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NEW LAW: Wisconsin Enacts Worker's Compensation Changes

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It's official. The Wisconsin legislature and Governor recently approved amendments to the worker's compensation system in our state. We have a new law.

The bill arose from the Wisconsin Worker's Compensation Advisory Council-the historically stabilizing group, consisting of members of labor and management. The Advisory Council bill produced common sense reforms and improvements to the worker's compensation system. A competing bill (informally known as the "work comp destruction bill") never even received a hearing. In stark contrast, the legislature demonstrated support for the Advisory Council recommendations by unanimously passing the bill (Senate vote was 32-0 and Assembly vote was 97-0), and Governor Walker continued that support by swiftly signing the Council recommendations into law.

The new changes are 2015 Wisconsin Act 180. The bill is effective March 2, 2016.

Importantly, the new bill does not alter the underpinnings of the worker's compensation "grand bargain", whereby employees gave up the right to sue in court in exchange for scheduled, fixed benefits without having to prove fault. Additionally, the new law does not affect an employee's right to choose their own medical doctor and care, nor does the law impose any type of major medical fee schedule.

The Advisory Council bill was a compromise, as per usual, with provisions that benefit workers and employers. Among the major highlights of the new law:

  • Increased PPD Benefits. An injured worker's maximum weekly benefits for permanent partial disability (PPD) will increase $20 to $342/week for injuries on/after March 2, 2016, and to $362/week for injuries in 2017.
  • Greater Access to Retraining Benefits. Injured workers with permanent limitations that do not allow a return to the time-of-injury employer can pursue academic retraining benefits (weekly maintenance benefits while in school, along with tuition, books, meals, and mileage). Traditionally, a hearing could not be held until the worker actually was enrolled and taking classes, which could be financially prohibitive when a worker is off work with no income. The new law allows a Judge the authority to issue prospective orders for future retraining benefits before the worker is in school.
  • Allowance for Working while in School. A worker pursuing an academic retraining program will be allowed to work up to 24 hours/week without those wages reducing any weekly worker's compensation maintenance benefits.
  • Statute of Limitations Reduction for Traumas. The statute of limitations, running from the date of injury or date of last compensation payment, for traumatic injuries only is reduced from 12 years to six (6) years. The statute of limitations for occupational exposure claims is not changed-remaining at 12 years.

We anticipate that the traumatic injury statute of limitations change does not apply retroactively, meaning the new 6 year statute of limitations applies to traumatic injuries beginning March 2, 2016.

The impact of this change will play out in the future. The potential for increased litigation exists as workers file hearing applications to protect their medical treatment expense benefits. For example, if a worker has a knee injury in April 2016 with arthroscopic surgery one month later, all disability benefits paid by the end of 2016, and that worker continues to have periodic difficulties ultimately resulting in a proposed knee replacement in 2023, they may be time-barred if no hearing application was filed within 6 years (or the end of 2022). If barred, those expenses are shifted to the worker, group health insurance, or the government.

  • PPD Apportionment. If a worker suffers a traumatic injury resulting in permanent partial disability (PPD), a physician's report on PPD shall include a determination of the approximate percentage of PPD caused by the work injury along with the percentage attributable to "other factors" before or after the work injury. A worker, upon request, shall disclose any/all previous findings of permanent disability or impairments that are relevant to the work injury. The provision does not apply to occupational exposure injuries and does not mandate that a physician must find some percentage attributable to other factors (i.e., the entire functional PPD percentage can be attributable to the traumatic work event).Heavy litigation is likely given the provision's ambiguity. By intent, it appears the language is restricted to functional PPD. The provision should not upset the "as is" rules on legal causation of an injury itself. Additionally, it does not appear the provision would affect liability for temporary total disability, medical expenses, retraining benefits, or potential loss of earning capacity or permanent total disability benefits.Litigation likely will occur over the type of competent evidence necessary to constitute "other factors" apportioning a PPD award. With the worker disclosure requirement, one could argue that only documented, ratable disability findings can be used, as opposed to a doctor's speculation regarding pre-existing condition (e.g., a worker's complaint of pre-existing sporadic low back pain is different than a pre-injury accident that resulted in a lumbar fusion procedure with a paid 10% PPD).
  • Lost Time Benefit Denial for Misconduct Terminations. Previous law, under the Brakebush case doctrine, allowed a worker to receive lost time benefits (Temporary Total Disability, or TTD) during a healing period even if they had been terminated for misconduct or allegedly valid reasons by the employer. The new law effectively puts an end to components of the Brakebush doctrine.Temporary disability benefits can be suspended when an employee is released to limited duty post-injury and subsequently is suspended/terminated for "misconduct" or "substantial fault," as defined under the unemployment insurance law (Chapter 108). Based on the statutory language, TTD benefits, however, are still payable if a worker is completely off work in the healing period, per their physician.These terms "misconduct" and "substantial fault" were recently included in the unemployment laws with specific statutory definitions:
    • "Misconduct" is conduct evincing such willful or wanton disregard of an employer's interests as is found in (1) deliberate violation or disregard of standards of behavior that an employer has a right to expect of his or her employees; or (2) carelessness or negligence of such degree or recurrence as to manifest culpability, wrongful intent, or evil design in disregard of the employer's interests or to show an intentional and substantial disregard of an employer's interests or of an employee's duties and obligations to his or her employer.
    • "Substantial Fault" equals acts or omissions of an employee over which the employee exercised reasonable control that violate reasonable requirements of the employee's employer, but not including minor infractions, inadvertent errors, or failure to perform work due to insufficient skill, ability, or equipment.

With the worker's compensation act now referring to the unemployment rules for the definitions of both terms, the possibility exists for the worker's termination to result in the cessation of both worker's compensation and unemployment benefits.

The exact interpretation of these terms and the legitimacy of terminations will play out through litigation-and presumably a significant amount of litigation.

  • Benefit Denial for Alcohol/Drug Violation. All indemnity benefits are precluded if an employee violates an employer's consistently enforced drug policy concerning alcohol or drug use when there is a direct causation between the violation and the worker's injury. The worker, however, can still recovery/pursue medical treatment expenses.Previous law allowed a potential reduction of a worker's benefits by 15% if an injury was the result of intoxication or the use of controlled substances.Notably, the new provision is a large injection of "fault" concepts into the otherwise no fault system undergirding the grand bargain of worker's compensation.
  • Fraud Prevention. Worker's Compensation Department (at DWD) will fund one Department of Justice position to assist in investigating and prosecuting any "fraudulent" claim or "fraudulent activity" on the part of any player in the worker's compensation system (insurance carrier, employer, employee, or health care provider)
  • Electronic Medical Records. The cost for certified medical records in "electronic format" is fixed at a maximum of $26 per request.
  • Physician Drug Dispensing. Prescription drug dispensing outside of a licensed pharmacy (i.e., physician dispensing) are limited to the existing pharmacy fee schedule and pharmacist dispensing fee.
  • Review of Minimum PPD Ratings. The new law requires the Department to create a medical advisory committee, consisting of various areas of medical specialization, to review and revise the minimum functional PPD ratings found in the Administrative Code every eight years.

Change can mean uncertainty. A number of the statutory enactments and effects will be seen over time and through the litigation process. The key is that the Advisory Council process worked, continuing its vital role in Wisconsin's beneficial and efficient worker's compensation system.

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