Keefe, Campbell & Associates, LLC

Editor’s comment: Our readers have pummeled us with the WCRI report card on our system and administrative handling of workers’ compensation claims. If you aren’t familiar with it, WCRI is the U.S. top “stat rat” for this industry. They reviewed the last period for which a full year of data was available, 2006 and Illinois got straight “F’s” in all categories, thereby falling into the bottom of the barrel for the states surveyed. We want everyone to understand we didn’t create this report. We do consider it is a fair and impartial agency that doesn’t have an ax to grind–they simply are reporting their research and the facts. We are confident the wise guys or powers-that-be that run the Illinois Commission are going to mumble something about ever-dwindling but impossible to attain insurance advisory rates. We are also certain they don’t want such outcomes published—we didn’t publish them so please don’t shoot the messenger. The grades are out there and one can make of them what you will.

Well, in comparison to Illinois, other states are also doing lots for their workers. And they are doing it in a competitive environment where there are jobs and the potential for more jobs. As we have pointed out in the past, Honda Motor Company looked at Fithian IL as a site for a major new plant with lots of jobs and quietly picked Indiana. Archer Daniels Midland has been a staple and major employer in the Decatur IL economy for decades and when they wanted to build new ethanol plants, Illinois was the last place they looked. Illinois has great schools and solid infrastructure but we feel workers’ compensation is becoming more and more of an issue for every current or potential Illinois employer. Why not work toward a “C” so employers take this issue off the table when looking to expand?

So, here are some simple thoughts for all the major players involved to get us out of the F category and up to C or maybe even a B.

Number One–stop viewing the system as a path to make claimants wealthy and not simply “whole.”

We have watched our reviewing courts and Commission struggle with the new focus on providing double PPD benefits in Beelman Trucking and Freeman United Coal. We assure all of our readers and everyone who will listen, these decisions are the first time in Illinois history where an employer will have to pay monies to make someone arguably whole–the poor truck driver in Beelman Trucking suffered severe, life-changing injuries. The trucking company clearly had to pay him the rest of his life on this planet. Illinois law allows him to also work and still receive lifetime benefits. On top of that, the Supreme Court decided that wasn’t enough and he has to become wealthy by giving hin a six-figure bump on top of everything else.

Now the whole system is properly giving all similarly situated folks an infusion of cash that is only going to make them wealthy while rocketing up reserves on Illinois’ biggest claims. To all the claimant attorneys who urged us to note there is a possible reading of the Act that justifies the largesse, we point out that is one of the clear reasons Illinois is getting an F–we are stretching the law and English language to find ways to give away money that isn’t needed. An injured worker is made whole by paying them for life. The rest is making them wealthy while blowing out prospective employers who are happy to look for states that just make injured workers whole.

Number Two–start using and stick to UR.

The second biggest problem with Illinois is the lack of definition and “control” over doctors and claimants. We have at least ten litigated claims in our office right now for soft-tissue back strains with grossly negative diagnostics. All of such claimants are staying off work without apparent reason or, worse yet, showing up for work, going off, coming back and generally torturing their employers. We have told all of our readers Illinos risk managers going absolutely bonkers about such claims.

The easiest and fairest way to manage them and other similar claims is to follow utilization review protocols to the letter. We note utilization review was brought to Illinois as part of the 2005 changes to the Workers’ Compensation Act–a claimant attorney pioneered that legislation and fought to bring UR to our state.

It is our strong impression the wise guys found out what it is and how it works and then put the complete kibosh on it. We think that is totally “unwise.” The best thing about UR is it is easy, quick, low cost and fast. Claimant attorneys could rely on it to get their clients back to work and claims settled right away.

Why don’t they want it? Well, some claimant attorneys think injured workers who are whiners and malinger are good for some attorneys’ pocket books. When a claimant milks an injury and stays off and stays off and endlessly treats without any apparent reason to do so, defense costs skyrocket, exposure rises and everyone wants to pay more money to get rid of the loser. The problem is employers put through that wringer want to move away from our fair state to any other place on the planet.

The easiest and fairest way to avoid this mess is to follow the legislative model a claimant attorney proposed. Yes, it does mean you may actually have to give up “control” of claim outcome to a nurse, general physician and, on appeal, a medical specialist who combine to quarterback other physicians. This occurs in group health care every day.

Once receiving the UR report, the non-medically trained arbitrator may have ceded his/her decision-making on applicable claims to another. The UR report should be clear, concise and provide a national or international study to support the outcome.

The lack of implementation of UR or some other neutral guideline for lost time and medical care is one of the most common complaints of the Illinois WC system–nothing the employer does to independently defend themselves is given true credence. Illinois arbitrators will discard and despise IME’s, co-employee witnesses, surveillance and UR. We think Illinois will jump up in WC grades to follow this one simple step.

Number Three–stop expanding coverage to claims that weren’t and shouldn’t be work injuries.

Every one of our readers who is familiar with Missouri law repeatedly tells us they are thrilled to report Missouri changed their law and now requires work to be “the” cause of any work condition considered deleterious and not simply “a” cause of the problem. Illinois not only allows work to be “a” cause, we now understand there are numerous doctors in central Illinois who are happy mine the “tunnels of Illinois” by operating on carpal and cubital tunnels when there are mild or even minimal electrodiagnostic findings. We are told there are litigation funding companies that are guaranteeing hand/arm surgeons their bills will be paid, no matter how slim the reasons are to perform surgery–they are supremely confident of Illinois’ workers’ compensation system and its overtly liberal view of repetitive trauma will result in numerous awards of such questionable medical care.

On the other side, we again point out the overuse and abuse of the “traveling employee” concept is clearly providing benefits in settings Illinois arbitrators and commissioners never before contemplated. Firefighters wrestling like schoolboys in their hotel rooms at a convention aren’t supposed to be able to get benefits, as if they were “working.” When a cop walking a beat casually turns around to answer a question, it isn’t supposed to be a work accident. Numerous and well-settled Supreme Court rulings indicate Illinois employers were not blanket insurers of the well-being of their workers–the traveling employee and repetitive trauma concepts have thrown that baby out with the bathwater.

Our worry is there are elections next year and workers’ comp is going to hit the headlines or at least the bylines. It would be great to be able to report there are folks at the IWCC who are sensitive to genuine and constructive criticism and don’t simply turn on the folks who are pointing out what many feel are systemic problems.

We appreciate your thoughts and comments about reforming the Act and Rules and IWCC administration to improve the system for both injured workers and Illinois employers.

Editor’s comment: We wonder if our highest Court has noticed all the empty homes that no one is buying and all the cars that are sitting rusting on dealer lots that are closing and all the jobs that may be leaving our state. Outside the halls of the Illinois Supreme Court, we see labor’s political forces amassed to include the Illinois Trial Lawyers Ass’n and union representatives apparently devoted to making Illinois a graveyard for U.S. business. Their bent seems to be a goal to make our workers’ compensation benefits as painful and as expensive as possible. We assure all of you this ruling will add a significant level of confusion and uncertainty to the supposedly structured workers’ compensation benefit process. When all is said and done, the ruling may also affect only about one-two hundred Illinois citizens annually—with the awful anti-business message it sends, why did they bother?

The Illinois Workers’ Compensation Act was initially passed by the Illinois legislature one hundred years ago in 1909 following a disaster at the Cherry Mine in central Illinois. We assert Illinois now has the highest total and permanent disability maximum and minimum rates in the world. Right now, an injured Illinois worker making $50 a week who is adjudicated T&P gets $461.78 per week or $24,012.56 per year! The maximum is a hefty $1,231.41 or $64,033.32 per year. An Illinois worker doesn’t hit the max until they make $96,049.98 unless Illinois’ wacky method of calculating the average weekly wage under Sylvester is used. For a 30-year-old worker who has a 45-year life expectancy, the full undiscounted value of a total and permanent disability is $2,881,499.40. While we don’t want anyone to suffer a catastrophic injury, if it happens, we consider that amount more than satisfactory when one understands the worker also gets get unlimited on-demand medical attention, home and auto improvements to adjust to their disability and favorable public parking places.

Until last week, the highest benefit payable under our Workers’ Compensation Act for a single injury was the lifetime weekly benefits outlined above for a total and permanent disability. Three years ago, our friends in Illinois labor demanded and got funding from Illinois business for COLA increases guaranteed to keep such benefits consistent over the entire life of an injured claimant. Again, while some states do and some states don’t, it is hard to fight over COLA benefits for statutory T&P claimants.

So what happened last week? Well, the Supreme Court may have arguably doubled this already gigantic benefit. If they didn’t double it, they increased it greatly. In Beelman Trucking v. Workers’ Compensation Commission, claimant suffered a very serious injury involving paralysis to both legs and one arm along with amputation of the other arm at the elbow. We join with the employer in extending our concerns for this severely injured worker. There is no question he is entitled to lifetime statutory total and permanent disability benefits at the appropriate rate—he had already received $274,000 from his employer at the time of the hearing. We don’t understand why such a claim needed to be litigated in any way. An attorney taking such a claim gets a statutory $100 fee pursuant to Illinois law. It would appear obvious he found a zealot to represent him who then took the matter through five different levels of litigation over 15 years, probably costing the employer tens of thousands of dollars fighting over this mess.

What the Arbitrator and Commission did, for the first and only time in Illinois history is not only allow him to prove-up his right to statutory total and permanent weekly benefits for a single injury, they awarded additional or double weekly benefits on top of lifetime benefits!! As our system provides for weekly benefits only, one has to wonder when the benefits following lifetime benefits might be due. Do they have bank accounts that take weekly deposits in heaven?

What the Arbitrator and Commission panel did instead was to “deform” the weekly benefit system in an unprecedented fashion—they doubled the weekly benefit, requiring the employer to now pay “permanency” twice. The method used was to look at the statute that provides weekly lifetime total and permanent benefits to anyone losing the use of two limbs and confirm that is one benefit under the Act. They then ruled, if someone loses more than two limbs they get additional weekly benefits for the other lost limbs without any “credit” for the T&P weekly benefit already clearly due.

In this case, they provided a lifetime weekly total and permanent benefit for the undisputed loss of the legs along with another 100% loss of use of each arm or 253 weeks of additional benefits consistent with amputation losses for each lost limb. The additional amount awarded could be as high as $1,231.41 per week times 506 weeks or $623,093.46. The additional amount can be no less than the minimum amputation value of $233,660.68. Ouch.

As you may be able to tell from the tenor of this article, we consider that outcome preposterous under the law as it has evolved. As workers’ compensation law professors, such a ruling is a paradigm shift away from the clear language, intent and scope of the legislation that has been in place for 100 years. We also point out the clear alarm for all Illinois employers that chaos appears to be afoot—we have no idea where these folks are going to drive such a concept and what new claims may ensue. We pray calmer heads will prevail and our hearing officers, judges and justices return to a more traditional reading and interpretation of the “plain language” of the Act.

Although the Arbitrator and Commission ruling was rubber-stamped by the Circuit Court, the Appellate Court, Workers’ Compensation Commission Division should be applauded for reversing it with a very solid ruling confirming how obtuse the legal theory was. Although we do not always agree with their rulings, these justices continue to be a gateway for common sense and tradition in their management of our workers’ compensation legal system. We like to characterize them as liberal yet careful jurists. Again, one would have thought this case would have ended with this Appellate Court reversal. However, the Supreme Court agreed to take the case for reasons known only to the members of that court.

In Beelman Trucking, the Supreme Court came up with a theory to allow double weekly benefits for a single accident for the first time in Illinois history. It is worth noting the Illinois Trial Lawyers Association’s amicus brief was mentioned in this ruling. At no point do they mention the fact all permanency benefits arising from a single accident for the last hundred years have been paid weekly and now will have to be double-paid. And try to imagine how happy Sam Beelman, the president of Beelman Trucking had to be to learn the Illinois Trial Lawyers Ass’n had lined up to file a brief and thereby advocate against his company. We don’t feel any single business entity has any chance against ITLA’s political clout and campaign largesse; certainly not a modest-sized southern Illinois trucking concern. If ITLA writes a brief to the Court, you can bet the Court will listen more than carefully—at this level of the judicial spectrum, whatever ITLA wants, ITLA gets. Again, as the future legal fees on such claims should be capped at $100, why did ITLA care?

The Court reaches the conclusion that loss of use of two limbs does entitle a worker to lifetime weekly total and permanent disability benefits—this aspect of the award was proper and undisputed. However, the Court then finds the right to permanency doesn’t end there and any other injuries suffered in the same event now entitle the injured worker to double their weekly recovery. So, we ask all of our readers the obvious question, why isn’t this claim a “double” total and permanent disability? If the answer is that wouldn’t make sense, we don’t think any of this makes any sense. The Court interprets statutory total and permanent disability to arise from a loss of use of two members. This guy sadly lost 100 per cent of all four members—why doesn’t he get lifetime benefits twice? The statute doesn’t provide “credit” for the first T&P award, does it?

We read our highest court’s ruling as somewhat blurring—they break down the word “case” and note Respondent’s brief outlined “case” meant “proceeding” and the court’s majority felt “case” means “incident” or “example.” It is unclear why the court went to such great lengths to analyze these terms since it is something only a lawyer could struggle to make sense of. From the perspective of John Q. Public, the bigger and more important point is for the last 100 years, Illinois employers have been taking full care of any injured worker to pay unlimited on-demand medical for life along with a very generous tax-free weekly T&P benefit with cost-of-living increases. However one dices and slices the word “case,” do we really have to throw literally hundreds of thousands of dollars on top of that? Can and should Illinois business have to afford it?

So what do we have to do now? Well, we figure there are three things. One, you have to understand there is blood in the water and sharks swimming all around looking for fresh meat. Where is the next launching place for ITLA to sink its teeth into? These folks have to be emboldened by this victory and looking for new prey to shoot, field-dress and bring back to their membership. We assure you they are going to be advertising for this new business as rapidly as possible. We are also sure that finding new paths to stack benefits will be the next trend at the IWCC–if an Illinois worker is injured and gets a “lazy lot” total and permanent award, can they now go back to the Commission and ask for specific loss for body parts that were injured but did not cause the restrictions that led to total and permanent disability? Is this a new method to stack double weekly benefits? If you can think of any other way benefits could be stacked in this fashion, please send it along and we will share with our readers.

Second, please note this ruling affects all pending claims that have not been settled or tried. One arbitrator who knew of this ruling already advised he had a total and permanent award where he is going to have to add permanent loss for a shoulder surgery on top of the T&P award. We therefore feel all underwriters have to take a fresh look at their biggest claims and reset reserves consistent with this ruling. Reserves on any pending quadriplegic claim just went up around a minimum of $230K and possibly as high as $623K. Triple amputees or paralysis victims will also see concomitant boosts. If you have questions or comments on reserving major cases following this precedent, send the inquiry.

Finally, we have to get to our legislators and try to teach them how bad things are getting in this state. We also ask you to consider joining the Illinois State Chamber and its Employers Council. They remain out on the point for Illinois business in the fight to try to bring workers’ compensation benefits back to some semblance of reasonableness. While this ruling doesn’t affect thousands of claims, it still sends a brutal message to Illinois business and prospective employers. We assure all of our readers most companies with Illinois operations are holding onto cash in their major claims; it is painful to have to tell them to boost reserves and tie up even more cash and credit while they are fighting for their survival.

The ruling is on the web at: http://www.state.il.us/court/Opinions/SupremeCourt/2009/May/106680.pdf. Please don’t hesitate to send your thoughts and comments.