Recent Legislative Changes

 

Amendment to Section 8.2 of the Illinois Workers Compensation Act

Creates Private Cause of Action to Collect Interest

 

Background

On November 27, 2018, the Illinois General Assembly voted to override Governor Rauner’s veto of SB904, giving medical providers a private cause of action to sue and recover the 1% interest for late payment of medical bills.

 

By way of background, when the Illinois Workers’ Compensation Act was amended in 2006, the amendments called for the prompt payment of medical bills and allowed medical providers to recover 1% interest each month bills go unpaid.  Under the 2011 amendments to the Act, an employer or carrier has 30 days from the receipt of all necessary data elements to pay medical bills.  If the bill is not paid within the 30 days, a provider is entitled to 1% interest.  SB904 made no changes to the payment requirements, but instead changed how a provider can recover unpaid interest.

 

In a number of recent Appellate Court cases, the Appellate Court held a medical provider did not have a private cause of action to recover the 1% interest payable under the fee schedule, dismissing the complaints filed by the providers against employers and insurance carriers.  In response to those rulings, the medical community in Illinois went to the General Assembly and asked for the Workers’ Compensation Act to be amended giving them a private cause of action.

 

Amendments to Section 8.2

SB904 amends Section 8.2. of the Act and gives providers the private cause of action and allows a provider to sue an employer or insurance carrier in circuit court to recover the 1% interest if not paid by the employer or carrier.  The cause of action will be separate from the underlying workers’ compensation claim.  The injured worker and his attorney are not responsible for or required to recover interest for the provider at an arbitration proceeding.

 

Shortly after the passage of SB904, a trailer bill, HB3452, passed out of the General Assembly to clarify how SB904 applies.  HB3452 clarified the private cause of action was limited only to the recovery of interest.  The provider cannot seek payment of the underlying bill as part of its claim. Section 8.2(d)(4) reads as follows:

 

“If the employer or its insurer fails to pay interest within 30 days after payment of the bill required pursuant to paragraph (3), the provider may bring an action in circuit court for the sole purpose of seeking payment of interest pursuant to paragraph (3) against the employer or its insurer responsible for insuring the employer’s liability pursuant to item (3) of subsection (a) of Section 4. The circuit court’s jurisdiction shall be limited to enforcing payment of interest pursuant to paragraph (3). Interest under paragraph (3) is only payable to the provider. An employee is not responsible for the payment of interest under this Section. The right to interest under paragraph (3) shall not delay, diminish, restrict or alter in any way the benefits to which the employee or his dependents are entitled under this Act.

 

The changes made to this subsection (d) by this amendatory Act of the 100th General Assembly apply to procedures, treatments, and services rendered on and after the effective date of this amendatory Act of the 100th General Assembly.” 820 ILCS 305/8.2

 

It should be noted that SB904 also added language to Section 8.2(d)(3), stating that interest can accrue not only on bills that are not paid within 30 days of receipt (assuming all the “data elements” were provided), but also if the employer/insurer fails to issue an explanation of benefits setting forth a basis for full or partial denial of a medical bill.  Section 8.2a was amended to essentially apply the changes noted above to claims filed electronically, including setting forth rules for the providers’ compliance with regard to request for medical records to support the bills in question, and allowing the Department of Insurance to impose fines for up to $1,000.00 per incident and $10,000.00 per year for failure of an employer/insurer to “comply with the electronic claims acceptance and response process.” 820 ILCS 305/8.2a

 

Ramifications

The adoption of SB904 will give rise to a number of questions and creates the potential for additional litigation.  Because the medical provider now has a private cause of action separate from the workers’ compensation cause of action pending before the Illinois Workers’ Compensation Commission, employers and carriers need to recognize settlement of medical bills and the workers’ compensation claim with the injured worker will not extinguish the medical provider’s claim.  If you receive an invoice for the payment of interest and you had all necessary data elements and did not issue payment within 30 days of receiving the bill, you then owe the interest to the provider.

 

Points to Remember

    • A claim for payment of medical bills must still contain “substantially all the required data elements necessary to adjudicate the bill.”
    • The employer/insurer still has the right to deny payment of a bill if the “required data elements” are not provided, or if liability for the bill is being denied for a  legitimate reason (e.g. denial of work accident, treatment in question is not reasonable, necessary or causally related to the work accident, treatment was rendered by a provider beyond the first two medical providers/chains of referral), but must provide a written Explanation of Benefits (“EOB”) setting forth the basis for denial of the bill and request for additional “data elements” within 30 days of receipt of the bill.
    • If the provider has met all the “data elements” requirements and there is no reasonable basis for denial of the bill or treatment in question, failure to pay the bill within 30 days of receipt shall incur interest at 1% per month, and the interest is due within 30 days of payment of the bill.
    • Doing nothing for more than 30 days after receipt of a medical bill will only invite the imposition of 1% interest per month, and a possible lawsuit by the provider if the pattern is repeated by the employer/insurer. Be sure to evaluate the bills and pay promptly if the charges are deemed compensable, or issue an EOB to the medical provider if the charges are deemed non-compensable or if further information is required.
    • It is still the purview of the Illinois Workers’ Compensation Commission to decide issues of accident, reasonableness and necessity of treatment, and causal relationship of the treatment to the work accident.
    • The circuit court’s role is limited to enforcement of payment of the interest. In our view, this is similar to the court’s role when a Section 19(g) Petition is filed by an employee for non-payment of an award or settlement; the Appellate Court has held that in that circumstance, the circuit court cannot substitute its judgment on the merits of the case with that of the Commission. The only question to ask is whether proper payment has been made.
    • Medical providers do not have to rely on the petitioner’s attorney to seek payment of interest at trial, as they now have a separate cause of action to seek the interest.
    • Employers/Insurers should make prompt payment of medical bills for undisputed medical treatment, when all necessary documentation has been provided, in order to avoid the time, effort and costs associated with defending claims for interest in circuit court.
    • Special attention will need to be given to any potential claims for interest when settling a workers’ compensation claim, especially when resolving disputed medical treatment issues.
    • This new provision went into effect on November 27, 2018 and only applies to medical treatment rendered to the injured employee on or after that date. While the right of the medical provider to seek payment of interest for the late payment of medical bills pre-dated this amendment, the medical provider cannot seek payment of interest for pre-November 27, 2018 medical treatment by filing suit in circuit court.

 

The attorneys at Ganan & Shapiro, P.C. are aware of the changes, ready to answer any questions you have and will assist you in insuring compliance with the Act and the recent amendment to Section 8.2.  Please contact any one of us for guidance if you have any questions or comments.

 

  Michelle L. LaFayette   –   James M. Byrnes

 

Michelle LaFayetteJim Byrnes

 

 

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