NEWSLETTER - November 2008

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November 2008

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• Firm Happenings
• Case Law Updates
  1. Borrowing employer required to reimburse loaning employer – and pay attorney’s fees and costs in civil action – in the absence of written agreement regarding reimbursement
  2. Commission adopts ime physician’s opinions over those of treating doctor to reverse award of benefits in repetitive trauma claim
  3. Disfigurement claim has blackhawks singing the blues

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For this newsletter we have news of import to our clients concerning changes at the Commission and changes in reporting requirements to the Centers for Medicare and Medicaid Services; some success stories on recent trials and Commission appeals; and an update on recent Commission and Court cases.

• We recently sent an email to all of our clients advising of the change in Arbitration assignments of many of the downstate Illinois venues of the Worker's Compensation Commission, as well as other changes ordered by former Chairman Dennis Ruth as he left office. If you did not receive this email and would like to, please email Jack Shanahan and he will forward you a copy.
• In addition, all self-insured clients, insurance companies and TPA’s need to be aware of new requirements from the Centers for Medicare and Medicaid Services (CMS) concerning reporting of benefits paid for group health insurance, worker’s compensation and general liability claims to claimants who are currently recipients of Social Security and SSDI payments. Many insurance companies have been reporting these payments voluntarily, but starting on July 1, 2009, CMS will mandate reporting of such payments, holding out the stick of a fine of $1000.00 per day per claimant for unreported payments. All companies, including those that are self-insured, that pay benefits under group health, worker’s compensation and general liability (Required Reporting Entities in CMS-speak) are to register with CMS on the CMS website starting in May 2009, and must be registered by July 1, 2009.

For more information on this new requirement, please go to CMS’ website at: www.cms.hhs.gov/MandatoryInsRep and scroll down to the heading of Medicare Secondary Payer Mandatory Reporting.

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Firm Happenings

Judy Nash scored a Circuit Court reversal of a Commission decision finding an accident arising out of and in the course of a claimant’s employment. The case was tried pursuant to a Petition for Immediate Hearing due to our denial of the claim. The Arbitrator found that the petitioner failed to prove that he suffered an accident that arose out of and in the course of his employment with Respondent. This decision was reversed by the Commission, with one dissenting opinion, on all issues. Had it stood, the cost to the client in terms of awarded TTD and medical and the anticipated permanency award was approximately $35,000.00

We appealed, and Judy engaged in a lengthy oral argument before Judge White. The Commission had reversed the Arbitrator based on its finding of consistency between the petitioner’s testimony and the medical records. The medical records contained several versions of how the alleged accident occurred, however, and Judy successfully argued to the Circuit Court that the testimony relied on by the Commission was not consistent with the medical records. The Court agreed, finding that the Commission’s decision was against the manifest weight of the evidence because the medical records did not support the testimony as to the alleged accident. The Court reinstated the Arbitrator’s denial of compensation.

It is exceedingly rare for the Circuit Court to reverse the Commission’s decision on the basis that it was against the manifest weight of the evidence, and even more rare that the Court will disregard a credibility assessment by the Commission. Kudos to Judy on that accomplishment

Steve Murdock also recently sealed a victory before the Commission on a claimant’s review of the Arbitrator’s favorable decision. The petitioner sustained an injury to his left shoulder on July 6, 2004 which was accepted and paid. Not content with that, the petitioner began treating for cervical spine complaints nearly one year after the accident, and claimed that the cervical spine condition was related to the same July 6, 2004 accident. After trial on this portion of the claim, the Arbitrator found no medical causal connection between the petitioner’s condition of ill-being with respect to his cervical spine beginning in 2005 to the accident on July 6, 2004. The petitioner filed a Review Petition, but after briefing and Steve’s oral argument, the Commission affirmed and adopted the Arbitrator’s Decision.

Based on the medical bills incurred for the cervical spine treatment, resulting lost time and anticipated permanency based on the treatment rendered, the savings to our client totaled about $180,000.00.

Finally, Jack Shanahan defeated a claim for extensive TTD and medical treatment for what was no more than a back strain but which resulted in months of treatment and off work authorizations by questionable providers. When the matter came up for trial, the petitioner's attorney also raised an average weekly wage issue, claiming his client was entitled to greater TTD payments based on a higher average weekly wage. As the petitioner had a legitimate shoulder injury requiring surgery, substantial TTD had been paid for the shoulder prior to our termination of benefits on account of the disputed back injury claim.

Solely through cross-examination of the petitioner, Jack was able to elicit testimony sufficient for the Arbitrator to actually lower the average weekly wage and TTD rates, deny any medical treatment or permanency for the back injury and enter an award in which petitioner actually owes respondent about $6,000.00 from an overpayment of benefits. This decision resulted in a savings of over $90,000.00 compared to what petitioner was claiming for the TTD, medical treatment and PPD related to the disputed back injury.

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Case Law Update

BORROWING EMPLOYER REQUIRED TO REIMBURSE LOANING EMPLOYER – AND PAY ATTORNEY’S FEES AND COSTS IN CIVIL ACTION – IN THE ABSENCE OF WRITTEN AGREEMENT REGARDING REIMBURSEMENT

The borrowing/loaning provision of the Workers’ Compensation Act – 820 ILCS 305/1(a)4 – is one of the more clearly written provisions in the entire Act. It states simply that where a company loans an employee to another company, and the worker is injured in the service of the “borrowing” employer, both entities are liable, jointly and severally, for payment of benefits. Where the loaning employer pays the benefits, a right of reimbursement from the borrowing employer is created, and the Act states that the loaner is entitled to fees and costs for any proceedings necessitated by the borrower’s refusal to reimburse the loaner. This right exists, of course, “in the absence of an agreement to the contrary.”

In Surestaff, Inc. v Open Kitchens, the loaning employer, Surestaff, paid benefits under the Act following the death of an employee it provided to Open Kitchens, the borrowing employer. When Surestaff sought reimbursement for the benefits it paid, Open Kitchens refused, claiming that Surestaff’s owner and a sales associate had orally agreed to pay worker’s compensation benefits to employees it loaned Open Kitchens without requiring reimbursement.

Surestaff filed a Complaint in Circuit Court for reimbursement of the monies it paid on the claim. The main issue at trial was whether Surestaff had waived its reimbursement rights by the alleged oral statements of its president and salesperson. The jury found in favor of Surestaff, entering an award that included nearly $70,000.00 in attorney’s fees and costs for Surestaff. On appeal to the Appellate Court, the Court affirmed.

The import of this case to employers -- borrowers and loaners -- is that the statutory terms will be enforced as written in section 1(a) 4 in terms of the loaner’s absolute right of reimbursement, absent an agreement to the contrary. Based on the Appellate Court’s affirmation of the verdict for Surestaff, borrowing employers should make sure to get in writing any agreements by loaning employers to waive their reimbursement rights. The Court basically considered a borrowing employer’s claim of waiver to be an affirmative defense to the reimbursement action, requiring the borrower, not the loaner, to carry the burden of proof on this issue. Considering that the borrowing employer can be assessed not only with full reimbursement of all worker’s compensation benefits paid by the loaner but also the attorney’s fees and costs, the importance of obtaining a waiver in writing from the loaning employer cannot be understated.

COMMISSION ADOPTS IME PHYSICIAN’S OPINIONS OVER THOSE OF TREATING DOCTOR TO REVERSE AWARD OF BENEFITS IN REPETITIVE TRAUMA CLAIM.

In a refreshing decision that gives hope to employers throughout the State defending repetitive trauma claims, the Commission recently reversed an Arbitrator’s award of benefits in a disputed repetitive trauma case by, among other things, finding the respondent’s IME physician’s opinions were more credible than those of the treating doctor. The Commission also disregarded the claimant’s testimony about the repetitive nature of her job duties, finding instead that she failed to show that her duties were manually intensive or unchanging.

The petitioner was a shift manager at a fast food restaurant. She testified to a variety of job tasks involving her hands, leading to weakness and numbness. She eventually underwent surgery on her bilateral upper extremities for carpal and cubital tunnel syndromes, claiming this was due to her repetitive job with respondent. Following trial, the Arbitrator awarded benefits.

On review, the Commission noted that petitioner’s testimony regarding her job duties was vague, and that the list of job duties she provided, along with that submitted by the respondent, did not support a causal connection between the conditions the petitioner underwent surgery for and her job duties. The Commission also noted that her job duties were varied, which likewise pointed away from her job as a causative factor in her injuries.

Most surprisingly, the Commission discounted the causal connection opinion of the treating doctor, noting that he did not appear to know exactly what petitioner’s job duties were and had provided his causation opinion even before he obtained a list of the job activities. The opinions of Dr. Carroll, respondent’s IME doctor, were more credible as he had obtained a description of the job duties from both petitioner and the company, and his opinion that her job duties were not repetitive in nature was supported by the evidence. Consequently, the Arbitrator’s award of benefits for bilateral cubital and carpal tunnel surgeries was reversed and the claim denied by the Commission.

DISFIGUREMENT CLAIM HAS BLACKHAWKS SINGING THE BLUES

It’s not exactly Ted Albrecht vs. The Chicago Bears, but in Bourque v. Chicago Blackhawk Hockey Club, a panel of the Worker's Compensation Commission put forth what appears to be a new standard in evaluating the value of disfigurement. Following trial before an Arbitrator, the petitioner was awarded 65 weeks of disfigurement on the basis of a 3 to 4 inch scar on his neck. The Arbitrator found the scar was bright red, raised and irregular in shape.

On review, the Commission adopted the Arbitrator’s findings concerning the scar, and further noted that the scar could only be covered up by a high turtleneck. Given its location on his neck and the inability to easily cover the scar, the Commission increased the award by 25 weeks.

One wonders whether the consideration of how easily the scar could be covered will now be adopted Commission-wide in evaluating disfigurement cases, and whether it will apply equally to scars that are regularly covered by clothing. Given the usual nine month winters of Chicago, this could substantially reduce the value of scars below the knee to the point of nothing, though we do not anticipate that the Commission will take it that far.

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