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General Assembly Passes Workers’ Compensation Reform Bill

By Christopher D. Galanos

On May 31, 2011, the General Assembly passed HB 1698, which amends the Illinois Workers’ Compensation Act. While workers’ compensation reform has always been a hot button topic for businesses in Illinois, the issue has garnered statewide attention in recent months due to concerns over the state’s economy, as well as a number of highly publicized scandals involving arbitrators of the Commission. Governor Pat Quinn has since signed the bill into law. Although not inclusive, the following is a list of some of the pertinent changes to the Act:

  • In an effort to address arbitrator misconduct, the General Assembly terminated all current Arbitrators and directed the Governor to appoint new Arbitrators soon after the Amendment goes into effect. The Governor has discretion to reappoint any incumbent Arbitrator. All Arbitrators must now be licensed attorneys (excepting any incumbent Arbitrators who the Governor elects to re-appoint) and are bound by the Canons of the Code of Judicial Conduct as adopted by the Supreme Court of Illinois. Arbitrators must also undergo training in ethics and fraud detection and there is a continuing education requirement imposed.
  • Each hearing site shall now have no fewer than three arbitrators assigned to hear cases, and the Commission shall establish a procedure to ensure that the arbitrators assigned to each hearing site are assigned cases on a random basis. No arbitrator shall hear cases in any county other than Cook for more than two years during a three-year term.
  • A 30% reduction in physician reimbursement per the Fee Schedule.
  • Adoption of AMA Guidelines Regarding Permanent Impairment as a factor that the Arbitrator must consider in determining permanent partial disability. The other enumerated factors include: the occupation of the injured employee, the age of the employee at the time of injury, the employee’s future earning capacity, and evidence of disability corroborated by the treating medical records. The arbitrator must explain how he weighed the factors.
  • In an effort to address carpal tunnel claims, the General Assembly determined that if the cause of action involves carpal tunnel, the hand is worth 190 weeks of compensation, instead of the standard 205 weeks, and the permanent partial disability shall be capped at 15%, except for cause shown by clear and convincing evidence, in which the case award shall not exceed 30% of the hand.
  • Language regarding intoxication of employees is added to Section 11. Specifically, no compensation is available if the intoxication was a proximate cause of the employee’s accidental injury or, if at the time of the employee incurred the accidental injury, the employee was so intoxicated that the intoxication constituted a departure from the employment. If at the time of the injury the blood alcohol content is .08 or higher, there will be a rebuttable presumption that the employee was intoxicated and that the intoxication was a proximate cause of the employee’s injury.
  • Wage differential awards are now only effective until the employee reaches the age of 67 or 5 years from the date the award becomes final, whichever is later.
  • To address “doctor shopping” the Commission has added provisions which allow an employer to set up a preferred provider program. While this provision does not allow the employer to explicitly direct the care of injured employees, the Act now mandates that if the employer has an approved preferred provider program set up, and the employee chooses to see a nonparticipating physician prior to reporting an injury, that is the only choice of physician the worker is allowed. Similarly, if the worker declines to see the preferred provider after reporting the injury, that is his only choice of physician.
  • Utilization review language provisions are more fully fleshed out and strengthened, and a requirement is imposed that the Commission consider an admissible utilization review when determining the reasonableness and necessity of the medical bills or treatment.
  • The Department of Insurance is to prepare a comprehensive report regarding the state of workers’ compensation in Illinois to the Governor, Chairman of the Commission, President of the Senate, Speaker of the House of Representatives, minority leader of the Senate, and minority leader of the House of Representatives on an annual basis.
  • The provisions with regard to the definition and enforcement of worker’s compensation fraud are more clearly outlined and strengthened. The Fraud and Insurance Noncompliance Unit is required to procure and implement a system utilizing advanced analytics for the detection and prevention of fraud, waste, and abuse on or before January 1, 2012. The unit must also provide a report on an annual basis regarding the number of allegations of insurance noncompliance and fraud reported to unit, the source of the reported allegations, the number of allegations investigated by the Fraud and Insurance Noncompliance Unit, and the number of criminal referrals made in accordance with the section and the entity to which the referral was made.

While this is certainly not a complete list of all the changes made by the Amendment, it does outline some of the key issues that insurers and defense attorneys must be aware of in evaluating claims under the newly amended Worker’s Compensation Act.

Originally published in the June 2011 edition of Quinn Quarterly.

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