Website - Division of Worker's Compensation
Email - WC Administration
Website - Division of Worker's Compensation
Email - WC Administration
Members present: Ms. Bean, Mr. Beiriger, Mr. Brand, Mr. Buchen, Ms. Connor, Mr. Furley, Ms. Huntley-Cooper, Mr. Gordon, Mr. Kent, Mr. Newby, Mr. Olson, Mr. Shaver, and Mr. Welnak
Excused: Ms. Vetter
Staff present: Mr. Conway, Mr. O’Malley, Mr. Shorey, Mr. Krueger, and Ms. Knutson
Committee – Mr. O’Malley has completed work on re-drafting the Minnesota
Treatment Parameters to conform to Wisconsin law and rule drafting
conventions. The draft will be sent out to the WCAC members for review. Mr.
Newby asked if the department had an estimate as to a projected amount of
money to be saved by implementing treatment guidelines. Mr. O’Malley
responded that it is not known if there will be a savings.
Mr. Newby requested that the department research the issue of the feasibility of worker’s compensation participating in the state plan for pharmaceutical benefits.
Disability Rates - Mr. Conway indicated the subcommittee’s report was
sent to the WCAC members. A chart condensing the series of options with
estimated costs was distributed. Mr. Welnak requested information on the
cost for the benefit increase options per $100 of payroll (premium costs).
That information is currently not available. Total premium paid in 2005 is
estimated at $1.5 billion. Mr. O’Malley explained that the latest data from
the Worker’s Compensation Rating Bureau (WCRB) is from calendar year 2002,
with $270 million paid in indemnity benefits and $400 million paid in
medical expenses. The data provided to the WCAC includes information on the
amount of revenue needed to pay supplemental benefits for existing permanent
total disability PTD cases. For new PTD cases, the additional benefits will
be calculated into the premium costs. Mr. Shorey explained that under the
current system, there is a 26 year lag between the maximum PTD rate in 1980
compared to 2006. The subcommittee is considering shrinking the 26 year lag
to 6 years so that the older PTD claimants are receiving 80% of the current
maximum PTD rate.
Mr. Shorey explained that the bulk of the Social Security offset occurs during the first 6 years of receipt of worker’s compensation benefits. Mr. O’Malley noted that if the employee earned a low wage, the Social Security offset may extend beyond 6 years. Mr. Shorey noted that if the maximum PTD rate is increased, the Social Security offset may extend beyond 6 years. Mr. David Weir explained that for the first 6 years, the employee receives 80% of the employee’s average current earnings (ACE) through a combination of worker’s compensation and Social Security disability benefits. After 6 years, the employee’s combined earnings go down (the employee is no longer receiving 80% of ACE). Social Security uses the highest years of earnings for the 5 years before the employee was totally disabled in calculating the ACE.
Mr. Buchen requested that the WCD provide cost information for advancing supplemental benefit rate entitlement in five year increments, assuming all other variables are constant (no change in benefit limits or entitlements). He noted that the additional cost would not be built into the premiums collected in the past. Ms. Connor stated that the subcommittee considered a special assessment on all employers to pay for existing PTD claims. Mr. Buchen expressed concern that only employers operating in Wisconsin now would be bearing the cost of the program benefit increases. Mr. Olson commented that Wisconsin is the only state where death benefits are provided if the employee’s cause of death is not due to the work injury (depending on the amount of PTD benefits paid). Mr. Shorey stated that over 200 PTD claimants are over age 65. Mr. Newby requested that the WCD provide data for the next meeting on the issue of the percentage of premium dollars required for payment of PTD benefits.
1. – 7. Involve Professional Employment Organizations
(PEOs). At this time the department is still discussing concerns with the
Office of Commissioner of Insurance (OCI) and the Wisconsin Compensation
Rating Bureau (WCRB). These proposals are tabled until the next WCAC
meeting. Frances reported that NAPEO indicated they planned to attend the
next Council meeting on this topic.
8. The department receives frequent complaints from insurance companies that treating practitioners are requiring pre-payment for the final medical report from the treating practitioner. The final medical report is required under Wis. Administrative Code §DWD 80.02(2)(e)4. The department’s proposal would prohibit the practitioner from demanding pre-payment for the report. Any dispute that arises concerning the fee charged for the report would be resolved under the reasonableness of fee dispute resolution process (Wis. Admin Code §DWD 80.72).
10. The proposed language does not address the situation where the doctor rates permanent partial disability (PPD) based on a percentage of loss. The department will have proposed language to cover this situation for the next meeting.
12. Mr. Newby inquired whether the disclosure of information complied with HIPPA. Mr. O’Malley responded that HIPPA does not apply to the WCD. The proposed language was intended to prohibit re-release of information unless authorized by the department. The draft language is based on language in the Unemployment Insurance statutes. The WCD will confirm that the proposed language is consistent with HIPPA. Mr. Kent suggested that when the WCD agrees to provide data for research, that it should have the right to view the overall result of the study without paying a fee to access it.
A WCD staff member has brought to WCD management’s attention that the
department never developed a form as referred to in Wis. Admin. Code §DWD
80.49(7)(a). However, the department does have a form letter that is sent to
injured workers who have been off work 13 weeks. Mr. Furley stated that
additional information provided to injured workers is beneficial. The
department will develop a form for insurance carriers to send to injured
Mr. Newby requested clarification of the distinction between a temporary help agency and a PEO and the issues surrounding the department’s proposal. Mr. Krueger explained that there are issues surrounding proof of coverage. An employer enters into a contract with a PEO. Currently, there is no procedure for the PEO to notify the department that it is on the risk for those employees and that it is providing coverage. If the employer and the PEO terminate the contract, the department is not notified. The employer is required to immediately have worker’s compensation insurance coverage. However, one PEO went out of business, the employer was uninsured, and 17 claims were filed against the Uninsured Employers Fund (UEF). There is also an issue regarding the experience rating. There is no method to break out the losses for each client. When a client with a high experience rating enters into a contract with a PEO, the experience rating does not stay with the client. The department is currently discussing these issues with OCI and WCRB to arrive at proposed language that would be acceptable to them.