1.1 	A bill for an act
1.2 	relating to state government; requiring the Department of Labor and Industry 
1.3 	to issue a request for proposals for a contract to reduce improper workers' 
1.4 	compensation payments.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. REQUEST FOR PROPOSALS.
 1.7 	(a) The commissioner of labor and industry shall issue a request for proposals 
1.8 	for a contract to use technologically advanced software and services to improve the 
1.9 	identification and rejection of improper payments in the workers' compensation system. 
1.10 	The request for proposals must ensure that a system recommended and implemented by 
1.11 	the contractor will:
1.12 	(1) implement a more comprehensive, robust, and technologically advanced 
1.13 	improper payments identification program;
1.14 	(2) utilize state of the art fraud detection methods and technologies such as predictive 
1.15 	modeling, link analysis, and anomaly or outlier detection;
1.16 	(3) have the ability to identify and report  improper payments before the payments 
1.17 	are made;
1.18 	(4) include a mechanism so that the system improves its detection capabilities over 
1.19 	time;
1.20 	(5) leverage technology to make the payment evaluation process more transparent 
1.21 	and cost-efficient; and
1.22 	(6) result in increased savings by reducing or eliminating wrongful payments.
1.23 	(b) Based on responses to the request for proposal, the commissioner must enter into 
1.24 	a contract for the services specified in paragraph (a) by October 1, 2011. The contract 
2.1 	shall incorporate a performance-based vendor financing option whereby the vendor shares 
2.2 	in the risk of the project's success.

2.3 	EFFECTIVE DATE. This section is effective the day following final enactment.