Illinois enacted workers’ comp (WC) "reforms" in 2011, but let's be honest and call them drops in a pond. The medical fee schedule was cut by 30 percent on September 1, 2011, bringing the average reimbursement for medical providers in a primary-care setting below Medicare levels, while reimbursement for other medical services outside the primary codes are still paying as much as 400 percent of Medicare levels. In WC, medical providers do not receive copayments or deductibles from patients or anyone else—only what the fee schedule dictates. As an employer, you should be asking, "Have I seen a reduction in my WC premiums approaching 30 percent?”
At the eighth annual Workers' Compensation Conference hosted by the Illinois Chamber of Commerce, the differences in WC between Illinois and Indiana were a broad topic. I'd like to touch on a few of those differences and their possible impact in Illinois:
- Directed care. No, not the “PPP” networks where the employee can still "opt out" of the network to seek care by their personal physician or surgeon, but true employer direction like in Indiana, with the employer directing the options, beginning with an occupational health specialist who understands the nuances of treating WC injuries. One legislator asked, “If employers aren't using the PPP networks, how can the legislature go to the negotiating table with labor unions to try and get direction of care passed?” Well, if you give us an ineffective or inadequate tool (PPP networks) where in many cases the risks outweigh the gains and tell us to use it anyway, what outcome can be expected? The reality is the only negotiating criteria for PPP administrators are for the medical providers to agree to discounts that pay them below Medicare, with no consideration for quality of care.
- Permanent partial disability awards based solely on AMA impairment ratings. Illinois’ permanent partial disability (PPD) awards and settlements are based on a combination of five factors; the AMA impairment rating is now the fifth factor. (Section 8.1b: iwcc.il.gov/act080811.pdf) Any injury sustained since September 1, 2011, should have an AMA impairment rating tied to it when it goes before an arbitrator to determine the PPD award. Without it, the arbitrator can only use the other four criteria to establish the PPD. The AMA rating is the only factor that is individually objective, determining whether the worker has any loss of function, range of motion, strength, tissue atrophy, etc. If the answers are no, the AMA rating is a zero-percent whole person impairment. However, in the current system, the claimant can still end up with an overall percentage of loss as high as 20 percent or even more, depending on the arbitrator.
- Bringing the medical fee schedule to a reasonable level for primary care providers. On September 1, 2011, the medical fee schedule for primary care providers was taken to below Medicare levels. In July 2014, those codes below Medicare were finally raised to Medicare levels. However, in that same month, Indiana enacted its first WC fee schedule at 200 percent of Medicare. It was presented that while Illinois ranks as the seventh most expensive state for workers’ comp, Indiana, despite charging 200 percent of Medicare, ranked 49th. Other Illinois neighbors who have some form of directed care ranked as follows: Wisconsin, 23rd (no fee schedule); Iowa, 24th (no fee schedule); Missouri, 21st (no fee schedule); and Kentucky, 40th (with care codes paying 143 percent of Illinois).
The silver bullet to kill the big bad work comp wolf in this state is directed care—not strengthened causation standards without directed care, as the legislature would suggest. One thing lost in the discussion is that all other forms of healthcare in this state, besides workers’ comp, are already directed through PPO and HMO networks. Directed care leads to more efficient use of healthcare dollars, which in turn leads to real cost savings for the businesses of the state. iBi