Illinois Still Seeing Impact of 2011 Workers’ Compensation Reform Law, Says WCRI Study

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This WCRI study can help policymakers and other system stakeholders interested in the Illinois workers’ compensation system identify current cost drivers and emerging trends for a wide variety of workers’ compensation cost measures.

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The average total cost per workers’ compensation claim in Illinois decreased 6.4 percent since 2010, but remained higher than most of the 17 other states studied in a recent report, CompScope™ Benchmarks for Illinois, 17th Edition, by the Workers Compensation Research Institute (WCRI).

“The 6.4 percent decrease mainly reflects the impact of the 30 percent reduction in the fee schedule rates for all medical services, which took effect under 2011’s Illinois House Bill 1698,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “Despite this decrease, the average total cost per claim in Illinois was 21 percent higher than the total cost per workers’ compensation claim in the median WCRI study state for 2013 claims evaluated through early 2016.”

Indemnity benefits per workers’ compensation claim were also higher in Illinois than in the typical state, as were medical payments per claim. The indemnity benefit finding reflected higher wages for injured workers, longer duration of temporary disability, and more frequent and costly permanent partial disability (PPD)/lump-sum settlements, WCRI found. Higher prices for, and utilization of, professional services led to Illinois’ higher-than-typical medical payments per claim, according to WCRI’s study, except for payments involving evaluation and management services.

“Indemnity benefits were the largest component of total workers’ compensation costs in Illinois, accounting for 44 percent of all paid dollars for claims originating in 2013, and 49 percent of all paid dollars dating back to claims with injuries in 2011 and payments by 2016,” said Tanabe.

The following are among the study’s other findings:

  • Litigation expenses per claim grew faster in Illinois when compared with the other 17 states WCRI studied.
  • In Illinois, 42 percent of workers’ compensation claims involved defense attorneys, if the injured worker had seven-plus days of lost time—a higher rate of defense attorney involvement than in all other states WCRI examined.
  • Thirty-three percent of Illinois claims had at least one medical-legal expense vs. 24 percent in the typical study state.

To learn more about this study or how to purchase a copy, visit https://www.wcrinet.org/reports/compscope-benchmarks-for-illinois-17th-edition.

The Cambridge-based WCRI is recognized as a leader in providing high-quality, objective information about public policy issues involving workers' compensation systems.

ABOUT WCRI:

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI's diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand.

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Andrew Kenneally
WCRI
+1 617-661-9274 x 257 Ext: 257
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Workers Compensation Research Institute - WCRI
since: 06/2011
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