1.1                          A bill for an act 
  1.2             relating to human services; affecting medical 
  1.3             assistance, general assistance, MinnesotaCare, and 
  1.4             other state medical programs; providing for recovery 
  1.5             of subrogated health care payments; providing for 
  1.6             performance measurement study reports on health 
  1.7             services use, and providing for classification of 
  1.8             government data; providing for notice to recipients 
  1.9             concerning charges in medical assistance providers; 
  1.10            providing new grounds for sanctions against medical 
  1.11            assistance vendors, and for referral to a licensing 
  1.12            board; requiring vendors to disclose common interest 
  1.13            and ownership; providing federally required 
  1.14            restrictions on conflicts of interest in the Medicaid 
  1.15            procurement process, and providing criminal and civil 
  1.16            penalties including imprisonment; providing for new 
  1.17            procedures in probate proceedings in the case of 
  1.18            medical assistance claims against an estate; allowing 
  1.19            nursing homes to require residents to use certain 
  1.20            pharmacies; removing limitations from medical 
  1.21            assistance liens on real property and providing for 
  1.22            20-year renewal of liens; amending Minnesota Statutes 
  1.23            1998, sections 62A.04, subdivision 2; 62A.045; 
  1.24            256.015, subdivisions 1 and 3; 256B.042, subdivisions 
  1.25            1, 2, and 3; 256B.0627, subdivision 5; 256B.064, 
  1.26            subdivisions 1a, 1b, 1c, 2, and by adding a 
  1.27            subdivision; 256B.15, subdivision 1a; 256B.37, 
  1.28            subdivisions 1 and 2; 256B.48, subdivision 1; 256D.03, 
  1.29            subdivision 8; 256L.03, subdivision 6; 514.981, 
  1.30            subdivision 6; 524.3-801; and 525.312; proposing 
  1.31            coding for new law in Minnesota Statutes, chapters 
  1.32            256B; 524; and 525. 
  1.33  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.34     Section 1.  Minnesota Statutes 1998, section 62A.04, 
  1.35  subdivision 2, is amended to read: 
  1.36     Subd. 2.  [REQUIRED PROVISIONS.] Except as provided in 
  1.37  subdivision 4 each such policy delivered or issued for delivery 
  1.38  to any person in this state shall contain the provisions 
  1.39  specified in this subdivision in the words in which the same 
  2.1   appear in this section.  The insurer may, at its option, 
  2.2   substitute for one or more of such provisions corresponding 
  2.3   provisions of different wording approved by the commissioner 
  2.4   which are in each instance not less favorable in any respect to 
  2.5   the insured or the beneficiary.  Such provisions shall be 
  2.6   preceded individually by the caption appearing in this 
  2.7   subdivision or, at the option of the insurer, by such 
  2.8   appropriate individual or group captions or subcaptions as the 
  2.9   commissioner may approve. 
  2.10     (1) A provision as follows: 
  2.11     ENTIRE CONTRACT; CHANGES:  This policy, including the 
  2.12  endorsements and the attached papers, if any, constitutes the 
  2.13  entire contract of insurance.  No change in this policy shall be 
  2.14  valid until approved by an executive officer of the insurer and 
  2.15  unless such approval be endorsed hereon or attached hereto.  No 
  2.16  agent has authority to change this policy or to waive any of its 
  2.17  provisions. 
  2.18     (2) A provision as follows: 
  2.19     TIME LIMIT ON CERTAIN DEFENSES:  (a) After two years from 
  2.20  the date of issue of this policy no misstatements, except 
  2.21  fraudulent misstatements, made by the applicant in the 
  2.22  application for such policy shall be used to void the policy or 
  2.23  to deny a claim for loss incurred or disability (as defined in 
  2.24  the policy) commencing after the expiration of such two year 
  2.25  period. 
  2.26     The foregoing policy provision shall not be so construed as 
  2.27  to affect any legal requirement for avoidance of a policy or 
  2.28  denial of a claim during such initial two year period, nor to 
  2.29  limit the application of clauses (1), (2), (3), (4) and (5), in 
  2.30  the event of misstatement with respect to age or occupation or 
  2.31  other insurance.  A policy which the insured has the right to 
  2.32  continue in force subject to its terms by the timely payment of 
  2.33  premium (1) until at least age 50 or, (2) in the case of a 
  2.34  policy issued after age 44, for at least five years from its 
  2.35  date of issue, may contain in lieu of the foregoing the 
  2.36  following provisions (from which the clause in parentheses may 
  3.1   be omitted at the insurer's option) under the caption 
  3.2   "INCONTESTABLE": 
  3.3      After this policy has been in force for a period of two 
  3.4   years during the lifetime of the insured (excluding any period 
  3.5   during which the insured is disabled), it shall become 
  3.6   incontestable as to the statements contained in the application. 
  3.7      (b) No claim for loss incurred or disability (as defined in 
  3.8   the policy) commencing after two years from the date of issue of 
  3.9   this policy shall be reduced or denied on the ground that a 
  3.10  disease or physical condition not excluded from coverage by name 
  3.11  or specific description effective on the date of loss had 
  3.12  existed prior to the effective date of coverage of this policy. 
  3.13     (3) A provision as follows: 
  3.14     GRACE PERIOD:  A grace period of ..... (insert a number not 
  3.15  less than "7" for weekly premium policies, "10" for monthly 
  3.16  premium policies and "31" for all other policies) days will be 
  3.17  granted for the payment of each premium falling due after the 
  3.18  first premium, during which grace period the policy shall 
  3.19  continue in force. 
  3.20     A policy which contains a cancellation provision may add, 
  3.21  at the end of the above provision, 
  3.22     subject to the right of the insurer to cancel in accordance 
  3.23  with the cancellation provision hereof. 
  3.24     A policy in which the insurer reserves the right to refuse 
  3.25  any renewal shall have, at the beginning of the above provision, 
  3.26     Unless not less than five days prior to the premium due 
  3.27  date the insurer has delivered to the insured or has mailed to 
  3.28  the insured's last address as shown by the records of the 
  3.29  insurer written notice of its intention not to renew this policy 
  3.30  beyond the period for which the premium has been accepted. 
  3.31     (4) A provision as follows: 
  3.32     REINSTATEMENT:  If any renewal premium be not paid within 
  3.33  the time granted the insured for payment, a subsequent 
  3.34  acceptance of premium by the insurer or by any agent duly 
  3.35  authorized by the insurer to accept such premium, without 
  3.36  requiring in connection therewith an application for 
  4.1   reinstatement, shall reinstate the policy.  If the insurer or 
  4.2   such agent requires an application for reinstatement and issues 
  4.3   a conditional receipt for the premium tendered, the policy will 
  4.4   be reinstated upon approval of such application by the insurer 
  4.5   or, lacking such approval, upon the forty-fifth day following 
  4.6   the date of such conditional receipt unless the insurer has 
  4.7   previously notified the insured in writing of its disapproval of 
  4.8   such application.  For health plans described in section 
  4.9   62A.011, subdivision 3, clause (10), an insurer must accept 
  4.10  payment of a renewal premium and reinstate the policy, if the 
  4.11  insured applies for reinstatement no later than 60 days after 
  4.12  the due date for the premium payment, unless: 
  4.13     (1) the insured has in the interim left the state or the 
  4.14  insurer's service area; or 
  4.15     (2) the insured has applied for reinstatement on two or 
  4.16  more prior occasions. 
  4.17     The reinstated policy shall cover only loss resulting from 
  4.18  such accidental injury as may be sustained after the date of 
  4.19  reinstatement and loss due to such sickness as may begin more 
  4.20  than ten days after such date.  In all other respects the 
  4.21  insured and insurer shall have the same rights thereunder as 
  4.22  they had under the policy immediately before the due date of the 
  4.23  defaulted premium, subject to any provisions endorsed hereon or 
  4.24  attached hereto in connection with the reinstatement.  Any 
  4.25  premium accepted in connection with a reinstatement shall be 
  4.26  applied to a period for which premium has not been previously 
  4.27  paid, but not to any period more than 60 days prior to the date 
  4.28  of reinstatement.  The last sentence of the above provision may 
  4.29  be omitted from any policy which the insured has the right to 
  4.30  continue in force subject to its terms by the timely payment of 
  4.31  premiums (1) until at least age 50, or, (2) in the case of a 
  4.32  policy issued after age 44, for at least five years from its 
  4.33  date of issue. 
  4.34     (5) A provision as follows: 
  4.35     NOTICE OF CLAIM:  Written notice of claim must be given to 
  4.36  the insurer within 20 days after the occurrence or commencement 
  5.1   of any loss covered by the policy, or as soon thereafter as is 
  5.2   reasonably possible.  Notice given by or on behalf of the 
  5.3   insured or the beneficiary to the insurer at ..... (insert the 
  5.4   location of such office as the insurer may designate for the 
  5.5   purpose), or to any authorized agent of the insurer, with 
  5.6   information sufficient to identify the insured, shall be deemed 
  5.7   notice to the insurer. 
  5.8      In a policy providing a loss-of-time benefit which may be 
  5.9   payable for at least two years, an insurer may at its option 
  5.10  insert the following between the first and second sentences of 
  5.11  the above provision: 
  5.12     Subject to the qualifications set forth below, if the 
  5.13  insured suffers loss of time on account of disability for which 
  5.14  indemnity may be payable for at least two years, the insured 
  5.15  shall, at least once in every six months after having given 
  5.16  notice of claim, give to the insurer notice of continuance of 
  5.17  said disability, except in the event of legal incapacity.  The 
  5.18  period of six months following any filing of proof by the 
  5.19  insured or any payment by the insurer on account of such claim 
  5.20  or any denial of liability in whole or in part by the insurer 
  5.21  shall be excluded in applying this provision.  Delay in the 
  5.22  giving of such notice shall not impair the insured's right to 
  5.23  any indemnity which would otherwise have accrued during the 
  5.24  period of six months preceding the date on which such notice is 
  5.25  actually given. 
  5.26     (6) A provision as follows: 
  5.27     CLAIM FORMS:  The insurer, upon receipt of a notice of 
  5.28  claim, will furnish to the claimant such forms as are usually 
  5.29  furnished by it for filing proofs of loss.  If such forms are 
  5.30  not furnished within 15 days after the giving of such notice the 
  5.31  claimant shall be deemed to have complied with the requirements 
  5.32  of this policy as to proof of loss upon submitting, within the 
  5.33  time fixed in the policy for filing proofs of loss, written 
  5.34  proof covering the occurrence, the character and the extent of 
  5.35  the loss for which claim is made. 
  5.36     (7) A provision as follows: 
  6.1      PROOFS OF LOSS:  Written proof of loss must be furnished to 
  6.2   the insurer at its said office in case of claim for loss for 
  6.3   which this policy provides any periodic payment contingent upon 
  6.4   continuing loss within 90 days after the termination of the 
  6.5   period for which the insurer is liable and in case of claim for 
  6.6   any other loss within 90 days after the date of such loss.  
  6.7   Failure to furnish such proof within the time required shall not 
  6.8   invalidate nor reduce any claim if it was not reasonably 
  6.9   possible to give proof within such time, provided such proof is 
  6.10  furnished as soon as reasonably possible, and in no event, 
  6.11  except in the absence of legal capacity, later than one year 
  6.12  from the time proof is otherwise required, except in the absence 
  6.13  of legal capacity, or where payment has been made under state 
  6.14  medical programs no later than three years from the date the 
  6.15  service was rendered. 
  6.16     (8) A provision as follows: 
  6.17     TIME OF PAYMENT OF CLAIMS:  Indemnities payable under this 
  6.18  policy for any loss other than loss for which this policy 
  6.19  provides periodic payment will be paid immediately upon receipt 
  6.20  of due written proof of such loss.  Subject to due written proof 
  6.21  of loss, all accrued indemnities for loss for which this policy 
  6.22  provides periodic payment will be paid ..... (insert period for 
  6.23  payment which must not be less frequently than monthly) and any 
  6.24  balance remaining unpaid upon the termination of liability will 
  6.25  be paid immediately upon receipt of due written proof. 
  6.26     (9) A provision as follows: 
  6.27     PAYMENT OF CLAIMS:  Indemnity for loss of life will be 
  6.28  payable in accordance with the beneficiary designation and the 
  6.29  provisions respecting such payment which may be prescribed 
  6.30  herein and effective at the time of payment.  If no such 
  6.31  designation or provision is then effective, such indemnity shall 
  6.32  be payable to the estate of the insured. Any other accrued 
  6.33  indemnities unpaid at the insured's death may, at the option of 
  6.34  the insurer, be paid either to such beneficiary or to such 
  6.35  estate.  All other indemnities will be payable to the insured. 
  6.36     The following provisions, or either of them, may be 
  7.1   included with the foregoing provision at the option of the 
  7.2   insurer: 
  7.3      If any indemnity of this policy shall be payable to the 
  7.4   estate of the insured, or to an insured or beneficiary who is a 
  7.5   minor or otherwise not competent to give a valid release, the 
  7.6   insurer may pay such indemnity, up to an amount not exceeding 
  7.7   $..... (insert an amount which shall not exceed $1,000), to any 
  7.8   relative by blood or connection by marriage of the insured or 
  7.9   beneficiary who is deemed by the insurer to be equitably 
  7.10  entitled thereto.  Any payment made by the insurer in good faith 
  7.11  pursuant to this provision shall fully discharge the insurer to 
  7.12  the extent of such payment. 
  7.13     Subject to any written direction of the insured in the 
  7.14  application or otherwise all or a portion of any indemnities 
  7.15  provided by this policy on account of hospital, nursing, 
  7.16  medical, or surgical services may, at the insurer's option and 
  7.17  unless the insured requests otherwise in writing not later than 
  7.18  the time of filing proofs of such loss, be paid directly to the 
  7.19  hospital or person rendering such services; but it is not 
  7.20  required that the service be rendered by a particular hospital 
  7.21  or person. 
  7.22     (10) A provision as follows: 
  7.23     PHYSICAL EXAMINATIONS AND AUTOPSY:  The insurer at its own 
  7.24  expense shall have the right and opportunity to examine the 
  7.25  person of the insured when and as often as it may reasonably 
  7.26  require during the pendency of a claim hereunder and to make an 
  7.27  autopsy in case of death where it is not forbidden by law. 
  7.28     (11) A provision as follows: 
  7.29     LEGAL ACTIONS:  No action at law or in equity shall be 
  7.30  brought to recover on this policy prior to the expiration of 60 
  7.31  days after written proof of loss has been furnished in 
  7.32  accordance with the requirements of this policy.  No such action 
  7.33  shall be brought after the expiration of three years after the 
  7.34  time written proof of loss is required to be furnished. 
  7.35     (12) A provision as follows: 
  7.36     CHANGE OF BENEFICIARY:  Unless the insured makes an 
  8.1   irrevocable designation of beneficiary, the right to change of 
  8.2   beneficiary is reserved to the insured and the consent of the 
  8.3   beneficiary or beneficiaries shall not be requisite to surrender 
  8.4   or assignment of this policy or to any change of beneficiary or 
  8.5   beneficiaries, or to any other changes in this policy.  The 
  8.6   first clause of this provision, relating to the irrevocable 
  8.7   designation of beneficiary, may be omitted at the insurer's 
  8.8   option. 
  8.9      Sec. 2.  Minnesota Statutes 1998, section 62A.045, is 
  8.10  amended to read: 
  8.11     62A.045 [PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT 
  8.12  HEALTH PROGRAMS.] 
  8.13     (a) No health plan issued or renewed to provide coverage to 
  8.14  a Minnesota resident shall contain any provision denying or 
  8.15  reducing benefits because services are rendered to a person who 
  8.16  is eligible for or receiving medical benefits pursuant to title 
  8.17  XIX of the Social Security Act (Medicaid) in this or any other 
  8.18  state; chapter 256; 256B; or 256D or services pursuant to 
  8.19  section 252.27; 256L.01 to 256L.10; 260.251, subdivision 1a; or 
  8.20  393.07, subdivision 1 or 2.  No health carrier providing 
  8.21  benefits under plans covered by this section shall use 
  8.22  eligibility for medical programs named in this section as an 
  8.23  underwriting guideline or reason for nonacceptance of the risk. 
  8.24     (b) If payment for covered expenses has been made under 
  8.25  state medical programs for health care items or services 
  8.26  provided to an individual, and a third party has a legal 
  8.27  liability to make payments, the rights of payment and appeal of 
  8.28  an adverse coverage decision for the individual, or in the case 
  8.29  of a child their responsible relative or caretaker, will be 
  8.30  subrogated to the state and/or its authorized agent agency.  The 
  8.31  state agency may assert its subrogation rights to payment under 
  8.32  this section within three years of the date the service was 
  8.33  rendered.  For purposes of this section, "state agency" includes 
  8.34  prepaid health plans under contract with the department 
  8.35  according to sections 256B.69, 256D.03, subdivision 4, paragraph 
  8.36  (d), and 256L.12; children's mental health collaboratives under 
  9.1   section 245.493; demonstration projects for persons with 
  9.2   disabilities under section 256B.77; nursing homes under the 
  9.3   alternative payment demonstration project under section 
  9.4   256B.434; and county-based purchasing entities under section 
  9.5   256B.692.  
  9.6      (c) Notwithstanding any law to the contrary, when a person 
  9.7   covered by a health plan receives medical benefits according to 
  9.8   any statute listed in this section, payment for covered services 
  9.9   or notice of denial for services billed by the provider must be 
  9.10  issued directly to the provider.  If a person was receiving 
  9.11  medical benefits through the department of human services at the 
  9.12  time a service was provided, the provider must indicate this 
  9.13  benefit coverage on any claim forms submitted by the provider to 
  9.14  the health carrier for those services.  If the commissioner of 
  9.15  human services notifies the health carrier that the commissioner 
  9.16  has made payments to the provider, payment for benefits or 
  9.17  notices of denials issued by the health carrier must be issued 
  9.18  directly to the commissioner.  Submission by the department to 
  9.19  the health carrier of the claim on a department of human 
  9.20  services claim form is proper notice and shall be considered 
  9.21  proof of payment of the claim to the provider and supersedes any 
  9.22  contract requirements of the health carrier relating to the form 
  9.23  of submission.  Liability to the insured for coverage is 
  9.24  satisfied to the extent that payments for those benefits are 
  9.25  made by the health carrier to the provider or the commissioner 
  9.26  as required by this section. 
  9.27     (d) When a state agency has acquired the rights of an 
  9.28  individual eligible for medical programs named in this section 
  9.29  and has health benefits coverage through a health carrier, the 
  9.30  health carrier shall not impose requirements that are different 
  9.31  from requirements applicable to an agent or assignee of any 
  9.32  other individual covered. 
  9.33     (e) For the purpose of this section, health plan includes 
  9.34  coverage offered by community integrated service networks, any 
  9.35  plan governed under the federal Employee Retirement Income 
  9.36  Security Act of 1974 (ERISA), United States Code, title 29, 
 10.1   sections 1001 to 1461, and coverage offered under the exclusions 
 10.2   listed in section 62A.011, subdivision 3, clauses (2), (6), (9), 
 10.3   (10), and (12).  
 10.4      Sec. 3.  Minnesota Statutes 1998, section 256.015, 
 10.5   subdivision 1, is amended to read: 
 10.6      Subdivision 1.  [STATE AGENCY HAS LIEN.] When the state 
 10.7   agency provides, pays for, or becomes liable for medical care or 
 10.8   furnishes subsistence or other payments to a person, the agency 
 10.9   shall have a lien for the cost of the care and payments on any 
 10.10  and all causes of action or recovery rights under any policy, 
 10.11  plan, or contract providing benefits for health care or injury 
 10.12  which accrue to the person to whom the care or payments were 
 10.13  furnished, or to the person's legal representatives, as a result 
 10.14  of the occurrence that necessitated the medical care, 
 10.15  subsistence, or other payments.  For purposes of this section, 
 10.16  "state agency" includes authorized agents of the state agency 
 10.17  prepaid health plans under contract with the department 
 10.18  according to sections 256B.69; 256D.03, subdivision 4, paragraph 
 10.19  (d); and 256L.12, children's mental health collaboratives under 
 10.20  section 245.493, demonstration projects for persons with 
 10.21  disabilities under section 256B.77, nursing homes under the 
 10.22  alternative payment demonstration project under section 
 10.23  256B.434, and county-based purchasing entities under section 
 10.24  256B.692. 
 10.25     Sec. 4.  Minnesota Statutes 1998, section 256.015, 
 10.26  subdivision 3, is amended to read: 
 10.27     Subd. 3.  [PROSECUTOR.] The attorney general, or the 
 10.28  appropriate county attorney acting at the direction of the 
 10.29  attorney general, the prepaid health plan providing services 
 10.30  under sections 256B.69, 256D.03, subdivision 4, paragraph (d), 
 10.31  and 256L.12; children's mental health collaboratives under 
 10.32  section 245.493; demonstration projects for persons with 
 10.33  disabilities under section 256B.77; nursing homes under the 
 10.34  alternative payment demonstration project under section 
 10.35  256B.434; or the county-based purchasing entity providing 
 10.36  services under section 256B.692 shall represent the state agency 
 11.1   to enforce the lien created under this section or, if no action 
 11.2   has been brought, may initiate and prosecute an independent 
 11.3   action on behalf of the state agency against a person, firm, or 
 11.4   corporation that may be liable to the person to whom the care or 
 11.5   payment was furnished. 
 11.6      Sec. 5.  [256B.033] [PERFORMANCE MEASUREMENT STUDY 
 11.7   REPORTS.] 
 11.8      Subdivision 1.  [DEFINITION.] For purposes of this section, 
 11.9   "performance measurement study reports" means reports related to 
 11.10  the use of health care services by, and the provision of health 
 11.11  care services to, recipients of medical assistance, general 
 11.12  assistance medical care, and MinnesotaCare developed by the 
 11.13  commissioner of human services.  The term includes, but is not 
 11.14  limited to, studies on encounter, performance, effectiveness of 
 11.15  care, equality improvement, utilization rates, medical record 
 11.16  audits, corrective actions, and enrollee surveys. 
 11.17     Subd. 2.  [DATA PROTECTION.] Data collected for and 
 11.18  included in performance measurement study reports that identify 
 11.19  individual recipients are private data on individuals.  Summary 
 11.20  data collected to complete performance measurement study reports 
 11.21  and summary data contained within those study reports may be 
 11.22  disseminated under section 13.05, subdivision 7. 
 11.23     Subd. 3.  [REVIEW PRIOR TO PUBLICATION.] The commissioner 
 11.24  may publish reports developed from performance measurement 
 11.25  studies, so long as individual recipients are not identifiable.  
 11.26  The published report, and any related analysis, must be based on 
 11.27  scientifically sound and statistically valid methods and include 
 11.28  a description of the methodology used for analysis.  The 
 11.29  commissioner shall not reveal the name of a health plan, managed 
 11.30  care organization, or an individual health care vendor until the 
 11.31  health plan, managed care organization, or vendor has had 30 
 11.32  calendar days to review the report and comment on it.  Within 
 11.33  the 30 days, a health plan, managed care organization, or health 
 11.34  care vendor may comment to the commissioner on whether the study 
 11.35  and the analysis to be released are based on scientifically 
 11.36  sound and statistically valid methods.  The written comments 
 12.1   must include the argument, analysis, and supporting material for 
 12.2   contesting the commissioner's research methods.  The 
 12.3   commissioner will review and consider the written comments 
 12.4   before publishing the report.  The commissioner shall include 
 12.5   with the released report a summary of the comments received from 
 12.6   the health plan, managed care organization, or vendor related to 
 12.7   the scientific soundness and statistical validity of the methods 
 12.8   used in the analysis. 
 12.9      Sec. 6.  Minnesota Statutes 1998, section 256B.042, 
 12.10  subdivision 1, is amended to read: 
 12.11     Subdivision 1.  [LIEN FOR COST OF CARE.] When the state 
 12.12  agency provides, pays for, or becomes liable for medical care, 
 12.13  it shall have a lien for the cost of the care upon any and all 
 12.14  causes of action or recovery rights under any policy, plan, or 
 12.15  contract providing benefits for health care or injury, which 
 12.16  accrue to the person to whom the care was furnished, or to the 
 12.17  person's legal representatives, as a result of the illness or 
 12.18  injuries which necessitated the medical care.  For purposes of 
 12.19  this section, "state agency" includes prepaid health plans under 
 12.20  contract with the department according to sections 256B.69, 
 12.21  256D.03, subdivision 4, paragraph (d), and 256L.12; children's 
 12.22  mental health collaboratives under section 245.493; 
 12.23  demonstration projects for persons with disabilities under 
 12.24  section 256B.77; nursing homes under the alternative payment 
 12.25  demonstration project under section 256B.434; and county-based 
 12.26  purchasing entities under section 256B.692. 
 12.27     Sec. 7.  Minnesota Statutes 1998, section 256B.042, 
 12.28  subdivision 2, is amended to read: 
 12.29     Subd. 2.  [LIEN ENFORCEMENT.] (a) The state agency may 
 12.30  perfect and enforce its lien by following the procedures set 
 12.31  forth in sections 514.69, 514.70 and 514.71, and its verified 
 12.32  lien statement shall be filed with the appropriate court 
 12.33  administrator in the county of financial responsibility.  The 
 12.34  verified lien statement shall contain the following:  the name 
 12.35  and address of the person to whom medical care was furnished, 
 12.36  the date of injury, the name and address of the vendor or 
 13.1   vendors furnishing medical care, the dates of the service, the 
 13.2   amount claimed to be due for the care, and, to the best of the 
 13.3   state agency's knowledge, the names and addresses of all 
 13.4   persons, firms, or corporations claimed to be liable for damages 
 13.5   arising from the injuries.  This section shall not affect the 
 13.6   priority of any attorney's lien.  
 13.7      (b) The state agency is not subject to any limitations 
 13.8   period referred to in section 514.69 or 514.71 and has one year 
 13.9   from the date notice is first received by it under subdivision 
 13.10  4, paragraph (c), even if the notice is untimely, or one year 
 13.11  from the date medical bills are first paid by the state agency, 
 13.12  whichever is later, to file its verified lien statement.  The 
 13.13  state agency may commence an action to enforce the lien within 
 13.14  one year of (1) the date the notice required by subdivision 4, 
 13.15  paragraph (c), is received or (2) the date the recipient's cause 
 13.16  of action is concluded by judgment, award, settlement, or 
 13.17  otherwise, whichever is later.  For purposes of this section, 
 13.18  "state agency" includes authorized agents of the state agency. 
 13.19     (c) If the notice required in subdivision 4 is not provided 
 13.20  by any of the parties to the claim at any stage of the claim, 
 13.21  the state agency will have one year from the date the state 
 13.22  agency learns of the lack of notice to commence an action.  If 
 13.23  amounts on the claim or cause of action are paid and the amount 
 13.24  required to be paid to the state agency under subdivision 5, is 
 13.25  not paid to the state agency, the state agency may commence an 
 13.26  action to recover on the lien against any or all of the parties 
 13.27  or entities which have either paid or received the payments. 
 13.28     Sec. 8.  Minnesota Statutes 1998, section 256B.042, 
 13.29  subdivision 3, is amended to read: 
 13.30     Subd. 3.  The attorney general, or the appropriate county 
 13.31  attorney acting at the direction of the attorney general, the 
 13.32  prepaid health plan providing services under sections 256B.69, 
 13.33  256D.03, subdivision 4, paragraph (d), and 256L.12; children's 
 13.34  mental health collaboratives under section 245.493; 
 13.35  demonstration projects for persons with disabilities under 
 13.36  section 256B.77; nursing homes under the alternative payment 
 14.1   demonstration project under section 256B.434; or the 
 14.2   county-based purchasing entity providing services under section 
 14.3   256B.692 shall represent the state agency to enforce the lien 
 14.4   created under this section or, if no action has been brought, 
 14.5   may initiate and prosecute an independent action on behalf of 
 14.6   the state agency against a person, firm, or corporation that may 
 14.7   be liable to the person to whom the care was furnished. 
 14.8      Sec. 9.  Minnesota Statutes 1998, section 256B.0627, 
 14.9   subdivision 5, is amended to read: 
 14.10     Subd. 5.  [LIMITATION ON PAYMENTS.] Medical assistance 
 14.11  payments for home care services shall be limited according to 
 14.12  this subdivision.  
 14.13     (a)  [LIMITS ON SERVICES WITHOUT PRIOR AUTHORIZATION.] A 
 14.14  recipient may receive the following home care services during a 
 14.15  calendar year: 
 14.16     (1) any initial assessment; 
 14.17     (2) up to two reassessments per year done to determine a 
 14.18  recipient's need for personal care services; and 
 14.19     (3) up to five skilled nurse visits.  
 14.20     (b)  [PRIOR AUTHORIZATION; EXCEPTIONS.] All home care 
 14.21  services above the limits in paragraph (a) must receive the 
 14.22  commissioner's prior authorization, except when: 
 14.23     (1) the home care services were required to treat an 
 14.24  emergency medical condition that if not immediately treated 
 14.25  could cause a recipient serious physical or mental disability, 
 14.26  continuation of severe pain, or death.  The provider must 
 14.27  request retroactive authorization no later than five working 
 14.28  days after giving the initial service.  The provider must be 
 14.29  able to substantiate the emergency by documentation such as 
 14.30  reports, notes, and admission or discharge histories; 
 14.31     (2) the home care services were provided on or after the 
 14.32  date on which the recipient's eligibility began, but before the 
 14.33  date on which the recipient was notified that the case was 
 14.34  opened.  Authorization will be considered if the request is 
 14.35  submitted by the provider within 20 working days of the date the 
 14.36  recipient was notified that the case was opened; 
 15.1      (3) a third-party payor for home care services has denied 
 15.2   or adjusted a payment.  Authorization requests must be submitted 
 15.3   by the provider within 20 working days of the notice of denial 
 15.4   or adjustment.  A copy of the notice must be included with the 
 15.5   request; 
 15.6      (4) the commissioner has determined that a county or state 
 15.7   human services agency has made an error; or 
 15.8      (5) the professional nurse determines an immediate need for 
 15.9   up to 40 skilled nursing or home health aide visits per calendar 
 15.10  year and submits a request for authorization within 20 working 
 15.11  days of the initial service date, and medical assistance is 
 15.12  determined to be the appropriate payer. 
 15.13     A request for retroactive authorization under any of the 
 15.14  circumstances of clauses (1) to (5) shall be evaluated according 
 15.15  to the same criteria applied to prior authorization requests. 
 15.16     (c)  [RETROACTIVE AUTHORIZATION NOTICE OF CHANGE OF 
 15.17  PROVIDER.] A request Requests for retroactive 
 15.18  authorization will be evaluated according to the same criteria 
 15.19  applied to prior authorization requests. from providers of home 
 15.20  care or home and community-based services in cases where an 
 15.21  authorization currently exists, and the request changes the 
 15.22  authorization from the current provider to a different provider, 
 15.23  may be granted upon a showing to the commissioner that a notice 
 15.24  has been sent to the recipient informing the recipient that the 
 15.25  service provider will be changing.  The notice to recipients 
 15.26  must identify the name of the current service provider, the name 
 15.27  and telephone number of the new service provider, and the date 
 15.28  of the change in service. 
 15.29     (d)  [ASSESSMENT AND SERVICE PLAN.] Assessments under 
 15.30  section 256B.0627, subdivision 1, paragraph (a), shall be 
 15.31  conducted initially, and at least annually thereafter, in person 
 15.32  with the recipient and result in a completed service plan using 
 15.33  forms specified by the commissioner.  Within 30 days of 
 15.34  recipient or responsible party request for home care services, 
 15.35  the assessment, the service plan, and other information 
 15.36  necessary to determine medical necessity such as diagnostic or 
 16.1   testing information, social or medical histories, and hospital 
 16.2   or facility discharge summaries shall be submitted to the 
 16.3   commissioner.  For personal care services: 
 16.4      (1) The amount and type of service authorized based upon 
 16.5   the assessment and service plan will follow the recipient if the 
 16.6   recipient chooses to change providers.  
 16.7      (2) If the recipient's medical need changes, the 
 16.8   recipient's provider may assess the need for a change in service 
 16.9   authorization and request the change from the county public 
 16.10  health nurse.  Within 30 days of the request, the public health 
 16.11  nurse will determine whether to request the change in services 
 16.12  based upon the provider assessment, or conduct a home visit to 
 16.13  assess the need and determine whether the change is appropriate. 
 16.14     (3) To continue to receive personal care services after the 
 16.15  first year, the recipient or the responsible party, in 
 16.16  conjunction with the public health nurse, may complete a service 
 16.17  update on forms developed by the commissioner.  The service 
 16.18  update may substitute for the annual reassessment described in 
 16.19  subdivision 1. 
 16.20     (e)  [PRIOR AUTHORIZATION.] The commissioner, or the 
 16.21  commissioner's designee, shall review the assessment, the 
 16.22  service plan, and any additional information that is submitted.  
 16.23  The commissioner shall, within 30 days after receiving a 
 16.24  complete request, assessment, and service plan, authorize home 
 16.25  care services as follows:  
 16.26     (1)  [HOME HEALTH SERVICES.] All home health services 
 16.27  provided by a licensed nurse or a home health aide must be prior 
 16.28  authorized by the commissioner or the commissioner's designee.  
 16.29  Prior authorization must be based on medical necessity and 
 16.30  cost-effectiveness when compared with other care options.  When 
 16.31  home health services are used in combination with personal care 
 16.32  and private duty nursing, the cost of all home care services 
 16.33  shall be considered for cost-effectiveness.  The commissioner 
 16.34  shall limit nurse and home health aide visits to no more than 
 16.35  one visit each per day. 
 16.36     (2)  [PERSONAL CARE SERVICES.] (i) All personal care 
 17.1   services and registered nurse supervision must be prior 
 17.2   authorized by the commissioner or the commissioner's designee 
 17.3   except for the assessments established in paragraph (a).  The 
 17.4   amount of personal care services authorized must be based on the 
 17.5   recipient's home care rating.  A child may not be found to be 
 17.6   dependent in an activity of daily living if because of the 
 17.7   child's age an adult would either perform the activity for the 
 17.8   child or assist the child with the activity and the amount of 
 17.9   assistance needed is similar to the assistance appropriate for a 
 17.10  typical child of the same age.  Based on medical necessity, the 
 17.11  commissioner may authorize: 
 17.12     (A) up to two times the average number of direct care hours 
 17.13  provided in nursing facilities for the recipient's comparable 
 17.14  case mix level; or 
 17.15     (B) up to three times the average number of direct care 
 17.16  hours provided in nursing facilities for recipients who have 
 17.17  complex medical needs or are dependent in at least seven 
 17.18  activities of daily living and need physical assistance with 
 17.19  eating or have a neurological diagnosis; or 
 17.20     (C) up to 60 percent of the average reimbursement rate, as 
 17.21  of July 1, 1991, for care provided in a regional treatment 
 17.22  center for recipients who have Level I behavior, plus any 
 17.23  inflation adjustment as provided by the legislature for personal 
 17.24  care service; or 
 17.25     (D) up to the amount the commissioner would pay, as of July 
 17.26  1, 1991, plus any inflation adjustment provided for home care 
 17.27  services, for care provided in a regional treatment center for 
 17.28  recipients referred to the commissioner by a regional treatment 
 17.29  center preadmission evaluation team.  For purposes of this 
 17.30  clause, home care services means all services provided in the 
 17.31  home or community that would be included in the payment to a 
 17.32  regional treatment center; or 
 17.33     (E) up to the amount medical assistance would reimburse for 
 17.34  facility care for recipients referred to the commissioner by a 
 17.35  preadmission screening team established under section 256B.0911 
 17.36  or 256B.092; and 
 18.1      (F) a reasonable amount of time for the provision of 
 18.2   nursing supervision of personal care services.  
 18.3      (ii) The number of direct care hours shall be determined 
 18.4   according to the annual cost report submitted to the department 
 18.5   by nursing facilities.  The average number of direct care hours, 
 18.6   as established by May 1, 1992, shall be calculated and 
 18.7   incorporated into the home care limits on July 1, 1992.  These 
 18.8   limits shall be calculated to the nearest quarter hour. 
 18.9      (iii) The home care rating shall be determined by the 
 18.10  commissioner or the commissioner's designee based on information 
 18.11  submitted to the commissioner by the county public health nurse 
 18.12  on forms specified by the commissioner.  The home care rating 
 18.13  shall be a combination of current assessment tools developed 
 18.14  under sections 256B.0911 and 256B.501 with an addition for 
 18.15  seizure activity that will assess the frequency and severity of 
 18.16  seizure activity and with adjustments, additions, and 
 18.17  clarifications that are necessary to reflect the needs and 
 18.18  conditions of recipients who need home care including children 
 18.19  and adults under 65 years of age.  The commissioner shall 
 18.20  establish these forms and protocols under this section and shall 
 18.21  use an advisory group, including representatives of recipients, 
 18.22  providers, and counties, for consultation in establishing and 
 18.23  revising the forms and protocols. 
 18.24     (iv) A recipient shall qualify as having complex medical 
 18.25  needs if the care required is difficult to perform and because 
 18.26  of recipient's medical condition requires more time than 
 18.27  community-based standards allow or requires more skill than 
 18.28  would ordinarily be required and the recipient needs or has one 
 18.29  or more of the following: 
 18.30     (A) daily tube feedings; 
 18.31     (B) daily parenteral therapy; 
 18.32     (C) wound or decubiti care; 
 18.33     (D) postural drainage, percussion, nebulizer treatments, 
 18.34  suctioning, tracheotomy care, oxygen, mechanical ventilation; 
 18.35     (E) catheterization; 
 18.36     (F) ostomy care; 
 19.1      (G) quadriplegia; or 
 19.2      (H) other comparable medical conditions or treatments the 
 19.3   commissioner determines would otherwise require institutional 
 19.4   care.  
 19.5      (v) A recipient shall qualify as having Level I behavior if 
 19.6   there is reasonable supporting evidence that the recipient 
 19.7   exhibits, or that without supervision, observation, or 
 19.8   redirection would exhibit, one or more of the following 
 19.9   behaviors that cause, or have the potential to cause: 
 19.10     (A) injury to the recipient's own body; 
 19.11     (B) physical injury to other people; or 
 19.12     (C) destruction of property. 
 19.13     (vi) Time authorized for personal care relating to Level I 
 19.14  behavior in subclause (v), items (A) to (C), shall be based on 
 19.15  the predictability, frequency, and amount of intervention 
 19.16  required. 
 19.17     (vii) A recipient shall qualify as having Level II behavior 
 19.18  if the recipient exhibits on a daily basis one or more of the 
 19.19  following behaviors that interfere with the completion of 
 19.20  personal care services under subdivision 4, paragraph (a): 
 19.21     (A) unusual or repetitive habits; 
 19.22     (B) withdrawn behavior; or 
 19.23     (C) offensive behavior. 
 19.24     (viii) A recipient with a home care rating of Level II 
 19.25  behavior in subclause (vii), items (A) to (C), shall be rated as 
 19.26  comparable to a recipient with complex medical needs under 
 19.27  subclause (iv).  If a recipient has both complex medical needs 
 19.28  and Level II behavior, the home care rating shall be the next 
 19.29  complex category up to the maximum rating under subclause (i), 
 19.30  item (B). 
 19.31     (3)  [PRIVATE DUTY NURSING SERVICES.] All private duty 
 19.32  nursing services shall be prior authorized by the commissioner 
 19.33  or the commissioner's designee.  Prior authorization for private 
 19.34  duty nursing services shall be based on medical necessity and 
 19.35  cost-effectiveness when compared with alternative care options.  
 19.36  The commissioner may authorize medically necessary private duty 
 20.1   nursing services in quarter-hour units when: 
 20.2      (i) the recipient requires more individual and continuous 
 20.3   care than can be provided during a nurse visit; or 
 20.4      (ii) the cares are outside of the scope of services that 
 20.5   can be provided by a home health aide or personal care assistant.
 20.6      The commissioner may authorize: 
 20.7      (A) up to two times the average amount of direct care hours 
 20.8   provided in nursing facilities statewide for case mix 
 20.9   classification "K" as established by the annual cost report 
 20.10  submitted to the department by nursing facilities in May 1992; 
 20.11     (B) private duty nursing in combination with other home 
 20.12  care services up to the total cost allowed under clause (2); 
 20.13     (C) up to 16 hours per day if the recipient requires more 
 20.14  nursing than the maximum number of direct care hours as 
 20.15  established in item (A) and the recipient meets the hospital 
 20.16  admission criteria established under Minnesota Rules, parts 
 20.17  9505.0500 to 9505.0540.  
 20.18     The commissioner may authorize up to 16 hours per day of 
 20.19  medically necessary private duty nursing services or up to 24 
 20.20  hours per day of medically necessary private duty nursing 
 20.21  services until such time as the commissioner is able to make a 
 20.22  determination of eligibility for recipients who are 
 20.23  cooperatively applying for home care services under the 
 20.24  community alternative care program developed under section 
 20.25  256B.49, or until it is determined by the appropriate regulatory 
 20.26  agency that a health benefit plan is or is not required to pay 
 20.27  for appropriate medically necessary health care services.  
 20.28  Recipients or their representatives must cooperatively assist 
 20.29  the commissioner in obtaining this determination.  Recipients 
 20.30  who are eligible for the community alternative care program may 
 20.31  not receive more hours of nursing under this section than would 
 20.32  otherwise be authorized under section 256B.49. 
 20.33     (4)  [VENTILATOR-DEPENDENT RECIPIENTS.] If the recipient is 
 20.34  ventilator-dependent, the monthly medical assistance 
 20.35  authorization for home care services shall not exceed what the 
 20.36  commissioner would pay for care at the highest cost hospital 
 21.1   designated as a long-term hospital under the Medicare program.  
 21.2   For purposes of this clause, home care services means all 
 21.3   services provided in the home that would be included in the 
 21.4   payment for care at the long-term hospital.  
 21.5   "Ventilator-dependent" means an individual who receives 
 21.6   mechanical ventilation for life support at least six hours per 
 21.7   day and is expected to be or has been dependent for at least 30 
 21.8   consecutive days.  
 21.9      (f)  [PRIOR AUTHORIZATION; TIME LIMITS.] The commissioner 
 21.10  or the commissioner's designee shall determine the time period 
 21.11  for which a prior authorization shall be effective.  If the 
 21.12  recipient continues to require home care services beyond the 
 21.13  duration of the prior authorization, the home care provider must 
 21.14  request a new prior authorization.  Under no circumstances, 
 21.15  other than the exceptions in paragraph (b), shall a prior 
 21.16  authorization be valid prior to the date the commissioner 
 21.17  receives the request or for more than 12 months.  A recipient 
 21.18  who appeals a reduction in previously authorized home care 
 21.19  services may continue previously authorized services, other than 
 21.20  temporary services under paragraph (h), pending an appeal under 
 21.21  section 256.045.  The commissioner must provide a detailed 
 21.22  explanation of why the authorized services are reduced in amount 
 21.23  from those requested by the home care provider.  
 21.24     (g)  [APPROVAL OF HOME CARE SERVICES.] The commissioner or 
 21.25  the commissioner's designee shall determine the medical 
 21.26  necessity of home care services, the level of caregiver 
 21.27  according to subdivision 2, and the institutional comparison 
 21.28  according to this subdivision, the cost-effectiveness of 
 21.29  services, and the amount, scope, and duration of home care 
 21.30  services reimbursable by medical assistance, based on the 
 21.31  assessment, primary payer coverage determination information as 
 21.32  required, the service plan, the recipient's age, the cost of 
 21.33  services, the recipient's medical condition, and diagnosis or 
 21.34  disability.  The commissioner may publish additional criteria 
 21.35  for determining medical necessity according to section 256B.04. 
 21.36     (h)  [PRIOR AUTHORIZATION REQUESTS; TEMPORARY SERVICES.] 
 22.1   The agency nurse, the independently enrolled private duty nurse, 
 22.2   or county public health nurse may request a temporary 
 22.3   authorization for home care services by telephone.  The 
 22.4   commissioner may approve a temporary level of home care services 
 22.5   based on the assessment, and service or care plan information, 
 22.6   and primary payer coverage determination information as required.
 22.7   Authorization for a temporary level of home care services 
 22.8   including nurse supervision is limited to the time specified by 
 22.9   the commissioner, but shall not exceed 45 days, unless extended 
 22.10  because the county public health nurse has not completed the 
 22.11  required assessment and service plan, or the commissioner's 
 22.12  determination has not been made.  The level of services 
 22.13  authorized under this provision shall have no bearing on a 
 22.14  future prior authorization. 
 22.15     (i)  [PRIOR AUTHORIZATION REQUIRED IN FOSTER CARE SETTING.] 
 22.16  Home care services provided in an adult or child foster care 
 22.17  setting must receive prior authorization by the department 
 22.18  according to the limits established in paragraph (a). 
 22.19     The commissioner may not authorize: 
 22.20     (1) home care services that are the responsibility of the 
 22.21  foster care provider under the terms of the foster care 
 22.22  placement agreement and administrative rules.  Requests for home 
 22.23  care services for recipients residing in a foster care setting 
 22.24  must include the foster care placement agreement and 
 22.25  determination of difficulty of care; 
 22.26     (2) personal care services when the foster care license 
 22.27  holder is also the personal care provider or personal care 
 22.28  assistant unless the recipient can direct the recipient's own 
 22.29  care, or case management is provided as required in section 
 22.30  256B.0625, subdivision 19a; 
 22.31     (3) personal care services when the responsible party is an 
 22.32  employee of, or under contract with, or has any direct or 
 22.33  indirect financial relationship with the personal care provider 
 22.34  or personal care assistant, unless case management is provided 
 22.35  as required in section 256B.0625, subdivision 19a; 
 22.36     (4) home care services when the number of foster care 
 23.1   residents is greater than four unless the county responsible for 
 23.2   the recipient's foster placement made the placement prior to 
 23.3   April 1, 1992, requests that home care services be provided, and 
 23.4   case management is provided as required in section 256B.0625, 
 23.5   subdivision 19a; or 
 23.6      (5) home care services when combined with foster care 
 23.7   payments, other than room and board payments that exceed the 
 23.8   total amount that public funds would pay for the recipient's 
 23.9   care in a medical institution. 
 23.10     Sec. 10.  Minnesota Statutes 1998, section 256B.064, 
 23.11  subdivision 1a, is amended to read: 
 23.12     Subd. 1a.  [GROUNDS FOR MONETARY RECOVERY AND SANCTIONS 
 23.13  AGAINST VENDORS.] The commissioner may seek monetary recovery 
 23.14  and impose sanctions against vendors a vendor of medical care 
 23.15  for any of the following:  fraud, theft, or abuse in connection 
 23.16  with the provision of medical care to recipients of public 
 23.17  assistance; a pattern of presentment of false or duplicate 
 23.18  claims or claims for services not medically necessary; a pattern 
 23.19  of making false statements of material facts for the purpose of 
 23.20  obtaining greater compensation than that to which the vendor is 
 23.21  legally entitled; suspension or termination as a Medicare 
 23.22  vendor; refusal to grant the state agency access during regular 
 23.23  business hours to examine all records necessary to disclose the 
 23.24  extent of services provided to program recipients and 
 23.25  appropriateness of claims for payment; failure to comply with a 
 23.26  commissioner's order to repay an overpayment; failure to comply 
 23.27  with a settlement agreement; failure to comply with the 
 23.28  disclosure requirements of section 256B.0646; and any reason for 
 23.29  which a vendor could be excluded from participation in the 
 23.30  Medicare program under section 1128, 1128A, or 1866(b)(2) of the 
 23.31  Social Security Act.  The determination of services not 
 23.32  medically necessary may be made by the commissioner in 
 23.33  consultation with a peer advisory task force appointed by the 
 23.34  commissioner on the recommendation of appropriate professional 
 23.35  organizations.  The task force expires as provided in section 
 23.36  15.059, subdivision 5. 
 24.1      Sec. 11.  Minnesota Statutes 1998, section 256B.064, 
 24.2   subdivision 1b, is amended to read: 
 24.3      Subd. 1b.  [SANCTIONS AVAILABLE.] The commissioner may 
 24.4   impose the following sanctions for the conduct described in 
 24.5   subdivision 1a:  referral to the appropriate state licensing 
 24.6   board, suspension or withholding of payments to a vendor, and 
 24.7   suspending or terminating participation in the 
 24.8   program.  Regardless of imposition of sanctions, the 
 24.9   commissioner may make a referral to the appropriate state 
 24.10  licensing board. 
 24.11     Sec. 12.  Minnesota Statutes 1998, section 256B.064, 
 24.12  subdivision 1c, is amended to read: 
 24.13     Subd. 1c.  [GROUNDS FOR AND METHODS OF MONETARY RECOVERY.] 
 24.14  The commissioner may obtain monetary recovery from a vendor who 
 24.15  has been improperly paid either as a result of conduct described 
 24.16  in subdivision 1a or as a result of a vendor or department 
 24.17  error, regardless of whether the error was 
 24.18  intentional.  Patterns need not be proven as a precondition to 
 24.19  monetary recovery of erroneous or false claims, duplicate 
 24.20  claims, claims for services not medically necessary, or claims 
 24.21  based on false statements.  The commissioner may obtain monetary 
 24.22  recovery using methods, including but not limited to the 
 24.23  following:  assessing and recovering money improperly paid and 
 24.24  debiting from future payments any money improperly 
 24.25  paid.  Patterns need not be proven as a precondition to monetary 
 24.26  recovery of erroneous or false claims, duplicate claims, claims 
 24.27  for services not medically necessary, or claims based on false 
 24.28  statements.  The commissioner shall charge interest on money to 
 24.29  be recovered if the recovery is to be made by installment 
 24.30  payments or debits, except when the monetary recovery is of an 
 24.31  overpayment that resulted from a department error.  The interest 
 24.32  charged shall be the rate established by the commissioner of 
 24.33  revenue under section 270.75.  
 24.34     Sec. 13.  Minnesota Statutes 1998, section 256B.064, is 
 24.35  amended by adding a subdivision to read: 
 24.36     Subd. 1e.  [SANCTIONS AND MONETARY RECOVERY AGAINST RELATED 
 25.1   VENDORS.] In a situation where the commissioner is authorized by 
 25.2   this section to impose sanctions against or make monetary 
 25.3   recovery from a vendor of medical care, the commissioner may 
 25.4   also take such action against other vendors that have common 
 25.5   control or ownership with the vendor.  A vendor has common 
 25.6   control or ownership with another vendor if:  
 25.7      (1) one or more persons have a direct or indirect ownership 
 25.8   or control interest in both vendors; 
 25.9      (2) one vendor has a direct or indirect ownership or 
 25.10  control interest in the other vendor; 
 25.11     (3) the vendors have interlocking management or ownership; 
 25.12  interrelated business interests among family members; or shared 
 25.13  facilities, equipment, and use of employees; or 
 25.14     (4) one of the vendors is a new business entity created in 
 25.15  connection with the termination of the other vendor, and the 
 25.16  vendors have the same or similar management, ownership, or 
 25.17  principal employees. 
 25.18     Sec. 14.  Minnesota Statutes 1998, section 256B.064, 
 25.19  subdivision 2, is amended to read: 
 25.20     Subd. 2.  [IMPOSITION OF MONETARY RECOVERY AND SANCTIONS.] 
 25.21  (a) The commissioner shall determine any monetary amounts to be 
 25.22  recovered and the sanction sanctions to be imposed upon a vendor 
 25.23  of medical care for conduct described by subdivision 1a under 
 25.24  this section.  Except as provided in paragraph (b), neither a 
 25.25  monetary recovery nor a sanction will be imposed by the 
 25.26  commissioner without prior notice and an opportunity for a 
 25.27  hearing, according to chapter 14, on the commissioner's proposed 
 25.28  action, provided that the commissioner may suspend or reduce 
 25.29  payment to a vendor of medical care, except a nursing home or 
 25.30  convalescent care facility, after notice and prior to the 
 25.31  hearing if in the commissioner's opinion that action is 
 25.32  necessary to protect the public welfare and the interests of the 
 25.33  program. 
 25.34     (b) Except for a nursing home or convalescent care 
 25.35  facility, the commissioner may withhold or reduce payments to a 
 25.36  vendor of medical care without providing advance notice of such 
 26.1   withholding or reduction if either any of the following occurs: 
 26.2      (1) the vendor is convicted of a crime involving the 
 26.3   conduct described in subdivision 1a; or 
 26.4      (2) the commissioner receives reliable evidence of fraud or 
 26.5   willful misrepresentation by the vendor.; or 
 26.6      (3) the vendor has requested that prior authorization for 
 26.7   the vendor's clients be changed to another provider; and: 
 26.8      (i) the vendor is under investigation for fraud; 
 26.9      (ii) the vendor has received or is appealing a notice of 
 26.10  agency action seeking monetary recovery under this section; or 
 26.11     (iii) the vendor has an established overpayment debt owed 
 26.12  to the commissioner. 
 26.13     (c) The commissioner must send notice of the withholding or 
 26.14  reduction of payments under paragraph (b) within five days of 
 26.15  taking such action.  The notice must: 
 26.16     (1) state that payments are being withheld according to 
 26.17  paragraph (b); 
 26.18     (2) except in the case of a conviction for conduct 
 26.19  described in subdivision 1a, state that the withholding is for a 
 26.20  temporary period and cite the circumstances under which 
 26.21  withholding will be terminated; 
 26.22     (3) identify the types of claims to which the withholding 
 26.23  applies; and 
 26.24     (4) inform the vendor of the right to submit written 
 26.25  evidence for consideration by the commissioner. 
 26.26     The withholding or reduction of payments will not continue 
 26.27  after the commissioner determines there is insufficient evidence 
 26.28  of fraud or willful misrepresentation by the vendor, or after 
 26.29  legal proceedings relating to the alleged fraud or willful 
 26.30  misrepresentation are completed, unless the commissioner has 
 26.31  sent notice of intention to impose monetary recovery or 
 26.32  sanctions under paragraph (a). 
 26.33     (d) Upon receipt of a notice under paragraph (a) that a 
 26.34  monetary recovery or sanction is to be imposed, a vendor may 
 26.35  request a contested case, as defined in section 14.02, 
 26.36  subdivision 3, by filing with the commissioner a written request 
 27.1   of appeal.  The appeal request must be received by the 
 27.2   commissioner no later than 30 days after the date the 
 27.3   notification of monetary recovery or sanction was mailed to the 
 27.4   vendor.  The appeal request must specify: 
 27.5      (1) each disputed item, the reason for the dispute, and an 
 27.6   estimate of the dollar amount involved for each disputed item; 
 27.7      (2) the computation that the vendor believes is correct; 
 27.8      (3) the authority in statute or rule upon which the vendor 
 27.9   relies for each disputed item; 
 27.10     (4) the name and address of the person or entity with whom 
 27.11  contacts may be made regarding the appeal; and 
 27.12     (5) other information required by the commissioner. 
 27.13     Sec. 15.  [256B.0646] [OWNERSHIP AND CONTROL DISCLOSURE.] 
 27.14     Subdivision 1.  [DEFINITIONS.] The definitions in this 
 27.15  subdivision apply to this chapter and chapter 256. 
 27.16     (a) "Indirect ownership interest" means an ownership 
 27.17  interest in an entity that has an ownership interest in a vendor 
 27.18  of medical care.  This term also includes an ownership interest 
 27.19  in an entity that has an indirect ownership interest in a vendor 
 27.20  of medical care. 
 27.21     (b) "Managing employee" means a general manager, business 
 27.22  manager, administrator, director, or other individual who for 
 27.23  pay or otherwise exercises operational or managerial control 
 27.24  over, or directly or indirectly conducts the day-to-day 
 27.25  operation of, a vendor of medical care. 
 27.26     (c) "Ownership interest" means the possession of equity in 
 27.27  the capital, the stock, or the profits of a vendor of medical 
 27.28  care. 
 27.29     (d) "Person" means any individual, corporation, 
 27.30  partnership, association, or legal entity, however organized. 
 27.31     (e) "Person with ownership or control interest" means a 
 27.32  person that: 
 27.33     (1) has an ownership interest equal to five percent or more 
 27.34  in a vendor of medical care; 
 27.35     (2) has an indirect ownership interest equal to five 
 27.36  percent or more in a vendor of medical care; 
 28.1      (3) has a combination of direct and indirect ownership 
 28.2   interests equal to five percent or more in a vendor of medical 
 28.3   care; 
 28.4      (4) owns an interest of five percent or more in any 
 28.5   mortgage, deed of trust, note, or other obligation secured by a 
 28.6   vendor of medical care, if that interest equals at least five 
 28.7   percent of the value of the property or assets of a vendor of 
 28.8   medical care; 
 28.9      (5) is an officer or director of a vendor of medical care 
 28.10  that is organized as a corporation; 
 28.11     (6) is a partner of a vendor of medical care that is 
 28.12  organized as a partnership; or 
 28.13     (7) is a managing employee of a vendor of medical care. 
 28.14     (f) "Provider" means a vendor of medical care who is 
 28.15  enrolled as a provider in the medical assistance program, 
 28.16  general assistance program, or MinnesotaCare. 
 28.17     Subd. 2.  [DETERMINATION OF OWNERSHIP OR CONTROL.] (a) A 
 28.18  prospective or current program provider must disclose the 
 28.19  information on ownership and control specified in paragraph 
 28.20  (b).  The information must be disclosed on a form provided by 
 28.21  the commissioner.  The disclosure form must be submitted: 
 28.22     (1) no later than December 31, 1999, if the provider is 
 28.23  enrolled in the program on the effective date of this section; 
 28.24     (2) when a vendor applies for enrollment as a program 
 28.25  provider; 
 28.26     (3) when an enrolled provider requests a change of address 
 28.27  or provider name; and 
 28.28     (4) when required by a schedule established by the 
 28.29  commissioner for the regular updating of disclosures.  The 
 28.30  schedule must not require updating of disclosures more 
 28.31  frequently than once a year. 
 28.32     (b) A disclosure of information on ownership and control 
 28.33  required by paragraph (a) shall consist of the following 
 28.34  information about the prospective or current program provider: 
 28.35     (1) the name and address of each person or entity with an 
 28.36  ownership or control interest in the provider; 
 29.1      (2) the name and address of each of the provider's managing 
 29.2   employees; 
 29.3      (3) whether any of the persons named due to clause (1) or 
 29.4   (2) are related to one another as spouses, siblings, parents, 
 29.5   child, aunt, uncle, niece, nephew, grandchild, or grandparent, 
 29.6   and, if so, the names of the persons and their relationship; 
 29.7      (4) the names of any other program providers or vendors in 
 29.8   which a person named due to clause (1) also has an ownership or 
 29.9   control interest; and 
 29.10     (5) for any entity named due to clause (1) that is a 
 29.11  corporation, the names and addresses of its officers and 
 29.12  directors.  In addition, for each such corporation, the 
 29.13  following must be attached to the disclosure:  a full and 
 29.14  complete copy of its articles of incorporation and bylaws and 
 29.15  any amendments and, if a corporation is foreign to this state, a 
 29.16  copy of its certificate of authority to do business in this 
 29.17  state. 
 29.18     (c) Failure to disclose the information on ownership and 
 29.19  control when required by paragraph (a) shall be grounds for 
 29.20  denial or termination of provider enrollment. 
 29.21     Sec. 16.  [256B.0914] [CONFLICTS OF INTEREST RELATED TO 
 29.22  MEDICAID EXPENDITURES.] 
 29.23     Subdivision 1.  [DEFINITIONS.] (a) "Contract" means a 
 29.24  written, fully executed agreement for the purchase of goods and 
 29.25  services involving a substantial expenditure of Medicaid funding.
 29.26     (b) "Contractor bid or proposal information" means cost or 
 29.27  pricing data, indirect costs, and proprietary information marked 
 29.28  as such by the bidder in accordance with applicable law. 
 29.29     (c) "Particular expenditure" means a substantial 
 29.30  expenditure as defined below, for a specified term, involving 
 29.31  specific parties.  The renewal of an existing contract for the 
 29.32  substantial expenditure of Medicaid funds is considered a 
 29.33  separate, particular expenditure from the original contract. 
 29.34     (d) "Source selection information" means any of the 
 29.35  following information prepared for use by the state, county, or 
 29.36  independent contractor for the purpose of evaluating a bid or 
 30.1   proposal to enter into a Medicaid procurement contract, if that 
 30.2   information has not been previously made available to the public 
 30.3   or disclosed publicly: 
 30.4      (1) bid prices submitted in response to a solicitation for 
 30.5   sealed bids, or lists of the bid prices before bid opening; 
 30.6      (2) proposed costs or prices submitted in response to a 
 30.7   solicitation, or lists of those proposed costs or prices; 
 30.8      (3) source selection plans; 
 30.9      (4) technical evaluations plans; 
 30.10     (5) technical evaluations of proposals; 
 30.11     (6) cost or price evaluation of proposals; 
 30.12     (7) competitive range determinations that identify 
 30.13  proposals that have a reasonable chance of being selected for 
 30.14  award of a contract; 
 30.15     (8) rankings of bids, proposals, or competitors; 
 30.16     (9) the reports and evaluations of source selection panels, 
 30.17  boards, or advisory councils; and 
 30.18     (10) other information marked as "source selection 
 30.19  information" based on a case-by-case determination by the head 
 30.20  of the agency, contractor, designees, or the contracting officer 
 30.21  that disclosure of the information would jeopardize the 
 30.22  integrity or successful completion of the Medicaid procurement 
 30.23  to which the information relates. 
 30.24     (e) "Substantial expenditure" and "substantial amounts" 
 30.25  mean a purchase of goods or services in excess of $10,000,000 in 
 30.26  Medicaid funding under this chapter or chapter 256L. 
 30.27     Subd. 2.  [APPLICABILITY.] (a) Unless provided otherwise, 
 30.28  this section applies to:  
 30.29     (1) any state or local officer, employee, or independent 
 30.30  contractor who is responsible for the expenditure of substantial 
 30.31  amounts of medical assistance or MinnesotaCare funding under 
 30.32  this chapter or chapter 256L for which federal Medicaid matching 
 30.33  funds are available; 
 30.34     (2) any individual who formerly was an officer, employee, 
 30.35  or independent contractor; and 
 30.36     (3) any partner of such a state or local officer, employee, 
 31.1   or independent contractor. 
 31.2      (b) This section is intended to meet the requirements of 
 31.3   state participation in the Medicaid program at United States 
 31.4   Code, title 42, sections 1396a(a)(4) and 1396u-2(d)(3), which 
 31.5   require that states have in place restrictions against conflicts 
 31.6   of interest in the Medicaid procurement process, that are at 
 31.7   least as stringent as those in effect under United States Code, 
 31.8   title 41, section 423, and title 18, sections 207 and 208, as 
 31.9   they apply to federal employees. 
 31.10     Subd. 3.  [DISCLOSURE OF PROCUREMENT INFORMATION.] A person 
 31.11  described in subdivision 2 may not knowingly disclose a 
 31.12  contractor bid or proposal information, or source selection 
 31.13  information before the award by the state, county, or 
 31.14  independent contractor of a Medicaid procurement contract to 
 31.15  which the information relates unless the disclosure is otherwise 
 31.16  authorized by law.  No person, other than as provided by law, 
 31.17  shall knowingly obtain contractor bid or proposal information or 
 31.18  source selection information before the award of a Medicaid 
 31.19  procurement contract to which the information relates. 
 31.20     Subd. 4.  [OFFERS OF EMPLOYMENT.] When a person described 
 31.21  in subdivision 2 is participating personally and substantially 
 31.22  in a Medicaid procurement for a contract contacts or is 
 31.23  contacted by a person who is a bidder or offeror in the same 
 31.24  procurement regarding possible employment outside of the entity 
 31.25  by which the person is currently employed, the person must:  
 31.26     (1) report the contact in writing to his or her supervisor 
 31.27  and his or her employer's ethics officer; and 
 31.28     (2) either: 
 31.29     (i) reject the possibility of employment with the bidder or 
 31.30  offeror; or 
 31.31     (ii) be disqualified from further participation in the 
 31.32  procurement until the bidder or offeror is no longer involved in 
 31.33  that procurement, or all discussions with the bidder or offeror 
 31.34  regarding possible employment have terminated without an 
 31.35  arrangement for employment.  A bidder or offeror may not engage 
 31.36  in employment discussions with an official who is subject to 
 32.1   this subdivision. 
 32.2      Subd. 5.  [ACCEPTANCE OF COMPENSATION BY A FORMER 
 32.3   OFFICIAL.] (a) A former official of the state or county, or a 
 32.4   former independent contractor, described in subdivision 2 may 
 32.5   not accept compensation from a Medicaid contractor as an 
 32.6   employee, officer, director, or consultant of the contractor 
 32.7   within one year after the former official or independent 
 32.8   contractor: 
 32.9      (1) served as the procuring contracting officer, the source 
 32.10  selection authority, a member of the source selection evaluation 
 32.11  board, or the chief of a financial or technical evaluation team 
 32.12  in a procurement in which the contractor was selected for award 
 32.13  of a contract in excess of $10,000,000; 
 32.14     (2) served as the program manager, deputy program manager, 
 32.15  or administrative contracting officer for a contract in excess 
 32.16  of $10,000,000 awarded to the contractor; or 
 32.17     (3) personally made decisions for the state, county, or 
 32.18  independent contractor to: 
 32.19     (i) award a contract, subcontract, modification of a 
 32.20  contract or subcontract, or a task order or delivery order to 
 32.21  the contractor in excess of $10,000,000; 
 32.22     (ii) establish overhead or other rates applicable to a 
 32.23  contract or contracts for the contractor that are valued in 
 32.24  excess of $10,000,000; 
 32.25     (iii) approve issuance of a contract payment or payments in 
 32.26  excess of $10,000,000 to the contractor; or 
 32.27     (iv) pay or settle a claim in excess of $10,000,000 with 
 32.28  the contractor. 
 32.29     (b) Paragraph (a) does not prohibit a former official of 
 32.30  the state, county, or independent contractor from accepting 
 32.31  compensation from any division or affiliate of a contractor not 
 32.32  involved in the same or similar products or services as the 
 32.33  division or affiliate of the contractor that is responsible for 
 32.34  the contract referred to in paragraph (a), clause (1), (2), or 
 32.35  (3). 
 32.36     (c) A contractor shall not provide compensation to a former 
 33.1   official knowing that the former official is accepting that 
 33.2   compensation in violation of this subdivision. 
 33.3      Subd. 6.  [PERMANENT RESTRICTIONS ON REPRESENTATION AND 
 33.4   COMMUNICATION.] (a) A person described in subdivision 2, after 
 33.5   termination of his or her service with state, county, or 
 33.6   independent contractor, is permanently restricted from knowingly 
 33.7   making, with the intent to influence, any communication to or 
 33.8   appearance before an officer or employee of a department, 
 33.9   agency, or court of the United States, the state of Minnesota 
 33.10  and its counties in connection with a particular expenditure: 
 33.11     (1) in which the United States, the state of Minnesota, or 
 33.12  a Minnesota county is a party or has a direct and substantial 
 33.13  interest; 
 33.14     (2) in which the person participated personally and 
 33.15  substantially as an officer, employee, or independent 
 33.16  contractor; and 
 33.17     (3) which involved a specific party or parties at the time 
 33.18  of participation. 
 33.19     (b) For purposes of this subdivision and subdivisions 7 and 
 33.20  9, "participated" means an action taken through decision, 
 33.21  approval, disapproval, recommendation, the rendering of advice, 
 33.22  investigation, or other such action; and "particular matter" 
 33.23  includes any investigation, application, request for a ruling or 
 33.24  determination, rulemaking, contract, controversy, claim, charge, 
 33.25  accusation, arrest, or judicial or other proceeding. 
 33.26     Subd. 7.  [TWO-YEAR RESTRICTIONS ON REPRESENTATION AND 
 33.27  COMMUNICATION.] No person described in subdivision 2, within two 
 33.28  years after termination of service with the state, county, or 
 33.29  independent contractor, shall knowingly make, with the intent to 
 33.30  influence, any communication to or appearance before any officer 
 33.31  or employee of any government department, agency, or court in 
 33.32  connection with a particular expenditure: 
 33.33     (1) in which the United States, the state of Minnesota, or 
 33.34  a Minnesota county is a party or has a direct and substantial 
 33.35  interest; 
 33.36     (2) which the person knows or reasonably should know was 
 34.1   actually pending under the official's responsibility as an 
 34.2   officer, employee, or independent contractor within one year 
 34.3   before the termination of the official's service with the state, 
 34.4   county, or independent contractor; and 
 34.5      (3) which involved a specific party or parties at the time 
 34.6   the expenditure was pending. 
 34.7      Subd. 8.  [EXCEPTIONS TO PERMANENT AND TWO-YEAR 
 34.8   RESTRICTIONS ON REPRESENTATION AND COMMUNICATION.] Subdivisions 
 34.9   6 and 7 do not apply to: 
 34.10     (1) communications or representations made in carrying out 
 34.11  official duties on behalf of the United States, the state of 
 34.12  Minnesota or local government, or as an elected official of the 
 34.13  state or local government; 
 34.14     (2) communications made solely for the purpose of 
 34.15  furnishing scientific or technological information; or 
 34.16     (3) giving testimony under oath.  A person subject to 
 34.17  subdivisions 6 and 7 may serve as an expert witness in that 
 34.18  matter, without restriction, for the state, county, or 
 34.19  independent contractor.  Under court order, a person subject to 
 34.20  subdivisions 6 and 7 may serve as an expert witness for others.  
 34.21  Otherwise, the person may not serve as an expert witness in that 
 34.22  matter. 
 34.23     Subd. 9.  [WAIVER.] The commissioner of human services, or 
 34.24  the governor in the case of the commissioner, may grant a waiver 
 34.25  of a restriction in subdivisions 6 and 7 if he or she determines 
 34.26  that a waiver is in the public interest and that the services of 
 34.27  the officer or employee are critically needed for the benefit of 
 34.28  the state or county government. 
 34.29     Subd. 10.  [ACTS AFFECTING A PERSONAL FINANCIAL 
 34.30  INTEREST.] A person described in subdivision 2, who participates 
 34.31  in a particular matter in which the person has knowledge or has 
 34.32  a financial interest, is subject to the penalties in subdivision 
 34.33  12.  For purposes of this subdivision, "financial interest" also 
 34.34  includes the financial interest of a spouse, minor child, 
 34.35  general partner, organization in which the officer or employee 
 34.36  is serving as an officer, director, trustee, general partner, or 
 35.1   employee, or any person or organization with whom the individual 
 35.2   is negotiating or has any arrangement concerning prospective 
 35.3   employment. 
 35.4      Subd. 11.  [EXCEPTIONS TO PROHIBITIONS REGARDING FINANCIAL 
 35.5   INTEREST.] Subdivision 10 does not apply if: 
 35.6      (1) the person first advises the person's supervisor and 
 35.7   the employer's ethics officer regarding the nature and 
 35.8   circumstances of the particular expenditure and makes full 
 35.9   disclosure of the financial interest and receives in advance a 
 35.10  written determination made by the commissioner of human 
 35.11  services, or the governor in the case of the commissioner, that 
 35.12  the interest is not so substantial as to likely effect the 
 35.13  integrity of the services which the government may expect from 
 35.14  the officer, employee, or independent contractor; 
 35.15     (2) the financial interest is listed as an exemption at 
 35.16  Code of Federal Regulations, title 5, sections 2640.201 to 
 35.17  2640.203, as too remote or inconsequential to affect the 
 35.18  integrity of the services of the office, employee, or 
 35.19  independent contractor to which the requirement applies. 
 35.20     Subd. 12.  [CRIMINAL PENALTIES.] (a) A person who violates 
 35.21  subdivisions 3 to 5 for the purpose of either exchanging the 
 35.22  information covered by this section for anything of value, or 
 35.23  for obtaining or giving anyone a competitive advantage in the 
 35.24  award of a Medicaid contract may be sentenced to imprisonment 
 35.25  for not more than five years or payment of a fine of not more 
 35.26  than $50,000 for each violation, or the amount of compensation 
 35.27  which the person received or offered for the prohibited conduct, 
 35.28  whichever is greater, or both. 
 35.29     (b) A person who violates a provision of subdivisions 6 to 
 35.30  11 may be sentenced to imprisonment for not more than one year 
 35.31  or payment of a fine of not more than $50,000 for each violation 
 35.32  or the amount of compensation which the person received or 
 35.33  offered for the prohibited conduct, whichever amount is greater, 
 35.34  or both.  A person who willfully engages in conduct in violation 
 35.35  of subdivisions 6 to 11 may be sentenced to imprisonment for not 
 35.36  more than five years or to payment of fine of not more than 
 36.1   $50,000 for each violation or the amount of compensation which 
 36.2   the person received or offered for the prohibited conduct, 
 36.3   whichever amount is greater, or both. 
 36.4      (c) Nothing in this section precludes prosecution under 
 36.5   other laws such as section 609.43. 
 36.6      Subd. 13.  [CIVIL PENALTIES AND INJUNCTIVE RELIEF.] (a) The 
 36.7   Minnesota attorney general may bring a civil action in Ramsey 
 36.8   county district court against a person who violates subdivisions 
 36.9   3 to 5.  Upon proof of such conduct by a preponderance of 
 36.10  evidence, the person is subject to a civil penalty.  An 
 36.11  individual who violates subdivisions 3 to 5 is subject to a 
 36.12  civil penalty of not more than $50,000 for each violation plus 
 36.13  twice the amount of compensation which the individual received 
 36.14  or offered for the prohibited conduct.  An organization that 
 36.15  violates subdivisions 3 to 5 is subject to a civil penalty of 
 36.16  not more than $500,000 for each violation plus twice the amount 
 36.17  of compensation which the organization received or offered for 
 36.18  the prohibited conduct. 
 36.19     (b) If the Minnesota attorney general has reason to believe 
 36.20  that a person is engaging in conduct in violation of subdivision 
 36.21  6, 7, or 9, the attorney general may petition the Ramsey county 
 36.22  district court for an order prohibiting that person from 
 36.23  engaging in such conduct.  The court may issue an order 
 36.24  prohibiting that person from engaging in such conduct if the 
 36.25  court finds that the conduct constitutes such a violation.  The 
 36.26  filing of a petition under this subdivision does not preclude 
 36.27  any other remedy which is available by law. 
 36.28     Subd. 14.  [ADMINISTRATIVE ACTIONS.] (a) If a state agency, 
 36.29  local agency, or independent contractor receives information 
 36.30  that a contractor or a person has violated subdivisions 3 to 5, 
 36.31  the state agency, local agency, or independent contractor may: 
 36.32     (1) cancel the procurement if a contract has not already 
 36.33  been awarded; 
 36.34     (2) rescind the contract; or 
 36.35     (3) initiate suspension or debarment proceedings according 
 36.36  to applicable state or federal law. 
 37.1      (b) If the contract is rescinded, the state agency, local 
 37.2   agency, or independent contractor is entitled to recover, in 
 37.3   addition to any penalty prescribed by law, the amount expended 
 37.4   under the contract. 
 37.5      (c) This section does not: 
 37.6      (1) restrict the disclosure of information to or from any 
 37.7   person or class of persons authorized to receive that 
 37.8   information; 
 37.9      (2) restrict a contractor from disclosing the contractor's 
 37.10  bid or proposal information or the recipient from receiving that 
 37.11  information; 
 37.12     (3) restrict the disclosure or receipt of information 
 37.13  relating to a Medicaid procurement after it has been canceled by 
 37.14  the state agency, county agency, or independent contractor 
 37.15  before the contract award unless the agency or independent 
 37.16  contractor plans to resume the procurement; or 
 37.17     (4) limit the applicability of any requirements, sanctions, 
 37.18  contract penalties, and remedies established under any other law 
 37.19  or regulation. 
 37.20     (d) No person may file a protest against the award or 
 37.21  proposed award of a Medicaid contract alleging a violation of 
 37.22  this section unless that person reported the information the 
 37.23  person believes constitutes evidence of the offense to the 
 37.24  applicable state agency, local agency, or independent contractor 
 37.25  responsible for the procurement.  The report must be made no 
 37.26  later than 14 days after the person first discovered the 
 37.27  possible violation. 
 37.28     Sec. 17.  Minnesota Statutes 1998, section 256B.15, 
 37.29  subdivision 1a, is amended to read: 
 37.30     Subd. 1a.  [ESTATES SUBJECT TO CLAIMS.] If a person 
 37.31  receives any medical assistance hereunder, on the person's 
 37.32  death, if single, or on the death of the survivor of a married 
 37.33  couple, either or both of whom received medical assistance, the 
 37.34  total amount paid for medical assistance rendered for the person 
 37.35  and spouse shall be filed as a claim against the estate of the 
 37.36  person or the estate of the surviving spouse in the court having 
 38.1   jurisdiction to probate the estate or to issue a decree of 
 38.2   descent according to sections 525.31 to 525.313.  
 38.3      A claim shall be filed if medical assistance was rendered 
 38.4   for either or both persons under one of the following 
 38.5   circumstances: 
 38.6      (a) the person was over 55 years of age, and received 
 38.7   services under this chapter, excluding alternative care; 
 38.8      (b) the person resided in a medical institution for six 
 38.9   months or longer, received services under this chapter excluding 
 38.10  alternative care, and, at the time of institutionalization or 
 38.11  application for medical assistance, whichever is later, the 
 38.12  person could not have reasonably been expected to be discharged 
 38.13  and returned home, as certified in writing by the person's 
 38.14  treating physician.  For purposes of this section only, a 
 38.15  "medical institution" means a skilled nursing facility, 
 38.16  intermediate care facility, intermediate care facility for 
 38.17  persons with mental retardation, nursing facility, or inpatient 
 38.18  hospital; or 
 38.19     (c) the person received general assistance medical care 
 38.20  services under chapter 256D.  
 38.21     The claim shall be considered an expense of the last 
 38.22  illness of the decedent for the purpose of section 524.3-805.  
 38.23  Any statute of limitations that purports to limit any county 
 38.24  agency or the state agency, or both, to recover for medical 
 38.25  assistance granted hereunder shall not apply to any claim made 
 38.26  hereunder for reimbursement for any medical assistance granted 
 38.27  hereunder.  Notice of the claim shall be given to all heirs and 
 38.28  devisees of the decedent whose identity can be ascertained with 
 38.29  reasonable diligence.  The notice must include procedures and 
 38.30  instructions for making an application for a hardship waiver 
 38.31  under subdivision 5; time frames for submitting an application 
 38.32  and determination; and information regarding appeal rights and 
 38.33  procedures.  Counties are entitled to one-half of the nonfederal 
 38.34  share of medical assistance collections from estates that are 
 38.35  directly attributable to county effort.  
 38.36     Sec. 18.  Minnesota Statutes 1998, section 256B.37, 
 39.1   subdivision 1, is amended to read: 
 39.2      Subdivision 1.  [SUBROGATION.] Upon furnishing medical 
 39.3   assistance to any person who has private accident or health care 
 39.4   coverage, or receives or has a right to receive health or 
 39.5   medical care from any type of organization or entity, or has a 
 39.6   cause of action arising out of an occurrence that necessitated 
 39.7   the payment of medical assistance, the state agency or the state 
 39.8   agency's agent shall be subrogated, to the extent of the cost of 
 39.9   medical care furnished, to any rights the person may have under 
 39.10  the terms of the coverage, or against the organization or entity 
 39.11  providing or liable to provide health or medical care, or under 
 39.12  the cause of action.  For purposes of this section, "state 
 39.13  agency" includes prepaid health plans under contract with the 
 39.14  department according to sections 256B.69, 256D.03, subdivision 
 39.15  4, paragraph (d), and 256L.12; children's mental health 
 39.16  collaboratives under section 245.493; demonstration projects for 
 39.17  persons with disabilities under section 256B.77; nursing homes 
 39.18  under the alternative payment demonstration project under 
 39.19  section 256B.434; and county-based purchasing entities under 
 39.20  section 256B.692.  
 39.21     The right of subrogation created in this section includes 
 39.22  all portions of the cause of action, notwithstanding any 
 39.23  settlement allocation or apportionment that purports to dispose 
 39.24  of portions of the cause of action not subject to subrogation.  
 39.25     Sec. 19.  Minnesota Statutes 1998, section 256B.37, 
 39.26  subdivision 2, is amended to read: 
 39.27     Subd. 2.  [CIVIL ACTION FOR RECOVERY.] To recover under 
 39.28  this section, the attorney general, or the appropriate county 
 39.29  attorney, acting upon direction from the attorney general, the 
 39.30  prepaid health plan providing services under sections 256B.69, 
 39.31  256D.03, subdivision 4, paragraph (d), and 256L.12; children's 
 39.32  mental health collaboratives under section 245.493; 
 39.33  demonstration projects for persons with disabilities under 
 39.34  section 256B.77; nursing homes under the alternative payment 
 39.35  demonstration project under section 256B.434; or the 
 39.36  county-based purchasing entity providing services under section 
 40.1   256B.692 may institute or join a civil action to enforce the 
 40.2   subrogation rights established under this section.  
 40.3      Sec. 20.  Minnesota Statutes 1998, section 256B.48, 
 40.4   subdivision 1, is amended to read: 
 40.5      Subdivision 1.  [PROHIBITED PRACTICES.] A nursing facility 
 40.6   is not eligible to receive medical assistance payments unless it 
 40.7   refrains from all of the following: 
 40.8      (a) Charging private paying residents rates for similar 
 40.9   services which exceed those which are approved by the state 
 40.10  agency for medical assistance recipients as determined by the 
 40.11  prospective desk audit rate, except under the following 
 40.12  circumstances:  the nursing facility may (1) charge private 
 40.13  paying residents a higher rate for a private room, and (2) 
 40.14  charge for special services which are not included in the daily 
 40.15  rate if medical assistance residents are charged separately at 
 40.16  the same rate for the same services in addition to the daily 
 40.17  rate paid by the commissioner.  Services covered by the payment 
 40.18  rate must be the same regardless of payment source.  Special 
 40.19  services, if offered, must be available to all residents in all 
 40.20  areas of the nursing facility and charged separately at the same 
 40.21  rate.  Residents are free to select or decline special 
 40.22  services.  Special services must not include services which must 
 40.23  be provided by the nursing facility in order to comply with 
 40.24  licensure or certification standards and that if not provided 
 40.25  would result in a deficiency or violation by the nursing 
 40.26  facility.  Services beyond those required to comply with 
 40.27  licensure or certification standards must not be charged 
 40.28  separately as a special service if they were included in the 
 40.29  payment rate for the previous reporting year.  A nursing 
 40.30  facility that charges a private paying resident a rate in 
 40.31  violation of this clause is subject to an action by the state of 
 40.32  Minnesota or any of its subdivisions or agencies for civil 
 40.33  damages.  A private paying resident or the resident's legal 
 40.34  representative has a cause of action for civil damages against a 
 40.35  nursing facility that charges the resident rates in violation of 
 40.36  this clause.  The damages awarded shall include three times the 
 41.1   payments that result from the violation, together with costs and 
 41.2   disbursements, including reasonable attorneys' fees or their 
 41.3   equivalent.  A private paying resident or the resident's legal 
 41.4   representative, the state, subdivision or agency, or a nursing 
 41.5   facility may request a hearing to determine the allowed rate or 
 41.6   rates at issue in the cause of action.  Within 15 calendar days 
 41.7   after receiving a request for such a hearing, the commissioner 
 41.8   shall request assignment of an administrative law judge under 
 41.9   sections 14.48 to 14.56 to conduct the hearing as soon as 
 41.10  possible or according to agreement by the parties.  The 
 41.11  administrative law judge shall issue a report within 15 calendar 
 41.12  days following the close of the hearing.  The prohibition set 
 41.13  forth in this clause shall not apply to facilities licensed as 
 41.14  boarding care facilities which are not certified as skilled or 
 41.15  intermediate care facilities level I or II for reimbursement 
 41.16  through medical assistance. 
 41.17     (b) Requiring an applicant for admission to the facility, 
 41.18  or the guardian or conservator of the applicant, as a condition 
 41.19  of admission, to pay any fee or deposit in excess of $100, loan 
 41.20  any money to the nursing facility, or promise to leave all or 
 41.21  part of the applicant's estate to the facility.  
 41.22     (c) Requiring any resident of the nursing facility to 
 41.23  utilize a vendor of health care services chosen by the nursing 
 41.24  facility.  A nursing facility may require a resident to use 
 41.25  pharmacies that utilize unit dose packing systems approved by 
 41.26  the Minnesota board of pharmacy.  Nursing facilities shall not 
 41.27  restrict a resident's choice of pharmacy because the pharmacy 
 41.28  utilizes a specific system of unit dose drug packing. 
 41.29     (d) Providing differential treatment on the basis of status 
 41.30  with regard to public assistance.  
 41.31     (e) Discriminating in admissions, services offered, or room 
 41.32  assignment on the basis of status with regard to public 
 41.33  assistance or refusal to purchase special services.  Admissions 
 41.34  discrimination shall include, but is not limited to:  
 41.35     (1) basing admissions decisions upon assurance by the 
 41.36  applicant to the nursing facility, or the applicant's guardian 
 42.1   or conservator, that the applicant is neither eligible for nor 
 42.2   will seek public assistance for payment of nursing facility care 
 42.3   costs; and 
 42.4      (2) engaging in preferential selection from waiting lists 
 42.5   based on an applicant's ability to pay privately or an 
 42.6   applicant's refusal to pay for a special service. 
 42.7      The collection and use by a nursing facility of financial 
 42.8   information of any applicant pursuant to a preadmission 
 42.9   screening program established by law shall not raise an 
 42.10  inference that the nursing facility is utilizing that 
 42.11  information for any purpose prohibited by this paragraph.  
 42.12     (f) Requiring any vendor of medical care as defined by 
 42.13  section 256B.02, subdivision 7, who is reimbursed by medical 
 42.14  assistance under a separate fee schedule, to pay any amount 
 42.15  based on utilization or service levels or any portion of the 
 42.16  vendor's fee to the nursing facility except as payment for 
 42.17  renting or leasing space or equipment or purchasing support 
 42.18  services from the nursing facility as limited by section 
 42.19  256B.433.  All agreements must be disclosed to the commissioner 
 42.20  upon request of the commissioner.  Nursing facilities and 
 42.21  vendors of ancillary services that are found to be in violation 
 42.22  of this provision shall each be subject to an action by the 
 42.23  state of Minnesota or any of its subdivisions or agencies for 
 42.24  treble civil damages on the portion of the fee in excess of that 
 42.25  allowed by this provision and section 256B.433.  Damages awarded 
 42.26  must include three times the excess payments together with costs 
 42.27  and disbursements including reasonable attorney's fees or their 
 42.28  equivalent.  
 42.29     (g) Refusing, for more than 24 hours, to accept a resident 
 42.30  returning to the same bed or a bed certified for the same level 
 42.31  of care, in accordance with a physician's order authorizing 
 42.32  transfer, after receiving inpatient hospital services. 
 42.33     The prohibitions set forth in clause (b) shall not apply to 
 42.34  a retirement facility with more than 325 beds including at least 
 42.35  150 licensed nursing facility beds and which:  
 42.36     (1) is owned and operated by an organization tax-exempt 
 43.1   under section 290.05, subdivision 1, clause (i); and 
 43.2      (2) accounts for all of the applicant's assets which are 
 43.3   required to be assigned to the facility so that only expenses 
 43.4   for the cost of care of the applicant may be charged against the 
 43.5   account; and 
 43.6      (3) agrees in writing at the time of admission to the 
 43.7   facility to permit the applicant, or the applicant's guardian, 
 43.8   or conservator, to examine the records relating to the 
 43.9   applicant's account upon request, and to receive an audited 
 43.10  statement of the expenditures charged against the applicant's 
 43.11  individual account upon request; and 
 43.12     (4) agrees in writing at the time of admission to the 
 43.13  facility to permit the applicant to withdraw from the facility 
 43.14  at any time and to receive, upon withdrawal, the balance of the 
 43.15  applicant's individual account. 
 43.16     For a period not to exceed 180 days, the commissioner may 
 43.17  continue to make medical assistance payments to a nursing 
 43.18  facility or boarding care home which is in violation of this 
 43.19  section if extreme hardship to the residents would result.  In 
 43.20  these cases the commissioner shall issue an order requiring the 
 43.21  nursing facility to correct the violation.  The nursing facility 
 43.22  shall have 20 days from its receipt of the order to correct the 
 43.23  violation.  If the violation is not corrected within the 20-day 
 43.24  period the commissioner may reduce the payment rate to the 
 43.25  nursing facility by up to 20 percent.  The amount of the payment 
 43.26  rate reduction shall be related to the severity of the violation 
 43.27  and shall remain in effect until the violation is corrected.  
 43.28  The nursing facility or boarding care home may appeal the 
 43.29  commissioner's action pursuant to the provisions of chapter 14 
 43.30  pertaining to contested cases.  An appeal shall be considered 
 43.31  timely if written notice of appeal is received by the 
 43.32  commissioner within 20 days of notice of the commissioner's 
 43.33  proposed action.  
 43.34     In the event that the commissioner determines that a 
 43.35  nursing facility is not eligible for reimbursement for a 
 43.36  resident who is eligible for medical assistance, the 
 44.1   commissioner may authorize the nursing facility to receive 
 44.2   reimbursement on a temporary basis until the resident can be 
 44.3   relocated to a participating nursing facility.  
 44.4      Certified beds in facilities which do not allow medical 
 44.5   assistance intake on July 1, 1984, or after shall be deemed to 
 44.6   be decertified for purposes of section 144A.071 only.  
 44.7      Sec. 21.  Minnesota Statutes 1998, section 256D.03, 
 44.8   subdivision 8, is amended to read: 
 44.9      Subd. 8.  [PRIVATE INSURANCE POLICIES.] (a) Private 
 44.10  accident and health care coverage for medical services is 
 44.11  primary coverage and must be exhausted before general assistance 
 44.12  medical care is paid.  When a person who is otherwise eligible 
 44.13  for general assistance medical care has private accident or 
 44.14  health care coverage, including a prepaid health plan, the 
 44.15  private health care benefits available to the person must be 
 44.16  used first and to the fullest extent.  General assistance 
 44.17  medical care payment will not be made when either covered 
 44.18  charges are paid in full by a third party or the provider has an 
 44.19  agreement to accept payment for less than charges as payment in 
 44.20  full.  Payment for patients that are simultaneously covered by 
 44.21  general assistance medical care and a liable third party other 
 44.22  than Medicare will be determined as the lesser of clauses (1) to 
 44.23  (3): 
 44.24     (1) the patient liability according to the provider/insurer 
 44.25  agreement; 
 44.26     (2) covered charges minus the third party payment amount; 
 44.27  or 
 44.28     (3) the general assistance medical care rate minus the 
 44.29  third party payment amount. 
 44.30  A negative difference will not be implemented. 
 44.31     (b) When a parent or a person with an obligation of support 
 44.32  has enrolled in a prepaid health care plan under section 
 44.33  518.171, subdivision 1, the commissioner of human services shall 
 44.34  limit the recipient of general assistance medical care to the 
 44.35  benefits payable under that prepaid health care plan to the 
 44.36  extent that services available under general assistance medical 
 45.1   care are also available under the prepaid health care plan.  
 45.2      (c) Upon furnishing general assistance medical care or 
 45.3   general assistance to any person having private accident or 
 45.4   health care coverage, or having a cause of action arising out of 
 45.5   an occurrence that necessitated the payment of assistance, the 
 45.6   state agency shall be subrogated, to the extent of the cost of 
 45.7   medical care, subsistence, or other payments furnished, to any 
 45.8   rights the person may have under the terms of the coverage or 
 45.9   under the cause of action.  For purposes of this subdivision, 
 45.10  "state agency" includes prepaid health plans under contract with 
 45.11  the department according to sections 256B.69, 256D.03, 
 45.12  subdivision 4, paragraph (d), and 256L.12; children's mental 
 45.13  health collaboratives under section 245.493; demonstration 
 45.14  projects for persons with disabilities under section 256B.77; 
 45.15  nursing homes under the alternative payment demonstration 
 45.16  project under section 256B.434; and county-based purchasing 
 45.17  entities under section 256B.692. 
 45.18     This right of subrogation includes all portions of the 
 45.19  cause of action, notwithstanding any settlement allocation or 
 45.20  apportionment that purports to dispose of portions of the cause 
 45.21  of action not subject to subrogation.  
 45.22     (d) To recover under this section, the attorney general or 
 45.23  the appropriate county attorney, acting upon direction from the 
 45.24  attorney general, the prepaid health plan providing services 
 45.25  under sections 256B.69, 256D.03, subdivision 4, paragraph (d), 
 45.26  and 256L.12; children's mental health collaboratives under 
 45.27  section 245.493; demonstration projects for persons with 
 45.28  disabilities under section 256B.77; nursing homes under the 
 45.29  alternative payment demonstration project under section 
 45.30  256B.434; or the county-based purchasing entity providing 
 45.31  services under section 256B.692 may institute or join a civil 
 45.32  action to enforce the subrogation rights established under this 
 45.33  section.  
 45.34     (e) The state agency must be given notice of monetary 
 45.35  claims against a person, firm, or corporation that may be liable 
 45.36  in damages, or otherwise obligated to pay part or all of the 
 46.1   costs related to an injury when the state agency has paid or 
 46.2   become liable for the cost of care or payments related to the 
 46.3   injury.  Notice must be given as follows:  
 46.4      (i) Applicants for general assistance or general assistance 
 46.5   medical care shall notify the state or county agency of any 
 46.6   possible claims when they submit the application.  Recipients of 
 46.7   general assistance or general assistance medical care shall 
 46.8   notify the state or county agency of any possible claims when 
 46.9   those claims arise.  
 46.10     (ii) A person providing medical care services to a 
 46.11  recipient of general assistance medical care shall notify the 
 46.12  state agency when the person has reason to believe that a third 
 46.13  party may be liable for payment of the cost of medical care.  
 46.14     (iii) A person who is party to a claim upon which the state 
 46.15  agency may be entitled to subrogation under this section shall 
 46.16  notify the state agency of its potential subrogation claim 
 46.17  before filing a claim, commencing an action, or negotiating a 
 46.18  settlement.  A person who is a party to a claim includes the 
 46.19  plaintiff, the defendants, and any other party to the cause of 
 46.20  action. 
 46.21     Notice given to the county agency is not sufficient to meet 
 46.22  the requirements of paragraphs (b) and (c).  
 46.23     (f) Upon any judgment, award, or settlement of a cause of 
 46.24  action, or any part of it, upon which the state agency has a 
 46.25  subrogation right, including compensation for liquidated, 
 46.26  unliquidated, or other damages, reasonable costs of collection, 
 46.27  including attorney fees, must be deducted first.  The full 
 46.28  amount of general assistance or general assistance medical care 
 46.29  paid to or on behalf of the person as a result of the injury 
 46.30  must be deducted next and paid to the state agency.  The rest 
 46.31  must be paid to the public assistance recipient or other 
 46.32  plaintiff.  The plaintiff, however, must receive at least 
 46.33  one-third of the net recovery after attorney fees and collection 
 46.34  costs.  
 46.35     Sec. 22.  Minnesota Statutes 1998, section 256L.03, 
 46.36  subdivision 6, is amended to read: 
 47.1      Subd. 6.  [LIEN.] When the state agency provides, pays for, 
 47.2   or becomes liable for covered health services, the agency shall 
 47.3   have a lien for the cost of the covered health services upon any 
 47.4   and all causes of action accruing to the enrollee, or to the 
 47.5   enrollee's legal representatives, as a result of the occurrence 
 47.6   that necessitated the payment for the covered health services.  
 47.7   All liens under this section shall be subject to the provisions 
 47.8   of section 256.015.  For purposes of this subdivision, "state 
 47.9   agency" includes authorized agents of the state agency prepaid 
 47.10  health plans under contract with the department according to 
 47.11  sections 256B.69, 256D.03, subdivision 4, paragraph (d), and 
 47.12  256L.12; and county-based purchasing entities under section 
 47.13  256B.692. 
 47.14     Sec. 23.  Minnesota Statutes 1998, section 514.981, 
 47.15  subdivision 6, is amended to read: 
 47.16     Subd. 6.  [TIME LIMITS; CLAIM LIMITS.] (a) A medical 
 47.17  assistance lien is not enforceable against specific real 
 47.18  property if any of the following occurs: 
 47.19     (1) the lien is not satisfied or proceedings are not 
 47.20  lawfully commenced to foreclose the lien within 18 months of the 
 47.21  agency's receipt of notice of the death of the medical 
 47.22  assistance recipient or the death of the surviving spouse, 
 47.23  whichever occurs later; or 
 47.24     (2) the lien is not satisfied or proceedings are not 
 47.25  lawfully commenced to foreclose the lien within three years of 
 47.26  the death of the medical assistance recipient or the death of 
 47.27  the surviving spouse, whichever occurs later.  This limitation 
 47.28  is tolled during any period when the provisions of section 
 47.29  514.983, subdivision 2, apply to delay enforcement of the lien. 
 47.30  a lien on the real property it describes for a period of 20 
 47.31  years from the date it attaches according to section 514.981, 
 47.32  subdivision 2, paragraph (a), except as otherwise provided for 
 47.33  in sections 514.980 to 514.985.  The agency may renew a medical 
 47.34  assistance lien for an additional 20 years from the date it 
 47.35  would otherwise expire by recording or filing a certificate of 
 47.36  renewal before the lien expires.  The certificate shall be 
 48.1   recorded or filed in the office of the county recorder or 
 48.2   registrar of titles for the county in which the lien is recorded 
 48.3   or filed.  The certificate must refer to the recording or filing 
 48.4   data for the medical assistance lien it renews.  The certificate 
 48.5   need not be attested, certified, or acknowledged as a condition 
 48.6   for recording or filing.  The registrar of title or the recorder 
 48.7   shall file, record, index, and return the certificate of renewal 
 48.8   in the same manner as provided for medical assistance liens in 
 48.9   section 514.982, subdivision 2. 
 48.10     (b) A medical assistance lien is not enforceable against 
 48.11  the real property of an estate to the extent there is a 
 48.12  determination by a court of competent jurisdiction, or by an 
 48.13  officer of the court designated for that purpose, that there are 
 48.14  insufficient assets in the estate to satisfy the agency's 
 48.15  medical assistance lien in whole or in part in accordance with 
 48.16  the priority of claims established by chapters 256B and 524.  
 48.17  The agency's lien remains enforceable to the extent that assets 
 48.18  are available to satisfy the agency's lien, subject to the 
 48.19  priority of other claims, and to the extent that the agency's 
 48.20  claim is allowed against the estate under chapters 256B and 524 
 48.21  because of the homestead exemption under section 256B.15, 
 48.22  subdivision 4, the rights of the surviving spouse or minor 
 48.23  children under section 524.2-403, paragraphs (a) and (b), or 
 48.24  claims with a priority under section 524.3-805, paragraph (a), 
 48.25  clauses (1) to (4).  For purposes of this section, the rights of 
 48.26  the decedent's adult children to exempt property under section 
 48.27  524.2-403, paragraph (b), shall not be considered costs of 
 48.28  administration under section 524.3-805, paragraph (a), clause 
 48.29  (1). 
 48.30     Sec. 24.  [524.2-215] [SURVIVING SPOUSE RECEIVING MEDICAL 
 48.31  ASSISTANCE.] 
 48.32     (a) Notwithstanding any law to the contrary, if a surviving 
 48.33  spouse is receiving medical assistance under chapter 256B, or 
 48.34  general assistance medical care under chapter 256D, when the 
 48.35  person's spouse dies, then the provisions in paragraphs (b) to 
 48.36  (f) apply. 
 49.1      (b) Any time before an order or decree is entered under 
 49.2   section 524.3-1001 or 524.3-1002, or a closing statement is 
 49.3   filed under section 524.3-1003, the surviving spouse may: 
 49.4      (1) exercise the right to take an elective share amount of 
 49.5   the decedent's estate under section 524.2-211, in which case the 
 49.6   decedent's nonprobate transfers to others shall be included in 
 49.7   the augmented estate for purposes of computing the elective 
 49.8   share and supplemental elective share amounts; 
 49.9      (2) petition the court for an extension of time for 
 49.10  exercising the right to an elective share amount under section 
 49.11  524.2-211, in which case the decedent's nonprobate transfers to 
 49.12  others shall be included in the augmented estate for purposes of 
 49.13  computing the elective share and supplemental elective share 
 49.14  amounts; or 
 49.15     (3) elect statutory rights in the homestead or petition the 
 49.16  court for an extension of time to make the election as provided 
 49.17  in section 524.2-211, paragraph (f). 
 49.18     (c) Notwithstanding any law or rule to the contrary, the 
 49.19  personal representative of the estate of the surviving spouse 
 49.20  may exercise the surviving spouse's right of election and 
 49.21  statutory right to the homestead in the manner provided for 
 49.22  making those elections or petition for an extension of time as 
 49.23  provided for in this section. 
 49.24     (d) If choosing the elective share will result in the 
 49.25  surviving spouse receiving a share of the decedent's estate 
 49.26  greater in value than the share of the estate under the will or 
 49.27  intestate succession, then the guardian or conservator for the 
 49.28  surviving spouse shall exercise the surviving spouse's right to 
 49.29  an elective share amount and a court order is not required.  
 49.30     (e) A party petitioning to establish a guardianship or 
 49.31  conservatorship for the surviving spouse may file a certified 
 49.32  copy of the petition in the decedent's estate proceedings and 
 49.33  serve a copy of the petition on the personal representative or 
 49.34  the personal representative's attorney.  The filing of the 
 49.35  petition shall toll all of the limitations provided in this 
 49.36  section until the entry of a final order granting or denying the 
 50.1   petition.  The decedent's estate may not close until the entry 
 50.2   of a final order granting or denying the petition. 
 50.3      (1) Distributees of the decedent's estate shall be 
 50.4   personally liable to account for and turn over to the ward, the 
 50.5   conservatee, or the estate of the ward or conservatee, any and 
 50.6   all amounts which the ward or conservatee is entitled to receive 
 50.7   from the decedent's estate. 
 50.8      (2) No distributee shall be liable for an amount in excess 
 50.9   of the value of their distribution as of the time of the 
 50.10  distribution. 
 50.11     (3) The ward, the conservatee, or personal representative 
 50.12  may bring proceedings in district court to enforce these rights. 
 50.13     (f) Notwithstanding any oral or written contract, 
 50.14  agreement, or waiver made by the surviving spouse to waive in 
 50.15  whole or part the surviving spouse's right of election against 
 50.16  the decedent's will, statutory right to the homestead, exempt 
 50.17  property, or family allowance, the surviving spouse or the 
 50.18  surviving spouse's guardian or conservator may exercise these 
 50.19  rights to the full extent permitted by law.  The surviving 
 50.20  spouse's rights under this paragraph do not apply to the extent 
 50.21  there is a valid antenuptial agreement between the surviving 
 50.22  spouse and the decedent under which the surviving spouse has 
 50.23  waived some or all of these rights. 
 50.24     Sec. 25.  Minnesota Statutes 1998, section 524.3-801, is 
 50.25  amended to read: 
 50.26     524.3-801 [NOTICE TO CREDITORS.] 
 50.27     (a) Unless notice has already been given under this 
 50.28  section, upon appointment of a general personal representative 
 50.29  in informal proceedings or upon the filing of a petition for 
 50.30  formal appointment of a general personal representative, notice 
 50.31  thereof, in the form prescribed by court rule, shall be given 
 50.32  under the direction of the court administrator by publication 
 50.33  once a week for two successive weeks in a legal newspaper in the 
 50.34  county wherein the proceedings are pending giving the name and 
 50.35  address of the general personal representative and notifying 
 50.36  creditors of the estate to present their claims within four 
 51.1   months after the date of the court administrator's notice which 
 51.2   is subsequently published or be forever barred, unless they are 
 51.3   entitled to further service of notice under paragraph (b) or (c).
 51.4      (b)(1) Within three months after:  (i) the date of the 
 51.5   first publication of the notice; or (ii) June 16, 1989, 
 51.6   whichever is later, the personal representative may determine, 
 51.7   in the personal representative's discretion, that it is or is 
 51.8   not advisable to conduct a reasonably diligent search for 
 51.9   creditors of the decedent who are either not known or not 
 51.10  identified.  If the personal representative determines that a 
 51.11  reasonably diligent search is advisable, the personal 
 51.12  representative shall conduct the search. 
 51.13     (2) If the notice is first published after June 16, 1989, 
 51.14  the personal representative shall, within three months after the 
 51.15  date of the first publication of the notice, serve a copy of the 
 51.16  notice upon each then known and identified creditor in the 
 51.17  manner provided in paragraph (c).  Notice given under paragraph 
 51.18  (d) does not satisfy the notice requirements under this 
 51.19  paragraph and paragraph (c).  If notice was first published 
 51.20  under the applicable provisions of law under the direction of 
 51.21  the court administrator before June 16, 1989, and if a personal 
 51.22  representative is empowered to act at any time after June 16, 
 51.23  1989, the personal representative shall, within three months 
 51.24  after June 16, 1989, serve upon the then known and identified 
 51.25  creditors in the manner provided in paragraph (c) a copy of the 
 51.26  notice as published, together with a supplementary notice 
 51.27  requiring each of the creditors to present any claim within one 
 51.28  month after the date of the service of the notice or be forever 
 51.29  barred. 
 51.30     (3) Under this section, a creditor is "known" if:  (i) the 
 51.31  personal representative knows that the creditor has asserted a 
 51.32  claim that arose during the decedent's life against either the 
 51.33  decedent or the decedent's estate; or (ii) the creditor has 
 51.34  asserted a claim that arose during the decedent's life and the 
 51.35  fact is clearly disclosed in accessible financial records known 
 51.36  and available to the personal representative.  Under this 
 52.1   section, a creditor is "identified" if the personal 
 52.2   representative's knowledge of the name and address of the 
 52.3   creditor will permit service of notice to be made under 
 52.4   paragraph (c).  
 52.5      (c) The personal representative shall serve a copy of any 
 52.6   notice and any supplementary notice required by paragraph (b), 
 52.7   clause (1) or (2), upon each creditor of the decedent who is 
 52.8   then known to the personal representative and identified, except 
 52.9   a creditor whose claim has either been presented to the personal 
 52.10  representative or paid, either by delivery of a copy of the 
 52.11  required notice to the creditor, or by mailing a copy of the 
 52.12  notice to the creditor by certified, registered, or ordinary 
 52.13  first class mail addressed to the creditor at the creditor's 
 52.14  office or place of residence. 
 52.15     (d)(1) Effective for decedents dying on or after July 1, 
 52.16  1997, if the decedent or a predeceased spouse of the decedent 
 52.17  received assistance for which a claim could be filed under 
 52.18  section 246.53, 256B.15, 256D.16, or 261.04, the personal 
 52.19  representative or the attorney for the personal representative 
 52.20  shall serve the commissioner of human services with notice in 
 52.21  the manner prescribed in paragraph (c) as soon as practicable 
 52.22  after the appointment of the personal representative.  The 
 52.23  notice must state the decedent's full name, date of birth, and 
 52.24  social security number and, to the extent then known after 
 52.25  making a reasonably diligent inquiry, the full name, date of 
 52.26  birth, and social security number for each of the decedent's 
 52.27  predeceased spouses.  The notice may also contain a statement 
 52.28  that, after making a reasonably diligent inquiry, the personal 
 52.29  representative has determined that the decedent did not have any 
 52.30  predeceased spouses or that the personal representative has been 
 52.31  unable to determine one or more of the previous items of 
 52.32  information for a predeceased spouse of the decedent.  A copy of 
 52.33  the notice to creditors must be attached to and be a part of the 
 52.34  notice to the commissioner.  
 52.35     (2) Notwithstanding a will or other instrument or law to 
 52.36  the contrary, except as allowed in this paragraph, no property 
 53.1   subject to administration by the estate may be distributed by 
 53.2   the estate or the personal representative until 70 days after 
 53.3   the date the notice is served on the commissioner as provided in 
 53.4   paragraph (c), unless the local agency consents as provided for 
 53.5   in clause (6).  This restriction on distribution does not apply 
 53.6   to the personal representative's sale of real or personal 
 53.7   property, but does apply to the net proceeds the estate receives 
 53.8   from these sales.  The personal representative, or any person 
 53.9   with personal knowledge of the facts, may provide an affidavit 
 53.10  containing the description of any real or personal property 
 53.11  affected by this paragraph and stating facts showing compliance 
 53.12  with this paragraph.  If the affidavit describes real property, 
 53.13  it may be filed or recorded in the office of the county recorder 
 53.14  or registrar of titles for the county where the real property is 
 53.15  located.  This paragraph does not apply to proceedings under 
 53.16  sections 524.3-1203 and 525.31, or when a duly authorized agent 
 53.17  of a county is acting as the personal representative of the 
 53.18  estate. 
 53.19     (3) At any time before an order or decree is entered under 
 53.20  section 524.3-1001 or 524.3-1002, or a closing statement is 
 53.21  filed under section 524.3-1003, the personal representative or 
 53.22  the attorney for the personal representative may serve an 
 53.23  amended notice on the commissioner to add variations or other 
 53.24  names of the decedent or a predeceased spouse named in the 
 53.25  notice, the name of a predeceased spouse omitted from the 
 53.26  notice, to add or correct the date of birth or social security 
 53.27  number of a decedent or predeceased spouse named in the notice, 
 53.28  or to correct any other deficiency in a prior notice.  The 
 53.29  amended notice must state the decedent's name, date of birth, 
 53.30  and social security number, the case name, case number, and 
 53.31  district court in which the estate is pending, and the date the 
 53.32  notice being amended was served on the commissioner.  If the 
 53.33  amendment adds the name of a predeceased spouse omitted from the 
 53.34  notice, it must also state that spouse's full name, date of 
 53.35  birth, and social security number.  The amended notice must be 
 53.36  served on the commissioner in the same manner as the original 
 54.1   notice.  Upon service, the amended notice relates back to and is 
 54.2   effective from the date the notice it amends was served, and the 
 54.3   time for filing claims arising under section 246.53, 256B.15, 
 54.4   256D.16 or 261.04 is extended by 60 days from the date of 
 54.5   service of the amended notice.  Claims filed during the 60-day 
 54.6   period are undischarged and unbarred claims, may be prosecuted 
 54.7   by the entities entitled to file those claims in accordance with 
 54.8   section 524.3-1004, and the limitations in section 524.3-1006 do 
 54.9   not apply.  The personal representative or any person with 
 54.10  personal knowledge of the facts may provide and file or record 
 54.11  an affidavit in the same manner as provided for in clause (1). 
 54.12     (4) Within one year after the date an order or decree is 
 54.13  entered under section 524.3-1001 or 524.3-1002 or a closing 
 54.14  statement is filed under section 524.3-1003, any person who has 
 54.15  an interest in property that was subject to administration by 
 54.16  the estate may serve an amended notice on the commissioner to 
 54.17  add variations or other names of the decedent or a predeceased 
 54.18  spouse named in the notice, the name of a predeceased spouse 
 54.19  omitted from the notice, to add or correct the date of birth or 
 54.20  social security number of a decedent or predeceased spouse named 
 54.21  in the notice, or to correct any other deficiency in a prior 
 54.22  notice.  The amended notice must be served on the commissioner 
 54.23  in the same manner as the original notice and must contain the 
 54.24  information required for amendments under clause (3).  If the 
 54.25  amendment adds the name of a predeceased spouse omitted from the 
 54.26  notice, it must also state that spouse's full name, date of 
 54.27  birth, and social security number.  Upon service, the amended 
 54.28  notice relates back to and is effective from the date the notice 
 54.29  it amends was served.  If the amended notice adds the name of an 
 54.30  omitted predeceased spouse or adds or corrects the social 
 54.31  security number or date of birth of the decedent or a 
 54.32  predeceased spouse already named in the notice, then, 
 54.33  notwithstanding any other laws to the contrary, claims against 
 54.34  the decedent's estate on account of those persons resulting from 
 54.35  the amendment and arising under section 246.53, 256B.15, 
 54.36  256D.16, or 261.04 are undischarged and unbarred claims, may be 
 55.1   prosecuted by the entities entitled to file those claims in 
 55.2   accordance with section 524.3-1004, and the limitations in 
 55.3   section 524.3-1006 do not apply.  The person filing the 
 55.4   amendment or any other person with personal knowledge of the 
 55.5   facts may provide and file or record an affidavit describing 
 55.6   affected real or personal property in the same manner as clause 
 55.7   (1). 
 55.8      (5) After one year from the date an order or decree is 
 55.9   entered under section 524.3-1001 or 524.3-1002, or a closing 
 55.10  statement is filed under section 524.3-1003, no error, omission, 
 55.11  or defect of any kind in the notice to the commissioner required 
 55.12  under this paragraph or in the process of service of the notice 
 55.13  on the commissioner, or the failure to serve the commissioner 
 55.14  with notice as required by this paragraph, makes any 
 55.15  distribution of property by a personal representative void or 
 55.16  voidable.  The distributee's title to the distributed property 
 55.17  shall be free of any claims based upon a failure to comply with 
 55.18  this paragraph. 
 55.19     (6) The local agency may consent to a personal 
 55.20  representative's request to distribute property subject to 
 55.21  administration by the estate to distributees during the 70-day 
 55.22  period after service of notice on the commissioner.  The local 
 55.23  agency may grant or deny the request in whole or in part and may 
 55.24  attach conditions to its consent as it deems appropriate.  When 
 55.25  the local agency consents to a distribution, it shall give the 
 55.26  estate a written certificate evidencing its consent to the early 
 55.27  distribution of assets at no cost.  The certificate must include 
 55.28  the name, case number, and district court in which the estate is 
 55.29  pending, the name of the local agency, describe the specific 
 55.30  real or personal property to which the consent applies, state 
 55.31  that the local agency consents to the distribution of the 
 55.32  specific property described in the consent during the 70-day 
 55.33  period following service of the notice on the commissioner, 
 55.34  state that the consent is unconditional or list all of the terms 
 55.35  and conditions of the consent, be dated, and may include other 
 55.36  contents as may be appropriate.  The certificate must be signed 
 56.1   by the director of the local agency or the director's designees 
 56.2   and is effective as of the date it is dated unless it provides 
 56.3   otherwise.  The signature of the director or the director's 
 56.4   designee does not require any acknowledgment.  The certificate 
 56.5   shall be prima facie evidence of the facts it states, may be 
 56.6   attached to or combined with a deed or any other instrument of 
 56.7   conveyance and, when so attached or combined, shall constitute a 
 56.8   single instrument.  If the certificate describes real property, 
 56.9   it shall be accepted for recording or filing by the county 
 56.10  recorder or registrar of titles in the county in which the 
 56.11  property is located.  If the certificate describes real property 
 56.12  and is not attached to or combined with a deed or other 
 56.13  instrument of conveyance, it shall be accepted for recording or 
 56.14  filing by the county recorder or registrar of titles in the 
 56.15  county in which the property is located.  The certificate 
 56.16  constitutes a waiver of the 70-day period provided for in clause 
 56.17  (2) with respect to the property it describes and is prima facie 
 56.18  evidence of service of notice on the commissioner.  The 
 56.19  certificate is not a waiver or relinquishment of any claims 
 56.20  arising under section 246.53, 256B.15, 256D.16, or 261.04, and 
 56.21  does not otherwise constitute a waiver of any of the personal 
 56.22  representative's duties under this paragraph.  Distributees who 
 56.23  receive property pursuant to a consent to an early distribution 
 56.24  shall remain liable to creditors of the estate as provided for 
 56.25  by law. 
 56.26     (7) All affidavits provided for under this paragraph: 
 56.27     (i) shall be provided by persons who have personal 
 56.28  knowledge of the facts stated in the affidavit; 
 56.29     (ii) may be filed or recorded in the office of the county 
 56.30  recorder or registrar of titles in the county in which the real 
 56.31  property they describe is located for the purpose of 
 56.32  establishing compliance with the requirements of this paragraph; 
 56.33  and 
 56.34     (iii) are prima facie evidence of the facts stated in the 
 56.35  affidavit. 
 56.36     (8) This paragraph applies to the estates of decedents 
 57.1   dying on or after July 1, 1997.  Clause (5) also applies with 
 57.2   respect to all notices served on the commissioner of human 
 57.3   services before July 1, 1997, under Laws 1996, chapter 451, 
 57.4   article 2, section 55.  All notices served on the commissioner 
 57.5   before July 1, 1997, pursuant to Laws 1996, chapter 451, article 
 57.6   2, section 55, shall be deemed to be legally sufficient for the 
 57.7   purposes for which they were intended, notwithstanding any 
 57.8   errors, omissions or other defects. 
 57.9      Sec. 26.  Minnesota Statutes 1998, section 525.312, is 
 57.10  amended to read: 
 57.11     525.312 [DECREE OF DESCENT.] 
 57.12     Upon the filing of such petition, the court shall fix the 
 57.13  time and place for the hearing thereof, notice of which shall be 
 57.14  given pursuant to section 524.1-401.  Notice of the hearing, in 
 57.15  the form prescribed by court rule, shall also be given under 
 57.16  direction of the court administrator by publication once a week 
 57.17  for two consecutive weeks in a legal newspaper in the county 
 57.18  where the hearing is to be held, the last publication of which 
 57.19  is to be at least ten days before the time set for hearing.  
 57.20  Upon proof of the petition and of the will if there be one,; or 
 57.21  upon proof of the petition and of an authenticated copy of a 
 57.22  will duly proved and allowed outside of this state in accordance 
 57.23  with the laws in force in the place where proved, if there be 
 57.24  one,; and if a clearance for medical assistance claims is on 
 57.25  file in the proceeding and any medical assistance claims are 
 57.26  paid, or satisfied, the court shall allow the same and enter its 
 57.27  decree of descent assigning the real or personal property, or 
 57.28  any interest therein, to the persons entitled thereto pursuant 
 57.29  to the will or such authenticated copy, if there be one, 
 57.30  otherwise pursuant to the laws of intestate succession in force 
 57.31  at the time of the decedent's death.  The decree of descent will 
 57.32  operate to assign the property free and clear of any and all 
 57.33  claims for medical assistance arising under section 525.313 
 57.34  without regard to the final disposition of those claims.  The 
 57.35  court may appoint two or more disinterested persons to appraise 
 57.36  the property.  
 58.1      Sec. 27.  [525.313] [CLEARANCE FOR MEDICAL ASSISTANCE 
 58.2   CLAIMS.] 
 58.3      (a) The court shall not enter a decree of descent until the 
 58.4   petitioner has filed a clearance for medical assistance claims 
 58.5   under this section, and until any medical assistance claims 
 58.6   filed under this section have been paid, settled, or otherwise 
 58.7   finally disposed of. 
 58.8      (b) After filing the petition, the petitioner or the 
 58.9   petitioner's attorney shall apply to the county agency in the 
 58.10  county in which the petition is pending for a clearance of 
 58.11  medical assistance claims.  The application must state the 
 58.12  decedent's name, date of birth, and social security number; the 
 58.13  name, date of birth, and social security number of any 
 58.14  predeceased spouse of the decedent; the names and addresses of 
 58.15  the devisees and heirs; the name, address, and telephone number 
 58.16  of the petitioner or the attorney making the application on 
 58.17  behalf of the petitioner; and include a copy of the notice of 
 58.18  hearing. 
 58.19     (c) The county agency shall determine whether the decedent 
 58.20  or any of the decedent's predeceased spouses received medical 
 58.21  assistance under chapter 256B giving rise to a claim under 
 58.22  section 256B.15.  If there are no claims, the county agency 
 58.23  shall issue the petitioner a clearance for medical assistance 
 58.24  claims stating no medical assistance claims exist.  If there is 
 58.25  a claim, the county agency shall issue the petitioner a 
 58.26  clearance for medical assistance claims stating that a claim 
 58.27  exists and the total amount of the claim.  The county agency 
 58.28  shall mail the completed clearance for medical assistance claims 
 58.29  to the applicant within 15 working days after receiving the 
 58.30  application without cost to the applicant or others. 
 58.31     (d) The petitioner or attorney shall file the certificate 
 58.32  in the proceedings for the decree of descent as soon as 
 58.33  practicable after it is received.  Notwithstanding any rule or 
 58.34  law to the contrary, if a medical assistance claim appears in a 
 58.35  clearance for medical assistance claims, then: 
 58.36     (1) the claim shall be a claim against the decedent's 
 59.1   property which is the subject of the petition.  The county 
 59.2   agency issuing the certificate shall be the claimant.  The 
 59.3   filing of the clearance for medical assistance claims in the 
 59.4   proceedings for a decree of descent constitutes presentation of 
 59.5   the claim; 
 59.6      (2) the claim shall be an unbarred and undischarged claim 
 59.7   and shall be payable, in whole or in part, from the decedent's 
 59.8   property which is the subject of the petition, including the net 
 59.9   sale proceeds from any sale of property free and clear of the 
 59.10  claim under this section; 
 59.11     (3) the claim may be allowed, denied, appealed, and bear 
 59.12  interest as provided for claims in estates under chapter 524; 
 59.13  and 
 59.14     (4) the county agency may collect, compromise, or otherwise 
 59.15  settle the claim with the estate, the petitioner, or the 
 59.16  assignees of the property on whatever terms and conditions are 
 59.17  deemed appropriate. 
 59.18     (e) Any of the decedent's devisees, heirs, successors, 
 59.19  assigns, or their successors and assigns, may apply for a 
 59.20  partial decree of descent to facilitate the good faith sale of 
 59.21  their interest in any real or personal property described in the 
 59.22  petition free and clear of any medical assistance claim any time 
 59.23  before entry of a decree of descent under section 525.312.  The 
 59.24  applicant must prove their interest in the property as provided 
 59.25  in section 525.312.  The court may enter a partial decree of 
 59.26  descent any time after it could hear and decide the petition for 
 59.27  a decree of descent.  A partial decree of descent shall assign 
 59.28  the interests in the real and personal property described in the 
 59.29  application to the parties entitled to the property free and 
 59.30  clear of any and all medical assistance claims.  The net sale 
 59.31  proceeds from the sale shall be: 
 59.32     (1) substituted in the estate according to this section for 
 59.33  the property sold; 
 59.34     (2) paid over to and held by the petitioner pending the 
 59.35  entry of a decree of descent; 
 59.36     (3) used for the payment of medical assistance claims; and 
 60.1      (4) distributed according to the decree of descent after 
 60.2   any medical assistance claims are paid. 
 60.3      (f) The clearance for medical assistance claims must:  
 60.4      (1) include the case name, case number, and district court 
 60.5   in which the proceeding for a decree of descent is pending; 
 60.6      (2) include the name, date of birth, and social security 
 60.7   number of the decedent and any of the decedent's predeceased 
 60.8   spouses; 
 60.9      (3) state whether there are medical assistance claims 
 60.10  against the decedent, or a surviving spouse, and the total 
 60.11  amount of each claim; and 
 60.12     (4) include the name, address, and telephone number of the 
 60.13  county agency giving the clearance for medical assistance 
 60.14  claims.  The certificate shall be signed by the director of the 
 60.15  county agency or the director's designees.  The signature of the 
 60.16  director or the director's designees does not require an 
 60.17  acknowledgment. 
 60.18     (g) All recoveries under this section are recoveries under 
 60.19  section 256B.15. 
 60.20     (h) For purposes of this section, all of the property 
 60.21  identified in the petition and in all subsequent amendments 
 60.22  shall constitute an estate.