HF 3979

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health care; creating a prescription drug discount program; expanding
the benefit set for single adults; increasing the eligibility income limit for single
adults; increasing the cap for inpatient hospitalization benefits for adults;
modifying the definition of income for self-employed farmers; establishing a
small employer option; amending Minnesota Statutes 2004, sections 256L.03,
subdivision 3; 256L.04, subdivision 7; Minnesota Statutes 2005 Supplement,
sections 256L.01, subdivision 4; 256L.03, subdivisions 1, 5; 256L.07,
subdivision 1; proposing coding for new law in Minnesota Statutes, chapters
256; 256L; repealing Minnesota Statutes 2005 Supplement, section 256L.035.

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

Section 1.

new text begin [256.9545] PRESCRIPTION DRUG DISCOUNT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment; administration. new text end

new text begin The commissioner shall establish
and administer the prescription drug discount program.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner's authority. new text end

new text begin The commissioner shall administer a drug
rebate program for drugs purchased according to the prescription drug discount program.
The commissioner shall execute a rebate agreement from all manufacturers that choose to
participate in the program for those drugs covered under the medical assistance program.
For each drug, the amount of the rebate shall be equal to the rebate as defined for purposes
of the federal rebate program in United States Code, title 42, section 1396r-8. The
rebate program shall utilize the terms and conditions used for the federal rebate program
established according to section 1927 of title XIX of the federal Social Security Act.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have the
meanings given them.
new text end

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

new text begin (b) "Covered prescription drug" means a prescription drug as defined in section
151.44, paragraph (d), that is covered under medical assistance as described in section
256B.0625, subdivision 13, and that is provided by a participating manufacturer that has a
fully executed rebate agreement with the commissioner under this section and complies
with that agreement.
new text end

new text begin (c) "Enrolled individual" means a person who is eligible for the program under
subdivision 4 and has enrolled in the program according to subdivision 5.
new text end

new text begin (d) "Health carrier" means an insurance company licensed under chapter 60A to
offer, sell, or issue an individual or group policy of accident and sickness insurance as
defined in section 62A.01; a nonprofit health service plan corporation operating under
chapter 62C; a health maintenance organization operating under chapter 62D; a joint
self-insurance employee health plan operating under chapter 62H; a community integrated
service network licensed under chapter 62N; a fraternal benefit society operating under
chapter 64B; a city, county, school district, or other political subdivision providing
self-insured health coverage under section 471.617 or sections 471.98 to 471.982; and a
self-funded health plan under the Employee Retirement Income Security Act of 1974, as
amended.
new text end

new text begin (e) "Participating manufacturer" means a manufacturer as defined in section 151.44,
paragraph (c), that agrees to participate in the prescription drug discount program.
new text end

new text begin (f) "Participating pharmacy" means a pharmacy as defined in section 151.01,
subdivision 2, that agrees to participate in the prescription drug discount program.
new text end

new text begin Subd. 4. new text end

new text begin Eligibility. new text end

new text begin (a) To be eligible for the program, an applicant must:
new text end

new text begin (1) be a permanent resident of Minnesota as defined in section 256L.09, subdivision
4;
new text end

new text begin (2) not be enrolled in medical assistance, general assistance medical care, or
MinnesotaCare;
new text end

new text begin (3) not be enrolled in and have currently available prescription drug coverage under
a health plan offered by a health carrier or employer or under a pharmacy benefit program
offered by a pharmaceutical manufacturer; and
new text end

new text begin (4) not be enrolled in and have currently available prescription drug coverage
under a Medicare supplement policy, as defined in sections 62A.31 to 62A.44, or
policies, contracts, or certificates that supplement Medicare issued by health maintenance
organizations or those policies, contracts, or certificates governed by section 1833 or 1876
of the federal Social Security Act, United States Code, title 42, section 1395, et seq., as
amended.
new text end

new text begin (b) Notwithstanding paragraph (a), clause (3), an individual who is enrolled in a
Medicare Part D prescription drug plan or Medicare Advantage plan is eligible for the
program but only for drugs that are not covered under the Medicare Part D plan or for
drugs that are covered under the plan, but according to the conditions of the plan, the
individual is responsible for 100 percent of the cost of the prescription drug.
new text end

new text begin Subd. 5. new text end

new text begin Application procedure. new text end

new text begin (a) Applications and information on the program
must be made available at county social services agencies, health care provider offices, and
agencies and organizations serving senior citizens. Individuals shall submit applications
and any information specified by the commissioner as being necessary to verify eligibility
directly to the commissioner. The commissioner shall determine an applicant's eligibility
for the program within 30 days from the date the application is received. Upon notice of
approval, the applicant must submit to the commissioner the enrollment fee specified in
subdivision 10. Eligibility begins the month after the enrollment fee is received by the
commissioner.
new text end

new text begin (b) An enrollee's eligibility must be renewed every 12 months with the 12-month
period beginning in the month after the application is approved.
new text end

new text begin (c) The commissioner shall develop an application form that does not exceed one
page in length and requires information necessary to determine eligibility for the program.
new text end

new text begin Subd. 6. new text end

new text begin Participating pharmacy. new text end

new text begin (a) Upon implementation of the prescription
drug discount program, and until January 1, 2008, a participating pharmacy, with a
valid prescription, must sell a covered prescription drug to an enrolled individual at the
medical assistance rate.
new text end

new text begin (b) After January 1, 2008, a participating pharmacy, with a valid prescription, must
sell a covered prescription drug to an enrolled individual at the medical assistance rate,
minus an amount that is equal to the rebate amount described in subdivision 8, plus
the amount of any switch fee established by the commissioner under subdivision 10,
paragraph (b).
new text end

new text begin (c) Each participating pharmacy shall provide the commissioner with all information
necessary to administer the program, including, but not limited to, information on
prescription drug sales to enrolled individuals and usual and customary retail prices.
new text end

new text begin Subd. 7. new text end

new text begin Notification of rebate amount. new text end

new text begin The commissioner shall notify each
participating manufacturer, each calendar quarter or according to a schedule established
by the commissioner, of the amount of the rebate owed on the prescription drugs sold by
participating pharmacies to enrolled individuals.
new text end

new text begin Subd. 8. new text end

new text begin Provision of rebate. new text end

new text begin To the extent that a participating manufacturer's
prescription drugs are prescribed to a resident of this state, the manufacturer must provide
a rebate equal to the rebate provided under the medical assistance program for any
prescription drug distributed by the manufacturer that is purchased at a participating
pharmacy by an enrolled individual. The participating manufacturer must provide full
payment within 38 days of receipt of the state invoice for the rebate, or according to
a schedule to be established by the commissioner. The commissioner shall deposit all
rebates received into the Minnesota prescription drug dedicated fund established under
subdivision 11. The manufacturer must provide the commissioner with any information
necessary to verify the rebate determined per drug.
new text end

new text begin Subd. 9. new text end

new text begin Payment to pharmacies. new text end

new text begin Beginning January 1, 2008, the commissioner
shall distribute on a biweekly basis an amount that is equal to an amount collected under
subdivision 8 to each participating pharmacy based on the prescription drugs sold by that
pharmacy to enrolled individuals on or after January 1, 2008.
new text end

new text begin Subd. 10. new text end

new text begin Enrollment fee; switch fee. new text end

new text begin (a) The commissioner shall establish an
annual enrollment fee that covers the commissioner's expenses for enrollment, processing
claims, and distributing rebates under this program.
new text end

new text begin (b) The commissioner shall establish a reasonable switch fee that covers expenses
incurred by participating pharmacies in formatting for electronic submission claims for
prescription drugs sold to enrolled individuals.
new text end

new text begin Subd. 11. new text end

new text begin Dedicated fund; creation; use of fund. new text end

new text begin (a) The Minnesota prescription
drug dedicated fund is established as an account in the state treasury. The commissioner
of finance shall credit to the dedicated fund all rebates paid under subdivision 8, any
federal funds received for the program, all enrollment fees paid by the enrollees, and
any appropriations or allocations designated for the fund. The commissioner of finance
shall ensure that fund money is invested under section 11A.25. All money earned by the
fund must be credited to the fund. The fund shall earn a proportionate share of the total
state annual investment income.
new text end

new text begin (b) Money in the fund is appropriated to the commissioner to reimburse participating
pharmacies for prescription drugs provided to enrolled individuals under subdivision 6,
paragraph (b); to reimburse the commissioner for costs related to enrollment, processing
claims, and distributing rebates and for other reasonable administrative costs related to
administration of the prescription drug discount program; and to repay the appropriation
provided by law for this section. The commissioner must administer the program so that
the costs total no more than funds appropriated plus the drug rebate proceeds.
new text end

Sec. 2.

Minnesota Statutes 2005 Supplement, section 256L.01, subdivision 4, is
amended to read:

Subd. 4.

Gross individual or gross family income.

(a) "Gross individual or gross
family income" for nonfarm self-employed means income calculated for the six-month
period of eligibility using the net profit or loss reported on the applicant's federal income
tax form for the previous year and using the medical assistance families with children
methodology for determining allowable and nonallowable self-employment expenses and
countable income.

(b) "Gross individual or gross family income" for farm self-employed means income
calculated for the six-month period of eligibility using as the baseline the adjusted gross
income reported on the applicant's federal income tax form for the previous year deleted text begin and
adding back in reported depreciation amounts that apply to the business in which the
family is currently engaged deleted text end .

(c) "Gross individual or gross family income" means the total income for all family
members, calculated for the six-month period of eligibility.

Sec. 3.

Minnesota Statutes 2005 Supplement, section 256L.03, subdivision 1, is
amended to read:

Subdivision 1.

Covered health services.

deleted text begin For individuals under section 256L.04,
subdivision 7, with income no greater than 75 percent of the federal poverty guidelines
or for families with children under section 256L.04, subdivision 1, all subdivisions of
this section apply. deleted text end "Covered health services" means the health services reimbursed
under chapter 256B, with the exception of inpatient hospital services, special education
services, private duty nursing services, adult dental care services other than services
covered under section 256B.0625, subdivision 9, orthodontic services, nonemergency
medical transportation services, personal care assistant and case management services,
nursing home or intermediate care facilities services, inpatient mental health services,
and chemical dependency services. Outpatient mental health services covered under the
MinnesotaCare program are limited to diagnostic assessments, psychological testing,
explanation of findings, mental health telemedicine, psychiatric consultation, medication
management by a physician, day treatment, partial hospitalization, and individual, family,
and group psychotherapy.

No public funds shall be used for coverage of abortion under MinnesotaCare
except where the life of the female would be endangered or substantial and irreversible
impairment of a major bodily function would result if the fetus were carried to term; or
where the pregnancy is the result of rape or incest.

Covered health services shall be expanded as provided in this section.

Sec. 4.

Minnesota Statutes 2004, section 256L.03, subdivision 3, is amended to read:

Subd. 3.

Inpatient hospital services.

(a) Covered health services shall include
inpatient hospital services, including inpatient hospital mental health services and inpatient
hospital and residential chemical dependency treatment, subject to those limitations
necessary to coordinate the provision of these services with eligibility under the medical
assistance spenddown. deleted text begin Prior to July 1, 1997, the inpatient hospital benefit for adult
enrollees is subject to an annual benefit limit of $10,000. deleted text end The inpatient hospital benefit for
adult enrollees who qualify under section 256L.04, subdivision 7, or who qualify under
section 256L.04, subdivisions 1 and 2, with family gross income that exceeds deleted text begin 175 deleted text end new text begin 190 new text end
percent of the federal poverty guidelines and who are not pregnant, is subject to an annual
limit of deleted text begin $10,000 deleted text end new text begin $20,000 new text end .

(b) Admissions for inpatient hospital services paid for under section 256L.11,
subdivision 3, must be certified as medically necessary in accordance with Minnesota
Rules, parts 9505.0500 to 9505.0540, except as provided in clauses (1) and (2):

(1) all admissions must be certified, except those authorized under rules established
under section 254A.03, subdivision 3, or approved under Medicare; and

(2) payment under section 256L.11, subdivision 3, shall be reduced by five percent
for admissions for which certification is requested more than 30 days after the day of
admission. The hospital may not seek payment from the enrollee for the amount of the
payment reduction under this clause.

Sec. 5.

Minnesota Statutes 2005 Supplement, section 256L.03, subdivision 5, is
amended to read:

Subd. 5.

Co-payments and coinsurance.

(a) Except as provided in paragraphs (b)
and (c), the MinnesotaCare benefit plan shall include the following co-payments and
coinsurance requirements for all enrollees:

(1) ten percent of the paid charges for inpatient hospital services for adult enrollees,
subject to an annual inpatient out-of-pocket maximum of $1,000 per individual and
$3,000 per family;

(2) $3 per prescription for adult enrollees;

(3) $25 for eyeglasses for adult enrollees;

(4) $3 per nonpreventive visit. For purposes of this subdivision, a "visit" means an
episode of service which is required because of a recipient's symptoms, diagnosis, or
established illness, and which is delivered in an ambulatory setting by a physician or
physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse,
audiologist, optician, or optometrist;

(5) $6 for nonemergency visits to a hospital-based emergency room; and

(6) 50 percent of the fee-for-service rate for adult dental care services other than
preventive care services for persons eligible under section 256L.04, subdivisions 1 to 7,
with income deleted text begin equal to or less deleted text end new text begin greater new text end than deleted text begin 175 deleted text end new text begin 190 new text end percent of the federal poverty guidelines.

(b) Paragraph (a), clause (1), does not apply to parents and relative caretakers of
children under the age of 21 deleted text begin in households with family income equal to or less than 175
percent of the federal poverty guidelines. Paragraph (a), clause (1), does not apply to
parents and relative caretakers of children under the age of 21 in households with family
income greater than 175 percent of the federal poverty guidelines for inpatient hospital
admissions occurring on or after January 1, 2001 deleted text end .

(c) Paragraph (a), clauses (1) to (4), do not apply to pregnant women and children
under the age of 21.

(d) Adult enrollees with family gross income that exceeds deleted text begin 175 deleted text end new text begin 190 new text end percent of the
federal poverty guidelines and who are not pregnant shall be financially responsible for
the coinsurance amount, if applicable, and amounts which exceed the deleted text begin $10,000 deleted text end new text begin $20,000 new text end new text begin
new text end inpatient hospital benefit limit.

(e) When a MinnesotaCare enrollee becomes a member of a prepaid health
plan, or changes from one prepaid health plan to another during a calendar year, any
charges submitted towards the deleted text begin $10,000 deleted text end new text begin $20,000 new text end annual inpatient benefit limit, and any
out-of-pocket expenses incurred by the enrollee for inpatient services, that were submitted
or incurred prior to enrollment, or prior to the change in health plans, shall be disregarded.

Sec. 6.

Minnesota Statutes 2004, section 256L.04, subdivision 7, is amended to read:

Subd. 7.

Single adults and households with no children.

The definition of eligible
persons includes all individuals and households with no children who have gross family
incomes that are equal to or less than deleted text begin 175 deleted text end new text begin 190 new text end percent of the federal poverty guidelines.

Sec. 7.

Minnesota Statutes 2005 Supplement, section 256L.07, subdivision 1, is
amended to read:

Subdivision 1.

General requirements.

(a) Children enrolled in the original
children's health plan as of September 30, 1992, children who enrolled in the
MinnesotaCare program after September 30, 1992, pursuant to Laws 1992, chapter 549,
article 4, section 17, and children who have family gross incomes that are equal to or
less than 150 percent of the federal poverty guidelines are eligible without meeting
the requirements of subdivision 2 and the four-month requirement in subdivision 3, as
long as they maintain continuous coverage in the MinnesotaCare program or medical
assistance. Children who apply for MinnesotaCare on or after the implementation date
of the employer-subsidized health coverage program as described in Laws 1998, chapter
407, article 5, section 45, who have family gross incomes that are equal to or less than 150
percent of the federal poverty guidelines, must meet the requirements of subdivision 2 to
be eligible for MinnesotaCare.

(b) Families enrolled in MinnesotaCare under section 256L.04, subdivision 1,
whose income increases above 275 percent of the federal poverty guidelines, are no
longer eligible for the program and shall be disenrolled by the commissioner. Individuals
enrolled in MinnesotaCare under section 256L.04, subdivision 7, whose income increases
above deleted text begin 175 deleted text end new text begin 190 new text end percent of the federal poverty guidelines are no longer eligible for the
program and shall be disenrolled by the commissioner. For persons disenrolled under
this subdivision, MinnesotaCare coverage terminates the last day of the calendar month
following the month in which the commissioner determines that the income of a family or
individual exceeds program income limits.

(c) Notwithstanding paragraph (b), children may remain enrolled in MinnesotaCare
if ten percent of their gross individual or gross family income as defined in section
256L.01, subdivision 4, is less than the premium for a six-month policy with a $500
deductible available through the Minnesota Comprehensive Health Association. Children
who are no longer eligible for MinnesotaCare under this clause shall be given a 12-month
notice period from the date that ineligibility is determined before disenrollment. The
premium for children remaining eligible under this clause shall be the maximum premium
determined under section 256L.15, subdivision 2, paragraph (b).

(d) Notwithstanding paragraphs (b) and (c), parents are not eligible for
MinnesotaCare if gross household income exceeds $25,000 for the six-month period
of eligibility.

Sec. 8.

new text begin [256L.20] MINNESOTACARE OPTION FOR SMALL EMPLOYERS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms used
have the meanings given them.
new text end

new text begin (b) "Dependent" means an unmarried child under the age of 21.
new text end

new text begin (c) "Eligible employee" means an employee who works at least 20 hours per week
for an eligible employer. Eligible employee does not include an employee who works
on a temporary or substitute basis or who does not work more than 26 weeks annually.
Coverage of an eligible employee includes the employee's spouse.
new text end

new text begin (d) "Eligible employer" means a business that employs at least two, but not more
than 50, eligible employees, the majority of whom are employed in the state, and includes
a municipality that has 50 or fewer employees.
new text end

new text begin (e) "Maximum premium" has the meaning given under section 256L.15, subdivision
2, paragraph (b), clause (3).
new text end

new text begin (f) "Participating employer" means an eligible employer who meets the requirements
in subdivision 3 and applies to the commissioner to enroll its eligible employees and their
dependents in the MinnesotaCare program.
new text end

new text begin (g) "Program" means the MinnesotaCare program.
new text end

new text begin Subd. 2. new text end

new text begin Option. new text end

new text begin Eligible employees and their dependents may enroll in
MinnesotaCare if the eligible employer meets the requirements of subdivision 3. The
effective date of coverage is as defined in section 256L.05, subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Employer requirements. new text end

new text begin The commissioner shall establish procedures for
an eligible employer to apply for coverage through the program. In order to participate, an
eligible employer must meet the following requirements:
new text end

new text begin (1) agree to contribute toward the cost of the premium for the employee, the
employee's spouse, and the employee's dependents according to subdivision 4;
new text end

new text begin (2) certify that at least 75 percent of its eligible employees who do not have other
creditable health coverage are enrolled in the program;
new text end

new text begin (3) offer coverage to all eligible employees, spouses, and dependents of eligible
employees; and
new text end

new text begin (4) have not provided employer-subsidized health coverage as an employee benefit
during the previous 12 months, as defined in section 256L.07, subdivision 2, paragraph (c).
new text end

new text begin Subd. 4. new text end

new text begin Premiums. new text end

new text begin (a) The premium for coverage provided under this section is
equal to the average monthly payment for families with children, excluding pregnant
women and children under the age of two.
new text end

new text begin (b) For eligible employees without dependents with income equal to or less than 175
percent of the federal poverty guidelines and for eligible employees with dependents with
income equal to or less than 275 percent of the federal poverty guidelines, the participating
employer shall pay 50 percent of the premium established under paragraph (a) for the
eligible employee, the employee's spouse, and any dependents, if applicable.
new text end

new text begin (c) For eligible employees without dependents with income over 175 percent of the
federal poverty guidelines and for eligible employees with dependents with income over
275 percent of the federal poverty guidelines, the participating employer shall pay the
full cost of the premium established under paragraph (a) for the eligible employee, the
employee's spouse, and any dependents, if applicable. The participating employer may
require the employee to pay a portion of the cost of the premium so long as the employer
pays 50 percent. If the employer requires the employee to pay a portion of the premium,
the employee shall pay the portion of the cost to the employer.
new text end

new text begin (d) The commissioner shall collect premium payments from participating employers
for eligible employees, spouses, and dependents who are covered by the program as
provided under this section. All premiums collected shall be deposited in the health care
access fund.
new text end

new text begin Subd. 5. new text end

new text begin Coverage. new text end

new text begin The coverage offered to those enrolled in the program under
this section must include all health services described under section 256L.03 and all
co-payments and coinsurance requirements under section 256L.03, subdivision 5, apply.
new text end

new text begin Subd. 6. new text end

new text begin Enrollment. new text end

new text begin Upon payment of the premium, according to this section
and section 256L.06, eligible employees, spouses, and dependents shall be enrolled in
MinnesotaCare. For purposes of enrollment under this section, income eligibility limits
established under sections 256L.04 and 256L.07, subdivision 1, and asset limits established
under section 256L.17 do not apply. The barriers established under section 256L.07,
subdivision 2 or 3, do not apply to enrollees eligible under this section. The commissioner
may require eligible employees to provide income verification to determine premiums.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2005 Supplement, section 256L.035, new text end new text begin is repealed.
new text end

Sec. 10. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 9 are effective August 1, 2006, or upon the implementation of
HealthMatch, whichever is later.
new text end