1.1 	A bill for an act
1.2 	relating to health; regulating flexible benefits plans; providing for primary 
1.3 	care provider tiering;amending Minnesota Statutes 2008, section 256B.0754, 
1.4 	by adding subdivisions; proposing coding for new law in Minnesota Statutes, 
1.5 	chapter 62L; repealing Minnesota Statutes 2008, section 62L.056.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. [62L.0561] FLEXIBLE BENEFITS PLANS.
1.8 		Subdivision 1.Definitions. For the purposes of this section, the terms used in this 
1.9 	section have the meanings given in section 62Q.01, except that "health plan" includes 
1.10 	individual and group coverage.
1.11 		Subd. 2.Flexible benefits plan. Notwithstanding any provision of this chapter, 
1.12 	chapter 363A, or any other law to the contrary, a health plan company may offer, sell, 
1.13 	issue, and renew a health plan that is a flexible benefits plan under this section if the 
1.14 	following requirements are satisfied:
1.15 	(1) the health plan must be offered in compliance with the laws of this state, except 
1.16 	as otherwise permitted in this section;
1.17 	(2) the health plan must be designed to enable covered persons to better manage 
1.18 	costs and coverage options through the use of co-pays, deductibles, and other cost-sharing 
1.19 	arrangements;
1.20 	(3) the health plan may modify or exclude any or all coverages of benefits that would 
1.21 	otherwise be required by law, except for maternity benefits and other benefits required 
1.22 	under federal law, and except that any type of provider licensed or registered to provide a 
1.23 	covered benefit must be allowed to provide that benefit;
1.24 	(4) each health plan and plan's premiums must be approved by the commissioner 
1.25 	of health or commerce, whichever is appropriate under section 62Q.01, subdivision 2, 
2.1 	but neither commissioner may disapprove a plan on the grounds of a modification or 
2.2 	exclusion permitted under clause (3); and
2.3 	(5) prior to sale of the health plan, the purchaser must be given a written list of the 
2.4 	coverages otherwise required by law that are modified or excluded in the health plan. 
2.5 	The list must include a description of each coverage in the list and indicate whether the 
2.6 	coverage is modified or excluded. If coverage is modified, the list must describe the 
2.7 	modification. The list may, but is not required to, also list any or all coverages otherwise 
2.8 	required by law that are included in the health plan and indicate that they are included. 
2.9 	The health plan company must require that a copy of this written list be provided, prior 
2.10 	to the effective date of the health plan, to each enrollee or employee who is eligible for 
2.11 	health coverage under the plan.
2.12 		Subd. 3.Employer health plan. An employer may provide a health plan permitted 
2.13 	under this section to its employees, the employees' dependents, and other persons eligible 
2.14 	for coverage under the employer's plan, notwithstanding chapter 363A or any other law 
2.15 	to the contrary.

2.16 	EFFECTIVE DATE. This section is effective January 1, 2012.

2.17 	Sec. 2. Minnesota Statutes 2008, section 256B.0754, is amended by adding a 
2.18 	subdivision to read:
2.19 		Subd. 3.Primary care provider tiering. (a) The commissioner shall adjust 
2.20 	the rates paid to providers participating in Minnesota health care programs annually. 
2.21 	Adjustments across provider rates made under this subdivision must be adjusted for the 
2.22 	number of enrollees and compared to peer provider payments made during the previous 
2.23 	year. Adjustments to rates shall not include the rate paid for care coordination services 
2.24 	to certified health care homes under section 256B.0753.
2.25 	(b) Providers who are above one standard deviation above the mean in annual cost 
2.26 	per patient in the previous year will have 30 percent of their payment withheld. An 
2.27 	amount that would raise the total annual payment per patient to the 84th percentile or an 
2.28 	amount that would reduce the total program cost by ten percent, whichever is less, must be 
2.29 	returned to the provider as soon as practical following the contract or calendar year end.
2.30 	(c) Health care homes certified under section 256B.0751, rural health clinics, and 
2.31 	federally qualified health care clinics are not included under this subdivision.
2.32 	(d) Providers reimbursed on a cost basis are not subject to rate adjustments under 
2.33 	this section.
2.34 	(e) The commissioner may phase in the tiering system by service type. The tiering 
2.35 	system must be implemented first with primary care providers.

3.1 	EFFECTIVE DATE. This section is effective for services rendered in calendar 
3.2 	year 2010 and thereafter.

3.3 	Sec. 3. Minnesota Statutes 2008, section 256B.0754, is amended by adding a 
3.4 	subdivision to read:
3.5 		Subd. 4.Provider tiering patient incentives. The commissioner shall seek federal 
3.6 	approval to allow incentives for enrollees to choose high-performing providers established 
3.7 	under section 62U.04. The incentives must be implemented no later than 120 days after 
3.8 	the federal approval is granted. The incentives may include an enrollee credit used to 
3.9 	pay for co-pays on prescription drugs. Enrollees choosing a high-performing provider 
3.10 	as their primary care provider (PCP) shall be eligible for the credit for their enrollment 
3.11 	period. The enrollees are eligible for the same credit in the next enrollment period if they 
3.12 	continue to designate a high-performing PCP.

3.13 	Sec. 4.  REPEALER.
 3.14 	Minnesota Statutes 2008, section 62L.056, is repealed.

3.15 	EFFECTIVE DATE. This section is effective January 1, 2012.