1.1                          A bill for an act 
  1.2             relating to insurance; amending automobile no-fault 
  1.3             personal injury protection coverage; changing no-fault 
  1.4             arbitration provisions; reducing insurance fraud; 
  1.5             amending Minnesota Statutes 2002, sections 65B.525; 
  1.6             65B.56, subdivision 1. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 65B.525, is 
  1.9   amended to read: 
  1.10     65B.525 [ARBITRATION PROCEDURE; RULES OF COURT.] 
  1.11     Subdivision 1.  [NO-FAULT ARBITRATION.] Except as otherwise 
  1.12  provided in section 72A.327, the supreme court and the several 
  1.13  courts of general trial jurisdiction of this state shall by 
  1.14  rules of court or other constitutionally allowable device, 
  1.15  provide for the mandatory submission to binding arbitration at 
  1.16  the request of either party of ~~all~~ cases at issue where the 
  1.17  claim at the ~~commencement of arbitration~~ time of hearing is in 
  1.18  ~~an~~ the total amount of ~~$10,000~~ $5,000 or less against any 
  1.19  insured's reparation obligor for no-fault benefits ~~or~~ 
  1.20  ~~comprehensive or collision damage coverage~~.  A reparation 
  1.21  obligor may specify in its policy the method by which an 
  1.22  arbitration panel must be selected.  Arbitration may not be 
  1.23  initiated more than one year after the claim was denied or 
  1.24  reduced by the obligor. 
  1.25     Subd. 2.  [ARBITRATION; AGREEMENT OF PARTIES.] The rules of 
  1.26  court may provide that cases which are not at issue, whether or 
  2.1   not suit has been filed, may be referred to arbitration by 
  2.2   agreement of reference signed by counsel for both sides, or by 
  2.3   the parties themselves.  Such agreement of reference shall 
  2.4   define the issues to be arbitrated and, shall also contain any 
  2.5   stipulations with respect to facts submitted or agreed or 
  2.6   defenses waived.  In such cases, the agreement of reference 
  2.7   shall take the place of the pleadings in the case and be filed 
  2.8   of record. 
  2.9      Subd. 3.  [REMOVAL FROM ARBITRATION.] (a) At any time after 
  2.10  a petition for no-fault arbitration is filed, a reparation 
  2.11  obligor may file with the no-fault arbitrator a written demand 
  2.12  for removal from no-fault arbitration jurisdiction when the 
  2.13  basis for that demand is fraud or misrepresentation of material 
  2.14  fact on the part of the claimant, the claimant's treatment 
  2.15  provider, or any other person or entity that is materially 
  2.16  associated with either the treatment provider or claimant.  A 
  2.17  written demand for removal from no-fault arbitration may also be 
  2.18  made if the basis for that demand is a dispute over the 
  2.19  causation of the injury giving rise to the claim or a question 
  2.20  of law.  
  2.21     (b) When a written demand for removal is made, the 
  2.22  reparation obligor must file, within ten days after the date of 
  2.23  the written demand for removal being filed with the no-fault 
  2.24  arbitrator, a motion for removal from no-fault arbitration 
  2.25  jurisdiction, together with a memorandum of law in support of 
  2.26  the reparation obligor's demand, any applicable affidavits, and 
  2.27  any other supporting exhibits and documents with the district 
  2.28  court for the county in which the claimant resides. 
  2.29     (c) As part of its demand for removal from no-fault 
  2.30  arbitration jurisdiction, the reparation obligor may request an 
  2.31  in-camera hearing before the district court judge to whom the 
  2.32  demand for removal is assigned.  Upon a request for an in-camera 
  2.33  hearing on the grounds and evidence for the demand for removal, 
  2.34  the district court must schedule the in-camera hearing within 30 
  2.35  days of the filing with the district court of the demand for 
  2.36  removal. 
  3.1      (d) The reparation obligor must serve the claimant and the 
  3.2   no-fault arbitrator with a copy of its demand for removal and 
  3.3   supporting affidavits or documentation at the time that the 
  3.4   demand for removal is filed with the district court.  The 
  3.5   claimant in the no-fault arbitration proceeding shall have ten 
  3.6   days from the day of service of the demand for removal and 
  3.7   supporting documentation to serve and file a response with the 
  3.8   district court and the reparation obligor. 
  3.9      (e) Upon a prima facia showing that there is a good faith 
  3.10  basis that a question of fact exists as to fraud or 
  3.11  misrepresentation of material fact on the part of the claimant, 
  3.12  the claimant's treatment provider, or any person or entity 
  3.13  associated with either the claimant or the treatment provider, 
  3.14  the district court must take jurisdiction over the arbitration 
  3.15  proceeding and the case shall proceed as a district court civil 
  3.16  action.  The district court must also take jurisdiction over the 
  3.17  arbitration proceeding upon a prima facia showing that a 
  3.18  question of fact exists as to the causation of the injury or 
  3.19  that a question of law is at issue. 
  3.20     Subd. 4.  [ITEMIZATION; FULL PAYMENT.] All arbitration 
  3.21  awards must be itemized.  A partial award of medical benefits 
  3.22  rendered by an arbitrator under this section and paid by an 
  3.23  obligor will be considered full and final payment, and the 
  3.24  injured party is not liable for, nor may the provider bill the 
  3.25  injured party for, charges that are not part of the award. 
  3.26     Subd. 5.  [APPEAL TO DISTRICT COURT.] All arbitration 
  3.27  awards may be appealed to district court on the basis of a 
  3.28  material mistake of fact or law according to the rules adopted 
  3.29  under section 484.76. 
  3.30     Sec. 2.  Minnesota Statutes 2002, section 65B.56, 
  3.31  subdivision 1, is amended to read: 
  3.32     Subdivision 1.  [MEDICAL EXAMINATIONS AND DISCOVERY OF 
  3.33  CONDITION OF CLAIMANT.] (a) Any person with respect to whose 
  3.34  injury benefits are claimed under a plan of reparation security 
  3.35  shall, upon request of the reparation obligor from whom recovery 
  3.36  is sought, submit to a physical examination by a physician or 
  4.1   physicians selected by the obligor as may reasonably be required.
  4.2      The costs of any examinations requested by the obligor 
  4.3   shall be borne entirely by the requesting obligor.  ~~Such~~ The 
  4.4   examinations shall be conducted within a reasonable distance not 
  4.5   to exceed 75 miles from the city, town, or statutory city of 
  4.6   residence, employment, or place of treatment of the injured 
  4.7   person.  If there is no qualified physician to conduct the 
  4.8   examination within the city, town, or statutory city of 
  4.9   residence, employment, or place of treatment of the injured 
  4.10  person, then ~~such~~ the examination shall be conducted at another 
  4.11  place of the closest proximity to the injured person's 
  4.12  residence, employment, or place of treatment. Obligors are 
  4.13  authorized to include reasonable provisions in policies for 
  4.14  mental and physical examination of those injured persons. 
  4.15     (b) If requested by the person examined, a party causing an 
  4.16  examination to be made shall deliver to the examinee a copy of 
  4.17  every written report concerning the examination rendered by an 
  4.18  examining physician to that person, at least one of which 
  4.19  reports must set out in detail the findings and conclusions of 
  4.20  ~~such~~ the examining physician. 
  4.21     (c) An injured person ~~shall also~~ must do all things 
  4.22  reasonably necessary to enable the obligor to obtain medical 
  4.23  reports and other needed information to assist in determining 
  4.24  the nature and extent of the injured person's injuries and loss, 
  4.25  and the medical treatment received.  If the claimant refuses to 
  4.26  cooperate in responding to requests for examination and 
  4.27  information as authorized by this section, evidence of ~~such~~ the 
  4.28  noncooperation ~~shall be~~ is admissible in any suit or arbitration 
  4.29  filed for damages for ~~such~~ the personal injuries or for the 
  4.30  benefits provided by sections 65B.41 to 65B.71. 
  4.31     (d) Except in cases of unforeseen or emergency events, if 
  4.32  an injured person fails to appear on time for an examination or 
  4.33  does not cancel the appointment at least 24 hours before the 
  4.34  scheduled date and time of the examination, the injured person 
  4.35  must pay a reasonable "no-show" fee.  The examining physician 
  4.36  must notify the requesting obligor that the claimant did not 
  5.1   appear for the examination and, if the injured person 
  5.2   rescheduled the examination, the new date of the examination.  
  5.3   If the injured person fails to reschedule the examination, fails 
  5.4   to cancel the rescheduled examination at least 24 hours in 
  5.5   advance, or fails to appear at the rescheduled examination, then 
  5.6   the examining physician may, at the option of the obligor, 
  5.7   conduct the examination based on records submitted by the 
  5.8   parties and render an opinion based solely on the records. 
  5.9      ~~The provisions of~~ This section ~~apply~~ applies before and 
  5.10  after the commencement of suit. 
  5.11     Sec. 3.  [EFFECTIVE DATE.] 
  5.12     Sections 1 and 2 are effective January 1, 2004, and apply 
  5.13  to policies issued or renewed on or after that date.