AIA cites study in criticizing state's WC system

Rough Notes, Feb 1997

The American Insurance Association (AIA) says a study released recently by the Workers Compensation Research Institute confirms the AIA's contention that the Illinois workers compensation system is too expensive because of excessive attorney involvement and lack of medical cost containment measures. According to Frederick B. McGarvey, the AIA's Midwest regional vice president, "The costs of treating injured workers in Illinois are 80% higher than the medical costs for treating similar injuries and illnesses that are not work-related."

The AIA listed the following conclusions of the study:

Average medical charges in Illinois are higher compared with those in most states and with national benchmarks.

The Illinois statute mandates or authorizes few of the medical cost containment strategies common to other states.

The system is designed "as if for the benefit of attorneys." In a majority of indemnity claims, both sides need attorneys to navigate the system.

Adjudication delay is the product of lack of preparation by either side, use of depositions, and large adjudicator case loads.

The executive vice president of the Management Association of Illinois, Jay Shattuck, also cited the study in calling for reform. "The findings in this study are in line with why the Illinois business community has been pushing for true reform by the General Assembly. Restructuring the system will reduce the use of lawyers, and workers should be allowed to be directed to a managed care network to reduce skyrocketing medical costs."