Worker's Compensation Advisory Council
Council on Worker’s Compensation
Meeting Minutes
Madison, Wisconsin
February 1, 2007


Members present:  Ms. Bean,  Mr. Brand, Mr. Buchen, Mr. Furley, Ms. Huntley-Cooper, Mr. Kent, Mr. Newby, Mr. Olson, Mr. Redman, Mr. Scott, Mr. Schimke, and Mr. Shaver

Excused: Mr. Beiriger, Ms. Vetter

Staff present: Mr. Conway, Mr. O’Malley, Ms. Knutson, and Mr. Krueger and Mr. Shorey

  1. Call to Order/Introductions: Ms. Huntley-Cooper convened the Worker’s Compensation Advisory Council (WCAC) meeting at 10:00 a.m. in accordance with Wisconsin’s open meetings law. WCAC members, staff and members of the audience introduced themselves.
  2. Minutes: Mr. Redman moved adoption of the minutes of the December 6, 2006 meeting and Mr. Shaver seconded the motion. The motion was unanimously approved and the minutes were adopted.
  3. Health Care Providers Advisory Committee Report (DWD 81): Mr. O’Malley reported that the final draft, with the 44 changes proposed by the committee, has been forwarded to the department’s administrative rules coordinator. The final draft will be posted to the Worker’s Compensation Division (WCD) website next week. Mr. O’Malley has not received any comments on the proposed rule. The next committee meeting is scheduled for February 16, 2007.
  4. Professional Employer Organization Committee Report: Mr. Conway reported that the department has combined the legislative proposal with the limited master policy exception for small employers into one document. The language of the proposal was approved by the WCAC at the last meeting. Mr. Krueger explained that under the current system pooling of employers is allowed. Under current law, the PEO could take the employees associated with a good risk and avoid taking the employees with a high risk, who can only find coverage in the assigned risk pool. Under the proposed law, if a PEO client meets the premium threshold for experience rating, they will automatically have a separate policy. Small employer-clients will be grouped together. This will be an improvement over the current law where experience is not tracked on any PEO client. The PEO draft proposal will be part of the WCAC agreed bill.
  5. Permanent Total Disability Committee Report: Ms. Knutson reported the committee met on January 23, 2007. The committee has agreed to adding three years onto supplemental benefit eligibility to cover dates of injury prior to January 1, 1990. The additional supplemental benefit payments will be covered by the Work Injury Supplemental Benefit Fund (WISBF). The committee also considered adding an additional four years to cover dates of injury prior to January 1, 1994. Since the WISBF will not be able to cover an additional four years of supplemental benefit increases, the committee considered some benefit changes in a few limited areas to cover the increases. At the last PTD committee meeting, Labor representatives indicated their desire to implement Option 3 and bring supplemental benefit rates up to a six-year lag. The WCD will soon have available to the PTD committee members a draft of the proposal discussed at the last PTD committee for use in future WCAC discussions. Mr. Newby emphasized that the WCAC must resolve the problems caused by low permanent total disability benefit rates. Mr. Buchen commented that the committee studied all the options for benefit increases and the next step in the process is to look at addressing rising health care costs as a means of funding additional benefit increases.
  6. Other Reports: Mr. Conway reported on the Loggers Committee. The committee considered four different items to address the issue of high premiums for loggers. The department has hired a consultant, Gary Davis, to address issues involved in group self-insurance including membership, capitalization, excess insurance, and financial risks to members. A report is expected by the end of February. The Wisconsin Compensation Rating Bureau is developing a mechanized loggers’ classification. The committee members will meet with the Rating Committee in March to discuss the possibility of developing a certified loggers program that would grant a loss experience reduction in exchange for participation in a training program. Finally, there is concern with loggers not complying with the law resulting in unfair competition. The WCD is performing desk audits, specifically looking for inconsistencies in coverage with state and county contracts involving logging on public lands. The committee has another meeting scheduled for mid-March and will have a formal report prepared for the WCAC by April 5, 2007.

    Mr. O’Malley reported on the litigated case backlog. The current lag time from ready status to a scheduled hearing is 14 months. The Legal Services Bureau is finally fully staffed and all 23 ALJs are trained and holding hearings. The lag time built up over several years. Four experienced staff retired from the hearings unit within two years; two staff were stellar performers. The WCD is implementing several initiatives including scheduling an experienced ALJ for settlement conferences. Currently there are 6000 cases ready for hearing including 1079 cases scheduled for hearing. Mr. Newby inquired whether the Secretary was intervening and changing the scheduling process. Ms. Huntley-Cooper indicated Mr. Lee Shorey is working with the scheduling staff and the Secretary’s Office to entertain their ideas for improvements in the scheduling process. Mr. O’Malley stated the scheduling staff is working at full capacity and if more cases are to be scheduled more staff is necessary. Other staff in the WCD are undergoing cross-training in scheduling. More scheduled cases result in more work with increased mail and file maintenance for the other hearings unit staff. Mr. Shaver requested the WCD to provide a monthly report to the WCAC including the number of ALJs holding hearings and the number of ready cases waiting for hearing. Mr. Conway commented the WCD is also evaluating process issues including: availability in the ALJs’ schedules; the number of hearings scheduled per calendar considering settlements; settlement conferences; having the parties notify the WCD when they are ready for hearing; and automating part of the scheduling process. Ms. Huntley-Cooper indicated the Department will communicate scheduling changes to outside attorneys. A meeting is scheduled with outside attorneys shortly. The Workers Compensation Process Improvement Team (WC PIT) implemented some good ideas for change; however, outside attorneys are not voluntarily complying with the changes including utilization of the joint certificate of readiness form. Mr. Newby commented that the role of the WCAC in the past was to question and monitor the backlog and scheduling process. The only formal action the WCAC has taken in the past is the addition of ALJ positions to the agreed upon bill. Mr. Kent inquired whether the WCD had considered an expedited, shortened hearing process for some cases where few facts were in dispute. Mr. O’Malley indicated the WCD would consider such an idea; however it is hard in practice to find cases where the parties agree on process issues. The WCD does provide an expedited hearing process for cases where the injured worker is under severe financial distress. Ms. Huntley-Cooper emphasized that the goal is to be creative in solving the backlog problem. If WCAC members become aware of problems with attorneys relative to the scheduling changes, those concerns should be referred back to the WCD.
  7. Correspondence: There is no new correspondence to review.
  8. Department Proposals: Mr. O’Malley reviewed the department proposals. Following is a brief description of each proposal:

    1.  Amend §102.16(2m)(g) to delete reference to the Minnesota Rules in the promulgating authority for medical treatment guidelines.

    2.  Amend §102.29(1) to provide that the Work Injury Supplemental Benefit Fund will share in any third party settlement proceeds.  The WCD will prepare examples of third party distributions for the next meeting.

    3.   Amend §102.425(3)(a)1 to delete reference to the Blue Book, which is out of print.

    4.  Create §102.425(3)(r) and (s) to provide a dispute resolution process for pharmacy fee disputes similar to the dispute resolution process in §102.16(2) for reasonableness of fee disputes.

    5.  Amend §102.48(2) to require any person claiming death benefits for partial dependency to produce documentary evidence of dependency, rather than submitting testimony only.  (When there is no surviving spouse or dependent minor children, the death benefits are paid to the WISBF less any payments to unestranged parents or partial dependents.)

    6.   Amend §102.64(2) to provide that the Department of Justice represents the WISBF for payments into the Fund for illegal employment of minors under §102.60.

    7.   Delete §102.65(3) which provides for reductions of payments into the WISBF when the Fund balance exceeds three times the amount paid out of the Fund the previous year.  This language is no longer necessary because effective April 1, 2006 §102.65(1) was amended to provide that the WISBF was a nonlapsible fund, and restricted use of the money for Fund benefit payments.

    8.   Amend §102.80(3)(ag) to eliminate the requirement to consider incurred but not reported (IBNR) claims in calculating expected losses to the Uninsured Employers Fund (UEF).  Mr. Krueger explained that currently the UEF is about 70% encumbered; however, if IBNR claims are not included in the encumbrance calculation, the Fund is only 32% encumbered.  When the Fund was originally established, it was set up similar to an insurance company to conservatively estimate the amount for claim payments and to maintain financial stability for the Fund.  UEF is not liable under the law for IBNR claims.  To date, the Fund has never had a year where it paid out more than in brought in from assessments and reimbursements.  The Fund has an excess liability policy with retention from $1.5 to $5 million.  Last calendar year the Fund paid out $2.4 million in benefits.

  9. Public Proposals: Mr. O’Malley compiled a list of public proposals from correspondence and testimony provided by the public at WCAC meetings and the public hearing on December 6, 2006. Mr. O’Malley briefly reviewed the list of requested law changes.
  10. Adjournment: Discussion on all agenda items concluded and the meeting was adjourned at approximately 12:15 p.m.

    Future meeting dates are as follows:

    Wednesday, February 28, 2007 – exchange of labor/management proposals;
    Thursday, April 5, 2007;
    Thursday, May 3, 2007;
    Thursday, May 17, 2007;
    Thursday May 31, 2007;
    Target date for agreed bill is June 1, 2007.