Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2004, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 246-H.F.No. 606
An act relating to health; modifying prior
authorization requirements for health care services;
establishing requirements for provider contracting;
modifying provisions for payment of claims; amending
Minnesota Statutes 2002, sections 62M.07; 62Q.74;
62Q.75, subdivision 2; proposing coding for new law in
Minnesota Statutes, chapter 62Q; repealing Minnesota
Statutes 2002, section 62Q.745.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2002, section 62M.07, is
amended to read:
62M.07 [PRIOR AUTHORIZATION OF SERVICES.]
(a) Utilization review organizations conducting prior
authorization of services must have written standards that meet
at a minimum the following requirements:
(1) written procedures and criteria used to determine
whether care is appropriate, reasonable, or medically necessary;
(2) a system for providing prompt notification of its
determinations to enrollees and providers and for notifying the
provider, enrollee, or enrollee's designee of appeal procedures
under clause (4);
(3) compliance with section 62M.05, subdivisions 3a and 3b,
regarding time frames for approving and disapproving prior
authorization requests;
(4) written procedures for appeals of denials of prior
authorization which specify the responsibilities of the enrollee
and provider, and which meet the requirements of sections 62M.06
and 72A.285, regarding release of summary review findings; and
(5) procedures to ensure confidentiality of
patient-specific information, consistent with applicable law.
(b) No utilization review organization, health plan
company, or claims administrator may conduct or require prior
authorization of emergency confinement or emergency treatment.
The enrollee or the enrollee's authorized representative may be
required to notify the health plan company, claims
administrator, or utilization review organization as soon after
the beginning of the emergency confinement or emergency
treatment as reasonably possible.
(c) If prior authorization for a health care service is
required, the utilization review organization, health plan
company, or claim administrator must allow providers to submit
requests for prior authorization of the health care services
without unreasonable delay by telephone, facsimile, or voice
mail or through an electronic mechanism 24 hours a day, seven
days a week. This paragraph does not apply to dental service
covered under MinnesotaCare, general assistance medical care, or
medical assistance.
Sec. 2. [62Q.732] [CITATION.]
Sections 62Q.732 to 62Q.75 may be cited as the "Minnesota
Health Plan Contracting Act."
Sec. 3. [62Q.733] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] For purposes of sections
62Q.732 to 62Q.739, the following definitions apply.
Subd. 2. [CONTRACT.] "Contract" means a written agreement
between a health care provider and a health plan company to
provide health care services.
Subd. 3. [HEALTH CARE PROVIDER OR PROVIDER.] "Health care
provider" or "provider" means a physician, chiropractor,
dentist, podiatrist, or other provider as defined under section
62J.03, other than hospitals, ambulatory surgical centers, or
freestanding emergency rooms.
Subd. 4. [HEALTH PLAN COMPANY.] (a) "Health plan company"
means:
(1) a health maintenance organization operating under
chapter 62D;
(2) a community integrated service network operating under
chapter 62N;
(3) a preferred provider organization as defined in section
145.61, subdivision 4c; or
(4) an insurance company licensed under chapter 60A,
nonprofit health service corporation operating under chapter
62C, fraternal benefit society operating under chapter 64B, or
any other entity that establishes, operates, or maintains a
health benefit plan or network of health care providers where
the providers have entered into a contract with the entity to
provide health care services.
(b) This subdivision does not apply to a health plan
company with respect to coverage described in section 62A.011,
subdivision 3, clauses (1) to (5) and (7) to (12).
Subd. 5. [FEE SCHEDULE.] "Fee schedule" means the total
expected financial compensation paid to a health care provider
for providing a health care service as determined by the
contract between the health plan company and the provider,
inclusive of withhold amounts and any amount for which the
patient or other third party may be obligated to pay under the
contract.
Sec. 4. [62Q.734] [EXEMPTION.]
Sections 62Q.735 to 62Q.739, and 62Q.74 do not apply to
health plan companies whose annual Minnesota health premium
revenues are less than three percent of the total annual
Minnesota health premium revenues, as measured by the assessment
base of the Minnesota Comprehensive Health Association. For
purposes of this percentage calculation, a health plan company's
premiums include the Minnesota health premium revenues of its
affiliates.
Sec. 5. [62Q.735] [PROVIDER CONTRACTING PROCEDURES.]
Subdivision 1. [CONTRACT DISCLOSURE.] (a) Before requiring
a health care provider to sign a contract, a health plan company
shall give to the provider a complete copy of the proposed
contract, including:
(1) all attachments and exhibits;
(2) operating manuals;
(3) a general description of the health plan company's
health service coding guidelines and requirement for procedures
and diagnoses with modifiers, and multiple procedures; and
(4) all guidelines and treatment parameters incorporated or
referenced in the contract.
(b) The health plan company shall make available to the
provider the fee schedule or a method or process that allows the
provider to determine the fee schedule for each health care
service to be provided under the contract.
(c) Notwithstanding paragraph (b), a health plan company
that is a dental plan organization, as defined in section
62Q.76, shall disclose information related to the individual
contracted provider's expected reimbursement from the dental
plan organization. Nothing in this section requires a dental
plan organization to disclose the plan's aggregate maximum
allowable fee table used to determine other providers' fees.
The contracted provider must not release this information in any
way that would violate any state or federal antitrust law.
Subd. 2. [PROPOSED AMENDMENTS.] (a) Any amendment or
change in the terms of an existing contract between a health
plan company and a provider must be disclosed to the provider at
least 45 days prior to the effective date of the proposed
change, with the exception of amendments required of the health
plan company by law or governmental regulatory authority, when
notice shall be given to the provider when the requirement is
made known to the health plan company.
(b) Any amendment or change in the contract that alters the
fee schedule or materially alters the written contractual
policies and procedures governing the relationship between the
provider and the health plan company must be disclosed to the
provider not less than 45 days before the effective date of the
proposed change and the provider must have the opportunity to
terminate the contract before the amendment or change is deemed
to be in effect.
(c) By mutual consent, evidenced in writing in amendments
separate from the base contract and not contingent on
participation, the parties may waive the disclosure requirements
under paragraphs (a) and (b).
(d) Notwithstanding paragraphs (a) and (b), the effective
date of contract termination shall comply with the terms of the
contract when a provider terminates a contract.
Subd. 3. [HOSPITAL CONTRACT AMENDMENT DISCLOSURE.] (a) Any
amendment or change in the terms of an existing contract between
a network organization and a hospital, ambulatory surgical
center, or freestanding emergency room must be disclosed to that
provider.
(b) Any amendment or change in the contract that alters the
financial reimbursement or alters the written contractual
policies and procedures governing the relationship between the
hospital, ambulatory surgical center, or freestanding emergency
room and the network organization must be disclosed to that
provider before the amendment or change is deemed to be in
effect.
(c) For purposes of this subdivision, "network organization"
means a preferred provider organization, as defined in section
145.61, subdivision 4c; a managed care organization, as defined
in section 62Q.01, subdivision 5; or other entity that uses or
consists of a network of health care providers.
Sec. 6. [62Q.736] [PAYMENT RATES.]
A contract between a health plan company and a provider
shall comply with section 62A.64.
Sec. 7. [62Q.737] [SERVICE CODE CHANGES.]
(a) For purposes of this section, "service code" means
current procedural terminology (CPT), current dental terminology
(CDT), ICD-CM, diagnosis-related groups (DRGs), or other coding
system.
(b) The health plan company shall determine the manner in
which it adjudicates claims. The provider may request a
description of the general coding guidelines applicable to the
health care services the provider is reasonably expected to
render pursuant to the contract. The health plan company or its
designee shall provide the coding guidelines not later than 30
days after the date the health plan receives the request. The
health plan company shall provide notice of material changes to
the coding guidelines not later than 45 days prior to the date
the changes take effect and shall not make retroactive revision
to the coding guidelines, but may issue new guidelines. A
provider who receives information under this section may use or
disclose the information only for the purpose of practice
management, billing activities, or other business operations and
may not disclose the information to third parties without the
consent of the health plan company.
(c) The health plan company may correct an error in a
submitted claim that prevents the claim from being processed,
provided that the health plan company:
(1) notifies the provider of the change and reason for the
change according to federal Health Insurance Portability and
Accountability Act (HIPAA) transaction standards; and
(2) offers the provider the opportunity to appeal any
changes.
(d) Nothing in this section shall be interpreted to require
a health plan company to violate copyright or other law by
disclosing proprietary licensed software. In addition to the
above, the health plan company shall, upon request of a
contracted provider, disclose the name, edition, and model
version of the software that the health plan company uses to
determine bundling and unbundling of claims.
(e) This section does not apply to government programs,
including state public programs, Medicare, and Medicare-related
coverage.
Sec. 8. [62Q.739] [UNILATERAL TERMS PROHIBITED.]
(a) A contract between a health plan company and a health
care provider shall not contain or require unilateral terms
regarding indemnification or arbitration. Notwithstanding any
prohibitions in this section, a contract between a health plan
company and a health care provider may be unilaterally
terminated by either party in accordance with the terms of the
contract.
(b) A health plan company may not terminate or fail to
renew a health care provider's contract without cause unless the
company has given the provider a written notice of the
termination or nonrenewal 120 days before the effective date.
Sec. 9. Minnesota Statutes 2002, section 62Q.74, is
amended to read:
62Q.74 [NETWORK SHADOW CONTRACTING.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the terms defined in this subdivision have the meanings
given.
(b) "category of coverage" means one of the following types
of health-related coverage:
(1) health;
(2) no-fault automobile medical benefits; or
(3) workers' compensation medical benefits.
(c) "Health care provider" or "provider" means an
individual licensed, registered, or regulated by the Board of
Medical Practice under chapter 147, a chiropractor licensed
under sections 148.01 to 148.106, a dentist licensed under
chapter 150A, or a hospital licensed under chapter 144.
(d) "Network organization" means a preferred provider
organization as defined in section 145.61, subdivision 4c; a
managed care organization as defined in section 62Q.01,
subdivision 5; or other entity that uses or consists of a
network of health care providers.
(b) "Health care provider" or "provider" means a physician,
chiropractor, dentist, podiatrist, hospital, ambulatory surgical
center, freestanding emergency room, or other provider, as
defined in section 62J.03.
Subd. 2. [PROVIDER CONSENT REQUIRED.] (a) No network
organization health plan company shall require a health care
provider to participate in a network under a category of
coverage that differs from the category or categories of
coverage to which the existing contract between the network
organization health plan company and the provider applies,
without the affirmative consent of the provider obtained under
subdivision 3.
(b) This section does not apply to situations in which the
network organization wishes No health plan company shall
require, as a condition of participation in any health plan,
product, or other arrangement, the provider to participate in a
new or different health plan, product, or other arrangement
within a category of coverage that is already provided for in an
existing contract between the network organization and the
provider results in a different underlying financial
reimbursement methodology without the affirmative consent of the
provider obtained under subdivision 3. This paragraph does not
apply to participation in health plan products or other
arrangements that provide health care services to government
programs, including state public programs, Medicare, and
Medicare-related coverage.
(c) Compliance with this section may not be waived in a
contract or otherwise.
Subd. 3. [CONSENT PROCEDURE.] (a) The network organization
health plan company, if it wishes to apply an existing contract
with a provider to a different category of coverage or health
plan, product, or other arrangement within a category of
coverage that results in a different underlying financial
reimbursement methodology, shall first notify the provider in
writing. The written notice must include at least the following:
(1) the network organization's health plan company's name,
address, and telephone number, and the name of the specific
network, if it differs from that of the network organization
health plan company;
(2) a description of the proposed new category of
coverage or health plan, product, or other arrangement within a
category of coverage;
(3) the names of all payers expected by the network
organization health plan company to use the network for the new
category of coverage or health plan, product, or other
arrangement within a category of coverage;
(4) the approximate number of current enrollees of the
network organization health plan company in that category of
coverage or health plan, product, or other arrangement within a
category of coverage within the provider's geographical area;
(5) a disclosure of all contract terms of the proposed new
category of coverage or health plan, product, or other
arrangement within a category of coverage, including the
discount or reduced fees, care guidelines, utilization review
criteria, prior notification process, prior authorization
process, and dispute resolution process;
(6) a form for the provider's convenience in accepting or
declining participation in the proposed new category of coverage
or health plan, product, or other arrangement within a category
of coverage, provided that the provider need not use that form
in responding; and
(7) a statement informing the provider of the provisions of
paragraph (b).
(b) Unless the provider has affirmatively agreed to
participate within 60 days after the postmark date of the
notice, the provider is deemed to have not accepted the proposed
new category of coverage or health plan, product, or other
arrangement within a category of coverage that results in a
different underlying financial reimbursement methodology.
Subd. 4. [CONTRACT TERMINATION RESTRICTED.] A network
organization health plan company must not terminate an existing
contract with a provider, or fail to honor the contract in good
faith, based solely on the provider's decision not to accept a
proposed new category of coverage or health plan, product, or
other arrangement within a category of coverage that results in
a different underlying financial reimbursement methodology. The
most recent agreed-upon contractual obligations remain in force
until the existing contract's renewal or termination date.
Subd. 5. [REMEDY.] If a network organization health plan
company violates this section by reimbursing a provider as if
the provider had agreed under this section to participate in the
network under a category of coverage or health plan, product, or
other arrangement within a category of coverage that results in
a different underlying financial reimbursement methodology to
which the provider has not agreed, the provider has a cause of
action against the network organization health plan company to
recover two times the difference between the reasonable charges
for claims affected by the violation and the amounts actually
paid to the provider. The provider is also entitled to recover
costs, disbursements, and reasonable attorney fees.
Subd. 6. [BENEFIT DESIGN CHANGES.] For purposes of this
section, "different underlying financial reimbursement
methodology" does not include health plan benefit design
changes, including, but not limited to, changes in co-payment or
deductible amounts or other changes in member cost-sharing
requirements.
Sec. 10. Minnesota Statutes 2002, section 62Q.75,
subdivision 2, is amended to read:
Subd. 2. [CLAIMS PAYMENTS.] (a) This section applies to
clean claims submitted to a health plan company or third-party
administrator for services provided by any:
(1) health care provider, except as defined in section
62Q.74, but does not include a provider licensed under chapter
151;
(2) home health care provider, as defined in section
144A.43, subdivision 4; or
(3) health care facility.
All health plan companies and third-party administrators must
pay or deny claims that are clean claims within 30 calendar days
after the date upon which the health plan company or third-party
administrator received the claim.
(b) The health plan company or third-party administrator
shall, upon request, make available to the provider information
about the status of a claim submitted by the provider consistent
with section 62J.581.
(c) If a health plan company or third-party administrator
does not pay or deny a clean claim within the period provided in
paragraph (a), the health plan company or third-party
administrator must pay interest on the claim for the period
beginning on the day after the required payment date specified
in paragraph (a) and ending on the date on which the health plan
company or third-party administrator makes the payment or denies
the claim. In any payment, the health plan company or
third-party administrator must itemize any interest payment
being made separately from other payments being made for
services provided. The health plan company or third-party
administrator may, at its discretion, require the health care
provider to bill the health plan company or third-party
administrator for the interest required under this section
before any interest payment is made. Interest payments must be
made to the health care provider no less frequently than
quarterly.
(c) (d) The rate of interest paid by a health plan company
or third-party administrator under this subdivision shall be 1.5
percent per month or any part of a month.
(d) (e) A health plan company or third-party administrator
is not required to make an interest payment on a claim for which
payment has been delayed for purposes of reviewing potentially
fraudulent or abusive billing practices.
(e) The commissioner may not assess a financial
administrative penalty against a health plan company for
violation of this subdivision.
(f) The commissioner may assess a financial administrative
penalty against a health plan company for violation of this
subdivision when there is a pattern of abuse that demonstrates a
lack of good faith effort and a systematic failure of the health
plan company to comply with this subdivision.
Sec. 11. [REPEALER.]
Minnesota Statutes 2002, section 62Q.745, is repealed.
Sec. 12. [EFFECTIVE DATE.]
Sections 1, 2, and 4 are effective for provider contracts
issued, renewed, or amended on or after July 1, 2004. Sections
3, 6, 8, and 10 are effective for provider contracts issued,
renewed, or amended on or after January 1, 2005. Sections 5, 7,
9, and 11 are effective for provider contracts issued, renewed,
or amended on or after July 1, 2006.
Presented to the governor May 18, 2004
Signed by the governor May 29, 2004, 3:10 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes