Parking Lot Falls-Back to Table of Contents - Back to WC Index
    By: James M. Voelker (Peoria)

The Industrial Commission Division of the Illinois Appellate Court issued two decisions recently that address the compensability of slip and fall injuries on icy parking lots. One found the fall compensable, while the other found that it did not arise out of and in the course of claimant's employment. The cases are unusual because both reversed the Industrial Commission's decisions as against the manifest weight of the evidence.

In Wal-Mart Stores v. Industrial Comm’n, 326 Ill. App. 3d 438, 761 N.E.2d 768, 260 Ill. Dec. 585 (4th Dist. 2001), claimant was scheduled to work 4:30 p.m. to 11:00 p.m. and left the store at 8:30 p.m. for her meal break. On the day of the injury, a friend picked up claimant in the store parking lot. As the claimant was walking to the vehicle through the parking lot, she slipped and fell on ice. In finding the case compensable, the Industrial Commission noted that the parking lot was owned and maintained by Wal-Mart. Although both employees and patrons used the lot, employees were encouraged, but not required, to park in the specific area of the lot where claimant fell.

In reversing the Industrial Commission decision, the appellate court found no significance in the fact that the parking lot was owned and maintained by Wal-Mart because both employees and the general public used the lot. Although the vehicle was located in an area of the lot where employees were encouraged to park, the driver was not an employee and the general public used that area of the lot as well. The court found no connection between her employment and the fall.

In Homerding v. Industrial Comm’n, 327 Ill. App. 3d 1050, 765 N.E.2d 1064, 262 Ill. Dec. 456 (1st Dist.  2002), claimant worked as a part-time nail technician in a beauty salon located in a small strip mall. The mall consisted of 17 stores with two parking lots, one in the front of the store and the other in the rear. The mall maintained the parking lots, however, the employer’s lease obligated it to pay a prorated share of the common area costs. The lease also required the employer to pay $10 for each day on which a car of its agents or employees parked in either of the lots. Petitioner was required to park in the rear of back lot.

Claimant arrived at work and began setting up her supplies. She then realized that she left a case of supplies in her car. While returning to the store with the case, she slipped and fell on ice about five-feet from the door. The arbitrator held the case compensable, but the Industrial Commission reversed and held the case not compensable because the employer did not own or maintain the lot and did not designate a specific parking spot. The appellate court reversed the Industrial Commission and found the case compensable. It reasoned that the claimant had already begun her workday and was injured while performing a task that advanced the employer’s interests. It was clear that she fell while working and carrying out a task that was foreseeable and necessary for her job. Further, the risk of injury was connected to her employment because she was required to park in the rear of the lot. Finally, she was carrying a large and awkward case at the time she fell.

Although these cases are difficult to reconcile, there are several factors that point toward compensability in parking lot falls. In Homerding, claimant was on duty and was performing an activity that benefited the employer. She was also carrying a heavy case that might have played a role in her fall. The ownership and maintenance of the parking lot did not play a role in compensability in either case, probably because there was no defect in the lot that caused either fall. In Homerding, the court noted that claimant was required to park in the rear of the lot. Using these factors, the court in Homerding concluded that the fall related to a risk of her employment while the court in Wal-Mart concluded that the fall was not related to a risk of employment.

When analyzing the compensability of a fall in the employer’s parking lot, consider the following factors:

• Was the employee required to park in a specific area of the parking lot?
• Was the employee performing a task that benefited the employer at the time of the injury?
• Was the employee on duty at the time of the fall?
• Was the employee carrying something related to employment at the time of the fall?
• If a defect in the lot caused the injury, was the parking lot owned and maintained by the employer?
• Was the employee’s exposure to the risk of injury equal to that of the general public?

Medicare Lien Update - Back to Table of Contents - Back to WC Index
    By: Bradford J. Peterson (Urbana)

Insurers in Illinois have become acutely aware of efforts by the Center for Medicare and Medicaid Services (CMS) to recover medical expenses where such expenses arise out of workers’ compensation claims.  In 1980, the Medicare Secondary Payer Act 42 U.S.C. §1395y(b) (1992) was enacted to help insure that Medicare was not making payments where other insurance such as workers’ compensation was responsible for primary payment.  The statute provides that Medicare is not to make payment for medical expenses incurred by a beneficiary where the workers’ compensation insurer is liable for such bills.  If, however, Medicare proceeds with payment it is deemed a conditional payment and Medicare will be entitled to reimbursement.  By their express terms the Medicare Secondary Payer Statute and Code of Federal Regulations apply to workers’ compensation claims. 42 U.S.C. §1395(y)(b)(2)(A)(ii)(1992); 42 C.F.R. §411.20 (1990).

Insurers and counsel must evaluate all workers’ compensation settlements with regard to potential application of the Medicare Secondary Payor Statute.  This analysis includes several factors including whether there is an existing Medicare lien, whether the settlement includes future medical expenses and whether the claimant is a current or potential future Medicare beneficiary.

Where Medicare makes such conditional payments prior to resolution of the workers’ compensation claim Medicare will have a lien subject to reimbursement at the conclusion of the workers’ compensation claim.  The more difficult issue arises when addressing future medical expenses, involving current or future Medicare beneficiaries with anticipated future medical expenses for the work-related injury.

Where the claimant is a current Medicare beneficiary, the workers’ compensation insurer and counsel must address whether the claimant is likely to incur future medical expenses associated with the work-related injury.  If so, the settlement should include a specific enumerated dollar amount for future medical expenses that are reasonably likely to occur.  Medicare has yet to set a dollar threshold as to when it will require Medicare (CMS) approval for such allocation of future medical expenses.  Authorities have suggested that settlement of claims with future medical expenses exceeding $25,000 should be placed in a custodial or Medicare Set Aside Trust whereas cases involving less than $25,000 in anticipated future medical expenses may be paid directly to the petitioner or claimant.  Although it was anticipated that CMS would make a more formal pronouncement this past summer with regard to setting a dollar threshold as to when prior Medicare approval would be required involving future medical expenses for current beneficiaries, this pronouncement has yet to be forthcoming.

Where the claimant is not currently receiving Medicare, but it is anticipated that the claimant will become eligible for Medicare benefits within 30-months of disability then Medicare’s interest for future medical expenses must also be protected.  Medicare has set forth a dollar threshold as to when Medicare approval of settlements involving potential future Medicare beneficiaries is required.  The guideline provides that Medicare approval is only required where the settlement amount for future medical expenses and disability lost wages (including PPD) exceed $250,000.  Where this dollar threshold is met the insurer and counsel will need to seek CMS approval for the settlement and allocation for future medical expenses.  Although not strictly required it is anticipated that CMS will require that funds attributable to future medical expenses be placed in a custodial account or Medicare Set Aside Trust as a prerequisite to CMS approval of the settlement.  Where CMS in fact approves the settlement they will be precluded from later seeking reimbursement or subrogating against the insurer or employer.

If you have any questions concerning the handling of workers’ compensation claims involving current or future Medicare beneficiaries please contact your Heyl, Royster, Voelker & Allen workers’ compensation counsel.  We will be closely monitoring further developments and pronouncements by CMS with regard to their enforcement efforts, guidelines and standards.

The Perils of Petrillo - Back to Table of Contents - Back to WC Index
    By: James M. Voelker (Peoria) and Edward E. Johnston (Edwardsville)

If there was any doubt  whether the Petrillo doctrine applied to Illinois workers’ compensation matters, it was eliminated in the case of Hydraulics, Inc. v. Industrial Comm’n, 329 Ill. App. 3d 166, 768 N.E.2d 760, 263 Ill. Dec. 679 (2d Dist. 2002), reh’g denied (May 22, 2002).  The court ruled without reservation that Petrillo v. Syntex Laboratories, Inc., 148 Ill. App. 3d 581, 499 N.E.2d 952,  102 Ill. Dec. 172 (1st Dist. 1986) applies to Illinois workers’ compensation claims. The Petrillo doctrine precludes ex parte communications by the defendant/respondent with the physician of a litigant because of the sanctity of the physician-patient relationship.

In Hydraulics, the claimant alleged a fractured left wrist as a result of repetitive work activities. Initially, the treating surgeon causally connected the fracture to claimant’s employment. The employer’s health service coordinator then sent the surgeon a letter, job description and videotape seeking to change his opinion on causal connection. The effort was successful, and the treating surgeon issued a “clarification” of his opinion finding no causal relationship between the work activities and wrist fracture.

At trial, claimant’s counsel objected to any evidence resulting from the employer’s communication with the treating surgeon. The arbitrator agreed and precluded the surgeons “clarification” as well as the job description. The Industrial Commission affirmed.

The appellate court affirmed the Industrial Commission and held:

. . . Ex parte communications between an injured worker’s health care provider(s) and the employer or their legal representative(s) are prohibited by operation of the doctrine enunciated in Petrillo v. Syntex Labroatories, Inc., 148 Ill. App. 3d 581, 499 N.E.2d 952 (1986), and the public policy against such communications described in Best v. Taylor Machine Works, 179 Ill. 2d 367, 458, 689 N.E.2d 1057, 1100 (1997).

The court  reasoned that while not subject to discovery procedures under the Code of Civil Procedure (735 ILCS 5/1-101 et seq.), the Act provides “discovery-like” procedures that allow the employer to secure necessary information from treating physicians.

Since it is clear now that Petrillo applies to workers’ compensation matters, how should the employer deal with the day-to-day return to work issues that exist in most workers’ compensation cases? Several strategies can be used to obtain information from treating physicians without any risk of violating Petrillo. First, insist that the employee supply a signed authorization for the release of medical information including whether the employee is capable of returning to work on a restricted or unrestricted basis. Section 7110.70 of the Illinois Industrial Commission rules provide:

c) When an employer takes the position that it has insufficient medical information to determine its liability for the initial payment of temporary total compensation, or the continuation of such payment, such employer shall have the initial responsibility to promptly seek the desired information from those providers of medical, hospital and surgical services of which the employer has knowledge. The employee shall have the responsibility to provide or execute such authorizations for release of medical information as the employer may reasonably request from time to time, and the employer shall promptly provide the employee or his representative, upon request, with copies of those complete medical records and reports it obtains with such authorizations.

In addition to authorizations, section 8a of the Act entitles the employer to request records from the treating physician. Employers should exercise that right as needed to obtain information regarding petitioner’s current medical status and ability to return to work.

Section 16 of the Act allows employers to issue subpoenas to medical providers. Subpoenas can be used to obtain medical records including work restrictions and off work slips. If the medical provider’s response to a subpoena or section 8a request fails to provide a basis for ongoing benefits, temporary total disability should be suspended or terminated.

Section 16 of the Act also permits the employer to take the deposition of a treating physician absent an agreement by the claimant or his counsel. Although rarely used in practice, this procedure, known as a dedimus potestatem,  provides a powerful tool when confronted with an obstinate claimant.

Another option is to have an exam under section 12 of the Act with an independent physician of the employer’s choice. The claimant’s failure to cooperate with an exam under section 12 provides a basis to suspend benefits. The exam under section 12 can be used to address return to work issues as well as permanent impairment.

Finally, attempt to reach agreements with a claimant or his attorney, if represented, allowing the employer to communicate directly with the treating physician. The confidentiality protected by Petrillo may be voluntarily waived by a claimant. Make sure the waiver is in writing and signed by the claimant. Experienced workers’ compensation attorneys have a large case volume and frequently do not want to be bothered by day-to-day return to work issues and may agree to such a waiver to insure the expedient resolution of the claim.

Although the Hydraulics decision, at first glance, may seem like a deep blow to employers and insurance carriers, strategic use of the methods described above will help to lessen the impact of the decision. While employers should avoid direct unauthorized contact with treating physicians concerning privileged and confidential information, fear of Petrillo should not paralyze your defense. Please call any of our offices with questions about the application of Petrillo to your particular situation.

CASE LAW UPDATE - Back to Table of Contents - Back to WC Index

These represent some of the more significant decisions of the Illinois Supreme Court, the Appellate Court, Industrial Commission Division, and the Industrial Commission, during the second half of this year.

Section 19(f) Recall Proper to Amend Penalties When Miscalculated Under McMahan - Back to Table of Contents - Back to WC Index

Bunnow v. Industrial Comm’n, 327 Ill. App. 3d 1039, 765 N.E.2d 467, 262 Ill. Dec. 330 (1st Dist. 2002). On review the Industrial Commission issued an award including penalties. The following day the Illinois Supreme Court issued the McMahan decision allowing penalties for vexatious nonpayment of medical expenses. Before the Commission issued its decision, claimant filed a petition for reconsideration under McMahan. The Commission’s decision awarded penalties, but not for the nonpayment of medical expenses. Claimant then filed an amended motion to reconsider and a petition under section 19(f) moving for the correction of a clerical error. The appellate court ruled that a motion to reconsider is not a procedure allowed by the Act. However, section 19(f) filings are allowed, even at the Commission level. Since McMahan required penalties to be calculated as (TTD benefits + medical expenses) * 0.5, the motion under section 19(f) was proper. The appellate court remanded the case with instructions to recalculate the penalties with the medical expenses included in the calculation.

Workers' Compensation Lien Attached to Wrongful Death Settlement Thus Eliminating an Award Under the Act - Back to Table of Contents - Back to WC Index

Padgett v. Industrial Comm’n, 327 Ill. App. 3d 655, 764 N.E.2d 125, 261 Ill. Dec. 834 (1st Dist. 2002). Claimant was a child of the deceased injured worker and was a beneficiary in a civil case against a hospital which allegedly caused the death of the injured worker while receiving treatment for work related injuries. The arbitrator found that the civil settlement was subject to the employer’s workers’ compensation lien under section 5(b) and amounted to more than claimant’s potential recovery under the Act. Respondent was entitled to a credit against the amount of its liability to claimant up to the full amount of the civil settlement. Thus, claimant was precluded from recovery under the Illinois Workers’ Compensation Act. The appellate court affirmed.

Vocational Rehabilitation Benefits May Not Be Awarded Under Section 19(b-1) - Back to Table of Contents - Back to WC Index

Mobil Oil Corp. v. Industrial Comm’n, 327 Ill. App. 3d 778, 764 N.E.2d 539, 261 Ill. Dec. 924 (3d Dist. 2002). Claimant filed a 19(b-1) petition for TTD and medical benefits. He also sought vocational rehabilitation benefits. The arbitrator awarded TTD, medical expenses, and awarded vocational rehabilitation expenses and maintenance even though he had been released to return to work. The Industrial Commission affirmed. The appellate court held that vocational rehabilitation benefits and maintenance may not be awarded as relief in a hearing conducted pursuant to section 19(b-1) of the Act.

Aggravation to Degenerative Condition Not Compensable - Back to Table of Contents - Back to WC Index

Sisbro, Inc. v. Industrial Comm’n, 327 Ill. App. 3d 868, 764 N.E.2d 1163, 262 Ill. Dec. 46 (4th Dist. 2002).  Claimant sought benefits for a degenerative condition in his right foot. He twisted his right ankle in a pothole while delivering dairy products for Sisbro. The Industrial Commission found the case compensable and awarded benefits. The appellate court reversed the Commission. It held that claimant was not entitled to compensation, regardless of whether his condition of ill-being was caused by a work-related aggravation of a preexisting condition, if his physical condition was so deteriorated that his condition of ill-being could have been produced by normal daily activity. The court acknowledged that claimant’s condition (Charcot arthropathy) was caused by the work injury but denied compensation because any activity could have caused the condition given his preexisting diabetic neuropathy.

Aggravation of Preexisting Hypertension Compensable Under “Mental-Physical” Analysis - Back to Table of Contents - Back to WC Index

City of Springfield v. Industrial Comm’n, 328 Ill. App. 3d 448, 766 N.E.2d 261,  262 Ill. Dec. 641 (4th Dist. 2002). Claimant was assigned to duties as a juvenile detective investigating criminal activities by juvenile offenders, interviewing suspects and victims of crime and making arrests, including drug arrests at crack houses. He investigated gang activity and his life had been threatened many times. He was diagnosed with hypertension in the early 1990s. His treating physician opined that the claimant’s hypertension had been exacerbated by his stressful job duties and that his hypertension was uncontrollable in his workplace. He further opined that the claimant was disabled from his job and that continued work in law enforcement would be detrimental to the claimant’s health. The arbitrator denied benefits and the Industrial Commission reversed. The appellate court affirmed the Industrial Commission. It rejected respondent’s argument that the case had to be analyzed under either a “mental-mental” theory or the “physical-mental” theory. The court held that claimant was not seeking compensation for psychological injuries so a “mental-physical” analysis was appropriate. Claimant must prove only that some act of employment was a causative factor, not be the sole, or even the principal, causative factor. The case was compensable since it was uncontroverted that the claimant’s job-related stress aggravated his preexisting hypertension (a physical condition) to the point where the claimant could no longer engage in police work without endangering his health.

Widows Claim Denied When Decedent Corporate Officer Elected to Exclude Self from Coverage - Back to Table of Contents - Back to WC Index

D. Mayer Landscaping v. Industrial Comm’n, 328 Ill. App. 3d 853, 767 N.E.2d 821,  263 Ill. Dec. 95 (1st Dist. 2002), reh’g denied (Apr. 10, 2002). Claimant was the widow of a corporate officer killed while working in his own landscaping business. Decedent previously elected to exclude himself from coverage under the Act. The court rejected the widow’s claim that decedent was acting in a dual capacity when he was killed. It also rejected the widow’s claim that her right to sue under the Act was independent, and therefore, not dependent on the decedent’s election to exclude himself under the policy of insurance. Thus, benefits were denied.

Penalties Proper for Nonpayment of PPD and TTD Award When Only Medical Bills Disputed on Review - Back to Table of Contents - Back to WC Index

Zitzka v. Industrial Comm’n, 328 Ill. App. 3d 844, 767 N.E.2d 405, 262 Ill. Dec. 945 (1st Dist. 2002). The arbitrator awarded 73 3/7 weeks TTD and 45 percent man as a whole plus all medical bills submitted by claimant. Respondent filed a timely petition for review of the case but challenged only the medical award. The Industrial Commission revised the medical award and remanded the case to the arbitrator for further testimony on the issue. Shortly prior to the Commission’s decision was issued, claimant filed a petition for penalties under sections 19(k) and 19(l). Respondent paid the PPD and TTD award shortly after receiving the Commission’s decision. At the hearing on the petition for penalties, the Commission awarded penalties against the respondent for failing to pay the PPD and TTD awards in a timely fashion. The penalties amounted to $32,791 under 19(k) and $6,558 under 19(l). The appellate court affirmed finding that respondent had waived any challenge to the PPD and TTD awards, thus the awards were payable immediately. Failure to pay these awards supported penalties even though the medical benefit aspect of the case was on review.

McMahan v. Industrial Comm’n Applies Retroactively- Back to Table of Contents - Back to WC Index

Am. Airlines v. Industrial Comm’n, 328 Ill. App. 3d 343, 766 N.E.2d 1132, 262 Ill. Dec. 829 (1st Dist. 2002), reh’g denied (March 28, 2002). The appellate court held that McMahan v. Industrial Comm’n (Farmer’s Elevator), 183 Ill. 2d 499, 702 N.E. 545, 234 Ill. Dec. 205 (1998) allowing penalties for nonpayment of medical expenses applies retroactively.

Mental Stress Causally Related to Gastrointestinal Illness and Heart Attack - Back to Table of Contents - Back to WC Index

Baggett v. Industrial Comm’n (Marion Comty Sch. Dist. No. 2), 2002 Ill. LEXIS 378 (Ill. Aug. 29, 2002). The Illinois Supreme Court reversed the Industrial Commission, holding that it applied the wrong legal standard to a “mental-physical” claim. Claimant, a high school industrial arts teacher for the Marion school district (District), collapsed at work from gastrointestinal tract bleeding which led to a myocardial infarction, cardiac arrest, and resulting anoxic brain damage, rendering him permanently and totally disabled. Claimant alleged that the mental stress from his job was a causative factor in the development of the peptic ulcer that led to his disability. The arbitrator awarded benefits, but the Industrial Commission held that petitioner failed to prove that he had an accident under the Act because there was no evidence that he was subject to more stress than his co-workers and that there was no unusual job stress at the time of his collapse. The appellate court affirmed the Industrial Commission. The Supreme Court reviewed the case de novo, finding that the Industrial Commission and appellate court applied improper legal standards. It held that claimant need only prove that some act or phase of the employment was a causative factor of the resulting injury. Moreover, claimant need only prove that the usual job stress is greater than those facing the general public. He is not required to prove that the job stress is greater than that of coworkers or that unusual levels of stress existed at the time of injury. The court found that claimant’s job as a school teacher subjected him to stress greater than the general public and that the work stress was a causative factor in the aggravation of his ulcer which led to his disablement. The arbitrator’s award of permanent total disability was reinstated.

Decision of Improperly Constituted Commission Panel is Null and Void - Back to Table of Contents - Back to WC Index

Daniels v. Industrial Comm’n, 201 Ill. 2d 160, 775 N.E.2d 936,  266 Ill. Dec. 864 (2002) reh’g denied  (Aug. 29, 2002). The Commission’s appointment of two arbitrators to fill vacancies on panel “B” was beyond the statutory authority of the Commission because it was up to the governor to appointment replacements. Thus, the decision of the Commission was null and void. The case was remanded to the Commission for another hearing.

Failure to Award Wage Differential Not Against Manifest Weight of Evidence - Back to Table of Contents - Back to WC Index

Pietrzak v. Industrial Comm’n (Landair Trans., Inc.), 329 Ill. App. 3d 828, 769 N.E.2d 66, 263 Ill. Dec. 864 (1st Dist. 2002). The appellate court affirmed the Commission’s permanency award rather than a wage differential when evidence of a labor market survey supported the existence of jobs within claimant’s restrictions at or near his prior wage level. The fact that claimant selected a job earning substantially less the his perjury earnings was not sufficient to require a wage differential award.

Commission Lacked Subject Matter Jurisdiction Where City of Rock Island Passed Ordinance Precluding Recovery by Police Officers and Firefighters Under the Act- Back to Table of Contents - Back to WC Index

Jones v. Industrial Comm’n, 2002 Ill. App. LEXIS 382. Claimant police officers and firefighters were precluded from seeking benefits under the Act because the City of Rock Island passed an ordinance providing for medical care and precluding recovery under the Illinois Workers’ Compensation Act. The fact that the City stipulated to jurisdiction during trial had no impact on the Commission’s subject matter jurisdiction because it cannot be waived, stipulated to or consented to by the parties. Further, subject matter jurisdiction may be raised at any time and may be raised sua sponte if necessary.

Retroactive Pay Raise Included in Average Weekly Wage Calculation - Back to Table of Contents - Back to WC Index

City of Chicago v. Industrial Comm’n (Cianci), 331 Ill. App. 3d 402, 770 N.E.2d 1208,  264 Ill. Dec. 512 (1st  Dist. 2002), reh’g denied  (June 20, 2002). The arbitrator awarded permanent total benefits based on an AWW of $670.82, excluding a retroactive pay raise because the raise was not in effect at the time of the injury. The Commission reversed the arbitrator and included the pay raise, increasing the AWW to $698.83. The appellate court affirmed the Commission, finding that section 10 of the Act required inclusion of the retroactive pay raise because it was remuneration for work he completed during the relevant 52-week period prior to the injury.

Credit Allowed for Prior Settlement in Iowa Under Section 8(e) - Back to Table of Contents - Back to WC Index

Keil v. Industrial Comm’n, 331 Ill. App. 3d 478, 771 N.E.2d 626, 264 Ill. Dec. 922 (3d Dist. 2002). Claimant received an award of 50 percent of a leg, but the arbitrator refused to give credit for a prior settlement in Iowa for 17.5 percent or the same leg. The Commission applied the credit in whole. The appellate court held that the statue does not restrict such credits to Illinois claims and affirmed the Commission’s application of the credit. The manner in which the credit is to be determined is a factual matter for the Commission.

We recommend the entire opinion be read and counsel consulted concerning the effect these decisions may have upon your claims.