Saturday, May 28, 2011

Senate approves workers' comp reforms

By Jamey Dunn

After months of negotiations among that failed powerful interest groups—and threats from lawmakers to completely dismantle the system—the Illinois Senate today passed a measure to overhaul workers’ compensation.

“It’s a good day for employees in the state of Illinois, for job seekers in the state of Illinois,” said Chicago Democratic Sen. Kwame Raoul, the sponsor of House Bill 1698.

Raoul estimates the legislation would result in $500 million to $700 million in savings for businesses in the state. He said the largest cost cutting provision would be a proposed 30 percent reduction to the fees doctors are paid for treating injured workers.

To avoid what Raoul referred to as “doctor shopping,” employees would be given a choice of doctors from a network chosen by employers and approved by the Illinois Department of Insurance. If workers wanted to pick a doctor outside of the network, they would give up their option to seek a second opinion from another out-of-network doctor. Once workers seek a diagnosis, the bill would require doctors to use American Medical Association guidelines to determine the level of impairment. Arbitrators would then take those guidelines into consideration when making decisions on workers’ compensation cases.

If the bill becomes law, all current arbitrators would be out of a job on July 1. They could reapply but would have to be confirmed by the Illinois Senate. The legislation would apply the same standards of judicial conduct to arbitrators as for Illinois Supreme Court justices and require them to take additional training. They would be appointed to three-year terms but could only spend two years working in the same location to prevent them from forming, as Raoul put it, “cozy” relationships with workers. These provisions were spurred in part by an investigation by the Belleville News-Democrat that found Menard corrections workers have been awarded more than $10 million in workers’ compensation benefits. The claims are currently being investigated by the state.

The proposal would cut off lifetime benefits at age 67 or five years after the injury, whichever comes later. It would also cap carpel tunnel benefits at 28 weeks, Raoul said the current average is 40 weeks.

While Greg Baise, president and chief operating officer of the Illinois Manufacturing Association, supports the bill, he said he cannot predict whether the changes will reduce the cost of workers’ compensation insurance for employers.

“It is an epic modernization of an archaic and flawed system. The costs will be reduced by $500 [million] or more. That’s 15 [percent] to 17 percent of the cost in the system today,” said Michael McRaith, director of the Illinois Department of Insurance.

McRaith said the proposal was not “any group’s wish list” but the product of “countless hours [of negotiation] in very warm conference rooms.”

Some Republicans criticized the bill for targeting the doctors for the largest area of savings instead of spreading the pain across other interest groups involved in the system, such as organized labor and trial lawyers. “It appears to me that we’re pitting the business community against the medical community. … I’m disappointed in the fact that we did not come up with a more well-rounded piece of legislation,” said Sen. Bill Brady, a Bloomington Republican.

Members of the medical community asked lawmakers to reduce the fees paid to doctors by 20 percent instead of 30 percent.

“If you would make the changes that we would ask, you would still legislate a workers’ compensation reform bill that would save employers more than $500 million. But the 30 percent fee reduction that’s in this bill is unreasonable an unnecessarily pits health care providers against business,” said Howard Peters, executive vice president of policy and advocacy for the Illinois Hospital Association. “Even at 20 percent, it would mean that hospitals and physicians and other providers would be leaving hundreds of million of dollars on the table.”

Raoul pointed out that a reform package backed by Republicans that failed would have reduced the fees by 30 percent as well.

Many Republican supporters of the bill characterized it as a “step in the right direction," but said more needs to be done to repair the system. They called on fellow lawmakers not to see the passage of the bill as the end of their work on the system. “Our job is not done here. This may not even be getting to first base,” Brady said.

Other members of the minority party said they did not vote for the bill because they feared that lawmakers would consider the system fixed, when in fact the legislation would not go far enough. Sen. Dan Duffy, a Lake Barrington Republican, criticized the bill for not including one of the business community’s biggest requests, a requirement that the primary cause of an injury occurred at the workplace, known as causation.

“One simple sentence would make this piece of legislation worthwhile,” Duffy said. “Sometimes not having any bill at all is better than having a bad bill.”

Raoul said the only way to bring causation into the equation would be to eliminate the system altogether and let employers and workers fight it out in court. He is the sponsor of a bill, which passed the House yesterday, that would do just that. However Raoul did not call Senate Bill 1933 for a vote before a Senate committee that approved his workers’ compensation reform bill today.

Raoul said to his bill’s detractors on the Senate floor: “For those of you all who try to minimize this by saying this is just a step in the right direction, that is absolute nonsense. That is absolute nonsense and you know it. This a major reform in the state of Illinois.”

The measure now awaits a vote in the House. Gov. Pat Quinn said yesterday that he supports the bill.

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