Workers' Compensation Reform

Members of the Illinois legislature have been talking about workers’ compensation (”workers’ comp”) reform for years. This spring, after the Illinois House passed a bill to abolish the entire workers’ comp system, both houses eventually agreed on some modest reforms.

First, a brief summary of the workers’ comp system is warranted. Prior to the passage of the Illinois Workers’ Compensation Act, an employee injured at work had no remedy against the employer unless the employer was negligent in some manner. To correct this situation, the Legislature created the Act which states that if an employee is injured and the injury arose out of and in the course of the employment, then the employee has a workers’ comp claim regardless of the employer’s fault. Accordingly, the Illinois Workers’ Compensation Act is characterized as remedial litigation, meaning it was passed by the Legislature to cure an existing inequity. To counterbalance these legislative enactments which no longer require a worker to prove fault, the Legislature in turn limited recovery for workers to only specified categories of benefits.

Under the Act, employees are entitled to three categories of benefits: (1) payment of all reasonable and necessary medical expenses to treat the injury; (2) payment of two-thirds (2/3) of their average weekly wage while the employee is unable to work, which is referred to as Total Temporary Disability (TTD) benefits; and (3) payment of Permanent Partial Disability (PPD) benefits based upon the schedule of benefits under the Act.

The Act is entirely statutory and, therefore, the rights of recovery are specifically established under the Act. The Act identifies specific body parts for which the Act sets a certain amount of weeks in determining any recovery for disability. In determining disability, there are two key factors: the extent of disability and the PPD rate. The PPD rate is based upon a person’s average weekly wage and is determined by calculating 60% of the average weekly wage, which cannot be below the minimum or above the maximum set by the Act.

The Act states that an employee has a right to choose two doctors to treat her for the injury. This does not preclude the employer from obtaining a medical examination independent of the treating doctors.

So, what changes were made? Two significant changes affect workers’ comp medical providers. A Medical Fee Schedule was adopted in 2005 to control the amount that doctors could charge for services provided to injured workers. (You may have noticed when you visit the doctor’s office one of the questions they ask you is “Is this a work-related injury?” That is in part because of the fee schedule.) The 2011 reforms cut the Medical Fee Schedule rates by 30%. In addition, your employer can now limit which doctors you can use if it adopts a PPO plan. Here are the new rules regarding PPO plans:

(1) if the employer has no PPO provider, the employee retains the right to choose 2 doctors;

(2) if the employer has an Illinois workers’ comp PPO plan and notifies the injured employee of the PPO plan in writing shortly after receiving the report of injury, injury treatment options are limited to the PPO plan or;

(3) if the employee declines the PPO and opts out (in writing) before treating with the PPO plan, the worker automatically loses 1 choice of doctor and then can only select one doctor outside of the network;

(4) if the employee “opts out” (in writing) after initial treatment by a PPO plan doctor, they also have only 1 choice of doctor left to go outside of network; and

(5) if the employee stays in network and uses up both choices of doctor in network, they have no doctor choices left they can only go outside of network upon a hearing at the Commission and after a finding of “improper or inadequate” medical care.

Other significant changes include (1) a cap on carpal tunnel claims of 15% of a hand; (2) a hand is now worth 190 weeks of wages instead of 205 weeks; (3) the awards for some other body parts are increased; (4) an employee whose intoxication is the proximate cause of his injury cannot recover damages; and (5) all of the arbitrators (the workers’ comp “judges”) are fired. New arbitrators will be named by the Governor. It is likely that many of the old arbitrators will be reappointed, but, of course, many will not.

by Sarah Delano Pavlik