Workers' Compensation Advisory Council Feb.

9, 2005 minutes
Voting members: Paul Bailey Susan Olson for James Cavanaugh Stan Daniels Wayne Ellefson Mike Hickey Glen Johnson Tom Hesse for David Olson Andrea Trimble Hart for Brad Robinson Julie Schnell Ray Waldron Voting members excused: Reed Pollack Gary Thaden Non-voting members excused: Senator Tom Bakk Representative Joe Mullery Non-voting members absent: Representative Dan Dorman Senator Geoff Michel Staff members: Jamie Anderson Scott Brener Debbie Caswell Jim Feckey Ralph Hapness Beth Hargarten Keith Keesling Cindy Miner Phil Moosbrugger Terry Mueller Jana Williams Visitors: Mike Ahern; MIGA Craig Anderson; MWCIA David S. Clark; Western National Colleen Colburn; MCA Greg Coon Carol Dexter John Diehl; Larkin , Hoffman - ND Don Gerdesmeier; I.B.T Judith Hawley; MN Chapter - APTA Brian Hicks; MAPS Cleo Issendorf; North Memorial Mike Johns; RTW Todd Johnson; WCRA Tammy Lohmann; Commerce Bob Lund; State Fund Mutual Bert McKasey; Lindquist & Venuum Louise Montague; MOTA/Ergo Results Tom Mottaz; MTLA Andy Morrison; Koll, Morrison John Nesse; CCA Steve Novak; Palmer & Cay Laura Offerdahl; League of MN Cities Mark Pixler; MAPS Dorothy Quick; Columbia Park Med. Group Scott Sexton; Corvel Lee Spelbrink; Commerce Nora Stewart; Lockridge Anna Thompson; Allina Deneace Tucek; Health South Bev Turner; St. Paul Travelers Mike Wilde; Operating Eng, Local 49 Dan Wolfe; APTA Barb Woods; Injured Workers' Pharmacy

The meeting was called to order at 9:37 a.m. by Commissioner Scott Brener. Roll was called. A quorum was present.

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Susan Olson made a motion to approve the Nov. 16 and Dec. 8, 2004 minutes. Ray Waldron seconded the motion. All voted in favor of the motion. The agenda was approved as presented. IV. B. Legislative proposals Brener noted there has been further discussion about several issues in the 2005 legislative proposal during the past couple of months. He asked for a motion to reconsider the bill that was developed in December 2004. Waldron made a motion to reconsider the December bill. Glen Johnson seconded the motion. All voted in favor of the motion and it passed. Brener said he understood there were three remaining issues of principle concern before the Workers' Compensation Advisory Council (WCAC). The first piece is treatment parameters; there seemed to be some disagreement about what should be done with that issue, moving forward. There was an issue relating to the Minnesota Insurance Guaranty Association (MIGA) that they spoke to earlier and, finally, there was a process issue regarding the medical administrative conference limits of $1,500 and less. Brener asked for comments about the treatment parameter piece. Waldron noted they disagreed about treatment parameters now, but he would like to see it moved to future agenda items so they could review it more and maybe come back with a recommendation later. Brener said the MIGA issue is regarding claim liability due to legislation passed back in 2003. The question becomes who has responsibility for some of these claims that were once the responsibility of MIGA. They have been working on this issue for some time and believe they have found agreement with the Department of Commerce and MIGA about how to handle those claims. As Brener understood it, there were some technical issues with respect to some draft language that DLI proposed that relates to the Self Insurers Security Fund (SISF) that Andrew Morrison would speak to. There was also an issue to the effective date of what claims will come under the protection of this new language. A copy of the draft language was distributed. Morrison said he was the general counsel of a statutorily created entity called the Self Insurers' Security Fund. The SISF is sort of a compliment to MIGA, because SISF steps in to make sure injured employees get paid if a self-insured company defaults on its workers' compensation claims and the company goes bankrupt. Morrison noted they have a rather diverse board with members from DLI, Bernie Brommer from the labor side of the table and Wayne Simoneau serving on their board. Morrison said they are concerned because they have an entire chapter of law that defines what a self-insured employer is for workers' compensation and what it is not. They are concerned that if you create a new class of self-insured employer that is not defined in the other statute that means you have two classes of self-insured employers. One of the big problems they have is in federal bankruptcy court with federal bankruptcy trustees and bankruptcy judges that are looking to SISF as a payer of claims in workers' compensation. Morrison said he is not an expert in bankruptcy. They retain a bankruptcy expert in the fund, but he has not had a chance to run this statute by their expert, so he did not have that person's

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comments about this. Their concern is if we inadvertently define someone as self-insured it may have much broader consequences than are intended. Morrison said the basic concept was fine and they had no objection. He said the statute in workers' compensation states that – ultimately – the employer, self-insured or insured, is responsible in some way. Their concern is with the definition and they are willing to work with DLI and MIGA to further refine these definitional issues. Hargarten pointed out there was language in the proposal that indicates that if these employers, after they start paying workers' compensation claims, end up going bankrupt, that the responsibility should fall to MIGA, not SISF. She asked if that language did not provide him with any comfort. Morrison said it did and that is why he said they agree with the general concept. There are a lot of details and Morrison said he is not an expert in bankruptcy and he needs to have his consultant look at this language. They do not want to open doors that should be closed, because they have defined it so well in their law and do not want anything in Chapter 176 to undo what they did in their statute. Brener said he knew that MIGA has an issue with the retroactivity aspects of this language. He said they are "in the same mind" about this issue. The intent is the same, so if a drafting issue needs to be clarified, they will further clarify the fact that this language is intended to be retroactive to those claims affecting current status. With respect to the scope issue that Morrison spoke about, DLI is also of the same mind and is trying to limit this purely to purposes in Chapter 176. He suggested, because it was almost mid-February, that they go ahead and fold this into the WCAC bill with the understanding there are two drafting elements they need to further work with parties on. Brener said the issue of medical disputes of $1,500 and less has been administratively difficult to deal with. He believed there was some general understanding that those limits should be changed and bumped up to $7,500, which would help clarify the administration of those claims. It would not preclude the rights anyone has now; it would just make life easier from an administrative perspective. Brener suggested a motion to include in the bill that passed out of the WCAC in December, minus the treatment parameter language, but also to include some MIGA language and the $1,500 and less dispute piece moved up to $7,500. That would wrap up the WCAC bill for this session. A handout listing agreements reached by the WCAC at the Dec. 8, 2004, meeting was included in members' packets. Stan Daniels asked about number five, about pharmacy networks. He said he had been doing some research and had letters from people about billing directly to the pharmacy and they talked about that before. He asked Hargarten whether that was in the rules, but not in statute, that it is required by law they do not have to pay the pharmacy. Hargarten confirmed it was in the rules. Daniels said they have a lot of people that have to pay and then get reimbursed. He did not want to make a battle for that now, but he wanted to forewarn everyone that they will be working toward some language they can put in that says these pharmacy networks must bill direct and to find some way to educate the injured workers, because there are a lot of injured workers who have to go to the pharmacies, pay out of their own pocket and then try to get reimbursed, even though it is in the law that they do not have to do that. Brener said they would support him on something like that.

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Johnson made a motion to include in the bill, which passed out of the WCAC in December, some MIGA language and the $1,500 and less dispute piece moved up to $7,500, minus the treatment parameter language. Tom Hesse seconded the motion. All voted in favor of the motion and it passed. Brener said they had what he considered to be a complete product, with the disclaimer that they still have to work through some drafting technical issues with respect to the MIGA piece. Waldron made a motion to adjourn at 9:50 a.m. Johnson seconded the motion. All voted in favor of the motion and it passed. Respectfully submitted, Debbie Caswell Executive Secretary dc/s