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Council on Worker's Compensation
December 3 , 2013
Mr. Beiriger, Ms.
Bloomingdale, Mr. Brand, Mr. Brandl, Mr. Buchen, Mr. Ginsburg, Mr. Kent, Mr.
Metcalf, Ms. Nugent, Ms. Pehler, Mr. Redman, Mr. Schwanda, Ms. Seiler and Ms.
Staff present: Mr. Aiello, Mr. Ezalareb, Mr. Krueger, Mr. Moreth and Mr. O'Malley
- 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
Approval of Minutes:
Ms. Bloomingdale moved to approve the minutes of
the November 12, 2013 meeting.
Mr. Beiriger seconded the motion.
The minutes were unanimously approved.
O'Malley reviewed the correspondence received by the WCAC since the last
A letter dated November 12, 2013 was received from Mr. Theodore K. Nickel,
Commissioner of Insurance commenting about the letter dated September 30,
2013 from several legislators recommending the Council consider a number of
changes to the Wisconsin's Workers Compensation Program.
An email message dated November 24, 2013 was received from Mr. Robert Hurley
concerning his 1982 low back injury and that his only income is now from
monthly worker's compensation and supplemental benefit payments.
He is requesting the Council's assistance in receiving a cost of
living increase this year and to make future cost of living increases
An email message dated November 26, 2013 was received from Mr. Stephen
Schneider, VP, Midwest Regional Office, American Insurance Association
urging the Council to adopt a fee schedule based on the Medicare system
rather than the implementation of any non-Medicare fee schedule based
system. Mr. Schneider also commented that enactment of the Florida physician
dispensing system would increase the cost problem in Wisconsin and not
A letter dated November 26, 2013 was received from Mr. Richard Victor,
Executive Director of the Workers Compensation Research Institute (WCRI) to
clarify the findings of the WCRI's study that was referenced in a letter to
the Council from Automated HealthCare Solutions dated October 29, 2013
regarding the cost of physician dispensing.
A letter dated November 29, 2013 was received from Helen Knight, VP,
CompPharma LLC strongly encouraging the Council's support for limiting or
eliminating physician dispensing of prescribed drugs
- Other Council Business:
Labor and Management
representatives went in to closed caucus at approximately 10:15 a.m.
There was a motion by Mr. Beiriger, seconded by Ms. Bloomingdale
to go in to closed caucus at that time. The motion was unanimously
The WCAC reconvened in open session at approximately 1:15 p.m.
Mr. Beiriger discussed the proposals made by the Management
representatives in addition to some other proposals.
Mr. Beiriger thanked everyone for their input and patience in
The issue that is a sticking point is whether to use a medical fee
schedule based on Medicare for cost containment purposes.
In March, the Management representatives made a proposal for a
medical fee schedule to be established based on 175% of Medicare
payments. There may be some
misunderstanding by the use of the term Medicare.
The intention was to use Medicare as a measuring stick to
determine how many units would be needed to pay for a treatment.
It was never the intention of the Management representatives to
use the Medicare charge or cut that in half.
The Management representatives want to approximate the payments that are
made in the privately negotiated group health care market.
It is difficult to start this on January 1, 2014.
The Management representatives propose implementing a two-step
solution. One step is for a
permanent cost containment process to be in place in the next 18 months.
The other step is to reduce the standard deviation from 1.2 to
.70 standard deviations above the mean.
With the standard deviation reduced to .70 about three fourths of
all claims will be paid without reduction.
Now with using 1.2 standard deviations above the mean payments
are made in about 88% of all claims without reduction.
Reducing the standard deviation to .70 will involve about 13% of
additional claims for fee capitation.
The current process of using the databases should continue until the
Department can develop and implement a fee schedule.
The Department is charged with developing a medical fee schedule
by June 30, 2015.The fee
schedule will be based on average payments made by group health
insurance carriers plus 10% above that amount.
The fee schedule will be set up with five geographical regions.
The fee schedule will be adjusted each year based on the medical
CPI. The fee schedule will not go longer than two (2) years before the
data base would be compared again to the group health insurance market
to reload a new set of numbers based on the market at that time.
A number of sources are available now or will be online soon for
data to obtain actual amounts paid for various CPT codes that are used
in group health.
There are higher cost and lower cost health care providers.
We need to investigate the outcomes of treatment achieved by
different providers. When the
outcomes are superior the health care providers should be awarded more
for providing superior outcomes. We should look to the outcomes and
study these. There could be 5 to
10% higher payments to providers with superior treatment outcomes.
The Management representatives want employers to be able to
direct care for injured workers.
The Labor representatives want employees to make their own choices.
It would help to have more information on outcomes.
There should be a way to pay providers more for superior
outcomes. It will be a challenge
to look at data for outcomes but it needs to be done.
Although reviewing outcomes is not done today, we need a study
group to consider this in the future.
The more information that can be collected about outcomes will
help both Management and Labor continue to make good choices.
The Management representatives would like the treatment guidelines to
become parameters. The parameters
could be used by providers about how to practice medicine.
That is what happens in the private health care market.
We should ask the Department to report periodically to the
Council on utilization rates, billing patterns and cost drivers that are
part of the system. The purpose
of treatment parameters is not to tell doctors what to do but they are a
cost containment provision.
There have been ideas on how to address fraud. The Management
representatives agree on funding a position at the Department of Justice
to prosecute fraud in the worker's compensation system by employees,
employers, health care providers and insurance companies.
Section 943.395, Stats., could be amended to be used to prosecute
The Department needs expertise in the medical area.
This position could be used for evaluating fee schedules, medical
bill review and utilization review .
There is no position to assist the Department and the time has
come to take this step.
The Management representatives proposed reducing the statute of
limitations from 12 years to three years.
It would save significant expense if this was done.
The Management representatives have revised their proposal and
now propose a six year statute of limitations for traumatic injuries
only. Te statute of limitations
was increased in the past to address occupational diseases.
The twelve year statute of limitations should be maintained for
Reporting traumatic injuries within one year was proposed by the
There is a need to obtain more
money for the WISBF. There should
be a permanent bar for reimbursement of supplemental benefits.
There is a need to provide a process for covering costs for the
reimbursements. Future costs for
indexing permanent total disability claims can be built in to the
premium rate structure but cannot go back on charging premiums.
Cost for reimbursement should be spread as broadly as possible.
The fee for providing digital medical records should be $26.00.
The Management representatives agree to all of the proposals from the
Mr. Beiriger, on behalf of the Management representatives, responded to
the Labor proposals.
The Management representatives agree to extend the sunset for two years
on the vocational rehabilitation training statute.
There is a need for additional time to determine how this
provision is working.
The Management representatives agree with authorizing administrative law
judges to issue prospective orders on cases for rehabilitation benefits
to those employees whose permanent restrictions cannot be accommodated
by their employer to within 85 % of their pre-injury wage.
Management is still considering the Labor proposal for a bump up in the
permanent total disability rate.
The Labor proposal for the social security offset amount as a way to
respond for additional money in to the WISBF was also considered but
Management suggested finding an alternative means to take supplemental
benefits off that fund.
Management is agreeable to the Labor proposal for the two year increase
to the permanent total disability (PTD) rate.
A longer term solution is needed for PTD indexing.
The Council has continued to listen to requests from injured
employees to increase the benefit rate.
The Council has made great strides and great progress to bring
the benefit rate up and we will continue to discuss this on an annual
Management will continue to look at the Labor proposal for the revision
of the permanent partial disability (PPD) rate after 200 weeks to
increase the benefit rate to the current benefit rate at that time.
Management is continuing to look at the Labor proposal for the
continuation of health care coverage after twelve weeks at the same rate
as the employer provided pre-injury.
If the employer paid 75% of the premium for health insurance and
the employee paid 25% for this, employers would be required to continue
the health insurance coverage for the length of an employee's healing
period. Where both employers and
employees make payments it will be the responsibility of employees to
maintain coverage. The intention
is to continue what the employer was doing for health coverage
The Management representatives feel responsible to get back to the
legislators about their proposals.
We will try to respond in very short order.
A motion by Mr. Beiriger to approve the proposed legislative and rule
changes from the Self-Insurers Council. Ms. Bloomingdale seconded the
motion. The motion was unanimously approved.
There was a motion by Ms. Bloomingdale, seconded by Mr. Beiriger, for
the Council to go into closed caucus at approximately 1:45 p.m. The
motion was unanimously approved.
The Council reconvened in public session at about 6:25 p.m.
Ms. Bloomingdale responded to the suggestions made by Management.
Ms. Bloomingdale stated the Labor representatives agree to the two-step
plan proposed by Management for the medical fee schedule.
The Labor representatives are willing to accept step one of the
plan to reduce the standard deviation to .70.The second step of the plan is to charge the Department to create
a fee schedule using average group health rates plus 10% using five
regions in the state. The fee
schedule is to be adjusted by the medical CPI annually and reviewed
every two years. Ms. Bloomingdale
also stated that the Labor representatives would like to have the fee
schedule that is developed reviewed and approved by the Council before
it is implemented. The Department
will get information from Wisconsin Health Information Office (WHIO),
the state health plan, Worker's Compensation Research Institute (WCRI),
data provided by group health insurers or any other credible source.
Labor agrees the PTD rates will be indexed to a six year lag and this
shall take effect for injuries after June 30, 2015.
Labor agrees with the proposal to
create a study group for quality studies and providing bonuses to health
care providers for superior outcomes. This is a good idea.
The study group can also do utilization reviews and can give reports
to the Council.
On the issue of fraud, Labor agrees
there should be funding for a Department of Justice position to investigate
and prosecute any fraud by employers, carriers, providers or employees.
Labor agrees to adding a medical expert to the Department staff for
utilization review or any other reason the Department may need a medical
expert on staff.
Labor agrees to a nine year statute of limitations for traumatic injuries,
but that the statute of limitations for occupational illnesses will remain
at twelve years. The Labor
representatives also agree on keeping the two year time period to make a
claim for traumatic injuries.
Labor agrees to permanently suspending reimbursement to insurance carriers
for supplemental benefits and the Management representatives will find a
funding mechanism for these reimbursements.
Labor agrees to the $26 maximum fee for providing medical records by
On the issue of dispensing of pharmaceuticals by doctors, Labor agrees to
the fee specified in the Management proposal but wants to strike out the
third paragraph of that proposal. (Management Proposal No. 10)
Labor agrees to the two year extension of the sunset provision on retraining
Labor agrees to the proposal for administrative law judges to issue
prospective orders on cases for retraining and Labor agrees with the
language recommended by Mr. Beiriger.
Labor agrees with a two year bump or advance in supplemental benefit rates
for employees receiving compensation for PTD.
For PPD Labor agrees that the benefit rates will increase by $15 for
each of the next two years, $15 benefit rate increase the first year and
another $15 benefit rate increase the second year.
Labor agrees to PPD benefit rate indexing after 200 weeks.
The next issue that Labor agrees is having employers continue health care
coverage to maintain health insurance at the level of insurance coverage in
effect at the date of injury whether or not the injured worker continues as
an employee during the healing period.
When there is disputed liability the employee will be made whole for
the value of the health insurance coverage through the hearing process.
The effective date for the health care coverage provision will be
June 30, 2015.
There was a motion by Mr. Beiriger to accept the proposals as presented by
Labor as the agreed upon bill for this session.
Seconded by Ms. Bloomingdale.
The motion was unanimously approved.
Ms. Bloomingdale stated that this was a very long and arduous process and
that all involved did a great deal of work.Many compromises were made.
The advisory council process needs to continue because of the importance of
this continuity for the State of Wisconsin. Ms.
Bloomingdale stated that Labor representatives were looking forward to
working with the legislature in passing this agreed upon bill.
Ms. Bloomingdale expressed appreciation on behalf of all of the Labor
representatives for the input received from the Legislature, health care
providers, insurance carriers, worker groups, business groups and to the
Department staff for doing such a fine job of keeping the process on task.
Mr. Beiriger stated that he agreed with Ms. Bloomingdale's comments.
Mr. Beiriger also expressed appreciation on behalf of the Management
representatives to the Department staff and to everyone else who provided
input throughout the process. The
Council has an agreed bill and it is important for us to support the bill
since there are many reasons for both Labor and Management to support the
bill. Mr. Beiriger stated there is a
great deal in the Wisconsin worker's compensation system that is very good
but there were also some other things that could not be ignored and that we
have done a good job in addressing things that are of concern to the system.
Mr. O'Malley stated that he was not certain when the drafter would complete
work in drafting the bill. The
Department will share an estimated time when the drafter will complete work
on the bill when this becomes available.
The next meeting was tentatively scheduled for January 14, 2014.
Motion by Mr. Beiriger, seconded by Ms.
Bloomingdale to adjourn. The motion
carried unanimously and the meeting was adjourned at approximately 6:45 p.m
Next Meeting: January 14, 2014