Council on Workers' Compensation
Meeting Minutes
GEF-1 Building
Madison, Wisconsin
May 9, 2017


The Department of Workforce Development provided public notice of this meeting under Wis. Stat.§19.84

Members present :  Ms. Bloomingdale , Mr. Buchen,  Mr. Dernbach(Chair),  Ms Frank, Mr. Fugina, Mr. Gunderson,  Ms. Johnson, Mr. Kent, Mr. Reader,   Mr. Reader: Mr. Redman: Ms. Seiler; Ms. Thomas , and Mr.  Tindall 

Member Excused:      Mr. Schwanda

Staff present:  Ms. Brown, Mr. Evenson, Mr. Holland,  Mr. Krueger,  Ms. McCormick, Mr. Moreth, Mr. O'Malley, and Mr. Payne

  1. Call to Order/Introductions:  Mr. Dernbach convened the Worker's Compensation Advisory Council(WCAC) meeting at approximately 10:05 a.m. in accordance with Wisconsin's open Meetings law. Mr. Dernbach called the roll of members. Members of the audience and Worker's Compensation Division staff introduced themselves.

  2. Approval of minutes:.  A motion was made by Mr. Tindall  to approve the minutes of the March 14, 2017 meeting . Ms. Bloomingdale seconded the motion.  The minutes  were unanimously approved without correction.

  3. Office of Worker's Compensation Hearings Update:  Brian Hayes, Administrator of the Division of Hearings and Appeals (DHA), presented an update on the Office of Worker's Compensation Hearings (OWCH).  He provided clarification regarding some of the concerns raised at the last WCAC meeting. DHA is attached to the Department of Administration (DOA) for administrative purposes in the same way that the Labor and Industry Review Commission (LIRC) is attached. DHA contacts DOA for personnel matters but otherwise is able to maintain distance and independence regarding hearing matters and decisions. Mr. Hayes also clarified that he is a classified employee as are the hearing examiners/ALJs he is authorized to hire.

    Since joining DHA in 2016, OWCH has accounted for about 30 percent of the Division's total case load. In 2016, the number of hearing applications received was 5,183. OWCH issued 6,018 orders, of which 337 were Finding of Fact Orders and 4,538 were orders approving compromise agreements. In 2016, 177 cases were appealed to LIRC. As accomplishments since the transfer of adjudicatory functions from DWD to DHA, Mr. Hayes advised that the average case backlog was reduced from 275 to 169 days. He also stated that all decisions after a hearing has been held are issued within 90 days and orders approving compromise agreements are signed within 21 days. A mediation unit was also created that keeps approximately 300 cases from going to hearing.

    Mr. Dernbach thanked Mr. Hayes for attending the meeting and informed the WCAC that he and Mr. Hayes have been communicating on almost a weekly basis while transitioning the adjudicatory functions from DWD to DHA.

  4. Correspondence:  Mr. O'Malley reported the department received no correspondence since the last meeting.

  5. Motion to Caucus: Council members requested additional information regarding the use/abuse of opioids and deferred any proposals related to this issue until further information is presented by the medical community at the June WCAC meeting. Mr. Reader moved the members go into closed caucus before exchanging proposal. Ms. Bloomingdale seconded the motion. By unanimous vote, the members went into closed caucus at about 10:45 a.m. The members returned from caucus at about 12:25 p.m.

  6. Public Proposals: Mr. O'Malley advised that no additional public proposals were received since the last meeting. A summary listing all public proposals received to date was distributed. The summary was also posted on the DWD website.

  7. Department Proposals.: A handout of the Department's proposals was distributed at the meeting. Proposals Nos. 1, 2 and 3 were discussed at previous meetings along with several technical proposals. Proposals No. 4 and No. 5 were presented having to do with fund appropriation and accounting of the Work Injury Supplemental Benefit Fund (WISBF) and the Uninsured Employers Fund (UEF).

    Under 2015 Wis. Act 55, DWD was to collect up to $5 million per year to be used to provide reimbursement to insurers paying supplemental benefits and to pay claims made against the WISBF that had been put on hold due to solvency issues with the fund. Under 2015 Wis. Act 55, the Department could collect the monies but could not pay them out. Proposal No. 4 recommends the creation of a new Worker's Compensation s. 20.445 Alpha appropriation that would be a Segregated Annual Funds appropriation (SEG), with $5.0 million of annual budget authority included in Fund 227. The proposal would not increase revenue for DWD-WC or increase assessments on stakeholders.

    Proposal No. 5 relates to the Uninsured Employers Fund (UEF) which pays claims for injured workers whose employers illegally operate without required worker's compensation insurance coverage. The UEF pursues collection from employers to recoup payments made on those claims. Currently, payments made into and out of the UEF come from two separate accounts and must be manually merged. The Department recommends modifying the designation of appropriation 20.445 (1) (sm) Uninsured employers fund; payments from a Segregated Sum Sufficient appropriation to a Segregated Revenue Continuing appropriation to more accurately reflect the actual fiscal process for the appropriation and create efficiencies for accounting and budget transactions and cash balance reporting.
  8. Labor and Management Proposals: Mr. Reader presented the Management Proposals, which were as follows:
    1. Medicare-Based Fee Schedule :Establish a Medicare-based fee schedule to bring Wisconsin in line with the majority of states. Set initial fee schedule at 150% of Medicare starting with 2017 Medicare rates. The fee schedule shall adjust annually in line with medical CPI.
    2. Employer directed care. Allow employers to specify a list of health care providers who are authorized to provide care for injured workers. The list shall include at least 6 health care providers, at least three of who must be physicians who are geographically accessible and have specialties that are appropriate based on anticipated work-related medical problems of employees. The list must include contact information and must be displayed in a prominent location.
    3. Treatment guidelines. Establish treatment guidelines in Wisconsin based on ODG or another appropriate national model. Guidelines must be followed unless pre-authorization is received from insurer.
    4. Electronic billing/payments. Require that all providers caring for worker's compensation patients utilize electronic billing and be able to receive payments electronically.
    5. Electronic medical records. Require all medical providers caring for worker's compensation patients to transmit medical records electronically.
    6. Employee misrepresentation of physical condition. Prohibit indemnity benefits to an injured worker if the worker intentionally made a false statement as to their physical condition after a job offer was made, the employer relied on the misrepresentation and this reliance was a substantial factor in the hiring, and there was a causal connection between the false misrepresentation and the injury.
    7. Worker's compensation denied by another state. The state of Wisconsin should not accept for review cases that have been denied by other states for cause. Cases that are contesting jurisdiction should be handled by the state, but cases that have been denied in another state for compensability should not be considered in Wisconsin.
    8. No PTD Benefits once Social Security old-age assistance benefits begin; adjustment to presumption of maximum earnings. Current law provides for Permanent Total Disability benefits for life. PTD Benefits should be terminated once the injured worker receives Social Security old-age/retirement assistance benefits. Current law sets PTD benefit rates for injured workers under the age of 27 at the rate they would probably earn once they reach age 27, or the maximum rate if a probable rate cannot be established. This age should be adjusted to 35 years.
    9. Reduction of benefits; amounts paid under another state's worker's compensation law. Reduce benefits payable under Wisconsin law by any amount received by the employee as worker's compensation benefits under the worker's compensation laws of another state.
    10. Statute of Limitations. Reduce statute of limitations to 2 years, except that in the case of occupational disease caused by exposure to toxic substances there shall be no statute of limitations, and where an employee's injury that is otherwise undisputed requires a prosthesis or artificial joint, there shall be no statute of limitations as to medically necessary treatment expenses directed to said prosthesis or artificial joint.
    11. Eliminate wage expansion. Benefits shall be based on actual earnings from the employer where the injury occurred at the time of the injury.
    12. PPD minimum ratings. Require the medical advisory committee under Wis. Stat. 102.44 (4m) (a) to report its recommendations for revisions of the PPD ratings to the department and the WCAC by the 1st day of the 6th month following the enactment of this law. If a report with recommendations for revisions is not received by the deadline, PPD minimum ratings for surgical procedures shall sunset.
    13. Notice of injury. All initial reports of injuries must be made by the injured worker to the employer according to the employer's procedures as posted or as outlined in an employee handbook within 30 days of the injury.
    14. PTD re-evaluation. An employer or insurer may request an injured worker receiving PTD benefits to have their PTD ratings re-evaluated every three years.
    15. Disability determinations. Permanent disability determinations must be made by occupational health physicians or other qualified healthcare providers according to statutory guidelines.
    16. Death benefits. There shall be no death benefit in PTD claims when the death is unrelated to the occupational injury or illness.
  9. Mr. Reader indicated that many of Management's proposals are aimed at addressing high medical costs in the WC system. Routinely, year after year, when the WCRI comes out with their studies every fall, Wisconsin is one of the highest, if not the highest state when it comes to medical pricing or medical costs for worker's compensation. Last year's report indicated that while we have a very good per case or per injury average of 3% below average, that medical costs are 39% above average. Many of the proposals are modeled after what other states have done or are doing to address similar issues.

    Mr. Tindall added that Management Proposal No. 8 is intended to avoid a situation such as where an older worker, who might have two years of work left before retiring, gets injured and, because of the work injury, then receives 15 or 20 years of permanent total disability (PTD) benefits; the PTD benefits act as a supplement to retirement instead of wage replacement at that point.

    Ms. Bloomingdale presented the Labor proposals, which were as follows:

    1. Permanent Partial Disability Benefit Maximum Rate: Increase of $20 per year. That would result in a maximum PPD rate of $382 for injuries on or after January 1, 2018, and $402 for injuries on or after January 1, 2019.
    2. Permanent Total Disability Supplemental Benefit: Two year bump in eligible dates/rates. Current law provides for those injured prior to January 1, 2003 a supplemental weekly maximum benefit rate of $669. A two year bump would include injuries prior to January 1, 2005, and increase the maximum benefit rate to $711 per week.
    3. Scholarships: Provide for a statutory scholarship benefit for injured worker's children, when a parent's injury causes death or permanent total disability. Scholarship amount for each child would be for the tuition and book expense for up to four years at a Wisconsin State University System school, Wisconsin State Technical College System, or certified apprenticeship program of the child's choice.
    4. Statute of Limitations extended by payment of medical expense. Current law, s. 102.17(4), Wis. Stats., provides for a statute of limitations of six years for traumatic injuries, measured from the date of injury or the last payment of primary compensation (indemnity benefits to worker), whichever is later. Payment of medical expense currently does not extend the statute of limitations. This proposal would add the date of the last payment of medical expense as an additional measurement point for the start of the statute of limitations.
    5. Shoulder Replacement: Amend s. 102.17(4), Wis. Stats., to include shoulder replacement (reverse shoulder replacement) as an additional serious traumatic injury with no statute of limitations.
    6. Increase Release of Unaccrued Benefits in Compromise Agreements: Increase the amount of the unaccrued compensation that may be released to the injured worker without restriction in a compromise settlement pursuant to s. DWD 80.03(1) (d) from $10,000 to $50,000.
    7. Eliminate Interest Credit on Advancements: Amend s. 102.32(6m), Wis. Stats., to change the interest credit to insurers for advancements of compensation from the current 5% to zero %.
    8. Injured Worker Choice of Third Party Settlements: Amend s. 102.29, Wis. Stats., (third party negligence cases) to change the law from the employer having an equal voice in whether a settlement offer should be accepted to the employee having the right to control the settlement or no settlement decision.
    9. Indexing of Permanent Total Disability Rate: Indexing with six year lag. For injuries on or after January 1, 2018, index weekly benefits for permanent total disability or continuous temporary total disability for more than 24 months after the date of injury to the rate in effect at the time the benefit accrues for periods more than six years after the date of injury.
    10. Posting of Injured Worker WC Rights: Require all employers to display a DWD approved poster of WC employee rights at the workplace.
    11. Continuation of Health Care Coverage: If an employer fails to continue to maintain group health care coverage for an injured worker during the period of temporary disability, the employee is due an additional benefit equal to 100% of the employer contributions that the employer failed to pay, in addition to any temporary disability benefits under the Act.
    12. Loss of Earning Capacity for Scheduled Injuries: If a worker suffers a scheduled injury, and if retraining has been attempted but fails to fully restore the injured worker's pre-injury earning capacity, or retraining is not feasible for the injured worker, allow a claim for loss of earning capacity in the same manner as currently allowed for unscheduled injuries.
    13. Indexing of Permanent Partial Disability Benefits After 200 Weeks: An employee receiving PPD benefits after 200 weeks is entitled to the same proportion of the maximum rate of PPD in effect at the time of payment beginning with the 201st week of PPD benefit.
    14. Revise Loss of Hearing Measurements: Currently s. DWD 80.25(4) provides for the calculation of the degree of hearing loss based on the decibel loss at frequencies of 500, 1000, 2000 & 3000 Hz, and allows compensation for loss averaging more than 30 db. This proposal would change the frequencies used for the calculation of average loss to 1000, 2000, 3000, & 4000 hz, and allow for compensation for loss averaging more than 25 db. This would also amend s. DWD 80.25(8) (Hearing Impairment Table) to access the PPD loss from 25 db (0%) to 88 db (100%).
    15. Court Reporters: Retain the current use of court reporters for all hearings.
    16. Preserve LIRC: Preserve the Labor & Industry Review Commission as currently prescribed by law for all matters (WC, UI, and ERD).
    17. Opioids: Labor requests that interested members of the Wisconsin medical community, as well as the WCAC Medical Liaisons, be invited to address the WCAC at the meeting on June 13, 2017 on the issue of opioids, bringing to the WCAC any recommendations they may have on this issue. After hearing from the medical community, Labor would reserve the right to then propose, if necessary, any recommendations for changes in the WC Act.

    Mr. Buchen asked what the basis was for the change to the hearing loss threshold for benefits. Ms. Bloomingdale explained that a loss of 25 decibels appears to have a significant impact on a person's life. The hearing loss will frequently affect the ability to hear higher sounds so, for example, in the English language someone may be able to hear an "o" but not hear a "k" which is the highest pitched sound in the language.

    Clarification was also sought regarding Labor Proposal No. 11 if the intent was that the employer would pay for only its portion or also the employee's portion of the premium. Ms. Bloomingdale and Mr. Kent explained that the intent is the employer would pay the employer's share of the  premium and the employee continues to be responsible for whatever his or her contribution for the cost of the health insurance would have been but for the injury so that coverage would not lapse. The purpose for this proposal is to make the worker whole and avoid situations where non-work related conditions for the worker or his/her family members will no longer be covered because of the worker's inability to pay the premium during periods of disability.

  10. Other Business of the Council:  Mr. Dernbach provided a response from Dr. Belton of the Workers Compensation Research Institute (WCRI), who presented at the February 2017 WCAC meeting, regarding how the WCRI calculates the timeliness of the payment of indemnity benefits differently than DWD. A correction was also made regarding an error on the WCRI slide presentation; Tennessee's 30-day restriction on opioid prescriptions was not worker's compensation specific as the slide had indicated.

    Mr. Dernbach provided a legislative update. 2017 Assembly Bill 308 was referred to the Committee on Labor. AB-308 proposed that the proportion of representatives for labor on the WCAC should be the same proportion as employees in the state who are union members, with a minimum of two (2) representatives. Representative Spiros and Senator Stroebel have been invited to appear before the WCAC, as is customary.

    2017 Assembly Bill 25, regarding child labor permits, which was discussed at prior WCAC meetings, passed the Wisconsin State Assembly and was scheduled for s vote on the Wisconsin Senate Floor the next day.

  11. Adjournment:.  A Motion was made by Mr. Reader to adjourn the meeting and for the Labor and Management members to go into closed caucus. The motion was seconded  by Ms. Bloomingdale. The motion passed unanimously. Ther meeting was adjourned at approximately 1:10 p.m.

    The next Worker's Compensation Advisory council meeting will be held on Tuesday, June 13, 2017