1.1                          A bill for an act 
  1.2             relating to health; modifying the MinnesotaCare 
  1.3             program; modifying general assistance medical care 
  1.4             provisions; modifying loss ratio provisions for health 
  1.5             care policies; modifying Medicare supplement plan 
  1.6             provisions; modifying the regional coordinating 
  1.7             boards; modifying the health technology advisory 
  1.8             committee; eliminating the health care commission; 
  1.9             modifying mandatory Medicare assignment; modifying 
  1.10            MinnesotaCare tax provisions; regulating community 
  1.11            purchasing arrangements; modifying disclosure 
  1.12            provisions; eliminating integrated service networks; 
  1.13            modifying community integrated service network 
  1.14            provisions; modifying provisions of the public 
  1.15            programs risk adjustment work group; modifying 
  1.16            essential community provider provisions; modifying 
  1.17            requirements for health plan companies; modifying 
  1.18            provisions of the rural physician education account; 
  1.19            modifying rural hospital provisions; modifying medical 
  1.20            assistance provisions; establishing a senior citizen 
  1.21            drug proram; modifying Minnesota comprehensive health 
  1.22            association provisions; requiring studies; making 
  1.23            technical changes; appropriating money; providing 
  1.24            criminal penalties; amending Minnesota Statutes 1996, 
  1.25            sections 60A.15, subdivision 1; 60A.951, subdivision 
  1.26            5; 62A.021, subdivision 1, and by adding a 
  1.27            subdivision; 62A.316; 62A.61; 62D.02, subdivision 5; 
  1.28            62D.09, subdivision 3; 62E.02, subdivisions 13 and 18; 
  1.29            62E.11, subdivision 5; 62E.13, subdivision 2; 62J.017; 
  1.30            62J.06; 62J.07, subdivisions 1 and 3; 62J.09, 
  1.31            subdivision 1; 62J.15, subdivision 1; 62J.152, 
  1.32            subdivisions 1, 2, 4, 5, and by adding subdivisions; 
  1.33            62J.17, subdivision 6a; 62J.22; 62J.25; 62J.2914, 
  1.34            subdivision 1; 62J.2915; 62J.2916, subdivision 1; 
  1.35            62J.2917, subdivision 2; 62J.2921, subdivision 2; 
  1.36            62J.451, subdivision 6b; 62M.02, subdivision 21; 
  1.37            62N.01, subdivision 1; 62N.22; 62N.23; 62N.25, 
  1.38            subdivision 5; 62N.26; 62N.40; 62Q.01, subdivisions 3, 
  1.39            4, and 5; 62Q.03, subdivision 5a; 62Q.106; 62Q.19, 
  1.40            subdivision 1; 62Q.33, subdivision 2; 62Q.45, 
  1.41            subdivision 2; 136A.1355; 144.147, subdivisions 1, 2, 
  1.42            3, and 4; 144.1484, subdivision 1; 256.01, subdivision 
  1.43            2; 256.045, subdivision 3a; 256.9352, subdivision 3; 
  1.44            256.9353, subdivisions 1, 3, and 7; 256.9354, 
  1.45            subdivisions 4, 5, 6, 7, and by adding a subdivision; 
  1.46            256.9355, subdivisions 1, 4, and by adding a 
  2.1             subdivision; 256.9357, subdivision 3; 256.9358, 
  2.2             subdivision 4; 256.9359, subdivision 2; 256.9362, 
  2.3             subdivision 6; 256.9363, subdivisions 1 and 5; 
  2.4             256.9657, subdivision 3; 256B.056, subdivision 8; 
  2.5             256B.0625, subdivisions 13 and 15; 256B.0911, 
  2.6             subdivision 2, as amended; 256B.0913, subdivision 16, 
  2.7             as added; 256D.03, subdivisions 3 and 3b; 295.50, 
  2.8             subdivisions 3, 4, 6, 7, 13, and 14; 295.51, 
  2.9             subdivision 1; 295.52, subdivision 4, and by adding 
  2.10            subdivisions; 295.53, subdivisions 1, 3, 4, and by 
  2.11            adding a subdivision; 295.54, subdivisions 1 and 2; 
  2.12            295.55, subdivision 2; 295.582; S. F. No. 1908, 
  2.13            article 1, sections 2; 3, subdivision 2; article 4, 
  2.14            sections 70 and 73; and article 9, section 24; 
  2.15            proposing coding for new law in Minnesota Statutes, 
  2.16            chapters 16A; 62Q; 144; and 256; proposing coding for 
  2.17            new law as Minnesota Statutes, chapter 62S; repealing 
  2.18            Minnesota Statutes 1996, sections 62E.11, subdivision 
  2.19            12; 62J.03, subdivision 3; 62J.04, subdivisions 4 and 
  2.20            7; 62J.05; 62J.051; 62J.09, subdivision 3a; 62J.37; 
  2.21            62N.01, subdivision 2; 62N.02, subdivisions 2, 3, 4b, 
  2.22            4c, 6, 7, 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 
  2.23            62N.06; 62N.065; 62N.071; 62N.072; 62N.073; 62N.074; 
  2.24            62N.076; 62N.077; 62N.078; 62N.10; 62N.11; 62N.12; 
  2.25            62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 62N.24; 
  2.26            62N.38; 62Q.165, subdivision 3; 62Q.25; 62Q.29; 
  2.27            62Q.41; 147.01, subdivision 6; 295.52, subdivision 1b; 
  2.28            and 295.53, subdivision 5; Laws 1993, chapter 247, 
  2.29            article 4, section 8; Laws 1994, chapter 625, article 
  2.30            5, section 5, as amended; Laws 1995, chapter 96, 
  2.31            section 2; Laws 1995, First Special Session chapter 3, 
  2.32            article 13, section 2; Laws 1997, chapters 31, article 
  2.33            4; and 84, article 4. 
  2.34  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.35                             ARTICLE 1 
  2.36                     MINNESOTACARE PROGRAM/GAMC 
  2.37     Section 1.  Minnesota Statutes 1996, section 256.9353, 
  2.38  subdivision 1, is amended to read: 
  2.39     Subdivision 1.  [COVERED HEALTH SERVICES.] "Covered health 
  2.40  services" means the health services reimbursed under chapter 
  2.41  256B, with the exception of inpatient hospital services, special 
  2.42  education services, private duty nursing services, adult dental 
  2.43  care services other than preventive services, orthodontic 
  2.44  services, nonemergency medical transportation services, personal 
  2.45  care assistant and case management services, nursing home or 
  2.46  intermediate care facilities services, inpatient mental health 
  2.47  services, and chemical dependency services.  Effective July 1, 
  2.48  1998, adult dental care for nonpreventive services with the 
  2.49  exception of orthodontic services is available to persons who 
  2.50  qualify under section 256.9354, subdivisions 1 to 5, or 
  2.51  256.9366, with family gross income equal to or less than 175 
  2.52  percent of the federal poverty guidelines.  Outpatient mental 
  3.1   health services covered under the MinnesotaCare program are 
  3.2   limited to diagnostic assessments, psychological testing, 
  3.3   explanation of findings, medication management by a physician, 
  3.4   day treatment, partial hospitalization, and individual, family, 
  3.5   and group psychotherapy. 
  3.6      No public funds shall be used for coverage of abortion 
  3.7   under MinnesotaCare except where the life of the female would be 
  3.8   endangered or substantial and irreversible impairment of a major 
  3.9   bodily function would result if the fetus were carried to term; 
  3.10  or where the pregnancy is the result of rape or incest. 
  3.11     Covered health services shall be expanded as provided in 
  3.12  this section. 
  3.13     Sec. 2.  Minnesota Statutes 1996, section 256.9353, 
  3.14  subdivision 3, is amended to read: 
  3.15     Subd. 3.  [INPATIENT HOSPITAL SERVICES.] (a) Beginning July 
  3.16  1, 1993, covered health services shall include inpatient 
  3.17  hospital services, including inpatient hospital mental health 
  3.18  services and inpatient hospital and residential chemical 
  3.19  dependency treatment, subject to those limitations necessary to 
  3.20  coordinate the provision of these services with eligibility 
  3.21  under the medical assistance spenddown.  Prior to July 1, 1997, 
  3.22  the inpatient hospital benefit for adult enrollees is subject to 
  3.23  an annual benefit limit of $10,000.  Effective July 1, 1997, the 
  3.24  inpatient hospital benefit for adult enrollees who qualify under 
  3.25  section 256.9354, subdivision 5, or who qualify under section 
  3.26  256.9354, subdivisions 1 to 4a, or section 256.9366 with family 
  3.27  gross income that exceeds 175 percent of the federal poverty 
  3.28  guidelines and who are not pregnant, is subject to an annual 
  3.29  limit of $10,000.  
  3.30     (b) Enrollees who qualify under section 256.9354, 
  3.31  subdivision 5, or who qualify under section 256.9354, 
  3.32  subdivisions 1 to 4a, or section 256.9366 with family gross 
  3.33  income that exceeds 175 percent of the federal poverty 
  3.34  guidelines and who are not pregnant, and are determined by the 
  3.35  commissioner to have a basis of eligibility for medical 
  3.36  assistance shall apply for and cooperate with the requirements 
  4.1   of medical assistance by the last day of the third month 
  4.2   following admission to an inpatient hospital.  If an enrollee 
  4.3   fails to apply for medical assistance within this time period, 
  4.4   the enrollee and the enrollee's family shall be disenrolled from 
  4.5   the plan and they may not reenroll until 12 calendar months have 
  4.6   elapsed.  Enrollees and enrollees' families disenrolled for not 
  4.7   applying for or not cooperating with medical assistance may not 
  4.8   reenroll. 
  4.9      (c) Admissions for inpatient hospital services paid for 
  4.10  under section 256.9362, subdivision 3, must be certified as 
  4.11  medically necessary in accordance with Minnesota Rules, parts 
  4.12  9505.0500 to 9505.0540, except as provided in clauses (1) and 
  4.13  (2): 
  4.14     (1) all admissions must be certified, except those 
  4.15  authorized under rules established under section 254A.03, 
  4.16  subdivision 3, or approved under Medicare; and 
  4.17     (2) payment under section 256.9362, subdivision 3, shall be 
  4.18  reduced by five percent for admissions for which certification 
  4.19  is requested more than 30 days after the day of admission.  The 
  4.20  hospital may not seek payment from the enrollee for the amount 
  4.21  of the payment reduction under this clause. 
  4.22     (d) Any enrollee or family member of an enrollee who has 
  4.23  previously been permanently disenrolled from MinnesotaCare for 
  4.24  not applying for and cooperating with medical assistance shall 
  4.25  be eligible to reenroll if 12 calendar months have elapsed since 
  4.26  the date of disenrollment. 
  4.27     Sec. 3.  Minnesota Statutes 1996, section 256.9353, 
  4.28  subdivision 7, is amended to read: 
  4.29     Subd. 7.  [COPAYMENTS AND COINSURANCE.] The MinnesotaCare 
  4.30  benefit plan shall include the following copayments and 
  4.31  coinsurance requirements:  
  4.32     (1) ten percent of the paid charges submitted for inpatient 
  4.33  hospital services for adult enrollees not eligible for medical 
  4.34  assistance, subject to an annual inpatient out-of-pocket maximum 
  4.35  of $1,000 per individual and $3,000 per family; 
  4.36     (2) $3 per prescription for adult enrollees; and 
  5.1      (3) $25 for eyeglasses for adult enrollees; and 
  5.2      (4) effective July 1, 1998, 50 percent of the 
  5.3   fee-for-service rate for adult dental care services other than 
  5.4   preventive care services for persons eligible under section 
  5.5   256.9354, subdivisions 1 to 5, or 256.9366, with income equal to 
  5.6   or less than 175 percent of the federal poverty guidelines. 
  5.7      Prior to July 1, 1997, enrollees who are not eligible for 
  5.8   medical assistance with or without a spenddown shall be 
  5.9   financially responsible for the coinsurance amount and amounts 
  5.10  which exceed the $10,000 benefit limit.  MinnesotaCare shall be 
  5.11  financially responsible for the spenddown amount up to the 
  5.12  $10,000 benefit limit for enrollees who are eligible for medical 
  5.13  assistance with a spenddown; enrollees who are eligible for 
  5.14  medical assistance with a spenddown are financially responsible 
  5.15  for amounts which exceed the $10,000 benefit limit.  Effective 
  5.16  July 1, 1997, adult enrollees who qualify under section 
  5.17  256.9354, subdivision 5, or who qualify under section 256.9354, 
  5.18  subdivisions 1 to 4a, or section 256.9366 with family gross 
  5.19  income that exceeds 175 percent of the federal poverty 
  5.20  guidelines and who are not pregnant, and who are not eligible 
  5.21  for medical assistance with or without a spenddown, shall be 
  5.22  financially responsible for the coinsurance amount and amounts 
  5.23  which exceed the $10,000 inpatient hospital benefit limit. 
  5.24     When a MinnesotaCare enrollee becomes a member of a prepaid 
  5.25  health plan, or changes from one prepaid health plan to another 
  5.26  during a calendar year, any charges submitted towards the 
  5.27  $10,000 annual inpatient benefit limit, and any out-of-pocket 
  5.28  expenses incurred by the enrollee for inpatient services, that 
  5.29  were submitted or incurred prior to enrollment, or prior to the 
  5.30  change in health plans, shall be disregarded. 
  5.31     Sec. 4.  Minnesota Statutes 1996, section 256.9354, 
  5.32  subdivision 4, is amended to read: 
  5.33     Subd. 4.  [FAMILIES WITH CHILDREN; ELIGIBILITY BASED ON 
  5.34  PERCENTAGE OF INCOME PAID FOR HEALTH COVERAGE.] Beginning 
  5.35  January 1, 1993, "eligible persons" means children, parents, and 
  5.36  dependent siblings residing in the same household who are not 
  6.1   eligible for medical assistance without a spenddown under 
  6.2   chapter 256B.  Children who meet the criteria in subdivision 1 
  6.3   or 4a shall continue to be enrolled pursuant to those 
  6.4   subdivisions.  Persons who are eligible under this subdivision 
  6.5   or subdivision 2, 3, or 5 must pay a premium as determined under 
  6.6   sections 256.9357 and 256.9358, and children eligible under 
  6.7   subdivision 1 must pay the premium required under section 
  6.8   256.9356, subdivision 1.  Individuals and families whose income 
  6.9   is greater than the limits established under section 256.9358 
  6.10  may not enroll in MinnesotaCare.  
  6.11     Sec. 5.  Minnesota Statutes 1996, section 256.9354, 
  6.12  subdivision 5, is amended to read: 
  6.13     Subd. 5.  [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO 
  6.14  CHILDREN.] (a) Beginning October 1, 1994, the definition of 
  6.15  "eligible persons" is expanded to include all individuals and 
  6.16  households with no children who have gross family incomes that 
  6.17  are equal to or less than 125 percent of the federal poverty 
  6.18  guidelines and who are not eligible for medical assistance 
  6.19  without a spenddown under chapter 256B.  
  6.20     (b) After October 1, 1995, the commissioner of human 
  6.21  services may expand the definition of "eligible persons" to 
  6.22  include all individuals and households with no children who have 
  6.23  gross family incomes that are equal to or less than 135 percent 
  6.24  of federal poverty guidelines and are not eligible for medical 
  6.25  assistance without a spenddown under chapter 256B.  This 
  6.26  expansion may occur only if the financial management 
  6.27  requirements of section 256.9352, subdivision 3, can be met. 
  6.28     (c) The commissioners of health and human services, in 
  6.29  consultation with the legislative commission on health care 
  6.30  access, shall make preliminary recommendations to the 
  6.31  legislature by October 1, 1995, and final recommendations to the 
  6.32  legislature by February 1, 1996, on whether a further expansion 
  6.33  of the definition of "eligible persons" to include all 
  6.34  individuals and households with no children who have gross 
  6.35  family incomes that are equal to or less than 150 percent of 
  6.36  federal poverty guidelines and are not eligible for medical 
  7.1   assistance without a spenddown under chapter 256B would be 
  7.2   allowed under the financial management constraints outlined in 
  7.3   section 256.9352, subdivision 3. 
  7.4      (d) (b) Beginning July 1, 1997, the definition of eligible 
  7.5   persons is expanded to include all individuals and households 
  7.6   with no children who have gross family incomes that are equal to 
  7.7   or less than 175 percent of the federal poverty guidelines and 
  7.8   who are not eligible for medical assistance without a spenddown 
  7.9   under chapter 256B. 
  7.10     (c) All eligible persons under paragraphs (a) and (b) are 
  7.11  eligible for coverage through the MinnesotaCare program but must 
  7.12  pay a premium as determined under sections 256.9357 and 
  7.13  256.9358.  Individuals and families whose income is greater than 
  7.14  the limits established under section 256.9358 may not enroll in 
  7.15  the MinnesotaCare program. 
  7.16     Sec. 6.  Minnesota Statutes 1996, section 256.9354, 
  7.17  subdivision 6, is amended to read: 
  7.18     Subd. 6.  [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL 
  7.19  ASSISTANCE.] Individuals who apply for MinnesotaCare who qualify 
  7.20  under section 256.9354, subdivision 5, but who are potentially 
  7.21  eligible for medical assistance without a spenddown shall be 
  7.22  allowed to enroll in MinnesotaCare for a period of 60 days, so 
  7.23  long as the applicant meets all other conditions of 
  7.24  eligibility.  The commissioner shall identify and refer such 
  7.25  individuals to their county social service agency.  The enrollee 
  7.26  must cooperate with the county social service agency in 
  7.27  determining medical assistance eligibility within the 60-day 
  7.28  enrollment period.  Enrollees who do not apply for and cooperate 
  7.29  with medical assistance within the 60-day enrollment period, and 
  7.30  their other family members, shall be disenrolled from the plan 
  7.31  within one calendar month.  Persons disenrolled for 
  7.32  nonapplication for medical assistance may not reenroll until 
  7.33  they have obtained a medical assistance eligibility 
  7.34  determination for the family member or members who were referred 
  7.35  to the county agency.  Persons disenrolled for noncooperation 
  7.36  with medical assistance may not reenroll until they have 
  8.1   cooperated with the county agency and have obtained a medical 
  8.2   assistance eligibility determination.  The commissioner shall 
  8.3   redetermine provider payments made under MinnesotaCare to the 
  8.4   appropriate medical assistance payments for those enrollees who 
  8.5   subsequently become eligible for medical assistance. 
  8.6      Sec. 7.  Minnesota Statutes 1996, section 256.9354, 
  8.7   subdivision 7, is amended to read: 
  8.8      Subd. 7.  [GENERAL ASSISTANCE MEDICAL CARE.] A person 
  8.9   cannot have coverage under both MinnesotaCare and general 
  8.10  assistance medical care in the same month, except that a 
  8.11  MinnesotaCare enrollee may be eligible for retroactive general 
  8.12  assistance medical care according to section 256D.03, 
  8.13  subdivision 3, paragraph (b). 
  8.14     Sec. 8.  Minnesota Statutes 1996, section 256.9354, is 
  8.15  amended by adding a subdivision to read: 
  8.16     Subd. 8.  [MINNESOTACARE OUTREACH.] (a) The commissioner 
  8.17  shall award grants to public or private organizations to provide 
  8.18  information on the importance of maintaining insurance coverage 
  8.19  and on how to obtain coverage through the MinnesotaCare program 
  8.20  in areas of the state with high uninsured populations.  
  8.21     (b) In awarding the grants, the commissioner shall consider 
  8.22  the following: 
  8.23     (1) geographic areas and populations with high uninsured 
  8.24  rates; 
  8.25     (2) the ability to raise matching funds; and 
  8.26     (3) the ability to contact or serve eligible populations. 
  8.27     The commissioner shall monitor the grants and may terminate 
  8.28  a grant if the outreach effort does not increase the 
  8.29  MinnesotaCare program enrollment. 
  8.30     Sec. 9.  Minnesota Statutes 1996, section 256.9355, 
  8.31  subdivision 1, is amended to read: 
  8.32     Subdivision 1.  [APPLICATION AND INFORMATION AVAILABILITY.] 
  8.33  Applications and other information must be made available to 
  8.34  provider offices, local human services agencies, school 
  8.35  districts, public and private elementary schools in which 25 
  8.36  percent or more of the students receive free or reduced price 
  9.1   lunches, community health offices, and Women, Infants and 
  9.2   Children (WIC) program sites.  These sites may accept 
  9.3   applications, collect the enrollment fee or initial premium fee, 
  9.4   and forward the forms and fees to the commissioner.  Otherwise, 
  9.5   applicants may apply directly to the commissioner.  Beginning 
  9.6   January 1, 2000, MinnesotaCare enrollment sites will be expanded 
  9.7   to include local county human services agencies which choose to 
  9.8   participate.  
  9.9      Sec. 10.  Minnesota Statutes 1996, section 256.9355, 
  9.10  subdivision 4, is amended to read: 
  9.11     Subd. 4.  [APPLICATION PROCESSING.] The commissioner of 
  9.12  human services shall determine an applicant's eligibility for 
  9.13  MinnesotaCare no more than 30 days from the date that the 
  9.14  application is received by the department of human services.  
  9.15  This requirement shall be suspended for four months following 
  9.16  the dates in which single adults and families without children 
  9.17  become eligible for the program.  Beginning July 1, 2000, this 
  9.18  requirement also applies to local county human services agencies 
  9.19  that determine eligibility for MinnesotaCare.  
  9.20     Sec. 11.  Minnesota Statutes 1996, section 256.9355, is 
  9.21  amended by adding a subdivision to read: 
  9.22     Subd. 5.  [AVAILABILITY OF PRIVATE INSURANCE.] The 
  9.23  commissioner, in consultation with the commissioners of health 
  9.24  and commerce, shall provide information regarding the 
  9.25  availability of private health insurance coverage to all 
  9.26  families and individuals enrolled in the MinnesotaCare program 
  9.27  whose gross family income is equal to or more than 200 percent 
  9.28  of the federal poverty guidelines.  This information must be 
  9.29  provided upon initial enrollment and annually thereafter. 
  9.30     Sec. 12.  Minnesota Statutes 1996, section 256.9357, 
  9.31  subdivision 3, is amended to read: 
  9.32     Subd. 3.  [PERIOD UNINSURED.] To be eligible for subsidized 
  9.33  premium payments based on a sliding scale, families and 
  9.34  individuals initially enrolled in the MinnesotaCare program 
  9.35  under section 256.9354, subdivisions 4 and 5, must have had no 
  9.36  health coverage for at least four months prior to application.  
 10.1   The commissioner may change this eligibility criterion for 
 10.2   sliding scale premiums without complying with rulemaking 
 10.3   requirements in order to remain within the limits of available 
 10.4   appropriations.  The requirement of at least four months of no 
 10.5   health coverage prior to application for the MinnesotaCare 
 10.6   program does not apply to: 
 10.7      (1) families, children, and individuals who want to apply 
 10.8   for the MinnesotaCare program upon termination from or as 
 10.9   required by the medical assistance program, general assistance 
 10.10  medical care program, or coverage under a regional demonstration 
 10.11  project for the uninsured funded under section 256B.73, the 
 10.12  Hennepin county assured care program, or the Group Health, Inc., 
 10.13  community health plan; 
 10.14     (2) families and individuals initially enrolled under 
 10.15  section 256.9354, subdivisions 1, paragraph (a), and 2; 
 10.16     (3) children enrolled pursuant to Laws 1992, chapter 549, 
 10.17  article 4, section 17; or 
 10.18     (4) individuals currently serving or who have served in the 
 10.19  military reserves, and dependents of these individuals, if these 
 10.20  individuals:  (i) reapply for MinnesotaCare coverage after a 
 10.21  period of active military service during which they had been 
 10.22  covered by the Civilian Health and Medical Program of the 
 10.23  Uniformed Services (CHAMPUS); (ii) were covered under 
 10.24  MinnesotaCare immediately prior to obtaining coverage under 
 10.25  CHAMPUS; and (iii) have maintained continuous coverage. 
 10.26     Sec. 13.  Minnesota Statutes 1996, section 256.9358, 
 10.27  subdivision 4, is amended to read: 
 10.28     Subd. 4.  [INELIGIBILITY.] Families with children whose 
 10.29  gross monthly income is above the amount specified in 
 10.30  subdivision 3 are not eligible for the plan.  Beginning October 
 10.31  1, 1994, An individual or households with no children whose 
 10.32  gross family income is greater than 125 percent of the federal 
 10.33  poverty guidelines the amount specified in section 256.9354, 
 10.34  subdivision 5, are ineligible for the plan. 
 10.35     Sec. 14.  Minnesota Statutes 1996, section 256.9359, 
 10.36  subdivision 2, is amended to read: 
 11.1      Subd. 2.  [RESIDENCY REQUIREMENT.] (a) Prior to July 1, 
 11.2   1997, to be eligible for health coverage under the MinnesotaCare 
 11.3   program, families and individuals must be permanent residents of 
 11.4   Minnesota.  
 11.5      (b) Effective July 1, 1997, to be eligible for health 
 11.6   coverage under the MinnesotaCare program, adults without 
 11.7   children must be permanent residents of Minnesota. 
 11.8      (c) Effective July 1, 1997, to be eligible for health 
 11.9   coverage under the MinnesotaCare program, pregnant women, 
 11.10  families, and children must meet the residency requirements as 
 11.11  provided by Code of Federal Regulations, title 42, section 
 11.12  435.403, except that the provisions of section 256B.056, 
 11.13  subdivision 1, shall apply upon receipt of federal approval. 
 11.14     Sec. 15.  Minnesota Statutes 1996, section 256.9362, 
 11.15  subdivision 6, is amended to read: 
 11.16     Subd. 6.  [ENROLLEES 18 OR OLDER.] Payment by the 
 11.17  MinnesotaCare program for inpatient hospital services provided 
 11.18  to MinnesotaCare enrollees eligible under section 256.9354, 
 11.19  subdivision 5, or who qualify under section 256.9354, 
 11.20  subdivisions 1 to 4a, or section 256.9366 with family gross 
 11.21  income that exceeds 175 percent of the federal poverty 
 11.22  guidelines and who are not pregnant, who are 18 years old or 
 11.23  older on the date of admission to the inpatient hospital must be 
 11.24  in accordance with paragraphs (a) and (b).  Payment for adults 
 11.25  who are not pregnant and are eligible under section 256.9354, 
 11.26  subdivisions 1 to 4a, or section 256.9366, and whose incomes are 
 11.27  equal to or less than 175 percent of the federal poverty 
 11.28  guidelines, shall be as provided for under paragraph (c).  
 11.29     (a) If the medical assistance rate minus any copayment 
 11.30  required under section 256.9353, subdivision 6, is less than or 
 11.31  equal to the amount remaining in the enrollee's benefit limit 
 11.32  under section 256.9353, subdivision 3, payment must be the 
 11.33  medical assistance rate minus any copayment required under 
 11.34  section 256.9353, subdivision 6.  The hospital must not seek 
 11.35  payment from the enrollee in addition to the copayment.  The 
 11.36  MinnesotaCare payment plus the copayment must be treated as 
 12.1   payment in full. 
 12.2      (b) If the medical assistance rate minus any copayment 
 12.3   required under section 256.9353, subdivision 6, is greater than 
 12.4   the amount remaining in the enrollee's benefit limit under 
 12.5   section 256.9353, subdivision 3, payment must be the lesser of: 
 12.6      (1) the amount remaining in the enrollee's benefit limit; 
 12.7   or 
 12.8      (2) charges submitted for the inpatient hospital services 
 12.9   less any copayment established under section 256.9353, 
 12.10  subdivision 6. 
 12.11     The hospital may seek payment from the enrollee for the 
 12.12  amount by which usual and customary charges exceed the payment 
 12.13  under this paragraph.  If payment is reduced under section 
 12.14  256.9353, subdivision 3, paragraph (c), the hospital may not 
 12.15  seek payment from the enrollee for the amount of the reduction. 
 12.16     (c) For admissions occurring during the period of July 1, 
 12.17  1997, through June 30, 1998, for adults who are not pregnant and 
 12.18  are eligible under section 256.9354, subdivisions 1 to 4a, or 
 12.19  256.9366, and whose incomes are equal to or less than 175 
 12.20  percent of the federal poverty guidelines, the commissioner 
 12.21  shall pay hospitals directly, up to the medical assistance 
 12.22  payment rate, for inpatient hospital benefits in excess of the 
 12.23  $10,000 annual inpatient benefit limit. 
 12.24     Sec. 16.  Minnesota Statutes 1996, section 256.9363, 
 12.25  subdivision 5, is amended to read: 
 12.26     Subd. 5.  [ELIGIBILITY FOR OTHER STATE PROGRAMS.] 
 12.27  MinnesotaCare enrollees who become eligible for medical 
 12.28  assistance or general assistance medical care will remain in the 
 12.29  same managed care plan if the managed care plan has a contract 
 12.30  for that population.  Effective January 1, 1998, MinnesotaCare 
 12.31  enrollees who were formerly eligible for general assistance 
 12.32  medical care pursuant to section 256D.03, subdivision 3, within 
 12.33  six months of MinnesotaCare enrollment and were enrolled in a 
 12.34  prepaid health plan pursuant to section 256D.03, subdivision 4, 
 12.35  paragraph (d), must remain in the same managed care plan if the 
 12.36  managed care plan has a contract for that population.  Contracts 
 13.1   between the department of human services and managed care plans 
 13.2   must include MinnesotaCare, and medical assistance and may, at 
 13.3   the option of the commissioner of human services, also include 
 13.4   general assistance medical care. 
 13.5      Sec. 17.  [256.937] [ASSET REQUIREMENT FOR MINNESOTACARE.] 
 13.6      Subdivision 1.  [DEFINITIONS.] For purposes of this 
 13.7   section, the following definitions apply. 
 13.8      (a) "Asset" means cash and other personal property, as well 
 13.9   as any real property, that a family or individual owns which has 
 13.10  monetary value. 
 13.11     (b) "Homestead" means the home that is owned by, and is the 
 13.12  usual residence of, the family or individual, together with the 
 13.13  surrounding property which is not separated from the home by 
 13.14  intervening property owned by others.  Public rights-of-way, 
 13.15  such as roads that run through the surrounding property and 
 13.16  separate it from the home, will not affect the exemption of the 
 13.17  property.  "Usual residence" includes the home from which the 
 13.18  family or individual is temporarily absent due to illness, 
 13.19  employment, or education, or because the home is temporarily not 
 13.20  habitable due to casualty or natural disaster. 
 13.21     (c) "Net asset" means the asset's fair market value minus 
 13.22  any encumbrances including, but not limited to, liens and 
 13.23  mortgages. 
 13.24     Subd. 2.  [LIMIT ON TOTAL ASSETS.] (a) Effective April 1, 
 13.25  1997, or upon federal approval, whichever is later, in order to 
 13.26  be eligible for the MinnesotaCare program, a household of two or 
 13.27  more persons must not own more than $30,000 in total net assets, 
 13.28  and a household of one person must not own more than $15,000 in 
 13.29  total net assets. 
 13.30     (b) For purposes of this subdivision, total net assets 
 13.31  include all assets, with the following exceptions: 
 13.32     (1) a homestead is not considered; 
 13.33     (2) household goods and personal effects are not 
 13.34  considered; 
 13.35     (3) any assets owned by children; 
 13.36     (4) vehicles used for employment; 
 14.1      (5) court ordered settlements up to $10,000; 
 14.2      (6) individual retirement accounts; and 
 14.3      (7) capital and operating assets of a trade or business up 
 14.4   to $200,000 in net assets are not considered. 
 14.5      (c) If an asset excluded under paragraph (b) has a negative 
 14.6   value, the negative value shall be subtracted from the total net 
 14.7   assets under paragraph (a). 
 14.8      Subd. 3.  [DOCUMENTATION.] (a) The commissioner of human 
 14.9   services shall require individuals and families, at the time of 
 14.10  application or renewal, to indicate on a checkoff form developed 
 14.11  by the commissioner whether they satisfy the MinnesotaCare asset 
 14.12  requirement.  This form must include the following or similar 
 14.13  language:  "To be eligible for MinnesotaCare, individuals and 
 14.14  families must not own net assets in excess of $30,000 for a 
 14.15  household of two or more persons or $15,000 for a household of 
 14.16  one person, not including a homestead, household goods and 
 14.17  personal effects, assets owned by children, vehicles used for 
 14.18  employment, court ordered settlements up to $10,000, individual 
 14.19  retirement accounts, and capital and operating assets of a trade 
 14.20  or business up to $200,000.  Do you and your household own net 
 14.21  assets in excess of these limits?" 
 14.22     (b) The commissioner may require individuals and families 
 14.23  to provide any information the commissioner determines necessary 
 14.24  to verify compliance with the asset requirement, if the 
 14.25  commissioner determines that there is reason to believe that an 
 14.26  individual or family has assets that exceed the program limit. 
 14.27     Subd. 4.  [PENALTIES.] Individuals or families who are 
 14.28  found to have knowingly misreported the amount of their assets 
 14.29  as described in this section shall be subject to the penalties 
 14.30  in section 256.98.  The commissioner shall present 
 14.31  recommendations on additional penalties to the 1998 legislature. 
 14.32     Subd. 5.  [EXEMPTION.] This section does not apply to 
 14.33  pregnant women.  For purposes of this subdivision, a woman is 
 14.34  considered pregnant for 60 days postpartum. 
 14.35     Sec. 18.  [256.9371] [PENALTIES.] 
 14.36     Whoever obtains or attempts to obtain, or aids or abets any 
 15.1   person to obtain by means of a willfully false statement or 
 15.2   representation, or by the intentional withholding or concealment 
 15.3   of a material fact, or by impersonation, or other fraudulent 
 15.4   device: 
 15.5      (1) benefits under the MinnesotaCare program to which the 
 15.6   person is not entitled; or 
 15.7      (2) benefits under the MinnesotaCare program greater than 
 15.8   that to which the person is reasonably entitled; 
 15.9   shall be considered to have violated section 256.98, and shall 
 15.10  be subject to both the criminal and civil penalties provided 
 15.11  under that section. 
 15.12     Sec. 19.  Minnesota Statutes 1996, section 256D.03, 
 15.13  subdivision 3, is amended to read: 
 15.14     Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
 15.15  (a) General assistance medical care may be paid for any person 
 15.16  who is not eligible for medical assistance under chapter 256B, 
 15.17  including eligibility for medical assistance based on a 
 15.18  spenddown of excess income according to section 256B.056, 
 15.19  subdivision 5, or MinnesotaCare as defined in clause (4), except 
 15.20  as provided in paragraph (b); and: 
 15.21     (1) who is receiving assistance under section 256D.05, or 
 15.22  except for families with children who are eligible under 
 15.23  Minnesota family investment program-statewide (MFIP-S), who is 
 15.24  having a payment made on the person's behalf under sections 
 15.25  256I.01 to 256I.06, or who resides in group residential housing 
 15.26  as defined in chapter 256I and can meet a spenddown using the 
 15.27  cost of remedial services received through group residential 
 15.28  housing; or 
 15.29     (2)(i) who is a resident of Minnesota; and whose equity in 
 15.30  assets is not in excess of $1,000 per assistance unit.  No asset 
 15.31  test shall be applied to children and their parents living in 
 15.32  the same household.  Exempt assets, the reduction of excess 
 15.33  assets, and the waiver of excess assets must conform to the 
 15.34  medical assistance program in chapter 256B, with the following 
 15.35  exception:  the maximum amount of undistributed funds in a trust 
 15.36  that could be distributed to or on behalf of the beneficiary by 
 16.1   the trustee, assuming the full exercise of the trustee's 
 16.2   discretion under the terms of the trust, must be applied toward 
 16.3   the asset maximum; and 
 16.4      (ii) who has countable income not in excess of the 
 16.5   assistance standards established in section 256B.056, 
 16.6   subdivision 4, or whose excess income is spent down pursuant to 
 16.7   section 256B.056, subdivision 5, using a six-month budget 
 16.8   period, except that a one-month budget period must be used for 
 16.9   recipients residing in a long-term care facility.  The method 
 16.10  for calculating earned income disregards and deductions for a 
 16.11  person who resides with a dependent child under age 21 shall be 
 16.12  as specified in section 256.74, subdivision 1 follow section 
 16.13  256B.056, subdivision 1a.  However, if a disregard of $30 and 
 16.14  one-third of the remainder described in section 256.74, 
 16.15  subdivision 1, clause (4), has been applied to the wage earner's 
 16.16  income, the disregard shall not be applied again until the wage 
 16.17  earner's income has not been considered in an eligibility 
 16.18  determination for general assistance, general assistance medical 
 16.19  care, medical assistance, or aid to families with dependent 
 16.20  children MFIP-S for 12 consecutive months.  The earned income 
 16.21  and work expense deductions for a person who does not reside 
 16.22  with a dependent child under age 21 shall be the same as the 
 16.23  method used to determine eligibility for a person under section 
 16.24  256D.06, subdivision 1, except the disregard of the first $50 of 
 16.25  earned income is not allowed; or 
 16.26     (3) who would be eligible for medical assistance except 
 16.27  that the person resides in a facility that is determined by the 
 16.28  commissioner or the federal health care financing administration 
 16.29  to be an institution for mental diseases. 
 16.30     (4) Beginning July 1, 1998, applicants or recipients who 
 16.31  meet all eligibility requirements of MinnesotaCare as defined in 
 16.32  sections 256.9351 to 256.9363 and 256.9366 to 256.9369, and are: 
 16.33     (i) adults with dependent children under 21 whose gross 
 16.34  family income is equal to or less than 275 percent of the 
 16.35  federal poverty guidelines; or 
 16.36     (ii) adults without children with earned income and whose 
 17.1   family gross income is between 75 percent of the federal poverty 
 17.2   guidelines and the amount set by section 256.9354, subdivision 
 17.3   5, shall be terminated from general assistance medical care upon 
 17.4   enrollment in MinnesotaCare. 
 17.5      (b) Eligibility is available for the month of application, 
 17.6   and for three months prior to application if the person was 
 17.7   eligible in those prior months. For services rendered on or 
 17.8   after July 1, 1997, eligibility is limited to one month prior to 
 17.9   application if the person is determined eligible in the prior 
 17.10  month.  A redetermination of eligibility must occur every 12 
 17.11  months.  Beginning July 1, 1998, Minnesota health care program 
 17.12  applications completed by recipients and applicants who are 
 17.13  persons described in paragraph (a), clause (4), may be returned 
 17.14  to the county agency to be forwarded to the department of human 
 17.15  services or sent directly to the department of human services 
 17.16  for enrollment in MinnesotaCare.  If all other eligibility 
 17.17  requirements of this subdivision are met, eligibility for 
 17.18  general assistance medical care shall be available in any month 
 17.19  during which a MinnesotaCare eligibility determination and 
 17.20  enrollment are pending.  Upon notification of eligibility for 
 17.21  MinnesotaCare, notice of termination for eligibility for general 
 17.22  assistance medical care shall be sent to an applicant or 
 17.23  recipient.  If all other eligibility requirements of this 
 17.24  subdivision are met, eligibility for general assistance medical 
 17.25  care shall be available until enrollment in MinnesotaCare 
 17.26  subject to the provisions of paragraph (d). 
 17.27     (c) The date of an initial Minnesota health care program 
 17.28  application necessary to begin a determination of eligibility 
 17.29  shall be the date the applicant has provided a name, address, 
 17.30  and social security number, signed and dated, to the county 
 17.31  agency or the department of human services.  If the applicant is 
 17.32  unable to provide an initial application when health care is 
 17.33  delivered due to a medical condition or disability, a health 
 17.34  care provider may act on the person's behalf to complete the 
 17.35  initial application.  The applicant must complete the remainder 
 17.36  of the application and provide necessary verification before 
 18.1   eligibility can be determined.  The county agency must assist 
 18.2   the applicant in obtaining verification if necessary. 
 18.3      (d) County agencies are authorized to use all automated 
 18.4   databases containing information regarding recipients' or 
 18.5   applicants' income in order to determine eligibility for general 
 18.6   assistance medical care or MinnesotaCare.  Such use shall be 
 18.7   considered sufficient in order to determine eligibility and 
 18.8   premium payments by the county agency. 
 18.9      (c) (e) General assistance medical care is not available 
 18.10  for a person in a correctional facility unless the person is 
 18.11  detained by law for less than one year in a county correctional 
 18.12  or detention facility as a person accused or convicted of a 
 18.13  crime, or admitted as an inpatient to a hospital on a criminal 
 18.14  hold order, and the person is a recipient of general assistance 
 18.15  medical care at the time the person is detained by law or 
 18.16  admitted on a criminal hold order and as long as the person 
 18.17  continues to meet other eligibility requirements of this 
 18.18  subdivision.  
 18.19     (d) (f) General assistance medical care is not available 
 18.20  for applicants or recipients who do not cooperate with the 
 18.21  county agency to meet the requirements of medical 
 18.22  assistance.  General assistance medical care is limited to 
 18.23  payment of emergency services only for applicants or recipients 
 18.24  as described in paragraph (a), clause (4), whose MinnesotaCare 
 18.25  coverage is denied or terminated for nonpayment of premiums as 
 18.26  required by sections 256.9356 to 256.9358.  
 18.27     (e) (g) In determining the amount of assets of an 
 18.28  individual, there shall be included any asset or interest in an 
 18.29  asset, including an asset excluded under paragraph (a), that was 
 18.30  given away, sold, or disposed of for less than fair market value 
 18.31  within the 60 months preceding application for general 
 18.32  assistance medical care or during the period of eligibility.  
 18.33  Any transfer described in this paragraph shall be presumed to 
 18.34  have been for the purpose of establishing eligibility for 
 18.35  general assistance medical care, unless the individual furnishes 
 18.36  convincing evidence to establish that the transaction was 
 19.1   exclusively for another purpose.  For purposes of this 
 19.2   paragraph, the value of the asset or interest shall be the fair 
 19.3   market value at the time it was given away, sold, or disposed 
 19.4   of, less the amount of compensation received.  For any 
 19.5   uncompensated transfer, the number of months of ineligibility, 
 19.6   including partial months, shall be calculated by dividing the 
 19.7   uncompensated transfer amount by the average monthly per person 
 19.8   payment made by the medical assistance program to skilled 
 19.9   nursing facilities for the previous calendar year.  The 
 19.10  individual shall remain ineligible until this fixed period has 
 19.11  expired.  The period of ineligibility may exceed 30 months, and 
 19.12  a reapplication for benefits after 30 months from the date of 
 19.13  the transfer shall not result in eligibility unless and until 
 19.14  the period of ineligibility has expired.  The period of 
 19.15  ineligibility begins in the month the transfer was reported to 
 19.16  the county agency, or if the transfer was not reported, the 
 19.17  month in which the county agency discovered the transfer, 
 19.18  whichever comes first.  For applicants, the period of 
 19.19  ineligibility begins on the date of the first approved 
 19.20  application. 
 19.21     (f)(1) (h) Beginning October 1, 1993, an undocumented alien 
 19.22  or a nonimmigrant is ineligible for general assistance medical 
 19.23  care other than emergency services.  For purposes of this 
 19.24  subdivision, a nonimmigrant is an individual in one or more of 
 19.25  the classes listed in United States Code, title 8, section 
 19.26  1101(a)(15), and an undocumented alien is an individual who 
 19.27  resides in the United States without the approval or 
 19.28  acquiescence of the Immigration and Naturalization Service. 
 19.29     (2) (i) This subdivision does not apply to a child under 
 19.30  age 18, to a Cuban or Haitian entrant as defined in Public Law 
 19.31  Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 
 19.32  is aged, blind, or disabled as defined in United States Code, 
 19.33  title 42, section 1382c(a)(1). 
 19.34     (3) (j) For purposes of paragraph paragraphs (f) and (h), 
 19.35  "emergency services" has the meaning given in Code of Federal 
 19.36  Regulations, title 42, section 440.255(b)(1), except that it 
 20.1   also means services rendered because of suspected or actual 
 20.2   pesticide poisoning. 
 20.3      Sec. 20.  [TRANSITION PLAN FOR MINNESOTACARE ENROLLEES.] 
 20.4      (a) The commissioner of human services, in consultation 
 20.5   with the legislative commission on health care access and the 
 20.6   commissioners of employee relations, health, and commerce, shall 
 20.7   develop an implementation plan to transition higher-income 
 20.8   MinnesotaCare enrollees to private sector or other nonsubsidized 
 20.9   coverage.  In developing the plan, the commissioner shall 
 20.10  examine the feasibility of using the health insurance program 
 20.11  for state employees administered by the commissioner of employee 
 20.12  relations as a source of coverage, and shall also examine 
 20.13  methods to increase the affordability of private sector coverage 
 20.14  for individuals and families transitioning off MinnesotaCare.  
 20.15  The commissioner shall submit the implementation plan to the 
 20.16  legislature by December 15, 1997. 
 20.17     (b) The commissioner of human services shall report to the 
 20.18  legislature by January 15, 1998, on the impact of the outreach 
 20.19  efforts for the MinnesotaCare program, and on the reasons why 
 20.20  enrollees are leaving the MinnesotaCare program, and make 
 20.21  recommendations on:  
 20.22     (1) the affordability of the MinnesotaCare premium 
 20.23  schedule; 
 20.24     (2) the eligibility income level for the MinnesotaCare 
 20.25  program that will result in the greatest number of individuals 
 20.26  having health coverage; 
 20.27     (3) what will encourage greater availability of health 
 20.28  coverage in the private market; 
 20.29     (4) steps to increase the availability of health coverage 
 20.30  in the small employer market; 
 20.31     (5) the need, if any, and the feasibility of increasing the 
 20.32  MinnesotaCare program income eligibility level for individuals 
 20.33  and households without children; and 
 20.34     (6) the possibility of alternative premium payments and of 
 20.35  waiving the premiums for the MinnesotaCare program for certain 
 20.36  low-income enrollees. 
 21.1      Sec. 21.  [INPATIENT BENEFIT LIMIT PILOT PROJECT.] 
 21.2      The commissioner of human services shall develop a pilot 
 21.3   project in a designated area of the state to determine whether 
 21.4   the presence of the $10,000 inpatient hospital benefit limit 
 21.5   prevents erosion of the private health insurance market by 
 21.6   eliminating the $10,000 inpatient benefit limit for that area of 
 21.7   the state.  The commissioner shall work with the legislative 
 21.8   commission on health care access in designing the elements of 
 21.9   the pilot project. 
 21.10     Sec. 22.  [EFFECTIVE DATE.] 
 21.11     Section 3, subdivision 7, clause (1), is effective July 1, 
 21.12  1998. 
 21.13                             ARTICLE 2 
 21.14            MISCELLANEOUS CHANGES TO HEALTH CARE REFORM 
 21.15     Section 1.  Minnesota Statutes 1996, section 60A.951, 
 21.16  subdivision 5, is amended to read: 
 21.17     Subd. 5.  [INSURER.] "Insurer" means insurance company, 
 21.18  risk retention group as defined in section 60E.02, service plan 
 21.19  corporation as defined in section 62C.02, health maintenance 
 21.20  organization as defined in section 62D.02, community integrated 
 21.21  service network as defined in section 62N.02, fraternal benefit 
 21.22  society regulated under chapter 64B, township mutual company 
 21.23  regulated under chapter 67A, joint self-insurance plan or 
 21.24  multiple employer trust regulated under chapter 60F, 62H, or 
 21.25  section 471.617, subdivision 2, persons administering a 
 21.26  self-insurance plan as defined in section 60A.23, subdivision 8, 
 21.27  clause (2), paragraphs (a) and (d), and the workers' 
 21.28  compensation reinsurance association established in section 
 21.29  79.34. 
 21.30     Sec. 2.  Minnesota Statutes 1996, section 62A.021, 
 21.31  subdivision 1, is amended to read: 
 21.32     Subdivision 1.  [LOSS RATIO STANDARDS.] (a) Notwithstanding 
 21.33  section 62A.02, subdivision 3, relating to loss ratios, health 
 21.34  care policies or certificates shall not be delivered or issued 
 21.35  for delivery to an individual or to a small employer as defined 
 21.36  in section 62L.02, unless the policies or certificates can be 
 22.1   expected, as estimated for the entire period for which rates are 
 22.2   computed to provide coverage, to return to Minnesota 
 22.3   policyholders and certificate holders in the form of aggregate 
 22.4   benefits not including anticipated refunds or credits, provided 
 22.5   under the policies or certificates, (1) at least 75 percent of 
 22.6   the aggregate amount of premiums earned in the case of policies 
 22.7   issued in the small employer market, as defined in section 
 22.8   62L.02, subdivision 27, calculated on an aggregate basis; and 
 22.9   (2) at least 65 percent of the aggregate amount of premiums 
 22.10  earned in the case of each policy form or certificate form 
 22.11  issued in the individual market; calculated on the basis of 
 22.12  incurred claims experience or incurred health care expenses 
 22.13  where coverage is provided by a health maintenance organization 
 22.14  on a service rather than reimbursement basis and earned premiums 
 22.15  for the period and according to accepted actuarial principles 
 22.16  and practices.  Assessments by the reinsurance association 
 22.17  created in chapter 62L and any all types of taxes, surcharges, 
 22.18  or assessments created by Laws 1992, chapter 549, or created on 
 22.19  or after April 23, 1992, are included in the calculation of 
 22.20  incurred claims experience or incurred health care expenses.  
 22.21  The applicable percentage for policies and certificates issued 
 22.22  in the small employer market, as defined in section 62L.02, 
 22.23  increases by one percentage point on July 1 of each year, 
 22.24  beginning on July 1, 1994, until an 82 percent loss ratio is 
 22.25  reached on July 1, 2000.  The applicable percentage for policy 
 22.26  forms and certificate forms issued in the individual market 
 22.27  increases by one percentage point on July 1 of each year, 
 22.28  beginning on July 1, 1994, until a 72 percent loss ratio is 
 22.29  reached on July 1, 2000.  A health carrier that enters a market 
 22.30  after July 1, 1993, does not start at the beginning of the 
 22.31  phase-in schedule and must instead comply with the loss ratio 
 22.32  requirements applicable to other health carriers in that market 
 22.33  for each time period.  Premiums earned and claims incurred in 
 22.34  markets other than the small employer and individual markets are 
 22.35  not relevant for purposes of this section. 
 22.36     Notwithstanding section 645.26, any act enacted at the 1992 
 23.1   regular legislative session that amends or repeals section 
 23.2   62A.135 or that otherwise changes the loss ratios provided in 
 23.3   that section is void. 
 23.4      (b) All filings of rates and rating schedules shall 
 23.5   demonstrate that actual expected claims in relation to premiums 
 23.6   comply with the requirements of this section when combined with 
 23.7   actual experience to date.  Filings of rate revisions shall also 
 23.8   demonstrate that the anticipated loss ratio over the entire 
 23.9   future period for which the revised rates are computed to 
 23.10  provide coverage can be expected to meet the appropriate loss 
 23.11  ratio standards, and aggregate loss ratio from inception of the 
 23.12  policy form or certificate form shall equal or exceed the 
 23.13  appropriate loss ratio standards. 
 23.14     (c) A health carrier that issues health care policies and 
 23.15  certificates to individuals or to small employers, as defined in 
 23.16  section 62L.02, in this state shall file annually its rates, 
 23.17  rating schedule, and supporting documentation including ratios 
 23.18  of incurred losses to earned premiums by policy form or 
 23.19  certificate form duration for approval by the commissioner 
 23.20  according to the filing requirements and procedures prescribed 
 23.21  by the commissioner.  The supporting documentation shall also 
 23.22  demonstrate in accordance with actuarial standards of practice 
 23.23  using reasonable assumptions that the appropriate loss ratio 
 23.24  standards can be expected to be met over the entire period for 
 23.25  which rates are computed.  The demonstration shall exclude 
 23.26  active life reserves.  If the data submitted does not confirm 
 23.27  that the health carrier has satisfied the loss ratio 
 23.28  requirements of this section, the commissioner shall notify the 
 23.29  health carrier in writing of the deficiency.  The health carrier 
 23.30  shall have 30 days from the date of the commissioner's notice to 
 23.31  file amended rates that comply with this section.  If the health 
 23.32  carrier fails to file amended rates within the prescribed time, 
 23.33  the commissioner shall order that the health carrier's filed 
 23.34  rates for the nonconforming policy form or certificate form be 
 23.35  reduced to an amount that would have resulted in a loss ratio 
 23.36  that complied with this section had it been in effect for the 
 24.1   reporting period of the supplement.  The health carrier's 
 24.2   failure to file amended rates within the specified time or the 
 24.3   issuance of the commissioner's order amending the rates does not 
 24.4   preclude the health carrier from filing an amendment of its 
 24.5   rates at a later time.  The commissioner shall annually make the 
 24.6   submitted data available to the public at a cost not to exceed 
 24.7   the cost of copying.  The data must be compiled in a form useful 
 24.8   for consumers who wish to compare premium charges and loss 
 24.9   ratios. 
 24.10     (d) Each sale of a policy or certificate that does not 
 24.11  comply with the loss ratio requirements of this section is an 
 24.12  unfair or deceptive act or practice in the business of insurance 
 24.13  and is subject to the penalties in sections 72A.17 to 72A.32. 
 24.14     (e)(1) For purposes of this section, health care policies 
 24.15  issued as a result of solicitations of individuals through the 
 24.16  mail or mass media advertising, including both print and 
 24.17  broadcast advertising, shall be treated as individual policies. 
 24.18     (2) For purposes of this section, (1) (i) "health care 
 24.19  policy" or "health care certificate" is a health plan as defined 
 24.20  in section 62A.011; and (2) (ii) "health carrier" has the 
 24.21  meaning given in section 62A.011 and includes all health 
 24.22  carriers delivering or issuing for delivery health care policies 
 24.23  or certificates in this state or offering these policies or 
 24.24  certificates to residents of this state.  
 24.25     (f) The loss ratio phase-in as described in paragraph (a) 
 24.26  does not apply to individual policies and small employer 
 24.27  policies issued by a health plan company that is assessed less 
 24.28  than three percent of the total annual amount assessed by the 
 24.29  Minnesota comprehensive health association.  These policies must 
 24.30  meet a 68 percent loss ratio for individual policies, a 71 
 24.31  percent loss ratio for small employer policies with fewer than 
 24.32  ten employees, and a 75 percent loss ratio for all other small 
 24.33  employer policies. 
 24.34     (g) The commissioners of commerce and health shall each 
 24.35  annually issue a public report listing, by health plan company, 
 24.36  the actual loss ratios experienced in the individual and small 
 25.1   employer markets in this state by the health plan companies that 
 25.2   the commissioners respectively regulate.  The commissioners 
 25.3   shall coordinate release of these reports so as to release them 
 25.4   as a joint report or as separate reports issued the same day.  
 25.5   The report or reports shall be released no later than June 1 for 
 25.6   loss ratios experienced for the preceding calendar year.  Health 
 25.7   plan companies shall provide to the commissioners any 
 25.8   information requested by the commissioners for purposes of this 
 25.9   paragraph. 
 25.10     Sec. 3.  Minnesota Statutes 1996, section 62A.021, is 
 25.11  amended by adding a subdivision to read: 
 25.12     Subd. 3.  [LOSS RATIO DISCLOSURE.] (a) Each health care 
 25.13  policy form or health care certificate form for which 
 25.14  subdivision 1 requires compliance with a loss ratio requirement 
 25.15  shall prominently display the disclosure provided in paragraph 
 25.16  (b) on its declarations sheet if it has one and, if not, on its 
 25.17  front page.  The disclosure must also be prominently displayed 
 25.18  in any marketing materials used in connection with it. 
 25.19     (b) The disclosure must be in the following format:  
 25.20     Notice:  This disclosure is required by Minnesota law.  
 25.21  This policy or certificate is expected to return on average 
 25.22  (fill in anticipated loss ratio approved by the commissioner) 
 25.23  percent of your premium dollar for health care.  The lowest 
 25.24  percentage permitted by state law for this policy or certificate 
 25.25  is (fill in applicable minimum loss ratio). 
 25.26     (c) This subdivision applies to policies and certificates 
 25.27  issued on or after January 1, 1998. 
 25.28     Sec. 4.  Minnesota Statutes 1996, section 62A.316, is 
 25.29  amended to read: 
 25.30     62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.] 
 25.31     (a) The basic Medicare supplement plan must have a level of 
 25.32  coverage that will provide: 
 25.33     (1) coverage for all of the Medicare part A inpatient 
 25.34  hospital coinsurance amounts, and 100 percent of all Medicare 
 25.35  part A eligible expenses for hospitalization not covered by 
 25.36  Medicare, after satisfying the Medicare part A deductible; 
 26.1      (2) coverage for the daily copayment amount of Medicare 
 26.2   part A eligible expenses for the calendar year incurred for 
 26.3   skilled nursing facility care; 
 26.4      (3) coverage for the copayment amount of Medicare eligible 
 26.5   expenses under Medicare part B regardless of hospital 
 26.6   confinement, subject to the Medicare part B deductible amount; 
 26.7      (4) 80 percent of the hospital and medical expenses and 
 26.8   supplies incurred during travel outside the United States as a 
 26.9   result of a medical emergency; 
 26.10     (5) coverage for the reasonable cost of the first three 
 26.11  pints of blood, or equivalent quantities of packed red blood 
 26.12  cells as defined under federal regulations under Medicare parts 
 26.13  A and B, unless replaced in accordance with federal regulations; 
 26.14  and 
 26.15     (6) 100 percent of the cost of immunizations and routine 
 26.16  screening procedures for cancer screening including mammograms 
 26.17  and pap smears. 
 26.18     (b) Only the following optional benefit riders may be added 
 26.19  to this plan: 
 26.20     (1) coverage for all of the Medicare part A inpatient 
 26.21  hospital deductible amount; 
 26.22     (2) a minimum of 80 percent of eligible medical expenses 
 26.23  and supplies not covered by Medicare part B, not to exceed any 
 26.24  charge limitation established by the Medicare program or state 
 26.25  law; 
 26.26     (3) coverage for all of the Medicare part B annual 
 26.27  deductible; 
 26.28     (4) coverage for at least 50 percent, or the equivalent of 
 26.29  50 percent, of usual and customary prescription drug expenses; 
 26.30     (5) coverage for the following preventive health services: 
 26.31     (i) an annual clinical preventive medical history and 
 26.32  physical examination that may include tests and services from 
 26.33  clause (ii) and patient education to address preventive health 
 26.34  care measures; 
 26.35     (ii) any one or a combination of the following preventive 
 26.36  screening tests or preventive services, the frequency of which 
 27.1   is considered medically appropriate: 
 27.2      (A) fecal occult blood test and/or digital rectal 
 27.3   examination; 
 27.4      (B) dipstick urinalysis for hematuria, bacteriuria, and 
 27.5   proteinuria; 
 27.6      (C) pure tone (air only) hearing screening test, 
 27.7   administered or ordered by a physician; 
 27.8      (D) serum cholesterol screening every five years; 
 27.9      (E) thyroid function test; 
 27.10     (F) diabetes screening; 
 27.11     (iii) any other tests or preventive measures determined 
 27.12  appropriate by the attending physician. 
 27.13     Reimbursement shall be for the actual charges up to 100 
 27.14  percent of the Medicare-approved amount for each service, as if 
 27.15  Medicare were to cover the service as identified in American 
 27.16  Medical Association current procedural terminology (AMA CPT) 
 27.17  codes, to a maximum of $120 annually under this benefit.  This 
 27.18  benefit shall not include payment for a procedure covered by 
 27.19  Medicare; 
 27.20     (6) coverage for services to provide short-term at-home 
 27.21  assistance with activities of daily living for those recovering 
 27.22  from an illness, injury, or surgery: 
 27.23     (i) For purposes of this benefit, the following definitions 
 27.24  apply: 
 27.25     (A) "activities of daily living" include, but are not 
 27.26  limited to, bathing, dressing, personal hygiene, transferring, 
 27.27  eating, ambulating, assistance with drugs that are normally 
 27.28  self-administered, and changing bandages or other dressings; 
 27.29     (B) "care provider" means a duly qualified or licensed home 
 27.30  health aide/homemaker, personal care aid, or nurse provided 
 27.31  through a licensed home health care agency or referred by a 
 27.32  licensed referral agency or licensed nurses registry; 
 27.33     (C) "home" means a place used by the insured as a place of 
 27.34  residence, provided that the place would qualify as a residence 
 27.35  for home health care services covered by Medicare.  A hospital 
 27.36  or skilled nursing facility shall not be considered the 
 28.1   insured's place of residence; 
 28.2      (D) "at-home recovery visit" means the period of a visit 
 28.3   required to provide at-home recovery care, without limit on the 
 28.4   duration of the visit, except each consecutive four hours in a 
 28.5   24-hour period of services provided by a care provider is one 
 28.6   visit; 
 28.7      (ii) Coverage requirements and limitations: 
 28.8      (A) at-home recovery services provided must be primarily 
 28.9   services that assist in activities of daily living; 
 28.10     (B) the insured's attending physician must certify that the 
 28.11  specific type and frequency of at-home recovery services are 
 28.12  necessary because of a condition for which a home care plan of 
 28.13  treatment was approved by Medicare; 
 28.14     (C) coverage is limited to: 
 28.15     (I) no more than the number and type of at-home recovery 
 28.16  visits certified as necessary by the insured's attending 
 28.17  physician.  The total number of at-home recovery visits shall 
 28.18  not exceed the number of Medicare-approved home care visits 
 28.19  under a Medicare-approved home care plan of treatment; 
 28.20     (II) the actual charges for each visit up to a maximum 
 28.21  reimbursement of $40 per visit; 
 28.22     (III) $1,600 per calendar year; 
 28.23     (IV) seven visits in any one week; 
 28.24     (V) care furnished on a visiting basis in the insured's 
 28.25  home; 
 28.26     (VI) services provided by a care provider as defined in 
 28.27  this section; 
 28.28     (VII) at-home recovery visits while the insured is covered 
 28.29  under the policy or certificate and not otherwise excluded; 
 28.30     (VIII) at-home recovery visits received during the period 
 28.31  the insured is receiving Medicare-approved home care services or 
 28.32  no more than eight weeks after the service date of the last 
 28.33  Medicare-approved home health care visit; 
 28.34     (iii) Coverage is excluded for: 
 28.35     (A) home care visits paid for by Medicare or other 
 28.36  government programs; and 
 29.1      (B) care provided by family members, unpaid volunteers, or 
 29.2   providers who are not care providers.; 
 29.3      (7) coverage for at least 50 percent, or the equivalent of 
 29.4   50 percent, of usual and customary prescription drug expenses to 
 29.5   a maximum of $1,200 paid by the issuer annually under this 
 29.6   benefit.  An issuer of Medicare supplement insurance policies 
 29.7   that elects to offer this benefit rider shall also make 
 29.8   available coverage that contains the rider specified in clause 
 29.9   (4). 
 29.10     Sec. 5.  Minnesota Statutes 1996, section 62A.61, is 
 29.11  amended to read: 
 29.12     62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO 
 29.13  DETERMINE USUAL AND CUSTOMARY FEES.] 
 29.14     (a) A health carrier that bases reimbursement to health 
 29.15  care providers upon a usual and customary fee must maintain in 
 29.16  its office a copy of a description of the methodology used to 
 29.17  calculate fees including at least the following: 
 29.18     (1) the frequency of the determination of usual and 
 29.19  customary fees; 
 29.20     (2) a general description of the methodology used to 
 29.21  determine usual and customary fees; and 
 29.22     (3) the percentile of usual and customary fees that 
 29.23  determines the maximum allowable reimbursement. 
 29.24     (b) A health carrier must provide a copy of the information 
 29.25  described in paragraph (a) to the Minnesota health care 
 29.26  commission, the commissioner of health, or the commissioner of 
 29.27  commerce, upon request. 
 29.28     (c) The commissioner of health or the commissioner of 
 29.29  commerce, as appropriate, may use to enforce this section any 
 29.30  enforcement powers otherwise available to the commissioner with 
 29.31  respect to the health carrier.  The appropriate commissioner 
 29.32  shall enforce compliance with a request made under this section 
 29.33  by the Minnesota health care commission, at the request of the 
 29.34  commissioner.  The commissioner of health or commerce, as 
 29.35  appropriate, may require health carriers to provide the 
 29.36  information required under this section and may use any powers 
 30.1   granted under other laws relating to the regulation of health 
 30.2   carriers to enforce compliance. 
 30.3      (d) For purposes of this section, "health carrier" has the 
 30.4   meaning given in section 62A.011. 
 30.5      Sec. 6.  Minnesota Statutes 1996, section 62D.02, 
 30.6   subdivision 5, is amended to read: 
 30.7      Subd. 5.  "Evidence of coverage" means any certificate, 
 30.8   agreement or contract, and amendments thereto, issued to an 
 30.9   enrollee which sets out the coverage to which the enrollee is 
 30.10  entitled under the health maintenance contract which covers the 
 30.11  enrollee. 
 30.12     Sec. 7.  Minnesota Statutes 1996, section 62D.09, 
 30.13  subdivision 3, is amended to read: 
 30.14     Subd. 3.  Every health maintenance organization or its 
 30.15  representative shall annually, before June 1, provide to its 
 30.16  enrollees the following:  (1) a summary of its most recent 
 30.17  annual financial statement including a balance sheet and 
 30.18  statement of receipts and disbursements; (2) a description of 
 30.19  the health maintenance organization, its health care plan or 
 30.20  plans, its facilities and personnel, any material changes 
 30.21  therein since the last report; (3) the current evidence of 
 30.22  coverage, or contract amendments thereto; and (4) a statement of 
 30.23  consumer information and rights as described in section 62D.07, 
 30.24  subdivision 3, paragraph (c).  Under clause (3), a health 
 30.25  maintenance organization may annually alternate between 
 30.26  providing enrollees with amendments and providing current 
 30.27  evidence of coverage. 
 30.28     Sec. 8.  Minnesota Statutes 1996, section 62E.11, 
 30.29  subdivision 5, is amended to read: 
 30.30     Subd. 5.  Each contributing member of the association shall 
 30.31  share the losses due to claims expenses of the comprehensive 
 30.32  health insurance plan for plans issued or approved for issuance 
 30.33  by the association, and shall share in the operating and 
 30.34  administrative expenses incurred or estimated to be incurred by 
 30.35  the association incident to the conduct of its affairs.  Claims 
 30.36  expenses of the state plan which exceed the premium payments 
 31.1   allocated to the payment of benefits shall be the liability of 
 31.2   the contributing members.  Contributing members shall share in 
 31.3   the claims expense of the state plan and operating and 
 31.4   administrative expenses of the association in an amount equal to 
 31.5   the ratio of the contributing member's total accident and health 
 31.6   insurance premium, received from or on behalf of Minnesota 
 31.7   residents as divided by the total accident and health insurance 
 31.8   premium, received by all contributing members from or on behalf 
 31.9   of Minnesota residents, as determined by the commissioner.  
 31.10  Payments made by the state to a contributing member for medical 
 31.11  assistance, MinnesotaCare, or general assistance medical care 
 31.12  services according to chapters 256, 256B, and 256D shall be 
 31.13  excluded when determining a contributing member's total premium. 
 31.14     Sec. 9.  Minnesota Statutes 1996, section 62J.017, is 
 31.15  amended to read: 
 31.16     62J.017 [IMPLEMENTATION TIMETABLE.] 
 31.17     The state seeks to complete the restructuring of the health 
 31.18  care delivery and financing system.  Beginning July 1, 1994, 
 31.19  measures will be taken to increase the public accountability of 
 31.20  existing health plan companies, to promote the development of 
 31.21  small, community-based integrated service networks, and to 
 31.22  reduce administrative costs by standardizing third-party billing 
 31.23  forms and procedures and utilization review requirements.  
 31.24  Voluntary formation of other integrated service networks will 
 31.25  begin after rules have been adopted, but not before July 1, 
 31.26  1996.  Statutes and rules for the restructured health care 
 31.27  financing and delivery system must be enacted or adopted by 
 31.28  January 1, 1996. 
 31.29     Sec. 10.  Minnesota Statutes 1996, section 62J.06, is 
 31.30  amended to read: 
 31.31     62J.06 [IMMUNITY FROM LIABILITY.] 
 31.32     No member of the Minnesota health care commission 
 31.33  established under section 62J.05, regional coordinating boards 
 31.34  established under section 62J.09, or the health technology 
 31.35  advisory committee established under section 62J.15, shall be 
 31.36  held civilly or criminally liable for an act or omission by that 
 32.1   person if the act or omission was in good faith and within the 
 32.2   scope of the member's responsibilities under this chapter.  
 32.3      Sec. 11.  Minnesota Statutes 1996, section 62J.07, 
 32.4   subdivision 1, is amended to read: 
 32.5      Subdivision 1.  [LEGISLATIVE OVERSIGHT.] The legislative 
 32.6   commission on health care access reviews the activities of the 
 32.7   commissioner of health, the state health care 
 32.8   commission regional coordinating boards, the health technology 
 32.9   advisory committee, and all other state agencies involved in the 
 32.10  implementation and administration of this chapter, including 
 32.11  efforts to obtain federal approval through waivers and other 
 32.12  means.  
 32.13     Sec. 12.  Minnesota Statutes 1996, section 62J.07, 
 32.14  subdivision 3, is amended to read: 
 32.15     Subd. 3.  [REPORTS TO THE COMMISSION.] The commissioner of 
 32.16  health and the Minnesota health care commission, the regional 
 32.17  coordinating boards, and the health technology advisory 
 32.18  committee shall report on their activities and the activities of 
 32.19  the regional boards annually and at other times at the request 
 32.20  of the legislative commission on health care access.  The 
 32.21  commissioners of health, commerce, and human services shall 
 32.22  provide periodic reports to the legislative commission on the 
 32.23  progress of rulemaking that is authorized or required under this 
 32.24  act and shall notify members of the commission when a draft of a 
 32.25  proposed rule has been completed and scheduled for publication 
 32.26  in the State Register.  At the request of a member of the 
 32.27  commission, a commissioner shall provide a description and a 
 32.28  copy of a proposed rule. 
 32.29     Sec. 13.  Minnesota Statutes 1996, section 62J.09, 
 32.30  subdivision 1, is amended to read: 
 32.31     Subdivision 1.  [GENERAL DUTIES.] (a) The commissioner 
 32.32  shall divide the state into six regions, one of these regions 
 32.33  being the seven-county metropolitan area.  
 32.34     The (b) Each region shall establish a locally controlled 
 32.35  regional coordinating boards are locally controlled boards board 
 32.36  consisting of providers, health plan companies, employers, 
 33.1   consumers, and elected officials.  Regional coordinating boards 
 33.2   may: 
 33.3      (1) undertake voluntary activities to educate consumers, 
 33.4   providers, and purchasers about community plans and projects 
 33.5   promoting health care cost containment, consumer accountability, 
 33.6   access, and quality and efforts to achieve public health goals; 
 33.7      (2) make recommendations to the commissioner regarding ways 
 33.8   of improving affordability, accessibility, and quality of health 
 33.9   care in the region and throughout the state; 
 33.10     (3) provide technical assistance to parties interested in 
 33.11  establishing or operating a community integrated service network 
 33.12  or integrated service network within the region.  This 
 33.13  assistance must complement assistance provided by the 
 33.14  commissioner under section 62N.23; 
 33.15     (4) advise the commissioner on public health goals, taking 
 33.16  into consideration the relevant portions of the community health 
 33.17  service plans, plans required by the Minnesota comprehensive 
 33.18  adult mental health act, the Minnesota comprehensive children's 
 33.19  mental health act, and the community social service act plans 
 33.20  developed by county boards or community health boards in the 
 33.21  region under chapters 145A, 245, and 256E; 
 33.22     (5) prepare an annual regional education plan that is 
 33.23  consistent with and supportive of public health goals identified 
 33.24  by community health boards in the region; and 
 33.25     (6) serve as advisory bodies to identify potential 
 33.26  applicants for federal Health Professional Shortage Area and 
 33.27  federal Medically Underserved Area designation as requested by 
 33.28  the commissioner. 
 33.29     Sec. 14.  Minnesota Statutes 1996, section 62J.15, 
 33.30  subdivision 1, is amended to read: 
 33.31     Subdivision 1.  [HEALTH TECHNOLOGY ADVISORY COMMITTEE.] The 
 33.32  Minnesota health care commission shall convene legislative 
 33.33  commission on health care access may convene or authorize the 
 33.34  commissioner of health to convene an advisory committee to 
 33.35  conduct evaluations of existing research and technology 
 33.36  assessments conducted by other entities of new and existing 
 34.1   health care technologies as designated by the legislative 
 34.2   commission on health care access, the commissioner, or the 
 34.3   advisory committee.  The advisory committee may include members 
 34.4   of the state commission and other persons appointed by the 
 34.5   commission.  The advisory committee must include at least one 
 34.6   person representing physicians, at least one person representing 
 34.7   hospitals, and at least one person representing the health care 
 34.8   technology industry.  Health care technologies include high-cost 
 34.9   drugs, devices, procedures, or processes applied to human health 
 34.10  care, such as high-cost transplants and expensive scanners and 
 34.11  imagers.  The advisory committee is governed by section 15.0575, 
 34.12  subdivision 3, except that members do not receive per diem 
 34.13  payments. 
 34.14     Sec. 15.  Minnesota Statutes 1996, section 62J.152, 
 34.15  subdivision 1, is amended to read: 
 34.16     Subdivision 1.  [GENERALLY.] The health technology advisory 
 34.17  committee established in section 62J.15 shall: 
 34.18     (1) develop criteria and processes for evaluating health 
 34.19  care technology assessments made by other entities; 
 34.20     (2) conduct evaluations of specific technologies and their 
 34.21  specific use and application; 
 34.22     (3) provide the legislature with scientific evaluations of 
 34.23  proposed benefit mandates that utilize health care technologies 
 34.24  for a specific use and application; 
 34.25     (4) report the results of the evaluations to the 
 34.26  commissioner and the Minnesota health care 
 34.27  commission legislative commission on health care access; and 
 34.28     (4) (5) carry out other duties relating to health 
 34.29  technology assigned by the commission legislature or the 
 34.30  legislative commission on health care access. 
 34.31     Sec. 16.  Minnesota Statutes 1996, section 62J.152, is 
 34.32  amended by adding a subdivision to read: 
 34.33     Subd. 1a.  [LEGISLATIVE ACTION.] Nothing in subdivision 1 
 34.34  shall be construed to: 
 34.35     (1) require the legislature to postpone hearings or 
 34.36  legislative action on a proposed benefit mandate; or 
 35.1      (2) require the legislature to act in accordance with any 
 35.2   recommendations of the health technology advisory committee. 
 35.3      Sec. 17.  Minnesota Statutes 1996, section 62J.152, 
 35.4   subdivision 2, is amended to read: 
 35.5      Subd. 2.  [PRIORITIES FOR DESIGNATING TECHNOLOGIES CRITERIA 
 35.6   FOR ASSESSMENT EVALUATION.] The health technology advisory 
 35.7   committee shall consider the following criteria in designating 
 35.8   assessing or evaluating technologies for evaluation: 
 35.9      (1) the level of controversy within the medical or 
 35.10  scientific community, including questionable or undetermined 
 35.11  efficacy; 
 35.12     (2) the cost implications; 
 35.13     (3) the potential for rapid diffusion; 
 35.14     (4) the impact on a substantial patient population; 
 35.15     (5) the existence of alternative technologies; 
 35.16     (6) the impact on patient safety and health outcome; 
 35.17     (7) the public health importance; 
 35.18     (8) the level of public and professional demand; 
 35.19     (9) the social, ethical, and legal concerns; and 
 35.20     (10) the prevalence of the disease or condition. 
 35.21  The committee may give different weights or attach different 
 35.22  importance to each of the criteria, depending on the technology 
 35.23  being considered.  The committee shall consider any additional 
 35.24  criteria approved by the commissioner and the Minnesota health 
 35.25  care commission legislative commission on health care access.  
 35.26  The committee shall present its list of technologies for 
 35.27  evaluation to the legislative commission on health care access 
 35.28  for review. 
 35.29     Sec. 18.  Minnesota Statutes 1996, section 62J.152, 
 35.30  subdivision 4, is amended to read: 
 35.31     Subd. 4.  [TECHNOLOGY EVALUATION PROCESS.] (a) The health 
 35.32  technology advisory committee shall collect and evaluate studies 
 35.33  and research findings on the technologies selected for 
 35.34  evaluation from as wide of a range of sources as needed, 
 35.35  including, but not limited to:  federal agencies or other units 
 35.36  of government, international organizations conducting health 
 36.1   care technology assessments, health carriers, insurers, 
 36.2   manufacturers, professional and trade associations, nonprofit 
 36.3   organizations, and academic institutions.  The health technology 
 36.4   advisory committee may use consultants or experts and solicit 
 36.5   testimony or other input as needed to evaluate a specific 
 36.6   technology. 
 36.7      (b) When the evaluation process on a specific technology 
 36.8   has been completed, the health technology advisory committee 
 36.9   shall submit a preliminary report to the health care 
 36.10  commission commissioner and the legislative commission on health 
 36.11  care access and publish a summary of the preliminary report in 
 36.12  the State Register with a notice that written comments may be 
 36.13  submitted.  The preliminary report must include the results of 
 36.14  the technology assessment evaluation, studies and research 
 36.15  findings considered in conducting the evaluation, and the health 
 36.16  technology advisory committee's summary statement about the 
 36.17  evaluation.  Any interested persons or organizations may submit 
 36.18  to the health technology advisory committee written comments 
 36.19  regarding the technology evaluation within 30 days from the date 
 36.20  the preliminary report was published in the State Register.  The 
 36.21  health technology advisory committee's final report on its 
 36.22  technology evaluation must be submitted to the health care 
 36.23  commission commissioner, to the legislature, and to the 
 36.24  information clearinghouse.  A summary of written comments 
 36.25  received by the health technology advisory committee within the 
 36.26  30-day period must be included in the final report.  The health 
 36.27  care commission shall review the final report and prepare its 
 36.28  comments and recommendations.  Before completing its final 
 36.29  comments and recommendations, the health care commission shall 
 36.30  provide adequate public notice that testimony will be accepted 
 36.31  by the health care commission.  The health care commission shall 
 36.32  then forward the final report, its comments and recommendations, 
 36.33  and a summary of the public's comments to the commissioner and 
 36.34  information clearinghouse. 
 36.35     (c) The reports of the health technology advisory committee 
 36.36  and the comments and recommendations of the health care 
 37.1   commission should not eliminate or bar new technology, and are 
 37.2   not rules as defined in the administrative procedure act. 
 37.3      Sec. 19.  Minnesota Statutes 1996, section 62J.152, 
 37.4   subdivision 5, is amended to read: 
 37.5      Subd. 5.  [USE OF TECHNOLOGY EVALUATION.] (a) The final 
 37.6   report on the technology evaluation and the commission's 
 37.7   comments and recommendations may be used: 
 37.8      (1) by the commissioner in retrospective and prospective 
 37.9   review of major expenditures; 
 37.10     (2) by integrated service networks and other group 
 37.11  purchasers and by employers, in making coverage, contracting, 
 37.12  purchasing, and reimbursement decisions; 
 37.13     (3) by organizations in the development of practice 
 37.14  parameters; 
 37.15     (4) by health care providers in making decisions about 
 37.16  adding or replacing technology and the appropriate use of 
 37.17  technology; 
 37.18     (5) by consumers in making decisions about treatment; 
 37.19     (6) by medical device manufacturers in developing and 
 37.20  marketing new technologies; and 
 37.21     (7) as otherwise needed by health care providers, health 
 37.22  care plans, consumers, and purchasers. 
 37.23     (b) At the request of the commissioner, the health care 
 37.24  commission, in consultation with the health technology advisory 
 37.25  committee, shall submit specific recommendations relating to 
 37.26  technologies that have been evaluated under this section for 
 37.27  purposes of retrospective and prospective review of major 
 37.28  expenditures and coverage, contracting, purchasing, and 
 37.29  reimbursement decisions affecting state programs. 
 37.30     Sec. 20.  Minnesota Statutes 1996, section 62J.152, is 
 37.31  amended by adding a subdivision to read: 
 37.32     Subd. 8.  [REPEALER.] This section and sections 62J.15 and 
 37.33  62J.156 are repealed effective July 1, 2001. 
 37.34     Sec. 21.  Minnesota Statutes 1996, section 62J.17, 
 37.35  subdivision 6a, is amended to read: 
 37.36     Subd. 6a.  [PROSPECTIVE REVIEW AND APPROVAL.] (a) 
 38.1   [REQUIREMENT.] No health care provider subject to prospective 
 38.2   review under this subdivision shall make a major spending 
 38.3   commitment unless:  
 38.4      (1) the provider has filed an application with the 
 38.5   commissioner to proceed with the major spending commitment and 
 38.6   has provided all supporting documentation and evidence requested 
 38.7   by the commissioner; and 
 38.8      (2) the commissioner determines, based upon this 
 38.9   documentation and evidence, that the major spending commitment 
 38.10  is appropriate under the criteria provided in subdivision 5a in 
 38.11  light of the alternatives available to the provider.  
 38.12     (b)  [APPLICATION.] A provider subject to prospective 
 38.13  review and approval shall submit an application to the 
 38.14  commissioner before proceeding with any major spending 
 38.15  commitment.  The application must address each item listed in 
 38.16  subdivision 4a, paragraph (a), and must also include 
 38.17  documentation to support the response to each item.  The 
 38.18  provider may submit information, with supporting documentation, 
 38.19  regarding why the major spending commitment should be excepted 
 38.20  from prospective review under subdivision 7.  The submission may 
 38.21  be made either in addition to or instead of the submission of 
 38.22  information relating to the items listed in subdivision 4a, 
 38.23  paragraph (a).  
 38.24     (c)  [REVIEW.] The commissioner shall determine, based upon 
 38.25  the information submitted, whether the major spending commitment 
 38.26  is appropriate under the criteria provided in subdivision 5a, or 
 38.27  whether it should be excepted from prospective review under 
 38.28  subdivision 7.  In making this determination, the commissioner 
 38.29  may also consider relevant information from other sources.  At 
 38.30  the request of the commissioner, the Minnesota health care 
 38.31  commission health technology advisory committee shall convene an 
 38.32  expert review panel made up of persons with knowledge and 
 38.33  expertise regarding medical equipment, specialized services, 
 38.34  health care expenditures, and capital expenditures to review 
 38.35  applications and make recommendations to the commissioner.  The 
 38.36  commissioner shall make a decision on the application within 60 
 39.1   days after an application is received. 
 39.2      (d)  [PENALTIES AND REMEDIES.] The commissioner of health 
 39.3   has the authority to issue fines, seek injunctions, and pursue 
 39.4   other remedies as provided by law. 
 39.5      Sec. 22.  Minnesota Statutes 1996, section 62J.22, is 
 39.6   amended to read: 
 39.7      62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.] 
 39.8      The commissioner of health shall seek the full 
 39.9   participation of federal health care programs under this 
 39.10  chapter, including Medicare, medical assistance, veterans 
 39.11  administration programs, and other federal programs.  The 
 39.12  commissioner of human services shall under the direction of the 
 39.13  health care commission submit waiver requests and take other 
 39.14  action necessary to obtain federal approval to allow 
 39.15  participation of the medical assistance program.  Other state 
 39.16  agencies shall provide assistance at the request of the 
 39.17  commission.  If federal approval is not given for one or more 
 39.18  federal programs, data on the amount of health care spending 
 39.19  that is collected under section 62J.04 shall be adjusted so that 
 39.20  state and regional spending limits take into account the failure 
 39.21  of the federal program to participate. 
 39.22     Sec. 23.  Minnesota Statutes 1996, section 62J.25, is 
 39.23  amended to read: 
 39.24     62J.25 [MANDATORY MEDICARE ASSIGNMENT.] 
 39.25     (a) Effective January 1, 1993, a health care provider 
 39.26  authorized to participate in the Medicare program shall not 
 39.27  charge to or collect from a Medicare beneficiary who is a 
 39.28  Minnesota resident any amount in excess of 115 percent of the 
 39.29  Medicare-approved amount for any Medicare-covered service 
 39.30  provided. 
 39.31     (b) Effective January 1, 1994, a health care provider 
 39.32  authorized to participate in the Medicare program shall not 
 39.33  charge to or collect from a Medicare beneficiary who is a 
 39.34  Minnesota resident any amount in excess of 110 percent of the 
 39.35  Medicare-approved amount for any Medicare-covered service 
 39.36  provided. 
 40.1      (c) Effective January 1, 1995, a health care provider 
 40.2   authorized to participate in the Medicare program shall not 
 40.3   charge to or collect from a Medicare beneficiary who is a 
 40.4   Minnesota resident any amount in excess of 105 percent of the 
 40.5   Medicare-approved amount for any Medicare-covered service 
 40.6   provided. 
 40.7      (d) Effective January 1, 1996, a health care provider 
 40.8   authorized to participate in the Medicare program shall not 
 40.9   charge to or collect from a Medicare beneficiary who is a 
 40.10  Minnesota resident any amount in excess of the Medicare-approved 
 40.11  amount for any Medicare-covered service provided. 
 40.12     (e) This section does not apply to ambulance services as 
 40.13  defined in section 144.801, subdivision 4, or medical supplies 
 40.14  and equipment. 
 40.15     Sec. 24.  Minnesota Statutes 1996, section 62J.2914, 
 40.16  subdivision 1, is amended to read: 
 40.17     Subdivision 1.  [DISCLOSURE.] An application for approval 
 40.18  must include, to the extent applicable, disclosure of the 
 40.19  following: 
 40.20     (1) a descriptive title; 
 40.21     (2) a table of contents; 
 40.22     (3) exact names of each party to the application and the 
 40.23  address of the principal business office of each party; 
 40.24     (4) the name, address, and telephone number of the persons 
 40.25  authorized to receive notices and communications with respect to 
 40.26  the application; 
 40.27     (5) a verified statement by a responsible officer of each 
 40.28  party to the application attesting to the accuracy and 
 40.29  completeness of the enclosed information; 
 40.30     (6) background information relating to the proposed 
 40.31  arrangement, including: 
 40.32     (i) a description of the proposed arrangement, including a 
 40.33  list of any services or products that are the subject of the 
 40.34  proposed arrangement; 
 40.35     (ii) an identification of any tangential services or 
 40.36  products associated with the services or products that are the 
 41.1   subject of the proposed arrangement; 
 41.2      (iii) a description of the geographic territory involved in 
 41.3   the proposed arrangement; 
 41.4      (iv) if the geographic territory described in item (iii), 
 41.5   is different from the territory in which the applicants have 
 41.6   engaged in the type of business at issue over the last five 
 41.7   years, a description of how and why the geographic territory 
 41.8   differs; 
 41.9      (v) identification of all products or services that a 
 41.10  substantial share of consumers would consider substitutes for 
 41.11  any service or product that is the subject of the proposed 
 41.12  arrangement; 
 41.13     (vi) identification of whether any services or products of 
 41.14  the proposed arrangement are currently being offered, capable of 
 41.15  being offered, utilized, or capable of being utilized by other 
 41.16  providers or purchasers in the geographic territory described in 
 41.17  item (iii); 
 41.18     (vii) identification of the steps necessary, under current 
 41.19  market and regulatory conditions, for other parties to enter the 
 41.20  territory described in item (iii) and compete with the 
 41.21  applicant; 
 41.22     (viii) a description of the previous history of dealings 
 41.23  between the parties to the application; 
 41.24     (ix) a detailed explanation of the projected effects, 
 41.25  including expected volume, change in price, and increased 
 41.26  revenue, of the arrangement on each party's current businesses, 
 41.27  both generally as well as the aspects of the business directly 
 41.28  involved in the proposed arrangement; 
 41.29     (x) the present market share of the parties to the 
 41.30  application and of others affected by the proposed arrangement, 
 41.31  and projected market shares after implementation of the proposed 
 41.32  arrangement; 
 41.33     (xi) a statement of why the projected levels of cost, 
 41.34  access, or quality could not be achieved in the existing market 
 41.35  without the proposed arrangement; and 
 41.36     (xii) an explanation of how the arrangement relates to any 
 42.1   Minnesota health care commission or applicable regional 
 42.2   coordinating board plans for delivery of health care; and 
 42.3      (7) a detailed explanation of how the transaction will 
 42.4   affect cost, access, and quality.  The explanation must address 
 42.5   the factors in section 62J.2917, subdivision 2, paragraphs (b) 
 42.6   to (d), to the extent applicable. 
 42.7      Sec. 25.  Minnesota Statutes 1996, section 62J.2915, is 
 42.8   amended to read: 
 42.9      62J.2915 [NOTICE AND COMMENT.] 
 42.10     Subdivision 1.  [NOTICE.] The commissioner shall cause the 
 42.11  notice described in section 62J.2914, subdivision 2, to be 
 42.12  published in the State Register and sent to the Minnesota health 
 42.13  care commission, the regional coordinating boards for any 
 42.14  regions that include all or part of the territory covered by the 
 42.15  proposed arrangement, and any person who has requested to be 
 42.16  placed on a list to receive notice of applications.  The 
 42.17  commissioner may maintain separate notice lists for different 
 42.18  regions of the state.  The commissioner may also send a copy of 
 42.19  the notice to any person together with a request that the person 
 42.20  comment as provided under subdivision 2.  Copies of the request 
 42.21  must be provided to the applicant. 
 42.22     Subd. 2.  [COMMENTS.] Within 20 days after the notice is 
 42.23  published, any person may mail to the commissioner written 
 42.24  comments with respect to the application.  Within 30 days after 
 42.25  the notice is published, the Minnesota health care commission or 
 42.26  any regional coordinating board may mail to the commissioner 
 42.27  comments with respect to the application.  Persons submitting 
 42.28  comments shall provide a copy of the comments to the applicant.  
 42.29  The applicant may mail to the commissioner written responses to 
 42.30  any comments within ten days after the deadline for mailing such 
 42.31  comments.  The applicant shall send a copy of the response to 
 42.32  the person submitting the comment. 
 42.33     Sec. 26.  Minnesota Statutes 1996, section 62J.2916, 
 42.34  subdivision 1, is amended to read: 
 42.35     Subdivision 1.  [CHOICE OF PROCEDURES.] After the 
 42.36  conclusion of the period provided in section 62J.2915, 
 43.1   subdivision 2, for the applicant to respond to comments, the 
 43.2   commissioner shall select one of the three procedures provided 
 43.3   in subdivision 2.  In determining which procedure to use, the 
 43.4   commissioner shall consider the following criteria: 
 43.5      (1) the size of the proposed arrangement, in terms of 
 43.6   number of parties and amount of money involved; 
 43.7      (2) the complexity of the proposed arrangement; 
 43.8      (3) the novelty of the proposed arrangement; 
 43.9      (4) the substance and quantity of the comments received; 
 43.10     (5) any comments received from the Minnesota health care 
 43.11  commission or regional coordinating boards; and 
 43.12     (6) the presence or absence of any significant gaps in the 
 43.13  factual record. 
 43.14     If the applicant demands a contested case hearing no later 
 43.15  than the conclusion of the period provided in section 62J.2915, 
 43.16  subdivision 2, for the applicant to respond to comments, the 
 43.17  commissioner shall not select a procedure.  Instead, the 
 43.18  applicant shall be given a contested case proceeding as a matter 
 43.19  of right. 
 43.20     Sec. 27.  Minnesota Statutes 1996, section 62J.2917, 
 43.21  subdivision 2, is amended to read: 
 43.22     Subd. 2.  [FACTORS.] (a)  [GENERALLY APPLICABLE FACTORS.] 
 43.23  In making a determination about cost, access, and quality, the 
 43.24  commissioner may consider the following factors, to the extent 
 43.25  relevant: 
 43.26     (1) whether the proposal is compatible with the cost 
 43.27  containment plan or other plan of the Minnesota health care 
 43.28  commission or the applicable regional plans of the regional 
 43.29  coordinating boards; 
 43.30     (2) market structure: 
 43.31     (i) actual and potential sellers and buyers, or providers 
 43.32  and purchasers; 
 43.33     (ii) actual and potential consumers; 
 43.34     (iii) geographic market area; and 
 43.35     (iv) entry conditions; 
 43.36     (3) current market conditions; 
 44.1      (4) the historical behavior of the market; 
 44.2      (5) performance of other, similar arrangements; 
 44.3      (6) whether the proposal unnecessarily restrains 
 44.4   competition or restrains competition in ways not reasonably 
 44.5   related to the purposes of this chapter; and 
 44.6      (7) the financial condition of the applicant. 
 44.7      (b)  [COST.] The commissioner's analysis of cost must focus 
 44.8   on the individual consumer of health care.  Cost savings to be 
 44.9   realized by providers, health carriers, group purchasers, or 
 44.10  other participants in the health care system are relevant only 
 44.11  to the extent that the savings are likely to be passed on to the 
 44.12  consumer.  However, where an application is submitted by 
 44.13  providers or purchasers who are paid primarily by third party 
 44.14  payers unaffiliated with the applicant, it is sufficient for the 
 44.15  applicant to show that cost savings are likely to be passed on 
 44.16  to the unaffiliated third party payers; the applicants do not 
 44.17  have the burden of proving that third party payers with whom the 
 44.18  applicants are not affiliated will pass on cost savings to 
 44.19  individuals receiving coverage through the third party payers.  
 44.20  In making determinations as to costs, the commissioner may 
 44.21  consider: 
 44.22     (1) the cost savings likely to result to the applicant; 
 44.23     (2) the extent to which the cost savings are likely to be 
 44.24  passed on to the consumer and in what form; 
 44.25     (3) the extent to which the proposed arrangement is likely 
 44.26  to result in cost shifting by the applicant onto other payers or 
 44.27  purchasers of other products or services; 
 44.28     (4) the extent to which the cost shifting by the applicant 
 44.29  is likely to be followed by other persons in the market; 
 44.30     (5) the current and anticipated supply and demand for any 
 44.31  products or services at issue; 
 44.32     (6) the representations and guarantees of the applicant and 
 44.33  their enforceability; 
 44.34     (7) likely effectiveness of regulation by the commissioner; 
 44.35     (8) inferences to be drawn from market structure; 
 44.36     (9) the cost of regulation, both for the state and for the 
 45.1   applicant; and 
 45.2      (10) any other factors tending to show that the proposed 
 45.3   arrangement is or is not likely to reduce cost. 
 45.4      (c)  [ACCESS.] In making determinations as to access, the 
 45.5   commissioner may consider: 
 45.6      (1) the extent to which the utilization of needed health 
 45.7   care services or products by the intended targeted population is 
 45.8   likely to increase or decrease.  When a proposed arrangement is 
 45.9   likely to increase access in one geographic area, by lowering 
 45.10  prices or otherwise expanding supply, but limits access in 
 45.11  another geographic area by removing service capabilities from 
 45.12  that second area, the commissioner shall articulate the criteria 
 45.13  employed to balance these effects; 
 45.14     (2) the extent to which the proposed arrangement is likely 
 45.15  to make available a new and needed service or product to a 
 45.16  certain geographic area; and 
 45.17     (3) the extent to which the proposed arrangement is likely 
 45.18  to otherwise make health care services or products more 
 45.19  financially or geographically available to persons who need them.
 45.20     If the commissioner determines that the proposed 
 45.21  arrangement is likely to increase access and bases that 
 45.22  determination on a projected increase in utilization, the 
 45.23  commissioner shall also determine and make a specific finding 
 45.24  that the increased utilization does not reflect overutilization. 
 45.25     (d)  [QUALITY.] In making determinations as to quality, the 
 45.26  commissioner may consider the extent to which the proposed 
 45.27  arrangement is likely to: 
 45.28     (1) decrease morbidity and mortality; 
 45.29     (2) result in faster convalescence; 
 45.30     (3) result in fewer hospital days; 
 45.31     (4) permit providers to attain needed experience or 
 45.32  frequency of treatment, likely to lead to better outcomes; 
 45.33     (5) increase patient satisfaction; and 
 45.34     (6) have any other features likely to improve or reduce the 
 45.35  quality of health care. 
 45.36     Sec. 28.  Minnesota Statutes 1996, section 62J.2921, 
 46.1   subdivision 2, is amended to read: 
 46.2      Subd. 2.  [NOTICE.] The commissioner shall begin a 
 46.3   proceeding to revoke approval by providing written notice to the 
 46.4   applicant describing in detail the basis for the proposed 
 46.5   revocation.  Notice of the proceeding must be published in the 
 46.6   State Register and submitted to the Minnesota health care 
 46.7   commission and the applicable regional coordinating boards.  The 
 46.8   notice must invite the submission of comments to the 
 46.9   commissioner. 
 46.10     Sec. 29.  Minnesota Statutes 1996, section 62J.451, 
 46.11  subdivision 6b, is amended to read: 
 46.12     Subd. 6b.  [CONSUMER SURVEYS.] (a) The health data 
 46.13  institute shall develop and implement a mechanism for collecting 
 46.14  comparative data on consumer perceptions of the health care 
 46.15  system, including consumer satisfaction, through adoption of a 
 46.16  standard consumer survey.  This survey shall include enrollees 
 46.17  in community integrated service networks, integrated service 
 46.18  networks, health maintenance organizations, preferred provider 
 46.19  organizations, indemnity insurance plans, public programs, and 
 46.20  other health plan companies.  The health data institute, in 
 46.21  consultation with the health care commission, shall determine a 
 46.22  mechanism for the inclusion of the uninsured.  This consumer 
 46.23  survey may be conducted every two years.  A focused survey may 
 46.24  be conducted on the off years.  Health plan companies and group 
 46.25  purchasers shall provide to the health data institute roster 
 46.26  data as defined in subdivision 2, including the names, 
 46.27  addresses, and telephone numbers of enrollees and former 
 46.28  enrollees and other data necessary for the completion of this 
 46.29  survey.  This roster data provided by the health plan companies 
 46.30  and group purchasers is classified as provided under section 
 46.31  62J.452.  The health data institute may analyze and prepare 
 46.32  findings from the raw, unaggregated data, and the findings from 
 46.33  this survey may be included in the health plan company 
 46.34  performance reports specified in subdivision 6a, and in other 
 46.35  reports developed and disseminated by the health data institute 
 46.36  and the commissioner.  The raw, unaggregated data is classified 
 47.1   as provided under section 62J.452, and may be made available by 
 47.2   the health data institute to the extent permitted under section 
 47.3   62J.452.  The health data institute shall provide raw, 
 47.4   unaggregated data to the commissioner.  The survey may include 
 47.5   information on the following subjects: 
 47.6      (1) enrollees' overall satisfaction with their health care 
 47.7   plan; 
 47.8      (2) consumers' perception of access to emergency, urgent, 
 47.9   routine, and preventive care, including locations, hours, 
 47.10  waiting times, and access to care when needed; 
 47.11     (3) premiums and costs; 
 47.12     (4) technical competence of providers; 
 47.13     (5) communication, courtesy, respect, reassurance, and 
 47.14  support; 
 47.15     (6) choice and continuity of providers; 
 47.16     (7) continuity of care; 
 47.17     (8) outcomes of care; 
 47.18     (9) services offered by the plan, including range of 
 47.19  services, coverage for preventive and routine services, and 
 47.20  coverage for illness and hospitalization; 
 47.21     (10) availability of information; and 
 47.22     (11) paperwork. 
 47.23     (b) The health data institute shall appoint a consumer 
 47.24  advisory group which shall consist of 13 individuals, 
 47.25  representing enrollees from public and private health plan 
 47.26  companies and programs and two uninsured consumers, to advise 
 47.27  the health data institute on issues of concern to consumers.  
 47.28  The advisory group must have at least one member from each 
 47.29  regional coordinating board region of the state.  The advisory 
 47.30  group expires June 30, 1996. 
 47.31     Sec. 30.  Minnesota Statutes 1996, section 62M.02, 
 47.32  subdivision 21, is amended to read: 
 47.33     Subd. 21.  [UTILIZATION REVIEW ORGANIZATION.] "Utilization 
 47.34  review organization" means an entity including but not limited 
 47.35  to an insurance company licensed under chapter 60A to offer, 
 47.36  sell, or issue a policy of accident and sickness insurance as 
 48.1   defined in section 62A.01; a health service plan licensed under 
 48.2   chapter 62C; a health maintenance organization licensed under 
 48.3   chapter 62D; a community integrated service network or an 
 48.4   integrated service network licensed under chapter 62N; a 
 48.5   fraternal benefit society operating under chapter 64B; a joint 
 48.6   self-insurance employee health plan operating under chapter 62H; 
 48.7   a multiple employer welfare arrangement, as defined in section 3 
 48.8   of the Employee Retirement Income Security Act of 1974 (ERISA), 
 48.9   United States Code, title 29, section 1103, as amended; a third 
 48.10  party administrator licensed under section 60A.23, subdivision 
 48.11  8, which conducts utilization review and determines 
 48.12  certification of an admission, extension of stay, or other 
 48.13  health care services for a Minnesota resident; or any entity 
 48.14  performing utilization review that is affiliated with, under 
 48.15  contract with, or conducting utilization review on behalf of, a 
 48.16  business entity in this state. 
 48.17     Sec. 31.  Minnesota Statutes 1996, section 62N.01, 
 48.18  subdivision 1, is amended to read: 
 48.19     Subdivision 1.  [CITATION.] This chapter may be cited as 
 48.20  the "Minnesota community integrated service network act." 
 48.21     Sec. 32.  Minnesota Statutes 1996, section 62N.22, is 
 48.22  amended to read: 
 48.23     62N.22 [DISCLOSURE OF COMMISSIONS.] 
 48.24     Before selling any coverage or enrollment in a community 
 48.25  integrated service network or an integrated service network, a 
 48.26  person selling the coverage or enrollment shall disclose in 
 48.27  writing to the prospective purchaser the amount of any 
 48.28  commission or other compensation the person will receive as a 
 48.29  direct result of the sale.  The disclosure may be expressed in 
 48.30  dollars or as a percentage of the premium.  The amount disclosed 
 48.31  need not include any anticipated renewal commissions. 
 48.32     Sec. 33.  Minnesota Statutes 1996, section 62N.23, is 
 48.33  amended to read: 
 48.34     62N.23 [TECHNICAL ASSISTANCE; LOANS.] 
 48.35     (a) The commissioner shall provide technical assistance to 
 48.36  parties interested in establishing or operating a community 
 49.1   integrated service network or an integrated service network.  
 49.2   This shall be known as the community integrated service network 
 49.3   technical assistance program (ISNTAP) (CISNTAP). 
 49.4      The technical assistance program shall offer seminars on 
 49.5   the establishment and operation of community integrated service 
 49.6   networks or integrated service networks in all regions of 
 49.7   Minnesota.  The commissioner shall advertise these seminars in 
 49.8   local and regional newspapers, and attendance at these seminars 
 49.9   shall be free. 
 49.10     The commissioner shall write a guide to establishing and 
 49.11  operating a community integrated service network or an 
 49.12  integrated service network.  The guide must provide basic 
 49.13  instructions for parties wishing to establish a community 
 49.14  integrated service network or an integrated service network.  
 49.15  The guide must be provided free of charge to interested 
 49.16  parties.  The commissioner shall update this guide when 
 49.17  appropriate. 
 49.18     The commissioner shall establish a toll-free telephone line 
 49.19  that interested parties may call to obtain assistance in 
 49.20  establishing or operating a community integrated service network 
 49.21  or an integrated service network. 
 49.22     (b) The commissioner shall grant loans for organizational 
 49.23  and start-up expenses to entities forming community integrated 
 49.24  service networks or integrated service networks, or to networks 
 49.25  less than one year old, to the extent of any appropriation for 
 49.26  that purpose.  The commissioner shall allocate the available 
 49.27  funds among applicants based upon the following criteria, as 
 49.28  evaluated by the commissioner within the commissioner's 
 49.29  discretion: 
 49.30     (1) the applicant's need for the loan; 
 49.31     (2) the likelihood that the loan will foster the formation 
 49.32  or growth of a network; and 
 49.33     (3) the likelihood of repayment. 
 49.34     The commissioner shall determine any necessary application 
 49.35  deadlines and forms and is exempt from rulemaking in doing so.  
 49.36     Sec. 34.  Minnesota Statutes 1996, section 62N.25, 
 50.1   subdivision 5, is amended to read: 
 50.2      Subd. 5.  [BENEFITS.] Community integrated service networks 
 50.3   must offer the health maintenance organization benefit set, as 
 50.4   defined in chapter 62D, and other laws applicable to entities 
 50.5   regulated under chapter 62D, except that the community 
 50.6   integrated service network may impose a deductible, not to 
 50.7   exceed $1,000 per person per year, provided that out-of-pocket 
 50.8   expenses on covered services do not exceed $3,000 per person or 
 50.9   $5,000 per family per year.  The deductible must not apply to 
 50.10  preventive health services as described in Minnesota Rules, part 
 50.11  4685.0801, subpart 8.  Community networks and chemical 
 50.12  dependency facilities under contract with a community network 
 50.13  shall use the assessment criteria in Minnesota Rules, parts 
 50.14  9530.6600 to 9530.6660, when assessing enrollees for chemical 
 50.15  dependency treatment. 
 50.16     Sec. 35.  Minnesota Statutes 1996, section 62N.26, is 
 50.17  amended to read: 
 50.18     62N.26 [SHARED SERVICES COOPERATIVE.] 
 50.19     The commissioner of health shall establish, or assist in 
 50.20  establishing, a shared services cooperative organized under 
 50.21  chapter 308A to make available administrative and legal 
 50.22  services, technical assistance, provider contracting and billing 
 50.23  services, and other services to those community integrated 
 50.24  service networks and integrated service networks that choose to 
 50.25  participate in the cooperative.  The commissioner shall provide, 
 50.26  to the extent funds are appropriated, start-up loans sufficient 
 50.27  to maintain the shared services cooperative until its operations 
 50.28  can be maintained by fees and contributions.  The cooperative 
 50.29  must not be staffed, administered, or supervised by the 
 50.30  commissioner of health.  The cooperative shall make use of 
 50.31  existing resources that are already available in the community, 
 50.32  to the extent possible. 
 50.33     Sec. 36.  Minnesota Statutes 1996, section 62N.40, is 
 50.34  amended to read: 
 50.35     62N.40 [CHEMICAL DEPENDENCY SERVICES.] 
 50.36     Each community integrated service network and integrated 
 51.1   service network regulated under this chapter must ensure that 
 51.2   chemically dependent individuals have access to cost-effective 
 51.3   treatment options that address the specific needs of 
 51.4   individuals.  These include, but are not limited to, the need 
 51.5   for:  treatment that takes into account severity of illness and 
 51.6   comorbidities; provision of a continuum of care, including 
 51.7   treatment and rehabilitation programs licensed under Minnesota 
 51.8   Rules, parts 9530.4100 to 9530.4410 and 9530.5000 to 9530.6500; 
 51.9   the safety of the individual's domestic and community 
 51.10  environment; gender appropriate and culturally appropriate 
 51.11  programs; and access to appropriate social services. 
 51.12     Sec. 37.  Minnesota Statutes 1996, section 62Q.01, 
 51.13  subdivision 3, is amended to read: 
 51.14     Subd. 3.  [HEALTH PLAN.] "Health plan" means a health plan 
 51.15  as defined in section 62A.011; a policy, contract, or 
 51.16  certificate issued by a community integrated service network; or 
 51.17  an integrated service network. 
 51.18     Sec. 38.  Minnesota Statutes 1996, section 62Q.01, 
 51.19  subdivision 4, is amended to read: 
 51.20     Subd. 4.  [HEALTH PLAN COMPANY.] "Health plan company" 
 51.21  means: 
 51.22     (1) a health carrier as defined under section 62A.011, 
 51.23  subdivision 2; or 
 51.24     (2) an integrated service network as defined under section 
 51.25  62N.02, subdivision 8; or 
 51.26     (3) a community integrated service network as defined under 
 51.27  section 62N.02, subdivision 4a. 
 51.28     Sec. 39.  Minnesota Statutes 1996, section 62Q.01, 
 51.29  subdivision 5, is amended to read: 
 51.30     Subd. 5.  [MANAGED CARE ORGANIZATION.] "Managed care 
 51.31  organization" means:  (1) a health maintenance organization 
 51.32  operating under chapter 62D; (2) a community integrated service 
 51.33  network as defined under section 62N.02, subdivision 
 51.34  4a; or (3) an integrated service network as defined under 
 51.35  section 62N.02, subdivision 8; or (4) an insurance company 
 51.36  licensed under chapter 60A, nonprofit health service plan 
 52.1   corporation operating under chapter 62C, fraternal benefit 
 52.2   society operating under chapter 64B, or any other health plan 
 52.3   company, to the extent that it covers health care services 
 52.4   delivered to Minnesota residents through a preferred provider 
 52.5   organization or a network of selected providers.  
 52.6      Sec. 40.  Minnesota Statutes 1996, section 62Q.03, 
 52.7   subdivision 5a, is amended to read: 
 52.8      Subd. 5a.  [PUBLIC PROGRAMS.] (a) A separate risk 
 52.9   adjustment system must be developed for state-run public 
 52.10  programs, including medical assistance, general assistance 
 52.11  medical care, and MinnesotaCare.  The system must be developed 
 52.12  in accordance with the general risk adjustment methodologies 
 52.13  described in this section, must include factors in addition to 
 52.14  age and sex adjustment, and may include additional demographic 
 52.15  factors, different targeted conditions, and/or different payment 
 52.16  amounts for conditions.  The risk adjustment system for public 
 52.17  programs must attempt to reflect the special needs related to 
 52.18  poverty, cultural, or language barriers and other needs of the 
 52.19  public program population. 
 52.20     (b) The commissioners of health and human services shall 
 52.21  jointly convene a public programs risk adjustment work group 
 52.22  responsible for advising the commissioners in the design of the 
 52.23  public programs risk adjustment system.  The public programs 
 52.24  risk adjustment work group is governed by section 15.059 for 
 52.25  purposes of membership terms and removal of members and shall 
 52.26  terminate on June 30, 1999.  The work group shall meet at the 
 52.27  discretion of the commissioners of health and human services. 
 52.28  The commissioner of health shall work with the risk adjustment 
 52.29  association to ensure coordination between the risk adjustment 
 52.30  systems for the public and private sectors.  The commissioner of 
 52.31  human services shall seek any needed federal approvals necessary 
 52.32  for the inclusion of the medical assistance program in the 
 52.33  public programs risk adjustment system.  
 52.34     (c) The public programs risk adjustment work group must be 
 52.35  representative of the persons served by publicly paid health 
 52.36  programs and providers and health plans that meet their needs.  
 53.1   To the greatest extent possible, the appointing authorities 
 53.2   shall attempt to select representatives that have historically 
 53.3   served a significant number of persons in publicly paid health 
 53.4   programs or the uninsured.  Membership of the work group shall 
 53.5   be as follows: 
 53.6      (1) one provider member appointed by the Minnesota Medical 
 53.7   Association; 
 53.8      (2) two provider members appointed by the Minnesota 
 53.9   Hospital Association, at least one of whom must represent a 
 53.10  major disproportionate share hospital; 
 53.11     (3) five members appointed by the Minnesota Council of 
 53.12  HMOs, one of whom must represent an HMO with fewer than 50,000 
 53.13  enrollees located outside the metropolitan area and one of whom 
 53.14  must represent an HMO with at least 50 percent of total 
 53.15  membership enrolled through a public program; 
 53.16     (4) two representatives of counties appointed by the 
 53.17  Association of Minnesota Counties; 
 53.18     (5) three representatives of organizations representing the 
 53.19  interests of families, children, childless adults, and elderly 
 53.20  persons served by the various publicly paid health programs 
 53.21  appointed by the governor; 
 53.22     (6) two representatives of persons with mental health, 
 53.23  developmental or physical disabilities, chemical dependency, or 
 53.24  chronic illness appointed by the governor; and 
 53.25     (7) three public members appointed by the governor, at 
 53.26  least one of whom must represent a community health board.  The 
 53.27  risk adjustment association may appoint a representative, if a 
 53.28  representative is not otherwise appointed by an appointing 
 53.29  authority. 
 53.30     (d) The commissioners of health and human services, with 
 53.31  the advice of the public programs risk adjustment work group, 
 53.32  shall develop a work plan and time frame and shall coordinate 
 53.33  their efforts with the private sector risk adjustment 
 53.34  association's activities and other state initiatives related to 
 53.35  public program managed care reimbursement.  The commissioners of 
 53.36  health and human services shall report to the health care 
 54.1   commission and to the appropriate legislative committees on 
 54.2   January 15, 1996, and on January 15, 1997, on any policy or 
 54.3   legislative changes necessary to implement the public program 
 54.4   risk adjustment system. 
 54.5      Sec. 41.  Minnesota Statutes 1996, section 62Q.106, is 
 54.6   amended to read: 
 54.7      62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER.] 
 54.8      A complainant may at any time submit a complaint to the 
 54.9   appropriate commissioner to investigate.  After investigating a 
 54.10  complaint, or reviewing a company's decision, the appropriate 
 54.11  commissioner may order a remedy as authorized under section 
 54.12  62N.04, 62Q.30, or chapter 45, 60A, or 62D.  
 54.13     Sec. 42.  Minnesota Statutes 1996, section 62Q.19, 
 54.14  subdivision 1, is amended to read: 
 54.15     Subdivision 1.  [DESIGNATION.] The commissioner shall 
 54.16  designate essential community providers.  The criteria for 
 54.17  essential community provider designation shall be the following: 
 54.18     (1) a demonstrated ability to integrate applicable 
 54.19  supportive and stabilizing services with medical care for 
 54.20  uninsured persons and high-risk and special needs populations as 
 54.21  defined in section 62Q.07, subdivision 2, paragraph (e), 
 54.22  underserved, and other special needs populations; and 
 54.23     (2) a commitment to serve low-income and underserved 
 54.24  populations by meeting the following requirements: 
 54.25     (i) has nonprofit status in accordance with chapter 317A; 
 54.26     (ii) has tax exempt status in accordance with the Internal 
 54.27  Revenue Service Code, section 501(c)(3); 
 54.28     (iii) charges for services on a sliding fee schedule based 
 54.29  on current poverty income guidelines; and 
 54.30     (iv) does not restrict access or services because of a 
 54.31  client's financial limitation; 
 54.32     (3) status as a local government unit as defined in section 
 54.33  62D.02, subdivision 11, a hospital district created or 
 54.34  reorganized under sections 447.31 to 447.37, an Indian tribal 
 54.35  government, an Indian health service unit, or a community health 
 54.36  board as defined in chapter 145A; or 
 55.1      (4) a former state hospital that specializes in the 
 55.2   treatment of cerebral palsy, spina bifida, epilepsy, closed head 
 55.3   injuries, specialized orthopedic problems, and other disabling 
 55.4   conditions; or 
 55.5      (5) a rural hospital that has qualified for a sole 
 55.6   community hospital financial assistance grant in the past three 
 55.7   years under section 144.1484, subdivision 1.  For these rural 
 55.8   hospitals, the essential community provider designation applies 
 55.9   to all health services provided, including both inpatient and 
 55.10  outpatient services. 
 55.11     Prior to designation, the commissioner shall publish the 
 55.12  names of all applicants in the State Register.  The public shall 
 55.13  have 30 days from the date of publication to submit written 
 55.14  comments to the commissioner on the application.  No designation 
 55.15  shall be made by the commissioner until the 30-day period has 
 55.16  expired. 
 55.17     The commissioner may designate an eligible provider as an 
 55.18  essential community provider for all the services offered by 
 55.19  that provider or for specific services designated by the 
 55.20  commissioner. 
 55.21     For the purpose of this subdivision, supportive and 
 55.22  stabilizing services include at a minimum, transportation, child 
 55.23  care, cultural, and linguistic services where appropriate. 
 55.24     Sec. 43.  Minnesota Statutes 1996, section 62Q.33, 
 55.25  subdivision 2, is amended to read: 
 55.26     Subd. 2.  [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 
 55.27  of health, in consultation with the state community health 
 55.28  services advisory committee and the commissioner of human 
 55.29  services, and representatives of local health departments, 
 55.30  county government, a municipal government acting as a local 
 55.31  board of health, the Minnesota health care commission, area 
 55.32  Indian health services, health care providers, and citizens 
 55.33  concerned about public health, shall coordinate the process for 
 55.34  defining implementation and financing responsibilities of the 
 55.35  local government core public health functions.  The commissioner 
 55.36  shall submit recommendations and an initial and final report on 
 56.1   local government core public health functions according to the 
 56.2   timeline established in subdivision 5. 
 56.3      Sec. 44.  Minnesota Statutes 1996, section 62Q.45, 
 56.4   subdivision 2, is amended to read: 
 56.5      Subd. 2.  [DEFINITION.] For purposes of this section, 
 56.6   "managed care organization" means:  (1) a health maintenance 
 56.7   organization operating under chapter 62D; (2) a community 
 56.8   integrated service network as defined under section 62N.02, 
 56.9   subdivision 4a; or (3) an integrated service network as defined 
 56.10  under section 62N.02, subdivision 8; or (4) an insurance company 
 56.11  licensed under chapter 60A, nonprofit health service plan 
 56.12  corporation operating under chapter 62C, fraternal benefit 
 56.13  society operating under chapter 64B, or any other health plan 
 56.14  company, to the extent that it covers health care services 
 56.15  delivered to Minnesota residents through a preferred provider 
 56.16  organization or a network of selected providers.  
 56.17     Sec. 45.  [62Q.52] [REFERRALS FOR RESIDENTS OF HEALTH CARE 
 56.18  FACILITIES.] 
 56.19     If an enrollee is a resident of a health care facility 
 56.20  licensed under chapter 144A or a housing with services 
 56.21  establishment registered under chapter 144D, the enrollee's 
 56.22  primary care physician must refer the enrollee to that 
 56.23  facility's skilled nursing unit or that facility's appropriate 
 56.24  care setting, provided that the health plan company and the 
 56.25  provider can best meet the patient's needs in that setting, if 
 56.26  the following conditions are met: 
 56.27     (1) the facility agrees to be reimbursed at that health 
 56.28  plan company's contract rate negotiated with similar providers 
 56.29  for the same services and supplies; and 
 56.30     (2) the facility meets all guidelines established by the 
 56.31  health plan company related to quality of care, utilization, 
 56.32  referral authorization, risk assumption, use of health plan 
 56.33  company network, and other criteria applicable to providers 
 56.34  under contract for the same services and supplies. 
 56.35     Sec. 46.  [62Q.65] [ACCESS TO PROVIDER DISCOUNTS.] 
 56.36     Subdivision 1.  [REQUIREMENT.] A high deductible health 
 57.1   plan must, when used in connection with a medical savings 
 57.2   account, provide the enrollee access to any discounted provider 
 57.3   fees for services covered by the high deductible health plan, 
 57.4   regardless of whether the enrollee has satisfied the deductible 
 57.5   for the high deductible health plan. 
 57.6      Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
 57.7   following terms have the meanings given: 
 57.8      (1) "high deductible health plan" has the meaning given 
 57.9   under the Internal Revenue Code of 1986, section 220(c)(2); 
 57.10     (2) "medical savings account" has the meaning given under 
 57.11  the Internal Revenue Code of 1986, section 220(d)(1); and 
 57.12     (3) "discounted provider fees" means fees contained in a 
 57.13  provider agreement entered into by the issuer of the high 
 57.14  deductible health plan, or an affiliate of the issuer, for use 
 57.15  in connection with the high deductible health plan. 
 57.16     Sec. 47.  Minnesota Statutes 1996, section 136A.1355, is 
 57.17  amended to read: 
 57.18     136A.1355 [RURAL PHYSICIANS.] 
 57.19     Subdivision 1.  [CREATION OF ACCOUNT.] A rural physician 
 57.20  education account is established in the health care access 
 57.21  fund.  The higher education services office shall use money from 
 57.22  the account to establish a loan forgiveness program for 
 57.23  medical students residents agreeing to practice in designated 
 57.24  rural areas, as defined by the commissioner.  
 57.25     Subd. 2.  [ELIGIBILITY.] To be eligible to participate in 
 57.26  the program, a prospective physician must submit a letter of 
 57.27  interest to the higher education services office.  A student or 
 57.28  resident who is accepted must sign a contract to agree to serve 
 57.29  at least three of the first five years following residency in a 
 57.30  designated rural area. 
 57.31     Subd. 3.  [LOAN FORGIVENESS.] For fiscal years beginning on 
 57.32  and after July 1, 1995, the higher education services office may 
 57.33  accept up to four applicants who are fourth year medical 
 57.34  students, three 12 applicants who are medical residents, four 
 57.35  applicants who are pediatric residents, and four six applicants 
 57.36  who are family practice residents, and one applicant who is 
 58.1   an two applicants who are internal medicine resident residents, 
 58.2   per fiscal year for participation in the loan forgiveness 
 58.3   program.  If the higher education services office does not 
 58.4   receive enough applicants per fiscal year to fill the number of 
 58.5   residents in the specific areas of practice, the resident 
 58.6   applicants may be from any area of practice.  The eight 12 
 58.7   resident applicants may be in any year of training; however, 
 58.8   priority must be given to the following categories of residents 
 58.9   in descending order:  third year residents, second year 
 58.10  residents, and first year residents.  Applicants are responsible 
 58.11  for securing their own loans.  Applicants chosen to participate 
 58.12  in the loan forgiveness program may designate for each year of 
 58.13  medical school, up to a maximum of four years, an agreed amount, 
 58.14  not to exceed $10,000, as a qualified loan.  For each year that 
 58.15  a participant serves as a physician in a designated rural area, 
 58.16  up to a maximum of four years, the higher education services 
 58.17  office shall annually pay an amount equal to one year of 
 58.18  qualified loans.  Participants who move their practice from one 
 58.19  designated rural area to another remain eligible for loan 
 58.20  repayment.  In addition, if a resident participating in the loan 
 58.21  forgiveness program serves at least four weeks during a year of 
 58.22  residency substituting for a rural physician to temporarily 
 58.23  relieve the rural physician of rural practice commitments to 
 58.24  enable the rural physician to take a vacation, engage in 
 58.25  activities outside the practice area, or otherwise be relieved 
 58.26  of rural practice commitments, the participating resident may 
 58.27  designate up to an additional $2,000, above the $10,000 maximum, 
 58.28  for each year of residency during which the resident substitutes 
 58.29  for a rural physician for four or more weeks. 
 58.30     Subd. 4.  [PENALTY FOR NONFULFILLMENT.] If a participant 
 58.31  does not fulfill the required three-year minimum commitment of 
 58.32  service in a designated rural area, the higher education 
 58.33  services office shall collect from the participant the amount 
 58.34  paid by the commissioner under the loan forgiveness program.  
 58.35  The higher education services office shall deposit the money 
 58.36  collected in the rural physician education account established 
 59.1   in subdivision 1.  The commissioner shall allow waivers of all 
 59.2   or part of the money owed the commissioner if emergency 
 59.3   circumstances prevented fulfillment of the three-year service 
 59.4   commitment.  
 59.5      Subd. 5.  [LOAN FORGIVENESS; UNDERSERVED URBAN 
 59.6   COMMUNITIES.] For fiscal years beginning on and after July 1, 
 59.7   1995, the higher education services office may accept up to four 
 59.8   applicants who are either fourth year medical students, or 
 59.9   residents in family practice, pediatrics, or internal medicine 
 59.10  per fiscal year for participation in the urban primary care 
 59.11  physician loan forgiveness program.  The resident applicants may 
 59.12  be in any year of residency training; however, priority will be 
 59.13  given to the following categories of residents in descending 
 59.14  order:  third year residents, second year residents, and first 
 59.15  year residents.  If the higher education services office does 
 59.16  not receive enough qualified applicants per fiscal year to fill 
 59.17  the number of slots for urban underserved communities, the slots 
 59.18  may be allocated to students or residents who have applied for 
 59.19  the rural physician loan forgiveness program in subdivision 1.  
 59.20  Applicants are responsible for securing their own loans.  For 
 59.21  purposes of this provision, "qualifying educational loans" are 
 59.22  government and commercial loans for actual costs paid for 
 59.23  tuition, reasonable education expenses, and reasonable living 
 59.24  expenses related to the graduate or undergraduate education of a 
 59.25  health care professional.  Applicants chosen to participate in 
 59.26  the loan forgiveness program may designate for each year of 
 59.27  medical school, up to a maximum of four years, an agreed amount, 
 59.28  not to exceed $10,000, as a qualified loan.  For each year that 
 59.29  a participant serves as a physician in a designated underserved 
 59.30  urban area, up to a maximum of four years, the higher education 
 59.31  services office shall annually pay an amount equal to one year 
 59.32  of qualified loans.  Participants who move their practice from 
 59.33  one designated underserved urban community to another remain 
 59.34  eligible for loan repayment. 
 59.35     Sec. 48.  Minnesota Statutes 1996, section 144.147, 
 59.36  subdivision 1, is amended to read: 
 60.1      Subdivision 1.  [DEFINITION.] "Eligible rural hospital" 
 60.2   means any nonfederal, general acute care hospital that: 
 60.3      (1) is either located in a rural area, as defined in the 
 60.4   federal Medicare regulations, Code of Federal Regulations, title 
 60.5   42, section 405.1041, or located in a community with a 
 60.6   population of less than 5,000, according to United States Census 
 60.7   Bureau statistics, outside the seven-county metropolitan area; 
 60.8      (2) has 100 50 or fewer beds; and 
 60.9      (3) is not for profit; and 
 60.10     (4) has not been awarded a grant under the federal rural 
 60.11  health transition grant program, which would be received 
 60.12  concurrently with any portion of the grant period for this 
 60.13  program. 
 60.14     Sec. 49.  Minnesota Statutes 1996, section 144.147, 
 60.15  subdivision 2, is amended to read: 
 60.16     Subd. 2.  [GRANTS AUTHORIZED.] The commissioner shall 
 60.17  establish a program of grants to assist eligible rural 
 60.18  hospitals.  The commissioner shall award grants to hospitals and 
 60.19  communities for the purposes set forth in paragraphs (a) and (b).
 60.20     (a) Grants may be used by hospitals and their communities 
 60.21  to develop strategic plans for preserving or enhancing access to 
 60.22  health services.  At a minimum, a strategic plan must consist of:
 60.23     (1) a needs assessment to determine what health services 
 60.24  are needed and desired by the community.  The assessment must 
 60.25  include interviews with or surveys of area health professionals, 
 60.26  local community leaders, and public hearings; 
 60.27     (2) an assessment of the feasibility of providing needed 
 60.28  health services that identifies priorities and timeliness for 
 60.29  potential changes; and 
 60.30     (3) an implementation plan.  
 60.31     The strategic plan must be developed by a committee that 
 60.32  includes representatives from the hospital, local public health 
 60.33  agencies, other health providers, and consumers from the 
 60.34  community.  
 60.35     (b) The grants may also be used by eligible rural hospitals 
 60.36  that have developed strategic plans to implement transition 
 61.1   projects to modify the type and extent of services provided, in 
 61.2   order to reflect the needs of that plan.  Grants may be used by 
 61.3   hospitals under this paragraph to develop hospital-based 
 61.4   physician practices that integrate hospital and existing medical 
 61.5   practice facilities that agree to transfer their practices, 
 61.6   equipment, staffing, and administration to the hospital.  The 
 61.7   grants may also be used by the hospital to establish a health 
 61.8   provider cooperative, a telemedicine system, or a rural health 
 61.9   care system.  Not more than one-third of any grant shall be used 
 61.10  to offset losses incurred by physicians agreeing to transfer 
 61.11  their practices to hospitals.  
 61.12     Sec. 50.  Minnesota Statutes 1996, section 144.147, 
 61.13  subdivision 3, is amended to read: 
 61.14     Subd. 3.  [CONSIDERATION OF GRANTS.] In determining which 
 61.15  hospitals will receive grants under this section, the 
 61.16  commissioner shall take into account:  
 61.17     (1) improving community access to hospital or health 
 61.18  services; 
 61.19     (2) changes in service populations; 
 61.20     (3) demand for ambulatory and emergency services; 
 61.21     (4) the extent that the health needs of the community are 
 61.22  not currently being met by other providers in the service area; 
 61.23     (5) the need to recruit and retain health professionals; 
 61.24     (6) the involvement and extent of community support of the 
 61.25  community and local health care providers; and 
 61.26     (7) the coordination with local community organizations, 
 61.27  such as community development and public health agencies; and 
 61.28     (8) the financial condition of the hospital. 
 61.29     Sec. 51.  Minnesota Statutes 1996, section 144.147, 
 61.30  subdivision 4, is amended to read: 
 61.31     Subd. 4.  [ALLOCATION OF GRANTS.] (a) Eligible hospitals 
 61.32  must apply to the commissioner no later than September 1 of each 
 61.33  fiscal year for grants awarded for that fiscal year.  A grant 
 61.34  may be awarded upon signing of a grant contract. 
 61.35     (b) The commissioner must make a final decision on the 
 61.36  funding of each application within 60 days of the deadline for 
 62.1   receiving applications. 
 62.2      (c) Each relevant community health board has 30 days in 
 62.3   which to review and comment to the commissioner on grant 
 62.4   applications from hospitals in their community health service 
 62.5   area. 
 62.6      (d) In determining which hospitals will receive grants 
 62.7   under this section, the commissioner shall consider the 
 62.8   following factors: 
 62.9      (1) Description of the problem, description of the project, 
 62.10  and the likelihood of successful outcome of the project.  The 
 62.11  applicant must explain clearly the nature of the health services 
 62.12  problems in their service area, how the grant funds will be 
 62.13  used, what will be accomplished, and the results expected.  The 
 62.14  applicant should describe achievable objectives, a timetable, 
 62.15  and roles and capabilities of responsible individuals and 
 62.16  organizations. 
 62.17     (2) The extent of community support for the hospital and 
 62.18  this proposed project.  The applicant should demonstrate support 
 62.19  for the hospital and for the proposed project from other local 
 62.20  health service providers and from local community and government 
 62.21  leaders.  Evidence of such support may include past commitments 
 62.22  of financial support from local individuals, organizations, or 
 62.23  government entities; and commitment of financial support, 
 62.24  in-kind services or cash, for this project. 
 62.25     (3) The comments, if any, resulting from a review of the 
 62.26  application by the community health board in whose community 
 62.27  health service area the hospital is located. 
 62.28     (e) In evaluating applications, the commissioner shall 
 62.29  score each application on a 100 point scale, assigning the 
 62.30  maximum of 70 points for an applicant's understanding of the 
 62.31  problem, description of the project, and likelihood of 
 62.32  successful outcome of the project; and a maximum of 30 points 
 62.33  for the extent of community support for the hospital and this 
 62.34  project.  The commissioner may also take into account other 
 62.35  relevant factors. 
 62.36     (f) A grant to a hospital, including hospitals that submit 
 63.1   applications as consortia, may not exceed $37,500 $50,000 a year 
 63.2   and may not exceed a term of two years.  Prior to the receipt of 
 63.3   any grant, the hospital must certify to the commissioner that at 
 63.4   least one-half of the amount, which may include in-kind 
 63.5   services, is available for the same purposes from nonstate 
 63.6   sources.  A hospital receiving a grant under this section may 
 63.7   use the grant for any expenses incurred in the development of 
 63.8   strategic plans or the implementation of transition projects 
 63.9   with respect to which the grant is made.  Project grants may not 
 63.10  be used to retire debt incurred with respect to any capital 
 63.11  expenditure made prior to the date on which the project is 
 63.12  initiated. 
 63.13     (g) The commissioner may adopt rules to implement this 
 63.14  section. 
 63.15     Sec. 52.  [144.1475] [RURAL HOSPITAL DEMONSTRATION 
 63.16  PROJECT.] 
 63.17     Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
 63.18  health, for the biennium ending June 30, 1999, shall establish 
 63.19  at least three demonstration projects per fiscal year to assist 
 63.20  rural hospitals in the planning and implementation process to 
 63.21  either consolidate or cooperate with another existing hospital 
 63.22  in its service area to provide better quality health care to its 
 63.23  community.  A demonstration project must include at least two 
 63.24  eligible hospitals.  For purposes of this section, an "eligible 
 63.25  hospital" means a hospital that:  
 63.26     (1) is located outside the seven-county metropolitan area; 
 63.27     (2) has 50 or fewer licensed beds; and 
 63.28     (3) is located within a 25-mile radius of another hospital. 
 63.29     At least one of the eligible hospitals in a demonstration 
 63.30  project must have had a negative operating margin during one of 
 63.31  the two years prior to application.  
 63.32     Subd. 2.  [APPLICATION.] (a) An eligible hospital seeking 
 63.33  to be a participant in a demonstration project must submit an 
 63.34  application to the commissioner of health detailing the 
 63.35  hospital's efforts to consolidate health care delivery in its 
 63.36  service area, cooperate with another hospital in the delivery of 
 64.1   health care, or both consolidate and cooperate.  Applications 
 64.2   must be submitted by October 15 of each fiscal year for grants 
 64.3   awarded for that fiscal year. 
 64.4      (b) Applications must:  
 64.5      (1) describe the problem that the proposed consolidation or 
 64.6   cooperation will address, the consolidation or cooperation 
 64.7   project, how the grant funds will be used, what will be 
 64.8   accomplished, and the results expected; 
 64.9      (2) describe achievable objectives, a timetable, and the 
 64.10  roles and capabilities of responsible individuals and 
 64.11  organizations; 
 64.12     (3) include written commitments from the applicant hospital 
 64.13  and at least one other hospital that will participate in the 
 64.14  consolidation or cooperation demonstration project, that specify 
 64.15  the activities the organization will undertake during the 
 64.16  project, the resources the organization will contribute to the 
 64.17  demonstration project, and the expected role and nature of the 
 64.18  organization's involvement in proposed consolidation or 
 64.19  cooperation activities; and 
 64.20     (4) provide evidence of support for the proposed project 
 64.21  from other local health service providers and from local 
 64.22  community and government leaders. 
 64.23     Subd. 3.  [GRANTS.] The commissioner of health shall 
 64.24  allocate a grant of up to $100,000 to the highest scoring 
 64.25  applicants each year until available funding is expended.  
 64.26  Grants may be used by eligible hospitals to: 
 64.27     (1) conduct consolidation or cooperation negotiations; 
 64.28     (2) develop consolidation or cooperation plans, including 
 64.29  financial plans and architectural designs; 
 64.30     (3) seek community input and conduct community education on 
 64.31  proposed or planned consolidations or cooperative activities; 
 64.32  and 
 64.33     (4) implement consolidation or cooperation plans. 
 64.34     Subd. 4.  [CONSIDERATION OF GRANTS.] In evaluating 
 64.35  applications, the commissioner shall score each application on a 
 64.36  100 point scale, assigning:  a maximum of 40 points for an 
 65.1   applicant's understanding of the problem, description of the 
 65.2   project, and likelihood of successful outcome of the project; a 
 65.3   maximum of 30 points for explicit and unequivocal written 
 65.4   commitments from organizations participating in the project; a 
 65.5   maximum of 20 points for matching funds or in-kind services 
 65.6   committed by the applicant or others to the project; and a 
 65.7   maximum of ten points for the extent of community support for 
 65.8   the project.  The commissioner shall consider the comments, if 
 65.9   any, resulting from a review of the application by the community 
 65.10  health board in whose community health service area the 
 65.11  applicant is located.  The commissioner may also take into 
 65.12  account other relevant factors. 
 65.13     Subd. 5.  [EVALUATION.] The commissioner of health shall 
 65.14  evaluate the overall effectiveness of the demonstration projects 
 65.15  and report to the legislature by September 1, 2000.  The 
 65.16  commissioner may collect, from the hospitals receiving grants, 
 65.17  any information necessary to evaluate the demonstration project. 
 65.18     Sec. 53.  [144.148] [RURAL HOSPITAL CAPITAL IMPROVEMENT 
 65.19  GRANT AND LOAN PROGRAM.] 
 65.20     Subdivision 1.  [DEFINITION.] (a) For purposes of this 
 65.21  section, the following definitions apply. 
 65.22     (b) "Eligible rural hospital" means a hospital that: 
 65.23     (1) is located outside the seven-county metropolitan area; 
 65.24     (2) has 50 or fewer licensed hospital beds with a net 
 65.25  hospital operating margin not greater than two percent in the 
 65.26  two fiscal years prior to application; and 
 65.27     (3) is 25 miles or more from another hospital. 
 65.28     (c) "Eligible project" means a modernization project to 
 65.29  update, remodel, or replace aging hospital facilities and 
 65.30  equipment necessary to maintain the operations of a hospital. 
 65.31     Subd. 2.  [PROGRAM.] The commissioner of health shall award 
 65.32  rural hospital capital improvement grants or loans to eligible 
 65.33  rural hospitals.  A grant or loan shall not exceed $1,500,000 
 65.34  per hospital.  Grants or loans shall be interest free.  An 
 65.35  eligible rural hospital may apply the funds retroactively to 
 65.36  capital improvements made during the two fiscal years preceding 
 66.1   the fiscal year in which the grant or loan was received, 
 66.2   provided the hospital met the eligibility criteria during that 
 66.3   time period.  
 66.4      Subd. 3.  [APPLICATIONS.] Eligible hospitals seeking a 
 66.5   grant or loan shall apply to the commissioner.  Applications 
 66.6   must include a description of the problem that the proposed 
 66.7   project will address, a description of the project including 
 66.8   construction and remodeling drawings or specifications, sources 
 66.9   of funds for the project, uses of funds for the project, the 
 66.10  results expected, and a plan to maintain or operate any facility 
 66.11  or equipment included in the project.  The applicant must 
 66.12  describe achievable objectives, a timetable, and roles and 
 66.13  capabilities of responsible individuals and organization.  
 66.14  Applicants must submit to the commissioner evidence that 
 66.15  competitive bidding was used to select contractors for the 
 66.16  project.  
 66.17     Subd. 4.  [CONSIDERATION OF APPLICATIONS.] The commissioner 
 66.18  shall review each application to determine whether or not the 
 66.19  hospital's application is complete and whether the hospital and 
 66.20  the project are eligible for a grant or loan.  In evaluating 
 66.21  applications, the commissioner shall score each application on a 
 66.22  100 point scale, assigning:  a maximum of 40 points for an 
 66.23  applicant's clarity and thoroughness in describing the problem 
 66.24  and the project; a maximum of 40 points for the extent to which 
 66.25  the applicant has demonstrated that it has made adequate 
 66.26  provisions to assure proper and efficient operation of the 
 66.27  facility once the project is completed; and a maximum of 20 
 66.28  points for the extent to which the proposed project is 
 66.29  consistent with the hospital's capital improvement plan or 
 66.30  strategic plan.  The commissioner may also take into account 
 66.31  other relevant factors.  During application review, the 
 66.32  commissioner may request additional information about a proposed 
 66.33  project, including information on project cost.  Failure to 
 66.34  provide the information requested disqualifies a loan applicant. 
 66.35     Subd. 5.  [PROGRAM OVERSIGHT.] The commissioner of health 
 66.36  shall review audited financial information of the hospital to 
 67.1   assess eligibility.  The commissioner shall determine the amount 
 67.2   of a grant or loan to be given to an eligible rural hospital 
 67.3   based on the relative score of each eligible hospital's 
 67.4   application and the funds available to the commissioner.  The 
 67.5   grant or loan shall be used to update, remodel, or replace aging 
 67.6   facilities and equipment necessary to maintain the operations of 
 67.7   the hospital.  
 67.8      Subd. 6.  [LOAN PAYMENT.] Loans shall be repaid as provided 
 67.9   in this subdivision over a period of 15 years.  In those years 
 67.10  when an eligible rural hospital experiences a positive net 
 67.11  operating margin in excess of two percent, the eligible rural 
 67.12  hospital shall pay to the state one-half of the excess above two 
 67.13  percent, up to the yearly payment amount based upon a loan 
 67.14  period of 15 years.  If the amount paid back in any year is less 
 67.15  than the yearly payment amount, or if no payment is required 
 67.16  because the eligible rural hospital does not experience a 
 67.17  positive net operating margin in excess of two percent, the 
 67.18  amount unpaid for that year shall be forgiven by the state 
 67.19  without any financial penalty.  As a condition of receiving an 
 67.20  award through this program, eligible hospitals must agree to any 
 67.21  and all collection activities the commissioner finds necessary 
 67.22  to collect loan payments in those years a payment is due. 
 67.23     Subd. 7.  [ACCOUNTING TREATMENT.] The commissioner of 
 67.24  finance shall record as grants in the state accounting system 
 67.25  funds obligated by this section.  Loan payments received under 
 67.26  this section shall be deposited in the health care access fund. 
 67.27     Subd. 8.  [EXPIRATION.] This section expires June 30, 1999. 
 67.28     Sec. 54.  Minnesota Statutes 1996, section 144.1484, 
 67.29  subdivision 1, is amended to read: 
 67.30     Subdivision 1.  [SOLE COMMUNITY HOSPITAL FINANCIAL 
 67.31  ASSISTANCE GRANTS.] The commissioner of health shall award 
 67.32  financial assistance grants to rural hospitals in isolated areas 
 67.33  of the state.  To qualify for a grant, a hospital must:  (1) be 
 67.34  eligible to be classified as a sole community hospital according 
 67.35  to the criteria in Code of Federal Regulations, title 42, 
 67.36  section 412.92 or be located in a community with a population of 
 68.1   less than 5,000 and located more than 25 miles from a like 
 68.2   hospital currently providing acute short-term services; (2) have 
 68.3   experienced net operating income losses in the two of the 
 68.4   previous three most recent consecutive hospital fiscal years for 
 68.5   which audited financial information is available; (3) consist of 
 68.6   40 or fewer licensed beds; and (4) demonstrate to the 
 68.7   commissioner that it has obtained local support for the hospital 
 68.8   and that any state support awarded under this program will not 
 68.9   be used to supplant local support for the hospital.  The 
 68.10  commissioner shall review audited financial statements of the 
 68.11  hospital to assess the extent of local support.  Evidence of 
 68.12  local support may include bonds issued by a local government 
 68.13  entity such as a city, county, or hospital district for the 
 68.14  purpose of financing hospital projects; and loans, grants, or 
 68.15  donations to the hospital from local government entities, 
 68.16  private organizations, or individuals.  The commissioner shall 
 68.17  determine the amount of the award to be given to each eligible 
 68.18  hospital based on the hospital's operating loss margin (total 
 68.19  operating losses as a percentage of total operating revenue) for 
 68.20  the two of the previous three most recent consecutive fiscal 
 68.21  years for which audited financial information is available and 
 68.22  the total amount of funding available.  For purposes of 
 68.23  calculating a hospital's operating loss margin, total operating 
 68.24  revenue does not include grant funding provided under this 
 68.25  subdivision.  One hundred percent of the available funds will be 
 68.26  disbursed proportionately based on the operating loss margins of 
 68.27  the eligible hospitals. 
 68.28     Sec. 55.  Minnesota Statutes 1996, section 256.045, 
 68.29  subdivision 3a, is amended to read: 
 68.30     Subd. 3a.  [PREPAID HEALTH PLAN APPEALS.] (a) All prepaid 
 68.31  health plans under contract to the commissioner under chapter 
 68.32  256B or 256D must provide for a complaint system according to 
 68.33  section 62D.11.  When a prepaid health plan denies, reduces, or 
 68.34  terminates a health service or denies a request to authorize a 
 68.35  previously authorized health service, the prepaid health plan 
 68.36  must notify the recipient of the right to file a complaint or an 
 69.1   appeal.  The notice must include the name and telephone number 
 69.2   of the ombudsman and notice of the recipient's right to request 
 69.3   a hearing under paragraph (b).  When a complaint is filed, the 
 69.4   prepaid health plan must notify the ombudsman within three 
 69.5   working days.  Recipients may request the assistance of the 
 69.6   ombudsman in the complaint system process.  The prepaid health 
 69.7   plan must issue a written resolution of the complaint to the 
 69.8   recipient within 30 days after the complaint is filed with the 
 69.9   prepaid health plan.  A recipient is not required to exhaust the 
 69.10  complaint system procedures in order to request a hearing under 
 69.11  paragraph (b). 
 69.12     (b) Recipients enrolled in a prepaid health plan under 
 69.13  chapter 256B or 256D may contest a prepaid health plan's denial, 
 69.14  reduction, or termination of health services, a prepaid health 
 69.15  plan's denial of a request to authorize a previously authorized 
 69.16  health service, or the prepaid health plan's written resolution 
 69.17  of a complaint by submitting a written request for a hearing 
 69.18  according to subdivision 3.  A state human services referee 
 69.19  shall conduct a hearing on the matter and shall recommend an 
 69.20  order to the commissioner of human services.  The commissioner 
 69.21  need not grant a hearing if the sole issue raised by a recipient 
 69.22  is the commissioner's authority to require mandatory enrollment 
 69.23  in a prepaid health plan in a county where prepaid health plans 
 69.24  are under contract with the commissioner.  The state human 
 69.25  services referee may order a second medical opinion from the 
 69.26  prepaid health plan or may order a second medical opinion from a 
 69.27  nonprepaid health plan provider at the expense of the prepaid 
 69.28  health plan.  Recipients may request the assistance of the 
 69.29  ombudsman in the appeal process. 
 69.30     (c) In the written request for a hearing to appeal from a 
 69.31  prepaid health plan's denial, reduction, or termination of a 
 69.32  health service, a prepaid health plan's denial of a request to 
 69.33  authorize a previously authorized service, or the prepaid health 
 69.34  plan's written resolution to a complaint, a recipient may 
 69.35  request an expedited hearing.  If an expedited appeal is 
 69.36  warranted, the state human services referee shall hear the 
 70.1   appeal and render a decision within a time commensurate with the 
 70.2   level of urgency involved, based on the individual circumstances 
 70.3   of the case. 
 70.4      Sec. 56.  Minnesota Statutes 1996, section 256.9363, 
 70.5   subdivision 1, is amended to read: 
 70.6      Subdivision 1.  [SELECTION OF VENDORS.] In order to contain 
 70.7   costs, the commissioner of human services shall select vendors 
 70.8   of medical care who can provide the most economical care 
 70.9   consistent with high medical standards and shall, where 
 70.10  possible, contract with organizations on a prepaid capitation 
 70.11  basis to provide these services.  The commissioner shall 
 70.12  consider proposals by counties and vendors for managed care 
 70.13  plans which may include:  prepaid capitation programs, 
 70.14  competitive bidding programs, or other vendor payment mechanisms 
 70.15  designed to provide services in an economical manner or to 
 70.16  control utilization, with safeguards to ensure that necessary 
 70.17  services are provided.  Managed care plans may include 
 70.18  integrated service networks as defined in section 62N.02. 
 70.19     Sec. 57.  Minnesota Statutes 1996, section 256.9657, 
 70.20  subdivision 3, is amended to read: 
 70.21     Subd. 3.  [HEALTH MAINTENANCE ORGANIZATION; COMMUNITY 
 70.22  INTEGRATED SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 
 70.23  1992, each health maintenance organization with a certificate of 
 70.24  authority issued by the commissioner of health under chapter 62D 
 70.25  and each integrated service network and community integrated 
 70.26  service network licensed by the commissioner under chapter 62N 
 70.27  shall pay to the commissioner of human services a surcharge 
 70.28  equal to six-tenths of one percent of the total premium revenues 
 70.29  of the health maintenance organization, integrated service 
 70.30  network, or community integrated service network as reported to 
 70.31  the commissioner of health according to the schedule in 
 70.32  subdivision 4.  
 70.33     (b) For purposes of this subdivision, total premium revenue 
 70.34  means: 
 70.35     (1) premium revenue recognized on a prepaid basis from 
 70.36  individuals and groups for provision of a specified range of 
 71.1   health services over a defined period of time which is normally 
 71.2   one month, excluding premiums paid to a health maintenance 
 71.3   organization, integrated service network, or community 
 71.4   integrated service network from the Federal Employees Health 
 71.5   Benefit Program; 
 71.6      (2) premiums from Medicare wrap-around subscribers for 
 71.7   health benefits which supplement Medicare coverage; 
 71.8      (3) Medicare revenue, as a result of an arrangement between 
 71.9   a health maintenance organization, an integrated service 
 71.10  network, or a community integrated service network and the 
 71.11  health care financing administration of the federal Department 
 71.12  of Health and Human Services, for services to a Medicare 
 71.13  beneficiary; and 
 71.14     (4) medical assistance revenue, as a result of an 
 71.15  arrangement between a health maintenance organization, 
 71.16  integrated service network, or community integrated service 
 71.17  network and a Medicaid state agency, for services to a medical 
 71.18  assistance beneficiary. 
 71.19     If advance payments are made under clause (1) or (2) to the 
 71.20  health maintenance organization, integrated service network, or 
 71.21  community integrated service network for more than one reporting 
 71.22  period, the portion of the payment that has not yet been earned 
 71.23  must be treated as a liability. 
 71.24     (c) When a health maintenance organization or an integrated 
 71.25  service network or community integrated service network merges 
 71.26  or consolidates with or is acquired by another health 
 71.27  maintenance organization, integrated service network, or 
 71.28  community integrated service network, the surviving corporation 
 71.29  or the new corporation shall be responsible for the annual 
 71.30  surcharge originally imposed on each of the entities or 
 71.31  corporations subject to the merger, consolidation, or 
 71.32  acquisition, regardless of whether one of the entities or 
 71.33  corporations does not retain a certificate of authority under 
 71.34  chapter 62D or a license under chapter 62N. 
 71.35     (d) Effective July 1 of each year, the surviving 
 71.36  corporation's or the new corporation's surcharge shall be based 
 72.1   on the revenues earned in the second previous calendar year by 
 72.2   all of the entities or corporations subject to the merger, 
 72.3   consolidation, or acquisition regardless of whether one of the 
 72.4   entities or corporations does not retain a certificate of 
 72.5   authority under chapter 62D or a license under chapter 62N until 
 72.6   the total premium revenues of the surviving corporation include 
 72.7   the total premium revenues of all the merged entities as 
 72.8   reported to the commissioner of health. 
 72.9      (e) When a health maintenance organization, integrated 
 72.10  service network, or community integrated service network, which 
 72.11  is subject to liability for the surcharge under this chapter, 
 72.12  transfers, assigns, sells, leases, or disposes of all or 
 72.13  substantially all of its property or assets, liability for the 
 72.14  surcharge imposed by this chapter is imposed on the transferee, 
 72.15  assignee, or buyer of the health maintenance organization, 
 72.16  integrated service network, or community integrated service 
 72.17  network. 
 72.18     (f) In the event a health maintenance organization, 
 72.19  integrated service network, or community integrated service 
 72.20  network converts its licensure to a different type of entity 
 72.21  subject to liability for the surcharge under this chapter, but 
 72.22  survives in the same or substantially similar form, the 
 72.23  surviving entity remains liable for the surcharge regardless of 
 72.24  whether one of the entities or corporations does not retain a 
 72.25  certificate of authority under chapter 62D or a license under 
 72.26  chapter 62N. 
 72.27     (g) The surcharge assessed to a health maintenance 
 72.28  organization, integrated service network, or community 
 72.29  integrated service network ends when the entity ceases providing 
 72.30  services for premiums and the cessation is not connected with a 
 72.31  merger, consolidation, acquisition, or conversion. 
 72.32     Sec. 58.  [MEIP STUDY.] 
 72.33     The commissioner of employee relations shall study the 
 72.34  current Minnesota employees insurance program (MEIP) and report 
 72.35  to the legislature by January 15, 1998, on recommendations on 
 72.36  whether this program provides greater accessibility to small 
 73.1   employers for purchasing health insurance and on the continued 
 73.2   viability of the program, including whether the program could be 
 73.3   modified in terms of underwriting, marketing, and advertising to 
 73.4   create a program that would provide a cost incentive for small 
 73.5   employers to purchase health coverage through this program. 
 73.6      Sec. 59.  [MCHA STANDARDS STUDY.] 
 73.7      The commissioner of commerce, in consultation with the 
 73.8   commissioner of health, shall study and make recommendations 
 73.9   regarding the feasibility of establishing a comprehensive set of 
 73.10  eligibility standards for coverage under the Minnesota 
 73.11  comprehensive health association and on guaranteed issuance in 
 73.12  the individual market for individuals who do not meet the 
 73.13  eligibility standards for coverage under the Minnesota 
 73.14  comprehensive health association.  The recommendations shall be 
 73.15  reported to the legislature by January 15, 1998. 
 73.16     Sec. 60.  [PRESCRIPTION DRUG INSURANCE PROGRAM.] 
 73.17     The commissioner of commerce shall study the feasibility of 
 73.18  providing an insurance program to provide prescription drugs to 
 73.19  Minnesotans who are 65 and older.  The program shall be 
 73.20  administered by the Minnesota comprehensive health association, 
 73.21  but shall be separate from the health coverage programs operated 
 73.22  by the association under Minnesota Statutes, chapter 62E.  In 
 73.23  studying the feasibility of the program, the commissioner shall 
 73.24  incorporate, to the extent feasible, the administrative 
 73.25  procedures and health care delivery methods used by the 
 73.26  association under Minnesota Statutes, chapter 62E.  The 
 73.27  commissioner shall study the program based upon independent 
 73.28  actuarial analysis, and shall present recommendations to the 
 73.29  legislature by December 15, 1997. 
 73.30     Sec. 61.  [PUBLIC PROGRAMS RATE SETTING AND RISK 
 73.31  ADJUSTMENT.] 
 73.32     The commissioners of health and of human services shall 
 73.33  submit a coordinated report on rate setting and risk adjustment 
 73.34  methods to the legislature by February 1, 1998.  An interim 
 73.35  report shall be provided to the legislative commission on health 
 73.36  care access to facilitate a public hearing and testimony prior 
 74.1   to the 1998 legislative session.  Changes in the rate setting 
 74.2   and risk adjustment methods shall not be implemented until after 
 74.3   the 1998 legislative session. 
 74.4      Sec. 62.  [REVISOR INSTRUCTIONS.] 
 74.5      The revisor of statutes shall delete references to 
 74.6   "integrated service network," but not "community integrated 
 74.7   service network," wherever it appears in Minnesota Statutes and 
 74.8   make conforming changes as necessary. 
 74.9      Sec. 63.  [REPEALER.] 
 74.10     (a) Minnesota Statutes 1996, sections 62E.11, subdivision 
 74.11  12; 62J.03, subdivision 3; 62J.04, subdivisions 4 and 7; 62J.05; 
 74.12  62J.051; 62J.09, subdivision 3a; 62J.37; 62N.01, subdivision 2; 
 74.13  62N.02, subdivisions 2, 3, 4b, 4c, 6, 7, 8, 9, 10, and 12; 
 74.14  62N.03; 62N.04; 62N.05; 62N.06; 62N.065; 62N.071; 62N.072; 
 74.15  62N.073; 62N.074; 62N.076; 62N.077; 62N.078; 62N.10; 62N.11; 
 74.16  62N.12; 62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 62N.24; 62N.38; 
 74.17  62Q.165, subdivision 3; 62Q.25; 62Q.29; 62Q.41 and 147.01, 
 74.18  subdivision 6, are repealed. 
 74.19     (b) Laws 1993, chapter 247, article 4, section 8; Laws 
 74.20  1995, chapter 96, section 2; and Laws 1995, First Special 
 74.21  Session chapter 3, article 13, section 2, are repealed. 
 74.22     (c) Laws 1994, chapter 625, article 5, section 5, as 
 74.23  amended by Laws 1995, chapter 234, article 3, section 8, is 
 74.24  repealed. 
 74.25     Sec. 64.  [EFFECTIVE DATE.] 
 74.26     Section 23 is effective the day following final enactment.  
 74.27  Section 46 is effective January 1, 1998, and applies to high 
 74.28  deductible health plans issued or renewed on or after that date. 
 74.29                             ARTICLE 3 
 74.30                        MINNESOTACARE TAXES 
 74.31     Section 1.  [16A.76] [FEDERAL RESERVE; HEALTH CARE ACCESS 
 74.32  FUND.] 
 74.33     Subdivision 1.  [ESTABLISH RESERVE.] The federal 
 74.34  contingency reserve is established within the health care access 
 74.35  fund for uses necessary to preserve access to basic health care 
 74.36  services when federal funding is significantly reduced. 
 75.1      Subd. 2.  [RESERVE FINANCING.] The funds in reserve shall 
 75.2   be equal to the amount of federal financial participation 
 75.3   received since July 1, 1995, for services and administrative 
 75.4   activities funded by the health care access fund up to a reserve 
 75.5   limit of $150,000,000.  Investment income attributed to the 
 75.6   federal contingency reserve balances shall also be included in 
 75.7   the total reserve amount. 
 75.8      Subd. 3.  [PERMITTED USE.] The federal contingency reserve 
 75.9   is established to protect access to basic health care services 
 75.10  that are publicly funded.  Funds held in the federal contingency 
 75.11  reserve are available for appropriation in the event that 
 75.12  federal funds for basic health care services are significantly 
 75.13  reduced such as under federal reform or other significant 
 75.14  changes to federal law. 
 75.15     Subd. 4.  [LIMITS ON USE.] The federal contingency reserve 
 75.16  is not available for supplementing reductions in federal funding 
 75.17  resulting from application of current federal law funding 
 75.18  formulas, for funding long-term care services, or for replacing 
 75.19  existing general fund commitments. 
 75.20     Sec. 2.  Minnesota Statutes 1996, section 60A.15, 
 75.21  subdivision 1, is amended to read: 
 75.22     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
 75.23  before April 1, June 1, and December 1 of each year, every 
 75.24  domestic and foreign company, including town and farmers' mutual 
 75.25  insurance companies, domestic mutual insurance companies, marine 
 75.26  insurance companies, health maintenance organizations, 
 75.27  integrated service networks, community integrated service 
 75.28  networks, and nonprofit health service plan corporations, shall 
 75.29  pay to the commissioner of revenue installments equal to 
 75.30  one-third of the insurer's total estimated tax for the current 
 75.31  year.  Except as provided in paragraphs (d) and, (e), (g), and 
 75.32  (h), installments must be based on a sum equal to two percent of 
 75.33  the premiums described in paragraph (b). 
 75.34     (b) Installments under paragraph (a), (d), or (e) are 
 75.35  percentages of gross premiums less return premiums on all direct 
 75.36  business received by the insurer in this state, or by its agents 
 76.1   for it, in cash or otherwise, during such year. 
 76.2      (c) Failure of a company to make payments of at least 
 76.3   one-third of either (1) the total tax paid during the previous 
 76.4   calendar year or (2) 80 percent of the actual tax for the 
 76.5   current calendar year shall subject the company to the penalty 
 76.6   and interest provided in this section, unless the total tax for 
 76.7   the current tax year is $500 or less. 
 76.8      (d) For health maintenance organizations, nonprofit health 
 76.9   services service plan corporations, integrated service networks, 
 76.10  and community integrated service networks, the installments must 
 76.11  be based on an amount equal to one percent of premiums described 
 76.12  in paragraph (b) that are paid after December 31, 
 76.13  1995 determined under paragraph (g) or (h). 
 76.14     (e) For purposes of computing installments for town and 
 76.15  farmers' mutual insurance companies and for mutual property 
 76.16  casualty companies with total assets on December 31, 1989, of 
 76.17  $1,600,000,000 or less, the following rates apply: 
 76.18     (1) for all life insurance, two percent; 
 76.19     (2) for town and farmers' mutual insurance companies and 
 76.20  for mutual property and casualty companies with total assets of 
 76.21  $5,000,000 or less, on all other coverages, one percent; and 
 76.22     (3) for mutual property and casualty companies with total 
 76.23  assets on December 31, 1989, of $1,600,000,000 or less, on all 
 76.24  other coverages, 1.26 percent. 
 76.25     (f) Premiums under medical assistance, general assistance 
 76.26  medical care, the MinnesotaCare program, and the Minnesota 
 76.27  comprehensive health insurance plan and all payments, revenues, 
 76.28  and reimbursements received from the federal government for 
 76.29  Medicare-related coverage as defined in section 62A.31, 
 76.30  subdivision 3, paragraph (e), are not subject to tax under this 
 76.31  section. 
 76.32     (g) For calendar years 1998 and 1999, the installments for 
 76.33  health maintenance organizations, community integrated service 
 76.34  networks, and nonprofit health service plan corporations must be 
 76.35  based on an amount equal to one percent of premiums described 
 76.36  under paragraph (b).  Health maintenance organizations, 
 77.1   community integrated service networks, and nonprofit health 
 77.2   service plan corporations that have met the cost containment 
 77.3   goals established under section 62J.04 in the individual and 
 77.4   small employer market for calendar year 1996 are exempt from 
 77.5   payment of the tax imposed under this section for premiums paid 
 77.6   after March 30, 1997, and before April 1, 1998.  Health 
 77.7   maintenance organizations, community integrated service 
 77.8   networks, and nonprofit health service plan corporations that 
 77.9   have met the cost containment goals established under section 
 77.10  62J.04 in the individual and small employer market for calendar 
 77.11  year 1997 are exempt from payment of the tax imposed under this 
 77.12  section for premiums paid after March 30, 1998, and before April 
 77.13  1, 1999.  
 77.14     (h) For calendar years after 1999, the commissioner of 
 77.15  finance shall determine the balance of the health care access 
 77.16  fund on September 1 of each year beginning September 1, 1999.  
 77.17  If the commissioner determines that there is no structural 
 77.18  deficit for the next fiscal year, no tax shall be imposed under 
 77.19  paragraph (d) for the following calendar year.  If the 
 77.20  commissioner determines that there will be a structural deficit 
 77.21  in the fund for the following fiscal year, then the 
 77.22  commissioner, in consultation with the commissioner of revenue, 
 77.23  shall determine the amount needed to eliminate the structural 
 77.24  deficit and a tax shall be imposed under paragraph (d) for the 
 77.25  following calendar year.  The commissioner shall determine the 
 77.26  rate of the tax as either one-quarter of one percent, one-half 
 77.27  of one percent, three-quarters of one percent, or one percent of 
 77.28  premiums described in paragraph (b), whichever is the lowest of 
 77.29  those rates that the commissioner determines will produce 
 77.30  sufficient revenue to eliminate the projected structural 
 77.31  deficit.  The commissioner of finance shall publish in the State 
 77.32  Register by October 1 of each year the amount of tax to be 
 77.33  imposed for the following calendar year. 
 77.34     (i) In approving the premium rates as required in sections 
 77.35  62L.08, subdivision 8, and 62A.65, subdivision 3, the 
 77.36  commissioners of health and commerce shall ensure that any 
 78.1   exemption from the tax as described in paragraphs (g) and (h) is 
 78.2   reflected in the premium rate. 
 78.3      Sec. 3.  Minnesota Statutes 1996, section 256.9352, 
 78.4   subdivision 3, is amended to read: 
 78.5      Subd. 3.  [FINANCIAL MANAGEMENT.] (a) The commissioner 
 78.6   shall manage spending for the MinnesotaCare program in a manner 
 78.7   that maintains a minimum reserve equal to five percent of the 
 78.8   expected cost of state premium subsidies in accordance with 
 78.9   section 16A.76.  The commissioner must make a quarterly 
 78.10  assessment of the expected expenditures for the covered services 
 78.11  for the remainder of the current biennium and for the following 
 78.12  biennium.  The estimated expenditure, including minimum the 
 78.13  reserve requirements described in section 16A.76, shall be 
 78.14  compared to an estimate of the revenues that will be deposited 
 78.15  in the health care access fund.  Based on this comparison, and 
 78.16  after consulting with the chairs of the house ways and means 
 78.17  committee and the senate finance committee, and the legislative 
 78.18  commission on health care access, the commissioner shall, as 
 78.19  necessary, make the adjustments specified in paragraph (b) to 
 78.20  ensure that expenditures remain within the limits of available 
 78.21  revenues for the remainder of the current biennium and for the 
 78.22  following biennium.  The commissioner shall not hire additional 
 78.23  staff using appropriations from the health care access fund 
 78.24  until the commissioner of finance makes a determination that the 
 78.25  adjustments implemented under paragraph (b) are sufficient to 
 78.26  allow MinnesotaCare expenditures to remain within the limits of 
 78.27  available revenues for the remainder of the current biennium and 
 78.28  for the following biennium. 
 78.29     (b) The adjustments the commissioner shall use must be 
 78.30  implemented in this order:  first, stop enrollment of single 
 78.31  adults and households without children; second, upon 45 days' 
 78.32  notice, stop coverage of single adults and households without 
 78.33  children already enrolled in the MinnesotaCare program; third, 
 78.34  upon 90 days' notice, decrease the premium subsidy amounts by 
 78.35  ten percent for families with gross annual income above 200 
 78.36  percent of the federal poverty guidelines; fourth, upon 90 days' 
 79.1   notice, decrease the premium subsidy amounts by ten percent for 
 79.2   families with gross annual income at or below 200 percent; and 
 79.3   fifth, require applicants to be uninsured for at least six 
 79.4   months prior to eligibility in the MinnesotaCare program.  If 
 79.5   these measures are insufficient to limit the expenditures to the 
 79.6   estimated amount of revenue, the commissioner shall further 
 79.7   limit enrollment or decrease premium subsidies. 
 79.8      The reserve referred to in this subdivision is appropriated 
 79.9   to the commissioner but may only be used upon approval of the 
 79.10  commissioner of finance, if estimated costs will exceed the 
 79.11  forecasted amount of available revenues after all adjustments 
 79.12  authorized under this subdivision have been made. 
 79.13     By February 1, 1995, the department of human services and 
 79.14  the department of health shall develop a plan to adjust benefit 
 79.15  levels, eligibility guidelines, or other steps necessary to 
 79.16  ensure that expenditures for the MinnesotaCare program are 
 79.17  contained within the two percent taxes imposed under section 
 79.18  295.52 and the gross premiums tax imposed under section 60A.15, 
 79.19  subdivision 1, paragraph (e), for fiscal year 1997.  
 79.20     (c) Notwithstanding paragraphs (a) and (b), the 
 79.21  commissioner shall proceed with the enrollment of single adults 
 79.22  and households without children in accordance with section 
 79.23  256.9354, subdivision 5, paragraph (a), even if the expenditures 
 79.24  do not remain within the limits of available revenues through 
 79.25  fiscal year 1997 to allow the departments of human services and 
 79.26  health to develop the plan required under paragraph (b). 
 79.27     Sec. 4.  Minnesota Statutes 1996, section 295.50, 
 79.28  subdivision 3, is amended to read: 
 79.29     Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
 79.30  amounts received in money or otherwise by: 
 79.31     (1) a hospital for patient services; 
 79.32     (2) a surgical center for patient services; 
 79.33     (3) a health care provider, other than a staff model health 
 79.34  carrier, for patient services; 
 79.35     (4) a wholesale drug distributor for sale or distribution 
 79.36  of legend drugs that are delivered:  (i) to a Minnesota resident 
 80.1   by a wholesale drug distributor who is a nonresident pharmacy 
 80.2   directly, by common carrier, or by mail; or (ii) in Minnesota by 
 80.3   the wholesale drug distributor, by common carrier, or by mail, 
 80.4   unless the legend drugs are delivered to another wholesale drug 
 80.5   distributor who sells legend drugs exclusively at wholesale.  
 80.6   Legend drugs do not include nutritional products as defined in 
 80.7   Minnesota Rules, part 9505.0325; and 
 80.8      (5) a staff model health plan company as gross premiums for 
 80.9   enrollees, copayments, deductibles, coinsurance, and fees for 
 80.10  patient services covered under its contracts with groups and 
 80.11  enrollees; and 
 80.12     (6) a pharmacy for medical supplies, appliances, and 
 80.13  equipment. 
 80.14     Sec. 5.  Minnesota Statutes 1996, section 295.50, 
 80.15  subdivision 4, is amended to read: 
 80.16     Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
 80.17  provider" means: 
 80.18     (1) a person whose health care occupation is regulated or 
 80.19  required to be regulated by the state of Minnesota furnishing 
 80.20  any or all of the following goods or services directly to a 
 80.21  patient or consumer:  medical, surgical, optical, visual, 
 80.22  dental, hearing, nursing services, drugs, medical supplies, 
 80.23  medical appliances, laboratory, diagnostic or therapeutic 
 80.24  services, or any; (2) a person who provides goods and services 
 80.25  not listed above in clause (1) that qualify for reimbursement 
 80.26  under the medical assistance program provided under chapter 
 80.27  256B.  For purposes of this clause, "directly to a patient or 
 80.28  consumer" includes goods and services provided in connection 
 80.29  with independent medical examinations under section 65B.56 or 
 80.30  other examinations for purposes of litigation or insurance 
 80.31  claims; 
 80.32     (2) (3) a staff model health plan company; or 
 80.33     (3) (4) an ambulance service required to be licensed; or 
 80.34     (5) a person who sells or repairs hearing aids and related 
 80.35  equipment or prescription eyewear. 
 80.36     (b) Health care provider does not include hospitals,; 
 81.1   medical supplies distributors, except as specified under 
 81.2   paragraph (a), clause (5); nursing homes licensed under chapter 
 81.3   144A or licensed in any other jurisdiction,; pharmacies,; 
 81.4   surgical centers,; bus and taxicab transportation, or any other 
 81.5   providers of transportation services other than ambulance 
 81.6   services required to be licensed,; supervised living facilities 
 81.7   for persons with mental retardation or related conditions, 
 81.8   licensed under Minnesota Rules, parts 4665.0100 to 4665.9900,; 
 81.9   residential care homes licensed under chapter 144B,; board and 
 81.10  lodging establishments providing only custodial services that 
 81.11  are licensed under chapter 157 and registered under section 
 81.12  157.17 to provide supportive services or health supervision 
 81.13  services,; adult foster homes as defined in Minnesota Rules, 
 81.14  part 9555.5105,; day training and habilitation services for 
 81.15  adults with mental retardation and related conditions as defined 
 81.16  in section 252.41, subdivision 3,; and boarding care homes, as 
 81.17  defined in Minnesota Rules, part 4655.0100. 
 81.18     (c) For purposes of this subdivision, "directly to a 
 81.19  patient or consumer" includes goods and services provided in 
 81.20  connection with independent medical examinations under section 
 81.21  65B.56 or other examinations for purposes of litigation or 
 81.22  insurance claims. 
 81.23     Sec. 6.  Minnesota Statutes 1996, section 295.50, 
 81.24  subdivision 6, is amended to read: 
 81.25     Subd. 6.  [HOME HEALTH CARE SERVICES.] "Home health care 
 81.26  services" are services: 
 81.27     (1) defined under the state medical assistance program as 
 81.28  home health agency services provided by a home health agency, 
 81.29  personal care services and supervision of personal care 
 81.30  services, private duty nursing services, and waivered 
 81.31  services or services by home care providers required to be 
 81.32  licensed under chapter 144A; and 
 81.33     (2) provided at a recipient's residence, if the recipient 
 81.34  does not live in a hospital, nursing facility, as defined in 
 81.35  section 62A.46, subdivision 3, or intermediate care facility for 
 81.36  persons with mental retardation as defined in section 256B.055, 
 82.1   subdivision 12, paragraph (d). 
 82.2      Sec. 7.  Minnesota Statutes 1996, section 295.50, 
 82.3   subdivision 7, is amended to read: 
 82.4      Subd. 7.  [HOSPITAL.] "Hospital" means a hospital licensed 
 82.5   under chapter 144, or a hospital licensed by any other state or 
 82.6   province or territory of Canada jurisdiction. 
 82.7      Sec. 8.  Minnesota Statutes 1996, section 295.50, 
 82.8   subdivision 13, is amended to read: 
 82.9      Subd. 13.  [SURGICAL CENTER.] "Surgical center" is an 
 82.10  outpatient surgical center as defined in Minnesota Rules, 
 82.11  chapter 4675 or a similar facility located in any other state or 
 82.12  province or territory of Canada jurisdiction. 
 82.13     Sec. 9.  Minnesota Statutes 1996, section 295.50, 
 82.14  subdivision 14, is amended to read: 
 82.15     Subd. 14.  [WHOLESALE DRUG DISTRIBUTOR.] "Wholesale drug 
 82.16  distributor" means a wholesale drug distributor required to be 
 82.17  licensed under sections 151.42 to 151.51 or a nonresident 
 82.18  pharmacy required to be registered under section 151.19. 
 82.19     Sec. 10.  Minnesota Statutes 1996, section 295.51, 
 82.20  subdivision 1, is amended to read: 
 82.21     Subdivision 1.  [BUSINESS TRANSACTIONS IN MINNESOTA.] A 
 82.22  hospital, surgical center, pharmacy, or health care provider is 
 82.23  subject to tax under sections 295.50 to 295.59 if it is 
 82.24  "transacting business in Minnesota."  A hospital, surgical 
 82.25  center, pharmacy, or health care provider is transacting 
 82.26  business in Minnesota if it maintains contacts with or presence 
 82.27  in the state of Minnesota sufficient to permit taxation of gross 
 82.28  revenues received for patient services under the United States 
 82.29  Constitution. 
 82.30     Sec. 11.  Minnesota Statutes 1996, section 295.52, 
 82.31  subdivision 4, is amended to read: 
 82.32     Subd. 4.  [USE TAX; PRESCRIPTION DRUGS.] A person that 
 82.33  receives prescription drugs for resale or use in Minnesota, 
 82.34  other than from a wholesale drug distributor that paid the tax 
 82.35  under subdivision 3, is subject to a tax equal to two percent of 
 82.36  the price paid multiplied by the tax percentage specified in 
 83.1   this section.  Liability for the tax is incurred when 
 83.2   prescription drugs are received or delivered in Minnesota by the 
 83.3   person. 
 83.4      Sec. 12.  Minnesota Statutes 1996, section 295.52, is 
 83.5   amended by adding a subdivision to read: 
 83.6      Subd. 6.  [HEARING AIDS AND PRESCRIPTION EYEWEAR.] The tax 
 83.7   liability of a person who meets the definition of a health care 
 83.8   provider solely because the person sells or repairs hearing aids 
 83.9   and related equipment or prescription eyewear is limited to the 
 83.10  gross revenues received from the sale or repair of these items. 
 83.11     Sec. 13.  Minnesota Statutes 1996, section 295.52, is 
 83.12  amended by adding a subdivision to read: 
 83.13     Subd. 7.  [TAX REDUCTION.] Notwithstanding subdivisions 1, 
 83.14  1a, 2, 3, and 4, the tax imposed under this section for calendar 
 83.15  years 1998 and 1999 shall be equal to 1.5 percent of the gross 
 83.16  revenues received on or after January 1, 1998, and before 
 83.17  January 1, 2000.  The commissioner shall extend the reduced tax 
 83.18  rate of 1.5 percent for gross revenues received on or after 
 83.19  January 1, 2000, and before January 1, 2002, if the commissioner 
 83.20  of finance determines that the health care access fund 
 83.21  structural balance projected for fiscal year 2001 will remain 
 83.22  positive, prior to any increase of the one percent premium tax 
 83.23  under section 60A.15, subdivision 1, paragraph (h), and prior to 
 83.24  any tax expenditures related to the increase in the maximum tax 
 83.25  credit for research expenses under section 295.53, subdivision 
 83.26  4, as amended by this act. 
 83.27     Sec. 14.  Minnesota Statutes 1996, section 295.53, 
 83.28  subdivision 1, is amended to read: 
 83.29     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
 83.30  are excluded from the gross revenues subject to the hospital, 
 83.31  surgical center, or health care provider taxes under sections 
 83.32  295.50 to 295.57: 
 83.33     (1) payments received for services provided under the 
 83.34  Medicare program, including payments received from the 
 83.35  government, and organizations governed by sections 1833 and 1876 
 83.36  of title XVIII of the federal Social Security Act, United States 
 84.1   Code, title 42, section 1395, and enrollee deductibles, 
 84.2   coinsurance, and copayments, whether paid by the Medicare 
 84.3   enrollee or by a Medicare supplemental coverage as defined in 
 84.4   section 62A.011, subdivision 3, clause (10).  Payments for 
 84.5   services not covered by Medicare are taxable; 
 84.6      (2) medical assistance payments including payments received 
 84.7   directly from the government or from a prepaid plan; 
 84.8      (3) payments received for home health care services; 
 84.9      (4) payments received from hospitals or surgical centers 
 84.10  for goods and services on which liability for tax is imposed 
 84.11  under section 295.52 or the source of funds for the payment is 
 84.12  exempt under clause (1), (2), (7), (8), or (10); 
 84.13     (5) payments received from health care providers for goods 
 84.14  and services on which liability for tax is imposed under this 
 84.15  chapter or the source of funds for the payment is exempt under 
 84.16  clause (1), (2), (7), (8), or (10); 
 84.17     (6) amounts paid for legend drugs, other than nutritional 
 84.18  products, to a wholesale drug distributor who is subject to tax 
 84.19  under section 295.52, subdivision 3, reduced by reimbursements 
 84.20  received for legend drugs under clauses (1), (2), (7), and (8); 
 84.21     (7) payments received under the general assistance medical 
 84.22  care program including payments received directly from the 
 84.23  government or from a prepaid plan; 
 84.24     (8) payments received for providing services under the 
 84.25  MinnesotaCare program including payments received directly from 
 84.26  the government or from a prepaid plan and enrollee deductibles, 
 84.27  coinsurance, and copayments.  For purposes of this clause, 
 84.28  coinsurance means the portion of payment that the enrollee is 
 84.29  required to pay for the covered service; 
 84.30     (9) payments received by a health care provider or the 
 84.31  wholly owned subsidiary of a health care provider for care 
 84.32  provided outside Minnesota to a patient who is not domiciled in 
 84.33  Minnesota; 
 84.34     (10) payments received from the chemical dependency fund 
 84.35  under chapter 254B; 
 84.36     (11) payments received in the nature of charitable 
 85.1   donations that are not designated for providing patient services 
 85.2   to a specific individual or group; 
 85.3      (12) payments received for providing patient services 
 85.4   incurred through a formal program of health care research 
 85.5   conducted in conformity with federal regulations governing 
 85.6   research on human subjects.  Payments received from patients or 
 85.7   from other persons paying on behalf of the patients are subject 
 85.8   to tax; 
 85.9      (13) payments received from any governmental agency for 
 85.10  services benefiting the public, not including payments made by 
 85.11  the government in its capacity as an employer or insurer; 
 85.12     (14) payments received for services provided by community 
 85.13  residential mental health facilities licensed under Minnesota 
 85.14  Rules, parts 9520.0500 to 9520.0690, community support programs 
 85.15  and family community support programs approved under Minnesota 
 85.16  Rules, parts 9535.1700 to 9535.1760, and community mental health 
 85.17  centers as defined in section 245.62, subdivision 2; 
 85.18     (15) government payments received by a regional treatment 
 85.19  center; 
 85.20     (16) payments received for hospice care services; 
 85.21     (17) payments received by a health care provider for 
 85.22  medical supplies, appliances, and equipment hearing aids and 
 85.23  related equipment or prescription eyewear delivered outside of 
 85.24  Minnesota; 
 85.25     (18) payments received by a post-secondary educational 
 85.26  institution from student tuition, student activity fees, health 
 85.27  care service fees, government appropriations, donations, or 
 85.28  grants.  Fee for service payments and payments for extended 
 85.29  coverage are taxable; and 
 85.30     (19) payments received for services provided by:  assisted 
 85.31  living programs and congregate housing programs. 
 85.32     (b) Payments received by wholesale drug distributors for 
 85.33  prescription legend drugs sold directly to veterinarians or 
 85.34  veterinary bulk purchasing organizations are excluded from the 
 85.35  gross revenues subject to the wholesale drug distributor tax 
 85.36  under sections 295.50 to 295.59. 
 86.1      Sec. 15.  Minnesota Statutes 1996, section 295.53, 
 86.2   subdivision 3, is amended to read: 
 86.3      Subd. 3.  [SEPARATE STATEMENT OF TAX.] A hospital, surgical 
 86.4   center, pharmacy, or health care provider must not state the tax 
 86.5   obligation under section 295.52 in a deceptive or misleading 
 86.6   manner.  It must not separately state tax obligations on bills 
 86.7   provided to patients, consumers, or other payers when the amount 
 86.8   received for the services or goods is not subject to tax.  
 86.9      Pharmacies that separately state the tax obligations on 
 86.10  bills provided to consumers or to other payers who purchase 
 86.11  legend drugs may state the tax obligation as two percent of the 
 86.12  wholesale price of the legend drugs multiplied by the tax 
 86.13  percentage specified in section 295.52.  Pharmacies must not 
 86.14  state the tax obligation as two percent of based on the retail 
 86.15  price.  
 86.16     Whenever the commissioner determines that a person has 
 86.17  engaged in any act or practice constituting a violation of this 
 86.18  subdivision, the commissioner may bring an action in the name of 
 86.19  the state in the district court of the appropriate county to 
 86.20  enjoin the act or practice and to enforce compliance with this 
 86.21  subdivision, or the commissioner may refer the matter to the 
 86.22  attorney general or the county attorney of the appropriate 
 86.23  county.  Upon a proper showing, a permanent or temporary 
 86.24  injunction, restraining order, or other appropriate relief must 
 86.25  be granted.  
 86.26     Sec. 16.  Minnesota Statutes 1996, section 295.53, 
 86.27  subdivision 4, is amended to read: 
 86.28     Subd. 4.  [DEDUCTION FOR RESEARCH.] (a) In addition to the 
 86.29  exemptions allowed under subdivision 1, a hospital or health 
 86.30  care provider which is exempt under section 501(c)(3) of the 
 86.31  Internal Revenue Code of 1986 or is owned and operated under 
 86.32  authority of a governmental unit, may deduct from its gross 
 86.33  revenues subject to the hospital or health care provider taxes 
 86.34  under sections 295.50 to 295.57 revenues equal to expenditures 
 86.35  for qualifying research conducted by an allowable research 
 86.36  programs program.  
 87.1      (b) For purposes of this subdivision, the following 
 87.2   requirements apply: 
 87.3      (1) expenditures for allowable research programs are the 
 87.4   direct and general must be for program costs for activities 
 87.5   which are part of qualifying research conducted by an allowable 
 87.6   research program; 
 87.7      (2) an allowable research program must be a formal program 
 87.8   of medical and health care research approved by the governing 
 87.9   body of the hospital or health care provider which also includes 
 87.10  active solicitation of research funds from government and 
 87.11  private sources.  Allowable conducted by an entity which is 
 87.12  exempt under section 501(c)(3) of the Internal Revenue Code of 
 87.13  1986 or is owned and operated under authority of a governmental 
 87.14  unit; 
 87.15     (3) qualifying research must:  
 87.16     (A) be approved in writing by the governing body of the 
 87.17  hospital or health care provider which is taking the deduction 
 87.18  under this subdivision; 
 87.19     (1) (B) have as its purpose the development of new 
 87.20  knowledge in basic or applied science relating to the diagnosis 
 87.21  and treatment of conditions affecting the human body; 
 87.22     (2) (C) be subject to review by individuals with expertise 
 87.23  in the subject matter of the proposed study but who have no 
 87.24  financial interest in the proposed study and are not involved in 
 87.25  the conduct of the proposed study; and 
 87.26     (3) (D) be subject to review and supervision by an 
 87.27  institutional review board operating in conformity with federal 
 87.28  regulations if the research involves human subjects or an 
 87.29  institutional animal care and use committee operating in 
 87.30  conformity with federal regulations if the research involves 
 87.31  animal subjects.  Research expenses are not exempt if the study 
 87.32  is a routine evaluation of health care methods or products used 
 87.33  in a particular setting conducted for the purpose of making a 
 87.34  management decision.  Costs of clinical research activities paid 
 87.35  directly for the benefit of an individual patient are excluded 
 87.36  from this exemption.  Basic research in fields including 
 88.1   biochemistry, molecular biology, and physiology are also 
 88.2   included if such programs are subject to a peer review process. 
 88.3      (c) No deduction shall be allowed under this subdivision 
 88.4   for any revenue received by the hospital or health care provider 
 88.5   in the form of a grant, gift, or otherwise, whether from a 
 88.6   government or nongovernment source, on which the tax liability 
 88.7   under section 295.52 is not imposed or for which the tax 
 88.8   liability under section 295.52 has been received from a third 
 88.9   party as provided for in section 295.582. 
 88.10     (d) Effective beginning with calendar year 1995, the 
 88.11  taxpayer shall not take the deduction under this section into 
 88.12  account in determining estimated tax payments or the payment 
 88.13  made with the annual return under section 295.55.  The total 
 88.14  deduction allowable to all taxpayers under this section for 
 88.15  calendar years beginning after December 31, 1994, may not exceed 
 88.16  $65,000,000.  To implement this limit, each qualifying hospital 
 88.17  and qualifying health care provider shall submit to the 
 88.18  commissioner by March 15 its total expenditures qualifying for 
 88.19  the deduction under this section for the previous calendar 
 88.20  year.  The commissioner shall sum the total expenditures of all 
 88.21  taxpayers qualifying under this section for the calendar year.  
 88.22  If the resulting amount exceeds $65,000,000, the commissioner 
 88.23  shall allocate a part of the $65,000,000 deduction limit to each 
 88.24  qualifying hospital and health care provider in proportion to 
 88.25  its share of the total deductions.  The commissioner shall pay a 
 88.26  refund to each qualifying hospital or provider equal to its 
 88.27  share of the deduction limit multiplied by two percent the tax 
 88.28  percentage specified in section 295.52.  The commissioner shall 
 88.29  pay the refund no later than May 15 of the calendar year. 
 88.30     (e) This subdivision expires January 1, 2000. 
 88.31     Sec. 17.  Minnesota Statutes 1996, section 295.53, is 
 88.32  amended by adding a subdivision to read: 
 88.33     Subd. 4a.  [CREDIT FOR RESEARCH.] (a) In addition to the 
 88.34  exemptions allowed under subdivision 1, a hospital or health 
 88.35  care provider may claim an annual credit against the total 
 88.36  amount of tax, if any, the hospital or health care provider owes 
 89.1   for that calendar year under sections 295.50 to 295.57.  The 
 89.2   credit shall equal 2.5 percent of revenues for patient services 
 89.3   used to fund expenditures for qualifying research conducted by 
 89.4   an allowable research program.  The amount of the credit shall 
 89.5   not exceed the tax liability of the hospital or health care 
 89.6   provider under sections 295.50 to 295.57. 
 89.7      (b) For purposes of this subdivision, the following 
 89.8   requirements apply: 
 89.9      (1) expenditures must be for program costs of qualifying 
 89.10  research conducted by an allowable research program; 
 89.11     (2) an allowable research program must be a formal program 
 89.12  of medical and health care research conducted by an entity which 
 89.13  is exempt under section 501(c)(3) of the Internal Revenue Code 
 89.14  of 1986 or is owned and operated under authority of a 
 89.15  governmental unit; 
 89.16     (3) qualifying research must:  
 89.17     (A) be approved in writing by the governing body of the 
 89.18  hospital or health care provider which is taking the deduction 
 89.19  under this subdivision; 
 89.20     (B) have as its purpose the development of new knowledge in 
 89.21  basic or applied science relating to the diagnosis and treatment 
 89.22  of conditions affecting the human body; 
 89.23     (C) be subject to review by individuals with expertise in 
 89.24  the subject matter of the proposed study but who have no 
 89.25  financial interest in the proposed study and are not involved in 
 89.26  the conduct of the proposed study; and 
 89.27     (D) be subject to review and supervision by an 
 89.28  institutional review board operating in conformity with federal 
 89.29  regulations if the research involves human subjects or an 
 89.30  institutional animal care and use committee operating in 
 89.31  conformity with federal regulations if the research involves 
 89.32  animal subjects.  Research expenses are not exempt if the study 
 89.33  is a routine evaluation of health care methods or products used 
 89.34  in a particular setting conducted for the purpose of making a 
 89.35  management decision.  Costs of clinical research activities paid 
 89.36  directly for the benefit of an individual patient are excluded 
 90.1   from this exemption.  Basic research in fields including 
 90.2   biochemistry, molecular biology, and physiology are also 
 90.3   included if such programs are subject to a peer review process. 
 90.4      (c) No credit shall be allowed under this subdivision for 
 90.5   any revenue received by the hospital or health care provider in 
 90.6   the form of a grant, gift, or otherwise, whether from a 
 90.7   government or nongovernment source, on which the tax liability 
 90.8   under section 295.52 is not imposed. 
 90.9      (d) The taxpayer shall apply for the credit under this 
 90.10  section on the annual return under section 295.55, subdivision 5.
 90.11     (e) Beginning September 1, 2000, if the actual or estimated 
 90.12  amount paid under this section for the calendar year exceeds 
 90.13  $2,500,000, the commissioner of finance shall determine the rate 
 90.14  of the research credit for the following calendar year to the 
 90.15  nearest one-half percent so that refunds paid under this section 
 90.16  will most closely equal $2,500,000.  The commissioner of finance 
 90.17  shall publish in the State Register by October 1 of each year 
 90.18  the rate of the credit for the following calendar year.  A 
 90.19  determination under this section is not subject to the 
 90.20  rulemaking provisions of chapter 14. 
 90.21     Sec. 18.  Minnesota Statutes 1996, section 295.54, 
 90.22  subdivision 1, is amended to read: 
 90.23     Subdivision 1.  [TAXES PAID TO ANOTHER STATE.] A hospital, 
 90.24  surgical center, pharmacy, or health care provider that has paid 
 90.25  taxes to another state or province or territory of 
 90.26  Canada jurisdiction measured by gross revenues and is subject to 
 90.27  tax under sections 295.52 to 295.59 on the same gross revenues 
 90.28  is entitled to a credit for the tax legally due and paid to 
 90.29  another state or province or territory of Canada jurisdiction to 
 90.30  the extent of the lesser of (1) the tax actually paid to the 
 90.31  other state or province or territory of Canada jurisdiction, or 
 90.32  (2) the amount of tax imposed by Minnesota on the gross revenues 
 90.33  subject to tax in the other taxing jurisdictions. 
 90.34     Sec. 19.  Minnesota Statutes 1996, section 295.54, 
 90.35  subdivision 2, is amended to read: 
 90.36     Subd. 2.  [PHARMACY CREDIT REFUND.] A pharmacy may claim a 
 91.1   quarterly credit an annual refund against the total amount of 
 91.2   tax, if any, the pharmacy owes during that quarter calendar year 
 91.3   under section 295.52, subdivision 1b, as provided in this 
 91.4   subdivision 2.  The credit refund shall equal two percent of 
 91.5   the amount paid by the pharmacy to a wholesale drug distributor 
 91.6   subject to tax under section 295.52, subdivision 3, for legend 
 91.7   drugs delivered by the pharmacy outside of Minnesota, multiplied 
 91.8   by the tax percentage specified in section 295.52.  If the 
 91.9   amount of the credit refund exceeds the tax liability of the 
 91.10  pharmacy under section 295.52, subdivision 1b, the commissioner 
 91.11  shall provide the pharmacy with a refund equal to the excess 
 91.12  amount.  Each qualifying pharmacy must apply for the refund on 
 91.13  the annual return as provided under section 295.55, subdivision 
 91.14  5.  The refund must be claimed within one year of the due date 
 91.15  of the return.  Interest on refunds paid under this subdivision 
 91.16  will begin to accrue 60 days after the date a claim for refund 
 91.17  is filed.  For purposes of this subdivision, the date a claim is 
 91.18  filed is the due date of the return or the date of the actual 
 91.19  claim for refund, whichever is later.  
 91.20     Sec. 20.  Minnesota Statutes 1996, section 295.55, 
 91.21  subdivision 2, is amended to read: 
 91.22     Subd. 2.  [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 
 91.23  Each hospital or surgical center must make estimated payments of 
 91.24  the taxes for the calendar year in monthly installments to the 
 91.25  commissioner within ten 15 days after the end of the month. 
 91.26     (b) Estimated tax payments are not required of hospitals or 
 91.27  surgical centers if the tax for the calendar year is less than 
 91.28  $500 or if a hospital has been allowed a grant under section 
 91.29  144.1484, subdivision 2, for the year. 
 91.30     (c) Underpayment of estimated installments bear interest at 
 91.31  the rate specified in section 270.75, from the due date of the 
 91.32  payment until paid or until the due date of the annual return at 
 91.33  the rate specified in section 270.75.  An underpayment of an 
 91.34  estimated installment is the difference between the amount paid 
 91.35  and the lesser of (1) 90 percent of one-twelfth of the tax for 
 91.36  the calendar year or (2) the tax for the actual gross revenues 
 92.1   received during the month. 
 92.2      Sec. 21.  Minnesota Statutes 1996, section 295.582, is 
 92.3   amended to read: 
 92.4      295.582 [AUTHORITY.] 
 92.5      (a) A hospital, surgical center, pharmacy, or health care 
 92.6   provider that is subject to a tax under section 295.52, or a 
 92.7   pharmacy that has paid additional expense transferred under this 
 92.8   section by a wholesale drug distributor, may transfer additional 
 92.9   expense generated by section 295.52 obligations on to all 
 92.10  third-party contracts for the purchase of health care services 
 92.11  on behalf of a patient or consumer.  The additional expense 
 92.12  transferred to the third-party purchaser must not exceed two 
 92.13  percent of the tax percentage specified in section 295.52 
 92.14  multiplied against the gross revenues received under the 
 92.15  third-party contract, and two percent of the tax percentage 
 92.16  specified in section 295.52 multiplied against copayments and 
 92.17  deductibles paid by the individual patient or consumer.  The 
 92.18  expense must not be generated on revenues derived from payments 
 92.19  that are excluded from the tax under section 295.53.  All 
 92.20  third-party purchasers of health care services including, but 
 92.21  not limited to, third-party purchasers regulated under chapter 
 92.22  60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or 
 92.23  under section 471.61 or 471.617, must pay the transferred 
 92.24  expense in addition to any payments due under existing contracts 
 92.25  with the hospital, surgical center, pharmacy, or health care 
 92.26  provider, to the extent allowed under federal law.  A 
 92.27  third-party purchaser of health care services includes, but is 
 92.28  not limited to, a health carrier, integrated service network, or 
 92.29  community integrated service network that pays for health care 
 92.30  services on behalf of patients or that reimburses, indemnifies, 
 92.31  compensates, or otherwise insures patients for health care 
 92.32  services.  A third-party purchaser shall comply with this 
 92.33  section regardless of whether the third-party purchaser is a 
 92.34  for-profit, not-for-profit, or nonprofit entity.  A wholesale 
 92.35  drug distributor may transfer additional expense generated by 
 92.36  section 295.52 obligations to entities that purchase from the 
 93.1   wholesaler, and the entities must pay the additional expense.  
 93.2   Nothing in this section limits the ability of a hospital, 
 93.3   surgical center, pharmacy, wholesale drug distributor, or health 
 93.4   care provider to recover all or part of the section 295.52 
 93.5   obligation by other methods, including increasing fees or 
 93.6   charges. 
 93.7      (b) Each third-party purchaser regulated under any chapter 
 93.8   cited in paragraph (a) shall include with its annual renewal for 
 93.9   certification of authority or licensure documentation indicating 
 93.10  compliance with paragraph (a).  
 93.11     (c) Any hospital, surgical center, or health care provider 
 93.12  subject to a tax under section 295.52 or a pharmacy that has 
 93.13  paid additional expense transferred under this section by a 
 93.14  wholesale drug distributor may file a complaint with the 
 93.15  commissioner responsible for regulating the third-party 
 93.16  purchaser if at any time the third-party purchaser fails to 
 93.17  comply with paragraph (a).  
 93.18     (d) If the commissioner responsible for regulating the 
 93.19  third-party purchaser finds at any time that the third-party 
 93.20  purchaser has not complied with paragraph (a), the commissioner 
 93.21  may take enforcement action against a third-party purchaser 
 93.22  which is subject to the commissioner's regulatory jurisdiction 
 93.23  and which does not allow a hospital, surgical center, pharmacy, 
 93.24  or provider to pass-through the tax.  The commissioner may by 
 93.25  order fine or censure the third-party purchaser or revoke or 
 93.26  suspend the certificate of authority or license of the 
 93.27  third-party purchaser to do business in this state if the 
 93.28  commissioner finds that the third-party purchaser has not 
 93.29  complied with this section.  The third-party purchaser may 
 93.30  appeal the commissioner's order through a contested case hearing 
 93.31  in accordance with chapter 14. 
 93.32     Sec. 22.  [MCHA ASSESSMENT OFFSET.] 
 93.33     In approving the premium rates as required in Minnesota 
 93.34  Statutes, sections 62A.65, subdivision 3, and 62L.08, 
 93.35  subdivision 8, the commissioners of health and commerce shall 
 93.36  ensure that any appropriation to reduce the annual assessment 
 94.1   made on the contributing members to cover the costs of the 
 94.2   Minnesota comprehensive health insurance plan as required under 
 94.3   Minnesota Statutes, section 62E.11, is reflected in the premium 
 94.4   rate of each contributing member.  
 94.5      Sec. 23.  [REPEALER.] 
 94.6      (a) Minnesota Statutes 1996, sections 295.52, subdivision 
 94.7   1b; and 295.53, subdivision 5, are repealed. 
 94.8      (b) Laws 1997, chapters 31, article 4; and 84, article 4, 
 94.9   are repealed.  Notwithstanding Minnesota Statutes, section 
 94.10  645.34, the sections of statutes amended by the laws repealed 
 94.11  under this paragraph remain in effect as if not so amended. 
 94.12     Sec. 24.  [EFFECTIVE DATES.] 
 94.13     Section 2, subdivision 1, paragraph (f), is effective for 
 94.14  payments, revenues, and reimbursements received from the federal 
 94.15  government on or after December 31, 1996. 
 94.16     Sections 1 and 3 are effective July 1, 1997. 
 94.17     Sections 4, 5, 6, 9 to 13, 15, and 19 are effective for 
 94.18  gross revenues received after December 31, 1997. 
 94.19     Section 14, subdivision 1, paragraph (a), clause (6), and 
 94.20  paragraph (b) are effective the day following final enactment.  
 94.21  Section 14, paragraph (a), clause (17), is effective for gross 
 94.22  revenues received for hearing aids and related equipment or 
 94.23  prescription eyewear after December 31, 1997. 
 94.24     Section 18 is effective January 1, 1998.  Section 21, 
 94.25  paragraph (a), is effective January 1, 1998. 
 94.26     Section 20 is effective for estimated payments due after 
 94.27  July 1, 1997. 
 94.28     Sections 7, 8, and 21, paragraphs (c) and (d), are 
 94.29  effective the day following final enactment. 
 94.30     Section 16 is effective for research expenditures incurred 
 94.31  after December 31, 1995.  Section 17 is effective for research 
 94.32  expenditures incurred after December 31, 1999. 
 94.33     Section 23 is effective January 1, 1998. 
 94.34                             ARTICLE 4 
 94.35                    SENIOR CITIZEN DRUG PROGRAM 
 94.36     Section 1.  Minnesota Statutes 1996, section 256.01, 
 95.1   subdivision 2, is amended to read: 
 95.2      Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
 95.3   section 241.021, subdivision 2, the commissioner of human 
 95.4   services shall: 
 95.5      (1) Administer and supervise all forms of public assistance 
 95.6   provided for by state law and other welfare activities or 
 95.7   services as are vested in the commissioner.  Administration and 
 95.8   supervision of human services activities or services includes, 
 95.9   but is not limited to, assuring timely and accurate distribution 
 95.10  of benefits, completeness of service, and quality program 
 95.11  management.  In addition to administering and supervising human 
 95.12  services activities vested by law in the department, the 
 95.13  commissioner shall have the authority to: 
 95.14     (a) require county agency participation in training and 
 95.15  technical assistance programs to promote compliance with 
 95.16  statutes, rules, federal laws, regulations, and policies 
 95.17  governing human services; 
 95.18     (b) monitor, on an ongoing basis, the performance of county 
 95.19  agencies in the operation and administration of human services, 
 95.20  enforce compliance with statutes, rules, federal laws, 
 95.21  regulations, and policies governing welfare services and promote 
 95.22  excellence of administration and program operation; 
 95.23     (c) develop a quality control program or other monitoring 
 95.24  program to review county performance and accuracy of benefit 
 95.25  determinations; 
 95.26     (d) require county agencies to make an adjustment to the 
 95.27  public assistance benefits issued to any individual consistent 
 95.28  with federal law and regulation and state law and rule and to 
 95.29  issue or recover benefits as appropriate; 
 95.30     (e) delay or deny payment of all or part of the state and 
 95.31  federal share of benefits and administrative reimbursement 
 95.32  according to the procedures set forth in section 256.017; and 
 95.33     (f) make contracts with and grants to public and private 
 95.34  agencies and organizations, both profit and nonprofit, and 
 95.35  individuals, using appropriated funds. 
 95.36     (2) Inform county agencies, on a timely basis, of changes 
 96.1   in statute, rule, federal law, regulation, and policy necessary 
 96.2   to county agency administration of the programs. 
 96.3      (3) Administer and supervise all child welfare activities; 
 96.4   promote the enforcement of laws protecting handicapped, 
 96.5   dependent, neglected and delinquent children, and children born 
 96.6   to mothers who were not married to the children's fathers at the 
 96.7   times of the conception nor at the births of the children; 
 96.8   license and supervise child-caring and child-placing agencies 
 96.9   and institutions; supervise the care of children in boarding and 
 96.10  foster homes or in private institutions; and generally perform 
 96.11  all functions relating to the field of child welfare now vested 
 96.12  in the state board of control. 
 96.13     (4) Administer and supervise all noninstitutional service 
 96.14  to handicapped persons, including those who are visually 
 96.15  impaired, hearing impaired, or physically impaired or otherwise 
 96.16  handicapped.  The commissioner may provide and contract for the 
 96.17  care and treatment of qualified indigent children in facilities 
 96.18  other than those located and available at state hospitals when 
 96.19  it is not feasible to provide the service in state hospitals. 
 96.20     (5) Assist and actively cooperate with other departments, 
 96.21  agencies and institutions, local, state, and federal, by 
 96.22  performing services in conformity with the purposes of Laws 
 96.23  1939, chapter 431. 
 96.24     (6) Act as the agent of and cooperate with the federal 
 96.25  government in matters of mutual concern relative to and in 
 96.26  conformity with the provisions of Laws 1939, chapter 431, 
 96.27  including the administration of any federal funds granted to the 
 96.28  state to aid in the performance of any functions of the 
 96.29  commissioner as specified in Laws 1939, chapter 431, and 
 96.30  including the promulgation of rules making uniformly available 
 96.31  medical care benefits to all recipients of public assistance, at 
 96.32  such times as the federal government increases its participation 
 96.33  in assistance expenditures for medical care to recipients of 
 96.34  public assistance, the cost thereof to be borne in the same 
 96.35  proportion as are grants of aid to said recipients. 
 96.36     (7) Establish and maintain any administrative units 
 97.1   reasonably necessary for the performance of administrative 
 97.2   functions common to all divisions of the department. 
 97.3      (8) Act as designated guardian of both the estate and the 
 97.4   person of all the wards of the state of Minnesota, whether by 
 97.5   operation of law or by an order of court, without any further 
 97.6   act or proceeding whatever, except as to persons committed as 
 97.7   mentally retarded.  
 97.8      (9) Act as coordinating referral and informational center 
 97.9   on requests for service for newly arrived immigrants coming to 
 97.10  Minnesota. 
 97.11     (10) The specific enumeration of powers and duties as 
 97.12  hereinabove set forth shall in no way be construed to be a 
 97.13  limitation upon the general transfer of powers herein contained. 
 97.14     (11) Establish county, regional, or statewide schedules of 
 97.15  maximum fees and charges which may be paid by county agencies 
 97.16  for medical, dental, surgical, hospital, nursing and nursing 
 97.17  home care and medicine and medical supplies under all programs 
 97.18  of medical care provided by the state and for congregate living 
 97.19  care under the income maintenance programs. 
 97.20     (12) Have the authority to conduct and administer 
 97.21  experimental projects to test methods and procedures of 
 97.22  administering assistance and services to recipients or potential 
 97.23  recipients of public welfare.  To carry out such experimental 
 97.24  projects, it is further provided that the commissioner of human 
 97.25  services is authorized to waive the enforcement of existing 
 97.26  specific statutory program requirements, rules, and standards in 
 97.27  one or more counties.  The order establishing the waiver shall 
 97.28  provide alternative methods and procedures of administration, 
 97.29  shall not be in conflict with the basic purposes, coverage, or 
 97.30  benefits provided by law, and in no event shall the duration of 
 97.31  a project exceed four years.  It is further provided that no 
 97.32  order establishing an experimental project as authorized by the 
 97.33  provisions of this section shall become effective until the 
 97.34  following conditions have been met: 
 97.35     (a) The proposed comprehensive plan, including estimated 
 97.36  project costs and the proposed order establishing the waiver, 
 98.1   shall be filed with the secretary of the senate and chief clerk 
 98.2   of the house of representatives at least 60 days prior to its 
 98.3   effective date. 
 98.4      (b) The secretary of health, education, and welfare of the 
 98.5   United States has agreed, for the same project, to waive state 
 98.6   plan requirements relative to statewide uniformity. 
 98.7      (c) A comprehensive plan, including estimated project 
 98.8   costs, shall be approved by the legislative advisory commission 
 98.9   and filed with the commissioner of administration.  
 98.10     (13) In accordance with federal requirements, establish 
 98.11  procedures to be followed by local welfare boards in creating 
 98.12  citizen advisory committees, including procedures for selection 
 98.13  of committee members. 
 98.14     (14) Allocate federal fiscal disallowances or sanctions 
 98.15  which are based on quality control error rates for the aid to 
 98.16  families with dependent children, medical assistance, or food 
 98.17  stamp program in the following manner:  
 98.18     (a) One-half of the total amount of the disallowance shall 
 98.19  be borne by the county boards responsible for administering the 
 98.20  programs.  For the medical assistance and AFDC programs, 
 98.21  disallowances shall be shared by each county board in the same 
 98.22  proportion as that county's expenditures for the sanctioned 
 98.23  program are to the total of all counties' expenditures for the 
 98.24  AFDC and medical assistance programs.  For the food stamp 
 98.25  program, sanctions shall be shared by each county board, with 50 
 98.26  percent of the sanction being distributed to each county in the 
 98.27  same proportion as that county's administrative costs for food 
 98.28  stamps are to the total of all food stamp administrative costs 
 98.29  for all counties, and 50 percent of the sanctions being 
 98.30  distributed to each county in the same proportion as that 
 98.31  county's value of food stamp benefits issued are to the total of 
 98.32  all benefits issued for all counties.  Each county shall pay its 
 98.33  share of the disallowance to the state of Minnesota.  When a 
 98.34  county fails to pay the amount due hereunder, the commissioner 
 98.35  may deduct the amount from reimbursement otherwise due the 
 98.36  county, or the attorney general, upon the request of the 
 99.1   commissioner, may institute civil action to recover the amount 
 99.2   due. 
 99.3      (b) Notwithstanding the provisions of paragraph (a), if the 
 99.4   disallowance results from knowing noncompliance by one or more 
 99.5   counties with a specific program instruction, and that knowing 
 99.6   noncompliance is a matter of official county board record, the 
 99.7   commissioner may require payment or recover from the county or 
 99.8   counties, in the manner prescribed in paragraph (a), an amount 
 99.9   equal to the portion of the total disallowance which resulted 
 99.10  from the noncompliance, and may distribute the balance of the 
 99.11  disallowance according to paragraph (a).  
 99.12     (15) Develop and implement special projects that maximize 
 99.13  reimbursements and result in the recovery of money to the 
 99.14  state.  For the purpose of recovering state money, the 
 99.15  commissioner may enter into contracts with third parties.  Any 
 99.16  recoveries that result from projects or contracts entered into 
 99.17  under this paragraph shall be deposited in the state treasury 
 99.18  and credited to a special account until the balance in the 
 99.19  account reaches $1,000,000.  When the balance in the account 
 99.20  exceeds $1,000,000, the excess shall be transferred and credited 
 99.21  to the general fund.  All money in the account is appropriated 
 99.22  to the commissioner for the purposes of this paragraph. 
 99.23     (16) Have the authority to make direct payments to 
 99.24  facilities providing shelter to women and their children 
 99.25  pursuant to section 256D.05, subdivision 3.  Upon the written 
 99.26  request of a shelter facility that has been denied payments 
 99.27  under section 256D.05, subdivision 3, the commissioner shall 
 99.28  review all relevant evidence and make a determination within 30 
 99.29  days of the request for review regarding issuance of direct 
 99.30  payments to the shelter facility.  Failure to act within 30 days 
 99.31  shall be considered a determination not to issue direct payments.
 99.32     (17) Have the authority to establish and enforce the 
 99.33  following county reporting requirements:  
 99.34     (a) The commissioner shall establish fiscal and statistical 
 99.35  reporting requirements necessary to account for the expenditure 
 99.36  of funds allocated to counties for human services programs.  
100.1   When establishing financial and statistical reporting 
100.2   requirements, the commissioner shall evaluate all reports, in 
100.3   consultation with the counties, to determine if the reports can 
100.4   be simplified or the number of reports can be reduced. 
100.5      (b) The county board shall submit monthly or quarterly 
100.6   reports to the department as required by the commissioner.  
100.7   Monthly reports are due no later than 15 working days after the 
100.8   end of the month.  Quarterly reports are due no later than 30 
100.9   calendar days after the end of the quarter, unless the 
100.10  commissioner determines that the deadline must be shortened to 
100.11  20 calendar days to avoid jeopardizing compliance with federal 
100.12  deadlines or risking a loss of federal funding.  Only reports 
100.13  that are complete, legible, and in the required format shall be 
100.14  accepted by the commissioner.  
100.15     (c) If the required reports are not received by the 
100.16  deadlines established in clause (b), the commissioner may delay 
100.17  payments and withhold funds from the county board until the next 
100.18  reporting period.  When the report is needed to account for the 
100.19  use of federal funds and the late report results in a reduction 
100.20  in federal funding, the commissioner shall withhold from the 
100.21  county boards with late reports an amount equal to the reduction 
100.22  in federal funding until full federal funding is received.  
100.23     (d) A county board that submits reports that are late, 
100.24  illegible, incomplete, or not in the required format for two out 
100.25  of three consecutive reporting periods is considered 
100.26  noncompliant.  When a county board is found to be noncompliant, 
100.27  the commissioner shall notify the county board of the reason the 
100.28  county board is considered noncompliant and request that the 
100.29  county board develop a corrective action plan stating how the 
100.30  county board plans to correct the problem.  The corrective 
100.31  action plan must be submitted to the commissioner within 45 days 
100.32  after the date the county board received notice of noncompliance.
100.33     (e) The final deadline for fiscal reports or amendments to 
100.34  fiscal reports is one year after the date the report was 
100.35  originally due.  If the commissioner does not receive a report 
100.36  by the final deadline, the county board forfeits the funding 
101.1   associated with the report for that reporting period and the 
101.2   county board must repay any funds associated with the report 
101.3   received for that reporting period. 
101.4      (f) The commissioner may not delay payments, withhold 
101.5   funds, or require repayment under paragraph (c) or (e) if the 
101.6   county demonstrates that the commissioner failed to provide 
101.7   appropriate forms, guidelines, and technical assistance to 
101.8   enable the county to comply with the requirements.  If the 
101.9   county board disagrees with an action taken by the commissioner 
101.10  under paragraph (c) or (e), the county board may appeal the 
101.11  action according to sections 14.57 to 14.69. 
101.12     (g) Counties subject to withholding of funds under 
101.13  paragraph (c) or forfeiture or repayment of funds under 
101.14  paragraph (e) shall not reduce or withhold benefits or services 
101.15  to clients to cover costs incurred due to actions taken by the 
101.16  commissioner under paragraph (c) or (e). 
101.17     (18) Allocate federal fiscal disallowances or sanctions for 
101.18  audit exceptions when federal fiscal disallowances or sanctions 
101.19  are based on a statewide random sample for the foster care 
101.20  program under title IV-E of the Social Security Act, United 
101.21  States Code, title 42, in direct proportion to each county's 
101.22  title IV-E foster care maintenance claim for that period. 
101.23     (19) Have the authority to administer a drug rebate program 
101.24  for drugs purchased pursuant to the senior citizen drug program 
101.25  established under section 256.955 after the beneficiary's 
101.26  satisfaction of any deductible established in the program.  The 
101.27  commissioner shall require a rebate agreement from all 
101.28  manufacturers of covered drugs as defined in section 256B.0625, 
101.29  subdivision 13.  For each drug, the amount of the rebate shall 
101.30  be equal to the basic rebate as defined for purposes of the 
101.31  federal rebate program in United States Code, title 42, section 
101.32  1396r-8(c)(1).  This basic rebate shall be applied to 
101.33  single-source and multiple-source drugs.  The manufacturers must 
101.34  provide full payment within 30 days of receipt of the state 
101.35  invoice for the rebate within the terms and conditions used for 
101.36  the federal rebate program established pursuant to section 1927 
102.1   of title XIX of the Social Security Act.  The manufacturers must 
102.2   provide the commissioner with any information necessary to 
102.3   verify the rebate determined per drug.  The rebate program shall 
102.4   utilize the terms and conditions used for the federal rebate 
102.5   program established pursuant to section 1927 of title XIX of the 
102.6   Social Security Act. 
102.7      Sec. 2.  [256.955] [SENIOR CITIZEN DRUG PROGRAM.] 
102.8      Subdivision 1.  [ESTABLISHMENT.] The commissioner of human 
102.9   services shall establish and administer a senior citizen drug 
102.10  program.  Qualified senior citizens shall be eligible for 
102.11  prescription drug coverage under the program beginning no later 
102.12  than January 1, 1999. 
102.13     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
102.14  the following definitions apply. 
102.15     (b) "Health plan" has the meaning provided in section 
102.16  62Q.01, subdivision 3. 
102.17     (c) "Health plan company" has the meaning provided in 
102.18  section 62Q.01, subdivision 4. 
102.19     (d) "Qualified senior citizen" means an individual age 65 
102.20  or older who: 
102.21     (1) is eligible as a qualified Medicare beneficiary 
102.22  according to section 256B.057, subdivision 3 or 3a, or is 
102.23  eligible under section 256B.057, subdivision 3 or 3a, and is 
102.24  also eligible for medical assistance or general assistance 
102.25  medical care with a spenddown as defined in section 256B.056, 
102.26  subdivision 5.  Persons who are determined eligible for medical 
102.27  assistance according to section 256B.0575, who are eligible for 
102.28  medical assistance or general assistance medical care without a 
102.29  spenddown, or who are enrolled in MinnesotaCare, are not 
102.30  eligible for this program; 
102.31     (2) is not enrolled in prescription drug coverage under a 
102.32  health plan; 
102.33     (3) is not enrolled in prescription drug coverage under a 
102.34  Medicare supplement plan, as defined in sections 62A.31 to 
102.35  62A.44, or policies, contracts, or certificates that supplement 
102.36  Medicare issued by health maintenance organizations or those 
103.1   policies, contracts, or certificates governed by section 1833 or 
103.2   1876 of the federal Social Security Act, United States Code, 
103.3   title 42, section 1395, et seq., as amended; 
103.4      (4) has not had coverage described in clauses (2) and (3) 
103.5   for at least four months prior to application for the program; 
103.6   and 
103.7      (5) is a permanent resident of Minnesota as defined in 
103.8   section 256.9359. 
103.9      Subd. 3.  [PRESCRIPTION DRUG COVERAGE.] Coverage under the 
103.10  program is limited to prescription drugs covered under the 
103.11  medical assistance program as described in section 256B.0625, 
103.12  subdivision 13, subject to a maximum deductible of $300 
103.13  annually, except drugs cleared by the FDA shall be available to 
103.14  qualified senior citizens enrolled in the program without 
103.15  restriction when prescribed for medically accepted indication as 
103.16  defined in the federal rebate program under section 1927 of 
103.17  title XIX of the federal Social Security Act. 
103.18     Subd. 4.  [APPLICATION PROCEDURES AND COORDINATION WITH 
103.19  MEDICAL ASSISTANCE.] Applications and information on the program 
103.20  must be made available at county social service agencies, health 
103.21  care provider offices, and agencies and organizations serving 
103.22  senior citizens.  Senior citizens shall submit applications and 
103.23  any information specified by the commissioner as being necessary 
103.24  to verify eligibility directly to the county social service 
103.25  agencies:  
103.26     (1) beginning January 1, 1999, the county social service 
103.27  agency shall determine medical assistance spenddown eligibility 
103.28  of individuals who qualify for the senior citizen drug program 
103.29  of individuals; and 
103.30     (2) program payments will be used to reduce the spenddown 
103.31  obligations of individuals who are determined to be eligible for 
103.32  medical assistance with a spenddown as defined in section 
103.33  256B.056, subdivision 5. 
103.34  Seniors who are eligible for medical assistance with a spenddown 
103.35  shall be financially responsible for the deductible amount up to 
103.36  the satisfaction of the spenddown.  No deductible applies once 
104.1   the spenddown has been met.  Payments to providers for 
104.2   prescription drugs for persons eligible under this subdivision 
104.3   shall be reduced by the deductible.  
104.4      County social service agencies shall determine an 
104.5   applicant's eligibility for the program within 30 days from the 
104.6   date the application is received. 
104.7      Subd. 5.  [DRUG UTILIZATION REVIEW PROGRAM.] The 
104.8   commissioner shall utilize the drug utilization review program 
104.9   as described in section 256B.0625, subdivision 13a.  
104.10     Subd. 6.  [PHARMACY REIMBURSEMENT.] The commissioner shall 
104.11  reimburse participating pharmacies for drug and dispensing costs 
104.12  at the medical assistance reimbursement level, minus the 
104.13  deductible required under subdivision 7. 
104.14     Subd. 7.  [COST SHARING.] (a) Enrollees shall pay an annual 
104.15  premium of $120.  
104.16     (b) Program enrollees must satisfy a $300 annual 
104.17  deductible, based upon expenditures for prescription drugs, to 
104.18  be paid as follows: 
104.19     (1) $25 monthly deductible for persons with a monthly 
104.20  spenddown; or 
104.21     (2) $150 biannual deductible for persons with a six-month 
104.22  spenddown.  
104.23  The commissioner may adjust the annual deductible amount to stay 
104.24  within the program's appropriation. 
104.25     Subd. 8.  [REPORT.] The commissioner shall annually report 
104.26  to the legislature on the senior citizen drug program.  The 
104.27  report must include demographic information on enrollees, 
104.28  per-prescription expenditures, total program expenditures, 
104.29  hospital and nursing home costs avoided by enrollees, any 
104.30  savings to medical assistance and Medicare resulting from the 
104.31  provision of prescription drug coverage under Medicare by health 
104.32  maintenance organizations, other public and private options for 
104.33  drug assistance to the senior population, any hardships caused 
104.34  by the annual premium and deductible, and any recommendations 
104.35  for changes in the senior drug program. 
104.36     Subd. 9.  [PROGRAM LIMITATION.] This section shall be 
105.1   repealed upon federal approval of the waiver to allow the 
105.2   commissioner to provide prescription drug coverage for qualified 
105.3   Medicare beneficiaries whose income is less than 150 percent of 
105.4   the federal poverty guidelines. 
105.5      Sec. 3.  Minnesota Statutes 1996, section 256B.0625, 
105.6   subdivision 13, is amended to read: 
105.7      Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
105.8   except for fertility drugs when specifically used to enhance 
105.9   fertility, if prescribed by a licensed practitioner and 
105.10  dispensed by a licensed pharmacist, by a physician enrolled in 
105.11  the medical assistance program as a dispensing physician, or by 
105.12  a physician or a nurse practitioner employed by or under 
105.13  contract with a community health board as defined in section 
105.14  145A.02, subdivision 5, for the purposes of communicable disease 
105.15  control.  The commissioner, after receiving recommendations from 
105.16  professional medical associations and professional pharmacist 
105.17  associations, shall designate a formulary committee to advise 
105.18  the commissioner on the names of drugs for which payment is 
105.19  made, recommend a system for reimbursing providers on a set fee 
105.20  or charge basis rather than the present system, and develop 
105.21  methods encouraging use of generic drugs when they are less 
105.22  expensive and equally effective as trademark drugs.  The 
105.23  formulary committee shall consist of nine members, four of whom 
105.24  shall be physicians who are not employed by the department of 
105.25  human services, and a majority of whose practice is for persons 
105.26  paying privately or through health insurance, three of whom 
105.27  shall be pharmacists who are not employed by the department of 
105.28  human services, and a majority of whose practice is for persons 
105.29  paying privately or through health insurance, a consumer 
105.30  representative, and a nursing home representative.  Committee 
105.31  members shall serve three-year terms and shall serve without 
105.32  compensation.  Members may be reappointed once.  
105.33     (b) The commissioner shall establish a drug formulary.  Its 
105.34  establishment and publication shall not be subject to the 
105.35  requirements of the administrative procedure act, but the 
105.36  formulary committee shall review and comment on the formulary 
106.1   contents.  The formulary committee shall review and recommend 
106.2   drugs which require prior authorization.  The formulary 
106.3   committee may recommend drugs for prior authorization directly 
106.4   to the commissioner, as long as opportunity for public input is 
106.5   provided.  Prior authorization may be requested by the 
106.6   commissioner based on medical and clinical criteria before 
106.7   certain drugs are eligible for payment.  Before a drug may be 
106.8   considered for prior authorization at the request of the 
106.9   commissioner:  
106.10     (1) the drug formulary committee must develop criteria to 
106.11  be used for identifying drugs; the development of these criteria 
106.12  is not subject to the requirements of chapter 14, but the 
106.13  formulary committee shall provide opportunity for public input 
106.14  in developing criteria; 
106.15     (2) the drug formulary committee must hold a public forum 
106.16  and receive public comment for an additional 15 days; and 
106.17     (3) the commissioner must provide information to the 
106.18  formulary committee on the impact that placing the drug on prior 
106.19  authorization will have on the quality of patient care and 
106.20  information regarding whether the drug is subject to clinical 
106.21  abuse or misuse.  Prior authorization may be required by the 
106.22  commissioner before certain formulary drugs are eligible for 
106.23  payment.  The formulary shall not include:  
106.24     (i) drugs or products for which there is no federal 
106.25  funding; 
106.26     (ii) over-the-counter drugs, except for antacids, 
106.27  acetaminophen, family planning products, aspirin, insulin, 
106.28  products for the treatment of lice, vitamins for adults with 
106.29  documented vitamin deficiencies, and vitamins for children under 
106.30  the age of seven and pregnant or nursing women; 
106.31     (iii) any other over-the-counter drug identified by the 
106.32  commissioner, in consultation with the drug formulary committee, 
106.33  as necessary, appropriate, and cost-effective for the treatment 
106.34  of certain specified chronic diseases, conditions or disorders, 
106.35  and this determination shall not be subject to the requirements 
106.36  of chapter 14; 
107.1      (iv) anorectics; and 
107.2      (v) drugs for which medical value has not been established; 
107.3   and 
107.4      (vi) drugs from manufacturers who have not signed a rebate 
107.5   agreement with the Department of Health and Human Services 
107.6   pursuant to section 1927 of title XIX of the Social Security Act 
107.7   and who have not signed an agreement with the state for drugs 
107.8   purchased pursuant to the senior citizen drug program 
107.9   established under section 256.955. 
107.10     The commissioner shall publish conditions for prohibiting 
107.11  payment for specific drugs after considering the formulary 
107.12  committee's recommendations.  
107.13     (c) The basis for determining the amount of payment shall 
107.14  be the lower of the actual acquisition costs of the drugs plus a 
107.15  fixed dispensing fee; the maximum allowable cost set by the 
107.16  federal government or by the commissioner plus the fixed 
107.17  dispensing fee; or the usual and customary price charged to the 
107.18  public.  The pharmacy dispensing fee shall be $3.85.  Actual 
107.19  acquisition cost includes quantity and other special discounts 
107.20  except time and cash discounts.  The actual acquisition cost of 
107.21  a drug shall be estimated by the commissioner, at average 
107.22  wholesale price minus nine percent.  The maximum allowable cost 
107.23  of a multisource drug may be set by the commissioner and it 
107.24  shall be comparable to, but no higher than, the maximum amount 
107.25  paid by other third-party payors in this state who have maximum 
107.26  allowable cost programs.  Establishment of the amount of payment 
107.27  for drugs shall not be subject to the requirements of the 
107.28  administrative procedure act.  An additional dispensing fee of 
107.29  $.30 may be added to the dispensing fee paid to pharmacists for 
107.30  legend drug prescriptions dispensed to residents of long-term 
107.31  care facilities when a unit dose blister card system, approved 
107.32  by the department, is used.  Under this type of dispensing 
107.33  system, the pharmacist must dispense a 30-day supply of drug.  
107.34  The National Drug Code (NDC) from the drug container used to 
107.35  fill the blister card must be identified on the claim to the 
107.36  department.  The unit dose blister card containing the drug must 
108.1   meet the packaging standards set forth in Minnesota Rules, part 
108.2   6800.2700, that govern the return of unused drugs to the 
108.3   pharmacy for reuse.  The pharmacy provider will be required to 
108.4   credit the department for the actual acquisition cost of all 
108.5   unused drugs that are eligible for reuse.  Over-the-counter 
108.6   medications must be dispensed in the manufacturer's unopened 
108.7   package.  The commissioner may permit the drug clozapine to be 
108.8   dispensed in a quantity that is less than a 30-day supply.  
108.9   Whenever a generically equivalent product is available, payment 
108.10  shall be on the basis of the actual acquisition cost of the 
108.11  generic drug, unless the prescriber specifically indicates 
108.12  "dispense as written - brand necessary" on the prescription as 
108.13  required by section 151.21, subdivision 2. 
108.14     Sec. 4.  [SENIOR DRUG PROGRAM.] 
108.15     The commissioner shall administer the senior drug program 
108.16  so that the costs to the state total no more than $4,000,000 
108.17  plus the amount of the rebate.  The commissioner is authorized 
108.18  to discontinue enrollment in order to meet this level of funding.
108.19     The commissioner shall report to the legislature the 
108.20  estimated costs of the senior drug program without funding 
108.21  caps.  The report shall be included as part of the November and 
108.22  February forecasts. 
108.23     The commissioner of finance shall annually reimburse the 
108.24  general fund with health care access funds for the estimated 
108.25  increased costs in the QMB/SLMB program directly associated with 
108.26  the senior drug program.  This reimbursement shall sunset June 
108.27  30, 2001. 
108.28     Sec. 5.  [STUDY ON DUAL PRESCRIPTION DRUG COVERAGE.] 
108.29     The commissioner of human services shall study the 
108.30  implications to the senior citizen drug program if a health plan 
108.31  company offers within the state a product that provides a 
108.32  prescription drug benefit as part of the standard coverage for 
108.33  Medicare enrollees and shall make recommendations on how to 
108.34  address this issue to the legislature by January 15, 1998. 
108.35                             ARTICLE 5 
108.36                 COMMUNITY PURCHASING ARRANGEMENTS 
109.1      Section 1.  [62S.01] [DEFINITIONS.] 
109.2      Subdivision 1.  [SCOPE.] For purposes of this chapter, the 
109.3   terms in this section have the meanings given. 
109.4      Subd. 2.  [HEALTH CARE PURCHASING ALLIANCE.] "Health care 
109.5   purchasing alliance" means a business organization created under 
109.6   this chapter to negotiate the purchase of health care services 
109.7   for employers.  Nothing in this chapter shall be deemed to 
109.8   regulate or impose any requirements on a self-insured employer 
109.9   or labor union.  A health care purchasing alliance may include a 
109.10  grouping of: 
109.11     (1) businesses, including small businesses with one 
109.12  employee.  The businesses may or may not be organized under 
109.13  section 62Q.17, as a purchasing pool; 
109.14     (2) trade association members or church organizations under 
109.15  section 60A.02, or union members who are not in a self-insured 
109.16  benefit plan; 
109.17     (3) multiple employer welfare associations under chapter 
109.18  62H; 
109.19     (4) municipalities, townships, or counties; 
109.20     (5) other government entities; or 
109.21     (6) any combination of clauses (1) to (5). 
109.22     The alliance may determine the definition of a business of 
109.23  one employee, but must adhere to its definition and show no bias 
109.24  in selection of members, based on that definition. 
109.25     Subd. 3.  [ACCOUNTABLE PROVIDER NETWORK.] "Accountable 
109.26  provider network" means a group of health care providers 
109.27  organized to market health care services on a risk-sharing or 
109.28  nonrisk-sharing basis with a health care purchasing alliance.  
109.29  Accountable provider networks shall operate as not-for-profit 
109.30  entities or as health care cooperatives, as allowed under 
109.31  chapter 62R.  This chapter applies only when an accountable 
109.32  provider network is marketing and selling services and benefits 
109.33  to the employees of businesses as authorized in section 62S.04. 
109.34     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
109.35  commissioner of health. 
109.36     Sec. 2.  [62S.015] [PURCHASING ALLIANCES.] 
110.1      Subdivision 1.  [REGISTRATION.] Purchasing alliances must 
110.2   register prior to offering coverage, and annually on July 1 
110.3   thereafter, with the commissioner on a form prescribed by the 
110.4   commissioner.  
110.5      Subd. 2.  [COMMON FACTORS.] All participants in a 
110.6   purchasing alliance must live within a common geographic region, 
110.7   be employed in a similar occupation, or share some other common 
110.8   factor as approved by the commissioner.  The membership criteria 
110.9   must not be designed to include disproportionately employers, 
110.10  groups, or individuals likely to have low costs of health 
110.11  coverage, or to exclude disproportionately employers, groups, or 
110.12  individuals likely to have high costs of health coverage. 
110.13     Sec. 3.  [62S.02] [APPLICATION OF OTHER LAWS.] 
110.14     An accountable provider network is subject to all 
110.15  requirements applicable to a health plan company licensed in the 
110.16  state, except as otherwise noted in this chapter.  An 
110.17  accountable provider network and a health care purchasing 
110.18  alliance must comply with all requirements of chapter 62L.  A 
110.19  contracting arrangement between a health care purchasing 
110.20  alliance and an accountable provider network for provision of 
110.21  health care benefits must provide consumer protection functions 
110.22  comparable to those currently required of a health plan company 
110.23  licensed under section 62N.25, and other statutes referenced in 
110.24  that section, except for modifications and waivers permitted 
110.25  under this chapter. 
110.26     Sec. 4.  [62S.03] [COMPLAINT SYSTEM.] 
110.27     Accountable provider networks must establish and maintain 
110.28  an enrollee complaint system as required under section 62Q.105.  
110.29  The accountable provider network may contract with the health 
110.30  care purchasing alliance or a vendor for operation of this 
110.31  system. 
110.32     Sec. 5.  [62S.04] [BENEFITS.] 
110.33     An accountable provider network may offer and sell any 
110.34  benefits permitted to be offered and sold by health plan 
110.35  companies under Minnesota law. 
110.36     Sec. 6.  [62S.05] [WAIVERS.] 
111.1      Subdivision 1.  [AUTHORIZATION.] The commissioner may grant 
111.2   waivers from the requirements of law for the contracting 
111.3   arrangement between a health care purchasing alliance and an 
111.4   accountable provider network in the areas listed in subdivisions 
111.5   2 to 4.  The commissioner may not waive the following state 
111.6   consumer protection and quality assurance laws:  
111.7      (1) laws requiring that enrollees be informed of any 
111.8   restrictions, requirements, or limitations on coverage, 
111.9   services, or access to specialists and other providers; 
111.10     (2) laws allowing consumers to complain to or appeal to a 
111.11  state regulatory agency if denied benefits or services; 
111.12     (3) laws prohibiting gag clauses and other restrictions on 
111.13  communication between a patient and their physician or provider; 
111.14     (4) laws allowing consumers to obtain information on 
111.15  provider financial incentives, which may affect treatment; 
111.16     (5) laws requiring the submission of information needed to 
111.17  monitor quality of care and enrollee rights; 
111.18     (6) laws protecting enrollee privacy and confidentiality of 
111.19  records; 
111.20     (7) minimum standards for adequate provider network 
111.21  capacity and geographic access to services; 
111.22     (8) laws assuring continuity of care when a patient must 
111.23  change providers; 
111.24     (9) laws governing coverage of emergency services; 
111.25     (10) laws prohibiting excessive or unreasonable 
111.26  administrative fees or expenses; and 
111.27     (11) other laws or rules that are directly related to 
111.28  quality of care, consumer protection, and due process rights. 
111.29     Subd. 2.  [SOLVENCY PROTECTION.] (a) The commissioner may 
111.30  waive the requirements of sections 62N.27 to 62N.32, and may 
111.31  substitute capital and surplus requirements that are reduced 
111.32  from the levels required of other risk-bearing entities in order 
111.33  to reflect its reduced risk exposure.  If risk is being 
111.34  underwritten, the underwriter cannot have more than 25 percent 
111.35  of the representation on the governing board of the accountable 
111.36  provider network.  The reduced requirements must include at 
112.1   least the following levels of capital and surplus:  (i) a 
112.2   deposit of $500,000 plus (ii) the greater of an estimated 15 
112.3   percent of gross premium revenues or twice the net retained 
112.4   annual risk up to $750,000 on a single enrollee.  Net retained 
112.5   annual risk may be, for example, the lowest annual deductible 
112.6   under a provider stop-loss insurance policy that covers all 
112.7   costs above the deductible.  Assets supporting the deposit must 
112.8   meet the standards for deposits referenced in section 62N.32.  
112.9   Assets supporting the capital must meet the investment 
112.10  guidelines referenced in section 62N.27. 
112.11     (b) An accountable provider network may propose a method of 
112.12  reporting income, expenses, claims payments, and other financial 
112.13  information in a manner which adequately demonstrates ongoing 
112.14  compliance with the standards for capital, surplus, and claims 
112.15  reserves agreed to under this waiver. 
112.16     (c) An accountable provider network may demonstrate ability 
112.17  to continue to deliver the contracted health care services to 
112.18  the purchasing alliance through arrangements which ensure that, 
112.19  subject to 60 days' notice of intent to discontinue the 
112.20  contracting arrangement, provider participants will continue to 
112.21  meet their obligation to provide health care services to 
112.22  enrollees for a period of 60 days. 
112.23     Subd. 3.  [MARKETING AND DISCLOSURE.] The accountable 
112.24  provider network, in conjunction with the health care purchasing 
112.25  alliance, may propose alternative methods to present marketing 
112.26  and disclosure information which assure the accountability to 
112.27  consumers who are offered and who receive their services. 
112.28     Subd. 4.  [QUALITY ASSURANCE.] The accountable provider 
112.29  network may propose an alternative quality assurance program 
112.30  which incorporates effective methods for reviewing and 
112.31  evaluating data related to quality of care and ways to identify 
112.32  and correct quality problems. 
112.33     Sec. 7.  [62S.06] [CRITERIA FOR GRANTING WAIVERS.] 
112.34     The commissioner may approve a request for waiver under 
112.35  section 62S.05 if the applicant demonstrates that the 
112.36  contracting arrangement between a health care purchasing 
113.1   alliance and an accountable provider network will meet the 
113.2   following criteria: 
113.3      (a) The arrangement would be likely to result in: 
113.4      (1) more choice in benefits and prices; 
113.5      (2) lower costs; 
113.6      (3) increased access to health care coverage by small 
113.7   businesses; 
113.8      (4) increased access to providers who have demonstrated a 
113.9   long-term commitment to the community being serviced; or 
113.10     (5) increased quality of health care than would otherwise 
113.11  occur under the existing market conditions.  In the event that a 
113.12  proposed arrangement appears likely to improve one or two of the 
113.13  criteria at the expense of another one or two of the criteria, 
113.14  the commissioner shall not approve the waiver. 
113.15     (b) The proposed alternative methods would provide equal or 
113.16  improved results in consumer protection than would result under 
113.17  the existing consumer protections requirements. 
113.18     Sec. 8.  [62S.07] [SUPERVISION AND REVOCATION OF WAIVERS.] 
113.19     (a) The commissioner shall appropriately supervise and 
113.20  monitor approved waivers. 
113.21     (b) The commissioner may revoke approval of a waiver if the 
113.22  contracting arrangement no longer satisfies the criteria in 
113.23  section 62S.06, paragraphs (a) and (b). 
113.24     Sec. 9.  [62S.08] [MINNESOTA COMPREHENSIVE HEALTH 
113.25  ASSOCIATION.] 
113.26     A health care purchasing alliance must pay the assessment 
113.27  required of contributing members pursuant to section 62E.11. 
113.28     Sec. 10.  [62S.09] [MINNESOTACARE TAX.] 
113.29     An accountable provider network is subject to the premium 
113.30  tax established in section 60A.15 and must pay installments as 
113.31  described in section 60A.15, subdivision 1, paragraph (d). 
113.32     Sec. 11.  [62S.10] [DUTIES OF COMMISSIONER.] 
113.33     (a) By July 1, 1997, the commissioner shall make available 
113.34  application forms for licensure as an accountable provider 
113.35  network.  The accountable provider network may begin doing 
113.36  business after application has been approved. 
114.1      (b) Upon receipt of an application for a certificate of 
114.2   authority, the commissioner shall grant or deny licensure and 
114.3   waivers requested within 90 days of receipt of a complete 
114.4   application if all requirements are substantially met.  For a 
114.5   period of one year after the effective date of this chapter, the 
114.6   commissioner may approve up to five applications, none of which 
114.7   may be from health plan companies.  If no written response has 
114.8   been received within 90 days, the application is approved.  When 
114.9   the commissioner denies an application or waiver request, the 
114.10  commissioner shall notify the applicant in writing specifically 
114.11  stating the grounds for the denial and specific suggestions for 
114.12  how to remedy the denial.  The commissioner will entertain 
114.13  reconsiderations.  Within 90 days after the denial, the 
114.14  applicant may file a written request for an administrative 
114.15  hearing and review of the commissioner's determination.  The 
114.16  hearing is subject to judicial review as provided by chapter 14. 
114.17     (c) All monitoring, enforcement, and rulemaking powers 
114.18  available under chapter 62N are granted to the commissioner to 
114.19  assure continued compliance with provisions of this chapter. 
114.20     (d) The commissioner may contract with other entities as 
114.21  necessary to carry out the responsibilities in this chapter. 
114.22     Sec. 12.  [62S.11] [FEES.] 
114.23     Every accountable provider network subject to this chapter 
114.24  shall pay to the commissioner fees as prescribed by the 
114.25  commissioner pursuant to section 144.122.  The initial fees are: 
114.26     (1) filing an application for licensure, $500; 
114.27     (2) filing an amendment to a license, $90; 
114.28     (3) filing an annual report, $200; 
114.29     (4) filing of renewal of licensure based on a fee of $1,000 
114.30  per 1,000 enrollees, with renewal every three years; and 
114.31     (5) other filing fees as specified by rule. 
114.32     Sec. 13.  [62S.12] [ENROLLMENT.] 
114.33     An accountable provider network created under this chapter 
114.34  is limited to a maximum enrollment of 30,000 persons. 
114.35                             ARTICLE 6 
114.36             MINNESOTA COMPREHENSIVE HEALTH ASSOCIATION 
115.1      Section 1.  Minnesota Statutes 1996, section 62E.02, 
115.2   subdivision 13, is amended to read: 
115.3      Subd. 13.  [ELIGIBLE PERSON.] (a) "Eligible person" means 
115.4   an individual who: 
115.5      (1) is currently and has been a resident of Minnesota for 
115.6   the six months immediately preceding the date of receipt by the 
115.7   association or its writing carrier of a completed certificate of 
115.8   eligibility and who; 
115.9      (2) meets the enrollment requirements of section 62E.14; 
115.10  and 
115.11     (3) is not otherwise ineligible under this subdivision. 
115.12     (b) No individual is eligible for coverage under a 
115.13  qualified or a Medicare supplement plan issued by the 
115.14  association for whom a premium is paid or reimbursed by the 
115.15  medical assistance program or general assistance medical care 
115.16  program as of the first day of any term for which a premium 
115.17  amount is paid or reimbursed. 
115.18     Sec. 2.  Minnesota Statutes 1996, section 62E.02, 
115.19  subdivision 18, is amended to read: 
115.20     Subd. 18.  [WRITING CARRIER.] "Writing carrier" means the 
115.21  insurer or insurers, health maintenance organization or 
115.22  organizations, integrated service network or networks, and 
115.23  community integrated service network or networks, or other 
115.24  entity selected by the association and approved by the 
115.25  commissioner to administer the comprehensive health insurance 
115.26  plan. 
115.27     Sec. 3.  Minnesota Statutes 1996, section 62E.13, 
115.28  subdivision 2, is amended to read: 
115.29     Subd. 2.  The association may select policies and 
115.30  contracts, or parts thereof, submitted by a member or members of 
115.31  the association, or by the association or others, to develop 
115.32  specifications for bids from any members entity which wish 
115.33  wishes to be selected as a writing carrier to administer the 
115.34  state plan.  The selection of the writing carrier shall be based 
115.35  upon criteria including established by the board of directors of 
115.36  the association and approved by the commissioner.  The criteria 
116.1   shall outline specific qualifications that an entity must 
116.2   satisfy in order to be selected and, at a minimum, shall include 
116.3   the member's entity's proven ability to handle large group 
116.4   accident and health insurance cases, efficient claim paying 
116.5   capacity, and the estimate of total charges for administering 
116.6   the plan.  The association may select separate writing carriers 
116.7   for the two types of qualified plans, the qualified medicare 
116.8   supplement plan, and the health maintenance organization 
116.9   contract. 
116.10     Sec. 4.  Minnesota Statutes 1996, section 256B.056, 
116.11  subdivision 8, is amended to read: 
116.12     Subd. 8.  [COOPERATION.] To be eligible for medical 
116.13  assistance, applicants and recipients must cooperate with the 
116.14  state and local agency to identify potentially liable 
116.15  third-party payers and assist the state in obtaining third party 
116.16  payments, unless good cause for noncooperation is determined 
116.17  according to Code of Federal Regulations, title 42, part 
116.18  433.147.  "Cooperation" includes identifying any third party who 
116.19  may be liable for care and services provided under this chapter 
116.20  to the applicant, recipient, or any other family member for whom 
116.21  application is made and providing relevant information to assist 
116.22  the state in pursuing a potentially liable third party.  
116.23  Cooperation also includes providing information about a group 
116.24  health plan for which the person may be eligible and if the plan 
116.25  is determined cost-effective by the state agency and premiums 
116.26  are paid by the local agency or there is no cost to the 
116.27  recipient, they must enroll or remain enrolled with the group.  
116.28  For purposes of this subdivision, coverage provided by the 
116.29  Minnesota comprehensive health association under chapter 62E 
116.30  shall not be considered group health plan coverage or 
116.31  cost-effective by the state and local agency.  Cost-effective 
116.32  insurance premiums approved for payment by the state agency and 
116.33  paid by the local agency are eligible for reimbursement 
116.34  according to section 256B.19. 
116.35     Sec. 5.  Minnesota Statutes 1996, section 256B.0625, 
116.36  subdivision 15, is amended to read: 
117.1      Subd. 15.  [HEALTH PLAN PREMIUMS AND COPAYMENTS.] (a) 
117.2   Medical assistance covers health care prepayment plan premiums, 
117.3   insurance premiums, and copayments if determined to be 
117.4   cost-effective by the commissioner.  For purposes of obtaining 
117.5   Medicare part A and part B, and copayments, expenditures may be 
117.6   made even if federal funding is not available. 
117.7      (b) Effective for all premiums due on or after June 30, 
117.8   1997, medical assistance does not cover premiums that a 
117.9   recipient is required to pay under a qualified or Medicare 
117.10  supplement plan issued by the Minnesota comprehensive health 
117.11  association.  Medical assistance shall continue to cover 
117.12  premiums for recipients who are covered under a plan issued by 
117.13  the Minnesota comprehensive health association on June 30, 1997, 
117.14  for a period of six months following receipt of the notice of 
117.15  termination or until December 31, 1997, whichever is later. 
117.16     Sec. 6.  Minnesota Statutes 1996, section 256D.03, 
117.17  subdivision 3b, is amended to read: 
117.18     Subd. 3b.  [COOPERATION.] (a) General assistance or general 
117.19  assistance medical care applicants and recipients must cooperate 
117.20  with the state and local agency to identify potentially liable 
117.21  third-party payors and assist the state in obtaining third-party 
117.22  payments.  Cooperation includes identifying any third party who 
117.23  may be liable for care and services provided under this chapter 
117.24  to the applicant, recipient, or any other family member for whom 
117.25  application is made and providing relevant information to assist 
117.26  the state in pursuing a potentially liable third party.  General 
117.27  assistance medical care applicants and recipients must cooperate 
117.28  by providing information about any group health plan in which 
117.29  they may be eligible to enroll.  They must cooperate with the 
117.30  state and local agency in determining if the plan is 
117.31  cost-effective.  For purposes of this subdivision, coverage 
117.32  provided by the Minnesota comprehensive health association under 
117.33  chapter 62E shall not be considered group health plan coverage 
117.34  or cost-effective by the state and local agency.  If the plan is 
117.35  determined cost-effective and the premium will be paid by the 
117.36  state or local agency or is available at no cost to the person, 
118.1   they must enroll or remain enrolled in the group health plan.  
118.2   Cost-effective insurance premiums approved for payment by the 
118.3   state agency and paid by the local agency are eligible for 
118.4   reimbursement according to subdivision 6. 
118.5      (b) Effective for all premiums due on or after June 30, 
118.6   1997, general assistance medical care does not cover premiums 
118.7   that a recipient is required to pay under a qualified or 
118.8   Medicare supplement plan issued by the Minnesota comprehensive 
118.9   health association.  General assistance medical care shall 
118.10  continue to cover premiums for recipients who are covered under 
118.11  a plan issued by the Minnesota comprehensive health association 
118.12  on June 30, 1997, for a period of six months following receipt 
118.13  of the notice of termination or until December 31, 1997, 
118.14  whichever is later. 
118.15     Sec. 7.  [MCHA TERMINATION NOTICE.] 
118.16     The Minnesota comprehensive health association, in 
118.17  consultation with the commissioner of human services, shall 
118.18  provide written notice to all persons whose coverage under the 
118.19  comprehensive health insurance plan terminates due to the change 
118.20  in policy described in Minnesota Statutes, sections 256B.056, 
118.21  subdivision 15, and 256D.03, subdivision 3b. 
118.22     The notice must include the following information: 
118.23     (1) the reason for termination; 
118.24     (2) a description of the eligibility requirements for the 
118.25  comprehensive health insurance plan; 
118.26     (3) a description of medical assistance and general 
118.27  assistance medical care eligibility categories; 
118.28     (4) a description of the participation requirement to the 
118.29  prepaid medical assistance program, prepaid general assistance 
118.30  medical care, and exemptions from participation due to 
118.31  disability as determined by the social security administration; 
118.32  and 
118.33     (5) a telephone number for the department of human services 
118.34  for specific questions regarding the medical assistance and 
118.35  general assistance medical care program. 
118.36     Notice must be given at least six months before coverage is 
119.1   terminated. 
119.2      The commissioner of human services shall release to the 
119.3   association any data necessary to provide the notice required in 
119.4   this section. 
119.5      Sec. 8.  [SUNSET.] 
119.6      The amendments made in this article to Minnesota Statutes, 
119.7   sections 62E.02, subdivision 13; 256B.056, subdivision 8; 
119.8   256B.0625, subdivision 15; and 256D.03, subdivision 3b, expire 
119.9   June 30, 1999. 
119.10     Sec. 9.  [EFFECTIVE DATE.] 
119.11     Sections 2 to 8 are effective the day following final 
119.12  enactment.  Section 1 is effective for coverage provided by the 
119.13  comprehensive health association on or after January 1, 1998, 
119.14  subject to the right to retain coverage for six months after 
119.15  receipt of notice of termination under sections 5 and 6. 
119.16                             ARTICLE 7
119.17                           APPROPRIATIONS
119.18  Section 1.  [APPROPRIATIONS; SUMMARY.] 
119.19     Except as otherwise provided in this act, the sums set 
119.20  forth in the columns designated "fiscal year 1998" and "fiscal 
119.21  year 1999" are appropriated from the general fund, or other 
119.22  named fund, to the agencies for the purposes specified in this 
119.23  act for the fiscal years ending June 30, 1998, and June 30, 1999.
119.24  Sec. 2.  APPROPRIATIONS 
119.25                          SUMMARY BY FUND
119.26                            1998          1999           TOTAL
119.27  Health Care 
119.28  Access Fund            $130,613,000  $161,364,000  $291,977,000
119.29  General Fund              1,357,000     6,127,000     7,484,000
119.30  State Government
119.31  Special Revenue Fund         21,000         37,000       58,000
119.32  Subdivision 1.  Department of Human 
119.33  Services 
119.34  Health Care
119.35  Access Fund              99,052,000   129,761,000   228,813,000
119.36  General Fund              1,357,000     6,127,000     7,484,000
119.37  [MEDICAL EDUCATION.] Of the fiscal year 
119.38  1998 health care access fund 
119.39  appropriation, $3,500,000 is for 
120.1   medical education research costs.  This 
120.2   appropriation, plus the federal 
120.3   financial participation amount shall be 
120.4   distributed to medical assistance 
120.5   providers according to the distribution 
120.6   methodology of the medical education 
120.7   research trust fund established under 
120.8   Minnesota Statutes, section 62J.69.  
120.9   Any unspent funds in this appropriation 
120.10  do not cancel but may carry forward and 
120.11  be available in fiscal year 1999. 
120.12  [GENERAL FUND APPROPRIATION.] The 
120.13  general fund appropriation is for costs 
120.14  associated with the senior drug 
120.15  program, the QMB/SLMB cost increases 
120.16  resulting from the senior drug program, 
120.17  and the discontinuation of the MCHA 
120.18  premium payments for MA and GAMC 
120.19  recipients.  The health care access 
120.20  fund shall reimburse the general fund 
120.21  for the QMB/SLMB cost and the GAMC and 
120.22  MA costs. 
120.23  [ADMINISTRATIVE COSTS.] Of the health 
120.24  care access appropriation, $342,000 in 
120.25  fiscal year 1998 and $1,536,000 in 
120.26  fiscal year 1999 is for administrative 
120.27  costs associated with moving parents 
120.28  and working adults GAMC into the 
120.29  MinnesotaCare program.  Of this 
120.30  appropriation, only $300,000 shall 
120.31  become part of the base for the fiscal 
120.32  2000-2001 biennium. 
120.33  [SERVICE CHARGES.] For fiscal years 
120.34  1998 and 1999, the department of human 
120.35  services is exempt from service charges 
120.36  imposed by other state agencies when 
120.37  those charges exceed the base 
120.38  appropriation provided to the 
120.39  department for the particular service. 
120.40  [DENTAL SERVICES REIMBURSEMENT 
120.41  INCREASE.] Notwithstanding statutory 
120.42  provisions to the contrary, the 
120.43  commissioner shall increase 
120.44  reimbursement rates by 15 percent for 
120.45  dental services covered under the 
120.46  MinnesotaCare program and rendered on 
120.47  or after July 1, 1997.  The 
120.48  commissioner shall increase the prepaid 
120.49  capitation rates as appropriate to 
120.50  reflect this rate increase.  
120.51  Notwithstanding section 5, this 
120.52  paragraph does not expire. 
120.53  [FEDERAL RECEIPTS FOR ADMINISTRATION.] 
120.54  Receipts received as a result of 
120.55  federal participation pertaining to 
120.56  administrative costs of the Minnesota 
120.57  Health Care Reform Waiver shall be 
120.58  deposited as a nondedicated revenue to 
120.59  the Health Care Access Fund, while 
120.60  receipts received as a result of 
120.61  federal participation pertaining to 
120.62  grants shall be deposited to the 
120.63  federal fund and shall offset health 
120.64  care access funds for payments to 
120.65  providers. 
121.1   [MINNESOTA OUTREACH.] Of the health 
121.2   care access fund appropriation, 
121.3   $750,000 each year shall be disbursed 
121.4   for grants to public and private 
121.5   organizations to provide outreach for 
121.6   the MinnesotaCare program in areas of 
121.7   the state with high uninsured 
121.8   populations. 
121.9   Subd. 2.  Department of Health 
121.10  Health Care 
121.11  Access Fund            10,653,000     12,248,000     22,901,000
121.12  State Government 
121.13  Special Revenue Fund       21,000         37,000         58,000
121.14  Health care access fund appropriations 
121.15  for student loan forgiveness programs 
121.16  for health care providers are available 
121.17  for either year of the biennium. 
121.18  [RURAL HOSPITAL CAPITAL GRANTS.] Of 
121.19  this appropriation, $3,000,000 in 
121.20  fiscal year 1998 and $4,500,000 in 
121.21  fiscal year 1999 shall be disbursed for 
121.22  rural hospital capital improvement 
121.23  grants or loans.  Any unspent funds may 
121.24  be used for rural hospital planning and 
121.25  transition grant programs.  This 
121.26  appropriation shall not become part of 
121.27  the base for the fiscal year 2000-2001 
121.28  biennium. 
121.29  [RURAL HOSPITAL DEMONSTRATION 
121.30  PROJECTS.] Of this appropriation, 
121.31  $300,000 in each fiscal year shall be 
121.32  disbursed for rural hospital 
121.33  demonstration projects.  This 
121.34  appropriation shall not become part of 
121.35  the base for the fiscal year 2000-2001 
121.36  biennium. 
121.37  [ADMINISTRATIVE COSTS.] The base for 
121.38  administrative costs shall be reduced 
121.39  by $450,000 for fiscal years 2000 and 
121.40  2001.  The commissioner shall examine 
121.41  general fund resources to replace this 
121.42  reduction. 
121.43  Subd. 3.  University of Minnesota 
121.44  Health Care 
121.45  Access Fund             2,537,000      2,537,000      5,074,000
121.46  [PRIMARY CARE EDUCATION INITIATIVES.] 
121.47  Of this appropriation, $180,000 in each 
121.48  fiscal year shall be disbursed to the 
121.49  board of regents for primary care 
121.50  physician education and training under 
121.51  Minnesota Statutes, sections 137.38 to 
121.52  137.40.  This appropriation is 
121.53  available only if matched by $1 for 
121.54  each $1 of the appropriation.  This 
121.55  appropriation is in addition to the 
121.56  current base appropriation for these 
121.57  activities and shall become part of the 
121.58  base appropriation for the fiscal year 
121.59  2000-2001 biennium. 
121.60  Subd. 4.  Department of Revenue 
122.1   Health Care 
122.2   Access Fund             3,121,000      1,668,000      4,789,000
122.3   [RESEARCH DEDUCTION.] Of this 
122.4   appropriation, $1,500,000 shall be 
122.5   disbursed in fiscal year 1998 to be 
122.6   used for research deduction claims 
122.7   filed by hospitals and health care 
122.8   providers under Minnesota Statutes, 
122.9   section 295.53, subdivision 4, for 
122.10  research expenditures incurred in 
122.11  calendar year 1996.  These claims must 
122.12  be filed by August 1, 1997, and the 
122.13  commissioner must pay the refund no 
122.14  later than October 1, 1997. 
122.15  Subd. 5.  Department of Commerce 
122.16  Health Care 
122.17  Access Fund            15,100,000     15,000,000     30,100,000
122.18  [MINNESOTA COMPREHENSIVE HEALTH 
122.19  ASSOCIATION ASSESSMENT OFFSET.] Of this 
122.20  appropriation, $15,000,000 in fiscal 
122.21  year 1998 and $15,000,000 in fiscal 
122.22  year 1999 is for a grant to the 
122.23  Minnesota Comprehensive Health 
122.24  Association and shall be made available 
122.25  on January 1 of each fiscal year to be 
122.26  used to offset the annual assessments 
122.27  for calendar years 1998 and 1999 that 
122.28  are required to be paid by each 
122.29  contributing member in accordance with 
122.30  Minnesota Statutes, section 62E.11.  
122.31  This appropriation shall not become 
122.32  part of the base for the fiscal year 
122.33  2000-2001 biennium. 
122.34  Subd. 6.  Legislative Coordinating 
122.35  Commission 
122.36  Health Care 
122.37  Access Fund               150,000        150,000        300,000
122.38  Sec. 3.  TRANSFERS 
122.39  $4,112,000 in fiscal year 1998 and 
122.40  $4,104,000 in fiscal year 1999 are 
122.41  transferred from the health care access 
122.42  fund to the general fund to replace the 
122.43  revenue lost due to the repeal of the 
122.44  $400 physician surcharge. 
122.45  Sec. 4.  CARRYOVER 
122.46  None of the appropriations in this act 
122.47  which are allowed to be carried forward 
122.48  from fiscal year 1998 to fiscal year 
122.49  1999 shall become part of the base 
122.50  level funding for the 2000-2001 
122.51  biennial budget, unless specifically 
122.52  directed by the legislature. 
122.53  Sec. 5.  SUNSET 
122.54  All uncodified language contained in 
122.55  this article expires on June 30, 1999, 
122.56  unless a different expiration is 
122.57  explicit. 
122.58                             ARTICLE 8 
123.1           HEALTH AND HUMAN SERVICES TECHNICAL CORRECTIONS
123.2      Section 1.  S. F. No. 1908, article 1, section 2, if 
123.3   enacted, is amended by adding a subdivision to read: 
123.4   Subd. 10a.  Visitation Access Funds 
123.5   [FEDERAL FUNDS FOR VISITATION ACCESS.] 
123.6   The commissioner may accept on behalf 
123.7   of the state any federal funding for 
123.8   the purpose of financing visitation 
123.9   access programs, and may expend these 
123.10  funds on services described in Public 
123.11  Law Number 104-193. 
123.12     Sec. 2.  S. F. No. 1908, article 1, section 3, subdivision 
123.13  2, if enacted, is amended to read: 
123.14  Subd. 2.  Health Systems
123.15  and Special Populations               48,517,000     48,233,000
123.16                Summary by Fund
123.17  General              39,295,000    38,998,000
123.18  State Government
123.19  Special Revenue       9,222,000     9,235,000
123.20  [FEES; DRUG AND ALCOHOL COUNSELOR 
123.21  LICENSE.] When setting fees for the 
123.22  drug and alcohol counselor license, the 
123.23  department is exempt from Minnesota 
123.24  Statutes, section 16A.1285, subdivision 
123.25  2. 
123.26  [STATE VITAL STATISTICS REDESIGN 
123.27  PROJECT ACCOUNT.] The amount 
123.28  appropriated from the state government 
123.29  special revenue fund for the vital 
123.30  records redesign project shall be 
123.31  available until expended for 
123.32  development and implementation. 
123.33  [WIC PROGRAM.] Of this appropriation, 
123.34  $650,000 in 1998 is provided to 
123.35  maintain services of the program, 
123.36  $700,000 in 1998 and $700,000 in 1999 
123.37  is added to the base level funding for 
123.38  the WIC food program in order to 
123.39  maintain the existing level of the 
123.40  program, and $100,000 in 1998 is for 
123.41  the commissioner to develop and 
123.42  implement an outreach program to 
123.43  apprise potential recipients of the WIC 
123.44  food program of the importance of good 
123.45  nutrition and the availability of the 
123.46  program. 
123.47  [WIC TRANSFERS.] General fund 
123.48  appropriations for the women, infants, 
123.49  and children (WIC) food supplement 
123.50  program are available for either year 
123.51  of the biennium.  Transfers of 
123.52  appropriations between fiscal years 
123.53  must be for the purpose of maximizing 
123.54  federal funds or minimizing 
123.55  fluctuations in the number of 
123.56  participants.  
124.1   [LOCAL PUBLIC HEALTH FINANCING.] Of the 
124.2   general fund appropriation, $5,000,000 
124.3   each year shall be disbursed for local 
124.4   public health financing and shall be 
124.5   distributed according to the community 
124.6   health service subsidy formula in 
124.7   Minnesota Statutes, section 145A.13.  
124.8   [MINNESOTA CHILDREN WITH SPECIAL HEALTH 
124.9   NEEDS CARRYOVER.] General fund 
124.10  appropriations for treatment services 
124.11  in the services for children with 
124.12  special health care needs program are 
124.13  available for either year of the 
124.14  biennium. 
124.15  [HEALTH CARE ASSISTANCE FOR DISABLED 
124.16  CHILDREN INELIGIBLE FOR SSI.] 
124.17  Notwithstanding the requirements of 
124.18  Minnesota Rules, part 4705.0100, 
124.19  subpart 14, children who:  (a) are 
124.20  eligible for medical assistance as of 
124.21  June 30, 1997, and become ineligible 
124.22  for medical assistance due to changes 
124.23  in supplemental security income 
124.24  disability standards for children 
124.25  enacted in (PRWORA) Public Law Number 
124.26  104-193; and (b) are not eligible for 
124.27  MinnesotaCare, are eligible for health 
124.28  care services through Minnesota 
124.29  services for children with special 
124.30  health care needs under Minnesota 
124.31  Rules, parts 4705.0100 to 4705.1600 for 
124.32  the fiscal year ending June 30, 1998, 
124.33  until eligibility for medical 
124.34  assistance is reestablished.  The 
124.35  commissioner of health shall report to 
124.36  the legislature by March 1, 1998, on 
124.37  the number of children eligible under 
124.38  this provision, their health care 
124.39  needs, family income as a percentage of 
124.40  the federal poverty level, the extent 
124.41  to which families have employer-based 
124.42  health coverage, and recommendations on 
124.43  how to meet the future needs of 
124.44  children eligible under this provision. 
124.45  [AMERICAN INDIAN DIABETES.] Of this 
124.46  appropriation, $90,000 each year shall 
124.47  be disbursed for a comprehensive 
124.48  school-based intervention program 
124.49  designed to reduce the risk factors 
124.50  associated with diabetes among American 
124.51  Indian school children in grades 1 
124.52  through 4. The appropriation for 1998 
124.53  may be carried forward to 1999.  The 
124.54  appropriation for fiscal year 1999 is 
124.55  available only if matched by $1 of 
124.56  nonstate money for each $1 of the 
124.57  appropriation and may be expended in 
124.58  either year of the biennium.  The 
124.59  commissioner shall convene an American 
124.60  Indian diabetes prevention advisory 
124.61  task force.  The task force must 
124.62  include representatives from the 
124.63  American Indian tribes located in the 
124.64  state and urban American Indian 
124.65  representatives.  The task force shall 
124.66  advise the commissioner on the 
124.67  adaptation of curricula and the 
124.68  dissemination of information designed 
125.1   to reduce the risk factors associated 
125.2   with diabetes among American Indian 
125.3   school children in grades 1 through 4.  
125.4   The curricula and information must be 
125.5   sensitive to traditional American 
125.6   Indian values and culture and must 
125.7   encourage full participation by the 
125.8   American Indian community. 
125.9   [HOME VISITING PROGRAMS.] (a) Of this 
125.10  appropriation, $140,000 in 1998 and 
125.11  $870,000 in 1999 is for the home 
125.12  visiting programs for infant care under 
125.13  Minnesota Statutes, section 145A.16.  
125.14  These amounts are available until June 
125.15  30, 1999. 
125.16  (b) Of this appropriation, $225,000 in 
125.17  1998 and $180,000 in 1999 is to 
125.18  continue funding the home visiting 
125.19  programs that received one-year funding 
125.20  under Laws 1995, chapter 480, article 
125.21  1, section 9.  This amount is available 
125.22  until expended. 
125.23  [FETAL ALCOHOL SYNDROME.] Of the 
125.24  general fund appropriation, $625,000 
125.25  each year of the biennium shall be 
125.26  disbursed to prevent and reduce harm 
125.27  from fetal alcohol syndrome and fetal 
125.28  alcohol effect.  
125.29  [COMPLAINT INVESTIGATIONS.] Of the 
125.30  appropriation, $127,000 each year from 
125.31  the state government special revenue 
125.32  fund, and $75,000 each year from the 
125.33  general fund, is for the commissioner 
125.34  to conduct complaint investigations of 
125.35  nursing facilities, hospitals and home 
125.36  health care providers. 
125.37  [COMPLEMENTARY MEDICINE STUDY.] (a) Of 
125.38  the general fund appropriation, $20,000 
125.39  in fiscal year 1998 shall be disbursed 
125.40  for the commissioner of health, in 
125.41  consultation with the commissioner of 
125.42  commerce, to conduct a study based on 
125.43  existing literature, information, and 
125.44  data on the scope of complementary 
125.45  medicine offered in this state.  The 
125.46  commissioner shall: 
125.47  (1) include the types of complementary 
125.48  medicine therapies available in this 
125.49  state; 
125.50  (2) contact national and state 
125.51  complementary medicine associations for 
125.52  literature, information, and data; 
125.53  (3) conduct a general literary review 
125.54  for information and data on 
125.55  complementary medicine; 
125.56  (4) contact the departments of commerce 
125.57  and human services for information on 
125.58  existing registrations, licenses, 
125.59  certificates, credentials, policies, 
125.60  and regulations; and 
125.61  (5) determine by sample, if 
126.1   complementary medicine is currently 
126.2   covered by health plan companies and 
126.3   the extent of the coverage. 
126.4   In conducting this review, the 
126.5   commissioner shall consult with the 
126.6   office of alternative medicine through 
126.7   the National Institute of Health. 
126.8   (b) The commissioner shall, in 
126.9   consultation with the advisory 
126.10  committee, report the study findings to 
126.11  the legislature by January 15, 1998.  
126.12  As part of the report, the commissioner 
126.13  shall make recommendations on whether 
126.14  the state should credential or regulate 
126.15  any of the complementary medicine 
126.16  providers. 
126.17  (c) The commissioner shall appoint an 
126.18  advisory committee to provide expertise 
126.19  and advice on the study.  The committee 
126.20  must include representation from the 
126.21  following groups:  health care 
126.22  providers, including providers of 
126.23  complementary medicine; health plan 
126.24  companies; and consumers.  The advisory 
126.25  committee is governed by Minnesota 
126.26  Statutes, section 15.059, for 
126.27  membership terms and removal of members.
126.28  (d) For purposes of this study, the 
126.29  term "complementary medicine" includes, 
126.30  but is not limited to, acupuncture, 
126.31  homeopathy, manual healing, 
126.32  macrobiotics, naturopathy, biofeedback, 
126.33  mind/body control therapies, 
126.34  traditional and ethnomedicine 
126.35  therapies, structural manipulations and 
126.36  energetic therapies, bioelectromagnetic 
126.37  therapies, and herbal medicine. 
126.38  [DOWN'S DOWN SYNDROME.] Of the general 
126.39  fund appropriation, $15,000 in fiscal 
126.40  year 1998 shall be disbursed for a 
126.41  grant to a nonprofit organization that 
126.42  provides support to individuals 
126.43  with Down's Down Syndrome and their 
126.44  families, for the purpose of providing 
126.45  all obstetricians, certified 
126.46  nurse-midwives, and family physicians 
126.47  licensed to practice in this state with 
126.48  informational packets on Down's Down 
126.49  Syndrome.  The packets must include, at 
126.50  a minimum, a fact sheet on Down's Down 
126.51  Syndrome, a list of counseling and 
126.52  support groups for families with 
126.53  children with Down's Down Syndrome, and 
126.54  a list of special needs adoption 
126.55  resources.  The informational packets 
126.56  must be made available to any pregnant 
126.57  patient who has tested positive 
126.58  for Down's Down Syndrome, either 
126.59  through a screening test or 
126.60  amniocentesis. 
126.61  [NEWBORN SCREENING FOR HEARING LOSS 
126.62  PROGRAM IMPLEMENTATION PLAN.] (a) Of 
126.63  the general fund appropriation, $18,000 
126.64  in fiscal year 1998 shall be disbursed 
126.65  to pay the costs of coordinating with 
127.1   hospitals, the medical community, 
127.2   audiologists, insurance companies, 
127.3   parents, and deaf and hard-of-hearing 
127.4   citizens to establish and implement a 
127.5   voluntary plan for hospitals and other 
127.6   health care facilities to screen all 
127.7   infants for hearing loss. 
127.8   (b) The plan to achieve universal 
127.9   screening of infants for hearing loss 
127.10  on a voluntary basis shall be 
127.11  formulated by a department work group, 
127.12  including the following representatives:
127.13  (1) a representative of the health 
127.14  insurance industry designated by the 
127.15  health insurance industry; 
127.16  (2) a representative of the Minnesota 
127.17  Hospital and Healthcare Partnership; 
127.18  (3) a total of two representatives from 
127.19  the following physician groups 
127.20  designated by the Minnesota Medical 
127.21  Association:  pediatrics, family 
127.22  practice, and ENT; 
127.23  (4) two audiologists designated by the 
127.24  Minnesota Speech-Language-Hearing 
127.25  Association and the Minnesota Academy 
127.26  of Audiology; 
127.27  (5) a representative of hospital 
127.28  neonatal nurseries; 
127.29  (6) a representative of part H (IDEA) 
127.30  early childhood special education; 
127.31  (7) the commissioner of health or a 
127.32  designee; 
127.33  (8) a representative of the department 
127.34  of human services; 
127.35  (9) a public health nurse; 
127.36  (10) a parent of a deaf or 
127.37  hard-of-hearing child; 
127.38  (11) a deaf or hard-of-hearing person; 
127.39  and 
127.40  (12) a representative of the Minnesota 
127.41  commission serving deaf and 
127.42  hard-of-hearing people. 
127.43  Members of the work group shall not 
127.44  collect a per diem or compensation as 
127.45  provided in Minnesota Statutes, section 
127.46  15.0575. 
127.47  (c) The plan shall include measurable 
127.48  goals and timetables for the 
127.49  achievement of universal screening of 
127.50  infants for hearing loss throughout the 
127.51  state and shall include the design and 
127.52  implementation of needed training to 
127.53  assist hospitals and other health care 
127.54  facilities screen infants for hearing 
127.55  loss according to recognized standards 
127.56  of care. 
128.1   (d) The work group shall report to the 
128.2   legislature by January 15, 1998, 
128.3   concerning progress toward the 
128.4   achievement of universal screening of 
128.5   infants in Minnesota for the purpose of 
128.6   assisting the legislature to determine 
128.7   whether this goal can be accomplished 
128.8   on a voluntary basis. 
128.9   [INFANT HEARING SCREENING PROGRAM.] Of 
128.10  the general fund appropriation, $25,000 
128.11  in fiscal year 1998 shall be disbursed 
128.12  for a grant to a hospital in Staples, 
128.13  Minnesota, for the infant hearing 
128.14  screening program. 
128.15  [NURSING HOMES DAMAGED BY FLOODS.] The 
128.16  commissioner shall conduct an expedited 
128.17  process under Minnesota Statutes, 
128.18  section 144A.073, solely to review 
128.19  nursing home moratorium exceptions 
128.20  necessary to repair or replace nursing 
128.21  facilities damaged by spring flooding 
128.22  in 1997.  The commissioner may not 
128.23  issue a request for proposals for 
128.24  moratorium projects not related to 
128.25  spring flooding until this expedited 
128.26  process is completed.  For facilities 
128.27  that require total replacement and the 
128.28  relocation of residents to other 
128.29  facilities during construction, the 
128.30  operating cost payment rates for the 
128.31  new facility shall be determined using 
128.32  the interim and settle-up payment 
128.33  provisions of Minnesota Rules, part 
128.34  9549.0057, and the reimbursement 
128.35  provisions of Minnesota Statutes, 
128.36  section 256B.431, except that 
128.37  subdivision 25 26, paragraphs (a) 
128.38  and (b), clause (3), and (d), shall not 
128.39  apply until the second rate year after 
128.40  the settle-up cost report is filed.  
128.41  Property-related reimbursement rates 
128.42  shall be determined under 
128.43  Minnesota Rules, chapter 9549 Statutes, 
128.44  section 256B.431, taking into account 
128.45  any federal or state flood-related 
128.46  loans or grants provided to a 
128.47  facility.  The medical assistance costs 
128.48  of this paragraph shall be paid from 
128.49  the amount made available in section 2 
128.50  of this article for moratorium 
128.51  exceptions.  This paragraph is 
128.52  effective the day following final 
128.53  enactment and is not subject to section 
128.54  13 of this article. 
128.55     Sec. 3.  Minnesota Statutes 1996, section 256B.0913, 
128.56  subdivision 16, as added by S. F. No. 1908, article 4, section 
128.57  39, if enacted, is amended to read: 
128.58     Subd. 16.  [CONVERSION OF ENROLLMENT.] Upon approval of the 
128.59  elderly waiver amendments described in section 42 41, persons 
128.60  currently receiving services shall have their eligibility for 
128.61  the elderly waiver program determined under section 256B.0915.  
129.1   Persons currently receiving alternative care services whose 
129.2   income is under the special income standard according to Code of 
129.3   Federal Regulations, title 42, section 435.236, who are eligible 
129.4   for the elderly waiver program shall be transferred to that 
129.5   program and shall receive priority access to elderly waiver 
129.6   slots for six months after implementation of this subdivision.  
129.7   Persons currently enrolled in the alternative care program who 
129.8   are not eligible for the elderly waiver program shall continue 
129.9   to be eligible for the alternative care program as long as 
129.10  continuous eligibility is maintained.  Continued eligibility for 
129.11  the alternative care program shall be reviewed every six 
129.12  months.  Persons who apply for the alternative care program 
129.13  after approval of the elderly waiver amendments in section 42 41 
129.14  are not eligible for alternative care if they would qualify for 
129.15  the elderly waiver, with or without a spenddown.  
129.16     Sec. 4.  S. F. No. 1908, article 4, section 70, if enacted, 
129.17  is amended to read: 
129.18     Sec. 70.  [WAIVER MODIFICATION.] 
129.19     The commissioner of human services shall seek federal 
129.20  approval for any modifications to the health care reform waiver 
129.21  necessary to implement the asset standard changes in sections 21 
129.22  to 23 22 to 24, and 28 73, paragraph (a).  
129.23     Sec. 5.  S. F. No. 1908, article 4, section 73, if enacted, 
129.24  is amended to read: 
129.25     Sec. 73.  [REPEALER.] 
129.26     (a) Minnesota Statutes 1996, sections 256B.057, 
129.27  subdivisions 2a and 2b; and 469.154, subdivision 6, are repealed.
129.28     (b) Minnesota Statutes 1996, section 256B.0625, subdivision 
129.29  13b, is repealed the day following final enactment. 
129.30     (c) Minnesota Rules, part parts 9505.1000 to 9505.1040, is 
129.31  are repealed. 
129.32     Sec. 6.  Minnesota Statutes 1996, section 256B.0911, 
129.33  subdivision 2, as amended by S. F. No. 1908, article 9, section 
129.34  10, if enacted, is amended to read: 
129.35     Subd. 2.  [PERSONS REQUIRED TO BE SCREENED; EXEMPTIONS.] 
129.36  All applicants to Medicaid certified nursing facilities must be 
130.1   screened prior to admission, regardless of income, assets, or 
130.2   funding sources, except the following: 
130.3      (1) patients who, having entered acute care facilities from 
130.4   certified nursing facilities, are returning to a certified 
130.5   nursing facility; 
130.6      (2) residents transferred from other certified nursing 
130.7   facilities located within the state of Minnesota; 
130.8      (3) individuals who have a contractual right to have their 
130.9   nursing facility care paid for indefinitely by the veteran's 
130.10  administration; 
130.11     (4) individuals who are enrolled in the Ebenezer/Group 
130.12  Health social health maintenance organization project, or 
130.13  enrolled in a demonstration project under section 256B.69, 
130.14  subdivision 18, at the time of application to a nursing home; 
130.15     (5) individuals previously screened and currently being 
130.16  served under the alternative care program or under a home and 
130.17  community-based services waiver authorized under section 1915(c) 
130.18  of the Social Security Act; or 
130.19     (6) individuals who are admitted to a certified nursing 
130.20  facility for a short-term stay, which, based upon a physician's 
130.21  certification, is expected to be 14 days or less in duration, 
130.22  and who have been screened and approved for nursing facility 
130.23  admission within the previous six months.  This exemption 
130.24  applies only if the screener determines at the time of the 
130.25  initial screening of the six-month period that it is appropriate 
130.26  to use the nursing facility for short-term stays and that there 
130.27  is an adequate plan of care for return to the home or 
130.28  community-based setting.  If a stay exceeds 14 days, the 
130.29  individual must be referred no later than the first county 
130.30  working day following the 14th resident day for a screening, 
130.31  which must be completed within five working days of the 
130.32  referral.  Payment limitations in subdivision 7 will apply to an 
130.33  individual found at screening to not meet the level of care 
130.34  criteria for admission to a certified nursing facility. 
130.35     Regardless of the exemptions in clauses (2) to (6), persons 
130.36  who have a diagnosis or possible diagnosis of mental illness, 
131.1   mental retardation, or a related condition must receive a 
131.2   preadmission screening before admission unless the admission 
131.3   prior to screening is authorized by the local mental health 
131.4   authority or the local developmental disabilities case manager, 
131.5   or unless authorized by the county agency according to Public 
131.6   Law Number 101-508. 
131.7      Before admission to a Medicaid certified nursing home or 
131.8   boarding care home, all persons must be screened and approved 
131.9   for admission through an assessment process.  The nursing 
131.10  facility is authorized to conduct case mix assessments which are 
131.11  not conducted by the county public health nurse under Minnesota 
131.12  Rules, part 9549.0059.  The designated county agency is 
131.13  responsible for distributing the quality assurance and review 
131.14  form for all new applicants to nursing homes. 
131.15     Other persons who are not applicants to nursing facilities 
131.16  must be screened if a request is made for a screening. 
131.17     Sec. 7.  S. F. No. 1908, article 9, section 24, if enacted, 
131.18  is amended to read: 
131.19     Sec. 24.  [EFFECTIVE DATE.] 
131.20     Section Sections 14 and 16, amending Minnesota Statutes 
131.21  1996, section 518.17, subdivision 1, is are effective the day 
131.22  following final enactment. 
131.23     Sec. 8.  [EFFECTIVE DATE.] 
131.24     Section 7 is effective the day following final enactment.