Council on Worker's Compensation

Meeting Minutes
Madison, Wisconsin
April 24, 2000

Members present: Mr. Bagin, Mr. Beiriger, Mr. Buchen, Ms. Coakley, Mr. Glaser, Mr. Grassl, Mr. Muelver, Mr. Newby, Ms. Norman-Nunnery, Mr. Olson, Ms. Vetter, Mr. Welnak.

Staff present: Ms. Piraino, Mr. O’Malley, Mr. Shorey, and Mr. Smith.

  1. Minutes. Ms. Norman-Nunnery convened the meeting in accordance with Wisconsin’s open meetings law. Mr. Smith said the January 28, 2000 draft minutes had been modified as follows:
    • at page 2, par. 4, line 1, delete "that;" on line 5 delete "the;"
    • at page 3, par. 3, line 5, delete "and;" at page 3, par. 4, line 2, add "the;"
    • at page 6 par 3, line 4, delete "be;"
    • at page 6, par. 7, add "Mr." or "Ms." before all names.
    Mr. Muelver moved adoption of minutes of the January 28, 2000 meeting as amended. Mr. Beiriger seconded the motion. The motion passed unanimously.
  2. Legislative Update. The Council took public testimony on 1999 AB 787, relating to payment of worker's compensation benefits to workers injured cleaning up hazardous "B" spills. Mr. Tupp Wells, Chief of Staff to the Dane County Executive, speaking in favor of the proposal, introduced Kathy Krusek, Dane County Emergency Response Teams; Charity Ellison, lobbyist, Dane County; Marty Kazmirek, Dane County Planner.

    Mr. Wells said the state pays worker's compensation benefits to employees of local governments who are injured while responding to hazardous A spills (a threat to human life) but does not pay worker's compensation for hazardous B spills (a threat to the environment). AB 787 makes the state liable for hazardous B spills.

    Mr. Wells said that the City of Madison is doing a great job responding to A and B spills throughout Dane County. The problem is that Madison, which is self-insured, is currently liable to pay worker's compensation to their employees injured responding to B spills outside the city. Madison has advised Dane County it will no longer respond to B spills outside the city when the current contract expires. Dane County has tried unsuccessfully to informally resolve the problem for about 5 years.

    He said that despite a very low injury rate associated with responding to B spills, small towns cannot afford the financial risk that would accompany a serious injury. And, since the person responding is not their employee, even if the town had worker's compensation insurance, the person would not be covered under their policy. The goal is to continue providing the delivery of an important service, where there is relatively low risk, little actual outlay of money, and good intergovernmental cooperation. He said other fire chiefs around the state and the Wisconsin State Fire Chiefs Association support AB 787.

    Mr. Glaser and Mr. Muelver asked if the Madison firefighters were covered for worker's compensation purposes when they are directed to provide service outside the city limits. Mr. Smith and Mr. Wells said that as long as they are acting at the direction of their employer--the City of Madison--they would be covered. Mr. Wells said, the issue is not coverage; the issue is who pays if there is an injury responding to a hazardous B spill outside of Madison.

    Mr. Newby asked whether the local government arrangements that are used when Madison firefighters leave the city to assist in fighting major fires could be used for hazardous B spills. Mr. Wells said those fire-fighting situations are covered under a "mutual aid" agreement under which local towns would return the favor if Madison needed help with a major fire. He said that since Madison is the only one providing hazardous B cleanup, there would be no opportunity for towns to enter into a mutual aid agreement.

    Mr. Glaser asked if a gas spill from a car rollover would be a hazardous B spill. Ms. Kathy Krusek said that it could be if would cause environmental damage, such as going into a sewer, but that normally local units can handle it.

    Mr. Rollie Boeding, Director of Risk Management, Wisconsin Department of Administration, testifying in opposition to the proposal, introduced Mr. Randy Milsap, Military Affairs, and Mr. Hiram Shaw, WC Manager, DOA.

    Mr. Boeding testified that they supported the state payments for hazardous A spills. He said the significant difference between the hazardous A and B situations is that for A spills there are 8 regional response teams with whom the state has contract through which it controls the risk. He said with B spills there is the potential for hundreds of organizations to respond, none of which have this contractual arrangement with the state. He said separating the risk financing from the risk control in 72 counties would be a problem.

    Mr. Boeding said State and Dane County staff met to narrow the issues in dispute relating to AB 787. He said they made progress but need more time because AB 787 is not a workable solution in its current form. He said that the last time he had made a similar request to the Council to work out a W-2 solution on worker's compensation he was successful. He asked for the same opportunity on this proposal.

    Mr. Glaser asked how much money Madison or Dane County currently receive from the State. He also asked when the contract with Madison expires. Mr. Wells responded that the State pays $25,000 to Madison for hazardous A spills and $10,000 to Dane County for hazardous B spills. He said that he was not sure when the contract expired. Mr. Newby asked where the $10,000 came from. Ms. Krusek said the Department of Military Affairs provides grants to counties. She said that 32 counties have hazardous B teams and others have private contracts. Mr. Milsap, Military Affairs, said he had asked the counties for data on the number and extent of hazardous B spills and had been unable to get anything useful. He said one of the problems is that the definition of a B spill is too loose. It allows local governments to use wide discretion in deciding whether an incident is a B spill.

    Mr. Welnak asked what happens if the contracts are not renewed. Mr. Wells said the county would provide the service by organizing new response teams. He said this would not be a good solution because everyone agrees that Madison does a great job.

    Mr. Glaser questioned whether this was really an issue for the Council. He said that all injured employees are covered for worker's compensation purposes; the issue is purely fiscal--a question of who pays. He said while it was important for the Council to review the matter, the issues which divide the two sides have more to do with inter-governmental relations--an area in which the Legislature has unique expertise--than worker's compensation. He recommended that the Council draft a letter to the legislature explaining their review of the matter.

    Mr. Bagin agreed. He moved that Mr. Smith draft a letter to the co-chairs of the Senate and Assembly Labor Committees, with copies to the authors of the bill, that the Council takes no position in support or opposition to AB 787 because:
    • No one disputes that all employees responding to hazardous B spills are currently covered for purposes of worker's compensation and will remain covered under any likely scenario.
    • While the bill may have a minor impact on the operation of the worker's compensation system, it does not appear to raise any fundamental concerns relating to the system.
    • The Council does not object in principle to a shift in financial responsibility for hazardous B spills from the City of Madison and other local units of government to the state or county level, for example, as occurred with hazardous A spills.
    • Based on general insurance principles, the State DOA objects to assuming the financial responsibilities outlined in AB 787 without clearer authority to manage the risk. However, the specific financial issues addressed in AB 787 seem to have more to do with appropriate intergovernmental relations--a subject in which the Legislature rather than the Council has special expertise--than with the operation of the worker's compensation system.
    Mr. Welnak seconded the motion. The motion passed unanimously.
  3. Department Update.

    Division's Biennial Budget. Ms. Norman-Nunnery said the Division had submitted four budget to the DWD Secretary to include in the next biennial budget. She said it will be months before the Department makes any final decision on the following items:
    • Add 2 ALJs. The Department's stated goal is to schedule hearings, statewide, on average, within 6 months of the date the application is ready for hearing. Hearing delays continue as a persistent problem. Currently, the delay is approximately 9 months, the lowest it has been since 1993, but still unacceptably high. Assuming the legislature approves the request in July 2000, the Division intends to review the delay at that time to determine whether there is still a need to hire one or two additional ALJs. The Division will periodically update the Council on the budget request and the extent of hearing delays.
    • Add 1 WC Dispute Resolution Specialist. The Division remains committed to providing alternative (informal) dispute resolution options. Paralegal ADR and ALJ settlement conferences have played a meaningful role in stabilizing the backlog of litigated hearings despite a high level of applications.
    • Upgrade information technology systems.
    • Adjust certain pay grades for positions in which staff turnover has been a problem.
    Legislative Audit Bureau - ALJs. Ms. Norman-Nunnery said the Division has not seen the report, but has been advised informally that it will be issued soon and will not make any major recommendations affecting the Division.

    Insurance Focus Group - Medical Reporting. Ms. Norman-Nunnery said the March 28, 2000 meeting of the insurance focus group was well attended. She said that Division work groups are now looking at several possible changes related to "paragraph 9" (a Department form letter that explains injured worker's rights to PPD) and PPD worksheets.

    She said that Mr. Grassl and Mr. Olson will take the lead on behalf of insurers who want to propose amendments to the Department's reporting requirements. Mr. Grassl said the minutes of the insurance focus group meeting did a good job of summarizing what occurred.

    Safety Commission -- Release of Employer-Specific Injury Data. Mr. Frank Conway, Supervisor of the Division's Research and Statistics Section, explained the 1999 Safety Report using a power-point slide presentation and handouts. Based on a rather careful analysis of 3 years worth of injury reporting (1997-1999) approximately 2000 employers received certificates of recognition for good safety records; approximately 184 received notices of poor safety records. In both cases, the leading employers in each sector were selected.

    Ms. Coakley asked for information about the trucking industry, which Mr. Conway explained. Mr. Beiriger said he liked the industry-by-industry approach, comparing it to peer review. He said it is better than focusing on just "high-risk" industries.

    Mr. Smith said the Wisconsin State Journal submitted a formal open-records request for the underlying data used to select the 184 employers with poor safety records. While the information does not identify any individual worker, the Division and the Department determined that there was sufficient legal authority to deny the request and did so. The newspaper formally asked the Attorney General's open records expert to review the Department's denial. The Assistant Attorney General met with Mr. Bernstein, DWD General Counsel, Mr. Smith, attorneys for the newspaper, several reporters and several Department staff. The Assistant AG concluded that the Department had no basis to withhold the data. He strongly recommended that the Department release of the information which is being done.

    Mr. Smith asked whether the Council wanted to consider legislation to clarify whether or when such information should be released. Mr. Glaser questioned whether the Council would be acting in the public interest if it moved to protect the data. Mr. Newby said the 184 employers had to have a very bad safety record to get on the list. He asked what purpose it really served to shield these employers' identities. Mr. Bagin said it might impact other employers' decisions to hire an employee from one of these 184 companies. Ms. Coakley asked what remedies the employer had if the newspaper incorrectly reported information. She said employers deserve the same confidentiality protection that employees have. Mr. Buchen did not think that the release of the employer-specific data was the problem; instead he shared Ms. Coakley's concern that a newspaper might not analyze the data with the same care that the Division staff had done. Mr. Beiriger said gathering and analyzing the data were necessary to get the safety problems in front of the right people so those employers could do something about it. The Council did not take any action on the open records question.

    Finally, Ms. Norman-Nunnery shared a list of six options related to the safety project with the Council. Mr. Muelver moved that the Council support the 2000 Safety Initiative project (option B2) including a follow up survey by the Department to determine whether employers with poor safety records made any changes as a result of receiving a poor performance notice. Mr. Welnak seconded the motion. The motion passed unanimously.

    Work Injury Supplemental Benefits Fund. Ms. Norman-Nunnery said payments into the Fund were suspended for 5 years prior to being re-instated in 1999. There is a possibility that payments into the Fund will not pick up fast enough to cover expenditures out of the Fund. The Department is monitoring the situation very closely and will advise the Council if a real problem develops.
  4. Legal Update. Mr. Smith summarized several recent court decisions.
    • Heritage Mutual v. Larson - March 14, 2000 - Court of Appeals - Drinking traveling employee. The Court of Appeals upheld LIRC paying benefits to a traveling employee who had been drinking, drove to his camper trailer, opened the door, passed out on a bitter cold night, woke up the next morning and suffered finger amputations from severe frostbite. A front-page Milwaukee Journal Sentinel article suggested the Council should not allow payments in a type of situation (where there was so much doubt about his employment status and no doubt about his inebriation). Ms. Coakley questioned whether the Act was really intended to cover payments in this sort of situation. Mr. Bagin and Mr. Glaser acknowledged that the decision was easy to criticize given its unusual facts, but they both agreed that the court's basic rationale was sound and consistent with the underlying principles of the system. They advised that the Council do nothing in response to the decision.
    • Steven Theuer v. LIRC - Racine County - March 31, 2000 - Medical fringe benefits as part of the wage calculation. The circuit court upheld the Department's and LIRC's position in what is seen as a "test case" holding that the employer's contribution to general health insurance premiums should not be included in calculating the employee's average weekly wage for worker's compensation purposes.
    "Reasonable travel" for purposes of medical treatment. Mr. Smith shared a copy of a letter from Gallagher Bassett in which they explained to an injured worker their policy of refusing to pay "reasonable" travel for chiropractic treatment beyond the nearest chiropractor. The situation involved a Dane County resident traveling 33 miles across the Dane county to receive treatment rather than 6 miles to the nearest town with a chiropractor. The insurer refused to pay more than 6 miles. The company confirmed that the policy applies to all chiropractic treatment. Mr. Smith said that a number of Department staff and ALJs were concerned that requiring this kind of issue to go to hearing on every case involving chiropractic care violated the spirit of the law, if not the letter.

    Mr. Glaser strongly objected to the practice. He said the amounts may be small in each case, but they will add up. He urged the Department to pursue the matter further. Mr. Bagin cautioned that there may be situations where the insurer has a valid defense based on unreasonable travel distance, but said those should be selective case-by-case decisions. He also questioned the insurer's judgment in this particular case. Mr. Grassl said this was not an industry practice, nor did he think other insurers would be encouraged to do so. He said the dollars are so small compared to the risk that employees will consult with attorneys, leading to unnecessary and expensive litigation. Mr. Smith said the Council's comments would be very helpful as the Department reviewed the matter further.
  5. Future Council Meetings. Council members discussed ways to increase the participation rates at the fall-winter public hearings held throughout the state to solicit legislative proposals. Suggestions included setting aside more of each regular meeting to taking public testimony and scheduling more meetings throughout the state during the two-year cycle rather than concentrating them in Madison and Milwaukee.
  6. Other Business. Mr. Bagin asked for clarification of the three-day-waiting period. Specifically, he asked, does the worker need 3 days off work due to the disability before benefits begin or do benefits begin on the 4th day after the injury even if that is the first day of lost time after the date of the injury? Mr. Smith said no benefits are paid for lost time on the day of the disabling injury. He said pursuant to s. 102.43(intro) benefits begin on the 4th calendar day after the injury even if that is the first day of lost time after injury. And, if the worker misses time due to the injury on days 2, 4, and 8 after the injury, the worker is paid for all three days, including day 2, because there is lost time due to disability more than 7 calendar days after the injury date. There are a variety of scenarios under which a worker is entitled to payments involving the first, second or third days of lost time following the injury.

    Mr. Smith said the issue is likely to come up more next year. In the past, it was too difficult to program the Department's computers to track the 3-day waiting period on every case. Therefore, the Department did not routinely monitor payments for compliance with that provision. Instead, when a waiting-period problem came up, for example, as part of a wage investigation or a litigated case, the Department staff would advise the insurers how to make proper payments.

    When a new automated system was installed in 1997, Mr. Krohm wanted the Department to monitor the accuracy of all payments more closely. The 3-day waiting period was one area in which he was particularly interested in doing more education and compliance monitoring. For example, Mr. Krohm had the Division develop a summary sheet with examples of as many possible scenarios as possible. Mr. Smith said that the summary sheet was carefully reviewed by ALJs and other experienced staff prior to it being posted on the Division's website.

    Mr. Smith emphasized that if the Division is successful in automating compliance monitoring, the change should be viewed as a change in the Department's administration of the law, not the Department's interpretation of the law. Mr. Grassl said that in the past he had discussed this issue with Margaret O'Connell, who told him the same thing as Mr. Smith.
  7. Adjourn. The Council adjourned.