January 07, 2019

IWCA Amendments Create New Obligations/Liability for Employers

January 07, 2019


Amendments to the Illinois Workers’ Compensation Act create new obligations for the processing of medical bills by employers, administrative penalties for non-compliance, and a statutory right for medical providers to file a circuit court action to collect interest at 1% per month on unpaid medical bills.  These changes apply to medical treatment rendered on and after the effective date of the amendments or November 27, 2018.

Under the new Act, the employer must provide written notification to a medical provider in the form of an explanation of benefits (EOB) setting forth the basis for the denial of payment or describing any additional “necessary data elements” for processing within 30 days of the receipt of a bill.  The Act also provides that a medical provider shall receive from the employer interest at 1% per month in three instances:

  1. the provider has not received payment within 30 days of submission of a “statutorily compliant” bill — one containing substantially all required data elements necessary to process the bill;
  2. the provider has not been issued an EOB; or,
  3. a portion of the bill has been paid that does not satisfy liability under the Act.

The employer must pay the interest no later than 30 days after payment of the bill.

The new Act gives a medical provider the means of enforcement: the right to bring a circuit court action against the employer to recover the payment of interest.  However, the circuit court’s jurisdiction is limited to determining the amount of statutory interest.

An employer is subject to an administrative penalty of $1,000.00 per violation, subject to a cap of $10,000.00 per calendar year, for failing to comply with electronic claims acceptance and response processes as will be formulated by the Department of Insurance. Processes for compliance will soon issue and offer guidance.

These changes substantially impact the processing of medical bills in workers’ compensation claims.  Rules issued shortly detailing the electronic claims process and EOBs should offer guidance.

Best Practices to Avoid Interest and Administrative Penalties

1.Identify a designee of the employer for the processing of medical expenses.

2. Request a signed authorization from the injured worker permitting the employer to secure medical records and bills.

3. Record the date any bill is received.

4. Bill Payment:

  • If the bill is statutorily compliant, issue payment at the negotiated rate or the lesser of actual charge or Fee Schedule submission within 30 days of receipt.
  • If a bill received is not statutorily compliant, or no medical records are submitted with the bill, promptly request any required data elements necessary to process the bill for payment and records describing the treatment resulting in the bill. Issue payment within 30 days once the bill is statutorily compliant.
  • In either case, whether you are paying the bill or not, issue an EOB.

5. If the claim is disputed, promptly issue an EOB notifying the provider submitting a bill of the basis for disputing liability.

6. When resolving a claim via settlement with unpaid medical expenses at issue, be mindful the settlement does not close out a medical provider’s right to a civil action for the payment of interest. Thus, settlement language must clearly set forth the employer’s liability—be it payment of medical expenses and statutory interest or disputing unpaid medical expenses.

Please contact any of our attorneys at 312-855-1105 if you have questions about these amendments and the impacts they may have on your business. Our civil department is well versed in civil litigation of medical expenses/interest and available to address those inquiries.  Please contact Rachel Nevarez at 312-596-4965, rsnevarez@wmlaw.com, to discuss civil litigation matters.

If you would like to view the amendments in detail, please click the following links to view SB 904 and HB 3452.