Synopsis: Move to the Center? IL WC Commission’s Apparent Moderate Turn to the Middle is Refreshing for Illinois Business Community. Will the IL WC Appellate Court follow suit with support of the Commission rulings?

Editor’s Comment: It is no secret to veteran readers of this KCB&A newsletter that we have been known to wield a sharp pen over the years when it comes to our critique of the hearing officers of our Illinois Workers’ Compensation Commission. While perhaps harsh at times, much of our criticism was meant to point out some of the more challenging or arguably absurd awards and rulings, which often appeared to overlook strong evidence for the defense. Ten years ago, during the Reign of Blago, we recall joking about how our defense lawyers were like sheep going to slaughter, with little chance for victory on the business side of this industry.

We have to say, in our recent audit of IWCC decisions both internally and those reported over the past 18 months, we are noticing a distinct shift to the center by Arbitrators and Commissioners. For this, we have to applaud what we feel is a more recent “fair and balanced” approach to cases by our adjudicators. In fact, what compelled this article was receipt of four (4) decisions in one day last week which were all denials or otherwise favorable for the defense. Upon review of our trial decisions over the past year or so, we noted a similar trend as well.

Sure, on those “close call” issues over proper medical protocol or surgery, we still see administrative deference to treating doctors. And in other disputed matters, some arbitrators often have the difficult job of deciding who the heck is telling the truth and who is full of cow manure–those cases are always a bit of a coin flip. In our view, it is always challenging to try to act as a human “lie detector” and we can’t expect our sworn hearing officers to be any different. In our view, they are carefully listening to everyone and making their best call. We don’t think any WC administrative system can ask for more than that.

However, where solid evidence is presented to rebut a claim, such as surveillance video, job videos, pre-existing medical conditions/treatment or eyewitnesses to rebut claims, the current Commission members are taking a hard look at the evidence and where appropriate, dispensing denials on claims that don’t pass the smell test. We also note the Commission is looking more closely at the “repetitive trauma” concept of injuries with a far more quizzical eye than ever before–something we also feel is appropriate, as we have never been convinced “repetitive working” is necessarily an injury worthy of compensation.

In our view, this trend promotes the validity and respectability of the Commission as a judicial ruling body. It is good for IL business and good for our industry in general when a sense of even-handedness is felt by both sides of the isle. Moreover, we are noticing the same arbitrators employing use of AMA impairment ratings for the newer injuries and dispensing awards that are discounted off of traditional values, or what some prominent petitioner attorneys have described as a “haircut” on claim values. Again, this trend is good for Illinois business, particularly as we compete with our sister states for lower WC costs and job growth.

As an example, our firm alone has seen the following in the past month or so:

Zero award for Petitioner seeking TTD and past and prospective medical treatment in the form of bilateral carpal tunnel surgeries. The Arbitrator noted Petitioner would have been exposed to the work for a limited period of time before the asserted symptoms, the variance in job tasks actually performed by Petitioner during that time, and the treating doctor did not offer a causation opinion. He reviewed depositions of doctors involved and found our IME doctor’s opinion more supported by the evidence than that of the initial treating doctor.

Zero award for Petitioner seeking TTD and past and prospective medical treatment in the form of knee surgery. The Arbitrator indicated Petitioner failed to prove he sustained an accident which arose out of his employment. There was an onset of pain as the day progressed, but no specific incident or trauma. The treating doctor’s opinion was speculation according to Arbitrator.

· Zero award for Petitioner who suffered an undisputed fall with immediate emergency treatment but did not seek follow-up care for five months, eventually requiring total knee replacement.

· Undisputed injury and full return to work resulted in award for cervical fusion at 17.5% MAW after AMA impairment rated case at 10% impairment.

· Zero award where job description demonstrated that field worker for pest control company did not perform “repetitive-enough” tasks to contribute to what became a personal condition causing carpal tunnel.

While we would love to portray this chain of defense victories as one experienced by our firm exclusively, our discussions with veteran attorneys on both sides of the bar have confirmed this as an industry-wide trend with a notable shift to the center by the Commission. We even had one veteran Petitioner attorney in central IL tell us that he is hesitant to try any carpal tunnel cases anymore, as he has a stack of recent denials to show for his efforts. In our view, this is a win for ergonomics, safety engineering and common sense.

It compels the question, with more denials being handed down, along with the cost savings from the 2011 statutory changes in the form of WC medical fee schedule reductions and AMA impairment ratings, do we have a Commission that is pro business? While we certainly can’t go that far, we do find the IL Arbitrators and Commissioners to be more objective and careful to weigh the evidence than ever before. Of course, as advocates in an adversarial system, we will always come across decisions that make us want to pull our hair out at the roots—we are sure the other side has similar problems which is the nature of litigation. However, all we can ask for is a fair system where our best arguments are heard and considered objectively. This appears more evident now than in the past decade and we felt it appropriate to tip our hat to the Chairman, Arbitrators and Commissioners for their efforts in this regard.

We are not as confident that this trend of the Commission will carry over to the Circuit and Appellate Court. While the Commission may have grown more centrist, we continue to see an Appellate Court that remains more Petitioner oriented with their interpretation of law and facts. We cannot forget it took an appeal to the Supreme Court to win reversal of the Venture-Newberg line of cases which had greatly expanded the “traveling employee” concept. Fortunately, the Supreme Court restored the more traditional interpretation of the law and limited what would have been an avalanche of new claims for virtually all workers driving to and from work each day. For reasons that are unclear, it also seems if the Appellate Court issues a denial, they don’t publish it but “non-publish” it under S.Ct. Rule 23.

This repeated use of Rule 23 orders keeps appellate decisions out of public scrutiny and academia but more importantly, this rule also renders the ruling non-precedential, other than in very limited circumstances. In the age of electronic data storage and on-line access to case reporters, we find Rule 23 to be an entirely antiquated concept that should go the way of the dodo bird. The idea of Rule 23 was to make routine and mundane rulings simple and summary. What could be less mundane and routine than an IL WC Appellate denial? To the extent these “routine” decisions contain significant research, citations to numerous different prior cases and span 20 or more pages in length, it is only appropriate our industry can use them as a guide moving forward.

In our view, the last published defense ruling from that panel is Airborne Express v. IWCC where overtime was eliminated from the average weekly wage unless it was determined to be mandatory. It is hard to believe but that published pro-business ruling was way back in 2007. We have certainly experienced success before the Appellate Court since 2007 and we have written about it but are often disappointed the rulings are not published for our future reference.

As we outlined with our view of the IWCC above, we are hopeful the Appellate Court, WC Division will also move to the middle, and perhaps as important, regularly publish their detailed and well-researched rulings and help all IL citizens improve the business climate in our state.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: To Dream the Impossible Dream—The People’s Republics of Illinois and Chicago Look Over the Precipice of Massively Higher Taxes As the Republican Primary is a Month Away. What will it mean to workers’ comp??

Editor’s comment: As you read this, we see the entire State of Illinois and our nation’s third biggest city are in dire economic straits. Both governments have financial debt exponentially higher than their annual tax income, all due to government pensions. The Impossible Dream is the concept held by our government union bosses that 4-20 years of government service entitles their members to lifetime pay at the cost of Illinois and Chicago taxpayers. In our view, that can’t be done and we are all going to struggle mightily unless and until someone gets the message through the insufferably thick skulls of these union bosses that their model is unsustainable, impracticable, unworkable, hopeless, ridiculous—you pick the adjective.

Well, you might ask, didn’t the State of IL reform its government pensions? Well, that is sort of true and sort of not true. They only “reformed” four of the five state pension programs; the Judge’s Retirement System or JRS wasn’t touched and remains shockingly expensive for taxpayers. And the actual government pension reform of the four affected pensions is going to be presented to our IL Supreme Court for their approval or reversal.

The person on the point fighting against government pension reform is former Judge Gino L. DiVito. Former Judge DiVito served IL taxpayers as a jurist for 20 years and did a solid job. Your editor appeared before him on several occasions. We are certain he contributed about $200-300K to his pension over the 20 years while working for us. Former Judge DiVito’s annual state government pension is posted online. In 2012, it was $157K per year—this year, it will be about $167K. He will be receiving over $200K per year not to work as a judge in about 6-7 years. In total, by 2012, he had already received $1.8M in total lifetime pension payments—by this year lifetime pension income will be $2.1M. Here is the source of our starting numbers:

http://www.taxpayersunitedofamerica.org/wp-content/uploads/jrstop100.pdf

Former Judge DiVito’s annual pension will continue to go up 3% or about $5,000+ each year on a compounded basis. Gino DiVito is fit as a fiddle; if he lives 20-30 more years, he will receive an additional $5-8M almost all of it from IL taxpayers. That will bring lifetime pension income to $10,000,000!! Please note our view it isn’t actually a “pension” he is receiving—it is “post-government-employment” income. Gino DiVito is still working at a law firm, probably making a reasonable buck and isn’t in any way “retired.” Unlike Social Security payouts, there is no offset for an IL government worker making a lot of money; they still draw their full “pension.”

So where do you think the money to translate a $200-300K pension contribution that results in a lifetime payout of $10 million or more comes from? It comes from you and me! The media bafflingly calls the massive pension shortfall “unfunded” which is misleading—what it means is these pensioners are back on our payroll. Gino DiVito and tens of thousands of former Illinois government workers are receiving the majority of their pension income from current tax dollars. The record-high Illinois income tax increase that was supposed to end next year was completely eaten by the current cost of paying folks that no longer work for us.

The ironic aspect of what former Judge DiVito is doing is to fight before the IL Supreme Court to enforce the “pension clause” or what we call the “stick-it-to-taxpayers-clause” which he will argue won’t allow other government employees’ pensions to be trimmed to make financial sense of what is happening. If he wins, we ask the obvious question: “Then What?” If Gino DiVito is successful in that effort, the state government pension deficit by that time will probably be close to $110B and will continue to exponentially escalate. It goes up every day of every year at a rate of about $17M per day and that amount is going to keep spiraling. We have already seen IL Speaker Mike Madigan write a letter to ask Illinois public gov’t union leaders to do something about these issues and he was roundly ignored. Gino DiVito is leading the charge to fight his proffered reforms. In the last ten days, IL Senate President Cullerton openly asked the Chicago Teachers Union to see the math and problems the city is facing with their pension disaster. CTU President Karen Lewis just openly confirmed she could care less and further reiterated the union she leads is ready to fight any change with all their money, PR and power. Trust us, the State and City of Chicago are rapidly approaching the day where they aren’t going to be able to keep borrowing and issuing bonds to pay these rocketing pension costs—the government union leaders aren’t saying so but simple math indicates potentially massive tax increases are on the horizon. The worst week for taxpayers in IL history may be the week after the November gubernatorial election because that is when they will pass all the new taxes in Springfield.

What does it mean to workers’ comp? We only see one Republican candidate Bruce Rauner who is aware of this shocking math and appears to be concerned about it. Government union leaders are shockingly investing about $1M to attack him in the primary. We are sure incumbent Governor Quinn knows the challenges but he apparently is sitting on the sidelines to see if the state pension reforms he signed will pass muster before the IL Supreme Court. Governor Quinn has accepted millions and millions from the same government union leaders who are contradictorily fighting his pension reforms—the unions want to keep the Impossible Dream of lifetime pay from the taxpayers for 4-20 years of work and minimal pension contributions alive. If Bruce Rauner wins the Republican primary on March 18, he doesn’t owe anything to the government unions and will hopefully have the ear of the taxpayers and voters about the need for dramatic government pension reforms, like implementing a 401K that most businesses have.

The winner of this epic battle gets almost complete control of the Illinois Workers’ Compensation Commission. Watch this space for further news as the election unfolds. We appreciate your thoughts and comments.

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Synopsis: Top Ten Reasons to Hire Outside Defense Counsel versus the In-House Attorneys offered by your Insurance Company.

Editor’s comment: We were asked by a reader and wanted to give you our thoughts.

Top Ten reasons to consider using Keefe, Campbell, Biery & Associates as your defense team versus in-house counsel:

1. Responsiveness to the client—outside counsel reports to the client and the adjuster; in-house counsel reports to the adjuster first;

2. We want to get things right--If the adjuster makes a clerical error, oversight or is inaccurate in reserves, judgment or handling, we will quietly tell both you and the adjuster and work out issues. In our view, an in-house attorney would never challenge an adjuster. They simply don’t question or challenge their co-employee’s decision;

3. Hourly rates are lower—lots of folks are surprised by this one. In many claims, outside defense counsels hourly rates are almost always lower—if they aren’t, we can lower them. Some observers are amazed to learn of the high billing rates of in-house counsels. You also need to keep asking them for their hourly rates because, in our experience, they don’t always notify you about a rate increase;

4. Expertise—it is our view our expertise is much higher, as our law professors teach in-house attorneys;

5. Aggressive handling--we are typically much, much more aggressive in trying claims and getting them favorably settled.

6. Global legal issues are covered for our clients—in-house counsels will rarely, if ever get involved in release/resignations, countersuing a claimant or WC fraud. In-house counsels typically have a “mono-focus” of handling workers comp defense only. An outside defense firm can and will handle any legal issue you ask us to handle and we do with similarly discounted rates over the industry.

7. Knowledge of new and breaking legal developments--we watch changes in the law and IWCC like hawks and report it to several thousand readers every week. House counsels learn of changes from courthouse coffee breaks or lunchroom gossip—or from our KCB&A updates!.

8. Free legal stuff--we provide free research, advice and analysis of non-litigated claims including death claims, amputations and catastrophic losses—you don’t have to assign us a file to ask us questions via email/phone or conference. We consider it a rare setting in which a house counsel would be asked to participate in a call or answer a question about a non-litigated claim.

9. Responsiveness--while it sounds unusual, we would always want an attorney we can fire—if you aren’t happy with handling by a house counsel, it is a challenge to get them off your files. As outside counsel, we work hard to avoid making a client unhappy.

10. Winner, winner, chicken dinner—the defense team from KCB&A wins lots of cases—if you want a list of our successes, let us know. Last week was one of the most successful weeks in terms of wins per recent cases tried with five clean wins out of five cases tried—see above.

In our experience, if you want an outside attorney, be sure to ask your broker or the adjuster. Usually they will want to keep you happy since it is your money.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Welcome Aboard, Kevin Boyle!

Editor’s comment: We are thrilled to add Kevin to head up our Indiana GL/WC defense team. He is a long-time, knowledgeable and veteran defense attorney based in Bloomington, IN.

He is listed on www.linkedin.com and we will add him to our website shortly. Please consider Kevin for your statewide IN defense needs!

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Synopsis: WCRI or the Workers’ Comp Research Institute Stat Rats Document Continued Savings for IL Business in Workers’ Comp.

Editor’s comment: Please take a look. Everyone in the IL WC matrix hopes these dramatic and documented savings are going to cause IL WC premiums to proportionately drop.

New WCRI Publication:

The Effect of Reducing the Illinois Fee Schedule

In September 2011, Illinois enacted new legislation that introduced a 30 percent decrease in the fee schedule rates across all types of medical services. Important questions asked by policymakers and others after this fee schedule change are: Did a 30 percent reduction in the fee schedule produce a 30 percent change in the average medical cost of a claim? Was the 30 percent reduction too much or too little? How do the post-reform prices paid in Illinois compare with prices in other states? These important policy questions are addressed in this report.?read the abstract?order this report

This is their webinar scheduled in ten days:

Webinar - Effect of Reducing the Illinois Fee Schedule

In an effort to address one of the highest fee schedules in the nation, Illinois enacted a 30 percent reduction in their medical fee schedule in 2011. Since then many have wondered about the impact. Join WCRI researchers and co-authors, Dr. Rebecca Yang and Dr. Olesya Fomenko, for an hour-long webinar as they discuss the findings from a recently published study, The Effect of Reducing the Illinois Fee Schedule on Thursday, February 27, 2014 at 1pm ET (12pm CT, 11am MT, and 10am PT). Click here to register.

KCBA Blog

2-17-14; State of the IWCC Report from John Campbell; To Dream the Impossible Dream--GOP Primary a Month Away; Top Ten Reasons to Ask for Outside Defense Counsel and more