By Graham Kilmer
*Updated for accuracy 3/24/15
Lawmakers and attorneys are concerned about the future quality and efficacy of Wisconsin’s worker’s compensation program, following a provision within Governor Walker’s 2015 budget which proposes a transfer of the duties of the Division of Workers Compensation (WC) to be split between two different state agencies. The WC is currently housed in the Department of Workforce Development (DWD). The proposed transfer would allocate the WC’s administrative functions to the Office of the Commissioner of Insurance (OCI), and its legal and adjudicatory functions would be transferred to the Department of Administration’s (DOA) Division of Hearings and Appeals (DHA).
According to a statement from the DWD, the changes proposed by the Governor are aimed at increasing “efficiency, effectiveness and accountability”. However, legislators and worker’s compensation lawyers are concerned about the effects these structural changes will have on the overall quality of Wisconsin’s workers compensation program.
“There is no logic behind this move,” said Wisconsin’s 27th District Senator John Erpenbach “and it will cause confusion for businesses and injured workers.”
According to the DWD, the proposed split, “Continues the strong tradition of a well-run WC system.”
In a Jan. 27 report in the Wisconsin State Journal, It was noted that in a 2013 study by the Workers Compensation Research Institute that the cost of Wisconsin worker’s compensations claims were “among the lowest in the nation”.
According to a statement from the DWD, “Wisconsin will join many states housing WC systems outside of their workforce development or labor departments.”
Robert Ward, an attorney with 32 years of experience handling worker’s compensation cases, believes that the move to split up the Division of Worker’s Compensation is not based upon the reality of Wisconsin’s current program.
“I think it’s a solution to a problem that doesn’t exist.” said Ward.
Ward believes that the proposed restructuring of WC is going to have detrimental effects for the quality and efficacy of worker’s compensation hearings.
According to the DWD, administrative law judges (ALJ) are going to be cross trained to handle a variety of cases following the transfer of the adjudicatory functions of WC to the Department of Administration.
Sen. Erpenbach said that his main source of concern for the proposed transfer is the notion to move all hearings and appeals to the DOA.
According to Ward, worker’s compensation judges are tasked with evaluating cases involving a “pretty complicated area of law”. Most sitting judges have experience deciding a particular kind of case. Ward believes cross-training DOA judges to evaluate WC hearings will not maintain the quality of the process for worker’s compensation applicants.
“This represents a detriment to the quality of juris prudence.” said Ward.
There are also worries that all hearings for worker’s compensation will need to be held in Madison.
“We have yet to get a guarantee from Governor Walker’s team that people will not have to come to Madison for hearings and appeals, which is a serious concern.” said Sen. Erpenbach.
The DWD believes employers will enjoy a less confusing system, following the transfer as proposed by the governor, because there will be “one less agency to work with”.
According to the DWD’s website information about the flow of a claim, under the current WC system an employer reports an injury to the insurance company. The insurance company then files the report with worker’s compensation division at the DWD. In the event of a disputed claim, the process returns to the DWD for the hearing process.
Under the proposed structure for worker’s compensation filing, following a report from an employer, insurance companies will report a claim with the OCI. If the claim is disputed, the process will then be exported to the DOA’s Division of Hearings and Appeals.