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Workers' Compensation Insurers' Task Force Sept. 20, 2006
Members present Dave Clark for Dennis Ballinger; Western National Kathy Berg; Liberty Mutual Charles Bierman; Mayo Clinic Deb Dolsky for Jodie Connor; Wausau Karen Clayton Ebert; MN Counties Insurance Trust Robert Farber; Berkley Risk Connie Brown for Meg Kasting; State Fund Mutual Claire McCoy; GAB Robins Cindy Weingart for Dave Oertli; Sedgwick Rob Rangel; Broadspire Cindy Van Eyll; General Casualty Gary Westman; MN DOER Members absent Mary Abraham; Westfield Group Ken Gildow; RTW Robert Johnson; Insurance Federation Nancy Ross; City of Minneapolis Laurie Simonson; St. Paul Travelers Staff members Kate Berger Debbie Caswell Penny Grev Marion Halverson Ralph Hapness Steve Masters Phil Moosbrugger Patricia Todd

The meeting was called to order at 9:09 a.m. by co-chairperson Rob Rangel. Task-force members and Department of Labor and Industry (DLI) staff members introduced themselves. Three new members were welcomed. Charles Bierman replaced Curt Pronk, representing Mayo; Karen Clayton Ebert was added, representing the Minnesota Counties Trust; and Ken Gildow, from RTW, replaced Mike Johns. Gary Westman volunteered to co-chair the task-force meetings. The agenda was approved as presented. 5) Updates Patricia Todd announced Tom Joachim was appointed as the new assistant commissioner of the department's Safety Codes and Services Division, which was formerly known as Workplace Services. Carol Pankow heads up the Claims Services and Investigations unit, which was formerly known as the Special Compensation Fund. Pankow has worked in both the public and private sectors and has experience in change management. Marion Halvorson was introduced. She works on the department's Benefit Management and Resolution unit's denial project to resolve issues. Todd reported about the recent Rehabilitation Review Panel (RRP) and the Medical Services Review Board (MSRB) meetings. The minutes are online at www.doli.state.mn.us/boards.html if anyone is interested in reviewing them. The MSRB is evaluating definitions of pharmaceuticals and making recommendations regarding medical treatments. The Workers' Compensation Advisory Council (WCAC) met in June

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and decided to have meetings throughout the state to receive input from stakeholders about areas that could be improved within the workers' compensation system. The meetings were in Brainerd, Mankato and St. Paul. There were some good ideas and suggestions; they will be reviewed Oct. 11, 2006, at a special meeting of the WCAC. Todd noted letters were sent regarding the department's "pay for performance" program. DLI is looking for input from stakeholders regarding how it could implement a system to pay additional dollars to providers that facilitate returning injured workers to work as soon as possible, as well as provide quality treatment. This is in line with Governor Pawlenty’s "QCare" initiative in the general health system. They are looking at implementing those concepts into the workers' compensation system. 6) Brainstorming The common topics listed on page 4 of the May 17, 2006, minutes were discussed to determine which subjects interest the group and were prioritized for discussion at future meetings. 1) The trend to close out medicals at the time of settlement and Medicare setasides were combined into one topic. Closing out medicals • • Find out what other states are doing, to have an informed conversation. Cindy Wiengart from Sedgwick said they work with other states and she will check with them for some feedback. Rob Rangel said they also do structured settlements.

Medicare set-asides • Cindy Van Eyll said General Casualty does some Medicare set-asides. They handle multiple states and some allow them to do a medical pool when they close out, where the employee is paid a chunk of money and they have to exhaust it before coming back to General Casualty. In some states they are able to close the claim and set up a trust that is administered somewhere else, so the person is taken care of in the future. Charlie Bierman commented that the Medicare set-aside process takes a long time to get back to you, sometimes six months to even find out if one is needed. Medicare recently issued a memo indicating if a settlement is below a certain figure, which was $10,000 and may be up to $20,000 now, they do not exonerate you but indicated they do not "mess around" with those. Minnesota is still learning how to deal with the Medicare set-aside cases. Some employers may not realize the potential risk that Medicare may find out later and they could back later to get a recovery and hold the employer/insurer responsible.

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Rangel suggested inviting someone who can speak about what Medicare setasides are, the rules and the latest trends, and answer questions. The group approved this suggestion. Robert Farber asked for a historical perspective about why Minnesota is reluctant to close out future medicals and find out what other states have done. Rangel asked if Berger and/or the CSI attorneys could come to a meeting to share information about what they are seeing and trends. Todd agreed to identify someone to provide that information. Kathy Berg, from Liberty Mutual, suggested asking an association to speak about closing medical that are involved with the different states. They are involved with PCI and she will ask them for suggestions and call Todd or Deb Caswell.

Medication management • Weingart said Bob Lund, from State Fund Mutual, gave an excellent presentation for the Minnesota Self Insurers Association about prescription costs and ways to cut them, at a recent seminar. He noted the cost for arthroscopic surgery ranged from $6,000 to $11,000, depending on where it was done. There should be a middle ground for the cost for the same procedures. Members agreed to ask Lund to do his presentation at the task-force meeting. Lund also had a chart that showed the costs are different with workers' compensation, Medicare and general insurance for the same product. The Medical Costs Task-force link, to review the recommendations before the next meeting, is www.doli.state.mn.us/medcost.html. Bierman noted we have not been successful in getting judges to follow the treatment parameters and more companies are trying to pay the prevailing charge instead of 85 percent of the usual and customary charge. He anticipates a lot of medical requests will be sent to DLI. A company called Q Metrix is using this strategy. It says the database is proprietary and it will not share it. Under the rules, it is going to have to share the database.

3) Illegal immigrants • Have an open discussion about the challenges facing insurers and how others dealt with issues related to that type of claim. Issues mentioned included not being able to return to work because they are illegal, how to terminate temporary total disability after they are on it and costs for QRCs for services for illegal immigrants that, by rule, they cannot provide. Bierman said Candy Heckner had a big case and she might be willing to come in to talk. Bierman asked for a case law update about illegal immigrants. Berger said there are a couple of cases regarding illegal immigrants that have gone to the courts; that information would be brought to a future meeting.

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4) Catastrophic injuries • Rangel suggested the committee has the Workers' Compensation Reinsurance Association's (WCRA) catastrophic nurse, Nancy Hawkins, R.N., speak to the group from WCRA's perspective about what it sees and how it can help the committee in the future. Members approved the suggestion. 7) Penalty subcommittee Meg Kasting, Robert Farber and Rob Rangel, along with Steve Masters from the Department of Labor and Industry, met after the meeting. Anyone was welcome to join them There was no new business or future agenda items. The meeting was adjourned at 10 a.m. Respectfully submitted,

Debbie Caswell Executive Secretary dc/s