Judicial activism is undermining legislative efforts to reform Illinois’ overly generous workers’ compensation system, says a recent report issued by the Illinois Chamber of Commerce.
The 74-page report came out on Oct. 29 and a package of new, chamber-backed workers’ compensation reform bills was introduced in the Legislature on Nov. 7.
The report cites 19 cases where judges of the appellate courts or the Illinois Supreme Court allegedly went beyond legislative intent to weaken or overturn decisions of the Illinois Workers’ Compensation Commission (called the Illinois Industrial Commission before 2005) and expand grounds for workers’ compensation awards.
Reforms enacted in 2011 were much-needed but stopped short of several fundamental changes needed for “true” reform, the report says.
The document drew an unenthusiastic response from organized labor and trial lawyers. A statement jointly released by Michael T. Carrigan, president of the Illinois AFL-CIO, and Stephen D. Phillips, president of the Illinois Trial Lawyers Association, said the report cherry-picked and misrepresented a handful of cases – less than 1 percent of cases that reached the appellate courts or the Supreme Court over the last decade. And, they said, all of those cases predated the 2011 reforms.
Carrigan and Phillips said the Chamber “conveniently ignored” a reduction of 14.5 percent or more in insurance rates and resulting savings of $315 million since the 2011 changes.
The National Council on Compensation Insurance found that the 2011 changes reduced Illinois workers’ compensation costs about 8.8 percent, less than proponents had predicted, but it advised insurance rate reductions of 3.8 percent this year and 4.5 percent next year. The council is the nation’s largest provider of analytical data on workers’ compensation.
Michael Latz, chairman of the Workers’ Compensation Commission, called the rate reductions the best evidence that the reforms are working. Latz noted that the commission resolved more than 50,000 cases and issued 3,060 written opinions in 2012, and said 19 cases over several years amounted to “a very small sample.”
In one of the 19 cases cited by the Chamber, the 2nd District Appellate Court ruled in favor of a worker injured when he shoulder-butted a vending machine to help a colleague dislodge a bag of chips. In another, the 1st District Appellate Court found that an employee assigned a company-owned truck was entitled to compensation for injured in a crash while returning home in the truck from a personal errand.
The new, Chamber-supported bills were filed in the House of Representatives by Rep. Dwight Kay, R-Glen Carbon, and state Sen. Kyle McCarter, R-Lebanon. The Senate bills have several co-sponsors.
HB 3737/SB2622 would specify that an employee engaged in job-related travel would qualify for benefits only if an injury arose out of and in the course of employment and happened while he or she was actively engaged in the duties of employment. The bill would establish a primary cause standard, defining a compensable injury as one more than 50 percent job-related and not the result of a risk or hazard unrelated to employment.
HB 3738/SB 2626 would clarify and improve the methodology for determining an injured worker’s average weekly wage.
HB 3739/SB 2623 would require that shoulder injuries be deemed arm injuries and hip injuries be deemed leg injuries. An appellate court decision last year reversed long-standing precedent, finding that a shoulder was not part of an arm and awarding permanent partial disability based on the law’s “person as a whole” provisions.
A fourth bill, HB 3740/SB 2624, combines the provisions of the other three.
McCarter called the impact of the 2011 reforms “negligible.” He said legislators must consider whether modest changes are sufficient to stop losses of investment and jobs to other states.
McCarter said the new legislation’s key provisions are those that would change the causation standard. He said one more like Missouri’s would boost investments in Illinois businesses and jobs by $3 billion.
“Do we want the equivalent of seven Scott Air Force Bases? We have to take on the trial lawyers and a few select doctors who game the system,” he said. “It’s up to politicians to have the courage to take on the special interests.”
In e-mailed remarks, Mark Denzler, vice president and CEO of the Illinois Manufacturers Association, said Illinois needs a system that protects injured workers without bankrupting companies. He said a 30 percent, across-the-board cut of the medical fee schedule in 2011 only dropped the schedule from the nation’s second-highest to third-highest.
Nevertheless, Denzler said, the 2011 reforms have been helpful. He noted the rate reductions by the National Council on Compensation Insurance.
“We made great strides with utilization review, PPO networks, capped carpal tunnel awards, set new standards and replaced arbitrators and created AMA standards for the first time in Illinois history,” he said. “One of the best changes from 2011 includes the professionalization of arbitrators and commissioners. The law eliminated the cozy relationship that existed between trial lawyers, physicians and arbitrators by creating new, three-member panels that rotate cases. It strikes at the heart of the problem we saw at Menard prison that cost the state millions of dollars.”
Denzler also stressed the need for a primary cause standard.
“The workplace should be the primary cause — not ‘a cause’ of the injury for it to be compensable,” he said.