1.1                          A bill for an act 
  1.2             relating to human services; providing for 
  1.3             comprehensive health care services; amending Minnesota 
  1.4             Statutes 1996, sections 256B.04, by adding a 
  1.5             subdivision; and 256B.69, subdivisions 2, 3a, and 5; 
  1.6             proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 256B. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1996, section 256B.04, is 
  1.10  amended by adding a subdivision to read: 
  1.11     Subd. 1a.  [COMPREHENSIVE HEALTH SERVICES SYSTEM.] The 
  1.12  commissioner shall carry out the duties in this section with the 
  1.13  participation of the boards of county commissioners, and with 
  1.14  full consideration for the interests of counties, to plan and 
  1.15  implement a unified, accountable, comprehensive health services 
  1.16  system that: 
  1.17     (1) promotes accessible and quality health care for all 
  1.18  Minnesotans; 
  1.19     (2) assures provision of adequate health care within 
  1.20  limited state and county resources; 
  1.21     (3) avoids shifting funding burdens to county tax 
  1.22  resources; 
  1.23     (4) provides statewide eligibility, benefit, and service 
  1.24  expectations; 
  1.25     (5) manages care, develops risk management strategies, and 
  1.26  contains cost in all health and human services; and 
  2.1      (6) supports effective implementation of publicly funded 
  2.2   health and human services for all areas of the state. 
  2.3      Sec. 2.  Minnesota Statutes 1996, section 256B.69, 
  2.4   subdivision 2, is amended to read: 
  2.5      Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
  2.6   the following terms have the meanings given.  
  2.7      (a) "Commissioner" means the commissioner of human services.
  2.8   For the remainder of this section, the commissioner's 
  2.9   responsibilities for methods and policies for implementing the 
  2.10  project will be proposed by the project advisory committees and 
  2.11  approved by the commissioner.  
  2.12     (b) "Demonstration provider" means an individual, agency, 
  2.13  organization, or group of these entities a health maintenance 
  2.14  organization or community integrated service network authorized 
  2.15  and operating under chapter 62D or 62N that participates in the 
  2.16  demonstration project according to criteria, standards, methods, 
  2.17  and other requirements established for the project and approved 
  2.18  by the commissioner.  
  2.19     (c) "Eligible individuals" means those persons eligible for 
  2.20  medical assistance benefits as defined in sections 256B.055, 
  2.21  256B.056, and 256B.06. 
  2.22     (d) "Limitation of choice" means suspending freedom of 
  2.23  choice while allowing eligible individuals to choose among the 
  2.24  demonstration providers.  
  2.25     (e) This paragraph supersedes paragraph (c) as long as the 
  2.26  Minnesota health care reform waiver remains in effect.  When the 
  2.27  waiver expires, this paragraph expires and the commissioner of 
  2.28  human services shall publish a notice in the State Register and 
  2.29  notify the revisor of statutes.  "Eligible individuals" means 
  2.30  those persons eligible for medical assistance benefits as 
  2.31  defined in sections 256B.055, 256B.056, and 256B.06.  
  2.32  Notwithstanding sections 256B.055, 256B.056, and 256B.06, an 
  2.33  individual who becomes ineligible for the program because of 
  2.34  failure to submit income reports or recertification forms in a 
  2.35  timely manner, shall remain enrolled in the prepaid health plan 
  2.36  and shall remain eligible to receive medical assistance coverage 
  3.1   through the last day of the month following the month in which 
  3.2   the enrollee became ineligible for the medical assistance 
  3.3   program. 
  3.4      Sec. 3.  Minnesota Statutes 1996, section 256B.69, 
  3.5   subdivision 3a, is amended to read: 
  3.6      Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
  3.7   implementing the general assistance medical care, or medical 
  3.8   assistance prepayment program within a county, must include the 
  3.9   county board in the process of development, approval, and 
  3.10  issuance of the request for proposals to provide services to 
  3.11  eligible individuals within the proposed county.  County boards 
  3.12  must be given reasonable opportunity to make recommendations 
  3.13  regarding the development, issuance, review of responses, and 
  3.14  changes needed in the request for proposals.  The commissioner 
  3.15  must provide county boards the opportunity to review each 
  3.16  proposal based on the identification of community needs under 
  3.17  chapters 145A and 256E and county advocacy activities.  If a 
  3.18  county board finds that a proposal does not address certain 
  3.19  community needs, the county board and commissioner shall 
  3.20  continue efforts for improving the proposal and network prior to 
  3.21  the approval of the contract.  The county board shall make 
  3.22  recommendations regarding the approval of local networks and 
  3.23  their operations to ensure adequate availability and access to 
  3.24  covered services.  The provider or health plan must respond 
  3.25  directly to county advocates and the state prepaid medical 
  3.26  assistance ombudsperson regarding service delivery and must be 
  3.27  accountable to the state regarding contracts with medical 
  3.28  assistance and general assistance medical care funds.  The 
  3.29  county board may recommend a maximum number of participating 
  3.30  health plans after considering the size of the enrolling 
  3.31  population; ensuring adequate access and capacity; considering 
  3.32  the client and county administrative complexity; and considering 
  3.33  the need to promote the viability of locally developed health 
  3.34  plans.  The county board or a single entity representing a group 
  3.35  of county boards and the commissioner shall mutually select 
  3.36  health plans for participation at the time of initial 
  4.1   implementation of the prepaid medical assistance program in that 
  4.2   county or group of counties and at the time of contract renewal. 
  4.3   The commissioner shall also seek input for contract requirements 
  4.4   from the county or single entity representing a group of county 
  4.5   boards at each contract renewal and incorporate those 
  4.6   recommendations into the contract negotiation process.  The 
  4.7   commissioner, in conjunction with the county board, shall 
  4.8   actively seek to develop a mutually agreeable timetable prior to 
  4.9   the development of the request for proposal, but counties must 
  4.10  agree to initial enrollment beginning on or before January 1, 
  4.11  1999, in either the prepaid medical assistance and general 
  4.12  assistance medical care programs or county-based purchasing 
  4.13  under section 256B.692.  At least 90 days before enrollment in 
  4.14  the medical assistance and general assistance medical care 
  4.15  prepaid programs begins in a county in which the prepaid 
  4.16  programs have not been established, the commissioner shall 
  4.17  provide a report to the chairs of senate and house committees 
  4.18  having jurisdiction over state health care programs which 
  4.19  verifies that the commissioner complied with the requirements 
  4.20  for county involvement that are specified in this subdivision. 
  4.21     (b) The commissioner shall seek a federal waiver to allow a 
  4.22  fee-for-service plan option to MinnesotaCare enrollees.  The 
  4.23  commissioner shall develop an increase of the premium fees 
  4.24  required under section 256.9356 up to 20 percent of the premium 
  4.25  fees for the enrollees who elect the fee-for-service option.  
  4.26  Prior to implementation, the commissioner shall submit this fee 
  4.27  schedule to the chair and ranking minority member of the senate 
  4.28  health care committee, the senate health care and family 
  4.29  services funding division, the house of representatives health 
  4.30  and human services committee, and the house of representatives 
  4.31  health and human services finance division. 
  4.32     (c) At the option of the county board, the board may 
  4.33  develop contract requirements related to the achievement of 
  4.34  local public health goals.  If the county board and the 
  4.35  commissioner mutually agree to such requirements, the department 
  4.36  shall include such requirements in all health plan contracts 
  5.1   governing the prepaid medical assistance and general assistance 
  5.2   medical care programs in that county at initial implementation 
  5.3   of the program in that county and at the time of contract 
  5.4   renewal.  The county board may participate in the enforcement of 
  5.5   the contract provisions related to local public health goals. 
  5.6      (d) For counties in which prepaid medical assistance and 
  5.7   general assistance medical care programs have not been 
  5.8   established, the commissioner shall not implement those programs 
  5.9   if a county board submits acceptable and timely preliminary and 
  5.10  final proposals under section 256B.692, until county-based 
  5.11  purchasing is no longer operational in that county.  For 
  5.12  counties in which prepaid medical assistance and general 
  5.13  assistance medical care programs are in existence on or after 
  5.14  September 1, 1997, the commissioner must terminate contracts 
  5.15  with health plans according to section 256B.692, subdivision 4, 
  5.16  if the county board submits and the commissioner accepts 
  5.17  preliminary and final proposals according to that subdivision. 
  5.18     (e) In the event that a county board or a single entity 
  5.19  representing a group of county boards and the commissioner 
  5.20  cannot reach agreement regarding:  (i) the selection of 
  5.21  participating health plans in that county; (ii) contract 
  5.22  requirements; or (iii) implementation and enforcement of county 
  5.23  requirements including provisions regarding local public health 
  5.24  goals, the commissioner shall resolve all disputes after taking 
  5.25  into account the recommendations of a three-person mediation 
  5.26  panel.  The panel shall be composed of one designee of the 
  5.27  president of the association of Minnesota counties, one designee 
  5.28  of the commissioner of human services, and one designee of the 
  5.29  commissioner of health. 
  5.30     Sec. 4.  Minnesota Statutes 1996, section 256B.69, 
  5.31  subdivision 5, is amended to read: 
  5.32     Subd. 5.  [PROSPECTIVE PER CAPITA PAYMENT.] The 
  5.33  commissioner shall establish the method and amount of payments 
  5.34  for services.  The commissioner shall annually contract with 
  5.35  demonstration providers to provide services consistent with 
  5.36  these established methods and amounts for payment.  
  6.1   Notwithstanding section 62D.02, subdivision 1, payments for 
  6.2   services rendered as part of the project may be made to 
  6.3   providers that are not licensed health maintenance organizations 
  6.4   on a risk-based, prepaid capitation basis.  
  6.5      If allowed by the commissioner, a demonstration provider 
  6.6   may contract with an insurer, health care provider, nonprofit 
  6.7   health service plan corporation, or the commissioner, to provide 
  6.8   insurance or similar protection against the cost of care 
  6.9   provided by the demonstration provider or to provide coverage 
  6.10  against the risks incurred by demonstration providers under this 
  6.11  section.  The recipients enrolled with a demonstration provider 
  6.12  are a permissible group under group insurance laws and chapter 
  6.13  62C, the Nonprofit Health Service Plan Corporations Act.  Under 
  6.14  this type of contract, the insurer or corporation may make 
  6.15  benefit payments to a demonstration provider for services 
  6.16  rendered or to be rendered to a recipient.  Any insurer or 
  6.17  nonprofit health service plan corporation licensed to do 
  6.18  business in this state is authorized to provide this insurance 
  6.19  or similar protection.  
  6.20     Payments to providers participating in the project are 
  6.21  exempt from the requirements of sections 256.966 and 256B.03, 
  6.22  subdivision 2.  The commissioner shall complete development of 
  6.23  capitation rates for payments before delivery of services under 
  6.24  this section is begun.  For payments made during calendar year 
  6.25  1990 and later years, the commissioner shall contract with an 
  6.26  independent actuary to establish prepayment rates. 
  6.27     By January 15, 1996, the commissioner shall report to the 
  6.28  legislature on the methodology used to allocate to participating 
  6.29  counties available administrative reimbursement for advocacy and 
  6.30  enrollment costs.  The report shall reflect the commissioner's 
  6.31  judgment as to the adequacy of the funds made available and of 
  6.32  the methodology for equitable distribution of the funds.  The 
  6.33  commissioner must involve participating counties in the 
  6.34  development of the report. 
  6.35     Sec. 5.  [256B.692] [COUNTY-BASED PURCHASING.] 
  6.36     Subdivision 1.  [IN GENERAL.] Except for persons eligible 
  7.1   due to a disability, county boards or groups of county boards 
  7.2   may elect to purchase or provide health care services on behalf 
  7.3   of persons eligible for medical assistance and general 
  7.4   assistance medical care according to this section.  Counties 
  7.5   that elect to purchase or provide health care under this section 
  7.6   must provide all services included in prepaid managed care 
  7.7   programs according to sections 256B.69, subdivisions 1 to 22, 
  7.8   and 256D.03.  County-based purchasing under this section is 
  7.9   governed by section 256B.69, unless otherwise provided for under 
  7.10  this section. 
  7.11     Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] 
  7.12  Notwithstanding chapters 62D and 62N, a county that elects to 
  7.13  purchase medical assistance and general assistance medical care 
  7.14  in return for a fixed sum without regard to the frequency or 
  7.15  extent of services furnished to any particular enrollee is not 
  7.16  required to obtain a certificate of authority under chapter 62D 
  7.17  or 62N.  A county that elects to purchase medical assistance and 
  7.18  general assistance medical care services under this section must 
  7.19  satisfy the commissioner of health that the requirements of 
  7.20  chapter 62D, applicable to health maintenance organizations, or 
  7.21  chapter 62N, applicable to community integrated service 
  7.22  networks, will be met.  All enforcement and rulemaking powers 
  7.23  available under chapters 62D and 62N are hereby granted to the 
  7.24  commissioner of health with respect to counties that purchase 
  7.25  medical assistance and general assistance medical care services 
  7.26  under this section. 
  7.27     Subd. 3.  [REQUIREMENTS OF THE COUNTY BOARD.] A county 
  7.28  board that intends to purchase or provide health care under this 
  7.29  section, which may include purchasing all or part of these 
  7.30  services from health plans or individual providers on a 
  7.31  fee-for-service basis, or providing these services directly, 
  7.32  must demonstrate the ability to follow and agree to the 
  7.33  following requirements: 
  7.34     (1) purchase all covered services for a fixed payment from 
  7.35  the state that does not exceed the estimated state and federal 
  7.36  cost that would have occurred under the prepaid medical 
  8.1   assistance and general assistance medical care programs; 
  8.2      (2) ensure that covered services are accessible to all 
  8.3   enrollees and that enrollees have a choice of providers when 
  8.4   possible; 
  8.5      (3) issue payments to participating vendors or networks in 
  8.6   a timely manner; 
  8.7      (4) establish a process to ensure and improve the quality 
  8.8   of care provided; 
  8.9      (5) provide appropriate quality and other required data in 
  8.10  a format required by the state; 
  8.11     (6) provide a system for advocacy, enrollee protection, and 
  8.12  complaints and appeals that is independent of care providers or 
  8.13  other risk bearers and complies with section 256B.69; 
  8.14     (7) for counties within the seven-county metropolitan area, 
  8.15  ensure that the implementation and operation of the Minnesota 
  8.16  senior health options demonstration project, authorized under 
  8.17  section 256B.69, subdivision 23, will not be impeded; and 
  8.18     (8) ensure that all recipients that are enrolled in the 
  8.19  prepaid medical assistance or general assistance medical care 
  8.20  program will be transferred to county-based purchasing without 
  8.21  utilizing the department's fee-for-service claims payment system.
  8.22     Subd. 4.  [PAYMENTS TO COUNTIES.] The commissioner shall 
  8.23  pay counties that are purchasing or providing health care under 
  8.24  this section a per capita payment for all enrolled recipients.  
  8.25  Payments shall not exceed payments that otherwise would have 
  8.26  been paid to health plans under medical assistance and general 
  8.27  assistance medical care for that county or region.  This payment 
  8.28  is in addition to any administrative allocation to counties for 
  8.29  education, enrollment, and advocacy.  The state of Minnesota and 
  8.30  the United States Department of Health and Human Services are 
  8.31  not liable for any costs incurred by a county that exceed the 
  8.32  payments to the county made under this subdivision.  A county 
  8.33  may assign risk for the cost of care to a third party. 
  8.34     Subd. 5.  [COUNTY PROPOSALS.] (a) On or before September 1, 
  8.35  1997, a county board that wishes to purchase or provide health 
  8.36  care under this section must submit a preliminary proposal that 
  9.1   substantially demonstrates the county's ability to meet all the 
  9.2   requirements of this section in response to criteria for 
  9.3   proposals issued by the department on or before July 1, 1997.  
  9.4   The county board must submit a final proposal on or before July 
  9.5   1, 1998, that demonstrates the ability to meet all the 
  9.6   requirements of this section, including beginning enrollment on 
  9.7   January 1, 1999.  
  9.8      (b) After January 1, 1999, for a county in which the 
  9.9   prepaid medical assistance program is in existence, the county 
  9.10  board must submit a preliminary proposal at least 15 months 
  9.11  prior to termination of health plan contracts in that county and 
  9.12  a final proposal six months prior to the health plan contract 
  9.13  termination date in order to begin enrollment after the 
  9.14  termination.  Nothing in this section shall impede or delay 
  9.15  implementation or continuation of the prepaid medical assistance 
  9.16  and general assistance medical care programs in counties for 
  9.17  which the board does not submit a proposal, or submits a 
  9.18  proposal that is not in compliance with this section. 
  9.19     Subd. 6.  [COMMISSIONER'S AUTHORITY.] The commissioner may 
  9.20  reject any preliminary or final proposal that substantially 
  9.21  fails to meet the requirements of this section, or that the 
  9.22  commissioner determines would substantially impair the state's 
  9.23  ability to purchase health care services in other areas of the 
  9.24  state, or would substantially impair the implementation and 
  9.25  operation of the Minnesota senior health options demonstration 
  9.26  project authorized under section 256B.69, subdivision 23. 
  9.27     Subd. 7.  [DISPUTE RESOLUTION.] In the event the 
  9.28  commissioner rejects a proposal under subdivision 6, the county 
  9.29  board may request the recommendation of a three-person mediation 
  9.30  panel.  The commissioner shall resolve all disputes after taking 
  9.31  into account the recommendations of the mediation panel.  The 
  9.32  panel shall be composed of one designee of the president of the 
  9.33  association of Minnesota counties, one designee of the 
  9.34  commissioner of human services, and one designee of the 
  9.35  commissioner of health. 
  9.36     Subd. 8.  [APPEALS.] A county that conducts county-based 
 10.1   purchasing shall be considered to be a prepaid health plan for 
 10.2   purposes of section 256.045. 
 10.3      Subd. 9.  [FEDERAL APPROVAL.] The commissioner shall 
 10.4   request any federal waivers and federal approval required to 
 10.5   implement this section.  County-based purchasing shall not be 
 10.6   implemented without obtaining all federal approval required to 
 10.7   maintain federal matching funds in the medical assistance 
 10.8   program.