Worker's Compensation Advisory Council

Council on Worker’s Compensation
Meeting Minutes
Madison, Wisconsin
May 03, 2007


Members present:  Ms. Bean, Mr. Beiriger, Mr. Brand, Mr. Buchen, Mr. Furley, Ms. Huntley-Cooper, Mr. Kent, Mr. Newby, Mr. Olson, Mr. Redman, Mr. Schimke, Ms. Vetter

Excused: Mr. Shaver, Mr. Scott

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

  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: The minutes of the April 5, 2007 meeting were approved without corrections.
  3. Health Care Providers Advisory Committee Report (DWD 81): Mr. O’Malley reported the WCD is still on track for the administrative rule changes to be in effect on August 1, 2007. The final rule will be available on the website, and paper copies of the Medical Treatment Guidelines provided to the WCAC members for the next meeting. Ms. Huntley-Cooper reported that the next meeting of the Health Care Providers Advisory Committee scheduled for May 18, 2007 has been cancelled. Dr. Eric Carlson is not able to continue serving on the committee. Ms. Huntley-Cooper will be contacting the WCAC liaisons to recommend a replacement member. The committee will be looking at future issues to address for the WCAC. The next committee meeting is scheduled for July 20, 2007.
  4. Permanent Total Disability Committee Report: Ms. Knutson indicated the committee had not met. The WCAC has not referred any issues to the Permanent Total Disability Committee to address.
  5. Other Reports: Mr. Conway reported on the Loggers Committee. A representative of the committee will meet with the Wisconsin Compensation Rating Bureau (WCRB) to review policy language, which will be referred to the Office of the Commissioner of Insurance (OCI). The new language will provide that participation in training and certification will result in a premium reduction. The next meeting is scheduled for June 16, 2007.

    Ms. Knutson provided information on the litigated case backlog. The total number of cases ready to be scheduled for hearing or prehearing conference has dropped to 4007 as of May 1, 2007. The number of hearings scheduled has increased to 1260, with an additional 51 cases scheduled for settlement conferences. The median lag time from the date a case is ready to be scheduled for hearing to the date of the hearing notice is 319 for hearings and 358 days for settlement conferences. The scheduling unit is concentrating on scheduling the oldest cases first. There are currently 23½ administrative law judges holding hearings. ALJ Ryan O’Connor is resigning effective May 14, 2007 to join a private law firm and Attorney Helen Schott will be starting to hold hearings as a limited term ALJ that same date. The WCD is recruiting to fill ALJ O’Connor’s position. Mr. O’Malley reported the litigated caseload decreased by 575 in the first three months of this calendar year. The number of cases pending over one year has dropped from 300 to 175. The WCD appreciates the assistance and support the Secretary’s Office has provided in filling ALJ O’Connor’s position.

    Ms. Knutson reported the Attorney Fee Discussion Group has a meeting scheduled for May 18, 2007 to finalize recommended statutory and administrative rule changes. The committee will also review the proposed bill that allows a sliding scale attorney’s fee on reimbursements for public assistance.

    Mr. Conway reviewed the insurance carriers’ loss ratio information requested by the WCAC. A packet of information was distributed to the WCAC members, which contained information obtained by the WCRB, OCI and the Wisconsin Insurance Alliance. The data includes a loss ratio from 1994 to 2004 that contains the amount of payroll, modified premium, incurred indemnity, incurred medical costs, loss reserves and total paid claims. However, this loss ratio information does not include incurred but not reported (IBNR) claims. It also does not include dividends paid to employers and interest earned by insurers on premium. The information provided by OCI includes IBNR claims and loss reserves. Information obtained from the A.M. Best Report (provided by the Wisconsin Insurance Alliance) includes premiums after dividends paid, incurred losses, reserves and IBNR claims. Mr. Conway stated that the WCD has asked to meet with the Wisconsin Insurance Alliance, OCI and the WCRB to come to an agreement on what is a fair picture of carrier loss ratios to answer the question of profitability of worker’s compensation insurance in Wisconsin. The WCD will provide this information at the next meeting.
  6. Presenter: Mr. Rick Gale, President of the Professional Firefighters of Wisconsin, member of the Employee Trust Funds Board and Secretary of the Wisconsin Retirement Board, provided information to the WCAC on the statutory presumptions of illnesses for firefighters for purposes of eligibility for benefits under Wis. Stat. §40.65 (duty disability benefits) and AB 275. In 1966 the heart/lung bill was introduced, providing a statutory presumption for eligibility for Sec. 66.191 benefits for heart and lung conditions. In 1982, duty disability benefits (sec. 40.65) became effective and replaced Sec. 66.191 benefits. Further amendments were made to 40.65 benefits in 1989 and firefighters were encouraged to apply for worker’s compensation benefits. There is no presumption of work-relatedness for specific medical conditions for firefighters for purposes of eligibility for worker’s compensation benefits. The financial impact on ETF for 40.65 benefits is higher than originally anticipated because of higher utilization than anticipated. ETF offsets receipt of worker’s compensation disability benefits against 40.65 benefits. Mr. Gale indicated that when a firefighter is sleeping or at rest and is called to respond to a fire call, it is a shock to the firefighter’s system. There is a significant difference between the exposure of full-time firefighters and volunteers. Virtually all part-time firefighters are paid on-call rather than volunteers. The current rebuttable presumption in the statute for 40.65 benefits does not apply to part-time firefighters, while the presumptions in AB275 would apply to part-time firefighters. Mr. Gale recommended if a presumption is applied to worker’s compensation benefits for firefighters, it should replicate the current rebuttable presumptions that apply to 40.65 benefits.

    The WCAC requested that the WCD gather information on the medical basis for the proposed presumptions contained in AB 275 and to ask a staff person at ETF to appear at the next meeting and provide further information on 40.65 benefits and the interrelationship with worker’s compensation benefits.

    Mr. Conway informed the WCAC that AB 288 pertaining to payment of attorney’s fees on reimbursements to public assistance when worker’s compensation benefits are paid has been introduced in the State Legislature.

    The WCAC requested that the WCD send a letter to the House and Senate Labor Committee chairs advising them of the action that the WCAC is taking to evaluate the bills and to request that no legislative action be taken on the bills until the WCAC has had the opportunity to fully analyze the bills and make a recommendation on them.
  7. Correspondence:  None
  8. Unfinished Business:  Ms. Knutson explained the new draft language of department proposal number 5 regarding requiring evidence of partial dependency in death benefit claims.
  9. New Business: The department introduced two new proposals as follows: 9 & 10. Amend §§102.81(2) and 102.03(2) to extend the exclusive remedy provisions to the Uninsured Employer’s Fund third party administrator and eliminates any bad faith or delayed payment penalty against the UEF’s third party administrator.  This is in response to the recent Wisconsin Supreme Court decision in Aslakson v. Gallagher Bassett Services Inc. 

    Mr. Beiriger indicated that the exclusive remedy provision should also be extended to all third party administrators (TPA) not just to a TPA acting on behalf of the state. Mr. Newby suggested that any bad faith awards against a TPA acting on behalf of the State not be charged back to the state via contract provisions.

    Mr. O’Malley explained that when the UEF was created, the WCAC decided not to allow penalty claims against it to ensure that funds would be available to adequately pay benefit claims. Labor will agree to department proposals # 9 and 10 if they are combined with a redraft of #9 to allow bad faith penalties against the UEF’s TPA. Management will propose separate language to amend §102.03(2) to extend the exclusive remedy provision to all TPAs.

    Management introduced language drafted by the WCD to eliminate the employer’s right to opt out of Christian Science treatment and to provide that such treatment will be reimbursed at the usual and customary rate. Labor agreed with this proposal.

    Management introduced an amendment to §102.60(6) to remedy the unintended consequences created by the 2005 amendments which provided that the illegal employment of minors penalties be paid to the Work Injury Supplemental Benefit Fund instead of the minor. The language in the statute requiring that the minor have no loss of wage may result in the employer paying twice – to the WISBF and to the minor. Labor will consider this amendment.

    Management introduced a new proposal for a medical fee schedule. The fee schedule would involve a Medicare Resource Based Relative Value Scale of 100% over Medicare reimbursement for non-hospital providers and 40% over Medicare for hospital reimbursement. Mr. Buchen indicated that half the states with a medical fee schedule use Medicare reimbursement as a basis for the fee schedule. Procedures with no applicable Medicare code would have a maximum reimbursement amount using Usual and Customary methodology, which is usually defined as 85% of average billings. Management cited rapidly rising medical care costs, the high percentage of medical costs versus disability payments in worker’s compensation claims and significantly higher reimbursement rates for individual procedures in worker’s compensation than for group health policies as their reasons for introducing a medical fee schedule. Labor cited low utilization, low total medical costs per claim and low overall benefit cost (medical and indemnity) per claim as reasons for their opposition to a medical fee schedule.

    The medical liaisons to the WCAC expressed their opposition to the medical fee schedule proposal. Labor requested that Management provide data to support their proposal for the medical fee schedule including the basis for 100% and 40% over Medicare charges as a reasonable reimbursement rate.

  10. Adjournment:  Discussion on all agenda items concluded and the meeting was adjourned at approximately 3:35 p.m.

    Future meeting dates are as follows:

    Thursday, May 17, 2007
    Thursday June 7, 2007
    Wednesday, July 11, 2007
    Wednesday, August 1, 2007
    Thursday, September 6, 2007
    Target date for agreed bill is June 1, 2007