1.1                          A bill for an act 
  1.2             relating to health insurance; limiting the growth 
  1.3             limits; requiring loss ratio disclosures; repealing 
  1.4             the health care commission; modifying the regional 
  1.5             coordinating boards; modifying the health technology 
  1.6             advisory committee; modifying the eligibility and the 
  1.7             asset requirements for the MinnesotaCare program; 
  1.8             providing penalties; modifying the enforcement 
  1.9             mechanisms for the provider tax pass-through; 
  1.10            providing enrollee access to discounted provider fees 
  1.11            under certain plans; modifying mandatory Medicare 
  1.12            assignment; amending Minnesota Statutes 1996, sections 
  1.13            62A.021, by adding a subdivision; 62A.61; 62A.65, 
  1.14            subdivision 3; 62J.04, subdivisions 1, 1a, and 9; 
  1.15            62J.041; 62J.06; 62J.07, subdivisions 1 and 3; 62J.09, 
  1.16            subdivision 1; 62J.15, subdivision 1; 62J.152, 
  1.17            subdivisions 1, 2, 4, and 5; 62J.17, subdivision 6a; 
  1.18            62J.22; 62J.25; 62J.2914, subdivision 1; 62J.2915; 
  1.19            62J.2916, subdivision 1; 62J.2917, subdivision 2; 
  1.20            62J.2921, subdivision 2; 62J.451, subdivision 6b; 
  1.21            62L.08, subdivision 8; 62N.25, subdivision 5; 62Q.03, 
  1.22            subdivision 5a; 62Q.33, subdivision 2; 256.9354, 
  1.23            subdivision 5; 256.9355, by adding a subdivision; 
  1.24            256.9357, subdivision 1; and 295.582; proposing coding 
  1.25            for new law in Minnesota Statutes, chapters 62Q; and 
  1.26            256; repealing Minnesota Statutes 1996, sections 
  1.27            62J.03, subdivision 3; 62J.041, subdivision 7; 
  1.28            62J.042; 62J.05; 62J.051; 62J.09, subdivision 3a; 
  1.29            62N.02, subdivision 3; 62Q.165, subdivision 3; 62Q.25; 
  1.30            62Q.29; and 62Q.41; Laws 1993, chapter 247, article 4, 
  1.31            section 8; Laws 1994, chapter 625, article 5, section 
  1.32            5, subdivision 1, as amended; Laws 1995, chapter 96, 
  1.33            section 2; and Laws 1995, First Special Session 
  1.34            chapter 3, article 13, section 2. 
  1.35  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.36     Section 1.  Minnesota Statutes 1996, section 62A.021, is 
  1.37  amended by adding a subdivision to read: 
  1.38     Subd. 3.  [LOSS RATIO DISCLOSURE.] Each health care policy 
  1.39  form or health care certificate form for which subdivision 1 
  1.40  requires the commissioner's approval of premium rates shall 
  2.1   contain on its front page the following statement: 
  2.2      Minnesota law requires that this policy or contract include 
  2.3   this paragraph disclosing the loss ratio.  The loss ratio is the 
  2.4   average percentage of premiums that is expected to be paid for 
  2.5   health care for the enrollee.  This policy or contract is 
  2.6   expected to have a loss ratio of (fill in estimated loss ratio 
  2.7   accepted by commissioner).  The lowest loss ratio permitted by 
  2.8   state law for this policy or contract is (fill in applicable 
  2.9   minimum loss ratio). 
  2.10     Sec. 2.  Minnesota Statutes 1996, section 62A.61, is 
  2.11  amended to read: 
  2.12     62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO 
  2.13  DETERMINE USUAL AND CUSTOMARY FEES.] 
  2.14     (a) A health carrier that bases reimbursement to health 
  2.15  care providers upon a usual and customary fee must maintain in 
  2.16  its office a copy of a description of the methodology used to 
  2.17  calculate fees including at least the following: 
  2.18     (1) the frequency of the determination of usual and 
  2.19  customary fees; 
  2.20     (2) a general description of the methodology used to 
  2.21  determine usual and customary fees; and 
  2.22     (3) the percentile of usual and customary fees that 
  2.23  determines the maximum allowable reimbursement. 
  2.24     (b) A health carrier must provide a copy of the information 
  2.25  described in paragraph (a) to the Minnesota health care 
  2.26  commission, the commissioner of health, or the commissioner of 
  2.27  commerce, upon request. 
  2.28     (c) The commissioner of health or the commissioner of 
  2.29  commerce, as appropriate, may use to enforce this section any 
  2.30  enforcement powers otherwise available to the commissioner with 
  2.31  respect to the health carrier.  The appropriate commissioner 
  2.32  shall enforce compliance with a request made under this section 
  2.33  by the Minnesota health care commission, at the request of the 
  2.34  commissioner.  The commissioner of health or commerce, as 
  2.35  appropriate, may require health carriers to provide the 
  2.36  information required under this section and may use any powers 
  3.1   granted under other laws relating to the regulation of health 
  3.2   carriers to enforce compliance. 
  3.3      (d) For purposes of this section, "health carrier" has the 
  3.4   meaning given in section 62A.011. 
  3.5      Sec. 3.  Minnesota Statutes 1996, section 62A.65, 
  3.6   subdivision 3, is amended to read: 
  3.7      Subd. 3.  [PREMIUM RATE RESTRICTIONS.] No individual health 
  3.8   plan may be offered, sold, issued, or renewed to a Minnesota 
  3.9   resident unless the premium rate charged is determined in 
  3.10  accordance with the following requirements:  
  3.11     (a) Premium rates must be no more than 25 percent above and 
  3.12  no more than 25 percent below the index rate charged to 
  3.13  individuals for the same or similar coverage, adjusted pro rata 
  3.14  for rating periods of less than one year.  The premium 
  3.15  variations permitted by this paragraph must be based only upon 
  3.16  health status, claims experience, and occupation.  For purposes 
  3.17  of this paragraph, health status includes refraining from 
  3.18  tobacco use or other actuarially valid lifestyle factors 
  3.19  associated with good health, provided that the lifestyle factor 
  3.20  and its effect upon premium rates have been determined by the 
  3.21  commissioner to be actuarially valid and have been approved by 
  3.22  the commissioner.  Variations permitted under this paragraph 
  3.23  must not be based upon age or applied differently at different 
  3.24  ages.  This paragraph does not prohibit use of a constant 
  3.25  percentage adjustment for factors permitted to be used under 
  3.26  this paragraph. 
  3.27     (b) Premium rates may vary based upon the ages of covered 
  3.28  persons only as provided in this paragraph.  In addition to the 
  3.29  variation permitted under paragraph (a), each health carrier may 
  3.30  use an additional premium variation based upon age of up to plus 
  3.31  or minus 50 percent of the index rate. 
  3.32     (c) A health carrier may request approval by the 
  3.33  commissioner to establish no more than three geographic regions 
  3.34  and to establish separate index rates for each region, provided 
  3.35  that the index rates do not vary between any two regions by more 
  3.36  than 20 percent.  Health carriers that do not do business in the 
  4.1   Minneapolis/St. Paul metropolitan area may request approval for 
  4.2   no more than two geographic regions, and clauses (2) and (3) do 
  4.3   not apply to approval of requests made by those health 
  4.4   carriers.  The commissioner may grant approval if the following 
  4.5   conditions are met: 
  4.6      (1) the geographic regions must be applied uniformly by the 
  4.7   health carrier; 
  4.8      (2) one geographic region must be based on the 
  4.9   Minneapolis/St. Paul metropolitan area; 
  4.10     (3) for each geographic region that is rural, the index 
  4.11  rate for that region must not exceed the index rate for the 
  4.12  Minneapolis/St. Paul metropolitan area; and 
  4.13     (4) the health carrier provides actuarial justification 
  4.14  acceptable to the commissioner for the proposed geographic 
  4.15  variations in index rates, establishing that the variations are 
  4.16  based upon differences in the cost to the health carrier of 
  4.17  providing coverage. 
  4.18     (d) Health carriers may use rate cells and must file with 
  4.19  the commissioner the rate cells they use.  Rate cells must be 
  4.20  based upon the number of adults or children covered under the 
  4.21  policy and may reflect the availability of Medicare coverage.  
  4.22  The rates for different rate cells must not in any way reflect 
  4.23  generalized differences in expected costs between principal 
  4.24  insureds and their spouses. 
  4.25     (e) In developing its index rates and premiums for a health 
  4.26  plan, a health carrier shall take into account only the 
  4.27  following factors: 
  4.28     (1) actuarially valid differences in rating factors 
  4.29  permitted under paragraphs (a) and (b); and 
  4.30     (2) actuarially valid geographic variations if approved by 
  4.31  the commissioner as provided in paragraph (c). 
  4.32     (f) All premium variations must be justified in initial 
  4.33  rate filings and upon request of the commissioner in rate 
  4.34  revision filings.  All rate variations are subject to approval 
  4.35  by the commissioner. 
  4.36     (g) The loss ratio must comply with the section 62A.021 
  5.1   requirements for individual health plans. 
  5.2      (h) The rates must not be approved, unless the commissioner 
  5.3   has determined that the rates are reasonable.  In determining 
  5.4   reasonableness, the commissioner shall consider the growth rates 
  5.5   applied cost containment goals established under section 62J.04, 
  5.6   subdivision 1, paragraph (b), to the calendar year or years that 
  5.7   the proposed premium rate would be in effect, actuarially valid 
  5.8   changes in risks associated with the enrollee populations, and 
  5.9   actuarially valid changes as a result of statutory changes in 
  5.10  Laws 1992, chapter 549.  
  5.11     Sec. 4.  Minnesota Statutes 1996, section 62J.04, 
  5.12  subdivision 1, is amended to read: 
  5.13     Subdivision 1.  [LIMITS ON THE RATE OF GROWTH COST 
  5.14  CONTAINMENT GOALS.] (a) The commissioner of health shall set 
  5.15  annual limits on the rate of growth of cost containment goals 
  5.16  for public and private spending on health care services for 
  5.17  Minnesota residents, as provided in paragraph (b).  The limits 
  5.18  on growth cost containment goals must be set at levels the 
  5.19  commissioner determines to be realistic and achievable but that 
  5.20  will reduce the rate of growth in health care spending by at 
  5.21  least ten percent per year for the next five years.  The 
  5.22  commissioner shall set limits on growth cost containment goals 
  5.23  based on available data on spending and growth trends, including 
  5.24  data from group purchasers, national data on public and private 
  5.25  sector health care spending and cost trends, and trend 
  5.26  information from other states. 
  5.27     (b) The commissioner shall set the following annual limits 
  5.28  on the rate of growth of cost containment goals for public and 
  5.29  private spending on health care services for Minnesota residents:
  5.30     (1) for calendar year 1994, the rate of growth cost 
  5.31  containment goal must not exceed the change in the regional 
  5.32  consumer price index for urban consumers for calendar year 1993 
  5.33  plus 6.5 percentage points; 
  5.34     (2) for calendar year 1995, the rate of growth cost 
  5.35  containment goal must not exceed the change in the regional 
  5.36  consumer price index for urban consumers for calendar year 1994 
  6.1   plus 5.3 percentage points; 
  6.2      (3) for calendar year 1996, the rate of growth cost 
  6.3   containment goal must not exceed the change in the regional 
  6.4   consumer price index for urban consumers for calendar year 1995 
  6.5   plus 4.3 percentage points; 
  6.6      (4) for calendar year 1997, the rate of growth cost 
  6.7   containment goal must not exceed the change in the regional 
  6.8   consumer price index for urban consumers for calendar year 1996 
  6.9   plus 3.4 percentage points; and 
  6.10     (5) for calendar year 1998, the rate of growth cost 
  6.11  containment goal must not exceed the change in the regional 
  6.12  consumer price index for urban consumers for calendar year 1997 
  6.13  plus 2.6 percentage points; and 
  6.14     (6) for calendar years after 1998, the commissioner shall 
  6.15  set annual cost containment goals based on available data on 
  6.16  spending and growth trends, including data from group 
  6.17  purchasers, national data on public and private sector health 
  6.18  care spending and cost trends, and trend information from other 
  6.19  states. 
  6.20     The commissioner shall adjust the growth limit set for 
  6.21  calendar year 1995 to recover savings in health care spending 
  6.22  required for the period July 1, 1993 to December 31, 1993. 
  6.23     (c) The commissioner shall publish: 
  6.24     (1) the projected limits cost containment goal in the State 
  6.25  Register by April 15 of the year immediately preceding the year 
  6.26  in which the limit cost containment goal will be effective 
  6.27  except for the year 1993, in which the limit cost containment 
  6.28  goal shall be published by July 1, 1993; 
  6.29     (2) the quarterly change in the regional consumer price 
  6.30  index for urban consumers; and 
  6.31     (3) the health care financing administration forecast for 
  6.32  total growth in the national health care expenditures.  In 
  6.33  setting an annual limit the cost containment goals, the 
  6.34  commissioner is exempt from the rulemaking requirements of 
  6.35  chapter 14.  The commissioner's decision on an annual limit the 
  6.36  cost containment goals is not appealable. 
  7.1      Sec. 5.  Minnesota Statutes 1996, section 62J.04, 
  7.2   subdivision 1a, is amended to read: 
  7.3      Subd. 1a.  [ADJUSTED GROWTH LIMITS AND ENFORCEMENT COST 
  7.4   CONTAINMENT GOALS.] (a) The commissioner shall publish the final 
  7.5   adjusted growth limit cost containment goal in the State 
  7.6   Register by January 31 of the year that the expenditure limit 
  7.7   cost containment goal is to be in effect.  The adjusted limit 
  7.8   cost containment goal must reflect the actual regional consumer 
  7.9   price index for urban consumers for the previous calendar year, 
  7.10  and may deviate from the previously published projected growth 
  7.11  limits cost containment goal to reflect differences between the 
  7.12  actual regional consumer price index for urban consumers and the 
  7.13  projected Consumer Price Index for urban consumers.  The 
  7.14  commissioner shall report to the legislature by February 15 of 
  7.15  each year on the implementation of the growth limits cost 
  7.16  containment goal.  This annual report shall describe the 
  7.17  differences between the projected increase in health care 
  7.18  expenditures, the actual expenditures based on data collected, 
  7.19  and the impact and validity of growth limits cost containment 
  7.20  goals within the overall health care reform strategy. 
  7.21     (b) The commissioner, in consultation with the Minnesota 
  7.22  health care commission, shall research and include in the annual 
  7.23  report required in paragraph (a) for 1996, recommendations 
  7.24  regarding the implementation of growth limits for health plan 
  7.25  companies and providers.  The commissioner shall: 
  7.26     (1) consider both spending and revenue approaches and 
  7.27  report on the implementation of the interim limits as defined in 
  7.28  sections 62J.041 and 62J.042; 
  7.29     (2) make recommendations regarding the enforcement 
  7.30  mechanism and consider mechanisms to adjust future growth limits 
  7.31  as well as mechanisms to establish financial penalties for 
  7.32  noncompliance; 
  7.33     (3) address the feasibility of systemwide limits imposed on 
  7.34  all integrated service networks; and 
  7.35     (4) make recommendations on the most effective way to 
  7.36  implement growth limits on the fee-for-service system in the 
  8.1   absence of a regulated all-payer system. 
  8.2      (c) The commissioner shall enforce limits on growth in 
  8.3   spending for health plan companies and revenues for providers.  
  8.4   If the commissioner determines that artificial inflation or 
  8.5   padding of costs or prices has occurred in anticipation of the 
  8.6   implementation of growth limits, the commissioner may adjust the 
  8.7   base year spending totals or growth limits or take other action 
  8.8   to reverse the effect of the artificial inflation or padding. 
  8.9      (d) The commissioner shall impose and enforce overall 
  8.10  limits on growth in spending for health plan companies, with 
  8.11  adjustments for changes in enrollment, benefits, severity, and 
  8.12  risks.  If a health plan company exceeds the growth limits, the 
  8.13  commissioner may impose financial penalties up to the amount 
  8.14  exceeding the applicable growth limit. 
  8.15     Sec. 6.  Minnesota Statutes 1996, section 62J.04, 
  8.16  subdivision 9, is amended to read: 
  8.17     Subd. 9.  [GROWTH LIMITS COST CONTAINMENT GOALS; FEDERAL 
  8.18  PROGRAMS.] The commissioners of health and human services shall 
  8.19  establish a rate methodology for Medicare and Medicaid 
  8.20  risk-based contracting with health plan companies that is 
  8.21  consistent with statewide growth limits cost containment goals.  
  8.22  The methodology shall be presented for review by the Minnesota 
  8.23  health care commission and the legislative commission on health 
  8.24  care access prior to the submission of a waiver request to the 
  8.25  health care financing administration and subsequent 
  8.26  implementation of the methodology. 
  8.27     Sec. 7.  Minnesota Statutes 1996, section 62J.041, is 
  8.28  amended to read: 
  8.29     62J.041 [INTERIM HEALTH PLAN COMPANY EXPENDITURE LIMITS.] 
  8.30     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  8.31  section, the following definitions apply. 
  8.32     (b) "Health plan company" has the definition provided in 
  8.33  section 62Q.01. 
  8.34     (c) "Total expenditures" means incurred claims or 
  8.35  expenditures on health care services, administrative expenses, 
  8.36  charitable contributions, and all other payments made by health 
  9.1   plan companies out of premium revenues. 
  9.2      (d) "Net expenditures" means total expenditures minus 
  9.3   exempted taxes and assessments and payments or allocations made 
  9.4   to establish or maintain reserves.  
  9.5      (e) "Exempted taxes and assessments" means direct payments 
  9.6   for taxes to government agencies, contributions to the Minnesota 
  9.7   comprehensive health association, the medical assistance 
  9.8   provider's surcharge under section 256.9657, the MinnesotaCare 
  9.9   provider tax under section 295.52, assessments by the health 
  9.10  coverage reinsurance association, assessments by the Minnesota 
  9.11  life and health insurance guaranty association, assessments by 
  9.12  the Minnesota risk adjustment association, and any new 
  9.13  assessments imposed by federal or state law. 
  9.14     (f) "Consumer cost-sharing or subscriber liability" means 
  9.15  enrollee coinsurance, copayment, deductible payments, and 
  9.16  amounts in excess of benefit plan maximums. 
  9.17     Subd. 2.  [ESTABLISHMENT.] The commissioner of health shall 
  9.18  establish limits on cost containment goals for the increase in 
  9.19  net expenditures by each health carrier plan company for 
  9.20  calendar years 1994, 1995, 1996, and 1997.  The limits cost 
  9.21  containment goals must be the same as the annual rate of growth 
  9.22  in cost containment goals for health care spending established 
  9.23  under section 62J.04, subdivision 1, paragraph (b).  Health plan 
  9.24  companies that are affiliates may elect to meet one 
  9.25  combined expenditure limit cost containment goal. 
  9.26     Subd. 3.  [DETERMINATION OF EXPENDITURES.] Health plan 
  9.27  companies shall submit to the commissioner of health, by April 
  9.28  1, 1994, for calendar year 1993; April 1, 1995, for calendar 
  9.29  year 1994; April 1, 1996, for calendar year 1995; April 1, 1997, 
  9.30  for calendar year 1996; and April 1, 1998, for calendar year 
  9.31  1997 all information the commissioner determines to be necessary 
  9.32  to implement and enforce this section.  The information must be 
  9.33  submitted in the form specified by the commissioner.  The 
  9.34  information must include, but is not limited to, expenditures 
  9.35  per member per month or cost per employee per month, and 
  9.36  detailed information on revenues and reserves.  The 
 10.1   commissioner, to the extent possible, shall coordinate the 
 10.2   submittal of the information required under this section with 
 10.3   the submittal of the financial data required under chapter 62J, 
 10.4   to minimize the administrative burden on health plan companies.  
 10.5   The commissioner may adjust final expenditure figures for 
 10.6   demographic changes, risk selection, changes in basic benefits, 
 10.7   and legislative initiatives that materially change health care 
 10.8   costs, as long as these adjustments are consistent with the 
 10.9   methodology submitted by the health plan company to the 
 10.10  commissioner, and approved by the commissioner as actuarially 
 10.11  justified.  The methodology to be used for adjustments and the 
 10.12  election to meet one expenditure limit cost containment goal for 
 10.13  affiliated health plan companies must be submitted to the 
 10.14  commissioner by September 1, 1994.  Community integrated service 
 10.15  networks may submit the information with their application for 
 10.16  licensure.  The commissioner shall also accept changes to 
 10.17  methodologies already submitted.  The adjustment methodology 
 10.18  submitted and approved by the commissioner must apply to the 
 10.19  data submitted for calendar years 1994 and 1995.  The 
 10.20  commissioner may allow changes to accepted adjustment 
 10.21  methodologies for data submitted for calendar years 1996 and 
 10.22  1997.  Changes to the adjustment methodology must be received by 
 10.23  September 1, 1996, and must be approved by the commissioner. 
 10.24     Subd. 4.  [MONITORING OF RESERVES.] (a) The commissioners 
 10.25  of health and commerce shall monitor health plan company 
 10.26  reserves and net worth as established under chapters 60A, 62C, 
 10.27  62D, 62H, and 64B, with respect to the health plan companies 
 10.28  that each commissioner respectively regulates to ensure 
 10.29  that assess the degree to which savings resulting from the 
 10.30  establishment of expenditure limits cost containment goals are 
 10.31  passed on to consumers in the form of lower premium rates.  
 10.32     (b) Health plan companies shall fully reflect in the 
 10.33  premium rates the savings generated by the expenditure limits.  
 10.34  No premium rate, currently reviewed by the departments of health 
 10.35  or commerce, may be approved for those health plan companies 
 10.36  unless the health plan company establishes to the satisfaction 
 11.1   of the commissioner of commerce or the commissioner of health, 
 11.2   as appropriate, that the proposed new rate would comply with 
 11.3   this paragraph. 
 11.4      (c) Health plan companies, except those licensed under 
 11.5   chapter 60A to sell accident and sickness insurance under 
 11.6   chapter 62A, shall annually before the end of the fourth fiscal 
 11.7   quarter provide to the commissioner of health or commerce, as 
 11.8   applicable, a projection of the level of reserves the company 
 11.9   expects to attain during each quarter of the following fiscal 
 11.10  year.  These health plan companies shall submit with required 
 11.11  quarterly financial statements a calculation of the actual 
 11.12  reserve level attained by the company at the end of each quarter 
 11.13  including identification of the sources of any significant 
 11.14  changes in the reserve level and an updated projection of the 
 11.15  level of reserves the health plan company expects to attain by 
 11.16  the end of the fiscal year.  In cases where the health plan 
 11.17  company has been given a certificate to operate a new health 
 11.18  maintenance organization under chapter 62D, or been licensed as 
 11.19  an integrated service network or community integrated service 
 11.20  network under chapter 62N, or formed an affiliation with one of 
 11.21  these organizations, the health plan company shall also submit 
 11.22  with its quarterly financial statement, total enrollment at the 
 11.23  beginning and end of the quarter and enrollment changes within 
 11.24  each service area of the new organization.  The reserve 
 11.25  calculations shall be maintained by the commissioners as trade 
 11.26  secret information, except to the extent that such information 
 11.27  is also required to be filed by another provision of state law 
 11.28  and is not treated as trade secret information under such other 
 11.29  provisions. 
 11.30     (d) Health plan companies in paragraph (c) whose reserves 
 11.31  are less than the required minimum or more than the required 
 11.32  maximum at the end of the fiscal year shall submit a plan of 
 11.33  corrective action to the commissioner of health or commerce 
 11.34  under subdivision 7. 
 11.35     (e) The commissioner of commerce, in consultation with the 
 11.36  commissioner of health, shall report to the legislature no later 
 12.1   than January 15, 1995, as to whether the concept of a reserve 
 12.2   corridor or other mechanism for purposes of monitoring reserves 
 12.3   is adaptable for use with indemnity health insurers that do 
 12.4   business in multiple states and that must comply with their 
 12.5   domiciliary state's reserves requirements. 
 12.6      Subd. 5.  [NOTICE.] The commissioner of health shall 
 12.7   publish in the State Register and make available to the public 
 12.8   by July 1, 1995, a list of all health plan companies that 
 12.9   exceeded their expenditure limit cost containment goal for the 
 12.10  1994 calendar year.  The commissioner shall publish in the State 
 12.11  Register and make available to the public by July 1, 1996, a 
 12.12  list of all health plan companies that exceeded their 
 12.13  combined expenditure limit cost containment goal for calendar 
 12.14  years 1994 and 1995.  The commissioner shall notify each health 
 12.15  plan company that the commissioner has determined that the 
 12.16  health plan company exceeded its expenditure limit cost 
 12.17  containment goal, at least 30 days before publishing the list, 
 12.18  and shall provide each health plan company with ten days to 
 12.19  provide an explanation for exceeding the expenditure limit cost 
 12.20  containment goal.  The commissioner shall review the explanation 
 12.21  and may change a determination if the commissioner determines 
 12.22  the explanation to be valid. 
 12.23     Subd. 6.  [ASSISTANCE BY THE COMMISSIONER OF COMMERCE.] The 
 12.24  commissioner of commerce shall provide assistance to the 
 12.25  commissioner of health in monitoring health plan companies 
 12.26  regulated by the commissioner of commerce.  The commissioner of 
 12.27  commerce, in consultation with the commissioner of health, shall 
 12.28  enforce compliance with expenditure limits the cost containment 
 12.29  goals for those health plan companies in which the commissioner 
 12.30  of commerce approves the premium rates. 
 12.31     Subd. 7.  [ENFORCEMENT.] (a) The commissioners of health 
 12.32  and commerce shall enforce the reserve limits referenced in 
 12.33  subdivision 4, with respect to the health plan companies that 
 12.34  each commissioner respectively regulates.  Each commissioner 
 12.35  shall require health plan companies under the commissioner's 
 12.36  jurisdiction to submit plans of corrective action when the 
 13.1   reserve requirement is not met.  The plan of correction must 
 13.2   address the following: 
 13.3      (1) actuarial assumptions used in forecasting future 
 13.4   financial results; 
 13.5      (2) trend assumptions used in setting future premiums; 
 13.6      (3) demographic, geographic, and private and public sector 
 13.7   mix of the population covered by the health plan company; 
 13.8      (4) proposed rate increases or decreases; 
 13.9      (5) growth limits applied under section 62J.04, subdivision 
 13.10  1, paragraph (b); and 
 13.11     (6) other factors deemed appropriate by the health plan 
 13.12  company or commissioner. 
 13.13  If the health plan company's reserves exceed the required 
 13.14  maximum, the plan of correction shall address how the health 
 13.15  plan company will come into compliance and set forth a timetable 
 13.16  within which compliance would be achieved.  The plan of 
 13.17  correction may propose premium refunds, credits for prior 
 13.18  premiums paid, policyholder dividends, or any combination of 
 13.19  these or other methods which will benefit enrollees and/or 
 13.20  Minnesota residents and are such that the reserve requirements 
 13.21  can reasonably be expected to be met.  The commissioner's 
 13.22  evaluation of the plan of correction must consider: 
 13.23     (1) whether implementation of the plan would provide the 
 13.24  company with an unfair advantage in the market; 
 13.25     (2) the extent to which the reserve excess was created by 
 13.26  any movement of enrolled persons to another organization formed 
 13.27  by the company; 
 13.28     (3) whether any proposed premium refund, credit, and/or 
 13.29  dividend represents an equitable allocation to policyholders 
 13.30  covered in prior periods as determined using sound actuarial 
 13.31  practice; and 
 13.32     (4) any other factors deemed appropriate by the applicable 
 13.33  commissioner. 
 13.34     (b) The plan of correction is subject to approval by the 
 13.35  commissioner of health or commerce, as applicable.  If such a 
 13.36  plan is not approved by the applicable commissioner, the 
 14.1   applicable commissioner shall enter an order stating the steps 
 14.2   that the health plan company must take to come into compliance.  
 14.3   Within 30 days of the date of such order, the health plan 
 14.4   company must file a notice of appeal with the applicable 
 14.5   commissioner or comply with the commissioner's order.  If an 
 14.6   appeal is filed, such appeal is governed by chapter 14. 
 14.7      (c) Health plan companies that exceed the expenditure 
 14.8   limits based on two-year average expenditure data (1994 and 
 14.9   1995, 1996 and 1997) shall be required by the appropriate 
 14.10  commissioner to pay back the amount exceeding the expenditure 
 14.11  limit through an assessment on the health plan company.  A 
 14.12  health plan company may appeal the commissioner's order to pay 
 14.13  back the amount exceeding the expenditure limit by mailing to 
 14.14  the commissioner a written notice of appeal within 30 days from 
 14.15  the date the commissioner's order was mailed.  The contested 
 14.16  case and judicial review provisions of chapter 14 apply to the 
 14.17  appeal.  The health plan company shall pay the amount specified 
 14.18  by the commissioner either to the commissioner or into an escrow 
 14.19  account until final resolution of the appeal.  Notwithstanding 
 14.20  sections 15.472 to 15.475, each party is responsible for its own 
 14.21  fees and expenses, including attorneys fees, for the appeal.  
 14.22  Any amount required to be paid back under this section shall be 
 14.23  deposited in the health care access fund.  The appropriate 
 14.24  commissioner may approve a different repayment method to take 
 14.25  into account the health plan company's financial condition.  
 14.26  Health plan companies shall comply with the limits but shall 
 14.27  also guarantee that their contractual obligations are met.  
 14.28  Health plan companies are prohibited from meeting spending 
 14.29  obligations by increasing subscriber liability, including 
 14.30  copayments and deductibles and amounts in excess of benefit plan 
 14.31  maximums. 
 14.32     Sec. 8.  Minnesota Statutes 1996, section 62J.06, is 
 14.33  amended to read: 
 14.34     62J.06 [IMMUNITY FROM LIABILITY.] 
 14.35     No member of the Minnesota health care commission 
 14.36  established under section 62J.05, regional coordinating boards 
 15.1   established under section 62J.09, or the health technology 
 15.2   advisory committee established under section 62J.15, shall be 
 15.3   held civilly or criminally liable for an act or omission by that 
 15.4   person if the act or omission was in good faith and within the 
 15.5   scope of the member's responsibilities under this chapter. 
 15.6      Sec. 9.  Minnesota Statutes 1996, section 62J.07, 
 15.7   subdivision 1, is amended to read: 
 15.8      Subdivision 1.  [LEGISLATIVE OVERSIGHT.] The legislative 
 15.9   commission on health care access reviews the activities of the 
 15.10  commissioner of health, the state health care 
 15.11  commission regional coordinating boards, the health technology 
 15.12  advisory committee, and all other state agencies involved in the 
 15.13  implementation and administration of this chapter, including 
 15.14  efforts to obtain federal approval through waivers and other 
 15.15  means.  
 15.16     Sec. 10.  Minnesota Statutes 1996, section 62J.07, 
 15.17  subdivision 3, is amended to read: 
 15.18     Subd. 3.  [REPORTS TO THE COMMISSION.] The commissioner of 
 15.19  health and the Minnesota health care commission, the regional 
 15.20  coordinating boards, and the health technology advisory 
 15.21  committee shall report on their activities and the activities of 
 15.22  the regional boards annually and at other times at the request 
 15.23  of the legislative commission on health care access.  The 
 15.24  commissioners of health, commerce, and human services shall 
 15.25  provide periodic reports to the legislative commission on the 
 15.26  progress of rulemaking that is authorized or required under this 
 15.27  act and shall notify members of the commission when a draft of a 
 15.28  proposed rule has been completed and scheduled for publication 
 15.29  in the State Register.  At the request of a member of the 
 15.30  commission, a commissioner shall provide a description and a 
 15.31  copy of a proposed rule. 
 15.32     Sec. 11.  Minnesota Statutes 1996, section 62J.09, 
 15.33  subdivision 1, is amended to read: 
 15.34     Subdivision 1.  [GENERAL DUTIES.] (a) The commissioner 
 15.35  shall divide the state into five rural regions, which shall 
 15.36  include all areas of the state, except for the seven-county 
 16.1   metropolitan area. 
 16.2      The (b) Each rural region shall establish a locally 
 16.3   controlled regional coordinating boards are locally controlled 
 16.4   boards board consisting of providers, health plan companies, 
 16.5   employers, consumers, and elected officials.  Regional 
 16.6   coordinating boards may: 
 16.7      (1) undertake voluntary activities to educate consumers, 
 16.8   providers, and purchasers about community plans and projects 
 16.9   promoting health care cost containment, consumer accountability, 
 16.10  access, and quality and efforts to achieve public health goals; 
 16.11     (2) make recommendations to the commissioner regarding ways 
 16.12  of improving affordability, accessibility, and quality of health 
 16.13  care in the region and throughout the state; 
 16.14     (3) provide technical assistance to parties interested in 
 16.15  establishing or operating a community integrated service network 
 16.16  or integrated service network within the region.  This 
 16.17  assistance must complement assistance provided by the 
 16.18  commissioner under section 62N.23; 
 16.19     (4) advise the commissioner on public health goals, taking 
 16.20  into consideration the relevant portions of the community health 
 16.21  service plans, plans required by the Minnesota comprehensive 
 16.22  adult mental health act, the Minnesota comprehensive children's 
 16.23  mental health act, and the community social service act plans 
 16.24  developed by county boards or community health boards in the 
 16.25  region under chapters 145A, 245, and 256E; 
 16.26     (5) prepare an annual regional education plan that is 
 16.27  consistent with and supportive of public health goals identified 
 16.28  by community health boards in the region; and 
 16.29     (6) serve as advisory bodies to identify potential 
 16.30  applicants for federal Health Professional Shortage Area and 
 16.31  federal Medically Underserved Area designation as requested by 
 16.32  the commissioner. 
 16.33     Sec. 12.  Minnesota Statutes 1996, section 62J.15, 
 16.34  subdivision 1, is amended to read: 
 16.35     Subdivision 1.  [HEALTH TECHNOLOGY ADVISORY COMMITTEE.] The 
 16.36  Minnesota health care commission shall convene legislative 
 17.1   commission on health care access shall convene an advisory 
 17.2   committee to conduct evaluations of existing research and 
 17.3   technology assessments conducted by other entities of new and 
 17.4   existing health care technologies.  The advisory committee may 
 17.5   include members of the state commission and other persons 
 17.6   appointed by the commission.  The advisory committee must 
 17.7   include at least one person representing physicians, at least 
 17.8   one person representing hospitals, and at least one person 
 17.9   representing the health care technology industry.  Health care 
 17.10  technologies include high-cost drugs, devices, procedures, or 
 17.11  processes applied to human health care, such as high-cost 
 17.12  transplants and expensive scanners and imagers.  The advisory 
 17.13  committee is governed by section 15.0575, subdivision 3, except 
 17.14  that members do not receive per diem payments. 
 17.15     Sec. 13.  Minnesota Statutes 1996, section 62J.152, 
 17.16  subdivision 1, is amended to read: 
 17.17     Subdivision 1.  [GENERALLY.] The health technology advisory 
 17.18  committee established in section 62J.15 shall: 
 17.19     (1) develop criteria and processes for evaluating health 
 17.20  care technology assessments made by other entities; 
 17.21     (2) conduct evaluations of specific technologies and their 
 17.22  specific use and application; 
 17.23     (3) report the results of the evaluations to the 
 17.24  commissioner and the Minnesota health care 
 17.25  commission legislative commission on health care access; and 
 17.26     (4) carry out other duties relating to health technology 
 17.27  assigned by the commission legislature or the legislative 
 17.28  commission on health care access. 
 17.29     Sec. 14.  Minnesota Statutes 1996, section 62J.152, 
 17.30  subdivision 2, is amended to read: 
 17.31     Subd. 2.  [PRIORITIES FOR DESIGNATING TECHNOLOGIES FOR 
 17.32  ASSESSMENT.] The health technology advisory committee shall 
 17.33  consider the following criteria in designating technologies for 
 17.34  evaluation: 
 17.35     (1) the level of controversy within the medical or 
 17.36  scientific community, including questionable or undetermined 
 18.1   efficacy; 
 18.2      (2) the cost implications; 
 18.3      (3) the potential for rapid diffusion; 
 18.4      (4) the impact on a substantial patient population; 
 18.5      (5) the existence of alternative technologies; 
 18.6      (6) the impact on patient safety and health outcome; 
 18.7      (7) the public health importance; 
 18.8      (8) the level of public and professional demand; 
 18.9      (9) the social, ethical, and legal concerns; and 
 18.10     (10) the prevalence of the disease or condition. 
 18.11  The committee may give different weights or attach different 
 18.12  importance to each of the criteria, depending on the technology 
 18.13  being considered.  The committee shall consider any additional 
 18.14  criteria approved by the commissioner and the Minnesota health 
 18.15  care commission legislative commission on health care access. 
 18.16     Sec. 15.  Minnesota Statutes 1996, section 62J.152, 
 18.17  subdivision 4, is amended to read: 
 18.18     Subd. 4.  [TECHNOLOGY EVALUATION PROCESS.] (a) The health 
 18.19  technology advisory committee shall collect and evaluate studies 
 18.20  and research findings on the technologies selected for 
 18.21  evaluation from as wide of a range of sources as needed, 
 18.22  including, but not limited to:  federal agencies or other units 
 18.23  of government, international organizations conducting health 
 18.24  care technology assessments, health carriers, insurers, 
 18.25  manufacturers, professional and trade associations, nonprofit 
 18.26  organizations, and academic institutions.  The health technology 
 18.27  advisory committee may use consultants or experts and solicit 
 18.28  testimony or other input as needed to evaluate a specific 
 18.29  technology. 
 18.30     (b) When the evaluation process on a specific technology 
 18.31  has been completed, the health technology advisory committee 
 18.32  shall submit a preliminary report to the health care 
 18.33  commission legislative commission on health care access and 
 18.34  publish a summary of the preliminary report in the State 
 18.35  Register with a notice that written comments may be submitted.  
 18.36  The preliminary report must include the results of the 
 19.1   technology assessment evaluation, studies and research findings 
 19.2   considered in conducting the evaluation, and the health 
 19.3   technology advisory committee's summary statement about the 
 19.4   evaluation.  Any interested persons or organizations may submit 
 19.5   to the health technology advisory committee written comments 
 19.6   regarding the technology evaluation within 30 days from the date 
 19.7   the preliminary report was published in the State Register.  The 
 19.8   health technology advisory committee's final report on its 
 19.9   technology evaluation must be submitted to the health care 
 19.10  commission commissioner, to the legislature, and to the 
 19.11  information clearinghouse.  A summary of written comments 
 19.12  received by the health technology advisory committee within the 
 19.13  30-day period must be included in the final report.  The health 
 19.14  care commission shall review the final report and prepare its 
 19.15  comments and recommendations.  Before completing its final 
 19.16  comments and recommendations, the health care commission shall 
 19.17  provide adequate public notice that testimony will be accepted 
 19.18  by the health care commission.  The health care commission shall 
 19.19  then forward the final report, its comments and recommendations, 
 19.20  and a summary of the public's comments to the commissioner and 
 19.21  information clearinghouse. 
 19.22     (c) The reports of the health technology advisory committee 
 19.23  and the comments and recommendations of the health care 
 19.24  commission should not eliminate or bar new technology, and are 
 19.25  not rules as defined in the administrative procedure act. 
 19.26     Sec. 16.  Minnesota Statutes 1996, section 62J.152, 
 19.27  subdivision 5, is amended to read: 
 19.28     Subd. 5.  [USE OF TECHNOLOGY EVALUATION.] (a) The final 
 19.29  report on the technology evaluation and the commission's 
 19.30  comments and recommendations may be used: 
 19.31     (1) by the commissioner in retrospective and prospective 
 19.32  review of major expenditures; 
 19.33     (2) by integrated service networks and other group 
 19.34  purchasers and by employers, in making coverage, contracting, 
 19.35  purchasing, and reimbursement decisions; 
 19.36     (3) by organizations in the development of practice 
 20.1   parameters; 
 20.2      (4) by health care providers in making decisions about 
 20.3   adding or replacing technology and the appropriate use of 
 20.4   technology; 
 20.5      (5) by consumers in making decisions about treatment; 
 20.6      (6) by medical device manufacturers in developing and 
 20.7   marketing new technologies; and 
 20.8      (7) as otherwise needed by health care providers, health 
 20.9   care plans, consumers, and purchasers. 
 20.10     (b) At the request of the commissioner, the health care 
 20.11  commission, in consultation with the health technology advisory 
 20.12  committee, shall submit specific recommendations relating to 
 20.13  technologies that have been evaluated under this section for 
 20.14  purposes of retrospective and prospective review of major 
 20.15  expenditures and coverage, contracting, purchasing, and 
 20.16  reimbursement decisions affecting state programs. 
 20.17     Sec. 17.  Minnesota Statutes 1996, section 62J.17, 
 20.18  subdivision 6a, is amended to read: 
 20.19     Subd. 6a.  [PROSPECTIVE REVIEW AND APPROVAL.] (a) 
 20.20  [REQUIREMENT.] No health care provider subject to prospective 
 20.21  review under this subdivision shall make a major spending 
 20.22  commitment unless:  
 20.23     (1) the provider has filed an application with the 
 20.24  commissioner to proceed with the major spending commitment and 
 20.25  has provided all supporting documentation and evidence requested 
 20.26  by the commissioner; and 
 20.27     (2) the commissioner determines, based upon this 
 20.28  documentation and evidence, that the major spending commitment 
 20.29  is appropriate under the criteria provided in subdivision 5a in 
 20.30  light of the alternatives available to the provider.  
 20.31     (b)  [APPLICATION.] A provider subject to prospective 
 20.32  review and approval shall submit an application to the 
 20.33  commissioner before proceeding with any major spending 
 20.34  commitment.  The application must address each item listed in 
 20.35  subdivision 4a, paragraph (a), and must also include 
 20.36  documentation to support the response to each item.  The 
 21.1   provider may submit information, with supporting documentation, 
 21.2   regarding why the major spending commitment should be excepted 
 21.3   from prospective review under subdivision 7.  The submission may 
 21.4   be made either in addition to or instead of the submission of 
 21.5   information relating to the items listed in subdivision 4a, 
 21.6   paragraph (a).  
 21.7      (c)  [REVIEW.] The commissioner shall determine, based upon 
 21.8   the information submitted, whether the major spending commitment 
 21.9   is appropriate under the criteria provided in subdivision 5a, or 
 21.10  whether it should be excepted from prospective review under 
 21.11  subdivision 7.  In making this determination, the commissioner 
 21.12  may also consider relevant information from other sources.  At 
 21.13  the request of the commissioner, the Minnesota health care 
 21.14  commission health technology advisory committee shall convene an 
 21.15  expert review panel made up of persons with knowledge and 
 21.16  expertise regarding medical equipment, specialized services, 
 21.17  health care expenditures, and capital expenditures to review 
 21.18  applications and make recommendations to the commissioner.  The 
 21.19  commissioner shall make a decision on the application within 60 
 21.20  days after an application is received. 
 21.21     (d)  [PENALTIES AND REMEDIES.] The commissioner of health 
 21.22  has the authority to issue fines, seek injunctions, and pursue 
 21.23  other remedies as provided by law. 
 21.24     Sec. 18.  Minnesota Statutes 1996, section 62J.22, is 
 21.25  amended to read: 
 21.26     62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.] 
 21.27     The commissioner of health shall seek the full 
 21.28  participation of federal health care programs under this 
 21.29  chapter, including Medicare, medical assistance, veterans 
 21.30  administration programs, and other federal programs.  The 
 21.31  commissioner of human services shall under the direction of the 
 21.32  health care commission submit waiver requests and take other 
 21.33  action necessary to obtain federal approval to allow 
 21.34  participation of the medical assistance program.  Other state 
 21.35  agencies shall provide assistance at the request of the 
 21.36  commission.  If federal approval is not given for one or more 
 22.1   federal programs, data on the amount of health care spending 
 22.2   that is collected under section 62J.04 shall be adjusted so that 
 22.3   state and regional spending limits take into account the failure 
 22.4   of the federal program to participate. 
 22.5      Sec. 19.  Minnesota Statutes 1996, section 62J.25, is 
 22.6   amended to read: 
 22.7      62J.25 [MANDATORY MEDICARE ASSIGNMENT.] 
 22.8      (a) Effective January 1, 1993, a health care provider 
 22.9   authorized to participate in the Medicare program shall not 
 22.10  charge to or collect from a Medicare beneficiary who is a 
 22.11  Minnesota resident any amount in excess of 115 percent of the 
 22.12  Medicare-approved amount for any Medicare-covered service 
 22.13  provided. 
 22.14     (b) Effective January 1, 1994, a health care provider 
 22.15  authorized to participate in the Medicare program shall not 
 22.16  charge to or collect from a Medicare beneficiary who is a 
 22.17  Minnesota resident any amount in excess of 110 percent of the 
 22.18  Medicare-approved amount for any Medicare-covered service 
 22.19  provided. 
 22.20     (c) Effective January 1, 1995, a health care provider 
 22.21  authorized to participate in the Medicare program shall not 
 22.22  charge to or collect from a Medicare beneficiary who is a 
 22.23  Minnesota resident any amount in excess of 105 percent of the 
 22.24  Medicare-approved amount for any Medicare-covered service 
 22.25  provided. 
 22.26     (d) Effective January 1, 1996, a health care provider 
 22.27  authorized to participate in the Medicare program shall not 
 22.28  charge to or collect from a Medicare beneficiary who is a 
 22.29  Minnesota resident any amount in excess of the Medicare-approved 
 22.30  amount for any Medicare-covered service provided. 
 22.31     (e) This section does not apply to ambulance services as 
 22.32  defined in section 144.801, subdivision 4, or medical supplies 
 22.33  and equipment. 
 22.34     Sec. 20.  Minnesota Statutes 1996, section 62J.2914, 
 22.35  subdivision 1, is amended to read: 
 22.36     Subdivision 1.  [DISCLOSURE.] An application for approval 
 23.1   must include, to the extent applicable, disclosure of the 
 23.2   following: 
 23.3      (1) a descriptive title; 
 23.4      (2) a table of contents; 
 23.5      (3) exact names of each party to the application and the 
 23.6   address of the principal business office of each party; 
 23.7      (4) the name, address, and telephone number of the persons 
 23.8   authorized to receive notices and communications with respect to 
 23.9   the application; 
 23.10     (5) a verified statement by a responsible officer of each 
 23.11  party to the application attesting to the accuracy and 
 23.12  completeness of the enclosed information; 
 23.13     (6) background information relating to the proposed 
 23.14  arrangement, including: 
 23.15     (i) a description of the proposed arrangement, including a 
 23.16  list of any services or products that are the subject of the 
 23.17  proposed arrangement; 
 23.18     (ii) an identification of any tangential services or 
 23.19  products associated with the services or products that are the 
 23.20  subject of the proposed arrangement; 
 23.21     (iii) a description of the geographic territory involved in 
 23.22  the proposed arrangement; 
 23.23     (iv) if the geographic territory described in item (iii), 
 23.24  is different from the territory in which the applicants have 
 23.25  engaged in the type of business at issue over the last five 
 23.26  years, a description of how and why the geographic territory 
 23.27  differs; 
 23.28     (v) identification of all products or services that a 
 23.29  substantial share of consumers would consider substitutes for 
 23.30  any service or product that is the subject of the proposed 
 23.31  arrangement; 
 23.32     (vi) identification of whether any services or products of 
 23.33  the proposed arrangement are currently being offered, capable of 
 23.34  being offered, utilized, or capable of being utilized by other 
 23.35  providers or purchasers in the geographic territory described in 
 23.36  item (iii); 
 24.1      (vii) identification of the steps necessary, under current 
 24.2   market and regulatory conditions, for other parties to enter the 
 24.3   territory described in item (iii) and compete with the 
 24.4   applicant; 
 24.5      (viii) a description of the previous history of dealings 
 24.6   between the parties to the application; 
 24.7      (ix) a detailed explanation of the projected effects, 
 24.8   including expected volume, change in price, and increased 
 24.9   revenue, of the arrangement on each party's current businesses, 
 24.10  both generally as well as the aspects of the business directly 
 24.11  involved in the proposed arrangement; 
 24.12     (x) the present market share of the parties to the 
 24.13  application and of others affected by the proposed arrangement, 
 24.14  and projected market shares after implementation of the proposed 
 24.15  arrangement; 
 24.16     (xi) a statement of why the projected levels of cost, 
 24.17  access, or quality could not be achieved in the existing market 
 24.18  without the proposed arrangement; and 
 24.19     (xii) an explanation of how the arrangement relates to any 
 24.20  Minnesota health care commission or applicable regional 
 24.21  coordinating board plans for delivery of health care; and 
 24.22     (7) a detailed explanation of how the transaction will 
 24.23  affect cost, access, and quality.  The explanation must address 
 24.24  the factors in section 62J.2917, subdivision 2, paragraphs (b) 
 24.25  to (d), to the extent applicable. 
 24.26     Sec. 21.  Minnesota Statutes 1996, section 62J.2915, is 
 24.27  amended to read: 
 24.28     62J.2915 [NOTICE AND COMMENT.] 
 24.29     Subdivision 1.  [NOTICE.] The commissioner shall cause the 
 24.30  notice described in section 62J.2914, subdivision 2, to be 
 24.31  published in the State Register and sent to the Minnesota health 
 24.32  care commission, the regional coordinating boards for any 
 24.33  regions that include all or part of the territory covered by the 
 24.34  proposed arrangement, and any person who has requested to be 
 24.35  placed on a list to receive notice of applications.  The 
 24.36  commissioner may maintain separate notice lists for different 
 25.1   regions of the state.  The commissioner may also send a copy of 
 25.2   the notice to any person together with a request that the person 
 25.3   comment as provided under subdivision 2.  Copies of the request 
 25.4   must be provided to the applicant. 
 25.5      Subd. 2.  [COMMENTS.] Within 20 days after the notice is 
 25.6   published, any person may mail to the commissioner written 
 25.7   comments with respect to the application.  Within 30 days after 
 25.8   the notice is published, the Minnesota health care commission or 
 25.9   any regional coordinating board may mail to the commissioner 
 25.10  comments with respect to the application.  Persons submitting 
 25.11  comments shall provide a copy of the comments to the applicant.  
 25.12  The applicant may mail to the commissioner written responses to 
 25.13  any comments within ten days after the deadline for mailing such 
 25.14  comments.  The applicant shall send a copy of the response to 
 25.15  the person submitting the comment. 
 25.16     Sec. 22.  Minnesota Statutes 1996, section 62J.2916, 
 25.17  subdivision 1, is amended to read: 
 25.18     Subdivision 1.  [CHOICE OF PROCEDURES.] After the 
 25.19  conclusion of the period provided in section 62J.2915, 
 25.20  subdivision 2, for the applicant to respond to comments, the 
 25.21  commissioner shall select one of the three procedures provided 
 25.22  in subdivision 2.  In determining which procedure to use, the 
 25.23  commissioner shall consider the following criteria: 
 25.24     (1) the size of the proposed arrangement, in terms of 
 25.25  number of parties and amount of money involved; 
 25.26     (2) the complexity of the proposed arrangement; 
 25.27     (3) the novelty of the proposed arrangement; 
 25.28     (4) the substance and quantity of the comments received; 
 25.29     (5) any comments received from the Minnesota health care 
 25.30  commission or regional coordinating boards; and 
 25.31     (6) the presence or absence of any significant gaps in the 
 25.32  factual record. 
 25.33     If the applicant demands a contested case hearing no later 
 25.34  than the conclusion of the period provided in section 62J.2915, 
 25.35  subdivision 2, for the applicant to respond to comments, the 
 25.36  commissioner shall not select a procedure.  Instead, the 
 26.1   applicant shall be given a contested case proceeding as a matter 
 26.2   of right. 
 26.3      Sec. 23.  Minnesota Statutes 1996, section 62J.2917, 
 26.4   subdivision 2, is amended to read: 
 26.5      Subd. 2.  [FACTORS.] (a)  [GENERALLY APPLICABLE FACTORS.] 
 26.6   In making a determination about cost, access, and quality, the 
 26.7   commissioner may consider the following factors, to the extent 
 26.8   relevant: 
 26.9      (1) whether the proposal is compatible with the cost 
 26.10  containment plan or other plan of the Minnesota health care 
 26.11  commission or the applicable regional plans of the regional 
 26.12  coordinating boards; 
 26.13     (2) market structure: 
 26.14     (i) actual and potential sellers and buyers, or providers 
 26.15  and purchasers; 
 26.16     (ii) actual and potential consumers; 
 26.17     (iii) geographic market area; and 
 26.18     (iv) entry conditions; 
 26.19     (3) current market conditions; 
 26.20     (4) the historical behavior of the market; 
 26.21     (5) performance of other, similar arrangements; 
 26.22     (6) whether the proposal unnecessarily restrains 
 26.23  competition or restrains competition in ways not reasonably 
 26.24  related to the purposes of this chapter; and 
 26.25     (7) the financial condition of the applicant. 
 26.26     (b)  [COST.] The commissioner's analysis of cost must focus 
 26.27  on the individual consumer of health care.  Cost savings to be 
 26.28  realized by providers, health carriers, group purchasers, or 
 26.29  other participants in the health care system are relevant only 
 26.30  to the extent that the savings are likely to be passed on to the 
 26.31  consumer.  However, where an application is submitted by 
 26.32  providers or purchasers who are paid primarily by third party 
 26.33  payers unaffiliated with the applicant, it is sufficient for the 
 26.34  applicant to show that cost savings are likely to be passed on 
 26.35  to the unaffiliated third party payers; the applicants do not 
 26.36  have the burden of proving that third party payers with whom the 
 27.1   applicants are not affiliated will pass on cost savings to 
 27.2   individuals receiving coverage through the third party payers.  
 27.3   In making determinations as to costs, the commissioner may 
 27.4   consider: 
 27.5      (1) the cost savings likely to result to the applicant; 
 27.6      (2) the extent to which the cost savings are likely to be 
 27.7   passed on to the consumer and in what form; 
 27.8      (3) the extent to which the proposed arrangement is likely 
 27.9   to result in cost shifting by the applicant onto other payers or 
 27.10  purchasers of other products or services; 
 27.11     (4) the extent to which the cost shifting by the applicant 
 27.12  is likely to be followed by other persons in the market; 
 27.13     (5) the current and anticipated supply and demand for any 
 27.14  products or services at issue; 
 27.15     (6) the representations and guarantees of the applicant and 
 27.16  their enforceability; 
 27.17     (7) likely effectiveness of regulation by the commissioner; 
 27.18     (8) inferences to be drawn from market structure; 
 27.19     (9) the cost of regulation, both for the state and for the 
 27.20  applicant; and 
 27.21     (10) any other factors tending to show that the proposed 
 27.22  arrangement is or is not likely to reduce cost. 
 27.23     (c)  [ACCESS.] In making determinations as to access, the 
 27.24  commissioner may consider: 
 27.25     (1) the extent to which the utilization of needed health 
 27.26  care services or products by the intended targeted population is 
 27.27  likely to increase or decrease.  When a proposed arrangement is 
 27.28  likely to increase access in one geographic area, by lowering 
 27.29  prices or otherwise expanding supply, but limits access in 
 27.30  another geographic area by removing service capabilities from 
 27.31  that second area, the commissioner shall articulate the criteria 
 27.32  employed to balance these effects; 
 27.33     (2) the extent to which the proposed arrangement is likely 
 27.34  to make available a new and needed service or product to a 
 27.35  certain geographic area; and 
 27.36     (3) the extent to which the proposed arrangement is likely 
 28.1   to otherwise make health care services or products more 
 28.2   financially or geographically available to persons who need them.
 28.3      If the commissioner determines that the proposed 
 28.4   arrangement is likely to increase access and bases that 
 28.5   determination on a projected increase in utilization, the 
 28.6   commissioner shall also determine and make a specific finding 
 28.7   that the increased utilization does not reflect overutilization. 
 28.8      (d)  [QUALITY.] In making determinations as to quality, the 
 28.9   commissioner may consider the extent to which the proposed 
 28.10  arrangement is likely to: 
 28.11     (1) decrease morbidity and mortality; 
 28.12     (2) result in faster convalescence; 
 28.13     (3) result in fewer hospital days; 
 28.14     (4) permit providers to attain needed experience or 
 28.15  frequency of treatment, likely to lead to better outcomes; 
 28.16     (5) increase patient satisfaction; and 
 28.17     (6) have any other features likely to improve or reduce the 
 28.18  quality of health care. 
 28.19     Sec. 24.  Minnesota Statutes 1996, section 62J.2921, 
 28.20  subdivision 2, is amended to read: 
 28.21     Subd. 2.  [NOTICE.] The commissioner shall begin a 
 28.22  proceeding to revoke approval by providing written notice to the 
 28.23  applicant describing in detail the basis for the proposed 
 28.24  revocation.  Notice of the proceeding must be published in the 
 28.25  State Register and submitted to the Minnesota health care 
 28.26  commission and the applicable regional coordinating boards.  The 
 28.27  notice must invite the submission of comments to the 
 28.28  commissioner. 
 28.29     Sec. 25.  Minnesota Statutes 1996, section 62J.451, 
 28.30  subdivision 6b, is amended to read: 
 28.31     Subd. 6b.  [CONSUMER SURVEYS.] (a) The health data 
 28.32  institute shall develop and implement a mechanism for collecting 
 28.33  comparative data on consumer perceptions of the health care 
 28.34  system, including consumer satisfaction, through adoption of a 
 28.35  standard consumer survey.  This survey shall include enrollees 
 28.36  in community integrated service networks, integrated service 
 29.1   networks, health maintenance organizations, preferred provider 
 29.2   organizations, indemnity insurance plans, public programs, and 
 29.3   other health plan companies.  The health data institute, in 
 29.4   consultation with the health care commission, shall determine a 
 29.5   mechanism for the inclusion of the uninsured.  This consumer 
 29.6   survey may be conducted every two years.  A focused survey may 
 29.7   be conducted on the off years.  Health plan companies and group 
 29.8   purchasers shall provide to the health data institute roster 
 29.9   data as defined in subdivision 2, including the names, 
 29.10  addresses, and telephone numbers of enrollees and former 
 29.11  enrollees and other data necessary for the completion of this 
 29.12  survey.  This roster data provided by the health plan companies 
 29.13  and group purchasers is classified as provided under section 
 29.14  62J.452.  The health data institute may analyze and prepare 
 29.15  findings from the raw, unaggregated data, and the findings from 
 29.16  this survey may be included in the health plan company 
 29.17  performance reports specified in subdivision 6a, and in other 
 29.18  reports developed and disseminated by the health data institute 
 29.19  and the commissioner.  The raw, unaggregated data is classified 
 29.20  as provided under section 62J.452, and may be made available by 
 29.21  the health data institute to the extent permitted under section 
 29.22  62J.452.  The health data institute shall provide raw, 
 29.23  unaggregated data to the commissioner.  The survey may include 
 29.24  information on the following subjects: 
 29.25     (1) enrollees' overall satisfaction with their health care 
 29.26  plan; 
 29.27     (2) consumers' perception of access to emergency, urgent, 
 29.28  routine, and preventive care, including locations, hours, 
 29.29  waiting times, and access to care when needed; 
 29.30     (3) premiums and costs; 
 29.31     (4) technical competence of providers; 
 29.32     (5) communication, courtesy, respect, reassurance, and 
 29.33  support; 
 29.34     (6) choice and continuity of providers; 
 29.35     (7) continuity of care; 
 29.36     (8) outcomes of care; 
 30.1      (9) services offered by the plan, including range of 
 30.2   services, coverage for preventive and routine services, and 
 30.3   coverage for illness and hospitalization; 
 30.4      (10) availability of information; and 
 30.5      (11) paperwork. 
 30.6      (b) The health data institute shall appoint a consumer 
 30.7   advisory group which shall consist of 13 individuals, 
 30.8   representing enrollees from public and private health plan 
 30.9   companies and programs and two uninsured consumers, to advise 
 30.10  the health data institute on issues of concern to consumers.  
 30.11  The advisory group must have at least one member from each 
 30.12  regional coordinating board region of the state.  The advisory 
 30.13  group expires June 30, 1996. 
 30.14     Sec. 26.  Minnesota Statutes 1996, section 62L.08, 
 30.15  subdivision 8, is amended to read: 
 30.16     Subd. 8.  [FILING REQUIREMENT.] No later than July 1, 1993, 
 30.17  and each year thereafter, a health carrier that offers, sells, 
 30.18  issues, or renews a health benefit plan for small employers 
 30.19  shall file with the commissioner the index rates and must 
 30.20  demonstrate that all rates shall be within the rating 
 30.21  restrictions defined in this chapter.  Such demonstration must 
 30.22  include the allowable range of rates from the index rates and a 
 30.23  description of how the health carrier intends to use demographic 
 30.24  factors including case characteristics in calculating the 
 30.25  premium rates.  The rates shall not be approved, unless the 
 30.26  commissioner has determined that the rates are reasonable.  In 
 30.27  determining reasonableness, the commissioner shall consider the 
 30.28  growth rates applied cost containment goals established under 
 30.29  section 62J.04, subdivision 1, paragraph (b), to the calendar 
 30.30  year or years that the proposed premium rate would be in effect, 
 30.31  actuarially valid changes in risk associated with the enrollee 
 30.32  population, and actuarially valid changes as a result of 
 30.33  statutory changes in Laws 1992, chapter 549.  For premium rates 
 30.34  proposed to go into effect between July 1, 1993 and December 31, 
 30.35  1993, the pertinent growth rate is the growth rate applied under 
 30.36  section 62J.04, subdivision 1, paragraph (b), to calendar year 
 31.1   1994.  
 31.2      Sec. 27.  Minnesota Statutes 1996, section 62N.25, 
 31.3   subdivision 5, is amended to read: 
 31.4      Subd. 5.  [BENEFITS.] Community integrated service networks 
 31.5   must offer the health maintenance organization benefit set, as 
 31.6   defined in chapter 62D, and other laws applicable to entities 
 31.7   regulated under chapter 62D, except that the community 
 31.8   integrated service network may impose a deductible, not to 
 31.9   exceed $1,000 per person per year, provided that out-of-pocket 
 31.10  expenses on covered services do not exceed $3,000 per person or 
 31.11  $5,000 per family per year.  The deductible must not apply to 
 31.12  preventive health services as described in Minnesota Rules, part 
 31.13  4685.0801, subpart 8.  Community networks and chemical 
 31.14  dependency facilities under contract with a community network 
 31.15  shall use the assessment criteria in Minnesota Rules, parts 
 31.16  9530.6600 to 9530.6660, when assessing enrollees for chemical 
 31.17  dependency treatment. 
 31.18     Sec. 28.  Minnesota Statutes 1996, section 62Q.03, 
 31.19  subdivision 5a, is amended to read: 
 31.20     Subd. 5a.  [PUBLIC PROGRAMS.] (a) A separate risk 
 31.21  adjustment system must be developed for state-run public 
 31.22  programs, including medical assistance, general assistance 
 31.23  medical care, and MinnesotaCare.  The system must be developed 
 31.24  in accordance with the general risk adjustment methodologies 
 31.25  described in this section, must include factors in addition to 
 31.26  age and sex adjustment, and may include additional demographic 
 31.27  factors, different targeted conditions, and/or different payment 
 31.28  amounts for conditions.  The risk adjustment system for public 
 31.29  programs must attempt to reflect the special needs related to 
 31.30  poverty, cultural, or language barriers and other needs of the 
 31.31  public program population. 
 31.32     (b) The commissioners of health and human services shall 
 31.33  jointly convene a public programs risk adjustment work group 
 31.34  responsible for advising the commissioners in the design of the 
 31.35  public programs risk adjustment system.  The commissioner of 
 31.36  health shall work with the risk adjustment association to ensure 
 32.1   coordination between the risk adjustment systems for the public 
 32.2   and private sectors.  The commissioner of human services shall 
 32.3   seek any needed federal approvals necessary for the inclusion of 
 32.4   the medical assistance program in the public programs risk 
 32.5   adjustment system.  
 32.6      (c) The public programs risk adjustment work group must be 
 32.7   representative of the persons served by publicly paid health 
 32.8   programs and providers and health plans that meet their needs.  
 32.9   To the greatest extent possible, the appointing authorities 
 32.10  shall attempt to select representatives that have historically 
 32.11  served a significant number of persons in publicly paid health 
 32.12  programs or the uninsured.  Membership of the work group shall 
 32.13  be as follows: 
 32.14     (1) one provider member appointed by the Minnesota Medical 
 32.15  Association; 
 32.16     (2) two provider members appointed by the Minnesota 
 32.17  Hospital Association, at least one of whom must represent a 
 32.18  major disproportionate share hospital; 
 32.19     (3) five members appointed by the Minnesota Council of 
 32.20  HMOs, one of whom must represent an HMO with fewer than 50,000 
 32.21  enrollees located outside the metropolitan area and one of whom 
 32.22  must represent an HMO with at least 50 percent of total 
 32.23  membership enrolled through a public program; 
 32.24     (4) two representatives of counties appointed by the 
 32.25  Association of Minnesota Counties; 
 32.26     (5) three representatives of organizations representing the 
 32.27  interests of families, children, childless adults, and elderly 
 32.28  persons served by the various publicly paid health programs 
 32.29  appointed by the governor; 
 32.30     (6) two representatives of persons with mental health, 
 32.31  developmental or physical disabilities, chemical dependency, or 
 32.32  chronic illness appointed by the governor; and 
 32.33     (7) three public members appointed by the governor, at 
 32.34  least one of whom must represent a community health board.  The 
 32.35  risk adjustment association may appoint a representative, if a 
 32.36  representative is not otherwise appointed by an appointing 
 33.1   authority. 
 33.2      (d) The commissioners of health and human services, with 
 33.3   the advice of the public programs risk adjustment work group, 
 33.4   shall develop a work plan and time frame and shall coordinate 
 33.5   their efforts with the private sector risk adjustment 
 33.6   association's activities and other state initiatives related to 
 33.7   public program managed care reimbursement.  The commissioners of 
 33.8   health and human services shall report to the health care 
 33.9   commission and to the appropriate legislative committees on 
 33.10  January 15, 1996, and on January 15, 1997, on any policy or 
 33.11  legislative changes necessary to implement the public program 
 33.12  risk adjustment system. 
 33.13     Sec. 29.  Minnesota Statutes 1996, section 62Q.33, 
 33.14  subdivision 2, is amended to read: 
 33.15     Subd. 2.  [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 
 33.16  of health, in consultation with the state community health 
 33.17  services advisory committee and the commissioner of human 
 33.18  services, and representatives of local health departments, 
 33.19  county government, a municipal government acting as a local 
 33.20  board of health, the Minnesota health care commission, area 
 33.21  Indian health services, health care providers, and citizens 
 33.22  concerned about public health, shall coordinate the process for 
 33.23  defining implementation and financing responsibilities of the 
 33.24  local government core public health functions.  The commissioner 
 33.25  shall submit recommendations and an initial and final report on 
 33.26  local government core public health functions according to the 
 33.27  timeline established in subdivision 5. 
 33.28     Sec. 30.  [62Q.65] [ACCESS TO PROVIDER DISCOUNTS.] 
 33.29     Subdivision 1.  [REQUIREMENT.] A high deductible health 
 33.30  plan must, when used in connection with a medical savings 
 33.31  account, provide the enrollee access to any discounted provider 
 33.32  fees for services covered by the high deductible health plan, 
 33.33  regardless of whether the enrollee has satisfied the deductible 
 33.34  for the high deductible health plan. 
 33.35     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
 33.36  following terms have the meanings given: 
 34.1      (1) "high deductible health plan" has the meaning given 
 34.2   under the federal Internal Revenue Code, section 220(c)(2); 
 34.3      (2) "medical savings account" has the meaning given under 
 34.4   the federal Internal Revenue Code, section 220(d)(1); and 
 34.5      (3) "discounted provider fees" means fees contained in a 
 34.6   provider agreement entered into by the issuer of the high 
 34.7   deductible health plan, or an affiliate of the issuer, for use 
 34.8   in connection with the high deductible health plan. 
 34.9      Sec. 31.  Minnesota Statutes 1996, section 256.9354, 
 34.10  subdivision 5, is amended to read: 
 34.11     Subd. 5.  [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO 
 34.12  CHILDREN.] (a) Beginning October 1, 1994, the definition of 
 34.13  "eligible persons" is expanded to include all individuals and 
 34.14  households with no children who have gross family incomes that 
 34.15  are equal to or less than 125 percent of the federal poverty 
 34.16  guidelines and who are not eligible for medical assistance 
 34.17  without a spenddown under chapter 256B.  
 34.18     (b) After October 1, 1995, the commissioner of human 
 34.19  services may expand the definition of "eligible persons" to 
 34.20  include all individuals and households with no children who have 
 34.21  gross family incomes that are equal to or less than 135 percent 
 34.22  of federal poverty guidelines and are not eligible for medical 
 34.23  assistance without a spenddown under chapter 256B.  This 
 34.24  expansion may occur only if the financial management 
 34.25  requirements of section 256.9352, subdivision 3, can be met. 
 34.26     (c) The commissioners of health and human services, in 
 34.27  consultation with the legislative commission on health care 
 34.28  access, shall make preliminary recommendations to the 
 34.29  legislature by October 1, 1995, and final recommendations to the 
 34.30  legislature by February 1, 1996, on whether a further expansion 
 34.31  of the definition of "eligible persons" to include all 
 34.32  individuals and households with no children who have gross 
 34.33  family incomes that are equal to or less than 150 percent of 
 34.34  federal poverty guidelines and are not eligible for medical 
 34.35  assistance without a spenddown under chapter 256B would be 
 34.36  allowed under the financial management constraints outlined in 
 35.1   section 256.9352, subdivision 3. 
 35.2      (d) (b) Beginning July 1, 1997, the definition of eligible 
 35.3   persons is expanded to include all individuals and households 
 35.4   with no children who have gross family incomes that are equal to 
 35.5   or less than 175 percent of the federal poverty guidelines and 
 35.6   who are not eligible for medical assistance without a spenddown 
 35.7   under chapter 256B. 
 35.8      (c) All eligible persons under paragraphs (a) and (b) are 
 35.9   eligible for coverage through the MinnesotaCare program but must 
 35.10  pay a premium as determined under sections 256.9357 and 
 35.11  256.9358.  Individuals and families whose income is greater than 
 35.12  the limits established under section 256.9358 may not enroll in 
 35.13  the MinnesotaCare program. 
 35.14     Sec. 32.  Minnesota Statutes 1996, section 256.9355, is 
 35.15  amended by adding a subdivision to read: 
 35.16     Subd. 5.  [AVAILABILITY OF PRIVATE INSURANCE.] The 
 35.17  commissioner, in consultation with the commissioners of health 
 35.18  and commerce, shall provide information regarding the 
 35.19  availability of private health insurance coverage to all 
 35.20  families and individuals enrolled in the MinnesotaCare program 
 35.21  whose gross family income is equal to or more than 200 percent 
 35.22  of the federal poverty guidelines.  This information must be 
 35.23  provided upon initial enrollment and annually thereafter. 
 35.24     Sec. 33.  Minnesota Statutes 1996, section 256.9357, 
 35.25  subdivision 1, is amended to read: 
 35.26     Subdivision 1.  [GENERAL REQUIREMENTS.] Families and 
 35.27  individuals who enroll on or after October 1, 1992, are eligible 
 35.28  for subsidized premium payments based on a sliding scale under 
 35.29  section 256.9358 only if the family or individual meets the 
 35.30  requirements in subdivisions 2 and 3.  Children already enrolled 
 35.31  in the children's health plan as of September 30, 1992, eligible 
 35.32  under section 256.9354, subdivision 1, paragraph (a), children 
 35.33  who enroll in the MinnesotaCare program after September 30, 
 35.34  1992, pursuant to Laws 1992, chapter 549, article 4, section 17, 
 35.35  and children who enroll under section 256.9354, subdivision 4a, 
 35.36  are eligible for subsidized premium payments without meeting 
 36.1   these requirements, as long as they maintain continuous coverage 
 36.2   in the MinnesotaCare plan or medical assistance.  
 36.3      Families and individuals who initially enrolled in 
 36.4   MinnesotaCare under section 256.9354 or 256.9366, and whose 
 36.5   income increases above the limits established in section 
 36.6   sections 256.9358 and 256.9366, may continue enrollment and pay 
 36.7   the full cost of coverage are no longer eligible for the program 
 36.8   and shall be disenrolled by the commissioner.  MinnesotaCare 
 36.9   coverage terminates the last day of the calendar month following 
 36.10  the month in which the department determines that the income of 
 36.11  a family or individual, determined over a four-month period as 
 36.12  required by section 256.9358, exceeds program income limits. 
 36.13     Sec. 34.  [256.9370] [ASSET REQUIREMENT FOR MINNESOTACARE.] 
 36.14     Subdivision 1.  [DEFINITIONS.] For purposes of this 
 36.15  section, the following definitions apply. 
 36.16     (a) "Asset" means cash and other personal property, as well 
 36.17  as any real property, that a family or individual owns which has 
 36.18  monetary value. 
 36.19     (b) "Homestead" means the home that is owned by, and is the 
 36.20  usual residence of, the family or individual, together with the 
 36.21  surrounding property which is not separated from the home by 
 36.22  intervening property owned by others.  Public rights-of-way, 
 36.23  such as roads that run through the surrounding property and 
 36.24  separate it from the home, will not affect the exemption of the 
 36.25  property.  "Usual residence" includes the home from which the 
 36.26  family or individual is temporarily absent due to illness, 
 36.27  employment, or education, or because the home is temporarily not 
 36.28  habitable due to casualty or natural disaster. 
 36.29     (c) "Net asset" means the asset's fair market value minus 
 36.30  any encumbrances, including, but not limited to, liens and 
 36.31  mortgages. 
 36.32     Subd. 2.  [LIMIT ON TOTAL ASSETS.] (a) Effective April 1, 
 36.33  1997, or upon federal approval, whichever is later, in order to 
 36.34  be eligible for the MinnesotaCare program, a household of two or 
 36.35  more persons must not own more than $30,000 in total net assets, 
 36.36  and a household of one person must not own more than $15,000 in 
 37.1   total net assets. 
 37.2      (b) For purposes of this subdivision, total net assets 
 37.3   include all assets, with the following exceptions: 
 37.4      (1) a homestead is not considered; 
 37.5      (2) household goods and personal effects are not 
 37.6   considered; and 
 37.7      (3) capital and operating assets of a trade or business up 
 37.8   to $200,000 in net assets are not considered. 
 37.9      (c) If an asset excluded under paragraph (b) has a negative 
 37.10  value, the negative value shall be subtracted from the total net 
 37.11  assets under paragraph (a). 
 37.12     Subd. 3.  [DOCUMENTATION.] Assets owned by the individual 
 37.13  or family must be reported.  The commissioner will perform 
 37.14  random audits to verify reported assets. 
 37.15     Subd. 4.  [PENALTIES.] Individuals or families who are 
 37.16  found to have knowingly misreported the amount of their assets 
 37.17  as described in this section shall be subject to the penalties 
 37.18  in section 256.98.  The commissioner shall present 
 37.19  recommendations on additional penalties to the 1998 legislature. 
 37.20     Sec. 35.  [256.9371] [PENALTIES.] 
 37.21     Whoever obtains or attempts to obtain, or aids or abets any 
 37.22  person to obtain by means of a willfully false statement or 
 37.23  representation, or by the intentional withholding or concealment 
 37.24  of a material fact, or by impersonation, or other fraudulent 
 37.25  device: 
 37.26     (1) benefits under the MinnesotaCare program to which the 
 37.27  person is not entitled; or 
 37.28     (2) benefits under the MinnesotaCare program greater than 
 37.29  that to which the person is reasonably entitled; 
 37.30  shall be considered to have violated section 256.98, and shall 
 37.31  be subject to both the criminal and civil penalties provided 
 37.32  under that section. 
 37.33     Sec. 36.  Minnesota Statutes 1996, section 295.582, is 
 37.34  amended to read: 
 37.35     295.582 [AUTHORITY.] 
 37.36     (a) A hospital, surgical center, pharmacy, or health care 
 38.1   provider that is subject to a tax under section 295.52, or a 
 38.2   pharmacy that has paid additional expense transferred under this 
 38.3   section by a wholesale drug distributor, may transfer additional 
 38.4   expense generated by section 295.52 obligations on to all 
 38.5   third-party contracts for the purchase of health care services 
 38.6   on behalf of a patient or consumer.  The additional expense 
 38.7   transferred to the third-party purchaser must not exceed two 
 38.8   percent of the gross revenues received under the third-party 
 38.9   contract, and two percent of copayments and deductibles paid by 
 38.10  the individual patient or consumer.  The expense must not be 
 38.11  generated on revenues derived from payments that are excluded 
 38.12  from the tax under section 295.53.  All third-party purchasers 
 38.13  of health care services including, but not limited to, 
 38.14  third-party purchasers regulated under chapter 60A, 62A, 62C, 
 38.15  62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 
 38.16  471.61 or 471.617, must pay the transferred expense in addition 
 38.17  to any payments due under existing contracts with the hospital, 
 38.18  surgical center, pharmacy, or health care provider, to the 
 38.19  extent allowed under federal law.  A third-party purchaser of 
 38.20  health care services includes, but is not limited to, a health 
 38.21  carrier, integrated service network, or community integrated 
 38.22  service network that pays for health care services on behalf of 
 38.23  patients or that reimburses, indemnifies, compensates, or 
 38.24  otherwise insures patients for health care services.  A 
 38.25  third-party purchaser shall comply with this section regardless 
 38.26  of whether the third-party purchaser is a for-profit, 
 38.27  not-for-profit, or nonprofit entity.  A wholesale drug 
 38.28  distributor may transfer additional expense generated by section 
 38.29  295.52 obligations to entities that purchase from the 
 38.30  wholesaler, and the entities must pay the additional expense.  
 38.31  Nothing in this section limits the ability of a hospital, 
 38.32  surgical center, pharmacy, wholesale drug distributor, or health 
 38.33  care provider to recover all or part of the section 295.52 
 38.34  obligation by other methods, including increasing fees or 
 38.35  charges. 
 38.36     (b) Each third-party purchaser regulated under any chapter 
 39.1   cited in paragraph (a) shall include with its annual renewal for 
 39.2   certification of authority or licensure documentation indicating 
 39.3   compliance with paragraph (a).  
 39.4      (c) Any hospital, surgical center, pharmacy, or health care 
 39.5   provider subject to a tax under section 295.52 or a pharmacy 
 39.6   that has paid additional expense transferred under this section 
 39.7   by a wholesale drug distributor may file a complaint with the 
 39.8   commissioner responsible for regulating the third-party 
 39.9   purchaser if at any time the third-party purchaser fails to 
 39.10  comply with paragraph (a).  
 39.11     (d) If the commissioner responsible for regulating the 
 39.12  third-party purchaser finds at any time that the third-party 
 39.13  purchaser has not complied with paragraph (a), the commissioner 
 39.14  may take enforcement action against a health plan company which 
 39.15  is subject to the commissioner's regulatory jurisdiction and 
 39.16  which does not allow a hospital, surgical center, pharmacy, or 
 39.17  provider to pass-through the tax.  The commissioner may by order 
 39.18  fine or censure the third-party purchaser or revoke or suspend 
 39.19  the certificate of authority or license of the third-party 
 39.20  purchaser to do business in this state if the commissioner finds 
 39.21  that the third-party purchaser has not complied with this 
 39.22  section.  The third-party purchaser may appeal the 
 39.23  commissioner's order through a contested case hearing in 
 39.24  accordance with chapter 14. 
 39.25     Sec. 37.  [REPEALER.] 
 39.26     (a) Minnesota Statutes 1996, sections 62J.03, subdivision 
 39.27  3; 62J.041, subdivision 7; 62J.042; 62J.05; 62J.051; 62J.09, 
 39.28  subdivision 3a; 62N.02, subdivision 3; 62Q.165, subdivision 3; 
 39.29  62Q.25; 62Q.29; and 62Q.41, are repealed. 
 39.30     (b) Laws 1993, chapter 247, article 4, section 8; Laws 
 39.31  1995, chapter 96, section 2; and Laws 1995, First Special 
 39.32  Session chapter 3, article 13, section 2, are repealed. 
 39.33     (c) Laws 1994, chapter 625, article 5, section 5, 
 39.34  subdivision 1, as amended by Laws 1995, chapter 234, article 3, 
 39.35  section 8, is repealed. 
 39.36     Sec. 38.  [EFFECTIVE DATE.] 
 40.1      Section 30 is effective January 1, 1998, and applies to 
 40.2   high deductible health plans issued or renewed on or after that 
 40.3   date.