Hennessy & Roach, P.C.

1. Hennessy & Roach, P.C. The Workers’ Compensation Toolbox 10th Annual Illinois State Council Society of Human Resource Management Conference July 23-24, 2009

2. Hennessy & Roach, P.C.

3. Overview of Presentation • Brief discussion of IL Workers’ Comp System • Employer Rights • Spotting Fraud • What to do in First 48-Hours • Lowering Your Workers’ Comp Costs

4. The Illinois Workers’ Comp System • Is the accident compensable? • “In the course and scope of employment” • Employee reasonably is where he is supposed to be and doing what he is reasonably supposed to be doing • Liberally construed by Commission

5. The Illinois Workers’ Comp System • Is the accident compensable? • “Arising from employment” • Injury arises from an increased risk of injury peculiar to employment • Liberally construed by Commission

6. The Illinois Workers’ Comp System • Causal Relation • Is the Work accident a “causative factor” in the medical condition? • Aggravation only required to trigger causation • No apportionment exists

7. The Illinois Workers’ Comp System • 45-day Notice Requirement • Employee must advise employer of work injury w/in 45 days of accident • Jurisdictional requirement for claim to be valid • Liberally construed in favor of employee – almost any notice works!

8. The Illinois Workers’ Comp System • Average Weekly Wage • Statutory methods exist to determine AWW • AWW determines TTD and PPD rate

9. The Illinois Workers’ Comp System • Temporary & Total Disability & Benefits • Employee off work pursuant to physician slip • Paid at 66 2/3rds of AWW • Not payable if light duty or max medical improvement • TTD rate subject to min & max rates

10. The Illinois Workers’ Comp System • Permanency • Paid at PPD rate – 60% of AWW • PPD rate subject to min & max rates • Payable after MMI

11. The Illinois Workers’ Comp System • Different types of Permanency • Section 8(e)-Specific body parts – e.g., Hand=205 wx; Leg=215 wx • Section 8(d)(2) – Person-as-a-whole =500 wx or 20% MAW • Wage differential awards-Earnings capacity impairment

12. The Illinois Workers’ Comp System • Permanent & Total Disability • Statutory permanent total • Medical permanent total • “Odd-lot” permanent total

13. Employers’ Rights • Notice • Employee MUST advise employer of work injury w/in 45 days of accident • Documentation • Employer has right to docs in support of claim for benefits including Temporary Total Disability & Medical Benefits

14. Employers’ Rights • Representation • Experience in workers’ comp matters • Experience in venue • Experience w/the Arbitrator • Willingness to communicate • Tri-parte relationship

15. Employers’ Rights • Independent Medical Examination • Employer has right to have employee examined by doctor of YOUR choosing • Exam can address causal relation, work status and treatment plan

16. Employers’ Rights • Utilization Review • Allows evaluation of proposed health care services • Appropriateness of level of health care (medically necessary) & quality of services • Includes prospective review, 2nd opinions, concurrent review, discharge planning, peer review, IMEs and retrospective review

17. Employers’ Rights • Liens & Credits • Employer Lien (820 ILCS 305/5(b)) • Employer is entitled to reimbursement for amounts paid or to be paid to employee if recovery from 3rd party claim • Most common in work related car crashes • Subject to attorney’s fees, costs & expenses • Employer can pursue 3rd party even if employee chooses not to

18. Employers’ Rights • Liens & Credits • Credit for Prior Settlements & Awards • Credit only against like body parts • Settlement or award must occur prior to accident • No provision for credit for person-as-a-whole Source: 820 ILCS 8(e)(17)

19. Employers’ Rights • Liens & Credits • Credit for Group Benefits • Employer contribution required • Credit for non-occupational medical & disability benefits • Credit applied against TTD & medical benefits Source: 820 ILCS 305/8(j)

20. Employers’ Rights • Liens & Credits • Life Insurance Offset • Employer may elect to obtain life insurance on employees • Employer may apply such benefits to satisfy all or portion of death benefit payable under the Act Source: 820 ILCS 305/4(h)(i)

21. Fraudulent Claims • Red Flags indicating possible fraud • Injury occurred on a Monday morning • Injury occurred on a Friday but not reported until following Monday • Accident just prior to strike, termination, layoff, end of project or seasonal work • Unwitnessed by fellow employees • History of previous claims

22. Fraudulent Claims • Red Flags • Lack of notice beyond 30 days • Time between accident & medical care • Different descriptions between medical history & first claim report • Difficulty contacting employee at home when allegedly disabled • Refuses diagnostic procedure

23. Fraudulent Claims • Red Flags • Disability policies recently obtained • Lawyer and/or Dr. known for involvement in suspect claims • Employee frequently changes doctors • Employee changes his/her attorney

24. Fraudulent Claims • What to do about Fraud • Follow all leads of potential fraud • Document fraudulent activities • Notify insurance carrier of suspicions

25. Fraudulent Claims • What can be done about Fraud? • Section 25.5 of IL Workers’ Comp Act • Class 4 Felony • Order to pay complete restitution to defrauded person or entity • Civil liability in an amount three times the value of the benefits or twice the value of benefits attempted to be obtained

26. Fraudulent Claims • Requirements to prove Fraud • The employee must have filed an Application for Adjustment of Claim & must have rcv’d or attempted to receive benefits • Employee must have made written demand for the payment of benefits related to the reported fraud

27. Fraudulent Claims • Who investigates Fraud? • Div. of Insurance of the Dept of Financial & Professional Regulation • Findings of fraud are reported to the AG or the State’s Attorney • All reports of fraud shall be resolved w/in 120 days

28. Fraudulent Claims • Enumerated acts of Fraud • Employer • Intentional false statements or material representation to deny benefits • Intentional false statements to prevent a person from making legitimate claim • Intentionally prepare or present false or invalid certificate of coverage

29. Fraudulent Claims • Enumerated acts of Fraud • Employer • False statements to obtain self-insurance status or reduce amt of security required • False statements to investigators of Div. of Insurance • Intentionally assist, solicit or conspire to do any of the above

30. Fraudulent Claims • Enumerated acts of Fraud • Employee • Intentionally present false claim for benefits • Intentionally make false statements to obtain benefits • Intentionally make false statements to Div. of Insurance • Intentionally assist, solicit or conspire to do any of the above

31. First 48-Hours • Obtain Medical Care • Company doctor is advisable • Interview Employee • What happened, who was present, when did it happen, how, where • Employee should prepare written accident report to be signed & dated

32. First 48-Hours • Eyewitnesses • Complete written accident reports • Interviewed to clarify reports • Supervisor • Report should be completed regarding injury & should crystallize the investigation

33. First 48-Hours • “Evidence” • Photograph objects or areas involved • Beware of spoliation of evidence • Preserve defective products or objects if they caused the injury • Bear in mind potential subrogation claims

34. First 48-Hours • Company Reports & Files • Report accident to agent or carrier • Communicate any grounds for suspicion – YOU are in the best position to know the untold story • Create “workers’ comp claim file” • Keep & maintain all documents during the life of the claim

35. Lower Your Workers’ Comp Costs • Accident Prevention • Safety! Safety! Safety • Ergonomic work stations; weekly safety meetings; safety manual; industrial/environmental audits; safety officer; employee discipline program; etc. • Insurer provided risk assessment audits

36. Lower Your Workers’ Comp Costs • Reporting • Use of precautionary reports even if accident is minor • Employee training on company policies for reporting work accidents • Proper investigation & documentation of all work accidents

37. Lower Your Workers’ Comp Costs • Light & Restricted Duty Programs • Light duty saves on TTD benefits • Lowers claim history & premiums • Light duty keeps employee at work • Light duty is proven to lower overall costs of claims • Accommodation of permanent restrictions

38. Lower Your Workers’ Comp Costs • Nurse Case Manager Involvement • Nurse monitors & helps coordinate medical care • Nurse evaluates potential for early return to work

39. Lower Your Workers’ Comp Costs • Company Physician • Becomes familiar with work environment • Can provide light duty work assignments • Can facilitate MMI declaration & declare permanent restrictions • Can provide drug screening, post-offer physicals & ergonomic assessments

40. Lower Your Workers’ Comp Costs • Independent Medical Examinations • Employer has right to have employee examined by doctor of its choice • Exam can address causal relation; return to work; MMI; and permanent restrictions

41. Lower Your Workers’ Comp Costs • Physician review of medical records • Address medical necessity of suggested treatment • Submitted as evidence at trial

42. Lower Your Workers’ Comp Costs • Reputable Workers’ Comp Carrier • Aggressive & knowledgeable defense attorneys • Tri-parte relationship • YOU have a right to participate in the defense of the case

43. Hennessy & Roach, P.C. Thank You 217 – 726 – 0037 mholt@hennessyroach.com www.iwcc.il.gov www.HennessyRoach.com