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Newsletter of Garofalo, Schreiber, Hart & Storm, Chartered

                        LAW UPDATE - SUMMER, 2011

From the Desk of Joe Garofalo

Culminating months of hearings, consideration of numerous competing bills, and
protracted negotiations among representatives of business, labor, the medical
community and ITLA, House Bill 1698 passed both houses of the Illinois General
Assembly on May 31, 2011. The bill marks a major reform of The Illinois
Workersʼ Compensation Act. Anticipated annual savings to businesses resulting
from the changes are estimated at $500 to $700 million.

Governor Quinn signed the bill into law on June 28, 2011. The law became
effective the day it is signed into law unless specific provisions within the law
designated different effective dates. These will be discussed in this summary.

It is further necessary to understand those aspects of the law that are procedural
changes as opposed to substantive changes. With the amendments that do not
have specific effective dates assigned to them, the changes that are procedural
apply not only to future claims, but also to pending claims. The changes that are
substantive only apply to claims occurring on or after June 28, 2011. Generally
speaking, and based upon prior case law, substantive changes are those that
limit or expand the right of recovery of a party. Procedural changes are those
that impact the manner in which the parties pursue or defend their respective
rights. For example, the changes regarding wage differential are substantive, but
this is also an example of a change that has an effective date (9/1/2011)
assigned to it. An example of a procedural change, applicable to pending as well
as future claims, would be the fraud unitʼs power to subpoena records. Another
example of a change that is likely procedural is the Alternative Dispute
Resolution provision pertaining to two unions to be selected. Note that because
the benefits under the provision are not to be changed by requirement of the
statute the recovery rights of the parties are neither limited nor expanded.

We have outlined the major changes made in these Amendments. In each
portion we have recited the statutory language for the new provisions or
underlined the new provisions in the context of the existing statute. A summary
and comment follows each new change. We hope you find this to be helpful in
understanding these changes and welcome your questions and comments.

                                  Joe Garofalo
 
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                                  Garofalo,	
  Schreiber,	
  Hart	
  &	
  Storm,	
  Chartered	
  
                                        55	
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  Wacker	
  Drive	
  –	
  10th	
  Floor	
  
                                                Chicago,	
  Illinois	
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  (312)	
  670-­‐2000	
  
                                          Facsimile:	
  	
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                                                 www.GSHSLAW.COM
TABLE OF CONTENTS

PAGE   TOPICS

5      A VENDOR FOR STATE WORKERS’ COMPENSATION
       PROGRAM – effective June 28, 2011

5      STATE WORKERS’ COMPENSATION PROGRAM
       ADVISORY BOARD CREATED – effective June 28, 2011

6      FRAUD UNIT ALLOWED TO ISSUE SUBPOENAS FOR
       MEDICAL RECORDS – effective June 28, 2011

7      BURDEN OF PROOF – effective June 28, 2011

8      STANDARDS OF CONDUCT FOR ABITRATORS AND
       COMMISSIONERS – effective June 28, 2011

 9     EMPLOYEE LEASING COMPANIES REQUIRED                TO
       DISCLOSE INFORMATION – effective June 28, 2011

10     ALTERNATIVE DISPUTE RESOLUTION SYSTEM
       CREATED – effective June 28, 2011

14     CITATIONS OF EMPLOYERS FOR NON-COMPLIANCE –
       effective June 28, 2011

15     MEDICAL CHOICES (See also Preferred Provider Programs
       at page 21) - effective June 28, 2011.

17     WAGE LOSS – effective September 1, 2011

19     SPECIFIC LOSS CLAIMS FOR CARPAL TUNNEL
       SYNDROME – effective June 28, 2011

21     PREFERRED PROVIDER PROGRAMS – effective June 28,
       2011

26     EVALUATING PERMANENT DISABILITY – effective
       September 1, 2011

31     FEE SCHEDULE – effective September 1, 2011

39     MEDICAL PROVIDERS PROHIBITED FROM COLLECTING
       AGAINST CLAIMANTS FOR MEDICAL SERVICES FOR
TREATMENT DETERMINED BY THE COMMISSION TO
     BE EXCESSIVE OR UNNECESSARY – effective June 28,
     2011

41   TEMPORARY PARTIAL DISABILITY – effective June 28,
     2011

42   UTILIZATION REVIEW PROGRAMS – effective September
     1, 2011

45   INTOXICATION DEFENSE – effective September 1, 2011

49   TRAINING PROGRAMS FOR COMMISSIONERS –
     effective June 28, 2011

50   WORKERS’ COMPENSATION ADVISORY BOARD –
     effective June 28, 2011

51   AMENDMENTS PERTAINING TO ARBITRATORS –
     effective June 28, 2011

55   GIFT BAN – effective June 28, 2011

57   CLAIMS BY COMMISSION EMPLOYEES – effective June
     28, 2011

58   UNLAWFUL TO PRESENT FALSE MEDICAL BILL FOR
     PAYMENT – effective June 28, 2011

62   RECALCUATION OF PREMIUM RATES – effective June
     28, 2011

62   INSURANCE OVERSIGHT – effective April 1, 2012
A VENDOR FOR STATE WORKERS’ COMPENSATION PROGRAM

This following provisions change The Department of Central Management
Services Law of the Civil Administrative Code of Illinois:

20 ILCS 405/405-105

(10a) If the Director determines it would be in the best interests of the State and
its employees, prepare and implement a plan providing for: (i) the purchase of
workers' compensation insurance for workers' compensation liability; (ii) third-
party administration of self-insurance, in whole or in part, for workers'
compensation liability; or (iii) a combination of purchased insurance and self-
insurance for workers' compensation liability, including reinsurance or stop-loss
insurance. Any contract for insurance or third-party administration shall be on
terms consistent with State policy; awarded in compliance with the Illinois
Procurement Code; and based on, but not limited to, the following criteria:
administrative cost, service capabilities of the carrier or other contractor and
premiums, fees, or charges. By April 1 of each year, the Director must report and
provide information to the State Workers' Compensation Program Advisory Board
concerning the status of the State workers' compensation program for the next
fiscal year. Information includes, but is not limited to, documents, reports of
negotiations, bid invitations, requests for proposals, specifications, copies of
proposed and final contracts or agreements, and any other materials concerning
contracts or agreements for the program. By the first of each month thereafter,
the Director must provide updated, and any new, information to the State
Workers' Compensation Program Advisory Board until the State workers'
compensation program for the next fiscal year is determined.

Summary

We consider this change to be procedural and effective immediately. This
provides that the Director can purchase workers’ compensation insurance
and/or secure the services of a third-party administrator to administer the
workers’ compensation program for the State of Illinois and its employees.
The Director of Insurance is required to provide certain information to the
State Workers’ Compensation Program Advisory Board regarding the
status of the State workers’ compensation program.

STATE WORKERS’ COMPENSATION PROGRAM ADVISORY BOARD
CREATED

(e) There is hereby created within the Department of Central Management
Services an advisory body to be known as the State Workers' Compensation
Program Advisory Board to review, assess, and provide recommendations to
improve the State workers' compensation program and to ensure that the State
manages the program in the interests of injured workers and taxpayers. The
Governor shall appoint one person to the Board, who shall serve as the
Chairperson. The Speaker of the House of Representatives, the Minority Leader
of the House of Representatives, the President of the Senate, and the Minority
Leader of the Senate shall each appoint one person to the Board. Each member
initially appointed to the Board shall serve a term ending December 31, 2013,
and each Board member appointed thereafter shall serve a 3-year term. A Board
member shall continue to serve on the Board until his or her successor is
appointed. In addition, the Director of the Department of Central Management
Services, the Attorney General, the Director of the Department of Insurance, the
Secretary of the Department of Transportation, the Director of the Department of
Corrections, the Secretary of the Department of Human Services, the Director of
the Department of Revenue, and the Chairman of the Illinois Workers'
Compensation Commission, or their designees, shall serve as ex officio, non-
voting members of the Board. Members of the Board shall not receive
compensation but shall be reimbursed from the Workers' Compensation
Revolving Fund for reasonable expenses incurred in the necessary performance
of their duties, and the Department of Central Management Services shall
provide administrative support to the Board. The Board shall meet at least 3
times per year or more often if the Board deems it necessary or proper. By
September 30, 2011, the Board shall issue a written report, to be delivered to the
Governor, the Director of the Department of Central Management Services, and
the General Assembly, with a recommended set of best practices for the State
workers' compensation program. By July 1 of each year thereafter, the Board
shall issue a written report, to be delivered to those same persons or entities,
with recommendations on how to improve upon such practices.

Summary

This is a procedural change and effective immediately. This creates an
Advisory Board to review, assess and provide recommendations to
improve the State workers’ compensation program. The members who will
serve on the Board will be political appointees—with one member
appointed by the Governor whom will be the Chairperson and the other
members appointed by the Speaker of the House of Representatives, the
Minority Leader of the House of Representatives, the President of the
Senate, and the Minority Leader of the Senate.

FRAUD UNIT ALLOWED TO ISSUE SUBPOENAS FOR MEDICAL RECORDS

The following is a change to the Code of Civil Procedure:

Sec. 8-802. Physician and patient. No physician or surgeon shall be permitted
to disclose any information he or she may have acquired in attending any patient
in a professional character, necessary to enable him or her professionally to
serve the patient, except…upon the issuance of a subpoena pursuant to Section
25.5 of the Workers’ Compensation Act.

Summary

We consider this change to be procedural and effective immediately. As a
procedural change it would apply to currently pending investigations as
well as those occurring after June 28, 2011. This allows the fraud and non-
compliance unit of the Illinois Workers' Compensation Commission to
subpoena medical records as part of their investigation and requires
physicians to release the subpoenaed medical records.

The following are changes to the Illinois Workers' Compensation Act:

BURDEN OF PROOF

Section 1(d)

To obtain compensation under this Act, an employee bears the burden of showing, by a
preponderance of the evidence, that he or she has sustained accidental injuries arising out
of and in the course of the employment.

SUMMARY

This amendment is effective June 28, 2011. To the extent that this amounts to a
change in the law we consider it procedural and we intend to argue this point in all
pending cases. By a cursory reading of this amendment, it appears that the
legislature has simply restated the previously well-established standard a claimant
always needed to achieve in order to prove a compensable accident arising out of
and in the course of his employment. However, while codifying this well established
standard of proof, we believe that a strong argument now can be made that the
legislature also changed the standard of roof required in repetitive trauma cases.

This amendment addresses the standard of proof for proving all “accidental injuries
arising out of and in the course of the employment”. This includes accidents on
specific dates as well as injuries that “manifest themselves” as in cases brought
under a theory of repetitive trauma. For repetitive trauma cases, implicit in a
finding of “manifestation” is that the injury is causally related to the work activity
since the “manifestation” is said to occur when it becomes apparent to a reasonable
person that there exists an injury and it is causally related to the work activity. In
repetitive trauma cases brought before this amendment it was necessary for a
claimant to show only that the work activity “could or might have been a causative
factor” in order to successful carry claimant’s burden of proof on the issue of
causation. Once accomplished, a finding of “manifestation” occurred and thus the
claimant successfully proved an accident arising out of and in the course of the
employment. Accordingly, a lesser standard of proof appears to have been required
in repetitive trauma cases than in cases where a sudden definable breakdown
occurred on a specific date, where a preponderance of the evidence was required to
prove accident in such cases.

Now with this amendment, since it is necessary for a claimant to prove an accident
arising out of and in the course of employment by a preponderance of the evidence,
a claimant in a repetitive trauma case will be required to prove causation by a
preponderance of the evidence or otherwise he would be unable to carry his burden
of proof on the issue of accident by a preponderance of the evidence. Now if a
claimant in a repetitive trauma case is able to prove only that the work activity
could or might have been a causative factor in causing an injury, his claim should
fail since the burden of proof by a preponderance of the evidence on the issue of
accident will not have been achieved.

Based upon our analysis of this new amendment, we believe that a claimant’s
burden of proof in repetitive trauma cases has been raised from the heretofore
minimal burden to prove that the work activity could or might have been a
causative factor in causing an injury to one now requiring that the claimant prove
causation by a preponderance of the evidence in order to establish a compensable
accident arising out of and in the course of the employment.

STANDARDS OF CONDUCT FOR ARBITRATORS AND COMMISSIONERS

Sec. 1.1. Standards of conduct.

(a) Commissioners and arbitrators shall dispose of all Workers' Compensation
matters promptly, officially and fairly, without bias or prejudice. Commissioners
and arbitrators shall be faithful to the law and maintain professional competence
in it. They shall be unswayed by partisan interests, public clamor, or fear of
criticism. Commissioners and arbitrators shall take appropriate action or initiate
appropriate disciplinary measures against a Commissioner, arbitrator, lawyer, or
others for unprofessional conduct of which the Commissioner or arbitrator may
become aware. (b) Except as otherwise provided in this Act, the Canons of the
Code of Judicial Conduct as adopted by the Supreme Court of Illinois govern the
hearing and non-hearing conduct of members of the Commission and arbitrators
under this Act. The Commission may set additional rules and standards, not less
stringent than those rules and standards established by the Code of Judicial
Conduct, for the conduct of arbitrators. (c) The following provisions of the Code
of Judicial Conduct do not apply under this Section: (1) Canon 3(B), relating to
administrative responsibilities of Judges. (2) Canon 6(C), relating to annual filings
of economic interests. Instead of filing declarations of economic interests with the
Clerk of the Illinois Supreme Court under Illinois Supreme Court Rule 68,
members of the Commission and arbitrators shall make filings substantially
similar to those required by Rule 68 with the Chairman, and such filings shall be
made available for examination by the public. (d) An arbitrator or a Commissioner
may accept an uncompensated appointment to a governmental committee,
commission or other position that is concerned with issues of policy on matters
which may come before the arbitrator or Commissioner if such appointment
neither affects his or her independent professional judgment nor the conduct of
his or her duties. (e) Decisions of an arbitrator or a Commissioner shall be based
exclusively on evidence in the record of the proceeding and material that has
been officially noticed. Any findings of fact made by the arbitrator based on
inquiries, investigations, examinations, or inspections undertaken by the
arbitrator shall be entered into the record of the proceeding. (f) Nothing in this
Section shall prohibit an arbitrator from holding a pre-trial conference in
accordance with the rules of the Commission.

Summary

This amendment is procedural and effective June 28, 2011. This
establishes that Arbitrators and Commissioners are required by statute to
conduct themselves and treat the parties fairly and without bias or
prejudice. They are required to follow a code of judicial and professional
conduct. Their rulings and decision shall be based solely on the evidence
and record. They are also allowed to conduct a pre-trial conference. This
might seem like a small provision, but this is important because it firmly
states and establishes that the Arbitrators and Commissioners must
conduct themselves with appropriate judicial demeanor.

EMPLOYEE    LEASING           COMPANIES         REQUIRED        TO     DISCLOSE
INFORMATION

(a-2) Every Employee Leasing Company (ELC), as defined in Section 15 of the
Employee Leasing Company Act, shall at a minimum provide the following
information to the Commission or any entity designated by the Commission
regarding each workers' compensation insurance policy issued to the ELC: (1)
Any client company of the ELC listed as an additional named insured. (2) Any
informational schedule attached to the master policy that identifies any individual
client company's name, FEIN, and job location. (3) Any certificate of insurance
coverage document issued to a client company specifying its rights and
obligations under the master policy that establishes both the identity and status
of the client, as well as the dates of inception and termination of coverage, if
applicable.


Summary

This change is procedural and is effective immediately. The legislative
intent clearly is for this information to be provided by existing companies
regarding existing obligations. Leasing or loaning companies are required
to provide the Illinois Workers' Compensation Commission with
information regarding the identity of any client or borrowing company
listed on a workers’ compensation policy as an additional named insured;
information about the client or borrowing company listed on a master
insurance policy; and specifics regarding any rights and obligations,
identification information, and coverage information listed on any
certificate of coverage issued to a client company.

ALTERNATIVE DISPUTE RESOLUTION SYSTEM CREATED

(820 ILCS 305 / 4b new)

Sec. 4b. Collective Bargaining Pilot Program.

      (a) The Director of the Department of Labor shall adopt a selection process to
designate 2 labor organizations to participate in the collective bargaining process
provided for in this Section.
      (a-5) For purposes of this Section, the term "construction employer" means any
person or legal entity or group of persons or legal entities engaging in or planning to
engage in any constructing, altering, reconstructing, repairing, rehabilitating, refinishing,
refurbishing, remodeling, remediating, renovating, custom fabricating, maintaining,
landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or
subtracting from any building, structure, airport facility, highway, roadway, street, alley,
bridge, sewer, drain, ditch, sewage disposal plant, water works, parking facility, railroad,
excavation or other project, structure, development, real property or improvement, or to
do any part thereof, whether or not the performance of the work herein described
involves the addition to, or fabrication into, any project, structure, development, real
property or improvement herein described, and shall also include any moving of
construction-related materials on the job site or to or from the job site.

      For purposes of this Section, "labor organization" means the exclusive
representative of a construction employer's employees recognized or certified pursuant to
the National Labor Relations Act.

      (b) Upon appropriate filing, the Commission and the courts of this State shall
recognize as valid and binding any provision in a collective bargaining agreement
between any construction employer or group of construction employers and a labor
organization, which contains certain obligations and procedures relating to workers'
compensation. This agreement must be limited to, but need not include, all of the
following:

            (1) An alternative dispute resolution ("ADR") system to supplement, modify
or replace the procedural or dispute resolution provisions of this Act. The system may
include mediation, arbitration, or other dispute resolution proceedings, the results of
which shall be final and binding upon the parties;

            (2) An agreed list of medical treatment providers that may be the exclusive
source of all medical and related treatment provided under this Act;

           (3) The use of a limited list of impartial physicians to conduct independent
medical examinations;


           (4) The creation of a light duty, modified job, or return to work program;

            (5) The use of a limited list of individuals and companies for the
establishment of vocational rehabilitation or retraining programs that may be the
exclusive source of rehabilitation and retraining services provided under this Act; or

            (6) The establishment of joint labor management safety committees and
safety procedures.

       (c) Void agreements. Nothing in this Section shall be construed to authorize any
provision in a collective bargaining agreement that diminishes or increases a construction
employer's entitlements under this Act or an employee's entitlement to benefits as
otherwise set forth in this Act. For the purposes of this Section, the procedural rights and
dispute resolution agreements under subparagraphs (1) through (6) of subsection (b) of
this Section are not agreements which diminish or increase a construction employer's
entitlements under this Act or an employee's entitlement to benefits under this Act. Any
agreement that diminishes or increases a construction employer's entitlements under this
Act or an employee's entitlement to benefits as set forth in this Act is null and void.
Nothing in this Section shall be construed as creating a mandatory subject of bargaining.

      (d) Form of agreement. The agreement reached herein shall demonstrate that:
            (1) The construction employer or group of construction employers and the
recognized or certified exclusive bargaining representative have entered into a binding
collective bargaining agreement adopting the ADR plan for a period of no less than 2
years;

             (2) Contractual agreements have been reached with the construction
employer's workers' compensation carrier, group self-insurance fund, and any excess
carriers relating to the ADR plan;

          (3) Procedures have been established by which claims for benefits by
employees will be lodged, administered, and decided while affording procedural due
process;

           (4) The plan has designated forms upon which claims for benefits shall be
made;

             (5) The system and means by which the construction employer's obligation to
furnish medical services and vocational rehabilitation and retraining benefits shall be
fulfilled and provider selected;
(6) The method by which mediators or arbitrators are to be selected.

      (e) Filing. A copy of the agreement and a statement identifying the parties to the
agreement shall be filed with the Commission. Within 21 days of receipt of an agreement,
the Chairman shall review the agreement for compliance with this Section and notify the
parties of its acceptance or notify the parties of any additional information required or
any recommended modification that would bring the agreement into compliance. If no
additional information or modification is required, the agreement shall be valid and
binding from the time the parties receive acceptance of the agreement from the Chairman.
Upon receipt of any requested information or modification, the Chairman shall notify the
parties within 21 days whether the agreement is in compliance with this Section. All
rejections made by the Chairman under this subsection shall be subject to review by the
courts of this State, said review to be taken in the same manner and within the same time
as provided by Section 19 of this Act for review of awards and decisions of the
Commission. Upon the review, the Circuit Court shall have power to review all questions
of fact as well as of law.

      (f) Notice to insurance carrier. If the construction employer is insured under this
Act, it shall provide notice to and obtain consent from its insurance carrier, in the manner
provided in the insurance contract, of its intent to enter into an agreement as provided in
this Section with its employees.

     (g) Employees' claims for workers' compensation benefits.

           (1) Claims for benefits shall be filed with the ADR plan administrator within
those periods of limitation prescribed by this Act. Within 10 days of the filing of a claim,
the ADR plan administrator shall serve a copy of the claim application upon the
Commission, which shall maintain records of all ADR claims and resolutions.

           (2) Settlements of claims presented to the ADR plan administrator shall be
evidenced by a settlement agreement. All such settlements shall be filed with the ADR
plan administrator, who within 10 days shall forward a copy to the Commission for
recording.

            (3) Upon assignment of claims, unless settled, mediators and arbitrators shall
render final orders containing essential findings of fact, rulings of law and referring to
other matters as pertinent to the questions at issue. The ADR plan administrator shall
maintain a record of the proceedings.

      (h) Reporting requirements. Annually, each ADR plan administrator shall submit a
report to the Commission containing the following information:

           (1) The number of employees within the ADR program;
(2) The number of occurrences of work-related injuries or diseases;

           (3) The breakdown within the ADR program of injuries and diseases
               treated;

           (4) The total amount of disability benefits paid within the ADR
               program;

           (5) The total medical treatment cost paid within the ADR program;

           (6) The number of claims filed within the ADR program; and

           (7) The disposition of all claims.

Summary

Because this amendment is dependent on the collective bargaining agreements of the
selected unions, and assuming each CBA contemplates both future and pending
claims, this change can be considered procedural. It is effective June 28, 2011. In
addition, the change specifically states (para. c) that nothing in this Section
diminishes or increases rights or benefits to which the parties are otherwise entitled
under the current Act. New Section 4b makes no immediate change in the day-to-
day operations of the Illinois Workers' Compensation Commission; but it does
introduce concepts that depart from how the workers’ compensation program has
been administered for generations.

The new section does not apply to everyone. It is only an invitation to several Illinois
construction-industry labor unions to join with their respective construction
employers in designing an experimental program to manage work-related injuries,
and possibly even to adjudicate them. The Illinois Secretary of Labor will identify
two collective bargaining units to submit proposals.

Such experimental programs could continue to utilize the administrative apparatus
of the Illinois Workers' Compensation Commission, but are allowed to “streamline”
it with any of the following:

   1.     1. An exclusive panel of medical treatment providers,
   2.     2. An exclusive panel of doctors to perform Independent medical
          evaluations,
   3.     3. An exclusive return to work program,
   4.     4. An excusive panel rehabilitation service providers, or
   5.     5. Joint safety committees or procedures.

The experiment may go much further than just these five streamlining measures. A
labor management plan may abandon the Illinois Workers' Compensation
Commission entirely and substitute a private alternative dispute resolution system
that is binding on the parties. In general, alternative dispute resolution uses private
Arbitrators hired by the parties in place of public employee Arbitrators and
Commissioners assigned by the government.


 “Privatization”, however, is not unlimited since the new Section 4b forbids any
labor-management plan from increasing or decreasing the employer’s or employee’s
existing rights and responsibilities under the Workers’ Compensation Act. We
believe that the General Assembly intended that the substance of the Workers’
Compensation Act will still apply, but the procedures under it may change and that
it may be administered privately rather than publicly. Said another way, the new
section addresses the how, not the what.

It strikes us as ironic that the level of dissatisfaction with the current system has
reached a point where an “alternative” is being explored. After all, workers
compensation was the original “alternative dispute resolution”, born nearly 100
years ago out of similar dissatisfaction with the legal system that existed at the time.

Section 4(d)

CITATIONS OF EMPLOYERS FOR NON-COMPLIANCE

An investigator with the Illinois Workers' Compensation Commission Insurance
Compliance Division may issue a citation to any employer that is not in compliance with
its obligation to have workers' compensation insurance under this Act. The amount of the
fine shall be based on the period of time the employer was in non-compliance, but shall
be no less than $500, and shall not exceed $2,500. An employer that has been issued a
citation shall pay the fine to the Commission and provide to the Commission proof that it
obtained the required workers' compensation insurance within 10 days after the citation
was issued. This Section does not affect any other obligations this Act imposes on
employers.

Summary

This is a substantive change and is effective as of June 28, 2011. This
section has been amended to allow Insurance investigators the authority to
issue citations in the amount of $500 to $2,500 to “any Employer that is not
in compliance with its obligations to have workers’ compensation
insurance.” After receiving a citation, an Employer will have 10 days to
pay the fine and provide proof that it secured proper workers’
compensation insurance.

This provision strengthens the 2005 amendments, which allowed for both
Criminal and Civil liability for any Employer who knowingly failed to
provide worker’s compensation coverage for its employees.
MEDICAL CHOICES

Section 8(a):

Every hospital, physician or surgeon or other person rendering treatment or
services in accordance with provisions of this Section shall upon written request
furnish full and complete reports thereof to, and permit their records to be copied
by, the employer, the employee or his dependents, as the case may be, or any
other party to any proceeding for compensation before the Commission or their
attorneys.

Notwithstanding the foregoing, the employer's liability to pay for such medical
services selected by an employee of an employer without an approved preferred
provider program pursuant to Section 8.1a on the date the employee sustained
his or her accidental injuries shall be limited to:

(1) all first aid and emergency treatment; plus

(2) all medical surgical and hospital services provided by the physician, surgeon
or hospital initially chosen by the employee or by other physician , consultant,
expert, institution or other provider of services recommended by said initial
service provider or any subsequent provider of medical services in the chain of
referrals from said initial service provider; plus

(3) all medical, surgical and hospital services provided by any second physician,
surgeon or hospital subsequently chosen by the employee or by any other
physician, consultant, expert, institution or other provider of services
recommended by said second service provider or any subsequent provider of
medical services in the chain of referrals from said second service provider.
There after the employer shall select and pay for all necessary medical, surgical
and hospital treatment and the employee may not select a provider of medical
services at the employer's expense unless the employer agrees to such
selection. At any time the employee may obtain any medical treatment he
desires at his own expense. This paragraph shall not affect the duty to pay for
rehabilitation referred to above.

(4) The following shall apply for injuries occurring on or after the effective date of
this amendatory Act of the 97th General Assembly and only when an employer
has an approved preferred provider program pursuant to Section 8.1a on the
date the employee sustained his or her accidental injuries:

    (A) The employer shall, in writing, on a form promulgated by the
Commission, inform the employee of the preferred provider program;

       (B) Subsequent to the report of an injury by an employee, the employee
may choose in writing at any time to decline the preferred provider program, in
which case that would constitute one of the two choices of medical providers to
which the employee is entitled under subsection (a)(2) or (a)(3); and

      (C) Prior to the report of an injury by an employee, when an employee
chooses non-emergency treatment from a provider not within the preferred
provider program, that would constitute the employee's one choice of medical
providers to which the employee is entitled under Section (a)(2) or (a)(3).

Summary

This is a substantive change, effective June 28, 2011, and impacting claims
on or after that date.       This amendment to the Illinois Workers'
Compensation Commission Act provides that the employer is entitled to
provide a written and approved medical provider program pursuant to
Section 8.1a of the Act. To do so, the Employer must provide written notice
of the program on a form supplied by the Illinois Workers' Compensation
Commission. As of the writing of this summary the forms do not yet exist.

If Employer does not have an approved provider plan, the employee's
rights to treatment do not change from the existing statute.

If the employee reports an accident and provides a written declination of
treatment within the Preferred Provider Network, such declination
constitutes one of the employee's two choices of medical providers.

If the employee does not report an accident and seeks non-emergency
treatment outside of the preferred provider plan, the employee is not
entitled to seek yet another medical provider because he exercised his
choice by seeking non-emergency care, his other choice being waived by
his implicit rejection of the employer’s PPP. However, the claimant could
still treat with the PPP if he did not provide a written rejection of the PPP.


The primary change to this section is the employer's ability to provide a
preferred provider plan. This is obviously a response to the freedom that
was previously provided the employee and the high medical fees that were
associated. In only those instances where the employer does not provide
a preferred provider plan is the petitioner given the freedom same to select
a doctor that currently exists.

WAGE LOSS

Section 8(d)1 pertains to claims for wage differential. This provision previously
stated:
“If, after the accidental injury has been sustained, the employee as a result
thereof becomes partially incapacitated from pursuing his usual and customary
line of employment, he shall, except in cases compensated under the specific
schedule set forth in paragraph (e) of the Section, receive compensation for the
duration of his disability, subject to the limitations as to maximum amounts fixed
in paragraph (b) of the Section, equal to 66-2/3% of the difference between the
average amount which he would be able to earn in the full performance of his
duties in the occupation in which he was engaged at the time of the accident and
the average amount which he is earning or is able to earn in some suitable
employment or business after the accident.”

What was added.

“For accidental injuries that occur on or after September 1, 2011, an award for
wage differential under this subsection shall be effective only until the employee
reaches the age of 67 or 5 years from the date the award becomes final,
whichever is later.”

Summary

This is a substantive change effective September 1, 2011. This should
represent a savings for the respondent, the degree of which will depend
upon each case scenario. On average, the life expectancy of males is 80
years and females 83 years. At the 67 year cap, this is a reduction of 13
and 16 years of wage differential benefits respectively.

What this means in dollars and cents will vary with each case. If we
assume a maximum wage differential rate of $930.39, thirteen years of
benefits equals $628,943.64. Sixteen years of benefits equals $774,084.48.
At a more modest $275.00 per week, thirteen years of benefits is
$185,900.00. At sixteen years, $228,800.00.

The present cash value savings are also encouraging. For example,
assume a 55 year old male with a maximum wage differential rate of
$930.39. The present cash value of such a claim, assuming a 5% rate of
return before the amendment is $681,866.82. For an accident occurring
after September 1, 2011, the same claim has a value of $428,808.00. This
results is a potential savings of $253,057.89.

Assuming a wage differential rate of $275.00 per week, the same scenario
results in a pre-amendment present cash value of $191,818.77. Post-
amendment value is $126,745.19 a difference of $65,073.58.

Practical application.

At present, the majority of wage differential claims are resolved via
settlement. This is due in large part to petitioner’s desire for a lump sum
settlement and the insurance carrier’s desire to close the file. The ability
to reach a settlement and the settlement value of the case involves several
factors only one of which is the life expectancy of the claimant. More often
than not, the deciding factors in the resolution of a wage differential are a
disputed earning potential, rate of return and or the degree that the present
cash value can be discounted in exchange for a lump sum payment. With
the advent of the wage differential cap, we will be armed with yet another
factor we can use to bring about a favorable outcome.

We are very concerned with the language tying the wage differential cap of
5 years to when “the award becomes final”. With this language, we can
conceive of situations, particularly as petitioner gets closer to age 67, in
which it would be in the claimant’s best interest to hold off proceeding to
trial for as long as possible. We can and will motion matters for hearing
where an Application has been filed. The difficulty will lie in cases in which
no dispute exists. Case law states that wage differential benefits are to be
paid once the extent of the differential is known. There is no requirement
for an Application to be filed. The statute of limitations allows a filing of an
Application two years from the last payment of benefits. Under this
scenario we can envision situations in which the “award” is never entered
or an award is entered more than 5 years after the petitioner has reached
the age of 67.

In these cases, our ability to resolve matters at favorable rates and
discounts will depend significantly upon either the claimant’s or opposing
counsel’s desire for a lump sum over weekly benefits.

SPECIFIC LOSS CLAIMS FOR CARPAL TUNNEL SYNDROME

Section 8(e) pertains to specific loss claims. This provision has been modified so
as to reduce the overall exposure for hand injuries and specifically place limits on
carpal tunnel syndrome. The provision previously stated:

“For accidental injuries in the following schedule, the employee shall receive
compensation for the period of temporary total incapacity for work resulting from
such accidental injury, under subparagraph 1 of paragraph (b) of this Section,
and shall receive in addition thereto compensation for a further period for the
specific loss herein mentioned, but shall not receive any compensation under any
other provisions of this Act. The following listed amounts apply to either the loss
of or the permanent and complete loss of use of the member specified, such
compensation for the length of time as follow:

Hand-

190 weeks if the accidental injury occurs on or after the effective date of the
amendatory Act of the 94th General Assembly but before February 1, 2006.

205 weeks if thee accidental injury occurs on or after February 1, 2006.”

What was added:

“190 weeks if the accidental injury occurs on or after the effective date of this
amendatory Act of the 97th General Assembly and if the accidental injury
involves carpal tunnel syndrome due to repetitive or cumulative trauma, in which
case the permanent partial disability shall not exceed 15% loss of use of the
hand, except for cause shown by clear and convincing evidence and in which
case the award shall not exceed 30% loss of use of the hand.”

Summary:

This is a substantive change effective June 28, 2011 and applicable only to
accidents occurring after that date. Some practitioners have questioned
whether this change reduces the number of weeks to be used in
permanency calculations for ALL hand injuries. If that is the case, this
would represent an approximate 7% savings on all hand injuries. However,
most practitioners interpret this change to 190 weeks for the specific loss
of a hand to apply only to carpal tunnel syndrome cases and only if they
are causally related to repetitive trauma or cumulative trauma.

Carpal tunnel injuries caused by repetitive or cumulative trauma have been
further limited to 15% loss of the hand, or 28.5 weeks of compensation. In
extreme cases, shown by clear and convincing evidence, the permanency
can be increased to 30% loss of the hand or 57 weeks of compensation.

Practical application

Carpal tunnel syndrome claims at the Commission were fairly common and
were generally valued based upon whether surgery was required, the end
result and whether the condition involved the dominant hand. For a non-
operated carpal tunnel syndrome with a full duty release, a typical
exposure would be in the area of 10% of the hand and possibly 12% loss of
use if it were the dominant hand. The new maximum percentage enacted
will not affect these claims, though we will certainly argue that the intention
of the changes was a reduction in permanency. If 15% loss is meant to
represent an operated carpal tunnel syndrome with favorable results, a
more appropriate award for an un-operated carpal tunnel syndrome should
be in the area of 5% to 7% loss of the hand. The inclusion of AMA guides,
discussed elsewhere, will also play a role in these assessments.

If surgery were required, and again assuming a return to full duty, the
typical exposure for such a claim would be in the area of 20% loss of use of
the hand and as high as 25% loss of use if it were the dominant hand. In
these types of claims, the recent changes should result in significant
savings. Again assuming an average weekly wage of $600.00 per week, an
operated carpal tunnel syndrome in the dominant hand would have had an
exposure in the area of $18,450.00. Post-Amendment, that same claim will
have an exposure of $10,260.00, a difference of $8,190.00. The savings
increase as the average weekly wage increases. Assuming an average
weekly wage of $1000.00 per week, the operated carpal tunnel syndrome
has an exposure of up to $30,750.00. Post-Amendment, the same claim will
have an exposure of $17,100.00, a savings of $13,650.00.

What the Commission means by “except for cause shown by clear and
convincing evidence and in which case the award shall not exceed 30%
loss of use of the hand” is not particularly clear. We can only surmise that
under certain circumstances, the Arbitrator can award up to 30% loss of
the hand. At present, 30% loss of use of the hand for a carpal tunnel
syndrome claim would be exceptionally high and would only be seen in
unusual circumstances. We suspect the Petitioner’s bar will focus on this
language to push for decisions that are consistent with the exposure of
between 20% and 25% loss of use of the hand.

In addition to the discussion regarding whether this change applies to all
hand injuries, an additional debate has ensued regarding the level of proof
required to meet the burden to establish a compensable claim. Most
practitioners have taken the position that the claimant need only prove by a
preponderance of the evidence that he or she has sustained a
compensable carpal tunnel syndrome as a result of repetitive or cumulative
trauma. Some feel, however, that the legislature intended to increase the
burden of proof to that of clear and convincing evidence not only for the
enhanced percentage loss (over 15%), but also for causation.

Certainly, our position will be that the limiting nature of the language
demonstrates a clear intent to reduce the exposure on all carpal tunnel
claims caused by repetitive or cumulative trauma. The language “except
for cause shown by clear and convincing evidence” would denote an
exception to the norm and should be an indication of an unusual
circumstance needed to receive any award higher than the 15% mandated
by the Amendment (or perhaps even as to causal relationship).

The Amendments to the Act do not preclude a claimant from seeking
benefits under the previously discussed Section 8(d)1 of the Act.
Accordingly, the caps placed on carpal tunnel syndrome claims will not
come into affect in situations in which ultimate restrictions are such that a
claimant is unable to return to his customary line of work resulting in a
reduction in wages.
PREFERRED PROVIDER PROGRAMS

820 ILCS 305/8.1a

Sec. 8.1a. Preferred Provider Programs. Starting on the effective date of this
amendatory Act of the 97th General Assembly, to satisfy its liabilities under this
Act for the provision of medical treatment to injured employees, an employer may
utilize a preferred provider program approved by the Illinois Department of
Insurance as in compliance with Sections 370k, 370l, 370m, and 370p of Article
XX-1/2 of the Illinois Insurance Code. For the purposes of compliance with
these Sections, the employee shall be considered the "beneficiary" and the
employer shall be considered the "insured". Employers and insurers contracting
directly with providers or utilizing multiple preferred provider programs to
implement a preferred provider program providing workers' compensation
benefits shall be subject to the above requirements of Article XX-1/2 applicable to
administrators with regard to such program, with the exception of Section 370l of
the Illinois Insurance Code.

      (a) In addition to the above requirements of Article XX-1/2 of the Illinois
Insurance Code, all preferred provider programs under this Section shall meet
the following requirements:

          (1) The provider network shall include an adequate number of
occupational and non-occupational providers.

           (2) The provider network shall include an adequate number and type
of physicians or other providers to treat common injuries experienced by injured
workers in the geographic area where the employees reside.

            (3) Medical treatment for injuries shall be readily available at
reasonable times to all employees. To the extent feasible, all medical treatment
for injuries shall be readily accessible to all employees.

            (4) Physician compensation shall not be structured in order to achieve
the goal of inappropriately reducing, delaying, or denying medical treatment or
restricting access to medical treatment.

           (5) Before entering into any agreement under this Section, a program
shall establish terms and conditions that must be met by non-institutional
providers wishing to enter into an agreement with the program. These terms and
conditions may not discriminate unreasonably against or among non-institutional
providers. Neither difference in prices among non-institutional providers
produced by a process of individual negotiation nor price differences among
other non-institutional providers in different geographical areas or different
specialties constitutes unreasonable discrimination.
(b) The administrator of any preferred provider program under this Act that
uses economic evaluation shall file with the Director of Insurance a description of
any policies and procedures related to economic evaluation utilized by the
program. The filing shall describe how these policies and procedures are used in
utilization review, peer review, incentive and penalty programs, and in provider
retention and termination decisions. The Director of Insurance may deny
approval of any preferred provider program that uses any policy or procedure of
economic evaluation to inappropriately reduce, delay or deny medical treatment,
or to restrict access to medical treatment. Evaluation of providers based upon
objective medical quality and patient outcome measurements, appropriate use of
best clinical practices and evidence based medicine, and use of health
information technology shall be permitted. If approved, the employer shall
provide a copy of the filing to all participating providers.

           (1) The Director of the Department of Insurance shall make each
administrator's filing available to the public upon request. The Director of the
Department of Insurance may not publicly disclose any information submitted
pursuant to this Section that is determined by the Director of the Department of
Insurance to be confidential, proprietary, or trade secret information pursuant to
State or federal law.

            (2) For the purposes of this subsection (b), "economic evaluation" shall
mean any evaluation of a particular physician, provider, medical group, or
individual practice association based in whole or in part on the economic costs or
utilization of services associated with medical care provided or authorized by the
physician, provider, medical group, or individual practice association. Economic
evaluation shall not include negotiated rates with a provider.

      (c) Except for the provisions of subsection (a) of Section 26 and for injuries
occurring on or after the effective date of this amendatory Act of the 97th General
Assembly, an employee of an employer utilizing a preferred provider program
shall only be allowed to select a participating network provider from the network.
[emphasis added] An employer shall be responsible for: (i) all first aid and
emergency treatment; (ii) all medical, surgical, and hospital services provided by
the participating network provider initially selected by the employee or by any
other participating network provider recommended by the initial participating
network provider or any subsequent participating network provider in the chain of
referrals from the initial participating network provider; and (iii) all medical,
surgical, and hospital services provided by the participating network provider
subsequently chosen by the employee or by any other participating network
provider recommended by the subsequent participating network provider or any
subsequent participating network provider in the chain of referrals from the
second participating network provider. An employer shall not be liable for
services determined by the Commission not to be compensable. An employer
shall not be liable for medical services provided by a non-authorized provider
when proper notice is provided to the injured worker.
(1) When the injured employee notifies the employer of the injury or
files a claim for workers' compensation with the employer, the employer shall
notify the employee of his or her right to be treated by a physician of his or her
choice from the preferred provider network established pursuant to this Section,

and the method by which the list of participating network providers may be
accessed by the employee, except as provided in subsection (a)(4) of Section 8.

          (2) Consistent with Article XX-1/2 of the Illinois Insurance Code,
treatment by a specialist who is not a member of the preferred provider network
shall be permitted on a case-by-case basis if the medical provider network does
not contain a physician who can provide the approved treatment, and if the
employee has complied with any pre-authorization requirements of the preferred
provider network. Consent for the employee to visit an out-of-network provider
may not be unreasonably withheld. When a non-network provider is authorized
pursuant to this subparagraph (2), the non-network provider shall not hold an
employee liable for costs except as provided in subsection (e) of Section 8.2.

            (3) The Director shall not approve, and may withdraw prior approval of,
a preferred provider program that fails to provide an injured employee with
sufficient access to necessary treating physicians, surgeons, and specialists.

      (d) Except as provided in subsection (a)(4) of Section 8, upon a finding by
the Commission that the care being rendered by the employee's second choice
of provider within the employer's network is improper or inadequate, the
employee may then choose a provider outside of the network at the employer's
expense. The Commission shall issue a decision on any petition filed pursuant to
this Section within 5 working days.

     (e) The Director of the Department of Insurance may promulgate such rules
as are necessary to carry out the provisions of this Section relating to approval
and regulation of preferred provider programs.

Summary

This amendment is substantive and effective as of June 28, 2011. This is a
wholly new section added to the Act with these latest Amendments. This
provision essentially gives employers the option to satisfy liability for
medical treatment under the Act through the use of a Preferred Provider
Program (PPP).

The PPP must be approved by the Illinois Department of Insurance and
comply with applicable portions of the Illinois Insurance Code. (in order to
deal with issues of compliance with the applicable portions of the
Insurance Code the employer shall be considered the “Insured” and the
employee shall be considered the “Beneficiary”).

Beyond being subject to the approval of the Illinois Department of
Insurance the PPP must also meet the following requirements:

1.  Include an “adequate” number of BOTH occupational and non-
occupational medical providers

2. Include an “adequate” number and type of physicians (or other
providers) to treat common injuries experienced by injured workers in the
geographic area where the employees reside (not simply where the
workplace is located). It is entirely unclear how this will work for
companies that frequently employ union members who travel across the
state or even from out-of-state. It is unclear whether “reside” refers to the
employee’s permanent residence or, if he / she is traveling, to his or her
temporary / motel residence.

3. Medical treatment for injuries shall be “readily available” and “readily
accessible”, as reasonable, to ALL employees

4. Physician compensation SHALL NOT be structured in a manner that
could be said to reduce, delay or deny medical treatment or restrict access
to such treatment. In other words, compensation cannot be so low that the
employees cannot get access to the physicians.

5. The PPP must establish terms/conditions that must be met for a
provider to be able to become a part of the PPP and such terms/conditions
cannot discriminate unreasonably.          The price of services as a
term/condition does not constitute discrimination. However, the employer
must file with the Department of Insurance a written description of all
economic valuations that are utilized as terms/conditions and the Director
of Insurance may deny approval of a PPP that uses any such
term/condition in a manner felt to reduce, delay, or deny medical treatment.
The employer must provide a copy of the network filing to all participating
providers and this shall be a matter of public record.

An injured employee of an employer that has established such a PPP is
only permitted to select a physician from those within the network.
Assuming the employee does so, the employer shall be liable for:

1. All first aid and emergency treatment,

2. All medical, surgical and hospital services within the network from
employees first choice of network provider or “within the chain of referral”
from the initial network provider
3. All medical, surgical and hospital services arising from employees
second choice and within the “chain of referral” from that choice. An
employer is NOT liable for any medical services either found not to be
compensable by the IWCC or for any services provided by a non-
authorized provider when proper notice is given the employee.

When an employee reports an injury and/or files an Application the
employer must notify the employee of his/her right to obtain medical
treatment from a physician within the PPP network, and instructions to
access the list of network providers.

An exception allows an employee to obtain treatment from a specialist who
is NOT a member of the PPP on a ‘case-by-case” basis if the PPP does not
contain a physician who can provide the treatment in question (for
example, a cardiologist, a dermatologist, a pulmonologist) and the
employee complies with any pre-authorization requirements of the PPP.
An employer may NOT unreasonably deny such care.

If the Illinois Workers' Compensation Commission finds that medical care
rendered by employee’s second choice of provider within the PPP is
improper or inadequate, the employee may then choose a provider
OUTSIDE the PPP at the employer’s expense. This can be determined by
way of a Section 8(a) Petition and a Decision must be filed within five (5)
business days of any such hearing (expedited process).

Historically, case law has established that third parties (employers,
adjusters) may not communicate with a treating doctor about treatment
issues associated with an injured worker. This amendment does not
change that prohibition even though the employer is instrumental in
establishing the panel and selecting the panel members that will, in whole
or part, treat the injured employee. The exception to this restriction is
either that the employer obtain permission (a release) from the employee,
in which case communication is allowed, or that the employer seek only
the minimal information necessary to administer the claim, e.g. the
diagnosis, prognosis, treatment	
  plan,	
  restrictions, and copies of records or
reports.

By the same token, assembling a panel does not mean that the panel
members are the agents of the employer or speak for the employer.
Nevertheless, it is an accepted observation before the Commission that if
an employer selects a doctor to conduct an examination (Section 12) or to
provide treatment, the presumption is that the employer respects the
doctor’s qualifications and opinions; giving the impression of agency
where none actually exists.

This amendment clearly creates some medical control heretofore unknown
in Illinois workers' compensation law. The employees, whether (union)
organized or not, will not have any input regarding the makeup of the
panel(s). On the other hand, the legislation makes it possible for doctors
historically known as being “petitioner’s doctors” to seek to join local
panels. Paragraph 5, above, requires that the rules to join a panel may not
be discriminatory. The legislation does not establish how large a panel
may be, only that it may not be so small as to prevent the employees from
getting access to medical care with customary treating professionals
(orthopedists, neurologists, neurosurgeons, physiatrists, occupational
medicine specialists). The reference to “other providers” could allow the
inclusion of, for instance, chiropractors or other healers.

EVALUATING PERMANENT DISABILITY

(820 ILCS 305/8.1b new)

Sec. 8.1b. Determination of permanent partial disability. For accidental injuries
that occur on or after September 1, 2011, permanent partial disability shall be
established using the following criteria:

      (a) A physician licensed to practice medicine in all of its
      branches preparing a permanent partial disability impairment
      report shall report the level of impairment in writing. The
      report shall include an evaluation of medically defined and
      professionally appropriate measurements of impairment that
      include, but are not limited to: loss of range of motion; loss
      of strength; measured atrophy of tissue mass consistent with
      the injury; and any other measurements that establish the
      nature and extent of the impairment. The most current edition
      of the American Medical Association's "Guides to the Evaluation
      of Permanent Impairment" shall be used by the physician in
      determining the level of impairment.

      (b) In determining the level of permanent partial
      disability, the Commission shall base its determination on the
      following factors:

             (i) the reported level of impairment pursuant to subsection (a);
             (ii) the occupation of the injured employee;
             (iii) the age of the employee at the time of the injury;
             (iv) the employee's future earning capacity; and
             (v) evidence of disability corroborated by the treating medical
                  records. No single enumerated factor shall be the sole
                 determinant of disability. In determining the level of disability, the
                 relevance and weight of any factors used in addition to the level
                 of impairment as reported by the physician must be explained in
a written order.




Summary

This is a substantive change in the law. The legislature has pronounced
that the effective date is September 1, 2011. For accidental injuries that
occur on or after September 1, 2011, permanent partial disability shall be
established using following criteria:

A.    Level of Impairment:

      Physician licensed to practice medicine in all its branches preparing
      a permanent partial disability impairment report shall report written
      level of impairment and shall include evaluation of medically defined
      and professionally appropriate measurements of impairment that
      include, but are not limited to:

       1.   Loss of range of motion

       2.   Loss of strength

       3.   Measured atrophy of tissue mass consistent with the injury

       4.   Any other measurements that establish the nature and extent
            of the injury

       5.   The most current edition of the American Medical
            Association's "Guides to the Evaluation of Permanent
            Impairment" shall be used by the physician in determining the
            level of impairment. Currently the 6th Edition, 2008 is the most
            current edition. In AMA Guides (6th edition 2008), the three–
            step process for evaluating impairment is contained in section
            2.7. This section is required reading, as it contains many
            important requirements for the impairment rater. See
            attachment Section 2.7.

            a.       Step 1 is clinical evaluation, which requires a review of
                     medical records and documenting inconsistencies. The
                     examinee should be encouraged to give full effort in the
                     physical examination, and the physician should review
                     the diagnostic studies.
b.     Step 2 is analysis of findings, including diagnoses, MMI
                   status, current abilities for activities of daily (ADLs), and
                   flagging of missing data.


            c.     Step 3 is a specific discussion of how the impairment
                   rating was calculated, and the discussion should cite
                   the pages and tables in the AMA Guides that are used
                   and how they are used.

B. Permanent Partial Disability:

In determining PPD, the Commission shall base its determination on the
following factors:

      1.    The reported level of impairment pursuant to subsection (a)

      2.    The occupation of the injured employee;

      3.    The age of the employee at the time of the injury;

      4.    The employee's future earning capacity; and

      5.    Evidence of disability corroborated by the treating medical
            records.

C. No single enumerated factor shall be the sole determinant of disability.

D. Relevance and weight of factors must be explained in writing.

      In determining the level of disability, the relevance and weight of any
      factors used in addition to the level of impairment as reported by the
      physician must be explained in a written order.

E.    Questions:

      1.    Section 12 examinations, commonly known as Independent
            medical examinations are to be done by “duly qualified
            medical practitioner or surgeon selected by the employer” and
            “for the purpose of determining the nature, extent, and
            probable duration and probable duration of the injury received
            by the employee, and for the purpose of ascertaining the
            amount of compensation which may be due the employee from
            time to time for disability” according to the provisions of the
            Act. Section 8.1b limits the type of evidence that can be relied
upon by the Illinois Workers' Compensation Commission in
            determining PPD. It refers to physicians “licensed to practice
            medicine in all its branches” issuing a permanent partial
            disability impairment report. Does this limit physicians such
            as chiropractors and podiatrists from issuing permanent
            partial disability impairment reports or mean that reports from
            such physicians cannot be relied upon by the Commission,
            even though Section 12 does not specify this?


2.     Section 8.1b places no limitation on treating physicians “licensed to
practice medicine in all its branches” from issuing permanent partial
disability impairment reports as long as its requirements are followed.
However, if such reports are contained in the patient’s medical records, are
they subject to an objection by an employer attorney as being made in
anticipation of litigation so that such reports do not go into evidence
automatically under Section 16?

Section 2.7 of Guides to the Evaluation of Permanent Impairment, 6th
edition, 2008 - Preparing Reports

A clear, accurate and complete report must be pro- vided to support a
rating of permanent impairment. The following 3-step process is required
by the examiner to estimate impairment according to the Guides:

Clinical evaluation, analysis of the findings, and discussion of how the
impairment rating was calculated.

2.7a Clinical Evaluation

The relevant history is obtained by a review of medical records reflecting
past medical history and the patient’s presentation of the current history. It
is important to review medical records before performing an impairment
rating, as this will enable the examiner, among other things. to:

   •   Clarify or at least document inconsistencies. if any,
       between the history provided by the patient and
       the history contained in the medical records.

   •   Reconcile inconsistencies, if any, between the
       patients history during the examination and other
       previous medical records. It is necessary to clarify
       historical inconsistencies because several issues,
       including causation. are primarily determined by
       the history.
•    Focus on the portions of the history pertinent to
        the impairment rating.

The physical examination should be performed in a manner and setting
that facilitates the effective communication between the patient and the
examiner, thereby decreasing anxiety and increasing concentration and
effort. If the examiner believes the patient may be giving an inconsistent
effort during the physical examination, the patient should be encouraged to
give a full effort. For extremity impairment evaluations, findings should be
documented bilaterally; if the contralateral extremity is uninjured. this may
serve as the baseline for defining “normal” for the impaired extremity. The
results of specific measurements must be reproducible to be valid. Review
of all available diagnostic studies and laboratory data is critical in this step.

2.7b Analysis of the Findings

Discuss how specific findings relate to the conclusion of diagnoses and
MMI status. Refer to the current abilities of ADLs and any validated
deficiencies. Explain the absence of any pertinent data and how the
physician determined the impairment rating with limited data.

2.7c Discussion of How the Impairment Rating Was Calculated

Discussion of how the Guides’ criteria were applied to medical information
that generated the specific rating is required for an impairment evaluation
to be consistent with the Guides. Compare the appropriate information
obtained on history and objective findings with the criteria described in the
applicable chapter of the Guides. Include an explanation of each
impairment value with reference, including pages and table number, to the
applicable criteria of the Guides. Combine multiple impairments for a final
composite whole person impairment number, unless otherwise directed by
jurisdictional application. Discuss how individual ratings were combined
or added to create a final number; explain why certain ratings were
disregarded in the final analysis due to invalid measurements and test
results; and perform apportionment, where applicable. Include a summary
list of impairments and impairment ratings by percentage, including
calculation of the whole person impairment. as appropriate.

A standard report format Figure 2-3, that the evaluator may use is provided
in this chapter; the purpose of this form is to ensure that all essential
elements are included in the impairment evaluation report. This form may
be reproduced without permission from the American Medical Association.

When relevant chapters include a data collection form or summary form
that identifies the specific features to consider for each category of organ
system impairment, it must be used to document the data and be attached
with the final report. This will ensure that the process of impairment
evaluation according to the Guides is transparent and is subject to
understanding by all parties interested in the outcome.

The 3-step process described in this section applies to rating all organ
systems. Although the underlying impairment evaluation criteria may differ,
the process is essentially the same for rating all organ systems. The first 2
steps must be performed by a licensed physician. and if the clinical
findings are fully described, any knowledgeable observer may check the
findings against the Guides’ criteria.

FEE SCHEDULE

SECTION 8.2 OF THE ILLINOIS WORKERS’ COMPENSATION

(820 ILCS 305/8.2)

Sec. 8.2. Fee schedule.

(a) Except as provided for in subsection (c), for procedures, treatments, or services
covered under this Act and rendered or to be rendered on and after February 1, 2006, the
maximum allowable payment shall be 90% of the 80th percentile of charges and fees as
determined by the Commission utilizing information provided by employers' and
insurers' national databases, with a minimum of 12,000,000 Illinois line item charges and
fees comprised of health care provider and hospital charges and fees as of August 1, 2004
but not earlier than August 1, 2002. These charges and fees are provider billed amounts
and shall not include discounted charges. The 80th percentile is the point on an ordered
data set from low to high such that 80% of the cases are below or equal to that point and
at most 20% are above or equal to that point. The Commission shall adjust these
historical charges and fees as of August 1, 2004 by the Consumer Price Index-U for the
period August 1, 2004 through September 30, 2005. The Commission shall establish fee
schedules for procedures, treatments, or services for hospital inpatient, hospital
outpatient, emergency room and trauma, ambulatory surgical treatment centers, and
professional services. These charges and fees shall be designated by geozip or any
smaller geographic unit. The data shall in no way identify or tend to identify any patient,
employer, or health care provider. As used in this Section, "geozip" means a three-digit
zip code based on data similarities, geographical similarities, and frequencies. A geozip
does not cross state boundaries. As used in this Section, "three-digit zip code" means a
geographic area in which all zip codes have the same first 3 digits. If a geozip does not
have the necessary number of charges and fees to calculate a valid percentile for a
specific procedure, treatment, or service, the Commission may combine data from the
geozip with up to 4 other geozips that are demographically and economically similar and
exhibit similarities in data and frequencies until the Commission reaches 9 charges or
fees for that specific procedure, treatment, or service. In cases where the compiled data
contains less than 9 charges or fees for a procedure, treatment, or service, reimbursement
shall occur at 76% of charges and fees as determined by the Commission in a manner
consistent with the provisions of this paragraph. Providers of out-of-state procedures,
treatments, services, products, or supplies shall be reimbursed at the lesser of that state's
fee schedule amount or the fee schedule amount for the region in which the employee
resides. If no fee schedule exists in that state, the provider shall be reimbursed at the
lesser of the actual charge or the fee schedule amount for the region in which the
employee resides. Not later than September 30 in 2006 and each year thereafter, the
Commission shall automatically increase or decrease the maximum allowable payment
for a procedure, treatment, or service established and in effect on January 1 of that year
by the percentage change in the Consumer Price Index-U for the 12 month period ending
August 31 of that year. The increase or decrease shall become effective on January 1 of
the following year. As used in this Section, "Consumer Price Index-U" means the index
published by the Bureau of Labor Statistics of the U.S. Department of Labor, that
measures the average change in prices of all goods and services purchased by all urban
consumers, U.S. city average, all items, 1982-84=100. (a-1) Notwithstanding the
provisions of subsection (a) and unless otherwise indicated, the following provisions shall
apply to the medical fee schedule starting on September 1, 2011:

        (1)    The Commission shall establish and maintain fee schedules for
procedures, treatments, products, services, or supplies for hospital inpatient, hospital
outpatient, emergency room, ambulatory surgical treatment centers, accredited
ambulatory surgical treatment facilities, prescriptions filled and dispensed outside of a
licensed pharmacy, dental services, and professional services. This fee schedule shall be
based on the fee schedule amounts already established by the Commission pursuant to
subsection (a) of this Section. However, starting on January 1, 2012, these fee schedule
amounts shall be grouped into geographic regions in the following manner:

       (A) Four regions for non-hospital fee schedule amounts shall be utilized:

               (i) Cook County;
               (ii) DuPage, Kane, Lake, and Will Counties;
               (iii) Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe,
                     Montgomery, Randolph, St. Clair, and Washington Counties;
                     and
               (iv) All other counties of the State.

       (B) Fourteen regions for hospital fee schedule amounts shall be utilized:

               (i) Cook, DuPage, Will, Kane, McHenry, DeKalb, Kendall, and
                   Grundy Counties;
               (ii) Kankakee County;
               (iii) Madison, St. Clair, Macoupin, Clinton, Monroe, Jersey, Bond,
                     and Calhoun Counties;
               (iv) Winnebago and Boone Counties;
               (v) Peoria, Tazewell, Woodford, Marshall, and Stark Counties;
               (vi) Champaign, Piatt, and Ford Counties;
               (vii) Rock Island, Henry, and Mercer Counties;
(viii) Sangamon and Menard Counties;
               (ix) McLean County;
               (x) Lake County;
               (xi) Macon County;
               (xii) Vermilion County;
               (xiii) Alexander County; and
               (xiv) All other counties of the State.

        (2)    If a geozip, as defined in subsection (a) of this Section, overlaps into one
or more of the regions set forth in this Section, then the Commission shall average or
repeat the charges and fees in a geozip in order to designate charges and fees for each
region.

        (3)     In cases where the compiled data contains less than 9 charges or fees for a
procedure, treatment, product, supply, or service or where the fee schedule amount
cannot be determined by the non-discounted charge data, non-Medicare relative values
and conversion factors derived from established fee schedule amounts, coding
crosswalks, or other data as determined by the Commission, reimbursement shall occur at
76% of charges and fees until September 1, 2011 and 53.2% of charges and fees
thereafter as determined by the Commission in a manner consistent with the provisions of
this paragraph.

        (4)     To establish additional fee schedule amounts, the Commission shall utilize
provider non-discounted charge data, non-Medicare relative values and conversion
factors derived from established fee schedule amounts, and coding crosswalks. The
Commission may establish additional fee schedule amounts based on either the charge or
cost of the procedure, treatment, product, supply, or service.

        (5)     Implants shall be reimbursed at 25% above the net manufacturer's invoice
price less rebates, plus actual reasonable and customary shipping charges whether or not
the implant charge is submitted by a provider in conjunction with a bill for all other
services associated with the implant, submitted by a provider on a separate claim form,
submitted by a distributor, or submitted by the manufacturer of the implant. "Implants"
include the following codes or any substantially similar updated code as determined by
the Commission: 0274 (prosthetics/orthotics); 0275 (pacemaker); 0276 (lens implant);
0278 (implants); 0540 and 0545 (ambulance); 0624 (investigational devices); and 0636
(drugs requiring detailed coding). Non-implantable devices or supplies within these codes
shall be reimbursed at 65% of actual charge, which is the provider's normal rates under
its standard chargemaster. A standard chargemaster is the provider's list of charges for
procedures, treatments, products, supplies, or services used to bill payers in a consistent
manner.

       (6)     The Commission shall automatically update all codes and associated rules
with the version of the codes and rules valid on January 1 of that year.

               (a-2)   For procedures, treatments, services, or supplies covered under this
Act and rendered or to be rendered on or after September 1, 2011, the
            maximum allowable payment shall be 70% of the fee schedule amounts,
            which shall be adjusted yearly by the Consumer Price Index-U, as
            described in subsection (a) of this Section.

            (a-3) Prescriptions filled and dispensed outside of a licensed pharmacy
            shall be subject to a fee schedule that shall not exceed the Average
            Wholesale Price (AWP) plus a dispensing fee of $4.18. AWP or its
            equivalent as registered by the National Drug Code shall be set forth for
            that drug.

Summary

This is a substantive change; however the real impact is not on the rights
of the parties as much as on the rights of the medical providers. To allow
the providers to acclimate their practices to the new requirements this
amendment will not be effective until September 1, 2011. With the 2005
Amendments, the Illinois Workers’ Compensation Act established a Fee
Schedule for medical treatment related to workers’ compensation injuries.
At the time, the Fee Schedule was to provide substantial savings to Illinois
Businesses and offset the increases in benefits to Petitioners provided
along with the 2005 Amendments. Unfortunately, the savings promised by
the Medical Fee Schedule did not materialize as hoped.

The current Medical Fee Schedule amendments will provide substantial
savings to Illinois Business not seen subsequent to the enactment of the
original fee schedule. In fact, Politicians and Business groups have
suggested that the Medical Fee Schedule changes as part of House Bill
1698 will save Illinois businesses as much as $500,000,000.00 annually.
This represents a majority of the overall estimated savings to Illinois
businesses anticipated with these amendments.

Section 8.2 of the Illinois Worker’s Compensation Act established the
 medical fee schedule. Substantial changes were made to Section 8.2 of the
 Act as part of House Bill 1698.

The first change concerns treatment rendered by out-of-state providers.
The amendment states that providers of out-of-state procedures,
treatments, services, products or supplies shall be reimbursed at the lesser
of that state’s Fee Schedule amount or the Fee Schedule amount for the
region in which the employee resides. If no Fee Schedule exists in that
state, the provider shall be reimbursed at the lesser of the actual charge or
the Fee Schedule amount for the region in which the employee resides.

Even after the current changes to the Fee Schedule, Illinois still has the
second highest Medical Fee Schedule reimbursement rate to providers of
the thirty-seven states that have Fee Schedules as part of their Workers’
Compensation Act. Therefore, for the majority of out of state medical
treatment, the other state’s Medical Fee Schedule will likely control the cost
of that medical care. However, there still may be some savings resulting
for this amendment.

In addition, with regard to the application of the Fee Schedule, there were
changes made to the “geozips” identified in Section 8.2 of the Act.
Geozips refer to a three digit zip code based upon data similarities,
geographical similarities, and frequencies. For treatment subsequent to
September 1, 2011, there will be four such regions for non-hospital Fee
Schedule amounts and fourteen such regions for hospital Fee Schedule
amounts. The regions are identified by county. The four non-hospital Fee
Schedule regions are the following:

      (1) Cook County;
      (2) DuPage, Kane, Lake and Will Counties;
      (3) Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe,
           Montgomery, Randolph, St.       Clair, and Washington Counties;
           and,
      (4) all other counties of the state.

The fourteen regions for hospital Fee Schedule amounts are the following:

      (1) Cook, DuPage, Will, Kane, McHenry, DeKalb, Kendall and Grundy
          Counties;
      (2) Kankakee County;
      (3) Madison, St. Clair, Macoupin, Clinton, Monroe, Jersey, Bond and
           Calhoun Counties;
      (4) Winnebago and Boone Counties;
      (5) Peoria, Tazewell, Woodford, Marshall, and Stark Counties;
      (6) Champaign, Piatt and Ford Counties;
      (7) Rock Island, Henry and Mercer Counties;
      (8) Sangamon and Menard Counties;
      (9) McLean County;
      (10) Lake County;
      (11) Macon County;
      (12) Vermillion County;
      (13) Alexander County; and,
      (14) all other counties of the state.

In cases where the compiled data contains less than nine charges or fees
for a procedure, treatment, product, supply or service or where the Fee
Schedule amount cannot be determined by the non-discounted charge
data, non-Medicare relative values and conversion factors derived from
established Fee Schedule amounts, coding, crosswalks or other data as
determined by the Commission, for charges after September 1, 2011,
reimbursement shall occur at 53.2% of charges and fees as determined by
the Commission in a manner consistent with the provisions of this
paragraph. For such charges prior to September 1, 2011, reimbursement
was at seventy-six percent of the charges and fees. This represents a 30%
reduction in these fees and should provide substantial savings where
applicable.

With the current amendment, Section 8.2 of the Act will now cover implants
as well. Implants shall be reimbursed at 25% above the net manufacturer’s
invoice price less rebates.      Reimbursement will also include actual
reasonable and customary shipping charges. House bill 1698 specifically
identifies the codes to be considered as implants but does allow
substantially similar updated codes as determined by the Commission.
Non-implantable devices or supplies within these defined codes are to be
reimbursed at sixty-five percent of the actual charge.

The most substantial change to Section 8.2 in House Bill 1698 provides that
for procedures, treatments, services or supplies covered under the Act and
rendered or to be rendered on or after September 1, 2011, the maximum
allowable payment shall be seventy percent of the Fee Schedule amount.
The Fee Schedule amount is to be adjusted yearly by the Consumer Price
Index – U as described in the amendments to the Act and placement of the
Fee Schedule in the 2005 amendments.

Essentially, House Bill 1698 provides for a thirty percent reduction in the
prior Fee schedule. According to Insurance estimates, medical expenses
for work related injuries in Illinois are now in the area of $1.5 billion dollars
annually. Thus, it has been estimated that the thirty percent reduction in
the fee schedule rate will result in savings of approximately
$500,000,000.00 for Illinois businesses.

The amendment also addresses prescriptions filled and dispensed outside
of a licensed pharmacy. Those charges shall be subject to a Fee Schedule
that shall not exceed the average wholesale price plus a dispensing fee of
$4.18.

In addition to amending the Medical Fee Schedule rate and increasing the
amount of covered expenses, the amendments also address the timeframe
upon which payment for services rendered shall be made. Previously,
employers had sixty days from receipt of all of the necessary data elements
to adjudicate the bill to make payment. With the amendment, this
timeframe is reduced to thirty days. Furthermore, the changes address the
responsibility on the employers when the bill does not include all the
necessary data elements to adjudicate the bill. In this scenario, or in the
case where the bill is denied for any other reason, the employer shall
provide written notification to the provider explaining the basis for the
denial and/or describing any additional necessary data elements required
to adjudicate the bill. This written notice is to be provided within thirty
days of receipt of the bill.

The amendments provide that interest is to accrue at a rate of 1% per
month in the case of non-payment within thirty days of receipt of a bill that
contains substantially all of the required data elements necessary to
adjudicate the bill. While the interest charge did not change in the
amendment, the timeframe for accrual of interest dropped to thirty days,
consistent with the drop in the timeframe to make payment on the bill. The
amendment provides that any required interest payments shall be made
within thirty days of payment of the bill.

With these changes, of course, though reducing the amount that providers
will receive under the new Act, the legislature is trying to speed up the
payment process.

In addition to the above, Section 8.2(a) has been added to the Illinois
Workers’ Compensation Act. This section deals with electronic claims for
payment of medical services. Under this section, the director of insurance
is to adopt rules to: (1) ensure that all healthcare providers and facilities
submit medical bills for payment on standardized forms; (2) require
acceptance by employers and insurers of electronic claims for payment of
medical services; and, (3) ensure confidentiality of medical information
submitted on electronic claims for payment of medical services. Where
possible, the rules shall be consistent with existing standards under the
Federal Health Insurance Portability and Accountability Act (HIPAA) of 1996
as well as standard adopted under the Illinois Health Insurance Exchange
and Technology Act.

Section 8.2(a) provides that the rules referenced above shall be proposed
on or before January 1, 2012. The section requires all employers and
insurers to accept electronic claims for payment of medical services on or
before June 30, 2012.

Finally, Section 8.2 has been amended to include language that a provider
shall not bill or otherwise attempt to recover from the employee for medical
services or treatment determined by the Commission to be excessive or
unnecessary. Prior to this change, employers were not liable for medical
services or treatment determined by the Commission to be excessive or
unnecessary. However, after such a finding by the commission, the
medical providers could seek payment of the medical services or treatment
directly from the petitioner. It is hoped that this language will curb
excessive or unnecessary treatment, a problem that has plaguing
employers, business, and Petitioners alike.
It has been estimated that the amendments will save Illinois businesses a
combined 500 million to 700 million dollars annually. The majority of those
savings are anticipated to come from changes made to Section 8.2 of the
Illinois Workers’ Compensation Act. Savings were promised in 2005 when
the Medical Fee Schedule was established. The savings, were not realized.
However, these amendments should result in substantial savings for
Illinois business.

However, as noted above, thirty-seven states presently have Medical Fee
Schedules in place as part of their state’s Workers’ Compensation Act. Out
of those thirty-seven states, Illinois’ Medical Fee Schedule, prior to House
Bill 1698 provided for the second highest reimbursement rate. Even after
the thirty percent reduction in the Medical Fee Schedule discussed above,
Illinois will still rank as the having the second highest reimbursement rate
for medical services rendered as part of a workers’ Compensation injury.
Thus, House Bill 1698 was criticized by some as not going far enough to
bring Illinois more in line with other states in the Union.



MEDICAL PROVIDERS PROHIBITED FROM COLLECTING AGAINST
CLAIMANTS FOR MEDICAL SERVICES OR TREATMENT DETERMINED
BY THE COMMISSION TO BE EXCESSIVE OR UNNECESSARY

(820 ILCS 305/8.2)

Sec. 8.2. Fee schedule

(e) Except as provided in subsections (e-5), (e-10), and 7 (e-15), a provider shall not hold
an employee liable for costs related to a non-disputed procedure, treatment, or service
rendered in connection with a compensable injury. The provisions of subsections (e-5),
(e-10), (e-15), and (e-20) shall not apply if an employee provides information to the
provider regarding participation in a group health plan. If the employee participates in a
group health plan, the provider may submit a claim for services to the group health plan.
If the claim for service is covered by the group health plan, the employee's responsibility
shall be limited to applicable deductibles, co-payments, or co-insurance. Except as
provided under subsections (e-5), (e-10), (e-15), and (e-20), a provider shall not bill or
otherwise attempt to recover from the employee the difference between the provider's
charge and the amount paid by the employer or the insurer on a compensable injury, or
for medical services or treatment determined by the Commission to be excessive or
unnecessary.

SUMMARY

There is a debate as to whether this is procedural or substantive. We consider it
substantive and effective immediately (June 28, 20111), impacting cases arising after
the signing date. Clearly this does not impact the rights of either of the customary
parties to the litigation, but it does affect property rights of medical providers.
Based on this new provision, if the Commission determines that medical services or
treatment were excessive or unnecessary, the medical provider will be prohibited
from pursuing recovery for his charges against the claimant despite the fact that the
claimant retained the medical provider and had an implied contract to pay for the
medical services rendered. While we welcome this provision which hopefully will
end some of the abusive over-treatment, over-utilization of certain medical services,
and excessive charges we often see, we expect this to become somewhat problematic
in the day-to-day practice before the Commission. In the case where a medical
provider has made excessive charges or has rendered unnecessary treatment which
are challenged, it now should be necessary, with acknowledgment of due process
concerns, to bring that medical provider before the Commission to give the provider
an opportunity to be heard and to justify their charges or the reasonableness of the
treatment they rendered. If those medical providers whose bills are challenged are
not given an opportunity to be heard before their bills are adjudicated, they will
have a strong argument that they were denied the due process of law and left with
no avenue to recover the charges for the service they rendered. This would clearly
be improper.

Prior to this amendment, if the Commission found a medical bill to be excessive or
medical services to be unreasonable or unnecessary, the Commission would simply
deny payment of the bill as part of the award. In that event the medical provider
could still pursue recovery for the unpaid balance against the
claimant/employee/patient in the Circuit Court under a theory that there had been a
valid contract for his services. The claimant would have to dispute the charges in
that forum. However, with this provision in effect, the claimant/employee/patient’s
liability for the disallowed charges is eliminated by a finding by the Commission.
Accordingly, it will be imperative to give such medical providers with challenged
bills an opportunity to be heard before their bills are adjudicated.

Since now it will likely be necessary to bring medical providers whose bills are
challenged (and their attorneys) before the Commission for them to participate in
the hearing regarding their bills, it will be necessary for the Commission to create
some mechanism or process by which such medical providers can be joined as
necessary parties to a pending workers’ compensation case. Since liens for medical
services are not recognized under the Workers’ Compensation Act, and there is no
established procedure to bring necessary parties before the Commission, it will be
necessary for the Illinois Workers' Compensation Commission to promulgate Rules
governing how such parties should be joined to the action pending before the
Commission. Accordingly, by passing this provision, the legislature had good
intentions of protecting claimants from liability for excessive medical bills and bills
for unnecessary treatment, but has increased the burden on the Commission which
is charged with adjudicating those disputed bills. This will accordingly add
additional parties and lawyers to the proceedings which were always intended to be
simple and summary. Unfortunately, the practice before the Commission is coming
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act
Legislation summary 2001 amendments to illinois workers' compensation act

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Legislation summary 2001 amendments to illinois workers' compensation act

  • 1. Newsletter of Garofalo, Schreiber, Hart & Storm, Chartered LAW UPDATE - SUMMER, 2011 From the Desk of Joe Garofalo Culminating months of hearings, consideration of numerous competing bills, and protracted negotiations among representatives of business, labor, the medical community and ITLA, House Bill 1698 passed both houses of the Illinois General Assembly on May 31, 2011. The bill marks a major reform of The Illinois Workersʼ Compensation Act. Anticipated annual savings to businesses resulting from the changes are estimated at $500 to $700 million. Governor Quinn signed the bill into law on June 28, 2011. The law became effective the day it is signed into law unless specific provisions within the law designated different effective dates. These will be discussed in this summary. It is further necessary to understand those aspects of the law that are procedural changes as opposed to substantive changes. With the amendments that do not have specific effective dates assigned to them, the changes that are procedural apply not only to future claims, but also to pending claims. The changes that are substantive only apply to claims occurring on or after June 28, 2011. Generally speaking, and based upon prior case law, substantive changes are those that limit or expand the right of recovery of a party. Procedural changes are those that impact the manner in which the parties pursue or defend their respective rights. For example, the changes regarding wage differential are substantive, but this is also an example of a change that has an effective date (9/1/2011) assigned to it. An example of a procedural change, applicable to pending as well as future claims, would be the fraud unitʼs power to subpoena records. Another example of a change that is likely procedural is the Alternative Dispute Resolution provision pertaining to two unions to be selected. Note that because the benefits under the provision are not to be changed by requirement of the statute the recovery rights of the parties are neither limited nor expanded. We have outlined the major changes made in these Amendments. In each portion we have recited the statutory language for the new provisions or underlined the new provisions in the context of the existing statute. A summary and comment follows each new change. We hope you find this to be helpful in understanding these changes and welcome your questions and comments. Joe Garofalo
  • 2.   DISCLAIMER   The   following   contains   materials   pertaining   to   workers’   compensation   law.     Editorial   inquiries   should   be   directed   to   Joseph   A.   Garofalo   at   Garofalo,   Schreiber,   Hart   &   Storm,   Chartered.     This   information   does   not   provide   solutions   to   individual   problems.     Please   consult   an   attorney   concerning   your   particular   situation.     If   you   do   not   want   to   receive   similar  information  in  the  future,  please  advise  and  you  will  be  removed  from  our  mailing   list.         Under  professional  rules,  these  materials  should  be  regarded  as  advertising  materials.     ©2011.    All  rights  reserved.   Garofalo,  Schreiber,  Hart  &  Storm,  Chartered   55  W.  Wacker  Drive  –  10th  Floor   Chicago,  Illinois  60606   Telephone:    (312)  670-­‐2000   Facsimile:    (312)  419-­‐1336   www.GSHSLAW.COM
  • 3. TABLE OF CONTENTS PAGE TOPICS 5 A VENDOR FOR STATE WORKERS’ COMPENSATION PROGRAM – effective June 28, 2011 5 STATE WORKERS’ COMPENSATION PROGRAM ADVISORY BOARD CREATED – effective June 28, 2011 6 FRAUD UNIT ALLOWED TO ISSUE SUBPOENAS FOR MEDICAL RECORDS – effective June 28, 2011 7 BURDEN OF PROOF – effective June 28, 2011 8 STANDARDS OF CONDUCT FOR ABITRATORS AND COMMISSIONERS – effective June 28, 2011 9 EMPLOYEE LEASING COMPANIES REQUIRED TO DISCLOSE INFORMATION – effective June 28, 2011 10 ALTERNATIVE DISPUTE RESOLUTION SYSTEM CREATED – effective June 28, 2011 14 CITATIONS OF EMPLOYERS FOR NON-COMPLIANCE – effective June 28, 2011 15 MEDICAL CHOICES (See also Preferred Provider Programs at page 21) - effective June 28, 2011. 17 WAGE LOSS – effective September 1, 2011 19 SPECIFIC LOSS CLAIMS FOR CARPAL TUNNEL SYNDROME – effective June 28, 2011 21 PREFERRED PROVIDER PROGRAMS – effective June 28, 2011 26 EVALUATING PERMANENT DISABILITY – effective September 1, 2011 31 FEE SCHEDULE – effective September 1, 2011 39 MEDICAL PROVIDERS PROHIBITED FROM COLLECTING AGAINST CLAIMANTS FOR MEDICAL SERVICES FOR
  • 4. TREATMENT DETERMINED BY THE COMMISSION TO BE EXCESSIVE OR UNNECESSARY – effective June 28, 2011 41 TEMPORARY PARTIAL DISABILITY – effective June 28, 2011 42 UTILIZATION REVIEW PROGRAMS – effective September 1, 2011 45 INTOXICATION DEFENSE – effective September 1, 2011 49 TRAINING PROGRAMS FOR COMMISSIONERS – effective June 28, 2011 50 WORKERS’ COMPENSATION ADVISORY BOARD – effective June 28, 2011 51 AMENDMENTS PERTAINING TO ARBITRATORS – effective June 28, 2011 55 GIFT BAN – effective June 28, 2011 57 CLAIMS BY COMMISSION EMPLOYEES – effective June 28, 2011 58 UNLAWFUL TO PRESENT FALSE MEDICAL BILL FOR PAYMENT – effective June 28, 2011 62 RECALCUATION OF PREMIUM RATES – effective June 28, 2011 62 INSURANCE OVERSIGHT – effective April 1, 2012
  • 5. A VENDOR FOR STATE WORKERS’ COMPENSATION PROGRAM This following provisions change The Department of Central Management Services Law of the Civil Administrative Code of Illinois: 20 ILCS 405/405-105 (10a) If the Director determines it would be in the best interests of the State and its employees, prepare and implement a plan providing for: (i) the purchase of workers' compensation insurance for workers' compensation liability; (ii) third- party administration of self-insurance, in whole or in part, for workers' compensation liability; or (iii) a combination of purchased insurance and self- insurance for workers' compensation liability, including reinsurance or stop-loss insurance. Any contract for insurance or third-party administration shall be on terms consistent with State policy; awarded in compliance with the Illinois Procurement Code; and based on, but not limited to, the following criteria: administrative cost, service capabilities of the carrier or other contractor and premiums, fees, or charges. By April 1 of each year, the Director must report and provide information to the State Workers' Compensation Program Advisory Board concerning the status of the State workers' compensation program for the next fiscal year. Information includes, but is not limited to, documents, reports of negotiations, bid invitations, requests for proposals, specifications, copies of proposed and final contracts or agreements, and any other materials concerning contracts or agreements for the program. By the first of each month thereafter, the Director must provide updated, and any new, information to the State Workers' Compensation Program Advisory Board until the State workers' compensation program for the next fiscal year is determined. Summary We consider this change to be procedural and effective immediately. This provides that the Director can purchase workers’ compensation insurance and/or secure the services of a third-party administrator to administer the workers’ compensation program for the State of Illinois and its employees. The Director of Insurance is required to provide certain information to the State Workers’ Compensation Program Advisory Board regarding the status of the State workers’ compensation program. STATE WORKERS’ COMPENSATION PROGRAM ADVISORY BOARD CREATED (e) There is hereby created within the Department of Central Management Services an advisory body to be known as the State Workers' Compensation
  • 6. Program Advisory Board to review, assess, and provide recommendations to improve the State workers' compensation program and to ensure that the State manages the program in the interests of injured workers and taxpayers. The Governor shall appoint one person to the Board, who shall serve as the Chairperson. The Speaker of the House of Representatives, the Minority Leader of the House of Representatives, the President of the Senate, and the Minority Leader of the Senate shall each appoint one person to the Board. Each member initially appointed to the Board shall serve a term ending December 31, 2013, and each Board member appointed thereafter shall serve a 3-year term. A Board member shall continue to serve on the Board until his or her successor is appointed. In addition, the Director of the Department of Central Management Services, the Attorney General, the Director of the Department of Insurance, the Secretary of the Department of Transportation, the Director of the Department of Corrections, the Secretary of the Department of Human Services, the Director of the Department of Revenue, and the Chairman of the Illinois Workers' Compensation Commission, or their designees, shall serve as ex officio, non- voting members of the Board. Members of the Board shall not receive compensation but shall be reimbursed from the Workers' Compensation Revolving Fund for reasonable expenses incurred in the necessary performance of their duties, and the Department of Central Management Services shall provide administrative support to the Board. The Board shall meet at least 3 times per year or more often if the Board deems it necessary or proper. By September 30, 2011, the Board shall issue a written report, to be delivered to the Governor, the Director of the Department of Central Management Services, and the General Assembly, with a recommended set of best practices for the State workers' compensation program. By July 1 of each year thereafter, the Board shall issue a written report, to be delivered to those same persons or entities, with recommendations on how to improve upon such practices. Summary This is a procedural change and effective immediately. This creates an Advisory Board to review, assess and provide recommendations to improve the State workers’ compensation program. The members who will serve on the Board will be political appointees—with one member appointed by the Governor whom will be the Chairperson and the other members appointed by the Speaker of the House of Representatives, the Minority Leader of the House of Representatives, the President of the Senate, and the Minority Leader of the Senate. FRAUD UNIT ALLOWED TO ISSUE SUBPOENAS FOR MEDICAL RECORDS The following is a change to the Code of Civil Procedure: Sec. 8-802. Physician and patient. No physician or surgeon shall be permitted to disclose any information he or she may have acquired in attending any patient
  • 7. in a professional character, necessary to enable him or her professionally to serve the patient, except…upon the issuance of a subpoena pursuant to Section 25.5 of the Workers’ Compensation Act. Summary We consider this change to be procedural and effective immediately. As a procedural change it would apply to currently pending investigations as well as those occurring after June 28, 2011. This allows the fraud and non- compliance unit of the Illinois Workers' Compensation Commission to subpoena medical records as part of their investigation and requires physicians to release the subpoenaed medical records. The following are changes to the Illinois Workers' Compensation Act: BURDEN OF PROOF Section 1(d) To obtain compensation under this Act, an employee bears the burden of showing, by a preponderance of the evidence, that he or she has sustained accidental injuries arising out of and in the course of the employment. SUMMARY This amendment is effective June 28, 2011. To the extent that this amounts to a change in the law we consider it procedural and we intend to argue this point in all pending cases. By a cursory reading of this amendment, it appears that the legislature has simply restated the previously well-established standard a claimant always needed to achieve in order to prove a compensable accident arising out of and in the course of his employment. However, while codifying this well established standard of proof, we believe that a strong argument now can be made that the legislature also changed the standard of roof required in repetitive trauma cases. This amendment addresses the standard of proof for proving all “accidental injuries arising out of and in the course of the employment”. This includes accidents on specific dates as well as injuries that “manifest themselves” as in cases brought under a theory of repetitive trauma. For repetitive trauma cases, implicit in a finding of “manifestation” is that the injury is causally related to the work activity since the “manifestation” is said to occur when it becomes apparent to a reasonable person that there exists an injury and it is causally related to the work activity. In repetitive trauma cases brought before this amendment it was necessary for a claimant to show only that the work activity “could or might have been a causative factor” in order to successful carry claimant’s burden of proof on the issue of causation. Once accomplished, a finding of “manifestation” occurred and thus the claimant successfully proved an accident arising out of and in the course of the
  • 8. employment. Accordingly, a lesser standard of proof appears to have been required in repetitive trauma cases than in cases where a sudden definable breakdown occurred on a specific date, where a preponderance of the evidence was required to prove accident in such cases. Now with this amendment, since it is necessary for a claimant to prove an accident arising out of and in the course of employment by a preponderance of the evidence, a claimant in a repetitive trauma case will be required to prove causation by a preponderance of the evidence or otherwise he would be unable to carry his burden of proof on the issue of accident by a preponderance of the evidence. Now if a claimant in a repetitive trauma case is able to prove only that the work activity could or might have been a causative factor in causing an injury, his claim should fail since the burden of proof by a preponderance of the evidence on the issue of accident will not have been achieved. Based upon our analysis of this new amendment, we believe that a claimant’s burden of proof in repetitive trauma cases has been raised from the heretofore minimal burden to prove that the work activity could or might have been a causative factor in causing an injury to one now requiring that the claimant prove causation by a preponderance of the evidence in order to establish a compensable accident arising out of and in the course of the employment. STANDARDS OF CONDUCT FOR ARBITRATORS AND COMMISSIONERS Sec. 1.1. Standards of conduct. (a) Commissioners and arbitrators shall dispose of all Workers' Compensation matters promptly, officially and fairly, without bias or prejudice. Commissioners and arbitrators shall be faithful to the law and maintain professional competence in it. They shall be unswayed by partisan interests, public clamor, or fear of criticism. Commissioners and arbitrators shall take appropriate action or initiate appropriate disciplinary measures against a Commissioner, arbitrator, lawyer, or others for unprofessional conduct of which the Commissioner or arbitrator may become aware. (b) Except as otherwise provided in this Act, the Canons of the Code of Judicial Conduct as adopted by the Supreme Court of Illinois govern the hearing and non-hearing conduct of members of the Commission and arbitrators under this Act. The Commission may set additional rules and standards, not less stringent than those rules and standards established by the Code of Judicial Conduct, for the conduct of arbitrators. (c) The following provisions of the Code of Judicial Conduct do not apply under this Section: (1) Canon 3(B), relating to administrative responsibilities of Judges. (2) Canon 6(C), relating to annual filings of economic interests. Instead of filing declarations of economic interests with the Clerk of the Illinois Supreme Court under Illinois Supreme Court Rule 68, members of the Commission and arbitrators shall make filings substantially similar to those required by Rule 68 with the Chairman, and such filings shall be made available for examination by the public. (d) An arbitrator or a Commissioner
  • 9. may accept an uncompensated appointment to a governmental committee, commission or other position that is concerned with issues of policy on matters which may come before the arbitrator or Commissioner if such appointment neither affects his or her independent professional judgment nor the conduct of his or her duties. (e) Decisions of an arbitrator or a Commissioner shall be based exclusively on evidence in the record of the proceeding and material that has been officially noticed. Any findings of fact made by the arbitrator based on inquiries, investigations, examinations, or inspections undertaken by the arbitrator shall be entered into the record of the proceeding. (f) Nothing in this Section shall prohibit an arbitrator from holding a pre-trial conference in accordance with the rules of the Commission. Summary This amendment is procedural and effective June 28, 2011. This establishes that Arbitrators and Commissioners are required by statute to conduct themselves and treat the parties fairly and without bias or prejudice. They are required to follow a code of judicial and professional conduct. Their rulings and decision shall be based solely on the evidence and record. They are also allowed to conduct a pre-trial conference. This might seem like a small provision, but this is important because it firmly states and establishes that the Arbitrators and Commissioners must conduct themselves with appropriate judicial demeanor. EMPLOYEE LEASING COMPANIES REQUIRED TO DISCLOSE INFORMATION (a-2) Every Employee Leasing Company (ELC), as defined in Section 15 of the Employee Leasing Company Act, shall at a minimum provide the following information to the Commission or any entity designated by the Commission regarding each workers' compensation insurance policy issued to the ELC: (1) Any client company of the ELC listed as an additional named insured. (2) Any informational schedule attached to the master policy that identifies any individual client company's name, FEIN, and job location. (3) Any certificate of insurance coverage document issued to a client company specifying its rights and obligations under the master policy that establishes both the identity and status of the client, as well as the dates of inception and termination of coverage, if applicable. Summary This change is procedural and is effective immediately. The legislative intent clearly is for this information to be provided by existing companies regarding existing obligations. Leasing or loaning companies are required to provide the Illinois Workers' Compensation Commission with
  • 10. information regarding the identity of any client or borrowing company listed on a workers’ compensation policy as an additional named insured; information about the client or borrowing company listed on a master insurance policy; and specifics regarding any rights and obligations, identification information, and coverage information listed on any certificate of coverage issued to a client company. ALTERNATIVE DISPUTE RESOLUTION SYSTEM CREATED (820 ILCS 305 / 4b new) Sec. 4b. Collective Bargaining Pilot Program. (a) The Director of the Department of Labor shall adopt a selection process to designate 2 labor organizations to participate in the collective bargaining process provided for in this Section. (a-5) For purposes of this Section, the term "construction employer" means any person or legal entity or group of persons or legal entities engaging in or planning to engage in any constructing, altering, reconstructing, repairing, rehabilitating, refinishing, refurbishing, remodeling, remediating, renovating, custom fabricating, maintaining, landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or subtracting from any building, structure, airport facility, highway, roadway, street, alley, bridge, sewer, drain, ditch, sewage disposal plant, water works, parking facility, railroad, excavation or other project, structure, development, real property or improvement, or to do any part thereof, whether or not the performance of the work herein described involves the addition to, or fabrication into, any project, structure, development, real property or improvement herein described, and shall also include any moving of construction-related materials on the job site or to or from the job site. For purposes of this Section, "labor organization" means the exclusive representative of a construction employer's employees recognized or certified pursuant to the National Labor Relations Act. (b) Upon appropriate filing, the Commission and the courts of this State shall recognize as valid and binding any provision in a collective bargaining agreement between any construction employer or group of construction employers and a labor organization, which contains certain obligations and procedures relating to workers' compensation. This agreement must be limited to, but need not include, all of the following: (1) An alternative dispute resolution ("ADR") system to supplement, modify or replace the procedural or dispute resolution provisions of this Act. The system may include mediation, arbitration, or other dispute resolution proceedings, the results of which shall be final and binding upon the parties; (2) An agreed list of medical treatment providers that may be the exclusive
  • 11. source of all medical and related treatment provided under this Act; (3) The use of a limited list of impartial physicians to conduct independent medical examinations; (4) The creation of a light duty, modified job, or return to work program; (5) The use of a limited list of individuals and companies for the establishment of vocational rehabilitation or retraining programs that may be the exclusive source of rehabilitation and retraining services provided under this Act; or (6) The establishment of joint labor management safety committees and safety procedures. (c) Void agreements. Nothing in this Section shall be construed to authorize any provision in a collective bargaining agreement that diminishes or increases a construction employer's entitlements under this Act or an employee's entitlement to benefits as otherwise set forth in this Act. For the purposes of this Section, the procedural rights and dispute resolution agreements under subparagraphs (1) through (6) of subsection (b) of this Section are not agreements which diminish or increase a construction employer's entitlements under this Act or an employee's entitlement to benefits under this Act. Any agreement that diminishes or increases a construction employer's entitlements under this Act or an employee's entitlement to benefits as set forth in this Act is null and void. Nothing in this Section shall be construed as creating a mandatory subject of bargaining. (d) Form of agreement. The agreement reached herein shall demonstrate that: (1) The construction employer or group of construction employers and the recognized or certified exclusive bargaining representative have entered into a binding collective bargaining agreement adopting the ADR plan for a period of no less than 2 years; (2) Contractual agreements have been reached with the construction employer's workers' compensation carrier, group self-insurance fund, and any excess carriers relating to the ADR plan; (3) Procedures have been established by which claims for benefits by employees will be lodged, administered, and decided while affording procedural due process; (4) The plan has designated forms upon which claims for benefits shall be made; (5) The system and means by which the construction employer's obligation to furnish medical services and vocational rehabilitation and retraining benefits shall be fulfilled and provider selected;
  • 12. (6) The method by which mediators or arbitrators are to be selected. (e) Filing. A copy of the agreement and a statement identifying the parties to the agreement shall be filed with the Commission. Within 21 days of receipt of an agreement, the Chairman shall review the agreement for compliance with this Section and notify the parties of its acceptance or notify the parties of any additional information required or any recommended modification that would bring the agreement into compliance. If no additional information or modification is required, the agreement shall be valid and binding from the time the parties receive acceptance of the agreement from the Chairman. Upon receipt of any requested information or modification, the Chairman shall notify the parties within 21 days whether the agreement is in compliance with this Section. All rejections made by the Chairman under this subsection shall be subject to review by the courts of this State, said review to be taken in the same manner and within the same time as provided by Section 19 of this Act for review of awards and decisions of the Commission. Upon the review, the Circuit Court shall have power to review all questions of fact as well as of law. (f) Notice to insurance carrier. If the construction employer is insured under this Act, it shall provide notice to and obtain consent from its insurance carrier, in the manner provided in the insurance contract, of its intent to enter into an agreement as provided in this Section with its employees. (g) Employees' claims for workers' compensation benefits. (1) Claims for benefits shall be filed with the ADR plan administrator within those periods of limitation prescribed by this Act. Within 10 days of the filing of a claim, the ADR plan administrator shall serve a copy of the claim application upon the Commission, which shall maintain records of all ADR claims and resolutions. (2) Settlements of claims presented to the ADR plan administrator shall be evidenced by a settlement agreement. All such settlements shall be filed with the ADR plan administrator, who within 10 days shall forward a copy to the Commission for recording. (3) Upon assignment of claims, unless settled, mediators and arbitrators shall render final orders containing essential findings of fact, rulings of law and referring to other matters as pertinent to the questions at issue. The ADR plan administrator shall maintain a record of the proceedings. (h) Reporting requirements. Annually, each ADR plan administrator shall submit a report to the Commission containing the following information: (1) The number of employees within the ADR program;
  • 13. (2) The number of occurrences of work-related injuries or diseases; (3) The breakdown within the ADR program of injuries and diseases treated; (4) The total amount of disability benefits paid within the ADR program; (5) The total medical treatment cost paid within the ADR program; (6) The number of claims filed within the ADR program; and (7) The disposition of all claims. Summary Because this amendment is dependent on the collective bargaining agreements of the selected unions, and assuming each CBA contemplates both future and pending claims, this change can be considered procedural. It is effective June 28, 2011. In addition, the change specifically states (para. c) that nothing in this Section diminishes or increases rights or benefits to which the parties are otherwise entitled under the current Act. New Section 4b makes no immediate change in the day-to- day operations of the Illinois Workers' Compensation Commission; but it does introduce concepts that depart from how the workers’ compensation program has been administered for generations. The new section does not apply to everyone. It is only an invitation to several Illinois construction-industry labor unions to join with their respective construction employers in designing an experimental program to manage work-related injuries, and possibly even to adjudicate them. The Illinois Secretary of Labor will identify two collective bargaining units to submit proposals. Such experimental programs could continue to utilize the administrative apparatus of the Illinois Workers' Compensation Commission, but are allowed to “streamline” it with any of the following: 1. 1. An exclusive panel of medical treatment providers, 2. 2. An exclusive panel of doctors to perform Independent medical evaluations, 3. 3. An exclusive return to work program, 4. 4. An excusive panel rehabilitation service providers, or 5. 5. Joint safety committees or procedures. The experiment may go much further than just these five streamlining measures. A labor management plan may abandon the Illinois Workers' Compensation Commission entirely and substitute a private alternative dispute resolution system
  • 14. that is binding on the parties. In general, alternative dispute resolution uses private Arbitrators hired by the parties in place of public employee Arbitrators and Commissioners assigned by the government. “Privatization”, however, is not unlimited since the new Section 4b forbids any labor-management plan from increasing or decreasing the employer’s or employee’s existing rights and responsibilities under the Workers’ Compensation Act. We believe that the General Assembly intended that the substance of the Workers’ Compensation Act will still apply, but the procedures under it may change and that it may be administered privately rather than publicly. Said another way, the new section addresses the how, not the what. It strikes us as ironic that the level of dissatisfaction with the current system has reached a point where an “alternative” is being explored. After all, workers compensation was the original “alternative dispute resolution”, born nearly 100 years ago out of similar dissatisfaction with the legal system that existed at the time. Section 4(d) CITATIONS OF EMPLOYERS FOR NON-COMPLIANCE An investigator with the Illinois Workers' Compensation Commission Insurance Compliance Division may issue a citation to any employer that is not in compliance with its obligation to have workers' compensation insurance under this Act. The amount of the fine shall be based on the period of time the employer was in non-compliance, but shall be no less than $500, and shall not exceed $2,500. An employer that has been issued a citation shall pay the fine to the Commission and provide to the Commission proof that it obtained the required workers' compensation insurance within 10 days after the citation was issued. This Section does not affect any other obligations this Act imposes on employers. Summary This is a substantive change and is effective as of June 28, 2011. This section has been amended to allow Insurance investigators the authority to issue citations in the amount of $500 to $2,500 to “any Employer that is not in compliance with its obligations to have workers’ compensation insurance.” After receiving a citation, an Employer will have 10 days to pay the fine and provide proof that it secured proper workers’ compensation insurance. This provision strengthens the 2005 amendments, which allowed for both Criminal and Civil liability for any Employer who knowingly failed to provide worker’s compensation coverage for its employees.
  • 15. MEDICAL CHOICES Section 8(a): Every hospital, physician or surgeon or other person rendering treatment or services in accordance with provisions of this Section shall upon written request furnish full and complete reports thereof to, and permit their records to be copied by, the employer, the employee or his dependents, as the case may be, or any other party to any proceeding for compensation before the Commission or their attorneys. Notwithstanding the foregoing, the employer's liability to pay for such medical services selected by an employee of an employer without an approved preferred provider program pursuant to Section 8.1a on the date the employee sustained his or her accidental injuries shall be limited to: (1) all first aid and emergency treatment; plus (2) all medical surgical and hospital services provided by the physician, surgeon or hospital initially chosen by the employee or by other physician , consultant, expert, institution or other provider of services recommended by said initial service provider or any subsequent provider of medical services in the chain of referrals from said initial service provider; plus (3) all medical, surgical and hospital services provided by any second physician, surgeon or hospital subsequently chosen by the employee or by any other physician, consultant, expert, institution or other provider of services recommended by said second service provider or any subsequent provider of medical services in the chain of referrals from said second service provider. There after the employer shall select and pay for all necessary medical, surgical and hospital treatment and the employee may not select a provider of medical services at the employer's expense unless the employer agrees to such selection. At any time the employee may obtain any medical treatment he desires at his own expense. This paragraph shall not affect the duty to pay for rehabilitation referred to above. (4) The following shall apply for injuries occurring on or after the effective date of this amendatory Act of the 97th General Assembly and only when an employer has an approved preferred provider program pursuant to Section 8.1a on the date the employee sustained his or her accidental injuries: (A) The employer shall, in writing, on a form promulgated by the Commission, inform the employee of the preferred provider program; (B) Subsequent to the report of an injury by an employee, the employee
  • 16. may choose in writing at any time to decline the preferred provider program, in which case that would constitute one of the two choices of medical providers to which the employee is entitled under subsection (a)(2) or (a)(3); and (C) Prior to the report of an injury by an employee, when an employee chooses non-emergency treatment from a provider not within the preferred provider program, that would constitute the employee's one choice of medical providers to which the employee is entitled under Section (a)(2) or (a)(3). Summary This is a substantive change, effective June 28, 2011, and impacting claims on or after that date. This amendment to the Illinois Workers' Compensation Commission Act provides that the employer is entitled to provide a written and approved medical provider program pursuant to Section 8.1a of the Act. To do so, the Employer must provide written notice of the program on a form supplied by the Illinois Workers' Compensation Commission. As of the writing of this summary the forms do not yet exist. If Employer does not have an approved provider plan, the employee's rights to treatment do not change from the existing statute. If the employee reports an accident and provides a written declination of treatment within the Preferred Provider Network, such declination constitutes one of the employee's two choices of medical providers. If the employee does not report an accident and seeks non-emergency treatment outside of the preferred provider plan, the employee is not entitled to seek yet another medical provider because he exercised his choice by seeking non-emergency care, his other choice being waived by his implicit rejection of the employer’s PPP. However, the claimant could still treat with the PPP if he did not provide a written rejection of the PPP. The primary change to this section is the employer's ability to provide a preferred provider plan. This is obviously a response to the freedom that was previously provided the employee and the high medical fees that were associated. In only those instances where the employer does not provide a preferred provider plan is the petitioner given the freedom same to select a doctor that currently exists. WAGE LOSS Section 8(d)1 pertains to claims for wage differential. This provision previously stated:
  • 17. “If, after the accidental injury has been sustained, the employee as a result thereof becomes partially incapacitated from pursuing his usual and customary line of employment, he shall, except in cases compensated under the specific schedule set forth in paragraph (e) of the Section, receive compensation for the duration of his disability, subject to the limitations as to maximum amounts fixed in paragraph (b) of the Section, equal to 66-2/3% of the difference between the average amount which he would be able to earn in the full performance of his duties in the occupation in which he was engaged at the time of the accident and the average amount which he is earning or is able to earn in some suitable employment or business after the accident.” What was added. “For accidental injuries that occur on or after September 1, 2011, an award for wage differential under this subsection shall be effective only until the employee reaches the age of 67 or 5 years from the date the award becomes final, whichever is later.” Summary This is a substantive change effective September 1, 2011. This should represent a savings for the respondent, the degree of which will depend upon each case scenario. On average, the life expectancy of males is 80 years and females 83 years. At the 67 year cap, this is a reduction of 13 and 16 years of wage differential benefits respectively. What this means in dollars and cents will vary with each case. If we assume a maximum wage differential rate of $930.39, thirteen years of benefits equals $628,943.64. Sixteen years of benefits equals $774,084.48. At a more modest $275.00 per week, thirteen years of benefits is $185,900.00. At sixteen years, $228,800.00. The present cash value savings are also encouraging. For example, assume a 55 year old male with a maximum wage differential rate of $930.39. The present cash value of such a claim, assuming a 5% rate of return before the amendment is $681,866.82. For an accident occurring after September 1, 2011, the same claim has a value of $428,808.00. This results is a potential savings of $253,057.89. Assuming a wage differential rate of $275.00 per week, the same scenario results in a pre-amendment present cash value of $191,818.77. Post- amendment value is $126,745.19 a difference of $65,073.58. Practical application. At present, the majority of wage differential claims are resolved via
  • 18. settlement. This is due in large part to petitioner’s desire for a lump sum settlement and the insurance carrier’s desire to close the file. The ability to reach a settlement and the settlement value of the case involves several factors only one of which is the life expectancy of the claimant. More often than not, the deciding factors in the resolution of a wage differential are a disputed earning potential, rate of return and or the degree that the present cash value can be discounted in exchange for a lump sum payment. With the advent of the wage differential cap, we will be armed with yet another factor we can use to bring about a favorable outcome. We are very concerned with the language tying the wage differential cap of 5 years to when “the award becomes final”. With this language, we can conceive of situations, particularly as petitioner gets closer to age 67, in which it would be in the claimant’s best interest to hold off proceeding to trial for as long as possible. We can and will motion matters for hearing where an Application has been filed. The difficulty will lie in cases in which no dispute exists. Case law states that wage differential benefits are to be paid once the extent of the differential is known. There is no requirement for an Application to be filed. The statute of limitations allows a filing of an Application two years from the last payment of benefits. Under this scenario we can envision situations in which the “award” is never entered or an award is entered more than 5 years after the petitioner has reached the age of 67. In these cases, our ability to resolve matters at favorable rates and discounts will depend significantly upon either the claimant’s or opposing counsel’s desire for a lump sum over weekly benefits. SPECIFIC LOSS CLAIMS FOR CARPAL TUNNEL SYNDROME Section 8(e) pertains to specific loss claims. This provision has been modified so as to reduce the overall exposure for hand injuries and specifically place limits on carpal tunnel syndrome. The provision previously stated: “For accidental injuries in the following schedule, the employee shall receive compensation for the period of temporary total incapacity for work resulting from such accidental injury, under subparagraph 1 of paragraph (b) of this Section, and shall receive in addition thereto compensation for a further period for the specific loss herein mentioned, but shall not receive any compensation under any other provisions of this Act. The following listed amounts apply to either the loss of or the permanent and complete loss of use of the member specified, such compensation for the length of time as follow: Hand- 190 weeks if the accidental injury occurs on or after the effective date of the
  • 19. amendatory Act of the 94th General Assembly but before February 1, 2006. 205 weeks if thee accidental injury occurs on or after February 1, 2006.” What was added: “190 weeks if the accidental injury occurs on or after the effective date of this amendatory Act of the 97th General Assembly and if the accidental injury involves carpal tunnel syndrome due to repetitive or cumulative trauma, in which case the permanent partial disability shall not exceed 15% loss of use of the hand, except for cause shown by clear and convincing evidence and in which case the award shall not exceed 30% loss of use of the hand.” Summary: This is a substantive change effective June 28, 2011 and applicable only to accidents occurring after that date. Some practitioners have questioned whether this change reduces the number of weeks to be used in permanency calculations for ALL hand injuries. If that is the case, this would represent an approximate 7% savings on all hand injuries. However, most practitioners interpret this change to 190 weeks for the specific loss of a hand to apply only to carpal tunnel syndrome cases and only if they are causally related to repetitive trauma or cumulative trauma. Carpal tunnel injuries caused by repetitive or cumulative trauma have been further limited to 15% loss of the hand, or 28.5 weeks of compensation. In extreme cases, shown by clear and convincing evidence, the permanency can be increased to 30% loss of the hand or 57 weeks of compensation. Practical application Carpal tunnel syndrome claims at the Commission were fairly common and were generally valued based upon whether surgery was required, the end result and whether the condition involved the dominant hand. For a non- operated carpal tunnel syndrome with a full duty release, a typical exposure would be in the area of 10% of the hand and possibly 12% loss of use if it were the dominant hand. The new maximum percentage enacted will not affect these claims, though we will certainly argue that the intention of the changes was a reduction in permanency. If 15% loss is meant to represent an operated carpal tunnel syndrome with favorable results, a more appropriate award for an un-operated carpal tunnel syndrome should be in the area of 5% to 7% loss of the hand. The inclusion of AMA guides, discussed elsewhere, will also play a role in these assessments. If surgery were required, and again assuming a return to full duty, the typical exposure for such a claim would be in the area of 20% loss of use of
  • 20. the hand and as high as 25% loss of use if it were the dominant hand. In these types of claims, the recent changes should result in significant savings. Again assuming an average weekly wage of $600.00 per week, an operated carpal tunnel syndrome in the dominant hand would have had an exposure in the area of $18,450.00. Post-Amendment, that same claim will have an exposure of $10,260.00, a difference of $8,190.00. The savings increase as the average weekly wage increases. Assuming an average weekly wage of $1000.00 per week, the operated carpal tunnel syndrome has an exposure of up to $30,750.00. Post-Amendment, the same claim will have an exposure of $17,100.00, a savings of $13,650.00. What the Commission means by “except for cause shown by clear and convincing evidence and in which case the award shall not exceed 30% loss of use of the hand” is not particularly clear. We can only surmise that under certain circumstances, the Arbitrator can award up to 30% loss of the hand. At present, 30% loss of use of the hand for a carpal tunnel syndrome claim would be exceptionally high and would only be seen in unusual circumstances. We suspect the Petitioner’s bar will focus on this language to push for decisions that are consistent with the exposure of between 20% and 25% loss of use of the hand. In addition to the discussion regarding whether this change applies to all hand injuries, an additional debate has ensued regarding the level of proof required to meet the burden to establish a compensable claim. Most practitioners have taken the position that the claimant need only prove by a preponderance of the evidence that he or she has sustained a compensable carpal tunnel syndrome as a result of repetitive or cumulative trauma. Some feel, however, that the legislature intended to increase the burden of proof to that of clear and convincing evidence not only for the enhanced percentage loss (over 15%), but also for causation. Certainly, our position will be that the limiting nature of the language demonstrates a clear intent to reduce the exposure on all carpal tunnel claims caused by repetitive or cumulative trauma. The language “except for cause shown by clear and convincing evidence” would denote an exception to the norm and should be an indication of an unusual circumstance needed to receive any award higher than the 15% mandated by the Amendment (or perhaps even as to causal relationship). The Amendments to the Act do not preclude a claimant from seeking benefits under the previously discussed Section 8(d)1 of the Act. Accordingly, the caps placed on carpal tunnel syndrome claims will not come into affect in situations in which ultimate restrictions are such that a claimant is unable to return to his customary line of work resulting in a reduction in wages.
  • 21. PREFERRED PROVIDER PROGRAMS 820 ILCS 305/8.1a Sec. 8.1a. Preferred Provider Programs. Starting on the effective date of this amendatory Act of the 97th General Assembly, to satisfy its liabilities under this Act for the provision of medical treatment to injured employees, an employer may utilize a preferred provider program approved by the Illinois Department of Insurance as in compliance with Sections 370k, 370l, 370m, and 370p of Article XX-1/2 of the Illinois Insurance Code. For the purposes of compliance with these Sections, the employee shall be considered the "beneficiary" and the employer shall be considered the "insured". Employers and insurers contracting directly with providers or utilizing multiple preferred provider programs to implement a preferred provider program providing workers' compensation benefits shall be subject to the above requirements of Article XX-1/2 applicable to administrators with regard to such program, with the exception of Section 370l of the Illinois Insurance Code. (a) In addition to the above requirements of Article XX-1/2 of the Illinois Insurance Code, all preferred provider programs under this Section shall meet the following requirements: (1) The provider network shall include an adequate number of occupational and non-occupational providers. (2) The provider network shall include an adequate number and type of physicians or other providers to treat common injuries experienced by injured workers in the geographic area where the employees reside. (3) Medical treatment for injuries shall be readily available at reasonable times to all employees. To the extent feasible, all medical treatment for injuries shall be readily accessible to all employees. (4) Physician compensation shall not be structured in order to achieve the goal of inappropriately reducing, delaying, or denying medical treatment or restricting access to medical treatment. (5) Before entering into any agreement under this Section, a program shall establish terms and conditions that must be met by non-institutional providers wishing to enter into an agreement with the program. These terms and conditions may not discriminate unreasonably against or among non-institutional providers. Neither difference in prices among non-institutional providers produced by a process of individual negotiation nor price differences among other non-institutional providers in different geographical areas or different specialties constitutes unreasonable discrimination.
  • 22. (b) The administrator of any preferred provider program under this Act that uses economic evaluation shall file with the Director of Insurance a description of any policies and procedures related to economic evaluation utilized by the program. The filing shall describe how these policies and procedures are used in utilization review, peer review, incentive and penalty programs, and in provider retention and termination decisions. The Director of Insurance may deny approval of any preferred provider program that uses any policy or procedure of economic evaluation to inappropriately reduce, delay or deny medical treatment, or to restrict access to medical treatment. Evaluation of providers based upon objective medical quality and patient outcome measurements, appropriate use of best clinical practices and evidence based medicine, and use of health information technology shall be permitted. If approved, the employer shall provide a copy of the filing to all participating providers. (1) The Director of the Department of Insurance shall make each administrator's filing available to the public upon request. The Director of the Department of Insurance may not publicly disclose any information submitted pursuant to this Section that is determined by the Director of the Department of Insurance to be confidential, proprietary, or trade secret information pursuant to State or federal law. (2) For the purposes of this subsection (b), "economic evaluation" shall mean any evaluation of a particular physician, provider, medical group, or individual practice association based in whole or in part on the economic costs or utilization of services associated with medical care provided or authorized by the physician, provider, medical group, or individual practice association. Economic evaluation shall not include negotiated rates with a provider. (c) Except for the provisions of subsection (a) of Section 26 and for injuries occurring on or after the effective date of this amendatory Act of the 97th General Assembly, an employee of an employer utilizing a preferred provider program shall only be allowed to select a participating network provider from the network. [emphasis added] An employer shall be responsible for: (i) all first aid and emergency treatment; (ii) all medical, surgical, and hospital services provided by the participating network provider initially selected by the employee or by any other participating network provider recommended by the initial participating network provider or any subsequent participating network provider in the chain of referrals from the initial participating network provider; and (iii) all medical, surgical, and hospital services provided by the participating network provider subsequently chosen by the employee or by any other participating network provider recommended by the subsequent participating network provider or any subsequent participating network provider in the chain of referrals from the second participating network provider. An employer shall not be liable for services determined by the Commission not to be compensable. An employer shall not be liable for medical services provided by a non-authorized provider when proper notice is provided to the injured worker.
  • 23. (1) When the injured employee notifies the employer of the injury or files a claim for workers' compensation with the employer, the employer shall notify the employee of his or her right to be treated by a physician of his or her choice from the preferred provider network established pursuant to this Section, and the method by which the list of participating network providers may be accessed by the employee, except as provided in subsection (a)(4) of Section 8. (2) Consistent with Article XX-1/2 of the Illinois Insurance Code, treatment by a specialist who is not a member of the preferred provider network shall be permitted on a case-by-case basis if the medical provider network does not contain a physician who can provide the approved treatment, and if the employee has complied with any pre-authorization requirements of the preferred provider network. Consent for the employee to visit an out-of-network provider may not be unreasonably withheld. When a non-network provider is authorized pursuant to this subparagraph (2), the non-network provider shall not hold an employee liable for costs except as provided in subsection (e) of Section 8.2. (3) The Director shall not approve, and may withdraw prior approval of, a preferred provider program that fails to provide an injured employee with sufficient access to necessary treating physicians, surgeons, and specialists. (d) Except as provided in subsection (a)(4) of Section 8, upon a finding by the Commission that the care being rendered by the employee's second choice of provider within the employer's network is improper or inadequate, the employee may then choose a provider outside of the network at the employer's expense. The Commission shall issue a decision on any petition filed pursuant to this Section within 5 working days. (e) The Director of the Department of Insurance may promulgate such rules as are necessary to carry out the provisions of this Section relating to approval and regulation of preferred provider programs. Summary This amendment is substantive and effective as of June 28, 2011. This is a wholly new section added to the Act with these latest Amendments. This provision essentially gives employers the option to satisfy liability for medical treatment under the Act through the use of a Preferred Provider Program (PPP). The PPP must be approved by the Illinois Department of Insurance and comply with applicable portions of the Illinois Insurance Code. (in order to deal with issues of compliance with the applicable portions of the Insurance Code the employer shall be considered the “Insured” and the
  • 24. employee shall be considered the “Beneficiary”). Beyond being subject to the approval of the Illinois Department of Insurance the PPP must also meet the following requirements: 1. Include an “adequate” number of BOTH occupational and non- occupational medical providers 2. Include an “adequate” number and type of physicians (or other providers) to treat common injuries experienced by injured workers in the geographic area where the employees reside (not simply where the workplace is located). It is entirely unclear how this will work for companies that frequently employ union members who travel across the state or even from out-of-state. It is unclear whether “reside” refers to the employee’s permanent residence or, if he / she is traveling, to his or her temporary / motel residence. 3. Medical treatment for injuries shall be “readily available” and “readily accessible”, as reasonable, to ALL employees 4. Physician compensation SHALL NOT be structured in a manner that could be said to reduce, delay or deny medical treatment or restrict access to such treatment. In other words, compensation cannot be so low that the employees cannot get access to the physicians. 5. The PPP must establish terms/conditions that must be met for a provider to be able to become a part of the PPP and such terms/conditions cannot discriminate unreasonably. The price of services as a term/condition does not constitute discrimination. However, the employer must file with the Department of Insurance a written description of all economic valuations that are utilized as terms/conditions and the Director of Insurance may deny approval of a PPP that uses any such term/condition in a manner felt to reduce, delay, or deny medical treatment. The employer must provide a copy of the network filing to all participating providers and this shall be a matter of public record. An injured employee of an employer that has established such a PPP is only permitted to select a physician from those within the network. Assuming the employee does so, the employer shall be liable for: 1. All first aid and emergency treatment, 2. All medical, surgical and hospital services within the network from employees first choice of network provider or “within the chain of referral” from the initial network provider
  • 25. 3. All medical, surgical and hospital services arising from employees second choice and within the “chain of referral” from that choice. An employer is NOT liable for any medical services either found not to be compensable by the IWCC or for any services provided by a non- authorized provider when proper notice is given the employee. When an employee reports an injury and/or files an Application the employer must notify the employee of his/her right to obtain medical treatment from a physician within the PPP network, and instructions to access the list of network providers. An exception allows an employee to obtain treatment from a specialist who is NOT a member of the PPP on a ‘case-by-case” basis if the PPP does not contain a physician who can provide the treatment in question (for example, a cardiologist, a dermatologist, a pulmonologist) and the employee complies with any pre-authorization requirements of the PPP. An employer may NOT unreasonably deny such care. If the Illinois Workers' Compensation Commission finds that medical care rendered by employee’s second choice of provider within the PPP is improper or inadequate, the employee may then choose a provider OUTSIDE the PPP at the employer’s expense. This can be determined by way of a Section 8(a) Petition and a Decision must be filed within five (5) business days of any such hearing (expedited process). Historically, case law has established that third parties (employers, adjusters) may not communicate with a treating doctor about treatment issues associated with an injured worker. This amendment does not change that prohibition even though the employer is instrumental in establishing the panel and selecting the panel members that will, in whole or part, treat the injured employee. The exception to this restriction is either that the employer obtain permission (a release) from the employee, in which case communication is allowed, or that the employer seek only the minimal information necessary to administer the claim, e.g. the diagnosis, prognosis, treatment  plan,  restrictions, and copies of records or reports. By the same token, assembling a panel does not mean that the panel members are the agents of the employer or speak for the employer. Nevertheless, it is an accepted observation before the Commission that if an employer selects a doctor to conduct an examination (Section 12) or to provide treatment, the presumption is that the employer respects the doctor’s qualifications and opinions; giving the impression of agency where none actually exists. This amendment clearly creates some medical control heretofore unknown
  • 26. in Illinois workers' compensation law. The employees, whether (union) organized or not, will not have any input regarding the makeup of the panel(s). On the other hand, the legislation makes it possible for doctors historically known as being “petitioner’s doctors” to seek to join local panels. Paragraph 5, above, requires that the rules to join a panel may not be discriminatory. The legislation does not establish how large a panel may be, only that it may not be so small as to prevent the employees from getting access to medical care with customary treating professionals (orthopedists, neurologists, neurosurgeons, physiatrists, occupational medicine specialists). The reference to “other providers” could allow the inclusion of, for instance, chiropractors or other healers. EVALUATING PERMANENT DISABILITY (820 ILCS 305/8.1b new) Sec. 8.1b. Determination of permanent partial disability. For accidental injuries that occur on or after September 1, 2011, permanent partial disability shall be established using the following criteria: (a) A physician licensed to practice medicine in all of its branches preparing a permanent partial disability impairment report shall report the level of impairment in writing. The report shall include an evaluation of medically defined and professionally appropriate measurements of impairment that include, but are not limited to: loss of range of motion; loss of strength; measured atrophy of tissue mass consistent with the injury; and any other measurements that establish the nature and extent of the impairment. The most current edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment" shall be used by the physician in determining the level of impairment. (b) In determining the level of permanent partial disability, the Commission shall base its determination on the following factors: (i) the reported level of impairment pursuant to subsection (a); (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the employee's future earning capacity; and (v) evidence of disability corroborated by the treating medical records. No single enumerated factor shall be the sole determinant of disability. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in
  • 27. a written order. Summary This is a substantive change in the law. The legislature has pronounced that the effective date is September 1, 2011. For accidental injuries that occur on or after September 1, 2011, permanent partial disability shall be established using following criteria: A. Level of Impairment: Physician licensed to practice medicine in all its branches preparing a permanent partial disability impairment report shall report written level of impairment and shall include evaluation of medically defined and professionally appropriate measurements of impairment that include, but are not limited to: 1. Loss of range of motion 2. Loss of strength 3. Measured atrophy of tissue mass consistent with the injury 4. Any other measurements that establish the nature and extent of the injury 5. The most current edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment" shall be used by the physician in determining the level of impairment. Currently the 6th Edition, 2008 is the most current edition. In AMA Guides (6th edition 2008), the three– step process for evaluating impairment is contained in section 2.7. This section is required reading, as it contains many important requirements for the impairment rater. See attachment Section 2.7. a. Step 1 is clinical evaluation, which requires a review of medical records and documenting inconsistencies. The examinee should be encouraged to give full effort in the physical examination, and the physician should review the diagnostic studies.
  • 28. b. Step 2 is analysis of findings, including diagnoses, MMI status, current abilities for activities of daily (ADLs), and flagging of missing data. c. Step 3 is a specific discussion of how the impairment rating was calculated, and the discussion should cite the pages and tables in the AMA Guides that are used and how they are used. B. Permanent Partial Disability: In determining PPD, the Commission shall base its determination on the following factors: 1. The reported level of impairment pursuant to subsection (a) 2. The occupation of the injured employee; 3. The age of the employee at the time of the injury; 4. The employee's future earning capacity; and 5. Evidence of disability corroborated by the treating medical records. C. No single enumerated factor shall be the sole determinant of disability. D. Relevance and weight of factors must be explained in writing. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order. E. Questions: 1. Section 12 examinations, commonly known as Independent medical examinations are to be done by “duly qualified medical practitioner or surgeon selected by the employer” and “for the purpose of determining the nature, extent, and probable duration and probable duration of the injury received by the employee, and for the purpose of ascertaining the amount of compensation which may be due the employee from time to time for disability” according to the provisions of the Act. Section 8.1b limits the type of evidence that can be relied
  • 29. upon by the Illinois Workers' Compensation Commission in determining PPD. It refers to physicians “licensed to practice medicine in all its branches” issuing a permanent partial disability impairment report. Does this limit physicians such as chiropractors and podiatrists from issuing permanent partial disability impairment reports or mean that reports from such physicians cannot be relied upon by the Commission, even though Section 12 does not specify this? 2. Section 8.1b places no limitation on treating physicians “licensed to practice medicine in all its branches” from issuing permanent partial disability impairment reports as long as its requirements are followed. However, if such reports are contained in the patient’s medical records, are they subject to an objection by an employer attorney as being made in anticipation of litigation so that such reports do not go into evidence automatically under Section 16? Section 2.7 of Guides to the Evaluation of Permanent Impairment, 6th edition, 2008 - Preparing Reports A clear, accurate and complete report must be pro- vided to support a rating of permanent impairment. The following 3-step process is required by the examiner to estimate impairment according to the Guides: Clinical evaluation, analysis of the findings, and discussion of how the impairment rating was calculated. 2.7a Clinical Evaluation The relevant history is obtained by a review of medical records reflecting past medical history and the patient’s presentation of the current history. It is important to review medical records before performing an impairment rating, as this will enable the examiner, among other things. to: • Clarify or at least document inconsistencies. if any, between the history provided by the patient and the history contained in the medical records. • Reconcile inconsistencies, if any, between the patients history during the examination and other previous medical records. It is necessary to clarify historical inconsistencies because several issues, including causation. are primarily determined by the history.
  • 30. Focus on the portions of the history pertinent to the impairment rating. The physical examination should be performed in a manner and setting that facilitates the effective communication between the patient and the examiner, thereby decreasing anxiety and increasing concentration and effort. If the examiner believes the patient may be giving an inconsistent effort during the physical examination, the patient should be encouraged to give a full effort. For extremity impairment evaluations, findings should be documented bilaterally; if the contralateral extremity is uninjured. this may serve as the baseline for defining “normal” for the impaired extremity. The results of specific measurements must be reproducible to be valid. Review of all available diagnostic studies and laboratory data is critical in this step. 2.7b Analysis of the Findings Discuss how specific findings relate to the conclusion of diagnoses and MMI status. Refer to the current abilities of ADLs and any validated deficiencies. Explain the absence of any pertinent data and how the physician determined the impairment rating with limited data. 2.7c Discussion of How the Impairment Rating Was Calculated Discussion of how the Guides’ criteria were applied to medical information that generated the specific rating is required for an impairment evaluation to be consistent with the Guides. Compare the appropriate information obtained on history and objective findings with the criteria described in the applicable chapter of the Guides. Include an explanation of each impairment value with reference, including pages and table number, to the applicable criteria of the Guides. Combine multiple impairments for a final composite whole person impairment number, unless otherwise directed by jurisdictional application. Discuss how individual ratings were combined or added to create a final number; explain why certain ratings were disregarded in the final analysis due to invalid measurements and test results; and perform apportionment, where applicable. Include a summary list of impairments and impairment ratings by percentage, including calculation of the whole person impairment. as appropriate. A standard report format Figure 2-3, that the evaluator may use is provided in this chapter; the purpose of this form is to ensure that all essential elements are included in the impairment evaluation report. This form may be reproduced without permission from the American Medical Association. When relevant chapters include a data collection form or summary form that identifies the specific features to consider for each category of organ system impairment, it must be used to document the data and be attached
  • 31. with the final report. This will ensure that the process of impairment evaluation according to the Guides is transparent and is subject to understanding by all parties interested in the outcome. The 3-step process described in this section applies to rating all organ systems. Although the underlying impairment evaluation criteria may differ, the process is essentially the same for rating all organ systems. The first 2 steps must be performed by a licensed physician. and if the clinical findings are fully described, any knowledgeable observer may check the findings against the Guides’ criteria. FEE SCHEDULE SECTION 8.2 OF THE ILLINOIS WORKERS’ COMPENSATION (820 ILCS 305/8.2) Sec. 8.2. Fee schedule. (a) Except as provided for in subsection (c), for procedures, treatments, or services covered under this Act and rendered or to be rendered on and after February 1, 2006, the maximum allowable payment shall be 90% of the 80th percentile of charges and fees as determined by the Commission utilizing information provided by employers' and insurers' national databases, with a minimum of 12,000,000 Illinois line item charges and fees comprised of health care provider and hospital charges and fees as of August 1, 2004 but not earlier than August 1, 2002. These charges and fees are provider billed amounts and shall not include discounted charges. The 80th percentile is the point on an ordered data set from low to high such that 80% of the cases are below or equal to that point and at most 20% are above or equal to that point. The Commission shall adjust these historical charges and fees as of August 1, 2004 by the Consumer Price Index-U for the period August 1, 2004 through September 30, 2005. The Commission shall establish fee schedules for procedures, treatments, or services for hospital inpatient, hospital outpatient, emergency room and trauma, ambulatory surgical treatment centers, and professional services. These charges and fees shall be designated by geozip or any smaller geographic unit. The data shall in no way identify or tend to identify any patient, employer, or health care provider. As used in this Section, "geozip" means a three-digit zip code based on data similarities, geographical similarities, and frequencies. A geozip does not cross state boundaries. As used in this Section, "three-digit zip code" means a geographic area in which all zip codes have the same first 3 digits. If a geozip does not have the necessary number of charges and fees to calculate a valid percentile for a specific procedure, treatment, or service, the Commission may combine data from the geozip with up to 4 other geozips that are demographically and economically similar and exhibit similarities in data and frequencies until the Commission reaches 9 charges or fees for that specific procedure, treatment, or service. In cases where the compiled data contains less than 9 charges or fees for a procedure, treatment, or service, reimbursement shall occur at 76% of charges and fees as determined by the Commission in a manner
  • 32. consistent with the provisions of this paragraph. Providers of out-of-state procedures, treatments, services, products, or supplies shall be reimbursed at the lesser of that state's fee schedule amount or the fee schedule amount for the region in which the employee resides. If no fee schedule exists in that state, the provider shall be reimbursed at the lesser of the actual charge or the fee schedule amount for the region in which the employee resides. Not later than September 30 in 2006 and each year thereafter, the Commission shall automatically increase or decrease the maximum allowable payment for a procedure, treatment, or service established and in effect on January 1 of that year by the percentage change in the Consumer Price Index-U for the 12 month period ending August 31 of that year. The increase or decrease shall become effective on January 1 of the following year. As used in this Section, "Consumer Price Index-U" means the index published by the Bureau of Labor Statistics of the U.S. Department of Labor, that measures the average change in prices of all goods and services purchased by all urban consumers, U.S. city average, all items, 1982-84=100. (a-1) Notwithstanding the provisions of subsection (a) and unless otherwise indicated, the following provisions shall apply to the medical fee schedule starting on September 1, 2011: (1) The Commission shall establish and maintain fee schedules for procedures, treatments, products, services, or supplies for hospital inpatient, hospital outpatient, emergency room, ambulatory surgical treatment centers, accredited ambulatory surgical treatment facilities, prescriptions filled and dispensed outside of a licensed pharmacy, dental services, and professional services. This fee schedule shall be based on the fee schedule amounts already established by the Commission pursuant to subsection (a) of this Section. However, starting on January 1, 2012, these fee schedule amounts shall be grouped into geographic regions in the following manner: (A) Four regions for non-hospital fee schedule amounts shall be utilized: (i) Cook County; (ii) DuPage, Kane, Lake, and Will Counties; (iii) Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe, Montgomery, Randolph, St. Clair, and Washington Counties; and (iv) All other counties of the State. (B) Fourteen regions for hospital fee schedule amounts shall be utilized: (i) Cook, DuPage, Will, Kane, McHenry, DeKalb, Kendall, and Grundy Counties; (ii) Kankakee County; (iii) Madison, St. Clair, Macoupin, Clinton, Monroe, Jersey, Bond, and Calhoun Counties; (iv) Winnebago and Boone Counties; (v) Peoria, Tazewell, Woodford, Marshall, and Stark Counties; (vi) Champaign, Piatt, and Ford Counties; (vii) Rock Island, Henry, and Mercer Counties;
  • 33. (viii) Sangamon and Menard Counties; (ix) McLean County; (x) Lake County; (xi) Macon County; (xii) Vermilion County; (xiii) Alexander County; and (xiv) All other counties of the State. (2) If a geozip, as defined in subsection (a) of this Section, overlaps into one or more of the regions set forth in this Section, then the Commission shall average or repeat the charges and fees in a geozip in order to designate charges and fees for each region. (3) In cases where the compiled data contains less than 9 charges or fees for a procedure, treatment, product, supply, or service or where the fee schedule amount cannot be determined by the non-discounted charge data, non-Medicare relative values and conversion factors derived from established fee schedule amounts, coding crosswalks, or other data as determined by the Commission, reimbursement shall occur at 76% of charges and fees until September 1, 2011 and 53.2% of charges and fees thereafter as determined by the Commission in a manner consistent with the provisions of this paragraph. (4) To establish additional fee schedule amounts, the Commission shall utilize provider non-discounted charge data, non-Medicare relative values and conversion factors derived from established fee schedule amounts, and coding crosswalks. The Commission may establish additional fee schedule amounts based on either the charge or cost of the procedure, treatment, product, supply, or service. (5) Implants shall be reimbursed at 25% above the net manufacturer's invoice price less rebates, plus actual reasonable and customary shipping charges whether or not the implant charge is submitted by a provider in conjunction with a bill for all other services associated with the implant, submitted by a provider on a separate claim form, submitted by a distributor, or submitted by the manufacturer of the implant. "Implants" include the following codes or any substantially similar updated code as determined by the Commission: 0274 (prosthetics/orthotics); 0275 (pacemaker); 0276 (lens implant); 0278 (implants); 0540 and 0545 (ambulance); 0624 (investigational devices); and 0636 (drugs requiring detailed coding). Non-implantable devices or supplies within these codes shall be reimbursed at 65% of actual charge, which is the provider's normal rates under its standard chargemaster. A standard chargemaster is the provider's list of charges for procedures, treatments, products, supplies, or services used to bill payers in a consistent manner. (6) The Commission shall automatically update all codes and associated rules with the version of the codes and rules valid on January 1 of that year. (a-2) For procedures, treatments, services, or supplies covered under this
  • 34. Act and rendered or to be rendered on or after September 1, 2011, the maximum allowable payment shall be 70% of the fee schedule amounts, which shall be adjusted yearly by the Consumer Price Index-U, as described in subsection (a) of this Section. (a-3) Prescriptions filled and dispensed outside of a licensed pharmacy shall be subject to a fee schedule that shall not exceed the Average Wholesale Price (AWP) plus a dispensing fee of $4.18. AWP or its equivalent as registered by the National Drug Code shall be set forth for that drug. Summary This is a substantive change; however the real impact is not on the rights of the parties as much as on the rights of the medical providers. To allow the providers to acclimate their practices to the new requirements this amendment will not be effective until September 1, 2011. With the 2005 Amendments, the Illinois Workers’ Compensation Act established a Fee Schedule for medical treatment related to workers’ compensation injuries. At the time, the Fee Schedule was to provide substantial savings to Illinois Businesses and offset the increases in benefits to Petitioners provided along with the 2005 Amendments. Unfortunately, the savings promised by the Medical Fee Schedule did not materialize as hoped. The current Medical Fee Schedule amendments will provide substantial savings to Illinois Business not seen subsequent to the enactment of the original fee schedule. In fact, Politicians and Business groups have suggested that the Medical Fee Schedule changes as part of House Bill 1698 will save Illinois businesses as much as $500,000,000.00 annually. This represents a majority of the overall estimated savings to Illinois businesses anticipated with these amendments. 
Section 8.2 of the Illinois Worker’s Compensation Act established the medical fee schedule. Substantial changes were made to Section 8.2 of the Act as part of House Bill 1698. The first change concerns treatment rendered by out-of-state providers. The amendment states that providers of out-of-state procedures, treatments, services, products or supplies shall be reimbursed at the lesser of that state’s Fee Schedule amount or the Fee Schedule amount for the region in which the employee resides. If no Fee Schedule exists in that state, the provider shall be reimbursed at the lesser of the actual charge or the Fee Schedule amount for the region in which the employee resides. Even after the current changes to the Fee Schedule, Illinois still has the second highest Medical Fee Schedule reimbursement rate to providers of the thirty-seven states that have Fee Schedules as part of their Workers’
  • 35. Compensation Act. Therefore, for the majority of out of state medical treatment, the other state’s Medical Fee Schedule will likely control the cost of that medical care. However, there still may be some savings resulting for this amendment. In addition, with regard to the application of the Fee Schedule, there were changes made to the “geozips” identified in Section 8.2 of the Act. Geozips refer to a three digit zip code based upon data similarities, geographical similarities, and frequencies. For treatment subsequent to September 1, 2011, there will be four such regions for non-hospital Fee Schedule amounts and fourteen such regions for hospital Fee Schedule amounts. The regions are identified by county. The four non-hospital Fee Schedule regions are the following: (1) Cook County; (2) DuPage, Kane, Lake and Will Counties; (3) Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe, Montgomery, Randolph, St. Clair, and Washington Counties; and, (4) all other counties of the state. The fourteen regions for hospital Fee Schedule amounts are the following: (1) Cook, DuPage, Will, Kane, McHenry, DeKalb, Kendall and Grundy Counties; (2) Kankakee County; (3) Madison, St. Clair, Macoupin, Clinton, Monroe, Jersey, Bond and Calhoun Counties; (4) Winnebago and Boone Counties; (5) Peoria, Tazewell, Woodford, Marshall, and Stark Counties; (6) Champaign, Piatt and Ford Counties; (7) Rock Island, Henry and Mercer Counties; (8) Sangamon and Menard Counties; (9) McLean County; (10) Lake County; (11) Macon County; (12) Vermillion County; (13) Alexander County; and, (14) all other counties of the state. In cases where the compiled data contains less than nine charges or fees for a procedure, treatment, product, supply or service or where the Fee Schedule amount cannot be determined by the non-discounted charge data, non-Medicare relative values and conversion factors derived from established Fee Schedule amounts, coding, crosswalks or other data as determined by the Commission, for charges after September 1, 2011,
  • 36. reimbursement shall occur at 53.2% of charges and fees as determined by the Commission in a manner consistent with the provisions of this paragraph. For such charges prior to September 1, 2011, reimbursement was at seventy-six percent of the charges and fees. This represents a 30% reduction in these fees and should provide substantial savings where applicable. With the current amendment, Section 8.2 of the Act will now cover implants as well. Implants shall be reimbursed at 25% above the net manufacturer’s invoice price less rebates. Reimbursement will also include actual reasonable and customary shipping charges. House bill 1698 specifically identifies the codes to be considered as implants but does allow substantially similar updated codes as determined by the Commission. Non-implantable devices or supplies within these defined codes are to be reimbursed at sixty-five percent of the actual charge. The most substantial change to Section 8.2 in House Bill 1698 provides that for procedures, treatments, services or supplies covered under the Act and rendered or to be rendered on or after September 1, 2011, the maximum allowable payment shall be seventy percent of the Fee Schedule amount. The Fee Schedule amount is to be adjusted yearly by the Consumer Price Index – U as described in the amendments to the Act and placement of the Fee Schedule in the 2005 amendments. Essentially, House Bill 1698 provides for a thirty percent reduction in the prior Fee schedule. According to Insurance estimates, medical expenses for work related injuries in Illinois are now in the area of $1.5 billion dollars annually. Thus, it has been estimated that the thirty percent reduction in the fee schedule rate will result in savings of approximately $500,000,000.00 for Illinois businesses. The amendment also addresses prescriptions filled and dispensed outside of a licensed pharmacy. Those charges shall be subject to a Fee Schedule that shall not exceed the average wholesale price plus a dispensing fee of $4.18. In addition to amending the Medical Fee Schedule rate and increasing the amount of covered expenses, the amendments also address the timeframe upon which payment for services rendered shall be made. Previously, employers had sixty days from receipt of all of the necessary data elements to adjudicate the bill to make payment. With the amendment, this timeframe is reduced to thirty days. Furthermore, the changes address the responsibility on the employers when the bill does not include all the necessary data elements to adjudicate the bill. In this scenario, or in the case where the bill is denied for any other reason, the employer shall provide written notification to the provider explaining the basis for the
  • 37. denial and/or describing any additional necessary data elements required to adjudicate the bill. This written notice is to be provided within thirty days of receipt of the bill. The amendments provide that interest is to accrue at a rate of 1% per month in the case of non-payment within thirty days of receipt of a bill that contains substantially all of the required data elements necessary to adjudicate the bill. While the interest charge did not change in the amendment, the timeframe for accrual of interest dropped to thirty days, consistent with the drop in the timeframe to make payment on the bill. The amendment provides that any required interest payments shall be made within thirty days of payment of the bill. With these changes, of course, though reducing the amount that providers will receive under the new Act, the legislature is trying to speed up the payment process. In addition to the above, Section 8.2(a) has been added to the Illinois Workers’ Compensation Act. This section deals with electronic claims for payment of medical services. Under this section, the director of insurance is to adopt rules to: (1) ensure that all healthcare providers and facilities submit medical bills for payment on standardized forms; (2) require acceptance by employers and insurers of electronic claims for payment of medical services; and, (3) ensure confidentiality of medical information submitted on electronic claims for payment of medical services. Where possible, the rules shall be consistent with existing standards under the Federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 as well as standard adopted under the Illinois Health Insurance Exchange and Technology Act. Section 8.2(a) provides that the rules referenced above shall be proposed on or before January 1, 2012. The section requires all employers and insurers to accept electronic claims for payment of medical services on or before June 30, 2012. Finally, Section 8.2 has been amended to include language that a provider shall not bill or otherwise attempt to recover from the employee for medical services or treatment determined by the Commission to be excessive or unnecessary. Prior to this change, employers were not liable for medical services or treatment determined by the Commission to be excessive or unnecessary. However, after such a finding by the commission, the medical providers could seek payment of the medical services or treatment directly from the petitioner. It is hoped that this language will curb excessive or unnecessary treatment, a problem that has plaguing employers, business, and Petitioners alike.
  • 38. It has been estimated that the amendments will save Illinois businesses a combined 500 million to 700 million dollars annually. The majority of those savings are anticipated to come from changes made to Section 8.2 of the Illinois Workers’ Compensation Act. Savings were promised in 2005 when the Medical Fee Schedule was established. The savings, were not realized. However, these amendments should result in substantial savings for Illinois business. However, as noted above, thirty-seven states presently have Medical Fee Schedules in place as part of their state’s Workers’ Compensation Act. Out of those thirty-seven states, Illinois’ Medical Fee Schedule, prior to House Bill 1698 provided for the second highest reimbursement rate. Even after the thirty percent reduction in the Medical Fee Schedule discussed above, Illinois will still rank as the having the second highest reimbursement rate for medical services rendered as part of a workers’ Compensation injury. Thus, House Bill 1698 was criticized by some as not going far enough to bring Illinois more in line with other states in the Union. MEDICAL PROVIDERS PROHIBITED FROM COLLECTING AGAINST CLAIMANTS FOR MEDICAL SERVICES OR TREATMENT DETERMINED BY THE COMMISSION TO BE EXCESSIVE OR UNNECESSARY (820 ILCS 305/8.2) Sec. 8.2. Fee schedule (e) Except as provided in subsections (e-5), (e-10), and 7 (e-15), a provider shall not hold an employee liable for costs related to a non-disputed procedure, treatment, or service rendered in connection with a compensable injury. The provisions of subsections (e-5), (e-10), (e-15), and (e-20) shall not apply if an employee provides information to the provider regarding participation in a group health plan. If the employee participates in a group health plan, the provider may submit a claim for services to the group health plan. If the claim for service is covered by the group health plan, the employee's responsibility shall be limited to applicable deductibles, co-payments, or co-insurance. Except as provided under subsections (e-5), (e-10), (e-15), and (e-20), a provider shall not bill or otherwise attempt to recover from the employee the difference between the provider's charge and the amount paid by the employer or the insurer on a compensable injury, or for medical services or treatment determined by the Commission to be excessive or unnecessary. SUMMARY There is a debate as to whether this is procedural or substantive. We consider it substantive and effective immediately (June 28, 20111), impacting cases arising after
  • 39. the signing date. Clearly this does not impact the rights of either of the customary parties to the litigation, but it does affect property rights of medical providers. Based on this new provision, if the Commission determines that medical services or treatment were excessive or unnecessary, the medical provider will be prohibited from pursuing recovery for his charges against the claimant despite the fact that the claimant retained the medical provider and had an implied contract to pay for the medical services rendered. While we welcome this provision which hopefully will end some of the abusive over-treatment, over-utilization of certain medical services, and excessive charges we often see, we expect this to become somewhat problematic in the day-to-day practice before the Commission. In the case where a medical provider has made excessive charges or has rendered unnecessary treatment which are challenged, it now should be necessary, with acknowledgment of due process concerns, to bring that medical provider before the Commission to give the provider an opportunity to be heard and to justify their charges or the reasonableness of the treatment they rendered. If those medical providers whose bills are challenged are not given an opportunity to be heard before their bills are adjudicated, they will have a strong argument that they were denied the due process of law and left with no avenue to recover the charges for the service they rendered. This would clearly be improper. Prior to this amendment, if the Commission found a medical bill to be excessive or medical services to be unreasonable or unnecessary, the Commission would simply deny payment of the bill as part of the award. In that event the medical provider could still pursue recovery for the unpaid balance against the claimant/employee/patient in the Circuit Court under a theory that there had been a valid contract for his services. The claimant would have to dispute the charges in that forum. However, with this provision in effect, the claimant/employee/patient’s liability for the disallowed charges is eliminated by a finding by the Commission. Accordingly, it will be imperative to give such medical providers with challenged bills an opportunity to be heard before their bills are adjudicated. Since now it will likely be necessary to bring medical providers whose bills are challenged (and their attorneys) before the Commission for them to participate in the hearing regarding their bills, it will be necessary for the Commission to create some mechanism or process by which such medical providers can be joined as necessary parties to a pending workers’ compensation case. Since liens for medical services are not recognized under the Workers’ Compensation Act, and there is no established procedure to bring necessary parties before the Commission, it will be necessary for the Illinois Workers' Compensation Commission to promulgate Rules governing how such parties should be joined to the action pending before the Commission. Accordingly, by passing this provision, the legislature had good intentions of protecting claimants from liability for excessive medical bills and bills for unnecessary treatment, but has increased the burden on the Commission which is charged with adjudicating those disputed bills. This will accordingly add additional parties and lawyers to the proceedings which were always intended to be simple and summary. Unfortunately, the practice before the Commission is coming