WCLA MCLE Two For One: 1) Settlement Contracts: What Does This Mean? “The employer has X has not _ paid all medical bills”; and 2) Recent Controversial Utilization Review Case: Chamorro v. Workforce Staffing Thursday March 23, 2009 JRTC Assembly Hall at Chicago, IL 12 noon to 1:00 pm 1 Hour General MCLE Credit

Settlement Contracts What does it mean when the box indicating all medical bills on the front of a settlement contract has been checked off? Old Rule 23 case: Butler Supply Company v. Industrial Commission, No WC, filed June 9, 1995: “The issue is whether the settlement agreement obligates the employer to pay outstanding medical expenses in addition to the lump sum settlement amount…The printed section represents that the employer has paid all medical bills as of the execution of the contract …There was no allocation of the settlement amount for past medical expenses.” 19(g) judgment against Respondent affirmed.

Settlement Contracts Kinn v. Prairie Farms/Muller Pinehurst, 386 Ill.App.3d 728; 859 N.E.2d 99; 307 Ill. Dec. 99 (2007): “Has Not” box checked and below states “SEE TERMS” which say all medical bills are Petitioner’s responsibility Unpaid bill discovered and about 18 months later Petitioner files Circuit Court complaint to rescind settlement contract based on unilateral and mutual mistake and fraud Complaint dismissed and Appellate Court affirms “By no amount of tortured logic can an express representation that all bills have not been paid be turned into an implicit representation that all bills have been paid.” “Thus (Respondent) can in no way be said to have represented that it intended to pay any additional medical bills.”

Settlement Contracts Hagene v. Derek Polling Construction No , filed 2/24/09 Arbitrator Dibble approved settlement contract on July 5, 2005 “The first page contains a section called ‘Medical Expenses.’ In that section, there is a space to place a check on a line indicating whether the employer has or has not paid all the medical bills. Here, the employer checked that it had paid all medical bills. Following that, there is an instruction to ‘list unpaid medical bills in the space below.’ That space is empty.” Terms of settlement: “The Petitioner expressly represents and agrees that prior to the approval date of this contract, the Petitioner submitted to the Respondent all reasonable, necessary and causally related medical and hospital bills and that the Respondent has fully satisfied the same prior to the approval date of this contract.” About $20, 00 in unpaid medical bills Petitioner files 19(g) Application for Entry of Judgment 1/11/2007

Hagene v. Derek Polling Construction Circuit Court dismisses 19(g) finding that Respondent’s obligation had been “satisfied of record” Petitioner appeals to Appellate Court Appellate Court: intent is determined by looking at language and circumstances; circumstances involve WC Act purpose of which is to “promote the general welfare.” Respondent’s obligation flows from WC Act not just language of contract “Unlike the indicated dispute over the length of TTD here, the settlement agreement does not indicate a dispute regarding whether any of the bills were causally related.” “Essentially, the Respondent wants us to decide this case in a vacuum, looking only to the four corners of the document…Fortunately, we do not find ourselves to be so constrained by IL law.”

Hagene v. Derek Polling Construction Settlement was for 30% loss of use of the arm: “That was the full extent of the settlement, thus making it clear that no part of the settlement was for past unpaid medical bills related to the incident.” “A waiver of important statutory rights must be explicit;” compared to waiver of lien rights in Gallagher, 226 Ill.2d 208 “When we consider the entire contract in the context of all surrounding circumstances, we conclude that the parties did not intend to discharge the Respondent’s statutory obligation to pay the Petitioner’s past related medical bills. What is clear from the surrounding circumstances is that the settlement was premised on the understanding that the Respondent had in fact paid all outstanding medical bills to the date of the settlement as indicated in the contract recital.” “We reverse the order of the trial court dismissing the Petitioner’s application for judgment in accordance with Section 19(g) of the Workers’ Compensation Act.” Remanded.

Utilization Review “Section 8.7. Utilization review programs.(a) As used in this Section:"Utilization review" means the evaluation of proposed or provided healthcare services to determine the appropriateness of both the level of healthcare services medically necessary and the quality of health care services provided to a patient, including evaluation of their efficiency, efficacy, and appropriateness of treatment, hospitalization, or office visits based on medically accepted standards. The evaluation must be accomplished by means of a system that identifies the utilization of health care services based on standards of care or nationally recognized peer review guidelines as well as nationally recognized evidence based upon standards as provided in this Act. Utilization techniques may include prospective review, second opinions, concurrent review, discharge planning, peer review, independent medical examinations, and retrospective review (for purposes of this sentence, retrospective review shall be applicable to services rendered on or after July 20, 2005).Nothing in this Section applies to prospective review of necessary first aid or emergency treatment.”

Utilization Review “8.7(i) A utilization review will be considered by the Commission, along with all other evidence and in the same manner as all other evidence, in the determination of the reasonableness and necessity of the medical bills or treatment. Nothing in this Section shall be construed to diminish the rights of employees to reasonable and necessary medical treatment or employee choice of health care provider under Section 8(a) or the rights of employers to medical examinations under Section 12.” See WCLA MCLE presentation from

Utilization Review Chamorro v. Workforce Staffing 07WC038033, filed 8/24/07, Arbitrator Black, DA 7/31/07 32 year old machine operator claims back injury lifting platform Initial treatment at Concentra including PT; released to RTW light duty; then full duty IME Dr. Wehner 9/6/07 & 2/5/08 Petitioner takes up treatment with Los Quiropracticos and Dr. Padron, referred to neurologist Surveillance video of Petitioner UR report Dr. Porter of Elite Physicians, Ltd.

Chamorro v. Workforce Staffing 09 IWCC 0055 Unanimous IWCC panel (Gore, DeMunno, Basurto) affirms & adopts “The Respondent’s proposed findings assert that the Arbitrator’s finding regarding causation should be based, in part, on the utilization review report. However, pursuant to section 8.7(a) and 8.7(i) of the Act, a utilization review will be considered in the determination of the reasonableness and necessity of the medical bills and treatment. The plain language does not include words like causation and causal connection. Therefore a finding regarding causation based on UR would be contrary to legislative intent. Accordingly the Arbitrator shall not consider the UR report on the issue of causal relationship.”

Chamorro v. Workforce 09 IWCC 0055 “The Respondent's proposed findings rely heavily on utilization review on the issues of medical bills and treatment. The Respondent's proposed findings characterize utilization review as scientific evidence. However the plain language Section 8.7(a) through Section 8.7(j) of the Act does not include words like scientific evidence, extraordinary evidence, or super evidence. Therefore relying upon utilization review as scientific evidence would be contrary to legislative intent. Accordingly utilization review will be considered by the Arbitrator, along with all other evidence and in the same manner as all other evidence, in the determination of the reasonableness and necessity of the medical bills or treatment.” “The Petitioner did not object to the Respondent's utilization review report. However admissibility does not equate to weight or sufficiency. In this case the utilization review is not entirely impartial or non partisan.”

Chamorro v. Workforce 09 IWCC 0055 “The Arbitrator finds that the utilization review is not persuasive.” “The medical fee schedule mathematical analysis (PX7) of Dr. Vargas and Los Quiropracticos was agreed to by the Respondent. Therefore, the Arbitrator finds that the Respondent shall pay the outstanding balance of Dr. Vargas and Los Quiropracticos in the amount of $ 5, The medical fee schedule mathematical analysis (PX6) of Dr. Padron was agreed to by the Respondent. Therefore, the Arbitrator finds that the Respondent shall pay the outstanding balance of Dr. Padron in the amount of $ ” “The Respondent's proposed findings assert that the Arbitrator's finding regarding temporary total disability should be based, in part, on the utilization review report. However the plain language of Section 8.7(a) and Section 8.7(i) of the Act does not include the words temporary total disability. Therefore a finding regarding temporary total disability based upon utilization review would be contrary to legislative intent. Accordingly the Arbitrator shall not consider the utilization review report on the issue of temporary total disability.” “The Arbitrator finds that the Respondent shall authorize and pay for an examination by a neurologist.”

Take-Aways UR not admissible as hearsay? UR not to be used for causal connection/TTD? UR not super evidence? Arbitrator required to consider UR? Arbitrator required to determine whether UR persuasive? Penalties?