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HF 2193

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 06/02/2016 12:43pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to workers' compensation; adopting recommendations of the workers'
compensation advisory council regarding inpatient hospital payments; regulating
electronic transactions; modifying injury reporting requirements; authorizing
rulemaking; requiring a report; amending Minnesota Statutes 2014, sections
176.135, by adding a subdivision; 176.136, subdivision 1b; 176.221, subdivision
8; 176.231, subdivision 1; proposing coding for new law in Minnesota Statutes,
chapter 176.

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

Section 1.

Minnesota Statutes 2014, section 176.135, is amended by adding a
subdivision to read:


new text begin Subd. 7a. new text end

new text begin Electronic transactions. new text end

new text begin (a) For purposes of this subdivision, the
following terms have the meanings given:
new text end

new text begin (1) "workers' compensation payer" means a workers' compensation insurer and an
employer, or group of employers, that is self-insured for workers' compensation;
new text end

new text begin (2) "clearinghouse" has the meaning given in section 62J.51, subdivision 11a; and
new text end

new text begin (3) "electronic transactions" means the health care administrative transactions
described in section 62J.536.
new text end

new text begin (b) In addition to the requirements of section 62J.536, workers' compensation payers
and health care providers must comply with the requirements in paragraphs (c) to (e).
new text end

new text begin (c) No later than January 1, 2016, each workers' compensation payer must place
the following information in a prominent location on its Web site or otherwise provide
the information to health care providers:
new text end

new text begin (1) the name of each clearinghouse with which the workers' compensation payer has
an agreement to exchange or transmit electronic transactions, along with the identification
number each clearinghouse has assigned to the payer in order to route electronic
transactions through intermediaries or other clearinghouses to the payer;
new text end

new text begin (2) information about how a health care provider can obtain the claim number
assigned by the workers' compensation payer for an employee's claim and how the
provider should submit the claim number in the appropriate field on the electronic bill to
the payer; and
new text end

new text begin (3) the name, phone number, and e-mail address of contact persons who can answer
questions related to electronic transactions on behalf of the workers' compensation payer
and the clearinghouses with which the payer has agreements.
new text end

new text begin (d) No later than July 1, 2016:
new text end

new text begin (1) health care providers must electronically submit copies of medical records or
reports that substantiate the nature of the charge and its relationship to the work injury
using the most recently approved version of the ASC X12N 275 transaction ("Additional
Information to Support Health Care Claim or Encounter"), according to the requirements
in the corresponding implementation guide. The ASC X12N 275 transaction is the only
one that shall be used to electronically submit attachments unless a national standard is
adopted by federal law or rule. If a new version of the attachment transaction is approved,
it must be used one year after the approval date;
new text end

new text begin (2) workers' compensation payers and all clearinghouses receiving or transmitting
workers' compensation bills must accept attachments using the ASC X12N 275 transaction
and must respond with the most recently approved ASC X12 electronic acknowledgment
for the attachment transaction. If a new version of the acknowledgment transaction is
approved, it must be used one year after the approval date; and
new text end

new text begin (3) if a different national claims attachment or acknowledgment requirement is
adopted by federal law or rule, it will replace the ASC X12N 275 transaction, and the new
standard must be used on the date that it is required by the federal law or rule.
new text end

new text begin (e) No later than September 1, 2015, workers' compensation payers must provide
the patient's name and patient control number on or with all payments made to a provider
under this chapter, whether payment is made by check or electronic funds transfer. The
information provided on or with the payment must be sufficient to allow providers to
match the payment to specific bills. If a bulk payment is made to a provider for more than
one patient, the check or electronic funds transfer statement must also specify the amount
being paid for each patient. For purposes of this paragraph, the patient control number is
located on the electronic health care claim 837 transaction, loop 2300, segment CLM01,
and on the electronic health care claim payment/advice 835 transaction, loop 2100, CLP01.
new text end

new text begin (f) The commissioner may assess a monetary penalty of $500 for each violation of
this section, not to exceed $25,000 for identical violations during a calendar year. Before
issuing a penalty for a first violation of this section, the commissioner must provide written
notice to the noncompliant payer, clearinghouse, or provider that a penalty may be issued
if the violation is not corrected within 30 days. Penalties under this paragraph are payable
to the commissioner for deposit in the assigned risk safety account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2014, section 176.136, subdivision 1b, is amended to read:


Subd. 1b.

Limitation of liability.

(a) The liability of the employer for treatment,
articles, and supplies provided to an employee while an inpatient or outpatient at a deleted text beginsmall
hospital
deleted text end new text beginCritical Access Hospital certified by the Centers for Medicare and Medicaid
Services
new text endshall be the hospital's usual and customary charge, unless the charge is determined
by the commissioner or a compensation judge to be unreasonably excessive. deleted text beginA "small
hospital," for purposes of this paragraph, is a hospital which has 100 or fewer licensed beds.
deleted text end

(b) The liability of the employer for the treatment, articles, and supplies that are not
limited by subdivision 1a deleted text beginordeleted text endnew text begin,new text end 1c deleted text beginordeleted text endnew text begin,new text end paragraph (a)new text begin, or section 176.1362new text end shall be limited to
85 percent of the provider's usual and customary charge, or 85 percent of the prevailing
charges for similar treatment, articles, and supplies furnished to an injured person when
paid for by the injured person, whichever is lower. On this basis, the commissioner or
compensation judge may determine the reasonable value of all treatment, services, and
supplies, and the liability of the employer is limited to that amount. The commissioner
may by rule establish the reasonable value of a service, article, or supply in lieu of the
85 percent limitation in this paragraph. A prevailing charge established under Minnesota
Rules, part 5221.0500, subpart 2, must be based on no more than two years of billing data
immediately preceding the date of the service.

(c) The limitation of liability for charges provided by paragraph (b) does not apply
to a nursing home that participates in the medical assistance program and whose rates are
established by the commissioner of human services.

(d) An employer's liability for treatment, articles, and supplies provided under this
chapter by a health care provider located outside of Minnesota is limited to the payment that
the health care provider would receive if the treatment, article, or supply were paid under
the workers' compensation law of the jurisdiction in which the treatment was provided.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for billing and payment of inpatient
hospital services, articles, and supplies provided to patients discharged on or after January
1, 2016.
new text end

Sec. 3.

new text begin [176.1362] INPATIENT HOSPITAL PAYMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Payment based on Medicare MS-DRG system. new text end

new text begin (a) Except as
provided in subdivisions 2 and 3, the maximum reimbursement for inpatient hospital
services, articles, and supplies is 200 percent of the amount calculated for each hospital
under the federal Inpatient Prospective Payment System developed for Medicare, using
the inpatient Medicare PC-Pricer program for the applicable MS-DRG as provided in
paragraph (b). All adjustments included in the PC-Pricer program are included in the
amount calculated, including but not limited to any outlier payments.
new text end

new text begin (b) Payment under this section is effective for services, articles, and supplies
provided to patients discharged from the hospital on or after January 1, 2016. Payment
for services, articles, and supplies provided to patients discharged on January 1, 2016,
through December 31, 2016, must be based on the Medicare PC-Pricer program in effect
on January 1, 2016. Payment for inpatient services, articles, and supplies for patients
discharged in each calendar year thereafter must be based on the PC-Pricer program in
effect on January 1 of the year of discharge.
new text end

new text begin (c) Hospitals must bill workers' compensation insurers using the same codes,
formats, and details that are required for billing for hospital inpatient services by the
Medicare program. The bill must be submitted to the insurer within the time period
required by section 62Q.75, subdivision 3. For purposes of this section, "insurer" includes
both workers' compensation insurers and self-insured employers.
new text end

new text begin Subd. 2. new text end

new text begin Payment for catastrophic, high-cost injuries. new text end

new text begin (a) If the hospital's
total usual and customary charges for services, articles, and supplies for a patient's
hospitalization exceed a threshold of $175,000, annually adjusted as provided in paragraph
(b), reimbursement must not be based on the MS-DRG system, but must instead be paid at
75 percent of the hospital's usual and customary charges.
new text end

new text begin (b) Beginning January 1, 2017, and each January 1 thereafter, the commissioner
must adjust the previous year's threshold by the percent change in average total charges
per inpatient case, using data available as of October 1 for non-Critical Access Hospitals
from the Health Care Cost Information System maintained by the Department of Health
pursuant to chapter 144. The commissioner must annually publish notice of the updated
threshold in the State Register.
new text end

new text begin Subd. 3. new text end

new text begin Critical Access Hospitals. new text end

new text begin Hospitals certified by the Centers for Medicare
and Medicaid Services as Critical Access Hospitals shall be reimbursed as provided in
section 176.136, subdivision 1b, paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Submission of information when payment is by MS-DRG. new text end

new text begin Except
when a postpayment audit is allowed under subdivision 6, an insurer must not require an
itemization of charges or additional documentation to support a bill from a non-Critical
Access Hospital when all of the following requirements are met:
new text end

new text begin (1) the hospital must submit its charges to the insurer on the 837 institutional
standard electronic transaction required by section 62J.536;
new text end

new text begin (2) an MS-DRG must apply to the hospitalization; and
new text end

new text begin (3) the hospital's total charges must be less than the threshold amount in subdivision
2, as annually adjusted.
new text end

new text begin Subd. 5. new text end

new text begin Prompt payment requirement when MS-DRG payment is made. new text end

new text begin (a)
When the requirements in subdivision 4 have been met, the insurer must take one of the
following actions within 30 days of receipt of the hospital's bill:
new text end

new text begin (1) pay the hospital's bill as provided in subdivision 1, with no reductions based on a
review of charges for specific services, articles, or supplies; or
new text end

new text begin (2) deny payment for the entire hospitalization for one of the following reasons:
new text end

new text begin (i) the patient's workers' compensation injury claim is denied;
new text end

new text begin (ii) the diagnosis for which the patient was hospitalized is not related to the insurer's
admitted workers' compensation injury; or
new text end

new text begin (iii) the hospitalization was not reasonably required to cure and relieve the employee
from the effects of the injury under section 176.135 or rules adopted under section 176.83,
subdivision 5.
new text end

new text begin (b) When the requirements of subdivision 4 are met, an insurer must not deny
payment for one or more charges on the basis that the charge should have been bundled
into another charge, or on the basis that a particular service, article, or supply was not
reasonably required, except that the insurer may raise these issues during a postpayment
audit under subdivision 6.
new text end

new text begin Subd. 6. new text end

new text begin Postpayment audits; records; interest. new text end

new text begin (a) The insurer may conduct a
postpayment audit if both of the following requirements are met:
new text end

new text begin (1) the insurer paid the hospital's bill within 30 days according to the PC-Pricer
program amount described in subdivision 1; and
new text end

new text begin (2) the amount paid according to the PC-Pricer program in subdivision 1 included
an outlier payment.
new text end

new text begin (b) If an audit is permitted under paragraph (a), the insurer must request any additional
records needed to conduct the audit within six months after payment. The records
requested may include an itemized statement of charges. Within 30 days of the insurer's
request, the hospital must provide the additional documentation requested. An insurer
must not request additional information from a hospital more than three times per audit.
new text end

new text begin (c) An insurer must pay the hospital interest at an annual rate of four percent if
it is determined that the insurer is liable for additional hospital charges following a
postpayment audit. A hospital must pay the insurer interest at an annual rate of four
percent if it is determined that the hospital owes the insurer reimbursement following
the insurer's audit. Interest is payable by the insurer from the date payment was due
under this section or section 176.135. Interest is payable by the hospital from the date the
overpayment was made.
new text end

new text begin Subd. 7. new text end

new text begin Study. new text end

new text begin The commissioner of labor and industry shall conduct a study
analyzing the impact of the reforms under this section to determine whether the objectives
have been met and whether further changes are needed. The commissioner must report the
results of the study to the Workers' Compensation Advisory Council and the chairs and
ranking minority members of the house of representatives and senate committees with
jurisdiction over workers' compensation by January 15, 2018.
new text end

new text begin Subd. 8. new text end

new text begin Rulemaking. new text end

new text begin The commissioner may adopt or amend rules using the
authority in section 14.389, including subdivision 5, to: (1) implement this section and
the Medicare Inpatient Prospective Payment System for workers' compensation; and (2)
implement the Medicare Hospital Outpatient Prospective Payment System, or other fee
schedule, for payment of outpatient services provided under this chapter by a hospital or
ambulatory surgical center, not to take effect before January 1, 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivisions 1 to 6 are effective for billing and payment of
inpatient hospital services, articles, and supplies provided to patients discharged on or
after January 1, 2016. Subdivision 8 is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2014, section 176.221, subdivision 8, is amended to read:


Subd. 8.

Method and timeliness of payment.

new text begin(a) Except as otherwise provided
in paragraph (b),
new text endpayment of compensation under this chapter shall be by immediately
payable negotiable instrument, or if by any other method, arrangements shall be available
to provide for the immediate negotiability of the payment instrument.

All payment of compensation shall be made within 14 days of the filing of an
appropriate order by the division or a compensation judge, unless the order is appealed or
if a different time period is provided by this chapter.

new text begin (b) An employer or insurer responsible for payment of periodic monetary benefits
under this chapter must send the payments by electronic funds transfer to a bank, savings
association, or credit union, if requested by the employee or a dependent under section
176.111.
new text end

new text begin (1) If the employer or insurer has already established an electronic funds transfer
arrangement with a bank, savings association, or credit union for the employee's account,
the employer or insurer must begin sending periodic monetary benefit payments by
electronic funds transfer to the bank, savings association, or credit union within 30
days after the employer or insurer receives a request from the employee or dependent
containing the information in paragraph (c).
new text end

new text begin (2) If the employer or insurer does not already have an arrangement with the bank,
savings association, or credit union for electronic funds transfer for the employee or
dependent's account at the time of the request, the 30 days to begin sending periodic
benefit payments by electronic funds transfer does not start to run until the arrangement
has been established. The employer or insurer must make reasonable efforts to establish
the electronic funds transfer arrangement within 14 days after receiving a request
containing the information in paragraph (c).
new text end

new text begin (3) Payment of benefits is deemed to have been made on the date the payment is
sent by electronic funds transfer to the employee or dependent's account at the bank,
savings association, or credit union.
new text end

new text begin (c) The employee or dependent must provide the employer or insurer with the
following information:
new text end

new text begin (1) a signed and dated written request for electronic funds transfer of benefits;
new text end

new text begin (2) the name and address of the bank, savings association, or credit union where the
benefit payments are to be sent by electronic funds transfer;
new text end

new text begin (3) the account number to which the payments should be credited; and
new text end

new text begin (4) any other information or documentation required by the employer or insurer or the
bank, savings association, or credit union necessary to implement electronic funds transfer.
new text end

new text begin (d) The employer or insurer must retain a copy of the request for as long as the
benefits are being paid by electronic funds transfer. The employer or insurer paying the
benefits must provide a copy of the request to the department upon request.
new text end

new text begin (e) Paragraph (b) does not apply if the employer or insurer reasonably determines
that the periodic monetary benefit payments are likely to end before the electronic funds
transfer can be arranged.
new text end

new text begin (f) The commissioner may assess a monetary penalty of $500 against the employer
or insurer for a violation of paragraph (b) or (d). Before issuing a penalty for a first
violation of paragraph (b) or (d), the commissioner must provide written notice to the
employer or insurer that a penalty may be issued if the violation is not corrected within
30 days. Penalties under this paragraph are payable to the commissioner for deposit in
the assigned risk safety account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2016.
new text end

Sec. 5.

Minnesota Statutes 2014, section 176.231, subdivision 1, is amended to read:


Subdivision 1.

Time limitation.

Where death or serious injury occurs to an
employee during the course of employment, the employer shall report the injury or death
to the commissioner and insurer within 48 hours after its occurrence. Where any other
injury occurs which wholly or partly incapacitates the employee from performing labor
or service for more than three calendar days, the employer shall report the injury to the
insurer on a form prescribed by the commissioner within ten days from its occurrence. An
insurer and self-insured employer shall report the injury to the commissioner no later than
14 days from its occurrence. Where an injury has once been reported but subsequently
death ensues, the employer shall report the death to the commissioner and insurer within
48 hours after the employer receives notice of this fact. An employer who provides
notice to the Occupational Safety and Health Division of the Department of Labor and
Industry of a fatalitynew text begin within the eight-hour time frame required by lawnew text end, or ofnew text begin annew text end inpatient
hospitalization deleted text beginof three or more employees,deleted text end within the deleted text begineight-hourdeleted text endnew text begin 24-hournew text end time frame
required by lawnew text begin,new text end has satisfied the employer's obligation under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end