1.1 	A bill for an act
1.2 	relating to health care; creating a separate chapter for county-based purchasing 
1.3 	plans operating under Minnesota Statutes, section 256B.692;amending Minnesota 
1.4 	Statutes 2016, sections 62A.045; 62M.06, subdivision 1; 62Q.80, subdivision 2; 
1.5 	62U.01, subdivision 8; 125A.023, subdivision 3; 245.4682, subdivision 3; 246.50, 
1.6 	subdivision 11; 253B.045, subdivision 5; 256.015, subdivision 1; 256B.042, 
1.7 	subdivision 1; 256B.056, subdivision 6; 256B.0625, subdivision 9; 256B.0631, 
1.8 	subdivision 1; 256B.37, subdivision 2; 256B.69, subdivisions 2, 3a, 5a, 5i, 6b, 9a, 
1.9 	9c, 9d, 26; 256B.694; 256B.756, subdivision 3; 256B.77, subdivision 3; 256L.01, 
1.10 	subdivision 7; 256L.12, subdivision 9; 256L.121, subdivision 3; Minnesota Statutes 
1.11 	2017 Supplement, sections 3.972, subdivision 2b; 256B.6925, subdivision 4; 
1.12 	256B.76, subdivisions 1, 2; 256B.761; proposing coding for new law as Minnesota 
1.13 	Statutes, chapter 62W; repealing Minnesota Statutes 2016, section 256B.692, 
1.14 	subdivisions 1, 2, 3, 4, 4a, 5, 7, 8, 9; Minnesota Statutes 2017 Supplement, section 
1.15 	256B.692, subdivision 6.
1.16 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.17 	ARTICLE 1
1.18 	COUNTY-BASED PURCHASING

1.19 	Section 1. [62W.01] CITATION AND PURPOSE.
1.20 		Subdivision 1.Citation. This chapter may be cited as "county-based purchasing."
1.21 		Subd. 2.Purpose. County-based purchasing is a model uniquely designed to serve rural 
1.22 	areas by providing health care services, behavioral health services, public health services, 
1.23 	social services, and other community-based services through local coordination, collaboration, 
1.24 	and integration.  County-based purchasing is an effective model to provide:
1.25 	(1) local accountability and transparency in health care financing within a budget;
1.26 	(2) long-term continuity in delivering and receiving health care coverage through federal 
1.27 	and state public health care programs;
2.1 	(3) local innovation in the design, practice, and evaluation of new health care initiatives 
2.2 	to specifically address unique local  health care needs involving access, quality, efficiency, 
2.3 	and service delivery while providing value-based accountable care consistent with state and 
2.4 	federal health care reform objectives; and
2.5 	(4) development and maintenance of rural health care infrastructure.

2.6 	Sec. 2. [62W.02] DEFINITIONS.
2.7 		Subdivision 1.Applicability. For purposes of this chapter, the following terms have the 
2.8 	meanings given them.
2.9 		Subd. 2.Commissioner. "Commissioner" means the commissioner of health or the 
2.10 	commissioner's designee.
2.11 		Subd. 3.County-based purchasing organization. "County-based purchasing 
2.12 	organization" means a rural county or group of rural counties that has elected to operate a 
2.13 	county-based purchasing plan in accordance with this chapter. If only one county is involved, 
2.14 	the county board of commissioners shall be the governing body of the county-based 
2.15 	purchasing organization. If a multicounty arrangement is involved, the governing body of 
2.16 	the county-based purchasing organization shall be a joint powers board established under 
2.17 	section 471.59.
2.18 		Subd. 4.County-based purchasing plan. "County-based purchasing plan" means a 
2.19 	plan offered by the county-based purchasing organization whereby the organization agrees 
2.20 	to purchase or provide health care services, behavioral health services, public health services, 
2.21 	county social services, community support services, and other community-based services 
2.22 	and resources to address the wellness, health care, and social needs of enrollees as set forth 
2.23 	under the plan and in accordance with this chapter.
2.24 		Subd. 5.Enrollee. "Enrollee" means an individual who resides within the service area 
2.25 	served by the county-based purchasing organization and who is enrolled in the county-based 
2.26 	purchasing plan.
2.27 		Subd. 6.Rural. "Rural" means any county designated as micro, rural, or a county with 
2.28 	extreme access considerations (CEAC) under the Medicare Advantage health care delivery 
2.29 	reference table for the most recent reporting period.
2.30 		Subd. 7.Service area. "Service area" means the geographic area served by the 
2.31 	county-based purchasing organization.

3.1 	Sec. 3. [62W.03] COUNTY-BASED PURCHASING ORGANIZATIONS.
3.2 		Subdivision 1.Certificate of authority. A county board or group of county boards must 
3.3 	apply to the commissioner of health for a certificate of authority to operate a county-based 
3.4 	purchasing organization in compliance with this chapter.
3.5 		Subd. 2.Local planning process. A county board or joint powers board that intends to 
3.6 	submit an application under this section must establish a local planning process to advise 
3.7 	the county or counties on the development of the application and its proposed implementation. 
3.8 	The planning process must include input from potential enrollees, consumer advocates, 
3.9 	local providers, and representatives of the local school district, labor force, and tribal 
3.10 	governments.
3.11 		Subd. 3.Application review. (a) Upon receipt of an application for a certificate of 
3.12 	authority, the commissioner shall determine whether the applicant for the certificate of 
3.13 	authority has substantially demonstrated the applicant's ability to meet the requirements of 
3.14 	this chapter.
3.15 	(b) In reviewing the application, approval shall not be unreasonably withheld and the 
3.16 	commissioner shall take into account the purpose and functions of county-based purchasing 
3.17 	organizations as stated in this chapter. The commissioner may consult with the commissioner 
3.18 	of human services if the county-based purchasing organization intends to provide or purchase 
3.19 	health care services under medical assistance or MinnesotaCare.
3.20 		Subd. 4.Certificate of authority requirements. (a) Before issuing a certificate of 
3.21 	authority, the county-based purchasing organization must demonstrate to the commissioner 
3.22 	the ability to follow and agree to:
3.23 	(1) authorize and arrange for the provision of all needed health services to ensure all 
3.24 	appropriate health care is delivered to enrollees;
3.25 	(2) ensure that all covered health services are accessible to all enrollees and that enrollees 
3.26 	have a reasonable choice of providers to the extent possible. If the county is also a health 
3.27 	care provider, the county-based purchasing organization must develop a process to ensure 
3.28 	that providers employed by the county are not the sole referral source and are not the sole 
3.29 	provider of health care services if other providers that meet the same quality and cost 
3.30 	requirements are available;
3.31 	(3) meet the fiscal solvency requirements schedule in subdivision 5;
3.32 	(4) comply with the provisions in sections 62J.48, 62J.71 to 62J.73, 62M.01 to 62M.16, 
3.33 	and all applicable provisions of chapter 62Q, including sections 62Q.075, 62Q.1055, 
4.1 	62Q.106, 62Q.12, 62Q.135, 62Q.14, 62Q.145, 62Q.19, 62Q.23, paragraph (c), 62Q.43, 
4.2 	62Q.47, 62Q.50, 62Q.52 to 62Q.56, 62Q.58, and 62Q.68 to 62Q.72;
4.3 	(5) issue payments to participating providers or vendors in a timely manner and comply 
4.4 	with the standards for claim settlement under section 72A.201, subdivisions 4, 5, 7, and 8;
4.5 	(6) establish consumer protection and provider protection requirements that are applicable 
4.6 	to health maintenance organizations under chapter 62D;
4.7 	(7) provide a system for advocacy, enrollee grievance procedures, and complaints and 
4.8 	appeals that is independent of providers or other risk bearers; and
4.9 	(8) provide appropriate quality and other required data in a format required by the 
4.10 	commissioner.
4.11 	(b) The commissioner, in consultation with the county board or joint powers board, shall 
4.12 	develop administrative and financial reporting requirements for the county-based purchasing 
4.13 	organization relating to sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.29, and 62N.31 
4.14 	and other sections that are specific to county administrative, accounting, and reporting 
4.15 	systems and that are consistent with other statutory requirements for counties.
4.16 		Subd. 5.Fiscal solvency. (a) A county-based purchasing organization must have on 
4.17 	reserve:
4.18 	(1) at least 50 percent of the minimum amount required under chapter 62D at the time 
4.19 	the organization begins operation;
4.20 	(2) at least 75 percent of the minimum amount required under chapter 62D after the first 
4.21 	full calendar year of operation;
4.22 	(3) at least 87.5 percent of the minimum amount required under chapter 62D after the 
4.23 	second full calendar year of operation; and
4.24 	(4) at least 100 percent of the minimum amount required under chapter 62D after the 
4.25 	third full calendar year of operation.
4.26 	(b) Until the county-based purchasing organization is required to have reserves that 
4.27 	equal at least 100 percent of the minimum amount required under chapter 62D, the 
4.28 	organization may demonstrate its ability to cover any losses by satisfying the requirements 
4.29 	of chapter 62N.
4.30 		Subd. 6.Issuance; notice. (a) Within 90 days after the receipt of the application for 
4.31 	certificate of authority, the commissioner of health shall determine whether or not the 
4.32 	application meets the requirements of this chapter. If the commissioner determines that the 
5.1 	applicant meets the requirements of this chapter, the commissioner shall issue a certificate 
5.2 	of authority. If the commissioner determines that the applicant is not qualified, the 
5.3 	commissioner shall notify the applicant and shall specify the reason or reasons for the 
5.4 	disqualification.
5.5 	(b) In the event the commissioner rejects an application under this chapter, the county 
5.6 	board, the joint powers board, or a single entity representing the county board or joint powers 
5.7 	board may request a review by a three-person mediation panel. The panel shall be composed 
5.8 	of one designee of the president of the Association of Minnesota Counties, one designee of 
5.9 	the commissioner, and one person selected jointly by the designee of the commissioner and 
5.10 	the designee of the Association of Minnesota Counties. The commissioner shall make a 
5.11 	final determination on the application after considering the recommendation of the 
5.12 	three-person mediation panel.
5.13 		Subd. 7.Enforcement; rulemaking. All enforcement and rulemaking powers available 
5.14 	to the commissioner of health under chapters 62D, 62J, 62M, 62N, and 62Q are granted to 
5.15 	the commissioner with respect to counties that operate a county-based purchasing 
5.16 	organization.
5.17 		Subd. 8.Continued compliance. (a) Upon being granted a certificate of authority to 
5.18 	operate as a county-based purchasing organization, the organization must continue to comply 
5.19 	with the standards in this chapter. Noncompliance may result in the suspension or revocation 
5.20 	of the certificate of authority.
5.21 	(b) The county-based purchasing organization shall conduct its operations in a publicly 
5.22 	transparent and accountable manner, and in compliance with all regulations applicable to 
5.23 	government entities, including providing enrollees and participating providers opportunities 
5.24 	to be involved in the governance of the county-based purchasing organization.
5.25 		Subd. 9.Hold harmless. A county-based purchasing organization operating a 
5.26 	county-based purchasing plan must ensure that the state and enrollees are held harmless for 
5.27 	any payment obligations incurred by the county-based purchasing plan if the county-based 
5.28 	purchasing organization becomes insolvent and the state has made capitation payments to 
5.29 	the county-based purchasing organization under section 256B.69 or 256L.12.

5.30 	Sec. 4. [62W.04] FEES.
5.31 	(a) The commissioner of health shall collect from each county-based purchasing 
5.32 	organization the following fees:
6.1 	(1) fees attributable to the cost of audits and other examinations of the plan's financial 
6.2 	operations. These fees are subject to the provisions in Minnesota Rules, part 4685.2800, 
6.3 	subpart 1, item F; and
6.4 	(2) an annual fee of $21,500 to be paid by June 15 of each calendar year.
6.5 	(b) All fees collected under this section shall be deposited in the state government special 
6.6 	revenue fund.

6.7 	Sec. 5. [62W.05] EXISTING COUNTY-BASED PURCHASING ORGANIZATIONS.
6.8 	(a) A county-based purchasing plan that was established under section 256B.692 and is 
6.9 	operating on January 1, 2018, is deemed to have met the requirements of this chapter and 
6.10 	is not required to submit a new application to the commissioner. The commissioner shall 
6.11 	issue a certificate of authority to these county-based purchasing organizations.
6.12 	(b) Nothing in paragraph (a) shall be construed to exempt a county-based purchasing 
6.13 	organization from the other provisions of this chapter or section 256B.69.

6.14 	Sec. 6. [62W.06] EXPENDITURE OF REVENUES.
6.15 	(a) A county-based purchasing organization operating a county-based purchasing plan 
6.16 	must use any excess revenues over expenses that are received by the county-based purchasing 
6.17 	organization:
6.18 	(1) for capital reserves under section 62W.03, subdivision 5;
6.19 	(2) to increase payments to providers;
6.20 	(3) for early intervention and public health services and activities; or
6.21 	(4) to improve economic and geographic access to and the delivery of cost-effective 
6.22 	quality health care.
6.23 	(b) A county-based purchasing organization is subject to the unreasonable expense 
6.24 	provisions of section 62D.19.

6.25 	Sec. 7. [62W.07] PARTICIPATION IN GOVERNMENT PROGRAMS.
6.26 		Subdivision 1.County proposals. A county-based purchasing organization may, upon 
6.27 	obtaining a certificate of authority under this chapter, offer a county-based purchasing plan 
6.28 	for the purpose of providing health care services on behalf of eligible individuals in 
6.29 	accordance with sections 256B.69 and 256L.12. The county-based purchasing organization 
6.30 	may purchase all or part of services from a third-party administrator or individual providers 
7.1 	on a fee-for-service basis, or provide these services directly. The county-based purchasing 
7.2 	plan may participate in any contract procurement process under section 256B.69 that includes 
7.3 	the counties within the county-based purchasing plan's service area in accordance with state 
7.4 	and federal procurement laws.
7.5 		Subd. 2.Notice.  If a county-based purchasing organization elects to offer a county-based 
7.6 	purchasing plan in a county or group of counties where a county-based purchasing plan has 
7.7 	not been implemented and plans to participate in the procurement process under section 
7.8 	256B.69, the county-based purchasing organization must provide notice to the commissioner 
7.9 	of human services at least 15 months prior to the termination date of the existing managed 
7.10 	care plan contract that covers eligible individuals in that county or group of counties.
7.11 		Subd. 3.Transfer of risk. If the county-based purchasing plan contracts with the 
7.12 	commissioner of human services under section 256B.69 or 256L.12, the state of Minnesota 
7.13 	and the United States Department of Health and Human Services are not liable for any costs 
7.14 	incurred by a county or a county-based purchasing plan that exceed the payments to the 
7.15 	county-based purchasing organization made under this section or section 256B.69 or 256L.12. 
7.16 	A county or group of counties whose costs exceed the payments made by the state, an 
7.17 	enrollee of the county-based purchasing plan, or a creditor of that county shall have no 
7.18 	rights under chapter 61B or section 62D.181. A county may assign risk for the cost of care 
7.19 	to a third party.

7.20 	Sec. 8. Minnesota Statutes 2016, section 256B.69, subdivision 2, is amended to read:
7.21 		Subd. 2.Definitions. For the purposes of this section, the following terms have the 
7.22 	meanings given.
7.23 	(a) "Commissioner" means the commissioner of human services. For the remainder of 
7.24 	this section, the commissioner's responsibilities for methods and policies for implementing 
7.25 	the project will be proposed by the project advisory committees and approved by the 
7.26 	commissioner.
7.27 	(b) "Demonstration provider" means a health maintenance organization, community 
7.28 	integrated service network, ~~or~~ accountable provider network, or county-based purchasing 
7.29 	organization authorized and operating under chapter 62D, 62N, ~~or~~ 62T, or 62W that 
7.30 	participates in the demonstration project according to criteria, standards, methods, and other 
7.31 	requirements established for the project and approved by the commissioner. ~~For purposes~~ 
7.32 	~~of this section, a county board, or group of county boards operating under a joint powers~~ 
7.33 	~~agreement, is considered a demonstration provider if the county or group of county boards~~ 
7.34 	~~meets the requirements of section 256B.692.~~
8.1 	(c) "Eligible individuals" means those persons eligible for medical assistance benefits 
8.2 	as defined in sections 256B.055, 256B.056, and 256B.06.
8.3 	(d) "Limitation of choice" means suspending freedom of choice while allowing eligible 
8.4 	individuals to choose among the demonstration providers.

8.5 	Sec. 9. Minnesota Statutes 2016, section 256B.69, subdivision 3a, is amended to read:
8.6 		Subd. 3a.County authority. (a) The commissioner, when implementing the medical 
8.7 	assistance prepayment program within a county, must include the county board in the process 
8.8 	of development, approval, and issuance of the request for proposals to provide services to 
8.9 	eligible individuals within the proposed county. County boards must be given reasonable 
8.10 	opportunity to make recommendations regarding the development, issuance, review of 
8.11 	responses, and changes needed in the request for proposals. The commissioner must provide 
8.12 	county boards the opportunity to review each proposal based on the identification of 
8.13 	community needs under chapters 145A and 256E and county advocacy activities. If a county 
8.14 	board finds that a proposal does not address certain community needs, the county board and 
8.15 	commissioner shall continue efforts for improving the proposal and network prior to the 
8.16 	approval of the contract. The county board shall make recommendations regarding the 
8.17 	approval of local networks and their operations to ensure adequate availability and access 
8.18 	to covered services. The provider or health plan must respond directly to county advocates 
8.19 	and the state prepaid medical assistance ombudsperson regarding service delivery and must 
8.20 	be accountable to the state regarding contracts with medical assistance funds. The county 
8.21 	board may recommend a maximum number of participating health plans after considering 
8.22 	the size of the enrolling population; ensuring adequate access and capacity; considering the 
8.23 	client and county administrative complexity; and considering the need to promote the 
8.24 	viability of locally developed health plans. The county board or a single entity representing 
8.25 	a group of county boards and the commissioner shall mutually select health plans for 
8.26 	participation at the time of ~~initial implementation of the prepaid medical assistance program~~ 
8.27 	~~in that county or group of counties and at the time of~~ procurement or contract renewal that 
8.28 	involves that county or group of counties. The commissioner shall also seek input for contract 
8.29 	requirements from the county or single entity representing a group of county boards at each 
8.30 	contract renewal and incorporate those recommendations into the contract negotiation 
8.31 	process.
8.32 	(b) At the option of the county board, the board may develop contract requirements 
8.33 	related to the achievement of local public health goals to meet the health needs of medical 
8.34 	assistance enrollees. These requirements must be reasonably related to the performance of 
9.1 	health plan functions and within the scope of the medical assistance benefit set. If the county 
9.2 	board and the commissioner mutually agree to such requirements, the department shall 
9.3 	include such requirements in all health plan contracts governing the prepaid medical 
9.4 	assistance program in that county ~~at initial implementation of the program in that county~~ 
9.5 	~~and~~ at the time of a procurement process or contract renewal. The county board may 
9.6 	participate in the enforcement of the contract provisions related to local public health goals.
9.7 	~~(c) For counties in which a prepaid medical assistance program has not been established,~~ 
9.8 	~~the commissioner shall not implement that program if a county board submits an acceptable~~ 
9.9 	~~and timely preliminary and final proposal under section 256B.692, until county-based~~ 
9.10 	~~purchasing is no longer operational in that county. For counties in which a prepaid medical~~ 
9.11 	~~assistance program is in existence on or after September 1, 1997, the commissioner must~~ 
9.12 	~~terminate contracts with health plans according to section 256B.692, subdivision 5, if the~~ 
9.13 	~~county board submits and the commissioner accepts a preliminary and final proposal~~ 
9.14 	~~according to that subdivision. The commissioner is not required to terminate contracts that~~ 
9.15 	~~begin on or after September 1, 1997, according to section 256B.692 until two years have~~ 
9.16 	~~elapsed from the date of initial enrollment.~~
9.17 	~~(d)~~ (c) In the event that a county board or a single entity representing a group of county 
9.18 	boards and the commissioner cannot reach agreement regarding: (i) the selection of 
9.19 	participating health plans in that county; (ii) contract requirements; or (iii) implementation 
9.20 	and enforcement of county requirements including provisions regarding local public health 
9.21 	goals, the commissioner shall resolve all disputes after taking into account the 
9.22 	recommendations of a three-person mediation panel. The panel shall be composed of one 
9.23 	designee of the president of the Association of Minnesota Counties, one designee of the 
9.24 	commissioner of human services, and one person selected jointly by the designee of the 
9.25 	commissioner of human services and the designee of the Association of Minnesota Counties. 
9.26 	Within a reasonable period of time before the hearing, the panelists must be provided all 
9.27 	documents and information relevant to the mediation. The parties to the mediation must be 
9.28 	given 30 days' notice of a hearing before the mediation panel.
9.29 	~~(e) If a county which elects to implement county-based purchasing ceases to implement~~ 
9.30 	~~county-based purchasing, it is prohibited from assuming the responsibility of county-based~~ 
9.31 	~~purchasing for a period of five years from the date it discontinues purchasing.~~
9.32 	~~(f) The commissioner shall not require that contractual disputes between county-based~~ 
9.33 	~~purchasing entities and the commissioner be mediated by a panel that includes a~~ 
9.34 	~~representative of the Minnesota Council of Health Plans.~~
10.1 	~~(g)~~ (d) At the request of a county-purchasing entity, the commissioner shall adopt a 
10.2 	contract reprocurement or renewal schedule under which all counties included in the entity's 
10.3 	service area are reprocured or renewed at the same time.
10.4 	~~(h)~~ (e) The commissioner shall provide a written report under section 3.195 to the chairs 
10.5 	of the legislative committees having jurisdiction over human services in the senate and the 
10.6 	house of representatives describing in detail the activities undertaken by the commissioner 
10.7 	to ensure full compliance with this section. The report must also provide an explanation for 
10.8 	any decisions of the commissioner not to accept the recommendations of a county or group 
10.9 	of counties required to be consulted under this section. The report must be provided at least 
10.10 	30 days prior to the effective date of a new or renewed prepaid or managed care contract 
10.11 	in a county.

10.12 	Sec. 10.  REPEALER.
 10.13 	(a) Minnesota Statutes 2016, sections 256B.692, subdivisions 1, 2, 3, 4, 4a, 5, 7, 8, and 
10.14 	9, are repealed.
10.15 	(b) Minnesota Statutes 2017 Supplement, section 256B.692, subdivision 6, is repealed.

10.16 	ARTICLE 2
10.17 	CONFORMING CHANGES

10.18 	Section 1. Minnesota Statutes 2017 Supplement, section 3.972, subdivision 2b, is amended 
10.19 	to read:
10.20 		Subd. 2b.Audits of managed care organizations. (a) The legislative auditor shall audit 
10.21 	each managed care organization that contracts with the commissioner of human services to 
10.22 	provide health care services under sections 256B.69~~, 256B.692,~~ and 256L.12. The legislative 
10.23 	auditor shall design the audits to determine if a managed care organization used the public 
10.24 	money in compliance with federal and state laws, rules, and in accordance with provisions 
10.25 	in the managed care organization's contract with the commissioner of human services. The 
10.26 	legislative auditor shall determine the schedule and scope of the audit work and may contract 
10.27 	with vendors to assist with the audits. The managed care organization must cooperate with 
10.28 	the legislative auditor and must provide the legislative auditor with all data, documents, and 
10.29 	other information, regardless of classification, that the legislative auditor requests to conduct 
10.30 	an audit. The legislative auditor shall periodically report audit results and recommendations 
10.31 	to the Legislative Audit Commission and the chairs and ranking minority members of the 
10.32 	legislative committees with jurisdiction over health and human services policy and finance.
11.1 	(b) For purposes of this subdivision, a "managed care organization" means a 
11.2 	demonstration provider as defined under section 256B.69, subdivision 2.

11.3 	Sec. 2. Minnesota Statutes 2016, section 62A.045, is amended to read:
11.4 	62A.045 PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT 
11.5 	HEALTH PROGRAMS.
11.6 	(a) As a condition of doing business in Minnesota or providing coverage to residents of 
11.7 	Minnesota covered by this section, each health insurer shall comply with the requirements 
11.8 	of the federal Deficit Reduction Act of 2005, Public Law 109-171, including any federal 
11.9 	regulations adopted under that act, to the extent that it imposes a requirement that applies 
11.10 	in this state and that is not also required by the laws of this state. This section does not 
11.11 	require compliance with any provision of the federal act prior to the effective date provided 
11.12 	for that provision in the federal act. The commissioner shall enforce this section.
11.13 	For the purpose of this section, "health insurer" includes self-insured plans, group health 
11.14 	plans (as defined in section 607(1) of the Employee Retirement Income Security Act of 
11.15 	1974), service benefit plans, managed care organizations, pharmacy benefit managers, or 
11.16 	other parties that are by contract legally responsible to pay a claim for a health-care item 
11.17 	or service for an individual receiving benefits under paragraph (b).
11.18 	(b) No plan offered by a health insurer issued or renewed to provide coverage to a 
11.19 	Minnesota resident shall contain any provision denying or reducing benefits because services 
11.20 	are rendered to a person who is eligible for or receiving medical benefits pursuant to title 
11.21 	XIX of the Social Security Act (Medicaid) in this or any other state; chapter 256 or 256B; 
11.22 	or services pursuant to section 252.27; 256L.01 to 256L.10; 260B.331, subdivision 2; 
11.23 	260C.331, subdivision 2; or 393.07, subdivision 1 or 2. No health insurer providing benefits 
11.24 	under plans covered by this section shall use eligibility for medical programs named in this 
11.25 	section as an underwriting guideline or reason for nonacceptance of the risk.
11.26 	(c) If payment for covered expenses has been made under state medical programs for 
11.27 	health care items or services provided to an individual, and a third party has a legal liability 
11.28 	to make payments, the rights of payment and appeal of an adverse coverage decision for 
11.29 	the individual, or in the case of a child their responsible relative or caretaker, will be 
11.30 	subrogated to the state agency. The state agency may assert its rights under this section 
11.31 	within three years of the date the service was rendered. For purposes of this section, "state 
11.32 	agency" includes prepaid health plans under contract with the commissioner according to 
11.33 	sections 256B.69 and 256L.12; children's mental health collaboratives under section 245.493; 
11.34 	demonstration projects for persons with disabilities under section 256B.77; and nursing 
12.1 	homes under the alternative payment demonstration project under section 256B.434~~; and~~ 
12.2 	~~county-based purchasing entities under section 256B.692~~.
12.3 	(d) Notwithstanding any law to the contrary, when a person covered by a plan offered 
12.4 	by a health insurer receives medical benefits according to any statute listed in this section, 
12.5 	payment for covered services or notice of denial for services billed by the provider must be 
12.6 	issued directly to the provider. If a person was receiving medical benefits through the 
12.7 	Department of Human Services at the time a service was provided, the provider must indicate 
12.8 	this benefit coverage on any claim forms submitted by the provider to the health insurer for 
12.9 	those services. If the commissioner of human services notifies the health insurer that the 
12.10 	commissioner has made payments to the provider, payment for benefits or notices of denials 
12.11 	issued by the health insurer must be issued directly to the commissioner. Submission by the 
12.12 	department to the health insurer of the claim on a Department of Human Services claim 
12.13 	form is proper notice and shall be considered proof of payment of the claim to the provider 
12.14 	and supersedes any contract requirements of the health insurer relating to the form of 
12.15 	submission. Liability to the insured for coverage is satisfied to the extent that payments for 
12.16 	those benefits are made by the health insurer to the provider or the commissioner as required 
12.17 	by this section.
12.18 	(e) When a state agency has acquired the rights of an individual eligible for medical 
12.19 	programs named in this section and has health benefits coverage through a health insurer, 
12.20 	the health insurer shall not impose requirements that are different from requirements 
12.21 	applicable to an agent or assignee of any other individual covered.
12.22 	(f) A health insurer must process a clean claim made by a state agency for covered 
12.23 	expenses paid under state medical programs within 90 business days of the claim's 
12.24 	submission. A health insurer must process all other claims made by a state agency for 
12.25 	covered expenses paid under a state medical program within the timeline set forth in Code 
12.26 	of Federal Regulations, title 42, section 447.45(d)(4).
12.27 	(g) A health insurer may request a refund of a claim paid in error to the Department of 
12.28 	Human Services within two years of the date the payment was made to the department. A 
12.29 	request for a refund shall not be honored by the department if the health insurer makes the 
12.30 	request after the time period has lapsed.

12.31 	Sec. 3. Minnesota Statutes 2016, section 62M.06, subdivision 1, is amended to read:
12.32 		Subdivision 1.Procedures for appeal. (a) A utilization review organization must have 
12.33 	written procedures for appeals of determinations not to certify. The right to appeal must be 
12.34 	available to the enrollee and to the attending health care professional.
13.1 	(b) The enrollee shall be allowed to review the information relied upon in the course of 
13.2 	the appeal, present evidence and testimony as part of the appeals process, and receive 
13.3 	continued coverage pending the outcome of the appeals process. This paragraph does not 
13.4 	apply to managed care plans or county-based purchasing plans serving state public health 
13.5 	care program enrollees under section 256B.69~~, 256B.692,~~ or chapter 256L, or to 
13.6 	grandfathered plans as defined under section 62A.011, subdivision 1c. Nothing in this 
13.7 	paragraph shall be construed to limit or restrict the appeal rights of state public health care 
13.8 	program enrollees provided under section 256.045 and Code of Federal Regulations, title 
13.9 	42, section 438.420(d).

13.10 	Sec. 4. Minnesota Statutes 2016, section 62Q.80, subdivision 2, is amended to read:
13.11 		Subd. 2.Definitions.  For purposes of this section, the following definitions apply:
13.12 	(a) "Community-based" means located in or primarily relating to the community, as 
13.13 	determined by the board of a community-based health initiative that is served by the 
13.14 	community-based health care coverage program.
13.15 	(b) "Community-based health care coverage program" or "program" means a program 
13.16 	administered by a community-based health initiative that provides health care services 
13.17 	through provider members of a community-based health network or combination of networks 
13.18 	to eligible individuals and their dependents who are enrolled in the program.
13.19 	(c) "Community-based health initiative" or "initiative" means a nonprofit corporation 
13.20 	that is governed by a board that has at least 80 percent of its members residing in the 
13.21 	community and includes representatives of the participating network providers and 
13.22 	employers, or a county-based purchasing organization ~~as defined in section 256B.692~~
13.23 	operating under chapter 62W.
13.24 	(d) "Community-based health network" means a contract-based network of health care 
13.25 	providers organized by the community-based health initiative to provide or support the 
13.26 	delivery of health care services to enrollees of the community-based health care coverage 
13.27 	program on a risk-sharing or nonrisk-sharing basis.
13.28 	(e) "Dependent" means an eligible employee's spouse or child who is under the age of 
13.29 	26 years.

13.30 	Sec. 5. Minnesota Statutes 2016, section 62U.01, subdivision 8, is amended to read:
13.31 		Subd. 8.Health plan company. "Health plan company" has the meaning provided in 
13.32 	section 62Q.01, subdivision 4. For the purposes of this chapter, health plan company shall 
14.1 	include a county-based purchasing ~~arrangements authorized under section 256B.692~~
14.2 	organization operating under chapter 62W.

14.3 	Sec. 6. Minnesota Statutes 2016, section 125A.023, subdivision 3, is amended to read:
14.4 		Subd. 3.Definitions. For purposes of this section and section 125A.027, the following 
14.5 	terms have the meanings given them:
14.6 	(a) "Health plan" means:
14.7 	(1) a health plan under section 62Q.01, subdivision 3;
14.8 	(2) a county-based purchasing plan under ~~section 256B.692~~ chapter 62W;
14.9 	(3) a self-insured health plan established by a local government under section 471.617; 
14.10 	or
14.11 	(4) self-insured health coverage provided by the state to its employees or retirees.
14.12 	(b) For purposes of this section, "health plan company" means an entity that issues a 
14.13 	health plan as defined in paragraph (a).
14.14 	(c) "Interagency intervention service system" means a system that coordinates services 
14.15 	and programs required in state and federal law to meet the needs of eligible children with 
14.16 	disabilities ages three through 21, including:
14.17 	(1) services provided under the following programs or initiatives administered by state 
14.18 	or local agencies:
14.19 	(i) the maternal and child health program under title V of the Social Security Act;
14.20 	(ii) the Minnesota children with special health needs program under sections 144.05 and 
14.21 	144.07;
14.22 	(iii) the Individuals with Disabilities Education Act, Part B, section 619, and Part C as 
14.23 	amended;
14.24 	(iv) medical assistance under title 42, chapter 7, of the Social Security Act;
14.25 	(v) developmental disabilities services under chapter 256B;
14.26 	(vi) the Head Start Act under title 42, chapter 105, of the Social Security Act;
14.27 	(vii) vocational rehabilitation services provided under chapters 248 and 268A and the 
14.28 	Rehabilitation Act of 1973;
14.29 	(viii) Juvenile Court Act services provided under sections 260.011 to 260.91; 260B.001
14.30 	to 260B.446; and 260C.001 to 260C.451;
15.1 	(ix) Minnesota Comprehensive Children's Mental Health Act under section 245.487;
15.2 	(x) the community health services grants under sections 145.88 to 145.9266;
15.3 	(xi) the Local Public Health Act under chapter 145A; and
15.4 	(xii) the Vulnerable Children and Adults Act, sections 256M.60 to 256M.80;
15.5 	(2) service provision and funding that can be coordinated through:
15.6 	(i) the children's mental health collaborative under section 245.493;
15.7 	(ii) the family services collaborative under section 124D.23;
15.8 	(iii) the community transition interagency committees under section 125A.22; and
15.9 	(iv) the interagency early intervention committees under section 125A.259;
15.10 	(3) financial and other funding programs to be coordinated including medical assistance 
15.11 	under title 42, chapter 7, of the Social Security Act, the MinnesotaCare program under 
15.12 	chapter 256L, Supplemental Social Security Income, Developmental Disabilities Assistance, 
15.13 	and any other employment-related activities associated with the Social Security 
15.14 	Administration; and services provided under a health plan in conformity with an individual 
15.15 	family service plan or an individualized education program or an individual interagency 
15.16 	intervention plan; and
15.17 	(4) additional appropriate services that local agencies and counties provide on an 
15.18 	individual need basis upon determining eligibility and receiving a request from (i) the school 
15.19 	board or county board and (ii) the child's parent.
15.20 	(d) "Children with disabilities" has the meaning given in section 125A.02.
15.21 	(e) A "standardized written plan" means those individual services or programs, with 
15.22 	accompanying funding sources, available through the interagency intervention service 
15.23 	system to an eligible child other than the services or programs described in the child's 
15.24 	individualized education program or the child's individual family service plan.

15.25 	Sec. 7. Minnesota Statutes 2016, section 245.4682, subdivision 3, is amended to read:
15.26 		Subd. 3.Projects for coordination of care. (a) Consistent with section 256B.69 and 
15.27 	chapter 256L, the commissioner is authorized to solicit, approve, and implement up to three 
15.28 	projects to demonstrate the integration of physical and mental health services within prepaid 
15.29 	health plans and their coordination with social services. The commissioner shall require 
15.30 	that each project be based on locally defined partnerships that include at least one health 
15.31 	maintenance organization, community integrated service network, or accountable provider 
16.1 	network authorized and operating under chapter 62D, 62N, or 62T, or county-based 
16.2 	purchasing ~~entity~~ organization operating under ~~section 256B.692~~ chapter 62W that is eligible 
16.3 	to contract with the commissioner as a prepaid health plan, and the county or counties within 
16.4 	the service area. Counties shall retain responsibility and authority for social services in these 
16.5 	locally defined partnerships.
16.6 	(b) The commissioner, in consultation with consumers, families, and their representatives, 
16.7 	shall:
16.8 	(1) determine criteria for approving the projects and use those criteria to solicit proposals 
16.9 	for preferred integrated networks. The commissioner must develop criteria to evaluate the 
16.10 	partnership proposed by the county and prepaid health plan to coordinate access and delivery 
16.11 	of services. The proposal must at a minimum address how the partnership will coordinate 
16.12 	the provision of:
16.13 	(i) client outreach and identification of health and social service needs paired with 
16.14 	expedited access to appropriate resources;
16.15 	(ii) activities to maintain continuity of health care coverage;
16.16 	(iii) children's residential mental health treatment and treatment foster care;
16.17 	(iv) court-ordered assessments and treatments;
16.18 	(v) prepetition screening and commitments under chapter 253B;
16.19 	(vi) assessment and treatment of children identified through mental health screening of 
16.20 	child welfare and juvenile corrections cases;
16.21 	(vii) home and community-based waiver services;
16.22 	(viii) assistance with finding and maintaining employment;
16.23 	(ix) housing; and
16.24 	(x) transportation;
16.25 	(2) determine specifications for contracts with prepaid health plans to improve the plan's 
16.26 	ability to serve persons with mental health conditions, including specifications addressing:
16.27 	(i) early identification and intervention of physical and behavioral health problems;
16.28 	(ii) communication between the enrollee and the health plan;
16.29 	(iii) facilitation of enrollment for persons who are also eligible for a Medicare special 
16.30 	needs plan offered by the health plan;
17.1 	(iv) risk screening procedures;
17.2 	(v) health care coordination;
17.3 	(vi) member services and access to applicable protections and appeal processes;
17.4 	(vii) specialty provider networks;
17.5 	(viii) transportation services;
17.6 	(ix) treatment planning; and
17.7 	(x) administrative simplification for providers;
17.8 	(3) begin implementation of the projects no earlier than January 1, 2009, with not more 
17.9 	than 40 percent of the statewide population included during calendar year 2009 and additional 
17.10 	counties included in subsequent years;
17.11 	(4) waive any administrative rule not consistent with the implementation of the projects;
17.12 	(5) allow potential bidders at least 90 days to respond to the request for proposals; and
17.13 	(6) conduct an independent evaluation to determine if mental health outcomes have 
17.14 	improved in that county or counties according to measurable standards designed in 
17.15 	consultation with the advisory body established under this subdivision and reviewed by the 
17.16 	State Advisory Council on Mental Health.
17.17 	(c) Notwithstanding any statute or administrative rule to the contrary, the commissioner 
17.18 	may enroll all persons eligible for medical assistance with serious mental illness or emotional 
17.19 	disturbance in the prepaid plan of their choice within the project service area unless:
17.20 	(1) the individual is eligible for home and community-based services for persons with 
17.21 	developmental disabilities and related conditions under section 256B.092; or
17.22 	(2) the individual has a basis for exclusion from the prepaid plan under section 256B.69, 
17.23 	subdivision 4, other than disability, mental illness, or emotional disturbance.
17.24 	(d) The commissioner shall involve organizations representing persons with mental 
17.25 	illness and their families in the development and distribution of information used to educate 
17.26 	potential enrollees regarding their options for health care and mental health service delivery 
17.27 	under this subdivision.
17.28 	(e) If the person described in paragraph (c) does not elect to remain in fee-for-service 
17.29 	medical assistance, or declines to choose a plan, the commissioner may preferentially assign 
17.30 	that person to the prepaid plan participating in the preferred integrated network. The 
18.1 	commissioner shall implement the enrollment changes within a project's service area on the 
18.2 	timeline specified in that project's approved application.
18.3 	(f) A person enrolled in a prepaid health plan under paragraphs (c) and (d) may disenroll 
18.4 	from the plan at any time.
18.5 	(g) The commissioner, in consultation with consumers, families, and their representatives, 
18.6 	shall evaluate the projects begun in 2009, and shall refine the design of the service integration 
18.7 	projects before expanding the projects. The commissioner shall report to the chairs of the 
18.8 	legislative committees with jurisdiction over mental health services by March 1, 2008, on 
18.9 	plans for evaluation of preferred integrated networks established under this subdivision.
18.10 	(h) The commissioner shall apply for any federal waivers necessary to implement these 
18.11 	changes.
18.12 	(i) Payment for Medicaid service providers under this subdivision for the months of 
18.13 	May and June will be made no earlier than July 1 of the same calendar year.

18.14 	Sec. 8. Minnesota Statutes 2016, section 246.50, subdivision 11, is amended to read:
18.15 		Subd. 11.Health plan company. "Health plan company" has the meaning given ~~it~~ in 
18.16 	section 62Q.01, subdivision 4, and also includes a demonstration provider as defined in 
18.17 	section 256B.69, subdivision 2, paragraph (b), ~~a county or group of counties participating~~ 
18.18 	~~in county-based purchasing according to section 256B.692,~~ and a children's mental health 
18.19 	collaborative under contract to provide medical assistance for individuals enrolled in the 
18.20 	prepaid medical assistance and MinnesotaCare programs under sections 245.493 to 245.495.

18.21 	Sec. 9. Minnesota Statutes 2016, section 253B.045, subdivision 5, is amended to read:
18.22 		Subd. 5.Health plan company; definition. For purposes of this section, "health plan 
18.23 	company" has the meaning given it in section 62Q.01, subdivision 4, and also includes a 
18.24 	demonstration provider as defined in section 256B.69, subdivision 2, paragraph (b), a ~~county~~ 
18.25 	~~or group of counties participating in~~ county-based purchasing ~~according to section 256B.692~~
18.26 	organization operating under chapter 62W, and a children's mental health collaborative 
18.27 	under contract to provide medical assistance for individuals enrolled in the prepaid medical 
18.28 	assistance and MinnesotaCare programs according to sections 245.493 to 245.495.

18.29 	Sec. 10. Minnesota Statutes 2016, section 256.015, subdivision 1, is amended to read:
18.30 		Subdivision 1.State agency has lien. When the state agency provides, pays for, or 
18.31 	becomes liable for medical care or furnishes subsistence or other payments to a person, the 
19.1 	agency shall have a lien for the cost of the care and payments on any and all causes of action 
19.2 	or recovery rights under any policy, plan, or contract providing benefits for health care or 
19.3 	injury which accrue to the person to whom the care or payments were furnished, or to the 
19.4 	person's legal representatives, as a result of the occurrence that necessitated the medical 
19.5 	care, subsistence, or other payments. For purposes of this section, "state agency" includes 
19.6 	~~prepaid health~~ managed care plans and county-based purchasing plans under contract with 
19.7 	the commissioner according to sections 256B.69, 256L.01, subdivision 7, 256L.03, 
19.8 	subdivision 6, and 256L.12, and Minnesota Statutes 2009 Supplement, section 256D.03, 
19.9 	subdivision 4, paragraph (c); children's mental health collaboratives under section 245.493; 
19.10 	demonstration projects for persons with disabilities under section 256B.77; and nursing 
19.11 	homes under the alternative payment demonstration project under section 256B.434~~; and~~ 
19.12 	~~county-based purchasing entities under section 256B.692~~.

19.13 	Sec. 11. Minnesota Statutes 2016, section 256B.042, subdivision 1, is amended to read:
19.14 		Subdivision 1.Lien for cost of care. When the state agency provides, pays for, or 
19.15 	becomes liable for medical care, it shall have a lien for the cost of the care upon any and 
19.16 	all causes of action or recovery rights under any policy, plan, or contract providing benefits 
19.17 	for health care or injury, which accrue to the person to whom the care was furnished, or to 
19.18 	the person's legal representatives, as a result of the illness or injuries which necessitated the 
19.19 	medical care. For purposes of this section, "state agency" includes ~~prepaid health~~managed 
19.20 	care plans and county-based purchasing plans under contract with the commissioner 
19.21 	according to sections 256B.69 and 256L.12 and Minnesota Statutes 2009 Supplement, 
19.22 	section 256D.03, subdivision 4, paragraph (c); children's mental health collaboratives under 
19.23 	section 245.493; demonstration projects for persons with disabilities under section 256B.77; 
19.24 	and nursing facilities under the alternative payment demonstration project under section 
19.25 	256B.434~~; and county-based purchasing entities under section 256B.692~~.

19.26 	Sec. 12. Minnesota Statutes 2016, section 256B.056, subdivision 6, is amended to read:
19.27 		Subd. 6.Assignment of benefits. To be eligible for medical assistance a person must 
19.28 	have applied or must agree to apply all proceeds received or receivable by the person or the 
19.29 	person's legal representative from any third party liable for the costs of medical care. By 
19.30 	accepting or receiving assistance, the person is deemed to have assigned the person's rights 
19.31 	to medical support and third-party payments as required by title 19 of the Social Security 
19.32 	Act. Persons must cooperate with the state in establishing paternity and obtaining third-party 
19.33 	payments. By accepting medical assistance, a person assigns to the Department of Human 
19.34 	Services all rights the person may have to medical support or payments for medical expenses 
20.1 	from any other person or entity on their own or their dependent's behalf and agrees to 
20.2 	cooperate with the state in establishing paternity and obtaining third-party payments. Any 
20.3 	rights or amounts so assigned shall be applied against the cost of medical care paid for under 
20.4 	this chapter. Any assignment takes effect upon the determination that the applicant is eligible 
20.5 	for medical assistance and up to three months prior to the date of application if the applicant 
20.6 	is determined eligible for and receives medical assistance benefits. The application must 
20.7 	contain a statement explaining this assignment. For the purposes of this section, "the 
20.8 	Department of Human Services or the state" includes ~~prepaid health~~ managed care plans 
20.9 	and county-based purchasing plans under contract with the commissioner according to 
20.10 	sections 256B.69 and 256L.12 and Minnesota Statutes 2009 Supplement, section 256D.03, 
20.11 	subdivision 4, paragraph (c); children's mental health collaboratives under section 245.493; 
20.12 	demonstration projects for persons with disabilities under section 256B.77; and nursing 
20.13 	facilities under the alternative payment demonstration project under section 256B.434~~; and~~ 
20.14 	~~the county-based purchasing entities under section 256B.692~~.

20.15 	Sec. 13. Minnesota Statutes 2016, section 256B.0625, subdivision 9, is amended to read:
20.16 		Subd. 9.Dental services. (a) Medical assistance covers dental services.
20.17 	(b) Medical assistance dental coverage for nonpregnant adults is limited to the following 
20.18 	services:
20.19 	(1) comprehensive exams, limited to once every five years;
20.20 	(2) periodic exams, limited to one per year;
20.21 	(3) limited exams;
20.22 	(4) bitewing x-rays, limited to one per year;
20.23 	(5) periapical x-rays;
20.24 	(6) panoramic x-rays, limited to one every five years except (1) when medically necessary 
20.25 	for the diagnosis and follow-up of oral and maxillofacial pathology and trauma or (2) once 
20.26 	every two years for patients who cannot cooperate for intraoral film due to a developmental 
20.27 	disability or medical condition that does not allow for intraoral film placement;
20.28 	(7) prophylaxis, limited to one per year;
20.29 	(8) application of fluoride varnish, limited to one per year;
20.30 	(9) posterior fillings, all at the amalgam rate;
20.31 	(10) anterior fillings;
21.1 	(11) endodontics, limited to root canals on the anterior and premolars only;
21.2 	(12) removable prostheses, each dental arch limited to one every six years;
21.3 	(13) oral surgery, limited to extractions, biopsies, and incision and drainage of abscesses;
21.4 	(14) palliative treatment and sedative fillings for relief of pain; and
21.5 	(15) full-mouth debridement, limited to one every five years.
21.6 	(c) In addition to the services specified in paragraph (b), medical assistance covers the 
21.7 	following services for adults, if provided in an outpatient hospital setting or freestanding 
21.8 	ambulatory surgical center as part of outpatient dental surgery:
21.9 	(1) periodontics, limited to periodontal scaling and root planing once every two years;
21.10 	(2) general anesthesia; and
21.11 	(3) full-mouth survey once every five years.
21.12 	(d) Medical assistance covers medically necessary dental services for children and 
21.13 	pregnant women. The following guidelines apply:
21.14 	(1) posterior fillings are paid at the amalgam rate;
21.15 	(2) application of sealants are covered once every five years per permanent molar for 
21.16 	children only;
21.17 	(3) application of fluoride varnish is covered once every six months; and
21.18 	(4) orthodontia is eligible for coverage for children only.
21.19 	(e) In addition to the services specified in paragraphs (b) and (c), medical assistance 
21.20 	covers the following services for adults:
21.21 	(1) house calls or extended care facility calls for on-site delivery of covered services;
21.22 	(2) behavioral management when additional staff time is required to accommodate 
21.23 	behavioral challenges and sedation is not used;
21.24 	(3) oral or IV sedation, if the covered dental service cannot be performed safely without 
21.25 	it or would otherwise require the service to be performed under general anesthesia in a 
21.26 	hospital or surgical center; and
21.27 	(4) prophylaxis, in accordance with an appropriate individualized treatment plan, but 
21.28 	no more than four times per year.
21.29 	(f) The commissioner shall not require prior authorization for the services included in 
21.30 	paragraph (e), clauses (1) to (3), and shall prohibit managed care and county-based purchasing 
22.1 	plans from requiring prior authorization for the services included in paragraph (e), clauses 
22.2 	(1) to (3), when provided under sections 256B.69~~, 256B.692,~~ and 256L.12.

22.3 	Sec. 14. Minnesota Statutes 2016, section 256B.0631, subdivision 1, is amended to read:
22.4 		Subdivision 1.Cost-sharing. (a) Except as provided in subdivision 2, the medical 
22.5 	assistance benefit plan shall include the following cost-sharing for all recipients, effective 
22.6 	for services provided on or after September 1, 2011:
22.7 	(1) $3 per nonpreventive visit, except as provided in paragraph (b). For purposes of this 
22.8 	subdivision, a visit means an episode of service which is required because of a recipient's 
22.9 	symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting 
22.10 	by a physician or physician assistant, chiropractor, podiatrist, nurse midwife, advanced 
22.11 	practice nurse, audiologist, optician, or optometrist;
22.12 	(2) $3.50 for nonemergency visits to a hospital-based emergency room, except that this 
22.13 	co-payment shall be increased to $20 upon federal approval;
22.14 	(3) $3 per brand-name drug prescription and $1 per generic drug prescription, subject 
22.15 	to a $12 per month maximum for prescription drug co-payments. No co-payments shall 
22.16 	apply to antipsychotic drugs when used for the treatment of mental illness;
22.17 	(4) a family deductible equal to $2.75 per month per family and adjusted annually by 
22.18 	the percentage increase in the medical care component of the CPI-U for the period of 
22.19 	September to September of the preceding calendar year, rounded to the next higher five-cent 
22.20 	increment; and
22.21 	(5) total monthly cost-sharing must not exceed five percent of family income. For 
22.22 	purposes of this paragraph, family income is the total earned and unearned income of the 
22.23 	individual and the individual's spouse, if the spouse is enrolled in medical assistance and 
22.24 	also subject to the five percent limit on cost-sharing. This paragraph does not apply to 
22.25 	premiums charged to individuals described under section 256B.057, subdivision 9.
22.26 	(b) Recipients of medical assistance are responsible for all co-payments and deductibles 
22.27 	in this subdivision.
22.28 	(c) Notwithstanding paragraph (b), the commissioner, through the contracting process 
22.29 	under ~~sections~~ section256B.69~~and 256B.692~~, may allow managed care plans and 
22.30 	county-based purchasing plans to waive the family deductible under paragraph (a), clause 
22.31 	(4). The value of the family deductible shall not be included in the capitation payment to 
22.32 	managed care plans and county-based purchasing plans. Managed care plans and 
23.1 	county-based purchasing plans shall certify annually to the commissioner the dollar value 
23.2 	of the family deductible.
23.3 	(d) Notwithstanding paragraph (b), the commissioner may waive the collection of the 
23.4 	family deductible described under paragraph (a), clause (4), from individuals and allow 
23.5 	long-term care and waivered service providers to assume responsibility for payment.
23.6 	(e) Notwithstanding paragraph (b), the commissioner, through the contracting process 
23.7 	under section 256B.0756 shall allow the pilot program in Hennepin County to waive 
23.8 	co-payments. The value of the co-payments shall not be included in the capitation payment 
23.9 	amount to the integrated health care delivery networks under the pilot program.

23.10 	Sec. 15. Minnesota Statutes 2016, section 256B.37, subdivision 2, is amended to read:
23.11 		Subd. 2.Civil action for recovery. To recover under this section, the attorney general 
23.12 	may institute or join a civil action to enforce the subrogation rights of the commissioner 
23.13 	established under this section.
23.14 	Any ~~prepaid health~~ managed care plan or county-based purchasing plan providing 
23.15 	services under sections 256B.69 and 256L.12 and Minnesota Statutes 2009 Supplement, 
23.16 	section 256D.03, subdivision 4, paragraph (c); children's mental health collaboratives under 
23.17 	section 245.493; demonstration projects for persons with disabilities under section 256B.77; 
23.18 	or nursing homes under the alternative payment demonstration project under section 
23.19 	256B.434~~; or the county-based purchasing entity providing services under section 256B.692~~
23.20 	may retain legal representation to enforce the subrogation rights created under this section 
23.21 	or, if no action has been brought, may initiate and prosecute an independent action on their 
23.22 	behalf against a person, firm, or corporation that may be liable to the person to whom the 
23.23 	care or payment was furnished.

23.24 	Sec. 16. Minnesota Statutes 2016, section 256B.69, subdivision 5a, is amended to read:
23.25 		Subd. 5a.Managed care contracts. (a) Managed care contracts under this section and 
23.26 	section 256L.12 shall be entered into or renewed on a calendar year basis. The commissioner 
23.27 	may issue separate contracts with requirements specific to services to medical assistance 
23.28 	recipients age 65 and older.
23.29 	(b) A ~~prepaid health~~ managed care plan or county-based purchasing plan providing 
23.30 	covered health services for eligible persons pursuant to chapters 256B and 256L is responsible 
23.31 	for complying with the terms of its contract with the commissioner. Requirements applicable 
23.32 	to managed care programs under chapters 256B and 256L established after the effective 
24.1 	date of a contract with the commissioner take effect when the contract is next issued or 
24.2 	renewed.
24.3 	(c) The commissioner shall withhold five percent of ~~managed care plan~~ the capitation
24.4 	payments paid to a managed care plan or county-based purchasing plan under this section 
24.5 	~~and county-based purchasing plan payments under section 256B.692~~ for the prepaid medical 
24.6 	assistance program pending completion of performance targets. Each performance target 
24.7 	must be quantifiable, objective, measurable, and reasonably attainable, except in the case 
24.8 	of a performance target based on a federal or state law or rule. Criteria for assessment of 
24.9 	each performance target must be outlined in writing prior to the contract effective date. 
24.10 	Clinical or utilization performance targets and their related criteria must consider 
24.11 	evidence-based research and reasonable interventions when available or applicable to the 
24.12 	populations served, and must be developed with input from external clinical experts and 
24.13 	stakeholders, including managed care plans, county-based purchasing plans, and providers. 
24.14 	The managed care or county-based purchasing plan must demonstrate, to the commissioner's 
24.15 	satisfaction, that the data submitted regarding attainment of the performance target is accurate. 
24.16 	The commissioner shall periodically change the administrative measures used as performance 
24.17 	targets in order to improve plan performance across a broader range of administrative 
24.18 	services. The performance targets must include measurement of plan efforts to contain 
24.19 	spending on health care services and administrative activities. The commissioner may adopt 
24.20 	plan-specific performance targets that take into account factors affecting only one plan, 
24.21 	including characteristics of the plan's enrollee population. The withheld funds must be 
24.22 	returned no sooner than July of the following year if performance targets in the contract are 
24.23 	achieved. The commissioner may exclude special demonstration projects under subdivision 
24.24 	23.
24.25 	(d) The commissioner shall require that managed care plans use the assessment and 
24.26 	authorization processes, forms, timelines, standards, documentation, and data reporting 
24.27 	requirements, protocols, billing processes, and policies consistent with medical assistance 
24.28 	fee-for-service or the Department of Human Services contract requirements consistent with 
24.29 	medical assistance fee-for-service or the Department of Human Services contract 
24.30 	requirements for all personal care assistance services under section 256B.0659.
24.31 	(e) Effective for services rendered on or after January 1, 2012, the commissioner shall 
24.32 	include as part of the performance targets described in paragraph (c) a reduction in the health 
24.33 	plan's emergency department utilization rate for medical assistance and MinnesotaCare 
24.34 	enrollees, as determined by the commissioner. For 2012, the reduction shall be based on 
24.35 	the health plan's utilization in 2009. To earn the return of the withhold each subsequent 
25.1 	year, the managed care plan or county-based purchasing plan must achieve a qualifying 
25.2 	reduction of no less than ten percent of the plan's emergency department utilization rate for 
25.3 	medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described 
25.4 	in subdivisions 23 and 28, compared to the previous measurement year until the final 
25.5 	performance target is reached. When measuring performance, the commissioner must 
25.6 	consider the difference in health risk in a managed care or county-based purchasing plan's 
25.7 	membership in the baseline year compared to the measurement year, and work with the 
25.8 	managed care or county-based purchasing plan to account for differences that they agree 
25.9 	are significant.
25.10 	The withheld funds must be returned no sooner than July 1 and no later than July 31 of 
25.11 	the following calendar year if the managed care plan or county-based purchasing plan 
25.12 	demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate 
25.13 	was achieved. The commissioner shall structure the withhold so that the commissioner 
25.14 	returns a portion of the withheld funds in amounts commensurate with achieved reductions 
25.15 	in utilization less than the targeted amount.
25.16 	The withhold described in this paragraph shall continue for each consecutive contract 
25.17 	period until the plan's emergency room utilization rate for state health care program enrollees 
25.18 	is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance 
25.19 	and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the 
25.20 	health plans in meeting this performance target and shall accept payment withholds that 
25.21 	may be returned to the hospitals if the performance target is achieved.
25.22 	(f) Effective for services rendered on or after January 1, 2012, the commissioner shall 
25.23 	include as part of the performance targets described in paragraph (c) a reduction in the plan's 
25.24 	hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as 
25.25 	determined by the commissioner. To earn the return of the withhold each year, the managed 
25.26 	care plan or county-based purchasing plan must achieve a qualifying reduction of no less 
25.27 	than five percent of the plan's hospital admission rate for medical assistance and 
25.28 	MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 
25.29 	28, compared to the previous calendar year until the final performance target is reached. 
25.30 	When measuring performance, the commissioner must consider the difference in health risk 
25.31 	in a managed care or county-based purchasing plan's membership in the baseline year 
25.32 	compared to the measurement year, and work with the managed care or county-based 
25.33 	purchasing plan to account for differences that they agree are significant.
25.34 	The withheld funds must be returned no sooner than July 1 and no later than July 31 of 
25.35 	the following calendar year if the managed care plan or county-based purchasing plan 
26.1 	demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization 
26.2 	rate was achieved. The commissioner shall structure the withhold so that the commissioner 
26.3 	returns a portion of the withheld funds in amounts commensurate with achieved reductions 
26.4 	in utilization less than the targeted amount.
26.5 	The withhold described in this paragraph shall continue until there is a 25 percent 
26.6 	reduction in the hospital admission rate compared to the hospital admission rates in calendar 
26.7 	year 2011, as determined by the commissioner. The hospital admissions in this performance 
26.8 	target do not include the admissions applicable to the subsequent hospital admission 
26.9 	performance target under paragraph (g). Hospitals shall cooperate with the plans in meeting 
26.10 	this performance target and shall accept payment withholds that may be returned to the 
26.11 	hospitals if the performance target is achieved.
26.12 	(g) Effective for services rendered on or after January 1, 2012, the commissioner shall 
26.13 	include as part of the performance targets described in paragraph (c) a reduction in the plan's 
26.14 	hospitalization admission rates for subsequent hospitalizations within 30 days of a previous 
26.15 	hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare 
26.16 	enrollees, as determined by the commissioner. To earn the return of the withhold each year, 
26.17 	the managed care plan or county-based purchasing plan must achieve a qualifying reduction 
26.18 	of the subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees, 
26.19 	excluding enrollees in programs described in subdivisions 23 and 28, of no less than five 
26.20 	percent compared to the previous calendar year until the final performance target is reached.
26.21 	The withheld funds must be returned no sooner than July 1 and no later than July 31 of 
26.22 	the following calendar year if the managed care plan or county-based purchasing plan 
26.23 	demonstrates to the satisfaction of the commissioner that a qualifying reduction in the 
26.24 	subsequent hospitalization rate was achieved. The commissioner shall structure the withhold 
26.25 	so that the commissioner returns a portion of the withheld funds in amounts commensurate 
26.26 	with achieved reductions in utilization less than the targeted amount.
26.27 	The withhold described in this paragraph must continue for each consecutive contract 
26.28 	period until the plan's subsequent hospitalization rate for medical assistance and 
26.29 	MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 
26.30 	28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar year 
26.31 	2011. Hospitals shall cooperate with the plans in meeting this performance target and shall 
26.32 	accept payment withholds that must be returned to the hospitals if the performance target 
26.33 	is achieved.
27.1 	(h) Effective for services rendered on or after January 1, 2013, through December 31, 
27.2 	2013, the commissioner shall withhold 4.5 percent of ~~managed care plan~~ the capitation
27.3 	payments under this section ~~and county-based purchasing plan payments under section~~ 
27.4 	~~256B.692~~ for the prepaid medical assistance program. The withheld funds must be returned 
27.5 	no sooner than July 1 and no later than July 31 of the following year. The commissioner 
27.6 	may exclude special demonstration projects under subdivision 23.
27.7 	(i) Effective for services rendered on or after January 1, 2014, the commissioner shall 
27.8 	withhold three percent of ~~managed care plan~~ the capitation payments under this section ~~and~~ 
27.9 	~~county-based purchasing plan payments under section 256B.692~~ for the prepaid medical 
27.10 	assistance program. The withheld funds must be returned no sooner than July 1 and no later 
27.11 	than July 31 of the following year. The commissioner may exclude special demonstration 
27.12 	projects under subdivision 23.
27.13 	(j) A managed care plan or a county-based purchasing plan ~~under section 256B.692~~ may 
27.14 	include as admitted assets under section 62D.044 any amount withheld under this section 
27.15 	that is reasonably expected to be returned.
27.16 	(k) Contracts between the commissioner and a ~~prepaid health~~ managed care plan or 
27.17 	county-based purchasing plan are exempt from the set-aside and preference provisions of 
27.18 	section 16C.16, subdivisions 6, paragraph (a), and 7.
27.19 	(l) The return of the withhold under paragraphs (h) and (i) is not subject to the 
27.20 	requirements of paragraph (c).
27.21 	(m) Managed care plans and county-based purchasing plans shall maintain current and 
27.22 	fully executed agreements for all subcontractors, including bargaining groups, for 
27.23 	administrative services that are expensed to the state's public health care programs. 
27.24 	Subcontractor agreements determined to be material, as defined by the commissioner after 
27.25 	taking into account state contracting and relevant statutory requirements, must be in the 
27.26 	form of a written instrument or electronic document containing the elements of offer, 
27.27 	acceptance, consideration, payment terms, scope, duration of the contract, and how the 
27.28 	subcontractor services relate to state public health care programs. Upon request, the 
27.29 	commissioner shall have access to all subcontractor documentation under this paragraph. 
27.30 	Nothing in this paragraph shall allow release of information that is nonpublic data pursuant 
27.31 	to section 13.02.

28.1 	Sec. 17. Minnesota Statutes 2016, section 256B.69, subdivision 5i, is amended to read:
28.2 		Subd. 5i.Administrative expenses. (a) Administrative costs paid to managed care plans 
28.3 	and county-based purchasing plans under this section~~, section 256B.692,~~ and section 256L.12
28.4 	must not exceed 6.6 percent of total payments made to all managed care plans and 
28.5 	county-based purchasing plans in aggregate across all state public health care programs, 
28.6 	based on payments expected to be made at the beginning of each calendar year. The 
28.7 	commissioner may reduce or eliminate administrative requirements to meet the administrative 
28.8 	cost limit. For purposes of this paragraph, administrative costs do not include premium 
28.9 	taxes paid under section 297I.05, subdivision 5, provider surcharges paid under section 
28.10 	256.9657, subdivision 3, and health insurance fees under section 9010 of the Affordable 
28.11 	Care Act.
28.12 	(b) The following expenses are not allowable administrative expenses for rate-setting 
28.13 	purposes under this section:
28.14 	(1) charitable contributions made by the managed care plan or the county-based 
28.15 	purchasing plan;
28.16 	(2) compensation of individuals within the organization in excess of $200,000 such that 
28.17 	the allocation of compensation for an individual across all state public health care programs 
28.18 	in total cannot exceed $200,000;
28.19 	(3) any penalties or fines assessed against the managed care plan or county-based 
28.20 	purchasing plan;
28.21 	(4) any indirect marketing or advertising expenses of the managed care plan or 
28.22 	county-based purchasing plan, including but not limited to costs to promote the managed 
28.23 	care or county-based purchasing plan, costs of facilities used for special events, and costs 
28.24 	of displays, demonstrations, donations, and promotional items such as memorabilia, models, 
28.25 	gifts, and souvenirs. The commissioner may classify an item listed in this clause as an 
28.26 	allowable administrative expense for rate-setting purposes, if the commissioner determines 
28.27 	that the expense is incidental to an activity related to state public health care programs that 
28.28 	is an allowable cost for purposes of rate setting;
28.29 	(5) any lobbying and political activities, events, or contributions;
28.30 	(6) administrative expenses related to the provision of services not covered under the 
28.31 	state plan or waiver;
28.32 	(7) alcoholic beverages and related costs;
28.33 	(8) membership in any social, dining, or country club or organization; and
29.1 	(9) entertainment, including amusement, diversion, and social activities, and any costs 
29.2 	directly associated with these costs, including but not limited to tickets to shows or sporting 
29.3 	events, meals, lodging, rentals, transportation, and gratuities.
29.4 	For the purposes of this subdivision, compensation includes salaries, bonuses and incentives, 
29.5 	other reportable compensation on an IRS 990 form, retirement and other deferred 
29.6 	compensation, and nontaxable benefits. Charitable contributions under clause (1) include 
29.7 	payments for or to any organization or entity selected by the managed care plan or 
29.8 	county-based purchasing plan that is operated for charitable, educational, political, religious, 
29.9 	or scientific purposes, that are not related to medical and administrative services covered 
29.10 	under state public health care programs.
29.11 	(c) Payments to a quality improvement organization are an allowable administrative 
29.12 	expense for rate-setting purposes under this section, to the extent they are allocated to a 
29.13 	state public health care program and approved by the commissioner.
29.14 	(d) Where reasonably possible, expenses for an administrative item shall be directly 
29.15 	allocated so as to assign costs for an item to an individual state public health care program 
29.16 	when the cost can be specifically identified with and benefits the individual state public 
29.17 	health care program. For administrative services expensed to the state's public health care 
29.18 	programs, managed care plans and county-based purchasing plans must clearly identify and 
29.19 	separately record expense items listed under paragraph (b) in their accounting systems in a 
29.20 	manner that allows for independent verification of unallowable expenses for purposes of 
29.21 	determining payment rates for state public health care programs.
29.22 	(e) Notwithstanding paragraph (a), the commissioner shall reduce administrative expenses 
29.23 	paid to managed care plans and county-based purchasing plans by .50 of a percentage point 
29.24 	for contracts beginning January 1, 2016, and ending December 31, 2017. To meet the 
29.25 	administrative reductions under this paragraph, the commissioner may reduce or eliminate 
29.26 	administrative requirements, exclude additional unallowable administrative expenses 
29.27 	identified under this section and resulting from the financial audits conducted under 
29.28 	subdivision 9d, and utilize competitive bidding to gain efficiencies through economies of 
29.29 	scale from increased enrollment. If the total reduction cannot be achieved through 
29.30 	administrative reduction, the commissioner may limit total rate increases on payments to 
29.31 	managed care plans and county-based purchasing plans.

29.32 	Sec. 18. Minnesota Statutes 2016, section 256B.69, subdivision 6b, is amended to read:
29.33 		Subd. 6b.Home and community-based waiver services. (a) For individuals enrolled 
29.34 	in the Minnesota senior health options project authorized under subdivision 23, elderly 
30.1 	waiver services shall be covered according to the terms and conditions of the federal 
30.2 	agreement governing that demonstration project.
30.3 	(b) For individuals under age 65 enrolled in demonstrations authorized under subdivision 
30.4 	23, home and community-based waiver services shall be covered according to the terms 
30.5 	and conditions of the federal agreement governing that demonstration project.
30.6 	(c) The commissioner of human services shall issue requests for proposals for 
30.7 	collaborative service models between counties and managed care organizations to integrate 
30.8 	the home and community-based elderly waiver services and additional nursing home services 
30.9 	into the prepaid medical assistance program.
30.10 	(d) Notwithstanding Minnesota Rules, part 9500.1457, subpart 1, item C, elderly waiver 
30.11 	services shall be covered statewide under the prepaid medical assistance program for all 
30.12 	individuals who are eligible according to section 256B.0915. The commissioner may develop 
30.13 	a schedule to phase in implementation of these waiver services, including collaborative 
30.14 	service models under paragraph (c). The commissioner shall phase in implementation 
30.15 	beginning with those counties participating ~~under section 256B.692~~ in a county-based 
30.16 	purchasing plan, and those counties where a viable collaborative service model has been 
30.17 	developed. In consultation with counties and all managed care organizations that have 
30.18 	expressed an interest in participating in collaborative service models, the commissioner 
30.19 	shall evaluate the models. The commissioner shall consider the evaluation in selecting the 
30.20 	most appropriate models for statewide implementation.

30.21 	Sec. 19. Minnesota Statutes 2016, section 256B.69, subdivision 9a, is amended to read:
30.22 		Subd. 9a.Administrative expense reporting. Within the limit of available 
30.23 	appropriations, the commissioner shall work with the commissioner of health to identify 
30.24 	and collect data on administrative spending for state health care programs reported to the 
30.25 	commissioner of health by managed care plans under section 62D.08 and county-based 
30.26 	purchasing plans under section ~~256B.692~~ 62W.03, provided that such data are consistent 
30.27 	with guidelines and standards for administrative spending that are developed by the 
30.28 	commissioner of health, and reported to the legislature under Laws 2008, chapter 364, 
30.29 	section 12. Data provided to the commissioner under this subdivision are nonpublic data as 
30.30 	defined under section 13.02.

30.31 	Sec. 20. Minnesota Statutes 2016, section 256B.69, subdivision 9c, is amended to read:
30.32 		Subd. 9c.Managed care financial reporting. (a) The commissioner shall collect detailed 
30.33 	data regarding financials, provider payments, provider rate methodologies, and other data 
31.1 	as determined by the commissioner. The commissioner, in consultation with the 
31.2 	commissioners of health and commerce, and in consultation with managed care plans and 
31.3 	county-based purchasing plans, shall set uniform criteria, definitions, and standards for the 
31.4 	data to be submitted, and shall require managed care and county-based purchasing plans to 
31.5 	comply with these criteria, definitions, and standards when submitting data under this 
31.6 	section. In carrying out the responsibilities of this subdivision, the commissioner shall ensure 
31.7 	that the data collection is implemented in an integrated and coordinated manner that avoids 
31.8 	unnecessary duplication of effort. To the extent possible, the commissioner shall use existing 
31.9 	data sources and streamline data collection in order to reduce public and private sector 
31.10 	administrative costs. Nothing in this subdivision shall allow release of information that is 
31.11 	nonpublic data pursuant to section 13.02.
31.12 	(b) Effective January 1, 2014, each managed care and county-based purchasing plan 
31.13 	must quarterly provide to the commissioner the following information on state public 
31.14 	programs, in the form and manner specified by the commissioner, according to guidelines 
31.15 	developed by the commissioner in consultation with managed care plans and county-based 
31.16 	purchasing plans under contract:
31.17 	(1) an income statement by program;
31.18 	(2) financial statement footnotes;
31.19 	(3) quarterly profitability by program and population group;
31.20 	(4) a medical liability summary by program and population group;
31.21 	(5) received but unpaid claims report by program;
31.22 	(6) services versus payment lags by program for hospital services, outpatient services, 
31.23 	physician services, other medical services, and pharmaceutical benefits;
31.24 	(7) utilization reports that summarize utilization and unit cost information by program 
31.25 	for hospitalization services, outpatient services, physician services, and other medical 
31.26 	services;
31.27 	(8) pharmaceutical statistics by program and population group for measures of price and 
31.28 	utilization of pharmaceutical services;
31.29 	(9) subcapitation expenses by population group;
31.30 	(10) third-party payments by program;
31.31 	(11) all new, active, and closed subrogation cases by program;
31.32 	(12) all new, active, and closed fraud and abuse cases by program;
32.1 	(13) medical loss ratios by program;
32.2 	(14) administrative expenses by category and subcategory by program that reconcile to 
32.3 	other state and federal regulatory agencies, including Minnesota Supplement Report #1A;
32.4 	(15) revenues by program, including investment income;
32.5 	(16) nonadministrative service payments, provider payments, and reimbursement rates 
32.6 	by provider type or service category, by program, paid by the managed care plan or 
32.7 	county-based purchasing plan under this section ~~or the county-based purchasing plan under~~ 
32.8 	~~section 256B.692~~ to providers and vendors for administrative services under contract with 
32.9 	the plan, including but not limited to:
32.10 	(i) individual-level provider payment and reimbursement rate data;
32.11 	(ii) provider reimbursement rate methodologies by provider type, by program, including 
32.12 	a description of alternative payment arrangements and payments outside the claims process;
32.13 	(iii) data on implementation of legislatively mandated provider rate changes; and
32.14 	(iv) individual-level provider payment and reimbursement rate data and plan-specific 
32.15 	provider reimbursement rate methodologies by provider type, by program, including 
32.16 	alternative payment arrangements and payments outside the claims process, provided to the 
32.17 	commissioner under this subdivision are nonpublic data as defined in section 13.02;
32.18 	(17) data on the amount of reinsurance or transfer of risk by program; and
32.19 	(18) contribution to reserve, by program.
32.20 	(c) In the event a report is published or released based on data provided under this 
32.21 	subdivision, the commissioner shall provide the report to managed care plans and 
32.22 	county-based purchasing plans 15 days prior to the publication or release of the report. 
32.23 	Managed care plans and county-based purchasing plans shall have 15 days to review the 
32.24 	report and provide comment to the commissioner.
32.25 	The quarterly reports shall be submitted to the commissioner no later than 60 days after the 
32.26 	end of the previous quarter, except the fourth-quarter report, which shall be submitted by 
32.27 	April 1 of each year. The fourth-quarter report shall include audited financial statements, 
32.28 	parent company audited financial statements, an income statement reconciliation report, 
32.29 	and any other documentation necessary to reconcile the detailed reports to the audited 
32.30 	financial statements.
33.1 	(d) Managed care plans and county-based purchasing plans shall certify to the 
33.2 	commissioner for the purpose of financial reporting for state public health care programs 
33.3 	under this subdivision that costs reported for state public health care programs include:
33.4 	(1) only services covered under the state plan and waivers, and related allowable 
33.5 	administrative expenses; and
33.6 	(2) the dollar value of unallowable and nonstate plan services, including both medical 
33.7 	and administrative expenditures, that have been excluded.

33.8 	Sec. 21. Minnesota Statutes 2016, section 256B.69, subdivision 9d, is amended to read:
33.9 		Subd. 9d.Financial and quality assurance audits. (a) The commissioner shall require, 
33.10 	in the request for bids and resulting contracts with managed care plans and county-based 
33.11 	purchasing plans under this section ~~and section 256B.692~~, that each managed care plan and 
33.12 	county-based purchasing plan submit to and fully cooperate with the independent third-party 
33.13 	financial audits by the legislative auditor under subdivision 9e of the information required 
33.14 	under subdivision 9c, paragraph (b). Each contract with a managed care plan or county-based 
33.15 	purchasing plan under this section ~~or section 256B.692~~ must provide the commissioner, the 
33.16 	legislative auditor, and vendors contracting with the legislative auditor, access to all data 
33.17 	required to complete audits under subdivision 9e.
33.18 	(b) Each managed care plan and county-based purchasing plan providing services under 
33.19 	this section shall provide to the commissioner biweekly encounter data and claims data for 
33.20 	state public health care programs and shall participate in a quality assurance program that 
33.21 	verifies the timeliness, completeness, accuracy, and consistency of the data provided. The 
33.22 	commissioner shall develop written protocols for the quality assurance program and shall 
33.23 	make the protocols publicly available. The commissioner shall contract for an independent 
33.24 	third-party audit to evaluate the quality assurance protocols as to the capacity of the protocols 
33.25 	to ensure complete and accurate data and to evaluate the commissioner's implementation 
33.26 	of the protocols.
33.27 	(c) Upon completion of the evaluation under paragraph (b), the commissioner shall 
33.28 	provide copies of the report to the legislative auditor and the chairs and ranking minority 
33.29 	members of the legislative committees with jurisdiction over health care policy and financing.
33.30 	(d) Any actuary under contract with the commissioner to provide actuarial services must 
33.31 	meet the independence requirements under the professional code for fellows in the Society 
33.32 	of Actuaries and must not have provided actuarial services to a managed care plan or 
33.33 	county-based purchasing plan that is under contract with the commissioner pursuant to this 
34.1 	section ~~and section 256B.692~~ during the period in which the actuarial services are being 
34.2 	provided. An actuary or actuarial firm meeting the requirements of this paragraph must 
34.3 	certify and attest to the rates paid to the managed care plans and county-based purchasing 
34.4 	plans under this section ~~and section 256B.692~~, and the certification and attestation must be 
34.5 	auditable.
34.6 	(e) The commissioner, to the extent of available funding, shall conduct ad hoc audits of 
34.7 	state public health care program administrative and medical expenses reported by managed 
34.8 	care plans and county-based purchasing plans. This includes: financial and encounter data 
34.9 	reported to the commissioner under subdivision 9c, including payments to providers and 
34.10 	subcontractors; supporting documentation for expenditures; categorization of administrative 
34.11 	and medical expenses; and allocation methods used to attribute administrative expenses to 
34.12 	state public health care programs. These audits also must monitor compliance with data and 
34.13 	financial report certification requirements established by the commissioner for the purposes 
34.14 	of managed care capitation payment rate-setting. The managed care plans and county-based 
34.15 	purchasing plans shall fully cooperate with the audits in this subdivision. The commissioner 
34.16 	shall report to the chairs and ranking minority members of the legislative committees with 
34.17 	jurisdiction over health and human services policy and finance by February 1, 2016, and 
34.18 	each February 1 thereafter, the number of ad hoc audits conducted in the past calendar year 
34.19 	and the results of these audits.
34.20 	(f) Nothing in this subdivision shall allow the release of information that is nonpublic 
34.21 	data pursuant to section 13.02.

34.22 	Sec. 22. Minnesota Statutes 2016, section 256B.69, subdivision 26, is amended to read:
34.23 		Subd. 26.American Indian recipients. (a) For American Indian recipients of medical 
34.24 	assistance who are required to enroll with a demonstration provider under subdivision 4 ~~or~~ 
34.25 	~~in a county-based purchasing entity, if applicable, under section 256B.692~~, medical assistance 
34.26 	shall cover health care services provided at Indian health services facilities and facilities 
34.27 	operated by a tribe or tribal organization under funding authorized by United States Code, 
34.28 	title 25, sections 450f to 450n, or title III of the Indian Self-Determination and Education 
34.29 	Assistance Act, Public Law 93-638, if those services would otherwise be covered under 
34.30 	section 256B.0625. Payments for services provided under this subdivision shall be made 
34.31 	on a fee-for-service basis, and may, at the option of the tribe or tribal organization, be made 
34.32 	according to rates authorized under sections 256.969, subdivision 16, and 256B.0625, 
34.33 	subdivision 34. Implementation of this purchasing model is contingent on federal approval.
35.1 	(b) The commissioner of human services, in consultation with the tribal governments, 
35.2 	shall develop a plan for tribes to assist in the enrollment process for American Indian 
35.3 	recipients enrolled in the prepaid medical assistance program under this section. This plan 
35.4 	also shall address how tribes will be included in ensuring the coordination of care for 
35.5 	American Indian recipients between Indian health service or tribal providers and other 
35.6 	providers.
35.7 	(c) For purposes of this subdivision, "American Indian" has the meaning given to persons 
35.8 	to whom services will be provided for in Code of Federal Regulations, title 42, section 
35.9 	36.12.

35.10 	Sec. 23. Minnesota Statutes 2017 Supplement, section 256B.6925, subdivision 4, is 
35.11 	amended to read:
35.12 		Subd. 4.Language and accessibility standards. (a) Managed care contracts entered 
35.13 	into under section 256B.69~~, 256B.692,~~ or 256L.12~~,~~ must require a managed care ~~organization~~
35.14 	plan or county-based purchasing plan to provide language assistance, and auxiliary aids and 
35.15 	services, if requested, to ensure access to a managed care organization's programs and 
35.16 	services, as required under United States Code, title 42, sections 18116 and 2000d, and any 
35.17 	other federal regulations or guidance from the United States Department of Health and 
35.18 	Human Services.
35.19 	(b) The commissioner shall establish a methodology to identify the prevalent non-English 
35.20 	languages spoken by enrollees and potential enrollees throughout Minnesota and in each 
35.21 	managed care organization's service area.
35.22 	(c) The commissioner shall ensure that oral interpretation is provided in all languages 
35.23 	and written interpretation is provided in each prevalent non-English language, and that both 
35.24 	are available to enrollees and potential enrollees free of charge. Oral interpretation services 
35.25 	shall include the use of auxiliary aids, TTY/TDY, and American sign language.
35.26 	(d) All written materials that target potential enrollees and are provided to enrollees, 
35.27 	including the provider directory, enrollee handbook, appeals and grievance notices, and 
35.28 	denial and termination notices, must:
35.29 	(1) use at least 12-point font;
35.30 	(2) be written at a 7th grade reading level;
35.31 	(3) be available in alternative formats and through auxiliary aids and services that consider 
35.32 	the special needs of the enrollee, including an enrollee with a disability or limited English 
35.33 	proficiency;
36.1 	(4) use taglines that consist of short statements in each of the prevalent non-English 
36.2 	languages, in an 18-point font, that explain the availability of language interpreter services 
36.3 	free of charge; and
36.4 	(5) explain how to request auxiliary aids and services, including the provision of the 
36.5 	materials in alternative formats and the TTY/TDY telephone number of the managed care 
36.6 	organization's customer service unit and the department's enrollee support system.
36.7 	(e) For purposes of this subdivision, "prevalent non-English language" means a 
36.8 	non-English language that is determined by the commissioner to be spoken by a significant 
36.9 	number or percentage of potential enrollees and enrollees with limited proficiency in English.

36.10 	Sec. 24. Minnesota Statutes 2016, section 256B.694, is amended to read:
36.11 	256B.694 SOLE-SOURCE OR SINGLE-PLAN MANAGED CARE CONTRACT.
36.12 	The commissioner shall consider, and may approve, contracting on a single-health plan 
36.13 	basis with county-based purchasing plans, or with other qualified health plans that have 
36.14 	coordination arrangements with counties, to serve persons enrolled in state public health 
36.15 	care programs, in order to promote better coordination or integration of health care services, 
36.16 	social services and other community-based services, provided that all requirements applicable 
36.17 	to health plan purchasing, including those in ~~sections~~ section256B.69 ~~and 256B.692~~, are 
36.18 	satisfied.

36.19 	Sec. 25. Minnesota Statutes 2016, section 256B.756, subdivision 3, is amended to read:
36.20 		Subd. 3.Health plans. Payments to managed care and county-based purchasing plans 
36.21 	under ~~sections~~ section256B.69~~, 256B.692,~~ or 256L.12 shall be reduced for services provided 
36.22 	on or after October 1, 2009, to reflect the adjustments in subdivision 1.

36.23 	Sec. 26. Minnesota Statutes 2017 Supplement, section 256B.76, subdivision 1, is amended 
36.24 	to read:
36.25 		Subdivision 1.Physician reimbursement.  (a) Effective for services rendered on or after 
36.26 	October 1, 1992, the commissioner shall make payments for physician services as follows:
36.27 	(1) payment for level one Centers for Medicare and Medicaid Services' common 
36.28 	procedural coding system codes titled "office and other outpatient services," "preventive 
36.29 	medicine new and established patient," "delivery, antepartum, and postpartum care," "critical 
36.30 	care," cesarean delivery and pharmacologic management provided to psychiatric patients, 
37.1 	and level three codes for enhanced services for prenatal high risk, shall be paid at the lower 
37.2 	of (i) submitted charges, or (ii) 25 percent above the rate in effect on June 30, 1992;
37.3 	(2) payments for all other services shall be paid at the lower of (i) submitted charges, 
37.4 	or (ii) 15.4 percent above the rate in effect on June 30, 1992; and
37.5 	(3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th 
37.6 	percentile of 1989, less the percent in aggregate necessary to equal the above increases 
37.7 	except that payment rates for home health agency services shall be the rates in effect on 
37.8 	September 30, 1992.
37.9 	(b) Effective for services rendered on or after January 1, 2000, payment rates for physician 
37.10 	and professional services shall be increased by three percent over the rates in effect on 
37.11 	December 31, 1999, except for home health agency and family planning agency services. 
37.12 	The increases in this paragraph shall be implemented January 1, 2000, for managed care.
37.13 	(c) Effective for services rendered on or after July 1, 2009, payment rates for physician 
37.14 	and professional services shall be reduced by five percent, except that for the period July 
37.15 	1, 2009, through June 30, 2010, payment rates shall be reduced by 6.5 percent for the medical 
37.16 	assistance and general assistance medical care programs, over the rates in effect on June 
37.17 	30, 2009. This reduction and the reductions in paragraph (d) do not apply to office or other 
37.18 	outpatient visits, preventive medicine visits and family planning visits billed by physicians, 
37.19 	advanced practice nurses, or physician assistants in a family planning agency or in one of 
37.20 	the following primary care practices: general practice, general internal medicine, general 
37.21 	pediatrics, general geriatrics, and family medicine. This reduction and the reductions in 
37.22 	paragraph (d) do not apply to federally qualified health centers, rural health centers, and 
37.23 	Indian health services. Effective October 1, 2009, payments made to managed care plans 
37.24 	and county-based purchasing plans under sections 256B.69~~, 256B.692,~~ and 256L.12 shall 
37.25 	reflect the payment reduction described in this paragraph.
37.26 	(d) Effective for services rendered on or after July 1, 2010, payment rates for physician 
37.27 	and professional services shall be reduced an additional seven percent over the five percent 
37.28 	reduction in rates described in paragraph (c). This additional reduction does not apply to 
37.29 	physical therapy services, occupational therapy services, and speech pathology and related 
37.30 	services provided on or after July 1, 2010. This additional reduction does not apply to 
37.31 	physician services billed by a psychiatrist or an advanced practice nurse with a specialty in 
37.32 	mental health. Effective October 1, 2010, payments made to managed care plans and 
37.33 	county-based purchasing plans under sections 256B.69~~, 256B.692,~~ and 256L.12 shall reflect 
37.34 	the payment reduction described in this paragraph.
38.1 	(e) Effective for services rendered on or after September 1, 2011, through June 30, 2013, 
38.2 	payment rates for physician and professional services shall be reduced three percent from 
38.3 	the rates in effect on August 31, 2011. This reduction does not apply to physical therapy 
38.4 	services, occupational therapy services, and speech pathology and related services.
38.5 	(f) Effective for services rendered on or after September 1, 2014, payment rates for 
38.6 	physician and professional services, including physical therapy, occupational therapy, speech 
38.7 	pathology, and mental health services shall be increased by five percent from the rates in 
38.8 	effect on August 31, 2014. In calculating this rate increase, the commissioner shall not 
38.9 	include in the base rate for August 31, 2014, the rate increase provided under section 
38.10 	256B.76, subdivision 7. This increase does not apply to federally qualified health centers, 
38.11 	rural health centers, and Indian health services. Payments made to managed care plans and 
38.12 	county-based purchasing plans shall not be adjusted to reflect payments under this paragraph.
38.13 	(g) Effective for services rendered on or after July 1, 2015, payment rates for physical 
38.14 	therapy, occupational therapy, and speech pathology and related services provided by a 
38.15 	hospital meeting the criteria specified in section 62Q.19, subdivision 1, paragraph (a), clause 
38.16 	(4), shall be increased by 90 percent from the rates in effect on June 30, 2015. Payments 
38.17 	made to managed care plans and county-based purchasing plans shall not be adjusted to 
38.18 	reflect payments under this paragraph.
38.19 	(h) Any ratables effective before July 1, 2015, do not apply to autism early intensive 
38.20 	intervention benefits described in section 256B.0949.

38.21 	Sec. 27. Minnesota Statutes 2017 Supplement, section 256B.76, subdivision 2, is amended 
38.22 	to read:
38.23 		Subd. 2.Dental reimbursement.  (a) Effective for services rendered on or after October 
38.24 	1, 1992, the commissioner shall make payments for dental services as follows:
38.25 	(1) dental services shall be paid at the lower of (i) submitted charges, or (ii) 25 percent 
38.26 	above the rate in effect on June 30, 1992; and
38.27 	(2) dental rates shall be converted from the 50th percentile of 1982 to the 50th percentile 
38.28 	of 1989, less the percent in aggregate necessary to equal the above increases.
38.29 	(b) Beginning October 1, 1999, the payment for tooth sealants and fluoride treatments 
38.30 	shall be the lower of (1) submitted charge, or (2) 80 percent of median 1997 charges.
38.31 	(c) Effective for services rendered on or after January 1, 2000, payment rates for dental 
38.32 	services shall be increased by three percent over the rates in effect on December 31, 1999.
39.1 	(d) Effective for services provided on or after January 1, 2002, payment for diagnostic 
39.2 	examinations and dental x-rays provided to children under age 21 shall be the lower of (1) 
39.3 	the submitted charge, or (2) 85 percent of median 1999 charges.
39.4 	(e) The increases listed in paragraphs (b) and (c) shall be implemented January 1, 2000, 
39.5 	for managed care.
39.6 	(f) Effective for dental services rendered on or after October 1, 2010, by a state-operated 
39.7 	dental clinic, payment shall be paid on a reasonable cost basis that is based on the Medicare 
39.8 	principles of reimbursement. This payment shall be effective for services rendered on or 
39.9 	after January 1, 2011, to recipients enrolled in managed care plans or county-based 
39.10 	purchasing plans.
39.11 	(g) Beginning in fiscal year 2011, if the payments to state-operated dental clinics in 
39.12 	paragraph (f), including state and federal shares, are less than $1,850,000 per fiscal year, a 
39.13 	supplemental state payment equal to the difference between the total payments in paragraph 
39.14 	(f) and $1,850,000 shall be paid from the general fund to state-operated services for the 
39.15 	operation of the dental clinics.
39.16 	(h) If the cost-based payment system for state-operated dental clinics described in 
39.17 	paragraph (f) does not receive federal approval, then state-operated dental clinics shall be 
39.18 	designated as critical access dental providers under subdivision 4, paragraph (b), and shall 
39.19 	receive the critical access dental reimbursement rate as described under subdivision 4, 
39.20 	paragraph (a).
39.21 	(i) Effective for services rendered on or after September 1, 2011, through June 30, 2013, 
39.22 	payment rates for dental services shall be reduced by three percent. This reduction does not 
39.23 	apply to state-operated dental clinics in paragraph (f).
39.24 	(j) Effective for services rendered on or after January 1, 2014, payment rates for dental 
39.25 	services shall be increased by five percent from the rates in effect on December 31, 2013. 
39.26 	This increase does not apply to state-operated dental clinics in paragraph (f), federally 
39.27 	qualified health centers, rural health centers, and Indian health services. Effective January 
39.28 	1, 2014, payments made to managed care plans and county-based purchasing plans under 
39.29 	sections 256B.69~~, 256B.692,~~ and 256L.12 shall reflect the payment increase described in 
39.30 	this paragraph.
39.31 	(k) Effective for services rendered on or after July 1, 2015, through December 31, 2016, 
39.32 	the commissioner shall increase payment rates for services furnished by dental providers 
39.33 	located outside of the seven-county metropolitan area by the maximum percentage possible 
39.34 	above the rates in effect on June 30, 2015, while remaining within the limits of funding 
40.1 	appropriated for this purpose. This increase does not apply to state-operated dental clinics 
40.2 	in paragraph (f), federally qualified health centers, rural health centers, and Indian health 
40.3 	services. Effective January 1, 2016, through December 31, 2016, payments to managed care 
40.4 	plans and county-based purchasing plans under ~~sections~~ section256B.69~~and 256B.692~~
40.5 	shall reflect the payment increase described in this paragraph. The commissioner shall 
40.6 	require managed care and county-based purchasing plans to pass on the full amount of the 
40.7 	increase, in the form of higher payment rates to dental providers located outside of the 
40.8 	seven-county metropolitan area.
40.9 	(l) Effective for services provided on or after January 1, 2017, the commissioner shall 
40.10 	increase payment rates by 9.65 percent for dental services provided outside of the 
40.11 	seven-county metropolitan area. This increase does not apply to state-operated dental clinics 
40.12 	in paragraph (f), federally qualified health centers, rural health centers, or Indian health 
40.13 	services. Effective January 1, 2017, payments to managed care plans and county-based 
40.14 	purchasing plans under ~~sections~~ section256B.69~~and 256B.692~~ shall reflect the payment 
40.15 	increase described in this paragraph.
40.16 	(m) Effective for services provided on or after July 1, 2017, the commissioner shall 
40.17 	increase payment rates by 23.8 percent for dental services provided to enrollees under the 
40.18 	age of 21. This rate increase does not apply to state-operated dental clinics in paragraph (f), 
40.19 	federally qualified health centers, rural health centers, or Indian health centers. This rate 
40.20 	increase does not apply to managed care plans and county-based purchasing plans.

40.21 	Sec. 28. Minnesota Statutes 2017 Supplement, section 256B.761, is amended to read:
40.22 	256B.761 REIMBURSEMENT FOR MENTAL HEALTH SERVICES.
40.23 	(a) Effective for services rendered on or after July 1, 2001, payment for medication 
40.24 	management provided to psychiatric patients, outpatient mental health services, day treatment 
40.25 	services, home-based mental health services, and family community support services shall 
40.26 	be paid at the lower of (1) submitted charges, or (2) 75.6 percent of the 50th percentile of 
40.27 	1999 charges.
40.28 	(b) Effective July 1, 2001, the medical assistance rates for outpatient mental health 
40.29 	services provided by an entity that operates: (1) a Medicare-certified comprehensive 
40.30 	outpatient rehabilitation facility; and (2) a facility that was certified prior to January 1, 1993, 
40.31 	with at least 33 percent of the clients receiving rehabilitation services in the most recent 
40.32 	calendar year who are medical assistance recipients, will be increased by 38 percent, when 
40.33 	those services are provided within the comprehensive outpatient rehabilitation facility and 
40.34 	provided to residents of nursing facilities owned by the entity.
41.1 	(c) The commissioner shall establish three levels of payment for mental health diagnostic 
41.2 	assessment, based on three levels of complexity. The aggregate payment under the tiered 
41.3 	rates must not exceed the projected aggregate payments for mental health diagnostic 
41.4 	assessment under the previous single rate. The new rate structure is effective January 1, 
41.5 	2011, or upon federal approval, whichever is later.
41.6 	(d) In addition to rate increases otherwise provided, the commissioner may restructure 
41.7 	coverage policy and rates to improve access to adult rehabilitative mental health services 
41.8 	under section 256B.0623 and related mental health support services under section 256B.021, 
41.9 	subdivision 4, paragraph (f), clause (2). For state fiscal years 2015 and 2016, the projected 
41.10 	state share of increased costs due to this paragraph is transferred from adult mental health 
41.11 	grants under sections 245.4661 and 256E.12. The transfer for fiscal year 2016 is a permanent 
41.12 	base adjustment for subsequent fiscal years. Payments made to managed care plans and 
41.13 	county-based purchasing plans under sections 256B.69~~, 256B.692,~~ and 256L.12 shall reflect 
41.14 	the rate changes described in this paragraph.
41.15 	(e) Any ratables effective before July 1, 2015, do not apply to autism early intensive 
41.16 	intervention benefits described in section 256B.0949.

41.17 	Sec. 29. Minnesota Statutes 2016, section 256B.77, subdivision 3, is amended to read:
41.18 		Subd. 3.Assurances to commissioner of health. A county authority that elects to 
41.19 	participate in a demonstration project for people with disabilities under this section is not 
41.20 	required to obtain a certificate of authority under chapter 62D or 62N. A county authority 
41.21 	that elects to participate in a demonstration project for people with disabilities under this 
41.22 	section must assure the commissioner of health that the requirements of chapters 62D ~~and~~,
41.23 	62N, and ~~section 256B.692, subdivision 2,~~ 62W are met. All enforcement and rulemaking 
41.24 	powers available under chapters 62D, 62J, 62M, 62N, and 62Q are granted to the 
41.25 	commissioner of health with respect to the county authorities that contract with the 
41.26 	commissioner to purchase services in a demonstration project for people with disabilities 
41.27 	under this section.

41.28 	Sec. 30. Minnesota Statutes 2016, section 256L.01, subdivision 7, is amended to read:
41.29 		Subd. 7.Participating entity. "Participating entity" means a health carrier as defined 
41.30 	in section 62A.01, subdivision 2; a county-based purchasing ~~plan established~~ organization 
41.31 	operating under ~~section 256B.692~~ chapter 62W; an accountable care organization or other 
41.32 	entity operating a health care delivery systems demonstration project authorized under 
41.33 	section 256B.0755; an entity operating a county integrated health care delivery network 
42.1 	pilot project authorized under section 256B.0756; or a network of health care providers 
42.2 	established to offer services under MinnesotaCare.

42.3 	Sec. 31. Minnesota Statutes 2016, section 256L.12, subdivision 9, is amended to read:
42.4 		Subd. 9.Rate setting; performance withholds. (a) Rates will be prospective, per capita, 
42.5 	where possible. The commissioner may allow health plans to arrange for inpatient hospital 
42.6 	services on a risk or nonrisk basis. The commissioner shall consult with an independent 
42.7 	actuary to determine appropriate rates.
42.8 	(b) For services rendered on or after January 1, 2004, the commissioner shall withhold 
42.9 	five percent of managed care plan payments and county-based purchasing plan payments 
42.10 	under this section pending completion of performance targets. Each performance target 
42.11 	must be quantifiable, objective, measurable, and reasonably attainable, except in the case 
42.12 	of a performance target based on a federal or state law or rule. Criteria for assessment of 
42.13 	each performance target must be outlined in writing prior to the contract effective date. 
42.14 	Clinical or utilization performance targets and their related criteria must consider 
42.15 	evidence-based research and reasonable interventions, when available or applicable to the 
42.16 	populations served, and must be developed with input from external clinical experts and 
42.17 	stakeholders, including managed care plans, county-based purchasing plans, and providers. 
42.18 	The managed care plan must demonstrate, to the commissioner's satisfaction, that the data 
42.19 	submitted regarding attainment of the performance target is accurate. The commissioner 
42.20 	shall periodically change the administrative measures used as performance targets in order 
42.21 	to improve plan performance across a broader range of administrative services. The 
42.22 	performance targets must include measurement of plan efforts to contain spending on health 
42.23 	care services and administrative activities. The commissioner may adopt plan-specific 
42.24 	performance targets that take into account factors affecting only one plan, such as 
42.25 	characteristics of the plan's enrollee population. The withheld funds must be returned no 
42.26 	sooner than July 1 and no later than July 31 of the following calendar year if performance 
42.27 	targets in the contract are achieved.
42.28 	(c) For services rendered on or after January 1, 2011, the commissioner shall withhold 
42.29 	an additional three percent of managed care plan or county-based purchasing plan payments 
42.30 	under this section. The withheld funds must be returned no sooner than July 1 and no later 
42.31 	than July 31 of the following calendar year. The return of the withhold under this paragraph 
42.32 	is not subject to the requirements of paragraph (b).
42.33 	(d) Effective for services rendered on or after January 1, 2011, through December 31, 
42.34 	2011, the commissioner shall include as part of the performance targets described in 
43.1 	paragraph (b) a reduction in the plan's emergency room utilization rate for state health care 
43.2 	program enrollees by a measurable rate of five percent from the plan's utilization rate for 
43.3 	the previous calendar year. Effective for services rendered on or after January 1, 2012, the 
43.4 	commissioner shall include as part of the performance targets described in paragraph (b) a 
43.5 	reduction in the health plan's emergency department utilization rate for medical assistance 
43.6 	and MinnesotaCare enrollees, as determined by the commissioner. For 2012, the reductions 
43.7 	shall be based on the health plan's utilization in 2009. To earn the return of the withhold 
43.8 	each subsequent year, the managed care plan or county-based purchasing plan must achieve 
43.9 	a qualifying reduction of no less than ten percent of the plan's utilization rate for medical 
43.10 	assistance and MinnesotaCare enrollees, excluding enrollees in programs described in 
43.11 	section 256B.69, subdivisions 23 and 28, compared to the previous measurement year, until 
43.12 	the final performance target is reached. When measuring performance, the commissioner 
43.13 	must consider the difference in health risk in a managed care or county-based purchasing 
43.14 	plan's membership in the baseline year compared to the measurement year, and work with 
43.15 	the managed care or county-based purchasing plan to account for differences that they agree 
43.16 	are significant.
43.17 	The withheld funds must be returned no sooner than July 1 and no later than July 31 of 
43.18 	the following calendar year if the managed care plan or county-based purchasing plan 
43.19 	demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate 
43.20 	was achieved. The commissioner shall structure the withhold so that the commissioner 
43.21 	returns a portion of the withheld funds in amounts commensurate with achieved reductions 
43.22 	in utilization less than the targeted amount.
43.23 	The withhold described in this paragraph shall continue for each consecutive contract 
43.24 	period until the plan's emergency room utilization rate for state health care program enrollees 
43.25 	is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance 
43.26 	and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the 
43.27 	health plans in meeting this performance target and shall accept payment withholds that 
43.28 	may be returned to the hospitals if the performance target is achieved.
43.29 	(e) Effective for services rendered on or after January 1, 2012, the commissioner shall 
43.30 	include as part of the performance targets described in paragraph (b) a reduction in the plan's 
43.31 	hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as 
43.32 	determined by the commissioner. To earn the return of the withhold each year, the managed 
43.33 	care plan or county-based purchasing plan must achieve a qualifying reduction of no less 
43.34 	than five percent of the plan's hospital admission rate for medical assistance and 
43.35 	MinnesotaCare enrollees, excluding enrollees in programs described in section 256B.69, 
44.1 	subdivisions 23 and 28, compared to the previous calendar year, until the final performance 
44.2 	target is reached. When measuring performance, the commissioner must consider the 
44.3 	difference in health risk in a managed care or county-based purchasing plan's membership 
44.4 	in the baseline year compared to the measurement year, and work with the managed care 
44.5 	or county-based purchasing plan to account for differences that they agree are significant.
44.6 	The withheld funds must be returned no sooner than July 1 and no later than July 31 of 
44.7 	the following calendar year if the managed care plan or county-based purchasing plan 
44.8 	demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization 
44.9 	rate was achieved. The commissioner shall structure the withhold so that the commissioner 
44.10 	returns a portion of the withheld funds in amounts commensurate with achieved reductions 
44.11 	in utilization less than the targeted amount.
44.12 	The withhold described in this paragraph shall continue until there is a 25 percent 
44.13 	reduction in the hospitals admission rate compared to the hospital admission rate for calendar 
44.14 	year 2011 as determined by the commissioner. Hospitals shall cooperate with the plans in 
44.15 	meeting this performance target and shall accept payment withholds that may be returned 
44.16 	to the hospitals if the performance target is achieved. The hospital admissions in this 
44.17 	performance target do not include the admissions applicable to the subsequent hospital 
44.18 	admission performance target under paragraph (f).
44.19 	(f) Effective for services provided on or after January 1, 2012, the commissioner shall 
44.20 	include as part of the performance targets described in paragraph (b) a reduction in the plan's 
44.21 	hospitalization rate for a subsequent hospitalization within 30 days of a previous 
44.22 	hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare 
44.23 	enrollees, as determined by the commissioner. To earn the return of the withhold each year, 
44.24 	the managed care plan or county-based purchasing plan must achieve a qualifying reduction 
44.25 	of the subsequent hospital admissions rate for medical assistance and MinnesotaCare 
44.26 	enrollees, excluding enrollees in programs described in section 256B.69, subdivisions 23
44.27 	and 28, of no less than five percent compared to the previous calendar year until the final 
44.28 	performance target is reached.
44.29 	The withheld funds must be returned no sooner than July 1 and no later than July 31 of 
44.30 	the following calendar year if the managed care plan or county-based purchasing plan 
44.31 	demonstrates to the satisfaction of the commissioner that a reduction in the subsequent 
44.32 	hospitalization rate was achieved. The commissioner shall structure the withhold so that 
44.33 	the commissioner returns a portion of the withheld funds in amounts commensurate with 
44.34 	achieved reductions in utilization less than the targeted amount.
45.1 	The withhold described in this paragraph must continue for each consecutive contract 
45.2 	period until the plan's subsequent hospitalization rate for medical assistance and 
45.3 	MinnesotaCare enrollees is reduced by 25 percent of the plan's subsequent hospitalization 
45.4 	rate for calendar year 2011. Hospitals shall cooperate with the plans in meeting this 
45.5 	performance target and shall accept payment withholds that must be returned to the hospitals 
45.6 	if the performance target is achieved.
45.7 	(g) A managed care plan or a county-based purchasing plan ~~under section 256B.692~~
45.8 	may include as admitted assets under section 62D.044 any amount withheld under this 
45.9 	section that is reasonably expected to be returned.

45.10 	Sec. 32. Minnesota Statutes 2016, section 256L.121, subdivision 3, is amended to read:
45.11 		Subd. 3.Coordination with state-administered health programs. The commissioner 
45.12 	shall coordinate the administration of the MinnesotaCare program with medical assistance 
45.13 	to maximize efficiency and improve the continuity of care. This includes, but is not limited 
45.14 	to:
45.15 	(1) establishing geographic areas for MinnesotaCare that are consistent with the 
45.16 	geographic areas of the medical assistance program, within which participating entities may 
45.17 	offer health plans;
45.18 	(2) requiring, as a condition of participation in MinnesotaCare, participating entities to 
45.19 	also participate in the medical assistance program;
45.20 	(3) complying with sections 256B.69, subdivision 3a~~; 256B.692, subdivision 1;~~, and 
45.21 	256B.694~~,~~ when contracting with MinnesotaCare participating entities;
45.22 	(4) providing MinnesotaCare enrollees, to the extent possible, with the option to remain 
45.23 	in the same health plan and provider network, if they later become eligible for medical 
45.24 	assistance or coverage through MNsure and if, in the case of becoming eligible for medical 
45.25 	assistance, the enrollee's MinnesotaCare health plan is also a medical assistance health plan 
45.26 	in the enrollee's county of residence; and
45.27 	(5) establishing requirements and criteria for selection that ensure that covered health 
45.28 	care services will be coordinated with local public health services, social services, long-term 
45.29 	care services, mental health services, and other local services affecting enrollees' health, 
45.30 	access, and quality of care.

APPENDIX 

Repealed Minnesota Statutes: 18-6385 

256B.692 COUNTY-BASED PURCHASING.Subdivision 1.In general. 
County boards or groups of county boards may elect to purchase or provide health care services on behalf of persons eligible for medical assistance who would otherwise be required to or may elect to participate in the prepaid medical assistance program according to section 256B.69. Counties that elect to purchase or provide health care under this section must provide all services included in prepaid managed care programs according to section 256B.69, subdivisions 1 to 22. County-based purchasing under this section is governed by section 256B.69, unless otherwise provided for under this section. 

Subd. 2.Duties of commissioner of health. 
(a) Notwithstanding chapters 62D and 62N, a county that elects to purchase medical assistance in return for a fixed sum without regard to the frequency or extent of services furnished to any particular enrollee is not required to obtain a certificate of authority under chapter 62D or 62N. The county board of commissioners is the governing body of a county-based purchasing program. In a multicounty arrangement, the governing body is a joint powers board established under section 471.59. 

(b) A county that elects to purchase medical assistance services under this section must satisfy the commissioner of health that the requirements for assurance of consumer protection, provider protection, and fiscal solvency of chapter 62D, applicable to health maintenance organizations will be met according to the following schedule: 

(1) for a county-based purchasing plan approved on or before June 30, 2008, the plan must have in reserve: 

(i) at least 50 percent of the minimum amount required under chapter 62D as of January 1, 2010; 

(ii) at least 75 percent of the minimum amount required under chapter 62D as of January 1, 2011; 

(iii) at least 87.5 percent of the minimum amount required under chapter 62D as of January 1, 2012; and 

(iv) at least 100 percent of the minimum amount required under chapter 62D as of January 1, 2013; and 

(2) for a county-based purchasing plan first approved after June 30, 2008, the plan must have in reserve: 

(i) at least 50 percent of the minimum amount required under chapter 62D at the time the plan begins enrolling enrollees; 

(ii) at least 75 percent of the minimum amount required under chapter 62D after the first full calendar year; 

(iii) at least 87.5 percent of the minimum amount required under chapter 62D after the second full calendar year; and 

(iv) at least 100 percent of the minimum amount required under chapter 62D after the third full calendar year. 

(c) Until a plan is required to have reserves equaling at least 100 percent of the minimum amount required under chapter 62D, the plan may demonstrate its ability to cover any losses by satisfying the requirements of chapter 62N. A county-based purchasing plan must also assure the commissioner of health that the requirements of sections 62J.041; 62J.48; 62J.71 to 62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 62Q, including sections 62Q.075; 62Q.1055; 62Q.106; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.68 to 62Q.72; and 72A.201 will be met. 

(d) All enforcement and rulemaking powers available under chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the commissioner of health with respect to counties that purchase medical assistance services under this section. 

(e) The commissioner, in consultation with county government, shall develop administrative and financial reporting requirements for county-based purchasing programs relating to sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 62N.31, and other sections as necessary, that are specific to county administrative, accounting, and reporting systems and consistent with other statutory requirements of counties. 

(f) The commissioner shall collect from a county-based purchasing plan under this section the following fees: 

(1) fees attributable to the costs of audits and other examinations of plan financial operations. These fees are subject to the provisions of Minnesota Rules, part 4685.2800, subpart 1, item F; and 

(2) an annual fee of $21,500, to be paid by June 15 of each calendar year. 

All fees collected under this paragraph shall be deposited in the state government special revenue fund. 

Subd. 3.Requirements of the county board. 
A county board that intends to purchase or provide health care under this section, which may include purchasing all or part of these services from health plans or individual providers on a fee-for-service basis, or providing these services directly, must demonstrate the ability to follow and agree to the following requirements: 

(1) purchase all covered services for a fixed payment from the state that does not exceed the estimated state and federal cost that would have occurred under the prepaid medical assistance program; 

(2) ensure that covered services are accessible to all enrollees and that enrollees have a reasonable choice of providers, health plans, or networks when possible. If the county is also a provider of service, the county board shall develop a process to ensure that providers employed by the county are not the sole referral source and are not the sole provider of health care services if other providers, which meet the same quality and cost requirements are available; 

(3) issue payments to participating vendors or networks in a timely manner; 

(4) establish a process to ensure and improve the quality of care provided; 

(5) provide appropriate quality and other required data in a format required by the state; 

(6) provide a system for advocacy, enrollee protection, and complaints and appeals that is independent of care providers or other risk bearers and complies with section 256B.69; 

(7) ensure that the implementation and operation of the Minnesota senior health options demonstration project and the Minnesota disability health options demonstration project, authorized under section 256B.69, subdivision 23, will not be impeded; 

(8) ensure that all recipients that are enrolled in the prepaid medical assistance program will be transferred to county-based purchasing without utilizing the department's fee-for-service claims payment system; 

(9) ensure that all recipients who are required to participate in county-based purchasing are given sufficient information prior to enrollment in order to make informed decisions; and 

(10) ensure that the state and the medical assistance recipients will be held harmless for the payment of obligations incurred by the county if the county, or a health plan providing services on behalf of the county, or a provider participating in county-based purchasing becomes insolvent, and the state has made the payments due to the county under this section. 

Subd. 4.Payments to counties. 
The commissioner shall pay counties that are purchasing or providing health care under this section a per capita payment for all enrolled recipients. Payments shall not exceed payments that otherwise would have been paid to health plans under medical assistance for that county or region. This payment is in addition to any administrative allocation to counties for education, enrollment, and advocacy. The state of Minnesota and the United States Department of Health and Human Services are not liable for any costs incurred by a county that exceed the payments to the county made under this subdivision. A county whose costs exceed the payments made by the state, or any affected enrollees or creditors of that county, shall have no rights under chapter 61B or section 62D.181. A county may assign risk for the cost of care to a third party. 

Subd. 4a.Expenditure of revenues. 
(a) A county that has elected to participate in a county-based purchasing plan under this section shall use any excess revenues over expenses that are received by the county and are not needed (1) for capital reserves under subdivision 2, (2) to increase payments to providers, or (3) to repay county investments or contributions to the county-based purchasing plan, for prevention, early intervention, and health care programs, services, or activities. 

(b) A county-based purchasing plan under this section is subject to the unreasonable expense provisions of section 62D.19. 

Subd. 5.County proposals. 
(a) A county board that wishes to purchase or provide health care under this section must submit a preliminary proposal that substantially demonstrates the county's ability to meet all the requirements of this section in response to criteria for proposals issued by the department. Counties submitting preliminary proposals must establish a local planning process that involves input from medical assistance recipients, recipient advocates, providers and representatives of local school districts, labor, and tribal government to advise on the development of a final proposal and its implementation. 

(b) The county board must submit a final proposal that demonstrates the ability to meet all the requirements of this section. 

(c) For a county in which the prepaid medical assistance program is in existence, the county board must submit a preliminary proposal at least 15 months prior to termination of health plan contracts in that county and a final proposal six months prior to the health plan contract termination date in order to begin enrollment after the termination. Nothing in this section shall impede or delay implementation or continuation of the prepaid medical assistance program in counties for which the board does not submit a proposal, or submits a proposal that is not in compliance with this section. 

Subd. 6.Commissioner's authority. 
The commissioner may: 

(1) reject any preliminary or final proposal that: 

(i) substantially fails to meet the requirements of this section, or 

(ii) the commissioner determines would substantially impair the state's ability to purchase health care services in other areas of the state, or 

(iii) would substantially impair an enrollee's choice of care systems when reasonable choice is possible, or 

(iv) would substantially impair the implementation and operation of the Minnesota senior health options demonstration project authorized under section 256B.69, subdivision 23; and 

(2) assume operation of a county's purchasing of health care for enrollees in medical assistance in the event that the contract with the county is terminated. 

Subd. 7.Dispute resolution. 
In the event the commissioner rejects a proposal under subdivision 6, the county board may request the recommendation of a three-person mediation panel. The commissioner shall resolve all disputes after taking into account the recommendations of the mediation panel. The panel shall be composed of one designee of the president of the Association of Minnesota Counties, one designee of the commissioner of human services, and one person selected jointly by the designee of the commissioner of human services and the designee of the Association of Minnesota Counties. Within a reasonable period of time before the hearing, the panelists must be provided all documents and information relevant to the mediation. The parties to the mediation must be given 30 days' notice of a hearing before the mediation panel. 

Subd. 8.Appeals. 
A county that conducts county-based purchasing shall be considered to be a prepaid health plan for purposes of section 256.045. 

Subd. 9.Federal approval. 
The commissioner shall request any federal waivers and federal approval required to implement this section. County-based purchasing shall not be implemented without obtaining all federal approval required to maintain federal matching funds in the medical assistance program.