443 Lafayette Road N. St. Paul, Minnesota 55155 www.doli.state.mn.


(651) 284-5000 1-800-DIAL-DLI TTY: (651) 297-4198

Workers' Compensation Advisory Council Feb. 28, 2007 minutes
Voting members Don Gerdesmeier Mike Hickey Glen Johnson David Olson Susan Olson Reed Pollack Gary Thaden Andrea Trimble-Hart Ray Waldron Voting members excused Stan Daniels Voting members absent Wayne Ellefson Julie Schnell Nonvoting members Representative Bob Gunther Representative Mike Nelson Nonvoting members absent Senator Tom Bakk Senator Geoff Michel Staff Scott Brener Debbie Caswell Penny Grev Patricia Todd Visitors Charles Burhan; Liberty Mutual Tom Hesse; MN Chamber Nancy Larson; MARP Brad Lehto; Matthew Lemke; Winthrop & Weinstein Bob Lund; State Fund Mutual Andy Morrison; Koll-Morrison Robert Otos; The Alaris Group Pete Thrane; Leonard, Street & Deinard Jennifer Trone; Liberty Mutual David Sullivan; House DFL Mike Wilde; Local 49 Kelly Wolfe; Leonard, Street & Deinard

Commissioner Scott Brener called the meeting to order at 10:14 a.m. Roll was called. There was no quorum for the employee representatives. Brener made a presentation about a medical cost containment proposal from the Department of Labor and Industry (DLI) and a handout was distributed. The presentation provided background information about health care reform issues and focused on ambulatory surgery centers and service fees. Brener noted that injury rates are declining, but system costs have been increasing since 2000. Medical benefits now cost more than wage benefits. Similar injuries cost more in the workers' compensation system than in general health.

This information can be provided to you in alternative formats (Braille, large print or audio tape). An Equal Opportunity Employer

Workers' Compensation Advisory Council Minutes


February 28, 2007

There are four medical cost drivers. 1) 2) 3) 4) Eroding coverage of the fee schedule. Increasing costs of hospital services. Increasing facility fees at ambulatory surgery centers. High cost of surgical implants and orthotics.

The PowerPoint version of the Medical Cost Containment Proposal is available online at www.doli.state.mn.us/pdf/costcontainment0207.pdf. Olson asked if the big fear was that there would be access problems if they reduced costs. Waldron confirmed that it was. Brener clarified that the fear was that you paid someone so little that they refused to take the client. Based upon data from the department and what he has seen in other jurisdictions, these are healthy allowances. It represents what health care providers are already getting in general health, including a profit, plus 15 percent. On the inpatient side, he could not justify the differential. The outpatient side is different and he could understand a higher cost because you are tying in vocational rehabilitation and other administrative elements associated with workers' compensation that are different than general health. The council discussed the possibility of access problems. Gerdesmeier said there have been times when providers came up with a new payment schedule and the hospital said they would not take those patients, but they usually get worked out quickly. Olson noted we would hear if anyone was having access problems and Brener said, if it was problematic, the WCAC has the discretion to change it. He is premising this off of what they know private sector is paying for general health in Minnesota. Brener stated that he would meet with David Olson and Ray Waldron early next week. He reminded everyone that the next Workers' Compensation Advisory Council (WCAC) meeting would be at the AFL-CIO headquarters on Wed., March 7, 2007, at 9:30 a.m. A handout was provided about the QRC legislative proposal, with their original proposal and a revised proposal from DLI that provides that the commissioner may annually adjust the current maximum hourly fee of $86.33 by an amount "up to the percentage change in the statewide average weekly wage." The Minnesota Association of Rehabilitation Providers (MARP) is considering Brener's proposal. A summary of DLI's housekeeping proposals was distributed for consideration by the WCAC. Waldron asked if we have heard from the hospitals about the presentation. Brener responded he had not and emphasized that their focus should be what is best for the employees and employers in workers' compensation. Brener noted the WCAC saw the Minnesota Nurses Association legislation regarding patient lifts to prevent ergonomics injuries, which proposed taking money from the department's workers' compensation Special Compensation Fund. Brener did not support this legislation.

Workers' Compensation Advisory Council Minutes


February 28, 2007

There was new language, as of that morning, that asked that an appropriation from the General Fund be sent to the commissioner of DLI to offset the purchase of patient lifts. Therefore, the proposal is no longer a change to Minnesota Statutes §176 and it was off the table for the WCAC. The Legislature would decide if it wants General Fund money sent to DLI for that reason. Olson noted two other workers' compensation bills were introduced recently and asked if the authors planned to bring them before the WCAC. Brener said he understood that Sen. Ron Latz had both of them on the senate side. One alters the composition of the WCAC. The other one basically repeals the 1995 indemnity benefit levels. Waldron said they have not seen those bills other than the information that was brought to the WCAC at the most recent meeting. Olson said the WCAC should ask Sen. Latz if he is interested in bringing his proposal to this body and Waldron agreed to invite him to the meeting on March 7, 2007. Olson made a motion to adjourn the meeting. Gary Thaden seconded the motion. The meeting was adjourned at 11:15 a.m. Respectfully submitted,

Debbie Caswell Executive Secretary dc/s