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Department of Labor: wcitf 0904minutes

Department of Labor: wcitf 0904minutes

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Workers' Compensation Insurers' Task ForceSept. 15, 2004MinutesMembers present:
Mary Beth Didion for Mary Abraham;WestfieldDennis Ballinger; Western NationalRobert Farber; BerkleyGreg Jeans; Liberty MutualBob Johnson; Insurance Federation of MNMeg Kasting; State Fund MutualClaire McCoy; GAB RobinsCurt Pronk; Mayo FoundationMike Johns; RTWRob Rangel; BroadspireGary Westman; State of MN, DOER
 Members excused:
Cindy Van Eyll; General CasualtyMary Jo Wilson; City of Mpls.
 Members absent:
Jodie Connor; WausauDavid Oertli; Sedgwick Laurie Simonsen; St. Paul Travelers
 Staff members present:
Kate BergerDebbie CaswellBeth HargartenCindy MinerCindy Valentine
Penny Johnson, OAHRaymond Krause; OAHTammy Lohmann; CommerceLynn Miller; RTWCo-chairman Rob Rangel called the meeting to order at 9:12 a.m. Task-force members andvisitors introduced themselves. The minutes from the Dec. 17, 2003, and May 19, 2004, meetingswere accepted as presented. The agenda was approved as presented. There were no announcements.
6) Assistant commissioner's update
Assistant Commissioner Beth Hargarten noted the next Workers' Compensation AdvisoryCouncil (WCAC) meeting is scheduled for Oct. 13, 2004. They may begin legislative discussions atthat meeting about where they might want go with a legislative package during the coming session.She informed task-force members there is a proposal regarding the Workers' CompensationReinsurance Association (WCRA) on the agenda for the October meeting. It was introduced at theLegislature last session and proposes to move oversight of WCRA to the Department of Commerce.That bill was heard in a committee last year, but was not voted on. The committee chairperson askedthat the WCAC look at WCRA, how it operates and how it is structured. Hargarten noted theReinsurance Association of America (RAA) came to the WCAC Aug. 11, 2004, and outlined howthey think reinsurance should be changed in Minnesota. The WCRA will make its presentation abouthow they operate and how they see reinsurance in Minnesota at the October meeting.
Workers' Compensation Insurers' Task Force -2- September 15, 2004Minutes
Hargarten said Kate Berger would hand out preliminary draft rules and discuss proposedrules the agency has started to go forward with. They are changes in the managed care and pharmacyreimbursement area along the lines of what was discussed and put in the WCAC bill last legislativesession.Hargarten announced the conversion factor would increase again this year on Oct. 1, by theproducer price index – physicians' offices (PPIP), which is approximately 1.5 percent. It has beenapproved by the Office of Administrative Hearings (OAH). The adjustment for rehabilitation fees is2 percent again this year, as it has been for several years. It will be effective Oct. 1. The qualifiedrehabilitation consultant (QRC) hourly fee maximum will be $83.77. The maximum hourly rate for job development and placement services will be increasing to $64.33. That is a 2 percent increase.
7) Administrative changes at OAH
Hargarten noted Mary Jo Wilson asked that we have a discussion about some changes thatare going on at OAH. Raymond Krause, the chief administrative law judge at OAH, was introducedto talk about the changes at OAH.Krause noted they have made structural changes at OAH. He began at OAH in February, asthe chief judge, and started a process, working with the judges and the staff to re-examine theirstructure and processes to insure OAH is delivering the services it is designed to deliver in asefficient a way as possible after the budget cuts and staff reductions they have encountered in the pastfew years. They are adjusting to varying workloads in the workers' compensation area and otherareas as well. They wanted to emphasize the settlement function in a much more direct andconcentrated way. To that end, they are going back to a system where judges are in one division orthe other. While the term for being in the settlement division is 18 months, it is not a permanentassignment. It is an "exclusive" assignment, meaning all those judges do is settlements for that 18-month stint. Those judges have the option of rotating back into the hearing division after their 18-month stint. Krause suspected some people will stay in the settlement division, because that is whatthey enjoy and do well. The judges view this as an opportunity that allows people to focus onsettlement. Krause served on the Minnesota Tax Court before coming to OAH and, by way of comparison, the Department of Revenue has the function OAH has for workers' compensation.Without a strong settlement division over at Revenue, the Tax Court could not hear all the cases thatwould occur. He is a strong believer in a professional and focused settlement division. They felt thatby not being pulled back and forth between the settlement and hearing divisions, judges could focusmore on the division they are in. This also allows them to set up performance measures. The judgesare interested in the performance measures, but it was difficult to do when going back and forthbetween two types of operations. They can now set goals for the settlement judges and work towardthose goalsKrause noted this method also removes a concern the judges have about having people rotateon a daily basis between settlement and hearing. How active of a settlement judge can you be whenthat case you are trying to get settled may end up before you in a hearing? The judges, rightfully inKrause's opinion, are uncomfortable with pushing for a settlement and then when that does not work and that case comes before you for a hearing, you may be viewed as prejudiced for having gonethrough the settlement process. This would pretty much eliminate that from happening. That is themajor change.
Workers' Compensation Insurers' Task Force -3- September 15, 2004Minutes
Krause said they have tried to change the scheduling system so the judges have moreinfluence on how things get scheduled. With the system they were using, it was hard to block-assigna case, so that when a judge was assigned a case they would have everything from the firstprehearing and all the way through. They thought it would be more efficient and would cut down onthe number of continuances and on the number of misunderstandings when a case bounces from one judge to another before it actually gets to a hearing. They are now block-assigning cases, so as soonas it is certified to the hearing division, cases are assigned to a judge and all of the prehearings andthe continuances stay with that judge; there is no incentive for an "ugly" case to be continued andhope another judge gets it. The incentive is to face it straight up, deal with it and move it through thesystem more quickly. Hopefully, this will not affect the practice before them in any significant wayand their customers will not notice any changes. These are internal structural things that will allowthem to deliver the service more efficiently and keep the process moving at a pace that gets thesecases heard in a timely way throughout the system.Meg Kasting asked it they had actually made the divisions yet. Krause said, because theircases are set so far out, they are still working through the cases that had already been set. They knowwho is going to be in which division, but that will not happen until November, so they can work through the cases the judges who are going into the settlement area already have on their calendar.Kasting asked if there would be an announcement in November about which judges are in eachdivision. Krause said they could and noted there would be five full-time judges in the settlementdivision, which is one more than they currently have doing settlements now. He believes the better job they do with settlement, the faster and more positive the resolution of cases will be. Also, it ismore time-consuming for cases to go through the hearing division, so they will focus on settlementand only do those cases in hearings that really require a hearing and cannot be settled.Rangel asked Krause what his goal was on the timeframe for hearings by November. Krausesaid they set their cases in the settlement division about five to six months out, because of thestatutory time allowed for getting the IME in and cases are just not ready to be discussed seriouslybefore that. If they do try to push it earlier, they end up resetting the cases. If a case goes throughsettlement and the parties decide no settlement is possible and it gets certified to the hearing, they arewilling at any point to have it go back to settlement or the mediation department there, or elsewhereif that is what the parties want to do, if something changes and the parties decide to take anothercrack at settling the case. Being certified to the hearing division does not mean that is your onlyoption. They are still happy to work out a settlement. After a case gets certified, their goal is to havecases set for their first hearing in no more than six months. It takes that long to get the depositionsand medicals, etc. It has not been practical to do it sooner than that and, in their experience, they endup getting resets all of the time if they push it sooner than six months. He noted, with theircompliment of judges reduced by six, that is practically as much as they can get. If you put the twotogether, you will have 13 months or so, from the time the claim is filed until the case goes tohearing. That is where they have been running and they hope to continue to do that and, where theycan, improve upon that. To give some perspective, Krause noted three to four years ago, it was 16 to18 months before you got to a hearing. They have been able to get that down to 12 to 13 monthsstatewide in the past two or three years. Doing that is not only a nice accomplishment, in Krause'sopinion, but is fairly remarkable with the budget, staff and judge cuts. They have actually improvedthe time to hearing period with six fewer judges than they were doing 16 to 18 months ago.Rangel asked how many hearing judges we currently have. Krause said there were 24 andthat includes the five they have in settlements.

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