HF 856

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:42am

A bill for an act
relating to human services; allowing medical assistance providers to repackage
and reprice services; establishing a health opportunity account demonstration
project for medical assistance enrollees; requiring the commissioner of human
services to develop and seek federal approval for a medical assistance reform
demonstration project; establishing a MinnesotaCare voucher demonstration
project; requiring the commissioner of human services to develop proposals
and a timetable for the reform and restructuring of state health care programs;
amending Minnesota Statutes 2008, section 256B.0754, by adding a subdivision;
proposing coding for new law in Minnesota Statutes, chapters 256B; 256L.

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

Section 1.

Minnesota Statutes 2008, section 256B.0754, is amended by adding a
subdivision to read:

new text begin Subd. 3. new text end

new text begin Repackaging and repricing services. new text end

new text begin Beginning January 1, 2010, the
commissioner shall regularly request proposals from health care providers serving
fee-for-service medical assistance enrollees to repackage and reprice their services. The
commissioner shall accept proposals for repackaging and repricing services if:
new text end

new text begin (1) the repriced, repackaged services do not increase total spending by the state;
new text end

new text begin (2) the quality of care received by patients will not decline; and
new text end

new text begin (3) the health care provider proposes a method to measure cost and quality to ensure
that the requirements of clauses (1) and (2) are met. The commissioner shall coordinate
the implementation of repackaged and repriced services with the implementation of the
payment reform provisions of sections 62U.02 to 62U.05.
new text end

Sec. 2.

new text begin [256B.0755] HEALTH OPPORTUNITY ACCOUNTS.
new text end

new text begin Subdivision 1. new text end

new text begin Demonstration project. new text end

new text begin The commissioner shall establish a health
opportunity account demonstration project that meets the criteria specified in section
6082 of the Deficit Reduction Act of 2005, (Public Law 109-171). Enrollment in the
demonstration project is voluntary and limited to 14,000 individuals. The commissioner
shall implement the demonstration project effective January 1, 2010, or upon federal
approval, whichever is later. The term of the demonstration project is five years.
new text end

new text begin Subd. 2. new text end

new text begin Project goals and requirements. new text end

new text begin (a) The demonstration project must
provide participants with alternative benefits, consisting of coverage of:
new text end

new text begin (1) all medical assistance services, after an annual deductible has been met; and
new text end

new text begin (2) contributions into a health opportunity account, which may be used to pay for
services subject to the deductible.
new text end

new text begin (b) The demonstration project must:
new text end

new text begin (1) create patient awareness of the high cost of medical care;
new text end

new text begin (2) provide incentives for patients to seek preventive health services;
new text end

new text begin (3) reduce the inappropriate use of health care services;
new text end

new text begin (4) enable patients to take responsibility for health care outcomes;
new text end

new text begin (5) provide enrollment counselors and ongoing education activities;
new text end

new text begin (6) require transactions involving health opportunity accounts to be conducted
electronically; and
new text end

new text begin (7) provide participants with access to negotiated provider payment rates.
new text end

new text begin Subd. 3. new text end

new text begin Eligible persons. new text end

new text begin (a) Participation in the demonstration project is limited
to families and children who are eligible for medical assistance under section 256B.055,
subdivisions 3, 3a, 9, 10, and 10b. Individuals who are disabled, age 65 or older, or
pregnant, and others excluded under section 1938(b) of the Social Security Act, are not
eligible to participate in the demonstration project.
new text end

new text begin (b) Participation in the demonstration project is voluntary. Enrollment is effective
for a period of 12 months, and may be extended for additional 12-month periods with
the consent of the individual. Enrollment in the demonstration project is subject to the
individual maintaining eligibility for medical assistance.
new text end

new text begin (c) An individual who, for any reason, is disenrolled from the demonstration project
is not permitted to re-enroll before the end of the one-year period that begins on the
effective date of disenrollment.
new text end

new text begin Subd. 4. new text end

new text begin Alternative benefits. new text end

new text begin (a) Participants in the demonstration project are
entitled to the following alternative benefits:
new text end

new text begin (1) coverage for medical expenses for items and services for which benefits are
otherwise provided under medical assistance after the annual deductible specified in
paragraph (b) has been met; and
new text end

new text begin (2) contributions into a health opportunity account.
new text end

new text begin (b) The amount of the annual deductible must be 100 percent of the annualized
amount of contributions to the health opportunity account. Preventive services, as defined
by the commissioner, are not subject to the annual deductible.
new text end

new text begin (c) After an individual has satisfied the annual deductible, alternative benefits for
that individual shall consist of the benefits that would otherwise be provided to that
individual under medical assistance, including cost sharing related to those benefits, had
the individual not been enrolled in the demonstration project. Each individual shall obtain
alternative benefits under this paragraph from the managed care plan or county-based
purchasing plan in which the individual was enrolled prior to entering the demonstration
project. The per capita payment for the provision of alternative services under the
demonstration project must not exceed the per capita payment under the prepaid medical
assistance program, adjusted for the deductible and any differences in the use of health
care services by the population served under the demonstration project.
new text end

new text begin Subd. 5. new text end

new text begin Account contributions and administration. new text end

new text begin (a) Contributions into a
health opportunity account may be made by the state and by other persons and entities
such as charitable organizations. The state shall contribute an annual amount into the
health opportunity account of each participating individual. For the calendar year 2009,
the amount contributed by the state must equal $2,765 for each eligible adult and $1,106
for each eligible child. For future calendar years, these amounts must be increased by the
change in the medical component of the Consumer Price Index for all urban consumers
(CPI-U).
new text end

new text begin (b) The commissioner shall contract with a third-party administrator to administer
health opportunity accounts.
new text end

new text begin (c) Amounts in, or contributed to, a health opportunity account must not be counted
as income or assets for purposes of determining medical assistance eligibility.
new text end

new text begin Subd. 6. new text end

new text begin Preventive care. new text end

new text begin The commissioner shall develop and provide incentives
for individuals enrolled in the demonstration project to obtain appropriate preventive
care. In developing these incentives, the commissioner shall consider additional account
contributions for individuals demonstrating healthy prevention practices and the provision
of preventive services or incentives for accessing preventive services that are in addition
to those available to medical assistance enrollees not participating in the demonstration
project.
new text end

new text begin Subd. 7. new text end

new text begin Allowed uses of account funds. new text end

new text begin (a) Except as provided in subdivision 10,
money in a health opportunity account may be used only for payment for medical care, as
defined in section 213(d) of the Internal Revenue Code of 1986.
new text end

new text begin (b) Money in a health opportunity account must not be used to pay providers for
items and services unless:
new text end

new text begin (1) the providers are licensed or otherwise authorized under state law to provide
the item or service; and
new text end

new text begin (2) the provider meets medical assistance program quality standards and complies
with medical assistance prohibitions related to fraud and abuse.
new text end

new text begin (c) Money in a health opportunity account must not be used to pay a provider for an
item or service if the commissioner determines that the item or service is not medically
appropriate or necessary.
new text end

new text begin (d) The commissioner shall establish procedures to:
new text end

new text begin (1) penalize or disenroll from the demonstration project individuals who make
nonqualified withdrawals from a health opportunity account; and
new text end

new text begin (2) recoup costs that derive from nonqualified withdrawals.
new text end

new text begin Subd. 8. new text end

new text begin Electronic debit card. new text end

new text begin The commissioner shall require all withdrawals
and payments from health opportunity accounts to be made using electronic debit cards.
new text end

new text begin Subd. 9. new text end

new text begin Access to negotiated provider payment rates. new text end

new text begin The commissioner shall
require managed care plans and county-based purchasing plans to:
new text end

new text begin (1) allow demonstration program participants, when subject to a deductible, to
obtain services from providers under contract with the plan at the same payment rate
that the provider would otherwise receive from the plan, had the individual not been
participating in the demonstration project; and
new text end

new text begin (2) allow demonstration program participants, when subject to a deductible, to
obtain services from providers who are not under contract with the plan, at payment rates
that do not exceed 125 percent of the medical assistance fee-for-service payment rate.
new text end

new text begin Subd. 10. new text end

new text begin Use of health opportunity account funds for persons who become
ineligible. new text end

new text begin (a) If a participant becomes ineligible for medical assistance because of
an increase in income or assets:
new text end

new text begin (1) the state shall make no further contributions to the participant's health
opportunity account; and
new text end

new text begin (2) the balance in the account that is not attributable to private contributions shall
be reduced by 25 percent.
new text end

new text begin (b) Following application of paragraph (a), money in the account shall remain
available to the account holder for three years from the date on which the individual
became ineligible for medical assistance, under the same terms and conditions that would
apply had the individual remained eligible for the demonstration project, except that the
money may also be used as provided in paragraphs (c) and (d).
new text end

new text begin (c) Money in the account may be used to purchase health coverage from a health
plan company. An account holder is not required to purchase a high-deductible policy as a
condition for maintaining or using the account.
new text end

new text begin (d) Individuals who have participated in the demonstration project for at least one
year may also use money in the account for job training, educational expenses, and other
uses as specified by the commissioner.
new text end

new text begin Subd. 11. new text end

new text begin Participation of enrollees served by managed care and county-based
purchasing. new text end

new text begin (a) Participation in the demonstration project by enrollees served by managed
care and county-based purchasing plans under sections 256B.69 and 256B.692 is subject
to the following conditions:
new text end

new text begin (1) the number of individuals enrolled in a specific plan who participate in the
demonstration project must not exceed five percent of the total statewide medical
assistance enrollment in the plan; and
new text end

new text begin (2) the proportion of medical assistance enrollees in a specific plan who participate
in the demonstration project must not be significantly disproportionate to the proportion of
medical assistance enrollees in other plans who participate.
new text end

new text begin (b) The commissioner shall adjust capitation payment rates and application of the
risk adjustment system under section 62Q.03 to reflect differences in the likely use of
health care services between plan enrollees who participate in the demonstration project
and plan enrollees who do not participate in the demonstration project.
new text end

new text begin (c) The commissioner, in consultation with managed care and county-based
purchasing plans, shall develop procedures to encourage demonstration project
participants with complex or chronic conditions to receive health care services from
providers certified as health care homes under section 256B.0751.
new text end

new text begin Subd. 12. new text end

new text begin Additional duties of the commissioner. new text end

new text begin (a) The commissioner
shall provide enrollment counselors and ongoing education for demonstration project
participants. The counseling and education must be designed to meet the project goals
specified in subdivision 2, paragraph (b), clauses (1) to (4), provide participants with
assistance in the use of electronic debit cards and in accessing providers and obtaining
negotiated provider payment rates, and provide participants with information on the
benefits of maintaining continuity of care by receiving services through the same health
care provider both prior to and after meeting the required deductible.
new text end

new text begin (b) The commissioner shall present annual progress reports on the demonstration
project to the legislature, beginning October 1, 2010, and each October 1 thereafter through
October 1, 2014. The commissioner shall include in the progress reports recommendations
for any state law changes necessary to improve operation of the demonstration project
or to comply with federal requirements. The commissioner shall include, in the report
due October 1, 2013, recommendations on whether the demonstration project should be
continued and expanded to include additional participants.
new text end

new text begin Subd. 13. new text end

new text begin Federal approval. new text end

new text begin The commissioner shall seek all federal approvals
necessary to establish and implement the health opportunity demonstration project as
required under this section.
new text end

Sec. 3.

new text begin [256B.0756] MEDICAL ASSISTANCE REFORM DEMONSTRATION
PROJECT.
new text end

new text begin Subdivision 1. new text end

new text begin Medical assistance reform demonstration project. new text end

new text begin The
commissioner of human services shall develop and seek federal approval to establish
a medical assistance reform demonstration project that meets the criteria specified in
this section. The commissioner shall submit the waiver request to the federal Centers
for Medicare and Medicaid Services by January 1, 2010, and shall implement the
demonstration project beginning July 1, 2011, or upon federal approval, whichever is later.
new text end

new text begin Subd. 2. new text end

new text begin Participation in the project. new text end

new text begin The demonstration project must operate in
one county within the seven-county metropolitan area and two counties outside of the
seven-county metropolitan area. Within each demonstration county, medical assistance
enrollees who are children, parents or relative caretakers, pregnant women, or age 65
or older shall be required to participate in the demonstration project if they are not
institutionalized, blind, or disabled.
new text end

new text begin Subd. 3. new text end

new text begin Risk-adjusted premium payments. new text end

new text begin The commissioner shall develop
risk-adjusted premium payments based on individual risk scores using historical
utilization data. Project participants may use the risk-adjusted premium payments to
enroll in a managed care plan or county-based purchasing plan providing services under
section 256B.69 or 256B.692, or to purchase employer-sponsored coverage or individual
coverage.
new text end

new text begin Subd. 4. new text end

new text begin Comprehensive and catastrophic premium components. new text end

new text begin In developing
risk-adjusted premium payments, the commissioner shall consider paying separate
premiums for a comprehensive care component and a catastrophic care component. If
the commissioner adopts this option, the comprehensive care component of the premium
must represent approximately 90 percent of the expected medical expenditures for reform
participants, and the catastrophic care component must take effect once a dollar threshold
or inpatient day threshold is reached. These thresholds may vary by target population.
new text end

new text begin Subd. 5. new text end

new text begin Benefit set. new text end

new text begin (a) Participating managed care and county-based purchasing
plans shall have the flexibility to develop benefit sets for participants paying risk-adjusted
premiums that vary from the standard medical assistance benefit set required under this
chapter. Benefit sets offered by a managed care or county-based purchasing plan must be
approved by the commissioner, and must meet the criteria specified in this subdivision.
new text end

new text begin (b) Each benefit set must include all federally required Medicaid benefits, but
managed care and county-based purchasing plans have the authority to determine which
optional benefits to include. Plans may develop benefit sets for specialized populations. A
plan may choose to offer a benefit set that is identical to the standard medical assistance
benefit set required under this chapter.
new text end

new text begin (c) A benefit set may vary the amount, duration, and scope of benefits, relative to
the standard medical assistance benefit set. A benefit set may contain service-specific
coverage limits that are different from the service-specific coverage limits that apply to
the standard medical assistance benefit set.
new text end

new text begin (d) Each benefit set must be actuarially equivalent to the standard medical assistance
benefit set for the average member of the target population, based on historical utilization
of services.
new text end

new text begin (e) Each benefit set must cover key benefits at a level sufficient to meet the needs of
the target population. The commissioner shall establish standards of sufficiency based on
the target population's historical use of health care services.
new text end

new text begin (f) Each benefit set must comply with the cost-sharing provisions of section
256B.0631.
new text end

new text begin Subd. 6. new text end

new text begin Maximum annual benefit. new text end

new text begin The commissioner shall determine a maximum
annual benefit limit for each target population. Pregnant women and children shall be
exempt from this limit.
new text end

new text begin Subd. 7. new text end

new text begin Enhanced benefits. new text end

new text begin The commissioner shall develop a list of preventive
care and healthy practices, and shall provide project participants with enhanced benefit
dollar credits of a specified amount for participating in each practice. The dollar credits
must be deposited into the participant's enhanced benefit account. Credits may be used to
purchase health care services not covered under the participant's benefit plan, and may be
used by persons who lose medical assistance eligibility to purchase private sector health
coverage. All credits must be paid directly from an individual's account to the provider of
the service and in no instance shall a project participant directly receive cash payments
from an account. Enhanced benefit credits shall be available to individuals for up to 36
months following the loss of medical assistance eligibility.
new text end

new text begin Subd. 8. new text end

new text begin Option to opt out. new text end

new text begin An individual may opt out of medical assistance
coverage and use the risk-adjusted premium payment to purchase employer-sponsored
or individual health coverage. The employer-sponsored or individual coverage must
meet all state requirements for health coverage, but may be more restrictive than medical
assistance coverage and need not meet the benefit set criteria specified in subdivision 5.
An individual choosing this option must be financially responsible for:
new text end

new text begin (1) all premium costs in excess of their risk-adjusted premium payment;
new text end

new text begin (2) all deductibles, co-payments, and other cost sharing; and
new text end

new text begin (3) the cost of all health benefits not covered under the employer-sponsored or
individual coverage.
new text end

new text begin If the risk-adjusted premium payment exceeds the employee premium contribution
under employer-sponsored coverage or the premium cost of individual coverage, the
individual may use the remainder of the risk-adjusted premium payment to purchase
family health coverage or supplemental health coverage.
new text end

new text begin Subd. 9. new text end

new text begin Annual reports; expansion to MinnesotaCare. new text end

new text begin The commissioner shall
present to the legislature annual reports on the implementation and operation of the
medical assistance reform demonstration project, beginning December 15, 2011, and each
December 15 thereafter for the duration of the project. The commissioner shall include in
the reports recommendations for any state law changes necessary to improve the operation
of the demonstration project or to comply with federal requirements. The commissioner
shall include in the report due December 15, 2012, recommendations on whether the
demonstration project should be expanded to include the MinnesotaCare program and, if
applicable, an implementation plan and draft legislation to accomplish the expansion.
new text end

Sec. 4.

new text begin [256B.0757] PROPOSAL FOR STATE HEALTH CARE PROGRAM
REFORM.
new text end

new text begin Subdivision 1. new text end

new text begin Evaluation. new text end

new text begin The commissioner shall evaluate the results of the:
new text end

new text begin (1) repackaging and repricing of medical assistance services under section
256B.0754, subdivision 3;
new text end

new text begin (2) health opportunity account demonstration project under section 256B.0755;
new text end

new text begin (3) the medical assistance reform demonstration project under section 256B.0756;
new text end

new text begin (4) the MinnesotaCare voucher demonstration project under section 256L.29,
including the commissioner's recommendations under section 256L.29, subdivision 4; and
new text end

new text begin (5) the payment reform initiatives under sections 62U.02 to 62U.05.
new text end

new text begin The commissioner shall identify, evaluate, and compare the effect of these initiatives
on health care costs and quality.
new text end

new text begin Subd. 2. new text end

new text begin Report to legislature. new text end

new text begin Based upon the evaluation in subdivision 1, the
commissioner shall develop and present to the legislature by January 1, 2015, a proposal
to reform and restructure the medical assistance, general assistance medical care, and
MinnesotaCare programs. The proposal must:
new text end

new text begin (1) provide enrollees with greater control of health care spending and allow enrollees
to become empowered consumers;
new text end

new text begin (2) strengthen care relationships between patients and health care providers and
reduce the role of third-party administrators in patient health care decisions;
new text end

new text begin (3) allow health care providers flexibility to redesign their services to provide
low-cost, high-quality care;
new text end

new text begin (4) financially reward providers for providing low-cost, high-quality care;
new text end

new text begin (5) allow enrollees a greater choice of providers and covered services by allowing
enrollees to choose among competing private sector health plan companies and allowing
state health care programs to offer a range of benefit sets through the private sector;
new text end

new text begin (6) allow state health care program enrollees greater access to private sector
long-term care coverage; and
new text end

new text begin (7) provide a ten-year timetable for phasing in the reform and restructuring of state
health care programs.
new text end

new text begin The proposal must include recommendations on whether the reform and
demonstration initiatives specified in subdivision 1 should be continued and expanded
statewide, and any legislation necessary to implement the proposal.
new text end

Sec. 5.

new text begin [256L.29] MINNESOTACARE VOUCHER DEMONSTRATION
PROJECT.
new text end

new text begin Subdivision 1. new text end

new text begin Development and federal approval. new text end

new text begin The commissioner shall
develop and seek federal approval for a three-year demonstration project to provide health
coverage vouchers on a monthly basis to MinnesotaCare enrollees. Participation in the
demonstration project by MinnesotaCare enrollees is voluntary, and the commissioner may
set a limit on the total number of demonstration project participants. The commissioner
shall implement the demonstration project on July 1, 2010, or upon federal approval,
whichever is later.
new text end

new text begin Subd. 2. new text end

new text begin Sliding scale for voucher payments. new text end

new text begin The commissioner shall establish
a sliding scale for voucher payments that varies with household income. The sliding
scale must provide a voucher payment to each enrollee that is equivalent to the premium
subsidy the enrollee would otherwise have received under the MinnesotaCare sliding scale
established in section 256L.15. The commissioner shall adjust the voucher payment
each January 1 to reflect any increases in the average subsidy provided under the
MinnesotaCare program.
new text end

new text begin Subd. 3. new text end

new text begin Use of voucher payments. new text end

new text begin Vouchers may be used by participants to
purchase health care coverage from a health plan company or may be used as contributions
into a health savings account. The commissioner shall deposit voucher payments on a
monthly basis directly into the health savings account designated by a voucher recipient.
new text end

new text begin Subd. 4. new text end

new text begin Report to legislature. new text end

new text begin The commissioner shall present to the legislature,
by December 15, 2012:
new text end

new text begin (1) an evaluation of the demonstration project, including recommendations on
whether the demonstration project should be continued or expanded;
new text end

new text begin (2) recommendations on whether the use of vouchers for the purchase of private
sector health coverage should be expanded to medical assistance and general assistance
medical care; and
new text end

new text begin (3) recommendations on whether the use of vouchers should be expanded to include
medical assistance coverage of long-term care services.
new text end