Council on Worker's Compensation

Meeting Minutes
Madison, Wisconsin
October 19, 2000

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

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

Liaison present: Ms. Anderson; Mr. Leonard; Ms. Windschiegl

  1. Minutes. Ms. Norman-Nunnery convened the meeting in accordance with Wisconsin’s open meetings law. Mr. Bagin moved adoption of minutes of the April 24, 2000 meeting. Mr. Glaser seconded the motion. The motion passed unanimously.
  2. Work Injury Supplemental Benefit Fund - Sec. 102.65, Wis. Stats. Mr. Shorey said that there are two recurring issues related to the fund balance: (1) maintaining a minimum balance adequate to cover expenditures; (2) suspending insurers' payments into the fund when the balance exceeds 3 times the prior year's expenditures. He distributed a handout showing actual annual revenues and expenditures from 1995 to 2000, and estimated annual revenues and expenditures to 2005. He said the current $4.0 million balance is less than 3 times the prior year's expenditure ($6.95 million). Department projections estimate that the fund balance will drop to a low of $2.4 million in 2003 (approximately enough to cover one year's expenditures), after which the fund balance should begin to grow slowly over the next 12-15 years to about $7 million. He said despite the Department's concerns earlier this year, it now seems clear that there is no danger that the fund will become insolvent.

    Mr. Glaser asked whether there was an automatic statutory mandate that would trigger the re-instatement of insurer payments into the fund whenever benefits drop below 3 times the prior year's expenditures. Mr. Smith said that s. 102.65(3), Wis. Stats., requires the Department to order a "reduction" (typically, a suspension) in insurers' payments into the fund when the balance is too high. There is no corresponding statutory provision regarding the re-instatement of payments. However, s. 102.65(1) requires insurers to make certain payments--unless suspended for a particular year under s. 102.65(3). Once a year, from 1993 to 1997, the Department did suspend payments for that year. Since the Department did not suspend payments in 1998, s. 102.65(1) was sufficient legal authority to automatically require insurers to make payments for that year. However, because there had been a 5 consecutive years of suspended payments, the Department did formally notify insurers that they should begin making payments for injuries effective January 1, 1998.

    Mr. Shorey explained that insurers make payments into the fund over a 5-year period from, for example, a death claim with no dependents. Even though payments were re-instated in 1998, it will take 5 years (until 2003) before the stream of income into the fund reaches its maximum rate. In the meantime, expenditures will continue to drop the fund balance from its current $4 million level.

    Mr. Bagin questioned the recent increase in expenditures for barred claims. Mr. Shorey said it was primarily related to hearing loss claims.

    Mr. Bagin said that payments into the fund provide no safety deterrent for employers because most employers are entirely unaware of these payments. Mr. Glaser agreed, predicting that labor and management representatives will likely be reviewing issues related to the fund in future negotiations.
  3. Department of Commerce Safety Investigations - Sec. 102.57, Wis. Stats. Ms. Norman-Nunnery said that until recently the Division of Safety and Buildings (S&B) had been part of the same Department as the Worker's Compensation Division (WCD). As part of a government reorganization, S&B was moved to the Department of Commerce. S&B continued to conduct safety investigations pursuant to s. 102.57, Wis. Stats., and WCD continued to reimburse them $90,000 per year for their reports. She said that in 1998 and 1999, the two divisions worked out a written memorandum of understanding (MOU) regarding the level of services that replaced what had been a less formal gentlemen's agreement. She said, S&B has indicated they no longer want to continue the arrangement because it is not part of their statutory mission. With its limited staff resources, S&B said it cannot fulfill is statutorily mandated mission and still meet the service levels outlined in the MOU.

    Mr. Shorey explained the process. He said that historically, each year WCD sent thousands of the 60,000 or so first reports of injury to S&B. S&B then selected which ones to investigate. After completing their investigations, S&B would submit an SB 10 safety report to WCD that, pursuant to s. 102.17(1)(h), Stats., constitutes prima facie evidence of the matters stated therein at any WCD hearing. If the SB 10 reports a safety violation, WCD notifies the employer to pay a 15% increase in compensation to the injured worker or request that the Department schedule the matter for hearing. He explained that the employer has primary liability for the penalty; the insurer's liability is secondary (if execution of a judgment against the employer is returned unsatisfied).

    Mr. Shorey said that under the MOU process, WCD screened the WKC-12 first reports of injury down to about 400-500 per year prior to sending them to S&B. S&B was expected to investigate about half. The most common accidents sent for investigation were deaths, amputations, and accidents involving multiple claimants such as tunnel collapses, trench cave-ins and scaffolding failures. He said that since February 2000, WCD has sent 238 reported accidents to S&B for investigation; S&B has completed 11 investigations and issued 4 safety violation reports. He said he expected the S&B numbers to grow some because their heavy summer season is over, and they have assured WCD that they will not abandon the process until a new process is in place. Mr. Shorey said the purpose of the MOU was to create a regular process with more financial accountability and less seasonal fluctuation in the level of service for injured workers.

    Mr. Smith said that Eric Hands from S&B had intended to appear at the meeting to discuss options. He said WCD had asked about the possibility of making the safety investigations for WCD a part of S&B's statutory mission and funding it with the positions needed to achieve an agreed-upon level of service. S&B is reviewing that option.

    Mr. Glaser asked several questions about the relationship of OSHA standards and state safety codes. Mr. David Norman, currently a Safety Officer with the Madison Metropolitan School District, and formerly the S&B Section Chief for safety investigations, was attending the meeting. He said OSHA standards were adopted in Wisconsin through Wis. Admin. Code ILHR 30. He said a recurring problem with these investigations when he worked for S&B was that private employers could deny S&B investigators access to the site. He said WCD safety investigations were considered "fill-ins" between the summer season amusement park investigations and the winter season ski operations. He recommended WCD consider hiring its own investigators and creating a statutory requirement that private employers must give them access to the premises to investigate.

    Mr. Newby said he was concerned that since 4 of 11 investigations found violations that such a small percentage of accidents were being investigated.

    Mr. Newby, Mr. Bagin and Mr. Buchen asked if OSHA could do the investigations. Mr. Glaser expressed concern that OSHA had cut back on their investigations. Mr. Welnak said he had success in requesting that OSHA follow up with on-site investigations when he had received complaints from his union members. Ms. Norman-Nunnery said the Department would make some inquiries to OSHA.

    Mr. Buchen said he thought putting the positions in DWD was also an option, but that regardless of who does the investigations the criteria for investigation should be as clear as possible. Mr. Fronk suggested that WCD consider analyzing the overall safety record of certain employers in making referrals. He said that is one way insurers spot problem employers.
  4. Moratorium on Department Penalty Referrals to OCI. Ms. Norman-Nunnery said that after a series of meetings between Department staff and representatives of the insurance industry, the Department has agreed not refer any insurers to OCI for penalties until January 1, 2000. The Department's goal is compliance, not penalties. The insurers made a reasonable case for needing additional time to adjust their systems to recent changes in Department practices. She said she was hopeful that insurers will able to provide most of the overdue reports prior to the January deadline.

    Mr. Shorey explained how the insurer's pending report works on the Internet. He said that, in principle, it's simple. Any insurer has access to each of its worker's compensation claims over the Internet. By reviewing the Internet site the insurer can determine the status of each claim and whether any reports are due. Over 400 insurers are using it each month.

    Mr. Newby and Mr. Glaser expressed a variety of security and access concerns, like hackers or disgruntled former employees accessing confidential about injured workers. Mr. Shorey said that while the names of the employees were on the system, there was little other claim specific information. The detailed, computerized information relating to claims is on the Department's ICMS (integrated claims management system) not the system which insurers have access to. Ms. Norman-Nunnery said she arrange to have the IT staff brief the Council regarding the Department's security procedures.

    Mr. Grassl emphasized the need for the moratorium. He said that most insurers view OCI's involvement as an extremely serious matter. He also noted that a significant number of the problem claims that would possibly be referred to OCI relate to insurers' alleged failure to file timely final medical reports. He said this is a subject on which insurers and the Department are continuing to discuss some possible procedural changes.
  5. DVR Closed Categories. Mr. Smith said that DVR has advised him that they may open some categories in January 2001, but that it may be June 2001 before the $2.1 million problem is fully resolved so that all categories that were open in August 2000 are fully served. He said DVR continues to determine eligibility; this means that WC clients can then turn to the statutory process in s. 102.61(1m) for services. Attorney Helen Schott testified that DVR had recently refused to evaluate two of her WC clients for eligibility. Mr. Smith agreed to follow up with DVR on those cases to determine what happened and what could be done to prevent it from happening to other WC clients.
  6. Worker's Compensation Division's Biennial Budget Request. Ms. Norman-Nunnery said that the Department Secretary had approved the Division's budget for 2 ALJs, 1 paralegal, additional IT funding, and some position restructuring. She said the next step would be review by the Department of Administration and the Governor. She said she did not expect any problems at this time.
  7. Proposal to amend Wis. Admin. Code DWD 80.02(2)(e)4. Relating to Insurers Submitting Final Medical Reports. Mr. Grassl said the Department interprets the current rule to require insurers to submit a final medical report (or an estimate of when the report will be available) to the Department within 30 days after temporary disability payments have ended. He said the rule requires reports on injuries if there are more than 3 weeks of temporary disability or any permanent disability.

    The proposal would:
    • Extend 30 days to 180 days. Mr. Bagin said that in the vast majority of cases the final medical report is not available in 30 days. Mr. Grassl said that while the rule provides an option to submit an estimate of when the report will be available within the 30-day period, this creates too much unnecessary paperwork on insurers involving more than 30,000 claims a year.
    • Extend the 3 week threshold to 6 weeks. Mr. Bagin said he had originally proposed this change for the same reason--to minimize what he considered unnecessary paperwork. He said that picking 3 weeks was pretty arbitrary.
    • Clarify language in the current rule to make it clear that the 180-day period starts when temporary disability payments end. Mr. Grassl said this has been the Department's interpretation for many years and insurers are continuing to respond to for the report at this time. However, he said some people disagree. They point to the plain language of the current rule, which does not seem to require the final report until after all payments, including permanent disability payments, have been made. He said that rather than litigate the question, insurers would agree to codify the Department's interpretation with clearer language as part of this proposal.
    • Mr. Glaser said the labor representatives would be willing to carefully review the proposal as part of the negotiated bill process since there may also be a need for statutory changes. Mr. Grassl said that was his intention as well.
  8. Legislation to Require Group Health Insurance to Pay Medical Bills in Certain Situations Pending the Outcome of a Worker's Compensation Dispute. Ms. Anderson, Liaison to the Council on behalf of the State Medical Society, and Mr. Leonard, Liaison to the Council on behalf of the Wisconsin Chiropractic Association, requested that the Council include legislation in the agreed bill to require health insurers to pay for an employee's health care services related to an injury, if it unclear whether or not the injury is work related. If the injury is later determined to be work-related, the health insurance company will then settle directly with the employer's worker's compensation carrier. They said this would be similar to how the automobile insurance system works in Wisconsin. California has a similar law that allows patients to continue their course of treatment while the case is being reviewed. They shared a letter of support for their proposal from Dr. Frank Urban, Wisconsin State Representative from the 99th Assembly District.

    The Council agreed there was a significant problem for employees and providers when the worker's compensation insurer refuses to pay because the injury is not work related and health carrier refuses to pay because the worker has alleged the injury is work related. After a brief discussion, the Council members agreed the subject did not belong in the agreed bill. Instead, while there was no formal motion, there was a consensus that it would be more appropriate for Mr. Leonard and Ms. Anderson to pursue legislation directly. The Council agreed that they could advise the Senate and Assembly Labor Committee Chairs that the Council would not oppose legislation that the medical community might propose in the next legislative session.
  9. Hazardous B spills -1999 AB 787. Ms. Norman-Nunnery and Mr. Smith briefly reviewed the letter the Department sent to the Senate and Assembly Labor Committee Chairs on behalf of the Council endorsing legislative action. There were no comments.
  10. Insurance Letter - Cervical Back Injuries - 10% Minimum. Ms. Norman-Nunnery and Mr. Smith briefly reviewed the Department's letter to insurance carriers and self-insured employers adopting LIRC's interpretation of Wis. Admin. Code DWD 80.32(11) relating to a 10% minimum for cervical back surgeries.
  11. Public Hearings on Legislation. The Council developed the following schedule for public hearings:
November 13th Stevens Point 12:00-2:00
November 13th Appleton 5:00-7:00
December 12th LaCrosse 1:00-3:00
January 8th Milwaukee 4:00-7:00
January 29th Madison 10:00-12:00

Ms. Norman Nunnery said by the end of the week the Department would locate facilities, issue public notices and press releases, and mail and e-mail special alerts to people on the Division's mailing list.