SF 1998

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; assessing health maintenance
organizations for purposes of the insurance fraud
prevention account; regulating certain rates, claims,
filing, and reporting practices; eliminating expanded
provider network requirements; amending Minnesota
Statutes 2004, sections 45.0135, subdivision 7;
62E.05, subdivision 2; 62L.08, subdivision 8; 62Q.75,
subdivision 2, by adding a subdivision; 72A.201,
subdivision 4; 256B.692, subdivision 2; 295.582;
repealing Minnesota Statutes 2004, sections 62E.035;
62Q.095; 62Q.64.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 45.0135,
subdivision 7, is amended to read:

Subd. 7.

Assessment.

Each insurer authorized to sell
insurance in the state of Minnesota shall remit an assessment to
the commissioner for deposit in the insurance fraud prevention
account on or before June 1 of each year. The amount of the
assessment shall be based on the insurer's total assets and on
the insurer's total written Minnesota premium, for the preceding
fiscal year, as reported pursuant to section 60A.13. The
assessment is calculated as follows:

Total Assets Assessment
Less than $100,000,000 $ 200
$100,000,000 to $1,000,000,000 $ 750
Over $1,000,000,000 $2,000

Minnesota Written Premium Assessment
Less than $10,000,000 $ 200
$10,000,000 to $100,000,000 $ 750
Over $100,000,000 $2,000

For purposes of this subdivision, the following entities
are not considered to be insurers authorized to sell insurance
in the state of Minnesota: risk retention groups; new text begin or new text end township
mutuals organized under chapter 67A deleted text begin ; or health maintenance
organizations organized under chapter 62D deleted text end .

Sec. 2.

Minnesota Statutes 2004, section 62E.05,
subdivision 2, is amended to read:

Subd. 2.

Annual report.

deleted text begin (a) All health plan companies,
as defined in section 62Q.01, shall annually report to the
commissioner responsible for their regulation. The following
information shall be reported to the appropriate commissioner on
February 1 of each year:
deleted text end

deleted text begin (1) the number of individuals and groups who received
coverage in the prior year through the qualified plans; and
deleted text end

deleted text begin (2) the number of individuals and groups who received
coverage in the prior year through each of the unqualified plans
sold by the company.
deleted text end

deleted text begin (b) deleted text end The state of Minnesota or any of its departments,
agencies, programs, instrumentalities, or political
subdivisions, shall report in writing to the association and to
the commissioner of commerce no later than September 15 of each
year regarding the number of persons and the amount of premiums,
deductibles, co-payments, or coinsurance that it paid for on
behalf of enrollees in the Comprehensive Health Association.
This report must contain only summary information and must not
include any individually identifiable data. The report must
cover the 12-month period ending the preceding June 30.

Sec. 3.

Minnesota Statutes 2004, section 62L.08,
subdivision 8, is amended to read:

Subd. 8.

Filing requirement.

deleted text begin No later than July 1, 1993,
and each year thereafter, deleted text end A health carrier that offers, sells,
issues, or renews a health benefit plan for small employers
shall file with the commissioner the index rates and must
demonstrate that all rates shall be within the rating
restrictions defined in this chapter. Such demonstration must
include the allowable range of rates from the index rates and a
description of how the health carrier intends to use demographic
factors including case characteristics in calculating the
premium rates. The rates shall not be approved, unless the
commissioner has determined that the rates are reasonable. In
determining reasonableness, the commissioner shall consider the
growth rates applied under section 62J.04, subdivision 1,
paragraph (b), to the calendar year or years that the proposed
premium rate would be in effect, actuarially valid changes in
risk associated with the enrollee population, and actuarially
valid changes as a result of statutory changes in Laws 1992,
chapter 549. deleted text begin For premium rates proposed to go into effect
between July 1, 1993 and December 31, 1993, the pertinent growth
rate is the growth rate applied under section 62J.04,
subdivision 1, paragraph (b), to calendar year 1994.
deleted text end

Sec. 4.

Minnesota Statutes 2004, section 62Q.75,
subdivision 2, is amended to read:

Subd. 2.

Claims payments.

(a) This section applies to
clean claims submitted to a health plan company or third-party
administrator for services provided by any:

(1) health care provider, as defined in section 62Q.74, but
does not include a provider licensed under chapter 151;

(2) home health care provider, as defined in section
144A.43, subdivision 4; or

(3) health care facility.

All health plan companies and third-party administrators must
pay or deny claims that are clean claims within 30 calendar days
after the date upon which the health plan company or third-party
administrator received the claim.

(b) The health plan company or third-party administrator
shall, upon request, make available to the provider information
about the status of a claim submitted by the provider consistent
with section 62J.581.

(c) If a health plan company or third-party administrator
does not pay or deny a clean claim within the period provided in
paragraph (a), the health plan company or third-party
administrator must pay interest on the claim for the period
beginning on the day after the required payment date specified
in paragraph (a) and ending on the date on which the health plan
company or third-party administrator makes the payment or denies
the claim. In any payment, the health plan company or
third-party administrator must itemize any interest payment
being made separately from other payments being made for
services provided. new text begin The health plan company or third-party
administrator shall not require the health care provider to bill
the health plan company or third-party administrator for the
interest required under this section before any interest payment
is made. new text end Interest payments must be made to the health care
provider no less frequently than quarterly.

(d) The rate of interest paid by a health plan company or
third-party administrator under this subdivision shall be 1.5
percent per month or any part of a month.

(e) A health plan company or third-party administrator is
not required to make an interest payment on a claim for which
payment has been delayed for purposes of reviewing potentially
fraudulent or abusive billing practices.

(f) The commissioner may assess a financial administrative
penalty against a health plan company for violation of this
subdivision when there is a pattern of abuse that demonstrates a
lack of good faith effort and a systematic failure of the health
plan company to comply with this subdivision.

Sec. 5.

Minnesota Statutes 2004, section 62Q.75, is
amended by adding a subdivision to read:

new text begin Subd. 3. new text end

new text begin Claims filing. new text end

new text begin Unless otherwise provided by
contract, by section 16A.124, subdivision 4a, or by federal law,
the health care providers and facilities specified in
subdivision 2, must submit their charges to a health plan
company or third-party administrator within six months from the
date of service or the date the health care provider knew or was
informed of the correct name and address of the responsible
health plan company or third-party administrator, whichever is
later. A health care provider or facility that does not submit
charges within the six-month period shall not be reimbursed for
the charge and may not collect the charge from the recipient of
the service or any other payer. This subdivision also applies
to all health care providers and facilities that submit charges
to workers' compensation payers for treatment of a workers'
compensation injury compensable under chapter 176.
new text end

Sec. 6.

Minnesota Statutes 2004, section 72A.201,
subdivision 4, is amended to read:

Subd. 4.

Standards for claim filing and handling.

The
following acts by an insurer, an adjuster, a self-insured, or a
self-insurance administrator constitute unfair settlement
practices:

(1) except for claims made under a deleted text begin health insurance deleted text end policy
new text begin of accident and sickness insurance new text end , after receiving notification
of claim from an insured or a claimant, failing to acknowledge
receipt of the notification of the claim within ten business
days, and failing to promptly provide all necessary claim forms
and instructions to process the claim, unless the claim is
settled within ten business days. The acknowledgment must
include the telephone number of the company representative who
can assist the insured or the claimant in providing information
and assistance that is reasonable so that the insured or
claimant can comply with the policy conditions and the insurer's
reasonable requirements. If an acknowledgment is made by means
other than writing, an appropriate notation of the
acknowledgment must be made in the claim file of the insurer and
dated. An appropriate notation must include at least the
following information where the acknowledgment is by telephone
or oral contact:

(i) the telephone number called, if any;

(ii) the name of the person making the telephone call or
oral contact;

(iii) the name of the person who actually received the
telephone call or oral contact;

(iv) the time of the telephone call or oral contact; and

(v) the date of the telephone call or oral contact;

(2) failing to reply, within ten business days of receipt,
to all other communications about a claim from an insured or a
claimant that reasonably indicate a response is requested or
needed;

(3) new text begin (i) new text end unless provided otherwise by new text begin clause (ii) or (iii),
other new text end law new text begin , new text end or in the policy, failing to complete its
investigation and inform the insured or claimant of acceptance
or denial of a claim within 30 business days after receipt of
notification of claim unless the investigation cannot be
reasonably completed within that time. In the event that the
investigation cannot reasonably be completed within that time,
the insurer shall notify the insured or claimant within the time
period of the reasons why the investigation is not complete and
the expected date the investigation will be complete. For
claims made under a deleted text begin health deleted text end policy new text begin of accident and sickness
insurance, new text end the notification of claim must be in writing;

new text begin (ii) for claims submitted under a policy of accident and
sickness insurance, the insurer must comply with all of the
requirements of section 62Q.75. The commissioner may not assess
a financial administrative penalty against a health plan company
for violation of that section;
new text end

new text begin (iii) for claims submitted under a policy of accident and
sickness insurance that are accepted, the insurer must notify
the insured or claimant no less than semiannually of the
disposition of claims of the insured or claimant. For purposes
of this clause, acceptance of a claim means that there is no
additional financial liability for the insured or claimant,
either because there is a flat co-payment amount specified in
the health plan or because there is no co-payment, deductible,
or coinsurance owed;
new text end

(4) where evidence of suspected fraud is present, the
requirement to disclose their reasons for failure to complete
the investigation within the time period set forth in clause (3)
need not be specific. The insurer must make this evidence
available to the Department of Commerce if requested;

(5) failing to notify an insured who has made a
notification of claim of all available benefits or coverages
which the insured may be eligible to receive under the terms of
a policy and of the documentation which the insured must supply
in order to ascertain eligibility;

(6) unless otherwise provided by law or in the policy,
requiring an insured to give written notice of loss or proof of
loss within a specified time, and thereafter seeking to relieve
the insurer of its obligations if the time limit is not complied
with, unless the failure to comply with the time limit
prejudices the insurer's rights and then only if the insurer
gave prior notice to the insured of the potential prejudice;

(7) advising an insured or a claimant not to obtain the
services of an attorney or an adjuster, or representing that
payment will be delayed if an attorney or an adjuster is
retained by the insured or the claimant;

(8) failing to advise in writing an insured or claimant who
has filed a notification of claim known to be unresolved, and
who has not retained an attorney, of the expiration of a statute
of limitations at least 60 days prior to that expiration. For
the purposes of this clause, any claim on which the insurer has
received no communication from the insured or claimant for a
period of two years preceding the expiration of the applicable
statute of limitations shall not be considered to be known to be
unresolved and notice need not be sent pursuant to this clause;

(9) demanding information which would not affect the
settlement of the claim;

(10) unless expressly permitted by law or the policy,
refusing to settle a claim of an insured on the basis that the
responsibility should be assumed by others;

(11) failing, within 60 business days after receipt of a
properly executed proof of loss, to advise the insured of the
acceptance or denial of the claim by the insurer. No insurer
shall deny a claim on the grounds of a specific policy
provision, condition, or exclusion unless reference to the
provision, condition, or exclusion is included in the denial.
The denial must be given to the insured in writing with a copy
filed in the claim file;

(12) denying or reducing a claim on the basis of an
application which was altered or falsified by the agent or
insurer without the knowledge of the insured;

(13) failing to notify the insured of the existence of the
additional living expense coverage when an insured under a
homeowners policy sustains a loss by reason of a covered
occurrence and the damage to the dwelling is such that it is not
habitable;

(14) failing to inform an insured or a claimant that the
insurer will pay for an estimate of repair if the insurer
requested the estimate and the insured or claimant had
previously submitted two estimates of repair.

Sec. 7.

Minnesota Statutes 2004, section 256B.692,
subdivision 2, is amended to read:

Subd. 2.

Duties of the commissioner of health.

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

(b) A county that elects to purchase medical assistance and
general assistance medical care services under this section must
satisfy the commissioner of health that the requirements for
assurance of consumer protection, provider protection, and
fiscal solvency of chapter 62D, applicable to health maintenance
organizations, or chapter 62N, applicable to community
integrated service networks, will be met.

(c) A county must also assure the commissioner of health
that the requirements of sections 62J.041; 62J.48; 62J.71 to
62J.73; 62M.01 to 62M.16; all applicable provisions of chapter
62Q, including sections 62Q.075; 62Q.1055; 62Q.106; 62Q.12;
62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 62Q.43;
62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; deleted text begin 62Q.64; deleted text end 62Q.68 to
62Q.72; and 72A.201 will be met.

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

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

Sec. 8.

Minnesota Statutes 2004, section 295.582, is
amended to read:

295.582 AUTHORITY.

(a) A hospital, surgical center, or health care provider
that is subject to a tax under section 295.52, or a pharmacy
that has paid additional expense transferred under this section
by a wholesale drug distributor, may transfer additional expense
generated by section 295.52 obligations on to all third-party
contracts for the purchase of health care services on behalf of
a patient or consumer. The additional expense transferred to
the third-party purchaser must not exceed the tax percentage
specified in section 295.52 multiplied against the gross
revenues received under the third-party contract, and the tax
percentage specified in section 295.52 multiplied against
co-payments and deductibles paid by the individual patient or
consumer. The expense must not be generated on revenues derived
from payments that are excluded from the tax under section
295.53. All third-party purchasers of health care services
including, but not limited to, third-party purchasers regulated
under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79,
or 79A, or under section 471.61 or 471.617, must pay the
transferred expense in addition to any payments due under
existing contracts with the hospital, surgical center, pharmacy,
or health care provider, to the extent allowed under federal
law. A third-party purchaser of health care services includes,
but is not limited to, a health carrier or community integrated
service network that pays for health care services on behalf of
patients or that reimburses, indemnifies, compensates, or
otherwise insures patients for health care services. A
third-party purchaser shall comply with this section regardless
of whether the third-party purchaser is a for-profit,
not-for-profit, or nonprofit entity. A wholesale drug
distributor may transfer additional expense generated by section
295.52 obligations to entities that purchase from the
wholesaler, and the entities must pay the additional expense.
Nothing in this section limits the ability of a hospital,
surgical center, pharmacy, wholesale drug distributor, or health
care provider to recover all or part of the section 295.52
obligation by other methods, including increasing fees or
charges.

(b) deleted text begin Each third-party purchaser regulated under any chapter
cited in paragraph (a) shall include with its annual renewal for
certification of authority or licensure documentation indicating
compliance with paragraph (a).
deleted text end

deleted text begin (c) deleted text end Any hospital, surgical center, or health care provider
subject to a tax under section 295.52 or a pharmacy that has
paid additional expense transferred under this section by a
wholesale drug distributor may file a complaint with the
commissioner responsible for regulating the third-party
purchaser if at any time the third-party purchaser fails to
comply with paragraph (a).

deleted text begin (d) deleted text end new text begin (c) new text end If the commissioner responsible for regulating the
third-party purchaser finds at any time that the third-party
purchaser has not complied with paragraph (a), the commissioner
may take enforcement action against a third-party purchaser
which is subject to the commissioner's regulatory jurisdiction
and which does not allow a hospital, surgical center, pharmacy,
or provider to pass-through the tax. The commissioner may by
order fine or censure the third-party purchaser or revoke or
suspend the certificate of authority or license of the
third-party purchaser to do business in this state if the
commissioner finds that the third-party purchaser has not
complied with this section. The third-party purchaser may
appeal the commissioner's order through a contested case hearing
in accordance with chapter 14.

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 62E.035; 62Q.095; and
62Q.64, are repealed.
new text end