In worker’s compensation case, agency cannot decide where
incapacitated individual lives
In a case presenting a "novel issue," the Wisconsin Appeals
Court upheld a circuit court ruling that limits the authority of the
Department of Workforce Development in making decisions about where an
incapacitated individual can live and receive treatment and care.
By org jforward wisbar Joe Forward, Legal Writer,
State Bar of Wisconsin
2010 – The Department of Workforce Development (DWD) does not have
authority, for worker’s compensation purposes, to determine an
incapacitated individual’s living arrangement, a Wisconsin Appeals
Court recently held.
In 1979, Paul LaBeree sustained severe brain injuries, causing
quadriplegia, while working as an employee of Bowman Plumbing Co. Bowman
conceded liability and paid and continues to pay medical treatment
expenses under the workers compensation statutes.
Because of the injuries, LaBeree requires protective placement under
Wis. Stat. ch. 55, which is designed to place individuals with
“mental illness, degenerative brain disorder, developmental
disabilities, or other like incapacities” under protective
In placing an individual, chapter 55 is designed “to place the
least possible restriction on personal liberty and exercise of
constitutional rights consistent with due process and protection from
abuse, financial exploitation, neglect, and self-neglect.” Wis.
Stat. section 55.001.
Through 2004, LaBeree received institutional care at the Dunn County
Health Care Center, costing Bowman $174 per day. In 2005,
LaBeree’s guardian ad litem proposed a “community
integration plan,” costing $549 per day, so LaBeree could live in
a specially equipped duplex next to his father. The circuit court
approved the plan as “the least restrictive.”
In 2006, LaBeree filed a worker’s compensation claim, alleging
Bowman refused to pay the additional expense associated with
LaBeree’s home-based care.
An administrative law judge for the DWD denied LaBeree’s claim,
finding that LaBeree failed to prove his “transfer from
institutional to home care was reasonable and necessary” under
Wis. Stat. section 102.42(1), which requires an employer to pay an
injured worker’s reasonable and necessary medical treatment
LaBeree petitioned the Labor and Industry Review Commission (LIRC),
which concluded that DWD “possesses authority to determine the
medical necessity of an injured worker’s Wis. Stat. ch. 55
placement,” and agreed that LaBeree “failed to prove the
more expensive home-based care was required.” LaBeree petitioned
the circuit court for review.
The circuit court rejected Bowman’s motion to dismiss, concluding
LIRC “exceeded its authority when it reviewed the reasonableness
and medical necessity of LaBeree’s placement.”
The circuit court held DWD cannot determine the medical necessity of
placement, only the reasonableness and necessity of medical expenses
associated with the placement.
The circuit court remanded the case for further fact-finding on the
reasonableness of medical expenses associated with home care. Bowman
Plumbing appealed the circuit court decision.
Regardless of an individual’s right to be placed in the
“least restrictive environment” under ch. 55, Bowman argued
that “when an individual’s needs are being met in an
institutional setting and he or she cannot show that transfer to a
residential setting is medically necessary, the individual–not the
employer–should be on the hook for the additional cost of
But in LaBeree
v. Labor and Industry Review Commission, 2009AP1628 (Oct. 5,
2010), the district III appeals court upheld the circuit court’s
decision, concluding that DWD’s authority is “limited to
resolving disputes regarding the reasonableness or necessity of
treatment” an employee receives “within a placement, but not
the placement itself.”
“A protectively placed individual whose employer has conceded
liability for worker’s compensation purposes should not have
liberty conditioned on his or her ability to pay for medical
treatment,” the appeals court wrote.
However, the court noted that despite the circuit court’s
decision that home based care was the “least restrictive care
environment under ch. 55” and was “medically
necessary,” the decision “does not relieve LaBeree of his
obligation to show that the expenses associated with his home placement
are medically necessary under Wis. Stat. 102.42(1).”
“On remand, [DWD] may exercise its authority to determine which
expenses associated with LaBeree’s placement are reasonable and
medically necessary, but may not determine the necessity of the
placement itself,” the court explained.
The appeals court also rejected Bowman’s claim that LIRC and the
circuit court lacked jurisdiction to hear LaBeree’s petitions
because the DWD’s administrative law judge dismissed
LaBeree’s claim without prejudice, and the decision did not deny
Under Wis. Stat. section 102.18(3) and 102.23(1)(a), Bowman argued, a
party may only petition [LIRC] or a circuit court for review of
decisions awarding or denying compensation. But the appeals court held
that LIRC’s decision did deny compensation.
Finally, Bowman argued that it was denied procedural due process of law
because the circuit court did not invite Bowman to file a pleading
responsive to LaBeree’s review petition.
“[P]rocedural irregularities in the circuit court do not provide
grounds for reversal, as our primary concern is the agency
decision,” the appeals court concluded.
LaBeree cross-appealed for an appeals court order requiring Bowman to
pay all expenses in the community integration plan approved by the
But the appeals court remanded the case to DWD to “determine
whether the medical expenses associated with LaBeree’s residential
placement are compensable under Wis. Stat. ch. 102.”