Workers' Compensation Advisory Council Dec.

8, 2004 Minutes
Visitors: Voting members: Paul Bailey Susan Olson for James Cavanaugh Stan Daniels Wayne Ellefson Brad Lehto for Glen Johnson David Olson Reed Pollack Julie Schnell Gary Thaden Ray Waldron Voting members absent: Mike Hickey Brad Robinson Nonvoting members: Rep. Joe Mullery Nonvoting members excused: Sen. Tom Bakk Rep. Dan Dorman Sen. Geoff Michel Staff members: Jamie Anderson Scott Brener Debbie Caswell Jim Feckey Beth Hargarten Keith Keesling Cindy Miner Phil Moosbrugger Teri Van Hoomissen Jana Williams Sandy Blunt; WSI Ray Bohn; WCRA Jennifer Breitinger; JWB Liz Carpenter; MN Pharmacists Assn Paul Cassidy; LS & D Coleen Colburn; MN Chiropractors' Assn Greg Coon John Diehl; Larkin Hoffman Anne Green; WSI Kevin Gregerson; Wilson-McShane Judy Hawley; MNAPTA Brian Hicks; MAPS Mike Johns; RTW Bob Johnson; Insurance Federation of MN Todd Johnson; WCRA Mary Krinke; MN Hospital Assn David Kunz; MCA Tom Lehman; The Lehman Group Aggie Leitheiser; MN Department of Health Tammy Lohmann; Commerce Bob Lund; State Fund Bert McKasy; Lindquist & Vennum Brandon Miller; Hayes Andy Morrison; Koll, Morrison Nabe Mussell; Lockridge Grindal Nauen Eric J. Myers; Leonard, Street and Deinard John Nesse Steve Novak Laura Offerdahl; League of MN Cities Sandy Olentch; Park Nicollet Robin Peterson; MNAPTA Mark Pixler; MAPS Curt Pronk; Mayo Foundation Linda Sandvig; Allina Health System Beau Schneider; Health South Erin Sexton; MMA & MN Orthopedic Society Steve Shakman; MN Department of Health Nora Stewart; Lockridge, Grindal Nauen Judy Underwood; Winthrop & Weinstein

The meeting was called to order at 10:02 a.m. by Commissioner Scott Brener. He apologized for the delay. Roll was called and a quorum was present.

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III. A. Commissioner's update Brener said there were some base principals that had been clearly communicated and accepted by the primary parties to these discussions. He read a series of proposals that have been agreed to by all. These proposals will form the base for the 2005 workers' compensation legislative bill. Brener said there would then be discussion about the outstanding issues that remained on the table, with the intent to come back in January to work through some of those additional issues. The following proposals were agreed to: 1. Eliminate the requirement that defense attorneys must file fee information with DLI. Include housekeeping language regarding the deposit of workers’ compensation penalties. Three sections in law state certain penalties are to be deposited in the Special Compensation Fund. New language would direct these penalties to be deposited in the Assigned Risk Safety Account. Revise/update assessment language. Clarifies previous changes regarding the assessment calculation. Some minor changes were needed in the statutory language that was adopted three years ago, when we went from indemnity-based assessments to premium-based assessments. Restore offset language. The department would then be able to offset reimbursements owed to employer/insurers against assessments they owe to DLI. This language was inadvertently deleted from the law three years ago. Allow pharmacy networks where the employee must select a pharmacy from a network to fill prescriptions. The pharmacy must be within 15 miles of the employee’s home. Brener pointed out that this language has been altered. Last year it said "home or work." Additional language was removed relating to the disclosure of rebates issue and the medical device issue included in last year's bill. 6. 7. Allow electronic submission of bills between insurers and health care providers. Allow for collective bargaining agreements to expand into nonconstruction industries. (Option two on the November list.) Change the notice requirements for employers whose insurance is about to expire. This would eliminate the duplication of services provided by both DLI and MWCIA.

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Hargarten pointed out a handout in the packets with the final draft language. She noted they were still making some minor changes with the MWCIA in November. 9. 10. Include housekeeping language that eliminates outdated forms language. Include housekeeping language that eliminates an outdated reference to a neutral physician list. Include housekeeping language that clarifies that the “parent is guardian” presumption applies when the injured employee is a minor. Include the Minnesota Department of Health proposal regarding volunteers. Hargarten noted there was a separate handout in the packets with the final language. DLI worked with the Department of Health yesterday afternoon to address some of the concerns that were brought up at the last meeting by Thaden and Cavanaugh. She thought the new language addressed those concerns. 13. Include utilization of medical services and the treatment parameters.

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Brener announced these issues would serve as the base bill. He noted that other issues remained on the table. He asked for a motion for the agreed-upon items before going forward. Discussion followed. Stan Daniels said he did not think they agreed on the treatment parameters and it was tied to the managed care issue. Daniels asked about the pharmacies and whether the injured worker had to go to the pharmacy, pay and then send in receipts. Hargarten said, under current law, an injured worker is not to pay any costs associated with workers' compensation and that would include pharmacy prescriptions. She explained that what they were trying to do with the language being debated was to allow for pharmacy networks to occur and allow an employer to contract with a network and designate a particular pharmacy for an injured worker to go to. There is currently no such procedure in place. The mileage restriction was included so that the designated pharmacy would not be too far away from where the employee either worked or was employed, so they would not have to travel a long distance. That was the key with the mileage restriction. They do not have to pay now and nothing would change in this proposal. Daniels said he had been told by many injured workers that they do have to pay when they go to pharmacies now and the only way they get reimbursed is to keep their receipt and get reimbursed months later. He thought that is more of a problem than what they were addressing here. Hargarten asked if he was requesting an additional discussion item regarding employees having to pay. Daniels said he was. Brener noted it was not lawful for the employee to pay directly. Hargarten asked Daniels if he knew why the injured workers' were paying directly for their pharmaceuticals and whether the pharmacy was turning them away or if the claim was

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disputed. Daniels said that was probably the case and he would get more information and talk about it at the January meeting. Members agreed and noted this was separate from the network issue. Waldron moved to approve the list read by Brener, except for number seven, on page four of the Nov. 16, 2004, list about managed care, because they had not yet reached a conclusion on that. Brener agreed to hold that off until January. David Olson said it did include number seven, on page 12, the utilization of medical services. All agreed and David Olson seconded the motion. All voted in favor of the motion to approve this list as a base bill. Brener opened up the discussion on the remaining issues. North Dakota incidental contacts Brener noted the North Dakota reciprocity issue was previously discussed. The representatives from North Dakota met with a variety of the Workers' Compensation Advisory Council (WCAC) members and changes were made to the language. Sandy Blunt, executive director/CEO of North Dakota's Workforce Safety & Insurance (WSI), gave an update. He said there were some concerns with the language about 15 consecutive days. After consulting with various organizations, the language now says, "work in Minnesota for a period of time not to exceed 15 consecutive calendar-days or a maximum of 240 hours worked by that employee in a calendar year." This represents truly temporary work. Daniels asked how they came up with 240 hours. Blunt responded they were looking at 15 consecutive calendar-days, but they were also saying that if you were doing eight hours a day for 30 days, that total was 240. The original recommendation was 360 and they wanted it tighter, so they used 240, because it represents a month or less of total hours, representing incidental work or time in the state. He noted that in North Dakota it currently reads 25 percent of payroll or $100,000 in annual wages. They are removing the $100,000 in annual wages by an employer language that allows anybody coming into North Dakota 90 days to come in and work. Fifteen days and 240 hours was significantly less than the package offered in North Dakota. Pollack asked about North Dakota's reciprocity agreement with other states. He asked what requirements there were for employers to track the hours. Anne Green, legal counsel with WSI, responded that the reciprocity agreements they have with other jurisdictions are reciprocal contractual agreements and indicated there is not an hourtracking requirement. Thaden asked Hargarten a drafting question. The language said the employer did not have to pay workers' compensation benefits. It does not say they do not have to have a policy or have a policy that exempts them from providing benefits. It just says they do not have to pay benefits. He asked if that was the proper way to give them what they

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wanted. Hargarten's interpretation of "shall not be payable under this chapter" would mean that Minnesota's workers' compensation chapter would not come into "being" for these individuals, so they would not need to purchase insurance to cover that statutory provision. However, she said she would review that language with Legal Services. Susan Olson made a motion to approve the North Dakota language. Discussion occurred about holding off until January and it was decided they would approve the language now. David Olson seconded the motion. All voted in favor of adding the North Dakota language to the bill. Waldron asked what exactly was approved in the previous motion about the base bill and asked which items were included. David Olson said it included items 1, 2, 3, 4, 5, 6, 9 with option two, 10, 11, 12, 13 from the November list of items in the 2004 bill, plus numbers 1, 4 and 7 from the November "to be discussed" list. Waldron said his motion did not include item 7 about managed care in the discussion items on page four of the Nov. 16, 2004 list. David Olson and the other members agreed that was not in the bill. Discussion followed about which list they were talking about. David Olson said that was why he specifically asked Waldron if number 7, on page 4, or number 7, on page 12 of the Nov. 16, 2004 list about utilization of medical services, was included when the motion was made. David Olson said it was a key part of the bill. Ellefson asked if they were wrapped together. Brener said they were distinct. Daniels and Bailey said they understood that both the sevens were under discussion and that was their agreement. Brener said that was not the way it was communicated to him. Hargarten said that was different than the motion. The motion did include the treatment parameter issue on page 12. Waldron said that was a mistake on his part and it was not supposed to be there. Brener asked how council wished to move forward. Ellefson said his labor caucus wanted to discuss these issues a little further, with the idea that they would put that on the January meeting agenda for possible approval at that time. Susan Olson noted that during the discussion at the time the motion was made about what was included in the base bill, it was specifically asked whether the treatment parameter issue on page 12 was included. The answer was yes, that was what they voted on and it was already there. She did not think you could change your mind now. Ellefson suggested a motion to reconsider. Thaden understood that the first number 7 was not in there and the second number 7 was, but it did not make any difference, as a practical matter. Regardless of what they thought, if the labor representatives are not going to support the bill's provisions, it did not matter what the motion was. Bailey seconded the motion to reconsider. Brener called for a vote and all but David Olson agreed. David Olson stated they agreed to the managed care piece last year and yanked it. Now they agreed on the treatment parameters and yanked it. He wanted to know when they would finally have a deal that sticks. Waldron said they were looking forward to the January meeting.

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David Olson noted to Brad Lehto that they had done reasonably well. In fairness, they did agree last year about the managed care piece as a group. Lehto did not think people were saying do not do it. Part of the problem was trying to pull his people together and a lot of it was done by telephone on their side. He acknowledged that the intent was to have it done by today, but they were not able to. Because of the holidays and schedules, they were not able to pull everyone together into the same room and folks wanted more discussion that morning. There was not an idea that they were not going to do anything. Everybody wanted a base bill to start working from. He admitted he was confused about exactly what the motion was too. David Olson suggested leaving the base bill as it was and working on it between now and the January meeting. Waldron agreed. David Olson requested to know whether it was in or out at the January meeting for good. Waldron agreed to that. Brener said a motion was not required with that in mind. The base bill would remain where it was and discussions would continue. David Olson made a motion to meet Jan. 18, 2005. Ellefson seconded the motion. The motion passed by a majority vote. The commissioner asked that members who would be unable to attend send their alternate. MIGA Brener asked for discussion on the MIGA issue. David Olson suggested moving that issue to January, and made a motion to adjourn the meeting. Waldron seconded the motion. All voted in favor of the motion. The meeting was adjourned at 10:29 a.m. Respectfully submitted, Debbie Caswell Executive Secretary dc/s