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Workers’ Compensation Advisory Council Nov. 13, 2007 minutes
Voting members present Mike Bredeck Marilyn Durenberger Don Gerdesmeier Ryan Holmes Mike Wilde for Glen Johnson David Olson Susan Olson Gary Thaden Brad Lehto for Ray Waldron Voting members excused Wayne Ellefson Voting members absent Robert Lux Nonvoting members present Senator Tom Bakk Representative Mike Nelson Nonvoting members absent Representative Bob Gunther Senator Geoff Michel Staff members present Debbie Caswell Cindy Farrell Phil Moosbrugger Steve Sviggum Patricia Todd Jana Williams Visitors present Randy Bradley; Alaris Sandy Chentil; Park Nicollet Karen Clayton Ebert; MN Counties Ins Trust David Dederichs; MN Chamber Kevin Gregerson; UCWCP-Wilson McShane Rose Hatmaker; SFM Tom Hesse: MN Chamber Nilani Jayatilaka; MMA Meg Kasting; SFM Nancy Larson; MARP Andy McCoy; Fairview Louise Montague; MOTA Sara Noznesky; MMA Tom Poul; MNASCA Sue Stadt; MN Hospital Assn David Sullivan; House DFL Anna Thompson; Allina Kelly Wolfe; LS & D David C. Wulff. MNAJ

I. Call to order and roll call Commissioner Steve Sviggum called the Workers’ Compensation Advisory Council (WCAC) meeting to order at 9:35 a.m. A quorum was present. Sviggum stated that as a result of his outreach meetings, he noted too many mouths are being fed in Minnesota’s workers’ compensation system and jobs have been created for vendors, repricers and litigators. He would like the WCAC to streamline the system so it is more responsive to the injured workers’ and employers’ needs. Sviggum is traveling to each WCAC member’s location to discuss the WCAC with them. He noted he is working with Senator Senjem to get an employee representative appointed.

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II. Approval of the Oct. 10, 2007 minutes Gary Thaden made a motion to approve the minutes from the Oct. 10, 2007 meeting. Mike Bredeck seconded the motion. All voted in favor of the motion and it passed on a voice vote. The agenda was approved as presented. V. Agenda items A. Work Comp Operational and Policy work group overview Assistant Commissioner Patricia Todd gave an overview of the activities of the Work Comp Operational and Policy work groups. The groups met during the summer because the WCAC bill did not move forward last year. The work groups are exploring how to improve the processes between the hospitals and insurers for inpatient bills. It is clear there is frustration with bill payment timeliness and effectiveness. There are challenges in identifying ways to improve the system, such as what billing information is needed, more electronic transfer as opposed to paper and a consistent reimbursement rate. Sviggum noted the next Policy work group meeting will be Nov. 20, 2007, and he hopes they come to agreement on a recommendation for the WCAC for reform with significant cost savings. There has been good give and take at the meetings. They are moving forward with a specific recommendation and there should be some streamlining in that area. B. Dispute-resolution challenges Mark McCrea, the Alternative Dispute Resolution (ADR) supervisor in the Benefit Management and Resolution (BMR) unit, gave an overview of the challenges his unit faces with its workers’ compensation dispute-resolution process. ADR provides assistance and outreach to resolve conflicts and disputes in the workers’ compensation system before the disputes get out of control. The challenges it sees regarding disputed claims include a lack of communication, a lack of coordination of disputes, time to resolve disputes, delayed resolution, a lack of understanding the process and unreasonable expectations. Thaden asked what should be changed. McCrea said many claims do not belong at the Office of Administrative Hearings (OAH) and recommended anything that facilitates early intervention. Lehto asked for suggestions to streamline communication between parties, such as requiring information gets to people sooner or that they get paid sooner. Senator Bakk asked if the employers should be empowered to have more participation at the front end. Claims are handed off to insurers and attorneys, little things are out of the control of the employer. McCrea agreed insurers call the shots. The party in the best position to reduce

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costs is the employer. He would encourage the employer to be at the table, participate and be directly involved. It makes a difference when the employer is physically there and participating. Susan Olson pointed out there is mandatory alternative dispute-resolution in the civil system. It is working, forcing them to evaluate claims earlier. She asked whether the workers’ compensation system should require mandatory dispute resolution to hash out disputes with a neutral party. McCrea said it could potentially work in the workers’ compensation system, provided the time frame is short, it allows for significant cases to go directly on to hearing and provides numerous forums for resolution. Thaden suggested a change to an alternative system such as the one used by the 49ers and carpenters would help the system, speed things up and get resolution five times faster. Representative Nelson asked DLI to bring forward some suggestions. They are on the frontline every day and have the best solutions to stop the disputes before they cost $25,000 instead of $200. C. QRC rates Nancy Larson requested an increase in the maximum hourly fees that qualified rehabilitation consultants (QRCs) can charge for their services, on behalf of the Minnesota Association of Rehabilitation Providers (MARP). They are concerned because many of the QRCs are older than 55. It will be difficult to replace them when they retire, because the 13-year cap on wages has hurt the industry. Larson noted it is important to get workers back to work and their industry helps do that at the lowest possible cost. They are asking for the cost of living adjustment to go as high as the statewide average weekly wage (SAWW) and not below 2 percent. This would be the top charge and does not necessarily mean all QRCs would charge that much. Don Gerdesmeier asked that information about what the SAWW has been for the past five years and the percentages be e-mailed to members. David Olson asked the department to also research what the numbers for the increase in the cost would be to the system. Brad Lehto asked for trend information. D. Expectations of advisory council members Sviggum outlined his goals and expectations. He will meet with David Olson and Ray Waldron and plans to have a bill ready to go in January so everyone can work with chairpeople and committees at the Legislature to get the WCAC bill passed during a short session. Sviggum polled members and asked them what issues they would like to address in the WCAC bill. Those issues included uncontrolled litigation, finding cost savings and additional benefits for the injured workers, comprehensive benefit changes, cost-of-living increases, hospitals and insurers coming to an agreement to find some cost savings to put back into the system, electronic billing and nonhospital costs.

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Discussion occurred about the 2009 mandate for insurers to implement electronic billing. Bakk advised caution. The WCAC will be updated on the status of this activity. Sviggum pointed out the paper reports in member’ packets. David Olson made a motion to adjourn at 11:28 a.m. Thaden seconded the motion. All voted in favor of the motion and it passed on a voice vote. Respectfully submitted,

Debbie Caswell Executive Secretary dc/s