Worker's Compensation Advisory Council
      Council on Worker’s Compensation
      Crowne Plaza
      Madison, Wisconsin
      August 08, 2011


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

      Excused:    Ms. Bloomingdale, Ms. Pehler, Mr. Redman and Mr. Schwanda

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

      1. Call to Order/Introductions:  Mr. Metcalf convened the Worker’s Compensation Advisory Council (WCAC) meeting at approximately 9:00 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 July 11, 2011 meeting without correction; second by Mr. Kent.  The minutes were unanimously approved.
      3. Correspondence:  Mr. O’Malley reported the department received correspondence dated July 27, 2011 from Mr. Brian Margan expressing concerns regarding medical costs and an employee’s right to choose his/her doctor. He referenced recent worker’s compensation law changes in Illinois.  The department will include his letter and attachments in the spreadsheet of proposals from the public for the next agreed bill cycle and will respond to Mr. Margan.

        The department also received correspondence dated August 3, 2011 addressed to the WCAC from the Liaisons to the WCAC offering staff resources to review and provide feedback on proposals involving health care.

        Finally, the department received a letter dated August 4, 2011 from Ms. Sandra Kmiec suggesting changes in the statutes to provide that benefits provided by the employer should continue during periods of disability, including dental, vision, and life insurance.   Further, that an employee’s time to attend medical appointments should be paid.The department will respond to Ms. Kmiec and will include her suggestions in the proposals from the public for the next agreed bill cycle.

      4.  Report - Proposal Updates:  Ms. Knutson reported the WCAC had requested information on Department proposals 14 and 16 concerning the frequency of complaints from employees.  The department does not have any specific data on the number of calls received from employees concerning unpaid medical bills; however, the department does occasionally receive calls on this issue.   Ms. Connor indicated that when a claim is denied, the denial letter is copied to the claimant.  However, when unrelated medical bills are denied, the denial is sent only to the provider.  Mr. Metcalf indicated that going forward department staff will keep track of the number of calls related to denial of medical bills.

      5. Large Deductible Insurance Coverage Wis. Insurance Alliance:  Mr. Beiriger indicated that Management’s response to Department proposals #14, 16, 18 and 19 is “no”.Mr. Metcalf responded that the department would like the WCAC to continue to review the health cost dispute process.

        Regarding Department proposal # 17, no change in the administrative rule is necessary at this time because the department developed a form as required by the current rule.

        Labor and Management adjourned to closed caucus and upon return, Mr. Kent reviewed Labor’s proposals as follows:

        #1. This proposal was modified to $15 increases each year in the permanent partial disability (PPD) rate for the next two-year agreed bill cycle.

        #2. This proposal was modified to provide for a two-year increase in supplemental benefits, increasing benefits for claimants receiving permanent total disability (PTD) benefits with dates of injury prior to January 1, 2003. In addition, Labor is proposing a committee to study funding of supplemental benefits on a long-term basis and funding sources in general for the Work Injury Supplemental Benefit Fund (WISBF).

        Mr. Beiriger responded that prospectively, supplemental benefit payments could be built into the insurance rates. Mr. O’Malley explained that the current funding sources for WISBF consist of assessments from insurance carriers and self-insured employers for dismemberments, deaths, $100 surcharges, and illegal employment of minors, and death benefit payments when the employee has no surviving dependents. Mr. Kent indicated the committee could study other revenue streams to keep the WISBF solvent.

        Ms. Knutson commented benefit payments out of the WISBF continue to increase and include payments for barred traumatic claims.It is projected that within the next two years the WISBF balance will be negative.  Mr. Metcalf indicated the department will need to prioritize payment of claims. Mr. O’Malley indicated that death benefit claims involving automobile accidents, heart attacks and strokes tend to be disputed.

        #3. When an individual plan for employment is developed by DVR, the employee should be eligible for payment of tuition, books, and fees. This proposal is related to Labor proposal #11, which provides that if an administrative law judge determines a vocational rehabilitation plan is appropriate, the ALJ can order prospective vocational retraining benefits for those employees who want to be retrained.

        # 4. Labor is interested in studying the issue of payment for prosthetics to get a handle on costs, perhaps with the development of a database.  A study committee should also address funding of supplemental benefits, and valuation of health insurance.  The committee should be staffed by WCAC members with technical support provided by department staff.

        #10. This proposal provides that temporary disability benefits would not be reduced by wages earned while the employee is involved in vocational retraining.

        #11. This proposal relates to proposal #3.

        #13. This proposal could be folded into proposal # 4 involving the study committee to review payment of prosthetic devices through a database or other payment standards.  Charges for implants including screws used in surgery should also be included to address high charges by providers.  Mr. Beiriger responded indicating Management is of the opinion this is a one case issue.  Management is looking at lower costs overall in worker’s compensation system.  Previous arguments by Labor were that the quality of treatment would be affected.  In Illinois, the payment to providers for the cost of implants including screws is calculated at 25% above the provider’s cost.

        Mr. Beiriger reviewed Management proposals as follows:

        #1.  Labor presented alternate language for Management to consider.

        #2.  This proposal involves the employer’s right to direct medical care. Labor should not dismiss this proposal out of hand; this introduces market forces into worker’s compensation medical cost pricing. Management is not interested in bad medical outcomes. It is in all of the parties' interest to make a good choice with reference to the treating physician; all parties want good recoveries from injuries. Mr. Brand commented that employer choice is a new concept in Illinois; the goal is to return the employee to work as soon as possible. Mr. Beiriger commented that employers and Labor negotiate the pool of providers for health funds and there is a role for that discussion in worker’s compensation.

        #3.  Management would agree to have the cost of implants, hardware and prosthetics studied; however, Management does not want all of the study areas linked together.

        #4.  Even though this proposal involves modifying the formula for the certified databases, the WCAC still needs to look at medical costs in totality. There are not a significant number of medical charges that exceed the standard deviation maximum reimbursement amount.  The certified databases just address the outlier charges.

        #5.  Management will defer to the Health Care Provider Advisory Committee’s recommendations with respect to any changes to the Medical Treatment Guidelines and use of the guidelines. It will be at least two years before any specific amendments to Chap. 81 of the Wisconsin Administrative Code would be proposed.

        #6.  Vocational experts are doing the assessments for permanent total disability based on loss of earning capacity. The determination of statutory PTD is made by the medical providers.  Management has a bias towards return to work for the worker’s compensation system.  To that end, they are agreeable to increasing benefits for injured workers who meet the definition of statutory PTD.

        #7. The WCAC is reviewing the Certification of Readiness process and the department is reviewing it as well.  Both Labor and Management were unhappy when the process was implemented by Sec. Gassman.  If the applicant determines he/she is ready for hearing but the defense only has 45 days to prepare, the defense will not be ready to proceed. The carrier should have at least 60 days to get ready; if evidence for new claims is provided, the 60 days’ notice to the carrier should again start to run.  Mr. Metcalf indicated Mr. O’Malley and Ms. Knutson can provide the WCAC with more specific information on the amendments to the process the department is considering implementing.

        #8. Labor’s concern is that medical records obtained by the carrier must be related to the worker’s compensation claim.  If Labor has a specific suggested change, Management would be willing to consider it.

        #9. The department has indicated a willingness to work on this issue. There is a much larger issue that must be addressed with respect to health cost disputes. This specific proposal is not as high in priority as other Management proposals.

        #10. Management’s proposal will increase benefits more for employees that are “statutory PTD” on a prospective basis than Labor’s proposed benefit increase for PTD employees. There are issues concerning funding the additional benefits and identifying cost savings in other program areas.

        #11. Management and Labor are in agreement with this proposal.

        #12 and 13. These proposals require further evaluation of the claims management process and they are a lower priority for Management.

        #14. This proposal deals with the issue of tiebreaker doctors.  Ms. Knutson indicated the Labor and Industry Review Commission (LIRC) issues remand orders directing the department to obtain opinions of tiebreaker doctors on about 12 cases per year.  Within the last couple of months the department received 4 or 5 remand orders from LIRC for tiebreaker opinions.  It is difficult for the department to find doctors to conduct the evaluations.  Management wants this issue resolved.

        #15.  Labor and Management agreed on this proposal.

        #16.  This proposal involves a transfer of risk.  Labor has responded that it is a matter of contract law.  Management maintains that it results in a breach of the exclusive remedy.  Labor maintains this should be addressed by the Legislature in general liability statutory changes.  Management approaching the Legislature to resolve this issue could result in more sweeping language than what is proposed by Management in this proposal.  Management is willing to discuss this further with Labor.

        With regard to the financial status of the WISBF, there are cost drivers in the system and the WCAC cannot keep expecting the WISBF to pay for increased benefits.  Management cannot give further increases in benefits serious consideration without reducing costs somewhere else.

        Mr. Beiriger indicated Management reviewed Labor’s proposed language to modify Management proposal #1.   Management is agreeable to that additional language.

        Mr. Kent, on behalf of Labor, responded to Management’s proposals as follows:

        #1.  There is a possible agreement on language.

        #2.  Labor feels this would take worker’s compensation back to the panel system.  The right of employees to choose their doctor is a cornerstone element for Labor.  Labor is mindful of the cost.  The fact that the employee is allowed to select his/her doctor does not drive up costs.   Employees must have a trust relationship with their doctors.  Labor does not want to lower the percentage of positive medical outcomes.  Worker’s Compensation Research Institute (WCRI) data shows employees are satisfied with their medical care in Wisconsin

        #3. Labor is in agreement to study those issues.  Labor questions what database Illinois is using – does it involve a 25% across the board increase?  Wisconsin is unique and should study its own sys tem.  Some costs are high and should be brought under some scrutiny.  Mr. Brand responded there are no databases for this type of medical hardware or prosthetics.  Different states use different mark-ups based on the cost of each individual item.  Ms. Knutson explained how the department rules in reasonableness of fee disputes involving medical hardware or prosthetics.

        #4 . Labor will defer on this proposal as it not sure of its effect.  There has been an adjustment of the standard deviation in the past and Labor is questioning the justification for this proposal.  Labor is concerned with quality of medical care for injured workers.  Last agreed bill cycle there was a proposal before the WCAC to freeze the database amounts and increase charges going forward based on the medical Consumer Price Index (CPI).  This proposal should be studied further.

        #5.  The Medical Treatment Guidelines are really for experts to use in necessity of treatment disputes.  Mr. O’Malley explained the purpose of the guidelines is to serve as a factor to consider in necessity of treatment disputes; not to be used for general utilization review as provided under Wis. Admin. Code §81.01(1)(b).  The guidelines have been in effect since November 2007 and the department has experienced no major problems with them.

        #6.  Vocational experts really render the opinions on PTD due to loss of earning capacity and the department makes the decision on whether an injured worker is PTD. Management has provided no studies to show occupational medicine doctors render better opinions than treating doctors, save money, or result in more efficiencies in the system.

        #7.  The Certification of Readiness (COR) process is being studied currently by a committee of attorneys.  The department is making efforts to implement some changes in the process including modifying the COR form.  The department’s internal reforms address the concerns in this proposal.

        #8. The burden should not be placed on the employee; the current law works.

        #9. The department is working on this issue and the WCAC should let them handle this issue.

        #10. Labor cannot consider changing the PTD odd-lot standard to a statutory PTD standard.  It is impossible to enumerate all medical conditions that would apply in cases of PTD.  The decision of an ALJ can be appealed.  No labor market exists for employees with residual skills.  Mr.  Beiriger commented that employees must be permanently unable to work.  Young workers are being deemed PTD.  Management wants employees to be preparing for work and attending retraining if possible.  Labor is asking for more benefits for PTD employees, without providing a solution to pay for them.

        #11. There is full agreement on the language of this proposal.

        #12 and 13. The department is already dealing with this issue through a focus group.

        #14. Doctors will probably not agree to cross-examination; this will discourage doctors from participating in tiebreakers.  There are only about 12 cases per year involving tiebreaker opinions.  The parties can rebut the tiebreaker doctor’s conclusions.

        #15. Labor agrees with this proposal.

        #16. This is a matter of contract law; Labor does not want to interfere with private contracts.  The department has received letters from employers asking the WCAC not to interfere with contracts, but to take the issue to the Legislature as it involves business practices in this state.

        Labor’s proposal priorities are as follows:

        #1. This proposal involves PPD benefit increases of $15 per year for two years.

        #2. This proposal involves an increase in supplemental benefit rates for two years along with a study of funding sources.

        #3. This proposal involves providing employees with tuition and books for retraining to return them to the workforce.

        #4. Labor proposes to study payment of prosthetics, inclusion of the value of health insurance in worker’s compensation benefit rates and PTD supplemental benefits.

        #10. This proposal provides for no deduction in disability benefits during retraining when an injured employee is also earning wages.

        Labor and Management adjourned to closed caucus at 1:30 p.m. and returned at 4:55 p.m.   Mr. Kent reported Labor and Management were still working on an agreement and will need to continue to do so at the next meeting.  There is some agreement on Management’s proposals, but there needs to be movement by Management on Labor’s proposals.  There was a productive discussion on high priority issues.  Mr. Metcalf reminded the WCAC that the Department is available to provide assistance.  Monday, September 19, 2011 at 10:00 a.m. will be reserved as a tentative meeting date to be held via teleconference.  If the WCAC has an agreement on the terms of an agreed bill at the next meeting, a draft of the agreed bill may be ready for review by that date.

      6. Adjournment:   Motion by Mr. Beiriger, second by Mr. Kent to adjourn.  The motion carried unanimously and the meeting was adjourned at approximately 5:00 p.m.

        Next Meeting:  September 12, 2011

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