SF 1295

as introduced - 88th Legislature (2013 - 2014) Posted on 03/12/2013 09:12am

A bill for an act
relating to insurance; regulating certain coverages; prohibiting certain exclusions;
modifying no-fault benefits and coverages, arbitration and health claims appeals,
and provider liens; amending Minnesota Statutes 2012, sections 65B.43,
subdivision 5; 65B.44, subdivisions 2, 3, 4, 5, 6; 65B.47, subdivisions 4, 5;
65B.49, subdivision 3a; 65B.525, subdivision 1; 65B.54, subdivision 2, by
adding subdivisions; 65B.56, subdivision 1; 72A.327; proposing coding for new
law in Minnesota Statutes, chapter 60A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [60A.0812] PROHIBITED EXCLUSION; CERTAIN PROPERTY
AND CASUALTY POLICIES.
new text end

new text begin An automobile insurance policy, personal excess liability policy, or personal
umbrella policy must not contain an exclusion of, or limitation on, liability for damages
for bodily injury solely because the injured person is a resident or member of the insured's
household, or is related to the insured by blood or marriage.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2014, and applies to
policies issued, renewed, or continued on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2012, section 65B.43, subdivision 5, is amended to read:

Subd. 5.

Insured.

"Insured" means an insured under a plan of reparation security as
provided by sections 65B.41 to 65B.71, including the named insured and the following
persons not identified by name as an insured while (a) residing in the same household
with the named insured and (b) not identified by name in any other contract for a plan of
reparation security complying with sections 65B.41 to 65B.71 as an insured:

(1) a spouse,

(2) other relative of a named insured, or

(3) a minor in the custody of a named insured or of a relative residing in the same
household with a named insured.

A person resides in the same household with the named insured if that person's home
is usually in the same family unit, even though temporarily living elsewhere.

new text begin "Insured" does not include an assignment of benefits assignee.
new text end

Sec. 3.

Minnesota Statutes 2012, section 65B.44, subdivision 2, is amended to read:

Subd. 2.

Medical expense benefits.

(a) Medical expense benefits shall reimburse
all reasonable expenses for necessary:

(1) medical, surgical, x-ray, optical, dental, chiropractic, and rehabilitative services,
including prosthetic devices new text begin and medically prescribed equipment by a licensed physician new text end ;

(2) prescription drugs;

(3) ambulance and all other transportation expenses incurred in traveling to receive
other covered medical expense benefits;

(4) sign interpreting and language translation services, other than such services
provided by a family member of the patient, related to the receipt of medical, surgical,
x-ray, optical, dental, chiropractic, hospital, extended care, nursing, and rehabilitative
services; and

(5) hospital, extended care, and nursing services.

(b) Hospital room and board benefits may be limited, except for intensive care
facilities, to the regular daily semiprivate room rates customarily charged by the institution
in which the recipient of benefits is confined.

(c) Such benefits shall also include necessary remedial treatment and services
recognized and permitted under the laws of this state for an injured person who relies
upon spiritual means through prayer alone for healing in accordance with that person's
religious beliefs.

(d) Medical expense loss includes medical expenses accrued prior to the death of a
person notwithstanding the fact that benefits are paid or payable to the decedent's survivors.

(e) Medical expense benefits for rehabilitative services shall be subject to the
provisions of section 65B.45.

new text begin (f) Providers of goods and services for which a medical expense benefit claim is
submitted shall notify the appropriate reparation obligor of the date the services were
commenced or the goods were first provided within 30 days of determining the identity of
the reparation obligor, but in any event not later than 60 days from the date services were
commenced or goods were first provided.
new text end

new text begin (g) Once the reparations obligor has been established, all bills must be submitted to
the reparations obligor not later than 60 days from the date of service.
new text end

Sec. 4.

Minnesota Statutes 2012, section 65B.44, subdivision 3, is amended to read:

Subd. 3.

Disability and income loss benefits.

new text begin (a) new text end Disability and income loss
benefits shall provide compensation for 85 percent of the injured person's loss of present
and future gross income from inability to work proximately caused by the nonfatal
injury subject to a maximum of deleted text begin $250 deleted text end new text begin $500 new text end per week. Loss of income includes the costs
incurred by a self-employed person to hire substitute employees to perform tasks which
are necessary to maintain the income of the injured person, which are normally performed
by the injured person, and which cannot be performed because of the injury.

new text begin (b) new text end If the injured person is unemployed at the time of injury and is receiving or is
eligible to receive unemployment benefits under chapter 268, but the injured person loses
eligibility for those benefits because of inability to work caused by the injury, disability
and income loss benefits shall provide compensation for the lost benefits in an amount
equal to the unemployment benefits which otherwise would have been payable, subject to
a maximum of deleted text begin $250 deleted text end new text begin $500 new text end per week.

new text begin (c) new text end Compensation under this subdivision shall be reduced by any income from
substitute work actually performed by the injured person or by income the injured person
would have earned in available appropriate substitute work which the injured person was
capable of performing but unreasonably failed to undertake.

new text begin (d) new text end For the purposes of this section "inability to work" means disability which
prevents the injured person from engaging in any substantial gainful occupation or
employment on a regular basis, for wage or profit, for which the injured person is or may
by training become reasonably qualified. If the injured person returns to employment and
is unable by reason of the injury to work continuously, compensation for lost income shall
be reduced by the income received while the injured person is actually able to work. The
weekly maximums may not be prorated to arrive at a daily maximum, even if the injured
person does not incur loss of income for a full week.

new text begin (e) new text end For the purposes of this section, an injured person who is "unable by reason of
the injury to work continuously" includes, but is not limited to, a person who misses time
from work, including reasonable travel time, and loses income, vacation, or sick leave
benefits, to obtain medical treatment for an injury arising out of the maintenance or use
of a motor vehicle.

Sec. 5.

Minnesota Statutes 2012, section 65B.44, subdivision 4, is amended to read:

Subd. 4.

Funeral and burial expenses.

Funeral and burial benefits shall be
reasonable expenses not in excess of deleted text begin $2,000 deleted text end new text begin $5,000 new text end , including expenses for cremation or
delivery under the Darlene Luther Revised Uniform Anatomical Gift Act, chapter 525A.

Sec. 6.

Minnesota Statutes 2012, section 65B.44, subdivision 5, is amended to read:

Subd. 5.

Replacement service and loss.

Replacement service loss benefits shall
deleted text begin reimburse deleted text end new text begin provide payment for new text end all new text begin reasonable new text end expenses deleted text begin reasonably deleted text end incurred by or on
behalf of the nonfatally injured person in obtaining usual and necessary substitute services
deleted text begin in lieu of those that deleted text end new text begin performed by a nonhousehold member new text end , had the injured person not
been injured, the injured person would have performed not for income but for direct
personal benefit or for the benefit of the injured person's household deleted text begin ; if the nonfatally
injured person normally, as a full time responsibility, provides care and maintenance of a
home with or without children, the benefit to be provided under this subdivision shall be
the reasonable value of such care and maintenance or the reasonable expenses incurred in
obtaining usual and necessary substitute care and maintenance of the home, whichever is
greater deleted text end . These benefits shall be subject to a maximum of $200 per week. All replacement
services loss sustained on the date of injury and the first seven days thereafter is excluded
in calculating replacement services loss.

Sec. 7.

Minnesota Statutes 2012, section 65B.44, subdivision 6, is amended to read:

Subd. 6.

Survivors economic loss benefits.

Survivors economic loss benefits, in
the event of death occurring within one year of the date of the accident, caused by and
arising out of injuries received in the accident, are subject to a maximum of deleted text begin $200 deleted text end new text begin $500
new text end per week and shall cover loss accruing after decedent's death of contributions of money
or tangible things of economic value, not including services, that surviving dependents
would have received from the decedent for their support during their dependency had the
decedent not suffered the injury causing death.

For the purposes of definition under sections 65B.41 to 65B.71, the following
described persons shall be presumed to be dependents of a deceased person: (a) a wife
is dependent on a husband with whom she lives at the time of his death; (b) a husband
is dependent on a wife with whom he lives at the time of her death; (c) any child while
under the age of 18 years, or while over that age but physically or mentally incapacitated
from earning, is dependent on the parent with whom the child is living or from whom the
child is receiving support regularly at the time of the death of such parent new text begin ; or (d) an actual
dependent who lives with the decedent at the time of the decedent's death new text end . Questions of
the existence and the extent of dependency shall be questions of fact, considering the
support regularly received from the deceased.

Payments shall be made to the dependent, except that benefits to a dependent who
is a child or an incapacitated person may be paid to the dependent's surviving parent or
guardian. Payments shall be terminated whenever the recipient ceases to maintain a status
which if the decedent were alive would be that of dependency.

Sec. 8.

Minnesota Statutes 2012, section 65B.47, subdivision 4, is amended to read:

Subd. 4.

Other cases.

In all other cases, the following priorities apply:

(a) The security for payment of basic economic loss benefits applicable to injury to
an insured is the security under which the injured person is an insured.

(b) The security for payment of basic economic loss benefits applicable to injury
to the driver or other occupant of an involved motor vehicle who is not an insured is
the security covering that vehicle.

(c) The security for payment of basic economic loss benefits applicable to injury
to a person not otherwise covered who is not the driver or other occupant of an involved
motor vehicle is the security covering any involved motor vehicle. An unoccupied parked
vehicle is not an involved motor vehicle unless it was parked so as to cause unreasonable
risk of injury.

new text begin (d) The security for payment of basic economic loss benefits applicable to a person
who is injured in or by a vehicle listed in section 168.012, subdivision 1, paragraph (a), is
entitled to security under which the injured person is an insured.
new text end

Sec. 9.

Minnesota Statutes 2012, section 65B.47, subdivision 5, is amended to read:

Subd. 5.

Contribution.

If two or more obligations to pay basic economic loss
benefits are applicable to an injury under the priorities set out in this section, benefits are
payable only once and the reparation obligor against whom a claim is asserted deleted text begin shall deleted text end new text begin must
new text end process and pay the claim as if wholly responsible, but the reparation obligor is thereafter
entitled to recover contribution pro rata for the basic economic loss benefits paid and the
costs of processing the claim. new text begin A reparation obligor failing to comply with this subdivision
is liable for interest as prescribed in section 65B.54. new text end Where contribution is sought among
reparation obligors responsible under subdivision 4, clause (c), proration shall be based on
the number of involved motor vehicles.

Sec. 10.

Minnesota Statutes 2012, section 65B.49, subdivision 3a, is amended to read:

Subd. 3a.

Uninsured and underinsured motorist coverages.

(1) No plan of
reparation security may be renewed, delivered or issued for delivery, or executed in this
state with respect to any motor vehicle registered or principally garaged in this state
unless separate uninsured and underinsured motorist coverages are provided therein. Each
coverage, at a minimum, must provide limits of $25,000 because of injury to or the death
of one person in any accident and $50,000 because of injury to or the death of two or more
persons in any accident. In the case of injury to, or the death of, two or more persons in
any accident, the amount available to any one person must not exceed the coverage limit
provided for injury to, or the death of, one person in any accident.

(2) Every owner of a motor vehicle registered or principally garaged in this state shall
maintain uninsured and underinsured motorist coverages as provided in this subdivision.

(3) No reparation obligor is required to provide limits of uninsured and underinsured
motorist coverages in excess of the bodily injury liability limit provided by the applicable
plan of reparation security.

(4) No recovery shall be permitted under the uninsured and underinsured motorist
coverages of this section for basic economic loss benefits paid or payable, or which would
be payable but for any applicable deductible new text begin for policies of coverage above the minimum
limits provided by this chapter new text end .

(5) If at the time of the accident the injured person is occupying a motor vehicle,
the limit of liability for uninsured and underinsured motorist coverages available to the
injured person is the limit specified for that motor vehicle. However, if the injured person
is occupying a motor vehicle of which the injured person is not an insured, the injured
person may be entitled to excess insurance protection afforded by a policy in which the
injured party is otherwise insured. The excess insurance protection is limited to the extent
of covered damages sustained, and further is available only to the extent by which the limit
of liability for like coverage applicable to any one motor vehicle listed on the automobile
insurance policy of which the injured person is an insured exceeds the limit of liability of
the coverage available to the injured person from the occupied motor vehicle.

If at the time of the accident the injured person is not occupying a motor vehicle or
motorcycle, the injured person is entitled to select any one limit of liability for any one
vehicle afforded by a policy under which the injured person is insured.

(6) Regardless of the number of policies involved, vehicles involved, persons
covered, claims made, vehicles or premiums shown on the policy, or premiums paid, in no
event shall the limit of liability for uninsured and underinsured motorist coverages for two
or more motor vehicles be added together to determine the limit of insurance coverage
available to an injured person for any one accident.

(7) The uninsured and underinsured motorist coverages required by this subdivision
do not apply to bodily injury of the insured while occupying a motor vehicle owned by the
insured, unless the occupied vehicle is an insured motor vehicle.

(8) The uninsured and underinsured motorist coverages required by this subdivision
do not apply to bodily injury of the insured while occupying a motorcycle owned by
the insured.

Sec. 11.

Minnesota Statutes 2012, section 65B.525, subdivision 1, is amended to read:

Subdivision 1.

Mandatory submission to binding arbitration.

new text begin (a) new text end Except as
otherwise provided in section 72A.327, the Supreme Court and the several courts of
general trial jurisdiction of this state shall by rules of court or other constitutionally
allowable device, provide for the mandatory submission to binding arbitration of all cases
at issue where the claim at the commencement of arbitration is in an amount of $10,000
or less against any insured's reparation obligor for no-fault benefits or comprehensive or
collision damage coverage.

new text begin (b) If assigned claims against a reparation obligor are submitted pursuant to this
section, the aggregate amount of the claims is considered to be one claim for purposes of
the jurisdictional dollar limitation in paragraph (a). Aggregated or consolidated claims in
excess of $10,000 must be recovered in an action in district court.
new text end

Sec. 12.

Minnesota Statutes 2012, section 65B.54, subdivision 2, is amended to read:

Subd. 2.

Interest on overdue payments.

Overdue payments shall bear simple
interest at the rate of 15 percent per annum. new text begin Once an obligor has denied benefits from a
specific provider, made a blanket denial of a type of benefits, or issued a general denial of
benefits, interest is due on all overdue benefits within the scope of the denial, regardless
of whether the insured or provider continues to provide ongoing proof of the fact and
amount of each additional loss incurred.
new text end

Sec. 13.

Minnesota Statutes 2012, section 65B.54, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Wrongful provider liens. new text end

new text begin A licensed health care provider who makes,
files, perfects, or records a wrongful lien against the property of an insured for unpaid
medical expense benefits is liable to the insured for $1,000 or actual damages, whichever
is greater, and for reasonable attorney fees and costs.
new text end

new text begin For purposes of this subdivision, "wrongful lien" means a document that the health
care provider knows, or has reason to know:
new text end

new text begin (1) is groundless;
new text end

new text begin (2) contains a material misstatement or false claim; or
new text end

new text begin (3) attempts to preserve and enforce a legal interest or right in the insured's property
when none is provided by law.
new text end

Sec. 14.

Minnesota Statutes 2012, section 65B.54, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Health care provider claims arbitration limited. new text end

new text begin A health care provider
shall not submit any medical benefit claims to arbitration pursuant to section 65B.525 as
an assignment of benefits assignee.
new text end

Sec. 15.

Minnesota Statutes 2012, section 65B.56, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Medical deleted text end new text begin Physical new text end examinations new text begin or evaluations new text end and discovery of
condition of claimant.

Any person with respect to whose injury benefits are claimed
under a plan of reparation security shall, upon request of the reparation obligor from
whom recovery is sought, submit to a physical examination new text begin or evaluation new text end by a physician or
deleted text begin physicians deleted text end new text begin licensed provider or other providers new text end selected by the obligor as may reasonably
be required. new text begin The person being examined is entitled upon request to have a nonmedical
observer present at any examination done pursuant to this subdivision.
new text end

The costs of any examinations requested by the obligor shall be borne entirely by
the requesting obligor. Such examinations shall be conducted within the city, town, or
statutory city of residence of the injured person. new text begin Examinations must not be conducted
in hotel or motel facilities. new text end If there is no qualified deleted text begin physician deleted text end new text begin examiner new text end to conduct the
examination within the city, town, or statutory city of residence of the injured person,
then such examination shall be conducted at another place of the closest proximity to
the injured person's residence. new text begin If the injured person has moved out of Minnesota, the
examination may take place at the reparation obligor's expense in or near the last city of
residence within Minnesota. new text end Obligors are authorized to include reasonable provisions in
policies for mental and physical examination of those injured persons.

If requested by the person examined, a party causing an examination to be made
shall deliver to the examinee a copy of every written report concerning the examination
rendered by an examining physician to that person, at least one of which reports must set
out in detail the findings and conclusions of deleted text begin such examining physician deleted text end new text begin the examiner new text end .

An injured person shall also do all things reasonably necessary to enable the obligor
to obtain medical reports and other needed information to assist in determining the
nature and extent of the injured person's injuries and loss, and the medical treatment
received. If the claimant refuses to cooperate in responding to requests for examination
and information as authorized by this section, evidence of such noncooperation shall be
admissible in any suit or arbitration filed for damages for such personal injuries or for the
benefits provided by sections 65B.41 to 65B.71.

The provisions of this section apply before and after the commencement of suit.

Sec. 16.

Minnesota Statutes 2012, section 72A.327, is amended to read:

72A.327 HEALTH CLAIMS; RIGHTS OF APPEAL.

(a) An insured whose claim for medical benefits under chapter 65B is denied because
the treatment or services for which the claim is made is claimed to be experimental,
investigative, not medically necessary, or otherwise not generally accepted by licensed
health care providers and for which the insured has financial responsibility in excess of
applicable co-payments and deductibles may appeal the denial to the commissioner. new text begin For
purposes of this section, "insured" does not include an assignment of benefits assignee.
new text end

(b) This section does not apply to claims for health benefits which have been
arbitrated under section 65B.525, subdivision 1.

(c) A three-member panel shall review the denial of the claim and report to the
commissioner. The commissioner shall establish a list of qualified individuals who are
eligible to serve on the panel. In establishing the list, the commissioner shall consult with
representatives of the contributing members as defined in section 65B.01, subdivision 2,
and professional societies. Each panel must include: one person with medical expertise as
identified by the contributing members; one person with medical expertise as identified by
the professional societies; and one public member. The commissioner, upon initiation of an
arbitration, shall select from each list three potential arbitrators and shall notify the issuer
and the claimant of the selection. Each party shall strike one of the potential arbitrators and
an arbitrator shall be selected by the commissioner from the remaining names of potential
arbitrators if more than one potential arbitrator is left. In the event of multiparty arbitration,
the commissioner may increase the number of potential arbitrators and divide the strikes
so as to afford an equal number of strikes to each adverse interest. If the selected arbitrator
is unable or unwilling to serve for any reason, the commissioner may appoint an arbitrator,
which will be subject to challenge only for cause. The party that denied the coverage has
the burden of proving that the services or treatment are experimental, investigative, not
medically necessary, or not generally accepted by licensed health care professionals. In
determining whether the burden has been met, the panel may consider expert testimony,
medical literature, and any other relevant sources. If the party fails to sustain its burden,
the commissioner may order the immediate payment of the claim. All proceedings of the
panel and any documents received or developed by the review process are nonpublic.

(d) A person aggrieved by an order under this section may appeal the order. The
appeal shall be pursuant to section 65B.525 where appropriate, or to the district court
for a trial de novo, in all other cases. In nonemergency situations, if the insurer has an
internal grievance or appeal process, the insured must exhaust that process before the
external appeal. In no event shall the internal grievance process exceed the time limits
described in section 72A.201, subdivision 4a.

(e) If prior authorization is required before services or treatment can be rendered, an
appeal of the denial of prior authorization may be made as provided in this section.

(f) The commissioner shall adopt procedural rules for the conduct of appeals.

deleted text begin (g) The permanent rulemaking authority granted in this section is effective June 2,
1989, regardless of the actual effective date of January 1, 1990.
deleted text end

Sec. 17. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin Sections 2 to 16 are effective January 1, 2014, and apply to plans of reparation
security issued or renewed on or after that date.
new text end