HF 2038

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 03/25/2015 12:34pm

A bill for an act
relating to human services; modifying and clarifying financial reporting
requirements for managed care and county-based purchasing plans serving
state public program enrollees; setting requirements related to subcontracts;
modifying requirements related to administrative costs; clarifying not allowable
administrative expenses; requiring third-party financial audits and ad hoc audits;
amending Minnesota Statutes 2014, sections 62D.08, subdivision 7; 256B.69,
subdivisions 5a, 5i, 9c, 9d, by adding a subdivision; Laws 2008, chapter 363,
article 18, section 3, subdivision 5.

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

Section 1.

Minnesota Statutes 2014, section 62D.08, subdivision 7, is amended to read:

Subd. 7.

Consistent administrative expenses and investment income reporting.

(a) new text begin Every health maintenance organization must submit financial information, including
administrative expenses for dental services, using the reporting template Minnesota
Supplement Report #1A provided by the commissioner of health. new text end Every health maintenance
organization must directly allocate administrative expenses to specific lines of business new text begin ,
product, new text end or deleted text begin products deleted text end new text begin individual state public program new text end when such information is available.
Remaining expenses that cannot be directly allocated must be allocated deleted text begin based on other
methods, as recommended by the Advisory Group on Administrative Expenses deleted text end new text begin by dollars
of premium income or by administrative revenue for administrative services only (ASO)
business lines new text end . deleted text begin Health maintenance organizations must submit this information, including
administrative expenses for dental services, using the reporting template provided by the
commissioner of health. deleted text end new text begin Investment gain must be allocated annually based on premium
revenue dedicated to each business line, product, and individual state public program. The
Minnesota Supplement Report #1A categorized administrative expenses must reconcile to
the general administrative expenses reported on line 21 on Minnesota Supplement Report
#1, as well as the underwriting and investment exhibit part 3 - analysis of expenses, of
the NAIC health blank. The Minnesota Supplement Report #1A categories include the
following expense categories from the underwriting and investment exhibit part 3:
new text end

new text begin (1) employee benefit expenses: salaries, wages, and benefits;
new text end

new text begin (2) sales expenses: commissions, marketing, and advertising; cost of sales-related
materials, postage, telephone, and printing materials;
new text end

new text begin (3) general business and office type expenses: rent; non-sales-related postage,
express, and telephone; non-sales-related printing and office supplies; taxes, excluding state
premium taxes and assessments; licenses and fees; traveling expenses; insurance, except on
real estate; collection and bank service charges; group service and administration fees; real
estate expenses; real estate taxes; equipment; occupancy, depreciation and amortization;
cost or depreciation of electronic data processing (EDP) equipment and software;
new text end

new text begin (4) state premium taxes and assessments;
new text end

new text begin (5) consulting and professional fees: legal fees and expenses; certifications and
accreditation fees; auditing, actuarial, and other consulting fees; board, bureau, and
association fees;
new text end

new text begin (6) outsourced services: EDP; claims and other services; and
new text end

new text begin (7) other expenses: investment expenses not included elsewhere; aggregate
write-ins for expenses; reimbursements by uninsured plans; reimbursements from fiscal
intermediaries.
new text end

(b) deleted text begin Every health maintenance organization must allocate investment income based
on cumulative net income over time by business line or product and must submit this
information, including investment income for dental services, using the reporting template
provided by the commissioner of health. deleted text end new text begin For purposes of this subdivision:
new text end

new text begin (1) "directly allocate" means to assign costs for an item to a specific product or
individual state public program when the cost can be specifically identified with, and
benefits, the particular product or individual state public program, and the allocated costs
are based on the relative benefits received; and
new text end

new text begin (2) "individual state public program" means each medical assistance program,
including the prepaid medical assistance program, Minnesota senior health options,
Minnesota senior care plus, and special needs basic care; and the MinnesotaCare program.
new text end

Sec. 2.

Minnesota Statutes 2014, section 256B.69, subdivision 5a, is amended to read:

Subd. 5a.

Managed care contracts.

(a) Managed care contracts under this section
and section 256L.12 shall be entered into or renewed on a calendar year basis. The
commissioner may issue separate contracts with requirements specific to services to
medical assistance recipients age 65 and older.

(b) A prepaid health plan providing covered health services for eligible persons
pursuant to chapters 256B and 256L is responsible for complying with the terms of its
contract with the commissioner. Requirements applicable to managed care programs
under chapters 256B and 256L established after the effective date of a contract with the
commissioner take effect when the contract is next issued or renewed.

(c) The commissioner shall withhold five percent of managed care plan payments
under this section and county-based purchasing plan payments under section 256B.692
for the prepaid medical assistance program pending completion of performance targets.
Each performance target must be quantifiable, objective, measurable, and reasonably
attainable, except in the case of a performance target based on a federal or state law
or rule. Criteria for assessment of each performance target must be outlined in writing
prior to the contract effective date. Clinical or utilization performance targets and their
related criteria must consider evidence-based research and reasonable interventions when
available or applicable to the populations served, and must be developed with input from
external clinical experts and stakeholders, including managed care plans, county-based
purchasing plans, and providers. The managed care or county-based purchasing plan
must demonstrate, to the commissioner's satisfaction, that the data submitted regarding
attainment of the performance target is accurate. The commissioner shall periodically
change the administrative measures used as performance targets in order to improve plan
performance across a broader range of administrative services. The performance targets
must include measurement of plan efforts to contain spending on health care services and
administrative activities. The commissioner may adopt plan-specific performance targets
that take into account factors affecting only one plan, including characteristics of the
plan's enrollee population. The withheld funds must be returned no sooner than July of the
following year if performance targets in the contract are achieved. The commissioner may
exclude special demonstration projects under subdivision 23.

(d) The commissioner shall require that managed care plans use the assessment and
authorization processes, forms, timelines, standards, documentation, and data reporting
requirements, protocols, billing processes, and policies consistent with medical assistance
fee-for-service or the Department of Human Services contract requirements consistent
with medical assistance fee-for-service or the Department of Human Services contract
requirements for all personal care assistance services under section 256B.0659.

(e) Effective for services rendered on or after January 1, 2012, the commissioner
shall include as part of the performance targets described in paragraph (c) a reduction
in the health plan's emergency department utilization rate for medical assistance and
MinnesotaCare enrollees, as determined by the commissioner. For 2012, the reduction
shall be based on the health plan's utilization in 2009. To earn the return of the withhold
each subsequent year, the managed care plan or county-based purchasing plan must
achieve a qualifying reduction of no less than ten percent of the plan's emergency
department utilization rate for medical assistance and MinnesotaCare enrollees, excluding
enrollees in programs described in subdivisions 23 and 28, compared to the previous
measurement year until the final performance target is reached. When measuring
performance, the commissioner must consider the difference in health risk in a managed
care or county-based purchasing plan's membership in the baseline year compared to the
measurement year, and work with the managed care or county-based purchasing plan to
account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31
of the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate
was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue for each consecutive contract
period until the plan's emergency room utilization rate for state health care program
enrollees is reduced by 25 percent of the plan's emergency room utilization rate for medical
assistance and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate
with the health plans in meeting this performance target and shall accept payment
withholds that may be returned to the hospitals if the performance target is achieved.

(f) Effective for services rendered on or after January 1, 2012, the commissioner
shall include as part of the performance targets described in paragraph (c) a reduction
in the plan's hospitalization admission rate for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. To earn the return of the withhold each
year, the managed care plan or county-based purchasing plan must achieve a qualifying
reduction of no less than five percent of the plan's hospital admission rate for medical
assistance and MinnesotaCare enrollees, excluding enrollees in programs described in
subdivisions 23 and 28, compared to the previous calendar year until the final performance
target is reached. When measuring performance, the commissioner must consider the
difference in health risk in a managed care or county-based purchasing plan's membership
in the baseline year compared to the measurement year, and work with the managed care
or county-based purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July
31 of the following calendar year if the managed care plan or county-based purchasing
plan demonstrates to the satisfaction of the commissioner that this reduction in the
hospitalization rate was achieved. The commissioner shall structure the withhold so that
the commissioner returns a portion of the withheld funds in amounts commensurate with
achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph shall continue until there is a 25 percent
reduction in the hospital admission rate compared to the hospital admission rates in
calendar year 2011, as determined by the commissioner. The hospital admissions in this
performance target do not include the admissions applicable to the subsequent hospital
admission performance target under paragraph (g). Hospitals shall cooperate with the
plans in meeting this performance target and shall accept payment withholds that may be
returned to the hospitals if the performance target is achieved.

(g) Effective for services rendered on or after January 1, 2012, the commissioner
shall include as part of the performance targets described in paragraph (c) a reduction in
the plan's hospitalization admission rates for subsequent hospitalizations within 30 days of
a previous hospitalization of a patient regardless of the reason, for medical assistance and
MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the
withhold each year, the managed care plan or county-based purchasing plan must achieve
a qualifying reduction of the subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23
and 28, of no less than five percent compared to the previous calendar year until the
final performance target is reached.

The withheld funds must be returned no sooner than July 1 and no later than July
31 of the following calendar year if the managed care plan or county-based purchasing
plan demonstrates to the satisfaction of the commissioner that a qualifying reduction in
the subsequent hospitalization rate was achieved. The commissioner shall structure the
withhold so that the commissioner returns a portion of the withheld funds in amounts
commensurate with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph must continue for each consecutive
contract period until the plan's subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23
and 28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar
year 2011. Hospitals shall cooperate with the plans in meeting this performance target and
shall accept payment withholds that must be returned to the hospitals if the performance
target is achieved.

(h) Effective for services rendered on or after January 1, 2013, through December
31, 2013, the commissioner shall withhold 4.5 percent of managed care plan payments
under this section and county-based purchasing plan payments under section 256B.692
for the prepaid medical assistance program. The withheld funds must be returned no
sooner than July 1 and no later than July 31 of the following year. The commissioner may
exclude special demonstration projects under subdivision 23.

(i) Effective for services rendered on or after January 1, 2014, the commissioner
shall withhold three percent of managed care plan payments under this section and
county-based purchasing plan payments under section 256B.692 for the prepaid medical
assistance program. The withheld funds must be returned no sooner than July 1 and
no later than July 31 of the following year. The commissioner may exclude special
demonstration projects under subdivision 23.

(j) A managed care plan or a county-based purchasing plan under section 256B.692
may include as admitted assets under section 62D.044 any amount withheld under this
section that is reasonably expected to be returned.

(k) Contracts between the commissioner and a prepaid health plan are exempt from
the set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph
(a), and 7.

(l) The return of the withhold under paragraphs (h) and (i) is not subject to the
requirements of paragraph (c).

new text begin (m) Managed care plans and county-based purchasing plans shall maintain current
and fully executed agreements for all subcontractors, including bargaining groups, for
administrative services that are expensed to the state's public programs. Subcontractor
agreements must be in the form of a written instrument or electronic document containing
the elements of offer, acceptance, and consideration, and include sufficient detail on
payment terms, scope, and duration of the contract to verify the payment amounts and how
the subcontractor services relate to state public programs. Upon request, the commissioner
shall have access to all subcontractor documentation under this paragraph. Nothing in this
paragraph shall allow release of information that is nonpublic data pursuant to section
13.02.
new text end

Sec. 3.

Minnesota Statutes 2014, section 256B.69, subdivision 5i, is amended to read:

Subd. 5i.

Administrative expenses.

(a) deleted text begin Managed care plan and county-based
purchasing plan deleted text end Administrative costs deleted text begin for a prepaid health plan provided deleted text end new text begin paid to managed
care plans new text end under this section deleted text begin or deleted text end new text begin , new text end section 256B.692 new text begin , or section 256L.12 new text end must not exceed deleted text begin by
more than five deleted text end new text begin 6.6 new text end percent deleted text begin that prepaid health plan's or county-based purchasing plan's
actual calculated administrative spending for the previous calendar year as a percentage
of total revenue deleted text end new text begin of total managed care plan payments in aggregate across all state public
programs for each calendar year new text end . deleted text begin The penalty for exceeding this limit must be the amount
of administrative spending in excess of 105 percent of the actual calculated amount.
The commissioner may waive this penalty if the excess administrative spending is the
result of unexpected shifts in enrollment or member needs or new program requirements. deleted text end new text begin
The commissioner may reduce or eliminate administrative requirements to meet the
administrative cost limit. For purposes of this paragraph, administrative costs do not
include premium taxes paid under section 297I.05, subdivision 5, and provider surcharges
paid under section 256.9657, subdivision 3.
new text end

(b) The following expenses are not allowable administrative expenses for rate-setting
purposes under this section:

(1) charitable contributions made by the managed care plan or the county-based
purchasing plan;

(2) any portion of an individual's compensation in excess of $200,000 paid by the
managed care plan or county-based purchasing plan new text begin , inclusive of all individual state
public programs new text end ;

(3) any penalties or fines assessed against the managed care plan or county-based
purchasing plan; deleted text begin and
deleted text end

(4) any indirect marketing or advertising expenses of the managed care plan or
county-based purchasing plan deleted text begin . deleted text end new text begin , including but not limited to costs to promote the managed
care plan, costs of facilities used and related to special events, displays, demonstrations,
donations, and promotional items, such as memorabilia, models, gifts, and souvenirs;
new text end

new text begin (5) any lobbying and political activities, events, or contributions;
new text end

new text begin (6) administrative expenses related to the provision of services not covered under
the state plan or waiver;
new text end

new text begin (7) alcoholic beverages and related costs;
new text end

new text begin (8) membership in any social, dining, or country club or organization; and
new text end

new text begin (9) entertainment, including amusement, diversion, and social activities, and any
costs directly associated with these costs, including but not limited to tickets to shows or
sporting events, meals, lodging, rentals, transportation, and gratuities.
new text end

For the purposes of this subdivision, compensation includes salaries, bonuses and
incentives, other reportable compensation on an IRS 990 form, retirement and other
deferred compensation, and nontaxable benefits. new text begin Contributions include payments for
or to any organization or entity selected by the health maintenance organization that is
operated for charitable, educational, political, religious, or scientific purposes and not
related to the provision of medical and administrative services covered under the medical
assistance and MinnesotaCare programs.
new text end

new text begin (c) For administrative services expensed to the state's public programs, managed
care plans and county-based purchasing plans must clearly identify and separately record
expense items listed under paragraph (b) in their accounting systems in a manner that
allows for independent verification of unallowable expenses for purposes of determining
payment rates for state public health care programs.
new text end

Sec. 4.

Minnesota Statutes 2014, section 256B.69, subdivision 9c, is amended to read:

Subd. 9c.

Managed care financial reporting.

(a) The commissioner shall collect
detailed data regarding financials, provider payments, provider rate methodologies, and
other data as determined by the commissioner. The commissioner, in consultation with the
commissioners of health and commerce, and in consultation with managed care plans and
county-based purchasing plans, shall set uniform criteria, definitions, and standards for the
data to be submitted, and shall require managed care and county-based purchasing plans
to comply with these criteria, definitions, and standards when submitting data under this
section. In carrying out the responsibilities of this subdivision, the commissioner shall
ensure that the data collection is implemented in an integrated and coordinated manner
that avoids unnecessary duplication of effort. To the extent possible, the commissioner
shall use existing data sources and streamline data collection in order to reduce public
and private sector administrative costs. Nothing in this subdivision shall allow release of
information that is nonpublic data pursuant to section 13.02.

(b) Effective January 1, 2014, each managed care and county-based purchasing plan
must quarterly provide to the commissioner the following information on state public
programs, in the form and manner specified by the commissioner, according to guidelines
developed by the commissioner in consultation with managed care plans and county-based
purchasing plans under contract:

(1) an income statement by program;

(2) financial statement footnotes;

(3) quarterly profitability by program and population group;

(4) a medical liability summary by program and population group;

(5) received but unpaid claims report by program;

(6) services versus payment lags by program for hospital services, outpatient
services, physician services, other medical services, and pharmaceutical benefits;

(7) utilization reports that summarize utilization and unit cost information by
program for hospitalization services, outpatient services, physician services, and other
medical services;

(8) pharmaceutical statistics by program and population group for measures of price
and utilization of pharmaceutical services;

(9) subcapitation expenses by population group;

(10) third-party payments by program;

(11) all new, active, and closed subrogation cases by program;

(12) all new, active, and closed fraud and abuse cases by program;

(13) medical loss ratios by program;

(14) administrative expenses by category and subcategory by program that reconcile
to other state and federal regulatory agencies;

(15) revenues by program, including investment income;

(16) nonadministrative service payments, provider payments, and reimbursement
rates by provider type or service category, by program, paid by the managed care plan
under this section or the county-based purchasing plan under section 256B.692 to
providers and vendors for administrative services under contract with the plan, including
but not limited to:

(i) individual-level provider payment and reimbursement rate data;

(ii) provider reimbursement rate methodologies by provider type, by program,
including a description of alternative payment arrangements and payments outside the
claims process;

(iii) data on implementation of legislatively mandated provider rate changes; and

(iv) individual-level provider payment and reimbursement rate data and plan-specific
provider reimbursement rate methodologies by provider type, by program, including
alternative payment arrangements and payments outside the claims process, provided to
the commissioner under this subdivision are nonpublic data as defined in section 13.02;

(17) data on the amount of reinsurance or transfer of risk by program; and

(18) contribution to reserve, by program.

(c) In the event a report is published or released based on data provided under
this subdivision, the commissioner shall provide the report to managed care plans and
county-based purchasing plans 15 days prior to the publication or release of the report.
Managed care plans and county-based purchasing plans shall have 15 days to review the
report and provide comment to the commissioner.

The quarterly reports shall be submitted to the commissioner no later than 60 days after the
end of the previous quarter, except the fourth-quarter report, which shall be submitted by
April 1 of each year. The fourth-quarter report shall include audited financial statements,
parent company audited financial statements, an income statement reconciliation report,
and any other documentation necessary to reconcile the detailed reports to the audited
financial statements.

new text begin (d) Managed care plans and county-based plans shall certify to the commissioner
for the purposes of financial reporting for state public health care programs under this
subdivision, and for reporting to the commissioner of health under section 62D.08, that
costs reported for state public health care programs include:
new text end

new text begin (1) only services covered under the state plan and waivers, and related allowable
administrative expenses; and
new text end

new text begin (2) the dollar value of unallowable and nonstate plan services, including both
medical and administrative expenditures, that have been excluded.
new text end

Sec. 5.

Minnesota Statutes 2014, section 256B.69, subdivision 9d, is amended to read:

Subd. 9d.

Financial deleted text begin audit deleted text end new text begin and quality assurance audits new text end .

deleted text begin (a) The legislative
auditor shall contract with an audit firm to conduct a biennial independent third-party
financial audit of the information required to be provided by managed care plans and
county-based purchasing plans under subdivision 9c, paragraph (b). The audit shall be
conducted in accordance with generally accepted government auditing standards issued
by the United States Government Accountability Office. The contract with the audit
firm shall be designed and administered so as to render the independent third-party audit
eligible for a federal subsidy, if available. The contract shall require the audit to include
a determination of compliance with the federal Medicaid rate certification process. The
contract shall require the audit to determine if the administrative expenses and investment
income reported by the managed care plans and county-based purchasing plans are
compliant with state and federal law.
deleted text end

deleted text begin (b) For purposes of this subdivision, "independent third party" means an audit firm
that is independent in accordance with government auditing standards issued by the United
States Government Accountability Office and licensed in accordance with chapter 326A.
An audit firm under contract to provide services in accordance with this subdivision must
not have provided services to a managed care plan or county-based purchasing plan during
the period for which the audit is being conducted.
deleted text end

deleted text begin (c) deleted text end new text begin (a) new text end The commissioner shall require, in the request for bids and resulting contracts
with managed care plans and county-based purchasing plans under this section and
section 256B.692, that each managed care plan and county-based purchasing plan submit
to and fully cooperate with the independent third-party financial deleted text begin audit deleted text end new text begin audits by the
legislative auditor under subdivision 9e new text end of the information required under subdivision 9c,
paragraph (b). Each contract with a managed care plan or county-based purchasing plan
under this section or section 256B.692 must provide the commissioner and the deleted text begin audit firm deleted text end
new text begin vendors new text end contracting with the legislative auditor access to all data required to complete
deleted text begin the audit. For purposes of this subdivision, the contracting audit firm shall have the same
investigative power as the legislative auditor under section 3.978, subdivision 2 deleted text end new text begin audits
under subdivision 9e new text end .

deleted text begin (d) deleted text end new text begin (b) new text end Each managed care plan and county-based purchasing plan providing services
under this section shall provide to the commissioner biweekly encounter data and claims
data for state public health care programs and shall participate in a quality assurance
program that verifies the timeliness, completeness, accuracy, and consistency of the data
provided. The commissioner shall develop written protocols for the quality assurance
program and shall make the protocols publicly available. The commissioner shall contract
for an independent third-party audit to evaluate the quality assurance protocols as to
the capacity of the protocols to ensure complete and accurate data and to evaluate the
commissioner's implementation of the protocols. deleted text begin The audit firm under contract to provide
this evaluation must meet the requirements in paragraph (b).
deleted text end

deleted text begin (e) Upon completion of the audit under paragraph (a) and receipt by the legislative
auditor, the legislative auditor shall provide copies of the audit report to the commissioner,
the state auditor, the attorney general, and the chairs and ranking minority members of the
health and human services finance committees of the legislature. deleted text end new text begin (c) new text end Upon completion
of the evaluation under paragraph deleted text begin (d) deleted text end new text begin (b) new text end , the commissioner shall provide copies of the
report to the legislative auditor and the chairs and ranking minority members of the deleted text begin health
finance committees of the legislature deleted text end new text begin legislative committees with jurisdiction over health
care policy and financing new text end .

deleted text begin (f) deleted text end new text begin (d) new text end Any actuary under contract with the commissioner to provide actuarial
services must meet the independence requirements under the professional code for fellows
in the Society of Actuaries and must not have provided actuarial services to a managed
care plan or county-based purchasing plan that is under contract with the commissioner
pursuant to this section and section 256B.692 during the period in which the actuarial
services are being provided. An actuary or actuarial firm meeting the requirements
of this paragraph must certify and attest to the rates paid to the managed care plans
and county-based purchasing plans under this section and section 256B.692, and the
certification and attestation must be auditable.

new text begin (e) The commissioner shall conduct ad hoc audits of managed care organizations'
administrative and medical expenses. This includes: financial and encounter data
reported to the commissioner under subdivision 9c, including payments to providers
and subcontractors; supporting documentation for expenditures; categorization
of administrative and medical expenses; and allocation methods used to attribute
administrative expenses to state public programs. These audits also must monitor
compliance with data and financial certifications provided to the commissioner for the
purposes of managed care capitation payment rate-setting. The managed care plans and
county-based purchasing plans shall fully cooperate with the audits in this subdivision.
The commissioner shall impose a financial penalty for plans that fail to comply with
this subdivision.
new text end

deleted text begin (g) deleted text end new text begin (f) new text end Nothing in this subdivision shall allow the release of information that is
nonpublic data pursuant to section 13.02.

Sec. 6.

Minnesota Statutes 2014, section 256B.69, is amended by adding a subdivision
to read:

new text begin Subd. 9e. new text end

new text begin Financial audits. new text end

new text begin (a) The legislative auditor shall contract with vendors
to conduct independent third-party financial audits of the information required to be
provided by managed care plans and county-based purchasing plans under subdivision
9c, paragraph (b). The audits by the vendors shall be conducted as vendor resources
permit and in accordance with generally accepted government auditing standards issued
by the United States Government Accountability Office. The contract with the vendors
shall be designed and administered so as to render the independent third-party audits
eligible for a federal subsidy, if available. The contract shall require the audits to include a
determination of compliance with the federal Medicaid rate certification process.
new text end

new text begin (b) For purposes of this subdivision, "independent third-party" means a vendor that
is independent in accordance with government auditing standards issued by the United
States Government Accountability Office.
new text end

Sec. 7.

Laws 2008, chapter 363, article 18, section 3, subdivision 5, is amended to read:

Subd. 5. Basic Health Care Grants

(a) MinnesotaCare Grants

Health Care Access

-0-

(770,000)

Incentive Program and Outreach Grants.
Of the appropriation for the Minnesota health
care outreach program in Laws 2007, chapter
147, article 19, section 3, subdivision 7,
paragraph (b):

(1) $400,000 in fiscal year 2009 from the
general fund and $200,000 in fiscal year 2009
from the health care access fund are for the
incentive program under Minnesota Statutes,
section 256.962, subdivision 5. For the
biennium beginning July 1, 2009, base level
funding for this activity shall be $360,000
from the general fund and $160,000 from the
health care access fund; and

(2) $100,000 in fiscal year 2009 from the
general fund and $50,000 in fiscal year 2009
from the health care access fund are for the
outreach grants under Minnesota Statutes,
section 256.962, subdivision 2. For the
biennium beginning July 1, 2009, base level
funding for this activity shall be $90,000
from the general fund and $40,000 from the
health care access fund.

(b) MA Basic Health Care Grants - Families and Children

-0-

(17,280,000)

Third-Party Liability. (a) During
fiscal year 2009, the commissioner shall
employ a contractor paid on a percentage
basis to improve third-party collections.
Improvement initiatives may include, but not
be limited to, efforts to improve postpayment
collection from nonresponsive claims and
efforts to uncover third-party payers the
commissioner has been unable to identify.

(b) In fiscal year 2009, the first $1,098,000
of recoveries, after contract payments and
federal repayments, is appropriated to
the commissioner for technology-related
expenses.

deleted text begin Administrative Costs. (a) For contracts
effective on or after January 1, 2009,
the commissioner shall limit aggregate
administrative costs paid to managed care
plans under Minnesota Statutes, section
256B.69, and to county-based purchasing
plans under Minnesota Statutes, section
256B.692, to an overall average of 6.6 percent
of total contract payments under Minnesota
Statutes, sections 256B.69 and 256B.692,
for each calendar year. For purposes of
this paragraph, administrative costs do not
include premium taxes paid under Minnesota
Statutes, section 297I.05, subdivision 5, and
provider surcharges paid under Minnesota
Statutes, section 256.9657, subdivision 3.
deleted text end

deleted text begin (b) Notwithstanding any law to the contrary,
the commissioner may reduce or eliminate
administrative requirements to meet the
administrative target under paragraph (a).
deleted text end

deleted text begin (c) Notwithstanding any contrary provision
of this article, this rider shall not expire.
deleted text end

Hospital Payment Delay. Notwithstanding
Laws 2005, First Special Session chapter 4,
article 9, section 2, subdivision 6, payments
from the Medicaid Management Information
System that would otherwise have been made
for inpatient hospital services for medical
assistance enrollees are delayed as follows:
(1) for fiscal year 2008, June payments must
be included in the first payments in fiscal
year 2009; and (2) for fiscal year 2009,
June payments must be included in the first
payment of fiscal year 2010. The provisions
of Minnesota Statutes, section 16A.124,
do not apply to these delayed payments.
Notwithstanding any contrary provision in
this article, this paragraph expires on June
30, 2010.

(c) MA Basic Health Care Grants - Elderly and Disabled

(14,028,000)

(9,368,000)

Minnesota Disability Health Options Rate
Setting Methodology. The commissioner
shall develop and implement a methodology
for risk adjusting payments for community
alternatives for disabled individuals (CADI)
and traumatic brain injury (TBI) home
and community-based waiver services
delivered under the Minnesota disability
health options program (MnDHO) effective
January 1, 2009. The commissioner shall
take into account the weighting system used
to determine county waiver allocations in
developing the new payment methodology.
Growth in the number of enrollees receiving
CADI or TBI waiver payments through
MnDHO is limited to an increase of 200
enrollees in each calendar year from January
2009 through December 2011. If those limits
are reached, additional members may be
enrolled in MnDHO for basic care services
only as defined under Minnesota Statutes,
section 256B.69, subdivision 28, and the
commissioner may establish a waiting list for
future access of MnDHO members to those
waiver services.

MA Basic Elderly and Disabled
Adjustments. For the fiscal year ending June
30, 2009, the commissioner may adjust the
rates for each service affected by rate changes
under this section in such a manner across
the fiscal year to achieve the necessary cost
savings and minimize disruption to service
providers, notwithstanding the requirements
of Laws 2007, chapter 147, article 7, section
71.

(d) General Assistance Medical Care Grants

-0-

(6,971,000)

(e) Other Health Care Grants

-0-

(17,000)

MinnesotaCare Outreach Grants Special
Revenue Account. The balance in the
MinnesotaCare outreach grants special
revenue account on July 1, 2009, estimated
to be $900,000, must be transferred to the
general fund.

Grants Reduction. Effective July 1, 2008,
base level funding for nonforecast, general
fund health care grants issued under this
paragraph shall be reduced by 1.8 percent at
the allotment level.