Council on Worker’s Compensation
Meeting Minutes
GEF-1 Building
Madison, Wisconsin
April 9 , 2013

Members present:; Mr. Beiriger, Ms. Bloomingdale, Mr. Brandl, Mr. Buchen, Mr. Redman, Mr. Ginsburg, Mr. Kent, Mr. Metcalf, Ms. Nugent, Mr. Schwanda, Mr. Collingwood and Ms. Thomas

Excused: Mr. Brand, Ms. Pehler

Staff present: Mr. Ezalarab, Mr. Krueger, Mr. Aiello, Mr. Moreth and Mr. O’Malley

  1. Call to Order/Introductions: Mr. Metcalf convened the Worker’s Compensation Advisory Council (WCAC) meeting at approximately 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. Kent moved to approve the minutes of the February 12th, 2013 meeting as corrected, seconded by Mr. Beiriger. The minutes were unanimously approved.

    Ms. Bloomingdale moved to approve the minutes of the March 12th, 2013 meeting, seconded by Ms. Nugent. The minutes were unanimously approved .

  3. Worker' s Compensation Healthcare Costs: Dr. Theodore H. Gertel gave a presentation about the challenges faced by orthopedic surgeons when treating patients with work-related injuries. Dr. Gertel has been practicing for 24 years as an orthopedic surgeon. Dr. Gertel specializes in the treatment of sports injuries and work-related injuries of the shoulder, elbow, knee and ankle. He is a partner in the Milwaukee Orthopedic Group Ltd. He is also a Fellow in sports medicine.

    Dr. Gertel was the physician for Homestead High School when they won two state championships. He also served as the team doctor for Marquette University Men’s Basketball team and he was also the team physician for the Milwaukee Brewers, Milwaukee Admirals Hockey Team and Milwaukee Rampage.

    When he was in training, Dr. Gertel was warned to avoid treating worker’s compensation patients. He discussed what was wrong with worker’s compensation. According to meta analysis, patients are more likely to have poor results with work-related injuries. In a study from 1980 to 2007 covering shoulder injuries, the study showed that work-related injuries were a predictor of poor functional outcomes. It is a challenge for orthopedic surgeons to determine if this was due to secondary gain or malingering. There are many obstacles that are dealt with when treating patients with work-related injuries. There is a great deal more time needed to care for injured workers than just dealing with the mechanism of injury. The extra time is for dealing with forms and dealing with case managers. Attention to detail takes a great deal of time. Orthopedic surgeons are also subject to scrutiny by insurance companies since they tend to want to always look over your shoulder.

    IME’s are examinations that cover causation, treatment, restrictions and end of healing of injured employees. According to patients, IME’s are brief and rough exams. The IME’s find that the condition is not work related, end of healing, and return to work without contacting the employer without reviewing a position description. The IME creates an adversarial relationship. Employers and insurance carriers create conflicts that cause more IME’s.

    It is difficult to deal with employers when there are complaints. Employers do not honor restrictions on the injured employees. Some employees may be required to come to work with nothing to do. Dr. Gertel related an incident about a patient who said the employer put him to work only counting paper clips. Some employers do not want employees to return to work until they are able to do their regular job without restrictions.

    There is so much litigation in workers compensation cases because insurance companies look for any reason to deny claims. It is hard to deal with insurance companies about workers compensation claims. They try to avoid them. There are relatively poor outcomes.

    Dr. Gertel’s approach is to willingly and enthusiastically treat injured employees. He is concerned about what is in the best interest of the employee. Dr. Gertel covered three steps to achieve a high success rate in treating injured employees.

    1. An accurate diagnosis and evaluation as soon as possible with no delay in testing.

    2. Formalize a treatment plan that allows for a safe return to work.

    3. To design an effective gradual return to work program.


    Dr. Gertel stated the proposed changes will be harmful for access to care for injured workers. When he started practicing in Massachusetts doctors were leaving the state in droves. Wisconsin was one of the best places to practice because it has one of the best worker’s compensation systems in the U.S. The Massachusetts reform law in 1991 set the fee schedule too low. The effect on treatment was costly. With reimbursement steadily declining for workers compensation patients, there’s been less access to treatment. In Wisconsin current reimbursement for treatment for workers compensation patients is fair and reasonable when considering the time involved, extra work and challenges. Some doctors will not take workers compensation patients if reimbursement is reduced.

    Mr. Brandl asked if Dr. Gertel was against a fee schedule. Dr. Gertel responded the current system is fair and reasonable. Dr. Gertel stated that if drastic changes are made in payment for health care services he and his partners will not longer treat patients with work-related injuries and can fill the medical practice with non-worker’s compensation patients.

    Ms. Bloomingdale stated there was good return to work in Wisconsin and inquired of Dr. Gertel if it was fair to set a fee schedule at 175% of Medicare costs. Dr. Gertel responded there was no question that many doctors will not treat workers compensation patients but it is difficult to say the number of doctors who would not treat patients. There is no exact percentage but it would be a significant one.

    Dr. Gertel’s practice involves less than 10% of Medicare patients, 30% of worker’s compensation patients, 40-50% sports injury patients and the rest are general orthopedic patients. Dr. Gertel’s practice does not take patients for joint replacements. The Medicare reimbursement for joint replacements is extremely low. Many doctors will not take patients where Medicare is the payor. Some doctors limit the number of Medicare patients or will not see any new Medicare patients. Some doctors dropped out of Medicare altogether. Some doctors are better at taking care of workers compensation patients than others.

    Dr. Gertel attended courses that provided education on the worker’s compensation law. He believes this is important for other doctors who treat worker’s compensation patients to attend. This education would include the disability system and how to use it. Many doctors have no idea how to fill out the WKC-16 forms. There should be more categories for minimum disability ratings like for meniscus tears. There is no minimum disability rating for a rotator cuff tear with 5 anchors and there should be a minimum disability rating that can be upgraded for bad results. Some conditions need surgery immediately. These patients should not be sent for physical therapy for a long time when there is an immediate need for surgery. It is important to have patients treated by the right doctor who will administer the right treatment. This will cut down on unnecessary lost time from work and should be included in guidelines.
  4. WC Healthcare Costs: Connie Kinsella from the UW Hospital & Medical Foundation gave a presentation on the provider prospective of healthcare costs. She welcomed the opportunity to participate. Healthcare providers are part of the problem and are also a part of the solution.

    Ms. Kinsella commented that the proposal to limit prices for implants at cost plus 10% increase is not feasible. Worker’s compensation is burdensome because of the cumbersome administrative process. The invoice for implants does not travel with the implant and does not get to the billing office with the charge. To do this would preclude the use of electronic claims billing. This adds cost to burden the administrative process. Worker’s compensation is the single most administratively burdensome because it is the costliest in billing, the costliest for collection and is the slowest payer. Worker’s compensation does not accept electronic claims. It is possible to reduce costs for worker’s compensation billings by going the way other health insurance payments are made. It takes 70 some days to get paid for treatment for worker’s compensation patients, 90% of the time it takes 14 days for payment from Medicare and 90% of the time it takes 7 days for payment from health insurance. Medicare and health insurance are highly automated and Worker’s compensation does not operate efficiently as Medicare does.

    A fee schedule based on 175% of Medicare payments will not be feasible. Worker’s compensation does not act like Medicare and why should it get Medicare rates. To get savings without a fee schedule there needs to be a relationship with the provider and payer. With the provider and payer with prior authorization, managed care, and they need to be partners in the case. Worker’s Compensation insurers need to act like other health insurers. No health care provider charges as much as they could.

    For the UW Hospital 30–32% of bills are paid by Medicare, 8–10% by medical assistance, 5% are uninsured and about 54% group health. Worker’s Compensation is less than 1% at .83% of the business. For some physicians at UW Hospital, Worker’s compensation is about 30% of their business. These include orthopedics, surgeons, anesthesiologists and rehabilitation medicine.

    The proposed changes to the treatment guidelines take the judgment out of the treatment by the physician. The physicians do not get paid if they do not follow the treatment guidelines. It is also hard to keep treatment guidelines up to date with ever changing medical procedures.

    From the providers perspective there are opportunities to reduce costs by becoming more efficient, not just shifting costs. There are opportunities to lessen administrative burdens. The health care providers want quality care at fair and affordable costs.

    Lynn Steffes from Wisconsin Physical Therapy Association via Steffes and Associates Consulting Group gave a presentation on healthcare costs from the physical therapist perspective. Ms. Steffes is a physical therapist with 30 years experience. She recently received her doctorate. It costs more for worker’s compensation services and not other medical or group health services. Medical and group health services do not analyze patients as much. Physical therapists do a more intensive job in treating injured employees. In states where fee schedules were implemented physical therapists are not taking worker’s compensation patients.

    Physical therapy is an evolving profession. Physical therapists started with a bachelors degree and then needed to have a masters degree. Now the trend is for them to get doctorates and have specialties in orthopedics or sports medicine.

    Physical therapists evaluate patients when they come in the door and then do diagnostic and capability testing to get them back to work or may identify a need to have them referred to a specialist. The literature emphasizes getting patients in for treatment sooner -prompt referral - so they can get out and return to work sooner. Physical therapists have a strong role in evaluating patients, putting them on light duty, ergonomics and job modification. Sometimes people need surgery and delays in seeking treatment can be costly.

    No one wants a fee schedule based on Medicare. The databases should not work in such a cloak and dagger manner. The American Physical Therapy Association has studied state WC fee schedules and when compared to Medicare it is up to 260% of Medicare charges.

    It is hard to keep treatment guidelines up to date. There will be low utilization of treatment guidelines for rehabilitation. Treatment guidelines cover evaluation, management and chiropractic treatment. There are problems with agreements for payments on both ends. Under current law employers cannot direct care. Injured workers may not have access to providers in restricted treatment networks- especially in northern Wisconsin . This can limit access to clinics that treat worker’s compensation patients. Ms. Steffes expressed the WPTA's desire to work with the Council on finding a resolution to rising healthcare costs. Consideration of the WI database, benchmarks from other states and medical provider input has the best  opportunity to result in a reasonable fee schedule.

    Dr. Jeff Wilder made a presentation on healthcare costs. He has been a practicing chiropractor for 32 years. He treated many worker’s compensation patients. He served with the Department’s board of chiropractic experts for review of necessity treatment disputes. He reviewed the WCRI data and that shows Wisconsin has great outcomes compared to other states.

    As a healthcare provider, Dr. Wilder can be objective. Dr. Gertel discussed how the worker’s compensation system falls down. The only objective party is the healthcare provider.

    With the proposed fee schedule based on 175% of Medicare charges Dr. Wilder’s business would be in trouble. He could not do the same work for 40-45% less. Medicare fees get dropped 2% as a result of the recent budget sequestration by the Federal government.

    Dr. Wilder feels strongly against Management Proposal #3. All objectivity is lost if this is adopted. IMEs are a particular sense of frustration in the system. Healthcare providers never get informed that the injury is compensable and payments are held up while the investigation is conducted.

    Dr. Wilder uses the current treatment guidelines for necessity of treatment disputes. He is against making the treatment guidelines more mandatory than they are now.

    For the health care service fee issue, Dr. Wilder commented about the certified databases. He suggested the use of one certified database and that it should be transparent. He recommended the use of the database to regulate outliers. Dr. Wilder commented if practitioners follow existing treatment guidelines they will get paid for their services. He recommended that doctors should get formal training about the system.
     
  5. Self-Insurers Advisory Council Proposals: Jill Joswiak, Chairperson of the Self-Insured Advisory Council and Mr. Joe Moreth, Section Chief of the Self-Insurance Program presented proposals for amendments to Ch102, Stats. and DWD 80 of the Wisconsin Administrative Code recommended by the Self-Insurance Advisory Council.

    Administrative rules pertaining to self-insurance were last updated in the 1990’s. The Self-Insurance Advisory Council formed a workgroup to revise and update the statutes and administrative rules governing self-insurance. The workgroup identified seven issues for proposed amendments. The proposed amendments were unanimously approved by the Self-Insurer’s Advisory Council on April 3rd, 2013.

    1. Amend section 102.28(7), Stats. and DWD 80.40(1) of the Wisconsin Administrative Code to provide that all assessments against self-insured employers for insolvency will be made on a pro rata basis by payroll. Under current law assessments are based on equal shares for the first year, then on a pro rata basis by payroll for any subsequent years.


    2. Amend DWD 80.60 (4) (d) 7 to clarify that excess insurance may be required by the Department. The current wording in DWD 80.60 (4) (d) 3 and 7 contains conflicting language. The proposed amendment will eliminate this conflict and clarify that excess insurance is a mandatory requirement for non-political subdivision employers to be self-insured for worker’s compensation liability
    3. .

    4. Create DWD 80.60(4)(d) 8 of the Wisconsin Administrative Code to require that excess insurance carriers remain liable if the self-insured employer defaults.  Some excess policies currently include such language and this proposal is to make it clear that the excess carrier remains liable when a self-insured employer defaults.


    5. Amend DWD 80.60(4)(d) of the Wisconsin Administrative Code to specify that surety bonds are to be written on forms approved by the Department.  The current rule provides that surety bonds be written on forms to be approved by WCRB or OCI but neither of these entities approves the bond forms. The Department is also added as an approving agency because the surety bond forms are authored by the Department.


    6. Amend DWD 80.60(4) and 80.61(2)(b) of the Wisconsin Administrative Code to state that applications for renewal of self-insured status are to be submitted to the Department 60 days prior to the expiration of the order and that applications for partial-insurance and divided-insurance are also to be submitted 60 days prior to the order of expiration.


    7. Amend DWD 80.60(4)(b) 2 and 9 of the Wisconsin Administrative Code to allow the Department to choose the appropriate entity (ultimate or top parent company) in the corporate structure from which to require a parental guarantee. The rationale for this proposal is to allow the Department to have the discretion to require a guaranty from one or more entities in the corporate structure with a stronger financial condition and that may be domiciled in a country with a better legal environment.


    8. Create s. 102.28 (2 ) (bm), (cm), and (7) (bm), Stats., amend sections 102.28(2)(a) and (7)(b), Stats., DWD 80.60(3) and DWD 80.61(1), (b) of the Wisconsin Administrative Code to eliminate the Self-Insurers Advisory Council from the process of approving self-insurance status of political subdivisions, political sub-divisions will not be not responsible for assessments to the self-insured employers liability fund, and that employees of the political subdivisions will not be eligible for benefits from the self-insured employers liability fund.
  6. Correspondence: Mr. O’Malley reviewed the correspondence received by the WCAC since the last meeting.

    A letter was received from Mr. Randy Tietz, Chief Operating Officer, Neosho Trompler Inc dated March 28th, 2013 expressing support for the proposals made by Wisconsin Employers for Equitable Workers Compensation at the public hearing held in December, 2012. Mr. Tietz is highly concerned about our worker’s compensation rates going forward and the impact on the cost of doing business in Wisconsin.
     
  7. State Budget Chapter 102 Items: Mr. O’Malley discussed proposed changes in Chapter 102, Stats contained in Assembly Bill 40 (biannual budget bill). A proposed amendment to Section 102.07(17m), Stats defines a participant in a trial employment match job under section 49.147(3) as an employee of any employer for whom the participant is performing services at the time of injury. An amendment to Section 102.75(1) was proposed to add a cross reference to section 20.445(1)(ra) to include the assessment for worker’s compensation operations of the Labor and Industry Review Commission to constitute a separate nonlapsible fund.

  8. Database Audit Committee:

    Mr. Metcalf reported that the audit is moving forward and the report from the auditor will be presented at the Council’s meeting in May.

  9. Permanent Total Disability Study Committee: Mr. Aiello updated the progress of the Permanent Total Disability Committee. The last meeting of the committee was held in November, 2012. Mr. Aiello went over the data covering the numbers of cases received by the Department claiming compensation for permanent and total disability from October 1, 2012 through March 31, 2013. Mr. Aiello stated there were 1,918 cases received with a completed COR. 273 cases were received claiming permanent & total disability, representing about 14% of all cases received. The Department will continue to follow the 273 cases to determine if they are resolved by litigation, compromise agreements or finding of fact orders.

  10. Work Injury Supplemental Benefit Fund: Mr. Krueger provided financial information on the WISBF and reviewed the revenue expenditures and cash balance of the Fund through April 8, 2013. Mr. Krueger stated that the encumbered amount on known claims of the WISBF has exceeded 100% of the cash balance. He stated that reimbursement for supplemental benefits submitted for 2013 have not been paid. At this time there is approximately $2.5 million pending for supplemental reimbursements received for 2012. All other benefits due from the WISBF will be paid. The Department will file notice with the Secretary of the Department of Administration because the cash balance is more than 85% encumbered. More requests for reimbursement for supplemental benefits are expected before the end of the fiscal year. Most requests for reimbursements for supplemental benefits are received in the months of May and June.

  11. Other Business:   Mr. O’Malley discussed a data study conducted by the Department on the fiscal impact a three year statute of limitations would have on the WISBF. A handout summarizing this data study was distributed. The data study was conducted with the assistance of the Wisconsin Compensation Rating Bureau (WCRB).The methodology used by the WCRB was to query unit statistical data for work-related occupational diseases, plus injuries to the eye, using codes for certain Body Part, Cause and Nature of injuries. The codes that were used are listed on the handout. The WCRB query was run to obtain both indemnity and medical expense payments made on claims more than three years following the injury date. The time period included unit statistical data for claims occurring in calendar years from 1998 through 2010.The data study showed the total charges for indemnity and medical expenses paid more than three years after the date of injury to be $116,053,346.

    The data study from the WCRB did not include information from self-insured employers. With approximately 10% of Wisconsin’s workforce currently employed by self-insured employers, it was a reasonable conservative estimate to add an additional 10% to the WCRB data totals to take in to account injuries sustained by employees working for self-insured employers. This accounted for an additional $11,605,335.

    The data from the WCRB did not include traumatic barred claims because the coding system did not lend itself to accurately query that data. Based on information from the Wisconsin Department of Justice there are approximately 50 barred traumatic claims pending against the WISBF. Excluding eye injuries these claims are conservatively reserved at $2.8 million. With the Statue of Limitations reduced to three years and based on past claims experience,  the cost projection or barred traumatic claims would be approximately $11.2 million. The estimated WISBF liability is $138,858,681 according to this study.

    There was a motion made by Mr. Beiriger, seconded by Ms. Bloomingdale to adjourn to closed caucus..The motion carried unanimously and the WCAC went in to closed caucus at approximately 12.20pm.

    WCAC reconvened in open session at 1:25pm.

    Mr. Beiriger stated that the Management members had no objection to the self-insurance proposals. Ms. Bloomingdale stated that the Labor members did not see any problems with these proposals but wanted to review these more carefully and hold these proposals to the next meeting before voting for approval.

    Mr. Beiriger inquired if there would be any other proposals offered. Mr. O’Malley stated that after the auditor’s report is available the Department may have some proposals related to the certified databases. Mr. Metcalf stated the Department may also have an additional proposal related to providing excess insurance for the Uninsured Employers Fund. Mr. Beiriger mentioned there remained to be issues with the sports officials and the high deductible plan (loss reimbursement).

    Mr. Beiriger distributed a handout that provided comparisons with the proposed fee schedule based on a 175% of Medicare payments to the current maximum allowable charges in Wisconsin with the 1.2 standard deviation, Illinois, Minnesota , and three private group health plans.

    For physical therapy CPT Code 97001, for physical therapy evaluation, the maximum charge permitted in Wisconsin according to the 1.2 standard deviation in the certified databases is $340.89.The maximum allowable charge in Illinois is $114.44, the maximum charge in Minnesota is $132.09, 175% of Medicare is $127.28 and the three group health plans range from $107.66 to $146.72.

    For chiropractic manipulative treatment, CPT Code 98940, the maximum allowable charge currently in Wisconsin is $62.54.The maximum charge for this in Illinois is $54.29, in Minnesota $46.72, 175% of Medicare is $38.22 and the charges from group health range from $16.73 to $29.93.

    For evaluation and management, CPT Code 99213, the maximum allowable charge currently in Wisconsin is $175.59.Other maximum charges are $68.58 in Illinois, $84.71 in Minnesota, 175% of Medicare is $82.59 and the range of charges in group health is from $50.56 to $122.92.

    Ms. Thomas questioned if the charge amounts for the group health plans included co-pays. Mr. Beiriger stated the charge amounts on the handout are for the payment that was required. The data on the group health plans is from self-insured employers and this is the total amount paid to the provider.

    For shoulder arthroscopy, CPT Code 29826, the maximum allowable charge in Wisconsin is $6,283.89.Other maximum charges for this procedure are $3,190.56 in Illinois, $1,116.97 in Minnesota, and the group health plans are $1,358.31, $1,271.51 and $1,294.87.175% of Medicare for this procedure is $289.29. That is why the Medicare charge for this is blacked out on the handout. This very low amount paid by Medicare creates a problem.

    For neuroplasty of the medial nerve, CPT Code 64721, the maximum allowable charge in Wisconsin is $4,446.97.The other maximum allowable charges for the procedure are $1,661.84 in Illinois, $688.58 in Minnesota, $721.50 based on 175% of Medicare.

    Mr. Beiriger stated this proposal did not make a blanket application of 175% of Medicare on all procedures. Management members will continue to work on ideas to deal with very low numbers like this for the shoulder arthroscopy. Charges based on 175% of Medicare is the best proposal that we have. These charges are comparable to what is paid in neighboring states and by group health plans. Absent directed care there is no way to provide enough in payment to get providers to accept worker’s compensation patients.300 procedure codes would cover about 90% of all treatment charges for injured workers.

    Mr. Beiriger provided a handout that included the statute of limitations of all the states in the country. Wisconsin is an outlier on the length of the statute of limitations. Management’s proposal to shorten the statute of limitations to three years is based on the way claims are reserved for employers by insurance companies. Under the current law it is possible 11 years and 364 days after the last day of treatment for an employee to go back and say that further treatment is needed for the injury. Twelve years is a long time for this. In reserving claims insurance companies are aware that claims may be made twelve years after the injury. This can result in a high dollar amount reserve for payment of a claim. Employers in the form of insurance premiums pay for benefits not ever paid out to injured workers. Employers should pay for what is actually paid out.

    Mr. Beiriger discussed management’s proposal for changes to the treatment guidelines to clearly state what treatment is allowable. Reference to other guidelines such as ACEOM may be useful. A third party claims reviewer to review any disputes involving applications of treatment guidelines may be useful so individuals will not have benefits delayed. Healthcare providers need to know if treatment will be paid for and have quick resolutions to resolve disputes. There must be a way to expedite hearings, and to accelerate decision making for the benefit of employees. With changes to the treatment guidelines we want decisions to be made fast and the outcomes based on medicine in Wisconsin. This will be good for employees, employers and insurance companies and this is what is used by group health plans. Physicians come up with the treatment guidelines and this is in the best interest for everyone. We want to encourage physicians to treat injured employees based on guidelines set by physicians. The system in place now is to have treatment guidelines but we want the guidelines treated as treatment parameters. If it makes sense to treat an employee outside of a parameter, it is important to make a decision about approving treatment sooner and to expedite the process. Mr. Beiriger stated that the Council would work with the provider community on the treatment guidelines.

    Mr. Beiriger discussed Management Proposal #8 about the apportionment of pre-existing disability. California has a statutory provision covering apportionment of pre-existing disabilities. Mr. Beiriger provided a handout with California Labor Code Section 4663 that provides requirements for physicians who prepare reports assessing permanent disability to include apportionment of permanent disability that was caused by a direct result of the injury and the approximate percentage of permanent disability that was caused by other factors.

  12. Adjournment:

    Motion by Mr. Schwanda, second by Mr. Beiriger to adjourn. The motion carried unanimously and the meeting was adjourned at approximately 2:30 p.m.

  13. Next meeting: May 14, 2013
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