Department of Workforce Development

Draft
Council on Worker's Compensation
Meeting Minutes
Madison, Wisconsin
July 24, 2001

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

Staff present: Mr. O ' Malley, Mr. Shorey and Mr. Smith.

1. Minutes. Ms. Norman-Nunnery convened the meeting in accordance with Wisconsin ' s open meetings law. As amended, Mr. Welnak moved adoption; Mr. Bagin seconded the motion. The motion to adopt the minutes of the June 25, 2001 meeting was unanimously approved.
2. Meeting September 13, 2001. Ms. Norman-Nunnery said that Richard Victor, Executive Director, Worker's Compensation Research Institute, would be in Madison to lead a briefing on two WCRI papers. The first is a multi-state examination of health care costs; the second is a study of medical costs in Wisconsin. She asked the members to try to hold September 13, 2001 open on their calendars for a Council meeting.
3. Correspondence. Ms. Norman-Nunnery asked the Council members to review correspondence, including a letter from Attorney John Edmonson relating to several legislative proposals.
4. Caucus. The Council members temporarily adjourned to separate caucuses to discuss their respective legislative proposals.
5. "Agreed Bill". Mr. Bagin explained the following proposals. He proposed that they be adopted as a package and included in the bill.

1. Management Proposal 1 - Honthaner's Restaurants . Mr. Bagin said that, subject to changes that may come from LRB drafting, they had reached agreement on a proposal to limit the application of the Spencer doctrine relating to the payment of temporary and permanent disability in certain cases. He said the intent was not to disturb the Spencer doctrine as it relates to disability benefits for cases that look like Spencer--where the employer initially concedes a work injury; at some point, the employee undergoes invasive surgical treatment in good faith that later, on the basis of an adverse medical examination, is determined to be unnecessary treatment; and as a consequence of this invasive and unnecessary surgical procedure, the employee has additional temporary or permanent disability for which the employer is liable. He said the intent was to respond to the Honthaner ' s Restaurants case so that, even in cases where employers and insurers concede a work injury, they may use an examining doctors opinion to defeat liability for disability benefits that are a consequence of non-invasive and unnecessary medical treatment--even if the employee underwent the unnecessary treatment in good faith. (See attachment 1)
2. Management Proposal 3 - Delete sunset in s. 102.16(2). Mr. Bagin said the sunset has been extended every session since 1994. While the system is not perfect it has proven more workable than the system it replaced.
3. Management Proposal 4 - Eliminate the 10-day payment period in DWD 80.15. Mr. Bagin said that one of the ironies of automation is that it sometimes takes longer to issue a check than it did before automation. He said this would repeal the 10-day payment standard in DWD 80.15 for stipulations and compromise orders and set a uniform 21-day payment standard on all orders. Mr. Smith asked if the proposal was intended to merely revise the rule or to amend the statute and revise the rule. Mr. Bagin said that to assure a January 1, 2002 effective date the proposal was to create a statute and amend the rule.
4. Management Proposal 7 - No vocational rehabilitation if employer offers suitable employment at no less than 90% of the employe e' s pre-injury wage. Mr. Bagin said the intent was to apply the job offer/suitable employment concept in s. 102.61(1m) and DWD 80.49 to the DVR process in s. 102.61(1). He said the private-sector system includes the job-offer concept and, until very recently, so did the state DVR process. Mr. Smith asked if the intention was that the offer at 90% of the pre-injury wage had to come from the injury employer or did the concept include a job search. Mr. Bagin confirmed that the job offer had to come from the injury employer and that there was no intention to require the employee to undertake a job search.
5. Labor Proposal A. Increase the current $184 maximum rate for PPD as follows:

Effective January 1, 2002 $212

1. $222
2. $232
3. $242

1. Labor Proposal B. Currently, the maximum rate for temporary disability, death benefits and permanent total disability is set by a formula in s. 102.11(1) that uses the state ' s average weekly earnings as determined under s. 108.05. Mr. Bagin said that effective January 1, 2002, 2003, 2004 and 2005, the maximum rate would be the formula amount plus 10%.
2. Labor Proposal 17c - Prospective treatment. After the second sentence in s. 102.18(1) add: "The department may order an employer or insurer to pay for reasonable and necessary future treatment that arises from the injury."
3. Labor Proposal D - Increase supplemental benefit in 102.44(1)(a) from $150 to $202. Mr. Bagin said the proposal increases the minimum supplemental benefit to $202 in s. 102.44(1)(a) and changes the year in s. 102.44(1) from 1976 to 1978 - the year that corresponds with a maximum weekly rate of $202.
4. Labor 18 - Recorded statements DWD 80.24. When an employee gives the employer or insurer a signed statement relating to a claim, the employee must be given a copy. When the statement is recorded and not immediately reduced to writing, the current rule says the employee or his or her attorney is entitled to a copy of the entire statement within a reasonable time after application for hearing is filed. If the employer or insurer do not comply, they may not use the statement in any manner in connection with the claim. He said the employer or insurer may comply by providing a copy of the recording or a transcribed copy. Mr. Bagin said the proposal deletes the phrase "after application for hearing" in DWD 80.24. He said the drafter may "clean up" other language in the rule before codifying it in Chapter 102 as long as it does not change the meaning.
5. Future action. Mr. Bagin said there may still be a need for the Council to take some further action regarding the investigation of safety violations. He also said that the Council would study medical costs, probably by creating a formal subcommittee.

Mr. Bagin said the management members of the Council unanimously supported these proposals. He recommended that the Council adopt the package of proposals and add it to those proposals approved earlier this year. He recommended they take no further action on items that were previously tabled.

Mr. Glaser said that the labor members of the Council supported the proposals. He offered several additional comments.

He said that an article in the Business Journal reported the 4% rate increase in premiums was only the second increase in the last 8 years. He said that contrasted sharply with rate increases in various non-worker's compensation costs over the same period. Therefore, he said, it ' s possible that the study on medical costs may show that the worker's compensation system is working fine. Worker ' s compensation may have found some answers that would benefit the rest of the health-care system.

He said both sides deserved praise for working out a reasonable agreement on the Honthaner ' s proposal. It eliminates a longstanding concern for management that Spencer should be limited to cases that resemble Spencer. And, it minimizes labor ' s concern that there might be a significant increase in contested cases, requiring many more employees to pursue litigation to obtain benefits.

He said the DVR proposal is a fair one. It takes something that works reasonably well in the private-sector system and applies the same concept to the state DVR system. He emphasized his belief that, in most cases, after a work injury an employee is better off returning to work at the pre-injury employer than attempting vocational retraining.

Finally, he said there were some significant issues on which they were unable to achieve as much as labor might have wanted. For example, he said, while they agreed to raise the minimum benefits for long-term disabled from $150 to $208, they had been unable to agree on a broader cost-of-living increase. He said he hoped that by taking a four-year approach to the major benefit rates in this bill that, over the next two years, they could focus more attention on other issues that merit review and do it in an atmosphere with a little less emotion and pressure.

Mr. Buchen said he agreed with Mr. Bagin and Mr. Glaser that reaching an agreement on the Spencer/Honthaner ' s issue was a significant achievement. He said it was important to establish an employer ' s right to use an IME to dispute certain disability claims involving unnecessary medical treatment. He said it was particularly important for treatment that can extend over a long period of time, usually to treat injuries that are more subjective and that do not involve treatment as serious as the surgery in Spencer. At the same time, he said he understood that labor members felt it was important to preserve an employe e' s right to disability compensation after undergoing significant surgical procedures in good faith, even if the surgery or other invasive treatment is later determined to be unnecessary.

Ms. Norman-Nunnery expressed her thanks to the labor and management leaders, and to the other labor, management and insurance members and advisors, for resolving some thorny issues. She also thanked the legislative liaison for his active participation in the process, as well as those serving as liaison from the Medical Society, Chiropractic Association and Hospital Association.

Mr. Bagin moved that the proposals he outlined today be added to the proposals previously approved by the Council as part of the agreed bill, and that the entire package be drafted as a bill for consideration by the Legislature during their fall floor periods. Mr. Glaser seconded the motion. The motion passed unanimously.

The Council adjourned.