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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1986 

                        CHAPTER 461-H.F.No. 1873 
           An act relating to workers' compensation; regulating 
          the obligations and administration of the special 
          compensation fund; restricting liability for 
          out-of-state injuries; regulating the payment and 
          right to benefits; compensation court of appeals; 
          regulating attorneys' fees; relating to jurisdiction 
          of issues of medical causation; providing for the 
          administration of claims; providing penalties; 
          amending Minnesota Statutes 1984, sections 176.012; 
          176.041, subdivisions 1, 2, 3, and by adding a 
          subdivision; 176.081, subdivision 1; 176.101, 
          subdivision 3f; 176.103, subdivision 2; 176.104, 
          subdivision 1; 176.105, subdivision 4; 176.111, 
          subdivisions 6, 12, 15, and 20; 176.129, subdivision 
          8; 176.131, subdivisions 1a and 3; 176.135, 
          subdivisions 1 and 1a; 176.179; 176.225, subdivision 
          1; 176.231, subdivisions 1 and 10; 176.242, 
          subdivision 2; 176.243, subdivision 3; 176.361, 
          subdivisions 1 and 2; 176.421, subdivision 6; 176.521, 
          subdivision 3; 176.603; 176.611, subdivision 2; 
          176.83, subdivision 2; Minnesota Statutes 1985 
          Supplement, sections 176.101, subdivision 3e; and 
          176.138; proposing coding for new law in Minnesota 
          Statutes, chapters 79 and 176; repealing Minnesota 
          Statutes 1984, sections 176.265; 176.431; 176.441; and 
          176.611, subdivisions 3 and 4.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [79.531] [NEGLIGENTLY PAID CLAIMS.] 
    An insurer who has negligently paid benefits under chapter 
176 may not charge the payment to the employer's experience 
rating. 
    Sec. 2.  Minnesota Statutes 1984, section 176.012, is 
amended to read: 
    176.012 [ELECTION OF COVERAGE.] 
    The persons, partnerships and corporations described in 
this section may elect to provide the insurance coverage 
required by this chapter.  
    (a) An owner or owners of a business or farm may elect 
coverage for themselves.  
    (b) A partnership owning a business or farm may elect 
coverage for any partner.  
    (c) A family farm corporation as defined in section 500.24, 
subdivision 2, clause (c) may elect coverage for any executive 
officer.  
    (d) A closely held corporation which had less than 22,880 
hours of payroll in the previous calendar year may elect 
coverage for any executive officer if that executive officer is 
also an owner of at least 25 percent of the stock of the 
corporation.  
    (e) A person, partnership, or corporation hiring an 
independent contractor, as defined by rules adopted by the 
commissioner, may elect to provide coverage for that independent 
contractor.  
    A person, partnership, or corporation may charge the 
independent contractor a fee for providing the coverage only if 
the independent contractor (1) elects in writing to be covered, 
(2) is issued an endorsement setting forth the terms of the 
coverage and the name of the independent contractors, and (3) 
the fee and how it is calculated. 
    The persons, partnerships and corporations described in 
this section may also elect coverage for an employee who is a 
spouse, parent or child, regardless of age, of an owner, 
partner, or executive officer, who is eligible for coverage 
under this section.  Coverage may be elected for a spouse, 
parent or child whether or not coverage is elected for the 
related owner, partner or executive director and whether or not 
the person, partnership or corporation employs any other person 
to perform a service for hire.  Any person for whom coverage is 
elected pursuant to this section shall be included within the 
meaning of the term employee for the purposes of this chapter. 
      Notice of election of coverage or of termination of 
election under this section shall be provided in writing to the 
insurer.  Coverage or termination of coverage is effective the 
day following receipt of notice by the insurer or at a 
subsequent date if so indicated in the notice.  The insurance 
policy shall be endorsed to indicate the names of those persons 
for whom coverage has been elected or terminated under this 
section.  An election of coverage under this section shall 
continue in effect as long as a policy or renewal policy of the 
same insurer is in effect.  
    Nothing in this section shall be construed to limit the 
responsibilities of owners, partnerships or corporations to 
provide coverage for their employees, if any, as required under 
this chapter. 
    Sec. 3.  Minnesota Statutes 1984, section 176.041, 
subdivision 1, is amended to read: 
    Subdivision 1.  [EMPLOYMENTS EXCLUDED.] This chapter does 
not apply to a person employed by a common carrier by railroad 
engaged in interstate or foreign commerce and who is covered by 
the Federal Employers' Liability Act, United States Code, title 
45, sections 51 to 60, or other comparable federal law; to a 
person employed by a family farm as defined by section 176.011, 
subdivision 11a, or the spouse, parent, and child, regardless of 
age, of a farmer-employer working for the farmer-employer; to a 
partner engaged in a farm operation or a partner engaged in a 
business and the spouse, parent, and child, regardless of age, 
of a partner in the farm operation or business; to an executive 
officer of a family farm corporation; to an executive officer of 
a closely held corporation referred to in section 176.012; to a 
spouse, parent, or child, regardless of age, of an executive 
officer of a family farm corporation as defined in section 
500.24, subdivision 2, and employed by that family farm 
corporation; to a spouse, parent, or child, regardless of age, 
of an executive officer of a closely held corporation referred 
to in section 176.012; to another farmer or to a member of the 
other farmer's family exchanging work with the farmer-employer 
or family farm corporation operator in the same community; to a 
person whose employment at the time of the injury is casual and 
not in the usual course of the trade, business, profession, or 
occupation of the employer; persons who are independent 
contractors as defined by rules adopted by the commissioner 
pursuant to section 176.83 except that this exclusion does not 
apply to an employee of an independent contractor; nor does this 
chapter apply to an officer or a member of a veterans' 
organization whose employment relationship arises solely by 
virtue of attending meetings or conventions of the veterans' 
organization, unless the veterans' organization elects by 
resolution to provide coverage under this chapter for the 
officer or member.  
    Neither does the chapter apply to a person employed as a 
household worker in, for, or about a private home or household 
who earns less than $500 $1,000 in cash in a three-month period 
from a single private home or household provided that a 
household worker who has earned $500 $1,000 or more from the 
household worker's present employer in a three-month period 
within the previous year is covered by this chapter regardless 
of whether or not the household worker has earned $500 $1,000 in 
the present quarter.  
    This chapter does not apply to those persons employed by a 
corporation if those persons are related by blood or marriage, 
within the third degree of kindred according to the rules of 
civil law, to the officers of the corporation, and if the 
corporation files a written election with the commissioner to 
have those persons excluded from this chapter except that a 
written election is not required for a person who is otherwise 
excluded from this chapter by this section.  
    This chapter does not apply to a nonprofit association 
which does not pay more than $500 $1,000 in salary or wages in a 
year.  
    This chapter does not apply to persons covered under the 
Domestic Volunteer Service Act of 1973, as amended, 42 U.S.C. 
sections 5011, et. seq.  
    Sec. 4.  Minnesota Statutes 1984, section 176.041, 
subdivision 2, is amended to read: 
    Subd. 2.  [EXTRA-TERRITORIAL APPLICATION.] If an employee 
who regularly performs the primary duties of his employment 
within this state, or who is hired within this state, receives 
an injury while outside of this state in the employ of the same 
employer, the provisions of this chapter shall apply to such 
injury unless the transfer is normally considered to be 
permanent.  If a resident of this state is transferred outside 
the territorial limits of the United States as an employee of a 
Minnesota employer, he shall be presumed to be temporarily 
employed outside of this state while so employed. 
    Sec. 5.  Minnesota Statutes 1984, section 176.041, 
subdivision 3, is amended to read: 
    Subd. 3.  [TEMPORARY OUT-OF-STATE EMPLOYMENT.] If an 
employee hired in this state by a Minnesota employer, receives 
an injury while temporarily employed outside of this state, such 
injury shall be subject to the provisions of this chapter.  If 
the employer's business is in Minnesota and the employee's 
residence is in Minnesota, employment outside of this state 
shall be considered temporary. 
    Sec. 6.  Minnesota Statutes 1984, section 176.041, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [OUT-OF-STATE INJURIES.] Except as specifically 
provided by subdivisions 2 and 3, injuries occurring outside of 
this state are not subject to this chapter. 
    Sec. 7.  Minnesota Statutes 1984, section 176.081, 
subdivision 1, is amended to read: 
    Subdivision 1.  (a) A fee for legal services of 25 percent 
of the first $4,000 of compensation awarded to the employee and 
20 percent of the next $27,500 of compensation awarded to the 
employee is permissible and does not require approval by the 
commissioner, compensation judge, or any other party except as 
provided in clause (b).  If the employer or the insurer or the 
defendant is given written notice of claims for legal services 
or disbursements, the claim shall be a lien against the amount 
paid or payable as compensation.  In no case shall fees be 
calculated on the basis of any undisputed portion of 
compensation awards.  Allowable fees under this chapter shall be 
based solely upon genuinely disputed portions of claims, 
including disputes related to the payment of rehabilitation 
benefits or to other aspects of a rehabilitation plan.  Fees for 
administrative conferences under sections 176.242, 176.2421, 
176.243, or 176.244 shall be determined on an hourly basis, 
according to the criteria in subdivision 5.  
    (b) An attorney who is claiming legal fees under this 
section shall file a statement of attorney's fees with the 
commissioner, compensation judge before whom the matter was 
heard, or workers' compensation court of appeals on cases before 
the court.  A copy of the signed retainer agreement shall also 
be filed.  The employee and insurer shall receive a copy of the 
statement.  The statement shall be on a form prescribed by the 
commissioner and shall clearly and conspicuously state that the 
employee or insurer has ten calendar days to object to the 
attorney fees requested.  If no objection is timely made by the 
employee or insurer, the amount requested shall be conclusively 
presumed reasonable providing the amount does not exceed the 
limitation in subdivision 1.  The commissioner, compensation 
judge, or court of appeals shall issue an order granting the 
fees and the amount requested shall be awarded to the party 
requesting the fee.  
    If a timely objection is filed, or the fee is determined on 
an hourly basis, the commissioner, compensation judge, or court 
of appeals shall review the matter and make a determination 
based on the criteria in subdivision 5. 
    If no timely objection is made by an employer or insurer, 
reimbursement under subdivision 7 shall be made if the statement 
of fees requested this reimbursement.  
    Sec. 8.  Minnesota Statutes 1985 Supplement, section 
176.101, subdivision 3e, is amended to read: 
    Subd. 3e.  [END OF TEMPORARY TOTAL COMPENSATION; SUITABLE 
JOB.] (a) Ninety days after an employee has reached maximum 
medical improvement and the medical report described in clause 
(c) has been served on the employee, or 90 days after the end of 
an approved retraining program, whichever is later, the 
employee's temporary total compensation shall cease.  This 
cessation shall occur at an earlier date if otherwise provided 
by this chapter.  
    (b) If at any time prior to the end of the 90-day period 
described in clause (a) the employee retires or the employer 
furnishes work to the employee that is consistent with an 
approved plan of rehabilitation and meets the requirements of 
section 176.102, subdivision 1, or, if no plan has been 
approved, that the employee can do in his or her physical 
condition and that job produces an economic status as close as 
possible to that the employee would have enjoyed without the 
disability, or the employer procures this employment with 
another employer or the employee accepts this job with another 
employer, temporary total compensation shall cease and the 
employee shall, if appropriate, receive impairment compensation 
pursuant to subdivision 3b.  This impairment compensation is in 
lieu of economic recovery compensation under subdivision 3a, and 
the employee shall not receive both economic recovery 
compensation and impairment compensation.  Temporary total 
compensation and impairment compensation shall not be paid 
concurrently.  Once temporary total compensation ceases no 
further temporary total compensation is payable except as 
specifically provided by this section.  
    (c) Upon receipt of a written medical report indicating 
that the employee has reached maximum medical improvement, the 
employer or insurer shall serve a copy of the report upon the 
employee and shall file a copy with the division.  The beginning 
of the 90-day period described in clause (a) shall commence on 
the day this report is served on the employee for the purpose of 
determining whether a job offer consistent with the requirements 
of this subdivision is made.  A job offer may be made before the 
employee reaches maximum medical improvement.  
    (d) The job which is offered or procured by the employer or 
accepted by the employee under clause (b) does not necessarily 
have to commence immediately but shall commence within a 
reasonable period after the end of the 90-day period described 
in clause (a).  Temporary total compensation shall not cease 
under this subdivision until the job commences.  
    (e) If the job offered under clause (a) is offered or 
procured by the employer and is not the job the employee had at 
the time of injury it shall be offered and described in writing 
and.  The written description shall state the nature of the job, 
the rate of pay, the physical requirements of the job, and any 
other information necessary to fully and completely inform the 
employee of the job duties and responsibilities.  The written 
description and the written offer need not be contained in the 
same document.  
    The employee has 14 calendar days after receipt of the 
written description and offer to accept or reject the job 
offer.  If the employee does not respond within this period it 
is deemed a refusal of the offer.  Where there is an 
administrative conference to determine suitability under section 
176.101, subdivision 3v, or 176.242, the period begins to run on 
the date of the commissioner's decision.  
    (f) Self-employment may be an appropriate job under this 
subdivision.  
    The commissioner shall monitor application of this 
subdivision and may adopt rules to assure its proper application.
    Sec. 9.  Minnesota Statutes 1984, section 176.101, 
subdivision 3f, is amended to read: 
    Subd. 3f.  [LIGHT-DUTY JOB PRIOR TO MAXIMUM MEDICAL 
IMPROVEMENT THE END OF TEMPORARY TOTAL COMPENSATION.] If the 
employer offers a job prior to the employee reaching maximum 
medical improvement the end of the 90-day period referred to in 
subdivision 3e, paragraph (a) and the job is consistent with an 
approved plan of rehabilitation or if no rehabilitation plan has 
been approved and the job is within the employee's physical 
limitations; or the employer procures a job for the employee 
with another employer which meets the requirements of this 
subdivision; or the employee accepts a job with another employer 
which meets the requirements of this subdivision, the employee's 
temporary total compensation shall cease.  In this case the 
employee shall receive impairment compensation for the permanent 
partial disability which is ascertainable at that time.  This 
impairment compensation shall be paid at the same rate that 
temporary total compensation was last paid.  Upon reaching 
maximum medical improvement the end of temporary total 
compensation under subdivision 3e, paragraph (a), the provisions 
of subdivisions 3e or 3p apply, whichever is appropriate, and 
economic recovery compensation or impairment compensation is 
payable accordingly except that the compensation shall be offset 
by impairment compensation received under this subdivision.  
    Sec. 10.  Minnesota Statutes 1984, section 176.103, 
subdivision 2, is amended to read: 
    Subd. 2.  [SCOPE.] (a) The commissioner shall monitor the 
medical and surgical treatment provided to injured employees, 
the services of other health care providers and shall also 
monitor hospital utilization as it relates to the treatment of 
injured employees.  This monitoring shall include determinations 
concerning the appropriateness of the service, whether the 
treatment is necessary and effective, the proper cost of 
services, the quality of the treatment, the right of providers 
to receive payment under this chapter for services rendered or 
the right to receive payment under this chapter for future 
services.  The commissioner may penalize, disqualify, or suspend 
a provider from receiving payment for services rendered under 
this chapter, if the commissioner determines that the provider 
has violated any part of this chapter or rule adopted under this 
chapter.  The commissioner's authority under this section also 
includes the authority to make determinations regarding any 
other activity involving the questions of utilization of medical 
services, and any other determination the commissioner deems 
necessary for the proper administration of this section.  
    Except as provided in paragraph (b) of this subdivision, 
the commissioner has the sole authority to make determinations 
under this section with a right of appeal to the medical 
services review board as provided in subdivision 3 and the 
workers' compensation court of appeals.  A compensation judge 
has no jurisdiction in making determinations under this section. 
    (b) The commissioner has authority under this section to 
make determinations regarding medical causation.  Objections to 
these determinations shall be referred to the chief 
administrative law judge for a de novo hearing before a 
compensation judge, with a right to review by the workers' 
compensation court of appeals, as provided in this chapter. 
    Sec. 11.  Minnesota Statutes 1984, section 176.104, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DISPUTE.] If there exists a dispute 
regarding medical causation or whether an injury arose out of 
and in the course and scope of employment and an employee has 
been disabled for the requisite time under section 176.102, 
subdivision 4, prior to determination of liability, the employee 
shall be referred by the commissioner to the division of 
vocational rehabilitation which shall provide rehabilitation 
consultation if appropriate.  The services provided by the 
division of vocational rehabilitation and the scope and term of 
the rehabilitation are governed by section 176.102 and rules 
adopted pursuant to that section.  Rehabilitation costs and 
services under this subdivision shall be monitored by the 
commissioner. 
    Sec. 12.  Minnesota Statutes 1984, section 176.105, 
subdivision 4, is amended to read: 
    Subd. 4.  [LEGISLATIVE INTENT; RULES; LOSS OF MORE THAN ONE 
BODY PART.] (a) For the purpose of establishing a disability 
schedule pursuant to clause (b) of this subdivision, the 
legislature declares its intent that the commissioner establish 
a disability schedule which, assuming the same number and 
distribution of severity of injuries, the aggregate total of 
impairment compensation and economic recovery compensation 
benefits under section 176.101, subdivisions 3a to 3u be 
approximately equal to the total aggregate amount payable for 
permanent partial disabilities under section 176.101, 
subdivision 3, provided, however, that awards for specific 
injuries under the proposed schedule need not be the same as 
they were for the same injuries under the schedule pursuant to 
section 176.101, subdivision 3.  The schedule shall be 
determined by sound actuarial evaluation and shall be based on 
the benefit level which exists on January 1, 1983.  
     (b) The commissioner shall by rulemaking adopt procedures 
setting forth rules for the evaluation and rating of functional 
disability and the schedule for permanent partial disability and 
to determine the percentage of loss of function of a part of the 
body based on the body as a whole, including internal organs, 
described in section 176.101, subdivision 3, and any other body 
part not listed in section 176.101, subdivision 3, which the 
commissioner deems appropriate.  
   Emergency rules shall be adopted for this purpose not later 
than January 1, 1984.  Prior to the adoption of these rules, at 
least one public hearing shall be held by the commissioner, in 
addition to the requirements of sections 14.29 to 14.36. 
Notwithstanding sections 14.29 to 14.36, the emergency rules 
adopted under this subdivision shall be effective until 
superseded by permanent rules.  The rules shall promote 
objectivity and consistency in the evaluation of permanent 
functional impairment due to personal injury and in the 
assignment of a numerical rating to the functional impairment.  
    Prior to adoption of emergency rules the commissioner shall 
conduct an analysis of the current permanent partial disability 
schedule for the purpose of determining the number and 
distribution of permanent partial disabilities and the average 
compensation for various permanent partial disabilities.  The 
commissioner shall consider setting the compensation under the 
proposed schedule for the most serious conditions higher in 
comparison to the current schedule and shall consider decreasing 
awards for minor conditions in comparison to the current 
schedule.  
     The commissioner may consider, among other factors, and 
shall not be limited to the following factors in developing 
rules for the evaluation and rating of functional disability and 
the schedule for permanent partial disability benefits:  
     (1) the workability and simplicity of the procedures with 
respect to the evaluation of functional disability;  
     (2) the consistency of the procedures with accepted medical 
standards;  
     (3) rules, guidelines, and schedules that exist in other 
states that are related to the evaluation of permanent partial 
disability or to a schedule of benefits for functional 
disability provided that the commissioner is not bound by the 
degree of disability in these sources but shall adjust the 
relative degree of disability to conform to the expressed intent 
of clause (a);  
     (4) rules, guidelines, and schedules that have been 
developed by associations of health care providers or 
organizations provided that the commissioner is not bound by the 
degree of disability in these sources but shall adjust the 
relative degree of disability to conform to the expressed intent 
of clause (a);  
     (5) the effect the rules may have on reducing litigation;  
     (6) the treatment of preexisting disabilities with respect 
to the evaluation of permanent functional disability provided 
that any preexisting disabilities must be objectively determined 
by medical evidence; and 
     (7) symptomatology and loss of function and use of the 
injured member.  
     The factors in paragraphs (1) to (7) shall not be used in 
any individual or specific workers' compensation claim under 
this chapter but shall be used only in the adoption of rules 
pursuant to this section.  
    Nothing listed in paragraphs (1) to (7) shall be used to 
dispute or challenge a disability rating given to a part of the 
body so long as the whole schedule conforms with the expressed 
intent of clause (a). 
    (c) If an employee suffers a permanent functional 
disability of more than one body part due to a personal injury 
incurred in a single occurrence, the percent of the whole body 
which is permanently partially disabled shall be determined by 
the following formula so as to ensure that the percentage for 
all functional disability combined does not exceed the total for 
the whole body:  

                             A + B (1 - A) 
    where:  A is the greater percentage whole body loss of the 
first body part; and B is the lesser percentage whole body loss 
otherwise payable for the second body part.  A + B (1-A) is 
equivalent to A + B - AB.  
    For permanent partial disabilities to three body parts due 
to a single occurrence or as the result of an occupational 
disease, the above formula shall be applied, providing that A 
equals the result obtained from application of the formula to 
the first two body parts and B equals the percentage for the 
third body part.  For permanent partial disability to four or 
more body parts incurred as described above, A equals the result 
obtained from the prior application of the formula, and B equals 
the percentage for the fourth body part or more in arithmetic 
progressions. 
    Sec. 13.  Minnesota Statutes 1984, section 176.111, 
subdivision 6, is amended to read: 
    Subd. 6.  [SPOUSE, NO DEPENDENT CHILD.] If the deceased 
employee leaves a dependent surviving spouse and no dependent 
child, there shall be paid to the spouse weekly workers' 
compensation benefits at 50 percent of the daily weekly wage at 
the time of the injury for a period of ten years, including 
adjustments as provided in section 176.645.  
    Sec. 14.  Minnesota Statutes 1984, section 176.111, 
subdivision 12, is amended to read: 
    Subd. 12.  [ORPHANS.] If the deceased employee leave a 
dependent orphan, there shall be paid 55 percent of the daily 
weekly wage at the time of the injury of the deceased, for two 
or more orphans there shall be paid 66 2/3 percent of the wages. 
    Sec. 15.  Minnesota Statutes 1984, section 176.111, 
subdivision 15, is amended to read: 
    Subd. 15.  [REMOTE DEPENDENTS.] If the deceased employee 
leave no widow or child or husband or parent entitled to any 
payment under this chapter, but leaves a grandparent, 
grandchild, brother, sister, mother-in-law, or father-in-law 
wholly dependent on him for support, there shall be paid to such 
dependent, if but one, 30 percent of the daily weekly wage at 
the time of injury of the deceased, or if more than one, 35 
percent of the daily weekly wage at the time of the injury of 
the deceased, divided among them share and share alike. 
    Sec. 16.  Minnesota Statutes 1984, section 176.111, 
subdivision 20, is amended to read: 
    Subd. 20.  [ACTUAL DEPENDENTS, COMPENSATION.] Actual 
dependents are entitled to take compensation in the order named 
in subdivision 3 during dependency until 66 2/3 percent of the 
daily weekly wage of the deceased at the time of injury is 
exhausted.  The total weekly compensation to be paid to full 
actual dependents of a deceased employee shall not exceed in the 
aggregate an amount equal to the maximum weekly compensation for 
a temporary total disability. 
    Sec. 17.  Minnesota Statutes 1984, section 176.129, 
subdivision 8, is amended to read: 
    Subd. 8.  [COMMISSIONER AS ADMINISTRATOR.] The commissioner 
is the administrator of the special compensation fund.  The 
special fund shall be designated a party in an action regarding 
any right, obligation, and liability of the special fund.  The 
state treasurer, as custodian, does not have standing in an 
action determining any right, obligation, or liability of the 
special fund.  As requested by the commissioner, the attorney 
general shall represent the special fund in all legal matters in 
which the special fund has an interest.  The commissioner may 
designate one or more division employees to appear on behalf of 
the special fund in proceedings under this chapter.  The 
division employees so designated need not be attorneys-at-law. 
    Sec. 18.  Minnesota Statutes 1984, section 176.131, 
subdivision 1a, is amended to read: 
    Subd. 1a.  If an employee is employed in an on the job 
retraining training program pursuant to an approved 
rehabilitation plan under section 176.102 and the employee 
incurs a personal injury that aggravates the personal injury for 
which the employee has been certified to enter the on the 
job retraining training program, the on the job training 
employer shall pay the medical expenses and compensation 
required by this chapter, and shall be reimbursed from the 
special compensation fund for the compensation and medical 
expense that is attributable to the aggravated injury.  The 
employer, at the time of the personal injury for which the 
employee has been certified approved for retraining on the job 
training, is liable for the portion of the disability that is 
attributable to that injury.  
    Sec. 19.  Minnesota Statutes 1984, section 176.131, 
subdivision 3, is amended to read: 
    Subd. 3.  To entitle the employer to secure reimbursement 
from the special compensation fund, the following provisions 
must be complied with: 
    (a) Provisions of section 176.181, subdivisions 1 and 2. 
    (b) The employee with a pre-existing physical impairment 
must have been registered with the commissioner prior to the 
employee's personal injury or within 180 days after notice of 
the employee's personal injury is received by the employer.  
Registration subsequent to the injury shall be based on a 
medical report or record made prior to the injury indicating the 
pre-existing physical impairment.  
    Sec. 20.  Minnesota Statutes 1984, section 176.135, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MEDICAL, CHIROPRACTIC, PODIATRIC, 
SURGICAL, HOSPITAL.] (a) The employer shall furnish any medical, 
chiropractic, podiatric, surgical and hospital treatment, 
including nursing, medicines, medical, chiropractic, podiatric, 
and surgical supplies, crutches and apparatus, including 
artificial members, or, at the option of the employee, if the 
employer has not filed notice as hereinafter provided, Christian 
Science treatment in lieu of medical treatment, chiropractic 
medicine and medical supplies, as may reasonably be required at 
the time of the injury and any time thereafter to cure and 
relieve from the effects of the injury.  This treatment shall 
include treatments necessary to physical rehabilitation.  The 
employer shall furnish replacement or repair for artificial 
members, glasses, or spectacles, artificial eyes, podiatric 
orthotics, dental bridge work, dentures or artificial teeth, 
hearing aids, canes, crutches or wheel chairs damaged by reason 
of an injury arising out of and in the course of the 
employment.  In case of the employer's inability or refusal 
seasonably to do so the employer is liable for the reasonable 
expense incurred by or on behalf of the employee in providing 
the same.  The employer shall pay for the reasonable value of 
nursing services by a member of the employee's family in cases 
of permanent total disability.  Except as provided in paragraph 
(b) of this subdivision, orders of the commissioner with respect 
to this subdivision may be reviewed by the medical services 
review board pursuant to section 176.103.  Orders of the medical 
services review board with respect to this subdivision may be 
reviewed by the workers' compensation court of appeals on 
petition of an aggrieved party pursuant to section 176.103.  
Orders of the court of appeals may be reviewed by writ of 
certiorari to the supreme court.  
    (b) The commissioner has authority to make determinations 
regarding medical causation and regarding the question whether 
the medical condition, which required the furnished treatment or 
supplies, is a consequence of the injury.  Objections to any 
order of the commissioner with respect to this paragraph shall 
be referred to the chief administrative law judge for a de novo 
hearing before a compensation judge, with a right to review by 
the workers' compensation court of appeals, as provided in this 
chapter. 
    Sec. 21.  Minnesota Statutes 1984, section 176.135, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [NON-EMERGENCY SURGERY; SECOND SURGICAL 
OPINION.] The employer is required to furnish surgical treatment 
pursuant to subdivision 1 only after the employee has obtained 
two surgical opinions concerning whether the surgery is 
reasonably required to cure and relieve the effects of the 
personal injury or occupational disease.  If at least one of the 
opinions affirms that the surgery is reasonably required, the 
employee may choose to undergo the surgery at the employer's 
expense.  The employer is required to pay the reasonable value 
of the surgery unless the commissioner determines that the 
surgery is not reasonably required.  A second surgical opinion 
is not required in cases of emergency surgery or when the 
employer and employee agree that the opinion is not necessary.  
    Sec. 22.  Minnesota Statutes 1985 Supplement, section 
176.138, is amended to read: 
    176.138 [MEDICAL DATA; ACCESS.] 
    Notwithstanding any other state laws related to the privacy 
of medical data or any private agreements to the contrary, the 
release of medical data related to a current claim for 
compensation under this chapter to the employee, employer, or 
insurer who are parties to the claim, or to the department of 
labor and industry, shall not require prior approval of any 
party to the claim.  This section does not preclude the release 
of medical data under section 175.10 or 176.231, subdivision 9.  
Requests for pertinent data shall be made in writing to the 
person or organization that collected or currently possesses the 
data.  The data shall be provided by the collector or possessor 
within seven working days of receiving the request.  In all 
cases of a request for the data, except when it is the employee 
who is making the request, the employee shall be sent written 
notification of the request by the party requesting the data at 
the same time the request is made.  This data shall be treated 
as private data by the party who requests or receives the data 
and the party receiving the data shall provide the employee or 
the employee's attorney shall be provided with a copy of all 
data requested by the requester.  
    Medical data which is not directly related to a current 
injury or disability shall not be released without prior 
authorization of the employee.  
    The commissioner may impose a penalty of up to $200 payable 
to the special compensation fund against a party who does not 
release the data in a timely manner.  A party who does not treat 
this data as private pursuant to this section is guilty of a 
misdemeanor.  This section applies only to written medical data 
which exists at the time the request is made.  
    Sec. 23.  Minnesota Statutes 1984, section 176.179, is 
amended to read: 
    176.179 [PAYMENTS OF COMPENSATION RECEIVED IN GOOD FAITH.] 
    Notwithstanding section 176.521, subdivision 3, or any 
other provision of this chapter to the contrary, except as 
provided in this section, no lump sum or weekly payment, or 
settlement, which is voluntarily paid to an injured employee or 
the survivors of a deceased employee in apparent or seeming 
accordance with the provisions of this chapter by an employer or 
insurer, or is paid pursuant to an order of the workers' 
compensation division, a compensation judge, or court of appeals 
relative to a claim by an injured employee or the employee's 
survivors, and received in good faith by the employee or the 
employee's survivors shall be refunded to the paying employer or 
insurer in the event that it is subsequently determined that the 
payment was made under a mistake in fact or law by the employer 
or insurer.  When the payments have been made to a person who is 
entitled to receive further payments of compensation for the 
same injury, the mistaken compensation may be taken as a full 
credit against future lump sum benefit entitlement; provided, 
however, that and as a partial credit against future weekly 
benefits.  The credit applied against further payments of 
temporary total disability, temporary partial disability, 
permanent total disability, retraining benefits or, death 
benefits, or weekly payments of economic recovery or impairment 
compensation shall not exceed 20 percent of the amount that 
would otherwise be payable. 
    Sec. 24.  Minnesota Statutes 1984, section 176.225, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GROUNDS.] Upon reasonable notice and 
hearing or opportunity to be heard, the division, a compensation 
judge, or upon appeal, the workers' compensation court of 
appeals or the supreme court may award compensation, in addition 
to the total amount of compensation award, of up to 25 percent 
of that total amount where an employer or insurer has: 
    (a) instituted a proceeding or interposed a defense which 
does not present a real controversy but which is frivolous or 
for the purpose of delay; or, 
    (b) unreasonably or vexatiously delayed payment; or, 
    (c) neglected or refused to pay compensation; or, 
    (d) intentionally underpaid compensation; or 
     (e) unreasonably or vexatiously discontinued compensation 
in violation of section 176.242. 
    Sec. 25.  Minnesota Statutes 1984, 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 or longer, 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. 
    Sec. 26.  Minnesota Statutes 1984, section 176.231, 
subdivision 10, is amended to read: 
    Subd. 10.  [FAILURE TO FILE REQUIRED REPORT, PENALTY.] If 
an employer, physician, chiropractor, or other health provider 
fails to file with the commissioner any report required by this 
section in the manner and within the time limitations 
prescribed, or otherwise fails to provide a report required by 
this section in the manner provided by this section, the 
commissioner may impose a penalty of up to $200 for each failure.
    The attorney general shall sue in a civil action to collect 
this penalty upon notification of the matter by the commissioner.
The commissioner shall certify to the attorney general each 
failure to report immediately upon its occurrence.  The 
imposition of a penalty may be appealed to a compensation judge 
within 30 days of notice of the penalty. 
    Penalties collected by the state under this subdivision 
shall be paid into the state treasury special compensation fund. 
    Sec. 27.  Minnesota Statutes 1984, section 176.242, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONFERENCE, REQUEST.] (a) The employee has ten 
calendar days from the date the notice was filed with the 
commissioner to request that the commissioner schedule an 
administrative conference to determine the appropriateness of 
the proposed discontinuance.  The employer or insurer may 
request an administrative conference under this section at any 
time whether or not a notice of intent to discontinue is filed.  
If a notice of intent to discontinue has been filed, the 
commissioner shall schedule an administrative conference within 
ten calendar days after the commissioner receives timely notice 
of the request for an administrative conference.  If no notice 
of intent to discontinue has been filed and the employer or 
insurer has requested a conference, the commissioner shall 
schedule an administrative conference to be held within 30 
calendar days after the commissioner receives the employer's or 
insurer's request for a conference.  
    (b) If the employee does not, in a timely manner, request 
that the commissioner schedule an administrative conference, or 
fails to appear, without good cause, at a scheduled conference, 
compensation may be discontinued, subject to the employee's 
right under section 176.241.  
    (c) An employee, employer, or insurer may request a 
continuance of a scheduled administrative conference.  If the 
commissioner determines that good cause exists for granting a 
continuance, the commissioner may grant the continuance which 
shall not exceed ten calendar days unless the parties agree to a 
longer continuance.  If the employee is granted a continuance, 
compensation need not be paid during the period of continuance 
but shall recommence upon the date of the conference unless the 
commissioner orders otherwise.  If the employer or insurer is 
granted a continuance, compensation shall continue to be paid 
during the continuance.  There is no limit to the number of 
continuances the commissioner may grant provided that the 
payment of compensation is subject to this clause during the 
continuance.  
    (d) If the insurer's stated reason for the discontinuance 
is that the employee has reached maximum medical improvement, 
the employee may request a continuance under paragraph (c) for 
the purpose of obtaining a medical report.  The continuance 
under this paragraph may at the discretion of the commissioner 
exceed ten days and benefits shall not cease until the 
expiration of the 90-day period following maximum medical 
improvement.  
    (d) (e) The purpose of an administrative conference is to 
determine whether reasonable grounds exist for a discontinuance. 
    Sec. 28.  Minnesota Statutes 1984, section 176.243, 
subdivision 3, is amended to read: 
    Subd. 3.  [EMPLOYEE REQUEST FOR ADMINISTRATIVE CONFERENCE.] 
If the employee objects to the action of the insurer regarding 
payment of compensation upon the cessation of work by the 
employee or regarding the payment of temporary partial 
disability benefits, the employee may request an administrative 
conference with the commissioner to resolve disputed issues.  A 
request for an administrative conference shall be made within 
ten calendar days after service filing of the notice on the 
employee with the department.  If the employee requests an 
administrative conference the commissioner shall schedule a 
conference to be held within 14 calendar days after the 
commissioner receives the request.  
    Sec. 29.  [176.244] [ADMINISTRATIVE CONFERENCE SCHEDULED BY 
COMMISSIONER, FILING.] 
    (a) The commissioner may schedule an administrative 
conference under sections 176.242, 176.2421, or 176.243 if it 
appears to the commissioner that the employer or insurer has not 
properly or timely filed or served a notice required by those 
sections and the employee requests the conference within 40 days 
of the date the employer or insurer should have filed the 
notice.  The commissioner may, if appropriate, order that 
compensation be paid through the date of the conference where 
compensation is discontinued. 
     (b) Where an employer or insurer is required to file a 
notice under section 176.242, 176.2421, or 176.243, service on 
the employee by mail or in person must occur on or before the 
date of filing. 
    Sec. 30.  Minnesota Statutes 1984, section 176.361, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RIGHT TO INTERVENE.] A person who has an 
interest in any matter before the workers' compensation court of 
appeals, or commissioner, or compensation judge such that the 
person may either gain or lose by an order or decision may 
intervene in the proceeding by filing an application in writing 
stating the facts which show the interest.  The commissioner is 
considered to have an interest and shall be permitted to 
intervene at the appellate level when a party relies in its 
claim or defense upon any statute or rule administered by the 
commissioner, or upon any rule, order, requirement, or agreement 
issued or made under the statute or rule.  
    The commissioner may adopt rules, not inconsistent with 
this section to govern intervention.  The workers' compensation 
court of appeals shall adopt rules to govern the procedure for 
intervention in matters before it.  
    If the department of human services or the department of 
economic security seeks to intervene in any matter before the 
division, a compensation judge or the workers' compensation 
court of appeals, a nonattorney employee of the department, 
acting at the direction of the staff of the attorney general, 
may prepare, sign, serve and file motions for intervention and 
related documents and, appear at prehearing conferences, and 
participate in matters before a compensation judge or the 
workers' compensation court of appeals.  Any other interested 
party may intervene using a nonattorney and may participate in 
any proceeding to the same extent an attorney could.  This 
activity shall not be considered to be the unauthorized practice 
of law.  An intervenor represented by a nonattorney shall be 
deemed to be represented by an attorney for the purposes of the 
conclusive presumption of section 176.521, subdivision 2. 
    Subdivisions 3 to 6 do not apply to matters pending in the 
mediation or rehabilitation and medical services sections. 
    Sec. 31.  Minnesota Statutes 1984, section 176.361, 
subdivision 2, is amended to read: 
    Subd. 2.  [WRITTEN APPLICATION.] A person desiring to 
intervene in a workers' compensation case as a party, including 
but not limited to a health care provider who has rendered 
services to an employee or an insurer who has paid benefits 
under section 176.191, shall submit a timely written application 
to intervene to the compensation or settlement judge to whom the 
case has been assigned.  If the case has not yet been assigned, 
the application shall be made to the calendar judge if the case 
has been certified to the office, or to the division if the case 
has not been certified to the office or to the mediation or 
rehabilitation and medical services section if the matter is 
pending in that section.  
    (a) The application must be served on all parties either 
personally, by first class mail, or registered mail, return 
receipt requested.  An application to intervene must be served 
and filed within 60 30 days after a person has received notice 
that a petition claim has been filed as provided in this section 
or a request for mediation made.  An untimely motion application 
is subject to denial under subdivision 7.  
    (b) In any other situation, timeliness will be determined 
by the judge or awarding authority in each case based on 
circumstances at the time of filing.  The application must show 
how the moving party's applicant's legal rights, duties, or 
privileges may be determined or affected by the case; state the 
grounds and purposes for which intervention is sought; and 
indicate the moving party's statutory right to intervene.  The 
application must be accompanied by the following, if applicable, 
except that if the action is pending in the mediation or 
rehabilitation and medical services section, clause (6) is not 
required and the information listed in clauses (1) to (5) may be 
brought to the conference rather than attached to the 
application:  
    (1) an itemization of disability payments showing the 
period during which the payments were or are being made; the 
weekly or monthly rate of the payments; and the amount of 
reimbursement claimed;  
    (2) a summary of the medical or treatment payments, or 
rehabilitation services provided by the division of vocational 
rehabilitation, broken down by creditor, showing the total bill 
submitted, the period of treatment or rehabilitation covered by 
that bill, the amount of payment on that bill, and to whom the 
payment was made;  
    (3) copies of all medical or treatment bills on which some 
payment was made;  
    (4) copies of the work sheets or other information stating 
how the payments on medical or treatment bills were calculated;  
    (5) a copy of the relevant policy or contract provisions 
upon which the claim for reimbursement is based;  
    (6) a proposed order allowing intervention with sufficient 
copies to serve on all parties;  
    (7) the name and telephone number of the person 
representing the intervenor who has authority to reach a 
settlement of the issues in dispute;  
    (8) proof of service or copy of the registered mail receipt;
    (9) at the option of the intervenor, a proposed stipulation 
which states that all of the payments for which reimbursement is 
claimed are related to the injury or condition in dispute in the 
case and that, if the petitioner is successful in proving the 
compensability of the claim, it is agreed that the sum be 
reimbursed to the intervenor; and 
    (10) if represented by an attorney, the name, address, 
telephone number, and Minnesota Supreme Court license number of 
the attorney. 
    Sec. 32.  Minnesota Statutes 1984, section 176.421, 
subdivision 6, is amended to read: 
    Subd. 6.  [POWERS OF WORKERS' COMPENSATION COURT OF APPEALS 
ON APPEAL.] On an appeal taken under this section, the workers' 
compensation court of appeals' review is limited to the issues 
raised by the parties in the notice of appeal or by a 
cross-appeal.  In these cases, on those issues raised by the 
appeal, the workers' compensation court of appeals may: 
    (1) grant an oral argument based on the record before the 
compensation judge; 
    (1) (2) examine the record; 
    (2) (3) substitute for the findings of fact made by the 
compensation judge findings based on the total evidence; and, 
    (3) (4) sustain, reverse, make or modify an award or 
disallowance of compensation or other order based on the 
facts and, findings, and law; and, 
    (5) remand or make other appropriate order. 
    Sec. 33.  Minnesota Statutes 1984, section 176.521, 
subdivision 3, is amended to read: 
    Subd. 3.  [SETTING ASIDE AWARD UPON SETTLEMENT.] 
Notwithstanding the provisions of section 176.521, subdivision 
1, 2, or 2a, or any provision in the agreement of settlement to 
the contrary, upon the filing of a petition by any party to the 
settlement and after a hearing on the petition, the workers' 
compensation court of appeals may set aside an award made upon a 
settlement, pursuant to this chapter.  In those appropriate 
cases, the workers' compensation court of appeals shall may 
refer the matter to the chief administrative law judge for 
assignment to a compensation judge for hearing.  
    Sec. 34.  Minnesota Statutes 1984, section 176.603, is 
amended to read: 
    176.603 [COST OF ADMINISTERING CHAPTER, PAYMENT.] 
    The annual cost to the commissioner of the department of 
labor and industry of administering this chapter in relation to 
state employees and the necessary expenses which the department 
of labor and industry or the attorney general incurs in 
investigating, administering, and defending a claim against the 
state for compensation shall be paid from the moneys biennially 
appropriated to the department and not from the state 
compensation revolving fund.  
    Sec. 35.  Minnesota Statutes 1984, section 176.611, 
subdivision 2, is amended to read: 
    Subd. 2.  [SELF-SUSTAINING STATE DEPARTMENTS.] Except that 
the transportation department Every department of the state, 
including the University of Minnesota, shall reimburse the fund 
for moneys paid to its employees or their dependents for the 
administration of its claims at such times and in such amounts 
as the commissioner of the department of labor and 
industry orders, every self-sustaining department of the state 
shall pay into such fund at the end of every fiscal year such 
amounts as the commissioner of the department of labor and 
industry shall certify has been paid out of the fund for on 
its employees or their dependents behalf.  For the purposes of 
this section, a "self-sustaining department" is one in which the 
income and revenue from its activities substantially offsets its 
cost of operation.  The heads of the departments shall 
anticipate these payments by including them in their budgets. 
    Sec. 36.  Minnesota Statutes 1984, section 176.83, 
subdivision 2, is amended to read: 
    Subd. 2.  [REHABILITATION.] Rules necessary to implement 
and administer section 176.102, including the establishment of 
qualifications necessary to be a qualified rehabilitation 
consultant and the requirements to be an approved registered 
vendor of rehabilitation services.  
    In this regard, the commissioner shall impose fees under 
section 16A.128 sufficient to cover the cost of approving, 
registering and monitoring qualified rehabilitation consultants 
and approved vendors of rehabilitation services.  The rules may 
also provide for penalties to be imposed by the commissioner 
against insurers or self-insured employers who fail to provide 
rehabilitation consultation to employees pursuant to section 
176.102.  
    These rules may also establish criteria for determining 
"reasonable moving expenses" under section 176.102.  
    The rules shall also establish criteria, guidelines, 
methods, or procedures to be met by an employer or insurer in 
providing the initial rehabilitation consultation required under 
this chapter which would permit the initial consultation to be 
provided by an individual other than a qualified rehabilitation 
consultant.  In the absence of rules regarding an initial 
consultation this consultation shall be conducted pursuant to 
section 176.102. 
    Sec. 37.  [REPEALER.] 
    Minnesota Statutes 1984, sections 176.265; 176.431; 
176.441; and 176.611, subdivisions 3 and 4, are repealed. 
    Sec. 38.  [EFFECTIVE DATE.] 
    Sections 10 and 20 are effective the day following final 
enactment.  Sections 34 and 35 are effective July 1, 1986. 
    Approved March 25, 1986