Workers’ comp watchers across the Midwest were stunned to see a memo come out of Cheese-land where it appears Gov. Scott Walker is trying to break up or “de-form” their quiet and generally reasonable workers’ compensation system. Labor representatives and attorneys say they are concerned about a report that Walker’s two-year budget plan will call for “drastic” changes in Wisconsin’s well-regarded system for compensating injured workers.
 
Please note the most recent Oregon workers' compensation premium rankings put Wisconsin almost right in the middle of the United States – they are 23rd with an index rate of $1.92, and they are 104% of the median of all states. Our Cheese-brothers/sisters were previously 12th in the Oregon 2012 premium rate survey, so they are tracking precisely where Illinois wants to be in the next two years.
 
It seems someone in the Wisconsin Workers' Comp Division leaked an unsigned memo authored by a person with knowledge of the potential changes to the workers' compensation program that states the Walker administration plans to upend the current one-stop shop for injured workers, employers and insurance companies by dividing responsibilities among various agencies that don’t currently handle or understand workers’ comp law and rules. These are changes the anonymous author claims will “clearly have a negative impact on our stakeholders.”
 
The memo, dated Jan. 15, was sent to “WC Stakeholders” and is filled with shorthand and acronyms aimed at people knowledgeable about the Wisconsin workers' comp system. The Wisconsin State Journal and WorkCompCentral obtained the memo last week, and it was circulated among the media by Sen. Jon Erpenbach, D-Madison, on Monday.

The author declined to be identified publicly for fear of being terminated. Among the changes the memo outlines would be allowing companies and injured workers to reach their own settlements without approval by the Workers' Compensation Division. Currently, all such agreements must be approved by the division’s administrative law judges. The same rules apply in Illinois workers’ compensation – the concept is to ensure injured workers get fair settlements within a reasonable range for other similar injuries.
 
In addition, the memo states ALJs and the division would no longer be available to answer questions from the public, injured workers, employers and insurance companies and instead will focus only on rendering decisions in contested cases. This “no-questions-answered” concept wouldn’t be much of a change to Illinois workers' compensation practice, as our workers' comp administrators rarely answer questions but direct interested parties to attorneys on both sides. We feel this newly proposed Wisconsin approach may lead to more litigation and not less.
 
We are also advised the governor wants to end the practice of using certified court stenographers for contested hearings – this practice would change the concept of appeals in reliance on transcripts. We are unsure what other system for recording hearings would replace transcripts and the CSRs who create them.
 
Another aspect of the plan would reportedly remove the Workers' Compensation Division from the Wisconsin Department of Workforce Development and split its future duties between two different agencies, the Office of the Commissioner of Insurance and the Department of Administration, according to the memo. As we outline above, neither agency has anything to do with Wisconsin workers’ comp at present so a rocky and confusing transition may take place. Governor Walker is scheduled to unveil this budget proposal today.
 
Like Illinois workers' comp, the cost of administering Wisconsin’s workers' comp program is paid for by worker’s compensation insurers and self-insured employers who remit a yearly fee in proportion to their size. Taxpayers and injured workers do not directly pay for the system. For the Wisconsin workers' compensation administration, any reorganization would not add or subtract from the 2015-17 Wisconsin budget’s bottom line.
 
What will it mean to Illinois workers' compensation?
 
It is hard to tell, but we are certain our current Gov. Bruce Rauner closely watches the actions of Gov. Walker in Wisconsin and Gov. Daniels in Indiana. We salute him for doing so, as they are close competitors of our state. Of the three states of Illinois, Wisconsin and Indiana, Illinois has been the worst-run under Democratic control for well over a decade and we have major financial issues, including over $110 billion in debt that is going up at a rate close to $20 million every day of the year. As we have said over and over, we do feel the Illinois workers' comp system can be readily reformed without the need to battle over legislation in Springfield. We are happy to advise Gov. Rauner’s staff and/or any of our readers on how to get this done quickly and smoothly – all you have to do is ask.

In our view, what Gov. Walker is doing in Wisconsin is much too radical and he is trying to “fix-something-that-isn’t-broken.” We don’t feel confusion and chaos is a way to make things better for any of the component players in the workers' comp arena.  
 
Gov. Rauner’s first State of the State speech is later this week so we will see what he has to say and report it for our readers next week.