Heyl Royster presents its st annual claims handling ...heylroyster.com/_data/files/Seminar 2016/000...

heylroyster.com© 2016 Heyl, Royster, Voelker & Allen, P.C.

Peoria300 Hamilton Boulevard

PO Box 6199

Peoria, IL 61601

309.676.0400

Chicago33 N. Dearborn Street

7th Floor

Chicago, IL 60602

312.853.8700

Edwardsville105 W. Vandalia Street

Mark Twain Plaza III, Suite 100

PO Box 467

Edwardsville, IL 62025

618.656.4646

Rockford120 W. State Street

PNC Bank Building, 2nd Floor

PO Box 1288

Rockford, IL 61105

815.963.4454

Springfield3731 Wabash Avenue

PO Box 9678

Springfield, IL 62791

217.522.8822

Urbana102 E. Main Street

Suite 300

PO Box 129

Urbana, IL 61803

217.344.0060

thinkoutside

the box

THURSDAy,MAy 19, 2016Bloomington, illinois

THURSDAy,JUNE 16, 2016naperville, illinois

workers’compensation

Heyl Royster presents its31st annual claims handling seminar

Dear Seminar Attendee: On behalf of the firm, I want to welcome you to our 31st Annual Claims Handling Seminar. Our attorneys’ goal is to prepare materials and presentations which will benefit you in your daily work, whether you are a claims professional, risk manager, corporate counsel, or employer. We ask that you fill out the database update and evaluation form which is with your materials. Your feedback regarding this seminar and your suggestions for future topics are very important to us. We also ask that you provide your e-mail address since we are now distributing publications such as our Quarterly Review of Recent Decisions, Below the Red Line, our workers’ compensation newsletter, and our Governmental Newsletter via e-mail, as well as others listed on the form. In order to receive Continuing Education verification, be sure to sign the attendance sheet at the registration table both before the session begins and immediately following the conclusion of our sessions this afternoon. Attendance verification certificates will be e-mailed only to those who sign the attendance sheet either at the beginning or the end of the seminar. Once again, we appreciate your taking the time to join us today, and thank you for your confidence in selecting us as your attorneys. HEYL, ROYSTER, VOELKER & ALLEN, P.C.

By: Timothy L. Bertschy Managing Partner 309.676.0400 [email protected]

Workers’ Compensation agenda

1:00pm Welcome and Introductions – Toney Tomaso, Urbana & Edwardsville

1:10pm CaseLawUpdate:TheMostSignificantWorkers’CompensationDecisions of2015andEarly2016 – Brad Elward, Peoria

1:15pm CaseLawUpdate#1 –SteveGetty,Rockford&Chicago

1:20pm WCClaimsHandlingLiability:WhatTheyDoWhenTheyDoNotHaveaCase –KevinLuther,Rockford&Chicago

1:50pm FunctionalCapacityEvaluationsAsEvidenceofDisabilityInWorkers’CompensationClaims –RachelViel,OrthoIllinois –BradAntonacci,Rockford&Chicago

2:35pm CaseLawUpdate#2 –BideAkande,Chicago

2:40pm CaseLawUpdate#3 –LindseyD’Agnolo,Rockford

2:45pm Break(sponsored by Heyl Royster’s Women’s Forum)

3:00pm LegislativeUpdateandNewsfromtheCommission – Bruce Bonds, Urbana

3:15pm CaseLawUpdate#4 –BrettSiegel,Springfield

3:20pm Temporary Transitional Employment –CraigYoung,Peoria – Brad Elward, Peoria –JessicaBell,Peoria&Springfield

4:05pm CaseLawUpdate#5 –VincentBoyle,Peoria

4:10pm MedicareAdvantagePlansandThornyMedicareIssues – Brad Peterson, Urbana

4:25pm CaseLawUpdate#6 – Amber Cameron, Edwardsville

4:30pm Cocktails&Horsd’oeuvres

PeoriaAttorneys:Craig S. Young - [email protected] B. Ingram - [email protected] J. Manning - [email protected] A. Elward - [email protected] J. Hughes - [email protected] M. Bell - [email protected] M. Boyle - [email protected]

Dockets Covered:Bloomington • Peoria • Rock Island

ChicagoAttorneys:Kevin J. Luther - [email protected] A. Antonacci - [email protected] A. Welch - [email protected] W. Getty - [email protected] M. D’Agnolo - [email protected] B. Akande - [email protected]

Dockets Covered:Chicago

EdwardsvilleAttorneys:Toney J. Tomaso - [email protected] D. Cameron - [email protected] J. Hennessey - [email protected]

Dockets Covered:Collinsville • Herrin • Mt. Vernon

RockfordAttorneys:Kevin J. Luther - [email protected] A. Antonacci - [email protected] A. Welch - [email protected] W. Getty - [email protected] M. D’Agnolo - [email protected]

Dockets Covered:Chicago • Geneva • OttawaRockford • Waukegan • WheatonWoodstock • Elgin • Kankakee • New Lenox

SpringfieldAttorneys:Daniel R. Simmons - [email protected] O. Langfelder - [email protected] M. Bell - [email protected] E. Siegel - [email protected] N. Klaus - [email protected]

Dockets Covered:Quincy • Springfield

UrbanaAttorneys:Bruce L. Bonds - [email protected] D. Flodstrom - [email protected] J. Peterson - [email protected] K. Guyette - [email protected] J. Tomaso - [email protected]

Dockets Covered:Springfield • Urbana

Peoria300 Hamilton Blvd.PO Box 6199Peoria, IL 61601309.676.0400

Chicago33 N. Dearborn St.Seventh FloorChicago, IL 60602312.853.8700

Edwardsville105 W. Vandalia St.Mark Twain Plaza III Suite 100PO Box 467Edwardsville, IL 62025618.656.4646

Rockford120 W. State St.Second FloorPO Box 1288Rockford, IL 61105815.963.4454

Springfield3731 Wabash Ave.PO Box 9678Springfield, IL 62791217.522.8822

Urbana102 E. Main St.Suite 300PO Box 129Urbana, IL 61803217.344.0060

www.heylroyster.com

Appellate:

Brad A. Elward - [email protected]

Dockets Covered: Statewide

Workers’ Compensation attorneys

Heyl, royster, Voelker & allen, p.C.

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.

WORKERS’ COMPENSATION TABLE OF CONTENTS Welcome and Introductions .................................................................................................................................. A-1

Case Law Update: The Most Significant Workers’ Compensation Decisions of 2015 and Early 2016 ............................................................................................................................................. B-1

WC Claims Handling Liability: What They Do When They Do Not Have a Case ................................ C-1

Functional Capacity Evaluations As Evidence of Disability In Workers’ Compensation Claims ...................................................................................................................... D-1

Legislative Update and News from the Commission .................................................................................... E-1

Temporary Transitional Employment .................................................................................................................. F-1

Medicare Advantage Plans and Thorny Medicare Issues ........................................................................... G-1

© 2016 Heyl, Royster, Voelker & Allen, P.C.

A-1

WELCOME AND INTRODUCTIONS

Toney J. Tomaso [email protected]

Urbana, Illinois • 217.344.0060 Edwardsville, Illinois • 618.656.4646

Heyl, Royster, Voelker & Allen, P.C. PEORIA • CHICAGO • EDWARDSVILLE • ROCKFORD • SPRINGFIELD • URBANA


A-2

Toney J. Tomaso

- Partner

Toney is chair of the firm's statewide Workers' Compensation Practice. He concentrates his practice in the areas of workers' compensation, third-party defense of employers, workers' compensation appeals, and protecting workers' compensation liens. Toney works out of the Urbana and Edwardsville offices covering a vast majority of the state of Illinois for workers' compensation docket and trial coverage purposes. Based upon the current makeup and system put in place by the Illinois Workers' Compensation Commission, Toney has become familiar with most, if not all, of the Arbitrators and Commissioners who have been appointed by the IWCC. Toney takes great pride in working directly with employers and their insurance carriers in order to build an important relationship and foster a team mentality and approach to defending workers' compensation claims. This includes consistent and constant communication and on-site meetings to enable and form the trust within the team which has proven to be an important formula in protecting the client's most important asset − the client's business itself. Significant Cases Land v. Montgomery - Eight week medical

malpractice class action lawsuit Jerry Grant v. Clennon Electric, et al., 02-WC-

10537/09 MR 503 Public Speaking “’This Just In: AMA Is Doing Its Job’ - An Update

On The Job It’s Doing” Heyl Royster 30th Annual Claims Handling Seminar (2015)

“AMA Impairment Ratings: Things Are Looking Up (Since the 2011 Amendments)” Heyl Royster 29th Annual Claims Handling Seminar (2014)

“Recent Impact of AMA Ratings in Workers’ Compensation” Heyl Royster (2013)

“Use of Utilization Review Under the New Act” Heyl Royster (2012)

“Opportunities for TTD Defenses” Heyl Royster (2011)

“Repetitive Trauma Defense Strategies” Heyl Royster (2010)

“Case Study: Respondent Attorney Trial Strategy Perspective” SafeWorks Illinois 17th Annual Work Injury Conference, Champaign, IL (2009)

“Workers Compensation Law Update” Lorman Seminar (2008)

“Arising Out Of, When Should Your Case Be Arbitrated” Heyl Royster (2008)

“Recent Developments In Workers’ Compensation” Risk and Insurance Management Society (2007)

Professional Associations Champaign County Bar Association Illinois State Bar Association Will County Bar Association Illinois Association of Defense Trial Counsel

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

Illinois Education Juris Doctor, Louisiana State University, 1995 Bachelor of Arts (Golden Key Honor Society),

University of Illinois, 1992

Learn more about our speakers at www.heylroyster.com

B-1

CASE LAW UPDATE: THE MOST SIGNIFICANT WORKERS’ COMPENSATION DECISIONS OF 2015 AND EARLY 2016

Presented and Prepared by: Brad A. Elward

[email protected] Peoria, Illinois • 309.676.0400

Prepared with the Assistance of: Amber D. Cameron

[email protected] Edwardsville, Illinois • 618.656.4646

Lindsey M. D’Agnolo [email protected]

Rockford, Illinois • 815.963.4454

Steven W. Getty [email protected]


Dana J. Hughes [email protected]

Peoria, Illinois • 309.676.0400



B-2


I. INTRODUCTION ................................................................................................................................................... B-3

A. Current Court ......................................................................................................................................... B-3 B. Summary of 2015 ................................................................................................................................. B-3 C. Oral Argument to Decision Times .................................................................................................. B-3

II. DECISIONS ............................................................................................................................................................. B-4

A. AMA Reports .......................................................................................................................................... B-4 B. Arising Out Of ........................................................................................................................................ B-5 C. Average Weekly Wage (AWW) ........................................................................................................ B-7 D. Exclusive Remedy Provisions ............................................................................................................ B-8 E. Independent Contractor .................................................................................................................... B-9 F. Loaned-Borrowed Employees ....................................................................................................... B-10 G. Penalties ................................................................................................................................................ B-11 H. Procedural Issues ............................................................................................................................... B-12 I. Section 19(g) ....................................................................................................................................... B-12 J. Survival of Benefits ............................................................................................................................ B-13 K. Temporary Total Disability Benefits ............................................................................................ B-14 L. Traveling Employees ......................................................................................................................... B-14 M. Wage Differential Benefits ............................................................................................................. B-16


B-3


I. INTRODUCTION

The appellate court plays an important part in shaping the law in this state concerning workers’ compensation. Since 1984, Illinois, in fact, has utilized a special division of the appellate court – the Appellate Court, Workers’ Compensation Commission Division – to hear and resolve all cases arising under the Workers’ Compensation Act. This Division consists of one justice from each appellate court district, who is appointed by the Illinois Supreme Court Justice from that district. Only cases designated by this panel of the appellate court may proceed to the Illinois Supreme Court. For all practical purposes, the appellate court is the final arbiter of most significant issues in Illinois workers’ compensation law.

A. Current Court

During 2015, the Appellate Court, Workers' Compensation Commission Division, consisted of Justices Thomas Hoffman (1D), Donald Hudson (2D), William Holdridge (3D) (presiding), Thomas Harris (4D), and Bruce Stewart (5D).

B. Summary of 2015

In 2015, the appellate court issued 15 published decisions and 86 unpublished Rule 23 Orders. The Illinois Supreme Court issued two decisions, one involving appeal bonds in the context of the Illinois State Treasurer as custodian of the Injured Workers’ Benefit Fund and a second involving an exclusive remedy provision defense raised in a civil personal injury case (defending an asbestos claim filed against an employer long after the expiration of the statute of repose), rather than a case arising directly under the Act. A second petition for leave to appeal was filed, but denied (RG Construction Services v. Illinois Workers’ Compensation Comm’n, 2014 IL App (1st) 132137WC (medical records admissible into evidence despite containing opinions)).

C. Oral Argument to Decision Times

Heyl Royster has been tracking “oral argument-to-decision” time since the September 2015 Oral Argument Call and have some interesting numbers for you to consider. In this interval, the court has held four calls and heard 70 cases. Of those, a decision has been rendered in 53 cases. The court has affirmed 42 and reversed 11, and dissents or special concurrences were filed in six cases. Eight of these cases were published decisions, while 45 were unpublished Rule 23 orders.

B-4

September through January Oral Argument Dispositions Outcome Total Order Avg Days Rule 23 Avg Days Affirmed w/o dissent 38 4 14 34 16.5 Affirmed w/ dissent 3 0 - 3 51.6 Affirmed w/ concurrence 1 1 42 0 - Reversed w/o dissent 9 3 18.6 6 14.6 Reversed w/ dissent 2 0 - 2 55

These statistics indicate that most unanimously affirmed decisions are issued within 10-16 days following oral argument; most unanimous reversals are issued within 8-10 days, or 15-18 days after argument. If your case is lingering past 30 days from oral argument, chances are that there is a dissent, or at least a special concurrence coming. Of the cases lingering beyond 40 days from oral argument, four involved a dissent. Of interest, the earliest release of a decision was five days following oral argument – the Commission’s decision was affirmed. II. DECISIONS

A. AMA Reports

Continental Tire of the Americas, LLC v. Illinois Workers’ Compensation Comm’n, 2015 IL App (5th) 140445WC – The claimant slipped and fell at work sustaining a wrist fracture. The claimant received treatment for his wrist fracture and was eventually released to return to work full duty with no restrictions. At that time, the claimant’s physician indicated claimant’s wrist was doing well, although claimant testified that he continued to have some pain when grabbing tires and playing golf. At arbitration, the employer offered an AMA impairment report prepared by claimant’s treating orthopedist which indicated claimant’s impairment rating was zero. The claimant did not offer an AMA impairment report. Based on the remaining factors included in section 8.1b(b) of the Act, the arbitrator awarded permanency of five percent loss of use of the hand. The Commission affirmed and the employer appealed, arguing that the AMA impairment rating of zero precluded consideration of the remaining four factors contained in section 8.1b(b) as a matter of law. The Appellate Court, Workers’ Compensation Commission Division, affirmed the Commission’s decision finding that section 8.1b(b) required consideration of all factors and that no single factor is the sole determinant of disability. The court held that the Commission is obligated to consider all factors and to make specific factual findings with respect to the degree of the injured employee’s permanent partial disability. The court found the Commission’s decision was not against the manifest weight of the evidence because the Commission had considered the AMA impairment report along with the other factors in section 8.1b(b) and outlined those findings in the decision.

B-5

B. Arising Out Of

Nee v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 132609WC – The claimant, a plumbing inspector for the City of Chicago, was injured after tripping on a curb as he was walking back to his car to go to his next assignment. The claimant testified that his work duties required him to travel through the city by car to inspect the plumbing in both commercial and residential buildings. He also said he reported to work each day at the filtration plant and received his work assignments, before heading into the field. The claimant contended, and the City admitted, that the claimant was a traveling employee. The arbitrator and Commission denied the claim, finding the claimant failed to prove he sustained accidental injuries arising out of the employment. On appeal, the appellate court reversed the Commission and remanded the case for further proceedings. According to the appellate court, the Commission erred by failing to review the accident under the appropriate traveling employee standards, which in evaluating “arising out of,” asks whether the accident was reasonable and foreseeable. The appellate court concluded that “no reasonable argument can be made that the claimant's conduct in traversing a curb as he walked to his car was neither reasonable nor foreseeable.” Nee, 2015 IL App (1st) 132609WC, ¶ 20. Moreover, the appellate court applied the so-called “street risk” doctrine to conclude that, “[h]aving been exposed to the risk of traversing a curb to a greater degree than a member of the general public by virtue of his status as a traveling employee at the time of his accident, the injury which the claimant suffered when he tripped over the curb was sustained not only in the course of his employment, it also arose out of his employment with the City.” Id. ¶ 28. Under that doctrine, “where the street becomes the milieu of the employee's work, he is exposed to all street hazards to a greater degree than the general public.” Id. ¶ 26. The only beneficial aspect of Nee is its language concerning trip and falls in a non-traveling employee setting. In that regard, the court stated, “[t]he risk of tripping on a curb is a risk to which the general public is exposed daily.” Id. The court stated further:

Nothing in the record before us suggests that some aspect of the claimant's employment contributed to the risk of traversing a curb. Although there is evidence that the claimant carried a clipboard while performing plumbing inspections, there is no evidence that carrying a clipboard caused, or contributed to, his tripping on the curb. Further, there is nothing in this record to distinguish the curb on which the claimant tripped from any other curb. As noted earlier, although the claimant testified that the curb may have been higher than the sidewalk, he readily admitted that he did not know. We are left then with the question of whether the claimant was exposed to the risk of tripping on a curb more frequently than the general public.

Id. ¶ 25.

B-6

Adcock v. Illinois Workers’ Compensation Comm’n, 2015 IL App (2d) 130884WC – The claimant injured his left knee while turning in a chair he used continuously to perform his work duties as a welder. He used this chair because of permanent restrictions due to a right knee condition. The employer argued that the claimant's claim did not "arise out of" his employment because the act of turning in a chair is one of everyday life. In denying compensability, the Commission found no evidence that the injury was due to an increased risk connected to the claimant's work or a risk incidental to the employment. The Commission's decision was supported by the medical testimony of the treating and examining physicians that the claimant's injury could have happened anywhere and that nothing about the claimant's work increased his risk of a knee injury. The claimant appealed to the appellate court, which reversed the Commission's decision and found the claim compensable. In a 3-2 opinion in which two justices filed a special concurrence, the majority held the claimant had proved that he was exposed to the neutral risk of turning in his chair to a greater degree than the general public. The court agreed with the Commission that the act of turning in a chair was one of everyday life faced by all members of the general public, but found the claim compensable because the claimant was exposed to the risk to a greater degree by virtue of his employment. The claimant was required to perform his welding duties in a chair. His testimony that his job required non-stop movement in his chair, was unrebutted by the employer. Thus, he proved that his employment exposed him to an increased risk of injury. According to the majority, "[t]he Commission should not award benefits for injuries caused by everyday activities like walking, bending, or turning, even if an employee was ordered or instructed to perform those activities as part of his job duties, unless the employee's job required him to perform those activities more frequently than members of the general public or in a manner that increased the risk." Adcock, 2015 IL App (2d) 130884WC, ¶ 39. The majority specifically stepped back from the analysis utilized in prior cases such as Young and Autumn Accolade, which suggested that a neutral risk analysis is unnecessary where the employee is injured while performing his or her required work duties. The two dissenting justices argued that the activity of turning in a chair was one distinctly associated with the claimant's employment, which would make the injury compensable without further analysis. The special concurrence concluded that an injury suffered while performing an activity of everyday living is compensable so long as the activity is required by the employment, even if nothing about the employment increases the risk of the activity beyond that which is faced by members of the general public. Thus, if an employee is injured while performing a common bodily movement that is required by his job duties, the injury thus "arose out of" the employment, even if that activity is a common activity performed by the general public. Adcock sets a clear demarcation of the law involving increased risks and reiterates the employee's obligation to prove that common acts performed at work are compensable. It further makes it clear for employers that accidents resulting from a neutral risk, whether an activity or a condition of the premises, will only be compensable where the employee, because of the employment, encounters that risk or condition more frequently or to a different extent.

B-7

Adcock cautions that the analysis in such cases is not simply whether the claimant was performing an activity required by his or her job – rather, the activity in question must be examined and then compared to the general public. If the activity is a common one faced by the general public, the inquiry must be whether the employment required the worker to perform the everyday activity more frequently than members of the general public or in a manner that increased the risk of the activity beyond the risk normally faced by the general public. Bolingbrook Police Dept. v. Illinois Workers’ Compensation Comm’n, 2015 IL App (3d) 130869WC – The claimant, an officer for the Bolingbrook Police Department, was preparing for work by loading his required gear, including his duty bag, into the trunk of his personal vehicle at home when he sustained a low back injury. He was required to keep this bag secure while off duty. There were no prohibitions from bringing this bag home at the end of his shift. The claimant admitted that he had a preexisting low back condition. The arbitrator found that claimant sustained an injury “arising out of” and “in the course of” employment and that a causal connection existed between the alleged accident and the claimant’s current condition of ill-being. The Commission affirmed the decision. On appeal, the employer argued that the claimant was not required to bring his duty bag home to keep it secure and, as a result, the accident did not occur “in the course of” employment because the accident occurred at claimant’s home. The appellate court disagreed, finding that the claimant was responsible for the safekeeping of his duty bag as part of his job duties. He was also required to keep the duty bag with him on his person and that the employer, through this policy, gave him two options to secure the bag: at home or at the police station. The court concluded that the employer enjoyed a direct benefit because the officer performed a task that is necessary for the safekeeping of his duty bag. Based on the physician’s opinion that the act of lifting a heavy duty bag could cause an increase in pain in an individual with a preexisting back condition, the court found claimant’s current condition of ill-being was causally related to the work accident.

C. Average Weekly Wage (AWW)

ABF Freight Systems v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 141306WC –The claimant was awarded benefits and on appeal, one of the issues challenged related to the calculation of the claimant’s average weekly wage. The claimant had worked as a “casual employee” for the employer for a period of about four months, but had earned full-time employment as a spotter, where he earned more than he did as a casual employee. The claimant worked as a spotter for 22 weeks prior to his accident. The Commission, when calculating average weekly wage, considered only the claimant’s work as a spotter and focused on the language from section 10 stating that average weekly wage means the employee’s actual earnings “in the employment in which he was working at the time of the injury.” ABF Freight, 2015 IL App (1st) 141306WC, ¶ 27. The appellate court affirmed, and rejected the employer’s argument that the claimant’s average weekly wage should have included his time as a casual employee and spotter, since he had

B-8

performed both during the 52-week period prior to the accident. The appellate court stated that, “[a]t the time of his accident, claimant was earning wages as a spotter – that is what he lost as a result of the accident.” Id. ¶ 30.

Having secured his union position, there is no indication that claimant would ever return to casual employment in the future. As such, the true measure of claimant’s loss is the wages he was earning at the time he was injured, and that is what his award should be based on.

Id. The court observed, “[c]laimant is now a spotter; he is no longer a casual employee. There is no relationship between what claimant earned as a casual employee and what he lost when he could no longer work as a spotter.” Id. ¶ 31.

D. Exclusive Remedy Provisions

Folta v. Ferro Engineering, 2015 IL 118070 – The decedent, James Folta, worked for Ferro Engineering from 1966 to 1970 and alleged that as part of his job duties, he was exposed to asbestos-containing products. Forty-one years later, James was diagnosed with mesothelioma, and one month later, in May 2011, he filed a civil law suit in circuit court against 15 defendants, including Ferro. Ferro moved to dismiss, raising the exclusive remedy provisions of the Workers’ Compensation and Occupational Diseases Acts, and arguing the claim was barred by the 25-year statute of limitations/statute of repose. The circuit court granted Ferro’s motion, but the appellate court reversed, finding that an injured employee may bring a common law action against his employer where the injury is not compensable under the Act. The appellate court concluded that the term “compensable” must relate to the ability to recover under the Act, and because the estate could not recover under the Act, his claim was therefore not compensable. Ferro appealed to the Illinois Supreme Court, which reversed and upheld the dismissal based on exclusive remedy grounds. In discussing the scope of the exclusivity provisions under the two Acts, a majority of the court found the Acts generally provide the exclusive means by which an employee can recover against an employer for a work-related injury. In evaluating whether the claim was compensable under the Act, the majority focused on plain language of the two statutory provisions, which provide that in cases of death occurring within 25 years from the last exposure to asbestos, an application for compensation must be filed within 3 years of the death. The majority held that the plain language created an absolute bar on the right to bring a claim, and concluded that the General Assembly intended to provide a definitive time period within which all claims arising from asbestos exposure must be brought. The majority noted that construing the scope of the exclusive remedy provisions to allow for a common-law action would result in the statute of repose ceasing to serve its intended function, which is to extinguish the employer’s liability for a work-related injury at a definite time. Locasto v. City of Chicago, 2016 IL App (1st) 151369 – A fire department employee (Locasto) filed a civil claim seeking damages for an intentional tort resulting in injuries. Locasto claimed the defendants intentionally injured him by forcing him to engage in strenuous physical exercise

B-9

with minimal water breaks during firefighter paramedic training, causing him dehydration and acute kidney failure. In addition to his civil suit, Locasto filed a workers’ compensation claim under the Illinois Workers’ Compensation Act (Act). The arbitrator concluded the injuries “arose out of” and “in the scope of” his employment with the City and awarded both medical and indemnity benefits. After the workers’ compensation award became final, the employer moved for summary judgment in the civil case, arguing the receipt of workers’ compensation benefits barred any recovery in a civil suit for an intentional tort and, in any event, that there was no evidence the defendants’ acts were intended to injure him. Looking at the Act’s exclusive remedy provisions, section 5(a) prohibits a “common law or statutory right to recover damages from the employer … for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided.” 820 ILCS 305/5(a). Section 11 states that compensation under the Act “shall be the measure of the responsibility of any employer.” 820 ILCS 305/11. To escape the preclusive effect of these provisions, an employee must prove the injury: (1) was not accidental; (2) did not arise out of his employment; (3) did not occur in the course of the employment; or (4) was otherwise not compensable under the Act. Fregeau v. Gillespie, 96 Ill. 2d 479, 483 (1983). Locasto opposed the summary judgment, arguing the exclusive remedy provisions did not bar his claim because his injuries were not accidental. The court pointed out that collecting workers’ compensation benefits on the theory that the injury was accidental and, thus, compensable was wholly inconsistent with subsequently asserting that the exclusive remedy provision was inapplicable because the injury was not accidental. Because Locasto was talking out of both sides of his mouth, the court granted the motion for summary judgment.

E. Independent Contractor

City of Bridgeport v. Illinois Workers’ Compensation Comm’n, 2015 IL App (5th) 140532WC – The decedent worked for the City of Bridgeport as a meter reader, but had been hired as an independent contractor. On the morning of her death, the decedent had reported to city hall to retrieve her water meter reading equipment. While in the process of reading a water meter, she suffered a seizure and fell face down in standing water and drowned. The arbitrator found the claim not compensable and denied benefits, concluding that the decedent was not an employee, but an independent contractor. The Commission reversed and found that she was an employee of the City based on the level of control the employer purportedly exerted over the decedent in the performance of her employment. On appeal, the appellate court affirmed, finding that the Commission’s decision was not against the manifest weight of the evidence. Specifically, the appellate court concluded that the decedent’s employment was at-will, that the employer provided all of her work equipment, and

B-10

that her work did not require specialized skill to perform. Moreover, the court concluded that it was of great significance that the nature of the work performed by the alleged employee – the decedent – was intimately related to the general business of the employer. Concerning the “arising out of” analysis, the City had argued that the fall was idiopathic and that injuries resulting from an idiopathic fall are generally not compensable. The appellate court rejected this assertion, noting that idiopathic falls may well be compensable “if the employment significantly contributed to the injury by placing the employee in a position increasing the dangerous effects of the fall.” City of Bridgeport, 2015 IL App (5th) 140532WC, ¶ 42. Justice Holdridge filed a special concurrence arguing that the employment relationship issue should be abandoned, as it “will always cut in favor of finding an employment relationship in cases involving contractors whose work forms ‘an integral part of’ the municipality’s or company’s business,” which he said was “very often the case when a municipality or company hires an independent contractor.” Id. ¶ 53. Esquinca v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 150706WC – The claimant, a truck driver who owned his own truck, suffered a low back injury while working for the employer Romar Transportation Systems. While driving, he was involved in a truck accident with three other vehicles. The claimant had signed a “Contractor Services Agreement,” which identified him as an independent contractor. The arbitrator denied the claim, finding the claimant was an independent contractor at the time of his accident. The Commission, in a 2-1 decision, affirmed and the circuit court confirmed that decision. The appellate court affirmed, finding that the Commission majority’s decision was not against the manifest weight of the evidence. According to the appellate court, the Commission majority considered and weighed all relevant factors and circumstances and that there was support for each of its conclusions.

F. Loaned-Borrowed Employees

Reichling v. Touchette Regional Hospital, Inc., 2015 IL App (5th) 140412 – The claimant, a registered nurse who worked for Touchette Regional Hospital through a temporary healthcare staffing agency, ReadyLink, filed an application for an adjustment of claim after slipping on a wet floor in the Emergency Room of Touchette. ReadyLink settled the workers’ compensation lawsuit. Thereafter, the claimant further filed a common law premises liability claim against Touchette, under the argument that she was not a “borrowed-employee” at the time of injury. Touchette filed a motion for summary judgment arguing that the claimant was a borrowed-employee at the time and was subject to the Illinois Workers’ Compensation Act as her exclusive remedy. An agreement between ReadyLink and Touchette provided that ReadyLink indemnified and held Touchette harmless from responsibilities including workers’ compensation coverage. However, Touchette was responsible for providing work directives, scheduling, providing supplies, and discipline among other duties. ReadyLink had no contact with the employees regarding their work duties or scheduling. Further, the claimant was required to sign a “Memo of Understanding” through Touchette, which provided details regarding her work at Touchette. The

B-11

documentation provided indicated that her employer was ReadyLink and acknowledged that Touchette's managers would be her resources for safety and hazard information. The circuit court found that claimant was a borrowed-employee and the Workers’ Compensation Act was her exclusive remedy. On appeal, the appellate court said that whether a borrowed-employee relationship existed is a two-prong test. First, it must be determined whether the alleged borrowing-employer had the right to direct and control the manner in which the employee performed the work. Next, it must be determined whether there was an express or implied contract of hire between the employee and the alleged borrowing-employer. The court found that because Touchette was primarily responsible for the direction and control of the work that the claimant performed, including scheduling, work orders, supplies, and discipline, the first prong of the borrowed-employee test had been met. Further, because Touchette required acknowledgement of the documentation contained within the “Memo of Understanding,” the court found that an express contract of hire between the claimant and Touchette existed. Therefore, the appellate court affirmed the circuit court’s holding finding that the claimant was a borrowed-employee of Touchette and was only entitled to action exclusively within the Illinois Workers’ Compensation Act. Further, the court held that the indemnification agreement between ReadyLink and Touchette did not affect workers’ compensation exclusivity.

G. Penalties

Oliver v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 143836WC – The claimant, a welder, sustained an elbow injury while “in the course of” his employment. The claimant reported the accident six days after the date of accident. The claimant did not immediately seek medical attention for his swollen elbow, however, claimant testified that over the next several days, the pain worsened and he presented for medical treatment. The treatment records clearly indicated that the claimant sustained a full-thickness tear involving the triceps tendon. The employer denied temporary total disability benefits and payment of medical expenses, claiming it needed additional records to determine compensability. At arbitration, the site superintendent for the employer testified that he knew of no factual or medical basis to dispute that the injury had occurred. He further said he did not allow the claimant to file an accident report because the accident occurred six days prior to the date that claimant reported the injury. Based upon this evidence, the arbitrator awarded penalties under section 19(l) of the Act finding that the employer’s failure to pay temporary total disability benefits and medical expenses was unreasonable and vexatious as claimant’s medical records fully supported a claim. The Commission reversed the arbitrator’s decision finding that the employer did not act unreasonably in denying benefits on the grounds that the claimant failed to report the injury on the day of the accident and the claimant did not appear to be in pain on the date of accident. The circuit court reversed, finding the Commission’s decision was in direct contradiction with the Act, which affords 45 days to report an accident. Because the employer’s only basis for denial of benefits was for the purpose of delay, the employer’s actions were unreasonable and vexatious.

B-12

On appeal, the appellate court affirmed the circuit court’s decision. According to the court, the Commission had attempted to set a precedent requiring all accidents to be reported on the day of their occurrence. Further, the court stated that if the employer had allowed the claimant to file an accident report, properly investigate the accident, and then found that there was no causal connection, the employer’s delay in issuing payment would be wholly reasonable and not vexatious.

H. Procedural Issues

Farrar v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 143129WC – The appellate court held that section 13-217 of the Code of Civil Procedure, which allows a party to refile an action within one year after the action has been dismissed for want of prosecution, even where the statute of limitations has expired, did not apply to workers’ compensation cases. In Farrar, the claimant had timely filed her application for adjustment of claim. Her application was dismissed for want of prosecution and the claimant did not file a petition to reinstate her claim within the 60 days set forth in Commission Rule 9020.90(a). Instead she filed a new claim within 11 months, by which time the statute of limitations had expired. The arbitrator granted the employer’s motion to dismiss, finding that section 13-217 did not apply and that the matter was governed by Rule 9020.90(a). The Commission affirmed and the circuit court confirmed. On appeal, the appellate court noted that the Code of Civil Procedure may apply to matters before the Commission so long as the code did not conflict with the Commission’s rules. The appellate court found there was an inherent conflict between section 13-217 and Commission Rule 9020.90, and that permitting a party to utilize section 13-217 would effectively write out the requirements of Rule 9020.90.

I. Section 19(g)

Reed v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 130681 – The claimant filed a section 19(g) proceeding to enter judgment on the medical portion of the Commission’s award and to authorize enforcement. The Commission’s decision was on judicial review before the circuit court on at least some aspects of the award, although the employer was not contesting the award of medical expenses. The circuit court dismissed the section 19(g) proceeding as premature, noting that section 19(g) does not permit enforcement of a compensation award while proceedings for review are pending. The appellate court affirmed, specifically rejecting the claimant’s argument under Jacobo v, Illinois Workers’ Compensation Comm’n, 2011 IL App (3d) 100807WC, which held that any portions of the award that are not appealed are due and owing and the failure to pay may justify penalties. The appellate court was concerned that the approach advocated by the claimant, which would permit enforcement proceedings to be commenced at any point when a portion of the award because due and owing, would lead to piecemeal appeals, which is against public policy. Sunrise Assisted Living v. Banach, 2015 IL App (2d) 140037 – The claimant had received an award from the Commission, which was confirmed by the circuit court and affirmed by the appellate

B-13

court. During the appellate review, the claimant petitioned to increase the award under sections 19(h) and 8(a) of the Act, claiming her condition had worsened. Thereafter, the claimant filed a section 19(g) petition to reduce the award to judgment and to obtain nine percent judgment interest. The employer paid the award and section 19(n) interest just prior to the filing of the section 19(g) petition. The appellate court upheld the circuit court’s denial of the section 19(g) motion and refused to find that judgment interest applied. According to the appellate court, the award had been paid, with interest, by the time the section 19(g) petition was filed, and thus there had been no refusal to pay the underlying award. Moreover, section 735 ILCS 5/2-1303’s nine percent judgment interest was not applicable because no judgment had been entered. “When Sunrise tendered full payment of what was owed, [the claimant] was no longer entitled to a judgment under section 19(g). Without a judgment, [the claimant] was not entitled to additional interest under section 2-1303.” Sunrise Assisted Living, 2015 IL App (2d) 140037, ¶ 35.

J. Survival of Benefits

Bell v. Illinois Workers’ Compensation Comm’n, 2015 IL App (4th) 140028WC – An unmarried claimant with no living dependents filed an application for adjustment of claim but subsequently died from unrelated causes prior to arbitration. The decedent’s sister, as the administrator of decedent’s estate, filed an amended application substituting herself as the claimant in the case. The arbitrator awarded temporary total disability benefits, medical expenses, and found that the decedent sustained permanent partial disabilities from her work injury. Nevertheless, the arbitrator did not award permanent partial disability benefits, having determined that the right to permanent partial disability benefits abated at decedent’s death. According to the arbitrator, sections 8(e)19 and 8(h) of the Act authorized certain named individuals – a surviving spouse or dependents – to continue an injured employee’s claim for permanency benefits after death, but did not authorize a claimant’s estate to recover permanent partial disability benefits which accrued prior to death where no dependents exist. The Commission affirmed the arbitrator’s decision. The appellate court reversed the decision, holding that sections 8(e)(19) and 8(h) only addressed “to whom” benefits will be paid, and not what happens to benefits if the claimant dies without leaving a living spouse or dependents. The court held that unpaid permanent partial disability payments that accrue prior to claimant’s death are payable to the estate. The court relied on Republic Steel Corp. v. Industrial Comm’n, 26 Ill. 2d 32 (1962) (finding that an employee’s death extinguishes payments falling due after death, but an administrator of the estate may recover payments accrued up to the date of death), and Nationwide Bank & Office Management v. Industrial Comm’n, 361 Ill. App. 3d 207 (1st Dist. 2005) (finding that the enactment of section 8(h) does not address accrued benefits, but rather installment payments, and does not affect the right to collect benefits accrued prior to death) in finding that the right to accrued benefits does not abate at death. The court also noted public policy reasons for its holding, including deterring employers from delaying litigation to the point of the claimant’s death in order to avoid payment of permanency benefits.

B-14

K. Temporary Total Disability Benefits

Sharwarko v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 131733WC – The claimant sustained a right arm injury while replacing a water meter on a property owned by his employer. The employer was able to accommodate work restrictions imposed by claimant’s treating physician and while recovering from surgery, he received temporary total disability benefits. The claimant was later released to return to work with restrictions but he never returned to work prior to accepting a voluntary early retirement offered by the employer. A representative of the employer testified that had the claimant not retired, it would have accommodated his work restrictions as it had with other similarly situated employees. The employer continued to pay for related medical treatment after the claimant’s retirement through his release at maximum medical improvement. The appellate court affirmed the Commission’s finding that the claimant’s voluntary retirement was tantamount to refusing the accommodated work the employer had made available and, as a consequence, he was not entitled to temporary total disability benefits. The court stated the purpose of the Act is to compensate an employee for lost earnings resulting from work related injuries and when an employee chooses to remove himself from the workforce, his lost earnings are the result of a volitional act, not his work related injuries. The court also found the Commission’s decision denying permanent and total disability benefits was not against the manifest weight of the evidence noting the Commission relied upon doctors’ opinions claimant could work with restrictions, those restrictions were made available by the employer, and claimant failed to provide evidence of any job search after he reached maximum medical improvement.

L. Traveling Employees

Pryor v. Illinois Workers’ Compensation Comm’n, 2015 IL App (2d) 130874WC – The claimant worked as a car hauler and his job responsibilities included loading automobiles onto an 18-wheel car-hauling truck at the employer’s terminal in Belvidere, Illinois, driving the truck to various dealerships, and unloading the cars at those dealerships. The employer’s general work included delivering new automobiles to various car dealerships for Chrysler. One or two nights per week, the claimant spent the night at a hotel while he was on the road delivering cars to dealerships. The claimant usually drove his personal vehicle from his home to the employer's Belvidere terminal and back. On the date of the injury, the claimant arose at 4 a.m. to get ready for work, planning to drive to the Belvidere terminal that morning to “start [his] work.” “Because he anticipated being out of town overnight for work that evening, [he] packed a suitcase with a change of clothes and other items for the trip. The claimant carried the packed suitcase to his personal car, opened the car door, reached down to pick up the suitcase, and ‘bent and turned to the back seat of the car.’ At that moment, [he] felt an ‘unbearable’ pain through his back and down his legs which caused him to drop to his knees.” Pryor, 2015 IL App (2d) 130874WC, ¶ 7.

B-15

The arbitrator and Commission denied the claim, finding that the claimant had failed to prove that he sustained an accident that arose out of and in the course of his employment. The arbitrator concluded, and the Commission affirmed, that the claimant “would be considered a traveling employee from when he arrives at [the employer's] terminal, loads his vehicle, delivers his vehicles to a destination, and returns to the terminal.” Id. ¶ 12. However, the Commission found that “lifting an overnight bag is not sufficient to put [the claimant] in the course of his employment.” Id. On appeal, the appellate court affirmed. Although acknowledging the validity of the traveling employee doctrine, the court concluded that the claimant had not yet entered the role of a traveling employee and was merely traveling to work when the accident occurred. According to the court, “[a]n injury suffered by a traveling employee is compensable under the Act if the injury occurs while the employee is traveling for work, i.e., during a work-related trip. However, the work-related trip at issue must be more than a regular commute from the employee's home to the employer's premises. Otherwise, every employee who commutes from his home to a fixed workplace owned or controlled by his employer on a daily basis would be deemed a ‘traveling employee,’ and the exception for traveling employees would swallow the rule barring recovery for injuries incurred while traveling to and from work.” Id. ¶ 22. The appellate court said, “[e]ven assuming that the claimant had ‘left home’ at the time of his injury, (which is not entirely clear), he was preparing to begin his regular commute to his employer’s premises at that time. Unlike the claimants in Mlynarczyk and Complete Vending Services,” the court said, “the claimant in this case did not drive to his various work locations directly from his home; rather, he was required to drive to the employer's Belvidere facility first, load an 18-wheeler truck with cars located at the employer's facility, and then drive the truck to various dealerships from there.” Id. ¶ 29. Thus, the court observed, “when he drove to the Belvidere terminal, he was not making a brief and unnecessary stop at his employer's premises that was directly en route to his ultimate work destination (as was the claimant in Complete Vending Services). Rather, he was making a regular commute to a fixed jobsite as a necessary precondition to any subsequent work-related travel.” Id. Moreover, “the claimant's trip to the Belvidere facility was not part of a continuous trip from his home to a jobsite away from the employer's premises. ... Rather, the claimant was injured during a regular commute from his home to his employer's premises, before he embarked upon a work trip away from his employer's premises.” Id. United Airlines, Inc., v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 151693WC – The claimant, a flight attendant for United Airlines, injured her knee while traveling from her home in Colorado to New York, where her work flights originated. The claimant was flying to New York the day prior to her scheduled work day and was not being compensated for her travel. She testified that she resided in Colorado by choice, and the evidence showed that United received no benefit from the claimant’s decision to reside in Colorado. At the time of her accident, the claimant was using her leisure travel pass, which allowed her fee-waived travel on

B-16

any of United’s flights. Her seat, however, was not guaranteed. The arbitrator found the claim compensable, concluding that the claimant was a traveling employee at the time she was injured. The Commission reversed and denied the claim, rejecting the conclusion that she was a traveling employee. The circuit court reversed the Commission, finding that the transportation was “necessary to the exigencies of her work.” On appeal, the appellate court reversed and reinstated the Commission’s decision. According to the appellate court, the claimant’s decision to live in Colorado was hers and conferred no benefit on the employer. The court observed that in order to be considered a traveling employee, “the work-related travel ‘must be more than a regular commute from the employee’s home to the employer’s premises.’” United Airlines, 2016 IL App (1st) 151693WC, ¶ 21. The court also noted that United had no control over where the claimant chose to live and that the claimant had not been paid or received other recompense for any of her travel from Colorado to New York. “The claimant’s choice of residence was a personal decision that the benefits of living in Colorado outweighed the personal cost of traveling from Colorado to New York. At the time the claimant injured her knee, she was engaged in her regular commute from her chosen residence to the city where her job assignment was located.” Id. ¶ 26.

M. Wage Differential Benefits

Lenhart v. Illinois Workers’ Compensation Comm’n, 2015 IL App (3d) 130743WC – The claimant worked as a dockworker and truck driver and sustained an injury to his low back. The arbitrator found the claimant’s accident compensable and awarded him person-as-a-whole permanent partial disability benefits. The claimant then appealed to the Illinois Workers’ Compensation Commission seeking permanent total disability benefits, based on an odd-lot theory which were denied, in part, based on video evidence showing claimant was capable of some work. The Commission affirmed the award of 75 percent of a person-as-a-whole. The appellate court reversed the Commission’s award of permanent partial disability benefits, finding the claimant had presented sufficient evidence of a wage differential award and remanded the claim to the Commission for further consideration. The court noted the preference for wage differential awards under Section 8(d) of the Act, even if the claimant did not specifically request a wage differential at arbitration. According to the court, there was nothing in the record to suggest that the claimant had explicitly elected to waive his right to recover a wage differential award under Section 8(d)(1) and the claimant’s request for permanent total disability benefits was not a waiver of right to other recovery, particularly when the employer itself asked the Commission to grant a wage differential and the record supports such an award. DiBenedetto v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 133233WC – The claimant was awarded a wage differential under section 8(d)(1) of the Workers’ Compensation Act based on the difference between the amount he earned in his former job and the amount he earned in his new employment. The former amount was based on what the claimant’s former job paid at arbitration, which occurred several years after his accident. On review, the

B-17

Commission affirmed, but reduced the wage differential because the wage attributed to his former employment at the time of arbitration exceeded the maximum rate of a wage differential award at the time of the accident. The appellate court affirmed, finding that the maximum rate at the time of the accident controlled, even though the wages from the former employer were to be determined at the time of the arbitration hearing. According to the court, by its own terms, section 8(d)(1) was subject to the limitations as to maximum amounts payable per section 8(b)(4) of the Act. The court held that the law was clear that the date of the injury controlled the maximum rate applicable to benefits for a particular injury. DiBenedetto, 2015 IL App (1st) 133233WC, ¶ 18. Although noting that the stated average weekly wage at the time of the arbitration hearing was more reflective of the claimant’s actual wage differential, it further acknowledged that section 8(b)(4) affected wage differentials to varying degrees and that its purpose was to limit recoveries. Jackson Park Hospital v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 142431WC –The claimant worked as a stationary engineer for Jackson Park Hospital and sustained injuries to her neck, low back, and left knee in a work-related accident. It was undisputed that she could no longer perform her job as a stationary engineer and that she was capable of light-duty work. The employer placed the claimant in a public safety officer position, which paid the same as her stationary engineer job. The arbitrator concluded that the claimant was not entitled to a wage differential award under section 8(d)(1) because she had not suffered any loss in wages. While the case was awaiting oral arguments before the Commission, the claimant was terminated. She filed a petition to re-open proofs to admit this additional information, and her motion was denied. The Commission affirmed the arbitrator’s award of PPD benefits, as did the circuit court. On appeal, the appellate court reversed and remanded, finding that the Commission should have awarded a wage differential award. According to the appellate court, it was wrong for the Commission to simply look at what the claimant was earning at the time of arbitration. The real question, the court found, was whether that wage reflected the claimant’s true earning capacity. The court noted that the Commission did not conduct any analysis to determine whether the claimant’s post-injury wages reflected her true earning capacity in a competitive labor market. Moreover, it noted that the record included evidence that the employer had paid the claimant to perform job duties that she was not qualified to perform and paid her a wage that was above what would normally be paid for such services. Jackson Park Hospital, 2016 IL App (1st) 142432WC, ¶ 55.

B-18

Brad A. Elward

- Partner

Brad concentrates his work in appellate practice and has a significant sub-concentration in workers' compensation appeals. He has been with the firm since 1991 and became a partner in 1999. Brad handles all aspects of civil appeals, ranging from preparation of initial appeal documents through the drafting of appellate briefs and oral arguments. Brad handles workers' compensation cases before the Workers' Compensation Commission, the circuit court, and the Appellate Court, Workers' Compensation Commission Division, and focuses much of his workers' compensation practice on understanding and handling complex jurisdictional issues, both at the circuit court and appellate court level. Brad's extensive experience in handling judicial reviews of Workers' Compensation Commission decisions has given him statewide recognition. He has also tried several cases, including jury trials. Brad has authored more than 300 appellate briefs and argued more than 200 appellate court cases, resulting in more than 98 published decisions, and numerous unpublished appellate court orders. He has appeared before every Illinois Appellate Court District, the Missouri Appellate Court, the Seventh Circuit Court of Appeals and has significant experience handling interlocutory appeals, in particular those under Supreme Court Rules 306 and 308. He also handles administrative reviews. He has authored several amicus curiae briefs before the Illinois Supreme Court on behalf of the Illinois Association of Defense Trial Counsel. His most recent amici were filed in Fennell v. Illinois Central R.R. Co., 2012 IL 113812, involving interstate forum non conveniens, and Folta v. Ferro Engineering, 2015 IL 118070, involving the workers' compensation exclusive remedy provision and asbestos claims. Brad is a past President of the Illinois Appellate Lawyers Association and past Chair of the Peoria County Bar Association CLE Committee. He has published articles in numerous prominent journals and magazines, including the Illinois Bar Journal, Southern Illinois University Law Journal, Northern Illinois University Law Journal, Illinois Defense Counsel Quarterly, DRI For the Defense, and IICLE.

He is the co-editor-in-chief of the 2015 edition of the IICLE volume on Illinois Appellate Practice: State and Federal, for which he authored or co-authored eight chapters. Brad writes frequently on procedural issues affecting appeals and workers' compensation, has taught courses on workers' compensation law for Illinois Central College, and has lectured on appellate practice before the Illinois State Bar, Peoria County Bar, Illinois Institute for Continuing Legal Education, and Southern Illinois University School of Law. He is the current co-editor of the firm's workers' compensation newsletter, published monthly, and is the 2015-2016 Editor-in-Chief of the Illinois Association of Defense Trial Counsel publication The IDC Quarterly. Brad is also a member of the drone law practice group, which advises clients on issues relating to drone operations, and a member of the military law practice group. Significant Cases Bowman v. Ottney, 2015 IL 119000 - Successfully

defended circuit court ruling to deny the plaintiff's motion for substitution of judge in a refiled case, when same judge had made substantive rulings in prior litigation that had been voluntarily dismissed.

Hartney Fuel Oil Company, et al. v. Hamer, et al., 2013 IL 115130 - Suit was filed by a retail sales taxpayer against our client, The Regional Transportation Authority (RTA), the Illinois Department of Revenue, and a Cook County municipality contending that the assessment of back sales taxes of $20+ million was incorrect. Ultimately, the RTA's position was upheld in the Illinois Supreme Court. While the taxpayer was not required to pay back taxes pursuant to the Taxpayer Bill of Rights, the Illinois Supreme Court invalidated existing regulations in adopting a "multi-factor test" as argued for by the RTA, a decision which had statewide application to sales tax sourcing favoring governmental entities such as our client.

Glass v. DOT Transportation, Inc., 393 Ill. App. 3d 829 (1st Dist. 2009) - In the forum non


B-19

conveniens setting, deference may be given to the selection of forum by a representative plaintiff, who is also a beneficiary under the Wrongful Death Act.

Rosewood Care Center, Inc. v. Caterpillar, Inc., 226 Ill. 2d 559 (2007) - Illinois does not recognize a preexisting debt rule when interpreting the statute of frauds, but rather applies a "main purpose" or "leading object" rule, which states that when the main purpose or leading object of the promisor/surety is to subserve or advance its own pecuniary or business interest, the promise does not fall within the statute of frauds.

Deichmueller Const. Co. v. Industrial Comm’n, 151 Ill. 2d 413 (1992) - Employer's appeal bond must be signed by individual with authority to bind employer to financial obligation represented by bond; attorney cannot sign unless authorized by said individual.

Chaney v. Yetter, 315 Ill. App. 3d 823 (4th Dist. 2000) - Client of borrowing employer was entitled to protection of exclusive remedy provisions of Workers' Compensation Act for claim filed by borrowed employee.

Pearson v. Industrial Comm’n, 318 Ill. App. 3d 932 (3d Dist. 2001) - Outlines steps to establish volunteer fireman status and rejects application of emergency doctrine.

Bush v. Catholic Diocese, 351 Ill. App. 3d 588 (3d Dist. 2004) - A party has no First Amendment right to disseminate information obtained and gathered in preparation for trial.

Craigmiles v. Egan, 248 Ill. App. 3d 911 (4th Dist. 1993) - Appellate court's prior order refusing to grant leave to appeal of order granting new trial did not have preclusive effect on ability to raise issue in subsequent appeal.

Bernardoni v. Industrial Comm’n, 362 Ill. App. 3d 582 (3d Dist. 2005) - Frye standard for evaluating admissibility of expert or scientific evidence applies to workers' compensation proceeding; Illinois does not recognize claims for multiple chemical sensitivity (MCS).

Radosevich v. Industrial Comm’n, 367 Ill. App. 3d 769 (4th Dist. 2006) - Section 19(i) interest runs from date of award; Section 2-1303 interest commences only when circuit court enters judgment on award under Section 19(g).

Publications "Survey of Illinois Law: Workers'

Compensation—Understanding Interest and

Enforcement Issues in Workers' Compensation Cases Following an Award of Benefits," Southern Illinois Bar Journal (2015)

"Interlocutory Appeals of Certified Questions" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education (2015)

"Workers' Compensation Appeals" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education (2015)

"Motion Practice" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education (2015)

"Direct Appeals to the Illinois Supreme Court" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education (2015)

Professional Recognition Named to the Illinois Super Lawyers list (2008-

2016). The Super Lawyers selection process is based on peer recognition and professional achievement. Only five percent of the lawyers in each state earn this designation.

Selected as a Leading Lawyer in Illinois in the area of Civil Appellate Law. Only five percent of lawyers in the state are named as Leading Lawyers.

Professional Associations Appellate Lawyers Association (President, 2013-

2014; Director 1997-99; Rules Chairman, 1999-2001; Rules Committee, 2005-06; event coordinator; past moot court competition judge)

Illinois State Bar Association (Workers' Compensation Section Council, 1998-2000)

Peoria County Bar Association (Chair, CLE Committee, 2013-2014)

Illinois Association of Defense Trial Counsel (IDC Quarterly Executive Editor)

Court Admissions State Courts of Illinois United States Court of Appeals, Seventh and

Eighth Circuits United States District Court, Central and

Southern Districts of Illinois

Education Juris Doctor, Southern Illinois University (magna

cum laude), 1989 Bachelor of Science-Economics, University of

Illinois, 1986


B-20

Amber D. Cameron

- Of Counsel

Amber concentrates her practice in the areas of workers' compensation and toxic tort litigation. Her workers' compensation defense practice entails representing employers of all sizes at dockets in southern Illinois and eastern Missouri. She also devotes a portion of her practice to the defense of asbestos personal injury suits, representing the firm's clients at depositions, hearings, and procedural matters. Prior to joining Heyl Royster in 2015, Amber was a staff attorney at the Illinois Workers' Compensation Commission where she assisted Commissioners deciding workers' compensation claims. At the Commission, she drafted hundreds of opinions on review and on remand, gaining advanced knowledge in workers' compensation law. Prior to the Commission, Amber worked at a mid-sized defense firm in the St. Louis Metro East area where she represented clients in the defense of workers' compensation and human rights claims throughout Illinois and Missouri. Amber earned her law degree and a certificate in dispute resolution from the University of Missouri-Columbia School of Law. As a law student, she served as Vice-Justice of the Lawson Chapter of Phi Alpha Delta Law Fraternity and excelled in legal writing, winning Best Brief in the Board of Advocates Moot Court Competition.

Professional Associations Illinois State Bar Association Bar Association of Metropolitan St. Louis Madison County Bar Association Madison County Women Lawyers

Court Admissions State Courts of Illinois State Courts of Missouri United States District Court, Southern District

of Illinois Education Juris Doctor, University of Missouri-Columbia

School of Law, 2005 Certificate, Dispute Resolution, University of

Missouri-Columbia School of Law, 2005 Bachelor of Science-Finance, Saint Louis

University, 2001


B-21

Lindsey M. D’Agnolo

- Associate

Lindsey focuses her practice in the areas of business and commercial litigation, long term care/nursing homes, and workers' compensation. She began her practice in Rockford, Illinois concentrating in the areas of civil rights and employment law, as well as nursing home litigation defense. Lindsey has handled all aspects of litigation including pleadings, discovery, motion practice, and trial preparation. Lindsey received her J.D. from California Western School of Law in San Diego in 2011. While in law school, she gained significant litigation experience when she spent her last semester interning in the Winnebago County State's Attorney's Office as a 711 intern. Lindsey also gained valuable research and writing skills when she served as judicial extern for the Honorable Judge Frederick J. Kapala in the U.S. District Court, Northern District of Illinois. Lindsey received her bachelor's degree from the University of Illinois – Urbana Champaign in 2008. She is a member of the Illinois State Bar Association and Winnebago County Bar Association. Lindsey is currently serving as Treasurer of the Winnebago County Bar Association, Young Lawyers Division.

Professional Associations Winnebago County Bar Association Treasurer – Winnebago County Bar Association,

Young Lawyers Division (2015-2016) Illinois State Bar Association McHenry County Bar Association (2013-2015)

Court Admissions State Courts of Illinois United States District Court, Northern District

of Illinois Education Juris Doctor, California Western School of Law,

2011 Bachelor of Arts-Economics, University of

Illinois, 2008


B-22

Steven W. Getty

- Associate

Steve focuses his practice in the representation of employers in Workers' Compensation claims. Steve began his practice as an Assistant State's Attorney in the Winnebago County State's Attorney's Office. As a prosecutor, he handled matters ranging from misdemeanor criminal charges to felony cases. He handled all aspects of the criminal prosecution, from plea negotiations to obtaining arrest warrants and charging. Additionally, he prosecuted cases through to jury trial and sentencing when a guilty verdict was obtained. As a result, Steve has extensive jury trial experience in both first-chair and second-chair positions. Further, he litigated many substantive legal motions, including motions to suppress physical evidence and statements as well as civil statutory summary suspension hearings. He also assisted smaller communities in Winnebago County by serving as a liaison between the State's Attorney's Office and their respective police departments. Steve continued his practice in the public sector most recently as an Assistant State's Attorney in the McHenry County State's Attorney's Office where he focused on the prosecution of Domestic Violence cases and the Mental Health Court. Steve received his Juris Doctor from the Thomas M. Cooley Law School in 2011 and his Bachelor of Arts from Western Illinois University in 2008.

Public Speaking “Safety Audits – Compliance with OSHA and

other safety standards – ‘Do they apply to my business?’” Heyl Royster “Avoiding Litigation” Seminar, Rockford (2016)

Professional Associations Winnebago County Bar Association

Court Admissions State Courts of Illinois

Education Juris Doctor, Thomas Cooley Law School, 2011 Bachelor of Arts-Political Science, Western

Illinois University, 2008


B-23

Dana J. Hughes

- Partner

Born and raised in Rockford, Dana joined the firm's Rockford office as an associate in 2006. There, she defended the rights of employers in workers' compensation claims before arbitrators and commissioners at the Illinois Workers' Compensation Commission and protected their interests in state courts in third party claims. She was an active member in the Winnebago County Bar Association, serving on its Board of Directors and Diversity Committee, and as past Chair of the association's Workers' Compensation Section. Dana also served as an arbitrator for the Seventeenth Judicial Circuit's Court-Annexed Arbitration System. In April of 2015, Dana relocated to the firm's Peoria office to join its workers' compensation group, where she continues to concentrate her practice in the representation of employers throughout the central part of the state. She became a partner in 2016. Dana is a member of the Peoria County Bar Association, Illinois Association of Defense Trial Counsel and Defense Research Institute. Dana is an annual contributor to the firm's claims handling seminar and the firm's monthly publication devoted to workers' compensation issues, Below the Red Line. She has contributed to in-house newsletters for clients and has presented before the ISBA's Insurance Law Section. She has been a guest speaker to local community college and high school students on topics such as leadership and the practice of law. In 2015, Dana co-authored an extensive survey of Illinois Workers' Compensation Law published in the Southern Illinois University Law Journal. While in law school, Dana was a student representative to the Illinois State Bar Association. She served as a judicial law clerk in the Fifteenth Judicial Circuit. She was member of the NIU Law Review, where her writing was published in the Northern Illinois University Law Review and Kane County Bar Journal. Dana was also recipient of the Women's Bar Foundation's scholarship, which is awarded to one female law student from each of Illinois' law schools. Publications "Survey of Illinois Law: Workers'



"Survey of Illinois Law: Workers' Compensation," Southern Illinois University Law Journal (2014)

"Appellate Court Further Restricts Employer's Ability to Terminate Temporary Total Disability Where Employee Was Discharged for Cause," Illinois Defense Counsel Quarterly (2015)

Public Speaking “Illinois Workers’ Compensation – Back to

Basics” Mid-West Truck & Trailer Show, Peoria (2016)

“Social Media: A New Litigation Tool?” Winnebago County Bar Association’s Trial Section (2012)

“Uninsured & Underinsured Motorist Coverage” ISBA Insurance Law Section (2011)

Professional Recognition Named to the Leading Lawyers Emerging

Lawyers list (2015). Only 2 percent of Illinois lawyers under the age of 40 or who have been licensed to practice for 10 years or less earn this distinction.

Professional Associations Peoria County Bar Association Winnebago County Bar Association (Board of

Directors, 2009-2012) Illinois State Bar Association Illinois Association of Defense Trial Counsel Defense Research Institute

Court Admissions State Courts of Illinois United States District Court, Northern District

of Illinois Education Juris Doctor (cum laude), Northern Illinois

University College of Law, 2006 Bachelor of Arts-Sociology, Northern Illinois

University, 2003


C-1

WC CLAIMS HANDLING LIABILITY: WHAT THEY DO WHEN THEY DO NOT HAVE A CASE

Presented and Prepared by: Kevin J. Luther

[email protected] Rockford, Illinois • 815.963.4454 Chicago, Illinois • 312.853.8700



C-2


I. NEGLIGENT SPOLIATION OF EVIDENCE ............................................................................................. C-4

A. Boyd v. Travelers Inc. Co. ............................................................................................................ C-4 B. Dardeen v. Kuehling .................................................................................................................... C-5 C. When is a Duty to Preserve Evidence Triggered? ............................................................ C-7 D. When Does the Duty to Preserve Evidence Arise? .......................................................... C-9 E. Who Has an Obligation to Preserve Evidence? ................................................................ C-9 F. What Happens if Evidence is Not Preserved? ................................................................... C-9

1. Damages ........................................................................................................................... C-9 2. Sanctions ........................................................................................................................ C-10

G. Practical Tips to Avoid Spoliation ........................................................................................ C-10 II. LEGAL HOLD: PRESERVATION OF EVIDENCE REQUIRED BY EMPLOYER AND CLAIMS REPRESENTATIVE ........................................................................................................... C-11

A. Legal Background ...................................................................................................................... C-11 B. Litigation Hold Requirement ................................................................................................. C-12 C. Example of a Litigation Hold Letter ..................................................................................... C-14

III. 4(c) LIABILITY: POLICY OF DELAY, UNFAIRNESS, OR INTERFERENCE WITH WC RIGHTS AND REMEDIES ..................................................................................................... C-15

A. Delay or Unfairness ................................................................................................................... C-15 B. Discrimination.............................................................................................................................. C-16 C. Cook v. Optimum/Ideal Managers, Inc. ............................................................................... C-17 D. Ewing v. Liberty Mutual Ins. Co. ............................................................................................. C-17

IV. COMMON LAW FRAUD LIABILITY ...................................................................................................... C-18

A. West v. Western Casualty & Surety Co. .............................................................................. C-18 V. EX PARTE COMMUNICATION BETWEEN EMPLOYEE’S DOCTOR AND THE EMPLOYER OR INSURANCE CARRIER’S REPRESENTATIVES ............................................ C-20

A. Hydraulics, Inc. v. Industrial Comm’n .................................................................................. C-20

C-3

VI. WC RULES AND PROCEDURES ............................................................................................................ C-22

A. Distribution of IWCC Handbook .......................................................................................... C-22 B. Explanation of Basis of Non-Payment, Termination or Suspension of

Temporary Total Compensation or Denial of Liability or Further Responsibility for Medical Care ............................................................................................ C-22

VII. MEDICAL BILL PAYMENT LIABILITY .................................................................................................... C-23

A. Payment Deadlines and Interest .......................................................................................... C-23 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.

C-4


I. NEGLIGENT SPOLIATION OF EVIDENCE

A. Boyd v. Travelers Inc. Co.

The general rule in Illinois is that there is no duty to preserve evidence. Boyd v. Travelers Ins. Co., 166 Ill. 2d 188, 195 (1995). However, a plaintiff may establish an exception to the general “no-duty” rule where he can satisfy a two-prong test. Under the first prong, or the “relationship” prong of the test, the plaintiff must show that an agreement, contract, statute, special circumstance, or voluntary undertaking has given rise to a duty to preserve evidence on the part of the defendant. Boyd, 166 Ill. 2d at 195. Under the second prong, or the “foreseeability,” prong of the test, plaintiff must show that the duty extends to the specific evidence at issue by showing that “a reasonable person in the defendant’s position should have foreseen that the evidence was material to a potential civil action.” Id. Traditionally, Illinois courts did not recognize a separate cause of action for spoliation of evidence. It was not until 1995 that the Illinois Supreme Court established that a claim for spoliation of evidence can be brought under existing negligence law. In Boyd, plaintiff Tommy Boyd was injured when the propane catalytic heater he was using while working inside a van owned by his employer exploded. Plaintiff soon filed a workers’ compensation lawsuit against his employer. Travelers Insurance was his employer’s workers’ compensation insurer. Two days after the explosion, a Travelers’ claims adjuster and another Travelers’ employee visited the Boyd residence and took possession of the heater. The Travelers’ representatives told Mrs. Boyd that Travelers needed the heater to investigate the workers’ compensation claim and determine the cause of the explosion. The heater was subsequently placed in a closet at a Travelers office, and when plaintiffs requested that the heater be returned, Travelers was unable to locate it. Id. at 191. In addition to filing suit against Coleman, the manufacturer of the heater, plaintiffs brought a suit against Travelers alleging negligent and willful and wanton spoliation of evidence. Plaintiffs alleged they were injured by the loss of the heater because they were not able to obtain an expert’s opinion as to whether the heater was defective or dangerously designed, and therefore the loss of the heater had prejudiced their ability to pursue a product liability claim against Coleman. The trial court granted Travelers’ motion to dismiss the spoliation allegations on the basis that even though Illinois would recognize an independent cause of action for spoliation “given the right facts,” the Boyd’s claims were “premature unless and until they lost the underlying suit” against Coleman. Id. at 192. The Supreme Court disagreed, finding that, like a majority of other jurisdictions, Illinois does not recognize an independent cause of action for spoliation. The court reasoned that “[c]ourts have long afforded redress for the destruction of evidence and, in our opinion, traditional remedies adequately address the problem presented in

C-5

this case.” Id. at 194. While the court found plaintiffs could state a claim for spoliation under existing negligence law, it reserved the issue of whether intentional spoliation was actionable under Illinois law. Thus, in order to plead a cause of action for spoliation of evidence, plaintiffs had to prove: (1) the existence of a duty owed by the defendant to plaintiff; (2) a breach of that duty; (3) an injury proximately caused by the breach; and (4) damages resulting from the breach. Id. at 194-195. The Supreme Court found there is generally no duty to preserve evidence. However, a duty to preserve may arise through an agreement, contract, statute, affirmative conduct, or another special circumstance. Id. at 195. In any of the foregoing instances, a defendant owes plaintiff a duty of due care to preserve evidence if a reasonable person in the defendant’s position should have foreseen that the evidence was material to a potential civil action. Id. In analyzing the issue of duty, the court found that Travelers voluntarily assumed a duty to preserve the heater when they visited the Boyd home and took possession of the heater, telling the Boyds that Travelers needed the heater to investigate the cause of the explosion and to evaluate the workers’ compensation claim. In short, Travelers, a sophisticated insurer, knew that the heater was evidence relevant to the litigation when they took possession of the heater just two days after the explosion. With respect to the element of causation, the Supreme Court rejected Travelers’ position that the Boyds were required to lose the underlying lawsuit before they could pursue a cause of action against it for spoliation of evidence. The court held plaintiffs simply need to allege sufficient facts to establish that the loss or destruction of the evidence caused the plaintiffs to be unable to prove an underlying suit. Id. at 197.

B. Dardeen v. Kuehling

In 2004, the Illinois Supreme Court revisited the issue of spoliation in Dardeen v. Kuehling, 213 Ill. 2d 329 (2004). In Dardeen, the plaintiff fell in a hole in the sidewalk while delivering newspapers at defendant’s residence. After being notified of Dardeen’s accident, defendant Kuehling called her agent at State Farm to report the accident and ask whether some bricks in the sidewalk could be removed to prevent any further injuries. The agent said yes, and the homeowner proceeded to remove the bricks to fix the hole. Plaintiff filed a premises liability complaint against Kuehling, which included a claim for negligent spoliation against Kuehling and State Farm. The trial court granted defendants’ motion for summary judgment, the appellate court reversed, and the Illinois Supreme Court heard the case. The court in Dardeen held that the plaintiff failed to establish the first required element of his claim. Dardeen alleged that the duty to preserve evidence arose from the insurance contract between State Farm and the homeowner. However, the court clarified its use of the term “agreement” by explaining that the agreement mentioned in the Boyd test had to be between the parties to the spoliation claim; i.e., plaintiff Dardeen and State Farm. It was clear that the

C-6

insurance agreement between the homeowner and State Farm did not provide for a duty to preserve evidence relative to Dardeen. Dardeen, 213 Ill. 3d at 337-338. The court further reasoned that Dardeen never contacted the defendant to ask it to preserve evidence. Dardeen never requested evidence from State Farm, nor did he ever request that State Farm preserve the sidewalk or even document its condition. Additionally, unlike Boyd, State Farm never possessed the evidence at issue and, thus, never segregated it for the plaintiff’s benefit. Id. at 338. State Farm argued, and the court agreed, that “no Illinois court has held that a mere opportunity to exercise control over the evidence at issue is sufficient to meet the relationship prong.” Id. at 339. Without evidence of possession or control by State Farm of the sidewalk, the court found State Farm owed no duty to Dardeen to preserve it. Id. More recently, the issue of sanctions was discussed in Adams v. Bath & Body Works, Inc., 358 Ill. App. 3d 387 (1st Dist. 2005). Adams, a tenant whose wife died in a house fire, brought a products liability action against the manufacturer and distributor of a candle, the alleged cause of fire, and a Smoke Detector Act claim against the property owner, Ms. Kubasak. The manufacturer and distributor of the candle filed a third-party action against the property owner’s insurer, State Farm, for negligent spoliation of evidence. Although neither state nor city fire inspectors were able to pin down the cause of the fire in Adams' residence, they were able to determine that the fire began near a couch located in the living room. During the investigation, plaintiff’s counsel removed two lamps from the residence that were suspected by government fire investigators to be the potential cause of the fire. Later, plaintiff’s own investigator opined that the fire was caused by a candle located on a table in the living room. In the meantime, Kubasak hired a fire restoration company to clean up debris. Unbeknownst to plaintiff, the fire restoration company removed and destroyed an end table, the couch, other items that belonged to plaintiff, and some carpeting. State Farm hired an expert to investigate the cause of the fire. During the expert’s deposition, he testified that after ruling out the home’s wiring, appliances, and fixtures, he believed one possible cause of the fire was a candle placed on the end table. His belief was based on the fact that the area in which these items were located contained the heaviest “char or burn marks,” as well as plaintiff’s statement to fire inspectors that he blew out a candle on the end table before going to bed on the night of the fire. Because the end table, couch, and carpet had been destroyed, however, there was no physical evidence that would either support or refute plaintiff’s statement as to the candle’s location in the residence. Further, plaintiff did not learn of the expert’s opinion until long after the end table, couch, and carpet had been destroyed. The circuit court granted a motion filed by the candle manufacturer and distributor dismissing plaintiff’s claims as a discovery sanction pursuant to Supreme Court Rule 219(c) for failing to preserve evidence. On appeal, plaintiff contended that the circuit court abused its discretion in dismissing his complaint as a discovery sanction because he did not know the table was relevant evidence, nor was he responsible for its destruction. Defendants argued plaintiff should have

C-7

known the items might be relevant in determining the cause of the fire, and therefore plaintiff breached his duty under Boyd and Shimanovsky to preserve the evidence. The appellate court discussed the potential conflict between the supreme court’s decisions in Boyd and Shimanovsky and the recent treatment of those decisions in Dardeen. The court, citing Dardeen, reversed the lower court stating that when key evidence is destroyed prior to the time a suit is filed, a party has two separate forms of relief available: a negligence claim for spoliation of evidence or a motion for sanctions under Rule 219(c). Adams, 358 Ill. App. 3d at 393-394. The lesson to be taken from this is that the two remedies; i.e., a claim for negligent spoliation of evidence in Boyd and dismissal as a sanction under Rule 219(c) in Shimanovsky, are separate and distinct. Dardeen, 213 Ill. 2d at 339-40.

In other words, Shimanovsky and Boyd present a party confronted with the loss or destruction of relevant, material evidence at the hands of an opponent with “two roads diverged in a wood.” He may either (1) seek dismissal of his opponent’s complaint under Rule 219(c) or (2) bring a claim for negligent spoliation of evidence. The mode of relief most appropriate will depend upon the opponent’s culpability in the destruction of the evidence. The former requires conduct that is “deliberate [or] contumacious or [evidences an] unwarranted disregard of the court’s authority” and should be employed only “as a last resort and after all the court’s other enforcement powers have failed to advance the litigation.” The latter requires mere negligence, the failure to foresee “’that the [destroyed] evidence was material to a potential civil action.’” Because [the candle manufacturer and distributor] chose to take the Rule 219(c) road, any reliance upon Boyd or its progeny to support the circuit court’s sanction is inappropriate. (Citations omitted.)

Id. at 393-94. The appellate court reversed the lower court’s sanction, holding that first, plaintiff did not engage in any “knowing and willful defiance of the discovery rules or the trial court’s authority.” Id. at 396, citing Shimanovsky v. GMC, 181 Ill. 2d 112, 129 (1998). The destruction of the end table, couch, and carpet occurred long before plaintiff filed his lawsuit. Second, the carpet belonged to Kubasak, and it is questionable whether he could have compelled her to preserve it. Third, even if he could have preserved this evidence, plaintiff had no knowledge that it might have been relevant and material. Finally, and perhaps most importantly, plaintiff played no role in, nor had any notice of, the destruction of the evidence which defendants claim was essential to their defense. Adams, 358 Ill. App. 3d at 396.

C. When is a Duty to Preserve Evidence Triggered?

The Illinois Supreme Court has provided clarification to the duty exception with respect to the voluntary undertaking and special circumstance exceptions. Martin v. Keeley & Sons, Inc., 2012 IL

C-8

113270. In Martin, plaintiffs were working on a project involving the reconstruction of a bridge as employees of the project’s general contractor, defendant Keeley. While plaintiffs were installing a handrail on the bridge, a concrete I-beam used to support the bridge deck collapsed, causing plaintiffs to fall into the creek below. Plaintiffs received injuries as a result of the fall. Site inspections were performed by the Illinois Department of Transportation (IDOT), and the Occupational Safety and Health Administration (OSHA) on the day of the accident. The day after the accident, Keeley destroyed the I-beam by breaking it up with a hammer in order to remove the beam from the creek to prevent erosion and to recover the “embeds,” embedded steel plates inside the beam, so that they could be used in the manufacture of a replacement beam. Plaintiffs filed suit against their employer, Keeley, as well as the manufacturer of the I-beam, Egyptian Concrete Company, and the designer of the bearing assembly that supported the I-beam, Allen Henderson & Associates, Inc. Plaintiffs’ claims against Keeley were for negligent spoliation of evidence. Subsequently, Egyptian and Henderson brought counterclaims against Keeley, which also included claims for negligent spoliation of evidence. The question of fact surrounding the negligence claims was whether the beam rolled over before it broke. Neither plaintiffs nor Keeley’s co-defendants had an opportunity to inspect the beam before it was destroyed. Martin, 2012 IL 113270, ¶¶ 1-4. The trial court granted Keeley’s motion for summary judgment and found that Keeley had no duty to preserve the I-beam for the benefit of the other parties. Id. ¶ 20. On appeal, the appellate court reversed the trial court’s grant of summary judgment and remanded the case for further proceedings. The appellate court found that “by preserving the I-beam for its own purposes, Keeley voluntarily undertook a duty to exercise due care to preserve the beam for the benefit of other potential litigants.” Id. ¶ 21. The Illinois Supreme Court granted review to address whether Keeley owed a duty to preserve the I-beam for the other parties. Plaintiffs and counter-defendants argued that Keeley voluntarily undertook a duty to preserve the I-beam for its own purposes thus satisfying the first prong of the Boyd analysis or, alternatively, Keeley's exclusive possession and control of the evidence, its status as plaintiffs’ employer and its status as a potential litigant gave rise to a “special circumstance” in which Keeley had a duty to preserve the evidence. Id. ¶ 28. The court found there was no voluntary undertaking by Keeley to preserve the evidence for future litigation that would give rise to a duty to preserve the I-beam for other parties. A voluntary undertaking requires showing of affirmative conduct by the party evidencing its intent to voluntarily assume a duty to preserve evidence. Id. ¶ 31. The court noted that Keeley never performed any testing of the beam nor did it move the beam from the place where it had fallen. Although Keeley allowed IDOT and OSHA to inspect the beam, this was not sufficient to give rise to a duty to preserve the beam for other parties. The court recognized that a “voluntary undertaking requires some affirmative acknowledgement or recognition of the duty by the party who undertakes the duty.” Id. ¶ 36. The court also found that plaintiffs and co-defendants had failed to establish special circumstances that would give rise to a duty to preserve the I-beam. Citing its prior decisions, the court held that Keeley’s mere possession and control of the I-beam was insufficient to create

C-9

a special circumstance exception to the general “no duty” rule absent some other evidence such as a request by another party to preserve the evidence and/or the defendants segregation of the evidence for the plaintiff’s benefit. Moreover, the court also rejected the argument that an employer-employee relationship was sufficient to establish a duty to preserve evidence.

D. When Does the Duty to Preserve Evidence Arise?

Determining whether a duty to preserve evidence exists is a fact-sensitive analysis, and defense counsel should be consulted whenever possible. Although there generally is no duty to preserve evidence in Illinois, a duty may arise through agreement, contract, statute, special circumstance, or affirmative conduct. Once a duty to preserve is established, the duty extends to any evidence that a reasonable person would foresee as being material to the potential civil action. With respect to the “special circumstance” exception, courts have found that in order to give rise to a “special circumstance” in which a party has a duty to preserve evidence, there must be some affirmative conduct undertaken to preserve evidence for use in future litigation. Mere possession and control of the evidence may not be enough to establish a duty. However, when a party has knowledge of documents, photographs, or tangible evidence related to an accident and takes possession and/or control of those items for the purpose of litigation, it affirmatively assumes the duty to protect that evidence from harm for the benefit of other parties. Once the party is in control of the items, it must exercise ordinary care to prevent loss, damage, alteration, or destruction of the evidence.

E. Who Has an Obligation to Preserve Evidence?

The duty to preserve evidence extends beyond the agent, adjuster, or claims representative assigned to a given case. The duty to preserve also applies to any consultants, experts, insureds, or any other individuals acting under the supervision or direction of the insurer. Therefore, claims professionals must take adequate care to properly supervise the actions of such individuals and be vigilant in preventing loss destruction or alteration of evidence.

F. What Happens if Evidence is Not Preserved?

1. Damages

In a negligent spoliation claim, the actual damage to plaintiff is the loss of the ability to succeed on the underlying action. The Boyd case suggests that when evidence is spoiled, the insurer may be liable for actual damages or the actual harm suffered by the plaintiff as a result of the destruction of evidence. Because the actual loss to the plaintiff in a spoliation case is the inability to succeed in the underlying action, the actual damages may include those complained of in the underlying suit. Therefore, it is crucial that steps are taken to properly preserve evidence when a duty to do so has arisen.

C-10

2. Sanctions

Apart from monetary damages, another potential remedy for a spoliation claim is the imposition of sanctions against the defendant. The court may elect to use its supervisory powers to impose sanctions such as striking pleadings, barring expert testimony, excluding other relevant evidence, giving adverse jury instructions, which permit the jury to presume that the unavailable evidence was harmful to the party responsible for the spoliation, or, in rare circumstances, dismissing the suit.

G. Practical Tips to Avoid Spoliation

Claims professionals should take steps to ensure evidence is properly preserved following an incident to avoid the risk of spoliation. Failing to take steps to avoid the loss, destruction, alteration, or concealment of evidence may subject the insurer and the insured to severe sanctions if the other party can prove it has suffered some prejudice. 1. Before suit is filed, claims professionals should ensure that steps are taken to preserve

evidence that may be relevant to the potential suit. It is important to preserve the evidence in its entirety, not just the parts that may appear relevant to the insured, carrier, or expert. The claims professional should also remember that in some circumstances, it might be impossible or impracticable to preserve the evidence in its found state. In that situation, it is critical to document why the evidence could not be preserved.

2. If the claims professional is aware of potential evidence before suit is filed, he should

attempt to obtain an agreement from the possessor of the evidence that the evidence will be preserved and that no destructive testing will occur without notice. In some circumstances, the claims professional may want to have the evidence inspected by an expert. If, after notice, a product which is not inspected is subsequently lost, a court may determine that, although some sanction is necessary, failure to inspect the product might not warrant dismissal of the case.

3. Creation of an evidence locker or evidence room will help to avoid spoliation. Evidence

can be identified, marked, and located in a manner that prevents loss or destruction of the evidence. In the event evidence is too large to be stored in a locker or room, it is important to document your file regarding the location and condition of the evidence. You should also attempt to confirm in writing that the possessor of the evidence will agree to preserve it and will refrain from taking any action that will alter the evidence.

4. When appropriate, the claims professional should work with defense counsel to evaluate

whether a protective order requiring preservation of the evidence is warranted. A protective order can prevent any party from engaging in destructive testing without notice or agreement of the other parties. A protective order can be obtained even before suit is filed.

C-11

5. Claims professionals should notify experts that destructive testing should not be performed without prior approval. If testing is contemplated, the carrier needs to determine the type of test that will be performed and whether it will alter or destroy the evidence. If the test if going to be destructive, the carrier may want to seek an order from the court permitting such testing.

II. LEGAL HOLD: PRESERVATION OF EVIDENCE REQUIRED BY EMPLOYER AND CLAIMS REPRESENTATIVE

A. Legal Background

The advent of electronic systems and discovery brought with them a new dimension to litigation with potentially serious consequences for the unwary. Not long ago a, $1.45 billion judgment ($604 million compensatory, $850 million punitive), plus ongoing interest charges in excess of $200 million, was entered against Morgan Stanley. In that case, the judge took the unusual step of instructing the jury that it should assume Morgan Stanley had participated in a scheme to mislead and cover up information because it and its lawyers had consistently and deliberately violated the judge’s electronic discovery orders by failing to produce internal emails. In another well-known case, a $29.3 million judgment was entered against UBS Warburg in favor of a former employee in the context of a sex discrimination claim. Because of UBS’s failure to preserve and produce emails, the court instructed the jury it could assume that any emails discarded by the bank after the plaintiff filed her EEOC complaint would have hurt its case. This instruction had obvious consequences given the jury’s verdict. In light of these concerns, it is imperative at the outset of litigation that you understand your obligations with respect to the preservation of electronic data and information in all its forms. The series of reported decisions arising from the employment discrimination suit of Laura Zubulake against UBS Warburg LLC in the U.S. District Court, Southern District of New York, has created a set of guiding principles concerning electronic discovery that must be followed in this case. In Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 312 (S.D.N.Y. 2003) (referred to generally as Zubulake I), Judge Scheindlin addressed the issues of both the scope of electronic discovery and who should pay for its production. At this time, there is no question, subject to any limitations set forth in the applicable procedural rules on discovery, that essentially all electronic data is potentially discoverable. This includes email sent or received by any employee, other “active” information stored on servers, or information stored on backup tapes or other media that are capable of restoration, even if the information was deleted at some prior time. In the appropriate case, the court will consider whether the cost of producing such information should be shifted from the party possessing the information to the party requesting the information. That determination, however, does not affect the basic obligation of every party, including business entities and all of their employees, to preserve all electronic data once the reasonable likelihood of litigation becomes apparent.

C-12

The failure to properly preserve such information can result in serious adverse consequences. In Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) (Zubulake IV), the court addressed the obligations of the litigants. Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents. It is imperative that the implementation of a litigation hold plan identifies the location of any potentially relevant electronic data, determines the accessibility of relevant electronic data, and ensures that all relevant electronic data, and possibly metadata, is properly preserved. Once a litigation hold has been issued, it must be periodically reissued so that new employees are aware of it and it remains fresh in the mind of all employees. Furthermore, counsel must meet with the key players, explain the preservation obligation, and periodically remind them that the preservation duty is still in place. The failure to implement, monitor, and document a litigation hold plan could result in serious adverse consequences. A party’s obligations do not end with the implementation of a litigation hold. Counsel must oversee compliance with the litigation hold and monitor the party’s efforts to retain and produce the relevant documents. Proper communication between the lawyer and the client must ensure that all relevant information, or at least all sources of relevant information, is discovered and retained on a continuing basis and that relevant nonprivileged material is produced to the opposing party. In Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004) (Zubulake V), the court discussed the obligation of lawyers, both in-house and outside counsel, to communicate to their clients clearly and effectively the client’s obligation to preserve and timely produce all relevant electronic information and to heed counsel’s instructions on preservation on an ongoing basis. In addition, independent of the client’s obligations, legal counsel have an obligation to take steps to safeguard backup tapes, request retained information from key employees, and give litigation hold instructions to the client’s key employees. Failure to follow these admonitions could result in the court finding there has been spoliation of evidence that will result in the imposition of sanctions. Although the issues in Zubulake V were not in front of the court in Hagemeyer North America, Inc. v. Gateway Data Sciences Corp., 222 F.R.D. 594 (E.D. Wis. 2004), in that case Judge Randa, the Chief Judge for the United States District Court, Eastern District of Wisconsin, found the reasoning of Zubulake I persuasive. He specifically adopted the seven-factor test of Zubulake I in addressing a dispute on the scope of requested discovery and the issue of cost shifting. Barring the development of any case law to the contrary, any case venued in the Eastern District of Wisconsin, should operate under the assumption that the court’s reasoning in all of the Zubulake cases will ultimately apply to this action.

B. Litigation Hold Requirement

To comply with counsel’s obligations, once a litigation hold is in place, a party and counsel must make certain that all sources of potentially relevant information are identified and placed on

C-13

hold. To do that, counsel must become fully familiar with the client’s document retention policies as well as the client’s data retention architecture. This will invariably involve speaking with information technology personnel, who can explain system-wide backup procedures and the actual (as opposed to theoretical) implementation of the firm’s recycling policy. It will also involve communicating with the “key players” in the litigation in order to understand how they stored information. In Zubulake, for example, some of the UBS employees created separate computer files pertaining to the plaintiff, while others printed out relevant emails and retained them in hard copy only. Unless counsel interviews each employee, it is impossible to determine whether all potential sources of information have been inspected. It is not necessary for counsel to review the documents at that time, only that counsel ensures that they are retained. It is not sufficient to notify all employees of a litigation hold and expect that the party will then retain and produce all relevant information. Counsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched. Once potentially relevant information is identified, there is a continuing duty to retain the information and to produce it if it is responsive to the opposing party’s requests. Furthermore, if you are in control of potentially relevant information, but a third party is in possession of such information, then such information must also be taken into consideration. The continuing duty to supplement discovery under the Federal Rules of Civil Procedure strongly suggests that parties also have a duty to make sure that discoverable information is not lost or destroyed. To meet this obligation, counsel should issue a litigation hold at the outset of litigation. The litigation hold must be periodically reissued so new employees are aware of it and it remains fresh in the mind of all employees. Counsel must meet with the key players, explain the preservation obligation, and periodically remind them the preservation duty is still in place. Finally, all employees should be instructed to produce electronic copies of their relevant active files. Counsel must also make sure that all backup media the party is required to retain is identified and stored in a safe place. In appropriate cases, counsel should take possession of the backup tapes. Alternatively, counsel can take steps to ensure the backup tapes are segregated and placed in storage. Failure to comply with these preservation obligations could result in severe sanctions being imposed by the court, including monetary penalties, the giving of an adverse inference instruction to the jury at trial, or even dismissal of certain legal claims or defenses. Based on all of this, the employer and claims representative should issue a written notification to all affected employees to institute a litigation hold concerning any of the information related to this action. It is imperative that you provide everyone with written notice. In addition, you should reissue the litigation hold instructions periodically. Please make sure you have consulted with your IT department so they are aware of the litigation hold. You should arrange for defense counsel to have an appropriate conference with your IT supervisor so document retention polices, backup practices, and related items can be discussed.

C-14

C. Example of a Litigation Hold Letter

Preservation of Evidence Letter to Client Dear __________. In connection with the above-referenced litigation, we write to apprise you of DEF’s legal obligation to preserve relevant information and documents in this matter. This includes not only hard copy documents, but audio recordings, videotape, and all electronic information maintained on computer systems, removable electronic media (e.g., laptops, tablets, androids, i-phones, or other devices), and any other locations where electronic data is stored (including all backup facilities). Electronic data includes emails, documents, spreadsheets, and/or any forms of electronic information created, received, and/or maintained by DEF. Electronically stored data may become an important and irreplaceable source of discovery and/or evidence in this matter. To comply with its legal obligations, DEF must immediately suspend deletion, overwriting, or any other possible destruction of electronic information that is or may be relevant to the claims in this matter. This includes, but is not limited, to relevant email and other electronic communications, word processing documents, spreadsheets, databases, calendars, telephone logs, contact manager information, Internet usage files, offline storage or information stored on removable media (e.g., USB drives, CDs, and DVDs), information contained on laptops or other portable devices, and network access information. It also includes inaccessible storage media, such as backup tapes, which may contain relevant electronic information. It is necessary that all employees who are involved with the litigation or its underlying claims take every reasonable step to preserve this information. It is our recommendation that DEF take the following steps:

Instruct all DEF employees with any involvement in the issues/claims of the litigation that all documents and data – both hard copy and electronic (including email correspondence, no matter how innocuous) – must be preserved until further notice. Regarding electronic data, whatever method is most convenient and effective within the confines of the DEF email system should be used, but the easiest course of action may be for each involved DEF employee to create a personal folder and store all existing and future electronic correspondence related to the issues/claims of the litigation in the folder. If the group of involved employees is sufficiently small, DEF may want to consider imaging their hard drives. This is the safest and easiest way to freeze existing relevant data and avoid individual searches that may vary as to methodology and accuracy. Immediately cease any normal course practice the Company may have of discarding or erasing backup tapes on which relevant information may reside (to the extent the contents of such tapes are unknown, the practice should be suspended as to those tapes).

C-15

Immediately sequester for imaging all hard drives (laptops and desktops) and email accounts of all current and, to the extent possible, former DEF employees who may have received electronic communications relating to the litigation. We can assist the Company in this imaging process and investigate whether any successors of former employees were granted access to former employees’ email accounts and whether the successors deleted or moved any of the former employees’ emails relating to the litigation. Any litigation-related emails from former employees currently stored in the email accounts of their successors should be stored in a separate email folder in the successor’s account, identified by the name of the former employee. Notify management and legal counsel if DEF is in control of potentially relevant information, but a third party is in possession of such information.

The failure to abide by this request could result in penalties or sanctions against DEF and could form the basis of legal claims for spoliation. Pursuant to the Federal rules, it will be necessary for us to meet with your information technology department in the near future to discuss the Company’s IT protocols and infrastructure and retrieve the foregoing electronic data and information. We will, of course, coordinate with you and your personnel to retrieve and retain all materials in the most efficient and non-disruptive manner. Thank you for your assistance, and please contact me at your earliest convenience to further discuss this matter. Sincerely, __________ III. 4(c) LIABILITY: POLICY OF DELAY, UNFAIRNESS, OR INTERFERENCE WITH WC RIGHTS AND REMEDIES

A. Delay or Unfairness

Whenever the Commission finds that any service or adjustment company used or employed by a self-insured employer or by an insurance carrier to process, adjust, investigate, compromise or otherwise handle claims under this Act, has practiced or is practicing a policy of delay or unfairness toward employees in the adjustment, settlement or payment of benefits due such employees, the Commission may after reasonable notice and hearing order and direct that such service or adjustment company shall from and after a date fixed in such order be

C-16

prohibited from processing, adjusting, investigating, compromising or otherwise handling claims under this Act.

Whenever the Commission finds that any self-insured employer has practiced or is practicing delay or unfairness toward employees in the adjustment, settlement or payment of benefits due such employees, the Commission may, after reasonable notice and hearing, order and direct that after a date fixed in the order such self-insured employer shall be disqualified to operate as a self-insurer and shall be required to insure his entire liability to pay compensation in some insurance carrier authorized, licensed and permitted to do such insurance business in this State, as provided in subparagraph 3 of paragraph (a) of this Section.

All orders made by the Commission under this Section shall be subject to review by the courts, said review to be taken in the same manner and within the same time as provided by Section 19 of this Act [820 ILCS 305/19] for review of awards and decisions of the Commission, upon the party seeking the review filing with the clerk of the court to which said review is taken a bond in an amount to be fixed and approved by the court to which the review is taken, conditioned upon the payment of all compensation awarded against the person taking said review pending a decision thereof and further conditioned upon such other obligations as the court may impose. Upon the review the Circuit Court shall have power to review all questions of fact as well as of law. The penalty hereinafter provided for in this paragraph shall not attach and shall not begin to run until the final determination of the order of the Commission. (Emphasis added.)

820 ILCS 305/4(c).

B. Discrimination

It shall be unlawful for any employer, insurance company or service or adjustment company to interfere with, restrain or coerce an employee in any manner whatsoever in the exercise of the rights or remedies granted to him or her by this Act or to discriminate, attempt to discriminate, or threaten to discriminate against an employee in any way because of his or her exercise of the rights or remedies granted to him or her by this Act. It shall be unlawful for any employer, individually or through any insurance company or service or adjustment company, to discharge or to threaten to discharge, or to refuse to rehire or recall to active service in a suitable capacity an employee because of the exercise of his or her rights or remedies granted to him or her by this Act.

820 ILCS 305/4(h).

C-17

C. Cook v. Optimum/Ideal Managers, Inc.

In Cook v. Optimum/Ideal Managers, Inc., 130 Ill. App. 3d 180 (2d Dist. 1984), an injured worker filed a complaint in circuit court against his employer’s insurance company. The complaint alleged that after a Section 12 IME, Optimum directed the physician who examined the petitioner not to furnish him with a copy of the examination report. A second examination was done, and it was alleged that Optimum obtained that report and “secreted” it so that it was not available to the petitioner. In Cook, a second claimant who was injured filed a claim against the WC insurance company, Insurance Company of North America (hereinafter INA), and Dr. James Ryan. In Count I against INA, it was alleged that the petitioner, who requested an IME report, was “penalized” by the insurance company by terminating benefits for having requested a copy of the IME report. A second count requested that the court enter an order ordering INA to refrain from directing physicians to withhold IME reports. A third count against Dr. Ryan, the IME doctor, was dismissed at the circuit court level. The petitioner alleged a cause of action based on the language of Section 4(h) of the Illinois Workers’ Compensation Act. The appellate court determined that petitioner Cook was not faced with the dilemma of choosing between his job and filing a claim under the Act. The appellate court also examined whether or not a cause of action should be implied from Section 12 of the Act against an insurance company or a doctor retained by it for failure to turn over a copy of the IME report. The appellate court determined that the Workers’ Compensation Act itself provides for remedies for damages in proceedings before the Illinois Workers’ Compensation Commission when an IME report is not turned over. Finally, the appellate court determined that there is no cause of action for an employee based on “public policy” when an employer or insurance carrier fails to turn over a Section 12 IME report.

D. Ewing v. Liberty Mutual Ins. Co.

In Ewing v. Liberty Mutual Ins. Co., 130 Ill. App. 3d 716 (5th Dist. 1985), an employee filed suit against a workers’ compensation insurer for “breach of good faith” and “fair dealing” based on the insurer’s alleged threat of loss of benefits and deliberate failure to honor the employee’s request for the medical records of the physician engaged by the insurer to examine the worker (Section 12 IME doctor). The circuit court found that the petitioner had stated a claim against the insurer. The appellate court reversed. The issue on appeal was whether or not a bad-faith action against the workers’ compensation carrier could be allowed to stand. It was alleged that the petitioner was examined by a Section 12 physician by Liberty Mutual. The IME doctor determined that the petitioner was able to return to his former position. At the same time, the petitioner’s treating physicians recommended that he should not resume his duties as a driver for UPS.

C-18

The petitioner was advised by the employer, UPS, that he must return to his former job, or his workers’ compensation benefits would be terminated. The petitioner did return to work, but was injured the same day that he did return to work while attempting to enter a UPS truck. The petitioner complained that his efforts to obtain the IME report were “frustrated” by Liberty, and it was alleged that all of these were deliberate attempts to force the petitioner’s resignation or to compel him to resume his old job, which led to severe emotional distress and economic losses. The appellate court determined that there were no facts which could form a basis for a cause of action against Liberty under any theory advanced by the petitioner. It was determined that the employer and Liberty Mutual justifiably relied and acted upon the IME medical opinion in handling the petitioner’s claim. The appellate court also noted that before the civil lawsuit was instituted, the petitioner actually entered into a negotiated settlement with his employer and Liberty Mutual to resolve all workers’ compensation issues. It was noted that all of Liberty Mutual’s actions were affected pursuant to a justifiable course of conduct to compromise bona fide disputes, which were, in fact, settled. The petitioner’s allegations could not sustain a cause of action. IV. COMMON LAW FRAUD LIABILITY

A. West v. Western Casualty & Surety Co.

In West v. Western Casualty & Surety Co., 846 F.2d 387 (7th Cir. 1988), it was alleged that the workers’ compensation insurance company committed fraud by deceiving a petitioner about his rights under the Illinois Structural Work Act, which has subsequently been eliminated. It was determined on appeal that the petitioner was allowed to bring a cause of action against a third party separate from a workers’ compensation claim. The petitioner was involved in a catastrophic injury that rendered him a paraplegic when he fell from scaffolding in 1979. The petitioner prosecuted his workers’ compensation claim, but never filed an action against the third party for violating the Illinois Structural Work Act, although at the time Illinois law recognized such a cause of action. After the accident, the petitioner and his family were visited several times by the claims manager and adjuster for the workers’ compensation carrier. Memoranda introduced at trial showed that the workers’ compensation carrier was very concerned that the petitioner would contact an attorney and bring a Structural Work Act suit against the third party, who would in turn bring a third-party action against the workers’ compensation insurer based on contribution. The upshot was that this would substantially increase the workers’ compensation carrier’s potential liability in light of the third-party action. Correspondence between the parties showed that the claims manager went to great lengths to develop a friendship with the petitioner. The insurer concluded that these efforts were

C-19

successful. For example, the petitioner’s family invited the claims manager for lunch, they gave him cherry pie, they expressed concern over his health, and they clearly trusted him. They sent the claims manager a Christmas card, which the supervisor promptly reported to his supervisors as “evidence of his rapport” with the petitioner. The claims manager always sent thank-you notes to the petitioner after their meetings, and he was never bashful in complimenting the petitioner’s wife on her culinary skills. It was alleged that in the two years after the accident, the workers’ compensation carrier engaged in conduct intended to ensure that the petitioner would not contact an attorney for purposes of a third-party action. At one point, the petitioner requested reimbursement for expenses that the workers’ compensation carrier considered as dubious. The workers’ compensation carrier paid some of those expenses. As the expiration of the statute of limitations approached for filing a Structural Work Act claim, the claims manager refused to respond to the petitioner’s phone calls. It was also alleged that the workers’ compensation carrier delayed a hearing on the petitioner’s workers’ compensation claim until after the statute of limitations had run. The petitioner’s claim was that the workers’ compensation carrier committed fraud by deliberately misrepresenting to him his legal rights. It was alleged that the workers’ compensation manager constantly told the petitioner that he did not need a lawyer because the workers’ compensation carrier would protect their legal rights and ensure that they received everything they were legally entitled to. It was alleged at one point that the workers’ compensation manager told the petitioner that he had no legal rights other than workers’ compensation. These allegations were denied by the workers’ compensation claims manager and the carrier. Nevertheless, faced with these contradictory versions of the facts, a jury found in favor of the petitioner and awarded him $3 million in compensatory damages and $2 million in punitive damages. The first argument advanced by the workers’ compensation carrier was that this cause of action was barred by the exclusivity provision of the Illinois Workers’ Compensation Act (Ill. Rev. Stat. Ch. 48, ¶ 138.5(a)). The federal district court held that this exclusivity provision did not bar the fraud action. This was affirmed by the United States Court of Appeals for the Seventh Circuit. The petitioner was required to prove the following elements in his fraud action:

(1) that the defendant made false statements of material fact, and not of opinion; (2) knowing that they were false; (3) intending that the plaintiff rely on them; (4) that plaintiff did rely;

C-20

(5) that this reliance was justified; and (6) that the plaintiff was damaged hereby.

West, 846 F.2d at 393. The Seventh Circuit determined they could not overturn a jury’s determination that all the fraud elements were satisfied. The appellate court also affirmed the award of punitive damages, concluding that the evidence was sufficient to support the jury’s conclusion that the workers’ compensation carrier’s false representations were “wantonly and designedly made” and “that this conduct was deliberate and purposeful.” Id. at 398. The jury determined that this conduct was orchestrated by responsible management over a significant period of time and was designed to deceive the petitioner by exploiting the relationship it had developed with him under the Workers’ Compensation Act. V. EX PARTE COMMUNICATION BETWEEN EMPLOYEE’S DOCTOR AND THE EMPLOYER OR INSURANCE CARRIER’S REPRESENTATIVES

A. Hydraulics, Inc. v. Industrial Comm’n

In Hydraulics, Inc. v. Industrial Comm’n, 329 Ill. App. 3d 166 (2d Dist. 2002), the appellate court was asked to consider whether ex parte conferences between an injured worker’s healthcare provider and the employer or its legal representatives are prohibited by the doctrine handed down in Petrillo v. Syntex. The appellate court determined the Petrillo did apply to workers’ compensation proceedings. In Hydraulics, Inc., the petitioner filed a workers’ compensation claim with the Illinois Industrial Commission alleging an injury to her left wrist on September 30, 1997, resulting from repetitive trauma. The petitioner was sent to see the employer’s “health service coordinator,” who turned out to be an employee of Disability Management Services, not an employee of the respondent. This health services coordinator provided on-site contract services at the employer’s facility, which included taking care of injuries, handling workers’ compensation claims, etc. The petitioner was referred to one treating physician who felt that the petitioner’s symptoms were work related. That physician sent the petitioner to a different doctor who diagnosed a fracture of the left wrist. After the second doctor conferred with the employers’ insurance carrier and counsel, it was decided that the claim would be denied. The second physician, however, also referred the petitioner to a hand surgeon. That hand surgeon indicated that the fracture was work related. The attorneys for the respondent, along with the “health service coordinator,” prepared a videotape of the claimant’s work site, which showed someone else doing the job. Although a written job description did exist for the

C-21

claimant, the health service coordinator created a new job description. The videotape was forwarded to the treating hand specialist without the claimant’s authorization or knowledge (or the claimant’s attorney’s authorization or knowledge). Following the communication, the hand specialist actually issued a “clarified opinion” stating that there was no causal connection between the petitioner’s injury and her work. At the hearing, the claimant objected to the introduction of any evidence resulting from the contract with the hand specialist. The claimant argued against the admission of the videotape, the new written job description, and the hand specialist’s clarified opinion. The arbitrator barred the admission and agreed that the employer violated Petrillo by communicating with the treating hand specialist without the claimant’s permission. The Industrial Commission vacated the arbitrator’s decision and remanded the cause for a new hearing. At the new hearing, the “health service coordinator” testified, and she admitted that she had not sought the claimant’s permission prior to communicating with the hand specialist. At this hearing, the arbitrator again excluded the new job description as well as the revised opinion of the treating hand specialist. The arbitrator admitted the videotape. After hearing this new evidence, the arbitrator again found in favor of the petitioner, and the employer sought another review to the Industrial Commission. The Industrial Commission affirmed the second arbitration. The Circuit Court of McHenry certified the question to the appellate court which was whether or not the prohibition against the ex parte communications stated in Petrillo does apply to workers’ compensation claims. The appellate court focused on the Petrillo decision, as well as Best v. Taylor Machine Works. The appellate court noted that throughout Petrillo, the court stressed that ex parte communication produces no better or greater evidence than that which is obtainable through traditional means of discovery. The appellate court noted that while workers’ compensation claims do not have discovery procedures as identified in the Illinois Code of Civil Procedure, the appellate court determined that “analogous” discovery avenues do exist in workers’ compensation claims including subpoenas, release of relevant medical records, oral depositions, and live testimony. Because of the “existence of discovery-like methods in workers’ compensation,” the appellate court determined that there is no reason to override the public policy and constitutional aspects of the sanctity of the physician-patient relationship for the workers’ compensation arena. There was also no discussion in the appellate court as to whether or not Section 8(a) of the Illinois Workers’ Compensation Act does, in fact, expressly, or through its language, imply a waiver of the physician-patient privilege when a workers’ compensation claim is filed. Many other jurisdictions have held that such language is an implied waiver of the physician-patient privilege.

C-22

VI. WC RULES AND PROCEDURES

A. Distribution of IWCC Handbook

An employer, upon receiving notice of an accident reportable pursuant to Section 6(b) of the Act, shall deliver the Commission Handbook to the injured employee or determine that the employee has the handbook. An employer, individually or by his or her agent, service company, or insurance carrier, shall indicate, upon filing a first report of injury as provided in Section 6(b) of the Act, that a copy of the handbook has been delivered to the injured employee.

B. Explanation of Basis of Non-Payment, Termination or Suspension of Temporary Total Compensation or Denial of Liability or Further Responsibility for Medical Care

(a) When an employee becomes unable to work due to an accidental or occupational disease arising out of or in the course of his or her employment, or alleges that he or she is unable to work, the employer, individually or by his or her agent, service company or insurance carrier, shall, within 14 calendar days after notification or knowledge of such inability or alleged inability to work:

(1) begin payment of temporary total compensation, if any is then due; or

(2) if the employer denies liability for payment of temporary total compensation for whatever reason, provide the employee with a written explanation of the basis for the denial; or

(3) if the employer has insufficient information to determine its liability for payment of temporary total compensation, advise the employee in writing of the information needed to make that determination and provide in a written explanation why the requested information is necessary.

(b) When an employer begins payment of temporary total compensation and later terminates or suspends further payment before an employee in fact has returned to work, the employer shall provide the employee with a written explanation of the basis for the termination or suspension of further payment no later than the date of the last payment of temporary total compensation. (c) When an employer takes the position that it has insufficient medical information to determine its liability for the initial payment of temporary total compensation, or the continuation of such payment, the employer shall have the initial responsibility to promptly seek the desired information from those providers of medical, hospital and surgical services of which the employer has knowledge. The employee shall have the responsibility to provide or execute authorizations for release of medical information as the employer may reasonably

C-23

request from time to time, and the employer shall promptly provide the employee or his or her representative, upon request, with copies of the complete medical records and reports it obtains with the authorizations. (d) When an employer denies liability for payment of the cost of all or a part of an employee’s medical care, or initially accepts liability but subsequently declines further responsibility for providing or paying for all or a part of such care (for any reason including but not limited to the necessity or propriety of the care, or continuing care, or the unreasonableness of the cost of care), the employer shall promptly notify the employee with a written explanation of the basis for the denial of liability or further responsibility. (e) Failure by either party to comply with the provisions of subsection (a), (b), (c) or (d) of this Section, without good and just cause, shall be considered by the Commission or an Arbitrator when adjudicating a petition for additional compensation pursuant to Section 19(1) of the Act, or a petition for assessment of attorneys’ fees and costs pursuant to Section 16 of the Act.

50 Ill. Adm. Code 7110.70. VII. MEDICAL BILL PAYMENT LIABILITY

A. Payment Deadlines and Interest

(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.

(1) All payments to providers for treatment provided pursuant to this Act shall be made within 30 days of receipt of the bills as long as the claim contains substantially all the required data elements necessary to adjudicate the bills.

(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.

C-24

(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 payments shall be made within 30 days after payment.

C-25

Kevin J. Luther

- Partner

Kevin concentrates his practice in the areas of workers' compensation, employment and labor law, and employer liability. He supervises the Workers' Compensation and Employment & Labor Practices in the firm's Rockford and Chicago offices. He is the immediate past chair of the firm's statewide workers' compensation practice group. Kevin has represented numerous employers before the Illinois Human Rights Commission and has arbitrated hundreds of workers' compensation claims in many Illinois Industrial Commission venues. He has also tried numerous liability cases to jury verdict. In the area of labor law, Kevin has represented employers in collective bargaining agreement negotiation and preparation, union grievances and arbitrations, and NLRB proceedings. Kevin has authored a law review article on Illinois employment law and he is a co-author of "Illinois Workers' Compensation Law, 2015-2016 Edition," published by Thomson Reuters. The book provides a comprehensive, up-to-date assessment of workers' compensation law in Illinois. Kevin also frequently speaks to industry and legal professional groups. Kevin has spent his entire legal career at Heyl Royster, beginning in 1984 in the Peoria office. He has practiced in the Rockford office since it opened in 1985. He is a member of the Winnebago County Bar Association in its Workers' Compensation and Trial sections. He is a member of the State Bar of Wisconsin, Illinois State Bar Association, and the American Bar Association, and has actively participated in sections relevant to his practice areas. He is a member of the Illinois Association of Defense Trial Counsel, formerly on the Board of Directors. Significant Cases Arlene Bernardoni v. Huntsman Chemical Corp. -

Applied Frye principle to Illinois workers' compensation in the defense of an occupational disease/exposure claim.

Richard Urbanski v. Deichmueller Construction Co. - Defined jurisdictional issue in workers' compensation review.

Publications "Illinois Workers' Compensation Law," 2015-

2016 ed. (Vol. 27, Illinois Practice Series), updated and published by Thomson Reuters (2009, 2012, 2013, 2014 and 2015)

"Survey of Illinois Law: Employment Law," Southern Illinois University Law Journal (2010)

"Economic Disability and Earning Capacity: A Historical Analysis for Wage Differential Claims," Illinois Defense Counsel Quarterly Monograph (2006)

"The Normal Daily Activity Exception to Workers' Compensation Claims," Illinois Defense Counsel Quarterly Monograph (2004)

"The Age Discrimination in Employment Act: A Seventh Circuit Perspective," Illinois Defense Counsel Quarterly Monograph (1998)

"The Impact of Federal Legislation on the Employer/Employee Relationship in Illinois," Illinois Defense Counsel Quarterly Monograph (1996)

"An Overview of Repetitive Trauma Claims," Illinois Bar Journal (1992)

Public Speaking “Workers’ Compensation Issues and Handling for

Management” Society for Human Resource Management (2015)

“OSHA Housecalls” Rock River Human Resource Professional Association (2015)

“Case Law Update” Winnebago County Bar Association (2015)

“Recent Appellate Court Decisions” Illinois Chamber of Commerce 7th Annual Workers’ Compensation and Safety Conference (2014)

“HIPAA: Legal Background and Current State of the Law” City of Rockford Fire 911 Division (2014)

“Utilization Review and Section 8 Medical Bill Issues” Heyl Royster 29th Annual Claims Handling Seminar (2014)


C-26

“Ethics of Social Media” Illinois Workers’ Compensation Commission Judicial Training, Chicago (2012)

“A Program on the Extent to Which Employers May Monitor/Restrict Employees” St. Mary’s Occupational Health & Wellness (2012)

“Workers’ Compensation, HIPAA and Employment Retaliatory Discharge Issues” St. Mary’s Occupational Health & Wellness (2011)

“Workers’ Comp Reform - What Does it Mean to You?” Williams Manny (2011)

“Workers’ Compensation Case Law Update” Winnebago County Bar Association (2011)

Professional Recognition Martindale-Hubbell AV Preeminent Selected as a Leading Lawyer in Illinois. Only five

percent of lawyers in the state are named as Leading Lawyers.

Named to the Illinois Super Lawyers list (2013-2015). The Super Lawyers selection process is based on peer recognition and professional achievement. Only five percent of the lawyers in each state earn this designation.

Professional Associations Winnebago County Bar Association Illinois State Bar Association State Bar of Wisconsin American Bar Association Illinois Association of Defense Trial Counsel

Court Admissions State Courts of Illinois and Wisconsin United States District Court, Northern and

Central Districts of Illinois United States Court of Appeals, Seventh Circuit

Education Juris Doctor, Washington University School of

Law, 1984 Bachelor of Arts-Economics and Mathematics

(summa cum laude), Blackburn University, 1981


D-1

FUNCTIONAL CAPACITY EVALUATIONS AS EVIDENCE OF DISABILITY IN WORKERS’ COMPENSATION CLAIMS

Presented and Prepared by: Brad A. Antonacci

[email protected] Rockford, Illinois • 815.963.4454 Chicago, Illinois • 312.853.8700

Rachel K. Viel

Ortho Illinois [email protected]




D-2


I. WHAT A FUNCTIONAL CAPACITY EVALUATION IS AND WHAT IT ISN’T .............................. D-3

II. FUNCTIONAL CAPACITY EVALUATIONS AS EVIDENCE OF DISABILITY IN WORKERS’ COMPENSATION CLAIMS .........................................................................................D-15

A. Case Law ........................................................................................................................................D-15

III. FCE CHECKLIST ...........................................................................................................................................D-23


D-3


I. WHAT A FUNCTIONAL CAPACITY EVALUATION IS AND WHAT IT ISN’T

What a Functional Capacity Evaluation Is and

What It Isn’tAddressing the limitations of functional testing

in the worker’s compensation environment.

Rachel Viel, Ortho Illinois

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Rachel K. Viel MS, PT, CWcHP

• Augustana College

• Washington University in St. Louis

• Certified Workers Compensation Healthcare Provider (CWcHP) with focus on functional testing

• Formal training in 4 FCE systems, informal training/development of others…

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-4

Always looking for a better mousetrap!

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Questions that need answers:

• What do I look for in an FCE to see if it is good?

• What are the limitations of FCE in a worker’s compensation case?

• What can employers do to be proactive in the current environment?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

History

• 40 Years of FCEs.

• A variety of methods and equipment.

• Have not “gotten it right” or one system would dominated the market.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-5

History

• Different but identical.

• Biggest differences –verbiage and letterhead.

• Great if patients giving full effort.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Are all employees being honest?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

“After doing 3.8 million background checks, Automatic Data Processing, Inc. announced in April that 52 percent of job applicants had lied on their resumes.”

Source: “Lying.” Jeffrey MacDonald, The Christian Science Monitor, June 23, 2004.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-6

While 83% of the Americans surveyed in 2003 believed insurance companies were capable of identifying or preventing fraud, only 72% think so today.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

More than two‐thirds of respondents (68%) said they believe insurance fraud occurs because people believe they can get away with it, up from 49% in 2003.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Sincerity of Effort

• What is it?

• Is the client’s performance consistent?

• Is the client’s performance reproducible?

• When asked to perform like or similar tasks requiring the same physical ability, are the results within an acceptable range?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-7

Current Practices for Determining Sincerity of Effort

• Static testing

• Isokinetic testing

• Physiological “signs and symptoms”

• Visual estimation of effort

• Hand strength testing

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Now what?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

XRTS Sincerity of Effort

• Repeated Measures

• Statistical Analysis that is applied the same way every test.

• Distraction.

• XRTS Hand Strength Assessment

• XRTS Lever Arm Testing

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-8

XRTS Hand Strength Assessment

• HSA:

– 66 randomized trials– Unilateral and Bilateral– 5 position grip – 3 position pinch– 7 validity criteria

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

XRTS Hand Strength Assessment

• 99% sensitive

• 100% specific

• 199/200 test sessions properly classified

• 99.5% accurate

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

In the event of invalid effort…

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-9

Statements you should see in a report:

• “The XRTS Hand Strength Assessment protocol consists of a total of 66 randomized unilateral and simultaneous bilateral trials. The client failed three or more of the validity criteria. As outlined in the User's Guide, this result indicates the strong likelihood that the client was not complying with the test, and the test result is therefore almost certainly invalid.”

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________


• “…On 3 trials for this test, no force production was recorded and the test was terminated. The test was again restarted, with again 3 trials showing no force production. This is most likely indicative of blatant noncompliance and it is impossible to make any comparison to empirically derived validity criteria.”

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________


• “The client failed 7/7 validity criteria for the XRTS Hand Strength Assessment. The odds of a compliant subject producing the same result as the client are .016 x .04 (significantly less than 1 in 1,000,000).”

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-10

XRTS Lever Arm Assessment

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Baseline Lift

• 10” Bilateral

• 15” Bilateral

• 20” Bilateral

• Unilateral R/L

• Proceed with Lever Arm testing if:– Does not meet basic job lift requirements– Demonstrates inconsistent behavior

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

XRTS Lever Arm

• 10” Bilateral

• 15” Bilateral

• 20” Bilateral

• Unilateral R/L

• Compare 3-5 of the lifts

• 20% or less variance BL vs. LA=valid

• 25% or greater variance BL vs. LA=invalid

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-11

For invalid findings…

“Since the biomechanical positioning is identical during the ‘Baseline’ dynamic lifts and the Lever Arm lifts, a high degree of reproducibility between repeated measures should be present when a maximum safe voluntary effort is given throughout the lifting evaluation. The client failed the validity criteria, based on the following:

• Average variability between repeated measures on all the lifts was >=25%.

• At least one set of comparative lifts has a variability >40%.• At least half of all comparative lifts have variability >25%.• Two or more sets of comparative lifts have variability >30%.”

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

For valid findings…

• “Baseline lifts of unmarked steel bars correlated with the corresponding lifts on the XRTS Lever Arm. The odds of visually estimating the three maximum Lever Arm lifts to the degree necessary to control the outcome of this test and, therefore, successfully feign weakness are approximately 1.5%. Therefore, it is believed these results reflect a consistent effort during this test.”

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Functional Capacity Evaluation:

• A set of tests, practices and observations that are combined to determine the ability of the evaluated person to function in a variety of circumstances, most often employment, in an objective manner.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-12

No Functional Job Description…

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

How to test?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Or this?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-13

Or this?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Or this?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Now what?

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-14

Consider the following…

• Have functional job descriptions available.

• Consider light duty/transition to regular duty.

• Find an FCE provider that performs XRTS testing.

• Consider FCE results as they relate to the client’s effort and functional status.

• Challenge FCE reports that use outdated methods to determine validity of effort.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

Questions?

[email protected]

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

_______________________________________

D-15

II. FUNCTIONAL CAPACITY EVALUATIONS AS EVIDENCE OF DISABILITY IN WORKERS’ COMPENSATION CLAIMS

Functional capacity evaluations (FCEs) are often used to determine the physical capabilities of a worker’s compensation claimant. They typically occur towards the end of the claimant’s medical treatment, most often after surgery. FCEs can be an excellent tool for providing an objective assessment of claimant’s physical capabilities. The hope, from a defense perspective, is that the FCE illustrates claimant has the physical capabilities which will allow him or her to return to work at his or her usual and customary employment. However, for those of us who are cynics, we might see the FCE as the first step leading to a large wage differential or permanent total disability on a case that previously appeared as if it might resolve based on permanent partial disability. For example, if the treating physician who ordered the FCE initially had a strong expectation the claimant would be able to return to work without restrictions following surgery, why is that same physician now ordering an FCE? FCEs are not only used to determine a claimant’s ability to perform a previously held job, but they can also be used to determine what type, if any, position the claimant can perform. It may be found that the claimant is unable to function at the physical level required of the previous employment position, and the FCE is coupled with vocational rehabilitation to provide the claimant a new, less physically demanding employment. Frequently, this can expose the employer to increased settlement values and awards, including wage differential claims or permanent total disability claims. It can be troubling when we see an FCE find physical capabilities that fall just short of claimant’s claimed job duties. The Workers’ Compensation Commission, along with other evidence of disability, will at times emphasize the results of the FCE and place great weight on those results as evidence of a claimant’s disability. Given the risks of increased exposure that can be associated with FCEs, it is critical that the FCE is performed correctly, the FCE correctly measures validity, and the FCE evaluator has the necessary, vital information when performing the FCE to get the best results for the employer. If the Commission is going to place great weight on the FCE results, significant effort should be placed on getting the most accurate results as possible. In these materials, we will analyze a few cases which illustrate the ways in which the Commission and appellate court have accepted FCEs as evidence of disability. We intend to provide solutions to avoid common issues that cause FCEs to have little value or that provide significant restrictions which seem out of line with other medical evidence. We will additionally provide you with a checklist to get the most out of that FCE to make sure the results are not skewed against you. Hopefully, you will be able to avoid that situation where claimant’s physical capabilities, pursuant to the FCE, fall just below the physical demands of the employment position.

A. Case Law

FCEs can play a key role in determining the claimant’s ability to return to work to his or her previous, regular duty position or whether that claimant is entitled to a wage differential or

D-16

permanent total disability. There have been several decisions which illustrate the effect that FCEs can have on workers’ compensation decisions. In Kao v. Insight Enterprises, the results of the FCE played a key role in the Commission’s decision in finding that the claimant was not totally and permanently disabled. Kao v. Insight Enterprises, 2014 Ill. Wrk. Comp. LEXIS 66; 14 IWCC 40. In Kao, the claimant sustained injuries to his neck and low back when a pallet fell from a shelf approximately 40 feet above, striking the claimant and rendering him unconscious. After an in-patient stay, the claimant was examined by Dr. Levin on March 13, 2006 and reported neck pain, bilateral shoulder tingling, dizziness and back pain. Dr. Levin opined that the claimant suffered a compression fracture at the L2 vertebral body and recommended MRI’s of the cervical and lumbar spine. The lumbar spine MRI revealed a compression fracture at the L2 vertebral body as well as degenerative changes at the L3-L4 disc, L4-L5 and L5-S1 without disc herniation. The claimant came under the care of Dr. Citow on May 10, 2006, who diagnosed a L2 fracture and opined that a vertebroplasty would be an option. On June 26, 2006, the claimant was examined by Dr. Patzik who recommended the same and scheduled the surgery for July 6, 2006. Dr. Patzik performed the vertebroplasty and on July 21, 2006, the claimant was discharged from care and was not provided with any work restrictions. However, he did not attempt to return to work. On October 6, 2006, the claimant followed-up with Dr. Citow and complained of a 2-month history of bothersome neck pain which extended into his head. Dr. Citow recommended another cervical spine MRI which revealed significant disc protrusions touching the spinal cord and narrowing the neural foramina from C3 through C7. After a course of physical therapy, the claimant underwent a FCE on March 21, 2007. The FCE, conducted at the direction of Dr. Citow, indicated that the claimant was functioning at the medium to heavy physical demand level. Following this, the claimant did not return to work despite not having any orders from any treating physicians reflecting he was unable to return to work. Further, the claimant continued to receive epidural steroid injections. In fact, on August 22, 2008, the claimant followed-up with Dr. Citow, who recommended that the claimant could return to work full duty. On December 23, 2008, the claimant, at the direction of his attorney, underwent an independent medical examination with Dr. Blonsky. Dr. Blonsky opined that the claimant was totally disabled and was unable to return to work, as determined by Social Security. Dr. Blonsky admitted he did not see the results of the FCE and did not review Dr. Citow’s complete records. Dr. Citow continued to treat claimant and on February 22, 2010, he performed a cervical fusion C4-C7. Dr. Citow opined the claimant could attempt to return to his normal work duties three weeks after March 19, 2010. The claimant presented to other doctors for pain management treatment including injections. Dr. Citow recommended physical therapy, followed by work conditioning, which claimant underwent.

D-17

The claimant then underwent another independent medical examination by Dr. Bauer, who opined that claimant could return to work pursuant to the FCE. Dr. Bauer reviewed a written job analysis and a job duties video. Dr. Bauer took it a step further and indicated that the claimant could have returned to work based on Dr. Citow’s recommendations made in March. On October 28, 2010, the claimant again underwent another FCE. This FCE objectively revealed that the claimant could perform at the medium demand level with some components of the heavy physical demand level. According to the FCE, the claimant was able to return to his former employment based on the evaluator’s review of a written job description. The evaluator determined that claimant’s employment fell in the medium physical demand level. On November 19, 2010, Dr. Citow reached this same conclusion based on the FCE. Dr. Bauer prepared an addendum IME report. After reviewing the second FCE and job analysis, he agreed with Dr. Citow that claimant could return to full duty work. Claimant then obtained a work restriction note from Dr. Lu, a treating pain management physician, indicating claimant could only work 3 hours per day. There was no indication this was a permanent or temporary restriction and no documentation of treatment on the date the slip was obtained. During trial, the claimant admitted that although he had been released to return to work following the July 6, 2006, vertebroplasty, he did not return to work because he thought he was unable to perform his job. When questioned why he did not return following the March 21, 2008, FCE, he again indicated that he felt like he could not perform the job. The same testimony was provided in regards to the cervical fusion and FCE in 2010. Claimant proceeded under the theory that he as permanently and totally disabled based upon the opinions of a vocational counselor. The Commission affirmed the arbitrator’s award of 45% person as a whole. In rendering his decision, the arbitrator relied on the opinions of Dr. Citow and Dr. Bauer, who both concluded that the claimant could return to work at the medium to heavy physical demand level. He also noted Dr. Bauer opined claimant could return to his former employment. Of importance are the factors relied upon by the arbitrator in rendering this decision. The arbitrator noted that to find the claimant was permanently and totally disabled would have totally ignored the objective results of the FCE completed on October 28, 2010, and the opinions of both Dr. Citow and Dr. Bauer, who both opined the claimant could return to work pursuant to the FCE. The Arbitrator continued in his decision, expanding on the importance he placed on Dr. Bauer’s opinion that provided the claimant’s ability to return to work was rooted in the FCE and a job duties video as well. Further, the Arbitrator made note of the claimant’s refusal to even make an attempt to return to work. The significance of building a defense consisting of several components is evident here. Although an FCE may be supportive of a claimant’s ability to return to his former employment and relied upon by the Commission in its decision, it is important to have other, objective evidence that corroborates the FCE results. Here, the Commission relied not only on the FCE but also the opinions of treating physicians and an IME physician who supported the opinions of the FCE evaluator.

D-18

In McClory v. Armstrong Relocation, the employer used surveillance in conjunction with the invalid results of a FCE to urge the Commission to find the claimant was in fact, able to return to work full duty and thereby reduce the benefits previously awarded to the claimant by the Arbitrator. McClory v. Armstrong Relocation, 2013 Ill. Wrk. Comp. LEXIS 382; 13 IWCC 411. The arbitrator had awarded maintenance benefits and vocational rehabilitation. Following an injury which arose out of an in the course of the claimant’s employment, claimant’s treating physician released him to full duty work with his right hand and a 25 pound lifting restriction in regards to his left hand. He was advised to follow up with his treating physician following a FCE. The respondent’s IME recommended the FCE. The FCE was conducted and the evaluator found that the testing was invalid. During the testing, the claimant exhibited extensive upper extremity “shaking,” however the carrying and lifting positions during which the shaking occurred put little, if any, strain on claimant’s injured hands. The FCE evaluator noted the test was not a valid indication of claimant’s function, even though the conclusion was that claimant could not return to his former position as a house mover. The claimant returned to his treating physician and complained of left hand pain as well as occasional, intermittent pain to the radial collateral ligament of the thumb and to the fifth digit. The claimant’s treating physician eventually released him to full duty work with no restrictions. Surveillance was conducted on the claimant which showed him engaged in various activities at a funeral home, including carrying a casket with both upper extremities. The surveillance video showed the claimant exhibiting no signs of difficulty performing these activities. The employer’s IME physician opined that, based on the results of the invalid FCE, the surveillance video and his examination of the claimant, the claimant was at maximum medical improvement, and capable of full duty work. Based on this evidence, the Commission reversed part of the Arbitrator’s decision awarding maintenance benefits and vocational rehabilitation. The McClory decision again illustrates the importance of the FCE results being considered along with other factors to determine disability and permanency. Here, the invalid FCE results were corroborated by favorable surveillance, the opinions of the treating physician and the opinions of the respondent’s IME physician. The respondent was able to avoid what very likely could have become a wage differential or permanent total disability. A quick review of the FCE evaluator’s conclusion that claimant was not able to return to his former employment as a house mover would be misleading. It was clear upon further review of the report that the FCE results were invalid. Following the trend of taking several factors into consideration when determining disability, including the results of the FCE, the Third District Appellate Court issued a decision in the case of Professional Transportation, Inc. v. Illinois Workers’ Compensation Commission. Professional Transportation, Inc. v. Illinois Workers’ Comp. Comm’n, 2012 IL App (3d) 100782WC. The claimant drove a multi-passenger van and transported railroad workers. He was required to load packs weighing 60 to 70 pounds. He filed an Application for Adjustment of Claim for a right knee injury. The claimant alleged that he stepped down from the vehicle onto a frozen piece of ice and rock and twisted his knee. An MRI of the right knee was ordered, which revealed a large tear

D-19

of the medial meniscus. An arthroscopy of the claimant’s knee was performed, and the claimant remained off work for approximately 3 months. At that point he attempted to return to work, however this lasted only four hours when his knee began to swell. After being examined by several physicians, the claimant eventually underwent total knee replacements to both knees. His left knee became symptomatic, allegedly due to overcompensation due to the injury to the right knee. However, all physicians agreed the left knee was not related to the work accident. After some postoperative complications, the claimant’s treating physician testified that he restricted the claimant from squatting, kneeling, frequent use of stairs, climbing and lifting or carrying in excess of 40 pounds. The respondent’s IME physician felt the restrictions were reasonable, but found no reason why claimant could not return to work as a van driver. The respondent’s risk manager testified that the employer could have accommodated claimant’s restrictions, but claimant had been terminated due to a lack of communication from claimant following treatment. The claimant underwent a FCE. During the evaluation, it was found that the claimant provided maximum effort and demonstrated the physical capability for work in the light and medium-light duty categories. The FCE report, along with the claimant’s age, education and work experience led a vocational rehabilitation expert, retained by the employer, to opine that the claimant could not return to his former employment as a van driver for the employer. He concluded claimant had no transferrable skills but could return to work in a cashier position. Claimant’s IME physician concluded claimant was restricted to sedentary work. When issuing a decision, the arbitrator relied on the results of the FCE, including the opinions of the therapist of the effort put forth, when reaching his conclusion that claimant did not prove entitlement to a permanent total disability. The arbitrator relied on the FCE to make the decision that the claimant could find work in the light and light-medium physical demand level categories, thereby not meeting his burden to establish his entitlement to permanent total disability benefits. The Commission reversed the arbitrator’s finding and awarded permanent total disability benefits under an “odd-lot” theory, but this award was eventually reversed by the appellate court. However, again what we must focus on here is the use of the FCE when determining permanency. It is evident that the opinions of the therapist were relied on in this matter as it was stated the claimant demonstrated maximum effort. The FCE established the baseline for the claimant’s abilities and had a direct effect on the decisions and awards made in this matter. The claimant’s physical capabilities as noted in the FCE were used in conjunction with other evidence, including the opinions of the treating physicians and IME physicians to establish claimant’s physical capabilities and capacity to work, at least at the sedentary level. The claimant was found to be entitled to a PPD award rather than a permanent total disability award. Other factors can play a significant role in the outcome and opinions found in a FCE as demonstrated in ABB C-E Services v. Industrial Commission. ABB C-E Services v. Industrial Commission, 316 Ill. App. 3d 745 (5th Dist. 2000). The claimant in this matter sustained an injury while employed as a carpenter and millwright for the employer. The claimant was working on his

D-20

hands and knees when a 16-inch, cylindrical brass bar which weighed between 9 and 10 pounds fell nearly 40 feet and struck the claimant in the lower back. Surgery was recommended. An independent medical examination was also conducted at the request of the respondent. The IME physician concluded that the claimant had a pre-existing spinal stenosis in the lumbar spine which became symptomatic following this occurrence. The IME physician also recommended surgery. The IME physician then became a treating physician and performed a bilateral decompressive lumbar laminectomy at the L4-L5 level. There were surgical complications which required two additional surgeries. The claimant then underwent a FCE where it was determined that the claimant could perform at the medium-heavy demand level for an eight-hour day. As a result of the injury and subsequent surgery, the claimant was prescribed Lortab. The claimant noted that while under the influence of this prescription his speech was affected, his reflexes were slower and his mood was affected. Surveillance was conducted of the claimant as well which showed the claimant working around his farm, bending and lifting objects. During this time, the claimant’s prescription for Lortab was refilled and it was opined by the IME physician who became the treating physician that he believed the claimant would be 100% disabled. The claimant was eventually determined to have reached maximum medical improvement and he attempted to return to his prior employment. The claimant prepared scaffolding which required him to climb. By the end of the day, the claimant was in severe pain and took a Lortab. The claimant returned to his physician who indicated that working while under such heavy pain medication was contraindicated. Following that appointment, the physician indicated that the FCE in which the claimant participated did not adequately reflect the claimant’s capabilities. During the evaluation, the claimant was under the influence of Lortab which affected his performance and skewed the results. The physician opined that the claimant was going to be totally disabled from any job that the claimant had previously held. Further, he indicated that the claimant could not lift more than 10 to 15 pounds and would not be able to sit for more than an hour or two without severe pain. He opined that the claimant would not be able to do any twisting, turning, bending, stretching or repetitive movement of his lower spine, and the long term use of the Lortab prescription would be required. He later opined that this claimant was totally disabled. The respondent had claimant evaluated by another IME physician. This IME physician concluded claimant was precluded from even light duty work because of his Lortab prescription. The surveillance did not affect his opinions. The only way claimant could return to light duty work would be if he was weaned off his narcotic medication, according to this IME physician. Relying on the statements of the physician that the results of the FCE was not determinative of the claimant’s abilities had he not been under the influence of the prescription, the Arbitrator found the claimant permanently and totally disabled. The Commission affirmed, as did the circuit court. The employer maintained that pursuant to the FCE, the claimant could perform at the medium-heavy physical demand level, and this was corroborated by the surveillance conducted. The appellate court affirmed the decision of the circuit court finding that the

D-21

decision that claimant was permanently and totally disabled was not against the manifest weight of the evidence. The result in ABB C-E Services shows how outside factors can play a substantial role in the outcome of a FCE. Additionally, unlike the prior cases, the defense appeared to be relying solely on the FCE results to defend the permanent total disability. The FCE was the crux of the respondent’s defense, but no other evidence supported the FCE conclusions. Although there were no overt efforts on behalf of the claimant to affect the outcome of the evaluation, it is apparent that external factors, such as pain medications, can affect the objective outcome of such evaluations. The claimant’s prescription medication skewed the results of the FCE, and claimant allegedly would not be able to work while taking the medication. It probably did not help that the treating physician who offered the permanent total disability opinion was previously the respondent’s IME physician. One option for the respondent may have been to determine if claimant could be weaned of the narcotic pain medication or replace that medication with another medication that would have allowed him to return to work, per the FCE results. Another option may have been to require another FCE with a medication claimant could take while working. Other factors can play a role in the court’s interpretation of the results of a FCE. In Storberg v. Illinois Workers’ Compensation Commission, the Second District Appellate Court found that the results of the FCE were not determinative of the claimant’s entitlement to an award of further benefits and prospective medical care. Storberg v. Illinois Workers’ Compensation Comm’n, 2015 IL App (2d) 140724WC-U. Not only did symptom magnification on the part of the claimant play a role in this decision, but the claimant’s own physical attributes, aside from his alleged work injury also were a key factor. Although this is an unpublished opinion by the court, it is instructive in illustrating the detailed analysis of the FCE by the Commission. The claimant, a water operator in the water and sewer department for the Village of Lake Zurich, lifted a water pump and motor, and felt pain down his back. The claimant was initially diagnosed with a low back strain and placed on light-duty restrictions. Later, the claimant complained of neurologic/urological symptoms and was immediately sent for an MRI, which revealed essentially normal findings. The claimant was eventually referred to a neurosurgeon who recommended an epidural steroid injection and restricted the claimant from all activities. An EMG revealed normal findings. An IME was performed at respondent’s request, at which time the examiner found that the MRI films were essentially normal and that the level of pain the claimant reported during his examination did not correlate with the objective findings. The examiner went as far as to say that the claimant’s claim made no sense, and the findings were consistent with symptom magnification. The claimant’s physician recommended a FCE. At the time, the claimant was still restricted from work. The FCE was completed and revealed that the claimant’s physical capabilities rested in the light to medium physical demand level. The claimant could lift 39 pounds occasionally and frequently lift 17 pounds. The results of the evaluation prevented the claimant from returning to his regular position. The FCE evaluator recommended work conditioning.

D-22

The independent medical examiner reviewed the results of the FCE. He found that the FCE was properly performed on the claimant; however he opined that it was not medically necessary as it related to the claimant’s work injury. Continuing, the independent medical examiner opined that what the FCE did not address is whether the claimant’s fitness level would be the basis for the results of the evaluation rather than the workplace injury itself. The claimant was noted to be morbidly obese and deconditioned, and not as a result of the work injury. The IME physician issued an opinion finding that the results of the FCE were not related to the claimant’s work injury. Rather, the claimant’s morbid obesity and physical deconditioning played a causal role in establishing the findings in the FCE. Following this, the treating physician recommended work conditioning. During arbitration, the arbitrator relied heavily on the opinions of the independent medical examiner and agreed that the findings in the FCE were the results of the claimant’s physical condition, not the workplace injury. The arbitrator further noted in his decision that the findings of the MRI, the opinions of the independent medical examination and the subjective complaints made by the claimant, which did not correlate with the objective findings, all played a role in the decision to deny the claimant his demand of temporary total disability. The Illinois Workers’ Compensation Commission affirmed the decision of the arbitrator, as did the circuit court. This decision was eventually then affirmed by the Second District Appellate Court. Storberg is again a great example of not only how the Commission has taken a detailed approach to the use of the FCE when determining an award, but how the use of the FCE in conjunction with tools such as the independent medical examination can be of benefit to an employer, even when the results of the FCE seem to create a daunting task to overcome. Even when the results of a FCE, on its face, seem to preclude a claimant from returning to his or her former employment, it is important to evaluate the FCE results in the context of all evidence regarding disability. The above cases confirm that the Illinois Workers’ Compensation Commission does take FCE results into consideration when determining disability awards. The formulation of a multi-layered defense is key in using FCEs to the advantage of the employer. One obvious step to aid in the defense is to obtain an IME to comment on claimant’s ability to return to work and comment on the FCE results. Additionally, if the Commission is going to place great weight on the results of the FCE, it is imperative to give the FCE evaluator as much information as possible regarding claimant’s former position before reaching a conclusion as to whether claimant can return to that former employment. Effort and validity testing should be closely reviewed. A close evaluation of the results of a FCE can help an employer determine whether the results should play a significant role in determining a claimant’s physical capabilities. One big mistake is to simply accept the treating physician’s opinion that claimant can “return to work per FCE” or the opinion that provides restrictions which are greater than those noted in the FCE. Below you will find some key points to take into consideration when reviewing and analyzing the results of a FCE.

D-23

III. FCE CHECKLIST

1. Confirm that the functional capacity evaluator is provided with as much detail as possible regarding the claimant’s position.

Do not rely on claimant’s description of the job duties. Provide an accurate, detailed, written description of the claimant’s job duties. The job description should include a detailed description of the physical demands of the

position. Consider an ergonomics/job analysis to expand on this detail. Consider a video analysis of the claimant’s position. Ensure there is a solid basis for the evaluator’s opinion regarding ability to return to

work. 2. Evaluate effort/validity of FCE testing

Consider conducting surveillance on claimant if there are “red flags” regarding claimant’s effort in FCE.

Review entire body of FCE, not just conclusions/summary section, determine if there are multiple comments concerning lack of effort which lead to questionable results.

Do the FCE results corroborate with physical exam findings? Do the FCE results corroborate with objective, radiological testing?

3. Obtain your own Section 12 Independent Medical Examination.

When doing so, it is best to provide the physician with the results of the FCE to allow the physician to critique the FCE.

Provide the physician with the description of the claimant’s job duties (including a written job analysis, physical demands and job duties video).

Ask the physician whether the results of the FCE are causally related to the work injury or whether the results are due to an unrelated health condition – e.g., deconditioning, morbid obesity, unrelated injury.

Ask the physician to evaluate the claimant’s subjective complaints and alleged capabilities against the objective findings and objective testing conducted.

4. Do not simply accept treating physician’s opinion that restricts the claimant “per the FCE” without providing detail on the specific restrictions.

If you have permission to contact the treating physician, make certain the physician understands the claimant’s job duties, notes whether the restrictions are due to work injury, fully evaluated the FCE relative to effort and validity.

5. Do not simply accept the treating physician’s restrictions which are more restrictive than those contained within the FCE.

The physician ordered the FCE, why isn’t he or she accepting those results?

D-24

6. Is the claimant under the influence of any medication during the FCE that he will be unable to take while working due to the side-effects?

Will these medications skew the results of the FCE? Can claimant be prescribed a different medication that can be taken while working? Does the FCE need to be performed again?

7. Does the claimant require work conditioning/work hardening?

If performed, would this improve claimant’s functionality? Was the FCE performed too early in the process? Was the claimant at

MMI/deconditioned? 8. Consider offering claimant work within the restrictions of the FCE, if available.

If claimant makes no attempt to return to work in any capacity, Commission may not look at this favorably for the claimant.

D-25

Brad A. Antonacci

- Partner

Brad concentrates in the areas of workers' compensation and civil litigation. With extensive experience defending hundreds of employers before the Illinois Workers' Compensation Commission, Brad has arbitrated many workers' compensation claims as well as argued numerous reviews before the Workers' Compensation Commission during his career. He has also argued appeals of Workers' Compensation Commission decisions before the circuit court. Brad has spoken on and authored articles regarding employment layoffs and temporary total disability benefits. Brad has also spoken on updates to Workers' Compensation case law. He has authored articles regarding the Workers' Compensation Fraud Statute. Brad also co-authored, "Loaning Employer Not Liable . . ., Personal Comfort Doctrine," for the Illinois Defense Counsel Quarterly (2008). In 2012, Brad was named to the Illinois Super Lawyers Rising Stars list. He is a member of the Winnebago County Bar Association in its workers' compensation section. Brad is also a member of the drone law practice group, which advises clients on issues relating to drone operations. Brad has spent his entire legal career with Heyl Royster in the Rockford office beginning in 2002 and became a partner in 2013. Brad received his J.D. from Northern Illinois University School of Law, where he was an editor of the Law Review, and a B.A. from the University of Illinois. Significant Cases Ordoniz v. Dano Auto Body - Petitioner claimed

he injured his low back and allegedly suffered a herniated disc while removing a car door from a vehicle. He amassed approximately $225,000 in outstanding medical bills for treatment in the form of chiropractic care, physical therapy, medications, numerous spinal injections, a radiofrequency ablation and numerous radiological tests. The Workers' Compensation Commission relied on our IME and Utilization Review reports in finding petitioner suffered a lumbar strain and in denying approximately $225,000 in alleged outstanding medical bills as unreasonable, unnecessary and causally

unrelated to the work injury. The Commission awarded 3% person-as-a whole.

Alanis v. Woodstock Christian Life Services - Petitioner injured her lower back while pushing a cart and slipping and falling on some water. She received medical treatment for approximately one month, was released from treatment and was released to return to work. She eventually began treating with a pain management physician who performed a series of lumbar spine injections as well as a radiofrequency ablation. When the pain management physician released petitioner after one year of treatment, the petitioner had accumulated an extensive amount of outstanding medical bills which we denied. Relying on our IME physician, the Workers’ Compensation Commission denied approximately $34,000 in alleged outstanding medical bills and awarded 6% person-as-a-whole for a lumbar strain.

Hieber v. Glass and Mirror Company - Petitioner suffered a compensable and accepted right shoulder injury. Following right shoulder surgery, petitioner developed an infection in the right shoulder which resulted in a revision surgery. Subsequent to the second surgery, the petitioner suffered from kidney failure and eventually required a kidney transplant. On behalf of glass and mirror company client (Company) the firm presented evidence and an expert opinion that the renal failure was not related to the right shoulder surgeries and infection, that petitioner had risk factors for developing renal failure, and that petitioner subsequently developed renal failure in the transplanted kidney. The arbitrator found the petitioner's renal failure to be causally connected to the right shoulder work injury and awarded all benefits related to the renal failure. On review, the Worker's Compensation Commission found no causal connection between the work injury and the petitioner's kidney condition, and the circuit court affirmed on appeal. The Commission's decision resulted in a reduction of the arbitrator's award of more than $300,000.


D-26

Publications "Loaning Employer Not Liable . . ., Personal

Comfort Doctrine," Illinois Defense Counsel Quarterly (2008)

Public Speaking “All I Want for the Holidays is a Drone: Permitted

Uses Today and What to Expect Tomorrow” Heyl Royster Governmental Lunch & Learn Seminar, Rockford, IL (2015)

Professional Recognition Named to the 2012 and 2013 Illinois Super

Lawyers Rising Stars list. The Super Lawyers Rising Stars selection process is based on peer recognition and professional achievement. Only 2.5 percent of Illinois lawyers under the age of 40 or who have been practicing 10 years or less earn this designation.

Professional Associations Illinois State Bar Association Winnebago County Bar Association

Court Admissions State Courts of Illinois United States District Court, Northern District of

Illinois Education Juris Doctor, Northern Illinois University School

of Law, 2002 Bachelor of Arts-Sociology, University of Illinois,

1999


D-27

Rachel K. Viel

- Physical Therapist, Ortho Illinois

Rachel has been working in the Rockford, Illinois area since 1997 honing her skills as an expert in the area of functional testing and management of work-related injuries. She has received training and certifications in several nationally-recognized functional testing programs and has been using the XRTS hand strength assessment and lever arm in her practice since 2007. Rachel completed formal training in the XRTS FCE system including the report writer in October of 2010 and has been using the XRTS product exclusively for functional testing ever since. Rachel has also provided educational training to insurance adjusters, case managers and attorneys regarding functional testing. She is currently employed as a Certified Workers’ Compensation Healthcare Provider and Certified XRTS FCE provider at Ortho Illinois.

E-1

LEGISLATIVE UPDATE AND NEWS FROM THE COMMISSION

Presented and Prepared by: Bruce L. Bonds

[email protected] Urbana, Illinois • 217.344.0060



E-2

LEGISLATIVE UPDATE AND NEWS FROM THE COMMISSION I. LEGISLATIVE UPDATE ................................................................................................................................. E-3

A. Legislative Negotiations Are Ongoing. ................................................................................. E-3 B. Other Business Proposals: .......................................................................................................... E-3 C. Labor/Trial Lawyer Proposals: ................................................................................................... E-3 D. Other Business Concerns: .......................................................................................................... E-4 E. What’s going on? .......................................................................................................................... E-4 F. When might we know? ............................................................................................................... E-4

II. NEWS AT THE COMMISSION .................................................................................................................. E-4

III. RULES COMMITTEE ..................................................................................................................................... E-4


E-3

LEGISLATIVE UPDATE AND NEWS FROM THE COMMISSION I. LEGISLATIVE UPDATE

A. Legislative Negotiations Are Ongoing.

1. Workers’ compensation reform remains part of Governor Rauner’s “turn-around” agenda in the budget negotiations

2. Governor Rauner’s workers’ compensation points of emphasis:

(a) Primary Cause Standard

(b) Restricting the definition of “traveling employees”

B. Other Business Proposals:

1. Change in the medical fee schedule to a “Resource-Based Relative Value Scale” instead of decreasing the fee schedule by an additional 30%. An RBRVS is used in part by Medicare and by most HMOs to determine how much money healthcare providers are to be paid

2. New rules governing reimbursements for “implants”

3. New rules governing reimbursements for “compounding of medicines”

4. New rules with respect to charges for durable medical equipment (DME)

5. Changes in the rules regarding appeals from the Illinois Workers’ Compensation Commission to the courts

6. Employer-directed medical care (with repeal of PPPs)

C. Labor/Trial Lawyer Proposals:

1. A state-run mutual workers’ compensation insurance company funded initially from capital from the Illinois Workers’ Compensation Commission Operations Fund (SB2556, HB5925). → NOTE: In 2014, 339 workers’ compensation insurance companies wrote workers’ compensation coverage in Illinois, the most of any state in the nation, and this does not include self-insureds

2. A bill that requires a PPD determination within 20 days of any determination that an employee is at maximum medical improvement

E-4

D. Other Business Concerns:

1. Appellate court decisions (judicial activism)

2. Difficulty obtaining certification for appeals to the Supreme Court

E. What’s going on?

Discussions are ongoing, but are very much behind the scenes at this point. It is understood that municipalities and other state entities concerned over workers’ compensation costs are pressing for reform as well.

F. When might we know?

II. NEWS AT THE COMMISSION

Arbitrators Whose Terms Expire July 1, 2016

Arbitrator Term Expiration Arbitrator Since Carlson, Kurt 07/01/2016 10/14/2011 Cronin, Brian 07/01/2016 10/14/2011 Doherty, Carolyn 07/01/2016 10/14/2011 Dollison, Greg 07/01/2016 10/14/2011 Flores, Barbara 07/01/2016 10/14/2011 Gallagher, William 07/01/2016 02/01/2012 Hemenway, Christina 07/01/2016 09/14/2015 Lee, Edward 07/01/2016 10/14/2011 Mason, Molly 07/01/2016 10/14/2011 McCarthy, Douglas 07/01/2016 02/07/2012 Simpson, Deborah 07/01/2016 10/14/2011 Williams, Robert 07/01/2016 10/14/2011

III. RULES COMMITTEE

A blue ribbon rules committee comprised of Arbitrators, Commissioners, representatives of the insurance industry, self-insurers, Respondents, and Petitioners concluded its work on March 31, 2016. “Non-partisan” changes intended to update the rules governing practice before the Commission were agreed upon and forwarded to the full IWCC for review. Thereafter they will be forwarded to JCAR for administrative review before becoming effective.

E-5

Bruce L. Bonds

- Office Managing Partner

Bruce is the Managing Partner of the firm's Urbana office and past chair of the firm's statewide Workers' Compensation Practice. He concentrates his practice in the areas of workers' compensation, third-party defense of employers, and employment law. With extensive experience before the Illinois Workers' Compensation Commission, Bruce has defended employers in thousands of cases during the course of his career. As a result of his experience and success, his services are sought by self-insureds, insurance carriers, and TPAs. Bruce served as a technical advisor to the combined employers group in the negotiations which culminated in the 2005 revisions to the Illinois Workers' Compensation Act. He worked as a technical advisor to the Illinois Chamber of Commerce as well as with a number of Illinois legislators and state agencies in the process that resulted in the 2011 Amendments to the Illinois Workers' Compensation Act. In 2015, he was appointed to the Illinois Workers' Compensation Commission's Rules Review and Revisions Committee. Bruce is an Adjunct Professor of law at the University of Illinois College of Law where he has taught Workers' Compensation Law to upper-level students since 1998. Bruce has co-authored a book with Kevin Luther of the firm's Rockford office entitled Illinois Workers' Compensation Law, 2015-2016 Edition, which was published by Thomson Reuters. The book provides a comprehensive, up-to-date assessment of workers' compensation law in Illinois. Bruce is a frequent speaker on workers' compensation issues at bar association and industry-sponsored seminars. Bruce has served as Vice-Chair of the ABA Committee on Employment, Chair of the Illinois State Bar Association Section Council on Workers' Compensation, and currently serves on the Employment Law Committee of the Chicagoland Chamber of Commerce and the Illinois Chamber of Commerce Workers' Compensation Committee. He has been designated as one of the "Leading Lawyers" in Illinois as a result of a survey of Illinois attorneys

conducted by the Chicago Daily Law Bulletin; another survey published by Chicago magazine named Bruce one of the "Best Lawyers in Illinois" for 2008. Bruce has spent his entire legal career with Heyl Royster beginning in 1982. Publications "Illinois Workers' Compensation Law," 2015-

2016 ed. (Vol. 27, Illinois Practice Series), updated and published by Thomson Reuters (2009, 2012, 2013, 2014 and 2015)

"Evaluating Permanent Partial Disability Under the 2011 Amendments of the Illinois Workers' Compensation Act," Heyl Royster Workers' Compensation Update (September 2012)

Public Speaking “Workers’ Compensation and Section 5 Liens”

“Tort Practitioners’ Topics of Interest” ISBA Seminar (2016)

“Medical Marijuana: A Cloud of Uncertainty Over Employers” Heyl Royster 30th Annual Claims Handling Seminar (2015)

“Use of Rated Age Annuities to Reduce Exposure in High Value Cases” 2015 Illinois Workers Compensation Forum - Chicago, Illinois (2015)

“Workers Compensation and the Government Employer: Where We Are, How We Got Here and What We Can Do About It” Illinois County Governing Conference (2015)

“Defending High Exposure and Catastrophic Workers’ Compensation Cases” 34th Annual SEAK National Workers’ Compensation and Occupational Medicine Conference (2014)

“2011 Amendments to the Illinois Workers’ Compensation Commission Act, Three Years Later” Central Illinois Human Resource Group (2014)

“Defending High Exposure and Catastrophic Workers’ Compensation Cases” Heyl Royster 29th Annual Claims Handling Seminar (2014)

E-6

“Proven Tactics for Successfully Defending High Exposure Workers’ Compensation Claims and Keeping Them From Spiraling Out Of Control” Illinois Workers’ Compensation Forum (2014)

“Workers’ Compensation Reform in Illinois – The Political and Legal Process: A Case Study for the Nation” DRI Annual Meeting (2013)

“The 2011 Amendments to the Illinois Workers’ Compensation Act” Eastern Illinois Human Resources/Safety Council in Urbana, Illinois (2012)

“AMA Guides – Seize the Moment to Reduce PPD Awards” Heyl Royster 27th Annual Claims Handling Seminar (2012)

“What Every Employer Should Know About the 2011 Amendments to the Illinois Workers’ Compensation Act” Kraft Foods, Inc., Champaign, Illinois (2012)

“Investigating the Suspicious Claim” Danville Area Dental Society (2012)

“2011 Amendments to the Illinois Workers’ Compensation Act: One Year Later” Risk Managers Society of Central Illinois, Bloomington, Illinois (2012)

“Use of AMA Ratings to Evaluate Permanent Partial Disability” Illinois Hospital Association/Illinois Compensation Trust, Naperville, Illinois (2012)

“Workers’ Compensation Reform in Illinois” Illinois Association of Defense Trial Counsel Webinar (2011)

“2005 Amendments to the Workers’ Compensation Act: Yesterday, Today and Tomorrow” Downstate Illinois Occupational Safety & Health Day (2010)

“The 2005 Amendments, 3 Years Later: The Respondent” SafeWorks 16th Annual Work Injury Conference (2008)

“Update on the Illinois Workers’ Compensation Act and Medical Fee Schedule” Illinois-Iowa Safety Council Annual Convention (2008)

“Recent Changes to the Illinois Workers’ Compensation Statutes” Illinois Manufacturers Association (2005)

Professional Recognition Martindale-Hubbell AV Preeminent Inducted as a Fellow in the College of Workers'

Compensation Lawyers Named as one of the "50 Most Influential People

In Workers' Compensation" by SEAK, Inc. in 2014.

Selected as a Leading Lawyer in Illinois. Only five percent of lawyers in the state are named as Leading Lawyers.

Named to the Illinois Super Lawyers list (2012-2016). The Super Lawyers selection process is based on peer recognition and professional achievement. Only five percent of the lawyers in each state earn this designation.

Professional Associations Illinois Workers' Compensation Commission's

Rules Review and Revisions Committee Illinois State Bar Association (Past Chair Workers'

Compensation Law Section Council) Champaign County Bar Association Illinois Association of Defense Trial Counsel

(Member, Workers' Compensation Committee) Defense Research Institute Illinois Self-Insurers Association Workers Compensation Lawyers Association

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

Illinois United States Court of Appeals, Seventh Circuit United States Supreme Court

Education Juris Doctor, Washington University School of

Law, 1982 Bachelor of Arts-Finance, University of Illinois,

1979

Learn more about our speakers at www.heylroyster.comLearn more about our speakers at www.heylroyster.com

F-1

TEMPORARY TRANSITIONAL EMPLOYMENT

Presented by: Craig S. Young


Brad A. Elward


Jessica M. Bell


Springfield, Illinois • 217.522.8822

Prepared by: Jessica M. Bell


Springfield, Illinois • 217.522.8822



F-2

TEMPORARY TRANSITIONAL EMPLOYMENT I. INTRODUCTION ............................................................................................................................................ F-3 II. LEGAL ANALYSIS .......................................................................................................................................... F-4

A. Statutory Support ......................................................................................................................... F-4 B. Contractual Considerations ....................................................................................................... F-4 C. Similar Working Expectations/Considerations ................................................................... F-5

III. PROCEDURAL CONSIDERATIONS .......................................................................................................... F-5

A. Prior to the Filing of a Claim – Employment Policies ...................................................... F-5 B. After a Claim is Filed .................................................................................................................... F-6

1. Make sure it’s a “bona fide job offer” ..................................................................... F-6 2. Vocational Experts ......................................................................................................... F-7 3. Preparing for Trial .......................................................................................................... F-8 4. Anticipating the Opposing Arguments .................................................................. F-9

(a) Stabilization of Condition ............................................................................ F-9 (b) Traveling Employee concerns ..................................................................... F-9 (c) Interference with Treatment Plans ..........................................................F-10 (d) Vocational Rehabilitation is Being Inappropriately Used ..............F-11

IV. CURRENT TRENDS IN TTE .......................................................................................................................F-12

A. Other States ..................................................................................................................................F-12 B. Decisions Addressing TTE ........................................................................................................F-13

V. JUSTIFICATION OF TTE FOR EMPLOYERS .........................................................................................F-14 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.

F-3

TEMPORARY TRANSITIONAL EMPLOYMENT I. INTRODUCTION

The goal of returning an employee to work permeates most aspects of a workers’ compensation claim. The employee’s entitlement to temporary monetary disability benefits (often called “indemnity”) hinges on his ability to return to the work force while recovering from the work injury. The ultimate value of the case depends on whether or not that injured worker has returned to the workforce at all, and if so, in what capacity. The employer then has an interest in both of those issues, so as to mitigate costs both during the employee’s active treatment and after treatment at the time of settlement. During the course of medical treatment for the injury, employees are often released to return to work with certain restrictions. There is no dispute that an employer can offer temporary work to the employee within his restrictions as part of the company’s overall return to work policy. This situation offers benefits to both the employer and the employee, ranging from reduced workers’ compensation benefits (and thereby reduced premiums) for the employer, to the positive association the employee gets from being productive instead of sitting around home waiting to improve. Because the Workers’ Compensation Act (Act) suggests that its primary purpose is to return an injured employee to the workforce, and with concern for the issues above, defense attorneys have long searched for innovative ways to get an injured employee back to work in some capacity. Cue the development of Temporary Transitional Employment (TTE), often called “modified duty off-site” (MDOS) and “early-return-to-work” (ERTW) programs. These programs describe a working relationship wherein an injured employee, while still receiving medical treatment for a work injury, is released to return to work with certain restrictions that cannot be accommodated by an employer. In an attempt to return the employee to the workforce, the employer, or insurance company, in many instances, makes arrangements for the employee to work for a third party that can accommodate the individual’s restrictions. The relationship usually continues until the employee’s restrictions are lifted such that they can return or transition to their pre-injury employment. These third parties are often not-for-profit organizations or charities such as Goodwill Industries or the Salvation Army, but can be any type of work at all. The arrangement appears ideal on the surface – the purpose of the Act is being satisfied because the employee is returning to the workforce, albeit on a temporary basis; the temporary employer is receiving the benefit of having an employee work without incurring the costs typically associated therewith; and the insurance company is able to reduce the cost of the claim, which would likely also reduce the risk of a potential increase in premiums for the employer – so everyone seemingly wins. In addition, the employee is probably more motivated to cooperate with his medical treatment, be released from care, and return to his pre-injury employment when the alternative is working at a not-for-profit instead of sitting on the couch watching daytime TV.

F-4

Although there are some clear benefits to the employee as well, petitioners are often not jumping up and down at the opportunity to participate in a TTE program. Their attorneys, in turn, are arguing against what they contend is “forcing” employees to participate in TTE and the issue is quickly becoming one of the more hotly debated topics in a workers’ compensation case. Let’s break down the various aspects of TTE. II. LEGAL ANALYSIS

A. Statutory Support

The Illinois Workers’ Compensation Act does not currently include any direct reference to TTE. The phrase “transitional work” does not appear in the Act and there is no clear statutory section that employers can cite to in support of their position that an employee should be required to participate in TTE when it is offered. Conversely, however, the Act also does not prohibit TTE. The fact that the Act does not specifically provide for TTE does not mean the Act is completely void of support for TTE. For example, Section 8(d) discusses wage differentials, which only become relevant when the employee returns to employment earning less than he was at the time of his injury. 820 ILCS 305/8(d)(1). This most often occurs when the employee has secured a different job in a different field and his wages are less than what he was earning at the time of the injury. Typically, the case is resolved by a settlement representing a portion of the difference between the earnings. That the Act explicitly provides direction on how to handle a situation when the injured worker returns to a job different than his pre-injury employment should be argued when presenting a case in favor of acceptance of a TTE program. Before one even considers discussing permanency, the Act provides for temporary partial disability (TPD) benefits when an employee is earning less while working light duty than he would be earning if employed in the full capacity of the job. 820 ILCS 305/8(a). The Act specifically contemplates the light duty work that could trigger TTD to be a modified job provided to the employee by the employer “or in any other job that the employee is working.” Id. An argument can be made that TTE is analogous to both TPD and a wage differential since the Act clearly contemplates an employee returning to the work force at a position other than what he or she was working at the time of injury, both during treatment and after being released from care, and provides direction on how to handle benefits in those situations.

B. Contractual Considerations

With respect to TTE, an argument against forcing employees to participate is often a question of liability. For example, if the employee is injured while working at the TTE facility, the argument against TTE suggests there would be a dispute over which employer would be responsible for

F-5

the injury, potentially leaving the injured employee with significant medical bills while the parties attempt to shift the blame. A comparison can be made to a borrowing/lending employee situation as discussed in 820 ILCS 305/1(a)(4). In a borrowing/lending employee situation, the injured employee is typically “employed” by the loaning employer. Their wages may be paid by that employer and they are typically covered under the loaning employer’s workers’ compensation insurance. The loaning employer sends the employee to work for the borrowing employer, typically at an off-site location. The borrowing employer directs the employee’s work. Defense attorneys should point out the clear analogy of a TTE situation to a borrowing/lending employer scenario, which is specifically contemplated by the Act and attempts to resolve that potential problem. In a more aggressive manner, consider drafting a contract between all parties – employer, employee, and third-party employer – that outlines the specifics of the employment relationships, i.e., who is responsible for compensation, who is providing workers’ compensation insurance, and who has liability in the event of an accident. While it can be a slippery slope to create contract liability in the event of a possible future accident, if all parties enter into the agreement fully aware of the potential risks therein, there is a strong basis to argue that the eventual TTE is legitimate and an acceptable job offer. If the employer uses a vendor to set up the TTE and the same TTE employer is routinely used, a contract outlining those issues could be on hand and available in each instance.

C. Similar Working Expectations/Considerations

With respect to the specifics of the TTE opportunity, it is probably best if the job hours are the same as the hours the employee worked at his pre-injury job. Likewise, the TTE opportunity should be within the same distance from the employee’s house. Asking the employee to drive an hour for TTE when he previously traveled five miles to work, or asking him to work third shift when he was hired for first shift work, may fuel an employee’s argument as to why the TTE is unreasonable, and therefore, should not be allowed. III. PROCEDURAL CONSIDERATIONS

If there is no direct statutory support for TTE, how do we determine, procedurally, when and in what situations it is appropriate and should be utilized?

A. Prior to the Filing of a Claim – Employment Policies

The possibility of returning an employee to work should be a concern for an employer even before an injury occurs. Naturally, the considerations are not with respect to a particular employee, but rather general policy and employment concerns about how to handle that situation, should it arise.

F-6

One possibility is to specifically address return to work policies in the employee handbook, if one exists. If the employer intends to make a concerted effort to accommodate any restrictions during medical treatment, make that clear in the handbook. If the line of work is conducive to accommodating various levels of restrictions, make it clear that the intention of the employer is to accommodate, irrespective of the restrictions. If the use of TTE is a possibility, it should be specifically mentioned in an employee handbook. When discussing the potential for TTE, address whether or not participation is an expectation or voluntary in the event of an injury. The handbook should also address whether the TTE program is facilitated through the use of a third party, like a vocational rehabilitation vendor, or managed solely through the employer. If a TTE program will be utilized, try to preempt the eventual arguments from an injured employee or his attorney by addressing:

How it will affect the employee’s seniority? How it will affect the employee’s pay? Will the employee continue to receive benefits (i.e., health insurance)? What are some examples of potential TTE employers? Will a vendor be used to facilitate a TTE job? Who may be eligible for a return to work or TTE program?

If the expectation is that participation is mandatory for employees, the employee handbook should include an acknowledgement page where the employee will acknowledge receipt and agreement to the policy. It should be signed and dated by the employee and kept in the employee’s personnel file. Still, there are a number of things that cannot be summarily addressed in a policy handbook. For example, a general policy cannot guarantee that TTE will be available in every situation since every injury and recovery is different. Employees cannot know for sure where TTE could place them since work restrictions and a potential TTE employer’s open positions vary in every situation. However, basic considerations can be raised so that it is apparent that the use of TTE is well thought out, planned, and that the employee was aware of (and agreed to) a number of the issues that may later be objected to.

B. After a Claim is Filed

1. Make sure it’s a “bona fide job offer”

Although it cannot be denied that a vendor will be contacting the TTE employer and facilitating the potential working relationship, the job itself needs to be a legitimate job. Charitable organizations such as Goodwill Industries do not exist solely for the purpose of providing TTE. They have regular employees that work regular schedules. A potential job for an injured employee needs to be legitimate employment that could/would be offered to the general public. If the TTE job is of a more permanent nature once the claimant has completed treatment, additional considerations apply. In a recent case, an employer used a vendor to locate

F-7

employment for an injured employee with a third party once the employer could not accommodate the employee’s permanent restrictions. Although the employee “interviewed” for the job, it was discovered at trial that the temporary employer was paid to conduct the interview and received a fee from the employer to accommodate the petitioner’s restrictions. The arbitrator noted the position was not a “competitive job,” voiced concerns over the likelihood of the position continuing upon resolution of the workers’ compensation case under those circumstances, and found it was not a “bona fide job offer” sufficient to be used for terminating benefits or discussing permanency.

2. Vocational Experts

A vocational rehabilitation expert should be considered. The Act provides that the employer must provide medical and vocational services to rehabilitate the employee. 820 ILCS 305/8(a). If the employee is released to return to work with restrictions that the employer cannot accommodate, in order to attempt to mitigate ongoing costs, a course of vocational rehabilitation can be started (although admittedly costly itself). The employee’s entitlement to ongoing financial benefits then hinges on his cooperation with the vocational rehabilitation process. Consequently, one avenue is to have a TTE program in place that can be used during the vocational rehabilitation process. There are two ways to go about this. First, have a TTE opportunity be a job lead as part of the vocational rehabilitation. It would be treated just like any other job prospect that has work within the employee’s restrictions, meaning benefits can likely be suspended if the employee refuses the opportunity. In that instance, however, if the employee secures employment through vocational rehabilitation, the job would probably not be classified as TTE and would, instead, be a new job independent of the previous employment. The employee could work in that capacity while continuing to seek treatment and then, assuming a release with restrictions that the employer would accommodate, return to his or her pre-injury employment. In that instance, all of the benefits of a TTE situation are present, but because the opportunity was offered through vocational rehabilitation, it would likely not be viewed as TTE and should be more widely accepted. Alternatively, consider having participation in a TTE job a condition of vocational rehabilitation. For example, the vocational rehabilitation process often involves more than just finding the injured worker a job. It involves preparing them for re-entering the work force through resume building, professional interview skills, educational instruction, and so forth. Part of that process can be participation in a TTE program while searching for a more permanent, appropriate job. In support of this alternative, you will likely need a vocational expert to testify about the advantages of continuing to be a contributing member of the work force and how it affects future employability. Another component of vocational rehabilitation is networking and making connections for potential employment. Working through a TTE program provides an injured worker with the opportunity to make networking connections that the worker can use both during their recovery

F-8

to remain a functioning member of society and, perhaps, after their release in both their personal and professional lives. Including TTE with vocational rehabilitation under this method may not alleviate the arguments against the legitimacy of TTE, and we must still need to prepare for litigation if the employee does not participate and benefits are consequently suspended, but it certainly adds to the argument in favor of TTE.

3. Preparing for Trial

Once it is clear that the employee will not willingly participate in TTE, an employer should begin to develop arguments in support of TTE for trial. Consider using a vocational rehabilitation specialist to opine on the benefits of the employee returning to the work force in any capacity. Include factual evidence regarding how extended periods of time away from the work force affect an employee’s likelihood of returning to work. Be sure to address the psychological and emotional effects of being removed from the work force for an extended period of time, and how those factors ultimately play into the likelihood of the employee being a productive member of the work force. Include factual evidence – namely actual sociological/psychological studies – to support your position and do not rely solely on the testimony of your vocational rehabilitation expert. In that regard, be sure to prepare your vocational rehabilitation expert for trial. Try to select a neutral expert, but, at the very least, do not use an employee of the employer or insurance company, (or someone associated with them), as the bias is obvious and would reduce your expert’s credibility at trial. While it cannot be denied that the vocational expert was solicited by the defense, there are plenty of credible and neutral rehabilitation specialists available for consideration. Another possibility is to get a medical opinion from a physician on the need for the injured worker to remain physically active during ongoing medical treatment. It is sometimes implicit in medical records that remaining physically active will promote a quicker and more effective recovery. However, in cases where the worker is unwilling to participate voluntarily in TTE, do not rely on what may be implicit in the medical records and certainly do not rely on what the employee’s treating physician may state (unless it is favorable to your position, of course). Instead, consider soliciting an opinion on that issue directly. Employers often solicit an independent medical examination once the employee is released with certain restrictions in order to confirm the need for the restrictions. At the time of that examination, ask the IME physician to comment on the medical benefits of the employee remaining physically active by working. Of course, this suggestion is not applicable in all instances as the restrictions may vary, but a medical opinion addressing the physical benefits of continuing to contribute to the work force is a good tool to consider using in the right factual circumstances. Similarly, if TTE work is available within the employee’s restrictions, consider presenting the potential opportunity to the employee’s treating physician. If the physician agrees that the work is within the patient’s restrictions, it adds credibility to the job opportunity and support for why the employee should accept it. Of course, the physician could do the opposite and say the

F-9

employee could not perform that work for whatever reason, so it is important to consider this option only after you have already developed your case in support of the TTE through vocational rehabilitation and/or an independent medical opinion agreeing with the appropriateness of the TTE position.

4. Anticipating the Opposing Arguments

One of the ways to best prepare your case is to anticipate the arguments of the other side, whether the claimant’s counsel or the arbitrator. Aside from the issues raised above, some additional points to consider include the following:

(a) Stabilization of Condition

Section 8(b) of the Act requires TTD benefits to continue until an employee’s condition “stabilizes.” This has been interpreted by Interstate Scaffolding to reject arguments that TTD should be suspended when the employee is no longer available for work, such as when he has legitimately been fired. Current Illinois law requires benefits to continue even in those circumstances, thus, petitioner’s attorneys routinely argue the petitioner’s condition has not “stabilized.” One can clearly argue that “stabilized” does not mean “resolved.” Section 8(b) specifically references TTD, so it is, by definition, addressing benefits for a temporary period of time. A release from a doctor with restrictions, even if those cannot be accommodated by the employer, is a “stable” condition. If there is work that can be offered to accommodate those restrictions, even if through TTE, the argument against ongoing benefits due to a need for a “stabilized” condition can be bolstered. If possible, consider asking for a medical opinion on whether the employee’s condition is stable, even with restrictions. Acknowledging that a temporary release with restrictions does not mean the condition is resolved may result in a physician, preferably the treating physician, noting that the condition has stabilized to the point where the claimant is capable of working in some capacity.

(b) Traveling Employee concerns

The phrase “traveling employee” raises additional hurdles for employers when defending alleged claims in the workers’ compensation field. If an employee that would not have been considered a traveling employee before their alleged injury is now required to travel to/from a third party employer to participate in TTE, Petitioner’s attorneys will likely argue that the employee is now a “traveling employee.” If he is successful, the test regarding compensability now becomes whether or not the action that led to a new injury sustained by the employee was reasonable and foreseeable. Provided agreements are in place to address who would have liability in the event of an injury, it should be argued that the classification of the employee at the time of the injury is not something that can be decided prior to a potential injury. Rather, that is a factual issue for the

F-10

trier of fact to determine at the time of arbitration and should be treated no differently than litigating medical benefits or TTD benefits. Such an argument about the “risk” of the employee becoming a traveling employee is pure speculation and should not be a reason why all TTE positions should be discredited. The argument for a traveling employee classification seems unavoidable. If that occurs, the employer would simply need to evaluate the circumstances and determine whether an alleged injury should be accepted or denied. Part of that consideration means evaluating whether the employee was, in fact, a traveling employee at the time of the injury. The mere fact that the employee is traveling to a different work location while participating in TTE should not automatically make him a traveling employee. For example, if the employee was not a “traveling employee” in his pre-injury employment, and the TTE position requires him to simply drive to a location to start his shift and then drive home, factually, the situations are analogous. In fact, if the TTE position were closer to the employee’s home, one could even argue that it’s a benefit to the employee due to decreased travel time and expenses getting to and from work. While the likelihood of injuries being found compensable seems to increase when one is classified as a traveling employee, an employee does not automatically become a traveling employee upon participation in a TTE program. But even if he did, perhaps that risk of increased compensability for potential injuries is simply a risk an employer will want to consider to gain the advantages associated with utilizing TTE programs.

(c) Interference with Treatment Plans

An employee’s treatment plan often involves prescription medication. Some of those medications may affect an employee’s ability to drive. In cases where the employee is prescribed narcotic medication, employees will argue that should excuse participation in TTE. This is an easy argument to anticipate and address. First of all, if the employee is on narcotic medication, or any medication for that matter, that could potentially impair his ability to drive, his return to work restrictions will likely reflect that. Further, this is simply a situation where an employer/respondent recognizing the limitation and responding reasonably by indicating that such a situation will result in the employee not being scheduled for work at the TTE employer and resuming receipt of TTD benefits will gain some credibility with the arbitrator. Realistically though, injured persons are frequently prescribed medications with such side effects without it limiting their hobbies or activities outside of work. If an employee refuses to participate in TTE claiming that he cannot drive to the jobsite as a result of prescription medication, consider surveillance. That argument will lose credibility if there is evidence that the medication does not prevent him from driving for social reasons.

F-11

(d) Vocational Rehabilitation is Being Inappropriately Used

Using a vocational expert to assist the employee in locating employment is most commonly done upon a release from medical care. Vocational rehabilitation can be expensive and time-consuming. It is often avoided while the employee is still treating since the likelihood of his work capabilities changing and making any potential jobs moot outweighs the benefits for that limited time. Direction regarding vocational rehabilitation can be found Section 7110.10 of the Workers’ Compensation Commission Rules. Section (a) states:

The employer or his representative, in consultation with the injured employee and, if represented, with his or her representative, shall prepare a written assessment of the course of medical care, and, if appropriate, rehabilitation required to return the injured worker to employment when it can be reasonably determined that the injured worker will, as a result of the injury, be unable to resume the regular duties in which engaged at the time of injury, or when the period of total incapacity for work exceeds 120 continuous days, whichever first occurs.

Ill. Admin. Code 50, § 7110.10(a). Opposing counsel will argue that the use of TTE programs, especially if they are set up through a vendor, are really just vocational rehabilitation plans in disguise. Then, the argument will follow that vocational rehabilitation is only contemplated, and therefore appropriate, once the employee reaches a condition of permanent impairment. In other words, petitioner’s attorneys will argue that the petitioner must be at maximum medical improvement (MMI) before vocational rehabilitation is appropriate. Because the employee might still be actively engaged in treatment, vocational rehabilitation is not appropriate, nor is an offer of TTE, which is just akin to vocational rehabilitation efforts. There is no such requirement or even mention of MMI in the section. In fact, the specific wording of this section can be used in support of TTE through vocational rehabilitation. A close reading reveals that § 7110.10(a) simply states that vocational rehabilitation is appropriate when the injured worker will “be unable to resume the regular duties in which engaged at the time of injury.” Id. There is no qualifier that the inability to return to the regular duties be permanent. Even temporary restrictions that cannot be accommodated by the employer would justify the use of a vocational rehabilitation plan.

F-12

IV. CURRENT TRENDS IN TTE

A. Other States

Other states have examined this scenario and at least eight states have already adopted specific TTE or similar programs via statute. Other states permit TTE programs based on their workers’ compensation statute’s current wording, though there may be no clear statutory support for TTE. As mentioned above, at least eight other states have statutory provisions permitting some form of TTE, albeit under differing program names. These states include: Arizona (Ariz. Rev. Stat. Ann., § 23-1048 (1995 & Supp. 2011)); California (Cal. Lab. Code § 139.47 (West 2003 & Cum. Supp. 2010)); Colorado (Colo. Rev. Stat. § 8-42-105 (2011)); Iowa (Iowa Code Ann. § 85.33 (2009)); Maine (Me. Rev. Stat. tit. 39-A, § 214)); Michigan (Mich. Comp. Laws § 418.30)); Montana (Mont. Code Ann. § 39-71-105 (2005)); and Washington (Wash. Rev. Code § 51.32.090 (2010)). Nebraska also encourages the return of the employee to gainful employment. See Neb. Rev. Stat. § 48-162.01(1). In Ohio, temporary total disability benefits owed to an employee may be terminated in the event the employee’s treating physician finds that the employee is capable of returning to his former position of employment or other available suitable employment. Sebring v. Industrial Comm’n, 123 Ohio St. 3d 241, 244-45 (2009). In Sebring, the employee lived and worked in Ohio when he sustained a work related injury. Before completing his treatment, he moved to Wyoming due to his wife’s employment transfer. Sebring, 123 Ohio St. 3d at 241. Upon presenting a release to return to light duty work and requesting TTD benefits from the Ohio employer, the employee was offered two light duty positions. Id. at 241-42. The first position was at the employer’s facility in Ohio, which the employee refused, citing his relocation to Wyoming. Id. at 242. The second was at a Goodwill Store in Wyoming as part of a TTE program, which the employee also refused. The court found the TTE job in Wyoming to be a bona fide job offer and agreed with the employer’s refusal to provide benefits based on the employee’s refusal of both offers. Id. at 244-45. In Gay v. Teleflex Automotive, No. 3:06-CV-7104, 2008 U.S. Dist LEXIS 24907, *1 (N.D. Ohio Mar. 28, 2008), an African-American employee was injured while working and released to return to work with certain restrictions. To accommodate those restrictions, the employer assigned the employee to modified duty off-site work at a local YMCA and advised the employee that his workers’ compensation benefits were contingent on his attendance at the TTE. Gay, 2008 U.S. Dist LEXIS 24907, at *3-4. The employee brought suit in federal court for racial discrimination, arguing that a Caucasian co-worker was accommodated on-site for more than three years while recovering from her work related injury. Id. at *4. In dismissing the employee’s claim, the court noted the TTE program was authorized by company policy, that the employee maintained his employment status within the employer, and that he was covered under the employer’s labor agreement. Id. at *19. The court also pointed out that the employee was paid the same as if he had been working at the employer’s facility, he did not lose any material benefits or standing

F-13

within the employer, and he was not demoted as a result of the assignment. Id. While this analysis was applied specifically in that case to show the employee did not have an adverse employment action sufficient to support a cause of action for discrimination, it does shed some light into some factors that a court may consider when determining whether to find a TTE job to be a bona fide job offer. New Jersey appears to support TTE programs as well. In Martin v. Goodwill Industries of S. N.J., Inc., No. A-6097-06T3, 2008 N.J. Super. Unpub. LEXIS 1617 (N.J. Super. Ct. App. Div. Apr. 10, 2008), the employee was injured while working for his employer. When the employer could not accommodate the light duty restrictions, arrangements were made for the employee to work light duty at a local Goodwill store. In support of that arrangement, the employer pointed out that TTE helped the employee “remain active while out of work and retain a ‘work ethic.’” Martin, 2008 N.J. Super. Unpub. LEXIS 1617, at *2.

B. Decisions Addressing TTE

As much as it seems like a benefit to both parties, at least two Illinois arbitrators have rejected employer sponsored TTE programs. In Kilduff v. Tri-County Coal, LLC, 12 WC 38843 9 (Nov. 14, 2014), the respondent terminated the petitioner’s TTD benefits when he failed to show up for a volunteer job located through a vocational rehabilitation counselor. The petitioner had been released with light duty restrictions that the employer could not accommodate. The employer used a vocational rehabilitation expert to place the petitioner in a job that could accommodate his restrictions. However, the vocational expert recommended only volunteer positions. Kilduff, at 9. Arbitrator Pulia rejected the employer’s argument that it could suspend TTD benefits based on the petitioner’s rejection of a light duty job offer since the offer was “not for light duty work with respondent, but rather for volunteer work to be performed for an entirely different employer, where no employer-employee relationship exists between the employer where petitioner will be working and the petitioner.” Id. at 10. Arbitrator Pulia further stated that “it is the obligation of the respondent during a period of temporary total disability to provide light duty work for petitioner within its own company, where the petitioner remains under the control and supervision of the employer and not under the direction and supervision of an individual at another employer.” Id. Arbitrator Pulia acknowledged that although such an arrangement is neither specifically provided for nor specifically excluded statutorily, it is against public policy due to the possible litigation that could result if the employee is injured while working under the direction and control of a person other than their employer. Id. In Lee v. Fluid Management, Inc., 11 WC 48656 5 (Sept. 6, 2013), Arbitrator Kane relied on the lack of statutory support for TTE as the basis for denying respondent’s request to terminate TTD benefits. In further explaining his denial, Arbitrator Kane adhered to a strict interpretation of the case law regarding an employee’s entitlement to TTD benefits: the employee had not reached maximum medical improvement and the employer could not provide work within his restrictions, so he was entitled to continued TTD benefits. Although apparently irrelevant,

F-14

Arbitrator Kane also pointed out the clear bias in the fact that the vocational expert testifying in support of placing the petitioner in TTE was an employee of the employer’s insurance carrier, as well as the fact that the TTE offer left many unresolved issues such as liability for potential injuries while working at the TTE, reimbursement of mileage to travel to/from TTE, and other issues specific to the arrangement in that case. Lee, at 6. As evidenced by the arbitrators’ decisions in the two cases above, there are a number of arguments against TTE and arbitrators are not yet accepting TTE as valid light duty job offers, which means litigation and litigation costs will increase as attorneys continue to fight this battle. V. JUSTIFICATION OF TTE FOR EMPLOYERS

Beginning in 2007, The Ohio State University undertook an interesting study of the impact of TTE. Saddled with $10 million per year in workers’ compensation costs, OSU decided to change its approach to disability management and decided to move ill and injured workers to less demanding jobs instead of leaving them at home during recovery and convalescence. Encarnacion Pyle, Injured OSU Workers Shift to Light Duty as They Heal, The Columbus Dispatch (Feb. 26, 2008). In just over a year, OSU reassigned some 500 employees to such light-duty jobs, some of which included delivering magazines to patients in the medical center or enforcing the university’s no-smoking policy. During this period, OSU was able to avoid workers’ compensation payments by paying their employees their regular salaries. At the end of the program’s first year, OSU had saved roughly $4 million – about double what it anticipated – which did not even include the projected savings from reductions in workers’ compensation policy premiums due to lower claim payouts. The program also produced a positive effect on the workers, who reported feeling more productive and happier.

F-15

Craig S. Young

- Partner

Craig is past Chair of the firm's workers' compensation practice group. Craig began his career at Heyl Royster as a summer clerk while in law school and became an associate in the firm's Peoria office in 1985. He has spent his entire career with Heyl Royster and became a partner in 1992. He is recognized as a leading workers' compensation defense lawyer in the state of Illinois and has handled all aspects of Illinois workers' compensation litigation including arbitrations, reviews, and appeals. He has developed expertise in the application of workers' compensation to certain industries including hospitals, trucking companies, municipalities, large manufacturers, school districts, and universities. In addition to his expertise in litigated cases, Craig has developed a reputation for counseling employers regarding overall management of the workers' compensation risk. Through seminars and presentations to local and national industry groups, in-house meetings, regular claims review analysis, and day-to-day legal counsel, Craig assists his clients in looking beyond each individual case in an effort to reduce overall workers' compensation expense. His comprehensive approach to workers' compensation issues also includes third-party liability and lien recovery issues. Currently, Craig is the immediate past chair of the workers' compensation committee of the Defense Research Institute. He has also chaired DRI's Program Committee, and in that role, chaired nationally acclaimed teleconferences and seminars on specific issues relating to workers' compensation defense. He has been designated as one of the "Leading Lawyers" in Illinois as a result of a survey of Illinois attorneys conducted by the Chicago Daily Law Bulletin. Craig is actively involved in supporting many local charitable organization and civic causes. He was the 2008 recipient of the Peoria County Bar Association's Distinguished Community Service Award. Publications "Recent Advances of the Traveling Employee

Doctrine," For the Defense (2014)

Public Speaking “Effective Strategies for Defending Traveling

Employee Claims” Heyl Royster 29th Annual Claims Handling Seminar (2014)

“Workers’ Compensation Reform in Illinois” Presented in numerous locations (2012)

“Elements of a Winning Workers’ Compensation Program” Downstate Illinois Occupational Safety & Health Day (2010)

“Family Medical Leave Act (FMLA); Americans with Disabilities Act (ADA); and Workers’ Compensation” Risk Control Workshop (2010)

“Medical Science, Industrial Commission Science - Understanding the Industrial Commission's Approach to Medical Issues” Lorman Education Services (2008)

“The Employee Who Can't Return to Work: Wage Differentials, Vocational Rehabilitation & Job Placement” Lorman Education Services (2008)

“Medicare Set-Aside Agreements-The Rest of the Story” Defense Research Institute (2007)

“Resolving (or Alleviating) the Chronic Pain Case” Heyl, Royster, Voelker & Allen (2007)

“Definition, Statutory Employers, Self-Insureds, Insurance Non-Compliance and the Stop-Work Order: Sections 1, 3 and 4” Heyl, Royster, Voelker & Allen (2006)

“Workers' Compensation and Illegal Aliens” Defense Research Institute (2006)

“The Employee Who Can't Return to Work: Wage Differentials, Vocational Rehabilitation and Job Placement” Lorman Educational Services (2006)

“Medical Science, Industrial Commission Science - Understanding the Industrial Commission's Approach to Medical Issues” Lorman Educational Services (2006)


F-16

Professional Recognition Martindale-Hubbell AV Preeminent Selected as a Leading Lawyer in Illinois. Only five

percent of lawyers in the state are named as Leading Lawyers.

Peoria County Bar Association 2008 Distinguished Community Service Award

Professional Associations American Bar Association Illinois State Bar Association Peoria County Bar Association (Immediate Past

President) Defense Research Institute (Past Chair, National

Workers' Compensation Committee) Court Admissions State Courts of Illinois United States District Court, Central District of

Illinois United States Court of Appeals, Seventh Circuit United States Supreme Court

Education Juris Doctor, University of Illinois, 1985 Bachelor of Arts-History (summa cum laude),

Bradley University, 1982


F-17

Brad A. Elward

- Partner

Brad concentrates his work in appellate practice and has a significant sub-concentration in workers' compensation appeals. He has been with the firm since 1991 and became a partner in 1999. Brad handles all aspects of civil appeals, ranging from preparation of initial appeal documents through the drafting of appellate briefs and oral arguments. Brad handles workers' compensation cases before the Workers' Compensation Commission, the circuit court, the Appellate Court, Workers' Compensation Commission Division, and focuses much of his workers' compensation practice on understanding and handling complex jurisdictional issues, both at the circuit court and appellate court level. Brad's extensive experience in handling judicial reviews of Workers' Compensation Commission decisions has given him statewide recognition. He has also tried several cases, including jury trials. Brad has authored more than 300 appellate briefs and argued more than 200 appellate court cases, resulting in more than 98 published decisions, and numerous unpublished appellate court orders. He has appeared before every Illinois Appellate Court District, the Missouri Appellate Court, the Seventh Circuit Court of Appeals and has significant experience handling interlocutory appeals, in particular those under Supreme Court Rules 306 and 308. He also handles administrative reviews. He has authored several amicus curiae briefs before the Illinois Supreme Court on behalf of the Illinois Association of Defense Trial Counsel. His most recent amici were filed in Fennell v. Illinois Central R.R. Co., 2012 IL 113812, involving interstate forum non conveniens, and Folta v. Ferro Engineering, 2015 IL 118070, involving the workers' compensation exclusive remedy provision and asbestos claims. Brad is a past President of the Illinois Appellate Lawyers Association and past Chair of the Peoria County Bar Association CLE Committee. He has published articles in numerous prominent journals and magazines, including the Illinois Bar Journal, Southern Illinois University Law Journal, Northern Illinois University Law Journal, Illinois Defense Counsel Quarterly, DRI For the Defense, and IICLE.

He is the co-editor-in-chief of the 2015 edition of the IICLE volume on Illinois Appellate Practice: State and Federal, for which he authored or co-authored eight chapters. Brad writes frequently on procedural issues affecting appeals and workers' compensation, has taught courses on workers' compensation law for Illinois Central College, and has lectured on appellate practice before the Illinois State Bar, Peoria County Bar, Illinois Institute for Continuing Legal Education, and Southern Illinois University School of Law. He is the current co-editor of the firm's workers' compensation newsletter, published monthly, and is the 2015-2016 Editor-in-Chief of the Illinois Association of Defense Trial Counsel publication The Quarterly. Brad is also a member of the drone law practice group, which advises clients on issues relating to drone operations, and a member of the military law practice group. Significant Cases Bowman v. Ottney, 2015 IL 119000 - Successfully

defended circuit court ruling to deny the plaintiff's motion for substitution of judge in a refiled case, when same judge had made substantive rulings in prior litigation that had been voluntarily dismissed.

Hartney Fuel Oil Company, et al. v. Hamer, et al., 2013 IL 115130 - Suit was filed by a retail sales taxpayer against our client, The Regional Transportation Authority (RTA), the Illinois Department of Revenue, and a Cook County municipality contending that the assessment of back sales taxes of $20+ million was incorrect. Ultimately, the RTA's position was upheld in the Illinois Supreme Court. While the taxpayer was not required to pay back taxes pursuant to the Taxpayer Bill of Rights, the Illinois Supreme Court invalidated existing regulations in adopting a "multi-factor test" as argued for by the RTA, a decision which had statewide application to sales tax sourcing favoring governmental entities such as our client.

Glass v. DOT Transportation, Inc., 393 Ill. App. 3d 829 (1st Dist. 2009) - In the forum non


F-18

conveniens setting, deference may be given to the selection of forum by a representative plaintiff, who is also a beneficiary under the Wrongful Death Act.

Rosewood Care Center, Inc. v. Caterpillar, Inc., 226 Ill. 2d 559 (2007) - Illinois does not recognize a preexisting debt rule when interpreting the statute of frauds, but rather applies a "main purpose" or "leading object" rule, which states that when the main purpose or leading object of the promisor/surety is to subserve or advance its own pecuniary or business interest, the promise does not fall within the statute of frauds.

Deichmueller Const. Co. v. Industrial Comm’n, 151 Ill. 2d 413 (1992) - Employer's appeal bond must be signed by individual with authority to bind employer to financial obligation represented by bond; attorney cannot sign unless authorized by said individual.

Chaney v. Yetter, 315 Ill. App. 3d 823 (4th Dist. 2000) - Client of borrowing employer was entitled to protection of exclusive remedy provisions of Workers' Compensation Act for claim filed by borrowed employee.

Pearson v. Industrial Comm’n, 318 Ill. App. 3d 932 (3d Dist. 2001) - Outlines steps to establish volunteer fireman status and rejects application of emergency doctrine.

Bush v. Catholic Diocese, 351 Ill. App. 3d 588 (3d Dist. 2004) - A party has no First Amendment right to disseminate information obtained and gathered in preparation for trial.

Craigmiles v. Egan, 248 Ill. App. 3d 911 (4th Dist. 1993) - Appellate court's prior order refusing to grant leave to appeal of order granting new trial did not have preclusive effect on ability to raise issue in subsequent appeal.

Bernardoni v. Industrial Comm’n, 362 Ill. App. 3d 582 (3d Dist. 2005) - Frye standard for evaluating admissibility of expert or scientific evidence applies to workers' compensation proceeding; Illinois does not recognize claims for multiple chemical sensitivity (MCS).

Radosevich v. Industrial Comm’n, 367 Ill. App. 3d 769 (4th Dist. 2006) - Section 19(i) interest runs from date of award; Section 2-1303 interest commences only when circuit court enters judgment on award under Section 19(g).

Publications "Survey of Illinois Law: Workers'



"Interlocutory Appeals of Certified Questions" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education

"Workers' Compensation Appeals" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education

"Motion Practice" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education

"Direct Appeals to the Illinois Supreme Court" chapter in Civil Appeals (Illinois): State and Federal 2015, Illinois Institute for Continuing Legal Education

Professional Recognition Named to the Illinois Super Lawyers list (2008-

2016). The Super Lawyers selection process is based on peer recognition and professional achievement. Only five percent of the lawyers in each state earn this designation.

Selected as a Leading Lawyer in Illinois in the area of Civil Appellate Law. Only five percent of lawyers in the state are named as Leading Lawyers.

Professional Associations Appellate Lawyers Association (President, 2013-

2014; Director 1997-99; Rules Chairman, 1999-2001; Rules Committee, 2005-06; event coordinator; past moot court competition judge)

Illinois State Bar Association (Workers' Compensation Section Council, 1998-2000)

Peoria County Bar Association (Chair, CLE Committee, 2013-2014)

Illinois Association of Defense Trial Counsel (IDC Quarterly Executive Editor)

Court Admissions State Courts of Illinois United States Court of Appeals, Seventh and

Eighth Circuits United States District Court, Central and

Southern Districts of Illinois Education Juris Doctor, Southern Illinois University (magna

cum laude), 1989 Bachelor of Science-Economics, University of

Illinois, 1986


F-19

Jessica M. Bell

- Associate

Jessica focuses her practice on the defense of insurance clients and employers in workers' compensation matters. She joined the firm with extensive workers' compensation defense experience, having appeared before the Illinois Workers' Compensation Commission representing employers and insurance companies across the state. Jessica has also spoken with businesses directly to help assist in their understanding of the Workers' Compensation system, as well as the handling of claims within their business. Jessica is a member of the Workers' Compensation Lawyers' Association, Peoria County Bar Association, and Illinois State Bar Association. She is a past treasurer and vice-president of the Tazewell County Bar Association and former Tazewell County Assistant State's Attorney. As an ASA, Jessica appeared before Judges in the 10th Circuit, handling matters ranging from petty offenses to felonies. Jessica is a 2009 graduate of Saint Louis University School of Law, where she concentrated her studies in employment and labor law, taxation, and business transactions. She is a 2006 graduate of Duquesne University, graduating magna cum laude, with a B.S. in political science, psychology, and sociology. Publications "Temporary Transitional Employment - A New

Trend on the Horizon," Illinois Defense Counsel Quarterly (2015)

"It's No Accident: The Illinois Workers' Compensation Act's Exclusivity Provisions Can Bar Civil Intentional Act Tort Claim Where Workers' Compensation Benefits Are Awarded," Heyl Royster Workers' Compensation E-Clip (2016)

Public Speaking “Illinois Workers’ Compensation – Back to Basics”

Mid-West Truck & Trailer Show, Peoria (2016) Professional Associations Tazewell County Bar Association (Vice President,

2011-2012; Treasurer 2010-2011) Peoria County Bar Association Illinois State Bar Association Workers' Compensation Lawyers Association

Court Admissions State Courts of Illinois

Education Juris Doctor, Saint Louis University School of

Law, 2009 Bachelor of Arts-Psychology, Sociology, and

Political Science (magna cum laude), Duquesne University, 2006


G-1

MEDICARE ADVANTAGE PLANS AND THORNY MEDICARE ISSUES

Presented and Prepared by: Bradford J. Peterson

[email protected] Urbana, Illinois • 217.344.0060



G-2

MEDICARE ADVANTAGE PLANS AND THORNY MEDICARE ISSUES I. INTRODUCTION TO THE MEDICARE SECONDARY PAYER ACT ................................................ G-3 II. THE CASE FOR REQUIRING LIABILITY MEDICARE SET-ASIDE ACCOUNTS............................ G-4 III. THE CASE THAT LIABILITY MEDICARE SET-ASIDES ARE NOT REQUIRED .............................. G-6 IV. MEDICARE’S REFUSAL TO COMPROMISE CONDITIONAL PAYMENTS RUNS CONTRARY TO THE PUBLIC POLICY IN FAVOR OF SETTLEMENTS .......................................... G-7 V. SIXTH CIRCUIT FAILS TO APPLY COMPARATIVE FAULT PRINCIPLES TO CMS’S CONDITIONAL PAYMENTS CLAIM .................................................................................. G-8 VI. COURT ACCEPTS AS REASONABLE PROPOSED MEDICARE SET-ASIDE ALLOCATION

IN LIABILITY SETTLEMENT ........................................................................................................................ G-9 VII. NO ALLOCATION FOR FUTURE MEDICAL EXPENSES NECESSARY UNDER MSPA

WHERE PLAINTIFF COVERED BY GROUP HEALTH INSURANCE .............................................. G-11 VIII. FEDERAL DISTRICT COURT APPROVES MEDICARE SET-ASIDE AND LIABILITY

SETTLEMENT ............................................................................................................................................... G-11 IX. CMS GIVE A PRIORITY RIGHT OF RECOVERY IN UNDER-INSURED MOTORIST CLAIM ................................................................................................ G-12 X. MMSEA SECTION 111 REPORTING .................................................................................................... G-13 XI. PROTECTING MEDICARE ADVANTAGE PLANS REGARDING CONDITIONAL PAYMENT OF MEDICAL EXPENSE ....................................................................................................... G-14 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.

G-3

MEDICARE ADVANTAGE PLANS AND THORNY MEDICARE ISSUES I. INTRODUCTION TO THE MEDICARE SECONDARY PAYER ACT

The intent of the Medicare Secondary Payer Act was to insure that Medicare did not make payments for medical expenses when other insurance was available. In 1980 Congress also passed the Omnibus Reconciliation Act, which expanded Medicare’s Secondary Payer status and right to reimbursement for conditional payments to include liability, auto liability and no fault insurance. Early efforts to apply the Medicare Secondary Payer Act to liability policies were rejected by the courts. See Thompson v. Goetzmann, 337 F.3d 489 (5th Cir. 2003); In re Orthopedic Bone Screw Products Liability Litigation, 202 F.R.D. 154 (E.D. Penn. 2001); Fanning v. United States, 346 F.3d 386 (3d Cir. 2003). In many instances the courts found that liability insurers were not required to “pay promptly” as required under the Act and, therefore, liability insurers were not subject to making reimbursement to Medicare. In 2003, Congress approved the Medicare Modernization Act which deleted the “prompt payment” provision in section (A)(ii) of the Act. Efforts to expand the scope and application of the Act to workers’ compensation claims were undertaken in 2001. Previously, in 1989 the Code of Federal Regulations set forth specific regulations for the use of Medicare Set-Asides in workers’ compensation claims. 42 C.F.R. §411.40-411.47. Over the last ten years the use of Medicare Set-Aside accounts (MSA) for future medical expenses has become common practice in workers’ compensation claims. Pursuant to the Center for Medicare and Medicaid Services policy, the funds set aside in a MSA trust are only to be used by the workers’ compensation claimant for future medical expenses related to the workers’ compensation injury. Once those funds are exhausted, Medicare will then cover injury related expenses. An entire bureaucracy was also created in order to review and approve MSA accounts. Settlement amount thresholds were established in order to reduce the number of MSAs that Medicare would review. Generally, settlements involving current Medicare beneficiaries will be reviewed when the settlement amount exceeds $25,000. Where a claimant is not currently a Medicare beneficiary but has a reasonable expectation of enrollment within 30 months, the Center for Medicare and Medicaid Services (CMS) reviews those settlements where the settlement value exceeds $250,000. The issue of whether liability settlements must also protect Medicare’s interests with regard to future medical expense became a focus of attention when Congress enacted the Medicare and Medicaid SCHIP Extension Act of 2007, 42 U.S.C. 1395y(b)(7)&(8) (2008). The statute created mandatory reporting requirements for claims involving Medicare eligible individuals. Although implementation was delayed for several years, liability insurers are now required to report to CMS those liability settlements involving Medicare eligible individuals. Beginning January 1, 2012, liability insurers were required to report settlements over $100,000. That threshold was

G-4

reduced to $50,000 effective April 1, 2012, and was further reduced to $25,000 as of July 1, 2012. As of October 1, 2012, there is no threshold and, therefore, all liability settlements involving Medicare eligible claimants are to be reported. The relevance of SCHIP to the Medicare Secondary Payer Act is that Medicare will now have a mechanism in place with which to identify all liability settlements involving Medicare eligible individuals. Reporting requirements under SCHIP will specifically allow Medicare to not only identify the liability settlements and settlement amounts, but also the nature of the injury for which compensation has been paid. With this information, Medicare will then be able to determine whether future medical expenses should be satisfied by Medicare or potentially deny future medical expense for the injury that was the subject matter of the liability settlement. The reporting requirements under SCHIP were implemented a year earlier for workers’ compensation claims than liability claims. The Center for Medicare and Medicaid Services is now using the SCHIP data to determine whether a beneficiary is submitting to Medicare medical expenses related to the previous workers’ compensation settlement. Where CMS determines that a medical bill relates to a previous workers’ compensation settlement they are denying coverage for those Medicare expenses. As Medicare continues to collect SCHIP reporting data on liability claims, it is plausible that they will take the same approach with regard to liability settlements. It is foreseeable that Medicare may deny medical treatment in the future for conditions/injuries that were the subject matter of a liability settlement or judgment as was identified and reported under SCHIP. II. THE CASE FOR REQUIRING LIABILITY MEDICARE SET-ASIDE ACCOUNTS

The Medicare Secondary Payer Act does not specifically address future medical expenses in either a workers’ compensation or liability context. Ambiguity with regard to parties’ obligations under the Medicare Secondary Payer Act is clarified when one looks at various pronouncements by Medicare. Although they do not have the force of law, they certainly provide insight as to CMS’s interpretation of the Act. CMS Memoranda make it clear that CMS interprets the Medicare Secondary Payer Act to require parties to a liability settlement to protect Medicare’s interests with respect to future medical expense. Unlike workers’ compensation, CMS has not promulgated regulations specifically raising or identifying any such duty. CMS has, however, promulgated such regulations regarding workers’ compensation claims. 42 C.F.R. 411.40-411.47. Although similar regulations have not been enacted with respect to liability cases, the Medicare Secondary Payer Manual was amended to include a definition for liability Medicare Set-Asides, Medicare Secondary Payer Manual, Chapter 1, § 20. The manual defines Set-Aside arrangements to include “liability and no fault cases.” The manual further provides that there “should be no recovery of benefits paid for services rendered after the date of a liability settlement.” Medicare Secondary Payer Manual, Chapter 7, Contractor MSP Recovery Rules, § 50.5 (2009). Therefore, these provisions can be read to suggest that the Center for Medicare and Medicaid Services believes there is a general obligation to protect Medicare’s interests with regard to future medical expenses and that such protection can be provided through the use of a liability MSA.

G-5

The Center for Medicare and Medicaid Services has made several pronouncements over the years that clearly assert that there is a general duty to protect Medicare’s interests with regard to future medical expenses in liability settlements. In what is commonly referred to as the “Stalcup” Memo, CMS’s position is clearly set forth. Therein, Sally Stalcup, MSP Regional Coordinator, stated:

Medicare’s interests must be protected; however, CMS does not mandate a specific mechanism to protect those interests. The law does not require a “set-aside” in any situation. The law requires that the Medicare Trust Funds be protected from payment for future services whether it is a Workers’ Compensation or liability case. There is no distinction in the law. Set-Aside is our method of choice and the agency feels it provides the best protection for the program and the Medicare beneficiary.

Stalcup Memorandum, May 25, 2011, p. 1. [emphasis added] The Stalcup Memorandum further states:

Anytime a settlement, judgment or award provides funds for future medical services, it can reasonably be expected that those monies are available to pay for future services related to what was claimed and/or released in the settlement, judgment, or award. Thus, Medicare should not be billed for future services until those funds are exhausted by payments to providers for services that would otherwise be covered and reimbursable by Medicare. If the settlement, judgment, award are not funded there is no reasonable expectation that third party funds are available to pay for those services. The fact that a settlement/judgment/award does not specify payment for future medical services does not mean they are not funded. The fact that the agreement designates the entire amount for pain and suffering does not mean that future medicals are not funded. The only situation in which Medicare recognizes allocations of liability payments to nonmedical losses is when payment is based on a court of competent jurisdiction’s order after their review on the merits of the case.

Stalcup, p. 2. More recently, the position of CMS was set forth in a Memorandum authored by Charlotte Benson, Acting Director, Financial Services Group, Office of Financial Management, Center for Medicare and Medicaid Services. The Memorandum purported to provide additional information and guidance with regard to “proposed Liability Medicare Set-Aside Arrangements (LMSA) amounts related to liability insurance . . .” Benson Memorandum, Sept. 11, 2011. The

G-6

Memorandum provides that Medicare will consider its interests protected with regard to future medical expense in liability settlements where the treating physician certifies that treatment has been completed and future medical services for that injury will not be required. Although substantial ambiguity exists under the Medicare Secondary Payer Act with regard to liability insurers obligations to protect Medicare in liability settlements, it cannot be said that CMS’s position is similarly ambiguous. CMS has repeatedly asserted that its interpretation of the Medicare Secondary Payer Act requires that liability insurers protect Medicare’s interests with respect to future medical expense. Furthermore, the Medicare Secondary Payer Manual now defines liability Set-Asides. Until the courts further define the obligations with regard to future medical expense, some degree of deference must be afforded CMS’s interpretation as to the liability insurers obligations. III. THE CASE THAT LIABILITY MEDICARE SET-ASIDES ARE NOT REQUIRED

The Medicare Secondary Payer Act does not specifically impose a duty on liability insurers to protect Medicare with regard to future medical expense. Neither the Act itself nor the Code of Federal Regulations specifically require that parties to a liability settlement address, identify or allocate any settlement proceeds as compensation for future medical expense. The Medicare Secondary Payer Act does provide that Medicare is secondary to other insurance including liability insurance. 42 U.S.C. §1302, 1395 (2000 & Supp. 2004). This statutory provision falls far short of imposing an obligation on liability insurers to act affirmatively to protect Medicare with respect to future medical expenses. Although Medicare is not to make payment “to the extent that payment has been made, or can reasonably be expected to be made,” under a liability policy or plan, this is a statutory obligation as to Medicare’s duty with regard to making payment and not a defined statutory obligation on liability insurers with regard to future medical expense. 42 U.S.C. §1395y(b)(2) Furthermore, Medicare’s interests will be protected with the information to be provided under the Medicare and Medicaid SCHIP Extension Act. CMS will become aware of liability settlements including the terms of those settlements. They will also be aware of the injuries at issue in the underlying liability claim. With that information, Medicare may then deny coverage for future medical care related to that injury. To that end, Medicare’s interests are protected. For this reason, claimants and their attorneys may have a much greater interest in creating a liability MSA then the insurers will. Although SCHIP reporting just began in January 2012, the reporting of workers’ compensation claims began a year earlier. Now that CMS has a database of reported workers’ compensation claims, they have begun denying Medicare coverage for bills submitted related to treatment at issue in the underlying workers’ compensation claim. In some instances, Medicare Set-Aside accounts were established, but claimants failed to pay medical bills out of their Set-Aside account as opposed to submitting them to Medicare. In other instances, Medicare Set-Aside

G-7

accounts were not established and claimants are attempting to secure payment of post-settlement medical treatment by Medicare. As the liability settlement database grows, it is plausible that CMS will take the same approach, that is, to deny post-settlement Medicare coverage for treatment related to the injury at issue in the liability claim. IV. MEDICARE’S REFUSAL TO COMPROMISE CONDITIONAL PAYMENTS RUNS CONTRARY TO THE PUBLIC POLICY IN FAVOR OF SETTLEMENTS

Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010) – A potentially important decision concerning Medicare conditional payments (liens) was handed down on September 29, 2010 by the United States Court of Appeals for the Eleventh Circuit (California). Medicare (CMS) occasionally takes the position that it will not compromise its conditional payments – even if the end result would be Medicare taking all of the settlement (minus attorney’s fees). In Bradley, CMS took just such a position. The court of appeals, however, disagreed and affirmed a substantial reduction in the conditional payments lien. In Bradley, the probate court was asked to apportion the settlement amount between Medicare and non-Medicare beneficiaries. The settlement amount was substantially less than the potential full value of the claim. The probate court effectively reduced the Medicare lien from $38,875.08 to $787.50. Medicare refused to accept the probate court’s ruling. After the estate exhausted administrative remedies, the decision was appealed to the federal district court. The district court reversed, relying, in part, upon arguments by Medicare that pursuant to the Medicare Field Manual, its conditional payment lien was not subject to compromise based on allocation of fault. On appeal, the Eleventh Circuit reversed the district court, noting “[h]istorically, there is a strong public interest in the expeditious resolution of lawsuits through settlement.” Bradley, 621 F.3d at 1339. The court stated:

The Secretary’s position would have a chilling effect on settlement. The Secretary’s position compels plaintiffs to force their tort claims to trial, burdening the court system. It is a financial disincentive to accept otherwise reasonable settlement offers. It would allow tortfeasors to escape responsibility.

Id. The court further found that Medicare’s reliance on its field manual was unpersuasive, pointing out that Medicare policies and manuals are not “law” and would not be given deference under the Chevron Doctrine. Bradley is particularly noteworthy because the Eleventh Circuit stated that Medicare cannot take an unreasonable position with regard to their liens that would thwart the public policy in favor

G-8

of settlements. This case will likely be widely cited in future efforts seeking compromise of Medicare conditional payments. The public policy analysis used by the court in Bradley could also be extended to civil cases where the parties choose to use a Medicare Set-Aside for future medical care. If a defendant wants to use a Medicare Set-Aside to protect itself from further claims by Medicare under the Medicare Secondary Payer Act, this case could provide a basis upon which to formulate a compromise value of the MSA. If, for example, the plaintiff reasonably appears to be 30 percent at-fault and the case is settled for 70 cents on the dollar with an MSA for future medical expense, the MSA could reasonably be reduced by 30 percent under the analysis employed in Bradley. Under that scenario, a good faith hearing should be held requesting the court to enter an order apportioning/compromising the MSA to a reasonable amount given the facts and circumstances of the case. While we are in uncharted territory with regard to use of Medicare Set-Aside accounts in civil cases, the Bradley decision suggests that the judiciary will not hesitate to impose practical solutions to facilitate equitable settlements. In other words, this holding is a very positive development since it may result in more prompt resolution of compromised claims. V. SIXTH CIRCUIT FAILS TO APPLY COMPARATIVE FAULT PRINCIPLES TO CMS’S CONDITIONAL PAYMENTS CLAIM

Hadden v. United States, 661 F.3d 298 (6th Cir. 2011) – In this case the plaintiff, Vernon Hadden, was struck by a utility vehicle belonging to Pennyrile Rural Electric Cooperative that swerved to avoid a vehicle that ran a stop sign. The driver of the vehicle that ran the stop sign was never identified. Hadden brought suit against Pennyrile for bodily injury. Ultimately, Hadden and Pennyrile settled the case for $125,000. Hadden’s counsel asserted that the settlement amount was approximately 10 percent of the total value of the claim and that the missing driver of the vehicle that ran the stop sign was 90 percent negligent. The Center for Medicare and Medicaid Services asserted a conditional payments claim for $62,338.07. Hadden’s counsel sought a compromise and waiver or reduction of the conditional payments amount from CMS. CMS refused to compromise the amount of its claim. Plaintiff’s counsel argued that Hadden’s recovery was reduced under applicable comparative fault principles and that CMS’ claim for conditional payments should be similarly reduced. CMS and the Department of Health and Human Services rejected the request for compromise and waiver. CMS pointed out that recoveries under the Medicare Secondary Payer Act did not account for state tort law. Hadden’s counsel exhausted administrative appeals and ultimately filed suit in the federal district court for the Western Division of Kentucky. The district court rejected Hadden’s arguments and noted that the underlying personal injury claim against Pennyrile Rural Electric had not proceeded to trial and, accordingly, the allocation of fault was purely speculative.

G-9

On appeal the 6th Circuit Court of Appeals affirmed the District Court. The 6th Circuit allowed Medicare to recover 100 percent of its claimed conditional payments demand relying upon what the court deemed to be the “plain language” of the Medicare Secondary Payer Act, 42 U.S.C. 1395y(b)(2)(B)(ii). The Medicare Secondary Payer Act provides in part:

[A] primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this [subchapter] with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service.

42 U.S.C. 1395y(b)(2)(B)(ii) The Hadden court found that a settlement through a primary plan (liability policy) demonstrates “responsibility” under the Medicare Secondary Payer Act thereby entitling Medicare to recover its full conditional payment amount notwithstanding that a settlement is for a compromised or reduced amount. The court concluded that since Hadden received the full amount of his medical expenses from the defendant, he was therefore responsible to reimburse Medicare for the full amount of the conditional payments. The court further rejected Hadden’s argument that the conditional payment amount should be reduced based on equitable allocation principles. Hadden argued that principles of comparative fault resulted in a compromise settlement and those same principles should be equitably applied to the conditional payments amount. Such principles had previously been applied by the U.S. Supreme Court in Arkansas Dept. of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006) in the context of a lien by Medicaid. The Hadden decision will potentially have a chilling effect on settlements. Settlement may be particularly problematic where Medicare pays a substantial sum in medical expense yet the settlement value of the claim is substantially compromised based upon issues of liability and comparative fault. Similar difficulties may be encountered where there are substantial medical bills and a $100,000 liability limit under the liability policy. In such instances, litigants should argue that the principles of Bradley justify a reduction and compromise in the conditional payments amount. The 11th Circuit’s decision in Bradley and the 6th Circuit’s decision in Hadden stand in partial conflict and undoubtedly additional circuits will be weighing in. VI. COURT ACCEPTS AS REASONABLE PROPOSED MEDICARE SET-ASIDE ALLOCATION

IN LIABILITY SETTLEMENT

In Schexnayder v. Scottsdale Ins. Co., No. 6:09-cv-1390, 2011 U.S. Dist. LEXIS 83687 (W.D. La. July 29, 2011), the plaintiff Robert Schexnayder was injured in the course of his employment as a result of an auto accident. His workers’ compensation claim was settled, but no Medicare Set-

G-10

Aside account was established as a part of that settlement. The plaintiff brought suit against the operator of the semi that struck his vehicle as well as the semi driver’s employer. Through mediation, a settlement was reached. A condition of settlement included that a Medicare Set-Aside account would be established to protect Medicare’s interests under the Medicare Secondary Payer Act. It is important to note that the plaintiff was not a Medicare beneficiary nor was there a reasonable expectation of Medicare enrollment within 30 months. As such, the plaintiff would not have been considered a Class 1 or Class 2 beneficiary which would trigger the need for a MSA in the workers’ compensation context. Notwithstanding, the parties allocated a sum of $239,253.84 for future medical expense as a part of the civil settlement. Said funds were to be placed into a Medicare Set-Aside account. A condition of settlement further included that the MSA allocation would be submitted to CMS for approval and settlement was contingent upon such approval. The Center for Medicare and Medicaid Services, however, refused to evaluate the MSA proposal and, hence, did not provide approval. The parties then sought declaratory relief in the federal court. They asked that the Medicare Set-Aside amount be deemed reasonable and a further finding that it protected Medicare’s interests under the Medicare Secondary Payer Act. Neither the Department of Health and Human Services nor CMS appeared before the court. They did, however, submit a handout from the MSP Regional Coordinator for CMS in Region 6 (Stalcup Memo). The U.S. District Court for the Western Division of Louisiana noted that Medicare does not currently require or approve Medicare Set-Asides when personal injury lawsuits are settled. He further pointed out that Medicare does not currently have a policy of procedure in effect for reviewing or providing an opinion regarding the adequacy of the future medical aspect of a liability settlement. The court found that the payment of future medical expense, as an element of settlement, would constitute a receipt of payment from a “primary plan” and therefore the plaintiff would be responsible as a primary payer for future medical items or services which would otherwise be covered by Medicare and related to what was claimed and released in his lawsuit. As such, the court then found that the Medicare Set-Aside allocation was reasonable and adequately protected Medicare’s interests. The court further recognized the strong public policy in favor of settlements citing Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010). What this case does not state is perhaps more important than what is stated in the opinion. The Schexnayder case does not address on the merits the issue of whether the Medicare Secondary Payer Act requires liability insurers to protect Medicare’s interest with regard to future medical expense. That simply was not a litigated issue before the court. Furthermore, the Department of Health and Human Services did not appear and argue that the MSA allocation was insufficient. As such, the court’s decisions were based essentially upon stipulations of the parties.

G-11

VII. NO ALLOCATION FOR FUTURE MEDICAL EXPENSES NECESSARY UNDER MSPA

WHERE PLAINTIFF COVERED BY GROUP HEALTH INSURANCE

Finke v. Hunter’s View, Ltd., No. 07:4267, 2009 U.S. Dist. LEXIS 126830 (D. Minn. Aug. 25, 2009) – The United States District Court for Minnesota was asked to approve a personal injury settlement and specifically address whether the settlement adequately protected Medicare’s interests with regard to future medical expenses. Plaintiff Darius Finke was paralyzed from the chest down after falling from a deer stand manufactured by Hunter’s View and sold at Wal-Mart. The plaintiff brought suit against both Hunter’s View and Wal-Mart. The case was settled for $1.5 million. The district court approved the settlement and did not require any form of allocation of settlement proceeds to cover future medical expenses. The court specifically found that the parties had adequately considered Medicare’s interests, and it was not reasonably foreseeable that Medicare would be responsible for such future expenses. The court reasoned that the plaintiff was covered under group health insurance and that benefits available through the group policy were more than adequate to cover all reasonably anticipated medical expenses for the foreseeable future. The court pointed out that the group policy would continue to be primary to Medicare. The court approved the settlement and did not require any form of Set-Aside. In its order the court provided that: The parties have reasonably and adequately considered the interest of Medicare in this settlement, and Plaintiffs Darius Finke and Shea Finke and Defendants Wal-Mart and Hunter’s View will not be subject to any claim, demand or penalty from Medicare, Medicaid, or any other party, as a result of its settlement payments in this matter. Finke, 2009 U.S. Dist. LEXIS 126830, at *10. VIII. FEDERAL DISTRICT COURT APPROVES MEDICARE SET-ASIDE AND LIABILITY

SETTLEMENT

The question of whether Medicare Set-Aside accounts for future medical expense need to be established in liability cases under the Medicare Secondary Payer Act is subject to debate. A recent Federal District Court Order from the Western District of Louisiana has been frequently cited (and often mis-cited) with regard to this very issue. In Big R Towing, Inc. v. Benoit, No. 10-538, 2011 U.S. Dist. LEXIS 1392 (W.D. La. Jan. 5, 2011), David Benoit was injured while working as the captain of a towboat owned by Big R Towing, Inc. He was paid maintenance and cure benefits pursuant to general maritime law. When a dispute arose as to additional medical treatment, Big R filed a declaratory judgment action as to whether maintenance and cure benefits were owed for the procedure. Benoit filed a counter-claim seeking damages under the Jones Act as well as under general maritime principles. Ultimately, pursuant to a settlement conference with the federal court, a settlement was reached in the amount of $150,000. Consideration for that settlement included Benoit agreeing to be

G-12

responsible to protect Medicare’s interests under the Medicare Secondary Payer Act, 42 U.S.C. § 1395(y). The parties consented to allow a U.S. Magistrate Judge to decide the issue of future medical expenses under the Medicare Secondary Payer Act. The magistrate’s order pointed out that Medicare does not currently have a policy or procedure in effect for reviewing or providing an opinion regarding the adequacy of future medical expenses of liability settlements. After a hearing on the merits, the magistrate ordered that $52,500 be set aside to protect Medicare under the Medicare Secondary Payer Act. The sum reflected the cost associated with a future back surgery and left hip replacement. No consideration was made for the ancillary expenses one would anticipate with such surgical procedures, such as post-operative follow-up and therapy. The court specifically found that the amount was sufficient to protect Medicare’s interests under the Medicare Secondary Payer Act. The court’s order will effectively preclude CMS from later claiming that its interests are not protected. Some vendors of Medicare Set-Aside allocation services are promoting this decision as a federal court ruling ‘recognizing’ the need for a Medicare Set-Aside in liability cases in order to protect Medicare’s interests under the Medicare Secondary Payer Act. Such representations are misleading. First of all, it is unclear whether the U.S. Department of Health & Human Services was provided notice of the settlement terms and provided an opportunity to object. Second, the court simply adopted the terms of settlement proposed by the parties during a settlement conference with the court. Practically speaking, Big R Towing simply represents an example of a liability case in which the parties, by mutual agreement, agreed to use a Medicare Set-Aside and the court acquiesced to their proposed allocation. IX. CMS GIVE A PRIORITY RIGHT OF RECOVERY IN UNDER-INSURED MOTORIST CLAIM

Farmers Ins. Exchange v. Forkey, 764 F. Supp. 2d 1205 (D. Nev. 2010) – The United States District Court for the District of Nevada granted summary judgment in favor of CMS with regard to the government’s claim of entitlement to a portion of underinsured motorist benefits. CMS claimed $10,070.22 of a $35,000 underinsured motorist policy. The policy holder was deceased; however, his spouse claimed entitlement to the underinsured benefits under the Nevada wrongful death statute. She argued that her claim had a value of $500,000 and that Medicare’s claim of $10,070.22 merely represented about two percent of all potential claims and, therefore, should be limited in recovery to approximately $200 (two percent). The court ruled that CMS was entitled to the full $10,070.22. The court held that the government’s direct right of reimbursement from proceeds of the liability insurance payment took precedence over all other claims, including the state law of wrongful death claim. The Farmers Ins. Exchange decision illustrates that a split remains with regard to apportionment of settlement proceeds. The Farmers case appears to be contrary to the Eleventh Circuit Court of Appeals decision in Bradley, in which the court applied principles of apportionment to reduce the CMS claim based upon public policy favoring settlements.

G-13

X. MMSEA SECTION 111 REPORTING

The Medicare/Medicaid and SCHIP Extension Act of 2007 imposed a duty on insurers to report to Medicare payments made to Medicare beneficiaries. Collectively, these are referred to as Non-Group Health Plans (NGHP). Such Non-Group Health Plan insurers are obligated to notify Medicare about “settlements, judgments, awards or other payment from liability insurers (including self insurers), no fault insurers and workers’ compensation” received by or on behalf of Medicare beneficiaries, MMSEA Section 111 Mandatory Insurer Reporting Quick Reference Guide Version 1, January 19, 2012. The reporting requirements became effective May 1, 2009. However, due to software difficulties, reporting of workers’ compensation claims did not commence until 2011 and the reporting of liability settlements began January 1, 2012. When a liability or workers’ compensation case is settled involving a Medicare beneficiary, the insurer is obligated to report that settlement to the Center for Medicare and Medicaid Services (CMS). The insurers are identified as “responsible reporting entities” (RREs) as are self insureds. The RREs are to report information when the insurer assumes an ongoing responsibility for medicals (ORM) or after paying the total payment obligation to the claimant (TPOC) in the form of a settlement, judgment, award or other payment. Simply stated, the trigger for reporting is the issuance of payment to the claimant or satisfaction of medical expense. Numerous data elements must be submitted to CMS as a part of the Section 111 reporting. Data includes, but is not limited to, evidence of insurance coverage, applicable settlements, judgments, awards, or other payments regardless of whether there is an admission or determination of liability. Additional information to be submitted includes the Medicare health insurance claim number or Social Security number, claimant’s name, date of birth, gender, and other information including the International Classification of Diseases, 9th Version (ICD-9) diagnosis codes. As a result of Section 111 reporting, CMS will become aware of workers’ compensation and civil settlements involving Medicare beneficiaries. The purpose is, in part, to identify insurers and self insureds that may have “primary” responsibility for payment under the Medicare Secondary Payer Act. In the field of workers’ compensation, Medicare Set-Asides have been used for several years to provide funds to satisfy future medical expenses that are closed out under a workers’ compensation settlement. Those funds are to be used for future medical expense as opposed to submitting bills to Medicare. Now that CMS is aware of settlement details under Section 111 reporting they have begun denying Medicare coverage to beneficiaries where bills are submitted that relate to the workers’ compensation injury. It is plausible that the Center for Medicare and Medicaid Services may take the same approach with regard to liability settlements and judgments. Whether they will limit such action to cases where there is a specific allocation for future medical expense in the settlement or judgment is to be determined. The insurance

G-14

industry and litigants are watching closely for the next indication from CMS as to how they may respond once provided the Section 111 reporting data. XI. PROTECTING MEDICARE ADVANTAGE PLANS REGARDING CONDITIONAL PAYMENT OF MEDICAL EXPENSE

Part C of the Medicare statute allows for the creation of the Medicare Advantage Program. Medicare Advantage Organizations (MAOs) are private insurers who contract with Medicare to provide coverage to beneficiaries. Those beneficiaries choose to obtain coverage under Part C as opposed to obtaining coverage directly from Medicare under Part A or B. The MAOs are paid a fixed amount from Medicare for each enrollee and then directly administer benefits to the insureds. Since the Medicare Advantage Organizations are private insurers, the question arises as to whether they have the same standing as Medicare with regard to right and obligations under the Medicare Secondary Payer Act. 42 U.S.C. § 1395y(b)(2). Federal regulations indicate that Medicare Advantage organizations have the same rights of recovery under the Medicare Secondary Payer Act as does Medicare (the Center for Medicare and Medicaid Services) 42 C.F.R. 422.108(b). Section 108(b) provides:

(b) Responsibilities of the MA organization. The MA organization must, for each MA plan –

(1) Identify payers that are primary to Medicare under section 1862(b) of the Act and part 411 of this chapter;

(2) Identify the amounts payable by those payers; and

(3) Coordinate its benefits to Medicare enrollees with the benefits of the primary payers, including reporting, on an ongoing basis, information obtained related to requirements in paragraphs (b)(1) and (b)(2) of this section in accordance with CMS instructions.

42 C.F.R. 422.108(a).

In addition, subsection (f) provides in part: The MA organization will exercise the same rights to recover from a

primary plan, entity, or individual that the Secretary exercises under the MSP regulations in subparts B through D of part 411 of this chapter.

42 C.F.R. 422.108(f). Subpart B provides in § 411.24(b) the following:

G-15

(b) Right to initiate recovery. CMS may initiate recovery as soon as it learns that payment has been made or could be made under workers’ compensation, any liability or no fault insurance, or an employer group health plan

42 C.F.R. 411.24(b).

It follows that since Medicare (and Medicare Advantage plans) can recover even after payment has been made by a primary plan (such as a settlement) that the right of recovery exists regardless of notice. It is well settled that Medicare has a “super lien” vesting them with rights to recovery without pre-settlement notice to parties. The foregoing provision suggests that Medicare Advantage plans have the same rights. It therefore follows that steps must be undertaken in settlement of workers’ compensation claims involving Medicare beneficiaries to identify any such claimants who are covered under a Medicare Advantage plan as opposed to traditional Medicare. The primary pitfall that exists arises from the fact that the Medicare conditional payments demand does not include payments from Medicare Advantage insurers. Therefore, it is incumbent upon respondents and their insurers to identify cases involving Medicare Advantage beneficiaries and identify the Medicare Advantage insurer. They should then be contacted with respect to any conditional payments that they may have made for injury related medical expenses. The standing of Medicare Advantage plans to pursue recovery under the Medicare Secondary Payer Act has been litigated in several cases. Early cases suggested that Medicare Advantage plans did not have the same rights of recovery as CMS. More recent cases, however, illustrate a trend toward finding that Medicare Advantage plans have the same rights under the Medicare Secondary Payer Act as CMS. The issue was addressed in In Re Avandia Marketing, 685 F.3d 353 (3d Cir. 2012). In Avandia, the Third Circuit Court of Appeals held that Medicare Advantage plans such as Humana, had an express private cause of action, including the right to double damages against primary payers under the Medicare Secondary Payer Act. Humana, a Medicare Advantage plan, had brought suit against GlaxoSmithKline seeking recovery of medical expenses and double damages based on payments Humana had made to its enrollees for medical expenses associated with the diabetes drug Avandia. The district court originally dismissed Humana’s action; however, the third circuit reversed finding that the Medicare Secondary Payer Act in fact accorded Medicare Advantage plans a private cause of action to recover from primary payers such as GlaxoSmithKline. Humana filed a petition for certiorari before the U.S. Supreme Court which was denied.

G-16

Since the Avandia case was decided, several additional district courts have found that a private cause of action exists under the Medicare Secondary Payer Act in favor of Medicare Advantage Organizations. Such a result was reached in Humana Medical Plan, Inc. v. Western Heritage Ins. Co., 94 F. Supp. 3d 1285 (S.D. Fla. 2015). In its March 2015 decision, the United States District Court for the Southern District of Florida held as a matter of law that Humana, a Medicare Advantage plan, was entitled to maintain a private cause of action for double damages against Western Heritage Insurance pursuant to 42 U.S.C. § 1395y(b)(3)(A). In addition to awarding Humana its conditional payments claim, it further entered judgment for double damages. Mrs. Reale suffered a slip and fall at the Hamptons Condominium Complex and suffered personal injury. The Hamptons’ liability carrier, Western Heritage Insurance Co., entered into a settlement with Reale for the sum of $115,000. In the settlement agreement, Reale asserted that she had no outstanding Medicare liens. In addition, a letter from the Center for Medicare and Medicaid Services (CMS) dated December 2009, confirmed that CMS had no record of processing any Medicare claims on behalf of Reale. Western Heritage learned prior to consummating the settlement that Humana made payments for medical expenses as a Medicare Advantage insurer. Western Heritage therefore attempted to require that Reale accept a draft with Humana also named as payee. The state court judge hearing the personal injury case ordered Hamptons to tender full payment to Mrs. Reale without including any lien holders on the draft. Reale’s counsel was ordered to hold sufficient funds in trust to resolve all medical liens. A dispute existed as to the amount of the Humana conditional payments. When that dispute could not be resolved, Humana filed an action against Western Heritage seeking recovery of conditional payments and double damages under the Medicare Secondary Payer Act. On Motion for Summary Judgment, the court found that the Medicare Secondary Payer Act allowed a private cause of action against Western Heritage Insurance Co. thereby following the holding of the third circuit in Avandia. The court stated “[t]herefore, after Western Heritage became aware of payments Humana advanced on behalf of Mrs. Reale, it had an obligation to independently reimburse Humana.” Humana, 94 F. Supp. 3d at 1293. Because it didn’t, the court ruled as a matter of law, Humana is entitled to maintain a private cause of action for double damages pursuant to 42 U.S.C. § 1395y(b)(3)(A) and is therefore entitled to $38,310.82 in damages. The case is currently on appeal before the Eleventh Circuit and oral arguments and the decision are expected in 2016. A contrary result was reached in Parra v. Pacificare of Arizona, Inc., 715 F.3d 1146 (9th Cir. 2013). In Parra, survivors of a pedestrian fatally injured when struck by a car reached a settlement with the insurer of the motor vehicle (Geico). Ultimately, a wrongful death settlement was reached under the terms of which Geico interpleaded to the court the sum of $136,630.90, which was the amount claimed by the decedent’s Medicare Advantage plan, Pacificare, for medical treatment previous to death. The survivors filed a complaint in district court seeking a declaration that the Pacificare claim did not attach to the wrongful death settlement. Pacificare argued that it had a private cause of action under the Medicare Secondary Payer Act and was therefore entitled to recovery. The Ninth Circuit disagreed, affirming summary judgment and holding that Pacificare,

G-17

as a private Medicare Advantage plan, did not have a private cause of action under the Act. The court held in part that Congress did not intend to create a private means of enforcement when it granted subrogation rights to Medicare Advantage plans. It is therefore important in both workers’ compensation and liability cases to not only identify whether Medicare has made conditional payments, but also whether the claimant has Medicare coverage under a Medicare Part C policy. In such instances, the current case law trend suggests that an independent duty exists to protect the conditional payments made by the Medicare Advantage Organization. Unfortunately, CMS does not coordinate benefits paid by Medicare Advantage Organizations and those payments are not identified or disclosed in a traditional conditional payments search obtained through Medicare.

G-18

Bradford J. Peterson

- Partner

Brad's practice is divided between workers' compensation, civil litigation and Medicare Secondary Payer Act compliance. He is experienced in the defense of construction and motor carrier liability, insurance coverage, workers' compensation, and Medicare Secondary Payer Act compliance. For over a decade Brad has had a special interest in Medicare Set-Aside Trusts and the Medicare Secondary Payer Act. He has written and spoken extensively on these issues. Brad was one of the first attorneys in the State of Illinois to publish an article regarding the application of the Medicare Secondary Payer Act to workers' compensation claims: "Medicare, Workers' Compensation and Set-Aside Trusts," Southern Illinois Law Journal (2002). He has also closely followed developments regarding the need for Medicare Set-Aside accounts in liability cases. In 2010, his article entitled "Medicare's Interests in Future Medical Expense Under Liability Settlements and Judgments" was published in the Illinois Bar Journal (January 2010). Brad is a member of the Champaign County and Illinois State Bar Associations. He is a member of the National Association of Medicare Set-Aside Professionals. He served a number of terms in the Illinois State Bar Association Assembly. Brad has been a member of the ISBA Bench and Bar Section Council and served as its Chair in 2000-2001. Brad served on the ISBA Workers' Compensation Section Council where he served as its Chairman in 2012-2013 and he is a past editor of the Workers' Compensation Section Newsletter. Brad currently serves as the contributing editor of the Workers' Compensation Report for the Illinois Defense Counsel Quarterly. Brad has spent his entire legal career with Heyl Royster beginning in 1987 in the Urbana office. Significant Cases Johnson v. Daimler Chrysler Corporation, Blane

Warren and Aladdin Electric - Obtained favorable settlement (structured settlement with cost in low seven figures) in negligent entrustment and product liability action involving death of an accountant with wife and two children.

Tracy Green v. Freitag-Weinhardt - Obtained favorable settlement of workers' compensation claim and third-party liability claim against petitioner/plaintiff's employer. Plaintiff suffered from fractures to the T11-T12 vertebra with resulting paraplegia. Seven figure settlement reached with primary defendants and third-party liability claim as well as workers' compensation claim resolved through workers' compensation lien waiver and partial satisfaction of future medical expense.

Shuman v. Lauhoff Grain Company - Workers' compensation decision for the respondent in case involving disputed hearing loss claim brought by a 37 year employee. Ruling in favor of respondent based, in part, upon proof that respondent had in place mandatory hearing protection during the entirety of petitioner's career.

West v. Kirkham, 207 Ill. App. 3d 954 (4th Dist. 1991) - Recognized that trial court may find plaintiff contributorily negligent as a matter of law.

Propst v. Weir, 937 F.2d 338 (7th Cir. 1991) - Application of qualified immunity for university officials in First Amendment Retaliatory Transfer claim.

Publications "Protecting Medicare Advantage Plans' Recovery

of Conditional Payment of Medical Expenses," Illinois Defense Counsel Quarterly (2016)

"Circuit Court Lacks Jurisdiction Over Common Law Fraud Claims Where Arbitrator Previously Ruled on Fraud Abuse," Illinois Defense Counsel Quarterly (2015)

"Estate Entitled to Recover Accrued PPD Benefits Regardless of the Existence of Dependents," Illinois Defense Counsel Quarterly (2015)

"Foundation No Longer Required for Medical Opinions Contained in Medical Records," Illinois Defense Counsel Quarterly (2015)

"Appellate Court Further Restricts Employer's Ability to Terminate Temporary Total Disability Where Employee Was Discharged for Cause," Illinois Defense Counsel Quarterly (2015)


G-19

"Workers' Compensation Report: The Illinois Appellate Court Departs from the Increased Risk Doctrine," Illinois Defense Counsel Quarterly (2014)

"CMS Begins to Reform Conditional Payments Process and Proposes Rules for the Re-Review of Rejected Medicare Set-Aside Proposals," Illinois Defense Counsel Quarterly (2014)

"Are All Workplace Stairway Falls Now Compensable in Illinois?" Illinois Defense Counsel Quarterly (2014)

"Illinois Chamber of Commerce Releases Report on Judicial Activism in Workers' Compensation Rulings," Illinois Defense Counsel Quarterly (2014)

"SMART Act Medicare Reforms Become Law," Illinois Defense Counsel Quarterly (2013)

"Are Temporary Partial Disability Benefits Subject to a Maximum Rate?" Illinois Defense Counsel Quarterly (2013)

"Illinois Supreme Court Applies the Mailbox Rule to Circuit Court Reviews," Illinois Defense Counsel Quarterly (2013)

"Calculating the Credit for Prior Amputation Payments," Illinois Defense Counsel Quarterly (2013)

"Employers Not Entitled to TTD Credit in 19(g) Proceedings," Illinois Defense Counsel Quarterly (2012)

"TTD in a Post-Interstate Scaffolding World," Illinois Defense Counsel Quarterly (2012)

"Medicare and Future Medical Expenses: Does the Super Lien Apply?" Illinois Bar Journal (2010)

"Illinois Workers' Compensation and the Medicare Secondary Payer Act," chapter in Illinois Workers' Compensation Law (2009-2010 Edition) West

"Medicare and Medicaid: Workers' Compensation and Medicare Set-Aside Issues," IDC Conference, Medicare and Medicaid: Avoiding Post-Judgment and Post-Settlement Litigation (2009)

Public Speaking “Intersection of Medicare and Tort Law”

“Tort Practitioners’ Topics of Interest” ISBA Seminar (2016)

“Medicare Secondary Payer Act Compliance and Workers’ Compensation” Peoria County Bar Association Workers’ Compensation Seminar (2014)

“Use of AMA Impairment Ratings in Workers’ Compensation Arbitrations” ISBA Workers’ Compensation Section Council Advanced Workers’ Compensation Seminar (2014)

“Medicare Set-Asides/Conditional Payments Pitfalls and Practice Pointers” Heyl Royster 29th Annual Claims Handling Seminar (2014)

“Medicare Set-Asides in Liability Settlements and Medicare Secondary Payer Act Compliance” Stratford Publications, National Webinar (2013)

“Medicare Set-Asides and Personal Injury Litigation” National Business Institute (2012)

“Workers’ Compensation Claims and the Medicare Secondary Payer Act” Stratford Publications National Webinar (2012)

“Medicare Set-Asides and Conditional Payments Update” Heyl Royster 27th Annual Claims Handling Seminar (2012)

“Medicare Set-Aside Trusts” Heyl Royster 26th Annual Claims Handling Seminar (2011)

“Mock Trial Participant” ISBA Workers’ Compensation Section Council (2010)

“What You Need to Know about Medicare Liens, Conditional Payments and Set-Aside Trusts” Heyl Royster 24th Annual Claims Handling Seminar (2009)

Professional Recognition Selected as a Leading Lawyer in Illinois in the

area of Workers' Compensation Defense Law. Only five percent of lawyers in the state are named as Leading Lawyers.

Professional Associations Champaign County Bar Association Illinois State Bar Association Illinois Association of Defense Trial Counsel The National Association of Medicare Set Aside

Professionals Education Juris Doctor, Southern Illinois University, 1987 Bachelor of Science (with honors), Illinois State

University, 1984


Heyl Royster presents its st annual claims handling ...heylroyster.com/_data/files/Seminar 2016/000...

Documents

Transcript of Heyl Royster presents its st annual claims handling ...heylroyster.com/_data/files/Seminar 2016/000...