By Arik D. Hetue

Synopsis: Does chaos reignwhen exactly do you have to pay weekly permanency on Illinois amputation loss claims?
 
Editor’s comment: We were recently informed of what appears to be an unheralded shift in policy at the Commission concerning payment on statutory loss claims. Where the 1996 ruling in Modern Drop Forge Corp. v. Industrial Commission previously held Illinois employers/insurance carriers must institute payment of weekly permanent partial disability after claimant reaches maximum medical improvement and the end of temporary total disability, a couple of recent cases make it clear there is now a potential for penalties/fees when weekly PPD payment is not “immediate” upon stabilization in the post-injury setting. Yes, the word “immediate” concerns us.
 
As you can imagine, it’s a routine question we are faced with as workers' compensation defense attorneys: “If Peter Petitioner cut off his small finger and half of his ring finger in an industrial accident, when do I have to start to pay the statutory PPD loss?” Up until earlier this year, we were operating under the holding outlined above, and advising our clients who were dealing with amputation losses:
 
    •    Medical care was to be provided;
    •    TTD was to be paid during recovery;
    •    Once petitioner was at MMI and TTD discontinued, the weekly PPD checks should start to issue for the statutory loss.
 
Turns out that is not a correct statement of how they are interpreting Illinois law at the Workers' Compensation Commission and reviewing courts these days. We have to admit to our readers and clients we were arguably wrong to the extent we were following the “plain English language” version of the Act. Please read this article carefully and implement it in all your Illinois amputation claims. Please don’t hesitate to contact us about it at any time.
 
Along with concerns about when to start paying such claims, we also caution everyone there is a very high PPD minimum and maximum in Illinois for amputation losses. The current minimum is $466.13. You don’t hit the amputation minimum until claimant makes more than $776.88 per week or a little over $40,000 per year—anyone who makes less and suffers an amputation will receive the minimum weekly amount.
 
The maximum amputation rate is 60% of the average weekly wage to the TTD and not PPD maximum. The current Illinois TTD maximum is $1,243.00 per week. Someone who makes $2,017.67 or more per week will receive PPD due to an amputation loss at that rate $1,243.00 per week. The amputation value for 100% LOU of one arm for such an individual in Illinois pays a whopping $314,479.00.
 
We also caution these “mega-rates” currently apply only to the body member values for the amputated member—we have not seen the Commission or reviewing courts apply the much higher rates if claimant suffers an amputation and also injures other body parts. For example, if a worker making $200 per week loses the right little finger and also breaks his left arm, you would owe the amputation rate of $466.13 for the right little finger but would owe PPD for the left arm at $200. Due to the disparity in rates, veteran claims handlers will advise an amputated little finger can be more valuable to the claimant than a badly broken arm.
 
We also had one observer advise defining an “amputation” loss is sometimes difficult to do, particularly in the realm of modern science. It is our view an amputation occurs when there is bone loss only—you need to check x-rays to confirm there actually is bone loss versus all other possible tissues of the human body. We have never heard of any other type of “amputation” being given the special treatment it is given in this state.

Going on the presumption “amputation” means bone loss, questions still arise:
 
    •    Is it an amputation loss if the finger/toe or other member is surgically reattached?
    •    Is it an amputation loss if the middle section of a bone is removed/trimmed and grows back?
    •    If the surgeon can graft bone back into the arm or leg to get it to regrow and recover, it is still an amputation?
    •    Is a total knee or hip replacement an “amputation” of the leg?
 
We have no idea what the Commission would do with such questions and will report to you if we get a definitive answer now or in the future. We hope there is no penalty and fee exposure until such questions are clearly answered.
 
Understanding how the Commission and reviewing courts are now ruling in amputation losses
 
Going back to “when to pay” weekly amputation benefits, we point out Section 8(e) of the Act specifically states a Petitioner will first receive medical care under Section 8(a). At the same time, they should receive TTD under Section 8(b). Our “plain English version” of the Act then says they “shall receive in addition thereto compensation for a further period for the specific loss herein mentioned.” Our interpretation of that legislative statement, specifically the phrase “for a further period” necessarily means the duty to pay weekly PPD should not begin until “the further period” after weekly TTD ends. Well, as we have told our readers and law students over and over, there is no legislative history to the Illinois WC Act and the administrators and courts sometimes create the rules as they go along. Whether you agree with them or not, you have to follow them, in this instance to avoid penalties and fees.
 
We recently ran across a pair of IWCC cases which state differently – Bobby D. Kinnaird, Jr. v. Greene Welding & Hardware, decided by the Commission in July 2008 and Lary Nobile v. Midwest Wrecking Co., decided by the Commission in July 2009. According to these two cases, payment of weekly PPD for an amputation is due “immediately” upon the worker suffering the amputation, MMI or no, when no dispute exists as to the compensability of the accident or the amputation itself. There is no waiting period or other possible delay contemplated—if you read the cases, they mean you owe benefits the day of injury until the full statutory amount is paid in full.
 
Modern Drop Forge Corp. v. Industrial Commission was the old standard we judged this issue by, but it is not directly on point – there the issue was Petitioner’s potential wage differential claim, Respondent argued since it did not know what remedy Petitioner would select, it had a reasonable delay in starting payment. The court in Modern Drop Forge ruled the delay was not reasonable as the statutory loss could have been applied as a credit on any wage loss settlement or award. Penalties/fees were applied in that case because Respondent waited three years to offer any payment.
 
Since Section 8(e) of the Act specifically states a Petitioner will receive TTD and then “shall receive in addition thereto compensation for a further period for the specific loss herein mentioned” – our interpretation of that statement, specifically the phrase “for a further period” necessarily meant PPD did not begin until TTD ends. As such, combined with our interpretation of Modern Drop Forge, exposure for penalties/fees in an amputation loss would begin to run the minute a claimant was at MMI from a work injury, as that is when PPD should begin. We are no longer providing such advice.
 
In Kinnaird, Respondent, similar to what we have outlined herein, did not pay the PPD portion until Petitioner was at MMI, even though Petitioner had returned to light duty work for some time. The Kinnaird decision goes so far as to state “Respondent's argument that Petitioner had not reached maximum medical improvement, and, consequently, payment was not yet due, is without merit. There are no cases cited in support of such an argument and such requirement is not found within the language of the Act to indicate such a legislative intent. Respondent provided no acceptable explanation to show any reasonable belief to justify the delay in payment for this statutory loss injury.”  In Nobile, the Respondent argued since it was undetermined whether Petitioner lost 50% or 100% of the finger, penalties should not have applied on the late payment. There, the Commission cited Kinnaird and held penalties applicable to the 50% of the finger not at issue.
 
After our review, it is our reasoned legal opinion you should start paying weekly amputation at the correct amputation rate as soon as you have confirmed there is an amputation loss in a compensable event. Such payments should begin essentially on the day of the injury if you want to be sure to avoid penalties/fees. We hope a reasonable period of time would be provided to the claims handler beyond the day of injury, say for up to a month, in order to set up a file and issue the first check for whatever had accrued. We do note existing IWCC case law states 60 days to start such weekly payments is too long, and you may get hit with penalties and fees if you wait that long. As is the case in any litigation – if you are disputing the loss, please consult with defense counsel and document your files accordingly. In amputation losses, you need to have clear, convincing and reliable evidence to avoid the additional exposures that come with serious and unquestioned injuries.

Arik D. Hetue is an attorney for Keefe Campbell & Associates in Chicago. This column was reprinted with permission from the law firm's blog, http://www.keefe-law.com/blog