1.1                          A bill for an act 
  1.2             relating to workers' compensation; making technical 
  1.3             changes; modifying the definition of "personal injury" 
  1.4             to include injury or disease resulting from certain 
  1.5             vaccines; authorizing qualifying employees to opt to 
  1.6             receive alternative workers' compensation benefits; 
  1.7             amending Minnesota Statutes 2002, sections 176.011, 
  1.8             subdivisions 15, 16; 176.081, subdivision 1; 176.092, 
  1.9             subdivision 1a; 176.102, subdivision 3a; 176.129, 
  1.10            subdivisions 1b, 2a, 13; 176.135, subdivisions 1, 7; 
  1.11            176.1351, subdivisions 3, 5, by adding a subdivision; 
  1.12            176.181, by adding a subdivision; 176.1812, 
  1.13            subdivision 6; 176.185, subdivision 1; 176.231, 
  1.14            subdivision 5; 176.238, subdivision 10; 176.391, 
  1.15            subdivision 2; 176.83, subdivision 5. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 2002, section 176.011, 
  1.18  subdivision 15, is amended to read: 
  1.19     Subd. 15.  [OCCUPATIONAL DISEASE.] (a) "Occupational 
  1.20  disease" means a disease arising out of and in the course of 
  1.21  employment peculiar to the occupation in which the employee is 
  1.22  engaged and due to causes in excess of the hazards ordinary of 
  1.23  employment and shall include undulant fever.  Ordinary diseases 
  1.24  of life to which the general public is equally exposed outside 
  1.25  of employment are not compensable, except where the diseases 
  1.26  follow as an incident of an occupational disease, or where the 
  1.27  exposure peculiar to the occupation makes the disease an 
  1.28  occupational disease hazard.  A disease arises out of the 
  1.29  employment only if there be a direct causal connection between 
  1.30  the conditions under which the work is performed and if the 
  2.1   occupational disease follows as a natural incident of the work 
  2.2   as a result of the exposure occasioned by the nature of the 
  2.3   employment.  An employer is not liable for compensation for any 
  2.4   occupational disease which cannot be traced to the employment as 
  2.5   a direct and proximate cause and is not recognized as a hazard 
  2.6   characteristic of and peculiar to the trade, occupation, 
  2.7   process, or employment or which results from a hazard to which 
  2.8   the worker would have been equally exposed outside of the 
  2.9   employment.  
  2.10     (b) If immediately preceding the date of disablement or 
  2.11  death, an employee was employed on active duty with an organized 
  2.12  fire or police department of any municipality, as a member of 
  2.13  the Minnesota State Patrol, conservation officer service, state 
  2.14  crime bureau, as a forest officer by the Department of Natural 
  2.15  Resources, state correctional officer, or sheriff or full-time 
  2.16  deputy sheriff of any county, and the disease is that of 
  2.17  myocarditis, coronary sclerosis, pneumonia or its sequel, and at 
  2.18  the time of employment such employee was given a thorough 
  2.19  physical examination by a licensed doctor of medicine, and a 
  2.20  written report thereof has been made and filed with such 
  2.21  organized fire or police department, with the Minnesota State 
  2.22  Patrol, conservation officer service, state crime bureau, 
  2.23  Department of Natural Resources, Department of Corrections, or 
  2.24  sheriff's department of any county, which examination and report 
  2.25  negatived any evidence of myocarditis, coronary sclerosis, 
  2.26  pneumonia or its sequel, the disease is presumptively an 
  2.27  occupational disease and shall be presumed to have been due to 
  2.28  the nature of employment.  If immediately preceding the date of 
  2.29  disablement or death, any individual who by nature of their 
  2.30  position provides emergency medical care, or an employee who was 
  2.31  employed as a licensed police officer under section 626.84, 
  2.32  subdivision 1; firefighter; paramedic; state correctional 
  2.33  officer; emergency medical technician; or licensed nurse 
  2.34  providing emergency medical care; and who contracts an 
  2.35  infectious or communicable disease to which the employee was 
  2.36  exposed in the course of employment outside of a hospital, then 
  3.1   the disease is presumptively an occupational disease and shall 
  3.2   be presumed to have been due to the nature of employment and the 
  3.3   presumption may be rebutted by substantial factors brought by 
  3.4   the employer or insurer.  Any substantial factors which shall be 
  3.5   used to rebut this presumption and which are known to the 
  3.6   employer or insurer at the time of the denial of liability shall 
  3.7   be communicated to the employee on the denial of liability. 
  3.8      (c) A firefighter on active duty with an organized fire 
  3.9   department who is unable to perform duties in the department by 
  3.10  reason of a disabling cancer of a type caused by exposure to 
  3.11  heat, radiation, or a known or suspected carcinogen, as defined 
  3.12  by the International Agency for Research on Cancer, and the 
  3.13  carcinogen is reasonably linked to the disabling cancer, is 
  3.14  presumed to have an occupational disease under paragraph (a).  
  3.15  If a firefighter who enters the service after August 1, 1988, is 
  3.16  examined by a physician prior to being hired and the examination 
  3.17  discloses the existence of a cancer of a type described in this 
  3.18  paragraph, the firefighter is not entitled to the presumption 
  3.19  unless a subsequent medical determination is made that the 
  3.20  firefighter no longer has the cancer. 
  3.21     Sec. 2.  Minnesota Statutes 2002, section 176.011, 
  3.22  subdivision 16, is amended to read: 
  3.23     Subd. 16.  [PERSONAL INJURY.] "Personal injury" means 
  3.24  injury arising out of and in the course of employment and 
  3.25  includes personal injury caused by occupational disease; but 
  3.26  does not cover an employee except while engaged in, on, or about 
  3.27  the premises where the employee's services require the 
  3.28  employee's presence as a part of that service at the time of the 
  3.29  injury and during the hours of that service.  Where the employer 
  3.30  regularly furnished transportation to employees to and from the 
  3.31  place of employment, those employees are subject to this chapter 
  3.32  while being so transported.  Personal injury does not include an 
  3.33  injury caused by the act of a third person or fellow employee 
  3.34  intended to injure the employee because of personal reasons, and 
  3.35  not directed against the employee as an employee, or because of 
  3.36  the employment.  An injury or disease resulting from a vaccine 
  4.1   in response to a declaration by the Secretary of the United 
  4.2   States Department of Health and Human Services under the Public 
  4.3   Health Service Act to address an actual or potential health risk 
  4.4   related to the employee's employment is an injury or disease 
  4.5   arising out of and in the course of employment. 
  4.6      <b>[EFFECTIVE DATE.]</b> This section is effective January 24, 
  4.7   2003. 
  4.8      Sec. 3.  Minnesota Statutes 2002, section 176.081, 
  4.9   subdivision 1, is amended to read: 
  4.10     Subdivision 1.  [LIMITATION OF FEES.] (a) A fee for legal 
  4.11  services of 25 percent of the first $4,000 of compensation 
  4.12  awarded to the employee and 20 percent of the next $60,000 of 
  4.13  compensation awarded to the employee is the maximum permissible 
  4.14  fee and does not require approval by the commissioner, 
  4.15  compensation judge, or any other party.  All fees, including 
  4.16  fees for obtaining medical or rehabilitation benefits, must be 
  4.17  calculated according to the formula under this subdivision, 
  4.18  except as otherwise provided in clause (1) or (2).  
  4.19     (1) The contingent attorney fee for recovery of monetary 
  4.20  benefits according to the formula in this section is presumed to 
  4.21  be adequate to cover recovery of medical and rehabilitation 
  4.22  benefit or services concurrently in dispute.  Attorney fees for 
  4.23  recovery of medical or rehabilitation benefits or services shall 
  4.24  be assessed against the employer or insurer only if the attorney 
  4.25  establishes that the contingent fee is inadequate to reasonably 
  4.26  compensate the attorney for representing the employee in the 
  4.27  medical or rehabilitation dispute.  In cases where the 
  4.28  contingent fee is inadequate the employer or insurer is liable 
  4.29  for attorney fees based on the formula in this subdivision or in 
  4.30  clause (2). 
  4.31     For the purposes of applying the formula where the employer 
  4.32  or insurer is liable for attorney fees, the amount of 
  4.33  compensation awarded for obtaining disputed medical and 
  4.34  rehabilitation benefits under sections 176.102, 176.135, and 
  4.35  176.136 shall be the dollar value of the medical or 
  4.36  rehabilitation benefit awarded, where ascertainable.  
  5.1      (2) The maximum attorney fee for obtaining a change of 
  5.2   doctor or qualified rehabilitation consultant, or any other 
  5.3   disputed medical or rehabilitation benefit for which a dollar 
  5.4   value is not reasonably ascertainable, is the amount charged in 
  5.5   hourly fees for the representation or $500, whichever is less, 
  5.6   to be paid by the employer or insurer. 
  5.7      (3) The fees for obtaining disputed medical or 
  5.8   rehabilitation benefits are included in the $13,000 limit in 
  5.9   paragraph (b).  An attorney must concurrently file all 
  5.10  outstanding disputed issues.  An attorney is not entitled to 
  5.11  attorney fees for representation in any issue which could 
  5.12  reasonably have been addressed during the pendency of other 
  5.13  issues for the same injury. 
  5.14     (b) All fees for legal services related to the same injury 
  5.15  are cumulative and may not exceed $13,000.  If multiple injuries 
  5.16  are the subject of a dispute, the commissioner, compensation 
  5.17  judge, or court of appeals shall specify the attorney fee 
  5.18  attributable to each injury.  
  5.19     (c) If the employer or the insurer or the defendant is 
  5.20  given written notice of claims for legal services or 
  5.21  disbursements, the claim shall be a lien against the amount paid 
  5.22  or payable as compensation.  Subject to the foregoing maximum 
  5.23  amount for attorney fees, up to 25 percent of the first $4,000 
  5.24  of periodic compensation awarded to the employee and 20 percent 
  5.25  of the next $60,000 of periodic compensation awarded to the 
  5.26  employee may be withheld from the periodic payments for attorney 
  5.27  fees or disbursements if the payor of the funds clearly 
  5.28  indicates on the check or draft issued to the employee for 
  5.29  payment the purpose of the withholding, the name of the 
  5.30  attorney, the amount withheld, and the gross amount of the 
  5.31  compensation payment before withholding.  In no case shall fees 
  5.32  be calculated on the basis of any undisputed portion of 
  5.33  compensation awards.  Allowable fees under this chapter shall be 
  5.34  based solely upon genuinely disputed claims or portions of 
  5.35  claims, including disputes related to the payment of 
  5.36  rehabilitation benefits or to other aspects of a rehabilitation 
  6.1   plan.  The existence of a dispute is dependent upon a 
  6.2   disagreement after the employer or insurer has had adequate time 
  6.3   and information to take a position on liability.  Neither the 
  6.4   holding of a hearing nor the filing of an application for a 
  6.5   hearing alone may determine the existence of a dispute.  Except 
  6.6   where the employee is represented by an attorney in other 
  6.7   litigation pending at the department or at the Office of 
  6.8   Administrative Hearings, a fee may not be charged after June 1, 
  6.9   1996, for services with respect to a medical or rehabilitation 
  6.10  issue arising under section 176.102, 176.135, or 176.136 
  6.11  performed before the employee has consulted with the department 
  6.12  and the department certifies that there is a dispute and that it 
  6.13  has tried to resolve the dispute.  
  6.14     (d) An attorney who is claiming legal fees for representing 
  6.15  an employee in a workers' compensation matter shall file a 
  6.16  statement of attorney fees with the commissioner, compensation 
  6.17  judge before whom the matter was heard, or Workers' Compensation 
  6.18  Court of Appeals on cases before the court.  A copy of the 
  6.19  signed retainer agreement shall also be filed.  The employee and 
  6.20  insurer shall receive a copy of the statement.  The statement 
  6.21  shall be on a form prescribed by the commissioner and shall 
  6.22  report the number of hours spent on the case.  
  6.23     (e) Employers and insurers may not pay attorney fees or 
  6.24  wages for legal services of more than $13,000 per case.  
  6.25     (f) Each insurer and self-insured employer shall file 
  6.26  annual statements with the commissioner detailing the total 
  6.27  amount of legal fees and other legal costs incurred by the 
  6.28  insurer or employer during the year.  The statement shall 
  6.29  include the amount paid for outside and in-house counsel, 
  6.30  deposition and other witness fees, and all other costs relating 
  6.31  to litigation. 
  6.32     (g) An attorney must file a statement of attorney fees 
  6.33  within 12 months of the date the attorney has submitted the 
  6.34  written notice specified in paragraph (c).  If the attorney has 
  6.35  not filed a statement of attorney fees within the 12 months, the 
  6.36  attorney must send a renewed notice of lien to the insurer.  If 
  7.1   12 months have elapsed since the last notice of lien has been 
  7.2   received by the insurer and no statement of attorney fees has 
  7.3   been filed, the insurer must release the withheld money to the 
  7.4   employee, except that before releasing the money to the 
  7.5   employee, the insurer must give the attorney 30 days' written 
  7.6   notice of the pending release.  The insurer must not release the 
  7.7   money if the attorney files a statement of attorney fees within 
  7.8   the 30 days. 
  7.9      Sec. 4.  Minnesota Statutes 2002, section 176.092, 
  7.10  subdivision 1a, is amended to read: 
  7.11     Subd. 1a.  [PARENT AS GUARDIAN.] A parent is presumed to be 
  7.12  the guardian of the minor employee for purposes of this 
  7.13  section.  Where the parents of the minor employee are divorced, 
  7.14  either parent with legal custody may be considered the guardian 
  7.15  for purposes of this section.  Notwithstanding subdivision 1, 
  7.16  where the employee receives or is eligible for a lump sum 
  7.17  payment of permanent total disability benefits, supplementary 
  7.18  benefits, or permanent partial disability benefits totaling more 
  7.19  than $3,000 or if the employee receives or is offered a 
  7.20  settlement that exceeds five times the statewide average weekly 
  7.21  wage, the compensation judge shall review such cases to 
  7.22  determine whether benefits should be paid in a lump sum or 
  7.23  through an annuity. 
  7.24     Sec. 5.  Minnesota Statutes 2002, section 176.102, 
  7.25  subdivision 3a, is amended to read: 
  7.26     Subd. 3a.  [DISCIPLINARY ACTIONS.] The panel has authority 
  7.27  to discipline qualified rehabilitation consultants and vendors 
  7.28  and may impose a penalty of up to $3,000 per violation, payable 
  7.29  to the commissioner for deposit in the special compensation fund 
  7.30  assigned risk safety account, and may suspend or revoke 
  7.31  certification.  Complaints against registered qualified 
  7.32  rehabilitation consultants and vendors shall be made to the 
  7.33  commissioner who shall investigate all complaints.  If the 
  7.34  investigation indicates a violation of this chapter or rules 
  7.35  adopted under this chapter, the commissioner may initiate a 
  7.36  contested case proceeding under the provisions of chapter 14.  
  8.1   In these cases, the rehabilitation review panel shall make the 
  8.2   final decision following receipt of the report of an 
  8.3   administrative law judge.  The decision of the panel is 
  8.4   appealable to the Workers' Compensation Court of Appeals in the 
  8.5   manner provided by section 176.421.  The panel shall 
  8.6   continuously study rehabilitation services and delivery, develop 
  8.7   and recommend rehabilitation rules to the commissioner, and 
  8.8   assist the commissioner in accomplishing public education. 
  8.9      The commissioner may appoint alternates for one-year terms 
  8.10  to serve as a member when a member is unavailable.  The number 
  8.11  of alternates shall not exceed one labor member, one employer or 
  8.12  insurer member, and one member representing medicine, 
  8.13  chiropractic, or rehabilitation. 
  8.14     Sec. 6.  Minnesota Statutes 2002, section 176.129, 
  8.15  subdivision 1b, is amended to read: 
  8.16     Subd. 1b.  [DEFINITIONS.] (a) For purposes of this section, 
  8.17  the terms defined in this subdivision have the meanings given 
  8.18  them. 
  8.19     (b) "Paid indemnity losses" means gross benefits paid for 
  8.20  temporary total disability, economic recovery compensation, 
  8.21  permanent partial disability, temporary partial disability, 
  8.22  impairment compensation, permanent total disability, vocational 
  8.23  rehabilitation benefits retraining compensation paid to the 
  8.24  employee as provided by section 176.102, subdivision 11, or 
  8.25  dependency benefits, exclusive of medical and supplementary 
  8.26  benefits.  In the case of policy deductibles, paid indemnity 
  8.27  losses includes all benefits paid, including the amount below 
  8.28  deductible limits. 
  8.29     (c) "Standard workers' compensation premium" means the data 
  8.30  service organization's designated statistical reporting pure 
  8.31  premium after the application of experience rating plan 
  8.32  adjustments excluding retrospective rating plan adjustments, 
  8.33  other individual risk rating plan adjustments such as schedule 
  8.34  rating, premium credits for small and large deductible coverage, 
  8.35  and other deviations from the data service organization's 
  8.36  designated statistical reporting pure premiums and experience 
  9.1   rating plan modification factors but prior to the application of 
  9.2   premium discounts, policyholder dividends, other premium 
  9.3   adjustments, and expense constants, and other deviations from 
  9.4   the designated statistical reporting pure premium. 
  9.5      Sec. 7.  Minnesota Statutes 2002, section 176.129, 
  9.6   subdivision 2a, is amended to read: 
  9.7      Subd. 2a.  [PAYMENTS TO FUND.] (a) On or before April 1 of 
  9.8   each year, all self-insured employers shall report paid 
  9.9   indemnity losses and insurers shall report paid indemnity losses 
  9.10  and standard workers' compensation premium in the form and 
  9.11  manner prescribed by the commissioner.  On June 1 of each year, 
  9.12  the commissioner shall determine the total amount needed to pay 
  9.13  all estimated liabilities, including administrative expenses, of 
  9.14  the special compensation fund for the following fiscal year.  
  9.15  The commissioner shall assess this amount against self-insured 
  9.16  employers and insurers.  The total amount of the assessment must 
  9.17  be allocated between self-insured employers and insured 
  9.18  employers based on paid indemnity losses for the preceding 
  9.19  calendar year, as provided by paragraph (b).  The method of 
  9.20  assessing self-insured employers must be based on paid indemnity 
  9.21  losses, as provided by paragraph (c).  The method of assessing 
  9.22  insured employers is based on standard workers' compensation 
  9.23  premium, collectible as provided by paragraph (c).  Each insurer 
  9.24  shall collect the assessment through a policyholder surcharge as 
  9.25  provided by paragraph (d).  On or before June 30 of each year, 
  9.26  the commissioner shall provide notification to each self-insured 
  9.27  employer and insurer of amounts due.  Each self-insured employer 
  9.28  and each insurer shall pay at least one-half of the payment 
  9.29  shall be made amount due to the commissioner for deposit into 
  9.30  the special compensation fund on or before August 1 of the same 
  9.31  calendar year.  The remaining balance is due on February 1 of 
  9.32  the following calendar year.  Each insurer must pay the full 
  9.33  amount due as stated in the commissioner's notification, 
  9.34  regardless of the amount the insurer actually collects from the 
  9.35  premium surcharge. 
  9.36     (b) The portion of the total amount assessment that is 
 10.1   collected from allocated to self-insured employers is equal to 
 10.2   that the proportion of the that paid indemnity losses for the 
 10.3   preceding calendar year, which the paid indemnity losses of made 
 10.4   by all self-insured employers bore to the total paid indemnity 
 10.5   losses made by all self-insured employers and insured employers 
 10.6   during the preceding calendar year.  The portion of the 
 10.7   total amount assessment that is collected from allocated to 
 10.8   insured employers is equal to that the proportion of the total 
 10.9   that paid indemnity losses made on behalf of all insured 
 10.10  employers bore to the total paid indemnity losses on behalf of 
 10.11  made by all self-insured employers and insured employers during 
 10.12  the preceding calendar year.  
 10.13     (c) The portion of the total assessment allocated to 
 10.14  self-insured employers that shall be paid by each self-insured 
 10.15  employer must be based upon paid indemnity losses made by that 
 10.16  self-insured employer during the preceding calendar year.  The 
 10.17  portion of the total assessment allocated to insured employers 
 10.18  that is collected from paid by each insured employer insurer 
 10.19  must be based on standard workers' compensation premium written 
 10.20  earned in the state by that insurer during the preceding 
 10.21  calendar year.  An employer who has ceased to be self-insured 
 10.22  shall continue to be liable for assessments based on paid 
 10.23  indemnity losses made by the employer in the preceding calendar 
 10.24  year arising out of injuries occurring during periods when the 
 10.25  employer was self-insured, unless the self-insured employer has 
 10.26  purchased a replacement policy covering those losses.  An 
 10.27  insurer who assumes a self-insured employer's obligation under a 
 10.28  replacement policy shall separately report and pay assessments 
 10.29  based on indemnity losses paid by the insurer under the 
 10.30  replacement policy.  The replacement policy may provide for 
 10.31  reimbursement of the assessment to the insurer by the 
 10.32  self-insured employer. 
 10.33     (c) (d) Insurers shall collect the assessments from their 
 10.34  insured employers through a surcharge based on standard workers' 
 10.35  compensation premium, as provided in paragraph (a) for each 
 10.36  employer.  Assessments when collected do not constitute an 
 11.1   element of loss for the purpose of establishing rates for 
 11.2   workers' compensation insurance but for the purpose of 
 11.3   collection are treated as separate costs imposed on insured 
 11.4   employers.  The premium surcharge is included in the definition 
 11.5   of gross premium as defined in section 297I.01.  An insurer may 
 11.6   cancel a policy for nonpayment of the premium surcharge.  The 
 11.7   premium surcharge is excluded from the definition of premium 
 11.8   except as otherwise provided in this paragraph. 
 11.9      (e) For purposes of this section, the workers' compensation 
 11.10  assigned-risk plan established under section 79.252, shall 
 11.11  report and pay assessments on standard workers' compensation 
 11.12  premium in the same manner as an insurer. 
 11.13     Sec. 8.  Minnesota Statutes 2002, section 176.129, 
 11.14  subdivision 13, is amended to read: 
 11.15     Subd. 13.  [EMPLOYER REPORTS.] All employers and insurers 
 11.16  shall make reports to the commissioner as required for the 
 11.17  proper administration of this section and Minnesota Statutes 
 11.18  1990, section 176.131, and Minnesota Statutes 1994, section 
 11.19  176.132.  Employers and insurers may not be reimbursed from the 
 11.20  special compensation fund for any periods unless the employer or 
 11.21  insurer is up to date with all past due and currently due 
 11.22  assessments, penalties, and reports to the special compensation 
 11.23  fund under this section.  The commissioner may allow an offset 
 11.24  of the reimbursements due an employer or insurer pursuant to 
 11.25  Minnesota Statutes 1990, section 176.131, and Minnesota Statutes 
 11.26  1994, section 176.132, against the assessment due under this 
 11.27  section. 
 11.28     <b>[EFFECTIVE DATE.]</b> This section is effective for assessments 
 11.29  after July 1, 2004. 
 11.30     Sec. 9.  Minnesota Statutes 2002, section 176.135, 
 11.31  subdivision 1, is amended to read: 
 11.32     Subdivision 1.  [MEDICAL, PSYCHOLOGICAL, CHIROPRACTIC, 
 11.33  PODIATRIC, SURGICAL, HOSPITAL.] (a) The employer shall furnish 
 11.34  any medical, psychological, chiropractic, podiatric, surgical 
 11.35  and hospital treatment, including nursing, medicines, medical, 
 11.36  chiropractic, podiatric, and surgical supplies, crutches and 
 12.1   apparatus, including artificial members, or, at the option of 
 12.2   the employee, if the employer has not filed notice as 
 12.3   hereinafter provided, Christian Science treatment in lieu of 
 12.4   medical treatment, chiropractic medicine and medical supplies, 
 12.5   as may reasonably be required at the time of the injury and any 
 12.6   time thereafter to cure and relieve from the effects of the 
 12.7   injury.  This treatment shall include treatments necessary to 
 12.8   physical rehabilitation. 
 12.9      (b) The employer shall pay for the reasonable value of 
 12.10  nursing services provided by a member of the employee's family 
 12.11  in cases of permanent total disability.  
 12.12     (c) Exposure to rabies is an injury and an employer shall 
 12.13  furnish preventative treatment to employees exposed to rabies. 
 12.14     (d) The employer shall furnish replacement or repair for 
 12.15  artificial members, glasses or spectacles, artificial eyes, 
 12.16  podiatric orthotics, dental bridge work, dentures or artificial 
 12.17  teeth, hearing aids, canes, crutches, or wheel chairs damaged by 
 12.18  reason of an injury arising out of and in the course of the 
 12.19  employment.  For the purpose of this paragraph, "injury" 
 12.20  includes damage wholly or in part to an artificial member.  In 
 12.21  case of the employer's inability or refusal seasonably to 
 12.22  provide the items required to be provided under this paragraph, 
 12.23  the employer is liable for the reasonable expense incurred by or 
 12.24  on behalf of the employee in providing the same, including costs 
 12.25  of copies of any medical records or medical reports that are in 
 12.26  existence, obtained from health care providers, and that 
 12.27  directly relate to the items for which payment is sought under 
 12.28  this chapter, limited to the charges allowed by subdivision 7, 
 12.29  and attorney fees incurred by the employee.  
 12.30     (e) Both the commissioner and the compensation judges have 
 12.31  authority to make determinations under this section in 
 12.32  accordance with sections 176.106 and 176.305.  
 12.33     (f) An employer may require that the treatment and supplies 
 12.34  required to be provided by an employer by this section be 
 12.35  received in whole or in part from a managed care plan certified 
 12.36  under section 176.1351 except as otherwise provided by that 
 13.1   section. 
 13.2      (g) An employer may designate a pharmacy or network of 
 13.3   pharmacies that employees must use to obtain outpatient 
 13.4   prescription and nonprescription medications.  An employee is 
 13.5   not required to obtain outpatient medications at a designated 
 13.6   pharmacy unless it is located within 15 miles of either the 
 13.7   employee's place of employment or residence. 
 13.8      Notwithstanding any fees established by rule adopted under 
 13.9   section 176.136, an employer may contract for the cost of 
 13.10  medication provided to employees.  However, before entering into 
 13.11  any contract with a vendor for the cost of medication, the 
 13.12  vendor must disclose to the employer the nature and amount of 
 13.13  any rebates, discounts, or other financial incentives the vendor 
 13.14  has received or will receive from drug manufacturers and 
 13.15  wholesale drug distributors as those entities are defined in 
 13.16  section 151.44. 
 13.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 13.18  following final enactment. 
 13.19     Sec. 10.  Minnesota Statutes 2002, section 176.135, 
 13.20  subdivision 7, is amended to read: 
 13.21     Subd. 7.  [MEDICAL BILLS AND RECORDS.] Health care 
 13.22  providers shall submit to the insurer an itemized statement of 
 13.23  charges on a billing form prescribed by the commissioner.  A 
 13.24  paper billing form is not required if the health care provider 
 13.25  and insurer agree to electronic submission under section 62J.535.
 13.26  Health care providers shall also submit copies of medical 
 13.27  records or reports that substantiate the nature of the charge 
 13.28  and its relationship to the work injury.  Health care providers 
 13.29  may charge for copies of any records or reports that are in 
 13.30  existence and directly relate to the items for which payment is 
 13.31  sought under this chapter.  The commissioner shall adopt a 
 13.32  schedule of reasonable charges by rule. 
 13.33     A health care provider shall not collect, attempt to 
 13.34  collect, refer a bill for collection, or commence an action for 
 13.35  collection against the employee, employer, or any other party 
 13.36  until the information required by this section has been 
 14.1   furnished.  
 14.2      A United States government facility rendering health care 
 14.3   services to veterans is not subject to the uniform billing form 
 14.4   requirements of this subdivision. 
 14.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 14.6   following final enactment. 
 14.7      Sec. 11.  Minnesota Statutes 2002, section 176.1351, 
 14.8   subdivision 3, is amended to read: 
 14.9      Subd. 3.  [DISPUTE RESOLUTION.] If an insurer or 
 14.10  self-insured employer has contracted for dispute resolution 
 14.11  services from a certified managed care plan, an employee must 
 14.12  exhaust the dispute resolution procedure of the certified 
 14.13  managed care plan prior to filing a petition or otherwise 
 14.14  seeking relief from the commissioner or a compensation judge on 
 14.15  an issue related to managed care.  If an employee has exhausted 
 14.16  the dispute resolution procedure of the managed care plan on the 
 14.17  issue of a rating for a disability, or if the insurer or 
 14.18  self-insured employer's contract with the managed care plan does 
 14.19  not provide for dispute resolution, the employee may seek a 
 14.20  disability rating from a health care provider outside of the 
 14.21  managed care organization.  The employer is liable for the 
 14.22  reasonable fees of the outside provider as limited by the 
 14.23  medical fee schedule adopted under this chapter.  
 14.24     Sec. 12.  Minnesota Statutes 2002, section 176.1351, is 
 14.25  amended by adding a subdivision to read: 
 14.26     Subd. 4a.  [COMPONENTS OF MANAGED CARE; HEALTH CARE 
 14.27  PROVIDER FEES.] (a) A certified managed care plan may offer peer 
 14.28  review, utilization review, case management, and dispute 
 14.29  resolution functions as separate, optional components to 
 14.30  insurers and self-insured employers.  The components of 
 14.31  certified managed care that will be utilized must be specified 
 14.32  in each contract with insurers or self-insured employers, and 
 14.33  must be included in the notice of certified managed care 
 14.34  coverage to injured workers. 
 14.35     (b) The contract between a certified managed care plan and 
 14.36  participating health care providers may establish fees for 
 15.1   services, articles, and supplies provided to injured workers.  
 15.2   The fees agreed to may be different from the maximum fees 
 15.3   established under section 176.136. 
 15.4      Sec. 13.  Minnesota Statutes 2002, section 176.1351, 
 15.5   subdivision 5, is amended to read: 
 15.6      Subd. 5.  [REVOCATION, SUSPENSION, AND REFUSAL TO CERTIFY; 
 15.7   PENALTIES AND ENFORCEMENT.] (a) The commissioner shall refuse to 
 15.8   certify or shall revoke or suspend the certification of a 
 15.9   managed care plan if the commissioner finds that the plan for 
 15.10  providing medical or health care services fails to meet the 
 15.11  requirements of this section, or service under the plan is not 
 15.12  being provided in accordance with the terms of a certified plan. 
 15.13     (b) In lieu of or in addition to suspension or revocation 
 15.14  under paragraph (a), the commissioner may, for any noncompliance 
 15.15  with the managed care plan as certified or any violation of a 
 15.16  statute or rule applicable to a managed care plan, assess an 
 15.17  administrative penalty payable to the commissioner for deposit 
 15.18  in the special compensation fund assigned risk safety account in 
 15.19  an amount up to $25,000 for each violation or incidence of 
 15.20  noncompliance.  The commissioner may adopt rules necessary to 
 15.21  implement this subdivision.  In determining the level of an 
 15.22  administrative penalty, the commissioner shall consider the 
 15.23  following factors: 
 15.24     (1) the number of workers affected or potentially affected 
 15.25  by the violation or noncompliance; 
 15.26     (2) the effect or potential effect of the violation or 
 15.27  noncompliance on workers' health, access to health services, or 
 15.28  workers' compensation benefits; 
 15.29     (3) the effect or potential effect of the violation or 
 15.30  noncompliance on workers' understanding of their rights and 
 15.31  obligations under the workers' compensation law and rules; 
 15.32     (4) whether the violation or noncompliance is an isolated 
 15.33  incident or part of a pattern of violations; and 
 15.34     (5) the potential or actual economic benefits derived by 
 15.35  the managed care plan or a participating provider by virtue of 
 15.36  the violation or noncompliance. 
 16.1      The commissioner shall give written notice to the managed 
 16.2   care plan of the penalty assessment and the reasons for the 
 16.3   penalty.  The managed care plan has 30 days from the date the 
 16.4   penalty notice is issued within which to file a written request 
 16.5   for an administrative hearing and review of the commissioner's 
 16.6   determination pursuant to section 176.85, subdivision 1. 
 16.7      (c) If the commissioner, for any reason, has cause to 
 16.8   believe that a managed care plan has or may violate a statute or 
 16.9   rule or a provision of the managed care plan as certified, the 
 16.10  commissioner may, before commencing action under paragraph (a) 
 16.11  or (b), call a conference with the managed care plan and other 
 16.12  persons who may be involved in the suspected violation or 
 16.13  noncompliance for the purpose of ascertaining the facts relating 
 16.14  to the suspected violation or noncompliance and arriving at an 
 16.15  adequate and effective means of correcting or preventing the 
 16.16  violation or noncompliance.  The commissioner may enter into 
 16.17  stipulated consent agreements with the managed care plan for 
 16.18  corrective or preventive action or the amount of the penalty to 
 16.19  be paid.  Proceedings under this paragraph shall not be governed 
 16.20  by any formal procedural requirements, and may be conducted in a 
 16.21  manner the commissioner deems appropriate under the 
 16.22  circumstances. 
 16.23     (d) The commissioner may issue an order directing a managed 
 16.24  care plan or a representative of a managed care plan to cease 
 16.25  and desist from engaging in any act or practice that is not in 
 16.26  compliance with the managed care plan as certified, or that it 
 16.27  is in violation of an applicable statute or rule.  Within 30 
 16.28  days of service of the order, the managed care plan may request 
 16.29  review of the cease and desist order by an administrative law 
 16.30  judge pursuant to chapter 14.  The decision of the 
 16.31  administrative law judge shall include findings of fact, 
 16.32  conclusions of law and appropriate orders, which shall be the 
 16.33  final decision of the commissioner.  In the event of 
 16.34  noncompliance with a cease and desist order, the commissioner 
 16.35  may institute a proceeding in district court to obtain 
 16.36  injunctive or other appropriate relief. 
 17.1      (e) A managed care plan, participating health care 
 17.2   provider, or an employer or insurer that receives services from 
 17.3   the managed care plan, shall cooperate fully with an 
 17.4   investigation by the commissioner.  For purposes of this 
 17.5   section, cooperation includes, but is not limited to, attending 
 17.6   a conference called by the commissioner under paragraph (c), 
 17.7   responding fully and promptly to any questions relating to the 
 17.8   subject of the investigation, and providing copies of records, 
 17.9   reports, logs, data, and other information requested by the 
 17.10  commissioner to assist in the investigation.  
 17.11     (f) Any person acting on behalf of a managed care plan who 
 17.12  knowingly submits false information in any report required to be 
 17.13  filed by a managed care plan is guilty of a misdemeanor. 
 17.14     Sec. 14.  Minnesota Statutes 2002, section 176.181, is 
 17.15  amended by adding a subdivision to read: 
 17.16     Subd. 2c.  [ALTERNATIVE BENEFITS.] (a) An employer may file 
 17.17  with the commissioner of labor and industry an application for 
 17.18  exemption from the duty to pay compensation under this chapter 
 17.19  with respect to any employee who signs the waiver described in 
 17.20  clause (1), and the affidavit described in clause (2), if an 
 17.21  authorized representative of the religious sect to which the 
 17.22  employee belongs signs the affidavit specified in clause (3) and 
 17.23  the agreement described in clause (4).  An application for 
 17.24  exemption under this paragraph shall include all of the 
 17.25  following: 
 17.26     (1) a written waiver by the employee or, if the employee is 
 17.27  a minor, by the employee and the employee's parent or guardian 
 17.28  of all compensation under this chapter other than the 
 17.29  alternative benefits provided under paragraph (c); 
 17.30     (2) an affidavit by the employee, or if the employee is a 
 17.31  minor, by the employee and the employee's parent or guardian 
 17.32  stating that the employee is a member of a recognized religious 
 17.33  sect and that, as a result of the employee's adherence to the 
 17.34  established tenets or teachings of the religious sect, the 
 17.35  employee is conscientiously opposed to accepting the benefits of 
 17.36  any public or private insurance that makes payments in the event 
 18.1   of death, disability, old age, or retirement, or that makes 
 18.2   payments toward the cost of or provides medical care, including 
 18.3   any benefits provided under the federal Social Security Act, 
 18.4   United States Code, title 42, sections 301 to 1397jj; 
 18.5      (3) an affidavit by an authorized representative of the 
 18.6   religious sect to which the employee belongs stating that the 
 18.7   religious sect has a long-standing history of providing members 
 18.8   who become dependent on the support of the religious sect as a 
 18.9   result of work-related injuries, and the dependents of those 
 18.10  members, with a standard of living and medical treatment that is 
 18.11  reasonable when compared to the general standard of living and 
 18.12  medical treatment for members of the religious sect; and 
 18.13     (4) an agreement signed by an authorized representative of 
 18.14  the religious sect to which the employee belongs to provide the 
 18.15  financial and medical assistance described in clause (3) to the 
 18.16  employee and to the employee's dependents if the employee 
 18.17  sustains an injury that, but for the waiver under clause (1), 
 18.18  the employer would be liable for under section 176.021, 
 18.19  subdivision 1. 
 18.20     (b) The commissioner of labor and industry shall approve an 
 18.21  application for exemption under paragraph (a) if the 
 18.22  commissioner determines that all of the following conditions are 
 18.23  satisfied: 
 18.24     (1) the employee has waived all compensation under this 
 18.25  chapter other than the alternative benefits provided under 
 18.26  paragraph (c); 
 18.27     (2) the employee is a member of a religious sect whose 
 18.28  established tenets or teachings oppose accepting the benefits of 
 18.29  insurance as described in paragraph (a), clause (2), and, as a 
 18.30  result of the employee's adherence to those tenets or teachings, 
 18.31  conscientiously opposes accepting those benefits; 
 18.32     (3) the religious sect to which the employee belongs has a 
 18.33  long-standing history of providing members who become dependent 
 18.34  on the religious sect as a result of work-related injuries, and 
 18.35  the dependents of those members, with a standard of living and 
 18.36  medical treatment that is reasonable when compared to the 
 19.1   general standard of living and medical treatment for members of 
 19.2   the religious sect.  In determining whether the religious sect 
 19.3   has a long-standing history of providing the financial and 
 19.4   medical assistance described in this subdivision, the 
 19.5   commissioner of labor and industry shall presume that a 25-year 
 19.6   history of providing that financial and medical assistance is 
 19.7   long-standing for purposes of this subdivision; and 
 19.8      (4) the religious sect to which the employee belongs has 
 19.9   agreed to provide the financial and medical assistance described 
 19.10  in paragraph (a), clause (3), to the employee and to the 
 19.11  dependents of the employee if the employee sustains an injury 
 19.12  that, but for the waiver under paragraph (a), clause (1), the 
 19.13  employer would be liable under section 176.021, subdivision 1. 
 19.14     (c) An employee who has signed a waiver and an affidavit 
 19.15  under paragraph (a), who sustains an injury that, but for that 
 19.16  waiver, the employer would be liable under section 176.021, 
 19.17  subdivision 1, and the employee at the time of the injury was a 
 19.18  member of a religious sect whose authorized representative has 
 19.19  filed an affidavit and an agreement under paragraph (a), and the 
 19.20  employee as a result of the injury becomes dependent on the 
 19.21  religious sect for financial and medical assistance, or the 
 19.22  employee's dependent, may request a hearing to determine if the 
 19.23  religious sect has provided the employee and the employee's 
 19.24  dependents with a standard of living and medical treatment after 
 19.25  the injury that is reasonable when compared to the general 
 19.26  standard of living and medical treatment for members of the 
 19.27  religious sect.  To request the hearing, the employee or the 
 19.28  employee's dependent shall file a written request with the 
 19.29  commissioner of labor and industry stating the employee's 
 19.30  reasons for believing that the religious sect has not provided 
 19.31  the employee and the employee's dependents with a standard of 
 19.32  living and medical treatment after the injury that is reasonable 
 19.33  when compared to the general standard of living and medical 
 19.34  treatment for members of the religious sect.  Upon receiving 
 19.35  such a written request, the commissioner shall refer the matter 
 19.36  to the Office of Administrative Hearings for an expedited 
 20.1   hearing before a compensation judge.  Within ten days of the 
 20.2   close of the hearing, the compensation judge shall issue a 
 20.3   decision determining whether the religious sect has provided the 
 20.4   standard of living or medical treatment, or both, after the 
 20.5   injury that is reasonable when compared to the general standard 
 20.6   of living and medical treatment for members of the religious 
 20.7   sect.  If the compensation judge concludes that the religious 
 20.8   sect has not done so, then the compensation judge may order the 
 20.9   religious sect to provide alternative benefits to that employee 
 20.10  or to the employee's dependents, or both, in an amount that is 
 20.11  reasonable under the circumstances, but not in excess of the 
 20.12  benefits that the employee or the employee's dependents could 
 20.13  have received under this chapter but for the waiver under 
 20.14  paragraph (a), clause (1).  The compensation judge's order shall 
 20.15  constitute a final order of the commissioner not subject to 
 20.16  further review, and violation of that order shall be enforceable 
 20.17  by way of civil contempt proceedings in district court. 
 20.18     (d) The department shall provide a form for: 
 20.19     (1) the application for exemption of an employer; 
 20.20     (2) the waiver and affidavit of an employee; 
 20.21     (3) the affidavit of a religious sect; and 
 20.22     (4) the agreement of a religious sect required under 
 20.23  paragraph (a).  
 20.24     A properly completed form is prima facie evidence of 
 20.25  satisfaction of the conditions under paragraph (b), as to the 
 20.26  matter contained in the form. 
 20.27     (e) The commissioner of labor and industry may revoke an 
 20.28  exemption granted under paragraph (b), if the commissioner finds 
 20.29  that the conditions that justified the initial grant of the 
 20.30  exemption no longer exist.  To revoke the exemption, the 
 20.31  commissioner shall, within ten days of the proposed revocation, 
 20.32  serve a written notice of revocation by certified mail upon both 
 20.33  the employee who signed the waiver and affidavit described in 
 20.34  paragraph (a), and the employee's employer.  The employee may, 
 20.35  within ten days after service of that notice, request in writing 
 20.36  that the commissioner review the revocation.  If the employee 
 21.1   fails to send this request for review to the commissioner within 
 21.2   ten days of being served with the notice, the notice shall 
 21.3   become a final order of the commissioner not subject to further 
 21.4   review.  If the employee files a timely request for review, the 
 21.5   commissioner shall, upon receiving the request, refer the matter 
 21.6   to the Office of Administrative Hearings for an expedited 
 21.7   hearing before a compensation judge.  Within ten days of the 
 21.8   close of the hearing, the compensation judge shall issue a 
 21.9   decision determining whether all of the conditions that 
 21.10  justified the initial grant of the exemption continue to exist.  
 21.11  If the compensation judge concludes that any of those conditions 
 21.12  no longer exist, then the compensation judge shall affirm the 
 21.13  notice of revocation and serve an order to that effect upon the 
 21.14  commissioner, the employee, and the employee's employer.  If the 
 21.15  compensation judge concludes that all of the conditions that 
 21.16  justified the initial grant of the exemption continue to exist, 
 21.17  then the compensation judge shall vacate the notice of 
 21.18  revocation and serve an order to that effect upon the 
 21.19  commissioner, the employee, and the employee's employer.  In 
 21.20  both instances, the compensation judge's order shall constitute 
 21.21  a final order of the commissioner not subject to further review. 
 21.22     (f) Any person who, with intent to defraud, files an 
 21.23  application for exemption under paragraph (a) that knowingly 
 21.24  misrepresents, misstates, or fails to disclose any material fact 
 21.25  is guilty of theft and shall be sentenced according to section 
 21.26  609.52, subdivision 3. 
 21.27     (g) The text of paragraph (f) shall be placed on all forms 
 21.28  the commissioner of labor and industry provides for application 
 21.29  for exemption under paragraph (a). 
 21.30     (h) This section expires three years after its effective 
 21.31  date. 
 21.32     Sec. 15.  Minnesota Statutes 2002, section 176.1812, 
 21.33  subdivision 6, is amended to read: 
 21.34     Subd. 6.  [PILOT PROGRAM.] The commissioner shall establish 
 21.35  a pilot program ending December 31, 2004 2006, in which up to 20 
 21.36  private and up to 20 public employers shall be authorized to 
 22.1   enter into valid agreements under this section with their 
 22.2   employees.  The agreements shall be recognized and enforced as 
 22.3   provided by this section.  Employers shall participate in the 
 22.4   pilot program through collectively bargained agreements with the 
 22.5   certified and exclusive representatives of their employees and 
 22.6   without regard to the dollar insurance premium limitations in 
 22.7   subdivision 1.  A group of employers engaged in workers' 
 22.8   compensation group self-insurance complying with chapter 79A, or 
 22.9   a group of employers who purchase workers' compensation 
 22.10  insurance as a group, may not participate in any pilot program 
 22.11  under this subdivision. 
 22.12     Sec. 16.  Minnesota Statutes 2002, section 176.185, 
 22.13  subdivision 1, is amended to read: 
 22.14     Subdivision 1.  [NOTICE OF COVERAGE, TERMINATION, 
 22.15  CANCELLATION.] (a) Within ten days after the issuance or renewal 
 22.16  of a policy of insurance covering the liability to pay 
 22.17  compensation under this chapter written by an insurer licensed 
 22.18  to insure such liability in this state, the insurer shall file 
 22.19  notice of coverage with the commissioner under rules and on 
 22.20  forms prescribed by the commissioner.  No policy shall be 
 22.21  canceled by the insurer within the policy period nor terminated 
 22.22  upon its expiration date until a notice in writing is delivered 
 22.23  or mailed to the insured and filed with the commissioner, fixing 
 22.24  the date on which it is proposed to cancel it, or declaring that 
 22.25  the insurer does not intend to renew the policy upon the 
 22.26  expiration date.  The notice of cancellation must also clearly 
 22.27  state, in a separate paragraph, the following provisions:  
 22.28     (1) that an employer must maintain workers' compensation 
 22.29  insurance, or obtain permission to self-insure for workers' 
 22.30  compensation from the Department of Commerce; and 
 22.31     (2) that an employer's failure to maintain workers' 
 22.32  compensation coverage is a violation of section 176.181, which 
 22.33  could result in a criminal prosecution and civil penalties of up 
 22.34  to $1,000 per week per uninsured employee.  
 22.35  A cancellation or termination is not effective until 30 days 
 22.36  after written notice has been filed with the commissioner in a 
 23.1   manner prescribed by the commissioner unless prior to the 
 23.2   expiration of the 30-day period the employer obtains other 
 23.3   insurance coverage or an order exempting the employer from 
 23.4   carrying insurance as provided in section 176.181.  Upon receipt 
 23.5   of the notice If the commissioner does not receive notice of 
 23.6   continued coverage after the actual date of cancellation of a 
 23.7   policy, the commissioner shall notify the insured that the 
 23.8   insured must obtain coverage from some other licensed carrier 
 23.9   and that, if unable to do so, the insured shall request the 
 23.10  commissioner of commerce to require the issuance of a policy as 
 23.11  provided in section 79.251, subdivision 4.  Upon a cancellation 
 23.12  or termination of a policy by the insurer, the employer is 
 23.13  entitled to be assigned a policy in accordance with sections 
 23.14  79.251 and 79.252.  
 23.15     (b) Notice of cancellation or termination by the insured 
 23.16  shall be served upon the insurer by written statement mailed or 
 23.17  delivered to the insurer.  Upon receipt of the notice, the 
 23.18  insurer shall notify the commissioner of the cancellation or 
 23.19  termination and the commissioner shall ask the employer for the 
 23.20  reasons for the cancellation or termination and notify the 
 23.21  employer of the duty under this chapter to insure the employer's 
 23.22  employees.  
 23.23     (c) In addition to the requirements under paragraphs (a) 
 23.24  and (b), with respect to any trucker employer in classification 
 23.25  7219, 7230, 7231, or 7360 pursuant to the classification plan 
 23.26  required to be filed under section 79.61, if the insurer or its 
 23.27  agent has delivered or mailed a written certificate of insurance 
 23.28  certifying that a policy in the name of a trucker employer under 
 23.29  this paragraph is in force, then the insurer or its agent shall 
 23.30  also deliver or mail written notice of any midterm cancellation 
 23.31  to the trucker employer recipient of the certificate of 
 23.32  insurance at the address listed on the certificate.  If an 
 23.33  insurer or its agent fails to mail or deliver notice of any 
 23.34  midterm cancellation of the trucker employer's policy to the 
 23.35  trucker employer recipient of the certificate of insurance, then 
 23.36  the special compensation fund shall indemnify and hold harmless 
 24.1   the recipient from any award of benefits or other damages under 
 24.2   this chapter resulting from the failure to give notice. 
 24.3      Sec. 17.  Minnesota Statutes 2002, section 176.231, 
 24.4   subdivision 5, is amended to read: 
 24.5      Subd. 5.  [FORMS FOR REPORTS.] The commissioner shall 
 24.6   prescribe forms for use in making the reports required by this 
 24.7   section.  The first report of injury form which the employer 
 24.8   submits shall include a declaration by the employer that the 
 24.9   employer will pay the compensation the law requires.  Forms for 
 24.10  reports required by this section shall be as prescribed by the 
 24.11  commissioner and shall be the only forms used by an employer, 
 24.12  insurer, self-insurer, group self-insurer, and all health care 
 24.13  providers.  
 24.14     Sec. 18.  Minnesota Statutes 2002, section 176.238, 
 24.15  subdivision 10, is amended to read: 
 24.16     Subd. 10.  [FINES; VIOLATION.] An employer who violates 
 24.17  requirements set forth in this section or section 176.239 is 
 24.18  subject to a fine of up to $1,000 for each violation payable to 
 24.19  the commissioner for deposit in the special compensation 
 24.20  fund assigned risk safety account. 
 24.21     Sec. 19.  Minnesota Statutes 2002, section 176.391, 
 24.22  subdivision 2, is amended to read: 
 24.23     Subd. 2.  [APPOINTMENT OF PHYSICIANS, SURGEONS, AND OTHER 
 24.24  EXPERTS.] The compensation judge assigned to a matter, or the 
 24.25  commissioner, may appoint one or more neutral physicians or 
 24.26  surgeons from the list established by the commissioner to 
 24.27  examine the injury of the employee and report thereon except as 
 24.28  provided otherwise pursuant to section 176.1361.  Where 
 24.29  necessary to determine the facts, the services of other experts 
 24.30  may also be employed. 
 24.31     Sec. 20.  Minnesota Statutes 2002, section 176.83, 
 24.32  subdivision 5, is amended to read: 
 24.33     Subd. 5.  [TREATMENT STANDARDS FOR MEDICAL SERVICES.] In 
 24.34  consultation with the Medical Services Review Board or the 
 24.35  rehabilitation review panel, the commissioner shall adopt rules 
 24.36  establishing standards and procedures for health care provider 
 25.1   treatment.  Any rules or rule amendments that are adopted after 
 25.2   the effective date of the 2004 amendments to this section shall 
 25.3   be based on an analysis of both medical evidence and accepted 
 25.4   standards of medical practice.  The rules shall apply uniformly 
 25.5   to all providers including those providing managed care under 
 25.6   section 176.1351.  The rules shall be used to determine whether 
 25.7   a provider of health care services and rehabilitation services, 
 25.8   including a provider of medical, chiropractic, podiatric, 
 25.9   surgical, hospital, or other services, is performing procedures 
 25.10  or providing services at a level or with a frequency that is 
 25.11  excessive, unnecessary, or inappropriate under section 176.135, 
 25.12  subdivision 1, based upon accepted medical standards for quality 
 25.13  health care and accepted rehabilitation standards.  Section 
 25.14  14.389 may be used to adopt and amend rules establishing medical 
 25.15  standards and procedures under this subdivision, if the Medical 
 25.16  Services Review Board has recommended the standards and 
 25.17  procedures. 
 25.18     The rules shall include, but are not limited to, the 
 25.19  following: 
 25.20     (1) criteria for diagnosis and treatment of the most common 
 25.21  work-related injuries including, but not limited to, low back 
 25.22  injuries and upper extremity repetitive trauma injuries; 
 25.23     (2) criteria for surgical procedures including, but not 
 25.24  limited to, diagnosis, prior conservative treatment, supporting 
 25.25  diagnostic imaging and testing, and anticipated outcome 
 25.26  criteria; 
 25.27     (3) criteria for use of medications, appliances, adaptive 
 25.28  equipment, and use of health clubs or other exercise facilities; 
 25.29     (4) criteria for diagnostic imaging procedures; 
 25.30     (5) criteria for inpatient hospitalization; and 
 25.31     (6) criteria for treatment of chronic pain. 
 25.32     If it is determined by the payer that the level, frequency 
 25.33  or cost of a procedure or service of a provider is excessive, 
 25.34  unnecessary, or inappropriate according to the standards 
 25.35  established by the rules, the provider shall not be paid for the 
 25.36  procedure, service, or cost by an insurer, self-insurer, or 
 26.1   group self-insurer, and the provider shall not be reimbursed or 
 26.2   attempt to collect reimbursement for the procedure, service, or 
 26.3   cost from any other source, including the employee, another 
 26.4   insurer, the special compensation fund, or any government 
 26.5   program unless the commissioner or compensation judge determines 
 26.6   at a hearing or administrative conference that the level, 
 26.7   frequency, or cost was not excessive under the rules in which 
 26.8   case the insurer, self-insurer, or group self-insurer shall make 
 26.9   the payment deemed reasonable.  
 26.10     A rehabilitation provider who is determined by the 
 26.11  Rehabilitation Review Panel Board, after hearing, to be 
 26.12  consistently performing procedures or providing services at an 
 26.13  excessive level or cost may be prohibited from receiving any 
 26.14  further reimbursement for procedures or services provided under 
 26.15  this chapter.  A prohibition imposed on a provider under this 
 26.16  subdivision may be grounds for revocation or suspension of the 
 26.17  provider's license or certificate of registration to provide 
 26.18  health care or rehabilitation service in Minnesota by the 
 26.19  appropriate licensing or certifying body.  The commissioner and 
 26.20  Medical Services Review Board shall review excessive, 
 26.21  inappropriate, or unnecessary health care provider treatment 
 26.22  under section 176.103. 
 26.23     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 26.24  following final enactment.