In what highlights a key difference between personal injury law in Illinois and workers' compensation law, the Illinois Appellate Court, Workers' Compensation Division, issued an opinion today in Perez v. IWCC, 2018 IL App (2d) 170086WC. The decision can be found here.
The general issue in Perez was whether the employer should have to pay the "fee schedule" rate for the disputed bills (the amount set by the legislature), or whether they only had to pay back what Petitioner's spouse's insurance paid. For example, say a medical bill is originally $10,000. The workers' compensation fee schedule rate may be $7,500 for that bill. But the spouse's health insurance may have a lower negotiated repayment rate of, say, $4,000. Using my figures as the example, Perez wanted the employer to have to pay the $7,500 as part of the trial award and not just reimburse the spouse's group carrier the $4,000. The net result is that Perez would have personally received the $3,500 difference.
Not fair, you say? Not fair said the Appellate Court as well, calling that outcome a "windfall" to the claimant. Instead, the Appellate Court reiterated its decision in the Tower case that the only thing which matters is the bills are paid - not by whom or for how much. As long as the employer takes responsibility for reimbursing the private carriers, that satisfies the law.
However, in personal injury law, the Illinois Supreme Court has previously found an even bigger "windfall" to be lawful and fair. In Arthur v. Catour and Wills v. Foster, the Supreme Court found the liable party should not benefit from the injured's party's available insurance. Meaning, as long as the plaintiff can prove the original bills are usual and customary charges (the $10,000 I mentioned above), plaintiff can recover the full $10,000 - not just what insurance paid. The same is true of Medicare or public aid payments. The reasoning is that the party who should benefit from the plaintiff's insurance's rates is the plaintiff - not the liable defendant. The defense bar argued on these cases that giving the plaintiff a full $10,000 creates a windfall - especially if you consider Medicare may only pay $2,000 of that bill. Even so, the Supreme Court sided with the plaintiff's position.
Regardless of whether the Appellate Court in Perez is interpreting the law correctly, to me the decisions in Tower and Perez create a perverse incentive for the employer to deny treatment to the injured worker. It is simply a matter of dollars and cents. If the employer can accept a case and pay $7,500, or deny the case and later pay only $4,000, for the same bill, which makes better fiscal sense? Perhaps fewer cases would be denied if the employer always had to pay the fee schedule rate.
While it would ultimately be the fault of the legislature, the Appellate Court's interpretation of the law makes it economically advantageous to deny cases - which defeats the purpose of the Act to provide timely benefits to injured workers.