HIPAA - Back to Table of Contents - Back to WC Index
Author: Kevin J. Luther, Rockford

Introduction

In recent months, many workers’ compensation insurance adjusters, employers, and their attorneys have received communications from hospitals, clinics and other medical providers regarding changes in their policy as it relates to the disclosure of patient medical records. These communications have probably been motivated by enactment of the Health Insurance Portability and Accountability Act “HIPAA,” of 1996, and the recently enacted rules governing HIPAA’s enforcement. A significant amount of public and professional attention has been centered on the privacy provisions of HIPAA, perhaps because of the fact that the rules provide serious consequences for violations, including a penalty of up to 10 years in prison and $250,000.00 in fines for each violation of the Act.

Fortunately, while the seriousness of HIPAA cannot be discounted, HIPAA was intentionally authored to ensure that state workers’ compensation systems would not be adversely affected by restriction on access to personal health information. HIPAA’s Privacy Rule allows personal health information to be disclosed to workers’ compensation insurers, state administrators, and employers to the extent necessary to comply with laws relating to workers’ compensation or similar programs established by state or other laws.

What is HIPAA?

Many questions are raised regarding the functions and goals of HIPAA. HIPAA’s major functions are twofold: (1) to provide legal protection to ensure workers leaving their jobs maintain health insurance; and (2) to protect the confidentiality, availability and integrity of health information, by reducing administrative costs through standardizing these transactions and by setting up a regulatory structure to ensure confidentiality of personal health information transmitted electronically or in any form or media. Likewise, HIPAA’s goals are to reduce costs; give patients increased control and access to information; protect health information from threats of disclosure; and improve the efficiency of health care delivery.

Where Does HIPAA Apply?

HIPAA prohibits “covered entities” and their business associates from using or disclosing protected health information unless they strictly adhere to the Privacy Rule. Covered entities include health plans, health care clearinghouses, and health care providers who transmit any health information in electronic form in connection with a transaction covered by HIPAA. (Health care providers who do not submit HIPAA transactions in standard form become covered by this Rule when other entities, such as a billing service or hospital, transmits standard electronic transactions on their behalf.) The HIPAA Privacy Rule does not apply to entities that are either workers’ compensation insurers, workers’ compensation administrative agencies, or employers, except to the extent that they may otherwise be covered entities.

The HIPAA Privacy Rule recognizes the legitimate need of insurers and other entities involved in the workers’ compensation system to have access to the individual’s health information as authorized by state or other law. Due to the significant variability among such laws, the Privacy Rule permits disclosures of health information for workers’ compensation purposes in a number of ways.

The Privacy Rule permits covered entities to disclose protected health information to workers’ compensation insurers, state administrators, employers, and other persons or entities involved in workers’ compensation systems, without the individual’s authorization in certain situations. For example, disclosure without individual authorization will be permitted: (1) as authorized by and to the extent necessary to comply with laws relating to workers’ compensation or similar programs established by law that provide benefits for work-related injuries or illness without regard to fault; and (2) to the extent the disclosure is required by state or other law. In this case, the disclosure must comply with and be limited to what the law requires. Finally, disclosure without individual authorization will be permitted for purposes of obtaining payment for any health care provided to the injured or ill worker.

Under the Illinois Workers’ Compensation Act, these HIPAA regulations therefore do not affect the ability of the employer or their workers’ compensation carrier to obtain medical records on the injured employee by written request under section 8(a), or by subpoena under section 16.

Amputation Claims Revisited - Back to Table of Contents - Back to WC Index
Author: Daniel R. Simmons, Springfield

Amputation claims appear to be among the easiest to adjust. Compensability, temporary total disability benefits and payment of medical expenses are issues that are ordinarily resolved easily. The Illinois Workers’ Compensation Act addresses amputation claims specifically concerning permanency values. It is a good idea to be familiar with the requirements of the Illinois Workers’ Compensation Act when an amputation claim arises.

Amputation to the Thumb, Finger or Toe

Section 8(e)(a) discusses compensation for amputation to a thumb, finger or toe. The loss of the distal phalanx of a thumb, finger or toe shall be considered to be equal to the loss of one-half of that body part. The Industrial Commission has generally interpreted that to mean that any bone loss in the distal phalanx of the thumb, finger or toe is sufficient to invoke the mandate under the Act that the permanency value of the claim is 50% loss of use of the body part. In the event that more than the distal phalanx is lost, the permanency value is mandated at 100% of the body part. That does not mean that the entire thumb, finger or toe has to be lost in order for there to be a 100% loss under the Act. As long as there is bone loss other than at the distal phalanx, the case has an automatic value of 100% loss of use of the affected body part.

It sometimes is difficult to ascertain from reviewing medical records whether you are dealing with a 50% or 100% loss of use, particularly if the amputation involved the entire distal phalanx of a finger. In those cases, it is often useful to meet with the injured worker or have photographs provided of the injured body part so that an assessment can be made of whether the loss is a statutorily required 50% or 100% loss of use.

Multiple Finger Amputations

Section 8(e)(9) establishes that a hand is worth 190 weeks. That section goes on to provide that the loss of two or more digits, or one or more phalanges of two or more digits, of a hand may be compensated on the basis of partial loss of use of the hand. It is important to note that the language of this section does not require the Industrial Commission to change the compensation so that it is on the basis of the loss of use of the hand. Compensation based on loss of use of the hand is discretionary with the Industrial Commission. Finally, this section provides that the loss of four digits, or the loss of use of four digits, in the same hand shall constitute the complete loss of the hand. For example, the amputations of the index through the little fingers of one hand is worth 120 weeks when the value of the four fingers are added together. In the event of the loss of four fingers, however, the Industrial Commission requires that the petitioner receive the full 190 weeks of value assigned to the hand.

Amputation to the Arm

Section 8(e)(10) discusses arm amputations. If an injured worker has an amputation of the arm below the elbow, the Act mandates that the injury be compensated as a 100% loss of the involved arm. If the injury results in the amputation of the arm above the elbow, the petitioner is entitled to an additional 15 weeks over and above the 235 weeks assigned to the arm. In those instances where the injury results in the amputation of the arm at the shoulder joint, or so close to the shoulder joint that an artificial arm cannot be used, or results in the disarticulation of the arm at the shoulder joint, an additional 65 weeks is to be paid over and above the 235 weeks assigned to the arm.

Amputation to the Foot

Interestingly, there are no special requirements under the Workers’ Compensation Act for a partial or complete amputation of the foot. Section 8(e)(11) simply provides that a foot is worth 155 weeks.

Amputation to the Leg

Section 8(e)(12) provides that an injury resulting in the amputation of the leg below the knee shall be compensated as a 100% loss of use of the involved leg. If the accidental injury results in the amputation of the leg above the knee, the injured worker is entitled to an additional 25 weeks over and above the 200 weeks assigned to the leg. In the event that the accidental injury results in the amputation of the leg at the hip joint, or so close to the hip joint that an artificial leg cannot be used, or if it results in the disarticulation of the leg at the hip joint, the injured worker is entitled to an additional 75 weeks over and above the 200 weeks assigned to the leg.

Pay Permanency to Avoid Penalties and Attorney’s Fees

Amputation claims involve an unusual situation in workers’ compensation because the Workers’ Compensation Act provides specific, mandatory permanent partial disability values for different kinds of amputations. Beginning with Lester v. Industrial Comm’n, 256 Ill. App. 3d 520, 628 N.E.2d 191, 194 Ill. Dec. 694 (1st Dist. 1993), Illinois courts have held that failure to pay accrued permanent partial disability for amputation claims can be found to be unreasonable and vexatious conduct that entitles the petitioner to an award of penalties and attorney’s fees. Permanent partial disability begins to accrue immediately after temporary total disability ends. If you have an amputation claim, we recommend that you consider converting the petitioner’s rate from temporary total disability to permanent partial disability at the end of the period of TTD and pay the petitioner the mandatory number of weeks for the amputation as calculated under the Workers’ Compensation Act on a weekly basis until the amputation award has been paid in full. For example, if a petitioner had a complete amputation to an index finger, he would be entitled to 40 weeks of permanency for the complete loss of the finger. If you assume that the petitioner’s period of temporary total disability ends today with his successful return to work, you would then convert to the permanency rate and make weekly payments to the petitioner for the next 40 weeks, compensating him at the statutorily required 100% loss of use of the index finger. You are entitled to obtain a pro se settlement contract approval at any time during the process if the petitioner has completed medical treatment, has been released from medical care and is ready to conclude the case on the settlement contract.

The cases do not address whether failure to pay amputation permanency on a weekly basis as it accrues automatically amounts to unreasonable and vexatious conduct. Given that petitioner’s attorneys are interested in approaching cases from that angle to maximize monetary recovery, your best protection is to pay the amputation permanency as it accrues on a weekly basis in order to avoid any claim that the payments were delayed.

Credit

Section 8(e)(17) provides a credit for amputations that occurred before an industrial accident. If, before the time of the current industrial accident, the injured worker had an injury that resulted in the loss or partial loss by amputation of the hand, arm, thumb, fingers, leg, foot or toes, the loss or partial loss of the body part is required to be deducted from any award made for the subsequent injury. For example, if an injured worker previously had an amputation to the distal phalanx of a finger, and then had a subsequent injury to the finger that resulted in further amputation, the petitioner would only be entitled to 50% of the finger rather than 100% of the finger because the employer is entitled to a credit of 50% of a finger for the previous distal phalanx amputation. In other words, the Workers’ Compensation Act does not require the employer to pay permanency for amputation of a body part that was already amputated at the time of the industrial accident.

Permanent Total Disability

Section 8(e)(18) describes a series of situations where injured workers are automatically entitled to permanent total disability awards regardless of their ability to be retrained and return to a stable labor market. If an injured worker loses both hands, both arms, both feet, both legs, both eyes, or any combination of two of these categories of body parts, the injured worker is entitled to a permanent total disability award. This section requires 100% losses of the two body parts.

Maximum Rate for Permanency the Same as for Temporary Total Disability

It is common knowledge that the maximum rate for temporary total disability is higher than that for permanent partial disability. That is because the maximum rate for TTD is 133 1/3 % of the state’s calculated average weekly wage, while the maximum rate for PPD is 100% of the state’s calculated average weekly wage. In amputation cases, however, the Workers’ Compensation Act provides that the maximum permanency rate is the same as the maximum temporary total disability rate. Section 8(b)(4) of the Act provides the higher maximum rate in cases of amputation of a member or enucleation of an eye.

Changes and News at the Illinois Industrial Commission - Back to Table of Contents - Back to WC Index
Author: Kevin J. Luther, Rockford

Rod Blagojevich was installed as the new governor of the State of Illinois in January of 2003. After he took office, the existing chairman of the Industrial Commission, John Hallock, a Republican, was dismissed from his position. Governor Blagojevich thereafter appointed Dennis R. Ruth as the new chairman of the Illinois Industrial Commission on February 21, 2003.

Chairman Ruth practiced for many years representing claimants before the Industrial Commission in the St. Louis metro-east area. On May 15, 2001, Chairman Ruth was appointed as an arbitrator. Following his appointment as chairman of the Industrial Commission, immediate changes were made in the way that arbitrators are to handle cases at the trial level.

For the past several years, the Industrial Commission has evaluated arbitrators primarily on his or her ability to close cases. Many commented that this moved the Industrial Commission from a trial system to a pretrial system. Many arbitrators encouraged and “forced” pretrial conferences to get the parties to settle the claims. Many believed that this acted as an impediment to the arbitrators’ ability to try the cases.

Chairman Ruth has requested that the arbitrators change this custom and practice. It is alleged that arbitrators have been instructed to try at least 10-15 cases a month. The arbitrators have been instructed not to delay starting trials in lieu of holding pretrial conferences. According to Chairman Ruth, if parties are present and ready for trial, the arbitrator should immediately conduct those trials as opposed to making them wait until other pretrial conferences are conducted. Accordingly, it is now necessary more than ever that employers and their attorneys be ready to arbitrate the workers’ compensation claims when they are set for hearing.

On May 5, 2003, Governor Blagojevich also made two new appointments to the Industrial Commission. David R. Akemann, an assistant attorney general with the Illinois Attorney General, replaced Commissioner Gilgis as an employer representative on Panel B. Commissioner Akemann will review calls in Chicago, Aurora, and Springfield. Cases previously assigned to Commissioner Gilgis will be assigned to Commissioner Akemann.

James C. Serkland, an attorney who specialized in workers’ compensation for the firm of Serkland and Muelhausen of Chicago, replaced Commissioner Smart as a public representative on Panel B. He will handle calls in Chicago, Ottawa, Rockford, and Rock Island. Cases assigned to Commissioner Smart were reassigned to Commissioner Serkland. The terms of Commissioner Akemann and Commissioner Serkland will expire in January of 2007.

Accordingly, Panel A now consists of Commissioner Kinnaman (employee representative), Commissioner Rink (public representative), and Commissioner Stevenson (employer representative). Panel A will handle reviews from Joliet, Quincy, Waukegan, Collinsville, Mt. Vernon, Geneva, and Peoria. Panel B consists of Commissioner Sherman (employee representative), Commissioner Serkland (public representative), and Commissioner Akemann (employer representative). Panel B will review cases from Decatur, Galesburg, Urbana, Ottawa, Rockford, Rock Island, Aurora, and Springfield.

Effective June 16, 2003, Andrew Nalefski has been hired as an arbitrator with the Industrial Commission. He will handle the dockets formerly handled by Chairman Ruth. Arbitrator Nalefski holds a bachelor’s degree and master’s degree from Southern Illinois University at Edwardsville and a law degree from the University of Arkansas. He has concentrated his practice almost exclusively in the workers’ compensation field.

There were no substantive legislative changes in the spring of 2003 with respect to workers’ compensation. However, the legislature has approved an independent funding source for the Industrial Commission. Illinois now joins 45 other states around the country that pay for their workers’ compensation agencies through assessments, either on insurance premiums, benefits paid, payroll, etc.

Insurance companies will add a 1.5 percent surcharge to the workers’ compensation insurance policies that employers buy, while self-insured employers will pay a fee of 0.045 percent of the previous year’s payroll. Monies will be deposited in the Industrial Commission Operations Fund. It is believed that if this measure had not passed, the Industrial Commission would have had another round of budget cuts and layoffs. It is hoped that with this additional funding, the Industrial Commission will be able to hire eight new arbitrators and four new court reporters for the Industrial Commission. It is also hoped that eventually this funding will allow the Industrial Commission to modernize its filing procedures and retention and also implement electronic filing processes.

Chairman Ruth has also stated that he would like to take a look at the existing Industrial Commission Rules and modernize them. Again, it appears to be the chairman’s primary goal to allow parties who are ready for trial to have an arbitration at the earliest possible date and time. Currently, the chairman has stated that each arbitrator averages 5,200 cases and that the average amount of time for a workers’ compensation claim to get to trial is 33 months. The chairman would like to reduce the caseload per arbitrator and also to compress the average time it takes to get a matter to arbitration or trial.

The new venue assignments for arbitrators are as follows:

CHICAGO ONLY: Kathleen Hagan, Gilberto Galicia, Joseph Reichart, Brian Cronin, Joseph Prieto, Robert Williams, Edward Lee, Peter Akemann, Valerie Peiler, David Kane, and Robert Falcioni.

The downstate Illinois assignments are as follows:

Every six months, the Illinois Department of Employment Security publishes a statewide average weekly wages (SAWW). As a result of this calculation, the weekly benefit rates for Industrial Commission purposes have changed. For the time period of 1/15/03 to 7/14/03, the maximum temporary total disability rate is now $1,004.41, as is the maximum amputation or enucleation rate. The maximum permanent partial disability rate (if not an amputation or enucleation rate) is $542.17. For the period of 7/15/03 to 1/14/04, the maximum temporary total disability rate is $1,012.01, as is the maximum rate for PPD in the case of amputation or enucleation. The new minimum permanent total disability rate is $379.51, and the new maximum for death or permanent total disability claims is $1,012.01.

Case Law Update - Back to Table of Contents
Author: James M. Voelker, Peoria

Failure to Appeal from Decision on Remand Precludes Appellate Jurisdiction - Back to Table of Contents - Back to WC Index

Pace Bus Co. v. Industrial Comm’n (Schusse), 337 Ill. App. 3d 1066, 787 N.E.2d 234, 272 Ill. Dec. 419 (1st Dist. 2003). Pace sought review of the Industrial Commission’s decision awarding benefits. The circuit court reversed in part and remanded the case back to the Industrial Commission for additional findings. Pace then sought review of the original decision of the Commission but failed to review the decision made by the Commission on remand. The appellate court held that it had no jurisdiction over the matter because the original decision of the Commission was not a final and appealable order. Only the second decision of the Commission on remand was final and appealable. Pace should have appealed the decision on remand since an appeal from a final judgment draws in to issue all prior interlocutory orders which produced the final order.

Fall in Parking Lot Where Claimant Was Reimbursed for Expenses is Not Compensable - Back to Table of Contents - Back to WC Index

Joiner v. Industrial Comm’n (Will County Circuit Clerk), 337 Ill. App. 3d 812, 786 N.E.2d 627, 272 Ill. Dec. 88 (3d Dist. 2003). Claimant slipped and fell on loose gravel in a parking lot on the way to work and fractured her knee. The parking lot was not owned or maintained by the employer but the employer reimbursed employees for their expense to park in the lot. In denying benefits, the appellate court noted that Illinois courts have repeatedly held that under the “general premises rule” when an employee slips and falls at a point off the employer’s premises while traveling to or from work, the resulting injuries do not arise out of and in the course of the employment and are not compensable under the Act. The only exceptions are when the employee’s presence at the location of the accident was required in the performance of his duties or when the parking lot is “provided by” the employer. Here, the employer did not: own, operate or maintain the parking lot; lease any parking spaces therein for use by her employees; assign any parking spaces in the lot for use by her employees; tell any of her employees to park in that lot, or any other parking lot for that matter; or enter into any agreement with the lot’s owner regarding the parking fees that her employees would be charged. Reimbursement for the parking expense was not enough to warrant a finding of compensability.

Heart Attack Not Compensable - Back to Table of Contents - Back to WC Index

Twice Over Clean, Inc. v. Industrial Comm’n (Haulk), 337 Ill. App. 3d 805, 786 N.E.2d 1096, 272 Ill. Dec. 262 (3d Dist. 2003). Claimant testified that he was engaged in removing asbestos that had previously been collected into large bags, each of which weighed around 40 to 45 pounds. Later that evening, he had a heart attack. There was medical testimony for and against causation. The appellate court noted that it is well established that pre-existing heart disease will not preclude a workers’ compensation award for a heart attack where work-related stress contributed to the heart attack. However, one exception to this rule is when the heart disease is so far gone that any stress, even the most ordinary exertion, will bring on the heart attack. Doyle v. Industrial Comm’n, 86 Ill. 2d 544, 550, 427 N.E.2d 1223, 56 Ill. Dec. 677 (1981). The appellate court denied benefits relying on Sisbro before it was reversed by the Supreme Court. It held that whether the heart attack occurred at work or later was insignificant. Claimant’s own physician agreed that claimant was a heart attack waiting to happen and that claimant could have suffered a heart attack even while at rest. Since claimant’s condition had so deteriorated that his heart attack could have been caused by any normal activity, it was not compensable.

New Law - Both Parties to a Fight Cannot be Deemed Aggressors - Back to Table of Contents - Back to WC Index

Franklin v. Industrial Comm’n (Scott), 2003 Ill. App. LEXIS 689 (1st Dist. June 4, 2003). The Industrial Commission denied benefits to a claimant who was involved in an altercation with a co-worker. The court noted that generally, injuries arising from an assault by a co-worker at the workplace during work hours are compensable if the assault arose in the course of a dispute involving the conduct of the work. However, where the party seeking compensation was the aggressor, the party’s acts are not within the scope of employment and are not compensable. The Industrial Commission held that both parties to the fight were mutual combatants and denied benefits. The appellate court reversed and held that as a matter of law, there cannot be two aggressors. Only the initial aggressor is to be denied benefits. Thus, the case was remanded to the Industrial Commission for a finding of fact as to which party was the initial aggressor.

Supreme Court: Aggravation of Deteriorated Pre-Existing Condition Compensable - Back to Table of Contents - Back to WC Index

Sisbro, Inc. v. Industrial Comm’n (Rodriguez), 2003 Ill. LEXIS 776 (May 22, 2003). 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 pre-existing 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 pre-existing diabetic neuropathy.

The Illinois Supreme Court reversed the appellate court. It ruled that the decision of the Industrial Commission finding compensability was not against the manifest weight of the evidence. The evidence before the Commission was enough for it to have concluded that the occupational activity was a causative factor in hastening claimant’s contraction of Charcot. Further, the court explained that the “Normal Daily Activity Exception” applies where the pre-existing condition alone was the cause of the injury.

Wage Differential Commences on Date of New Employment - Back to Table of Contents - Back to WC Index

Payetta v. Industrial Comm’n (Graber Concrete Pipe Co.), 791 N.E.2d 682, 274 Ill. Dec. 590 (2d Dist. 2003). Petitioner lost his right arm in an accident while working for respondent. At the time of trial the parties stipulated that petitioner had received 147 weeks of TTD and 114 weeks of PPD. The Industrial Commission awarded a wage differential under section 8(d)(1) of the Act and gave a credit for 114 weeks of PPD paid for the statutory amputation. Petitioner appealed and claimed he was entitled to the wage differential award from the date of the injury in addition to the TTD paid. The appellate court rejected petitioner’s argument and affirmed the award of the Commission which started the wage differential payments on the date petitioner began working. A claimant is not entitled to TTD and wage differential payments for the same time period.

Concurrent Employment Not Included During Seasonal Lay-Off - Back to Table of Contents - Back to WC Index

Flynn v. Industrial Comm’n (Utica Twp.), 791 N.E.2d 1301, 274 Ill. Dec. 890 (3d Dist. 2003). Claimant suffered an eye injury while employed by the respondent. The Commission found an average weekly wage of $56 and awarded wage differential benefits of $362.36 (the statutory minimum). In addition to working for respondent, petitioner was employed as a seasonal truck driver for a construction company. Claimant sought to include the truck driving wages under Jacobs v. Industrial Comm’n, 269 Ill. App. 3d 444, 646 N.E.2d 312, 206 Ill. Dec. 945 (2d Dist.1995). The appellate court ruled that Jacobs was limited to the situation where the concurrent employment was intended to supplement the other wages. In this case, petitioner’s work for respondent was a substitute for his seasonal work. Therefore, the seasonal employment was not included in the average weekly wage calculation.

Unexplained Fall Not Compensable - Back to Table of Contents - Back to WC Index

Builders Square, Inc. v. Industrial Comm’n (Peters), 791 N.E.2d 1308, 274 Ill. Dec. 897 (3d Dist. 2003). The decedent fell while working at Builders Square and died shortly thereafter. The treating medical evidence showed the decedent’s death was caused by a hematoma and subarachnoid hemorrage most likely caused by trauma. The respondent’s examining physician felt the fall was idiopathic. There was no direct evidence as to the cause of the fall. The Industrial Commission reversed the arbitrator and ruled that petitioner failed to prove an accident and a causal connection between the decedent’s work and her death. The appellate court affirmed. It noted that the label “unexplained fall” is a misnomer. It held that a claimant must present evidence supporting a reasonable inference that the fall stemmed from an employment-related risk. A pure unexplained-fall could not be compensable given Illinois’ rejection of the Positional Risk Doctrine. In this case, petitioner failed to present evidence supporting an inference that the decedent’s unexplained fall arose out of her employment.

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