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The Bill is Dead: Worker's Compensation Agreed-Upon Bill Fails

Unfortunate news in the world of Wisconsin worker's compensation: the agreed-upon bill is dead. A post-mortem can be found at WisconsinWatch.org ("Titans clash, worker's comp changed die"). It is a near certainty that no changes to the worker's compensation law will happen this year.

We previously discussed - in this blog-the historical efforts and incredible value that the Worker's Compensation Advisory Council provides to the comp system in our state. For four decades, the Council-made up of equal members from labor and management representatives-essentially create a collectively bargained bill that is presented to the legislature regarding potential changes to the worker's compensation act. This Council process involves hearings held across the state, and the Council requests and includes input from other affected groups (like medical providers). Every two years, the Council process results in an "Agreed-Upon" bill that the legislature historically approves without signficant debate.

The sucess of the Council is known throughout our state's comp system-often recognized as a national model (and even a source of jealousy from practitioners in other states). The agreed-upon bill process stabilizes the worker's compensation system, producing a beneficial result for all players in the system. We hear, time and time again, the value of stability and known costs from employers, insurance companies, and medical providers.

Unfortunately, in 2014, antagonism for the Council process arose from an unlikely source and the agreed-upon bill failed (The bill never made it out of committee and to the legislature for a vote). While the representatives for injured workers, employers, and insurance companies agreed to the comp law changes, the opponents of the bill largely came from the medical community and medical providers. The full text of the agreed-upon bill can be found here. The bill contained a number of benign or historically "normal" changes, like increases in the permananent partial disability (PPD) rate for injured workers and some other procedural fixes. The bill, however, contained some additional, significant changes to the law.

One provision involved the continuation of an injured worker's health insurance during a healing period. Currently, there is no obligation for an employer to continue a worker's health insurance after being off work following a work injury. The provision would benefit workers (and their families) by keeping health insurance coverage after suffering an injury through no fault of their own. Additionally, it likely would benefit employers and insurance carriers by allowing a worker to get the necessary medical treatment and back to work quickly, even in disputed claims. Despite the provision's benefits, in the current political climate, any suggestion of "mandated" insurance receives a cool reception from certain politicians. This provision, however, did not kill the bill by itself.

Arguably the biggest change involved a future, potential medical fee schedule in hopes of lowering the cost of medical expense reimbursement. The drumbeat for change has grown over the years as insurance carriers have noted the rising costs of medical bills in the comp system. As a colleague noted, about 20 years ago, 2/3 of the benefit payments in a worker's compensation case went to the employee, with 1/3 to health care providers. Now, the opposite holds true-with almost 2/3 of every worker's comp "dollar" going to reimburse medical providers. The Council process was tasked with addressing the rising costs of medical bills in the system.

Medical provider organizations were present throughout the advisory council process. The organizations were asked to present proposals regarding reining in medical expenses. The agreed-upon bill resulted in a proposed future medical fee schedule that would be developed by the Worker's Compensation Department. The Department would address the details, but in general, the fee schedule would be tied to average group health insurance reimbursement rates plus 10%.

We will leave the discussion for another day about the nature of the fee schedule and whether it was generous, draconian, or somewhere in between. Certainly the medical provider community overall rejected the proposal. Lobbying efforts ensued. The agreed-upon bill-for the first time in historical memory-was never even presented for a vote.

The future remains uncertain. Many needed changes for injured workers are collateral damage from the failure to pass the bill. Rising medical costs will remain an ever-present danger to the viability of the worker's compensation system. Presumably, the Advisory Council will reconvene and start the stabilizing process anew-with hopes for better success ahead.

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