Illinois: Comp reform doesn't go far enough, business advocates say

Illinois' workers' comp premiums are among the highest in the nation. In fact, the most recent Oregon Workers' Compensation Premium Rate Ranking puts the state third highest behind Montana and Alaska.

The high workers' comp rates coupled with a recently imposed tax hike make the state a tough sell for businesses to locate -- or stay in, say business proponents. They're looking to state lawmakers to strengthen and adopt reforms proposed by the governor despite protests by medical providers.

Gov. Pat Quinn recently unveiled his proposed workers' comp reforms. Included is a 30 percent reduction in Illinois' medical fee schedule, an idea that is not sitting well with medical providers.

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"Any proposal for a 30 percent payment reduction for injured workers' medical care is unacceptable," said Dr. Steven M. Malkin, president of the Illinois State Medical Society. "Illinois physicians strongly oppose such arbitrary slashing of the workers' compensation fee schedule under the guise of reform. The proposed cut is excessive and unwarranted."

But business proponents say the idea is more than fair to medical providers. "Illinois' fee schedule is incredibly rewarding to providers," said attorney Richard Lenkov, a partner in Bryce Downey & Lenkov in Chicago. "It's one of the most generous in the country."

Gov. Quinn said even with the cut the state would still have the second-highest medical reimbursement rates in the nation, "Our employers could save up to $500 million -- as much as 14.9 percent in premiums," he said.

Other elements in the governor's plan would:

Require that arbitrators be licensed attorneys.
Mandate that personal claims made by arbitrators and commission employees be heard by the Illinois Court of Claims rather than arbitrators with the Illinois Workers' Compensation Commission.
Put greater scrutiny on claims made by intoxicated employees and deny claims when the intoxication caused an employee's own injury.

The release of the proposal coincided roughly with Caterpillar Inc., one of the state's largest employers, sending a letter expressing dissatisfaction with the business climate, including the workers' comp system. There have been suggestions the company may consider leaving the state if things don't change.

Business advocates say the governor's plan is a good start but doesn't go far enough. They say what is needed is a provision that strengthens causation.

"What needs to happen is that the reforms are amended so the claimant has to prove work was a substantial factor in causing the disability," Lenkov said. "Right now, the standard is very, very low."

Changing the statute to require that the workplace accident or condition resulting from employment was a "significant" or "primary" factor that caused the disability rather than a "possible" factor would bring Illinois in line with many other states, Lenkov said. "Illinois is one of the most liberal states anywhere."

But getting the causation issue into the reform plan may be difficult, given that the Quinn administration is not backing it at this point, nor is the Democratically controlled Legislature.

In unveiling his proposals, the governor called on the Legislature to pass his plan by mid-April.

Read more at the WorkersComp Forum homepage.

April 18, 2011

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