By: Joseph D. Birdsall

On July 3, 2025, the Wisconsin Legislature passed Wisconsin’s biennial budget bill. Governor Evers signed the bill into law the same day. Included in the budget bill is a provision establishing a fee schedule for worker’s compensation medical bills generated by Wisconsin hospitals. This is a favorable development for employers and insurers that will limit their worker’s compensation medical expense exposures for medical bills generated by hospitals in Wisconsin.

The new bill creates Wis. Stat. § 102.423 “Health service fee schedule.” This provision requires the Department of Workforce Development (DWD) to establish a maximum worker’s compensation medical fee schedule for Wisconsin hospitals by July 1, 2027. The DWD must publish notice in the Wisconsin Administrative Register when the fee schedule is completed. Once notice is published, the fee schedule will go into effect. The fee schedule will be established in the following manner:

1. The DWD will divide Wisconsin into five different regions based on geographical and economic similarity.

2. For each region, the DWD will determine the dollar amount for a given medical item or service that represents 75% of the average in-network negotiated price charged by commercial health plans. The DWD is prohibited by law from including Medicare or Medicaid prices in this calculation.

3. The maximum worker’s compensation fee payable to a hospital for a given medical item or service will be 120% of the 75^th percentile in-network commercial health plan amount for that medical item or service.

4. The schedule will be published on the DWD’s website once it is completed.

5. Each year, the DWD will publish a revised fee schedule based on updated commercial health insurance pricing.

The fee schedule will operate in the following manner:

1. If a hospital bill is less than $65,000, the insurer or self-insured employer must remit payment to the hospital within 60 days of the date the hospital submits the bill for payment or within 60 days of the date the hospital sends medical records to substantiate the bill, whichever is later.

2. If a hospital bill is equal to or more than $65,000, the insurer or self-insured employer must remit payment to the hospital within 90 days of the date the hospital submits the bill for payment or within 90 days of the date the hospital sends medical records to substantiate the bill, whichever is later.

3. If the insurer/employer does not pay the bill within the time periods specified above, the fee schedule no longer applies to limit the chargeable fee for that medical item or service.

4. Insurers and self-insured employers can request an extension of time from the DWD if they have not yet determined whether the injury is compensable. The DWD has the discretion to deny an extension request or grant an unlimited number of extensions, but each granted extension will be limited to a maximum of 30 days. If an extension request is denied, the insurer/employer has 14 days from the date of the denial to submit payment.

5. The law requires hospitals to provide insurers and self-insured employers with medical records to substantiate each submitted bill within 10 days of a request from the insurer or the employer “to the extent practicable.”

There are several caveats to keep in mind:

1. The fee schedule is not immediately in effect. It has not been established yet, and the DWD has until July 1, 2027, to complete its work on the fee schedule.

2. Once it is established, the fee schedule will only apply to treatment for dates of service generated after the date that notice of the established fee schedule is published in the Wisconsin Administrative Register, which has not happened yet but must happen no later than July 1, 2027. Bills from dates of service occurring prior to the fee schedule’s publication will not be subject to the fee schedule limits.

3. Paying a medical expense under the fee schedule provision does not constitute a waiver of defense or admission of guilt.

4. However, if an insurer/employer waits longer than 60/90 days to pay a bill, that insurer/employer can no longer take advantage of the fee schedule to limit the amount that the hospital can charge for that bill. Thus, litigated claims are likely to continue to involve uncapped hospital bill charges.

5. The DWD has not yet promulgated rules governing the mechanism for extension-of-time requests.

6. If the hospital attempts to charge more than the maximum fee schedule for an item or service limited by the fee schedule, it cannot pursue a collection action against the worker for the difference between what it charges and the fee schedule amount paid by the insurer/employer.

7. The fee schedule only limits medical bills generated by “eligible hospitals” in Wisconsin. Under Stat. § 50.38(1), an “eligible hospital” is any hospital that is not a mental institution and not a general psychiatric hospital. Pursuant to Wis. Stat. § 50.33(2), a “hospital” is an institution devoted to the treatment of and medical or surgical care for 3 or more patients “and regularly making available at least clinical laboratory services, and diagnostic X-ray services and treatment facilities for surgery, or obstetrical care, or other definitive medical treatment.” Hospitals can include outpatient facilities and central service facilities connected with hospitals as long as they fit the above-quoted definition. This narrows the applicability of the fee schedule and likely means that it will not apply to most private/unaffiliated chiropractic clinics, pain management clinics, or physical therapy offices.

What’s Next: 

Over the next two years, we will continue to follow the DWD’s progress in constructing the fee schedule. We will provide an update once the fee schedule is completed and once it is known when the schedule is slated to go into effect. This will be July 1, 2027, at the latest. In the meantime, it would be prudent for insurers and self-insured employers to prepare for the fee schedule by updating their adjustment/payment procedures to reflect the requirements discussed above. Procedures should be updated to ensure prompt review/payment of hospital bills so that the fee schedule is used to maximum effect. Medical providers should be reviewed and internally categorized based on whether they qualify as a “hospital” under Wis. Stat. § 50.33(2) so that opportunities are not missed to apply the fee schedule.

If you have any questions about the forthcoming hospital fee schedule, or any questions about other Wisconsin worker’s compensation topics, please contact Joe Birdsall at 414-273-3910 or jbirdsall@lindner-marsack.com, or any other member of the worker’s compensation team at Lindner & Marsack.