Illinois Passes Workers’ Comp Reform but Some Say More Is Needed

Illinois Gov. Pat Quinn plans to sign a major overhaul of Illinois workers’ compensation system that he said will mean “significant savings” for the state, but at least one insurance carrier trade group asserted more work needs to be done to reform the system. House Bill 1698 passed 62-43 in the Illinois House on May 31 evening just 48 hours after the same chamber rejected it.

Quinn said the legislation will help maintain the state’s economic competitiveness and will attack fraud and abuse in the workers’ comp system.

The bill’s supporters, including Gov. Quinn, say the legislation will save Illinois businesses more than $500 million, while protecting injured workers. The bill aims to reduce costs for businesses and cut down on fraud by reducing medical fees and tightening review of workers’ claims, according to the Illinois Information Service.

Republican lawmakers have complained that the legislation hits doctors too hard by cutting their fees, which will be reduced by 30 percent.

More Work Needed

Not everyone thinks the bill does everything necessary to shape up the state’s workers’ compensation climate.

Steve Schneider, Midwest region vice president for the American Insurance Association (AIA), said there is still need for significant reforms.

“While perhaps well-intentioned, HB 1698 is unlikely to produce the much-needed outcomes to ultimately reduce the costs of Illinois’ overly expensive system,” Schneider said.

Reforms advocated by AIA include the required use of the American Medical Association (AMA) Impairment Guidelines, employer direction of medical care, medical fee schedule reductions, and enhanced utilization review authority among others. While the legislation does address those issues, Schneider said the bill is ambiguous enough and flexible enough “to allow for continued systemic abuse.”

He questioned claims that HB 1698 will save as much in reduced expenses as its supporters believe. Schneider said that claim has not been independently verified.

A.M. Best said the legislation may not go far enough in addressing one of the key problems insurers face in Illinois – its judicial system. In an announcement released by the ratings agency, Best said Illinois has a “highly unfriendly judicial system where jury awards can vary significantly with little merit.”

Topics Legislation Workers' Compensation Illinois