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Compensation Advisory Council
Council on Worker’s Compensation
August 08, 2011
Members present: Mr. Beiriger, Mr. Brand, Mr. Buchen, Mr.
Collingwood, Ms. Connor, Mr. Kent, Mr. Metcalf, Ms. Nugent, Mr. Olson, and Ms.
Excused: Ms. Bloomingdale, Ms. Pehler, Mr. Redman and Mr.
Staff present: Mr. O’Malley, Ms. Knutson and Mr. Aiello
- Call to Order/Introductions: Mr. Metcalf convened the Worker’s
Compensation Advisory Council (WCAC) meeting at approximately 9:00 a.m. in
accordance with Wisconsin’s open meetings law. WCAC members, staff and
members of the audience introduced themselves.
- Approval of Minutes: Mr. Beiriger moved to approve the minutes
of the July 11, 2011 meeting without correction; second by Mr. Kent. The
minutes were unanimously approved.
Mr. O’Malley reported the department received correspondence
dated July 27, 2011 from Mr. Brian Margan expressing concerns regarding
medical costs and an employee’s right to choose his/her doctor.
He referenced recent worker’s compensation law changes in
Illinois. The department will include his letter and attachments in the
spreadsheet of proposals from the public for the next agreed bill cycle and
will respond to Mr. Margan.
The department also
received correspondence dated August 3, 2011 addressed to the WCAC from the
Liaisons to the WCAC offering staff resources to review and provide feedback
on proposals involving health care.
Finally, the department
received a letter dated August 4, 2011 from Ms. Sandra Kmiec suggesting
changes in the statutes to provide that benefits provided by the employer
should continue during periods of disability, including dental, vision, and
life insurance. Further, that an
employee’s time to attend medical appointments should be paid.The department will respond to Ms. Kmiec and will include her
suggestions in the proposals from the public for the next agreed bill cycle.
- Report - Proposal Updates: Ms. Knutson reported
the WCAC had requested information on Department proposals 14 and 16
concerning the frequency of complaints from employees. The department does
not have any specific data on the number of calls received from employees
concerning unpaid medical bills; however, the department does occasionally
receive calls on this issue. Ms. Connor indicated that when a claim is
denied, the denial letter is copied to the claimant. However, when
unrelated medical bills are denied, the denial is sent only to the
provider. Mr. Metcalf indicated that going forward department staff will
keep track of the number of calls related to denial of medical bills.
- Large Deductible Insurance Coverage Wis. Insurance Alliance:
Beiriger indicated that Management’s response to Department proposals #14,
16, 18 and 19 is “no”.Mr.
Metcalf responded that the department would like the WCAC to continue to
review the health cost dispute process.
Department proposal # 17, no change in the administrative rule is necessary
at this time because the department developed a form as required by the
Labor and Management adjourned to closed caucus and upon
return, Mr. Kent
reviewed Labor’s proposals as follows:
#1. This proposal
was modified to $15 increases each year in the permanent partial disability
(PPD) rate for the next two-year agreed bill cycle.
#2. This proposal was
modified to provide for a two-year increase in supplemental benefits,
increasing benefits for claimants receiving permanent total disability (PTD)
benefits with dates of injury prior to January 1, 2003. In addition, Labor is proposing a committee to study funding of
supplemental benefits on a long-term basis and funding sources in general
for the Work Injury Supplemental Benefit Fund (WISBF).
Mr. Beiriger responded that prospectively, supplemental
benefit payments could be built into the insurance rates. Mr. O’Malley explained that the current funding sources for WISBF
consist of assessments from insurance carriers and self-insured employers
for dismemberments, deaths, $100 surcharges, and illegal employment of
minors, and death benefit payments when the employee has no surviving
dependents. Mr. Kent indicated
the committee could study other revenue streams to keep the WISBF solvent.
Ms. Knutson commented benefit payments out of the WISBF
continue to increase and include payments for barred traumatic claims.It is projected that within the next two years the WISBF balance will
be negative. Mr. Metcalf
indicated the department will need to prioritize payment of claims. Mr. O’Malley indicated that death benefit claims involving automobile
accidents, heart attacks and strokes tend to be disputed.
#3. When an individual
plan for employment is developed by DVR, the employee should be eligible for
payment of tuition, books, and fees. This proposal is related to Labor proposal #11, which provides that
if an administrative law judge determines a vocational rehabilitation plan
is appropriate, the ALJ can order prospective vocational retraining benefits
for those employees who want to be retrained.
Labor is interested in studying the
issue of payment for prosthetics to get a handle on costs, perhaps with the
development of a database. A
study committee should also address funding of supplemental benefits, and
valuation of health insurance. The committee should be staffed by WCAC members with technical
support provided by department staff.
#10. This proposal provides that temporary disability benefits would not
be reduced by wages earned while the employee is involved in vocational
#11. This proposal relates to proposal #3.
proposal could be folded into proposal # 4 involving the study committee to
review payment of prosthetic devices through a database or other payment
standards. Charges for implants
including screws used in surgery should also be included to address high
charges by providers. Mr.
Beiriger responded indicating Management is of the opinion this is a one
case issue. Management is
looking at lower costs overall in worker’s compensation system. Previous arguments by Labor were that the quality of treatment would
be affected. In
Illinois, the payment to providers for the cost of
implants including screws is calculated at 25% above the provider’s cost.
Beiriger reviewed Management proposals as follows:
#1. Labor presented alternate language for Management to consider.
#2. This proposal involves the employer’s right to direct medical care. Labor should not dismiss this proposal out of hand; this introduces
market forces into worker’s compensation medical cost pricing. Management is not interested in bad medical outcomes.
It is in all of the parties' interest to make a good choice with
reference to the treating physician; all parties want good recoveries from
injuries. Mr. Brand commented
that employer choice is a new concept in
Illinois; the goal is to return the employee to work
as soon as possible. Mr.
Beiriger commented that employers and Labor negotiate the pool of providers
for health funds and there is a role for that discussion in worker’s
would agree to have the cost of implants, hardware and prosthetics studied;
however, Management does not want all of the study areas linked together.
#4. Even though
this proposal involves modifying the formula for the certified databases,
the WCAC still needs to look at medical costs in totality. There are not a significant number of medical charges that exceed the
standard deviation maximum reimbursement amount. The certified databases just address the outlier charges.
will defer to the Health Care Provider Advisory Committee’s recommendations
with respect to any changes to the Medical Treatment Guidelines and use of
the guidelines. It will be at
least two years before any specific amendments to Chap. 81 of the Wisconsin
Administrative Code would be proposed.
#6. Vocational experts are doing the assessments for
permanent total disability based on loss of earning capacity. The determination of statutory PTD is made by the medical providers.
Management has a bias towards return to work for the worker’s
compensation system. To that
end, they are agreeable to increasing benefits for injured workers who meet
the definition of statutory PTD.
#7. The WCAC is
reviewing the Certification of Readiness process and the department is
reviewing it as well. Both Labor
and Management were unhappy when the process was implemented by Sec. Gassman. If the applicant determines he/she is ready for hearing but the
defense only has 45 days to prepare, the defense will not be ready to
proceed. The carrier should have
at least 60 days to get ready; if evidence for new claims is provided, the
60 days’ notice to the carrier should again start to run. Mr. Metcalf indicated Mr. O’Malley and Ms. Knutson can provide the
WCAC with more specific information on the amendments to the process the
department is considering implementing.
#8. Labor’s concern is that medical records obtained by the carrier must
be related to the worker’s compensation claim. If Labor has a specific suggested change, Management would be willing
to consider it.
The department has indicated a
willingness to work on this issue. There is a much larger issue that must be addressed with respect to
health cost disputes. This
specific proposal is not as high in priority as other Management proposals.
#10. Management’s proposal will increase benefits more for employees that
are “statutory PTD” on a prospective basis than Labor’s proposed benefit
increase for PTD employees.
There are issues concerning funding the additional benefits and identifying
cost savings in other program areas.
and Labor are in agreement with this proposal.
#12 and 13. These
proposals require further evaluation of the claims management process and
they are a lower priority for Management.
#14. This proposal deals with the issue of tiebreaker doctors. Ms. Knutson indicated the Labor and Industry Review Commission (LIRC)
issues remand orders directing the department to obtain opinions of
tiebreaker doctors on about 12 cases per year. Within the last couple of months the department received 4 or 5
remand orders from LIRC for tiebreaker opinions. It is difficult for the department to find doctors to conduct the
evaluations. Management wants
this issue resolved.
and Management agreed on this proposal.
#16. This proposal involves a transfer of risk. Labor has responded that it is a matter of contract law.
Management maintains that it results in a breach of the exclusive
remedy. Labor maintains this
should be addressed by the Legislature in general liability statutory
changes. Management approaching
the Legislature to resolve this issue could result in more sweeping language
than what is proposed by Management in this proposal. Management is willing to discuss this further with Labor.
With regard to the financial status of the WISBF, there are
cost drivers in the system and the WCAC cannot keep expecting the WISBF to
pay for increased benefits.
Management cannot give further increases in benefits serious consideration
without reducing costs somewhere else.
Beiriger indicated Management reviewed Labor’s proposed language to modify
Management proposal #1.
Management is agreeable to that additional language.
on behalf of Labor, responded to Management’s proposals as follows:
#1. There is a possible agreement on language.
#2. Labor feels this would take worker’s compensation back to the panel
system. The right of employees to choose their doctor is a
cornerstone element for Labor. Labor is mindful of the cost. The fact that the employee is allowed to select his/her doctor does not
drive up costs. Employees must
have a trust relationship with their doctors. Labor does not want to lower the percentage of positive medical
outcomes. Worker’s Compensation
Research Institute (WCRI) data shows employees are satisfied with their
medical care in Wisconsin
#3. Labor is in agreement to study those issues. Labor questions what database Illinois is using – does
it involve a 25% across the board increase? Wisconsin
is unique and should study its own sys tem. Some costs are high and should be brought under some scrutiny. Mr. Brand responded there are no databases for this type of medical
hardware or prosthetics.
Different states use different mark-ups based on the cost of each individual
item. Ms. Knutson explained how
the department rules in reasonableness of fee disputes involving medical
hardware or prosthetics.
#4 . Labor will defer on this proposal as it not sure of its effect. There has been an adjustment of the standard deviation in the past
and Labor is questioning the justification for this proposal. Labor is concerned with quality of medical care for injured workers. Last agreed bill cycle there was a proposal before the WCAC to freeze
the database amounts and increase charges going forward based on the medical
Consumer Price Index (CPI). This
proposal should be studied further.
#5. The Medical Treatment Guidelines are really for experts to use in
necessity of treatment disputes. Mr. O’Malley explained the purpose of the guidelines is to serve as a factor
to consider in necessity of treatment disputes; not to be used for general
utilization review as provided under Wis. Admin. Code
§81.01(1)(b). The guidelines
have been in effect since November 2007 and the department has experienced
no major problems with them.
experts really render the opinions on PTD due to loss of earning capacity
and the department makes the decision on whether an injured worker is PTD. Management has provided no studies to show occupational medicine
doctors render better opinions than treating doctors, save money, or result
in more efficiencies in the system.
#7. The Certification of Readiness (COR) process is being studied
currently by a committee of attorneys. The department is making efforts to implement some changes in the
process including modifying the COR form. The department’s internal reforms address the concerns in this
#8. The burden should not be placed on the employee; the current law
The department is working on this
issue and the WCAC should let them handle this issue.
#10. Labor cannot
consider changing the PTD odd-lot standard to a statutory PTD standard. It is impossible to enumerate all medical conditions that would apply
in cases of PTD. The decision of
an ALJ can be appealed. No labor
market exists for employees with residual skills. Mr. Beiriger commented that employees must be permanently unable to
work. Young workers are being
deemed PTD. Management wants
employees to be preparing for work and attending retraining if possible. Labor is asking for more benefits for PTD employees, without
providing a solution to pay for them.
#11. There is full agreement on the language of this proposal.
13. The department is already
dealing with this issue through a focus group.
Doctors will probably not agree to
cross-examination; this will discourage doctors from participating in tiebreakers. There are only about 12 cases per year involving tiebreaker opinions.
The parties can rebut the tiebreaker doctor’s conclusions.
#15. Labor agrees with this proposal.
#16. This is a matter of contract law; Labor does not want to interfere
with private contracts. The
department has received letters from employers asking the WCAC not to
interfere with contracts, but to take the issue to the Legislature as it
involves business practices in this state.
proposal priorities are as follows:
#1. This proposal involves PPD benefit increases of $15 per year for two
#2. This proposal
involves an increase in supplemental benefit rates for two years along with
a study of funding sources.
#3. This proposal
involves providing employees with tuition and books for retraining to return
them to the workforce.
proposes to study payment of prosthetics, inclusion of the value of health
insurance in worker’s compensation benefit rates and
PTD supplemental benefits.
proposal provides for no deduction in disability benefits during retraining
when an injured employee is also earning wages.
Labor and Management adjourned to closed caucus at 1:30 p.m.
and returned at 4:55 p.m. Mr. Kent
reported Labor and Management were still working on an agreement and will
need to continue to do so at the next meeting. There is some agreement on Management’s proposals, but there needs to
be movement by Management on Labor’s proposals. There was a productive discussion on high priority issues. Mr. Metcalf reminded the WCAC that the Department is available to
provide assistance. Monday, September 19, 2011 at 10:00 a.m. will be reserved as
a tentative meeting date to be held via teleconference. If the WCAC has an agreement on the terms of an agreed bill at the
next meeting, a draft of the agreed bill may be ready for review by that
- Adjournment: Motion by Mr. Beiriger, second by Mr. Kent to
adjourn. The motion carried unanimously and the meeting was adjourned at
approximately 5:00 p.m.
Next Meeting: September 12, 2011