State of Minnesota Rehabilitation Review Panel Thurs., Oct. 6, 2005 443 Lafayette Road N. St.

Paul, MN Voting members present Joseph Sweere, DC Dawn Chicilo Michele Cassedy Dennis Ballinger Margaret Kasting Steve Hollander Nonvoting members present Voting members excused John Williams Sue Mauren

Nonvoting members excused William Martin Others present Nancy Caven Robert Otos Marlys Peterson Alissa O’Hara Stefanie Igtanloc Dotti Rottier Kaylene Kickhafer Sharon Olson Julie Leppink Terry Hendrickson Dave Kempson

Staff members Patricia Todd Phil Moosbrugger Nancy Leppink Cindy Miner Jana Williams Jeanne Gehrman Jamie Anderson

Jim Stubbe Don Ostenson Randy Bradley Carol Norris Mike Anderson Julie Hera Deborah Campbell Tom Saby Ray Peterson John Witzke

Call to order Dr. Sweere called the meeting to order at 1:10 p.m. Approval of minutes – April 7, 2005 Dr. Sweere made a motion to approve the April 7, 2005 minutes (July meeting had been canceled). Meg Kasting seconded the motion and the minutes were unanimously approved. Approval of agenda Dr. Sweere asked if there were any changes to the agenda. Patricia Todd, the new assistant commissioner of the Workers’ Compensation Division, indicated Jana Williams would be doing the QRC update prior to the flat-fee-approach discussion. Dr. Sweere noted Julie Leppink, from the Attorney General’s office, would also be addressing the panel prior to the flat-fee agenda item. The agenda was approved with the above changes.

Assistant commissioner's update Patricia Todd introduced herself and indicated she became the new assistant commissioner within the past couple of months. Prior to this job, she received her education in electrical engineering and has her master's degree in business. Has previously worked as a design engineer, manufacture and business manager, and operations manager. She has been with the department for four years as the director of the Minnesota OSHA Compliance program and now has this opportunity in the Workers’ Compensation Division. Some of the reasons she was chosen for this opportunity are because she was able to facilitate a significant amount of changes and improvements within the MNOSHA program. Todd was able to increase their number of inspections by about 60 percent while decreasing the amount of time it took MNOSHA to generate the citations to get information out to the stakeholders by about the same percentage. She also reported there have been two major retirements in the division: Keith Keesling, Customer Assistance, will be retiring in November, and Terry Mueller, Compliance Services, recently retired. These two units have now been combined as the Benefit Management and Resolution (BMR) unit. Posting for a new director will occur shortly. Also, the audit team from Compliance Services will be under Cindy Miner in the Information Processing Center (IPC). Todd wanted to acknowledge publicly the amount of work and effort that Keesling and Mueller have dedicated to the workers’ compensation arena. Dr. Sweere welcomed Todd. Following Todd’s update, members of the panel introduced themselves, as did the guests. QRC update Jana Williams reported she reviewed complaints received in 2004 and 2005. In 2004, the department received 46 professional-conduct complaints. As of now, 42 of them are closed: 23 were unsubstantiated and closed without further action; 17 letters of instruction were completed; one was a stipulated settlement; one was referred to another agency; and four are still open and are at the Attorney General’s office for review. In looking back at the reasons for these complaints in 2004, there was a wide variety. Some of these were failure to display due regard for other professionals, providing false and misleading information, intern supervision and registration, etc. But by far, the majority of them were for filing and reporting problems. In 2005, 88 complaints were received. So far, 31 are closed, 20 were unsubstantiated and 11 letters of instruction were issued. Of these 88 complaints, 55 were filed by the same individual. There are currently 57 that are still open from 2005. Currently, there are 64 active complaints from the various years. In the spring, Rehabilitation Specialist Ed Spitler became very ill; he has not worked since May. We hope to have this position posted and filled soon. In September, the department had its "Rehabilitation Update," with approximately 250 people in attendance. This update will be repeated Oct. 20. With the interest in retraining plans, Williams went through Spitler’s data and reported the following. In 2004, the Department of Labor and Industry (DLI) received 86 retraining plans. Of those 86, 42 were approved or agreed to. Two-thirds of them actually go to Customer Assistance or OAH due

to rehabilitation requests or pending litigation. So far in 2005, DLI received 67 and had 29 approved or agreed to. Dawn Chicilo asked if there have been any appeals filed about QRC registration issues. Jeanne Gehrman indicated there was one appeal filed last July, and there will be another one shortly. They are now with Executive Secretary Chris Beaubien. QRC flat-fee approach Dr. Sweere reported that several weeks ago he received a call about what seems to be a prominent focus of our large number of guests today. Prior to Chicilo’s presentation, the panel has a representative from the Attorney General’s office, Julie Leppink, who will address the panel with some cautionary suggestions and should be informative to today's guests. Leppink had some comments regarding the letters that are before the panel about the flat-fee arrangements. She indicated the panel has two roles. One role is to advise the commissioner regarding QRC issues, to suggest changes in legislation or rules and to provide advice about policy issues. The other role is as a decisionmaker. If there are contested cases involving QRCs and disciplinary actions, the panel is the final decisionmaker after a contested case has been held. Regarding the issues before the panel today, there are two letters regarding the flat-fee arrangement. One letter was sent to the Commissioner with copies to the panel; the other letter was sent directly to the panel with a copy to the commissioner. This is important, because the commissioner’s staff in the department has the role of investigating complaints and taking action where appropriate. Leppink indicated the letters received are public information. One letter was from the law offices of Tom Mottaz, the other was from John Wietzke, MASPR president. Because these letters were also submitted to the department, it’s the department’s responsibility for considering any complaints that are filed and these letters can technically be considered complaints. This is where the caution comes in. As a decisionmaker, in the panel's policy role, taking in information and hearing people's views in the community is a good thing. However, the panel is also the decisionmaker and, on these issues, these may turn into cases that may come before the panel. Leppink cautioned that the panel not go on record taking a specific position on these issues or predeciding them. Chicilo said she received a copy of a letter addressed to the commissioner and wanted to know if that particular letter is available. Leppink was given a copy of this letter and she indicated everything discussed at this meeting is public information and, perhaps, the letter was not distributed because no one would be here to publicly address their issue. Chicilo noted the letter was from Sen. John Marty. Leppink indicated that whether letters go directly to the commissioner or via copy, the commissioner of the department must consider them to determine if they constitute complaints. Dr. Sweere thanked Leppink for clarification of what the panel is facing. Chicilo reported that people in the QRC community know she, as well as Steve Hollander, are involved in the panel, so they started fielding calls about the flat-fee arrangement. This has created a lot of interest; Chicilo contacted Assistant Commissioner Todd to relay the concerns being expressed to her as a panel member and asked if this could be made part of the agenda so the panel can address the concerns QRCs specifically have with regard to this. There is common knowledge of a flat-fee arrangement between a workers’ compensation insurer and some select private rehabilitation providers, which has created quite a stir because of concerns of possible rule

violations. When Chicilo received copies of the three letters, it appeared this issue has “leapfrogged” beyond the Rehabilitation Review Panel to the commissioner to be addressed. Chicilo has been told there are two different fees private rehabilitation providers agreed to in this contract. One is for a return to work with a pre-injury employer that’s going to be a $1,600 flat-fee. A return to work with a new employer is going to be about $2,600. Looking through past information from this group, this seems to be far below what the average rehabilitation costs have been. Average costs have been about $3,500. Concerns being expressed are that this is going to undermine the quality of rehabilitation and, ultimately, have a significant effect on the injured workers. Dr. Sweere asked panel member for questions for Chicilo. Meg Kasting asked if anyone knows how long this arrangement has been in place. Steve Hollander understands this started some time last winter. Chicilo was asked what the average cost for retraining is. She indicated she did not have an answer, but in listening to Williams’ update, it appears the department has access to statistics. Chicilo said her experience shows the amount exceeds $3,500. One of the things the panel has been struggling with the past year is what it is going to do now. It has finished the rules revisions and recommendations. Are there other issues to be addressed and are there other functions this panel can serve? This seems to be an area the commissioner may want to consider using the panel for. Don Ostenson, as a member of the Minnesota Association for Service Providers in the private sector, was asked to address the panel regarding these flat-fee arrangements. These concerns are very serious, because of the impact they have on the services provided to injured workers. It is feared the injured workers won’t get the kind of services the law and rules intend them to have. This interferes with the individual’s rights to those services, because they should be entitled to any of the services QRCs can provide. With a flat-fee cap for finding a job outside of the original employer, a QRC may not have the incentive to put in the extra time to do a retraining plan or an on-the-job plan. There may also be limitations on vocational testing and assessment. These are major problems for the injured workers. There is also concern for QRCs under this contract, which appears to be a situation where they could be in violation of some national ethics standards, either by CRC certification for rehabilitation counselors or CDMS. It is difficult in this situation for a QRC to consider retraining equal to all other possibilities if the fee is capped, because it becomes rather expensive to do the work-up for retraining. There are some rule violations that appear and one of them is that services are to be provided to bring a person to suitable, gainful employment. If there is such a fee arrangement, a person may be returned to a lower level of compensation versus the level they enjoyed prior to the injury. If this occurs as a result of flat-fee because the QRC didn’t have incentive to go beyond, there might be a violation. Also, it seems impaired objectivity may be another possible rule violation. If someone has a contract with an insurance company, the objectivity may be impaired. Fee arrangements that prevent or compromise individual assessment and services for each employee are grounds for disciplinary action. From what Ostenson’s seen from the contract and his knowledge of them, he feels this is a very serious issue for QRCs. By entering into these contracts, QRCs may be jeopardizing their registrations with the department and, possibly, their national certification. There has been talk about what the panel or the department can do to resolve this situation; one of the suggestions Ostenson's group has is to inform the QRC community of the risks they’re taking with their profession and career. If it becomes known they are participating in such an arrangement, which may result in disciplinary

action, QRCs may have concerns. Dr. Sweere asked if there were any questions and said to keep in mind that today the panel is seeking information only. Ray Peterson, an attorney who represents injured workers in the workers' compensation system, has been handling cases for the injured workers for the past 25 years. He is speaking on behalf of himself, his law firm and the clients he has represented throughout the years. One of the things that rehabilitation services have provided that he finds of great value is independent thinking and neutrality on the part of the QRC for the injured workers. With rehabilitation services, injured workers have someone looking after their best interests without direction, specifically from the attorney that represents them or from the insurer that is looking after the interests of the insurance company. The only way QRCs can make it economically is to cut back on their services. As soon as they start to cut back, the person to get hurt is the injured worker. Rumors are running rampant about who’s providing services under these contracts. As soon as it becomes public knowledge about who’s involved in these particular arrangements, there will be complaints filed. Complaints probably haven’t been filed yet, because there hasn’t been any factual determination about who is involved. This is a serious consideration, not only for this panel in terms of the volume of complaints that may come before it, but also for any of those rehabilitation providers that may have inadvertently gotten involved in this without considering the long-term consequences. Dr. Sweere asked if there were others that would like to provide information to the panel. David Kempston spoke on behalf of his law firm, indicating he and Mottaz sent a letter of concern to the panel. He indicated there is a rule that is directly on point for this situation. When you have a rule that is directly on point, you should take a look at it. The rule goes on to provide employees with standardized services whether or not the services are necessary. So, there are two sides to that rule. Kempston’s law firm strongly encourages the panel to start consideration that will require – upfront when a file comes into their office – disclosure about whether the QRCs are providing services under a flat-fee arrangement. If the answer is yes, then the rule discussed indicates there are discipline issues going on. Dr. Sweere thanked everyone for the input about this issue and asked if there were any other concerns about the issue. Kasting asked what the next step would be about this issue. Dr. Sweere said the panel would obviously be somewhat on call. He then noted that the schedule of meeting dates for 2006 was in members’ packets. With regard to this, the commissioner may want access to the panel’s involvement prior to the January meeting, to provide input about whether there is a statutory or rule problem. Leppink indicated that in looking at these letters, they could be considered complaints and the department may have to go through certain steps, including investigations, and then decide to serve a complaint and pursue a contested case. All of this takes time. Another issue the department will face is determining whether these are truly complaints and if they are made against individuals. These are questions the department will decide internally. The other part is if complaints come in against QRCs by name, those would also need to be investigated. These cases could come before the panel, but Leppink doesn’t anticipate this happening before the January meeting. Chicilo asked for direction for she and Steve to field the increasing calls that will come in regarding the flat-fee issue. Leppink said the calls should be directed to Kate Berger, who is

working with these issues. Todd indicated this would depend on the volume of calls and suggested that if there is a specific question, a letter or e-mail message related to the issue may be better. This would allow DLI to answer the specific question if there is one related to this issue. Leppink indicated the letters raise the point that this contact could be construed as a rule violation, but it hasn’t been tested yet. The department will probably take a position in a case, but has not been at that point yet. Hollander stated he is also on MARP and needs to inform its members about potential rule violations. He feels there is an obligation to inform and educate its members about this issue. Leppink cautioned the panel to remain objective about specific cases. Hollander indicated it is the role of the panel to advise the commissioner about policy and rules. Regardless if there are individual rule violations going on among the providers, he thinks the panel needs to have a discussion about this topic. It is an important topic and the people that might be suffering most under a situation like this, are the injured workers. He would like to make sure this stays on the agenda for the next meeting or for an earlier meeting, if needed. Again, Leppink indicated the panel doesn't want to run any risk of prejudging complaints. Following further discussion, Hollander indicated that perhaps this isn’t the time for further discussion, but a lot isn’t being said and people may not be comfortable expressing their feelings in this matter. Kasting would like to hear from the other side and their views, however Todd cautioned this because it could be more like a hearing. Hollander indicated the panel could discuss the flat-fee issue in general at the next meeting and have panel members bring information about whether these arrangements work elsewhere. Chicilo agreed and likes the suggestion that the panel can look at whether some rules and statutes clarify this issue. One of the things that ties into the flat-fee issue is disclosure to an injured worker. Maybe the panel could discuss what the rule states about disclosure. Michele Cassedy stated that it seems there’s still information out there to be heard or that is missing. Kasting also agreed further discussion should be done at the next meeting. Frank Lamp indicated he’s hearing two issues: one is the agreements that may exist out there about the flat-fee and whether that is in violation; the second is, perhaps, the need to state the actual policy as it exists pertaining to services made available to the individual. Lamp’s concern is the injured employee who may be already under this type of arrangement and who may be going to end up in an outcome that, perhaps, is not the best outcome that person should have. Dennis Ballinger indicated a discussion without all panel representatives is not worthwhile. He recommended this be discussed at length at the January meeting. Dr. Sweere indicated the department is being apprised of a potential problem and that it’s in their hands to make a determination about what the rule says. The department may incorporate all of the panel's input or it may choose not to. The panel should be available if summoned by the department. With regard to the membership of the panel, Chicilo stated there are seven vacancies and asked, in light of what may be coming, how these vacancies will be filled. In the event that there are as many vacancies on a panel such as on this panel, do the bylaws indicate the quorum required is fewer than seven because of the existing vacancies? Or does it remain at seven until the vacancies are filled? Dr. Sweere agreed this is an excellent point and believes the panel could face this as an issue. The panel has urged the department to attempt to seek more participation from the community. The AFL/CIO has been contacted and Todd has asked for recommendations for two

individuals in the labor field. She has the names of two people and the department is going through the process of getting them appointed to the panel. Jamie Anderson said the openings go through the Secretary of State’s office, so people will need to apply through that office. The DLI commissioner would then make the appointment. Todd has talked to Dr. Bill Lohman, from the department's staff, to see if he knows any candidates that may be interested in the two open medical positions. He told her that one of the issues in filling the medical openings is that it’s hard for them to attend these meeting during the day. There may be a better chance of filling these if the meeting time is modified, but the panel will first seek individuals for the openings. Dr. Sweere then asked if there were any other items that refer to the flat-fee discussion or any other business the panel would like to discuss. Chicilo mentioned there was uncertainty if the panel had a quorum and if Lamp is an alternate for chiropractic, medical and rehabilitation. Lamp indicated he received a letter saying he’s an alternate. Following discussion about whether an earlier meeting is needed, it was decided that the panel would wait and meet in January. Dr. Sweere indicated that in the past there has been some discussion with regard to the point in which the QRCs might file documents with the paperless system. It seems like most of the complaints deal with reporting documentation. There have been numerous discussions on the filing of documents by QRCs with paperless documentation. Hollander indicated that nothing is being filed electronically, but documents can be faxed. Todd stated she did not have an answer about this, but will look into the matter. Adjournment Kasting made a motion to adjourn the meeting and Dawn seconded the motion. The meeting was adjourned at 2:25 p.m. Respectively submitted by Chris Beaubien