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Illinois' 2011 workers comp reforms result in 'incremental savings'

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Illinois’ 2011 workers compensation reforms have led to “incremental savings” of medical costs, one employer said during a state House Labor and Commerce Committee hearing Wednesday.

“Since 2011 we’ve been highly active … in seeking to use the tools” provided by the 2011 reforms, Mark Flannery, Peoria, Illinois-based corporate counsel at Caterpillar Inc., said during the hearing in Springfield, Illinois.

As a result, “we’ve achieved some incremental savings on the medical side,” Mr. Flannery said. “Virtually none on the indemnity side … Illinois bucks the national trend. If you look nationally or regionally, medical would be more than 50% of the total cost of claims.”

In Illinois, indemnity cost makes up 51% and medical makes up 49%, he said, referencing the National Council on Compensation Insurance Inc.’s 2014 Illinois State Advisory Forum.

Illinois reforms passed in 2011 include a 30% reduction in the state’s workers comp medical fee schedule, a requirement that comp arbitrators use the American Medical Association Guides to the Evaluation of Permanent Impairment when determining disability ratings, establishment of workers comp-specific medical provider networks and requiring medical utilization reviews.

“We use (American Medical Association) ratings as a matter of course … in every case where they apply,” Mr. Flannery said. “We use utilization review as a matter of course. Any time we see treatment we have concerns or questions about, we refer it out and get that reviewed. When fee schedule changes or enactments or regulatory moves have been made, we’ve applied those changes promptly.”

Illinois is still in the process of improving the state’s workers comp system, Jeffrey Junkas, assistant vice president of state government relations for the Chicago-based Property Casualty Insurers Association of America, said in a statement about the hearing.

“When the reform bill was signed in 2011, it was noted that the savings associated with legislation will take time to appear,” Mr. Junkas said. “The Illinois system is not perfect, nor is there a perfect system in any state. Illinois needs to continue to improve its system to maintain an appropriate balance for all stakeholders including requiring the workplace to be the primary cause of the injury.”

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