1.1                          A bill for an act 
  1.2             relating to health; MinnesotaCare; establishing 
  1.3             requirements for integrated service networks; 
  1.4             modifying requirements for health plan companies; 
  1.5             establishing the standard health coverage; repealing 
  1.6             the regulated all-payer option; modifying universal 
  1.7             coverage and insurance reform provisions; expanding 
  1.8             eligibility for the MinnesotaCare program; 
  1.9             establishing a senior prescription drug discount 
  1.10            program; extending the health care commission and 
  1.11            regional coordinating boards; making technical 
  1.12            changes; modifying data collection provisions; 
  1.13            providing for participation in a federal waiver 
  1.14            related to MinnesotaCare and medical assistance; 
  1.15            regulating health provider cooperatives; modifying the 
  1.16            health provider tax; appropriating money; amending 
  1.17            Minnesota Statutes 1994, sections 13.99, by adding a 
  1.18            subdivision; 60A.02, by adding a subdivision; 60B.02; 
  1.19            60B.03, subdivision 2; 60G.01, subdivisions 2, 4, and 
  1.20            5; 62A.10, subdivisions 1 and 2; 62A.65, subdivisions 
  1.21            5 and 8; 62D.02, subdivisions 4 and 8; 62D.03, 
  1.22            subdivision 1; 62D.04, subdivision 1; 62D.042, 
  1.23            subdivision 2; 62D.11, subdivision 1; 62D.181, 
  1.24            subdivisions 2, 3, 6, and 9; 62D.19; 62E.141; 62H.04; 
  1.25            62H.08; 62J.017; 62J.03, subdivision 7; 62J.04, 
  1.26            subdivisions 1a and 3; 62J.05, subdivisions 2 and 9; 
  1.27            62J.06; 62J.09, subdivisions 1, 1a, 6, and 8; 62J.152, 
  1.28            subdivision 5; 62J.17, subdivisions 2, 4a, 6a, and by 
  1.29            adding a subdivision; 62J.212; 62J.37; 62J.38; 62J.40; 
  1.30            62J.41, subdivisions 1 and 2; 62J.48; 62J.54; 62J.55; 
  1.31            62J.58; 62L.02, subdivisions 11, 16, 24, and 26; 
  1.32            62L.03, subdivisions 3, 4, and 5; 62L.09, subdivision 
  1.33            1; 62L.12, subdivision 2; 62L.17, by adding a 
  1.34            subdivision; 62L.18, subdivision 2; 62M.07; 62M.09, 
  1.35            subdivision 5; 62M.10, by adding a subdivision; 
  1.36            62N.02, by adding subdivisions; 62N.04; 62N.06, 
  1.37            subdivision 1; 62N.10, by adding a subdivision; 
  1.38            62N.11, subdivision 1; 62N.13; 62N.14, subdivision 3; 
  1.39            62N.25, subdivision 2; 62P.04, subdivisions 1 and 3; 
  1.40            62P.05, by adding a subdivision; 62Q.01, subdivisions 
  1.41            2, 3, 4, and by adding subdivisions; 62Q.03, 
  1.42            subdivisions 1, 6, 7, 8, 9, 10, and by adding 
  1.43            subdivisions; 62Q.07, subdivisions 1 and 2; 62Q.075, 
  1.44            subdivision 4; 62Q.09, subdivision 3; 62Q.11; 62Q.165; 
  1.45            62Q.17, subdivisions 2, 8, and by adding a 
  1.46            subdivision; 62Q.18; 62Q.19; 62Q.25; 62Q.30; 62Q.32; 
  2.1             62Q.33, subdivisions 4 and 5; 62Q.41; 62R.03, 
  2.2             subdivision 3; 72A.20, by adding subdivisions; 
  2.3             72A.201, by adding a subdivision; 136A.1355, 
  2.4             subdivisions 3 and 5; 136A.1356, subdivisions 3 and 4; 
  2.5             144.1464, subdivisions 2, 3, and 4; 144.147, 
  2.6             subdivision 1; 144.1484, subdivision 1; 144.1486, 
  2.7             subdivision 4; 144.1487, subdivision 1; 144.1488, 
  2.8             subdivisions 1 and 4; 144.1489, subdivisions 1, 3, and 
  2.9             4; 144.1490; 144.1491, subdivision 2; 144.801, by 
  2.10            adding a subdivision; 144.804, subdivision 1; 148B.32, 
  2.11            subdivision 1; 151.48; 214.16, subdivisions 2 and 3; 
  2.12            256.9352, subdivision 3; 256.9353, subdivisions 1 and 
  2.13            3; 256.9354, subdivisions 1, 4, 5, and by adding a 
  2.14            subdivision; 256.9355, subdivision 2; 256.9357, 
  2.15            subdivisions 1, 2, and 3; 256.9358, by adding a 
  2.16            subdivision; 256.9363, subdivision 5; 256B.037, 
  2.17            subdivisions 1, 3, 4, and by adding subdivisions; 
  2.18            256B.04, by adding a subdivision; 256B.055, by adding 
  2.19            a subdivision; 256B.057, by adding subdivisions; 
  2.20            256B.0625, subdivisions 13 and 30; 256B.69, 
  2.21            subdivisions 2 and 4; 270.101, subdivision 1; 295.50, 
  2.22            subdivisions 3, 4, and 10a; 295.52, by adding a 
  2.23            subdivision; 295.53, subdivisions 1, 3, and 4; 295.55, 
  2.24            subdivision 4; 295.57; and 295.582; Laws 1990, chapter 
  2.25            591, article 4, section 9; Laws 1993, chapter 224, 
  2.26            article 4, section 40; Laws 1993, First Special 
  2.27            Session chapter 1, article 8, section 30, subdivision 
  2.28            2; Laws 1994, chapter 624, article 5, section 7; 
  2.29            chapter 625, article 5, sections 5, subdivision 1; and 
  2.30            10, subdivision 2; proposing coding for new law in 
  2.31            Minnesota Statutes, chapters 60A; 62J; 62L; 62N; 62Q; 
  2.32            62R; 137; 144; 256; 256B; and 295; repealing Minnesota 
  2.33            Statutes 1994, sections 62J.045; 62J.07, subdivision 
  2.34            4; 62J.09, subdivision 1a; 62J.152, subdivision 6; 
  2.35            62J.19; 62J.30; 62J.31; 62J.32; 62J.33; 62J.34; 
  2.36            62J.35; 62J.41, subdivisions 3 and 4; 62J.44; 62J.45; 
  2.37            62J.65; 62L.08, subdivision 7a; 62N.34; 62P.01; 
  2.38            62P.02; 62P.03; 62P.07; 62P.09; 62P.11; 62P.13; 
  2.39            62P.15; 62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 
  2.40            62P.27; 62P.29; 62P.31; 62P.33; 62Q.03, subdivisions 
  2.41            2, 3, 4, 5, and 11; 62Q.18, subdivisions 2, 3, 4, 5, 
  2.42            6, 8, and 9; 62Q.21; 62Q.27; 144.1488, subdivision 2; 
  2.43            148.236; and 256.9353, subdivisions 4 and 5; Laws 
  2.44            1993, chapter 247, article 1, sections 12, 13, 14, 15, 
  2.45            18, and 19; and Minnesota Rules, part 4685.1700, 
  2.46            subpart 1, item D. 
  2.47  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.48                             ARTICLE 1
  2.49                    INTEGRATED SERVICE NETWORKS 
  2.50     Section 1.  Minnesota Statutes 1994, section 60B.02, is 
  2.51  amended to read: 
  2.52     60B.02 [PERSONS COVERED.] 
  2.53     The proceedings authorized by sections 60B.01 to 60B.61 may 
  2.54  be applied to: 
  2.55     (1) All insurers who are doing, or have done, an insurance 
  2.56  business in this state, and against whom claims arising from 
  2.57  that business may exist now or in the future; 
  2.58     (2) All insurers who purport to do an insurance business in 
  3.1   this state; 
  3.2      (3) All insurers who have insureds resident in this state; 
  3.3      (4) All other persons organized or in the process of 
  3.4   organizing with the intent to do an insurance business in this 
  3.5   state; and 
  3.6      (5) All nonprofit service plan corporations incorporated or 
  3.7   operating under the nonprofit health service plan corporation 
  3.8   act, any health plan incorporated under chapter 317A, all 
  3.9   fraternal benefit societies operating under chapter 64B, except 
  3.10  those associations enumerated in section 64B.38, all assessment 
  3.11  benefit associations operating under chapter 63, all township 
  3.12  mutual or other companies operating under chapter 67A, and all 
  3.13  reciprocals or interinsurance exchanges operating under chapter 
  3.14  71A, and all integrated service networks operating under chapter 
  3.15  62N.  
  3.16     Sec. 2.  Minnesota Statutes 1994, section 60B.03, 
  3.17  subdivision 2, is amended to read: 
  3.18     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
  3.19  commissioner of commerce of the state of Minnesota and, in that 
  3.20  commissioner's absence or disability, a deputy or other person 
  3.21  duly designated to act in that commissioner's place.  In the 
  3.22  context of rehabilitation or liquidation of a health maintenance 
  3.23  organization or integrated service network, "commissioner" means 
  3.24  the commissioner of health of the state of Minnesota and, in 
  3.25  that commissioner's absence or disability, a deputy or other 
  3.26  person duly designated to act in that commissioner's place. 
  3.27     Sec. 3.  Minnesota Statutes 1994, section 60G.01, 
  3.28  subdivision 2, is amended to read: 
  3.29     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
  3.30  commissioner of commerce, except that "commissioner" means the 
  3.31  commissioner of health for administrative supervision of health 
  3.32  maintenance organizations and integrated service networks. 
  3.33     Sec. 4.  Minnesota Statutes 1994, section 60G.01, 
  3.34  subdivision 4, is amended to read: 
  3.35     Subd. 4.  [DEPARTMENT.] "Department" means the department 
  3.36  of commerce, except that "department" means the department of 
  4.1   health for administrative supervision of health maintenance 
  4.2   organizations and integrated service networks. 
  4.3      Sec. 5.  Minnesota Statutes 1994, section 60G.01, 
  4.4   subdivision 5, is amended to read: 
  4.5      Subd. 5.  [INSURER.] "Insurer" means and includes every 
  4.6   person engaged as indemnitor, surety, or contractor in the 
  4.7   business of entering into contracts of insurance or of annuities 
  4.8   as limited to: 
  4.9      (1) any insurer who is doing an insurer business, or has 
  4.10  transacted insurance in this state, and against whom claims 
  4.11  arising from that transaction may exist now or in the future; 
  4.12     (2) any fraternal benefit society which is subject to 
  4.13  chapter 64B; 
  4.14     (3) nonprofit health service plan corporations subject to 
  4.15  chapter 62C; 
  4.16     (4) cooperative life and casualty companies subject to 
  4.17  sections 61A.39 to 61A.52; and 
  4.18     (5) health maintenance organizations regulated under 
  4.19  chapter 62D; and 
  4.20     (6) integrated service networks regulated under chapter 62N.
  4.21     Sec. 6.  Minnesota Statutes 1994, section 62D.181, 
  4.22  subdivision 2, is amended to read: 
  4.23     Subd. 2.  [ELIGIBLE INDIVIDUALS.] An individual is eligible 
  4.24  for alternative coverage under this section if: 
  4.25     (1) the individual had individual health coverage through a 
  4.26  health maintenance organization, integrated service network, or 
  4.27  community integrated service network, the coverage is no longer 
  4.28  available due to the insolvency of the health maintenance 
  4.29  organization, integrated service network, or community 
  4.30  integrated service network, and the individual has not obtained 
  4.31  alternative coverage; or 
  4.32     (2) the individual had group health coverage through a 
  4.33  health maintenance organization, integrated service network, or 
  4.34  community integrated service network, the coverage is no longer 
  4.35  available due to the insolvency of the health maintenance 
  4.36  organization, integrated service network, or community 
  5.1   integrated service network, and the individual has not obtained 
  5.2   alternative coverage. 
  5.3      Sec. 7.  Minnesota Statutes 1994, section 62D.181, 
  5.4   subdivision 3, is amended to read: 
  5.5      Subd. 3.  [APPLICATION AND ISSUANCE.] If a health 
  5.6   maintenance organization, integrated service network, or 
  5.7   community integrated service network will be liquidated, 
  5.8   individuals eligible for alternative coverage under subdivision 
  5.9   2 may apply to the association to obtain alternative coverage.  
  5.10  Upon receiving an application and evidence that the applicant 
  5.11  was enrolled in the health maintenance organization, integrated 
  5.12  service network, or community integrated service network at the 
  5.13  time of an order for liquidation, the association shall issue 
  5.14  policies to eligible individuals, without the limitation on 
  5.15  preexisting conditions described in section 62E.14, subdivision 
  5.16  3. 
  5.17     Sec. 8.  Minnesota Statutes 1994, section 62D.181, 
  5.18  subdivision 6, is amended to read: 
  5.19     Subd. 6.  [DURATION.] The duration of alternative coverage 
  5.20  issued under this section is: 
  5.21     (1) for individuals eligible under subdivision 2, clause 
  5.22  (1), 90 days; and 
  5.23     (2) for individuals eligible under subdivision 2, clause 
  5.24  (2), 90 days or the length of time remaining in the group 
  5.25  contract with the insolvent health maintenance organization, 
  5.26  integrated service network, or community integrated service 
  5.27  network, whichever is greater. 
  5.28     Sec. 9.  Minnesota Statutes 1994, section 62D.181, 
  5.29  subdivision 9, is amended to read: 
  5.30     Subd. 9.  [COORDINATION OF POLICIES.] If an insolvent 
  5.31  health maintenance organization, integrated service network, or 
  5.32  community integrated service network has insolvency insurance 
  5.33  coverage at the time of an order for liquidation, the 
  5.34  association may coordinate the benefits of the policy issued 
  5.35  under this section with those of the insolvency insurance policy 
  5.36  available to the enrollees.  The premium level for the combined 
  6.1   association policy and the insolvency insurance policy may not 
  6.2   exceed those described in subdivision 5. 
  6.3      Sec. 10.  Minnesota Statutes 1994, section 62D.19, is 
  6.4   amended to read: 
  6.5      62D.19 [UNREASONABLE EXPENSES.] 
  6.6      No health maintenance organization shall incur or pay for 
  6.7   any expense of any nature which is unreasonably high in relation 
  6.8   to the value of the service or goods provided.  The commissioner 
  6.9   of health shall implement and enforce this section by rules 
  6.10  adopted under this section. 
  6.11     In an effort to achieve the stated purposes of sections 
  6.12  62D.01 to 62D.30; in order to safeguard the underlying nonprofit 
  6.13  status of health maintenance organizations; and to ensure that 
  6.14  the payment of health maintenance organization money to major 
  6.15  participating entities results in a corresponding benefit to the 
  6.16  health maintenance organization and its enrollees, when 
  6.17  determining whether an organization has incurred an unreasonable 
  6.18  expense in relation to a major participating entity, due 
  6.19  consideration shall be given to, in addition to any other 
  6.20  appropriate factors, whether the officers and trustees of the 
  6.21  health maintenance organization have acted with good faith and 
  6.22  in the best interests of the health maintenance organization in 
  6.23  entering into, and performing under, a contract under which the 
  6.24  health maintenance organization has incurred an expense.  The 
  6.25  commissioner has standing to sue, on behalf of a health 
  6.26  maintenance organization, officers or trustees of the health 
  6.27  maintenance organization who have breached their fiduciary duty 
  6.28  in entering into and performing such contracts. 
  6.29     Expenses incurred by a health maintenance organization 
  6.30  relating to developing and forming community integrated service 
  6.31  networks as defined under chapter 62N shall be presumed to be a 
  6.32  reasonable expense. 
  6.33     Sec. 11.  Minnesota Statutes 1994, section 62N.02, is 
  6.34  amended by adding a subdivision to read: 
  6.35     Subd. 4b.  [CREDENTIALING.] "Credentialing" means the 
  6.36  process of collecting, verifying, and reviewing evidence that 
  7.1   relates to a health care professional's qualifications to 
  7.2   practice the health care profession as a provider within a 
  7.3   specific integrated service network. 
  7.4      Sec. 12.  Minnesota Statutes 1994, section 62N.02, is 
  7.5   amended by adding a subdivision to read: 
  7.6      Subd. 4c.  [CREDENTIALING STANDARDS.] An integrated service 
  7.7   network may set credentialing standards for providers.  A 
  7.8   network may recredential providers on a recurring basis.  If a 
  7.9   network sets credentialing standards, the network must provide a 
  7.10  written description of those standards upon request.  An 
  7.11  integrated service network may participate in a centralized 
  7.12  credentialing program and must provide a written description of 
  7.13  that program upon request. 
  7.14     Sec. 13.  Minnesota Statutes 1994, section 62N.04, is 
  7.15  amended to read: 
  7.16     62N.04 [REGULATION.] 
  7.17     Integrated service networks are under the supervision of 
  7.18  the commissioner, who shall enforce this chapter, and the 
  7.19  requirements of chapter 62Q as they apply to these networks.  
  7.20  The commissioner has, with respect to this chapter and chapter 
  7.21  62Q, all enforcement and rulemaking powers available to the 
  7.22  commissioner under section 62D.17. 
  7.23     Sec. 14.  [62N.071] [DEFINITIONS.] 
  7.24     Subdivision 1.  [APPLICABILITY.] The definitions in this 
  7.25  section apply to sections 62N.071 to 62N.078.  Unless otherwise 
  7.26  specified, terms used in those sections have the meanings 
  7.27  required to be used in preparation of the National Association 
  7.28  of Insurance Commissioners (NAIC) annual statement blanks for 
  7.29  health maintenance organizations. 
  7.30     Subd. 2.  [ADMITTED ASSETS.] "Admitted assets" means 
  7.31  admitted assets as defined under section 62D.044, including the 
  7.32  deposit required under section 62N.074. 
  7.33     Subd. 3.  [NET WORTH.] "Net worth" means admitted assets 
  7.34  minus liabilities. 
  7.35     Subd. 4.  [LIABILITIES.] "Liabilities" means a network's 
  7.36  debts and other obligations, including estimates of the 
  8.1   network's reported and unreported claims incurred for covered 
  8.2   services and supplies provided to enrollees by outside providers.
  8.3   Liabilities do not include those obligations that are 
  8.4   subordinated in the same manner as preferred ownership claims 
  8.5   under section 60B.44, subdivision 10, including promissory notes 
  8.6   subordinated to all other liabilities of the integrated service 
  8.7   network. 
  8.8      Subd. 5.  [UNCOVERED EXPENDITURES.] "Uncovered expenditures"
  8.9   means the charges for health care services and supplies that are 
  8.10  covered by an integrated service network for which an enrollee 
  8.11  would also be liable if the network becomes insolvent.  
  8.12  Uncovered expenditures includes charges for covered health care 
  8.13  services and supplies received by enrollees from providers that 
  8.14  are not employed by, under contract with, or otherwise 
  8.15  affiliated with the network.  Uncovered expenditures does not 
  8.16  include amounts that enrollees do not have to pay due to the 
  8.17  obligations being guaranteed, insured, or assumed by a person 
  8.18  other than the network. 
  8.19     Subd. 6.  [WORKING CAPITAL.] "Working capital" means 
  8.20  current assets minus current liabilities. 
  8.21     Sec. 15.  [62N.072] [NET WORTH REQUIREMENT.] 
  8.22     Subdivision 1.  [INITIAL REQUIREMENT.] An integrated 
  8.23  service network must, at time of licensure, have a minimum net 
  8.24  worth of the greater of: 
  8.25     (1) $1,500,000; or 
  8.26     (2) 8-1/3 percent of the sum of all expenses expected to be 
  8.27  incurred in the first full year of operation, less 90 percent of 
  8.28  the expected reinsurance premiums for that period. 
  8.29     Subd. 2.  [ONGOING REQUIREMENT.] After a network's initial 
  8.30  year of operation, the network must maintain net worth of no 
  8.31  less than $1,000,000. 
  8.32     Sec. 16.  [62N.074] [DEPOSIT REQUIREMENT.] 
  8.33     Subdivision 1.  [INITIAL DEPOSIT.] An integrated service 
  8.34  network shall deposit with the commissioner, at time of 
  8.35  licensure, a deposit consisting of cash and direct U.S. Treasury 
  8.36  obligations in the total amount of not less than $300,000. 
  9.1      Subd. 2.  [CUSTODIAL ACCOUNT.] The deposit must be held in 
  9.2   a custodial or other controlled account under a written account 
  9.3   agreement acceptable to the commissioner. 
  9.4      Subd. 3.  [ONGOING DEPOSIT.] After the initial year of 
  9.5   operation, the required amount of the deposit is the greater of 
  9.6      (1) $300,000; or 
  9.7      (2) 33-1/3 percent of the network's uncovered expenditures 
  9.8   incurred in the previous calendar year. 
  9.9      Subd. 4.  [USE OF DEPOSIT.] (a) In the event of any 
  9.10  delinquency proceeding as defined in section 60B.03, the 
  9.11  required minimum deposit shall be applied first to pay for or 
  9.12  reimburse the commissioner for expenses incurred by the 
  9.13  commissioner in performing the commissioner's duties in 
  9.14  connection with the insolvency, including any legal, actuarial 
  9.15  or accounting fees.  The balance of the required minimum 
  9.16  deposit, if any, shall be used to reimburse enrollees for 
  9.17  uncovered expenditures, on a pro rata basis. 
  9.18     (b) If a deposit exceeds the required minimum deposit, the 
  9.19  excess shall be applied first to uncovered expenditures and the 
  9.20  balance, if any, to the commissioner's expenses. 
  9.21     (c) The deposit is not subject to garnishment or levy under 
  9.22  any circumstances. 
  9.23     Subd. 5.  [ACTUAL DEPOSIT REQUIRED.] The deposit must be in 
  9.24  the form specified in subdivision 1; a guarantee or letter of 
  9.25  credit are not acceptable, in whole or in part, as substitutes. 
  9.26     Sec. 17.  [62N.075] [WORKING CAPITAL.] 
  9.27     Subdivision 1.  [REQUIREMENT.] An integrated service 
  9.28  network must maintain a positive working capital at all times. 
  9.29     Subd. 2.  [NOTICE REQUIRED.] If an integrated service 
  9.30  network's working capital is no longer positive, or is likely to 
  9.31  soon become no longer positive, the network shall immediately 
  9.32  notify the commissioner. 
  9.33     Subd. 3.  [PLAN OF CORRECTION.] If an integrated service 
  9.34  network's working capital is no longer positive, the network 
  9.35  shall promptly submit to the commissioner a written proposed 
  9.36  plan of correction.  The commissioner shall promptly approve, 
 10.1   approve as modified, or reject the proposed plan.  If a plan of 
 10.2   correction has been approved by the commissioner, the network 
 10.3   shall comply with it and shall cooperate fully with any 
 10.4   activities the commissioner undertakes to monitor the network's 
 10.5   compliance. 
 10.6      Subd. 4.  [ACTION BY COMMISSIONER.] The commissioner may 
 10.7   take any action permitted to the commissioner that the 
 10.8   commissioner deems necessary or appropriate to protect the 
 10.9   network or its enrollees if: 
 10.10     (1) the network fails to propose an approved plan of 
 10.11  correction promptly; 
 10.12     (2) the network fails to comply with an approved plan of 
 10.13  correction; or 
 10.14     (3) the commissioner determines that a deficiency in 
 10.15  working capital cannot be corrected within a reasonable time. 
 10.16     Subd. 5.  [OTHER REMEDIES.] This section does not limit the 
 10.17  commissioner's power to use at any time other remedies available 
 10.18  to the commissioner. 
 10.19     Sec. 18.  [62N.076] [INVESTMENT RESTRICTIONS.] 
 10.20     Subdivision 1.  [INVESTMENT POLICY.] An integrated service 
 10.21  network shall have a written investment policy to govern 
 10.22  investment of the network's assets.  The written policy must be 
 10.23  reviewed and approved annually by the network's board of 
 10.24  directors. 
 10.25     Subd. 2.  [APPROVAL; INVESTMENTS.] A network shall not make 
 10.26  loans or investments, unless authorized by its board of 
 10.27  directors, or ratified by the board no later than the next 
 10.28  regular board meeting. 
 10.29     Subd. 3.  [PERMITTED INVESTMENT.] An integrated service 
 10.30  network shall make investments only in securities or property 
 10.31  designated by law as permitted for domestic life insurance 
 10.32  companies; this restriction includes compliance with percentage 
 10.33  limitations that apply to domestic life insurance companies.  A 
 10.34  network may, however, invest in real estate, including leasehold 
 10.35  improvements, for the convenience and accommodation of its 
 10.36  operations, including the home office, branch offices, medical 
 11.1   facilities, and field office operations, in excess of the 
 11.2   percentage permitted for a domestic life insurance company, but 
 11.3   not to exceed 25 percent of its admitted assets, except if, when 
 11.4   calculated in combination with the assets described in section 
 11.5   62D.044, clause (17), the total of those assets and the real 
 11.6   estate assets described in this subdivision do not exceed the 
 11.7   total combined percent limitations allowable under this section 
 11.8   and section 62D.044, clause (17), or except if permitted by the 
 11.9   commissioner upon a finding that the percentage of the 
 11.10  integrated service network's admitted assets is insufficient to 
 11.11  provide convenient accommodation of the network's business. 
 11.12     Subd. 4.  [CONFLICTS OF INTEREST.] An integrated service 
 11.13  network shall not make loans to any of its directors or 
 11.14  principal officers or make loans to or investments in any 
 11.15  organization in which a director or principal officer has an 
 11.16  interest. 
 11.17     Subd. 5.  [PROOF OF COMPLIANCE.] An integrated service 
 11.18  network shall annually file with the commissioner proof of 
 11.19  compliance with this section in a form and on a date prescribed 
 11.20  by the commissioner. 
 11.21     Sec. 19.  [62N.077] [USE OF GUARANTEES.] 
 11.22     Subdivision 1.  [GUARANTEE PERMITTED.] An integrated 
 11.23  service network may, with the consent of the commissioner, 
 11.24  satisfy up to 50 percent of its minimum net worth requirement by 
 11.25  means of a guarantee provided by another organization. 
 11.26     Subd. 2.  [SECURITY FOR GUARANTEE.] (a) If the guaranteeing 
 11.27  organization is regulated for solvency by the commissioner of 
 11.28  commerce or health, the guarantee must be treated as a liability 
 11.29  for purposes of solvency regulation of the guaranteeing 
 11.30  organization.  If the guaranteeing organization becomes 
 11.31  insolvent, a claim by the network on the guarantee must be at 
 11.32  least of equal priority with claims of enrollees or other policy 
 11.33  holders of the insolvent guaranteeing organization. 
 11.34     (b) If the guaranteeing organization is not regulated for 
 11.35  solvency by the commissioner of commerce or health, the 
 11.36  organization must maintain assets acceptable to the 
 12.1   commissioner, with a market value at least equal to the amount 
 12.2   of the guarantee, in a custodial or other controlled account on 
 12.3   terms acceptable to the commissioner of health.  
 12.4      Subd. 3.  [GOVERNMENTAL ENTITIES.] When a guaranteeing 
 12.5   organization is a governmental entity, sections 62N.074 and 
 12.6   62N.076 do not apply.  The commissioner may consider factors 
 12.7   which provide evidence that the governmental entity is a 
 12.8   financially reliable guaranteeing organization. 
 12.9      Sec. 20.  [62N.078] [FINANCIAL REPORTING AND EXAMINATION.] 
 12.10     Subdivision 1.  [FINANCIAL STATEMENTS.] An integrated 
 12.11  service network shall file with the commissioner, annually on 
 12.12  April 1, an audited financial statement.  The financial 
 12.13  statement must include the National Association of Insurance 
 12.14  Commissioners (NAIC) annual statement blanks for health 
 12.15  maintenance organizations, prepared in accordance with the NAIC 
 12.16  annual statement instructions, and using the methods prescribed 
 12.17  in the NAIC's accounting practices and procedures manual for 
 12.18  health maintenance organizations.  The financial statement must 
 12.19  also include any other form or information prescribed by the 
 12.20  commissioner. 
 12.21     Subd. 2.  [QUARTERLY STATEMENTS.] An integrated service 
 12.22  network shall file with the commissioner quarterly financial 
 12.23  statements for the first three quarters of each year, on a date 
 12.24  and form and in a manner prescribed by the commissioner. 
 12.25     Subd. 3.  [OTHER INFORMATION.] An integrated service 
 12.26  network shall comply promptly and fully with requests by the 
 12.27  commissioner for other information that the commissioner deems 
 12.28  necessary to monitor or assess the network's financial solvency. 
 12.29     Subd. 4.  [FINANCIAL EXAMINATION.] The commissioner shall 
 12.30  conduct a complete financial examination of each integrated 
 12.31  service network at least once every three years, and more 
 12.32  frequently if the commissioner deems it necessary.  The 
 12.33  examinations must be conducted according to the standards 
 12.34  provided in the NAIC examiners handbook. 
 12.35     Sec. 21.  Minnesota Statutes 1994, section 62N.10, is 
 12.36  amended by adding a subdivision to read: 
 13.1      Subd. 7.  [DATA SUBMISSION.] As a condition of licensure, 
 13.2   an integrated service network shall comply fully with section 
 13.3   62J.38. 
 13.4      Sec. 22.  Minnesota Statutes 1994, section 62N.11, 
 13.5   subdivision 1, is amended to read: 
 13.6      Subdivision 1.  [APPLICABILITY.] Every integrated service 
 13.7   network enrollee residing in this state is entitled to evidence 
 13.8   of coverage or contract.  The integrated service network or its 
 13.9   designated representative shall issue the evidence of coverage 
 13.10  or contract.  The commissioner shall adopt rules specifying the 
 13.11  requirements for contracts and evidence of coverage.  "Evidence 
 13.12  of coverage" means evidence that an enrollee is covered by a 
 13.13  group contract issued to the group.  The evidence of coverage 
 13.14  must contain a description of provider locations, a list of the 
 13.15  types of providers available, and information about the types of 
 13.16  allied and midlevel practitioners and pharmacists that are 
 13.17  available. 
 13.18     Sec. 23.  Minnesota Statutes 1994, section 62N.13, is 
 13.19  amended to read: 
 13.20     62N.13 [ENROLLEE COMPLAINT SYSTEM.] 
 13.21     Every integrated service network must establish and 
 13.22  maintain an enrollee complaint system, including an impartial 
 13.23  arbitration provision as required under section 62Q.105, to 
 13.24  provide reasonable procedures for the resolution of written 
 13.25  complaints initiated by enrollees concerning the provision of 
 13.26  health care services.  The integrated service network must 
 13.27  inform enrollees that they may choose to use an alternative 
 13.28  dispute resolution process.  If an enrollee chooses to use an 
 13.29  alternative dispute resolution process, the network must 
 13.30  participate.  The commissioner shall adopt rules specifying 
 13.31  requirements relating to enrollee complaints. 
 13.32     Sec. 24.  Minnesota Statutes 1994, section 62N.14, 
 13.33  subdivision 3, is amended to read: 
 13.34     Subd. 3.  [ENROLLEE MEMBERSHIP CARDS.] Integrated service 
 13.35  networks shall issue enrollee membership cards to each enrollee 
 13.36  of the integrated service network.  The enrollee card shall 
 14.1   contain, at minimum, the following information: 
 14.2      (1) the telephone number of the integrated service 
 14.3   network's office of consumer services; 
 14.4      (2) the address, telephone number, and a brief description 
 14.5   of the state's office of consumer information clearinghouse; and 
 14.6      (3) the telephone number of the department of health or 
 14.7   local ombudsperson. 
 14.8      The membership cards shall also conform to the requirements 
 14.9   set forth in section 62J.60. 
 14.10     Sec. 25.  [62N.15] [PROVIDER REQUIREMENTS.] 
 14.11     Subdivision 1.  [SERVICES.] An integrated service network 
 14.12  may operate as a staff model as defined in section 295.50, 
 14.13  subdivision 12b, or may contract with providers or provider 
 14.14  organizations for the provision of services. 
 14.15     Subd. 2.  [LOCATION.] (a) An integrated service network 
 14.16  must ensure that primary care providers, including allied 
 14.17  independent health providers as defined in section 62Q.095, 
 14.18  subdivision 5, midlevel practitioners as defined in section 
 14.19  136A.1356, subdivision 1, are located at adequate locations 
 14.20  within the service area of the network.  In determining whether 
 14.21  locations are adequate, the integrated service network may 
 14.22  consider the practice and referral patterns in each community 
 14.23  served throughout the service area.  
 14.24     (b) Urgent and emergency care providers must be located 
 14.25  within a distance of 30 miles or a travel time of 30 minutes 
 14.26  from every enrollee. 
 14.27     Subd. 3.  [NUMBERS.] An integrated service network must 
 14.28  provide a sufficient number of providers to meet the projected 
 14.29  needs of its enrollees, including special needs and high-risk 
 14.30  enrollees, for all covered health care services. 
 14.31     Subd. 4.  [TYPES.] An integrated service network must 
 14.32  determine what types of providers are needed to deliver all 
 14.33  appropriate and necessary health services to its enrollees.  In 
 14.34  determining which types of providers are necessary, networks 
 14.35  shall use allied and midlevel practitioners and pharmacists 
 14.36  within their respective scopes of practice.  
 15.1      Subd. 5.  [CAPACITY.] An integrated service network shall 
 15.2   monitor the capacity of the network to provide services to 
 15.3   enrollees and take steps to increase capacity when parts of the 
 15.4   network are not able to meet enrollee needs. 
 15.5      Subd. 6.  [ACCESS.] (a) An integrated service network shall 
 15.6   make available and accessible all covered health care services 
 15.7   on a 24-hour per day, seven days per week basis.  This 
 15.8   requirement may be fulfilled through the use of: 
 15.9      (1) regularly scheduled appointments; 
 15.10     (2) after-hour clinics; 
 15.11     (3) use of a 24-hour answering service; 
 15.12     (4) backup coverage by another participating physician; or 
 15.13     (5) referrals to urgent care centers and to hospital 
 15.14  emergency care. 
 15.15     (b) An integrated service network shall arrange for covered 
 15.16  health care services, including referrals to specialty 
 15.17  physicians, to be accessible to enrollees on a timely basis in 
 15.18  accordance with medically appropriate guidelines.  An integrated 
 15.19  service network shall have appointment scheduling guidelines 
 15.20  based on the type of health care service. 
 15.21     (c) Medically appropriate guidelines and practice 
 15.22  parameters must conform with section 62M.07, paragraph (c).  No 
 15.23  treatment or procedure which is effective in preserving or 
 15.24  extending life may be deemed medically inappropriate or 
 15.25  clinically ineffective on the basis of the patient's present or 
 15.26  predicted age, disability, degree of need for future treatment, 
 15.27  or quality of life, unless in comparison with another treatment 
 15.28  or procedure which is equally or more effective in preserving or 
 15.29  extending life. 
 15.30     (d) Nothing in this act shall be construed to require the 
 15.31  creation or maintenance of abortion clinics or other abortion 
 15.32  providers within any integrated service network; nor shall 
 15.33  anything in this act be construed to authorize any agency to 
 15.34  require the creation or maintenance of abortion clinics or 
 15.35  abortion providers or to deny certification or any other benefit 
 15.36  granted by this act to a health plan company based on the number 
 16.1   of or the presence or absence of abortion clinics or other 
 16.2   abortion providers in or affiliated with the health plan company.
 16.3      Subd. 7.  [CONTINUITY.] (a) An integrated service network 
 16.4   shall provide continuing care for enrollees in the event of 
 16.5   contract termination between the integrated service network and 
 16.6   any of its contracted providers or in the event of site closings 
 16.7   involving a provider with more than one location of service.  
 16.8      (b) An integrated service network shall provide to its 
 16.9   enrollees a written disclosure of the process by which 
 16.10  continuity of care will be provided to all enrollees. 
 16.11     Subd. 8.  [REVIEW.] The commissioner shall review each 
 16.12  network's compliance with subdivisions 1 to 7.  If the 
 16.13  commissioner determines that a network is not meeting the 
 16.14  requirements of this section, the commissioner may order the 
 16.15  network to submit a plan of corrective action, and may order the 
 16.16  network to comply with the provisions of that plan, as amended 
 16.17  by the commissioner. 
 16.18     Sec. 26.  [62N.17] [OUT-OF-NETWORK SERVICES.] 
 16.19     (a) An integrated service network shall provide coverage 
 16.20  for all emergency services provided outside the network, when 
 16.21  the care is immediately necessary or believed to be necessary to 
 16.22  preserve life, prevent impairment of bodily functions, or to 
 16.23  prevent placing the physical or mental health of the enrollee in 
 16.24  jeopardy.  
 16.25     (b) An integrated service network shall include in its 
 16.26  marketing materials a description of all limitations of coverage 
 16.27  for out-of-network services, including when enrollees reside or 
 16.28  travel outside the network's service area. 
 16.29     Sec. 27.  [62N.18] [INTERNAL IMPROVEMENT.] 
 16.30     Subdivision 1.  [INTERNAL QUALITY IMPROVEMENT WORKPLAN.] In 
 16.31  order to increase public accountability, and to improve the 
 16.32  overall quality of care provided to the public, all integrated 
 16.33  service networks shall annually file with the commissioner a 
 16.34  quality improvement workplan as a condition of licensure and 
 16.35  relicensure.  Every integrated service network shall establish 
 16.36  and maintain an internal quality improvement workplan based upon 
 17.1   enrollee surveys, enrollee complaints, and quality of care 
 17.2   indicators.  A quality improvement workplan is a documented 
 17.3   process for achieving measurable outcome improvement.  The 
 17.4   quality improvement workplan shall be approved annually by the 
 17.5   commissioner and made available to the public through the 
 17.6   information clearinghouse.  An integrated service network shall 
 17.7   state in all marketing materials that its quality improvement 
 17.8   workplan is available through the information clearinghouse. 
 17.9      Subd. 2.  [ENROLLEE SURVEYS.] (a) Every integrated service 
 17.10  network shall, on at least a biennial basis, survey enrollee 
 17.11  satisfaction with network performance and quality of care, and 
 17.12  shall make survey results available to enrollees and potential 
 17.13  enrollees.  Integrated service networks shall also submit survey 
 17.14  results to the information clearinghouse. 
 17.15     (b) Every integrated service network shall participate in 
 17.16  the consumer survey efforts established under section 62J.451, 
 17.17  subdivision 6b, to evaluate enrollee satisfaction, network 
 17.18  performance, and quality of care.  Participation in the consumer 
 17.19  survey efforts of section 62J.451, subdivision 6b, shall satisfy 
 17.20  paragraph (a).  
 17.21     Subd. 3.  [ENROLLEE COMPLAINTS.] As part of the enrollee 
 17.22  survey, integrated service networks must: 
 17.23     (1) identify the four most common enrollee complaints 
 17.24  related to service delivery and the four most common enrollee 
 17.25  complaints related to administration; 
 17.26     (2) identify the specific quality improvement measures that 
 17.27  the network plans to undertake to address each of these 
 17.28  complaint areas; and 
 17.29     (3) identify the mechanisms that the network will use to 
 17.30  communicate and implement the changes needed to address each of 
 17.31  the complaints identified in clause (1). 
 17.32     Sec. 28.  Minnesota Statutes 1994, section 62N.25, 
 17.33  subdivision 2, is amended to read: 
 17.34     Subd. 2.  [LICENSURE REQUIREMENTS GENERALLY.] To be 
 17.35  licensed and to operate as a community integrated service 
 17.36  network, an applicant must satisfy the requirements of chapter 
 18.1   62D, and all other legal requirements that apply to entities 
 18.2   licensed under chapter 62D, except as exempted or modified in 
 18.3   this section.  Community networks must, as a condition of 
 18.4   licensure, comply with rules adopted under section 256B.0644 
 18.5   that apply to entities governed by chapter 62D.  A community 
 18.6   integrated service network that phases in its net worth over a 
 18.7   three-year period as provided under section 62N.28, subdivision 
 18.8   4, is not required to respond to requests for proposals under 
 18.9   section 256B.0644 during the first 12 months of licensure.  
 18.10  These community integrated service networks are not, however, 
 18.11  prohibited from voluntarily responding to requests for proposals 
 18.12  during the first 12 months of licensure.  After the first 12 
 18.13  months of licensure, these community integrated service networks 
 18.14  shall respond to requests for proposals. 
 18.15     Sec. 29.  [62N.40] [CHEMICAL DEPENDENCY SERVICES.] 
 18.16     Each community integrated service network and integrated 
 18.17  service network regulated under this chapter must ensure that 
 18.18  chemically dependent individuals have access to cost-effective 
 18.19  treatment options that address the specific needs of 
 18.20  individuals.  These include, but are not limited to, the need 
 18.21  for:  treatment that takes into account severity of illness and 
 18.22  comorbidities; provision of a continuum of care, including 
 18.23  treatment and rehabilitation programs licensed under Minnesota 
 18.24  Rules, parts 9530.4100 to 9530.4410 and 9530.5000 to 9530.6500; 
 18.25  the safety of the individual's domestic and community 
 18.26  environment; gender appropriate and culturally appropriate 
 18.27  programs; and access to appropriate social services. 
 18.28     Sec. 30.  [REPEALER.] 
 18.29     Minnesota Statutes 1994, section 62N.34, is repealed. 
 18.30                             ARTICLE 2 
 18.31      MODIFICATIONS OF REQUIREMENTS FOR HEALTH PLAN COMPANIES 
 18.32     Section 1.  Minnesota Statutes 1994, section 62D.02, 
 18.33  subdivision 4, is amended to read: 
 18.34     Subd. 4.  [HEALTH MAINTENANCE ORGANIZATION.] (a) "Health 
 18.35  maintenance organization" means a nonprofit domestic or foreign 
 18.36  corporation organized under chapter 317A, or a local 
 19.1   governmental unit as defined in subdivision 11, controlled and 
 19.2   operated as provided in sections 62D.01 to 62D.30, which 
 19.3   provides, either directly or through arrangements with providers 
 19.4   or other persons, comprehensive health maintenance services, or 
 19.5   arranges for the provision of these services, to enrollees on 
 19.6   the basis of a fixed prepaid sum without regard to the frequency 
 19.7   or extent of services furnished to any particular enrollee.  
 19.8      (b) Notwithstanding paragraph (a), an organization licensed 
 19.9   as a health maintenance organization that accepts payments for 
 19.10  health care services on a capitated basis, or under another 
 19.11  similar risk sharing agreement, from a program of self-insurance 
 19.12  as described in section 60A.02, subdivision 3, paragraph (b), 
 19.13  shall not be regulated as a health maintenance organization with 
 19.14  respect to the receipt of the payments.  The payments are not 
 19.15  premium revenues for the purpose of calculating the health 
 19.16  maintenance organization's liability for otherwise applicable 
 19.17  state taxes, assessments, or surcharges, with the exception of: 
 19.18     (1) the MinnesotaCare provider tax; 
 19.19     (2) the one percent premium tax imposed in section 60A.15, 
 19.20  subdivision 1, paragraph (d); and 
 19.21     (3) effective July 1, 1995, assessments by the Minnesota 
 19.22  comprehensive health association. 
 19.23  This paragraph applies only where: 
 19.24     (1) the health maintenance organization does not bear risk 
 19.25  in excess of 110 percent of the self-insurance program's 
 19.26  expected costs; 
 19.27     (2) the employer does not carry stop loss, excess loss, or 
 19.28  similar coverage with an attachment point lower than 120 percent 
 19.29  of the self-insurance program's expected costs; 
 19.30     (3) the health maintenance organization and the employer 
 19.31  comply with the data submission and administrative 
 19.32  simplification provisions of chapter 62J; 
 19.33     (4) the health maintenance organization and the employer 
 19.34  comply with the provider tax pass-through provisions of section 
 19.35  295.582; 
 19.36     (5) the health maintenance organization's required minimum 
 20.1   reserves reflect the risk borne by the health maintenance 
 20.2   organization under this paragraph, with an appropriate 
 20.3   adjustment for the 110 percent limit on risk borne by the 
 20.4   community network; 
 20.5      (6) on or after July 1, 1994, but prior to January 1, 1995, 
 20.6   the employer has at least 1,500 current employees, as defined in 
 20.7   section 62L.02, or, on or after January 1, 1995, the employer 
 20.8   has at least 750 current employees, as defined in section 
 20.9   62L.02; 
 20.10     (7) the employer does not exclude any eligible employees or 
 20.11  their dependents, both as defined in section 62L.02, from 
 20.12  coverage offered by the employer, under this paragraph or any 
 20.13  other health coverage, insured or self-insured, offered by the 
 20.14  employer, on the basis of the health status or health history of 
 20.15  the person.  
 20.16     This paragraph expires December 31, 1997. 
 20.17     Sec. 2.  Minnesota Statutes 1994, section 62D.03, 
 20.18  subdivision 1, is amended to read: 
 20.19     Subdivision 1.  [CERTIFICATE OF AUTHORITY.] Notwithstanding 
 20.20  any law of this state to the contrary, any nonprofit domestic or 
 20.21  foreign corporation organized to do so or a local governmental 
 20.22  unit may apply to the commissioner of health for a certificate 
 20.23  of authority to establish and operate a health maintenance 
 20.24  organization in compliance with sections 62D.01 to 62D.30.  No 
 20.25  person shall establish or operate a health maintenance 
 20.26  organization in this state, nor sell or offer to sell, or 
 20.27  solicit offers to purchase or receive advance or periodic 
 20.28  consideration in conjunction with a health maintenance 
 20.29  organization or health maintenance contract unless the 
 20.30  organization has a certificate of authority under sections 
 20.31  62D.01 to 62D.30. 
 20.32     Sec. 3.  Minnesota Statutes 1994, section 62D.04, 
 20.33  subdivision 1, is amended to read: 
 20.34     Subdivision 1.  [DETERMINATION OF REQUIREMENTS.] Upon 
 20.35  receipt of an application for a certificate of authority, the 
 20.36  commissioner of health shall determine whether the applicant for 
 21.1   a certificate of authority has: 
 21.2      (a) demonstrated the willingness and potential ability to 
 21.3   assure that health care services will be provided in such a 
 21.4   manner as to enhance and assure both the availability and 
 21.5   accessibility of adequate personnel and facilities; 
 21.6      (b) arrangements for an ongoing evaluation of the quality 
 21.7   of health care; 
 21.8      (c) a procedure to develop, compile, evaluate, and report 
 21.9   statistics relating to the cost of its operations, the pattern 
 21.10  of utilization of its services, the quality, availability and 
 21.11  accessibility of its services, and such other matters as may be 
 21.12  reasonably required by regulation of the commissioner of health; 
 21.13     (d) reasonable provisions for emergency and out of area 
 21.14  health care services; 
 21.15     (e) demonstrated that it is financially responsible and may 
 21.16  reasonably be expected to meet its obligations to enrollees and 
 21.17  prospective enrollees.  In making this determination, the 
 21.18  commissioner of health shall require the amounts of net worth 
 21.19  and working capital required in section 62D.042, the deposit 
 21.20  required in section 62D.041, and in addition shall consider: 
 21.21     (1) the financial soundness of its arrangements for health 
 21.22  care services and the proposed schedule of charges used in 
 21.23  connection therewith; 
 21.24     (2) arrangements which will guarantee for a reasonable 
 21.25  period of time the continued availability or payment of the cost 
 21.26  of health care services in the event of discontinuance of the 
 21.27  health maintenance organization; and 
 21.28     (3) agreements with providers for the provision of health 
 21.29  care services; 
 21.30     (f) demonstrated that it will assume full financial risk on 
 21.31  a prospective basis for the provision of comprehensive health 
 21.32  maintenance services, including hospital care; provided, 
 21.33  however, that the requirement in this paragraph shall not 
 21.34  prohibit the following: 
 21.35     (1) a health maintenance organization from obtaining 
 21.36  insurance or making other arrangements (i) for the cost of 
 22.1   providing to any enrollee comprehensive health maintenance 
 22.2   services, the aggregate value of which exceeds $5,000 in any 
 22.3   year, (ii) for the cost of providing comprehensive health care 
 22.4   services to its members on a nonelective emergency basis, or 
 22.5   while they are outside the area served by the organization, or 
 22.6   (iii) for not more than 95 percent of the amount by which the 
 22.7   health maintenance organization's costs for any of its fiscal 
 22.8   years exceed 105 percent of its income for such fiscal years; 
 22.9   and 
 22.10     (2) a health maintenance organization from having a 
 22.11  provision in a group health maintenance contract allowing an 
 22.12  adjustment of premiums paid based upon the actual health 
 22.13  services utilization of the enrollees covered under the 
 22.14  contract, except that at no time during the life of the contract 
 22.15  shall the contract holder fully self-insure the financial risk 
 22.16  of health care services delivered under the contract.  Risk 
 22.17  sharing arrangements shall be subject to the requirements of 
 22.18  sections 62D.01 to 62D.30; 
 22.19     (g) demonstrated that it has made provisions for and 
 22.20  adopted a conflict of interest policy applicable to all members 
 22.21  of the board of directors and the principal officers of the 
 22.22  health maintenance organization.  The conflict of interest 
 22.23  policy shall include the procedures described in 
 22.24  section 302A.255, subdivisions 1 and 2, or section 317A.255, 
 22.25  subdivisions 1 and 2.  However, the commissioner is not 
 22.26  precluded from finding that a particular transaction is an 
 22.27  unreasonable expense as described in section 62D.19 even if the 
 22.28  directors follow the required procedures; and 
 22.29     (h) otherwise met the requirements of sections 62D.01 to 
 22.30  62D.30. 
 22.31     Sec. 4.  Minnesota Statutes 1994, section 62D.11, 
 22.32  subdivision 1, is amended to read: 
 22.33     Subdivision 1.  [ENROLLEE COMPLAINT SYSTEM.] Every health 
 22.34  maintenance organization shall establish and maintain a 
 22.35  complaint system including an impartial arbitration 
 22.36  provision, as required under section 62Q.105 to provide 
 23.1   reasonable procedures for the resolution of written complaints 
 23.2   initiated by enrollees concerning the provision of health care 
 23.3   services.  "Provision of health services" includes, but is not 
 23.4   limited to, questions of the scope of coverage, quality of care, 
 23.5   and administrative operations.  Arbitration shall be subject to 
 23.6   chapter 572, except (a) in the event that an enrollee elects to 
 23.7   litigate a complaint prior to submission to arbitration, and (b) 
 23.8   no medical malpractice damage claim shall be subject to 
 23.9   arbitration unless agreed to by both parties subsequent to the 
 23.10  event giving rise to the claim.  The health maintenance 
 23.11  organization must inform enrollees that they may choose to use 
 23.12  an alternative dispute resolution process.  If an enrollee 
 23.13  chooses to use an alternative dispute resolution process, the 
 23.14  health maintenance organization must participate. 
 23.15     Sec. 5.  Minnesota Statutes 1994, section 62N.06, 
 23.16  subdivision 1, is amended to read: 
 23.17     Subdivision 1.  [AUTHORIZED ENTITIES.] (a) An integrated 
 23.18  service network may be organized as a separate nonprofit 
 23.19  domestic or foreign corporation under chapter 317A or as a 
 23.20  cooperative under chapter 308A.  
 23.21     (b) A nonprofit health carrier, as defined in section 
 23.22  62A.011, may establish and operate one or more integrated 
 23.23  service networks without forming a separate corporation or 
 23.24  cooperative, but only if all of the following conditions are met:
 23.25     (i) an existing contract between the health carrier and a 
 23.26  health care provider, for a term of less than seven years, that 
 23.27  does not explicitly mention the provider's relationship within 
 23.28  an integrated service network, or a future integrated service 
 23.29  network, does not bind the health carrier or provider as applied 
 23.30  to integrated service network services, except with the mutual 
 23.31  consent of the health carrier and provider.  This clause does 
 23.32  not apply to contracts between a health carrier and its salaried 
 23.33  employees; 
 23.34     (ii) the health carrier shall not apply toward the net 
 23.35  worth, working capital, or deposit requirements of this chapter 
 23.36  any assets used to satisfy net worth, working capital, deposit, 
 24.1   or other financial requirements under any other chapter of 
 24.2   Minnesota law; 
 24.3      (iii) the health carrier shall not include in its premiums 
 24.4   for health coverage provided under any other chapter of 
 24.5   Minnesota law, an assessment or surcharge relating to net worth, 
 24.6   working capital, or deposit requirements imposed upon the 
 24.7   integrated service network under this chapter; and 
 24.8      (iv) the health carrier shall not include in its premiums 
 24.9   for integrated service network coverage under this chapter an 
 24.10  assessment or surcharge relating to net worth working capital or 
 24.11  deposit requirements imposed upon health coverage offered under 
 24.12  any other chapter of Minnesota law. 
 24.13     Sec. 6.  Minnesota Statutes 1994, section 62P.04, 
 24.14  subdivision 1, is amended to read: 
 24.15     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 24.16  section, the following definitions apply. 
 24.17     (b) "Health plan company" has the definition provided in 
 24.18  section 62Q.01. 
 24.19     (c) "Total expenditures" means incurred claims or 
 24.20  expenditures on health care services, excluding health care 
 24.21  expenditures paid for through a back-up supplemental health 
 24.22  benefit policy, administrative expenses, charitable 
 24.23  contributions, and all other payments made by health plan 
 24.24  companies out of premium revenues. 
 24.25     (d) "Net expenditures" means total expenditures minus 
 24.26  exempted taxes and assessments and payments or allocations made 
 24.27  to establish or maintain reserves.  
 24.28     (e) "Exempted taxes and assessments" means direct payments 
 24.29  for taxes to government agencies, contributions to the Minnesota 
 24.30  comprehensive health association, the medical assistance 
 24.31  provider's surcharge under section 256.9657, the MinnesotaCare 
 24.32  provider tax under section 295.52, assessments by the health 
 24.33  coverage reinsurance association, assessments by the Minnesota 
 24.34  life and health insurance guaranty association, assessments by 
 24.35  the Minnesota risk adjustment association, and any new 
 24.36  assessments imposed by federal or state law. 
 25.1      (f) "Consumer cost-sharing or subscriber liability" means 
 25.2   enrollee coinsurance, copayment, deductible payments, and 
 25.3   amounts in excess of benefit plan maximums. 
 25.4      Sec. 7.  Minnesota Statutes 1994, section 62P.04, 
 25.5   subdivision 3, is amended to read: 
 25.6      Subd. 3.  [DETERMINATION OF EXPENDITURES.] Health plan 
 25.7   companies shall submit to the commissioner of health, by April 
 25.8   1, 1994, for calendar year 1993; April 1, 1995, for calendar 
 25.9   year 1994; April 1, 1996, for calendar year 1995; April 1, 1997, 
 25.10  for calendar year 1996; and April 1, 1998, for calendar year 
 25.11  1997 all information the commissioner determines to be necessary 
 25.12  to implement and enforce this section.  The information must be 
 25.13  submitted in the form specified by the commissioner.  The 
 25.14  information must include, but is not limited to, expenditures 
 25.15  per member per month or cost per employee per month, and 
 25.16  detailed information on revenues and reserves.  The 
 25.17  commissioner, to the extent possible, shall coordinate the 
 25.18  submittal of the information required under this section with 
 25.19  the submittal of the financial data required under chapter 62J, 
 25.20  to minimize the administrative burden on health plan companies.  
 25.21  The commissioner may adjust final expenditure figures for 
 25.22  demographic changes, risk selection, changes in basic benefits, 
 25.23  increases in health care costs or utilization experienced by a 
 25.24  health plan company not functioning as a managed care 
 25.25  organization as defined in section 62Q.01, subdivision 5, 
 25.26  increases in health care costs or utilization associated with 
 25.27  out-of-network providers and experienced by a health plan 
 25.28  company functioning as a managed care organization as defined in 
 25.29  section 62Q.01, subdivision 5, and legislative initiatives that 
 25.30  materially change health care costs, as long as these 
 25.31  adjustments are consistent with the methodology submitted by the 
 25.32  health plan company to the commissioner, and approved by the 
 25.33  commissioner as actuarially justified.  The methodology to be 
 25.34  used for adjustments and the election to meet one expenditure 
 25.35  limit for affiliated health plan companies must be submitted to 
 25.36  the commissioner by September 1, 1994.  Community integrated 
 26.1   service networks may submit the information with their 
 26.2   application for licensure.  The commissioner shall also accept 
 26.3   changes to methodologies already submitted.  The adjustment 
 26.4   methodology submitted and approved by the commissioner must 
 26.5   apply to the data submitted for calendar years 1994 and 1995.  
 26.6   The commissioner may allow changes to accepted adjustment 
 26.7   methodologies for data submitted for calendar years 1996 and 
 26.8   1997.  Changes to the adjustment methodology must be received by 
 26.9   September 1, 1996, and must be approved by the commissioner. 
 26.10     Sec. 8.  Minnesota Statutes 1994, section 62Q.01, 
 26.11  subdivision 2, is amended to read: 
 26.12     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 26.13  commissioner of health for purposes of regulating health 
 26.14  maintenance organizations, community integrated service 
 26.15  networks, and integrated service networks, or the commissioner 
 26.16  of commerce for purposes of regulating all other health plan 
 26.17  companies.  For all other purposes, "commissioner" means the 
 26.18  commissioner of health. 
 26.19     Sec. 9.  Minnesota Statutes 1994, section 62Q.01, is 
 26.20  amended by adding a subdivision to read: 
 26.21     Subd. 2a.  [ENROLLEE.] "Enrollee" means a natural person 
 26.22  covered by a health plan and includes an insured, policyholder, 
 26.23  subscriber, contract holder, member, covered person, or 
 26.24  certificate holder. 
 26.25     Sec. 10.  Minnesota Statutes 1994, section 62Q.01, 
 26.26  subdivision 3, is amended to read: 
 26.27     Subd. 3.  [HEALTH PLAN.] "Health plan" means a health plan 
 26.28  as defined in section 62A.011; or a policy, contract, or 
 26.29  certificate issued by a community integrated service network; or 
 26.30  by an integrated service network; or an all-payer insurer as 
 26.31  defined in section 62P.02. 
 26.32     Sec. 11.  Minnesota Statutes 1994, section 62Q.01, is 
 26.33  amended by adding a subdivision to read: 
 26.34     Subd. 5.  [MANAGED CARE ORGANIZATION.] "Managed care 
 26.35  organization" means:  (1) a health maintenance organization 
 26.36  operating under chapter 62D; (2) a community integrated service 
 27.1   network as defined under section 62N.02, subdivision 4a; (3) an 
 27.2   integrated service network as defined under section 62N.02, 
 27.3   subdivision 8; or (4) an insurance company licensed under 
 27.4   chapter 60A, nonprofit health service plan corporation operating 
 27.5   under chapter 62C, fraternal benefit society operating under 
 27.6   chapter 64B, or any other health plan company, to the extent 
 27.7   that it covers health care services delivered to Minnesota 
 27.8   residents through a preferred provider organization or a network 
 27.9   of selected providers. 
 27.10     Sec. 12.  Minnesota Statutes 1994, section 62Q.01, is 
 27.11  amended by adding a subdivision to read: 
 27.12     Subd. 6.  [MEDICARE-RELATED COVERAGE.] "Medicare-related 
 27.13  coverage" means a policy, contract, or certificate issued as a 
 27.14  supplement to Medicare, regulated under sections 62A.31 to 
 27.15  62A.44, including Medicare select coverage; a policy, contract, 
 27.16  or certificate that supplements Medicare issued by a health 
 27.17  maintenance organization; or a policy, contract, or certificate 
 27.18  governed by section 1833 (known as "cost" or "HCPP" contracts) 
 27.19  or 1876 (known as "TEFRA" or "risk" contracts) of the federal 
 27.20  Social Security Act, United States Code, title 42, section 1395, 
 27.21  et seq., as amended. 
 27.22     Sec. 13.  [62Q.02] [APPLICABILITY OF CHAPTER.] 
 27.23     (a) This chapter applies only to health plans, as defined 
 27.24  in section 62Q.01, and not to other types of insurance issued or 
 27.25  renewed by health plan companies, unless otherwise specified. 
 27.26     (b) This chapter applies to a health plan company only with 
 27.27  respect to health plans, as defined in section 62Q.01, issued or 
 27.28  renewed by the health plan company, unless otherwise specified. 
 27.29     (c) If a health plan company issues or renews health plans 
 27.30  in other states, this chapter applies only to health plans 
 27.31  issued or renewed in this state, or to cover a resident of this 
 27.32  state, unless otherwise specified. 
 27.33     Sec. 14.  Minnesota Statutes 1994, section 62Q.03, 
 27.34  subdivision 1, is amended to read: 
 27.35     Subdivision 1.  [PURPOSE.] Risk adjustment is a vital 
 27.36  element of the state's strategy for achieving a more equitable, 
 28.1   efficient system of health care delivery and financing for all 
 28.2   state residents.  The purpose of risk adjustment is to reduce 
 28.3   the effects of risk selection on health insurance premiums by 
 28.4   making monetary transfers from health plan companies that insure 
 28.5   lower risk populations to health plan companies that insure 
 28.6   higher risk populations.  Risk adjustment is needed to:  achieve 
 28.7   a more equitable, efficient system of health care financing; 
 28.8   remove current disincentives in the health care system to insure 
 28.9   and serve provide adequate access for high risk and special 
 28.10  needs populations; promote fair competition among health plan 
 28.11  companies on the basis of their ability to efficiently and 
 28.12  effectively provide services rather than on the health risk 
 28.13  status of those in a given insurance pool; and help 
 28.14  assure maintain the viability of all health plan companies, 
 28.15  including community integrated service networks by protecting 
 28.16  them from the financial effects of enrolling a disproportionate 
 28.17  number of high risk individuals.  It is the commitment of the 
 28.18  state to develop and implement a risk adjustment system by July 
 28.19  1, 1997, and to continue to improve and refine risk adjustment 
 28.20  over time.  The process for designing and implementing risk 
 28.21  adjustment shall be open, explicit, utilize resources and 
 28.22  expertise from both the private and public sectors, and include 
 28.23  at least the representation described in subdivision 4.  The 
 28.24  process shall take into account the formative nature of risk 
 28.25  adjustment as an emerging science, and shall develop and 
 28.26  implement risk adjustment to allow continual modifications, 
 28.27  expansions, and refinements over time.  The process shall have 
 28.28  at least two stages, as described in subdivisions 2 and 3.  The 
 28.29  risk adjustment system shall:  
 28.30     (1) possess a reasonable level of accuracy and 
 28.31  administrative feasibility, be adaptable to changes as methods 
 28.32  improve, incorporate safeguards against fraud and manipulation, 
 28.33  and shall neither reward inefficiency nor penalize for 
 28.34  verifiable improvements in health status; 
 28.35     (2) require participation by all health plan companies 
 28.36  providing coverage in the individual, small group, and Medicare 
 29.1   supplement markets; 
 29.2      (3) address unequal distribution of risk between health 
 29.3   plan companies, but shall not address the financing of public 
 29.4   programs or subsidies for low-income people; and 
 29.5      (4) be developed and implemented by the risk adjustment 
 29.6   association with joint oversight by the commissioners of health 
 29.7   and commerce. 
 29.8      Sec. 15.  Minnesota Statutes 1994, section 62Q.03, is 
 29.9   amended by adding a subdivision to read: 
 29.10     Subd. 5a.  [PUBLIC PROGRAMS.] (a) A risk adjustment system 
 29.11  must be developed for state-run public programs, including 
 29.12  medical assistance, general assistance medical care, and 
 29.13  MinnesotaCare.  The system must be developed in accordance with 
 29.14  the general risk adjustment methodologies described in this 
 29.15  section, must go beyond age and sex adjustment, and may include 
 29.16  additional demographic factors, different targeted conditions, 
 29.17  and different payment amounts for conditions.  The risk 
 29.18  adjustment system for public programs must attempt to reflect 
 29.19  the special needs related to poverty, cultural or language 
 29.20  barriers, and other needs of some segments of the public program 
 29.21  population. 
 29.22     (b) The commissioners of health and human services shall 
 29.23  jointly convene and staff a public programs risk adjustment work 
 29.24  group responsible for developing and recommending any special 
 29.25  features of the public program risk adjustment system.  The 
 29.26  commissioner of health shall work with the risk adjustment 
 29.27  association to ensure coordination between the risk adjustment 
 29.28  systems for the public and private sectors.  The commissioner of 
 29.29  human services shall seek any needed federal approvals necessary 
 29.30  for the inclusion of the medical assistance program in the 
 29.31  public program risk adjustment system. 
 29.32     (c) The public programs risk adjustment work group must be 
 29.33  representative of the persons served by publicly paid health 
 29.34  programs and providers and health plans that meet their needs.  
 29.35  To the greatest extent possible, the appointing authorities 
 29.36  shall attempt to select representatives that have historically 
 30.1   served a significant number of persons in publicly paid health 
 30.2   programs or the uninsured.  Membership of the work group shall 
 30.3   be as follows: 
 30.4      (1) one provider member appointed by the Minnesota Medical 
 30.5   Association; 
 30.6      (2) two provider members appointed by the Minnesota 
 30.7   Hospital Association, at least one of whom must represent a 
 30.8   major disproportionate share hospital; 
 30.9      (3) five members appointed by the Minnesota Council of 
 30.10  HMOs, one of whom must represent an HMO with fewer than 50,000 
 30.11  enrollees located outside the metropolitan area and one of whom 
 30.12  must represent an HMO with at least 50 percent of total 
 30.13  membership enrolled through a public program; 
 30.14     (4) two representatives of counties appointed by the 
 30.15  Association of Minnesota Counties; 
 30.16     (5) three representatives of organizations representing the 
 30.17  interests of families, children, childless adults and elderly 
 30.18  persons served by the various publicly paid health programs, 
 30.19  appointed by the governor; 
 30.20     (6) two representatives of persons with mental health, 
 30.21  developmental or physical disabilities, chemical dependency, or 
 30.22  chronic illness appointed by the governor; and 
 30.23     (7) three public members appointed by the governor, at 
 30.24  least one of whom must represent a community health board.  The 
 30.25  risk adjustment association may appoint a representative, if a 
 30.26  representative is not otherwise appointed by an appointing 
 30.27  authority. 
 30.28     (d) The public programs risk adjustment work group shall 
 30.29  present a progress report to the governor and legislative 
 30.30  commission on health care access by December 15, 1995, that 
 30.31  outlines accomplishments to date, presents a recommended work 
 30.32  plan and timeframes, and describes how its efforts are 
 30.33  coordinated with the private sector risk adjustment 
 30.34  association's activities and other state initiatives related to 
 30.35  public program managed care reimbursement.  The commissioner of 
 30.36  human services shall, by January 15, 1996, and annually 
 31.1   thereafter, recommend to the governor and the legislative 
 31.2   commission on health care access any federal waiver 
 31.3   authorizations or other legislative action necessary to 
 31.4   implement the public programs risk adjustment system. 
 31.5      Sec. 16.  Minnesota Statutes 1994, section 62Q.03, is 
 31.6   amended by adding a subdivision to read: 
 31.7      Subd. 5b.  [MEDICARE SUPPLEMENT MARKET.] A risk adjustment 
 31.8   system may be developed for the Medicare supplement market.  The 
 31.9   Medicare supplement risk adjustment system may include a 
 31.10  demographic component and may, but is not required to, include a 
 31.11  condition-specific risk adjustment component. 
 31.12     Sec. 17.  Minnesota Statutes 1994, section 62Q.03, 
 31.13  subdivision 6, is amended to read: 
 31.14     Subd. 6.  [CREATION OF RISK ADJUSTMENT ASSOCIATION.] The 
 31.15  Minnesota risk adjustment association is created on July 1, 
 31.16  1994, and may operate as a nonprofit unincorporated association, 
 31.17  but is authorized to incorporate under chapter 317A.  
 31.18     The provisions of this chapter govern if the provisions of 
 31.19  chapter 317A conflict with this chapter.  The association may 
 31.20  operate under the approved plan of operation and shall be 
 31.21  governed in accordance with this chapter and may operate in 
 31.22  accordance with chapter 317A.  If the association incorporates 
 31.23  as a nonprofit corporation under chapter 317A, the filing of the 
 31.24  plan of operation meets the requirements of filing articles of 
 31.25  incorporation. 
 31.26     The association, its transactions, and all property owned 
 31.27  by it are exempt from taxation under the laws of this state or 
 31.28  any of its subdivisions, including, but not limited to, income 
 31.29  tax, sales tax, use tax, and property tax.  The association may 
 31.30  seek exemption from payment of all fees and taxes levied by the 
 31.31  federal government.  Except as otherwise provided in this 
 31.32  chapter, the association is not subject to the provisions of 
 31.33  chapters 14, 60A, 62A, and 62P.  The association is not a public 
 31.34  employer and is not subject to the provisions of chapters 179A 
 31.35  and 353.  The board of directors and health carriers who are 
 31.36  members of the association are exempt from sections 325D.49 to 
 32.1   325D.66 in the performance of their duties as directors and 
 32.2   members of the association.  The risk adjustment association is 
 32.3   subject to the open meeting law. 
 32.4      Sec. 18.  Minnesota Statutes 1994, section 62Q.03, 
 32.5   subdivision 7, is amended to read: 
 32.6      Subd. 7.  [PURPOSE OF ASSOCIATION.] The association is 
 32.7   established to carry out the purposes of subdivision 1, as 
 32.8   further elaborated on by the implementation report described in 
 32.9   subdivision 5 and by legislation enacted in 1995 or subsequently 
 32.10  established to develop and implement a private sector risk 
 32.11  adjustment system.  
 32.12     Subject to state oversight set forth in subdivision 10, the 
 32.13  association shall:  
 32.14     (1) develop and implement comprehensive risk adjustment 
 32.15  systems for individual, small group, and Medicare supplement 
 32.16  markets consistent with the provisions of this chapter; 
 32.17     (2) submit a plan for the development of the risk 
 32.18  adjustment system which identifies appropriate implementation 
 32.19  dates consistent with the rating and underwriting restrictions 
 32.20  of each market, recommends whether transfers attributable to 
 32.21  risk adjustment should be required between the individual and 
 32.22  small group markets, and makes other appropriate recommendations 
 32.23  to the commissioners of health and commerce by November 5, 1995; 
 32.24     (3) develop a combination of a demographic risk adjustment 
 32.25  system and payments for targeted conditions; 
 32.26     (4) test an ambulatory care groups (ACGs), diagnostic cost 
 32.27  groups (DCGs) system, and recommend whether such a methodology 
 32.28  should be adopted; 
 32.29     (5) fund the development and testing of the risk adjustment 
 32.30  system; 
 32.31     (6) recommend market conduct guidelines; and 
 32.32     (7) develop a plan for assessing members for the costs of 
 32.33  administering the risk adjustment system. 
 32.34     Sec. 19.  Minnesota Statutes 1994, section 62Q.03, 
 32.35  subdivision 8, is amended to read: 
 32.36     Subd. 8.  [GOVERNANCE.] (a) The association shall be 
 33.1   governed by an interim 19-member board as follows:  one provider 
 33.2   member appointed by the Minnesota Hospital Association; one 
 33.3   provider member appointed by the Minnesota Medical Association; 
 33.4   one provider member appointed by the governor; three members 
 33.5   appointed by the Minnesota Council of HMOs to include an HMO 
 33.6   with at least 50 percent of total membership enrolled through a 
 33.7   public program; three members appointed by Blue Cross and Blue 
 33.8   Shield of Minnesota, to include a member from a Blue Cross and 
 33.9   Blue Shield of Minnesota affiliated health plan with fewer than 
 33.10  50,000 enrollees and located outside the Minneapolis-St. Paul 
 33.11  metropolitan area; two members appointed by the Insurance 
 33.12  Federation of Minnesota; one member appointed by the Minnesota 
 33.13  Association of Counties; and three public members appointed by 
 33.14  the governor, to include at least one representative of a public 
 33.15  program.  The commissioners of health, commerce, human services, 
 33.16  and employee relations shall be nonvoting ex officio members. 
 33.17     (b) The board may elect officers and establish committees 
 33.18  as necessary. 
 33.19     (c) A majority of the members of the board constitutes a 
 33.20  quorum for the transaction of business. 
 33.21     (d) Approval by a majority of the board members present is 
 33.22  required for any action of the board. 
 33.23     (e) Interim board members shall be appointed by July 1, 
 33.24  1994, and shall serve until a new board is elected according to 
 33.25  the plan of operation developed by the association. 
 33.26     (f) A member may designate a representative to act as a 
 33.27  member of the interim board in the member's absence. 
 33.28     Sec. 20.  Minnesota Statutes 1994, section 62Q.03, is 
 33.29  amended by adding a subdivision to read: 
 33.30     Subd. 8a.  [PLAN OF OPERATION.] The board shall submit a 
 33.31  proposed plan of operation by August 15, 1995, to the 
 33.32  commissioners of health and commerce for review.  The 
 33.33  commissioners of health and commerce shall have the authority to 
 33.34  approve or reject the plan of operation. 
 33.35     Amendments to the plan of operation may be made by the 
 33.36  commissioners or by the directors of the association, subject to 
 34.1   the approval of the commissioners. 
 34.2      Sec. 21.  Minnesota Statutes 1994, section 62Q.03, 
 34.3   subdivision 9, is amended to read: 
 34.4      Subd. 9.  [DATA COLLECTION AND DATA PRIVACY.] The board of 
 34.5   the association shall consider antitrust implications and 
 34.6   establish procedures to assure that pricing and other 
 34.7   competitive information is appropriately shared among 
 34.8   competitors in the health care market or members of the board.  
 34.9   Any information shared shall be distributed only for the 
 34.10  purposes of administering or developing any of the tasks 
 34.11  identified in subdivisions 2 and 4.  In developing these 
 34.12  procedures, the board of the association may consider the 
 34.13  identification of a state agency or other appropriate third 
 34.14  party to receive information of a confidential or competitive 
 34.15  nature.  The association members shall not have access to 
 34.16  unaggregated data on individuals or health plan companies.  The 
 34.17  association shall develop, as a part of the plan of operation, 
 34.18  procedures for ensuring that data is collected by an appropriate 
 34.19  entity.  The commissioners of health and commerce shall have the 
 34.20  authority to audit and examine data collected by the association 
 34.21  for the purposes of the development and implementation of the 
 34.22  risk adjustment system.  Data on individuals collected for the 
 34.23  purposes of risk adjustment development, testing, and operation 
 34.24  are designated as private data.  Data not on individuals which 
 34.25  is collected for the purposes of development, testing, and 
 34.26  operation of risk adjustment, are designated as nonpublic data, 
 34.27  except that the proposed and approved plan of operation, the 
 34.28  risk adjustment methodologies examined, the plan for testing, 
 34.29  the plan of the risk adjustment system, minutes of meetings, and 
 34.30  other general operating information are classified as public 
 34.31  data.  Nothing in this section is intended to prohibit the 
 34.32  preparation of summary data under section 13.05, subdivision 7.  
 34.33  The association, state agencies, and any contractors having 
 34.34  access to this data shall maintain it in accordance with this 
 34.35  classification.  The commissioners of health and human services 
 34.36  have the authority to collect data from health plan companies as 
 35.1   needed for the purpose of developing a risk adjustment mechanism 
 35.2   for public programs. 
 35.3      Sec. 22.  Minnesota Statutes 1994, section 62Q.03, 
 35.4   subdivision 10, is amended to read: 
 35.5      Subd. 10.  [SUPERVISION STATE OVERSIGHT OF RISK ADJUSTMENT 
 35.6   ACTIVITIES.] The association's activities shall be supervised by 
 35.7   the commissioners of health and commerce.  The commissioners 
 35.8   shall provide specific oversight functions during the 
 35.9   development and implementation phases as follows: 
 35.10     (1) the commissioners shall approve or reject the 
 35.11  association's plan for testing risk adjustment methods, the 
 35.12  methods to be used, and any changes to those methods; 
 35.13     (2) the commissioners must have the right to attend and 
 35.14  participate in all meetings of the association and its work 
 35.15  groups or committees, except for meetings involving privileged 
 35.16  communication between the association and its counsel as 
 35.17  permitted under section 471.705, subdivision 1d, paragraph (e); 
 35.18     (3) the commissioners shall approve or reject any 
 35.19  consultants or administrators used by the association; 
 35.20     (4) the commissioners shall approve or reject the 
 35.21  association's plan of operation; and 
 35.22     (5) the commissioners shall approve or reject the plan for 
 35.23  the risk adjustment system described in subdivision 7, clause 
 35.24  (2). 
 35.25     If the commissioners reject any of the plans identified in 
 35.26  clauses (1), (4) and (5), the directors shall submit for review 
 35.27  an appropriate revised plan within 30 days. 
 35.28     Sec. 23.  Minnesota Statutes 1994, section 62Q.03, is 
 35.29  amended by adding a subdivision to read: 
 35.30     Subd. 12.  [PARTICIPATION BY ALL HEALTH PLAN 
 35.31  COMPANIES.] Upon its implementation, all health plan companies, 
 35.32  as a condition of licensure, must participate in the risk 
 35.33  adjustment system to be implemented under this section. 
 35.34     Sec. 24.  Minnesota Statutes 1994, section 62Q.07, 
 35.35  subdivision 1, is amended to read: 
 35.36     Subdivision 1.  [ACTION PLANS REQUIRED.] (a) To increase 
 36.1   public awareness and accountability of health plan companies, 
 36.2   all health plan companies that issue or renew a health plan, as 
 36.3   defined in section 62Q.01, must annually file with the 
 36.4   applicable commissioner an action plan that satisfies the 
 36.5   requirements of this section beginning July 1, 1994, as a 
 36.6   condition of doing business in Minnesota.  For purposes of this 
 36.7   subdivision, "health plan" includes Medicare-related coverage.  
 36.8   Each health plan company must also file its action plan with the 
 36.9   information clearinghouse.  Action plans are required solely to 
 36.10  provide information to consumers, purchasers, and the larger 
 36.11  community as a first step toward greater accountability of 
 36.12  health plan companies.  The sole function of the commissioner in 
 36.13  relation to the action plans is to ensure that each health plan 
 36.14  company files a complete action plan, that the action plan is 
 36.15  truthful and not misleading, and that the action plan is 
 36.16  reviewed by appropriate community agencies. 
 36.17     (b) If a commissioner responsible for regulating a health 
 36.18  plan company required to file an action plan under this section 
 36.19  has reason to believe an action plan is false or misleading, the 
 36.20  commissioner may conduct an investigation to determine whether 
 36.21  the action plan is truthful and not misleading, and may require 
 36.22  the health plan company to submit any information that the 
 36.23  commissioner reasonably deems necessary to complete the 
 36.24  investigation.  If the commissioner determines that an action 
 36.25  plan is false or misleading, the commissioner may require the 
 36.26  health plan company to file an amended plan or may take any 
 36.27  action authorized under chapter 72A. 
 36.28     Sec. 25.  Minnesota Statutes 1994, section 62Q.07, 
 36.29  subdivision 2, is amended to read: 
 36.30     Subd. 2.  [CONTENTS OF ACTION PLANS.] (a) An action plan 
 36.31  must include a detailed description of all of the health plan 
 36.32  company's methods and procedures, standards, qualifications, 
 36.33  criteria, and credentialing requirements for designating the 
 36.34  providers who are eligible to participate in the health plan 
 36.35  company's provider network, including any limitations on the 
 36.36  numbers of providers to be included in the network.  This 
 37.1   description must be updated by the health plan company and filed 
 37.2   with the applicable agency on a quarterly basis.  
 37.3      (b) An action plan must include the number of full-time 
 37.4   equivalent physicians, by specialty, nonphysician providers, and 
 37.5   allied health providers used to provide services.  The action 
 37.6   plan must also describe how the health plan company intends to 
 37.7   encourage the use of nonphysician providers, midlevel 
 37.8   practitioners, and allied health professionals, through at least 
 37.9   consumer education, physician education, and referral and 
 37.10  advisement systems.  The annual action plan must also include 
 37.11  data that is broken down by type of provider, reflecting actual 
 37.12  utilization of midlevel practitioners and allied professionals 
 37.13  by enrollees of the health plan company during the previous 
 37.14  year.  Until July 1, 1995, a health plan company may use 
 37.15  estimates if actual data is not available.  For purposes of this 
 37.16  paragraph, "provider" has the meaning given in section 62J.03, 
 37.17  subdivision 8.  
 37.18     (c) An action plan must include a description of the health 
 37.19  plan company's policy on determining the number and the type of 
 37.20  providers that are necessary to deliver cost-effective health 
 37.21  care to its enrollees.  The action plan must also include the 
 37.22  health plan company's strategy, including provider recruitment 
 37.23  and retention activities, for ensuring that sufficient providers 
 37.24  are available to its enrollees. 
 37.25     (d) An action plan must include a description of actions 
 37.26  taken or planned by the health plan company to ensure that 
 37.27  information from report cards, outcome studies, and complaints 
 37.28  is used internally to improve quality of the services provided 
 37.29  by the health plan company. 
 37.30     (e) An action plan must include a detailed description of 
 37.31  the health plan company's policies and procedures for enrolling 
 37.32  and serving high risk and special needs populations.  This 
 37.33  description must also include the barriers that are present for 
 37.34  the high risk and special needs population and how the health 
 37.35  plan company is addressing these barriers in order to provide 
 37.36  greater access to these populations.  "High risk and special 
 38.1   needs populations" includes, but is not limited to, recipients 
 38.2   of medical assistance, general assistance medical care, and 
 38.3   MinnesotaCare; persons with chronic conditions or disabilities; 
 38.4   individuals within certain racial, cultural, and ethnic 
 38.5   communities; individuals and families with low income; 
 38.6   adolescents; the elderly; individuals with limited or no English 
 38.7   language proficiency; persons with high-cost preexisting 
 38.8   conditions; homeless persons; chemically dependent persons; 
 38.9   persons with serious and persistent mental illness and; children 
 38.10  with severe emotional disturbance; and persons who are at high 
 38.11  risk of requiring treatment.  The action plan must also reflect 
 38.12  actual utilization of providers by enrollees defined by this 
 38.13  section as high risk or special needs populations during the 
 38.14  previous year.  For purposes of this paragraph, "provider" has 
 38.15  the meaning given in section 62J.03, subdivision 8. 
 38.16     (f) An action plan must include a general description of 
 38.17  any action the health plan company has taken and those it 
 38.18  intends to take to offer health coverage options to rural 
 38.19  communities and other communities not currently served by the 
 38.20  health plan company. 
 38.21     (g) A health plan company other than a large managed care 
 38.22  plan company may satisfy any of the requirements of the action 
 38.23  plan in paragraphs (a) to (f) by stating that it has no 
 38.24  policies, procedures, practices, or requirements, either written 
 38.25  or unwritten, or formal or informal, and has undertaken no 
 38.26  activities or plans on the issues required to be addressed in 
 38.27  the action plan, provided that the statement is truthful and not 
 38.28  misleading.  For purposes of this paragraph, "large managed care 
 38.29  plan company" means a health maintenance organization, 
 38.30  integrated service network, or other health plan company that 
 38.31  employs or contracts with health care providers, that has more 
 38.32  than 50,000 enrollees in this state.  If a health plan company 
 38.33  employs or contracts with providers for some of its health plans 
 38.34  and does not do so for other health plans that it offers, the 
 38.35  health plan company is a large managed care plan company if it 
 38.36  has more than 50,000 enrollees in this state in health plans for 
 39.1   which it does employ or contract with providers. 
 39.2      Sec. 26.  Minnesota Statutes 1994, section 62Q.075, 
 39.3   subdivision 4, is amended to read: 
 39.4      Subd. 4.  [REVIEW.] Upon receipt of the plan, the 
 39.5   appropriate commissioner shall provide a copy to the regional 
 39.6   coordinating boards, local community health boards, and other 
 39.7   relevant community organizations within the managed care 
 39.8   organization's service area.  After reviewing the plan, these 
 39.9   community groups may submit written comments on the plan to 
 39.10  either the commissioner of health or commerce, as applicable, 
 39.11  and may advise the commissioner of the managed care 
 39.12  organization's effectiveness in assisting to achieve regional 
 39.13  public health goals.  The plan may be reviewed by the county 
 39.14  boards, or city councils acting as a local board of health in 
 39.15  accordance with chapter 145A, within the managed care 
 39.16  organization's service area to determine whether the plan is 
 39.17  consistent with the goals and objectives of the plans required 
 39.18  under chapters 145A and 256E and whether the plan meets the 
 39.19  needs of the community.  The county board, or applicable city 
 39.20  council, may also review and make recommendations on the 
 39.21  availability and accessibility of services provided by the 
 39.22  managed care organization.  The county board, or applicable city 
 39.23  council, may submit written comments to the appropriate 
 39.24  commissioner, and may advise the commissioner of the managed 
 39.25  care organization's effectiveness in assisting to meet the needs 
 39.26  and goals as defined under the responsibilities of chapters 145A 
 39.27  and 256E.  The commissioner of health shall develop 
 39.28  recommendations to utilize the written comments submitted as 
 39.29  part of the licensure process to ensure local public 
 39.30  accountability.  These recommendations shall be reported to the 
 39.31  legislative commission on health care access by January 15, 
 39.32  1996.  Copies of these written comments must be provided to the 
 39.33  managed care organization.  The plan and any comments submitted 
 39.34  must be filed with the information clearinghouse to be 
 39.35  distributed to the public. 
 39.36     Sec. 27.  Minnesota Statutes 1994, section 62Q.09, 
 40.1   subdivision 3, is amended to read: 
 40.2      Subd. 3.  [ENFORCEMENT.] Either The commissioner 
 40.3   commissioners of health or and commerce shall each periodically 
 40.4   review contracts among health care providing entities and health 
 40.5   plan companies to determine compliance with this section, with 
 40.6   respect to health plan companies that the commissioners 
 40.7   respectively regulate.  Any provider may submit a contract to 
 40.8   the relevant commissioner for review if the provider believes 
 40.9   this section has been violated.  Any provision of a contract 
 40.10  found by the relevant commissioner to violate this section is 
 40.11  null and void, and the relevant commissioner may seek assess 
 40.12  civil penalties against the health plan company in an amount not 
 40.13  to exceed $25,000 for each such contract, using the enforcement 
 40.14  procedures otherwise available to the commissioner involved. 
 40.15     Sec. 28.  [62Q.105] [COMPLAINT RESOLUTION.] 
 40.16     Subdivision 1.  [ESTABLISHMENT.] Each health plan company 
 40.17  shall establish and make available to enrollees, by July 1, 
 40.18  1997, an informal complaint resolution process that meets the 
 40.19  requirements of this section.  A health plan company must make 
 40.20  reasonable efforts to resolve enrollee complaints, and must 
 40.21  inform complainants in writing of the company's decision within 
 40.22  30 days of receiving the complaint.  The complaint resolution 
 40.23  process must treat the complaint and information related to it 
 40.24  as required under sections 72A.549 to 72A.505. 
 40.25     Subd. 2.  [MEDICALLY URGENT COMPLAINTS.] Health plan 
 40.26  companies shall make reasonable efforts to resolve medically 
 40.27  urgent enrollee complaints within 72 hours of receiving the 
 40.28  complaint. 
 40.29     Subd. 3.  [APPEALS PROCESS.] Health plan companies shall 
 40.30  establish and make available to enrollees an impartial appeals 
 40.31  process.  If a decision by a health plan company regarding a 
 40.32  complaint is partially or wholly adverse to the complainant, the 
 40.33  health plan company shall advise the complainant of the right to 
 40.34  appeal through the impartial appeals process or to the 
 40.35  commissioner.  
 40.36     Subd. 4.  [ALTERNATIVE DISPUTE RESOLUTION.] Health plan 
 41.1   companies shall make available to enrollees an alternative 
 41.2   dispute resolution process, and shall participate in alternative 
 41.3   dispute resolution at the request of an enrollee, as required 
 41.4   under section 62Q.11. 
 41.5      Subd. 5.  [DISPUTE RESOLUTION BY COMMISSIONER.] A 
 41.6   complainant may at any time submit a complaint to the 
 41.7   appropriate commissioner, who may either independently 
 41.8   investigate the complaint or refer it to the health plan company 
 41.9   for further review.  After investigating a complaint, or 
 41.10  reviewing a company's decision, the appropriate commissioner may 
 41.11  order a remedy as authorized under section 62N.04, chapters 45, 
 41.12  60A, or 62D. 
 41.13     Subd. 6.  [REQUIREMENTS FOR MANAGED CARE 
 41.14  ORGANIZATIONS.] Each managed care organization shall submit all 
 41.15  health care quality-related complaints to its quality review 
 41.16  board or quality review organization for evaluation and possible 
 41.17  action.  The complaint resolution process for managed care 
 41.18  organizations must clearly indicate the entity responsible for 
 41.19  resolving complaints made by enrollees against hospitals, other 
 41.20  health care facilities, and health care providers, that are 
 41.21  owned by or under contract with the managed care organization. 
 41.22     Subd. 7.  [RECORDKEEPING.] Health plan companies shall 
 41.23  maintain records of all enrollee complaints and their 
 41.24  resolutions.  These records must be retained for five years, and 
 41.25  must be made available to the appropriate commissioner upon 
 41.26  request. 
 41.27     Subd. 8.  [REPORTING.] Each health plan company shall 
 41.28  submit to the appropriate commissioner, as part of the company's 
 41.29  annual filing, data on the number and type of complaints that 
 41.30  are not resolved within 30 days.  A health plan company shall 
 41.31  also make this information available to the public upon request. 
 41.32     Subd. 9.  [NOTICE TO ENROLLEES.] Health plan companies 
 41.33  shall provide a clear and complete description of their 
 41.34  complaint resolution procedures to enrollees as part of their 
 41.35  evidence of coverage or contract.  The description must 
 41.36  specifically inform enrollees: 
 42.1      (1) how to file a complaint with the health plan company; 
 42.2      (2) how to request an impartial appeal; 
 42.3      (3) that they have the right to request the use of 
 42.4   alternative methods of dispute resolution; and 
 42.5      (4) that they have the right to litigate. 
 42.6      Sec. 29.  Minnesota Statutes 1994, section 62Q.11, is 
 42.7   amended to read: 
 42.8      62Q.11 [ALTERNATIVE DISPUTE RESOLUTION.] 
 42.9      Subdivision 1.  [ESTABLISHED.] The commissioners of health 
 42.10  and commerce shall make alternative dispute resolution processes 
 42.11  available to encourage early settlement of disputes in order to 
 42.12  avoid the time and cost associated with litigation and other 
 42.13  formal adversarial hearings.  For purposes of this section, 
 42.14  "alternative dispute resolution" means the use of negotiation, 
 42.15  mediation, arbitration, mediation-arbitration, neutral fact 
 42.16  finding, and minitrials.  These processes shall be nonbinding 
 42.17  unless otherwise agreed to by all parties to the dispute. 
 42.18     Subd. 2.  [REQUIREMENTS.] (a) If an enrollee, health care 
 42.19  provider, or applicant for network provider status chooses to 
 42.20  use a an alternative dispute resolution process prior to the 
 42.21  filing of a formal claim or of a lawsuit, the health plan 
 42.22  company must participate. 
 42.23     (b) If an enrollee, health care provider, or applicant for 
 42.24  network provider status chooses to use a an alternative dispute 
 42.25  resolution process after the filing of a lawsuit, the health 
 42.26  plan company must participate in dispute resolution, including, 
 42.27  but not limited to, alternative dispute resolution under rule 
 42.28  114 of the Minnesota general rules of practice. 
 42.29     (c) The commissioners of health and commerce shall inform 
 42.30  and educate health plan companies' enrollees about alternative 
 42.31  dispute resolution and its benefits, and shall establish 
 42.32  appropriate cost-sharing requirements for parties taking part in 
 42.33  alternative dispute resolution. 
 42.34     (d) A health plan company may encourage but not require an 
 42.35  enrollee to submit a complaint to alternative dispute resolution.
 42.36     Sec. 30.  [62Q.145] [ABORTION AND SCOPE OF PRACTICE.] 
 43.1      Health plan company policies related to scope of practice 
 43.2   for allied independent health providers as defined in section 
 43.3   62Q.095, subdivision 5, midlevel practitioners as defined in 
 43.4   section 136A.1356, subdivision 1, and other nonphysician health 
 43.5   care professionals must comply with the requirements governing 
 43.6   the performance of abortions in section 145.412, subdivision 1. 
 43.7      Sec. 31.  Minnesota Statutes 1994, section 62Q.19, is 
 43.8   amended to read: 
 43.9      62Q.19 [ESSENTIAL COMMUNITY PROVIDERS.] 
 43.10     Subdivision 1.  [DESIGNATION.] The commissioner shall 
 43.11  designate essential community providers.  The criteria for 
 43.12  essential community provider designation shall be the following: 
 43.13     (1) a demonstrated ability to integrate applicable 
 43.14  supportive and stabilizing services with medical care for 
 43.15  uninsured persons and high-risk and special needs populations as 
 43.16  defined in section 62Q.07, subdivision 2, paragraph (e), 
 43.17  underserved, and other special needs populations; and 
 43.18     (2) a commitment to serve low-income and underserved 
 43.19  populations by meeting the following requirements: 
 43.20     (i) has nonprofit status in accordance with chapter 317A; 
 43.21     (ii) has tax exempt status in accordance with the Internal 
 43.22  Revenue Service Code, section 501(c)(3); 
 43.23     (iii) charges for services on a sliding fee schedule based 
 43.24  on current poverty income guidelines; and 
 43.25     (iv) does not restrict access or services because of a 
 43.26  client's financial limitation; or 
 43.27     (3) status as a local government unit as defined in section 
 43.28  62D.02, subdivision 11, or community health board as defined in 
 43.29  chapter 145A.  
 43.30     Prior to designation, the commissioner shall publish the 
 43.31  names of all applicants in the State Register.  The public shall 
 43.32  have 30 days from the date of publication to submit written 
 43.33  comments to the commissioner on the application.  No designation 
 43.34  shall be made by the commissioner until the 30-day period has 
 43.35  expired. 
 43.36     The commissioner may designate an eligible provider as an 
 44.1   essential community provider for all the services offered by 
 44.2   that provider or for specific services designated by the 
 44.3   commissioner. 
 44.4      For the purpose of this subdivision, supportive and 
 44.5   stabilizing services include at a minimum, transportation, child 
 44.6   care, cultural, and linguistic services where appropriate. 
 44.7      Subd. 2.  [APPLICATION.] (a) Any provider may apply to the 
 44.8   commissioner for designation as an essential community 
 44.9   provider by submitting an application form developed by the 
 44.10  commissioner.  Applications must be accepted within two years 
 44.11  after the effective date of the rules adopted by the 
 44.12  commissioner to implement this section. 
 44.13     (b) Each application submitted must be accompanied by an 
 44.14  application fee in an amount determined by the commissioner.  
 44.15  The fee shall be no more than what is needed to cover the 
 44.16  administrative costs of processing the application. 
 44.17     (c) The name, address, contact person, and the date by 
 44.18  which the commissioner's decision is expected to be made shall 
 44.19  be classified as public data under section 13.41.  All other 
 44.20  information contained in the application form shall be 
 44.21  classified as private data under section 13.41 until the 
 44.22  application has been approved, approved as modified, or denied 
 44.23  by the commissioner.  Once the decision has been made, all 
 44.24  information shall be classified as public data unless the 
 44.25  applicant designates and the commissioner determines that the 
 44.26  information contains trade secret information. 
 44.27     Subd 2a.  [DEFINITION OF HEALTH PLAN COMPANY.] For purposes 
 44.28  of this section, "health plan company" means a health plan 
 44.29  company as defined in section 62Q.01 with more than 50,000 
 44.30  enrollees. 
 44.31     Subd. 3.  [HEALTH PLAN COMPANY AFFILIATION.] A health plan 
 44.32  company must offer a provider contract to any designated 
 44.33  essential community provider located within the area served by 
 44.34  the health plan company.  A health plan company shall not 
 44.35  restrict enrollee access to the essential community provider for 
 44.36  the population that the essential community provider is 
 45.1   certified to serve.  A health plan company may also make other 
 45.2   providers available to this same population for these services.  
 45.3   A health plan company may require an essential community 
 45.4   provider to meet all data requirements, utilization review, and 
 45.5   quality assurance requirements on the same basis as other health 
 45.6   plan providers.  
 45.7      Subd. 4.  [ESSENTIAL COMMUNITY PROVIDER RESPONSIBILITIES.] 
 45.8   Essential community providers must agree to serve enrollees of 
 45.9   all health plan companies operating in the area that in which 
 45.10  the essential community provider is certified to serve located. 
 45.11     Subd. 5.  [CONTRACT PAYMENT RATES.] An essential community 
 45.12  provider and a health plan company may negotiate the payment 
 45.13  rate for covered services provided by the essential community 
 45.14  provider.  This rate must be competitive with rates paid to 
 45.15  other health plan providers the same rate per unit of service as 
 45.16  is paid to other health plan providers for the same or similar 
 45.17  services. 
 45.18     Subd. 5a.  [COOPERATION.] Each health plan company and 
 45.19  essential community provider shall cooperate to facilitate the 
 45.20  use of the essential community provider by the high risk and 
 45.21  special needs populations.  This includes cooperation on the 
 45.22  submission and processing of claims, sharing of all pertinent 
 45.23  records and data, including performance indicators and specific 
 45.24  outcomes data, and the use of all dispute resolution methods as 
 45.25  defined in section 62Q.11, subdivision 1. 
 45.26     Subd. 5b.  [ENFORCEMENT.] For any violation of this section 
 45.27  or any rule applicable to an essential community provider, the 
 45.28  commissioner may suspend, modify, or revoke an essential 
 45.29  community provider designation.  The commissioner may also use 
 45.30  the enforcement authority specified in section 62D.17. 
 45.31     Subd. 6.  [TERMINATION.] The designation as an essential 
 45.32  community provider is terminated terminates five years after it 
 45.33  is granted, and.  Once the designation terminates, the former 
 45.34  essential community provider has no rights or privileges beyond 
 45.35  those of any other health care provider.  The commissioner shall 
 45.36  make a recommendation to the legislature on whether an essential 
 46.1   community provider designation should be longer than five years. 
 46.2      Subd. 7.  [RECOMMENDATIONS AND RULEMAKING ON ESSENTIAL 
 46.3   COMMUNITY PROVIDERS.] (a) As part of the implementation plan due 
 46.4   January 1, 1995, the commissioner shall present proposed rules 
 46.5   and any necessary recommendations for legislation for defining 
 46.6   essential community providers, using the criteria established 
 46.7   under subdivision 1, and defining the relationship between 
 46.8   essential community providers and health plan companies. 
 46.9      (b) By January 1, 1996, the commissioner shall adopt rules 
 46.10  for establishing essential community providers and for governing 
 46.11  their relationship with health plan companies.  The commissioner 
 46.12  shall also identify and address any conflict of interest issues 
 46.13  regarding essential community provider designation for local 
 46.14  governments. 
 46.15     Sec. 32.  [62Q.22] [STANDARD HEALTH COVERAGE.] 
 46.16     Subdivision 1.  [APPLICATION.] Effective July 1, 1997, all 
 46.17  health plan companies shall offer, sell, issue, or renew the 
 46.18  standard health coverage and two or more of the five 
 46.19  cost-sharing options established under this section, sections 
 46.20  62Q.23, 62Q.231, and 62Q.24.  In addition to other products 
 46.21  offered by health plan companies, supplemental coverage options 
 46.22  may be offered under section 62Q.25. 
 46.23     Subd. 2.  [GENERAL DESCRIPTION.] (a) The standard health 
 46.24  coverage must contain all appropriate and necessary health care 
 46.25  services.  For purposes of this section, "appropriate and 
 46.26  necessary care" includes health care services, supplies, and 
 46.27  equipment, which are required for prevention, diagnosis, or 
 46.28  treatment of an illness, injury, or health condition.  
 46.29  Appropriate and necessary care must: 
 46.30     (1) be appropriate in terms of frequency, type, level, 
 46.31  setting, and duration to the enrollee's mental and physical 
 46.32  condition; 
 46.33     (2) be cost effective in the context of either short-term 
 46.34  or long-term health outcomes; 
 46.35     (3) be consistent with accepted principles of professional 
 46.36  practice and practice parameters of the health care community in 
 47.1   Minnesota; and 
 47.2      (4) help assess, establish, improve, restore, maintain, or 
 47.3   prevent deterioration of the enrollee's physical or mental 
 47.4   condition or prevent the reasonable likelihood of the onset of a 
 47.5   health problem or detect an incipient problem. 
 47.6      (b) "Appropriate and necessary care" does not include 
 47.7   elective abortions.  For purposes of this section, an "abortion" 
 47.8   means the use or prescription of any instrument, medicine, drug, 
 47.9   or any other substance or device intentionally to terminate the 
 47.10  pregnancy of a woman known to be pregnant with an intention 
 47.11  other than to increase the probability of a live birth, to 
 47.12  preserve the life or health of the child after live birth, or to 
 47.13  remove a dead unborn child.  For purposes of this section, an 
 47.14  "elective abortion" means an abortion other than where, in the 
 47.15  professional judgment of the attending physician, which is a 
 47.16  medical judgment that would be made by a reasonably prudent 
 47.17  physician, knowledgeable about the case and the treatment 
 47.18  possibilities with respect to the medical conditions involved, 
 47.19  the life of the female would be endangered or substantial and 
 47.20  irreversible impairment of a major bodily function would result 
 47.21  if the fetus were carried to term; where the pregnancy is the 
 47.22  result of conduct which would constitute criminal sexual conduct 
 47.23  in the first, second or third degree committed with force or 
 47.24  violence, and the incident is reported within 48 hours after the 
 47.25  victim becomes physically able to report the rape; or where the 
 47.26  pregnancy is the result of incest and the incident and relative 
 47.27  are reported to a valid law enforcement agency prior to the 
 47.28  abortion.  Neither section 62N.17 nor any other provision of 
 47.29  this act may be construed to require coverage for elective 
 47.30  abortions.  This paragraph is inseverable from this section and 
 47.31  from sections 62Q.231, 62Q.24, and 62Q.25; if any sentence, 
 47.32  phrase, or word of this paragraph is determined by a final 
 47.33  nonappealable order or judgment of a court of competent 
 47.34  jurisdiction to be unconstitutional under the state or federal 
 47.35  constitution or in conflict with federal law, all remaining 
 47.36  portions of this section and of sections 62Q.231, 62Q.24, and 
 48.1   62Q.25 are void and are repealed.  If any sentence, phrase, or 
 48.2   word of this paragraph has been determined by a court of 
 48.3   competent jurisdiction to be unconstitutional under the state or 
 48.4   federal constitution or in conflict with federal law, and that 
 48.5   determination is under appeal to another court or the time 
 48.6   allowed for appeal has not expired, all remaining portions of 
 48.7   this section and of sections 62Q.231, 62Q.24, and 62Q.25 are not 
 48.8   enforceable during any period of time in which any sentence, 
 48.9   phrase, or word of this paragraph is not enforceable.  With 
 48.10  respect to section 62Q.25, the inseverability applies to the 
 48.11  amendments made to that section in this act and to that section 
 48.12  as it exists in Minnesota Statutes 1994. 
 48.13     Subd. 3.  [COVERAGE.] The standard health coverage must 
 48.14  include, at a minimum, all comprehensive health maintenance 
 48.15  services provided by health maintenance organizations under 
 48.16  section 62D.02, subdivision 7, and Minnesota Rules, part 
 48.17  4685.0100, subpart 5, and all services required to be provided 
 48.18  by health maintenance organizations in chapters 62A and 62D.  
 48.19  The standard health coverage must be further defined by the 
 48.20  standard exclusions developed under section 62Q.231, subdivision 
 48.21  1, and the cost-sharing options provided in section 62Q.24.  The 
 48.22  standard health coverage does not include elective abortions, as 
 48.23  defined in subdivision 2. 
 48.24     Subd. 4.  [DEFINING STANDARD COVERAGE.] The commissioners 
 48.25  of health and commerce may further define the standard coverage 
 48.26  required under this section.  If the commissioners choose to 
 48.27  further define this coverage, the commissioners shall publish 
 48.28  the proposed definition of standard coverage in the State 
 48.29  Register and allow a public comment period of at least 60 days 
 48.30  prior to the publication of the final definition of standard 
 48.31  coverage.  The Minnesota health care commission shall provide 
 48.32  comments to the commissioners of health and commerce on the 
 48.33  proposed definition within 60 days of publication.  Each 
 48.34  regional coordinating board shall convene a public hearing and 
 48.35  provide summary comments to the commissioners within 60 days of 
 48.36  publication.  The commissioners of health and commerce shall 
 49.1   publish the final definition of standard coverage in the state 
 49.2   register by January 31, 1996.  The definition of standard 
 49.3   coverage shall become effective July 1, 1997, and shall apply to 
 49.4   all policies and contracts issued or renewed after that date 
 49.5   unless the legislature affirmatively acts to prevent the 
 49.6   definition of standard coverage from taking effect.  Development 
 49.7   of this definition of standard coverage is not subject to 
 49.8   chapter 14 or to administrative appeal. 
 49.9      Subd. 5.  [CHEMICAL DEPENDENCY.] All health plan companies 
 49.10  shall use the assessment criteria in Minnesota Rules, parts 
 49.11  9530.6600 to 9530.6660, when assessing and placing enrollees for 
 49.12  chemical dependency treatment. 
 49.13     Sec. 33.  [62Q.231] [STANDARD EXCLUSIONS.] 
 49.14     Subdivision 1.  [DEVELOPMENT.] The commissioners of health, 
 49.15  human services, commerce, and employee relations shall jointly 
 49.16  develop the standard exclusions to be used by all health plan 
 49.17  companies.  The commissioners may convene technical experts to 
 49.18  advise them in developing the standard exclusions. 
 49.19     Subd. 2.  [PUBLICATION.] The commissioner of health shall 
 49.20  publish the proposed standard exclusions in the State Register 
 49.21  and allow a public comment period of at least 60 days prior to 
 49.22  publication of the final standard exclusions.  The Minnesota 
 49.23  health care commission shall provide comments to the 
 49.24  commissioners of health, human services, commerce, and employee 
 49.25  relations on the proposed standard exclusions within 60 days of 
 49.26  publication.  Each regional coordinating board shall convene a 
 49.27  public hearing and provide summary comments to the commissioners 
 49.28  of health, human services, commerce, and employee relations on 
 49.29  the proposed standard exclusions within 60 days of publication.  
 49.30  The commissioners of health, human services, commerce, and 
 49.31  employee relations shall review all comments received.  The 
 49.32  commissioner of health shall publish the final standard 
 49.33  exclusions in the State Register by January 31, 1996.  The 
 49.34  standard exclusions shall become effective on July 1, 1997, and 
 49.35  shall apply to all policies and contracts issued or renewed on 
 49.36  or after that date unless the legislature affirmatively acts to 
 50.1   prevent the standard exclusions from taking effect. 
 50.2      Subd. 3.  [EXEMPTION.] Development of the standard 
 50.3   exclusions is not subject to chapter 14 or to administrative 
 50.4   appeal. 
 50.5      Sec. 34.  [62Q.24] [COST-SHARING OPTIONS.] 
 50.6      Subdivision 1.  [GENERAL.] (a) Health plan companies shall 
 50.7   offer the standard health coverage under two or more of the five 
 50.8   cost-sharing options allowed by this section.  
 50.9      (b) All out-of-area emergency and urgent care services are 
 50.10  subject to the same cost-sharing options as in-network emergency 
 50.11  and urgent care services.  Urgent care cost-sharing must apply 
 50.12  to out-of-network emergency room services that could have been 
 50.13  delivered at an urgent care facility had one been available 
 50.14  through the health plan company.  Cost-sharing for emergency 
 50.15  room services must not apply when those services result in a 
 50.16  hospital admission.  
 50.17     (c) No coverage for organ transplants shall be provided if 
 50.18  received out-of-network, and the amounts paid do not count 
 50.19  toward the deductible and out-of-pocket limits.  
 50.20     (d) No cost-sharing shall be applied to child health 
 50.21  supervision services, child primary care services delivered in 
 50.22  outpatient settings, and prenatal care services.  For purposes 
 50.23  of this section, "child health supervision services" means 
 50.24  pediatric preventive services, appropriate immunizations, 
 50.25  developmental assessments, and laboratory services appropriate 
 50.26  to the age of the child from birth to age 18 as defined by the 
 50.27  standards of child health care issued by the American Academy of 
 50.28  Pediatrics.  "Prenatal care services" means the comprehensive 
 50.29  package of medical and psychological support provided throughout 
 50.30  the pregnancy, including risk assessment, serial surveillance, 
 50.31  prenatal education, and use of specialized skills and 
 50.32  technology, when needed, as defined by Standards for 
 50.33  Obstetric-Gynecologic Services issued by the American College of 
 50.34  Obstetricians and Gynecologists. 
 50.35     (e) Notwithstanding any other law to the contrary, 
 50.36  cost-sharing requirements and benefit or service limitations for 
 51.1   outpatient mental health and outpatient chemical dependency 
 51.2   services, except for persons placed in chemical dependency 
 51.3   services under Minnesota Rules, parts 9530.6600 to 9530.6660, 
 51.4   must not place a greater financial burden on the insured or 
 51.5   enrollee, or be more restrictive than those requirements and 
 51.6   limitations for outpatient medical services. 
 51.7      (f) Notwithstanding any other law to the contrary, 
 51.8   cost-sharing requirements and benefit or service limitations for 
 51.9   inpatient hospital mental health and inpatient hospital and 
 51.10  residential chemical dependency services, except for persons 
 51.11  placed in chemical dependency services under Minnesota Rules, 
 51.12  parts 9530.6600 to 9530.6660, must not place a greater financial 
 51.13  burden on the insured or enrollee, or be more restrictive than 
 51.14  those requirements and limitations for inpatient hospital 
 51.15  medical services. 
 51.16     Subd. 2.  [COINSURANCE COST-SHARING; OPTION 
 51.17  ONE.] Cost-sharing option one limits the calendar year 
 51.18  deductible amount per person to $2,000, including both in- and 
 51.19  out-of-network services, except as otherwise provided in 
 51.20  subdivision 1, with the health plan company paying 80 percent 
 51.21  and the enrollee paying 20 percent coinsurance, unless otherwise 
 51.22  provided in this subdivision.  The out-of-pocket limit is $5,000 
 51.23  per person per calendar year not to exceed a total of $10,000 
 51.24  per family per calendar year, including both in- and 
 51.25  out-of-network services, except as otherwise provided in 
 51.26  subdivision 1.  Services are subject to the following copayment 
 51.27  and coinsurance requirements: 
 51.28     (1) there is a $10 copayment for: 
 51.29     (i) age and risk appropriate routine examinations over age 
 51.30  18; 
 51.31     (ii) health education and counseling; 
 51.32     (iii) vision and hearing exams; and 
 51.33     (iv) mental health and chemical dependency assessment or 
 51.34  diagnosis; and 
 51.35     (2) out-of-network services are subject to 40 percent 
 51.36  coinsurance or twice the applicable in-network copayment, 
 52.1   whichever is greater. 
 52.2      Subd. 3.  [COINSURANCE COST-SHARING; OPTION 
 52.3   TWO.] Cost-sharing option two is the same as cost-sharing option 
 52.4   one, except that there is no cost sharing for age and risk 
 52.5   appropriate routine examinations over the age 18, adult 
 52.6   screening, and postnatal care. 
 52.7      Subd. 4.  [COINSURANCE COST-SHARING; OPTION THREE.] 
 52.8   Cost-sharing option three limits the calendar year deductible 
 52.9   amount per person to $1,000, including both in- and 
 52.10  out-of-network services, with health plan companies paying 80 
 52.11  percent and the enrollee paying 20 percent coinsurance, unless 
 52.12  otherwise provided in this subdivision.  The out-of-pocket limit 
 52.13  is $3,000 per person per calendar year, not to exceed a total of 
 52.14  $5,000 per family per calendar year, including both in- and 
 52.15  out-of-network services.  Services are subject to the following 
 52.16  coinsurance requirements: 
 52.17     (1) no cost sharing for the services listed in subdivision 
 52.18  3; and 
 52.19     (2) out-of-nework services are subject to 40 percent 
 52.20  coinsurance or twice the applicable in-network copayment, 
 52.21  whichever is greater. 
 52.22     Subd. 5.  [COPAYMENT COST-SHARING; OPTION 
 52.23  FOUR.] Cost-sharing option four limits the calendar year 
 52.24  deductible amount per person to $500 for out-of-network services 
 52.25  only, and otherwise provides 100 percent coverage, unless 
 52.26  otherwise provided in this subdivision.  The out-of-pocket limit 
 52.27  is $750 per person per calendar year, not to exceed a total of 
 52.28  $2,250 per family per calendar year, including both in- and 
 52.29  out-of-network services.  Services are subject to the following 
 52.30  copayment and coinsurance requirements: 
 52.31     (1) a $5 per day copayment for day treatment and partial 
 52.32  hospitalization for chemical dependency and mental health 
 52.33  services; 
 52.34     (2) a $10 copayment for health professional office visits 
 52.35  and physician's office surgery; 
 52.36     (3) a $12 copayment for pharmaceuticals and disposable 
 53.1   medical supplies.  Health plan companies may lower the copayment 
 53.2   for generic brand pharmaceuticals; 
 53.3      (4) a $20 copayment for urgent care visits; 
 53.4      (5) a $30 per week copayment for nutritional products for 
 53.5   metabolic disorders or for nutritional supplementation because 
 53.6   solid food or nutrients thereof cannot be properly absorbed by 
 53.7   the body; 
 53.8      (6) a $75 copayment for emergency room care where there is 
 53.9   no hospital admission; 
 53.10     (7) a $100 copayment per admission for medical services, 
 53.11  inpatient hospital services, inpatient chemical dependency care 
 53.12  (hospital and residential), and inpatient mental health care 
 53.13  (hospital and residential); 
 53.14     (8) out-of-network services are subject to 20 percent 
 53.15  coinsurance or twice the applicable in-network copayment, 
 53.16  whichever is greater; and 
 53.17     (9) no cost sharing for services listed in subdivision 3. 
 53.18     Subd. 6.  [COPAYMENT COST-SHARING; OPTION 
 53.19  FIVE.] Cost-sharing option five shall limit the calendar year 
 53.20  deductible amount to $300 per person for out-of-network services 
 53.21  only, and otherwise provide 100 percent coverage, unless 
 53.22  otherwise provided in this subdivision.  The out-of-pocket limit 
 53.23  is $500 per person per calendar year, not to exceed a total of 
 53.24  $1,500 per family per calendar year, including both in-network 
 53.25  and out-of-network services.  Services are subject to the 
 53.26  following copayment and coinsurance requirements: 
 53.27     (1) an $8 copayment for pharmaceuticals and disposable 
 53.28  medical supplies.  Health plan companies may reduce the 
 53.29  copayment for generic brand pharmaceuticals; 
 53.30     (2) a $15 copayment for urgent care visits; 
 53.31     (3) a $30 per week copayment for nutritional products for 
 53.32  metabolic disorders or for nutritional supplementation because 
 53.33  solid food or nutrients thereof cannot be properly absorbed by 
 53.34  the body; 
 53.35     (4) a $35 copayment for emergency room care where there is 
 53.36  no hospital admission; 
 54.1      (5) out-of-network services are subject to 20 percent 
 54.2   coinsurance or twice the applicable in-network copayment, 
 54.3   whichever is greater; and 
 54.4      (6) no cost sharing for services listed in subdivision 3. 
 54.5      Subd. 7.  [LIMITATION ON COPAYMENTS.] Where a copayment is 
 54.6   assessed for an office visit in cost-sharing options four and 
 54.7   five, any additional services pertaining to and provided at the 
 54.8   same office visit are not subject to additional copayments. 
 54.9      Sec. 35.  Minnesota Statutes 1994, section 62Q.25, is 
 54.10  amended to read: 
 54.11     62Q.25 [SUPPLEMENTAL COVERAGE.] 
 54.12     Subdivision 1.  [AVAILABLE POLICIES.] Health plan companies 
 54.13  may choose to offer separate supplemental coverage for services 
 54.14  not covered under the universal benefits set standard health 
 54.15  coverage, including separate coverage for dental services.  
 54.16  Notwithstanding any other provision of law, health plan 
 54.17  companies may also choose to offer a back-up supplemental health 
 54.18  policy as defined below.  Health plan companies may offer any 
 54.19  Medicare supplement, Medicare select, or other Medicare-related 
 54.20  product otherwise permitted for any type of health plan company 
 54.21  in this state.  Each Medicare-related product may be offered 
 54.22  only in full compliance with the requirements in chapters 62A, 
 54.23  62D, and 62E that apply to that category of product.  Health 
 54.24  plan companies offering supplemental coverage shall distinguish 
 54.25  the cost of the standard health coverage from the cost of each 
 54.26  supplemental coverage policy offered when either soliciting 
 54.27  enrollment of or seeking payment from enrollees. 
 54.28     Subd. 2.  [BACK-UP SUPPLEMENTAL HEALTH BENEFIT POLICY.] The 
 54.29  term "back-up supplemental health benefit policy" means an 
 54.30  unlimited choice of provider plan offered on a regional or 
 54.31  multiregional basis, which provides under circumstances 
 54.32  specified by the policy, coverage for some or all services and 
 54.33  items included in the standard health coverage established under 
 54.34  chapter 62Q or 62E, in individual cases when, although offered 
 54.35  as a legitimate treatment by a physician, they are denied by the 
 54.36  insurer or the health plan company or the utilization review 
 55.1   organization on the ground that the service or item is not 
 55.2   medically necessary or appropriate, on the ground that the 
 55.3   service or item is inconsistent with medically appropriate 
 55.4   guidelines or practice parameters, or on other grounds under 
 55.5   which denial of an item or service covered by the standard 
 55.6   health coverage is permitted. 
 55.7      Sec. 36.  [62Q.26] [POINT-OF-SERVICE OPTION.] 
 55.8      Subdivision 1.  [DEFINITION.] For purposes of this section, 
 55.9   "point-of-service product" means a health plan, as defined in 
 55.10  section 62A.011, under which the health plan company will 
 55.11  reimburse in accordance with the terms of the policy or 
 55.12  certificate any appropriately licensed or registered provider 
 55.13  for providing any covered services to an enrollee, without 
 55.14  regard to whether the provider belongs to a particular network 
 55.15  and without regard to whether the enrollee was referred to the 
 55.16  provider by another provider.  For purposes of this definition, 
 55.17  a health plan offered by a health plan company is a 
 55.18  point-of-service product only if it includes "comprehensive 
 55.19  supplemental benefits" in compliance with section 62D.05, 
 55.20  subdivision 6, and Minnesota Rules, part 4685.1955. 
 55.21     Subd. 2.  [REQUIRED POINT-OF-SERVICE OPTION.] Each health 
 55.22  plan company operating in the individual, small group, or large 
 55.23  group market shall offer at least one point-of-service product 
 55.24  as one of the cost-sharing options required under section 62Q.24.
 55.25     Subd. 3.  [RATE APPROVAL.] The premium rates for each 
 55.26  point-of-service product must be submitted for approval to the 
 55.27  commissioner of health or the commissioner of commerce, as 
 55.28  required under chapters 62A, 62C, 62D, and 62L.  The applicable 
 55.29  commissioner shall approve premium rates that are actuarially 
 55.30  justified.  Cost sharing requirements must meet the 
 55.31  out-of-network service requirements that are required under the 
 55.32  applicable cost sharing option. 
 55.33     Subd. 4.  [OUT-OF-NETWORK OPTION FOR DENTAL PLANS.] (a) 
 55.34  This subdivision applies to health plan companies, as defined in 
 55.35  section 62Q.01, offering separate coverage for dental benefits 
 55.36  that require enrollees to receive their dental care services 
 56.1   from a provider in a particular network, as part of a health 
 56.2   plan as defined in section 62A.011 or as part of health coverage 
 56.3   described in section 62A.011, subdivision 3, clause (6). 
 56.4      (b) Each health plan company described in paragraph (a) 
 56.5   shall offer an out-of-network option for dental coverage to all 
 56.6   purchasers of group health plans who contribute at least 50 
 56.7   percent toward the cost of coverage.  The out-of-network option 
 56.8   must allow enrollees to receive dental care treatment from 
 56.9   providers outside of the plan's network.  A health plan company 
 56.10  offering dental benefits may charge different premiums and may 
 56.11  apply different cost-sharing requirements to enrollees who 
 56.12  choose the out-of-network option. 
 56.13     Subd. 5.  [EXEMPTION.] This section applies only to health 
 56.14  plan companies with more than 50,000 enrollees. 
 56.15     Sec. 37.  Minnesota Statutes 1994, section 62Q.32, is 
 56.16  amended to read: 
 56.17     62Q.32 [LOCAL OMBUDSPERSON.] 
 56.18     County board or community health service agencies may 
 56.19  establish an office of ombudsperson to provide a system of 
 56.20  consumer advocacy for persons receiving health care services 
 56.21  through a health plan company.  The ombudsperson's functions may 
 56.22  include, but are not limited to: 
 56.23     (a) mediation or advocacy on behalf of a person accessing 
 56.24  the complaint and appeal procedures to ensure that necessary 
 56.25  medical services are provided by the health plan company; and 
 56.26     (b) investigation of the quality of services provided to a 
 56.27  person and determine the extent to which quality assurance 
 56.28  mechanisms are needed or any other system change may be needed.  
 56.29  The commissioner of health shall make recommendations for 
 56.30  funding these functions including the amount of funding needed 
 56.31  and a plan for distribution.  The commissioner shall submit 
 56.32  these recommendations to the legislative commission on health 
 56.33  care access by January 15, 1996. 
 56.34     Sec. 38.  Minnesota Statutes 1994, section 62Q.33, 
 56.35  subdivision 4, is amended to read: 
 56.36     Subd. 4.  [CAPACITY BUILDING, ACCOUNTABILITY AND FUNDING.] 
 57.1   The recommendations required by subdivision 2 shall include: 
 57.2      (1) a definition of minimum outcomes for implementing core 
 57.3   public health functions, including a local ombudsperson under 
 57.4   the assurance of services function; 
 57.5      (2) the identification of counties and applicable cities 
 57.6   with public health programs that need additional assistance to 
 57.7   meet the minimum outcomes; 
 57.8      (3) a budget for supporting all functions needed to achieve 
 57.9   the minimum outcomes, including the local ombudsperson assurance 
 57.10  of services function; 
 57.11     (4) an analysis of the costs and benefits expected from 
 57.12  achieving the minimum outcomes; 
 57.13     (5) strategies for improving local government public health 
 57.14  functions throughout the state to meet the minimum outcomes 
 57.15  including:  (i) funding distribution for local government public 
 57.16  health functions necessary to meet the minimum outcomes; and (ii)
 57.17  strategies for the financing of personal health care services 
 57.18  within the uniform benefits set through the health plan 
 57.19  companies and identifying appropriate mechanisms for the 
 57.20  delivery of these services; and 
 57.21     (6) a recommended level of dedicated funding for local 
 57.22  government public health functions in terms of a percentage of 
 57.23  total health service expenditures by the state or in terms of a 
 57.24  per capita basis, including methods of allocating the dedicated 
 57.25  funds to local government.  Funding recommendations must be 
 57.26  broad-based and must consider all financial resources. 
 57.27     Sec. 39.  Minnesota Statutes 1994, section 62Q.33, 
 57.28  subdivision 5, is amended to read: 
 57.29     Subd. 5.  [TIMELINE.] (a) By October 1, 1994, the 
 57.30  commissioner shall submit to the legislative commission on 
 57.31  health care access the initial report and recommendations 
 57.32  required by subdivisions 2 to 4. 
 57.33     (b) By February January 15, 1995 1996, the 
 57.34  commissioner, in cooperation with the legislative commission on 
 57.35  health care access, shall submit a final report to the 
 57.36  legislature, with specific recommendations for capacity building 
 58.1   and financing to be implemented over the period from January 1, 
 58.2   1996, through December 31, 1997. 
 58.3      (c) By January 1 15, 1997, and by January 1 15 of each 
 58.4   odd-numbered year thereafter, the commissioner shall present to 
 58.5   the legislature an updated report and recommendations. 
 58.6      Sec. 40.  [62Q.42] [OPEN ACCESS TO UNIVERSITY OF MINNESOTA 
 58.7   HOSPITAL AND CLINICS.] 
 58.8      This section is intended to provide an adequate patient 
 58.9   base for hospitals and clinics affiliated with the University of 
 58.10  Minnesota, in order to ensure that these facilities continue to 
 58.11  provide:  (1) high quality patient care; and (2) high quality 
 58.12  research and training opportunities for health care 
 58.13  professionals. 
 58.14     Sec. 41.  [STUDY.] 
 58.15     The MinnesotaCare finance division of the health and human 
 58.16  services committee of the house of representatives shall study 
 58.17  and report to the health and human services committee prior to 
 58.18  the 1996 session of the legislature on whether the intent 
 58.19  expressed in Minnesota Statutes, section 62Q.42, is being 
 58.20  carried out. 
 58.21     Sec. 42.  [62Q.43] [GEOGRAPHIC ACCESS.] 
 58.22     Subdivision 1.  [CLOSED-PANEL HEALTH PLAN.] For purposes of 
 58.23  this section, "closed-panel health plan" means a health plan as 
 58.24  defined in section 62Q.01 that requires an enrollee to receive 
 58.25  all or a majority of primary care services from a specific 
 58.26  clinic or physician designated by the enrollee that is within 
 58.27  the health plan company's clinic or physician network. 
 58.28     Subd. 2.  [ACCESS REQUIREMENT.] Every closed-panel health 
 58.29  plan must allow enrollees who are full-time students under the 
 58.30  age of 25 years to change their designated clinic or physician 
 58.31  at least once per month, as long as the clinic or physician is 
 58.32  part of the health plan company's statewide clinic or physician 
 58.33  network.  A health plan company shall not charge enrollees who 
 58.34  choose this option higher premiums or cost-sharing than would 
 58.35  otherwise apply to enrollees who do not choose this option.  A 
 58.36  health plan company may require enrollees to provide 15 days 
 59.1   written notice of intent to change their designated clinic or 
 59.2   physician. 
 59.3      Sec. 43.  [62Q.45] [COVERAGE FOR OUT-OF-AREA PRIMARY CARE.] 
 59.4      Subdivision 1.  [STUDY.] The commissioner of health shall 
 59.5   develop methods to allow enrollees of managed care organizations 
 59.6   to obtain primary care health services outside of the service 
 59.7   area of their managed care organization, from health care 
 59.8   providers who are employed by or under contract with another 
 59.9   managed care organization.  The commissioner shall make 
 59.10  recommendations on:  (1) whether this out-of-area primary care 
 59.11  coverage should be available to students and/or other enrollees 
 59.12  without additional premium charges or cost-sharing; (2) methods 
 59.13  to coordinate the services provided by different managed care 
 59.14  organizations; (3) methods to manage the quality of care 
 59.15  provided by different managed care organizations and monitor 
 59.16  health care outcomes; (4) methods to reimburse managed care 
 59.17  organizations for care provided to enrollees of other managed 
 59.18  care organizations; and (5) other issues relevant to the design 
 59.19  and administration of out-of-area primary care coverage.  The 
 59.20  commissioner shall present recommendations to the legislature by 
 59.21  January 15, 1996. 
 59.22     Subd. 2.  [DEFINITION.] For purposes of this section, 
 59.23  "managed care organization" means:  (1) a health maintenance 
 59.24  organization operating under chapter 62D; (2) a community 
 59.25  integrated service network as defined under section 62N.02, 
 59.26  subdivision 4a; (3) an integrated service network as defined 
 59.27  under section 62N.02, subdivision 8; or (4) an insurance company 
 59.28  licensed under chapter 60A, nonprofit health service plan 
 59.29  corporation operating under chapter 62C, fraternal benefit 
 59.30  society operating under chapter 64B, or any other health plan 
 59.31  company, to the extent that it covers health care services 
 59.32  delivered to Minnesota residents through a preferred provider 
 59.33  organization or a network of selected providers. 
 59.34     Sec. 44.  [62Q.47] [MENTAL HEALTH AND CHEMICAL DEPENDENCY 
 59.35  SERVICES.] 
 59.36     (a) All health plans, as defined in section 62Q.01, that 
 60.1   provide coverage for mental health or chemical dependency 
 60.2   services, must comply with the requirements of this section. 
 60.3      (b) Cost-sharing requirements and benefit or service 
 60.4   limitations for outpatient mental health and outpatient chemical 
 60.5   dependency services, except for persons placed in chemical 
 60.6   dependency services under Minnesota Rules, parts 9530.6600 to 
 60.7   9530.6660, must not place a greater financial burden on the 
 60.8   insured or enrollee, or be more restrictive than those 
 60.9   requirements and limitations for outpatient medical services. 
 60.10     (c) Cost-sharing requirements and benefit or service 
 60.11  limitations for inpatient hospital mental health and inpatient 
 60.12  hospital and residential chemical dependency services, except 
 60.13  for persons placed in chemical dependency services under 
 60.14  Minnesota Rules, parts 9530.6600 to 9530.6660, must not place a 
 60.15  greater financial burden on the insured or enrollee, or be more 
 60.16  restrictive than those requirements and limitations for 
 60.17  inpatient hospital medical services. 
 60.18     Sec. 45.  [SINGLE ENTRY POINT FOR COMPLAINTS.] 
 60.19     The commissioner of health shall study the feasibility of 
 60.20  establishing a single entry point within the health department 
 60.21  for consumer complaints about the quality and cost of health 
 60.22  care services, whether these services are delivered by 
 60.23  individual providers, health care facilities, or health plan 
 60.24  companies.  The commissioner shall present recommendations to 
 60.25  the legislature by February 1, 1996. 
 60.26     Sec. 46.  [CHEMICAL DEPENDENCY STANDARDS AND INCENTIVES.] 
 60.27     Subdivision 1.  [STANDARDS.] As part of the department of 
 60.28  human service's household survey of chemical dependency needs in 
 60.29  Minnesota, the commissioner of human services shall develop 
 60.30  utilization standards pertaining to the number of chemical 
 60.31  dependency treatment inpatient and outpatient referrals per 
 60.32  1,000 enrollees and lengths of stay that are needed for the 
 60.33  state to address chemical dependency treatment needs. 
 60.34     Subd. 2.  [INCENTIVES SYSTEM.] The commissioners of human 
 60.35  services and health shall develop recommendations for a 
 60.36  financial or other incentive system to provide an incentive for 
 61.1   health plan companies to meet the standards developed in 
 61.2   subdivision 1.  The commissioners shall recommend the standards 
 61.3   and incentives system to the legislature by January 15, 1997. 
 61.4      Sec. 47.  [COORDINATION BETWEEN ACUTE AND LONG-TERM CARE.] 
 61.5      Subdivision 1.  [GOAL.] The health care commission shall 
 61.6   examine the relationship between the acute and long-term care 
 61.7   systems in order to address fragmentation and cost shifting 
 61.8   between these two systems. 
 61.9      Subd. 2.  [PLAN.] The commission shall prepare a plan for a 
 61.10  process to bring about greater coordination between acute and 
 61.11  long-term care that would maximize quality, overcome cost 
 61.12  shifting, and contain overall costs. 
 61.13     (a) The commission's plan shall identify: 
 61.14     (1) concepts, issues, perceived problems, or concerns to be 
 61.15  addressed as part of a process to achieve greater coordination 
 61.16  and improved outcomes in acute and long-term care; 
 61.17     (2) a suitable process for addressing the issues in clause 
 61.18  (1), including adequate involvement of appropriate stakeholder 
 61.19  groups, persons receiving long-term care, and the public; and 
 61.20     (3) recommendations for appropriate relationships, division 
 61.21  of responsibilities, resources, and a timetable for the process 
 61.22  of achieving greater coordination between acute and long-term 
 61.23  care. 
 61.24     (b) The commission's plan shall address: 
 61.25     (1) the need for an appropriate framework for measuring and 
 61.26  comparing potential costs and benefits of proposals to improve 
 61.27  coordination between acute and long-term care; 
 61.28     (2) specific information needs and how the information will 
 61.29  be developed or obtained; 
 61.30     (3) the role of the commission and any changes or 
 61.31  modifications of the commission in assisting the process 
 61.32  described in the plan; and 
 61.33     (4) the degree to which the process of coordinating acute 
 61.34  and long-term care might be undertaken sequentially or 
 61.35  incrementally, with descriptions of any recommended steps in the 
 61.36  process. 
 62.1      (c) In developing the plan, the commission shall take 
 62.2   testimony from interested persons, review findings of previous 
 62.3   studies and reports, and consult with other state agencies and 
 62.4   organizations, including, but not limited to: 
 62.5      (1) adults with disabilities, parents or guardians of 
 62.6   children with disabilities, and groups representing children and 
 62.7   adults with a variety of disabilities; and 
 62.8      (2) facility based and home and community-based long-term 
 62.9   care providers. 
 62.10     (d) The commission's plan shall be reported to the 
 62.11  legislature by January 15, 1996. 
 62.12     Sec. 48.  [REPEALER; HMO ARBITRATION RULES.] 
 62.13     Minnesota Rules, part 4685.1700, subpart 1, item D, is 
 62.14  repealed. 
 62.15     Sec. 49.  [REPEALER.] 
 62.16     Minnesota Statutes 1994, sections 62Q.03, subdivisions 2, 
 62.17  3, 4, 5, and 11; 62Q.21; and 62Q.27, are repealed. 
 62.18     Sec. 50.  [EFFECTIVE DATE; MENTAL HEALTH AND CHEMICAL 
 62.19  DEPENDENCY COVERAGE.] 
 62.20     Section 39 is effective August 1, 1995, and applies to 
 62.21  health plans offered, issued, or renewed on or after that date. 
 62.22     Sec. 51.  [EFFECTIVE DATE.] 
 62.23     Sections 1 and 45 are effective January 1, 1996. 
 62.24     Section 42 is effective July 1, 1995, and applies to 
 62.25  closed-panel health plans offered, sold, issued, or renewed on 
 62.26  or after that date. 
 62.27                             ARTICLE 3 
 62.28                     REGULATED ALL-PAYER OPTION 
 62.29     Section 1.  Minnesota Statutes 1994, section 62J.017, is 
 62.30  amended to read: 
 62.31     62J.017 [IMPLEMENTATION TIMETABLE.] 
 62.32     The state seeks to complete the restructuring of the health 
 62.33  care delivery and financing system by July 1, 1997.  The 
 62.34  restructured system will have two options:  (1) integrated 
 62.35  service networks, which will be accountable for meeting state 
 62.36  cost containment, quality, and access standards; or (2) a 
 63.1   uniform set of price and utilization controls for all health 
 63.2   care services for Minnesota residents not provided through an 
 63.3   integrated service network.  Both systems will operate under the 
 63.4   state's growth limits and will be structured to promote 
 63.5   competition in the health care marketplace.  Beginning July 1, 
 63.6   1994, measures will be taken to increase the public 
 63.7   accountability of existing health plan companies, to promote the 
 63.8   development of small, community-based integrated service 
 63.9   networks, and to reduce administrative costs by standardizing 
 63.10  third-party billing forms and procedures and utilization review 
 63.11  requirements.  Voluntary formation of other integrated service 
 63.12  networks will begin after rules have been adopted, but not 
 63.13  before July 1, 1996.  Statutes and rules for the entire 
 63.14  restructured health care financing and delivery system must be 
 63.15  enacted or adopted by January 1, 1996, and a phase-in of the 
 63.16  all-payer reimbursement system must begin on that date.  By July 
 63.17  1, 1997, all health coverage must be regulated under integrated 
 63.18  service network or community integrated service network law 
 63.19  pursuant to chapter 62N or all-payer law pursuant to chapter 62P.
 63.20     Sec. 2.  Minnesota Statutes 1994, section 62J.03, 
 63.21  subdivision 7, is amended to read: 
 63.22     Subd. 7.  [IMPROVEMENT IN HEALTH OUTCOME.] "Improvement in 
 63.23  health outcome" means an improvement in patient clinical status, 
 63.24  and an improvement in patient quality-of-life status, as 
 63.25  measured by ability to function, ability to return to work, and 
 63.26  other variables or preservation of the patient's life. 
 63.27     Sec. 3.  Minnesota Statutes 1994, section 62J.04, 
 63.28  subdivision 1a, is amended to read: 
 63.29     Subd. 1a.  [ADJUSTED GROWTH LIMITS AND ENFORCEMENT.] (a) 
 63.30  The commissioner shall publish the final adjusted growth limit 
 63.31  in the State Register by January 31 of the year that the 
 63.32  expenditure limit is to be in effect.  The adjusted limit must 
 63.33  reflect the actual regional consumer price index for urban 
 63.34  consumers for the previous calendar year, and may deviate from 
 63.35  the previously published projected growth limits to reflect 
 63.36  differences between the actual regional consumer price index for 
 64.1   urban consumers and the projected Consumer Price Index for urban 
 64.2   consumers.  The commissioner shall report to the legislature by 
 64.3   February 15 of each year on the implementation of growth 
 64.4   limits.  This annual report shall describe the differences 
 64.5   between the projected increase in health care expenditures, the 
 64.6   actual expenditures based on data collected, and the impact and 
 64.7   validity of growth limits within the overall health care reform 
 64.8   strategy. 
 64.9      (b) The commissioner shall enforce limits on growth in 
 64.10  spending and revenues for integrated service networks and for 
 64.11  the regulated all-payer option health plan companies and 
 64.12  revenues for providers.  If the commissioner determines that 
 64.13  artificial inflation or padding of costs or prices has occurred 
 64.14  in anticipation of the implementation of growth limits, the 
 64.15  commissioner may adjust the base year spending totals or growth 
 64.16  limits or take other action to reverse the effect of the 
 64.17  artificial inflation or padding. 
 64.18     (c) The commissioner shall impose and enforce overall 
 64.19  limits on growth in revenues and spending for integrated service 
 64.20  networks health plan companies, with adjustments for changes in 
 64.21  enrollment, benefits, severity, and risks.  If an integrated 
 64.22  service network a health plan company exceeds the growth limits, 
 64.23  the commissioner may reduce future limits on growth in aggregate 
 64.24  premium revenues for that integrated service network by up to 
 64.25  the amount overspent.  If the integrated service network system 
 64.26  exceeds a systemwide spending limit, the commissioner may reduce 
 64.27  future limits on growth in premium revenues for the integrated 
 64.28  service network system by up to the amount overspent impose 
 64.29  financial penalties up to the amount exceeding the applicable 
 64.30  growth limit. 
 64.31     (d) The commissioner shall set prices, utilization 
 64.32  controls, and other requirements for the regulated all-payer 
 64.33  option to ensure that the overall costs of this system, after 
 64.34  adjusting for changes in population, severity, and risk, do not 
 64.35  exceed the growth limits.  If growth limits for a calendar year 
 64.36  are exceeded, the commissioner may reduce reimbursement rates or 
 65.1   otherwise recoup amounts exceeding the limit for all or part of 
 65.2   the next calendar year.  To the extent possible, the 
 65.3   commissioner may reduce reimbursement rates or otherwise recoup 
 65.4   amounts over the limit from individual providers who exceed the 
 65.5   growth limits. 
 65.6      (e) The commissioner, in consultation with the Minnesota 
 65.7   health care commission, shall research and make recommendations 
 65.8   to the legislature regarding the implementation of growth limits 
 65.9   for integrated service networks and the regulated all-payer 
 65.10  option.  The commissioner must consider both spending and 
 65.11  revenue approaches and will report on the implementation of the 
 65.12  interim limits as defined in sections 62P.04 and 62P.05.  The 
 65.13  commissioner must examine and make recommendations on the use of 
 65.14  annual update factors based on volume performance standards as a 
 65.15  mechanism for achieving controls on spending in the all-payer 
 65.16  option.  The commissioner must make recommendations regarding 
 65.17  the enforcement mechanism and must consider mechanisms to adjust 
 65.18  future growth limits as well as mechanisms to establish 
 65.19  financial penalties for noncompliance.  The commissioner must 
 65.20  also address the feasibility of systemwide limits imposed on all 
 65.21  integrated service networks. 
 65.22     (f) The commissioner shall report to the legislative 
 65.23  commission on health care access by December 1, 1994, on trends 
 65.24  in aggregate spending and premium revenue for health plan 
 65.25  companies.  The commissioner shall use data submitted under 
 65.26  section 62P.04 and other available data to complete this report. 
 65.27     Sec. 4.  Minnesota Statutes 1994, section 62J.09, 
 65.28  subdivision 1a, is amended to read: 
 65.29     Subd. 1a.  [DUTIES RELATED TO COST CONTAINMENT.] (a) [ 
 65.30  ALLOCATION OF REGIONAL SPENDING LIMITS.] Regional coordinating 
 65.31  boards may advise the commissioner regarding allocation of 
 65.32  annual regional limits on the rate of growth for providers in 
 65.33  the regulated all-payer option in order to: 
 65.34     (1) achieve communitywide and regional public health goals 
 65.35  consistent with those established by the commissioner; and 
 65.36     (2) promote access to and equitable reimbursement of 
 66.1   preventive and primary care providers. 
 66.2      (b)  [TECHNICAL ASSISTANCE.] Regional coordinating boards, 
 66.3   in cooperation with the commissioner, shall provide technical 
 66.4   assistance to parties interested in establishing or operating a 
 66.5   community integrated service network or integrated service 
 66.6   network within the region.  This assistance must complement 
 66.7   assistance provided by the commissioner under section 62N.23. 
 66.8      Sec. 5.  Minnesota Statutes 1994, section 62J.152, 
 66.9   subdivision 5, is amended to read: 
 66.10     Subd. 5.  [USE OF TECHNOLOGY EVALUATION.] (a) The final 
 66.11  report on the technology evaluation and the commission's 
 66.12  comments and recommendations may be used: 
 66.13     (1) by the commissioner in retrospective and prospective 
 66.14  review of major expenditures; 
 66.15     (2) by integrated service networks and other group 
 66.16  purchasers and by employers, in making coverage, contracting, 
 66.17  purchasing, and reimbursement decisions; 
 66.18     (3) by government programs and regulators of the regulated 
 66.19  all-payer option, in making coverage, contracting, purchasing, 
 66.20  and reimbursement decisions; 
 66.21     (4) by the commissioner and other organizations in the 
 66.22  development of practice parameters, in compliance with section 
 66.23  62N.15, subdivision 6, paragraph (c); 
 66.24     (5) (4) by health care providers in making decisions about 
 66.25  adding or replacing technology and the appropriate use of 
 66.26  technology; 
 66.27     (6) (5) by consumers in making decisions about treatment; 
 66.28     (7) (6) by medical device manufacturers in developing and 
 66.29  marketing new technologies; and 
 66.30     (8) (7) as otherwise needed by health care providers, 
 66.31  health care plans, consumers, and purchasers. 
 66.32     (b) At the request of the commissioner, the health care 
 66.33  commission, in consultation with the health technology advisory 
 66.34  committee, shall submit specific recommendations relating to 
 66.35  technologies that have been evaluated under this section for 
 66.36  purposes of retrospective and prospective review of major 
 67.1   expenditures and coverage, contracting, purchasing, and 
 67.2   reimbursement decisions affecting state programs and the 
 67.3   all-payer option. 
 67.4      Sec. 6.  Minnesota Statutes 1994, section 62Q.01, 
 67.5   subdivision 4, is amended to read: 
 67.6      Subd. 4.  [HEALTH PLAN COMPANY.] "Health plan company" 
 67.7   means: 
 67.8      (1) a health carrier as defined under section 62A.011, 
 67.9   subdivision 2; 
 67.10     (2) an integrated service network as defined under section 
 67.11  62N.02, subdivision 8; or 
 67.12     (3) an all-payer insurer as defined under section 62P.02; 
 67.13  or 
 67.14     (4) a community integrated service network as defined under 
 67.15  section 62N.02, subdivision 4a. 
 67.16     Sec. 7.  Minnesota Statutes 1994, section 62Q.30, is 
 67.17  amended to read: 
 67.18     62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION 
 67.19  PROCESS.] 
 67.20     The commissioner shall establish an expedited fact finding 
 67.21  and dispute resolution process to assist enrollees of integrated 
 67.22  service networks and all-payer insurers health plan companies 
 67.23  with contested treatment, coverage, and service issues to be in 
 67.24  effect July 1, 1997.  The commissioner may order an integrated 
 67.25  service network or an all-payer insurer a health plan company to 
 67.26  provide or pay for a service that is within the universal 
 67.27  standard benefits set health coverage.  If the disputed issue 
 67.28  relates to whether a service is appropriate and necessary, the 
 67.29  commissioner shall issue an order only after consulting with 
 67.30  appropriate experts knowledgeable, trained, and practicing in 
 67.31  the area in dispute, reviewing pertinent literature, and 
 67.32  considering the availability of satisfactory alternatives.  The 
 67.33  commissioner shall take steps including but not limited to 
 67.34  fining, suspending, or revoking the license of an integrated 
 67.35  service network or an all-payer insurer a health plan company 
 67.36  that is the subject of repeated orders by the commissioner that 
 68.1   suggests a pattern of inappropriate underutilization. 
 68.2      Sec. 8.  Minnesota Statutes 1994, section 62Q.41, is 
 68.3   amended to read: 
 68.4      62Q.41 [ANNUAL IMPLEMENTATION REPORT.] 
 68.5      (a) The commissioner of health, in consultation with the 
 68.6   Minnesota health care commission, shall develop an annual 
 68.7   implementation report to be submitted to the legislature each 
 68.8   year beginning January 1, 1995, describing the progress and 
 68.9   status of rule development and implementation of the integrated 
 68.10  service network system and the regulated all-payer option, and 
 68.11  providing recommendations for legislative changes that the 
 68.12  commissioner determines may be needed.  
 68.13     (b) As part of the report required in paragraph (a) due for 
 68.14  1996, the commissioner, in consultation with the health care 
 68.15  commission, shall make recommendations on the design and 
 68.16  development of an appropriate framework to apply regulations 
 68.17  uniformly among all health plan companies and to ensure adequate 
 68.18  oversight and consumer protection in the absence of a regulated 
 68.19  all-payer system. 
 68.20     Sec. 9.  Laws 1994, chapter 625, article 5, section 5, 
 68.21  subdivision 1, is amended to read: 
 68.22     Subdivision 1.  [PROPOSED LEGISLATION.] The commissioners 
 68.23  of health and commerce, in consultation with the Minnesota 
 68.24  health care commission and the legislative commission on health 
 68.25  care access, shall draft proposed legislation to recodify, 
 68.26  simplify, and standardize all statutes, rules, regulatory 
 68.27  requirements, and procedures relating to health plan companies.  
 68.28  The recodification and regulatory reform must become effective 
 68.29  simultaneously with the full implementation of the integrated 
 68.30  service network system and the regulated all-payer option on 
 68.31  July 1, 1997.  The commissioners of health and commerce shall 
 68.32  submit to the legislature by January 1, 1996, a report on the 
 68.33  recodification and regulatory reform with proposed legislation. 
 68.34     Sec. 10.  [INSTRUCTION TO REVISOR; RECODIFICATION OF 
 68.35  INTERIM LIMITS.] 
 68.36     The revisor of statutes shall recode Minnesota Statutes, 
 69.1   section 62P.04, as amended, as section 62J.041, and shall recode 
 69.2   section 62P.05, as amended, as section 62J.042; and shall change 
 69.3   all references to those sections in Minnesota Statutes and 
 69.4   Minnesota Rules accordingly. 
 69.5      Sec. 11.  [REPEALER.] 
 69.6      Minnesota Statutes 1994, sections 62J.152, subdivision 6; 
 69.7   62P.01; 62P.02; 62P.03; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 
 69.8   62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; 
 69.9   and 62P.33, are repealed. 
 69.10                             ARTICLE 4 
 69.11                         UNIVERSAL COVERAGE 
 69.12     Section 1.  Minnesota Statutes 1994, section 62Q.165, is 
 69.13  amended to read: 
 69.14     62Q.165 [UNIVERSAL COVERAGE.] 
 69.15     Subdivision 1.  [COMMITMENT TO UNIVERSAL COVERAGE.] It is 
 69.16  the commitment of the state to achieve universal health coverage 
 69.17  for all Minnesotans by July 1, 1997.  In order to achieve this 
 69.18  commitment, the following goals must be met: 
 69.19     (1) every Minnesotan shall have health coverage and shall 
 69.20  contribute to the costs of coverage based on ability to pay; 
 69.21     (2) no Minnesotan shall be denied coverage or forced to pay 
 69.22  more because of health status; 
 69.23     (3) quality health care services must be accessible to all 
 69.24  Minnesotans; 
 69.25     (4) all health care purchasers must be placed on an equal 
 69.26  footing in the health care marketplace; and 
 69.27     (5) a comprehensive and affordable health plan must be 
 69.28  available to all Minnesotans. 
 69.29     Universal coverage is achieved when every Minnesotan has 
 69.30  access to the full range of health care services, including 
 69.31  preventive and primary care, and pays into the system according 
 69.32  to that person's ability. 
 69.33     Subd. 2.  [REPORT ON HEALTH CARE ACCESS.] (a) The health 
 69.34  care commission shall annually report to the legislature 
 69.35  regarding the extent to which the state is making progress 
 69.36  toward the goal of universal coverage described in this 
 70.1   section.  As part of this report, the commission shall monitor 
 70.2   the number of uninsured in the state.  The annual report must be 
 70.3   submitted no later than January 15 of each year in compliance 
 70.4   with section 3.195. 
 70.5      (b) The annual report required under paragraph (a), due 
 70.6   January 15, 1996, shall advise the legislature regarding 
 70.7   possible additional steps in insurance reform that would be 
 70.8   helpful in progressing toward universal coverage.  The 
 70.9   commission shall consider further initiatives involving group 
 70.10  purchasing pools, narrowing premium variations, guaranteed issue 
 70.11  and portability requirements, preexisting condition limitations, 
 70.12  and other provisions that provide greater opportunities to 
 70.13  obtain affordable health coverage.  The commission shall 
 70.14  consider the small employer reforms contained in the model laws 
 70.15  recommended by the National Association of Insurance 
 70.16  Commissioners and shall recommend whether these reforms should 
 70.17  be adopted.  
 70.18     (c) The annual report due required under paragraph (a), 
 70.19  required on January 15, 1996, shall advise the legislature 
 70.20  regarding possible changes in the individual insurance market.  
 70.21  The report shall consider initiatives regarding purchasing 
 70.22  pools, including specific design details of a state-run or 
 70.23  state-initiated purchasing pool for individuals, specific 
 70.24  legislative reforms needed to encourage the formation of 
 70.25  purchasing pools, and point-by-point consideration of the 
 70.26  obstacles to enactment of these purchasing pools, including 
 70.27  adverse selection.  The report shall consider the creation of a 
 70.28  standard and objective definition of eligibility for the 
 70.29  Minnesota Comprehensive Health Association, and whether the 
 70.30  enactment of such a definition could be coupled with guaranteed 
 70.31  issuance for the remainder of the individual market.  The report 
 70.32  should include all other considerations of the commission as to 
 70.33  the optimal reforms of the individual market. 
 70.34     (d) The health care commission shall also monitor federal 
 70.35  efforts to remove barriers to expanding access at the state 
 70.36  level, and shall recommend to the legislature and the governor, 
 71.1   as part of the annual report required under paragraph (a), any 
 71.2   steps toward achieving universal coverage that become feasible 
 71.3   with the removal of these barriers. 
 71.4      (e) To the extent possible, the health care commission 
 71.5   shall utilize existing information, including information 
 71.6   collected by other state or federal agencies and organizations, 
 71.7   to complete the studies and reports in this subdivision.  State 
 71.8   agencies and organizations shall provide information, technical 
 71.9   and analytic support, and other assistance to the commission as 
 71.10  possible, to ensure the timely and efficient completion of the 
 71.11  studies and reports in this subdivision.  Staff from the 
 71.12  appropriate state agencies shall participate with the commission 
 71.13  executive director no later than June 15 each year in initial 
 71.14  planning and coordination for the annual reports and studies of 
 71.15  this subdivision.  Following this initial planning, the 
 71.16  executive director shall report to the legislative commission on 
 71.17  health care access by July 1 each year on the initial study 
 71.18  plan, and on any commission tasks or studies which may not be 
 71.19  completed as scheduled due to such constraints as lack of 
 71.20  sufficient available information or resources. 
 71.21     Sec. 2.  Minnesota Statutes 1994, section 62Q.18, is 
 71.22  amended to read: 
 71.23     62Q.18 [UNIVERSAL PORTABILITY OF COVERAGE; INSURANCE 
 71.24  REFORMS.] 
 71.25     Subdivision 1.  [DEFINITION DEFINITIONS.] For purposes of 
 71.26  this section, 
 71.27     (1) "continuous coverage" has the meaning given in section 
 71.28  62L.02; 
 71.29     (2) "guaranteed issue" means: 
 71.30     (i) for individual health plans, that a health plan company 
 71.31  shall not decline an application by an individual for any 
 71.32  individual health plan offered by that health plan company, 
 71.33  including coverage for a dependent of the individual to whom the 
 71.34  health plan has been or would be issued; and 
 71.35     (ii) for group health plans, that a health plan company 
 71.36  shall not decline an application by a group for any group health 
 72.1   plan offered by that health plan company and shall not decline 
 72.2   to cover under the group health plan any person eligible for 
 72.3   coverage under the group's eligibility requirements, including 
 72.4   persons who become eligible after initial issuance of the group 
 72.5   health plan; and 
 72.6      (3) "qualifying coverage" has the meaning given in section 
 72.7   62L.02; and 
 72.8      (4) "underwriting restrictions" has the meaning given in 
 72.9   section 62L.03, subdivision 4. 
 72.10     Subd. 2.  [INDIVIDUAL MANDATE.] Effective July 1, 1997, 
 72.11  each Minnesota resident shall obtain and maintain qualifying 
 72.12  coverage. 
 72.13     Subd. 3.  [GUARANTEED ISSUE.] (a) Effective July 1, 1997, 
 72.14  each health plan company shall offer, sell, issue, or renew each 
 72.15  of its individual health plan forms on a guaranteed issue basis 
 72.16  to any Minnesota resident. 
 72.17     (b) Effective July 1, 1997, each health plan company shall 
 72.18  offer, sell, issue, or renew each of its group health plan forms 
 72.19  to any employer that has its principal place of business in this 
 72.20  state on a guaranteed issue basis, provided that the guaranteed 
 72.21  issue requirement does not apply to employees, dependents, or 
 72.22  other persons to be covered, who are not residents of this state.
 72.23     Subd. 4.  [UNDERWRITING RESTRICTIONS LIMITED.] Effective 
 72.24  July 1, 1997, no health plan company shall offer, sell, issue, 
 72.25  or renew a health plan that has underwriting restrictions that 
 72.26  apply to a Minnesota resident, except as expressly permitted 
 72.27  under this section. 
 72.28     Subd. 5.  [PREEXISTING CONDITION LIMITATIONS.] Effective 
 72.29  July 1, 1997, no health plan company shall offer, sell, issue, 
 72.30  or renew a health plan that contains a preexisting condition 
 72.31  limitation or exclusion or exclusionary rider that applies to a 
 72.32  Minnesota resident, except a limitation which is no longer than 
 72.33  12 months and applies only to a person who has not maintained 
 72.34  continuous coverage.  An unexpired preexisting condition 
 72.35  limitation from previous qualifying coverage may be carried over 
 72.36  to new coverage under a health plan, if the unexpired condition 
 73.1   is one permitted under this section.  A Minnesota resident who 
 73.2   has not maintained continuous coverage may be subjected to a new 
 73.3   12-month preexisting condition limitation after each break in 
 73.4   continuous coverage. 
 73.5      Subd. 6.  [LIMITS ON PREMIUM RATE VARIATIONS.] (a) 
 73.6   Effective July 1, 1995, the premium rate variations permitted 
 73.7   under sections 62A.65 and 62L.08 become: 
 73.8      (1) for factors other than age and geography, 12.5 percent 
 73.9   of the index rate; and 
 73.10     (2) for age, 25 percent of the index rate. 
 73.11     (b) Effective July 1, 1996, the premium variations 
 73.12  permitted under sections 62A.65 and 62L.08 become: 
 73.13     (1) for factors other than age and geography, 7.5 percent 
 73.14  of the index rate; and 
 73.15     (2) for age, 15 percent of the index rate. 
 73.16     (c) Effective July 1, 1997, no health plan company shall 
 73.17  offer, sell, issue, or renew a health plan, that is subject to 
 73.18  section 62A.65 or 62L.08, for which the premium rate varies 
 73.19  between covered persons on the basis of any factor other than: 
 73.20     (1) for individual health plans, differences in benefits or 
 73.21  benefit design, and for group health plans, actuarially valid 
 73.22  differences in benefits or benefit design; 
 73.23     (2) the number of persons to be covered by the health plan; 
 73.24     (3) actuarially valid differences in expected costs between 
 73.25  adults and children; 
 73.26     (4) healthy lifestyle discounts authorized by statute; and 
 73.27     (5) for individual health plans, geographic variations 
 73.28  permitted under section 62A.65, and for group health plans, 
 73.29  geographic variations permitted under section 62L.08. 
 73.30     (d) All premium rate variations permitted under paragraph 
 73.31  (c) are subject to the approval of the commissioner . 
 73.32     (e) Notwithstanding paragraphs (a), (b), and (c), no health 
 73.33  plan company shall renew any individual or group health plan, 
 73.34  except in compliance with this paragraph.  No premium rate for 
 73.35  any policy holder or contract holder shall increase or decrease 
 73.36  upon renewal, as a result of this subdivision, by more than 15 
 74.1   percent per year.  The increase or decrease described in this 
 74.2   paragraph is in addition to any premium increase or decrease 
 74.3   caused by legally permissible factors other than this 
 74.4   subdivision.  If a premium increase or decrease is constrained 
 74.5   by this paragraph, the health plan company may implement the 
 74.6   remaining portion of the increase or decrease at the time of 
 74.7   subsequent annual renewals, but never to exceed 15 percent per 
 74.8   year for paragraphs (a), (b), and (c) combined. 
 74.9      Subd. 7.  [PORTABILITY OF COVERAGE REQUIREMENT.] (a) 
 74.10  Effective July 1, 1997, no health plan company shall offer, 
 74.11  sell, issue, or renew any group or individual health plan that 
 74.12  does not provide for guaranteed issue, with full credit for 
 74.13  previous qualifying coverage against any preexisting condition 
 74.14  limitation that would otherwise apply under subdivision 5.  No 
 74.15  health plan shall be subject to any other type of underwriting 
 74.16  restriction.  
 74.17     (b) Effective July 1, 1995, no health plan company shall 
 74.18  offer, sell, issue, or renew any group or individual health plan 
 74.19  that does not, with respect to individuals who maintain 
 74.20  continuous coverage and whose immediately preceding qualifying 
 74.21  coverage is a health plan issued by medical assistance under 
 74.22  chapter 256B, general assistance medical care under chapter 
 74.23  256D, or the MinnesotaCare program established under section 
 74.24  256.9352, 
 74.25     (1) make coverage available on a guaranteed issue basis; 
 74.26  and 
 74.27     (2) give full credit for previous continuous coverage 
 74.28  against any applicable preexisting condition limitation or 
 74.29  exclusion. 
 74.30     (c) Paragraph (b) applies to individuals whose immediately 
 74.31  preceding qualifying coverage is medical assistance under 
 74.32  chapter 256B, general assistance medical care under chapter 
 74.33  256D, or the MinnesotaCare program established under section 
 74.34  256.9352, only if the individual has disenrolled from the public 
 74.35  program or will disenroll upon issuance of the new coverage.  
 74.36  Paragraph (b) does not apply if the public program uses or will 
 75.1   use public funds to pay the premiums for an individual who 
 75.2   remains or will remain enrolled in the public program.  No 
 75.3   public funds may be used to purchase private coverage available 
 75.4   under this paragraph.  This paragraph does not prohibit public 
 75.5   payment of premiums to continue private sector coverage 
 75.6   originally obtained prior to enrollment in the public program, 
 75.7   where otherwise permitted by state or federal law.  Portability 
 75.8   coverage under this paragraph is subject to the provisions of 
 75.9   section 62A.65, subdivision 5, clause (b). 
 75.10     (d) Effective July 1, 1994, no health plan company shall 
 75.11  offer, sell, issue, or renew any group health plan that does 
 75.12  not, with respect to individuals who maintain continuous 
 75.13  coverage and who qualify under the group's eligibility 
 75.14  requirements: 
 75.15     (1) make coverage available on a guaranteed issue basis; 
 75.16  and 
 75.17     (2) give full credit for previous continuous coverage 
 75.18  against any applicable preexisting condition limitation or 
 75.19  preexisting condition exclusion. 
 75.20     To the extent that this paragraph subdivision conflicts 
 75.21  with chapter 62L, with respect to small employers as defined in 
 75.22  section 62L.02, chapter 62L governs, regardless of whether the 
 75.23  group sponsor is a small employer as defined in section 62L.02, 
 75.24  except that for group health plans issued to groups that are not 
 75.25  small employers, this subdivision's requirement that the 
 75.26  individual have maintained continuous coverage applies.  An 
 75.27  individual who has maintained continuous coverage, but would be 
 75.28  considered a late entrant under chapter 62L, may be treated as a 
 75.29  late entrant in the same manner under this subdivision as 
 75.30  permitted under chapter 62L.  
 75.31     Subd. 8.  [COMPREHENSIVE HEALTH ASSOCIATION.] Effective 
 75.32  July 1, 1997, the comprehensive health association created in 
 75.33  section 62E.10 shall not accept new applicants for enrollment, 
 75.34  except for Medicare-related coverage described in section 62E.12 
 75.35  and for coverage described in section 62E.18. 
 75.36     Subd. 9.  [CONTINGENCY; FUTURE LEGISLATION.] This section, 
 76.1   except for subdivision 7, paragraphs (b), (c), and (d), is not 
 76.2   intended to be implemented prior to legislation enacted to 
 76.3   achieve the objectives of section 62Q.165 and Laws 1994, chapter 
 76.4   625, article 6, sections 5, 6, and 7.  Subdivision 6 is not 
 76.5   effective until an effective date is specified in 1995 
 76.6   legislation. 
 76.7      Sec. 3.  [REPEALER; ADDITIONAL INSURANCE REFORMS.] 
 76.8      Minnesota Statutes 1994, section 62Q.18, subdivisions 2, 3, 
 76.9   4, 5, 6, 8, and 9, are repealed. 
 76.10                             ARTICLE 5 
 76.11                   DATA AND RESEARCH INITIATIVES 
 76.12     Section 1.  Minnesota Statutes 1994, section 13.99, is 
 76.13  amended by adding a subdivision to read: 
 76.14     Subd. 115.  [HEALTH DATA INSTITUTE DATA.] Data created, 
 76.15  collected, received, maintained, or disseminated by the 
 76.16  Minnesota health data institute established under section 
 76.17  62J.451 are classified under section 62J.452; access to and 
 76.18  disclosure of such data are governed by section 62J.452. 
 76.19     Sec. 2.  Minnesota Statutes 1994, section 62J.04, 
 76.20  subdivision 3, is amended to read: 
 76.21     Subd. 3.  [COST CONTAINMENT DUTIES.] After obtaining the 
 76.22  advice and recommendations of the Minnesota health care 
 76.23  commission, the commissioner shall: 
 76.24     (1) establish statewide and regional limits on growth in 
 76.25  total health care spending under this section, monitor regional 
 76.26  and statewide compliance with the spending limits, and take 
 76.27  action to achieve compliance to the extent authorized by the 
 76.28  legislature; 
 76.29     (2) divide the state into no fewer than four regions, with 
 76.30  one of those regions being the Minneapolis/St. Paul metropolitan 
 76.31  statistical area but excluding Chisago, Isanti, Wright, and 
 76.32  Sherburne counties, for purposes of fostering the development of 
 76.33  regional health planning and coordination of health care 
 76.34  delivery among regional health care systems and working to 
 76.35  achieve spending limits; 
 76.36     (3) provide technical assistance to regional coordinating 
 77.1   boards; 
 77.2      (4) monitor the quality of health care throughout the 
 77.3   state, conduct consumer satisfaction surveys, and take action as 
 77.4   necessary to ensure an appropriate level of quality; 
 77.5      (5) issue recommendations regarding uniform billing forms, 
 77.6   uniform electronic billing procedures and data interchanges, 
 77.7   patient identification cards, and other uniform claims and 
 77.8   administrative procedures for health care providers and private 
 77.9   and public sector payers.  In developing the recommendations, 
 77.10  the commissioner shall review the work of the work group on 
 77.11  electronic data interchange (WEDI) and the American National 
 77.12  Standards Institute (ANSI) at the national level, and the work 
 77.13  being done at the state and local level.  The commissioner may 
 77.14  adopt rules requiring the use of the Uniform Bill 82/92 form, 
 77.15  the National Council of Prescription Drug Providers (NCPDP) 3.2 
 77.16  electronic version, the Health Care Financing Administration 
 77.17  1500 form, or other standardized forms or procedures; 
 77.18     (6) undertake health planning responsibilities as provided 
 77.19  in section 62J.15; 
 77.20     (7) monitor and promote the development and implementation 
 77.21  of practice parameters; 
 77.22     (8) authorize, fund, or promote research and 
 77.23  experimentation on new technologies and health care procedures; 
 77.24     (9) designate referral centers for specialized and 
 77.25  high-cost procedures and treatment and establish minimum 
 77.26  standards and requirements for particular procedures or 
 77.27  treatment; 
 77.28     (10) (8) within the limits of appropriations for these 
 77.29  purposes, administer or contract for statewide consumer 
 77.30  education and wellness programs that will improve the health of 
 77.31  Minnesotans and increase individual responsibility relating to 
 77.32  personal health and the delivery of health care services, 
 77.33  undertake prevention programs including initiatives to improve 
 77.34  birth outcomes, expand childhood immunization efforts, and 
 77.35  provide start-up grants for worksite wellness programs; and 
 77.36     (11) administer the data analysis unit; and 
 78.1      (12) (9) undertake other activities to monitor and oversee 
 78.2   the delivery of health care services in Minnesota with the goal 
 78.3   of improving affordability, quality, and accessibility of health 
 78.4   care for all Minnesotans. 
 78.5      Sec. 3.  Minnesota Statutes 1994, section 62J.06, is 
 78.6   amended to read: 
 78.7      62J.06 [IMMUNITY FROM LIABILITY.] 
 78.8      No member of the Minnesota health care commission 
 78.9   established under section 62J.05, regional coordinating boards 
 78.10  established under section 62J.09, or the health 
 78.11  planning technology advisory committee established under section 
 78.12  62J.15, data collection advisory committee established under 
 78.13  section 62J.30, or practice parameter advisory committee 
 78.14  established under section 62J.32 shall be held civilly or 
 78.15  criminally liable for an act or omission by that person if the 
 78.16  act or omission was in good faith and within the scope of the 
 78.17  member's responsibilities under this chapter. 
 78.18     Sec. 4.  Minnesota Statutes 1994, section 62J.212, is 
 78.19  amended to read: 
 78.20     62J.212 [COLLABORATION ON PUBLIC HEALTH GOALS.] 
 78.21     The commissioner may increase regional spending limits if 
 78.22  public health goals for that region are achieved.  The 
 78.23  commissioner shall establish specific public health goals 
 78.24  including, but not limited to, increased delivery of prenatal 
 78.25  care, improved birth outcomes, and expanded childhood 
 78.26  immunizations.  The commissioner shall consider the community 
 78.27  public health goals and the input of the statewide advisory 
 78.28  committee on community health in establishing the statewide 
 78.29  goals. 
 78.30     Sec. 5.  [62J.2930] [INFORMATION CLEARINGHOUSE.] 
 78.31     Subdivision 1.  [ESTABLISHMENT.] The commissioner of health 
 78.32  shall establish an information clearinghouse within the 
 78.33  department of health to facilitate the ability of consumers, 
 78.34  employers, providers, health plan companies, and others to 
 78.35  obtain information on health reform activities in Minnesota.  
 78.36  The commissioner shall make available through the clearinghouse 
 79.1   updates on federal and state health reform activities, including 
 79.2   information developed or collected by the department of health 
 79.3   on cost containment or other research initiatives, the 
 79.4   development of integrated service networks, and voluntary 
 79.5   purchasing pools, action plans submitted by health plan 
 79.6   companies, reports or recommendations of the health technology 
 79.7   advisory committee and other entities on technology assessments, 
 79.8   and reports or recommendations from other formal committees 
 79.9   applicable to health reform activities.  The clearinghouse shall 
 79.10  also refer requesters to sources of further information or 
 79.11  assistance.  The clearinghouse is subject to chapter 13. 
 79.12     Subd. 2.  [INFORMATION ON HEALTH PLAN COMPANIES.] The 
 79.13  information clearinghouse shall provide information on all 
 79.14  health plan companies operating in a specific geographic area to 
 79.15  consumers and purchasers who request it. 
 79.16     Subd. 3.  [COORDINATION.] To the extent possible, the 
 79.17  commissioner shall coordinate the activities of the 
 79.18  clearinghouse with the activities of the Minnesota health data 
 79.19  institute. 
 79.20     Sec. 6.  [62J.301] [RESEARCH AND DATA INITIATIVES.] 
 79.21     Subdivision 1.  [DEFINITIONS.] For purposes of sections 
 79.22  62J.2930 to 62J.42, the following definitions apply: 
 79.23     (a) "Health outcomes data" means data used in research 
 79.24  designed to identify and analyze the outcomes and costs of 
 79.25  alternative interventions for a given clinical condition, in 
 79.26  order to determine the most appropriate and cost-effective 
 79.27  means, in compliance with section 62N.15, subdivision 7, 
 79.28  paragraph (c), to prevent, diagnose, treat, or manage the 
 79.29  condition, or in order to develop and test methods for reducing 
 79.30  inappropriate or unnecessary variations in the type and 
 79.31  frequency of interventions. 
 79.32     (b) "Encounter level data" means data related to the 
 79.33  utilization of health care services by, and the provision of 
 79.34  health care services to individual patients, enrollees, or 
 79.35  insureds, including claims data, abstracts of medical records, 
 79.36  and data from patient interviews and patient surveys. 
 80.1      Subd. 2.  [STATEMENT OF PURPOSE.] The commissioner of 
 80.2   health shall conduct data and research initiatives in order to 
 80.3   monitor and improve the efficiency and effectiveness of health 
 80.4   care in Minnesota. 
 80.5      Subd. 3.  [GENERAL DUTIES.] The commissioner shall: 
 80.6      (1) collect and maintain data which enable population-based 
 80.7   monitoring and trending of the access, utilization, quality, and 
 80.8   cost of health care services within Minnesota; 
 80.9      (2) collect and maintain data for the purpose of estimating 
 80.10  total Minnesota health care expenditures and trends; 
 80.11     (3) collect and maintain data for the purposes of setting 
 80.12  limits under section 62J.04, and measuring growth limit 
 80.13  compliance; 
 80.14     (4) conduct applied research using existing and new data 
 80.15  and promote applications based on existing research; 
 80.16     (5) develop and implement data collection procedures to 
 80.17  ensure a high level of cooperation from health care providers 
 80.18  and health plan companies, as defined in section 62Q.01, 
 80.19  subdivision 4; 
 80.20     (6) work closely with health plan companies and health care 
 80.21  providers to promote improvements in health care efficiency and 
 80.22  effectiveness; and 
 80.23     (7) participate as a partner or sponsor of private sector 
 80.24  initiatives that promote publicly disseminated applied research 
 80.25  on health care delivery, outcomes, costs, quality, and 
 80.26  management. 
 80.27     Subd. 4.  [INFORMATION TO BE COLLECTED.] (a) The data 
 80.28  collected may include health outcomes data, patient functional 
 80.29  status, and health status.  The data collected may include 
 80.30  information necessary to measure and make adjustments for 
 80.31  differences in the severity of patient condition across 
 80.32  different health care providers, and may include data obtained 
 80.33  directly from the patient or from patient medical records, as 
 80.34  provided in section 62J.321, subdivision 1. 
 80.35     (b) The commissioner may: 
 80.36     (1) collect the encounter level data required for the 
 81.1   research and data initiatives of sections 62J.301 to 62J.42, 
 81.2   using, to the greatest extent possible, standardized forms and 
 81.3   procedures; and 
 81.4      (2) process the data collected to ensure validity, 
 81.5   consistency, accuracy, and completeness, and as appropriate, 
 81.6   merge data collected from different sources. 
 81.7      (c) For purposes of estimating total health care spending 
 81.8   and forecasting rates of growth in health care spending, the 
 81.9   commissioner may collect from health care providers data on 
 81.10  patient revenues and health care spending during a time period 
 81.11  specified by the commissioner.  The commissioner may also 
 81.12  collect data on health care revenues and spending from group 
 81.13  purchasers of health care.  Health care providers and group 
 81.14  purchasers doing business in the state shall provide the data 
 81.15  requested by the commissioner at the times and in the form 
 81.16  specified by the commissioner.  Professional licensing boards 
 81.17  and state agencies responsible for licensing, registering, or 
 81.18  regulating providers and group purchasers shall cooperate fully 
 81.19  with the commissioner in achieving compliance with the reporting 
 81.20  requirements. 
 81.21     Subd. 5.  [NONLIMITING.] Nothing in this chapter shall be 
 81.22  construed to limit the powers granted to the commissioner of 
 81.23  health under chapter 62D, 62N, 144, or 144A. 
 81.24     Sec. 7.  [62J.311] [ANALYSIS AND USE OF DATA.] 
 81.25     Subdivision 1.  [DATA ANALYSIS.] The commissioner shall 
 81.26  analyze the data collected to: 
 81.27     (1) assist the state in developing and refining its health 
 81.28  policy in the areas of access, utilization, quality, and cost; 
 81.29     (2) assist the state in promoting efficiency and 
 81.30  effectiveness in the financing and delivery of health services; 
 81.31     (3) monitor and track accessibility, utilization, quality, 
 81.32  and cost of health care services within the state; 
 81.33     (4) evaluate the impact of health care reform activities; 
 81.34     (5) assist the state in its public health activities; and 
 81.35     (6) evaluate and determine the most appropriate methods for 
 81.36  ongoing data collection. 
 82.1      Subd. 2.  [CRITERIA FOR DATA AND RESEARCH INITIATIVES.] (a) 
 82.2   Data and research initiatives by the commissioner, pursuant to 
 82.3   sections 62J.301 to 62J.42, must: 
 82.4      (1) serve the needs of the general public, public sector 
 82.5   health care programs, employers and other purchasers of health 
 82.6   care, health care providers, including providers serving large 
 82.7   numbers of people with low-income, and health plan companies as 
 82.8   applicable; 
 82.9      (2) be based on scientifically sound and statistically 
 82.10  valid methods; 
 82.11     (3) be statewide in scope, to the extent feasible, in order 
 82.12  to benefit health care purchasers and providers in all parts of 
 82.13  Minnesota and to ensure broad and representative health care 
 82.14  data for research comparisons and applications; 
 82.15     (4) emphasize data that is useful, relevant, and 
 82.16  nonredundant of existing data.  The initiatives may duplicate 
 82.17  existing private data collection activities, if necessary to 
 82.18  ensure that the data collected will be in the public domain; 
 82.19     (5) be structured to minimize the administrative burden on 
 82.20  health plan companies, health care providers, and the health 
 82.21  care delivery system, and minimize any privacy impact on 
 82.22  individuals; and 
 82.23     (6) promote continuous improvement in the efficiency and 
 82.24  effectiveness of health care delivery. 
 82.25     (b) Data and research initiatives related to public sector 
 82.26  health care programs must: 
 82.27     (1) assist the state's current health care financing and 
 82.28  delivery programs to deliver and purchase health care in a 
 82.29  manner that promotes improvements in health care efficiency and 
 82.30  effectiveness; 
 82.31     (2) assist the state in its public health activities, 
 82.32  including the analysis of disease prevalence and trends and the 
 82.33  development of public health responses; 
 82.34     (3) assist the state in developing and refining its overall 
 82.35  health policy, including policy related to health care costs, 
 82.36  quality, and access; and 
 83.1      (4) provide data that allows the evaluation of state health 
 83.2   care financing and delivery programs. 
 83.3      Sec. 8.  [62J.321] [DATA COLLECTION AND PROCESSING 
 83.4   PROCEDURES.] 
 83.5      Subdivision 1.  [DATA COLLECTION.] (a) The commissioner 
 83.6   shall collect data from health care providers, health plan 
 83.7   companies, and individuals in the most cost-effective manner, 
 83.8   which does not unduly burden them.  The commissioner may require 
 83.9   health care providers and health plan companies to collect and 
 83.10  provide patient health records and claim files, and cooperate in 
 83.11  other ways with the data collection process.  The commissioner 
 83.12  may also require health care providers and health plan companies 
 83.13  to provide mailing lists of patients.  Patient consent shall not 
 83.14  be required for the release of data to the commissioner pursuant 
 83.15  to sections 62J.301 to 62J.42 by any group purchaser, health 
 83.16  plan company, health care provider; or agent, contractor, or 
 83.17  association acting on behalf of a group purchaser or health care 
 83.18  provider.  Any group purchaser, health plan company, health care 
 83.19  provider; or agent, contractor, or association acting on behalf 
 83.20  of a group purchaser or health care provider, that releases data 
 83.21  to the commissioner in good faith pursuant to sections 62J.301 
 83.22  to 62J.42 shall be immune from civil liability and criminal 
 83.23  prosecution. 
 83.24     (b) When a group purchaser, health plan company, or health 
 83.25  care provider submits patient identifying data, as defined in 
 83.26  section 62J.451, to the commissioner pursuant to sections 
 83.27  62J.301 to 62J.42, and the data is submitted to the commissioner 
 83.28  in electronic form, or through other electronic means including, 
 83.29  but not limited to, the electronic data interchange system 
 83.30  defined in section 62J.451, the group purchaser, health plan 
 83.31  company, or health care provider shall submit the patient 
 83.32  identifying data in encrypted form, using an encryption method 
 83.33  specified by the commissioner.  Submission of encrypted data as 
 83.34  provided in this paragraph satisfies the requirements of section 
 83.35  144.335, subdivision 3b. 
 83.36     (c) The commissioner shall require all health care 
 84.1   providers, group purchasers, and state agencies to use a 
 84.2   standard patient identifier and a standard identifier for 
 84.3   providers and health plan companies when reporting data under 
 84.4   this chapter.  The commissioner must encrypt patient identifiers 
 84.5   to prevent identification of individual patients and to enable 
 84.6   release of otherwise private data to researchers, providers, and 
 84.7   group purchasers in a manner consistent with chapter 13 and 
 84.8   sections 62J.55 and 144.335.  This encryption must ensure that 
 84.9   any data released must be in a form that makes it impossible to 
 84.10  identify individual patients.  
 84.11     Subd. 2.  [FAILURE TO PROVIDE DATA.] The intentional 
 84.12  failure to provide the data requested under this chapter is 
 84.13  grounds for disciplinary or regulatory action against a 
 84.14  regulated provider or group purchaser.  The commissioner may 
 84.15  assess a fine against a provider or group purchaser who refuses 
 84.16  to provide data required by the commissioner.  If a provider or 
 84.17  group purchaser refuses to provide the data required, the 
 84.18  commissioner may obtain a court order requiring the provider or 
 84.19  group purchaser to produce documents and allowing the 
 84.20  commissioner to inspect the records of the provider or group 
 84.21  purchaser for purposes of obtaining the data required. 
 84.22     Subd. 3.  [DATA COLLECTION AND REVIEW.] Data collection 
 84.23  must continue for a sufficient time to permit:  adequate 
 84.24  analysis by researchers and appropriate providers, including 
 84.25  providers who will be impacted by the data; feedback to 
 84.26  providers; monitoring for changes in practice patterns; and the 
 84.27  data and research criteria of section 62J.311, subdivision 2, to 
 84.28  be fulfilled. 
 84.29     Subd. 4.  [USE OF EXISTING DATA.] (a) The commissioner 
 84.30  shall negotiate with private sector organizations currently 
 84.31  collecting health care data of interest to the commissioner to 
 84.32  obtain required data in a cost-effective manner and minimize 
 84.33  administrative costs.  The commissioner shall attempt to 
 84.34  establish links between the health care data collected to 
 84.35  fulfill sections 62J.301 to 62J.42 and existing private sector 
 84.36  data and shall consider and implement methods to streamline data 
 85.1   collection in order to reduce public and private sector 
 85.2   administrative costs. 
 85.3      (b) The commissioner shall use existing public sector data, 
 85.4   such as those existing for medical assistance and Medicare, to 
 85.5   the greatest extent possible.  The commissioner shall establish 
 85.6   links between existing public sector data and consider and 
 85.7   implement methods to streamline public sector data collection in 
 85.8   order to reduce public and private sector administrative costs. 
 85.9      Subd. 5.  [DATA CLASSIFICATION.] (a) Data collected to 
 85.10  fulfill the data and research initiatives authorized by sections 
 85.11  62J.301 to 62J.42 that identify individual patients or providers 
 85.12  are private data on individuals, and data not on individuals are 
 85.13  nonpublic data.  The commissioner shall establish procedures and 
 85.14  safeguards to ensure that data released by the commissioner is 
 85.15  in a form that does not identify specific patients, providers, 
 85.16  employers, individual or group purchasers, or other specific 
 85.17  individuals and organizations, except with the permission of the 
 85.18  affected individual or organization, or as permitted elsewhere 
 85.19  in this chapter. 
 85.20     (b) Raw unaggregated data collected from household and 
 85.21  employer surveys used by the commissioner to monitor the number 
 85.22  of uninsured individuals, reasons for lack of insurance 
 85.23  coverage, and to evaluate the effectiveness of health care 
 85.24  reform, are subject to the same data classifications as data 
 85.25  collected pursuant to sections 62J.301 to 62J.42. 
 85.26     (c) Notwithstanding sections 13.03, subdivisions 6 to 8; 
 85.27  13.10, subdivisions 1 to 4; and 138.17, data received by the 
 85.28  commissioner pursuant to sections 62J.301 to 62J.42, shall 
 85.29  retain the classification designated under this section and 
 85.30  shall not be disclosed other than pursuant to this section. 
 85.31     (d) Summary data collected to fulfill the data and research 
 85.32  initiatives authorized by sections 62J.301 to 62J.42 may be 
 85.33  disseminated under section 13.05, subdivision 7.  For the 
 85.34  purposes of this section, summary data includes nonpublic data 
 85.35  not on individuals. 
 85.36     (e) Notwithstanding paragraph (a), the commissioner may 
 86.1   publish nonpublic or private data collected pursuant to sections 
 86.2   62J.301 to 62J.42 on health care costs and spending, quality and 
 86.3   outcomes, and utilization for health care institutions, 
 86.4   individual health care professionals and groups of health care 
 86.5   professionals, group purchasers, and integrated service 
 86.6   networks, with a description of the methodology used for 
 86.7   analysis.  The commissioner may not make public any patient 
 86.8   identifying information except as specified in statute.  The 
 86.9   commissioner shall not reveal the name of an institution, group 
 86.10  of professionals, individual health care professional, group 
 86.11  purchaser, or integrated service network until after the 
 86.12  institution, group of professionals, individual health care 
 86.13  professional, group purchaser, or integrated service network has 
 86.14  had 21 days to review the data and comment.  The commissioner 
 86.15  shall include comments received in the release of the data. 
 86.16     (f) A provider or group purchaser may contest whether the 
 86.17  data meets the criteria of section 62J.311, subdivision 2, 
 86.18  paragraph (a), clause (2), in accordance with a contested case 
 86.19  proceeding as set forth in sections 14.57 to 14.62, subject to 
 86.20  appeal in accordance with sections 14.63 to 14.68.  To obtain a 
 86.21  contested case hearing, the provider or group purchaser must 
 86.22  make a written request to the commissioner before the end of the 
 86.23  time period for review and comment.  Within ten days of the 
 86.24  assignment of an administrative law judge, the provider or group 
 86.25  purchaser shall make a clear showing to the administrative law 
 86.26  judge of probable success in a hearing on the issue of whether 
 86.27  the data are accurate and valid and were collected based on the 
 86.28  criteria of section 62J.311, subdivision 2, paragraph (a), 
 86.29  clause (2).  If the administrative law judge determines that the 
 86.30  provider or group purchaser has made such a showing, the data 
 86.31  shall remain private or nonpublic during the contested case 
 86.32  proceeding and appeal.  If the administrative law judge 
 86.33  determines that the provider or group purchaser has not made 
 86.34  such a showing, the commissioner may publish the data 
 86.35  immediately, with comments received in the release of the data.  
 86.36  The contested case proceeding and subsequent appeal is not an 
 87.1   exclusive remedy and any person may seek a remedy pursuant to 
 87.2   section 13.08, subdivisions 1 to 4, or as otherwise authorized 
 87.3   by law. 
 87.4      Subd. 6.  [RULEMAKING.] The commissioner may adopt rules to 
 87.5   implement sections 62J.301 to 62J.42. 
 87.6      Subd. 7.  [FEDERAL AND OTHER GRANTS.] The commissioner may 
 87.7   seek federal funding, and funding from private and other 
 87.8   nonstate sources, for data and research initiatives. 
 87.9      Subd. 8.  [CONTRACTS AND GRANTS.] To carry out the duties 
 87.10  assigned in sections 62J.301 to 62J.42, the commissioner may 
 87.11  contract with or provide grants to private sector entities.  Any 
 87.12  contract or grant must require the private sector entity to 
 87.13  maintain the data which it receives according to the statutory 
 87.14  provisions applicable to the data. 
 87.15     Sec. 9.  [62J.322] [PROVIDER INFORMATION PILOT STUDY.] 
 87.16     The commissioner shall develop a pilot study to collect 
 87.17  comparative data from health care providers on opportunities and 
 87.18  barriers to the provision of quality, cost-effective health 
 87.19  care.  The provider information pilot study shall include 
 87.20  providers in community integrated service networks, integrated 
 87.21  service networks, health maintenance organizations, preferred 
 87.22  provider organizations, indemnity insurance plans, public 
 87.23  programs, and other health plan companies.  Health plan 
 87.24  companies and group purchasers shall provide to the commissioner 
 87.25  providers' names, health plan assignment, and other appropriate 
 87.26  data necessary for the commissioner to conduct the study.  The 
 87.27  provider information pilot study shall examine factors that 
 87.28  increase and hinder access to the provision of quality, 
 87.29  cost-effective health care.  The study may examine: 
 87.30     (1) administrative barriers and facilitators; 
 87.31     (2) time spent obtaining permission for appropriate and 
 87.32  necessary treatments; 
 87.33     (3) latitude to order appropriate and necessary tests, 
 87.34  pharmaceuticals, and referrals to specialty providers; 
 87.35     (4) assistance available for decreasing administrative and 
 87.36  other routine paperwork activities; 
 88.1      (5) continuing education opportunities provided; 
 88.2      (6) access to readily available information on diagnoses, 
 88.3   diseases, outcomes, and new technologies; 
 88.4      (7) continuous quality improvement activities; 
 88.5      (8) inclusion in administrative decision making; 
 88.6      (9) access to social services and other services that 
 88.7   facilitate continuity of care; 
 88.8      (10) economic incentives and disincentives; 
 88.9      (11) peer review procedures; and 
 88.10     (12) the prerogative to address public health needs. 
 88.11     In selecting additional data for collection, the 
 88.12  commissioner shall consider the:  (i) statistical validity of 
 88.13  the data; (ii) public need for the data; (iii) estimated expense 
 88.14  of collecting and reporting the data; and (iv) usefulness of the 
 88.15  data to identify barriers and opportunities to improve quality 
 88.16  care provision within health plan companies. 
 88.17     Sec. 10.  Minnesota Statutes 1994, section 62J.37, is 
 88.18  amended to read: 
 88.19     62J.37 [COST CONTAINMENT DATA FROM INTEGRATED SERVICE 
 88.20  NETWORKS.] 
 88.21     The commissioner shall require integrated service networks 
 88.22  operating under section 62N.06, subdivision 1, to submit data on 
 88.23  health care spending and revenue for calendar year 1994 1996 by 
 88.24  February 15, 1995 April 1, 1997.  Each February 15 April 1 
 88.25  thereafter, integrated service networks shall submit to the 
 88.26  commissioner data on health care spending and revenue for the 
 88.27  preceding calendar year.  The data must be provided in the form 
 88.28  specified by the commissioner.  To the extent that an integrated 
 88.29  service network is operated by a group purchaser under section 
 88.30  62N.06, subdivision 2, the integrated service network is exempt 
 88.31  from this section and the group purchaser must provide data on 
 88.32  the integrated service network under section 62J.38. 
 88.33     Sec. 11.  Minnesota Statutes 1994, section 62J.38, is 
 88.34  amended to read: 
 88.35     62J.38 [COST CONTAINMENT DATA FROM GROUP PURCHASERS.] 
 88.36     (a) The commissioner shall require group purchasers to 
 89.1   submit detailed data on total health care spending for calendar 
 89.2   years 1990, 1991, and 1992, and for each calendar year 1993 and 
 89.3   successive calendar years.  Group purchasers shall submit data 
 89.4   for the 1993 calendar year by April 1, 1994, and each April 1 
 89.5   thereafter shall submit data for the preceding calendar year. 
 89.6      (b) The commissioner shall require each group purchaser to 
 89.7   submit data on revenue, expenses, and member months, as 
 89.8   applicable.  Revenue data must distinguish between premium 
 89.9   revenue and revenue from other sources and must also include 
 89.10  information on the amount of revenue in reserves and changes in 
 89.11  reserves.  Expenditure data, including raw data from claims, 
 89.12  must may be provided separately for the following categories or 
 89.13  for other categories required by the commissioner:  physician 
 89.14  services, dental services, other professional services, 
 89.15  inpatient hospital services, outpatient hospital services, 
 89.16  emergency and out-of-area care, pharmacy services and 
 89.17  prescription drugs other nondurable medical goods, mental health 
 89.18  services, and chemical dependency services, other expenditures, 
 89.19  subscriber liability, and administrative costs.  The 
 89.20  commissioner may require each group purchaser to submit any 
 89.21  other data, including data in unaggregated form, for the 
 89.22  purposes of developing spending estimates, setting spending 
 89.23  limits, and monitoring actual spending and costs. 
 89.24     (c) The commissioner may collect information on: 
 89.25     (1) premiums, benefit levels, managed care procedures, and 
 89.26  other features of health plan companies; 
 89.27     (2) prices, provider experience, and other information for 
 89.28  services less commonly covered by insurance or for which 
 89.29  patients commonly face significant out-of-pocket expenses; and 
 89.30     (3) information on health care services not provided 
 89.31  through health plan companies, including information on prices, 
 89.32  costs, expenditures, and utilization. 
 89.33     (c) State agencies and (d) All other group purchasers shall 
 89.34  provide the required data using a uniform format and uniform 
 89.35  definitions, as prescribed by the commissioner. 
 89.36     Sec. 12.  Minnesota Statutes 1994, section 62J.40, is 
 90.1   amended to read: 
 90.2      62J.40 [COST CONTAINMENT DATA FROM STATE AGENCIES AND OTHER 
 90.3   GOVERNMENTAL UNITS.] 
 90.4      In addition to providing the data required under section 
 90.5   62J.38, the commissioners of human services, commerce, labor and 
 90.6   industry, and employee relations and (a) All other state 
 90.7   departments or agencies that administer one or more health care 
 90.8   programs shall provide to the commissioner of health any 
 90.9   additional data on the health care programs they administer that 
 90.10  is requested by the commissioner of health, including data in 
 90.11  unaggregated form, for purposes of developing estimates of 
 90.12  spending, setting spending limits, and monitoring actual 
 90.13  spending.  The data must be provided at the times and in the 
 90.14  form specified by the commissioner of health. 
 90.15     (b) For purposes of estimating total health care spending 
 90.16  as provided in section 62J.301, subdivision 4, paragraph (c), 
 90.17  all local governmental units shall provide expenditure data to 
 90.18  the commissioner.  The commissioner shall consult with 
 90.19  representatives of the affected local government units in 
 90.20  establishing definitions, reporting formats, and reporting time 
 90.21  frames.  As much as possible, the data shall be collected in a 
 90.22  manner that ensures that the data collected is consistent with 
 90.23  data collected from the private sector and minimizes the 
 90.24  reporting burden to local government. 
 90.25     Sec. 13.  Minnesota Statutes 1994, section 62J.41, 
 90.26  subdivision 1, is amended to read: 
 90.27     Subdivision 1.  [COST CONTAINMENT DATA TO BE COLLECTED FROM 
 90.28  PROVIDERS.] The commissioner shall require health care providers 
 90.29  to collect and provide both patient specific information and 
 90.30  descriptive and financial aggregate data on: 
 90.31     (1) the total number of patients served; 
 90.32     (2) the total number of patients served by state of 
 90.33  residence and Minnesota county; 
 90.34     (3) the site or sites where the health care provider 
 90.35  provides services; 
 90.36     (4) the number of individuals employed, by type of 
 91.1   employee, by the health care provider; 
 91.2      (5) the services and their costs for which no payment was 
 91.3   received; 
 91.4      (6) total revenue by type of payer or by groups of payers, 
 91.5   including but not limited to, revenue from Medicare, medical 
 91.6   assistance, MinnesotaCare, nonprofit health service plan 
 91.7   corporations, commercial insurers, integrated service networks, 
 91.8   health maintenance organizations, and individual patients; 
 91.9      (7) revenue from research activities; 
 91.10     (8) revenue from educational activities; 
 91.11     (9) revenue from out-of-pocket payments by patients; 
 91.12     (10) revenue from donations; and 
 91.13     (11) any other data required by the commissioner, including 
 91.14  data in unaggregated form, for the purposes of developing 
 91.15  spending estimates, setting spending limits, monitoring actual 
 91.16  spending, and monitoring costs and quality.  
 91.17  The commissioner may, by rule, modify the data submission 
 91.18  categories listed above if the commissioner determines that this 
 91.19  will reduce the reporting burden on providers without having a 
 91.20  significant negative effect on necessary data collection efforts.
 91.21     Sec. 14.  Minnesota Statutes 1994, section 62J.41, 
 91.22  subdivision 2, is amended to read: 
 91.23     Subd. 2.  [ANNUAL MONITORING AND ESTIMATES.] The 
 91.24  commissioner shall require health care providers to submit the 
 91.25  required data for the period July 1, 1993 to December 31, 1993, 
 91.26  by April 1, 1994.  Health care providers shall submit data for 
 91.27  the 1994 calendar year by April 1, 1995, and each April 1 
 91.28  thereafter shall submit data for the preceding calendar year.  
 91.29  The commissioner of revenue may collect health care service 
 91.30  revenue data from health care providers, if the commissioner of 
 91.31  revenue and the commissioner agree that this is the most 
 91.32  efficient method of collecting the data.  The commissioner of 
 91.33  revenue shall provide any data collected to the commissioner of 
 91.34  health commissioners of health and revenue shall have the 
 91.35  authority to share data collected pursuant to this section. 
 91.36     Sec. 15.  [62J.451] [MINNESOTA HEALTH DATA INSTITUTE.] 
 92.1      Subdivision 1.  [STATEMENT OF PURPOSE.] It is the intention 
 92.2   of the legislature to create a partnership between the public 
 92.3   and the private sectors for the coordination of efforts related 
 92.4   to the collection, analysis, and dissemination of cost, access, 
 92.5   quality, utilization, and other performance data, to the extent 
 92.6   administratively efficient and effective. 
 92.7      The Minnesota health data institute shall be a partnership 
 92.8   between the commissioner of health and a board of directors 
 92.9   representing group purchasers, health care providers, and 
 92.10  consumers. 
 92.11     Subd. 2.  [DEFINITIONS.] For purposes of this section and 
 92.12  section 62J.452, the following definitions apply.  
 92.13     (a) "Analysis" means the identification of selected data 
 92.14  elements, a description of the methodology used to select or 
 92.15  analyze those data elements, and any other commentary, 
 92.16  conclusions, or other descriptive material that the health data 
 92.17  institute determines is appropriately included, all of which is 
 92.18  undertaken by the health data institute for one or more of the 
 92.19  purposes or objectives set forth in subdivisions 1 and 3, or by 
 92.20  other authorized researchers pursuant to section 62J.452, 
 92.21  subdivision 6.  
 92.22     (b) "Board" means the board of directors of the health data 
 92.23  institute. 
 92.24     (c) "Database" means a compilation of selected data 
 92.25  elements by the health data institute for the purpose of 
 92.26  conducting an analysis or facilitating an analysis by another 
 92.27  party. 
 92.28     (d) "Electronic data interchange system" or "EDI system" 
 92.29  means the electronic data system developed, implemented, 
 92.30  maintained, or operated by the health data institute, as 
 92.31  permitted by subdivisions 3, clause (2), and 5, according to 
 92.32  standards adopted by the health data institute. 
 92.33     (e) "Encounter level data" means data related to the 
 92.34  utilization of health care services by, and the provision of 
 92.35  health care services to, individual patients, enrollees, or 
 92.36  insureds, including claims data, abstracts of medical records, 
 93.1   and data from patient interviews and patient surveys. 
 93.2      (f) "Group purchaser" has the definition provided in 
 93.3   section 62J.03, subdivision 6. 
 93.4      (g) "Health data institute" means the public-private 
 93.5   partnership between the commissioner of health and the board of 
 93.6   directors established under this section. 
 93.7      (h) "Health plan company" has the definition provided in 
 93.8   section 62Q.01, subdivision 4. 
 93.9      (i) "Industry participant" means any group purchaser; 
 93.10  employers with employee health benefit plans, regardless of the 
 93.11  manner in which benefits are provided or paid for under the 
 93.12  plan; provider, or state agency or political subdivision, with 
 93.13  the exception of professional licensing boards or law 
 93.14  enforcement agencies. 
 93.15     (j) "Industry participant identifying data" means any data 
 93.16  that identifies a specific industry participant directly, or 
 93.17  which identifies characteristics which reasonably could uniquely 
 93.18  identify such specific industry participant circumstantially.  
 93.19  For purposes of this definition, an industry participant is not 
 93.20  "directly identified" by the use of a unique identification 
 93.21  number, provided that the number is coded or encrypted through a 
 93.22  reliable system that can reasonably assure that such numbers 
 93.23  cannot be traced back by an unauthorized person to determine the 
 93.24  identity of an industry participant with a particular number. 
 93.25     (k) "Patient" is an individual as defined in section 13.02, 
 93.26  subdivision 8, except that "patient" does not include any 
 93.27  industry participant acting as an industry participant rather 
 93.28  than as a consumer of health care services or coverage. 
 93.29     (l) "Patient identifying data" means data that identifies a 
 93.30  patient directly, or which identifies characteristics which 
 93.31  reasonably could uniquely identify such specific patients 
 93.32  circumstantially.  For purposes of this definition, a patient is 
 93.33  not "directly identified" by the use of a unique identification 
 93.34  number, provided that the number is coded or encrypted through a 
 93.35  reliable system that can reasonably assure that such numbers 
 93.36  cannot be traced back by an unauthorized person to determine the 
 94.1   identity of a patient with a particular number. 
 94.2      (m) "Performance" means the degree to which a health plan 
 94.3   company, provider organization, or other entity delivers 
 94.4   quality, cost-effective services compared to other similar 
 94.5   entities, or to a given level of care set as a goal to be 
 94.6   attained, and in compliance with section 62N.15, subdivision 6, 
 94.7   paragraph (c). 
 94.8      (n) "Provider" or "health care provider" has the meaning 
 94.9   given in section 62J.03, subdivision 8. 
 94.10     (o) "Roster data" with regard to the enrollee of a health 
 94.11  plan company or group purchaser means an enrollee's name, 
 94.12  address, telephone number, date of birth, gender, and enrollment 
 94.13  status under a group purchaser's health plan.  "Roster data" 
 94.14  with regard to a patient of a provider means the patient's name, 
 94.15  address, telephone number, date of birth, gender, and date or 
 94.16  dates treated, including, if applicable, the date of admission 
 94.17  and the date of discharge. 
 94.18     Subd. 3.  [OBJECTIVES OF THE HEALTH DATA INSTITUTE.] (a) 
 94.19  The health data institute shall: 
 94.20     (1) develop a data collection plan that provides 
 94.21  coordination for public and private sector data collection 
 94.22  efforts related to the performance measurement and improvement 
 94.23  of the health care delivery system; 
 94.24     (2) establish an electronic data interchange system that 
 94.25  may be used by the public and private sectors to exchange health 
 94.26  care data in a cost-efficient manner; 
 94.27     (3) develop a mechanism to collect, analyze, and 
 94.28  disseminate information for comparing the cost and quality of 
 94.29  health care delivery system components, including health plan 
 94.30  companies and provider organizations; 
 94.31     (4) develop policies and procedures to protect the privacy 
 94.32  of individual-identifiable data, and to assure appropriate 
 94.33  access to and disclosure of information specific to individual 
 94.34  health plan companies and provider organizations collected 
 94.35  pursuant to this section; and 
 94.36     (5) use and build upon existing data sources and 
 95.1   performance measurement efforts, and improve upon these existing 
 95.2   data sources and measurement efforts through the integration of 
 95.3   data systems and the standardization of concepts, to the 
 95.4   greatest extent possible. 
 95.5      (b) In carrying out its responsibilities, the health data 
 95.6   institute may contract with private sector organizations 
 95.7   currently collecting data on specific health-related areas of 
 95.8   interest to the health data institute, in order to achieve 
 95.9   maximum efficiency and cost-effectiveness.  The health data 
 95.10  institute may establish links between the data collected and 
 95.11  maintained by the health data institute and private sector data 
 95.12  through the health data institute's electronic data interchange 
 95.13  system, and may implement methods to streamline data collection 
 95.14  in order to reduce public and private sector administrative 
 95.15  costs.  The health data institute may use or establish links 
 95.16  with public sector data, such as that existing for medical 
 95.17  assistance and Medicare, to the extent permitted by state and 
 95.18  federal law.  The health data institute may also recommend 
 95.19  methods to streamline public sector data collection in order to 
 95.20  reduce public and private sector administrative costs. 
 95.21     (c) Any contract with a private sector entity must require 
 95.22  the private sector entity to maintain the data collected 
 95.23  according to the applicable data privacy provisions, as provided 
 95.24  in section 62J.452. 
 95.25     Subd. 4.  [DATA COLLECTION PLAN.] (a) The health data 
 95.26  institute shall develop a plan that: 
 95.27     (1) identifies the health care data needs of consumers, 
 95.28  group purchasers, providers, and the state regarding the 
 95.29  performance of health care delivery system components including 
 95.30  health plan companies and provider organizations; 
 95.31     (2) specifies data collection objectives, strategies, 
 95.32  priorities, cost estimates, administrative and operational 
 95.33  guidelines, and implementation timelines for the health data 
 95.34  institute; and 
 95.35     (3) identifies the data needed for the health data 
 95.36  institute to carry out the duties assigned in this section.  The 
 96.1   plan must take into consideration existing data sources and data 
 96.2   sources that can easily be made uniform for links to other data 
 96.3   sets. 
 96.4      (b) This plan shall be updated on an annual basis. 
 96.5      Subd. 5.  [HEALTH CARE ELECTRONIC DATA INTERCHANGE 
 96.6   SYSTEM.] (a) The health data institute shall establish an 
 96.7   electronic data interchange system that electronically 
 96.8   transmits, collects, archives, and provides users of data with 
 96.9   the data necessary for their specific interests, in order to 
 96.10  promote a high quality, cost-effective, consumer-responsive 
 96.11  health care system.  This public-private information system 
 96.12  shall be developed to make health care claims processing and 
 96.13  financial settlement transactions more efficient and to provide 
 96.14  an efficient, unobtrusive method for meeting the shared 
 96.15  electronic data interchange needs of consumers, group 
 96.16  purchasers, providers, and the state. 
 96.17     (b) The health data institute shall operate the Minnesota 
 96.18  center for health care electronic data interchange established 
 96.19  in section 62J.57, and shall integrate the goals, objectives, 
 96.20  and activities of the center with those of the health data 
 96.21  institute's electronic data interchange system. 
 96.22     Subd. 6.  [PERFORMANCE MEASUREMENT INFORMATION.] (a) The 
 96.23  health data institute shall develop and implement a performance 
 96.24  measurement plan to analyze and disseminate health care data to 
 96.25  address the needs of consumers, group purchasers, providers, and 
 96.26  the state for performance measurement at various levels of the 
 96.27  health care system in the state.  The plan shall include a 
 96.28  mechanism to: 
 96.29     (1) provide comparative information to consumers, 
 96.30  purchasers, and policymakers for use in performance assessment 
 96.31  of health care system components, including health plan 
 96.32  companies and provider organizations; 
 96.33     (2) complement and enhance, but not replace, existing 
 96.34  internal performance improvement efforts of health care 
 96.35  providers and plans; and 
 96.36     (3) reduce unnecessary administrative costs in the health 
 97.1   care system by eliminating duplication in the collection of data 
 97.2   for both evaluation and improvement efforts. 
 97.3      (b) Performance measurement at the provider organization 
 97.4   level may be conducted on a condition-specific basis.  Criteria 
 97.5   for selecting conditions for measurement may include: 
 97.6      (1) relevance to consumers and purchasers; 
 97.7      (2) prevalence of conditions; 
 97.8      (3) costs related to diagnosis and treatment; 
 97.9      (4) demonstrated efficacy of treatments; 
 97.10     (5) evidence of variability in management; 
 97.11     (6) existence of risk adjustment methodologies to control 
 97.12  for patient and other risk factors contributing to variation in 
 97.13  cost and quality; 
 97.14     (7) existence of practice guidelines which are in 
 97.15  compliance with section 62N.15, subdivision 6, paragraph (c), 
 97.16  and which are related to the condition; and 
 97.17     (8) relevance of the condition to public health goals. 
 97.18     (c) Performance measurement on a condition-specific basis 
 97.19  may consider multiple dimensions of performance, including, but 
 97.20  not limited to: 
 97.21     (1) accessibility; 
 97.22     (2) appropriateness; 
 97.23     (3) effectiveness, including clinical outcomes, patient 
 97.24  satisfaction, and functional status; and 
 97.25     (4) efficiency. 
 97.26     (d) Collection of data for condition-specific performance 
 97.27  measurement must be in compliance with section 62N.15, 
 97.28  subdivision 6, paragraph (c), and may be conducted at the 
 97.29  patient level.  Encounter-level data collected for this purpose 
 97.30  may include unique identifiers for patients, providers, payers, 
 97.31  and employers in order to link episodes of care across care 
 97.32  settings and over time.  The health data institute must encrypt 
 97.33  patient identifiers to prevent identification of individual 
 97.34  patients and to enable release of otherwise private data to 
 97.35  researchers, providers, and group purchasers in a manner 
 97.36  consistent with chapter 13 and sections 62J.452 and 144.335. 
 98.1      Subd. 6a.  [HEALTH PLAN COMPANY PERFORMANCE 
 98.2   MEASUREMENT.] As part of the performance measurement plan 
 98.3   specified in subdivision 6, the health data institute shall 
 98.4   develop a mechanism to assess the performance of health plan 
 98.5   companies, and to disseminate this information through reports 
 98.6   and other means to consumers, purchasers, policymakers, and 
 98.7   other interested parties, consistent with the data policies 
 98.8   specified in section 62J.452.  
 98.9      Subd. 6b.  [CONSUMER SURVEYS.] (a) The health data 
 98.10  institute shall develop and implement a mechanism for collecting 
 98.11  comparative data on consumer perceptions of the health care 
 98.12  system, including consumer satisfaction, through adoption of a 
 98.13  standard consumer survey.  This survey shall include enrollees 
 98.14  in community integrated service networks, integrated service 
 98.15  networks, health maintenance organizations, preferred provider 
 98.16  organizations, indemnity insurance plans, public programs, and 
 98.17  other health plan companies.  The health data institute, in 
 98.18  consultation with the health care commission, shall determine a 
 98.19  mechanism for the inclusion of the uninsured.  This consumer 
 98.20  survey may be conducted every two years.  A focused survey may 
 98.21  be conducted on the off years.  Health plan companies and group 
 98.22  purchasers shall provide to the health data institute roster 
 98.23  data as defined in subdivision 2, including the names, 
 98.24  addresses, and telephone numbers of enrollees and former 
 98.25  enrollees and other data necessary for the completion of this 
 98.26  survey.  This roster data provided by the health plan companies 
 98.27  and group purchasers is classified as provided under section 
 98.28  62J.452.  The health data institute may analyze and prepare 
 98.29  findings from the raw, unaggregated data, and the findings from 
 98.30  this survey may be included in the health plan company 
 98.31  performance reports specified in subdivision 6a, and in other 
 98.32  reports developed and disseminated by the health data institute 
 98.33  and the commissioner.  The raw, unaggregated data is classified 
 98.34  as provided under section 62J.452, and may be made available by 
 98.35  the health data institute to the extent permitted under section 
 98.36  62J.452.  The health data institute shall provide raw, 
 99.1   unaggregated data to the commissioner.  The survey may include 
 99.2   information on the following subjects: 
 99.3      (1) enrollees' overall satisfaction with their health care 
 99.4   plan; 
 99.5      (2) consumers' perception of access to emergency, urgent, 
 99.6   routine, and preventive care, including locations, hours, 
 99.7   waiting times, and access to care when needed; 
 99.8      (3) premiums and costs; 
 99.9      (4) technical competence of providers; 
 99.10     (5) communication, courtesy, respect, reassurance, and 
 99.11  support; 
 99.12     (6) choice and continuity of providers; 
 99.13     (7) continuity of care; 
 99.14     (8) outcomes of care; 
 99.15     (9) services offered by the plan, including range of 
 99.16  services, coverage for preventive and routine services, and 
 99.17  coverage for illness and hospitalization; 
 99.18     (10) availability of information; and 
 99.19     (11) paperwork. 
 99.20     (b) The health data institute shall appoint a consumer 
 99.21  advisory group which shall consist of 13 individuals, 
 99.22  representing enrollees from public and private health plan 
 99.23  companies and programs and two uninsured consumers, to advise 
 99.24  the health data institute on issues of concern to consumers.  
 99.25  The advisory group must have at least one member from each 
 99.26  regional coordinating board region of the state.  The advisory 
 99.27  group expires June 30, 1996. 
 99.28     Subd. 6c.  [PROVIDER ORGANIZATION PERFORMANCE MEASUREMENT.] 
 99.29  As part of the performance measurement plan specified in 
 99.30  subdivision 6, the health data institute shall develop a 
 99.31  mechanism to assess the performance of hospitals and other 
 99.32  provider organizations, and to disseminate this information to 
 99.33  consumers, purchasers, policymakers, and other interested 
 99.34  parties, consistent with the data policies specified in section 
 99.35  62J.452.  Data to be collected may include structural 
 99.36  characteristics including staff-mix and nurse-patient ratios.