Legislature readies for another fight over workers’ comp fee schedule

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Of companies in the 31 states studied in a commonly cited report on workers’ comp costs, those in Wisconsin far and away hand over the most on average to treat on-the-job industries.

At the same time, though, the workers’ comp premiums that most Wisconsin employers are required by law to pay have actually fallen in the past two years.

Those two facts – seemingly hard to square with each other– are likely to be presented to state lawmakers repeatedly in coming months as lobbyist prepare once again to fight over what has been one of the biggest legislative questions of recent years: Would employers be better off if state government were to set a cap on workers’ comp payments for medical treatments?

To reform proponents, a fee schedule is a bit of unfinished business in their quest to make Wisconsin a more attractive state to companies that might be looking to move here from overseas or elsewhere in the U.S. To those on the other side of the debate, Wisconsin’s system is a gem distinguished for its ability to get injured workers back on the job quickly; they warn that rash changes risk unintended consequences.

The state legislature has yet to see a formal proposal this year calling for the adoption of a fee schedule. That has not stopped battle lines from being drawn up behind the scenes.

Last month, labor and management representatives on the state’s Worker’s Compensation Advisory Council put forward an “agreed bill” calling for the adoption of a fee schedule. Such bills are usually used as the starting point for legislation that will eventually go before lawmakers.

At the head of the efforts to get legislation of that sort passed this year will be Wisconsin Manufactures & Commerce, the state’s chamber of commerce. In making their arguments, representatives of the group are likely to make frequent reference to a report released in July by the Cambridge, Mass.,-based Workers Compensation Research Institute looking at workers’ comp in Wisconsin and 30 other states.

The report looked at the money that was spent in 2016 to use workers’ comp to treat on-the-job injuries. The average cost in Wisconsin, it found, was 145 percent higher than the median for all the states combined. Chris Reader, director of health and human resources policy at WMC, said that sort of a figure should be enough to give anyone pause.

He noted that 44 states use fee schedules to control workers’ comp costs. Many of those, he said, are the exact same states that Wisconsin competes with when trying to bring in new employers.

“Lawmakers have done a lot of things to keep making Wisconsin a competitive place for business that might be looking to move here,” Reader said. “We believe that enacting a fee schedule – like almost every other state has done – will only make Wisconsin more competitive.”

Defenders of the current system have a simple reply. If these costs are so out of control, then why have the premiums that employers pay to workers’ comp insurers fallen in the past two years?

Workers’ comp premiums in Wisconsin decreased by 8.28 percent on average this year and by 5.1 percent last year.

“If anything, the facts on the ground are more in favor of the system we have now than they were a few years ago,” said Mark Grapentine, senior vice president of government and legal affairs for the Wisconsin Medical Society.

Rather than the cost of treating on-the-job injuries, Grapentine said attention should be paid to other figures. Wisconsin employers’ total cost of providing workers’ comp – an average that takes into account not only medical services but compensation paid for lost time and wages – hovers right around the median of what their counterparts pay in other states.

Also, Wisconsin is remarkably good at getting injured workers back on the job. A separate Workers Compensation Research Institute report found that, between 2008 and 2011, Wisconsin workers with injuries leading to more than seven days of lost work spent three fewer weeks on temporary disability than did workers in all but one of the 11 other states that were chosen for the comparison.

Advocates of the current system have hinted that a fee schedule could give medical providers a perverse incentive to find more ways to milk money out of the system. If doctors were barred from charging what they might deem a fair amount for particular procedures, they might simply start scheduling more appointments – a change that could delay workers’ returns to work.

Asked why medical costs related to workers’ comp remain stubbornly high in Wisconsin, Grapentine pointed to another culprit: an above-average rate of injury. In 2015, for instance, non-farm private industries in Wisconsin logged 3.6 injuries and illnesses for every 100 workers. The national average was 3 for every 100 workers.

Grapentine conceded that the heavy concentration of manufacturers in Wisconsin means that workers here are often exposed to more workplace dangers than their counterparts elsewhere. Still, he said, if employers are really intent on reducing their workers’ comp costs, they could do worse than to try to make their workplaces safer.

“That’s where the energy should be focused in the first place,” Grapentine said.

Reader had his own spin on the injury statistics. Injury rates in Wisconsin, although higher than the average, have fallen in recent years.

Employers, Reader said, have been prevented by the high cost of using workers’ comp for medical treatments from reaping the full benefits of that improvement.

“All of these things are driving down the cost of insurance,” Reader said. “But medical pricing is still going up.” Follow @TDR_WLJDan