Overview: WCAC Proposal Regarding WI Workers’ Compensation Costs

Property & Casualty

The Wisconsin Workers’ Compensation Advisory Council (WCAC) has proposed changes to existing workers’ compensation payment structure to the Wisconsin State Legislature.  WCAC, a diverse body designed to advise the Department of Workforce Development (DWD) and the Legislature on workers’ compensation policy matters, has recommended that a medical-fee schedule be put into place to address the high and rising costs of medical treatments for work injuries in Wisconsin.

By implementing a medical fee schedule as proposed by the WCAC, workers’ compensation costs would experience limits or caps on the amounts that medical providers can charge for services and procedures related to the treatment of work-related injuries. The WCAC based their findings on statistical data compiled by the Workers’ Compensation Research Institute (WCRI).

Read the full M3 Risk Insight “Overview: WCAC WI Workers’ Compensation Proposal”, which explains the WCRI’s background research and WCAC’s Medical Fee Schedule Proposal in further detail.

How does the WCAC proposal impact your business?

Medical costs typically account for 80-90% of the incurred cost of a workers’ compensation claim.  While employers can manage the indemnity (lost time) portion of the claim costs by providing transitional duty work as part of an effective return-to-work program, it can be more challenging to manage medical costs.  The proposed medical fee schedule aims to lower workers’ compensation costs in Wisconsin, by setting limits or maximum allowable fees for the reimbursement to medical providers for medical treatment associated with work-related injuries.

Opponents of the proposal argue that a slight decline in costs over recent years is due to the medical community’s emphasis on early return-to-work. However, WCRI research shows the decline is a result of statutory changes which encourage return to work and less litigation.

The WCAC proposal addresses the issue of high medical costs associated with treating work-related injuries. Wisconsin-based employers interested in supporting this proposal should contact their legislators to encourage passage.

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