SB0162eng 99TH GENERAL ASSEMBLY

SB0162 Engrossed LRB099 03387 HEP 23395 b

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Workers' Compensation Act is amended by changing Sections 1, 8.1b, 8.2a, 14, and 25.5 and by adding Sections 14.2, 14.3, and 14.4 as follows:

(820 ILCS 305/1) (from Ch. 48, par. 138.1)

Sec. 1. This Act may be cited as the Workers' Compensation Act.

(a) The term "employer" as used in this Act means:

1. The State and each county, city, town, township, incorporated village, school district, body politic, or municipal corporation therein.

2. Every person, firm, public or private corporation, including hospitals, public service, eleemosynary, religious or charitable corporations or associations who has any person in service or under any contract for hire, express or implied, oral or written, and who is engaged in any of the enterprises or businesses enumerated in Section 3 of this Act, or who at or prior to the time of the accident to the employee for which compensation under this Act may be claimed, has in the manner provided in this Act elected to become subject to the provisions of this Act, and who has not, prior to such accident, effected a withdrawal of such election in the manner provided in this Act.

3. Any one engaging in any business or enterprise referred to in subsections 1 and 2 of Section 3 of this Act who undertakes to do any work enumerated therein, is liable to pay compensation to his own immediate employees in accordance with the provisions of this Act, and in addition thereto if he directly or indirectly engages any contractor whether principal or sub-contractor to do any such work, he is liable to pay compensation to the employees of any such contractor or sub-contractor unless such contractor or sub-contractor has insured, in any company or association authorized under the laws of this State to insure the liability to pay compensation under this Act, or guaranteed his liability to pay such compensation. With respect to any time limitation on the filing of claims provided by this Act, the timely filing of a claim against a contractor or subcontractor, as the case may be, shall be deemed to be a timely filing with respect to all persons upon whom liability is imposed by this paragraph.

In the event any such person pays compensation under this subsection he may recover the amount thereof from the contractor or sub-contractor, if any, and in the event the contractor pays compensation under this subsection he may recover the amount thereof from the sub-contractor, if any.

This subsection does not apply in any case where the accident occurs elsewhere than on, in or about the immediate premises on which the principal has contracted that the work be done.

4. Where an employer operating under and subject to the provisions of this Act loans an employee to another such employer and such loaned employee sustains a compensable accidental injury in the employment of such borrowing employer and where such borrowing employer does not provide or pay the benefits or payments due such injured employee, such loaning employer is liable to provide or pay all benefits or payments due such employee under this Act and as to such employee the liability of such loaning and borrowing employers is joint and several, provided that such loaning employer is in the absence of agreement to the contrary entitled to receive from such borrowing employer full reimbursement for all sums paid or incurred pursuant to this paragraph together with reasonable attorneys' fees and expenses in any hearings before the Illinois Workers' Compensation Commission or in any action to secure such reimbursement. Where any benefit is provided or paid by such loaning employer the employee has the duty of rendering reasonable cooperation in any hearings, trials or proceedings in the case, including such proceedings for reimbursement.

Where an employee files an Application for Adjustment of Claim with the Illinois Workers' Compensation Commission alleging that his claim is covered by the provisions of the preceding paragraph, and joining both the alleged loaning and borrowing employers, they and each of them, upon written demand by the employee and within 7 days after receipt of such demand, shall have the duty of filing with the Illinois Workers' Compensation Commission a written admission or denial of the allegation that the claim is covered by the provisions of the preceding paragraph and in default of such filing or if any such denial be ultimately determined not to have been bona fide then the provisions of Paragraph K of Section 19 of this Act shall apply.

An employer whose business or enterprise or a substantial part thereof consists of hiring, procuring or furnishing employees to or for other employers operating under and subject to the provisions of this Act for the performance of the work of such other employers and who pays such employees their salary or wages notwithstanding that they are doing the work of such other employers shall be deemed a loaning employer within the meaning and provisions of this Section.

(b) The term "employee" as used in this Act means:

1. Every person in the service of the State, including members of the General Assembly, members of the Commerce Commission, members of the Illinois Workers' Compensation Commission, and all persons in the service of the University of Illinois, county, including deputy sheriffs and assistant state's attorneys, city, town, township, incorporated village or school district, body politic, or municipal corporation therein, whether by election, under appointment or contract of hire, express or implied, oral or written, including all members of the Illinois National Guard while on active duty in the service of the State, and all probation personnel of the Juvenile Court appointed pursuant to Article VI of the Juvenile Court Act of 1987, and including any official of the State, any county, city, town, township, incorporated village, school district, body politic or municipal corporation therein except any duly appointed member of a police department in any city whose population exceeds 500,000 according to the last Federal or State census, and except any member of a fire insurance patrol maintained by a board of underwriters in this State. A duly appointed member of a fire department in any city, the population of which exceeds 500,000 according to the last federal or State census, is an employee under this Act only with respect to claims brought under paragraph (c) of Section 8.

One employed by a contractor who has contracted with the State, or a county, city, town, township, incorporated village, school district, body politic or municipal corporation therein, through its representatives, is not considered as an employee of the State, county, city, town, township, incorporated village, school district, body politic or municipal corporation which made the contract.

2. Every person in the service of another under any contract of hire, express or implied, oral or written, including persons whose employment is outside of the State of Illinois where the contract of hire is made within the State of Illinois, persons whose employment results in fatal or non-fatal injuries within the State of Illinois where the contract of hire is made outside of the State of Illinois, and persons whose employment is principally localized within the State of Illinois, regardless of the place of the accident or the place where the contract of hire was made, and including aliens, and minors who, for the purpose of this Act are considered the same and have the same power to contract, receive payments and give quittances therefor, as adult employees.

3. Every sole proprietor and every partner of a business may elect to be covered by this Act.

An employee or his dependents under this Act who shall have a cause of action by reason of any injury, disablement or death arising out of and in the course of his employment may elect to pursue his remedy in the State where injured or disabled, or in the State where the contract of hire is made, or in the State where the employment is principally localized.

However, any employer may elect to provide and pay compensation to any employee other than those engaged in the usual course of the trade, business, profession or occupation of the employer by complying with Sections 2 and 4 of this Act. Employees are not included within the provisions of this Act when excluded by the laws of the United States relating to liability of employers to their employees for personal injuries where such laws are held to be exclusive.

The term "employee" does not include persons performing services as real estate broker, broker-salesman, or salesman when such persons are paid by commission only.

(c) "Commission" means the Industrial Commission created by Section 5 of "The Civil Administrative Code of Illinois", approved March 7, 1917, as amended, or the Illinois Workers' Compensation Commission created by Section 13 of this Act.

(d) For the purposes of this subsection (d):

"In the course of employment" means the time, place, and circumstances surrounding the accidental injuries.

"Arising out of the employment" means causal connection. It must be shown that the injury had its origin in some risk connected with, or incidental to, the employment so as to create a causal connection between the employment and the accidental injuries. An injury arises out of the employment if, at the time of the occurrence, the employee was performing acts he or she was instructed to perform by his or her employer, acts which he or she had a common law or statutory duty to perform, or acts which the employee might reasonably be expected to perform incident to his or her assigned duties. A risk is incidental to the employment where it belongs to or is connected with what an employee has to do in fulfilling his or her duties.

To obtain compensation under this Act, an employee bears the burden of showing, by a preponderance of the evidence, that he or she has sustained accidental injuries arising out of and in the course of the employment. Except as provided in subsection (e) of this Section, accidental injuries sustained while traveling to or from work do not arise out of and in the course of employment.

(e) Where an employee is required to travel away from his or her employer's premises in order to perform his or her job, the traveling employee's accidental injuries arise out of his or her employment, and are in the course of his or her employment, when the conduct in which he or she was engaged at the time of the injury is reasonable and when that conduct might have been anticipated or foreseen by the employer. Accidental injuries while traveling do not occur in the course of employment if the accident occurs during a purely personal deviation or personal errand unless such deviation or errand is insubstantial.

In determining whether an employee is required to travel away from his or her employer's premises in order to perform his or her job, along with all other relevant factors, the following factors may be considered: whether the employer had knowledge that the employee may be required to travel to perform the job; whether the employer furnished any mode of transportation to or from the employee; whether the employee received or the employer paid or agreed to pay any remuneration or reimbursement for costs or expenses of any form of travel; whether the employer in any way directed the course or method of travel; whether the employer in any way assisted the employee in making any travel arrangements; whether the employer furnished lodging or in any way reimbursed the employee for lodging; or whether the employer received any benefit from the employee traveling.

(Source: P.A. 97-18, eff. 6-28-11; 97-268, eff. 8-8-11; 97-813, eff. 7-13-12.)

(820 ILCS 305/8.1b)

Sec. 8.1b. Determination of permanent partial disability. For accidental injuries that occur on or after September 1, 2011, permanent partial disability shall be established using the following criteria:

(a) A physician licensed to practice medicine in all of its branches preparing a permanent partial disability impairment report shall report the level of impairment in writing. The report shall include an evaluation of medically defined and professionally appropriate measurements of impairment that include, but are not limited to: loss of range of motion; loss of strength; measured atrophy of tissue mass consistent with the injury; and any other measurements that establish the nature and extent of the impairment. The most current edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment" shall be used by the physician in determining the level of impairment.

(b) In determining the level of permanent partial disability, the Commission shall base its determination on the following factors: (i) the reported level of impairment pursuant to subsection (a), if such report exists; (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the employee's future earning capacity; and (v) evidence of disability corroborated by the treating medical records or examination under Section 12 of this Act. No single enumerated factor shall be the sole determinant of disability. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order.

(c) A report of impairment prepared pursuant to subsection (a) is not required for an arbitrator or the Commission to make an award for permanent partial disability or permanent total disability benefits or any award for benefits under subsection (c) of Section 8 or subsection (d) of Section 8 of this Act or to approve a Settlement Contract Lump Sum Petition.

(Source: P.A. 97-18, eff. 6-28-11.)

(820 ILCS 305/8.2a)

Sec. 8.2a. Electronic claims.

(a) The Director of Insurance shall adopt rules to do all of the following:

(1) Ensure that all health care providers and facilities submit medical bills for payment on standardized forms.

(2) Require acceptance by employers and insurers of electronic claims for payment of medical services.

(3) Ensure confidentiality of medical information submitted on electronic claims for payment of medical services.

(4) Ensure that the rules establishing electronic claims include a specific enforcement mechanism to ensure compliance with these rules.

(5) Ensure that health care providers have at least 15 business days to comply with records requested by employers and insurers for the authorization of the payment of workers' compensation claims.

(6) Ensure that health care providers are responsible for supplying only those medical records pertaining to the provider's own claims that are minimally necessary under the federal Health Insurance Portability and Accountability Act of 1996.

(b) To the extent feasible, standards adopted pursuant to subdivision (a) shall be consistent with existing standards under the federal Health Insurance Portability and Accountability Act of 1996 and standards adopted under the Illinois Health Information Exchange and Technology Act.

(c) The rules requiring employers and insurers to accept electronic claims for payment of medical services shall be proposed on or before May 31, 2016, January 1, 2012, and shall require all employers and insurers to accept electronic claims for payment of medical services on or before January 1, 2017 June 30, 2012.

(d) The Director of Insurance shall by rule establish criteria for granting exceptions to employers, insurance carriers, and health care providers who are unable to submit or accept medical bills electronically.

(Source: P.A. 97-18, eff. 6-28-11.)

(820 ILCS 305/14) (from Ch. 48, par. 138.14)

Sec. 14. The Commission shall appoint a secretary, an assistant secretary, and arbitrators and shall employ such assistants and clerical help as may be necessary. Arbitrators shall be appointed pursuant to this Section, notwithstanding any provision of the Personnel Code.

Each arbitrator appointed after June 28, 2011 shall be required to demonstrate in writing his or her knowledge of and expertise in the law of and judicial processes of the Workers' Compensation Act and the Occupational Diseases Act.

A formal training program for newly-hired arbitrators shall be implemented. The training program shall include the following:

(a) substantive and procedural aspects of the arbitrator position;

(b) current issues in workers' compensation law and practice;

(c) medical lectures by specialists in areas such as orthopedics, ophthalmology, psychiatry, rehabilitation counseling;

(d) orientation to each operational unit of the Illinois Workers' Compensation Commission;

(e) observation of experienced arbitrators conducting hearings of cases, combined with the opportunity to discuss evidence presented and rulings made;

(f) the use of hypothetical cases requiring the trainee to issue judgments as a means to evaluating knowledge and writing ability;

(g) writing skills;

(h) professional and ethical standards pursuant to Section 1.1 of this Act;

(i) detection of workers' compensation fraud and reporting obligations of Commission employees and appointees;

(j) standards of evidence-based medical treatment and best practices for measuring and improving quality and health care outcomes in the workers' compensation system, including but not limited to the use of the American Medical Association's "Guides to the Evaluation of Permanent Impairment" and the practice of utilization review; and

(k) substantive and procedural aspects of coal workers' pneumoconiosis (black lung) cases.

A formal and ongoing professional development program including, but not limited to, the above-noted areas shall be implemented to keep arbitrators informed of recent developments and issues and to assist them in maintaining and enhancing their professional competence. Each arbitrator shall complete 20 hours of training in the above-noted areas during every 2 years such arbitrator shall remain in office.

Each arbitrator shall devote full time to his or her duties and shall serve when assigned as an acting Commissioner when a Commissioner is unavailable in accordance with the provisions of Section 13 of this Act. Any arbitrator who is an attorney-at-law shall not engage in the practice of law, nor shall any arbitrator hold any other office or position of profit under the United States or this State or any municipal corporation or political subdivision of this State. Notwithstanding any other provision of this Act to the contrary, an arbitrator who serves as an acting Commissioner in accordance with the provisions of Section 13 of this Act shall continue to serve in the capacity of Commissioner until a decision is reached in every case heard by that arbitrator while serving as an acting Commissioner.

Notwithstanding any other provision of this Section, the term of all arbitrators serving on the effective date of this amendatory Act of the 97th General Assembly, including any arbitrators on administrative leave, shall terminate at the close of business on July 1, 2011, but the incumbents shall continue to exercise all of their duties until they are reappointed or their successors are appointed.

On and after the effective date of this amendatory Act of the 97th General Assembly, arbitrators shall be appointed to 3-year terms as follows:

(1) All appointments shall be made by the Governor with the advice and consent of the Senate.

(2) For their initial appointments, 12 arbitrators shall be appointed to terms expiring July 1, 2012; 12 arbitrators shall be appointed to terms expiring July 1, 2013; and all additional arbitrators shall be appointed to terms expiring July 1, 2014. Thereafter, all arbitrators shall be appointed to 3-year terms.

Upon the expiration of a term, the Chairman shall evaluate the performance of the arbitrator and may recommend to the Governor that he or she be reappointed to a second or subsequent term by the Governor with the advice and consent of the Senate.

Each arbitrator appointed on or after the effective date of this amendatory Act of the 97th General Assembly and who has not previously served as an arbitrator for the Commission shall be required to be authorized to practice law in this State by the Supreme Court, and to maintain this authorization throughout his or her term of employment.

The performance of all arbitrators shall be reviewed by the Chairman on an annual basis. The Chairman shall allow input from the Commissioners in all such reviews.

The Commission shall assign no fewer than 3 arbitrators to each hearing site. The Commission shall establish a procedure to ensure that the arbitrators assigned to each hearing site are assigned cases on a random basis. The Chairperson of the Commission shall have discretion to assign and reassign arbitrators to each hearing site as needed. No arbitrator shall hear cases in any county, other than Cook County, for more than 2 years in each 3-year term.

The Secretary and each arbitrator shall receive a per annum salary of $4,000 less than the per annum salary of members of The Illinois Workers' Compensation Commission as provided in Section 13 of this Act, payable in equal monthly installments.

The members of the Commission, Arbitrators and other employees whose duties require them to travel, shall have reimbursed to them their actual traveling expenses and disbursements made or incurred by them in the discharge of their official duties while away from their place of residence in the performance of their duties.

The Commission shall provide itself with a seal for the authentication of its orders, awards and proceedings upon which shall be inscribed the name of the Commission and the words "Illinois--Seal".

The Secretary or Assistant Secretary, under the direction of the Commission, shall have charge and custody of the seal of the Commission and also have charge and custody of all records, files, orders, proceedings, decisions, awards and other documents on file with the Commission. He shall furnish certified copies, under the seal of the Commission, of any such records, files, orders, proceedings, decisions, awards and other documents on file with the Commission as may be required. Certified copies so furnished by the Secretary or Assistant Secretary shall be received in evidence before the Commission or any Arbitrator thereof, and in all courts, provided that the original of such certified copy is otherwise competent and admissible in evidence. The Secretary or Assistant Secretary shall perform such other duties as may be prescribed from time to time by the Commission.

(Source: P.A. 97-18, eff. 6-28-11; 97-719, eff. 6-29-12; 98-40, eff. 6-28-13.)

(820 ILCS 305/14.2 new)

Sec. 14.2. Ombudsman Program.

(a) The Commission shall establish the Workers' Compensation Ombudsman Program as an office within the Illinois Workers' Compensation Commission no later than July 1, 2016. The Ombudsman Program shall be composed of at least one full-time ombudsman who shall develop a plan to provide assistance to all regions of this State. One full-time Ombudsman shall be designated as the Chief Ombudsman and the Chief Ombudsman shall be an attorney licensed to practice law in the State of Illinois and shall have demonstrated experience in Illinois workers' compensation law. The Ombudsman Program shall be staffed with personnel who are trained in techniques performed by ombudsmen and who are familiar with the provisions of this Act and its rules, vocational rehabilitation principles, the obligations of medical providers under this Act, the provisions of the Medical Fee Schedule, an employer's responsibility to maintain workers' compensation insurance, the duties and obligations of self-insurers, and workers' compensation fraud.

(b) The duties of the Ombudsman Program shall be as follows:

(1) assist injured employees in understanding their rights and obligations under this Act, including, but not limited to, filing their own claims with the Commission and obtaining medical records, job descriptions, and other materials pertinent to filing a claim before the Commission;

(2) assist employers seeking information regarding their rights and obligations under this Act, including their obligation to maintain workers' compensation insurance;

(3) assist medical providers with their rights and obligations under this Act;

(4) provide information to employers, employees, and medical providers with questions about workers' compensation fraud;

(5) assist injured employees with referral to local, State, and federal financial assistance, rehabilitation, and work placement programs, as well as other social services that the Ombudsman Program considers appropriate;

(6) respond to inquiries and complaints relative to the workers' compensation program;

(7) serve as an information source for employees, employers, medical, vocational, and rehabilitation personnel, insurers, third-party administrators, and self-insurers; and

(8) perform other duties as required by the Chairman.

(c) The Ombudsman Program may not appear or intervene, as a party or otherwise, before the Commission on behalf of an injured employee, employer, or medical provider. This Section shall not be construed as requiring or allowing legal representation for an injured employee by the Ombudsman Program in any proceeding before the Commission.

(d) The Ombudsman Program shall prepare a report to the Commission, which shall also be included in the Commission's annual report required under Section 15 of this Act. The report prepared by the Ombudsman Program shall include the following information for the preceding fiscal year:

(1) the total number of persons and entities assisted during the fiscal year;

(2) the number of injured employers assisted during the fiscal year;

(3) the number of employers, insurers, self-insureds, and third-party administrators assisted during the fiscal year;

(4) the total number of medical providers assisted during the fiscal year;

(5) the number of referrals made to the Workers' Compensation Fraud Unit;

(6) an analysis of the areas of workers' compensation law requiring the most assistance for injured workers, employers, and medical providers; and

(7) recommendations, if any, for legislation or rules to be initiated by the Commission, based on the inquiries received by the Ombudsman Program.

(820 ILCS 305/14.3 new)

Sec. 14.3. WEAR Commission.

(a) There is created the Workers' Compensation Edit, Alignment, and Reform Commission, which shall be known as the WEAR Commission. The purpose of the WEAR Commission is to develop a proposed recodification of the Workers' Compensation Act that meets the following goals:

(1) to make this Act more accessible to laypeople seeking benefits under this Act and employers seeking insurance coverage for their responsibilities under this Act;

(2) to aid the Commission, attorneys, and judges in understanding and applying the provisions of this Act;

(3) to prevent disputes over interpretations of this Act that can add additional costs to the function and administration of the workers' compensation system;

(4) to reduce the size of each Section of this Act to promote understanding, interpretation, and indexing of this Act;

(5) to assist policymakers so that they can more easily understand the implication of amendments to this Act that may be proposed in the future;

(6) to replace outdated and obsolete language within this Act;

(7) to limit the opportunity for lengthy and expensive appeals due to confusion or contrary language within this Act; and

(8) to meet the preceding objectives without changing substantive law or disturbing established case law precedent. Nothing in this Section 14.3 shall be construed to allow or authorize the WEAR Commission to seek to or to diminish, restrict, limit, expand, abrogate, alter, or change in way the current interpretation of any substantive or procedural provision of this Act by the Commission or any Court.

(b) The members of the WEAR Commission shall be as follows:

(1) one Senator appointed by the President of the Senate;

(2) one Senator appointed by the Minority Leader of the Senate;

(3) one Representative appointed by the Speaker of the House of Representatives;

(4) one Representative appointed by the Minority Leader of the House of Representatives;

(5) four attorneys representing petitioners, one each appointed by the President of the Senate, Minority Leader of the Senate, Speaker of the House of Representatives, and Minority Leader of the House of Representatives; and

(6) four attorneys representing respondents, one each appointed by the President of the Senate, Minority Leader of the Senate, Speaker of the House of Representatives, and Minority Leader of the House of Representatives.

The members of the WEAR Commission shall serve without compensation. The Chairperson of the Illinois Workers' Compensation Commission shall serve as the Chairperson of the WEAR Commission.

(c) The Illinois Workers' Compensation Commission, the Workers' Compensation Insurance Compliance Unit, and the Legislative Reference Bureau shall provide administrative support for the WEAR Commission.

(d) The WEAR Commission shall present a report to the General Assembly no later than July 1, 2017. This report shall include a draft of proposed legislation for the reorganization of the Workers' Compensation Act that accomplishes the goals set forth by this Section.

(e) This Section is repealed on January 1, 2018.

(820 ILCS 305/14.4 new)

Sec. 14.4. System improvements.

(a) By January 1, 2017, the Commission shall procure and implement a computer system to replace its current outdated and obsolete mainframe computer system. The Commission shall use the funds allocated for this purpose as set forth in the settlement agreement for the case entitled Illinois State Chamber of Commerce v. Filan.

(b) The system procured by the Commission shall have all of the following capabilities:

(1) require the electronic filing of claims before the Commission, including the Application for Adjustment of Claim and all subsequent filings by a petitioner or respondent; the electronic filing fields for the Application of Adjustment of Claim shall include the following:

(i) for cases involving the State of Illinois, a data field for the specific agency, department, constitutional officer, board, or commission;

(ii) a data field for the petitioner to indicate that the claim involves a repetitive injury;

(iii) a data field for the petitioner to indicate that the claim involved an injury incurred when the petitioner was traveling as part of his or her employment; and

(iv) a data field for the petitioner to indicate that he or she is pro se;

(2) allow for a respondent to indicate the insurance carrier of the employer, or the third-party administrator of the employer, if self-insured;

(3) allow for documents and exhibits to be uploaded electronically;

(4) allow for the case history of each claim to be viewed in a summary format arranged by the date of each filing or hearing, which shall be available to the public;

(5) allow for the attorney of record for the petitioner, if any, and the respondent to be clearly indicated on any summary format, including the attorney who actually tried or argued the case before an arbitrator or Commissioner;

(6) allow for the decision of the arbitrator or the Commission to be uploaded electronically;

(7) allow for the following data reports to be produced from the electronic system:

(i) the total number of decisions by each arbitrator within any time period;

(ii) the total number of awards by injury type, including repetitive injuries or injuries suffered by employees when traveling in the course of their employment or alleged to be suffered by employees when traveling in the course of their employment;

(iii) the penalties assessed against employers, searchable by each employer;

(iv) the total number of decisions by each panel of Commissioners;

(v) the total number of claims filed by State employees within any time period;

(vi) the total number of new claims filed in each arbitration zone;

(vii) the total number of Settlement Contract Lump Sum Petitions; and

(viii) the industry types of the employers against whom claims are filed.

(7) allow for an electronic, searchable record of any approved Settlement Contract Lump Sum Petitions, including the amount of such Settlement Contract Lump Sum Petitions, the type of injury, and the attorneys representing each party, if any, for such Settlement Contract Lump Sum Petitions;

(8) allow for the random assignment of cases by arbitrator and to Commission panels, if appealed;

(9) allow for the electronic transmission of the record of proceedings before the Commission to be transmitted to the circuit court in the event of an appeal from the Commission; and

(10) ensure the confidentiality of all protected information, including medical records.

(c) The Commission shall make all efforts to ensure that parties practicing before the Commission, including injured employees, are aware of the changes required by the procurement of the computer system required by this Section.

(820 ILCS 305/25.5)

Sec. 25.5. Unlawful acts; penalties.

(a) It is unlawful for any person, company, corporation, insurance carrier, healthcare provider, or other entity to:

(1) Intentionally present or cause to be presented any false or fraudulent claim for the payment of any workers' compensation benefit.

(2) Intentionally make or cause to be made any false or fraudulent material statement or material representation for the purpose of obtaining or denying any workers' compensation benefit.

(3) Intentionally make or cause to be made any false or fraudulent statements with regard to entitlement to workers' compensation benefits with the intent to prevent an injured worker from making a legitimate claim for any workers' compensation benefits.

(4) Intentionally prepare or provide an invalid, false, or counterfeit certificate of insurance as proof of workers' compensation insurance.

(5) Intentionally make or cause to be made any false or fraudulent material statement or material representation for the purpose of obtaining workers' compensation insurance at less than the proper rate for that insurance.

(6) Intentionally make or cause to be made any false or fraudulent material statement or material representation on an initial or renewal self-insurance application or accompanying financial statement for the purpose of obtaining self-insurance status or reducing the amount of security that may be required to be furnished pursuant to Section 4 of this Act.

(7) Intentionally make or cause to be made any false or fraudulent material statement to the Commission's Department of Insurance's fraud and insurance non-compliance unit in the course of an investigation of fraud or insurance non-compliance.

(8) Intentionally assist, abet, solicit, or conspire with any person, company, or other entity to commit any of the acts in paragraph (1), (2), (3), (4), (5), (6), or (7) of this subsection (a).

(9) Intentionally present a bill or statement for the payment for medical services that were not provided.

For the purposes of paragraphs (2), (3), (5), (6), (7), and (9), the term "statement" includes any writing, notice, proof of injury, bill for services, hospital or doctor records and reports, or X-ray and test results.

(b) Sentences for violations of subsection (a) are as follows:

(1) A violation in which the value of the property obtained or attempted to be obtained is $300 or less is a Class A misdemeanor.

(2) A violation in which the value of the property obtained or attempted to be obtained is more than $300 but not more than $10,000 is a Class 3 felony.

(3) A violation in which the value of the property obtained or attempted to be obtained is more than $10,000 but not more than $100,000 is a Class 2 felony.

(4) A violation in which the value of the property obtained or attempted to be obtained is more than $100,000 is a Class 1 felony.

(5) A person convicted under this Section shall be ordered to pay monetary restitution to the insurance company or self-insured entity or any other person for any financial loss sustained as a result of a violation of this Section, including any court costs and attorney fees. An order of restitution also includes expenses incurred and paid by the State of Illinois or an insurance company or self-insured entity in connection with any medical evaluation or treatment services.

For the purposes of this Section, where the exact value of property obtained or attempted to be obtained is either not alleged or is not specifically set by the terms of a policy of insurance, the value of the property shall be the fair market replacement value of the property claimed to be lost, the reasonable costs of reimbursing a vendor or other claimant for services to be rendered, or both. Notwithstanding the foregoing, an insurance company, self-insured entity, or any other person suffering financial loss sustained as a result of violation of this Section may seek restitution, including court costs and attorney's fees in a civil action in a court of competent jurisdiction.

(c) The Illinois Workers' Compensation Commission Department of Insurance shall establish a fraud and insurance non-compliance unit responsible for investigating incidences of fraud and insurance non-compliance pursuant to this Section. The size of the staff of the unit shall be subject to appropriation by the General Assembly. It shall be the duty of the fraud and insurance non-compliance unit to determine the identity of insurance carriers, employers, employees, or other persons or entities who have violated the fraud and insurance non-compliance provisions of this Section. The fraud and insurance non-compliance unit shall report violations of the fraud and insurance non-compliance provisions of this Section to the Special Prosecutions Bureau of the Criminal Division of the Office of the Attorney General or to the State's Attorney of the county in which the offense allegedly occurred, either of whom has the authority to prosecute violations under this Section.

With respect to the subject of any investigation being conducted, the fraud and insurance non-compliance unit shall have the general power of subpoena of the Department of Insurance, including the authority to issue a subpoena to a medical provider, pursuant to Section 8-802 of the Code of Civil Procedure.

(d) Any person may report allegations of insurance non-compliance and fraud pursuant to this Section to the Illinois Workers' Compensation Commission's Department of Insurance's fraud and insurance non-compliance unit whose duty it shall be to investigate the report. The unit shall notify the Commission of reports of insurance non-compliance. Any person reporting an allegation of insurance non-compliance or fraud against either an employee or employer under this Section must identify himself. Except as provided in this subsection and in subsection (e), all reports shall remain confidential except to refer an investigation to the Attorney General or State's Attorney for prosecution or if the fraud and insurance non-compliance unit's investigation reveals that the conduct reported may be in violation of other laws or regulations of the State of Illinois, the unit may report such conduct to the appropriate governmental agency charged with administering such laws and regulations. Any person who intentionally makes a false report under this Section to the fraud and insurance non-compliance unit is guilty of a Class A misdemeanor.

(e) In order for the fraud and insurance non-compliance unit to investigate a report of fraud related to an employee's claim, (i) the employee must have filed with the Commission an Application for Adjustment of Claim and the employee must have either received or attempted to receive benefits under this Act that are related to the reported fraud or (ii) the employee must have made a written demand for the payment of benefits that are related to the reported fraud. There shall be no immunity, under this Act or otherwise, for any person who files a false report or who files a report without good and just cause. Confidentiality of medical information shall be strictly maintained. Investigations that are not referred for prosecution shall be destroyed upon the expiration of the statute of limitations for the acts under investigation and shall not be disclosed except that the person making the report shall be notified that the investigation is being closed. It is unlawful for any employer, insurance carrier, service adjustment company, third party administrator, self-insured, or similar entity to file or threaten to file a report of fraud against an employee because of the exercise by the employee of the rights and remedies granted to the employee by this Act.

(e-5) The fraud and insurance non-compliance unit shall procure and implement a system utilizing advanced analytics inclusive of predictive modeling, data mining, social network analysis, and scoring algorithms for the detection and prevention of fraud, waste, and abuse on or before January 1, 2012. The fraud and insurance non-compliance unit shall procure this system using a request for proposals process governed by the Illinois Procurement Code and rules adopted under that Code. The fraud and insurance non-compliance unit shall provide a report to the President of the Senate, Speaker of the House of Representatives, Minority Leader of the House of Representatives, Minority Leader of the Senate, Governor, Chairman of the Commission, and Director of Insurance on or before July 1, 2012 and annually thereafter detailing its activities and providing recommendations regarding opportunities for additional fraud waste and abuse detection and prevention.

(f) Any person convicted of fraud related to workers' compensation pursuant to this Section shall be subject to the penalties prescribed in the Criminal Code of 2012 and shall be ineligible to receive or retain any compensation, disability, or medical benefits as defined in this Act if the compensation, disability, or medical benefits were owed or received as a result of fraud for which the recipient of the compensation, disability, or medical benefit was convicted. This subsection applies to accidental injuries or diseases that occur on or after the effective date of this amendatory Act of the 94th General Assembly.

(g) Civil liability. Any person convicted of fraud who knowingly obtains, attempts to obtain, or causes to be obtained any benefits under this Act by the making of a false claim or who knowingly misrepresents any material fact shall be civilly liable to the payor of benefits or the insurer or the payor's or insurer's subrogee or assignee in an amount equal to 3 times the value of the benefits or insurance coverage wrongfully obtained or twice the value of the benefits or insurance coverage attempted to be obtained, plus reasonable attorney's fees and expenses incurred by the payor or the payor's subrogee or assignee who successfully brings a claim under this subsection. This subsection applies to accidental injuries or diseases that occur on or after the effective date of this amendatory Act of the 94th General Assembly.

(h) The fraud and insurance non-compliance unit shall submit a written report on an annual basis to the Chairman of the Commission, the Workers' Compensation Advisory Board, the General Assembly, the Governor, and the Attorney General by January 1 and July 1 of each year. This report shall include, at the minimum, the following information:

(1) The number of allegations of insurance non-compliance and fraud reported to the fraud and insurance non-compliance unit.

(2) The source of the reported allegations (individual, employer, or other).

(3) The number of allegations investigated by the fraud and insurance non-compliance unit.

(4) The number of criminal referrals made in accordance with this Section and the entity to which the referral was made.

(5) All proceedings under this Section.

(Source: P.A. 97-18, eff. 6-28-11; 97-1150, eff. 1-25-13.)