HF 3719

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; modifying requirements for county-based purchasing
plans; removing exemptions from the premium tax and provider surcharge;
requiring a study of county-based purchasing and taxpayer risk; amending
Minnesota Statutes 2006, sections 256.9657, subdivision 3; 256B.692,
subdivisions 1, 2, 5; 297I.05, subdivision 5.

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

Section 1.

Minnesota Statutes 2006, section 256.9657, subdivision 3, is amended to
read:

Subd. 3.

Surcharge on deleted text begin HMOs deleted text end new text begin health maintenance organizations, county-based
purchasing plans, new text end and community integrated service networks.

(a) Effective October
1, 1992, each health maintenance organization with a certificate of authority issued
by the commissioner of health under chapter 62D new text begin , each county-based purchasing plan
under section 256B.692, new text end and each community integrated service network licensed by the
commissioner under chapter 62N shall pay to the commissioner of human services a
surcharge equal to six-tenths of one percent of the total premium revenues of the health
maintenance organization new text begin , county-based purchasing plan, new text end or community integrated
service network as reported to the commissioner of health according to the schedule in
subdivision 4.

(b) For purposes of this subdivision, total premium revenue means:

(1) premium revenue recognized on a prepaid basis from individuals and groups
for provision of a specified range of health services over a defined period of time which
is normally one month, excluding premiums paid to a health maintenance organization
or community integrated service network from the Federal Employees Health Benefit
Program;

(2) premiums from Medicare wrap-around subscribers for health benefits which
supplement Medicare coverage;

(3) Medicare revenue, as a result of an arrangement between a health maintenance
organization new text begin , county-based purchasing plan, new text end or a community integrated service network
and the Centers for Medicare and Medicaid Services of the federal Department of Health
and Human Services, for services to a Medicare beneficiary, excluding Medicare revenue
that states are prohibited from taxing under sections 1854, 1860D-12, and 1876 of title
XVIII of the federal Social Security Act, codified as United States Code, title 42, sections
1395mm, 1395w-112, and 1395w-24, respectively, as they may be amended from time to
time; and

(4) medical assistance revenue, as a result of an arrangement between a health
maintenance organization new text begin , county-based purchasing plan, new text end or community integrated service
network and a Medicaid state agency, for services to a medical assistance beneficiary.

If advance payments are made under clause (1) or (2) to the health maintenance
organization or community integrated service network for more than one reporting period,
the portion of the payment that has not yet been earned must be treated as a liability.

(c) When a health maintenance organization or community integrated service
network merges or consolidates with or is acquired by another health maintenance
organization or community integrated service network, the surviving corporation or the
new corporation shall be responsible for the annual surcharge originally imposed on
each of the entities or corporations subject to the merger, consolidation, or acquisition,
regardless of whether one of the entities or corporations does not retain a certificate of
authority under chapter 62D or a license under chapter 62N.

(d) Effective July 1 of each year, the surviving corporation's or the new corporation's
surcharge shall be based on the revenues earned in the second previous calendar year by
all of the entities or corporations subject to the merger, consolidation, or acquisition
regardless of whether one of the entities or corporations does not retain a certificate of
authority under chapter 62D or a license under chapter 62N until the total premium
revenues of the surviving corporation include the total premium revenues of all the merged
entities as reported to the commissioner of health.

(e) When a health maintenance organization or community integrated service
network, which is subject to liability for the surcharge under this chapter, transfers,
assigns, sells, leases, or disposes of all or substantially all of its property or assets, liability
for the surcharge imposed by this chapter is imposed on the transferee, assignee, or buyer
of the health maintenance organization or community integrated service network.

(f) In the event a health maintenance organization or community integrated service
network converts its licensure to a different type of entity subject to liability for the
surcharge under this chapter, but survives in the same or substantially similar form, the
surviving entity remains liable for the surcharge regardless of whether one of the entities
or corporations does not retain a certificate of authority under chapter 62D or a license
under chapter 62N.

(g) The surcharge assessed to a health maintenance organization new text begin , county-based
purchasing plan, new text end or community integrated service network ends when the entity ceases
providing services for premiums and the cessation is not connected with a merger,
consolidation, acquisition, or conversion.

Sec. 2.

Minnesota Statutes 2006, section 256B.692, subdivision 1, is amended to read:

Subdivision 1.

In general.

County boards or groups of county boards may elect
to purchase or provide health care services on behalf of persons eligible for medical
assistance and general assistance medical care who would otherwise be required to or
may elect to participate in the prepaid medical assistance or prepaid general assistance
medical care programs according to sections 256B.69 and 256D.03. Counties that elect to
purchase or provide health care under this section must provide all services included in
prepaid managed care programs according to sections 256B.69, subdivisions 1 to 22, and
256D.03. County-based purchasing under this section is governed by section 256B.69,
unless otherwise provided for under this section. new text begin A county, or a group of counties in the
case of a multicounty arrangement, to the extent it operates a county-based purchasing
program under this section, may be described as a county-based purchasing plan.
new text end

Sec. 3.

Minnesota Statutes 2006, section 256B.692, subdivision 2, is amended to read:

Subd. 2.

Duties of commissioner of health.

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

(b) A county that elects to purchase medical assistance and general assistance
medical care services under this section must satisfy the commissioner of health that
the requirements for assurance of consumer protection, provider protection, and fiscal
solvency of chapter 62D, applicable to health maintenance organizations, or chapter 62N,
applicable to community integrated service networks, will be met. new text begin The commissioner of
health shall impose the same reserve requirements on a county-based purchasing plan
as required for a health maintenance organization, and shall not permit a county-based
purchasing plan to use a guarantee to meet these requirements. The commissioner also
shall subject county-based purchasing plans to section 62D.19, related to unreasonable
expenses. In the event that a county-based purchasing plan receives revenue that exceeds
its expenses, the surplus shall only be used to meet its obligations for sufficient reserves
under this section or to fund programs or services that would be permitted under chapter
62D. A county shall be considered a major participating entity under section 62D.02,
subdivision 13, with respect to any county-based purchasing plan in which it participates
under this section, such that the commissioner shall apply provisions under chapter 62D
regarding major participating entities to county-based purchasing plans, including but not
limited to the filing and reporting of contracts and payments between a county-based
purchasing plan and a county.
new text end

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

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

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

new text begin (f) If permitted by federal law, the commissioner may certify to the Centers for
Medicare and Medicaid Services that a county-based purchasing plan is authorized to
sell or offer specialized Medicare Advantage plans for special needs individuals only
if the commissioner determines that the county-based purchasing plan meets the same
state regulatory requirements that apply to health maintenance organizations selling or
offering such plans.
new text end

Sec. 4.

Minnesota Statutes 2006, section 256B.692, subdivision 5, is amended to read:

Subd. 5.

County proposals.

(a) On or before September 1, 1997, a county board
that wishes to purchase or provide health care under this section must submit a preliminary
proposal that substantially demonstrates the county's ability to meet all the requirements of
this section in response to criteria for proposals issued by the department on or before July
1, 1997. Counties submitting preliminary proposals must establish a local planning process
that involves input from medical assistance and general assistance medical care recipients,
recipient advocates, providers and representatives of local school districts, labor, and tribal
government to advise on the development of a final proposal and its implementation.

(b) The county board must submit a final proposal on or before July 1, 1998, that
demonstrates the ability to meet all the requirements of this section, including beginning
enrollment on January 1, 1999, unless a delay has been granted under section 256B.69,
subdivision 3a, paragraph (g).

(c) After January 1, 1999, for a county in which the prepaid medical assistance
program is in existence, the county board must submit a preliminary proposal at least 15
months prior to termination of health plan contracts in that county and a final proposal
six months prior to the health plan contract termination date in order to begin enrollment
after the termination. Nothing in this section shall impede or delay implementation
or continuation of the prepaid medical assistance and general assistance medical care
programs in counties for which the board does not submit a proposal, or submits a
proposal that is not in compliance with this section.

(d) The commissioner is not required to terminate contracts for the prepaid medical
assistance and prepaid general assistance medical care programs that begin on or after
September 1, 1997, in a county for which a county board has submitted a proposal under
this paragraph, until two years have elapsed from the date of initial enrollment in the
prepaid medical assistance and prepaid general assistance medical care programs.

new text begin (e) To ensure federal compliance and require choice for recipients, the commissioner
shall not solicit or accept any proposals, execute any contracts or amendments, or take any
other action which could have the effect of expanding county-based purchasing to other
counties on a single-plan or sole-source basis for any state health care program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2006, section 297I.05, subdivision 5, is amended to read:

Subd. 5.

Health maintenance organizations, nonprofit health service plan
corporations, new text begin county-based purchasing plans, new text end and community integrated service
networks.

(a) A tax is imposed on health maintenance organizations, community
integrated service networks, new text begin county-based purchasing plans operating under section
256B.692, new text end and nonprofit health care service plan corporations. The rate of tax is equal to
one percent of gross premiums less return premiums on all direct business received by
the organization, new text begin plan, new text end network, or corporation or its agents in Minnesota, in cash or
otherwise, in the calendar year.

(b) The commissioner shall deposit all revenues, including penalties and interest,
collected under this chapter from health maintenance organizations, community integrated
service networks, new text begin county-based purchasing plans, new text end and nonprofit health service plan
corporations in the health care access fund. Refunds of overpayments of tax imposed
by this subdivision must be paid from the health care access fund. There is annually
appropriated from the health care access fund to the commissioner the amount necessary
to make any refunds of the tax imposed under this subdivision.

Sec. 6. new text begin ACTUARIAL REPORT ON TAXPAYER RISK FROM COUNTY-BASED
PURCHASING.
new text end

new text begin The state auditor shall contract with an independent actuary to describe and evaluate
the potential impact on property taxes and county fund balances caused by counties
assuming financial risk for health care expenses for public health care program recipients
when operating as county-based purchasing or prepaid health plans under Minnesota
Statutes, section 256B.692. The state auditor shall submit a report containing the actuary's
evaluation to the legislature by January 1, 2009.
new text end