Illinois Workers Compensation Reforms of 2011
With the on again, off again drama of Illinois workers comp reform, many had asked exactly what reforms are they talking about?
Before the 2005 workers compensation reforms, 1) Illinois had no medical fee schedule in place for workers compensation medical care. Doctors and hospitals would generally charge what they considered to be the usual and customary rates for any given area. Those rates varied greatly. Insurance carriers would pay what they generally considered to be reasonable charges often leaving the balance of the charges subject to law suits and collection efforts against the injured worker for the balance of unpaid medical bills. 2) Injured employees were allowed the free choice to choose 2 of their own doctors for their workers comp injury care.
The 2005 Medical Fee Schedule introduced caps on medical fee payments but they paid out of state medical providers 76% of whatever they charged, they did not regulate surgical hardware markups and they did not limit the 2 choice of doctors for the injured workers. The caps on medical fees were set at 90% of the 80th percentile based on medical procedure codes and historical billing rates. So our in-state medical providers were capped on what they could receive in payment but soon after the reforms, some out of state providers started raising their rates abusively and the markup on surgical hardware was also subject to some abuse.
In this current recession, with loud demands made by Illinois business to cut the high cost of workers compensation insurance, medical payment rates to providers were again cut in the 2011 reforms by 30% from the medical fee schedule rates and PPO plans were introduced to try to limit the choice of doctor to company clinics or employer directed PPO networks with limited exceptions and rules for choosing an outside physician or provider. Out-of-state medical providers were capped on reimbursement at the lower of the Illinois fee schedule rate or that particular states own fee schedule for workers comp. Limitations on surgical hardware markups were also introduced to prevent past abuses.
The 2011 political compromise is somewhere in the middle between previous rights of injured workers and all the demands presented by Illinois business for slashing workers compensation costs. These represent the most major Illinois workers compensation reforms in decades. In the recent 2011 reforms, PPO networks that are approved by the IL Dept. of Insurance are introduced for the 1st time and the injured worker's choice of doctors is restricted to 1 choice outside of network whenever an employer participates in a PPO plan.
No, these reforms do not meet all the demands of major business groups for complete control over workers comp medical care nor radical demands for slashing workers comp rights back to the days of the company store but they do meet half way in the middle somewhere between the workers previous rights to open medical care with liberal reimbursement rates and the demands of Illinois business groups to lower workers compensation costs by introducing new PPO plans, by introducing use of the AMA Guides 6th as a reference point in setting disability awards and by cutting years payable for worker's wage differential awards for injuries resulting in reduced earnings.
Going forward, Illinois will be more "business friendly" to encourage new job growth and encourage more companies to locate here.
A new pilot program is also being set up for alternative dispute resolution (ADR) in certain construction trades approved by the Illinois Dept. of Labor that are allowed to limit their injured worker's medical rights in their respective collective bargaining agreements to a restricted list of medical providers for complete employer control over the choice of medical provider and new exceptions have been made to allow adjudicating workers comp claims through alternative dispute resolution procedures using binding arbitration, mediation or union grievance procedures. Details are still unfolding and some rules are still in formation.
This short list compiled below of new 2011 reforms is not intended as all-inclusive but it provides a quick overview of the major 2011 reforms.
Note: The reforms were signed into law by Governor Quinn on June 28,2011 although the effective start dates for key provisions vary.