WI Health News Panel: Wisconsin Worker’s Comp Works Now Without a Fee Schedule

November 10, 2017

The facts and data show the Wisconsin Worker’s Compensation program is working well. That’s the message from the Wisconsin Hospital Association (WHA) and the Wisconsin Medical Society during a panel discussion moderated by Wisconsin Health News Editor Tim Stumm, November 7 in Madison.

Joanne Alig, WHA senior vice president, policy & research, joined Mark Grapentine, senior vice president of government relations, Wisconsin Medical Society; Charles Burhan, assistant vice president and senior public affairs officer, Liberty Mutual; and Chris Reader, director, health and human resources policy, WMC, to discuss the latest proposal to implement a medical fee schedule in Wisconsin. 

In his introductory comments, Reader noted one reason Wisconsin should want a fee schedule is that 44 other states have found that as a policy solution to rising medical costs.

But Alig questioned that logic. “Just because 44 other states have a fee schedule, why should we?”  She noted that premiums have been coming down in Wisconsin—8.46 percent starting October 1, on top of 3.19 percent the year before—resulting in about $220 million in savings to employers over the past two years. Grapentine added that in October when the rates took effect, it was the health care sector that was touting what a great benefit that was to Wisconsin business.

Alig also took issue with the basic premise that medical costs in Wisconsin are higher than other states. She noted the Worker’s Compensation Research Institute (WCRI) adjusts their data, automatically resulting in Wisconsin’s costs looking higher compared to the other 18 states it includes in its study. Alig pointed out that WCRI has at least four different numbers on how Wisconsin compares to other states on medical costs per claim, all depending on how the data is displayed. Rather, relying on data from the National Council of Compensation Insurance (NCCI) and looking at the last three years’ of data, Alig said Wisconsin is below the national average. 

The fee schedule, as proposed by the Worker’s Compensation Advisory Council, would take rates negotiated between health insurers in the group market and providers, and apply those rates to the worker’s compensation program. Burhan noted that “most employers cannot negotiate in worker’s compensation.” Burhan went on to say they believe they need the state to help them negotiate. 

Alig and Grapentine both explained that the worker’s comp program is looking for the same discounts that group health receives; however, the proponents of a fee schedule take no interest in doing the hard work to reduce the “worker’s comp industrial complex” that operates behind the scenes and adds costs to the system. They both noted there is a give and take in negotiations. Alig pointed out that group health insurers negotiate lower prices with providers based on factors such as prompt payment. 

“In the worker’s comp program, only 8 percent of the claims are paid within 30 days. In group health, over 70 percent of the claims are paid in 30 days,” Alig said. “No other business would wait 12 to 18 months to get paid.”

They also pointed out the loss ratio in worker’s comp is 62 percent. “That means 38 percent or about $760 million is going to insurers’ administrative costs and profit,” Alig said. Grapentine added that it would be “fair to have transparency in that area.”

Grapentine also emphasized that injured employees have rapid access to care and treatment, they return to work three weeks faster than the national average, they receive the highest quality of care and the program’s medical costs are at the national average. 

According to Reader, however, health care shouldn’t take any credit for the great return to work statistics.

“No doubt we have excellent care,” he said. “But that’s not why workers get back to work faster.”

WHA and WMS took issue with that sentiment. Grapentine described a recent op-ed that highlights the difference in opinion. “Management said that it’s laughable that health care would have anything to do with getting people back on the job. That’s the difference between where health care is, taking care of patients and concentrating on patients, which is every chiropractor and PT and physician and hospitals’ number one job.” 

“We are just really proud of health care overall, when it comes to taking care of people, and we don’t think we need to take a sledgehammer to the system,” Grapentine said. 

Alig said if a fee schedule goes into effect, injured patients will still get high-quality care. “We are number one in the country, and it’s what we do in Wisconsin,” she said. “But, if a fee schedule goes into effect, we won’t have done the hard work of getting at the underlying costs of the system.”

This story originally appeared in the November 10, 2017 edition of WHA Newsletter