Governor Quinn press release on insurance rate reduction; Reminder on attorneys' fees

Governor Quinn press release on insurance rate reduction  

Governor Quinn: Historic Workers’ Compensation Reform Saved Illinois Employers $315 Million
Recommended Rate Has Dropped 13.3 Percent Since Governor’s 2011 Reforms;
Latest Proposed Decrease of 4.5 Percent Will Help Ensure Fair and Honest Wages

CHICAGO – Governor Pat Quinn today announced that the National Council on Compensation Insurance (NCCI) has filed a request for an overall reduction of 4.5 percent in workers' compensation rates from the Illinois Department of Insurance (DOI).

 

Since the 2011 Workers’ Compensation Reform law championed by Governor Quinn, the department estimates that overall savings have reached $315 million for the Illinois Workers’ Compensation system. With the implementation of the proposed rate reduction, the advisory rate level will have dropped 13.3 percent below the advisory rate level prior to the changes sought and enacted by the governor. 

 

Today's announcement is part of Governor Quinn's commitment to strengthen Illinois’ business climate and drive more economic growth while ensuring that all workers are protected, treated fairly and receive the compensation they deserve. “When I came into office, Illinois had one of the most burdensome workers’ compensation systems in the country,” Governor Quinn said. “We turned that statistic around and delivered real reform that is saving hundreds of millions of dollars for our businesses and keeping the system honest to our workers. This rate review will ensure the state has a responsible advisory rate that supports business growth and protects workers.”

 

Officials estimate the latest proposed reduction in workers’ compensation advisory and loss cost rates could result in overall reduction in premiums of up to $110 million. This estimate is based on the credit rating organization A.M. Best’s calculations as they reviewed 2011 premiums. Individual rates for businesses may vary based on claims experience, payroll, and other factors. 

 

With the implementation of the proposed rate reduction, the advisory rate level will have dropped 13.3 percent below the advisory rate level prior to the 2011 Workers’ Compensation Reform Legislation. The overall premium impact based on the advisory rates is approximately $315 million. Individual companies may reflect different rate changes.

 

The NCCI advisory rates determine the premiums businesses pay for workers’ compensation insurance. Department of Insurance (DOI) actuaries must confirm the calculations submitted by NCCI, a process that typically takes about 60 days. 

 

“We’re pleased about the proposed rate reduction and look forward to the review process to confirm the results,” said DOI Director Andrew Boron. “The lower rate would benefit Illinois employers with cost savings.” 

 

If the department accepts the filing to be effective January 1, 2014, employers should contact their insurance agent prior to their 2014 renewal date to determine the impact on their premium. 

 

Since taking office in 2009, Governor Quinn made workers’ compensation reform and strengthening Illinois’ business climate a top priority. He launched a working group on the issue, proposed legislation and worked with the General Assembly to enact historic reform that is allowing businesses to save hundreds of millions of dollars, which in turn supports economic growth.

 

Earlier this month, Governor Quinn signed three laws that fight questionable practices to protect Illinois workers’ paychecks. House Bill 2649, House Bill 923 and House Bill 3125 deal with the misclassification of workers and the attempts of employers to avoid paying state employment taxes and premiums.

Illinois Workers' Compensation Preferred Provider Program – WCPPP Update

HFN has been approved as a Workers' Compensation Preferred Provider Program Administrator (WCPPPA) by the Illinois Department of Insurance.

The HFN WCPPP Solution
Employers now have, for the first time, the ability to direct their injured workers into a “Workers' Compensation Preferred Provider Program” for their medical treatment. HFN is uniquely positioned and ready to help you realize the benefits and savings associated with utilizing a WCPPP. The final rules have been published and became effective March 4, 2013. HFN is ready to assist you in understanding these regulations and how they can benefit your organization.   

We are available to discuss designating HFN as your WCPPP. HFN is ready to provide comprehensive or customized solutions that can lower your workers’ compensation costs, improve employee health, reduce indemnity and increase productivity for your entire workforce. To augment our WCPPP HFN has the largest Coordinated Occupational Health Network in Illinois (COP®) with 24 hour coverage and Return to Work initiatives to partner with your healthy workforce goals.

For more information about HFN’s WCPPP, Work Comp Direct and other workers comp services  please contact Guy Swanson at (630) 990-8609 or SwansonG@hfninc.com. Additional information is also available at HFN’s WC blog: http://ilwcreformguide.blogspot.com/

JCAR's Dept of Insurance 2013 Update

The General Assembly's Joint Committee on Administrative Rules' (JCAR) January meeting is currently scheduled for Tuesday, January 8, 2013.  The Committee's meeting will take place at 9:00am in Room D-1 of the Stratton Office Building in Springfield, Illinois.

Pending Department of Insurance Rulemakings

The current meeting agenda includes the IDOI's workers' compensation preferred provider program (WC PPP) administrative code updates.  Our previous update included details surrounding the established JCAR approval process.

• Preferred Provider Programs (PDF Page 286)
• 50 Ill. Adm. Code 2051
• Proposed 4/27/2012
• Pending: on JCAR January meeting agenda 

 

Approved Department of Insurance Rulemakings

In addition to this proposed-rulemaking, the December 28 Illinois Register contains four approved IDOI updates to the Illinois Administrative Code.  All four of the rulemakings are effective December 17, 2012. 

• Accident and Health Expense Reporting (PDF Page 676)
• 50 Ill Adm Code 2043
• Proposed 8/3/12
• Effective 12/17/2012
• Insurance Data Reporting Requirements (PDF Page 686)
• 50 Ill Adm Code 4203
• Proposed 2/3/2012
• Effective 12/17/2012
• Internal Security Standard and Fidelity Bonds (PDF Page 612)
• 50 Ill Adm Code 904
• Proposed 6/22/12
• Effective 12/17/2012 
• Medical Professional Liability Database (PDF Page 619)
• 50 Ill. Adm. Code 928
• Proposed 7/6/12
• Effective 12/17/2012

2012 NCCI IL Statutory Data Report & Advisory Rates

A couple of additional Illinois Department of Insurance updates...

The IDOI recently posted NCCI's 2012 Rating Organization Statutory Data Submission on its website.  NCCI is required by the Illinois Insurance Code to submit the following information annually: 

1. Indemnity and medical paid and paid+case losses for each of the past 10 years, by policy year
2. Medical payments for each of the past 10 years, by policy year
3. Indemnity claim Information including cumulative paid+case losses, by policy year by calendar year of development. This includes losses and frequency of claims in medical only, permanent partial disability, permanent total disability, temporary total disability and fatalities 
4. Frequency and severity by injury type
5. Aggregate (indemnity+medical) paid+case losses, and claim count by class of employee

The IDOI also confirmed that it had completed its review and filed NCCI's proposed 3.8% reduction for the WC Advisory and Lost Cost rates effective 2013 (see our previous overview of the filing & the IDOI's August press release announcing the rate review).

Department of Insurance Payment Compliance Bulletin

The Illinois Department of Insurance released a compliance bulletin reminder to all companies licensed/approved to provide workers' compensation coverage in Illinois.  The bulletin covers provider notification and payment requirements included in Sections 8.2(d)(2) & (3) of HB 1698/PA 97-18.

Section 8.2(d)(2) 

If the claim does not contain substantially all the required data elements necessary to adjudicate the bill, or the claim is denied for any other reason, in whole or in part, the employer or insurer shall provide written notification, explaining the basis for the denial and describing any additional necessary data elements, to the provider within 30 days of receipt of the bill.

 

Section 8.2(d)(3) 

In the case of nonpayment to a provider within 30 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. Any required interest payment shall be made within 30 days after payment.
 

The Illinois Workers' Compensation Commission also released a notice regarding this IDOI bulletin. 

IWCC & JCAR December Meeting Schedule

With just over a month remaining in 2012, here are the remaining scheduled IWCC and JCAR meetings for December.

Illinois Workers' Compensation Commission

December 5, 2012 

Self-Insurers Advisory Board

• Thompson Center, 100 W Randolph Street, Chicago
• 10:30am in the 8th Floor Chairman's Conference Room
• Self-Insurers Advisory Board meeting agenda

Workers' Compensation Medical Fee Advisory Board

• Thompson Center, 100 W Randolph Street, Chicago
• 1:00pm in Room 9-039 (9th Floor)
• The agenda for the Advisory Board's December meeting contains several updates including
• a report from Glen Boyle
• a discussion on compounded drugs
• updates on the Rules and Commission
• WC Medical Fee Advisory Board meeting agenda

Joint Committee on Administrative Rules

December 11, 2012

• Michael A Bilandic Building, 160 N LaSalle St, Chicago
• 11:00am in Room 600C
• As of this morning, the December JCAR agenda includes
• One (1) Department of Insurance-proposed rulemaking concerning a Medical Malpractice Data Base
• Medical Malpractice Data Base (50 Ill. Adm. Code 928) proposed 7/6/12 (PDF Page 205)
• No IWCC-proposed rulemakings
• JCAR December meeting agenda

 

WC PPP: Pending Second Notice

As part of the JCAR's First Notice process for the new WC PPP rules, all interested parties were permitted to submit public comments about the proposed regulatory changes to the IDOI up until the June 11, 2012 deadline.

At this point, JCAR has not addressed the modifications to 50 Ill. Adm. Code 2051 with the IDOI at its monthly meetings, and, as of this post, the WC PPP rules are not scheduled on the agenda for the December JCAR meeting.

• Preferred Provider Programs (50 Ill. Adm. Code 2051) proposed 4/27/2012 (PDF Page 286)

Updated IDOI Administrative Code Changes

The next meeting of the General Assembly's Joint Committee on Administrative Rules (JCAR) is currently scheduled for November 13, 2012. Both the Illinois Workers' Compensation Commission (IWCC) and Illinois Department of Insurance (IDOI) have several proposed changes and updates to the Administrative Code pending with JCAR.

Since our previous pending-Administrative Code post, the Department of Insurance moved several additional rulemakings to JCAR's Second Notice.

 

Illinois Workers' Compensation Commission

No additional updates since our previous post. (Click here for our previous post covering both the JCAR process and the IWCC proposed rules status updates.)

 

Illinois Department of Insurance (updated)

JCAR Second Notice

The following proposed updates moved to JCAR's Second Notice review period. JCAR will consider these rules at its November meeting.

• Insurance Data Reporting Requirements (50 Ill Adm Code 4203) proposed 2/3/12 (PDF Page 9)
• Internal Security Standard and Fidelity Bonds (50 Ill Adm Code 904) proposed 6/22/12 (PDF Page 56)
• Accident and Health Expense Reporting (50 Ill Adm Code 2043) proposed 8/3/12 (PDF Page 24)

Pending Second Notice

As part of the JCAR's First Notice process for the new WC PPP rules, all interested parties were permitted to submit public comments about the proposed regulatory changes to the IDOI up until the June 11, 2012 deadline.

 

At this point, JCAR has not addressed the modifications to the existing rules

(50 Ill. Adm. Code 2051) with the IDOI at its monthly meetings, and, as of this post, the IDOI is not scheduled on the agenda for JCAR’s next meeting on November 13, 2012.

 

• Preferred Provider Programs (50 Ill. Adm. Code 2051) proposed 4/27/2012 (PDF Page 286)

 

IL Administrative Code Status Updates

Both the IWCC and IDOI are in the process of updating their rules and regulations through the Illinois General Assembly's Joint Committee on Administrative Rules (JCAR).  If you are unfamiliar with the Illinois rulemaking process, JCAR provides a succinct overview of the process on its website. 

The following is a status update on pending IWCC and IDOI additions and modifications to the Illinois Administrative Code:

Illinois Workers’ Compensation Commission

JCAR "Certificates of No Objection"

JCAR issued "Certificates of No Objection" at its September 11, 2012 meeting for two separate IWCC administrative code updates. The IWCC can now adopt the rules by filing them with the Secretary of State. The effective dates will appear when published in a future Illinois Register.

• Miscellaneous (50 Ill Adm Code 7110) proposed 3/2/12
• Incorporates all of HB 1698/Public Act 97-18’s modifications and updates to the medical fee schedule reimbursement and methodology rules. (See our previous post with an outline of the major updates)
• Alcohol and Drug Sample Collection and Testing (50 Ill Adm Code 9140) proposed 6/15/12 (PDF document page 75)

JCAR Second Notice

The following proposed updates moved to JCAR's Second Notice review period. JCAR will consider these rules at its November 13, 2012 meeting.

• Arbitration (50 Ill Adm Code 7030) proposed 8/17/12 (PDF document page 72)
• Miscellaneous (50 Ill Adm Code 7110) proposed 8/17/12 (PDF document page 79)
• Incorporates the updates to the physician-dispensed pharmacy reimbursement methodology (see our previous update for more information)
• Commission Review Board Procedures (50 Ill Adm Code 7500) proposed 8/17/12 (PDF document page 96)

JCAR October Meeting Reminder

The Illinois General Assembly's Joint Committee on Administrative Rules' (JCAR) monthly meeting is scheduled for Tuesday, October 16, 2012.  The meeting is scheduled for 11:00am in Room 600C at the Michael A Bilandic Building (160 North LaSalle Street, Chicago).
 
The October agenda does not currently include updates from either the Illinois Workers' Compensation Commission or Department of Insurance.

We will provide a status update on the proposed IWCC and IDOI Administrative Code updates early next week.  

National WC Premium Rate Ranking Study

The Oregon Department of Consumer and Business Services' 2012 Oregon Workers’ Compensation Premium Rate Ranking Summary is now available.  This biannual report ranks the WC premiums of all 50 states and the District of Columbia.

Illinois is ranked as the 4th highest premium in 2012 rankings, at 151% of the median states of Georgia & New Mexico, down one spot from 3rd highest premium in the 2010 study. 

The workers' compensation premium rates used for the study are from 1/1/2012, or late 2011 depending on the state, so they do not appear to include any of NCCI's current recommended rate changes for various states.  Our previous post detailed the announcement that the Illinois Department of Insurance is currently reviewing NCCI's recommended 3.8% decrease to the IL workers' compensation advisory and loss cost rates.

Illinois-Specific WC Statistics

We received several inquiries regarding additional Illinois-specific WC statistics since last week's NCCI Illinois State Advisory Forum presentation post. 
 
In addition to workers' compensation industry research organizations (e.g., NCCI, WCRI, etc.), the IL Workers' Compensation Commission (IWCC), IL Department of Insurance (IDOI), and IL Department of Public Health (IDPH) have annual reports posted on their respective websites. These reports detail numerous components of Illinois' workers' compensation claims and departmental activities.
 

Illinois Workers' Compensation Commission

The most recent Fiscal Year Annual Report (FY 2011) is located under the Annual Report tab on the IWCC website.  Currently, its website contains reports dating back to Fiscal Year 1995.

In addition to its Annual Reports, the IWCC also provides links to other entities for workers' compensation statistics.
 

Illinois Department of Insurance

The IDOI publishes two WC-specific annual reports. 

• The 2012 Annual Report, submitted to the Governor's office on 6/29/2012, details the IDOI Fraud Unit's departmental activities.
• NCCI's 2011 Illinois Workers' Compensation Advisory Organization Data is submitted to the IDOI, and published on its website, on an annual basis. 

Illinois Department of Public Health

The IDPH publishes reports on both fatal and non-fatal occupational injuries under the Epidemiologic Studies tab on its website.

IL WC PPP Status Update (Part 2)

IDOI’s Terminology Changes

When the IDOI submitted its proposed WC PPP regulatory modifications, it updated or clarified the preferred provider program terminology:

Health Care Preferred Provider Program (HC PPP) Administrator

Formerly referred to as the Preferred Provider Program Administrator (PPA). The HC PPP is a new term for the current/traditional PPOs and PPAs, which applies to both group health and workers’ compensation (no WC employer direction) networks. The IDOI already updated its website to reflect this change in terminology:
Approved Health Care Preferred Provider Program Administrators
Provisionally Approved Health Care Preferred Provider Program Administrators ("Provisionally approved" refers to previously approved companies with renewal applications submitted to the IDOI).

Workers’ Compensation Preferred Provider Program (WC PPP) Administrator

Created by HB 1698/Public Act 97-18. This term refers to the new workers’ compensation designation that allows employer direction into an IDOI-Approved WC PPP network.
Approved Workers’ Compensation Preferred Provider Program Administrators

IWCC’s WC PPP Notification Form

For any employer with a designated IDOI-approved WC PPP, an employee must receive the IWCC’s official Notice of Preferred Provider Program for Workers’ Compensation Medical Care. That official form is available on the IWCC website in either English or Spanish. All IWCC forms, including optional WC PPP notification forms, are located in the Forms Section of the IWCC website.


Click here for Part 1 of the WC PPP Status Update (IDOI-proposed regulatory changes)

Illinois-Specific NCCI Presentations

The National Council on Compensation Insurance, Inc. (NCCI) has a couple of Illinois-specific presentations/reports currently available on its website.

On 9/13/2012, NCCI presented its complete overview of the Illinois workers' compensation environment.  The Illinois State Advisory Forum presentation provides a detailed comparison of national workers' compensation and employment trends to the economic conditions of the workers' comp industry in Illinois. 

• In August, the Illinois Department of Insurance announced it had begun its roughly 60 day calculation confirmation process after NCCI filed for an overall 3.8% decrease to the workers' compensation advisory and loss cost rates.
• This IWCC release contains an overview from the NCCI report regarding the potential rate reductions for several employer categories.

In addition to the 2012 Illinois State Advisory Forum, NCCI has a parallel report and  presentation that research the impact of the introduction of the Illinois workers' compensation fee schedule in 2006.

IL WC PPP Status Update (Part 1)

IDOI-Approved WC PPPs

Beginning shortly after the passage of HB 1698/Public Act 97-18 in 2011, the IDOI began to accept and review applications for the new Workers' Compensation Preferred Provider Programs (WC PPPs).

On January 1, 2012, the IDOI listed three networks, including HFN, as IDOI-Approved Workers’ Compensation Preferred Provider Program Administrators. The application review and approval process was based on the requirements detailed in HB 1698/Public Act 97-18.

Currently, there are six companies that appear on the IDOI’s Approved WC PPP Administrator list. All current and future WC PPP Administrators will need to show compliance with the WC PPP regulatory updates to the Illinois Insurance Code, once those updates are finalized and implemented.

 

Illinois Insurance Code updates

The definitions, rules, and regulations for IL WC PPPs are not finalized as of this post.

The Illinois Department of Insurance (IDOI) submitted its proposed revisions of the IL Insurance Code to the Legislature’s Joint Committee on Administrative Rules (JCAR), and JCAR published those proposed changes on April 27, 2012 in Volume 36, Issue 17 of the Illinois Register (beginning with PDF page 286).

As part of the JCAR process, all interested parties were permitted to submit public comments about the proposed regulatory changes to the IDOI up until the June 11, 2012 deadline. At this point, JCAR has not addressed the modifications to the existing 50 Ill. Adm. Code 2051 with the IDOI at any of its monthly meetings, and, as of this post, the IDOI is not scheduled on the agenda for JCAR’s next meeting on October 16, 2012.

2012 IWCC & IDOI updates

There have been several IWCC & IDOI updates since our last post.

Governor Quinn announced the appointment of Andrew Boron as the new director of the Illinois Department of Insurance.

Governor Quinn also announced the appointments of three additional IWCC arbitrators:

• William Gallagher will handle former Arb. Tobin's call in Zone 2 (Quincy, Springfield, and Urbana).
• Douglas McCarthy will be based in Chicago and will serve at large where needed.
• Brandon Zanotti will handle the Chicago "TBA" call formerly handled by Arb. Dollison.

The IWCC announced yesterday that, due to arbitrator and commissioner confirmation hearings, arbitration will be limited this Friday, February 17, 2012.

On Friday, February 17, arbitrators and commissioners will appear before the Senate Executive Appointments Committee in Chicago for their confirmation hearings. Click here for more information on the hearings.  

In Chicago, arbitrators will conduct business from 8:30 - 10:30. At 10:30, Chicago arbitrators will stop business for the day with one exception: Arbitrator Thompson-Smith's 2:00 status call will be held.  

In Waukegan, Arbitrator Holland will handle pro se cases from 8:00 - 9:00 am. He will hold his status call from 9:00 - 10:00 am. At 10:00, he will leave for Chicago.  

All other downstate calls are cancelled for February 17. If your case is set for trial that day, please contact the arbitrator and the other party to reschedule.

Approved Workers' Comp Preferred Provider Programs (PPPs)

The Illinois Department of Insurance updated its Approved Workers' Compensation Preferred Provider Program Administrator List on its website.

HFN, Inc. as now listed as an approved Workers' Compensation Preferred Provider Program Administrator.

NCCI's Illinois Insurance Market Presentation

On Wednesday, November 30, the National Council on Compensation Insurance (NCCI) will present its findings concerning the state of both the Illinois and national workers' compensation insurance markets to the IWCC's Medical Fee Advisory Board.

In response to the passage of HB 1698/Public Act 097-0018, NCCI filed, and the Illinois Department of Insurance approved, an 8.8% decrease in the voluntary advisory insurance rates effective 9/1/11.  However, in September, NCCI requested a 3.5% increase for the 2012 rates. This Business Insurance article from October provides a general overview of the two rate changes.

The NCCI presentation is scheduled for 9:00am in Room 9-040 of the James R. Thompson Center.

IWCC Posts PPP Notification Form

HB 1698 contained several requirements for the creation of Illinois workers' compensation preferred provider programs (PPPs). One of those requirements was an employee PPP notification form promulgated by the Illinois Workers' Compensation Commission (IWCC). An employer with an Illinois Department of Insurance-approved PPP must provide an injured employee with the notification form at the first report of injury.

The IWCC Medical Fee Advisory Board approved a draft version of that form at its October 18 meeting, and the IWCC website now includes its PPP notification form.

Preferred Provider Program Basic Requirements:

In order for employers to implement the PPP direction of care process, HB 1698 lists two basic requirements:

1. The IWCC must promulgate a notification form that the employer will provide to an employee at the time of injury. This form is now available on the IWCC website. 
2. The PPP must be approved by the Illinois Department of Insurance (IDOI). HFN recently confirmed with the Illinois Department of Insurance (IDOI) that there are no approved or provisionally approved workers' comp PPPs. The IDOI has a link on their website of approved workers' compensation Preferred Provider Program Administrators. That list is the source for all approved workers' compensation PPPs in the state of Illinois, and currently it reads, "No Companies have been approved at this time." There is also a permanent link to the IDOI approved list located on the lower right of this blog under the heading Illinois Dept. of Insurance Registered Administrators.

We will continue to provide PPP updates as the IDOI finalizes its regulations and moves towards approving the preferred provider program applications currently under Department review.

No IDOI-Approved or Provisionally Approved PPPs

Since we have recently received several inquiries regarding "provisionally approved" workers' compensation preferred provider programs (PPPs), we felt the need for a brief clarification.

HFN confirmed with the Illinois Department of Insurance (IDOI) this morning that there are no applications that have been approved or provisionally approved for use as a Workers’ Compensation Preferred Provider Program.

The IDOI has a link on their website of Approved Workers' Compensation Preferred Provider Program Administrators.  That list is the source for all approved workers' compensation PPPs in the state of Illinois, and currently it reads, "No Companies have been approved at this time."  

There is also a permanent link to the list (Approved Work Comp PPPs) located on the lower right of this blog under the heading Illinois Dept. of Insurance Registered Administrators.

We will provide updates once the IDOI begins to approve PPP applications, but, for the moment, there are no approved (provisionally or otherwise) workers' comp PPPs in the state of Illinois.

IL Preferred Provider Programs (PPPs) Approval Process Update

There seems to be a growing consensus that the Illinois Department of Insurance (IDOI) approval process for the new workers’ compensation preferred provider programs (PPPs) could continue through the rest of 2011. Employers would have the ability to designate an IDOI-approved PPP in early 2012. This article from Business Insurance supports our recent conversations with the IDOI regarding the PPP approval timeframe.

After receiving comments from interested parties on its draft rule, the IDOI is currently reviewing and evaluating the comments in order to create the administrative rules that will finalize the criteria required for IDOI PPP approval. The timeframe is also dependent on the Joint Committee on Administrative Rules’ (JCAR) schedule. JCAR provides an overview of the IL rulemaking process on its website.

For networks, like HFN, currently awaiting final review in the IDOI’s PPP process, the release of the draft rule, and eventually the finalized administrative rules, is the final step towards establishing compliance with the IDOI and gaining its approval for their PPPs.