Worker's Compensation Advisory Council

Council on Worker’s Compensation
Crowne Plaza
Madison, Wisconsin
April 11, 2011


Members present:   Mr. Beiriger, Mr. Brand, Mr. Buchen, Mr. Collingwood, Mr. Kent, Mr. Metcalf, Ms. Nugent, Mr. Olson, Ms. Pehler, and Ms. Thomas

Excused:    Ms. Bloomingdale, Ms. Connor, Mr. Redman, Mr. Schwanda

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

  1. Call to Order/Introductions: Mr. Metcalf convened the Worker’s Compensation Advisory Council (WCAC) meeting at approximately 10:30 a.m. in accordance with Wisconsin’s open meetings law.  WCAC members, staff and members of the audience introduced themselves.  Mr. Metcalf is the new administrator of the Worker’s Compensation Division (WCD).
  2. Minutes: Ms. Nugent moved to approve the minutes of the January 10, 2011 meeting; second by Mr. Kent.  Minutes were unanimously approved without correction.
  3. Legislative Timeline/Meetings: Mr. O’Malley relayed the legislative floor periods as follows:  September 13th -22nd and October 18th –November 3rd.  To have the agreed bill in effect January 1, 2012, it will need to be presented to the Governor by December 8th and it will need to be over at the Legislature by early October.  The WCAC agreed to the following future meeting dates: May 9th and June 13th, and tentative dates of July 11th and August 8th.  The WCAC unanimously agreed that after today’s meeting, no further proposals from the public will be considered for this agreed bill cycle.

  4. Correspondence: Mr. O ‘Malley covered the three items of correspondence.  Mr. Dennis Johnson, President of Cecor expressed concern that employers are not provided an opportunity to present a defense.  Mr. Johnson gave verbal permission for Mr. O’Malley to share information regarding this case.  A hearing application was filed by the employee.  The case is set for hearing later in April.  Mr. Johnson is concerned the amount of benefits paid by his insurance carrier will adversely affect his experience modification thereby resulting in an increased insurance premium.  

    Mr. Jake Wood, prosthetist, is requesting an amendment to Wis. Admin. Code §§DWD 80.72 and 80.73 to include prosthetists as medical providers who have standing to initiate reasonableness of fee and necessity of treatment disputes.  Medical providers such as prosthetists (who make artificial limbs for injured workers) are currently not considered a party themselves to a health cost dispute.  The physician who prescribes the artificial limbs must sign the health cost dispute forms to initiate the dispute.  Ms.  Nugent commented that the treating physician directs the treatment.  All treatment provided by other health care providers such as physical therapists, prosthetists, etc., needs to fall off of that model.  Mr. Wood’s suggested amendment will become part of the public proposals and will be discussed by Labor and Management in caucus.  

    The final correspondence was from Mr. Kip Schick, President, Wisconsin Physical Therapists Association (WPTA).  The WPTA is requesting to be recognized by the WCAC by having an official liaison appointed to the WCAC.  Mr. O’Malley explained that by custom for the last 20 years, the Wisconsin Hospital Association, Wisconsin Chiropractic Association and the Wisconsin Medical Society have had representation as non-voting liaisons to the WCAC.  Mr. Metcalf explained that in the past, anyone wishing to speak to the WCAC has been able to do so.  Management members expressed concern that granting the request would be opening up the issue for other providers/professional groups.  The members will consider the request in caucus.  
  6. Report - Proposal Updates:  The members had requested additional information on Department proposal number 20, dealing with functional capacity evaluations under Wis. Admin. Code §DWD 81.06.  Ms. Jennifer Seidel, member of the Health Care Providers Advisory Committee was invited to give an explanation for proposal number 20.  Ms. Seidel explained that the terms “functional capacity assessment” (FCA) and “functional capacity evaluation” (FCE) refer to essentially the same thing.  When Wisconsin adopted the Minnesota Guidelines, the terminology was not anticipated to be an issue; however, providers are questioned by the insurers for billing for more than one FCE in back injury cases.  An FCE performed as an initial assessment is an abbreviated test at the beginning of care.  An FCE performed at end of care is very long and drawn out, and can last up to two days.  The two tests are both called FCEs and are billed in 15 minute increments.  Mr. Buchen questioned whether physical therapists could use the term “FCA” for the initial assessment.  Other sections of the Guidelines do not have the limitation of only one FCE per injury.  Insurers are using the guideline not only for necessity of treatment, but to either authorize or not authorize care.  Mr. Metcalf suggested that the committee consider redrafting the language and Ms. Seidel agreed.  

    Ms. Knutson reported that in response to concerns from the WCAC members, the department re-drafted proposal 12 to indicate that it applies only if the injured worker had medical treatment for the eye injury on three or more occasions.  Mr. Aiello explained that Department proposal 13 was amended to avoid an onerous reporting burden for carriers and self-insured employers.  The proposal was whittled down to reference only the important records needed by third party administrators and the Worker’s Compensation Division.  Oftentimes a new third party administrator (TPA) requests assistance from the WCD in obtaining old, correct payment information.    

    Mr. O’Malley explained the additions to the public proposals.  Public proposal number 11 concerns Mr. Johnson’s correspondence discussed today. Mr. O’Malley explained that situations where applicants file both UI and WC claims, happens with some regularity.  There are provisions in the UI law to prevent duplication of benefit payments based on compensation for temporary disability.  There is no offset for people collecting UI and WC permanent partial disability benefits.  In order to be eligible for UI benefits, the applicant must be able and available for work.  

    Public proposal number 12 includes the statutory amendments suggested by Mr. Wood in his correspondence discussed today.  Public proposals number 5 and 9 were changed to correctly reference the statutory sections for death benefits.  The WCD has received no other proposals from the public. 

  7. Comments::  DWD Secretary Manny Perez spoke to the WCAC and provided a PowerPoint presentation.  Sec. Perez stressed that WC is critical to the success of Wisconsin in the future.  Sales teams are selling Wisconsin to businesses in other states and emphasizing low WC premiums and the effect on the bottom line of businesses.  Safety is an important component as well.   Wisconsin has the fifth lowest average cost per case in the nation and the lowest WC premiums in the Midwest (for the top 25 payroll categories in Wisconsin).  Wisconsin also has a nationally recognized return-to-work program. The average experience modification rate is below 1.0 resulting in discounted premiums, on average, for experience-rated employers.  The goal for Wisconsin is to move to second lowest average cost per case.  Good, sound safety policies will be instrumental in attaining this goal.
  8. Labor Proposals:  Mr. Kent presented Labor’s proposals as follows:  
    1. Increase PPD benefits to a maximum rate of 55% of the state’s average weekly earnings;
    2. Increase supplemental benefits so that benefit rates for employees receiving PTD benefits receive a combined benefit rate that is equal to the rate in effect 6 years prior to the current year and provide for indexing benefit rates for the future;
    3. Insurers to pay all costs associated with DVR retraining;
    4. Form a study committee to review the effect of the loss of group health insurance coverage for injured workers;
    5. Form a study committee to review the effect of receipt of PTD benefits on the injured worker’s retirement benefits.

  9. Management Proposals:  Mr. Beiriger presented Management’s proposals as follows:

    1. To be eligible for disfigurement benefits, the injured worker must show actual wage loss;
    2. Employers have the right to direct care to providers of their choice for the first 90 days of care;
    3. Implants, medical hardware and prosthetics to be paid according to a medical fee schedule to be developed by administrative rule (consider a model after the state health plan fee schedule);
    4. Modify the formula amount for medical fees by reducing it from 1.4 to 1.0  standard deviations (i.e. the mean) resulting in a reduction in maximum allowable charges from the 92nd percentile to the 84th percentile; 
    5. Provide that the Medical Treatment Guidelines create a presumptive finding in determining the necessity of treatment and require the provider to contact the carrier for pre-authorization for care that exceeds guidelines;
    6. Require that PTD assessments be made only by board certified occupational physicians;
    7.  Modify the Certification of Readiness (COR) process to require both parties’ certification that the case is ready to proceed to hearing; no hearings can be scheduled within 90 days of the filing of the COR unless by mutual agreement of the parties; any modifications to the issues would require an updated COR;
    8.  Require all medical records and evaluations to be available at the request of either party at no charge upon written request;
    9.  Require that all medical fee disputes be associated with a reported claim before the medical fee dispute can be processed;
    10.  Increase PTD rates to current levels and indexing for future benefits for workers meeting the requirements of Wis. Stat. §102.44(2) (i.e. statutory PTD);
    11.  Amend Wis. Stat. §102.17(4) regarding the statute of limitations for occupational disease to change the language to delete “last payment of compensation” and replace it with “after the date that compensation, other than treatment or burial expenses”;
    12.  Require applications for hearing to specify the issues in dispute or risk dismissal of the application;
    13.  When impleading parties the department shall delineate the reason for the impleader and provide supporting documentation;
    14.  Amend Wis. Stat. §102.17(1)(g) to provide the report of tie-breaker doctor shall be rebuttable and the doctor shall be available for cross-examination by both parties;
    15.  Uncontested denials of indemnity claims shall not require a final medical report;
    16.  Provide that indemnification, hold harmless, duty to defend and waiver of subrogation clauses in contracts between general and subcontractors are null and void as they relate to claims made by injured workers against third parties and provide a limit of $100,000 for non-economic damages.

    Management and Labor commented on the Department proposals as follows (numbers correspond to the Department proposal numbers):  

    1. Management and Labor both agree based on the current, revised proposal.  
    2. Mr. O’Malley explained as a result of the Wisconsin Supreme Court decision in Society Insurance v. LIRC, there are two classes of cases:  those where the statute of limitations expired prior to April 1, 2006 and the Work Injury Supplemental Benefit Fund is liable, and those where the statute of limitations expired after April 1, 2006 and liability is unclear.  The Department of Justice is reviewing the second class of cases on a case-by-case basis.  In two-thirds of the pending barred traumatic cases the statute of limitations expired prior to April 1, 2006.  For dates of injury on or after April 1, 2006 the carriers continue to be liable for benefits for traumatic injuries.  The proposal would assign liability to the WISBF for barred traumatic cases where the statute of limitations expired after April 1, 2006.  Management requested that the WCD bring exposure statistics to the next meeting and the proposal will be considered further.   Labor agrees with the proposal.
    3. Management and Labor both agree.
    4. Management and Labor both agree.
    5. Management suggests the time period be changed to 12 months and then would agree; Labor agrees as originally proposed and will consider the proposed change to 12 months.
    6. Management and Labor both agree.
    7. Management agrees while Labor opposes it as drafted, but is not opposed to having the Department of Administration adjust the claims.
    8. Mr. O’Malley explained that WISBF is running out of money.  Money is continuously being paid into and out of the Fund.  The proposal includes a provision for prioritization of claims similar to that of the Uninsured Employers Fund (UEF).  Management will consider it further; Labor agrees.
    9. 9.  Management and Labor both agree.
    10. Management and Labor both agree.
    11. Management and Labor both agree.
    12. Management agrees if the proposal is amended to indicate three or more doctor visits; Labor agrees.
    13. Management will consider it further; Labor agrees to the original proposal.         
    14. Mr. O’Malley explained the reason for the proposal is that the department receives complaints from injured workers that the insurance carrier does not advise them that medical bills are not being paid.  The health care provider issues a bill but the employee never receives it.  The first notice of unpaid bills is from a collection agency.  Notice of denial of payment for the treatment should be from the insurance carrier and the notice should be copied to the injured worker.  In most cases the next step is an application for hearing filed by the injured worker.  A copy of the explanation of benefits (EOB) sent to the employee would suffice.  Management will reconsider, while Labor agreed to the proposal if language is added that a specific reason for the denial must be included.  
    15.  Mr. Aiello explained that employees call the WCD with questions and the WCD must ensure PTD and supplemental benefits are paid at the current rate.  If the requirement to file an annual report is codified, carriers and self-insured employers are more inclined to report payment information on a timely basis.  Management will reconsider the proposal; Labor agrees to the proposal.
    16. Management will reconsider the proposal; Labor agrees to the proposal.
    17. Management conditionally opposed the proposal indicating the WCD should develop a form and have it available online; Labor agrees with the proposal.
    18. Ms. Knutson explained that requiring parties to send information via certified mail would only be used when there is a problem with parties claiming non-receipt of information.  Mr. O’Malley offered that the WCD would draft language to delineate circumstances under which the department would require certified mailing.   Management will reconsider after the new language is presented to the WCAC; Labor agrees with the current proposal.
    19. Same response as for #18.
    20. Management will reconsider after the WCD requests that the Health Care Provider Advisory Committee draft new language; Labor agrees.    
    21. Mr. O’Malley explained that the minimum ratings in Wis. Admin. Code §DWD 80.32 had not been adjusted since 2004 and §DWD 80.26 is really outdated.  The WCD will need to gather a group of ophthalmologists to review §DWD 80.26.  The last time that §DWD 80.32 was updated, Ms. Margaret O’Connell prepared a lengthy survey that was sent to 300 physicians.  Average wholesale price (AWP) will soon no longer be available as a benchmark for pharmaceutical pricing.  The Red Book is still available, while First Data Bank and Metaserve have discontinued compiling and printing AWP.   If the Red Book is discontinued, the WCD will need to amend Wis. Stat. §102.425.

    Mr. Buchen moved, second by Mr. Kent, that the WCAC approve Department proposals #1, 3, 4, 6, 9, 10, 11 and 12.  Motion carried unanimously.

    Mr. Kent relayed Labor’s position on the Public proposals as follows (numbers correspond to Public proposal numbers):

    1. Labor agrees with a modification to require the carrier to reply within 7 days or be liable for a $100 penalty paid to the employee for every day of delay.
    2. No position.
    3. No position.
    4. Oppose.
    5. Oppose.
    6. Agree.
    7. Agree as employees need access to attorneys.
    8. Oppose.
    9. Oppose.
    10. Sections:                
      1. Agree (same as # 7).
      2. Agree.                
      3. Agree.
      4. Agree.
      5. Agree (relates back to # 7).
      6. Agree.
    11. Oppose.
    12. Labor would agree if language could be developed for reasonableness of fee disputes but not necessity of treatment disputes.  The department resolved the one outlier necessity of treatment dispute case.   Labor will incorporate the Public proposals they agree with into their proposal package.  Management will advise at the next meeting which Public proposals they can support.

  10. Adjournment:  Mr. Beiriger moved to adjourn the public part of the meeting; second by Mr. Kent.  Motion carried unanimously and the public meeting adjourned at approximately 3 p.m.

    Next Meeting:  May 9, 2011