By Eugene Keefe
Keefe Campbell & Associates

In the view of the Illinois workers' compensation community, we are riding a somewhat sudden and unexpected wave of reform. Here are some thoughts on how to best proceed until this wave breaks.
 
Most observers viewed the recent statewide election results as a death knell for workers' compensation reform in this state. Due primarily to the somewhat maniacal way the Democratic party in this state has, in our view, massively mismanaged state finances, they are so deep in hock, they have to look "across the aisle" for help from the Republicans. In such a setting, it appears workers' compensation reform is now a commitment from the legislature. The problem we are now facing is how to best do reform the workers' comp system in this state.

What happened in a somewhat whirlwind approach were speedily convened legislative hearings and even more hastily drafted legislation. As fast as that happened hundreds of claimant lawyers and doctors and other vendors burned a swath up and down the state to Springfield to stall and generally put the kibosh on the proceedings for now. Veteran Illinois workers' compensation participants and observers rang out a constant refrain "use the agreed-bill process." We have two problems with the so-called "agreed-bill process." One, it is all done in secret and, two, it doesn't actually "work."

What do you mean, it is all done in secret? Well, ask anyone about the 2004 amendments to the Workers' Compensation Act. Oops, you can't find them, but we assure you there was an effort to reform the Act way back then. For a variety of reasons, including this KC&A Update, they shelved them and came back with a vengeance to later present an agreed bill that comprised the 2005 amendments to the Act. Those amendments were passed by the Illinois General Assembly in July 2005 and then November 2005.
 
Why were there two dates of passage? Well, they sort of messed up on effective dates for the first version. We couldn't correct the mistakes until we learned about them when the "closed doors" opened and the bill was in place. When we saw it, we noticed the legislative errors and published a KC&A Update about them. So maybe due to our KC&A Update and maybe due to the work of others, the legislature went back and in its wisdom, corrected their mistakes with a second bill. It would have been interesting to be at the secret meeting when someone had to quietly admit they made clandestine mistakes requiring a correction to the bill.

What also happened was an agreed workers' compensation reform bill that, for lack of a better term, stunk. Illinois labor got what it wanted; Illinois business not so much. Most agree it simply didn't do what was advertised. The parties trumpeted the bill as providing increased benefits for Illinois labor with readily defined changes to numbers like raising the compensation rates at the bottom of the workers' comp barrel, immediately increasing permanency values 7.5%, dramatically increasing amputation values and increasing the worst benefit in Illinois workers' compensation wage-loss differential claims.

On the defense side, the major change was a clunky medical fee schedule that did bring some definition to previously undefined workers' comp medical costs. The problem was in some areas, doctors and hospitals were already charging less than the new schedule and quickly raised rates what lots of folks told us is the "floor became the ceiling." Along with that development, we were stunned to see gouging in surgical implants and no controls in the fastest rising cost in U.S. medicine, pharmaceuticals. We do feel the medical fee schedule brought some savings for Illinois business; just not enough. Even with the schedule, the workers' compensation side of Illinois medicine remains dramatically out of sync with reimbursements on the group health side.

The other two supposed cost-saving facets for Illinois business were "soft" concepts which had to be implemented by the Commission to have value; utilization review and a new workers' compensation fraud provision. When the 2005 Amendments were finalized and became law, we were skeptical. We were warmly advised by defense insiders utilization review or UR would be implemented by the Commission and would be effectively mandatory with a little bit of "wiggle room." In fact, the opposite happened; UR was little-understood by the Illinois WC Commission "wise guys" and when they better understood it, they immediately castigated it in every possible direction. In the almost five years since it started, it has been used in a limited fashion by the Commission to retroactively cut wild overtreatment for chiropractors or physical therapists. That isn't truly what the concept is about. As to workers' compensation fraud, we saw the claimant bar and the Commission try to turn the concept into a workers' compensation insurance compliance function. We still consider it a scandal to see so many state's attorneys across the state have the WC fraud busters send them investigation results with unquestioned cases of fraud by workers to then have the state's attorneys claim it was a civil issue and they didn't want to get involved and/or simply wouldn't prosecute.

What remains good about the agreed-bill process is both sides have to get together and work things out. Both sides should be able to take something good from the process. For those reasons, we don't mind an agreed-bill process and think it may be a solid idea. We simply don't want it to be a secret agreed bill which the vast majority of Illinois business finds out about when it lands on them. Please also remember there can't be a secret agreed-bill process without secret "agree-ers" from both sides, Democrat and Republican. If we learn the reform process is going to happen in a closed door fashion, we aren't going to be thrilled with the secret forces from the side of Illinois business who may make mistakes similar to what happened in 2005. We have no idea who gets to come to the party and what their roles might be. We are certain the 2005 secret agreed-bill process led to negotiations with wily and veteran claimant attorneys on one side representing Illinois labor and lobbyists who weren't lawyers representing Illinois business trust us, that is what led to "hard" rules favoring labor and "soft" rules that could easily be manipulated and didn't help Illinois business.

So how do we avoid this problem? Well, we urge our fearless Illinois WC leader, Chairman Mitch Weisz to "call out the clans." Bring in the leaders from the component communities including our judiciary, lawyers on both sides, medical leaders, business reps, lobbyists, surveillance providers, nurse case managers, insurance claims handlers and brokers, reinsurers, certified vocational rehabilitation providers and anyone else to come to the Commission, send an email or however they do it, provide their best thoughts on reform. We ask Chairman Weisz to consider putting out a workers' compensation questionnaire to these various groups for input.

For our side, we are going to run a free video webinar focusing solely on Illinois workers' compensation legislative reform on Friday, Feb. 18, from noon to 1:30 pm. The goal of the webinar is to find simple paths for effective workers' compensation reform with anyone who would like to participate. Next week, we will publish an agenda and we assure you the results of this hour and one-half discussion will be sent to Chairman Weisz and the top legislators interested in the process. Registration information will be provided next week.

Eugene Keefe is a founding partner of Keefe, Campbell & Associates, a Chicago workers' compensation defense firm. This column was reprinted with his permission from the firm's client newsletter.