Category Archives: Legislation

URGENT: Let’s Keep Wisconsin’s Worker’s Compensation System the Best in the Nation!

Wisconsin’s worker’s compensation system—established in 1911 and part of the “Wisconsin Idea” in politics—has been in place longer than any other in the country and is the envy of other states. The Governor’s Budget Bill (2015 SB 21) proposes major changes to the structure and substance of Wisconsin’s nationally-recognized worker’s compensation system. The proposal would remove the Worker’s Compensation Division from the Department of Workforce Development and then split up previously integrated components, with the adjudicatory functions (administrative law Judges) moving to the Office of Hearings and Appeals (in DOA) and the regulatory, customer service, and claims management functions going to the Office of the Commissioner of Insurance.  Among other significant changes, Judges would be reduced to solely adjudicatory functions, no longer assisting with the law’s administration, and then cross-trained for other legal areas.  The proposals also eliminate the requirement that compromise agreements be approved by ALJs.  The proposed changes could have a hugely negative impact on Wisconsin:

1) Destabilizing effect on insurance carriers, employers, and taxpayers:

Worker’s compensation insurance is a major industry and employer in our state. Total premiums collected for worker’s compensation insurance were approximately 1.75 billion dollars in 2013.  The system as a whole works well for all stakeholders.  Workers generally receive timely benefits with excellent return to work rates.  The system cost to employers is low, as employer premiums have been very stable (rising less than 2.35% on average in the past six years; less than inflation).  Worker’s compensation insurance companies like to do business in our state because of the system’s stability and the corresponding ability to earn profits.  Indeed, at the end of 2014, almost 300 insurance companies writing and competing for worker’s compensation insurance business here.

The worker’s compensation advisory council assists with the system’s stability.  The council is comprised of representatives of labor, management, and the insurance industry, as well as medical provider liaisons.  The council’s agreed-upon changes to the worker’s compensation law, which historically were approved by the legislature, allowed for continual effectiveness and efficiency. 

 The current budget proposal had no input from the advisory council or stakeholders. If the bill passes, the advisory council process is likely over.  Without the council’s steadying process, Wisconsin could face substantial swings in its worker’s compensation law.  Fluctuations in the law will have an immediate impact on the bottom line for insurers, employers, and medical providers. Insurance companies could avoid our state. Employers could face large swings and spikes in premium rate.  Medical providers could see negative impacts on reimbursement rates.

 2) Governmental overreach on a system supported by private business: 

The current Worker’s Compensation Division (at DWD) is not funded by taxpayers; virtually the entire system is funded by assessments from worker’s compensation insurers and self-insured employers.  Thus, private businesses fund the Division, including payment for judges, staff, IT costs, rent, etc.  Along with its payments and the advisory council process, the insurance industry has helped shape the law into its current efficient form.

The Budget Bill suggests that the government has a better handle on the system than those private industries that craft and support it.  The bill proposes no changes in the funding of the system—thus, the worker’s compensation insurance industry will be paying for a soon-to-be inefficient and greater litigious system.  Presumably, the worker’s compensation insurance industry wants to fund staff and judges that have expertise in worker’s compensation—not those “cross-trained” in other areas.  The industry should favor a coherent, integrated system for administering their claims.

Additionally, with a current system that uses virtually 0% taxpayer dollars, the Budget Bill proposal creates an increase in taxpayer costs.  The cost of a “simple” physical move of personnel has to come from somewhere.  There is a huge IT cost—likely in the millions—based on the current system and software of the worker’s compensation division.

3) Less efficiency = Increased claim costs = Increased premiums:

Based on independent studies, Wisconsin workers are paid more quickly and return to work sooner than virtually any other state.  Wisconsin is in the top 10 for lowest cost per worker’s compensation claim.  Wisconsin also has one of the lowest amounts of litigated injuries in the country—with almost 85% of cases resolved without dispute or attorney involvement.  The studies indicate that credit for these positive outcomes is from the efficient administrative process and personnel at the current Division, who actively monitor claims and promote timely reporting and administrative resolution of disputes and concerns. For example, a Judge currently can hold an informal telephone conversation between an injured worker and an insurance company adjuster to resolve a dispute about the appropriate legal payment.

The current proposal is to split up this efficient administrative structure without any rational basis.  The Judges would be spun off into an entirely new agency and separated from the other division personnel.  Private settlements could occur without the valuable Judge oversight and protection.  The efficiency of the administrative system is lost by splitting up the division, and increased litigation is a guarantee.  (As an example, if I want to buy a hot dog, it seems blatantly inefficient to require purchase of hot dog in one place and then the bun in another). 

Without division assistance or oversight, workers will seek counsel.  Litigation will occur over previously-resolvable issues.  Attorneys will litigate the validity of the private settlements.  Increased litigation means increased claims costs, which means increased premiums for employers.  The volume of increased litigation also could force the need for more employees at the new agencies.

 We should maintain our place at the pinnacle of worker’s compensation systems and not look to poor analogies suggested from other states like Florida (comp law declared unconstitutional) or Texas (an opt out system, bringing in the possibility of civil litigation).  The administration’s citation to Illinois’ structure is misplaced as Illinois arbitrators/judges are directly part of the state’s worker’s compensation state agency.

4)  Negative impact on medical providers:

Medical cost payment is currently 2/3 of all payouts in worker’s compensation claims (in 2012, medical providers received almost $600 million total, while worker payments were about $275 million). Under current law, Judges review and approve all compromises, which serves to protect the interests of workers, medical providers, and group health carriers.  The Judges make sure the bills are satisfied.  Logic dictates that private settlements mean more claims will be closed—cost-shifting to medical providers.  Insurers will attempt to settle claims early and for smaller sums of money (like in civil litigation).  More closed claims means that medical bills and treatment that would have been covered within the 12 year statute of limitations by a worker’s compensation insurance company will now be shifted to the worker’s health insurance or none at all.  Thus, medical providers will be accepting lower Medicaid/Medicare reimbursement rates for charges that should have been under worker’s compensation.

 5) Cost-shifting of worker’s compensation system to taxpayers, via Medicaid/Medicare. 

Just as the above, with the allowance for private settlements, we will see an exponential increase in claims being closed sooner than in the past.   A closed claim immediately shifts the costs for future medical care to the worker’s own health insurance, including Medicaid and Medicare.  There is no denying an increase in taxpayer-funded health care costs if the current proposal moves forward.

ACTION IS REQUIRED.  Why “fix” a nationally-recognized system that is not broken?  If you favor the continuation of Wisconsin’s worker’s compensation system, contact your Wisconsin legislators now.

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 (“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.




Message to Wisconsin Legislators: Hands Off the Advisory Council

For the last 40 years, the Wisconsin Worker’s Compensation Advisory Council advises the Worker’s Compensation Department and the Legislature on policy matters concerning the development and administration of the worker’s compensation law.  Overall, the Council has been an unequivocal success.  Unlike the volatility found in other states, the Wisconsin Council maintains the overall stability of the worker’s compensation system without regard to partisan changes in the legislative or executive branches of government.  The Council provides a vehicle for labor and management representatives to play a direct role in recommending changes in the worker’s compensation law to the legislature.  This year Republican legislators have already muddled up the Unemployment Compensation Advisory Council, making recommendations that have rolled back unemployment compensation standards which have been in place for decades. 

Recent news indicated that Republican legislators are questioning the use of the Council in the worker’s compensation system.  These Republican politicans, including Dan Knodl, the Chair of the Legislature’s Labor Committee, have indicated they plan to send recommendations to the Council on possible cost saving changes.  Those “cost savings” were part of the budget process in which the legislature made changes to the Unemployment Compensation program, reducing benefits to employees without the support of the Labor and Management Advisory Council. 


The Worker’s Compensation Advisory Council, composed of five management, five labor, and three non-voting insurance members appointment by the Secretary of the Department of Workforce Development and chaired by a Department employee, meets regularly at different sites around Wisconsin.  The public is welcome at these meetings to offer their concerns.  The Council obtains input from various worker’s compensation constituents including interested members of the legal, medical, labor, management, insurance, and employer communities.  Hearings on proposed changes are held followed by Advisory Council deliberation.  With input from all of these sources, the Council attempts to produce a well-balanced bill.    

As a general rule, business and insurance interests thrive on stability and known costs.  The Council’s work provides this certainty for the players in the worker’s compensation system.  In the interests of appearing “business friendly”, a Republican end run outside of the Council may actually produce the exact opposite effect—uncertain and fluctuating premiums, costs, and legal issues.The Council has always produced an “agreed upon bill” which results in annual changes in benefit rates and substantive law.  The bill proceeds to the Labor Committees and the Wisconsin Assembly and Senate where, after passage, the Governor signs the bill into law.  This process has worked and created stability in Wisconsin for many decades, a system that other states can only envy.  The successful Advisory Council process should not be altered by outside influence from the legislature. 

Making A Difference In Washington – The Medicare Secondary Payer and Workers' Compensation Settlement Agreement Act

Today’s post comes from guest author Catherine Stanton from Pasternack Tilker Ziegler Walsh Stanton & Romano.

In addition to helping our clients receive the benefits they are entitled to through the courts and other adversarial means, we are prooud to work with our elected officials to produce legislation that will benefit working people. A few days ago, a bill we support, the Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act, was formally proposed. We encourage you to call and email your representatives and let them know that you support this law.

The press release with additional background follows:


Reps. Reichert and Thompson Introduce Bipartisan Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act

Washington, D.C. – Today, U.S. Reps. Dave Reichert (R-WA) and Mike Thompson (D-CA) introduced the Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act, H.R. 1982 into the House of Representatives.

The legislation aims to protect injured workers whose workers’ compensation claims overlap with Medicare coverage. Far too often, these claims are subjected to lengthy and cumbersome reviews by the Centers for Medicare and Medicaid Services (CMS) to determine appropriate set-aside amounts to pay for future medical costs in which Medicare may have an interest. The delays associated with this review place unfair burdens upon the injured party.

“This is a common-sense measure to ensure that hard-working Americans are not left in limbo because of inefficient bureaucratic procedures,” said Rep. Reichert. “Injured workers must have the confidence that their heath care claims will be processed in a fair and timely manner. By introducing this bill, Rep. Thompson and I aim to do just that: protect our hard-working citizens by making sure our systems serve them and their families.”

“The last thing injured workers should have to worry about is if needless bureaucracy is going to prevent their medical bills from being paid,” said Thompson. “This bill will make sure hard working families’ medical claims are processed efficiently and quickly, it will reduce bureaucratic headaches for businesses, and it will save taxpayers money. I will continue working with Congressman Reichert to get this bipartisan bill signed into law.”


The Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act establishes clear and consistent standards for an administrative process that provides reasonable protections for injured workers and Medicare. It would benefit injured workers, employers and insurers by creating a system of certainty, and allows the settlement process to move forward while eliminating millions of dollars in administrative costs that harm workers, employers and insurers.

The legislation has widespread support from groups such as the American Insurance Association, the American Bar Association, the National Council of Self-Insurers, Property Casualty, Insurers Association of America, UWC-Strategic Services and the Workers Injury Law and Advocacy Group (WILG).

Let OSHA Do Its Job

OSHA is being prevented from fulfilling its mission.

Today’s post comes from guest author Paul J. McAndrew, Jr. from Paul McAndrew Law Firm.

In 1970, Congress passed the Occupational Safety & Health Act (the Act), which created the Occupational Safety & Health Administration (OSHA). Among other things, the Act requires every employer to provide a safe workplace. To help employers reach this goal, OSHA promulgated hundreds of rules in the decade after it was created. OSHA’s rulemaking process has, however, slowed to a trickle since then.  

While the National Institute for Occupational Safety & Health recently identified over 600 toxic chemicals to which workers are exposed, in the last 16 years OSHA has added only two toxic chemicals to its list of regulated chemicals. This is because Congress, Presidents and the courts have hamstrung OSHA. For example, in March 2001 the Bush Administration and a Republican Congress effectively abolished OSHA’s ergonomics rule, a rule the agency had worked on for many years. 

These delays and inactions have caused more than 100,000 avoidable workplace injuries and illnesses.

These delays and inactions have caused more than 100,000 avoidable workplace injuries and illnesses. Workers are being injured and killed by known hazardous circumstances and OSHA can’t act.

Congress and the President need to break this logjam – we need to free OSHA to do its job of safeguarding workers.

Hurrah for the Wisconsin Workers' Compensation Advisory Council

Every time I read an article about the extreme contentiousness between employers and employees that manifests itself in many States’ legislatures concerning worker’s compensation legislation, I am again reminded of the workings of Wisconsin Workers’ Compensation Advisory Council. Recently, the Republican-controlled Washington State Senate passed three contentious measures intended to save businesses money by changing worker’s compensation rules. Essentially, the bills would overhaul compromise settlement agreements, lowering the age of eligibility from 55 to 40, and allow businesses to schedule medical evaluations so that business can move injured workers through rehabilitation more quickly. Republicans took the Senate in Washington.

The Council aims to maintain the overall stability of the workers’ compensation system without regard to partisan changes in the legislature or executive branches of government

The Wisconsin Workers’ Compensation Advisory Council was created in 1975 to advise the Department and legislature on policy matters concerning the development and administration of the worker’s compensation law. The Council aims to maintain the overall stability of the workers’ compensation system without regard to partisan changes in the legislature or executive branches of government (given the contentiousness of recent Wisconsin executive and legislative elections, this is a real blessing for injured workers and for worker’s compensation practitioners). The Council provides a vehicle for labor and management representatives to play a direct role in recommending changes in the worker’s compensation law to the legislature.

The Council, composed of five management, five labor, and three non-voting insurance members appointed by the Secretary of the Department of Workforce Development and shared by a Department employee meets regularly at different sites around Wisconsin. It occasionally assigns special topics to study committees on such issues as medical cost, permanent disability rates, and attorney fees. The medical committee assigned in the mid-1990s to report on minimum permanency percentages for surgical procedures, for example, issued its findings which resulted in the schedule contained in the Administrative Code. The Council obtains input from various worker’s compensation constituents including interested members of the legal, medical, labor, management, insurance, and employer communities. Public hearings on proposed changes are held, followed by Advisory Council deliberation. The Council has always produced an “agreed upon bill” which results in annual changes and benefit rates and substantive law. This system works in Wisconsin and would be a good template for other states as well.

Development of the Worker’s Compensation Act of 1911

This is the third installment in our series on why and how workers’ compensation was established in Wisconsin.

After reaching consensus on the details of the proposed workers’ compensation system, the Industrial Insurance Committee introduced a bill in 1911 that passed both houses of the state legislature. The only significant change made was to restore to employers the assumption of risk defense and fellow servant doctrine in cases where workers elected not to proceed under the new system.

In November of the same year, the first test case was brought before the Wisconsin Supreme Court. The Court affirmed that the legislature had the right to abolish employers’ common law defenses. It also held that the preservation of common law defenses in cases where employees opted out of the new system was based on a reasonable classification which was designed to promote the objectives of the new law and which did not violate the equal protection clauses of the state or U.S. Constitution. The Borgnis case epitomized the reluctance to invoke substantive due process–characteristic of the Court throughout the Progressive Era.

After the Worker’s Compensation Law cleared its constitutional hurdle in Borgnis v. Falk Corporation, it was steadily strengthened and augmented. In 1913, spurred by slow employer acceptance of the law, the legislature provided that any employer who did not explicitly opt out of the law would be presumed to have accepted it. The contributory negligence defense was also added to the list of defenses that employers not electing under the Act were prohibited from invoking. In 1919, the law was expanded to cover all employment-related injuries whether accidental or not, including occupational exposure claims. Finally, in 1931, when workers’ compensation had become a universally accepted part of Wisconsin industrial life, the law was made compulsory for virtually all employers and employees.

“Opting In” to Worker’s Compensation: Wisconsin’s Very Good Idea

Wisconsin Capitol BuildingThis is part 1 of a 3 part series.

Oklahoma recently faced a proposal in legislative session that would have allowed employers to “opt out” of the State’s mandatory worker’s compensation system. The bill ultimately died but it was closely monitored by the business community. Similar bills may soon surface in several other states including Colorado, Kansas, Louisiana, and Tennessee.

Wisconsin’s initial efforts in workers’ compensation led the nation.

With several states proposing to “opt out” of worker’s compensation, it is important to revisit, after 100 years, why Wisconsin “opted in” leading the way for the other 50 states in worker’s compensation. The next several blog entries will tell that story.

Part I. Workers Denied Recovery

Wisconsin’s initial efforts in workers’ compensation led the nation. In 1911, Wisconsin became the first state in the nation to place a broad, constitutionally valid workers’ compensation system into operation.

Prior to 1911, Wisconsin workers who were injured on the job had to overcome three common law obstacles in order to recover from their employer. Under the contributory negligence doctrine, a worker could not recover from the employer if the worker had been negligent in any way and that negligence had contributed to the accident regardless of how negligent the employer may have been.

Under the doctrine of assumption of risk, if a worker knew or should have known of the danger inherent in the task at issue before undertaking it, the employer was not liable for an accident arising from the task even if the employee was not negligent.

Under the fellow servant rule, employers could not be held liable for accidents caused by fellow employees (i.e., co-workers) of the victim.

The combined effect of these common law defenses served to deny workers adequate remedies for their injuries.

Please visit our blog next week for part 2 of our series on states opting out of workers’ compensation.