2014 Fee schedule rates will increase 1.52%; 7% lower than 2006

Medical fee schedule rates will increase 1.52% on January 1, 2014. If the fee schedule had tracked medical inflation, rates would be 30% higher than in 2006; instead, rates are 7% lower than 2006.

Section 8.2(a) of the Illinois Workers' Compensation Act provides that, each year, fee schedule rates shall increase or decrease by the percentage change in the Consumer Price Index-U (CPI-U) in the previous year.

The 2014 rates will be posted as soon as the vendor, Optuminsight, calculates them and obtains information about new and deleted codes. The rates are usually posted at the end of the year. We will give notice on our blog when the rates are online.

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.

Workers' Compensation Legislation Sent to Governor Quinn

HB 3390 (Sims/Mulroe) passed out of the General Assembly on Friday on a concurrence motion by the House (118-0-0). Senate Amendments 2 and 3 became the bill. The Senate approved the amendments 58-0-0.  The bill makes four changes to the Workers’ Compensation Act and is effective upon signing by the Governor.

1.  Elimination of handbook requirement

The bill directs the Commission to post its informational handbook on its website and removes the mandate that the Commission send a copy of the handbook to each injured worker who is the subject of an accident report.  This change represents an elimination of a $62,500 line item in the Commission’s FY14 budget.

2.  Elimination of $35 transcript fee paid by employers and employees to appeal cases

The bill eliminates the $35 fee paid by parties who appeal decisions from the Commission to the Circuit Court. Instead, parties who wish to appeal a Commission decision must file with the Commission a notice of the intent to appeal a decision to the Circuit Court. This change applies to all decisions by the Commission entered after the effective date of the bill.  It also ends an archaic and time-consuming cost calculation for the preparation of records. Remaining monies in the Transcript Deposit Fund will be transferred to the Injured Workers’ Benefit Fund, which is a fund dedicated to providing benefits to employees who have been injured at a workplace without workers’ compensation insurance.

3.  Requirement for Commission to obtain interpreters when necessary for settlement contracts

The bill requires the Commission to furnish language interpreters for petitioners who do not speak English, do not have an attorney, do not have their own interpreter, and are signing settlement contracts. 

4. Requirement for Arbitrators to demonstrate workers’ compensation expertise

Finally, the bill provides that all persons appointed to be Arbitrators must demonstrate their knowledge and experience with the Workers’ Compensation Act in writing.  It also eliminates erroneous references to the Personnel Code.  Pursuant to Public Act 97-719, all Arbitrators are appointed by the Governor with the advice and consent of the Senate.

To view the bill, go to: http://www.ilga.gov/legislation/billstatus.asp?DocNum=3390&GAID=12&GA=98&DocTypeID=HB&LegID=75259&SessionID=85

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/

IWCC Posts Updated Repricing Instructions

On January 24, the Illinois Workers' Compensation Commission posted its Instructions and Guidelines for Treatment On or After 9/1/11 to its website.  These instructions include all of the changes implemented in HB 1698/PA 97-18 and the subsequent rulemakings approved through the JCAR process.  

Previously, the Rules section on the IWCC website was updated with many of the updates and changes, but the Instructions and Guidelines section was pending.

The IWCC maintains all of these documents under the Medical Fee Schedule/FAQs section of its website.

1/23/2012 IWCC Board meetings

Both the Illinois Workers' Compensation Commission's Workers' Compensation Advisory Board and Commission Review Board meet on Wednesday, January 21, 2013.

The Workers' Compensation Advisory Board meets at 1PM in the 8th Floor Chairman's Conference room at the James R. Thompson Center in Chicago.  The agenda includes Commission and Legislative updates, Commission appointments, and a discussion on a possible pro se assistance program.  Friday's post included the IWCC's publication of its regulatory agenda update.

The Commission Review Board will also meet Wednesday in the Thompson Center's 8th Floor Chairman's Conference room at 10AM.  The current agenda includes a report by Carolyn Parks regarding communications involving IWCC Arbitrators.



 

IWCC 2013 Regulatory Agenda

In this morning's Illinois Register, the IWCC filed a regulatory agenda update for the Illinois
Insurance Regulations (50 Ill. Adm. Code 7100).

On Page 630 (PDF page 156) of the Illinois Register, the IWCC gives a general overview of its intentions to update both Sections 7100.100 and 7100.70 of the Insurance Regulations.  The IWCC notification lists the anticipated JCAR First Notice submission date as "undetermined."

Description: The Commission anticipates changes to two Sections of Part 7100 of its rules. Section 7100.100 sets forth the procedure for the enforcement of the insurance compliance provisions of Section 4 of the Workers' Compensation Act. This rule has not been updated since 1990 and there have been several significant amendments to Section 4 since that time, including the ability of the Commission to issue a work-stop order for an employer who has knowingly failed to provide workers' compensation insurance. In addition, Section 7100.100 does not include the minimum $10,000 fine for the knowing and willful failure or refusal to obtain workers' compensation insurance set forth in Section 4(d) of the Workers' Compensation Act and the applicability of such fine to corporate officers and directors, which is also set forth in Section 4(d) of the Act. Section 7100.70 sets forth the qualifications required to be approved as a self-insurer in Illinois, as well as the procedural aspects of the application process. This rule has not been updated since 1996. The rule will be updated in order ensure the integrity of the self-insurance program.

 

WC PPP Rulemaking Update

The General Assembly's Joint Committee on Administrative Rules met on January 8, 2012, and the Illinois Department of Insurance's WC PPP rulemaking was on the agenda.  JCAR voted to extend the review process by 45 days, and the updates to the Illinois Insurance Code will now appear on the JCAR's February meeting agenda.

JCAR will meet at 9:00am on February 5 at the Stratton Office Building in Springfield, IL to discuss the proposed rulemakings.

IWCC Arbitration Site Changes

The Illinois Workers' Compensation Commission sent out two reminders regarding arbitration site changes.  Effective in 2013, the Kewanee arbitration hearing site call moved to Rock Island, and the Geneva hearing site is moving back to the Kane County Courthouse effective 1/7/2013.

Rock Island (formerly Kewanee)

City Hall - Council Chambers
1528 Third Avenue
Rock Island, IL 61201

Geneva (effective 1/7/2013)

Kane County Courthouse
100 South Third Street
Geneva, Illinois 60134


The IWCC maintains the current list of all IWCC arbitration hearing sites on its website.  

IWCC Employer Insurance Coverage Form

The IWCC announced a new Request for Information on Employer's Insurance Coverage form is available.  This new form (Form IC46) is used when an individual needs information regarding an employer's workers' compensation insurance coverage.  The new form replaces Form IC42 (with the same name).

The IWCC announcement does differentiate between requesting employer insurance information and requesting an investigation into an uninsured employer.

Send the Request for Information (IC46) to Yvonna Castronova, Supervisor of the Information Unit. Upon receipt, the Information staff will research the available resources and send you a report on what was found.

If you wish to ask the Insurance Compliance Staff to investigate an employer you believe to be uninsured, contact Robert Ruiz, Manager of the Insurance Compliance Division. Please understand that if an investigation is launched, we cannot share information about an investigation with you.

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

New IWCC Arbitration and Commission Review Board Rules

The December 21 edition of the Illinois Register includes two adopted amendment rulemakings from the Illinois Workers' Compensation Commission.  Both rulemakings, effective December 4, deal with complaints and review procedures of IWCC Arbitrators and Commissioners.
 
The IWCC put out an announcement regarding these two updated rules, and included in that announcement was a new form to submit complaints to the Commission Review Board:  IWCC Commission Review Board Complaint Form

New/Update Rules Overview

Arbitration (PDF document page 285)

• 50 Ill Adm Code 7030
• Proposed 8/17/2012
• Effective 12/4/2012 

Differences between Proposal and Final Version: In subsections (f)(1)(B) and (f)(2)(B),  the Final Version specifies that the assignment of a petition to disqualify either an  Arbitrator or Commissioner shall be made randomly by the Commission. The Final Version adds a new subsection (f)(3), which specifies that a petition for substitution may be made to the Commission if reasonable notice of the application has been given to the adverse party or his or her attorney.

Summary and Purpose of Rulemaking: The amendment addresses an audit finding set forth by Auditor General William Holland in the audit directed pursuant to House Resolution 131 of the 97th General Assembly. Specifically, the audit found that the current version of Section 7030.30 conflicts with the changes of Public Act 97-18. Public Act 97-18 provided that the Canons of Judicial Conduct as adopted by the Illinois Supreme Court apply to the hearing and non-hearing conduct of the Arbitrators and Commissioner. Thus, these changes to Section 7030.30 align the bases for disqualification and also the remittal of a disqualification by and Arbitrator or Commissioner with the provisions of Canon 3 of the Canons of Judicial Conduct.  

In addition, the amendment creates a formalized process for the filing of a Petition for Substitution of an Arbitrator or Commissioner. There is one published Appellate Court opinion that calls on the Commission to promulgate such a rule, Preston v. Industrial Comm'n, 332 Ill. App. 3d 708 (3rd Dist. 2002). In that case, a Commissioner who was subject to a petition to disqualify sat on the panel that ruled on the petition. While the majority found no error in the hearing process, the Court recommended that the Commission promulgate a rule to address the procedural handling of petitions to disqualify Commissioners.

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 Ottawa Trial Date Cancellation

The Illinois Workers' Compensation Commission announced a change to its Ottawa, IL arbitration schedule.  The 12/28/2012 trial date (located at the LaSalle County Courthouse, 119 W. Madison Street, Ottawa, IL) is cancelled due to a scheduling conflict.

Due to a scheduling conflict, we have eliminated the last day of the December call in Ottawa. Arbitrator Falcioni will conduct the call as scheduled on Dec. 24, and trials will be conducted on Dec. 26 and 27. He will not appear on Dec. 28. We apologize for any inconvenience.
 

WC PPP: Dept of Insurance Rulemaking Update

The Illinois Department of Insurance's proposed updates to the Insurance Code, including the workers' compensation preferred provider programs (WC PPPs), are now on JCAR's January meeting agenda.

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

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

The Illinois rulemaking process is detailed on the JCAR website:

2013 Fee Schedule Annual Rate Adjustment

The Illinois Workers' Compensation Commission announced its annual rate adjustment for the Illinois workers' compensation fee schedule. Effective January 1, 2013, the fee schedule rates will increase 1.69%.

Section 8.2(a) of the Illinois Workers' Compensation Act provides that, each year, fee schedule rates shall increase or decrease by the percentage change in the Consumer Price Index-U (CPI-U) in the previous year.  

The IWCC's announcement includes a chart that shows the adjustment rate for each year since 2006.

The medical fee schedule rates will increase 1.69% in 2013, which is less than half the rate of medical inflation (CPI-M). As the chart below shows, the fee schedule amounts are now running 37% below medical inflation over the life of the fee schedule.

The 37% difference between the IL fee schedule and medical inflation does include HB 1698/PA 97-18's 30% fee schedule reduction effective on September 1, 2011.  The remaining 6.96% is the difference between the rate of medical inflation (CPI-M) and Consumer Price Index-U (CPI-U). 
  
As Glen Boyle reported at the IWCC Medical Fee Advisory Board's December meeting, the 2013 annual fee schedule updates and rates are currently scheduled to complete internal review and quality check by December 21, and the new 2013 rates have an anticipated posting date of December 28, 2012. The annual fee schedule updates are effective on January 1 of each year.

 

IWCC & Repackaged/Compounded Pharmacy

With the recent meningitis contamination and push for more oversight over compounding pharmacies (see these articles from Business Insurance & the Chicago Tribune),  we received several questions regarding the new IWCC repackaged pharmacy repricing methodology and compounded drugs.
 
While variations exist,

• Physician-dispensed repackaging usually involves drugs that are purchased in bulk, repackaged into smaller fill amounts, and then dispensed by a provider’s office, rather than from a pharmacy. 
• "Traditional pharmacy compounding in the United States involves the act of combining, mixing or altering ingredients to prepare a customized medication for an individual patient upon receipt of a valid prescription." (University of Southern California, Pharmacy compounding – regulatory issues)

 
Compounded drugs were on the IWCC Medical Fee Advisory Board's December meeting agenda, and the Board made a clear distinction between the new physician-dispensed repackaged pharmacy reimbursement methodology and compounded drug regulations.
 
With several state and federal agencies reviewing potential changes to the review and regulatory oversight of compounded pharmaceuticals, the Medical Fee Advisory Board stated that it will continue to monitor federal and state regulatory actions, and this issue could appear on a future meeting agenda if necessary.



 

JCAR December Meeting Reminder

As a reminder, the General Assembly's Joint Committee on Administrative Rules (JCAR) meets on Tuesday, 12/11/2012 at 11:00am.  The meeting is in Room 600C of the Michael A Bilandic Building, 160 N LaSalle St, Chicago, IL.

As of this morning, the December JCAR agenda includes a 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)

There are no IL Workers' Compensation Commission-proposed rulemakings on the December agenda, and, as of this post, the Department of Insurance WC PPP rulemaking is on neither the December nor the January JCAR meeting agendas. 

IWCC Arbitrator Coverage Update

In 2013, there will be two IWCC "TBA Call" Zones (Chicago & Chicago/Wheaton) without permanently assigned arbitrators for the call (see our recent post regarding Arbitrator Zanotti).

The IWCC recently announced the January-March 2013 arbitrator coverage lists for both "TBA Calls" on its website.

Chicago TBA Call Coverage (previously Arbitrator Zanotti)

Chicago/Wheaton TBA Call Coverage (previously former Arbitrator Kinnaman)

IWCC Fee Schedule Updates

The Illinois Workers' Compensation Commission's Medical Fee Advisory Board met on Wednesday for its December meeting.
 
The agenda covered a range of topics, and this first post will cover a couple of those issues.
 

Physician-Dispensed Repackaged Pharmacy

Our previous update covered the changes to the reimbursement for physician-dispensed pharmacy in Illinois.  The final rule should appear in the Illinois Register tomorrow (12/7/12), and the effective date of the reimbursement modification is November 20, 2012. 
 
The Board did clarify that the modification only applies to bills with dates of service/fills on 11/20/12 and later.
 

2013 State Fee Schedule Updates

Glen Boyle, from Health Systems International, LLC, provided a written update regarding both finalized and potential updates to the Illinois state workers' compensation fee schedule.
 
The 2013 annual fee schedule updates and rates are currently scheduled to complete internal review and quality check by December 21, and the new 2013 rates have an anticipated posting date of December 28, 2012.  The annual fee schedule updates are effective on January 1 of each year.
 
In addition to the annual updates, Glen Boyle also reported out on potential methodology changes to update the POCs. 

(The IWCC defines POCs as "when the Commission is unable to calculate a fee for a procedure, there is a default payment provision. From 2/1/06 - 8/31/11, the default is POC76, meaning payment shall be 76% of the charged amount. Effective 9/1/11, all default payments are 53.2% of the charged amount (POC53.2).")
 
From his written report: