Workers' Comp Reforms

Illinois Governor Seeks Major Changes to Reduce WC Costs

The governor’s plan includes proposals to cut medical costs, change the standard of causation and narrow the definition of “traveling workers” for comp eligibility.
By: | May 11, 2015

Saying he wants to bring workers’ comp costs “in line with other states,” Illinois Gov. Bruce Rauner has laid out plans to reform the system. The Republican outlined a sweeping plan to “make Illinois a growth state again.”

The governor’s proposed Illinois turnaround plan includes proposals to cut medical costs, change the standard of causation, allow the exclusive use of the AMA guidelines to determine permanent partial disability awards, and narrow the definition of “traveling workers” for comp eligibility.

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“According to the 2014 Oregon Workers’ Compensation Premium Rate Ranking Summary, Illinois has the seventh highest workers’ compensation costs in the country,” Rauner said in outlining his plan. “These high structural costs drive jobs to other states, including Indiana, where workers’ compensation costs are more than 50 percent less.”

The causation standard would be raised to say work is a “major contributing cause” rather than “any cause” of an injury or illness. Rauner’s plan would specify that work must be more than 50 percent responsible for the injury/illness to be covered.

“Currently, if the employment is related at all to the injury, no matter how indirectly, the employee’s injury is compensable,” the governor stated. “If a work injury aggravates a preexisting condition even slightly, the employer is 100 percent liable for the workers’ compensation claim.”

Rauner noted that 29 states have a higher causation standard than Illinois. His proposed change would make Illinois’ standard identical to that in Florida.

The use of the American Medical Association guidelines is one of five factors that workers’ comp commissioners may include to determine PPD awards in Illinois under legislation passed in 2011. Current law limits the use of only one factor.

“The AMA guidelines are more conservative in determining the awards and thus it was hoped that allowing commissioners to use these guidelines would reduce awards,” the governor said. “While complete data on the use of AMA guidelines since 2011 is not yet available, a study of 20 cases … shows a 12.24 percent reduction in awards when using the AMA guidelines.”

“If a work injury aggravates a preexisting condition even slightly, the employer is 100 percent liable for the workers’ compensation claim.” — Illinois Governor Bruce Rauner

Rauner’s plan would allow, though not mandate, the exclusive use of the AMA guidelines. It also would allow consideration of an independent medical examiner’s records in addition to those of a treating physician.

Reducing the medical reimbursement rates by 30 percent for most services would result in a 15 percent to 20 percent reduction in medical claim costs, Rauner said. His proposal comes despite a similar fee schedule cut implemented in 2011.

“Even with the 2011 reforms, workers’ compensation medical fees in Illinois are significantly larger than the median of other states,” the governor said. “Surgery costs are the most egregious fee schedule abuses with rates 300 percent to 400 percent above Medicare rates and 100 percent to 200 percent above group health.”

Rauner’s plan would reduce the fee schedule for all services except evaluation and management and physical medicine.

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“The Illinois Appellate Court has greatly expanded the scope of what constitutes a ‘traveling employee’ for purposes of workers’ compensation,” Rauner said. “For example, an employee’s injuries were found to be compensable when that employee slipped and fell on the way to work.” Rauner proposes narrowing the definition of “travel.”

In addition, Illinois Turnaround proposes changes to other programs such as unemployment insurance, the judicial climate, and employee empowerment zones. Rauner said he would support increasing Illinois’ minimum wage if reforms were made to the other systems.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]