March 25, 2014

Titans clash, worker’s comp changes die

It has the makings of a Greek tragedy, where the flawed protagonist unwittingly becomes the agent of unanticipated disaster.

Last fall state legislators forcefully urged the Wisconsin Worker’s Compensation Advisory Council to rein in related medical costs. These have risen more rapidly in Wisconsin than other states and constitute the lion’s share of payments made under the state’s program for those injured or disabled at work.

“It is our belief that any council package, at a minimum, should keep Wisconsin’s medical costs from increasing more than the median state average,” declared a Sept. 30 letter to the council signed by nine Republican state legislators including Rep. Dan Knodl, R-Germantown, chair of the Assembly Committee on Labor.

Assembly Speaker Robin Vos, R-Rochester, also decried the rising cost, warning that if the council “can’t reach some consensus, the Legislature might have to act.” That’s an unsettling prospect, especially since this area of lawmaking has operated smoothly for decades with minimal legislative involvement.

Every two years the council, with five voting members from both management and labor, crafts a package of agreed-on changes to the worker’s compensation program. The resulting bill has historically received unanimous legislative support, according to the state Department of Workforce Development.

As lawmakers wanted, the council did address the cost issue, and it did reach consensus. The agreed-on bill, AB 711, which Knodl introduced Jan. 31, directed DWD to establish a fee schedule for services to injured employees. Providers could charge no more than 10 percent above the average paid by state group health plans.

Committee co-chair Jeffrey Beiriger, representing management, says 43 states already have medical fee schedules for their worker’s compensation programs. Co-chair Stephanie Bloomingdale of the state AFL-CIO, representing labor, calls the proposal embraced by the council “common sense” and “fair.”

Moreover, the savings would go to increase program benefits. For instance, the maximum for a person receiving permanent partial disability would rise from $322 to $337 a week. Long-dormant rates for some severely disabled workers would also increase. And there would be potential cost savings for employers.

“We were very proud of the process and outcome,” Beiriger says. “We did what was asked of us.”

Enter the medical establishment, for which the fee-structure savings, estimated at $100 million to $200 million a year, would translate into lost revenue.

“When I saw that number, I thought, ‘You’ve got to be kidding me,’ ” says Mark Grapentine, lobbyist for the Wisconsin Medical Society. “How could you think there would not be ramifications to that?”

Grapentine faults the process, saying “Both sides decided to agree on a proposal that has deleterious effects for a third entity that wasn’t at the table: the health care world.”

Bloomingdale disputes this, saying health care providers had numerous opportunities for input, but failed to propose anything that would achieve the savings they felt Republican lawmakers were clamoring for.

The Medical Society and others mobilized against the bill. What ensued was a massive behind-the-scenes clash of special interest titans.

Within two weeks, more than 50 state lobby groups had staked out positions on the bill, about half in favor and half against. Proponents include Wisconsin Manufacturers & Commerce and other business groups, insurers and labor unions. Opponents include groups representing doctors, hospitals and other health care providers.

Faced with this blowback from health care providers, lawmakers brought the curtain down. The normally routine bill appears dead this session, meaning nothing can pass until next January at the earliest. That means no cost savings, no increases for injured workers, no breaks for businesses.

“It really is a shame,” Bloomingdale says. “A lot of people are going to be harmed because this bill was not passed.” Agrees Beiriger, “The only real winners in all this are the medical providers.”

Rep. Knodl, through an aide, declined comment. The council co-chairs vow to keep trying. Says Grapentine, “We’ll see what the bill next session looks like.”

  • John Neal

    Mr. Lueders, I’ve watched this process from the inside (7 years with DWD and 34 years representing injured workers), and you have done a terrific job laying out what happened and why. Thanks on behalf of injured workers (and employers, I’m that too) for your time and attention to this issue.

  • Jim Smith

    Here is the employers side. Basically, whatever the employee says goes and they get workers comp. They get the issue fixed and the get compensated for partial loss of shoulder, elbow, or whatever ailment they have. I work with field employees who are very active outside of working hours yet the injury always happens during work hours and 50% of the time when working by themselves. Even if it not an injury, the arthritis was aggravated by work. Had an employee, claimed hurt knee bending down. Work comp claim…goes to Dr., dr orders MRI…MRI finds nothing wrong….employee wants issue fixed even though nothing on MRI and wants exploratory surgery….all they found was arthritis….of course they said it was aggravated on the job and therefore employers fault. 3 months later of lost time, disability payment for loss of mobility in knee and employee returns to work. This is why the system is broken. Don’t get me wrong, many legitimate claims comes through but how to you weed out the fraud because its there and it is driving costs higher.

    • john edmondson

      Mr. Smith, I have worked both defending employers and bring claims against them for injured workers over the course of almost three decades. It is my informed and sincere opinion that there is just as much, if not considerably more “fraud” perpetrated against workers by workers compensation insurance carriers as there is fraud perpetrated by workers against their employers/carriers. When a worker does it, it is called “fraud” and they risk imprisonment and fines for that conduct. When an insurance carrier does it, it is called “bad faith” and they risk a fine of up to 200% of the amount defrauded, but capped at a $30K penalty; their risk is minimal when compared to that of a worker. Maybe that is why there is so little worker fraud in the Wisconsin comp system. Some work comp insurance adjusters seem to think fraud/bad faith is part of their job description as long as done in smallish amounts here and there.

      If a work activity or an injury aggravates a pre-existing condition beyond its normal progression (and yes, plenty of older workers do have pre-existing conditions), then the law says the additional/new aggravated situation is work related and should be taken care of as such. None of the scenarios you described sound remotely like fraud, but simply the real world. If you hurt your arm or shoulder or knee, wouldn’t you want it fixed as best as possible? It is a recognized medical fact that MRI’s do not reveal every and all pathologies. Many workers live with pain at work and home from work related injures, but get up every day and do the best and most they can. I have NEVER seen one worker with a permanent disability who would not gladly give back every penny they received and dig deeper into their own pocket for more if they could just turn back the clock and have their body back the way it was before their injury. Think about what it is like to limp a mile in their shoes; think that someday it might be you, and then consider if it is reasonable to look at this all from a little different perspective.