Heyl Royster


Heyl Royster


"I'm filing for penalties and fees, and the arbitrator isn't going to be happy with you!"

Published: 3/2/20

By: Lynsey Welch, lwelch@heylroyster.com

Who hasn’t been threatened with penalties and fees in a strong arm attempt to get medical treatment authorized? Okay. It’s a rhetorical question. The moment medical treatment is terminated, not authorized, or denied, the threat of an impending pleading being filed requesting penalties and attorney fees awarded against the employer most certainly follows suit. Petitioner’s counsel will notice the matter for hearing before the arbitrator by filing a Notice of Motion and Request for Hearing under sections 19(b)/8(a), as well as a Petition for Penalties and Fees under sections 19(k), (l), and 16a of the Act.

Relevant language from each of these sections impacting potential exposure for penalties and fees awarded at trial are as follows:

Under section 19(k), “…the Commission may award compensation additional to that otherwise payable under this Act equal to 50% of the amount payable at the time of such award.” 820 ILCS 305/19(k).

Under section 19(l), “…the Commission shall allow to the employee additional compensation in the sum of $30 per day for each day that the benefits under Section 8(a) or Section 8(b) have been so withheld or refused, not to exceed $10,000.” 820 ILCS 305/19(l).

Under section 16a, “…no claim of any attorney for services rendered in connection with the securing of compensation…shall exceed 20% of the amount of compensation recovered and paid...” 820 ILCS 305/16a(B).

The good news is that the Illinois Appellate Court recently discussed the implication of specific statutory language of both sections 19(k) and 19(l) penalties in instances where the only benefit in dispute at trial is medical benefits. The decision in O’Neil v. Illinois Workers’ Compensation Comm’n, 2020 IL App (2d) 190427WC, was recently filed by the Appellate Court, Workers’ Compensation Commission Division, in early February 2020.

In O’Neil, the petitioner was a marine technician that performed mechanical work and general boat maintenance. While installing a platform on the back of a boat, the petitioner lowered his right knee onto a concrete floor and felt a pop and a sharp pain. The petitioner participated in a course of conservative treatment and was able to keep working light duty, but the petitioner’s orthopedic surgeon recommended a right knee arthroscopy and open removal of the prepatellar bursa. The respondent initially authorized the surgery; however, the petitioner delayed the surgery to take place during the winter when his work was off-season and slower. During this delay, respondent discovered medical records referencing a prior procedure to the petitioner’s right knee. The surgical authorization was revoked, and the matter proceeded to trial pursuant to section 19(b) of the Act. At trial Petitioner denied undergoing any procedure to his right knee. He did indicate that at a different time he had benign fatty tumors removed from his right shin several inches below his knee.

The respondent did not offer any medical opinions to dispute causal connection. The arbitrator in his opinion criticized the respondent’s revocation of surgical authorization stating respondent, “relied on speculation and ambiguity and did so in an unreasonable and vexatious manner.” O'Neill, 2020 IL App (2d) 190427WC, ¶ 13. The arbitrator awarded penalties pursuant to section 19(l) of the Act and attorney fees pursuant to section 16a of the Act. 820 ILCS 305/16a. The arbitrator did not impose any penalties pursuant to section 19(k) of the Act, based on Hollywood Casino-Aurora, Inc. v. Workers’ Compensation Comm’n, 2012 IL App (2d) 110426WC. In that case, the appellate court found that there was no statutory authority to award penalties pursuant to section 19(k) of the Act for the failure to authorize medical treatment.

On review, the Workers’ Compensation Commission modified the decision of the arbitrator as it pertained to the award of penalties. The Commission based their decision on the prior case of Hollywood Casino, where the court found they did not have statutory authority to assess penalties for an employer’s delay in authorizing medical treatment. The crux of the issue was whether or not the statutory construction of Sections 19(k) and 19(l) would allow for penalties for a delay in authorizing medical treatment. The court found that the plain language of section 19(l) says nothing about any award of additional compensation (penalties) for an employer’s delay in authorizing medical treatment. The text of section 19(k) addresses “delay in payment” and “underpayment” of compensation. The text of section 19(l) addresses “fail, neglect, refuse, or unreasonably delay the payment” of benefits. 19(l) also lacks any reference to an employer’s failure, neglect, refusal, or unreasonable delay in authorizing medical treatment. Specifically, the appellate court discussed their lack of authority to read into any statute any exceptions, limitations, or conditions that the legislature did not intend.

In these instances, section 16a attorney fees are predicated on an award pursuant to section 19(k) or 19(l). Based on the court’s holdings in both Hollywood Casino and O’Neil, the threat of penalties and fees has lost all steam when the only issue in dispute is medical benefits. So keep these cases in your back pocket when you are threatened with penalties and attorney fees for failing to authorize medical benefits.