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• Workers' Compensation

Summary of Workers' Compensation Legislation HB1698

The General Assembly recently passed significant Workers' Compensation reform legislation (HB1698), which the Governor signed to enact PA 97-0018. Below is a summary of the major provisions of the legislation. The Act became effective immediately upon the signature of the Governor however some provisions become effective on later dates.

Substantive Amendments

- Codifies that the Petitioner has the burden of proving by a preponderance of evidence that the injuries arose out of and in the course of employment.

-Provides that for accidents on or after 9/01/11, wage differential awards shall be effective only until the Petitioner reaches the ages of 67 or 5 years after the date of the award becomes final, whichever occurs later.

- Reduces Temporary Partial Disability benefits by using the "gross" rather than "net" amount of income earned from the light duty position.

-Allows employers to establish preferred provider programs (PPP) of medical providers approved by the Department of Insurance. The PPP only applies to cases in which the PPP was already approved and in place at the time of the injury. The employee must be notified of the program on a form promulgated by the IWCC. Employees have 2 choices of treating providers from within the employer's network. If the Commission finds that the second choice of physician within the network has not provided adequate treatment, the employee may choose a physician from outside the network. Employees may opt out of the PPP in writing at any time, but such action constitutes a choice of physicians. If an employee chooses non-emergency treatment prior to the report of an injury, that constitutes a choice of physicians.

- Rolls back the maximum award for the loss of the use of a hand to pre-2006 levels (190 weeks) rather that the current 205 weeks.

- Caps repetitive Carpal Tunnel Syndrome awards to 15% of the loss of the use of a hand unless the Petitioner proves greater disability by clear and convincing evidence, at which time the award is capped at 30% loss of the use of the hand.

- Provides that to determine PPD regarding accidents on or after 9/01/11 a physician submitting an impairment shall use the most recent AMA guidelines on impairment including objective criteria. The level of disability shall be based on that impairment report, the occupation of the Petitioner, the age of the Petitioner, the future earning capacity of the Petitioner, and evidence of disability in the treating providers' medical records. The relevance and weight of factors in addition to the impairment report shall be included in all decisions relating to PPD.

- For accidents on or after 9/01/11, precludes compensation if the employee's intoxication was the proximate cause of his injury or if the employee's level of intoxication was sufficient to constitute a departure from employment. Establishes criteria for testing and sets a presumption of causation because of intoxication at a BAC level of .08, evidence of impairment due to ingestion of cannabis or a controlled substances, or refusal to submit to a test. An employee may rebut the presumption by proving intoxication was not the proximate or sole cause of the injury by a "preponderance of admissible evidence."

- SB1147, previously sent to the Governor, precludes compensation to an employee whose injury was cause by actions resulting in a conviction for a forcible felony, aggravated driving under the influence, or reckless homicide if the crime caused the death or serious injury of another. Specifies that attorney fees and penalties shall not be awarded if an employer fails to make timely payments or terminates benefits pending conclusion of a prosecution if the employee has been charged with an offense specified above.

Medical Fee Schedule

- Reduces all current fee schedules by 30% for all treatment performed after 9/01/11, and reduces the current 76% of charge default to 35.2%.

- Effective 1/01/12, collapses the current 29 Geo zips to 14 zones for hospitals and 4 physicians and other providers. These zones are based on the boundaries of specified counties.

- Effective 1/01/12 allows the IWCC to update CPT codes and crosswalks based on most recent AMA criteria and to incorporate associated rule changes.

- Effective 1/01/12 allows the IWCC to annually include new procedures in the fee schedule based on non-Medicare relative values and conversion factors.

- Provides that medical implants shall be reimbursed at 25% over invoice price plus actual and customary shipping minus any rebates.

- Specifies that accredited Ambulatory Surgical Care facilities are reimbursed under the schedule as well as licensed Ambulatory Surgical Care Centers.

- Includes physician-dispensed medication to the fee schedule at the average wholesale price plus a dispensing fee of $4.18.

- Adds dental services to the medical fee schedule.

- Requires payers to inform providers of insufficient information in billing within 30 days and imposes a 1% monthly interest fee after 30 days rather than 60 days.

- Specifies that bills for treatment deemed to be unnecessary or excessive are subject to the prohibition against billing to the injured employees.

- Requires the Department of Insurance to establish rules for electronic billing for all medical bills by 1/01/12 which must be accepted by all employers/insurers by 6/30/12.

- Provides that out-of-state services be paid at the lesser rate of that state's medical fee schedule or the fee schedule in effect for employee's residence.

Utilization Review (UR) (applies to treatment provided on or after 9/01/11)

- Requires providers to submit to reasonable written UR requests, and to make reasonable efforts to submit timely and complete reports to support a request for certification of requested treatment.  If such reasonable efforts are not made, the charges may not be compensable or collectable.

- Requires that written notices of certification and non-certification of requested treatment, including evidence-based guidelines, shall be furnished to the provider and employee.

- Provides that an employer or its agent can only deny requested medical treatment because that the treatment is excessive or unnecessary based on a valid UR report.

- Provides that if an employer or its agent refuses to pay for services based on  a legitimiate UR review, the Petitioner has the burden of establishing that variance with the guidelines are warranted in the particular situation.

- Requires a physician performing UR to be available for deposition in this state either in person or through telephonic communication.  The cost of such depositions shall be borne by employer/insurer.

- Requires UR reports be addressed in any written decision.

Insurance Compliance

- Provides that all Employee Leasing Companies provide the IWCC names of all clients that are named under their WC insurance and copies of the certificates of insurance naming such clients.

- Allows an investigator with the insurance compliance division of the IWCC to issue citations between $500 and $2,500 against employers who are in noncompliance.  The employer must pay the fine and provide proof of insurance within 10 days of the citation.  Failure to comply with this provision would be a basis for instituting an official non-compliance action with the Commission at which time a minimum $10,000 fine may be imposed.

Fraud

- Provides that the Department of Insurance has authority to subpoena medical records pursuant to an investigation of fraud and amends the Code of Civil Procedure to specify that physicians may disclose medical records pursuant to such a subpoena.

- Eliminates the requirement that a report of fraud shall be fowarded to the alleged wrongdoer with the verified name and address of the complainant.

- Provides that all reports of fraud not forwarded for prosecution shall be destroyed after the statute of limitations has run on the reported actions.

- Specifies that intentional submission of medical bills for services not rendered constitutes WC fraud.

- Requires the fraud unit to refer any violation to the Special Prosecution Bureau of the Office of the Attorney General.

- Sets penalties for WC fraud based on the amount of money involved in the attempted fraud, from a Class A misdemeanor (less that $300) to a Class 1 felonly (more than $100,000).  Requires restitution be ordered in WC fraud cases.

- The fraud unit shall procure software to identify waste and fraud, and shall make annual reports on instances of fraud and prosecution to the General Assembly, Governor, Director of Insurance, and Chairman of the IWCC.