1.1 	A bill for an act
1.2 	relating to human services; limiting the expenses that can be allocated as 
1.3 	administrative for purposes of medical assistance rate setting;amending 
1.4 	Minnesota Statutes 2012, section 256B.69, subdivision 5i.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2012, section 256B.69, subdivision 5i, is amended to read:
1.7 		Subd. 5i.Administrative expenses. (a) Managed care plan and county-based 
1.8 	purchasing plan administrative costs for a prepaid health plan provided under this section 
1.9 	or section 256B.692 must not exceed by more than five percent that prepaid health plan's 
1.10 	or county-based purchasing plan's actual calculated administrative spending for the 
1.11 	previous calendar year as a percentage of total revenue. The penalty for exceeding this 
1.12 	limit must be the amount of administrative spending in excess of 105 percent of the actual 
1.13 	calculated amount. The commissioner may waive this penalty if the excess administrative 
1.14 	spending is the result of unexpected shifts in enrollment or member needs or new program 
1.15 	requirements.
1.16 	(b) ~~Expenses listed under section 62D.12, subdivision 9a, clause (4), are not~~ 
1.17 	~~allowable administrative expenses for rate-setting purposes under this section, unless~~ 
1.18 	~~approved by the commissioner.~~ The following expenses are not allowable administrative 
1.19 	expenses for rate-setting purposes under this section:
1.20 	(1) charitable contributions made by the managed care plan;
1.21 	(2) administrative expenses above an amount proportional to the percentage of the 
1.22 	plan's state public health program revenue; 
1.23 	(3) any marketing or advertising expenses; and
1.24 	(4) any expenses associated with lobbying public officials.