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Title: Senate Bill 12 - Proposed Workers' Compensation Reform

As part of the "grand compromise" between the Illinois Republicans and Democrats, the Illinois State Senate has introduced Senate Bill 12, which proposes various changes to the Illinois Workers' Compensation Act. By way of background, the State of Illinois has been without an approved budget for over a year and a half. Since 2015, Governor Rauner has refused to agree to any budget unless there were also changes to various state law, including workers' compensation. The situation is reaching crisis proportions, with the Illinois Attorney General most recently moving to suspend any further pay to any state worker. As such, Senate Bill 12 offers proposed reform to the Illinois Workers' Compensation Act to satisfy, in part, the requirements set forth by Governor Rauner to earn his agreement to approve a state budget.

A copy of the full legislative text can be reviewed here

What follows is a summary of substantive changes proposed:

· The Illinois Freedom of Information Act is amended to exclude an exemption for any documents related to workers' compensation fraud investigations and workers' compensation aggregate insurance information and data.

· The Illinois Criminal Code codifies the fraud provisions that are now currently only in the Workers' Compensation Act in an attempt to encourage more prosecution of claims referred to State's Attorney offices.

· Section 1(e) is added, which codifies the definition of a traveling employee and the standard for which accidents involving traveling employees are compensable. A traveling employee is one who has to travel away from a fixed location as part of his or her job duties. An accident arises out employment when the employer reasonably foresees the activity in which the employee was engaged in at the time of injury. Injuries that occur during a personal deviation are not considered compensable.

· Section 1(f) is added, codifying the neutral risk standard in determining what constitutes a compensable accident. This is known to most of us as the "risk greater than that to the general public." If passed, it will amend the statute to state that an accident arising out of a neutral risk is only compensable when the risk is either qualitatively or quantitatively greater than that to which the general public is exposed.

· Section 1(g) is added to codify the causation standard for a compensable accident. There is no change to the current causation standard, meaning that the accident will still only need to be a cause instead of a primary or prevailing cause. The statute also states that an accident continues to be compensable and benefits continue to be paid as long as the condition would not have occurred but for the injury. However, an intervening accident can cut off the chain of causation, and a claimant will not be entitled to an increase in benefits if his or her condition worsens due to the claimant's own negligent or willful actions.

· Section 8 is amended to increase the waiting period for TTD from three to five days.

· The Act is amended to cap the maximum PPD rate to $755.22 through June 30, 2021.

· Section 8(d)(1) is amended for professional athletes only. If passed, the statute would be amended so that professional athletes are only entitled to wage differential benefits until age 35 or five years after the date of their injury, whichever is longer. This period of time may be shortened or enlarged upon a successful showing that the claimant's athletic career would have been shorter or longer. Wage differential benefits for everyone else continue to cease at age 67 or 5 years after an award becomes final.

· Both the shoulder and the hip are codified as part of the arm and leg respectively for PPD as opposed to being part of the person as a whole.

· New amendments to Section 8(d)(2) would allow a credit for prior injuries to the same area of the spine. "Same area of spine" is being defined as either C1-T12 (cervical and thoracic spine) or L1-S5 (lumbar spine and sacrum).

· The statute is clarified to codify what has been the evolution of these impairment ratings. Specifically, the statute would read that impairment ratings must be considered by the arbitrator but they are not required to be obtained by any party or admitted at trial.

· There are also further changes to allowable fees under the Fee Schedule for various services.

· The Commission will be charged with creating a drug formulary list, and employers will only be liable for medications and dosages on the list. However, there is an appeal process for medications and dosages not on the list, which is the same as the appeal process for UR decisions under Section 8.7 of the Act.

· Electronic billing is changed to allow medical providers 15 days to submit the records necessary to support payment of a bill and encourages providers to submit only those records minimally necessary and related to the condition. The 1% interest penalty still applies, but it must be entered by the Commission as opposed to just charged by the physicians. New fines are also introduced for any entity who does not comply with electronic claims acceptance, consisting of $1,000.00 per violation but capped at a $10,000.00 per year.

· Section 8.7 is revised to limit the number of physical therapy, occupational therapy, or chiropractic visits to 24 visits per claim for injuries after January 1, 2018. If there are more than the 24 allowable visits, the employer can petition the Commission to see if the additional treatment was warranted and will not be subject to penalties if a bonafide petition is filed. However, this limitation will not apply to post-surgical rehabilitation.

· Section 14 is amended so that the chairperson of the Commission has discretion to assign and reassign Arbitrators to various hearing sites instead of requiring a random rotation every two years.

· There is also the establishment of the Workers' Compensation edit, alignment, and reform Commission, which will consist of State Senators and appointments of individuals at their discretion to re-write the Workers' Compensation Act to make it easier to understand, and thus more "user friendly," to employers, claimants, attorneys, and the Courts.

· Section 19 is amended to allow remote attendance at status calls by attorneys and the parties.

· The State of Illinois will not be required to pay bond in order to perfect an appeal to the Circuit Court under Section 19(f).

· A proposed amendment would revive 19(k) penalties (50% of the award) for delay in an authorization of medical treatment. This overturns the Hollywood Casino case, which found that, as a matter of principle, 50% penalties could not be awarded in cases involving delay in authorization of treatment since there was no monetary award from which to calculate the penalty.

· Section 25 is amended so that reports and investigations of fraud are kept confidential and protected from FOIA disclosure. Additionally, there can be no fraud against the State of Illinois and its agencies unless it was done in bad faith with the intent to injure a person.

· Finally, the Department of Insurance will create a new self-insurance report regarding certain aspects of payments made by entities who are self-insured in the State of Illinois.

The Bill continues to be discussed and considered by the State Legislature. If any developments arise regarding it passage and implementation, we will post additional updates. In the meantime, we welcome any readers to contact one of our workers' compensation attorneys if you have additional questions or need assistance with an Illinois Workers' Compensation matter.

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