Worker's Compensation Advisory Council

Proposed Statutory and Regulatory Changes 2007-2008
Revised 2/1/07

Proposal # Section Topic Proposal Rationale Status
1. 102.16(2m)
(g)
 
Medical treatment guidelines Amend §102.16(2m)(g)as follows:
(g) The department shall promulgate rules establishing procedures and requirements for the necessity of treatment dispute resolution process under this subsection, including rules setting the fees under par. (f) and rules establishing standards for determining the necessity of treatment provided to an injured employee. The rules establishing those standards shall, to the greatest extent possible, be consistent with Minnesota rules 5221.6010 to 5221.8900, as amended to January 1, 2006. Before the department may amend the rules establishing those standards, the department shall establish an advisory committee under s. 227.13 composed of health care providers providing treatment under s. 102.42 to advise the department and the council on worker's compensation on amending those rules.


 
This amendment deletes reference to the Minnesota Rules. The reference to the Minnesota Rules in the original statute is no longer necessary.  
2. 102.29(1) Third Party proceeds Amend §102.29(1) as follows:
(1) The making of a claim for compensation against an employer or compensation insurer for the injury or death of an employee shall not affect the right of the employee, the employee's personal representative, or other person entitled to bring action, to make claim or maintain an action in tort against any other party for such injury or death, hereinafter referred to as a 3rd party; nor shall the making of a claim by any such person against a 3rd party for damages by reason of an injury to which ss. 102.03 to 102.64 102.66 are applicable, or the adjustment of any such claim, affect the right of the injured employee or the employee's dependents to recover compensation. The employer or compensation insurer who shall have paid or is obligated to pay a lawful claim under this chapter shall have the same right to make claim or maintain an action in tort against any other party for such injury or death. If the department pays or is obligated to pay a claim under ss. 102.81 (1) or 102.66, the department shall also have the right to maintain an action in tort against any other party for the employee's injury or death. However, each shall give to the other reasonable notice and opportunity to join in the making of such claim or the instituting of an action and to be represented by counsel. If a party entitled to notice cannot be found, the department shall become the agent of such party for the giving of a notice as required in this subsection and the notice, when given to the department, shall include an affidavit setting forth the facts, including the steps taken to locate such party. Each shall have an equal voice in the prosecution of said claim, and any disputes arising shall be passed upon by the court before whom the case is pending, and if no action is pending, then by a court of record or by the department. If notice is given as provided in this subsection, the liability of the tort-feasor shall be determined as to all parties having a right to make claim, and irrespective of whether or not all parties join in prosecuting such claim, the proceeds of such claim shall be divided as follows: After deducting the reasonable cost of collection, one-third of the remainder shall in any event be paid to the injured employee or the employee's personal representative or other person entitled to bring action. Out of the balance remaining, the employer, insurance carrier, or, if applicable, uninsured employers fund or work injury supplemental benefit fund shall be reimbursed for all payments made by it, or which it may be obligated to make in the future, under this chapter, except that it shall not be reimbursed for any payments made or to be made under s. 102.18 (1) (bp), 102.22, 102.35 (3), 102.57, or 102.60. Any balance remaining shall be paid to the employee or the employee's personal representative or other person entitled to bring action. If both the employee or the employee's personal representative or other person entitled to bring action, and the employer, compensation insurer, or department, join in the pressing of said claim and are represented by counsel, the attorney fees allowed as a part of the costs of collection shall be, unless otherwise agreed upon, divided between such attorneys as directed by the court or by the department. A settlement of any 3rd-party claim shall be void unless said settlement and the distribution of the proceeds thereof is approved by the court before whom the action is pending and if no action is pending, then by a court of record or by the department.
This amendment provides that the Work Injury Supplemental Benefit Fund shares in any third party settlement proceeds. Currently the WISBF is not reimbursed in a third party suit.  
3. 102.425
(3)(a)1
 
Pharmacy Fee Schedule

 

Amend §102.425 (3)(a)1 as follows:
1. The average wholesale price of the prescription drug as of the date on which the prescription drug is dispensed, as quoted in the American Druggist Blue Book, published by Hearst Corporation, Inc. or its successor, or in the Drug Topics Red Book, published by Medical Economics Company, Inc. or its successor, whichever is less.
 
This amendment deletes reference to the Blue Book, which is out of print.  
4. 102.425(3)
(r) and
(s)
 
Pharmacy fee disputes Create §102.425 (3)(r) and (s) as follows:
(r) The department has jurisdiction under this subsection to resolve a dispute between a pharmacist or practitioner and an insurer or self-insured employer over the application of reasonableness of the prescription drug charge for prescriptions provided to an injured employee who claims benefits under this chapter. The pharmacist or practitioner shall file a dispute with the department within 6 months of notice that the insurer or self-insured employer is denying full or partial payment for a prescription drug prescribed to treat the injured employee for the effects of the work injury. The department shall deny payment of a prescription drug charge that the department determines under this subsection is unreasonable. A pharmacist, practitioner, insurer or self-insured employer that are parties to a fee dispute under this subsection are bound by the department’s determination under this subsection on the reasonableness of the disputed fee, unless that determination is set aside or modified by the department under s. 102.18(3) or is set aside on judicial review under s.102.23.
(s) Within 30 days after a determination under this subsection, the department may set aside, reverse or modify the determination for any reason that the department considers sufficient. A pharmacist, practitioner, insurer or self-insured employer that is aggrieved by a determination of the department under this subsection may seek judicial review of that determination in the same manner that compensation claims are reviewed under s. 102.23.
 
These new subsections create a dispute resolution process for pharmacy fees disputes.  
5. 102.48(2) Partial Dependency Amend §102.48(2) as follows: (2) In all other cases the death benefit shall be such sum as the department shall determine to represent fairly and justly the aid to support which the dependent might reasonably have anticipated from the deceased employee but for the injury. To establish anticipation of support and dependency, it shall not be essential that the deceased employee made any contribution to support. The aggregate benefits in such case shall not exceed twice the average annual earnings of the deceased; or 4 times the contributions of the deceased to the support of such dependents during the year immediately preceding the deceased employee's death, whichever amount is the greater. In no event shall the aggregate benefits in such case exceed the amount which would accrue to a person solely and wholly dependent. Where there is more than one partial dependent the weekly benefit shall be apportioned according to their relative dependency. The term "support" as used in ss. 102.42 to 102.63 shall include contributions to the capital fund of the dependents, for their necessary comfort. Any person claiming partial dependency shall file with the department documentary evidence of financial support by the deceased employee. Such documentary evidence shall include bank statements, cancelled checks or other financial documentary evidence. This amendment requires any person claiming death benefits for partial dependency to produce documentary evidence of dependency, rather than submitting testimony only. The WCD has had several death benefit claims compromised by the Attorney General's Office with adult children. The injured worker needs to provide support of his injury, disability or continued treatment. Therefore someone claiming support by the deceased worker should also be required to produce some type of documentation of dependency or support.


 
 
6. 102.64(2) Attorney General shall represent the state Amend §102.64(2)as follows:
(2) Upon request of the department of administration, the attorney general shall appear on behalf of the state in proceedings upon claims for compensation against the state. The department of justice shall represent the interests of the state in proceedings under s. 102.49, 102.59, 102.60 or 102.66. The department of justice may compromise claims in such proceedings, but the compromises are subject to review by the department of workforce development. Costs incurred by the department of justice in prosecuting or defending any claim for payment into or out of the work injury supplemental benefit fund under s. 102.65, including expert witness and witness fees but not including attorney fees or attorney travel expenses for services performed under this subsection, shall be paid from the work injury supplemental benefit fund.
 
This amendment provides that the department of justice represents the WISBF for claims payments into the Fund for illegal employment of minors under §102.60.  
7. 102.65(3) Work Injury Supplemental Benefit Fund Balance Delete §102.65(3) as follows:
(3) If the balance in the fund on any June 30 exceeds 3 times the amount paid out of such fund during the fiscal year ending on such date, the department shall, by order, direct an appropriate proportional reduction of the payments into such fund under ss. 102.47, 102.49 and 102.59 so that the balance in the fund will remain at 3 times the payments made in the preceding fiscal year.
Effective April 1, 2006, §102.65(1) was amended to provide that the WISBF was a nonlapsible fund, and restricted use of the money for Fund benefit payments. The current language in §102.65(3) is no longer necessary.  
8. 102.80(3)
(ag)
 
Uninsured Employers Fund Amend §102.80(3)(ag) as follows:
(ag) The secretary shall monitor the cash balance in, and incurred losses to, the uninsured employers fund using generally accepted actuarial principles. If the secretary determines that the expected ultimate losses to the uninsured employers fund on known claims and on incurred, but not reported, claims exceed 85% of the cash balance in the uninsured employers fund, the secretary shall consult with the council on worker's compensation. If the secretary, after consulting with the council on worker's compensation, determines that there is a reasonable likelihood that the cash balance in the uninsured employers fund may become inadequate to fund all claims under s. 102.81 (1), the secretary shall file with the secretary of administration a certificate attesting that the cash balance in the uninsured employer's fund is likely to become inadequate to fund all claims under s. 102.81 (1) and specifying a date after which no new claims under s. 102.81 (1) will be paid.
 
This amendment eliminates the requirement to consider incurred but not reported claims. By statute, if the Fund balance becomes 85% encumbered there is no legal liability to accept new claims (those that are incurred but not reported).