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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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workers compensation reform the perfect versus the possible

Workers’ Compensation ReformThe Perfect versus the Possible

Mark Denzler

Vice President & Chief Operating Officer

Illinois Manufacturers’ Association

history of workers compensation

History of Workers’ Compensation

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

current wc system

Current WC System

Costly and burdensome to employers

Tilted toward injured workers

Makes Illinois less competitive

current wc system1

Current WC System

Petitioners and Respondents

Arbitrators (judges)

Illinois Workers’ Compensation Commissioners

current wc system2

Current WC System

Pay work-related medical bills

2. Weekly wage payments while off work

3. Settlement based on permanency of injury

2011 workers comp legislation

2011 Workers’ Comp Legislation

Employer community offered SB 1549

(Sen. Kyle McCarter)

Failed to pass Senate – 25 votes

employer s bill sb 1549

Employer’s Bill - SB 1549

Primary Cause

AMA Standards

Utilization Review

Medical Fee Schedule

Drugs & Alcohol

Wage Differential

Physician Networks/Doctor Choice

blow up bill

Blow Up Bill

Rep. Bradley and Sen. Raoul threatened “blow up” bill that passed the House and a Senate Committee.

final wc bill hb 1698

Final WC Bill (HB 1698)

Imposed a proximate cause standard into state statute for the first time in history

Did not get primary cause language

final wc bill

Final WC Bill

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

final wc bill1

Final WC Bill

Strengthened utilization review is applicable to all HC providers

Retrospective and prospective

HC provider participation is mandatory

final wc bill2

Final WC Bill

Medical Fee Schedule reduced by 30 percent across the board.

Illinois will continue to have the 2nd highest MFS in the United States

final wc bill3

Final WC Bill

Drug & alcohol presumption reversed.

Under new law, drugs and alcohol will be presumed to have caused the accident.

final wc bill4

Final WC Bill

Wage differential payments capped at the age of 67, or 5 years, whichever is later.

Previously, wage differential payments continued for life

final wc bill5

Final WC Bill

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

final wc bill6

Final WC Bill

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.

final wc bill7

Final WC Bill

New fraud powers and penalties

Special Assistant AG for WC Fraud

supporters of final wc bill
Supporters of Final WC Bill
  • IMA
  • IRMA
  • Chicagoland Chamber
  • City of Chicago
  • Cook County
  • Metro Counties
  • Ford
  • Navistar
  • Mitsubishi
  • Southland Chamber
  • IL Business Roundtable
  • IL Trucking Association
  • Car Dealers Association
  • IL Municipal League
  • Hyatt
  • United Airlines
  • IL Restaurant Association
  • IL Hotel & Motel Assocation
  • IL Renewable Fuels Assn.
  • Commonwealth Edison
opponents of final wc bill

Opponents of Final WC Bill

Doctors

Hospitals

Chiropractors

Other HC providers

* Unions/Trial Lawyers were neutral

impact of wc reform

Impact of WC Reform

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