443 Lafayette Road N.

(651) 284-5005
St. Paul, Minnesota 55155 1-800-DIAL-DLI
www.doli.state.mn.us TTY: (651) 297-4198

Workers' Compensation Insurers' Task Force

Sept. 20, 2006

Members present Members absent

Dave Clark for Dennis Ballinger; Western Mary Abraham; Westfield Group
National Ken Gildow; RTW
Kathy Berg; Liberty Mutual Robert Johnson; Insurance Federation
Charles Bierman; Mayo Clinic Nancy Ross; City of Minneapolis
Deb Dolsky for Jodie Connor; Wausau Laurie Simonson; St. Paul Travelers
Karen Clayton Ebert; MN Counties Insurance
Trust Staff members
Robert Farber; Berkley Risk
Connie Brown for Meg Kasting; State Fund Kate Berger
Mutual Debbie Caswell
Claire McCoy; GAB Robins Penny Grev
Cindy Weingart for Dave Oertli; Sedgwick Marion Halverson
Rob Rangel; Broadspire Ralph Hapness
Cindy Van Eyll; General Casualty Steve Masters
Gary Westman; MN DOER Phil Moosbrugger
Patricia Todd

The meeting was called to order at 9:09 a.m. by co-chairperson Rob Rangel.
Task-force members and Department of Labor and Industry (DLI) staff members
introduced themselves. Three new members were welcomed. Charles Bierman replaced
Curt Pronk, representing Mayo; Karen Clayton Ebert was added, representing the
Minnesota Counties Trust; and Ken Gildow, from RTW, replaced Mike Johns. Gary
Westman volunteered to co-chair the task-force meetings.

The agenda was approved as presented.

5) Updates

Patricia Todd announced Tom Joachim was appointed as the new assistant
commissioner of the department's Safety Codes and Services Division, which was
formerly known as Workplace Services. Carol Pankow heads up the Claims Services and
Investigations unit, which was formerly known as the Special Compensation Fund.
Pankow has worked in both the public and private sectors and has experience in change
management. Marion Halvorson was introduced. She works on the department's Benefit
Management and Resolution unit's denial project to resolve issues.

Todd reported about the recent Rehabilitation Review Panel (RRP) and the
Medical Services Review Board (MSRB) meetings. The minutes are online at
www.doli.state.mn.us/boards.html if anyone is interested in reviewing them. The MSRB
is evaluating definitions of pharmaceuticals and making recommendations regarding
medical treatments. The Workers' Compensation Advisory Council (WCAC) met in June
Workers' Compensation Insurers' Task Force -2- September 20, 2006

and decided to have meetings throughout the state to receive input from stakeholders
about areas that could be improved within the workers' compensation system. The
meetings were in Brainerd, Mankato and St. Paul. There were some good ideas and
suggestions; they will be reviewed Oct. 11, 2006, at a special meeting of the WCAC.

Todd noted letters were sent regarding the department's "pay for performance"
program. DLI is looking for input from stakeholders regarding how it could implement a
system to pay additional dollars to providers that facilitate returning injured workers to
work as soon as possible, as well as provide quality treatment. This is in line with
Governor Pawlenty’s "QCare" initiative in the general health system. They are looking at
implementing those concepts into the workers' compensation system.

6) Brainstorming

The common topics listed on page 4 of the May 17, 2006, minutes were discussed
to determine which subjects interest the group and were prioritized for discussion at
future meetings.

1) The trend to close out medicals at the time of settlement and Medicare set-
asides were combined into one topic.

Closing out medicals

• Find out what other states are doing, to have an informed conversation.
Cindy Wiengart from Sedgwick said they work with other states and she
will check with them for some feedback.
• Rob Rangel said they also do structured settlements.

Medicare set-asides

• Cindy Van Eyll said General Casualty does some Medicare set-asides. They
handle multiple states and some allow them to do a medical pool when they
close out, where the employee is paid a chunk of money and they have to
exhaust it before coming back to General Casualty. In some states they are
able to close the claim and set up a trust that is administered somewhere
else, so the person is taken care of in the future.
• Charlie Bierman commented that the Medicare set-aside process takes a
long time to get back to you, sometimes six months to even find out if one is
needed. Medicare recently issued a memo indicating if a settlement is below
a certain figure, which was $10,000 and may be up to $20,000 now, they do
not exonerate you but indicated they do not "mess around" with those.
Minnesota is still learning how to deal with the Medicare set-aside cases.
Some employers may not realize the potential risk that Medicare may find
out later and they could back later to get a recovery and hold the
employer/insurer responsible.
Workers' Compensation Insurers' Task Force -3- September 20, 2006

• Rangel suggested inviting someone who can speak about what Medicare set-
asides are, the rules and the latest trends, and answer questions. The group
approved this suggestion.
• Robert Farber asked for a historical perspective about why Minnesota is
reluctant to close out future medicals and find out what other states have
done. Rangel asked if Berger and/or the CSI attorneys could come to a
meeting to share information about what they are seeing and trends. Todd
agreed to identify someone to provide that information.
• Kathy Berg, from Liberty Mutual, suggested asking an association to speak
about closing medical that are involved with the different states. They are
involved with PCI and she will ask them for suggestions and call Todd or
Deb Caswell.

Medication management

• Weingart said Bob Lund, from State Fund Mutual, gave an excellent
presentation for the Minnesota Self Insurers Association about
prescription costs and ways to cut them, at a recent seminar. He noted the
cost for arthroscopic surgery ranged from $6,000 to $11,000, depending
on where it was done. There should be a middle ground for the cost for the
same procedures. Members agreed to ask Lund to do his presentation at
the task-force meeting. Lund also had a chart that showed the costs are
different with workers' compensation, Medicare and general insurance for
the same product. The Medical Costs Task-force link, to review the
recommendations before the next meeting, is
www.doli.state.mn.us/medcost.html.
• Bierman noted we have not been successful in getting judges to follow the
treatment parameters and more companies are trying to pay the prevailing
charge instead of 85 percent of the usual and customary charge. He
anticipates a lot of medical requests will be sent to DLI. A company called
Q Metrix is using this strategy. It says the database is proprietary and it
will not share it. Under the rules, it is going to have to share the database.

3) Illegal immigrants

• Have an open discussion about the challenges facing insurers and how
others dealt with issues related to that type of claim. Issues mentioned
included not being able to return to work because they are illegal, how to
terminate temporary total disability after they are on it and costs for QRCs
for services for illegal immigrants that, by rule, they cannot provide.
• Bierman said Candy Heckner had a big case and she might be willing to
come in to talk.
• Bierman asked for a case law update about illegal immigrants. Berger said
there are a couple of cases regarding illegal immigrants that have gone to
the courts; that information would be brought to a future meeting.
Workers' Compensation Insurers' Task Force -4- September 20, 2006

4) Catastrophic injuries

• Rangel suggested the committee has the Workers' Compensation

Reinsurance Association's (WCRA) catastrophic nurse, Nancy
Hawkins, R.N., speak to the group from WCRA's perspective about what
it sees and how it can help the committee in the future. Members approved
the suggestion.

7) Penalty subcommittee

Meg Kasting, Robert Farber and Rob Rangel, along with Steve Masters from the
Department of Labor and Industry, met after the meeting. Anyone was welcome to join
them

There was no new business or future agenda items.

The meeting was adjourned at 10 a.m.

Respectfully submitted,

Debbie Caswell
Executive Secretary

dc/s