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Workers' Compensation Advisory Council Feb. 14, 2007 minutes
Staff Voting members Susan Olson for Jim Cavanaugh Stan Daniels Wayne Ellefson Ed Reynoso for Don Gerdesmeier Mike Hickey Glen Johnson David Olson Gary Thaden Andrea Trimble-Hart Ray Waldron Voting members excused Voting members absent Reed Pollack Julie Schnell Nonvoting members Representative Bob Gunther Representative Mike Nelson Nonvoting members excused Senator Tom Bakk Senator Geoff Michel Scott Brener Dave Brown Debbie Caswell Jim Collins Patricia Todd Dee Torgerson Cindy Valentine Jana Williams

Visitors Kevin Gregerson Pat Grove; MCIT Dan Hawkins; Target Corp. Tom Hesse; MN Chamber Brian Hicks; MAPS Steve Hollander; MARP Todd Johnson; WCRA Brad Lehto; MN AFL-CIO Nancy Larson, MARP Tammy Lohman; Commerce Bob Lund; State Fund Mutual Louise Montague; MOTA Andy Morrison; Koll-Morrison Carrie Mortrud; MN Nurses Assn Rob Otis; Alaris/MARP Dorothy Quick; Columbia Park Medical Group Jim Searls; Searls & Assoc. Scott Sexton; Corvel Elizabeth Shogren; MN Nurses Assn. David Sullivan; House DFL Peter Thrane; MSIA Dan Wolfe; APTA Kelly Wolfe; Leonard, Street& Deinard David Wulff; MTLA

Commissioner Scott Brener called the meeting to order at 9:45 a.m. The agenda was amended to add a proposal from Kevin Gregerson regarding workers' compensation costs for hospitals with fewer than 100 beds. Brener welcomed Rep. Bob Gunther back to the Workers' Compensation Advisory Council. He noted Gunther was able to work with both sides of the aisle and the constituency base to make things happen. Glen Johnson made a motion to approve the minutes from the Dec. 13, 2006, meeting as presented. Gary Thaden seconded the motion. All voted in favor of the motion and it passed.
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V. Agenda items B. Legislative proposals Carrie Mortrud presented a draft legislative proposal from the Minnesota Nurses Association to help health care providers purchase patient lifts. According to Mortrud, health care providers rank high with workers' compensation claims from injuries and days away from work from injuries that occur while lifting patients. Also, patients are at-risk when lifted without a mechanical device. Elizabeth Shogren from the Minnesota Nurses Association noted that preventing an injury is the best solution. This bill asks for an appropriation from the workers' compensation Special Compensation Fund and calls for a study to look at workers' compensation premium reduction to provide incentives for the purchase of equipment. Brener noted he has placed some emphasis on nursing homes as commissioner. About 13 percent of the monies out of the safety grant program were targeted toward the health care industry and the majority was spent on patient lifts. He personally drafted and implemented an OSHA program to target ergonomic improvements in this industry. Discussion occurred about where the money would come from to purchase patient lifts and engineering controls. Brener noted more than $20 million would be needed if the maximum grant award were increased to $40,000 for the acute care hospitals and nursing homes in Minnesota. Passage of this language would result in an assessment increase. Because of his fiduciary responsibilities for this fund, Brener expressed concern. Instead, he suggested a program similar to the one implemented 15 years ago in the logging industry, which suffered high workers' compensation rates because it is a dangerous industry. The Department of Labor and Industry (DLI) created the Log Safe program, which is a highly successful program that assesses each cord of lumber and pools the money annually to offset costs for workers' compensation premium rates, safety improvements and training. Brener expressed a willingness to talk and would like to look at modeling a program after the Log Safe program and to brainstorm with OSHA. Brener will keep this issue on the table and work with the MNA as the WCAC bill goes forward and said he would work with them regarding the study. Thaden noted every economic group would ask for this too and Brener agreed. Gunther expressed concern about health care facilities in rural areas that are in the red. To come up with money to prevent injures would be a big stretch. Thaden understood the problem but said this was not the way to fix it. Gunther suggested exploring a cost share program. David Olson noted this bill covers several chapters but the WCAC only has jurisdiction over Chapter 176. He also expressed concern about the Special Compensation Fund being short of funds and said they should be careful when assigning more costs. Brener noted that fund is reassessed annually to maintain fiscal balance and they are not short but are not overly surplused. Brener asked everyone to sit down for further conversations including OSHA. The compliance and financial perspective issues need to be studied. The MNA could then take the issue back to their membership and let him know.

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QRC proposal Steve Hollander, a qualified rehabilitation consultant (QRC) and small-business owner, made a presentation on behalf of the Minnesota Association of Rehabilitation Providers (MARP), the largest rehabilitation group in the state. The cap on QRC fees that was put in place in 1993 is still there. This proposal provides QRCs with a one-time increase in wages and a higher cost of living increase. A graph in the handout provided shows what has happened to QRC fees since 1993. It shows what the fee increase would have been if the COLA had been based on the consumer price index or the statewide average weekly wage (SAWW). The legislation proposes a change tied to Minnesota Statutes §176.645 to change the hourly fee to $93.42 an hour and, after 2007, there would be an annual increase adjusted per the SAWW. Mike Hickey asked for information about what the costs to the system would be, three or four years down the road. Mike Nelson pointed out that the $85 an hour goes to expenses for the business, not just salary in the QRC's pocket. Brener said discussions would continue. He is concerned about an automatic COLA tied to the SAWW. Workers' compensation hospital costs Kevin Gregerson, director of the workers' compensation programs for Union Construction Workers' Compensation Program (UCWCP), spoke about the inequities in the charges for services for workers' compensation injuries and other health care services. There is a significant increase between what is paid for workers' compensation and a personal health plan. In hospitals with fewer than 100 beds, they are paying 100 percent of usual and customary, and no other payment system pays that. They expressed support for legislation that would not allow a different method for computing charges in large hospitals and those with fewer than 100 beds for services provided to their members. Brener expressed strong agreement. In the interest of full disclosure, Thaden reported he is on the board for the UCWCP. Stan Daniels expressed concern that if hospitals in rural areas were not compensated at 100 percent, there would be doctors who are not willing to care for workers' compensation patients and they would send them to the big hospitals. Brener agreed to put the hospital charge issue on the table with the other WCAC bill issues and report back to the WCAC.

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WCAC legislative proposal Waldron reported they have talked about Gregerson's issues. No decisions have been made, but they are getting there. Olson said there is a proposal on the table that has some benefit increases and some cost containment ideas and they still hope to reach some agreement on that. Patricia Todd outlined four DLI housekeeping issues for the pool of thought: 1) an out-of-date statutory requirement from 1943 should be removed; 2) the MIGA definition of a covered claim has a loophole that might mean an employee would not receive coverage; 3) add language to allow DLI to receive data for the data-driven system; and 4) add language to allow for the use of an employee I.D. number, as well as use the SSN in a way that others are less able to use the SSN. Daniels asked for a handout about the language and Todd agreed. Hickey asked for a brief narrative. Data-driven Workers' Compensation System Project update Cindy Valentine, DLI chief information officer, reported that in 1995, DLI implemented a document imaging system that has been a success, but that system relies on workers' compensation business and regulation happening on forms. The forms are imaged and DLI staff members use those images in their work. The commissioner challenged DLI to move from a forms-driven to a data-driven system. DLI currently does some electronic data interchange (EDI) for First Report of Injury forms with insurers and has a Web-based First Report of Injury form. EDI has been somewhat successful. The goal of the data-driven project is to increase the number of things DLI can do electronically with its stakeholders and increase the number of stakeholders that have an opportunity to interact with DLI electronically. The department would also like to drive business processes and activities via data instead of forms. In Fall 2006, a contract was executed with a consulting firm to help DLI develop a technical standards document to identify the changes that would need to be made to DLI's existing systems to move from a forms-based process to a data-driven process. The consultant will also help assess the impact of these changes on DLI's customers, the employees, employers, insurers, QRCs, attorneys, etc. This contract is up in the spring of this year and DLI expects to have a report at that time. Valentine reported the project has been managed between the Workers' Compensation Division and the Information Technology Services (ITS) unit. She is the project manager for ITS; Jana Williams is the project manager on the workers' compensation end. There is an internal steering committee of management from both areas, as well as an external advisory group that includes insurers, attorneys, QRCs, and representatives from OAH and the Workers' Compensation Court of Appeals. One of their subprojects is looking at an alternative to the use of the SSN. A budget initiative was requested premised on the idea that DLI's customers would be more interested in working with DLI electronically if they would be able to see certain information about claims on a secure Web site. The department requested $200,000 in one-time money for hardware and software services and $90,000 in ongoing money for software maintenance, authentication services and one additional staff person.

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Ellefson asked if there would be a cost benefit. Brener responded there was no formal cost-analysis yet, but he expects it to be a favorable cost benefit because they will not have as many people handling paper. Brener announced DLI has an omnibus department bill in this legislative cycle to clarify all of the department's data privacy laws so DLI will know what it can and cannot release, to avoid lawsuits. David Brown, an injured worker who worked as a machinist out of UAW 683, asked to speak about raising benefits for injured workers and the cost of living increases so he could get closer to his date of injury wage. He was frustrated with injured workers not being able to get to the WCAC to give input and asked whether injured workers were on the WCAC to represent injured workers. Brener informed him half the people on the WCAC speak for injured workers. Daniels noted the WCAC does have representatives for injured workers including the 49ers, the autoworkers and the Teamsters on the labor side of the WCAC, and they do have injured workers come forward with their issues. Brener understood Brown's frustration and said the department was always open to handle claims. He suggested Brown contact Todd for help with issues with insurers about denials and health care providers. Brener suggested Brown talk to employee representatives on the WCAC, so they could speak for him. He noted the WCAC is open to input and conducted three outreach meetings this year to gather comments. These WCAC meetings are public, so that the process may be observed. Brener noted there were benefit issues on the table at this time. Daniels stated there are three bills being drafted at the Legislature now and asked that they be considered: • • • a bill that requires attorney fees would not come out of the injured worker's back pay when a claim is denied and then later accepted; cover medical insurance for injured workers and their families; and revamp how the WCAC is structured and how it works. This proposal is at the revisor's office.

Another bill addresses the repeal of the limitation on temporary total disability benefits, the cost of living, increased the maximum compensation rate and ties it to the SAWW, repeal training notice, time limits, etc. Brener stated all of the proposals, as introduced, at the Legislature would be added to the issues to be reviewed by the WCAC. Daniels told the bill sponsors in the House to come before the WCAC, but if there were no meeting available it would go through the legislators. Olson asked if there was a reason Daniels did not come forward with the bills today. Daniels responded that they were not back from the revisor's office yet. Employer members expressed frustration that at least the concepts for the bills were not brought to the WCAC, in writing, so that it would know what the issues were and could have a discussion Olson announced the employer's side of the table plans to continue to try to reach a conclusion through the advisory council and expressed hope the employee side had the same intentions. Waldron acknowledged it was. Brener agreed it was the wish of DLI, as well as this administration.

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Discussion occurred about setting extra meetings. John Rajkowski, DLI's legislative liaison, noted March 23, 2007, is the first bill deadline at the Legislature. Nelson clarified that even though March 23 is the first deadline in the House, the WCAC bill could still go to the rules committee for discussion and could be brought forward. Waldron asked the full advisory council to meet and come to an understanding about the difference in charges at hospitals with 99 beds and then have a follow-up meeting to finalize the proposal. Waldron made a motion to add two meetings by March 7, 2007. Olson seconded the motion. All voted in favor of the motion. Daniels made a motion to adjourn the meeting at 11:09 a.m. Olson seconded the motion. All voted in favor of the motion. Respectfully submitted,

Debbie Caswell dc/s