2. Worker's Compensation
3. Worker's Compensation Advisory Council

Worker's Compensation Advisory Council Meeting Minutes

Madison, Wisconsin

January 10, 2017

Members present: Ms. Bloomingdale, Mr. Buchen, Mr. Dernbach(Chair), Mr. Gunderson, Mr. Kent, Mr. Reader, Mr. Schwanda, Ms. Seiler, and Mr. Tindall

Member Excused: Mr. Fugina, Ms. Johnson, Mr. Redman, and Ms. Thomas

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

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 the members. Worker's Compensation Division staff and members of the audience introduced themselves.
2. Approval of minutes: A motion was made by Ms. Bloomingdale to approve the minutes of the December 13, 2016 meeting. Mr. Reader seconded the motion. A correction was made to the spelling of Mr. Tindall's name. The minutes were unanimously approved as corrected.
3. Correspondence: Mr. Dernbach announced that, as per the discussion at the last meeting, a resolution honoring former Council members Ms. Mary Nugent, Mr. Jeff Beiriger and Mr. Jeff Brand would be circulated at the meeting for signature by current members. Plaques will be made and sent to the honorees.

Last month's meeting included a discussion about Executive Order No. 214 regarding the creation of a Governor's Task Force on Opioid Abuse. Mr. Dernbach advised that on January 5, 2017, Governor Walker issued Executive Order No. 228, also related to the Task Force, which specifically made reference to the Council. It read, in item 6, "The Wisconsin Department of Workforce Development shall review the Workers Compensation Research Institute's most recent report on interstate variation on opioid use and consult with the Workers Compensation Advisory Council to incorporate best practices into Wisconsin's workers compensation statutes." The Workers Compensation Research Institute will give their overall presentation on the State of Wisconsin at next month's WCAC meeting.

Mr. O'Malley reviewed the correspondence received since the last meeting:

A letter dated December 30, 2016, was received from Attorney John Edmondson of Edmondson Law Office in Appleton. Attorney Edmondson proposed three (3) legislative changes to Chapter 102 for the Council's consideration: 1. To increase the maximum penalty allowed in accordance with s. 102.57, Wis. Stats., from the current cap of $15,000.00 to $25,000.00 and to increase the maximum cap and the percentage of increased benefits when the work injury results in the death of the employee; 2. To revise s. 102.22 (3), Wis. Stats., regarding court interest such that interest shall be due on all monies awarded from the date a Hearing Application was filed with the Department until the final award is paid, at the rate of five percent (5%), compounded annually; and 3. To add a provision that requires an insurance carrier, (and presumably self-insured employers as well), upon a finding of liability for the employee's medical care, to pay the provider the full amount of any medical bill that was previous written off by the provider as a result of accepting payments from either Medicare or Medicaid, and to provide up to a twenty percent (20%) fee for the attorney representing the employee in this situation.

A brief discussion followed regarding Mr. Edmonson's proposals. A request was made for an analysis of the costs to implement these proposed changes and Mr. Dernbach indicated the Department would attempt to gather such information. Mr. Dernbach stated the number of claims under s. 102.57, Wis. Stats., was 22 in 2013, which represented 0.14 percent of all claims received in that year; there were 28 in 2012, 19 in 2011, and 29 in 2010. Mr. O'Malley advised there currently is not a statutory section in Chapter 102 that pertains to the third proposal and added that as providers are not parties to a worker's compensation case, they do not have an independent right to subrogation. Also, attorney fees are not typically awarded for medical expenses.

A letter dated December 8, 2016, was received from Attorney John D. Neal of Stafford, Neal & Soule, S.C. containing a proposal to change s. 102.59 (1), Wis. Stats. Attorney Neal appeared at the meeting to present his proposal.

4. Public Proposals: Mr. O'Malley advised that six (6) proposals have been submitted from the public to date. The first proposal was from Mr. Eric Roesler, who testified at the public hearing on November 15, 2016, requesting the establishment of a three person board comprised of medical doctors to make determination on apportionment for non-work-related pre-existing conditions. The second proposal came from Attorney Charles Domer and was presented at the last meeting; Attorney Domer advocated for the continued use of stenographic court reporters at worker's compensation hearings. Three proposals were submitted by Attorney John Edmondson via the letter discussed earlier in the meeting and one proposal from Attorney John Neal, (discussed later in the meeting).
5. Department Proposals: Mr. O'Malley presented one substantive proposal and twelve technical proposals from the Department. The substantive proposal related to s. 102.81 (4) (a), Wis. Stats., which provides for how proceeds from third party settlements are to be distributed in Uninsured Employer Fund cases. The current language provides that the Uninsured Employers Fund (UEF) is to receive all of the proceeds from the third party settlements less attorney fees and costs. This creates a disincentive for injured employees to pursue third party actions. The Department proposed amending the paragraph to provide for the distribution of third party proceeds as stated in s. 102.29 (1), Wis. Stats, which allows for payment to the injured employee, and, frequently, provides a cushion for future medical expenses or other payments. The amount payable to the UEF from the third party proceeds would include expenses paid by the Department in administering the claim as specified in 102.82 (1), Wis. Stats., and the UEF would receive distribution of proceeds in a similar manner as a worker's compensation insurance carrier or self-insured employer. The remaining twelve proposals are intended to correct unintended changes made by 2015 Act 55 (the budget bill), which transferred the adjudicatory functions of the Department to the DOA's Division of Hearings and Appeals, and removed the Department's statutory authority to promulgate administrative rules. The sections affected are ss. 102.15 (1), 102.16 (1) (b), 102.17 (1) (b), 102.17 (2), 102.175 (2), 102.18 (1) (bp), 102.18 (5), 102.18 (6), 102.44 (2), 102.44 (6) (b), 102.61 (2), and 102.62, Wis. Stats.

Mr. Buchen inquired why the rule making authority could not remain solely with the Department and, instead, have a new section drafted that specified the Division of Hearings and Appeals should apply the rules of the Department when adjudicating disputed worker's compensation claims. He suggested this would preserve the Department's policy making role and avoid the potential for conflicting rules between the Department and the Division of Hearings and Appeals. Mr. Dernbach stated he would consult with the Legislative Service Agencies for additional information.

6. Proposed change to s. 102.59 (1). Wis. Stats.: Attorney John Neal explained that s. 102.44 (1), Wis. Stats., provides cost of living relief in the form of supplemental benefits to workers found to be permanently and totally disabled from the work injury with an exception that individuals found eligible for permanent total disability benefits under s. 102.59 (1), Wis. Stats., as a combination of a work injury and a pre-existing condition, whose benefits are paid from the Second Injury Fund, are not included. Currently, there is only one injured worker known to the Department that is excluded from receiving supplemental benefits in this way and a few individuals in this same situation in the past. Mr. Neal advocated that from a policy perspective, it would seem that some cost of living help should be available to individuals who are permanently and totally disabled because of work injury, whether the individual is receiving benefits from the worker's compensation insurance carrier or self-insured employer or from the Second Injury Fund under s. 102.59 (1), Wis. Stats.
7. Wisconsin Compensation Ratings Bureau (WCRB) Overview: Mr. Bernard L. Rosauer, President of the Wisconsin Compensation Rating Bureau, presented an overview of the WCRB, now in its 100^th year. The WCRB is an unincorporated association of insurers who, by law, must be members of the WCRB. It is a licensed rate service organization created by Ch. 626, Wis. Stats. While not a state agency, the WCRB is regulated by the State of Wisconsin Office of the Commissioner of Insurance (OCI) and works very closely with the Worker's Compensation Division. The WCRB is responsible for the classification of employers, the rates and rating plans, all policy forms and endorsements, and the collection and analysis of all statistical and other data needed to meet their responsibilities, which include the calculation and distribution of experience modifiers. The WCRB also administers the Wisconsin Worker's Compensation Insurance Pool which provides coverage for approximately six percent (6%) of Wisconsin employers. Additionally, the WCRB assists the Department in its enforcement activities. By law, the WCRB receives required information on every worker's compensation policy issued to every employer with operations in Wisconsin and every termination thereof, and electronically transmits this information to the Department.
8. Other Business of the Council: Mr. Dernbach provided an answer to a question raised at the last meeting in the context of the benefits of court reporters. The Unemployment Insurance Division, which uses audio recordings at its hearings, indicated that about four to five cases a year out of about 1,800 cases are remanded back to the Department from the Labor and Industry Review Commission (LIRC) for poor audio quality. The next meeting of the Council is scheduled for February 14, 2017 at 10 a.m.
9. Adjournment: A motion was made by Ms. Bloomingdale, to adjourn and for the labor and management members to go into caucus. The motion was seconded by Ms. Buchen The motion passed unanimously. The meeting was adjourned at approximately 11:30 a.m.