Has Illinois’ Workers’ Compensation Reform Been Effective?

Has Illinois’ Workers’ Compensation Reform Been Effective?

By: James Allegretti 

In 2011, Illinois overhauled the state’s workers’ compensation system. However, a recent study by the Workers Compensation Research Institute has found that workers' compensation costs in Illinois remain sky high, according to Crain’s Chicago Business.

Reasons for the 2011 Reform

At the time of the reform, the St. Louis Post-Dispatch outlined some of the reasons for the reform, including the following:

• In Illinois, the workers' compensation system allows injured workers and employers to settle claims without court involvement. The system, which is run by the state, collects from employers and then pays the doctors and hospitals involved. Prior to the reform, the system had been plagued by rising costs and fraud.

• Proponents of the reform plan claimed it would save employers about $500 million dollars annually, mostly by reducing the fees doctors and hospitals get to treat injured workers.
• The reform would tighten the rules for workers who file carpal tunnel syndrome claims and would address the problem of "doctor shopping" by workers.

Findings by the Workers Compensation Research Institute

 In a study of 16 states—which were selected to represent the high end, the low end and the middle of the cost spectrum—the Workers’ Compensation Research Institute found that medical payments for workers’ compensation claims fell only 4.6 percent in Illinois in 2012, per Crain’s Chicago Business.

Here are some other interesting findings related to workers’ compensation reform in Illinois (Note: 2012 is the most recent year for which data is currently available.):

• Medical fees did fall 24 percent in 2012, but those savings were mostly offset by increased use of medical services and increased spending on litigation, second opinions and other cost-control measures.
• Total payments per claim fell just 1 percent.
• Illinois is below average in claims per 1,000 workers—in part because of high unemployment rates in fields that tend to have more injuries, including construction and manufacturing.
• When it comes to routine office visits, Illinois pays 82 percent of the median fee, but Illinois pays well above average for X-rays, pain management and major surgeries.
• In Illinois, non-hospital prices were 35 percent higher than the median; however, without the reform, they would have been 88 percent higher.

Workers’ Compensation Insurance Premiums in Illinois

Crain’s Chicago Business also provides information regarding workers' compensation insurance premiums in Illinois.

According to the Oregon Department of Consumer and Business Services, Illinois had the fourth-highest workers' compensation insurance rates in 2012. That’s an improvement from 2010, when Illinois’ rates ranked third-highest, but Illinois’ rates are still 151 percent of the study median.

Conclusions

Since the reform of Illinois’ workers’ compensation system in 2011, there have been some improvements. However, at this juncture, it is difficult to say how many of those improvements are directly related to the reform, and it is also difficult to say what the long-term effects of the reform will be. Some people believe the reform has accomplished or will accomplish its stated goals, while others believe further reform will be needed.  

If you are a worker in Mt. Prospect, Park Ridge, Evanston or elsewhere in the Chicago area who has a question about workers compensation, contact an experienced workers’ compensation attorney at Allegretti & Associates for help in your case.