HF 2412

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 03/30/2012 11:18am

A bill for an act
relating to health; requiring certain changes in managed care plan financial
reporting; requiring an annual independent third-party audit; eliminating and
modifying reporting requirements; amending Minnesota Statutes 2010, sections
72A.201, subdivision 8; 256B.69, by adding a subdivision; Minnesota Statutes
2011 Supplement, section 256B.69, subdivision 9c; repealing Minnesota Statutes
2010, sections 62M.09, subdivision 9; 62Q.64; Minnesota Rules, part 4685.2000.

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

Section 1.

Minnesota Statutes 2010, section 72A.201, subdivision 8, is amended to
read:

Subd. 8.

Standards for claim denial.

The following acts by an insurer, adjuster, or
self-insured, or self-insurance administrator constitute unfair settlement practices:

(1) denying a claim or any element of a claim on the grounds of a specific policy
provision, condition, or exclusion, without informing the insured of the policy provision,
condition, or exclusion on which the denial is based;

(2) denying a claim without having made a reasonable investigation of the claim;

(3) denying a liability claim because the insured has requested that the claim be
denied;

(4) denying a liability claim because the insured has failed or refused to report the
claim, unless an independent evaluation of available information indicates there is no
liability;

(5) denying a claim without including the following information:

(i) the basis for the denial;

(ii) the name, address, and telephone number of the insurer's claim service office
or the claim representative of the insurer to whom the insured or claimant may take any
questions or complaints about the denial;

(iii) the claim number and the policy number of the insured; and

(iv) if the denied claim is a fire claim, the insured's right to file with the Department
of Commerce a complaint regarding the denial, and the address and telephone number
of the Department of Commerce;

(6) denying a claim because the insured or claimant failed to exhibit the damaged
property unless:

(i) the insurer, within a reasonable time period, made a written demand upon the
insured or claimant to exhibit the property; and

(ii) the demand was reasonable under the circumstances in which it was made;

(7) denying a claim by an insured or claimant based on the evaluation of a chemical
dependency claim reviewer selected by the insurer unless the reviewer meets the
qualifications specified under subdivision 8a. An insurer that selects chemical dependency
reviewers to conduct claim evaluations must annually file with the commissioner of
commerce a report containing the specific evaluation standards and criteria used in these
evaluations. The report must be filed at the same time its annual statement is submitted
under section 60A.13. deleted text begin The report must also include the number of evaluations performed
on behalf of the insurer during the reporting period, the types of evaluations performed,
the results, the number of appeals of denials based on these evaluations, the results of
these appeals, and the number of complaints filed in a court of competent jurisdiction.
deleted 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. 2.

Minnesota Statutes 2011 Supplement, 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 and managed care and county-based
purchasing plans that are required to be submitted under this section. 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) Each managed care and county-based purchasing plan must annually 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) administrative expenses by category and subcategory consistent with
administrative expense reporting to other state and federal regulatory agencies, by
program;

(2) revenues by program, including investment income;

(3) 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;

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

(5) 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 30 days prior to the publication or release of the report.
Managed care plans and county-based purchasing plans shall have 30 days to review the
report and provide comment to the commissioner.

new text begin (d) The legislative auditor shall contract for the audit required under this paragraph.
The legislative auditor shall require, in the request for bids and the resulting contracts for
coverage to be provided under this section, that each managed care and county-based
purchasing plan submit to and fully cooperate with an annual independent third-party
financial audit of the information required under paragraph (b). For purposes of
this paragraph, "independent third party" means an audit firm that is independent in
accordance with government auditing standards issued by the United State Government
Accountability Office and licensed in accordance with chapter 326A. In no case shall
the audit firm conducting the audit provide services to a managed care or county-based
purchasing plan at the same time as the audit is being conducted or have provided services
to a managed care or county-based purchasing plan during the prior three years.
new text end

new text begin (e) The audit of the information required under paragraph (b) shall be conducted
by an independent third-party firm in accordance with generally accepted government
auditing standards issued by the United States Government Accountability Office.
new text end

new text begin (f) A managed care or county-based purchasing plan that provides services under
this section shall provide to the commissioner biweekly encounter and claims data at
a detailed level, and shall participate in a quality assurance program that verifies the
timeliness, completeness, accuracy, and consistency of data provided. The commissioner
shall have written protocols for the quality assurance program that are publicly available.
The commissioner shall contract with an independent third-party auditing firm to evaluate
the quality assurance protocols, the capacity of those protocols to assure complete and
accurate data, and the commissioner's implementation of the protocols.
new text end

new text begin (g) Contracts awarded under this section to a managed care or county-based
purchasing plan must provide that the commissioner and the contracted auditor shall have
unlimited access to any and all data required to complete the audit and that this access
shall be enforceable in a court of competent jurisdiction through the process of injunctive
or other appropriate relief.
new text end

new text begin (h) No actuary or actuarial firm providing actuarial services to the commissioner
in connection with this subdivision shall provide services to any managed care or
county-based purchasing plan participating in this subdivision during the term of the
actuary's work for the commissioner under this subdivision.
new text end

new text begin (i) The actuary or actuarial firm referenced in paragraph (h) shall certify and attest
to the rates paid to managed care plans and county-based purchasing plans under this
section, and the certification and attestation must be auditable.
new text end

new text begin (j) The independent third-party audit shall include a determination of compliance
with the federal Medicaid rate certification process.
new text end

new text begin (k) The legislative auditor's contract with the independent third-party auditing firm
shall be designed and administered so as to render the independent third-party audit
eligible for a federal subsidy if available for that purpose.
new text end

new text begin (l) Upon completion of the audit, and its 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
finance committees of the legislature.
new text end

new text begin (m) The commissioner shall annually assess managed care and county-based
purchasing plans for agency costs related to implementing paragraphs (d) to (l), which
have been approved as reasonable by the commissioner of management and budget.
The assessment for each plan shall be in proportion to that plan's share of total medical
assistance and MinnesotaCare enrollment under this section and sections 256B.692 and
256L.12.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to contracts, and the contracting process, for contracts that are effective
January 1, 2013, and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision
to read:

new text begin Subd. 9d. new text end

new text begin Savings from report elimination. new text end

new text begin Managed care and county-based
purchasing plans shall use all savings resulting from the elimination or modification
of reporting requirements under sections 1, 4, and 5 to pay the assessment required by
subdivision 9c, paragraph (m).
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. 4. new text begin REPORTING REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Evidence-based childbirth program. new text end

new text begin The commissioner of human
services may discontinue the evidence-based childbirth program and shall discontinue all
affiliated reporting requirements established under Minnesota Statutes, section 256B.0625,
subdivision 3g, once the commissioner determines that hospitals representing at least 90
percent of births covered by medical assistance or MinnesotaCare have approved policies
and processes in place that prohibit elective inductions prior to 39 weeks' gestation.
new text end

new text begin Subd. 2. new text end

new text begin Provider networks. new text end

new text begin The commissioners of health, commerce, and human
services shall merge reporting requirements for health maintenance organizations and
county-based purchasing plans related to Minnesota Department of Health oversight of
network adequacy under Minnesota Statutes, section 62D.124, and the provider network
list reported to the Department of Human Services under Minnesota Rules, part 4685.2100.
The commissioners shall work with health maintenance organizations and county-based
purchasing plans to ensure that the report merger is done in a manner that simplifies health
maintenance organization and county-based purchasing plan reporting processes.
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. new text begin REPEALER.
new text end

new text begin Subdivision 1. new text end

new text begin Summary of complaints and grievances. new text end

new text begin Minnesota Rules, part
4685.2000, new text end new text begin is repealed effective the day following final enactment.
new text end

new text begin Subd. 2. new text end

new text begin Medical necessity denials and appeals. new text end

new text begin Minnesota Statutes 2010, section
62M.09, subdivision 9, new text end new text begin is repealed effective the day following final enactment.
new text end

new text begin Subd. 3. new text end

new text begin Salary reports. new text end

new text begin Minnesota Statutes 2010, section 62Q.64, new text end new text begin is repealed
effective the day following final enactment.
new text end