May Edition 2012
General Assembly Enters Session Stretch
There is much left to be decided by the General Assembly as it enters the final two weeks of the scheduled spring session. Although the legislature sent to Gov. Quinn a measure to eliminate free healthcare for state retirees, negotiations continue on other pension funding and Medicaid spending issues. There is an outside possibility that session could go into overtime. If that should occur, it likely will be a long summer.
Medicaid Cost Shifting is NOT Cutting Costs or Improving Care
Of particular concern is a Quinn Administration proposal that shifts nearly $500 million in Medicaid costs onto private employer plans. One way to reduce Medicaid costs is simply to pass them onto other payers. The Quinn idea is to mandate private insurance coverage for children with complex medical needs through the current law requiring minimum services and coverage for autism. The Governor’s Office claims this move will save the state’s Medicaid program approximately $250 million; however, this means that employers- particularly small employers whose plans reimburse at a higher rate– will be forced to absorb upwards of $350 million in additional costs in their health benefit plans. When coupled with the possible 8% rate reduction to providers, this translates into more than a $500 million TAX on the business community.
We support a number of ways to address the growing cost of Medicaid upon state taxpayers, such as:
- Moving the program dramatically beyond a fee-for-service program to a program that relies on risk-based care coordination, including the implementation of mandatory managed care. Illinois severely lags other states in its financing and delivery of services with numerous other states offering effective models of change while avoiding loss of federal matching funds.
- Outsourcing eligibility determinations, which eliminates administrative resource strain and allows a more effective avenue for actively ensuring that only those beneficiaries qualified for Medicaid are enrolled.
- Increasing the ability of the eligibility system to identify beneficiary qualification for other assistance programs, such as veterans’ benefits.
- Imposing stronger utilization controls, including co-payments for non-emergency ED visits, medication adherence, and incentives for chronic condition management.
- Providing for independent utilization analysis, claims data transparency, more aggressive use of subrogation to identify third-party liability, and dramatically strengthening HFS’ current Inspector General role by creating an independent office.
Attorney General Madigan Calls For WC Reforms
Illinois Attorney General Lisa Madigan has stepped up to the plate regarding the deplorable state of affairs in Illinois’ workers’ compensation system. She recently called upon the legislative leaders to address problems with the system that her office identifies in a 20 plus page report.
The Attorney General had made public comments in the past calling for additional reforms, but this report is the first time her office has detailed its opinion of the changes needed. In addition to changing the causation standard, the AG report calls for changes such as improved notice of injury, credits for previous awards for the same body part, and lower caps for both carpal and carpal tunnel claims.
The report can be divided into two parts: recommendations specifically to address improving the state’s handling of injured state employees and reducing the cost of workers’ compensation on taxpayers; and, recommendations that will improve the system for all employers in Illinois as well as the state, providing additional savings to taxpayers and employers.
The Illinois Auditor General’s office also has thrown its weight behind the idea of reform, revealing that between 2007 and 2010, Illinois paid out $295 million on the advice of claims adjusters with caseloads up to six times the industry standard, without employing any method for detecting fraud from the statistical data. The report can be found here.
In general, the recommendations line up with issues that the Illinois Chamber has argued for as being needed for reform and includes consideration of the primary cause initiative SB 2521, sponsored by Sen. Kyle McCarter (R-Lebanon) and Senator Christine Johnson (R-Sycamore). The bill amends the Workers’ Compensation Act to provide that “injury” includes the aggravation of a pre-existing condition by an accident arising out of and in the course of the employment, but only for so long as the aggravation of the pre-existing condition continues to be the major contributing cause of the disability. SB 2521 provides that an injury resulting directly or indirectly from idiopathic causes is not compensable. In addition, the bill eliminates an employee’s ability to choose in writing to decline their employer’s preferred provider program. Finally, the measure revises the AMA provisions in the determination of the level of permanent partial disability. In addition, the report specifically suggests adopting a primary cause standard for repetitive trauma claims.
The report also recommends tackling the recent Appellate Court decision (Will County Forest Preserve v. IWCC) that is addressed in HB 6145 introduced by Rep. Dwight Kay (R-Edwardsville). Rep. Kay’s bill clarifies that in computing the compensation to be paid to an employee who, before the accident for which the employee claims compensation, had previously sustained an injury resulting in the payment of compensation for a percentage of partial disability, that percentage of partial disability shall be deducted from any award made for a subsequent injury to the same portion of the body as was involved in the prior injury for which compensation was paid; however, nothing in those provisions permits cumulative awards for compensation for partial disability to exceed 500 weeks, which shall constitute complete loss of use of the body as a whole. The measure also clarifies that, for purposes of computing compensation in nonfatal cases, injuries to the shoulder shall be considered to be injuries to part of the arm and injuries to the hip shall be considered to be injuries to part of the leg and also provides that those amendatory changes are declarative of existing law and are not new enactments.
Department of Insurance Files Proposed Workers’ Compensation Preferred Provider Program Rules
On April 27th the Illinois Department of Insurance (DOI) filed its proposed rules to implement the preferred provider program that were an important part of the workers’ compensation changes approved last year. The long awaited rule has a 45 day comment period to DOI (deadline: June 11th for comments). A second 45 to 90 days is required for review by the Joint Committee on Administrative Rules (JCAR). Following JCAR review, JCAR can allow the rule to proceed as proposed; recommend revisions or prohibit the rule from being adopted. A prohibition motion requires 3/5ths vote (8 of the 12 JCAR members).
During a recent conference call of the Council’s Workers Compensation Committee several ongoing concerns were identified still as issues with the proposed PPP rule. For example, group healthcare concepts are being applied that are unworkable and problematic for medical care under workers’ compensation. The Committee decided to reestablish our PPP Subcommittee to review the rule and draft comments to JCAR. The full Committee will review the comments prior to submission at the Committee’s next meeting set for the Illinois Chamber’s office in Chicago.
Employment Law & Litigation Committee Meets with IDOL
The Illinois Chamber Employment Law Council Employment Law & Litigation Committee met with Illinois Department of Labor (IDOL) Director Joe Costigan and IDOL Chief Legal Counsel Ron Willis at the law offices of Faegre Baker Daniels in Chicago. The Director and Mr. Willis discussed several areas of interest with the Committee including:
- IDOL and USDOL efforts regarding misclassification of workers as independent contractors;
- Q & A format on IDOL website on key issues to employers;
- Suggestion of posting wage payment & collection decisions on the Department’s website;
- IDOL regulations; and
- Prevailing wage enforcement.
The next meeting of the Committee will be September 13th and hosted by the law firm SmithAmundsen.
Status of Employment Law Legislation
Social Networking Limits: HB 3782, sponsored by Rep. LaShawn Ford (D-Chicago)and Sen. Christine Radogno (R-Lemont), passed the House and is on the Senate floor for consideration. Our amendment was added to the legislation prior to its approval by the House. We are now NEUTRAL on the legislation.
Equal Pay Act Individual Liability: SB 2847, sponsored by Sen. Heather Steans and Rep. Robyn Gabel (D-Evanston) was been approved by both Houses and will go to the Governor. As amended, individual liability under the Equal Pay Act occurs when the employer knowingly and willfully evades the payment of a final award or final judgment under the Act. We are NUETRAL.
Employment Discrimination: HB 3915, sponsored by Rep. Elizabeth Hernandez (D-Cicero) and Sen. Iris Martinez (D-Chicago), changes the term “handicapped” to “disability”. The bill has passed both chambers. We are NUETRAL.
SB 3287, sponsored by Sen. Tony Munoz (D-Chicago) and Rep. Elaine Nekritz (D-Northbrook), creates the Illinois Service Member Civil Relief Act which provides certain legal protections afforded to service members (and family members where specified) are subject to stated provisions of law. Amends the Illinois Administrative Procedure Act to set forth a provision concerning stays of contested case hearings for service members. Amends the Civil Administrative Code of Illinois to set forth a provision concerning deadline extensions for service members. Amends the Department of Central Management Services Law of the Civil Administrative Code of Illinois to make changes to the provision concerning bulk long distance telephone services for military personnel in military service (now on active duty). Amends the Military Code of Illinois, Illinois Municipal Code, Illinois Insurance Code, Public Utilities Act, Service Member’s Employment Tenure Act, Code of Civil Procedure, Landlord and Tenant Act, Uniform Commercial Code, Interest Act, Retail Installment Sales Act, Military Personnel Cellular Phone Contract Termination Act, and Motor Vehicle Leasing Act to make changes in certain provisions concerning military personnel. Amends the Illinois Human Rights Act to provide that a violation of specified provisions regarding legal protections for military personnel constitutes a civil rights violation under the Illinois Human Rights Act. The measure awaits a final vote in the House. We are NUETRAL.
SB 3677, sponsored by Sen. William Delgado (D-Chicago) and Rep. Hernandez, amends the Illinois Human Rights Act concerning preliminary investigations by the Attorney General before the initiation of civil actions in circuit court. If a person fails to comply with a subpoena or if satisfactory copying or reproduction of any material requested in an investigation cannot be done and the person refuses to surrender the material, the Attorney General may file a petition for a court order for the enforcement of the subpoena or other request. Contains provisions regarding: venue; petitions to modify or set aside a subpoena; hearings; orders; and enforcement. Deletes language providing that if a person fails or refuses to file a statement or report or obey a subpoena, the Attorney General is deemed to have met the requirement of conducting a preliminary investigation and may commence a civil action to enforce the provisions of the Act. This measure also awaits further action on the House floor. We are NUETRAL.
Prevailing Wage Act: SB 2643, sponsored by Sen. Mike Noland (D-Elgin) and Rep. Camille Lilly (D-Chicago), is an initiative of the Painters Union. It passed the Senate on a 32-18. SB 2643 requires local government units to apply the “responsible bidder” requirements of the Illinois Procurement Code. The problematic requirement is the participation in a USDOL approved apprentice and training program Bids must include the total number of straight-time hours, identified as either “journeyperson” or “apprentice”, for each craft or type of worker or mechanic needed to execute the contract. Intense lobbying from both sides will cause this issue to have a close vote prior to the third reading deadline. We OPPOSE.
SB 3210, sponsored by Sen. Dave Koehler (D-E. Peoria) failed to receive the necessary votes to pass the Senate and was put on the order of consideration postponed which allows another vote to be taken. The bill expanded the Prevailing Wage Act to projects using funds from the sale of certain property that is subject to a leaseback. It would apply for the initial construction of the improvements in certain Illinois communities and requires all bidders for those projects to comply with the Illinois Procurement Code and use a project labor agreement. The bill initially failed on a first Senate vote, but has been amended and has a better chance for passage. We OPPOSE.
SB 3695, sponsored by Sen. Mike Frerichs (D-Champaign) requires contractors to include in record keeping the gross and net wage, hourly overtime rate, fringe benefit rates, and non-union contractors to identify the sponsor and administrator of fringe benefit plans. Although the bill was not called for a Senate vote, we expect a vote in the Senate later this week. We OPPOSE.
Upcoming Council Meetings
Employment Law & Litigation Committee:
September 13, 2012
Host: SmithAmundsen Law Offices, Chicago
1:30 – 3:30 pm
Chicago
Workers’ Compensation Committee:
June 7, 2012
Illinois Chamber Conference room 22nd Floor, Chicago
HB 1698, One Year Later
2 pm – 4:30 pm
September 5, 2012
Location: Rail Golf Course, Springfield
10 am – noon
Annual Chamber PAC Golf Outing starts at noon
December 12, 2012
Host: Liberty Mutual Insurance, Chicago
3:00 p.m. – 5:00 p.m
Annual Meeting with IWCC Commissioners
