1.1                          A bill for an act 
  1.2             relating to health; modifying provisions related to 
  1.3             health maintenance organizations; amending Minnesota 
  1.4             Statutes 1996, sections 62D.02, subdivision 10; 
  1.5             62D.03, subdivisions 3 and 4; 62D.04, subdivision 3; 
  1.6             62D.042, subdivision 3; 62D.06, subdivision 1; 62D.07, 
  1.7             subdivision 3; 62D.09, subdivisions 1, 3, and 8; 
  1.8             62D.102; 62D.11, subdivisions 1, 1b, and 3; 62D.12, by 
  1.9             adding a subdivision; 62D.20, subdivision 2; 62J.60, 
  1.10            subdivision 3; 62Q.105; 62Q.106; and 62Q.30; repealing 
  1.11            Minnesota Statutes 1996, sections 62D.03, subdivision 
  1.12            2; 62D.11, subdivision 4; and 62Q.11. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1996, section 62D.02, 
  1.15  subdivision 10, is amended to read: 
  1.16     Subd. 10.  "Consumer" means any person other than a person 
  1.17  (a) whose occupation involves, or before retirement involved, 
  1.18  the administration of health activities or the providing of 
  1.19  health services; (b) who is, or ever was, employed by a health 
  1.20  care facility, as a licensed health professional; or (c) who 
  1.21  has, or ever had, a direct, substantial financial or managerial 
  1.22  interest in the rendering of health service other than the 
  1.23  payment of reasonable expense reimbursement or compensation as a 
  1.24  member of the board of a health maintenance organization, 
  1.25  including an enrollee, to whom a health maintenance organization 
  1.26  directs marketing materials. 
  1.27     Sec. 2.  Minnesota Statutes 1996, section 62D.03, 
  1.28  subdivision 3, is amended to read: 
  1.29     Subd. 3.  The commissioner of health may require any person 
  2.1   providing physician and hospital services with payments made in 
  2.2   the manner set forth in section 62D.02, subdivision 4, to apply 
  2.3   for a certificate of authority under sections 62D.01 to 62D.30.  
  2.4   An applicant may continue to operate until the commissioner of 
  2.5   health acts upon the application.  In the event that an 
  2.6   application is denied, the applicant shall henceforth be treated 
  2.7   as a health maintenance organization whose certificate of 
  2.8   authority has been revoked.  Any person directed to apply for a 
  2.9   certificate of authority shall be subject to the provisions 
  2.10  of this subdivision 2. 
  2.11     Sec. 3.  Minnesota Statutes 1996, section 62D.03, 
  2.12  subdivision 4, is amended to read: 
  2.13     Subd. 4.  Each application for a certificate of authority 
  2.14  shall be verified by an officer or authorized representative of 
  2.15  the applicant, and shall be in a form prescribed by the 
  2.16  commissioner of health.  Each application shall include the 
  2.17  following: 
  2.18     (a) a copy of the basic organizational document, if any, of 
  2.19  the applicant and of each major participating entity; such as 
  2.20  the articles of incorporation, or other applicable documents, 
  2.21  and all amendments thereto; 
  2.22     (b) a copy of the bylaws, rules and regulations, or similar 
  2.23  document, if any, and all amendments thereto which regulate the 
  2.24  conduct of the affairs of the applicant and of each major 
  2.25  participating entity; 
  2.26     (c) a list of the names, addresses, and official positions 
  2.27  of the following: 
  2.28     (1) all members of the board of directors, or governing 
  2.29  body of the local government unit, and the principal officers 
  2.30  and shareholders of the applicant organization; and 
  2.31     (2) all members of the board of directors, or governing 
  2.32  body of the local government unit, and the principal officers of 
  2.33  the major participating entity and each shareholder beneficially 
  2.34  owning more than ten percent of any voting stock of the major 
  2.35  participating entity; 
  2.36     The commissioner may by rule identify persons included in 
  3.1   the term "principal officers"; 
  3.2      (d) a full disclosure of the extent and nature of any 
  3.3   contract or financial arrangements between the following:  
  3.4      (1) the health maintenance organization and the persons 
  3.5   listed in clause (c)(1); 
  3.6      (2) the health maintenance organization and the persons 
  3.7   listed in clause (c)(2); 
  3.8      (3) each major participating entity and the persons listed 
  3.9   in clause (c)(1) concerning any financial relationship with the 
  3.10  health maintenance organization; and 
  3.11     (4) each major participating entity and the persons listed 
  3.12  in clause (c)(2) concerning any financial relationship with the 
  3.13  health maintenance organization; 
  3.14     (e) the name and address of each participating entity and 
  3.15  the agreed upon duration of each contract or agreement; 
  3.16     (f) a copy of the form of each contract binding the 
  3.17  participating entities and the health maintenance organization.  
  3.18  Contractual provisions shall be consistent with the purposes of 
  3.19  sections 62D.01 to 62D.30, in regard to the services to be 
  3.20  performed under the contract, the manner in which payment for 
  3.21  services is determined, the nature and extent of 
  3.22  responsibilities to be retained by the health maintenance 
  3.23  organization, the nature and extent of risk sharing permissible, 
  3.24  and contractual termination provisions; 
  3.25     (g) a copy of each contract binding major participating 
  3.26  entities and the health maintenance organization.  Contract 
  3.27  information filed with the commissioner shall be confidential 
  3.28  and subject to the provisions of section 13.37, subdivision 1, 
  3.29  clause (b), upon the request of the health maintenance 
  3.30  organization.  
  3.31     Upon initial filing of each contract, the health 
  3.32  maintenance organization shall file a separate document 
  3.33  detailing the projected annual expenses to the major 
  3.34  participating entity in performing the contract and the 
  3.35  projected annual revenues received by the entity from the health 
  3.36  maintenance organization for such performance.  The commissioner 
  4.1   shall disapprove any contract with a major participating entity 
  4.2   if the contract will result in an unreasonable expense under 
  4.3   section 62D.19.  The commissioner shall approve or disapprove a 
  4.4   contract within 30 days of filing.  
  4.5      Within 120 days of the anniversary of the implementation of 
  4.6   each contract, the health maintenance organization shall file a 
  4.7   document detailing the actual expenses incurred and reported by 
  4.8   the major participating entity in performing the contract in the 
  4.9   preceding year and the actual revenues received from the health 
  4.10  maintenance organization by the entity in payment for the 
  4.11  performance.; 
  4.12     Contracts implemented prior to April 25, 1984, shall be 
  4.13  filed within 90 days of April 25, 1984.  These contracts are 
  4.14  subject to the provisions of section 62D.19, but are not subject 
  4.15  to the prospective review prescribed by this clause, unless or 
  4.16  until the terms of the contract are modified.  Commencing with 
  4.17  the next anniversary of the implementation of each of these 
  4.18  contracts immediately following filing, the health maintenance 
  4.19  organization shall, as otherwise required by this subdivision, 
  4.20  file annual actual expenses and revenues; 
  4.21     (h) a statement generally describing the health maintenance 
  4.22  organization, its health maintenance contracts and separate 
  4.23  health service contracts, facilities, and personnel, including a 
  4.24  statement describing the manner in which the applicant proposes 
  4.25  to provide enrollees with comprehensive health maintenance 
  4.26  services and separate health services; 
  4.27     (i) a copy of the form of each evidence of coverage to be 
  4.28  issued to the enrollees; 
  4.29     (j) a copy of the form of each individual or group health 
  4.30  maintenance contract and each separate health service contract 
  4.31  which is to be issued to enrollees or their representatives; 
  4.32     (k) financial statements showing the applicant's assets, 
  4.33  liabilities, and sources of financial support.  If the 
  4.34  applicant's financial affairs are audited by independent 
  4.35  certified public accountants, a copy of the applicant's most 
  4.36  recent certified financial statement may be deemed to satisfy 
  5.1   this requirement; 
  5.2      (l) a description of the proposed method of marketing the 
  5.3   plan, a schedule of proposed charges, and a financial plan which 
  5.4   includes a three-year projection of the expenses and income and 
  5.5   other sources of future capital; 
  5.6      (m) a statement reasonably describing the geographic area 
  5.7   or areas to be served and the type or types of enrollees to be 
  5.8   served; 
  5.9      (n) a description of the complaint procedures to be 
  5.10  utilized as required under section 62D.11; 
  5.11     (o) a description of the procedures and programs to be 
  5.12  implemented to meet the requirements of section 62D.04, 
  5.13  subdivision 1, clauses (b) and (c) and to monitor the quality of 
  5.14  health care provided to enrollees; 
  5.15     (p) a description of the mechanism by which enrollees will 
  5.16  be afforded an opportunity to participate in matters of policy 
  5.17  and operation under section 62D.06; 
  5.18     (q) a copy of any agreement between the health maintenance 
  5.19  organization and an insurer or nonprofit health service 
  5.20  corporation regarding reinsurance, stop-loss coverage, 
  5.21  insolvency coverage, or any other type of coverage for potential 
  5.22  costs of health services, as authorized in sections 62D.04, 
  5.23  subdivision 1, clause (f), 62D.05, subdivision 3, and 62D.13; 
  5.24     (r) a copy of the conflict of interest policy which applies 
  5.25  to all members of the board of directors and the principal 
  5.26  officers of the health maintenance organization, as described in 
  5.27  section 62D.04, subdivision 1, paragraph (g).  All currently 
  5.28  licensed health maintenance organizations shall also file a 
  5.29  conflict of interest policy with the commissioner within 60 days 
  5.30  after August 1, 1990, or at a later date if approved by the 
  5.31  commissioner; 
  5.32     (s) a copy of the statement that describes the health 
  5.33  maintenance organization's prior authorization administrative 
  5.34  procedures; 
  5.35     (t) a copy of the agreement between the guaranteeing 
  5.36  organization and the health maintenance organization, as 
  6.1   described in section 62D.043, subdivision 6; and 
  6.2      (u) other information as the commissioner of health may 
  6.3   reasonably require to be provided. 
  6.4      Sec. 4.  Minnesota Statutes 1996, section 62D.04, 
  6.5   subdivision 3, is amended to read: 
  6.6      Subd. 3.  Except as provided in section 62D.03, subdivision 
  6.7   2, no person who has not been issued a certificate of authority 
  6.8   shall use the words "health maintenance organization" or the 
  6.9   initials "HMO" in its name, contracts or literature.  Provided, 
  6.10  however, that persons who are operating under a contract with, 
  6.11  operating in association with, enrolling enrollees for, or 
  6.12  otherwise authorized by a health maintenance organization 
  6.13  licensed under sections 62D.01 to 62D.30 to act on its behalf 
  6.14  may use the terms "health maintenance organization" or "HMO" for 
  6.15  the limited purpose of denoting or explaining their association 
  6.16  or relationship with the authorized health maintenance 
  6.17  organization.  No health maintenance organization which has a 
  6.18  minority of consumers enrollees elected according to section 
  6.19  62D.06, subdivision 1, as members of its board of directors 
  6.20  shall use the words "consumer controlled" in its name or in any 
  6.21  way represent to the public that it is controlled by consumers. 
  6.22     Sec. 5.  Minnesota Statutes 1996, section 62D.042, 
  6.23  subdivision 3, is amended to read: 
  6.24     Subd. 3.  [PHASE-IN FOR EXISTING ORGANIZATIONS.] (a) 
  6.25  Organizations that obtained a certificate of authority on or 
  6.26  before April 25, 1988, have until December 31, 1993, to 
  6.27  establish a net worth of at least 8-1/3 percent of the sum of 
  6.28  all expenses incurred during the previous calendar year, or 
  6.29  $1,000,000, whichever is greater. 
  6.30     (b) By December 31, 1989, organizations shall have a net 
  6.31  worth of at least one-fifth of 8-1/3 percent of the sum of all 
  6.32  expenses incurred during the previous calendar year, or 
  6.33  $1,000,000, whichever is greater. 
  6.34     (c) By December 31, 1990, organizations shall have a net 
  6.35  worth of at least two-fifths of 8-1/3 percent of the sum of all 
  6.36  expenses incurred during the previous calendar year, or 
  7.1   $1,000,000, whichever is greater. 
  7.2      (d) By December 31, 1991, organizations shall have a net 
  7.3   worth of at least three-fifths of 8-1/3 percent of the sum of 
  7.4   all expenses incurred during the previous calendar year, or 
  7.5   $1,000,000, whichever is greater. 
  7.6      (e) By December 31, 1992, organizations Each organization 
  7.7   shall have a net worth of at least four-fifths of 8-1/3 percent 
  7.8   of the sum of all expenses incurred during the previous calendar 
  7.9   year, or $1,000,000, whichever is greater. 
  7.10     Sec. 6.  Minnesota Statutes 1996, section 62D.06, 
  7.11  subdivision 1, is amended to read: 
  7.12     Subdivision 1.  The governing body of any health 
  7.13  maintenance organization which is a nonprofit corporation may 
  7.14  include enrollees, providers, or other individuals; provided, 
  7.15  however, that after a health maintenance organization which is a 
  7.16  nonprofit corporation has been authorized under sections 62D.01 
  7.17  to 62D.30 for one year, at least 40 percent of the governing 
  7.18  body shall be composed of consumers enrollees elected by the 
  7.19  enrollees from among the enrollees.  An enrollee elected to the 
  7.20  governing board may not be a person (1) whose occupation 
  7.21  involves, or before retirement involved, the administration of 
  7.22  health activities or the provision of health services; (2) who 
  7.23  is or was employed by a health care facility as a licensed 
  7.24  health professional; or (3) who has or had a direct substantial 
  7.25  financial or managerial interest in the rendering of health 
  7.26  service, other than the payment of reasonable expense 
  7.27  reimbursement or compensation as a member of the board of a 
  7.28  health maintenance organization. 
  7.29     After a health maintenance organization which is a local 
  7.30  governmental unit has been authorized under sections 62D.01 to 
  7.31  62D.30 for one year, an enrollee advisory body shall be 
  7.32  established.  The enrollees who make up this advisory body shall 
  7.33  be elected by the enrollees from among the enrollees. 
  7.34     Sec. 7.  Minnesota Statutes 1996, section 62D.07, 
  7.35  subdivision 3, is amended to read: 
  7.36     Subd. 3.  Contracts and evidences of coverage shall contain:
  8.1      (a) No provisions or statements which are unjust, unfair, 
  8.2   inequitable, misleading, deceptive, or which are untrue, 
  8.3   misleading, or deceptive as defined in section 62D.12, 
  8.4   subdivision 1; and 
  8.5      (b) A clear, concise and complete statement of: 
  8.6      (1) the health care services and the insurance or other 
  8.7   benefits, if any, to which the enrollee is entitled under the 
  8.8   health maintenance contract; 
  8.9      (2) any exclusions or limitations on the services, kind of 
  8.10  services, benefits, or kind of benefits, to be provided, 
  8.11  including any deductible or copayment feature and requirements 
  8.12  for referrals, prior authorizations, and second opinions; 
  8.13     (3) where and in what manner information is available as to 
  8.14  how services, including emergency and out of area services, may 
  8.15  be obtained; 
  8.16     (4) the total amount of payment and copayment, if any, for 
  8.17  health care services and the indemnity or service benefits, if 
  8.18  any, which the enrollee is obligated to pay with respect to 
  8.19  individual contracts, or an indication whether the plan is 
  8.20  contributory or noncontributory with respect to group 
  8.21  certificates; and 
  8.22     (5) a description of the health maintenance organization's 
  8.23  method for resolving enrollee complaints and a statement 
  8.24  identifying the commissioner as an external source with whom 
  8.25  grievances complaints may be registered.; and 
  8.26     (c) On the cover page of the evidence of coverage and 
  8.27  contract, a clear and complete statement of enrollees' rights as 
  8.28  consumers.  The statement must be in bold print and captioned 
  8.29  "Important Consumer Enrollee Information and Enrollee Bill of 
  8.30  Rights" and must include but not be limited to the following 
  8.31  provisions in the following language or in substantially similar 
  8.32  language approved in advance by the commissioner:  
  8.33                 CONSUMER ENROLLEE INFORMATION 
  8.34     (1) COVERED SERVICES:  Services provided by (name of health 
  8.35  maintenance organization) will be covered only if services are 
  8.36  provided by participating (name of health maintenance 
  9.1   organization) providers or authorized by (name of health 
  9.2   maintenance organization).  Your contract fully defines what 
  9.3   services are covered and describes procedures you must follow to 
  9.4   obtain coverage. 
  9.5      (2) PROVIDERS:  Enrolling in (name of health maintenance 
  9.6   organization) does not guarantee services by a particular 
  9.7   provider on the list of providers.  When a provider is no longer 
  9.8   part of (name of health maintenance organization), you must 
  9.9   choose among remaining (name of the health maintenance 
  9.10  organization) providers. 
  9.11     (3) REFERRALS:  Certain services are covered only upon 
  9.12  referral.  See section (section number) of your contract for 
  9.13  referral requirements.  All referrals to non-(name of health 
  9.14  maintenance organization) providers and certain types of health 
  9.15  care providers must be authorized by (name of health maintenance 
  9.16  organization). 
  9.17     (4) EMERGENCY SERVICES:  Emergency services from providers 
  9.18  who are not affiliated with (name of health maintenance 
  9.19  organization) will be covered only if proper procedures are 
  9.20  followed.  Your contract explains the procedures and benefits 
  9.21  associated with emergency care from (name of health maintenance 
  9.22  organization) and non-(name of health maintenance organization) 
  9.23  providers. 
  9.24     (5) EXCLUSIONS:  Certain services or medical supplies are 
  9.25  not covered.  You should read the contract for a detailed 
  9.26  explanation of all exclusions. 
  9.27     (6) CONTINUATION:  You may convert to an individual health 
  9.28  maintenance organization contract or continue coverage under 
  9.29  certain circumstances.  These continuation and conversion rights 
  9.30  are explained fully in your contract. 
  9.31     (7) CANCELLATION:  Your coverage may be canceled by you or 
  9.32  (name of health maintenance organization) only under certain 
  9.33  conditions.  Your contract describes all reasons for 
  9.34  cancellation of coverage. 
  9.35     (8) NEWBORN COVERAGE:  If your health plan provides for 
  9.36  dependent coverage, a newborn infant is covered from birth, but 
 10.1   only if services are provided by participating (name of health 
 10.2   maintenance organization) providers or authorized by (name of 
 10.3   health maintenance organization).  Certain services are covered 
 10.4   only upon referral.  (Name of health maintenance organization) 
 10.5   will not automatically know of the infant's birth or that you 
 10.6   would like coverage under your plan.  You should notify (name of 
 10.7   health maintenance organization) of the infant's birth and that 
 10.8   you would like coverage.  If your contract requires an 
 10.9   additional premium for each dependent, (name of health 
 10.10  maintenance organization) is entitled to all premiums due from 
 10.11  the time of the infant's birth until the time you notify (name 
 10.12  of health maintenance organization) of the birth.  (Name of 
 10.13  health maintenance organization) may withhold payment of any 
 10.14  health benefits for the newborn infant until any premiums you 
 10.15  owe are paid. 
 10.16                      ENROLLEE BILL OF RIGHTS 
 10.17     (1) Enrollees have the right to available and accessible 
 10.18  services including emergency services, as defined in your 
 10.19  contract, 24 hours a day and seven days a week; 
 10.20     (2) Enrollees have the right to be informed of health 
 10.21  problems, and to receive information regarding treatment 
 10.22  alternatives and risks which is sufficient to assure informed 
 10.23  choice; 
 10.24     (3) Enrollees have the right to refuse treatment, and the 
 10.25  right to privacy of medical and financial records maintained by 
 10.26  the health maintenance organization and its health care 
 10.27  providers, in accordance with existing law; 
 10.28     (4) Enrollees have the right to file a grievance complaint 
 10.29  with the health maintenance organization and the commissioner of 
 10.30  health and the right to initiate a legal proceeding when 
 10.31  experiencing a problem with the health maintenance organization 
 10.32  or its health care providers; 
 10.33     (5) Enrollees have the right to a grace period of 31 days 
 10.34  for the payment of each premium for an individual health 
 10.35  maintenance contract falling due after the first premium during 
 10.36  which period the contract shall continue in force; 
 11.1      (6) Medicare enrollees have the right to voluntarily 
 11.2   disenroll from the health maintenance organization and the right 
 11.3   not to be requested or encouraged to disenroll except in 
 11.4   circumstances specified in federal law; and 
 11.5      (7) Medicare enrollees have the right to a clear 
 11.6   description of nursing home and home care benefits covered by 
 11.7   the health maintenance organization. 
 11.8      Sec. 8.  Minnesota Statutes 1996, section 62D.09, 
 11.9   subdivision 1, is amended to read: 
 11.10     Subdivision 1.  (a) Any written marketing materials which 
 11.11  may be directed toward potential enrollees and which include a 
 11.12  detailed description of benefits provided by the health 
 11.13  maintenance organization shall include a statement of 
 11.14  consumer enrollee information and rights as described in section 
 11.15  62D.07, subdivision 3, paragraphs (b) and (c).  Prior to any 
 11.16  oral marketing presentation, the agent marketing the plan must 
 11.17  inform the potential enrollees that any complaints concerning 
 11.18  the material presented should be directed to the health 
 11.19  maintenance organization, the commissioner of health, or, if 
 11.20  applicable, the employer. 
 11.21     (b) Detailed marketing materials must affirmatively 
 11.22  disclose all exclusions and limitations in the organization's 
 11.23  services or kinds of services offered to the contracting party, 
 11.24  including but not limited to the following types of exclusions 
 11.25  and limitations: 
 11.26     (1) health care services not provided; 
 11.27     (2) health care services requiring copayments or 
 11.28  deductibles paid by enrollees; 
 11.29     (3) the fact that access to health care services does not 
 11.30  guarantee access to a particular provider type; and 
 11.31     (4) health care services that are or may be provided only 
 11.32  by referral of a physician. 
 11.33     (c) No marketing materials may lead consumers to believe 
 11.34  that all health care needs will be covered.  All marketing 
 11.35  materials must alert consumers to possible uncovered expenses 
 11.36  with the following language in bold print:  "THIS HEALTH CARE 
 12.1   PLAN MAY NOT COVER ALL YOUR HEALTH CARE EXPENSES; READ YOUR 
 12.2   CONTRACT CAREFULLY TO DETERMINE WHICH EXPENSES ARE COVERED."  
 12.3   Immediately following the disclosure required under paragraph 
 12.4   (b), clause (3), consumers must be given a telephone number to 
 12.5   use to contact the health maintenance organization for specific 
 12.6   information about access to provider types. 
 12.7      (d) The disclosures required in paragraphs (b) and (c) are 
 12.8   not required on billboards or image, and name identification 
 12.9   advertisement. 
 12.10     Sec. 9.  Minnesota Statutes 1996, section 62D.09, 
 12.11  subdivision 3, is amended to read: 
 12.12     Subd. 3.  Every health maintenance organization or its 
 12.13  representative shall annually, before June 1, provide to its 
 12.14  enrollees the following:  (1) a summary of its most recent 
 12.15  annual financial statement including a balance sheet and 
 12.16  statement of receipts and disbursements; (2) a description of 
 12.17  the health maintenance organization, its health care plan or 
 12.18  plans, its facilities and personnel, any material changes 
 12.19  therein since the last report; (3) the current evidence of 
 12.20  coverage or contract; and (4) a statement of consumer enrollee 
 12.21  information and rights as described in section 62D.07, 
 12.22  subdivision 3, paragraph (c). 
 12.23     Sec. 10.  Minnesota Statutes 1996, section 62D.09, 
 12.24  subdivision 8, is amended to read: 
 12.25     Subd. 8.  Each health maintenance organization shall issue 
 12.26  a membership card to its enrollees.  The membership card must: 
 12.27     (1) identify the health maintenance organization; 
 12.28     (2) include the name, address, and telephone number to call 
 12.29  if the enroller enrollee has a complaint; 
 12.30     (3) include the telephone number to call or the instruction 
 12.31  on how to receive authorization for emergency care; and 
 12.32     (4) include one of the following: 
 12.33     (i) the telephone number to call to appeal to or file a 
 12.34  complaint with the commissioner of health.; or 
 12.35     (ii) for persons enrolled under section 256.9363, 256B.69, 
 12.36  or 256D.03, the telephone numbers to call to appeal to the 
 13.1   commissioner of human services and to file a complaint with the 
 13.2   ombudsman designated by the commissioner of human services under 
 13.3   section 256B.031, who shall annually provide a summary of 
 13.4   complaints and actions taken to the commissioner of health. 
 13.5      Sec. 11.  Minnesota Statutes 1996, section 62D.102, is 
 13.6   amended to read: 
 13.7      62D.102 [MINIMUM BENEFITS.] 
 13.8      (a) In addition to minimum requirements established in 
 13.9   other sections, all group health maintenance contracts providing 
 13.10  benefits for mental or nervous disorder treatments in a hospital 
 13.11  shall also provide coverage for at least ten hours of treatment 
 13.12  over a 12-month period with a copayment not to exceed the 
 13.13  greater of $10 or 20 percent of the applicable usual and 
 13.14  customary charge for mental or nervous disorder consultation, 
 13.15  diagnosis and treatment services delivered while the enrollee is 
 13.16  not a bed patient in a hospital and at least 75 percent of the 
 13.17  cost of the usual and customary charges for any additional hours 
 13.18  of ambulatory mental health treatment during the same 12-month 
 13.19  benefit period for serious or persistent mental or nervous 
 13.20  disorders.  Prior authorization may be required for an extension 
 13.21  of coverage beyond ten hours of treatment.  This prior 
 13.22  authorization must be based upon the severity of the disorder, 
 13.23  the patient's risk of deterioration without ongoing treatment 
 13.24  and maintenance, degree of functional impairment, and a concise 
 13.25  treatment plan.  Authorization for extended treatment may be 
 13.26  limited to a maximum of 30 visit hours during any 12-month 
 13.27  benefit period. All health plans that provide inpatient and 
 13.28  outpatient mental health and chemical dependency services must 
 13.29  do so in accordance with the cost-sharing and benefit or service 
 13.30  limitation requirements of section 62Q.47. 
 13.31     (b) For purposes of this section, covered treatment for a 
 13.32  minor includes treatment for the family if family therapy is 
 13.33  recommended by a health maintenance organization provider.  For 
 13.34  purposes of determining benefits under this section, "hours of 
 13.35  treatment" means treatment rendered on an individual or 
 13.36  single-family basis.  If treatment is rendered on a group basis, 
 14.1   the hours of covered group treatment must be provided at a ratio 
 14.2   of no less than two group treatment sessions to one individual 
 14.3   treatment hour.  For a health maintenance contract that is 
 14.4   offered as a companion to a health insurance subscriber 
 14.5   contract, the benefits for mental or nervous disorders must be 
 14.6   calculated in aggregate for the health maintenance contract and 
 14.7   the health insurance subscriber contract. 
 14.8      Sec. 12.  Minnesota Statutes 1996, section 62D.11, 
 14.9   subdivision 1, is amended to read: 
 14.10     Subdivision 1.  [ENROLLEE COMPLAINT SYSTEM.] Every health 
 14.11  maintenance organization shall establish and maintain a 
 14.12  complaint system, as required under section 62Q.105 to provide 
 14.13  reasonable procedures for the resolution of written complaints 
 14.14  initiated by or on behalf of enrollees concerning the provision 
 14.15  of health care services.  "Provision of health services" 
 14.16  includes, but is not limited to, questions of the scope of 
 14.17  coverage, quality of care, and administrative operations.  The 
 14.18  health maintenance organization must inform enrollees that they 
 14.19  may choose to use an alternative dispute resolution process to 
 14.20  appeal a health maintenance organization's internal appeal 
 14.21  decision.  If an enrollee chooses to use an alternative dispute 
 14.22  resolution process, the health maintenance organization must 
 14.23  participate. 
 14.24     Sec. 13.  Minnesota Statutes 1996, section 62D.11, 
 14.25  subdivision 1b, is amended to read: 
 14.26     Subd. 1b.  [EXPEDITED RESOLUTION OF COMPLAINTS ABOUT 
 14.27  URGENTLY NEEDED SERVICE MEDICALLY URGENT SERVICES.] In addition 
 14.28  to any remedy contained in subdivision 1a, when a complaint 
 14.29  involves a dispute about a health maintenance organization's 
 14.30  coverage of an immediately and urgently needed service, the 
 14.31  commissioner may also order the health maintenance organization 
 14.32  to use an expedited system to process the complaint.  
 14.33     Sec. 14.  Minnesota Statutes 1996, section 62D.11, 
 14.34  subdivision 3, is amended to read: 
 14.35     Subd. 3.  [DENIAL OF SERVICE COVERAGE.] Within a reasonable 
 14.36  time after receiving an enrollee's written or oral communication 
 15.1   to the health maintenance organization concerning a refusal 
 15.2   denial of service coverage or inadequacy of services, the health 
 15.3   maintenance organization shall provide the enrollee with a 
 15.4   written statement of the reason for the refusal denial of 
 15.5   service coverage, and a statement approved by the commissioner 
 15.6   of health which explains the health maintenance organization 
 15.7   complaint procedures, and in the case of Medicare enrollees, 
 15.8   which also explains Medicare appeal procedures. 
 15.9      Sec. 15.  Minnesota Statutes 1996, section 62D.12, is 
 15.10  amended by adding a subdivision to read: 
 15.11     Subd. 19.  [COVERAGE OF SERVICE.] A health maintenance 
 15.12  organization may not deny or limit coverage of a service which 
 15.13  the enrollee has already received solely on the basis of lack of 
 15.14  prior authorization or second opinion, to the extent that the 
 15.15  service would otherwise have been covered under the member's 
 15.16  contract by the health maintenance organization had prior 
 15.17  authorization or second opinion been obtained. 
 15.18     Sec. 16.  Minnesota Statutes 1996, section 62D.20, 
 15.19  subdivision 2, is amended to read: 
 15.20     Subd. 2.  [PRIOR AUTHORIZATION.] The commissioner shall 
 15.21  adopt rules that address the issue of appropriate prior 
 15.22  authorization requirements, considering consumer enrollee needs, 
 15.23  administrative concerns, and the nature of the benefit. 
 15.24     Sec. 17.  Minnesota Statutes 1996, section 62J.60, 
 15.25  subdivision 3, is amended to read: 
 15.26     Subd. 3.  [HUMAN READABLE DATA ELEMENTS.] (a) The following 
 15.27  are the minimum human readable data elements that must be 
 15.28  present on the front side of the Minnesota health care 
 15.29  identification card: 
 15.30     (1) card issuer name or logo, which is the name or logo 
 15.31  that identifies the card issuer.  The card issuer name or logo 
 15.32  may be the card's front background.  No standard label is 
 15.33  required for this data element; 
 15.34     (2) claim submission number.  The standardized label for 
 15.35  this element is "Clm Subm #"; 
 15.36     (3) identification number, which is the unique 
 16.1   identification number of the individual card holder established 
 16.2   and defined under this section.  The standardized label for the 
 16.3   data element is "ID"; 
 16.4      (4) identification name, which is the name of the 
 16.5   individual card holder.  The identification name must be 
 16.6   formatted as follows:  first name, space, optional middle 
 16.7   initial, space, last name, optional space and name suffix.  The 
 16.8   standardized label for this data element is "Name"; 
 16.9      (5) account number(s), which is any other number, such as a 
 16.10  group number, if required for part of the identification or 
 16.11  claims process.  The standardized label for this data element is 
 16.12  "Account"; 
 16.13     (6) care type, which is the description of the group 
 16.14  purchaser's plan product under which the beneficiary is 
 16.15  covered.  The description shall include the health plan company 
 16.16  name and the plan or product name.  The standardized label for 
 16.17  this data element is "Care Type"; 
 16.18     (7) service type, which is the description of coverage 
 16.19  provided such as hospital, dental, vision, prescription, or 
 16.20  mental health.  The standard label for this data element is "Svc 
 16.21  Type"; and 
 16.22     (8) provider/clinic name, which is the name of the primary 
 16.23  care clinic the card holder is assigned to by the health plan 
 16.24  company.  The standard label for this field is "PCP."  This 
 16.25  information is mandatory only if the health plan company assigns 
 16.26  a specific primary care provider to the card holder. 
 16.27     (b) The following human readable data elements shall be 
 16.28  present on the back side of the Minnesota health identification 
 16.29  card.  These elements must be left justified, and no optional 
 16.30  data elements may be interspersed between them:  
 16.31     (1) claims submission name(s) and address(es), which are 
 16.32  the name(s) and address(es) of the entity or entities to which 
 16.33  claims should be submitted.  If different destinations are 
 16.34  required for different types of claims, this must be 
 16.35  labeled; and 
 16.36     (2) telephone number(s) and name(s); which are the 
 17.1   telephone number(s) and name(s) of the following contact(s) with 
 17.2   a standardized label describing the service function as 
 17.3   applicable:  
 17.4      (i) eligibility and benefit information; 
 17.5      (ii) utilization review; 
 17.6      (iii) precertification; or 
 17.7      (iv) customer services. 
 17.8      (c) The following human readable data elements are 
 17.9   mandatory on the back side of the card for health maintenance 
 17.10  organizations and integrated service networks: 
 17.11     (1) emergency care authorization telephone number or 
 17.12  instruction on how to receive authorization for emergency care.  
 17.13  There is no standard label required for this information; and 
 17.14     (2) one of the following: 
 17.15     (i) telephone number to call to appeal to or file a 
 17.16  complaint with the commissioner of health; or 
 17.17     (ii) for persons enrolled under sections 256.9363, 256B.69, 
 17.18  or 256D.03, telephone numbers to call to appeal to the 
 17.19  commissioner of human services and to file a complaint with the 
 17.20  ombudsman designated by the commissioner of human services under 
 17.21  section 256B.031, who shall annually provide a summary of 
 17.22  complaints and the actions taken to the commissioner of health.  
 17.23  There is no standard label required for this information. 
 17.24     (d) All human readable data elements not required under 
 17.25  paragraphs (a) to (c) are optional and may be used at the 
 17.26  issuer's discretion. 
 17.27     Sec. 18.  Minnesota Statutes 1996, section 62Q.105, is 
 17.28  amended to read: 
 17.29     62Q.105 [HEALTH PLAN COMPANY COMPLAINT PROCEDURE.] 
 17.30     Subdivision 1.  [ESTABLISHMENT.] Each health plan company 
 17.31  shall establish and make available to enrollees, by July 1, 
 17.32  1997, an informal complaint resolution process that meets the 
 17.33  requirements of this section.  A health plan company must make 
 17.34  reasonable efforts to resolve enrollee complaints, and must 
 17.35  inform complainants in writing of the company's decision and the 
 17.36  reasons for it within 30 days of receiving the complaint.  The 
 18.1   complaint resolution process must treat the complaint and 
 18.2   information related to it as required under sections 72A.49 to 
 18.3   72A.505. 
 18.4      Subd. 2.  [MEDICALLY URGENT COMPLAINTS.] A medically urgent 
 18.5   complaint involves medically necessary care which does not meet 
 18.6   the definition of emergency care but is needed as soon as 
 18.7   possible, usually within 24 hours, to protect the health of the 
 18.8   enrollee.  Health plan companies shall make reasonable efforts 
 18.9   to promptly resolve medically urgent enrollee complaints within 
 18.10  72 hours and promptly notify the enrollee and the commissioner 
 18.11  of their decisions, but in no case later than three business 
 18.12  days of receiving the complaint. 
 18.13     Subd. 3.  [APPEALS PROCESS.] Health plan companies shall 
 18.14  establish and make available to enrollees an impartial internal 
 18.15  appeals process.  If a decision by a health plan company 
 18.16  regarding a complaint is partially or wholly adverse to the 
 18.17  complainant, the health plan company shall advise the 
 18.18  complainant of the right to additional appeal through the 
 18.19  impartial appeals process or to the commissioner. mechanisms 
 18.20  under this section.  The person or persons conducting the appeal 
 18.21  must have the authority to resolve or recommend the resolution 
 18.22  of the complaint and must not be solely the person or persons 
 18.23  who decided the enrollee's original complaint.  A health plan 
 18.24  company must inform the enrollee of the outcome of an internal 
 18.25  appeal in writing, and the reasons for it, within 45 days of 
 18.26  receiving the appeal.  A health plan company must explain 
 18.27  Medicare appeal procedures to its Medicare enrollees.  For 
 18.28  persons enrolled in health care programs established under 
 18.29  section 256.9363, 256B.69, or 256D.03, a health plan company 
 18.30  must explain how to contact the managed care ombudsman at the 
 18.31  department of human services. 
 18.32     Subd. 4.  [ALTERNATIVE DISPUTE RESOLUTION.] Health plan 
 18.33  companies shall make available to enrollees an alternative 
 18.34  dispute resolution process according to subdivision 10 to appeal 
 18.35  health plan company internal appeal decisions, and shall 
 18.36  participate in that alternative dispute resolution at the 
 19.1   request of an enrollee, as required under section 62Q.11.  A 
 19.2   health plan company must respond within 14 days of receiving the 
 19.3   enrollee's request for alternative dispute resolution and inform 
 19.4   the enrollee of the options available.  A health plan company 
 19.5   may meet the requirements of subdivision 3 by providing an 
 19.6   alternative dispute resolution process.  If the health plan 
 19.7   company chooses to provide alternative dispute resolution to 
 19.8   meet the requirements of subdivision 3, the process shall be 
 19.9   provided at no cost to the enrollee. 
 19.10     Subd. 5.  [REQUIREMENTS FOR MANAGED CARE ORGANIZATIONS.] 
 19.11  Each managed care organization shall submit all health care 
 19.12  quality related complaints to its quality review board or 
 19.13  quality review organization for evaluation and possible action.  
 19.14  The complaint resolution process for managed care organizations 
 19.15  must clearly indicate the entity responsible for resolving 
 19.16  complaints made by enrollees against hospitals, other health 
 19.17  care facilities, and health care providers, that are owned by or 
 19.18  under contract with the managed care organization. 
 19.19     Subd. 6.  [RECORDKEEPING.] Health plan companies shall 
 19.20  maintain records of all enrollee complaints and their 
 19.21  resolutions.  These records must be retained for five years, and 
 19.22  must be made available to the appropriate commissioner upon 
 19.23  request. 
 19.24     Subd. 7.  [REPORTING.] Each health plan company shall 
 19.25  submit to the appropriate commissioner, as part of the company's 
 19.26  annual filing, data on the number and type of complaints that 
 19.27  are not resolved within 30 days.  A health plan company shall 
 19.28  also make this information available to the public upon request. 
 19.29     Subd. 8.  [NOTICE TO ENROLLEES.] Health plan companies 
 19.30  shall provide a clear and complete description of their 
 19.31  complaint resolution procedures to enrollees as part of their 
 19.32  evidence of coverage or contract.  The description must 
 19.33  specifically inform enrollees: 
 19.34     (1) how to file a complaint with the health plan company; 
 19.35     (2) how to request an impartial internal appeal; 
 19.36     (3) how to appeal to or file a complaint with the 
 20.1   commissioner and that they have the right to request the use of 
 20.2   alternative methods of dispute resolution following an internal 
 20.3   appeal; and 
 20.4      (4) that they have the right to litigate. 
 20.5      Subd. 9.  [PROCEDURE.] (a) When an enrollee files a 
 20.6   complaint with the health plan company and receives the written 
 20.7   response to the complaint, the enrollee may appeal through the 
 20.8   health plan company's internal appeal process. 
 20.9      (b) When an enrollee files a complaint with the 
 20.10  commissioner, the commissioner shall investigate the complaint 
 20.11  and inform the enrollee and the health plan company of the 
 20.12  commissioner's decision.  An enrollee who receives the 
 20.13  commissioner's decision may appeal through the health plan 
 20.14  company's internal appeal process. 
 20.15     (c) An enrollee may appeal the result of the health plan 
 20.16  company's internal appeal process to the commissioner or to 
 20.17  alternative dispute resolution. 
 20.18     (d) Procedures under this section are stayed when an 
 20.19  enrollee files suit, including suit in conciliation court, 
 20.20  against a health plan company, or when the enrollee makes the 
 20.21  health plan company a party to the enrollee's suit against 
 20.22  another party concerning the facts giving rise to the enrollee's 
 20.23  complaint.  Upon a decision on the merits, the enrollee shall be 
 20.24  deemed to have waived the remedies under this section.  If an 
 20.25  enrollee's case is dismissed for reasons other than on the 
 20.26  merits or if the enrollee and health plan company agree, an 
 20.27  enrollee may access the procedures under this section. 
 20.28     Subd. 10.  [ENROLLEE DISPUTE RESOLUTION.] (a) For purposes 
 20.29  of this section and chapter 62D, "alternative dispute 
 20.30  resolution" means the methods listed and defined in Minnesota 
 20.31  General Rules of Practice, rule 114. 
 20.32     (b) Alternative dispute resolution is binding, unless the 
 20.33  parties mutually agree in advance in writing that alternative 
 20.34  dispute resolution is not binding. 
 20.35     (c) Enrollee complaints regarding employer initiated 
 20.36  actions, agent misrepresentation, or premiums are not subject to 
 21.1   alternative dispute resolution.  A medical malpractice damage 
 21.2   claim is not subject to alternative dispute resolution unless 
 21.3   agreed to by all parties subsequent to the event giving rise to 
 21.4   the claim. 
 21.5      (d) A health plan company shall inform and educate its 
 21.6   enrollees about alternative dispute resolution and its benefits. 
 21.7      (e) The enrollee and the health plan company shall mutually 
 21.8   agree to the alternative dispute method to resolve the 
 21.9   enrollee's appeal within 14 days of the enrollee's receipt of 
 21.10  alternative dispute resolution options.  Mediation-arbitration 
 21.11  shall be used if the enrollee and the health plan company cannot 
 21.12  agree.  The alternative dispute resolution must be scheduled as 
 21.13  soon as possible after the parties agree to a method.  A health 
 21.14  plan company must inform the enrollee of the outcome of an 
 21.15  alternative dispute resolution in writing, and the reasons for 
 21.16  it, within ten calendar days of receiving the outcome from the 
 21.17  alternative dispute resolution provider. 
 21.18     Subd. 11.  [PROVIDER DISPUTE RESOLUTION.] When a health 
 21.19  care provider under a contract has a dispute with a health plan 
 21.20  company that is governed neither by the federal Health Care 
 21.21  Quality Improvement Act of 1986, United States Code, title 42, 
 21.22  sections 11101 to 11152, nor by a contract between the provider 
 21.23  and the health plan company, the provider may request an 
 21.24  alternative dispute resolution process.  The health plan company 
 21.25  must participate.  The health care provider and the health plan 
 21.26  company shall mutually agree to one of the alternative dispute 
 21.27  resolution methods listed in subdivision 10 within 30 calendar 
 21.28  days of the health plan company receiving the request for 
 21.29  alternative dispute resolution.  If the provider and the health 
 21.30  plan company cannot agree on the alternative dispute resolution 
 21.31  method, mediation-arbitration shall be used.  Alternative 
 21.32  dispute resolution under this subdivision is binding unless the 
 21.33  parties mutually agree in advance in writing that alternative 
 21.34  dispute resolution is not binding. 
 21.35     Sec. 19.  Minnesota Statutes 1996, section 62Q.106, is 
 21.36  amended to read: 
 22.1      62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER COMMISSIONER'S 
 22.2   RESPONSIBILITY TO INVESTIGATE ENROLLEE COMPLAINTS.] 
 22.3      A complainant may at any time prior to binding alternative 
 22.4   dispute resolution or a judicial decision on the merits, submit 
 22.5   a complaint to the appropriate commissioner to investigate.  The 
 22.6   commissioner may investigate an enrollee complaint or enrollee 
 22.7   appeal of the health plan company's internal appeal decision.  
 22.8   When the complaint concerns the health plan company's decision 
 22.9   to not cover a service, the appropriate commissioner may review 
 22.10  the complaint and any information, including testimony, 
 22.11  necessary to resolve the complaint.  After investigating a 
 22.12  complaint, or reviewing a company's decision, the appropriate 
 22.13  commissioner may order a remedy as authorized under section 
 22.14  62N.04, 62Q.30, chapter 45, 60A, or 62D. 
 22.15     Sec. 20.  Minnesota Statutes 1996, section 62Q.30, is 
 22.16  amended to read: 
 22.17     62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION 
 22.18  PROCESS.] 
 22.19     (a) The commissioner shall establish an expedited fact 
 22.20  finding and dispute resolution process to assist enrollees of 
 22.21  health plan companies with contested medically urgent treatment, 
 22.22  coverage, and service issues to be in effect July 1, 
 22.23  1997.  "Medically urgent" has the meaning given in section 
 22.24  62Q.105, subdivision 2. 
 22.25     (b) The commissioner may order an integrated service 
 22.26  network or an all-payer insurer a health plan company to provide 
 22.27  or pay for a service that is within the standard health coverage 
 22.28  either required to be provided by law or covered under the 
 22.29  enrollee's evidence of coverage.  The commissioner shall take 
 22.30  steps including, but not limited to, fining, suspending, or 
 22.31  revoking the license of a health plan company that is the 
 22.32  subject of repeated orders by the commissioner that suggest a 
 22.33  pattern of inappropriate underutilization. 
 22.34     (c) If the disputed issue relates to whether a service is 
 22.35  appropriate and necessary, the commissioner shall issue an order 
 22.36  only after consulting with appropriate experts knowledgeable, 
 23.1   trained, and practicing in the area in dispute, reviewing 
 23.2   pertinent literature, and considering the availability of 
 23.3   satisfactory alternatives.  The commissioner shall take steps 
 23.4   including but not limited to fining, suspending, or revoking the 
 23.5   license of a health plan company that is the subject of repeated 
 23.6   orders by the commissioner that suggests a pattern of 
 23.7   inappropriate underutilization. 
 23.8      (d) Procedures under this section are stayed when an 
 23.9   enrollee files suit, including suit in conciliation court, 
 23.10  against a health plan company or when the enrollee makes the 
 23.11  health plan company a party to the enrollee's suit against 
 23.12  another party concerning the facts giving rise to the enrollee's 
 23.13  complaint.  Upon a decision on the merits, the enrollee shall be 
 23.14  deemed to have waived the remedies under this section.  If an 
 23.15  enrollee's case is dismissed for reasons other than on the 
 23.16  merits or if the enrollee and the health plan company agree, an 
 23.17  enrollee may access the procedures under this section. 
 23.18     Sec. 21.  [REPEALER.] 
 23.19     Minnesota Statutes 1996, sections 62D.03, subdivision 2; 
 23.20  62D.11, subdivision 4; and 62Q.11, are repealed.