Illinois Act Provides No Penalties for Delay in Authorizing Medical Treatment

An Illinois appellate court affirmed an order of a county circuit court that, in turn, confirmed a decision of the state’s Workers’ Compensation Commission reversing an award of attorney fees and other penalties assessed by an arbitrator against an employer for unreasonable delay in authorizing medical treatment [O'Neil v. Ill. Workers' Comp. Comm'n, 2020 IL App (2d) 190427WC (Feb. 4, 2020)]. The appellate court agreed that nothing in the Illinois Act authorized the Commission to assess penalties against an employer based on a failure or delay in authorizing reasonable and necessary medical treatment. The relevant provision, 820 ILCS 305/8.7(j), spoke only to an employer's denial or refusal to authorize payment, not the actual medical treatment itself.

Background

Claimant, a marine technician, sought workers’ compensation benefits for an injury to his right knee that he alleged occurred on February 11, 2016, while working for the employer. On October 10, 2016, the employer’s insurance carrier approved surgery proposed by claimant’s physician. Claimant subsequently testified that he delayed the surgery because he was the only marine technician and the employer was very busy. Claimant intended to proceed with the surgery in the winter when work was not as hectic. On December 8, 2016, approximately one week prior to the proposed surgery, the employer’s carrier revoked the surgery authorization, indicating that there was a need for an additional investigation.

Possibility of Prior Procedure to Same Knee

The carrier indicated that it had uncovered references to a surgical procedure performed at a VA facility on the same knee in 2002. Following a hearing, the arbitrator found that the earlier treatment at the VA was on the lower leg, not the knee, and order the employer to authorize the requested surgery.

Penalties & Attorney’s Fees

The arbitrator found the employer and carrier’s refusal to authorize treatment had not been made in good faith and assessed a $6900 penalty pursuant to 820 ILCS 305/19(l) “for without good and just cause failing, neglecting, refusing, and unreasonably delaying payments under section 8(a) of the Act (820 ILCS 305/8(a) (West 2016)), i.e., authorizing the surgery.” In addition, the arbitrator found respondent liable for attorney fees in the amount of $1380 pursuant to section 820 ILCS 305/16.

Divided Commission Reverses on Penalties & Fees

Upon review, the Commission agreed that the recommended surgery was reasonable, necessary, and causally related to claimant’s work-related accident. Nevertheless, relying on Hollywood Casino-Aurora, Inc. v. Illinois Workers’ Comp. Comm'n, 2012 IL App (2d) 110426WC, 967 N.E.2d 848, 359 Ill. Dec. 818, concluded that it was without statutory authority to award attorney fees and penalties pursuant to sections 16 and 19(l) of the Act. The Commission acknowledged that Hollywood Casino involved the assessment of penalties under 820 ILCS 305/19(k), but found that the same holding applied “by extension” to the assessment of attorney fees and penalties under sections 16 and 19(l) of the Act. The Commission also observed that section 16 attorney fees are predicated on an award pursuant to section 19(k) of the Act, and since Hollywood Casino held that section 19(k) did not allow the Commission to award penalties for the failure to authorize medical treatment, it followed that section 16 attorney fees were likewise not available under such circumstances. Accordingly, the Commission — with one Commissioner dissenting — vacated the arbitrator’s award of attorney fees and penalties.

Appellate Court Affirms

Noting its earlier decision in Hollywood Casino, the court stressed that the term “payment” did not include the giving of authorization for a service. Section 19(l) of the Act provided for the potential entry of an award of penalties where the employer or carrier had, without good and just cause failed, neglected, refused, or unreasonably delayed the payment of benefits under Section 8(a) or Section 8(b) of the Act. Here there had been no such refusal to pay. Rather the delay or refusal related only to the authorization of the medical procedure.

The court said it was “not unsympathetic” to claimant’s concerns, but that such issues were best directed to the legislature. The court simply was not at liberty to read into the statute any exceptions, limitations, or conditions that the legislature did not intend.