1.1 	A bill for an act
1.2 	relating to commerce; reforming the Minnesota No-Fault
1.3 	Automobile Insurance Act; tying medical expense
1.4 	benefits to the workers' compensation fee schedule
1.5 	with adjustments; increasing income loss and funeral
1.6 	benefits; modifying the tort threshold; modifying the
1.7 	arbitration process; amending Minnesota Statutes 2004,
1.8 	sections 65B.44, subdivisions 1, 2, 3, 4; 65B.51,
1.9 	subdivision 3; 65B.525, subdivision 1, by adding
1.10 	subdivisions.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2004, section 65B.44,
1.13 	subdivision 1, is amended to read:
1.14 		Subdivision 1.Inclusions.  (a) Basic economic loss
1.15 	benefits shall provide reimbursement for all loss suffered
1.16 	through injury arising out of the maintenance or use of a motor
1.17 	vehicle, subject to any applicable deductibles, exclusions,
1.18 	disqualifications, and other conditions, and shall provide a
1.19 	minimum of $40,000 for loss arising out of the injury of any one
1.20 	person, consisting of:
1.21 	(1) $20,000 for medical expense loss arising out of injury
1.22 	to any one person; and
1.23 	(2) a total of $20,000 for income loss, replacement
1.24 	services loss, funeral expense loss, survivor's economic loss,
1.25 	and survivor's replacement services loss arising out of the
1.26 	injury to any one person.
1.27 	(b) Notwithstanding any other law to the contrary, a person
1.28 	entitled to basic economic loss benefits under this chapter is
2.1 	entitled to the full medical expense benefits set forth in
2.2 	subdivision 2, and may not receive medical expense benefits that
2.3 	are in any way less than those provided for in subdivision 2, or
2.4 	that involve any preestablished limitations on the benefits.
2.5 	Medical expenses must be reasonable and must be for necessary
2.6 	medical care as provided in subdivision 2.  This paragraph shall
2.7 	not be deemed to alter the obligations of an insured or the
2.8 	rights of a reparation obligor as set forth in section 65B.56.
2.9 	(c) No reparation obligor or health plan company as defined
2.10 	in section 62Q.01, subdivision 4, may enter into or renew any
2.11 	contract that provides, or has the effect of providing, managed
2.12 	care services to no-fault claimants.  For the purposes of this
2.13 	section, "managed care services" is defined as any program of
2.14 	medical services that uses health care providers managed, owned,
2.15 	employed by, or under contract with a health plan company.

2.16 	Sec. 2. Minnesota Statutes 2004, section 65B.44,
2.17 	subdivision 2, is amended to read:
2.18 		Subd. 2.Medical expense benefits.  (a) Medical expense
2.19 	benefits shall reimburse all reasonable expenses pursuant to
2.20 	paragraph (f) for necessary:
2.21 	(1) medical, surgical, x-ray, optical, dental,
2.22 	chiropractic, and rehabilitative services, including prosthetic
2.23 	devices;
2.24 	(2) prescription drugs;
2.25 	(3) ambulance and all other transportation expenses
2.26 	incurred in traveling to receive other covered medical expense
2.27 	benefits;
2.28 	(4) sign interpreting and language translation services,
2.29 	other than such services provided by a family member of the
2.30 	patient, related to the receipt of medical, surgical, x-ray,
2.31 	optical, dental, chiropractic, hospital, extended care, nursing,
2.32 	and rehabilitative services; and
2.33 	(5) hospital, extended care, and nursing services.
2.34 	(b) Hospital room and board benefits may be limited, except
2.35 	for intensive care facilities, to the regular daily semiprivate
2.36 	room rates customarily charged by the institution in which the
3.1 	recipient of benefits is confined.
3.2 	(c) Such benefits shall also include necessary remedial
3.3 	treatment and services recognized and permitted under the laws
3.4 	of this state for an injured person who relies upon spiritual
3.5 	means through prayer alone for healing in accordance with that
3.6 	person's religious beliefs.
3.7 	(d) Medical expense loss includes medical expenses accrued
3.8 	prior to the death of a person notwithstanding the fact that
3.9 	benefits are paid or payable to the decedent's survivors.
3.10 	(e) Medical expense benefits for rehabilitative services
3.11 	shall be subject to the provisions of section 65B.45.
3.12 	(f) Medical expense loss for diagnosis and treatment of
3.13 	injury is covered only if provided in compliance with the codes,
3.14 	treatment standards, and fee schedules provided in Minnesota
3.15 	Rules, chapter 5221, except that payment rates for physical
3.16 	medicine and rehabilitation procedure codes as defined in
3.17 	Minnesota Rules, part 5221.4050, and chiropractic procedure
3.18 	codes as defined in Minnesota Rules, part 5221.4060, must be
3.19 	adjusted to eliminate application of scaling factors.

3.20 	Sec. 3. Minnesota Statutes 2004, section 65B.44,
3.21 	subdivision 3, is amended to read:
3.22 		Subd. 3.Disability and income loss benefits.  Disability
3.23 	and income loss benefits shall provide compensation for 85
3.24 	percent of the injured person's loss of present and future gross
3.25 	income from inability to work proximately caused by the nonfatal
3.26 	injury subject to a maximum of $250 $400 per week.  Loss of
3.27 	income includes the costs incurred by a self-employed person to
3.28 	hire substitute employees to perform tasks which are necessary
3.29 	to maintain the income of the injured person, which are normally
3.30 	performed by the injured person, and which cannot be performed
3.31 	because of the injury.
3.32 	If the injured person is unemployed at the time of injury
3.33 	and is receiving or is eligible to receive unemployment benefits
3.34 	under chapter 268, but the injured person loses eligibility for
3.35 	those benefits because of inability to work caused by the
3.36 	injury, disability and income loss benefits shall provide
4.1 	compensation for the lost benefits in an amount equal to the
4.2 	unemployment benefits which otherwise would have been payable,
4.3 	subject to a maximum of $250 $400 per week.
4.4 	Compensation under this subdivision shall be reduced by any
4.5 	income from substitute work actually performed by the injured
4.6 	person or by income the injured person would have earned in
4.7 	available appropriate substitute work which the injured person
4.8 	was capable of performing but unreasonably failed to undertake.
4.9 	For the purposes of this section "inability to work" means
4.10 	disability which prevents the injured person from engaging in
4.11 	any substantial gainful occupation or employment on a regular
4.12 	basis, for wage or profit, for which the injured person is or
4.13 	may by training become reasonably qualified.  If the injured
4.14 	person returns to employment and is unable by reason of the
4.15 	injury to work continuously, compensation for lost income shall
4.16 	be reduced by the income received while the injured person is
4.17 	actually able to work.  The weekly maximums may not be prorated
4.18 	to arrive at a daily maximum, even if the injured person does
4.19 	not incur loss of income for a full week.
4.20 	For the purposes of this section, an injured person who is
4.21 	"unable by reason of the injury to work continuously" includes,
4.22 	but is not limited to, a person who misses time from work,
4.23 	including reasonable travel time, and loses income, vacation, or
4.24 	sick leave benefits, to obtain medical treatment for an injury
4.25 	arising out of the maintenance or use of a motor vehicle.

4.26 	Sec. 4. Minnesota Statutes 2004, section 65B.44,
4.27 	subdivision 4, is amended to read:
4.28 		Subd. 4.Funeral and burial expenses.  Funeral and burial
4.29 	benefits shall be reasonable expenses not in excess of
4.30 	$2,000 $5,000, including expenses for cremation or delivery
4.31 	under the Uniform Anatomical Gift Act (1987), sections 525.921
4.32 	to 525.9224.

4.33 	Sec. 5. Minnesota Statutes 2004, section 65B.51,
4.34 	subdivision 3, is amended to read:
4.35 		Subd. 3.Limitation of damages for noneconomic
4.36 	detriment.  In an action described in subdivision 1, no person
5.1 	shall recover damages for noneconomic detriment unless:
5.2 	(a) The sum of the following exceeds $4,000:
5.3 	(1) reasonable medical expense benefits paid, payable or
5.4 	payable but for any applicable deductible, plus 
5.5 	(2) the value of free medical or surgical care or ordinary
5.6 	and necessary nursing services performed by a relative of the
5.7 	injured person or a member of the injured person's household,
5.8 	plus 
5.9 	(3) the amount by which the value of reimbursable medical
5.10 	services or products exceeds the amount of benefit paid,
5.11 	payable, or payable but for an applicable deductible for those
5.12 	services or products if the injured person was charged less than
5.13 	the average reasonable amount charged in this state for similar
5.14 	services or products, minus 
5.15 	(4) the amount of medical expense benefits paid, payable,
5.16 	or payable but for an applicable deductible for diagnostic
5.17 	X-rays and for a procedure or treatment for rehabilitation and
5.18 	not for remedial purposes or a course of rehabilitative
5.19 	occupational training; or 
5.20 	(b) the injury results in:
5.21 	(1) permanent disfigurement serious permanent impairment of
5.22 	an important bodily function; or 
5.23 	(2) permanent injury;
5.24 	(3) death; or 
5.25 	(4) disability for 60 days or more.
5.26 	(c) For the purposes of clause (a) evidence of the
5.27 	reasonable value of medical services and products shall be
5.28 	admissible in any action brought in this state.
5.29 	For the purposes of this subdivision disability means the
5.30 	inability to engage in substantially all of the injured person's
5.31 	usual and customary daily activities.

5.32 	Sec. 6. Minnesota Statutes 2004, section 65B.525,
5.33 	subdivision 1, is amended to read:
5.34 		Subdivision 1.Mandatory submission to binding
5.35 	arbitration.  Except as otherwise provided in section 72A.327,
5.36 	the Supreme Court and the several courts of general trial
6.1 	jurisdiction of this state shall by rules of court or other
6.2 	constitutionally allowable device, provide for the mandatory
6.3 	submission to binding arbitration at the request of either party 
6.4 	of all cases at issue where the claim at the commencement of
6.5 	arbitration time of hearing is in an the total amount of $10,000
6.6 	or less against any insured's reparation obligor for no-fault
6.7 	benefits or comprehensive or collision damage coverage.

6.8 	Sec. 7. Minnesota Statutes 2004, section 65B.525, is
6.9 	amended by adding a subdivision to read:
6.10 		Subd. 3.Itemization; full payment. All arbitration
6.11 	awards must be itemized.  A partial award of medical benefits
6.12 	rendered by an arbitrator under this section and paid by an
6.13 	obligor will be considered full and final payment, and the
6.14 	injured party is not liable for, nor may the provider bill the
6.15 	injured party for, charges that are not part of the award.  This
6.16 	subdivision does not apply to charges for health care that are
6.17 	not related to the accident.

6.18 	Sec. 8. Minnesota Statutes 2004, section 65B.525, is
6.19 	amended by adding a subdivision to read:
6.20 		Subd. 4.Notice to providers. The itemization of medical
6.21 	services claims required under the rules promulgated by the
6.22 	Supreme Court must include the names and addresses of all health
6.23 	care providers whose charges are the subject of the claims.
6.24 	Within ten business days after receipt of the itemization, the
6.25 	administrator of arbitration under this section must send a copy
6.26 	of the petition and itemization to each health care provider
6.27 	whose charges are the subject of claims, together with a notice
6.28 	of the content of subdivision 3 and of the provider's right to
6.29 	participate as a party to the proceeding.  The notice must
6.30 	explain to the provider what steps the provider must take in
6.31 	order to participate.

6.32 	Sec. 9. EFFECTIVE DATES.
 6.33 	(a) Sections 1 and 2 are effective January 1, 2006, and
6.34 	apply to medical expenses incurred on or after that date.
6.35 	(b) Sections 3 to 8 are effective January 1, 2006, and
6.36 	apply to coverage issued or renewed on or after that date.