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Workers ’ Compensation Reform The Perfect versus the Possible. Mark Denzler Vice President & Chief Operating Officer Illinois Manufacturers’ Association. History of Workers’ Compensation. Wisconsin passed the first WC law in 1911. Illinois followed suit and passed law in 1912
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Vice President & Chief Operating Officer
Illinois Manufacturers’ Association
Wisconsin passed the first WC law in 1911.
Illinois followed suit and passed law in 1912
Based on “Prussian System” developed in 1871 by Otto Von Bismark in which state-administered system is the exclusive remedy for injured workers
Costly and burdensome to employers
Tilted toward injured workers
Makes Illinois less competitive
Petitioners and Respondents
Illinois Workers’ Compensation Commissioners
Pay work-related medical bills
2. Weekly wage payments while off work
3. Settlement based on permanency of injury
Employer community offered SB 1549
(Sen. Kyle McCarter)
Failed to pass Senate – 25 votes
Medical Fee Schedule
Drugs & Alcohol
Physician Networks/Doctor Choice
Rep. Bradley and Sen. Raoul threatened “blow up” bill that passed the House and a Senate Committee.
Imposed a proximate cause standard into state statute for the first time in history
Did not get primary cause language
AMA Standards must be used by both arbitrators and doctors for first time in IL history
AMA standards used in 34 states
Exemptions for age, occupation, future earnings, and conflicting medical reports
Strengthened utilization review is applicable to all HC providers
Retrospective and prospective
HC provider participation is mandatory
Medical Fee Schedule reduced by 30 percent across the board.
Illinois will continue to have the 2nd highest MFS in the United States
Drug & alcohol presumption reversed.
Under new law, drugs and alcohol will be presumed to have caused the accident.
Wage differential payments capped at the age of 67, or 5 years, whichever is later.
Previously, wage differential payments continued for life
Employers/insurers allowed to create physician networks and negotiate rates
Injured workers limited to 2 choices – only 1 choice if they refuse to use the employer’s doctor
Cap on carpal tunnel awards at 26 weeks – today’s average is 40 weeks.
Cap on medical implants and devices
Replacement of arbitrators. New continuing education and ethics requirements.
Panels of arbitrators, rotated.
New fraud powers and penalties
Special Assistant AG for WC Fraud
Other HC providers
* Unions/Trial Lawyers were neutral
NCCI has already issued an advisory recommending an 8.8 percent cut in rates on September 1, 2011.
Does not include savings for PPO networks, UR and some other provisions
$300 million reduction for insured entities
Does not include savings for self-insured entities