their average weekly wage on a tax-free basis for life! The Workers’ Compensation Commission is now rabidly focused on insuring such workers always get COLA increases. In total, such workers receive about 123-2/3% of their highest income while employed by the state. All of the money comes from Illinois taxpayers. All Illinois would have to do to end this craziness is input an offset so state workers don’t get both. We are confident it will be a long time before anyone even understands this largesse, much less acts to end it.

Second, another facet of Illinois State, Cook County and City of Chicago government is all three governments run workers’ comp programs that are routinely penalized and/or claimant attorneys are awarded their attorney’s fees for bad or clearly incompetent management of workers’ compensation benefits by the applicable government claims handlers. We consider this a scandal which remains under the radar of the various news media—it simply isn’t a racy enough topic but try to imagine how nutty and incongruous it is for an Illinois arbitrator who works for the state issuing an award penalizing a different state agency for their incompetence. All of the money comes from taxpayers; all of the additional benefits go to injured state workers. We truly feel workers’ compensation claims and legal handling of all state, county and local government bodies should be competitively outsourced for bid and the parties getting the work have to be responsible to the voters for their mistakes. Our only problem is nothing in Illinois politics is every competitively bid—someone’s-brother’s-cousin’s-uncle always seems to get the nod.

Third, there is another anomaly that would make any business or claims manager laugh—the City of Chicago and State of Illinois retain outside defense counsels to represent them in the defense of some of their workers’ comp claims. We assert no one on the planet can tell an innocent bystander how to get picked to represent the City of Chicago in handling such claims—we have asked both major Chicago newspapers to investigate and they both gave up. We are told there is a fat guy who is the gatekeeper for a well-known Chicago alderman. If you start to pony up lots of cash to the alderman, you may be considered for the work in a couple of years. There are no guarantees.

On the state side, there is a state medical institution that outsources their WC defense work. The law firm that gets the work in northern Illinois has one defense client—they are a very successful Plaintiff personal injury firm. The partner who gets the work had a relative, an uncle or father-in-law in the right office in Illinois state government. When that relative recently left state government, we made inquiries to see if the work might be coming up for bid. We were told there had to be an RFP and it would be considered to be let in 2012 or 2013. Sure. We have never seen a prior RFP for such work and have no idea what magical event might occur for the work to again become a subject of open bidding.

All in all, we truly feel there needs to be substantial changes at all levels of government in this state. Gosh only knows if we have the guts and the brains to do so. Please let us know your thoughts or post them on our award-winning blog.

Editor’s comment: While looking up other things, we note a recent poll found the inflation rate for workers’ compensation drug costs, which had been slowing, has now increased 7.5 percent, driven upward by overuse of medication. Madison, Connecticut-based Health Strategy Associates’ (HSA) announced their findings after their Sixth Annual Survey of Prescription Drug Management in Workers’ Compensation. The firm said the increase follows five years of lower drug costs documented in previous surveys.

We also recently heard any number of claimant attorneys at the Illinois Workers Compensation Commission extolling how awful utilization review was because of their feeling such issues should be handled by the Commission. We want to advise them and anyone else who is listening, the Commission cannot possibly undertake to actually provide UR in an effective way. We feel it is almost an apples to oranges comparison. There are a number of reasons but here are just a few:

· The Arbitrators and Commissioners are lawyers and not doctors! We are unaware of any administrator with formal medical training;

· Most workers’ compensation claims aren’t litigated—the vast majority of utilization review implementation would be on non-litigated claims;

· UR has to occur on-demand when crucial medical care is needed; in contrast, it takes months or years to get a claim heard at the Commission.

Going back to rising drug costs, workers’ comp payers said the primary cost driver was over-utilization, citing such specific issues as the overuse of pain medications and physician prescribing patterns. To combat inflation, payers are increasing investments in analytics and moving towards step therapy and stronger clinical management of pharmacy. Concerns cited were per-unit cost increases, the predominance of single-source brands and the rebranding of the pain medication Oxycontin.

HSA said some poll respondents saw significant decreases in WC drug costs with four participants reporting drops of nine percent or more from their 2007 costs. Unlike previous years, drug cost inflation trended lower at smaller payers than their larger competitors.

For the fourth consecutive year, the survey was sponsored by Cypress Care, a national workers’ compensation pharmacy benefits manager, and its successor organization, Healthcare Solutions, Inc. Decision makers and operations staff from eighteen WC insurance carriers and third party administrators participated. Respondents’ 2008 drug expenses ranged from $1.2 million each to $148 million; Respondents’ cumulative drug spending totaled $810 million, 19.3 percent of the total workers’ comp drug spend.

A copy of the survey results will be available online after Jan. 15 at info@healthstrategyassoc.com. Please don’t hesitate to send your thoughts and comments.

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 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: From our review, it would appear lawsuit lenders may be funding allegedly work-related surgeries in central Illinois. We are learning more and more about this interesting medical/surgical situation. A hand/arm surgeon appears to be diagnosing “repetitive trauma” conditions and then doing numerous arm, elbow, wrist and hand surgeries on workers’ compensation claimants. We understand the surgeon is doing bilateral CTS releases, he also does repeat bilateral CTS releases. In our experience, most hand surgeons do not repeat or perform revision CTS releases. For example, take a look on the web at: http://content.karger.com/produktedb/produkte.asp?typ=fulltext&file=000167875

Our research further indicates this hand/arm surgeon is joining with a lawsuit lender and is clearly mining what we have called the “Tunnels of Illinois” by doing not only bilateral CTS releases; the surgeon also combines that type of surgery with bilateral cubital tunnel releases. In some patients, this surgeon does the “Big Six” by doing six surgeries on the same claimant, sometimes based on subjective complaints alone. The surgeon does both carpal tunnels, both cubital tunnels and both shoulders, sometimes on patients with minimal, moderate or non-existent EMG/NCV findings. As we have advised in the past, we feel the incidence and prevalence of cubital tunnel surgeries in Illinois workers’ compensation vastly outpaces the incidence of this rare surgery anywhere else on the planet—the reason for the high level of cubital tunnel surgery is the reward. Most folks currently receive $15K-$50,000 in permanency for what is truly a minor surgical revision of the elbow(s)—while that is a lot of money anywhere, it is a pile of gold in depressed central Illinois.

In the vast majority of patients we are aware of, this surgeon has not recommended any pre-surgical conservative care for any of them. Therefore, it remains unknown whether conservative care could have alleviated the symptoms. We understand these surgeries are being financed by what we feel is an unusual financial/medical practice of this hand/arm surgeon selling “accounts receivable” to the subsidiary of a lawsuit lending company named MedFinance for 48.5% of the applicable CPT code in the Illinois Medical Fee Schedule. MedFinance is on the web at http://www.medfinance.us/index.asp.

The “accounts receivable” sale occurs either before or immediately after surgery is performed to insure the surgeon is paid the 48.5% of the Medical Fee Schedule amount immediately. The surgeon claims MedFinance is in the “risk buying” business. If the disputed surgical bill is later awarded by an Arbitrator and affirmed by the Commission, MedFinance gets as much as 100% of the fee schedule and, having already paid 48.5% out, they would receive the balance when paid. It would appear obvious that someone somewhere thinks the chance of getting an award on the most questionable carpal tunnel, cubital tunnel and shoulder surgeries is a wildly easy bet in this state. It is our further understanding that, in their view, there is no “kickback” in such an arrangement and they are not charging or sharing medical fees. It is our understanding MedFinance asked this hand/arm surgeon to set up shop downstate. We also understand the hand/arm surgeon has never sold an account receivable to MedFinance on anything other than a WC case. The hand/arm surgeon has advised he sold his “accounts receivable” to MedFinance prior to surgery actually being performed.

The hand/arm surgeon advised the various patients do not undergo conservative care as no one would treat them because they did not have the means to pay for it. We counter to indicate it is our understanding the surgeon is not checking for group medical coverage—the patients where this is happening all come from the workers’ comp arena.

We did the research and the Illinois Secretary of State’s website indicates MedFinance is owned by a corporation named LAWSUIT CASH ADVANCE LLC. It is a Minnesota based company with its corporate headquarters listed in Minneapolis, MN. You can readily find this organization on the web at: www.lawsuitcashadvance.com. These are the nice folks who will lend a claimant $5,000 today and, if they get a lawsuit recovery in 36 months, they have to pay back a mere $28,000. Don’t take our word for that—they have a calculator on their website that provides the result. Trust us, that math is making lots of workers’ comp claims start to move like greased lightning.

What is troublesome for the Illinois WC industry when one sees such hand, arm and elbow surgeries being financed and paid for in the unusual fashion outlined in the middle of this article is Illinois’ sky-high permanency values that come with each related surgery. For example, most of these surgeries will provide the worker with permanency values of 15-25% loss of use of the hand for the CTS release and 20-60% loss of use of the arm for the combination of cubital tunnel and rotator cuff surgeries to a single arm. When such surgeries are being performed on both hands/elbows and shoulders, if the employee returns to work at the same job and same rate of pay, the PPD value for even a mid-range income will be well into the six-figure range. As we have told all of you, if the employee gets the “golden diagnosis” of permanent restrictions and cannot return to the same job at the same rate of pay, an Illinois claim falls into the wage differential dance and the claim moves into the high six-figure to low seven-figure range.

We know there are folks at the IWCC who are learning of these issues. We are asking everyone to start taking a hard look at the need for surgeries when there is no attempt at pre-surgical conservative care. We hope our honest and hard-working Arbitrators and Commissioners at the IWCC are going to start to ask tough questions about these interesting surgical and financial practices. Our advice to our defense clients is to start to learn and further investigate what is going on and fight, fight, fight—the Commission can’t take any action if you blindly accept what is going on.

We appreciate your thoughts and comments.

Editor’s comment: Your editor attended last week’s Illinois Self-Insurers Association annual convention and weenie roast last week at the Marriott Lincolnshire Resort. After winning the golf tournament, we saw a presentation by the Chairperson of the Illinois Workers’ Compensation Commission advising the gathered representatives of Illinois’ biggest employers confirming our injury rates were down as compared to other states. She also advised litigated claims were projected to fall 7% less than years’ past. Total pending litigated workers’ compensation claims in Illinois were about 94,000. Please note a significant percentage of such claims are pro se settlements. Claims pending on review at the IWCC were about 2,100.

Understanding we now have 33 Illinois arbitrators in this state, if you do the math, there may be about 2,500 claims per arbitrator. Based upon information we have received, they are each trying an average of about 100 cases per arbitrator per year or about two trials each week. The rest of the claims are settled or dismissed. We feel the best thing our Arbitrators do, year-in and year-out are to drive claims to sometimes reasonable settlements.

As we recently advised, Illinois hard-working and relatively low-paid Arbitrators have been forced, not asked to take a pay cut by cutting 11 days out of their pay in the next 12 months. When we call them low-paid, Illinois Arbitrators make just over half of what a circuit court judge makes in this state. We feel our Arbitrators are asked to make legal rulings and decide factual conundrums at least as complex and intricate as those faced by any traffic court or collection room judge. We feel efforts should be made to significantly close this pay gap—one good way to justify it would be to have less but better-paid Arbitrators and not more.

We are now told by reliable sources the secret forces that run the Commission have indicated an intention to select and hire three new Arbitrators. We are not certain whether these are three hearing officers to replace folks who may be leaving or three additional arbitrators to bring the state’s total to 36. We have asked and, as usual, no one will advise. The hundreds of folks who pay 100% of the cost of the Commission via self-insured levies or payroll taxes are being kept completely out of the loop. As we have indicated numerous times, the “Commission” doesn’t hold open hearings or discuss its plans with you, the members of the bar, the Workers’ Comp Claims Ass’n, the Self-Insurers Ass’n or anyone else.

Our concerns for the diligent and hard-working Arbitrators are two-fold. First, it makes no sense to add staff when you are forcing furloughs. Second, for the Arbitrators who are diligent and doing their jobs to the best of their abilities, they have to be concerned to lose a significant part of their case loads and potentially be subject to criticism and unfair scrutiny for not working hard enough.

For all of it, we want the folks who represent Illinois business on the Workers’ Compensation Advisory Board and other representative organizations to start to demand more openness and forthrightness from the administration. We feel a “democratic” approach to running the Commission should mean it is being run transparently and with input from all sides and not from a secret group of insiders. We will keep you posted on any further developments as the news comes in. Let us know your thoughts and comments or please, post them on our blog.

Editor’s comment: We want all Illinois human resources, benefits, safety and other managers to understand the “rules” in workers’ compensation claims handling to the extent it affects your day-to-day business practices. Some of these concepts are common sense but some of them involve nuances you need to note. We feel Illinois workers’ compensation insurance carriers/TPAs should work with your accounts to be sure they follow these rules to minimize premiums and their experience.

Enforced accident reporting

When you are laying off folks in this rotten economy, consider asking them to sign a form that indicates they are or aren’t injured or suffering the effects of an injury before being laid off. You may even want to consider asking such questions well in advance of a coming lay off. The idea is to affirmatively reach out to your work force and ask these questions to see what the employees will say while they are still your employees. Some of our clients require the “enforced accident reporting” forms to be signed every time any paycheck is received.

• If you get a no answer, it may provide a defense when you get what we call “heartburn” claims that drive risk managers nuts when you first find out about a claimed injury after the plant is shut down and you can’t investigate because everyone is gone. It is even worse when you first find out about an injury claim from your former employee’s lawyer.

• If you get a yes answer, assume you are now aware of an accidental occurrence or occupational exposure and start your detailed investigation straight away. Pull security video. Consider web-cam statements. Inquire about all aspects of the claimed occurrence and potential disability. Project and track medical recovery to MMI. Seek to resolve all such claims without litigation whenever and wherever possible.

We cannot guarantee positive results but this HR/claims management concept should be somewhat inexpensive and may slow down phony claims. We don’t know why more Illinois insurance companies and TPA’s don’t require their accounts employ this concept, as it might directly impact overall insurance costs.

We have a form you may consider as part of this effort. If you are interested, send a reply.

Parking lots

If you own and provide a parking lot at your work sites, it is much more likely to have a fall-down or other injury that may be compensable if the lot is not open to the public and is limited to your workers only. If the lot is open to the public and your workers park in the lot, do not designate where employees should park. The ruling in the Wal-Mart v. IWCC decision held such fall downs are “risks common to the public” if the worker falls in a public parking lot without any direction as to the site they park. In a ruling that was issued shortly after the Wal-Mart decision, a hair salon employee fell down after being encouraged to park in the back of the company parking lot and benefits were ordered.

On a similar note, if you create some public entrances and some employee-only entrances, injuries arising in the employee-only areas are much more likely to be ruled compensable. It is your call on whether you want that heightened exposure but our vote is to only have employee-only entrances if you truly have to.

Recreational and rehabilitation activities

If you are going to have your workers

• Hold a summer picnic or get-together for all or some of your workers;
• Allow employee to work-out before, during or after work hours;
• Allow them to play sports like baseball/softball, basketball, soccer, tennis on company-sponsored teams;
• Have a going-away or testimonial lunch or dinner;
• Attend a big league ball game or other company-sponsored event;
• Give away personal trips in company raffles or safety programs;
• Enter needed drug or alcohol rehabilitation programs;
• Get counseling for marital or non-marital couples issues

You may have high workers’ compensation exposure you can avoid. The rule in Illinois is such attendance has to be voluntary. You have to be able to demonstrate participation and the activity offered is voluntary and not implicitly or explicitly required as a condition of work.

If you “order or assign” the employee to attend such activities, anything that happens in the program may be compensable under Section 11 of the Illinois Workers’ Compensation Act. Litigation to interpret that Section is expensive and outcomes may be difficult to predict. If you pay employees while they attend such events and don’t pay employees who don’t attend, you will have workers’ compensation exposure because our Appellate Court said that is implicitly “mandatory” because employees need their pay.

We have a draft release that can be signed by employees that will confirm they understand and perceive participation to be voluntary. The release will clearly document and outline your workers are not being “ordered or assigned” to participate. If you want a free copy of the release for your use, send a reply.

Fights/Employee violence

The preliminary guideline in Illinois is to greatly discourage fighting or violence in the work-place. Consider making it an enforced safety rule to terminate any employee(s) who instigate physical contact with or against other workers. Never, ever ignore threats, harassment, bullying or intimidation—always address such issues in a progressive fashion to avoid both workers’ compensation  and employment practices claims. All actions taken to address such issues will help to build your defense case-in-chief, should a later claim be filed.

The rule from workers’ compensation where you have a fight is the aggressor doesn’t recover and the non-aggressor does get WC benefits for their injuries. The weirdest thing that happened in Illinois is two female workers came to blows and the fight was recorded on security tape. They both struck each other and made contact at precisely the same time. The Commission initially denied benefits to both. The Appellate Court remanded the ruling back to the Commission, ordering them to determine who the aggressor was and who wasn’t. With respect to the Appellate Court, if you ever have seen hockey fights, lots of them involve dual aggressors and we don’t see why there should be a rule that someone has to get benefits and someone doesn’t—where both parties are aggressors, both claims should be shut out.

If you have thoughts, comments or questions about anything outlined above, please send a reply.

Editor’s comment: We want to follow-up to tell you this is a concept we feel should and must be used by all claims handlers.

Here are some additional thoughts:

• Web-cams don’t have a track record because no one is using web-cam statements yet. Anywhere. But we are confident they are coming.

• Always ask the witness for their permission to take their statement. Always confirm the witness is freely and voluntarily giving their statement and is telling the truth on all issues to the best of their ability. Ask them if they will tell the same story at court and under oath when and if called.

• Most of our clients and insurance carriers still use hand-written statements that we consider illustrative but basically worthless. Handwritten statements don’t tell a claims manager, adjuster or defense attorney the true story of the strength and demeanor of a rebuttal witness. It is much more compelling to actually have someone speaking to a camera and saying precisely what they would testify to if asked in court under oath.

• The great thing about web-cams is the claims handler can take a statement from someone at their workplace and grill them to your heart’s content without leaving your desk. The cost to your company is about $50 for your desk and $50 for the location at the workplace along with the cost of a blank CD-Rom or DVD. That isn’t much money to allow you to view the strength of your defense(s) in a major claim. And you can easily email the file to your defense attorney for their thoughts.

• If the person giving the statement seems evasive or hiding something or making something up, it truly helps to hear and see it. And if three people giving such statements totally corroborate the claimant, you had better accept such claims.

• Please understand the recorded CD or DVD and the statement on it isn’t admissible by itself—it is the definition of a hearsay statement. However, the person taking the statement might be able to testify about what was said in the statement under the right circumstance.

• The person in the video can always confirm it was their statement and was accurate when recorded. It is a consistent prior statement. The witness can also later deny or change what they said or “clarify” it. It will be up to the Arbitrator to rule when and if they are telling the truth.

• In the right circumstance, the recorded statement legally can and should be used to help jog someone’s memory. In evidence class, it would be called “past recollection recorded.” Any witness can review it before or during testimony to refresh their recollection.

• As to refusing to participate in a web-cam statement, we don’t think your company should fire people for not cooperating in an accident investigation—you may get sued for doing so. But you certainly can tell them it is your policy and they need to follow policy.

• If the injured worker doesn’t cooperate with an investigation, you shouldn’t fire them but, if there are other facts supporting it, you could deny the claim.

• And we would truly ramp up a complete accident investigation if the injured worker avoided giving a web-cam statement.

• We are also hoping there are Petitioner/Plaintiff lawyers who would drop claims if you had two or three rebuttal witnesses give web-cam statements confirming the injured worker was lying.

• All of it is a project in the works. We will keep reporting as results come in.

Editor’s comment: Back in April, CMS issued a memo detailing its new drug pricing plans and putting a hard initial start date of June 1, 2009 into place. What we end up with is another scheme by the federal powers-that-be that may end up costing U.S. business buckets of money.

Anyone familiar with workers’ compensation settlements should be familiar with the concept of a Medicare Set Aside (MSA), and the government agency that approves them, the Center for Medicare & Medicaid Services (CMS). In the most basic terms, Medicare is a mandatory, federal government provided, medical insurance program for the disabled and Americans aged 62.5 and older. When a worker who is near that age is about to receive a workers’ compensation settlement of more than $25,000.00, the feds require a “set aside” of money to pay Medicare back any future costs it may incur that would otherwise be due to the underlying work injury.

After former President Bush passed the Medicare Part D bill into law back in 2006, everyone in the workers’ compensation industry knew that as soon as a form of implementation was concocted by our government overseers, prescription drug benefits would begin taking up a chunk of any MSA monies. It only took 3.5 years for the Feds to come up with what could potentially be the most outrageous “back door” penalty on employers we have seen in quite some time: average wholesale pricing (AWP).

Like the titles for most things the federal government wants to force feed you, it sounds reasonable on its face. Believe us when we tell you it is anything but. AWP is a pharmaceutical industry term which refers to the average price at which wholesalers report they sell prescription medication to customers. Right off the bat this gets confusing as there are several published lists of average wholesale pricing, but not all of the manufacturers provide data to all publishers, so the lists vary and there is no definitive standard.

The more disconcerting effect of AWP is that it is reliant on manufacturer reporting. Have you ever shopped for an automobile? Notice how the “sticker price” on the window is much higher than what one would expect to pay for the vehicle? Well, that is the type of figure AWP is based on. It is just like the sticker price on a car in a lot—it is the “manufacturer’s suggested retail price” but it is never the price paid by a savvy customer. Much in the same way medical insurance policies are able to discount medical services, the actual price of any drugs is the AWP less some sort of negotiated discount applied. The more buying power the purchaser has, the lower the final cost of the medication.

The big problem here is CMS will be requiring cost to be based on the AWP, so insurers are losing out on the benefit they already had built into place of the “haggling” they were able to do. Essentially insurers will lose out on the cost reduction they could achieve on the open market. Once you understand how much prescription medication can be required for long-term treatment in some cases, this becomes a gigantic cost increase that may effectively remove the option for insurers to settle claims. They would be better off leaving medical rights open, trying matters and paying the reduced cost of prescription medication using their much lower negotiated fees. There may also be an underlying problem with states that have already regulated prescription medication costs within a fee schedule, such as California. How can the feds justify implementing an essentially unilateral cost increase for already defined state law remedies? Our guess is the dispute may be resolved in a court of law.

Sounds a little like the debacle we had to deal with here in Illinois when we got the “benefit to business” of the medical fee schedule, doesn’t it? We caution, along a similar note to issues Illinoisans are facing with that delightful piece of legislative balderdash, what happens when drug companies begin inching their AWP up, while simultaneously offering larger discounts to insurers on the open market. In a  case like that, the MSA costs will continue to rise, while the actually market cost won’t. As we said above, this is probably all going into expensive litigation.

On a practical note, these changes go into effect on June 1, 2009, so if you have a case that is lingering waiting for an MSA, please do yourself a favor and get all the necessary paperwork submitted prior to May 25, 2009 to be safe. We have been told that if the MSA application is submitted prior to the deadline, it will not have to take the new pricing into account.

If you have thoughts and concerns about average wholesale pricing or issues relating to MSA’s, please send a reply. This article was drafted by Arik D. Hetue of our office.

Editor’s comment: We got news that last week there was a debate and testimony before the legislators in Springfield about a bill to seek to change Illinois law to require the work to be “the” cause and not “a” cause of a work-related medical condition. We then heard the representatives of Illinois labor bemoaned the fact that such a legal change would strip out “carpal tunnel” and other “repetitive trauma” claims for their members and other workers. We assure our readers it is potentially an accurate concern—we truly feel the current scope of coverage provided under Illinois’ implementation of the law involving repetitive trauma has effectively ended litigation of such disputes because most repetitive trauma claims are viewed as global coverage by our administrators. If the term “repetitive trauma” appears in a Commission ruling, they almost always rule the condition is work-related.

So what is wrong with the concept? Well, Illinois jobs are our biggest concern. Illinois is steaming towards 10% unemployment. Reaching that number will be a record high for the lifetimes of the vast majority of our readership. That isn’t happening by chance. We don’t feel the Illinois AFL-CIO has an abiding concern about finding more solid-paying jobs in our fair state. What is happening in Illinois workers’ compensation right now is a strong disincentive to Illinois employment.

Think this is more of the same old, same old? Well, here are two case stories we assure you are true.

1. Try the case of the chubby trucker with sore wrists. Four years ago, he started to treat for, along with lots of other things, his wrists. Numerous studies confirm one easily defined cause of carpal tunnel syndrome is obesity. Trust us; he suffers from that condition in spades. After about six months, the third of his treating doctors came up with the brilliant concept that the supposed “vibration” of the truck’s steering wheel was “a” cause of his condition and he needed CTS surgery. Never mind that the first two treating doctors and claimant himself did not attribute the condition to work—there was now a “golden diagnosis” in the file linking the condition to employment.

So what happened? Well, we weren’t handling the defense file at the time but the parties clowned around and clowned around fighting over causal connection. The trucker remained off all work for reasons we don’t understand. Three-plus years went by and the Arbitrator, who is a former Petitioner attorney, has dropped a bomb on the Illinois employer. He related the condition to whatever insidious level of “steering wheel vibration” this poor trucker had to endure. Gosh knows the steering wheel on his own automobile has to vibrate too but remember all you need in Illinois is for the work to be “a” cause. The Arbitrator has awarded over $150,000 in lost time and forced the employer to certify future surgery. The matter is now on appeal and is assigned to the most radical of the Illinois commissioners. By the time the appeals run, if the decision isn’t reversed, the employer may have to pay $200,000+ in lost time alone!

We are hoping against all hope the Commission turns this one back but try to understand how such cases make existing and prospective Illinois employers feel—the stakes in this poker game are unbelievably high. We are more and more concerned Illinois business gets to play in the game with a fixed deck full of marked cards.

And FYI, this is a classic example of poor defense handling—if you are going to fight about the need for care, get lawyers like KC&A who fight quickly so you don’t run up massive lost time exposure.

1. Our other favorite case is the central Illinois plant of a major Illinois employer you have all heard of. If you drink coffee, you have almost certainly used the product from this facility. We are at a claims meeting with the plant representatives, the third party administrator and KC&A as legal beagles. The plant manager has about eighteen claims from a union workforce of about two hundred. His concern for the TPA and our firm as his legal counsel is not one of the eighteen claims had anything to do with a traditional “accident.” He carefully pointed out there wasn’t anything unsafe about the events leading to any of the claims—every one of the claims involved “repetitive trauma” from doing normal work in a normal way. All of the workers had healthy and happy lives outside of work—they bowled, hunted and ran farms and used their elbows, hands and arms like everyone else in that part of the state. But all of them were seeking big benefits that were basically due to medical conditions related much more to advancing age than their work.

The plant manager noted all of the workers involved were over 50 years of age. They had lots of sore elbows and achy wrists which they attributed to routine factory work. All of the workers did lots of different things as part of their work—no ergonomist could or would ever point to any one task being performed in a “repetitive” fashion.

All of the workers were making claims that we have called “the Tunnels of Illinois.” By that you may recall, we feel there is more of an incidence and prevalence of carpal and cubital tunnel syndrome in this state than anywhere else on the planet. The reason for all the sore wrist and elbow claims is Illinois’ workers’ compensation system rewards the surgeon making the diagnosis by providing full payment of the cubital tunnel surgery at rates much higher than Blue Cross® would ever pay. Thereafter, the workers get a hefty bonus—as much as $60,000 in PPD for bilateral surgery that leaves less than a one-inch scar. Trust us, we have to find some way to let workers get carpal or cubital tunnel surgery without the amazing largesse that follows.

Well, about three years ago, the plant manager retired and was still making fun of the Illinois workers’ comp system.

We hope our legislators start to ask Illinois business what we need to do with workers’ comp to build more factories and plants in this state. Regardless of what the AFL-CIO says, what we are doing right now isn’t working. Please do not hesitate to provide your thoughts and comments.