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HF 2658

1st Unofficial Engrossment - 88th Legislature (2013 - 2014) Posted on 04/25/2014 01:47pm

KEY: stricken = removed, old language.
underscored = added, new language.
1.1A bill for an act
1.2relating to workers' compensation; adopting the recommendations of the Workers'
1.3Compensation Advisory Council;amending Minnesota Statutes 2012, sections
1.4176.129, subdivisions 2a, 7; 176.135, subdivision 7; 176.136, subdivision 1a;
1.5176.231, subdivision 2; 176.305, subdivision 1a; Minnesota Statutes 2013
1.6Supplement, section 176.011, subdivision 15; repealing Minnesota Statutes 2012,
1.7sections 175.006, subdivision 1; 175.08; 175.14; 175.26; 176.1311; 176.136,
1.8subdivision 3; 176.2615; 176.641.

1.10    Section 1. Minnesota Statutes 2013 Supplement, section 176.011, subdivision 15,
1.11is amended to read:
1.12    Subd. 15. Occupational disease. (a) "Occupational disease" means a mental
1.13impairment as defined in paragraph (d) or physical disease arising out of and in the
1.14course of employment peculiar to the occupation in which the employee is engaged
1.15and due to causes in excess of the hazards ordinary of employment and shall include
1.16undulant fever. Physical stimulus resulting in mental injury and mental stimulus resulting
1.17in physical injury shall remain compensable. Mental impairment is not considered a
1.18disease if it results from a disciplinary action, work evaluation, job transfer, layoff,
1.19demotion, promotion, termination, retirement, or similar action taken in good faith by the
1.20employer. Ordinary diseases of life to which the general public is equally exposed outside
1.21of employment are not compensable, except where the diseases follow as an incident of an
1.22occupational disease, or where the exposure peculiar to the occupation makes the disease
1.23an occupational disease hazard. A disease arises out of the employment only if there be a
1.24direct causal connection between the conditions under which the work is performed and
1.25if the occupational disease follows as a natural incident of the work as a result of the
1.26exposure occasioned by the nature of the employment. An employer is not liable for
2.1compensation for any occupational disease which cannot be traced to the employment as a
2.2direct and proximate cause and is not recognized as a hazard characteristic of and peculiar
2.3to the trade, occupation, process, or employment or which results from a hazard to which
2.4the worker would have been equally exposed outside of the employment.
2.5(b) If immediately preceding the date of disablement or death, an employee was
2.6employed on active duty with an organized fire or police department of any municipality,
2.7as a member of the Minnesota State Patrol, conservation officer service, state crime bureau,
2.8as a forest officer by the Department of Natural Resources, state correctional officer, or
2.9sheriff or full-time deputy sheriff of any county, and the disease is that of myocarditis,
2.10coronary sclerosis, pneumonia or its sequel, and at the time of employment such employee
2.11was given a thorough physical examination by a licensed doctor of medicine, and a written
2.12report thereof has been made and filed with such organized fire or police department, with
2.13the Minnesota State Patrol, conservation officer service, state crime bureau, Department
2.14of Natural Resources, Department of Corrections, or sheriff's department of any county,
2.15which examination and report negatived any evidence of myocarditis, coronary sclerosis,
2.16pneumonia or its sequel, the disease is presumptively an occupational disease and shall
2.17be presumed to have been due to the nature of employment. If immediately preceding
2.18the date of disablement or death, any individual who by nature of their position provides
2.19emergency medical care, or an employee who was employed as a licensed police officer
2.20under section 626.84, subdivision 1; firefighter; paramedic; state correctional officer;
2.21emergency medical technician; or licensed nurse providing emergency medical care; and
2.22who contracts an infectious or communicable disease to which the employee was exposed
2.23in the course of employment outside of a hospital, then the disease is presumptively an
2.24occupational disease and shall be presumed to have been due to the nature of employment
2.25and the presumption may be rebutted by substantial factors brought by the employer
2.26or insurer. Any substantial factors which shall be used to rebut this presumption and
2.27which are known to the employer or insurer at the time of the denial of liability shall be
2.28communicated to the employee on the denial of liability.
2.29(c) A firefighter on active duty with an organized fire department who is unable
2.30to perform duties in the department by reason of a disabling cancer of a type caused
2.31by exposure to heat, radiation, or a known or suspected carcinogen, as defined by the
2.32International Agency for Research on Cancer, and the carcinogen is reasonably linked to
2.33the disabling cancer, is presumed to have an occupational disease under paragraph (a). If a
2.34firefighter who enters the service after August 1, 1988, is examined by a physician prior to
2.35being hired and the examination discloses the existence of a cancer of a type described
3.1in this paragraph, the firefighter is not entitled to the presumption unless a subsequent
3.2medical determination is made that the firefighter no longer has the cancer.
3.3(d) For the purposes of this chapter, "mental impairment" means a diagnosis of
3.4post-traumatic stress disorder by a licensed psychiatrist or psychologist. For the purposes
3.5of this chapter, "post-traumatic stress disorder" means the condition as described in
3.6the most recently published edition of the Diagnostic and Statistical Manual of Mental
3.7Disorders by the American Psychiatric Association. For purposes of section 79.34,
3.8subdivision 2, one or more compensable mental impairment claims arising out of a single
3.9event or occurrence shall constitute a single loss occurrence.
3.10EFFECTIVE DATE.This section is effective for employees with dates of injury on
3.11or after October 1, 2013.

3.12    Sec. 2. Minnesota Statutes 2012, section 176.129, subdivision 2a, is amended to read:
3.13    Subd. 2a. Payments to fund. (a) On or before April 1 of each year, all self-insured
3.14employers shall report paid indemnity losses and insurers shall report paid indemnity
3.15losses and standard workers' compensation premium in the form and manner prescribed
3.16by the commissioner. On June 1 of each year, the commissioner shall determine the
3.17total amount needed to pay all estimated liabilities, including administrative expenses,
3.18of the special compensation fund for the following fiscal year. The commissioner shall
3.19assess this amount against self-insured employers and insurers. The total amount of the
3.20assessment must be allocated between self-insured employers and insured employers
3.21based on paid indemnity losses for the preceding calendar year, as provided by paragraph
3.22(b). The method of assessing self-insured employers must be based on paid indemnity
3.23losses, as provided by paragraph (c). The method of assessing insured employers is based
3.24on standard workers' compensation premium, as provided by paragraph (c). Each insurer
3.25shall collect the assessment through a policyholder surcharge as provided by paragraph
3.26(d). On or before June 30 of each year, the commissioner shall provide notification to each
3.27self-insured employer and insurer of amounts due. Each self-insured employer and each
3.28insurer shall pay at least one-half of the amount due to the commissioner for deposit into
3.29the special compensation fund on or before August 1 of the same calendar year. The
3.30remaining balance is due on February 1 of the following calendar year. Each insurer must
3.31pay the full amount due as stated in the commissioner's notification, regardless of the
3.32amount the insurer actually collects from the premium policyholder surcharge.
3.33(b) The portion of the total assessment that is allocated to self-insured employers
3.34is the proportion that paid indemnity losses made by all self-insured employers bore to
3.35the total paid indemnity losses made by all self-insured employers and insured employers
4.1during the preceding calendar year. The portion of the total assessment that is allocated
4.2to insured employers is the proportion that paid indemnity losses made on behalf of
4.3all insured employers bore to the total paid indemnity losses made by all self-insured
4.4employers and insured employers during the preceding calendar year.
4.5(c) The portion of the total assessment allocated to self-insured employers that
4.6shall be paid by each self-insured employer must be based upon paid indemnity losses
4.7made by that self-insured employer during the preceding calendar year. The portion of
4.8the total assessment allocated to insured employers that is paid by each insurer must be
4.9based on standard workers' compensation premium earned in the state by that insurer
4.10during the preceding current calendar year. If the current calendar year earned standard
4.11workers' compensation premium is not available, the commissioner shall estimate the
4.12portion of the total assessment allocated to insured employers that is paid by each insurer
4.13using the earned standard workers' compensation premium from the preceding calendar
4.14year. The commissioner shall then perform a reconciliation and final determination of
4.15the portion of the total assessment to be paid by each insurer when the earned standard
4.16workers' compensation premium for the current calendar year is calculable, but the final
4.17determination must not be made after December 1 of the following calendar year. An
4.18employer who has ceased to be self-insured shall continue to be liable for assessments
4.19based on paid indemnity losses arising out of injuries occurring during periods when the
4.20employer was self-insured, unless the self-insured employer has purchased a replacement
4.21policy covering those losses. An insurer who assumes a self-insured employer's obligation
4.22under a replacement policy shall separately report and pay assessments based on indemnity
4.23losses paid by the insurer under the replacement policy. The replacement policy may
4.24provide for reimbursement of the assessment to the insurer by the self-insured employer.
4.25(d) Insurers shall collect the assessments from their insured employers through
4.26a surcharge based on standard workers' compensation premium for each employer.
4.27Assessments when collected do not constitute an element of loss for the purpose of
4.28establishing rates for workers' compensation insurance but for the purpose of collection
4.29are treated as separate costs imposed on insured employers. The premium policyholder
4.30 surcharge is included in the definition of gross premium as defined in section 297I.01 only
4.31for premium tax purposes. An insurer may cancel a policy for nonpayment of the premium
4.32 policyholder surcharge. The premium policyholder surcharge is excluded from the
4.33definition of premium for all other purposes, except as otherwise provided in this paragraph.
4.34(e) For purposes of this section, the workers' compensation assigned risk plan
4.35established under section 79.252, shall report and pay assessments on standard workers'
4.36compensation premium in the same manner as an insurer.
5.1EFFECTIVE DATE.This section is effective for assessments due under Minnesota
5.2Statutes, section 176.129, subdivision 2a, paragraph (a), on August 1, 2013, and February
5.31, 2014, and for the first reconciliation and final determination under Minnesota Statutes,
5.4section 176.129, subdivision 2a, paragraph (c), due on or before December 1, 2014.

5.5    Sec. 3. Minnesota Statutes 2012, section 176.129, subdivision 7, is amended to read:
5.6    Subd. 7. Refunds. In case deposit is or has been made pursuant to subdivision
5.72a by mistake or inadvertence, or under circumstances that justice requires a refund,
5.8the commissioner of management and budget is authorized to refund the deposit under
5.9order of the commissioner, a compensation judge, the Workers' Compensation Court of
5.10Appeals, or a district court. Claims for refunds must be submitted to the commissioner
5.11within three years of the assessment due date of reconciliation and final determination
5.12under subdivision 2a. There is appropriated to the commissioner from the fund an amount
5.13sufficient to make the refund and payment.
5.14EFFECTIVE DATE.This section is effective for assessments due under Minnesota
5.15Statutes, section 176.129, subdivision 2a, paragraph (a), on August 1, 2013, and February
5.161, 2014, and for the first reconciliation and final determination under Minnesota Statutes,
5.17section 176.129, subdivision 2a, paragraph (c), due on or before December 1, 2014.

5.18    Sec. 4. Minnesota Statutes 2012, section 176.135, subdivision 7, is amended to read:
5.19    Subd. 7. Medical bills and records. (a) Health care providers shall submit to the
5.20insurer an itemized statement of charges in the standard electronic transaction format when
5.21required by section 62J.536 or, if there is no prescribed standard electronic transaction
5.22format, on a billing form prescribed by the commissioner. Health care providers shall also
5.23submit copies of medical records or reports that substantiate the nature of the charge and its
5.24relationship to the work injury. Health care providers may charge for copies of any records
5.25or reports that are in existence and directly relate to the items for which payment is sought
5.26under this chapter. The commissioner shall adopt a schedule of reasonable charges by rule.
5.27A health care provider shall not collect, attempt to collect, refer a bill for collection,
5.28or commence an action for collection against the employee, employer, or any other party
5.29until the information required by this section has been furnished.
5.30A United States government facility rendering health care services to veterans is not
5.31subject to the uniform billing form requirements of this subdivision.
5.32(b) For medical services provided under this section, the codes from the International
5.33Classification of Diseases, Tenth Edition, Clinical Modification/Procedure Coding System
5.34(ICD-10), must be used to report medical diagnoses and hospital inpatient procedures
6.1when required by the United States Department of Health and Human Services for federal
6.2programs. The commissioner must replace the codes from the International Classification
6.3of Diseases, Ninth Edition, Clinical Modification/Procedure Coding System (ICD-9), with
6.4equivalent ICD-10 codes wherever the ICD-9 codes appear in rules adopted under this
6.5chapter. The commissioner must use the General Equivalence Mappings established by
6.6the Centers for Medicare and Medicaid Services to replace the ICD-9 diagnostic codes
6.7with ICD-10 codes in the rules.
6.8(c) The commissioner shall amend rules adopted under this chapter as necessary
6.9to implement the ICD-10 coding system in paragraph (b). The amendments shall be
6.10adopted by giving notice in the State Register according to the procedures in section
6.1114.386, paragraph (a). The amended rules are not subject to expiration under section
6.1214.386, paragraph (b).

6.13    Sec. 5. Minnesota Statutes 2012, section 176.136, subdivision 1a, is amended to read:
6.14    Subd. 1a. Relative value fee schedule. (a) The liability of an employer for
6.15services included in the medical fee schedule is limited to the maximum fee allowed
6.16by the schedule in effect on the date of the medical service, or the provider's actual
6.17fee, whichever is lower. The commissioner shall adopt permanent rules regulating fees
6.18allowable for medical, chiropractic, podiatric, surgical, and other health care provider
6.19treatment or service, including those provided to hospital outpatients, by implementing
6.20a relative value fee schedule. The commissioner may adopt by reference, according to
6.21the procedures in paragraph (h) (d), clause (2), the relative value fee schedule tables
6.22adopted for the federal Medicare program. The relative value fee schedule must contain
6.23reasonable classifications including, but not limited to, classifications that differentiate
6.24among health care provider disciplines. The conversion factors for the original relative
6.25value fee schedule must reasonably reflect a 15 percent overall reduction from the medical
6.26fee schedule most recently in effect. The reduction need not be applied equally to all
6.27treatment or services, but must represent a gross 15 percent reduction.
6.28(b) Effective October 1, 2005, the commissioner shall remove all scaling factors
6.29from the relative value units and establish four separate conversion factors according to
6.30paragraphs (c) and (d) for each of the following parts of Minnesota Rules:
6.31(1) medical/surgical services in Minnesota Rules, part 5221.4030, as defined in part
6.325221.0700, subpart 3, item C, subitem (2);
6.33(2) pathology and laboratory services in Minnesota Rules, part 5221.4040, as
6.34defined in part 5221.0700, subpart 3, item C, subitem (3);
7.1(3) physical medicine and rehabilitation services in Minnesota Rules, part
7.25221.4050, as defined in part 5221.0700, subpart 3, item C, subitem (4); and
7.3(4) chiropractic services in Minnesota Rules, part 5221.4060, as defined in part
7.45221.0700, subpart 3, item C, subitem (5).
7.5(c) The four conversion factors established under paragraph (b) shall be calculated
7.6so that there is no change in each maximum fee for each service under the current fee
7.7schedule, except as provided in paragraphs (d) and (e).
7.8(d) By October 1, 2006, the conversion factor for chiropractic services described in
7.9paragraph (b), clause (4), shall be increased to equal 72 percent of the conversion factor
7.10for medical/surgical services described in paragraph (b), clause (1). Beginning October 1,
7.112005, the increase in chiropractic conversion factor shall be phased in over two years by
7.12approximately equal percentage point increases.
7.13(e) When adjusting the conversion factors in accordance with paragraph (g) on
7.14October 1, 2005, and October 1, 2006, the commissioner may adjust by no less than zero,
7.15all of the conversion factors as necessary to offset any overall increase in payments under
7.16the fee schedule resulting from the increase in the chiropractic conversion factor.
7.17(f) The commissioner shall give notice of the relative value units and conversion
7.18factors established under paragraphs (b), (c), and (d) according to the procedures in section
7.1914.386, paragraph (a). The relative value units and conversion factors established under
7.20paragraphs (b), (c), and (d) are not subject to expiration under section 14.386, paragraph (b).
7.21(g) (c) The conversion factors shall be adjusted as follows:
7.22(1) After permanent rules have been adopted to implement this section, the conversion
7.23factors must be adjusted annually on October 1 by no more than the percentage change
7.24computed under section 176.645, but without the annual cap provided by that section.
7.25(2) Each time the workers' compensation relative value fee schedule tables are
7.26updated under paragraph (h) (d), the commissioner shall adjust the conversion factors so
7.27that, for services in both fee schedules, there is no difference between the overall payment
7.28in each category of service listed in paragraph (b) under the new schedule and the overall
7.29payment for that category under the workers' compensation fee schedule most recently
7.30in effect. This adjustment must be made before making any additional adjustment under
7.31clause (1).
7.32(h) (d) The commissioner shall give notice of the adjusted conversion factors and
7.33updates to the relative value fee schedule as follows:
7.34(1) The commissioner shall annually give notice in the State Register of the adjusted
7.35conversion factors and any amendments to rules to implement Medicare relative value
7.36tables incorporated by reference under this subdivision. The notices of the adjusted
8.1conversion factors and amended rules to implement the relative value tables are subject
8.2to the requirements of section 14.386, paragraph (a). The annual adjustments to the
8.3conversion factors and the medical fee schedules adopted under this section, including all
8.4previous fee schedules, are not subject to expiration under section 14.386, paragraph (b).
8.5(2) The commissioner shall periodically, but at least once every three years, update
8.6the workers' compensation relative value tables by incorporating by reference the relative
8.7value tables in the national physician fee schedule relative value file established by the
8.8Centers for Medicare and Medicaid Services. The commissioner shall publish the notices
8.9of the incorporation by reference in the State Register at least 60 days before the tables
8.10are to become effective for purposes of payment under this section. Each notice of
8.11incorporation must state the date the incorporated tables will become effective and must
8.12include information on how the Medicare relative value tables may be obtained. The
8.13published notices of incorporation by reference and the incorporated tables are not rules
8.14subject to section 14.386 or other provisions of chapter 14, but have the force and effect of
8.15law as of the date specified in the notices.

8.16    Sec. 6. Minnesota Statutes 2012, section 176.231, subdivision 2, is amended to read:
8.17    Subd. 2. Initial report, written report. Where subdivision 1 requires an injury
8.18to be reported within 48 hours, the employer may make an initial report by telephone,
8.19telegraph, or personal notice, and file a written report of the injury within seven days from
8.20its occurrence or within such time as the commissioner of labor and industry designates.
8.21All written reports of injuries required by subdivision 1 shall include the date of injury.
8.22The reports shall be on a form designed by the commissioner, with a clear copy suitable
8.23for imaging to the commissioner, one copy to the insurer, and one copy to the employee.
8.24The employer must give the employee the "Minnesota Workers' Compensation
8.25System Employee Information Sheet" at the time the employee is given a copy of the
8.26first report of injury.
8.27If an insurer or self-insurer repeatedly fails to pay benefits within three days of the
8.28due date, pursuant to section 176.221, the insurer or self-insurer shall be ordered by the
8.29commissioner to explain, in person, the failure to pay benefits due in a reasonable time.
8.30If prompt payments are not thereafter made, the commissioner shall refer the insurer or
8.31self-insurer to the commissioner of commerce for action pursuant to section 176.225,
8.32subdivision 4

8.33    Sec. 7. Minnesota Statutes 2012, section 176.305, subdivision 1a, is amended to read:
9.1    Subd. 1a. Settlement and pretrial conferences; summary decision. The chief
9.2administrative law judge shall promptly assign the petition to a compensation judge under
9.3section 176.307, and shall schedule a settlement conference before a compensation judge,
9.4to be held no later than 180 days after a claim petition was filed, or 45 days after a petition
9.5to discontinue, objection to discontinuance, or request for formal hearing was filed.
9.6All parties must appear at the settlement conference, either personally or by
9.7representative, must be prepared to discuss settlement of all issues, and must be prepared
9.8to discuss or present the information required by the joint rules of the division and the
9.9office. If a representative appears on behalf of a party, the representative must have
9.10authority to fully settle the matter. The parties shall serve and file a pretrial statement no
9.11fewer than five days before the settlement conference.
9.12If settlement is not reached, the chief administrative law judge shall schedule a
9.13hearing to be held within 90 days from the scheduled settlement conference. However,
9.14the hearing must be held earlier than 90 days from the scheduled settlement conference if
9.15this chapter requires an expedited hearing to be held at an earlier date. The hearing must
9.16be held before a compensation judge other than the compensation judge who conducted
9.17the settlement conference. The compensation judge assigned to hold the hearing may
9.18choose to conduct a pretrial conference to clarify the issues and evidence that will be
9.19presented at the hearing.
9.20Cancellations and continuations of proceedings are disfavored but may be granted
9.21upon the showing of good cause under section 176.341, subdivision 4.
9.22The compensation judge conducting the settlement conference may require the
9.23parties to present copies of all documentary evidence not previously filed and a summary
9.24of the evidence they will present at a formal hearing. If appropriate, a written summary
9.25decision shall be issued within ten days after the conference stating the issues and a
9.26determination of each issue. If a party fails to appear at the conference, all issues may
9.27be determined contrary to the absent party's interest, provided the party in attendance
9.28presents a prima facie case.
9.29The summary decision is final unless a written request for a formal hearing is served
9.30on all parties and filed with the commissioner within 30 days after the date of service
9.31and filing of the summary decision. Within ten days after receipt of the request, the
9.32commissioner shall certify the matter to the office for a de novo hearing. In proceedings
9.33under section 176.2615, the summary decision is final and not subject to appeal or de
9.34novo proceedings.

9.35    Sec. 8. REPEALER.
10.1Minnesota Statutes 2012, sections 175.006, subdivision 1; 175.08; 175.14; 175.26;
10.2176.1311; 176.136, subdivision 3; 176.2615; and 176.641, are repealed.