Review of Illinois Workers Compensation September 2011 Contents

Review of Illinois Workers Compensation September 2011 Contents WORKERS COMPENSATION REFORM BEFORE THE ILLINOIS WORKERS COMPENSATION COMISSION At the Arbitration Level Hirings Downstate Assignments Medical Fees IN THE APPELLATE COURT OF ILLINOIS, NON-WORKERS COMPENSATION DIVISION Court Upholds Employer s Workers Compensation Lien Court Finds That the Employer is Entitled to Receive a Claimant s Entire Settlement in Civil Case Where the Lien Exceeded the Amount of the Settlement Court Reverses Summary Judgment Which Was in Favor of Employer Court Finds Settlement Contract Ambiguous as to Open Medical Provision Rules in Employer s Favor on Lien Recovery Employer is Entitled to Recover Lien Where the Payment Was Made by the Guarantee Fund or the Prior Bankrupt Insurer IN THE APPELLATE COURT OF ILLINOIS, WORKERS COMPENSATION DIVISION Court Rejects Claim Involving Two Separate Falls on a Stairwell at Work Petitioner Failed to Prove Accident Arose Out of Employment Schoolteacher Awarded Extensive Benefits for Minor Injury to Knee Following Non Work-Related Surgery Average Weekly Wage for Schoolteacher Calculated Based Only on 40 Weeks Work Award for Neck and Back Injuries Upheld Claimant Did Not Exceed Her Choice of Two Physicians Even Though She Chose More Than Two Doctors In a Case of Multiple Injuries to Same Body Part, the Commission Properly Awarded Only Wage Differential Benefits and Not Wage Differential Benefits plus Permanent Partial Disability Benefits Court Reverses Commission Court Denies Combined PPD and Wage Differential Award for Two Lower Back Injuries Only Wage Differential Award Allowed Court Reverses Circuit Judge and Reinstates Commission Decision Finding Petitioner Suffered a Compensable Accident When She Fell On a Public Driveway BEFORE THE SUPREME COURT OF ILLINOIS Supreme Court Rules That Hospital Lien Claims Pursuant to the Health Care Services Lien Act Are Not Subject to the Common Fund Doctrine Medical Providers Lien Recovery Not Reduced By Attorney Fees Court Reverses Commission s Decision Court Finds That the Commission Improperly Allowed Petitioner s Attorney to Take a Deposition of the Treating Physician After the Start of Trial GREAT DECISIONS AROUND THE OFFICE CRIMINAL SANCTIONS CONCLUSION PERSONAL Effective September 1, 2011, workers compensation reform in Illinois is now a reality. On June 28, 2011, Governor Quinn signed the legislation passed by the Illinois legislature on May 31, 2011 without any additions or amendments. The immediate effect of the bill means that all sitting arbitrators are currently terminated. The most significant provisions of the new Act will go into effect for accident dates on and after September 1, 2011. Some of the new provisions and amendments apply to existing cases, especially the reduced medical fee schedule. It is time to study the new law carefully and use it to your advantage. The changes are no longer coming, they are here. Co n t a c t In f o r m a t i o n Michael E. Rusin 312.454.5119 merusin@rusinlaw.com 10 S. Riverside Plaza Suite 1530 Chicago, IL 60606 www.rusinlaw.com

REVIEW OF ILLINOIS WORKERS COMPENSATION September 2011 By Michael E. Rusin WORKERS COMPENSATION REFORM We now have workers compensation reform, but the question remains as to how much savings employers will see as a result of the reform. The Governor and Democrats claim employers will save over $500 million. The National Counsel on Compensation Insurance was not that optimistic. The NCCI has completed their evaluation of the Illinois Workers Compensation Reforms. In response, they have projected an 8.8% reduction in total workers compensation loss costs. In a law only (rate filing) submitted to the Illinois Department of Insurance, the NCCI stated the potential cost savings from several key provisions of House Bill 1698 are not measurable. The NCCI did not project any cost savings as a result of the adoption of AMA guidelines or as a result of the changes in the statute relating to the denial of claims for intoxication. Further, they did not predict any savings as a result of the provision allowing employers to establish PPO programs. NCCI predicted a 7.4% reduction in costs as a result of the revised medical fee schedule which reduced medical provider reimbursements by 30%. NCCI predicted a.3% reduction in costs as a result of the new limits on prescription drugs. With respect to cost savings with respect to compensation, NCCI predicted a.8% reduction in costs as a result of the cap on wage loss benefits limiting benefits to age 67. Finally, NCCI predicted a.6% savings as a result of the changes in the statute relating to carpal tunnel syndrome. NCCI warned that claimants might seek and be given additional diagnoses as well as carpal tunnel syndrome in order to avoid the limits imposed by that section of the statute. BEFORE THE ILLINOIS WORKERS COMPENSATION COMMISSION At the Arbitration Level Tension, frustration and uncertainty are all present in all arbitration hearing rooms. Since the statute was signed by the governor and has become law effective July 1, 2011, all of the arbitrators have been terminated. However, none of the arbitrators have actually been forced off the job. Pursuant to the term of the new law, the arbitrators can stay on the job until they are replaced. In response to the new statute, five arbitrators have filed a federal lawsuit in the Central District of Illinois against the Governor and the Commission claiming that the statute is unconstitutional.

The five arbitrators to file the lawsuit are Kathleen Hagan, Joseph Prieto, Richard Peterson, Peter Akemann and Gilberto Galicia. The filing of this lawsuit is not surprising. The legislature was obviously concerned about the actions of some arbitrators but the statutory termination of all of the arbitrators was clearly an overreaction. Nevertheless, I certainly think that the legislature had the authority to take this action. I doubted that this lawsuit would be legally sufficient and successful. Immediately after filing the lawsuit, the arbitrators petitioned for a temporary restraining order barring the Governor from actually terminating any of the arbitrators. Judge Sue Myerscough ruled quickly and thoroughly. In a 28 page decision, she denied the TRO and stated strongly that she did not think the lawsuit had any chance of success. This does not mean that the five arbitrators who filed the lawsuit will be terminated. They may all be reappointed. Some are the subject of investigations they filed one or more workers compensation claims themselves but none was accused of any inappropriate conduct. Two arbitrators were suspended in the winter of 2010 because of inappropriate actions as demonstrated by e-mails in the state s government account. One arbitrator is now gone and will face even more trouble. Arbitrator Jennifer Teague was suspended for a number of different reasons. She resigned in June 2011. She has now been formerly charged with misconduct by the Attorney Registration Disciplinary Commission. The ARDC alleges that she improperly used her position to speed payment of her own workers compensation case. Further, she made improper statements and attempted to hide a hearing from the media in a high profile workers compensation case. She further encouraged lawyers to lie to cover up her actions, and she engaged in improper conversations with attorneys about cases pending before her without the presence of opposing counsel. All of these charges appear to be fully justified and will likely be conclusively proven based on Arbitrator Teague s statements and e-mails downloaded from her state e-mail account. The inappropriate e-mails have also led to charges being filed against two former Hennessy & Roach attorneys. The complaints were filed against Attorneys Elizabeth Barringer and Caryn Nadenbush. The complaints allege that Barringer and Nadenbush chatted via e-mail with Arbitrator Teague about cases pending before her including the settlement amounts and the values of workers compensation cases. The complaints again are supported by a series of e- mails between the attorneys and the arbitrator pulled from Arbitrator Teague s official state e- mail account. Consequently, the complaints are not based on statements made by attorneys or litigants but rather by documented written e-mails. It will be difficult for these attorneys and Arbitrator Teague (who recently changed her name to Carril) to avoid sanction and possibly disbarment. HIRINGS Now that the arbitrators have been terminated when are they going to be hired or fired? In order to decide who to hire, the Governor, as required by statute, appointed a 12 person Workers Compensation Advisory Board to interview all potential arbitrators. Each sitting arbitrator submitted an application and was interviewed. Many other individuals also applied and were - 2 -

interviewed. I was hoping to have the list of new appointments by now but the process is taking longer than anticipated. I do expect an announcement as to the new arbitrators by the end of September, 2011. DOWNSTATE ASSIGNMENTS One of the major changes in the Act from an administrative standpoint is the requirement that each arbitration venue be serviced by three different arbitrators. Further, no arbitrator can serve at a location for more than two years. In order to place this directive into effect, Chairman Weisz has proposed consolidating the downstate calls and pooling them in groups of three. Three arbitrators will be assigned to each zone and will rotate to each of the three hearing venues every three months. This means cases will be continued on 90 day cycles rather than the current 30 days cycles. Further, it means that parties will have to travel to a different venue within a zone if they want to file a Petition for immediate hearing before a particular arbitrator. The proposed pools are as follows: 1. Collinsville, Mt. Vernon, Herrin 2. Quincy, Springfield, Urbana 3. Bloomington, Peoria, Kewanee 4. Ottawa, Joliet, Geneva 5. Rockford, Woodstock, Waukegan 6. Wheaton (to be handled by 3 Chicago arbitrators) The eliminated venues are Decatur, Rock Island, DeKalb, Rock Falls, Galesburg, Mattoon, Kankakee, and Danville. These changes are expected to go into effect January 1, 2012. MEDICAL FEES Effect of 2006 Medical Fee Schedule A new study was issued by the Workers Compensation Research Institute analyzing medical costs in 16 states. The states included Illinois, California, Florida, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas and Wisconsin. Despite the imposition of the 2006 Fee Schedule, Illinois ranked the highest in medical fee costs for workers compensation. In analyzing cases with more than seven days of lost time, the study showed that 2008 and 2009 claims showed costs accelerating more than 10% faster than the 7% growth in the year prior. These costs were not simply the result of higher charges by physicians and hospitals but also a significant function of utilization. Specifically, the study noted that the utilization of physical medicine services were a significant factor in the overall growth of the utilization services growing 12% in 2008 to 2009. - 3 -

For the five year period from 2003-2004 to 2008-2009, physical medicine services grew 35% in Illinois compared to 10% in the median study state. Significantly, the WCRI reported that unlike some states, Illinois does not apply treatment guidelines or limits (on physical therapy, occupational therapy or chiropractic visits or services ). The report also found a 15% increase in facility fees (fees for treatment, operating and recovery room services). The study noted that following the introduction of hospital fee guidelines in 2006, the percentage of hospital payments made within networks dropped from 80% in 2005 to 63% in 2007 before rising to 72% in 2008. Comment: These findings are no surprise at all. The findings show the total ineffectiveness of the 2006 medical fee schedule. They show the total ineffectiveness of current utilization review guidelines. The study shows the gaps present in the current medical fee schedule, particularly the failure of the fee schedule to regulate the costs of ambulatory surgical centers. The 2011 change in the statute will seek to address some of these cost drivers. The new statute should limit payments to ambulatory surgery centers and decrease the fees paid. The overall reduction in the fee schedule by 30% should also drive down costs. However, employers need to use utilization review more and the Commission has to enforce utilization review determinations. We simply see way too much physical therapy and occupational therapy in cases where doctors over prescribe physical therapy and occupational therapy. We frequently see excessive chiropractic care far beyond reasonable recommendations proposed by utilization review guidelines. There are well recognized limits on the medical necessity of these very expensive services and employers must try to regulate them or continue to have spiralling medical costs. IN THE APPELLATE COURT OF ILLINOIS, NON-WORKERS COMPENSATION DIVISION Court Upholds Employer s Workers Compensation Lien Court Finds That the Employer is Entitled to Receive a Claimant s Entire Settlement in Civil Case Where the Lien Exceeded the Amount of the Settlement Loryann Johnson v. Ayalnesh A. Tikuye and Amigo Driving School (Central Management Services Intervenor), No. 1-10-0114, filed April 18, 2011. Petitioner was employed as a driver s license examiner for the Secretary of State s Office. She was injured at work when a car driven by Tikuye, backed up over a curb and hit a light pole. This accident occurred on June 8, 2004 and petitioner claimed neck and back injuries. She treated with a chiropractor primarily along with some other physicians who tend to overtreat claimants. She was off work almost three years. She filed a workers compensation claim and - 4 -

was awarded $75,000.00 in medical bills, $34,000.00 in lost wages and $13,000.00 for permanent disability. The employer s total lien was approximately $123,000.00. In addition, she brought a civil suit against Tikuye and the Amigo Driving School. That case went to binding arbitration. Petitioner sought an award of $250,000.00. However, the civil suit arbitrator thought that petitioner s treatment was excessive and unrelated to her accident. The civil arbitrator awarded only $118,700.00 to petitioner and further reduced that by 20% for comparative fault resulting in a civil judgment of $94,960.00. The employer moved to enforce its workers compensation lien. The employer contended that since its lien exceeded the civil judgment, the employer was entitled to the full amount of the civil judgment, $94,960.00 minus 25% for claimant s attorney s fee. However, petitioner disputed that contention. Petitioner claimed that the employer was not entitled to its full lien because the civil arbitrator had not awarded petitioner the $250,000.00 she requested. The trial judge did not rule on the arguments of the parties, but instead insisted on an evidentiary hearing. Strangely, during the evidentiary hearing, the respondent employer produced evidence that all of petitioner s treatment was casually related to the alleged work injury. Alternatively, petitioner produced evidence that the treatment she received was excessive and unrelated. After the evidentiary hearing, the trial judge denied total lien recovery to the employer and instead awarded 47.5% of the civil recovery to the employer. The total lien recovery was to be only $42,286.88. The employer appealed and the circuit court reversed. The circuit court relied heavily on the Supreme Court Decision of In re Estate of Dierkes, 191 Ill. 2d 326 (2000). The Supreme Court in the Dierkes case established the importance and strength of the employer s lien. Citing to Dierkes, the court held There is nothing in the statute that suggests a limitation on the employee s obligation of reimbursement from the third-party recovery. If an employer has made workers compensation payments, the obligation of reimbursement exists regardless of the amount that the employee recovers. Thus, if the amount of the compensation paid by the employer exceeds the employee s third-party recovery, then the employer is entitled to the entire recovery, less fees and costs. Clearly, it is of the utmost importance that the trial court protect an employer s [workers compensation] lien. The court held that the Secretary of State s lien should have been enforced without reduction, other than for reasonable fees and costs, where petitioner had recovered from the civil defendants. The court held: In order to protect CMS (Secretary of State) and prevent Johnson (petitioner) from receiving double recovery, the trial court should have provided CMS with $94,960.00, the amount Johnson received from the defendants, less the 25% statutory reduction for Johnson s attorney fees and reasonably necessary costs and expenses. - 5 -

The court held that the trial court erred in holding an evidentiary hearing and arbitrarily reducing the employer s lien. The court found that the trial judge s decision to reduce the lien was baseless. Further, the court found that the evidentiary hearing was bizarre and ridiculous. During the workers compensation hearing, petitioner claimed that all of her medical bills were reasonable and necessary. In petitioner s civil binding arbitration hearing, she again claimed that all of her medical bills were reasonable and necessary. However, in the lien adjudication evidentiary hearing, petitioner claimed that all of her medical bills were not reasonable and necessary and that some were excessive or for a personal condition. The court stated petitioner s inconsistent argument was completely disingenuous. Comment: This is an excellent decision from the First District Appellate Court again reenforcing the supremacy of an employer s lien. The Act is drafted and court decisions clearly support the employer s lien without reductions. There was no basis for the trial court to hold an evidentiary hearing in an effort to reduce the employer s lien. This case demonstrates how workers compensation benefits can exceed civil recovery. Employers are frequently required to pay excessive medical benefits that would not meet with the scrutiny that is frequently imposed by civil arbitrators and civil juries. Here, the employer was forced to pay $75,000.00 in medical bills primarily to a chiropractor who treated petitioner over 300 times. Employers should maintain their entitlement to the full lien recovery. Any claimant arguments to deny or reduce our lien recovery should be challenged strenuously. Court Reverses Summary Judgment Which Was in Favor of Employer Court Finds Settlement Contract Ambiguous as to Open Medical Provision. Gunther Gassner v. Raynor Manufacturing Company, 2-10-0180, filed April 27, 2011. This case involves a complicated course of litigation from what appeared to be a simple resolution of an accepted case. On May 30, 2000, petitioner fell down the stairs at work for respondent and injured his back. He was diagnosed with a herniated disc and underwent a discectomy and fusion on February 25, 2002. Following surgery, petitioner developed a deep staph infection at the site of the surgical incision. He was treated with oral and intravenous antibiotics. Petitioner and respondent agreed to a settlement on May 1, 2002. Petitioner received a lump sum payment of $47,500.00. The settlement was a full, final and complete one, except respondent agreed to keep medical open on a limited basis. The settlement contract provided that respondent agrees to pay reasonable and necessary medical expenses for treatment to the low back causally related to the alleged injury of 5/30/00 for a period of one year after the date of approval of this settlement contract, but not thereafter. Several months later, in September of 2002, petitioner began to experience chest pain, shortness of breath and fever. In late October of 2002, petitioner was diagnosed with septic pericarditis. Petitioner underwent multiple surgeries as a result of his infection and incurred medical bills of - 6 -

$190,000.00. Petitioner s attorney arranged for an examination of petitioner with Dr. Jeffrey Coe, an occupational medicine physician. He issued a report stating that petitioner s heart infection was caused by the same bacteria responsible for petitioner s low back infection. Respondent disputed liability for medical treatment for petitioner s heart. Petitioner filed a petition to enforce the contract with the Illinois Workers' Compensation Commission on October 1, 2003. It is not clear what happened for the next four years, but the Commission finally issued an order November 19, 2007 stating that it lacked subject matter jurisdiction to hear the case. The Commission order suggested petitioner pursue relief in the circuit court. Almost a year later, petitioner filed a petition with the trial court pursuant to Section 19(g). Respondent challenged the petition to enforce the contract. Respondent first claimed that the petition was not filed timely. Respondent filed a motion to dismiss claiming the statute of limitations on the settlement contract was five years. Since petitioner did not file a petition to enforce for over five years after May 1, 2003, the action was time-barred. The trial court denied the motion to dismiss ruling that the statute of limitations on a settlement contract was not five years, but instead ten years. The respondent then filed a motion for summary judgment claiming that the settlement contract clearly barred treatment for petitioner s heart. The motion for summary judgment was supported by an affidavit by a claims adjuster for respondent s insurance carrier and respondent s attorney, James O Brien. Attorney O Brien attested that the terms of the settlement contract obligated respondent to pay only for treatment to the low back causally related to the injury of 5/30/00 for a period of one year after the date of approval of the settlement contract, but not thereafter. O Brien stated that based on his experience as a workers compensation attorney he was familiar with the type of medical records submitted by petitioner and based on his review, the unpaid medical treatment bills were not related to petitioner s injury. Both parties submitted arguments on the motion for summary judgment and the trial court granted the motion for summary judgment in favor of respondent. Both parties appealed. The appellate court confirmed the trial court s ruling on the issue of the statute of limitations. The court concluded that a settlement contract has a ten year statute of limitations. The court relied on Givens v. Givens, 192 Ill. App.3d 97 (1989). (However, the result may have been different if the Section 19(g) action were based on a decision of the Commission rather than a settlement contract.) On the issue of the summary judgment, the appellate court reversed. The appellate court found the settlement contract was ambiguous as to the issue presented. Although the trial court had relied only on the affidavit of Attorney O Brien, the court ruled that the trial judge should have considered the opinion of Dr. Jeffrey Coe in analyzing whether to grant the motion for summary judgment. The court strictly construed the settlement contract against respondent. The court stated, when dealing with a settlement contract involving a work injury that would be covered under the Act, a - 7 -

court construes the contract strongly against the drafter, and the risk of ambiguity and lack of clarity is on the drafting party. The court found the phrase treatment to the low back to be ambiguous, especially based on the nature of petitioner s medical problem. The court noted that petitioner s original staph infection arising out of his low back surgery was an accepted condition. Petitioner received treatment for it via intravenous and oral antibiotics. The court noted that this treatment was not directly to petitioner s low back and therefore respondent s argument that it would only pay for treatment to the low back was not convincing. The court held: We read the term treatment to the low back to include treatment for a staph infection manifesting in the low back the open medical provision does not specify the type of low back medical condition (muscular-skeletal injury or infectious illness) and requires only that the low back condition be causally related to the initial injury. The court felt that if in fact petitioner s heart condition was caused by the same infection that arose out of his low back surgery, then petitioner s heart treatment would be covered under the contract. In view of this ambiguity in the contract and factual dispute, the court felt that summary judgment was not appropriate. The court therefore reversed the summary judgment and remanded the case to the trial judge for the introduction of reliable evidence to determine the intent of the parties and the causal relationship between petitioner s heart treatment and his prior low back injury. Comment: The court s ruling as to the statute of limitations is not surprising. I had always felt that a settlement contract would be considered a written contract and the ten year statute of limitations would apply with respect to enforcing a workers compensation settlement contract. On the issue of the terms of the contract, the court imposed an extremely high burden on respondent. As expected, the court construed the contract unfavorably to respondent because respondent s counsel had drafted the contract. It is surprising as to the nature of the evidence respondent presented before the trial judge. Respondent did not support its arguments with any medical evidence, but instead supported its arguments with affidavits from the claim adjuster and respondent s attorney. Further, petitioner did not submit any dispositive medical opinions on the issue of causation. The medical report he submitted from Dr. Coe stated that petitioner s heart condition was caused by the same bacteria that caused his low back infection, but he did not state that it was the same infection or that petitioner was more prone to staph infections because he had a staph infection in his back. Moreover, there is a significant gap from when his back surgery and staph infection in February of 2002 until he developed his heart condition in September and October of 2002. Presumably, respondent could have obtained a medical opinion in its favor on the issue of causation, but apparently chose not to present it in the trial court. The employer s strategy here was unusual and certainly did not result in a favorable ruling. - 8 -

Settlement contracts are important documents. They set in stone the parties agreement. Further, it is clear that to the extent any rights are left open the court will generously grant those rights to the claimant. Therefore, it is critical that settlement contracts be carefully thought out and drafted, especially those involving open medical or Medicare Set-Asides. Settlement contracts are clearly becoming more complex. The parties must pay greater attention to the accuracy and the details of these agreements. Rules in Employer s Favor on Lien Recovery Employer is Entitled to Recover Lien Where the Payment Was Made by the Guarantee Fund or the Prior Bankrupt Insurer. Raul Sanchez v. Rental Service Corporation (Paul s Welding Service, Inc., intervening employer), 1-08-3304, 1-09-0165, 1-09-0188 (First District, Fourth Division) filed March 10, 2011). This case decision involves a matter that had been litigated for many years. Petitioner suffered a work injury in 2001 and he received significant workers compensation benefits. The employer was insured by Legion Insurance. During the claim, Legion Insurance went bankrupt and the Illinois Insurance Guaranty Fund paid the remainder of the claim. At the time the case was over, petitioner had received payments totaling $265,000.00. Legion Insurance paid $145,000.00. The Guaranty Fund paid $120,000.00. Petitioner also had a civil case and he settled the civil case for $300,000.00. The employer sought to enforce its lien of $265,000.00, but the plaintiff refused to honor the lien. Petitioner claimed that he only had to pay to respondent the amount paid by the Guaranty Fund of $120,000.00 but not the amount that petitioner received from Legion Insurance of $145,000.00. The circuit judge agreed and issued an order on October 29, 2008 granting a lien recovery of $120,000.00. The employer appealed and the appellate court reversed. The appellate court again reiterated the importance of an employer s lien rights and recovery. The court found that the provisions of the Act setting forth the employer s lien rights effectuates important purposes of the Act which include providing for compensation to the injured employee regardless of fault; protecting the employer by allowing the employer and employee to reach the true tortfeasor; and prohibiting the employee from obtaining a double recovery. The court found that granting the employer the entire lien was a fair decision. The court stated, Our ruling makes Sanchez whole and prevents him from recovering a windfall, replenishes the (Guaranty) Fund, effectuates the purposes of the Act and the Fund, and is thus good public policy. Comment: It is hard to understand why the circuit judge allowed lien recovery for the Fund but not for Legion Insurance. Obviously, denying the lien to Legion Insurance gave petitioner an unfair double recovery. It is difficult to understand why so many trial judges believe they have the ability to diminish an employer s lien rights. Employers are required to pay compensation regardless of fault promptly. Similarly, they should be entitled to recover their lien without constant attacks and challenges. Employers should continue to fight any adverse circuit court - 9 -

decisions as to lien right since it is clear that both the appellate court and Supreme Court strongly support employer s right when it comes to lien recovery. IN THE APPELLATE COURT OF ILLINOIS, WORKERS COMPENSATION DIVISION Court Rejects Claim Involving Two Separate Falls on a Stairwell at Work Petitioner Failed to Prove Accident Arose Out of Employment. Cathy Baldwin v. Illinois Workers Compensation Commission and Securitas Security Services, No. 4-10-0375WC, filed April 28, 2011. Petitioner claimed two different accidents on October 8, 2006 and November 19, 2006 while working as a security guard for Securitas Security Services. Petitioner testified that she worked as an inside guard which consisted of walking throughout a building and walking around the outside perimeter. She testified she descended a metal staircase on October 8, 2006 and slipped and fell. She testified she didn t know what caused her foot to slip. She admitted seeing no defect on the step or any liquid substance. She testified that she was wearing shoes with rubber soles and she was not in a hurry and her hands were free. Following her fall, she sought treatment the same day and was diagnosed with contusions and strains. She improved with conservative treatment and returned to work November 16, 2006. On November 19, 2006, petitioner testified that she was walking up a flight of stairs and her injured leg began to cramp and throb. She claimed her leg gave out and she fell. She was seen again at Provena Hospital and diagnosed with a pelvic fracture. Respondent retained Dr. Dirk Nelson to review petitioner s medical records and he concluded that her initial injury did not cause her leg to give way on November 19, 2006. At the request of petitioner s attorney, petitioner was examined by Dr. David Fletcher. He concluded that petitioner s injury from her first fall contributed to her second fall. The arbitrator ruled that petitioner failed to prove that she sustained accidental injuries arising out of and in the course of her employment. Petitioner appealed to the Commission and the Commission affirmed. Petitioner appealed to the circuit court and the circuit court affirmed. Petitioner appealed to the appellate court and the appellate court also affirmed the decision of the Commission. The court ruled that the claimant bears the burden of proving by a preponderance of the evidence that her injury arose out of and in the course of her employment. The court stated, Both elements must be present in order to justify compensation. The court noted that risks to employees fall in three groups: 1) risks distinctly associated with the employment; 2) risks personal to the employee, such as idiopathic falls; and 3) neutral risks that have no particular employment or personal characteristics. The court found that petitioner s initial fall on October 8, 2006 was not idiopathic. Further, there was no evidence which showed that the risk was distinctly associated with the employment. - 10 -

Therefore, this was an unexplained fall. The court stated, For an injury caused by an unexplained fall to arise out of the employment, a claimant must present evidence which supports a reasonable inference that the fall stemmed from a risk related to the employment. However, an injury resulting from a neutral risk to which the general public is equally exposed does not arise out of the employment. By itself, the act of walking up a staircase does not expose an employee to a risk greater than that faced by the general public. Since petitioner in this case didn t prove that there was any specific cause for her fall, she was not at any risk greater than that of the general public and the court denied compensability. As to petitioner s second case, the court ruled petitioner s fall was idiopathic. Petitioner s fall was the result of the personal condition rather than a work-related condition. Comment: This is an excellent decision from the appellate court. The summary of the case law from the court is very helpful to employers. The case decision reinforces a developing trend. There are older case decisions which indicate that falls involving neutral risks are compensable. This decision reinforces the fact that falls from neutral risks are not compensable unless claimant proves that the work duties increased the risk of injury from the neutral risk. The court reinforces the fact that the risk of traveling up and down staircases is common to the general public and is not unique to employment. Therefore, any fall on stairs should be carefully investigated and questioned. Schoolteacher Awarded Extensive Benefits for Minor Injury to Knee Following Non Work- Related Surgery Average Weekly Wage for Schoolteacher Calculated Based Only on 40 Weeks Work Elgin Board of Education School District U-46 v. Illinois Workers Compensation Commission and Linda Weiler, No. 1-09-3446WC, filed April 25, 2011. Petitioner was an older schoolteacher. In 1996, she suffered a stroke and started taking Coumadin, a blood-thinning agent. On November 7, 2002, petitioner had an arthroscopic surgery on her right knee which was unrelated to her work duties. To improve blood clotting post surgery, her surgeon Dr. Rosseau instructed her to stop taking Coumadin five days to surgery. However, unbeknownst to Dr. Rosseau, petitioner s family doctor had prescribed Lovenox, another blood thinner, which petitioner took a few days prior to surgery. Further, a day or two following surgery, petitioner resumed taking Coumadin. Petitioner returned to full duty work November 12, 2002. She claimed she didn t have any swelling in her knee. On November 13, 2002, petitioner struck her right knee against a metal desk as she arose from her seat to assist a student. Following that incident, petitioner s surgical incisions on her knee opened and she began to bleed. Her knee began to swell. Petitioner saw Dr. Rosseau November 15, 2002 and he diagnosed hemarthrosis which he defined as blood in a joint creating some inflammation. Thereafter, petitioner was disabled for several months and was treated by Dr. Rosseau with aspiration, pain medication and prescription for rest and therapy. Petitioner - 11 -

eventually was released to return to work March 31, 2003, approximately four months later. She subsequently retired in June 2003. Respondent disputed causal connection. The respondent claimed that petitioner s condition was a personal one and not caused by a work-related injury. Respondent produced an IME report from Dr. Player, an orthopedic surgeon, concluding that petitioner s condition was a personal one. Dr. Rosseau admitted that petitioner s condition could have been personal but stated that in his opinion petitioner striking her knee on the desk was the most likely cause of the condition. The court affirmed a finding of causation relying on the opinion of Dr. Rosseau. The court noted, We also emphasize that the claimant needed only to prove that the accident at work was a causative factor in her condition of ill being. Sisbro, Inc. v. Industrial Comm n, 207 Ill.2d 193 (2003). Additionally, there was a dispute as to petitioner s wage calculation. Petitioner earned $61,459.00 annually. She could have elected to be paid year round or only during the school year. Petitioner elected to be paid year round. However, the evidence showed that she only had to work 40 weeks a year as a schoolteacher. Respondent contended that her average weekly wage was based on a full year s salary. Petitioner contended that it should be based only on the number of weeks she was required to work (40). The court ruled in petitioner s favor and calculated her average weekly wage based only on the number of weeks she was required to work rather than her actual earnings over the 52 weeks. Comment: This decision highlights the unfairness of the standard of causation applied to Illinois Workers Compensation Commission cases. This claimant suffered from a personal condition. She had a stroke and had to take a blood thinning agent. She then had personal non work-related knee surgery. Following that surgery, well before her wounds would have even healed, she returned to work. She suffered a minor injury at work when she stuck her knee in a desk and then was disabled for months. Her treating doctor tied her injury and disability to the minor contusion at work and the employer was then forced to pay compensation and medical bills for months. Despite the fact that this was clearly a personal condition, the Commission and courts confirmed an award of benefits on the basis that petitioner only needed to prove that her accident was a cause of her condition of ill being. This decision highlights the fact that employers pay frequently for personal conditions because of the extraordinarily low standard of causation applied by the Commission in awarding benefits. The court s ruling on the wage calculation is not surprising. It is consistent with prior court decisions involving school teachers. Petitioner could have received her pay over the school year or she could have received it over the calendar year. However, she only had to work 40 weeks a year and therefore the court concluded that her average weekly wage should only be based on the number of weeks she was required to work rather than her total earnings for the year. Award for Neck and Back Injuries Upheld Claimant Did Not Exceed Her Choice of Two Physicians Even Though She Chose More Than Two Doctors - 12 -

Absolute Cleaning/SVMBL v. Illinois Workers Compensation Commission and Suanne Palazzolo, No. 4-10-0313WC, filed April 28, 2011. Petitioner worked for a cleaning company at a mine. She injured her neck and back on two separate occasions, May 9, 2006 and November 6, 2006, while lifting a mop bucket and lifting trash bags. Following the accidents, she sought treatment with a chiropractor, Dr. Calloway. After treating with a chiropractor without improvement, she asked her chiropractor to refer her to a specialist, Dr. Ronald Hertel. Dr. Calloway gave petitioner a referral to Dr. Hertel. Petitioner treated with Dr. Hertel for awhile but Dr. Hertel felt that petitioner was exaggerating her symptoms. She got into an argument with Dr. Hertel and he refused to see her anymore. Additionally, petitioner sought treatment with her family doctor, Dr. Chris Sprinkel. Dr. Sprinkel provided pain medication. Petitioner needed to see another specialist and Dr. Calloway recommended Dr. Freytag but petitioner wanted to see Dr. Pencek instead. Petitioner admitted that she chose to see Dr. Pencek and then Dr. Calloway gave her a referral to Dr. Pencek. Petitioner treated with Dr. Pencek conservatively. In addition, she saw an anesthesiologist upon referral for injections. Eventually, Dr. Pencek recommended a cervical fusion. An IME doctor disputed the need for surgery. After a trial, the Commission awarded petitioner TTD benefits to date plus ordered the employer pay for a cervical fusion as recommended by Dr. Pencek. The employer appealed on the basis that petitioner had exceeded her choice of doctors. The employer noted that petitioner chose treatment with Dr. Calloway and Dr. Sprinkel. Further, the respondent claimed that petitioner had chosen on her own to treat with Dr. Hertel and Dr. Pencek. The appellate court rejected this argument concluding that petitioner did not exceed her choice of doctors. The appellate court ruled that the Commission was correct in finding that the specialists were referrals from Dr. Calloway even though petitioner asked Dr. Calloway for the referrals. The court held, To the extent that Dr. Calloway referred the claimant to certain physicians at the plaintiff s (or her attorney s) urging, we note that the genesis of the referral has no bearing on the issue so long as the claimant s treating doctor ultimately made the referral. See Elmhurst- Chicago Stone Co., 269 Ill.App.3d at 907. The court rejected the respondent s argument that the referral was simply a sham to avoid the two-physician rule. The court rejected this argument. The award of TTD and the award of prospective medical was confirmed. Comment: This is a disappointing decision. A claimant is entitled to choose two different doctors and treat with those two separate and distinct doctors along with their referrals. However, a claimant shouldn t be allowed to choose more than two doctors and simply demand that one of the treating doctors issue her a referral note. To simply allow the claimant to choose more than two doctors further aggravates an already overly generous system. In this case, one of - 13 -

petitioner s specialists, Dr. Hertel, found that petitioner was exaggerating her symptoms. He didn t feel petitioner needed significant further treatment and certainly not surgery. Petitioner then doctor shopped until she eventually found a physician who would recommend surgery for her. These were not in fact true referrals from her physicians but simply her own choice. This is an extremely frustrating decision for the employer who now faces paying for what is likely an unnecessary surgery and continued TTD benefits. In a Case of Multiple Injuries to Same Body Part, the Commission Properly Awarded Only Wage Differential Benefits and Not Wage Differential Benefits plus Permanent Partial Disability Benefits Robert Baumgardner v. Illinois Workers Compensation Commission and County of Cook, No. 1-10-0727WC, filed April 11, 2011. Petitioner was employed by Cook County as a laborer in 1994. On April 8, 1996, he injured his right knee while pulling on branches. He was diagnosed with a torn lateral meniscus and underwent a lateral meniscectomy. He was off work for approximately six months and returned to his regular work duties without loss of pay. Petitioner suffered a second injury to his right knee on May 4, 1998. He slipped and twisted while cutting down a bush. He was off work about seven weeks and received conservative treatment. He suffered a third injury August 7, 1998 when he fell and hurt his right foot. He received conservative treatment and was off work for approximately six weeks. He returned to work with restrictions. He continued to treat with his orthopedic surgeon, Dr. Canaday. Dr. Canaday imposed permanent work restrictions. On December 20, 1998, petitioner was reassigned to light duty work as an engineer technician because of his work restrictions. His pay was decreased. The respondent voluntarily paid him wage differential benefits starting December 20, 1998. Petitioner continued to have right knee problems and eventually had a total right knee replacement July 29, 2002. Thereafter, he returned to work at his continued light duty job. All three of petitioner s cases were consolidated and tried before the arbitrator. Petitioner asked for an award of permanent partial disability for his first case of 35% loss of use of the leg. Additionally, he asked for an award of wage differential benefits for his last two accidents. The arbitrator denied the PPD award but did award wage differential benefits. Petitioner appealed and the Commission, circuit court and appellate court all affirmed the arbitrator s decision denying PPD benefits. The court found that petitioner suffered an injury to only one body part and wasn t entitled to both a PPD award and a wage differential award. The court stated, The Act clearly contemplates a single determination as to the permanency of a claimant s condition as a result of an employment accident. Section 8(d)(1) of the Act provides that the Commission may award a claimant wage differential benefits except in cases compensated under the specific schedule set forth in paragraph (e) of this section. - 14 -

The court rejected claimant s argument that he would have been entitled to a PPD award for the April 1996 injury if he had a hearing on that case before the 1998 injury. The court admitted that even if that argument was correct, that fact did not require the granting of a scheduled PPD award in this case. The court held, Because the claimant suffered multiple injuries to the same body part as a result of successive accidents and those claims were tried together, the Commission properly evaluated the totality of the evidence as it related to the claimant s overall condition of ill-being at the time of the hearing and entered a single award that encompassed the full extent of the disability resulting from both the April 1996 and May 1998 injuries. Comment: The court s decision in this case is totally sensible and well-justified. Here, the claimant was being exceptionally greedy. He was awarded wage differential benefits as a result of his job change and reduced wages. Those wage differential benefits will be paid to the claimant for life. In addition, the claimant was seeking a permanent partial disability award for the same body part that led to the award of wage differential benefits. Clearly, a claimant should not be allowed to double-dip and get both wage differential benefits and permanent partial disability benefits as well. The right to these permanency benefits is not based on common law but based on the statute alone. The statute clearly provides that if a claimant gets an award for permanent partial disability, he should not get an award for wage differential. Similarly, if he gets an award for wage differential, he should not get a permanent partial disability award as well. Court Reverses Commission Court Denies Combined PPD and Wage Differential Award for Two Lower Back Injuries Only Wage Differential Award Allowed City of Chicago v. Illinois Workers Compensation Commission and Thomas O Rourke, No. 1-09-2320WC, filed April 11, 2011. Petitioner worked as a laborer in the sewer department for the City of Chicago. He suffered two injuries to his lower back. The first injury was August 27, 2002 when he was pushing a wheelbarrow. Following that accident, he was diagnosed with herniated discs. He had two surgeries on his lower back and was off work for almost a year through July 10, 2003. After returning to work, petitioner reported his back was mostly pain free but he had pain and muscle spasms in his legs. Petitioner suffered a second accident May 5, 2004 when a trench partially collapsed on him. Several weeks later, he sought treatment for lower back pain. He underwent conservative care for approximately six months and eventually had an FCE which showed he could perform medium physical demand level work. He couldn t return to his prior job and instead was returned to work May 2, 2005 as a night watchman. As a laborer, petitioner would have earned $29.00 to $31.00 per hour. After petitioner returned to work, the employer voluntarily paid wage differential benefits. At trial, petitioner sought an award for permanent partial disability for his first accident and wage differential for his second accident. The arbitrator awarded petitioner 20% loss of use of the man as a whole for the first accident and wage differential benefits for the second accident. The - 15 -

employer appealed to the Commission which confirmed the arbitrator s award. The employer sought an appeal to the circuit court who again confirmed the decision of the arbitrator. The employer appealed to the appellate court and the appellate court reversed. The appellate court ruled that a claimant was not entitled to both permanent partial disability and wage differential benefits for consecutive lower back injuries. The court admitted that this was a case of first impression. No prior Illinois decision had directly addressed this issue. After reviewing similar case law, the court held, We find that the claimant is not entitled to an award under both Section 8(d)(1) and Section 8(d)(2) for the same condition of ill being. Where a claimant has sustained two separate distinct injuries to the same body part and the claims were consolidated for hearing and decision, unless there is some evidence presented at the consolidated hearing that would permit the Commission to delineate and apportion the nature and extent of permanency attributable to each accident, it is proper for the Commission to consider all the evidence presented to determine the nature and extent of the claimant s permanent disability as of the date of the hearing. The court found that the evidence presented at the hearing didn t permit delineation of a separate condition of ill being attributable to each accident. Instead, the evidence established only one condition of ill being which can be compensated either as a person as a whole or as a wage differential. Therefore, the court vacated the PPD award of 20% lose of use of the man as a whole and allowed the wage differential award to stand. Comment: This is an excellent decision from the court. The Commission has been too willing to stack one award on top of another. It has been frustrating for employers in that the Act does not contain a credit provision for past man as a whole awards. The Commission routinely awards multiple man as a whole awards in favor of claimants for basically the same disability. A claimant can sustain multiple back strains and receive multiple man as a whole awards. If a claimant suffers a back injury resulting in a disc herniation which is not operated, he can get an award in the range of 10% to 15% of the man as a whole. If he then claims a new accident and has surgery on that same disc herniation, he can get an additional award of 20% loss of use of the man as a whole. This decision does not change that result. However, at least this decision disallows an award of PPD followed by a wage differential award for consolidated cases. Frequently, attorneys will press a case for a disposition in order to get an award before the claimant suffers a new injury. The smart attorneys know that it s good to get an award or a settlement promptly so that if the claimant sustains a new accident which results in a wage differential or a permanent total award, the claimant will get his PPD money early and in addition get any subsequent award. Employers and Carriers like to close out cases. However, sometimes it can be costly to rush into a settlement with a claimant who is still working for the employer only to have the claimant sustain yet another injury and get even more PPD. Court Reverses Circuit Judge and Reinstates Commission Decision Finding Petitioner Suffered a Compensable Accident When She Fell On a Public Driveway Metropolitan Water Reclamation District of Greater Chicago v. Illinois Workers Compensation Commission and Ruth Lindquist, No. 1-09-2546WC, filed February 22, 2011. - 16 -

Petitioner s job duties were primarily clerical in nature and she worked in an office building in downtown Chicago. In addition to her work in the office, she would take checks received and walk them to a bank to make deposits. The bank she went to was a block and a half away on Michigan Avenue. She routinely made the trip to the bank two to three times per week. On November 9, 2005, petitioner left her office to walk to the bank. While walking to the bank, she crossed an inclined driveway that had a dip of about six inches. She tripped or lost her footing on the dip in the driveway and fell forward fracturing both wrists. She admitted that she did not fall as the result of any debris or defect in the pavement. The employer disputed the case on the basis that petitioner s accident did not arise out of her employment. The employer contended that petitioner was at no increased risk compared to the general public of walking on a public street. The case was tried before an arbitrator who agreed with the employer and found that petitioner did not suffer an accident which arose out of her employment. Petitioner appealed to the Commission and the Commission in a 2-1 decision granted her benefits. The Commission found that petitioner was at a greater risk of the dip in the driveway because she regularly had to walk to the bank. Petitioner was awarded four months of TTD and 35% loss of use of each hand. The employer appealed to the circuit court and the circuit court reversed reinstating the arbitrator s denial of compensation. Petitioner appealed to the appellate court and the appellate court reversed and reinstated the Commission s decision. The court analyzed the arising out of component of compensability. The court noted that there were three general types of risks to which an employee may be exposed: (1) risks that are distinctly associated with the employment; (2) risks that are personal to the employee; and (3) neutral risks that do not have any particular employment or personal characteristics. In this case, petitioner s risk was not distinctly associated with the employment nor was it personal to petitioner. Therefore, the court held, The risk that the claimant would be injured as the result of a fall while traversing a public sidewalk and commercial driveway was neutral in nature. The court held injuries resulting from a neutral risk generally do not arise out of the employment and are compensable under the Act only where the employee was exposed to the risk to a greater degree than the general public. The court further held, Under the street risk doctrine where the evidence establishes that the claimant s job required that she be on the street to perform the duties of her employment, the risks of the street become one of the risks of the employment and an injury sustained while performing that duty has a causal relationship to her employment. Based on this doctrine the court found the case compensable. Comment: The appellate court s decision based on the facts presented is not unexpected. In a concurring decision, Justice Holdridge points out that the court s street risk doctrine espoused by the majority is simply the traveling employee doctrine. It is surprising that the Commission didn t award benefits simply on the basis that the claimant was a traveling employee. As a general rule, traveling employees are entitled to compensation for any accidents sustained while traveling so long as their actions are reasonable and foreseeable. There is no argument here that - 17 -

the claimant s actions were not reasonable and foreseeable. Therefore, it is no surprise that this case was ruled compensable. Admittedly, it does not appear that petitioner s accident was the result of any peculiar risk associated with her employment. Walking on public streets which are not defective shouldn t be found to be an increased risk of the employment. Nevertheless, under the traveling employee doctrine or the street risk doctrine, it is clear that the court will find such cases compensable. BEFORE THE SUPREME COURT OF ILLINOIS Supreme Court Rules That Hospital Lien Claims Pursuant to the Health Care Services Lien Act Are Not Subject to the Common Fund Doctrine Medical Providers Lien Recovery Not Reduced By Attorney Fees Sherry Wendling v. Southern Illinois Hospital Services Nancy Howell v. Southern Illinois Hospital Services, Docket Nos. 110199, 110200, filed March 24, 2011. The above plaintiffs were injured in automobile accidents and subsequently filed personal injury lawsuits against the adverse drivers responsible for their injuries. As a result of the accidents, plaintiffs treated at hospitals owned by Southern Illinois Hospital Services. The hospitals asserted liens pursuant to the Health Care Services Lien Act. The Health Care Services Lien Act provides the a health care professional or provider who renders treatment to an injured plaintiff shall have a lien upon all claims and causes of action of the injured person for the amount of the health care professionals or health care providers reasonable charges. Significantly, the statute limits the total amount of all health care liens filed with respect to an individual plaintiff to no more than 40% of the judgment or settlement. However, to the extent that a health care provider does not make full recovery, the health care provider is entitled to seek payment of the remainder of the their charges from the patient. The statute further provides that where the total liens filed under the Act amount to 40% of the judgment of settlement, the total attorney liens are limited to 30% of the judgment or settlement. The statute is silent as to whether a health care provider holding a lien under the Act is responsible for attorney s fees pursuant to the common fund doctrine. In these cases, plaintiffs reached settlement agreements with the defendants who filed petitions to adjudicate the hospital s lien. Plaintiffs allege that the hospital s lien was subject to the common fund doctrine and that the hospitals had to pay one-third of their line to plaintiff s attorneys. The trial judge agreed. The trial judge granted the hospital s lien but then reduced the lien by onethird with that money to go to the plaintiff s attorney. The hospital appealed to the appellate court and the appellate court affirmed. The hospital appealed to the Supreme Court and the Supreme Court reversed. The Supreme Court held that the common fund doctrine does not apply to a medical provider s lien under the Health Care Services Lien Act. - 18 -

The court referenced its prior decision in Maynard v. Parker, 75 Ill. 2d 73 (1979). The court had specifically ruled in Maynard that the common fund doctrine did not apply to a hospital holding a statutory lien. The court noted that unlike other lien claims, a medical provider s lien is limited by statute to a certain percentage of the plaintiff s recovery. The court held: Under those circumstances, the hospital was not unjustly enriched by the attorney s services and, thus, was not required to contribute to the cost of litigation. The court noted that its ruling was consistent with the majority of other states who had addressed this issue. The court noted that its ruling was not inconsistent with its prior ruling in Bishop v. Burgard, 198 Ill. 2d 495 (2002). In Bishop, the court had ruled that the common fund doctrine did apply to a claim made by an employer s ERISA plan. Therefore to the extent a lien claim is made by an employer s group medical carrier, the common fund doctrine would apply. The court found a significant difference between a claim made by a group medical carrier and a claim made by a medical provider. A medical provider is entitled to receive payment on its bills irrespective of a plaintiff s personal injury lawsuit. A group medical carrier is entitled to reimbursement only if the plaintiff successfully prosecutes a civil liability claim. Further, unlike a group medical carrier, the hospitals here had no standing to participate in the plaintiff s personal injury lawsuits nor could they have brought independent costs of action against the tortfeasors. For these reasons, the court granted the hospital s full recovery on their liens to the extent possible under the Health Care Services Lien Act without reduction for attorney s fees. Comment: Plaintiff s attorneys are truly greedy and disingenuous when it comes to fee recoveries. In these cases, the plaintiff s attorneys wanted to recover 30% of the total settlement and then one-third of the hospital s liens. Assuming the hospital liens totaled 40% of the total settlement that means out of the total settlement proceeds the plaintiff would recover 30% of the settlement. The health care providers would get 26.67% of the settlement and the plaintiff s attorneys would get 43.33% of the total settlement. The courts really have to do a better job in protecting lien holders. Claimants are injured and receive medical treatment as a result of accidents. They make claims based on the medical bills they are obligated to pay for the treatment. Then, after making a civil recovery based on the medical bills, claimants and their attorneys do all they can to avoid paying the medical providers. This is an unfair result for all. The court clearly was correct in siding with hospitals. They have reiterated a decision made over 30 years ago and they have protected medical providers appropriately when it comes to medical provider lien claims. - 19 -