Council on Workers' Compensation
Meeting Minutes
GEF-1 Building
Madison, Wisconsin
May 27 , 2015


Members present: Mr. Beiriger, Mr. Brand, Mr. Buchen, Mr. Ginsburg, Ms. Johnson, Mr. Kent, Mr. Metcalf, Ms. Nugent, Mr. Redman, Mr. Schwanda, Ms. Seiler, and Ms. Thomas

Member Excused: Ms. Bloomingdale

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

  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.
  2. Approval of minutes:  Mr. Beiriger moved to approve the minutes of the April 27. 2015 meeting. Mr Kent seconded the motion. The minutes were unanimously approved without correction.
  3. Correspondence:  Mr. O'Malley reviewed correspondence to the Council received since the last meeting.

    A letter dated May 7, 2015 was received from Dr. Etienne Mejia, a physician at Sports Medicine Center. Dr. Mejia would like the Council to give full consideration to the physician and injured worker community in deciding the best course of action to take in considering limitations that would significantly curtail or eliminate a physician's ability to dispense medications to their patients.

    A letter dated May 7, 2015 was received from Dr. Timothy Mologne, a physician at Sports Medicine Center. Dr. Mologne would like the Council to give full consideration to the physician and injured worker community in deciding the best course of action to take in considering limitations that would significantly curtail or eliminate a physician's ability to dispense medications to their patients

    A memo dated May 15, 2015 was received from the Wisconsin Insurance Alliance, Independent Insurance Agents of Wisconsin, National Federation of Independent Businesses, and Wisconsin Manufacturers and Commerce, addressed to the Members of the Joint Finance Committee, that stated these organizations supported the Governor's budget proposal to transfer the functions of the WCD to the Office of the Commissioner of Insurance and the transfer of ALJs to the Division of Hearings and Appeals.

    Motion to Caucus: Mr. Beiriger moved the members go into caucus. Mr. Kent seconded the motion. By unanimous vote, the members went into closed caucus at about 10:15 a.m. The members returned from caucus at about 11:10 a.m.

  4. Management Proposals:  Mr. Beiriger presented the proposals of Management to be considered in the next agreed upon Bill for 2015 - 2016. They are:
    1. Reduce the statute of limitations from 12 years to 3 years, except for injuries caused by exposure to toxic or hazardous substances. The intent is not to shift the cost of these claims to the Barred Claims Fund but to deny non-exposure claims filed after 3 years.
    2. Apportion the extent of permanent partial disability (PPD) as a percentage caused by the direct result of the injury, the percentage caused by other injuries before and after the work injury, and the percentage caused by pre-existing conditions. The intent is that the employer pays for only that portion of the PPD directly caused by the work injury. The injured worker will disclose, on request, all previous permanent disabilities, and impairments.
    3. Eliminate the minimum PPD ratings in the administrative code where certain treatment results in no permanent disability, since some surgical procedures may result in better results and not worse. The intent is that at the time the minimum ratings were established medical procedures were not as advanced as today. And to re-evaluate permanent total disability (PTD) ratings every 3 years.
    4. Limit payment of physician dispensed repackaged drugs to 15 days from the date of injury, and to deny reimbursement of physician dispensed refills during those 15 days; and to reimburse the drug at the current dispensing fee and subject to the existing pharmacy fee schedule.
    5. Reimburse prescription drugs at the average wholesale price of prescription drugs on the date the drug is dispensed as quoted in the Red Book or its successor. The intent is to allow for any nationally recognized drug pricing source without actually naming it if the Red Book should no longer exists.
    6. Allow a medical provider to send records in an electronic format at a fixed rate of $10 per request. Final treating practitioner's reports shall be provided timely and at a rate of no more than $100.
    7. Eliminate the wage escalation and use actual earnings at the time of injury to set the disability rate when an employee works at both a part-time job and a full-time job, or at multiple part-time jobs, to those actual earnings from the job where the injury takes place. The part-time employer does not always know the employee has a full- time job. The intent is to cover the employee for the work they do since that is the wage upon which the employer pays the premium.
    8. Create a rebuttable presumption that the payment of WC benefits ends once the individual applies for and receives Social Security retirement benefits because once retired the person is no longer connected to the work force. Medical treatment payments would continue. In theory, these persons are no longer available for work and should not get a wage replacement payment.
    9. In the cases of PTD claimants, death benefits will no longer be payable when the claimant's death is unrelated to the work injury.
    10. Deny benefits when an employee violates an employer's drug or alcohol policy. Medical treatment expenses would still be covered. This would include the repeal of the 15 percent reduction for employee misconduct. The intent is that a person who violates the drug/alcohol policy is to be deemed to have deviated from the employment and wage replacement should be denied.
    11. Deny temporary total disability (TTD) to an employee who is released to light duty work and is subsequently discharged for good cause using current UI standards. The intent is to treat an injured employee coming back to work subject to the same employer termination standard as any other employee and not let the injured worker go back on disability benefits.
    12. In hearing-loss cases, use the hearing test closest in date to the removal from noisy employment, whether before or after that date, and whether the removal is by reassignment, quit, termination, or retirement. The intent is for employers to be able to establish the hearing-loss that is attributable to the work place, and distinguish factors such as age, lifestyle, and other things that are not related to work.
    13. Mr. Buchen presented a proposal related to medical cost containment that was developed by the WMC with input from hospitals, insurers and other stakeholders. The proposal involves creating a new Worker's Compensation Medical Cost Management Council charged with implementing reforms to reduce the cost of delivering and managing medical care, while not affecting the quality of care. The proposed council would be in charge of negotiating discounts for worker’s compensation claims by contracting with a vendor to conduct price negotiations with providers. This council would consist of 2 representatives of WC insurance carriers, 2 representatives from self-insured employers, and 2 representatives of the medical community, chaired by the Administrator of the Worker's Compensation Division (WCD) or the Wisconsin Commissioner of Insurance, depending on who is responsible for the administering the worker's compensation program.
    14. The proposal includes the creation of a technology platform to improve the electronic management of the WC system to ensure compliance with electronic billing, payment, claim status, payment status, and medical records transmission for medical providers and payers. The idea is to collect data about the cost of providing health care for those procedures that constitute 90 percent of the spending in WC cases in the most recent year. That data would form the basis for negotiating discounts. The intent is to get at the actual cost of health care reflected by the negotiated discount price that is paid by group health insurance for the most part. The estimate is that 40 to 50 different medical procedures would be reviewed. The price discounts negotiated with each provider would then be available to all payers in the system which will then utilize that provider. Next, the system would allow employers to direct care in WC cases. Employers would have the data on cost and quality so they can make smart choices about the quality of care and its cost, i.e., the highest quality at the lowest cost provider.

      A Discount Dispute Resolution Panel would be created to settle disputes where the parties cannot reach agreement on a discounted price. The proposed panel would have the data on prices from group health insurers to form the basis of settling disputes between the Worker's Compensation Medical Cost Management Council and the provider. The panel will be appointed by the Governor for 3 year terms and consist of 2 representatives from the medical provider community, 2 members representing worker’s compensation payers and a CPA.

      The next item is the Treatment Guidelines and Utilization Review Panel. The proposal here is to shift to a more readily updated set of treatment guidelines like those developed by the American Medical Association, and also to provide for an enhanced utilization review and a more effective process in terms of it being binding on providers.

      And lastly the WCD could impose late penalties on payers that exceed payment standards or fail to communicate when claims are in dispute for compensability, and could impose penalties against medical providers who do not provide the cost and quality data within set time parameters or do it inaccurately or incompletely so there is some enforcement to make all these pieces contained in the proposal to work.

    15. Reserve the right to ask the Council to reconvene to add, modify, or delete the proposals, to consider other proposals that may come up even if an agreed upon bill is reached.
    16. Mr. Beiriger added that the previous Department proposals should be included in the agreed upon bill, and to include those matters left over from the last agreed upon bill including the proposals from LIRC and the Self-insurers Council. Mr. Kent said the members representing Labor agreed to the inclusion of these prior agreed upon items.

  5. Labor Proposals:  Mr. Kent presented the proposals of Labor to be included in the next agreed upon bill. They are:
    1. Increase the PPD rate to $352 (by $30) for injuries occurring in 2016 and to $367 (by $15) for injuries beginning 1/1/17. This reflects a catch-up in the rates since there had not been an increase in 2 years. He noted that twelve years ago a similar kind of catch-up was done.
    2. Increase the supplemental benefit rate to $669 for injuries before 1/1/2003. This is also a two year catch up.
    3. Shift the payments for supplemental benefits from the Work Injury Supplement Benefit Fund (WISBF) to the WCD operating funds with carriers paying WCD by proportion.
    4. Index PTD benefits for a 6 year lag to get the PTD on a stable going forward basis so that persons with the most serious injuries are paid on an index system. Index the PPD benefits after 200 weeks to the same proportion of the maximum PPD rate in effect as of the 201st week. There are a limited number of cases involved with more than 200 weeks of PPD.
    5. Reinstate on a permanent basis the provision that workers in retraining can earn up to 24 hours a week with no reduction in TTD benefits.
    6. Allow ALJs to issue prospective orders directing insurers to pay for a future course of instruction or retraining.
    7. Require an employer to maintain group health coverage while a worker is on TTD and provide a penalty to employers who do not maintain group health coverage. Some employees are denied health care coverage, and the employee loses family coverage for their dependents even while they are getting care for the work injury. This is a hardship. The employee would continue to pay the employee share.
    8. Limit the price of physician dispensed drugs to an injured worker to the pharmacy fee schedule. The intent is that if a pharmacy is paid a set fee that same fee should apply to the physician dispensed drugs.
    9. Allow medical providers to send medical records in an electronic format at a flat rate of $26 per request regardless of the number of pages of electronic records.
    10. Fund a position at the Wisconsin Department of Justice (DOJ) as in the last agreed upon bill, to investigate and prosecute fraud by employees, employers, insurers, and providers.
  6. Motion to Caucus: Mr. Beiriger made a motion to go into caucus. Mr. Kent seconded the motion. By unanimous vote, the members went into closed caucus at about 11:45 a.m. The members reconvened at 2:10 p.m.

    Management's Proposals: The members representing Labor had questions about some of the proposals made by Management. Mr. Kent asked for the following clarifications on behalf of the Labor members:

    Mgt. Proposal 1. Does the three year statute of limitations run from the last payment of indemnity or medical expenses?

    Mgt. Proposal 2. What is the definition of causation in the apportionment of percentages of PPD? Labor is particularly concerned that veterans with permanent disabilities will be subjected to unnecessary litigation.

    Mgt. Proposal 3. Which minimum PPD rates are to be eliminated from the code? Is it fusions or ACL repairs? Which PPD ratings will be evaluated every 3 years? When does a permanent rating remain permanent? Will this drive up costs with additional doctor visits and utilization rates?

    Mgt. Proposal 7. Is this the average weekly wage calculation? If the person works two jobs are you going to combine wages from both jobs, or only the job where the injury occurred?

    Mgt. Proposal 8. Persons on social security are allowed to earn at least 30 percent of retirees work full-time or part-time so that a presumption the person is not available for work is questionable. Does this mean you intend to terminate unpaid PPD upon the application for social security? What do you mean by terminate disability payments, is it TTD or PPD?

    Mgt. Proposal 9. How will it be determined that a death was not related to the work injury? Will autopsies be required in every death claim and who pays for them?

    Mgt. Proposal 10. This is a very important issue. We do not think there is a casual connection between drug testing and elimination of indemnity. Are you looking at testing pre-employment? Are you talking about terminating all indemnity or only a part of the TTD? As for tests, there are issues of scientific accuracy and chain of custody. Twenty percent of some types of drug tests are inaccurate while others have a high degree of accuracy. We need good test standards if there is going to be a negative outcome for the worker. And the employee has the right to a split sample.

    Mgt. Proposal 11. When you bring up UI standards, UI has a different statutory framework. Good cause standards in UI are substantially weaker than the misconduct standard. So any infraction of an employee's standards, even an inadvertent act, can be misconduct. What is the definition of light duty?

    Mgt. Proposal 12. Does this mean that a hearing test by an IME could not be used? Does this mean that an employer cannot later do a hearing test under this provision? Are you excluding post-employment tests no matter how accurate they may be?

    Mgt. Proposal 13. Is this a proposal to study the issue of medical cost containment or a definite proposal to adopt the specifics? Are you open to suggestions? Is there data on what savings might occur with this proposal?

    Mgt. Proposal 14. Labor agrees that both sides should keep their options open for future proposals.

    Labor's Proposals: The members representing Management  had questions about the proposals made by Labor. Mr. Beiriger asked for the following clarifications:

    Labor Proposal 2. Is the supplemental benefit rate for PTD being moved up by two years so that the benefits are at the 2003 rate? Mr. Kent said that is correct.

    Labor Proposal 3: The issue of payments from the supplemental benefit fund will be fixed in the current budget and if that does not happen, we need to look at the drain on the Work injury Supplemental Benefit Fund (WISBF) again.

    Labor Proposal 4: Are you looking to restore the sunset provision or make the statute permanent? Mr. Kent said the plan is to make it permanent.

    Labor Proposal 8: Is the intent to have the group health care coverage continue while the employee is on TTD? Mr. Kent said it was.

    Labor Proposal 11: Management would like to address the DOJ fraud position as well.

    Motion to Caucus: Mr. Beiriger moved to go into caucus. Mr. Kent seconded the motion. By unanimous vote, the members went into closed caucus at 2:25 p.m. The members returned at 3:05 p.m.

  7. Management's Proposals: Mr. Beiriger responded on behalf of the Management members to the questions posed by Labor concerning their proposals.

    Mgt. Proposal 1: The intent is that the statute of limitations would run from the date of last payment of indemnity.

    Mgt. Proposal 2: The intent is to look at documented pre-existing conditions found in the medical records.

    Mgt. Proposal 3: This proposal actually has two parts. The first part is to eliminate minimum PPD code ratings and we need more time to look at this. The second part is to require that PTD, not PPD, be reevaluated every 3 years to evaluate a change in circumstance of the individual, medical and factual.

    Mgt. Proposal 7: Disability earnings are to be the earnings at the job where the injury occurred and only that employment.

    Mgt. Proposal 8: The trigger is the receipt of social security and the intent is to end TTD and PTD, but not PPD.

    Mgt. Proposal 9: The intent is that the body of evidence will create a clear understanding of the cause of death, such as from the death certificate, not post mortem exams, that the death was not related to the work injury, for example, the person who is killed in a car accident.

    Mgt. Proposal 10: This is meant to apply to employer substance abuse policies and pre-employment drug testing, and it affects both PPD and TTD.

    Mgt. Proposal 11: Light duty is transitional duty, reasonable and within the scope of their limitations. The issue we are getting at is the idea that if the employee is terminated, then it is a question of substantial fault of the employee, i.e., a pattern of behavior or egregious conduct or substantial fault, not a onetime thing.

    Mgt. Proposal 12: The intent is to use the hearing test closest to the time of the exposure as a better bench mark of what is work related and what is not. The closest in time could be done by an IME.

    Mgt. Proposal 13: This is a proposal to study the problem of medical costs, to look for ways to get the costs down. We are open to Labor's suggestions and ideas. The expectation is that this will take time and will provide cost savings, but the specifics are unknown at this time.

  8.  Adjournment. The next meeting will be June 9, 2015. Mr. Beiriger moved to adjourn. Mr. Kent seconded the motion. The motion was approved unanimously and the meeting was adjourned at about 3:15 p.m.