as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to human services; modifying provisions for 1.3 children's health insurance; amending Minnesota 1.4 Statutes 2000, sections 256.01, subdivision 2; 1.5 256.9657, subdivision 2; 256B.055, subdivision 3a; 1.6 256B.056, subdivision 4; 256B.057, subdivisions 2, 9, 1.7 and by adding a subdivision; 256B.0625, subdivisions 1.8 13, 13a, 18a, and 30; 256B.0635, subdivisions 1 and 2; 1.9 256B.69, subdivision 3a; 256B.75; 256J.31, subdivision 1.10 12; 256K.03, subdivision 1; 256K.07; 256L.02, 1.11 subdivision 4; 256L.06, subdivision 3; 256L.07, 1.12 subdivisions 1 and 3; and 256L.15, subdivision 1; 1.13 proposing coding for new law in Minnesota Statutes, 1.14 chapter 256B; repealing Minnesota Statutes 2000, 1.15 sections 256.01, subdivision 18; 256B.0635, 1.16 subdivision 3; 256J.32, subdivision 7a; and 256L.15, 1.17 subdivision 3. 1.18 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.19 Section 1. Minnesota Statutes 2000, section 256.01, 1.20 subdivision 2, is amended to read: 1.21 Subd. 2. [SPECIFIC POWERS.] Subject to the provisions of 1.22 section 241.021, subdivision 2, the commissioner of human 1.23 services shall: 1.24 (1) Administer and supervise all forms of public assistance 1.25 provided for by state law and other welfare activities or 1.26 services as are vested in the commissioner. Administration and 1.27 supervision of human services activities or services includes, 1.28 but is not limited to, assuring timely and accurate distribution 1.29 of benefits, completeness of service, and quality program 1.30 management. In addition to administering and supervising human 1.31 services activities vested by law in the department, the 2.1 commissioner shall have the authority to: 2.2 (a) require county agency participation in training and 2.3 technical assistance programs to promote compliance with 2.4 statutes, rules, federal laws, regulations, and policies 2.5 governing human services; 2.6 (b) monitor, on an ongoing basis, the performance of county 2.7 agencies in the operation and administration of human services, 2.8 enforce compliance with statutes, rules, federal laws, 2.9 regulations, and policies governing welfare services and promote 2.10 excellence of administration and program operation; 2.11 (c) develop a quality control program or other monitoring 2.12 program to review county performance and accuracy of benefit 2.13 determinations; 2.14 (d) require county agencies to make an adjustment to the 2.15 public assistance benefits issued to any individual consistent 2.16 with federal law and regulation and state law and rule and to 2.17 issue or recover benefits as appropriate; 2.18 (e) delay or deny payment of all or part of the state and 2.19 federal share of benefits and administrative reimbursement 2.20 according to the procedures set forth in section 256.017; 2.21 (f) make contracts with and grants to public and private 2.22 agencies and organizations, both profit and nonprofit, and 2.23 individuals, using appropriated funds; and 2.24 (g) enter into contractual agreements with federally 2.25 recognized Indian tribes with a reservation in Minnesota to the 2.26 extent necessary for the tribe to operate a federally approved 2.27 family assistance program or any other program under the 2.28 supervision of the commissioner. The commissioner shall consult 2.29 with the affected county or counties in the contractual 2.30 agreement negotiations, if the county or counties wish to be 2.31 included, in order to avoid the duplication of county and tribal 2.32 assistance program services. The commissioner may establish 2.33 necessary accounts for the purposes of receiving and disbursing 2.34 funds as necessary for the operation of the programs. 2.35 (2) Inform county agencies, on a timely basis, of changes 2.36 in statute, rule, federal law, regulation, and policy necessary 3.1 to county agency administration of the programs. 3.2 (3) Administer and supervise all child welfare activities; 3.3 promote the enforcement of laws protecting handicapped, 3.4 dependent, neglected and delinquent children, and children born 3.5 to mothers who were not married to the children's fathers at the 3.6 times of the conception nor at the births of the children; 3.7 license and supervise child-caring and child-placing agencies 3.8 and institutions; supervise the care of children in boarding and 3.9 foster homes or in private institutions; and generally perform 3.10 all functions relating to the field of child welfare now vested 3.11 in the state board of control. 3.12 (4) Administer and supervise all noninstitutional service 3.13 to handicapped persons, including those who are visually 3.14 impaired, hearing impaired, or physically impaired or otherwise 3.15 handicapped. The commissioner may provide and contract for the 3.16 care and treatment of qualified indigent children in facilities 3.17 other than those located and available at state hospitals when 3.18 it is not feasible to provide the service in state hospitals. 3.19 (5) Assist and actively cooperate with other departments, 3.20 agencies and institutions, local, state, and federal, by 3.21 performing services in conformity with the purposes of Laws 3.22 1939, chapter 431. 3.23 (6) Act as the agent of and cooperate with the federal 3.24 government in matters of mutual concern relative to and in 3.25 conformity with the provisions of Laws 1939, chapter 431, 3.26 including the administration of any federal funds granted to the 3.27 state to aid in the performance of any functions of the 3.28 commissioner as specified in Laws 1939, chapter 431, and 3.29 including the promulgation of rules making uniformly available 3.30 medical care benefits to all recipients of public assistance, at 3.31 such times as the federal government increases its participation 3.32 in assistance expenditures for medical care to recipients of 3.33 public assistance, the cost thereof to be borne in the same 3.34 proportion as are grants of aid to said recipients. 3.35 (7) Establish and maintain any administrative units 3.36 reasonably necessary for the performance of administrative 4.1 functions common to all divisions of the department. 4.2 (8) Act as designated guardian of both the estate and the 4.3 person of all the wards of the state of Minnesota, whether by 4.4 operation of law or by an order of court, without any further 4.5 act or proceeding whatever, except as to persons committed as 4.6 mentally retarded. For children under the guardianship of the 4.7 commissioner whose interests would be best served by adoptive 4.8 placement, the commissioner may contract with a licensed 4.9 child-placing agency to provide adoption services. A contract 4.10 with a licensed child-placing agency must be designed to 4.11 supplement existing county efforts and may not replace existing 4.12 county programs, unless the replacement is agreed to by the 4.13 county board and the appropriate exclusive bargaining 4.14 representative or the commissioner has evidence that child 4.15 placements of the county continue to be substantially below that 4.16 of other counties. Funds encumbered and obligated under an 4.17 agreement for a specific child shall remain available until the 4.18 terms of the agreement are fulfilled or the agreement is 4.19 terminated. 4.20 (9) Act as coordinating referral and informational center 4.21 on requests for service for newly arrived immigrants coming to 4.22 Minnesota. 4.23 (10) The specific enumeration of powers and duties as 4.24 hereinabove set forth shall in no way be construed to be a 4.25 limitation upon the general transfer of powers herein contained. 4.26 (11) Establish county, regional, or statewide schedules of 4.27 maximum fees and charges which may be paid by county agencies 4.28 for medical, dental, surgical, hospital, nursing and nursing 4.29 home care and medicine and medical supplies under all programs 4.30 of medical care provided by the state and for congregate living 4.31 care under the income maintenance programs. 4.32 (12) Have the authority to conduct and administer 4.33 experimental projects to test methods and procedures of 4.34 administering assistance and services to recipients or potential 4.35 recipients of public welfare. To carry out such experimental 4.36 projects, it is further provided that the commissioner of human 5.1 services is authorized to waive the enforcement of existing 5.2 specific statutory program requirements, rules, and standards in 5.3 one or more counties. The order establishing the waiver shall 5.4 provide alternative methods and procedures of administration, 5.5 shall not be in conflict with the basic purposes, coverage, or 5.6 benefits provided by law, and in no event shall the duration of 5.7 a project exceed four years. It is further provided that no 5.8 order establishing an experimental project as authorized by the 5.9 provisions of this section shall become effective until the 5.10 following conditions have been met: 5.11 (a) The secretary of health and human services of the 5.12 United States has agreed, for the same project, to waive state 5.13 plan requirements relative to statewide uniformity. 5.14 (b) A comprehensive plan, including estimated project 5.15 costs, shall be approved by the legislative advisory commission 5.16 and filed with the commissioner of administration. 5.17 (13) According to federal requirements, establish 5.18 procedures to be followed by local welfare boards in creating 5.19 citizen advisory committees, including procedures for selection 5.20 of committee members. 5.21 (14) Allocate federal fiscal disallowances or sanctions 5.22 which are based on quality control error rates for the aid to 5.23 families with dependent children program formerly codified in 5.24 sections 256.72 to 256.87, medical assistance, or food stamp 5.25 program in the following manner: 5.26 (a) One-half of the total amount of the disallowance shall 5.27 be borne by the county boards responsible for administering the 5.28 programs. For the medical assistance and the AFDC program 5.29 formerly codified in sections 256.72 to 256.87, disallowances 5.30 shall be shared by each county board in the same proportion as 5.31 that county's expenditures for the sanctioned program are to the 5.32 total of all counties' expenditures for the AFDC program 5.33 formerly codified in sections 256.72 to 256.87, and medical 5.34 assistance programs. For the food stamp program, sanctions 5.35 shall be shared by each county board, with 50 percent of the 5.36 sanction being distributed to each county in the same proportion 6.1 as that county's administrative costs for food stamps are to the 6.2 total of all food stamp administrative costs for all counties, 6.3 and 50 percent of the sanctions being distributed to each county 6.4 in the same proportion as that county's value of food stamp 6.5 benefits issued are to the total of all benefits issued for all 6.6 counties. Each county shall pay its share of the disallowance 6.7 to the state of Minnesota. When a county fails to pay the 6.8 amount due hereunder, the commissioner may deduct the amount 6.9 from reimbursement otherwise due the county, or the attorney 6.10 general, upon the request of the commissioner, may institute 6.11 civil action to recover the amount due. 6.12 (b) Notwithstanding the provisions of paragraph (a), if the 6.13 disallowance results from knowing noncompliance by one or more 6.14 counties with a specific program instruction, and that knowing 6.15 noncompliance is a matter of official county board record, the 6.16 commissioner may require payment or recover from the county or 6.17 counties, in the manner prescribed in paragraph (a), an amount 6.18 equal to the portion of the total disallowance which resulted 6.19 from the noncompliance, and may distribute the balance of the 6.20 disallowance according to paragraph (a). 6.21 (15) Develop and implement special projects that maximize 6.22 reimbursements and result in the recovery of money to the 6.23 state. For the purpose of recovering state money, the 6.24 commissioner may enter into contracts with third parties. Any 6.25 recoveries that result from projects or contracts entered into 6.26 under this paragraph shall be deposited in the state treasury 6.27 and credited to a special account until the balance in the 6.28 account reaches $1,000,000. When the balance in the account 6.29 exceeds $1,000,000, the excess shall be transferred and credited 6.30 to the general fund. All money in the account is appropriated 6.31 to the commissioner for the purposes of this paragraph. 6.32 (16) Have the authority to make direct payments to 6.33 facilities providing shelter to women and their children 6.34 according to section 256D.05, subdivision 3. Upon the written 6.35 request of a shelter facility that has been denied payments 6.36 under section 256D.05, subdivision 3, the commissioner shall 7.1 review all relevant evidence and make a determination within 30 7.2 days of the request for review regarding issuance of direct 7.3 payments to the shelter facility. Failure to act within 30 days 7.4 shall be considered a determination not to issue direct payments. 7.5 (17) Have the authority to establish and enforce the 7.6 following county reporting requirements: 7.7 (a) The commissioner shall establish fiscal and statistical 7.8 reporting requirements necessary to account for the expenditure 7.9 of funds allocated to counties for human services programs. 7.10 When establishing financial and statistical reporting 7.11 requirements, the commissioner shall evaluate all reports, in 7.12 consultation with the counties, to determine if the reports can 7.13 be simplified or the number of reports can be reduced. 7.14 (b) The county board shall submit monthly or quarterly 7.15 reports to the department as required by the commissioner. 7.16 Monthly reports are due no later than 15 working days after the 7.17 end of the month. Quarterly reports are due no later than 30 7.18 calendar days after the end of the quarter, unless the 7.19 commissioner determines that the deadline must be shortened to 7.20 20 calendar days to avoid jeopardizing compliance with federal 7.21 deadlines or risking a loss of federal funding. Only reports 7.22 that are complete, legible, and in the required format shall be 7.23 accepted by the commissioner. 7.24 (c) If the required reports are not received by the 7.25 deadlines established in clause (b), the commissioner may delay 7.26 payments and withhold funds from the county board until the next 7.27 reporting period. When the report is needed to account for the 7.28 use of federal funds and the late report results in a reduction 7.29 in federal funding, the commissioner shall withhold from the 7.30 county boards with late reports an amount equal to the reduction 7.31 in federal funding until full federal funding is received. 7.32 (d) A county board that submits reports that are late, 7.33 illegible, incomplete, or not in the required format for two out 7.34 of three consecutive reporting periods is considered 7.35 noncompliant. When a county board is found to be noncompliant, 7.36 the commissioner shall notify the county board of the reason the 8.1 county board is considered noncompliant and request that the 8.2 county board develop a corrective action plan stating how the 8.3 county board plans to correct the problem. The corrective 8.4 action plan must be submitted to the commissioner within 45 days 8.5 after the date the county board received notice of noncompliance. 8.6 (e) The final deadline for fiscal reports or amendments to 8.7 fiscal reports is one year after the date the report was 8.8 originally due. If the commissioner does not receive a report 8.9 by the final deadline, the county board forfeits the funding 8.10 associated with the report for that reporting period and the 8.11 county board must repay any funds associated with the report 8.12 received for that reporting period. 8.13 (f) The commissioner may not delay payments, withhold 8.14 funds, or require repayment under paragraph (c) or (e) if the 8.15 county demonstrates that the commissioner failed to provide 8.16 appropriate forms, guidelines, and technical assistance to 8.17 enable the county to comply with the requirements. If the 8.18 county board disagrees with an action taken by the commissioner 8.19 under paragraph (c) or (e), the county board may appeal the 8.20 action according to sections 14.57 to 14.69. 8.21 (g) Counties subject to withholding of funds under 8.22 paragraph (c) or forfeiture or repayment of funds under 8.23 paragraph (e) shall not reduce or withhold benefits or services 8.24 to clients to cover costs incurred due to actions taken by the 8.25 commissioner under paragraph (c) or (e). 8.26 (18) Allocate federal fiscal disallowances or sanctions for 8.27 audit exceptions when federal fiscal disallowances or sanctions 8.28 are based on a statewide random sample for the foster care 8.29 program under title IV-E of the Social Security Act, United 8.30 States Code, title 42, in direct proportion to each county's 8.31 title IV-E foster care maintenance claim for that period. 8.32 (19) Be responsible for ensuring the detection, prevention, 8.33 investigation, and resolution of fraudulent activities or 8.34 behavior by applicants, recipients, and other participants in 8.35 the human services programs administered by the department. 8.36 (20) Require county agencies to identify overpayments, 9.1 establish claims, and utilize all available and cost-beneficial 9.2 methodologies to collect and recover these overpayments in the 9.3 human services programs administered by the department. 9.4 (21) Have the authority to administer a drug rebate program 9.5 for drugs purchased pursuant to the prescription drug program 9.6 established under section 256.955 after the beneficiary's 9.7 satisfaction of any deductible established in the program. The 9.8 commissioner shall require a rebate agreement from all 9.9 manufacturers of covered drugs as defined in section 256B.0625, 9.10 subdivision 13. Rebate agreements for prescription drugs 9.11 delivered on or after July 1, 2002, must include rebates for 9.12 individuals covered under the prescription drug program who are 9.13 under 65 years of age. For each drug, the amount of the rebate 9.14 shall be equal to the basic rebate as defined for purposes of 9.15 the federal rebate program in United States Code, title 42, 9.16 section 1396r-8(c)(1). This basic rebate shall be applied to 9.17 single-source and multiple-source drugs. The manufacturers must 9.18 provide full payment within 30 days of receipt of the state 9.19 invoice for the rebate within the terms and conditions used for 9.20 the federal rebate program established pursuant to section 1927 9.21 of title XIX of the Social Security Act. The manufacturers must 9.22 provide the commissioner with any information necessary to 9.23 verify the rebate determined per drug. The rebate program shall 9.24 utilize the terms and conditions used for the federal rebate 9.25 program established pursuant to section 1927 of title XIX of the 9.26 Social Security Act. 9.27 (21a) Have the authority to administer the federal drug 9.28 rebate program for drugs purchased under the medical assistance 9.29 program as allowed by section 1927 of title XIX of the Social 9.30 Security Act and according to the terms and conditions of 9.31 section 1927. Rebates shall be collected for all drugs that 9.32 have been dispensed or administered in an outpatient setting and 9.33 that are from manufacturers who have signed a rebate agreement 9.34 with the United States Department of Health and Human Services. 9.35 (22) Operate the department's communication systems account 9.36 established in Laws 1993, First Special Session chapter 1, 10.1 article 1, section 2, subdivision 2, to manage shared 10.2 communication costs necessary for the operation of the programs 10.3 the commissioner supervises. A communications account may also 10.4 be established for each regional treatment center which operates 10.5 communications systems. Each account must be used to manage 10.6 shared communication costs necessary for the operations of the 10.7 programs the commissioner supervises. The commissioner may 10.8 distribute the costs of operating and maintaining communication 10.9 systems to participants in a manner that reflects actual usage. 10.10 Costs may include acquisition, licensing, insurance, 10.11 maintenance, repair, staff time and other costs as determined by 10.12 the commissioner. Nonprofit organizations and state, county, 10.13 and local government agencies involved in the operation of 10.14 programs the commissioner supervises may participate in the use 10.15 of the department's communications technology and share in the 10.16 cost of operation. The commissioner may accept on behalf of the 10.17 state any gift, bequest, devise or personal property of any 10.18 kind, or money tendered to the state for any lawful purpose 10.19 pertaining to the communication activities of the department. 10.20 Any money received for this purpose must be deposited in the 10.21 department's communication systems accounts. Money collected by 10.22 the commissioner for the use of communication systems must be 10.23 deposited in the state communication systems account and is 10.24 appropriated to the commissioner for purposes of this section. 10.25 (23) Receive any federal matching money that is made 10.26 available through the medical assistance program for the 10.27 consumer satisfaction survey. Any federal money received for 10.28 the survey is appropriated to the commissioner for this 10.29 purpose. The commissioner may expend the federal money received 10.30 for the consumer satisfaction survey in either year of the 10.31 biennium. 10.32 (24) Incorporate cost reimbursement claims from First Call 10.33 Minnesota into the federal cost reimbursement claiming processes 10.34 of the department according to federal law, rule, and 10.35 regulations. Any reimbursement received is appropriated to the 10.36 commissioner and shall be disbursed to First Call Minnesota 11.1 according to normal department payment schedules. 11.2 (25) Develop recommended standards for foster care homes 11.3 that address the components of specialized therapeutic services 11.4 to be provided by foster care homes with those services. 11.5 Sec. 2. Minnesota Statutes 2000, section 256.9657, 11.6 subdivision 2, is amended to read: 11.7 Subd. 2. [HOSPITAL SURCHARGE.] (a) Effective October 1, 11.8 1992, each Minnesota hospital except facilities of the federal 11.9 Indian Health Service and regional treatment centers shall pay 11.10 to the medical assistance account a surcharge equal to 1.4 11.11 percent of net patient revenues excluding net Medicare revenues 11.12 reported by that provider to the health care cost information 11.13 system according to the schedule in subdivision 4. 11.14 (b) Effective July 1, 1994, the surcharge under paragraph 11.15 (a) is increased to 1.56 percent. 11.16 (c) Notwithstanding the Medicare cost finding and allowable 11.17 cost principles, the hospital surcharge is not an allowable cost 11.18 for purposes of rate setting under sections 256.9685 to 256.9695. 11.19 Sec. 3. Minnesota Statutes 2000, section 256B.055, 11.20 subdivision 3a, is amended to read: 11.21 Subd. 3a. [MFIP-S FAMILIES;FAMILIES ELIGIBLE UNDER PRIOR 11.22 AFDC RULES.] (a)Beginning January 1, 1998, or on the date that11.23MFIP-S is implemented in counties, medical assistance may be11.24paid for a person receiving public assistance under the MFIP-S11.25program.Beginning July 1, 2002, medical assistance may be paid 11.26 for a person who would have been eligible, but for excess income 11.27 or assets, under the state's AFDC plan in effect as of July 16, 11.28 1996, with the base AFDC standard increased according to section 11.29 256B.056, subdivision 4. 11.30 (b) BeginningJanuary 1, 1998,July 1, 2002, medical 11.31 assistance may be paid for a person who would have been eligible 11.32 for public assistance under the income andresourceassets 11.33 standards, or who would have been eligible but for excess income11.34or assets,under the state's AFDC plan in effect as of July 16, 11.35 1996,as required by the Personal Responsibility and Work11.36Opportunity Reconciliation Act of 1996 (PRWORA), Public Law12.1Number 104-193with the base AFDC rate increased according to 12.2 section 256B.056, subdivision 4. 12.3 [EFFECTIVE DATE.] This section is effective July 1, 2002. 12.4 Sec. 4. Minnesota Statutes 2000, section 256B.056, 12.5 subdivision 4, is amended to read: 12.6 Subd. 4. [INCOME.] To be eligible for medical assistance, 12.7 a person who would be eligible under section 256B.055, 12.8 subdivision7, not receiving supplemental security income12.9program payments, and10, but for excess income, may be eligible 12.10 under subdivision 5 if the person has expenses for medical care 12.11 above 133-1/3 percent of the AFDC income standard in effect 12.12 under the July 16, 1996, AFDC state plan. To be eligible for 12.13 medical assistance, families and children may have an income up 12.14 to 133-1/3 percent of the AFDC income standard in effect under 12.15 the July 16, 1996, AFDC state plan. Effective July 1, 2000, the 12.16 base AFDC standard in effect on July 16, 1996, shall be 12.17 increased by three percent. Effective January 1, 2000, and each 12.18 successive January, recipients of supplemental security income 12.19 may have an income up to the supplemental security income 12.20 standard in effect on that date. In computing income to 12.21 determine eligibility of persons who are not residents of 12.22 long-term care facilities, the commissioner shall disregard 12.23 increases in income as required by Public Law Numbers 94-566, 12.24 section 503; 99-272; and 99-509. Veterans aid and attendance 12.25 benefits and Veterans Administration unusual medical expense 12.26 payments are considered income to the recipient. 12.27 Sec. 5. Minnesota Statutes 2000, section 256B.057, 12.28 subdivision 2, is amended to read: 12.29 Subd. 2. [CHILDREN.] A childonetwo throughfive18 years 12.30 of age in a family whose countable income islessno greater 12.31 than133185 percent of the federal poverty guidelines for the 12.32 same family size, is eligible for medical assistance.A child12.33six through 18 years of age, who was born after September 30,12.341983, in a family whose countable income is less than 10012.35percent of the federal poverty guidelines for the same family12.36size is eligible for medical assistance.Countable income means 13.1 gross income minus child support paid according to a court order 13.2 and dependent care costs deducted from income under the state's 13.3 AFDC plan in effect as of July 16, 1996. 13.4 [EFFECTIVE DATE.] This section is effective July 1, 2002. 13.5 Sec. 6. Minnesota Statutes 2000, section 256B.057, 13.6 subdivision 9, is amended to read: 13.7 Subd. 9. [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 13.8 assistance may be paid for a person who is employed and who: 13.9 (1) meets the definition of disabled under the supplemental 13.10 security income program; 13.11 (2) is at least 16 but less than 65 years of age; 13.12 (3) meets the asset limits in paragraph (b); and 13.13 (4) pays a premium, if required, under paragraph (c). 13.14 Any spousal income or assets shall be disregarded for purposes 13.15 of eligibility and premium determinations. 13.16 (b) For purposes of determining eligibility under this 13.17 subdivision, a person's assets must not exceed $20,000, 13.18 excluding: 13.19 (1) all assets excluded under section 256B.056; 13.20 (2) retirement accounts, including individual accounts, 13.21 401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 13.22 (3) medical expense accounts set up through the person's 13.23 employer. 13.24 (c) A personwhose earned andwith unearned incomeis13.25greater than 200 percent of federal poverty guidelines for the13.26applicable family size must payshall have a monthly premiumto13.27be eligible for medical assistancedetermined. The monthly 13.28 premium amount shall beequal to ten percent of the person's13.29gross earned and unearned income above 200 percent of federal13.30poverty guidelines for the applicable family size up tothe 13.31 lesser of: 13.32 (1) the amount by which the person's unearned income, less 13.33 the $20 standard disregard allowed under the supplemental 13.34 security income program, exceeds the highest medical assistance 13.35 income standard according to family size in effect for a person 13.36 with a disability; or 14.1 (2) the actual cost of coverage. 14.2 (d) A person's eligibility and premium shall be determined 14.3 by the local county agency. Premiums must be paid to the 14.4 commissioner. All premiums are dedicated to the commissioner. 14.5 (e) Any required premium shall be determined at application 14.6 and redetermined annually at recertification or when a change in 14.7 income or family size occurs. 14.8 (f) Premium payment is due upon notification from the 14.9 commissioner of the premium amount required. Premiums may be 14.10 paid in installments at the discretion of the commissioner. 14.11 (g) Nonpayment of the premium shall result in denial or 14.12 termination of medical assistance unless the person demonstrates 14.13 good cause for nonpayment. Good cause exists if the 14.14 requirements specified in Minnesota Rules, part 9506.0040, 14.15 subpart 7, items B to D, are met. Nonpayment shall include 14.16 payment with a returned, refused, or dishonored instrument. The 14.17 commissioner may require a guaranteed form of payment as the 14.18 only means to replace a returned, refused, or dishonored 14.19 instrument. 14.20 Sec. 7. Minnesota Statutes 2000, section 256B.057, is 14.21 amended by adding a subdivision to read: 14.22 Subd. 10. [AGED, BLIND, OR DISABLED.] To be eligible for 14.23 medical assistance, a person eligible under sections 256B.055, 14.24 subdivision 7, 7a, or 12, and 256B.056, subdivision 1a, may have 14.25 an income up to 100 percent of the federal poverty guidelines. 14.26 In computing income to determine eligibility of persons who 14.27 are not residents of long-term care facilities, the commissioner 14.28 shall disregard increases in income as required by Public Law 14.29 Numbers 94-566, section 503; 99-272; and 99-509. Veterans aid 14.30 and attendance benefits and Veterans Administration unusual 14.31 medical expense payments are considered income to the recipient. 14.32 Sec. 8. Minnesota Statutes 2000, section 256B.0625, 14.33 subdivision 13, is amended to read: 14.34 Subd. 13. [DRUGS.] (a) Medical assistance covers drugs, 14.35 except for fertility drugs when specifically used to enhance 14.36 fertility, if prescribed by a licensed practitioner and 15.1 dispensed by a licensed pharmacist, by a physician enrolled in 15.2 the medical assistance program as a dispensing physician, or by 15.3 a physician or a nurse practitioner employed by or under 15.4 contract with a community health board as defined in section 15.5 145A.02, subdivision 5, for the purposes of communicable disease 15.6 control. The commissioner, after receiving recommendations from 15.7 professional medical associations and professional pharmacist 15.8 associations, shall designate a formulary committee to advise 15.9 the commissioner on the names of drugs for which payment is 15.10 made, recommend a system for reimbursing providers on a set fee 15.11 or charge basis rather than the present system, and develop 15.12 methods encouraging use of generic drugs when they are less 15.13 expensive and equally effective as trademark drugs. The 15.14 formulary committee shall consist of nine members, four of whom 15.15 shall be physicians who are not employed by the department of 15.16 human services, and a majority of whose practice is for persons 15.17 paying privately or through health insurance, three of whom 15.18 shall be pharmacists who are not employed by the department of 15.19 human services, and a majority of whose practice is for persons 15.20 paying privately or through health insurance, a consumer 15.21 representative, and a nursing home representative. Committee 15.22 members shall serve three-year terms and shall serve without 15.23 compensation. Members may be reappointed once. 15.24 (b) The commissioner shall establish a drug formulary. Its 15.25 establishment and publication shall not be subject to the 15.26 requirements of the Administrative Procedure Act, but the 15.27 formulary committee shall review and comment on the formulary 15.28 contents. The formulary committee shall review and recommend 15.29 drugs which require prior authorization. The formulary 15.30 committee may recommend drugs for prior authorization directly 15.31 to the commissioner, as long as opportunity for public input is 15.32 provided. Prior authorization may be requested by the 15.33 commissioner based on medical and clinical criteria before 15.34 certain drugs are eligible for payment. Before a drug may be 15.35 considered for prior authorization at the request of the 15.36 commissioner: 16.1 (1) the drug formulary committee must develop criteria to 16.2 be used for identifying drugs; the development of these criteria 16.3 is not subject to the requirements of chapter 14, but the 16.4 formulary committee shall provide opportunity for public input 16.5 in developing criteria; 16.6 (2) the drug formulary committee must hold a public forum 16.7 and receive public comment for an additional 15 days; and 16.8 (3) the commissioner must provide information to the 16.9 formulary committee on the impact that placing the drug on prior 16.10 authorization will have on the quality of patient care and 16.11 information regarding whether the drug is subject to clinical 16.12 abuse or misuse. Prior authorization may be required by the 16.13 commissioner before certain formulary drugs are eligible for 16.14 payment. The formulary shall not include: 16.15 (i) drugs or products for which there is no federal 16.16 funding; 16.17 (ii) over-the-counter drugs, except for antacids, 16.18 acetaminophen, family planning products, aspirin, insulin, 16.19 products for the treatment of lice, vitamins for adults with 16.20 documented vitamin deficiencies, vitamins for children under the 16.21 age of seven and pregnant or nursing women, and any other 16.22 over-the-counter drug identified by the commissioner, in 16.23 consultation with the drug formulary committee, as necessary, 16.24 appropriate, and cost-effective for the treatment of certain 16.25 specified chronic diseases, conditions or disorders, and this 16.26 determination shall not be subject to the requirements of 16.27 chapter 14; 16.28 (iii) anorectics, except that medically necessary 16.29 anorectics shall be covered for a recipient previously diagnosed 16.30 as having pickwickian syndrome and currently diagnosed as having 16.31 diabetes and being morbidly obese; 16.32 (iv) drugs for which medical value has not been 16.33 established; and 16.34 (v) drugs from manufacturers who have not signed a rebate 16.35 agreement with the Department of Health and Human Services 16.36 pursuant to section 1927 of title XIX of the Social Security Act. 17.1 The commissioner shall publish conditions for prohibiting 17.2 payment for specific drugs after considering the formulary 17.3 committee's recommendations. An honorarium of $100 per meeting 17.4 and reimbursement for mileage shall be paid to each committee 17.5 member in attendance. 17.6 (c) The basis for determining the amount of payment shall 17.7 be the lower of the actual acquisition costs of the drugs plus a 17.8 fixed dispensing fee; the maximum allowable cost set by the 17.9 federal government or by the commissioner plus the fixed 17.10 dispensing fee; or the usual and customary price charged to the 17.11 public. The pharmacy dispensing fee shall be $3.65, except that 17.12 the dispensing fee for intravenous solutions which must be 17.13 compounded by the pharmacist shall be $8 per bag, $14 per bag 17.14 for cancer chemotherapy products, and $30 per bag for total 17.15 parenteral nutritional products dispensed in one liter 17.16 quantities, or $44 per bag for total parenteral nutritional 17.17 products dispensed in quantities greater than one liter. Actual 17.18 acquisition cost includes quantity and other special discounts 17.19 except time and cash discounts. The actual acquisition cost of 17.20 a drug shall be estimated by the commissioner, at average 17.21 wholesale price minus nine percent, except that where a drug has 17.22 had its wholesale price reduced as a result of the actions of 17.23 the National Association of Medicaid Fraud Control Units, the 17.24 estimated actual acquisition cost shall be the reduced average 17.25 wholesale price, without the nine percent deduction. The 17.26 maximum allowable cost of a multisource drug may be set by the 17.27 commissioner and it shall be comparable to, but no higher than, 17.28 the maximum amount paid by other third-party payors in this 17.29 state who have maximum allowable cost programs. The 17.30 commissioner shall set maximum allowable costs for multisource 17.31 drugs that are not on the federal upper limit list as described 17.32 in United States Code, title 42, chapter 7, section 1396r-8(e), 17.33 the Social Security Act, and Code of Federal Regulations, title 17.34 42, part 447, section 447.332. Establishment of the amount of 17.35 payment for drugs shall not be subject to the requirements of 17.36 the Administrative Procedure Act. An additional dispensing fee 18.1 of $.30 may be added to the dispensing fee paid to pharmacists 18.2 for legend drug prescriptions dispensed to residents of 18.3 long-term care facilities when a unit dose blister card system, 18.4 approved by the department, is used. Under this type of 18.5 dispensing system, the pharmacist must dispense a 30-day supply 18.6 of drug. The National Drug Code (NDC) from the drug container 18.7 used to fill the blister card must be identified on the claim to 18.8 the department. The unit dose blister card containing the drug 18.9 must meet the packaging standards set forth in Minnesota Rules, 18.10 part 6800.2700, that govern the return of unused drugs to the 18.11 pharmacy for reuse. The pharmacy provider will be required to 18.12 credit the department for the actual acquisition cost of all 18.13 unused drugs that are eligible for reuse. Over-the-counter 18.14 medications must be dispensed in the manufacturer's unopened 18.15 package. The commissioner may permit the drug clozapine to be 18.16 dispensed in a quantity that is less than a 30-day supply. 18.17 Whenever a generically equivalent product is available, payment 18.18 shall be on the basis of the actual acquisition cost of the 18.19 generic drug, unless the prescriber specifically indicates 18.20 "dispense as written - brand necessary" on the prescription as 18.21 required by section 151.21, subdivision 2. 18.22 (d) For purposes of this subdivision, "multisource drugs" 18.23 means covered outpatient drugs, excluding innovator multisource 18.24 drugs for which there are two or more drug products, which: 18.25 (1) are related as therapeutically equivalent under the 18.26 Food and Drug Administration's most recent publication of 18.27 "Approved Drug Products with Therapeutic Equivalence 18.28 Evaluations"; 18.29 (2) are pharmaceutically equivalent and bioequivalent as 18.30 determined by the Food and Drug Administration; and 18.31 (3) are sold or marketed in Minnesota. 18.32 "Innovator multisource drug" means a multisource drug that was 18.33 originally marketed under an original new drug application 18.34 approved by the Food and Drug Administration. 18.35 (e) The basis for determining the amount of payment for 18.36 drugs administered in an outpatient setting shall be the lower 19.1 of the usual and customary cost submitted by the provider; the 19.2 average wholesale price minus five percent; or the maximum 19.3 allowable cost set by the federal government under United States 19.4 Code, title 42, chapter 7, section 1396r-8(e) and Code of 19.5 Federal Regulations, title 42, section 447.332, or by the 19.6 commissioner under paragraph (c). 19.7 Sec. 9. Minnesota Statutes 2000, section 256B.0625, 19.8 subdivision 13a, is amended to read: 19.9 Subd. 13a. [DRUG UTILIZATION REVIEW BOARD.] A nine-member 19.10 drug utilization review board is established. The board is 19.11 comprised of at least three but no more than four licensed 19.12 physicians actively engaged in the practice of medicine in 19.13 Minnesota; at least three licensed pharmacists actively engaged 19.14 in the practice of pharmacy in Minnesota; and one consumer 19.15 representative; the remainder to be made up of health care 19.16 professionals who are licensed in their field and have 19.17 recognized knowledge in the clinically appropriate prescribing, 19.18 dispensing, and monitoring of covered outpatient drugs. The 19.19 board shall be staffed by an employee of the department who 19.20 shall serve as an ex officio nonvoting member of the board. The 19.21 members of the board shall be appointed by the commissioner and 19.22 shall serve three-year terms. The members shall be selected 19.23 from lists submitted by professional associations. The 19.24 commissioner shall appoint the initial members of the board for 19.25 terms expiring as follows: three members for terms expiring 19.26 June 30, 1996; three members for terms expiring June 30, 1997; 19.27 and three members for terms expiring June 30, 1998. Members may 19.28 be reappointed once. The board shall annually elect a chair 19.29 from among the members. 19.30 The commissioner shall, with the advice of the board: 19.31 (1) implement a medical assistance retrospective and 19.32 prospective drug utilization review program as required by 19.33 United States Code, title 42, section 1396r-8(g)(3); 19.34 (2) develop and implement the predetermined criteria and 19.35 practice parameters for appropriate prescribing to be used in 19.36 retrospective and prospective drug utilization review; 20.1 (3) develop, select, implement, and assess interventions 20.2 for physicians, pharmacists, and patients that are educational 20.3 and not punitive in nature; 20.4 (4) establish a grievance and appeals process for 20.5 physicians and pharmacists under this section; 20.6 (5) publish and disseminate educational information to 20.7 physicians and pharmacists regarding the board and the review 20.8 program; 20.9 (6) adopt and implement procedures designed to ensure the 20.10 confidentiality of any information collected, stored, retrieved, 20.11 assessed, or analyzed by the board, staff to the board, or 20.12 contractors to the review program that identifies individual 20.13 physicians, pharmacists, or recipients; 20.14 (7) establish and implement an ongoing process to (i) 20.15 receive public comment regarding drug utilization review 20.16 criteria and standards, and (ii) consider the comments along 20.17 with other scientific and clinical information in order to 20.18 revise criteria and standards on a timely basis; and 20.19 (8) adopt any rules necessary to carry out this section. 20.20 The board may establish advisory committees. The 20.21 commissioner may contract with appropriate organizations to 20.22 assist the board in carrying out the board's duties. The 20.23 commissioner may enter into contracts for services to develop 20.24 and implement a retrospective and prospective review program. 20.25 The board shall report to the commissioner annually on the 20.26 date the Drug Utilization Review Annual Report is due to the 20.27 Health Care Financing Administration. This report is to cover 20.28 the preceding federal fiscal year. The commissioner shall make 20.29 the report available to the public upon request. The report 20.30 must include information on the activities of the board and the 20.31 program; the effectiveness of implemented interventions; 20.32 administrative costs; and any fiscal impact resulting from the 20.33 program. An honorarium of$50$100 per meeting and 20.34 reimbursement for mileage shall be paid to each board member in 20.35 attendance. 20.36 Sec. 10. Minnesota Statutes 2000, section 256B.0625, 21.1 subdivision 18a, is amended to read: 21.2 Subd. 18a. [PAYMENT FOR MEALS AND LODGINGACCESS TO 21.3 MEDICAL SERVICES.] (a) Medical assistance reimbursement for 21.4 meals for persons traveling to receive medical care may not 21.5 exceed $5.50 for breakfast, $6.50 for lunch, or $8 for dinner. 21.6 (b) Medical assistance reimbursement for lodging for 21.7 persons traveling to receive medical care may not exceed $50 per 21.8 day unless prior authorized by the local agency. 21.9 (c) Medical assistance direct mileage reimbursement to the 21.10 eligible person or the eligible person's driver may not exceed 21.11 20 cents per mile. 21.12 (d) Medical assistance covers oral language interpreter 21.13 services when provided by an enrolled health care provider 21.14 during the course of providing a direct, person-to-person 21.15 covered health care service to an enrolled recipient with 21.16 limited English proficiency. 21.17 Sec. 11. Minnesota Statutes 2000, section 256B.0625, 21.18 subdivision 30, is amended to read: 21.19 Subd. 30. [OTHER CLINIC SERVICES.] (a) Medical assistance 21.20 covers rural health clinic services, federally qualified health 21.21 center services, nonprofit community health clinic services, 21.22 public health clinic services, and the services of a clinic 21.23 meeting the criteria established in rule by the commissioner. 21.24 Rural health clinic services and federally qualified health 21.25 center services mean services defined in United States Code, 21.26 title 42, section 1396d(a)(2)(B) and (C). Payment for rural 21.27 health clinic and federally qualified health center services 21.28 shall be made according to applicable federal law and 21.29 regulation, other than the cost-based phase-out and prospective 21.30 payment system according to paragraph (e). 21.31 (b) A federally qualified health center that is beginning 21.32 initial operation shall submit an estimate of budgeted costs and 21.33 visits for the initial reporting period in the form and detail 21.34 required by the commissioner. A federally qualified health 21.35 center that is already in operation shall submit an initial 21.36 report using actual costs and visits for the initial reporting 22.1 period. Within 90 days of the end of its reporting period, a 22.2 federally qualified health center shall submit, in the form and 22.3 detail required by the commissioner, a report of its operations, 22.4 including allowable costs actually incurred for the period and 22.5 the actual number of visits for services furnished during the 22.6 period, and other information required by the commissioner. 22.7 Federally qualified health centers that file Medicare cost 22.8 reports shall provide the commissioner with a copy of the most 22.9 recent Medicare cost report filed with the Medicare program 22.10 intermediary for the reporting year which support the costs 22.11 claimed on their cost report to the state. 22.12 (c) In order to continue cost-based payment under the 22.13 medical assistance program according to paragraphs (a) and (b), 22.14 a federally qualified health center or rural health clinic must 22.15 apply for designation as an essential community provider within 22.16 six months of final adoption of rules by the department of 22.17 health according to section 62Q.19, subdivision 7. For those 22.18 federally qualified health centers and rural health clinics that 22.19 have applied for essential community provider status within the 22.20 six-month time prescribed, medical assistance payments will 22.21 continue to be made according to paragraphs (a) and (b) for the 22.22 first three years after application. For federally qualified 22.23 health centers and rural health clinics that either do not apply 22.24 within the time specified above or who have had essential 22.25 community provider status for three years, medical assistance 22.26 payments for health services provided by these entities shall be 22.27 according to the same rates and conditions applicable to the 22.28 same service provided by health care providers that are not 22.29 federally qualified health centers or rural health clinics. 22.30 (d) Effective July 1, 1999, the provisions of paragraph (c) 22.31 requiring a federally qualified health center or a rural health 22.32 clinic to make application for an essential community provider 22.33 designation in order to have cost-based payments made according 22.34 to paragraphs (a) and (b) no longer apply. 22.35 (e) Effective January 1, 2000, payments made according to 22.36 paragraphs (a) and (b) shall be limited to the cost phase-out 23.1 schedule of the Balanced Budget Act of 1997, but shall revert to 23.2 cost-based payment July 1, 2001. 23.3 Sec. 12. Minnesota Statutes 2000, section 256B.0635, 23.4 subdivision 1, is amended to read: 23.5 Subdivision 1. [INCREASED EMPLOYMENT.]Beginning January23.61, 1998(a) Until June 30, 2002, medical assistance may be paid 23.7 for persons who received MFIP-S or medical assistance for 23.8 families and children in at least three of six months preceding 23.9 the month in which the person became ineligible for MFIP-S or 23.10 medical assistance, if the ineligibility was due to an increase 23.11 in hours of employment or employment income or due to the loss 23.12 of an earned income disregard. In addition, to receive 23.13 continued assistance under this section, persons who received 23.14 medical assistance for families and children but did not receive 23.15 MFIP-S must have had income less than or equal to the assistance 23.16 standard for their family size under the state's AFDC plan in 23.17 effect as of July 16, 1996,as required by the Personal23.18Responsibility and Work Opportunity Reconciliation Act of 199623.19(PRWORA), Public Law Number 104-193,increased according to 23.20 section 256B.056, subdivision 4, at the time medical assistance 23.21 eligibility began. A person who is eligible for extended 23.22 medical assistance is entitled tosix12 months of assistance 23.23 without reapplication, unless the assistance unit ceases to 23.24 include a dependent child. For a person under 21 years of23.25age, except medical assistance may not be discontinued for that 23.26 dependent child under 21 years of age within thesix-month23.27 12-month period of extended eligibility until it has been 23.28 determined that the person is not otherwise eligible for medical 23.29 assistance.Medical assistance may be continued for an23.30additional six months if the person meets all requirements for23.31the additional six months, according to title XIX of the Social23.32Security Act, as amended by section 303 of the Family Support23.33Act of 1988, Public Law Number 100-485.23.34 (b) Beginning July 1, 2002, medical assistance for families 23.35 and children may be paid for persons who were eligible under 23.36 section 256B.055, subdivision 3a, paragraph (b), in at least 24.1 three of six months preceding the month in which the person 24.2 became ineligible under that section if the ineligibility was 24.3 due to an increase in hours of employment or employment income 24.4 or due to the loss of an earned income disregard. A person who 24.5 is eligible for extended medical assistance is entitled to 12 24.6 months of assistance without reapplication, unless the 24.7 assistance unit ceases to include a dependent child, except 24.8 medical assistance may not be discontinued for that dependent 24.9 child under 21 years of age within the 12-month period of 24.10 extended eligibility until it has been determined that the 24.11 person is not otherwise eligible for medical assistance. 24.12 [EFFECTIVE DATE.] This section is effective July 1, 2001. 24.13 Sec. 13. Minnesota Statutes 2000, section 256B.0635, 24.14 subdivision 2, is amended to read: 24.15 Subd. 2. [INCREASED CHILD OR SPOUSAL SUPPORT.]Beginning24.16January 1, 1998(a) Until June 30, 2002, medical assistance may 24.17 be paid for persons who received MFIP-S or medical assistance 24.18 for families and children in at least three of the six months 24.19 preceding the month in which the person became ineligible for 24.20 MFIP-S or medical assistance, if the ineligibility was the 24.21 result of the collection of child or spousal support under part 24.22 D of title IV of the Social Security Act. In addition, to 24.23 receive continued assistance under this section, persons who 24.24 received medical assistance for families and children but did 24.25 not receive MFIP-S must have had income less than or equal to 24.26 the assistance standard for their family size under the state's 24.27 AFDC plan in effect as of July 16, 1996,as required by the24.28Personal Responsibility and Work Opportunity Reconciliation Act24.29of 1996 (PRWORA), Public Law Number 104-193increased according 24.30 to section 256B.056, subdivision 4, at the time medical 24.31 assistance eligibility began. A person who is eligible for 24.32 extended medical assistance under this subdivision is entitled 24.33 to four months of assistance without reapplication, unless the 24.34 assistance unit ceases to include a dependent child. For a24.35person under 21 years of age, except medical assistance may not 24.36 be discontinued for that dependent child under 21 years of age 25.1 within the four-month period of extended eligibility until it 25.2 has been determined that the person is not otherwise eligible 25.3 for medical assistance. 25.4 (b) Beginning July 1, 2002, medical assistance for families 25.5 and children may be paid for persons who were eligible under 25.6 section 256B.055, subdivision 3a, paragraph (b), in at least 25.7 three of the six months preceding the month in which the person 25.8 became ineligible under that section if the ineligibility was 25.9 the result of the collection of child or spousal support under 25.10 part D of title IV of the Social Security Act. A person who is 25.11 eligible for extended medical assistance under this subdivision 25.12 is entitled to four months of assistance without reapplication, 25.13 unless the assistance unit ceases to include a dependent child, 25.14 except medical assistance may not be discontinued for that 25.15 dependent child under 21 years of age within the four-month 25.16 period of extended eligibility until it has been determined that 25.17 the person is not otherwise eligible for medical assistance. 25.18 [EFFECTIVE DATE.] This section is effective July 1, 2001. 25.19 Sec. 14. Minnesota Statutes 2000, section 256B.69, 25.20 subdivision 3a, is amended to read: 25.21 Subd. 3a. [COUNTY AUTHORITY.] (a) The commissioner, when 25.22 implementing the general assistance medical care, or medical 25.23 assistance prepayment program within a county, must include the 25.24 county board in the process of development, approval, and 25.25 issuance of the request for proposals to provide services to 25.26 eligible individuals within the proposed county. County boards 25.27 must be given reasonable opportunity to make recommendations 25.28 regarding the development, issuance, review of responses, and 25.29 changes needed in the request for proposals. The commissioner 25.30 must provide county boards the opportunity to review each 25.31 proposal based on the identification of community needs under 25.32 chapters 145A and 256E and county advocacy activities. If a 25.33 county board finds that a proposal does not address certain 25.34 community needs, the county board and commissioner shall 25.35 continue efforts for improving the proposal and network prior to 25.36 the approval of the contract. The county board shall make 26.1 recommendations regarding the approval of local networks and 26.2 their operations to ensure adequate availability and access to 26.3 covered services. The provider or health plan must respond 26.4 directly to county advocates and the state prepaid medical 26.5 assistance ombudsperson regarding service delivery and must be 26.6 accountable to the state regarding contracts with medical 26.7 assistance and general assistance medical care funds. The 26.8 county board may recommend a maximum number of participating 26.9 health plans after considering the size of the enrolling 26.10 population; ensuring adequate access and capacity; considering 26.11 the client and county administrative complexity; and considering 26.12 the need to promote the viability of locally developed health 26.13 plans. The county board or a single entity representing a group 26.14 of county boards and the commissioner shall mutually select 26.15 health plans for participation at the time of initial 26.16 implementation of the prepaid medical assistance program in that 26.17 county or group of counties and at the time of contract renewal. 26.18 The commissioner shall also seek input for contract requirements 26.19 from the county or single entity representing a group of county 26.20 boards at each contract renewal and incorporate those 26.21 recommendations into the contract negotiation process. The 26.22 commissioner, in conjunction with the county board, shall 26.23 actively seek to develop a mutually agreeable timetable prior to 26.24 the development of the request for proposal, but counties must 26.25 agree to initial enrollment beginning on or before January 1, 26.26 1999, in either the prepaid medical assistance and general 26.27 assistance medical care programs or county-based purchasing 26.28 under section 256B.692. At least 90 days before enrollment in 26.29 the medical assistance and general assistance medical care 26.30 prepaid programs begins in a county in which the prepaid 26.31 programs have not been established, the commissioner shall 26.32 provide a report to the chairs of senate and house committees 26.33 having jurisdiction over state health care programs which 26.34 verifies that the commissioner complied with the requirements 26.35 for county involvement that are specified in this subdivision. 26.36 (b) The commissioner shall seek a federal waiver to allow a 27.1 fee-for-service plan option to MinnesotaCare enrollees. The 27.2 commissioner shall develop an increase of the premium fees 27.3 required under section 256L.06 up to 20 percent of the premium 27.4 fees for the enrollees who elect the fee-for-service option. 27.5 Prior to implementation, the commissioner shall submit this fee 27.6 schedule to the chair and ranking minority member of the senate 27.7 health care committee, the senate health care and family 27.8 services funding division, the house of representatives health 27.9 and human services committee, and the house of representatives 27.10 health and human services finance division. 27.11 (c) At the option of the county board, the board may 27.12 develop contract requirements related to the achievement of 27.13 local public health goals to meet the health needs of medical 27.14 assistance and general assistance medical care enrollees. These 27.15 requirements must be reasonably related to the performance of 27.16 health plan functions and within the scope of the medical 27.17 assistance and general assistance medical care benefit sets. If 27.18 the county board and the commissioner mutually agree to such 27.19 requirements, the department shall include such requirements in 27.20 all health plan contracts governing the prepaid medical 27.21 assistance and general assistance medical care programs in that 27.22 county at initial implementation of the program in that county 27.23 and at the time of contract renewal. The county board may 27.24 participate in the enforcement of the contract provisions 27.25 related to local public health goals. 27.26 (d) For counties in which prepaid medical assistance and 27.27 general assistance medical care programs have not been 27.28 established, the commissioner shall not implement those programs 27.29 if a county board submits acceptable and timely preliminary and 27.30 final proposals under section 256B.692, until county-based 27.31 purchasing is no longer operational in that county. For 27.32 counties in which prepaid medical assistance and general 27.33 assistance medical care programs are in existence on or after 27.34 September 1, 1997, the commissioner must terminate contracts 27.35 with health plans according to section 256B.692, subdivision 5, 27.36 if the county board submits and the commissioner accepts 28.1 preliminary and final proposals according to that subdivision. 28.2 The commissioner is not required to terminate contracts that 28.3 begin on or after September 1, 1997, according to section 28.4 256B.692 until two years have elapsed from the date of initial 28.5 enrollment. 28.6 (e) In the event that a county board or a single entity 28.7 representing a group of county boards and the commissioner 28.8 cannot reach agreement regarding: (i) the selection of 28.9 participating health plans in that county; (ii) contract 28.10 requirements; or (iii) implementation and enforcement of county 28.11 requirements including provisions regarding local public health 28.12 goals, the commissioner shall resolve all disputes after taking 28.13 into account the recommendations of a three-person mediation 28.14 panel. The panel shall be composed of one designee of the 28.15 president of the association of Minnesota counties, one designee 28.16 of the commissioner of human services, and one designee of the 28.17 commissioner of health. 28.18 (f) If a county which elects to implement county-based 28.19 purchasing ceases to implement county-based purchasing, it is 28.20 prohibited from assuming the responsibility of county-based 28.21 purchasing for a period of five years from the date it 28.22 discontinues purchasing. 28.23 (g)Notwithstanding the requirement in this subdivision28.24that a county must agree to initial enrollment on or before28.25January 1, 1999, the commissioner shall grant a delay in the28.26implementation of the county-based purchasing authorized in28.27section 256B.692 until federal waiver authority and approval has28.28been granted, if the county or group of counties has submitted a28.29preliminary proposal for county-based purchasing by September 1,28.301997, has not already implemented the prepaid medical assistance28.31program before January 1, 1998, and has submitted a written28.32request for the delay to the commissioner by July 1, 1998. In28.33order for the delay to be continued, the county or group of28.34counties must also submit to the commissioner the following28.35information by December 1, 1998. The information must:28.36(1) identify the proposed date of implementation, as29.1determined under section 256B.692, subdivision 5;29.2(2) include copies of the county board resolutions which29.3demonstrate the continued commitment to the implementation of29.4county-based purchasing by the proposed date. County board29.5authorization may remain contingent on the submission of a final29.6proposal which meets the requirements of section 256B.692,29.7subdivision 5, paragraph (b);29.8(3) demonstrate actions taken for the establishment of a29.9governance structure between the participating counties and29.10describe how the fiduciary responsibilities of county-based29.11purchasing will be allocated between the counties, if more than29.12one county is involved in the proposal;29.13(4) describe how the risk of a deficit will be managed in29.14the event expenditures are greater than total capitation29.15payments. This description must identify how any of the29.16following strategies will be used:29.17(i) risk contracts with licensed health plans;29.18(ii) risk arrangements with providers who are not licensed29.19health plans;29.20(iii) risk arrangements with other licensed insurance29.21entities; and29.22(iv) funding from other county resources;29.23(5) include, if county-based purchasing will not contract29.24with licensed health plans or provider networks, letters of29.25interest from local providers in at least the categories of29.26hospital, physician, mental health, and pharmacy which express29.27interest in contracting for services. These letters must29.28recognize any risk transfer identified in clause (4), item (ii);29.29and29.30(6) describe the options being considered to obtain the29.31administrative services required in section 256B.692,29.32subdivision 3, clauses (3) and (5).Notwithstanding other 29.33 subdivisions under this section, the commissioner shall 29.34 implement a prepaid medical assistance program in all counties 29.35 that have not gained federal approval for county-based 29.36 purchasing by September 1, 2001. 30.1 (h) For counties which receive a delay under this 30.2 subdivision, the final proposals required under section 30.3 256B.692, subdivision 5, paragraph (b), must be submitted at 30.4 least six months prior to the requested implementation date. 30.5 Authority to implement county-based purchasing remains 30.6 contingent on approval of the final proposal as required under 30.7 section 256B.692. 30.8 (i) If the commissioner is unable to provide 30.9 county-specific, individual-level fee-for-service claims to 30.10 counties by June 4, 1998, the commissioner shall grant a delay 30.11 under paragraph (g) of up to 12 months in the implementation of 30.12 county-based purchasing, and shall require implementation not 30.13 later than January 1, 2000. In order to receive an extension of 30.14 the proposed date of implementation under this paragraph, a 30.15 county or group of counties must submit a written request for 30.16 the extension to the commissioner by August 1, 1998, must submit 30.17 the information required under paragraph (g) by December 1, 30.18 1998, and must submit a final proposal as provided under 30.19 paragraph (h). 30.20 (j) Notwithstanding other requirements of this subdivision, 30.21 the commissioner shall not require the implementation of the 30.22 county-based purchasing authorized in section 256B.692 until six 30.23 months after federal waiver approval has been obtained for 30.24 county-based purchasing, if the county or counties have 30.25 submitted the final plan as required in section 256B.692, 30.26 subdivision 5. The commissioner shall allow the county or 30.27 counties which submitted information under section 256B.692, 30.28 subdivision 5, to submit supplemental or additional information 30.29 which was not possible to submit by April 1, 1999. A county or 30.30 counties shall continue to submit the required information and 30.31 substantive detail necessary to obtain a prompt response and 30.32 waiver approval. If amendments to the final plan are necessary 30.33 due to the terms and conditions of the waiver approval, the 30.34 commissioner shall allow the county or group of counties 60 days 30.35 to make the necessary amendments to the final plan and shall not 30.36 require implementation of the county-based purchasing until six 31.1 months after the revised final plan has been submitted. 31.2 [EFFECTIVE DATE.] This section is effective September 1, 31.3 2001. 31.4 Sec. 15. Minnesota Statutes 2000, section 256B.75, is 31.5 amended to read: 31.6 256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 31.7 (a) For outpatient hospital facility fee payments for 31.8 services rendered on or after October 1, 1992, the commissioner 31.9 of human services shall pay the lower of (1) submitted charge, 31.10 or (2) 32 percent above the rate in effect on June 30, 1992, 31.11 except for those services for which there is a federal maximum 31.12 allowable payment. Effective for services rendered on or after 31.13 January 1, 2000, payment rates for nonsurgical outpatient 31.14 hospital facility fees and emergency room facility fees shall be 31.15 increased by eight percent over the rates in effect on December 31.16 31, 1999, except for those services for which there is a federal 31.17 maximum allowable payment. Services for which there is a 31.18 federal maximum allowable payment shall be paid at the lower of 31.19 (1) submitted charge, or (2) the federal maximum allowable 31.20 payment. Total aggregate payment for outpatient hospital 31.21 facility fee services shall not exceed the Medicare upper 31.22 limit. If it is determined that a provision of this section 31.23 conflicts with existing or future requirements of the United 31.24 States government with respect to federal financial 31.25 participation in medical assistance, the federal requirements 31.26 prevail. The commissioner may, in the aggregate, prospectively 31.27 reduce payment rates to avoid reduced federal financial 31.28 participation resulting from rates that are in excess of the 31.29 Medicare upper limitations. 31.30 (b) Notwithstanding paragraph (a), payment for outpatient, 31.31 emergency, and ambulatory surgery hospital facility fee services 31.32 for critical access hospitals designated under section 144.1483, 31.33 clause (11), shall be paid on a cost-based payment system that 31.34 is based on the cost-finding methods and allowable costs of the 31.35 Medicare program. 31.36 (c) Effective for services provided on or after July 1, 32.1 2002, rates that are based on the Medicare outpatient 32.2 prospective payment system shall be replaced by a budget neutral 32.3 prospective payment system that is derived using medical 32.4 assistance data. The department shall provide a proposal to the 32.5 2002 legislature to define and implement this provision. 32.6 Sec. 16. [256B.78] [MEDICAL ASSISTANCE DEMONSTRATION 32.7 PROJECT FOR FAMILY PLANNING SERVICES.] 32.8 (a) The commissioner of human services shall establish a 32.9 medical assistance demonstration project to determine whether 32.10 improved access to coverage of prepregnancy family planning 32.11 services reduces medical assistance and MFIP costs. 32.12 (b) This section is effective upon federal approval of the 32.13 demonstration project. 32.14 Sec. 17. Minnesota Statutes 2000, section 256J.31, 32.15 subdivision 12, is amended to read: 32.16 Subd. 12. [RIGHT TO DISCONTINUE CASH ASSISTANCE.] A 32.17 participant who is not in vendor payment status may discontinue 32.18 receipt of the cash assistance portion of the MFIP assistance 32.19 grant and retain eligibility for child care assistance under 32.20 section 119B.05and for medical assistance under sections32.21256B.055, subdivision 3a, and 256B.0635. For the months a 32.22 participant chooses to discontinue the receipt of the cash 32.23 portion of the MFIP grant, the assistance unit accrues months of 32.24 eligibility to be applied toward eligibility for child care 32.25 under section 119B.05and for medical assistance under sections32.26256B.055, subdivision 3a, and 256B.0635. 32.27 [EFFECTIVE DATE.] This section is effective July 1, 2002. 32.28 Sec. 18. Minnesota Statutes 2000, section 256K.03, 32.29 subdivision 1, is amended to read: 32.30 Subdivision 1. [NOTIFICATION OF PROGRAM.] Except for the 32.31 provisions in this section, the provisions for the MFIP 32.32 application process shall be followed. Within two days after 32.33 receipt of a completed combined application form, the county 32.34 agency must refer to the provider the applicant who meets the 32.35 conditions under section 256K.02, and notify the applicant in 32.36 writing of the program including the following provisions: 33.1 (1) notification that, as part of the application process, 33.2 applicants are required to attend orientation, to be followed 33.3 immediately by a job search; 33.4 (2) the program provider, the date, time, and location of 33.5 the scheduled program orientation; 33.6 (3) the procedures for qualifying for and receiving 33.7 benefits under the program; 33.8 (4) the immediate availability of supportive services, 33.9 including, but not limited to, child care, transportation, 33.10medical assistance,and other work-related aid; and 33.11 (5) the rights, responsibilities, and obligations of 33.12 participants in the program, including, but not limited to, the 33.13 grounds for exemptions and deferrals, the consequences for 33.14 refusing or failing to participate fully, and the appeal process. 33.15 [EFFECTIVE DATE.] This section is effective July 1, 2002. 33.16 Sec. 19. Minnesota Statutes 2000, section 256K.07, is 33.17 amended to read: 33.18 256K.07 [ELIGIBILITY FOR FOOD STAMPS, MEDICAL ASSISTANCE,33.19 AND CHILD CARE.] 33.20 The participant shall be treated as an MFIP recipient for 33.21 food stamps, medical assistance,and child care eligibility 33.22 purposes. The participant who leaves the program as a result of 33.23 increased earnings from employment shall be eligible for 33.24transitional medical assistance andchild care without regard to 33.25 MFIP receipt in three of the six months preceding ineligibility. 33.26 [EFFECTIVE DATE.] This section is effective July 1, 2002. 33.27 Sec. 20. Minnesota Statutes 2000, section 256L.02, 33.28 subdivision 4, is amended to read: 33.29 Subd. 4. [FUNDING FOR PREGNANT WOMEN AND CHILDRENUNDER33.30AGE TWO.] (a) For fiscal years beginning on or after July 1, 33.31 1999, the state cost of health care services provided to 33.32 MinnesotaCare enrollees who are pregnant women or children under 33.33 age two shall be paid out of the general fund rather than the 33.34 health care access fund. If the commissioner of finance decides 33.35 to pay for these costs using a source other than the general 33.36 fund, the commissioner shall include the change as a budget 34.1 initiative in the biennial or supplemental budget, and shall not 34.2 change the funding source through a forecast modification. 34.3 (b) For fiscal years beginning on or after July 1, 2002, 34.4 the state cost of health care services provided to MinnesotaCare 34.5 enrollees who are children under age 19 whose gross family 34.6 income is equal to or less than 185 percent of the federal 34.7 poverty guidelines shall be paid out of the general fund rather 34.8 than the health care access fund. 34.9 [EFFECTIVE DATE.] This section is effective July 1, 2001. 34.10 Sec. 21. Minnesota Statutes 2000, section 256L.06, 34.11 subdivision 3, is amended to read: 34.12 Subd. 3. [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) 34.13 Premiums are dedicated to the commissioner for MinnesotaCare. 34.14 (b) The commissioner shall develop and implement procedures 34.15 to: (1) require enrollees to report changes in income; (2) 34.16 adjust sliding scale premium payments, based upon changes in 34.17 enrollee income; and (3) disenroll enrollees from MinnesotaCare 34.18 for failure to pay required premiums. Failure to pay includes 34.19 payment with a dishonored check, a returned automatic bank 34.20 withdrawal, or a refused credit card or debit card payment. The 34.21 commissioner may demand a guaranteed form of payment, including 34.22 a cashier's check or a money order, as the only means to replace 34.23 a dishonored, returned, or refused payment. 34.24 (c) Premiums are calculated on a calendar month basis and 34.25 may be paid on a monthly, quarterly, or annual basis, with the 34.26 first payment due upon notice from the commissioner of the 34.27 premium amount required. The commissioner shall inform 34.28 applicants and enrollees of these premium payment options. 34.29 Premium payment is required before enrollment is complete and to 34.30 maintain eligibility in MinnesotaCare. 34.31 (d) Nonpayment of the premium will result in disenrollment 34.32 from the planwithin one calendar month after the due date34.33 effective for the calendar month for which the premium was due. 34.34 Persons disenrolled for nonpayment or who voluntarily terminate 34.35 coverage from the program may not reenroll until four calendar 34.36 months have elapsed. Persons disenrolled for nonpayment who pay 35.1 all past due premiums as well as current premiums due, including 35.2 premiums due for the period of disenrollment, within 20 days of 35.3 disenrollment, shall be reenrolled retroactively to the first 35.4 day of disenrollment. Persons disenrolled for nonpayment or who 35.5 voluntarily terminate coverage from the program may not reenroll 35.6 for four calendar months unless the person demonstrates good 35.7 cause for nonpayment. Good cause does not exist if a person 35.8 chooses to pay other family expenses instead of the premium. 35.9 The commissioner shall define good cause in rule. 35.10 [EFFECTIVE DATE.] This section is effective July 1, 2002. 35.11 Sec. 22. Minnesota Statutes 2000, section 256L.07, 35.12 subdivision 1, is amended to read: 35.13 Subdivision 1. [GENERAL REQUIREMENTS.] (a) Children 35.14 enrolled in the original children's health plan as of September 35.15 30, 1992, and children who enrolled in the MinnesotaCare program 35.16 after September 30, 1992, pursuant to Laws 1992, chapter 549, 35.17 article 4, section 17, who have maintained continuous coverage 35.18 in the MinnesotaCare program or medical assistance; and children 35.19 under two; pregnant women; and children through age 18 who have 35.20 family gross incomes that are equal to or less than150185 35.21 percent of the federal poverty guidelines are eligible without 35.22 meeting the requirements ofsubdivision 2, as long as they35.23maintain continuous coverage in the MinnesotaCare program or35.24medical assistance. Children who apply for MinnesotaCare on or35.25after the implementation date of the employer-subsidized health35.26coverage program as described in Laws 1998, chapter 407, article35.275, section 45, who have family gross incomes that are equal to35.28or less than 150 percent of the federal poverty guidelines, must35.29meet the requirements of subdivision 2 to be eligible for35.30MinnesotaCaresubdivisions 2 and 3. 35.31 (b) Families enrolled in MinnesotaCare under section 35.32 256L.04, subdivision 1, whose income increases above 275 percent 35.33 of the federal poverty guidelines, are no longer eligible for 35.34 the program and shall be disenrolled by the commissioner. 35.35 Individuals enrolled in MinnesotaCare under section 256L.04, 35.36 subdivision 7, whose income increases above 175 percent of the 36.1 federal poverty guidelines are no longer eligible for the 36.2 program and shall be disenrolled by the commissioner. For 36.3 persons disenrolled under this subdivision, MinnesotaCare 36.4 coverage terminates the last day of the calendar month following 36.5 the month in which the commissioner determines that the income 36.6 of a family or individual exceeds program income limits. 36.7 (c) Notwithstanding paragraph (b), individuals and families 36.8 may remain enrolled in MinnesotaCare if ten percent of their 36.9 annual income is less than the annual premium for a policy with 36.10 a $500 deductible available through the Minnesota comprehensive 36.11 health association. Individuals and families who are no longer 36.12 eligible for MinnesotaCare under this subdivision shall be given 36.13 an 18-month notice period from the date that ineligibility is 36.14 determined before disenrollment. 36.15 [EFFECTIVE DATE.] This section is effective July 1, 2002. 36.16 Sec. 23. Minnesota Statutes 2000, section 256L.07, 36.17 subdivision 3, is amended to read: 36.18 Subd. 3. [OTHER HEALTH COVERAGE.] (a) Families and 36.19 individuals enrolled in the MinnesotaCare program must have no 36.20 health coverage while enrolled or for at least four months prior 36.21 to application and renewal.Children enrolled in the original36.22children's health plan and children in families with income36.23equal to or less than 150 percent of the federal poverty36.24guidelines, who have other health insurance, are eligible if the36.25coverage:36.26(1) lacks two or more of the following:36.27(i) basic hospital insurance;36.28(ii) medical-surgical insurance;36.29(iii) prescription drug coverage;36.30(iv) dental coverage; or36.31(v) vision coverage;36.32(2) requires a deductible of $100 or more per person per36.33year; or36.34(3) lacks coverage because the child has exceeded the36.35maximum coverage for a particular diagnosis or the policy36.36excludes a particular diagnosis.37.1 The commissioner may change this eligibility criterion for 37.2 sliding scale premiums in order to remain within the limits of 37.3 available appropriations. The requirement of no health coverage 37.4 does not apply to newborns. 37.5 (b) Medical assistance, general assistance medical care, 37.6 and civilian health and medical program of the uniformed 37.7 service, CHAMPUS, are not considered insurance or health 37.8 coverage for purposes of the four-month requirement described in 37.9 this subdivision. 37.10 (c) For purposes of this subdivision, Medicare Part A or B 37.11 coverage under title XVIII of the Social Security Act, United 37.12 States Code, title 42, sections 1395c to 1395w-4, is considered 37.13 health coverage. An applicant or enrollee may not refuse 37.14 Medicare coverage to establish eligibility for MinnesotaCare. 37.15 (d) Applicants who were recipients of medical assistance or 37.16 general assistance medical care within one month of application 37.17 must meet the provisions of this subdivision and subdivision 2. 37.18 [EFFECTIVE DATE.] This section is effective July 1, 2002. 37.19 Sec. 24. Minnesota Statutes 2000, section 256L.15, 37.20 subdivision 1, is amended to read: 37.21 Subdivision 1. [PREMIUM DETERMINATION.] Families with 37.22 children and individuals shall pay a premium determined 37.23 according to a sliding fee based on a percentage of the family's 37.24 gross family income, except that children through age 18 whose 37.25 gross family income is equal to or less than 185 percent of the 37.26 federal poverty guidelines are exempt from the requirement to 37.27 pay premiums. Pregnant women and children under age two are 37.28 exempt from the provisions of section 256L.06, subdivision 3, 37.29 paragraph (b), clause (3), requiring disenrollment for failure 37.30 to pay premiums. For pregnant women, this exemption continues 37.31 until the first day of the month following the 60th day 37.32 postpartum. Women who remain enrolled during pregnancy or the 37.33 postpartum period, despite nonpayment of premiums, shall be 37.34 disenrolled on the first of the month following the 60th day 37.35 postpartum for the penalty period that otherwise applies under 37.36 section 256L.06, unless they begin paying premiums. 38.1 [EFFECTIVE DATE.] This section is effective July 1, 2002. 38.2 Sec. 25. [REPEALER.] 38.3 (a) Minnesota Statutes 2000, sections 256.01, subdivision 38.4 18; and 256J.32, subdivision 7a, are repealed effective July 1, 38.5 2001. 38.6 (b) Minnesota Statutes 2000, sections 256B.0635, 38.7 subdivision 3; and 256L.15, subdivision 3, are repealed 38.8 effective July 1, 2002.