July 2011 Case Notes & Comments

“We’re going to be helping the employers of Illinois, the workers of Illinois, all of those who are committed to economic growth by designing a law that will help our employers of Illinois reduce their premiums for workers compensation insurance by a huge amount.”
~ Governor Pat Quinn.



On June 28, 2011, Illinois Governor Pat Quinn signed into law an overhaul of the Illinois Workers’ Compensation Act.  Leahy, Eisenberg & Fraenkel has prepared this Special Edition of Case Notes & Comments to summarize the 150 pages of changes into an easy to read format and to initiate a dialogue with our clients and friends in the insurance industry that will expand understanding and utilization of these changes. The changes are effective September 1, 2011, except where indicated below, and apply to accidents on or after that date.




•  PREFERRED PROVIDER PROGRAM - Employers may utilize a preferred provider program that is approved by the Illinois Department of Insurance.  The provider network shall include an adequate number of occupational and non-occupational providers as well as an adequate number and type of physicians to treat common injuries experienced by workers in the geographic region where the employee resides.  There are statutory exceptions when out of network care is authorized such as when the network physicians cannot provide the approved treatment or the second choice of provider in network is inadequate.  820 ILCS 305/8.1   An employee who, in writing, opts out of the preferred provider program will lose one of his/her two choices of physicians.  820 ILCS 305/8(a)(4)


•   UTILIZATION REVIEW - If the employer wishes to invoke the utilization review (UR) process, the medical provider shall provide timely and complete reports of clinical information.  An employer may only deny payment if the treatment is excessive and unnecessary in compliance with an accredited UR program.  Written notice of UR decisions shall be furnished to the provider and employee.  The Commission shall consider admissible UR reports along with all other evidence.  The employee has the burden of proof to show, by a preponderance of the evidence, that a variance from the standard of care is reasonably required to cure or relieve the effects of the injury.  The medical professional responsible for review must be available in the State for interview or deposition. 820 ILCS 305/8.7(i)


•   FEE SCHEDULE - Starting on September 1, 2011, the maximum allowable payment to any fees that are scheduled is reduced to 70% of the fee schedule amount.  Starting on January 1, 2012, the medical fee schedule amounts will be based on four regions for non-hospital services and fourteen regions for hospital services.  The reimbursement rate for unscheduled fees is 53.2% after September 1, 2011.  Implants are reimbursed at 25% above the net manufacturer’s invoice price less rebates plus reasonable shipping charges.  Reimbursements for prescriptions filled and dispensed outside of a licensed pharmacy shall not exceed the Average Wholesale Price plus a dispensing fee of $4.18.  820 ILCS 305/8.2(a-1)(a-2) and (a-3) .   Medical provider fees are limited to the lesser of actual charges or the fee schedule amount “even if a health care provider sells, transfers, or otherwise assigns an account receivable for procedures, treatments, or services.”  820 ILCS 305/8(a)


•   ELECTRONIC CLAIMS  - The Department of Insurance shall adopt rules by January 1, 2012, requiring employers and insurers to accept electronic claims for payment of medical services, and all employers shall accept electronic claims on or before June 20, 2012.  820 ILCS 305/8.2a.  All medical bills must be paid within 30 days instead of 60 days of receipt.  If the claim does not contain all required data, the employer or insurer must give notice to the provider within 30 days of receipt of the bill.  Interest of 1% per month shall accrue for non-compliance or failure to pay the proper amount, and any required interest shall be made within 30 days after payment.  820 ILCS 305/8.2(d)


•  It is unlawful to intentionally present a bill for payment of a medical service that was not provided.  Workers’ Compensation fraud shall be penalized as a misdemeanor or felony based on the dollar amount of the fraud.  820 ILCS 305/25.5(b)




 Temporary Partial Disability benefits are equal to 2/3rds the difference between the average amount the employee would be able to earn in the full performance of his/her duties in the occupation in which he/she was engaged at the time of the accident and the gross amount earned in the modified job.  820 ILCS 305/8(a)




•   AMA RATINGS - Permanent Partial Disability shall be established by physicians utilizing impairment ratings under the AMA.  The Commission is not required to adhere to the impairment ratings but will consider it along with the traditional factors. 820 ILCS 305/8.2


•   INTOXICATION - An employee shall not receive compensation if his/her intoxication (alcohol or drugs) is the proximate cause of the injury or if the intoxication constituted a departure from the employment.  Testing shall be performed by an accredited or certified testing laboratory to be admissible at trial.  If the alcohol level is 0.08% or greater or there is evidence of impairment as a result of cannabis or other drugs, then there is a rebuttable presumption that the employee was intoxicated and that the intoxication was the proximate cause of injury.  The employee may overcome the rebuttable presumption by showing that the intoxication was not the sole proximate cause or proximate cause of the injury by a preponderance of the evidence.  820 ILCS 305/11


•   WAGE DIFFERENTIAL -  awards are capped and effective only until the employee reaches the age of 67 or 5 years from the date the award becomes final, whichever is later. 820 ILCS 305/8(d)1


•   CARPAL TUNNEL - The permanent partial disability for carpal tunnel syndrome caused by repetitive or cumulative trauma shall not exceed 15% loss of use of a hand, except for cause shown by clear and convincing evidence and in which case the award shall not exceed 30% of a hand.  The hand is worth 190 weeks for these cases.  820 ILCS 305/8(e)9




Two labor organizations exclusively representing construction employers will be selected to participate in a collective bargaining pilot program whereby work injury claims will be subject to ADR in lieu of filing a claim at the Commission.  Any contractual agreements must be approved by the construction employer’s carrier, group self-insurance fund and any excess carriers.  820 ILCS 305/4b




•   ARBITRATORS/COMMISSIONERS – adherence to specific standards of conduct that pattern the Canons of the Code of Judicial Conduct.  Specifically, the hearing officers must dispose of all cases “officially and fairly, without bias or prejudice.”  820 ILCS 305/1.1


•   All Arbitrators currently serving were terminated on July 1, 2011, but will continue their duties until they are reappointed or their successors are appointed.  Arbitrators shall be appointed for three year terms, and the Chairman shall evaluate each Arbitrator’s performance for reappointment.  All new Arbitrators shall be lawyers.  The Commission shall assign no fewer than three Arbitrators to each hearing site.  Arbitrators and Commissioners are to have extensive training upon appointment including training on detecting fraud and evidence-based medical treatment.  820 ILCS 305/13,14


•   Claims by former and current employees of the Commission shall be assigned to a certified independent arbitrator not employed by the Commission designated by the Chairman.  820 ILCS 305/18.1


•   ATTORNEYS - prohibited from providing compensation or any gift (anything of value except food or refreshments not exceeding $75 per person in value on a single calendar day) to any person in exchange for the referral of a client involving a matter to be heard before the Commission.  820 ILCS 305/18     


•   EMPLOYEE LEASING COMPANY - must provide to the Commission information about any client company listed as an additional insured, informational schedule attached to the master policy, and certificates of insurance issued to client companies.  820 ILCS 305/4(a-2)


•   INSURANCE COMPLIANCE - An investigator with the Commission Insurance Compliance Division has the authority to issue a citation to any uninsured employer in an amount no less than $500 and not to exceed $2,500.  820 ILCS 350/4(d)  


•   The Director of Insurance shall direct any workers’ compensation rate setting advisory organization to recalculate advisory premium rates and assigned risk pool premium rates to incorporate the provisions of this amendatory Act and to publish set rates by September 1, 2011.  820 ILCS 305/29.1


Case Notes & Comments is intended for general information purposes and is not intended to serve as legal advice. Please feel free to contact the Leahy, Eisenberg & Fraenkel, Ltd. attorney with whom you regularly work, or Heath Sherman of our Workers’ Compensation Department aths@lefltd.com should you have further questions or if you would like us to provide your company with an educational seminar to discuss the provisions in greater detail.

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