Worker's Compensation Advisory Council

    Meeting Minutes

    Madison, Wisconsin
    June 8, 2005

    Members present:  Ms. Bean, Mr. Beiriger, Mr. Brand, Mr. Buchen, Ms. Connor, Mr. Furley, Mr. Gordon, Ms. Huntley-Cooper, Mr. Kent, Mr. Newby, Mr. Olson, Mr. Shaver, Ms. Vetter, and Mr. Welnak


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

    1. Call to Order/Introductions: Ms. Huntley-Cooper convened the Worker’s Compensation Advisory Council (WCAC) meeting in accordance with Wisconsin’s open meetings law.

    2. Minutes: Mr. Welnak moved adoption of the minutes of the May 11, 2005 meeting; Mr. Beiriger seconded the motion. The motion was unanimously approved.

    3. Review Status of all Proposals: Mr. O’Malley reviewed a draft of the statutory changes recommended by the Health Cost Study Subcommittee regarding a pharmacy fee schedule. Prescriptions would be filled using generic drugs unless the physician indicated on the prescription that a name brand drug be used. The WCAC needs to decide the amount of the dispensing fee. Balance billing would not be allowed. Over the counter medication charges would be limited to usual and customary.

      Mr. O’Malley indicated the current draft of the proposed statutory amendments regarding professional employer organizations (PEO) was a joint effort with the WCD, Office of the Commissioner of Insurance (OCI) and the Workers Compensation Rating Bureau (WCRB). The statutory amendments would have a sunset provision and provide for multiple coordinated policies. Corporate officers would be covered employees unless the officer elects not to be covered if there are 10 or less shareholders. This is in contrast to the WCD’s past position that corporate officers could not be leased.

      Mr. Krueger stated that the National Association of Professional Employer Organization (NAPEO) still has an issue concerning multiple coordinated policies. Mr. Ralph Hermann, WCRB, confirmed that a multiple coordinated policy would preserve an individual employer’s experience rating. Mr. Tim Tucker, NAPEO, stated that the proposal did not constitute a true multiple coordinated policy approach, but rather a pool of individual clients. The policy would be owned by the client and not the PEO. He advocated against this approach.

      Mr. Conway provided additional information on the permanent total disability (PTD) rate proposal. The existing funds in the Work Injury Supplemental Benefit Fund (WISBF) could pay for some of the cost of the increased supplemental PTD benefits. The average payout of benefits from the fund for the last 3 years has equaled approximately $2.5 million per year, while the average payments into the fund have equaled approximately $3 million. Mr. O’Malley explained that assessment amounts for deaths and dismemberments are $10,000. In addition to these sources of income for the Fund, death benefits are paid into the Fund in five yearly installments up to a maximum of $213,000 when the worker had no dependents. Benefit payments out of the Fund are: supplemental (PTD) benefits, barred claims, Children’s Fund and Second Injury Fund. Barred claims include hearing loss, occupational disease and some traumatically induced injuries. The WCAC requested that the WCD present updated information regarding the WISBF balance and payments into and out of the WISBF.

      Mr. O’Malley reported on the WCAC’s request at the last meeting for a proposal from Navitus to provide pharmacy benefit management services for worker’s compensation injuries. Mr. Zimmerman, president of Navitus would be available at the next WCAC meeting on June 22, 2005.

      Mr. O’Malley presented the WCD’s preliminary draft of an amendment to sec. 102.03(1)(c)3 pertaining to activities “arising out of” employment as requested by the WCAC at the last meeting.

      Mr. O’Malley reported that the WCD received a letter from the Wisconsin Chiropractic Association, the Wisconsin Hospital Association, and the Wisconsin Medical Society regarding the WCD’s draft of DWD 80.74 (14) on treatment guidelines. Specifically, the authors propose a change in how the medical panel is appointed. Mr. Leonard stated that the authors wanted to ensure that the role of the WCAC liaisons is preserved.

      Mr. O’Malley reported that he contacted Mr. Jim Pflasterer at the Labor and Industry Review Commission (LIRC) regarding the WCAC’s concern that LIRC would follow the treatment guidelines if adopted. LIRC takes the position that the DWD Administrative Code provisions have the effect of law. The WCD has forwarded the statutory and rule changes approved by the WCAC to the drafter at the Legislative Reference Bureau.

    4. DWD Proposal: DWD Sec. Roberta Gassman presented information regarding the Safe Lift Initiative. This initiative was not approved by the Legislative Joint Finance Committee and has not been referred back to the WCAC for consideration. Health care leads all industries for lost days of work due to back injuries. The proposed initiative would provide for a $500,000 demonstration project to fund matching training grants to providers and a project coordinator. The funds for the project would come from the WCD’s budget. Australia and government health care facilities in other states that have invested in a no lift policy have experienced a significant reduction in back injuries. Ms. Norma Tirado, Wisconsin Society of Health Care Human Resources Professionals, and Ms. Candice Owley, Wisconsin Federation of Nursing and Health Professionals, also commented on the benefits of having a no lift policy and the need for additional training for hospital and nursing home staff. The WCAC was also provided a demonstration of the powered stand-assist lift equipment.

      Management expressed concerns regarding tapping into the WCD’s budget to fund the purchase of equipment or training to benefit select employers.

    5. Discussion/Debate – Submitted Proposals:  Mr. O’Malley clarified that the current provision in sec. 102.11, Wis. Stats., which provides for a maximum compensation rate of 110% of the state’s average weekly earnings will lapse on December 31, 2005 (i.e. the maximum rate will revert back to 100% of the state’s average weekly earnings). In addition, the maximum rate of $242 per week for permanent partial disability benefits (PPD) will remain unless the WCAC includes a provision in the agreed bill to increase it.

      Management’s position (presented as a package):

      • Department proposals 1 through 7 (regarding PEOs) would be held until the next meeting.

      • Labor proposal # 2: Management would agree to increase the bad faith penalty maximum to $25,000 if the 10% late payment penalty would be eliminated if a bad faith penalty were awarded (i.e. no stacking of penalties).

      • Labor proposal #4: Management wants to see a department form developed and ready for use uniformly by all carriers by the effective date of the statute. This would involve education of the carriers. Labor proposes that the language in the WCD’s draft letter referring to the previous year’s earnings be changed to earnings in the previous 52 weeks.

      • Labor proposal #5: Management agrees.

      • Management proposal #3: Management wants the language of sec. 102.03(1)(c)3 to be amended to add after “program” the additional language of “an activity or an event” in the last sentence. Management does not want to change any other language in the current statute.

      • Management proposal #5: Management wants the statutes regarding illegal employment of minors amended to provide that the increased benefits will be paid into the WISBF, regardless of who is at fault.

      • Department proposal # 29 and 30: Management proposes that the department’s draft language be adopted.

      • Department proposal # 33 is rejected by Management.

      Labor’s position:
      • Management proposal #3: Labor agrees with the WCD draft language.

      • Management proposal #5: Labor countered with a proposal that if the employer did something improper, the additional compensation should be paid to the employee; if the employee did something improper, no additional compensation would be due; if neither party were at fault (i.e. mutual mistake) the additional payment would be paid to the WISBF.

      • Management proposal #10: Labor does not disagree with this proposal, however; there are numerous problems in attempting to apply the Code of Judicial Conduct to administrative law judges. The WCAC discussed possible application of the Model Code of Conduct for Administrative Law Judges (by the National Association of Administrative Law Judges) to WCD administrative law judges.

      • Department proposal #10: Labor agreed.
      The WCAC discussed the options presented by the Permanent Total Disability Rate Subcommittee, particularly Option 3. Labor indicated that projected premium increase of .7% would be offset by savings on prescription drugs as proposed by the Medical Cost Containment Subcommittee. Management has not agreed to a specific option for increasing PTD benefits at this time. Management expressed concern that the costs could be significantly higher than projected by the WCD. Labor requested that Management consider an increase in PTD benefits, such as outlined in the options proposed by the subcommittee.
    6. Adjournment:  Discussion on all agenda items concluded and the meeting was adjourned at approximately 4:20 p.m. The next meeting has been scheduled for June 22, 2005 beginning at 10:00 a.m. at the Rodeway Inn in Madison.