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HF 2115

as introduced - 90th Legislature (2017 - 2018) Posted on 03/16/2017 04:05pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/06/2017

Current Version - as introduced

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A bill for an act
relating to health care; establishing medical assistance hospital outcomes program
and managed care organization outcomes program; proposing coding for new law
in Minnesota Statutes, chapter 256B.

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

Section 1.

new text begin [256B.90] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin For the purposes of this section to section 256B.94, the
following terms have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Avoidable hospital use. new text end

new text begin "Avoidable hospital use" means individually or
collectively potentially avoidable admissions, potentially avoidable emergency visits, and
potentially avoidable readmissions.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of human services.
new text end

new text begin Subd. 4. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Human Services.
new text end

new text begin Subd. 5. new text end

new text begin Hospital. new text end

new text begin "Hospital" means a public or private institution licensed as a hospital
under section 144.50 that participates in medical assistance.
new text end

new text begin Subd. 6. new text end

new text begin Managed care organization or MCO. new text end

new text begin "Managed care organization" or "MCO"
means a licensed managed care organization that the commissioner has contracted to provide,
or arrange for, services to medical assistance recipients.
new text end

new text begin Subd. 7. new text end

new text begin Medical assistance. new text end

new text begin "Medical assistance" means the state's Medicaid program
under title XIX of the Social Security Act and administered according to this chapter.
new text end

new text begin Subd. 8. new text end

new text begin Potentially avoidable admission. new text end

new text begin "Potentially avoidable admission" means
an admission of an individual to a hospital or long-term care facility that may have reasonably
been prevented with adequate access to ambulatory care or health care coordination.
new text end

new text begin Subd. 9. new text end

new text begin Potentially avoidable ancillary service. new text end

new text begin "Potentially avoidable ancillary
service" means a health care service provided or ordered by a physician or other health care
provider to supplement or support the evaluation or treatment of an individual, including a
diagnostic test, laboratory test, therapy service, or radiology service, that may not be
reasonably necessary for the provision of quality health care or treatment.
new text end

new text begin Subd. 10. new text end

new text begin Potentially avoidable complication. new text end

new text begin "Potentially avoidable complication"
means a harmful event or negative outcome with respect to an individual, including an
infection or surgical complication, that: (1) occurs after the individual's admission to a
hospital or long-term care facility; and (2) may have resulted from the care, lack of care, or
treatment provided during the hospital or long-term care facility stay rather than from a
natural progression of an underlying disease.
new text end

new text begin Subd. 11. new text end

new text begin Potentially avoidable emergency visit. new text end

new text begin "Potentially avoidable emergency
visit" means treatment of an individual in a hospital emergency room or freestanding
emergency medical care facility for a condition that may not require emergency medical
attention because the condition could be, or could have been, treated or prevented by a
physician or other health care provider in a nonemergency setting.
new text end

new text begin Subd. 12. new text end

new text begin Potentially avoidable event. new text end

new text begin "Potentially avoidable event" means a potentially
avoidable admission, potentially avoidable ancillary service, potentially avoidable
complication, potentially avoidable emergency visit, potentially avoidable readmission, or
a combination of those events.
new text end

new text begin Subd. 13. new text end

new text begin Potentially avoidable readmission. new text end

new text begin "Potentially avoidable readmission"
means a return hospitalization of an individual within a period specified by the commissioner
that may have resulted from deficiencies in the care or treatment provided to the individual
during a previous hospital stay or from deficiencies in posthospital discharge follow-up.
Potentially avoidable readmission does not include a hospital readmission necessitated by
the occurrence of unrelated events after the discharge. Potentially avoidable readmission
includes the readmission of an individual to a hospital for: (1) the same condition or
procedure for which the individual was previously admitted; (2) an infection or other
complication resulting from care previously provided; or (3) a condition or procedure that
indicates that a surgical intervention performed during a previous admission was unsuccessful
in achieving the anticipated outcome.
new text end

Sec. 2.

new text begin [256B.91] MEDICAL ASSISTANCE OUTCOMES-BASED PAYMENT
PROGRAMS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin The commissioner must establish and implement two linked
medical assistance outcomes-based payment programs:
new text end

new text begin (1) a hospital outcomes program under section 256B.92 to provide hospitals with
information and incentives to reduce potentially avoidable events; and
new text end

new text begin (2) an MCO outcomes program under section 256B.93 to provide MCOs with information
and incentives to reduce potentially avoidable events.
new text end

new text begin Subd. 2. new text end

new text begin Potentially avoidable event methodology. new text end

new text begin (a) The commissioner shall select
a methodology for identifying potentially avoidable events and for the costs associated with
these events, and for measuring hospital and MCO performance with respect to these events.
new text end

new text begin (b) The commissioner shall develop definitions for each potentially avoidable event
according to the selected methodology.
new text end

new text begin (c) To the extent possible, the methodology shall be one that has been used by other title
XIX programs under the Social Security Act or by commercial payers in health care outcomes
performance measurement and in outcome based payment programs. The methodology
shall be open, transparent, and available for review by the public.
new text end

new text begin Subd. 3. new text end

new text begin Medical assistance system waste. new text end

new text begin (a) The commissioner must conduct a
comprehensive analysis of relevant state databases to identify waste in the medical assistance
system.
new text end

new text begin (b) The analysis must identify instances of potentially avoidable events in medical
assistance, and the costs associated with these events. The overall estimate of waste must
be broken down into actionable categories including but not limited to regions, hospitals,
MCOs, physicians, service lines, diagnosis-related groups, medical conditions and procedures,
patient characteristics, provider characteristics, and medical assistance program type.
new text end

new text begin (c) Information collected from this analysis must be utilized in hospital and MCO
outcomes programs described in this section.
new text end

Sec. 3.

new text begin [256B.92] HOSPITAL OUTCOMES PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin The hospital outcomes program shall:
new text end

new text begin (1) target reduction of potentially avoidable readmissions and complications;
new text end

new text begin (2) apply to all state acute care hospitals participating in medical assistance. Program
adjustments may be made for certain types of hospitals; and
new text end

new text begin (3) be implemented in two phases: performance reporting and outcomes-based financial
incentives.
new text end

new text begin Subd. 2. new text end

new text begin Phase 1; performance reporting. new text end

new text begin (a) The commissioner shall develop and
maintain a reporting system to provide each hospital in Minnesota with regular confidential
reports regarding the hospital's performance for potentially avoidable readmissions and
potentially avoidable complications.
new text end

new text begin (b) The commissioner shall:
new text end

new text begin (1) conduct ongoing analyses of relevant state claims databases to identify instances of
potentially avoidable readmissions and potentially avoidable complications, and the
expenditures associated with these events;
new text end

new text begin (2) create or locate state readmission and complications norms;
new text end

new text begin (3) measure actual-to-expected hospital performance compared to state norms;
new text end

new text begin (4) compare hospitals with peers using risk adjustment procedures that account for the
severity of illness of each hospital's patients;
new text end

new text begin (5) distribute reports to hospitals to provide actionable information to create policies,
contracts, or programs designed to improve target outcomes; and
new text end

new text begin (6) foster collaboration among hospitals to share best practices.
new text end

new text begin (c) A hospital may share the information contained in the outcome performance reports
with physicians and other health care providers providing services at the hospital to foster
coordination and cooperation in the hospital's outcome improvement and waste reduction
initiatives.
new text end

new text begin Subd. 3. new text end

new text begin Phase 2; outcomes-based financial incentives. new text end

new text begin Twelve months after
implementation of performance reporting under subdivision 2, the commissioner must
establish financial incentives for a hospital to reduce potentially avoidable readmissions
and potentially avoidable complications.
new text end

new text begin Subd. 4. new text end

new text begin Rate adjustment methodology. new text end

new text begin (a) The commissioner must adjust the
reimbursement that a hospital receives under the All Patients Refined Diagnosis-Related
Group inpatient prospective payment system based on the hospital's performance exceeding,
or failing to achieve, outcome results based on the rates of potentially avoidable readmissions
and potentially avoidable complications.
new text end

new text begin (b) The rate adjustment methodology must:
new text end

new text begin (1) apply to each hospital discharge;
new text end

new text begin (2) determine a hospital-specific potentially avoidable outcome adjustment factor based
on the hospital's actual versus expected risk-adjusted performance compared to the state
norm;
new text end

new text begin (3) be based on a retrospective analysis of performance prospectively applied;
new text end

new text begin (4) include both rewards and penalties; and
new text end

new text begin (5) be communicated to a hospital in a clear and transparent manner.
new text end

new text begin Subd. 5. new text end

new text begin Amendment of contracts. new text end

new text begin The commissioner must amend contracts with
participating hospitals as necessary to incorporate the financial incentives established under
this section.
new text end

new text begin Subd. 6. new text end

new text begin Budget neutrality. new text end

new text begin The hospital outcomes program shall be implemented in a
budget-neutral manner for a hospital.
new text end

Sec. 4.

new text begin [256B.93] MANAGED CARE OUTCOMES PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin The MCO outcomes program must:
new text end

new text begin (1) target reduction of avoidable admissions, readmissions, and emergency visits;
new text end

new text begin (2) apply to all MCOs participating in medical assistance; and
new text end

new text begin (3) be implemented in two phases: performance reporting and outcomes-based financial
incentives.
new text end

new text begin Subd. 2. new text end

new text begin Phase 1; performance reporting. new text end

new text begin (a) The commissioner must develop and
maintain a reporting system to provide each MCO with regular confidential reports regarding
the MCO's performance for potentially avoidable admissions, potentially avoidable
readmissions, and potentially avoidable emergency visits.
new text end

new text begin (b) The commissioner shall:
new text end

new text begin (1) conduct ongoing analyses of relevant state claims databases to identify instances of
potentially avoidable admissions, potentially avoidable readmissions, and potentially
avoidable emergency visits along with expenditures associated with these events;
new text end

new text begin (2) create or locate state norms for admissions, readmissions, and emergency visits;
new text end

new text begin (3) measure actual-to-expected MCO performance compared to state norms;
new text end

new text begin (4) compare MCOs with peers using risk adjustment procedures that account for the
chronic illness burden of each plan's enrollees; and
new text end

new text begin (5) distribute reports to MCOs with actionable information to create policies, contracts,
or programs designed to improve target outcomes.
new text end

new text begin (c) An MCO may share the information contained in the outcome performance reports
with its participating providers to foster coordination and cooperation in the MCO's outcome
improvement and waste reduction initiatives.
new text end

new text begin Subd. 3. new text end

new text begin Phase 2; outcomes-based financial incentives. new text end

new text begin Twelve months after
implementation of performance reporting under subdivision 2, the commissioner must
establish financial incentives for an MCO to reduce potentially avoidable admissions,
potentially avoidable readmissions, and potentially avoidable emergency visits.
new text end

new text begin Subd. 4. new text end

new text begin Capitation rate adjustment. new text end

new text begin (a) The commissioner must adjust each MCO's
capitation rate based on the MCO's performance exceeding, or failing to achieve, outcome
results based on the rates of potentially avoidable readmissions, potentially avoidable
admissions, and potentially avoidable emergency visits.
new text end

new text begin (b) The methodology for determining an MCO's capitation rate adjustment must:
new text end

new text begin (1) apply to the plan's annual capitation rate;
new text end

new text begin (2) determine a plan's specific potentially avoidable outcome adjustment factor based
on the plan's actual versus expected risk-adjusted performance compared to the state norm;
new text end

new text begin (3) be based on a retrospective analysis of performance and prospectively applied;
new text end

new text begin (4) contain both rewards and penalties;
new text end

new text begin (5) include risk corridors; and
new text end

new text begin (6) be communicated to an MCO in a clear and transparent manner.
new text end

new text begin Subd. 5. new text end

new text begin Amendment of contracts. new text end

new text begin The commissioner must amend contracts with
participating MCOs as necessary to incorporate the financial incentives established under
this section.
new text end