Summary of 2017 Amendments to the Minnesota Workers’ Compensation Act
On May 30, 2017, Minnesota Governor Mark Dayton signed legislation making several amendments to the Minnesota Workers' Compensation Act (MWCA).
The amendments cover diverse aspects of the MWCA, including:
- Payment of medical bills, including creating a new requirement that payers and payees, including third party “clearinghouses”, train and designate a contact person for submission and payment of medical bills;
- Payment of medical bills under the “fee schedule” based on the Medicare-MS-DRG system and in catastrophic, high-cost injury claims;
- Minor changes and updates to service and filing procedures;
- A new provision dealing with the impact of the Ekdahl decision; and
- New procedures for submitting stipulations for settlement where the parties have settled but are unable to reach agreement with intervenors.
Each amendment has its own effective date.
Payments based on Medicare MS-DRG System – Minn. Stat. § 176.1362, Subd. 1 – Effective May 31, 2017.
This section was revised to require payments based on the Medicare MS-DRG system. Effective for patients discharged after October 1, 2017, those payments for inpatient services and supplies must be calculated per the PC-Pricer program. DOLI must post the MS-DRG system on its website or parties are to use the most recent version available on Medicare's website effective July 1 of the prior year.
Payment for Catastrophic, High-Cost Injuries – Minn. Stat. § 176.1362, Subd. 2 – Effective May 31, 2017.
This section concerns payments for catastrophic or high cost injuries, i.e., hospitalizations the charges for which exceed $175,000. The revisions clarify that the threshold amount is the amount on the date of discharge. This section also requires the commissioner to annually adjust the catastrophic threshold amount using data available as of October 1 and publish the update threshold.
Filing and Service and Electronic Filing – Minn. Stat. § § 176.275 and 176.285 – Effective May 31, 2017.
- The division, department, office, and court of appeals can now refuse to accept any form or document that lacks information required by statute or rule. Also, they do not need to maintain duplicate forms or documents already filed.
- When electronically filed documents must be served on a party, both the filed and served documents must contain the same information and be in the format required by the commissioner.
- Electronically filed document may contain an electronic signature, which is defined by Minn. Stat. § 325L.02, as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”
- The State of Minnesota may serve documents electronically on a payer (workers' compensation insurer, self-insured employer, or third-party administrator), rehabilitation provider, or attorney, and on any other party if that party agrees to receive the document in electronic format. The date of service of an electronically served document is the date the recipient is sent the document or notified that the document is available on a website, whichever occurs first.
Forbearance of Amounts Owed to Special Compensation Fund – Minn. Stat. § 176.1292 – Effective May 31, 2017.
In Ekdahl v. Independent School District #213, 851 N.W.2d 874 (Minn. 2014) the Minnesota Supreme Court held the phrase “old age and survivor insurance benefits,” as used in Minn. Stat. § 176.101, subd. 4 was limited to Social Security benefits and did not include public pension retirement benefits. The Ekdahl decision reversed the common practice of employers and insurers offsetting public pension retirement benefits from permanent total disability benefits once $25,000 was paid in permanent total disability benefits.
Minn. Stat. § 176 .1292, a new amendment to the MWCA, adds language codifying parts of the Ekdahl decision and clarifying the consequences. The statute prohibits payers from offsetting government retirement benefits, other than Social Security retirement benefits, from PTD benefits. The bill defines retirement benefits as “retirement annuities, optional annuities received in lieu of retirement benefits, and any other benefit or annuity paid by a government benefit program that is not clearly identified as a disability benefit or disability annuity.” Payers may still offset old age and survivor Social Security benefits.
If payers offset government retirement benefits from past PTD benefits, the statute requires the payers to recalculate benefits owed without the public retirement offset and pay the employee the underpayment owed. If the employee is deceased, the PTD underpayment owed, without public retirement offset, is due to the employee's dependents or legal heirs if there are no dependents. Payers who timely recalculate and pay PTD may take credit for supplementary benefits and PTD benefits previously paid.
The statute outlines time deadlines in which payers must pay the PTD benefits, depending on the status of the claim (whether benefits are ongoing, whether the employee is deceased, etc.). The deadlines range from 150 to 270 days following enactment of the amendment. More than one time frame may apply to a claim.
Payers are not required to recalculate permanent total disability benefits owed if:
- The employee died before 1/1/08.
- The employee's last PTD benefit was paid before 1/1/2000.
- The employee's last PTD benefit would have been paid before 1/1/2000 if the PTD benefit was not reduced by public retirement benefits.
- There is a full, final and complete Stipulation for Settlement closing out PTD benefits.
- There is a Stipulation for Settlement or final court decision that explicitly states the employee's PTD benefits may be reduced by public retirement benefits. This does not apply if the Stipulation for Settlement or final court decision is ambiguous.
- A final court decision or Stipulation for Settlement that allowed PTD benefits to be reduced by public retirement benefits was vacated after the statute was amended.
Payers that have appropriately recalculated and paid PTD benefits are not required to re-pay supplementary benefits if the Special Compensation Fund over-reimbursed supplementary benefits.
Payers that have appropriately recalculated and paid PTD benefits are entitled to reimbursement of supplementary benefits paid before August 13, 2014, if the Special Compensation Fund denied reimbursement due to the payer's reduction of PTD benefits by public retirement benefits.
A payer that appropriately recalculated and paid PTD benefits is entitled to a refund from the Special Compensation Fund if the payer re-paid the Special Compensation Fund for an over-reimbursement of supplemental benefits or paid assessments on increased permanent total disability benefits for employees with dates of injury before August 13, 2014. The Special Compensation Fund must issue a refund within 30 days. The Special Compensation Fund must also pay interest on any refunds.
Assessments – If a payer timely recalculates and pays PTD under this section, they do not have to pay past or future assessments on the amount of increase or additional PTD or past supplementary benefits recalculated as PTD.
Refunds – Payers that already recalculated and paid recalculated PTD after Ekdahl and then reimbursed the Special Compensation Fund for overpaid supplementary benefits, or paid additional assessments based on the recalculated PTD, may claim a refund from the Special Compensation Fund. The Fund must issue the refund within 30 days after they receive a properly documented claim for refund with the amount of the refund claimed. The payer may claim for percent annual interest on its refund claim.
Applicability – The amendments do not prevent employees, dependents or heirs from pursuing additional PTD benefits beyond the recalculated PTD, but the previously paid PTD is not construed as an admission of liability and cannot be used to justify additional claims. Payers reserve all defenses, including defenses that previous stipulations for settlement allowed the offset of PTD. However, if the court rules that the payer may reduce PTD by retirement benefits received by the employee, the payer cannot recover any overpayment of recalculated PTD that the claimant already received and the payer cannot take a credit for any overpaid benefits against future benefits. If the court determines the payer cannot reduce the PTD benefits by retirement benefits received by the employee, the payer may not claim exemption from assessments under this section.
Failure to Comply – There are consequences for failure to comply with the statute, including loss of the relief provisions regarding supplementary benefits and assessments and penalties.
Intervention Claims – Minn. Stat. § 176.521, subd. 2b(a) – Effective August 1, 2017.
The Legislature added a new section to the statute dealing with settlement agreements in cases where the parties have not been able to reach agreements with intervenors. Under this new provision:
- The parties may file a partial Stipulation resolving the employee's claims but reserving the claims of the intervenors to be resolved separately.
- If an intervenor does not sign the Stipulation, the partial Stipulation must include a statement the parties could not:
- Obtain a response from the intervenor on its interest or on an extended offer;
- Reach an agreement with the intervenor despite negotiating in good faith; or
- Obtain the intervenor's signature within a reasonable time.
- The Stipulation must contain detailed case-specific support for these statements.
- The Stipulation must reserve the intervenor's interests at hearing and provide that the employee will cooperate at hearing.
(b): Prior to filing the partial Stipulation a copy of the partial Stipulation must be served on all parties, including the non-signing intervenor, with notification the parties intend to file the partial Stipulation
(c): Within 10 days of service of the partial Stipulation a non-signing intervenor may serve and file an objection with case specific factual basis that approval will adversely impact the rights of the intervenor
(d): After expiration of the 10 days any party may file the partial Stipulation
(e) Unless the compensation judge has reasonable belief approval of the partial Stipulation will adversely impact the rights of the non-signing intervenor, the judge shall immediately issue the award
(f) If the compensation judge has a reasonable belief approval will adversely impact the rights of the intervenor, the judge shall disapprove the stipulation.
Written Motions for Intervention – Minn. Stat. § 176.361, subd. 2 – Effective August 1, 2017.
In the case of an administrative conference or an expedited hearing, intervenors have 30 days to serve and file their written motions to intervene.
Objections to intervention claims should include detailed objections to any services rendered or payments made by the intervenor which are disputed.
Comment: This provision codifies court decisions and rules developed by the Office of Administrative Hearings to deal with intervention claims and situations where the parties have not been able to reach agreement with an intervenor(s). The amendment specifically authorizes the Office of Administrative Hearings to use expedited rulemaking procedures to conform its administrator rules with the new statutory amendments to the provision regarding written motions for intervention.
Designated Contact Person and Required Training Related to Submission and Payment of Medical Bills – Minn. Stat. § 176.135, Subd. 9 Effective October 1, 2017.
As of November 1, 2017, a designated contact person, who has been trained to handle submission and payment of medical bills, must be provided to DOLI. This includes any of the following:
- Adjustment, and
- Payment of medical bills.
This applies to carriers, TPA's, Self-Insureds, hospitals and healthcare clearing houses. If a new person takes over in this role, the organization must notify DOLI within 14 days. The statute requires DOLI to create and information form with the designated employee's contact information and post a directory of designated employees on DOLI's website.
The designated person must complete training provided by DOLI and respond within 30 days of written requests regard submissions or payments of medical bills.
Penalties for failure to comply include:
- $50 for each day of noncompliance after DOLI has given a 30 day written warning
- Up to $3,000 for failure to have the designated person complete the training within 90 days of notice of the availability of training
- Up to $3,000 for failure to respond to a DOLI inquiry about submission or payment of medical bills
DOLI cannot however penalize for this section and under 176.914, Subd. 3 (6) for failure to respond.
We are pleased to provide you with this summary. You may find the text for the amendments, included in the Session Laws Chapter 94, here.
Please contact any of the attorneys in our Workers' Compensation Practice Group if you have any questions about these amendments or Minnesota workers' compensation law.