At the 2016 Illinois Self Insurers’ Assoication annual meeting Jay Dee Shattuck, President of Shattuck & Associates Consulting provided a legislative update for the state of Illinois.
Governor Rauner has made workers’ compensation reform one of his priorities as he feels this is important to maintain a competitive business environment in Illinois. Unfortunately, the Governor’s efforts have been rebutted by the Illinois Legislature. The House and Senate both pushed their own workers’ compensation bills which were not meaningful reform that would have reduced costs, but both these bills did not pass.
There are currently negotiations with a working group trying to come up with bipartisan workers’ compensation reform that can be supported by employers, labor, and the medical community. The goal is to tie this back to a budget bill to help address Illinois budget deficit.
There are several key issues in these reform negotiations:
- Causation – The causation standard is very challenging for Illinois employers as Illinois allows a workers’ compensation claim for even a minor aggravation of a preexisting condition. The Governor is pushing for a causation standards in line with some other states where they require the work exposure to be the “prevailing factor” in order for a claim to be viable.
- Traveling Employees – The Statutes do not define what a traveling employee is and the courts have significantly expanded what is considered a traveling employee and when they are in course and scope of employment and subject to workers’ compensation.
- Self-insurance regulation – The state is pushing for a higher level of reporting claims data from self-insured employers so that more analysis can be done of their claims.
- Rate regulation – Some are saying there is no issue from the claims side and that the problems with Illinois workers’ compensation is excessive carrier rates. They are calling for greater regulation of rates because of this. There are significant concerns that rate regulation could reduce the number of carriers willing to write coverage in Illinois which would ultimately drive up costs further and drive more employers into the assigned risk pool.
- There is concern around the appeals process as the Court of Appeals has been consistently expanding the application of the statutes beyond their legislative intent. The courts also require the employer post an appeals bond for litigation that is appealing which creates an undo burden on employers. Finally, cases cannot be appealed to the Supreme Court without certification from the lower court. If the lower court decision was unanimous, there is no avenue for appeal.
- Indemnity rates/PPD awards – Illinois has some of the highest indemnity benefit rates in the nation. They are not looking to reduce these rates, but they are looking at reforms that would allow credit for prior PPD awards on a body as a whole injury. Under current case law, an employee can receive cumulative PPD awards that far exceed what the body as a whole is valued at. This lack of apportionment for prior injuries to the whole body significantly increases employer exposures for PPD awards. Another concern around this area is that the courts have started ruling that injuries to the shoulder or hip are whole body injuries and not arm or leg which would allow for apportionment.
- The use of AMA guidelines is also causing a challenge as the courts do not like just baseing PPD awarded on the AMA guides alone because they feel they are inadequate. Prior to adopting the AMA guidelines PPD in Illinois was determined by the judgement of the court.
- Professional sports teams are looking for caps on wage loss benefits for professional athletes.
- The fee schedule is one of the highest in the nation as it is based on billed charges. Employers are pushing to use a Medicare-based fee schedule which is used in most other states.
- Drug compounds – This is a loophole in the fee schedule which is being abused. Many states have passed legislation to address this issue.
- Durable Medical Equipment – This is another area where loopholes in the fee schedule are being exploited and providers are billing rental charges that far exceed the full value of the equipment.
- Electronic billing – Payers are required to accept electronic billing and to in turn make electronic payments. Medical providers are complaining that this is not happening consistently.
- Physician dispensing – This is a continued cost driver that requires additional legislation to fix. Many feel this is greatly abused. However, there is recognition that physician dispensing may make sense in some areas (first fill for example) so it is important to have fee regulation in place so that the charges are not excessive.
- Interest on delayed payment of medical bills – The medical community is pushing for a 1% interest charge for delayed payment of medical bills. A big issue would be whether there is a legitimate dispute over the charges.
- Penalties on delayed payments – Medical providers are pushing for increased penalties on delayed payments.
- Limits on Physical Therapy visits – There has been discussion about limits on physical therapy visits. Many feel this is better addressed with utilization review.