1.1 	A bill for an act
1.2 	relating to human services; reducing the administrative costs to managed care 
1.3 	plans and county-based purchasing plans under the medical assistance program 
1.4 	and the administrative payments to third-party administrators that administer 
1.5 	the state employee group insurance plan; modifying personal care assistance 
1.6 	services; creating a withhold to managed care plans and county-based purchasing 
1.7 	plans for reducing hospitalizations; modifying the emergency room utilization 
1.8 	rate withhold to managed care plans; delaying capitation payments for single 
1.9 	adults without children in MinnesotaCare; creating demonstration projects for 
1.10 	the delivery of health care services to certain medical assistance populations; 
1.11 	limiting home and community-based waiver services allocations; requiring the 
1.12 	commissioner of human services to issue a request for proposals to provide 
1.13 	claims processing services for the fee-for-service medical assistance program; 
1.14 	amending Minnesota Statutes 2010, sections 43A.23, subdivision 1; 256B.0625, 
1.15 	subdivision 19a; 256B.0652, subdivision 6; 256B.69, subdivisions 5a, 5i, 28; 
1.16 	256L.12, subdivision 9; Laws 2009, chapter 79, article 13, section 3, subdivision 
1.17 	8, as amended.
1.18 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.19 	Section 1. Minnesota Statutes 2010, section 43A.23, subdivision 1, is amended to read:
1.20 		Subdivision 1.General. (a) The commissioner is authorized to request proposals 
1.21 	or to negotiate and to enter into contracts with parties which in the judgment of the 
1.22 	commissioner are best qualified to provide service to the benefit plans. Contracts entered 
1.23 	into are not subject to the requirements of sections 16C.16 to 16C.19. The commissioner 
1.24 	may negotiate premium rates and coverage. The commissioner shall consider the cost of 
1.25 	the plans, conversion options relating to the contracts, service capabilities, character, 
1.26 	financial position, and reputation of the carriers, and any other factors which the 
1.27 	commissioner deems appropriate. Each benefit contract must be for a uniform term of at 
1.28 	least one year, but may be made automatically renewable from term to term in the absence 
2.1 	of notice of termination by either party. A carrier licensed under chapter 62A is exempt 
2.2 	from the taxes imposed by chapter 297I on premiums paid to it by the state.
2.3 	(b) All self-insured hospital and medical service products must comply with coverage 
2.4 	mandates, data reporting, and consumer protection requirements applicable to the licensed 
2.5 	carrier administering the product, had the product been insured, including chapters 62J, 
2.6 	62M, and 62Q. Any self-insured products that limit coverage to a network of providers 
2.7 	or provide different levels of coverage between network and nonnetwork providers shall 
2.8 	comply with section 62D.123 and geographic access standards for health maintenance 
2.9 	organizations adopted by the commissioner of health in rule under chapter 62D.
2.10 	(c) Notwithstanding paragraph (b), a self-insured hospital and medical product 
2.11 	offered under sections 43A.22 to 43A.30 is not required to extend dependent coverage to 
2.12 	an eligible employee's unmarried child under the age of 25 to the full extent required under 
2.13 	chapters 62A and 62L. Dependent coverage must, at a minimum, extend to an eligible 
2.14 	employee's unmarried child who is under the age of 19 or an unmarried child under the 
2.15 	age of 25 who is a full-time student. A person who is at least 19 years of age but who is 
2.16 	under the age of 25 and who is not a full-time student must be permitted to be enrolled as 
2.17 	a dependent of an eligible employee until age 25 if the person:
2.18 	(1) was a full-time student immediately prior to being ordered into active military 
2.19 	service, as defined in section 190.05, subdivision 5b or 5c;
2.20 	(2) has been separated or discharged from active military service; and
2.21 	(3) would be eligible to enroll as a dependent of an eligible employee, except that 
2.22 	the person is not a full-time student.
2.23 	The definition of "full-time student" for purposes of this paragraph includes any student 
2.24 	who by reason of illness, injury, or physical or mental disability as documented by 
2.25 	a physician is unable to carry what the educational institution considers a full-time 
2.26 	course load so long as the student's course load is at least 60 percent of what otherwise 
2.27 	is considered by the institution to be a full-time course load. Any notice regarding 
2.28 	termination of coverage due to attainment of the limiting age must include information 
2.29 	about this definition of "full-time student."
2.30 	(d) Beginning January 1, 2010, the health insurance benefit plans offered in the 
2.31 	commissioner's plan under section 43A.18, subdivision 2, and the managerial plan under 
2.32 	section 43A.18, subdivision 3, must include an option for a health plan that is compatible 
2.33 	with the definition of a high-deductible health plan in section 223 of the United States 
2.34 	Internal Revenue Code.
2.35 	(e) Beginning January 1, 2011, any contract entered into by the commissioner with 
2.36 	a licensed carrier or third-party administrator to administer the health insurance benefit 
3.1 	plans offered under sections 43A.22 to 43A.30 shall reflect a reduction in administrative 
3.2 	costs that equals a per enrollee per month reduction of 21 cents.

3.3 	Sec. 2. Minnesota Statutes 2010, section 256B.0625, subdivision 19a, is amended to 
3.4 	read:
3.5 		Subd. 19a.Personal care assistance services. Medical assistance covers personal 
3.6 	care assistance services in a recipient's home. Effective January 1, 2010, to qualify for 
3.7 	personal care assistance services, a recipient must require assistance and be determined 
3.8 	dependent in one activity of daily living as defined in section 256B.0659, subdivision 1, 
3.9 	paragraph (b), or in a Level I behavior as defined in section 256B.0659, subdivision 1, 
3.10 	paragraph (c). Beginning July 1, 2011, to qualify for personal care assistance services, a 
3.11 	recipient must require assistance and be determined dependent in at least two activities 
3.12 	of daily living as defined in section 256B.0659. Recipients or responsible parties must 
3.13 	be able to identify the recipient's needs, direct and evaluate task accomplishment, and 
3.14 	provide for health and safety. Approved hours may be used outside the home when normal 
3.15 	life activities take them outside the home. To use personal care assistance services at 
3.16 	school, the recipient or responsible party must provide written authorization in the care 
3.17 	plan identifying the chosen provider and the daily amount of services to be used at school. 
3.18 	Total hours for services, whether actually performed inside or outside the recipient's 
3.19 	home, cannot exceed that which is otherwise allowed for personal care assistance services 
3.20 	in an in-home setting according to sections 256B.0651 to 256B.0656. Medical assistance 
3.21 	does not cover personal care assistance services for residents of a hospital, nursing facility, 
3.22 	intermediate care facility, health care facility licensed by the commissioner of health, or 
3.23 	unless a resident who is otherwise eligible is on leave from the facility and the facility 
3.24 	either pays for the personal care assistance services or forgoes the facility per diem for the 
3.25 	leave days that personal care assistance services are used. All personal care assistance 
3.26 	services must be provided according to sections 256B.0651 to 256B.0656. Personal care 
3.27 	assistance services may not be reimbursed if the personal care assistant is the spouse or 
3.28 	paid guardian of the recipient or the parent of a recipient under age 18, or the responsible 
3.29 	party or the family foster care provider of a recipient who cannot direct the recipient's own 
3.30 	care unless, in the case of a foster care provider, a county or state case manager visits 
3.31 	the recipient as needed, but not less than every six months, to monitor the health and 
3.32 	safety of the recipient and to ensure the goals of the care plan are met. Notwithstanding 
3.33 	the provisions of section 256B.0659, the unpaid guardian or conservator of an adult, 
3.34 	who is not the responsible party and not the personal care provider organization, may be 
3.35 	reimbursed to provide personal care assistance services to the recipient if the guardian or 
4.1 	conservator meets all criteria for a personal care assistant according to section 256B.0659, 
4.2 	and shall not be considered to have a service provider interest for purposes of participation 
4.3 	on the screening team under section 256B.092, subdivision 7.

4.4 	Sec. 3. Minnesota Statutes 2010, section 256B.0652, subdivision 6, is amended to read:
4.5 		Subd. 6. Authorization; personal care assistance and qualified professional.
 4.6 	(a) All personal care assistance services, supervision by a qualified professional, and 
4.7 	additional services beyond the limits established in subdivision 11, must be authorized 
4.8 	by the commissioner or the commissioner's designee before services begin except for the 
4.9 	assessments established in subdivision 11 and section 256B.0911. The authorization for 
4.10 	personal care assistance and qualified professional services under section 256B.0659 must 
4.11 	be completed within 30 days after receiving a complete request.
4.12 	(b) The amount of personal care assistance services authorized must be based 
4.13 	on the recipient's home care rating. The home care rating shall be determined by the 
4.14 	commissioner or the commissioner's designee based on information submitted to the 
4.15 	commissioner identifying the following for recipients with dependencies in two or more 
4.16 	activities of daily living:
4.17 	(1) total number of dependencies of activities of daily living as defined in section 
4.18 	256B.0659;
4.19 	(2) presence of complex health-related needs as defined in section 256B.0659; and
4.20 	(3) presence of Level I behavior as defined in section 256B.0659.
4.21 	(c) For persons meeting the criteria in paragraph (b), the methodology to determine 
4.22 	total time for personal care assistance services for each home care rating is based on 
4.23 	the median paid units per day for each home care rating from fiscal year 2007 data for 
4.24 	the personal care assistance program. Each home care rating has a base level of hours 
4.25 	assigned. Additional time is added through the assessment and identification of the 
4.26 	following:
4.27 	(1) 30 additional minutes per day for a dependency in each critical activity of daily 
4.28 	living as defined in section 256B.0659;
4.29 	(2) 30 additional minutes per day for each complex health-related function as 
4.30 	defined in section 256B.0659; and
4.31 	(3) 30 additional minutes per day for each behavior issue as defined in section 
4.32 	256B.0659, subdivision 4, paragraph (d).
4.33 	(d) Effective July 1, 2011, the home care rating for recipients who have a dependency 
4.34 	in one activity of daily living or level one behavior shall equal no more than two units per 
5.1 	day. Recipients with this home care rating are not subject to the methodology in paragraph 
5.2 	(c), and are not eligible for more than two units per day.
5.3 	(e) A limit of 96 units of qualified professional supervision may be authorized for 
5.4 	each recipient receiving personal care assistance services. A request to the commissioner 
5.5 	to exceed this total in a calendar year must be requested by the personal care provider 
5.6 	agency on a form approved by the commissioner.

5.7 	Sec. 4. Minnesota Statutes 2010, section 256B.69, subdivision 5a, is amended to read:
5.8 		Subd. 5a.Managed care contracts. (a) Managed care contracts under this section 
5.9 	and section 256L.12 shall be entered into or renewed on a calendar year basis beginning 
5.10 	January 1, 1996. Managed care contracts which were in effect on June 30, 1995, and set to 
5.11 	renew on July 1, 1995, shall be renewed for the period July 1, 1995 through December 
5.12 	31, 1995 at the same terms that were in effect on June 30, 1995. The commissioner may 
5.13 	issue separate contracts with requirements specific to services to medical assistance 
5.14 	recipients age 65 and older.
5.15 	(b) A prepaid health plan providing covered health services for eligible persons 
5.16 	pursuant to chapters 256B and 256L is responsible for complying with the terms of its 
5.17 	contract with the commissioner. Requirements applicable to managed care programs 
5.18 	under chapters 256B and 256L established after the effective date of a contract with the 
5.19 	commissioner take effect when the contract is next issued or renewed.
5.20 	(c) Effective for services rendered on or after January 1, 2003, the commissioner 
5.21 	shall withhold five percent of managed care plan payments under this section and 
5.22 	county-based purchasing plan payments under section 256B.692 for the prepaid medical 
5.23 	assistance program pending completion of performance targets. Each performance target 
5.24 	must be quantifiable, objective, measurable, and reasonably attainable, except in the case 
5.25 	of a performance target based on a federal or state law or rule. Criteria for assessment 
5.26 	of each performance target must be outlined in writing prior to the contract effective 
5.27 	date. The managed care plan must demonstrate, to the commissioner's satisfaction, 
5.28 	that the data submitted regarding attainment of the performance target is accurate. The 
5.29 	commissioner shall periodically change the administrative measures used as performance 
5.30 	targets in order to improve plan performance across a broader range of administrative 
5.31 	services. The performance targets must include measurement of plan efforts to contain 
5.32 	spending on health care services and administrative activities. The commissioner may 
5.33 	adopt plan-specific performance targets that take into account factors affecting only one 
5.34 	plan, including characteristics of the plan's enrollee population. The withheld funds 
5.35 	must be returned no sooner than July of the following year if performance targets in the 
6.1 	contract are achieved. The commissioner may exclude special demonstration projects 
6.2 	under subdivision 23.
6.3 	(d) Effective for services rendered on or after January 1, 2009, through December 
6.4 	31, 2009, the commissioner shall withhold three percent of managed care plan payments 
6.5 	under this section and county-based purchasing plan payments under section 256B.692 
6.6 	for the prepaid medical assistance program. The withheld funds must be returned no 
6.7 	sooner than July 1 and no later than July 31 of the following year. The commissioner may 
6.8 	exclude special demonstration projects under subdivision 23.
6.9 	(e) Effective for services provided on or after January 1, 2010, the commissioner 
6.10 	shall require that managed care plans use the assessment and authorization processes, 
6.11 	forms, timelines, standards, documentation, and data reporting requirements, protocols, 
6.12 	billing processes, and policies consistent with medical assistance fee-for-service or the 
6.13 	Department of Human Services contract requirements consistent with medical assistance 
6.14 	fee-for-service or the Department of Human Services contract requirements for all 
6.15 	personal care assistance services under section 256B.0659.
6.16 	(f) Effective for services rendered on or after January 1, 2010, through December 
6.17 	31, 2010, the commissioner shall withhold 4.5 percent of managed care plan payments 
6.18 	under this section and county-based purchasing plan payments under section 256B.692 
6.19 	for the prepaid medical assistance program. The withheld funds must be returned no 
6.20 	sooner than July 1 and no later than July 31 of the following year. The commissioner may 
6.21 	exclude special demonstration projects under subdivision 23.
6.22 	(g) Effective for services rendered on or after January 1, 2011, through December 
6.23 	31, 2011, the commissioner shall include as part of the performance targets described 
6.24 	in paragraph (c) a reduction in the health plan's emergency room utilization rate for 
6.25 	state health care program enrollees by a measurable rate of five percent from the plan's 
6.26 	utilization rate for state health care program enrollees for the previous calendar year.
6.27 	Effective for services rendered on or after January 1, 2012, the commissioner shall 
6.28 	include as part of the performance targets described in paragraph (c) a reduction in the 
6.29 	health plan's emergency room utilization rate for state health care program enrollees by a 
6.30 	measurable rate of ten percent from the plan's utilization rate for state health care program 
6.31 	enrollees for the previous calendar year.
6.32 	The withheld funds must be returned no sooner than July 1 and no later than July 31 
6.33 	of the following calendar year if the managed care plan demonstrates to the satisfaction of 
6.34 	the commissioner that athis reduction in the utilization rate was achieved.
6.35 	The withhold described in this paragraph shall continue for each consecutive 
6.36 	contract period until the plan's emergency room utilization rate for state health care 
7.1 	program enrollees is reduced by 25 percent of the plan's emergency room utilization 
7.2 	rate for state health care program enrollees for calendar year 2009. Hospitals shall 
7.3 	cooperate with the health plans in meeting this performance target and shall accept 
7.4 	payment withholds that may be returned to the hospitals if the performance target is 
7.5 	achieved. The commissioner shall structure the withhold so that the commissioner returns 
7.6 	a portion of the withheld funds in amounts commensurate with achieved reductions in 
7.7 	utilization less than the targeted amount. The withhold in this paragraph does not apply to 
7.8 	county-based purchasing plans.
7.9 	(h) Effective for services rendered on or after January 1, 2012, the commissioner 
7.10 	shall include as part of the performance targets described in paragraph (c) a reduction in 
7.11 	the plan's hospitalization admission rate for hospitalizations for state health care program 
7.12 	enrollees by a measurable rate of five percent from the plan's utilization rate for state 
7.13 	health care program enrollees for the previous calendar year.
7.14 	The withheld funds must be returned no sooner than July 1 and no later than July 
7.15 	31 of the following calendar year if the managed care plan or county-based purchasing 
7.16 	plan demonstrates to the satisfaction of the commissioner that this reduction in the 
7.17 	hospitalization rate was achieved.
7.18 	The withhold described in this paragraph shall continue for three consecutive 
7.19 	contract periods. Hospitals shall cooperate with the plans in meeting this performance 
7.20 	target and shall accept payment withholds that may be returned to the hospitals if the 
7.21 	performance target is achieved.
7.22 	(h)(i) Effective for services rendered on or after January 1, 2011, through December 
7.23 	31, 2011, the commissioner shall withhold 4.5 percent of managed care plan payments 
7.24 	under this section and county-based purchasing plan payments under section 256B.692 
7.25 	for the prepaid medical assistance program. The withheld funds must be returned no 
7.26 	sooner than July 1 and no later than July 31 of the following year. The commissioner may 
7.27 	exclude special demonstration projects under subdivision 23.
7.28 	(i)(j) Effective for services rendered on or after January 1, 2012, through December 
7.29 	31, 2012, the commissioner shall withhold 4.5 percent of managed care plan payments 
7.30 	under this section and county-based purchasing plan payments under section 256B.692 
7.31 	for the prepaid medical assistance program. The withheld funds must be returned no 
7.32 	sooner than July 1 and no later than July 31 of the following year. The commissioner may 
7.33 	exclude special demonstration projects under subdivision 23.
7.34 	(j)(k) Effective for services rendered on or after January 1, 2013, through December 
7.35 	31, 2013, the commissioner shall withhold 4.5 percent of managed care plan payments 
7.36 	under this section and county-based purchasing plan payments under section 256B.692 
8.1 	for the prepaid medical assistance program. The withheld funds must be returned no 
8.2 	sooner than July 1 and no later than July 31 of the following year. The commissioner may 
8.3 	exclude special demonstration projects under subdivision 23.
8.4 	(k)(l) Effective for services rendered on or after January 1, 2014, the commissioner 
8.5 	shall withhold three percent of managed care plan payments under this section and 
8.6 	county-based purchasing plan payments under section 256B.692 for the prepaid medical 
8.7 	assistance program. The withheld funds must be returned no sooner than July 1 and 
8.8 	no later than July 31 of the following year. The commissioner may exclude special 
8.9 	demonstration projects under subdivision 23.
8.10 	(l)(m) A managed care plan or a county-based purchasing plan under section 
8.11 	256B.692 may include as admitted assets under section 62D.044 any amount withheld 
8.12 	under this section that is reasonably expected to be returned.
8.13 	(m)(n) Contracts between the commissioner and a prepaid health plan are exempt 
8.14 	from the set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph 
8.15 	(a), and 7.
8.16 	(n)(o) The return of the withhold under paragraphs (d), (f), and (h) to (k) is not 
8.17 	subject to the requirements of paragraph (c).

8.18 	Sec. 5. Minnesota Statutes 2010, section 256B.69, subdivision 5i, is amended to read:
8.19 		Subd. 5i.Administrative expenses. (a) Managed care plan and county-based 
8.20 	purchasing plan administrative costs for a prepaid health plan provided under this section 
8.21 	or section 256B.692 must not exceed by more than five percent that prepaid health plan's 
8.22 	or county-based purchasing plan's actual calculated administrative spending for the 
8.23 	previous calendar year as a percentage of total revenue. The penalty for exceeding this 
8.24 	limit must be the amount of administrative spending in excess of 105 percent of the actual 
8.25 	calculated amount. The commissioner may waive this penalty if the excess administrative 
8.26 	spending is the result of unexpected shifts in enrollment or member needs or new program 
8.27 	requirements.
8.28 	(b) Expenses listed under section 62D.12, subdivision 9a, clause (4), are not 
8.29 	allowable administrative expenses for rate-setting purposes under this section, unless 
8.30 	approved by the commissioner.
8.31 	(c) Notwithstanding paragraph (a), the portion of the per member per month 
8.32 	capitation rate paid under this section to managed care plans and county-based purchasing 
8.33 	plans for administrative expenditures shall be reduced by 21 cents beginning July 1, 2011.

8.34 	Sec. 6. Minnesota Statutes 2010, section 256B.69, subdivision 28, is amended to read:
9.1 		Subd. 28.Medicare special needs plans; medical assistance basic health care.
 9.2 	(a) The commissioner may contract with qualified Medicare-approved special needs 
9.3 	plans to provide medical assistance basic health care services to persons with disabilities, 
9.4 	including those with developmental disabilities. Basic health care services include:
9.5 	(1) those services covered by the medical assistance state plan except for ICF/MR 
9.6 	services, home and community-based waiver services, case management for persons with 
9.7 	developmental disabilities under section 256B.0625, subdivision 20a, and personal care 
9.8 	and certain home care services defined by the commissioner in consultation with the 
9.9 	stakeholder group established under paragraph (d); and
9.10 	(2) basic health care services may also include risk for up to 100 days of nursing 
9.11 	facility services for persons who reside in a noninstitutional setting and home health 
9.12 	services related to rehabilitation as defined by the commissioner after consultation with 
9.13 	the stakeholder group.
9.14 	The commissioner may exclude other medical assistance services from the basic 
9.15 	health care benefit set. Enrollees in these plans can access any excluded services on the 
9.16 	same basis as other medical assistance recipients who have not enrolled.
9.17 	Unless a person is otherwise required to enroll in managed care, enrollment in these 
9.18 	plans for Medicaid services must be voluntary. For purposes of this subdivision, automatic 
9.19 	enrollment with an option to opt out is not voluntary enrollment.
9.20 	(b) Beginning January 1, 2007, the commissioner may contract with qualified 
9.21 	Medicare special needs plans to provide basic health care services under medical 
9.22 	assistance to persons who are dually eligible for both Medicare and Medicaid and those 
9.23 	Social Security beneficiaries eligible for Medicaid but in the waiting period for Medicare. 
9.24 	The commissioner shall consult with the stakeholder group under paragraph (d) in 
9.25 	developing program specifications for these services. The commissioner shall report to 
9.26 	the chairs of the house of representatives and senate committees with jurisdiction over 
9.27 	health and human services policy and finance by February 1, 2007, on implementation 
9.28 	of these programs and the need for increased funding for the ombudsman for managed 
9.29 	care and other consumer assistance and protections needed due to enrollment in managed 
9.30 	care of persons with disabilities. Payment for Medicaid services provided under this 
9.31 	subdivision for the months of May and June will be made no earlier than July 1 of the 
9.32 	same calendar year.
9.33 	(c) Notwithstanding subdivision 4, beginning January 1, 2008 2012, the 
9.34 	commissioner may expand contracting under this subdivision to allshall enroll persons 
9.35 	with disabilities not otherwise required to enroll in managed care under this section, 
9.36 	unless the individual chooses to opt-out of enrollment. The commissioner shall establish 
10.1 	enrollment and opt out procedures consistent with applicable enrollment procedures under 
10.2 	this subdivision.
10.3 	(d) The commissioner shall establish a state-level stakeholder group to provide 
10.4 	advice on managed care programs for persons with disabilities, including both MnDHO 
10.5 	and contracts with special needs plans that provide basic health care services as described 
10.6 	in paragraphs (a) and (b). The stakeholder group shall provide advice on program 
10.7 	expansions under this subdivision and subdivision 23, including:
10.8 	(1) implementation efforts;
10.9 	(2) consumer protections; and
10.10 	(3) program specifications such as quality assurance measures, data collection and 
10.11 	reporting, and evaluation of costs, quality, and results.
10.12 	(e) Each plan under contract to provide medical assistance basic health care services 
10.13 	shall establish a local or regional stakeholder group, including representatives of the 
10.14 	counties covered by the plan, members, consumer advocates, and providers, for advice on 
10.15 	issues that arise in the local or regional area.
10.16 	(f) The commissioner is prohibited from providing the names of potential enrollees 
10.17 	to health plans for marketing purposes. The commissioner may mail marketing materials 
10.18 	to potential enrollees on behalf of health plans, in which case the health plans shall cover 
10.19 	any costs incurred by the commissioner for mailing marketing materials.

10.20 	Sec. 7. Minnesota Statutes 2010, section 256L.12, subdivision 9, is amended to read:
10.21 		Subd. 9.Rate setting; performance withholds. (a) Rates will be prospective, 
10.22 	per capita, where possible. The commissioner may allow health plans to arrange for 
10.23 	inpatient hospital services on a risk or nonrisk basis. The commissioner shall consult with 
10.24 	an independent actuary to determine appropriate rates.
10.25 	(b) For services rendered on or after January 1, 2004, the commissioner shall 
10.26 	withhold five percent of managed care plan payments and county-based purchasing 
10.27 	plan payments under this section pending completion of performance targets. Each 
10.28 	performance target must be quantifiable, objective, measurable, and reasonably attainable, 
10.29 	except in the case of a performance target based on a federal or state law or rule. Criteria 
10.30 	for assessment of each performance target must be outlined in writing prior to the 
10.31 	contract effective date. The managed care plan must demonstrate, to the commissioner's 
10.32 	satisfaction, that the data submitted regarding attainment of the performance target is 
10.33 	accurate. The commissioner shall periodically change the administrative measures used 
10.34 	as performance targets in order to improve plan performance across a broader range of 
10.35 	administrative services. The performance targets must include measurement of plan 
11.1 	efforts to contain spending on health care services and administrative activities. The 
11.2 	commissioner may adopt plan-specific performance targets that take into account factors 
11.3 	affecting only one plan, such as characteristics of the plan's enrollee population. The 
11.4 	withheld funds must be returned no sooner than July 1 and no later than July 31 of the 
11.5 	following calendar year if performance targets in the contract are achieved.
11.6 	(c) For services rendered on or after January 1, 2011, the commissioner shall 
11.7 	withhold an additional three percent of managed care plan or county-based purchasing 
11.8 	plan payments under this section. The withheld funds must be returned no sooner than 
11.9 	July 1 and no later than July 31 of the following calendar year. The return of the withhold 
11.10 	under this paragraph is not subject to the requirements of paragraph (b).
11.11 	(d) Effective for services rendered on or after January 1, 2011, through December 
11.12 	31, 2011, the commissioner shall include as part of the performance targets described in 
11.13 	paragraph (b) a reduction in the plan's emergency room utilization rate for state health 
11.14 	care program enrollees by a measurable rate of five percent from the plan's utilization 
11.15 	rate for the previous calendar year. Effective for services rendered on or after January 
11.16 	1, 2012, the commissioner shall include as part of the performance targets described in 
11.17 	paragraph (b) a reduction in the plan's emergency room utilization rate for state health 
11.18 	care program enrollees by a measurable rate of ten percent from the plan's utilization 
11.19 	rate for the previous calendar year.
11.20 	The withheld funds must be returned no sooner than July 1 and no later than July 31 
11.21 	of the following calendar year if the managed care plan demonstrates to the satisfaction of 
11.22 	the commissioner that athis reduction in the utilization rate was achieved.
11.23 	The withhold described in this paragraph shall continue for each consecutive 
11.24 	contract period until the plan's emergency room utilization rate for state health care 
11.25 	program enrollees is reduced by 25 percent of the plan's emergency room utilization rate 
11.26 	for state health care program enrollees for calendar year 2009. Hospitals shall cooperate 
11.27 	with the health plans in meeting this performance target and shall accept payment 
11.28 	withholds that may be returned to the hospitals if the performance target is achieved. 
11.29 	The commissioner shall structure the withhold so that the commissioner returns a portion 
11.30 	of the withheld funds in amounts commensurate with achieved reductions in utilization 
11.31 	less than the targeted amount. The withhold described in this paragraph does not apply to 
11.32 	county-based purchasing plans.
11.33 	(e) Effective for services rendered on or after January 1, 2012, the commissioner 
11.34 	shall include as part of the performance targets described in paragraph (b) a reduction 
11.35 	in the plan's hospitalization admission rate for state health care program enrollees by 
12.1 	a measurable rate of five percent from the plan's hospitalization rate for the previous 
12.2 	calendar year.
12.3 	The withheld funds must be returned no sooner than July 1 and no later than July 
12.4 	31 of the following calendar year if the managed care plan or county-based purchasing 
12.5 	plan demonstrates to the satisfaction of the commissioner that this reduction in the 
12.6 	hospitalization rate was achieved.
12.7 	The withhold described in this paragraph shall continue for three consecutive 
12.8 	contract periods. Hospitals shall cooperate with the plans in meeting this performance 
12.9 	target and shall accept payment withholds that may be returned to the hospitals if the 
12.10 	performance target is achieved.
12.11 	(e)(f) A managed care plan or a county-based purchasing plan under section 
12.12 	256B.692 may include as admitted assets under section 62D.044 any amount withheld 
12.13 	under this section that is reasonably expected to be returned.

12.14 	Sec. 8. Laws 2009, chapter 79, article 13, section 3, subdivision 8, as amended by 
12.15 	Laws 2009, chapter 173, article 2, section 1, subdivision 8, Laws 2010, First Special 
12.16 	Session chapter 1, article 15, section 5, and Laws 2010, First Special Session chapter 1, 
12.17 	article 25, section 16, is amended to read:

12.18	Subd. 8.Continuing Care Grants
 					
12.19 	The amounts that may be spent from the 
12.20 	appropriation for each purpose are as follows:

12.21	(a) Aging and Adult Services Grants
		13,499,000
		15,805,000
	
12.22 	Base Adjustment. The general fund base is 
12.23 	increased by $5,751,000 in fiscal year 2012 
12.24 	and $6,705,000 in fiscal year 2013.
12.25 	Information and Assistance 
12.26 	Reimbursement. Federal administrative 
12.27 	reimbursement obtained from information 
12.28 	and assistance services provided by the 
12.29 	Senior LinkAge or Disability Linkage lines 
12.30 	to people who are identified as eligible for 
12.31 	medical assistance shall be appropriated to 
12.32 	the commissioner for this activity.
12.33 	Community Service Development Grant 
12.34 	Reduction. Funding for community service 
13.1 	development grants must be reduced by 
13.2 	$260,000 for fiscal year 2010; $284,000 in 
13.3 	fiscal year 2011; $43,000 in fiscal year 2012; 
13.4 	and $43,000 in fiscal year 2013. Base level 
13.5 	funding shall be restored in fiscal year 2014.
13.6 	Community Service Development Grant 
13.7 	Community Initiative. Funding for 
13.8 	community service development grants shall 
13.9 	be used to offset the cost of aging support 
13.10 	grants. Base level funding shall be restored 
13.11 	in fiscal year 2014.
13.12 	Senior Nutrition Use of Federal Funds.
13.13 	For fiscal year 2010, general fund grants 
13.14 	for home-delivered meals and congregate 
13.15 	dining shall be reduced by $500,000. The 
13.16 	commissioner must replace these general 
13.17 	fund reductions with equal amounts from 
13.18 	federal funding for senior nutrition from the 
13.19 	American Recovery and Reinvestment Act 
13.20 	of 2009.

13.21	(b) Alternative Care Grants
		50,234,000
		48,576,000
	
13.22 	Base Adjustment. The general fund base is 
13.23 	decreased by $3,598,000 in fiscal year 2012 
13.24 	and $3,470,000 in fiscal year 2013.
13.25 	Alternative Care Transfer. Any money 
13.26 	allocated to the alternative care program that 
13.27 	is not spent for the purposes indicated does 
13.28 	not cancel but must be transferred to the 
13.29 	medical assistance account.

13.30
13.31	(c) Medical Assistance Grants; Long-Term 
Care Facilities.
		367,444,000
		419,749,000

13.32
13.33	(d) Medical Assistance Long-Term Care 
Waivers and Home Care Grants
		853,567,000
		1,039,517,000
	
13.34 	Manage Growth in TBI and CADI 
13.35 	Waivers. During the fiscal years beginning 
14.1 	on July 1, 2009, and July 1, 2010, the 
14.2 	commissioner shall allocate money for home 
14.3 	and community-based waiver programs 
14.4 	under Minnesota Statutes, section 256B.49, 
14.5 	to ensure a reduction in state spending that is 
14.6 	equivalent to limiting the caseload growth of 
14.7 	the TBI waiver to 12.5 allocations per month 
14.8 	each year of the biennium and the CADI 
14.9 	waiver to 95 allocations per month each year 
14.10 	of the biennium. Limits do not apply: (1) 
14.11 	when there is an approved plan for nursing 
14.12 	facility bed closures for individuals under 
14.13 	age 65 who require relocation due to the 
14.14 	bed closure; (2) to fiscal year 2009 waiver 
14.15 	allocations delayed due to unallotment; or (3) 
14.16 	to transfers authorized by the commissioner 
14.17 	from the personal care assistance program 
14.18 	of individuals having a home care rating 
14.19 	of "CS," "MT," or "HL." Priorities for the 
14.20 	allocation of funds must be for individuals 
14.21 	anticipated to be discharged from institutional 
14.22 	settings or who are at imminent risk of a 
14.23 	placement in an institutional setting.
14.24 	Manage Growth in DD Waiver. The 
14.25 	commissioner shall manage the growth in 
14.26 	the DD waiver by limiting the allocations 
14.27 	included in the February 2009 forecast to 15 
14.28 	additional diversion allocations each month 
14.29 	for the calendar years that begin on January 
14.30 	1, 2010, and January 1, 2011. Additional 
14.31 	allocations must be made available for 
14.32 	transfers authorized by the commissioner 
14.33 	from the personal care program of individuals 
14.34 	having a home care rating of "CS," "MT," 
14.35 	or "HL."
15.1 	Adjustment to Lead Agency Waiver 
15.2 	Allocations. Prior to the availability of the 
15.3 	alternative license defined in Minnesota 
15.4 	Statutes, section 245A.11, subdivision 8, 
15.5 	the commissioner shall reduce lead agency 
15.6 	waiver allocations for the purposes of 
15.7 	implementing a moratorium on corporate 
15.8 	foster care.
15.9 	Alternatives to Personal Care Assistance 
15.10 	Services. Base level funding of $3,237,000 
15.11 	in fiscal year 2012 and $4,856,000 in 
15.12 	fiscal year 2013 is to implement alternative 
15.13 	services to personal care assistance services 
15.14 	for persons with mental health and other 
15.15 	behavioral challenges who can benefit 
15.16 	from other services that more appropriately 
15.17 	meet their needs and assist them in living 
15.18 	independently in the community. These 
15.19 	services may include, but not be limited to, a 
15.20 	1915(i) state plan option.

15.21	(e) Mental Health Grants

15.22	Appropriations by Fund
	
15.23	General
	77,739,000
	77,739,000
	
15.24	Health Care Access
	750,000
	750,000
	
15.25	Lottery Prize
	1,508,000
	1,508,000
	
15.26 	Funding Usage. Up to 75 percent of a fiscal 
15.27 	year's appropriation for adult mental health 
15.28 	grants may be used to fund allocations in that 
15.29 	portion of the fiscal year ending December 
15.30 	31.

15.31	(f) Deaf and Hard-of-Hearing Grants
		1,930,000
		1,917,000

15.32	(g) Chemical Dependency Entitlement Grants
		111,303,000
		122,822,000
	
15.33 	Payments for Substance Abuse Treatment.
15.34 	For placements beginning during fiscal years 
15.35 	2010 and 2011, county-negotiated rates and 
16.1 	provider claims to the consolidated chemical 
16.2 	dependency fund must not exceed the lesser 
16.3 	of:
16.4 	(1) rates charged for these services on 
16.5 	January 1, 2009; and or
16.6 	(2) 160 percent of the average rate on January 
16.7 	1, 2009, for each group of vendors with 
16.8 	similar attributes.
16.9 	Rates for fiscal years 2010 and 2011 must 
16.10 	not exceed 160 percent of the average rate on 
16.11 	January 1, 2009, for each group of vendors 
16.12 	with similar attributes.
16.13 	Effective July 1, 2010, rates that were above 
16.14 	the average rate on January 1, 2009, are 
16.15 	reduced by five percent from the rates in 
16.16 	effect on June 1, 2010. Rates below the 
16.17 	average rate on January 1, 2009, are reduced 
16.18 	by 1.8 percent from the rates in effect on 
16.19 	June 1, 2010. Services provided under 
16.20 	this section by state-operated services are 
16.21 	exempt from the rate reduction. For services 
16.22 	provided in fiscal years 2012 and 2013, the 
16.23 	statewide aggregate payment under the new 
16.24 	rate methodology to be developed under 
16.25 	Minnesota Statutes, section 254B.12, must 
16.26 	not exceed the projected aggregate payment 
16.27 	under the rates in effect for fiscal year 2011 
16.28 	excluding the rate reduction for rates that 
16.29 	were below the average on January 1, 2009, 
16.30 	plus a state share increase of $3,787,000 for 
16.31 	fiscal year 2012 and $5,023,000 for fiscal 
16.32 	year 2013. Notwithstanding any provision 
16.33 	to the contrary in this article, this provision 
16.34 	expires on June 30, 2013.
17.1 	Chemical Dependency Special Revenue 
17.2 	Account. For fiscal year 2010, $750,000 
17.3 	must be transferred from the consolidated 
17.4 	chemical dependency treatment fund 
17.5 	administrative account and deposited into the 
17.6 	general fund.
17.7 	County CD Share of MA Costs for 
17.8 	ARRA Compliance. Notwithstanding the 
17.9 	provisions of Minnesota Statutes, chapter 
17.10 	254B, for chemical dependency services 
17.11 	provided during the period October 1, 2008, 
17.12 	to December 31, 2010, and reimbursed by 
17.13 	medical assistance at the enhanced federal 
17.14 	matching rate provided under the American 
17.15 	Recovery and Reinvestment Act of 2009, the 
17.16 	county share is 30 percent of the nonfederal 
17.17 	share. This provision is effective the day 
17.18 	following final enactment.

17.19
17.20	(h) Chemical Dependency Nonentitlement 
Grants
		1,729,000
		1,729,000

17.21	(i) Other Continuing Care Grants
		19,201,000
		17,528,000
	
17.22 	Base Adjustment. The general fund base is 
17.23 	increased by $2,639,000 in fiscal year 2012 
17.24 	and increased by $3,854,000 in fiscal year 
17.25 	2013.
17.26 	Technology Grants. $650,000 in fiscal 
17.27 	year 2010 and $1,000,000 in fiscal year 
17.28 	2011 are for technology grants, case 
17.29 	consultation, evaluation, and consumer 
17.30 	information grants related to developing and 
17.31 	supporting alternatives to shift-staff foster 
17.32 	care residential service models.
17.33 	Other Continuing Care Grants; HIV 
17.34 	Grants. Money appropriated for the HIV 
17.35 	drug and insurance grant program in fiscal 
18.1 	year 2010 may be used in either year of the 
18.2 	biennium.
18.3 	Quality Assurance Commission. Effective 
18.4 	July 1, 2009, state funding for the quality 
18.5 	assurance commission under Minnesota 
18.6 	Statutes, section 256B.0951, is canceled.

18.7 	Sec. 9. CAPITATION PAYMENT DELAY.
 18.8 	(a) The commissioner of human services shall delay the MinnesotaCare capitation 
18.9 	payment due in May of 2013 to managed care plans for single adults without children 
18.10 	eligible under Minnesota Statutes, section 256L.04, subdivision 7, until July of 2013.
18.11 	(b) The commissioner of human services shall delay payments due in April of 2013 
18.12 	for medical assistance services provided under Minnesota Statutes, section 256B.69, 
18.13 	subdivision 28, until after July 1, 2013.

18.14 	Sec. 10. HEALTH CARE DELIVERY SYSTEMS DEMONSTRATION 
18.15 	PROJECT.
 18.16 		Subdivision 1.Implementation. (a) The commissioner shall develop and authorize 
18.17 	a demonstration project to test alternative and innovative health care delivery systems, 
18.18 	including accountable care organizations that provide services to a specified patient 
18.19 	population for an agreed-upon total cost of care payment arrangement in accordance with 
18.20 	subdivision 4. The commissioner shall develop one request for proposals to provide 
18.21 	services to the elderly population eligible for medical assistance, and one request for 
18.22 	proposals to provide services to families and children eligible for medical assistance 
18.23 	and the MinnesotaCare program.
18.24 	(b) In developing the request for proposals, the commissioner shall:
18.25 	(1) establish uniform statewide methods of forecasting utilization and cost of care 
18.26 	for the specified populations, to be used by the commissioner for the health care delivery 
18.27 	system projects;
18.28 	(2) identify key indicators of quality, access, patient satisfaction, and other 
18.29 	performance indicators that will be measured, in addition to indicators for measuring 
18.30 	cost savings;
18.31 	(3) allow maximum flexibility to encourage innovation and variation so that a variety 
18.32 	of provider collaborations are able to become health care delivery systems; and
18.33 	(4) establish quality standards for the delivery system demonstrations.
19.1 	(c) To be eligible to participate in the demonstration project, a health care delivery 
19.2 	system must:
19.3 	(1) provide required covered services and care coordination to recipients enrolled in 
19.4 	the demonstration project;
19.5 	(2) establish a process to ensure the quality of care provided;
19.6 	(3) in cooperation with counties and community social service agencies, coordinate 
19.7 	the delivery of health care services with existing social services programs;
19.8 	(4) provide a system for advocacy and consumer protection; and
19.9 	(5) adopt innovative and cost-effective methods of care delivery and coordination, 
19.10 	which may include the use of allied health professionals, telemedicine, patient educators, 
19.11 	care coordinators, and community health workers.
19.12 	(d) A health care delivery system demonstration may be formed by the following 
19.13 	groups of providers of services and suppliers if they have established a mechanism for 
19.14 	shared governance:
19.15 	(1) professionals in group practice arrangements;
19.16 	(2) networks of individual practices of professionals;
19.17 	(3) partnerships or joint venture arrangements between hospitals and health care 
19.18 	professionals;
19.19 	(4) hospitals employing professionals; and
19.20 	(5) other groups of providers of services and suppliers as the commissioner 
19.21 	determines appropriate.
19.22 	A managed care plan or county-based purchasing plan may participate in this 
19.23 	demonstration in collaboration with one or more of the entities listed in clauses (1) to (5).
19.24 	A health care delivery system may contract with a managed care plan or a 
19.25 	county-based purchasing plan to provide administrative services, including the 
19.26 	administration of a payment system using the payment methods approved by the 
19.27 	commissioner for health care delivery systems.
19.28 	(e) The commissioner may require a health care delivery system to enter into 
19.29 	additional third-party contractual relationships for the assessment of risk and purchase of 
19.30 	stop loss insurance or another form of insurance risk management related to the delivery 
19.31 	of care described in paragraph (c).
19.32 		Subd. 2.Enrollment. (a) The commissioner shall develop and authorize at least 
19.33 	two demonstration projects: one for families and children eligible for medical assistance 
19.34 	and MinnesotaCare; and one for individuals 65 years of age or older eligible for medical 
19.35 	assistance.
20.1 	(b) Eligible applicants and recipients shall enroll in a health care delivery system 
20.2 	if a system serves the county in which the applicant or recipient resides. If more than 
20.3 	one health care delivery system serves a county, the applicant or recipient may choose 
20.4 	among the delivery systems. The commissioner shall assign an applicant or recipient to a 
20.5 	health care delivery system if a health care delivery system is available and no choice has 
20.6 	been made by the applicant or recipient.
20.7 		Subd. 3.Accountability. (a) Health care delivery systems must accept responsibility 
20.8 	for the quality of care based on standards established under subdivision 1, paragraph (b), 
20.9 	clause (4), and the cost of care or utilization of services provided to its enrollees under 
20.10 	subdivision 1, paragraph (b), clause (1).
20.11 	(b) A health care delivery system may contract and coordinate with providers and 
20.12 	clinics for the delivery of services and shall contract with community health clinics, 
20.13 	federally qualified health centers, community mental health centers or programs, and rural 
20.14 	clinics to the extent practicable.
20.15 		Subd. 4.Payment system. (a) In developing a payment system for health care 
20.16 	delivery systems, the commissioner shall establish a total cost of care benchmark to be 
20.17 	paid for services provided to the recipients enrolled in a health care delivery system.
20.18 	(b) The total cost of care payment system shall not exceed the payments made 
20.19 	in fiscal year 2011 by the commissioner under fee-for-service or managed care for the 
20.20 	delivery of services to the specified populations within the geographic area served by the 
20.21 	health care delivery system minus five percent.
20.22 	(c) The payment system developed under this section shall incorporate the withhold 
20.23 	and performance target requirements in Minnesota Statutes, section 256B.69, subdivision 
20.24 	5a.

20.25 	Sec. 11. MANAGE GROWTH IN TRAUMATIC BRAIN INJURY AND 
20.26 	COMMUNITY ALTERNATIVES FOR DISABLED INDIVIDUALS WAIVERS.
 20.27 	During the fiscal years beginning July 1, 2011, and July 1, 2012, the commissioner 
20.28 	shall allocate money for home and community-based waiver programs under Minnesota 
20.29 	Statutes, section 256B.49, to ensure a reduction in state spending that is equivalent to 
20.30 	limiting the caseload growth of the traumatic brain injury waiver to six allocations per 
20.31 	month each year of the biennium and the community alternatives for disabled individuals 
20.32 	waiver to 60 allocations per month. The limits do not apply:
20.33 	(1) when there is an approved plan for nursing facility bed closures for individuals 
20.34 	under age 65 who require relocation due to the bed closure;
20.35 	(2) to fiscal year 2009 waiver allocations delayed due to unallotment; or
21.1 	(3) to transfers authorized by the commissioner from the personal care assistance 
21.2 	program of individuals having a home care rating of CS, MT, or HL. Priorities for the 
21.3 	allocation of funds must be for individuals anticipated to be discharged from institutional 
21.4 	settings or who are at imminent risk of a placement in an institutional setting.

21.5 	Sec. 12. MANAGE GROWTH IN DEVELOPMENTAL DISABILITY (DD) 
21.6 	WAIVER.
 21.7 	The commissioner shall manage the growth in the developmental disability waiver 
21.8 	by limiting the allocations included in the November 2010 forecast to six additional 
21.9 	diversion allocations each month for the fiscal year that begins on July 1, 2011. Additional 
21.10 	allocations must be made available for transfers authorized by the commissioner from the 
21.11 	personal care assistance program of individuals having a home care rating of CS, MT, 
21.12 	or HL. This provision is effective through June 30, 2013.

21.13 	Sec. 13. REQUEST FOR PROPOSALS; CLAIMS PROCESSING FOR 
21.14 	FEE-FOR-SERVICE MEDICAL ASSISTANCE.
 21.15 	(a) The commissioner of human services shall issue a request for proposal for a 
21.16 	contract to provide claims processing services for the fee-for-service medical assistance 
21.17 	program, excluding outpatient pharmacy services. The contractor must be able to:
21.18 	(1) process provider claims in a timely manner and within state and federal 
21.19 	requirements;
21.20 	(2) provide electronic claims submission access for providers;
21.21 	(3) validate claims data;
21.22 	(4) file and reconcile claims;
21.23 	(5) identify fraud and abuse;
21.24 	(6) measure quality assurance and performance outcomes; and
21.25 	(7) coordinate benefits on the front end of a claim.
21.26 	(b) The commissioner shall enter into a contract for claims processing by January 1, 
21.27 	2012. Payment under the contract shall not exceed $1.75 on average per claim processed.
21.28 	(c) The commissioner shall apply for any federal grants that may be available.

21.29 	EFFECTIVE DATE. This section is effective the day following final enactment.