1.1                          A bill for an act
  1.2             relating to health; changing the membership of 
  1.3             regional coordinating boards; establishing the 
  1.4             Minnesota health coverage board; creating the 
  1.5             Minnesota health coverage program; establishing the 
  1.6             Minnesota health care trust fund; establishing 
  1.7             statewide and regional health care budgets; abolishing 
  1.8             the Minnesota health care commission; appropriating 
  1.9             money; amending Minnesota Statutes 1994, section 
  1.10            62J.09, by adding subdivisions; proposing coding for 
  1.11            new law in Minnesota Statutes, chapter 62J; proposing 
  1.12            coding for new law as Minnesota Statutes, chapter 62K; 
  1.13            repealing Minnesota Statutes 1994, sections 62J.05; 
  1.14            62J.09, subdivisions 2 and 8; 62J.19; 62J.212; and 
  1.15            62J.65. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 1994, section 62J.09, is 
  1.18  amended by adding a subdivision to read: 
  1.19     Subd. 1b.  [APPROVAL OF MERGERS AND ACQUISITIONS.] Regional 
  1.20  boards shall review and approve or disapprove all mergers and 
  1.21  acquisitions of integrated service networks that involve 
  1.22  integrated service networks located within their region. 
  1.23     Sec. 2.  Minnesota Statutes 1994, section 62J.09, is 
  1.24  amended by adding a subdivision to read: 
  1.25     Subd. 2a.  [MEMBERSHIP.] (a) Beginning January 1, 1996, 
  1.26  each regional board shall consist of 15 members as provided in 
  1.27  this subdivision.  A member may designate a representative to 
  1.28  act as a member of the board in the member's absence.  The 
  1.29  governor shall appoint the chair of each regional board from 
  1.30  among its members. 
  2.1      (b) A minimum of eight members, not including the county 
  2.2   commissioner, must be public members.  For purposes of this 
  2.3   section, "public member" means a person who does not have and 
  2.4   has never had a material interest in either the provision of 
  2.5   health care services or in an activity directly related to the 
  2.6   provision of health care services, such as health insurance 
  2.7   sales or health plan administration, and has expertise and 
  2.8   experience in health care consumer advocacy.  Four public 
  2.9   members must be elected by the community health boards in the 
  2.10  region, with each community health board having one vote.  One 
  2.11  public member must be appointed under the rules of the senate.  
  2.12  One public member must be appointed under the rules of the house 
  2.13  of representatives.  Two public members must be appointed by the 
  2.14  governor.  In appointing these members, consideration should be 
  2.15  given to providing a balance as to sex, age, race, and income. 
  2.16     (c) Each regional board must include one member who is a 
  2.17  county commissioner.  The county commissioner must be elected by 
  2.18  a vote of all of the county commissioners in the region, with 
  2.19  each county board having one vote. 
  2.20     (d) The remaining six members must be appointed by the 
  2.21  governor as follows:  one member representing licensed 
  2.22  physicians, one member representing hospitals, three members 
  2.23  representing nonphysician health care providers, and one member 
  2.24  representing public health. 
  2.25     (e) The affirmative vote of eight members is necessary for 
  2.26  any action to be taken by the regional board. 
  2.27     Sec. 3.  [62J.10] [REGIONAL BUDGETS.] 
  2.28     (a) Each regional board shall submit a recommended regional 
  2.29  budget to the commissioner by July 1, 1996.  Beginning July 1, 
  2.30  1997, and each July 1 thereafter, each regional board shall 
  2.31  submit this recommended regional budget to the Minnesota health 
  2.32  coverage board. 
  2.33     (b) Each regional budget must include the following: 
  2.34     (1) a budget for the regulated all-payer sector and fee 
  2.35  schedules for practitioners in the all-payer sector; 
  2.36     (2) a budget for the integrated service network sector and 
  3.1   for each integrated service network based on an estimated number 
  3.2   of patients and an estimated per capita cost; and 
  3.3      (3) a budget for hospitals. 
  3.4      (c) Before the proposed regional budget is submitted to 
  3.5   either the commissioner or the board, the regional boards shall 
  3.6   hold hearings, after providing notice to consumers, 
  3.7   policyholders, providers, and all other interested parties who 
  3.8   may be affected by the regional budget. 
  3.9      Sec. 4.  [62J.11] [TRANSFER OF DUTIES.] 
  3.10     Effective January 1, 1996, the Minnesota health care 
  3.11  commission is abolished.  All duties of the commission shall be 
  3.12  transferred to the Minnesota health coverage board established 
  3.13  under section 62K.03.  
  3.14     Sec. 5.  [62J.12] [BUDGET IMPLEMENTATION SCHEDULE.] 
  3.15     Subdivision 1.  [CALENDAR YEAR 1997 BUDGETS.] In carrying 
  3.16  out the duties as required under section 62J.10, the following 
  3.17  schedule shall be followed by the commissioner and regional 
  3.18  boards: 
  3.19     (1) by July 1, 1996, each regional board shall submit to 
  3.20  the commissioner a recommended regional budget for health care 
  3.21  spending consisting of budgets for operating and capital 
  3.22  expenditures; and 
  3.23     (2) by October 1, 1996, the commissioner shall adopt 
  3.24  statewide and regional budgets for health care providers and 
  3.25  practitioners and capital expenditures, and statewide and 
  3.26  regional fee schedules for health care providers and 
  3.27  practitioners, to take effect January 1, 1997. 
  3.28     Subd. 2.  [1998 AND FUTURE YEARS.] The implementation 
  3.29  schedule for 1998 must be identical to the 1997 schedule except 
  3.30  that regional boards shall submit budgets to the Minnesota 
  3.31  health coverage board, not the commissioner of health.  The 
  3.32  implementation schedule for 1999 and all future years shall be 
  3.33  identical to the 1998 schedule except that the Minnesota health 
  3.34  coverage board shall propose statewide and regional budgets by 
  3.35  January 1, 1998, not the commissioner of health. 
  3.36     Subd. 3.  [REPORT.] The board shall recommend in the annual 
  4.1   report due January 1, 1998, on whether budgets should be set 
  4.2   annually or biennially. 
  4.3      Sec. 6.  [62K.01] [PURPOSE.] 
  4.4      The Minnesota health coverage board is created for the 
  4.5   purpose of providing a single, publicly financed, statewide 
  4.6   program to provide comprehensive coverage for all necessary 
  4.7   health care services for residents of Minnesota. 
  4.8      Sec. 7.  [62K.02] [DEFINITIONS.] 
  4.9      Subdivision 1.  [SCOPE.] For the purposes of this chapter, 
  4.10  the following terms have the meanings given them. 
  4.11     Subd. 2.  [BOARD.] "Board" means the Minnesota health 
  4.12  coverage board established under section 62K.03. 
  4.13     Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
  4.14  commissioner of health. 
  4.15     Subd. 4.  [DEPARTMENT.] "Department" means the department 
  4.16  of health. 
  4.17     Subd. 5.  [HEALTH PLAN COMPANY.] "Health plan company" 
  4.18  means a health plan company as defined in section 62Q.01, 
  4.19  subdivision 4. 
  4.20     Subd. 6.  [PARTICIPATING PROVIDER.] "Participating provider"
  4.21  means any person or institution that is authorized to furnish 
  4.22  covered services under this chapter and rules adopted by the 
  4.23  Minnesota health coverage board. 
  4.24     Subd. 7.  [PROGRAM.] "Program" means the Minnesota health 
  4.25  coverage program established by this chapter and administered by 
  4.26  the Minnesota health coverage board. 
  4.27     Sec. 8.  [62K.03] [MINNESOTA HEALTH COVERAGE BOARD.] 
  4.28     Subdivision 1.  [MEMBERSHIP.] (a) The Minnesota health 
  4.29  coverage board consists of 16 members.  The governor shall 
  4.30  appoint 14 voting members.  At least one voting member must 
  4.31  reside in each United States congressional district in this 
  4.32  state.  One voting member must be appointed under the rules of 
  4.33  the senate and one voting member must be appointed under the 
  4.34  rules of the house of representatives.  In appointing these 
  4.35  members, consideration should be given to providing a balance as 
  4.36  to sex, race, age, and income.  A member may designate a 
  5.1   representative to act as a member of the board in the member's 
  5.2   absence. 
  5.3      (b) Nine voting members must be public members.  For 
  5.4   purposes of this section, "public member" means a person who 
  5.5   does not have and has never had a material interest in either 
  5.6   the provision of health care services or in an activity directly 
  5.7   related to the provision of health care services, such as health 
  5.8   insurance sales or health plan administration, and has expertise 
  5.9   and experience in health care consumer advocacy. 
  5.10     (c) Four voting members must be health care providers with 
  5.11  one of the provider members representing public health. 
  5.12     (d) The governor shall annually appoint the chair from 
  5.13  among the voting members.  Nine voting members of the board 
  5.14  represent a quorum and the affirmative vote of seven members is 
  5.15  necessary for any action to be taken by the board. 
  5.16     Subd. 2.  [TERMS; COMPENSATION; REMOVAL; AND VACANCIES.] 
  5.17  The board is governed by section 15.0575. 
  5.18     Subd. 3.  [ADMINISTRATION.] The commissioner of health 
  5.19  shall provide office space, equipment and supplies, and 
  5.20  technical support to the board. 
  5.21     Subd. 4.  [STAFF.] The board may hire an executive director 
  5.22  who serves in the unclassified service.  The executive director 
  5.23  may hire employees and consultants as authorized by the board 
  5.24  and may prescribe their duties.  The attorney general shall 
  5.25  provide legal services to the board. 
  5.26     Subd. 5.  [GENERAL DUTIES.] The board shall: 
  5.27     (1) estimate the cost of universal coverage for all 
  5.28  Minnesotans without a single-payer system; 
  5.29     (2) establish statewide capital and operating budgets for 
  5.30  the regulated all-payer sector and the integrated service 
  5.31  network sector.  The statewide budget must be limited to the 
  5.32  cost estimated under clause (1); 
  5.33     (3) establish budgets for each region including capital and 
  5.34  operating budgets for both the regulated all-payer and the 
  5.35  integrated service network sectors within each region; 
  5.36     (4) establish fee schedules which may vary to reflect 
  6.1   regional differences; 
  6.2      (5) establish budgets for institutional providers; 
  6.3      (6) monitor compliance with all budgets and fee schedules, 
  6.4   and take action to achieve compliance to the extent authorized 
  6.5   by law; 
  6.6      (7) shall issue requests for proposals for a contract to 
  6.7   process claims submitted by individual providers; 
  6.8      (8) provide technical assistance to the regional boards; 
  6.9      (9) monitor the quality of health care throughout the 
  6.10  state, conduct consumer satisfaction surveys, and take action as 
  6.11  necessary to ensure an appropriate level of quality; 
  6.12     (10) implement and administer the Minnesota health coverage 
  6.13  program; 
  6.14     (11) contract with health plan companies and hospitals and 
  6.15  other health care providers to provide health care services to 
  6.16  persons enrolled in the Minnesota health coverage program; 
  6.17     (12) administer the Minnesota health care trust fund 
  6.18  created under section 62K.07; 
  6.19     (13) monitor the operation of the Minnesota health coverage 
  6.20  program through regular data collection and evaluation 
  6.21  activities, including evaluations of the adequacy and quality of 
  6.22  services furnished under the program, the need for changes in 
  6.23  the benefit package, the cost of each type of service, and the 
  6.24  effectiveness of cost containment measures under the program; 
  6.25     (14) develop and implement enrollment procedures for 
  6.26  providers and persons eligible for the program, and disseminate, 
  6.27  to providers of services and to the public, information 
  6.28  concerning the program and the persons eligible to receive 
  6.29  benefits under the program; 
  6.30     (15) develop and implement cost containment and quality 
  6.31  assurance procedures, including a professional peer review 
  6.32  system; 
  6.33     (16) conduct necessary investigations and inquiries and 
  6.34  require the submission of information, documents, and records it 
  6.35  considers necessary to carry out its duties under this chapter; 
  6.36  and 
  7.1      (17) conduct other activities it considers necessary to 
  7.2   carry out the purposes of this chapter.  
  7.3      Subd. 6.  [ANNUAL REPORT.] The board shall present an 
  7.4   annual report to the legislature and the governor by January 1, 
  7.5   1997, and each succeeding January summarizing the activities of 
  7.6   the board.  In the report due January 1, 1998, the board shall 
  7.7   recommend whether capital and operating budgets should be set 
  7.8   annually or biennially.  
  7.9      Subd. 7.  [RULEMAKING.] The board may adopt rules as 
  7.10  necessary to carry out the duties assigned in this chapter. 
  7.11     Subd. 8.  [CONTRACTS.] When entering into contracts with 
  7.12  health plan companies and health care providers, the board is 
  7.13  not subject to competitive bidding requirements in section 
  7.14  16B.07. 
  7.15     Subd. 9.  [HEARINGS.] The board, after providing notice to 
  7.16  consumers, policyholders, providers, and all other interested 
  7.17  parties, may hold hearings in connection with any action that it 
  7.18  proposes to take under subdivision 5. 
  7.19     Sec. 9.  [62K.05] [MINNESOTA HEALTH COVERAGE PROGRAM 
  7.20  IMPLEMENTATION SCHEDULE.] 
  7.21     The board, through the commissioner of health, shall begin 
  7.22  the planning and development for the Minnesota health coverage 
  7.23  program.  The board shall use an implementation schedule that 
  7.24  will phase in enrollment for Minnesota residents, with initial 
  7.25  enrollment of eligible individuals and families beginning July 
  7.26  1, 1997.  
  7.27     In carrying out the planning and development activities, 
  7.28  the board shall: 
  7.29     (1) begin initial enrollment of uninsured and underinsured 
  7.30  individuals and families with annual incomes of less than 275 
  7.31  percent of the federal poverty guideline who do not have 
  7.32  duplicative coverage through a federal, state, or private 
  7.33  insurance program or plan, by July 1, 1997; 
  7.34     (2) provide Medicare supplemental insurance, by July 1, 
  7.35  1997, to Medicare enrollees with annual incomes of less than 275 
  7.36  percent of the federal poverty guideline; 
  8.1      (3) merge the Minnesota health coverage program, the 
  8.2   MinnesotaCare program, the general assistance medical care 
  8.3   program, and the services for children with handicaps program by 
  8.4   July 1, 1998, in a way that will not diminish the coverage 
  8.5   provided to participants in existing programs and without 
  8.6   increasing the financial obligations of public hospitals and 
  8.7   other providers that currently serve participants in these 
  8.8   programs; 
  8.9      (4) assume responsibility for the administration and 
  8.10  funding of appropriate components of maternal and child health 
  8.11  services currently administered by the commissioner of health, 
  8.12  and coordinate outreach, patient education, case management, and 
  8.13  related activities with the maternal and child health program 
  8.14  and local public health departments, by July 1, 1998; 
  8.15     (5) merge the consolidated chemical dependency treatment 
  8.16  fund with the Minnesota health assurance plan by July 1, 1998; 
  8.17     (6) phase out the Minnesota comprehensive health 
  8.18  association by July 1, 1998, in a way that will ensure that 
  8.19  Minnesota comprehensive health association enrollees receive 
  8.20  comparable coverage through the Minnesota health coverage 
  8.21  program; 
  8.22     (7) prohibit health plan companies, beginning January 1, 
  8.23  2000, from selling insurance that duplicates benefits provided 
  8.24  by the Minnesota health coverage program, in a manner that 
  8.25  ensures continuity of coverage through the program as duplicate 
  8.26  coverage in the private market is prohibited; 
  8.27     (8) enroll individuals and families with incomes at or 
  8.28  above 275 percent of the federal poverty guideline, and 
  8.29  individuals and families with incomes below 275 percent of the 
  8.30  federal poverty guideline not eligible for enrollment under 
  8.31  clause (1), beginning January 1, 2000; 
  8.32     (9) provide Medicare supplemental insurance to Medicare 
  8.33  enrollees not eligible for enrollment under clause (2), 
  8.34  beginning January 1, 2000; 
  8.35     (10) seek federal waivers in order to phase Medicare and 
  8.36  medical assistance recipients into the program by a target date 
  9.1   of January 1, 2000; 
  9.2      (11) phase retirees with retiree health benefits into the 
  9.3   program by January 1, 2000; and 
  9.4      (12) if recommended by the health coverage board, add 
  9.5   long-term care as a covered service by January 1, 2001. 
  9.6      Sec. 10.  [62K.07] [MINNESOTA HEALTH CARE TRUST FUND.] 
  9.7      Subdivision 1.  [ESTABLISHMENT.] The Minnesota health care 
  9.8   trust fund is established.  This fund shall consist of all money 
  9.9   obtained from general fund appropriations, state savings 
  9.10  resulting from state health program consolidation, federal 
  9.11  payments received as a result of any waiver of requirements 
  9.12  granted by the United States Secretary of Health and Human 
  9.13  Services under health care programs established under title 18 
  9.14  and title 19 of the Social Security Act, United States Code, 
  9.15  title 42, section 301, as amended, and any other money received 
  9.16  by the board.  The budgets of Minnesota state agencies shall 
  9.17  remain distinct from the Minnesota health care trust fund, 
  9.18  except for portions of those budgets that provide health care 
  9.19  services that are provided to all Minnesotans through the 
  9.20  Minnesota health coverage program.  
  9.21     Subd. 2.  [RESERVES.] Beginning July 1, 1998, the amount of 
  9.22  reserves in the fund at any time must equal at least the amount 
  9.23  of expenditures from the fund during the entire three preceding 
  9.24  months. 
  9.25     Sec. 11.  [62K.09] [ACCOUNTS WITHIN THE MINNESOTA HEALTH 
  9.26  CARE TRUST FUND.] 
  9.27     Subdivision 1.  [PREVENTION ACCOUNT.] The prevention 
  9.28  account is created within the Minnesota health care trust fund.  
  9.29  Money in the account shall be used solely to establish and 
  9.30  maintain primary community prevention programs, including 
  9.31  preventive screening tests.  The board shall administer the 
  9.32  account and determine the amount to be allocated to it. 
  9.33     Subd. 2.  [HEALTH SERVICES ACCOUNT.] The health services 
  9.34  account is created within the Minnesota health care trust fund.  
  9.35  Money in the account shall be used solely to pay participating 
  9.36  providers in accordance with section 62K.19. 
 10.1      Subd. 3.  [CAPITAL ACCOUNT.] The capital account is created 
 10.2   within the Minnesota health care trust fund.  Money in the 
 10.3   account shall be used solely to:  (1) pay for the construction, 
 10.4   renovation, and equipping of health care institutions, including 
 10.5   institutions providing inpatient or overnight care, and 
 10.6   ambulatory diagnostic, treatment, and surgical facilities; and 
 10.7   (2) provide health professionals serving in health care shortage 
 10.8   areas with assistance in the repayment of educational loans and 
 10.9   the establishment of medical practices. 
 10.10     Subd. 4.  [COMMUNICATION AND TRANSPORTATION ACCOUNT.] The 
 10.11  communication and transportation account is created within the 
 10.12  Minnesota health care trust fund.  Money in the account shall be 
 10.13  used solely to fund communication and transportation projects to 
 10.14  provide access for patients unable to reach necessary services.  
 10.15  Money may also be used to fund public education programs and 
 10.16  programs that encourage cooperation between institutions funded 
 10.17  on an annual basis that lead to more efficient and effective use 
 10.18  of health care resources.  All expenditures must comply with 
 10.19  rules approved by the board.  The board shall allocate a portion 
 10.20  of the money allocated for annual budgets to this account.  In 
 10.21  implementing this subdivision, the board shall coordinate its 
 10.22  actions with the commissioner of health. 
 10.23     Subd. 5.  [EVALUATION, PLANNING, AND ASSESSMENT ACCOUNT.] 
 10.24  The evaluation, planning, and assessment account is created 
 10.25  within the Minnesota health care trust fund.  Money in the 
 10.26  account shall be used by the board to monitor and improve the 
 10.27  plan's effectiveness and operations.  The board may establish 
 10.28  grant programs, including demonstration projects, for this 
 10.29  purpose.  The board shall allocate a portion of the revenue 
 10.30  collected by the Minnesota health care trust fund for this 
 10.31  purpose. 
 10.32     Subd. 6.  [MEDICAL RESEARCH ACCOUNT.] The medical research 
 10.33  account is created within the Minnesota health care trust fund.  
 10.34  Money in the account shall be used by the board to establish a 
 10.35  health care analysis unit.  The results of these initiatives 
 10.36  shall be used by the board to improve the quality of health care 
 11.1   provided under the Minnesota health assurance plan and to make 
 11.2   decisions about health benefits covered by the insurance plan.  
 11.3   The board may also establish grant programs, including 
 11.4   demonstration projects, for this purpose.  The board shall 
 11.5   allocate a portion of the revenue collected by the Minnesota 
 11.6   health care trust fund for this purpose.  The board shall seek 
 11.7   federal and private funds to supplement this allocation. 
 11.8      Sec. 12.  [62K.11] [ELIGIBILITY.] 
 11.9      Subdivision 1.  [PHASE-IN OF ELIGIBILITY FOR RESIDENTS.] 
 11.10  The board shall phase in eligibility for Minnesota residents 
 11.11  according to the implementation schedule established under 
 11.12  section 62K.05.  Initial enrollment in the program is open to 
 11.13  individuals and families with incomes less than 275 percent of 
 11.14  the federal poverty level, who do not have duplicative coverage 
 11.15  through a federal, state, or private insurance program or plan.  
 11.16  The board shall continue phase-in coverage according to the 
 11.17  implementation schedule established under section 62K.05, with 
 11.18  the goal of covering all Minnesota residents by January 1, 2000. 
 11.19     Subd. 2.  [RESIDENTS RECEIVING CARE OUT-OF-STATE.] The 
 11.20  board may provide payment for out-of-state care provided to 
 11.21  Minnesota residents.  In determining whether payment is to be 
 11.22  made, the board shall determine the appropriateness of the care 
 11.23  provided, the availability of the service in Minnesota, and the 
 11.24  individual's medical condition and personal circumstances. 
 11.25     Subd. 3.  [ELIGIBILITY FOR NONRESIDENTS.] The board may 
 11.26  provide coverage to nonresidents only after all Minnesota 
 11.27  residents are covered by the program.  Once complete coverage 
 11.28  for all Minnesota residents is achieved, the board may provide 
 11.29  acute care coverage to nonresidents not employed in Minnesota, 
 11.30  and provide broader coverage using a sliding fee scale to 
 11.31  nonresidents who are employed in Minnesota. 
 11.32     Sec. 13.  [62K.13] [BENEFITS.] 
 11.33     Subdivision 1.  [GENERAL.] Every Minnesota resident 
 11.34  enrolled in the program is entitled to receive benefits for any 
 11.35  service covered by the program that is necessary to maintain the 
 11.36  person's health, or necessary for the diagnosis or treatment of, 
 12.1   or rehabilitation following, an injury, disability, or disease.  
 12.2   Services provided in Minnesota must be provided by a health care 
 12.3   provider who participates in the program. 
 12.4      Subd. 2.  [COVERED SERVICES; GENERAL.] The program covers 
 12.5   the following medically necessary and appropriate services: 
 12.6      (1) acute health care; 
 12.7      (2) chronic health care; 
 12.8      (3) rehabilitative health care; 
 12.9      (4) preventive health services; 
 12.10     (5) outpatient health services; 
 12.11     (6) laboratory and X-ray services; 
 12.12     (7) home care and home health care support services; 
 12.13     (8) dental care; 
 12.14     (9) chiropractic care; 
 12.15     (10) inpatient and outpatient mental health care, including 
 12.16  care for serious and persistent mental illness; 
 12.17     (11) inpatient and outpatient chemical dependency 
 12.18  treatment; 
 12.19     (12) public health services formerly provided through state 
 12.20  and local government; and 
 12.21     (13) on or after January 1, 2001, long-term care. 
 12.22     Subd. 3.  [COVERED SERVICES; PHARMACEUTICALS AND SUPPLIES.] 
 12.23  The program covers all pharmaceuticals and medical supplies 
 12.24  prescribed by a licensed practitioner, including:  prescription 
 12.25  drugs, pharmaceuticals and supplies for eye care, hearing aids, 
 12.26  orthopedic aids, and home aids. 
 12.27     Subd. 4.  [COVERED SERVICES; TYPE OF PRACTITIONER.] The 
 12.28  program covers medically necessary and appropriate services 
 12.29  provided by all licensed health care practitioners, as long as 
 12.30  these services are within the scope of practice, and meet 
 12.31  standards of quality assurance established by the board.  
 12.32  Covered practitioners include, but are not limited to:  medical 
 12.33  doctors, doctors of chiropractic, osteopathic doctors, nurses, 
 12.34  nurse practitioners, physicians assistants, dentists, 
 12.35  optometrists, pharmacists, mental health providers, chemical 
 12.36  dependency counselors, certified nurse midwives, nutritionists, 
 13.1   and physical therapists. 
 13.2      Subd. 5.  [COVERED SERVICES; SITE OF CARE.] The program 
 13.3   covers care provided in all settings approved by the board. 
 13.4      Subd. 6.  [SERVICES NOT COVERED.] The following services 
 13.5   are not covered: 
 13.6      (1) services that are not medically necessary; 
 13.7      (2) surgery for cosmetic purposes other than for 
 13.8   reconstructive surgery; and 
 13.9      (3) medical examinations conducted, and medical reports 
 13.10  prepared, for purchasing or renewing life insurance, or 
 13.11  participating as a plaintiff or defendant in a civil action for 
 13.12  the recovery or settlement of damages. 
 13.13     Subd. 7.  [BENEFITS ADVISORY COMMITTEE; CHANGES IN COVERED 
 13.14  SERVICES.] (a) The board shall establish a benefits advisory 
 13.15  committee comprised of consumers, health care providers, experts 
 13.16  in medical ethics, and health science researchers to provide 
 13.17  recommendations regarding plan benefits, limitations on covered 
 13.18  services, and enrollee financial participation.  Persons serving 
 13.19  on this committee are compensated as provided in section 15.0575.
 13.20     (b) The board may make changes in plan benefits, place 
 13.21  limitations on covered services, or require enrollee financial 
 13.22  participation, only after public hearing. 
 13.23     Subd. 8.  [FREEDOM OF CHOICE.] An eligible person may 
 13.24  choose any participating provider, including practitioners 
 13.25  practicing on an independent basis, in group practices, or in 
 13.26  health maintenance organizations.  An eligible person who 
 13.27  enrolls in a health maintenance organization may change 
 13.28  providers only at intervals stipulated by the board, and only if 
 13.29  45 days notice is provided to the health maintenance 
 13.30  organization. 
 13.31     Sec. 14.  [62K.15] [DUPLICATE COVERAGE PROHIBITED.] 
 13.32     Policies, plans, or contracts of health coverage issued, 
 13.33  sold, or renewed by health plan companies on or after January 1, 
 13.34  2000, must not offer benefits that duplicate coverage offered 
 13.35  under the Minnesota health assurance plan.  A policy, plan, or 
 13.36  contract may offer benefits that do not duplicate coverage that 
 14.1   is offered by the Minnesota health assurance plan. 
 14.2      Sec. 15.  [62K.17] [PROVIDER RESPONSIBILITIES.] 
 14.3      Subdivision 1.  [PROVIDER PARTICIPATION.] All eligible 
 14.4   health care practitioners and institutions shall be considered 
 14.5   participants in the program unless and until the practitioner or 
 14.6   institution notifies the board of a change in status.  The board 
 14.7   shall provide practitioners and institutions with notice of this 
 14.8   requirement and adopt rules necessary to allow for changes in 
 14.9   provider status. 
 14.10     Subd. 2.  [NONDISCRIMINATION.] Participating providers 
 14.11  shall furnish services to all eligible persons, regardless of 
 14.12  race, color, income level, national origin, religion, sex, 
 14.13  sexual orientation, or other nonmedical criteria. 
 14.14     Subd. 3.  [PROVISION OF INFORMATION.] Every participating 
 14.15  provider shall furnish information that may reasonably be 
 14.16  required by the board for utilization review, quality assurance, 
 14.17  cost containment, for the making of payments, and for 
 14.18  statistical and other studies of the operation of the plan.  
 14.19  Every participating provider shall permit the board to examine 
 14.20  its records as necessary for verification of payment. 
 14.21     Sec. 16.  [62K.19] [PROVIDER REIMBURSEMENT.] 
 14.22     Subdivision 1.  [INSTITUTIONAL PROVIDERS.] The Minnesota 
 14.23  health coverage program shall pay the expenses of hospitals, 
 14.24  nursing homes, health maintenance organizations, and other 
 14.25  institutional providers of inpatient services, including 
 14.26  institutions providing inpatient or overnight care, and 
 14.27  ambulatory diagnostic, treatment, and surgical facilities, on 
 14.28  the basis of annual budgets that are approved by the board.  The 
 14.29  board shall also establish annual budgets for institutional 
 14.30  providers that receive public funding from counties, cities, and 
 14.31  other local units of government.  Local units of government 
 14.32  shall terminate public funding of these institutions once the 
 14.33  board establishes an annual budget. 
 14.34     Each institutional provider shall negotiate an annual 
 14.35  budget with the board to cover its anticipated services for the 
 14.36  next year based on past performance and projected changes in 
 15.1   prices and service levels.  Every physician or other provider 
 15.2   employed by an annually budgeted institutional provider shall be 
 15.3   paid through and in a manner determined by the institutional 
 15.4   provider. 
 15.5      Subd. 2.  [NONINSTITUTIONAL PROVIDERS.] The board shall 
 15.6   reimburse noninstitutional providers of health care services on 
 15.7   a fee-for-service basis.  The board shall annually negotiate the 
 15.8   fee schedule with the appropriate professional group.  In 
 15.9   developing fee schedules, the board may take into account 
 15.10  recognized geographic differences in cost of practice.  To the 
 15.11  greatest extent possible, fee schedule categories must include 
 15.12  payment for all procedures routinely performed for a given 
 15.13  diagnosis.  The board may require that certain highly technical 
 15.14  procedures be reimbursed only when performed in certain 
 15.15  institutions or by certain providers. 
 15.16     Subd. 3.  [BALANCE BILLING PROHIBITED.] A provider may not 
 15.17  charge rates that are higher than the negotiated reimbursement 
 15.18  level.  A provider may not charge separately for services 
 15.19  covered under section 62K.13. 
 15.20     Subd. 4.  [CAPITATED PAYMENTS.] A multispecialty 
 15.21  organization of providers may elect to be reimbursed on a 
 15.22  capitation basis, in place of fee-for-service reimbursement.  
 15.23  Payment on a capitation basis does not cover inpatient services 
 15.24  provided by a multispecialty organization for institutional 
 15.25  providers. 
 15.26     Subd. 5.  [OUT-OF-STATE PROVIDERS.] The board shall 
 15.27  reimburse providers that are located outside Minnesota at 
 15.28  reasonable rates for care rendered to enrollees while outside of 
 15.29  Minnesota, upon the determination by the board that a payment is 
 15.30  to be made.  
 15.31     Sec. 17.  [62K.21] [RULES.] 
 15.32     The Minnesota health coverage board shall adopt rules to 
 15.33  establish a review and approval process for regional boards. 
 15.34     Sec. 18.  [62K.23] [STUDY AND ASSESSMENT.] 
 15.35     The commissioner shall study statewide health care spending 
 15.36  to enable the health coverage board and the regional boards to 
 16.1   establish and enforce the state and regional health care 
 16.2   budgets.  By January 1, 1996, the commissioner shall: 
 16.3      (1) assess health care capital needs and expenditures 
 16.4   statewide and within each region; and 
 16.5      (2) recommend to the health coverage board and the regional 
 16.6   boards statewide and regional budgets, each consisting of 
 16.7   budgets for operating and capital expenditures, and fee 
 16.8   schedules for health care providers and practitioners. 
 16.9      Sec. 19.  [INSTRUCTION TO REVISOR; REPORT.] 
 16.10     (a) In the 1996 edition of Minnesota Statutes, the revisor 
 16.11  of statutes shall change the words "Minnesota health care 
 16.12  commission" to "Minnesota health coverage board," as 
 16.13  appropriate, wherever they appear in Minnesota Statutes. 
 16.14     (b) In the 1996 edition of Minnesota Statutes, the revisor 
 16.15  of statutes shall change the words "regional coordinating board" 
 16.16  to "regional board," as appropriate, wherever they appear in 
 16.17  Minnesota Statutes.  
 16.18     (c) The revisor of statutes and legislative counsel shall 
 16.19  determine the repeal of statutory sections and cross-reference 
 16.20  changes required as a result of this act and report 
 16.21  recommendations to the appropriate legislative committees by 
 16.22  January 1, 1996.  
 16.23     Sec. 20.  [APPROPRIATION.] 
 16.24     (a) $....... is appropriated from the general fund to the 
 16.25  Minnesota health coverage board to implement sections 4 to 17.  
 16.26  This appropriation is available until June 30, 1998, at which 
 16.27  time the board shall repay this amount to the general fund from 
 16.28  the Minnesota health care trust fund created in section 62K.07. 
 16.29     (b) $350,000 is appropriated from the general fund to the 
 16.30  commissioner of health for the fiscal year ending June 30, 1996, 
 16.31  to provide staffing for the regional boards. 
 16.32     Sec. 21.  [REPEALER.] 
 16.33     (a) Minnesota Statutes 1994, sections 62J.05; and 62J.09, 
 16.34  subdivision 2, are repealed effective January 1, 1996. 
 16.35     (b) Minnesota Statutes 1994, sections 62J.09, subdivision 
 16.36  8; 62J.19; 62J.212; and 62J.65, are repealed. 
 17.1      Sec. 22.  [EFFECTIVE DATE.] 
 17.2      Section 14, prohibiting duplicative private coverage, is 
 17.3   effective January 1, 2000. 
 17.4      Sections 2 (section 62J.09, subdivision 2a), providing a 
 17.5   new membership for the regional coordinating boards, and 8 
 17.6   (section 62K.03), establishing the Minnesota health coverage 
 17.7   board, are effective January 1, 1996.