LRB-3729/2
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2013 - 2014 LEGISLATURE
January 31, 2014 - Introduced by Representative Knodl, cosponsored by Senator
Grothman. Referred to Committee on Labor.
AB711,2,4
1An Act to renumber and amend 102.07 (12m), 102.125, 102.18 (1) (b), 102.23
2(1) (a), 102.28 (2) (c), 102.28 (7) (b), 102.44 (1) (c) and 102.44 (4);
to amend
320.445 (1) (ra), 101.654 (2) (b), 102.01 (2) (d), 102.03 (4), 102.04 (1) (a), 102.04
4(2m), 102.07 (1) (a), 102.07 (1) (b), 102.07 (3), 102.07 (7) (a), 102.07 (10), 102.077
5(1), 102.077 (2), 102.11 (1) (intro.), 102.125 (title), 102.13 (2) (b), 102.13 (2) (c),
6102.16 (1m) (a), 102.16 (2) (d), 102.17 (1) (a) 3., 102.17 (4), 102.18 (1) (bg) 1.,
7102.18 (3), 102.18 (4) (b), 102.21, 102.23 (1) (c), 102.23 (1) (cm), 102.28 (2) (a),
8102.28 (2) (b) (title), 102.28 (2) (c) (title), 102.28 (2) (d), 102.28 (7) (a), 102.29 (1)
9(b) 2., 102.29 (8), 102.31 (2) (b) 2., 102.315 (2), 102.425 (3) (b), 102.425 (4) (a),
10102.425 (4) (b), 102.425 (4m) (b), 102.43 (5) (c), 102.44 (1) (ag), 102.44 (1) (ag),
11102.44 (1) (am), 102.44 (1) (b), 102.44 (3), 102.65 (4) (intro.), 102.75 (1), 102.75
12(1m), 102.75 (2), 102.75 (4), 102.81 (1) (a), 108.10 (4) and 165.60; and
to create
13102.07 (12m) (a), 102.125 (2), 102.16 (2) (i), 102.28 (2) (bm), 102.28 (2) (c) 2.,
14102.28 (7) (bm), 102.423, 102.425 (3) (am), 102.44 (1) (c) 2., 102.44 (1) (c) 3.,
1102.44 (1m), 102.44 (4) (b), 102.44 (4m), 102.445, 102.75 (1g), 102.80 (1) (f) and
2102.81 (1) (c) of the statutes;
relating to: various changes to the worker's
3compensation law, granting rule-making authority, and making an
4appropriation.
Analysis by the Legislative Reference Bureau
This bill makes various changes to the worker's compensation law, as
administered by the Department of Workforce Development (DWD).
General coverage
Local governmental units
Under current law, each county, city, town, village, school district, sewer
district, drainage district, long-term care district, and other public or quasi-public
corporation (municipality) is liable for worker's compensation when an employee in
the service of the municipality, whether elected, appointed, or under a contract of
hire, is injured while performing services growing out of and incidental to his or her
employment.
This bill changes the term "municipality" to "local governmental unit" for
purposes of the worker's compensation law and redefines that term to mean a
political subdivision of this state; a special purpose district or taxing jurisdiction in
this state; an instrumentality, corporation, combination, or subunit of any of the
foregoing; or any other public or quasi-public corporation. Under current law, cities,
villages, towns, and counties are political subdivisions of this state; special purpose
districts include school districts, sewer districts, drainage districts, long-term care
districts, and other districts created for special purposes; and taxing jurisdictions are
entities, not including the state, that are authorized by law to levy property taxes.
Postsecondary students participating in work study programs
Currently, a student of a public school or a private school, while he or she is
engaged in performing services as part of a school work training, work experience,
or work study program, who is not on the payroll of an employer that is providing the
work training or work experience or who is not otherwise receiving compensation on
which a worker's compensation carrier could assess premiums on that employer, is
an employee of a school district or private school that elects to name the student as
an employee for purposes of worker's compensation coverage. Also, under current
law, a student who is named as an employee of a school district or private school for
purposes of worker's compensation coverage and who makes a claim for worker's
compensation against his or her school district or private school may not also make
a claim for worker's compensation or maintain an action in tort against the employer
that provided the work training or work experience from which the claim arose.
This bill extends those provisions to a student of an institution within the
University of Wisconsin System, a technical college, a tribally controlled college
controlled by an Indian tribe that has elected to become subject to the worker's
compensation law, a school approved by the Educational Approval Board, or a
private, nonprofit institution of higher education located in this state (institution of
higher education). Specifically, under the bill, a student of an institution of higher
education, while he or she is engaged in performing services as part of a school work
training, work experience, or work study program, who is not on the payroll of an
employer that is providing the work training or work experience or who is not
otherwise receiving compensation on which a worker's compensation carrier could
assess premiums on that employer, is an employee of an institution of higher
education that elects to name the student as an employee for purposes of worker's
compensation coverage. The bill also provides that a student who is named as an
employee of an institution of higher education for purposes of worker's compensation
coverage and who makes a claim for worker's compensation against that institution
may not also make a claim for worker's compensation or maintain an action in tort
against the employer that provided the work training or work experience from which
the claim arose.
Payment of benefits
Maximum weekly compensation for permanent partial disability
Under current law, permanent partial disability benefits are subject to
maximum weekly compensation rates specified by statute. Currently, the maximum
weekly compensation rate for permanent partial disability is $322. This bill
increases that maximum weekly compensation rate to $337 for injuries occurring
before January 1, 2015, and to $352 for injuries occurring on or after that date.
Supplemental benefits
Under current law, an injured employee who is receiving the maximum weekly
benefit in effect at the time of the injury for permanent total disability or continuous
temporary total disability resulting from an injury that occurred before January 1,
2001, is entitled to receive supplemental benefits in an amount that, when added to
the employee's regular benefits, equals $582. Those supplemental benefits are
payable in the first instance by the employer or insurer, but the employer or insurer
then is entitled to reimbursement for those supplemental benefits paid from the
work injury supplemental benefit (WISB) fund, which is a fund that, among other
things, is used to pay supplemental worker's compensation to injured employees
with permanent total disability.
This bill makes an employee who is injured prior to January 1, 2003, eligible
for those supplemental benefits beginning on the effective date of the bill and
increases the maximum supplemental benefit amount for a week of disability
occurring after the effective date of the bill to an amount that, when added to the
employee's regular benefits, equals $669.
The bill also terminates reimbursement from the WISB fund for supplemental
benefits paid by employers or insurers beginning on the effective date of the bill. For
supplemental benefits paid by an insurer for an injury that occurs before July 1,
2015, the bill provides that reimbursement of those benefits is from the worker's
compensation operations fund and not from the WISB fund. To fund that
reimbursement, the bill requires DWD to collect from each licensed worker's
compensation carrier the proportion of reimbursement approved by DWD for
supplemental benefits paid in the year before the previous year that the total
indemnity paid or payable by the carrier in worker's compensation cases initially
closed during the preceding calendar year bore to the total indemnity paid in cases
closed the previous calendar year by all carriers.
Traumatic injuries
Under current law, an application for worker's compensation that is not filed
within 12 years from the date of the injury or from the date that worker's
compensation, other than for treatment or burial expenses, was last paid, whichever
is later, is barred by the statute of limitations, except that in certain cases of
traumatic injury there is no statute of limitations. In cases in which there is no
statute of limitations, benefits or treatment expenses for traumatic injury becoming
due 12 years after the date of injury or the date that compensation was last paid,
whichever is later, are paid by DWD from the WISB fund if that date is before April
1, 2006.
This bill provides that an application for worker's compensation for a traumatic
injury that is not filed within nine years from the date of injury or the date that
worker's compensation, other than for treatment or burial expenses, was last paid,
whichever is later, is barred by the statute of limitations. The bill also provides that
for traumatic injuries for which there is no statute of limitations benefits or
treatment expenses for traumatic injury becoming due nine years after the date of
injury or the date that compensation was last paid, whichever is later, are paid by
DWD from the WISB fund, if that date is before April 1, 2006.
Indexing of benefits
Under current law, subject to certain exceptions, the amount of an injured
employee's worker's compensation benefits is determined in accordance with the law
that is in effect as of the date of injury, regardless of the length of time that has
elapsed since that date.
This bill provides for the indexing of the weekly benefit for permanent total
disability or continuous temporary total disability resulting from an injury that
occurs on or after July 1, 2015. Specifically, under the bill, an injured employee who
is receiving worker's compensation for permanent total disability or continuous
temporary total disability more than 24 months after the date of injury resulting
from an injury that occurs on or after July 1, 2015, is entitled to receive the maximum
rate that is in effect at the time the benefit accrues and becomes payable for periods
of disability occurring more than six years after the date of injury.
The bill similarly provides for the indexing of the weekly benefit for permanent
partial disability. Specifically, under the bill, an injured employee who is receiving
worker's compensation for permanent partial disability is entitled to receive the
maximum rate that is in effect at the time the benefit accrues and becomes payable
for periods of permanent partial disability beginning with the 201st week of
permanent partial disability.
Vocational rehabilitation
Under current law, an injured employee is entitled to receive compensation for
temporary disability while the employee is receiving vocational rehabilitation
services under the federal Rehabilitation Act of 1973. If, however, the injury causes
only partial disability, the employee's weekly indemnity is the proportion of the
weekly indemnity rate for total disability that the actual wage loss of the injured
employee bears to the injured employee's average weekly wage at the time of injury,
except that compensation for temporary disability on account of receiving vocational
rehabilitation services shall not be reduced on account of any wages earned for the
first 24 hours worked by an employee during a week in which the employee is
receiving those services and only hours worked in excess of 24 during that week shall
be offset against the employee's average weekly wage in calculating compensation
for temporary disability. That exception, however, does not apply after April 30,
2014. This bill extends that exception to April 30, 2016.
Continuation of health care coverage
Currently, the family and medical leave law requires an employer to maintain
group health insurance coverage during a period an employee takes family or
medical leave under the conditions that applied immediately before the family or
medical leave began. If the employee continues making any contribution required
for participation in the group health insurance plan, the employer must continue
making group health insurance premium contributions as if the employee has not
taken the family or medical leave.
This bill similarly requires an employer that at the time of an injured
employee's injury is providing the injured employee with group health care coverage
to maintain that coverage during the injured employee's period of temporary
disability at the level and under the conditions that the employer would have
provided coverage if the injured employee had continued in employment
continuously during that period of temporary disability, without regard to the
injured employee's employment status during that period. Under the bill, if during
an injured employee's period of temporary disability the injured employee continues
making any contributions required of the injured employee for participation in the
plan providing the employee's group health care coverage, the employer must
continue making any contributions required of the employer for the injured
employee's participation in that plan as if the injured employee were not in a period
of temporary disability.
The bill provides that any employer that fails to maintain group health care
coverage for an injured employee or the employer's worker's compensation insurer
is liable to the injured employee for an amount that is equal to 100 percent of the
contributions required of the employer that the employer failed to pay, in addition
to any temporary disability benefits payable under the worker's compensation law.
That liability also applies to an employer that fails to maintain group health care
coverage provided at the time of injury for an injured employee or to the employer's
worker's compensation insurer in a case in which the employer's liability for worker's
compensation for the employee's injury or the period of the employee's temporary
disability is in dispute, if the injured employee submits the dispute to DWD and the
injury or period of disability is found to be compensable under the worker's
compensation law. Under the bill, if an employer fails to maintain group health care
coverage for an injured employee as required under the bill, the injured employee
may request DWD to conduct a hearing on the violation. If, after hearing, the
hearing examiner finds that the employer has failed to maintain group health care
coverage as required under the bill, the hearing examiner may order the employer
to pay the injured employee the contributions for group health care coverage that the
employer failed to pay.
Prescription drug treatment
Under current law, an employer or insurer is liable for providing medicines as
may be reasonably required to cure and relieve an injured employee from the effects
of an injury sustained while performing services growing out of and incidental to
employment. Current law, however, limits the liability of an employer or insurer for
the cost of a prescription drug dispensed for outpatient use by an injured employee
to the average wholesale price of the prescription drug as quoted in the Drug Topics
Red Book (average wholesale price).
This bill provides that if a prescription drug dispensed for outpatient use by an
injured employee is a repackaged prescription drug, the liability of the employer or
insurer for the cost of the repackaged prescription drug is limited to the average
wholesale price of the prescription drug set by the original manufacturer of the
prescription drug, except that if the National Drug Code number of the prescription
drug as packaged by the original manufacturer cannot be determined from the
billing statement submitted to the employer or insurer, that liability is limited to the
average wholesale price of the lowest-priced drug product equivalent. That
limitation of liability, however, does not apply to a repackaged prescription drug
dispensed from a retail, mail-order, or institutional pharmacy.
Hearings and procedures
Health care records in electronic format
Under current law, a physician, chiropractor, psychologist, podiatrist, dentist,
physician assistant, advance practice nurse prescriber, hospital, or health service
provider, upon request by an injured employee, employer, insurer, or DWD, must
provide that person with any written material that is reasonably related to an injury
for which the employee claims worker's compensation, upon payment of the actual
cost of providing those materials, not to exceed the greater of 45 cents per page or
$7.50 per request, plus the actual costs of postage.
This bill permits that material to be provided in electronic format upon
payment of $26 per request.
Final practitioner's report
Under current law, if an injured employee has a period of temporary disability
of more than three weeks or a permanent disability, has undergone surgery to treat
an injury, other than surgery to correct a hernia, or sustains an eye injury requiring
medical treatment on three or more occasions off the employer's premises, the
employer or insurer must submit to DWD a final treating practitioner's report.
Current law, however, prohibits DWD from requiring submission of that report when
the employer or insurer denies the employee's claim for compensation and the
employee does not contest that denial. This bill limits that prohibition to cases in
which the employer or insurer denies the employee's claim for compensation in its
entirety.
Prospective vocational rehabilitation training orders
Under current law, any party in interest may submit to DWD any controversy
concerning worker's compensation and DWD, after hearing, must issue an order
determining the rights of the parties regarding the controversy. Current law also
permits DWD to issue interlocutory, i.e., nonfinal, findings, orders, and awards,
which may be enforced in the same manner as final awards. Current law specifically
permits DWD to include in an interlocutory or final award or order an order directing
the employer or insurer to pay for any future treatment that may be necessary to cure
and relieve an injured employee from the effects of the employee's injury.
This bill permits DWD to include in an interlocutory or final award or order an
order directing the employer or insurer to pay for a future course of instruction or
other rehabilitation training services provided under a rehabilitation training
program.
Administrative review of a worker's compensation decision
Under current law, a party to a worker's compensation proceeding may petition
the Labor and Industry Review Commission (LIRC) for review of a DWD hearing
examiner's decision awarding or denying worker's compensation (petition for
review) if DWD or LIRC receives the petition for review within 21 days after DWD
mailed a copy of the examiner's findings and order to the petitioner's last-known
address. Currently, LIRC must dismiss a petition for review that is not timely filed
unless the petitioner shows probable good cause that the reason for failure to timely
file the petition was beyond the petitioner's control. This bill requires a party to file
a petition for review with LIRC, not DWD. The bill also requires LIRC to dismiss a
petition for review that is not filed within those 21 days unless the petitioner shows
that the petition was filed late for a reason that was beyond the petitioner's control.
Under current law, within 28 days after a decision of LIRC is mailed to the
last-known address of each party to a worker's compensation proceeding, LIRC may,
on its own motion, set aside the decision for further consideration. This bill permits
LIRC to set aside a decision within 28 days after the date of the decision, not the date
of its mailing.
Judicial review of a worker's compensation decision
Under current law, a party that is aggrieved by an order or award made by LIRC
may commence an action against LIRC in circuit court for judicial review of the order
or award (action for judicial review). Current law requires the adverse party to also
be made a defendant in an action for judicial review. Recently, a concurring opinion
in Xcel Energy Services, Inc. v. LIRC, 2013 WI 64, "unequivocally and firmly"
recommended that the Council on Worker's Compensation propose legislative
revisions to clarify who must be included as a party in an action for judicial review.
Id. at p. 71. That concurring opinion further proposed that LIRC consider adopting
the practice of providing information with its order or award instructing the parties
as to who is to be named as an adverse party in an action for judicial review. Id. at
p. 73.
This bill requires LIRC to identify in an order or award the persons that must
be made parties to an action for judicial review. The bill also requires the summons
and complaint in the action to name those persons as defendants. In addition, the
bill permits the circuit court to join as a party to the action any other person
determined necessary for the proper resolution of the action, unless joinder of the
person would unduly delay the resolution of the action.
Program administration
Health service fee disputes
Under current law, if a health service provider, injured employee, insurer, or
employer submits to DWD a dispute over the reasonableness of a health service fee
charged by the health service provider for services provided to the injured employee,
DWD must determine the reasonableness of the disputed fee by comparing the
disputed fee to the mean fee for the procedure for which the disputed fee was charged,
as shown by data from a database certified by DWD. If the disputed fee is at or below
the mean fee, plus 1.2 standard deviations from that mean, DWD must determine
that the disputed fee is reasonable and order the fee to be paid. If the disputed fee
is above the mean fee, plus 1.2 standard deviations from that mean, DWD must
determine that the disputed fee is unreasonable and order that a reasonable fee be
paid, unless the health service provider proves that a higher fee is justified. This bill
lowers the standard deviations used to determine the reasonableness of a disputed
health service fee to 0.7 standard deviations from the mean.
Health service fee schedule
This bill requires DWD to establish a schedule of the maximum fees that a
health care provider may charge an employer or insurer for health services provided
to an injured employee who claims worker's compensation benefits. Under the bill,
DWD must, when that schedule is established, notify the Legislative Reference
Bureau (LRB), and the LRB must publish that notice in the Wisconsin
Administrative Register. On publication of that notice, the health service fee dispute
resolution process under current law no longer applies and instead the liability of an
employer or insurer for a health service included in the fee schedule is limited to the
maximum fee allowed under the schedule for that health service as of the date on
which the health service was provided, any fee agreed to by the contract between the
employer or insurer and health care provider for the health service as of that date,
or the health care provider's actual fee for the health service as of that date,
whichever is less.
The bill requires DWD, in determining those maximum fees, to divide the state
into five regions based on geographical and economical similarity, including
similarity in the cost of health services, and, for each region, to: 1) determine the
average payment made by insured and self-insured group health plans, and the
average copayment, coinsurance, and deductible payment made by persons covered
under those plans, for each health service included in the schedule; and 2) set the
maximum fee for each health service included in the schedule at 110 percent of the
sum of that average payment and that average copayment, coinsurance, and
deductible payment.
The bill also requires DWD to adjust those maximum fees annually by the
change in the consumer price index for medical care services and, no less often than
every two years, to redetermine the average payment made by group health plans
for the services included in the schedule and revise those maximum fees based on
that redetermined average.
Investigation and prosecution of fraudulent activity
Under current law, if an insurer or self-insured employer has evidence that a
worker's compensation claim is false or fraudulent and if the insurer or self-insurer
is satisfied that reporting the claim will not impede its ability to defend the claim,
the insurer or self-insured employer must report the claim to DWD. DWD may then
require the insurer or self-insured employer to investigate the claim and report the
results of the investigation to DWD. If, based on the investigation, DWD has a
reasonable basis to believe that criminal insurance fraud has occurred, DWD must
refer the matter to the district attorney for prosecution.
This bill permits DWD to request the Department of Justice (DOJ) to assist
DWD in an investigation of a false or fraudulent worker's compensation claim of any
other suspected fraudulent activity on the part of an employer, employee, insurer,
health care provider, or other person related to worker's compensation. If, based on
the investigation, DWD has a reasonable basis to believe that theft, forgery, fraud,
or any other criminal violation has occurred, DWD must refer the matter to the
district attorney or DOJ for prosecution.