General Assembly Passes WC Reform Bill

Over the course of the past year, employers and insurers in and outside of Illinois have demanded reform of Illinois ’ Workers’ Compensation Act and the Illinois Workers’ Compensation Commission. As the legislative session drew to a close on May 31, 2011, the Illinois General Assembly finally took notice of those demands (at least to some extent yet to be determined) and passed legislation that will comprehensively reform workers’ compensation in Illinois . The Governor is expected to sign the bill into law sometime this week, perhaps even today, and the changes take effect immediately upon becoming law unless noted otherwise. Whether this is the answer to the “call for reform” employers requested is yet to be seen and will likely be debated for some time to come. Some of the key highlights from the reform bill include:

  • New standards of conduct, continuing education and initial qualifications are required for Arbitrators and Commissioners, and their decisions must be based only evidence and inquiries contained within the record of the proceedings.
  • All current arbitrators will be terminated effective July 1, 2011 and subject to reappointment by the Governor with the consent of the Senate to new three-year terms (the current arbitrators will continue to perform until reappointment or until a replacement is appointed).
  • Effective January 1, 2012, the Medical Fee Schedule will undergo an overhaul, eliminating the current 29 geo-zips and creating four non-hospital fee regions and fourteen hospital fee regions throughout the State, and effective September 1, 2011 there will be a 30% reduction across the fee schedule amounts as a whole.
  • Out-of-state providers shall be reimbursed at the lesser of the amount from the fee schedule in the State in which the provider is located or the Illinois fee schedule amount for the region in which the employee resides.
  • Utilization review procedures and requirements are more stringent and well-defined, but in exchange the IWCC “shall” consider an admissible UR review “along with all other evidence” in determining reasonableness and necessity of treatment.
  • For accidents occurring on or after September 1, 2011, wage differential benefits shall be paid until the age of 67 or for 5 years, whichever is later, rather than for the employee’s life expectancy as was the case in the past.
  • Carpal tunnel syndrome PPD claims are capped at 15% loss of use of the hand (based upon 190 weeks for the full value of the hand), except when there is “clear and convincing evidence” that the award should be higher, but in no case shall it be paid at more than 30% loss of use of the hand.
  • Employers can now create a PPO program, which must first be approved by the Illinois Department of Insurance, for workers’ compensation claims and through which their employees must treat with providers in that network for injuries claimed to arise out of and in the course of the employment. (Employees can get out of the network upon proof to the IWCC that the care received by the two choices of physician within the network is inadequate.  Employees can also “opt out” of the PPO in writing , but lose one of their two choices of physician as a result.)
  • In determining PPD awards for accidents on or after September 1, 2011, the IWCC is required to consider the opinions of medical providers as to impairment ratings, which are to be based upon objective examination findings and AMA guidelines.
  • The State is starting a “pilot collective bargaining program” limited to “construction employers” only, in which those employers and the unions representing their employees can essentially create their own workers’ compensation system, preferred medical providers and alternative dispute resolution procedures to resolve disputed claims outside of or in supplement to the Illinois Workers’ Compensation Commission.
  • For accidents occurring on or after September 1, 2011, no compensation shall be payable if (i) the employee’s intoxication is the proximate cause of the employee’s accidental injury or (ii) at the time the employee incurred the accidental injury, the employee was so intoxicated that the intoxication constituted a departure from the employment.
  • Stricter fines and provisions are added for workers’ compensation fraud and failure to procure workers’ compensation insurance.
  • IWCC employee claims are to be handled outside of the IWCC.
  • As of September 1, 2011, workers’ compensation rate setting advisory organizations are to recalculate workers’ compensation advisory premium rates and assigned risk pool premium rates, and stricter and detailed reporting requirements have been created for insurers of workers’ comp in Illinois .

Please note that this is not intended to be a comprehensive review of all of the new provisions, but simply summarizes some of the key points. If you would like a more detailed explanation of the 2011 Illinois Workers’ Compensation Reform legislation, how it fell short of the true reform demanded by employers and what you might expect with these changes, please contact us, and we will be happy to provide a presentation to you and your organization regarding this.

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