Wisconsin Employers for Equitable Worker’s Compensation
A coalition in support of an equitable workers’ compensation system
The Wisconsin State Legislature chose not to act on the agreed-upon bill negotiated by the Worker’s Compensation Advisory Council (WCAC), allowing the bill to lapse at the end of the spring 2018 session. The legislature’s failure to act on this measure means Wisconsin employers will continue to pay unmitigated costs for medical treatment for work injuries.
The agreed bill would have introduced medical cost containment to Wisconsin in the form of a fee schedule, remedying a significant disparity in the cost of care for injured workers here.
Did you know that Wisconsin is just one of six states without a fee schedule for worker’s compensation medical services? This fact costs employers significantly via direct claim costs or increased insurance premiums.
According to the Worker’s Compensation Research Institute,
- Wisconsin had the highest average per-claim medical payments from 2014-2015
- Wisconsin employers pay more than double the typical price for common services like X-rays and basic evaluations.
According to the National Council on Compensation Insurance (NCCI), from 2009-2013 (the most recent years for which that organization has data),
- Wisconsin’s costs for no lost time medical treatment claims rose by 30 percent compared to just 14 percent nationwide.
- Wisconsin’s costs for lost time medical treatment claims rose by 22 percent for the same period, compared to just five percent nationwide.
If Wisconsin employers are paying so much more for worker’s compensation claims, why hasn’t a fee schedule been approved?
Medical providers are intent on protecting their rich revenue stream from worker’s compensation, spending lavishly to retain the support of the state legislature. A look at recent campaign spending is instructive: The healthcare industry contributed more than $4 million to Wisconsin lawmakers in 2017, according to data from followthemoney.org. That’s more than the combined contributions of the transportation industry, agriculture industry, and labor unions.
It’s imperative that Wisconsin employers stand together and insist the legislature act on their clear demand: Bring medical costs for work injuries in Wisconsin in line with the rest of the nation.
Looking Ahead to Next Steps
So what next? By law, changes to the Wisconsin Worker’s Compensation Act are to originate with the WCAC. This council is comprised of five members representing management and five members representing labor. Every two years the council negotiates an agreed bill for the legislature to consider. Two of the last three agreed bills have included fee schedules, and the legislature has rejected both.
The council has its work cut out for them.
Should the same fee schedule structure be proposed again, but with more time to allow employers to better understand it and thus rally behind it?
The fee schedule was to be built on data from health insurers on the amounts they pay for medical services. Critics of the last agreed bill—many of whom otherwise support a fee schedule—say the proposed structure relied too much on the Department of Workforce Development being able to obtain proprietary data from health insurers. The bill assured health insurers their data was never to become public, but fell short of providing true authority to demand they turn it over.
Should the WCAC revise the proposed fee schedule, perhaps attempting once again to use a “Medicare plus” model, wherein fees are based on Medicare rates with a percentage increase?
Labor members of the council argued against this structure, fearing it would create an environment where doctors would state conditions were not work-related in order to avoid the lesser reimbursement. The inverse dynamic is in place today—many close to worker’s compensation claims believe physicians currently state conditions are work-related to pursue richer reimbursements.
Or, is there a solution beyond a fee schedule?
The Worker’s Compensation Act currently allows for a fee dispute process, but bases it on an average of prices charged for medical treatment. Adjusting that language to base the fee dispute standards on the average of actual prices paid may reduce medical costs for work injuries, but not as effectively as a strong fee schedule.
Controlling Medical Costs Within the Current Law
Savvy employers are also exploring innovative ways to control costs within the current law. Negotiating rates for medical procedures before a work injury occurs, or bundling services associated with common surgical procedures, can save significant costs. But these programs only work if employers agree to pay the fees whether the claim is compensable or not. Giving up the right to dispute treatment for an alleged work injury is a paradigm shift many employers may not be willing to make. Are there statute changes the WCAC can consider to make it easier for employers to utilize these programs?
Time to Address Worker’s Compensation Indemnity Benefits
Of course, the cost of medical treatment is not the only worker’s compensation issue facing employers in Wisconsin.
The steady increase in the permanent partial disability (PPD) rate is temporarily halted by the legislature’s failure to act on the agreed bill, but PPD benefits in concept need to be addressed. True apportionment—allowing an employer to take credit for prior impairment—remains elusive. Improved surgical techniques are resulting in more favorable outcomes for certain procedures, such as meniscectomies, yet minimum ratings are still applied to these claims. A medical committee tasked with re-evaluating the minimum ratings has yet to produce any meaningful insight.
Employees suffering permanent total disability (PTD) still receive those benefits regardless of their age or other retirement income. Indeed, a worker suffering an injury that eliminates them from the workforce should receive sufficient benefits to replace a career’s worth of wages. But current law allows workers already very near the end of their working lives to significantly supplement their retirement by claiming a PTD injury. These benefits should be offset for workers who did not in fact lose out on decades of income due to an injury.
Likewise, temporary total disability (TTD) benefits can be adjusted to fairly compensate employees without creating undue burdens on employers. Part-time workers often have their TTD expanded to full-time benefits if they meet certain criteria. This creates a disincentive for these workers to ever return to work. TTD benefits should be based solely on the average weekly wage of the employee at the time of injury.
Wisconsin employers face many issues as our state competes for business and labor. Wisconsin Employers for Equitable Worker’s Compensation provides a forum to understand the challenges and opportunities in our worker’s compensation system, and to stand together for positive change.