![[Top]](/images/nav-top.gif){kind=small}
![[Back]](/images/nav-back.gif){kind=small}
![[Home]](/images/nav-home.gif){kind=small}
September 4, 2003
302 Capitol Building
Cheyenne, Wyoming
Representative Becket Hinckley, Chairman
Senator John Barrasso
Representative Mary Gilmore
John Rivera, Senior Staff Attorney
Gerald W. Laska, Staff Attorney
Please refer to Appendix 1 to review the Committee Sign-in Sheet for a list of other individuals who attended the meeting.
All meeting materials and handouts provided to the Committee by the Legislative Service Office (LSO), public officials, lobbyists, and the public are referenced in the Meeting Materials Index, attached to the minutes. These materials are on file at the LSO and are part of the official record of the meeting.
Chairman Hinckley called the meeting to order at 8:30 a.m. The following sections summarize the Committee proceedings by topic. The Chairman wished to thank the Speaker of the House and President of the Senate on the record for appointing freshmen legislators as chairs of subcommittees. The experience will be valuable and especially needed with the anticipated turn-over in the make-up of the legislature that will occur in the next couple of election cycles.
Department of Employment Director Cindy Pomeroy explained that the general function of the Workers' Compensation Medical Commission is to provide three-member hearing panels to decide medically contested cases.
Workers' Safety and Compensation Division Administrator Gary Child referenced statistics included in a handout prepared by the Department (App. 3). The medical commission caseload is down 20% between 2002 and 2003, and the average time to hearing is down from 12 months to 8 months. Improvements are a result of the Division and Medical Commission using mediation services of the Office of Administrative Hearings and because Scott Smith has hired an assistant, Larry Kehl. The Division is considering placing time limits on hearings and settlements. The Division also may request extended budget authority to hire a physician part-time to advise Division staff on medical issues before referring to hearing.
In response to a question from the Chairman, Mr. Child stated that he is not aware of any legislative changes that would correct the hearing backlog at this time.
Senator Barrasso stated that the Wyoming Orthopedic Surgeons at their November meeting expressed their pleasure that the medical commission hearing delay had been reduced.
Director Pomeroy explained that, in response to the LSO audit, the Department proposes a change to W.S. § 27-14-403(c) which would provide for payment of temporary total disability benefits semi-monthly instead of the current monthly payments. There would be a one-time cost of approximately $20,000 to implement the change, plus approximately $10,000/year in additional handling and postage costs.
Chairman Hinckley asked if the use of electronic funds transfers to pay benefits would cause significant savings. Director Pomeroy replied that the Department does not currently have the capability to do that. Representative Gilmore stated that many workers' compensation claimants would not have the ability to receive electronic funds transfers.
Senator Barrasso asked if the proposed semi-monthly payments would expedite issuance of the first TTD check by the Division. Director Pomeroy indicated that it would.
Senator Barrasso asked if there would not be an additional cost to the fund because money would be withdrawn sooner and therefore not earn as much interest under the proposal. Director Pomeroy acknowledged that that may be a possibility and that the Division is checking with its actuary to determine the fiscal impact of the proposed change. Administrator Child added that his understanding was that the Management Audit Committee expressed its willingness to incur the necessary costs to expedite TTD payments.
Chairman Hinckley asked the Director to explain the 2008 target date for the fund's solvency. Director Pomeroy replied that the fund needs $569 Million by that date and has a balance of $432 Million now. Wendy Tyson, Administrator of the Employer Tax Division, stated that the fund's actuary is currently updating those figures.
Barry Johnson commented favorably on the proposal, adding that it could save money if TTD could be terminated or reduced two weeks faster than with monthly payments.
Ken McCann questioned whether the expedited payment schedule might pressure Division staff to approve TTD payments before adequately investigating the compensability of a claim. Administrator Child said there would be no such effect, and that the Division already tries to complete compensability determinations within two weeks after receipt of an injury report. Director Pomeroy added that the use of electronic signatures would help, and that the Department is investigating that possibility.
Director Pomeroy explained that the current statutory provision for temporary light duty, as an alternative to full temporary total disability, is too complex. Current law may discourage some employers from offering, and some employees from accepting, light duty work. The Director referenced the Department's proposed changes to W.S. § 27-14-404(j). (App. 3)
Debbie Noonan and Barry Johnson as representatives of employers said they approved of the concept.
Marion Loomis questioned one part of the Division's proposed statutory change because it appeared to give the employee final say on whether to accept a light duty offer. He prefers the current law's provision that a doctor can approve a light duty assignment, or some other provision to enforce an appropriate light duty assignment.
Sis Nelson questioned the part of the Division's proposal that would make the temporary light duty benefit chargeable to the employer's experience rating. Director Pomeroy and Administrator Tyson agreed to consider making the entire benefit non-chargeable.
Ken McCann stated that employers concerned about liability would prefer having a doctor approve the light duty in advance. Director Pomeroy said that would be reasonable.
Representative Gilmore asked if the proposal would inadvertently penalize very small employers who could not afford to create a light duty assignment. Administrator Tyson stated that would not happen because very small employers' premiums are based solely on the frequency of claims, not the size of claims.
Administrator Child explained that Wyoming is one of seven states that compensate health care providers by use of the publication "Relative Value for Physicians" or "RVP." The RVP establishes a unit value for medical procedures, and the Division establishes a dollar conversion factor for each unit of value. The conversion factors vary by medical specialty. Revisions to the RVP are made annually for the calendar year, but the Division adopts the RVP by rule effective July 1 of each year. As a result, the Division is six months behind in adopting the most current RVP. In addition, the Division has not changed the conversion factors since 1996. Mr. Child acknowledged that the conversion factors are probably too low. The Division is in the process of collecting data to increase the conversion factors, and will check with its actuary to see if the fund could afford a single increase or must stage the increase over several years.
Senator Barrasso explained his understanding of the RVS and conversion factor payment system. He stated the state's doctors are happy that the Division concedes the payments are too low, and that worker's compensation payment rates are now as low as Medicaid's rates.
Representative Gilmore questioned when funeral benefits, survivors' benefits and permanent total disability benefits were last increased. Administrator Tyson said the funeral payment was increased during the 2002 session, and that other benefits increase automatically because they are tied to employees' wage rates.
Director Pomeroy referenced several other changes proposed by the Department. The Department proposes changing W.S. 27-14-403(c) to add the word "original" before the word "injury" each time it appears. This would clarify that benefits are to be calculated based on the injured worker's earnings at the time he was first injured, not when his condition might worsen years later. The Division also proposes to change W.S. 27-14-403(b) to clarify that children's benefits cease when a child turns 18, rather than at "the age of majority," which is unclear.
Administrator Child added that the Department also proposes a clean-up change to W.S. § 27-14-403(e)(i) to clarify that, when a worker dies from a work-related injury after having been awarded permanent total disability, the family receives only the dependent survivors' benefit and not the balance of permanent total disability in addition. This was an oversight in a 1994 revision.
Director Pomeroy stated that the fund has not been getting all of the third party recovery that it is entitled to under the statute. The statute says the fund gets up to one-third of the injured worker's recovery from a third party, but the Division's and Attorney General's policy has been to accept less than that. The Division will now try very hard to get the full one-third. The Department is no longer requesting any statutory change to increase the fund's one-third share.
Chairman Hinckley asked where the prior policy came from. Administrator Child replied that the Division in the past generally accepted 22% of the third party recovery, which reflected the state's pro rata share of attorney's fees and other costs of recovery. He added that, even under the previous policy, the fund recovered approximately $1 Million per year, which helps employers' experience ratings. He also had received many phone calls opposing the Division's earlier suggestion to increase the fund's one-third share.
Administrator Tyson agreed that there was major opposition to increasing the one-third share, and that the subject is not that simple. She added that part of the problem is that many of the third party recoveries come three or four years after the injury, so that any refund is too late to help the employer's experience rating. An employer's experience rating is affected only for the first three years after the injury date.
Representative Gilmore questioned how the fund's third party rights are enforced. Director Pomeroy explained that the statute includes notice requirements, that the Division is made a part of the lawsuit settlement, and that the Division has increased its efforts to notify injured workers up front that they have to reimburse the fund if they sue a third party. Chairman Hinckley added that the third party remains liable to the state if the fund does not get its share of the settlement.
Zach Smith stated that W.S. 27-14-105 is inherently unfair. Tortfeasors should be 100% liable for an injury and the employer's experience rating should not be affected at all if the injury was the fault of someone other than the employer. Chairman Hinckley asked what statutory changes he proposed, and Mr. Smith stated that the fund should get 100% of the third party recovery and that the employer's experience modification rating should not be affected at all.
There followed some general discussion about why more workers don't sue. Administrator Child stated that there already is a significant amount of litigation, that he receives notice of at least several new cases per week, and that $1 Million was recovered last year. Director Pomeroy added that Attorney General Crank is adamant about collecting one-third of tort settlements.
Eva Taylor stated that employers and employees need to work together. Tom Jones stated that the 6-month extension of the statute of limitations for the division is too short and lawsuits should be brought more timely. Sis Nelson stated that the employer's claims experience should not be affected at all when a third party case is pending.
Chairman Hinckley asked what effect third party recoveries have on the 2008 target for solvency. Director Pomeroy stated that the Division currently has issued a request for proposals to audit the actuary's projections and that should be part of the audit.
The meeting adjourned at 11:10 a.m.
Respectfully submitted,
Representative Becket Hinckley
Chairman