Worker's Compensation Advisory Council
Council on Worker’s Compensation
Meeting Minutes
Madison, Wisconsin
January 12, 2009

Members present:   Mr. Beiriger, Mr. Brand, Mr. Buchen, Mr. Collingwood, Ms. Connor (for Mr. Scott), Ms. Huntley-Cooper, Mr. Kent, Ms. Nugent, Mr. Olson, Ms. Pehler, Mr. Redman, Ms. Vetter

Excused:   Mr. Newby

Absent:  Mr. Schwanda

Staff present:   Mr. Aiello, Mr. Conway, Mr. O’Malley, Ms. Knutson, and Mr. Krueger 

  1. Call to Order/Introductions: Ms. Huntley-Cooper convened the Worker’s Compensation Advisory Council (WCAC) meeting at approximately 11:00 a.m. in accordance with Wisconsin’s open meetings law. WCAC members, staff and members of the audience introduced themselves.
  2. Minutes: The minutes of the September 11, 2008 meeting were unanimously approved without correction.
  3. Committee Reports: Mr. Conway reported the Loggers Committee had not met since providing a formal report to the WCAC in June 2008. However, the Department is aware that individual loggers had contacted legislators regarding the possibility of group self-insurance. The consultant retained to review this matter last session indicated that group self-insurance would be very costly and complicated and was not a viable approach. Mr. Buchen commented that the WCAC spent a significant amount of time addressing this issue during the last agreed-bill process, noting the logging industry is frustrated with premium rates. Group self-insurance in other states has been successful but the program is subsidized. Without subsidization, group self-insurance is not a viable option because premiums must be sufficient to cover benefit costs. The mechanized logging class code grew out of discussions during the last session. Mr. Conway indicated there was discussion during the last agreed-bill cycle of the loggers group pursuing a certified loggers training program with the possibility of a premium reduction. The Wisconsin Compensation Rating Bureau (WCRB) preliminarily agreed to a 15% reduction in premium if a certified loggers training program was approved. There has been no further action on that proposal.

    Ms. Knutson provided an update on the Certificate of Readiness (COR) process. The number of ready cases waiting for hearing date has dropped from over 4000 to 511. The average ready case has been pending almost two months. Most cases are scheduled for hearing in approximately four months. There are two vacant administrative law judge positions. Larry Schifano resigned in August 2008 and Tom Jones retired last fall but he is still on the payroll until March 2009. The number of hearing applications filed in 2008 compared to 2007 increased by over 100. Complaints regarding delays in scheduling hearings have stopped.
  4. Correspondence: Mr. Conway indicated that most of the correspondence has been condensed to public proposals for statutory or administrative rule changes. Attorney William Sachse, Jr. sent in correspondence in response to testimony presented at the public hearing concerning an injured worker’s need to repay a disability benefit overpayment due to the Social Security offset.
  5. New Business: Mr. O’Malley explained the public proposals summarized in the handout:

    1. Mr. Mike Kiefer offered three proposals: to impose a 10-day time limit for insurance carriers to determine payments; to change the delayed payment penalty from 10% to a multiplication of the benefits delayed; and to provide for attorney representation for employees who have small claims.
    2. Mr. Jake Wood, prosthetic practitioner, proposed that prosthetic practitioners be added as a party having standing to file a reasonableness of fee dispute. Currently, the prescribing doctor must file the dispute.
    3. Rep. Samantha Kerkman proposed that injured workers should continue to receive heath insurance benefits while receiving worker’s compensation benefits.
    4. Ms. Donna Mullaly offered several proposals: to increase the permanent total disability (PTD) benefit rate; to provide health insurance to injured workers receiving PTD; for the establishment of pension funds for injured workers receiving PTD; to establish a new method for deduction of attorney’s fees from compensation and to eliminate the Social Security reverse offset.
    5. Attorney William Wulf proposed that in third party settlements, the distribution of proceeds to the worker’s compensation insurance carrier should be limited to the claims supported by the defense medical examination report.
    6. Mr. Donald Craig offered a number of proposals: to establish better inter-agency communication so that all parties are aware of the Social Security offset requirement; written notice of appeal and hearing requirements; annual cost of living benefit requirements for workers receiving PTD; a change in the benefit rate for PTD to equal the amount of the employee’s prior take-home pay; provide that the insurance carrier pays all attorney’s fees and costs for the injured worker; eliminate the Social Security reverse offset; establish an advocate for injured workers; require that insurance carriers use the medical reports of the treating physicians and eliminate any requirement that an injured worker meet with representatives of the insurance carrier.
    7. Attorney John Edmondson advocates the elimination of the offset of part-time earnings against temporary total disability (TTD) benefits while the injured worker is attending retraining and to adopt an administrative rule allowing participants to record proceedings at worker’s compensation hearings.
    8. The Unemployment Insurance (UI) Division proposed an amendment to Wis. Stat. §102.23(1)(a) to cross reference for an appeal under §108.10 for collection of taxes. UI statutes providing the requirements for judicial review in circuit court for UI cases cross reference the procedures set forth in Chap. 102 (worker’s compensation statutes). The WCD will invite a representative of the UI Division to appear before the WCAC and explain the proposal.  

    Mr. Conway indicated there have been some discussions with the Division of Vocational Rehabilitation (DVR) concerning the federal requirement to look at comparable benefits available to pay costs associated with retraining. If comparable benefits are available DVR can not pay those costs (e.g. tuition, fees and books). It is DVR’s position the insurance carrier should be paying those costs. The WCD will invite a representative from DVR to appear and explain their position.

    Mr. O’Malley explained the Department proposals summarized in the handout:

    1. §102.31(2)(a) The WCRB will require the insurance company to provide notice of cancellation, termination and non-renewal by electronic means only. The majority of notices are already provided electronically. Mr. Krueger explained that the requirement will be phased in by the WCRB over two years and the insurers are already aware of it.

    2. §102.31(3) The current statute does not contain any language regarding recommending enforcement proceedings to the Office of Commissioner of Insurance (OCI) for failure to answer correspondence or failure to allow the department to examine an insurer’s books and records.

    3. §102.475(4m)(b) Clarifies that written notice of a dispute regarding reasonableness of pharmacy charges must be provided by an insurer.

    4. §102.44(5) Since July 1, 1980, the WCD has interpreted the Social Security reverse offset to not apply to vocational rehabilitation retraining benefits (TTD). The proposed language will reverse the Court of Appeals decision in Michels Pipeline Construction v. LIRC, 309 Wis.2d 470 (Ct. App. 2008) and codify the WCD’s longstanding interpretation.

    5. §102.60(1m) & (6) This amendment eliminates the requirement that the employer pay the injured minor additional compensation for wage loss. The changes which took affect 4/1/06 provided that the child labor penalties were payable to the Work Injury Supplemental Benefit Fund rather than to the injured minor. However, s. 102.60(6) stating that the injured minor could not sustain a wage loss was left in the statute. The WCD anticipates that this may create a problem because the language could be interpreted that a wage loss would continue to minors after the three-day waiting period.

    6. §102.64(32) The department may contract with the department of administration or a third party administrator (TPA) to handle claims involving the Work Injury Supplemental Benefit Fund (WISBF). Further, that a TPA may retain the services of a private attorney to defend the WISBF and charges for services shall be paid from the WISBF. Currently the Department of Justice paralegals handle the claims adjustment function in these cases. With budget reductions, the DOJ is limited in the number of staff that are devoted to these functions.

    7. §102.75(2) Interest on surcharges accrues if the surcharges are not paid within 90 days. The proposed amendment decreases that time to 30 days to synchronize payments with the State’s accounting system. The computer system is not set up to handle 90-day payments.

    8. §102.82(2)(ar) The proposed amendment concerns the assessment against illegally uninsured employers and provides that the department may waive any payments owed by the uninsured employer for any benefits paid by the UEF when the department determines the employer was a victim of fraud, misrepresentation or gross negligence by an insurance agent or broker. In practice, OCI would make a determination that the employer was a victim of fraud. The DOJ would pursue collection against the agent or broker.

    9. & 10. DWD 80.61 relating to wrap-up insurance policies. The amendments would delete reference to an obsolete form number.

    11. DWD 80.65 relating to notice of termination, non-renewal or cancellation. This rule amendment cross-references §102.31(2)(a) and provides that notice be submitted electronically in a medium approved by the department.

    12 &13. DWD 80.72 pertaining to reasonableness of fees. The amendment provides that the employer or insurer shall provide a copy of the bill reviewer report with the notice to the health care provider that the medical bill is being reduced. Providing this information earlier in the process should assist in quicker resolution of reasonableness of fee disputes. In addition, the amendment deletes reference to the DRG coding system for Medicare charges. Medicare charges are making their way in to reasonableness of fee disputes. This language should help clarify that data for resolving fee disputes includes billed charges and does not include Medicate charges.

    14. DWD 80.73 pertaining to necessity of treatment. This amendment provides the insurer or self-insurer shall provide a copy of the reviewing doctor’s report to the provider when providing notice that the medical treatment is denied as not medically necessary. Providing this information earlier in the process should assist in quicker resolution of necessity of treatment disputes.

    Ms. Knutson indicated the number of health cost disputes filed and the complexity of the coding/data issues has significantly increased in the past few years. Carriers are challenging the medical coding by the providers and defending fee reductions on theories involving data that is not provided or is not verifiable as meeting the reliable and relevant standards. Rather than just addressing “outliers” the carriers are attempting to reduce all bills. In addition, some providers have significantly increased charges for various billing codes that do not have certified database values. The statute and administrative rules were first enacted 16 years ago with very few amendments over the years and they should be reviewed for more global changes/updating.

    Mr. O’Malley indicated the WCD may have a few more proposals. The WCD is watching the court appeals involving the constitutionality of the statutory amendments to §102.17(4) enacted effective April 1, 2006 relating to payment of traumatic barred claims. A circuit court in Fond du Lac County found the statute unconstitutional. The Attorney General’s Office represents the WISBF on appeal and it is their opinion that if the statute is found unconstitutional, there may be a statutory “gap” and the continuing benefits for barred traumatic claims may not revert back to the WISBF.

    The department is considering formally codifying the COR process in an administrative rule which would include the same conditions, principles and practices currently implemented. Ms. Vetter commented that the process is still relatively new and the department should take some time and make sure it continues working as expected before codifying the process.

    Mr. O’Malley also indicated the Health Care Provider Advisory Committee may have some proposed amendments to DWD Chap. 81.

  6. Adjournment:   Discussion on all agenda items concluded and the meeting was adjourned at approximately 2:30 p.m. Next meeting is scheduled for February 13, 2009.
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