It seems a compromise is being reached on some revisions to the Workers' Compensation Act. The exact revisions are unknown still, but the following statement form the President of the Illinois Chamber of Commerce (who is of course pro-business) gives us an idea of what is to come...it seems that there may be no huge changes in the causation standard, with requiring Employer-directed medical care or with following of AMA or Medicare guidelines for treatment and permanency standards - all three of which were being sought by the pro-business platform. For every potential injured employee in the State of Illinois, this is welcome news today. Although the Chamber feels its businesses cannot compete with other State's, there is no question that putting the blame on the State's Workers' Compensation system and consequently on the innocent victims of injuries on the job would be a travesty. Thank you to all of the persons lobbying on the side of the injured workers, including the Trial Lawyers Association.
Stay tuned for a summary of the new revisions to the Act...
http://www.ilchamber.org/Illinois-Chamber-Of-Commerce/Main/Who-We-Are/Our-Epublications/Presidents-Messages/2011/May-4-Urgent-Alert-on-Workers-Compensation.htm
May 27, 2011
Workers’ Compensation Reform: the Perfect, the Possible and the Politics
For the last two years, the Illinois Chamber has worked hard to compel lawmakers and the governor to address the serious flaws in the state’s workers’ compensation system.
From the employer’s perspective, Illinois workers’ compensation laws are unfriendly, high-cost and generally characterized as among the worst in the nation. They hurt our business climate and our economy, and place an undue burden on businesses as well as taxpayers.
From the beginning, the Chamber’s goal has been merely to bring Illinois back into the mainstream and align its workers’ compensation system with those of most other states. The measures the business community has sought have not in any way been unique or unreasonable. We have tried to introduce the national norms into the Illinois law.
A new proposal now on the table offers to introduce important new elements to Illinois’ workers’ compensation system. In addition, Senate amendment #3 to HB1698 will save employers an estimated $500+ million in expenses, fix problems with the state’s 2005 workers’ compensation law, and make needed changes to the Illinois’ Workers’ Compensation Commission.
While it offers a better law for employers than currently exists, the proposed bill inadequately addresses three of the employers’ major goals for substantive reform – a higher causation threshold, strict American Medical Association guidelines regarding disability and strong employer-directed medical care networks.
The Illinois Chamber believes these reforms are needed to assure long-term systemic changes, manage costs, and to change the culture and administration of Illinois’ workers’ compensation system. Without them, our workers’ compensation system will remain costly and out of line with those of other states, and continue to stress our economy and our business climate.
The Chamber cannot support the amended HB1698 because it does not meet the test of truly reforming the state’s workers’ compensation laws, but we will not oppose a proposal that represents positive, incremental changes. There is no negative impact on employers. The Chamber is officially neutral on the bill.
A Challenging Environment for Business
Illinois has one of the most expensive workers’ compensation systems in the nation, according to the Workers’ Compensation Research Institute. Its workers’ compensation costs are considered the third highest of any state, trailing only those of Montana and Alaska. The state’s medical fee schedule, first implemented in 2005, is the second highest in the nation.
Multi-state, self-insured companies routinely identify Illinois as their highest cost state even when job sites, training, safety commitments and other factors are generally comparable.
Employers also believe that the Illinois Workers’ Compensation Commission and the reviewing courts are substantially biased and will almost always rule in favor of the individual, even in outrageous circumstances. Thus, the expectation of a “fair” hearing and finding within the Illinois system is largely lacking because of statute, case law and tradition at the Commission.
During the last several months a workers’ compensation scandal has arisen from the state’s handling of cases involving its own employees at the Menard Correctional Center. Two Commission arbitrators are on suspension. In response to the reporting by the Belleville News Democrat, the federal government started a criminal investigation.
The extent of the problems and the investigation continue to spread beyond the Department of Corrections and have touched the state police, the attorney general’s office, state’s central management service and the Illinois Department of Transportation, with possibly more to come.
Despite improving employment numbers in recent months, all these factors compound to give Illinois a reputation for having a bad business climate. The state has lost over a half million jobs during the past decade, and workers’ compensation costs are a genuine disincentive to locate or grow jobs in Illinois.
For too long Illinois has been an outlier. In the competitive game of establishing favorable business climates, our state has come up short, plunging to the bottom of various lists and rankings.
The General Assembly’s decision to raise the corporate income tax rate to 9.5 percent in January gives Illinois the fourth highest corporate income tax rate in the nation and sounded another alarm.
Elections have Consequences: the Politics behind WC
State government’s annual workers’ compensation expenses are in excess of $135 million and deemed to be poorly managed. The city of Chicago’s annual costs exceed $80 million. Our political leaders realize that fixing workers’ compensation problems could help resolve huge budget costs for state and local governments.
Governor Quinn, Senate President Cullerton and House Speaker Madigan have all cited workers’ compensation as a priority that needs fixing during the current legislative session.
The governor’s close election victory in 2010, however, is to a great extent attributable to support from organized labor. The Democrats control a majority of the seats in both the Illinois Senate and the Illinois House of Representatives. It is likely the Democratic control of the General Assembly will remain intact for the next decade because they will dictate the boundaries for newly created legislative districts.
The Democrats acknowledge they need to address problems with the state’s workers’ compensation laws, but their traditional election allies – labor and trial attorneys – want no changes. What the political leaders have sought to craft is a bill that makes substantial changes and reduces employers’ costs, while at the same time protecting their allies’ interests. The political leaders’ stated goal is to have the trial lawyers and organized labor declare their organizations “neutral” on the bill.
Amended HB 1698’s $500+ million in savings in WC costs will come at the expense of medical providers. But even after a 30 percent cut, the medical fee schedule used in Illinois will still remain the second highest in the nation.
The work behind the development of these changes in Illinois’ WC has been difficult and extensive. This bill represents the best employers can expect to achieve at this time and under these circumstances. It is important to recognize the democrat leadership of our state has acknowledged there are problems and have devoted time and effort to begin to address them. I would observe too that passage of this bill would be another indication the democrats have begun to make course corrections to reverse the state’s economic losses and fall from grace.
Blow It Up
Throughout the legislative session, Representative Bradley and Speaker Madigan have threatened to pass legislation that would “blow up” the state’s workers’ compensation system by repealing laws and abolishing the Workers’ Compensation Commission.
The implied threat has been that if agreements cannot be reached by affected interest groups, chaos would prevail. While such an action may appear attractive in the abstract, the consequences would force all workers’ compensation cases into the civil courts. It would overwhelm the courts and require dozens if not hundreds of new judges.
Every employer would have to scramble for new insurance coverage while the insurance companies would be trying to reassess pricing in a volatile, litigious state with a reputation for being an unfavorable judicial “hellhole.”
Workers’ compensation insurance premiums would likely escalate even higher. Many injured workers would undoubtedly suffer under the scenario of an extended period of disarray and uncertainty. Most significantly, such an action would once again send the wrong signal regarding Illinois’ ability to effectively deal with critical public policy issues.
Next Steps
Senate amendment #3 to HB 1698 was filed late last night. The official legislative process begins in the Senate today and will presumably be concluded by the time the General Assembly leaves the capitol city on Monday or Tuesday next week.
Illinois Chamber Statement on Workers’ Compensation Legislation
From Doug Whitley, President & CEO
May 27, 2011
The Illinois Chamber wishes to acknowledge the efforts of many individuals who have worked diligently for months to help craft a legislative proposal that will address many aspects of the state’s workers’ compensation system. The Illinois Chamber has dedicated the last two years to compel lawmakers and the Governor to address employers’ workers’ compensation problems.
From the employer’s perspective, Illinois’ workers’ compensation laws are unfriendly, high cost and generally characterized as among the worst in the nation. The state’s political leadership has it within its power to change the situation. To do so will reduce costs for employers, as well as taxpayers; improve the business climate; and send a positive signal that Illinois is acknowledging our problems and seeking to address them in a positive manner.
The culmination of efforts to change the state’s workers’ compensation laws has resulted in a measure that offers employers a better situation than currently exists. It introduces important new elements to the Illinois WC law but falls short of Chamber members’ view of true reform.
The Illinois Chamber cannot support the current proposal because it does not meet the test of truly reforming Illinois’s workers’ compensation laws, but we will not oppose a proposal that represents positive, incremental changes.
The measure embodied in HB1698 falls short because three of our major goals for achieving truly substantive reforms that could change the culture and administration of Illinois’ workers’ compensation system were either ignored or inadequately addressed. The Illinois Chamber cannot and will not abandon our obligation to employers to seek a higher standard for “causation,” stricter AMA guidelines and a more secure application of employer authorized medical care networks. Absent the inclusion of these changes it is our opinion that relative to other states, Illinois’ workers’ compensation system will remain high cost and out of the mainstream.
The leadership of the Illinois Chamber recognizes this measure as a positive step, but challenges the state’s political leadership to recognize the competitive business climate is an evolving process that requires continued attention for the need to change. We interpret this bill as a down payment towards achieving more comprehensive reforms.