Health Care Providers Express Opposition to Worker’s Compensation Fee Schedule

February 16, 2018

During a hearing that lasted nearly six hours February 14, the health care community stood united in opposition to government-set price controls imposed unilaterally on hospitals, physicians, physical therapists, chiropractors and other practitioners who provide care to injured workers. The Senate Committee on Labor and Regulatory Reform held a public hearing on Senate bill 665, the biennial worker’s compensation bill sent to the Legislature by the labor and management members of the Worker’s Compensation Advisory Council. 

Among other provisions, the bill would require the Department of Workforce Development (DWD) to come up with and impose a fee schedule that approximates the prices paid by group health insurers. Sen. Steve Nass, chairperson of the Committee, at times expressed frustration with the process, noting there are some other good policies in the bill, including the bill’s provisions regarding the use of opioids. “The opioid is a classic example, but there are other things in the bill. But because the rates came over, the whole bill may very well die along with everything else that’s good,” he said.

Health care providers described many of the positive outcomes in the worker’s compensation system, including that workers get back to work three weeks faster on average compared to other states; that overall costs per claim are lower compared to other states; that workers are very satisfied with their care; and importantly, that premiums in the worker’s compensation program have gone down the last two years in a row, and DWD has estimated savings of $170 million to the program. 

Despite the negative rhetoric about health care providers from supporters of government price setting, health care practitioners and provider representatives from across the state also shared their experiences and the work being done by health care providers in helping to prevent and treat injured workers. Sen. Van Wanggaard, vice-chairperson of the Committee, shared his own experiences as an injured worker, and praised the terrific health care he received. 

Health care providers encouraged the legislators to protect Wisconsin’s excellent worker’s compensation system by rejecting government price controls and, instead, reduce costs by making the program more efficient and less administratively burdensome. 

Joanne Alig, policy advisor for WHA, referred to a new report completed by the Benefit Services Group (BSG) and HC Trends (see full story below). Alig described some of the key differences between group health and worker’s compensation, including that worker’s compensation insurers are exempt from health care requirements such as HIPAA and ICD-10, which only adds to the administrative burden for health care providers. Alig noted that a fee schedule does nothing to reduce the underlying costs of the program.

“If the goal is to reduce costs in the system above the $170 million in savings already achieved, fee schedule proponents should work to remove the underlying costs to the system,” she said.

Echoing that sentiment, Connie Kinsella emphasized that “fee schedules are not reform.” Kinsella retired as vice president of revenue cycle for UW Health four years ago after having spent her career working on reducing health care costs. Kinsella described in some detail what she called the most “archaic, costly and cumbersome practices of any third party in health care.” She said worker’s comp carriers can negotiate on policies such as prompt payment, and they can bring to the table ways to improve administrative efficiency. “Fee schedules turn a blind eye to quality and efficiency,” she added. 

Also testifying were representatives from Ascension Wisconsin, Aurora Health Care, Gundersen Health System, Marshfield Clinic Health System and Prevea Health. Each of these experts provided excellent examples of the work they do every day and their frustrations with the administrative hassles involved in the system.

In the end, the legislators on the Committee expressed surprise at the level of paperwork still involved in worker’s compensation claims processing.

“You have got to be kidding me—that is just amazing…stone tablets,” said Wanggaard.

Legislators also continued to articulate their frustration with the process

“We quite frankly will be, if we do which is doubtful of course, voting to move something forward that we, quite frankly don’t know the impact of the formula, and that can be dangerous,” said Nass.

This story originally appeared in the February 16, 2018 edition of WHA Newsletter