Council on Workers' Compensation
Meeting Minutes
GEF-1 Building
Madison, Wisconsin
February 10 , 2015


Members present: Mr. Beiriger, Ms. Bloomingdale, Mr. Buchen, Mr. Ginsburg, Mr. Kent, Mr. Metcalf, Ms. Nugent , Ms. Seiler , and Ms. Thomas

Staff present: Mr. Aiello, Ms. Brown, Ms. Endter,  Mr. Ezalarab, Ms.Froehlich, Mr. Krueger, Mr. Moreth, Ms. Smiley, and Mr. O'Malley

Excused: Mr. Brand, Ms. Johnson, Mr. Redman, and Mr. Schwanda

  1. 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 themselves. Mr Metcalf also introduced the two new senior administrative law judges, Janine Smiley and Mary Lynn Endter
  2. Approval of minutes:  Ms. Bloomingdale moved to approve the minutes of the January 13. 2015 meeting. Ms Nugent seconded the motion. The minutes were unanimously approved without correction.
  3. Correspondence:  Mr. O'Malley reviewed correspondence concerning proposals for changed to ch. 102.

    A letter of August 14, 2014, was received, with a recommendation from the members of the Health Care Provider Advisory Committee (HCPAC), regarding a proposal that all medications dispensed through a physician's office and by compounding pharmacies be paid at the average wholesale price plus a $3.00 dispensing fee. Dr. Mary Jo Capodice, a member of the HCPAC, was present at the meeting to discuss this issue in further detail

    A letter dated December 23, 2014 was received from Mr. Stephen Schnieder, American Insurance Association; Mr. Mark Johnston, National Association of Mutual Insurance Companies; Mr. Jeff Junkas, Property Casualty Insurers Association of America; and Mr. Andy Franken, Wisconsin Insurance Alliance. They proposed the adoption of a medical provider fee schedule based on Medicare's Resource Based Relative Value System (RBRVS) with a uniform conversion factor; and the adoption a pharmaceutical fee schedule for physician dispensed drugs based on a drug's average wholesale price plus a modest dispensing fee.

    A January 21, 2015, letter was received from Mr. Steve Mercaitis, Vice President of Lori Knapp Companies, with a proposal that fiscal employer agencies be allowed to cover employees under a blanket worker's compensation policy similar to the W2 law where for worker's compensation purposes there is one employer of record. Mr. Mercaitis and other representatives from Lori Knapp Companies were present at the meeting to discuss this proposal in more detail

    A letter dated January 30, 2015 was received from Mr. Kevin Tribout, Executive Director, Government Affairs, Helios Company. The proposals contained in the letter include the following: (1) control the practice of physician dispensed medications or cap reimbursement at existing pharmacy fee schedule rates; (2) enact regulatory changes for compound drugs that require prior authorization, require the prescribing physician to document a medical need for the compound medication and cap reimbursement for compound drugs; (3) the development and required use of standardized pharmacy billing processes and forms, specifically the NCPDP Workers' Compensation/Property & Casualty Universal Claim Form (WC/PC UCF); (4) and, if standardized billing processes and forms are not adopted, physician dispensed medications should require both the NDC of the repackaged medication dispensed and the NDC of the original manufacturer for the drug used in repackaging
  4. Presentation on WC and Fiscal Employment Agencies:  Mr. Steve Mercaitis, Ms. Jane Bushnell, and Mr. Gerry Born of Lori Knapp Companies gave a presentation on the proposal to allow fiscal agents to obtain one policy for worker's compensation insurance to cover a number of their clients. The company has been in existence since 1972 and was the first agency to provide community based services to persons with disabilities. Lori Knapp Companies provides Fiscal Agent services to disabled persons who want to stay in their own homes and direct their own care. Lori Knapp Companies handles all of the paperwork involved for disabled persons who want to hire their own care givers, and sets them up as employers. Under current law, each disabled person must purchase a policy for worker's compensation insurance coverage. The cost of the policy comes out of the individual's Medicare budget. Lori Knapp Companies proposes that it be allowed to buy one policy for worker's compensation insurance to cover all of the persons it serves. This will result in a reduction of the amount of money coming out of the budget for most people, in some cases significantly. Several scenarios were discussed with examples showing the amount of savings that would occur under this proposal. With the worker's compensation policy constant fee of $220 per year there could be an overall reduction in costs of $255.94 per year per employer if the FEA employer is placed under one blanket worker's compensation insurance policy. This proposal would not affect coverage of employees who could be injured providing in-home care for disabled people.
  5. Presentation on Opioid and Drug Compounding Guidelines: Dr. Mary Jo Capodice, a member of the HCPAC, gave a presentation on physician dispensed medications, compounding medications, and on a paper entitled Chronic Opioid Clinical Management Guidelines for Wisconsin Worker's Compensation Patient Care.

    Dr. Capodice referred to the letter from HCPAC of August 4, 2014. She explained that companies provide physicians with drugs that the physicians can dispense to patients in the office. Physicians can charge anything for the drug. For example, a 30 day supply of Ibuprofen 800 mg might be filled by a pharmacist at $3.40 for a 30 day supply but a physician might charge the carrier $150.00 because there is no fee schedule for this type of dispensing. HCPAC proposes that the cost of these physician dispensed drugs be limited to the underlying manufacture's average wholesale price plus $3.00.

    The second problem concerned the use of compounding medications. Compounding medications are usually topical creams that are prescribed for patients who cannot take oral medications. A physician will send a prescription for the cream to the pharmacy, and the pharmacy can charge a large sum of money for the cream because is it not included on a fee schedule. Costs for compounded medications may run from $1,000 to $20,000 for a month's supply. HCPAC proposes that the cost of the compounding creams also be based on the average wholesale price plus a $3.00 dispensing fee. However, this is more complicated because a cream may include from two to five different drugs. The number of drugs in the cream may need to be considered when determining the average wholesale price.

    On the issue of opioid use, Dr. Capodice explained that the HCPAC recommended creating guidelines for physicians to use when prescribing narcotic medicines to worker's compensation patients. The paper sets out elements that a physician should consider such as a drug contract with the patient, conduct regular drug screening to prove that the patient is using the drug, and conduct random pill counts. The paper points out that narcotic drug use over 90 days is not a benefit and that a patient should likely be referred to a pain management clinic at that point. The HCPAC is proposing best practice guidelines to help prevent addiction and to encourage return to work. The Wisconsin Medical Society has agreed to help communicate the guidelines to physicians.
  6. Other Council Business:   BJ Dernbach, DWD Legislative Liaison, informed the Council that as part of the governor's plan to streamline state government, the Budget Bill will transfer functions and staff of the Worker's Compensation Division (WCD) to the Office of the Commissioner of Insurance (OCI) and Department of  Administration-Division of Hearings and Appeals. He also said that the Budget Bill includes three amendments that were previously recommended by the Council: establishing a means for supplemental benefits reimbursements to insurance carriers; increased solvency protection for the uninsured employer's fund in the event of very large claims; and coverage of student-trainees from institutions of higher education assigned to unpaid training worksites, along with exclusive remedy protections for employers operating those worksites.

    Mr. Buchen offered the following Resolution:

    The Wisconsin Worker's Compensation program enjoys a national reputation for efficiently delivering quality benefits to injured workers as a reasonable cost to employers.

    The Worker's Compensation Advisory Council would like to ensure that the proposed changes to the Division and the dispute resolution process included in the recently introduced state budget do not result in a diminution in the level of services and protections that all stakeholders enjoy under the current system.

    Therefore, we ask that Division staff confer with the OCI and DOA staff to identify and resolve any issues to insure that the quality and efficiency of the current program is preserved and enhanced in the transition. Further, we ask that Division staff report back to the Advisory Council on their discussions at the next meeting.

    Mr. Buchen moved for adoption of this Resolution; seconded by Ms. Bloomingdale. The Resolution was adopted by unanimous vote.
  7. Adjournment:  Ms. Bloomingdale moved to adjourn. Ms. Nugent seconded the motion. Meeting adjourned at about 2:00 p.m. by unanimous approval.
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