Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1993, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1993
CHAPTER 345-H.F.No. 1178
An act relating to health; implementing
recommendations of the Minnesota health care
commission; defining and regulating integrated service
networks; requiring regulation of health care services
not provided through integrated service networks;
establishing data reporting and collection
requirements; establishing other cost containment
measures; providing for classification of certain tax
data; requiring certain studies; appropriating money;
amending Minnesota Statutes 1992, sections 3.732,
subdivision 1; 43A.17, by adding a subdivision;
43A.317, subdivision 5; 60K.14, by adding a
subdivision; 62A.021, subdivision 1; 62A.65; 62C.16,
by adding a subdivision; 62D.042, subdivision 2;
62D.12, by adding a subdivision; 62E.11, subdivision
12; 62J.03, subdivisions 6, 8, and by adding a
subdivision; 62J.04, subdivisions 1, 2, 3, 4, 5, 7,
and by adding subdivisions; 62J.05, by adding a
subdivision; 62J.09, subdivisions 2, 5, 8, and by
adding subdivisions; 62J.15, subdivision 1, and by
adding a subdivision; 62J.17, subdivision 2, and by
adding subdivisions; 62J.23, by adding a subdivision;
62J.30, subdivisions 1, 6, 7, and 8; 62J.32,
subdivision 4; 62J.33; 62J.34, subdivision 2; 62L.02,
subdivisions 19, 26, and 27; 62L.03, subdivisions 3
and 4; 62L.04, subdivision 1; 62L.05, subdivisions 2,
3, 4, and 6; 62L.08, subdivisions 4 and 8; 62L.09,
subdivision 1; 62L.11, subdivision 1; 124C.62;
136A.1355, subdivisions 1, 3, 4, and by adding a
subdivision; 136A.1356, subdivisions 2 and 5;
136A.1357; 137.38, subdivisions 2, 3, and 4; 137.39,
subdivisions 2 and 3; 137.40, subdivision 3; 144.147,
subdivision 4; 144.1484, subdivisions 1 and 2;
144.335, by adding a subdivision; 151.21; 151.47,
subdivision 1; 214.16, subdivision 3; 256.9351,
subdivision 3; 256.9352, subdivision 3; 256.9353;
256.9354, subdivisions 1, 4, and by adding a
subdivision; 256.9356; 256.9357, subdivision 1;
256.9657, subdivision 3; 256B.057, subdivisions 1, 2a,
and by adding a subdivision; 256B.0625, subdivision
13; 256B.0644; 256D.03, subdivision 3; 270B.01,
subdivision 8; 295.50, subdivisions 3, 4, 7, 14, and
by adding subdivisions; 295.51, subdivision 1; 295.52,
by adding subdivisions; 295.53, subdivisions 1, 2, 3,
and by adding a subdivision; 295.54; 295.55,
subdivision 4; 295.57; 295.58; and 295.59; Laws 1992,
chapter 549, article 7, section 9, and article 9,
section 19; proposing coding for new law in Minnesota
Statutes, chapters 62A; 62J; 136A; 144; 151; 256; and
295; proposing coding for new law as Minnesota
Statutes, chapters 62N; and 62P; repealing Minnesota
Statutes 1992, sections 62J.15, subdivision 2; 62J.17,
subdivisions 4, 5, and 6; 62J.29; 62L.09, subdivision
2; 295.50, subdivisions 5 and 10; and 295.51,
subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
INTEGRATED SERVICE NETWORKS
Section 1. Minnesota Statutes 1992, section 62J.04, is
amended by adding a subdivision to read:
Subd. 8. [IMPLEMENTATION PLAN.] (a) The commissioner, in
consultation with the commission, shall develop and submit to
the legislature and the governor by January 15, 1994, a detailed
implementation plan, including proposed rules and legislation,
to implement the cost containment plan recommended by the
commission as described in the summary report of the commission
issued on January 25, 1993, as further modified by this act.
The goal of the implementation plan must be to allow integrated
service networks to form beginning July 1, 1994, and to begin a
phased-in implementation of an all-payer system over a two-year
period beginning July 1, 1994.
(b) To ensure a wide range of choices for purchasers,
consumers, and providers, the rules and legislation must
encourage and facilitate the formation of locally controlled
integrated service networks, in addition to networks sponsored
by statewide health plan companies.
(c) Financial solvency, net worth, and reserve requirements
for integrated service networks must facilitate the formation of
new networks, including networks sponsored by providers,
employers, community organizations, local governments, and other
locally based organizations, while protecting enrollees from
undue risk of financial insolvency. The rules and legislation
shall authorize alternative financial solvency, net worth, and
reserve requirements for networks sponsored by providers that
are based on the operational capacity, facilities, personnel,
and financial capability to provide the services that it has
contracted to provide to enrollees during the term of the
contract provided the requirements are based on sound actuarial,
financial, and accounting principles. The criteria for allowing
integrated service networks and participating providers and
health care providing entities to satisfy financial requirements
through alternative means may authorize consideration of:
(1) the level of services to be provided by a provider
relative to its existing service capacity;
(2) the provider's debt rating;
(3) certification by an independent consulting actuary;
(4) the availability of allocated or restricted funds;
(5) net worth;
(6) the availability of letters of credit;
(7) the taxing authority of the entity or governmental
sponsor;
(8) net revenues;
(9) accounts receivable;
(10) the number of providers under contract;
(11) indebtedness; and
(12) other factors the commissioner may reasonably
establish to measure the ability of the provider or health care
providing entity to provide the level of services.
(d) The implementation plan may include a requirement that
an integrated service network may not contract for management
services with a separate entity unless:
(1) the contract complies with section 62D.19; and
(2) if the management contract exceeds five percent of
gross revenues of the integrated service network, provisions
requiring holdbacks or other risk related provisions must be no
more favorable to the separate entity under the management
contract than comparable terms contained in any contract between
the integrated service network and any health care providing
entity or provider.
(e) The implementation plan must include technical
assistance and financial assistance to promote the creation of
locally controlled networks to serve rural areas and special
populations. The commissioner and the commission shall consider
including in the implementation plan the establishment of a
management cooperative that will provide planning, organization,
administration, billing, legal, and support services to
integrated service networks that are members of the cooperative.
(f) The implementation plan must address problems of
provider recruitment and retention in rural areas. Rules and
legislation must be designed to improve the ability of rural
communities to maintain an effective local delivery system.
(g) The implementation plan must include a method to create
an option for health care providers and health care plans who
meet or fall below the limits set by the commissioner under
section 62J.04 to obtain a waiver from the applicability of the
all-payer rules.
(h) In developing the implementation plan, the commissioner
and the commission shall consider medical malpractice liability
in terms of an entity operating an integrated service network
and possible medical malpractice committed by its employees and
make recommendations on any statutory changes that may be
necessary. The commissioner may also consider whether a network
and its participating entities should be allowed to reallocate
between themselves the risk of malpractice liability.
(i) The implementation plan must identify the entities to
whom an integrated service network may provide health care
services, and persons or methods through whom or which an
integrated service network may offer or sell its services.
(j) The implementation plan may consider the obligations
that an integrated service network should have to the
comprehensive health association established under section
62E.10. If obligations are to be required of an integrated
service network, the implementation plan may provide for a
phase-in of the assessments under section 62E.11. The
implementation plan should clearly specify the rights and duties
of integrated service networks with respect to the comprehensive
health association.
(k) In developing the implementation plan, the commissioner
and the commission shall consider how enrollees should be
protected in the event of the insolvency of a network, how
prospective enrollees should be informed of the consequences to
enrollees of an insolvency, and the form of the hold harmless
clause that must be contained in every network enrollee contract.
(l) In developing the implementation plan, the commissioner
and the commission shall consider the liquidation,
rehabilitation, and conservation procedures that would be
appropriate for networks.
(m) The rules and legislation must include provisions
authorizing integrated service networks to bear the risk of
providing coverage either by retaining the risk or by
transferring all or part of the risk by purchasing reinsurance
or other appropriate methods.
(n) The implementation plan must recommend the solvency
requirements appropriate for a network, including net worth and
deposit requirements, any reduced or phased-in net worth or
deposit requirements that might be appropriate for new networks,
government-sponsored networks, networks that use accredited
capitated providers, or that have other particular features that
provide a rationale for adjusting the solvency requirements.
(o) The commissioner shall determine the possible
relationships between providers and integrated service networks,
including requirements for the contractual relationships that
may be required in order to ensure flexible arrangements between
integrated service networks and providers.
Sec. 2. [62N.01] [CITATION AND PURPOSE.]
Subdivision 1. [CITATION.] Sections 62N.01 to 62N.24 may
be cited as the "Minnesota integrated service network act."
Subd. 2. [PURPOSE.] Sections 62N.01 to 62N.24 allow the
creation of integrated service networks that will be responsible
for arranging for or delivering a full array of health care
services, from routine primary and preventive care through acute
inpatient hospital care, to a defined population for a fixed
price from a purchaser.
Each integrated service network is accountable to keep its
total revenues within the limit of growth set by the
commissioner of health under section 62N.05, subdivision 2,
clause (1). Integrated service networks can be formed by health
care providers, health maintenance organizations, insurance
companies, employers, or other organizations. Competition
between integrated service networks on the quality and price of
health care services is encouraged.
Sec. 3. [62N.02] [DEFINITIONS.]
Subdivision 1. [APPLICATION.] The definitions in this
section apply to sections 62J.04, subdivision 8, and 62N.01 to
62N.24.
Subd. 2. [ACCREDITED CAPITATED PROVIDER.] "Accredited
capitated provider" means a financially responsible health care
providing entity paid by a network on a capitated basis.
Subd. 3. [COMMISSION.] "Commission" means the health care
commission established under section 62J.05.
Subd. 4. [COMMISSIONER.] "Commissioner" means the
commissioner of health or the commissioner's designated
representative.
Subd. 5. [ENROLLEE.] "Enrollee" means an individual,
including a member of a group, to whom a network is obligated to
provide health services under this chapter.
Subd. 6. [HEALTH CARE PROVIDING ENTITY.] "Health care
providing entity" means a participating entity that provides
health care to enrollees through an integrated service network.
Subd. 6a. [HEALTH CARRIER.] "Health carrier" has the
meaning given in section 62A.011.
Subd. 7. [HEALTH PLAN.] "Health plan" means a health plan
as defined in section 62A.011 or coverage by an integrated
service network.
Subd. 8. [INTEGRATED SERVICE NETWORK.] "Integrated service
network" means a formal arrangement permitted by this chapter
and licensed by the commissioner for providing health services
under this chapter to enrollees for a fixed payment per time
period.
Subd. 9. [NETWORK.] "Network" means an integrated service
network as defined in this section.
Subd. 10. [PARTICIPATING ENTITY.] "Participating entity"
means a health care providing entity, a risk-bearing entity, or
an entity providing other services through an integrated service
network.
Subd. 11. [PRICE.] "Price" means the actual amount of
money paid, after discounts or other adjustments, by the person
or organization paying money to buy health care coverage and
health care services. "Price" does not mean the cost or costs
incurred by a network or other entity to provide health care
services to individuals.
Subd. 12. [RISK-BEARING ENTITY.] "Risk-bearing entity"
means an entity that participates in an integrated service
network so as to bear all or part of the risk of loss.
"Risk-bearing entity" includes an entity that provides
reinsurance, stop-loss, excess-of-loss, and similar coverage.
Sec. 4. [62N.03] [APPLICABILITY OF OTHER LAW.]
Chapters 60A, 60B, 60G, 61A, 61B, 62A, 62C, 62D, 62E, 62H,
62L, 62M, and 64B do not, except as expressly provided in this
chapter or in those other chapters, apply to integrated service
networks, or to entities otherwise subject to those chapters,
with respect to participation by those entities in integrated
service networks. Chapters 72A and 72C apply to integrated
service networks, except as otherwise expressly provided in this
chapter.
Integrated service networks are in "the business of
insurance" for purposes of the federal McCarren-Ferguson Act,
United States Code, title 15, section 1012, are "domestic
insurance companies" for purposes of the federal Bankruptcy
Reform Act of 1978, United States Code, title 11, section 109,
and are "insurance" for purposes of the federal Employee
Retirement Income Security Act, United States Code, title 29,
section 1144.
Sec. 5. [62N.04] [REGULATION.]
Integrated service networks are under the supervision of
the commissioner, who shall enforce this chapter. The
commissioner has, with respect to this chapter, all enforcement
and rulemaking powers available to the commissioner under
section 62D.17.
Sec. 6. [62N.05] [RULES GOVERNING INTEGRATED SERVICE
NETWORKS.]
Subdivision 1. [RULES.] The commissioner, in consultation
with the commission, may adopt emergency and permanent rules to
establish more detailed requirements governing integrated
service networks in accordance with this chapter.
Subd. 2. [REQUIREMENTS.] The commissioner shall include in
the rules requirements that will ensure that the annual rate of
growth of an integrated service network's aggregate total
revenues received from purchasers and enrollees, after
adjustments for changes in population size and risk, does not
exceed the growth limit established in section 62J.04. A
network's aggregate total revenues for purposes of these growth
limits are net of the contributions, surcharges, taxes, and
assessments listed in section 62P.04, subdivision 2, that the
network pays. The commissioner may include in the rules the
following:
(1) requirements for licensure, including a fee for initial
application and an annual fee for renewal;
(2) quality standards;
(3) requirements for availability and comprehensiveness of
services;
(4) requirements regarding the defined population to be
served by an integrated service network;
(5) requirements for open enrollment;
(6) provisions for incentives for networks to accept as
enrollees individuals who have high risks for needing health
care services and individuals and groups with special needs;
(7) prohibitions against disenrolling individuals or groups
with high risks or special needs;
(8) requirements that an integrated service network provide
to its enrollees information on coverage, including any
limitations on coverage, deductibles and copayments, optional
services available and the price or prices of those services,
any restrictions on emergency services and services provided
outside of the network's service area, any responsibilities
enrollees have, and describing how an enrollee can use the
network's enrollee complaint resolution system;
(9) requirements for financial solvency and stability;
(10) a deposit requirement;
(11) financial reporting and examination requirements;
(12) limits on copayments and deductibles;
(13) mechanisms to prevent and remedy unfair competition;
(14) provisions to reduce or eliminate undesirable barriers
to the formation of new integrated service networks;
(15) requirements for maintenance and reporting of
information on costs, prices, revenues, volume of services, and
outcomes and quality of services;
(16) a provision allowing an integrated service network to
set credentialing standards for practitioners employed by or
under contract with the network;
(17) a requirement that an integrated service network
employ or contract with practitioners and other health care
providers, and minimum requirements for those contracts if the
commissioner deems requirements to be necessary to ensure that
each network will be able to control expenditures and revenues
or to protect enrollees and potential enrollees;
(18) provisions regarding liability for medical
malpractice;
(19) provisions regarding permissible and impermissible
underwriting criteria applicable to the standard set of
benefits;
(20) a method or methods to facilitate and encourage
appropriate provision of services by midlevel practitioners and
pharmacists;
(21) a method or methods to assure that all integrated
service networks are subject to the same regulatory
requirements. All health carriers, including health maintenance
organizations, insurers, and nonprofit health service plan
corporations shall be regulated under the same rules, to the
extent that the health carrier is operating an integrated
service network or is a participating entity in an integrated
service network;
(22) provisions for appropriate risk adjusters or other
methods to prevent or compensate for adverse selection of
enrollees into or out of an integrated service network; and
(23) rules prescribing standard measures and methods by
which integrated service networks shall determine and disclose
their prices, copayments, deductibles, out-of-pocket limits,
enrollee satisfaction levels, and anticipated loss ratios.
Subd. 3. [CRITERIA FOR RULEMAKING.] (a)
[APPLICABILITY.] The commissioner shall adopt rules governing
integrated service networks based on the criteria and objectives
specified in this subdivision.
(b) [COMPETITION.] The rules must encourage and facilitate
competition through the collection and distribution of reliable
information on the cost, prices, and quality of each integrated
service network in a manner that allows comparisons between
networks.
(c) [FLEXIBILITY.] The rules must allow significant
flexibility in the structure and organization of integrated
service networks. The rules must allow and facilitate the
formation of networks by providers, employers, and other
organizations, in addition to health carriers.
(d) [EXPANDING ACCESS AND COVERAGE.] The rules must be
designed to expand access to health care services and coverage
for all Minnesotans, including individuals and groups who have
preexisting health conditions, who represent a higher risk of
requiring treatment, who require translation or other special
services to facilitate treatment, who face social or cultural
barriers to obtaining health care, or who for other reasons face
barriers to access to health care and coverage. Enrollment
standards must ensure that high risk and special needs
populations will be included and growth limits and payment
systems must be designed to provide incentives for networks to
enroll even the most challenging and costly groups and
populations. The rules must be consistent with the principles
of health insurance reform that are reflected in Laws 1992,
chapter 549.
(e) [ABILITY TO BEAR FINANCIAL RISK.] The rules must allow
a variety of options for integrated service networks to
demonstrate their ability to bear the financial risk of serving
their enrollees, to facilitate diversity and innovation and the
entry into the market of new networks. The rules must allow the
phasing in of reserve requirements and other requirements
relating to financial solvency.
(f) [PARTICIPATION OF PROVIDERS.] The rules must not
require providers to participate in an integrated service
network and must allow providers to participate in more than one
network and to serve both patients who are covered by an
integrated service network and patients who are not. The rules
must allow significant flexibility for an integrated service
network and providers to define and negotiate the terms and
conditions of provider participation. The rules must encourage
and facilitate the participation of midlevel practitioners,
allied health care practitioners, and pharmacists, and eliminate
inappropriate barriers to their participation. The rules must
encourage and facilitate the participation of disproportionate
share providers in integrated service networks and eliminate
inappropriate barriers to this participation.
(g) [RURAL COMMUNITIES.] The rules must permit a variety of
forms of integrated service networks to be developed in rural
areas in response to the needs, preferences, and conditions of
rural communities, utilizing to the greatest extent possible
current existing health care providers and hospitals.
(h) [LIMITS ON GROWTH.] The rules must include provisions
to enable the commissioner to enforce the limits on growth in
health care total revenues for each integrated service network
and for the entire system of integrated service networks.
(i) [STANDARD BENEFIT SET.] The commission shall make
recommendations to the commissioner regarding a standard benefit
set.
(j) [CONFLICT OF INTEREST.] The rules shall include
provisions the commissioner deems necessary and appropriate to
address integrated service networks' and participating
providers' relationship to section 62J.23 or other laws relating
to provider conflicts of interest.
Sec. 7. [62N.06] [AUTHORIZED ENTITIES.]
Subdivision 1. [AUTHORIZED ENTITIES.] (a) An integrated
service network may be organized as a separate nonprofit
corporation under chapter 317A or as a cooperative under chapter
308A.
(b) A nonprofit health carrier, as defined in section
62A.011, may establish and operate one or more integrated
service networks without forming a separate corporation or
cooperative, but only if all of the following conditions are met:
(i) a contract between the health carrier and a health care
provider, for a term of less than seven years, that was executed
before June 1, 1993, does not bind the health carrier or
provider as applied to integrated service network services,
except with the mutual consent of the health carrier and
provider entered into on or after June 1, 1993. This clause
does not apply to contracts between a health carrier and its
salaried employees;
(ii) the health carrier shall not apply toward the net
worth, working capital, or deposit requirements of this chapter
any assets used to satisfy net worth, working capital, deposit,
or other financial requirements under any other chapter of
Minnesota law;
(iii) the health carrier shall not include in its premiums
for health coverage provided under any other chapter of
Minnesota law, an assessment or surcharge relating to net worth,
working capital, or deposit requirements imposed upon the
integrated service network under this chapter; and
(iv) the health carrier shall not include in its premiums
for integrated service network coverage under this chapter an
assessment or surcharge relating to net worth working capital or
deposit requirements imposed upon health coverage offered under
any other chapter of Minnesota law.
Subd. 2. [SEPARATE ACCOUNTING REQUIRED.] Any entity
operating one or more integrated service networks shall maintain
separate accounting and record keeping procedures, acceptable to
the commissioner, for each integrated service network.
Subd. 3. [GOVERNMENTAL SUBDIVISION.] A political
subdivision may establish and operate an integrated service
network directly, without forming a separate entity. Unless
otherwise specified, a network authorized under this subdivision
must comply with all other provisions governing networks.
Sec. 8. [62N.065] [ADMINISTRATIVE COST CONTAINMENT.]
Subdivision 1. [UNREASONABLE EXPENSES.] No integrated
service network shall incur or pay for any expense of any nature
which is unreasonably high in relation to the value of the
service or goods provided. The commissioner shall implement and
enforce this section by rules adopted under this section.
In an effort to achieve the stated purposes of sections
62N.01 to 62N.22; in order to safeguard the underlying nonprofit
status of integrated service networks; and to ensure that
payment of integrated service network money to any person or
organization results in a corresponding benefit to the
integrated service network and its enrollees; when determining
whether an integrated service network has incurred an
unreasonable expense in relation to payments made to a person or
organization, due consideration shall be given to, in addition
to any other appropriate factors, whether the officers and
trustees of the integrated service network have acted with good
faith and in the best interests of the integrated service
network in entering into, and performing under, a contract under
which the integrated service network has incurred an expense.
In addition to the compliance powers under subdivision 3, the
commissioner has standing to sue, on behalf of an integrated
service network, officers or trustees of the integrated service
network who have breached their fiduciary duty in entering into
and performing such contracts.
Subd. 2. [DATA ON CONTRACTS.] Integrated service networks
shall keep on file in the offices of the integrated service
network copies of all contracts regulated under subdivision 1,
and data on the payments, salaries, and other remuneration paid
to for-profit firms, affiliates, or to persons for
administrative expenses, service contracts, and management of
the integrated service network, and shall make these records
available to the commissioner upon request.
Subd. 3. [COMPLIANCE AUTHORITY.] The commissioner may
review any contract, arrangement, or agreement to determine
whether it complies with the provisions contained in subdivision
1. The commissioner may suspend any provision that does not
comply with subdivision 1 and may require the integrated service
network to replace those provisions with provisions that do
comply.
Sec. 9. [62N.07] [PURPOSE.]
The legislature finds that previous cost containment
efforts have focused on reducing benefits and services,
eliminating access to certain provider groups, and otherwise
reducing the level of care available. Under a system of overall
spending controls, these cost containment approaches will, in
the absence of controls on cost shifting, shift costs from the
payer to the consumer, to government programs, and to providers
in the form of uncompensated care. The legislature further
finds that the integrated service network benefit package should
be designed to promote coordinated, cost-effective delivery of
all health services an enrollee needs without cost shifting.
The legislature further finds that affordability of health
coverage is a high priority and that lower cost coverage options
should be made available through the use of copayments,
coinsurance, and deductibles to reduce premium costs rather than
through the exclusion of services or providers.
Sec. 10. [62N.075] [COVERED SERVICES.]
(a) An integrated service network must provide to each
person enrolled a set of appropriate and necessary health
services. For purposes of this chapter, "appropriate and
necessary" means services needed to maintain the enrollee in
good health including as a minimum, but not limited to,
emergency care, inpatient hospital and physician care,
outpatient health services, preventive health services. The
commissioner may modify this definition to reflect changes in
community standards, development of practice parameters, new
technology assessments, and other medical innovations. These
services must be delivered by authorized practitioners acting
within their scope of practice. An integrated service network
is not responsible for health services that are not appropriate
and necessary.
(b) A network may define benefit levels through the use of
consumer cost sharing but remains financially accountable for
the cost of the set of required health services.
(c) A network may offer any Medicare supplement, Medicare
select, or other Medicare-related product otherwise permitted
for any type of health carrier in this state. Each
Medicare-related product may be offered only in full compliance
with the requirements in chapters 62A, 62D, and 62E that apply
to that category of product.
(d) Networks must comply with all continuation and
conversion of coverage requirements applicable to health
maintenance organizations under state or federal law.
(e) Networks must comply with sections 62A.047, 62A.27, and
any other coverage of newborn infants, dependent children who do
not reside with a covered person, handicapped children and
dependents, and adopted children. A network providing dependent
coverage must comply with section 62A.302.
(f) Networks must comply with the equal access requirements
of section 62A.15, subdivision 2.
Sec. 11. [62N.08] [AVAILABILITY OF SERVICES.]
(a) An integrated service network is financially
responsible to provide to each person enrolled all appropriate
and necessary health services required by statute, by the
contract of coverage, or otherwise required under sections
62N.075 to 62N.085.
(b) The commissioner shall require that networks provide
all appropriate and necessary health services within a
reasonable geographic distance for enrollees. The commissioner
may adopt rules providing a more detailed requirement,
consistent with this paragraph.
Sec. 12. [62N.085] [ESTABLISHMENT OF STANDARDIZED BENEFIT
PLANS.]
(a) The commissioner of health shall adopt permanent rules
and may adopt emergency rules to establish not more than five
standardized benefit plans which must be offered by integrated
service networks. The plans must comply with the requirements
of sections 62N.07 to 62N.08 and the other requirements of this
chapter. The plans must vary only on the basis of enrollee cost
sharing and encompass a range of cost sharing options from (1)
lower premium costs combined with higher enrollee cost sharing,
to (2) higher premium costs combined with lower enrollee cost
sharing.
(b) The purposes of this section, "consumer cost sharing"
or "cost sharing" means copayments, deductibles, coinsurance,
and other out-of-pocket expenses paid by the individual consumer
of health care services.
(c) The commissioner shall consider whether the following
principles should apply to cost sharing in an integrated service
network:
(1) consumers must have a wide choice of cost sharing
arrangement;
(2) consumer cost sharing must be administratively feasible
and consistent with efforts to reduce the overall administrative
burden of the health care system;
(3) cost sharing must be based on income and an enrollee's
ability to pay for services and should not create a barrier to
access to appropriate and effective services;
(4) cost sharing must be capped at a predetermined annual
limit to protect individuals and families from financial
catastrophe and to protect individuals with substantial health
care needs;
(5) child health supervision services, immunizations,
prenatal care, and other prevention services must not be
subjected to cost sharing;
(6) additional requirements for networks should be
established to assist enrollees for whom an inducement in
addition to the elimination of cost sharing is necessary in
order to encourage them to use cost-effective preventive
services. These requirements may include the provision of
educational information, assistance or guidance, and
opportunities for responsible decision making by enrollees that
minimize potential out-of-pocket costs;
(7) cost-sharing requirements and benefit or service
limitations for outpatient mental health and outpatient chemical
dependency services, except for persons placed in chemical
dependency services under Minnesota Rules, parts 9530.6600 to
9530.6660, must not place a greater financial burden on the
insured or enrollee, or be more restrictive than those
requirements and limitations for outpatient medical services;
and
(8) cost-sharing requirements and benefit or service
limitations for inpatient hospital mental health and inpatient
hospital and residential chemical dependency services, except
for persons placed in chemical dependency services under
Minnesota Rules, parts 9530.6600 to 9530.6660, must not place a
greater financial burden on the insured or enrollee, or be more
restrictive than those requirements and limitations for
inpatient hospital medical services.
Sec. 13. [62N.10] [LICENSING.]
Subdivision 1. [REQUIREMENTS.] All integrated service
networks must be licensed by the commissioner. Licensure
requirements are:
(1) the ability to be responsible for the full continuum of
required health care and related costs for the defined
population that the integrated service network will serve;
(2) the ability to satisfy standards for quality of care;
(3) financial solvency; and
(4) the ability to fully comply with this chapter and all
other applicable law.
The commissioner may adopt rules to specify licensure
requirements for integrated service networks in greater detail,
consistent with this subdivision.
Subd. 2. [FEES.] Licensees shall pay an initial fee and a
renewal fee each following year to be established by the
commissioner of health.
Subd. 3. [LOSS OF LICENSE.] The commissioner may fine a
licensee or suspend or revoke a license for violations of rules
or statutes pertaining to integrated service networks.
Subd. 4. [PARTICIPATION; GOVERNMENT PROGRAMS.] Integrated
service networks shall, as a condition of licensure, participate
in the medical assistance, general assistance medical care, and
MinnesotaCare programs. The commissioner shall adopt rules
specifying the participation required of the networks. The
rules must be consistent with Minnesota Rules, parts 9505.5200
to 9505.5260, governing participation by health maintenance
organizations in public health care programs.
Subd. 5. [APPLICATION.] Each application for an integrated
service network license must be in a form prescribed by the
commissioner.
Subd. 6. [DOCUMENTS ON FILE.] A network shall agree to
retain in its files any documents specified by the
commissioner. A network shall permit the commissioner to
examine those documents at any time and shall promptly provide
copies of any of them to the commissioner upon request.
Sec. 14. [62N.11] [EVIDENCE OF COVERAGE.]
Subdivision 1. [APPLICABILITY.] Every integrated service
network enrollee residing in this state is entitled to evidence
of coverage or contract. The integrated service network or its
designated representative shall issue the evidence of coverage
or contract. The commissioner shall adopt rules specifying the
requirements for contracts and evidence of coverage. "Evidence
of coverage" means evidence that an enrollee is covered by a
group contract issued to the group.
Subd. 2. [FILING.] No evidence of coverage or contract or
amendment of coverage or contract shall be issued or delivered
to any individual in this state until a copy of the form of the
evidence of coverage or contract or amendment of coverage or
contract has been filed with and approved by the commissioner.
Sec. 15. [62N.12] [ENROLLEE RIGHTS.]
The cover page of the evidence of coverage and contract
must contain a clear and complete statement of an enrollee's
rights as a consumer. The commissioner shall adopt rules
specifying enrollee rights and required disclosures to enrollees.
Sec. 16. [62N.13] [ENROLLEE COMPLAINT SYSTEM.]
Every integrated service network must establish and
maintain an enrollee complaint system, including an impartial
arbitration provision, to provide reasonable procedures for the
resolution of written complaints initiated by enrollees
concerning the provision of health care services. The
commissioner shall adopt rules specifying requirements relating
to enrollee complaints.
Sec. 17. [62N.16] [UNDERWRITING AND RATING.]
Subdivision 1. [APPLICABILITY.] Except as provided in
subdivision 3, this section applies to the standard benefit
plans under section 62N.085 and does not apply to additional
benefits. This section does not require coverage by an
integrated service network of any group or individual residing
outside of the network's service area. A network's service area
is a geographic service region agreed to by the commissioner and
the network at the time of licensure. This section does not
apply to any group that the commissioner determines is organized
or functions primarily to provide coverage to one or more high
risk individuals. The commissioner may adopt rules specifying
other types of groups to which this section does not apply.
Subd. 2. [GROUP MEMBERS.] Integrated service networks
shall charge the same rate for each individual in a group,
except as appropriate to provide dependent or family coverage.
Rates for managed care plans as described in section 256.9363
shall be determined through contract between the department of
human services and the integrated service network.
Subd. 3. [SMALL EMPLOYERS.] To provide services to
employees of a small employer as defined in section 62L.02,
integrated service networks shall comply with chapter 62L.
Sec. 18. [62N.22] [DISCLOSURE OF COMMISSIONS.]
Before selling, or offering to sell, any coverage or
enrollment in an integrated service network, a person selling
the coverage or enrollment shall disclose to the prospective
purchaser the amount of any commission or other compensation the
person will receive as a direct result of the sale. The
disclosure may be expressed in dollars or as a percentage of the
premium. The amount disclosed need not include any anticipated
renewal commissions.
Sec. 19. [62N.23] [TECHNICAL ASSISTANCE; LOANS.]
(a) The commissioner shall provide technical assistance to
parties interested in establishing or operating an integrated
service network. This shall be known as the integrated service
network technical assistance program (ISNTAP).
The technical assistance program shall offer seminars on
the establishment and operation of integrated service networks
in all regions of Minnesota. The commissioner shall advertise
these seminars in local and regional newspapers, and attendance
at these seminars shall be free.
The commissioner shall write a guide to establishing and
operating an integrated service network. The guide must provide
basic instructions for parties wishing to establish an
integrated service network. The guide must be provided free of
charge to interested parties. The commissioner shall update
this guide when appropriate.
The commissioner shall establish a toll-free telephone line
that interested parties may call to obtain assistance in
establishing or operating an integrated service network.
(b) The commissioner, in consultation with the commission,
shall provide recommendations for the creation of a loan program
that would provide loans or grants to entities forming
integrated service networks or to networks less than one year
old. The commissioner shall propose criteria for the loan
program.
Sec. 20. [62N.24] [REVIEW OF RULES.]
The commissioner of health shall mail copies of all
proposed emergency and permanent rules that are being
promulgated under this chapter to each member of the legislative
commission on health care access prior to final adoption by the
commissioner.
Sec. 21. Minnesota Statutes 1992, section 256.9657,
subdivision 3, is amended to read:
Subd. 3. [HEALTH MAINTENANCE ORGANIZATION; INTEGRATED
SERVICE NETWORK SURCHARGE.] Effective October 1, 1992, each
health maintenance organization with a certificate of authority
issued by the commissioner of health under chapter 62D and each
integrated service network licensed by the commissioner under
sections 62N.01 to 62N.22 shall pay to the commissioner of human
services a surcharge equal to six-tenths of one percent of the
total premium revenues of the health maintenance organization or
integrated service network as reported to the commissioner of
health according to the schedule in subdivision 4.
Sec. 22. [BORDER COMMUNITIES.]
The commissioner of health shall monitor the effects of
integrated service networks and the regulated all-payer system
in communities in which a substantial proportion of health care
services provided to Minnesota residents are provided in states
bordering Minnesota and may amend the rules adopted under this
article or article 2 to minimize effects that inhibit Minnesota
residents' ability to obtain access to quality health care. The
commissioner shall report to the Minnesota health care
commission and the legislature any effects that the commissioner
intends to address by amendments to the rules adopted under this
article or article 2.
Sec. 23. [STUDY OF REQUIREMENTS FOR HEALTH CARRIERS
FORMING INTEGRATED SERVICE NETWORKS.]
The Minnesota health care commission shall study the
desirability and appropriateness of the provisions in Minnesota
Statutes, section 62N.06, subdivision 1, which prohibit health
carriers from establishing and operating integrated service
networks other than through a separate entity except under
specified conditions. The commission shall report its findings,
conclusions, and recommendations to the commissioner and the
legislative commission on health care access by November 1,
1993. If, in the development of rules and proposed legislation,
the commissioner intends to depart from the commission's
recommendations on this issue, the notification procedures in
Minnesota Statutes, section 62J.04, subdivision 4, apply.
Sec. 24. [EFFECTIVE DATE.]
Sections 1 to 23 are effective the day following final
enactment, but no integrated service network may provide health
care services prior to July 1, 1994.
ARTICLE 2
REGULATED ALL-PAYER SYSTEM
Section 1. Minnesota Statutes 1992, section 62D.042,
subdivision 2, is amended to read:
Subd. 2. [BEGINNING ORGANIZATIONS.] (a) Beginning
organizations shall maintain net worth of at least 8-1/3 percent
of the sum of all expenses expected to be incurred in the 12
months following the date the certificate of authority is
granted, or $1,500,000, whichever is greater.
(b) After the first full calendar year of operation,
organizations shall maintain net worth of at least 8-1/3 percent
and at most 16-2/3 percent of the sum of all expenses incurred
during the most recent calendar year, or $1,000,000, whichever
is greater but in no case shall net worth fall below $1,000,000.
Sec. 2. [62P.01] [REGULATED ALL-PAYER SYSTEM.]
The regulated all-payer system established under this
chapter governs all health care services that are provided
outside of an integrated service network. The regulated
all-payer system is designed to control costs, prices, and
utilization of all health care services not provided through an
integrated service network while maintaining or improving the
quality of services. The commissioner of health shall adopt
rules establishing controls within the system to ensure that the
rate of growth in spending in the system, after adjustments for
population size and risk, remains within the limits set by the
commissioner under section 62J.04. All providers that serve
Minnesota residents and all health carriers that cover Minnesota
residents shall comply with the requirements and rules
established under this chapter for all health care services or
coverage provided to Minnesota residents.
Sec. 3. [62P.03] [IMPLEMENTATION.]
(a) By January 1, 1994, the commissioner of health, in
consultation with the Minnesota health care commission, shall
report to the legislature recommendations for the design and
implementation of the all-payer system. The commissioner may
use a consultant or other technical assistance to develop a
design for the all-payer system. The commissioner's
recommendations shall include the following:
(1) methods for controlling payments to providers such as
uniform fee schedules or rate limits to be applied to all health
plans and health care providers with independent billing rights;
(2) methods for controlling utilization of services such as
the application of standardized utilization review criteria,
incentives based on setting and achieving volume targets,
recovery of excess spending due to overutilization, or required
use of practice parameters;
(3) methods for monitoring quality of care and mechanisms
to enforce the quality of care standards;
(4) requirements for maintaining and reporting data on
costs, prices, revenues, expenditures, utilization, quality of
services, and outcomes;
(5) measures to prevent or discourage adverse risk
selection between the regulated all-payer system and integrated
service networks;
(6) measures to coordinate the regulated all-payer system
with integrated service networks to minimize or eliminate
barriers to access to health care services that might otherwise
result;
(7) an appeals process;
(8) measures to encourage and facilitate appropriate use of
midlevel practitioners and eliminate undesirable barriers to
their participation in providing services;
(9) measures to assure appropriate use of technology and to
manage introduction of new technology;
(10) consequences to be imposed on providers whose
expenditures have exceeded the limits established by the
commissioner; and
(11) restrictions on provider conflicts of interest.
(b) On July 1, 1994, the regulated all-payer system shall
begin to be phased in with full implementation by July 1, 1996.
During the transition period, expenditure limits for health
carriers shall be established in accordance with section 4 and
health care provider revenue limits shall be established in
accordance with section 5.
Sec. 4. [62P.04] [EXPENDITURE LIMITS FOR HEALTH CARRIERS.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the following definitions apply.
(b) "Health carrier" has the definition provided in section
62A.011.
(c) "Total expenditures" mean incurred claims or
expenditures on health care services, administrative expenses,
charitable contributions, and all other payments made by health
carriers out of premium revenues, except taxes and assessments,
and payments or allocations made to establish or maintain
reserves. Total expenditures are equivalent to the amount of
total revenues minus taxes and assessments. Taxes and
assessments means payments for taxes, contributions to the
Minnesota comprehensive health association, the provider's
surcharge under section 256.9657, the MinnesotaCare provider tax
under section 295.52, assessments by the health coverage
reinsurance association, assessments by the Minnesota life and
health insurance guaranty association, and any new assessments
imposed by federal or state law.
Subd. 2. [ESTABLISHMENT.] The commissioner of health shall
establish limits on the increase in total expenditures by each
health carrier for calendar years 1994 and 1995. The limits
must be the same as the annual rate of growth in health care
spending established under section 62J.04, subdivision 1,
paragraph (b). Health carriers that are affiliates may elect to
meet one combined expenditure limit.
Subd. 3. [DETERMINATION OF EXPENDITURES.] Health carriers
shall submit to the commissioner of health, by April 1, 1994,
for calendar year 1993, and by April 1, 1995, for calendar year
1994, all information the commissioner determines to be
necessary to implement and enforce this section. The
information must be submitted in the form specified by the
commissioner. The information must include, but is not limited
to, expenditures per member per month or cost per employee per
month, and detailed information on revenues and reserves. The
commissioner, to the extent possible, shall coordinate the
submittal of the information required under this section with
the submittal of the financial data required under chapter 62J,
to minimize the administrative burden on health carriers. The
commissioner may adjust final expenditure figures for
demographic changes, risk selection, changes in basic benefits,
and legislative initiatives that materially change health care
costs, as long as these adjustments are consistent with the
methodology submitted by the health carrier to the commissioner,
and approved by the commissioner as actuarially justified. The
methodology to be used for adjustments and the election to meet
one expenditure limit for affiliated health carriers must be
submitted to the commissioner by September 1, 1993.
Subd. 4. [MONITORING OF RESERVES.] (a) The commissioner of
health shall monitor health carrier reserves and net worth as
established under chapters 60A, 62C, 62D, 62H, and 64B, to
ensure that savings resulting from the establishment of
expenditure limits are passed on to consumers in the form of
lower premium rates.
(b) Health carriers shall fully reflect in the premium
rates the savings generated by the expenditure limits and the
health care provider revenue limits. No premium rate increase
may be approved for those health carriers unless the health
carrier establishes to the satisfaction of the commissioner of
commerce or the commissioner of health, as appropriate, that the
proposed new rate would comply with this paragraph.
Subd. 5. [NOTICE.] The commissioner of health shall
publish in the State Register and make available to the public
by July 1, 1995, a list of all health carriers that exceeded
their expenditure target for the 1994 calendar year. The
commissioner shall publish in the State Register and make
available to the public by July 1, 1996, a list of all health
carriers that exceeded their combined expenditure limit for
calendar years 1994 and 1995. The commissioner shall notify
each health carrier that the commissioner has determined that
the carrier exceeded its expenditure limit, at least 30 days
before publishing the list, and shall provide each carrier with
ten days to provide an explanation for exceeding the expenditure
target. The commissioner shall review the explanation and may
change a determination if the commissioner determines the
explanation to be valid.
Subd. 6. [ASSISTANCE BY THE COMMISSIONER OF COMMERCE.] The
commissioner of commerce shall provide assistance to the
commissioner of health in monitoring health carriers regulated
by the commissioner of commerce. The commissioner of commerce,
in consultation with the commissioner of health, shall enforce
compliance by those health carriers.
Subd. 7. [ENFORCEMENT.] The commissioners of health and
commerce shall enforce the reserve limits referenced in
subdivision 4, with respect to the health carriers that each
commissioner respectively regulates. Each commissioner shall
require health carriers under the commissioner's jurisdiction to
submit plans of corrective action when the reserve requirement
is not met. Each commissioner may adopt rules necessary to
enforce this section. Carriers that exceed the expenditure
limits based on two-year average expenditure data or whose
reserves exceed the limits referenced in subdivision 4 shall be
required by the appropriate commissioner to pay back the amount
overspent through an assessment on the carrier. The appropriate
commissioner may approve a different repayment method to take
into account the carrier's financial condition.
Sec. 5. [62P.05] [HEALTH CARE PROVIDER REVENUE LIMITS.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"health care provider" has the definition given in section
62J.03, subdivision 8.
Subd. 2. [ESTABLISHMENT.] The commissioner of health shall
establish limits on the increase in revenue for each health care
provider, for calendar years 1994 and 1995. The limits must be
the same as the annual rate of growth in health care spending
established under section 62J.04, subdivision 1, paragraph (b).
The commissioner may adjust final revenue figures for case mix
complexity, inpatient to outpatient conversion, payer mix,
out-of-period settlements, taxes, donations, grants, and
legislative initiatives that materially change health care
costs, as long as these adjustments are consistent with the
methodology submitted by the health care provider to the
commissioner, and approved by the commissioner as actuarially
justified. The methodology to be used for adjustments must be
submitted to the commissioner by September 1, 1993. A health
care provider's revenues for purposes of these growth limits are
net of the contributions, surcharges, taxes, and assessments
listed in section 62P.04, subdivision 2, that the health care
provider pays.
Subd. 3. [MONITORING OF REVENUE.] The commissioner of
health shall monitor health care provider revenue, to ensure
that savings resulting from the establishment of revenue limits
are passed on to consumers in the form of lower charges. The
commissioner shall monitor hospital revenue by examining net
patient revenue per adjusted admission. The commissioner shall
monitor the revenue of physicians and other health care
providers by examining revenue per patient per year or revenue
per encounter. If this information is not available, the
commissioner may enforce an annual limit on the rate of growth
of the provider's current fees based on the limits on the rate
of growth established for calendar years 1994 and 1995.
Subd. 4. [MONITORING AND ENFORCEMENT.] Health care
providers shall submit to the commissioner of health, in the
form and at the times required by the commissioner, all
information the commissioner determines to be necessary to
implement and enforce this section. Health care providers shall
submit to audits conducted by the commissioner. The
commissioner shall regularly audit all health clinics employing
or contracting with over 100 physicians. The commissioner shall
also audit, at times and in a manner that does not interfere
with delivery of patient care, a sample of smaller clinics,
hospitals, and other health care providers. Providers that
exceed revenue limits based on two-year average revenue data
shall be required by the commissioner to pay back the amount
overspent during the following calendar year. The commissioner
may approve a different repayment schedule for a health care
provider that takes into account the provider's financial
condition. For those providers subject to fee limits
established by the commissioner, the commissioner may adjust the
percentage increase in the fee schedule to account for changes
in utilization. The commissioner may adopt rules in order to
enforce this section.
Sec. 6. [APPLICABILITY OF OTHER LAWS.]
Except as expressly provided in rules adopted under this
chapter, to the extent that a provider provides services in the
regulated all-payer system, the provider is subject to all other
statutes and rules that apply to providers of that type on the
effective date of this section, including, as applicable,
Minnesota Statutes, sections 62J.17 and 62J.23.
Sec. 7. [STUDY OF THE TRANSITION TO AN ALL-PAYER SYSTEM.]
The Minnesota health care commission shall study issues
related to the transition to an all-payer system and shall
report to the legislature and the governor by February 1, 1994.
The report must include, but is not limited to, recommendations
to minimize any financial and administrative burden of an
all-payer system on providers in areas of the state without
integrated service networks, increase the availability of
integrated service networks in rural areas of the state,
encourage the development of provider-managed integrated service
networks, and ensure continued access to necessary health care
services in all areas of the state.
Sec. 8. [EFFECTIVE DATE.]
Sections 1 to 7 are effective the day following final
enactment.
ARTICLE 3
DATA COLLECTION AND COST CONTROL INITIATIVES
Section 1. Minnesota Statutes 1992, section 62J.03,
subdivision 6, is amended to read:
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, integrated service networks;
health insurance companies, health maintenance organizations,
nonprofit health service plan corporations, and other health
plan companies; employee health plans offered by self-insured
employers; trusts established in a collective bargaining
agreement under the federal Labor-Management Relations Act of
1947, United States Code, title 29, section 141, et seq.; the
Minnesota comprehensive health association; 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.
Sec. 2. Minnesota Statutes 1992, section 62J.04,
subdivision 1, is amended to read:
Subdivision 1. [COMPREHENSIVE BUDGET LIMITS ON THE RATE OF
GROWTH.] (a) The commissioner of health shall set an annual
limit limits on the rate of growth of public and private
spending on health care services for Minnesota residents, as
provided in paragraph (b). The limit limits on growth must be
set at a level levels the commissioner determines to be
realistic and achievable but that will slow reduce the current
rate of growth in health care spending 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 for the next five years. The commissioner shall set
limits on growth based on available data on spending and growth
trends, including data from group purchasers, national data on
public and private sector health care spending and cost trends,
and trend information from other states.
(b) The commissioner shall set the following annual limits
on the rate of growth of public and private spending on health
care services for Minnesota residents:
(1) for calendar year 1994, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1993 plus 6.5 percentage points;
(2) for calendar year 1995, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1994 plus 5.3 percentage points;
(3) for calendar year 1996, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1995 plus 4.3 percentage points;
(4) for calendar year 1997, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1996 plus 3.4 percentage points; and
(5) for calendar year 1998, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1997 plus 2.6 percentage points.
If the health care financing administration forecast for
the total growth in national health expenditures for a calendar
year is lower than the rate of growth for the calendar year as
specified in clauses (1) to (5), the commissioner shall adopt
this forecast as the growth limit for that calendar year. The
commissioner shall adjust the growth limit set for calendar year
1995 to recover savings in health care spending required for the
period July 1, 1993 to December 31, 1993. The commissioner
shall publish:
(1) the projected limits in the State Register by April 15
of the year immediately preceding the year in which the limit
will be effective except for the year 1993, in which the limit
shall be published by July 1, 1993;
(2) the quarterly change in the regional consumer price
index for urban consumers; and
(3) the health care financing administration forecast for
total growth in the national health care expenditures. In
setting an annual limit, the commissioner is exempt from the
rulemaking requirements of chapter 14. The commissioner's
decision on an annual limit is not appealable.
Sec. 3. Minnesota Statutes 1992, section 62J.04, is
amended by adding a subdivision to read:
Subd. 1a. [ADJUSTED GROWTH LIMITS AND ENFORCEMENT.] (a)
The commissioner shall publish the final adjusted growth limit
in the State Register by January 15 of the year that the
expenditure limit is to be in effect. The adjusted limit must
reflect the actual regional Consumer Price Index for urban
consumers for the previous calendar year, and may deviate from
the previously published projected growth limits to reflect
differences between the actual regional Consumer Price Index for
urban consumers and the projected Consumer Price Index for urban
consumers. The commissioner shall report to the legislature by
January 15 of each year on the projected increase in health care
expenditures, the implementation of growth limits, and the
reduction in the trend in the growth based on the limits imposed.
(b) The commissioner shall enforce limits on growth in
spending and revenues for integrated service networks and for
the regulated all-payer system. If the commissioner determines
that artificial inflation or padding of costs or prices has
occurred in anticipation of the implementation of growth limits,
the commissioner may adjust the base year spending totals or
growth limits or take other action to reverse the effect of the
artificial inflation or padding.
(c) The commissioner shall impose and enforce overall
limits on growth in revenues and spending for integrated service
networks, with adjustments for changes in enrollment, benefits,
severity, and risks. If an integrated service network exceeds a
spending limit, the commissioner may reduce future limits on
growth in aggregate premium revenues for that integrated service
network by up to the amount overspent. If the integrated
service network system exceeds a systemwide spending limit, the
commissioner may reduce future limits on growth in premium
revenues for the integrated service network system by up to the
amount overspent.
(d) The commissioner shall set prices, utilization
controls, and other requirements for the regulated all-payer
system to ensure that the overall costs of this system, after
adjusting for changes in population, severity, and risk, do not
exceed the growth limits. If spending growth limits for a
calendar year are exceeded, the commissioner may reduce
reimbursement rates or otherwise recoup overspending for all or
part of the next calendar year, to recover in savings up to the
amount of money overspent. To the extent possible, the
commissioner may reduce reimbursement rates or otherwise recoup
overspending from individual providers who exceed the spending
growth limits.
Sec. 4. Minnesota Statutes 1992, section 62J.04,
subdivision 2, is amended to read:
Subd. 2. [DATA COLLECTION BY COMMISSIONER.] For purposes
of setting forecasting rates of growth in health care spending
and setting limits under this section subdivisions 1 and 1a, the
commissioner shall may collect from all Minnesota health care
providers data on patient revenues and health care spending
received during a time period specified by the commissioner.
The commissioner shall may also collect data on health
care revenues and 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.
Subd. 2a. [FAILURE TO PROVIDE DATA.] The intentional
failure to provide reports the data requested under this section
chapter 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 data required by the commissioner
under this section. If a provider refuses to provide a report
or information the data 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 data required under this section.
Subd. 2b. [DATA PRIVACY.] All data received under this
section or under section 62J.37, 62J.38, 62J.41, or 62J.42 is
private or nonpublic, trade secret information under section
13.37 as applicable. The commissioner shall establish
procedures and safeguards to ensure that data provided to the
Minnesota health care commission released by the commissioner is
in a form that does not identify individual specific patients,
providers, employers, purchasers, or other specific individuals
and organizations, except with the permission of the affected
individual or organization, or as permitted elsewhere in this
chapter.
Sec. 5. [62J.045] [MEDICAL EDUCATION AND RESEARCH COSTS.]
Subdivision 1. [PURPOSE.] The legislature finds that all
health care stakeholders, as well as society at large, benefit
from medical education and health care research. The
legislature further finds that the cost of medical education and
research should not be borne by a few hospitals or medical
centers but should be fairly allocated across the health care
system.
Subd. 2. [DEFINITION.] For purposes of this section,
"health care research" means research that is not subsidized
from private grants, donations, or other outside research
sources but is funded by patient out-of-pocket expenses or a
third party payer and has been approved by an institutional
review board certified by the United States Department of Health
and Human Services.
Subd. 3. [COST ALLOCATION FOR EDUCATION AND RESEARCH.] By
January 1, 1994, the commissioner of health, in consultation
with the health care commission and the health technology
advisory committee, shall:
(1) develop mechanisms to gather data and to identify the
annual cost of medical education and research conducted by
hospitals, medical centers, or health maintenance organizations;
(2) determine a percentage of the annual rate of growth
established under section 62J.04 to be allocated for the cost of
education and research and develop a method to assess the
percentage from each group purchaser;
(3) develop mechanisms to collect the assessment from group
purchasers to be deposited in a separate education and research
fund; and
(4) develop a method to allocate the education and research
fund to specific health care providers.
Sec. 6. Minnesota Statutes 1992, section 62J.09, is
amended by adding a subdivision to read:
Subdivision 1a. [DUTIES RELATED TO COST CONTAINMENT.] (a)
[ALLOCATION OF REGIONAL SPENDING LIMITS.] Regional coordinating
boards may advise the commissioner regarding allocation of
annual regional limits on the rate of growth for providers in
the regulated all-payer system in order to:
(1) achieve communitywide and regional public health goals
consistent with those established by the commissioner; and
(2) promote access to and equitable reimbursement of
preventive and primary care providers.
(b) [TECHNICAL ASSISTANCE.] Regional coordinating boards,
in cooperation with the commissioner, shall provide technical
assistance to parties interested in establishing or operating an
integrated service network within the region. This assistance
must complement assistance provided by the commissioner under
section 62N.23.
Sec. 7. Minnesota Statutes 1992, section 62J.33, is
amended to read:
62J.33 [TECHNICAL ASSISTANCE INFORMATION ON COST AND
QUALITY FOR PURCHASERS.]
Subdivision 1. [HEALTH CARE ANALYSIS UNIT.] The health
care analysis unit shall provide technical assistance
information to health plan and health care assist group
purchasers and consumers in making informed decisions regarding
purchasing of health care services. The unit shall provide
information allowing comparisons between integrated service
networks and between health care services and systems. The unit
shall collect information about:
(1) premiums, benefit levels, patient or enrollee
satisfaction, managed care procedures, health care outcomes, and
other features of popular integrated service networks, 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; and
(3) information on health care services not provided
through integrated service networks, including information on
prices, costs, expenditures, utilization, quality of care, and
outcomes.
The commissioner shall publicize this information in an
easily understandable format.
Subd. 2. [INFORMATION CLEARINGHOUSE.] The commissioner of
health shall establish an information clearinghouse within the
department of health to facilitate the ability of consumers,
employers, providers, health carriers, and others to obtain
information on health care costs and quality in Minnesota. The
commissioner shall make available through the clearinghouse
information developed or collected by the department of health
on practice parameters, outcomes data and research, the costs
and quality of integrated service networks, reports or
recommendations of the health technology advisory committee and
other entities on technology assessments, worksite wellness and
prevention programs, other wellness programs, consumer
education, and other initiatives. The clearinghouse shall, upon
request, make available information submitted voluntarily by
health plans, providers, employers, and others if the
information clearly states that an entity other than the state
submitted the information, identifies the entity, and states
that distribution by the clearinghouse does not imply
endorsement of the entity or the information by the commissioner
of health or the state of Minnesota. The clearinghouse shall
also refer requesters to sources of further information or
assistance. The clearinghouse is subject to chapter 13.
Sec. 8. [62J.35] [DATA COLLECTION.]
Subdivision 1. [CONTRACTING.] The commissioner may
contract with private organizations to carry out the data
collection initiatives required by this chapter. The
commissioner shall require in the contract that organizations
under contract adhere to the data privacy requirements
established under this chapter and chapter 13.
Subd. 2. [EMERGENCY RULES.] The commissioner shall adopt
permanent rules and may adopt emergency rules to implement the
data collection and reporting requirements in this chapter. The
commissioner may combine all data reporting and collection
requirements into a unified process so as to minimize
duplication and administrative costs.
Sec. 9. [62J.37] [DATA FROM INTEGRATED SERVICE NETWORKS.]
The commissioner shall require integrated service networks
operating under section 62N.06, subdivision 1, to submit data on
health care spending and revenue for calendar year 1994 by
February 15, 1995. Each February 15 thereafter, integrated
service networks shall submit to the commissioner data on health
care spending and revenue for the preceding calendar year. The
data must be provided in the form specified by the
commissioner. To the extent that an integrated service network
is operated by a group purchaser under section 62N.06,
subdivision 2, the integrated service network is exempt from
this section and the group purchaser must provide data on the
integrated service network under section 62J.38.
Sec. 10. [62J.38] [DATA FROM GROUP PURCHASERS.]
(a) The commissioner shall require group purchasers to
submit detailed data on total health care spending for calendar
years 1990, 1991, and 1992, and for calendar year 1993 and
successive calendar years. Group purchasers shall submit data
for the 1993 calendar year by February 15, 1994, and each April
1 thereafter shall submit data for the preceding calendar year.
(b) The commissioner shall require each group purchaser to
submit data on revenue, expenses, and member months, as
applicable. Revenue data must distinguish between premium
revenue and revenue from other sources and must also include
information on the amount of revenue in reserves and changes in
reserves. Expenditure data, including raw data from claims,
must be provided separately for the following categories:
physician services, dental services, other professional
services, inpatient hospital services, outpatient hospital
services, emergency and out-of-area care, pharmacy services and
prescription drugs, mental health services, chemical dependency
services, other expenditures, and administrative costs.
(c) State agencies and all other group purchasers shall
provide the required data using a uniform format and uniform
definitions, as prescribed by the commissioner.
Sec. 11. [62J.40] [DATA FROM STATE AGENCIES.]
In addition to providing the data required under section
62J.38, the commissioners of human services, commerce, labor and
industry, and employee relations and all other state departments
or agencies that administer one or more health care programs
shall provide to the commissioner of health any additional data
on the health care programs they administer that is requested by
the commissioner of health, including data in unaggregated form,
for purposes of developing estimates of spending, setting
spending limits, and monitoring actual spending. The data must
be provided at the times and in the form specified by the
commissioner of health.
Sec. 12. [62J.41] [DATA FROM PROVIDERS.]
Subdivision 1. [DATA TO BE COLLECTED FROM PROVIDERS.] The
commissioner shall require health care providers to collect and
provide both patient specific information and descriptive and
financial aggregate data on:
(1) the total number of patients served;
(2) the total number of patients served by state of
residence and Minnesota county;
(3) the site or sites where the health care provider
provides services;
(4) the number of individuals employed, by type of
employee, by the health care provider;
(5) the services and their costs for which no payment was
received;
(6) total revenue by type of payer, including but not
limited to, revenue from Medicare, medical assistance,
MinnesotaCare, nonprofit health service plan corporations,
commercial insurers, integrated service networks, health
maintenance organizations, and individual patients;
(7) revenue from research activities;
(8) revenue from educational activities;
(9) revenue from out-of-pocket payments by patients;
(10) revenue from donations; and
(11) any other data required by the commissioner, including
data in unaggregated form, for the purposes of developing
spending estimates, setting spending limits, monitoring actual
spending, and monitoring costs and quality.
Subd. 2. [ANNUAL MONITORING AND ESTIMATES.] The
commissioner shall require health care providers to submit the
required data for the period July 1, 1993 to December 31, 1993,
by February 15, 1994. Health care providers shall submit data
for the 1994 calendar year by February 15, 1995, and each
February 15 thereafter shall submit data for the preceding
calendar year. The commissioner of revenue may collect health
care service revenue data from health care providers, if the
commissioner of revenue and the commissioner agree that this is
the most efficient method of collecting the data. The
commissioner of revenue shall provide any data collected to the
commissioner of health.
Subd. 3. [PUBLIC HEALTH GOALS.] The commissioner shall
establish specific public health goals including, but not
limited to, increased delivery of prenatal care, improved birth
outcomes, and expanded childhood immunizations. The
commissioner shall consider the community public health goals
and the input of the statewide advisory committee on community
health in establishing the statewide goals. The commissioner
shall require health care providers and integrated service
networks to maintain and periodically report information on
changes in health outcomes related to specific public health
goals. The information must be provided at the times and in the
form specified by the commissioner.
Subd. 4. [REGIONAL PUBLIC HEALTH GOALS.] The regional
coordinating boards shall adopt regional public health goals,
taking into consideration the relevant portions of the community
health service plans, plans required by the Minnesota
comprehensive adult mental health act and the Minnesota
comprehensive children's mental health act, and community social
service act plans developed by county boards or community health
boards in the region under chapters 145A, 245, and 256E.
Sec. 13. [62J.42] [QUALITY, UTILIZATION, AND OUTCOME
DATA.]
The commissioner shall also require group purchasers and
health care providers to maintain and periodically report
information on quality of care, utilization, and outcomes. The
information must be provided at the times and in the form
specified by the commissioner.
Sec. 14. [62J.44] [PUBLICATION OF DATA.]
(a) Notwithstanding section 62J.04, subdivision 2b, the
commissioner may publish data on health care costs and spending,
quality and outcomes, and utilization for health care
institutions, individual health care professionals and groups of
health care professionals, group purchasers, and integrated
service networks, with a description of the methodology used for
analysis, in order to provide information to purchasers and
consumers of health care. The commissioner shall not reveal the
name of an institution, group of professionals, individual
health care professional, group purchaser, or integrated service
network until after the institution, group of professionals,
individual health care professional, group purchaser, or
integrated service network has had 15 days to review the data
and comment. The commissioner shall include any comments
received in the release of the data.
(b) Summary data derived from data collected under this
chapter may be provided under section 13.05, subdivision 7, and
may be released in studies produced by the commissioner or
otherwise in accordance with chapter 13.
Sec. 15. [62J.45] [DATA INSTITUTE.]
Subdivision 1. [STATEMENT OF PURPOSE.] It is the intention
of the legislature to create a public-private mechanism for the
collection of health care costs, quality, and outcome data, to
the extent administratively efficient and effective. This
integrated data system will provide clear, usable information on
the cost, quality, and structure of health care services in
Minnesota.
The health reform initiatives being implemented rely
heavily on the availability of valid, objective data that
currently are collected in many forms within the health care
industry. Data collection needs cannot be efficiently met by
undertaking separate data collection efforts.
The data institute created in this section will be a
partnership between the commissioner of health and a board of
directors representing health carriers and other group
purchasers, health care providers, and consumers. These
entities will work together to establish a centralized cost and
quality data system that will be used by the public and private
sectors. The data collection advisory committee and the
practice parameter advisory committee shall provide assistance
to the institute through the commissioner of health.
Subd. 2. [DEFINITIONS.] For purposes of this section, the
following definitions apply.
(a) "Board" means the board of directors of the data
institute.
(b) "Encounter level data" means data related to the
utilization of health care services by, and the provision of
health care services to individual patients, enrollees, or
insureds, including claims data, abstracts of medical records,
and data from patient interviews and patient surveys.
(c) "Health carrier" has the definition provided in section
62A.011, subdivision 2.
Subd. 3. [OBJECTIVES OF THE DATA INSTITUTE.] The data
institute shall:
(1) provide direction and coordination for public and
private sector data collection efforts;
(2) establish a data system that electronically transmits,
collects, archives, and provides users of data with the data
necessary for their specific interests, in order to promote a
high quality, cost-effective, consumer-responsive health care
system;
(3) use and build upon existing data sources and quality
measurement efforts, and improve upon these existing data
sources and measurement efforts through the integration of data
systems and the standardization of concepts, to the greatest
extent possible;
(4) ensure that each segment of the health care industry
can obtain data for appropriate purposes in a useful format and
timely fashion;
(5) protect the privacy of individuals and minimize
administrative costs; and
(6) develop a public/private information system to:
(i) make health care claims processing and financial
settlement transactions more efficient;
(ii) provide an efficient, unobtrusive method for meeting
the shared data needs of the state, consumers, employers,
providers, and group purchasers;
(iii) provide the state, consumers, employers, providers,
and group purchasers with information on the cost,
appropriateness and effectiveness of health care, and wellness
and cost containment strategies;
(iv) provide employers with the capacity to analyze benefit
plans and work place health; and
(v) provide researchers and providers with the capacity to
analyze clinical effectiveness.
The institute shall carry out these activities in
accordance with the recommendations of the data collection plan
developed by the data collection advisory committee, the
Minnesota health care commission, and the commissioner of
health, under subdivision 4.
Subd. 4. [DATA COLLECTION PLAN.] The commissioner, in
consultation with the board of the institute and the data
collection advisory committee, shall develop and implement a
plan that:
(1) provides data collection objectives, strategies,
priorities, cost estimates, administrative and operational
guidelines, and implementation timelines for the data institute;
and
(2) identifies the encounter level data needed for the
commissioner to carry out the duties assigned in this chapter.
The plan must take into consideration existing data sources and
data sources that can easily be made uniform for linkages to
other data sets.
This plan shall be prepared by October 31, 1993.
Subd. 5. [COMMISSIONER'S DUTIES.] (a) The commissioner
shall establish a public/private data institute in conjunction
with health care providers, health carriers and other group
purchasers, and consumers, to collect and process encounter
level data that are required to be submitted to the commissioner
under this chapter. The commissioner shall not collect
encounter level data from individual health care providers until
standardized forms and procedures are available. The
commissioner shall establish a board of directors comprised of
members of the public and private sector to provide oversight
for the administration and operation of the institute.
(b) Until the data institute is operational, the
commissioner may collect encounter level data required to be
submitted under this chapter.
(c) The commissioner, with the advice of the board, shall
establish policies for the disclosure of data to consumers,
purchasers, providers, integrated service networks, and plans
for their use in analysis to meet the goals of this chapter, as
well as for the public disclosure of data to other interested
parties. The disclosure policies shall ensure that consumers,
purchasers, providers, integrated service networks, and plans
have access to institute data for use in analysis to meet the
goals of this chapter at the same time that data is provided to
the data analysis unit in the department of health.
(d) The commissioner, with the advice of the board, may
require those requesting data from the institute to contribute
toward the cost of data collection through the payments of
fees. Entities supplying data to the institute shall not be
charged more than the actual transaction cost of providing the
data requested.
(e) The commissioner may intervene in the direct operation
of the institute, if this is necessary in the judgment of the
commissioner to accomplish the institute's duties. If the
commissioner intends to depart from the advice and
recommendations of the board, the commissioner shall inform the
board of the intended departure, provide the board with a
written explanation of the reasons for the departure, and give
the board the opportunity to comment on the departure.
Subd. 6. [BOARD OF DIRECTORS.] The institute is governed
by a 20-member board of directors consisting of the following
members:
(1) two representatives of hospitals, one appointed by the
Minnesota Hospital Association and one appointed by the
Metropolitan HealthCare Council, to reflect a mix of urban and
rural institutions;
(2) four representatives of health carriers, two appointed
by the Minnesota Council of Health Maintenance Organizations,
one appointed by Blue Cross Blue Shield, and one appointed by
the Insurance Federation of Minnesota;
(3) two consumer members, one appointed by the
commissioner, and one appointed by the AFL-CIO as a labor union
representative;
(4) five group purchaser representatives appointed by the
Minnesota Consortium of Healthcare Purchasers to reflect a mix
of urban and rural, large and small, and self-insured
purchasers;
(5) two physicians appointed by the Minnesota Medical
Association, to reflect a mix of urban and rural practitioners;
(6) one representative of teaching and research
institutions, appointed jointly by the Mayo Foundation and the
Minnesota Association of Public Teaching Hospitals;
(7) one nursing representative appointed by the Minnesota
Nurses Association; and
(8) three representatives of state agencies, one member
representing the department of employee relations, one member
representing the department of human services, and one member
representing the department of health.
Subd. 7. [TERMS; COMPENSATION; REMOVAL; AND
VACANCIES.] The board is governed by section 15.0575.
Subd. 8. [STAFF.] The board may hire an executive director.
The executive director is not a state employee but is covered by
section 3.736. The executive director may participate in the
following plans for employees in the unclassified service: the
state retirement plan, the state deferred compensation plan, and
the health insurance and life insurance plans. The attorney
general shall provide legal services to the board.
Subd. 9. [DUTIES.] The board shall provide assistance to
the commissioner in developing and implementing a plan for the
public/private information system. In addition, the board shall
make recommendations to the commissioner on:
(1) the purpose of initiating a data collection
initiatives;
(2) the expected benefit to the state from the initiatives;
(3) the methodology needed to ensure the validity of the
initiative without creating an undue burden to providers and
payors;
(4) the most appropriate method of collecting the necessary
data; and
(5) the projected cost to the state, health care providers,
health carriers, and other group purchasers to complete the
initiative.
Subd. 10. [DATA COLLECTION.] The commissioner, in
consultation with the data institute board, may select a vendor
to:
(1) collect the encounter level data required to be
submitted by group purchasers under sections 62J.38 and 62J.42,
state agencies under section 62J.40, and health care providers
under sections 62J.41 and 62J.42, using, to the greatest extent
possible, standardized forms and procedures;
(2) collect the encounter level data required for the
initiatives of the health care analysis unit, under sections
62J.30 to 62J.34, using, to the greatest extent possible,
standardized forms and procedures;
(3) process the data collected to ensure validity,
consistency, accuracy, and completeness, and as appropriate,
merge data collected from different sources;
(4) provide unaggregated, encounter level data to the
health care analysis unit within the department of health; and
(5) carry out other duties assigned in this section.
Subd. 11. [USE OF DATA.] (a) The board of the data
institute, with the advice of the data collection advisory
committee and the practice parameter advisory committee through
the commissioner, is responsible for establishing the
methodology for the collection of the data and is responsible
for providing direction on what data would be useful to the
plans, providers, consumers, and purchasers.
(b) The health care analysis unit is responsible for the
analysis of the data and the development and dissemination of
reports.
(c) The commissioner, in consultation with the board, shall
determine when and under what conditions data disclosure to
group purchasers, health care providers, consumers, researchers,
and other appropriate parties may occur to meet the state's
goals. The commissioner may require users of data to contribute
toward the cost of data collection through the payment of fees.
The commissioner shall require users of data to maintain the
data according to the data privacy provisions applicable to the
data.
Subd. 12. [CONTRACTING.] The commissioner, in consultation
with the board, may contract with private sector entities to
carry out the duties assigned in this section. The commissioner
shall diligently seek to enter into contracts with private
sector entities. Any contract must list the specific data to be
collected and the methods to be used to collect and validate the
data. Any contract must require the private sector entity to
maintain the data collected according to the data privacy
provisions applicable to the data.
Subd. 13. [DATA PRIVACY.] The board and the institute are
subject to chapter 13.
Subd. 14. [STANDARDS FOR DATA RELEASE.] The data institute
shall adopt standards for the collection, by the institute, of
data on costs, spending, quality, outcomes, and utilization.
The data institute shall also adopt standards for the analysis
and dissemination, by private sector entities, of data on costs,
spending, quality, outcomes, and utilization provided to the
private sector entities by the data institute. Both sets of
standards must be consistent with data privacy requirements.
Subd. 15. [INFORMATION CLEARINGHOUSE.] The commissioner
shall coordinate the activities of the data institute with the
activities of the information clearinghouse established in
section 62J.33, subdivision 2.
Subd. 16. [FEDERAL AND OTHER GRANTS.] The commissioner, in
collaboration with the board, shall seek federal funding and
funding from private and other nonstate sources for the
initiatives required by the board.
Sec. 16. [62J.46] [MONITORING AND REPORTS.]
Subdivision 1. [LONG-TERM CARE COSTS.] The commissioner,
with the advice of the interagency long-term care planning
committee established under section 144A.31, shall use existing
state data resources to monitor trends in public and private
spending on long-term care costs and spending in Minnesota. The
commissioner shall recommend to the legislature any additional
data collection activities needed to monitor these trends.
State agencies collecting information on long-term care spending
and costs shall coordinate with the interagency long-term care
planning committee and the commissioner to facilitate the
monitoring of long-term care expenditures in the state.
Subd. 2. [COST SHIFTING.] The commissioner shall monitor
the extent to which reimbursement rates for government health
care programs lead to the shifting of costs to private payers.
By January 1, 1995, the commissioner shall report any evidence
of cost shifting to the legislature and make recommendations on
adjustments to the cost containment plan that should be made due
to cost shifting.
Sec. 17. Laws 1992, chapter 549, article 7, section 9, is
amended to read:
Sec. 9. [STUDY OF ADMINISTRATIVE COSTS.]
The health care data 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 data analysis unit shall
also evaluate and make recommendations related to cost-savings
and efficiencies that may be achieved through streamlining and
consolidating health care administrative, payment, and data
collection systems. 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 produce cost-savings and efficiencies without compromising
the purposes for which the information is collected.
Sec. 18. [INSTRUCTION TO REVISOR.]
(a) The revisor of statutes shall insert section 62J.04,
subdivisions 2, 2a, and 2b, as subdivisions 1, 2, and 3 in
section 62J.35, and renumber the other subdivisions of section
62J.35 as subdivisions 4 and 5 of that section in the next and
subsequent editions of Minnesota Statutes.
(b) The revisor of statutes is directed to change the words
"health care analysis unit" to "data analysis unit" whenever
they appear in the next edition of Minnesota Statutes.
Sec. 19. [EFFECTIVE DATE.]
Sections 1 to 17 are effective the day following final
enactment.
ARTICLE 4
TECHNOLOGY ADVISORY COMMITTEE
Section 1. Minnesota Statutes 1992, section 62J.03, is
amended by adding a subdivision to read:
Subd. 9. [SAFETY.] "Safety" means a judgment of the
acceptability of risk of using a technology in a specified
situation.
Sec. 2. Minnesota Statutes 1992, section 62J.15,
subdivision 1, is amended to read:
Subdivision 1. [HEALTH PLANNING TECHNOLOGY ADVISORY
COMMITTEE.] The Minnesota health care commission shall convene
an advisory committee to make recommendations regarding the use
and distribution conduct evaluations of existing research and
technology assessments conducted by other entities 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 drugs, devices,
procedures, or processes applied to human health care procedures
and devices excluding United States Food and Drug Administration
approved implantable or wearable medical devices, such as
high-cost transplants and expensive, large-scale technologies
such as scanners and imagers. The advisory committee is
governed by section 15.0575, subdivision 3, except that members
do not receive per diem payments.
Sec. 3. Minnesota Statutes 1992, section 62J.15, is
amended by adding a subdivision to read:
Subd. 1a. [DEFINITION.] For purposes of sections 62J.15 to
62J.156, the terms "evaluate," "evaluation," and "evaluating"
mean the review or reviewing of research and technology
assessments conducted by other entities relating to specific
technologies and their specific use and application.
Sec. 4. [62J.152] [DUTIES OF HEALTH TECHNOLOGY ADVISORY
COMMITTEE.]
Subdivision 1. [GENERALLY.] The health technology advisory
committee established in section 62J.15 shall:
(1) develop criteria and processes for evaluating health
care technology assessments made by other entities;
(2) conduct evaluations of specific technologies and their
specific use and application;
(3) report the results of the evaluations to the
commissioner and the Minnesota health care commission; and
(4) carry out other duties relating to health technology
assigned by the commission.
Subd. 2. [PRIORITIES FOR DESIGNATING TECHNOLOGIES FOR
ASSESSMENT.] The health technology advisory committee shall
consider the following criteria in designating technologies for
evaluation:
(1) the level of controversy within the medical or
scientific community, including questionable or undetermined
efficacy;
(2) the cost implications;
(3) the potential for rapid diffusion;
(4) the impact on a substantial patient population;
(5) the existence of alternative technologies;
(6) the impact on patient safety and health outcome;
(7) the public health importance;
(8) the level of public and professional demand;
(9) the social, ethical, and legal concerns; and
(10) the prevalence of the disease or condition.
The committee may give different weights or attach different
importance to each of the criteria, depending on the technology
being considered. The committee shall consider any additional
criteria approved by the commissioner and the Minnesota health
care commission.
Subd. 3. [CRITERIA FOR EVALUATING TECHNOLOGY.] In
developing the criteria for evaluating specific technologies,
the health technology advisory committee shall consider safety,
improvement in health outcomes, and the degree to which a
technology is clinically effective and cost-effective, and other
factors.
Subd. 4. [TECHNOLOGY EVALUATION PROCESS.] (a) The health
technology advisory committee shall collect and evaluate studies
and research findings on the technologies selected for
evaluation from as wide of a range of sources as needed,
including, but not limited to: federal agencies or other units
of government, international organizations conducting health
care technology assessments, health carriers, insurers,
manufacturers, professional and trade associations, nonprofit
organizations, and academic institutions. The health technology
advisory committee may use consultants or experts and solicit
testimony or other input as needed to evaluate a specific
technology.
(b) When the evaluation process on a specific technology
has been completed, the health technology advisory committee
shall submit a preliminary report to the health care commission
and publish a summary of the preliminary report in the State
Register with a notice that written comments may be submitted.
The preliminary report must include the results of the
technology assessment evaluation, studies and research findings
considered in conducting the evaluation, and the health
technology advisory committee's summary statement about the
evaluation. Any interested persons or organizations may submit
to the health technology advisory committee written comments
regarding the technology evaluation within 30 days from the date
the preliminary report was published in the State Register. The
health technology advisory committee's final report on its
technology evaluation must be submitted to the health care
commission. A summary of written comments received by the
health technology advisory committee within the 30-day period
must be included in the final report. The health care
commission shall review the final report and prepare its
comments and recommendations. Before completing its final
comments and recommendations, the health care commission shall
provide adequate public notice that testimony will be accepted
by the health care commission. The health care commission shall
then forward the final report, its comments and recommendations,
and a summary of the public's comments to the commissioner and
information clearinghouse.
(c) The reports of the health technology advisory committee
and the comments and recommendations of the health care
commission should not eliminate or bar new technology, and are
not rules as defined in the administrative procedure act.
Subd. 5. [USE OF TECHNOLOGY EVALUATION.] (a) The final
report on the technology evaluation and the commission's
comments and recommendations may be used:
(1) by the commissioner in retrospective and prospective
review of major expenditures;
(2) by integrated service networks and other group
purchasers and by employers, in making coverage, contracting,
purchasing, and reimbursement decisions;
(3) by government programs and regulators of the regulated
all-payer system, in making coverage, contracting, purchasing,
and reimbursement decisions;
(4) by the commissioner and other organizations in the
development of practice parameters;
(5) by health care providers in making decisions about
adding or replacing technology and the appropriate use of
technology;
(6) by consumers in making decisions about treatment;
(7) by medical device manufacturers in developing and
marketing new technologies; and
(8) as otherwise needed by health care providers, health
care plans, consumers, and purchasers.
(b) At the request of the commissioner, the health care
commission, in consultation with the health technology advisory
committee, shall submit specific recommendations relating to
technologies that have been evaluated under this section for
purposes of retrospective and prospective review of major
expenditures and coverage, contracting, purchasing, and
reimbursement decisions affecting state programs and the
all-payer system.
Subd. 6. [APPLICATION TO THE REGULATED ALL-PAYER
SYSTEM.] The health technology advisory committee shall
recommend to the Minnesota health care commission and the
commissioner methods to control the diffusion and use of
technology within the regulated all-payer system for services
provided outside of an integrated service network.
Subd. 7. [DATA GATHERING.] In evaluating a specific
technology, the health technology advisory committee may seek
the use of data collected by manufacturers, health plans,
professional and trade associations, nonprofit organizations,
academic institutions, or any other organization or association
that may have data relevant to the committee's technology
evaluation. All information obtained under this subdivision
shall be considered nonpublic data under section 13.02,
subdivision 9, unless the data is already available to the
public generally or upon request.
Sec. 5. [62J.156] [CLOSED COMMITTEE HEARINGS.]
Notwithstanding section 471.705, the health technology
advisory committee may meet in closed session to discuss a
specific technology or procedure that involves data received
under section 62J.152, subdivision 7, that have been classified
as nonpublic data, where disclosure of the data would cause harm
to the competitive or economic position of the source of the
data.
Sec. 6. [USE AND DISTRIBUTION OF HEALTH TECHNOLOGY.]
The health care commission, in consultation with the health
technology advisory committee, shall submit a report to the
legislature and the governor by January 15, 1994, regarding the
necessity of a health technology advisory committee to address
the use and distribution of health technology under a system of
integrated service networks with global limits on growth, and in
a regulated all-payer system. The report may also include
recommendations for the future role of the health technology
advisory committee, and further changes, programs, or activities
that may be necessary to ensure that the use and distribution of
health technology in Minnesota is consistent with the state's
cost containment goals. In preparing the report, the health
care commission shall consult with the medical technology
industry in Minnesota for its input and reactions.
Sec. 7. [REPEALER.]
Minnesota Statutes 1992, section 62J.15, subdivision 2, is
repealed.
ARTICLE 5
MISCELLANEOUS
Section 1. Minnesota Statutes 1992, section 3.732,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] As used in this section and
section 3.736 the terms defined in this section have the
meanings given them.
(1) "State" includes each of the departments, boards,
agencies, commissions, courts, and officers in the executive,
legislative, and judicial branches of the state of Minnesota and
includes but is not limited to the housing finance agency, the
higher education coordinating board, the higher education
facilities authority, the health technology advisory committee,
the armory building commission, the zoological board, the iron
range resources and rehabilitation board, the state agricultural
society, the University of Minnesota, state universities,
community colleges, state hospitals, and state penal
institutions. It does not include a city, town, county, school
district, or other local governmental body corporate and politic.
(2) "Employee of the state" means all present or former
officers, members, directors, or employees of the state, members
of the Minnesota national guard, members of a bomb disposal unit
approved by the commissioner of public safety and employed by a
municipality defined in section 466.01 when engaged in the
disposal or neutralization of bombs outside the jurisdiction of
the municipality but within the state, or persons acting on
behalf of the state in an official capacity, temporarily or
permanently, with or without compensation. It does not include
either an independent contractor or members of the Minnesota
national guard while engaged in training or duty under United
States Code, title 10, or title 32, section 316, 502, 503, 504,
or 505, as amended through December 31, 1983. "Employee of the
state" includes a public defender appointed by the state board
of public defense, and a member of the health technology
advisory committee.
(3) "Scope of office or employment" means that the employee
was acting on behalf of the state in the performance of duties
or tasks lawfully assigned by competent authority.
(4) "Judicial branch" has the meaning given in section
43A.02, subdivision 25.
Sec. 2. Minnesota Statutes 1992, section 43A.17, is
amended by adding a subdivision to read:
Subd. 12. [ACTUARIES.] Actuaries employed by the
department of health, human services, or commerce are not
subject to subdivision 1.
Sec. 3. Minnesota Statutes 1992, section 60K.14, is
amended by adding a subdivision to read:
Subd. 7. Before selling, or offering to sell, any health
insurance or a health plan as defined in section 62A.011,
subdivision 3, an agent shall disclose to the prospective
purchaser the amount of any commission or other compensation the
agent will receive as a direct result of the sale. The
disclosure may be expressed in dollars or as a percentage of the
premium. The amount disclosed need not include any anticipated
renewal commissions.
Sec. 4. [62A.024] [RATE DISCLOSURE.]
If any health carrier, as defined in section 62A.011,
informs a policyholder or contract holder that a rate increase
is due to a statutory change, the health carrier must disclose
the specific amount of the rate increase directly due to the
statutory change and must identify the specific statutory
change. This disclosure must also separate any rate increase
due to medical inflation or other reasons from the rate increase
directly due to statutory changes in chapter 62A, 62C, 62D, 62E,
62H, 62J, 62L, or 64B.
Sec. 5. Minnesota Statutes 1992, section 62C.16, is
amended by adding a subdivision to read:
Subd. 4. [RETALIATORY ACTION PROHIBITED.] No service plan
corporation may take retaliatory action against a provider
solely on the grounds that the provider disseminated accurate
information regarding coverage of benefits or accurate benefit
limitations of a subscriber's contract or accurate
interpretations of the provider agreement that limit the
prescribing, providing, or ordering of care.
Sec. 6. Minnesota Statutes 1992, section 62D.12, is
amended by adding a subdivision to read:
Subd. 17. [DISCLOSURE OF COMMISSIONS.] Any person
receiving commissions for the sale of coverage or enrollment in
a health maintenance organization shall, before selling or
offering to sell coverage or enrollment, disclose to the
prospective purchaser the amount of any commission or other
compensation the person will receive as a direct result of the
sale. The disclosure may be expressed in dollars or as a
percentage of the premium. The amount disclosed need not
include any anticipated renewal commissions.
Sec. 7. Minnesota Statutes 1992, section 62J.04,
subdivision 3, is amended to read:
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 but excluding Chisago, Isanti, Wright, and
Sherburne counties, 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 issue recommendations regarding uniform billing
forms, uniform electronic billing procedures and data
interchanges, patient identification cards, and other uniform
claims and administrative procedures for health care providers
by January 1, 1993 and private and public sector payers. In
developing the recommendations, the commissioner shall review
the work of the work group on electronic data interchange (WEDI)
and the American National Standards Institute (ANSI) at the
national level, and the work being done at the state and local
level. The commissioner may adopt rules requiring the use of
the Uniform Bill 82/92 form, the National Council of
Prescription Drug Providers (NCPDP) 3.2 electronic version, the
Health Care Financing Administration 1500 form, or other
standardized forms or procedures;
(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 referral centers of excellence for
specialized and high-cost procedures and treatment and establish
minimum standards and requirements for particular procedures or
treatment;
(10) within the limits of appropriations for these
purposes, 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,
undertake prevention programs including initiatives to improve
birth outcomes, expand childhood immunization efforts, and
provide start-up grants for worksite wellness programs;
(11) administer the health care analysis unit under Laws
1992, chapter 549, 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.
Sec. 8. Minnesota Statutes 1992, section 62J.04,
subdivision 4, is amended to read:
Subd. 4. [CONSULTATION WITH THE COMMISSION.] Before When
the law requires the commissioner of health to consult with the
Minnesota health care commission when undertaking any of the
duties required under this chapter and chapter 62N, 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 on health care access 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.
Sec. 9. [62J.212] [COLLABORATION ON PUBLIC HEALTH GOALS.]
The commissioner may increase regional spending limits if
public health goals for that region are achieved.
Sec. 10. Minnesota Statutes 1992, section 151.21, is
amended to read:
151.21 [SUBSTITUTION.]
Subdivision 1. Except as provided in subdivision 2 this
section, it shall be unlawful for any pharmacist, assistant
pharmacist, or pharmacist intern who dispenses prescriptions,
drugs, and medicines to substitute an article different from the
one ordered, or deviate in any manner from the requirements of
an order or prescription without the approval of the prescriber.
Subd. 2. When a pharmacist receives a written prescription
on which the prescriber has personally written in handwriting
"dispense as written" or "D.A.W.," or an oral prescription in
which the prescriber has expressly indicated that the
prescription is to be dispensed as communicated, the pharmacist
shall dispense the brand name legend drug as prescribed.
Subd. 2 3. A pharmacist who receives a prescription for a
brand name legend drug may, with the written or verbal consent
of the purchaser, dispense any drug having the same generic name
as the brand name drug prescribed if the prescriber has not
personally written in handwriting "dispense as written" or
"D.A.W." on the prescription or, when an oral prescription is
given, has not expressly indicated the prescription is to be
dispensed as communicated. A pharmacist who receives a
prescription marked "D.A.W." or "dispense as written", or an
oral prescription indicating that the prescription is to be
dispensed as communicated, may substitute for the prescribed
brand name drug a generically equivalent drug product which is
manufactured in the same finished dosage form having the same
active ingredients and strength by the same manufacturer as the
prescribed brand name drug When a pharmacist receives a written
prescription on which the prescriber has not personally written
in handwriting "dispense as written" or "D.A.W.," or an oral
prescription in which the prescriber has not expressly indicated
that the prescription is to be dispensed as communicated, and
there is available in the pharmacist's stock a less expensive
generically equivalent drug that, in the pharmacist's
professional judgment, is safely interchangeable with the
prescribed drug, then the pharmacist shall, after disclosing the
substitution to the purchaser, dispense the generic drug, unless
the purchaser objects. A pharmacist may also substitute
pursuant to the oral instructions of the prescriber. A
pharmacist may not substitute a generically equivalent drug
product unless, in the pharmacist's professional judgment, the
substituted drug is therapeutically equivalent and
interchangeable to the prescribed drug. A pharmacist shall
notify the purchaser if the pharmacist is dispensing a drug
other than the brand name drug prescribed.
Subd. 3 4. A pharmacist dispensing a drug under the
provisions of subdivision 2 3 shall not dispense a drug of a
higher retail price than that of the brand name drug
prescribed. If more than one safely interchangeable generic
drug is available in a pharmacist's stock, then the pharmacist
shall dispense the least expensive alternative. Any difference
between acquisition cost to the pharmacist of the drug dispensed
and the brand name drug prescribed shall be passed on to the
purchaser.
Subd. 5. Nothing in this section requires a pharmacist to
substitute a generic drug if the substitution will make the
transaction ineligible for third-party reimbursement.
Subd. 6. When a pharmacist dispenses a brand name legend
drug and, at that time, a less expensive generically equivalent
drug is also available in the pharmacist's stock, the pharmacist
shall disclose to the purchaser that a generic drug is available.
Subd. 7. This section does not apply to prescription drugs
dispensed to persons covered by a health plan that covers
prescription drugs under a managed care formulary or similar
practices.
Subd. 8. The following drugs are excluded from this
section: coumadin, dilantin, lanoxin, premarin, theophylline,
synthroid, tegretol, and phenobarbital.
Sec. 11. [151.461] [GIFTS TO PRACTITIONERS PROHIBITED.]
It is unlawful for any manufacturer or wholesale drug
distributor, or any agent thereof, to offer or give any gift of
value to a practitioner. A medical device manufacturer that
distributes drugs as an incidental part of its device business
shall not be considered a manufacturer, a wholesale drug
distributor, or agent under this section. As used in this
section, "gift" does not include:
(1) professional samples of a drug provided to a prescriber
for free distribution to patients;
(2) items with a total combined retail value, in any
calendar year, of not more than $50;
(3) a payment to the sponsor of a medical conference,
professional meeting, or other educational program, provided the
payment is not made directly to a practitioner and is used
solely for bona fide educational purposes;
(4) reasonable honoraria and payment of the reasonable
expenses of a practitioner who serves on the faculty at a
professional or educational conference or meeting;
(5) compensation for the substantial professional or
consulting services of a practitioner in connection with a
genuine research project;
(6) publications and educational materials; or
(7) salaries or other benefits paid to employees.
Sec. 12. Minnesota Statutes 1992, section 151.47,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS.] All wholesale drug
distributors are subject to the requirements in paragraphs (a)
to (e) (f).
(a) No person or distribution outlet shall act as a
wholesale drug distributor without first obtaining a license
from the board and paying the required fee.
(b) No license shall be issued or renewed for a wholesale
drug distributor to operate unless the applicant agrees to
operate in a manner prescribed by federal and state law and
according to the rules adopted by the board.
(c) The board may require a separate license for each
facility directly or indirectly owned or operated by the same
business entity within the state, or for a parent entity with
divisions, subsidiaries, or affiliate companies within the
state, when operations are conducted at more than one location
and joint ownership and control exists among all the entities.
(d) As a condition for receiving and retaining a wholesale
drug distributor license issued under sections 151.42 to 151.51,
an applicant shall satisfy the board that it has and will
continuously maintain:
(1) adequate storage conditions and facilities;
(2) minimum liability and other insurance as may be
required under any applicable federal or state law;
(3) a viable security system that includes an after hours
central alarm, or comparable entry detection capability;
restricted access to the premises; comprehensive employment
applicant screening; and safeguards against all forms of
employee theft;
(4) a system of records describing all wholesale drug
distributor activities set forth in section 151.44 for at least
the most recent two-year period, which shall be reasonably
accessible as defined by board regulations in any inspection
authorized by the board;
(5) principals and persons, including officers, directors,
primary shareholders, and key management executives, who must at
all times demonstrate and maintain their capability of
conducting business in conformity with sound financial practices
as well as state and federal law;
(6) complete, updated information, to be provided to the
board as a condition for obtaining and retaining a license,
about each wholesale drug distributor to be licensed, including
all pertinent corporate licensee information, if applicable, or
other ownership, principal, key personnel, and facilities
information found to be necessary by the board;
(7) written policies and procedures that assure reasonable
wholesale drug distributor preparation for, protection against,
and handling of any facility security or operation problems,
including, but not limited to, those caused by natural disaster
or government emergency, inventory inaccuracies or product
shipping and receiving, outdated product or other unauthorized
product control, appropriate disposition of returned goods, and
product recalls;
(8) sufficient inspection procedures for all incoming and
outgoing product shipments; and
(9) operations in compliance with all federal requirements
applicable to wholesale drug distribution.
(e) An agent or employee of any licensed wholesale drug
distributor need not seek licensure under this section.
(f) A wholesale drug distributor shall file with the board
an annual report, in a form and on the date prescribed by the
board, identifying all payments, honoraria, reimbursement or
other compensation authorized under section 151.461, clauses (3)
to (5), paid to practitioners in Minnesota during the preceding
calendar year. The report shall identify the nature and value
of any payments totaling $100 or more, to a particular
practitioner during the year, and shall identify the
practitioner. Reports filed under this provision are public
data.
Sec. 13. [MEDICAL CARE SAVINGS ACCOUNTS.]
(a) The commissioner of health, in consultation with the
commissioners of employee relations, commerce, and revenue and
the Minnesota health care commission, shall conduct a study to
determine the feasibility of establishing a medical and health
care benefits plan such as one to help provide incentives for
persons in Minnesota whose employers pay all or part of the cost
of medical and health care benefits for their employees to
forego unnecessary medical treatment and to shop for the best
value in cases where treatment is necessary. The study must
address, at a minimum, the advantages and disadvantages of
establishing a medical and health care benefits plan and may
contain the components and criteria in paragraphs (b) to (f).
(b) Employers each year shall set aside in an account for
each of their employees a substantial percentage of the amount
that the employers currently or would otherwise spend for
medical and health care benefits for each employee. The account
is an allowance for medical and health care for the employee
during that year.
(c) Employers shall use the remaining percentage amount to
purchase or self fund major medical and health care benefits for
all employees, which shall pay 100 percent of the cost of any
portion of an employee's medical and health care that exceeds
the amount in the employee's medical and health care account.
(d) Any amount in an employee's medical and health care
account that is unspent belongs to the employee with no
restrictions on the purposes for which it may be used.
(e) The amount in an employee's medical and health care
account is not subject to state income taxation while it remains
in the account. Any amount spent from the account on medical
and health care is totally exempt from state income taxation.
Any amount spent from the account for any purpose other than
medical and health care is subject to state income taxation.
(f) Employers that provide medical and health care benefits
to their employees in accordance with the plan shall receive
state tax credits against their income for each year that the
benefits are provided.
(g) The results of the study must be submitted to the
legislature by January 15, 1994.
Sec. 14. [REQUESTS FOR FEDERAL ACTION.]
The commissioner of health shall seek changes in or waivers
from federal statutes or regulations as necessary to implement
the provisions of this act. The commissioner of human services
shall request and diligently pursue waivers from the federal
laws relating to health coverages provided under the medical
assistance and Medicare programs, so as to permit the state to
provide medical assistance benefits through integrated service
networks and permit Medicare to be provided in Minnesota through
integrated service networks.
Sec. 15. [PRESCRIPTION DRUG STUDY.]
The commissioner of health shall prepare and submit to the
legislature by February 15, 1994, a study of the manufacturing,
wholesale, and retail prescription drug market in Minnesota. In
conducting the study, the commissioner of health shall consult
with the commissioners of administration, employee relations,
and human services, the Minnesota health care commission, and
the University of Minnesota pharmaceutical research, management,
and economics programs. The commissioner shall also consult
with representatives of retail and other pharmacists, drug
manufacturers, consumers, senior citizen organizations,
hospitals, nursing homes, physicians, health maintenance
organizations, and other stakeholders and persons with relevant
expertise.
The study shall examine:
(1) how distinctions based on volume purchased or class of
purchaser affect manufacturer, wholesale, and retail pricing;
(2) how manufacturer and wholesale pricing are affected by
other industry practices, by federal and state law, and by other
factors such as marketing, promotion, and research and
development;
(3) how manufacturer and wholesale pricing affect retail
pricing;
(4) other factors affecting retail pricing; and
(5) methods of reducing manufacturer, wholesale, and retail
prices, including but not limited to:
(i) mandatory prescription drug contracting programs
operated by the state;
(ii) voluntary prescription drug contracting programs
operated by the state;
(iii) legislation to facilitate the development of
manufacturer and wholesale purchasing programs in the private
sector;
(iv) most favored purchaser legislation;
(v) legislation limiting manufacturer and wholesale price
increases;
(vi) legislation providing for preferential treatment for
underserved or disadvantaged retail purchasers;
(vii) legislation providing for the use of a state
formulary or other formularies;
(viii) legislation requiring pharmacists to substitute for
prescribed drugs a less expensive therapeutic alternative in
appropriate circumstances.
(ix) legislation providing for price disclosure; and
(x) limitations on drug promotion and marketing.
The study must include recommendations and draft
legislation for reducing the cost of prescription drugs for
wholesale purchasers, consumers, retail pharmacies, and
third-party payors. The recommendations must ensure that
parties benefiting from price savings at the manufacturer or
wholesale level pass these savings on to consumers. The
recommendations must not reduce costs through methods that would
adversely affect access to prescription drugs, reduce the
quality of prescription drugs, or cause a significant increase
in manufacturer, wholesale, or retail prices for certain market
segments.
Sec. 16. [REVIEW.]
The commissioner of commerce shall review the health care
policies currently in use in the state, and prepare standardized
health care policy forms to be used by all insurers, health
service plans, or others subject to the jurisdiction of
Minnesota Statutes, chapter 62A, 62C, 62E, or 62H. The
commissioner shall recommend possible legislative changes
necessary to adopt the policy forms to the chairs of the senate
commerce and consumer protection committee and the house of
representatives financial institutions and insurance committee
by February 1, 1994.
Sec. 17. [LEAVE DONATION PROGRAM.]
Subdivision 1. [DONATION OF VACATION TIME.] A state
employee may donate up to 12 hours of accrued vacation leave for
the benefit of a state employee in Morrison county whose child
was attacked by a dog in 1993. The number of hours donated must
be credited to the sick leave account of the receiving state
employee. If the receiving state employee uses all of the
donated time, additional hours up to 50 hours per employee of
accrued vacation leave time may be donated.
Subd. 2. [PROCESS FOR CREDITING.] The donating employee
must notify the employee's agency head of the amount of accrued
vacation time the employee wishes to donate. The agency head
shall transfer that amount to the sick leave account of the
recipient. A donation of accrued vacation leave time is
irrevocable once it has been transferred to the account.
Sec. 18. [INSTRUCTION TO REVISOR.]
The revisor of statutes shall change the words "centers of
excellence" to "referral centers" wherever they appear in
Minnesota Statutes, chapters 62D and 62J, in the next and
subsequent editions of Minnesota Statutes and Minnesota Rules,
parts 4685.0100 to 4685.3400.
Sec. 19. [EFFECTIVE DATE.]
Sections 1, 4, 5, 7, 8, 9, 13, 14, 15, and 16 are effective
the day following final enactment.
Section 17 is effective the day following final enactment
and applies retroactively to January 1, 1993.
Sections 3, 6, 10, 11, and 12 are effective January 1, 1994.
ARTICLE 6
COST CONTAINMENT AMENDMENTS
Section 1. Minnesota Statutes 1992, section 62J.03,
subdivision 8, is amended to read:
Subd. 8. [PROVIDER OR HEALTH CARE 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. and is eligible for reimbursement
under the medical assistance program under chapter 256B. For
purposes of this subdivision, "for a fee" includes traditional
fee-for-service arrangements, capitation arrangements, and any
other arrangement in which a provider receives compensation for
providing health care services or has the authority to directly
bill a group purchaser, health carrier, or individual for
providing health care services. For purposes of this
subdivision, "eligible for reimbursement under the medical
assistance program" means that the provider's services would be
reimbursed by the medical assistance program if the services
were provided to medical assistance enrollees and the provider
sought reimbursement, or that the services would be eligible for
reimbursement under medical assistance except that those
services are characterized as experimental, cosmetic, or
voluntary.
Sec. 2. Minnesota Statutes 1992, section 62J.04,
subdivision 5, is amended to read:
Subd. 5. [APPEALS.] A person or organization aggrieved may
appeal a decision of the commissioner under sections 62J.17 and
62J.23 through a contested case proceeding governed under
chapter 14. The notice of appeal must be served on the
commissioner within 30 days of receiving notice of the
decision. The commissioner shall decide the contested case.
Sec. 3. Minnesota Statutes 1992, section 62J.04,
subdivision 7, is amended to read:
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. Minnesota Statutes 1992, section 62J.05, is
amended by adding a subdivision to read:
Subd. 9. [REPEALER.] This section is repealed effective
July 1, 1996.
Sec. 5. Minnesota Statutes 1992, section 62J.09,
subdivision 2, is amended to read:
Subd. 2. [MEMBERSHIP.] (a) [NUMBER OF MEMBERS.] Each
regional health care management coordinating board consists of
16 17 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. The governor shall appoint the chair
of each regional board from among its members. The appointing
authorities under each paragraph for which there is to be chosen
more than one member shall consult prior to appointments being
made to ensure that, to the extent possible, the board includes
a representative from each county within the region.
(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 four 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.
Sec. 6. Minnesota Statutes 1992, section 62J.09,
subdivision 5, is amended to read:
Subd. 5. [CONFLICTS OF INTEREST.] No member may
participate or vote in regional coordinating board 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 regional coordinating
board's proceedings other than as an individual consumer of
health care services. A member with a direct financial interest
may participate in the proceedings, without voting, provided
that the member discloses any direct financial interest to the
regional coordinating board at the beginning of the proceedings.
Sec. 7. Minnesota Statutes 1992, section 62J.09, is
amended by adding a subdivision to read:
Subd. 6a. [CONTRACTING.] The commissioner, at the request
of a regional coordinating board, may contract on behalf of the
board with an appropriate regional organization to provide staff
support to the board, in order to assist the board in carrying
out the duties assigned in this section.
Sec. 8. Minnesota Statutes 1992, section 62J.09,
subdivision 8, is amended to read:
Subd. 8. [REPEALER.] This section is repealed effective
July 1, 1993 1996.
Sec. 9. Minnesota Statutes 1992, section 62J.17,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of this section, the
terms defined in this subdivision have the meanings given.
(a) [ACCESS.] "Access" has the meaning given in section
62J.2912, subdivision 2.
(b) [CAPITAL EXPENDITURE.] "Capital expenditure" means an
expenditure which, under generally accepted accounting
principles, is not properly chargeable as an expense of
operation and maintenance.
(c) [COST.] "Cost" means the amount paid by consumers or
third party payers for health care services or products.
(d) [DATE OF THE MAJOR SPENDING COMMITMENT.] "Date of the
major spending commitment" means the date the provider formally
obligated itself to the major spending commitment. The
obligation may be incurred by entering into a contract, making a
down payment, issuing bonds or entering a loan agreement to
provide financing for the major spending commitment, or taking
some other formal, tangible action evidencing the provider's
intention to make the major spending commitment.
(b) (e) [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) (f) [MAJOR SPENDING COMMITMENT.] "Major spending
commitment" means an expenditure in excess of $500,000 for:
(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) (g) [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) (h) [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.
Sec. 10. Minnesota Statutes 1992, section 62J.17, is
amended by adding a subdivision to read:
Subd. 4a. [EXPENDITURE REPORTING.] (a) [GENERAL
REQUIREMENT.] A provider making a major spending commitment
after April 1, 1992, shall submit notification of the
expenditure to the commissioner and provide the commissioner
with any relevant background information.
(b) [REPORT.] Notification must include a report, submitted
within 60 days after the date of the major spending commitment,
using terms conforming to the definitions in section 62J.03 and
this section. Each report is subject to retrospective review
and must contain:
(1) a detailed description of the major spending commitment
and its purpose;
(2) the date of the major spending commitment;
(3) a statement of the expected impact that the major
spending commitment will have on charges by the provider to
patients and third party payors;
(4) a statement of the expected impact on the clinical
effectiveness or quality of care received by the patients that
the provider expects to serve;
(5) a statement of the extent to which equivalent services
or technology are already available to the provider's actual and
potential patient population;
(6) a statement of the distance from which the nearest
equivalent services or technology are already available to the
provider's actual and potential population;
(7) a statement describing the pursuit of any lawful
collaborative arrangements; and
(8) a statement of assurance that the provider will not
use, purchase, or perform health care technologies and
procedures that are not clinically effective and cost-effective,
unless the technology is used for experimental or research
purposes to determine whether a technology or procedure is
clinically effective and cost-effective.
The provider may submit any additional information that it
deems relevant.
(c) [ADDITIONAL INFORMATION.] The commissioner may request
additional information from a provider for the purpose of review
of a report submitted by that provider, and may consider
relevant information from other sources. A provider shall
provide any information requested by the commissioner within the
time period stated in the request, or within 30 days after the
date of the request if the request does not state a time.
(d) [FAILURE TO COMPLY.] If the provider fails to submit a
complete and timely expenditure report, including any additional
information requested by the commissioner, the commissioner may
make the provider's subsequent major spending commitments
subject to the procedures of prospective review and approval
under subdivision 6a.
Sec. 11. Minnesota Statutes 1992, section 62J.17, is
amended by adding a subdivision to read:
Subd. 5a. [RETROSPECTIVE REVIEW.] (a) The commissioner
shall retrospectively review each major spending commitment and
notify the provider of the results of the review. The
commissioner shall determine whether the major spending
commitment was appropriate. In making the determination, the
commissioner may consider the following criteria: the major
spending commitment's impact on the cost, access, and quality of
health care; the clinical effectiveness and cost-effectiveness
of the major spending commitment; and the alternatives available
to the provider.
(b) The commissioner may not prevent or prohibit a major
spending commitment subject to retrospective review. However,
if the provider fails the retrospective review, any major
spending commitments by that provider for the five-year period
following the commissioner's decision are subject to prospective
review under subdivision 6a.
Sec. 12. Minnesota Statutes 1992, section 62J.17, is
amended by adding a subdivision to read:
Subd. 6a. [PROSPECTIVE REVIEW AND APPROVAL.] (a)
[REQUIREMENT.] No health care provider subject to prospective
review under this subdivision shall make a major spending
commitment unless:
(1) the provider has filed an application with the
commissioner to proceed with the major spending commitment and
has provided all supporting documentation and evidence requested
by the commissioner; and
(2) the commissioner determines, based upon this
documentation and evidence, that the major spending commitment
is appropriate under the criteria provided in subdivision 5a in
light of the alternatives available to the provider.
(b) [APPLICATION.] A provider subject to prospective review
and approval shall submit an application to the commissioner
before proceeding with any major spending commitment. The
application must address each item listed in subdivision 4a,
paragraph (a), and must also include documentation to support
the response to each item. The provider may submit information,
with supporting documentation, regarding why the major spending
commitment should be excepted from prospective review under
paragraph (d). The submission may be made either in addition to
or instead of the submission of information relating to the
items listed in subdivision 4a, paragraph (a).
(c) [REVIEW.] The commissioner shall determine, based upon
the information submitted, whether the major spending commitment
is appropriate under the criteria provided in subdivision 5a, or
whether it should be excepted from prospective review under
paragraph (d). In making this determination, the commissioner
may also consider relevant information from other sources. At
the request of the commissioner, the Minnesota health care
commission shall convene an expert review panel made up of
persons with knowledge and expertise regarding medical
equipment, specialized services, health care expenditures, and
capital expenditures to review applications and make
recommendations to the commissioner. The commissioner shall
make a decision on the application within 60 days after an
application is received.
(d) [EXCEPTIONS.] The prospective review and approval
process 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.
(e) [NOTIFICATION REQUIRED FOR EXCEPTED MAJOR SPENDING
COMMITMENT.] A provider making a major spending commitment
covered by paragraph (d) shall provide notification of the major
spending commitment as provided under subdivision 4a.
(f) [PENALTIES AND REMEDIES.] The commissioner of health
has the authority to issue fines, seek injunctions, and pursue
other remedies as provided by law.
Sec. 13. Minnesota Statutes 1992, section 62J.23, is
amended by adding a subdivision to read:
Subd. 4. [INTEGRATED SERVICE NETWORKS.] (a) The
legislature finds that the formation and operation of integrated
service networks will accomplish the purpose of the federal
Medicare antikickback statute, which is to reduce the
overutilization and overcharging that may result from
inappropriate provider incentives. Accordingly, it is the
public policy of the state of Minnesota to support the
development of integrated service networks. The legislature
finds that the federal Medicare antikickback laws should not be
interpreted to interfere with the development of integrated
service networks or to impose liability for arrangements between
an integrated service network and its participating entities.
(b) An arrangement between an integrated service network
and any or all of its participating entities is not subject to
liability under subdivisions 1 and 2.
Sec. 14. [62J.2911] [ANTITRUST EXCEPTIONS; 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 cooperative
arrangements involving providers or purchasers that might be
prohibited by state and federal antitrust laws if undertaken
without governmental involvement. The purpose of sections
62J.2911 to 62J.2921 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 marketplace. The legislature intends that approval of
arrangements be accompanied by appropriate conditions,
supervision, and regulation to protect against private abuses of
economic power, and that an arrangement approved by the
commissioner and accompanied by such appropriate conditions,
supervision, and regulation shall not be subject to state and
federal antitrust liability.
Sec. 15. [62J.2912] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of sections 62J.2911
to 62J.2921, the terms defined in this section have the meanings
given them.
Subd. 2. [ACCESS.] "Access" means the financial, temporal,
and geographic availability of health care to individuals who
need it.
Subd. 3. [APPLICANT.] "Applicant" means the party or
parties to an agreement or business arrangement for which the
commissioner's approval is sought under this section.
Subd. 4. [COMMISSIONER.] "Commissioner" means the
commissioner of health.
Subd. 5. [CONTESTED CASE.] "Contested case" means a
proceeding conducted by the office of administrative hearings
under sections 14.57 to 14.62.
Subd. 6. [COST OR COST OF HEALTH CARE.] "Cost" or "cost of
health care" means the amount paid by consumers or third party
payers for health care services or products.
Subd. 7. [CRITERIA.] "Criteria" means the cost, access,
and quality of health care.
Subd. 8. [HEALTH CARE PRODUCTS.] "Health care products"
means durable medical equipment and "medical equipment" as
defined in section 62J.17, subdivision 2, paragraph (g).
Subd. 9. [HEALTH CARE SERVICE.] "Health care service" has
the meaning given in section 62J.17, subdivision 2, paragraph
(e).
Subd. 10. [PERSON.] "Person" means an individual or legal
entity.
Sec. 16. [62J.2913] [SCOPE.]
Subdivision 1. [AVAILABILITY OF EXCEPTION.] Providers or
purchasers wishing to engage in contracts, business or financial
arrangements, or other activities, practices, or arrangements
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 may apply to
the commissioner for an exception.
Subd. 2. [ABSOLUTE DEFENSE.] Approval by the commissioner
is an absolute defense against any action under state and
federal antitrust laws, except as provided under section
62J.2921, subdivision 5.
Subd. 3. [APPLICATION CANNOT BE USED TO IMPOSE LIABILITY.]
The commissioner may ask the attorney general to comment on an
application. The application and any information obtained by
the commissioner under sections 62J.2914 to 62J.2916 that is not
otherwise available is not admissible in any civil or criminal
proceeding brought by the attorney general or any other person
based on an antitrust claim, except:
(1) a proceeding brought under section 62J.2921,
subdivision 5, based on an applicant's failure to substantially
comply with the terms of the application; or
(2) a proceeding based on actions taken by the applicant
prior to submitting the application, where such actions are
admitted to in the application.
Subd. 4. [OUT-OF-STATE APPLICANTS.] Providers or
purchasers not physically located in Minnesota are eligible to
seek an exception for arrangements in which they transact
business in Minnesota as defined in section 295.51.
Sec. 17. [62J.2914] [APPLICATION.]
Subdivision 1. [DISCLOSURE.] An application for approval
must include, to the extent applicable, disclosure of the
following:
(1) a descriptive title;
(2) a table of contents;
(3) exact names of each party to the application and the
address of the principal business office of each party;
(4) the name, address, and telephone number of the persons
authorized to receive notices and communications with respect to
the application;
(5) a verified statement by a responsible officer of each
party to the application attesting to the accuracy and
completeness of the enclosed information;
(6) background information relating to the proposed
arrangement, including:
(i) a description of the proposed arrangement, including a
list of any services or products that are the subject of the
proposed arrangement;
(ii) an identification of any tangential services or
products associated with the services or products that are the
subject of the proposed arrangement;
(iii) a description of the geographic territory involved in
the proposed arrangement;
(iv) if the geographic territory described in item (iii),
is different from the territory in which the applicants have
engaged in the type of business at issue over the last five
years, a description of how and why the geographic territory
differs;
(v) identification of all products or services that a
substantial share of consumers would consider substitutes for
any service or product that is the subject of the proposed
arrangement;
(vi) identification of whether any services or products of
the proposed arrangement are currently being offered, capable of
being offered, utilized, or capable of being utilized by other
providers or purchasers in the geographic territory described in
item (iii);
(vii) identification of the steps necessary, under current
market and regulatory conditions, for other parties to enter the
territory described in item (iii) and compete with the
applicant;
(viii) a description of the previous history of dealings
between the parties to the application;
(ix) a detailed explanation of the projected effects,
including expected volume, change in price, and increased
revenue, of the arrangement on each party's current businesses,
both generally as well as the aspects of the business directly
involved in the proposed arrangement;
(x) the present market share of the parties to the
application and of others affected by the proposed arrangement,
and projected market shares after implementation of the proposed
arrangement;
(xi) a statement of why the projected levels of cost,
access, or quality could not be achieved in the existing market
without the proposed arrangement; and
(xii) an explanation of how the arrangement relates to any
Minnesota health care commission or applicable regional
coordinating board plans for delivery of health care; and
(7) a detailed explanation of how the transaction will
affect cost, access, and quality. The explanation must address
the factors in section 62J.2917, subdivision 2, paragraphs (b)
to (d), to the extent applicable.
Subd. 2. [STATE REGISTER NOTICE.] In addition to the
disclosures required in subdivision 1, the application must
contain a written description of the proposed arrangement for
purposes of publication in the State Register. The notice must
include sufficient information to advise the public of the
nature of the proposed arrangement and to enable the public to
provide meaningful comments concerning the expected results of
the arrangement. The notice must also state that any person may
provide written comments to the commissioner, with a copy to the
applicant, within 20 days of the notice's publication. The
commissioner shall approve the notice before publication. If
the commissioner determines that the submitted notice does not
provide sufficient information, the commissioner may amend the
notice before publication and may consult with the applicant in
preparing the amended notice. The commissioner shall not
publish an amended notice without the applicant's approval.
Subd. 3. [MULTIPLE PARTIES TO A PROPOSED ARRANGEMENT.] For
a proposed arrangement involving multiple parties, one joint
application must be submitted on behalf of all parties to the
arrangement.
Subd. 4. [FILING FEE.] An application must be accompanied
by a filing fee, which must be deposited in the health care
access fund. The total of the deposited application fees is
appropriated annually to the commissioner to administer the
antitrust exceptions program. The filing fee is $1,000 for any
application submitted by parties whose combined gross revenues
exceeded $20 million in the most recent calendar or fiscal year
for which such figures are available. The filing fee for all
other applications is $250.
Subd. 5. [TRADE SECRET INFORMATION; PROTECTION.] Trade
secret information, as defined in section 13.37, subdivision 1,
paragraph (b), must be protected to the extent required under
chapter 13.
Subd. 6. [COMMISSIONER'S AUTHORITY TO REFUSE TO
REVIEW.] (a) If the commissioner determines that an application
is unclear, incomplete, or provides an insufficient basis on
which to base a decision, the commissioner may return the
application. The applicant may complete or revise the
application and resubmit it.
(b) If, upon review of the application and upon advice from
the attorney general, the commissioner concludes that the
proposed arrangement does not present any potential for
liability under the state or federal antitrust laws, the
commissioner may decline to review the application and so notify
the applicant.
(c) The commissioner may decline to review any application
relating to arrangements already in effect before the submission
of the application. However, the commissioner shall review any
application if the review is expressly provided for in a
settlement agreement entered into before the enactment of this
section by the applicant and the attorney general.
Subd. 7. [COMMISSIONER'S AUTHORITY TO EXTEND TIME LIMIT.]
Upon the showing of good cause, the commissioner may extend any
of the time limits stated in sections 62J.2915 and 62J.2916 at
the request of the applicant or another person.
Sec. 18. [62J.2915] [NOTICE AND COMMENT.]
Subdivision 1. [NOTICE.] The commissioner shall cause the
notice described in section 62J.2914, subdivision 2, to be
published in the State Register and sent to the Minnesota health
care commission, the regional coordinating boards for any
regions that include all or part of the territory covered by the
proposed arrangement, and any person who has requested to be
placed on a list to receive notice of applications. The
commissioner may maintain separate notice lists for different
regions of the state. The commissioner may also send a copy of
the notice to any person together with a request that the person
comment as provided under subdivision 2. Copies of the request
must be provided to the applicant.
Subd. 2. [COMMENTS.] Within 20 days after the notice is
published, any person may mail to the commissioner written
comments with respect to the application. Within 30 days after
the notice is published, the Minnesota health care commission or
any regional coordinating board may mail to the commissioner
comments with respect to the application. Persons submitting
comments shall provide a copy of the comments to the applicant.
The applicant may mail to the commissioner written responses to
any comments within ten days after the deadline for mailing such
comments. The applicant shall send a copy of the response to
the person submitting the comment.
Sec. 19. [62J.2916] [PROCEDURE FOR REVIEW OF
APPLICATIONS.]
Subdivision 1. [CHOICE OF PROCEDURES.] After the
conclusion of the period provided in section 62J.2915,
subdivision 2, for the applicant to respond to comments, the
commissioner shall select one of the three procedures provided
in subdivision 2. In determining which procedure to use, the
commissioner shall consider the following criteria:
(1) the size of the proposed arrangement, in terms of
number of parties and amount of money involved;
(2) the complexity of the proposed arrangement;
(3) the novelty of the proposed arrangement;
(4) the substance and quantity of the comments received;
(5) any comments received from the Minnesota health care
commission or regional coordinating boards; and
(6) the presence or absence of any significant gaps in the
factual record.
If the applicant demands a contested case hearing no later
than the conclusion of the period provided in section 62J.2915,
subdivision 2, for the applicant to respond to comments, the
commissioner shall not select a procedure. Instead, the
applicant shall be given a contested case proceeding as a matter
of right.
Subd. 2. [PROCEDURES AVAILABLE.] (a) [DECISION ON THE
WRITTEN RECORD.] The commissioner may issue a decision based on
the application, the comments, and the applicant's responses to
the comments, to the extent each is relevant. In making the
decision, the commissioner may consult with staff of the
department of health and may rely on department of health data.
(b) [LIMITED HEARING.] (1) The commissioner may order a
limited hearing. A copy of the order must be mailed to the
applicant and to all persons who have submitted comments or
requested to be kept informed of the proceedings involving the
application. The order must state the date, time, and location
of the limited hearing and must identify specific issues to be
addressed at the limited hearing. The issues may include the
feasibility and desirability of one or more alternatives to the
proposed arrangement. The order must require the applicant to
submit written evidence, in the form of affidavits and
supporting documents, addressing the issues identified, within
20 days after the date of the order. The order shall also state
that any person may arrange to receive a copy of the written
evidence from the commissioner, at the person's expense, and may
provide written comments on the evidence within 40 days after
the date of the order. A person providing written comments
shall provide a copy of the comments to the applicant.
(2) The limited hearing must be held before the
commissioner or department of health staff member designated by
the commissioner. The commissioner or the commissioner's
designee shall question the applicant about the evidence
submitted by the applicant. The questions may address relevant
issues identified in the comments submitted in response to the
written evidence or identified by department of health staff or
brought to light by department of health data. At the
conclusion of the applicant's responses to the questions, any
person who submitted comments about the applicant's written
evidence may make a statement addressing the applicant's
responses to the questions. The commissioner or the
commissioner's designee may ask questions of any person making a
statement. At the conclusion of all statements, the applicant
may make a closing statement.
(3) The commissioner's decision after a limited hearing
must be based upon the application, the comments, the
applicant's response to the comments, the applicant's written
evidence, the comments in response to the written evidence, and
the information presented at the limited hearing, to the extent
each is relevant. In making the decision, the commissioner may
consult with staff of the department of health and may rely on
department of health data.
(c) [CONTESTED CASE HEARING.] The commissioner may order a
contested case hearing. A contested case hearing shall be tried
before an administrative law judge who shall issue a written
recommendation to the commissioner and shall follow the
procedures in sections 14.57 to 14.62. All factual issues
relevant to a decision must be presented in the contested case.
The attorney general may appear as a party. Additional parties
may appear to the extent permitted under sections 14.57 to
14.62. The record in the contested case includes the
application, the comments, the applicant's response to the
comments, and any other evidence that is part of the record
under sections 14.57 to 14.62.
Sec. 20. [62J.2917] [CRITERIA FOR DECISION.]
Subdivision 1. [CRITERIA.] The commissioner shall not
approve an application unless the commissioner determines that
the arrangement is more likely to result in lower costs,
increased access, or increased quality of health care, than
would otherwise occur under existing market conditions or
conditions likely to develop without an exemption from state and
federal antitrust law. In the event that a proposed arrangement
appears likely to improve one or two of the criteria at the
expense of another one or two of the criteria, the commissioner
shall not approve the application unless the commissioner
determines that the proposed arrangement, taken as a whole, is
likely to substantially further the purpose of this chapter. In
making such a determination, the commissioner may employ a
cost/benefit analysis.
Subd. 2. [FACTORS.] (a) [GENERALLY APPLICABLE FACTORS.] In
making a determination about cost, access, and quality, the
commissioner may consider the following factors, to the extent
relevant:
(1) whether the proposal is compatible with the cost
containment plan or other plan of the Minnesota health care
commission or the applicable regional plans of the regional
coordinating boards;
(2) market structure:
(i) actual and potential sellers and buyers, or providers
and purchasers;
(ii) actual and potential consumers;
(iii) geographic market area; and
(iv) entry conditions;
(3) current market conditions;
(4) the historical behavior of the market;
(5) performance of other, similar arrangements;
(6) whether the proposal unnecessarily restrains
competition or restrains competition in ways not reasonably
related to the purposes of this chapter; and
(7) the financial condition of the applicant.
(b) [COST.] The commissioner's analysis of cost must focus
on the individual consumer of health care. Cost savings to be
realized by providers, health carriers, group purchasers, or
other participants in the health care system are relevant only
to the extent that the savings are likely to be passed on to the
consumer. However, where an application is submitted by
providers or purchasers who are paid primarily by third party
payers unaffiliated with the applicant, it is sufficient for the
applicant to show that cost savings are likely to be passed on
to the unaffiliated third party payers; the applicants do not
have the burden of proving that third party payers with whom the
applicants are not affiliated will pass on cost savings to
individuals receiving coverage through the third party payers.
In making determinations as to costs, the commissioner may
consider:
(1) the cost savings likely to result to the applicant;
(2) the extent to which the cost savings are likely to be
passed on to the consumer and in what form;
(3) the extent to which the proposed arrangement is likely
to result in cost shifting by the applicant onto other payers or
purchasers of other products or services;
(4) the extent to which the cost shifting by the applicant
is likely to be followed by other persons in the market;
(5) the current and anticipated supply and demand for any
products or services at issue;
(6) the representations and guarantees of the applicant and
their enforceability;
(7) likely effectiveness of regulation by the commissioner;
(8) inferences to be drawn from market structure;
(9) the cost of regulation, both for the state and for the
applicant; and
(10) any other factors tending to show that the proposed
arrangement is or is not likely to reduce cost.
(c) [ACCESS.] In making determinations as to access, the
commissioner may consider:
(1) the extent to which the utilization of needed health
care services or products by the intended targeted population is
likely to increase or decrease. When a proposed arrangement is
likely to increase access in one geographic area, by lowering
prices or otherwise expanding supply, but limits access in
another geographic area by removing service capabilities from
that second area, the commissioner shall articulate the criteria
employed to balance these effects;
(2) the extent to which the proposed arrangement is likely
to make available a new and needed service or product to a
certain geographic area; and
(3) the extent to which the proposed arrangement is likely
to otherwise make health care services or products more
financially or geographically available to persons who need them.
If the commissioner determines that the proposed
arrangement is likely to increase access and bases that
determination on a projected increase in utilization, the
commissioner shall also determine and make a specific finding
that the increased utilization does not reflect overutilization.
(d) [QUALITY.] In making determinations as to quality, the
commissioner may consider the extent to which the proposed
arrangement is likely to:
(1) decrease morbidity and mortality;
(2) result in faster convalescence;
(3) result in fewer hospital days;
(4) permit providers to attain needed experience or
frequency of treatment, likely to lead to better outcomes;
(5) increase patient satisfaction; and
(6) have any other features likely to improve or reduce the
quality of health care.
Sec. 21. [62J.2918] [DECISION.]
Subdivision 1. [APPROVAL OR DISAPPROVAL.] The commissioner
shall issue a written decision approving or disapproving the
application. The commissioner may condition approval on a
modification of all or part of the proposed arrangement to
eliminate any restriction on competition that is not reasonably
related to the goals of reducing cost or improving access or
quality. The commissioner may also establish conditions for
approval that are reasonably necessary to protect against abuses
of private economic power and to ensure that the arrangement is
appropriately supervised and regulated by the state.
Subd. 2. [FINDINGS OF FACT.] The commissioner's decision
shall make specific findings of fact concerning the cost,
access, and quality criteria, and identify one or more of those
criteria as the basis for the decision.
Subd. 3. [DATA FOR SUPERVISION.] A decision approving an
application must require the periodic submission of specific
data relating to cost, access, and quality, and to the extent
feasible, identify objective standards of cost, access, and
quality by which the success of the arrangement will be
measured. However, if the commissioner determines that the
scope of a particular proposed arrangement is such that the
arrangement is certain to have neither a positive or negative
impact on one or two of the criteria, the commissioner's
decision need not require the submission of data or establish an
objective standard relating to those criteria.
Sec. 22. [62J.2919] [APPEAL.]
After the commissioner has rendered a decision, the
applicant or any other person aggrieved may appeal the decision
to the Minnesota court of appeals within 30 days after receipt
of the commissioner's decision. The appeal is governed by
sections 14.63 to 14.69. The appellate process does not include
a contested case under sections 14.57 to 14.62. The
commissioner's determination, under section 62J.2916,
subdivision 1, of which procedure to use may not be raised as an
issue on appeal.
Sec. 23. [62J.2920] [SUPERVISION AFTER APPROVAL.]
Subdivision 1. [APPROPRIATE SUPERVISION.] The commissioner
shall appropriately supervise, monitor, and regulate approved
arrangements.
Subd. 2. [PROCEDURES.] The commissioner shall review data
submitted periodically by the applicant. The commissioner's
order shall set forth the time schedule for the submission of
data, which shall be at least once a year. The commissioner's
order must identify the data that must be submitted, although
the commissioner may subsequently require the submission of
additional data or alter the time schedule. Upon review of the
data submitted, the commissioner shall notify the applicant of
whether the arrangement is in compliance with the commissioner's
order. If the arrangement is not in compliance with the
commissioner's order, the commissioner shall identify those
respects in which the arrangement does not conform to the
commissioner's order.
An applicant receiving notification that an arrangement is
not in compliance has 30 days in which to respond with
additional data. The response may include a proposal and a time
schedule by which the applicant will bring the arrangement into
compliance with the commissioner's order. If the arrangement is
not in compliance and the commissioner and the applicant cannot
agree to the terms of bringing the arrangement into compliance,
the matter shall be set for a contested case hearing.
The commissioner shall publish notice in the State Register
two years after the date of an order approving an application,
and at two-year intervals thereafter, soliciting comments from
the public concerning the impact that the arrangement has had on
cost, access, and quality. The commissioner may request
additional oral or written information from the applicant or
from any other source.
Subd. 3. [STUDY.] The commissioner shall study and make
recommendations by January 15, 1995, on the appropriate length
and scope of supervision of arrangements approved for exemption
from the antitrust laws.
Sec. 24. [62J.2921] [REVOCATION.]
Subdivision 1. [CONDITIONS.] The commissioner may revoke
approval of a cooperative arrangement only if:
(1) the arrangement is not in substantial compliance with
the terms of the application;
(2) the arrangement is not in substantial compliance with
the conditions of approval;
(3) the arrangement has not and is not likely to
substantially achieve the improvements in cost, access, or
quality identified in the approval order as the basis for the
commissioner's approval of the arrangement; or
(4) the conditions in the marketplace have changed to such
an extent that competition would promote reductions in cost and
improvements in access and quality better than does the
arrangement at issue. In order to revoke on the basis that
conditions in the marketplace have changed, the commissioner's
order must identify specific changes in the marketplace and
articulate why those changes warrant revocation.
Subd. 2. [NOTICE.] The commissioner shall begin a
proceeding to revoke approval by providing written notice to the
applicant describing in detail the basis for the proposed
revocation. Notice of the proceeding must be published in the
State Register and submitted to the Minnesota health care
commission and the applicable regional coordinating boards. The
notice must invite the submission of comments to the
commissioner.
Subd. 3. [PROCEDURE.] A proceeding to revoke an approval
must be conducted as a contested case proceeding upon the
written request of the applicant. Decisions of the commissioner
in a proceeding to revoke approval are subject to judicial
review under sections 14.63 to 14.69.
Subd. 4. [ALTERNATIVES TO REVOCATION PREFERRED.] In
deciding whether to revoke an approval, the commissioner shall
take into account the hardship that the revocation may impose on
the applicant and any potential disruption of the market as a
whole. The commissioner shall not revoke an approval if the
arrangement can be modified, restructured, or regulated so as to
remedy the problem upon which the revocation proceeding is based.
The applicant may submit proposals for alternatives to
revocation. Before approving an alternative to revocation that
involves modifying or restructuring an arrangement, the
commissioner shall publish notice in the State Register that any
person may comment on the proposed modification or restructuring
within 20 days after publication of the notice. The
commissioner shall not approve the modification or restructuring
until the comment period has concluded. An approved modified or
restructured arrangement is subject to appropriate supervision
under section 62J.2920.
Subd. 5. [IMPACT OF REVOCATION.] An applicant that has had
its approval revoked is not required to terminate the
arrangement. The applicant cannot be held liable under state or
federal antitrust law for acts that occurred while the approval
was in effect, except to the extent that the applicant failed to
substantially comply with the terms of its application or failed
to substantially comply with the terms of the approval. The
applicant is fully subject to state and federal antitrust law
after the revocation becomes effective and may be held liable
for acts that occur after the revocation.
Sec. 25. [UNIVERSAL COVERAGE PLAN.]
The health care commission shall develop and submit to the
legislature and the governor by December 15, 1993, a
comprehensive plan that will lead to universal health coverage
for all Minnesotans by January 1, 1997. The plan must include
an implementation plan and time schedule for the coordinated
phasing in of health insurance reforms, including the expansion
of community rating and the phasing out of underwriting
restrictions, changes or expansions in government programs, and
other actions recommended by the commission. The plan must also
include annual targets for expanding coverage to uninsured
persons and populations and periodic evaluations of the progress
being made toward achieving annual targets and universal
coverage.
Sec. 26. [REPEALER.]
Minnesota Statutes 1992, sections 62J.17, subdivisions 4,
5, and 6; and 62J.29, are repealed.
Sec. 27. [EFFECTIVE DATE.]
Sections 1 to 24 are effective the day following final
enactment. Sections 9 to 12 apply retroactively to any major
spending commitment entered into after April 1, 1992, except
that the requirements of section 62J.17, subdivision 4a,
paragraph (a), that a report be submitted within 60 days after a
major spending commitment and that a report include the items
specifically listed are not retroactive.
ARTICLE 7
SMALL EMPLOYER INSURANCE REFORM
Section 1. Minnesota Statutes 1992, section 62L.02,
subdivision 19, is amended to read:
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, due to loss of eligibility for that
coverage, provided that the individual maintains continuous
coverage. For purposes of this clause, eligibility for prior
coverage does not include eligibility for continuation coverage
required under state or federal law;
(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.
Sec. 2. Minnesota Statutes 1992, section 62L.02,
subdivision 26, is amended to read:
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 If an employer has only two eligible
employees and one is the spouse, child, sibling, parent, or
grandparent of the other, the employer must be a Minnesota
domiciled employer and have paid social security or
self-employment tax on behalf of both eligible employees. 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 shall be considered to
be a small employer, with respect to those employers in the
association that employ no fewer than two nor more than 29
eligible employees, 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. its members that do not
qualify as small employers. An association in existence prior
to July 1, 1993, is exempt from this chapter with respect to
small employers that are members as of that date. However, in
providing coverage to new groups after July 1, 1993, the
existing association must comply with all requirements of
chapter 62L. Existing associations must register with the
commissioner of commerce prior to July 1, 1993. If an employer
has employees covered under a trust established in a collective
bargaining agreement under the federal Labor-Management
Relations Act of 1947, United States Code, title 29, section
141, et seq., as amended, those employees are excluded in
determining whether the employer qualifies as a small employer.
Sec. 3. Minnesota Statutes 1992, section 62L.02,
subdivision 27, is amended to read:
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
either of the following conditions are is met:
(i) any portion of the premium or benefits is paid for or
reimbursed by a small employer; and or
(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.
Sec. 4. Minnesota Statutes 1992, section 62L.03,
subdivision 3, is amended to read:
Subd. 3. [MINIMUM PARTICIPATION AND CONTRIBUTION.] (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 and that contributes at least 50 percent toward the
cost of coverage of eligible employees 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
(b) If a small employer does not satisfy the contribution
or participation requirements under this subdivision, a health
carrier may voluntarily issue or renew individual coverage or a
health benefit plan which, except for guaranteed issue, must
fully comply with this chapter. A health carrier that provides
group coverage to a small employer that does not meet the
contribution or participation requirements of this subdivision
must maintain this information in its files for audit by the
commissioner. A health carrier may not offer individual
coverage, purchased through an arrangement between the employer
and the health carrier, to any employee unless the health
carrier also offers coverage, on a guaranteed issue basis, to
all other employees of the same employer.
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.
Sec. 5. Minnesota Statutes 1992, section 62L.03,
subdivision 4, is amended to read:
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. For purposes of this subdivision, "underwriting
restrictions" means any refusal of the health carrier to issue
or renew coverage, any premium rate higher than the lowest rate
charged by the health carrier for the same coverage, or any
preexisting condition limitation or exclusion. 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. A health carrier shall, at the time of first
issuance or renewal of a health benefit plan on or after July 1,
1993, credit against any preexisting condition limitation or
exclusion permitted under this section, the time period prior to
July 1, 1993, during which an eligible employee or dependent was
covered by qualifying existing coverage or qualifying prior
coverage, if the person has maintained continuous coverage.
Sec. 6. Minnesota Statutes 1992, section 62L.04,
subdivision 1, is amended to read:
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 and
contribution 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 offer to 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.
Sec. 7. Minnesota Statutes 1992, section 62L.05,
subdivision 2, is amended to read:
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, as specified in subdivision 10, 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.
Sec. 8. Minnesota Statutes 1992, section 62L.05,
subdivision 3, is amended to read:
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, as specified in subdivision 10, 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 including visits
to an urgent care center but not including visits to a hospital
outpatient department or emergency room, urgent care center, or
similar facility;
(2) $15 per day visit 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.
Sec. 9. Minnesota Statutes 1992, section 62L.05,
subdivision 4, is amended to read:
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:.
Benefits under this subdivision may be provided through the
managed care procedures practiced by health carriers.
(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). The
health care services required to be covered under this clause
must also be covered if rendered in a nonhospital environment,
on the same basis as coverage provided for those same treatments
or services if rendered in a hospital, provided, however, that
this sentence must not be interpreted as expanding the types or
extent of services covered;
(2) physician, chiropractor, 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.
Sec. 10. Minnesota Statutes 1992, section 62L.05,
subdivision 6, is amended to read:
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. A
secondary network must not be used to provide "benefits in
addition" as defined in subdivision 5, except in compliance with
that subdivision.
Sec. 11. Minnesota Statutes 1992, section 62L.08,
subdivision 4, is amended to read:
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 20 percent. Health
carriers that do not do business in the Minneapolis/St. Paul
metropolitan area may request approval for no more than two
geographic regions, and clauses (2) and (3) do not apply to
approval of requests made by those health carriers. A health
carrier may also request approval to establish one additional
geographic region and a separate index rate for premiums for
employees residing outside of Minnesota, and that index rate
must not be more than 30 percent higher than the next highest
index rate. 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.
Sec. 12. Minnesota Statutes 1992, section 62L.08,
subdivision 8, is amended to read:
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. The rates shall not be approved, unless the
commissioner has determined that the rates are reasonable. In
determining reasonableness, the commissioner shall consider the
growth rates applied under section 62J.04, subdivision 1,
paragraph (b), to the calendar year or years that the proposed
premium rate would be in effect, actuarially valid changes in
risk associated with the enrollee population, and actuarially
valid changes as a result of statutory changes in Laws 1992,
chapter 549. For premium rates proposed to go into effect
between July 1, 1993, and December 31, 1993, the pertinent
growth rate is the growth rate applied under section 62J.04,
subdivision 1, paragraph (b), to calendar year 1994. As
provided in section 62A.65, subdivision 3, this subdivision
applies to the individual market, as well as to the small
employer market.
Sec. 13. Minnesota Statutes 1992, section 62L.09,
subdivision 1, is amended to read:
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. The health carrier shall simultaneously
provide a copy of the notice to each small employer covered by a
health benefit plan issued by the health carrier.
Upon making the notification, the health carrier shall not
offer or issue new business in the small employer market. The
health carrier shall renew its current small employer business
due for renewal within 120 days after the date of the
notification but shall not renew any small employer business
more than 120 days after the date of the notification.
A health carrier that elects to cease doing business in the
small employer market shall continue to be governed by this
chapter with respect to any continuing small employer business
conducted by the health carrier.
Sec. 14. Minnesota Statutes 1992, section 62L.11,
subdivision 1, is amended to read:
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. Violations include the failure to pay an
assessment required by section 62L.22, and knowingly and
willfully encouraging a small employer to not meet the
contribution or participation requirements of section 62L.03,
subdivision 3, in order to avoid the requirements of this
chapter. 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.
Sec. 15. [PHASE-IN.]
Subdivision 1. [COMPLIANCE.] No health carrier, as defined
in Minnesota Statutes, section 62L.02, shall renew any health
benefit plan, as defined in Minnesota Statutes, section 62L.02,
except in compliance with this section.
Subd. 2. [PREMIUM ADJUSTMENTS.] (a) Any increase or
decrease in premiums by a health carrier that is caused by
Minnesota Statutes, section 62L.08, and that is greater than 30
percent, is subject to this subdivision. A health carrier shall
determine renewal premiums only as follows:
(1) one-half of that premium increase or decrease may be
charged upon the first renewal of the coverage on or after July
1, 1993; and
(2) the remaining one-half of that premium increase or
decrease may be charged upon the renewal of the coverage one
year after the date of the renewal under clause (1).
(b) For purposes of this subdivision, the premium increase
or decrease is the total premium increase or decrease caused by
section 62L.08 and not just the portion that exceeds 30
percent. This subdivision does not apply to any portion of a
premium increase or decrease that is not caused by section
62L.08.
Sec. 16. [REPEALER.]
Minnesota Statutes 1992, section 62L.09, subdivision 2, is
repealed.
Sec. 17. [EFFECTIVE DATE.]
Sections 1 to 16 are effective July 1, 1993.
ARTICLE 8
INDIVIDUAL MARKET REFORM; MISCELLANEOUS
Section 1. Minnesota Statutes 1992, section 43A.317,
subdivision 5, is amended to read:
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. If an employer has only
two eligible employees and one is the spouse, child, sibling,
parent, or grandparent of the other, the employer must be a
Minnesota domiciled employer and have paid social security or
self-employment tax on behalf of both eligible employees.
(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.
Sec. 2. Minnesota Statutes 1992, section 62A.021,
subdivision 1, is amended to read:
Subdivision 1. [LOSS RATIO STANDARDS.] Notwithstanding
section 62A.02, subdivision 3, relating to loss ratios, a health
care policy form or certificate form policies or certificates
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 policies or certificates 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 policies or
certificates, (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,
calculated on an aggregate basis; and (2) at least 65 percent of
the aggregate amount of premiums earned in the case of
policies each policy form or certificate form 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 Laws 1992, chapter 549, or created on or
after April 23, 1992, are included in the calculation of
incurred claims experience or incurred health care expenses.
The applicable percentage for policy forms policies
and certificate forms certificates issued in the small employer
market, as defined in section 62L.02, increases by one
percentage point on July 1 of each year, beginning on July 1,
1994, until an 80 82 percent loss ratio is reached on July
1, 1998 2000. 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, beginning on July
1, 1994, until a 70 72 percent loss ratio is reached on July
1, 1998 2000. A health carrier that enters a market after July
1, 1993, does not start at the beginning of the phase-in
schedule and must instead comply with the loss ratio
requirements applicable to other health carriers in that market
for each time period. 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 the 1992
regular legislative 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.
Sec. 3. [62A.61] [DISCLOSURE OF METHODS USED BY HEALTH
CARRIERS TO DETERMINE USUAL AND CUSTOMARY FEES.]
(a) A health carrier that bases reimbursement to health
care providers upon a usual and customary fee must maintain in
its office a copy of a description of the methodology used to
calculate fees including at least the following:
(1) the frequency of the determination of usual and
customary fees;
(2) a general description of the methodology used to
determine usual and customary fees; and
(3) the percentile of usual and customary fees that
determines the maximum allowable reimbursement.
(b) A health carrier must provide a copy of the information
described in paragraph (a) to the Minnesota health care
commission, the commissioner of health, or the commissioner of
commerce, upon request.
(c) The commissioner of health or the commissioner of
commerce, as appropriate, may use to enforce this section any
enforcement powers otherwise available to the commissioner with
respect to the health carrier. The appropriate commissioner
shall enforce compliance with a request made under this section
by the Minnesota health care commission, at the request of the
commissioner. The commissioner of health or commerce, as
appropriate, may require health carriers to provide the
information required under this section and may use any powers
granted under other laws relating to the regulation of health
carriers to enforce compliance.
(d) For purposes of this section, "health carrier" has the
meaning given in section 62A.011.
Sec. 4. Minnesota Statutes 1992, section 62A.65, is
amended to read:
62A.65 [INDIVIDUAL MARKET REGULATION.]
Subdivision 1. [APPLICABILITY.] No health carrier, as
defined in chapter 62L section 62A.011, 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, health plan, as defined
in section 62A.011, 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 individual 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 An individual health benefit plan may be subject to
refusal to renew only under the conditions provided in chapter
62L for health benefit plans.
Subd. 3. [PREMIUM RATE RESTRICTIONS.] No individual 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 that the minimum loss ratio applicable
to an individual coverage health plan is as provided in section
62A.021. All provisions rating and premium restrictions 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 individual 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 individual
health benefit plan may be offered, sold, issued, or with
respect to children age 18 or under renewed, to a Minnesota
resident that contains a preexisting condition limitation or
exclusion, unless the limitation or exclusion would be permitted
under chapter 62L, provided that, except for children age 18 or
under, underwriting restrictions may be retained on individual
contracts that are issued without evidence of insurability as a
replacement for prior individual coverage that was sold before
May 17, 1993. 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 under an individual
coverage health plan by any health carrier. Thereafter, the
person must not be subject to any preexisting condition
limitation under an individual health plan by any health
carrier, except an unexpired portion of a limitation under prior
coverage, so long as the individual maintains continuous
coverage.
(b) A health carrier must offer an individual coverage
health plan 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 A health plan issued under this paragraph
must be a qualified plan and 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 health plan
must comply with subdivision 3. The premium rate upon renewal
must comply with subdivision 2. In no event shall the premium
rate exceed 90 percent of the premium charged for comparable
individual coverage by the Minnesota comprehensive health
association.
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. 5. Minnesota Statutes 1992, section 62E.11,
subdivision 12, is amended 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, to the extent
that they exceed the premiums received, 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. 6. [PHASE-IN.]
Subdivision 1. [COMPLIANCE.] No health carrier, as defined
in Minnesota Statutes, section 62A.011, shall renew any
individual health plan, as defined in Minnesota Statutes,
section 62A.011, except in compliance with this section.
Subd. 2. [PREMIUM ADJUSTMENTS.] Any increase or decrease
in premiums by a health carrier that is caused by Minnesota
Statutes, section 62A.65, is subject to the premium adjustments
in this subdivision. A health carrier shall determine renewal
premiums for any coverage under subdivision 1 as follows:
(1) one-half of the premium increase or decrease may be
charged upon the first renewal of the coverage on or after July
1, 1993; and
(2) the remaining half of the premium increase or decrease
may be charged upon the first renewal of the coverage one year
after the date of the renewal under clause (1).
Sec. 7. [EFFECTIVE DATE.]
Sections 1, 2, and 4 to 6 are effective July 1, 1993.
ARTICLE 9
MINNESOTACARE PROGRAM
Section 1. Minnesota Statutes 1992, section 256.9351,
subdivision 3, is amended to read:
Subd. 3. [ELIGIBLE PROVIDERS.] "Eligible providers" means
those health care providers who provide 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.
Sec. 2. Minnesota Statutes 1992, section 256.9352,
subdivision 3, is amended to read:
Subd. 3. [FINANCIAL MANAGEMENT.] 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 for the remainder of the current fiscal year
and for the following two fiscal years. 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 reserve referred to in this
subdivision is appropriated to the commissioner but may only be
used upon approval of the commissioner of finance, if estimated
costs will exceed the forecasted amount of available revenues
after all adjustments authorized under this subdivision have
been made.
By February 1, 1994, the department of human services and
the department of health shall develop a plan to adjust benefit
levels, eligibility guidelines, or other steps necessary to
ensure that expenditures for the MinnesotaCare program are
contained within the two percent provider tax and the one
percent HMO gross premiums tax for the 1996-1997 biennium.
Notwithstanding any law to the contrary, no further enrollment
in MinnesotaCare, and no additional hiring of staff for the
departments shall take place after June 1, 1994, unless a plan
to balance the MinnesotaCare budget for the 1996-1997 biennium
has been passed by the 1994 legislature.
Sec. 3. Minnesota Statutes 1992, section 256.9353, is
amended to read:
Subdivision 1. [COVERED HEALTH 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, adult dental
care services other than preventive 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, day
treatment, partial hospitalization, 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 section.
Subd. 2. [ALCOHOL AND DRUG DEPENDENCY.] Beginning October
July 1, 1992 1993, 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. A local agency or
managed care plan under contract with the department of human
services must place a person in need of chemical dependency
services as provided in Minnesota Rules, parts 9530.6600 to
9530.6660. 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.
Subd. 3. [INPATIENT HOSPITAL SERVICES.] (a) Beginning July
1, 1993, covered health services shall include inpatient
hospital services, including inpatient hospital mental health
services and inpatient hospital and residential chemical
dependency treatment, subject to those limitations necessary to
coordinate the provision of these services with eligibility
under the medical assistance spend-down. 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.
(b) Enrollees shall apply for and cooperate with the
requirements of medical assistance by the last day of the third
month following admission to an inpatient hospital. If an
enrollee fails to apply for medical assistance within this time
period, the enrollee and the enrollee's family shall be
disenrolled from the plan within one calendar month. Enrollees
and enrollees' families disenrolled for not applying for or not
cooperating with medical assistance may not reenroll.
Subd. 4. [HOSPICE.] Beginning July 1, 1993, covered health
services shall include hospice care services.
Subd. 4 5. [EMERGENCY MEDICAL TRANSPORTATION SERVICES.]
Beginning July 1, 1993, covered health services shall include
emergency medical transportation services.
Subd. 5 6. [FEDERAL WAIVERS AND APPROVALS COORDINATION
WITH MEDICAL ASSISTANCE.] 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.
Subd. 6 7. [COPAYMENTS AND COINSURANCE.] The health right
benefit plan shall include the following copayments and
coinsurance requirements:
(1) ten percent of the charges submitted for inpatient
hospital services for adult enrollees not eligible for medical
assistance, subject to an annual out-of-pocket maximum
of $2,000 $1,000 per individual and $3,000 per family;
(2) 50 percent for adult dental services, except for
preventive services;
(3) (2) $3 per prescription for adult enrollees; and
(4) (3) $25 for eyeglasses for adult enrollees.
Enrollees who would be eligible for medical assistance with
a spend-down shall be financially responsible for the
coinsurance amount up to the spend-down limit or the coinsurance
amount, whichever is less, in order to become eligible for the
medical assistance program.
Sec. 4. Minnesota Statutes 1992, section 256.9354,
subdivision 1, is amended to read:
Subdivision 1. [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 185 150 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 MinnesotaCare shall be expanded as
provided in subdivisions 2 to 5, except children who meet the
criteria in this subdivision shall continue to be enrolled
pursuant to this subdivision. Under subdivisions 2 1 to 5,
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 section, a "dependent sibling" means an unmarried child
who is a full-time student under the age of 25 years who is
financially dependent upon a parent. Proof of school enrollment
will be required.
Sec. 5. Minnesota Statutes 1992, section 256.9354,
subdivision 4, is amended to read:
Subd. 4. [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 Children who meet the criteria in subdivision 1 shall
continue to be enrolled pursuant to subdivision 1. Persons who
are eligible under this subdivision or subdivision 2, 3, or 5
must pay a premium as determined under sections 256.9357 and
256.9358, and children eligible under subdivision 1 must pay the
premium required under section 256.9356, subdivision 1.
Individuals and families whose income is greater than the limits
established under section 256.9358 may not enroll in the health
right plan MinnesotaCare. Individuals who initially enroll
in the health right plan MinnesotaCare under the eligibility
criteria in this subdivision remain eligible for the health
right plan MinnesotaCare, 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
MinnesotaCare or medical assistance is maintained.
Sec. 6. Minnesota Statutes 1992, section 256.9354, is
amended by adding a subdivision to read:
Subd. 6. [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL
ASSISTANCE.] Individuals who apply for MinnesotaCare, but who
are potentially eligible for medical assistance shall be allowed
to enroll in MinnesotaCare for a period of 60 days, so long as
the applicant meets all other conditions of eligibility. The
commissioner shall identify and refer such individuals to their
county social service agency. The enrollee must cooperate with
the county social service agency in determining medical
assistance eligibility within the 60-day enrollment period.
Enrollees who do not apply for and cooperate with medical
assistance within the 60-day enrollment period, and their other
family members, shall be disenrolled from the plan within one
calendar month. Persons disenrolled for nonapplication for
medical assistance may not reenroll until they have obtained a
medical assistance eligibility determination for the family
member or members who were referred to the county agency.
Persons disenrolled for noncooperation with medical assistance
may not reenroll until they have cooperated with the county
agency and have obtained a medical assistance eligibility
determination. The commissioner shall redetermine provider
payments made under MinnesotaCare to the appropriate medical
assistance payments for those enrollees who subsequently become
eligible for medical assistance.
Sec. 7. Minnesota Statutes 1992, section 256.9356, is
amended to read:
256.9356 [ENROLLMENT AND PREMIUM FEE FEES AND PAYMENTS.]
Subdivision 1. [ENROLLMENT FEE PREMIUM FEES.] Until
October 1, 1992, An annual enrollment premium fee of $25, not to
exceed $150 per family, $48 is required from eligible persons
for covered health services all MinnesotaCare enrollees eligible
under section 256.9354, subdivision 1.
Subd. 2. [PREMIUM PAYMENTS.] Beginning October 1, 1992,
The commissioner shall require health right plan MinnesotaCare
enrollees eligible under section 256.9354, subdivisions 2 to 5,
to pay a premium based on a sliding scale, as established under
section 256.9357 256.9358. Applicants who are eligible under
section 256.9354, subdivision 1, 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 subdivision 1.
Subd. 3. [ADMINISTRATION AND COMMISSIONER'S DUTIES.]
Enrollment and premium fees Premiums are dedicated to the
commissioner for the health right plan MinnesotaCare. 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 MinnesotaCare for failure
to pay required premiums. Premiums are calculated on a calendar
month basis and may be paid on a monthly or, quarterly, or
annual 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 MinnesotaCare. 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 1992, section 256.9357,
subdivision 1, is amended to read:
Subdivision 1. [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
section 256.9358 only if the family or individual meets the
requirements in subdivisions 2 and 3. 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 MinnesotaCare plan under section 256.9354, and
whose income increases above the limits established in section
256.9358, may continue enrollment and pay the full cost of
coverage.
Sec. 9. [256.9362] [PROVIDER PAYMENT.]
Subdivision 1. [MEDICAL ASSISTANCE RATE TO BE
USED.] Payment to providers under sections 256.9351 to 256.9362
shall be at the same rates and conditions established for
medical assistance, except as provided in subdivisions 2 to 6.
Subd. 2. [PAYMENT OF CERTAIN PROVIDERS.] Services provided
by federally qualified health centers, rural health clinics, and
facilities of the Indian health service shall be paid for
according to the same rates and conditions applicable to the
same service provided by providers that are not federally
qualified health centers, rural health clinics, or facilities of
the Indian health service.
Subd. 3. [INPATIENT HOSPITAL SERVICES.] Inpatient hospital
services provided under section 256.9353, subdivision 3, shall
be paid for as provided in subdivisions 4 to 6.
Subd. 4. [DEFINITION OF MEDICAL ASSISTANCE RATE FOR
INPATIENT HOSPITAL SERVICES.] The "medical assistance rate," as
used in this section to apply to rates for providing inpatient
hospital services, means the rates established under sections
256.9685 to 256.9695 for providing inpatient hospital services
to medical assistance recipients who receive aid to families
with dependent children.
Subd. 5. [ENROLLEES YOUNGER THAN 18.] Payment for
inpatient hospital services provided to MinnesotaCare enrollees
who are younger than 18 years old on the date of admission to
the inpatient hospital shall be at the medical assistance rate.
Subd. 6. [ENROLLEES 18 OR OLDER.] Payment by the
MinnesotaCare program for inpatient hospital services provided
to MinnesotaCare enrollees who are 18 years old or older on the
date of admission to the inpatient hospital must be in
accordance with paragraphs (a) and (b).
(a) If the medical assistance rate minus any copayment
required under section 256.9353, subdivision 6, is less than or
equal to the amount remaining in the enrollee's benefit limit
under section 256.9353, subdivision 3, payment must be the
medical assistance rate minus any copayment required under
section 256.9353, subdivision 6. The hospital must not seek
payment from the enrollee in addition to the copayment. The
MinnesotaCare payment plus the copayment must be treated as
payment in full.
(b) If the medical assistance rate minus any copayment
required under section 256.9353, subdivision 6, is greater than
the amount remaining in the enrollee's benefit limit under
section 256.9353, subdivision 3, payment must be the lesser of:
(1) the amount remaining in the enrollee's benefit limit;
or
(2) charges submitted for the inpatient hospital services
less any copayment established under section 256.9353,
subdivision 6.
The hospital may seek payment from the enrollee for the
amount by which usual and customary charges exceed the payment
under this paragraph.
Sec. 10. [256.9363] [MANAGED CARE.]
Subdivision 1. [SELECTION OF VENDORS.] In order to contain
costs, the commissioner of human services shall select vendors
of medical care who can provide the most economical care
consistent with high medical standards and shall, where
possible, contract with organizations on a prepaid capitation
basis to provide these services. The commissioner shall
consider proposals by counties and vendors for managed care
plans which may include: prepaid capitation programs,
competitive bidding programs, or other vendor payment mechanisms
designed to provide services in an economical manner or to
control utilization, with safeguards to ensure that necessary
services are provided. Managed care plans may include
integrated service networks as defined in section 62N.02.
Subd. 2. [GEOGRAPHIC AREA.] The commissioner shall
designate the geographic areas in which eligible individuals
must receive services through managed care plans.
Subd. 3. [LIMITATION OF CHOICE.] Persons enrolled in the
MinnesotaCare program who reside in the designated geographic
areas must enroll in a managed care plan to receive their health
care services. Enrollees must receive their health care
services from health care providers who are part of the managed
care plan provider network, unless authorized by the managed
care plan, in cases of medical emergency, or when otherwise
required by law or by contract.
If only one managed care option is available in a
geographic area, the managed care plan may require that
enrollees designate a primary care provider from which to
receive their health care. Enrollees will be permitted to
change their designated primary care provider upon request to
the managed care plan. Requests to change primary care
providers may be limited to once annually. If more than one
managed care plan is offered in a geographic area, enrollees
will be enrolled in a managed care plan for up to one year from
the date of enrollment, but shall have the right to change to
another managed care plan once within the first year of initial
enrollment. Enrollees may also change to another managed care
plan during an annual 30 day open enrollment period. Enrollees
shall be notified of the opportunity to change to another
managed care plan before the start of each annual open
enrollment period.
Enrollees may change managed care plans or primary care
providers at other than the above designated times for cause as
determined through an appeal pursuant to section 256.045.
Subd. 4. [EXEMPTIONS TO LIMITATIONS ON CHOICE.] All
contracts between the department of human services and prepaid
health plans or integrated service networks to serve medical
assistance, general assistance medical care, and MinnesotaCare
recipients must comply with the requirements of United States
Code, title 42, section 1396a (a) (23) (B), notwithstanding any
waivers authorized by the United States Department of Health and
Human Services pursuant to United States Code, title 42, section
1315.
Subd. 5. [ELIGIBILITY FOR OTHER STATE
PROGRAMS.] MinnesotaCare enrollees who become eligible for
medical assistance or general assistance medical care will
remain in the same managed care plan if the managed care plan
has a contract for that population. Contracts between the
department of human services and managed care plans must include
MinnesotaCare, and medical assistance and may also include
general assistance medical care.
Subd. 6. [COPAYMENTS AND BENEFIT LIMITS.] Enrollees are
responsible for all copayments in section 256.9353, subdivision
6, and shall pay copayments to the managed care plan or to its
participating providers. The enrollee is also responsible for
payment of inpatient hospital charges which exceed the
MinnesotaCare benefit limit to the managed care plan or its
participating providers.
Subd. 7. [MANAGED CARE PLAN VENDOR REQUIREMENTS.] The
following requirements apply to all counties or vendors who
contract with the department of human services to serve
MinnesotaCare recipients. Managed care plan contractors:
(1) shall authorize and arrange for the provision of the
full range of services listed in section 256.9353 in order to
ensure appropriate health care is delivered to enrollees;
(2) shall accept the prospective, per capita payment or
other contractually defined payment from the commissioner in
return for the provision and coordination of covered health care
services for eligible individuals enrolled in the program;
(3) may contract with other health care and social service
practitioners to provide services to enrollees;
(4) shall provide for an enrollee grievance process as
required by the commissioner and set forth in the contract with
the department;
(5) shall retain all revenue from enrollee copayments;
(6) shall accept all eligible MinnesotaCare enrollees,
without regard to health status or previous utilization of
health services;
(7) shall demonstrate capacity to accept financial risk
according to requirements specified in the contract with the
department. A health maintenance organization licensed under
chapter 62D, or a nonprofit health plan licensed under chapter
62C, is not required to demonstrate financial risk capacity,
beyond that which is required to comply with chapters 62C and
62D;
(8) shall submit information as required by the
commissioner, including data required for assessing enrollee
satisfaction, quality of care, cost, and utilization of
services; and
(9) shall submit to the commissioner claims in the format
specified by the commissioner of human services for all hospital
services provided to enrollees for the purpose of determining
whether enrollees meet medical assistance spenddown requirements
and shall provide to the enrollee, upon the enrollee's request,
information on the cost of services provided to the enrollee by
the managed care plan for the purpose of establishing whether
the enrollee has met medical assistance spenddown requirements.
Subd. 8. [CHEMICAL DEPENDENCY ASSESSMENTS.] The managed
care plan shall be responsible for assessing the need and
placement for chemical dependency services according to criteria
set forth in Minnesota Rules, parts 9530.6600 to 9530.6660.
Subd. 9. [RATE SETTING.] Rates will be prospective, per
capita, where possible. The commissioner shall consult with an
independent actuary to determine appropriate rates.
Subd. 10. [CHILDHOOD IMMUNIZATION.] Each managed care plan
contracting with the department of human services under this
section shall collaborate with the local public health agencies
to ensure childhood immunization to all enrolled families with
children. As part of this collaboration the plan must provide
the families with a recommended immunization schedule.
Sec. 11. Minnesota Statutes 1992, section 256B.057,
subdivision 1, is amended to read:
Subdivision 1. [PREGNANT WOMEN AND INFANTS.] An infant
less than one year of age or a pregnant woman who has written
verification of a positive pregnancy test from a physician or
licensed registered nurse, is eligible for medical assistance if
countable family income is equal to or less than 185 275 percent
of the federal poverty guideline for the same family size. For
purposes of this subdivision, "countable family income" means
the amount of income considered available using the methodology
of the AFDC program, except for the earned income disregard and
employment deductions. An amount equal to the amount of earned
income exceeding 275 percent of the federal poverty guideline,
up to a maximum of the combined total of 185 percent of the
federal poverty guideline plus the earned income disregards and
deductions of the AFDC program will be deducted for pregnant
women and infants less than one year of age. Eligibility for a
pregnant woman or infant less than one year of age under this
subdivision must be determined without regard to asset standards
established in section 256B.056, subdivision 3.
An infant born on or after January 1, 1991, to a woman who
was eligible for and receiving medical assistance on the date of
the child's birth shall continue to be eligible for medical
assistance without redetermination until the child's first
birthday, as long as the child remains in the woman's household.
Sec. 12. Minnesota Statutes 1992, section 256B.057, is
amended by adding a subdivision to read:
Subd. 1a. [PREMIUMS.] Women and infants who are eligible
under subdivision 1 and whose countable family income is equal
to or greater than 185 percent of the federal poverty guideline
for the same family size shall be required to pay a premium for
medical assistance coverage based on a sliding scale as
established under section 256.9358.
Sec. 13. Minnesota Statutes 1992, section 256B.057,
subdivision 2a, is amended to read:
Subd. 2a. [NO ASSET TEST FOR CHILDREN AND THEIR PARENTS.]
Eligibility for medical assistance for a person under age 21,
and the person's parents who are eligible under section
256B.055, subdivision 3, and who live in the same household as
the person eligible under age 21, must be determined without
regard to asset standards established in section 256B.056.
Sec. 14. Minnesota Statutes 1992, section 256B.0644, is
amended to read:
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 MinnesotaCare 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, for
health insurance plans offered to local statutory or home rule
charter city, county, and school district employees, 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. The
limitations on insurance plans offered to local government
employees shall not be applicable in geographic areas where
provider participation is limited by managed care contracts with
the department of human services. 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 MinnesotaCare
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. 15. Minnesota Statutes 1992, section 256D.03,
subdivision 3, is amended to read:
Subd. 3. [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.]
(a) General assistance medical care may be paid for any person
who is not eligible for medical assistance under chapter 256B,
including eligibility for medical assistance based on a
spend-down of excess income according to section 256B.056,
subdivision 5, and:
(1) who is receiving assistance under section 256D.05 or
256D.051; or
(2)(i) who is a resident of Minnesota; and whose equity in
assets is not in excess of $1,000 per assistance unit. No asset
test shall be applied to children and their parents living in
the same household. Exempt assets, the reduction of excess
assets, and the waiver of excess assets must conform to the
medical assistance program in chapter 256B, with the following
exception: the maximum amount of undistributed funds in a trust
that could be distributed to or on behalf of the beneficiary by
the trustee, assuming the full exercise of the trustee's
discretion under the terms of the trust, must be applied toward
the asset maximum; and
(ii) who has countable income not in excess of the
assistance standards established in section 256B.056,
subdivision 4, or whose excess income is spent down pursuant to
section 256B.056, subdivision 5, using a six-month budget
period, except that a one-month budget period must be used for
recipients residing in a long-term care facility. The method
for calculating earned income disregards and deductions for a
person who resides with a dependent child under age 21 shall be
as specified in section 256.74, subdivision 1. However, if a
disregard of $30 and one-third of the remainder described in
section 256.74, subdivision 1, clause (4), has been applied to
the wage earner's income, the disregard shall not be applied
again until the wage earner's income has not been considered in
an eligibility determination for general assistance, general
assistance medical care, medical assistance, or aid to families
with dependent children for 12 consecutive months. The earned
income and work expense deductions for a person who does not
reside with a dependent child under age 21 shall be the same as
the method used to determine eligibility for a person under
section 256D.06, subdivision 1, except the disregard of the
first $50 of earned income is not allowed; or
(3) who would be eligible for medical assistance except
that the person resides in a facility that is determined by the
commissioner or the federal health care financing administration
to be an institution for mental diseases.
(b) Eligibility is available for the month of application,
and for three months prior to application if the person was
eligible in those prior months. A redetermination of
eligibility must occur every 12 months.
(c) General assistance medical care is not available for a
person in a correctional facility unless the person is detained
by law for less than one year in a county correctional or
detention facility as a person accused or convicted of a crime,
or admitted as an inpatient to a hospital on a criminal hold
order, and the person is a recipient of general assistance
medical care at the time the person is detained by law or
admitted on a criminal hold order and as long as the person
continues to meet other eligibility requirements of this
subdivision.
(d) General assistance medical care is not available for
applicants or recipients who do not cooperate with the county
agency to meet the requirements of medical assistance.
(e) In determining the amount of assets of an individual,
there shall be included any asset or interest in an asset,
including an asset excluded under paragraph (a), that was given
away, sold, or disposed of for less than fair market value
within the 30 months preceding application for general
assistance medical care or during the period of eligibility.
Any transfer described in this paragraph shall be presumed to
have been for the purpose of establishing eligibility for
general assistance medical care, unless the individual furnishes
convincing evidence to establish that the transaction was
exclusively for another purpose. For purposes of this
paragraph, the value of the asset or interest shall be the fair
market value at the time it was given away, sold, or disposed
of, less the amount of compensation received. For any
uncompensated transfer, the number of months of ineligibility,
including partial months, shall be calculated by dividing the
uncompensated transfer amount by the average monthly per person
payment made by the medical assistance program to skilled
nursing facilities for the previous calendar year. The
individual shall remain ineligible until this fixed period has
expired. The period of ineligibility may exceed 30 months, and
a reapplication for benefits after 30 months from the date of
the transfer shall not result in eligibility unless and until
the period of ineligibility has expired. The period of
ineligibility begins in the month the transfer was reported to
the county agency, or if the transfer was not reported, the
month in which the county agency discovered the transfer,
whichever comes first. For applicants, the period of
ineligibility begins on the date of the first approved
application.
Sec. 16. [DEMONSTRATION WAIVER.]
The commissioner of human services shall seek a
demonstration waiver or otherwise obtain federal approval to:
(1) allow the state to charge premiums as described in section
12; (2) increase the income standard to 275 percent of the
federal poverty guideline; and (3) continue eligibility without
redetermination for infants 13 to 24 months of age.
Sec. 17. [MINNESOTACARE PROGRAM STUDY.]
The commissioner of human services shall examine the impact
the MinnesotaCare program is having on the increase in medical
assistance enrollment and costs. As part of this study, the
commissioner shall determine whether other factors unrelated to
the MinnesotaCare program may be contributing to the increase in
medical assistance enrollment. The commissioner shall also make
recommendations on necessary adjustments in revenues or
expenditures to ensure that the health care access fund remains
solvent for the 1996-1997 biennium. The commissioner shall
present findings and recommendations to the legislative
oversight commission by November 15, 1993.
Sec. 18. [EFFECTIVE DATE.]
Section 12 is effective July 1, 1993, or after the
effective date of the waiver referred to in section 16,
whichever is later. Sections 10 and 16 are effective the day
following final enactment. Section 10, subdivision 4, is
effective for all contracts entered into or renewed on or after
the day following final enactment. Section 14 is effective for
health insurance contracts negotiated after November 1, 1993.
ARTICLE 10
RURAL HEALTH INITIATIVE
Section 1. Minnesota Statutes 1992, 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 of each
fiscal year for grants awarded for the that fiscal year
beginning the following July 1. A grant may be awarded upon
signing of a grant contract.
(b) 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 $37,500 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.
(g) The commissioner may adopt rules to implement this
section.
Sec. 2. Minnesota Statutes 1992, section 144.1484,
subdivision 1, is amended to read:
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 and located more than 25 miles from a like
hospital currently providing acute short-term services; (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 40 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. demonstrate to the commissioner that it has obtained
local support for the hospital and that any state support
awarded under this program will not be used to supplant local
support for the hospital. The commissioner shall review audited
financial statements of the hospital to assess the extent of
local support. Evidence of local support may include bonds
issued by a local government entity such as a city, county, or
hospital district for the purpose of financing hospital
projects; and loans, grants, or donations to the hospital from
local government entities, private organizations, or
individuals. The commissioner shall determine the amount of the
award to be given to each eligible hospital based on the
hospital's financial need and the total amount of funding
available.
Sec. 3. Minnesota Statutes 1992, section 144.1484,
subdivision 2, is amended to read:
Subd. 2. [GRANTS TO AT-RISK RURAL HOSPITALS TO OFFSET THE
IMPACT OF THE HOSPITAL TAX.] (a) 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
section 295.52. 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.
(b) At a minimum the hospital must demonstrate that:
(1) it has had a net margin of minus ten percent or below
in at least one of the last two years or a net margin of less
than zero percent in at least three of the last four years. For
purposes of this subdivision, "net margin" means the ratio of
net income from all hospital sources to total revenues generated
by the hospital;
(2) it has had a negative cash flow in at least three of
the last four years. For purposes of this subdivision, "cash
flow" means the total of net income plus depreciation; and
(3) its fund balance has declined by at least 25 percent
over the last two years, and its fund balance at the end of its
last fiscal year was equal to or less than its accumulated net
loss during the last two years. For purposes of this
subdivision, "fund balance" means the excess of assets of the
hospital's fund over its liabilities and reserves.
(c) A hospital seeking a grant shall submit the following
with its application:
(1) a statement of the projected dollar amount of tax
liability for the current fiscal year, projected monthly
disbursements, and projected net patient revenue base for the
current fiscal year, broken down by payer categories including
Medicare, medical assistance, MinnesotaCare, general assistance
medical care, and others. The figures must be certified by the
hospital administrator;
(2) a statement of all rate increases, listing the date and
percentage of each increase during the last three years and the
date and percentage of any increases for the current fiscal
year. The statement must be certified by the hospital
administrator and must include a narrative explaining whether or
not the rate increase incorporates a pass-through of the
hospital tax;
(3) a statement certified by the chair or equivalent of the
hospital board, and by an independent auditor, that the hospital
will close within the next 12 months as a result of the hospital
tax unless it receives a grant; and
(4) a statement certified by the chair or equivalent of the
hospital board that the hospital will not close for financial
reasons within the next 12 months if it receives a grant.
The amount of the grant must not exceed the amount of the
tax the hospital would pay under section 295.52, based on the
previous year's hospital revenues. A hospital that closes
within 12 months after receiving a grant under this subdivision
must refund the amount of the grant to the commissioner of
health.
ARTICLE 11
HEALTH PROFESSIONAL EDUCATION
Section 1. Minnesota Statutes 1992, section 124C.62, is
amended to read:
124C.62 [SUMMER HEALTH CARE INTERNS.]
Subdivision 1. [SUMMER INTERNSHIPS.] The commissioner of
education, through a contract with a nonprofit organization as
required by subdivision 4, shall award grants to hospitals and
clinics to establish a summer health care intern program for
pupils who intend to complete high school graduation
requirements and who are between their junior and senior year of
high school. The purpose of the program is to expose interested
high school pupils to various careers within the health care
profession.
Subd. 2. [CRITERIA.] (a) The commissioner, with the advice
of the Minnesota Medical Association and the Minnesota Hospital
Association, through the organization under contract, shall
establish criteria for awarding award grants to hospitals and
clinics. that agree to:
(b) The criteria must include, among other things:
(1) the kinds of provide summer health care interns with
formal exposure to the health care profession a hospital or
clinic can provide to a pupil;
(2) the need for health care professionals in a particular
area; and provide an orientation for summer health care interns;
(3) the willingness of a hospital or clinic to pay one-half
the costs of employing a pupil summer health care intern, based
on an overall hourly wage that is at least the minimum wage but
does not exceed $6 an hour; and
(4) interview and hire pupils for a minimum of six weeks
and a maximum of 12 weeks.
(b) In order to be eligible to be hired as a summer health
intern by a hospital or clinic, a pupil must:
(1) intend to complete high school graduation requirements
and be between the junior and senior year of high school;
(2) be from a school district in proximity to the facility;
and
(3) provide the facility with a letter of recommendation
from a health occupations or science educator.
(c) Hospitals and clinics awarded grants may employ pupils
as summer health care interns beginning on or after June 15,
1993, if they agree to pay the intern, during the period before
disbursement of state grant money, with money designated as the
facility's 50 percent contribution towards internship costs.
(c) The Minnesota Medical Association and the Minnesota
Hospital Association must provide the commissioner, by January
31, 1993, with a list of hospitals and clinics willing to
participate in the program and what provisions those hospitals
or clinics will make to ensure a pupil's adequate exposure to
the health care profession, and indicate whether a hospital or
clinic is willing to pay one-half the costs of employing a pupil.
Subd. 3. [GRANTS.] The commissioner, through the
organization under contract, shall award grants to hospitals and
clinics meeting the requirements of subdivision 2. The grants
must be used to pay one-half of the costs of employing a pupil
in a hospital or clinic during the course of the program. No
more than five pupils may be selected from any one high school
to participate in the program and no more than one-half of the
number of pupils selected may be from the seven-county
metropolitan area.
Subd. 4. [CONTRACT.] The commissioner shall contract with
a statewide, nonprofit organization representing facilities at
which summer health care interns will serve, to administer the
grant program established by this section. The organization
awarded the grant shall provide the commissioner with any
information needed by the commissioner to evaluate the program,
in the form and at the times specified by the commissioner.
Sec. 2. Minnesota Statutes 1992, section 136A.1355,
subdivision 1, is amended to read:
Subdivision 1. [CREATION OF ACCOUNT.] A rural physician
education account is established in the health care access
fund. The higher education coordinating board shall use money
from the account to establish a loan forgiveness program for
medical students agreeing to practice in designated rural areas,
as defined by the board.
Sec. 3. Minnesota Statutes 1992, 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 1993
through June 30, 1995, the higher education coordinating board
may accept up to eight four applicants who are fourth year
medical students, three applicants who are pediatric residents,
and four applicants who are family practice residents, and one
applicant who is an internal medicine resident, per fiscal year
for participation in the loan forgiveness program. If the
higher education coordinating board does not receive enough
applicants per fiscal year to fill the number of residents in
the specific areas of practice, the resident applicants may be
from any area of practice. The eight resident applicants can be
in any year of training. 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. 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. 4. Minnesota Statutes 1992, section 136A.1355,
subdivision 4, is amended to read:
Subd. 4. [PENALTY FOR NONFULFILLMENT.] If a participant
does not fulfill the required three-year minimum commitment of
service in a designated rural area, the higher education
coordinating board shall collect from the participant the amount
paid by the board under the loan forgiveness program. The
higher education coordinating board shall deposit the money
collected in the rural physician education account established
in subdivision 1. The board shall allow waivers of all or part
of the money owed the board if emergency circumstances prevented
fulfillment of the three-year service commitment.
Sec. 5. Minnesota Statutes 1992, section 136A.1355, is
amended by adding a subdivision to read:
Subd. 5. [LOAN FORGIVENESS; UNDERSERVED URBAN
COMMUNITIES.] For the period July 1, 1993 to June 30, 1995, the
higher education coordinating board may accept up to four
applicants who are either fourth year medical students, or
residents in family practice, pediatrics, or internal medicine
per fiscal year for participation in the urban primary care
physician loan forgiveness program. The resident applicants may
be in any year of residency training. 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 underserved urban 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.
Participants who move their practice from one designated
underserved urban community to another remain eligible for loan
repayment.
Sec. 6. Minnesota Statutes 1992, section 136A.1356,
subdivision 2, is amended to read:
Subd. 2. [CREATION OF ACCOUNT.] A midlevel practitioner
education account is established in the health care access
fund. 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.
Sec. 7. Minnesota Statutes 1992, section 136A.1356,
subdivision 5, is amended to read:
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 established in subdivision 2. 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. 8. Minnesota Statutes 1992, section 136A.1357, is
amended to read:
136A.1357 [EDUCATION ACCOUNT FOR NURSES WHO AGREE TO
PRACTICE IN A NURSING HOME OR INTERMEDIATE CARE FACILITY FOR
PERSONS WITH MENTAL RETARDATION OR RELATED CONDITIONS.]
Subdivision 1. [CREATION OF THE ACCOUNT.] An education
account in the general health care access fund is established
for a loan forgiveness program for nurses who agree to practice
nursing in a nursing home or intermediate care facility for
persons with mental retardation or related conditions. 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 completion of a nursing education program.
Before completing the first year of study completion of the
program, 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 or
intermediate care facility for persons with mental retardation
or related conditions.
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 or intermediate care facility for
persons with mental retardation or related conditions, 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 or intermediate care facility for persons
with mental retardation or related conditions 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 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 board shall deposit the collections in
the general health care access 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. 9. [136A.1358] [RURAL CLINICAL SITES FOR NURSE
PRACTITIONER EDUCATION.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"rural" means any area of the state outside of the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington,
and outside the cities of Duluth, Mankato, Moorhead, Rochester,
and St. Cloud.
Subd. 2. [ESTABLISHMENT.] A grant program is established
under the authority of the higher education coordinating board
to provide grants to colleges or schools of nursing located in
Minnesota that operate programs of study designed to prepare
registered nurses for advanced practice as nurse practitioners.
Subd. 3. [PROGRAM GOALS.] Colleges and schools of nursing
shall use grants received to provide rural students with
increased access to programs of study for nurse practitioners,
by:
(1) developing rural clinical sites;
(2) allowing students to remain in their rural communities
for clinical rotations; and
(3) providing faculty to supervise students at rural
clinical sites.
The overall goal of the grant program is to increase the number
of graduates of nurse practitioner programs who work in rural
areas of the state.
Subd. 4. [RESPONSIBILITY OF NURSING PROGRAMS.] (a)
Colleges or schools of nursing interested in participating in
the grant program must apply to the higher education
coordinating board, according to the policies established by the
board. Applications submitted by colleges or schools of nursing
must include a detailed proposal for achieving the goals listed
in subdivision 3, a plan for encouraging sufficient applications
from rural applicants to meet the requirements of paragraph (b),
and any additional information required by the board.
(b) Each college or school of nursing, as a condition of
accepting a grant, shall make at least 25 percent of the
openings in each nurse practitioner entering class available to
applicants who live in rural areas and desire to practice as a
nurse practitioner in rural areas. This requirement is
effective beginning with the fall 1994 entering class and
remains in effect for each biennium thereafter for which a
college or school of nursing is awarded a grant renewal. The
board may exempt colleges or schools of nursing from this
requirement if the college or school can demonstrate, to the
satisfaction of the board, that the nurse practitioner program
did not receive enough applications or acceptance letters from
qualified rural applicants to meet the requirement.
(c) Colleges or schools of nursing participating in the
grant program shall report to the higher education coordinating
board on their program activity as requested by the board.
Subd. 5. [RESPONSIBILITIES OF THE HIGHER EDUCATION
COORDINATING BOARD.] (a) The board shall establish an
application process for interested colleges and schools of
nursing, and shall require colleges and schools of nursing to
submit grant applications to the board by November 1, 1993. The
board may award up to two grants for the biennium ending June
30, 1995.
(b) In selecting grant recipients, the board shall consider:
(1) the likelihood that an applicant's grant proposal will
be successful in achieving the program goals listed in
subdivision 3;
(2) the potential effectiveness of the college's or
school's plan to encourage applications from rural applicants;
and
(3) the academic quality of the college's or school's
program of education for nurse practitioners.
(c) The board shall notify grant recipients of an award by
December 1, 1993, and shall disburse the grants by January 1,
1994. The board may renew grants if a college or school of
nursing demonstrates that satisfactory progress has been made
during the past biennium toward achieving the goals listed in
subdivision 3.
Sec. 10. Minnesota Statutes 1992, section 137.38,
subdivision 2, is amended to read:
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. Primary care physicians include family practitioners,
general pediatricians, and general internists.
Sec. 11. Minnesota Statutes 1992, section 137.38,
subdivision 3, is amended to read:
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
and urban Minnesota that are medically underserved.
Sec. 12. Minnesota Statutes 1992, section 137.38,
subdivision 4, is amended to read:
Subd. 4. [GRANTS.] The board of regents is requested to
seek grants from private foundations and other nonstate sources,
including community provider organizations, for the medical
school initiatives outlined in sections 137.38 to 137.40.
Sec. 13. Minnesota Statutes 1992, section 137.39,
subdivision 2, is amended to read:
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, and to address other primary care curriculum issues
such as public health, preventive medicine, and health care
delivery. The medical school is requested to also support
premedical school educational initiatives that provide students
with greater exposure to primary care physicians and practices.
Sec. 14. Minnesota Statutes 1992, section 137.39,
subdivision 3, is amended to read:
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. 15. Minnesota Statutes 1992, section 137.40,
subdivision 3, is amended to read:
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, and which enhance primary care skills.
Sec. 16. [144.1487] [LOAN REPAYMENT PROGRAM FOR HEALTH
PROFESSIONALS.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of sections
144.1487 to 144.1492, the following definitions apply.
(b) "Board" means the higher education coordinating board.
(c) "Health professional shortage area" means an area
designated as such by the federal secretary of health and human
services, as provided under Code of Federal Regulations, title
42, part 5, and United States Code, title 42, section 254E.
Subd. 2. [ESTABLISHMENT AND PURPOSE.] The commissioner
shall establish a National Health Services Corps state loan
repayment program authorized by section 388I of the Public
Health Service Act, United States Code, title 42, section
254q-1, as amended by Public Law Number 101-597. The purpose of
the program is to assist communities with the recruitment and
retention of health professionals in federally designated health
professional shortage areas.
Sec. 17. [144.1488] [PROGRAM ADMINISTRATION AND
ELIGIBILITY.]
Subdivision 1. [DUTIES OF THE COMMISSIONER OF HEALTH.] The
commissioner shall administer the state loan repayment program.
The commissioner shall:
(1) ensure that federal funds are used in accordance with
program requirements established by the federal National Health
Services Corps;
(2) notify potentially eligible loan repayment sites about
the program;
(3) develop and disseminate application materials to sites;
(4) review and rank applications using the scoring criteria
approved by the federal department of health and human services
as part of the Minnesota department of health's National Health
Services Corps state loan repayment program application;
(5) select sites that qualify for loan repayment based upon
the availability of federal and state funding;
(6) provide the higher education coordinating board with a
list of qualifying sites; and
(7) carry out other activities necessary to implement and
administer sections 144.1487 to 144.1492.
The commissioner shall enter into an interagency agreement
with the higher education coordinating board to carry out the
duties assigned to the board under sections 144.1487 to 144.1492.
Subd. 2. [DUTIES OF THE HIGHER EDUCATION COORDINATING
BOARD.] The higher education coordinating board, through an
interagency agreement with the commissioner of health, shall:
(1) verify the eligibility of program participants;
(2) sign a contract with each participant that specifies
the obligations of the participant and the state;
(3) arrange for the payment of qualifying educational loans
for program participants;
(4) monitor the obligated service of program participants;
(5) waive or suspend service or payment obligations of
participants in appropriate situations;
(6) place participants who fail to meet their obligations
in default;
(7) enforce penalties for default; and
(8) report regularly to the commissioner.
Subd. 3. [ELIGIBLE LOAN REPAYMENT SITES.] Private,
nonprofit, and public entities located in and providing health
care services in federally designated primary care health
professional shortage areas are eligible to apply for the
program. The commissioner shall develop a list of Minnesota
health professional shortage areas in greatest need of health
care professionals and shall select loan repayment sites from
that list. The commissioner shall ensure, to the greatest
extent possible, that the geographic distribution of sites
within the state reflects the percentage of the population
living in rural and urban health professional shortage areas.
Subd. 4. [ELIGIBLE HEALTH PROFESSIONALS.] (a) To be
eligible to apply to the higher education coordinating board for
the loan repayment program, health professionals must be
citizens or nationals of the United States, must not have any
unserved obligations for service to a federal, state, or local
government, or other entity, and must be ready to begin
full-time clinical practice upon signing a contract for
obligated service.
(b) In selecting physicians for participation, the board
shall give priority to physicians who are board certified or
have completed a residency in family practice, osteopathic
general practice, obstetrics and gynecology, internal medicine,
or pediatrics. A physician selected for participation is not
eligible for loan repayment until the physician has an
employment agreement or contract with an eligible loan repayment
site and has signed a contract for obligated service with the
higher education coordinating board.
Sec. 18. [144.1489] [OBLIGATIONS OF PARTICIPANTS.]
Subdivision 1. [CONTRACT REQUIRED.] Before starting the
period of obligated service, a participant must sign a contract
with the higher education coordinating board that specifies the
obligations of the participant and the board.
Subd. 2. [OBLIGATED SERVICE.] A participant shall agree in
the contract to fulfill the period of obligated service by
providing primary health care services in full-time clinical
practice. The service must be provided in a private, nonprofit,
or public entity that is located in and providing services to a
federally designated health professional shortage area and that
has been designated as an eligible site by the commissioner
under the state loan repayment program.
Subd. 3. [LENGTH OF SERVICE.] Participants must agree to
provide obligated service for a minimum of two years. A
participant may extend a contract to provide obligated service
for a third year, subject to board approval and the availability
of federal and state funding.
Subd. 4. [AFFIDAVIT OF SERVICE REQUIRED.] Within 30 days
of the start of obligated service, and by February 1 of each
succeeding calendar year, a participant shall submit an
affidavit to the board stating that the participant is providing
the obligated service and which is signed by a representative of
the organizational entity in which the service is provided.
Participants must provide written notice to the board within 30
days of: a change in name or address, a decision not to fulfill
a service obligation, or cessation of clinical practice.
Subd. 5. [TAX RESPONSIBILITY.] The participant is
responsible for reporting on federal income tax returns any
amount paid by the state on designated loans, if required to do
so under federal law.
Subd. 6. [NONDISCRIMINATION REQUIREMENTS.] Participants
are prohibited from charging a higher rate for professional
services than the usual and customary rate prevailing in the
area where the services are provided. If a patient is unable to
pay this charge, a participant shall charge the patient a
reduced rate or not charge the patient. Participants must agree
not to discriminate on the basis of ability to pay or status as
a Medicare or medical assistance enrollee. Participants must
agree to accept assignment under the Medicare program and to
serve as an enrolled provider under medical assistance.
Sec. 19. [144.1490] [RESPONSIBILITIES OF THE LOAN
REPAYMENT PROGRAM.]
Subdivision 1. [LOAN REPAYMENT.] Subject to the
availability of federal and state funds for the loan repayment
program, the higher education coordinating board shall pay all
or part of the qualifying education loans up to $20,000 annually
for each primary care physician participant that fulfills the
required service obligation. For purposes of this provision,
"qualifying educational loans" are government and commercial
loans for actual costs paid for tuition, reasonable education
expenses, and reasonable living expenses related to the graduate
or undergraduate education of a health care professional.
Subd. 2. [PROCEDURE FOR LOAN REPAYMENT.] Program
participants, at the time of signing a contract, shall designate
the qualifying loan or loans for which the higher education
coordinating board is to make payments. The participant shall
submit to the board all payment books for the designated loan or
loans or all monthly billings for the designated loan or loans
within five days of receipt. The board shall make payments in
accordance with the terms and conditions of the designated
loans, in an amount not to exceed $20,000 when annualized. If
the amount paid by the board is less than $20,000 during a
12-month period, the board shall pay during the 12th month an
additional amount towards a loan or loans designated by the
participant, to bring the total paid to $20,000. The total
amount paid by the board must not exceed the amount of principal
and accrued interest of the designated loans.
Sec. 20. [144.1491] [FAILURE TO COMPLETE OBLIGATED
SERVICE.]
Subdivision 1. [PENALTIES FOR BREACH OF CONTRACT.] A
program participant who fails to complete two years of obligated
service shall repay the amount paid, as well as a financial
penalty based upon the length of the service obligation not
fulfilled. If the participant has served at least one year, the
financial penalty is the number of unserved months multiplied by
$1,000. If the participant has served less than one year, the
financial penalty is the total number of obligated months
multiplied by $1,000.
Subd. 2. [SUSPENSION OR WAIVER OF OBLIGATION.] Payment or
service obligations cancel in the event of a participant's
death. The board may waive or suspend payment or service
obligations in case of total and permanent disability or
long-term temporary disability lasting for more than two years.
The board shall evaluate all other requests for suspension or
waivers on a case-by-case basis.
Sec. 21. [NURSE PRACTITIONER PROMOTION TEAMS.]
The commissioner of health, through the office of rural
health, shall establish nurse practitioner promotion teams,
consisting of one nurse practitioner and one physician who are
practicing jointly. The promotion teams shall travel to rural
communities and provide physicians, medical clinic
administrators, and other interested parties with information
on: the benefits of joint practices between nurse practitioners
and physicians and methods of establishing and maintaining joint
practices. The office of rural health shall contract with
promotion teams to visit up to 20 rural communities during the
biennium ending June 30, 1995. The office of rural health shall
provide members of promotion teams with stipends for their time
and travel expenses not to exceed the amount specified in
Minnesota Statutes, section 15.059, subdivision 3.
Sec. 22. [EFFECTIVE DATE.]
Section 1, relating to summer internships, is effective the
day following final enactment. Sections 16 to 20 related to the
National Health Services Corps loan repayment program are
effective the day following final enactment.
ARTICLE 12
DATA RESEARCH INITIATIVES
Section 1. Minnesota Statutes 1992, section 62J.30,
subdivision 1, is amended to read:
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 or that has been approved by the federal agency for
health care policy and research, or has been adopted for use by
a national medical society the American Medical Association, the
National Medical Association, a member board of the American
Board of Medical Specialties, a board approved by the American
Osteopathic Association, a college or board approved by the
Royal College of Physicians and Surgeons of Canada, a national
health professional board or association, or a board approved by
the American Dental Association.
(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.
Sec. 2. Minnesota Statutes 1992, section 62J.30,
subdivision 6, is amended to read:
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 them. The unit
may require health care providers and health carriers to collect
and provide all patient health records and claim files, 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. The unit may also
require health care providers and health carriers to provide
mailing lists of patients who have consented to release of data.
The commissioner shall require all health care providers, group
purchasers, and state agencies to use a standard patient
identifier and a standard identifier for providers and health
plans when reporting data under this chapter. The data analysis
unit must code patient identifiers to prevent identification and
to enable release of otherwise private data to researchers,
providers, and group purchasers in a manner consistent with
chapter 13 and section 144.335.
Sec. 3. Minnesota Statutes 1992, section 62J.30,
subdivision 7, is amended to read:
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. The commissioner shall require any person or
organization receiving under this subdivision either private
data on individuals or nonpublic data to sign an agreement to
maintain the data that it receives according to the statutory
provisions applicable to the data. The agreement shall not
limit the preparation and dissemination of summary data as
permitted under section 13.05, subdivision 7. 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.
Sec. 4. Minnesota Statutes 1992, section 62J.30,
subdivision 8, is amended to read:
Subd. 8. [DATA COLLECTION ADVISORY COMMITTEE.] (a) 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.
(b) The data collection advisory committee shall develop a
timeline to complete all responsibilities and transfer any
ongoing responsibilities to the data institute. The timeline
must specify the data on which ongoing responsibilities will be
transferred. This transfer must be completed by July 1, 1994.
Sec. 5. Minnesota Statutes 1992, section 62J.32,
subdivision 4, is amended to read:
Subd. 4. [PRACTICE PARAMETER ADVISORY COMMITTEE.] (a) 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.
(b) The commissioner, upon the advice and recommendation of
the practice parameter advisory committee, may convene expert
review panels to assess practice parameters and outcome research
associated with practice parameters.
Sec. 6. Minnesota Statutes 1992, section 62J.34,
subdivision 2, is amended to read:
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
American Medical Association, the National Medical Association,
a member board of the American Board of Medical Specialties, a
board approved by the American Osteopathic Association, a
college or board approved by the Royal College of Physicians and
Surgeons of Canada, a national health professional board or
association, a board approved by the American Dental
Association. 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.
Sec. 7. Minnesota Statutes 1992, section 144.335, is
amended by adding a subdivision to read:
Subd. 3b. [RELEASE OF RECORDS TO COMMISSIONER OF HEALTH OR
DATA INSTITUTE.] Subdivision 3a does not apply to the release of
health records to the commissioner of health or the data
institute under chapter 62J, provided that the commissioner
encrypts the patient identifier upon receipt of the data.
Sec. 8. Minnesota Statutes 1992, section 214.16,
subdivision 3, is amended to read:
Subd. 3. [GROUNDS FOR DISCIPLINARY ACTION.] The board
shall take disciplinary action, which may include license
revocation, against a regulated person for:
(1) intentional failure to provide the commissioner of
health or the health care analysis unit established under
section 62J.30 with the data on gross patient revenue as
required under section 62J.04 chapter 62J;
(2) failure to provide the health care analysis unit with
data as required under Laws 1992, chapter 549, article 7;
(3) intentional 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) (3) intentional failure to pay the health care provider
tax required under section 295.52.
ARTICLE 13
FINANCING
Section 1. Minnesota Statutes 1992, section 256B.0625,
subdivision 13, is amended to read:
Subd. 13. [DRUGS.] (a) Medical assistance covers drugs if
prescribed by a licensed practitioner and dispensed by a
licensed pharmacist, or by a physician enrolled in the medical
assistance program as a dispensing physician. The commissioner,
after receiving recommendations from the Minnesota Medical
Association and the Minnesota Pharmacists Association, shall
designate a formulary committee to advise the commissioner on
the names of drugs for which payment is made, recommend a system
for reimbursing providers on a set fee or charge basis rather
than the present system, and develop methods encouraging use of
generic drugs when they are less expensive and equally effective
as trademark drugs. The commissioner shall appoint the
formulary committee members no later than 30 days following July
1, 1981. The formulary committee shall consist of nine members,
four of whom shall be physicians who are not employed by the
department of human services, and a majority of whose practice
is for persons paying privately or through health insurance,
three of whom shall be pharmacists who are not employed by the
department of human services, and a majority of whose practice
is for persons paying privately or through health insurance, a
consumer representative, and a nursing home representative.
Committee members shall serve two-year terms and shall serve
without compensation. The commissioner shall establish a drug
formulary. Its establishment and publication shall not be
subject to the requirements of the administrative procedure act,
but the formulary committee shall review and comment on the
formulary contents. The formulary committee shall review and
recommend drugs which require prior authorization. The
formulary committee may recommend drugs for prior authorization
directly to the commissioner, as long as opportunity for public
input is provided. Prior authorization may be requested by the
commissioner based on medical and clinical criteria before
certain drugs are eligible for payment. Before a drug may be
considered for prior authorization at the request of the
commissioner:
(1) the drug formulary committee must develop criteria to
be used for identifying drugs; the development of these criteria
is not subject to the requirements of chapter 14, but the
formulary committee shall provide opportunity for public input
in developing criteria;
(2) the drug formulary committee must hold a public forum
and receive public comment for an additional 15 days; and
(3) the commissioner must provide information to the
formulary committee on the impact that placing the drug on prior
authorization will have on the quality of patient care and
information regarding whether the drug is subject to clinical
abuse or misuse. Prior authorization may be required by the
commissioner before certain formulary drugs are eligible for
payment. The formulary shall not include: drugs or products
for which there is no federal funding; over-the-counter drugs,
except for antacids, acetaminophen, family planning products,
aspirin, insulin, products for the treatment of lice, and
vitamins for children under the age of seven and pregnant or
nursing women; or any other over-the-counter drug identified by
the commissioner, in consultation with the drug formulary
committee as necessary, appropriate and cost effective for the
treatment of certain specified chronic diseases, conditions or
disorders, and this determination shall not be subject to the
requirements of chapter 14, the administrative procedure act;
nutritional products, except for those products needed for
treatment of phenylketonuria, hyperlysinemia, maple syrup urine
disease, a combined allergy to human milk, cow milk, and soy
formula, or any other childhood or adult diseases, conditions,
or disorders identified by the commissioner as requiring a
similarly necessary nutritional product; anorectics; and drugs
for which medical value has not been established. Nutritional
products needed for the treatment of a combined allergy to human
milk, cow's milk, and soy formula require prior authorization.
Separate payment shall not be made for nutritional products for
residents of long-term care facilities; payment for dietary
requirements is a component of the per diem rate paid to these
facilities. Payment to drug vendors shall not be modified
before the formulary is established except that the commissioner
shall not permit payment for any drugs which may not by law be
included in the formulary, and the commissioner's determination
shall not be subject to chapter 14, the administrative procedure
act. The commissioner shall publish conditions for prohibiting
payment for specific drugs after considering the formulary
committee's recommendations.
(b) The basis for determining the amount of payment shall
be the lower of the actual acquisition costs of the drugs plus a
fixed dispensing fee established by the commissioner, the
maximum allowable cost set by the federal government or by the
commissioner plus the fixed dispensing fee or the usual and
customary price charged to the public. Actual acquisition cost
includes quantity and other special discounts except time and
cash discounts. The actual acquisition cost of a drug may shall
be estimated by the commissioner, at average wholesale price
minus 7.6 percent effective January 1, 1994. The maximum
allowable cost of a multisource drug may be set by the
commissioner and it shall be comparable to, but no higher than,
the maximum amount paid by other third party payors in this
state who have maximum allowable cost programs. Establishment
of the amount of payment for drugs shall not be subject to the
requirements of the administrative procedure act. An additional
dispensing fee of $.30 may be added to the dispensing fee paid
to pharmacists for legend drug prescriptions dispensed to
residents of long-term care facilities when a unit dose blister
card system, approved by the department, is used. Under this
type of dispensing system, the pharmacist must dispense a 30-day
supply of drug. The National Drug Code (NDC) from the drug
container used to fill the blister card must be identified on
the claim to the department. The unit dose blister card
containing the drug must meet the packaging standards set forth
in Minnesota Rules, part 6800.2700, that govern the return of
unused drugs to the pharmacy for reuse. The pharmacy provider
will be required to credit the department for the actual
acquisition cost of all unused drugs that are eligible for
reuse. Over-the-counter medications must be dispensed in the
manufacturer's unopened package. The commissioner may permit
the drug clozapine to be dispensed in a quantity that is less
than a 30-day supply. Whenever a generically equivalent product
is available, payment shall be on the basis of the actual
acquisition cost of the generic drug, unless the prescriber
specifically indicates "dispense as written - brand necessary"
on the prescription as required by section 151.21, subdivision
2. Implementation of any change in the fixed dispensing fee
that has not been subject to the administrative procedure act is
limited to not more than 180 days, unless, during that time, the
commissioner initiates rulemaking through the administrative
procedure act.
(c) Until January 4, 1993, or the date the Medicaid
Management Information System (MMIS) upgrade is implemented,
whichever occurs last, a pharmacy provider may require
individuals who seek to become eligible for medical assistance
under a one-month spend-down, as provided in section 256B.056,
subdivision 5, to pay for services to the extent of the
spend-down amount at the time the services are provided. A
pharmacy provider choosing this option shall file a medical
assistance claim for the pharmacy services provided. If medical
assistance reimbursement is received for this claim, the
pharmacy provider shall return to the individual the total
amount paid by the individual for the pharmacy services
reimbursed by the medical assistance program. If the claim is
not eligible for medical assistance reimbursement because of the
provider's failure to comply with the provisions of the medical
assistance program, the pharmacy provider shall refund to the
individual the total amount paid by the individual. Pharmacy
providers may choose this option only if they apply similar
credit restrictions to private pay or privately insured
individuals. A pharmacy provider choosing this option must
inform individuals who seek to become eligible for medical
assistance under a one-month spend-down of (1) their right to
appeal the denial of services on the grounds that they have
satisfied the spend-down requirement, and (2) their potential
eligibility for the health right program or the children's
health plan.
Sec. 2. Minnesota Statutes 1992, section 270B.01,
subdivision 8, is amended to read:
Subd. 8. [MINNESOTA TAX LAWS.] For purposes of this
chapter only, "Minnesota tax laws" means the taxes administered
by or paid to the commissioner under chapters 289A, 290, 290A,
291, and 297A and sections 295.50 to 295.59, and includes any
laws for the assessment, collection, and enforcement of those
taxes.
Sec. 3. Minnesota Statutes 1992, section 295.50,
subdivision 3, is amended to read:
Subd. 3. [GROSS REVENUES.] (a) "Gross revenues" are total
amounts received in money or otherwise by:
(1) a resident hospital for inpatient or outpatient patient
services as defined in Minnesota Rules, part 4650.0102, subparts
21 and 29;
(2) a resident surgical center for patient services;
(3) a nonresident hospital for inpatient or outpatient
patient services as defined in Minnesota Rules, part 4650.0102,
subparts 21 and 29, provided to patients domiciled in Minnesota;
(4) a nonresident surgical center for patient services
provided to patients domiciled in Minnesota;
(3) (5) a resident health care provider, other than a
health maintenance organization staff model health carrier,
for covered patient services listed in section 256B.0625;
(4) (6) a nonresident health care provider for covered
patient services listed in section 256B.0625 provided to an
individual domiciled in Minnesota;
(5) (7) a wholesale drug distributor for sale or
distribution of prescription drugs that are delivered in
Minnesota by the distributor or a common carrier: (i) to a
Minnesota resident by a wholesale drug distributor who is a
nonresident pharmacy directly, by common carrier, or by mail; or
(ii) in Minnesota by the wholesale drug distributor, by common
carrier, or by mail, unless the prescription drugs are delivered
to another wholesale drug distributor. Prescription drugs do
not include nutritional products as defined in Minnesota Rules,
part 9505.0325; and
(6) (8) a health maintenance organization staff model
health carrier as gross premiums for enrollees, carrier
copayments, deductibles, coinsurance, and fees for covered
patient services listed in section 256B.0625 covered under its
contracts with groups and enrollees.
(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.
Sec. 4. Minnesota Statutes 1992, section 295.50,
subdivision 4, is amended to read:
Subd. 4. [HEALTH CARE PROVIDER.] (a) "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 means:
(1) a person furnishing any or all of the following goods
or services directly to a patient or consumer: medical,
surgical, optical, visual, dental, hearing, nursing services,
drugs, medical supplies, medical appliances, laboratory,
diagnostic or therapeutic services, or any goods and services
not listed above that qualifies for reimbursement under the
medical assistance program provided under chapter 256B;
(2) a staff model health carrier;
(3) a licensed ambulance service; or
(4) a pharmacy as defined in section 151.01.
(b) Health care provider does not include hospitals,
nursing homes licensed under chapter 144A, and surgical centers.
Sec. 5. Minnesota Statutes 1992, section 295.50,
subdivision 7, is amended to read:
Subd. 7. [HOSPITAL.] "Hospital" is means a hospital
licensed under chapter 144, or a hospital providing inpatient or
outpatient services licensed by any other state or province or
territory of Canada or a surgical center.
Sec. 6. Minnesota Statutes 1992, section 295.50, is
amended by adding a subdivision to read:
Subd. 9b. [PATIENT SERVICES.] "Patient services" means
inpatient and outpatient services and other goods and services
provided by hospitals, surgical centers, or health care
providers. They include the following health care goods and
services provided to a patient or consumer:
(1) bed and board;
(2) nursing services and other related services;
(3) use of hospitals, surgical centers, or health care
provider facilities;
(4) medical social services;
(5) drugs, biologicals, supplies, appliances, and
equipment;
(6) other diagnostic or therapeutic items or services;
(7) medical or surgical services;
(8) items and services furnished to ambulatory patients not
requiring emergency care;
(9) emergency services; and
(10) covered services listed in section 256B.0625 and in
Minnesota Rules, parts 9505.0170 to 9505.0475.
Sec. 7. Minnesota Statutes 1992, section 295.50, is
amended by adding a subdivision to read:
Subd. 9c. [PERSON.] "Person" means an individual,
partnership, limited liability company, corporation,
association, governmental unit or agency, or public or private
organization of any kind.
Sec. 8. Minnesota Statutes 1992, section 295.50, is
amended by adding a subdivision to read:
Subd. 10b. [REGIONAL TREATMENT CENTER.] "Regional
treatment center" means a regional center as defined in section
253B.02, subdivision 18, and named in sections 252.025,
subdivision 1; 253.015, subdivision 1; 253.201; and 254.05.
Sec. 9. Minnesota Statutes 1992, section 295.50, is
amended by adding a subdivision to read:
Subd. 12b. [STAFF MODEL HEALTH CARRIER.] "Staff model
health carrier" means a health carrier as defined in section
62L.02, subdivision 16, which employs one or more types of
health care provider to deliver health care services to the
health carrier's enrollees.
Sec. 10. Minnesota Statutes 1992, section 295.50,
subdivision 14, is amended to read:
Subd. 14. [WHOLESALE DRUG DISTRIBUTOR.] "Wholesale drug
distributor" means a wholesale drug distributor required to be
licensed under sections 151.42 to 151.51 or a nonresident
pharmacy required to be registered under section 151.19.
Sec. 11. Minnesota Statutes 1992, section 295.51,
subdivision 1, is amended to read:
Subdivision 1. [BUSINESS TRANSACTIONS IN MINNESOTA.] A
hospital, surgical center, or health care provider is subject to
tax under sections 295.50 to 295.58 if it is "transacting
business in Minnesota." A hospital, surgical center, or health
care provider is transacting business in Minnesota only if it:
(1) maintains an office in Minnesota used in the trade or
business of providing patient services;
(2) has employees, representatives, or independent
contractors conducting business in Minnesota related to the
trade or business of providing patient services;
(3) regularly sells covered provides patient services to
customers that receive the covered services in Minnesota;
(4) regularly solicits business from potential customers in
Minnesota. A hospital, surgical center, or health care provider
is presumed to regularly solicit business within Minnesota if it
receives gross receipts for patient services from 20 or more
patients domiciled in Minnesota in a calendar year;
(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 and used in the trade or
business of providing patient services; or
(7) receives medical assistance payments from the state of
Minnesota.
Sec. 12. Minnesota Statutes 1992, section 295.52, is
amended by adding a subdivision to read:
Subd. 1a. [SURGICAL CENTER TAX.] A tax is imposed on each
surgical center equal to two percent of its gross revenues.
Sec. 13. Minnesota Statutes 1992, section 295.52, is
amended by adding a subdivision to read:
Subd. 5. [VOLUNTEER AMBULANCE SERVICES.] Licensed
ambulance services for which all the ambulance attendants are
"volunteer ambulance attendants" as defined in section 144.8091,
subdivision 2, are not subject to the tax under this section.
Sec. 14. Minnesota Statutes 1992, section 295.53,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTIONS.] The following payments are
excluded from the gross revenues subject to the hospital,
surgical center, 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, including payments
received from the government, and organizations governed by
sections 1833 and 1876 of title XVIII the federal Social
Security Act, United States Code, title 42, section
1395, excluding and enrollee deductible deductibles,
coinsurance, and coinsurance payments copayments, whether paid
by the individual or by insurer or other third party. Payments
for services not covered by Medicare are taxable;
(2) medical assistance payments including payments received
directly from the government or from a prepaid plan;
(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 or surgical centers
for goods and services that are subject to tax on which
liability for tax is imposed under section 295.52 or the source
of funds for the payment is exempt under clause (1), (2), (7),
(8), or (10);
(5) payments received from health care providers for goods
and services that are subject to tax on which liability for tax
is imposed under section sections 295.52 to 295.57 or the source
of funds for the payment is exempt under clause (1), (2), (7),
(8), or (10);
(6) amounts paid for prescription drugs, other than
nutritional products, 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 including payments received directly from the
government or from a prepaid plan;
(8) payments received for providing services under the
health right MinnesotaCare program under Laws 1992, chapter 549,
article 4 including payments received directly from the
government or from a prepaid plan and enrollee deductibles,
coinsurance, and copayments; 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.;
(10) payments received from the chemical dependency fund
under chapter 254B;
(11) payments received in the nature of charitable
donations that are not designated for providing patient services
to a specific individual or group;
(12) payments received for providing patient services if
the services are incidental to conducting medical research;
(13) payments received from any governmental agency for
services benefiting the public, not including payments made by
the government in its capacity as an employer or insurer;
(14) payments received for services provided by community
residential mental health facilities licensed under Minnesota
Rules, parts 9520.0500 to 9520.0690, community support programs
and family community support programs approved under Minnesota
Rules, parts 9535.1700 to 9535.1760, and community mental health
centers as defined in section 245.62, subdivision 2; and
(15) government payments received by a regional treatment
center.
Sec. 15. Minnesota Statutes 1992, section 295.53,
subdivision 2, is amended to read:
Subd. 2. [DEDUCTIONS FOR HEALTH MAINTENANCE
ORGANIZATIONS STAFF MODEL HEALTH CARRIERS.] (a) In addition to
the exemptions allowed under subdivision 1, a health maintenance
organization staff model health carrier may deduct from its
gross revenues for the year:
(1) amounts paid to hospitals, surgical centers, and health
care providers that are not employees of the staff model health
carrier for services on which liability for the tax is imposed
under section 295.52;
(1) (2) amounts added to reserves, if total reserves do not
exceed 25 percent of gross revenues for the prior year 200
percent of the statutory net worth requirement, the calculation
of which may be determined on a consolidated basis, taking into
account the amounts held in reserve by affiliated staff model
health carriers;
(2) (3) assessments for the comprehensive health insurance
plan under section 62E.11 paid during the year; and
(3) an allowance (4) amounts spent for administration and
underwriting as reported as total administration to the
department of health in the statement of revenues, expenses, and
net worth pursuant to section 62D.08, subdivision 3, clause (a).
(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.
Sec. 16. Minnesota Statutes 1992, section 295.53,
subdivision 3, is amended to read:
Subd. 3. [RESTRICTION ON ITEMIZATION.] A hospital,
surgical center, or health care provider must not separately
state the tax obligation under section 295.52 on bills provided
to individual patients.
Sec. 17. Minnesota Statutes 1992, section 295.53, is
amended by adding a subdivision to read:
Subd. 4. [DEDUCTION FOR RESEARCH.] (a) In addition to the
exemptions allowed under subdivision 1, a hospital or health
care provider which is exempt under section 501(c)(3) of the
Internal Revenue Code of 1986 or is owned and operated under
authority of a governmental unit, may deduct from its gross
revenues subject to the hospital or health care provider taxes
under sections 295.50 to 295.57 revenues equal to expenditures
for allowable research programs.
(b) For purposes of this subdivision, expenditures for
allowable research programs are the direct and general program
costs for activities which are part of a formal program of
medical and health care research approved by the governing body
of the hospital or health care provider which also includes
active solicitation of research funds from government and
private sources. Any allowable research on humans or animals
must be subject to review by appropriate regulatory committees
operating in conformity with federal regulations such as an
institutional review board or an institutional animal care and
use committee. Costs of clinical research activities paid
directly for the benefit of an individual patient are excluded
from this exemption. Basic research in fields including
biochemistry, molecular biology, and physiology are also
included if such programs are subject to a peer review process.
(c) No deduction shall be allowed under this subdivision
for any revenue received by the hospital or health care provider
in the form of a grant, gift, or otherwise, whether from a
government or nongovernment source, on which the tax liability
under section 295.52 is not imposed or for which the tax
liability under section 295.52 has been received from a third
party as provided for in section 295.582.
(d) Effective beginning with calendar year 1995, the
taxpayer shall not take the deduction under this section into
account in determining estimated tax payments or the payment
made with the annual return under section 295.55. The total
deduction allowable to all taxpayers under this section for
calendar years beginning after December 31, 1994, may not exceed
$65,000,000. To implement this limit, each qualifying hospital
and qualifying health care provider shall submit to the
commissioner by March 15 its total expenditures qualifying for
the deduction under this section for the previous calendar
year. The commissioner shall sum the total expenditures of all
taxpayers qualifying under this section for the calendar year.
If the resulting amount exceeds $65,000,000, the commissioner
shall allocate a part of the $65,000,000 deduction limit to each
qualifying hospital and health care provider in proportion to
its share of the total deductions. The commissioner shall pay a
refund to each qualifying hospital or provider equal to its
share of the deduction limit multiplied by two percent. The
commissioner shall pay the refund no later than May 15 of the
calendar year.
Sec. 18. Minnesota Statutes 1992, section 295.54, is
amended to read:
295.54 [CREDIT FOR TAXES PAID TO ANOTHER STATE.]
A resident hospital, resident surgical center, 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. 19. Minnesota Statutes 1992, section 295.55,
subdivision 4, is amended to read:
Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer
with an aggregate tax liability of $60,000 $30,000 or more
during a calendar quarter ending the last day of March, June,
September, or December of the first year the taxpayer is subject
to the tax must thereafter remit all liabilities by means of a
funds transfer as defined in section 336.4A-104, paragraph (a),
for the remainder of the year. A taxpayer with an aggregate tax
liability of $120,000 or more during a calendar year, must remit
all liabilities by means of a funds transfer as defined in
section 336.4A-104, paragraph (a), in the subsequent calendar
year. 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.
Sec. 20. Minnesota Statutes 1992, section 295.57, is
amended to read:
295.57 [COLLECTION AND ENFORCEMENT; REFUNDS; 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 provisions in sections 289A.43 and
289A.65, criminal penalty penalties in section 289A.63, and
refunds provisions under chapter 289A in section 289A.50, and
collection and rulemaking provisions under chapter 270, apply to
a liability for the taxes imposed under sections 295.50 to
295.58.
Sec. 21. Minnesota Statutes 1992, section 295.58, is
amended to read:
295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.]
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. Refunds of overpayments must be paid from the health
care access fund in the state treasury.
Sec. 22. Laws 1992, chapter 549, article 9, section 19, is
amended to read as follows:
Sec. 19. [295.582] [PASSTHROUGH AUTHORITY.]
Subdivision 1. [AUTHORITY.] A hospital, surgical center,
or health care provider that is subject to a tax under section 7
295.52 may transfer additional expense generated by section 7
295.52 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
295.53. 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, surgical center,
or health care provider, to the extent allowed under federal
law. Nothing in this subdivision limits the ability of a
hospital, surgical center, or health care provider to recover
all or part of the section 7 295.52 obligation by other methods,
including increasing fees or charges.
Subd. 2. [EXPIRATION.] This section expires January 1,
1994.
Sec. 23. Minnesota Statutes 1992, section 295.59, is
amended to read:
295.59 [SEVERABILITY.]
If any section, subdivision, clause, or phrase of sections
295.50 to 295.58 295.582 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 295.58 295.582. The legislature declares
that it would have passed sections 295.50 to 295.58 295.582 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. 24. [REPEALER.]
Minnesota Statutes 1992, section 295.50, subdivisions 5 and
10, are repealed.
Minnesota Statutes 1992, section 295.51, subdivision 2, is
repealed.
Sec. 25. [EFFECTIVE DATE.]
Sections 1, 2, 4, 5, 7, and 21 are effective the day
following final enactment.
Sections 3, 6, clauses (1) to (9), 8, 11, 12, 14, 16, and
18 are effective retroactively to gross revenues generated by
services performed and goods sold after December 31, 1992.
Section 6, clause (10), 9, 10, 13, and 15 are effective for
services performed and goods sold after December 31, 1993.
For hospitals, section 17 is effective for gross revenues
generated after December 31, 1992. For health care providers,
section 17 is effective for gross revenues generated after
December 31, 1993.
Section 19 is effective for payments due in calendar year
1994, and thereafter, based on the payments made in fiscal year
ending June 30, 1993.
Sections 20, 22, and 23 are effective January 1, 1993.
ARTICLE 14
APPROPRIATIONS
Section 1. APPROPRIATIONS
The sums shown in the columns marked "APPROPRIATIONS" are
appropriated from the health care access fund, or any other fund
named, to the agencies and for the purposes specified in the
following sections of this article, to be available for the
fiscal years indicated for each purpose. The figures "1994" and
"1995" where used in this article, mean that the appropriation
or appropriations listed under them are available for the year
ending June 30, 1994, or June 30, 1995, respectively.
APPROPRIATIONS
Available for the Year
Ending June 30
1994 1995
Sec. 2. DEPARTMENT OF
HUMAN SERVICES
Health Care Access Fund $44,475,000 $96,040,000
General Fund 2,919,000 6,704,000
The general fund appropriation is for
costs in the medical assistance and
general assistance medical care
programs.
Of the health care access fund
appropriation, $7,790,000 the first
year and $10,897,000 the second year is
for administration of the MinnesotaCare
program and $36,685,000 the first year
and $85,143,000 the second year is for
the MinnesotaCare subsidized health
care plan.
Sec. 3. DEPARTMENT OF
HEALTH 5,137,000 5,962,000
Sec. 4. UNIVERSITY OF MINNESOTA 2,277,000 2,357,000
Sec. 5. HIGHER EDUCATION
COORDINATING BOARD 578,000 707,000
Sec. 6. LEGISLATIVE COORDINATING
COMMISSION 175,000 175,000
Sec. 7. DEPARTMENT OF COMMERCE
GENERAL FUND 175,000 162,000
Sec. 8. DEPARTMENT OF
REVENUE 1,037,000 1,367,000
Sec. 9. DEPARTMENT OF
EMPLOYEE RELATIONS 3,554,000 7,125,000
Sec. 10. [TRANSFERS.]
The commissioner of finance shall transfer $10,907,000 in
fiscal year 1994 and $25,842,000 in fiscal year 1995 from the
health care access fund to the general fund.
The commissioner of finance shall transfer $189,000 in
fiscal year 1994 and $239,000 in fiscal year 1995 from the
health care access fund to the special revenue fund for MAXIS.
Sec. 11. [CARRY FORWARD.]
Subdivision 1. $250,000 of the appropriation in Laws 1992,
chapter 549, article 10, section 1, subdivision 3, is available
until June 30, 1994, to develop and implement a program to
establish community health centers in rural areas of the state
as authorized in Minnesota Statutes, section 144.1486.
Subd. 2. $250,000 of the appropriation in Laws 1992,
chapter 549, article 10, section 1, subdivision 3, is available
until June 30, 1994, to award transition grants to rural
hospitals as authorized in Minnesota Statutes, section 144.147.
Subd. 3. $200,000 of the appropriation in Laws 1992,
chapter 549, article 10, section 1, subdivision 3, is available
until June 30, 1994, to award sole community hospital financial
assistance grants as authorized by Minnesota Statutes, section
144.1484.
Subd. 4. The entire appropriation in Laws 1992, chapter
549, article 10, section 1, subdivision 3, is available until
June 30, 1994.
Subd. 5. Notwithstanding Laws 1992, chapter 549, article
10, section 1, subdivision 1, $569,000 of the amount
appropriated to the commissioner of revenue in Laws 1992,
chapter 549, article 10, section 1, subdivision 8, is available
until June 30, 1994.
Subd. 6. Up to $600,000 of the appropriation for systems
modification and start-up costs for MinnesotaCare contained in
Laws 1992, chapter 549, article 10, section 1, subdivision 4,
shall not cancel, but may be transferred to the state systems
account established in Minnesota Statutes, section 256.014, to
complete the work of integrating MinnesotaCare into the Medicaid
management information system.
Presented to the governor May 20, 1993
Signed by the governor May 24, 1993, 12:15 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes