3-6-2017; Where Are the Wrestling Midgets In Springfield?; IL WC Wins or Loses (?) for Most Attorney Involvement per WCRI; New IL WC Arb Ketki Steffen Appointed and more

Synopsis: Where Are the Wrestling Midgets in Springfield?

Editor’s comment: Some years ago, I wanted to see Terry Gene Bollea, better known by his ring name Hulk Hogan. Not sure why but my son and I liked the guy. A friend gave me the tickets and I took my middle child, assuming it would be fun and clearly different. I assure my readers it was very different and within some reasonable parameters, innocent fun. Then at the eighth bout, they sent in the midget wrestlers. Not expecting the contrast with Hulk Hogan who is 6’8” tall, we decided we had enough of what we both felt was foolishness and left. To any of the smaller folks among my readership, I am sensitive to objections to the use of the term ‘midget’ but I don’t know how to write this and not use that troublesome word.

The point I am trying to make is my concern our General Assembly and brave Governor Rauner are descending into broad legislative and executive farce. What is happening in Springfield isn’t funny and reminds me of complete and utter chaos. If there weren’t literally billions at stake, I would rip up my tickets and leave the arena but I continue to watch and report to you.

Current IL WC Legislative Amendment Scraps Drug Formulary and Adopts Hybrid Medicare-Based Fee Schedule

Reports from Springfield confirm a workers’ comp closed drug formulary has been scrapped, and a hybrid Medicare-based fee schedule has been proposed as part of El Bargain Grande, the workers’ compensation “reform bill” still plugging along in the Illinois Senate under the tutelage of Senate President Cullerton and Sen. Christine Radogno of the Republican side of the aisle. SB 12 is part of a bigger legislative package dubbed the “Grand Bargain” aimed at breaking the longest state budget impasse in our nation’s history. If you aren’t sure, IL state gov’t is “bankrupt” under the current General Assembly and Governor to the extent we aren’t even close to paying bills on time.

Senate Bill 12 with new Amendment 3, proposes restrictions on compounded drugs and the creation of a new and silly “blue ribbon” task force to monitor medical provider profits derived from treating injured workers. We are not impressed.

This ongoing dispute between Republican Gov. Bruce Rauner and the Democratic-led legislature headed by multi-millionaire House Speaker Michael Madigan has kept Illinois government without a state gov’t spending plan for 20 months. Meanwhile, the State has racked up $12 billion in unpaid vendor bills, a $130 billion and growing unfunded (and unfundable) state government retiree pension liability and the worst credit rating of any state in the history of state credit ratings.

Governor Rauner doggedly demands workers’ compensation reform without really appearing to know what would best reform our system. I assure you he hasn’t asked me or many of my top defense competitors. Gov. Rauner is also seeking gov’t pension reforms and a property tax freeze before he will sign off on proposed legislation that would dramatically raise the state’s personal income tax from 3.5% to 4.99%, among other new and unprecedented tax increases. What we aren’t seeing from Governor Rauner, Senate President Cullerton or Senator Radogno are any true spending cuts. In my view, if you dramatically raise taxes, borrow billions but don’t cut spending, aren’t you simply treading water? Won’t the growing deficit continue to rise until you have to again raise taxes and borrow even more money? Isn’t this as silly as watching wrestling midgets?

SB 12 and other parts of the combined package — if one bill fails, they all do — were supposed to reach a full Senate vote last Wednesday, but talks broke down after Senate President Cullerton accused Governor Rauner of negotiating in bad faith.

SB 12, as introduced, from a workers comp perspective creates a closed drug formulary, capped the maximum weekly compensation PPD rate, decreased many medical fees by 15% and enacted new anti-fraud provisions. We aren’t sure if the drug and medical fee cuts are serious or more window-dressing. We are sure the cap on such costs is “real” and can’t be manipulated in our liberal and activist reviewing courts. Our problem is we have no idea and no one is telling us what the IL WC cost savings might be.

Amendment 3 to SB 12 proposes a quasi-Medicare-based fee schedule grouped into as many as 14 geo-regions. This proposal calls for the IL Workers’ Compensation Commission to calculate the maximum reimbursement rate under the current fee schedule as a percentage of what Medicare pays for each Current Procedural Terminology or CPT code and each Diagnosis-Related Group code using the most recent data available.

Thirty days after completing that, the IWCC would be required to set comp reimbursement rates at specific Medicare percentages based on the following formulas:

§  For reimbursements of 125% or less of Medicare, the maximum fee would be set at 125%.

§  For 126% to 150% of Medicare, the maximum fee for that CPT or DRG code would remain the same.

§  For Medicare rates at 151% to 225%, the rate would be adjusted to 150% of Medicare or 80% of the most recent workers’ compensation maximum amount under the current fee schedule, whichever amount is higher.

§  For Medicare percentages of 226% to 428.57%, the rate would be set at 191.25% or 70% of the most recent maximum amount under the current fee schedule, whichever is greater.

§  If more than 428.57% of Medicare, the rate would be adjusted so that it equals 275% of the most recent Medicare maximum.

Amendment 3 also scraps the closed formulary proposed in the original bill and replaces it with minor restrictions on controversial drug compounds. Payment for compounds would be allowed only if there is no readily available, commercially manufactured and therapeutically equivalent product or no other Food and Drug Administration-approved alternative that is appropriate. We assure our readers this is a solid concept but isn’t going to save you much in managing IL WC claims.

Bring on the Wrestling Midgets--Another Goofy, Dopey and Dumb-o WC Blue Ribbon Panel!!

Amendment 3 also would create the six-member Workers’ Compensation Transparency Task Force to supposedly collect data on the effects of reforms. IL WC medical providers would be required to report gross revenue attributable to workers’ compensation, their expenses, the number of comp patients treated and profits. The IL WCTTF would be required to file annual reports with the governor and legislature by Dec. 31 of each year through 2021. The task group would be disbanded the following March 31. IL WC medical providers would be subject to daily penalties of $100 for not reporting to the IL WCTTF. If a provider runs up $10,000 in penalties, you license could be suspended.

We remember the IL State Government WC Review Board or whatever that dopey blue ribbon panel is called. They took over a year to pick who was going to be on the panel. Having made the selections, the panel never, ever met. By “never met” we mean they never have ever gotten together or done literally anything! Obviously, it was public relations fluff designed to sound good. The IL WCTTF doesn’t even sound good to me.

In my view, the IL WCTTF should hire a bunch of midget wrestlers for their panel membership and start tossing each other across a room with some regularity. Maybe they can call “heads” or “tails” before one of the midgets land to decide who will be the chairperson. Kidding aside, I hate to see our State become the laughing stock of the entire country in proposing such dumb ideas as if they are actually reforming anything.

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Synopsis: Hot Off the Presses at the WCRI Annual Shindig—They Announce Illinois is No. 1 for Claimants' Attorney Involvement; N.J. a Close Contender.

Editor’s comment: Injured workers in Illinois are more likely to lawyer up than any of 18 other states studied by the Workers Compensation Research Institute, while only a small fraction of claimants in Wisconsin and Texas had legal representation, according to preliminary findings released on the close of the 2017 WCRI annual conference.

The undertone to this announcement is the message there has to be something intrinsically wrong with attorneys who are possibly protecting/guaranteeing their clients’ rights on both sides of the WC matrix. It is hard to buy that message but I want our readers to know it is out there.

Legislative policy debates about attorney involvement have disparate themes from state to state. Workers’ or Claimant attorneys argue they help workers receive moderately complex benefits injured workers might not be able to obtain themselves. They also help workers navigate a challenging system. Without question, claimant attorneys protect workers from reprisals or discrimination from the employer or insurer. Advocates for employers and insurers complain attorneys are involved more often than necessary, injured workers can often receive benefits they are entitled to without representation, and attorneys reduce the total amount of benefits that workers receive by taking fees. In our view, one feature of attorney involvement can be delay, delay and more delay.

Some existing attorney involvement is arguably unnecessary—for example, cases where the injured worker would have received a statutory entitlement that is easily defined without resorting to hiring an attorney. If unnecessary attorney involvement can be avoided, this would be a “win-win-win” scenario. Injured workers would receive benefits without the expense of paying an attorney and the delays of dispute resolution; employers and insurers would save the costs of defending the case; and increasingly resource-short state workers’ compensation agencies would have smaller caseloads to manage and would have to provide fewer dispute resolution services.

This WCRI study Avoiding Litigation: What Can Employers, Insurers, and State Workers’ Compensation Agencies Do? identifies and quantifies some of the more important factors that lead injured workers to seek representation by an attorney, providing some key take-aways for employers, claims organizations and state agencies.

Major Findings

The WCRI study found injured workers were more likely to seek attorneys when they felt threatened after a work-related injury or illness. Several sources of those perceptions of threats were found in:

•              The employment relationship. Workers believed they would be fired as a result of the injury, and/or workers perceived that the supervisor did not think the injury was legitimate.

•              The claims process. The worker perceived that his or her claim had been denied, although it was later paid. This perception may have stemmed from a formal denial, delays in payment, or communications that the worker deemed to be a denial.

Using data collected as part of its annual CompScope benchmark reports, WCRI researchers reported workers had attorneys in just over half of Illinois WC claims with more than seven days of lost work time. New Jersey was a close second at 49%, with Georgia following at 41% then California at 40% and North Carolina fifth at 38%. You may note those aren’t the five highest states in the Oregon WC Premium study—this sort of makes one wonder why WCRI focused on this issue.

On the other end of the spectrum, injured workers had legal representation in only 13% of Wisconsin claims and 14% of Texas claims. Workers had legal representation in 17% of Michigan claims and 18% of Indiana claims.

The WCRI stat rats noted that until this year, Texas limited attorney fees to $150 per hour. Texas raised that hourly fee to $200 in January. Also, Texas has strict limits on lump-sum settlements, an efficient dispute resolution process, and a faster time to the first indemnity payment.

Wisconsin also allows lump-sum settlements under limited circumstances and has an efficient disability assessment process, as well as administrative processes for resolving disputes, and clear standards for terminating temporary disability benefits, WCRI said.

Explaining the high rate of attorney involvement in Illinois, the researchers noted our WC system bases permanent partial disability benefits on several legislatively defined factors in addition to physical impairment. The WCRI researcher also felt it may be more difficult in Illinois to terminate temporary disability benefits than in other states. On top of those issues, the difference between maximum permanent partial disability and temporary total disability benefits is much wider in Illinois than in other states. The maximum TD rate in Illinois is $1,362, while the maximum PPD rate is $775, providing what WCRI felt was an “incentive” for injured workers to keep their cases open.

I don’t agree with any of their theories—if you want my thoughts on how to slow or stop high levels of attorney involvement in IL WC claims, send a reply.

If you want to read the synopsis of their study and/or buy it, go to https://www.wcrinet.org/studies/public/abstracts/avoiding_litigation-ab.html

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Synopsis: Just What IL WC Needs—Another Arbitrator!

Editor’s comment: I don’t get Governor Rauner or his IL WC team at all. I feel what IL WC and all government agencies need is less government, not more. Instead of cutting back and saving taxpayer dollars, we are hiring and hiring and hiring.

I want to make clear my political and economic views have little to do with our newest IL WC Arbitrator and assure my readers our firm has the greatest respect for her and her shining record.

We just received news Governor Rauner just appointed new Arbitrator Ketki “Kay” Steffen to work at the IWCC.

Ms. Steffen was a Cook County Circuit Court Judge pursuant to an IL Supreme Court appointment on November 12, 2015. Prior to that appointment, she was an IL WC Arbitrator for the Illinois Workers' Compensation Commission from September 2013 through November 2015.

Ms. Steffen also previously served as a Cook County Circuit Court Judge where she presided in the Domestic Violence Courtrooms in Chicago and Rolling Meadows from January of 2010 through December of 2012. Prior to serving on the bench, Judge Steffen served as an Assistant State's Attorney at the Rolling Meadows Courthouse for eighteen years.

As a prosecutor, she specialized in prosecuting violent crimes and helping keep our communities safe. She was recognized for her outstanding work in Domestic Violence and is the proud recipient of the 'Partners in Peace Award' and the 'Building Bridges Award'. Judge Steffen was instrumental in the proposal and passage of the 'Cynthia Bischof GPS Legislation' that allows judges to place tracking bracelets on repeat offenders.

As a prosecutor, Kay Steffen was an authority on International Extraditions and specialized in bringing to justice the most violent offenders who try to escape our justice system and hide in foreign countries after committing their crimes. Her outstanding work in this area has resulted in bringing back to justice several murderers and child molesters who were subsequently prosecuted and sentenced to long terms of imprisonment. Her philosophy as a prosecutor was that no one is above the law and that the safety and security of the community is vital to its well-being.

We wish her the best in her new post.