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Workers' Compensation Advisory Council Oct. 11, 2006 minutes
Voting members: Wayne Ellefson Don Gerdesmeier Mike Wild for Glen Johnson David Olson Reed Pollack Andrea Trimble-Hart for Brad Robinson Brad Lehto for Ray Waldron Voting members excused: Mike Hickey James Cavanaugh Gary Thaden Voting members absent: Stan Daniels Julie Schnell Nonvoting members: Sen. Tom Bakk Nonvoting members absent: Denny McNamara Sen. Geoff Michel Rep. Mike Nelson DLI staff members: Kate Berger Scott Brener Debbie Caswell Patricia Todd Visitors: Craig Anderson; MWCIA Debra Anger; LMCIT Amber Backhaus; MSIA Karen Clayton Ebert;MCIT Ken Gildow; RTW Laura Harris; LMC David Hawkins; Target Corp. Tom Hesse: Minnesota Chamber Brian Hicks; MAPS Todd Johnson; WCRA David Kunz; MN Chiropractic Assn Tammy Lohman; Commerce Bob Lund; SFM Andy Morrison; Koll, Morrison John Nesse; Association Offices Sara Noznesky; MMA Gary Pelletier; MAPS Linda Sandvig; Allina Katy Sen; MN House of Rep Staff Scott Sexton; Corvel Bev Turner; St. Paul Companies David Wulff; MTLA

The meeting was called to order at 9:42 a.m. by Commissioner Scott Brener, serving as chairperson. Roll was called and a quorum was not present. Brener focused on the conversations held on the Workers' Compensation Advisory Council (WCAC) road trips in Brainerd, Mankato and St. Paul. He reviewed a summary about benefits, litigation, medical and general issues. A copy of that summary is included in these minutes.

Workers' Compensation Advisory Council Minutes

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October 11, 2006

Preliminary Workers’ Compensation Advisory Council Public Meeting Cumulative Summary

GLOBAL ISSUE BENEFITS

CONCERNS/COMMENTS 1. Wage-loss benefits are not high enough or long enough. • TTD benefit duration should not end at 104 weeks or MMI. Extend the time to file a request for retraining beyond 156 weeks. 66 2/3 percent is not enough.

SUMMARY OF CURRENT LAW AND PRACTICES1 TTD benefits end 90 days after MMI, or after 104 weeks of paid TTD, whichever comes first. (In addition to other reasons in law.) A request for retraining must be filed with the commissioner before 156 weeks of any combination of TTD or TPD have been paid. The time is extended if notice is not timely given. A penalty is payable for the insurer’s failure to provide the notice. Compensation is 66 2/3 percnent of the weekly wage at the time of injury (not taxable). For injuries on or after Oct. 1, 2000, the max comp rate is $750 a week; the minimum is the lower of $130 a week or the actual weekly wage. Wage-loss benefits are annually adjusted by the increase in the statewide average weekly wage, with various limitations depending on the date of injury. (Benefits may be adjusted above the maximum comp rate.) For injuries on or after Oct. 1, 1995, the maximum adjustment is 2 percent, deferred until the fourth anniversary of the date of injury. • •

THEORETICAL SOLUTIONS
For discussion purposes only

Extend the duration of wage-loss benefits. Start a request period at MMI instead of date of injury. Or, extend the time to request retraining to 156 weeks after the injury, or 90 days after MMI, whichever is later.

Revise the percentage or maximum compensation rate. • Modify the maximum adjustment percentage or deferral period.

2. Cost of living adjustments are not adequate; they should be more reflective of general cost-of-living increases, especially long term.

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This is only a broad overview of some of the highlights of the applicable law and DLI practices. The actual laws and practices are more specific and complex.

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October 11, 2006

GLOBAL ISSUE

CONCERNS/COMMENTS 3. Other employment benefits are lost in the workers' compensation system. • Provide incentives for an employer to continue employee benefits. • Continue health coverage for injured workers. Address lost retirement benefits not accrued during workers' compensation claim, i.e., Alaska's system.

SUMMARY OF CURRENT LAW AND PRACTICES1 The workers’ compensation law does not require an employer to continue group health coverage or continue contributing to a pension or retirement plan after an injury. However, the Family and Medical Leave Act requires employers with 50 or more employees to continue existing health coverage at no additional cost for an employee with a serious health condition for 12 weeks under certain circumstances. COBRA law provides for continuation of group health coverage for a disabled employee after employment is terminated, as long as the employee pays the premium.2 Alaska law (AS) 23.30.396 provides that contributions made by an employer to a qualified pension or profit-sharing plan during two years before the injury, multiplied by the percentage of employee’s vested interest shall be included in the determination of gross earnings. • •

THEORETICAL SOLUTIONS
For discussion purposes only

Consider incentives for an employer to continue employee benefits. Continue general health insurance coverage until MMI or include the value in calculating the pre-injury weekly wage. Continue the employer’s contribution to retirement benefits until MMI or include the value in calculating the pre-injury weekly wage.

Under federal law (applicable to employers with at least 20 employees) an employee who becomes disabled while employed can continue coverage for 29 months. Under Minnesota law, (applicable to fully insured employers with two or more employees) an employee who becomes totally disabled while employed may remain in the group health plan indefinitely. For a Q & A on COBRA see the Minn. Department of Health web site at www.health.state.mn.us

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October 11, 2006

GLOBAL ISSUE

CONCERNS/COMMENTS

SUMMARY OF CURRENT LAW AND PRACTICES1

THEORETICAL SOLUTIONS
For discussion purposes only

LITIGATION 1. Too much litigation • Promote alternative dispute-resolution systems. Empower employer and employee in ADR to move claim along. Explain the path and successful likelihood of the litigation process. Educate employees and employers about how the system works and why it works that way. Better define and explain PPD to the employee. Make it more clear how and when to use the Medical Request form. DLI provides mediation services. Before an attorney can charge a fee for a medical or rehabilitation dispute, DLI must certify there is a dispute and it has tried to resolve it. The Office of Administrative Hearings also conducts settlement conferences before a hearing is held. DLI also staffs a workers’ compensation hotline to answer questions; assist injured workers, employers and insurers; and intervene when appropriate. • • • • Employers are required to post a poster describing the workers’ compensation system at the worksite. Employers must also provide injured workers with an “Employee Information Sheet” at the time the employee is given a copy of the First Report of Injury form. DLI prepares the poster and the information sheet, as well as a booklet describing benefits available to injured workers. DLI also has a more detailed description of the system in its "Employee Guide to the Workers’ Compensation System." The DLI Web site has these publications and other information. • DLI is developing a marketing tool for the ADR process. Develop incentives based on willingness to participate in ADR. Limit IMEs. DLI is conducting research about what is disputed, what is the time frame for disputes and who disputes. Provide additional educational offerings for employees and employers.

Allow the employee to identify another The workers’ compensation law does not prohibit this if the employee consents. The law member of the family to participate in requires appointment of a guardian for minors and incapacitated employees. (A parent is presumed to the guardian of a minor.) resolving disputes. Use the collective bargaining alternative system with employer groups, beyond construction. The alternative collective bargaining system is no longer limited to construction. • •

Consider revising the attorney fee formula. Permit only a Minnesota district court or the Minnesota Supreme Court to award fees that exceed the formula amount when fees are paid out of employee benefits.

Attorney fees of 25 percent of the first $4,000 and 20 percent of the next $60,000 of Attorney fees are too high. Reimburse benefits awarded are allowable. An attorney may request that a judge award fees above attorneys for “disputed portions of the that amount. Fees for obtaining medical or rehabilitation benefits where the formula is inadequate or where there are no monetary benefits awarded are paid by the insurer. claim" only. Allowable attorney fees may only be paid on genuinely disputed claims or portions of claims. Before an attorney can charge a fee for a medical or rehabilitation dispute, DLI must certify there is a dispute and it has tried to resolve it.

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GLOBAL ISSUE 2.

CONCERNS/COMMENTS Length of time to resolve claims and disputes. Ensure consistency between claims adjusters. DLI should review/define insurer performance according to established industry standards. DLI should more aggressively deal with insurers that don’t respond timely. Implement time frames for payment of benefits based on the severity of claims; provide a safety net.

SUMMARY OF CURRENT LAW AND PRACTICES1 • DLI reviews all denials of liability and audits all workers’ compensation files for proper payment of benefits. DLI also provides training to claims adjusters several times a year. DLI has penalty authority when claims are not paid as required by law. DLI provides annual reports to the Legislature about penalties assessed and about the promptness of insurers and self-insured employers in making the first payment within 14 days. The workers’ compensation law provides time frames for payment of benefits and also provides for an expedited hearing on disputed claims when the employee can show financial hardship.

THEORETICAL SOLUTIONS
For discussion purposes only

Mandate claim representative training. (Currently optional training is offered three times a year.) Develop a system to review insurer performance. Facilitate the electronic exchange of information to speed up claim processing and communication. DLI is evaluating how to implement an electronic data-driven system.

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MEDICAL

1. Managed care • Limit the ability of the employee to select or change doctors. Encourage managed care based on the value of services rather than just price.

The employee covered by a certified managed care plan is allowed to receive treatment from a provider with whom the employee has an established relationship (instead of a provider in the network). Employees who receive treatment by a managed care provider are allowed to change doctors at least once. Employees not covered by managed care may change once within the first 60 days of treatment; thereafter, the employee must have approval of the insurer, commissioner or judge. The rules prohibit a managed care plan from negotiating payment with providers that is lower than paid to providers outside the plan.

Move from an employee-choice to employer-choice or limited employer-choice of treating provider. Allow managed care plans, insurers and providers to negotiate payment incentives. Allow employers to contract for components of managed care instead of entire package. Enact an automatic rulemaking process that will annually update medical services codes and fee schedule in a cost neutral manner.

2. • • •

Coding of services is inadequate. Have a coding system that works with insurers located in other states. The fee schedule is out of date. Provide more defined coding for vocational rehabilitation services.

The coding system in the fee schedule is national, used throughout the country in the public and private sectors. However, the fee schedule is out of date, with CPT codes from 1997 and 1998, due to the lengthy rule adoption process. The rules specify how health care providers should code for meetings and reports requested by rehabilitation providers.

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GLOBAL ISSUE

CONCERNS/COMMENTS 3. Correct the payment disparity between chiropractors and physical therapists; reimburse all providers at the same rate. 4. Skyrocketing medical costs, along with the duration of claims increasing. • Pay providers commensurate with payments in general health system. Reduce paperwork and administrative burden for doctors. Better utilize the treatment parameters to encourage early resolution of disputes. Limit hospital charges in general; and particularly hospitals of 100 or fewer beds and affiliated clinics. Strengthen the neutral doctor option. Consider 24-hour coverage insurance.

SUMMARY OF CURRENT LAW AND PRACTICES1 The law was amended in 2005 to increase the maximum fees for chiropractic services to 72 percent of the fees for medical doctors. As a result, the conversion factors are: medical/surgical services: $76.87; pathology/laboratory services: $64.19; physical medicine and rehabilitation services: $66.64; chiropractic services: $55.35. Providers are paid more in workers’ compensation than in the general health system. Providers are paid the provider’s usual and customary charge or the maximum fee in the fee schedule. For services not in the fee schedule, the provider is paid 85 percent of the providers usual and customary charge or 85 percent of the prevailing charge as defined by rule. Providers must complete a one-page report, which includes an MMI and PPD assessment, on request of DLI or the insurer. Doctors must also complete one-page Reports of Work Ability form to facilitate a safe return to work. DLI offers provider training. The Workers’ Compensation Court of Appeals has said judges do not have to consider the treatment parameters to determine whether treatment is appropriate if the attorneys do not raise them. Inpatient hospital services and outpatient facility fees are not limited by the fee schedule, but are paid at 85 percent of the facility’s charge. Inpatient and outpatient services at a small hospital are paid at 100 percent. The law allows a judge to appoint a neutral doctor, but this is rarely done. DLI issued a report to the Legislature about 24-hour coverage in 1995. • •

THEORETICAL SOLUTIONS
For discussion purposes only

Consider paying chiropractors the same or more than other providers, while maintaining cost neutrality. Pay providers a set percentage over Medicare. Develop a pay-for-performance system that will reward doctors who understand medical components of the system and provide superior care. Require judges to use the treatment parameters in evaluating treatment. Allow for easier updates to the treatment parameters. Pay small hospitals based on “critical access facility” status rather than licensed beds. Define when a clinic is paid at the hospital rate. Pay noncritical access hospital nonfee schedule services based on cost-to-charge ratios or at a fixed percentage of average reimbursement for all hospitals. Adopt a fee schedule for ambulatory surgery facility fees. Extend coverage to mental health conditions resulting from workrelated catastrophic or traumatic events.

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GENERAL

Coverage of mental health injuries related A work-related mental health illness is not covered under the workers’ compensation law to catastrophic or traumatic events. unless it is caused by or results in a compensable physical condition.

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GLOBAL ISSUE

CONCERNS/COMMENTS • Cover health care providers who contract an infectious disease in any health care setting, including contraction or exposure without symptoms. • Injuries or illnesses caused by vaccines recommended for health care workers by the CDC should be compensable. Gross negligence of employer should be out of the workers' compensation system.

SUMMARY OF CURRENT LAW AND PRACTICES1 Infectious diseases are presumed to be work-related for certain emergency response employees exposed to the disease in the course of employment outside of a hospital. An injury or disease resulting from a vaccine in response to a declaration by the federal Department of Health and Human Services to address an actual or potential health risk related to employment is covered by the Workers’ Compensation Act. • •

THEORETICAL SOLUTIONS
For discussion purposes only

Extend the infectious disease presumption to employees in all health care settings. Extend coverage of vaccine-related injuries and illnesses to any vaccine recommended for health care workers by the Centers for Disease Control and Prevention (CDC). Allow employees to sue their employers for gross negligence.

An employee cannot sue the employer outside the workers’ compensation system unless the employer intentionally injured the employee.

Oct. 10, 2006

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Workers' Compensation Advisory Council

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2006 Minutes

David Olson stated the summary was a good document and should be helpful in putting together a framework for a WCAC legislative package. Sen. Tom Bakk asked that the WCAC look at coverage of health care benefits for those people who lose their health insurance when they are hurt on the job. Olson said he would consider it as part of a broader package; Brener agreed to discuss it. Brener announced the next meeting is tentatively scheduled for Nov. 29, at 9:30 a.m., and asked members to put it on their calendars. The meeting was adjourned at 10:22 a.m. Respectfully submitted, Debbie Caswell Executive Secretary dc:s

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