We Mean Business. Illinois Business.
 
 

Illinois' workers' comp agency numbers, policies contradict research institute
By KERRY L. SMITH

   Although a national workers' compensation think tank's statistics show that Illinois employers pay considerably more per claim dollar than other U.S. states, the state agency that governs the system says otherwise, pointing out that the nature of the injury - and the state's primary employment base - are key factors.

   The two entities - the Workers Compensation Research Institute and the Illinois Industrial Commission - offer differing interpretations of raw data tracking the state's workers' compensation claims over the past several years.

   The Workers Compensation Research Institute performed a detailed study of 12 U.S. states, tracking the average medical payment per workers' compensation claim from 1996 through 2001. It identified where workers' compensation medical dollars go and how costs and utilization differ across 12 large states.

   The WCRI study yielded the following conclusion: Illinois' average medical payment per claim of $8,277 ranked it as the third most costly state of the 12, surpassed only by Tennessee and Texas.

   But the WCRI did not take into account the states' employment mix when comparing numbers of injuries resulting in workers' comp claims filed in each state, according to Illinois Industrial Commission officials.

   The IIC is the state agency governing Illinois' workers' compensation system. As of Jan. 1, its name will change to the Illinois Workers' Compensation Commission.

   The fact that Illinois has had a heavy industrial base of employment, according to IIC chairman Dennis Ruth, translates into more serious injuries and higher costs than neighboring states that have a heavier emphasis on retail or other non-industrial sectors.

   "The 12-state WCRI study reported that the average workers' comp claim was 38 percent higher in Illinois," Ruth said, "but it also found that the mix of injuries varies and Illinois had a higher severity of accidents. The study did not offer a comparison of similar injury claims."

   Ruth said the WCRI study also did not take into account that Illinois is a high-wage state.

   "We've got the sixth highest wages, but our workers' compensation premium rates are only the 19th highest," he said.

   The fact that Illinois is a high-wage-paying state should be considered when digesting the study, according to Ruth. The study concluded that among the claims involving more than seven lost work days, the median rate of annual increase in medical payments was 10 percent; in Illinois that increase totaled 11.3 percent, which Ruth said contradicts the WCRI's claim that Illinois' average five-year period claim increase was 38 percent.

   Richard Victor, executive director of the WCRI, said that of the 12 states studied, Illinois also ranked unfavorably in the category of how long it took from the notice of injury to the first payment. He noted that the degree of attorney involvement was noticeably higher in Illinois than in the other states.

   "The system in Illinois is designed as if for the benefit of attorneys," he said. "Given a lack of written permanent partial disability standards, both sides - the employer and the injured worker - often rely on attorneys and published appeal decisions when determining the value of permanency benefits for settlement purposes."

   Victor said that since in Illinois only attorneys can appear before adjudicators at formal proceedings, compromise lump-sum settlements are common and that the IIC does not enforce employer and insurer performance.

   "As a result, in a majority of indemnity claims, both sides need attorneys to navigate the system," he said.

   Ruth disagreed. "When the industry is talking about attorney involvement, it is speaking of the attorneys representing injured workers, not the employers' attorneys," said Ruth. "Cases with attorneys have higher awards, but those who conduct studies like this one aren't comparing the same types of injuries. People more severely injured are more likely to get attorneys to represent them."

   Victor criticized Illinois for not keeping better workers' compensation numbers. He said the IIC compiles few measures of overall system performance.

   "The IIC has no accurate count of total injury report filings and does not collect data on indemnity claims, timeliness of injury reporting and initial payment and denials," said Victor. "As a result, public policymakers have to rely much more heavily on what participants say about system performance than on the numerical data."

   The IIC's annual report for fiscal year 2003 is available at www.iwcc.il.gov. It provides claims statistics on page 23. On page 18, it lists statistics on timeliness of Illinois claims reporting and of initial payments.