Website - Division of Worker's Compensation
Email - WC Administration
Website - Division of Worker's Compensation
Email - WC Administration
Members present: Mr. Bagin, Mr. Beiriger, Mr. Buchen, Ms. Connor, Mr. Glaser, Mr. Gordon, Ms. Huntley-Cooper, Mr. Kent, Mr. Newby, Mr. Olson, Ms. Vetter, Mr. Welnak
Staff present: Mr. Conway, Mr. O’Malley, Ms. Knutson, Mr. Shorey, and Mr. Mitchell
1. Call to Order. Ms. Huntley-Cooper convened the meeting in accordance with Wisconsin’s open meeting law. Mr. Conway introduced Ms. Huntley-Cooper, the new Division Administrator. Ms. Huntley-Cooper commented that many other states have tried to duplicate the Wisconsin advisory council system. Both Mr. Bagin and Mr. Glaser welcomed Ms. Huntley-Cooper on behalf of the Council.
2. Minutes. Mr. Beiriger moved adoption of the minutes of the January 16, 2003 meeting; Ms. Vetter seconded the motion. The motion was unanimously approved. Mr. Bagin moved to accept the December 11, 2002 and June 6, 2002 minutes. Mr. Welnak seconded the motion. The motion was unanimously approved.
3. Discussion of WCD proposals. Mr. Bagin had questions regarding Department proposal numbers 1 and 2 regarding reasonableness of fee and necessity of treatment disputes. Mr. O’Malley explained there is an increase in the number of small reasonableness of fee disputes filed with the Department. To improve efficiencies, the Department proposes that the provider lump together disputes for the same claimant and the same claim to total a minimum of $25. Mr. Glaser asked who would pay the small dispute amount if it was not filed with the Department. Mr. O’Malley indicated that under current law, the employee could not be balance-billed. Further, different CPT code charges could be combined. Mr. Russell Leonard indicated that if a provider submits a bill and the insurer does not use a certified database to appropriately reduce a bill, and if the claim falls within the database guidelines that it should be paid by the insurer. Ms. Knutson explained that not all CPT codes are certified in the approved databases. Some insurers and bill reviewers indicate that charges are reduced by using a certified database, but in reality the particular CPT code is not certified due to the low number of occurrences. Approximately 8% of all reasonableness of fee are for amounts less than $25. Mr. Glaser indicated that he agreed with the concept, but that the proposed language needed to be reviewed. Mr. O’Malley stated that virtually all necessity of treatment disputes were for amounts greater than $25. The Department proposed a change for those disputes to have consistency in the statutes for the two types of medical disputes.
Department proposal # 7 corrects erroneous language in the previous amendment regarding payment of compensation for permanent partial disability when the insurer does not dispute liability (Wis. Stat. § 102.32(6)). Mr. O’Malley explained that the proposed language was the Department’s suggestion to correct drafting errors. Mr. Bagin indicated that the two parties could probably agree on some language.
Mr. O’Malley indicated that Department proposal #8 was intended to correct an error in the previous bill draft. Language referring to permanent disabilities in granting advance payments of unaccrued compensation was omitted. Mr. Glaser questioned if the interest credit was tied to some government rate. He indicated that it was advantageous to the insurer to receive a 7% interest credit. Mr. Bagin indicated that the Council could look at language regarding the rate. Mr. O’Malley indicated that the rate has been 7% for over 20 years. Mr. Bagin commented that part of the rationale for setting the interest rate was to avoid advancement . Permanent partial disability benefits were meant to supplement an employee’s income after the healing period, particularly if the employee could not return to his or her previous employment.
Mr. Bagin expressed concern regarding Department proposal # 9, which increases penalties from $100 to $500 for failure to file required reports or to respond to Department for information. Penalties assessed against frequent abusers could be increased. Mr. Glaser commented that perhaps the Department assesses penalties at the current maximum amount because the administrative costs to assess penalties have increased. Mr. Bagin expressed concern that the Department’s records of failure by insurers to respond are not always accurate. The rescission rate is 70%. If the insurer files a WC-12, then a WC-13 should be sent in later. Mr. Bagin agreed that penalties should be increased for insurers who frequently ignore the system. Mr. Shorey explained that 8,000 no-lost time or denied claims are reported to the Department and this accounts for the 70% rescission rate. The Department is not asking for more information to be reported to the State. The notice to the worker of denial of the claim would not be copied to the Department. Mr. Bagin responded insurers/self-insured employers are concerned with potential under-reporting of claims. But, the WC-13 should be filed within a reasonable time after the WC-12 is filed. Mr. Shorey explained that the Department waits 60 days before issuing a forfeiture. Mr. O’Malley further explained that the proposed amendment of §102.35(1)(b) would give specific statutory authority to the Department to issue rescissions of forfeitures. Mr. Bagin indicated that he had no problem with this proposed change. Mr. Shorey commented that the Department has the most difficulty with non-domiciled insurers that have many third party administrators. For those situations, a $100 fine does not have much of an impact in comparison to in-state companies.
Regarding Department proposal #13, Mr. Bagin asked if all insurers and self-insured employers have the ability to electronically report claims. Mr. O’Malley responded that most companies have the ability to electronically report claims, but that the focus would be on companies that are not meeting reporting standards. Mr. Glaser commented that Unemployment Insurance phased in the requirement based on the size of the employer. Mr. O’Malley stated that the insurance carrier could ask for reconsideration. The Department could also develop some standards before an insurance carrier would be required to electronically report claim information. The intention is not to force all carriers to electronically report claims. Mr. Bagin suggested that there be an exception for small employers/insurers.
Mr. Glaser stated in reference to Department proposal #12 that the time frame for carriers to either make payment or give notice of denial of liability be reduced from 45 days to 30 days. In addition, that the notice be required to cite specific reasons for the denial of the claim, not just a general denial. In looking at the Department proposal, the carrier would be allowed a total of 60 days to provide a notice of denial. Mr. Gordon commented that the notice would need to be given within 14 days that the insurer learns of the injury. Mr. Bagin indicated that sometimes the employer/carrier has difficulty obtaining information and there is a reason the investigation is taking longer. Mr. O’Malley clarified that the Department was proposing a repeal and re-creation of the reporting section of the statute, and that the employee would receive the notice, not the Department. Mr. Bagin questioned how the Department would "police" the reporting requirement. Mr. O’Malley responded that the Department may never hear about it. There have been complaints of breakdowns in communication between the employer/carrier and the employee. Mr. Glaser commented that the employer/carrier should explain to the employee that he/she has the right to a formal hearing. Mr. O’Malley responded that most carriers domiciled in Wisconsin do a good job of informing employees of their rights.4. Submittal of Council Proposals:
Labor Proposals. Mr. Glaser indicated there were issues that needed discussion. Labor’s listed proposals A-D are adopted from public and legislators’ concerns.
Management Proposals. Mr. Bagin introduced the Management proposals.
5. Compensation for Smallpox Immunization: Mr. Conway indicated there were three letters distributed to Council members that expressed concerns regarding coverage of injuries and illnesses related to smallpox. A standard reply has been developed by the Division. Also distributed to the Council was an internet article regarding coverage of smallpox. Mr. O’Malley explained that the Bush Administration proposed a federal compensation program for smallpox that includes benefits of $262,100 for death or permanent disability and up to $50,000 for lost wages with a five-day waiting period. In Wisconsin case law, there is a 1927 case, Vilter Manufacturing, that addresses the compensability of smallpox. In that case, the employee contracted smallpox from eating ice cream at a sanitarium. Assuming that getting the smallpox vaccination is a work-related occurrence, the consequences that follow would be work-related as well. Mr. Glaser indicated that he has been receiving telephone calls regarding whether the employee will get paid for the first three days of disability. He has responded that the payment for the first three days is a contractual issue as with all other injuries. Mr. Bagin indicated that the law now covers any industrial disease and therefore no law change is needed. Mr. O’Malley indicated that he has drafted a one-page memorandum regarding smallpox inoculations and reactions. The Council members requested that a copy of the memorandum be sent to them.
6. SB44, Changes in WC Funding Language: Mr. O’Malley explained that SB44 (Budget bill) contained six references to Chapter 102 of the Statutes. The first provision refers to modifications in the W-2 program wherein the private sector employer is selected by this Department for a transitional subsidized private sector job under Wis. Stat. §49.147(3m). Mr. Newby commented that these employees previously were not covered by unemployment insurance because it was determined that the employees were given a grant, not wages. Mr. O’Malley clarified that for worker’s compensation purposes the employees were paid wages. Mr. Newby questioned whether for unemployment insurance purposes there is a change in status due to the proposed statutory language. Mr. Buchen responded that the Unemployment Insurance Advisory Council met and did not discuss the issue. Mr. O’Malley indicated that if the worksite employer does not cover these employees for worker’s compensation purposes, the State covers them. If the W-2 worker is not receiving a grant and not wages, the State of Wisconsin is the employer, not the worksite employer.
The Worker's Compensation Advisory Council reached a general consensus not to raise an objection to the proposed statutory amendments contained in SB44 Sections 1849-1852 pertaining to Chapter 102 if these become law. It was also noted that suggested proposed legislative changes that affect Chapter 102 should be submitted to the Worker's Compensation Advisory Council for review. The new administration should be apprised of this process.
Mr. O’Malley covered the other amendments in the bill. Most of them deleted reference to the State Treasurer and substituted the Secretary of the Department of Administration. Another amendment provided all federal money collected for worker’s compensation must be used for that purpose.
7. Correspondence: Mr. Conway indicated that three letters had been received, and two of them answered by the Division.
1. Mr. O’Malley stated that correspondence from Attorney David Regele requested a change in the definition of date of injury for occupational disease injuries. It can be difficult to determine the date of injury in certain cases. There is significant litigation concerning this particular issue. Mr. Glaser indicated Labor would consider including these changes in their proposed amendments. Mr. Bagin inquired whether there had been a recent court case on this issue. Mr. O’Malley responded that the Court of Appeals recently addressed this issue in the Virginia Surety case. Ms. Connor commented that carriers in worker’s compensation cases disputing the date of injury point to any date of wage loss. Mr. Glaser requested that the Department e-mail the Virginia Surety decision to the Council members.
2. Correspondence from Dr. Seter proposed a new alternative system to avoid disputes between the carrier and the employee regarding payment of medical bills. Mr. Glaser commented that the Council had discussed this issue in the past. If the employer directs care, the employer must pay for the treatment. Mr. Buchen indicated that this issue could be addressed as part of the overall medical care issue.
3. Mr. Jay Haug had concerns with his wife’s specific situation. Mr. O’Malley indicated that based on the limited information provided in the correspondence, the Department was unable to identify his wife’s claim. Mr. Glaser indicated that Mr. Haug seems to be saying benefits are not adequate.
8. Adjournment: Discussion on all agenda items concluded and the meeting was adjourned. The next meeting date is April 22, 2003.