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Compensation Advisory Council
Council on Worker’s Compensation
February 1, 2007
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
- 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.
- 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.
- 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
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.
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
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,
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.
Correspondence: There is no new correspondence to review.
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.)
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
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
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.
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.
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.