WISCONSN LISLATURE P.O. BOX 8952 MADISON, WI 53708 September 30, 2013 Jeffrey J. Beiriger President Association Management Services, Inc. P. 0. Box 594 Menasha, WI 54952 Stephanie Bloomingdale Sze.Ciietary"Treasurer f-"3 Wisconsin .. 6333 Bluemouud Rd. Milwaukee, WI 53213 .- Dear Mr. Beiriger and Ms.'Bleo1ningdale, As Chairs of the Worker's Compensation Advisory Council you are undoubtedly aware of the concerns that have been raised relating to Wisconsin's -worker's compensation insurance system. We believe it is imperative for the advisory council to act this session to address these concerns before they beginto compound. In doing so, businesses will benefit from premium} savings and greater stability in the system. They will also be able" to reinvest back into the workforce; increase employment opportunities and raise the standard for existing employees. As elected 1'ep1'esentatives, it is our priority to Work with the council and give you the chance to address these issues. The first issue we would like to see addressed is related to rapidly rising medical costs. We are encouraged that your nreinbership has already taken the lead in starting to focus on this issue. Aecording to by the Workers Compensation Research Institute, n_1ed,ic_al costs have increased at a faster rate than other states. The study showed that the annual average increase in medical costs/claims from 2005-2010/ll in Wisconsin was much higher than t.he median state increase of 5.8%.1 It is our belief that any council package, at a nn'm'n-mm, should keep Wisconsin's medical costs from increasing by more than the median state average. Our shared goal should be to get Wisconsin out of the top states when it comes to increasing medical payments, while protecting our tradition of positive outcomes for workers and low litigation rates. We also have concerns about potential fraud within the system. Through public hearings, it has been made clear that fraud is being detected but not necessarily addressed? This is unacceptable. This fraud extends to workers, who may be misrepresenting the true nature of their claim, and to businesses that may misrepresent the work their employees do. If we don't remain vigilant on this issue, the possibility exists that we could be degrading the integrity of the system. We believe this is avoidable and that there are a handful of steps the council can agree on to move us in the right direction. Our recoimnendations come from meetings with other legislators, businesses, employees, and stakeholders. During these meetings it has become clear that while we have a stable worker's compensation system, there is room for improvement. With these concerns in mind we, the undersigned members of this letter, ask that the Worker's Compensation Advisory Board consider the following suggestions. Addressing increasing medical costs: 1. Consider allowing carriers to utilize health networks. Fees regarding medical record copies do not reflect the digitalization of records, and should be adjusted accordingly. 3. We would encourage the council to work with the Department of Workforce Development (DWD) and the Health Care Provider Advisory Committee to do a thorough review of treatment guidelines under DWD Administrative Rule Chapter 81. 4. The council should also work with the DWD and the Health Care Provider Advisory Committee to ensure partial disability ratings in DWD Administrative Rule Chapter 80.32 are reasonable and up-to-date. 5. Current Supreme Court case law prevents employees from being able to stack workers compensation awards, otherwise known as the Me Cartin rule.3 We would encourage the council to codify this rule in state statute, and to look at how other states deal with concurrent jurisdiction to ensure individuals are not using Wisconsin to enhance their benefits. 1 C0mpSc0peT*" Medica1Ber7c}m2m'ks For Wiscoirsizz, 13th Edition (2013) 2 Assembiy Committee on Labor and Senate Committee on Judiciary and Labor public hearing on Workers Compensation, July 31, 2013 3 Industrial v. Me Cartin, 330 U.S. 622 (1947) 6. There are cost containment measures in place for prescription drugs, however, those policies do not extend to on-site physician dispensing. We would like to see this addressed. We would encourage the council to review Wisconsin Statute 102.17 (4) to be sure our statute of limitation provisions are reasonable and consistent with other states. Under current law, small employers that do not receive a mod are at disadvantage of receiving adjustments for a no loss claim year. Other states have created a premium incentive program for small employers and we would like the council to consider establishing such a program. Fraud detection and enforcement: 1. Unfortunately, employees may not be entirely truthful when it comes to the condition of an injury. We encourage the council to look at the definition of fraud in Wisconsin Statute 943.395 to ensure it is applicable to circumstances that may arise in worker's compensation cases. If they are not, we encourage the council to create a suitable definition with similar penalties in Wisconsin Statute l02. Many other states have requirements that insurance forms, and even cheeks issued by an insurer, contain a warning to employees that insurance fraud is a crime. The council may want to consider adopting this. We would encourage the council to work with the Health Care Provider Advisory Committee to update Wisconsirfs guidelines relating to opioid treatments and the abuse and overuse of opioids by some injured workers. When a fraud case is forwarded from DWD to local prosecutors, and prosecution seems to be sparse. Other agencies, such as the Department of Justice or the Office of the Commissioner of Insurance, should be given the ability to prosecute these cases as well. The council may want to encourage greater electronic information coordination between DWD's Worker's Compensation division and other state agencies to identify wages reported earned by PTD claimants. Agreements with the Department of Revenue and DWD's Unemployment Insurance division may help in this endeavor. We would also recommend applying the following to address some concerns relating to administrative law judges. Administrative Law Judge (ALJ) reform: 1. 2. To ensure a fair and honest court process, we would like the council to consider codifying its training for ALJ Under DWD Administrative Rule Chapter 80.03 (1) the Department must sign off on any employer/employee compromise concerning an employer's liability. We would like the council to provide greater clarification in statute or rule to interested parties as to what factors DWD considers in approving a compromise agreement. This guidance should not set the ceiling of actions for the council. We look forward to continuing to work with you in a collaborative manner to address our concerns, and await a recommendation back from the council before the end of the year. Thank you again for your attention to this letter. Sincerely, i Daifknodl Glenn Grotman State Representative, Chair State Senator, Chair Assembly Committee on Labor Senate Committee Judiciary and Labor 24*" Assembly District 20" Senate District o4!/1 Mary Czaja Ton1 Larson State Representative State Representative 35th ssembly District 67"' District Dave Murphy Seve Nass State Rep. State Representative 56*" 33"' Assembly District State Reresentative State Representative 86th Assembly District 25"' Assembly District Thomas Weatherston State Representative 62"" Assembly District Cc: Members of the Workers Compensation Council John Metcalf, Division Administrator, Department of Workforce Development