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Springfield Report: Reform Lives!

Janurary 2017

By Francis M. Brady

In the closing days of the 2016 Legislative session, negotiations concerning Workers' Compensation have been reanimated. While there is likely not enough time to get agreement before the 2017 General Assembly is seated on Wednesday, January 11, 2017, the Governor's office, Senate, and House Democrats are all staking out positions. They all appear to be jockeying for position so it seems safe to say that Comp will be a topic of immediate concern as the new session opens.

Proposed legislation including changes to the allowable expense of care and credit for back injuries may be forthcoming from the Senate and/or Governor's office in the near future. In the meantime, this past Friday, January 6, 2017, Representative Jay Hoffman filed House Amendment #4 to Senate Bill 2901. The proposed legislation focuses on the alleged failure of the insurance industry to reduce premiums to reflect cost reductions; reclassifies shoulder and hip injuries as arm and leg conditions, respectively; allows for contribution relative to repetitive injuries; defines "arising out of"; and emphasizes the investigation of alleged fraud on the part of employers and their representatives.

More specifically, the legislation:

  • Defines excessive rates as those likely to "produce a profit that is unreasonably high for the insurance provided..."
  • Requires carriers to pre-file, at least 30 days before they become effective, information on rate changes.
  • Requires carriers rejecting the premium recommendations "of a licensed rating organization" to justify the action to the Director of the Illinois Department of Insurance (Director).
  • Authorizes an additional insured to request the Director review the reasonableness of the premium being charged and grants the power to adjust that premium. The carrier is required to provide all information the Director determines necessary to assist in such review.
  • Clarifies the concept of "arising out of" and makes clear that to be compensable, an "accident" must result from a risk "incidental" to petitioner's job (that is, connected with what an employee has to do in fulfilling his or her duties).
  • Lays out factors to be considered in assessing whether injuries sustained in travel are connected to work (for example, the employer's knowledge that petitioner had to travel, remuneration or reimbursement for expenses of travel, directing the method of travel, assisting in travel arrangements, furnishing lodging in any way and even benefiting from the employee traveling).
  • Provides a mechanism for employers to develop return-to-work programs, and to have them certified by the Commission as "bona fide" for purposes of recalculation of workers' compensation premiums by the Department of Insurance.
  • Characterizes injuries to the hip as injuries to the leg.
  • Characterizes injuries to the shoulder as injuries to the arm.
  • Carves out special treatment for "repetitive and cumulative injuries" allowing the employer adjudged liable for them to seek reimbursement from petitioner's prior employers. Petitioner will get the award immediately while thereafter, the employer paying the award can institute proceedings against other employers within one year.
  • Codifies the notion that the Commission need not have an AMA report to make an award. However, if one is submitted, the Commission must consider it in formulating the award.
  • Directs the Department of Insurance to enact rules to ensure, among other things, that healthcare providers supply "only those medical records pertaining to (the) providers' own claims that are minimally necessary under the federal Health Insurance Portability and Accountability Act from 1996."
  • Clarifies that properly submitted electronic bills remaining unpaid for 30 days shall be subject to penalties.
  • Create a rebuttable presumption of unreasonable delay where employers or carriers delay authorization of care for more than 14 days from receipt of all appropriate records and data elements unless Utilization Review is requested.
  • Addresses fraud, mandating that the Fraud and Insurance Non-Compliance Unit shall be staffed with 10 investigators charged with investigating insurance non-compliance and fraud. The changes provide that a carrier engaging in fraud (for example, false statements or misrepresenting itself to the Department of Insurance) shall be guilty of a Class A misdemeanor.
  • Requires the Commission to yearly submit a written report revealing data on self-insureds.
  • Creates a Premium Rates Task Force with 12 members comprising four legislators from the House, four from the Senate and one appointed by the Governor and one from various special interests. The Task Force shall specifically study National Council on Compensation Insurance (NCCI) recommendations regarding premium rates. The Task Force is charged with reporting its findings and recommendations to the General Assembly no later than 12/31/17.
  • Chicago Bar Association
  • Workers' Compensation Lawyers Association
  • DRI
  • The Illinois Association of Defense Trial Counsel
  • Illinois Self-Insurers' Association
  • Chicago Bar Association
  • Workers' Compensation Lawyers Association
  • DRI
  • The Illinois Association of Defense Trial Counsel
  • Illinois Self-Insurers' Association
10 South LaSalle Street, Suite 900
Chicago, IL 60603
Phone: 312-425-3131
211 Landmark Drive, Suite C2
Normal, IL 61761
Phone: 309-862-4914
1015 Locust Street, Suite 914
St. Louis, MO 63101
Phone: 314-300-0527
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