Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1992, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1992
CHAPTER 549-H.F.No. 2800
An act relating to health care; providing health
coverage for low-income uninsured persons;
establishing statewide and regional cost containment
programs; reforming requirements for health insurance
companies; establishing rural health system
initiatives; creating quality of care and data
collection programs; revising malpractice laws;
creating a health care access fund; imposing taxes;
providing penalties; appropriating money; amending
Minnesota Statutes 1990, sections 16A.124, by adding a
subdivision; 43A.17, subdivision 9; 60A.15,
subdivision 1; 62A.02, subdivisions 1, 2, 3, and by
adding subdivisions; 62C.01, subdivision 3; 62E.02,
subdivision 23; 62E.10, subdivision 1; 62E.11,
subdivision 9, and by adding a subdivision; 62H.01;
136A.1355, subdivisions 2 and 3; 144.147, subdivisions
1, 3, and 4; 144.581, subdivision 1; 144.8093;
145.682, subdivision 4; 256.936, subdivisions 1, 2, 3,
4, and by adding subdivisions; 256B.057, by adding a
subdivision; 290.01, subdivision 19b; and 447.31,
subdivisions 1 and 3; Minnesota Statutes 1991
Supplement, sections 62A.31, subdivision 1; 145.61,
subdivision 5; 145.64, subdivision 2; 256.936,
subdivision 5; 297.02, subdivision 1; and 297.03,
subdivision 5; proposing coding for new law in
Minnesota Statutes, chapter 16A; 43A; 62A; 62E; 62J;
136A; 137; 144; 214; 256; 256B; 295; and 604;
proposing coding for new law as Minnesota Statutes,
chapter 62L; repealing Minnesota Statutes 1990,
section 62A.02, subdivisions 4 and 5.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
COST CONTAINMENT
Section 1. [62J.015] [PURPOSE.]
The legislature finds that the staggering growth in health
care costs is having a devastating effect on the health and cost
of living of Minnesota residents. The legislature further finds
that the number of uninsured and underinsured residents is
growing each year and that the cost of health care coverage for
our insured residents is increasing annually at a rate that far
exceeds the state's overall rate of inflation.
The legislature further finds that it must enact immediate
and intensive cost containment measures to limit the growth of
health care expenditures, reform insurance practices, and
finance a plan that offers access to affordable health care for
our permanent residents by capturing dollars now lost to
inefficiencies in Minnesota's health care system.
The legislature further finds that controlling costs is
essential to the maintenance of the many factors contributing to
the quality of life in Minnesota: our environment, education
system, safe communities, affordable housing, provision of food,
economic vitality, purchasing power, and stable population.
It is, therefore, the intent of the legislature to lay a
new foundation for the delivery and financing of health care in
Minnesota and to call this new foundation The Minnesota Health
Right Act.
Sec. 2. [62J.03] [DEFINITIONS.]
Subdivision 1. [SCOPE OF DEFINITIONS.] For purposes of
this chapter, the terms defined in this section have the
meanings given.
Subd. 2. [CLINICALLY EFFECTIVE.] "Clinically effective"
means that the use of a particular medical technology improves
patient clinical status, as measured by medical condition,
survival rates, and other variables, and that the use of the
particular technology demonstrates a clinical advantage over
alternative technologies.
Subd. 3. [COMMISSION.] "Commission" or "state commission"
means the Minnesota health care commission established in
section 62J.05.
Subd. 4. [COMMISSIONER.] "Commissioner" means the
commissioner of health.
Subd. 5. [COST EFFECTIVE.] "Cost effective" means that the
economic costs of using a particular technology to achieve
improvement in a patient's health outcome are justified given a
comparison to both the economic costs and the improvement in
patient health outcome resulting from the use of alternative
technologies.
Subd. 6. [GROUP PURCHASER.] "Group purchaser" means a
person or organization that purchases health care services on
behalf of an identified group of persons, regardless of whether
the cost of coverage or services is paid for by the purchaser or
by the persons receiving coverage or services, as further
defined in rules adopted by the commissioner. "Group purchaser"
includes, but is not limited to, health insurance companies,
health maintenance organizations and other health plan
companies; employee health plans offered by self-insured
employers; group health coverage offered by fraternal
organizations, professional associations, or other
organizations; state and federal health care programs; state and
local public employee health plans; workers' compensation plans;
and the medical component of automobile insurance coverage.
Subd. 7. [IMPROVEMENT IN HEALTH OUTCOME.] "Improvement in
health outcome" means an improvement in patient clinical status,
and an improvement in patient quality-of-life status, as
measured by ability to function, ability to return to work, and
other variables.
Subd. 8. [PROVIDER.] "Provider" or "health care provider"
means a person or organization other than a nursing home that
provides health care or medical care services within Minnesota
for a fee, as further defined in rules adopted by the
commissioner.
Sec. 3. [62J.04] [CONTROLLING THE RATE OF GROWTH OF HEALTH
CARE SPENDING.]
Subdivision 1. [COMPREHENSIVE BUDGET.] The commissioner of
health shall set an annual limit on the rate of growth of public
and private spending on health care services for Minnesota
residents. The limit on growth must be set at a level that will
slow the current rate of growth by at least ten percent per year
using the spending growth rate for 1991 as a base year. This
limit must be achievable through good faith, cooperative efforts
of health care consumers, purchasers, and providers.
Subd. 2. [DATA COLLECTION.] For purposes of setting limits
under this section, the commissioner shall collect from all
Minnesota health care providers data on patient revenues
received during a time period specified by the commissioner.
The commissioner shall also collect data on health care spending
from all group purchasers of health care. All health care
providers and group purchasers doing business in the state shall
provide the data requested by the commissioner at the times and
in the form specified by the commissioner. Professional
licensing boards and state agencies responsible for licensing,
registering, or regulating providers shall cooperate fully with
the commissioner in achieving compliance with the reporting
requirements. Intentional failure to provide reports requested
under this section is grounds for revocation of a license or
other disciplinary or regulatory action against a regulated
provider. The commissioner may assess a fine against a provider
who refuses to provide information required by the commissioner
under this section. If a provider refuses to provide a report
or information required under this section, the commissioner may
obtain a court order requiring the provider to produce documents
and allowing the commissioner to inspect the records of the
provider for purposes of obtaining the information required
under this section. All data received is nonpublic, trade
secret information under section 13.37. The commissioner shall
establish procedures and safeguards to ensure that data provided
to the Minnesota health care commission is in a form that does
not identify individual patients, providers, employers,
purchasers, or other individuals and organizations, except with
the permission of the affected individual or organization.
Subd. 3. [COST CONTAINMENT DUTIES.] After obtaining the
advice and recommendations of the Minnesota health care
commission, the commissioner shall:
(1) establish statewide and regional limits on growth in
total health care spending under this section, monitor regional
and statewide compliance with the spending limits, and take
action to achieve compliance to the extent authorized by the
legislature;
(2) divide the state into no fewer than four regions, with
one of those regions being the Minneapolis/St. Paul metropolitan
statistical area, for purposes of fostering the development of
regional health planning and coordination of health care
delivery among regional health care systems and working to
achieve spending limits;
(3) provide technical assistance to regional coordinating
boards;
(4) monitor the quality of health care throughout the
state, conduct consumer satisfaction surveys, and take action as
necessary to ensure an appropriate level of quality;
(5) develop uniform billing forms, uniform electronic
billing procedures, and other uniform claims procedures for
health care providers by January 1, 1993;
(6) undertake health planning responsibilities as provided
in section 62J.15;
(7) monitor and promote the development and implementation
of practice parameters;
(8) authorize, fund, or promote research and
experimentation on new technologies and health care procedures;
(9) designate centers of excellence for specialized and
high-cost procedures and treatment and establish minimum
standards and requirements for particular procedures or
treatment;
(10) administer or contract for statewide consumer
education and wellness programs that will improve the health of
Minnesotans and increase individual responsibility relating to
personal health and the delivery of health care services;
(11) administer the health care analysis unit under article
7; and
(12) undertake other activities to monitor and oversee the
delivery of health care services in Minnesota with the goal of
improving affordability, quality, and accessibility of health
care for all Minnesotans.
Subd. 4. [CONSULTATION WITH THE COMMISSION.] Before
undertaking any of the duties required under this chapter, the
commissioner of health shall consult with the Minnesota health
care commission and obtain the commission's advice and
recommendations. If the commissioner intends to depart from the
commission's recommendations, the commissioner shall inform the
commission of the intended departure, provide a written
explanation of the reasons for the departure, and give the
commission an opportunity to comment on the intended departure.
If, after receiving the commission's comment, the commissioner
still intends to depart from the commission's recommendations,
the commissioner shall notify each member of the legislative
oversight commission of the commissioner's intent to depart from
the recommendations of the Minnesota health care commission.
The notice to the legislative oversight commission must be
provided at least ten days before the commissioner takes final
action. If emergency action is necessary that does not allow
the commissioner to obtain the advice and recommendations of the
Minnesota health care commission or to provide advance notice
and an opportunity for comment as required in this subdivision,
the commissioner shall provide a written notice and explanation
to the Minnesota health care commission and the legislative
oversight commission at the earliest possible time.
Subd. 5. [APPEALS.] A person or organization may appeal a
decision of the commissioner through a contested case proceeding
under chapter 14.
Subd. 6. [RULEMAKING.] The commissioner shall adopt rules
under chapter 14 to implement this chapter, including appeals of
decisions by the Minnesota health care commission and the
regional coordinating boards.
Subd. 7. [PLAN FOR CONTROLLING GROWTH IN SPENDING.] (a) By
January 15, 1993, the Minnesota health care commission shall
submit to the legislature and the governor for approval a plan,
with as much detail as possible, for slowing the growth in
health care spending to the growth rate identified by the
commission, beginning July 1, 1993. The goal of the plan shall
be to reduce the growth rate of health care spending, adjusted
for population changes, so that it declines by at least ten
percent per year for each of the next five years. The
commission shall use the rate of spending growth in 1991 as the
base year for developing its plan. The plan may include
tentative targets for reducing the growth in spending for
consideration by the legislature.
(b) In developing the plan, the commission shall consider
the advisability and feasibility of the following options, but
is not obligated to incorporate them into the plan:
(1) data and methods that could be used to calculate
regional and statewide spending limits and the various options
for expressing spending limits, such as maximum percentage
growth rates or actuarially adjusted average per capita rates
that reflect the demographics of the state or a region of the
state;
(2) methods of adjusting spending limits to account for
patients who are not Minnesota residents, to reflect care
provided to a person outside the person's region, and to adjust
for demographic changes over time;
(3) methods that could be used to monitor compliance with
the limits;
(4) criteria for exempting spending on research and
experimentation on new technologies and medical practices when
setting or enforcing spending limits;
(5) methods that could be used to help providers,
purchasers, consumers, and communities control spending growth;
(6) methods of identifying activities of consumers,
providers, or purchasers that contribute to excessive growth in
spending;
(7) methods of encouraging voluntary activities that will
help keep spending within the limits;
(8) methods of consulting providers and obtaining their
assistance and cooperation and safeguards that are necessary to
protect providers from abrupt changes in revenues or practice
requirements;
(9) methods of avoiding, preventing, or recovering spending
in excess of the rate of growth identified by the commission;
(10) methods of depriving those who benefit financially
from overspending of the benefit of overspending, including the
option of recovering the amount of the excess spending from the
greater provider community or from individual providers or
groups of providers through targeted assessments;
(11) methods of reallocating health care resources among
provider groups to correct existing inequities, reward desirable
provider activities, discourage undesirable activities, or
improve the quality, affordability, and accessibility of health
care services;
(12) methods of imposing mandatory requirements relating to
the delivery of health care, such as practice parameters,
hospital admission protocols, 24-hour emergency care screening
systems, or designated specialty providers;
(13) methods of preventing unfair health care practices
that give a provider or group purchaser an unfair advantage or
financial benefit or that significantly circumvent, subvert, or
obstruct the goals of this chapter;
(14) methods of providing incentives through special
spending allowances or other means to encourage and reward
special projects to improve outcomes or quality of care; and
(15) the advisability or feasibility of a system of
permanent, regional coordinating boards to ensure community
involvement in activities to improve affordability,
accessibility, and quality of health care in each region.
Sec. 4. [62J.05] [MINNESOTA HEALTH CARE COMMISSION.]
Subdivision 1. [PURPOSE OF THE COMMISSION.] The Minnesota
health care commission consists of health care providers,
purchasers, consumers, employers, and employees. The two major
functions of the commission are:
(1) to make recommendations to the commissioner of health
and the legislature regarding statewide and regional limits on
the rate of growth of health care spending and activities to
prevent or address spending in excess of the limits; and
(2) to help Minnesota communities, providers, group
purchasers, employers, employees, and consumers improve the
affordability, quality, and accessibility of health care.
Subd. 2. [MEMBERSHIP.] (a) [NUMBER.] The Minnesota health
care commission consists of 25 members, as specified in this
subdivision. A member may designate a representative to act as
a member of the commission in the member's absence. The
governor and legislature shall coordinate appointments under
this subdivision to ensure gender balance and ensure that
geographic areas of the state are represented in proportion to
their population.
(b) [HEALTH PLAN COMPANIES.] The commission includes four
members representing health plan companies, including one member
appointed by the Minnesota Council of Health Maintenance
Organizations, one member appointed by the Insurance Federation
of Minnesota, one member appointed by Blue Cross and Blue Shield
of Minnesota, and one member appointed by the governor.
(c) [HEALTH CARE PROVIDERS.] The commission includes six
members representing health care providers, including one member
appointed by the Minnesota Hospital Association, one member
appointed by the Minnesota Medical Association, one member
appointed by the Minnesota Nurses' Association, one rural
physician appointed by the governor, and two members appointed
by the governor to represent providers other than hospitals,
physicians, and nurses.
(d) [EMPLOYERS.] The commission includes four members
representing employers, including (1) two members appointed by
the Minnesota Chamber of Commerce, including one self-insured
employer and one small employer; and (2) two members appointed
by the governor.
(e) [CONSUMERS.] The commission includes five consumer
members, including three members appointed by the governor, one
of whom must represent persons over age 65; one appointed under
the rules of the senate; and one appointed under the rules of
the house of representatives.
(f) [EMPLOYEE UNIONS.] The commission includes three
representatives of labor unions, including two appointed by the
AFL-CIO Minnesota and one appointed by the governor to represent
other unions.
(g) [STATE AGENCIES.] The commission includes the
commissioners of commerce, employee relations, and human
services.
(h) [CHAIR.] The governor shall designate the chair of the
commission from among the governor's appointees.
Subd. 3. [FINANCIAL INTERESTS OF MEMBERS.] A member
representing employers, consumers, or employee unions must not
have any personal financial interest in the health care system
except as an individual consumer of health care services. An
employee who participates in the management of a health benefit
plan may serve as a member representing employers or unions.
Subd. 4. [CONFLICTS OF INTEREST.] No member may
participate or vote in commission proceedings involving an
individual provider, purchaser, or patient, or a specific
activity or transaction, if the member has a direct financial
interest in the outcome of the commission's proceedings other
than as an individual consumer of health care services.
Subd. 5. [IMMUNITY FROM LIABILITY.] No member of the
commission shall be held civilly or criminally liable for an act
or omission by that person if the act or omission was in good
faith and within the scope of the member's responsibilities
under this chapter.
Subd. 6. [TERMS; COMPENSATION; REMOVAL; AND
VACANCIES.] The commission is governed by section 15.0575.
Subd. 7. [ADMINISTRATION.] The commissioner of health
shall provide office space, equipment and supplies, and
technical support to the commission.
Subd. 8. [STAFF.] The commission may hire an executive
director who serves in the unclassified service. The executive
director may hire employees and consultants as authorized by the
commission and may prescribe their duties. The attorney general
shall provide legal services to the commission.
Sec. 5. [62J.07] [LEGISLATIVE OVERSIGHT COMMISSION.]
Subdivision 1. [LEGISLATIVE OVERSIGHT.] The legislative
commission on health care access reviews the activities of the
commissioner of health, the state health care commission, and
all other state agencies involved in the implementation and
administration of this chapter, including efforts to obtain
federal approval through waivers and other means.
Subd. 2. [MEMBERSHIP.] The legislative commission on
health care access consists of five members of the senate
appointed under the rules of the senate and five members of the
house of representatives appointed under the rules of the house
of representatives. The legislative commission on health care
access must include three members of the majority party and two
members of the minority party in each house.
Subd. 3. [REPORTS TO THE COMMISSION.] The commissioner of
health and the Minnesota health care commission shall report on
their activities and the activities of the regional boards
annually and at other times at the request of the legislative
commission on health care access. The commissioners of health,
commerce, and human services shall provide periodic reports to
the legislative commission on the progress of rulemaking that is
authorized or required under this act and shall notify members
of the commission when a draft of a proposed rule has been
completed and scheduled for publication in the State Register.
At the request of a member of the commission, a commissioner
shall provide a description and a copy of a proposed rule.
Subd. 4. [REPORT ON REVENUE SOURCES.] The legislative
commission on health care access shall study the long-term
integrity and stability of the revenue sources created in this
act as the funding mechanism for the health right program and
related health care initiatives. The study must include:
(1) an analysis of the impact of the provider taxes on the
health care system and the relationship between the taxes and
other initiatives related to health care access, affordability,
and quality;
(2) the adequacy of the revenues generated in relation to
the costs of a fully implemented and appropriately designed
health right program;
(3) the extent to which provider taxes are passed on to
individual and group purchasers and the ability of individual
providers and groups of provider to absorb all or part of the
tax burden;
(4) alternative funding sources and financing methods; and
(5) other appropriate issues relating to the financing of
the health right program and related initiatives.
The commission shall provide a preliminary report and
recommendations to the legislature by January 15, 1993, and a
final report and recommendations by January 15, 1994. The
commissioners of revenue, human services, and health shall
provide assistance to the commission.
Sec. 6. [62J.09] [REGIONAL COORDINATING BOARDS.]
Subdivision 1. [GENERAL DUTIES.] The regional coordinating
boards are locally controlled boards consisting of providers,
health plan companies, employers, consumers, and elected
officials. Regional boards may:
(1) recommend that the commissioner sanction voluntary
agreements between providers in the region that will improve
quality, access, or affordability of health care but might
constitute a violation of antitrust laws if undertaken without
government direction;
(2) make recommendations to the commissioner regarding
major capital expenditures or the introduction of expensive new
technologies and medical practices that are being proposed or
considered by providers;
(3) undertake voluntary activities to educate consumers,
providers, and purchasers or to promote voluntary, cooperative
community cost containment, access, or quality of care projects;
(4) make recommendations to the commissioner regarding ways
of improving affordability, accessibility, and quality of health
care in the region and throughout the state.
Subd. 2. [MEMBERSHIP.] (a) Each regional health care
management board consists of 16 members as provided in this
subdivision. A member may designate a representative to act as
a member of the commission in the member's absence.
(b) [PROVIDER REPRESENTATIVES.] Each regional board must
include four members representing health care providers who
practice in the region. One member is appointed by the
Minnesota Medical Association. One member is appointed by the
Minnesota Hospital Association. One member is appointed by the
Minnesota Nurses' Association. The remaining member is
appointed by the governor to represent providers other than
physicians, hospitals, and nurses.
(c) [HEALTH PLAN COMPANY REPRESENTATIVES.] Each regional
board includes three members representing health plan companies
who provide coverage for residents of the region, including one
member representing health insurers who is elected by a vote of
all health insurers providing coverage in the region, one member
elected by a vote of all health maintenance organizations
providing coverage in the region, and one member appointed by
Blue Cross and Blue Shield of Minnesota. The fourth member is
appointed by the governor.
(d) [EMPLOYER REPRESENTATIVES.] Regional boards include
three members representing employers in the region. Employer
representatives are elected by a vote of the employers who are
members of chambers of commerce in the region. At least one
member must represent self-insured employers.
(e) [EMPLOYEE UNIONS.] Regional boards include one member
appointed by the AFL-CIO Minnesota who is a union member
residing or working in the region or who is a representative of
a union that is active in the region.
(f) [PUBLIC MEMBERS.] Regional boards include three
consumer members. One consumer member is elected by the
community health boards in the region, with each community
health board having one vote. One consumer member is elected by
the state legislators with districts in the region. One
consumer member is appointed by the governor.
(g) [COUNTY COMMISSIONER.] Regional boards include one
member who is a county board member. The county board member is
elected by a vote of all of the county board members in the
region, with each county board having one vote.
(h) [STATE AGENCY.] Regional boards include one state
agency commissioner appointed by the governor to represent state
health coverage programs.
Subd. 3. [ESTABLISHMENT OF REGIONAL COORDINATING
ORGANIZATIONS AND STRUCTURE.] The providers of health services
in each region should begin formulating the appropriate
structure for organizing the delivery networks or systems to
accomplish the objectives in subdivision 1. Once a draft plan
is outlined, or during the drafting process, other entities
should be included as appropriate so as to ensure the
comprehensiveness of the plan and the regional planning
process. The ultimate structure of the regional coordinating
organization may vary by region and in composition. Each region
may consult with the commissioner of health and the Minnesota
health care commission during the planning process.
Subd. 4. [FINANCIAL INTERESTS OF MEMBERS.] A member
representing employers, consumers, or employee unions must not
have any personal financial interest in the health care system
except as an individual consumer of health care services. An
employee who participates in the management of a health benefit
plan may serve as a member representing employers or unions.
Subd. 5. [CONFLICTS OF INTEREST.] No member may
participate or vote in commission proceedings involving an
individual provider, purchaser, or patient, or a specific
activity or transaction, if the member has a direct financial
interest in the outcome of the commission's proceedings other
than as an individual consumer of health care services.
Subd. 6. [TECHNICAL ASSISTANCE.] The state health care
commission shall provide technical assistance to regional boards.
Subd. 7. [TERMS; COMPENSATION; REMOVAL; AND
VACANCIES.] Regional coordinating boards are governed by section
15.0575, except that members do not receive per diem payments.
Subd. 8. [REPEALER.] This section is repealed effective
July 1, 1993.
Sec. 7. [62J.15] [HEALTH PLANNING.]
Subdivision 1. [HEALTH PLANNING ADVISORY COMMITTEE.] The
Minnesota health care commission shall convene an advisory
committee to make recommendations regarding the use and
distribution of new and existing health care technologies and
procedures and major capital expenditures by providers. The
advisory committee may include members of the state commission
and other persons appointed by the commission. The advisory
committee must include at least one person representing
physicians, at least one person representing hospitals, and at
least one person representing the health care technology
industry. Health care technologies and procedures include
high-cost pharmaceuticals, organ and other high-cost
transplants, high-cost health care procedures and devices
excluding United States Food and Drug Administration approved
implantable or wearable medical devices, and expensive,
large-scale technologies such as scanners and imagers.
Subd. 2. [HEALTH PLANNING.] In consultation with the
health planning advisory committee, the Minnesota health care
commission shall:
(1) make recommendations on the types of high-cost
technologies, procedures, and capital expenditures for which a
plan on statewide use and distribution should be made;
(2) develop criteria for evaluating new high-cost health
care technology and procedures and major capital expenditures
that take into consideration the clinical effectiveness, cost
effectiveness, and health outcome;
(3) recommend to the commissioner of health and the
regional coordinating organizations statewide and regional goals
and targets for the distribution and use of new and existing
high-cost health care technologies and procedures and major
capital expenditures;
(4) make recommendations to the commissioner regarding the
designation of centers of excellence for transplants and other
specialized medical procedures; and
(5) make recommendations to the commissioner regarding
minimum volume requirements for the performance of certain
procedures by hospitals and other health care facilities or
providers.
Sec. 8. [62J.17] [EXPENDITURE REPORTING.]
Subdivision 1. [PURPOSE.] To ensure access to affordable
health care services for all Minnesotans it is necessary to
restrain the rate of growth in health care costs. An important
factor believed to contribute to escalating costs may be the
purchase of costly new medical equipment, major capital
expenditures, and the addition of new specialized services.
After spending limits are established under section 62J.04,
providers, patients, and communities will have the opportunity
to decide for themselves whether they can afford capital
expenditures or new equipment or specialized services within the
constraints of a spending limit. In this environment, the
state's role in reviewing these spending commitments can be more
limited. However, during the interim period until spending
targets are established, it is important to prevent unrestrained
major spending commitments that will contribute further to the
escalation of health care costs and make future cost containment
efforts more difficult. In addition, it is essential to protect
against the possibility that the legislature's expression of its
attempt to control health care costs may lead a provider to make
major spending commitments before targets or other cost
containment constraints are fully implemented because the
provider recognizes that the spending commitment may not be
considered appropriate, needed, or affordable within the context
of a fixed budget for health care spending. Therefore, the
legislature finds that a requirement for reporting health care
expenditures is necessary.
Subd. 2. [DEFINITIONS.] For purposes of this section, the
terms defined in this subdivision have the meanings given.
(a) [CAPITAL EXPENDITURE.] "Capital expenditure" means an
expenditure which, under generally accepted accounting
principles, is not properly chargeable as an expense of
operation and maintenance.
(b) [HEALTH CARE SERVICE.] "Health care service" means:
(1) a service or item that would be covered by the medical
assistance program under chapter 256B if provided in accordance
with medical assistance requirements to an eligible medical
assistance recipient; and
(2) a service or item that would be covered by medical
assistance except that it is characterized as experimental,
cosmetic, or voluntary.
"Health care service" does not include retail,
over-the-counter sales of nonprescription drugs and other retail
sales of health-related products that are not generally paid for
by medical assistance and other third-party coverage.
(c) [MAJOR SPENDING COMMITMENT.] "Major spending
commitment" means:
(1) acquisition of a unit of medical equipment;
(2) a capital expenditure for a single project for the
purposes of providing health care services, other than for the
acquisition of medical equipment;
(3) offering a new specialized service not offered before;
(4) planning for an activity that would qualify as a major
spending commitment under this paragraph; or
(5) a project involving a combination of two or more of the
activities in clauses (1) to (4).
The cost of acquisition of medical equipment, and the
amount of a capital expenditure, is the total cost to the
provider regardless of whether the cost is distributed over time
through a lease arrangement or other financing or payment
mechanism.
(d) [MEDICAL EQUIPMENT.] "Medical equipment" means fixed
and movable equipment that is used by a provider in the
provision of a health care service. "Medical equipment"
includes, but is not limited to, the following:
(1) an extracorporeal shock wave lithotripter;
(2) a computerized axial tomography (CAT) scanner;
(3) a magnetic resonance imaging (MRI) unit;
(4) a positron emission tomography (PET) scanner; and
(5) emergency and nonemergency medical transportation
equipment and vehicles.
(e) [NEW SPECIALIZED SERVICE.] "New specialized service"
means a specialized health care procedure or treatment regimen
offered by a provider that was not previously offered by the
provider, including, but not limited to:
(1) cardiac catheterization services involving high-risk
patients as defined in the Guidelines for Coronary Angiography
established by the American Heart Association and the American
College of Cardiology;
(2) heart, heart-lung, liver, kidney, bowel, or pancreas
transplantation service, or any other service for
transplantation of any other organ;
(3) megavoltage radiation therapy;
(4) open heart surgery;
(5) neonatal intensive care services; and
(6) any new medical technology for which premarket approval
has been granted by the United States Food and Drug
Administration, excluding implantable and wearable devices.
(f) [PROVIDER.] "Provider" means an individual,
corporation, association, firm, partnership, or other entity
that is regularly engaged in providing health care services in
Minnesota.
Subd. 3. [HOSPITAL AND NURSING HOME MORATORIA PRESERVED;
NURSING HOMES EXEMPT.] Nothing in this section supersedes or
limits the applicability of section 144.551 or 144A.071. This
section does not apply to major spending commitments made by
nursing homes or intermediate care facilities that are related
to the provision of long-term care services to residents.
Subd. 4. [EXPENDITURE REPORTING.] Any provider making a
capital expenditure establishing a health care service or new
specialized service, or making a major spending commitment after
April 1, 1992, that is in excess of $500,000, shall submit
notification of this expenditure to the commissioner and provide
the commissioner with any relevant background or other
information. The commissioner shall not have any approval or
denial authority, but should use such information in the ongoing
evaluation of statewide and regional progress toward cost
containment and other objectives.
Subd. 5. [RETROSPECTIVE REVIEW.] The commissioner of
health, in consultation with the Minnesota health care
commission, shall retrospectively review capital expenditures
and major spending commitments that are required to be reported
by providers under subdivision 4. In the event that health care
providers refuse to cooperate with attempts by the Minnesota
health care commission and regional coordinating organizations
to coordinate the use of health care technologies and
procedures, and reduce the growth rate in health care
expenditures; or in the event that health care providers use,
purchase, or perform health care technologies and procedures
that are not clinically effective and cost effective and do not
improve health outcomes based on the results of medical
research; or in the event providers have failed to pursue
collaborative arrangements; the commissioner shall require those
health care providers to follow the procedures for prospective
review and approval established in subdivision 6.
Subd. 6. [PROSPECTIVE REVIEW AND APPROVAL.] (a)
[REQUIREMENT.] The commissioner shall prohibit those health care
providers subject to retrospective review under subdivision 5
from making future major spending commitments or capital
expenditures that are required to be reported under subdivision
4 for a period of up to five years, unless: (1) the provider
has filed an application to proceed with the major spending
commitment or capital expenditure with the commissioner and
provided supporting documentation and evidence requested by the
commissioner; and (2) the commissioner determines, based upon
this documentation and evidence, that the spending commitment or
capital expenditure is appropriate. The commissioner shall make
a decision on a completed application within 60 days after an
application is submitted. The Minnesota health care commission
shall convene an expert review panel made up of persons with
knowledge and expertise regarding medical equipment, specialized
services, and health care expenditures to review applications
and make recommendations to the commissioner and the commission.
(b) [EXCEPTIONS.] This subdivision does not apply to:
(1) a major spending commitment to replace existing
equipment with comparable equipment, if the old equipment will
no longer be used in the state;
(2) a major spending commitment made by a research and
teaching institution for purposes of conducting medical
education, medical research supported or sponsored by a medical
school, or by a federal or foundation grant, or clinical trials;
(3) a major spending commitment to repair, remodel, or
replace existing buildings or fixtures if, in the judgment of
the commissioner, the project does not involve a substantial
expansion of service capacity or a substantial change in the
nature of health care services provided; and
(4) mergers, acquisitions, and other changes in ownership
or control that, in the judgment of the commissioner, do not
involve a substantial expansion of service capacity or a
substantial change in the nature of health care services
provided.
(c) [APPEALS.] A provider may appeal a decision of the
commissioner under this section through a contested case
proceeding under chapter 14.
(d) [PENALTIES AND REMEDIES.] The commissioner of health
shall have the authority to issue fines, seek injunctions, and
pursue other remedies as provided by law.
Sec. 9. [62J.19] [SUBMISSION OF REGIONAL PLAN TO
COMMISSIONER.]
Each regional coordinating organization shall submit its
plan to the commissioner on or before June 30, 1993. In the
event that any major provider, provider group or other entity
within the region chooses to not participate in the regional
planning process, the commissioner may require the participation
of that entity in the planning process or adopt other rules or
criteria for that entity. In the event that a region fails to
submit a plan to the commissioner that satisfactorily promotes
the objectives in section 62J.09, subdivisions 1 and 2, or where
competing plans and regional coordination organizations exist,
the commissioner has the authority to establish a public
regional coordinating organization for purposes of establishing
a regional plan which will achieve the objectives. The public
regional coordinating organization shall be appointed by the
commissioner and under the commissioner's direction.
Sec. 10. [62J.21] [REPORTING TO THE LEGISLATURE.]
The commissioner shall report to the legislature by January
1, 1993 regarding the process being made within each region with
respect to the establishment of a regional coordinating
organization and the development of a regional plan. In the
event that the commissioner determines that any region is not
making reasonable progress or a good-faith commitment towards
establishing a regional coordinating organization and regional
plan, the commissioner may establish a public regional board for
this purpose. The commissioner's report should also include the
issues, if any, raised during the planning process to date and
request any appropriate legislate action that would facilitate
the planning process.
Sec. 11. [62J.22] [PARTICIPATION OF FEDERAL PROGRAMS.]
The commissioner of health shall seek the full
participation of federal health care programs under this
chapter, including Medicare, medical assistance, veterans
administration programs, and other federal programs. The
commissioner of human services shall under the direction of the
health care commission submit waiver requests and take other
action necessary to obtain federal approval to allow
participation of the medical assistance program. Other state
agencies shall provide assistance at the request of the
commission. If federal approval is not given for one or more
federal programs, data on the amount of health care spending
that is collected under section 62J.04 shall be adjusted so that
state and regional spending limits take into account the failure
of the federal program to participate.
Sec. 12. [62J.23] [PROVIDER CONFLICTS OF INTEREST.]
Subdivision 1. [RULES PROHIBITING CONFLICTS OF
INTEREST.] The commissioner of health shall adopt rules
restricting financial relationships or payment arrangements
involving health care providers under which a provider benefits
financially by referring a patient to another provider,
recommending another provider, or furnishing or recommending an
item or service. The rules must be compatible with, and no less
restrictive than, the federal Medicare antikickback statute, in
section 1128B(b) of the Social Security Act, United States Code,
title 42, section 1320a-7b(b), and regulations adopted under
it. However, the commissioner's rules may be more restrictive
than the federal law and regulations and may apply to additional
provider groups and business and professional arrangements.
When the state rules restrict an arrangement or relationship
that is permissible under federal laws and regulations,
including an arrangement or relationship expressly permitted
under the federal safe harbor regulations, the fact that the
state requirement is more restrictive than federal requirements
must be clearly stated in the rule.
Subd. 2. [INTERIM RESTRICTIONS.] From July 1, 1992, until
rules are adopted by the commissioner under this section, the
restrictions in the federal Medicare antikickback statutes in
section 1128B(b) of the Social Security Act, United States Code,
title 42, section 1320a-7b(b), and rules adopted under the
federal statutes, apply to all health care providers in the
state, regardless of whether the provider participates in any
state health care program. The commissioner shall approve a
transition plan submitted to the commissioner by January 1,
1993, by a provider who is in violation of this section that
provides a reasonable time for the provider to modify prohibited
practices or divest financial interests in other providers in
order to come into compliance with this section.
Subd. 3. [PENALTY.] The commissioner may assess a fine
against a provider who violates this section. The amount of the
fine is $1,000 or 110 percent of the estimated financial benefit
that the provider realized as a result of the prohibited
financial arrangement or payment relationship, whichever is
greater. A provider who is in compliance with a transition plan
approved by the commissioner under subdivision 2, or who is
making a good faith effort to obtain the commissioner's approval
of a transition plan, is not in violation of this section.
Sec. 13. [62J.25] [MANDATORY MEDICARE ASSIGNMENT.]
(a) Effective January 1, 1993, a health care provider
authorized to participate in the Medicare program shall not
charge to or collect from a Medicare beneficiary who is a
Minnesota resident any amount in excess of 115 percent of the
Medicare-approved amount for any Medicare-covered service
provided.
(b) Effective January 1, 1994, a health care provider
authorized to participate in the Medicare program shall not
charge to or collect from a Medicare beneficiary who is a
Minnesota resident any amount in excess of 110 percent of the
Medicare-approved amount for any Medicare-covered service
provided.
(c) Effective January 1, 1995, a health care provider
authorized to participate in the Medicare program shall not
charge to or collect from a Medicare beneficiary who is a
Minnesota resident any amount in excess of 105 percent of the
Medicare-approved amount for any Medicare-covered service
provided.
(d) Effective January 1, 1996, a health care provider
authorized to participate in the Medicare program shall not
charge to or collect from a Medicare beneficiary who is a
Minnesota resident any amount in excess of the Medicare-approved
amount for any Medicare-covered service provided.
(e) This section does not apply to ambulance services as
defined in section 144.801, subdivision 4.
Sec. 14. [62J.29] [ANTITRUST EXCEPTIONS.]
Subdivision 1. [PURPOSE.] The legislature finds that the
goals of controlling health care costs and improving the quality
of and access to health care services will be significantly
enhanced by some cooperative arrangements involving providers or
purchasers that would be prohibited by state and federal
antitrust laws if undertaken without governmental involvement.
The purpose of this section is to create an opportunity for the
state to review proposed arrangements and to substitute
regulation for competition when an arrangement is likely to
result in lower costs, or greater access or quality, than would
otherwise occur in the competitive marketplace. The legislature
intends that approval of relationships be accompanied by
appropriate conditions, supervision, and regulation to protect
against private abuses of economic power.
Subd. 2. [REVIEW AND APPROVAL.] The commissioner shall
establish criteria and procedures to review and authorize
contracts, business or financial arrangements, or other
activities, practices, or arrangements involving providers or
purchasers that might be construed to be violations of state or
federal antitrust laws but which are in the best interests of
the state and further the policies and goals of this chapter.
The commissioner shall not approve any application unless the
commissioner finds that the proposed arrangement is likely to
result in lower health care costs, or greater access to or
quality of health care, than would occur in the competitive
marketplace. The commissioner may condition approval of a
proposed arrangement on a modification of all or part of the
arrangement to eliminate any restriction on competition that is
not reasonably related to the goals of controlling costs or
improving access or quality. The commissioner may also
establish conditions for approval that are reasonably necessary
to protect against any abuses of private economic power and to
ensure that the arrangement is appropriately supervised and
regulated by the state. The commissioner shall actively monitor
and regulate arrangements approved under this section to ensure
that the arrangements remain in compliance with the conditions
of approval. The commissioner may revoke an approval upon a
finding that the arrangement is not in substantial compliance
with the terms of the application or the conditions of approval.
Subd. 3. [APPLICATIONS.] Applications for approval under
this section must be filed with the commissioner. An
application for approval must describe the proposed arrangement
in detail. The application must include at least: the
identities of all parties, the intent of the arrangement, the
expected effects of the arrangement, an explanation of how the
arrangement will control costs or improve access or quality, and
financial statements showing how the efficiencies of operation
will be passed along to patients and purchasers of health care.
The commissioner may ask the attorney general to comment on an
application, but the application and any information obtained by
the commissioner under this section is not admissible in any
proceeding brought by the attorney general based on antitrust.
Subd. 4. [STATE ANTITRUST LAW.] Notwithstanding the
Minnesota antitrust law of 1971, as amended, in Minnesota
Statutes, sections 325D.49 to 325D.66, contracts, business or
financial arrangements, or other activities, practices, or
arrangements involving providers or purchasers that are approved
by the commissioner under this section do not constitute an
unlawful contract, combination, or conspiracy in unreasonable
restraint of trade or commerce under Minnesota Statutes,
sections 325D.49 to 325D.66. Approval by the state commission
is an absolute defense against any action under state antitrust
laws.
Subd. 5. [RULEMAKING.] The commissioner shall by January
1, 1994, adopt permanent rules to implement this section. The
commissioner is exempt from rulemaking until January 1, 1994.
Sec. 15. [HOSPITAL PLANNING TASK FORCE.]
The legislative commission on health care access shall
convene a hospital health planning task force to undertake
preliminary planning relating to cost containment, accessibility
of health care services, and quality of care, and to develop
options and recommendations to be presented to the legislative
commission and to the Minnesota health care commission. The
task force consists of interested representatives of Minnesota
hospitals, the commissioner of health or the commissioner's
representatives, and the members of the legislative commission
or their representatives. The task force shall submit reports
to the Minnesota health care commission by August 1, 1992, and
July 1, 1993. The task force expires on August 1, 1993. The
expenses and compensation of members is the responsibility of
the institutions, organizations, or agencies they represent.
Sec. 16. [STUDY ON RECOVERY OF UNCOMPENSATED CARE COSTS.]
The commissioner of health shall study cost-shifting and
uncompensated care costs in the health care industry. The
commissioner shall recommend to the legislature by January 15,
1993, methods to recover from health care providers an amount
equal to the share of uncompensated care costs shifted to other
payers that are no longer incurred by the provider as
uncompensated care costs, due to the availability of the health
right plan.
Sec. 17. [STUDY OF HEALTH CARE MANAGEMENT COMPANIES.]
The commissioner of commerce and the commissioner of health
shall study and make recommendations to the legislature
regarding the regulation of health care management companies.
The recommendations shall include, but are not limited to:
(1) the definition of a for-profit, and nonprofit health
care management company;
(2) the scope and appropriateness of regulation of
for-profit health care management companies, and of nonprofit
health care management companies;
(3) the extent to which cost containment and expenditure
targets can be attained or realized through regulation of health
care management companies; and
(4) the relationship between health care management
companies and health care providers, health care plans, health
care technology entities, and other components of the health
care system.
The commissioners of commerce and health shall present a
joint report to the legislature on or before January 15, 1993.
Sec. 18. [STUDY OF HEALTH MAINTENANCE ORGANIZATION
REGULATION.]
The commissioners of health and commerce shall jointly
study the regulation of health maintenance organizations. The
commissioners shall examine the level and type of regulation
that is appropriate for the department of health and for the
department of commerce and shall report to the legislature by
January 15, 1993. The report must contain a consensus plan to
transfer authority over the financial aspects of health
maintenance organizations to the commissioner of commerce, while
allowing the commissioner of health to retain authority over the
health care quality aspects of health maintenance organizations.
Sec. 19. [STUDY OF MEDICARE ASSIGNMENT FOR HOME MEDICAL
EQUIPMENT.]
The commissioner of health, in consultation with
representatives of the home medical equipment industry, shall
study the financial impact of the phase-in of mandatory Medicare
assignment on the home medical equipment suppliers. The study
must include an examination of charges for medical equipment,
physician documentation of medical need for medical equipment,
the appropriateness of federal guidelines regarding the
treatment of assignment, and other factors related to Medicare
assignment that may be unique to the home medical equipment
industry. The commissioner shall present recommendations to the
legislature by January 15, 1993.
Sec. 20. [EFFECTIVE DATE.]
Sections 1 to 11; 12, subdivisions 1 and 2; and 13 to 19
are effective the day following final enactment. Section 12,
subdivision 3, is effective July 1, 1993.
ARTICLE 2
SMALL EMPLOYER INSURANCE REFORM
Section 1. [62L.01] [CITATION.]
Subdivision 1. [POPULAR NAME.] Sections 62L.01 to 62L.23
may be cited as the Minnesota small employer health benefit act.
Subd. 2. [JURISDICTION.] Sections 62L.01 to 62L.23 apply
to any health carrier that offers, issues, delivers, or renews a
health benefit plan to a small employer.
Subd. 3. [LEGISLATIVE FINDINGS AND PURPOSE.] The
legislature finds that underwriting and rating practices in the
individual and small employer markets for health coverage create
substantial hardship and unfairness, create unnecessary
administrative costs, and adversely affect the health of
residents of this state. The legislature finds that the premium
restrictions provided by this chapter reduce but do not
eliminate these harmful effects. Accordingly, the legislature
declares its desire to phase out the remaining rating bands as
quickly as possible, with the end result of eliminating all
rating practices based on risk by July 1, 1997.
Sec. 2. [62L.02] [DEFINITIONS.]
Subdivision 1. [APPLICATION.] The definitions in this
section apply to sections 62L.01 to 62L.23.
Subd. 2. [ACTUARIAL OPINION.] "Actuarial opinion" means a
written statement by a member of the American Academy of
Actuaries that a health carrier is in compliance with this
chapter, based on the person's examination, including a review
of the appropriate records and of the actuarial assumptions and
methods utilized by the health carrier in establishing premium
rates for health benefit plans.
Subd. 3. [ASSOCIATION.] "Association" means the health
coverage reinsurance association.
Subd. 4. [BASE PREMIUM RATE.] "Base premium rate" means as
to a rating period, the lowest premium rate charged or which
could have been charged under the rating system by the health
carrier to small employers for health benefit plans with the
same or similar coverage.
Subd. 5. [BOARD OF DIRECTORS.] "Board of directors" means
the board of directors of the health coverage reinsurance
association.
Subd. 6. [CASE CHARACTERISTICS.] "Case characteristics"
means the relevant characteristics of a small employer, as
determined by a health carrier in accordance with this chapter,
which are considered by the carrier in the determination of
premium rates for the small employer.
Subd. 7. [COINSURANCE.] "Coinsurance" means an established
dollar amount or percentage of health care expenses that an
eligible employee or dependent is required to pay directly to a
provider of medical services or supplies under the terms of a
health benefit plan.
Subd. 8. [COMMISSIONER.] "Commissioner" means the
commissioner of commerce for health carriers subject to the
jurisdiction of the department of commerce or the commissioner
of health for health carriers subject to the jurisdiction of the
department of health, or the relevant commissioner's designated
representative.
Subd. 9. [CONTINUOUS COVERAGE.] "Continuous coverage"
means the maintenance of continuous and uninterrupted qualifying
prior coverage by an eligible employee or dependent. An
eligible employee or dependent is considered to have maintained
continuous coverage if the individual requests enrollment in a
health benefit plan within 30 days of termination of the
qualifying prior coverage.
Subd. 10. [DEDUCTIBLE.] "Deductible" means the amount of
health care expenses an eligible employee or dependent is
required to incur before benefits are payable under a health
benefit plan.
Subd. 11. [DEPENDENT.] "Dependent" means an eligible
employee's spouse, unmarried child who is under the age of 19
years, unmarried child who is a full-time student under the age
of 25 years as defined in section 62A.301 and financially
dependent upon the eligible employee, or dependent child of any
age who is handicapped and who meets the eligibility criteria in
section 62A.14, subdivision 2. For the purpose of this
definition, a child may include a child for whom the employee or
the employee's spouse has been appointed legal guardian.
Subd. 12. [ELIGIBLE CHARGES.] "Eligible charges" means the
actual charges submitted to a health carrier by or on behalf of
a provider, eligible employee, or dependent for health services
covered by the health carrier's health benefit plan. Eligible
charges do not include charges for health services excluded by
the health benefit plan or charges for which an alternate health
carrier is liable under the coordination of benefit provisions
of the health benefit plan.
Subd. 13. [ELIGIBLE EMPLOYEE.] "Eligible employee" means
an individual employed by a small employer for at least 20 hours
per week and who has satisfied all employer participation and
eligibility requirements, including, but not limited to, the
satisfactory completion of a probationary period of not less
than 30 days but no more than 90 days. The term includes a sole
proprietor, a partner of a partnership, or an independent
contractor, if the sole proprietor, partner, or independent
contractor is included as an employee under a health benefit
plan of a small employer, but does not include employees who
work on a temporary, seasonal, or substitute basis.
Subd. 14. [FINANCIALLY IMPAIRED CONDITION.] "Financially
impaired condition" means a situation in which a health carrier
is not insolvent, but (1) is considered by the commissioner to
be potentially unable to fulfill its contractual obligations, or
(2) is placed under an order of rehabilitation or conservation
by a court of competent jurisdiction.
Subd. 15. [HEALTH BENEFIT PLAN.] "Health benefit plan"
means a policy, contract, or certificate issued by a health
carrier to a small employer for the coverage of medical and
hospital benefits. Health benefit plan includes a small
employer plan. Health benefit plan does not include coverage
that is:
(1) limited to disability or income protection coverage;
(2) automobile medical payment coverage;
(3) supplemental to liability insurance;
(4) designed solely to provide payments on a per diem,
fixed indemnity, or nonexpense-incurred basis;
(5) credit accident and health insurance issued under
chapter 62B;
(6) designed solely to provide dental or vision care;
(7) blanket accident and sickness insurance as defined in
section 62A.11;
(8) accident-only coverage;
(9) long-term care insurance as defined in section 62A.46;
(10) issued as a supplement to Medicare, as defined in
sections 62A.31 to 62A.44, or policies that supplement Medicare
issued by health maintenance organizations or those policies
governed by section 1833 or 1876 of the Federal Social Security
Act, United States Code, title 42, section 1395, et seq., as
amended through December 31, 1991; or
(11) workers' compensation insurance.
For the purpose of this chapter, a health benefit plan
issued to employees of a small employer who meets the
participation requirements of section 62L.03, subdivision 3, is
considered to have been issued to a small employer. A health
benefit plan issued on behalf of a health carrier is considered
to be issued by the health carrier.
Subd. 16. [HEALTH CARRIER.] "Health carrier" means an
insurance company licensed under chapter 60A to offer, sell, or
issue a policy of accident and sickness insurance as defined in
section 62A.01; a health service plan licensed under chapter
62C; a health maintenance organization licensed under chapter
62D; a fraternal benefit society operating under chapter 64B; a
joint self-insurance employee health plan operating under
chapter 62H; and a multiple employer welfare arrangement, as
defined in United States Code, title 29, section 1002(40), as
amended through December 31, 1991. For the purpose of this
chapter, companies that are affiliated companies or that are
eligible to file a consolidated tax return must be treated as
one carrier, except that any insurance company or health service
plan corporation that is an affiliate of a health maintenance
organization located in Minnesota, or any health maintenance
organization located in Minnesota that is an affiliate of an
insurance company or health service plan corporation, or any
health maintenance organization that is an affiliate of another
health maintenance organization in Minnesota, may treat the
health maintenance organization as a separate carrier.
Subd. 17. [HEALTH PLAN.] "Health plan" means a health
benefit plan issued by a health carrier, except that it may be
issued:
(1) to a small employer;
(2) to an employer who does not satisfy the definition of a
small employer as defined under subdivision 26; or
(3) to an individual purchasing an individual or conversion
policy of health care coverage issued by a health carrier.
Subd. 18. [INDEX RATE.] "Index rate" means as to a rating
period for small employers the arithmetic average of the
applicable base premium rate and the corresponding highest
premium rate.
Subd. 19. [LATE ENTRANT.] "Late entrant" means an eligible
employee or dependent who requests enrollment in a health
benefit plan of a small employer following the initial
enrollment period applicable to the employee or dependent under
the terms of the health benefit plan, provided that the initial
enrollment period must be a period of at least 30 days.
However, an eligible employee or dependent must not be
considered a late entrant if:
(1) the individual was covered under qualifying existing
coverage at the time the individual was eligible to enroll in
the health benefit plan, declined enrollment on that basis, and
presents to the carrier a certificate of termination of the
qualifying prior coverage, provided that the individual
maintains continuous coverage;
(2) the individual has lost coverage under another group
health plan due to the expiration of benefits available under
the Consolidated Omnibus Budget Reconciliation Act of 1985,
Public Law Number 99-272, as amended, and any state continuation
laws applicable to the employer or carrier, provided that the
individual maintains continuous coverage;
(3) the individual is a new spouse of an eligible employee,
provided that enrollment is requested within 30 days of becoming
legally married;
(4) the individual is a new dependent child of an eligible
employee, provided that enrollment is requested within 30 days
of becoming a dependent;
(5) the individual is employed by an employer that offers
multiple health benefit plans and the individual elects a
different plan during an open enrollment period; or
(6) a court has ordered that coverage be provided for a
dependent child under a covered employee's health benefit plan
and request for enrollment is made within 30 days after issuance
of the court order.
Subd. 20. [MCHA.] "MCHA" means the Minnesota comprehensive
health association established under section 62E.10.
Subd. 21. [MEDICAL NECESSITY.] "Medical necessity" means
the appropriate and necessary medical and hospital services
eligible for payment under a health benefit plan as determined
by a health carrier.
Subd. 22. [MEMBERS.] "Members" means the health carriers
operating in the small employer market who may participate in
the association.
Subd. 23. [PREEXISTING CONDITION.] "Preexisting condition"
means a condition manifesting in a manner that causes an
ordinarily prudent person to seek medical advice, diagnosis,
care, or treatment or for which medical advice, diagnosis, care,
or treatment was recommended or received during the six months
immediately preceding the effective date of coverage, or a
pregnancy existing as of the effective date of coverage of a
health benefit plan.
Subd. 24. [QUALIFYING PRIOR COVERAGE OR QUALIFYING
EXISTING COVERAGE.] "Qualifying prior coverage" or "qualifying
existing coverage" means health benefits or health coverage
provided under:
(1) a health plan, as defined in this section;
(2) Medicare;
(3) medical assistance under chapter 256B;
(4) general assistance medical care under chapter 256D;
(5) MCHA;
(6) a self-insured health plan;
(7) the health right plan established under section
256.936, subdivision 2, when the plan includes inpatient
hospital services as provided in section 256.936, subdivision
2a, paragraph (c);
(8) a plan provided under section 43A.316; or
(9) a plan similar to any of the above plans provided in
this state or in another state as determined by the commissioner.
Subd. 25. [RATING PERIOD.] "Rating period" means the
12-month period for which premium rates established by a health
carrier are assumed to be in effect, as determined by the health
carrier. During the rating period, a health carrier may adjust
the rate based on the prorated change in the index rate.
Subd. 26. [SMALL EMPLOYER.] "Small employer" means a
person, firm, corporation, partnership, association, or other
entity actively engaged in business who, on at least 50 percent
of its working days during the preceding calendar year, employed
no fewer than two nor more than 29 eligible employees, the
majority of whom were employed in this state. If a small
employer has only two eligible employees, one employee must not
be the spouse, child, sibling, parent, or grandparent of the
other, except that a small employer plan may be offered through
a domiciled association to self-employed individuals and small
employers who are members of the association, even if the
self-employed individual or small employer has fewer than two
employees or the employees are family members. Entities that
are eligible to file a combined tax return for purposes of state
tax laws are considered a single employer for purposes of
determining the number of eligible employees. Small employer
status must be determined on an annual basis as of the renewal
date of the health benefit plan. The provisions of this chapter
continue to apply to an employer who no longer meets the
requirements of this definition until the annual renewal date of
the employer's health benefit plan. Where an association,
described in section 62A.10, subdivision 1, comprised of
employers contracts with a health carrier to provide coverage to
its members who are small employers, the association may elect
to be considered to be a small employer, even though the
association provides coverage to more than 29 employees of its
members, so long as each employer that is provided coverage
through the association qualifies as a small employer. An
association's election to be considered a small employer under
this section is not effective unless filed with the commissioner
of commerce. The association may revoke its election at any
time by filing notice of revocation with the commissioner.
Subd. 27. [SMALL EMPLOYER MARKET.] (a) "Small employer
market" means the market for health benefit plans for small
employers.
(b) A health carrier is considered to be participating in
the small employer market if the carrier offers, sells, issues,
or renews a health benefit plan to: (1) any small employer; or
(2) the eligible employees of a small employer offering a health
benefit plan if, with the knowledge of the health carrier, both
of the following conditions are met:
(i) any portion of the premium or benefits is paid for or
reimbursed by a small employer; and
(ii) the health benefit plan is treated by the employer or
any of the eligible employees or dependents as part of a plan or
program for the purposes of the Internal Revenue Code, section
106, 125, or 162.
Subd. 28. [SMALL EMPLOYER PLAN.] "Small employer plan"
means a health benefit plan issued by a health carrier to a
small employer for coverage of the medical and hospital benefits
described in section 62L.05.
Sec. 3. [62L.03] [AVAILABILITY OF COVERAGE.]
Subdivision 1. [GUARANTEED ISSUE AND REISSUE.] Every
health carrier shall, as a condition of authority to transact
business in this state in the small employer market,
affirmatively market, offer, sell, issue, and renew any of its
health benefit plans to any small employer as provided in this
chapter. Every health carrier participating in the small
employer market shall make available both of the plans described
in section 62L.05 to small employers and shall fully comply with
the underwriting and the rate restrictions specified in this
chapter for all health benefit plans issued to small employers.
A health carrier may cease to transact business in the small
employer market as provided under section 62L.09.
Subd. 2. [EXCEPTIONS.] (a) No health maintenance
organization is required to offer coverage or accept
applications under subdivision 1 in the case of the following:
(1) with respect to a small employer, where the worksite of
the employees of the small employer is not physically located in
the health maintenance organization's approved service areas; or
(2) with respect to an employee, when the employee does not
work or reside within the health maintenance organization's
approved service areas.
(b) A small employer carrier shall not be required to offer
coverage or accept applications pursuant to subdivision 1 where
the commissioner finds that the acceptance of an application or
applications would place the small employer carrier in a
financially impaired condition, provided, however, that a small
employer carrier that has not offered coverage or accepted
applications pursuant to this paragraph shall not offer coverage
or accept applications for any health benefit plan until 180
days following a determination by the commissioner that the
small employer carrier has ceased to be financially impaired.
Subd. 3. [MINIMUM PARTICIPATION.] (a) A small employer
that has at least 75 percent of its eligible employees who have
not waived coverage participating in a health benefit plan must
be guaranteed coverage from any health carrier participating in
the small employer market. The participation level of eligible
employees must be determined at the initial offering of coverage
and at the renewal date of coverage. A health carrier may not
increase the participation requirements applicable to a small
employer at any time after the small employer has been accepted
for coverage. For the purposes of this subdivision, waiver of
coverage includes only waivers due to coverage under another
group health plan.
(b) A health carrier may require that small employers
contribute a specified minimum percentage toward the cost of the
coverage of eligible employees, so long as the requirement is
uniformly applied for all small employers. For the small
employer plans, a health carrier must require that small
employers contribute at least 50 percent of the cost of the
coverage of eligible employees. The health carrier must impose
this requirement on a uniform basis for both small employer
plans and for all small employers.
(c) Nothing in this section obligates a health carrier to
issue coverage to a small employer that currently offers
coverage through a health benefit plan from another health
carrier, unless the new coverage will replace the existing
coverage and not serve as one of two or more health benefit
plans offered by the employer.
Subd. 4. [UNDERWRITING RESTRICTIONS.] Health carriers may
apply underwriting restrictions to coverage for health benefit
plans for small employers, including any preexisting condition
limitations, only as expressly permitted under this chapter.
Health carriers may collect information relating to the case
characteristics and demographic composition of small employers,
as well as health status and health history information about
employees of small employers. Except as otherwise authorized
for late entrants, preexisting conditions may be excluded by a
health carrier for a period not to exceed 12 months from the
effective date of coverage of an eligible employee or
dependent. When calculating a preexisting condition limitation,
a health carrier shall credit the time period an eligible
employee or dependent was previously covered by qualifying prior
coverage, provided that the individual maintains continuous
coverage. Late entrants may be subject to a preexisting
condition limitation not to exceed 18 months from the effective
date of coverage of the late entrant. Late entrants may also be
excluded from coverage for a period not to exceed 18 months,
provided that if a health carrier imposes an exclusion from
coverage and a preexisting condition limitation, the combined
time period for both the coverage exclusion and preexisting
condition limitation must not exceed 18 months.
Subd. 5. [CANCELLATIONS AND FAILURES TO RENEW.] No health
carrier shall cancel, decline to issue, or fail to renew a
health benefit plan as a result of the claim experience or
health status of the small employer group. A health carrier may
cancel or fail to renew a health benefit plan:
(1) for nonpayment of the required premium;
(2) for fraud or misrepresentation by the small employer,
or, with respect to coverage of an individual eligible employee
or dependent, fraud or misrepresentation by the eligible
employee or dependent, with respect to eligibility for coverage
or any other material fact;
(3) if eligible employee participation during the preceding
calendar year declines to less than 75 percent, subject to the
waiver of coverage provision in subdivision 3;
(4) if the employer fails to comply with the minimum
contribution percentage legally required by the health carrier;
(5) if the health carrier ceases to do business in the
small employer market; or
(6) for any other reasons or grounds expressly permitted by
the respective licensing laws and regulations governing a health
carrier, including, but not limited to, service area
restrictions imposed on health maintenance organizations under
section 62D.03, subdivision 4, paragraph (m), to the extent that
these grounds are not expressly inconsistent with this chapter.
Subd. 6. [MCHA ENROLLEES.] Health carriers shall offer
coverage to any eligible employee or dependent enrolled in MCHA
at the time of the health carrier's issuance or renewal of a
health benefit plan to a small employer. The health benefit
plan must require that the employer permit MCHA enrollees to
enroll in the small employer's health benefit plan as of the
first date of renewal of a health benefit plan occurring on or
after July 1, 1993, or, in the case of a new group, as of the
initial effective date of the health benefit plan. Unless
otherwise permitted by this chapter, health carriers must not
impose any underwriting restrictions, including any preexisting
condition limitations or exclusions, on any eligible employee or
dependent previously enrolled in MCHA and transferred to a
health benefit plan so long as continuous coverage is
maintained, provided that the health carrier may impose any
unexpired portion of a preexisting condition limitation under
the person's MCHA coverage. An MCHA enrollee is not a late
entrant, so long as the enrollee has maintained continuous
coverage.
Sec. 4. [62L.04] [COMPLIANCE REQUIREMENTS.]
Subdivision 1. [APPLICABILITY OF CHAPTER
REQUIREMENTS.] Beginning July 1, 1993, health carriers
participating in the small employer market must offer and make
available any health benefit plan that they offer, including
both of the small employer plans provided in section 62L.05, to
all small employers who satisfy the small employer participation
requirements specified in this chapter. Compliance with these
requirements is required as of the first renewal date of any
small employer group occurring after July 1, 1993. For new
small employer business, compliance is required as of the first
date of offering occurring after July 1, 1993.
Compliance with these requirements is required as of the
first renewal date occurring after July 1, 1994, with respect to
employees of a small employer who had been issued individual
coverage prior to July 1, 1993, administered by the health
carrier on a group basis. Notwithstanding any other law to the
contrary, the health carrier shall terminate any individual
coverage for employees of small employers who satisfy the small
employer participation requirements specified in section 62L.03
and offer to replace it with a health benefit plan. If the
employer elects not to purchase a health benefit plan, the
health carrier must offer all covered employees and dependents
the option of maintaining their current coverage, administered
on an individual basis, or replacement individual coverage.
Small employer and replacement individual coverage provided
under this subdivision must be without application of
underwriting restrictions, provided continuous coverage is
maintained.
Subd. 2. [NEW CARRIERS.] A health carrier entering the
small employer market after July 1, 1993, shall begin complying
with the requirements of this chapter as of the first date of
offering of a health benefit plan to a small employer. A health
carrier entering the small employer market after July 1, 1993,
is considered to be a member of the health coverage reinsurance
association as of the date of the health carrier's initial offer
of a health benefit plan to a small employer.
Sec. 5. [62L.05] [SMALL EMPLOYER PLAN BENEFITS.]
Subdivision 1. [TWO SMALL EMPLOYER PLANS.] Each health
carrier in the small employer market must make available to any
small employer both of the small employer plans described in
subdivisions 2 and 3. Under subdivisions 2 and 3, coinsurance
and deductibles do not apply to child health supervision
services and prenatal services, as defined by section 62A.047.
The maximum out-of-pocket costs for covered services must be
$3,000 per individual and $6,000 per family per year. The
maximum lifetime benefit must be $500,000. The out-of-pocket
cost limits and the deductible amounts provided in subdivision 2
must be adjusted on July 1 every two years, based upon changes
in the consumer price index, as of the end of the previous
calendar year, as determined by the commissioner of commerce.
Adjustments must be in increments of $50 and must not be made
unless at least that amount of adjustment is required.
Subd. 2. [DEDUCTIBLE-TYPE SMALL EMPLOYER PLAN.] The
benefits of the deductible-type small employer plan offered by a
health carrier must be equal to 80 percent of the eligible
charges for health care services, supplies, or other articles
covered under the small employer plan, in excess of an annual
deductible which must be $500 per individual and $1,000 per
family.
Subd. 3. [COPAYMENT-TYPE SMALL EMPLOYER PLAN.] The
benefits of the copayment-type small employer plan offered by a
health carrier must be equal to 80 percent of the eligible
charges for health care services, supplies, or other articles
covered under the small employer plan, in excess of the
following copayments:
(1) $15 per outpatient visit, other than to a hospital
outpatient department or emergency room, urgent care center, or
similar facility;
(2) $15 per day for the services of a home health agency or
private duty registered nurse;
(3) $50 per outpatient visit to a hospital outpatient
department or emergency room, urgent care center, or similar
facility; and
(4) $300 per inpatient admission to a hospital.
Subd. 4. [BENEFITS.] The medical services and supplies
listed in this subdivision are the benefits that must be covered
by the small employer plans described in subdivisions 2 and 3:
(1) inpatient and outpatient hospital services, excluding
services provided for the diagnosis, care, or treatment of
chemical dependency or a mental illness or condition, other than
those conditions specified in clauses (10), (11), and (12);
(2) physician and nurse practitioner services for the
diagnosis or treatment of illnesses, injuries, or conditions;
(3) diagnostic X-rays and laboratory tests;
(4) ground transportation provided by a licensed ambulance
service to the nearest facility qualified to treat the
condition, or as otherwise required by the health carrier;
(5) services of a home health agency if the services
qualify as reimbursable services under Medicare and are directed
by a physician or qualify as reimbursable under the health
carrier's most commonly sold health plan for insured group
coverage;
(6) services of a private duty registered nurse if
medically necessary, as determined by the health carrier;
(7) the rental or purchase, as appropriate, of durable
medical equipment, other than eyeglasses and hearing aids;
(8) child health supervision services up to age 18, as
defined in section 62A.047;
(9) maternity and prenatal care services, as defined in
sections 62A.041 and 62A.047;
(10) inpatient hospital and outpatient services for the
diagnosis and treatment of certain mental illnesses or
conditions, as defined by the International Classification of
Diseases-Clinical Modification (ICD-9-CM), seventh edition
(1990) and as classified as ICD-9 codes 295 to 299;
(11) ten hours per year of outpatient mental health
diagnosis or treatment for illnesses or conditions not described
in clause (10);
(12) 60 hours per year of outpatient treatment of chemical
dependency; and
(13) 50 percent of eligible charges for prescription drugs,
up to a separate annual maximum out-of-pocket expense of $1,000
per individual for prescription drugs, and 100 percent of
eligible charges thereafter.
Subd. 5. [PLAN VARIATIONS.] (a) No health carrier shall
offer to a small employer a health benefit plan that differs
from the two small employer plans described in subdivisions 1 to
4, unless the health benefit plan complies with all provisions
of chapters 62A, 62C, 62D, 62E, 62H, and 64B that otherwise
apply to the health carrier, except as expressly permitted by
paragraph (b).
(b) As an exception to paragraph (a), a health benefit plan
is deemed to be a small employer plan and to be in compliance
with paragraph (a) if it differs from one of the two small
employer plans described in subdivisions 1 to 4 only by
providing benefits in addition to those described in subdivision
4, provided that the health care benefit plan has an actuarial
value that exceeds the actuarial value of the benefits described
in subdivision 4 by no more than two percent. "Benefits in
addition" means additional units of a benefit listed in
subdivision 4 or one or more benefits not listed in subdivision
4.
Subd. 6. [CHOICE PRODUCTS EXCEPTION.] Nothing in
subdivision 1 prohibits a health carrier from offering a small
employer plan which provides for different benefit coverages
based on whether the benefit is provided through a primary
network of providers or through a secondary network of providers
so long as the benefits provided in the primary network equal
the benefit requirements of the small employer plan as described
in this section. For purposes of products issued under this
subdivision, out-of-pocket costs in the secondary network may
exceed the out-of-pocket limits described in subdivision 1.
Subd. 7. [BENEFIT EXCLUSIONS.] No medical, hospital, or
other health care benefits, services, supplies, or articles not
expressly specified in subdivision 4 are required to be included
in a small employer plan. Nothing in subdivision 4 restricts
the right of a health carrier to restrict coverage to those
services, supplies, or articles which are medically necessary.
Health carriers may exclude a benefit, service, supply, or
article not expressly specified in subdivision 4 from a small
employer plan.
Subd. 8. [CONTINUATION COVERAGE.] Small employer plans
must include the continuation of coverage provisions required by
the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA), Public Law Number 99-272, as amended through December
31, 1991, and by state law.
Subd. 9. [DEPENDENT COVERAGE.] Other state law and rules
applicable to health plan coverage of newborn infants, dependent
children who do not reside with the eligible employee,
handicapped children and dependents, and adopted children apply
to a small employer plan. Health benefit plans that provide
dependent coverage must define "dependent" no more restrictively
than the definition provided in section 62L.02.
Subd. 10. [MEDICAL EXPENSE REIMBURSEMENT.] Health carriers
may reimburse or pay for medical services, supplies, or articles
provided under a small employer plan in accordance with the
health carrier's provider contract requirements including, but
not limited to, salaried arrangements, capitation, the payment
of usual and customary charges, fee schedules, discounts from
fee-for-service, per diems, diagnostic-related groups (DRGs),
and other payment arrangements. Nothing in this chapter
requires a health carrier to develop, implement, or change its
provider contract requirements for a small employer plan.
Coinsurance, deductibles, out-of-pocket maximums, and maximum
lifetime benefits must be calculated and determined in
accordance with each health carrier's standard business
practices.
Subd. 11. [PLAN DESIGN.] Notwithstanding any other law,
regulation, or administrative interpretation to the contrary,
health carriers may offer small employer plans through any
provider arrangement, including, but not limited to, the use of
open, closed, or limited provider networks. A health carrier
may only use product and network designs currently allowed under
existing statutory requirements. The provider networks offered
by any health carrier may be specifically designed for the small
employer market and may be modified at the carrier's election so
long as all otherwise applicable regulatory requirements are
met. Health carriers may use professionally recognized provider
standards of practice when they are available, and may use
utilization management practices otherwise permitted by law,
including, but not limited to, second surgical opinions, prior
authorization, concurrent and retrospective review, referral
authorizations, case management, and discharge planning. A
health carrier may contract with groups of providers with
respect to health care services or benefits, and may negotiate
with providers regarding the level or method of reimbursement
provided for services rendered under a small employer plan.
Subd. 12. [DEMONSTRATION PROJECTS.] Nothing in this
chapter prohibits a health maintenance organization from
offering a demonstration project authorized under section 62D.30.
The commissioner of health may approve a demonstration project
which offers benefits that do not meet the requirements of a
small employer plan if the commissioner finds that the
requirements of section 62D.30 are otherwise met.
Sec. 6. [62L.06] [DISCLOSURE OF UNDERWRITING RATING
PRACTICES.]
When offering or renewing a health benefit plan, health
carriers shall disclose in all solicitation and sales materials:
(1) the case characteristics and other rating factors used
to determine initial and renewal rates;
(2) the extent to which premium rates for a small employer
are established or adjusted based upon actual or expected
variation in claim experience;
(3) provisions concerning the health carrier's right to
change premium rates and the factors other than claim experience
that affect changes in premium rates;
(4) provisions relating to renewability of coverage;
(5) the use and effect of any preexisting condition
provisions, if permitted; and
(6) the application of any provider network limitations and
their effect on eligibility for benefits.
Sec. 7. [62L.07] [SMALL EMPLOYER REQUIREMENTS.]
Subdivision 1. [VERIFICATION OF ELIGIBILITY.] Health
benefit plans must require that small employers offering a
health benefit plan maintain information verifying the
continuing eligibility of the employer, its employees, and their
dependents, and provide the information to health carriers on a
quarterly basis or as reasonably requested by the health carrier.
Subd. 2. [WAIVERS.] Health benefit plans must require that
small employers offering a health benefit plan maintain written
documentation of a waiver of coverage by an eligible employee or
dependent and provide the documentation to the health carrier
upon reasonable request.
Sec. 8. [62L.08] [RESTRICTIONS RELATING TO PREMIUM RATES.]
Subdivision 1. [RATE RESTRICTIONS.] Premium rates for all
health benefit plans sold or issued to small employers are
subject to the restrictions specified in this section.
Subd. 2. [GENERAL PREMIUM VARIATIONS.] Beginning July 1,
1993, each health carrier must offer premium rates to small
employers that are no more than 25 percent above and no more
than 25 percent below the index rate charged to small employers
for the same or similar coverage, adjusted pro rata for rating
periods of less than one year. The premium variations permitted
by this subdivision must be based only on health status, claims
experience, industry of the employer, and duration of coverage
from the date of issue. For purposes of this subdivision,
health status includes refraining from tobacco use or other
actuarially valid lifestyle factors associated with good health,
provided that the lifestyle factor and its effect upon premium
rates have been determined to be actuarially valid and approved
by the commissioner.
Subd. 3. [AGE-BASED PREMIUM VARIATIONS.] Beginning July 1,
1993, each health carrier may offer premium rates to small
employers that vary based upon the ages of the eligible
employees and dependents of the small employer only as provided
in this subdivision. In addition to the variation permitted by
subdivision 2, each health carrier may use an additional premium
variation based upon age of up to plus or minus 50 percent of
the index rate.
Subd. 4. [GEOGRAPHIC PREMIUM VARIATIONS.] A health carrier
may request approval by the commissioner to establish no more
than three geographic regions and to establish separate index
rates for each region, provided that the index rates do not vary
between any two regions by more than twenty percent. The
commissioner may grant approval if the following conditions are
met:
(1) the geographic regions must be applied uniformly by the
health carrier;
(2) one geographic region must be based on the
Minneapolis/St. Paul metropolitan area;
(3) if one geographic region is rural, the index rate for
the rural region must not exceed the index rate for the
Minneapolis/St. Paul metropolitan area;
(4) the health carrier provides actuarial justification
acceptable to the commissioner for the proposed geographic
variations in index rates, establishing that the variations are
based upon differences in the cost to the health carrier of
providing coverage.
Subd. 5. [GENDER-BASED RATES PROHIBITED.] Beginning July
1, 1993, no health carrier may determine premium rates through a
method that is in any way based upon the gender of eligible
employees or dependents.
Subd. 6. [RATE CELLS PERMITTED.] Health carriers may use
rate cells and must file with the commissioner the rate cells
they use. Rate cells must be based on the number of adults and
children covered under the policy and may reflect the
availability of Medicare coverage.
Subd. 7. [INDEX AND PREMIUM RATE DEVELOPMENT.] In
developing its index rates and premiums, a health carrier may
take into account only the following factors:
(1) actuarially valid differences in benefit designs of
health benefit plans;
(2) actuarially valid differences in the rating factors
permitted in subdivisions 2 and 3;
(3) actuarially valid geographic variations if approved by
the commissioner as provided in subdivision 4.
Subd. 8. [FILING REQUIREMENT.] No later than July 1, 1993,
and each year thereafter, a health carrier that offers, sells,
issues, or renews a health benefit plan for small employers
shall file with the commissioner the index rates and must
demonstrate that all rates shall be within the rating
restrictions defined in this chapter. Such demonstration must
include the allowable range of rates from the index rates and a
description of how the health carrier intends to use demographic
factors including case characteristics in calculating the
premium rates.
Subd. 9. [EFFECT OF ASSESSMENTS.] Premium rates must
comply with the rating requirements of this section,
notwithstanding the imposition of any assessments or premiums
paid by health carriers as provided under sections 62L.13 to
62L.22.
Subd. 10. [RATING REPORT.] Beginning January 1, 1995, and
annually thereafter, the commissioners of health and commerce
shall provide a joint report to the legislature on the effect of
the rating restrictions required by this section and the
appropriateness of proceeding with additional rate reform. Each
report must include an analysis of the availability of health
care coverage due to the rating reform, the equitable and
appropriate distribution of risk and associated costs, the
effect on the self-insurance market, and any resulting or
anticipated change in health plan design and market share and
availability of health carriers.
Sec. 9. [62L.09] [CESSATION OF SMALL EMPLOYER BUSINESS.]
Subdivision 1. [NOTICE TO COMMISSIONER.] A health carrier
electing to cease doing business in the small employer market
shall notify the commissioner 180 days prior to the effective
date of the cessation. The cessation of business does not
include the failure of a health carrier to offer or issue new
business in the small employer market or continue an existing
product line, provided that a health carrier does not terminate,
cancel, or fail to renew its current small employer business or
other product lines.
Subd. 2. [NOTICE TO EMPLOYERS.] A health carrier electing
to cease doing business in the small employer market shall
provide 120 days' written notice to each small employer covered
by a health benefit plan issued by the health carrier. A health
carrier that ceases to write new business in the small employer
market shall continue to be governed by this chapter with
respect to continuing small employer business conducted by the
carrier.
Subd. 3. [REENTRY PROHIBITION.] A health carrier that
ceases to do business in the small employer market after July 1,
1993, is prohibited from writing new business in the small
employer market in this state for a period of five years from
the date of notice to the commissioner. This subdivision
applies to any health maintenance organization that ceases to do
business in the small employer market in one service area with
respect to that service area only. Nothing in this subdivision
prohibits an affiliated health maintenance organization from
continuing to do business in the small employer market in that
same service area.
Subd. 4. [CONTINUING ASSESSMENT LIABILITY.] A health
carrier that ceases to do business in the small employer market
remains liable for assessments levied by the association as
provided in section 62L.22.
Sec. 10. [62L.10] [SUPERVISION BY COMMISSIONER.]
Subdivision 1. [REPORTS.] A health carrier doing business
in the small employer market shall file by April 1 of each year
an annual actuarial opinion with the commissioner certifying
that the health carrier complied with the underwriting and
rating requirements of this chapter during the preceding year
and that the rating methods used by the health carrier were
actuarially sound. A health carrier shall retain a copy of the
opinion at its principal place of business.
Subd. 2. [RECORDS.] A health carrier doing business in the
small employer market shall maintain at its principal place of
business a complete and detailed description of its rating
practices and renewal underwriting practices, including
information and documentation that demonstrate that its rating
methods and practices are based upon commonly accepted actuarial
assumptions and are in accordance with sound actuarial
principles.
Subd. 3. [SUBMISSIONS TO COMMISSIONER.] Subsequent to the
annual filing, the commissioner may request information and
documentation from a health carrier describing its rating
practices and renewal underwriting practices, including
information and documentation that demonstrates that a health
carrier's rating methods and practices are in accordance with
sound actuarial principles and the requirements of this
chapter. Except in cases of violations of this chapter or of
another chapter, information received by the commissioner as
provided under this subdivision is nonpublic.
Subd. 4. [REVIEW OF PREMIUM RATES.] The commissioner shall
regulate premium rates charged or proposed to be charged by all
health carriers in the small employer market under section
62A.02. The commissioner of health has, with respect to
carriers under that commissioner's jurisdiction, all of the
powers of the commissioner of commerce under that section.
Subd. 5. [TRANSITIONAL PRACTICES.] The commissioner shall
disapprove index rates, premium variations, or other practices
of a health carrier if they violate the spirit of this chapter
and are the result of practices engaged in by the health carrier
between the date of final enactment of this act and July 1,
1993, where the practices engaged in were carried out for the
purpose of evading the spirit of this chapter. Each health
carrier shall report to the commissioner, within 30 days and on
a form prescribed by the commissioner, each cancellation,
nonrenewal, or other termination of coverage of a small employer
between the date of final enactment of this act and June 30,
1993. The health carrier shall provide any related information
requested by the commissioner within the time specified in the
request. Any health carrier that engages in a practice of
terminating or inducing termination of coverage of small
employers in order to evade the effects of this act, is guilty
of an unfair method of competition and an unfair or deceptive
act or practice in the business of insurance and is subject to
the remedies provided in sections 72A.17 to 72A.32.
Sec. 11. [62L.11] [PENALTIES AND ENFORCEMENT.]
Subdivision 1. [DISCIPLINARY PROCEEDINGS.] The
commissioner may, by order, suspend or revoke a health carrier's
license or certificate of authority and impose a monetary
penalty not to exceed $25,000 for each violation of this
chapter, including the failure to pay an assessment required by
section 62L.22. The notice, hearing, and appeal procedures
specified in section 60A.051 or 62D.16, as appropriate, apply to
the order. The order is subject to judicial review as provided
under chapter 14.
Subd. 2. [ENFORCEMENT POWERS.] The commissioners of health
and commerce each has for purposes of this chapter all of each
commissioner's respective powers under other chapters that are
applicable to their respective duties under this chapter.
Sec. 12. [62L.12] [PROHIBITED PRACTICES.]
Subdivision 1. [PROHIBITION ON ISSUANCE OF INDIVIDUAL
POLICIES.] A health carrier operating in the small employer
market shall not knowingly offer, issue, or renew an individual
policy, subscriber contract, or certificate to an eligible
employee or dependent of a small employer that meets the minimum
participation requirements defined in section 62L.03,
subdivision 3, except as authorized under subdivision 2.
Subd. 2. [EXCEPTIONS.] (a) A health carrier may sell,
issue, or renew individual conversion policies to eligible
employees and dependents otherwise eligible for conversion
coverage under section 62D.104 as a result of leaving a health
maintenance organization's service area.
(b) A health carrier may sell, issue, or renew individual
conversion policies to eligible employees and dependents
otherwise eligible for conversion coverage as a result of the
expiration of any continuation of group coverage required under
sections 62A.146, 62A.17, 62A.21, 62C.142, 62D.101, and 62D.105.
(c) A health carrier may sell, issue, or renew conversion
policies under section 62E.16 to eligible employees and
dependents.
(d) A health carrier may sell, issue, or renew individual
continuation policies to eligible employees and dependents as
required.
(e) A health carrier may sell, issue, or renew individual
coverage if the coverage is appropriate due to an unexpired
preexisting condition limitation or exclusion applicable to the
person under the employer's group coverage or due to the
person's need for health care services not covered under the
employer's group policy.
(f) A health carrier may sell, issue, or renew an
individual policy, with the prior consent of the commissioner,
if the individual has elected to buy the individual coverage not
as part of a general plan to substitute individual coverage for
group coverage nor as a result of any violation of subdivision 3
or 4.
(g) Nothing in this subdivision relieves a health carrier
of any obligation to provide continuation or conversion coverage
otherwise required under federal or state law.
Subd. 3. [AGENT'S LICENSURE.] An agent licensed under
chapter 60A or section 62C.17 who knowingly and willfully breaks
apart a small group for the purpose of selling individual
policies to eligible employees and dependents of a small
employer that meets the participation requirements of section
62L.03, subdivision 3, is guilty of an unfair trade practice and
subject to the revocation or suspension of license under section
60A.17, subdivision 6c, or 62C.17. The action must be by order
and subject to the notice, hearing, and appeal procedures
specified in section 60A.17, subdivision 6d. The action of the
commissioner is subject to judicial review as provided under
chapter 14.
Subd. 4. [EMPLOYER PROHIBITION.] A small employer shall
not encourage or direct an employee or applicant to:
(1) refrain from filing an application for health coverage
when other similarly situated employees may file an application
for health coverage;
(2) file an application for health coverage during initial
eligibility for coverage, the acceptance of which is contingent
on health status, when other similarly situated employees may
apply for health coverage, the acceptance of which is not
contingent on health status;
(3) seek coverage from another carrier, including, but not
limited to, MCHA; or
(4) cause coverage to be issued on different terms because
of the health status or claims experience of that person or the
person's dependents.
Subd. 5. [SALE OF OTHER PRODUCTS.] A health carrier shall
not condition the offer, sale, issuance, or renewal of a health
benefit plan on the purchase by a small employer of other
insurance products offered by the health carrier or a subsidiary
or affiliate of the health carrier, including, but not limited
to, life, disability, property, and general liability insurance.
This prohibition does not apply to insurance products offered as
a supplement to a health maintenance organization plan,
including, but not limited to, supplemental benefit plans under
section 62D.05, subdivision 6.
Sec. 13. [62L.13] [REINSURANCE ASSOCIATION.]
Subdivision 1. [CREATION.] The health coverage reinsurance
association is established as a nonprofit corporation. All
health carriers in the small employer market shall be and remain
members of the association as a condition of their authority to
transact business.
Subd. 2. [PURPOSE.] The association is established to
provide for the fair and equitable transfer of risk associated
with participation by a health carrier in the small employer
market to a private reinsurance pool established and maintained
by the association.
Subd. 3. [EXEMPTIONS.] The association, its transactions,
and all property owned by it are exempt from taxation under the
laws of this state or any of its subdivisions, including, but
not limited to, income tax, sales tax, use tax, and property tax.
The association may seek exemption from payment of all fees and
taxes levied by the federal government. Except as otherwise
provided in this chapter, the association is not subject to the
provisions of chapters 13, 14, 60A, 62A to 62H, and section
471.705. The association is not a public employer and is not
subject to the provisions of chapters 179A and 353. Health
carriers who are members of the association are exempt from the
provisions of sections 325D.49 to 325D.66 in the performance of
their duties as members of the association.
Subd. 4. [POWERS OF ASSOCIATION.] The association may
exercise all of the powers of a corporation formed under chapter
317A, including, but not limited to, the authority to:
(1) establish operating rules, conditions, and procedures
relating to the reinsurance of members' risks;
(2) assess members in accordance with the provisions of
this section and to make advance interim assessments as may be
reasonable and necessary for organizational and interim
operating expenses;
(3) sue and be sued, including taking any legal action
necessary to recover any assessments;
(4) enter into contracts necessary to carry out the
provisions of this chapter;
(5) establish operating, administrative, and accounting
procedures for the operation of the association; and
(6) borrow money against the future receipt of premiums and
assessments up to the amount of the previous year's assessment,
with the prior approval of the commissioner.
The provisions of this chapter govern if the provisions of
chapter 317A conflict with this chapter. The association shall
adopt bylaws and shall be governed in accordance with this
chapter and chapter 317A.
Subd. 5. [SUPERVISION BY COMMISSIONER.] The commissioner
of commerce shall supervise the association in accordance with
this chapter. The commissioner of commerce may examine the
association. The association's reinsurance policy forms, its
contracts, its premium rates, and its assessments are subject to
the approval of the commissioner of commerce. The association's
policy forms, contracts, and premium rates are deemed approved
if not disapproved by the commissioner of commerce within 60
days after the date of filing them with the commissioner of
commerce. The association's assessments are deemed approved if
not disapproved by the commissioner of commerce within 15
business days after filing them with the commissioner of
commerce. The association shall notify the commissioner of all
association or board meetings, and the commissioner or the
commissioner's designee may attend all association or board
meetings. The association shall file an annual report with the
commissioner on or before July 1 of each year, beginning July 1,
1994, describing its activities during the preceding calendar
year. The report must include a financial report and a summary
of claims paid by the association. The annual report must be
available for public inspection.
Sec. 14. [62L.14] [BOARD OF DIRECTORS.]
Subdivision 1. [COMPOSITION OF BOARD.] The association
shall exercise its powers through a board of 13 directors. Four
members must be public members appointed by the commissioner.
The public members must not be employees of or otherwise
affiliated with any member of the association. The nonpublic
members of the board must be representative of the membership of
the association and must be officers, employees, or directors of
the members during their term of office. No member of the
association may have more than three members of the board.
Directors are automatically removed if they fail to satisfy this
qualification.
Subd. 2. [ELECTION OF BOARD.] On or before July 1, 1992,
the commissioner shall appoint an interim board of directors of
the association who shall serve through the first annual meeting
of the members and for the next two years. Except for the
public members, the commissioner's initial appointments must be
equally apportioned among the following three categories:
accident and health insurance companies, nonprofit health
service plan corporations, and health maintenance organizations.
Thereafter, members of the association shall elect the board of
directors in accordance with this chapter and the bylaws of the
association, subject to approval by the commissioner. Members
of the association may vote in person or by proxy. The public
members shall continue to be appointed by the commissioner.
Subd 3. [TERM OF OFFICE.] The first annual meeting must be
held by December 1, 1992. After the initial two-year period,
each director shall serve a three-year term, except that the
board shall make appropriate arrangements to stagger the terms
of the board members so that approximately one-third of the
terms expire each year. Each director shall hold office until
expiration of the director's term or until the director's
successor is duly elected or appointed and qualified, or until
the director's death, resignation, or removal.
Subd. 4. [RESIGNATION AND REMOVAL.] A director may resign
at any time by giving written notice to the commissioner. The
resignation takes effect at the time the resignation is received
unless the resignation specifies a later date. A nonpublic
director may be removed at any time, with cause, by the members.
Subd. 5. [QUORUM.] A majority of the members of the board
of directors constitutes a quorum for the transaction of
business. If a vacancy exists by reason of death, resignation,
or otherwise, a majority of the remaining directors constitutes
a quorum.
Subd. 6. [DUTIES OF DIRECTORS.] The board of directors
shall adopt or amend the association's bylaws. The bylaws may
contain any provision for the purpose of administering the
association that is not inconsistent with this chapter. The
board shall manage the association in furtherance of its
purposes and as provided in its bylaws. On or before January 1,
1993, the board or the interim board shall develop a plan of
operation and reasonable operating rules to assure the fair,
reasonable, and equitable administration of the association.
The plan of operation must include the development of procedures
for selecting an administering carrier, establishment of the
powers and duties of the administering carrier, and
establishment of procedures for collecting assessments from
members, including the imposition of interest penalties for late
payments of assessments. The plan of operation must be
submitted to the commissioner for review and approval and must
be submitted to the members for approval at the first meeting of
the members. The board of directors may subsequently amend,
change, or revise the plan of operation without approval by the
members.
Subd. 7. [COMPENSATION.] Members of the board may be
reimbursed by the association for reasonable and necessary
expenses incurred by them in performing their duties as
directors, but shall not otherwise be compensated by the
association for their services.
Subd. 8. [OFFICERS.] The board may elect officers and
establish committees as provided in the bylaws of the
association. Officers have the authority and duties in the
management of the association as prescribed by the bylaws and
determined by the board of directors.
Subd. 9. [MAJORITY VOTE.] Approval by a majority of the
board members present is required for any action of the board.
The majority vote must include one vote from a board member
representing an accident and health insurance company, one vote
from a board member representing a health service plan
corporation, one vote from a board member representing a health
maintenance organization, and one vote from a public member.
Sec. 15. [62L.15] [MEMBERS.]
Subdivision 1. [ANNUAL MEETING.] The association shall
conduct an annual meeting of the members of the association for
the purpose of electing directors and transacting any other
appropriate business of the membership of the association. The
board shall determine the date, time, and place of the annual
meeting. The association shall conduct its first annual member
meeting on or before December 1, 1992.
Subd. 2. [SPECIAL MEETINGS.] Special meetings of the
members must be held whenever called by any three of the
directors. At least two categories must be represented among
the directors calling a special meeting of the members. The
categories are accident and health insurance companies,
nonprofit health service plan corporations, and health
maintenance organizations. Special meetings of the members must
be held at a time and place designated in the notice of the
meeting.
Subd. 3. [MEMBER VOTING.] Each member's vote is a weighted
vote and is based on each member's total insurance premiums,
subscriber contract charges, health maintenance contract
payments, or other health benefit plan revenue derived from, or
on behalf of, small employers during the preceding calendar
year, as determined by the board and approved by the
commissioner, based on annual statements and other reports
considered necessary by the board of directors.
Subd. 4. [INITIAL MEMBER MEETING.] At least 60 days before
the first annual meeting of the members, the commissioner shall
give written notice to all members of the time and place of the
member meeting. The members shall elect directors representing
the members, approve the initial plan of operation of the
association, and transact any other appropriate business of the
membership of the association.
Subd. 5. [MEMBER COMPLIANCE.] All members shall comply
with the provisions of this chapter, the association's bylaws,
the plan of operation developed by the board of directors, and
any other operating, administrative, or other procedures
established by the board of directors for the operation of the
association. The board may request the commissioner to secure
compliance with this chapter through the use of any enforcement
action otherwise available to the commissioner.
Sec. 16. [62L.16] [ADMINISTRATION OF ASSOCIATION.]
Subdivision 1. [ADMINISTRATOR.] The association shall
contract with a qualified entity to operate and administer the
association. If there is no available qualified entity, or in
the event of a termination under subdivision 2, the association
may directly operate and administer the reinsurance program.
The administrator shall perform all administrative functions
required by this chapter. The board of directors shall develop
administrative functions required by this chapter and written
criteria for the selection of an administrator. The
administrator must be selected by the board of directors,
subject to approval by the commissioner.
Subd. 2. [TERM.] The administrator shall serve for a
period of three years, unless the administrator requests the
termination of its contract and the termination is approved by
the board of directors. The board of directors shall approve or
deny a request to terminate within 90 days of its receipt after
consultation with the commissioner. A failure to make a final
decision on a request to terminate within 90 days is considered
an approval.
Subd. 3. [DUTIES OF ADMINISTRATOR.] The association shall
enter into a written contract with the administrator to carry
out its duties and responsibilities. The administrator shall
perform all administrative functions required by this chapter
including the:
(1) preparation and submission of an annual report to the
commissioner;
(2) preparation and submission of monthly reports to the
board of directors;
(3) calculation of all assessments and the notification
thereof of members;
(4) payment of claims to health carriers following the
submission by health carriers of acceptable claim documentation;
and
(5) provision of claim reports to health carriers as
determined by the board of directors.
Subd. 4. [BID PROCESS.] The association shall issue a
request for proposal for administration of the reinsurance
association and shall solicit responses from health carriers
participating in the small employer market and from other
qualified entities. Methods of compensation of the
administrator must be a part of the bid process. The
administrator shall substantiate its cost reports consistent
with generally accepted accounting principles.
Subd. 5. [AUDITS.] The board of directors may conduct
periodic audits to verify the accuracy of financial data and
reports submitted by the administrator.
Subd. 6. [RECORDS OF ASSOCIATION.] The association shall
maintain appropriate records and documentation relating to the
activities of the association. All individual
patient-identifying claims data and information are confidential
and not subject to disclosure of any kind, except that a health
carrier shall have access upon request to individual claims data
relating to eligible employees and dependents covered by a
health benefit plan issued by the health carrier. All records,
documents, and work product prepared by the association or by
the administrator for the association are the property of the
association. The commissioner shall have access to the data for
the purposes of carrying out the supervisory functions provided
for in this chapter.
Sec. 17. [62L.17] [PARTICIPATION IN THE REINSURANCE
ASSOCIATION.]
Subdivision 1. [MINIMUM STANDARDS.] The board of directors
or the interim board shall establish minimum claim processing
and managed care standards which must be met by a health carrier
in order to reinsure business.
Subd. 2. [PARTICIPATION.] A health carrier may elect to
not participate in the reinsurance association through
transferring risk only after filing an application with the
commissioner of commerce. The commissioner may approve the
application after consultation with the board of directors. In
determining whether to approve an application, the commissioner
shall consider whether the health carrier meets the following
standards:
(1) demonstration by the health carrier of a substantial
and established market presence;
(2) demonstrated experience in the small group market and
history of rating and underwriting small employer groups;
(3) commitment to comply with the requirements of this
chapter for small employers in the state or its service area;
and
(4) financial ability to assume and manage the risk of
enrolling small employer groups without the protection of the
reinsurance.
Initial application for nonparticipation must be filed with
the commissioner no later than February 1993. The commissioner
shall make the determination and notify the carrier no later
than April 15, 1993.
Subd. 3. [LENGTH OF PARTICIPATION.] A health carrier's
initial election is for a period of two years. Subsequent
elections of participation are for five-year periods.
Subd. 4. [APPEAL.] A health carrier whose application for
nonparticipation has been rejected by the commissioner may
appeal the decision. The association may also appeal a decision
of the commissioner, if approved by a two-thirds majority of the
board. Chapter 14 applies to all appeals.
Subd. 5. [ANNUAL CERTIFICATION.] A health carrier that has
received approval to not participate in the reinsurance
association shall annually certify to the commissioner on or
before December 1 that it continues to meet the standards
described in subdivision 2.
Subd. 6. [SUBSEQUENT ELECTION.] Election to participate in
the reinsurance association must occur on or before December 31
of each year. If after a period of nonparticipation, the
nonparticipating health carrier subsequently elects to
participate in the reinsurance association, the health carrier
retains the risk it assumed when not participating in the
association.
If a participating health carrier subsequently elects to
not participate in the reinsurance association, the health
carrier shall cease reinsuring through the association all of
its small employer business and is liable for any assessment
described in section 62L.22 which has been prorated based on the
business covered by the reinsurance mechanism during the year of
the assessment.
Subd. 7. [ELECTION MODIFICATION.] The commissioner, after
consultation with the board, may authorize a health carrier to
modify its election to not participate in the association at any
time, if the risk from the carrier's existing small employer
business jeopardizes the financial condition of the health
carrier. If the commissioner authorizes a health carrier to
participate in the association, the health carrier shall retain
the risk it assumed while not participating in the association.
This election option may not be exercised if the health carrier
is in rehabilitation.
Sec. 18. [62L.18] [CEDING OF RISK.]
Subdivision 1. [PROSPECTIVE CEDING.] For health benefit
plans issued on or after July 1, 1993, all health carriers
participating in the association may prospectively reinsure an
employee or dependent within a small employer group and entire
employer groups of seven or fewer eligible employees. A health
carrier must determine whether to reinsure an employee or
dependent or entire group within 60 days of the commencement of
the coverage of the small employer and must notify the
association during that time period.
Subd. 2. [ELIGIBILITY FOR REINSURANCE.] A health carrier
may not reinsure existing small employer business through the
association. A health carrier may reinsure an employee or
dependent who previously had coverage from MCHA who is now
eligible for coverage through the small employer group at the
time of enrollment as defined in section 62L.03, subdivision 6.
A health carrier may not reinsure individuals who have existing
individual health care coverage with that health carrier upon
replacement of the individual coverage with group coverage as
provided in section 62L.04, subdivision 1.
Subd. 3. [REINSURANCE TERMINATION.] A health carrier may
terminate reinsurance through the association for an employee or
dependent or entire group on the anniversary date of coverage
for the small employer. If the health carrier terminates the
reinsurance, the health carrier may not subsequently reinsure
the individual or entire group.
Subd. 4. [CONTINUING CARRIER RESPONSIBILITY.] A health
carrier transferring risk to the association is completely
responsible for administering its health benefit plans. A
health carrier shall apply its case management and claim
processing techniques consistently between reinsured and
nonreinsured business. Small employers, eligible employees, and
dependents shall not be notified that the health carrier has
reinsured their coverage through the association.
Sec. 19. [62L.19] [ALLOWED REINSURANCE BENEFITS.]
A health carrier may reinsure through the association only
those benefits described in section 62L.05.
Sec. 20. [62L.20] [TRANSFER OF RISK.]
Subdivision 1. [REINSURANCE THRESHOLD.] A health carrier
participating in the association may transfer up to 90 percent
of the risk above a reinsurance threshold of $5,000 of eligible
charges resulting from issuance of a health benefit plan to an
eligible employee or dependent of a small employer group whose
risk has been prospectively ceded to the association. If the
eligible charges exceed $50,000, a health carrier participating
in the association may transfer 100 percent of the risk each
policy year not to exceed 12 months.
Satisfaction of the reinsurance threshold must be
determined by the board of directors based on eligible charges.
The board may establish an audit process to assure consistency
in the submission of charge calculations by health carriers to
the association.
Subd. 2. [CONVERSION FACTORS.] The board shall establish a
standardized conversion table for determining equivalent charges
for health carriers that use alternative provider reimbursement
methods. If a health carrier establishes to the board that the
carrier's conversion factor is equivalent to the association's
standardized conversion table, the association shall accept the
health carrier's conversion factor.
Subd. 3. [BOARD AUTHORITY.] The board shall establish
criteria for changing the threshold amount or retention
percentage. The board shall review the criteria on an annual
basis. The board shall provide the members with an opportunity
to comment on the criteria at the time of the annual review.
Subd. 4. [NOTIFICATION OF TRANSFER OF RISK.] A
participating health carrier must notify the association, within
90 days of receipt of proof of loss, of satisfaction of a
reinsurance threshold. After satisfaction of the reinsurance
threshold, a health carrier continues to be liable to its
providers, eligible employees, and dependents for payment of
claims in accordance with the health carrier's health benefit
plan. Health carriers shall not pend or delay payment of
otherwise valid claims due to the transfer of risk to the
association.
Subd. 5. [PERIODIC STUDIES.] The board shall, on a
biennial basis, prepare and submit a report to the commissioner
of commerce on the effect of the reinsurance association on the
small employer market. The first study must be presented to the
commissioner no later than January 1, 1995, and must
specifically address whether there has been disruption in the
small employer market due to unnecessary churning of groups for
the purpose of obtaining reinsurance and whether it is
appropriate for health carriers to transfer the risk of their
existing small group business to the reinsurance association.
After two years of operation, the board shall study both the
effect of ceding both individuals and entire small groups of
seven or fewer eligible employees to the reinsurance association
and the composition of the board and determine whether the
initial appointments reflect the types of health carriers
participating in the reinsurance association and whether the
voting power of members of the association should be weighted
and recommend any necessary changes.
Sec. 21. [62L.21] [REINSURANCE PREMIUMS.]
Subdivision 1. [MONTHLY PREMIUM.] A health carrier ceding
an individual to the reinsurance association shall be assessed a
monthly reinsurance coverage premium that is 5.0 times the
adjusted average market price. A health carrier ceding an
entire group to the reinsurance association shall be assessed a
monthly reinsurance coverage premium that is 1.5 times the
adjusted average market price. The adjusted average market
premium price must be established by the board of directors in
accordance with its plan of operation. The board may consider
benefit levels in establishing the reinsurance coverage premium.
Subd. 2. [ADJUSTMENT OF PREMIUM RATES.] The board of
directors shall establish operating rules to allocate
adjustments to the reinsurance premium charge of no more than
minus 25 percent of the monthly reinsurance premium for health
carriers that can demonstrate administrative efficiencies and
cost-effective handling of equivalent risks. The adjustment
must be made annually on a retrospective basis. The operating
rules must establish objective and measurable criteria which
must be met by a health carrier in order to be eligible for an
adjustment. These criteria must include consideration of
efficiency attributable to case management, but not
consideration of such factors as provider discounts.
Subd. 3. [LIABILITY FOR PREMIUM.] A health carrier is
liable for the cost of the reinsurance premium and may not
directly charge the small employer for the costs. The
reinsurance premium may be reflected only in the rating factors
permitted in section 62L.08, as provided in section 62L.08,
subdivision 10.
Sec. 22. [62L.22] [ASSESSMENTS.]
Subdivision 1. [ASSESSMENT BY BOARD.] For the purpose of
providing the funds necessary to carry out the purposes of the
association, the board of directors shall assess members as
provided in subdivisions 2, 3, and 4 at the times and for the
amounts the board of directors finds necessary. Assessments are
due and payable on the date specified by the board of directors,
but not less than 30 days after written notice to the member.
Assessments accrue interest at the rate of six percent per year
on or after the due date.
Subd. 2. [INITIAL CAPITALIZATION.] The interim board of
directors shall determine the initial capital operating
requirements for the association. The board shall assess each
licensed health carrier $100 for the initial capital
requirements of the association. The assessment is due and
payable no later than January 1, 1993.
Subd. 3. [RETROSPECTIVE ASSESSMENT.] On or before July 1
of each year, the administering carrier shall determine the
association's net loss, if any, for the previous calendar year,
the program expenses of administration, and other appropriate
gains and losses. If reinsurance premium charges are not
sufficient to satisfy the operating and administrative expenses
incurred or estimated to be incurred by the association, the
board of directors shall assess each member participating in the
association in proportion to each member's respective share of
the total insurance premiums, subscriber contract payments,
health maintenance organization payments, and other health
benefit plan revenue derived from or on behalf of small
employers during the preceding calendar year. The assessments
must be calculated by the board of directors based on annual
statements and other reports considered necessary by the board
of directors and filed by members with the association. The
amount of the assessment shall not exceed four percent of the
member's small group market premium. In establishing this
assessment, the board shall consider a formula based on total
small employer premiums earned and premiums earned from newly
issued small employer plans. A member's assessment may not be
reduced or increased by more than 50 percent as a result of
using that formula, which includes a reasonable cap on
assessments on any premium category or premium classification.
The board of directors may provide for interim assessments as it
considers necessary to appropriately carry out the association's
responsibilities. The board of directors may establish
operating rules to provide for changes in the assessment
calculation.
Subd. 4. [ADDITIONAL ASSESSMENTS.] If the board of
directors determines that the retrospective assessment formula
described in subdivision 3 is insufficient to meet the
obligations of the association, the board of directors shall
assess each member not participating in the reinsurance
association, but which is providing health plan coverage in the
small employer market, in proportion to each member's respective
share of the total insurance premiums, subscriber contract
payments, health maintenance organization payments, and other
health benefit plan revenue derived from or on behalf of small
employers during the preceding calendar year. The assessment
must be calculated by the board of directors based on annual
statements and other reports considered necessary by the board
of directors and filed by members with the association. The
amount of the assessment may not exceed one percent of the
member's small group market premium. Members who paid the
retrospective assessment described in subdivision 3 are not
subject to the additional assessment.
If the additional assessment is insufficient to meet the
obligations of the association, the board of directors may
assess members participating in the association who paid the
retrospective assessment described in subdivision 3 up to an
additional one percent of the member's small group market
premium.
Subd. 5. [ABATEMENT OR DEFERMENT.] The association may
abate or defer, in whole or in part, the retrospective
assessment of a member if, in the opinion of the commissioner,
payment of the assessment would endanger the ability of the
member to fulfill its contractual obligations or the member is
placed under an order of rehabilitation, liquidation,
receivership, or conservation by a court of competent
jurisdiction. In the event that a retrospective assessment
against a member is abated or deferred, in whole or in part, the
amount by which the assessment is abated or deferred may be
assessed against other members in accordance with the
methodology specified in subdivisions 3 and 4.
Subd. 6. [REFUND.] The board of directors may refund to
members, in proportion to their contributions, the amount by
which the assets of the association exceed the amount the board
of directors finds necessary to carry out its responsibilities
during the next calendar year. A reasonable amount may be
retained to provide funds for the continuing expenses of the
association and for future losses.
Subd. 7. [APPEALS.] A health carrier may appeal to the
commissioner of commerce within 30 days of notice of an
assessment by the board of directors. A final action or order
of the commissioner is subject to judicial review in the manner
provided in chapter 14.
Subd. 8. [LIABILITY FOR ASSESSMENT.] Employer liability
for other costs of a health carrier resulting from assessments
made by the association under this section are limited by the
rate spread restrictions specified in section 62L.08.
Sec. 23. [62L.23] [LOSS RATIO STANDARDS.]
Notwithstanding section 62A.02, subdivision 3, relating to
loss ratios, each policy or contract form used with respect to a
health benefit plan offered, or issued in the small employer
market, is subject, beginning July 1, 1993, to section 62A.021.
The commissioner of health has, with respect to carriers under
that commissioner's jurisdiction, all of the powers of the
commissioner of commerce under that section.
Sec. 24. [COMMISSIONER OF COMMERCE STUDY.]
The commissioner of commerce shall study and provide a
written report and recommendations to the legislature that
analyze the effects of this article and future measures that the
legislature could enact to achieve the purpose set forth in
section 62L.01, subdivision 3. The commissioner shall study,
report, and make recommendations on the following:
(1) the effects of this article on availability of
coverage, average premium rates, variations in premium rates,
the number of uninsured and underinsured residents of this
state, the types of health benefit plans chosen by employers,
and other effects on the market for health benefit plans for
small employers;
(2) the desirability and feasibility of achieving the goal
stated in section 62L.01, subdivision 3, in the small employer
market by means of the following timetable:
(i) as of July 1, 1995, a reduction of the age rating bands
to 30 percent on each side of the index rate, accompanied by a
proportional reduction of the general premium rating bands to 15
percent on each side of the index rate;
(ii) as of July 1, 1996, a reduction in the bands
referenced in the preceding clause to 15 percent and 7.5 percent
respectively; and
(iii) as of July 1, 1997, a ban on all rating bands; and
(3) Any other aspects of the small employer market
considered relevant by the commissioner.
The commissioner shall file the written report and
recommendations with the legislature no later than December 1,
1994.
Sec. 25. [EFFECTIVE DATES.]
Sections 1 to 12 and 23 are effective July 1, 1993, except
that section 10, subdivision 5, is effective the day following
final enactment. Sections 13 to 22 are effective the day
following final enactment.
ARTICLE 3
INSURANCE REFORM: INDIVIDUAL
MARKET AND MISCELLANEOUS
Section 1. [43A.317] [PRIVATE EMPLOYERS INSURANCE
PROGRAM.]
Subdivision 1. [INTENT.] The legislature finds that the
creation of a statewide program to provide employers with the
advantages of a large pool for insurance purchasing would
advance the welfare of the citizens of the state.
Subd. 2. [DEFINITIONS.] (a) [SCOPE.] For the purposes of
this section, the terms defined have the meaning given them.
(b) [COMMISSIONER.] "Commissioner" means the commissioner
of employee relations.
(c) [ELIGIBLE EMPLOYEE.] "Eligible employee" means an
employee eligible to participate in the program under the terms
described in subdivision 6.
(d) [ELIGIBLE EMPLOYER.] "Eligible employer" means an
employer eligible to participate in the program under the terms
described in subdivision 5.
(e) [ELIGIBLE INDIVIDUAL.] "Eligible individual" means a
person eligible to participate in the program under the terms
described in subdivision 6.
(f) [EMPLOYEE.] "Employee" means a common law employee of
an eligible employer.
(g) [EMPLOYER.] "Employer" means a private person, firm,
corporation, partnership, association, unit of local government,
or other entity actively engaged in business or public
services. "Employer" includes both for-profit and nonprofit
entities.
(h) [PROGRAM.] "Program" means the private employers
insurance program created by this section.
Subd. 3. [ADMINISTRATION.] The commissioner shall,
consistent with the provisions of this section, administer the
program and determine its coverage options, funding and premium
arrangements, contractual arrangements, and all other matters
necessary to administer the program. The commissioner's
contracting authority for the program, including authority for
competitive bidding and negotiations, is governed by section
43A.23.
Subd. 4. [ADVISORY COMMITTEE.] The commissioner shall
establish a ten-member advisory committee that includes five
members who represent eligible employers and five members who
represent eligible individuals. The committee shall advise the
commissioner on issues related to administration of the
program. The committee is governed by sections 15.014 and
15.059, and continues to exist while the program remains in
operation.
Subd. 5. [EMPLOYER ELIGIBILITY.] (a) [PROCEDURES.] All
employers are eligible for coverage through the program subject
to the terms of this subdivision. The commissioner shall
establish procedures for an employer to apply for coverage
through the program.
(b) [TERM.] The initial term of an employer's coverage will
be two years from the effective date of the employer's
application. After that, coverage will be automatically renewed
for additional two-year terms unless the employer gives notice
of withdrawal from the program according to procedures
established by the commissioner or the commissioner gives notice
to the employer of the discontinuance of the program. The
commissioner may establish conditions under which an employer
may withdraw from the program prior to the expiration of a
two-year term, including by reason of a midyear increase in
health coverage premiums of 50 percent or more. An employer
that withdraws from the program may not reapply for coverage for
a period of two years from its date of withdrawal.
(c) [MINNESOTA WORK FORCE.] An employer is not eligible for
coverage through the program if five percent or more of its
eligible employees work primarily outside Minnesota, except that
an employer may apply to the program on behalf of only those
employees who work primarily in Minnesota.
(d) [EMPLOYEE PARTICIPATION; AGGREGATION OF GROUPS.] An
employer is not eligible for coverage through the program unless
its application includes all eligible employees who work
primarily in Minnesota, except employees who waive coverage as
permitted by subdivision 6. Private entities that are eligible
to file a combined tax return for purposes of state tax laws are
considered a single employer, except as otherwise approved by
the commissioner.
(e) [PRIVATE EMPLOYER.] A private employer is not eligible
for coverage unless it has two or more eligible employees in the
state of Minnesota. If an employer has only two eligible
employees, one employee must not be the spouse, child, sibling,
parent, or grandparent of the other.
(f) [MINIMUM PARTICIPATION.] The commissioner must require
as a condition of employer eligibility that at least 75 percent
of its eligible employees who have not waived coverage
participate in the program. The participation level of eligible
employees must be determined at the initial offering of coverage
and at the renewal date of coverage. For purposes of this
section, waiver of coverage includes only waivers due to
coverage under another group health benefit plan.
(g) [EMPLOYER CONTRIBUTION.] The commissioner must require
as a condition of employer eligibility that the employer
contribute at least 50 percent toward the cost of the premium of
the employee and may require that the contribution toward the
cost of coverage is structured in a way that promotes price
competition among the coverage options available through the
program.
(h) [ENROLLMENT CAP.] The commissioner may limit employer
enrollment in the program if necessary to avoid exceeding the
program's reserve capacity.
Subd. 6. [INDIVIDUAL ELIGIBILITY.] (a) [PROCEDURES.] The
commissioner shall establish procedures for eligible employees
and other eligible individuals to apply for coverage through the
program.
(b) [EMPLOYEES.] An employer shall determine when it
applies to the program the criteria its employees must meet to
be eligible for coverage under its plan. An employer may
subsequently change the criteria annually or at other times with
approval of the commissioner. The criteria must provide that
new employees become eligible for coverage after a probationary
period of at least 30 days, but no more than 90 days.
(c) [OTHER INDIVIDUALS.] An employer may elect to cover
under its plan:
(1) the spouse, dependent children, and dependent
grandchildren of a covered employee;
(2) a retiree who is eligible to receive a pension or
annuity from the employer and a covered retiree's spouse,
dependent children, and dependent grandchildren;
(3) the surviving spouse, dependent children, and dependent
grandchildren of a deceased employee or retiree, if the spouse,
children, or grandchildren were covered at the time of the
death;
(4) a covered employee who becomes disabled, as provided in
sections 62A.147 and 62A.148; or
(5) any other categories of individuals for whom group
coverage is required by state or federal law.
An employer shall determine when it applies to the program
the criteria individuals in these categories must meet to be
eligible for coverage. An employer may subsequently change the
criteria annually, or at other times with approval of the
commissioner. The criteria for dependent children and dependent
grandchildren may be no more inclusive than the criteria under
section 43A.18, subdivision 2. This paragraph shall not be
interpreted as relieving the program from compliance with any
federal and state continuation of coverage requirements.
(d) [WAIVER AND LATE ENTRANCE.] An eligible individual may
waive coverage at the time the employer joins the program or
when coverage first becomes available. The commissioner may
establish a preexisting condition exclusion of not more than 18
months for late entrants as defined in section 62L.02,
subdivision 19.
(e) [CONTINUATION COVERAGE.] The program shall provide all
continuation coverage required by state and federal law.
Subd. 7. [COVERAGE.] Coverage is available through the
program beginning on July 1, 1993. At least annually, the
commissioner shall solicit bids from carriers regulated under
chapters 62A, 62C, and 62D, to provide coverage of eligible
individuals. The commissioner shall provide coverage through
contracts with carriers, unless the commissioner receives no
reasonable bids from carriers.
(a) [HEALTH COVERAGE.] Health coverage is available to all
employers in the program. The commissioner shall attempt to
establish health coverage options that have strong care
management features to control costs and promote quality and
shall attempt to make a choice of health coverage options
available. Health coverage for a retiree who is eligible for
the federal Medicare program must be administered as though the
retiree is enrolled in Medicare parts A and B. To the extent
feasible as determined by the commissioner and in the best
interests of the program, the commissioner shall model coverage
after the plan established in section 43A.18, subdivision 2.
Health coverage must include at least the benefits required of a
carrier regulated under chapter 62A, 62C, or 62D for comparable
coverage. Coverage under this paragraph must not be provided as
part of the health plans available to state employees.
(b) [OPTIONAL COVERAGES.] In addition to offering health
coverage, the commissioner may arrange to offer dental coverage
through the program. Employers with health coverage may choose
to offer dental coverage according to the terms established by
the commissioner.
(c) [OPEN ENROLLMENT.] The program must meet all
underwriting requirements of chapter 62L and must provide
periodic open enrollments for eligible individuals for those
coverages where a choice exists.
(d) [TECHNICAL ASSISTANCE.] The commissioner may arrange
for technical assistance and referrals for eligible employers in
areas such as health promotion and wellness, employee benefits
structure, tax planning, and health care analysis services as
described in section 62J.33.
Subd. 8. [PREMIUMS.] (a) [PAYMENTS.] Employers enrolled in
the program shall pay premiums according to terms established by
the commissioner. If an employer fails to make the required
payments, the commissioner may cancel coverage and pursue other
civil remedies.
(b) [RATING METHOD.] The commissioner shall determine the
premium rates and rating method for the program. The rating
method for eligible small employers must meet or exceed the
requirements of chapter 62L. The rating methods must recover in
premiums all of the ongoing costs for state administration and
for maintenance of a premium stability and claim fluctuation
reserve. Premiums must be established so as to recover and
repay within five years after July 1, 1993, any direct
appropriations received to provide start-up administrative
costs. Premiums must be established so as to recover and repay
within five years after July 1, 1993, any direct appropriations
received to establish initial reserves.
(c) [TAXES AND ASSESSMENTS.] To the extent that the program
operates as a self-insured group, the premiums paid to the
program are not subject to the premium taxes imposed by sections
60A.15 and 60A.198, but the program is subject to a Minnesota
comprehensive health association assessment under section 62E.11.
Subd. 9. [PRIVATE EMPLOYERS INSURANCE TRUST FUND.] (a)
[CONTENTS.] The private employer insurance trust fund in the
state treasury consists of deposits received from eligible
employers and individuals, contractual settlements or rebates
relating to the program, investment income or losses, and direct
appropriations.
(b) [APPROPRIATION.] All money in the fund is appropriated
to the commissioner to pay insurance premiums, approved claims,
refunds, administrative costs, and other costs necessary to
administer the program.
(c) [RESERVES.] For any coverages for which the program
does not contract to transfer full financial responsibility, the
commissioner shall establish and maintain reserves:
(1) for claims in process, incomplete and unreported
claims, premiums received but not yet earned, and all other
accrued liabilities; and
(2) to ensure premium stability and the timely payment of
claims in the event of adverse claims experience. The reserve
for premium stability and claim fluctuations must be established
according to the standards of section 62C.09, subdivision 3,
except that the reserve may exceed the upper limit under this
standard until July 1, 1997.
(d) [INVESTMENTS.] The state board of investment shall
invest the fund's assets according to section 11A.24.
Investment income and losses attributable to the fund must be
credited to the fund.
Subd. 10. [PROGRAM STATUS.] The private employers
insurance program is a state program to provide the advantages
of a large pool to small employers for purchasing health
coverage, other coverages, and related services from insurance
companies, health maintenance organizations, and other
organizations. The program is not an insurance company.
Coverage under this program shall be considered a certificate of
insurance or similar evidence of coverage and is subject to all
applicable requirements of chapters 60A, 62A, 62C, 62E, 62H,
62L, and 72A, and is subject to regulation by the commissioner
of commerce to the extent applicable. Coverage is subject to
section 471.617, subdivisions 2 and 3, and the bidding
requirements of section 471.6161.
Subd. 11. [EVALUATION.] The commissioner shall report to
the legislature on December 15, 1995. The report must provide a
detailed summary of all direct and indirect administrative costs
associated with the program, and must include an analysis of
whether the program (1) is providing coverage to persons who
would otherwise be unable to purchase coverage in the private
sector; (2) will provide coverage at lower premium costs without
ongoing state subsidy; (3) will provide coverage to persons in
geographic areas of the state where coverage options would
otherwise be limited; and (4) will fulfill the intent of the
legislature.
Sec. 2. [62A.011] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] For purposes of this
chapter, the terms defined in this section have the meanings
given.
Subd. 2. [HEALTH CARRIER.] "Health carrier" means an
insurance company licensed under chapter 60A to offer, sell, or
issue a policy of accident and sickness insurance as defined in
section 62A.01; a nonprofit health service plan corporation
operating under chapter 62C; a health maintenance organization
operating under chapter 62D; a fraternal benefit society
operating under chapter 64B; or a joint self-insurance employee
health plan operating under chapter 62H.
Subd. 3. [HEALTH PLAN.] "Health plan" means a policy or
certificate of accident and sickness insurance as defined in
section 62A.01 offered by an insurance company licensed under
chapter 60A; a subscriber contract or certificate offered by a
nonprofit health service plan corporation operating under
chapter 62C; a health maintenance contract or certificate
offered by a health maintenance organization operating under
chapter 62D; a health benefit certificate offered by a fraternal
benefit society operating under chapter 64B; or health coverage
offered by a joint self-insurance employee health plan operating
under chapter 62H. Health plan means individual and group
coverage, unless otherwise specified.
Sec. 3. Minnesota Statutes 1990, section 62A.02,
subdivision 1, is amended to read:
Subdivision 1. [FILING.] No policy of accident and
sickness insurance health plan as defined in section 62A.011
shall be issued or delivered to any person in this state, nor
shall any application, rider, or endorsement be used in
connection therewith with the health plan, until a copy of the
its form thereof and of the classification of risks and the
premium rates pertaining thereto to the form have been filed
with the commissioner. The filing for nongroup policies health
plan forms shall include a statement of actuarial reasons and
data to support the need for any premium rate increase. For
health benefit plans as defined in section 62L.02, and for
health plans to be issued to individuals, the health carrier
shall file with the commissioner the information required in
section 62L.08, subdivision 8. For group health plans for which
approval is sought for sales only outside of the small employer
market as defined in section 62L.02, this section applies only
to policies or contracts of accident and sickness insurance.
All forms intended for issuance in the individual or small
employer market must be accompanied by a statement as to the
expected loss ratio for the form. Premium rates and forms
relating to specific insureds or proposed insureds, whether
individuals or groups, need not be filed, unless requested by
the commissioner.
Sec. 4. Minnesota Statutes 1990, section 62A.02,
subdivision 2, is amended to read:
Subd. 2. [APPROVAL.] No such policy The health plan form
shall not be issued, nor shall any application, rider, or
endorsement, or rate be used in connection therewith with it,
until the expiration of 60 days after it has been so filed
unless the commissioner shall sooner give written approval
thereto approves it before that time.
Sec. 5. Minnesota Statutes 1990, section 62A.02,
subdivision 3, is amended to read:
Subd. 3. [STANDARDS FOR DISAPPROVAL.] The commissioner
shall, within 60 days after the filing of any form or rate,
disapprove the form or rate:
(1) if the benefits provided therein are unreasonable not
reasonable in relation to the premium charged;
(2) if it contains a provision or provisions which are
unjust, unfair, inequitable, misleading, deceptive or encourage
misrepresentation of the policy health plan form, or otherwise
does not comply with this chapter, chapter 62L, or chapter
72A; or
(3) if the proposed premium rate is excessive because the
insurer has failed to exercise reasonable cost control or not
adequate; or
(4) the actuarial reasons and data submitted do not justify
the rate.
The party proposing a rate has the burden of proving by a
preponderance of the evidence that it does not violate this
subdivision.
In determining the reasonableness of a rate, the
commissioner shall also review all administrative contracts,
service contracts, and other agreements to determine the
reasonableness of the cost of the contracts or agreement and
effect of the contracts on the rate. If the commissioner
determines that a contract or agreement is not reasonable, the
commissioner shall disapprove any rate that reflects any
unreasonable cost arising out of the contract or agreement. The
commissioner may require any information that the commissioner
deems necessary to determine the reasonableness of the cost.
For the purposes of clause (1) this subdivision, the
commissioner shall establish by rule a schedule of minimum
anticipated loss ratios which shall be based on (i) the type or
types of coverage provided, (ii) whether the policy is for group
or individual coverage, and (iii) the size of the group for
group policies. Except for individual policies of disability or
income protection insurance, the minimum anticipated loss ratio
shall not be less than 50 percent after the first year that a
policy is in force. All applicants for a policy shall be
informed in writing at the time of application of the
anticipated loss ratio of the policy. For the purposes of this
subdivision, "Anticipated loss ratio" means the ratio at the
time of form filing, at the time of notice of withdrawal under
subdivision 4a, or at the time of subsequent rate revision of
the present value of all expected future benefits, excluding
dividends, to the present value of all expected future
premiums. Nothing in this paragraph shall prohibit the
commissioner from disapproving a form which meets the
requirements of this paragraph but which the commissioner
determines still provides benefits which are unreasonable in
relation to the premium charged.
If the commissioner notifies an insurer which a health
carrier that has filed any form or rate that the form it does
not comply with the provisions of this section or sections
62A.03 to 62A.05 and 72A.20 chapter, chapter 62L, or chapter
72A, it shall be unlawful thereafter for the insurer health
carrier to issue or use the form or use it in connection with
any policy rate. In the notice the commissioner shall specify
the reasons for disapproval and state that a hearing will be
granted within 20 days after request in writing by the insurer
health carrier.
The 60-day period within which the commissioner is to
approve or disapprove the form or rate does not begin to run
until a complete filing of all data and materials required by
statute or requested by the commissioner has been submitted.
However, if the supporting data is not filed within 30 days
after a request by the commissioner, the rate is not effective
and is presumed to be an excessive rate.
Sec. 6. Minnesota Statutes 1990, section 62A.02, is
amended by adding a subdivision to read:
Subd. 4a. [WITHDRAWAL OF APPROVAL.] The commissioner may,
at any time after a 20-day written notice has been given to the
insurer, withdraw approval of any form or rate that has
previously been approved on any of the grounds stated in this
section. It is unlawful for the health carrier to issue a form
or rate or use it in connection with any health plan after the
effective date of the withdrawal of approval. The notice of
withdrawal of approval must advise the health carrier of the
right to a hearing under the contested case procedures of
chapter 14, and must specify the matters to be considered at the
hearing.
The commissioner may request an health carrier to provide
actuarial reasons and data, as well as other information, needed
to determine if a previously approved rate continues to satisfy
the requirements of this section. If the requested information
is not provided within 30 days after request by the
commissioner, the rate is presumed to be an excessive rate.
Sec. 7. Minnesota Statutes 1990, section 62A.02, is
amended by adding a subdivision to read:
Subd. 5a. [HEARING.] The health carrier must request a
hearing before the 20-day notice period has ended, or the
commissioner's order is final. A request for hearing stays the
commissioner's order until the commissioner notifies the health
carrier of the result of the hearing. The commissioner's order
may require the modification of any rate or form and may require
continued coverage to persons covered under a health plan to
which the disapproved form or rate applies.
Sec. 8. [62A.021] [HEALTH CARE POLICY RATES.]
Subdivision 1. [LOSS RATIO STANDARDS.] Notwithstanding
section 62A.02, subdivision 3, relating to loss ratios, a health
care policy form or certificate form shall not be delivered or
issued for delivery to an individual or to a small employer as
defined in section 62L.02, unless the policy form or certificate
form can be expected, as estimated for the entire period for
which rates are computed to provide coverage, to return to
Minnesota policyholders and certificate holders in the form of
aggregate benefits not including anticipated refunds or credits,
provided under the policy form or certificate form, (1) at least
75 percent of the aggregate amount of premiums earned in the
case of policies issued in the small employer market, as defined
in section 62L.02, subdivision 27; and (2) at least 65 percent
of the aggregate amount of premiums earned in the case of
policies issued in the individual market, calculated on the
basis of incurred claims experience or incurred health care
expenses where coverage is provided by a health maintenance
organization on a service rather than reimbursement basis and
earned premiums for the period and according to accepted
actuarial principles and practices. A health carrier shall
demonstrate that the third year loss ratio is greater than or
equal to the applicable percentage. Assessments by the
reinsurance association created in chapter 62L and any types of
taxes, surcharges, or assessments created by this act or created
on or after the date of final enactment of this act are included
in the calculation of incurred claims experience or incurred
health care expenses. The applicable percentage for policy
forms and certificate forms issued in the small employer market,
as defined in section 62L.02, increases by one percentage point
on July 1 of each year, until an 80 percent loss ratio is
reached on July 1, 1998. The applicable percentage for policy
forms and certificate forms issued in the individual market
increases by one percentage point on July 1 of each year, until
a 70 percent loss ratio is reached on July 1, 1998. Premiums
earned and claims incurred in markets other than the small
employer and individual markets are not relevant for purposes of
this section.
Notwithstanding section 645.26, any act enacted at this
session that amends or repeals section 62A.135 or that otherwise
changes the loss ratios provided in that section is void.
All filings of rates and rating schedules shall demonstrate
that actual expected claims in relation to premiums comply with
the requirements of this section when combined with actual
experience to date. Filings of rate revisions shall also
demonstrate that the anticipated loss ratio over the entire
future period for which the revised rates are computed to
provide coverage can be expected to meet the appropriate loss
ratio standards, and aggregate loss ratio from inception of the
policy form or certificate form shall equal or exceed the
appropriate loss ratio standards.
A health carrier that issues health care policies and
certificates to individuals or to small employers, as defined in
section 62L.02, in this state shall file annually its rates,
rating schedule, and supporting documentation including ratios
of incurred losses to earned premiums by policy form or
certificate form duration for approval by the commissioner
according to the filing requirements and procedures prescribed
by the commissioner. The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice
using reasonable assumptions that the appropriate loss ratio
standards can be expected to be met over the entire period for
which rates are computed. The demonstration shall exclude
active life reserves. An expected third-year loss ratio which
is greater than or equal to the applicable percentage shall be
demonstrated for policy forms or certificate forms in force less
than three years. If the data submitted does not confirm that
the health carrier has satisfied the loss ratio requirements of
this section, the commissioner shall notify the health carrier
in writing of the deficiency. The health carrier shall have 30
days from the date of the commissioner's notice to file amended
rates that comply with this section. If the health carrier
fails to file amended rates within the prescribed time, the
commissioner shall order that the health carrier's filed rates
for the nonconforming policy form or certificate form be reduced
to an amount that would have resulted in a loss ratio that
complied with this section had it been in effect for the
reporting period of the supplement. The health carrier's
failure to file amended rates within the specified time or the
issuance of the commissioner's order amending the rates does not
preclude the health carrier from filing an amendment of its
rates at a later time. The commissioner shall annually make the
submitted data available to the public at a cost not to exceed
the cost of copying. The data must be compiled in a form useful
for consumers who wish to compare premium charges and loss
ratios.
Each sale of a policy or certificate that does not comply
with the loss ratio requirements of this section is an unfair or
deceptive act or practice in the business of insurance and is
subject to the penalties in sections 72A.17 to 72A.32.
For purposes of this section, health care policies issued
as a result of solicitations of individuals through the mail or
mass media advertising, including both print and broadcast
advertising, shall be treated as individual policies.
For purposes of this section, (1) "health care policy" or
"health care certificate" is a health plan as defined in section
62A.011; and (2) "health carrier" has the meaning given in
section 62A.011 and includes all health carriers delivering or
issuing for delivery health care policies or certificates in
this state or offering these policies or certificates to
residents of this state.
Subd. 2. [COMPLIANCE AUDIT.] The commissioner has the
authority to audit any health carrier to assure compliance with
this section. Health carriers shall retain at their principal
place of business information necessary for the commissioner to
perform compliance audits.
Sec. 9. [62A.302] [COVERAGE OF DEPENDENTS.]
Subdivision 1. [SCOPE OF COVERAGE.] This section applies
to all health plans as defined in section 62A.011.
Subd. 2. [REQUIRED COVERAGE.] Every health plan included
in subdivision 1 that provides dependent coverage must define
"dependent" no more restrictively than the definition provided
in section 62L.02.
Sec. 10. [62A.303] [PROHIBITION; SEVERING OF GROUPS.]
Section 62L.12, subdivisions 1, 2, 3, and 4, apply to all
employer group health plans, as defined in section 62A.011,
regardless of the size of the group.
Sec. 11. Minnesota Statutes 1991 Supplement, section
62A.31, subdivision 1, is amended to read:
Subdivision 1. [POLICY REQUIREMENTS.] No individual or
group policy, certificate, subscriber contract issued by a
health service plan corporation regulated under chapter 62C, or
other evidence of accident and health insurance the effect or
purpose of which is to supplement Medicare coverage issued or
delivered in this state or offered to a resident of this state
shall be sold or issued to an individual covered by Medicare
unless the following requirements are met:
(a) The policy must provide a minimum of the coverage set
out in subdivision 2;
(b) The policy must cover preexisting conditions during the
first six months of coverage if the insured was not diagnosed or
treated for the particular condition during the 90 days
immediately preceding the effective date of coverage;
(c) The policy must contain a provision that the plan will
not be canceled or nonrenewed on the grounds of the
deterioration of health of the insured;
(d) Before the policy is sold or issued, an offer of both
categories of Medicare supplement insurance has been made to the
individual, together with an explanation of both coverages;
(e) An outline of coverage as provided in section 62A.39
must be delivered at the time of application and prior to
payment of any premium;
(f)(1) The policy must provide that benefits and premiums
under the policy shall be suspended at the request of the
policyholder for the period, not to exceed 24 months, in which
the policyholder has applied for and is determined to be
entitled to medical assistance under title XIX of the Social
Security Act, but only if the policyholder notifies the issuer
of the policy within 90 days after the date the individual
becomes entitled to this assistance;
(2) If suspension occurs and if the policyholder or
certificate holder loses entitlement to this medical assistance,
the policy shall be automatically reinstated, effective as of
the date of termination of this entitlement, if the policyholder
provides notice of loss of the entitlement within 90 days after
the date of the loss;
(3) The policy must provide that upon reinstatement (i)
there is no additional waiting period with respect to treatment
of preexisting conditions, (ii) coverage is provided which is
substantially equivalent to coverage in effect before the date
of the suspension, and (iii) premiums are classified on terms
that are at least as favorable to the policyholder or
certificate holder as the premium classification terms that
would have applied to the policyholder or certificate holder had
coverage not been suspended;
(g) The written statement required by an application for
Medicare supplement insurance pursuant to section 62A.43,
subdivision 1, shall be made on a form, approved by the
commissioner, that states that counseling services may be
available in the state to provide advice concerning the purchase
of Medicare supplement policies and enrollment under the
Medicaid program;
(h) No issuer of Medicare supplement policies, including
policies that supplement Medicare issued by health maintenance
organizations or those policies governed by section 1833 or 1876
of the federal Social Security Act, United States Code, title
42, section 1395, et seq., in this state may impose preexisting
condition limitations or otherwise deny or condition the
issuance or effectiveness of any Medicare supplement insurance
policy form available for sale in this state, nor may it
discriminate in the pricing of such a policy, because of the
health status, claims experience, receipt of health care, or
medical condition of an applicant where an application for such
insurance is submitted during the six-month period beginning
with the first month in which an individual first enrolled for
benefits under Medicare Part B;
(i) If a Medicare supplement policy replaces another
Medicare supplement policy, the issuer of the replacing policy
shall waive any time periods applicable to preexisting
conditions, waiting periods, elimination periods, and
probationary periods in the new Medicare supplement policy for
similar benefits to the extent the time was spent under the
original policy;
(j) The policy has been filed with and approved by the
department as meeting all the requirements of sections 62A.31 to
62A.44; and
(k) The policy guarantees renewability.
Only the following standards for renewability may be used
in Medicare supplement insurance policy forms.
No issuer of Medicare supplement insurance policies may
cancel or nonrenew a Medicare supplement policy or certificate
for any reason other than nonpayment of premium or material
misrepresentation.
If a group Medicare supplement insurance policy is
terminated by the group policyholder and is not replaced as
provided in this clause, the issuer shall offer certificate
holders an individual Medicare supplement policy which, at the
option of the certificate holder, provides for continuation of
the benefits contained in the group policy; or provides for such
benefits and benefit packages as otherwise meet the requirements
of this clause.
If an individual is a certificate holder in a group
Medicare supplement insurance policy and the individual
terminates membership in the group, the issuer of the policy
shall offer the certificate holder the conversion opportunities
described in this clause; or offer the certificate holder
continuation of coverage under the group policy.
(l) Each health maintenance organization, health service
plan corporation, insurer, or fraternal benefit society that
sells coverage that supplements Medicare coverage shall
establish a separate community rate for that coverage.
Beginning January 1, 1993, no coverage that supplements Medicare
or that is governed by section 1833 or 1876 of the federal
Social Security Act, United States Code, title 42, section 1395,
et seq., may be offered, issued, sold, or renewed to a Minnesota
resident, except at the community rate required by this
paragraph.
For coverage that supplements Medicare and for the Part A
rate calculation for plans governed by section 1833 of the
federal Social Security Act, United States Code, title 42,
section 1395, et seq., the community rate may take into account
only the following factors:
(1) actuarially valid differences in benefit designs or
provider networks;
(2) geographic variations in rates if preapproved by the
commissioner of commerce; and
(3) premium reductions in recognition of healthy lifestyle
behaviors, including but not limited to, refraining from the use
of tobacco. Premium reductions must be actuarially valid and
must relate only to those healthy lifestyle behaviors that have
a proven positive impact on health. Factors used by the health
carrier making this premium reduction must be filed with and
approved by the commissioner.
Sec. 12. [62A.65] [INDIVIDUAL MARKET REGULATION.]
Subdivision 1. [APPLICABILITY.] No health carrier, as
defined in chapter 62L, shall offer, sell, issue, or renew any
individual policy of accident and sickness coverage, as defined
in section 62A.01, subdivision 1, any individual subscriber
contract regulated under chapter 62C, any individual health
maintenance contract regulated under chapter 62D, any individual
health benefit certificate regulated under chapter 64B, or any
individual health coverage provided by a multiple employer
welfare arrangement, to a Minnesota resident except in
compliance with this section. For purposes of this section,
"health benefit plan" has the meaning given in chapter 62L,
except that the term means individual coverage, including family
coverage, rather than employer group coverage. This section
does not apply to the comprehensive health association
established in section 62E.10 or to coverage described in
section 62A.31, subdivision 1, paragraph (h), or to long-term
care policies as defined in section 62A.46, subdivision 2.
Subd. 2. [GUARANTEED RENEWAL.] No health benefit plan may
be offered, sold, issued, or renewed to a Minnesota resident
unless the health benefit plan provides that the plan is
guaranteed renewable at a premium rate that does not take into
account the claims experience or any change in the health status
of any covered person that occurred after the initial issuance
of the health benefit plan to the person. The premium rate upon
renewal must also otherwise comply with this section. A health
benefit plan may be subject to refusal to renew only under the
conditions provided in chapter 62L.
Subd. 3. [PREMIUM RATE RESTRICTIONS.] No health benefit
plan may be offered, sold, issued, or renewed to a Minnesota
resident unless the premium rate charged is determined in
accordance with the rating and premium restrictions provided
under chapter 62L, except the minimum loss ratio applicable to
individual coverage is as provided in section 62A.021. All
provisions of chapter 62L apply to rating and premium
restrictions in the individual market, unless clearly
inapplicable to the individual market.
Subd. 4. [GENDER RATING PROHIBITED.] No health benefit
plan offered, sold, issued, or renewed to a Minnesota resident
may determine the premium rate or any other underwriting
decision, including initial issuance, on the gender of any
person covered or to be covered under the health benefit plan.
Subd. 5. [PORTABILITY OF COVERAGE.] (a) No health benefit
plan may be offered, sold, issued, or renewed to a Minnesota
resident that contains a preexisting condition limitation or
exclusion, unless the limitation or exclusion would be permitted
under chapter 62L. The individual may be treated as a late
entrant, as defined in chapter 62L, unless the individual has
maintained continuous coverage as defined in chapter 62L. An
individual who has maintained continuous coverage may be
subjected to a one-time preexisting condition limitation as
permitted under chapter 62L for persons who are not late
entrants, at the time that the individual first is covered by
individual coverage. Thereafter, the person must not be subject
to any preexisting condition limitation, except an unexpired
portion of a limitation under prior coverage, so long as the
individual maintains continuous coverage.
(b) A health carrier must offer individual coverage to any
individual previously covered under a group health benefit plan
issued by that health carrier, so long as the individual
maintained continuous coverage as defined in chapter 62L.
Coverage issued under this paragraph must not contain any
preexisting condition limitation or exclusion, except for any
unexpired limitation or exclusion under the previous coverage.
The initial premium rate for the individual coverage must comply
with subdivision 3. The premium rate upon renewal must comply
with subdivision 2.
Subd. 6. [GUARANTEED ISSUE NOT REQUIRED.] Nothing in this
section requires a health carrier to initially issue a health
benefit plan to a Minnesota resident, except as otherwise
expressly provided in subdivision 4 or 5.
Sec. 13. Minnesota Statutes 1990, section 62E.02,
subdivision 23, is amended to read:
Subd. 23. "Contributing member" means those companies
operating pursuant to regulated under chapter 62A and offering,
selling, issuing, or renewing policies or contracts of accident
and health insurance or; health maintenance organizations and
regulated under chapter 62D; nonprofit health service plan
corporations incorporated regulated under chapter 62C or;
fraternal benefit society operating societies regulated under
chapter 64B; the private employers insurance program established
in section 43A.317, effective July 1, 1993; and joint
self-insurance plans regulated under chapter 62H. For the
purposes of determining liability of contributing members
pursuant to section 62E.11 payments received from or on behalf
of Minnesota residents for coverage by a health maintenance
organization shall be considered to be accident and health
insurance premiums.
Sec. 14. Minnesota Statutes 1990, section 62E.10,
subdivision 1, is amended to read:
Subdivision 1. [CREATION; TAX EXEMPTION.] There is
established a comprehensive health association to promote the
public health and welfare of the state of Minnesota with
membership consisting of all insurers,; self-insurers,;
fraternals; joint self-insurance plans regulated under chapter
62H; the private employers insurance program established in
section 43A.317, effective July 1, 1993; and health maintenance
organizations licensed or authorized to do business in this
state. The comprehensive health association shall be exempt
from taxation under the laws of this state and all property
owned by the association shall be exempt from taxation.
Sec. 15. Minnesota Statutes 1990, section 62E.11,
subdivision 9, is amended to read:
Subd. 9. Each contributing member that terminates
individual health coverage regulated under chapter 62A, 62C,
62D, or 64B for reasons other than (a) nonpayment of premium; (b)
failure to make copayments; (c) enrollee moving out of the area
served; or (d) a materially false statement or misrepresentation
by the enrollee in the application for membership; and does not
provide or arrange for replacement coverage that meets the
requirements of section 62D.121; shall pay a special assessment
to the state plan based upon the number of terminated
individuals who join the comprehensive health insurance plan as
authorized under section 62E.14, subdivisions 1, paragraph (d),
and 6. Such a contributing member shall pay the association an
amount equal to the average cost of an enrollee in the state
plan in the year in which the member terminated enrollees
multiplied by the total number of terminated enrollees who
enroll in the state plan.
The average cost of an enrollee in the state comprehensive
health insurance plan shall be determined by dividing the state
plan's total annual losses by the total number of enrollees from
that year. This cost will be assessed to the contributing
member who has terminated health coverage before the association
makes the annual determination of each contributing member's
liability as required under this section.
In the event that the contributing member is terminating
health coverage because of a loss of health care providers, the
commissioner may review whether or not the special assessment
established under this subdivision will have an adverse impact
on the contributing member or its enrollees or insureds,
including but not limited to causing the contributing member to
fall below statutory net worth requirements. If the
commissioner determines that the special assessment would have
an adverse impact on the contributing member or its enrollees or
insureds, the commissioner may adjust the amount of the special
assessment, or establish alternative payment arrangements to the
state plan. For health maintenance organizations regulated
under chapter 62D, the commissioner of health shall make the
determination regarding any adjustment in the special assessment
and shall transmit that determination to the commissioner of
commerce.
Sec. 16. Minnesota Statutes 1990, section 62E.11, is
amended by adding a subdivision to read:
Subd. 12. [FUNDING.] Notwithstanding subdivision 5, the
claims expenses and operating and administrative expenses of the
association incurred on or after January 1, 1994 shall be paid
from the health care access account established in section
16A.724, to the extent appropriated for that purpose by the
legislature. Any such expenses not paid from that account shall
be paid as otherwise provided in this section. All contributing
members shall adjust their premium rates to fully reflect
funding provided under this subdivision. The commissioner of
commerce or the commissioner of health, as appropriate, shall
require contributing members to prove compliance with this rate
adjustment requirement.
Sec. 17. [62E.141] [INCLUSION IN EMPLOYER-SPONSORED PLAN.]
No employee, or dependent of an employee, of an employer
who offers a health benefit plan, under which the employee or
dependent is eligible to enroll under chapter 62L, is eligible
to enroll, or continue to be enrolled, in the comprehensive
health association, except for enrollment or continued
enrollment necessary to cover conditions that are subject to an
unexpired preexisting condition limitation or exclusion under
the employer's health benefit plan. This section does not apply
to persons enrolled in the comprehensive health association as
of June 30, 1993.
Sec. 18. Minnesota Statutes 1990, section 62H.01, is
amended to read:
62H.01 [JOINT SELF-INSURANCE EMPLOYEE HEALTH PLAN.]
Any three two or more employers, excluding the state and
its political subdivisions as described in section 471.617,
subdivision 1, who are authorized to transact business in
Minnesota may jointly self-insure employee health, dental, or
short-term disability benefits. Joint plans must have a minimum
of 250 covered employees and meet all conditions and terms of
sections 62H.01 to 62H.08. Joint plans covering employers not
resident in Minnesota must meet the requirements of sections
62H.01 to 62H.08 as if the portion of the plan covering
Minnesota resident employees was treated as a separate plan. A
plan may cover employees resident in other states only if the
plan complies with the applicable laws of that state.
A multiple employer welfare arrangement as defined in
United States Code, title 29, section 1002(40)(a), is subject to
this chapter to the extent authorized by the Employee Retirement
Income Security Act of 1974, United States Code, title 29,
sections 1001 et seq.
Sec. 19. [REQUEST FOR ERISA EXEMPTION.]
The commissioner of commerce shall request and diligently
pursue an exemption from the federal preemption of state laws
relating to health coverage provided under employee welfare
benefit plans under the Employee Retirement Income Security Act
of 1974 (ERISA), United States Code, title 29, section 1144.
The scope of the exemption should permit the state to:
(1) require that employers participate in a state payroll
withholding system designed to pay for health coverage for
employees and dependents;
(2) regulate self-insured health plans to the same extent
as insurance companies; and
(3) enact or adopt other state laws relating to health
coverage that would, in the judgment of the commissioner of
commerce, further the public policies of this state.
In determining the scope of the exemption request and in
requesting and pursuing the exemption, the commissioner of
commerce shall seek the advice and assistance of the legislative
commission on health care access. The commissioner shall report
in writing to that commission at least quarterly regarding the
status of the exemption request.
Sec. 20. [COMMISSIONER OF COMMERCE STUDY.]
The commissioner of commerce shall study the operation of
the individual market and shall file a report and
recommendations with the legislature, no later than December 15,
1992. The study, report, and recommendations must:
(1) evaluate the extent to which the individual market and
the state's regulation of it can achieve the goals provided in
Minnesota Statutes, section 62L.01, subdivision 3;
(2) evaluate the need for and feasibility of a guaranteed
issue requirement in the individual market;
(3) make recommendations regarding the future of the
comprehensive health association.
Sec. 21. [REVIEW OF STANDARDIZED POLICY FORMS.]
The commissioner of commerce shall review the health care
policies currently in use in the state, other than specialized
and limited scope products such as dental insurance and hospital
indemnity products, and make recommendations to the legislature
by February 1, 1993, relating to standardized health care policy
forms to be used by all insurers, health service plans, or other
entities regulated under Minnesota Statutes, chapter 62A, 62C,
62E, or 62H.
Sec. 22. [STUDY OF HEALTHY LIFESTYLE PREMIUM REDUCTIONS.]
The commissioner of commerce shall study and make
recommendations to the legislature regarding whether health
benefits plans, as defined in Minnesota Statutes, section
62L.02, but including both individual and group plans, should be
permitted or required to offer premium discounts in recognition
of and to encourage healthy lifestyle behaviors. The
commissioner shall file the recommendations with the legislature
on or before December 15, 1992. The commissioner shall make
recommendations regarding:
(1) the types of lifestyle behaviors, including but not
limited to, nonuse of tobacco, nonuse of alcohol, and regular
exercise appropriate to the person's age and health status, that
should be eligible for premium discounts;
(2) the level or amounts of premium discounts that should
be permitted or required, including appropriateness of premium
discounts of up to 25 percent of the premium;
(3) the actuarial justification that the commissioner
should require for premium reductions;
(4) the extent to which health carriers can monitor
compliance with promised lifestyle behaviors and whether new
legislation could increase the monitoring ability or reduce its
cost; and
(5) any favorable or adverse impacts on the individual or
small group market. Any data on individuals collected under
this section and received by the commissioner, which has not
previously been public data, is private data on individuals.
This section shall not be interpreted as prohibiting any
premium discounts approved under current law by the commissioner
of commerce or by the commissioner of health or permitted under
this act.
Sec. 23. [REPEALER.]
Minnesota Statutes 1990, sections 62A.02, subdivisions 4
and 5, are repealed.
Sec. 24. [EFFECTIVE DATE.]
Section 11 is effective July 30, 1992. Sections 1 to 10,
12, 15, 16, 17, 18, and 23 are effective July 1, 1993, except
that section 1, subdivision 9, is effective the day following
final enactment. Sections 19, 20, 21, and 22 are effective the
day following final enactment.
ARTICLE 4
CHILDREN'S HEALTH PLAN EXPANSION
Section 1. [256.362] [REPORTS AND IMPLEMENTATION.]
Subdivision 1. [WELLNESS COMPONENT.] The commissioners of
human services and health shall recommend to the legislature, by
January 1, 1993, methods to incorporate discounts for wellness
factors of up to 25 percent into the health right plan premium
sliding scale. Beginning October 1, 1992, the commissioner of
human services shall inform health right plan enrollees of the
future availability of the wellness discount, and shall
encourage enrollees to incorporate wellness factors into their
lifestyles.
Subd. 2. [FEDERAL HEALTH INSURANCE CREDIT.] By October 1,
1992, the commissioners of human services and revenue shall
apply for any federal waivers or approvals necessary to allow
enrollees in state health care programs to assign the federal
health insurance credit component of the earned income tax
credit to the state.
Subd. 3. [COORDINATION OF MEDICAL ASSISTANCE AND THE
HEALTH RIGHT PLAN.] The commissioner shall develop and implement
a plan to combine medical assistance and health right plan
application and eligibility procedures. The plan may include
the following changes: (1) use of a single mail-in application;
(2) elimination of the requirement for personal interviews; (3)
postponing notification of paternity disclosure requirements;
(4) modifying verification requirements for pregnant women and
children; (5) using shorter forms for recertifying eligibility;
(6) expedited and more efficient eligibility determinations for
applicants; (7) expanded outreach efforts, including combined
marketing of the two plans; and (8) other changes that improve
access to services provided by the two programs. The plan may
include seeking the following changes in federal law: (1)
extension and expansion of exemptions for different eligibility
groups from Medicaid quality control sanctions; (2) changing
requirements for the redetermination of eligibility; (3)
eliminating asset tests for all children; and (4) other changes
that improve access to services provided by the two programs.
The commissioner shall seek any necessary federal approvals, and
any necessary changes in federal law. The commissioner shall
implement each element of the plan as federal approval is
received, and shall report to the legislature by January 1,
1993, on progress in implementing this plan.
Subd. 4. [PLAN FOR MANAGED CARE.] By January 1, 1993, the
commissioner of human services shall present a plan to the
legislature for providing all medical assistance and health
right plan services through managed care arrangements. The
commissioner shall apply to the secretary of health and human
services for any necessary federal waivers or approvals, and
shall begin to implement the plan for managed care upon receipt
of the federal waivers or approvals.
Subd. 5. [REPORT ON PURCHASES AT FULL COST.] By January 1,
1994, the commissioner shall report to the legislature on the
effect on average overall premium cost for the health right plan
of allowing families who are not eligible for a subsidy to
enroll in the health right plan at 100 percent of premium cost.
By January 1, 1995, the commissioner shall report to the
legislature on the effect on average overall premium cost for
the health right plan of allowing individuals who are not
eligible for a subsidy to enroll in the health right plan at 100
percent of premium cost. The commissioner shall recommend
whether enrollment for this group should begin.
Sec. 2. Minnesota Statutes 1990, section 256.936,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of this section
the following terms shall have the meanings given them:
(a) "Eligible persons" means children who are one year of
age or older but less than 18 years of age who have gross family
incomes that are equal to or less than 185 percent of the
federal poverty guidelines and who are not eligible for medical
assistance under chapter 256B or general assistance medical care
under chapter 256D and who are not otherwise insured for the
covered services. The period of eligibility extends from the
first day of the month in which the child's first birthday
occurs to the last day of the month in which the child becomes
18 years old.
(b) "Covered services" means children's health services.
(c) "Children's health services" means the health services
reimbursed under chapter 256B, with the exception of inpatient
hospital services, special education services, private duty
nursing services, orthodontic services, medical transportation
services, personal care assistant and case management services,
hospice care services, nursing home or intermediate care
facilities services, inpatient mental health services,
outpatient mental health services in excess of $1,000 per
enrolled child per 12-month eligibility period, and chemical
dependency services. Outpatient mental health services covered
under the children's health plan are limited to diagnostic
assessments, psychological testing, explanation of findings, and
individual, family, and group psychotherapy.
(d) "Eligible providers" means those health care providers
who provide children's covered health services to medical
assistance recipients under rules established by the
commissioner for that program. Reimbursement under this section
shall be at the same rates and conditions established for
medical assistance.
(e) (b) "Commissioner" means the commissioner of human
services.
(f) (c) "Gross family income" for farm and nonfarm
self-employed means income calculated using as the baseline the
adjusted gross income reported on the applicant's federal income
tax form for the previous year and adding back in reported
depreciation, carryover loss, and net operating loss amounts
that apply to the business in which the family is currently
engaged. Applicants shall report the most recent financial
situation of the family if it has changed from the period of
time covered by the federal income tax form. The report may be
in the form of percentage increase or decrease.
Sec. 3. Minnesota Statutes 1990, section 256.936,
subdivision 2, is amended to read:
Subd. 2. [PLAN ADMINISTRATION.] The children's health
right plan is established to promote access to
appropriate primary health care services to assure healthy
children and adults. The commissioner shall establish an office
for the state administration of this plan. The plan shall be
used to provide children's covered health services for eligible
persons. Payment for these services shall be made to all
eligible providers. The commissioner may shall adopt rules to
administer this section the health right plan. The commissioner
shall establish marketing efforts to encourage potentially
eligible persons to receive information about the program and
about other medical care programs administered or supervised by
the department of human services. A toll-free telephone number
must be used to provide information about medical programs and
to promote access to the covered services. The commissioner
shall manage spending for the health right plan in a manner that
maintains a minimum reserve equal to five percent of the
expected cost of state premium subsidies. The commissioner must
make a quarterly assessment of the expected expenditures for the
covered services and the appropriation for the remainder of the
current fiscal year and for the following two fiscal
years. Based on this assessment the commissioner may limit
enrollments and target former aid to families with dependent
children recipients. If sufficient money is not available to
cover all costs incurred in one quarter, the commissioner may
seek an additional authorization for funding from the
legislative advisory committee. The estimated expenditure shall
be compared to an estimate of the revenues that will be
deposited in the health care access fund. Based on this
comparison, and after consulting with the chairs of the house
appropriations committee and the senate finance committee, and
the legislative commission on health care access, the
commissioner shall make adjustments as necessary to ensure that
expenditures remain within the limits of available revenues.
The adjustments the commissioner may use must be implemented in
this order: first, stop enrollment of single adults and
households without children; second, upon 45 days' notice, stop
coverage of single adults and households without children
already enrolled in the health right plan; third, upon 90 days'
notice, decrease the premium subsidy amounts by ten percent for
families with gross annual income above 200 percent of the
federal poverty guidelines; fourth, upon 90 days' notice,
decrease the premium subsidy amounts by ten percent for families
with gross annual income at or below 200 percent; and fifth,
require applicants to be uninsured for at least six months prior
to eligibility in the health right plan. If these measures are
insufficient to limit the expenditures to the estimated amount
of revenue, the commissioner may further limit enrollment or
decrease premium subsidies.
If the commissioner determines that, despite adjustments
made as authorized under this subdivision, estimated costs will
exceed the forecasted amount of available revenues other than
the reserve, the commissioner may, with the approval of the
commissioner of finance, use all or part of the reserve to cover
the costs of the program.
The commissioner may adopt emergency rules to govern
implementation of this section. Notwithstanding section 14.35,
the emergency rules adopted under this section shall remain in
effect for 720 days.
Sec. 4. Minnesota Statutes 1990, section 256.936, is
amended by adding a subdivision to read:
Subd. 2a. [COVERED HEALTH SERVICES.] (a) [COVERED
SERVICES.] "Covered health services" means the health services
reimbursed under chapter 256B, with the exception of inpatient
hospital services, special education services, private duty
nursing services, orthodontic services, medical transportation
services, personal care assistant and case management services,
hospice care services, nursing home or intermediate care
facilities services, inpatient mental health services,
outpatient mental health services in excess of $1,000 per adult
enrollee and $2,500 per child enrollee per 12-month eligibility
period, and chemical dependency services. Outpatient mental
health services covered under the health right plan are limited
to diagnostic assessments, psychological testing, explanation of
findings, and individual, family, and group psychotherapy.
Medication management by a physician is not subject to the
$1,000 and $2,500 limitations on outpatient mental health
services. Covered health services shall be expanded as provided
in this subdivision.
(b) [ALCOHOL AND DRUG DEPENDENCY.] Beginning October 1,
1992, covered health services shall include up to ten hours per
year of individual outpatient treatment of alcohol or drug
dependency by a qualified health professional or outpatient
program. Two hours of group treatment count as one hour of
individual treatment.
Persons who may need chemical dependency services under the
provisions of this chapter shall be assessed by a local agency
as defined under section 254B.01, and under the assessment
provisions of section 254A.03, subdivision 3. Persons who are
recipients of medical benefits under the provisions of this
chapter and who are financially eligible for consolidated
chemical dependency treatment fund services provided under the
provisions of chapter 254B shall receive chemical dependency
treatment services under the provisions of chapter 254B only if:
(1) they have exhausted the chemical dependency benefits
offered under this chapter; or
(2) an assessment indicates that they need a level of care
not provided under the provisions of this chapter.
(c) [INPATIENT HOSPITAL SERVICES.] Beginning July 1, 1993,
covered health services shall include inpatient hospital
services, subject to those limitations necessary to coordinate
the provision of these services with eligibility under the
medical assistance spenddown. The inpatient hospital benefit
for adult enrollees not eligible for medical assistance is
subject to an annual benefit limit of $10,000. The commissioner
shall provide enrollees with at least 60 days' notice of
coverage for inpatient hospital services and any premium
increase associated with the inclusion of this benefit.
(d) [EMERGENCY MEDICAL TRANSPORTATION SERVICES.] Beginning
July 1, 1993, covered health services shall include emergency
medical transportation services.
(e) [FEDERAL WAIVERS AND APPROVALS.] The commissioner shall
coordinate the provision of hospital inpatient services under
the health right plan with enrollee eligibility under the
medical assistance spend-down, and shall apply to the secretary
of health and human services for any necessary federal waivers
or approvals.
(f) [COPAYMENTS AND COINSURANCE.] The health right benefit
plan shall include the following copayments and coinsurance
requirements:
(1) ten percent for inpatient hospital services for adult
enrollees not eligible for medical assistance, subject to an
annual out-of-pocket maximum of $2,000 per individual and $3,000
per family;
(2) 50 percent for adult dental services, except for
preventive services;
(3) $3 per prescription for adult enrollees; and
(4) $25 for eyeglasses for adult enrollees.
Enrollees who would be eligible for medical assistance with
a spenddown must pay the coinsurance amount up to the spenddown
limit or the coinsurance amount, whichever is less, in order to
become eligible for the medical assistance program.
Sec. 5. Minnesota Statutes 1990, section 256.936, is
amended by adding a subdivision to read:
Subd. 2b. [ELIGIBLE PERSONS.] (a) [CHILDREN.] "Eligible
persons" means children who are one year of age or older but
less than 18 years of age who have gross family incomes that are
equal to or less than 185 percent of the federal poverty
guidelines and who are not eligible for medical assistance under
chapter 256B and who are not otherwise insured for the covered
services. The period of eligibility extends from the first day
of the month in which the child's first birthday occurs to the
last day of the month in which the child becomes 18 years old.
Eligibility for the health right plan shall be expanded as
provided in paragraphs (b) to (e). Under paragraphs (b) to (e),
parents who enroll in the health right plan must also enroll
their children and dependent siblings, if the children and their
dependent siblings are eligible. Children and dependent
siblings may be enrolled separately without enrollment by
parents. However, if one parent in the household enrolls, both
parents must enroll, unless other insurance is available. If
one child from a family is enrolled, all children must be
enrolled, unless other insurance is available. Families cannot
choose to enroll only certain uninsured members. For purposes
of this subdivision, a "dependent sibling" means an unmarried
child who is a full-time student under the age of 25 years who
is financially dependent upon his or her parents. Proof of
school enrollment will be required.
(b) [FAMILIES WITH CHILDREN.] Beginning October 1, 1992,
"eligible persons" means children eligible under paragraph (a),
and parents and dependent siblings residing in the same
household as a child eligible under paragraph (a). Individuals
who initially enroll in the health right plan under the
eligibility criteria in this paragraph shall remain eligible for
the health right plan, regardless of age, place of residence
within Minnesota, or the presence or absence of children in the
same household, as long as all other eligibility requirements
are met and continuous enrollment in the health right plan or
medical assistance is maintained.
(c) [CONTINUATION OF ELIGIBILITY.] Beginning October 1,
1992, individuals who initially enrolled in the health right
plan under the eligibility criteria in paragraph (a) or (b)
remain eligible even if their gross income after enrollment
exceeds 185 percent of the federal poverty guidelines, subject
to any premium required under subdivision 4a, as long as all
other eligibility requirements are met and continuous enrollment
in the health right plan or medical assistance is maintained.
(d) [FAMILIES WITH CHILDREN; ELIGIBILITY BASED ON
PERCENTAGE OF INCOME PAID FOR HEALTH COVERAGE.] Beginning
January 1, 1993, "eligible persons" means children, parents, and
dependent siblings residing in the same household who are not
eligible for medical assistance under chapter 256B. These
persons are eligible for coverage through the health right plan
but must pay a premium as determined under subdivisions 4a and
4b. Individuals and families whose income is greater than the
limits established under subdivision 4b may not enroll in the
health right plan. Individuals who initially enroll in the
health right plan under the eligibility criteria in this
paragraph remain eligible for the health right plan, regardless
of age, place of residence within Minnesota, or the presence or
absence of children in the same household, as long as all other
eligibility requirements are met and continuous enrollment in
the health right plan or medical assistance is maintained.
(e) [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO
CHILDREN.] Beginning July 1, 1994, "eligible persons" means all
families and individuals who are not eligible for medical
assistance under chapter 256B. These persons are eligible for
coverage through the health right plan but must pay a premium as
determined under subdivisions 4a and 4b. Individuals and
families whose income is greater than the limits established
under subdivision 4b may not enroll in the health right plan.
Sec. 6. Minnesota Statutes 1990, section 256.936,
subdivision 3, is amended to read:
Subd. 3. [APPLICATION PROCEDURES.] Applications and other
information must be made available to provider offices, local
human services agencies, school districts, public and private
elementary schools in which 25 percent or more of the students
receive free or reduced price lunches, community health offices,
and Women, Infants and Children (WIC) program sites. These
sites may accept applications, collect the enrollment fee or
initial premium fee, and forward the forms and fees to the
commissioner. Otherwise, applicants may apply directly to the
commissioner. The commissioner may shall use individuals'
social security numbers as identifiers for purposes of
administering the plan and conduct data matches to verify
income. Applicants shall submit evidence of family income,
earned and unearned, that will be used is necessary to verify
income eligibility. The commissioner shall perform random
audits to verify reported income and eligibility. The
commissioner may execute data sharing arrangements with the
department of revenue and any other governmental agency in order
to perform income verification related to eligibility and
premium payment under the health right plan. The effective date
of coverage is the first day of the month following the month in
which a complete application is entered to the eligibility file
and the first premium payment has been received. Benefits are
not available until the day following discharge if an enrollee
is hospitalized on the first day of coverage. Notwithstanding
any other law to the contrary, benefits under this section are
secondary to a plan of insurance or benefit program under which
an eligible person may have coverage and the commissioner shall
use cost avoidance techniques to ensure coordination of any
other health coverage for eligible persons. The commissioner
shall identify eligible persons who may have coverage or
benefits under other plans of insurance or who become eligible
for medical assistance.
Sec. 7. Minnesota Statutes 1990, section 256.936,
subdivision 4, is amended to read:
Subd. 4. [ENROLLMENT AND PREMIUM FEE.] (a) [ENROLLMENT
FEE.] Until October 1, 1992, an annual enrollment fee of $25,
not to exceed $150 per family, is required from eligible persons
for children's covered health services.
(b) [PREMIUM PAYMENTS.] Beginning October 1, 1992, the
commissioner shall require health right plan enrollees to pay a
premium based on a sliding scale, as established under
subdivision 4a. Applicants who are eligible under subdivision
2b, paragraph (a), are exempt from this requirement until July
1, 1993, if the application is received by the health right plan
staff on or before September 30, 1992. Before July 1, 1993,
these individuals shall continue to pay the annual enrollment
fee required by paragraph (a).
(c) [ADMINISTRATION.] Enrollment and premium fees are
dedicated to the commissioner for the children's health right
plan program. The commissioner shall make an annual
redetermination of continued eligibility and identify people who
may become eligible for medical assistance. The commissioner
shall develop and implement procedures to: (1) require
enrollees to report changes in income; (2) adjust sliding scale
premium payments, based upon changes in enrollee income; and (3)
disenroll enrollees from the health right plan for failure to
pay required premiums. Premiums are calculated on a calendar
month basis and may be paid on a monthly or quarterly basis,
with the first payment due upon notice from the commissioner of
the premium amount required. Premium payment is required before
enrollment is complete and to maintain eligibility in the health
right plan. Nonpayment of the premium will result in
disenrollment from the plan within one calendar month after the
due date. Persons disenrolled for nonpayment may not reenroll
until four calendar months have elapsed.
Sec. 8. Minnesota Statutes 1990, section 256.936, is
amended by adding a subdivision to read:
Subd. 4a. [ELIGIBILITY FOR SUBSIDIZED PREMIUMS BASED ON
SLIDING SCALE.] (a) [GENERAL REQUIREMENTS.] Families and
individuals who enroll on or after October 1, 1992, are eligible
for subsidized premium payments based on a sliding scale under
subdivision 4b only if the family or individual meets the
requirements in paragraphs (b) to (d). Children already
enrolled in the health right plan as of September 30, 1992, are
eligible for subsidized premium payments without meeting these
requirements, as long as they maintain continuous coverage in
the health right plan or medical assistance.
Families and individuals who initially enrolled in the
health right plan under subdivision 2b, and whose income
increases above the limits established in subdivision 4b, may
continue enrollment and pay the full cost of coverage.
(b) [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED COVERAGE.]
To be eligible for subsidized premium payments based on a
sliding scale, a family or individual must not have access to
subsidized health coverage through an employer, and must not
have had access to subsidized health coverage through an
employer for the 18 months prior to application for subsidized
coverage under the health right plan. The requirement that the
family or individual must not have had access to
employer-subsidized coverage during the previous 18 months does
not apply if employer-subsidized coverage was lost for reasons
that would not disqualify the individual for unemployment
benefits under section 268.09 and the family or individual has
not had access to employer-subsidized coverage since the
layoff. For purposes of this requirement, subsidized health
coverage means health coverage for which the employer pays at
least 50 percent of the cost of coverage for the employee,
excluding dependent coverage, or a higher percentage as
specified by the commissioner. Children are eligible for
employer-subsidized coverage through either parent, including
the noncustodial parent. The commissioner must treat employer
contributions to Internal Revenue Code Section 125 plans as
qualified employer subsidies toward the cost of health coverage
for employees for purposes of this paragraph.
(c) [PERIOD UNINSURED.] To be eligible for subsidized
premium payments based on a sliding scale, families and
individuals initially enrolled in the health right plan under
subdivision 2b, paragraphs (d) and (e), must have had no health
coverage for at least four months prior to application. The
commissioner may change this eligibility criterion for sliding
scale premiums without complying with rulemaking requirements in
order to remain within the limits of available appropriations.
The requirement of at least four months of no health coverage
prior to application for the health right plan does not apply to
families, children, and individuals who want to apply for the
health right plan upon termination from the medical assistance
program, general assistance medical care program, or coverage
under a regional demonstration project for the uninsured funded
under section 256B.73, the Hennepin county assured care program,
or the Group Health, Inc., community health plan. This
paragraph does not apply to families and individuals initially
enrolled under subdivision 2b, paragraphs (a) and (b).
Sec. 9. Minnesota Statutes 1990, section 256.936, is
amended by adding a subdivision to read:
Subd. 4b. [PREMIUMS.] (a) Each individual or family
enrolled in the health right plan shall pay a premium determined
according to a sliding fee based on the cost of coverage as a
percentage of the individual's or family's gross family income.
(b) The commissioner shall establish sliding scales to
determine the percentage of gross family income that households
at different income levels must pay to obtain coverage through
the health right plan. The sliding scale must be based on the
enrollee's gross family income, as defined in subdivision 1,
paragraph (c), during the previous four months. The sliding
scale must provide separate sliding scales for individuals,
two-person households, and households of three or more.
(c) Beginning July 1, 1993, the sliding scales begin with a
premium of 1.5 percent of gross family income for individuals
with incomes below the limits for the medical assistance program
set at 133-1/3 percent of the AFDC payment standard and proceed
through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8,
4.8, 5.9, 7.4, and 8.8. These percentages are matched to evenly
spaced income steps ranging from the medical assistance income
limit to a gross monthly income of $1,600 for an individual,
$2,160 for a household of two, $2,720 for a household of three,
$3,280 for a household of four, $3,840 for a household of five,
and $4,400 for households of six or more persons. For the
period October 1, 1992 through June 30, 1993, the commissioner
shall employ a sliding scale that sets required premiums at
percentages of gross family income equal to two-thirds of the
percentages specified in this paragraph.
(d) An individual or family whose gross monthly income is
above the amount specified in paragraph (c) is not eligible for
the plan.
(e) The premium for coverage under the health right plan
may be collected through wage withholding with the consent of
the employer and the employee.
(f) The sliding fee scale and percentages are not subject
to the provisions of chapter 14.
Sec. 10. Minnesota Statutes 1990, section 256.936, is
amended by adding a subdivision to read:
Subd. 4c. [RESIDENCY.] (a) The legislature finds that the
enactment of a comprehensive health plan for uninsured
Minnesotans creates a risk that persons needing medical care
will migrate to the state for the primary purpose of obtaining
medical care subsidized by the state. The risk of migration
undermines the state's ability to provide to legitimate state
residents a valuable and necessary health care program which is
an important component of the state's comprehensive cost
containment and health care system reform plan. Intent-based
residency requirements, which are expressly authorized under
decisions of the United States Supreme Court, are an
unenforceable and ineffective method of denying benefits to
those persons the Supreme Court has stated may legitimately be
denied eligibility for state programs. If the state is unable
to limit eligibility to legitimate permanent residents of the
state, the state faces a significant risk that it will be forced
to reduce the eligibility and benefits it would otherwise
provide to Minnesotans. The legislature finds that a durational
residence requirement is a legitimate, objective, enforceable
standard for determining whether a person is a permanent
resident of the state. The legislature also finds low-income
persons who have not lived in the state for the required time
period will have access to necessary health care services
through the general assistance medical care program, the medical
assistance program, and public and private charity care programs.
(b) To be eligible for health coverage under the health
right program, families and individuals must be permanent
residents of Minnesota.
(c) For purposes of this subdivision, a permanent Minnesota
resident is a person who has demonstrated, through persuasive
and objective evidence, that the person is domiciled in the
state and intends to live in the state permanently.
(d) To be eligible, all applicants must demonstrate the
requisite intent to live in the state permanently by:
(1) showing that the applicant maintains a residence at a
verified address other than a place of public accommodation,
through the use of evidence of residence described in section
256D.02, subdivision 12a, clause (1);
(2) demonstrating that the applicant has been continuously
domiciled in the state for no less than 180 days immediately
before the application; and
(3) signing an affidavit declaring that (A) the applicant
currently resides in the state and intends to reside in the
state permanently; and (B) the applicant did not come to the
state for the primary purpose of obtaining medical coverage or
treatment.
(e) An individual or family that moved to Minnesota
primarily to obtain medical treatment or health coverage for a
pre-existing condition is not a permanent resident.
(f) If the 180-day requirement in paragraph (d), clause
(2), is determined by a court to be unconstitutional, the
commissioner of human services shall impose a 12-month
pre-existing condition exclusion on coverage for persons who
have been domiciled in the state for less than 180 days.
(g) If any paragraph, sentence, clause, or phrase of this
subdivision is for any reason determined by a court to be
unconstitutional, the decision shall not affect the validity of
the remaining portions of the subdivision. The legislature
declares that it would have passed each paragraph, sentence,
clause, and phrase in this subdivision, irrespective of the fact
that any one or more paragraphs, sentences, clauses, or phrases
is declared unconstitutional.
Sec. 11. Minnesota Statutes 1991 Supplement, section
256.936, subdivision 5, is amended to read:
Subd. 5. [APPEALS.] If the commissioner suspends, reduces,
or terminates eligibility for the children's health right plan,
or services provided under the children's health right plan, the
commissioner must provide notification according to the laws and
rules governing the medical assistance program. A children's
health right plan applicant or enrollee aggrieved by a
determination of the commissioner has the right to appeal the
determination according to section 256.045.
Sec. 12. Minnesota Statutes 1990, section 256B.057, is
amended by adding a subdivision to read:
Subd. 2a. [NO ASSET TEST FOR CHILDREN.] Eligibility for
medical assistance for a person under age 21 must be determined
without regard to asset standards established in section
256B.056.
Sec. 13. [256B.0644] [PARTICIPATION REQUIRED FOR
REIMBURSEMENT UNDER OTHER STATE HEALTH CARE PROGRAMS.]
A vendor of medical care, as defined in section 256B.02,
subdivision 7, and a health maintenance organization, as defined
in chapter 62D, must participate as a provider or contractor in
the medical assistance program, general assistance medical care
program, and the health right plan as a condition of
participating as a provider in health insurance plans or
contractor for state employees established under section 43A.18,
the public employees insurance plan under section 43A.316, the
workers' compensation system under section 176.135, and
insurance plans provided through the Minnesota comprehensive
health association under sections 62E.01 to 62E.17. For
providers other than health maintenance organizations,
participation in the medical assistance program means that (1)
the provider accepts new medical assistance patients or (2) at
least 20 percent of the provider's patients are covered by
medical assistance, general assistance medical care, or the
health right plan as their primary source of coverage. The
commissioner shall establish participation requirements for
health maintenance organizations. The commissioner shall
provide lists of participating medical assistance providers on a
quarterly basis to the commissioner of employee relations, the
commissioner of labor and industry, and the commissioner of
commerce. Each of the commissioners shall develop and implement
procedures to exclude as participating providers in the program
or programs under their jurisdiction those providers who do not
participate in the medical assistance program.
Sec. 14. [PROVIDER PAYMENT INCREASES.]
Subdivision 1. [HOSPITAL OUTPATIENT REIMBURSEMENT.] For
outpatient hospital facility fee payments for services rendered
on or after October 1, 1992, the commissioner of human services
shall pay the lower of (1) submitted charge, or (2) 32 percent
above the rate in effect on June 30, 1992, except for those
services for which there is a federal maximum allowable
payment. Services for which there is a federal maximum
allowable payment shall be paid at the lower of (1) submitted
charge, or (2) the federal maximum allowable payment. Total
aggregate payment for outpatient hospital facility fee services
shall not exceed the Medicare upper limit. If it is determined
that a provision of this section conflicts with existing or
future requirements of the United States government with respect
to federal financial participation in medical assistance, the
federal requirements prevail. The commissioner may, in the
aggregate, prospectively reduce payment rates to avoid reduced
federal financial participation resulting from rates that are in
excess of the Medicare upper limitations.
Subd. 2. [PHYSICIAN AND DENTAL REIMBURSEMENT.] (a) The
physician reimbursement increase provided in Minnesota Statutes,
section 256B.74, subdivision 2, shall not be implemented.
Effective for services rendered on or after October 1, 1992, the
commissioner shall make payments for physician services as
follows:
(1) payment for level one Health Care Finance
Administration's common procedural coding system (HCPCS) codes
titled "office and other outpatient services," "preventive
medicine new and established patient," "delivery, antepartum,
and postpartum care," "critical care," caesarean delivery and
pharmacologic management provided to psychiatric patients, and
HCPCS level three codes for enhanced services for prenatal high
risk, shall be paid at the lower of (i) submitted charges, or
(ii) 25 percent above the rate in effect on June 30, 1992. If
the rate on any procedure code within these categories is
different than the rate that would have been paid under the
methodology in Minnesota Statutes, section 256B.74, subdivision
2, then the larger rate shall be paid;
(2) payments for all other services shall be paid at the
lower of (i) submitted charges, or (ii) 15.4 percent above the
rate in effect on June 30, 1992; and
(3) all physician rates shall be converted from the 50th
percentile of 1982 to the 50th percentile of 1989, less the
percent in aggregate necessary to equal the above increases.
(b) The dental reimbursement increase provided in Minnesota
Statutes, section 256B.74, subdivision 5, shall not be
implemented. Effective for services rendered on or after
October 1, 1992, the commissioner shall make payments for dental
services as follows:
(1) dental services shall be paid at the lower of (i)
submitted charges, or (ii) 25 percent above the rate in effect
on June 30, 1992; and
(2) dental rates shall be converted from the 50th
percentile of 1982 to the 50th percentile of 1989, less the
percent in aggregate necessary to equal the above increases.
Subd. 3. [CONTINGENT ON ENACTMENT OF
APPROPRIATIONS.] Subdivisions 1 and 2 are effective only if
money is appropriated to the commissioner of human services to
cover the entire state cost of the increases.
Sec. 15. [COORDINATION OF STATE HEALTH CARE PURCHASING.]
The commissioner of administration shall convene an
interagency task force to develop a plan for coordinating the
health care programs administered by state agencies and local
governments in order to improve the efficiency and quality of
health care delivery and make the most effective use of the
state's market leverage and expertise in contracting and working
with health plans and health care providers. The commissioner
shall present to the legislature, by January 1, 1994,
recommendations to: (1) improve the effectiveness of public
health care purchasing; and (2) streamline and consolidate
health care delivery, through merger, transfer, or
reconfiguration of existing health care and health coverage
programs. At the request of the commissioner of administration,
the commissioners of other state agencies and units of local
government shall provide assistance in evaluating and
coordinating existing state and local health care programs.
Sec. 16. [STUDY ON PREMIUMS AND BENEFITS.]
The commissioner of human services shall study the cost of
health right premiums and the level of premium subsidies in
relationship to the benefits provided. This study must include
a comparison of the additional enrollee premium costs associated
with the provision of an inpatient hospital benefit beginning
July 1, 1993. Based on this analysis, the commissioner shall
report to the legislative commission on health care access by
January 15, 1993, on whether the premiums and subsidy level for
the health right plan should be adjusted.
Sec. 17. [PHASE-OUT OF THE CHILDREN'S HEALTH PLAN.]
Notwithstanding contrary provisions of Minnesota Statutes,
section 256.936, the commissioner shall continue to accept
enrollments in the children's health plan until July 1, 1993,
using the eligibility and coverage requirements in effect prior
to October 1, 1992, until the commissioner projects that the
total enrollment in the children's health plan will exhaust the
fiscal year 1993 appropriation for the children's health plan.
These enrollees pay the annual fee established in Minnesota
Statutes, section 256.936, subdivision 4, until July 1, 1993.
Sec. 18. [IMPACT OF HEALTH RIGHT ON CHILDREN'S HEALTH PLAN
ENROLLEE.]
The commissioner of human services shall examine the impact
of health right plan premium costs on access to health care for
children's health plan enrollees. The commissioner shall
examine whether health right plan premiums are affordable for
children's health plan enrollees, and shall examine the degree
to which children's health plan enrollees fail to continue
coverage through the health right plan for financial reasons.
The commissioner shall present recommendations to the
legislature by February 15, 1993, on methods to ensure continued
access to health care coverage for children's health plan
enrollees.
Sec. 19. [INSTRUCTION TO REVISOR.]
(a) The revisor of statutes is directed to change the words
"children's health plan" to "health right plan" wherever they
appear in the next edition of Minnesota Statutes.
(b) The revisor of statutes is directed to recodify the
subdivisions of Minnesota Statutes, section 256.936 as separate
sections in chapter 256, and to recodify paragraphs as
subdivisions within these sections.
Sec. 20. [EFFECTIVE DATE.]
Section 13, relating to participation in state health care
programs, is effective October 1, 1992.
ARTICLE 5
RURAL HEALTH INITIATIVES
Section 1. Minnesota Statutes 1990, section 16A.124, is
amended by adding a subdivision to read:
Subd. 4a. [INVOICE ERRORS; DEPARTMENT OF HUMAN SERVICES.]
For purposes of department of human services payments to
hospitals receiving reimbursement under the medical assistance
and general assistance medical care programs, if an invoice is
incorrect, defective, or otherwise improper, the department of
human services must notify the hospital of all errors, within 30
days of discovery of the errors.
Sec. 2. Minnesota Statutes 1990, section 43A.17,
subdivision 9, is amended to read:
Subd. 9. [POLITICAL SUBDIVISION SALARY LIMIT.] The salary
of a person employed by a statutory or home rule charter city,
county, town, school district, metropolitan or regional agency,
or other political subdivision of this state, or employed under
section 422A.03, may not exceed 95 percent of the salary of the
governor as set under section 15A.082, except as provided in
this subdivision. Deferred compensation and payroll allocations
to purchase an individual annuity contract for an employee are
included in determining the employee's salary. The salary of a
medical doctor or doctor of osteopathy occupying a position that
the governing body of the political subdivision has determined
requires an M.D. or D.O. degree is excluded from the limitation
in this subdivision. The commissioner may increase the
limitation in this subdivision for a position that the
commissioner has determined requires special expertise
necessitating a higher salary to attract or retain a qualified
person. The commissioner shall review each proposed increase
giving due consideration to salary rates paid to other persons
with similar responsibilities in the state. The commissioner
may not increase the limitation until the commissioner has
presented the proposed increase to the legislative commission on
employee relations and received the commission's recommendation
on it. The recommendation is advisory only. If the commission
does not give its recommendation on a proposed increase within
30 days from its receipt of the proposal, the commission is
deemed to have recommended approval.
Sec. 3. [62A.66] [PARTICIPATING PROVIDERS.]
Subdivision 1. [HEALTH PLAN COMPANY.] For purposes of this
section, "health plan company" means any entity governed by
chapter 62A, 62C, 62D, 62E, 62H, or 64B, or section 471.617,
subdivision 2, that offers, sells, issues, or renews health
coverage in this state. Health plan company does not include an
entity that sells only policies designed primarily to provide
coverage on a per diem, fixed indemnity, or nonexpense-incurred
basis, or policies that provide only accident coverage.
Subd. 2. [ACCEPTANCE AS PARTICIPATING PROVIDER.] A health
plan company shall not exclude, as a participating provider, a
physician who is licensed under chapter 147 and meets the
requirements of section 147.02, subdivision 1, paragraph (b),
solely because the physician has not completed a full residency
or is not board certified, if:
(1) the physician meets all other requirements for serving
as a participating provider;
(2) the physician has completed a minimum of two years
residency in any specialty;
(3) the physician has not been disciplined by the board of
medical practice under section 147.091;
(4) the physician is credentialed by and has staff
privileges at a hospital, or is employed by a medical clinic,
located in an area designated by the federal government as
either a health personnel shortage area or a medically
underserved area;
(5) the medical clinic at which the physician practices was
part of the provider network of a health plan company, and that
health plan company provides health care services to a
significant number of persons residing in the community in which
the medical clinic is located, many of whom had formerly
received services at the medical clinic; and
(6) the medical clinic and the hospital at which the
physician has staff privileges are the only providers of 24-hour
emergency services in the county.
Sec. 4. Minnesota Statutes 1990, section 144.147,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITION.] "Eligible rural hospital"
means any nonfederal, general acute care hospital that:
(1) is either located in a rural area, as defined in the
federal Medicare regulations, Code of Federal Regulations, title
42, section 405.1041, or located in a community with a
population of less than 5,000, according to United States Census
Bureau statistics, outside the seven-county metropolitan area;
(2) has 100 or fewer beds;
(3) has experienced net income losses in at least two of
the three most recent consecutive hospital fiscal years for
which audited financial information is available;
(4) is not for profit; and
(5) (4) has not been awarded a grant under the federal
rural health transition grant program.
Sec. 5. Minnesota Statutes 1990, section 144.147,
subdivision 3, is amended to read:
Subd. 3. [CONSIDERATION OF GRANTS.] In determining which
hospitals will receive grants under this section, the
commissioner shall take into account:
(1) improving community access to hospital or health
services;
(2) changes in service populations;
(3) demand for ambulatory and emergency services;
(4) the extent that the health needs of the community are
not currently being met by other providers in the service area;
(5) the need to recruit and retain health professionals;
and
(6) the involvement and extent of support of the community
and local health care providers; and
(7) the financial condition of the hospital.
Sec. 6. Minnesota Statutes 1990, section 144.147,
subdivision 4, is amended to read:
Subd. 4. [ALLOCATION OF GRANTS.] (a) Eligible hospitals
must apply to the commissioner no later than September 1,
1990, of each year for grants awarded in the 1991 state fiscal
year; and no later than September 1, 1990, for grants awarded in
the 1992 state for the fiscal year beginning the following July
1.
(b) The commissioner may award at least two grants for each
fiscal year. The commissioner must make a final decision on the
funding of each application within 60 days of the deadline for
receiving applications.
(c) Each relevant community health board has 30 days in
which to review and comment to the commissioner on grant
applications from hospitals in their community health service
area.
(d) In determining which hospitals will receive grants
under this section, the commissioner shall consider the
following factors:
(1) Description of the problem, description of the project,
and the likelihood of successful outcome of the project. The
applicant must explain clearly the nature of the health services
problems in their service area, how the grant funds will be
used, what will be accomplished, and the results expected. The
applicant should describe achievable objectives, a timetable,
and roles and capabilities of responsible individuals and
organizations.
(2) The extent of community support for the hospital and
this proposed project. The applicant should demonstrate support
for the hospital and for the proposed project from other local
health service providers and from local community and government
leaders. Evidence of such support may include past commitments
of financial support from local individuals, organizations, or
government entities; and commitment of financial support,
in-kind services or cash, for this project.
(3) The comments, if any, resulting from a review of the
application by the community health board in whose community
health service area the hospital is located.
(e) In evaluating applications, the commissioner shall
score each application on a 100 point scale, assigning the
maximum of 70 points for an applicant's understanding of the
problem, description of the project, and likelihood of
successful outcome of the project; and a maximum of 30 points
for the extent of community support for the hospital and this
project. The commissioner may also take into account other
relevant factors.
(f) A grant to a hospital, including hospitals that submit
applications as consortia, may not exceed $50,000 a year and may
not exceed a term of two years. Prior to the receipt of any
grant, the hospital must certify to the commissioner that at
least one-half of the amount, which may include in-kind
services, is available for the same purposes from nonstate
sources. A hospital receiving a grant under this section may
use the grant for any expenses incurred in the development of
strategic plans or the implementation of transition projects
with respect to which the grant is made. Project grants may not
be used to retire debt incurred with respect to any capital
expenditure made prior to the date on which the project is
initiated.
Sec. 7. [144.1481] [RURAL HEALTH ADVISORY COMMITTEE.]
Subdivision 1. [ESTABLISHMENT; MEMBERSHIP.] The
commissioner of health shall establish a 15-member rural health
advisory committee. The committee shall consist of the
following members, all of whom must reside outside the
seven-county metropolitan area, as defined in section 473.121,
subdivision 2:
(1) two members from the house of representatives of the
state of Minnesota, one from the majority party and one from the
minority party;
(2) two members from the senate of the state of Minnesota,
one from the majority party and one from the minority party;
(3) a volunteer member of an ambulance service based
outside the seven-county metropolitan area;
(4) a representative of a hospital located outside the
seven-county metropolitan area;
(5) a representative of a nursing home located outside the
seven-county metropolitan area;
(6) a medical doctor or doctor of osteopathy licensed under
chapter 147;
(7) a midlevel practitioner;
(8) a registered nurse or licensed practical nurse;
(9) a licensed health care professional from an occupation
not otherwise represented on the committee;
(10) a representative of an institution of higher education
located outside the seven-county metropolitan area that provides
training for rural health care providers; and
(11) three consumers, at least one of whom must be an
advocate for persons who are mentally ill or developmentally
disabled.
The commissioner will make recommendations for committee
membership. Committee members will be appointed by the
governor. In making appointments, the governor shall ensure
that appointments provide geographic balance among those areas
of the state outside the seven-county metropolitan area. The
chair of the committee shall be elected by the members. The
terms, compensation, and removal of members are governed by
section 15.059.
Subd. 2. [DUTIES.] The advisory committee shall:
(1) advise the commissioner and other state agencies on
rural health issues;
(2) provide a systematic and cohesive approach toward rural
health issues and rural health care planning, at both a local
and statewide level;
(3) develop and evaluate mechanisms to encourage greater
cooperation among rural communities and among providers;
(4) recommend and evaluate approaches to rural health
issues that are sensitive to the needs of local communities; and
(5) develop methods for identifying individuals who are
underserved by the rural health care system.
Subd. 3. [STAFFING; OFFICE SPACE; EQUIPMENT.] The
commissioner shall provide the advisory committee with staff
support, office space, and access to office equipment and
services.
Sec. 8. [144.1482] [OFFICE OF RURAL HEALTH.]
Subdivision 1. [DUTIES.] The office of rural health in
conjunction with the University of Minnesota medical schools and
other organizations in the state which are addressing rural
health care problems shall:
(1) establish and maintain a clearinghouse for collecting
and disseminating information on rural health care issues,
research findings, and innovative approaches to the delivery of
rural health care;
(2) coordinate the activities relating to rural health care
that are carried out by the state to avoid duplication of
effort;
(3) identify federal and state rural health programs and
provide technical assistance to public and nonprofit entities,
including community and migrant health centers, to assist them
in participating in these programs;
(4) assist rural communities in improving the delivery and
quality of health care in rural areas and in recruiting and
retaining health professionals; and
(5) carry out the duties assigned in section 144.1483.
Subd. 2. [CONTRACTS.] To carry out these duties, the
office may contract with or provide grants to public and
private, nonprofit entities.
Sec. 9. [144.1483] [RURAL HEALTH INITIATIVES.]
The commissioner of health, through the office of rural
health, and consulting as necessary with the commissioner of
human services, the commissioner of commerce, the higher
education coordinating board, and other state agencies, shall:
(1) develop a detailed plan regarding the feasibility of
coordinating rural health care services by organizing individual
medical providers and smaller hospitals and clinics into
referral networks with larger rural hospitals and clinics that
provide a broader array of services;
(2) develop and implement a program to assist rural
communities in establishing community health centers, as
required by section 144.1486;
(3) administer the program of financial assistance
established under section 144.1484 for rural hospitals in
isolated areas of the state that are in danger of closing
without financial assistance, and that have exhausted local
sources of support;
(4) develop recommendations regarding health education and
training programs in rural areas, including but not limited to a
physician assistants' training program, continuing education
programs for rural health care providers, and rural outreach
programs for nurse practitioners within existing training
programs;
(5) develop a statewide, coordinated recruitment strategy
for health care personnel and maintain a data base on health
care personnel as required under section 144.1485;
(6) develop and administer technical assistance programs to
assist rural communities in: (i) planning and coordinating the
delivery of local health care services; and (ii) hiring
physicians, nurse practitioners, public health nurses, physician
assistants, and other health personnel;
(7) study and recommend changes in the regulation of health
care personnel, such as nurse practitioners and physician
assistants, related to scope of practice, the amount of on-site
physician supervision, and dispensing of medication, to address
rural health personnel shortages;
(8) support efforts to ensure continued funding for medical
and nursing education programs that will increase the number of
health professionals serving in rural areas;
(9) support efforts to secure higher reimbursement for
rural health care providers from the Medicare and medical
assistance programs;
(10) coordinate the development of a statewide plan for
emergency medical services, in cooperation with the emergency
medical services advisory council; and
(11) carry out other activities necessary to address rural
health problems.
Sec. 10. [144.1484] [RURAL HOSPITAL FINANCIAL ASSISTANCE
GRANTS.]
Subdivision 1. [SOLE COMMUNITY HOSPITAL FINANCIAL
ASSISTANCE GRANTS.] The commissioner of health shall award
financial assistance grants to rural hospitals in isolated areas
of the state. To qualify for a grant, a hospital must: (1) be
eligible to be classified as a sole community hospital according
to the criteria in Code of Federal Regulations, title 42,
section 412.92 or be located in a community with a population of
less than 5,000; (2) have experienced net income losses in the
two most recent consecutive hospital fiscal years for which
audited financial information is available; (3) consist of 30 or
fewer licensed beds; and (4) have exhausted local sources of
support. Before applying for a grant, the hospital must have
developed a strategic plan. The commissioner shall award grants
in equal amounts.
Subd. 2. [GRANTS TO AT-RISK RURAL HOSPITALS TO OFFSET THE
IMPACT OF THE HOSPITAL TAX.] The commissioner of health shall
award financial assistance grants to rural hospitals that would
otherwise close as a direct result of the hospital tax in
article 9, section 7. To be eligible for a grant, a hospital
must have 50 or fewer beds and must not be located in a city of
the first class. To receive a grant, the hospital must
demonstrate to the satisfaction of the commissioner of health
that the hospital will close in the absence of state assistance
under this subdivision and that the hospital tax is the
principal reason for the closure. The amount of the grant must
not exceed the amount of the tax the hospital would pay under
article 9, section 7, based on the previous year's hospital
revenues.
Sec. 11. [144.1485] [DATA BASE ON HEALTH PERSONNEL.]
The commissioner of health shall develop and maintain a
data base on health services personnel. The commissioner shall
use this information to assist local communities and units of
state government to develop plans for the recruitment and
retention of health personnel. Information collected in the
data base must include, but is not limited to, data on levels of
educational preparation, specialty, and place of employment.
The commissioner may collect information through the
registration and licensure systems of the state health licensing
boards.
Sec. 12. [144.1486] [RURAL COMMUNITY HEALTH CENTERS.]
The commissioner of health shall develop and implement a
program to establish community health centers in rural areas of
Minnesota that are underserved by health care providers. The
program shall provide rural communities and community
organizations with technical assistance, capital grants for
start-up costs, and short-term assistance with operating costs.
The technical assistance component of the program must provide
assistance in review of practice management, market analysis,
practice feasibility analysis, medical records system analysis,
and scheduling and patient flow analysis. The program must:
(1) include a local match requirement for state dollars
received; (2) require local communities, through nonprofit
boards comprised of local residents, to operate and own their
community's health care program; (3) encourage the use of
midlevel practitioners; and (4) incorporate a quality assurance
strategy that provides regular evaluation of clinical
performance and allows peer review comparisons for rural
practices. The commissioner shall report to the legislature on
implementation of the program by February 15, 1994.
Sec. 13. Minnesota Statutes 1990, section 144.581,
subdivision 1, is amended to read:
Subdivision 1. [NONPROFIT CORPORATION POWERS.] A
municipality, political subdivision, state agency, or other
governmental entity that owns or operates a hospital authorized,
organized, or operated under chapters 158, 250, 376, and 397, or
under sections 246A.01 to 246A.27, 412.221, 447.05 to 447.13,
447.31, or 471.59, or under any special law authorizing or
establishing a hospital or hospital district shall, relative to
the delivery of health care services, have, in addition to any
authority vested by law, the authority and legal capacity of a
nonprofit corporation under chapter 317A, including authority to
(a) enter shared service and other cooperative ventures,
(b) join or sponsor membership in organizations intended to
benefit the hospital or hospitals in general,
(c) enter partnerships,
(d) incorporate other corporations,
(e) have members of its governing authority or its officers
or administrators serve as directors, officers, or employees of
the ventures, associations, or corporations,
(f) own shares of stock in business corporations,
(g) offer, directly or indirectly, products and services of
the hospital, organization, association, partnership, or
corporation to the general public, and
(h) provide funds for payment of educational expenses of up
to $20,000 per individual, if the hospital or hospital district
has at least $1,000,000 in reserve and depreciation funds at the
time of payment, and these reserve and depreciation funds were
obtained solely from the operating revenues of the hospital or
hospital district, and
(i) provide funds of up to $50,000 per year per individual
for a maximum of two years to supplement the incomes of family
practice physicians, up to a maximum of $100,000 in annual
income, if the hospital or hospital district has at least
$250,000 in reserve and depreciation funds at the time of
payment, and these reserve and depreciation funds were obtained
solely from the operating revenues of the hospital or hospital
district expend funds, including public funds in any form, or
devote the resources of the hospital or hospital district to
recruit or retain physicians whose services are necessary or
desirable for meeting the health care needs of the population,
and for successful performance of the hospital or hospital
district's public purpose of the promotion of health. Allowable
uses of funds and resources include the retirement of medical
education debt, payment of one-time amounts in consideration of
services rendered or to be rendered, payment of recruitment
expenses, payment of moving expenses, and the provision of other
financial assistance necessary for the recruitment and retention
of physicians, provided that the expenditures in whatever form
are reasonable under the facts and circumstances of the
situation.
Sec. 14. Minnesota Statutes 1990, section 144.8093, is
amended to read:
144.8093 [EMERGENCY MEDICAL SERVICES FUND.]
Subdivision 1. [CITATION.] This section is the "Minnesota
emergency medical services system support act."
Subd. 2. [ESTABLISHMENT AND PURPOSE.] In order to develop,
maintain, and improve regional emergency medical services
systems, the department of health shall establish an emergency
medical services system fund. The fund shall be used for the
general purposes of promoting systematic, cost-effective
delivery of emergency medical care throughout the state;
identifying common local, regional, and state emergency medical
system needs and providing assistance in addressing those needs;
undertaking special providing discretionary grants for emergency
medical service projects of statewide significance that will
enhance the provision of emergency medical care in
Minnesota with potential regionwide significance; providing for
public education about emergency medical care; promoting the
exchange of emergency medical care information; ensuring the
ongoing coordination of regional emergency medical services
systems; and establishing and maintaining training standards to
ensure consistent quality of emergency medical services
throughout the state.
Subd. 3. [USE AND RESTRICTIONS.] Designated regional
emergency medical services systems may use emergency medical
services system funds to support local and regional emergency
medical services as determined within the region, with
particular emphasis given to supporting and improving emergency
trauma and cardiac care and training. No part of a region's
share of the fund may be used to directly subsidize any
ambulance service operations or rescue service operations or to
purchase any vehicles or parts of vehicles for an ambulance
service or a rescue service.
Subd. 4. [DISTRIBUTION.] Money from the fund shall be
distributed according to this subdivision. Eighty Ninety-three
and one-third percent of the fund shall be distributed annually
on a contract for services basis with each of the eight regional
emergency medical services systems designated by the
commissioner of health. The systems shall be governed by a body
consisting of appointed representatives from each of the
counties in that region and shall also include representatives
from emergency medical services organizations. The commissioner
shall contract with a regional entity only if the contract
proposal satisfactorily addresses proposed emergency medical
services activities in the following areas: personnel training,
transportation coordination, public safety agency cooperation,
communications systems maintenance and development, public
involvement, health care facilities involvement, and system
management. If each of the regional emergency medical services
systems submits a satisfactory contract proposal, then this part
of the fund shall be distributed evenly among the regions. If
one or more of the regions does not contract for the full amount
of its even share or if its proposal is unsatisfactory, then the
commissioner may reallocate the unused funds to the remaining
regions on a pro rata basis. Six and two-thirds percent of the
fund shall be used by the commissioner to support regionwide
reporting systems and to provide other regional administration
and technical assistance. Thirteen and one-third percent shall
be distributed by the commissioner as discretionary grants for
special emergency medical services projects with potential
statewide significance.
Sec. 15. Minnesota Statutes 1990, section 447.31,
subdivision 1, is amended to read:
Subdivision 1. [RESOLUTIONS.] Any four two or more cities
and towns, however organized, except cities of the first class,
may create a hospital district. They must do so by resolutions
adopted by their respective governing bodies or electors. A
hospital district may be reorganized according to sections
447.31 to 447.37. Reorganization must be by resolutions adopted
by the district's hospital board and the governing body or
voters of each city and town in the district.
Sec. 16. Minnesota Statutes 1990, section 447.31,
subdivision 3, is amended to read:
Subd. 3. [CONTENTS OF RESOLUTION.] A resolution under
subdivision 1 must state that a hospital district is authorized
to be created under sections 447.31 to 447.37, or that an
existing hospital district is authorized to be reorganized under
sections 447.31 to 447.37, in order to acquire, improve, and run
hospital and nursing home facilities that the hospital board
decides are necessary and expedient in accordance with sections
447.31 to 447.37. The resolution must name the four two or more
cities or towns included in the district. The resolution must
be adopted by a two-thirds majority of the members-elect of the
governing body or board acting on it, or by the voters of the
city or town as provided in this section.
Each resolution adopted by the governing body of a city or
town must be published in its official newspaper and takes
effect 40 days after publication, unless a petition for
referendum on the resolution is filed with the governing body
within 40 days. A petition for referendum must be signed by at
least five percent of the number of voters voting at the last
election of officers. If a petition is filed, the resolution
does not take effect until approved by a majority of voters
voting on it at a regular municipal election or a special
election which the governing body may call for that purpose.
The resolution may also be initiated by petition filed with
the governing body of the city or town, signed by at least ten
percent of the number of voters voting at the last general
election. A petition must present the text of the proposed
resolution and request an election on it. If the petition is
filed, the governing body shall call a special election for the
purpose, to be held within 30 days after the filing of the
petition, or may submit the resolution to a vote at a regular
municipal election that is to be held within the 30-day period.
The resolution takes effect if approved by a majority of voters
voting on it at the election. Only one election shall be held
within any given 12-month period upon resolutions initiated by
petition. The notice of the election and the ballot used must
contain the text of the resolution, followed by the question:
"Shall the above resolution be approved?"
Sec. 17. [SPECIAL STUDIES.]
(a) The commissioner of health, through the office of rural
health, shall:
(1) investigate the adequacy of access to perinatal
services in rural Minnesota and report findings and
recommendations to the legislature by January 15, 1994; and
(2) study the impact of current reimbursement provisions
for midlevel practitioners on the use of midlevel practitioners
in rural practice settings, examining reimbursement provisions
in state programs, federal programs, and private sector health
plans, and report findings and recommendations to the
legislature by January 1, 1993.
(b) The commissioner of administration, through the
statewide telecommunications access routing program and its
advisory council, and in cooperation with the commissioner of
health and the rural health advisory committee, shall
investigate and develop recommendations regarding the use of
advanced telecommunications technologies to improve rural health
education and health care delivery. The commissioner of
administration shall report findings and recommendations to the
legislature by January 15, 1994.
Sec. 18. [REPORT ON RURAL HOSPITAL FINANCIAL ASSISTANCE
GRANTS.]
The commissioner of health shall examine the eligibility
criteria for rural hospital financial assistance grants under
Minnesota Statutes, section 144.1484, and report to the
legislature by February 1, 1993, on any needed modifications.
Sec. 19. [STUDY OF BASIC AND ADVANCED LIFE SUPPORT
REIMBURSEMENT.]
The commissioner of human services, in consultation with
the commissioner of health, shall study the mechanisms and rates
of reimbursement for advanced and basic life support ambulance
and special transportation service calls under medical
assistance and general assistance medical care. The study shall
examine methods of simplifying the claims process,
interpretation of the "medically necessary" criteria and prior
approval in light of the statutory mandate that ambulance
service may not be denied, and other issues that create
impediments to reasonable and fair reimbursement. The
commissioner shall report findings and offer recommendations to
the legislature by January 1, 1993, on means of maximizing
potential reimbursement levels.
Sec. 20. [STUDY OF AMBULANCE SUBSCRIPTION PLANS.]
The commissioner of commerce and the commissioner of health
shall study prepaid ambulance service plans that allow a person
to prepay for ambulance services on a yearly basis. The
commissioners shall study plans offered in other states and
shall study the cost effectiveness and feasibility of offering
these plans in Minnesota. The commissioners shall study methods
of funding the plans. The commissioners shall also address the
issue of whether these plans should be regulated as insurance,
health maintenance organizations, or as another type of entity.
The commissioners shall conduct the study in conjunction with
the attorney general. The commissioners shall report the
findings of the study to the legislature by January 1, 1993.
Sec. 21. [REPEALER.]
Section 3 expires July 1, 1994, or one year after the date
upon which a Minnesota program, established to conduct quality
assurance and certification activities related to the
participation of rural family practice physicians in health plan
company provider networks, becomes operational, whichever occurs
first.
Sec. 22. [EFFECTIVE DATE.]
Section 1 relating to invoice errors is effective for the
department of human services July 1, 1993, or on the
implementation date of the upgrade to the Medicaid management
information system, whichever is later.
Section 7 creating the rural health advisory committee is
effective January 1, 1993.
ARTICLE 6
HEALTH PROFESSIONAL EDUCATION
Section 1. Minnesota Statutes 1990, section 136A.1355,
subdivision 2, is amended to read:
Subd. 2. [ELIGIBILITY.] To be eligible to participate in
the program, a prospective physician must submit a letter of
interest to the higher education coordinating board while
attending medical school. Before completing the first year of
residency,. A student or resident who is accepted must sign a
contract to agree to serve at least three of the first five
years following residency in a designated rural area.
Sec. 2. Minnesota Statutes 1990, section 136A.1355,
subdivision 3, is amended to read:
Subd. 3. [LOAN FORGIVENESS.] Prior to June 30, 1992, the
higher education coordinating board may accept up to eight
applicants who are fourth year medical students, up to eight
applicants who are first year residents, and up to eight
applicants who are second year residents for participation in
the loan forgiveness program. For the period July 1, 1992
through June 30, 1995, the higher education coordinating board
may accept up to eight applicants who are fourth year medical
students per fiscal year for participation in the loan
forgiveness program. Applicants are responsible for securing
their own loans. Applicants chosen to participate in the loan
forgiveness program may designate for each year of medical
school, up to a maximum of four years, an agreed amount, not to
exceed $10,000, as a qualified loan. For each year that a
participant serves as a physician in a designated rural area, up
to a maximum of four years, the higher education coordinating
board shall annually pay an amount equal to one year of
qualified loans and the interest accrued on these loans.
Participants who move their practice from one designated rural
area to another remain eligible for loan repayment. In
addition, if a resident participating in the loan forgiveness
program serves at least four weeks during a year of residency
substituting for a rural physician to temporarily relieve the
rural physician of rural practice commitments to enable the
rural physician to take a vacation, engage in activities outside
the practice area, or otherwise be relieved of rural practice
commitments, the participating resident may designate up to an
additional $2,000, above the $10,000 maximum, for each year of
residency during which the resident substitutes for a rural
physician for four or more weeks.
Sec. 3. [136A.1356] [MIDLEVEL PRACTITIONER EDUCATION
ACCOUNT.]
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following definitions apply:
(a) "Designated rural area" has the definition developed in
rule by the higher education coordinating board.
(b) "Midlevel practitioner" means a nurse practitioner,
nurse-midwife, nurse anesthetist, advanced clinical nurse
specialist, or physician assistant.
(c) "Nurse-midwife" means a registered nurse who has
graduated from a program of study designed to prepare registered
nurses for advance practice as nurse-midwives.
(d) "Nurse practitioner" means a registered nurse who has
graduated from a program of study designed to prepare registered
nurses for advance practice as nurse practitioners.
(e) "Physician assistant" means a person meeting the
definition in Minnesota Rules, part 5600.2600, subpart 11.
Subd. 2. [CREATION OF ACCOUNT.] A midlevel practitioner
education account is established. The higher education
coordinating board shall use money from the account to establish
a loan forgiveness program for midlevel practitioners agreeing
to practice in designated rural areas.
Subd. 3. [ELIGIBILITY.] To be eligible to participate in
the program, a prospective midlevel practitioner must submit a
letter of interest to the higher education coordinating board
prior to or while attending a program of study designed to
prepare the individual for service as a midlevel practitioner.
Before completing the first year of this program, a midlevel
practitioner must sign a contract to agree to serve at least two
of the first four years following graduation from the program in
a designated rural area.
Subd. 4. [LOAN FORGIVENESS.] The higher education
coordinating board may accept up to eight applicants per year
for participation in the loan forgiveness program. Applicants
are responsible for securing their own loans. Applicants chosen
to participate in the loan forgiveness program may designate for
each year of midlevel practitioner study, up to a maximum of two
years, an agreed amount, not to exceed $7,000, as a qualified
loan. For each year that a participant serves as a midlevel
practitioner in a designated rural area, up to a maximum of four
years, the higher education coordinating board shall annually
repay an amount equal to one-half a qualified loan.
Participants who move their practice from one designated rural
area to another remain eligible for loan repayment.
Subd. 5. [PENALTY FOR NONFULFILLMENT.] If a participant
does not fulfill the service commitment required under
subdivision 4 for full repayment of all qualified loans, the
higher education coordinating board shall collect from the
participant 100 percent of any payments made for qualified loans
and interest at a rate established according to section 270.75.
The higher education coordinating board shall deposit the money
collected in the midlevel practitioner education account. The
board shall allow waivers of all or part of the money owed the
board if emergency circumstances prevented fulfillment of the
required service commitment.
Sec. 4. [137.38] [EDUCATION AND TRAINING OF PRIMARY CARE
PHYSICIANS.]
Subdivision 1. [CONDITION.] If the board of regents
accepts the funding appropriated for sections 137.38 to 137.40,
it shall comply with the duties for which the appropriations are
made.
Subd. 2. [PRIMARY CARE.] For purposes of sections 137.38
to 137.40, "primary care" means a type of medical care delivery
that assumes ongoing responsibility for the patient in both
health maintenance and illness treatment. It is personal care
involving a unique interaction and communication between the
patient and the physician. It is comprehensive in scope, and
includes all the overall coordination of the care of the
patient's health care problems including biological, behavioral,
and social problems. The appropriate use of consultants and
community resources is an important aspect of effective primary
care.
Subd. 3. [GOALS.] The board of regents of the University
of Minnesota, through the University of Minnesota medical
school, is requested to implement the initiatives required by
sections 137.38 to 137.40 in order to increase the number of
graduates of residency programs of the medical school who
practice primary care by 20 percent over an eight-year period.
The initiatives must be designed to encourage newly graduated
primary care physicians to establish practices in areas of rural
Minnesota that are medically underserved.
Subd. 4. [GRANTS.] The board of regents is requested to
seek grants from private foundations and other nonstate sources
for the medical school initiatives outlined in sections 137.38
to 137.40.
Subd. 5. [REPORTS.] The board of regents is requested to
report annually to the legislature on progress made in
implementing sections 137.38 to 137.40, beginning January 15,
1993, and each succeeding January 15.
Sec. 5. [137.39] [MEDICAL SCHOOL INITIATIVES.]
Subdivision 1. [MODIFIED SCHOOL INITIATIVES.] The
University of Minnesota medical school is requested to study the
demographic characteristics of students that are associated with
a primary care career choice. The medical school is requested
to modify the selection process for medical students based on
the results of this study, in order to increase the number of
medical school graduates choosing careers in primary care.
Subd. 2. [DESIGN OF CURRICULUM.] The medical school is
requested to ensure that its curriculum provides students with
early exposure to primary care physicians and primary care
practice. The medical school is requested to also support
premedical school educational initiatives that provide students
with greater exposure to primary care physicians and practices.
Subd. 3. [CLINICAL EXPERIENCES IN PRIMARY CARE.] The
medical school, in consultation with medical school faculty at
the University of Minnesota, Duluth, is requested to develop a
program to provide students with clinical experiences in primary
care settings in internal medicine and pediatrics. The program
must provide training experiences in medical clinics in rural
Minnesota communities, as well as in community clinics and
health maintenance organizations in the Twin Cities metropolitan
area.
Sec. 6. [137.40] [RESIDENCY AND OTHER INITIATIVES.]
Subdivision 1. [PRIMARY CARE AND RURAL ROTATIONS.] The
University of Minnesota medical school is requested to increase
the opportunities for general medicine, pediatrics, and family
practice residents to serve rotations in primary care settings.
These settings must include community clinics, health
maintenance organizations, and practices in rural communities.
Subd. 2. [RURAL RESIDENCY TRAINING PROGRAM IN FAMILY
PRACTICE.] The medical school is requested to establish a rural
residency training program in family practice. The program
shall provide an initial year of training in a
metropolitan-based hospital and family practice clinic. The
second and third years of the residency program shall be based
in rural communities, utilizing local clinics and community
hospitals, with specialty rotations in nearby regional medical
centers.
Subd. 3. [CONTINUING MEDICAL EDUCATION.] The medical
school is requested to develop continuing medical education
programs for primary care physicians that are comprehensive,
community-based, and accessible to primary care physicians in
all areas of the state.
Sec. 7. [136A.1357] [EDUCATION ACCOUNT FOR NURSES WHO
AGREE TO PRACTICE IN A NURSING HOME.]
Subdivision 1. [CREATION OF THE ACCOUNT.] An education
account in the general fund is established for a loan
forgiveness program for nurses who agree to practice nursing in
a nursing home. The account consists of money appropriated by
the legislature and repayments and penalties collected under
subdivision 4. Money from the account must be used for a loan
forgiveness program.
Subd. 2. [ELIGIBILITY.] To be eligible to participate in
the loan forgiveness program, a person planning to enroll or
enrolled in a program of study designed to prepare the person to
become a registered nurse or licensed practical nurse must
submit a letter of interest to the board before completing the
first year of study of a nursing education program. Before
completing the first year of study, the applicant must sign a
contract in which the applicant agrees to practice nursing for
at least one of the first two years following completion of the
nursing education program providing nursing services in a
licensed nursing home.
Subd. 3. [LOAN FORGIVENESS.] The board may accept up to
ten applicants a year. Applicants are responsible for securing
their own loans. For each year of nursing education, for up to
two years, applicants accepted into the loan forgiveness program
may designate an agreed amount, not to exceed $3,000, as a
qualified loan. For each year that a participant practices
nursing in a nursing home, up to a maximum of two years, the
board shall annually repay an amount equal to one year of
qualified loans. Participants who move from one nursing home to
another remain eligible for loan repayment.
Subd. 4. [PENALTY FOR NONFULFILLMENT.] If a participant
does not fulfill the service commitment required under
subdivision 3 for full repayment of all qualified loans, the
commissioner shall collect from the participant 100 percent of
any payments made for qualified loans and interest at a rate
established according to section 270.75. The board shall
deposit the collections in the general fund to be credited to
the account established in subdivision 1. The board may grant a
waiver of all or part of the money owed as a result of a
nonfulfillment penalty if emergency circumstances prevented
fulfillment of the required service commitment.
Subd. 5. [RULES.] The board shall adopt rules to implement
this section.
Sec. 8. [STUDY OF OBSTETRICAL ACCESS.]
The commissioner of health shall study access to
obstetrical services in Minnesota and report to the legislature
by January 1, 1993. The study must examine the number of
physicians discontinuing obstetrical care in recent years and
the effects of high malpractice costs and low government program
reimbursement for obstetrical services, and must identify areas
of the state where access to obstetrical services is most
greatly affected. The commissioner shall recommend ways to
reduce liability costs and to encourage physicians to continue
to provide obstetrical services.
Sec. 9. [GRANT PROGRAM FOR MIDLEVEL PRACTITIONER
TRAINING.]
The higher education coordinating board may award grants to
Minnesota schools or colleges that educate, or plan to educate
midlevel practitioners, in order to establish and administer
midlevel practitioner training programs in areas of rural
Minnesota with the greatest need for midlevel practitioners.
The program must address rural health care needs, and
incorporate innovative methods of bringing together faculty and
students, such as the use of telecommunications, and must
provide both clinical and lecture components.
Sec. 10. [GRANTS FOR CONTINUING EDUCATION.]
The higher education coordinating board shall establish a
competitive grant program for schools of nursing and other
providers of continuing nurse education, in order to develop
continuing education programs for nurses working in rural areas
of the state. The programs must complement, and not duplicate,
existing continuing education activities, and must specifically
address the needs of nurses working in rural practice settings.
The board shall award two grants for the fiscal year ending June
30, 1993.
ARTICLE 7
DATA COLLECTION AND RESEARCH INITIATIVES
Section 1. [62J.30] [HEALTH CARE ANALYSIS UNIT.]
Subdivision 1. [DEFINITIONS.] For purposes of sections
62J.30 to 62J.34, the following definitions apply:
(a) "Practice parameter" means a statement intended to
guide the clinical decision making of health care providers and
patients that is supported by the results of appropriately
designed outcomes research studies, including those studies
sponsored by the federal agency for health care policy and
research, or has been adopted for use by a national medical
society.
(b) "Outcomes research" means research designed to identify
and analyze the outcomes and costs of alternative interventions
for a given clinical condition, in order to determine the most
appropriate and cost-effective means to prevent, diagnose,
treat, or manage the condition, or in order to develop and test
methods for reducing inappropriate or unnecessary variations in
the type and frequency of interventions.
Subd. 2. [ESTABLISHMENT.] The commissioner of health, in
consultation with the Minnesota health care commission, shall
establish a health care analysis unit to conduct data and
research initiatives in order to improve the efficiency and
effectiveness of health care in Minnesota.
Subd. 3. [GENERAL DUTIES; IMPLEMENTATION DATE.] The
commissioner, through the health care analysis unit, shall:
(1) conduct applied research using existing and newly
established health care data bases, and promote applications
based on existing research;
(2) establish the condition-specific data base required
under section 62J.31;
(3) develop and implement data collection procedures to
ensure a high level of cooperation from health care providers
and health carriers, as defined in section 62L.02, subdivision
16;
(4) work closely with health carriers and health care
providers to promote improvements in health care efficiency and
effectiveness;
(5) participate as a partner or sponsor of private sector
initiatives that promote publicly disseminated applied research
on health care delivery, outcomes, costs, quality, and
management;
(6) provide technical assistance to health plan and health
care purchasers, as required by section 62J.33;
(7) develop outcome-based practice parameters as required
under section 62J.34; and
(8) provide technical assistance as needed to the health
planning advisory committee and the regional coordinating boards.
Subd. 4. [CRITERIA FOR UNIT INITIATIVES.] Data and
research initiatives by the health care analysis unit must:
(1) serve the needs of the general public, public sector
health care programs, employers and other purchasers of health
care, health care providers, including providers serving large
numbers of low-income people, and health carriers;
(2) promote a significantly accelerated pace of publicly
disseminated, applied research on health care delivery,
outcomes, costs, quality, and management;
(3) conduct research and promote health care applications
based on scientifically sound and statistically valid methods;
(4) be statewide in scope, in order to benefit health care
purchasers and providers in all parts of Minnesota and to ensure
a broad and representative data base for research, comparisons,
and applications;
(5) emphasize data that is useful, relevant, and
nonredundant of existing data. The initiatives may duplicate
existing private activities, if this is necessary to ensure that
the data collected will be in the public domain;
(6) be structured to minimize the administrative burden on
health carriers, health care providers, and the health care
delivery system, and minimize any privacy impact on individuals;
and
(7) promote continuous improvement in the efficiency and
effectiveness of health care delivery.
Subd. 5. [CRITERIA FOR PUBLIC SECTOR HEALTH CARE
PROGRAMS.] Data and research initiatives related to public
sector health care programs must:
(1) assist the state's current health care financing and
delivery programs to deliver and purchase health care in a
manner that promotes improvements in health care efficiency and
effectiveness;
(2) assist the state in its public health activities,
including the analysis of disease prevalence and trends and the
development of public health responses;
(3) assist the state in developing and refining its overall
health policy, including policy related to health care costs,
quality, and access; and
(4) provide a data source that allows the evaluation of
state health care financing and delivery programs.
Subd. 6. [DATA COLLECTION PROCEDURES.] The health care
analysis unit shall collect data from health care providers,
health carriers, and individuals in the most cost-effective
manner, which does not unduly burden providers. The unit may
require health care providers and health carriers to collect and
provide patient health records, provide mailing lists of
patients who have consented to release of data, and cooperate in
other ways with the data collection process. For purposes of
this chapter, the health care analysis unit shall assign, or
require health care providers and health carriers to assign, a
unique identification number to each patient to safeguard
patient identity.
Subd. 7. [DATA CLASSIFICATION.] (a) Data collected through
the large-scale data base initiatives of the health care
analysis unit required by section 62J.31 that identify
individuals are private data on individuals. Data not on
individuals are nonpublic data. The commissioner may release
private data on individuals and nonpublic data to researchers
affiliated with university research centers or departments who
are conducting research on health outcomes, practice parameters,
and medical practice style; researchers working under contract
with the commissioner; and individuals purchasing health care
services for health carriers and groups. Prior to releasing any
nonpublic or private data under this paragraph that identify or
relate to a specific health carrier, medical provider, or health
care facility, the commissioner shall provide at least 30 days'
notice to the subject of the data, including a copy of the
relevant data, and allow the subject of the data to provide a
brief explanation or comment on the data which must be released
with the data. To the extent reasonably possible, release of
private or confidential data under this chapter shall be made
without releasing data that could reveal the identity of
individuals and should instead be released using the
identification numbers required by subdivision 6.
(b) Summary data derived from data collected through the
large-scale data base initiatives of the health care analysis
unit may be provided under section 13.05, subdivision 7, and may
be released in studies produced by the commissioner.
(c) The commissioner shall adopt rules to establish
criteria and procedures to govern access to and the use of data
collected through the initiatives of the health care analysis
unit.
Subd. 8. [DATA COLLECTION ADVISORY COMMITTEE.] The
commissioner shall convene a 15-member data collection advisory
committee consisting of health service researchers, health care
providers, health carrier representatives, representatives of
businesses that purchase health coverage, and consumers. Six
members of this committee must be health care providers. The
advisory committee shall evaluate methods of data collection and
shall recommend to the commissioner methods of data collection
that minimize administrative burdens, address data privacy
concerns, and meet the needs of health service researchers. The
advisory committee is governed by section 15.059.
Subd. 9. [FEDERAL AND OTHER GRANTS.] The commissioner
shall seek federal funding, and funding from private and other
nonstate sources, for the initiatives of the health care
analysis unit.
Subd. 10. [CONTRACTS AND GRANTS.] To carry out the duties
assigned in sections 62J.30 to 62J.34, the commissioner may
contract with or provide grants to private sector entities. Any
contract or grant must require the private sector entity to
maintain the data on individuals which it receives according to
the statutory provisions applicable to the data.
Subd. 11. [RULEMAKING.] The commissioner may adopt
permanent and emergency rules to implement sections 62J.30 to
62J.34.
Sec. 2. [62J.31] [LARGE-SCALE DATA BASE.]
Subdivision 1. [ESTABLISHMENT.] The health care analysis
unit shall establish a large-scale data base for a limited
number of health conditions. This initiative must meet the
requirements of this section.
Subd. 2. [SPECIFIC HEALTH CONDITIONS.] (a) The data must
be collected for specific health conditions, rather than
specific procedures, types of health care providers, or
services. The health care analysis unit shall designate a
limited number of specific health conditions for which data
shall be collected during the first year of operation. For
subsequent years, data may be collected for additional specific
health conditions. The number of specific conditions for which
data is collected is subject to the availability of
appropriations.
(b) The initiative must emphasize conditions that account
for significant total costs, when considering both the frequency
of a condition and the unit cost of treatment. The initial
emphasis must be on the study of conditions commonly treated in
hospitals on an inpatient or outpatient basis, or in
freestanding outpatient surgical centers. This initial emphasis
may be expanded to include entire episodes of care for a given
condition, whether or not treatment includes use of a hospital
or a freestanding outpatient surgical center, if adequate data
collection and evaluation techniques are available for that
condition.
Subd. 3. [INFORMATION TO BE COLLECTED.] The data collected
must include information on health outcomes, including
information on mortality, morbidity, patient functional status
and quality of life, symptoms, and patient satisfaction. The
data collected must include information necessary to measure and
make adjustments for differences in the severity of patient
condition across different health care providers, and may
include data obtained directly from the patient or from patient
medical records. The data must be collected in a manner that
allows comparisons to be made between providers, health
carriers, public programs, and other entities.
Subd. 4. [DATA COLLECTION AND REVIEW.] Data collection for
any one condition must continue for a sufficient time to
permit: adequate analysis by researchers and appropriate
providers, including providers who will be impacted by the data;
feedback to providers; and monitoring for changes in practice
patterns. The health care analysis unit shall annually review
all specific health conditions for which data is being
collected, in order to determine if data collection for that
condition should be continued.
Subd. 5. [USE OF EXISTING DATA BASES.] (a) The health care
analysis unit shall negotiate with private sector organizations
currently collecting data on specific health conditions of
interest to the unit, in order to obtain required data in a
cost-effective manner and minimize administrative costs. The
unit shall attempt to establish linkages between the large scale
data base established by the unit and existing private sector
data bases and shall consider and implement methods to
streamline data collection in order to reduce public and private
sector administrative costs.
(b) The health care analysis unit shall use existing public
sector data bases, such as those existing for medical assistance
and Medicare, to the greatest extent possible. The unit shall
establish linkages between existing public sector data bases and
consider and implement methods to streamline public sector data
collection in order to reduce public and private sector
administrative costs.
Sec. 3. [62J.32] [ANALYSIS AND USE OF DATA COLLECTED
THROUGH THE LARGE-SCALE DATA BASE.]
Subdivision 1. [DATA ANALYSIS.] The health care analysis
unit shall analyze the data collected on specific health
conditions using existing practice parameters and newly
researched practice parameters, including those established
through the outcomes research studies of the federal
government. The unit may use the data collected to develop new
practice parameters, if development and refinement is based on
input from and analysis by practitioners, particularly those
practitioners knowledgeable about and impacted by practice
parameters. The unit may also refine existing practice
parameters, and may encourage or coordinate private sector
research efforts designed to develop or refine practice
parameters.
Subd. 2. [EDUCATIONAL EFFORTS.] The health care analysis
unit shall maintain and improve the quality of health care in
Minnesota by providing practitioners in the state with
information about practice parameters. The unit shall promote,
support, and disseminate parameters for specific, appropriate
conditions, and the research findings on which these parameters
are based, to all practitioners in the state who diagnose or
treat the medical condition.
Subd. 3. [PEER REVIEW.] The unit may require peer review
by the Minnesota Medical Association, Minnesota Chiropractic
Association or appropriate health licensing board for specific
health care conditions for which practice in all or part of the
state deviates from practice parameters. The commissioner may
also require peer review by the Minnesota Medical Association,
Minnesota Chiropractic Association or appropriate health
licensing board for specific conditions for which there are
large variations in treatment method or frequency of treatment
in all or part of the state. Peer review may be required for
all practitioners statewide, or limited to practitioners in
specific areas of the state. The peer review must determine
whether the procedures conducted by practitioners are necessary
and appropriate, and within acceptable and prevailing practice
parameters that have been disseminated by the health care
analysis unit in conjunction with the appropriate professional
organizations. If a practitioner continues to perform
procedures that are inappropriate, even after educational
efforts by the review panel, the practitioner may be reported to
the appropriate professional licensing board.
Subd. 4. [PRACTICE PARAMETER ADVISORY COMMITTEE.] The
commissioner shall convene a 15-member practice parameter
advisory committee comprised of eight health care professionals,
and representatives of the research community and the medical
technology industry. The committee shall present
recommendations on the adoption of practice parameters to the
commissioner and the Minnesota health care commission and
provide technical assistance as needed to the commissioner and
the commission. The advisory committee is governed by section
15.059, but does not expire.
Sec. 4. [62J.33] [TECHNICAL ASSISTANCE FOR PURCHASERS.]
The health care analysis unit shall provide technical
assistance to health plan and health care purchasers. The unit
shall collect information about:
(1) premiums, benefit levels, managed care procedures,
health care outcomes, and other features of popular health plans
and health carriers; and
(2) prices, outcomes, provider experience, and other
information for services less commonly covered by insurance or
for which patients commonly face significant out-of-pocket
expenses.
The commissioner shall publicize this information in an
easily understandable format.
Sec. 5. [62J.34] [OUTCOME-BASED PRACTICE PARAMETERS.]
Subdivision 1. [PRACTICE PARAMETERS.] The health care
analysis unit may develop, adopt, revise, and disseminate
practice parameters, and disseminate research findings, that are
supported by medical literature and appropriately controlled
studies to minimize unnecessary, unproven, or ineffective care.
Among other appropriate activities relating to the development
of practice parameters, the health care analysis unit shall:
(1) determine uniform specifications for the collection,
transmission, and maintenance of health outcomes data; and
(2) conduct studies and research on the following subjects:
(i) new and revised practice parameters to be used in
connection with state health care programs and other settings;
(ii) the comparative effectiveness of alternative modes of
treatment, medical equipment, and drugs;
(iii) the relative satisfaction of participants with their
care, determined with reference to both provider and mode of
treatment;
(iv) the cost versus the effectiveness of health care
treatments; and
(v) the impact on cost and effectiveness of health care of
the management techniques and administrative interventions used
in the state health care programs and other settings.
Subd. 2. [APPROVAL.] The commissioner of health, after
receiving the advice and recommendations of the Minnesota health
care commission, may approve practice parameters that are
endorsed, developed, or revised by the health care analysis
unit. The commissioner is exempt from the rulemaking
requirements of chapter 14 when approving practice parameters
approved by the federal agency for health care policy and
research, practice parameters adopted for use by a national
medical society, or national medical specialty society. The
commissioner shall use rulemaking to approve practice parameters
that are newly developed or substantially revised by the health
care analysis unit. Practice parameters adopted without
rulemaking must be published in the State Register.
Subd. 3. [MEDICAL MALPRACTICE CASES.] (a) In an action
against a provider for malpractice, error, mistake, or failure
to cure, whether based in contract or tort, adherence to a
practice parameter approved by the commissioner of health under
subdivision 2 is an absolute defense against an allegation that
the provider did not comply with accepted standards of practice
in the community.
(b) Evidence of a departure from a practice parameter is
admissible only on the issue of whether the provider is entitled
to an absolute defense under paragraph (a).
(c) Paragraphs (a) and (b) apply to claims arising on or
after August 1, 1993, or 90 days after the date the commissioner
approves the applicable practice parameter, whichever is later.
(d) Nothing in this section changes the standard or burden
of proof in an action alleging a delay in diagnosis, a
misdiagnosis, inappropriate application of a practice parameter,
failure to obtain informed consent, battery or other intentional
tort, breach of contract, or product liability.
Sec. 6. Minnesota Statutes 1991 Supplement, section
145.61, subdivision 5, is amended to read:
Subd. 5. "Review organization" means a nonprofit
organization acting according to clause (k) or a committee whose
membership is limited to professionals, administrative staff,
and consumer directors, except where otherwise provided for by
state or federal law, and which is established by a hospital, by
a clinic, by one or more state or local associations of
professionals, by an organization of professionals from a
particular area or medical institution, by a health maintenance
organization as defined in chapter 62D, by a nonprofit health
service plan corporation as defined in chapter 62C, by a
professional standards review organization established pursuant
to United States Code, title 42, section 1320c-1 et seq., or by
a medical review agent established to meet the requirements of
section 256B.04, subdivision 15, or 256D.03, subdivision 7,
paragraph (b), or by the department of human services, to gather
and review information relating to the care and treatment of
patients for the purposes of:
(a) evaluating and improving the quality of health care
rendered in the area or medical institution;
(b) reducing morbidity or mortality;
(c) obtaining and disseminating statistics and information
relative to the treatment and prevention of diseases, illness
and injuries;
(d) developing and publishing guidelines showing the norms
of health care in the area or medical institution;
(e) developing and publishing guidelines designed to keep
within reasonable bounds the cost of health care;
(f) reviewing the quality or cost of health care services
provided to enrollees of health maintenance organizations,
health service plans, and insurance companies;
(g) acting as a professional standards review organization
pursuant to United States Code, title 42, section 1320c-1 et
seq.;
(h) determining whether a professional shall be granted
staff privileges in a medical institution, membership in a state
or local association of professionals, or participating status
in a nonprofit health service plan corporation, health
maintenance organization, or insurance company, or whether a
professional's staff privileges, membership, or participation
status should be limited, suspended or revoked;
(i) reviewing, ruling on, or advising on controversies,
disputes or questions between:
(1) health insurance carriers, nonprofit health service
plan corporations, or health maintenance organizations and their
insureds, subscribers, or enrollees;
(2) professional licensing boards acting under their powers
including disciplinary, license revocation or suspension
procedures and health providers licensed by them when the matter
is referred to a review committee by the professional licensing
board;
(3) professionals and their patients concerning diagnosis,
treatment or care, or the charges or fees therefor;
(4) professionals and health insurance carriers, nonprofit
health service plan corporations, or health maintenance
organizations concerning a charge or fee for health care
services provided to an insured, subscriber, or enrollee;
(5) professionals or their patients and the federal, state,
or local government, or agencies thereof;
(j) providing underwriting assistance in connection with
professional liability insurance coverage applied for or
obtained by dentists, or providing assistance to underwriters in
evaluating claims against dentists;
(k) acting as a medical review agent under section 256B.04,
subdivision 15, or 256D.03, subdivision 7, paragraph (b); or
(l) providing recommendations on the medical necessity of a
health service, or the relevant prevailing community standard
for a health service; or
(m) reviewing a provider's professional practice as
requested by the health care analysis unit under section 62J.32.
Sec. 7. Minnesota Statutes 1991 Supplement, section
145.64, subdivision 2, is amended to read:
Subd. 2. [PROVIDER DATA.] The restrictions in subdivision
1 shall not apply to professionals requesting or seeking through
discovery, data, information, or records relating to their
medical staff privileges, membership, or participation status.
However, any data so disclosed in such proceedings shall not be
admissible in any other judicial proceeding than those brought
by the professional to challenge an action relating to the
professional's medical staff privileges or participation status.
Sec. 8. [214.16] [DATA COLLECTION; HEALTH CARE PROVIDER
TAX.]
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given them.
(a) "Board" means the boards of medical practice,
chiropractic examiners, nursing, optometry, dentistry, pharmacy,
and podiatry.
(b) "Regulated person" means a licensed physician,
chiropractor, nurse, optometrist, dentist, pharmacist, or
podiatrist.
Subd. 2. [BOARD COOPERATION REQUIRED.] The board shall
assist the commissioner of health and the data analysis unit in
data collection activities required under this article and shall
assist the commissioner of revenue in activities related to
collection of the health care provider tax required under
article 9. Upon the request of the commissioner, the data
analysis unit, or the commissioner of revenue, the board shall
make available names and addresses of current licensees and
provide other information or assistance as needed.
Subd. 3. [GROUNDS FOR DISCIPLINARY ACTION.] The board
shall take disciplinary action against a regulated person for:
(1) failure to provide the commissioner of health with data
on gross patient revenue as required under section 62J.04;
(2) failure to provide the health care analysis unit with
data as required under this article;
(3) failure to provide the commissioner of revenue with
data on gross revenue and other information required for the
commissioner to implement sections 295.50 to 295.58; and
(4) failure to pay the health care provider tax required
under section 295.52.
Sec. 9. [STUDY OF ADMINISTRATIVE COSTS.]
The health care analysis unit shall study costs and
requirements incurred by health carriers, group purchasers, and
health care providers that are related to the collection and
submission of information to the state and federal government,
insurers, and other third parties. The unit shall recommend to
the commissioner of health and the Minnesota health care
commission by January 1, 1994, any reforms that may reduce these
costs without compromising the purposes for which the
information is collected.
ARTICLE 8
MEDICAL MALPRACTICE
Section 1. Minnesota Statutes 1990, section 145.682,
subdivision 4, is amended to read:
Subd. 4. [IDENTIFICATION OF EXPERTS TO BE CALLED.] (a) The
affidavit required by subdivision 2, clause (2), must be signed
by each expert listed in the affidavit and by the plaintiff's
attorney and state the identity of each person whom plaintiff
expects to call as an expert witness at trial to testify with
respect to the issues of malpractice or causation, the substance
of the facts and opinions to which the expert is expected to
testify, and a summary of the grounds for each opinion. Answers
to interrogatories that state the information required by this
subdivision satisfy the requirements of this subdivision if they
are signed by the plaintiff's attorney and by each expert listed
in the answers to interrogatories and served upon the defendant
within 180 days after commencement of the suit against the
defendant.
(b) The parties or the court for good cause shown, may by
agreement, provide for extensions of the time limits specified
in subdivision 2, 3, or this subdivision. Nothing in this
subdivision may be construed to prevent either party from
calling additional expert witnesses or substituting other expert
witnesses.
(c) In any action alleging medical malpractice, all expert
interrogatory answers must be signed by the attorney for the
party responding to the interrogatory and by each expert listed
in the answers. The court shall include in a scheduling order a
deadline prior to the close of discovery for all parties to
answer expert interrogatories for all experts to be called at
trial. No additional experts may be called by any party without
agreement of the parties or by leave of the court for good cause
shown.
Sec. 2. [604.11] [MEDICAL MALPRACTICE CASES.]
Subdivision 1. [DISCOVERY.] Pursuant to the time
limitations set forth in the Minnesota rules of civil procedure,
the parties to any medical malpractice action may exchange the
uniform interrogatories in subdivision 3 and ten additional
nonuniform interrogatories. Any subparagraph of a nonuniform
interrogatory will be treated as one nonuniform interrogatory.
By stipulation of the parties, or by leave of the court upon a
showing of good cause, more than ten additional nonuniform
interrogatories may be propounded by a party. In addition, the
parties may submit a request for production of documents
pursuant to rule 34 of the Minnesota rules of civil procedure.
Subd. 2. [ALTERNATIVE DISPUTE RESOLUTION.] At the time a
trial judge orders a case for trial, the court shall require the
parties to discuss and determine whether a form of alternative
dispute resolution would be appropriate or likely to resolve
some or all of the issues in the case. Alternative dispute
resolution may include arbitration, mediation, summary jury
trial, or other alternatives suggested by the court or parties,
and may be either binding or nonbinding. All parties must agree
unanimously before alternative dispute resolution proceeds.
Subd. 3. [UNIFORM INTERROGATORIES.] (a) Uniform
plaintiff's interrogatories to the defendant are as follows:
PLAINTIFF'S INTERROGATORIES TO DEFENDANT
INTERROGATORY NO. 1:
Please attach a complete curriculum vitae for Dr.
(..........), M.D., which should include, but is not limited to,
the following information:
a. Name;
b. Office address;
c. Name of practice;
d. Identities of partners or associates, including their
names, specialties, and how long they have been associated with
Dr. (..........);
e. Specialty of Dr. (.........);
f. Age;
g. The names and dates of attendance at any medical
schools;
h. Full information as to internship or residency,
including the place and dates of the internship or residency as
well as any specialized fields of practice engaged in during
such internship or residency;
i. The complete history of the practice of Dr.
(..........) from and after medical school, setting forth the
places where Dr. (..........) practiced medicine, the persons
with whom Dr. (..........) was associated, the dates of the
practice, and the reasons for leaving the practice;
j. Full information as to any board certifications Dr.
(..........) may hold, including the field of specialty and the
dates of the certifications and any recertifications;
k. Identifying the medical societies and organizations to
which Dr. (..........) belongs, giving full information as to
any offices held in the organizations;
l. Identifying all professional journal articles,
treatises, textbooks, abstracts, speeches, or presentations
which Dr. (..........) has authored or contributed to; and
m. Any other information which describes or explains the
training and experience of Dr. (..........) for the practice of
medicine.
INTERROGATORY NO. 2:
Has Dr. (..........) been the subject of any professional
disciplinary actions of any kind and, if so:
State whether Dr. (..........'s) license to practice
medicine has ever been revoked or publicly limited in any way
and, if so, give the date and the reasons for such revocation or
restriction.
INTERROGATORY NO. 3:
Please set forth a listing by author, title, publisher, and
date of publication of all the medical texts referred to by Dr.
(..........) with respect to the practice of medicine during the
past five years.
INTERROGATORY NO. 4:
Please set forth a complete listing of the medical and
professional journals to which Dr. (..........) subscribes or
has subscribed within the past five years.
INTERROGATORY NO. 5:
As to each expert whom you expect to call as a witness at
trial, please state:
a. The expert's name, address, occupation, and title;
b. The expert's field of expertise, including
subspecialties, if any;
c. The expert's education background;
d. The expert's work experience in the field of expertise;
e. All professional societies and associations of which
the expert is a member;
f. All hospitals at which the expert has staff privileges
of any kind;
g. All written publications of which the expert is the
author, giving the title of the publication and when and where
it was published.
INTERROGATORY NO. 6:
With respect to each person identified in answer to the
foregoing interrogatory, state:
a. The subject matter on which the person is expected to
testify;
b. The substance of the facts and opinions to which the
person is expected to testify; and
c. A summary of the grounds for each opinion, including
the specific factual data upon which the opinion will be based.
INTERROGATORY NO. 7:
Please state whether there is any policy of insurance that
will provide coverage to the defendant should liability attach
on the basis of the allegations contained in the plaintiff's
Complaint. If so, state with regard to each policy applicable:
a. The name and address of the insurer;
b. The exact limits of coverage applicable;
c. Whether any reservation of rights or controversy or
coverage dispute exists between you and the insurance company.
Please attach copies of each policy to your Answers.
INTERROGATORY NO. 8:
State the full name, present address, occupation, age,
present employer, and the present employer's address of each
physician, nurse, or other medical personnel in the employ of
the defendant or defendant's professional association who
treated, cared for, examined, or otherwise attended (name) from
(date 1), through (date 2). With regard to every individual,
please state:
a. Each date upon which the individual attended (name);
b. The nature of the treatment or care rendered (name) on
each date;
c. The qualifications and area of specialty of each
individual; and
d. The present address of each individual.
In responding to this interrogatory, referring plaintiff's
counsel to medical records will not be deemed to be a sufficient
answer as plaintiff's counsel has reviewed the medical records
and is not able to determine the identity of the individuals.
INTERROGATORY NO. 9: (Hospital defendant only)
Please state the name, address, telephone number, and last
known employer of the nursing supervisor for the shifts set
forth in the preceding interrogatory.
INTERROGATORY NO. 10:
Please identify by name and current or last known address
and telephone number each and every person who has or claims to
have knowledge of any facts relevant to the issues in this
lawsuit, stating in detail all facts each person has or claims
to have knowledge of.
INTERROGATORY NO. 11:
a. Have any statements been taken from nonparties or the
plaintiff(s) pertaining to this claim? For purposes of this
request, a statement previously made is (1) a written statement
signed or otherwise adopted or approved by the person making it,
or (2) a stenographic, mechanical, electrical, or other
recording, or a transcription thereof, which is a substantial
verbatim recital or an oral statement by the person making it
and contemporaneously recorded. With regard to each statement,
state:
1. The name and address of each person making a statement;
2. The date on which the statement was made;
3. The name and address of the person or persons taking
each statement; and
4. The subject matter of each statement.
b. Attach a copy of each statement to the answers to these
interrogatories.
c. If you claim that any information, document, or thing
sought or requested is privileged, protected by the work product
doctrine, or otherwise not discoverable, please:
1. Identify each document or thing by date, author,
subject matter, and recipient;
2. State in detail the legal and factual basis for
asserting said privilege, work product protection, or objection,
or refusing to provide discovery as requested.
INTERROGATORY NO. 12:
Do you or anyone acting on your behalf know of any
photographs, films, or videotapes depicting [..........]? If
so, state:
a. The number of photographs or feet of film or videotape;
b. The places, objects, or persons photographed, filmed,
or videotaped;
c. The date the photographs, film, or videotapes were
taken;
d. The name, address, and telephone number of each person
who has the original or copy.
Please attach copies of any photographs or videotapes.
INTERROGATORY NO. 13:
If you claim that injuries to plaintiff complained of in
plaintiff's Complaint were contributed to or caused by plaintiff
or any other person, including any other physician, hospital,
nurse, or other health care provider, please state:
a. The facts upon which you base the claim;
b. The name, current address, and current employer of each
person whom you allege was or may have been negligent.
INTERROGATORY No. 14:
Please state the name or names of the individuals supplying
the information contained in your Answers to these
Interrogatories. In addition, please state these individuals'
current addresses, places of employment, and their current
position at their place of employment.
INTERROGATORY NO. 15:
Does defendant have knowledge of any conversations or
statements made by the plaintiff(s) concerning any subject
matter relative to this action? If so, please state:
a. The name and last known address of each person who
claims to have heard such conversations or statements;
b. The date of such conversations or statements;
c. The summary or the substance of each conversation or
statement.
INTERROGATORY NO. 16:
Did the defendant, the defendant's agents, or employees
conduct a surveillance of the plaintiff(s)? If so, state:
a. Name, address, and occupation of the person who
conducted each surveillance;
b. Name and address of the person who requested each
surveillance to be made;
c. Date or dates on which each surveillance was conducted;
d. Place or places where each surveillance was performed;
e. Information or facts discovered in the surveillance;
f. Name and address of the person now having custody of
each written report, photographs, videotapes, or other documents
concerning each surveillance.
INTERROGATORY NO. 17:
Are you aware of any person you may call as a witness at
the trial of this action who may have or claims you have any
information concerning the medical, mental, or physical
condition of the plaintiff(s) prior to the incident in
question? .......... If so, state:
a. The name and last know address of each person and your
means of ascertaining the present whereabouts of each person;
b. The occupation and employer of each person;
c. The subject and substance of the information each
person claims to have.
INTERROGATORY NO. 18:
As to any affirmative defenses you allege, state the
factual basis of and describe each affirmative defense, the
evidence which will be offered at trial concerning any alleged
affirmative defense, including the names of any witnesses who
will testify in support thereof, and the descriptions of any
exhibits which will be offered to establish each affirmative
defense.
INTERROGATORY NO. 19:
Do you contend that any entries in the answering
defendant's medical/hospital records are incorrect or
inaccurate? If so, state:
a. The precise entry(ies) that you think are incorrect or
inaccurate;
b. What you contend the correct or accurate entry(ies)
should have been;
c. The name, address, and employer of each and every
person who has knowledge pertaining to a. and b.;
d. A description, including the author and title of each
and every document that you claim supports your answer to a. and
b.;
e. The name, address, and telephone number of each and
every person you intend to call as a witness in support of your
contention.
(b) Uniform defendant's interrogatories to the plaintiff
for personal injury cases are as follows:
DEFENDANT'S INTERROGATORIES TO PLAINTIFF (PERSONAL INJURY)
1. State your full name, address, date of birth, marital
status, and social security number.
2. If you have been employed at any time in the past ten
years, with respect to this period state the names and addresses
of each of your employers, describe the nature of your work, and
state the approximate dates of each employment.
3. If you have ever been a party to a lawsuit where you
claimed damages for injury to your person, state the title of
the suit, the court file number, the date of filing, the name
and address of any involved insurance carrier, the kind of
claim, and the ultimate disposition of the same. (This is meant
to include workers' compensation and social security disability
claims.)
4. Identify by name and address each and every physician,
surgeon, medical practitioner, or other health care practitioner
whom you consulted or who provided advice, treatment, or care
for you at any time within the last ten years and, with respect
to each contract, consultation, treatment, or advice, describe
the same with particularity and indicate the reasons for the
same.
5. State the name and address of each and every hospital,
treatment facility, or institution in which plaintiff has been
confined for any reason at any time, and set forth with
particularity the reasons for each confinement and/or treatment
and the dates of each.
6. Itemize all special damages which you claim in this
case and specify, where appropriate, the basis and reason for
your calculation as to each item of special damages.
7. List all payments related to the injury or disability
in question that have been made to you, or on your behalf, from
"collateral sources" as that term is defined in Minnesota
Statutes, section 548.36.
8. List all amounts that have been paid, contributed, or
forfeited by, or on behalf of, you or members of your immediate
family for the two-year period immediately before the accrual of
this action to secure the right to collateral source benefits
that have been made to you or on your behalf.
9. Do you contend any of the following:
a. That defendant did not possess that degree of skill and
learning which is normally possessed and used by medical
professionals in good standing in a similar practice and under
like circumstances;
b. That defendant did not exercise that degree of skill
and learning which is normally used by medical professionals in
good standing in a similar practice and under like circumstances.
10. If your answer to any part of the foregoing
interrogatory is yes, with respect to each answer:
a. Specify in detail each contention;
b. Specify in detail each act or omission of defendant
which you contend was a departure from the degree of skill and
learning normally used by medical professionals in a similar
practice and under like circumstances;
c. Specify in detail the conduct of defendant as you claim
it should have been;
d. Specify in detail each fact known to you and your
attorneys upon which you base your answers to interrogatories 9
and 10.
11. If you claim defendant failed to disclose to you any
risk concerning the involved medical care and treatment which,
if disclosed, would have resulted in your refusing to consent to
the medical care or treatment, then:
a. State in detail each and every thing defendant did tell
you concerning the risks of the involved medical care and
treatment, giving the approximate dates thereof and identifying
all persons in attendance;
b. Describe each and every risk which you claim defendant
should have, but failed to, disclose to you;
c. Describe in detail precisely what you claim defendant
should have said to you, but failed to say, concerning the risks
of the involved medical care and treatment;
d. Explain in detail all facts and reasons upon which you
base the claim that, if the foregoing risks were explained to
you, you would not have consented to the involved medical care
and treatment.
12. Please identify by name and current or last known
address and telephone number each and every person who has or
claims to have any knowledge of any facts relevant to the issues
in this lawsuit, stating in detail all facts each person has or
claims to have knowledge of.
13. As to each expert whom you expect to call as a witness
at trial, please state:
a. The expert's name, address, occupation, and title;
b. The expert's field of expertise, including
subspecialties, if any;
c. The expert's education background;
d. The expert's work experience in the field of expertise;
e. All professional societies and associations of which
the expert is a member;
f. All hospitals at which the expert has staff privileges
of any kind;
g. All written publications of which the expert is the
author, giving the title of the publication and when and where
it was published.
14. With respect to each person identified in answer to
the foregoing interrogatory, state:
a. The subject matter on which the expert is expected to
testify;
b. The substance of the facts and opinions to which the
expert is expected to testify; and
c. A summary of the grounds for each opinion, including
the specific factual data upon which the opinion will be based.
15. Have any statements been taken from any defendant or
nonparty pertaining to this claim? For purposes of this
request, a statement previously made is: (1) a written
statement signed or otherwise adopted or approved by the person
making it, or (2) a stenographic, mechanical, electrical, or
other recording, or a transcription thereof, which is a
substantial verbatim recital or an oral statement by the person
making it and contemporaneously recorded. With regard to each
statement, state:
a. The name and address of each person making a statement;
b. The date on which the statement was made;
c. The name and address of the person or persons taking
each statement; and
d. The subject matter of the statement;
e. Attach a copy of each statement to the answers to these
interrogatories.
f. If you claim that any information, document, or thing
sought or requested is privileged, protected by the work product
doctrine, or otherwise not discoverable, please:
1. Identify each document or thing by date, author,
subject matter, and recipient;
2. State in detail the legal and factual basis for
asserting said privilege, work product protection, or objection,
or refusing to provide discovery as requested.
(c) Uniform defendant's interrogatories to the plaintiff
for wrongful death cases are as follows:
DEFENDANT'S INTERROGATORIES TO PLAINTIFF (WRONGFUL DEATH)
1. State the full name, age, present occupation, business
address, present residence address, and address for a period of
ten years prior to the present date for each heir or next of kin
(including the Trustee) on whose behalf this action has been
commenced.
2. Set forth the date of birth and place of birth of the
decedent.
3. Set forth the date of birth and place of birth of the
decedent's surviving spouse.
4. Set forth the names, date of birth, and places of birth
of any children of decedent.
5. Set forth the names, addresses, and dates of birth of
all heirs and next of kin of decedent and set forth the
relationship of each individual to decedent.
6. Set forth the date of marriage between decedent and
decedent's surviving spouse and the place of the marriage.
7. Set forth whether or not there were any proceedings for
a legal separation or divorce instituted between decedent and
decedent's surviving spouse and, if so, set forth the dates that
the proceedings were instituted, the result of the proceedings,
and the court in which the proceedings were instituted.
8. Set forth whether or not decedent was ever married to
anyone other than decedent's surviving spouse and if so, set
forth the names of any other spouse or spouses and the inclusive
dates of any other marriages.
9. Set forth whether or not decedent's surviving spouse
has ever been married to anyone other than decedent and, if so,
set forth the names of any other spouses and the inclusive dates
of any other marriages.
10. If you claim defendant failed to disclose to you any
risk concerning the involved medical care and treatment which,
if disclosed, would have resulted in the decedent's refusing to
consent to the medical care or treatment, then:
a. State in detail each and every thing defendant did tell
you concerning the risks of the involved medical care and
treatment, giving the approximate dates thereof and identify all
persons in attendance;
b. Describe each and every risk which you claim defendants
should have, but failed to, disclose to you;
c. Describe in detail precisely what you claim defendant
should have said to you, but failed to say, concerning the risks
of the involved medical care and treatment;
d. Explain in detail all facts and reasons upon which you
base the claim that, if the foregoing risks were explained to
you, you would not have consented to the involved medical care
and treatment.
11. Was the deceased employed at the time of death?
12. If the answer to Interrogatory No. 10 is yes, indicate
the following:
a. The name and address of the deceased's employer and the
nature of the employment;
b. The amount of earnings from the employment;
c. Defendant requests copies of the decedent's federal and
state income tax return for the past five years.
13. If decedent was self-employed for any period of time
during the ten-year period of time immediately preceding
decedent's death, set forth the following:
a. The inclusive dates of the self-employment;
b. A specific and detailed description of the nature of
the self-employment;
c. The business name and address under which decedent
operated; and
d. A specific and detailed description of decedent's
earnings from the self-employment.
14. Set forth in detail a chronological education history
of decedent including the name and address of each school
attended, the inclusive dates of attendance, the date of
graduation, a description of any degrees awarded, a description
of the major area of study and the grade point average upon
graduation.
15. Did the decedent make any contribution of money,
property, or other items having a money worth toward the
support, maintenance, or well-being of any next of kin and, if
so, please itemize the following:
a. The amount and nature of the contribution;
b. The date(s) upon which each contribution was made;
c. The persons(s) receiving each contribution;
d. The period of time over which the contributions were
made;
e. The regularity or irregularity of the contributions;
f. Identify by date, author, type, recipient, and present
custodian each and every document referring to or otherwise
evidencing each contribution.
16. Identify by name and address each and every physician,
surgeon, medical practitioner, or other health care practitioner
whom the decedent consulted or who provided advice, treatment,
or care for the decedent at any time within ten years prior to
death and, with respect to the contact, consultation, treatment,
or advice, describe the same with particularity and indicate the
reasons for the same.
17. State the name and address of each and every hospital,
treatment facility, or institution in which the decedent has
been confined for any reason at any time, and set forth with
particularity the reasons for each confinement and/or treatment
and the dates of each.
18. Itemize all special damages which you claim in this
case and specify, where appropriate, the basis and reason for
your calculation as to each item of special damages.
19. List any payment related to the injury or disability
in question made to you, or on your behalf, from "collateral
sources" as that term is defined in Minnesota Statutes, section
548.36.
20. List all amounts that have been paid, contributed or
forfeited by, or on behalf of, you or members of your immediate
family for the two-year period immediately before the accrual of
this action to secure the right to collateral source benefits
that have been made to you or on your behalf.
21. Do you contend any of the following:
a. That any of the defendants did not possess that degree
of skill and learning which is normally possessed and used by
medical professionals in good standing in a similar practice and
under like circumstances? If so, identify the defendants;
b. That any of the defendants did not exercise that degree
of skill and learning which is normally used by medical
professionals in good standing in a similar practice and under
like circumstances? If so, identify the defendants.
22. If your answer to any part of the foregoing
interrogatory is yes, with respect to each answer:
a. Specify in detail your contention;
b. Specify in detail each act or omission of each
defendant which you contend was a departure from that degree of
skill and learning normally used by medical professionals in a
similar practice and under like circumstances.
23. Please identify by name and current or last known
address and telephone number of each and every person who has or
claims to have any knowledge of any facts relevant to the issues
in this lawsuit, stating in detail all facts each person has or
claims to have knowledge of.
24. As to each expert whom you expect to call as a witness
at trial, please state:
a. The expert's name, address, occupation, and title;
b. The expert's field of expertise, including
subspecialties, if any;
c. The expert's education background;
d. The expert's work experience in the field of expertise;
e. All professional societies and associations of which
the expert is a member;
f. All hospitals at which the expert has staff privileges
of any kind;
g. All written publications of which the expert is the
author, giving the title of the publication and when and where
it was published.
25. With respect to each person identified in the
foregoing interrogatory, state:
a. The subject matter on which the expert is expected to
testify;
b. The substance of the facts and opinions to which the
expert is expected to testify; and
c. A summary of the grounds for each opinion, including
the specific factual data upon which the opinion will be based.
26. Set forth in detail anything said or written by which
plaintiff claims to be relevant to any of the issues in this
lawsuit, identifying the time and place of each statement, who
was present, and what was said by each person who was present.
27. Have any statements been taken from any defendant or
nonparty pertaining to this claim? For purposes of this
request, a statement previously made is: (1) a written
statement signed or otherwise adopted or approved by the person
making it, or (2) a stenographic, mechanical, electrical, or
other recording, or a transcription thereof, which is a
substantial verbatim recital or an oral statement by the person
making it and contemporaneously recorded. With regard to each
statement, state:
a. The name and address of each person making a statement;
b. The date on which the statement was made;
c. The name and address of the person or persons taking
each statement; and
d. The subject matter of each statement;
e. Attach a copy of each statement to the answers to these
interrogatories;
f. If you claim that any information, document or thing
sought or requested is privileged, protected by the work product
doctrine, or otherwise not discoverable, please:
1. Identify each document or thing by date, author,
subject matter, and recipient;
2. State in detail the legal and factual basis for
asserting said privilege, work product protection, or objection,
or refusing to provide discovery as requested.
ARTICLE 9
FINANCING
Section 1. [16A.724] [HEALTH CARE ACCESS FUND.]
A health care access fund is created in the state
treasury. The fund is a direct appropriated special revenue
fund. The commissioner shall deposit to the credit of the fund
money made available to the fund.
Sec. 2. Minnesota Statutes 1990, section 60A.15,
subdivision 1, is amended to read:
Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or
before April 15, June 15, and December 15 of each year, every
domestic and foreign company, including town and farmers' mutual
insurance companies and, domestic mutual insurance
companies, health maintenance organizations, and nonprofit
health service corporations, shall pay to the commissioner of
revenue installments equal to one-third of the insurer's total
estimated tax for the current year. Except as provided
in paragraph paragraphs (b) and (e), installments must be based
on a sum equal to two percent of the premiums described in
paragraph (c).
(b) For town and farmers' mutual insurance companies and
mutual property and casualty insurance companies other than
those (i) writing life insurance, or (ii) whose total assets on
December 31, 1989, exceeded $1,600,000,000, the installments
must be based on an amount equal to the following percentages of
the premiums described in paragraph (c):
(1) for premiums paid after December 31, 1988, and before
January 1, 1992, one percent; and
(2) for premiums paid after December 31, 1991, one-half of
one percent.
(c) Installments under paragraph (a) or, (b), or (e) are
percentages of gross premiums less return premiums on all direct
business received by the insurer in this state, or by its agents
for it, in cash or otherwise, during such year, excepting
premiums written for marine insurance as specified in
subdivision 6.
(d) Failure of a company to make payments of at least
one-third of either (1) the total tax paid during the previous
calendar year or (2) 80 percent of the actual tax for the
current calendar year shall subject the company to the penalty
and interest provided in this section, unless the total tax for
the current tax year is $500 or less.
(e) For health maintenance organizations and nonprofit
health services corporations, the installments must be based on
an amount equal to one percent of premiums described in
paragraph (c) that are paid after December 31, 1995.
(f) Premiums under the children's health plan, the health
right plan, and Minnesota comprehensive health insurance plan
are not subject to tax under this section.
Sec. 3. Minnesota Statutes 1990, section 62C.01,
subdivision 3, is amended to read:
Subd. 3. [SCOPE.] Every foreign or domestic nonprofit
corporation organized for the purpose of establishing or
operating a health service plan in Minnesota whereby health
services are provided to subscribers to the plan under a
contract with the corporation shall be subject to and governed
by Laws 1971, chapter 568, and shall not be subject to the laws
of this state relating to insurance, except section 60A.15 and
as otherwise specifically provided. Laws 1971, chapter 568
shall apply to all health service plan corporations incorporated
after August 1, 1971, and to all existing health service plan
corporations, except as otherwise provided. Nothing in sections
62C.01 to 62C.23 shall apply to prepaid group practice plans. A
prepaid group practice plan is any plan or arrangement other
than a service plan, whereby health services are rendered to
certain patients by providers who devote their professional
effort primarily to members or patients of the plan, and whereby
the recipients of health services pay for the services on a
regular, periodic basis, not on a fee for service basis.
Sec. 4. Minnesota Statutes 1990, section 290.01,
subdivision 19b, is amended to read:
Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For
individuals, estates, and trusts, there shall be subtracted from
federal taxable income:
(1) interest income on obligations of any authority,
commission, or instrumentality of the United States to the
extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the
United States;
(2) if included in federal taxable income, the amount of
any overpayment of income tax to Minnesota or to any other
state, for any previous taxable year, whether the amount is
received as a refund or as a credit to another taxable year's
income tax liability;
(3) the amount paid to others not to exceed $650 for each
dependent in grades kindergarten to 6 and $1,000 for each
dependent in grades 7 to 12, for tuition, textbooks, and
transportation of each dependent in attending an elementary or
secondary school situated in Minnesota, North Dakota, South
Dakota, Iowa, or Wisconsin, wherein a resident of this state may
legally fulfill the state's compulsory attendance laws, which is
not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363. As used in this
clause, "textbooks" includes books and other instructional
materials and equipment used in elementary and secondary schools
in teaching only those subjects legally and commonly taught in
public elementary and secondary schools in this state.
"Textbooks" does not include instructional books and materials
used in the teaching of religious tenets, doctrines, or worship,
the purpose of which is to instill such tenets, doctrines, or
worship, nor does it include books or materials for, or
transportation to, extracurricular activities including sporting
events, musical or dramatic events, speech activities, driver's
education, or similar programs. In order to qualify for the
subtraction under this clause the taxpayer must elect to itemize
deductions under section 63(e) of the Internal Revenue Code;
(4) to the extent included in federal taxable income,
distributions from a qualified governmental pension plan, an
individual retirement account, simplified employee pension, or
qualified plan covering a self-employed person that represent a
return of contributions that were included in Minnesota gross
income in the taxable year for which the contributions were made
but were deducted or were not included in the computation of
federal adjusted gross income. The distribution shall be
allocated first to return of contributions until the
contributions included in Minnesota gross income have been
exhausted. This subtraction applies only to contributions made
in a taxable year prior to 1985;
(5) income as provided under section 290.0802;
(6) the amount of unrecovered accelerated cost recovery
system deductions allowed under subdivision 19g; and
(7) to the extent included in federal adjusted gross
income, income realized on disposition of property exempt from
tax under section 290.491.; and
(8) to the extent not deducted in determining federal
taxable income, the amount paid for health insurance of
self-employed individuals as determined under section 162(l) of
the Internal Revenue Code, except that the 25 percent limit does
not apply. If the taxpayer deducted insurance payments under
section 213 of the Internal Revenue Code of 1986, the
subtraction under this clause must be reduced by the lesser of:
(i) the total itemized deductions allowed under section
63(d) of the Internal Revenue Code, less state, local, and
foreign income taxes deductible under section 164 of the
Internal Revenue Code and the standard deduction under section
63(c) of the Internal Revenue Code; or
(ii) the lesser of (A) the amount of insurance qualifying
as "medical care" under section 213(d) of the Internal Revenue
Code to the extent not deducted under section 162(1) of the
Internal Revenue Code or excluded from income or (B) the total
amount deductible for medical care under section 213(a).
HOSPITALS AND HEALTH CARE PROVIDERS
Sec. 5. [295.50] [DEFINITIONS.]
Subdivision 1. [DEFINITIONS.] For purposes of sections
295.50 to 295.58, the following terms have the meanings given.
Subd. 2. [COMMISSIONER.] "Commissioner" is the
commissioner of revenue.
Subd. 3. [GROSS REVENUES.] (a) "Gross revenues" are total
amounts received in money or otherwise by:
(1) a resident hospital for inpatient or outpatient
services as defined in Minnesota Rules, part 4650.0102, subparts
21 and 29;
(2) a nonresident hospital for inpatient or outpatient
services as defined in Minnesota Rules, part 4650.0102, subparts
21 and 29, provided to patients domiciled in Minnesota;
(3) a resident health care provider, other than a health
maintenance organization, for covered services listed in section
256B.0625;
(4) a nonresident health care provider for covered services
listed in section 256B.0625 provided to an individual domiciled
in Minnesota;
(5) a wholesale drug distributor for sale or distribution
of prescription drugs that are delivered in Minnesota by the
distributor or a common carrier, unless the prescription drugs
are delivered to another wholesale drug distributor; and
(6) a health maintenance organization as gross premiums for
enrollees, carrier copayments, and fees for covered services
listed in section 256B.0625.
(b) Gross revenues do not include governmental, foundation,
or other grants or donations to a hospital or health care
provider for operating or other costs.
Subd. 4. [HEALTH CARE PROVIDER.] "Health care provider" is
a vendor of medical care qualifying for reimbursement under the
medical assistance program provided under chapter 256B, and
includes health maintenance organizations but excludes hospitals
and pharmacies.
Subd. 5. [HMO.] "Health maintenance organization" is a
nonprofit corporation licensed and operated as provided in
chapter 62D.
Subd. 6. [HOME HEALTH CARE SERVICES.] "Home health care
services" are services:
(1) defined under the state medical assistance program as
home health agency services, personal care services and
supervision of personal care services, private duty nursing
services, and waivered services; and
(2) provided at a recipient's residence, if the recipient
does not live in a hospital, nursing facility, as defined in
section 62A.46, subdivision 3, or intermediate care facility for
persons with mental retardation as defined in section 256B.055,
subdivision 12, paragraph (d).
Subd. 7. [HOSPITAL.] "Hospital" is a hospital licensed
under chapter 144, a hospital providing inpatient or outpatient
services licensed by any other state or province or territory of
Canada or a surgical center.
Subd. 8. [NONRESIDENT HEALTH CARE PROVIDER.] "Nonresident
health care provider" means a health care provider that is not a
resident health care provider.
Subd. 9. [NONRESIDENT HOSPITAL.] "Nonresident hospital"
means a hospital physically located outside Minnesota.
Subd. 10. [PHARMACY.] "Pharmacy" means a pharmacy, as
defined in section 151.01, if the only goods or services the
pharmacy sells that qualify for reimbursement under the medical
assistance program under chapter 256B are drugs and prosthetics.
Subd. 11. [RESIDENT HEALTH CARE PROVIDER.] "Resident
health care provider" means a health care provider whose
principal place of dispensing health care is in Minnesota.
Subd. 12. [RESIDENT HOSPITAL.] "Resident hospital" means a
hospital physically located inside Minnesota.
Subd. 13. [SURGICAL CENTER.] "Surgical center" is an
outpatient surgical center as defined in Minnesota Rules,
chapter 4675 or a similar facility located in any other state or
province or territory of Canada.
Subd. 14. [WHOLESALE DRUG DISTRIBUTOR.] "Wholesale drug
distributor" means a wholesale drug distributor required to be
licensed under sections 151.42 to 151.51.
Sec. 6. [295.51] [MINIMUM CONTACTS REQUIRED FOR
JURISDICTION TO TAX GROSS REVENUE.]
Subdivision 1. [BUSINESS TRANSACTIONS IN MINNESOTA.] A
hospital or health care provider is subject to tax under
sections 295.50 to 295.58 if it is "transacting business in
Minnesota." A hospital or health care provider is transacting
business in Minnesota only if it:
(1) maintains an office in Minnesota;
(2) has employees, representatives, or independent
contractors conducting business in Minnesota;
(3) regularly sells covered services to customers that
receive the covered services in Minnesota;
(4) regularly solicits business from potential customers in
Minnesota;
(5) regularly performs services outside Minnesota the
benefits of which are consumed in Minnesota;
(6) owns or leases tangible personal or real property
physically located in Minnesota; or
(7) receives medical assistance payments from the state of
Minnesota.
Subd. 2. [PRESUMPTION.] A hospital or health care provider
is presumed to regularly solicit business within Minnesota if it
receives gross receipts for covered services from 20 or more
patients domiciled in Minnesota in a calendar year.
Sec. 7. [295.52] [TAXES IMPOSED.]
Subdivision 1. [HOSPITAL TAX.] A tax is imposed on each
hospital equal to two percent of its gross revenues.
Subd. 2. [PROVIDER TAX.] A tax is imposed on each health
care provider equal to two percent of its gross revenues.
Subd. 3. [WHOLESALE DRUG DISTRIBUTOR TAX.] A tax is
imposed on each wholesale drug distributor equal to two percent
of its gross revenues.
Subd. 4. [USE TAX; PRESCRIPTION DRUGS.] A person that
receives prescription drugs for resale or use in Minnesota,
other than from a wholesale drug distributor that paid the tax
under subdivision 3, is subject to a tax equal to two percent of
the price paid. Liability for the tax is incurred when
prescription drugs are received in Minnesota by the person.
Sec. 8. [295.53] [EXEMPTIONS; SPECIAL RULES.]
Subdivision 1. [EXEMPTIONS.] The following payments are
excluded from the gross revenues subject to the hospital or
health care provider taxes under sections 295.50 to 295.57:
(1) payments received from the federal government for
services provided under the Medicare program, excluding enrollee
deductible and coinsurance payments;
(2) medical assistance payments;
(3) payments received for services performed by nursing
homes licensed under chapter 144A, services provided in
supervised living facilities and home health care services;
(4) payments received from hospitals for goods and services
that are subject to tax under section 295.52;
(5) payments received from health care providers for goods
and services that are subject to tax under section 295.52;
(6) amounts paid for prescription drugs to a wholesale drug
distributor reduced by reimbursements received for prescription
drugs under clauses (1), (2), (7), and (8);
(7) payments received under the general assistance medical
care program;
(8) payments received for providing services under the
health right program under article 4; and
(9) payments received by a resident health care provider or
the wholly owned subsidiary of a resident health care provider
for care provided outside Minnesota to a patient who is not
domiciled in Minnesota.
Subd. 2. [DEDUCTIONS FOR HMOS.] (a) In addition to the
exemptions allowed under subdivision 1, a health maintenance
organization may deduct from its gross revenues for the year:
(1) amounts added to reserves, if total reserves do not
exceed 25 percent of gross revenues for the prior year;
(2) assessments for the comprehensive health insurance plan
under section 62E.11 paid during the year; and
(3) an allowance for administration and underwriting.
(b) The commissioner of health, in consultation with the
commissioners of commerce and revenue, shall establish by rule
under chapter 14 the percentage of health maintenance revenue
that will be allowed as a deduction for administrative and
underwriting expenses. The commissioner of health shall
determine the percentage allowance based on the average expenses
of health maintenance organizations that are equivalent to the
claims administration and other underwriting services of third
party payors. These expenses do not include the portion of
health maintenance organization costs that are similar to the
administrative costs of direct health care providers, rather
than third party payors, and do not include costs deductible
under paragraph (a), clauses (1) and (2). The commissioner of
health may adopt emergency rules.
Subd. 3. [RESTRICTION ON ITEMIZATION.] A hospital or
health care provider must not separately state the tax
obligation under section 295.52 on bills provided to individual
patients.
Sec. 9. [295.54] [CREDIT FOR TAXES PAID TO ANOTHER STATE.]
A resident hospital or resident health care provider who is
liable for taxes payable to another state or province or
territory of Canada measured by gross receipts and is subject to
tax under section 295.52 is entitled to a credit for the tax
paid to another state or province or territory of Canada to the
extent of the lesser of (1) the tax actually paid to the other
state or province or territory of Canada, or (2) the amount of
tax imposed by Minnesota on the gross receipts subject to tax in
the other taxing jurisdictions.
Sec. 10. [295.55] [PAYMENT OF TAX.]
Subdivision 1. [SCOPE.] The provisions of this section
apply to the taxes imposed under sections 295.50 to 295.58.
Subd. 2. [ESTIMATED TAX; HOSPITALS.] (a) Each hospital
must make estimated payments of the taxes for the calendar year
in monthly installments to the commissioner within ten days
after the end of the month.
(b) Estimated tax payments are not required if the tax for
the calendar year is less than $500 or if the hospital has been
allowed a grant under section 144.1484, subdivision 2 for the
year.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270.75, from the due date of the
payment until paid or until the due date of the annual return at
the rate specified in section 270.75. An underpayment of an
estimated installment is the difference between the amount paid
and the lesser of (1) 90 percent of one-twelfth of the tax for
the calendar year or (2) the tax for the actual gross revenues
received during the month.
Subd. 3. [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each
taxpayer, other than a hospital, must make estimated payments of
the taxes for the calendar year in quarterly installments to the
commissioner by April 15, July 15, October 15, and January 15 of
the following calendar year.
(b) Estimated tax payments are not required if the tax for
the calendar year is less than $500.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270.75, from the due date of the
payment until paid or until the due date of the annual return at
the rate specified in section 270.75. An underpayment of an
estimated installment is the difference between the amount paid
and the lesser of (1) 90 percent of one-quarter of the tax for
the calendar year or (2) the tax for the actual gross revenues
received during the quarter.
Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer
with an aggregate tax liability of $60,000 or more during a
calendar quarter ending the last day of March, June, September,
or December must thereafter remit all liabilities by means of a
funds transfer as defined in section 336.4A-104, paragraph (a).
The funds transfer payment date, as defined in section
336.4A-401, is on or before the date the tax is due. If the
date the tax is due is not a funds-transfer business day, as
defined in section 336.4A-105, paragraph (a), clause (4), the
payment date is on or before the first funds-transfer business
day after the date the tax is due.
Subd. 5. [ANNUAL RETURN.] The taxpayer must file an annual
return reconciling the estimated payments by March 15 of the
following calendar year.
Subd. 6. [FORM OF RETURNS.] The estimated payments and
annual return must contain the information and be in the form
prescribed by the commissioner.
Sec. 11. [295.57] [COLLECTION AND ENFORCEMENT; RULEMAKING;
APPLICATION OF OTHER CHAPTERS.]
Unless specifically provided otherwise by sections 295.50
to 295.58, the enforcement, interest, and penalty provisions
under chapter 294, appeal and criminal penalty provisions under
chapter 289A, and collection and rulemaking provisions under
chapter 270, apply to a liability for the taxes imposed under
sections 295.50 to 295.58.
Sec. 12. [295.58] [DEPOSIT OF REVENUES.]
The commissioner shall deposit all revenues, including
penalties and interest, derived from the taxes imposed by
sections 295.50 to 295.57 and from the insurance premiums tax on
health maintenance organizations and nonprofit health service
corporations in the health care access fund in the state
treasury.
Sec. 13. [295.59] [SEVERABILITY.]
If any section, subdivision, clause, or phrase of sections
295.50 to 295.58 is for any reason held to be unconstitutional
or in violation of federal law, the decision shall not affect
the validity of the remaining portions of sections 295.50 to
295.58. The legislature declares that it would have passed
sections 295.50 to 295.58 and each section, subdivision,
sentence, clause, and phrase thereof, irrespective of the fact
that any one or more sections, subdivisions, sentences, clauses,
or phrases is declared unconstitutional.
Sec. 14. Minnesota Statutes 1991 Supplement, section
297.02, subdivision 1, is amended to read:
Subdivision 1. [RATES.] A tax is hereby imposed upon the
sale of cigarettes in this state or having cigarettes in
possession in this state with intent to sell and upon any person
engaged in business as a distributor thereof, at the following
rates, subject to the discount provided in section 297.03:
(1) On cigarettes weighing not more than three pounds per
thousand, 21.5 24 mills on each such cigarette;
(2) On cigarettes weighing more than three pounds per
thousand, 43 48 mills on each such cigarette.
Sec. 15. Minnesota Statutes 1991 Supplement, section
297.03, subdivision 5, is amended to read:
Subd. 5. [SALE OF STAMPS.] The commissioner shall sell
stamps to any person licensed as a distributor at a discount of
1.1 1.0 percent from the face amount of the stamps for the first
$1,500,000 of such stamps purchased in any fiscal year; and at a
discount of .65 .60 percent on the remainder of such stamps
purchased in any fiscal year. The commissioner shall not sell
stamps to any other person. The commissioner may prescribe the
method of shipment of the stamps to the distributor as well as
the quantities of stamps purchased.
Sec. 16. [FLOOR STOCKS TAX.]
Subdivision 1. [CIGARETTES.] A floor stocks tax is imposed
on every person engaged in business in this state as a
distributor, retailer, subjobber, vendor, manufacturer, or
manufacturer's representative of cigarettes, on the stamped
cigarettes in the person's possession or under the person's
control at 12:01 a.m. on July 1, 1992. The tax is imposed at
the following rates, subject to the discounts in section 297.03:
(1) on cigarettes weighing not more than three pounds a
thousand, 2.5 mills on each cigarette; and
(2) on cigarettes weighing more than three pounds a
thousand, five mills on each cigarette.
Each distributor, by July 8, 1992, shall file a report with
the commissioner, in the form the commissioner prescribes,
showing the cigarettes on hand at 12:01 a.m. on July 1, 1992,
and the amount of tax due on the cigarettes. The tax imposed by
this section is due and payable by August 1, 1992, and after
that date bears interest at the rate of one percent a month.
Each retailer, subjobber, vendor, manufacturer, or
manufacturer's representative shall file a return with the
commissioner, in the form the commissioner prescribes, showing
the cigarettes on hand at 12:01 a.m. on July 1, 1992, and pay
the tax due thereon by August 1, 1992. Tax not paid by the due
date bears interest at the rate of one percent a month.
Subd. 2. [AUDIT AND ENFORCEMENT.] The tax imposed by this
section is subject to the audit, assessment, and collection
provisions applicable to the taxes imposed under chapter 297C.
The commissioner may require a distributor to receive and
maintain copies of floor stock tax returns filed by all persons
requesting a credit for returned cigarettes.
Subd. 3. [DEPOSIT OF PROCEEDS.] The revenue from the tax
imposed under this section shall be deposited by the
commissioner in the state treasury and credited to the health
care access fund.
Sec. 17. [TEMPORARY DEPOSIT OF CIGARETTE TAX REVENUES.]
Notwithstanding the provisions of Minnesota Statutes,
section 297.13, the revenue provided by 2.5 mills of the tax on
cigarettes weighing not more than three pounds a thousand and
five mills of the tax on cigarettes weighing more than three
pounds a thousand must be credited to the health care access
fund in the state treasury. This section applies only to
revenue collected for sales after June 30, 1992, and before
January 1, 1994. Revenue includes revenue from the tax,
interest, and penalties collected under the provisions of
Minnesota Statutes, sections 297.01 to 297.13.
This section expires June 30, 1994.
Sec. 18. [TRANSITION PROVISION; HOSPITAL TAX.]
For gross revenues taxable under section 7, subdivision 1,
for calendar year 1993, the exclusions under section 8,
subdivision 1, clauses (5) and (6) do not apply.
Sec. 19. [PASSTHROUGH.]
Subdivision 1. [AUTHORITY.] A hospital that is subject to
a tax under section 7 may transfer additional expense generated
by section 7 obligations on to all third-party contracts for the
purchase of health care services on behalf of a patient or
consumer. The expense must not exceed two percent of the gross
revenues received under the third-party contract, including
copayments and deductibles paid by the individual patient or
consumer. The expense must not be generated on revenues derived
from payments that are excluded from the tax under section 8.
All third-party purchasers of health care services including,
but not limited to, third-party purchasers regulated under
chapters 60A, 62A, 62C, 62D, 64B, or 62H, must pay the
transferred expense in addition to any payments due under
existing or future contracts with the hospital or health care
provider, to the extent allowed under federal law. Nothing in
this subdivision limits the ability of a hospital to recover all
or part of the section 7 obligation by other methods, including
increasing fees or charges.
Subd. 2. [EXPIRATION.] This section expires January 1,
1994.
Sec. 20. [STUDY.]
The commissioner of revenue, in consultation with the
commissioner of health and the board of pharmacy, shall report
to the legislature by November 1, 1992, on the expected impact
of the wholesale drug distributor tax and the health care
provider tax on pharmacies and pharmacists. If the commissioner
determines that these taxes are not effective or equitable as
applied to pharmacies and pharmacists, the commissioner shall
recommend alternative methods of taxing prescription drugs.
Sec. 21. [FEDERAL WAIVER; HEALTH CARE RELATED TAX.]
The legislature finds that taxes imposed by this article
are not subject to or in violation of the restrictions contained
in the Social Security Act or other federal law. The tax is
imposed solely to fund a state program and is not used to pay
the state share of medical assistance. Nevertheless to avoid
any ambiguity, the commissioner of human services shall apply to
the secretary of the United States Department of Health and
Human Services for a waiver to treat the tax imposed under
section 7 as a broad-based health care related tax under section
1903 of the Social Security Act, 42 United States Code section
1396b.
Sec. 22. [EFFECTIVE DATE.]
Sections 1 and 16 to 21 are effective the day following
final enactment. Section 4 is effective for taxable years
beginning after December 31, 1992. Section 7, subdivision 1, is
effective for gross revenues generated by services performed and
goods sold after December 31, 1992. Section 7, subdivisions 2
to 4, are effective for gross revenues generated by services
performed and goods sold after December 31, 1993. Sections 14
and 15 are effective July 1, 1992.
ARTICLE 10
APPROPRIATIONS
Section 1. APPROPRIATIONS
Subdivision 1. The amounts specified
in this section are appropriated from
the health care access fund to the
agencies and for the purposes
indicated, to be available until June
30, 1993.
Subd. 2. Commissioner of Commerce 809,000
Subd. 3. Commissioner of Health 3,005,000
Subd. 4. Commissioner of Human
Services 13,371,000
$20,000 of this appropriation is for a
grant to the coalition responsible for
establishing the demonstration project
for low-income uninsured persons under
Minnesota Statutes, section 256B.73, to
provide consulting and marketing
services related to the implementation
of the health right program.
Subd. 5. Higher Education
Coordinating Board 189,000
This appropriation may be used as the
required state match for any grants
received by the University of Minnesota
medical school.
Subd. 6. Commissioner of Employee
Relations 1,679,000
Subd. 7. Board of Regents of the
University of Minnesota 2,200,000
Subd. 8. Commissioner of Revenue 917,000
Subd. 9. Legislature 125,000
This appropriation is for the
legislative coordinating commission, to
be divided between the senate and the
house based on the recommendations of
the legislative commission on health
care access, for the purpose of adding
staff in existing departments who will
be assigned to the legislative
commission.
Subd. 10. Commissioner of Administration 27,000
Sec. 2. [TRANSFER.]
The commissioner of finance shall transfer $4,368,000 from
the health care access fund to the general fund for fiscal year
1993. For purposes of preparing the biennial budget
recommendations, the commissioner shall assume a transfer of
$4,605,000 for fiscal year 1994 and $5,467,000 for fiscal year
1995.
Sec. 3. [EFFECTIVE DATE.]
The appropriations in section 1 are effective July 1, 1992,
except that $616,000 of the appropriation in section 1,
subdivision 4, is available for fiscal year 1992.
Presented to the governor April 17, 1992
Signed by the governor April 23, 1992, 9:40 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes