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Workers’ Compensation Advisory Council

Nov. 13, 2007
minutes

Voting members present Staff members present

Mike Bredeck Debbie Caswell

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

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

An Equal Opportunity Employer

Workers’ Compensation Advisory Council -2- November 13, 2007
Minutes

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
Workers’ Compensation Advisory Council -3- November 13, 2007
Minutes

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