1.1                          A bill for an act
  1.2             relating to health; modifying MinnesotaCare; 
  1.3             prohibiting the collection of individual-level data; 
  1.4             allowing for-profit integrated networks; modifying 
  1.5             eligibility and premiums for the MinnesotaCare 
  1.6             program; repealing the regulated all-payer option, 
  1.7             growth limits, certain insurance provisions and other 
  1.8             initiatives; authorizing and regulating medical care 
  1.9             savings accounts; requiring malpractice reform; 
  1.10            amending Minnesota Statutes 1994, sections 62A.65, 
  1.11            subdivisions 3 and 7; 62J.04, subdivision 3; 62J.045, 
  1.12            subdivision 3; 62J.06; 62J.09, subdivision 1a; 62J.17, 
  1.13            subdivision 1; 62J.22; 62J.30, subdivisions 1, 3, 6, 
  1.14            7, 10, 11, and by adding a subdivision; 62J.31, 
  1.15            subdivision 1; 62J.35, subdivision 1; 62J.45, 
  1.16            subdivisions 1, 2, 4, 5, and 10; 62J.48; 62J.65; 
  1.17            62L.08, subdivision 8; 62N.05, subdivision 2; 62N.06, 
  1.18            subdivision 1; 62N.25, subdivisions 5 and 7; 62N.381, 
  1.19            subdivision 2; 62Q.01, subdivisions 3 and 4; 62Q.165; 
  1.20            62Q.18, subdivision 7; 62Q.30; 62Q.41; 256.9352, 
  1.21            subdivision 3, and by adding a subdivision; 256.9354, 
  1.22            subdivision 5; 256.9358, by adding a subdivision; 
  1.23            290.01, subdivisions 19a, 19b, and 19d; 549.01; 
  1.24            595.02, subdivision 5; 604.02, by adding a 
  1.25            subdivision; 604.11, by adding a subdivision; 
  1.26            proposing coding for new law in Minnesota Statutes, 
  1.27            chapters 62Q; and 548; proposing coding for new law as 
  1.28            Minnesota Statutes, chapter 62S; repealing Minnesota 
  1.29            Statutes 1994, sections 13.99, subdivision 19a; 
  1.30            62A.021; 62J.017; 62J.04, subdivisions 1, 1a, 7, and 
  1.31            9; 62J.15; 62J.152; 62J.156; 62J.32, subdivision 4; 
  1.32            62J.34; 62J.54, subdivision 4; 62J.55; 62L.08, 
  1.33            subdivision 11; 62P.01; 62P.02; 62P.03; 62P.04; 
  1.34            62P.05; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 
  1.35            62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 
  1.36            62P.29; 62P.31; 62P.33; 62Q.09; 62Q.18, subdivisions 
  1.37            2, 3, 4, 6, 8, and 9; and 144.1481; Laws 1992, chapter 
  1.38            549, article 3, section 19; Laws 1994, chapter 625, 
  1.39            article 5, section 7. 
  1.40  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.41                             ARTICLE 1
  1.42                    MINNESOTACARE MODIFICATIONS
  2.1      Section 1.  Minnesota Statutes 1994, section 62A.65, 
  2.2   subdivision 3, is amended to read: 
  2.3      Subd. 3.  [PREMIUM RATE RESTRICTIONS.] No individual health 
  2.4   plan may be offered, sold, issued, or renewed to a Minnesota 
  2.5   resident unless the premium rate charged is determined in 
  2.6   accordance with the following requirements:  
  2.7      (a) Premium rates must be no more than 25 percent above and 
  2.8   no more than 25 percent below the index rate charged to 
  2.9   individuals for the same or similar coverage, adjusted pro rata 
  2.10  for rating periods of less than one year.  The premium 
  2.11  variations permitted by this paragraph must be based only upon 
  2.12  health status, claims experience, and occupation.  For purposes 
  2.13  of this paragraph, health status includes refraining from 
  2.14  tobacco use or other actuarially valid lifestyle factors 
  2.15  associated with good health, provided that the lifestyle factor 
  2.16  and its effect upon premium rates have been determined by the 
  2.17  commissioner to be actuarially valid and have been approved by 
  2.18  the commissioner.  Variations permitted under this paragraph 
  2.19  must not be based upon age or applied differently at different 
  2.20  ages.  This paragraph does not prohibit use of a constant 
  2.21  percentage adjustment for factors permitted to be used under 
  2.22  this paragraph. 
  2.23     (b) Premium rates may vary based upon the ages of covered 
  2.24  persons only as provided in this paragraph.  In addition to the 
  2.25  variation permitted under paragraph (a), each health carrier may 
  2.26  use an additional premium variation based upon age of up to plus 
  2.27  or minus 50 percent of the index rate. 
  2.28     (c) A health carrier may request approval by the 
  2.29  commissioner to establish no more than three geographic regions 
  2.30  and to establish separate index rates for each region, provided 
  2.31  that the index rates do not vary between any two regions by more 
  2.32  than 20 percent.  Health carriers that do not do business in the 
  2.33  Minneapolis/St. Paul metropolitan area may request approval for 
  2.34  no more than two geographic regions, and clauses (2) and (3) do 
  2.35  not apply to approval of requests made by those health 
  2.36  carriers.  The commissioner may grant approval if the following 
  3.1   conditions are met: 
  3.2      (1) the geographic regions must be applied uniformly by the 
  3.3   health carrier; 
  3.4      (2) one geographic region must be based on the 
  3.5   Minneapolis/St. Paul metropolitan area; 
  3.6      (3) for each geographic region that is rural, the index 
  3.7   rate for that region must not exceed the index rate for the 
  3.8   Minneapolis/St. Paul metropolitan area; and 
  3.9      (4) the health carrier provides actuarial justification 
  3.10  acceptable to the commissioner for the proposed geographic 
  3.11  variations in index rates, establishing that the variations are 
  3.12  based upon differences in the cost to the health carrier of 
  3.13  providing coverage. 
  3.14     (d) Health carriers may use rate cells and must file with 
  3.15  the commissioner the rate cells they use.  Rate cells must be 
  3.16  based upon the number of adults or children covered under the 
  3.17  policy and may reflect the availability of Medicare coverage.  
  3.18  The rates for different rate cells must not in any way reflect 
  3.19  generalized differences in expected costs between principal 
  3.20  insureds and their spouses. 
  3.21     (e) In developing its index rates and premiums for a health 
  3.22  plan, a health carrier shall take into account only the 
  3.23  following factors: 
  3.24     (1) actuarially valid differences in rating factors 
  3.25  permitted under paragraphs (a) and (b); and 
  3.26     (2) actuarially valid geographic variations if approved by 
  3.27  the commissioner as provided in paragraph (c). 
  3.28     (f) All premium variations must be justified in initial 
  3.29  rate filings and upon request of the commissioner in rate 
  3.30  revision filings.  All rate variations are subject to approval 
  3.31  by the commissioner. 
  3.32     (g) The loss ratio must comply with the section 62A.021 
  3.33  requirements for individual health plans. 
  3.34     (h) The rates must not be approved, unless the commissioner 
  3.35  has determined that the rates are reasonable.  In determining 
  3.36  reasonableness, the commissioner shall consider the growth rates 
  4.1   applied under section 62J.04, subdivision 1, paragraph (b), to 
  4.2   the calendar year or years that the proposed premium rate would 
  4.3   be in effect, actuarially valid changes in risks associated with 
  4.4   the enrollee populations, and actuarially valid changes as a 
  4.5   result of statutory changes in Laws 1992, chapter 549. 
  4.6      Sec. 2.  Minnesota Statutes 1994, section 62A.65, 
  4.7   subdivision 7, is amended to read: 
  4.8      Subd. 7.  [SHORT-TERM COVERAGE.] (a) For purposes of this 
  4.9   section, "short-term coverage" means an individual health plan 
  4.10  that: 
  4.11     (1) is issued to provide coverage for a period of 185 days 
  4.12  or less, except that the health plan may permit coverage to 
  4.13  continue until the end of a period of hospitalization for a 
  4.14  condition for which the covered person was hospitalized on the 
  4.15  day that coverage would otherwise have ended; 
  4.16     (2) is nonrenewable, provided that the health carrier may 
  4.17  provide coverage for one or more subsequent periods that satisfy 
  4.18  clause (1), if the total of the periods of coverage do not 
  4.19  exceed a total of 185 days out of any 365-day period, plus any 
  4.20  additional days covered as a result of hospitalization on the 
  4.21  day that a period of coverage would otherwise have ended; 
  4.22     (3) does not cover any preexisting conditions, including 
  4.23  ones that originated during a previous identical policy or 
  4.24  contract with the same health carrier where coverage was 
  4.25  continuous between the previous and the current policy or 
  4.26  contract; and 
  4.27     (4) is available with an immediate effective date without 
  4.28  underwriting upon receipt of a completed application indicating 
  4.29  eligibility under the health carrier's eligibility requirements, 
  4.30  provided that coverage that includes optional benefits may be 
  4.31  offered on a basis that does not meet this requirement. 
  4.32     (b) Short-term coverage is not subject to subdivisions 2 
  4.33  and 5.  Short-term coverage may exclude as a preexisting 
  4.34  condition any injury, illness, or condition for which the 
  4.35  covered person had medical treatment, symptoms, or any 
  4.36  manifestations before the effective date of the coverage, but 
  5.1   dependent children born or placed for adoption during the policy 
  5.2   period must not be subject to this provision.  
  5.3      (c) Notwithstanding subdivision 3, and section 62A.021, a 
  5.4   health carrier may combine short-term coverage with its most 
  5.5   commonly sold individual qualified plan, as defined in section 
  5.6   62E.02, other than short-term coverage, for purposes of 
  5.7   complying with the loss ratio requirement. 
  5.8      (d) The 185 day coverage limitation provided in paragraph 
  5.9   (a) applies to the total number of days of short-term coverage 
  5.10  that covers a person, regardless of the number of policies, 
  5.11  contracts, or health carriers that provide the coverage.  A 
  5.12  written application for short-term coverage must ask the 
  5.13  applicant whether the applicant has been covered by short-term 
  5.14  coverage by any health carrier within the 365 days immediately 
  5.15  preceding the effective date of the coverage being applied for.  
  5.16  Short-term coverage issued in violation of the 185-day 
  5.17  limitation is valid until the end of its term and does not lose 
  5.18  its status as short-term coverage, in spite of the violation.  A 
  5.19  health carrier that knowingly issues short-term coverage in 
  5.20  violation of the 185-day limitation is subject to the 
  5.21  administrative penalties otherwise available to the commissioner 
  5.22  of commerce or the commissioner of health, as appropriate. 
  5.23     (e) (d) Time spent under short-term coverage counts as time 
  5.24  spent under a preexisting condition limitation for purposes of 
  5.25  group or individual health plans, other than short-term 
  5.26  coverage, subsequently issued to that person, or to cover that 
  5.27  person, by any health carrier, if the person maintains 
  5.28  continuous coverage as defined in section 62L.02.  Short-term 
  5.29  coverage is a health plan and is qualifying coverage as defined 
  5.30  in section 62L.02.  Notwithstanding any other law to the 
  5.31  contrary, a health carrier is not required under any 
  5.32  circumstances to provide a person covered by short-term coverage 
  5.33  the right to obtain coverage on a guaranteed issue basis under 
  5.34  another health plan offered by the health carrier, as a result 
  5.35  of the person's enrollment in short-term coverage. 
  5.36     Sec. 3.  Minnesota Statutes 1994, section 62J.04, 
  6.1   subdivision 3, is amended to read: 
  6.2      Subd. 3.  [COST CONTAINMENT DUTIES.] After obtaining the 
  6.3   advice and recommendations of the Minnesota health care 
  6.4   commission, the commissioner shall: 
  6.5      (1) establish statewide and regional limits on growth in 
  6.6   total health care spending under this section, monitor regional 
  6.7   and statewide compliance with the spending limits, and take 
  6.8   action to achieve compliance to the extent authorized by the 
  6.9   legislature; 
  6.10     (2) divide the state into no fewer than four regions, with 
  6.11  one of those regions being the Minneapolis/St. Paul metropolitan 
  6.12  statistical area but excluding Chisago, Isanti, Wright, and 
  6.13  Sherburne counties, for purposes of fostering the development of 
  6.14  regional health planning and coordination of health care 
  6.15  delivery among regional health care systems and working to 
  6.16  achieve spending limits; 
  6.17     (3) (2) provide technical assistance to regional 
  6.18  coordinating boards; 
  6.19     (4) (3) monitor the quality of health care throughout the 
  6.20  state, conduct consumer satisfaction surveys, and take action as 
  6.21  necessary to ensure an appropriate level of quality; 
  6.22     (5) (4) issue recommendations regarding uniform billing 
  6.23  forms, uniform electronic billing procedures and data 
  6.24  interchanges, patient identification cards, and other uniform 
  6.25  claims and administrative procedures for health care providers 
  6.26  and private and public sector payers.  In developing the 
  6.27  recommendations, the commissioner shall review the work of the 
  6.28  work group on electronic data interchange (WEDI) and the 
  6.29  American National Standards Institute (ANSI) at the national 
  6.30  level, and the work being done at the state and local level.  
  6.31  The commissioner may adopt rules requiring the use of the 
  6.32  Uniform Bill 82/92 form, the National Council of Prescription 
  6.33  Drug Providers (NCPDP) 3.2 electronic version, the Health Care 
  6.34  Financing Administration 1500 form, or other standardized forms 
  6.35  or procedures; 
  6.36     (6) undertake health planning responsibilities as provided 
  7.1   in section 62J.15; 
  7.2      (7) monitor and promote the development and implementation 
  7.3   of practice parameters; 
  7.4      (8) (5) authorize, fund, or promote research and 
  7.5   experimentation on new technologies and health care procedures; 
  7.6      (9) (6) designate referral centers for specialized and 
  7.7   high-cost procedures and treatment and establish minimum 
  7.8   standards and requirements for particular procedures or 
  7.9   treatment; 
  7.10     (10) (7) within the limits of appropriations for these 
  7.11  purposes, administer or contract for statewide consumer 
  7.12  education and wellness programs that will improve the health of 
  7.13  Minnesotans and increase individual responsibility relating to 
  7.14  personal health and the delivery of health care services, 
  7.15  undertake prevention programs including initiatives to improve 
  7.16  birth outcomes, expand childhood immunization efforts, and 
  7.17  provide start-up grants for worksite wellness programs; 
  7.18     (11) (8) administer the data analysis unit; and 
  7.19     (12) (9) undertake other activities to monitor and oversee 
  7.20  the delivery of health care services in Minnesota with the goal 
  7.21  of improving affordability, quality, and accessibility of health 
  7.22  care for all Minnesotans. 
  7.23     Sec. 4.  Minnesota Statutes 1994, section 62J.045, 
  7.24  subdivision 3, is amended to read: 
  7.25     Subd. 3.  [COST ALLOCATION FOR EDUCATION AND RESEARCH.] By 
  7.26  January 1, 1994, the commissioner of health, in consultation 
  7.27  with the health care commission and the health technology 
  7.28  advisory committee, shall: 
  7.29     (1) develop mechanisms to gather data and to identify the 
  7.30  annual cost of medical education and research conducted by 
  7.31  hospitals, medical centers, or health maintenance organizations; 
  7.32     (2) determine a percentage of the annual rate of growth 
  7.33  established under section 62J.04 to be allocated for the cost of 
  7.34  education and research and develop a method to assess the 
  7.35  percentage from each group purchaser; 
  7.36     (3) develop mechanisms to collect the assessment from group 
  8.1   purchasers to be deposited in a separate education and research 
  8.2   fund; and 
  8.3      (4) (3) develop a method to allocate the education and 
  8.4   research fund to specific health care providers. 
  8.5      Sec. 5.  Minnesota Statutes 1994, section 62J.06, is 
  8.6   amended to read: 
  8.7      62J.06 [IMMUNITY FROM LIABILITY.] 
  8.8      No member of the Minnesota health care commission 
  8.9   established under section 62J.05, regional coordinating boards 
  8.10  established under section 62J.09, health planning advisory 
  8.11  committee established under section 62J.15, or data collection 
  8.12  advisory committee established under section 62J.30, or practice 
  8.13  parameter advisory committee established under section 62J.32 
  8.14  shall be held civilly or criminally liable for an act or 
  8.15  omission by that person if the act or omission was in good faith 
  8.16  and within the scope of the member's responsibilities under this 
  8.17  chapter. 
  8.18     Sec. 6.  Minnesota Statutes 1994, section 62J.09, 
  8.19  subdivision 1a, is amended to read: 
  8.20     Subd. 1a.  [DUTIES RELATED TO COST CONTAINMENT.] (a)  
  8.21  [ALLOCATION OF REGIONAL SPENDING LIMITS.] Regional coordinating 
  8.22  boards may advise the commissioner regarding allocation of 
  8.23  annual regional limits on the rate of growth for providers in 
  8.24  the regulated all-payer option in order to: 
  8.25     (1) achieve communitywide and regional public health goals 
  8.26  consistent with those established by the commissioner; and 
  8.27     (2) promote access to and equitable reimbursement of 
  8.28  preventive and primary care providers. 
  8.29     (b)  [TECHNICAL ASSISTANCE.] Regional coordinating boards, 
  8.30  in cooperation with the commissioner, shall provide technical 
  8.31  assistance to parties interested in establishing or operating a 
  8.32  community integrated service network or integrated service 
  8.33  network within the region.  This assistance must complement 
  8.34  assistance provided by the commissioner under section 62N.23. 
  8.35     Sec. 7.  Minnesota Statutes 1994, section 62J.17, 
  8.36  subdivision 1, is amended to read: 
  9.1      Subdivision 1.  [PURPOSE.] To ensure access to affordable 
  9.2   health care services for all Minnesotans it is necessary to 
  9.3   restrain the rate of growth in health care costs.  An important 
  9.4   factor believed to contribute to escalating costs may be the 
  9.5   purchase of costly new medical equipment, major capital 
  9.6   expenditures, and the addition of new specialized services.  
  9.7   After spending limits are established under section 62J.04, 
  9.8   providers, patients, and communities will have the opportunity 
  9.9   to decide for themselves whether they can afford capital 
  9.10  expenditures or new equipment or specialized services within the 
  9.11  constraints of a spending limit.  In this environment, the 
  9.12  state's role in reviewing these spending commitments can be more 
  9.13  limited.  However, during the interim period until spending 
  9.14  targets are established, It is important to prevent unrestrained 
  9.15  major spending commitments that will contribute further to the 
  9.16  escalation of health care costs and make future cost containment 
  9.17  efforts more difficult.  In addition, it is essential to protect 
  9.18  against the possibility that the legislature's expression of its 
  9.19  attempt to control health care costs may lead a provider to make 
  9.20  major spending commitments before targets or other cost 
  9.21  containment constraints are fully implemented because the 
  9.22  provider recognizes that the spending commitment may not be 
  9.23  considered appropriate, needed, or affordable within the context 
  9.24  of a fixed budget for health care spending.  Therefore, the 
  9.25  legislature finds that a requirement for reporting health care 
  9.26  expenditures is necessary. 
  9.27     Sec. 8.  Minnesota Statutes 1994, section 62J.22, is 
  9.28  amended to read: 
  9.29     62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.] 
  9.30     The commissioner of health shall seek the full 
  9.31  participation of federal health care programs under this 
  9.32  chapter, including Medicare, medical assistance, veterans 
  9.33  administration programs, and other federal programs.  The 
  9.34  commissioner of human services shall under the direction of the 
  9.35  health care commission submit waiver requests and take other 
  9.36  action necessary to obtain federal approval to allow 
 10.1   participation of the medical assistance program.  Other state 
 10.2   agencies shall provide assistance at the request of the 
 10.3   commission.  If federal approval is not given for one or more 
 10.4   federal programs, data on the amount of health care spending 
 10.5   that is collected under section 62J.04 shall be adjusted so that 
 10.6   state and regional spending limits take into account the failure 
 10.7   of the federal program to participate. 
 10.8      Sec. 9.  Minnesota Statutes 1994, section 62J.30, 
 10.9   subdivision 1, is amended to read: 
 10.10     Subdivision 1.  [DEFINITIONS.] For purposes of sections 
 10.11  62J.30 to 62J.34 62J.33, the following definitions apply: 
 10.12     (a) "Practice parameter" means a statement intended to 
 10.13  guide the clinical decision making of health care providers and 
 10.14  patients that is supported by the results of appropriately 
 10.15  designed outcomes research studies or that has been approved by 
 10.16  the federal agency for health care policy and research or 
 10.17  adopted for use by the American Medical Association, the 
 10.18  National Medical Association, a member board of the American 
 10.19  Board of Medical Specialties, a board approved by the American 
 10.20  Osteopathic Association, a college or board approved by the 
 10.21  Royal College of Physicians and Surgeons of Canada, a national 
 10.22  health professional board or association, or a board approved by 
 10.23  the American Dental Association. 
 10.24     (b) "Outcomes research" means research designed to identify 
 10.25  and analyze the outcomes and costs of alternative interventions 
 10.26  for a given clinical condition, in order to determine the most 
 10.27  appropriate and cost-effective means to prevent, diagnose, 
 10.28  treat, or manage the condition, or in order to develop and test 
 10.29  methods for reducing inappropriate or unnecessary variations in 
 10.30  the type and frequency of interventions. 
 10.31     Sec. 10.  Minnesota Statutes 1994, section 62J.30, 
 10.32  subdivision 3, is amended to read: 
 10.33     Subd. 3.  [GENERAL DUTIES; IMPLEMENTATION DATE.] The 
 10.34  commissioner, through the data analysis unit, shall: 
 10.35     (1) conduct applied research using existing and newly 
 10.36  established health care databases, and promote applications 
 11.1   based on existing research; 
 11.2      (2) establish the condition-specific database required 
 11.3   under section 62J.31; 
 11.4      (3) develop and implement data collection procedures to 
 11.5   ensure a high level of cooperation from health care providers 
 11.6   and health carriers, as defined in section 62L.02, subdivision 
 11.7   16; 
 11.8      (4) work closely with health carriers and health care 
 11.9   providers to promote improvements in health care efficiency and 
 11.10  effectiveness; 
 11.11     (5) participate as a partner or sponsor of private sector 
 11.12  initiatives that promote publicly disseminated applied research 
 11.13  on health care delivery, outcomes, costs, quality, and 
 11.14  management; 
 11.15     (6) provide technical assistance to health plan and health 
 11.16  care purchasers, as required by section 62J.33; and 
 11.17     (7) develop outcome-based practice parameters as required 
 11.18  under section 62J.34; and 
 11.19     (8) provide technical assistance as needed to the health 
 11.20  planning advisory committee and the regional coordinating boards.
 11.21     Sec. 11.  Minnesota Statutes 1994, section 62J.30, 
 11.22  subdivision 6, is amended to read: 
 11.23     Subd. 6.  [DATA COLLECTION PROCEDURES.] The data analysis 
 11.24  unit shall collect data from health care providers, and health 
 11.25  carriers, and individuals in the most cost-effective manner, 
 11.26  which does not unduly burden them.  The unit may require health 
 11.27  care providers and health carriers to collect and provide 
 11.28  all aggregate summaries of patient health records and claim 
 11.29  files as long as these summaries do not identify individual 
 11.30  patients, and cooperate in other ways with the data collection 
 11.31  process.  The unit may also require health care providers and 
 11.32  health carriers to provide mailing lists of patients who have 
 11.33  consented to release of data.  The commissioner shall require 
 11.34  all health care providers, group purchasers, and state agencies 
 11.35  to use a standard patient identifier and a standard identifier 
 11.36  for providers and health plans when reporting data under this 
 12.1   chapter.  The data analysis unit must code patient identifiers 
 12.2   to prevent identification and to enable release of otherwise 
 12.3   private data to researchers, providers, and group purchasers in 
 12.4   a manner consistent with chapter 13 and section 144.335. 
 12.5      Sec. 12.  Minnesota Statutes 1994, section 62J.30, 
 12.6   subdivision 7, is amended to read: 
 12.7      Subd. 7.  [DATA CLASSIFICATION SUMMARY DATA; RULEMAKING.] 
 12.8   (a) Data collected through the large-scale database initiatives 
 12.9   of the data analysis unit required by section 62J.31 that 
 12.10  identify individual patients or providers are private data on 
 12.11  individuals.  Data not on individuals are nonpublic data.  The 
 12.12  commissioner may release private data on individuals and 
 12.13  nonpublic data to researchers affiliated with university 
 12.14  research centers or departments who are conducting research on 
 12.15  health outcomes, practice parameters, and medical practice 
 12.16  style; researchers working under contract with the commissioner; 
 12.17  and individuals purchasing health care services for health 
 12.18  carriers and groups.  The commissioner shall require any person 
 12.19  or organization receiving under this subdivision either private 
 12.20  data on individuals or nonpublic data to sign an agreement to 
 12.21  maintain the data that it receives according to the statutory 
 12.22  provisions applicable to the data.  The agreement shall not 
 12.23  limit the preparation and dissemination of summary data as 
 12.24  permitted under section 13.05, subdivision 7.  To the extent 
 12.25  reasonably possible, release of private, confidential, or 
 12.26  nonpublic data under this chapter shall be made without 
 12.27  releasing data that identifies patients and should instead be 
 12.28  released using the identification numbers required by 
 12.29  subdivision 6. 
 12.30     (b) Summary data derived from data collected through the 
 12.31  large-scale database initiatives of the data analysis unit may 
 12.32  be provided under section 13.05, subdivision 7, and may be 
 12.33  released in studies produced by the commissioner. 
 12.34     (c) (b) The commissioner shall adopt rules to establish 
 12.35  criteria and procedures to govern access to and the use of data 
 12.36  collected through the initiatives of the data analysis unit. 
 13.1      Sec. 13.  Minnesota Statutes 1994, section 62J.30, 
 13.2   subdivision 10, is amended to read: 
 13.3      Subd. 10.  [CONTRACTS AND GRANTS.] To carry out the duties 
 13.4   assigned in sections 62J.30 to 62J.34 62J.33, the commissioner 
 13.5   may contract with or provide grants to private sector entities.  
 13.6   Any contract or grant must require the private sector entity to 
 13.7   maintain the data which it receives according to the statutory 
 13.8   provisions applicable to the data. 
 13.9      Sec. 14.  Minnesota Statutes 1994, section 62J.30, 
 13.10  subdivision 11, is amended to read: 
 13.11     Subd. 11.  [RULEMAKING.] The commissioner may adopt 
 13.12  permanent and emergency rules to implement sections 62J.30 to 
 13.13  62J.34 62J.33.  
 13.14     Sec. 15.  Minnesota Statutes 1994, section 62J.30, is 
 13.15  amended by adding a subdivision to read: 
 13.16     Subd. 12.  [PROHIBITION ON COLLECTING INDIVIDUAL LEVEL 
 13.17  DATA.] In implementing the data collection initiatives 
 13.18  authorized under this chapter, the commissioner, and the data 
 13.19  institute established under section 62J.45, shall not collect 
 13.20  individual or encounter level data, or any data that identify 
 13.21  specific patients or individuals.  The commissioner and the data 
 13.22  institute may collect aggregate data on individuals and 
 13.23  encounters, as long as the data do not identify specific 
 13.24  patients or individuals. 
 13.25     Sec. 16.  Minnesota Statutes 1994, section 62J.31, 
 13.26  subdivision 1, is amended to read: 
 13.27     Subdivision 1.  [ESTABLISHMENT.] The data analysis unit 
 13.28  shall establish a large-scale database for a limited number of 
 13.29  health conditions.  This initiative must meet the requirements 
 13.30  of this section and section 62J.30, subdivision 12. 
 13.31     Sec. 17.  Minnesota Statutes 1994, section 62J.35, 
 13.32  subdivision 1, is amended to read: 
 13.33     Subdivision 1.  [DATA COLLECTION BY COMMISSIONER.] For 
 13.34  purposes of forecasting rates of growth in health care spending 
 13.35  and setting limits under section 62J.04, subdivisions 1 and 1a, 
 13.36  the commissioner may collect from health care providers data on 
 14.1   patient revenues and health care spending received during a time 
 14.2   period specified by the commissioner.  The commissioner may also 
 14.3   collect data on health care revenues and spending from group 
 14.4   purchasers of health care.  Health care providers and group 
 14.5   purchasers doing business in the state shall provide the data 
 14.6   requested by the commissioner at the times and in the form 
 14.7   specified by the commissioner.  Professional licensing boards 
 14.8   and state agencies responsible for licensing, registering, or 
 14.9   regulating providers shall cooperate fully with the commissioner 
 14.10  in achieving compliance with the reporting requirements.  
 14.11     Sec. 18.  Minnesota Statutes 1994, section 62J.45, 
 14.12  subdivision 1, is amended to read: 
 14.13     Subdivision 1.  [STATEMENT OF PURPOSE.] It is the intention 
 14.14  of the legislature to create a public-private mechanism for the 
 14.15  collection of health care costs, quality, and outcome data, to 
 14.16  the extent administratively efficient and effective.  This 
 14.17  integrated data system will provide clear, usable information on 
 14.18  the cost, quality, and structure of health care services in 
 14.19  Minnesota. 
 14.20     The health reform initiatives being implemented rely 
 14.21  heavily on the availability of valid, objective data that 
 14.22  currently are collected in many forms within the health care 
 14.23  industry.  Data collection needs cannot be efficiently met by 
 14.24  undertaking separate data collection efforts. 
 14.25     The data institute created in this section will be a 
 14.26  partnership between the commissioner of health and a board of 
 14.27  directors representing health carriers and other group 
 14.28  purchasers, health care providers, and consumers.  These 
 14.29  entities will work together to establish a centralized cost and 
 14.30  quality data system that will be used by the public and private 
 14.31  sectors.  The data collection advisory committee and the 
 14.32  practice parameter advisory committee shall provide assistance 
 14.33  to the institute through the commissioner of health. 
 14.34     Sec. 19.  Minnesota Statutes 1994, section 62J.45, 
 14.35  subdivision 2, is amended to read: 
 14.36     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
 15.1   following definitions apply.  
 15.2      (a) "Board" means the board of directors of the data 
 15.3   institute. 
 15.4      (b) "Encounter level data" means data related to the 
 15.5   utilization of health care services by, and the provision of 
 15.6   health care services to individual patients, enrollees, or 
 15.7   insureds, including claims data, abstracts of medical records, 
 15.8   and data from patient interviews and patient surveys. 
 15.9      (c) "Health carrier" has the definition provided in section 
 15.10  62A.011, subdivision 2. 
 15.11     Sec. 20.  Minnesota Statutes 1994, section 62J.45, 
 15.12  subdivision 4, is amended to read: 
 15.13     Subd. 4.  [DATA COLLECTION PLAN.] The commissioner, in 
 15.14  consultation with the board of the institute and the data 
 15.15  collection advisory committee, shall develop and implement a 
 15.16  plan that:  
 15.17     (1) provides data collection objectives, strategies, 
 15.18  priorities, cost estimates, administrative and operational 
 15.19  guidelines, and implementation timelines for the data institute; 
 15.20  and 
 15.21     (2) identifies the encounter level data needed for the 
 15.22  commissioner to carry out the duties assigned in this chapter.  
 15.23  The plan must take into consideration existing data sources and 
 15.24  data sources that can easily be made uniform for linkages to 
 15.25  other data sets. 
 15.26     This plan shall be prepared by October 31, 1993. 
 15.27     Sec. 21.  Minnesota Statutes 1994, section 62J.45, 
 15.28  subdivision 5, is amended to read: 
 15.29     Subd. 5.  [COMMISSIONER'S DUTIES.] (a) The commissioner 
 15.30  shall establish a public/private data institute in conjunction 
 15.31  with health care providers, health carriers and other group 
 15.32  purchasers, and consumers, to collect and process encounter 
 15.33  level data that are required to be submitted to the commissioner 
 15.34  under this chapter.  The commissioner shall not collect 
 15.35  encounter level data from individual health care providers until 
 15.36  standardized forms and procedures are available.  The 
 16.1   commissioner shall establish a board of directors comprised of 
 16.2   members of the public and private sector to provide oversight 
 16.3   for the administration and operation of the institute.  The 
 16.4   commissioner and the board shall comply with section 62J.30, 
 16.5   subdivision 12. 
 16.6      (b) Until the data institute is operational, the 
 16.7   commissioner may collect encounter level data required to be 
 16.8   submitted under this chapter. 
 16.9      (c) The commissioner, with the advice of the board, shall 
 16.10  establish policies for the disclosure of data to consumers, 
 16.11  purchasers, providers, integrated service networks, and plans 
 16.12  for their use in analysis to meet the goals of this chapter, as 
 16.13  well as for the public disclosure of data to other interested 
 16.14  parties.  The disclosure policies shall ensure that consumers, 
 16.15  purchasers, providers, integrated service networks, and plans 
 16.16  have access to institute data for use in analysis to meet the 
 16.17  goals of this chapter at the same time that data is provided to 
 16.18  the data analysis unit in the department of health. 
 16.19     (d) (c) The commissioner, with the advice of the board, may 
 16.20  require those requesting data from the institute to contribute 
 16.21  toward the cost of data collection through the payments of 
 16.22  fees.  Entities supplying data to the institute shall not be 
 16.23  charged more than the actual transaction cost of providing the 
 16.24  data requested. 
 16.25     (e) (d) The commissioner may intervene in the direct 
 16.26  operation of the institute, if this is necessary in the judgment 
 16.27  of the commissioner to accomplish the institute's duties.  If 
 16.28  the commissioner intends to depart from the advice and 
 16.29  recommendations of the board, the commissioner shall inform the 
 16.30  board of the intended departure, provide the board with a 
 16.31  written explanation of the reasons for the departure, and give 
 16.32  the board the opportunity to comment on the departure. 
 16.33     Sec. 22.  Minnesota Statutes 1994, section 62J.45, 
 16.34  subdivision 10, is amended to read: 
 16.35     Subd. 10.  [DATA COLLECTION.] The commissioner, in 
 16.36  consultation with the data institute board, may select a vendor 
 17.1   to: 
 17.2      (1) collect the encounter level data required to be 
 17.3   submitted by group purchasers under sections 62J.38 and 62J.42, 
 17.4   state agencies under section 62J.40, and health care providers 
 17.5   under sections 62J.41 and 62J.42, using, to the greatest extent 
 17.6   possible, standardized forms and procedures; 
 17.7      (2) collect the encounter level data required for the 
 17.8   initiatives of the data analysis unit, under sections 62J.30 to 
 17.9   62J.34 62J.33, using, to the greatest extent possible, 
 17.10  standardized forms and procedures; 
 17.11     (3) process the data collected to ensure validity, 
 17.12  consistency, accuracy, and completeness, and as appropriate, 
 17.13  merge data collected from different sources; 
 17.14     (4) provide unaggregated, encounter level data to the data 
 17.15  analysis unit within the department of health; and 
 17.16     (5) carry out other duties assigned in this section. 
 17.17     Sec. 23.  Minnesota Statutes 1994, section 62J.48, is 
 17.18  amended to read: 
 17.19     62J.48 [CRITERIA FOR REIMBURSEMENT.] 
 17.20     All ambulance services licensed under section 144.802 are 
 17.21  eligible for reimbursement under the integrated service network 
 17.22  system and the regulated all-payer option.  The commissioner 
 17.23  shall require community integrated service networks, and 
 17.24  integrated service networks, and all-payer insurers to adopt the 
 17.25  following reimbursement policies. 
 17.26     (1) All scheduled or prearranged air and ground ambulance 
 17.27  transports must be reimbursed if requested by an attending 
 17.28  physician or nurse, and, if the person is an enrollee in an 
 17.29  integrated service network or community integrated service 
 17.30  network, if approved by a designated representative of an 
 17.31  integrated service network or a community service network who is 
 17.32  immediately available on a 24-hour basis.  The designated 
 17.33  representative must be a registered nurse or a physician 
 17.34  assistant with at least three years of critical care or trauma 
 17.35  experience, or a licensed physician. 
 17.36     (2) Reimbursement must be provided for all emergency 
 18.1   ambulance calls in which a patient is transported or medical 
 18.2   treatment rendered. 
 18.3      (3) Special transportation services must not be billed or 
 18.4   reimbursed if the patient needs medical attention immediately 
 18.5   before transportation. 
 18.6      Sec. 24.  Minnesota Statutes 1994, section 62J.65, is 
 18.7   amended to read: 
 18.8      62J.65 [EXEMPTION.] 
 18.9      Patient revenues derived from non-Minnesota patients are 
 18.10  exempt from the regulated all-payer system and Medicare balance 
 18.11  billing prohibition under section 62J.25. 
 18.12     Sec. 25.  Minnesota Statutes 1994, section 62L.08, 
 18.13  subdivision 8, is amended to read: 
 18.14     Subd. 8.  [FILING REQUIREMENT.] No later than July 1, 1993, 
 18.15  and each year thereafter, a health carrier that offers, sells, 
 18.16  issues, or renews a health benefit plan for small employers 
 18.17  shall file with the commissioner the index rates and must 
 18.18  demonstrate that all rates shall be within the rating 
 18.19  restrictions defined in this chapter.  Such demonstration must 
 18.20  include the allowable range of rates from the index rates and a 
 18.21  description of how the health carrier intends to use demographic 
 18.22  factors including case characteristics in calculating the 
 18.23  premium rates.  The rates shall not be approved, unless the 
 18.24  commissioner has determined that the rates are reasonable.  In 
 18.25  determining reasonableness, the commissioner shall consider the 
 18.26  growth rates applied under section 62J.04, subdivision 1, 
 18.27  paragraph (b), to the calendar year or years that the proposed 
 18.28  premium rate would be in effect, actuarially valid changes in 
 18.29  risk associated with the enrollee population, and actuarially 
 18.30  valid changes as a result of statutory changes in Laws 1992, 
 18.31  chapter 549.  For premium rates proposed to go into effect 
 18.32  between July 1, 1993 and December 31, 1993, the pertinent growth 
 18.33  rate is the growth rate applied under section 62J.04, 
 18.34  subdivision 1, paragraph (b), to calendar year 1994.  
 18.35     Sec. 26.  Minnesota Statutes 1994, section 62N.05, 
 18.36  subdivision 2, is amended to read: 
 19.1      Subd. 2.  [REQUIREMENTS.] The commissioner shall include in 
 19.2   the rules requirements that will ensure that the annual rate of 
 19.3   growth of an integrated service network's aggregate total 
 19.4   revenues received from purchasers and enrollees, after 
 19.5   adjustments for changes in population size and risk, does not 
 19.6   exceed the growth limit established in section 62J.04.  A 
 19.7   network's aggregate total revenues for purposes of these growth 
 19.8   limits are net of the contributions, surcharges, taxes, and 
 19.9   assessments listed in section 62P.04, subdivision 2, that the 
 19.10  network pays.  The commissioner may include in the rules the 
 19.11  following: 
 19.12     (1) requirements for licensure, including a fee for initial 
 19.13  application and an annual fee for renewal; 
 19.14     (2) quality standards; 
 19.15     (3) requirements for availability and comprehensiveness of 
 19.16  services; 
 19.17     (4) requirements regarding the defined population to be 
 19.18  served by an integrated service network; 
 19.19     (5) requirements for open enrollment; 
 19.20     (6) provisions for incentives for networks to accept as 
 19.21  enrollees individuals who have high risks for needing health 
 19.22  care services and individuals and groups with special needs; 
 19.23     (7) prohibitions against disenrolling individuals or groups 
 19.24  with high risks or special needs; 
 19.25     (8) requirements that an integrated service network provide 
 19.26  to its enrollees information on coverage, including any 
 19.27  limitations on coverage, deductibles and copayments, optional 
 19.28  services available and the price or prices of those services, 
 19.29  any restrictions on emergency services and services provided 
 19.30  outside of the network's service area, any responsibilities 
 19.31  enrollees have, and describing how an enrollee can use the 
 19.32  network's enrollee complaint resolution system; 
 19.33     (9) requirements for financial solvency and stability; 
 19.34     (10) a deposit requirement; 
 19.35     (11) financial reporting and examination requirements; 
 19.36     (12) limits on copayments and deductibles; 
 20.1      (13) mechanisms to prevent and remedy unfair competition; 
 20.2      (14) provisions to reduce or eliminate undesirable barriers 
 20.3   to the formation of new integrated service networks; 
 20.4      (15) requirements for maintenance and reporting of 
 20.5   information on costs, prices, revenues, volume of services, and 
 20.6   outcomes and quality of services; 
 20.7      (16) a provision allowing an integrated service network to 
 20.8   set credentialing standards for practitioners employed by or 
 20.9   under contract with the network; 
 20.10     (17) a requirement that an integrated service network 
 20.11  employ or contract with practitioners and other health care 
 20.12  providers, and minimum requirements for those contracts if the 
 20.13  commissioner deems requirements to be necessary to ensure that 
 20.14  each network will be able to control expenditures and revenues 
 20.15  or to protect enrollees and potential enrollees; 
 20.16     (18) provisions regarding liability for medical 
 20.17  malpractice; 
 20.18     (19) provisions regarding permissible and impermissible 
 20.19  underwriting criteria applicable to the standard set of 
 20.20  benefits; 
 20.21     (20) a method or methods to facilitate and encourage 
 20.22  appropriate provision of services by midlevel practitioners and 
 20.23  pharmacists; 
 20.24     (21) a method or methods to assure that all integrated 
 20.25  service networks are subject to the same regulatory 
 20.26  requirements.  All health carriers, including health maintenance 
 20.27  organizations, insurers, and nonprofit health service plan 
 20.28  corporations shall be regulated under the same rules, to the 
 20.29  extent that the health carrier is operating an integrated 
 20.30  service network or is a participating entity in an integrated 
 20.31  service network; 
 20.32     (22) provisions for appropriate risk adjusters or other 
 20.33  methods to prevent or compensate for adverse selection of 
 20.34  enrollees into or out of an integrated service network; and 
 20.35     (23) rules prescribing standard measures and methods by 
 20.36  which integrated service networks shall determine and disclose 
 21.1   their prices, copayments, deductibles, out-of-pocket limits, 
 21.2   enrollee satisfaction levels, and anticipated loss ratios.  
 21.3      Sec. 27.  Minnesota Statutes 1994, section 62N.06, 
 21.4   subdivision 1, is amended to read: 
 21.5      Subdivision 1.  [AUTHORIZED ENTITIES.] (a) An integrated 
 21.6   service network may be organized as a separate nonprofit 
 21.7   corporation under chapter 302A, 317A, or 319A, or as a 
 21.8   cooperative under chapter 308A.  
 21.9      (b) A nonprofit health carrier, as defined in section 
 21.10  62A.011, may establish and operate one or more integrated 
 21.11  service networks without forming a separate corporation or 
 21.12  cooperative, but only if all of the following conditions are met:
 21.13     (i) an existing contract between the health carrier and a 
 21.14  health care provider, for a term of less than seven years, that 
 21.15  does not explicitly mention the provider's relationship within 
 21.16  an integrated service network, or a future integrated service 
 21.17  network, does not bind the health carrier or provider as applied 
 21.18  to integrated service network services, except with the mutual 
 21.19  consent of the health carrier and provider.  This clause does 
 21.20  not apply to contracts between a health carrier and its salaried 
 21.21  employees; 
 21.22     (ii) the health carrier shall not apply toward the net 
 21.23  worth, working capital, or deposit requirements of this chapter 
 21.24  any assets used to satisfy net worth, working capital, deposit, 
 21.25  or other financial requirements under any other chapter of 
 21.26  Minnesota law; 
 21.27     (iii) the health carrier shall not include in its premiums 
 21.28  for health coverage provided under any other chapter of 
 21.29  Minnesota law, an assessment or surcharge relating to net worth, 
 21.30  working capital, or deposit requirements imposed upon the 
 21.31  integrated service network under this chapter; and 
 21.32     (iv) the health carrier shall not include in its premiums 
 21.33  for integrated service network coverage under this chapter an 
 21.34  assessment or surcharge relating to net worth working capital or 
 21.35  deposit requirements imposed upon health coverage offered under 
 21.36  any other chapter of Minnesota law. 
 22.1      Sec. 28.  Minnesota Statutes 1994, section 62N.25, 
 22.2   subdivision 5, is amended to read: 
 22.3      Subd. 5.  [BENEFITS.] Community integrated service networks 
 22.4   must offer the health maintenance organization benefit set, as 
 22.5   defined in chapter 62D, and other laws applicable to entities 
 22.6   regulated under chapter 62D, except that the community 
 22.7   integrated service network may impose a deductible, not to 
 22.8   exceed $1,000 per person per year, provided that out-of-pocket 
 22.9   expenses on covered services do not exceed $3,000 per person or 
 22.10  $5,000 per family per year without limit.  The deductible must 
 22.11  not apply to preventive health services as described in 
 22.12  Minnesota Rules, part 4685.0801, subpart 8.  Community networks 
 22.13  and chemical dependency facilities under contract with a 
 22.14  community network shall use the assessment criteria in Minnesota 
 22.15  Rules, parts 9530.6600 to 9530.6660, when assessing enrollees 
 22.16  for chemical dependency treatment.  
 22.17     Sec. 29.  Minnesota Statutes 1994, section 62N.25, 
 22.18  subdivision 7, is amended to read: 
 22.19     Subd. 7.  [EXEMPTIONS FROM EXISTING REQUIREMENTS.] 
 22.20  Community integrated service networks are exempt from the 
 22.21  following requirements applicable to health maintenance 
 22.22  organizations: 
 22.23     (1) conducting focused studies under Minnesota Rules, part 
 22.24  4685.1125; 
 22.25     (2) preparing and filing, as a condition of licensure, a 
 22.26  written quality assurance plan, and annually filing such a plan 
 22.27  and a work plan, under Minnesota Rules, parts 4685.1110 and 
 22.28  4685.1130; 
 22.29     (3) maintaining statistics under Minnesota Rules, part 
 22.30  4685.1200; 
 22.31     (4) filing provider contract forms under sections 62D.03, 
 22.32  subdivision 4, and 62D.08, subdivision 1; 
 22.33     (5) reporting any changes in the address of a network 
 22.34  provider or length of a provider contract or additions to the 
 22.35  provider network to the commissioner within ten days under 
 22.36  section 62D.08, subdivision 5.  Community networks must report 
 23.1   such information to the commissioner on a quarterly basis.  
 23.2   Community networks that fail to make the required quarterly 
 23.3   filing are subject to the penalties set forth in section 62D.08, 
 23.4   subdivision 5; and 
 23.5      (6) preparing and filing, as a condition of licensure, a 
 23.6   marketing plan, and annually filing a marketing plan, under 
 23.7   sections 62D.03, subdivision 4, paragraph (l), and 62D.08, 
 23.8   subdivision 1; and 
 23.9      (7) being a nonprofit corporation or local governmental 
 23.10  unit as required in section 62D.02, subdivision 4.  A community 
 23.11  network may instead be any type of entity permitted to operate 
 23.12  an integrated service network under section 62N.06, subdivision 
 23.13  1. 
 23.14     Sec. 30.  Minnesota Statutes 1994, section 62N.381, 
 23.15  subdivision 2, is amended to read: 
 23.16     Subd. 2.  [RANGE OF RATES.] The reimbursement rate 
 23.17  negotiated for a contract period must not be more than 20 
 23.18  percent above or below the individual ambulance service's 
 23.19  current customary charges, plus the a rate of growth allowed 
 23.20  under section 62J.04, subdivision 1 determined by the 
 23.21  commissioner.  If the network and ambulance service cannot agree 
 23.22  on a reimbursement rate, each party shall submit their rate 
 23.23  proposal along with supportive data to the commissioner. 
 23.24     Sec. 31.  Minnesota Statutes 1994, section 62Q.01, 
 23.25  subdivision 3, is amended to read: 
 23.26     Subd. 3.  [HEALTH PLAN.] "Health plan" means a health plan 
 23.27  as defined in section 62A.011 or a policy, contract, or 
 23.28  certificate issued by a community integrated service network; or 
 23.29  an integrated service network; or an all-payer insurer as 
 23.30  defined in section 62P.02. 
 23.31     Sec. 32.  Minnesota Statutes 1994, section 62Q.01, 
 23.32  subdivision 4, is amended to read: 
 23.33     Subd. 4.  [HEALTH PLAN COMPANY.] "Health plan company" 
 23.34  means: 
 23.35     (1) a health carrier as defined under section 62A.011, 
 23.36  subdivision 2; 
 24.1      (2) an integrated service network as defined under section 
 24.2   62N.02, subdivision 8; or 
 24.3      (3) an all-payer insurer as defined under section 62P.02; 
 24.4   or 
 24.5      (4) a community integrated service network as defined under 
 24.6   section 62N.02, subdivision 4a. 
 24.7      Sec. 33.  Minnesota Statutes 1994, section 62Q.165, is 
 24.8   amended to read: 
 24.9      62Q.165 [UNIVERSAL COVERAGE.] 
 24.10     It is the commitment of the state to achieve universal 
 24.11  health coverage for all Minnesotans by July 1, 1997.  Universal 
 24.12  coverage is achieved when every Minnesotan has access to health 
 24.13  care and the ability to pay for it.  In order to achieve this 
 24.14  commitment, the following goals must be met: 
 24.15     (1) every Minnesotan shall have health coverage and shall 
 24.16  contribute to the costs of coverage based on ability to pay; 
 24.17     (2) no Minnesotan shall be denied coverage or forced to pay 
 24.18  more because of health status; 
 24.19     (3) quality health care services must be accessible to all 
 24.20  Minnesotans; 
 24.21     (4) all health care purchasers must be placed on an equal 
 24.22  footing in the health care marketplace; and 
 24.23     (5) a comprehensive and affordable health plan must be 
 24.24  available to all Minnesotans. 
 24.25     It is the goal of the state to: 
 24.26     (1) achieve universal coverage through private market 
 24.27  reforms; 
 24.28     (2) create private market incentives so Minnesotans have a 
 24.29  financially secure funding source from which to pay health care 
 24.30  expenditures; 
 24.31     (3) empower consumers to make educated choices in the 
 24.32  health care market; and 
 24.33     (4) encourage the development of an efficient marketplace 
 24.34  which will contain costs through healthy competition. 
 24.35     Sec. 34.  Minnesota Statutes 1994, section 62Q.18, 
 24.36  subdivision 7, is amended to read: 
 25.1      Subd. 7.  [PORTABILITY OF COVERAGE.] (a) Effective July 1, 
 25.2   1997, no health plan company shall offer, sell, issue, or renew 
 25.3   any group or individual health plan that does not provide for 
 25.4   guaranteed issue, with full credit for previous qualifying 
 25.5   coverage against any preexisting condition limitation that would 
 25.6   otherwise apply under subdivision 5.  No health plan shall be 
 25.7   subject to any other type of underwriting restriction.  
 25.8      (b) Effective July 1, 1995, no health plan company shall 
 25.9   offer, sell, issue, or renew any group or individual health plan 
 25.10  that does not, with respect to individuals who maintain 
 25.11  continuous coverage and whose immediately preceding qualifying 
 25.12  coverage is a health plan issued by medical assistance under 
 25.13  chapter 256B, general assistance medical care under chapter 
 25.14  256D, or the MinnesotaCare program established under section 
 25.15  256.9352, 
 25.16     (1) make coverage available on a guaranteed issue basis; 
 25.17  and 
 25.18     (2) give full credit for previous continuous coverage 
 25.19  against any applicable preexisting condition limitation or 
 25.20  exclusion. 
 25.21     (c) Paragraph (b) applies to individuals whose immediately 
 25.22  preceding qualifying coverage is medical assistance under 
 25.23  chapter 256B, general assistance medical care under chapter 
 25.24  256D, or the MinnesotaCare program established under section 
 25.25  256.9352, only if the individual has disenrolled from the public 
 25.26  program or will disenroll upon issuance of the new coverage.  
 25.27  Paragraph (b) does not apply if the public program uses or will 
 25.28  use public funds to pay the premiums for an individual who 
 25.29  remains or will remain enrolled in the public program.  No 
 25.30  public funds may be used to purchase private coverage available 
 25.31  under this paragraph.  This paragraph does not prohibit public 
 25.32  payment of premiums to continue private sector coverage 
 25.33  originally obtained prior to enrollment in the public program, 
 25.34  where otherwise permitted by state or federal law.  Portability 
 25.35  coverage under this paragraph is subject to the provisions of 
 25.36  section 62A.65, subdivision 5, clause (b). 
 26.1      (d) Effective July 1, 1994, no health plan company shall 
 26.2   offer, sell, issue, or renew any group health plan that does 
 26.3   not, with respect to individuals who maintain continuous 
 26.4   coverage and who qualify under the group's eligibility 
 26.5   requirements: 
 26.6      (1) make coverage available on a guaranteed issue basis; 
 26.7   and 
 26.8      (2) give full credit for previous continuous coverage 
 26.9   against any applicable preexisting condition limitation or 
 26.10  exclusion. 
 26.11     To the extent that this paragraph subdivision conflicts 
 26.12  with chapter 62L, with respect to small employers as defined in 
 26.13  section 62L.02, chapter 62L governs, regardless of whether the 
 26.14  group sponsor is a small employer as defined in section 62L.02.  
 26.15  This subdivision is subject to the provisions of chapter 62L 
 26.16  regarding eligible employees and late entrants. 
 26.17     Sec. 35.  Minnesota Statutes 1994, section 62Q.30, is 
 26.18  amended to read: 
 26.19     62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION 
 26.20  PROCESS.] 
 26.21     The commissioner shall establish an expedited fact finding 
 26.22  and dispute resolution process to assist enrollees of integrated 
 26.23  service networks and all-payer insurers community integrated 
 26.24  service networks with contested treatment, coverage, and service 
 26.25  issues to be in effect July 1, 1997.  The commissioner may order 
 26.26  an integrated service network or an all-payer insurer to provide 
 26.27  or pay for a service that is within the universal standard 
 26.28  benefits set.  If the disputed issue relates to whether a 
 26.29  service is appropriate and necessary, the commissioner shall 
 26.30  issue an order only after consulting with appropriate experts 
 26.31  knowledgeable, trained, and practicing in the area in dispute, 
 26.32  reviewing pertinent literature, and considering the availability 
 26.33  of satisfactory alternatives.  The commissioner shall take steps 
 26.34  including but not limited to fining, suspending, or revoking the 
 26.35  license of an integrated service network or an all-payer insurer 
 26.36  a community integrated service network that is the subject of 
 27.1   repeated orders by the commissioner that suggests a pattern of 
 27.2   inappropriate underutilization. 
 27.3      Sec. 36.  Minnesota Statutes 1994, section 62Q.41, is 
 27.4   amended to read: 
 27.5      62Q.41 [ANNUAL IMPLEMENTATION REPORT.] 
 27.6      The commissioner of health, in consultation with the 
 27.7   Minnesota health care commission, shall develop an annual 
 27.8   implementation report to be submitted to the legislature each 
 27.9   year beginning January 1, 1995, describing the progress and 
 27.10  status of rule development and implementation of the integrated 
 27.11  service network system and the regulated all-payer option, and 
 27.12  providing recommendations for legislative changes that the 
 27.13  commissioner determines may be needed.  
 27.14     Sec. 37.  [62Q.42] [COMPARATIVE INFORMATION ON HEALTH PLAN 
 27.15  COMPANIES.] 
 27.16     Health plan companies shall include with all bills and 
 27.17  financial statements sent to enrollees a statement informing 
 27.18  enrollees that information comparing the cost and quality of 
 27.19  services of health plan companies is available through the 
 27.20  information clearinghouse within the department of health.  This 
 27.21  statement must include the address and phone number of the 
 27.22  information clearinghouse. 
 27.23     Sec. 38.  [62Q.43] [NETWORK REIMBURSEMENT DIFFERENTIALS.] 
 27.24     Notwithstanding sections 62A.02 and 72A.20, subdivision 15, 
 27.25  a health plan company may require from its enrollees different 
 27.26  copayments, coinsurance, deductibles, out-of-pocket expense 
 27.27  limitations, and other enrollee cost-sharing provisions, 
 27.28  depending upon whether the enrollees receive covered goods and 
 27.29  services within a network of providers employed by or under 
 27.30  contract with the health plan company.  The differences in the 
 27.31  cost-sharing provisions are solely within the discretion of the 
 27.32  health plan company, except as otherwise provided in section 
 27.33  62Q.095.  This section also applies when a health plan company 
 27.34  contracts to use a network of providers established by an entity 
 27.35  other than the health plan company. 
 27.36     Sec. 39.  [62Q.44] [DEDUCTIBLES WITHOUT LIMIT.] 
 28.1      Health plans offered, issued, or renewed on or after 
 28.2   January 1, 1996, by a health plan company may include 
 28.3   deductibles without limit. 
 28.4      Sec. 40.  Minnesota Statutes 1994, section 256.9352, 
 28.5   subdivision 3, is amended to read: 
 28.6      Subd. 3.  [FINANCIAL MANAGEMENT.] (a) The commissioner 
 28.7   shall manage spending for the MinnesotaCare program in a manner 
 28.8   that maintains a minimum reserve equal to five percent of the 
 28.9   expected cost of state premium subsidies.  The commissioner must 
 28.10  make a quarterly assessment of the expected expenditures for the 
 28.11  covered services for the remainder of the current fiscal year 
 28.12  and for the following two fiscal years.  The estimated 
 28.13  expenditure shall be compared to an estimate of the revenues 
 28.14  that will be deposited in the health care access fund.  Based on 
 28.15  this comparison, and after consulting with the chairs of the 
 28.16  house ways and means committee and the senate finance committee, 
 28.17  and the legislative commission on health care access, the 
 28.18  commissioner shall make adjustments as necessary to ensure that 
 28.19  expenditures remain within the limits of available revenues. The 
 28.20  adjustments the commissioner may use must be implemented in this 
 28.21  order:  first, stop enrollment of single adults and households 
 28.22  without children; second, upon 45 days' notice, stop coverage of 
 28.23  single adults and households without children already enrolled 
 28.24  in the MinnesotaCare program; third, upon 90 days' notice, 
 28.25  decrease the premium subsidy amounts by ten percent for families 
 28.26  with gross annual income above 200 percent of the federal 
 28.27  poverty guidelines; fourth, upon 90 days' notice, decrease the 
 28.28  premium subsidy amounts by ten percent for families with gross 
 28.29  annual income at or below 200 percent; and fifth, require 
 28.30  applicants to be uninsured for at least six months prior to 
 28.31  eligibility in the MinnesotaCare program.  If these measures are 
 28.32  insufficient to limit the expenditures to the estimated amount 
 28.33  of revenue, the commissioner may further limit enrollment or 
 28.34  decrease premium subsidies. 
 28.35     The reserve referred to in this subdivision is appropriated 
 28.36  to the commissioner but may only be used upon approval of the 
 29.1   commissioner of finance, if estimated costs will exceed the 
 29.2   forecasted amount of available revenues after all adjustments 
 29.3   authorized under this subdivision have been made. 
 29.4      By February 1, 1995, the department of human services and 
 29.5   the department of health shall develop a plan to adjust benefit 
 29.6   levels, eligibility guidelines, or other steps necessary to 
 29.7   ensure that expenditures for the MinnesotaCare program are 
 29.8   contained within the two percent taxes imposed under section 
 29.9   295.52 and the gross premiums tax imposed under section 60A.15, 
 29.10  subdivision 1, paragraph (e), for fiscal year 1997.  
 29.11     (b) Notwithstanding paragraph (a), the commissioner shall 
 29.12  proceed with the enrollment of single adults and households 
 29.13  without children in accordance with section 256.9354, 
 29.14  subdivision 5, paragraph (a), even if the expenditures do not 
 29.15  remain within the limits of available revenues through fiscal 
 29.16  year 1997 to allow the departments of human services and health 
 29.17  to develop the plan required under paragraph (a). 
 29.18     Sec. 41.  Minnesota Statutes 1994, section 256.9352, is 
 29.19  amended by adding a subdivision to read: 
 29.20     Subd. 5.  [CHOICE OF PLAN.] The commissioner shall develop 
 29.21  and offer to enrollees one or more higher-cost sharing 
 29.22  MinnesotaCare plans.  These plans must require a deductible, and 
 29.23  higher copayments and coinsurance than those required under 
 29.24  section 256.9353.  The higher-cost sharing plans must in all 
 29.25  other respects comply with the requirements of sections 256.9351 
 29.26  to 256.9362.  The commissioner shall reduce the premiums paid by 
 29.27  enrollees who choose to be covered under a higher cost-sharing 
 29.28  plan.  The premium reduction for each plan must reflect all of 
 29.29  the cost savings that result from the cost-sharing requirements 
 29.30  of the plan.  
 29.31     Sec. 42.  Minnesota Statutes 1994, section 256.9354, 
 29.32  subdivision 5, is amended to read: 
 29.33     Subd. 5.  [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO 
 29.34  CHILDREN.] (a) Beginning October 1, 1994, "eligible persons" 
 29.35  shall include all individuals and households with no children 
 29.36  who have gross family incomes that are equal to or less than 125 
 30.1   percent of the federal poverty guidelines and who are not 
 30.2   eligible for medical assistance without a spenddown under 
 30.3   chapter 256B.  
 30.4      (b) Beginning October 1, 1995, "eligible persons" means all 
 30.5   individuals and families who are not eligible for medical 
 30.6   assistance without a spenddown under chapter 256B.  
 30.7      (c) All eligible persons under paragraphs (a) and (b) this 
 30.8   subdivision are eligible for coverage through the MinnesotaCare 
 30.9   program but must pay a premium as determined under sections 
 30.10  256.9357 and 256.9358.  Individuals and families whose income is 
 30.11  greater than the limits established under section 256.9358 may 
 30.12  not enroll in the MinnesotaCare program. 
 30.13     Sec. 43.  Minnesota Statutes 1994, section 256.9358, is 
 30.14  amended by adding a subdivision to read: 
 30.15     Subd. 7.  [REDUCTION IN SUBSIDY.] Beginning with premium 
 30.16  payments due on or after July 1, 1995, the commissioner shall 
 30.17  reduce the state's share of the MinnesotaCare subsidized premium 
 30.18  as follows: 
 30.19     (a) by ten percent for enrollees with incomes greater than 
 30.20  125 percent but less than 150 percent of the federal poverty 
 30.21  guidelines; 
 30.22     (b) by 20 percent for enrollees with incomes greater than 
 30.23  150 percent but less than 200 percent of the federal poverty 
 30.24  guidelines; and 
 30.25     (c) by 40 percent for enrollees with incomes greater than 
 30.26  200 percent of the federal poverty guidelines. 
 30.27     The commissioner shall retain all savings resulting from 
 30.28  these subsidy reductions in the health care access account. 
 30.29     Sec. 44.  [REPEALER; REGULATED ALL-PAYER OPTION.] 
 30.30     Subdivision 1.  [RAPO CHAPTER; SHORT-TERM LIMITS.] 
 30.31  Minnesota Statutes 1994, sections 62P.01; 62P.02; 62P.03; 
 30.32  62P.04; 62P.05; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 62P.17; 
 30.33  62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; and 
 30.34  62P.33, are repealed. 
 30.35     Subd. 2.  [RAPO TIMETABLE.] Minnesota Statutes 1994, 
 30.36  section 62J.017, is repealed. 
 31.1      Subd. 3.  [RAPO AND TECHNOLOGY EVALUATION.] Minnesota 
 31.2   Statutes 1994, section 62J.152, is repealed. 
 31.3      Sec. 45.  [REPEALER; OTHER MINNESOTACARE PROVISIONS.] 
 31.4      Subdivision 1.  [GROWTH LIMITS.] Minnesota Statutes 1994, 
 31.5   section 62J.04, subdivisions 1, 1a, 7, and 9, are repealed. 
 31.6      Subd. 2.  [TECHNOLOGY ADVISORY COMMITTEE.] Minnesota 
 31.7   Statutes 1994, sections 13.99, subdivision 19a; 62J.15; and 
 31.8   62J.156, are repealed. 
 31.9      Subd. 3.  [PRACTICE PARAMETER ADVISORY COMMITTEE.] 
 31.10  Minnesota Statutes 1994, section 62J.32, subdivision 4, is 
 31.11  repealed. 
 31.12     Subd. 4.  [PRACTICE PARAMETER INITIATIVES.] Minnesota 
 31.13  Statutes 1994, section 62J.34, is repealed. 
 31.14     Subd. 5.  [UNIQUE PATIENT IDENTIFICATION NUMBERS.] 
 31.15  Minnesota Statutes 1994, section 62J.54, subdivision 4; and 
 31.16  62J.55, are repealed. 
 31.17     Subd. 6.  [PROHIBITION ON EXCLUSIVE PROVIDER CONTRACTS.] 
 31.18  Minnesota Statutes 1994, section 62Q.09, is repealed. 
 31.19     Subd. 7.  [RURAL HEALTH ADVISORY COMMITTEE.] Minnesota 
 31.20  Statutes 1994, section 144.1481, is repealed. 
 31.21     Subd. 8.  [UNIVERSAL MANDATE AND RELATED INSURANCE REFORM.] 
 31.22  Minnesota Statutes 1994, sections 62Q.18, subdivisions 2, 3, 4, 
 31.23  6, 8, and 9, are repealed effective the day following final 
 31.24  enactment. 
 31.25     Subd. 9.  [MINIMUM LOSS RATIOS.] Minnesota Statutes 1994, 
 31.26  sections 62A.021; and 62L.08, subdivision 11, are repealed 
 31.27  effective the day following final enactment. 
 31.28     Subd. 10.  [REQUEST FOR ERISA EXEMPTION.] Laws 1992, 
 31.29  chapter 549, article 3, section 19, is repealed effective the 
 31.30  day following final enactment. 
 31.31     Subd. 11.  [24-HOUR COVERAGE.] Laws 1994, chapter 625, 
 31.32  article 5, section 7, is repealed effective the day following 
 31.33  final enactment. 
 31.34     Sec. 46.  [EFFECTIVE DATES.] 
 31.35     Section 37 (comparative information on health plan 
 31.36  companies) is effective August 1, 1995.  Section 39 (deductibles 
 32.1   without limit) is effective January 1, 1996.  All other sections 
 32.2   are effective the day following final enactment. 
 32.3                              ARTICLE 2
 32.4                    MEDICAL CARE SAVINGS ACCOUNTS
 32.5      Section 1.  [62S.01] [CITATION.] 
 32.6      This chapter shall be known and may be cited as the 
 32.7   "medical care savings account act." 
 32.8      Sec. 2.  [62S.02] [DEFINITIONS.] 
 32.9      Subdivision 1.  [APPLICABILITY.] For purposes of this 
 32.10  chapter the terms defined in this section have the meanings 
 32.11  given. 
 32.12     Subd. 2.  [ACCOUNT ADMINISTRATOR.] "Account administrator" 
 32.13  means any of the following: 
 32.14     (1) a health plan company as defined in section 62Q.01, 
 32.15  subdivision 4; 
 32.16     (2) a third-party administrator licensed under section 
 32.17  60A.23, subdivision 8; 
 32.18     (3) a certified public accountant licensed to practice in 
 32.19  this state under section 326.19; 
 32.20     (4) an attorney licensed to practice in this state; or 
 32.21     (5) an employer that participates in the medical care 
 32.22  savings account program, but with respect only to the employer's 
 32.23  own plan and the plans of related organizations as defined in 
 32.24  sections 302A.011, 317A.011, and 322B.03. 
 32.25     Subd. 3.  [CONTRIBUTOR.] "Contributor" means a participant, 
 32.26  a dependent of a participant, or an employer, who contributes 
 32.27  money into a medical care savings account. 
 32.28     Subd. 4.  [DEDUCTIBLE.] "Deductible" means the total 
 32.29  deductible for a participant and all the dependents of that 
 32.30  participant for a plan year. 
 32.31     Subd. 5.  [DEPENDENT.] "Dependent" means a participant's 
 32.32  spouse, unmarried child who is under the age of 19 years, 
 32.33  unmarried child under the age of 25 years who is a full-time 
 32.34  student as defined in section 62A.301, dependent child of any 
 32.35  age who is handicapped and who meets the eligibility criteria in 
 32.36  section 62A.14, subdivision 2, or any other person whom state or 
 33.1   federal law requires to be treated as a dependent for purposes 
 33.2   of health plans.  For the purpose of this definition, a child 
 33.3   may include a child for whom the participant or the 
 33.4   participant's spouse has been appointed legal guardian. 
 33.5      Subd. 6.  [ELIGIBLE EXPENSE.] "Eligible expense" means an 
 33.6   expense incurred by an individual for medical, dental, or vision 
 33.7   care as described in section 213(d) of the Internal Revenue Code 
 33.8   of 1986, as amended. 
 33.9      Subd. 7.  [HIGHER DEDUCTIBLE.] "Higher deductible" means a 
 33.10  deductible of not less than $1,000 and not more than $5,000 for 
 33.11  calendar year 1995.  The commissioner of commerce shall annually 
 33.12  adjust this minimum and maximum to reflect changes in the 
 33.13  Consumer Price Index for urban consumers (CPI-U). The adjustment 
 33.14  must be issued no later than October 1 of each year and must be 
 33.15  based upon the most recent index available as of September 1 of 
 33.16  that year. 
 33.17     Subd. 8.  [MEDICAL CARE SAVINGS ACCOUNT OR ACCOUNT.] 
 33.18  "Medical care savings account" or "account" means an account 
 33.19  established by an individual, or by an employer on behalf of an 
 33.20  employee, as part of a medical care savings account plan. 
 33.21     Subd. 9.  [MEDICAL CARE SAVINGS ACCOUNT PLAN OR PLAN.] 
 33.22  "Medical care savings account plan" or "plan" means an 
 33.23  arrangement that meets the requirements of this chapter, 
 33.24  including the following: 
 33.25     (1) the purchase by an employer or individual of a 
 33.26  qualified higher deductible health plan for the benefit of a 
 33.27  participant and the participant's dependents; 
 33.28     (2) contribution to a medical care savings account by a 
 33.29  contributor; and 
 33.30     (3) an account administrator to administer the medical care 
 33.31  savings account from which payment of claims is made. 
 33.32     Subd. 10.  [PARTICIPANT.] "Participant" means an employed, 
 33.33  self-employed, or nonemployed individual who:  (1) has 
 33.34  established a medical care savings account, or has had a medical 
 33.35  care savings account established by an employer on the 
 33.36  individual's behalf; and (2) participates in a medical care 
 34.1   savings account plan. 
 34.2      Subd. 11.  [QUALIFIED HIGHER DEDUCTIBLE HEALTH PLAN.] 
 34.3   "Qualified higher deductible health plan" means a health plan, 
 34.4   as defined in section 62A.011, that provides for payments for 
 34.5   covered benefits that exceed a specified higher deductible and 
 34.6   that is purchased by an employer or individual for the benefit 
 34.7   of a participant under a medical care savings account plan. 
 34.8      Sec. 3.  [62S.03] [ESTABLISHMENT.] 
 34.9      Subdivision 1.  [EMPLOYERS.] Beginning January 1, 1996, an 
 34.10  employer, except as otherwise provided by law, contract, or 
 34.11  collective bargaining agreement, may offer to employees a 
 34.12  medical care savings account plan, subject to the requirements 
 34.13  of this chapter.  The plan must be on a calendar year basis. 
 34.14     An employer that offers a medical care savings account plan 
 34.15  shall inform all employees in writing, before making any 
 34.16  contributions, of the federal tax status of contributions made 
 34.17  under this chapter. 
 34.18     Subd. 2.  [INDIVIDUALS.] For tax years beginning on or 
 34.19  after January 1, 1996, an employed, self-employed, or 
 34.20  nonemployed individual may establish a medical care savings 
 34.21  account and participate in a medical care savings account plan, 
 34.22  subject to the requirements of this chapter.  A plan established 
 34.23  by an individual must be on a calendar year basis, unless the 
 34.24  individual's tax year is not on a calendar year basis, in which 
 34.25  case the plan year must correspond with the individual's tax 
 34.26  year. 
 34.27     Subd. 3.  [CONTRIBUTIONS INTO ACCOUNT.] A contributor may 
 34.28  deposit into a medical care savings account, on behalf of a 
 34.29  participant, all or part of the deductible of the qualified 
 34.30  higher deductible health plan purchased. 
 34.31     Sec. 4.  [62S.04] [ADMINISTRATION.] 
 34.32     Subdivision 1.  [NOTIFICATION.] No later than 30 days after 
 34.33  an account administrator begins to administer an account, and no 
 34.34  later than November 1 of subsequent years, the administrator 
 34.35  shall notify in writing each participant of the date of the last 
 34.36  business day of the medical care savings account plan year. 
 35.1      Subd. 2.  [USE OF FUNDS.] The account administrator shall 
 35.2   use the funds held in a medical care savings account solely for 
 35.3   the purpose of paying the eligible expenses of the participant 
 35.4   or the participant's dependents.  Funds held in a medical care 
 35.5   savings account must not be used to cover medical, dental, and 
 35.6   vision expenses of a participant or a participant's dependents 
 35.7   that are otherwise covered, including, but not limited to, 
 35.8   expenses covered by an automobile insurance policy, workers' 
 35.9   compensation insurance policy or self-insured plan, or another 
 35.10  health coverage policy, certificate, or contract. 
 35.11     Subd. 3.  [REIMBURSEMENT.] Upon receipt of documentation of 
 35.12  eligible expenses incurred by a participant in the plan year, 
 35.13  the account administrator shall reimburse the participant from 
 35.14  the participant's account for eligible expenses.  Eligible 
 35.15  expenses incurred during a plan year and not submitted to the 
 35.16  account administrator during that plan year, or submitted to the 
 35.17  plan administrator during that plan year but not reimbursed 
 35.18  during that plan year, may be reimbursed by the account 
 35.19  administrator in the subsequent plan year. 
 35.20     Subd. 4.  [ADVANCE TO PARTICIPANT.] If an employer makes 
 35.21  contributions to a participant's medical care savings account on 
 35.22  a periodic installment basis, the employer shall advance to the 
 35.23  participant, interest free, the amount necessary to cover 
 35.24  eligible expenses incurred by the participant that exceed the 
 35.25  amount in the participant's medical care savings account at the 
 35.26  time the expense is incurred, if the participant agrees in 
 35.27  writing to repay the advance from future installments.  The 
 35.28  total amount advanced by an employer during a tax year must not 
 35.29  exceed the total to be contributed by the employer to the 
 35.30  participant's medical care savings account during that plan year.
 35.31     Subd. 5.  [CARRYOVER.] Money remaining in a participant's 
 35.32  medical care savings account at the end of a plan year remains 
 35.33  in the account for the next plan year, and may be used to pay 
 35.34  for future eligible expenses of the participant or the 
 35.35  participant's dependents. 
 35.36     Subd. 6.  [PARTICIPATION AT START OF PLAN YEAR.] (a) 
 36.1   Employers that offer a medical care savings account plan shall 
 36.2   allow employees to begin participation only at the start of a 
 36.3   plan year.  Employers may offer alternative health care coverage 
 36.4   to employees who become eligible for or choose to enroll in 
 36.5   employee-sponsored health care coverage during the interim 
 36.6   period before the start of a plan year. 
 36.7      (b) An individual establishing a medical care savings 
 36.8   account may begin participation in a medical care savings 
 36.9   account plan only at the start of a tax year. 
 36.10     Subd. 7.  [INTEREST.] A medical care savings account may 
 36.11  earn interest, to be credited to the account, but the principal 
 36.12  balance of the account, including accrued interest, must not 
 36.13  vary in any way based upon market conditions. 
 36.14     Sec. 5.  [62S.05] [TAXATION OF WITHDRAWALS.] 
 36.15     Subdivision 1.  [WITHDRAWALS FOR OTHER PURPOSES.] A 
 36.16  participant may withdraw money from a medical care savings 
 36.17  account for any purpose other than a purpose described in 
 36.18  section 62S.04, subdivision 2, only on the last business day of 
 36.19  the medical care savings account plan year.  Money withdrawn 
 36.20  under this subdivision is subject to taxation as income to the 
 36.21  extent provided in section 290.01, subdivision 19a. 
 36.22     Subd. 2.  [BANKRUPTCY.] The amount of a disbursement of any 
 36.23  assets of a medical care savings account as a result of a filing 
 36.24  for protection under the federal bankruptcy code, United States 
 36.25  Code, title 11, sections 101 to 1330, as amended, by a 
 36.26  participant or person for whose benefit the account was 
 36.27  established is not considered a withdrawal for purposes of this 
 36.28  section.  The amount of disbursement is not subject to taxation 
 36.29  under chapter 290. 
 36.30     Sec. 6.  [62S.06] [CHANGES IN PARTICIPANT STATUS.] 
 36.31     Subdivision 1.  [DEATH OF PARTICIPANT.] Upon the death of a 
 36.32  participant, the account administrator shall distribute the 
 36.33  principal and accumulated interest of the medical care savings 
 36.34  account to the personal representative or heirs of the 
 36.35  participant, unless the participant's personal representative or 
 36.36  heirs request the account administrator to continue to 
 37.1   administer the medical care savings account.  If this request is 
 37.2   made, the account administrator shall retain the account balance 
 37.3   for use by the personal representative or heirs for eligible 
 37.4   expenses, including health plan continuation premiums, and 
 37.5   withdrawals under section 62S.05 until the medical care savings 
 37.6   account fund balance is exhausted.  If the account balance is 
 37.7   distributed to the personal representative or heirs of the 
 37.8   participant, the funds are subject to taxation to the extent 
 37.9   provided in section 290.01, subdivision 19a, unless the 
 37.10  participant's personal representative or heirs deposit the 
 37.11  account balance in another medical care savings account within 
 37.12  60 days of the distribution. 
 37.13     Subd. 2.  [CHANGES IN EMPLOYMENT STATUS.] (a) If an 
 37.14  employee who was a participant in an employer's medical care 
 37.15  savings account plan is no longer employed by the employer, the 
 37.16  employee may transfer the account to a new administrator, if the 
 37.17  employee's new employer offers a medical care savings account 
 37.18  plan.  The employee must notify the new administrator of the 
 37.19  request for transfer within 60 days after the employee's final 
 37.20  day of employment with the previous employer.  An employer 
 37.21  sponsoring a medical care savings account plan shall accept all 
 37.22  requests for account transfers by new employees, if the request 
 37.23  for a transfer is made within this 60-day period, regardless of 
 37.24  whether the new employee is then otherwise eligible to 
 37.25  participate in the new employer's plan.  The new administrator 
 37.26  must arrange with the former administrator for transfer of the 
 37.27  account, and the former administrator must transfer the full 
 37.28  account balance promptly. 
 37.29     (b) If the employee does not request a transfer under 
 37.30  paragraph (a), the employee may request in writing to the former 
 37.31  employer's account administrator, no later than 60 days after 
 37.32  the employee's final day of employment, that the account remain 
 37.33  with that administrator.  If the administrator rejects the 
 37.34  employee's request, the former employer shall mail a check 
 37.35  payable to the former employee, in the amount of the former 
 37.36  employee's account balance, to the employee's last known address 
 38.1   no later than 30 days after the expiration of the 60-day period, 
 38.2   or 30 days after rejecting the request, whichever is earlier.  
 38.3   That amount is subject to taxation to the extent provided under 
 38.4   section 290.01, subdivision 19a, unless the employee establishes 
 38.5   or becomes a participant in another medical care savings account 
 38.6   and deposits the full amount received from the former employer 
 38.7   in that account, within 60 days of receipt. 
 38.8      Sec. 7.  Minnesota Statutes 1994, section 290.01, 
 38.9   subdivision 19a, is amended to read: 
 38.10     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
 38.11  individuals, estates, and trusts, there shall be added to 
 38.12  federal taxable income: 
 38.13     (1)(i) interest income on obligations of any state other 
 38.14  than Minnesota or a political or governmental subdivision, 
 38.15  municipality, or governmental agency or instrumentality of any 
 38.16  state other than Minnesota exempt from federal income taxes 
 38.17  under the Internal Revenue Code or any other federal statute, 
 38.18  and 
 38.19     (ii) exempt-interest dividends as defined in section 
 38.20  852(b)(5) of the Internal Revenue Code, except the portion of 
 38.21  the exempt-interest dividends derived from interest income on 
 38.22  obligations of the state of Minnesota or its political or 
 38.23  governmental subdivisions, municipalities, governmental agencies 
 38.24  or instrumentalities, but only if the portion of the 
 38.25  exempt-interest dividends from such Minnesota sources paid to 
 38.26  all shareholders represents 95 percent or more of the 
 38.27  exempt-interest dividends that are paid by the regulated 
 38.28  investment company as defined in section 851(a) of the Internal 
 38.29  Revenue Code, or the fund of the regulated investment company as 
 38.30  defined in section 851(h) of the Internal Revenue Code, making 
 38.31  the payment; and 
 38.32     (iii) for the purposes of items (i) and (ii), interest on 
 38.33  obligations of an Indian tribal government described in section 
 38.34  7871(c) of the Internal Revenue Code shall be treated as 
 38.35  interest income on obligations of the state in which the tribe 
 38.36  is located; 
 39.1      (2) the amount of income taxes paid or accrued within the 
 39.2   taxable year under this chapter and income taxes paid to any 
 39.3   other state or to any province or territory of Canada, to the 
 39.4   extent allowed as a deduction under section 63(d) of the 
 39.5   Internal Revenue Code, but the addition may not be more than the 
 39.6   amount by which the itemized deductions as allowed under section 
 39.7   63(d) of the Internal Revenue Code exceeds the amount of the 
 39.8   standard deduction as defined in section 63(c) of the Internal 
 39.9   Revenue Code.  For the purpose of this paragraph, the 
 39.10  disallowance of itemized deductions under section 68 of the 
 39.11  Internal Revenue Code of 1986, income tax is the last itemized 
 39.12  deduction disallowed; 
 39.13     (3) the capital gain amount of a lump sum distribution to 
 39.14  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
 39.15  Reform Act of 1986, Public Law Number 99-514, applies; and 
 39.16     (4) the amount of income taxes paid or accrued within the 
 39.17  taxable year under this chapter and income taxes paid to any 
 39.18  other state or any province or territory of Canada, to the 
 39.19  extent allowed as a deduction in determining federal adjusted 
 39.20  gross income.  For the purpose of this paragraph, income taxes 
 39.21  do not include the taxes imposed by sections 290.0922, 
 39.22  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
 39.23  and 
 39.24     (5) a withdrawal from a medical care savings account under 
 39.25  section 62S.05, subdivision 1, other than a withdrawal that 
 39.26  qualifies under section 62S.05, subdivision 2. 
 39.27     Sec. 8.  Minnesota Statutes 1994, section 290.01, 
 39.28  subdivision 19b, is amended to read: 
 39.29     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
 39.30  individuals, estates, and trusts, there shall be subtracted from 
 39.31  federal taxable income: 
 39.32     (1) interest income on obligations of any authority, 
 39.33  commission, or instrumentality of the United States to the 
 39.34  extent includable in taxable income for federal income tax 
 39.35  purposes but exempt from state income tax under the laws of the 
 39.36  United States; 
 40.1      (2) if included in federal taxable income, the amount of 
 40.2   any overpayment of income tax to Minnesota or to any other 
 40.3   state, for any previous taxable year, whether the amount is 
 40.4   received as a refund or as a credit to another taxable year's 
 40.5   income tax liability; 
 40.6      (3) the amount paid to others not to exceed $650 for each 
 40.7   dependent in grades kindergarten to 6 and $1,000 for each 
 40.8   dependent in grades 7 to 12, for tuition, textbooks, and 
 40.9   transportation of each dependent in attending an elementary or 
 40.10  secondary school situated in Minnesota, North Dakota, South 
 40.11  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
 40.12  legally fulfill the state's compulsory attendance laws, which is 
 40.13  not operated for profit, and which adheres to the provisions of 
 40.14  the Civil Rights Act of 1964 and chapter 363.  As used in this 
 40.15  clause, "textbooks" includes books and other instructional 
 40.16  materials and equipment used in elementary and secondary schools 
 40.17  in teaching only those subjects legally and commonly taught in 
 40.18  public elementary and secondary schools in this state.  
 40.19  "Textbooks" does not include instructional books and materials 
 40.20  used in the teaching of religious tenets, doctrines, or worship, 
 40.21  the purpose of which is to instill such tenets, doctrines, or 
 40.22  worship, nor does it include books or materials for, or 
 40.23  transportation to, extracurricular activities including sporting 
 40.24  events, musical or dramatic events, speech activities, driver's 
 40.25  education, or similar programs.  In order to qualify for the 
 40.26  subtraction under this clause the taxpayer must elect to itemize 
 40.27  deductions under section 63(e) of the Internal Revenue Code; 
 40.28     (4) to the extent included in federal taxable income, 
 40.29  distributions from a qualified governmental pension plan, an 
 40.30  individual retirement account, simplified employee pension, or 
 40.31  qualified plan covering a self-employed person that represent a 
 40.32  return of contributions that were included in Minnesota gross 
 40.33  income in the taxable year for which the contributions were made 
 40.34  but were deducted or were not included in the computation of 
 40.35  federal adjusted gross income.  The distribution shall be 
 40.36  allocated first to return of contributions until the 
 41.1   contributions included in Minnesota gross income have been 
 41.2   exhausted.  This subtraction applies only to contributions made 
 41.3   in a taxable year prior to 1985; 
 41.4      (5) income as provided under section 290.0802; 
 41.5      (6) the amount of unrecovered accelerated cost recovery 
 41.6   system deductions allowed under subdivision 19g; 
 41.7      (7) to the extent included in federal adjusted gross 
 41.8   income, income realized on disposition of property exempt from 
 41.9   tax under section 290.491; and 
 41.10     (8) to the extent not deducted in determining federal 
 41.11  taxable income, the amount paid for health insurance of 
 41.12  self-employed individuals as determined under section 162(l) of 
 41.13  the Internal Revenue Code, except that the 25 percent limit does 
 41.14  not apply.  If the taxpayer deducted insurance payments under 
 41.15  section 213 of the Internal Revenue Code of 1986, the 
 41.16  subtraction under this clause must be reduced by the lesser of: 
 41.17     (i) the total itemized deductions allowed under section 
 41.18  63(d) of the Internal Revenue Code, less state, local, and 
 41.19  foreign income taxes deductible under section 164 of the 
 41.20  Internal Revenue Code and the standard deduction under section 
 41.21  63(c) of the Internal Revenue Code; or 
 41.22     (ii) the lesser of (A) the amount of insurance qualifying 
 41.23  as "medical care" under section 213(d) of the Internal Revenue 
 41.24  Code to the extent not deducted under section 162(1) of the 
 41.25  Internal Revenue Code or excluded from income or (B) the total 
 41.26  amount deductible for medical care under section 213(a); and 
 41.27     (9) contributions to and investment income attributable to 
 41.28  medical care savings accounts, as defined in section 62S.02. 
 41.29     Sec. 9.  Minnesota Statutes 1994, section 290.01, 
 41.30  subdivision 19d, is amended to read: 
 41.31     Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
 41.32  TAXABLE INCOME.] For corporations, there shall be subtracted 
 41.33  from federal taxable income after the increases provided in 
 41.34  subdivision 19c:  
 41.35     (1) the amount of foreign dividend gross-up added to gross 
 41.36  income for federal income tax purposes under section 78 of the 
 42.1   Internal Revenue Code; 
 42.2      (2) the amount of salary expense not allowed for federal 
 42.3   income tax purposes due to claiming the federal jobs credit 
 42.4   under section 51 of the Internal Revenue Code; 
 42.5      (3) any dividend (not including any distribution in 
 42.6   liquidation) paid within the taxable year by a national or state 
 42.7   bank to the United States, or to any instrumentality of the 
 42.8   United States exempt from federal income taxes, on the preferred 
 42.9   stock of the bank owned by the United States or the 
 42.10  instrumentality; 
 42.11     (4) amounts disallowed for intangible drilling costs due to 
 42.12  differences between this chapter and the Internal Revenue Code 
 42.13  in taxable years beginning before January 1, 1987, as follows: 
 42.14     (i) to the extent the disallowed costs are represented by 
 42.15  physical property, an amount equal to the allowance for 
 42.16  depreciation under Minnesota Statutes 1986, section 290.09, 
 42.17  subdivision 7, subject to the modifications contained in 
 42.18  subdivision 19e; and 
 42.19     (ii) to the extent the disallowed costs are not represented 
 42.20  by physical property, an amount equal to the allowance for cost 
 42.21  depletion under Minnesota Statutes 1986, section 290.09, 
 42.22  subdivision 8; 
 42.23     (5) the deduction for capital losses pursuant to sections 
 42.24  1211 and 1212 of the Internal Revenue Code, except that: 
 42.25     (i) for capital losses incurred in taxable years beginning 
 42.26  after December 31, 1986, capital loss carrybacks shall not be 
 42.27  allowed; 
 42.28     (ii) for capital losses incurred in taxable years beginning 
 42.29  after December 31, 1986, a capital loss carryover to each of the 
 42.30  15 taxable years succeeding the loss year shall be allowed; 
 42.31     (iii) for capital losses incurred in taxable years 
 42.32  beginning before January 1, 1987, a capital loss carryback to 
 42.33  each of the three taxable years preceding the loss year, subject 
 42.34  to the provisions of Minnesota Statutes 1986, section 290.16, 
 42.35  shall be allowed; and 
 42.36     (iv) for capital losses incurred in taxable years beginning 
 43.1   before January 1, 1987, a capital loss carryover to each of the 
 43.2   five taxable years succeeding the loss year to the extent such 
 43.3   loss was not used in a prior taxable year and subject to the 
 43.4   provisions of Minnesota Statutes 1986, section 290.16, shall be 
 43.5   allowed; 
 43.6      (6) an amount for interest and expenses relating to income 
 43.7   not taxable for federal income tax purposes, if (i) the income 
 43.8   is taxable under this chapter and (ii) the interest and expenses 
 43.9   were disallowed as deductions under the provisions of section 
 43.10  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
 43.11  federal taxable income; 
 43.12     (7) in the case of mines, oil and gas wells, other natural 
 43.13  deposits, and timber for which percentage depletion was 
 43.14  disallowed pursuant to subdivision 19c, clause (11), a 
 43.15  reasonable allowance for depletion based on actual cost.  In the 
 43.16  case of leases the deduction must be apportioned between the 
 43.17  lessor and lessee in accordance with rules prescribed by the 
 43.18  commissioner.  In the case of property held in trust, the 
 43.19  allowable deduction must be apportioned between the income 
 43.20  beneficiaries and the trustee in accordance with the pertinent 
 43.21  provisions of the trust, or if there is no provision in the 
 43.22  instrument, on the basis of the trust's income allocable to 
 43.23  each; 
 43.24     (8) for certified pollution control facilities placed in 
 43.25  service in a taxable year beginning before December 31, 1986, 
 43.26  and for which amortization deductions were elected under section 
 43.27  169 of the Internal Revenue Code of 1954, as amended through 
 43.28  December 31, 1985, an amount equal to the allowance for 
 43.29  depreciation under Minnesota Statutes 1986, section 290.09, 
 43.30  subdivision 7; 
 43.31     (9) the amount included in federal taxable income 
 43.32  attributable to the credits provided in Minnesota Statutes 1986, 
 43.33  section 273.1314, subdivision 9, or Minnesota Statutes, section 
 43.34  469.171, subdivision 6; 
 43.35     (10) amounts included in federal taxable income that are 
 43.36  due to refunds of income, excise, or franchise taxes based on 
 44.1   net income or related minimum taxes paid by the corporation to 
 44.2   Minnesota, another state, a political subdivision of another 
 44.3   state, the District of Columbia, or a foreign country or 
 44.4   possession of the United States to the extent that the taxes 
 44.5   were added to federal taxable income under section 290.01, 
 44.6   subdivision 19c, clause (1), in a prior taxable year; 
 44.7      (11) the following percentage of royalties, fees, or other 
 44.8   like income accrued or received from a foreign operating 
 44.9   corporation or a foreign corporation which is part of the same 
 44.10  unitary business as the receiving corporation: 
 44.11        Taxable Year 
 44.12        Beginning After .......... Percentage 
 44.13        December 31, 1988 ........ 50 percent 
 44.14        December 31, 1990 ........ 80 percent;    
 44.15     (12) income or gains from the business of mining as defined 
 44.16  in section 290.05, subdivision 1, clause (a), that are not 
 44.17  subject to Minnesota franchise tax; 
 44.18     (13) the amount of handicap access expenditures in the 
 44.19  taxable year which are not allowed to be deducted or capitalized 
 44.20  under section 44(d)(7) of the Internal Revenue Code of 1986; 
 44.21     (14) the amount of qualified research expenses not allowed 
 44.22  for federal income tax purposes under section 280C(c) of the 
 44.23  Internal Revenue Code, but only to the extent that the amount 
 44.24  exceeds the amount of the credit allowed under section 290.068; 
 44.25  and 
 44.26     (15) the amount of salary expenses not allowed for federal 
 44.27  income tax purposes due to claiming the Indian employment credit 
 44.28  under section 45A(a) of the Internal Revenue Code of 1986, as 
 44.29  amended through December 31, 1993; and 
 44.30     (16) to the extent included in federal taxable income for 
 44.31  the taxable year, investment income attributable to a medical 
 44.32  care savings account, as defined in section 62S.02. 
 44.33     Sec. 10.  [EFFECTIVE DATE.] 
 44.34     Sections 1 to 9 (medical savings accounts) are effective 
 44.35  January 1, 1996, and apply to all tax years beginning on or 
 44.36  after that date. 
 45.1                              ARTICLE 3
 45.2                      MEDICAL MALPRACTICE REFORM
 45.3      Section 1.  [548.061] [NONECONOMIC LOSSES; LIMITATION; 
 45.4   NEGLIGENCE OF A HEALTH CARE PROVIDER.] 
 45.5      (a) In any action for injury against a health care provider 
 45.6   based on professional negligence, the injured plaintiff shall be 
 45.7   entitled to recover noneconomic losses to compensate for pain, 
 45.8   suffering, inconvenience, physical impairment, disfigurement, 
 45.9   and other nonpecuniary damage. 
 45.10     (b) In no action shall the amount of damages for 
 45.11  noneconomic losses exceed $250,000 for any injured plaintiff. 
 45.12     (c) For purposes of this section, "health care provider" 
 45.13  means a physician, surgeon, dentist, or other health care 
 45.14  professional or hospital, including all persons or entities 
 45.15  providing health care as defined in section 145.61, subdivisions 
 45.16  2 and 4, or a certified health care professional employed by or 
 45.17  providing services as an independent contractor in a hospital. 
 45.18     Sec. 2.  Minnesota Statutes 1994, section 549.01, is 
 45.19  amended to read: 
 45.20     549.01 [AGREEMENT AS TO FEES OF ATTORNEY.] 
 45.21     Subdivision 1.  [DEFINITIONS.] For purposes of this section:
 45.22     (1) "health care provider" means a physician, surgeon, 
 45.23  dentist, or other health care professional or hospital, 
 45.24  including all persons or entities providing health care as 
 45.25  defined in section 145.61, subdivisions 2 and 4, or a certified 
 45.26  health care professional employed by or providing services as an 
 45.27  independent contractor in a hospital; and 
 45.28     (2) "contingency fee" means any fee for professional legal 
 45.29  services which is in whole or in part dependent upon the 
 45.30  recovery of any amount of damages, whether through judgment or 
 45.31  settlement. 
 45.32     Subd. 2.  [FEES GENERALLY.] Other than as provided in 
 45.33  subdivision 3, a party shall have an unrestricted right to agree 
 45.34  with an attorney as to compensation for services, and the 
 45.35  measure and mode thereof; but certain sums may be allowed to the 
 45.36  prevailing party for expenses in an action, which are termed 
 46.1   costs.  
 46.2      Subd. 3.  [CONTINGENCY FEES; ACTIONS AGAINST A HEALTH CARE 
 46.3   PROVIDER.] (a) An attorney shall not contract for or collect a 
 46.4   contingency fee for representing any person seeking damages in 
 46.5   connection with an action or claim for injury or damage against 
 46.6   a health care provider based upon the person's alleged 
 46.7   professional negligence in excess of the following limits: 
 46.8      (1) 40 percent of the first $50,000 recovered; 
 46.9      (2) 33-1/3 percent of the next $50,000 recovered; 
 46.10     (3) 20 percent of the next $400,000 recovered; and 
 46.11     (4) 10 percent of any amount recovered above $500,000. 
 46.12     The limitations apply regardless of whether the recovery is 
 46.13  by settlement, arbitration, or judgment, or whether the person 
 46.14  for whom the recovery is made is a responsible adult, an infant, 
 46.15  or a person of unsound mind. 
 46.16     (b) An attorney must not receive contingency fees on any 
 46.17  portion of a recovery for noneconomic or punitive damages. 
 46.18     (c) If the judgment, arbitration award, or settlement 
 46.19  includes periodic or future payments of damages, the amount 
 46.20  recovered for purposes of this section is the cost of the 
 46.21  annuity or trust established to make the payments, or if there 
 46.22  is no annuity or trust, the present value of the payments. 
 46.23     Subd. 4.  [VIOLATION OF SECTION.] A fee contracted for in 
 46.24  violation of this section is void and unenforceable.  A claimant 
 46.25  affected by a violation of this section may bring an action in 
 46.26  the court in which the claim was or could have been brought, for 
 46.27  damages in the amount of three times the fee improperly 
 46.28  contracted for or collected, reasonable attorney fees, and other 
 46.29  relief to which the person may be entitled. 
 46.30     Sec. 3.  Minnesota Statutes 1994, section 595.02, 
 46.31  subdivision 5, is amended to read: 
 46.32     Subd. 5.  [WAIVER OF PRIVILEGE FOR HEALTH CARE PROVIDERS.] 
 46.33  A party who commences an action or makes a claim for 
 46.34  malpractice, error, mistake, or failure to cure, whether based 
 46.35  on contract or tort, against a health care provider on the 
 46.36  person's own behalf or in a representative capacity, waives in 
 47.1   that action or claim any privilege existing under subdivision 1, 
 47.2   paragraphs (d) and (g), as to any information or opinion in the 
 47.3   possession of a health care provider who has examined or cared 
 47.4   for the party or other person whose health or medical condition 
 47.5   has been placed in controversy in the action or claim.  This 
 47.6   waiver must permit all parties to the action or claim, and their 
 47.7   attorneys or authorized representatives, to informally discuss 
 47.8   the information or opinion with the health care provider if the 
 47.9   provider consents.  Prior to an informal discussion with a 
 47.10  health care provider, the defendant must mail written notice to 
 47.11  the other party at least 15 days before the discussion.  The 
 47.12  plaintiff's attorney or authorized representative must have the 
 47.13  opportunity to be present at any informal discussion.  
 47.14  Appropriate medical authorizations permitting discussion must be 
 47.15  provided by the party commencing the action upon request from 
 47.16  any other party. 
 47.17     A health care provider may refuse to consent to the 
 47.18  discussion but, in that event, the party seeking the information 
 47.19  or opinion may take the deposition of the health care provider 
 47.20  with respect to that information and opinion, without obtaining 
 47.21  a prior court order. 
 47.22     For purposes of this subdivision, "health care provider" 
 47.23  means a physician, surgeon, dentist, or other health care 
 47.24  professional or hospital, including all persons or entities 
 47.25  providing health care as defined in section 145.61, subdivisions 
 47.26  2 and 4, or a certified health care professional employed by or 
 47.27  providing services as an independent contractor in a hospital. 
 47.28     Sec. 4.  Minnesota Statutes 1994, section 604.02, is 
 47.29  amended by adding a subdivision to read: 
 47.30     Subd. 4.  [APPORTIONMENT OF DAMAGES; MEDICAL MALPRACTICE.] 
 47.31  Notwithstanding subdivisions 1 to 3, for purposes of medical 
 47.32  malpractice actions, when two or more persons are jointly 
 47.33  liable, contributions to awards shall be in proportion to the 
 47.34  percentage of fault attributable to each. 
 47.35     Sec. 5.  Minnesota Statutes 1994, section 604.11, is 
 47.36  amended by adding a subdivision to read: 
 48.1      Subd. 4.  [PAYMENT OF ATTORNEY FEES OF PREVAILING 
 48.2   PARTY.] In an action for medical malpractice, each prevailing 
 48.3   party shall be reimbursed for its reasonable attorney fees and 
 48.4   expenses by the nonprevailing party or parties.  The amount of 
 48.5   the reasonable attorney fees and expenses must be determined by 
 48.6   agreement of the parties or by the court upon motion. 
 48.7      Sec. 6.  [EFFECTIVE DATE.] 
 48.8      Sections 1 (noneconomic damage) and 4 (apportionment of 
 48.9   damages) are effective the day following final enactment and 
 48.10  apply to claims and causes of action arising on or after that 
 48.11  date.  Sections 2 (contingent fee limit), 3 (waiver of 
 48.12  privilege), and 5 (payment of winner's attorney fees) are 
 48.13  effective January 1, 1996, and apply to claims made and causes 
 48.14  of action commenced on or after that date.