Workers’ compensation reforms that had been negotiated over the weekend now appear dead after Democrats and a handful of Republicans pushed a budget deal without broad bipartisan support, an insurance executive said Thursday.

The Illinois Chamber of Commerce had pinned its hopes for comp reforms on House Bill 4068, a Republican-sponsored measure that proposed a drug formulary, a Medicare-based fee schedule and a four-year freeze on weekly benefits.

“Nothing is ever dead in Springfield, but since 4068 is a Republican-sponsored bill, it’s probably not going to progress very far,” said Steve Schneider, Midwest region vice president for the American Insurance Association. “With respect to workers’ compensation, tempers are at such a high and the hostility is so extraordinary, I don’t think there’s any sentiment to put together a workers’ compensation compromise package today and maybe for the short-term future.

“Discussions had been ongoing about property tax reform and workers’ compensation reform, but those fell apart when the tax bill was rammed through,” said Schneider.

The House of Representatives voted Thursday to override Gov. Bruce Rauner’s vetoes of Senate Bill 6, the spending bill; SB 9, the tax increase and revenue bill; and SB 42, the budget implementation bill. The vote on SB 6 was 74-37, while the other two passed 71-42 and 71-41, respectively. The House needed 71 votes for the three-fifths majority necessary to override the vetoes.

The House was able to cast those votes even after a woman threw a mysterious white powder inside Rauner’s office on Thursday, causing emergency crews to close the Capitol.

Things are so contentious in Springfield that the early childhood foundation run by Rauner’s wife, Diana, urged lawmakers to override his budget vetoes.

“The political situation in Illinois is so dysfunctional that even Republican Gov. Bruce Rauner and his wife appear to be on different sides right now,” CNN Money reported Thursday.

Moody’s Investors Services has put Illinois’ credit rating under review again and is threatening to lower it to junk status even though the House overrode Rauner’s vetoes and passed the first budget in two years, Moody’s communications strategist Joe Mielenhausen told WorkCompCentral.

“We’re looking at Illinois’ unfunded pension liability and backlog of bills, and reviewing if those two continually deteriorating factors are addressed well enough in this budget to avoid a downgrade,” Mielenhausen said.

The state, which assumes investment returns of 7% versus Moody’s 4.5%, has pegged the unfunded pension liability at $130 billion, but Moody’s puts it at $251 billion.

The Illinois Office of Comptroller, which features a running ledger on its homepage, has the backlog of unpaid bills at $14.7 billion — 40% of the state’s operating budget.

“Our pension debts keep going up because we don’t even cover the interest costs each year. That’s the definition of bankruptcy,” said Michael Lucci, vice president of policy for the free-market think tank Illinois Policy Institute. “The state assumes 7% returns, but there are plenty of reasons to give credence to Moody’s assumptions.

“Seven percent is not responsible. It’s what actuarials call ‘Illinois math,’” Lucci said. “The 10th Amendment to the U.S. Constitution says states are sovereign and you can’t force them to go bankrupt. But the Supreme Court will have to decide whether states can voluntarily go bankrupt.”

The political blog capitolfax.com reported Thursday that Aetna Better Health, which provides Medicaid coverage for 235,000 low-income and disabled residents in Illinois, has threatened to terminate its Medicaid contracts because the state owes it nearly $700 million.

Meanwhile, insurers and the business community had pinned their hopes for workers’ compensation reform on HB 4068, sponsored by House Minority Leader Jim Durkin, R-Burr Ridge.

The American Insurance Association says the bill proposes “modest” improvements to the workers’ compensation system but it received a “very hostile hearing” in a committee of the whole House meeting two weeks ago, Schneider said.

The state Chamber of Commerce urged lawmakers to adopt HB 4068 because it moves the current charge-based medical fee schedule to one based on Medicare with multipliers varying from 125% to 300%.

Durkin filed HB 4068 on June 14. A week later, the House suspended its rules and extended a final action deadline on the measure to today.

The bill would adopt the governor’s proposed reimbursement rates:

• If the percentage for a particular current procedural terminology or diagnosis-related group code is 125% of the Medicare rate or less, it would be set at 125% of the Medicare rate.
• If the percentage is more than 125% but less than 150%, the rate would not be adjusted.
• If the rate is greater than 150% of Medicare but less than 225%, the rate would be set at the higher amount of 150%, or 85% of the most recent maximum amount allowed for that CPT or DRG code in the current fee schedule.
• If the Medicare percentage is greater than 225% but less than 428.57%, the amount would be set at 191.25% of Medicare, or 70% of the current maximum rate.
• If the percentage is greater than 428.57%, it would be set at 300%.

The chamber endorses the formulary as a tool to reduce costs and opioid addiction, as well as the bill’s new definition of a traveling employee “that will help rein in court expansion of employer liability.”

Durkin’s bill also would freeze maximum weekly benefits at $775.15 through mid-2021.