The Illinois legislature recently amended the Workers’ Compensation Act. In what appears to be a partisan power struggle, Republicans claimed to be “shut out” of the negotiations regarding this legislation and simply walked away from the negotiating table, while Democrats scrambled to get legislation passed before summer break.
And thus, in the first week of June 2011, the legislature used HB 1698, a 20-page child adoption act, as a vehicle to legislate a 180-page amendment to the Illinois Workers’ Compensation Act, essentially rewriting major portions of it.
Among the many modifications to the act, the amended language reduces all reimbursement for workers’ compensation fee schedules by 30 percent. In an attempt to be fair to providers whose profit margins do not even approach 20 percent, let alone 30 percent, Sen. Donne E. Trotter (D), Majority Caucus Chair, offered an amendment to reduce the 30-percent reimbursement to 10 percent in the portions of the schedule that are vital to the viability of independent occupational medicine programs in Illinois. The amendment was subsequently tabled and not brought up for consideration by the legislature.
Medical charges among providers in the Peoria area, apart from emergency room treatment, are consistent for the treatment of most work-related injuries. Where costs vary significantly is in the indemnity (i.e., non-medical) costs incurred by the length of time an employee is off work due to injuries sustained on the job. This lost work time is determined by the medical provider and varies dramatically from one provider to the next.
Legislators reported that since 2006, employers’ costs in workers’ compensation have increased 38 percent. Interestingly, in 2006, medical providers endured an initial 30-percent decrease in a significant portion of the fee schedule. From 2006 to present, that fee schedule has seen only an 11-percent increase, corresponding to the consumer price index.
A study of more than 4,200 closed claims filed with Atlantic Mutual Insurance Company revealed that when compared to general practitioners, independent occupational medicine clinics realized:
- Total claim costs decreases of 52%
- Indemnity costs on lost-time injury claims reductions of 49%
- Direct medical costs declines of 29%
- Average lost-time decreases of 14%
- Legal cost reductions of 54%
- Litigation case rate reductions to 1 in 20.
If the 38-percent figure is correct, another reduction in fee schedules simply will not help. Few employers, including medical providers, can endure a cumulative 50- to 60-percent government-mandated decrease in gross revenues. If independent occupational health specialists are forced to shut their doors, who takes their place?
It is generally accepted that the Illinois Workers’ Compensation Act is less than friendly to the state’s business community. However, simply cutting rates (the other modifications are essentially minor) is tantamount to fishing off an ocean liner with a cane pole and earthworm in hopes of catching the Loch Ness Monster. Those anticipating the big catch will be left wanting. iBi
