1.1                          A bill for an act 
  1.2             relating to health; modifying prior authorization 
  1.3             requirements for health care services; establishing 
  1.4             requirements for provider contracting; modifying 
  1.5             provisions for payment of claims; regulating 
  1.6             utilization profiling; requiring certain disclosures; 
  1.7             amending Minnesota Statutes 2002, sections 62M.07; 
  1.8             62Q.74; 62Q.75, subdivision 2, by adding a 
  1.9             subdivision; proposing coding for new law in Minnesota 
  1.10            Statutes, chapter 62Q; repealing Minnesota Statutes 
  1.11            2002, section 62Q.745. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 2002, section 62M.07, is 
  1.14  amended to read: 
  1.15     62M.07 [PRIOR NOTIFICATION OR AUTHORIZATION OF SERVICES.] 
  1.16     (a) Utilization review organizations conducting prior 
  1.17  notification or authorization of services must have written 
  1.18  standards that meet at a minimum the following requirements: 
  1.19     (1) written procedures and criteria used to determine 
  1.20  whether care is appropriate, reasonable, or medically necessary; 
  1.21     (2) a system for providing prompt notification of its 
  1.22  determinations to enrollees and providers and for notifying the 
  1.23  provider, enrollee, or enrollee's designee of appeal procedures 
  1.24  under clause (4); 
  1.25     (3) compliance with section 62M.05, subdivisions 3a and 3b, 
  1.26  regarding time frames for approving and disapproving prior 
  1.27  authorization requests; 
  1.28     (4) written procedures for appeals of denials of prior 
  2.1   authorization which specify the responsibilities of the enrollee 
  2.2   and provider, and which meet the requirements of sections 62M.06 
  2.3   and 72A.285, regarding release of summary review findings; and 
  2.4      (5) procedures to ensure confidentiality of 
  2.5   patient-specific information, consistent with applicable law. 
  2.6      (b) No utilization review organization, health plan 
  2.7   company, or claims administrator may conduct or require prior 
  2.8   authorization of emergency confinement or emergency treatment.  
  2.9   The enrollee or the enrollee's authorized representative may be 
  2.10  required to notify the health plan company, claims 
  2.11  administrator, or utilization review organization as soon after 
  2.12  the beginning of the emergency confinement or emergency 
  2.13  treatment as reasonably possible. 
  2.14     (c) If prior notification or prior authorization for a 
  2.15  health care service is required, the utilization review 
  2.16  organization, health plan company, or claim administrator must 
  2.17  provide a system for prompt provider access without unreasonable 
  2.18  delay by telephone voice mail or through electronic e-mail, Web 
  2.19  site, or Internet communications, 24 hours a day, seven days a 
  2.20  week, allowing the provider to submit the requested prior 
  2.21  notification information or to request prior authorization of a 
  2.22  health care service.  A utilization review organization, health 
  2.23  plan company, or claim administrator may not charge a provider 
  2.24  any fee, including a user fee of an electronic communication 
  2.25  system, for submitting prior notification information or 
  2.26  requesting prior authorization of a health care service. 
  2.27     (d) In the event that a health care service subject to 
  2.28  prior authorization by a utilization review organization, health 
  2.29  plan company, or claim administrator is recommended by a health 
  2.30  care provider but is not authorized by the utilization review 
  2.31  organization, health plan company, or claim administrator, the 
  2.32  determination not to authorize the service is a medical decision 
  2.33  by the utilization review organization, health plan company, or 
  2.34  claim administrator and the utilization review organization, 
  2.35  health plan company, or claim administrator is subject to civil 
  2.36  liability for the decision in the same manner as a health care 
  3.1   provider.  
  3.2      Sec. 2.  [62Q.732] [CITATION.] 
  3.3      Sections 62Q.732 to 62Q.752 may be cited as the "Minnesota 
  3.4   Fair Health Plan Contracting Act." 
  3.5      Sec. 3.  [62Q.733] [DEFINITIONS.] 
  3.6      Subdivision 1.  [APPLICABILITY.] For purposes of sections 
  3.7   62Q.732 to 62Q.752, the following definitions apply.  
  3.8      Subd. 2.  [CONTRACT.] "Contract" means a written agreement 
  3.9   between a health care provider and a health plan company to 
  3.10  provide health care services.  
  3.11     Subd. 3.  [HEALTH CARE PROVIDER OR PROVIDER.] "Health care 
  3.12  provider" or "provider" means: 
  3.13     (1) a physician, chiropractor, dentist, or other provider 
  3.14  as defined under section 62J.03; 
  3.15     (2) a hospital licensed under chapter 144, ambulatory 
  3.16  surgical treatment center, pharmacy, long-term care facility, or 
  3.17  other facility that is licensed or otherwise authorized to 
  3.18  deliver health care services; or 
  3.19     (3) an independent practice association or 
  3.20  physician-hospital organization. 
  3.21     Subd. 4.  [HEALTH PLAN COMPANY.] "Health plan company" 
  3.22  means: 
  3.23     (1) a health maintenance organization operating under 
  3.24  chapter 62D; 
  3.25     (2) a community integrated service network operating under 
  3.26  chapter 62N; 
  3.27     (3) a preferred provider organization as defined in section 
  3.28  145.61, subdivision 4c; or 
  3.29     (4) an insurance company licensed under chapter 60A, 
  3.30  nonprofit health service corporation operating under chapter 
  3.31  62C, fraternal benefit society operating under chapter 64B, or 
  3.32  any other entity that establishes, operates, or maintains a 
  3.33  health benefit plan or network of health care providers where 
  3.34  the providers have entered into a contract with the entity to 
  3.35  provide health care services.  
  3.36     Subd. 5.  [TOTAL EXPECTED PAYMENT.] "Total expected payment"
  4.1   means the total financial compensation to be paid to a health 
  4.2   care provider for providing a health care service as determined 
  4.3   by the contract between the health plan company and the 
  4.4   provider, including withheld amounts and any amount for which 
  4.5   the patient or other third party may be obligated to pay under 
  4.6   the contract. 
  4.7      Sec. 4.  [62Q.734] [EXEMPTION.] 
  4.8      Sections 62Q.735 to 62Q.737, 62Q.739, 62Q.74, 62Q.75, 
  4.9   subdivision 1, and 62Q.751 do not apply to health plan companies 
  4.10  whose annual Minnesota health premium revenues are less than 
  4.11  three percent of the total annual Minnesota health premium 
  4.12  revenues, as measured by the assessment base of the Minnesota 
  4.13  comprehensive health association.  For purposes of this 
  4.14  percentage calculation, a health plan company's premiums include 
  4.15  the Minnesota health premium revenues of its affiliates. 
  4.16     Sec. 5.  [62Q.735] [PROVIDER CONTRACTING PROCEDURES.] 
  4.17     Subdivision 1.  [CONTRACT DISCLOSURE.] (a) Before requiring 
  4.18  a health care provider to sign a contract, a health plan company 
  4.19  shall give to the provider a complete copy of the proposed 
  4.20  contract, including: 
  4.21     (1) all attachments and exhibits; 
  4.22     (2) operating manuals; 
  4.23     (3) a detailed description of the health plan company's 
  4.24  health service coding standards and requirements for procedures 
  4.25  and diagnoses with modifiers, multiple procedures, and correct 
  4.26  coding edits; and 
  4.27     (4) all guidelines and treatment parameters incorporated or 
  4.28  referenced in the contract. 
  4.29     (b) The health plan company shall make available to the 
  4.30  provider a method or process that allows the provider to 
  4.31  determine the total expected payment amounts for each health 
  4.32  care service to be provided under the contract. 
  4.33     (c) The health plan company shall make available to the 
  4.34  provider, upon request, the specific total expected payment 
  4.35  amounts for each health care service to be provided under the 
  4.36  contract. 
  5.1      (d) The provider shall be allowed 90 days to review the 
  5.2   complete contract before being required to sign the contract.  
  5.3      Subd. 2.  [PROPOSED AMENDMENTS.] (a) Any amendment or 
  5.4   change in the terms of an existing contract between a health 
  5.5   plan company and a provider must be disclosed to the provider at 
  5.6   least 90 days prior to the effective date of the proposed 
  5.7   change, with the exception of amendments required of the health 
  5.8   plan company by law or governmental regulatory authority, when 
  5.9   notice shall be given to the provider when the requirement is 
  5.10  made known to the health plan company. 
  5.11     (b) Any amendment or change in the contract that alters the 
  5.12  financial reimbursement or alters the written contractual 
  5.13  policies and procedures governing the relationship between the 
  5.14  provider and the health plan company must be disclosed to the 
  5.15  provider not less than 90 days before the effective date of the 
  5.16  proposed change and the provider must have the opportunity to 
  5.17  terminate the contract before the amendment or change is deemed 
  5.18  to be in effect. 
  5.19     (c) By mutual consent, evidenced in writing in amendments 
  5.20  separate from the base contract and not contingent on 
  5.21  participation, the parties may waive the disclosure requirements 
  5.22  under paragraphs (a) and (b). 
  5.23     Sec. 6.  [62Q.736] [PAYMENT RATES.] 
  5.24     A formal or informal contract, term, condition, or policy 
  5.25  may not mandate or require a health care provider to accept from 
  5.26  the health plan company any payment amounts for services agreed 
  5.27  to in a contract with any other health plan company or any 
  5.28  payment amounts other than those stated in the contract between 
  5.29  the health plan company and the health care provider.  Nothing 
  5.30  in this section shall be construed to prevent subrogation. 
  5.31     Sec. 7.  [62Q.737] [SERVICE CODE CHANGES.] 
  5.32     (a) For purposes of this section, "service code" means 
  5.33  current procedural terminology (CPT), current dental terminology 
  5.34  (CDT), ICD-CM, diagnosis-related groups (DRGs), or other coding 
  5.35  system. 
  5.36     (b) A health plan company shall not change a service code 
  6.1   properly submitted by a health care provider.  The health plan 
  6.2   company shall determine the manner in which it adjudicates 
  6.3   claims and may limit the service codes it pays for based upon 
  6.4   factors recognized by a service code. 
  6.5      (c) Notwithstanding paragraph (b), a health plan company 
  6.6   may correct an error in a submitted claim that prevents the 
  6.7   claim from being processed, provided that the health plan 
  6.8   company: 
  6.9      (1) notifies the provider of the proposed change and reason 
  6.10  for the proposed change; 
  6.11     (2) offers the provider the opportunity to submit 
  6.12  additional documentation and material to support the submitted 
  6.13  code; and 
  6.14     (3) offers the provider the opportunity to appeal any 
  6.15  changes.  
  6.16     Sec. 8.  [62Q.738] [RECOUPMENTS.] 
  6.17     (a) A health plan company shall provide a health care 
  6.18  provider with a written invoice explaining any recoupment, 
  6.19  including the name of the patient, the date of the service, the 
  6.20  service code, the payment amount, the details concerning the 
  6.21  reasons for the recoupment, and an explanation of the appeal 
  6.22  process. 
  6.23     (b) Upon receiving the written invoice, the provider has 30 
  6.24  days to either appeal the proposed recoupment or to pay the 
  6.25  invoice.  If the recoupment amount in question exceeds $100, the 
  6.26  health plan company shall not recoup the amount before the 
  6.27  expiration of the 30-day notice period or completion of the 
  6.28  appeal process unless the provider consents to the recoupment. 
  6.29     (c) If the provider chooses to appeal the proposed 
  6.30  recoupment, and, upon appeal, the proposed recoupment is 
  6.31  determined to be appropriate, the provider must pay the 
  6.32  recoupment within 30 days of receiving the notice of the final 
  6.33  appeal's decision.  If the provider fails to make the required 
  6.34  recoupment payment within the required time period or fails to 
  6.35  appeal the proposed recoupment within the required time period, 
  6.36  the health plan company may offset future payments to effectuate 
  7.1   the recoupment.  
  7.2      (d) Any attempts by the health plan company to recoup 
  7.3   payments shall be limited to the lesser of six months after a 
  7.4   health plan company has paid a claim or the period of time 
  7.5   required in the contract for the submission of initial claims, 
  7.6   except in the case of fraud or intentional misrepresentation by 
  7.7   the health care provider. 
  7.8      Sec. 9.  [62Q.739] [UNILATERAL TERMS PROHIBITED.] 
  7.9      (a) A contract between a health plan company and a health 
  7.10  care provider shall not contain or require unilateral terms 
  7.11  regarding termination, indemnification, or arbitration.  These 
  7.12  provisions shall apply equally to both the health plan company 
  7.13  and the provider.  
  7.14     (b) A health plan company may not terminate or fail to 
  7.15  renew a health care provider's contract unless the company has 
  7.16  given the provider a written notice specifying the reason for 
  7.17  the termination or nonrenewal 120 days before the effective 
  7.18  date, unless the termination or nonrenewal is deemed necessary 
  7.19  to protect the public health. 
  7.20     Sec. 10.  Minnesota Statutes 2002, section 62Q.74, is 
  7.21  amended to read: 
  7.22     62Q.74 [NETWORK SHADOW CONTRACTING.] 
  7.23     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  7.24  section, the terms defined in this subdivision have the meanings 
  7.25  given. 
  7.26     (b) "category of coverage" means one of the following types 
  7.27  of health-related coverage: 
  7.28     (1) health; 
  7.29     (2) no-fault automobile medical benefits; or 
  7.30     (3) workers' compensation medical benefits. 
  7.31     (c) "Health care provider" or "provider" means an 
  7.32  individual licensed, registered, or regulated by the board of 
  7.33  medical practice under chapter 147, a chiropractor licensed 
  7.34  under sections 148.01 to 148.106, a dentist licensed under 
  7.35  chapter 150A, or a hospital licensed under chapter 144. 
  7.36     (d) "Network organization" means a preferred provider 
  8.1   organization as defined in section 145.61, subdivision 4c; a 
  8.2   managed care organization as defined in section 62Q.01, 
  8.3   subdivision 5; or other entity that uses or consists of a 
  8.4   network of health care providers. 
  8.5      Subd. 2.  [PROVIDER CONSENT REQUIRED.] (a) No network 
  8.6   organization health plan company shall require a health care 
  8.7   provider to participate in a network under a category of 
  8.8   coverage that differs from the category or categories of 
  8.9   coverage to which the existing contract between the network 
  8.10  organization health plan company and the provider applies, 
  8.11  without the affirmative consent of the provider obtained under 
  8.12  subdivision 3.  
  8.13     (b) This section does not apply to situations in which the 
  8.14  network organization wishes No health plan company shall 
  8.15  require, as a condition of participation in any health plan, 
  8.16  product, or other arrangement, the provider to participate in a 
  8.17  new or different health plan, product, or other arrangement 
  8.18  within a category of coverage that is already provided for in an 
  8.19  existing contract between the network organization and the 
  8.20  provider differs in its terms and conditions from the terms and 
  8.21  conditions of the existing contract between a health plan 
  8.22  company and a health care provider without the affirmative 
  8.23  consent of the provider obtained under subdivision 3.  This 
  8.24  paragraph does not apply to participation in health plan 
  8.25  products or other arrangements that provide health care services 
  8.26  to government programs, including the prepaid medical assistance 
  8.27  program, the MinnesotaCare program, the prepaid general 
  8.28  assistance medical care program, and the demonstration project 
  8.29  for people with disabilities. 
  8.30     (c) Compliance with this section may not be waived in a 
  8.31  contract or otherwise. 
  8.32     Subd. 3.  [CONSENT PROCEDURE.] (a) The network organization 
  8.33  health plan company, if it wishes to apply an existing contract 
  8.34  with a provider to a different category of coverage or health 
  8.35  plan, product, or other arrangement within a category of 
  8.36  coverage, shall first notify the provider in writing.  The 
  9.1   written notice must include at least the following: 
  9.2      (1) the network organization's health plan company's name, 
  9.3   address, and telephone number, and the name of the specific 
  9.4   network, if it differs from that of the network organization; 
  9.5      (2) a description of the proposed new category of 
  9.6   coverage or health plan, product, or other arrangement within a 
  9.7   category of coverage; 
  9.8      (3) the names of all payers expected by the network 
  9.9   organization health plan company to use the network for the new 
  9.10  category of coverage or health plan, product, or other 
  9.11  arrangement within a category of coverage; 
  9.12     (4) the approximate number of current enrollees of the 
  9.13  network organization health plan company in that category of 
  9.14  coverage or health plan, product, or other arrangement within a 
  9.15  category of coverage within the provider's geographical area; 
  9.16     (5) a disclosure of all contract terms of the proposed new 
  9.17  category of coverage or health plan, product, or other 
  9.18  arrangement within a category of coverage, including the 
  9.19  discount or reduced fees, care guidelines, utilization review 
  9.20  criteria, prior notification process, prior authorization 
  9.21  process, and dispute resolution process; 
  9.22     (6) a form for the provider's convenience in accepting or 
  9.23  declining participation in the proposed new category of coverage 
  9.24  or health plan, product, or other arrangement within a category 
  9.25  of coverage, provided that the provider need not use that form 
  9.26  in responding; and 
  9.27     (7) a statement informing the provider of the provisions of 
  9.28  paragraph (b). 
  9.29     (b) Unless the provider has affirmatively agreed to 
  9.30  participate within 60 days after the postmark date of the 
  9.31  notice, the provider is deemed to have not accepted the proposed 
  9.32  new category of coverage or health plan, product, or other 
  9.33  arrangement within a category of coverage. 
  9.34     Subd. 4.  [CONTRACT TERMINATION RESTRICTED.] A network 
  9.35  organization health plan company must not terminate an existing 
  9.36  contract with a provider, or fail to honor the contract in good 
 10.1   faith, based solely on the provider's decision not to accept a 
 10.2   proposed new category of coverage or health plan, product, or 
 10.3   other arrangement within a category of coverage.  The most 
 10.4   recent agreed-upon contractual obligations remain in force until 
 10.5   the existing contract's renewal or termination date. 
 10.6      Subd. 5.  [REMEDY.] If a network organization health plan 
 10.7   company violates this section by reimbursing a provider as if 
 10.8   the provider had agreed under this section to participate in the 
 10.9   network under a category of coverage or health plan, product, or 
 10.10  other arrangement within a category of coverage to which the 
 10.11  provider has not agreed, the provider has a cause of action 
 10.12  against the network organization health plan company to recover 
 10.13  two times the difference between the reasonable charges for 
 10.14  claims affected by the violation and the amounts actually paid 
 10.15  to the provider.  The provider is also entitled to recover 
 10.16  costs, disbursements, and reasonable attorney fees. 
 10.17     Sec. 11.  Minnesota Statutes 2002, section 62Q.75, is 
 10.18  amended by adding a subdivision to read: 
 10.19     Subd. 1a.  [SUBMITTING CLAIMS.] A health care provider must 
 10.20  submit to a health plan company an initial claim for health care 
 10.21  services within a reasonable period as provided in the contract 
 10.22  or within one year and any final claims within 15 months of the 
 10.23  date of service.  
 10.24     Sec. 12.  Minnesota Statutes 2002, section 62Q.75, 
 10.25  subdivision 2, is amended to read: 
 10.26     Subd. 2.  [CLAIMS PAYMENTS.] (a) This section applies to 
 10.27  clean claims submitted to a health plan company or third-party 
 10.28  administrator for services provided by any: 
 10.29     (1) health care provider, except a provider licensed under 
 10.30  chapter 151; 
 10.31     (2) home health care provider, as defined in section 
 10.32  144A.43, subdivision 4; or 
 10.33     (3) health care facility. 
 10.34  All health plan companies and third-party administrators must 
 10.35  pay or deny claims that are clean claims within 30 calendar days 
 10.36  after the date upon which the health plan company or third-party 
 11.1   administrator received the claim care provider submitted the 
 11.2   claim.  Upon a determination that a claim is not clean or 
 11.3   eligible, the health plan company or third-party administrator 
 11.4   must inform the provider of the determination and the reasons 
 11.5   preventing timely payment within 30 calendar days after the date 
 11.6   upon which the health care provider submitted the claim.  This 
 11.7   paragraph does not apply to a claim that is subject to an 
 11.8   existing fraud investigation. 
 11.9      (b) If a health plan company or third-party administrator 
 11.10  does not pay or deny a clean claim within the period provided in 
 11.11  paragraph (a), the health plan company or third-party 
 11.12  administrator must pay interest on the claim for the period 
 11.13  beginning on the day after the required payment date specified 
 11.14  in paragraph (a) and ending on the date on which the health plan 
 11.15  company or third-party administrator makes the payment or denies 
 11.16  the claim.  In any payment, the health plan company or 
 11.17  third-party administrator must itemize any interest payment 
 11.18  being made separately from other payments being made for 
 11.19  services provided.  The health plan company or third-party 
 11.20  administrator may, at its discretion, require the health care 
 11.21  provider shall not be required to bill the health plan company 
 11.22  or third-party administrator for the interest required under 
 11.23  this section before any interest payment is made.  Payment of 
 11.24  interest must be paid to the provider automatically with the 
 11.25  original claim.  
 11.26     (c) The rate of interest paid by a health plan company or 
 11.27  third-party administrator under this subdivision shall be 1.5 
 11.28  percent per month or any part of a month. 
 11.29     (d) A health plan company or third-party administrator is 
 11.30  not required to make an interest payment on a claim for which 
 11.31  payment has been delayed for purposes of reviewing potentially 
 11.32  fraudulent or abusive billing practices.  If payment of a claim 
 11.33  is delayed, the health plan company or third-party administrator 
 11.34  must promptly inform the provider of the delay and the reasons 
 11.35  for it.  
 11.36     (e) The commissioner may not assess a financial 
 12.1   administrative penalty against a health plan company for 
 12.2   violation of this subdivision. 
 12.3      Sec. 13.  [62Q.751] [UTILIZATION PROFILING.] 
 12.4      Subdivision 1.  [DISCLOSURE.] Any health plan company or 
 12.5   health plan sponsor that uses data, or whose data is used, for 
 12.6   utilization profiling as a method of differentiating providers, 
 12.7   including, but not limited to, distinctions relating to cost of 
 12.8   service, quality of care, or differences in reimbursements or as 
 12.9   a requirement for continued participation in the health plan 
 12.10  company's provider network shall make available to participating 
 12.11  providers and their agents at least 90 days before its release 
 12.12  the following information: 
 12.13     (1) a description of the methodology used in profiling so 
 12.14  that providers can clearly understand why and how they are 
 12.15  affected, including: 
 12.16     (i) a list of the codes measured; 
 12.17     (ii) a provider's personal frequency data within each code 
 12.18  so that the accuracy of the data may be verified; and 
 12.19     (iii) an individual provider's representation of scoring 
 12.20  that compares the provider to classification points established 
 12.21  in the profiling methodology; and 
 12.22     (2) a list of factors affecting a provider's profile not 
 12.23  included in the profiling methodology. 
 12.24     Subd. 2.  [RELEASE OF DATA; APPEAL.] Before a health plan 
 12.25  company or health plan sponsor may release any data covered by 
 12.26  this section, the health plan company or plan sponsor must 
 12.27  provide the subject of the data the opportunity to provide the 
 12.28  health plan company or plan sponsor with information supporting 
 12.29  or critical to the methodology procedure or information utilized 
 12.30  in assembling the data to be released.  The health plan company 
 12.31  or plan sponsor must consider any information provided by the 
 12.32  data subject and provide a written response to the data subject 
 12.33  before releasing the data.  A health plan company or plan 
 12.34  sponsor must provide the subject of the data with a timely 
 12.35  appeal process if the subject of the data, after receiving the 
 12.36  health plan company or plan sponsor's written response, 
 13.1   continues to contest the methodology, procedure, or information 
 13.2   utilized by the health plan company or plan sponsor. 
 13.3      Sec. 14.  [62Q.752] [TOTAL EXPECTED PAYMENT DISCLOSURE.] 
 13.4      A health plan company shall make available to all persons 
 13.5   bearing any financial risk for health services provided under 
 13.6   the health plan company benefit plan, product, or other 
 13.7   arrangement the total expected payment for health services.  
 13.8   Persons having a choice of health care providers may receive the 
 13.9   total expected payment information applicable to multiple 
 13.10  providers of their choice. 
 13.11     Sec. 15.  [REPEALER.] 
 13.12     Minnesota Statutes 2002, section 62Q.745, is repealed.