1.1 	A bill for an act
1.2 	relating to workers' compensation; modifying compensation, retraining, and fee 
1.3 	provisions; establishing an advisory commission; requiring a report; requiring 
1.4 	rulemaking;amending Minnesota Statutes 2006, sections 176.101, subdivision 1; 
1.5 	176.102, subdivision 11; 176.136, subdivision 1a.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2006, section 176.101, subdivision 1, is amended to read:
1.8 		Subdivision 1.Temporary total disability. (a) For injury producing temporary total 
1.9 	disability, the compensation is 66-2/3 percent of the weekly wage at the time of injury.
1.10 	(b)(1)  Commencing on October 1, ~~2000~~ 2007, the maximum weekly compensation 
1.11 	payable is ~~$750~~$850 per week.
1.12 	(2) The Workers' Compensation Advisory Council may consider adjustment 
1.13 	increases and make recommendations to the legislature.
1.14 	(c) The minimum weekly compensation payable is $130 per week or the injured 
1.15 	employee's actual weekly wage, whichever is less.
1.16 	(d) Temporary total compensation shall be paid during the period of disability 
1.17 	subject to the cessation and recommencement conditions in paragraphs (e) to (l).
1.18 	(e) Temporary total disability compensation shall cease when the employee returns 
1.19 	to work. Except as otherwise provided in section  176.102, subdivision 11, temporary 
1.20 	total disability compensation may only be recommenced following cessation under this 
1.21 	paragraph, paragraph (h), or paragraph (j) prior to payment of ~~104~~130 weeks of temporary 
1.22 	total disability compensation and only as follows: 
1.23 	(1) if temporary total disability compensation ceased because the employee returned 
1.24 	to work, it may be recommenced if the employee is laid off or terminated for reasons other 
1.25 	than misconduct if the layoff or termination occurs prior to 90 days after the employee 
2.1 	has reached maximum medical improvement. Recommenced temporary total disability 
2.2 	compensation under this clause ceases when any of the cessation events in paragraphs 
2.3 	(e) to (l) occurs; or
2.4 	(2) if temporary total disability compensation ceased because the employee returned 
2.5 	to work or ceased under paragraph (h) or (j), it may be recommenced if the employee is 
2.6 	medically unable to continue at a job due to the injury. Where the employee is medically 
2.7 	unable to continue working due to the injury, temporary total disability compensation 
2.8 	may continue until any of the cessation events in paragraphs (e) to (l) occurs following 
2.9 	recommencement. If an employee who has not yet received temporary total disability 
2.10 	compensation becomes medically unable to continue working due to the injury after 
2.11 	reaching maximum medical improvement, temporary total disability compensation shall 
2.12 	commence and shall continue until any of the events in paragraphs (e) to (l) occurs 
2.13 	following commencement. For purposes of commencement or recommencement under 
2.14 	this clause only, a new period of maximum medical improvement under paragraph 
2.15 	(j) begins when the employee becomes medically unable to continue working due to 
2.16 	the injury. Temporary total disability compensation may not be recommenced under 
2.17 	this clause and a new period of maximum medical improvement does not begin if the 
2.18 	employee is not actively employed when the employee becomes medically unable to 
2.19 	work. All periods of initial and recommenced temporary total disability compensation are 
2.20 	included in the ~~104-week~~130-week limitation specified in paragraph (k).
2.21 	(f)  Temporary total disability compensation shall cease if the employee withdraws 
2.22 	from the labor market. Temporary total disability compensation may be recommenced 
2.23 	following cessation under this paragraph only if the employee reenters the labor market 
2.24 	prior to 90 days after the employee reached maximum medical improvement and 
2.25 	prior to payment of ~~104~~130 weeks of temporary total disability compensation. Once 
2.26 	recommenced, temporary total disability ceases when any of the cessation events in 
2.27 	paragraphs (e) to (l) occurs.
2.28 	(g) Temporary total disability compensation shall cease if the total disability ends 
2.29 	and the employee fails to diligently search for appropriate work within the employee's 
2.30 	physical restrictions. Temporary total disability compensation may be recommenced 
2.31 	following cessation under this paragraph only if the employee begins diligently searching 
2.32 	for appropriate work within the employee's physical restrictions prior to 90 days after 
2.33 	maximum medical improvement and prior to payment of ~~104~~130 weeks of temporary total 
2.34 	disability compensation. Once recommenced, temporary total disability compensation 
2.35 	ceases when any of the cessation events in paragraphs (e) to (l) occurs.
3.1 	(h) Temporary total disability compensation shall cease if the employee has been 
3.2 	released to work without any physical restrictions caused by the work injury.
3.3 	(i) Temporary total disability compensation shall cease if the employee refuses an 
3.4 	offer of work that is consistent with a plan of rehabilitation filed with the commissioner 
3.5 	which meets the requirements of section  176.102, subdivision 4, or, if no plan has been 
3.6 	filed, the employee refuses an offer of gainful employment that the employee can do in the 
3.7 	employee's physical condition. Once temporary total disability compensation has ceased 
3.8 	under this paragraph, it may not be recommenced. 
3.9 	(j) Temporary total disability compensation shall cease 90 days after the employee 
3.10 	has reached maximum medical improvement, except as provided in section  176.102, 
3.11 	subdivision 11, paragraph (b). For purposes of this subdivision, the 90-day period after 
3.12 	maximum medical improvement commences on the earlier of: (1) the date that the 
3.13 	employee receives a written medical report indicating that the employee has reached 
3.14 	maximum medical improvement; or (2) the date that the employer or insurer serves the 
3.15 	report on the employee and the employee's attorney, if any. Once temporary total disability 
3.16 	compensation has ceased under this paragraph, it may not be recommenced except if the 
3.17 	employee returns to work and is subsequently medically unable to continue working 
3.18 	as provided in paragraph (e), clause (2). 
3.19 	(k) Temporary total disability compensation shall cease entirely when ~~104~~130 weeks 
3.20 	of temporary total disability compensation have been paid, except as provided in section  
3.21 	176.102, subdivision 11, paragraph (b). Notwithstanding anything in this section to the 
3.22 	contrary, initial and recommenced temporary total disability compensation combined shall 
3.23 	not be paid for more than ~~104~~130 weeks, regardless of the number of weeks that have 
3.24 	elapsed since the injury, except that if the employee is in a retraining plan approved under 
3.25 	section  176.102, subdivision 11, the ~~104 week~~130-week limitation shall not apply during 
3.26 	the retraining, but is subject to the limitation before the plan begins and after the plan ends. 
3.27 	(l) Paragraphs (e) to (k) do not limit other grounds under law to suspend or 
3.28 	discontinue temporary total disability compensation provided under this chapter.
3.29 	(m) Once an employee has been paid 52 weeks of temporary total compensation, 
3.30 	the employer or insurer must notify the employee in writing of the ~~104-week~~130-week 
3.31 	limitation on payment of temporary total compensation. A copy of this notice must also 
3.32 	be filed with the department.

3.33 	Sec. 2. Minnesota Statutes 2006, section 176.102, subdivision 11, is amended to read:
3.34 		Subd. 11.Retraining; compensation. (a) Retraining is limited to 156 weeks. 
3.35 	An employee who has been approved for retraining may petition the commissioner 
4.1 	or compensation judge for additional compensation not to exceed 25 percent of the 
4.2 	compensation otherwise payable. If the commissioner or compensation judge determines 
4.3 	that this additional compensation is warranted due to unusual or unique circumstances of 
4.4 	the employee's retraining plan, the commissioner may award additional compensation in 
4.5 	an amount not to exceed the employee's request. This additional compensation shall cease 
4.6 	at any time the commissioner or compensation judge determines the special circumstances 
4.7 	are no longer present.
4.8 	(b) If the employee is not employed during a retraining plan that has been 
4.9 	specifically approved under this section, temporary total compensation is payable for up 
4.10 	to 90 days after the end of the retraining plan; except that, payment during the 90-day 
4.11 	period is subject to cessation in accordance with section 176.101. If the employee is 
4.12 	employed during the retraining plan but earning less than at the time of injury, temporary 
4.13 	partial compensation is payable at the rate of 66-2/3 percent of the difference between 
4.14 	the employee's weekly wage at the time of injury and the weekly wage the employee is 
4.15 	able to earn in the employee's partially disabled condition, subject to the maximum rate 
4.16 	for temporary total compensation. Temporary partial compensation is not subject to the 
4.17 	225-week or 450-week limitations provided by section 176.101, subdivision 2, during the 
4.18 	retraining plan, but is subject to those limitations before and after the plan. 
4.19 	(c) Any request for retraining shall be filed with the commissioner before ~~156~~208 
4.20 	weeks of any combination of temporary total or temporary partial compensation have 
4.21 	been paid. Retraining shall not be available after ~~156~~208 weeks of any combination of 
4.22 	temporary total or temporary partial compensation benefits have been paid unless the 
4.23 	request for the retraining has been filed with the commissioner prior to the time the ~~156~~
4.24 	208 weeks of compensation have been paid.
4.25 	(d) The employer or insurer must notify the employee in writing of the ~~156-week~~
4.26 	208-week limitation for filing a request for retraining with the commissioner. This notice 
4.27 	must be given before 80 weeks of temporary total disability or temporary partial disability 
4.28 	compensation have been paid, regardless of the number of weeks that have elapsed since 
4.29 	the date of injury. If the notice is not given before the 80 weeks, the period of time within 
4.30 	which to file a request for retraining is extended by the number of days the notice is late, 
4.31 	but in no event may a request be filed later than 225 weeks after any combination of 
4.32 	temporary total disability or temporary partial disability compensation have been paid. The 
4.33 	commissioner may assess a penalty of $25 per day that the notice is late, up to a maximum 
4.34 	penalty of $2,000, against an employer or insurer for failure to provide the notice. The 
4.35 	penalty is payable to the commissioner for deposit in the assigned risk safety account.

5.1 	Sec. 3. Minnesota Statutes 2006, section 176.136, subdivision 1a, is amended to read:
5.2 		Subd. 1a.Relative value fee schedule. (a) The liability of an employer for services 
5.3 	included in the medical fee schedule is limited to the maximum fee allowed by the 
5.4 	schedule in effect on the date of the medical service, or the provider's actual fee, whichever 
5.5 	is lower. ~~The medical fee schedule effective on October 1, 1991, remains in effect until~~ 
5.6 	~~the commissioner adopts a new schedule by permanent rule.~~ The commissioner shall 
5.7 	adopt permanent rules regulating fees allowable for medical, chiropractic, podiatric, 
5.8 	surgical, and other health care provider treatment or service, including those provided 
5.9 	to hospital outpatients, by implementing a relative value fee schedule ~~to be effective~~ 
5.10 	~~on October 1, 1993~~. The commissioner may adopt by reference, according to the 
5.11 	procedures in paragraph (h), clause (2), the relative value fee schedule tables adopted for 
5.12 	the federal Medicare program ~~or a relative value fee schedule adopted by other federal~~ 
5.13 	~~or state agencies~~. The relative value fee schedule must contain reasonable classifications 
5.14 	including, but not limited to, classifications that differentiate among health care provider 
5.15 	disciplines. The conversion factors for the original relative value fee schedule must 
5.16 	reasonably reflect a 15 percent overall reduction from the medical fee schedule most 
5.17 	recently in effect. The reduction need not be applied equally to all treatment or services, 
5.18 	but must represent a gross 15 percent reduction.
5.19 	(b) Effective October 1, 2005, the commissioner shall remove all scaling factors 
5.20 	from the relative value units and establish four separate conversion factors according to 
5.21 	paragraphs (c) and (d) for each of the following parts of Minnesota Rules:
5.22 	(1) Medical/surgical services in Minnesota Rules, part 5221.4030, as defined in part 
5.23 	5221.0700, subpart 3, item C, subitem (2);
5.24 	(2) Pathology and laboratory services in Minnesota Rules, part 5221.4040, as 
5.25 	defined in part 5221.0700, subpart 3, item C, subitem (3);
5.26 	(3) Physical medicine and rehabilitation services in Minnesota Rules, part 
5.27 	5221.4050, as defined in part 5221.0700, subpart 3, item C, subitem (4); and
5.28 	(4) Chiropractic services in Minnesota Rules, part 5221.4060, as defined in part 
5.29 	5221.0700, subpart 3, item C, subitem (5).
5.30 	(c) The four conversion factors established under paragraph (b) shall be calculated 
5.31 	so that there is no change in each maximum fee for each service under the current fee 
5.32 	schedule, except as provided in paragraphs (d) and (e).
5.33 	(d) By October 1, 2006, the conversion factor for chiropractic services described in 
5.34 	paragraph (b), clause (4), shall be increased to equal 72 percent of the conversion factor 
5.35 	for medical/surgical services described in paragraph (b), clause (1). Beginning October 1, 
6.1 	2005, the increase in chiropractic conversion factor shall be phased in over two years by 
6.2 	approximately equal percentage point increases.
6.3 	(e) When adjusting the conversion factors in accordance with paragraph (g) on 
6.4 	October 1, 2005, and October 1, 2006, the commissioner may adjust by no less than zero, 
6.5 	all of the conversion factors as necessary to offset any overall increase in payments under 
6.6 	the fee schedule resulting from the increase in the chiropractic conversion factor.
6.7 	(f) The commissioner shall give notice of the relative value units and conversion 
6.8 	factors established under paragraphs (b), (c), and (d) according to the procedures in 
6.9 	section 14.386, paragraph (a). The relative value units and conversion factors established 
6.10 	under paragraphs (b), (c), and (d) are not subject to expiration under section 14.386, 
6.11 	paragraph (b).
6.12 	(g) The conversion factors shall be adjusted as follows:
6.13 	(1) After permanent rules have been adopted to implement this section, the 
6.14 	conversion factors must be adjusted annually on October 1 by no more than the percentage 
6.15 	change computed under section 176.645, but without the annual cap provided by that 
6.16 	section. 
6.17 	(2) Each time the workers' compensation relative value fee schedule tables are 
6.18 	updated under paragraph (h), the commissioner shall adjust the conversion factors so that, 
6.19 	for services in both fee schedules, there is no difference between the overall payment in 
6.20 	each category of service listed in paragraph (b) under the new schedule and the overall 
6.21 	payment for that category under the workers' compensation fee schedule most recently 
6.22 	in effect. This adjustment shall be made before making any additional adjustment under 
6.23 	clause (1).
6.24 	(h) The commissioner shall give notice of the adjusted conversion factors and 
6.25 	updates to the relative value fee schedule as follows:
6.26 	(1) The commissioner shall annually give notice in the State Register of the adjusted 
6.27 	conversion factors ~~and may also give annual notice of any additions, deletions, or changes~~ 
6.28 	~~to the relative value units or service codes adopted by the federal Medicare program. The~~ 
6.29 	~~relative value units may be statistically adjusted in the same manner as for the original~~ 
6.30 	~~workers' compensation relative value fee schedule~~ and any amendments to rules to 
6.31 	implement Medicare relative value tables incorporated by reference under this subdivision. 
6.32 	The notices of the adjusted conversion factors ~~and additions, deletions, or changes to the~~ 
6.33 	~~relative value units and service codes is in lieu of the requirements of chapter 14. The~~ 
6.34 	~~commissioner shall follow the~~and amended rules to implement the relative value tables are 
6.35 	subject to the requirements of section 14.386, paragraph (a). The annual adjustments to the 
7.1 	conversion factors and the medical fee schedules adopted under this section, including all 
7.2 	previous fee schedules, are not subject to expiration under section 14.386, paragraph (b).
7.3 	(2) The commissioner may periodically update the workers' compensation relative 
7.4 	value tables by incorporating by reference the relative value tables in the national 
7.5 	physician fee schedule relative value file established by the Centers for Medicare and 
7.6 	Medicaid Services. The commissioner shall publish the notices of the incorporation by 
7.7 	reference in the State Register at least 60 days before the tables are to become effective for 
7.8 	purposes of payment under this section. Each notice of incorporation must state the date 
7.9 	the incorporated tables will become effective and must include information on how the 
7.10 	Medicare relative value tables may be obtained. The published notices of incorporation 
7.11 	by reference and the incorporated tables are not rules subject to section 14.386 or other 
7.12 	provision of chapter 14, but have the force and effect of law as of the date specified in 
7.13 	the notices.

7.14 	Sec. 4. PAY-FOR-PERFORMANCE ADVISORY GROUP.
 7.15 		Subdivision 1.Advisory group. The pay-for-performance advisory group is 
7.16 	established to study and make recommendations regarding best practice standards and 
7.17 	pay-for-performance standards for medical care that are designed to achieve cost savings 
7.18 	in the workers' compensation system that will offset the costs associated with increased 
7.19 	benefits under sections 1 and 2.
7.20 		Subd. 2.Members. The advisory group consists of:
7.21 	(1) one representative from each of the five largest workers' compensation hospital 
7.22 	providers appointed by the Minnesota Hospital Association;
7.23 	(2) two physicians appointed by the Minnesota Medical Association;
7.24 	(3) one chiropractor appointed by the Minnesota Chiropractic Association; and
7.25 	(4) three representatives of workers' compensation insurers appointed by the 
7.26 	commissioner of labor and industry.
7.27 	Members of the advisory group are not entitled to compensation or per diem for 
7.28 	service on the advisory group.
7.29 		Subd. 3.Report. The advisory group must present recommendations described in 
7.30 	subdivision 1 to the commissioner of labor and industry by January 1, 2009.
7.31 		Subd. 4.Rules. The commissioner of labor and industry shall adopt rules by June 
7.32 	30, 2009, that adopt the standards recommended by the advisory group under subdivision 
7.33 	3.
7.34 		Subd. 5.Expiration. The advisory group established under this section expires 
7.35 	on January 1, 2009.

8.1 	Sec. 5. EFFECTIVE DATE.
 8.2 	Sections 1 and 2 are effective for injuries occurring on or after October 1, 2007. 
8.3 	Sections 3 and 4 are effective the day following final enactment.