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MEDICAL NECESSITY IN AN ECONOMIC SLOWDOWN: CONTROLLING MEDICAL TREATMENT COSTS 

Presented and Prepared by: James M. Voelker

jvoelker@heylroyster.com Peoria, Illinois • 309.676.0400

Heyl, Royster, Voelker & Allen PEORIA • SPRINGFIELD • URBANA • ROCKFORD • EDWARDSVILLE

© 2009 Heyl, Royster, Voelker & Allen

The cases and materials presented here are in summary and outline form. To be certain of their applicability and use for specific claims, we recommend the entire opinions and statutes be read and counsel consulted.

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MEDICAL NECESSITY IN AN ECONOMIC SLOWDOWN: CONTROLLING MEDICAL TREATMENT COSTS

I. INTRODUCTION ............................................................................................................................................ E-4

A. Section 8(a) B 820 ILCS 305/8(a), 8(j), 8.2, 8.7, 12 ............................................................. E-4

1. Section 8(a) − Medical Benefits ................................................................................ E-4 2. Section 8(j) − Group Benefits .................................................................................... E-6 3. Section 8.2 − Fee Schedule ........................................................................................ E-7 4. Section 8.7 − Utilization Review ............................................................................ E-10 5. Section 12 – IME .......................................................................................................... E-12

B. Key Elements of Statute ........................................................................................................... E-13

1. Lifetime Benefits .......................................................................................................... E-13 2. Two Doctor Rule .......................................................................................................... E-13 3. Reasonable and Necessary Charges .................................................................... E-14 4. Release of Records ..................................................................................................... E-14 5. Payment Is Not an Admission of Liability .......................................................... E-14 6. Credit for Group Benefits ......................................................................................... E-14 7. Fee Schedule ................................................................................................................. E-15 8. Utilization Review ........................................................................................................ E-16

a) Definition ......................................................................................................... E-16 b) Utilization Review Provider Requirements ......................................... E-16 c) Types of Utilization Review ...................................................................... E-17

(1) Prospective − Before the Treatment ...................................... E-17 (2) Concurrent Utilization Review .................................................. E-18 (3) Retrospective Utilization Review ............................................. E-18

d) Utilization Review as Evidence ................................................................ E-18 e) Penalties........................................................................................................... E-18

9. Section 12 IME.............................................................................................................. E-19 10. Panel Physicians ........................................................................................................... E-19

II. AREAS OF DISPUTE AND DEFENSE STRATEGIES ........................................................................... E-20

A. Areas of Dispute ......................................................................................................................... E-20

1. Unreasonably High Charges ................................................................................... E-20 2. Excessive Treatment ................................................................................................... E-20 3. Unnecessary Surgery ................................................................................................. E-21 4. Excessive Referrals B Two Doctor Rule ................................................................ E-22

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B. Strategies to Limit Excessive Treatment and Move the File ....................................... E-22

1. Communicate With the Provider ........................................................................... E-22 2. Treating Physician Opinions .................................................................................... E-22 3. Section 12 IME Opinions .......................................................................................... E-23 4. Utilization Review ........................................................................................................ E-23 5. Nurse Case Managers ................................................................................................ E-24 6. Group Medical .............................................................................................................. E-25 7. Public Aid ....................................................................................................................... E-25 8. Depositions .................................................................................................................... E-25 9. Provider Compromises .............................................................................................. E-26 10. Pre-Trial ........................................................................................................................... E-26 11. Trial ................................................................................................................................... E-26

III. CASE LAW .................................................................................................................................................... E-27

A. Home Modification ................................................................................................................... E-27 B. Two Doctor Rule ......................................................................................................................... E-27 C. Travel Expenses ........................................................................................................................... E-28 D. Finance and Collection Charges ........................................................................................... E-29 E. Reasonable and Necessary Charges ................................................................................... E-29 F. Direct Action by Medical Providers ..................................................................................... E-30 G. Admissions of Liability .............................................................................................................. E-30 H. Reimbursement ........................................................................................................................... E-30 I. Services Provided by Spouse or Significant Other ........................................................ E-30 J. Copying Expenses ...................................................................................................................... E-31 K. Prospective Expenses ................................................................................................................ E-31 L. Penalties......................................................................................................................................... E-32 M. Utilization Review ....................................................................................................................... E-32

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MEDICAL NECESSITY IN AN ECONOMIC SLOWDOWN: CONTROLLING MEDICAL TREATMENT COSTS

I. INTRODUCTION

Liability for medical expenses under the Illinois Workers' Compensation Act is often one of the largest exposures for employers and insurance companies in a workers’ compensation claim. This article outlines the employers’ liability for medical expenses under the Act and discusses strategies, defenses and case law aimed at mitigating the liability for medical expenses under the Act. The sections of the Illinois Workers' Compensation Act related to the respondent’s liability for medical expenses are listed below.

A. Section 8(a) B 820 ILCS 305/8(a), 8(j), 8.2, 8.7, 12

1. Section 8(a) − Medical Benefits

(820 ILCS 305/8) (from Ch. 48, par. 138.8) Sec. 8. The amount of compensation which shall be paid to the employee for an

accidental injury not resulting in death is: (a) The employer shall provide and pay the negotiated rate, if applicable, or the lesser of

the health care provider's actual charges or according to a fee schedule, subject to Section 8.2, in effect at the time the service was rendered for all the necessary first aid, medical and surgical services, and all necessary medical, surgical and hospital services thereafter incurred, limited, however, to that which is reasonably required to cure or relieve from the effects of the accidental injury. If the employer does not dispute payment of first aid, medical, surgical, and hospital services, the employer shall make such payment to the provider on behalf of the employee. The employer shall also pay for treatment, instruction and training necessary for the physical, mental and vocational rehabilitation of the employee, including all maintenance costs and expenses incidental thereto. If as a result of the injury the employee is unable to be self sufficient the employer shall further pay for such maintenance or institutional care as shall be required.

The employee may at any time elect to secure his own physician, surgeon and hospital services at the employer's expense, or,

Upon agreement between the employer and the employees, or the employees' exclusive representative, and subject to the approval of the Illinois Workers' Compensation Commission, the employer shall maintain a list of physicians, to be known as a Panel of Physicians, who are accessible to the employees. The employer shall post this list in a place or places easily accessible to his employees. The employee shall have the right to make an alternative choice of physician from such Panel if he is not satisfied with the physician first selected. If, due to the nature of the injury or its occurrence away from the employer's place of business, the employee is unable to make a selection from the Panel, the selection process from the Panel shall not

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apply. The physician selected from the Panel may arrange for any consultation, referral or other specialized medical services outside the Panel at the employer's expense. Provided that, in the event the Commission shall find that a doctor selected by the employee is rendering improper or inadequate care, the Commission may order the employee to select another doctor certified or qualified in the medical field for which treatment is required. If the employee refuses to make such change the Commission may relieve the employer of his obligation to pay the doctor's charges from the date of refusal to the date of compliance.

Any vocational rehabilitation counselors who provide service under this Act shall have appropriate certifications which designate the counselor as qualified to render opinions relating to vocational rehabilitation. Vocational rehabilitation may include, but is not limited to, counseling for job searches, supervising a job search program, and vocational retraining including education at an accredited learning institution. The employee or employer may petition to the Commission to decide disputes relating to vocational rehabilitation and the Commission shall resolve any such dispute, including payment of the vocational rehabilitation program by the employer.

The maintenance benefit shall not be less than the temporary total disability rate determined for the employee. In addition, maintenance shall include costs and expenses incidental to the vocational rehabilitation program.

When the employee is working light duty on a part time basis or full time basis and earns less than he or she would be earning if employed in the full capacity of the job or jobs, then the employee shall be entitled to temporary partial disability benefits. Temporary partial disability benefits shall be equal to two thirds of the difference between the average amount that the employee would be able to earn in the full performance of his or her duties in the occupation in which he or she was engaged at the time of accident and the net amount which he or she is earning in the modified job provided to the employee by the employer or in any other job that the employee is working.

Every hospital, physician, surgeon or other person rendering treatment or services in accordance with the provisions of this Section shall upon written request furnish full and complete reports thereof to, and permit their records to be copied by, the employer, the employee or his dependents, as the case may be, or any other party to any proceeding for compensation before the Commission, or their attorneys.

Notwithstanding the foregoing, the employer's liability to pay for such medical services selected by the employee shall be limited to:

(1) all first aid and emergency treatment; plus (2) all medical, surgical and hospital services provided by the physician, surgeon

or hospital initially chosen by the employee or by any other physician, consultant, expert, institution or other provider of services recommended by said initial service provider or any subsequent provider of medical services in the chain of referrals from said initial service provider; plus

(3) all medical, surgical and hospital services provided by any second physician, surgeon or hospital subsequently chosen by the employee or by any other physician, consultant, expert, institution or other provider of services recommended by said second service provider or any subsequent provider of medical services in the chain of referrals from said second service provider. Thereafter the employer shall select and pay for all

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necessary medical, surgical and hospital treatment and the employee may not select a provider of medical services at the employer's expense unless the employer agrees to such selection. At any time the employee may obtain any medical treatment he desires at his own expense. This paragraph shall not affect the duty to pay for rehabilitation referred to above.

When an employer and employee so agree in writing, nothing in this Act prevents an

employee whose injury or disability has been established under this Act, from relying in good faith, on treatment by prayer or spiritual means alone, in accordance with the tenets and practice of a recognized church or religious denomination, by a duly accredited practitioner thereof, and having nursing services appropriate therewith, without suffering loss or diminution of the compensation benefits under this Act. However, the employee shall submit to all physical examinations required by this Act. The cost of such treatment and nursing care shall be paid by the employee unless the employer agrees to make such payment.

Where the accidental injury results in the amputation of an arm, hand, leg or foot, or the enucleation of an eye, or the loss of any of the natural teeth, the employer shall furnish an artificial of any such members lost or damaged in accidental injury arising out of and in the course of employment, and shall also furnish the necessary braces in all proper and necessary cases. In cases of the loss of a member or members by amputation, the employer shall, whenever necessary, maintain in good repair, refit or replace the artificial limbs during the lifetime of the employee. Where the accidental injury accompanied by physical injury results in damage to a denture, eye glasses or contact eye lenses, or where the accidental injury results in damage to an artificial member, the employer shall replace or repair such denture, glasses, lenses, or artificial member.

The furnishing by the employer of any such services or appliances is not an admission of liability on the part of the employer to pay compensation.

The furnishing of any such services or appliances or the servicing thereof by the employer is not the payment of compensation.

2. Section 8(j) − Group Benefits

8(j) 1. In the event the injured employee receives benefits, including medical, surgical or hospital benefits under any group plan covering non occupational disabilities contributed to wholly or partially by the employer, which benefits should not have been payable if any rights of recovery existed under this Act, then such amounts so paid to the employee from any such group plan as shall be consistent with, and limited to, the provisions of paragraph 2 hereof, shall be credited to or against any compensation payment for temporary total incapacity for work or any medical, surgical or hospital benefits made or to be made under this Act. In such event, the period of time for giving notice of accidental injury and filing application for adjustment of claim does not commence to run until the termination of such payments. This paragraph does not apply to payments made under any group plan which would have been payable irrespective of an accidental injury under this Act. Any employer receiving such credit shall keep such employee safe and harmless from any and all claims or liabilities that may be made against him by reason of having received such payments only to the extent of such credit.

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Any excess benefits paid to or on behalf of a State employee by the State Employees' Retirement System under Article 14 of the Illinois Pension Code on a death claim or disputed disability claim shall be credited against any payments made or to be made by the State of Illinois to or on behalf of such employee under this Act, except for payments for medical expenses which have already been incurred at the time of the award. The State of Illinois shall directly reimburse the State Employees' Retirement System to the extent of such credit.

2. Nothing contained in this Act shall be construed to give the employer or the insurance carrier the right to credit for any benefits or payments received by the employee other than compensation payments provided by this Act, and where the employee receives payments other than compensation payments, whether as full or partial salary, group insurance benefits, bonuses, annuities or any other payments, the employer or insurance carrier shall receive credit for each such payment only to the extent of the compensation that would have been payable during the period covered by such payment.

3. The extension of time for the filing of an Application for Adjustment of Claim as provided in paragraph 1 above shall not apply to those cases where the time for such filing had expired prior to the date on which payments or benefits enumerated herein have been initiated or resumed. Provided however that this paragraph 3 shall apply only to cases wherein the payments or benefits hereinabove enumerated shall be received after July 1, 1969. (Source: P.A. 93 721, eff. 1 1 05; 94 277, eff. 7 20 05; 94 695, eff. 11 16 05.)

3. Section 8.2 − Fee Schedule

820 ILCS 305/8.2) Sec. 8.2. Fee schedule. (a) Except as provided for in subsection (c), for procedures, treatments, or services

covered under this Act and rendered or to be rendered on and after February 1, 2006, the maximum allowable payment shall be 90% of the 80th percentile of charges and fees as determined by the Commission utilizing information provided by employers' and insurers' national databases, with a minimum of 12,000,000 Illinois line item charges and fees comprised of health care provider and hospital charges and fees as of August 1, 2004 but not earlier than August 1, 2002. These charges and fees are provider billed amounts and shall not include discounted charges. The 80th percentile is the point on an ordered data set from low to high such that 80% of the cases are below or equal to that point and at most 20% are above or equal to that point. The Commission shall adjust these historical charges and fees as of August 1, 2004 by the Consumer Price Index U for the period August 1, 2004 through September 30, 2005. The Commission shall establish fee schedules for procedures, treatments, or services for hospital inpatient, hospital outpatient, emergency room and trauma, ambulatory surgical treatment centers, and professional services. These charges and fees shall be designated by geozip or any smaller geographic unit. The data shall in no way identify or tend to identify any patient, employer, or health care provider. As used in this Section, "geozip" means a three digit zip code based on data similarities, geographical similarities, and frequencies. A geozip does not cross state boundaries. As used in this Section, "three digit zip code" means a geographic area in which all zip codes have the same first 3 digits. If a geozip does not have the necessary number of charges and fees to calculate a valid percentile for a specific procedure, treatment, or service,

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the Commission may combine data from the geozip with up to 4 other geozips that are demographically and economically similar and exhibit similarities in data and frequencies until the Commission reaches 9 charges or fees for that specific procedure, treatment, or service. In cases where the compiled data contains less than 9 charges or fees for a procedure, treatment, or service, reimbursement shall occur at 76% of charges and fees as determined by the Commission in a manner consistent with the provisions of this paragraph. The Commission has the authority to set the maximum allowable payment to providers of out of state procedures, treatments, or services covered under this Act in a manner consistent with this Section. Not later than September 30 in 2006 and each year thereafter, the Commission shall automatically increase or decrease the maximum allowable payment for a procedure, treatment, or service established and in effect on January 1 of that year by the percentage change in the Consumer Price Index U for the 12 month period ending August 31 of that year. The increase or decrease shall become effective on January 1 of the following year. As used in this Section, "Consumer Price Index U" means the index published by the Bureau of Labor Statistics of the U.S. Department of Labor, that measures the average change in prices of all goods and services purchased by all urban consumers, U.S. city average, all items, 1982 84=100.

(b) Notwithstanding the provisions of subsection (a), if the Commission finds that there is a significant limitation on access to quality health care in either a specific field of health care services or a specific geographic limitation on access to health care, it may change the Consumer Price Index U increase or decrease for that specific field or specific geographic limitation on access to health care to address that limitation.

(c) The Commission shall establish by rule a process to review those medical cases or outliers that involve extra ordinary treatment to determine whether to make an additional adjustment to the maximum payment within a fee schedule for a procedure, treatment, or service.

(d) When a patient notifies a provider that the treatment, procedure, or service being sought is for a work related illness or injury and furnishes the provider the name and address of the responsible employer, the provider shall bill the employer directly. The employer shall make payment and providers shall submit bills and records in accordance with the provisions of this Section. All payments to providers for treatment provided pursuant to this Act shall be made within 60 days of receipt of the bills as long as the claim contains substantially all the required data elements necessary to adjudicate the bills. In the case of nonpayment to a provider within 60 days of receipt of the bill which contained substantially all of the required data elements necessary to adjudicate the bill or nonpayment to a provider of a portion of such a bill up to the lesser of the actual charge or the payment level set by the Commission in the fee schedule established in this Section, the bill, or portion of the bill, shall incur interest at a rate of 1% per month payable to the provider.

(e) Except as provided in subsections (e 5), (e 10), and (e 15), a provider shall not hold an employee liable for costs related to a non disputed procedure, treatment, or service rendered in connection with a compensable injury. The provisions of subsections (e 5), (e 10), (e 15), and (e 20) shall not apply if an employee provides information to the provider regarding participation in a group health plan. If the employee participates in a group health plan, the provider may submit a claim for services to the group health plan. If the claim for service is covered by the group health plan, the employee's responsibility shall be limited to applicable deductibles, co

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payments, or co insurance. Except as provided under subsections (e 5), (e 10), (e 15), and (e 20), a provider shall not bill or otherwise attempt to recover from the employee the difference between the provider's charge and the amount paid by the employer or the insurer on a compensable injury.

(e 5) If an employer notifies a provider that the employer does not consider the illness or injury to be compensable under this Act, the provider may seek payment of the provider's actual charges from the employee for any procedure, treatment, or service rendered. Once an employee informs the provider that there is an application filed with the Commission to resolve a dispute over payment of such charges, the provider shall cease any and all efforts to collect payment for the services that are the subject of the dispute. Any statute of limitations or statute of repose applicable to the provider's efforts to collect payment from the employee shall be tolled from the date that the employee files the application with the Commission until the date that the provider is permitted to resume collection efforts under the provisions of this Section.

(e 10) If an employer notifies a provider that the employer will pay only a portion of a bill for any procedure, treatment, or service rendered in connection with a compensable illness or disease, the provider may seek payment from the employee for the remainder of the amount of the bill up to the lesser of the actual charge, negotiated rate, if applicable, or the payment level set by the Commission in the fee schedule established in this Section. Once an employee informs the provider that there is an application filed with the Commission to resolve a dispute over payment of such charges, the provider shall cease any and all efforts to collect payment for the services that are the subject of the dispute. Any statute of limitations or statute of repose applicable to the provider's efforts to collect payment from the employee shall be tolled from the date that the employee files the application with the Commission until the date that the provider is permitted to resume collection efforts under the provisions of this Section.

(e 15) When there is a dispute over the compensability of or amount of payment for a procedure, treatment, or service, and a case is pending or proceeding before an Arbitrator or the Commission, the provider may mail the employee reminders that the employee will be responsible for payment of any procedure, treatment or service rendered by the provider. The reminders must state that they are not bills, to the extent practicable include itemized information, and state that the employee need not pay until such time as the provider is permitted to resume collection efforts under this Section. The reminders shall not be provided to any credit rating agency. The reminders may request that the employee furnish the provider with information about the proceeding under this Act, such as the file number, names of parties, and status of the case. If an employee fails to respond to such request for information or fails to furnish the information requested within 90 days of the date of the reminder, the provider is entitled to resume any and all efforts to collect payment from the employee for the services rendered to the employee and the employee shall be responsible for payment of any outstanding bills for a procedure, treatment, or service rendered by a provider.

(e 20) Upon a final award or judgment by an Arbitrator or the Commission, or a settlement agreed to by the employer and the employee, a provider may resume any and all efforts to collect payment from the employee for the services rendered to the employee and the employee shall be responsible for payment of any outstanding bills for a procedure, treatment, or service rendered by a provider as well as the interest awarded under subsection (d) of this Section. In the case of a procedure, treatment, or service deemed compensable, the provider

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shall not require a payment rate, excluding the interest provisions under subsection (d), greater than the lesser of the actual charge or the payment level set by the Commission in the fee schedule established in this Section. Payment for services deemed not covered or not compensable under this Act is the responsibility of the employee unless a provider and employee have agreed otherwise in writing. Services not covered or not compensable under this Act are not subject to the fee schedule in this Section.

(f) Nothing in this Act shall prohibit an employer or insurer from contracting with a health care provider or group of health care providers for reimbursement levels for benefits under this Act different from those provided in this Section.

(g) On or before January 1, 2010 the Commission shall provide to the Governor and General Assembly a report regarding the implementation of the medical fee schedule and the index used for annual adjustment to that schedule as described in this Section. (Source: P.A. 94 277, eff. 7 20 05; 94 695, eff. 11 16 05.)

4. Section 8.7 − Utilization Review

(820 ILCS 305/8.7) Sec. 8.7. Utilization review programs. (a) As used in this Section: "Utilization review" means the evaluation of proposed or provided health care services to

determine the appropriateness of both the level of health care services medically necessary and the quality of health care services provided to a patient, including evaluation of their efficiency, efficacy, and appropriateness of treatment, hospitalization, or office visits based on medically accepted standards. The evaluation must be accomplished by means of a system that identifies the utilization of health care services based on standards of care or nationally recognized peer review guidelines as well as nationally recognized evidence based upon standards as provided in this Act. Utilization techniques may include prospective review, second opinions, concurrent review, discharge planning, peer review, independent medical examinations, and retrospective review (for purposes of this sentence, retrospective review shall be applicable to services rendered on or after July 20, 2005). Nothing in this Section applies to prospective review of necessary first aid or emergency treatment.

(b) No person may conduct a utilization review program for workers' compensation services in this State unless once every 2 years the person registers the utilization review program with the Department of Financial and Professional Regulation and certifies compliance with the Workers' Compensation Utilization Management standards or Health Utilization Management Standards of URAC sufficient to achieve URAC accreditation or submits evidence of accreditation by URAC for its Workers' Compensation Utilization Management Standards or Health Utilization Management Standards. Nothing in this Act shall be construed to require an employer or insurer or its subcontractors to become URAC accredited.

(c) In addition, the Secretary of Financial and Professional Regulation may certify alternative utilization review standards of national accreditation organizations or entities in order for plans to comply with this Section. Any alternative utilization review standards shall meet or exceed those standards required under subsection (b).

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(d) This registration shall include submission of all of the following information regarding utilization review program activities:

(1) The name, address, and telephone number of the utilization review programs. (2) The organization and governing structure of the utilization review programs. (3) The number of lives for which utilization review is conducted by each

utilization review program. (4) Hours of operation of each utilization review program. (5) Description of the grievance process for each utilization review program. (6) Number of covered lives for which utilization review was conducted for the

previous calendar year for each utilization review program. (7) Written policies and procedures for protecting confidential information

according to applicable State and federal laws for each utilization review program. (e) A utilization review program shall have written procedures to ensure that patient

specific information obtained during the process of utilization review will be: (1) kept confidential in accordance with applicable State and federal laws; and (2) shared only with the employee, the employee's designee, and the employee's health

care provider, and those who are authorized by law to receive the information. Summary data shall not be considered confidential if it does not provide information to allow identification of individual patients or health care providers.

Only a health care professional may make determinations regarding the medical necessity of health care services during the course of utilization review.

When making retrospective reviews, utilization review programs shall base reviews solely on the medical information available to the attending physician or ordering provider at the time the health care services were provided.

(f) If the Department of Financial and Professional Regulation finds that a utilization review program is not in compliance with this Section,

the Department shall issue a corrective action plan and allow a reasonable amount of time for compliance with the plan. If the utilization review program does not come into compliance, the Department may issue a cease and desist order. Before issuing a cease and desist order under this Section, the Department shall provide the utilization review program with a written notice of the reasons for the order and allow a reasonable amount of time to supply additional information demonstrating compliance with the requirements of this Section and to request a hearing. The hearing notice shall be sent by certified mail, return receipt requested, and the hearing shall be conducted in accordance with the Illinois Administrative Procedure Act. (g) A utilization review program subject to a corrective action may continue to conduct business until a final decision has been issued by the Department.

(h) The Secretary of Financial and Professional Regulation may by rule establish a registration fee for each person conducting a

utilization review program. (i) A utilization review will be considered by the Commission, along with all other

evidence and in the same manner as all other evidence, in the determination of the reasonableness and necessity of the medical bills or treatment. Nothing in this Section shall be construed to diminish the rights of employees to reasonable and necessary medical treatment

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or employee choice of health care provider under Section 8(a) or the rights of employers to medical examinations under Section 12.

(j) When an employer denies payment of or refuses to authorize payment of first aid, medical, surgical, or hospital services under Section 8(a) of this Act, if that denial or refusal to authorize complies with a utilization review program registered under this Section and complies with all other requirements of this Section, then there shall be a rebuttable presumption that the employer shall not be responsible for payment of additional compensation pursuant to Section 19(k) of this Act and if that denial or refusal to authorize does not comply with a utilization review program registered under this Section and does not comply with all other requirements of this Section, then that will be considered by the Commission, along with all other evidence and in the same manner as all other evidence, in the determination of whether the employer may be responsible for the payment of additional compensation pursuant to Section 19(k) of this Act. (Source: P.A. 94 277, eff. 7 20 05; 94 695, eff. 11 16 05.)

5. Section 12 − IME

(820 ILCS 305/12) (from Ch. 48, par. 138.12) Sec. 12. An employee entitled to receive disability payments shall be required, if

requested by the employer, to submit himself, at the expense of the employer, for examination to a duly qualified medical practitioner or surgeon selected by the employer, at any time and place reasonably convenient for the employee, either within or without the State of Illinois, for the purpose of determining the nature, extent and probable duration of the injury received by the employee, and for the purpose of ascertaining the amount of compensation which may be due the employee from time to time for disability according to the provisions of this Act. An employee may also be required to submit himself for examination by medical experts under subsection (c) of Section 19. An employer requesting such an examination, of an employee residing within the State of Illinois, shall deliver to the employee with the notice of the time and place of examination sufficient money to defray the necessary expense of travel by the most convenient means to and from the place of examination, and the cost of meals necessary during the trip, and if the examination or travel to and from the place of examination causes any loss of working time on the part of the employee, the employer shall reimburse him for such loss of wages upon the basis of his average daily wage. Such examination shall be made in the presence of a duly qualified medical practitioner or surgeon provided and paid for by the employee, if such employee so desires.

In all cases where the examination is made by a surgeon engaged by the employer, and the injured employee has no surgeon present at such examination, it shall be the duty of the surgeon making the examination at the instance of the employer to deliver to the injured employee, or his representative, a statement in writing of the condition and extent of the injury to the same extent that said surgeon reports to the employer and the same shall be an exact copy of that furnished to the employer, said copy to be furnished the employee, or his representative as soon as practicable but not later than 48 hours before the time the case is set for hearing. Such delivery shall be made in person either to the employee or his representative,

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or by registered mail to either, and the receipt of either shall be proof of such delivery. If such surgeon refuses to furnish the employee with such statement to the same extent as that furnished the employer said surgeon shall not be permitted to testify at the hearing next following said examination.

If the employee refuses so to submit himself to examination or unnecessarily obstructs the same, his right to compensation payments shall be temporarily suspended until such examination shall have taken place, and no compensation shall be payable under this Act for such period.

It shall be the duty of surgeons treating an injured employee who is likely to die, and treating him at the instance of the employer, to have called in another surgeon to be designated and paid for by either the injured employee or by the person or persons who would become his beneficiary or beneficiaries, to make an examination before the death of such injured employee.

In all cases where the examination is made by a surgeon engaged by the injured employee, and the employer has no surgeon present at such examination, it shall be the duty of the surgeon making the examination at the instance of the employee, to deliver to the employer, or his representative, a statement in writing of the condition and extent of the injury to the same extent that said surgeon reports to the employee and the same shall be an exact copy of that furnished to the employee, said copy to be furnished the employer, or his representative, as soon as practicable but not later than 48 hours before the time the case is set for hearing. Such delivery shall be made in person either to the employer, or his representative, or by registered mail to either, and the receipt of either shall be proof of such delivery. If such surgeon refuses to furnish the employer with such statement to the same extent as that furnished the employee, said surgeon shall not be permitted to testify at the hearing next following said examination. (Source: P.A. 94 277, eff. 7 20 05.)

B. Key Elements of Statute

1. Lifetime Benefits

Once a claim has been ruled compensable, the respondent is liable for reasonable medical expenses relating to the occupational injury for the life of the petitioner. These rights may be waived by the petitioner by contract when a case is settled. Lifetime benefits only apply to treatment required to cure or relieve the work-related injury. Medical benefits include first aid, emergency, medical, surgical and hospital services provided by the physician selected by the petitioner. Benefits also include artificial members, braces, glasses, dentures, lenses and the cost of repair of such devices in the future. Necessary home modification expenses are also compensable when the injury requires such accommodations.

2. Two Doctor Rule

The petitioner has the right to select two physicians of his/her choice. A referral from the first physician and any physician in the same chain counts as one choice by the petitioner. As a result, the petitioner can see an unlimited number of physicians of his/her choice if he/she

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obtains a referral from one of the physicians in the chain of referral. (Emergency room treatment or first aid is not a choice.)

3. Reasonable and Necessary Charges

The Act specifically limits the liability of the employer to reasonable and necessary treatments and charges.

4. Release of Records

Section 8(a) requires all medical providers to furnish complete medical records relating to a workers’ compensation claim to the employer upon request.

5. Payment Is Not an Admission of Liability

The Act specifically states that payment of medical expenses under the Act is not an admission of liability on the part of an employer to pay compensation. Despite that fact, there are times when an arbitrator will perceive payment of medical as an indication of the seriousness of the respondent=s defense. This depends on the facts of each case. If benefits are paid for a period of time and a defense is discovered negating accident, causation or some other issue, the best course of action is to immediately deny the claim. An effective trial presentation will explain to the arbitrator why benefits were suspended and negate any false perception on the part of the arbitrator.

6. Credit for Group Benefits

Section 8(j)(1) provides that when an employee receives non-occupational medical or disability payments which would not have been payable if rights to recovery existed under the Act, then the employer is entitled to a credit for such payments against any award for temporary total disability or medical benefits. Pursuant to the statutory language, the employer must contribute in part to the premium for the medical or group disability coverage in order to obtain the credit. Where a credit is taken by the employer, the statute provides that the employer shall automatically hold the employee harmless for any claims or liabilities (by the group insurer) for payments received by the employee. The employer cannot take a credit where the group medical or disability payments would have been payable to the employee irrespective of an accidental injury under this Act. A little known aspect of section 8(j) is that payments of group health by a qualifying carrier act to toll the statue of limitations for the filing of an application for adjustment of claim and the 45 day notice provision of the Act. These limitation periods are tolled during the time group health benefits are being paid. Such tolling will not occur, however, where the employee does not acquire group medical or disability benefits until after the statute has run.

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7. Fee Schedule

The 2005 amendments to the Illinois Workers’ Compensation Act created a Medical Fee Schedule, which outlines the amounts that medical providers may charge for procedures, treatments, or services covered under this Act. The fee schedule applies to medical expenses covered under the Act rendered on or after February 1, 2006. Section 8.2(a) of the Act provides that the maximum allowable payment for procedures, treatments, or services covered under the Act shall be 90 percent of the 80th percentile of charges and fees, as determined by the Commission, from charges for those services between August 1, 2002, and August 1, 2004. The Commission will adjust these historical charges and fees as of August 1, 2004, by the Consumer Price Index for all goods and services (the CPI-U) and will do this on an annual basis for the period of August 4 to the following September 30 of each year, to become effective on January 1 of the following year. Charges are designated by Geozip, which are the first three numbers of a zip code. For procedures where insufficient data is available for a procedure, treatment, or service, reimbursement shall occur at 76 percent of the charges and fees. The Commission has the authority to set maximum allowable payment to providers with out-of-state procedures, treatment, and services. According to the current Fee Schedule, out of state procedures are to be paid at the lesser of 76 percent of the charges or the Medical Fee Schedule amount from the state where the services took place, should that state have a Medical Fee Schedule. Should the Commission find that there is a significant limitation on access to quality healthcare, it may change the CPI-U increase or decrease for the specific field or geographic area in question. The Commission can make additional adjustments to the maximum payment for cases that involve extraordinary treatment. Once the employee notifies the provider that the treatment is claimed to be work-related, the provider shall bill the employer directly. Payments on non-disputed claims must be made within 60 days of receipt of the bill as long as the claim contains substantially all of the required data elements necessary to adjudicate the bills. Providers may charge one percent interest per month on bills after 60 days where this requirement has been met. Providers cannot balance bill an employee for services rendered in connection with a compensable injury, nor can they attempt to recover from the employee the difference between

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their charge and the amount paid pursuant to the Medical Fee Schedule on a compensable injury. Where the employee notifies the provider that the claim is in dispute, the provider may seek payment from the employee at that time. Once an employee informs the provider there is an Application for Adjustment of Claim on file with the Commission, the medical provider must cease collection efforts until the conclusion of the case, but the statute of limitations is tolled from the date the employee files the Application to permit the provider to resume collection efforts at a later date if necessary. When there is a dispute over compensability and a case is pending before the Commission, the provider may mail the employee reminders that the employee will be responsible for payment of the procedure. These reminders must indicate they are not bills, must include itemized information to the extent practicable, and may not be provided to any credit rating agency. Upon a final award or a settlement agreed to by the employer and the employee, a provider may resume any and all efforts to collect payment from the employee of any outstanding bills. Payment for services deemed not covered or not compensable under the Act is the responsibility of the employee and are not subject to the Medical Fee Schedule. The recent amendments do not prohibit an employer or insurer from contracting with a healthcare provider for reimbursement levels different from those provided in the Medical Fee Schedule. The Illinois Medical Fee Schedule is published on the Commissions’ website at http://www.state.il.us/agency/iic/ The Medical Fee Schedule does not apply to charges for medical evaluations under section 12.

8. Utilization Review

a) Definition

Utilization review is the evaluation of proposed or provided health care services to determine the appropriateness of both the level of health care services that are medically necessary and the quality of health care services provided to a petitioner. The evaluation includes the efficiency, efficacy, and appropriateness of treatment, hospitalization, or office visits based on medically accepted standards.

b) Utilization Review Provider Requirements

Section 8.7 of the Act requires that a utilization review evaluation must be accomplished by means of a system that identifies the utilization of health care services based on standards of

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care or nationally recognized peer review guidelines as well as nationally recognized evidence based upon standards as provided in the Act. Section 8.7(b) of the Act provides that utilization review provider must register every two years with the Department of Financial and Professional Regulation. No person may conduct a utilization review program for workers' compensation services unless once every two years the person registers the utilization review program with the Department of Financial and Professional Regulation and certifies compliance with the Workers' Compensation Utilization Management standards or Health Utilization Management Standards of URAC sufficient to achieve URAC accreditation or submits evidence of accreditation by URAC for its Workers' Compensation Utilization Management Standards or Health Utilization Management Standards. The Act does not require an employer, insurer or its subcontractors to become URAC accredited. Section 8.7(e) of the Act provides that only a health care professional may make determinations regarding the medical necessity of health care services during the course of utilization review. When making retrospective reviews, utilization review programs shall base reviews solely on the medical information available to the attending physician or ordering provider at the time the health care services were provided. Section 8.7(e) of the Act also provides that a utilization review program shall have written procedures to ensure that patient-specific information obtained during the process of utilization review will be: 1. Kept confidential in accordance with applicable state and federal laws; and 2. Shared only with the employee, the employee’s designee, and the employee’s health care provider, and those who are authorized by law to receive the information . . .

c) Types of Utilization Review

Utilization techniques may include prospective review, second opinions, concurrent review, discharge planning, peer review, independent medical examinations and retrospective review. Utilization review does not apply to prospective review of necessary first aid or emergency treatment.

(1) Prospective − Before the Treatment Prospective utilization review typically applies to physical therapy, chiropractor, and pain center-type treatment and as pre-certification for recommended procedures, such as surgery. It does

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not apply to emergency room treatment. It is used to determine whether the recommended treatment is appropriate Examples of prospective treatment would be:

• Determine if a hospital admission is appropriate; • Determine that the place of care is appropriate; • Determine if the duration of care is appropriate.

Utilization review is best for all parties when it is prospective.

(2) Concurrent Utilization Review This is an assessment of ongoing treatment and might include second opinions, discharge planning, and assessments of the duration and frequency of care, particularly in chiropractic and physical therapy care.

(3) Retrospective Utilization Review The Illinois statute and URAC guidelines are similar in that retrospective utilization review is available, but the medical information reviewed during the utilization review process must be the same information the treating doctor had available at the time the decision was made. This is perhaps the least desirable type of utilization review, as one would assume the Illinois Workers’ Compensation Commission does not want to deny or reduce bills after they have been incurred.

d) Utilization Review as Evidence

A utilization review report will be considered by the Commission, along with all other evidence and in the same manner as all other evidence in the determination of the reasonableness and necessity of the medical bills. Nothing in the statute is to be construed to diminish the rights of employees to reasonable and necessary medical treatment, or employee choice of health care providers under section 8(a), or the rights of employers to medical examinations under section 12.

e) Penalties

If an employer’s denial of medical services under section 8(a) complies with a URAC utilization review program, then there shall be a rebuttable presumption that the employer shall not be subject to penalties pursuant to section 19(k) of this Act, and if that denial or refusal to authorize does not comply with a URAC utilization review program and does not comply with all other requirements of this section, then that will be considered by the Commission along with all other evidence, and in the same manner as all other evidence in the determination of whether the employer may be subject to penalties.

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9. Section 12 IME

An employee claiming benefits under the Act is required to submit to an exam if requested by the employer. The exam is at the expense of the employer, and may be performed by a duly qualified medical practitioner or surgeon selected by the employer. The time and place of the exam shall be reasonably convenient for the employee, either inside or outside the State of Illinois. An employer requesting a section 12 examination is required to deliver to the employee with the notice of the time and place of examination sufficient money to defray the necessary expense of travel by the most convenient means to and from the place of examination, and the cost of meals necessary during the trip. If as a result of the examination the employee loses any wages, the employer is required to reimburse the employee for the loss on the basis of his average daily wage. The Act states that it shall be the duty of the surgeon making the examination at the instance of the employer to deliver to the injured employee, or his representative, a statement in writing of the condition and extent of the injury to the same extent that said surgeon reports to the employer and the same shall be an exact copy of that furnished to the employer, said copy to be furnished the employee, or his representative as soon as practicable but not later than 48 hours before the time the case is set for hearing. Such delivery shall be made in person either to the employee or his representative, or by registered mail to either, and the receipt of either shall be proof of such delivery. If such surgeon refuses to furnish the employee with such statement to the same extent as that furnished the employer said surgeon shall not be permitted to testify at the hearing following said examination. If the employee refuses so to submit himself to examination or unnecessarily obstructs the same, his right to compensation payments shall be temporarily suspended until such examination shall have taken place, and no compensation shall be payable under this Act for such period.

10. Panel Physicians

Section 8a of the Act provides that upon agreement between the employer and the employees, or the employees’ exclusive representative, and subject to the approval of the Illinois Workers’ Compensation Commission, the employer shall maintain a list of physicians, to be known as a Panel of Physicians, who are accessible to the employees. The employer shall post this list in a place or places easily accessible to his employees. The employee shall have the right to make an alternative choice of physician from such Panel if he is not satisfied with the physician first selected. If, due to the nature of the injury or its occurrence away from the employer’s place of business, the employee is unable to make a selection from the Panel, the selection process from

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the Panel shall not apply. The physician selected from the Panel may arrange for any consultation, referral or other specialized medical services outside the Panel at the employer’s expense. Provided that, in the event the Commission shall find that a doctor selected by the employee is rendering improper or inadequate care, the Commission may order the employee to select another doctor certified or qualified in the medical field for which treatment is required. If the employee refuses to make such change the Commission may relieve the employer of his obligation to pay the doctor’s charges from the date of refusal to the date of compliance. II. AREAS OF DISPUTE AND DEFENSE STRATEGIES

A. Areas of Dispute

1. Unreasonably High Charges

Prior to the 2005 amendments to the Illinois Workers' Compensation Act, the most common areas of dispute related to the amount of the charge by medical providers. The adoption of a fee schedule in Illinois has sharply reduced the disputes related to the amount charged by medical providers. This issue arises when the fee schedule does not provide for charges related to a particular type of treatment. In that situation, the Commission is left to rely on the opinions of treating physician, examining physicians and utilization review.

2. Excessive Treatment

Chiropractic treatment is one of the most frequent areas of dispute based on over-treatment. It is not unusual to find chiropractors providing adjustments to patients three to five times per week for years at a time. As with any disputed charge, it is important to know the reputation of the chiropractor with the arbitrator hearing the case. The Industrial Commission and its arbitrators are growing more intolerant of chiropractic billing excesses. You are more likely to successfully defend exorbitant chiropractic charges than any other type of medical charge. When considering how to move a disputed chiropractic case, it should be recognized that chiropractors regularly discount their bills to close a case. If the chiropractor is not willing to discount the bill and the proof is in place to successfully defend the bill, then trying the case with a good arbitrator can often be the best way to move the file. Most arbitrators will allow a reasonable period of chiropractic treatment, usually six to eight weeks. In each case, one should attempt to determine which arbitrator will ultimately hear the case and what that arbitrator=s attitude is about chiropractic care. Decisions concerning termination of authorization can be made accordingly.

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One of the best defenses to excessive chiropractic bills is the petitioner=s failure to improve. If there is no improvement in the petitioner=s condition, bills for treatment beyond four to six weeks are typically denied by the Industrial Commission. (See Arroyo v. Henri Studio, 95 WC 5329, 98 IIC 0344 (Mar. 31, 1998); Santoro v. Kraft General Foods, 95 WC 69217, 98 IIC 0621 (June 17, 1998); Endicott v. Colonial Care Center, 91 WC 43970, 98 IIC 0763 (July 28, 1998). Lengthy physical therapy can also result in disputed and excessive charges. However, the Industrial Commission is much more tolerant of physical therapists than of chiropractors. Therapy programs are monitored by referring physicians who are usually less likely to approve therapy without some evidence of improvement. Therapists themselves often recommend discontinuation of therapy if the patient does not show adequate progress. Nevertheless, a close watch needs to be made of the petitioner=s progress. Many physicians prescribe expensive diagnostic procedures such as the MRI=s, CT=s and bone scans with little consideration given to the cost of such procedures. At trial, multiple diagnostic procedures will likely be awarded unless there is very specific and credible evidence that the procedures were unnecessary. Pain Clinic referrals have become increasingly popular, especially for chronic pain patients with minimal objective findings. Pain Clinics tend to treat injured workers for long periods of time, often with minimal success. It is important to create some evidence early in the course of such treatment that additional treatment is unreasonable and unnecessary. Such evidence can be created by an examining physician, medical manager, or possibly by a cooperative treating physician.

3. Unnecessary Surgery

One of the most frustrating and potentially damaging medical disputes occurs when a surgeon performs unnecessary or unwise surgery. The exposure of a case can change dramatically when surgery takes place, even if it is successful. Once a petitioner has had surgery, successfully denying the reasonableness and/or necessity is very difficult. The Industrial Commission rarely denies such bills and disability for such surgery once it has taken place unless there is a basis to deny the entire claim. Thus, the primary effort to limit this exposure must occur before the surgery. When questionable surgery is suggested, obtain a credible opinion refuting the need for the surgery from an independent surgeon immediately. The report should be furnished to the petitioner=s attorney and the petitioner=s surgeon with a letter explaining that the surgery will not be paid. Hopefully, the treating surgeon will give such a report serious consideration before performing surgery.

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4. Excessive Referrals B Two Doctor Rule

Doctors do not hesitate to refer patients to other physicians. Many times, their notes do not clearly specify a referral. Arbitrators usually allow petitioners to testify about the referrals made. Unfortunately, this allows the petitioner to fabricate referrals. To combat such fabrications one should find out directly from the allegedly referring doctor whether a referral was made. It is important to obtain the complete files of both physicians to uncover documents which will show if a referral was made.

B. Strategies to Limit Excessive Treatment and Move the File

The strategies used to limit or avoid the cost of excessive treatment of any kind varies with each case. The first goal is to avoid the occurrence of excessive treatment. If excessive treatment occurs, then try to avoid paying for it, or at least get the bill compromised. The latter goal can be accomplished either by trial or settlement.

1. Communicate With the Provider

One of the best ways to avoid excessive medical charges is to stop the treatment as soon as possible after it starts. For example, chiropractic treatment longer than four to six weeks should be challenged immediately. Let the chiropractor know in writing that the workers= compensation carrier will not pay for continuing chiropractic care. Many chiropractors will discontinue treatment based simply on the written notice that the payor deems the treatment excessive. Any direct communication with a medical provider must be limited to the issue of challenge to the charges. In Hydraulics v. Industrial Comm'n, 329 Ill. App. 3d 166, 768 N.E.2d 760, 263 Ill. Dec. 679 (2d Dist. 2002), the Appellate Court held that ex-parte contact with a medical provider for the purpose of obtaining medical information can form a basis for penalizing the employer. The Hydraulics case held that Petrillo v. Syntex Laboratories, Inc., 148 Ill. App. 3d 581, 499 N.E.2d 952, 102 Ill. Dec. 172 (1st Dist. 1986) applies to workers’ compensation cases.

2. Treating Physician Opinions

One of the most persuasive ways to challenge medical treatment by a treating physician is with the testimony of another treating physician. This opportunity usually develops when the petitioner switches treating physicians because he or she is not happy with the first physician. When the first physician is made aware that the petitioner sought treatment with a second physician without a referral, the first physician will frequently hold it against the petitioner in a deposition. One of the most common examples occurs when the first physician recommends against surgery and the petitioner seeks a second physician who performs the surgery. The first treating physician will generally be given great weight by the arbitrator and Commission. The first

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physician is presumed to be credible causing an extra degree of scrutiny on the operating physician. This evidence is usually marshaled by a careful review of all the treating medical records.

3. Section 12 IME Opinions

Ongoing or prospective medical treatment is frequently challenged with the opinion of an examining physician. The selection of a section 12 examining physician is critically important to whether the exam is a success. The biggest mistake to be made in selecting an IME physician is to delegate the task to a nurse case manager or third-party service. A nurse case manager or third-party service will focus on the qualifications of the examining physician and their own assessment of whether the physician is competent. It is important to understand that the success of the exam will be determined by the credibility that will be given to the physician by the arbitrator and Commission. There a many excellent physicians that do not have good reputations with the Illinois Workers' Compensation Commission. To select the best physician for the job you need to know what the arbitrator who will hear the case believes about an IME physician. Therefore, the selection needs to be made by someone with experience with the arbitrator who will handle the case. This will usually be a lawyer who has tried numerous cases with the arbitrator and knows the arbitrator’s particular likes and dislikes.

4. Utilization Review

Utilization review has now been with us for several years. The last section of this article summarizes fifteen cases from the Illinois Workers' Compensation Commission that ruled on utilization review reports. A thoughtful analysis of these cases reveals several trends regarding the Illinois Workers' Compensation Commission’s treatment of utilization review reports. All of the decisions involving utilization review comment on the qualifications of the utilization review provider. It is important for the utilization review report to detail the provider’s qualifications and certifications. If the doctor is URAC certified, that fact should be highlighted in the report. Of those cases where the respondents’ reports were rejected, many were criticized for not containing details to support the utilization review conclusions. Therefore, it is important that any utilization review report submitted be detailed in its findings and the basis for its conclusions. The greater the factual basis for the findings, the more likely it will be upheld. The details should include a medical and scientific basis for the opinions rendered.

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Several of the decisions that rejected utilization review reports were critical of the reports because no detail was provided in the report regarding the medical records reviewed and relied upon by the utilization review provider. Any utilization review report must include a summary of the medical records reviewed and relied upon by the utilization review provider. Utilization review reports must be timely. The longer the delay between the challenged treatment and the date of the utilization review report the less persuasive it is to the Commission. Once the utilization review report is obtained, a trial setting should be obtained quickly. The Commission is more likely to adopt a utilization review report the closer it is to the trial date. Many of the cases where the respondent’s utilization review report was adopted by the Commission were submitted in conjunction with a section 12 IME report that supported the utilization review conclusions. Therefore, it is important to understand that a successful IME can supplement a successful utilization review report. Utilization review reports are adopted more often when the utilization review finds support in records of one of the treating physicians. Many of the rejected utilization review reports were found to be totally unreasonable by the Commission. A utilization review report is much more likely to be found credible by the Commission if it finds some treatment reasonable but challenges other treatment. A blanket rejection of all the treatment provided by the treating physicians is likely to receive a summary rejection by the Commission. Several utilization review reports were rejected by the Commission because the utilization review reports addressed causation in addition to the reasonableness and necessity of the treatment in question. It is best to leave causation issues to section 12 IME physicians. To do otherwise may cause the Commission to give less weight to the utilization review report. It is important that the language of the utilization review report maintain a neutral tone and not appear partisan or biased. In retrospective reviews, it is important for the utilization review report to reference only medical information available to the treating physician at the time services were provided. The report should expressly state that fact.

5. Nurse Case Managers

Nurse case managers can be very effective in limiting unnecessary treatment, redirecting injured workers to more meaningful treatment providers, and controlling medical costs. Medical managers should be considered on all cases involving serious injuries or prolonged courses of treatment. The ability to attend appointments with a petitioner provides a way for the nurse to communicate with the treating physician and encourage the end of treatment.

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6. Group Medical

Payment of medical bills by a group health carrier often provides a good way to compromise medical expenses. Group health carriers will usually receive a better discount than the workers’ compensation carrier so the total medical exposure is reduced simply by payment by the group health carrier. Many times cases are settled with “hold harmless” language. A “hold harmless” is generally understood to mean that the respondent will hold the petitioner harmless from any claims for reimbursement made by the group health carrier. It is important to understand that a “hold harmless” agreement does not mean that the respondent will simply reimburse the group health carrier after the case is settled. The contract language should place the burden on the group health carrier to prove that the medical bills arose out of and in the course of the petitioner’s employment. The language should also require the petitioner to notify the respondent in writing if a claim for reimbursement is filed. Example hold harmless language: Respondent agrees to hold the petitioner harmless from any claims for reimbursement for medical bills paid by Blue Cross Blue Shield up to $5,200.00 to the extent that such bills are proven to have arisen out of and in the course of petitioner's employment for the injuries alleged and are proven reasonable and necessary. This agreement is contingent upon petitioner providing respondent with prompt written notice of any such claims and/or law suits for reimbursement.

7. Public Aid

The Illinois Department of Public Aid is frequently another source of payment for disputed medical bills. If the respondent has notice of payments by the Illinois Department of Public Aid, its name must be placed on the settlement draft. IDPA has a statutory lien and can recover from any entity who has notice of the lien but does not honor it. Medical bills paid by Public Aid are usually paid at a much lower rate than could be achieved by the workers’ compensation carrier. Moreover, Public Aid will usually agree to a substantial discount to compromise the lien. The net result is that medical bills can be compromised for a fraction of what the bills would cost if paid directly by the workers’ compensation carrier.

8. Depositions

Forcing the petitioner to proceed with the deposition of the offending physician can be helpful in the appropriate case. Chiropractors regularly continue treatment of their patients even though their own tests reveal minimal, if any, residuals. In the appropriate situation, a deposition

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of the offending provider can provide ammunition to defeat the reasonableness of the treatment.

9. Provider Compromises

In disputed cases, medical providers will frequently agree to compromise medical bills to insure some payment.

10. Pre-Trial

Depending on the arbitrator, a pre-trial can be a very persuasive way to convince the opposition to end treatment or compromise medical bills. The determination of whether a pre-trial would be effective depends on the particular arbitrator and the facts of the case.

11. Trial

The arbitrator’s decision to award or deny excessive treatment will be based on the following:

• The arbitrator’s own personal bias for or against the type of treatment involved.

• The medical provider’s reputation with the arbitrator for excessive treatment.

• The length of treatment in that particular case, and the petitioner’s improvement as a result of the treatment.

• The credibility of the treating or examining physician used to dispute the continuing

treatment.

• The credibility of the petitioner. The arbitrator’s personal bias against the particular chiropractor involved and the credibility of the opposing medical doctor are of utmost importance in evaluating the likelihood of success in denying excessive medical treatment. For example, arbitrators vary significantly in their views of chiropractors. Some have no hesitation to deny chiropractic treatment beyond six to twelve weeks. The arbitrator’s opinion about the examining doctor is just as important as the arbitrator’s opinion of the allegedly offending provider.

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III. CASE LAW

A. Home Modification

Zephyr, Inc. v. Industrial Comm=n, 215 Ill. App. 3d 669, 576 N.E.2d 1, 159 Ill. Dec. 332 (1st Dist. 1991), modified, reh=g denied, remanded, 1991 WL 137387 (1st Dist. July 26, 1991) held that despite the lack of explicit statutory language in section 8(a) referring to home modification, a fair reading of the statute does not preclude such compensation. The Court held that such provision is consistent with the statute=s general purpose of fully compensating employees for work-related injuries. The Court affirmed the Commission=s order of home modifications within the meaning of section 8(a). The petitioner received an award ordering the respondents to pay $275,491 to remodel claimant=s home. The Court modified its decision upon denial of the rehearing petition on July 26, 1991 remanding the matter to the Commission to establish a procedure for payment of the monies to the claimant to remodel his home.

B. Two Doctor Rule

Rerak v. Syntronic Instruments, 93 WC 19794, 98 IIC 0650 (June 30, 1998) B Where one of petitioner=s first two choices of physicians retired, and petitioner then sought treatment from a substitute physician, that substitute physician was still within petitioner=s two choices of treating doctors and referrals. See Courier v. Industrial Comm=n, 282 Ill. App. 3d 1, 668 N.E.2d 28, 217 Ill. Dec. 843 (5th Dist. 1996). Oscar v. School District #203, 97 WC 8862, 99 IIC 0792 (Aug. 13, 1999) B The emergency room and any physicians to whom the emergency room referred the petitioner do not constitute a Achoice of physician@ by the petitioner. Davis v. Baskin Clothing Co., 92 WC 52171, 95 IIC 0796 (July 7, 1995) B The Industrial Commission held that a specialist who treated the claimant was within the chain of referral of the petitioner=s first physician even though the referring physician did not specify the second physician by name. The first physician advised the petitioner to see a particular specialist but did not name the specialist. Despite that fact, the Industrial Commission held that the second physician was within the chain of referral. Berschinski v. Industrial Comm=n, Ill. Cir. Ct. Cook County, 94 L 50076 (May 17, 1995) B The circuit court held that the petitioner=s treating doctor was his second choice of physician where the petitioner chose a doctor from a list provided by the insurance carrier and was not uncomfortable about the doctor=s treatment. Adams v. Industrial Comm=n, 245 Ill. App. 3d 459, 614 N.E.2d 533, 185 Ill. Dec. 399 (5th Dist. 1993) B Petitioner was entitled to TTD through the date of release despite seeking treatment

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from a third choice physician at his own expense. The Court required the claimant to pay for medical expenses after exceeding his employer-paid treatment choices under section 8(a).

C. Travel Expenses

Governor=s Travel Control Board B The Governor=s Travel Control Board, created pursuant to 30 ILCS 105/12-1 establishes the mileage reimbursement rate utilized by the Industrial Commission. That rate is presently 322 cents per mile. Effective July 1, 2001, the rate goes to 342 cents per mile. General Tire & Rubber Co. v. Industrial Comm=n, 221 Ill. App. 3d 641, 582 N.E.2d 744, 164 Ill. Dec. 181 (5th Dist. 1991) ruled on travel expenses related to petitioner=s care by a treating physician. The petitioner travelled approximately 100 miles to treat with his physician. The Commission found it was reasonable and necessary for the petitioner to travel and included $1,588 in medical expenses for travel. In affirming the Commission=s ruling, the Court noted that the doctor had been petitioner=s treating physician since 1984 and was familiar with petitioner=s condition and medical history. The Court found that it was reasonable for the petitioner to seek the medical care from someone he knew and trusted. Furthermore, there was no evidence presented showing that there was any other surgeon in the area that would treat the petitioner with surgery. The only orthopedic surgeon in the area gave testimony that the surgery was not necessary. The Court found that it was reasonable for the petitioner to seek treatment from someone who was willing to perform surgery to relieve his pain. The Courts are willing to award travel expense for a petitioner seeking treatment from a physician who has cared for the plaintiff for some time. Plunk v. Arkansas Best Freight, 96 WC 17034, 98 IIC 1163 (Dec. 7, 1998) B A reasonableness standard applies to the determination of whether a claimant is entitled to expenses for traveling to see a doctor. In the Plunk case, the petitioner drove 60 miles one way to obtain treatment for a low back injury. Travel expenses were awarded. Fraser v. Northern Illinois Univ. Police Dept., 94 WC 8704, 98 IIC 0444 (May 7, 1998) B The Industrial Commission awarded travel expenses to a petitioner who undertook, at respondent=s request, a course of treatment by physicians chosen by respondent. Petitioner was compensated for mileage incurred in attending the treatment with these various physicians chosen by respondent. Kosinski v. Mobil Chemical Co., 92 WC 38112, 92 WC 38114, 99 IIC 0794 (Aug. 13, 1999) B Local mileage is not normally deemed to be a reasonable and necessary medical expense under section 8(a). Where the treatment is available in the petitioner=s hometown, the mileage is not reimbursable. Shehorn v. State of Illinois B Illinois State Police, 86 WC 1354, 95 IIC 0425 (Apr. 3, 1995) B The Commission denied petitioner=s travel expenses to his treating physician even though the petitioner traveled a total of 8,000 miles where each one way trip was 12 miles.

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Primozic v. Firestone Tire & Service Centers, 92 WC 50646, 95 IIC 0200 (Feb. 15, 1995) B The Industrial Commission held that travel expenses which arose from the claimant=s referral to a work hardening facility were reimbursable.

D. Finance and Collection Charges

Shannon v. Baldwin Associates, 80 WC 45317, 95 IIC 0008 (Jan. 4, 1995) B The Industrial Commission denied the petition seeking payment of finance charges on medical expenses. Gibson v. Sirloin Stockade, 96 WC 6659, 99 IIC 0745 (July 30, 1999) B Finance and collection charges are not covered under section 8(a) of the Act and therefore cannot be awarded by the Industrial Commission.

E. Reasonable and Necessary Charges

General Tire & Rubber Co. v. Industrial Comm=n, 221 Ill. App. 3d 641, 582 N.E.2d 744, 164 Ill. Dec. 181 (5th Dist. 1991) held that challenges to medical expenses as being reasonable and necessary require the application of a reasonableness standard. Section 8(a) is limited to expenses which are reasonably required to cure or relieve from the effects of the accidental injury. The Court held that a respondent is required to pay for medical expenses which are usual and customary for similar services in the community where the services are rendered. The respondent, in the instant case, provided no clear evidence that the doctor=s charges were unreasonable. Challenges to the reasonableness of physician or hospital charges will require evidence that the charges were not usual and customary for similar services in a community where the services were rendered. McLain v. Martin Cement Co., 94 WC 3550, 95 IIC 0626 (May 30, 1995) B The Industrial Commission held that the Commission=s award of the expense of a TENS unit was justified even though the treating physician admitted that the TENS unit would only be successful as a placebo. There was no physiological reason for it to work and would only help if the petitioner thought it was going to work. Despite that fact, the Industrial Commission held that the bill was reasonable and necessary. Lakotich v. Fluor Construction, 93 WC 13756, 98 IIC 0712 (July 9, 1998) B There is a rebuttable presumption that paid bills are inherently reasonable. To defeat the award of paid bills, the respondent must offer evidence to rebut this presumption. Harbecke v. Borden, Inc., 93 WC 66724, 98 IIC 1001 (Oct. 15, 1998) B The Industrial Commission regularly denies reimbursement for medical expenses incurred by the petitioner where the petitioner had no prescription for such services. The petitioner=s claim for reimbursement for a mattress and box spring was denied. (See also 98 IIC 0619, glove and salve expenses denied, 99 IIC 0584, physical therapy expenses denied.)

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F. Direct Action by Medical Providers

Piller v. Weippert, 260 Ill. App. 3d 677, 633 N.E.2d 174, 198 Ill. Dec. 712 (2d Dist. 1994) B The Appellate Court held that the physician who treated the injured employee was not foreclosed from pursuing an action in circuit court against the employee for amounts unpaid by the employer. The petitioner argued that the Industrial Commission=s award was limited to reasonable and necessary expenses by the Industrial Commission and, thus, precluded the chiropractor from pursuing the bills. The petitioner also argued that the Physician=s Lien Act specifically exempted liens for services rendered on the Illinois Workers= Compensation Act. The Illinois Appellate Court rejected the petitioner=s argument and stated that the physician could pursue the bills under a separate civil action against the petitioner. The Court further stated that even if the Industrial Commission had made a ruling as to the reasonableness and necessity of the bills, the chiropractor was not bound by that decision as he was not a party to the proceeding.

G. Admissions of Liability

Jewel Tea Co. v. Industrial Comm=n, 39 Ill. 2d 180, 233 N.E.2d 557 (1968) B The Illinois Supreme Court held that payment of medical benefits cannot be interpreted to mean an admission of liability for the claimant=s disability.

H. Reimbursement

Fencl-Tufo Chevrolet, Inc. v. Industrial Comm=n, 169 Ill. App. 3d 510, 523 N.E.2d 926, 120 Ill. Dec. 15 (1st Dist. 1988) B The petitioner=s medical bills were paid by the State of Michigan because the respondent refused to pay them. The Court held that the ultimate responsibility for the bills was that of the respondent and that it was required to reimburse the State of Michigan for those medical expenses. Odie v. Industrial Comm=n, 88 Ill. 2d 514, 431 N.E.2d 374, 59 Ill. Dec. 89 (1982) B The Illinois Supreme Court held that the Industrial Commission=s refusal to order payment of medical expenses for the claimant=s surgery was not inconsistent with its finding that at the time of the surgery, the petitioner was temporarily totally incapacitated. It reasoned that it was entirely possible that a person could still be recovering from an injury and yet not need further treatment.

I. Services Provided by Spouse or Significant Other

Rousey v. Industrial Comm=n, 224 Ill. App. 3d 1096, 587 N.E.2d 26, 167 Ill. Dec. 144 (4th Dist. 1992) denied a wife=s request for maintenance expenses despite support from Dr. Eilers. The claimant required supervision akin to what one would provide a child. The petitioner suffered a serious brain injury but recovered and was self-sufficient to the extent he could attend to his basic needs, get about the community on his own, and feed and clothe himself without assistance. He could drive, hunt and perform limited routine household chores and interact with his children to a limited extent. The Court found that claimant=s spouse provided no medical

E-31

assistance. In denying the wife=s claim for maintenance expenses, the Court held that in the absence of medical care or active attendance to claimant=s basic needs, the Commission=s determination that the claimant=s spouse was performing household duties which are not compensable within the meaning of the Act is not against the manifest weight of the evidence. Burd v. Industrial Comm=n, 207 Ill. App. 3d 371, 566 N.E.2d 35, 152 Ill. Dec. 507 (3d Dist. 1991) involved an appeal by the claimant from an Industrial Commission decision which was affirmed by the trial court denying claimant fees for services rendered by his fiancée pursuant to section 8(a) of the Act. Claimant was injured in 1986 and rendered a paraplegic. Unrebutted medical testimony established that the claimant could not exist in his house without assistance provided by either a home care service or a Asignificant other.@ This was due to the need for assistance in case of an emergency, and assisting with bath and showers. The claimant sought compensation for his fiancée=s services. At arbitration, an award was made for expenses for home care service, but the arbitrator found that the fiancée was not entitled to payment for hours spent caring for the claimant, since she had occupied the residence with the claimant prior to the injury and continued to work full-time after his injury. The Appellate Court relied on Dr. Szymke=s testimony and held that many of the tasks performed by the fiancée were necessitated by claimant=s injury, and they were not considered ordinary household duties. They noted that the fiancée was not the claimant=s spouse, and therefore, compensation for performance of housekeeping services was not automatically barred. The evidence that the claimant required 24 hour per day care was unrebutted in the record. Based on these facts, the Court held that this petitioner was entitled to payment for home care services rendered by his fiancée.

J. Copying Expenses

Clayton v. Ingalls Memorial Hosp., 311 Ill. App. 3d 135, 724 N.E.2d 222, 243 Ill. Dec. 913 (1st Dist. 2000) B The petitioner issued an Illinois Industrial Commission subpoena duces tecum pursuant to section 16 of the Workers= Compensation Act to a treating hospital for the hospital to produce copies of all its original medical records and itemized bills before a Commission arbitrator. The petitioner tendered a $25.00 check for statutory witness and mileage fees. The defendant hospital refused to comply with the subpoena, demanding copying charges of $1.00 per page, $17.00 retrieval fee, and $20.75 for postage. The Appellate Court held that only a $20.00 per day witness fee and 20 cents per mile travel fee were required by section 16 of the Act. The subpoenaing party is not required to pay any per page copy fees.

K. Prospective Expenses

Plantation Manufacturing Co. v. Industrial Comm=n, 294 Ill. App. 3d 705, 691 N.E.2d 13, 229 Ill. Dec. 77 (2d Dist. 1997), appeal denied, 178 Ill. 2d 595, 699 N.E.2d 1037, 232 Ill. Dec. 852 (1998) B The Industrial Commission can award prospective medical benefits for reasonable and necessary medical services. Only the necessity of the medical treatment or procedure must have been incurred prior to arbitration, not the specific medical procedure or treatment itself.

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E-32

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E-33

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E-34

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E-35

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E-36

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E-37

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James M. Voelker - Partner

Jim has spent his entire legal career with Heyl Royster. He started in the mailroom in 1976 and eventually worked as a law clerk for the firm during law school. In 1986, he joined the firm as an attorney in his hometown of Peoria and became a partner with the firm in 1996. Jim concentrates his practice in the areas of workers' compensation and personal injury litigation, representing employers, insurers and self-insureds. He has tried over 200 workers' compensation cases and numerous civil cases throughout the State of Illinois. He handles all aspects of workers' compensation litigation including trials and appeals. Jim is the author of various articles and speeches prepared and presented for business groups and employers in the State of Illinois. Jim is also the author of CompCalc, Illinois Workers' Compensation software, that is used throughout the state of Illinois by insurance companies, employers, attorneys, and several arbitrators of the Illinois Workers' Compensation Commission to calculate workers' compensation benefits. Jim is also the founder of IllinoisComp.com, a website devoted to workers' compensation issues in Illinois, and MedicareApproval.com, a web-site devoted to issues related to the Medicare Secondary Payer Statute. Jim was also a co-founder of the Heartland Free-Net. Significant Cases • S & H Floor Covering, Inc. v. Workers'

Compensation Comm'n, 373 Ill. App. 3d 259 (4th Dist. 2007) Court opened the door for giving "an extra degree of scrutiny" to the Commission's decision where the Commission makes credibility determinations regardless of the arbitrator's findings.

• Farris v. Industrial Comm'n, 357 Ill. App. 3d 525 (4th Dist. 2005) Held that in cases where the employee loses five or more days of work during the 52 weeks prior to the injury, the lost time (to the extent not due to the fault of the employee) should be deducted from the wage calculation.

Selected Publications • Chapter 7 - "Medicare Secondary Payer

Statute," Illinois Institute of Continuing Legal Education, Illinois Workers' Compensation Practice Handbook

• Chapter 12 - "Social Security Disability Offsets," Illinois Institute for Continuing Legal Education, Illinois Workers' Compensation Practice Handbook

• Website Editor: http://www.IllinoisComp.com • Website Editor:

http://www.MedicareApproval.com • Author: CompCalc Illinois Workers'

Compensation Software, http://www.compcalc.com

Professional Recognition • Martindale-Hubbell AV Rated

Professional Associations • Peoria County Bar Association (Co-Chair of

Publications Committee) • Illinois State Bar Association • American Bar Association • Abraham Lincoln American Inn of Court

Court Admissions • State Courts of Illinois • United States District Court, Central District of

Illinois Education • Juris Doctor (With Distinction) University of

Iowa, 1986 • Bachelor of Science-Business Administration

(Cum Laude), University of Illinois, 1983

Learn more about our speakers at www.heylroyster.com