Wisconsin Council Okays Workers Comp Cost-Containment Plan

Published December 16, 2013

The Wisconsin Workers Compensation Advisory Council (WCAC) unanimously voted at its December meeting to back a plan that would tie healthcare rates in the Workers Compensation system to a fee schedule based on local market prices.

Currently, there are no limits on what health care providers can charge the Workers Compensation system for treating injured workers. Not surprisingly, that is the fastest growing cost in an otherwise fiscally sound system.

In 2012, the median amount paid by workers compensation was nearly five times the Medicare reimbursement rate for the 25 most common procedures, according to a report by the Wisconsin Compensation Rating Bureau.

Double Costs in Nearby States

Another study, by the Wisconsin Insurance Alliance, found that the maximum allowance for medical costs in the Badger State were nearly double what they were in neighboring states. Many believe the reason for such high medical costs is that there is no limit to what medical providers can charge the Workers Comp system.

WCAC has been discussing cost-containing ideas for months. Insurance companies on the council wanted compensation tied to Medicare rates, but medical providers did not want a fee schedule. The council decided on the market-based fee schedule, which is a middle-ground approach.

Average of Group-Health Prices

The market-based fee schedule will take the average group-health rates in five regions of Wisconsin and add 10 percent. The fee schedule will be adjusted for inflation, which will be based on the medical Consumer Price Index, and will be reviewed every two years by WCAC. The new fee schedule would be required to be up and running by June 30, 2015.

The legislature still needs to approve the recommendations from WCAC, but no timeline was announced.

“The Workers Compensation Advisory Council is statutorily charged with recommending changes to workers compensation law and administrative rules to the Legislature, which occurs through an agreed-upon bill,” John Dipko, Department of Workforce Development (DWD) communications director, told the MacIver News Service. “The most recent agreed-upon bill will now go to the Legislature for its consideration.”

Dipko said the legislature does have the authority to make changes to the bill and DWD will ultimately carry out the legislature’s directive.

Used with permission of the MacIver News Service of the MacIver Institute in Madison, Wis.