Keefe, Campbell & Associates, LLC

Editor’s comment: If you read our KC&A Update last week, you learned the parties have reached a class action settlement of the dispute about the Surcharge you may have overpaid in 2003-9. Your organization may be able to get substantial monies back with minimal effort on your part. Shawn R. Biery, Gene Keefe and the attorneys and staff at Keefe, Campbell & Associates are happy to handle your claim for free, if you will simply fill out and forward the forms to us. We have already submitted a number of applications for refund and more requests continue to come in every day.

Preliminary approval for settlement of the lawsuit has been provided by the Circuit Court of Cook County. The sum of $3,300,000 now resides in a Protest Fund and will be placed in a claim fund to be distributed to class members who can support their claim for repayment. Judicial approval of the payout may be as soon as June 15, 2010.

The support for claim can be made with documentation of canceled checks, invoices showing the surcharge or other proofs of payment as long as they make a claim for repayment during the claims period in the appropriate manner. The amount of refund will be limited to 45% of the Surcharge paid between July 1, 2003 to June 30, 2004 and 10% of the Surcharge paid July 1, 2004 to June 30, 2009. The current proposed settlement agreement can be seen on the web at http://www.state.il.us/agency/IIC/Chamber-Settlement Agreement.pdf and the preliminary approval order can be found on the web at http://www.state.il.us/agency/IIC/Preliminary approval order.pdf.

This was brought to all Illinois employers by our Illinois State Chamber of Commerce. We urge our readers to continue to support State Chamber President Doug Whitley and the Illinois State Chamber of Commerce that is clearly out on point in trying to reform workers’ compensation in this state.

Running a government isn’t a tough thing to do. You collect taxes and fees and spend what you bring in. All of it presumes you are wisely spending the tax money you are getting. At present, we are watching the wasteful Democratic administrations in the City of Chicago, County of Cook and State of Illinois struggling to find ways to pay for their institutional waste; including wildly inefficient, incompetent and ineffective workers’’ comp defense programs. Now it would appear they are attacking hospitals to try to make up their deficits.

Last week, the Chicago Sun-Times reported four hospital CEOs from South Suburban, Ingalls Memorial, St. James and Little Company of Mary Hospitals voiced their opposition to a proposed Cook County tax seeking to charge all hospitals in the county a fee if they fail to meet county-mandated criteria for charity care – the equivalent of 4.5 percent of their annual expenses. Few Cook County taxpayers want to steer more money to a county government that recently dished $14,000 to a sheriff’s employee who claimed a back injury twice after reaching to pick up a piece of toilet paper. In 2008, the county paid a whopping $69 million in litigation-related expenses, according to a report.

Because the majority of hospitals are exempt from paying property and income taxes and certain state and local sales taxes, they are expected to provide a commensurate level of free care to indigent patients. Although there’s no question hospitals are providing millions of dollars in free care every year, some of the larger ones that can absorb low-income patients are not meeting the burden as much as they should, claim county officials. And the same officials claim larger, wealthier hospitals are dumping uninsured patients on the already cash-strapped Stroger, Provident and Oak Forest hospitals that are run by the county.

The Hospital CEO’s say the last thing Cook County government needs is a new revenue stream when it can’t control its budget now. Costs are out of control. Represented by the Metropolitan Chicago Healthcare Council, the hospitals oppose the new proposed fee. The four CEOs said they also oppose such fees on their larger health-care counterparts because eventually smaller providers would be hit, too. Hardest hit under this proposal would be the Advocate Health Care Network, which provided in 2008 the equivalent of only 1.4 percent of annual expenses toward charity care – even with half of its bad debt included in the charity care figures.

If enacted, the tax could cost as much as $350 million annually for hospitals in Cook County, according to the hospital group. And the last thing Cook County needs is more revenue, it said. Travis Akin, executive director of Illinois Lawsuit Abuse Watch, compiled a report showing the rising litigation-related expenses in Cook County, which are 738 times higher than in DuPage County, even though Cook has six times as many people as DuPage.

The Cook County Board’s workers’ compensation committee chairwoman Elizabeth Doody Gorman claims her hands are tied by state laws. We respond to say balderdash. As we have outlined, Cook County doesn’t do any of the things other companies do to cut costs, like hand-written or tape-recorded accident reports and surveillance to catch its employees when they are abusing the system. The City of Chicago refuses to implement light work to make their employees return to work from injuries as soon as possible and get off the dole. Workers’ comp vendors at the Illinois state, county and city level are not competitively and fairly chosen to provide value—you still get the job when someone’s cousin’s brother’s uncle says you do. All three governmental bodies are regularly hit by the IWCC with penalties and attorney’s fees for mismanagement and litigating issues they can’t and shouldn’t fight. The politicians and administrators continue to randomly pick a “whipping boy” as they seek more reasons to justify throwing away taxpayer money.

Well, the Illinois state-wide primaries are a month away, folks. The general election is this fall. Please don’t hesitate to respond with your thoughts and comments.

Editor’s comment: As our readers note, we are sitting on the fence with our current Gov watching closely to see if he can rectify the hilarious antics of his predecessor. Understanding the state of our State is total turmoil; we will wait and see if his tax plan will be accepted by the legislature and electorate. We are satisfied to see the Gov is acting like a grown-up and telling all of us the money is desperately needed for the business of the state which includes paying hospitals and lots of government agencies.

We will remain quiet waiting to see what cost savings and efficiencies the Gov will bring to the table for the long-term. If he doesn’t take action, we hope State Senator Matt Murphy and the Republicans start grilling him on it. We can think of at least ten ways the IWCC can save costs without changing their overall task of protecting the rights of Illinois’ injured workers while keeping benefits somewhat competitive for Illinois employers. If you have any suggestions, please send them along.

One of the very easy ways to save jillions in most branches of state, county and local government is to bring them into the 20^th and then the 21^st centuries. Most Illinois state agencies are wildly and intentionally inefficient, preferring paper documents and records and lots of folks to handle everything.

We recently learned Madison County has been designated by the Illinois Supreme Court as a pilot for electronic filing (e-filing) of Law and Arbitration cases. E-filing of Law cases begins Monday, April 6, at the Madison County Circuit Clerk’s office. Arbitration cases will be eligible for e-filing at a later date.

LexisNexis (LN) is the filing service used for this pilot project. LN is making free web training available for the industry. Fees for e-filing, training schedules and registration information are also provided. The Third Judicial Circuit Court’s Rules on e-filing are posted at the Circuit Clerk’s webpage. To see the new rules, go to www.co.madison.il.us, click on “Circuit Clerk” and select “Local Court Rules.” E-filing rules are listed as “Rules of Practice, Part 7, E-filing Rules. One key provision of the local court rules (Rule 2) is all parties must agree to e-filing for cases filed prior to April 6. On and after April 6, if an initial pleading is filed electronically, whether the complaint or answer, the case is automatically eligible for e-filing. The Circuit Clerk’s office asks attorneys who wish to exercise e-filing as an option to please send a signed statement to Circuit Clerk-E-filing, 155 North Main Street, Edwardsville, IL 62025 stating their agreement to submission by electronic filing on all cases pending as of April 6, 2009. Statements will soon be available at the clerk’s counter and in courtrooms.

Can this happen at the IWCC? Well, we expect all the “wise guys” who run the place will be clucking and snapping how they can’t learn all this new-fangled stuff. We still laugh to think how long it took some of them to buy fax machines and get email. Well, we hope they understand e-filing is coming and won’t be stopped. And the faster it hits the higher the cost savings will be.

If you have thoughts and comments on e-filing or any other cost saving tactic, we would appreciate your reply and comment.

Editor’s comment: Sometimes it starts with a small thing. This week, we learned the Illinois PPD maximum rate had been increased on the IWCC website without any prior notice to industry folks like you and me. Actually, one of our sharper clients noticed it before we did. We also got an email from a top-notch defense attorney in Rockford who was advised by his clients of the change. He was nice enough to relay the information so we could update our website and our partner, Shawn Biery’s Illinois WC rate sheets. By the end of the week, an IWCC email update was sent and the change made the IWCC news.

We think the administrators have made a similar mistake to the problems faced with implementation of the 2005 Amendments to the Workers’ Compensation Act—changes to the law are effective as soon as they are made. It is our legal opinion they can’t simply “white-out” the old interim rate as they appear to be trying to do—it isn’t that simple a change. The rate of $643.82 is and remains the effective rate for the period it was posted on the web. We think the IWCC has to put an asterisk or something to let the public know of their claimed error and its purported “correction.” Cases subject to the PPD maximum for dates of loss from July 1, 2008 to March 12, 2009 that were settled or tried during the period from the posting date of the $643.82 number until the posting of the new number and have reached final disposition are set at the $643.82 amount. It is our legal opinion you don’t have to reopen settlement contracts or modify final arbitration decisions from the period of January to March 2009 to send claimants and their attorneys more money now. Yes, we understand this is confusing—we didn’t create the confusion and hope there is no litigation to resolve it.

At present, we want all of our Illinois clients across the country to know you now have to again reset all PPD reserves for all active claims with dates of loss from July 1, 2008 to present. Please don’t shoot the messenger for this comedy of errors. If you don’t understand what you need to do, please send a reply.

Then the wheels started turning. The old max rate was $636.15 and, as we outline above, it was initially increased to $643.82. This was an increase of $7.67 a week which we consider somewhat normal, even understanding 2008 wasn’t a great year, particularly in the second half. The new increase takes the PPD maximum to a whopping $664.72. This is a one-year increase of $28.57 or about 4.5% in one year! Such an amazing leap creates substantial concern by the members of this firm for a number of reasons.

First, what heavy hitter has the political power to “correct” clerical errors of this nature? We have never seen anyone increase the published PPD maximum since we started spiraling our rates in the mid-1980’s. We also point out the new PPD max rate is only good through June 30, 2009—we are nine months into the current amount! We are sorry to report our skeptical view but we simply don’t believe it—we think this was done because the “wise guys” who secretly run the Commission wanted PPD rates higher and assume the masses won’t care or are too stupid to understand their insider actions.

We truly seek a formal inquiry about this late and unnecessary change. We also again ask the Commission itself or our legislature to seriously consider freezing all WC rate increases while Illinois recovers from the worst recession of our lifetimes.

In reviewing what just “hit us,” we are certain the Commission itself didn’t meet to discuss the confusing change and its nuances—they almost never meet. We are also certain the IWCC advisory board didn’t mandate the giant new increase—it wasn’t on their published agenda for any meeting. We feel someone may have secretly put the arm on someone to make this unprecedented change, like all the other secret stuff we see all the time at the IWCC. If we are wrong, we ask for someone to prove us wrong and show us their math.

Second, there is no chance, none that Illinois wages went up 4.5% across the state last year. If anything, wages dropped dramatically by year-end. At a continuous increase of 4.5%, Illinois wages will supposedly double in 16 years. Trust us, wages in this state aren’t doubling every other decade.

Most important, we are now looking at state government raising our income taxes by 50%. The chances of that happening are almost certain—the state is running at an $11.5 billion deficit. We are worried Governor Quinn is living in a fantasy land when he easily tells us we have to live with record high income taxes when some of our sister states have no income taxes. We are also thrilled to hear he wants to cut spending without any defined plan to do so. Trust us, Gov, the workers’ compensation costs in this state for state workers are spiraling wildly out of control. It isn’t hard to check—go to the IWCC call sheets and search “State of Illinois” or “St of IL” and you will find each call has 5-100 claims in litigation by State of Illinois employees. We would estimate the Kankakee call alone has about 500 cases currently pending. We would estimate there are 5-10,000 pending WC claims for Illinois state employees!!! We are also certain the cost to Illinois taxpayers is well into the billions. Well, guess what, they just raised their permanency maximum rate, affecting all of those thousands of claims.

Cook County government is also facing record deficits and we can be sure they will have to find new revenue sources within a year of hitting county residents with the highest sales taxes in the world. Numerous county employees are filing lost time WC claims and we have seen no true efforts at workers’ compensation cost control for the county. Their PPD maximum rate just went up, affecting all of their claims.

The Chicago Public Schools are about $500 million in debt. We applaud new manager Ron Huberman who is trying to hold the line on real estate taxes. He is specifically targeting rising workers’ compensation costs as a management goal. He will also have to deal with higher WC rates that will certainly affect all of his claims.

Finally, the City of Chicago continues to see spiraling WC costs. The City steadfastly refuses to provide light work or to perform surveillance of WC claimants, claiming neither strategy saves costs. Well, we assure the City fathers every other major employer in Illinois uses such concepts and saves millions of dollars doing so. The City of Chicago needs to fund legal “ghost payrollers” because they need 20-30% more workers to staff any position because for every ten city workers, two or three are out on WC benefits at any given time. And now they will have to battle higher max PPD rates.

We continue to hope these government bodies will start to pull out of the rut they clearly are in and not make a bad recession even worse with new record high taxes while Illinoisans try to fight the good fight in the private sector. We seek your thoughts and comments.