Article Published: Wisconsin and Minnesota Workers’ Compensation Claims Comparison

Tom Domer just published an article “A Comparison of Wisconsin and Minnesota Workers’ Compensation Claims” in the William Mitchell Law Review.

The article was prompted by calls from Minnesota colleagues asking whether Wisconsin or Minnesota jurisdiction would be appropriate for work injuries.  The article compared a hypothetical injury from Ole a 58 year old truck driver hired in Minnesota by a corporation registered in Minnesota and Wisconsin, who worked half time in Minnesota and half time in Wisconsin.  In route to Milwaukee for a delivery, he tripped in a pot hole at a sex shop in Wisconsin after stopping for lunch and drinking six beers.  He injured his neck, leaving a scar on his forehead, underwent neck fusion surgery with resulting permanent work restrictions.

The article compares Wisconsin and Minnesota on liability, the involvement of alcohol, whether the injury arose out of employment and was in the course of employment.  It further compared benefits in Wisconsin and Minnesota including Temporary Total Disability, permanency benefits, vocational rehabilitation, Loss of Earning Capacity, disfigurement, Permanent Total Disability, and whether there was a Social Security offset for workers’ compensation benefits.

While some benefits were better in Minnesota, overall the likelihood for recovery was better in Wisconsin.

Making Coffee: A Work Comp Claim?

Workers in the coffee industry face potentially harmful lung exposure.  The Milwaukee Journal Sentinel published a comprehensive article (“Gasping for Action” ) highlighting the negative health effects resulting from a chemical–diacetyl–released during the coffee roasting process.  The article discusses air sampling tests at coffee roasting facilities revealing chemical concentrations significantly above federal safety standards.

Some experts believe that exposure to diacetyl can result in hugely harmful and irreversible lung disease.  According to the article:

“Inhaling diacetyl has proved deadly. Diacetyl attacks and obliterates the lung’s tiniest airways, causing a disease known as bronchiolitis obliterans. As the body tries to heal, scar tissue builds up and blocks the airflow. The damage is irreversible.” 

If a worker experiences permanent lung damage from a workplace exposure, there is a potential for a worker’s compensation claim.  Under the Wisconsin worker’s compensation law, if an exposure was a material, contributory causative factor (as little as 5%) in the onset or progression of the health condition, the worker has a claim.  A medical physician must provide this causation support.  Based on the Journal Sentinel article, it appears the science can establish a causal link between diacetyl exposure and a permanent lung condition (though there may be a distinction between naturall-occurring vs. artificially synthesized diacetyl).  

Workers with occupational exposure claims are eligible for the same types of benefits as those with traumatic injuries.  That means an occupational exposure claimant can receive wage loss benefits (temporary total disability), permanent partial disability, and medical expense payment.  Significantly, if an occupational exposure permanently restricts a worker’s lung and pulmonary functions (resulting in the need for permanent limitations and an inability to return to the workplace), a loss of earning capacity claim exists.

If a coffee worker is experiencing lung or breathing difficulties, it is wise to consult with a physician immediately to discuss their medical needs and whether the workplace exposure is playing a harmful role.

 

Wisconsin Legislative Update: Major Changes to Administration’s Proposed Break-Up

Ever since the Administration’s initial proposed Budget Bill on February 3, 2015, the status of Wisconsin’s worker’s compensation system has been in doubt. With a recent compromise agreement, we now have a bit of clarity moving forward, yet many questions remain.

Initial Proposal

We previously discussed the proposed changes to the structural integrity of Wisconsin’s worker’s compensation system. Under current law and structure, the WC system is a unified “one-stop-shop” under the Department of Workforce Development (DWD). Administrative Law Judges work within WC Division in close connection with claims management and dispute resolution staff. Judges, who are trained experienced attorneys in WC, have the benefit of 100+ years of case law and Department policy to guide and direct claims administration. (e.gs, does overtime count as “wages” toward WC benefits?; the value for the loss of a finger?; when does an insurer have to submit a final medical report?) Significantly, independent national studies show Wisconsin’s current unified worker’s compensation structure is a major factor in the beneficial metrics of the system compared to the rest of the country: low/stable employer premiums, large number of insurers writing business and making profits, faster return to work rates for workers, low costs per claim, and very low litigation rates.

The Budget proposal was to break up the unified WC Division and split “administrative” functions to the Office of the Commissioner of Insurance (OCI) and “adjudicatory” functions to Division of Hearings & Appeals in Department of Administration (DOA). Administrative Law Judges would move to the DOA. Claims management, customer service, dispute resolution, and wage analyst functions (along with all administrative staff) would go to OCI.

“Drafting” Errors

The initial proposal from February also included a number of substantive changes to the Worker’s Compensation Act, including eliminating the use of court reporters and allowing private settlements. Those—and a huge amount of “drafting” errors—were corrected via the Administration’s Errata report of April 13, 2015. The drafting changes restored the usage of court reporters and the statutory language regarding approving oversight of compromise agreements. The Errata also explicitly acknowledge the impossibility in teasing apart functions of the current unified WC Division, and now proposed using some administrative law judges at both agencies, OCI and DOA. (“although adjudicating functions are being transferred to the Department of Administration’s Division of Hearings and Appeals and administration to the Office of the Commissioner of Insurance, there may be some responsibility for both types of claims at both agencies.”)

Joint Finance Committee: What Actually Happened?

There was a significant amount of lobbying by stakeholders in the system. The Milwaukee Journal Sentinel highlighted questions about the lack of reasoning behind the proposed changes.

In a surprise move on May 27th, the legislature’s powerful Joint Finance Committee agreed to a major change/compromise in the Administration’s proposal for the worker’s compensation system. The WC Division will not be going to OCI; rather, it will stay within DWD (along with a handful of judges). A certain amount of judges, however, will be moving to DOA. Specifically:

  • No transfer to OCI. The transfer of “administrative” functions/personnel from WC Division to OCI was deleted. Thus, entire administrative/wage analyst/dispute resolution staff will remain at WC Division within DWD. 6 worker’s comp ALJs and 2 legal support staff will remain at DWD. (Based on errata language, these ALJs likely to deal with “non-litigated” cases.)
  • ALJs are going to DOA (Div. of Hearings & Appeals). 18 Administrative Law Judges transferred to DOA to do “adjudicatory” functions and hear worker’s compensation cases. The Joint Finance motion specifies that these work comp ALJs must allocate “a minimum of 80%” of their time to worker’s compensation issues. (Thus, appears to allow for alleged cross-training of ALJs. It remains unclear how these positions/functions will be funded if portion of ALJ time is on non-work comp matters).

What’s next?

The Budget Bill, in amended form, now goes to the full legislature. As of June 15th, it still has not passed, and of course, there are many other significant issues in the budget for legislators and the Governor. We still do not have any specific statutory language after the Joint Finance compromise. It will be interesting to see the precise changes to the WC Act.

Overall, we are encouraged that the members of Joint Finance took stakeholder’s concerns into consideration including keeping the administrative functions at the DWD in its Worker’s Compensation Division.

Potential consequences. Assuming the Budget passes, what does these mean for the worker’s compensation system?:

  • Increased litigation? The efficiencies of WC system could be lost by splitting up WC Division. It is no exaggeration that such a change could easily result in delays in claim resolution, less effective oversight, greater confusion, and increased litigation. There are more agencies involved in the process. With degraded active claims management at two agencies, more employers and workers will seek counsel. (When the Legislative Fiscal Bureau analyzed the proposed changes after the Errata revisions: “Because the status of an individual claim can change with some regularity, especially with medical disputes, the transfer of the WC Division …could introduce complexity and confusion to the handling of individual claims …”)
  • Increased employer premiums? Increased litigation means increased claims costs, which is passed on to employers in the form of increased premiums.
  • Delays in medical bill processing? If there is degraded active claims management, medical providers may face greater difficulties and hurdles in the processing and satisfaction of medical treatment expenses.
  • Degraded quality of decision-making? If ALJs are cross-trained, decisions may be less accurate if made by individuals not fully experienced in WC. Further litigation and appeals could result.
  • Hearing procedures unknown. Apparently, DOA judges schedule their own hearings. Current DWD has comprehensive computer system for scheduling hearings throughout the state. The scheduling of hearings via DOA is unknown, with the potential for procedural delay if judges schedule own hearings.
  • Costs? IT costs are unknown. Costs to taxpayers or insurer assessments if IT costs in major reorganization? The Legislative Fiscal Bureau also noted this potential problem.
  • Death knell of the advisory council? The Worker’s Compensation Advisory Council (WCAC) advises the WC Department and legislature on policy matters concerning the development and administration of the worker’s compensation law. The WCAC aims to maintain overall stability of the worker’s compensation system for all stakeholders without regard to partisan changes in the legislative or executive branch of government. While the Budget proposal still allows for use of WCAC, this would be an end-run around the Council and a direct legislative change without Council input. The Council’s viability would be in question. Will WC system now be subject to partisan pendulum of legislature?

 

“Independent” Medical Examinations in Workers’ Compensation (Anything but “Independent”)

“I thought their doctor Independent Medical Report was the last word on my case. I didn’t know any better.” 

This statement from a client I just met sums up the experience of many injured workers unfamiliar with the workers’ compensation process in Wisconsin (and many other states).

An insurance company or self-insured employer may request an injured worker submit to reasonable examinations by a physician, chiropractor, psychologist, dentist, podiatrist, physicians assistant, or Advanced Practice Nurse Practitioner of its choice. Wis. Stat. §102.17(1)(b). This examination is usually referred to as an Independent Medical Examination or “IME” although “adverse medical examination” more accurately reflects the process.  An Independent Medical Examination may be requested by the insurance company or self-insured employer in order to determine whether the claim is compensable and the extent of the disability or the necessity and type of treatment. 

Since only about one in ten injured workers in Wisconsin is represented by an attorney, nine out of ten unrepresented workers are not aware that the insurance company’s “IME” is actually an adverse exam by a doctor hired by and paid by the insurance company to issue his report. Although IME examiners would deny they routinely render an opinion in favor of the insurance carrier, my forty years of experience suggests just that. For many years lawyers representing injured workers have been proposing the terminology “Adverse Medical Examination” apply to give represented and unrepresented workers a more fair assessment of the process. Many IMEs make hundreds of thousands of dollars annually performing these examinations. At one of these examinations, my client overheard the IME physician (who had rented a motel room) speaking to a prospective young doctor trying to convince that doctor to perform IMEs. “This is a great practice.” He said.  “All you have to do is review the medical records, meet with the worker for a few minutes, and deny the claim. And for that you can charge $1,500.” Although my client’s testimony to this effect was barred, the underlying accuracy of his testimony is undisputable.

Beware the “Independent” Medical Examination.

Wage Disparity and Workers’ Compensation

When I began representing injured workers at a labor law firm in the 1970s, over one-third of the workforce was unionized. Almost all the workers I represented earned the maximum amount allowable to trigger the maximum workers’ compensation benefit in the event they missed work due to a work injury. Today with Union membership in the United States down to 6.6% of the workforce (about the same rate as at the turn of the 20th Century, few of the workers I represent are “maximum” earners, triggering maximum benefits under workers’ compensation. In fact, many of the workers I represent earn less than $10 per hour, which means their family income falls beneath the national poverty line.

Statistics about economic inequality are staggering. The richest 1% of the nation controls 40% of the wealth and earns 20% of the national income – proportions very similar to those in the early 20th Century (and up from about 25% and 9% in the 1970s when I started representing injured workers). Two recent books attempt to explain what, if anything, can be done to revive unionism. Historian Steve Frazer’s Age of Acquiescence looks at the long sweep of work in the United States. Frazer thinks the labor question is the key to confronting the economic gap and all its political and cultural consequences.  

The second book is by a lawyer who represented workers in Chicago, Thomas Geoghegan. Only One Thing Can Save Us suggests we have to return to the early labor union courage to challenge the inequities that surround workers – a spirit that is now largely evaporated. We have abandoned many of the crucial goals of the Progressive years – the rights to minimum wage, a limit on hours, unemployment insurance, and other benefits such as health insurance, pensions, paid vacations – that were won only through collective bargaining. 

The decline in unionism has hurt all American workers. About one in ten American workers is now self-employed (the most rapidly growing group in this category are maids and housekeepers, carpenters, landscapers, and hairdressers). Part time workers make up 17% of the labor force.  Additionally, workers hired as Independent Contractors (like many at FedEx, for example) are not eligible for unemployment compensation, do not have the right to organize a union, are not guaranteed overtime pay or the minimum wage, and lack access to the employment protections afforded by the Civil Rights Act. Moreover, the employers do not have to contribute to Social Security. We see this abuse often by employers characterizing workers as Independent Contractors who should be employees for whom the workers’ compensation, unemployment compensation premiums and payroll taxes is paid.

Times have changed and certainly not for the better.

Legislative Changes To Workers’ Compensation – Wisconsin and National

As we in Wisconsin wrestle with Governor Walker’s ill-advised proposal to split up an efficient and time-honored workers’ compensation system (for alleged purposes of “efficiency”), it is instructive to reflect on the legislative proposals during the first quarter of 2015 across the nation in workers’ compensation. 

A National Council on Compensation Insurance, Inc. (NCCI) annual issue symposium in Florida reported that over 600 workers’ compensation bills were filed in the first quarter of 2015. Over 10% of these (65) deal with presumptive coverage for First Responders, giving First Responders the presumption of workers’ compensation coverage for their injuries and occupational exposures. (This is a topic that has come up a lot since the September 11 attacks, bolstered by other tragic news such as the 2012 Sandy Hook Elementary School shooting).

The next most popular type of bills filed during the first quarter of 2015 included bills revising the definition of an employee (37 bills), occupational diseases (36 bills), reimbursement and fee schedules (33 bills) and indemnity benefits (32 bills).

The definition of employee versus Independent Contractor or subcontractor has been a popular issue regarding lawsuits such as Uber Technologies and Lyft, Inc. and the self-storage and moving marketplace eMove, Inc. Interestingly, on the issue of benefits (and attorney fees that apply to those benefits) “If you increase attorney fees you are likely to increase attorney involvement,” aid Lori Lovgren NCCI Division Executive of State Relations . However, she also noted: but “injured workers are going to need assistance. If the compensation to attorneys is not enough for attorneys to assist, then there is going to be an access problem.” Her reference was to the Florida Supreme Court case Ciastellanos v. Next Door Company, which explores whether attorney fee caps were constitutional.

 

Illinois Facing Proposed Rollback Of Workers’ Compensation Law

Wisconsin is not alone. While Wisconsin is facing a proposed dismantling of the basic structure of its incredibly efficient worker’s compensation program, based on the Governor’s Budget proposal, the workers in Illinois are also facing major legislative problems. As part of a series of articles in ProPublica and NPR, which discuss the overall dwindling of worker’s compensation benefits, a recent story discusses the worker’s compensation deforms currently proposed in Illinois.

One of the foremost experts on worker’s compensation, Professor John Burton, testified at an Illinois legislative hearing on the issue. Of note is that Burton’s national research generally shows that whenever and wherever the worker’s compensation eligibility standards are tightened the Social Security Disability and Medicare/Medicaid rolls go up in virtual direct proportion. Legislatures should be wary off unintended consequences on the taxpayers of alleged worker’s compensation “reforms.”

Poverty And Social Insurance

My business-owning friends harp constantly about “entitlements,” which, they say, cost them money in taxes and premiums. I routinely reply that these programs are a social safety net, the small price we pay to live together relatively peacefully  in a “civilized” nation.

My friend and Iowa workers’ comp colleague Paul Mc Andrew sent me an email that sums up this concept succinctly:

Did you know that in 2013, there were more than 25 million reasons to give thanks for social insurance? According to Census Bureau data released this fall, more than 45 million people in the U.S., or 14.5% of the nation, lived in poverty in 2013. The good news? Three vitally important social insurance programs – Social Security, unemployment insurance (UI), and workers’ compensation – and a related program, Supplemental Security Income (SSI), kept the poverty rate from being much higher. Together, these four programs kept more than 25 million people out of poverty.

Workers’ Compensation alone lifted 87,000 people out of poverty in 2013, including:

  • 16,000 children; and
  • 60,000 non-elderly adults; and
  • 11,000 elderly adults aged 65+

−−Elisa Walker, National Academy of Social Insurance

We workers’ comp lawyers can only help one injured workers at a time, but collectively…..