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Workers ’ Compensation Reform The Perfect versus the Possible

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

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  1. Workers’ Compensation ReformThe Perfect versus the Possible Mark Denzler Vice President & Chief Operating Officer Illinois Manufacturers’ Association

  2. 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

  3. Current WC System Costly and burdensome to employers Tilted toward injured workers Makes Illinois less competitive

  4. Current WC System Petitioners and Respondents Arbitrators (judges) Illinois Workers’ Compensation Commissioners

  5. Current WC System Pay work-related medical bills 2. Weekly wage payments while off work 3. Settlement based on permanency of injury

  6. 2011 Workers’ Comp Legislation Employer community offered SB 1549 (Sen. Kyle McCarter) Failed to pass Senate – 25 votes

  7. Employer’s Bill - SB 1549 Primary Cause AMA Standards Utilization Review Medical Fee Schedule Drugs & Alcohol Wage Differential Physician Networks/Doctor Choice

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

  9. 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

  10. 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

  11. Final WC Bill Strengthened utilization review is applicable to all HC providers Retrospective and prospective HC provider participation is mandatory

  12. 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

  13. Final WC Bill Drug & alcohol presumption reversed. Under new law, drugs and alcohol will be presumed to have caused the accident.

  14. 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

  15. 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

  16. 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.

  17. Final WC Bill New fraud powers and penalties Special Assistant AG for WC Fraud

  18. 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

  19. Opponents of Final WC Bill Doctors Hospitals Chiropractors Other HC providers * Unions/Trial Lawyers were neutral

  20. 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

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