1.1                          A bill for an act
  1.2             relating to insurance; transferring regulatory 
  1.3             authority over health maintenance organizations and 
  1.4             similar entities to the commissioner of commerce; 
  1.5             making conforming changes; amending Minnesota Statutes 
  1.6             1998, sections 60B.02; 60B.03, subdivisions 2 and 4; 
  1.7             60B.15; 60B.20; 60G.01, subdivisions 2 and 4; 62A.61; 
  1.8             62D.01, subdivision 2; 62D.02, subdivision 3; 62D.03, 
  1.9             subdivisions 1, 3, and 4; 62D.04, subdivisions 1, 2, 
  1.10            4, and by adding a subdivision; 62D.05, subdivision 6; 
  1.11            62D.06, subdivision 2; 62D.07, subdivisions 2, 3, and 
  1.12            10; 62D.08, subdivisions 1, 2, 3, 4, and 5; 62D.09, 
  1.13            subdivisions 1 and 8; 62D.10, subdivision 4; 62D.11, 
  1.14            subdivisions 1b, 2, 3, and by adding a subdivision; 
  1.15            62D.12, subdivisions 1, 2, and 9; 62D.121, 
  1.16            subdivisions 3a and 7; 62D.14, subdivisions 1, 3, 4, 
  1.17            5, and 6; 62D.15, subdivisions 1 and 4; 62D.16, 
  1.18            subdivisions 1 and 2; 62D.17, subdivisions 1, 3, 4, 
  1.19            and 5; 62D.18, subdivisions 1 and 7; 62D.19; 62D.20, 
  1.20            subdivision 1; 62D.21; 62D.211; 62D.22, subdivisions 4 
  1.21            and 10; 62D.24; 62D.30, subdivisions 1 and 3; 62L.02, 
  1.22            subdivision 8; 62L.05, subdivision 12; 62L.08, 
  1.23            subdivisions 10 and 11; 62M.11; 62M.16; 62N.02, 
  1.24            subdivision 4; 62N.26; 62N.31, subdivision 1; 62Q.01, 
  1.25            subdivision 2; 62Q.07; 62Q.075, subdivision 4; 
  1.26            62Q.105, subdivisions 6 and 7; 62Q.11; 62Q.22, 
  1.27            subdivisions 2, 6, and 7; 62Q.32; 62Q.51, subdivision 
  1.28            3; 62Q.525, subdivision 3; 62R.04, subdivision 5; 
  1.29            62R.25; 62T.01, subdivision 4; and 72A.139, 
  1.30            subdivision 2; repealing Minnesota Statutes 1998, 
  1.31            sections 62D.18; 62L.11, subdivision 2; and 62Q.45, 
  1.32            subdivision 1. 
  1.33  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.34                             ARTICLE 1 
  1.35                  HEALTH MAINTENANCE ORGANIZATIONS 
  1.36     Section 1.  Minnesota Statutes 1998, section 62D.01, 
  1.37  subdivision 2, is amended to read: 
  1.38     Subd. 2.  (a) Faced with the continuation of mounting costs 
  1.39  of health care coupled with its inaccessibility to large 
  2.1   segments of the population, the legislature has determined that 
  2.2   there is a need to explore alternative methods for the delivery 
  2.3   of health care services, with a view toward achieving greater 
  2.4   efficiency and economy in providing these services. 
  2.5      (b) It is, therefore, the policy of the state to eliminate 
  2.6   the barriers to the organization, promotion, and expansion of 
  2.7   health maintenance organizations; to provide for their 
  2.8   regulation by the state commissioner of health commerce and the 
  2.9   state commissioner of health; and to exempt them from the 
  2.10  operation of the insurance and nonprofit health service plan 
  2.11  corporation laws of the state except as hereinafter provided. 
  2.12     (c) It is further the intention of the legislature to 
  2.13  closely monitor the development of health maintenance 
  2.14  organizations in order to assess their impact on the costs of 
  2.15  health care to consumers, the accessibility of health care to 
  2.16  consumers, and the quality of health care provided to consumers. 
  2.17     Sec. 2.  Minnesota Statutes 1998, section 62D.02, 
  2.18  subdivision 3, is amended to read: 
  2.19     Subd. 3.  "Commissioner of health commerce" or 
  2.20  "commissioner" means the state commissioner of health commerce 
  2.21  or a designee. 
  2.22     Sec. 3.  Minnesota Statutes 1998, section 62D.03, 
  2.23  subdivision 1, is amended to read: 
  2.24     Subdivision 1.  Notwithstanding any law of this state to 
  2.25  the contrary, any nonprofit corporation organized to do so or a 
  2.26  local governmental unit may apply to the commissioner of health 
  2.27  for a certificate of authority to establish and operate a health 
  2.28  maintenance organization in compliance with sections 62D.01 to 
  2.29  62D.30.  No person shall establish or operate a health 
  2.30  maintenance organization in this state, nor sell or offer to 
  2.31  sell, or solicit offers to purchase or receive advance or 
  2.32  periodic consideration in conjunction with a health maintenance 
  2.33  organization or health maintenance contract unless the 
  2.34  organization has a certificate of authority under sections 
  2.35  62D.01 to 62D.30. 
  2.36     Sec. 4.  Minnesota Statutes 1998, section 62D.03, 
  3.1   subdivision 3, is amended to read: 
  3.2      Subd. 3.  The commissioner of health may require any person 
  3.3   providing physician and hospital services with payments made in 
  3.4   the manner set forth in section 62D.02, subdivision 4, to apply 
  3.5   for a certificate of authority under sections 62D.01 to 62D.30.  
  3.6   An applicant may continue to operate until the commissioner of 
  3.7   health acts upon the application.  In the event that an 
  3.8   application is denied, the applicant shall henceforth be treated 
  3.9   as a health maintenance organization whose certificate of 
  3.10  authority has been revoked.  Any person directed to apply for a 
  3.11  certificate of authority shall be subject to the provisions of 
  3.12  this subdivision. 
  3.13     Sec. 5.  Minnesota Statutes 1998, section 62D.03, 
  3.14  subdivision 4, is amended to read: 
  3.15     Subd. 4.  Each application for a certificate of authority 
  3.16  shall be verified by an officer or authorized representative of 
  3.17  the applicant, and shall be in a form prescribed by the 
  3.18  commissioner of health.  Each application shall include the 
  3.19  following: 
  3.20     (a) a copy of the basic organizational document, if any, of 
  3.21  the applicant and of each major participating entity; such as 
  3.22  the articles of incorporation, or other applicable documents, 
  3.23  and all amendments thereto; 
  3.24     (b) a copy of the bylaws, rules and regulations, or similar 
  3.25  document, if any, and all amendments thereto which regulate the 
  3.26  conduct of the affairs of the applicant and of each major 
  3.27  participating entity; 
  3.28     (c) a list of the names, addresses, and official positions 
  3.29  of the following: 
  3.30     (1) all members of the board of directors, or governing 
  3.31  body of the local government unit, and the principal officers 
  3.32  and shareholders of the applicant organization; and 
  3.33     (2) all members of the board of directors, or governing 
  3.34  body of the local government unit, and the principal officers of 
  3.35  the major participating entity and each shareholder beneficially 
  3.36  owning more than ten percent of any voting stock of the major 
  4.1   participating entity; 
  4.2      The commissioner may by rule identify persons included in 
  4.3   the term "principal officers"; 
  4.4      (d) a full disclosure of the extent and nature of any 
  4.5   contract or financial arrangements between the following:  
  4.6      (1) the health maintenance organization and the persons 
  4.7   listed in clause (c)(1); 
  4.8      (2) the health maintenance organization and the persons 
  4.9   listed in clause (c)(2); 
  4.10     (3) each major participating entity and the persons listed 
  4.11  in clause (c)(1) concerning any financial relationship with the 
  4.12  health maintenance organization; and 
  4.13     (4) each major participating entity and the persons listed 
  4.14  in clause (c)(2) concerning any financial relationship with the 
  4.15  health maintenance organization; 
  4.16     (e) the name and address of each participating entity and 
  4.17  the agreed upon duration of each contract or agreement; 
  4.18     (f) a copy of the form of each contract binding the 
  4.19  participating entities and the health maintenance organization.  
  4.20  Contractual provisions shall be consistent with the purposes of 
  4.21  sections 62D.01 to 62D.30, in regard to the services to be 
  4.22  performed under the contract, the manner in which payment for 
  4.23  services is determined, the nature and extent of 
  4.24  responsibilities to be retained by the health maintenance 
  4.25  organization, the nature and extent of risk sharing permissible, 
  4.26  and contractual termination provisions; 
  4.27     (g) a copy of each contract binding major participating 
  4.28  entities and the health maintenance organization.  Contract 
  4.29  information filed with the commissioner shall be confidential 
  4.30  and subject to the provisions of section 13.37, subdivision 1, 
  4.31  clause (b), upon the request of the health maintenance 
  4.32  organization.  
  4.33     Upon initial filing of each contract, the health 
  4.34  maintenance organization shall file a separate document 
  4.35  detailing the projected annual expenses to the major 
  4.36  participating entity in performing the contract and the 
  5.1   projected annual revenues received by the entity from the health 
  5.2   maintenance organization for such performance.  The commissioner 
  5.3   shall disapprove any contract with a major participating entity 
  5.4   if the contract will result in an unreasonable expense under 
  5.5   section 62D.19.  The commissioner shall approve or disapprove a 
  5.6   contract within 30 days of filing.  
  5.7      Within 120 days of the anniversary of the implementation of 
  5.8   each contract, the health maintenance organization shall file a 
  5.9   document detailing the actual expenses incurred and reported by 
  5.10  the major participating entity in performing the contract in the 
  5.11  preceding year and the actual revenues received from the health 
  5.12  maintenance organization by the entity in payment for the 
  5.13  performance; 
  5.14     (h) a statement generally describing the health maintenance 
  5.15  organization, its health maintenance contracts and separate 
  5.16  health service contracts, facilities, and personnel, including a 
  5.17  statement describing the manner in which the applicant proposes 
  5.18  to provide enrollees with comprehensive health maintenance 
  5.19  services and separate health services; 
  5.20     (i) a copy of the form of each evidence of coverage to be 
  5.21  issued to the enrollees; 
  5.22     (j) a copy of the form of each individual or group health 
  5.23  maintenance contract and each separate health service contract 
  5.24  which is to be issued to enrollees or their representatives; 
  5.25     (k) financial statements showing the applicant's assets, 
  5.26  liabilities, and sources of financial support.  If the 
  5.27  applicant's financial affairs are audited by independent 
  5.28  certified public accountants, a copy of the applicant's most 
  5.29  recent certified financial statement may be deemed to satisfy 
  5.30  this requirement; 
  5.31     (l) a description of the proposed method of marketing the 
  5.32  plan, a schedule of proposed charges, and a financial plan which 
  5.33  includes a three-year projection of the expenses and income and 
  5.34  other sources of future capital; 
  5.35     (m) a statement reasonably describing the geographic area 
  5.36  or areas to be served and the type or types of enrollees to be 
  6.1   served; 
  6.2      (n) a description of the complaint procedures to be 
  6.3   utilized as required under section 62D.11; 
  6.4      (o) a description of the procedures and programs to be 
  6.5   implemented to meet the requirements of section 62D.04, 
  6.6   subdivision 1, clauses (b) and (c) subdivision 1a, paragraph 
  6.7   (a), clauses (1) and (2), and to monitor the quality of health 
  6.8   care provided to enrollees; 
  6.9      (p) a description of the mechanism by which enrollees will 
  6.10  be afforded an opportunity to participate in matters of policy 
  6.11  and operation under section 62D.06; 
  6.12     (q) a copy of any agreement between the health maintenance 
  6.13  organization and an insurer or nonprofit health service 
  6.14  corporation regarding reinsurance, stop-loss coverage, 
  6.15  insolvency coverage, or any other type of coverage for potential 
  6.16  costs of health services, as authorized in sections 62D.04, 
  6.17  subdivision 1, clause (f), 62D.05, subdivision 3, and 62D.13; 
  6.18     (r) a copy of the conflict of interest policy which applies 
  6.19  to all members of the board of directors and the principal 
  6.20  officers of the health maintenance organization, as described in 
  6.21  section 62D.04, subdivision 1, paragraph (g).  All currently 
  6.22  licensed health maintenance organizations shall also file a 
  6.23  conflict of interest policy with the commissioner within 60 days 
  6.24  after August 1, 1990, or at a later date if approved by the 
  6.25  commissioner; 
  6.26     (s) a copy of the statement that describes the health 
  6.27  maintenance organization's prior authorization administrative 
  6.28  procedures; 
  6.29     (t) a copy of the agreement between the guaranteeing 
  6.30  organization and the health maintenance organization, as 
  6.31  described in section 62D.043, subdivision 6; and 
  6.32     (u) other information as the commissioner of health may 
  6.33  reasonably require to be provided. 
  6.34     Sec. 6.  Minnesota Statutes 1998, section 62D.04, 
  6.35  subdivision 1, is amended to read: 
  6.36     Subdivision 1.  Upon receipt of an application for a 
  7.1   certificate of authority, the commissioner of health shall 
  7.2   determine whether the applicant for a certificate of authority 
  7.3   has: 
  7.4      (a) demonstrated the willingness and potential ability to 
  7.5   assure that health care services will be provided in such a 
  7.6   manner as to enhance and assure both the availability and 
  7.7   accessibility of adequate personnel and facilities; 
  7.8      (b) arrangements for an ongoing evaluation of the quality 
  7.9   of health care; 
  7.10     (c) a procedure to develop, compile, evaluate, and report 
  7.11  statistics relating to the cost of its operations, the pattern 
  7.12  of utilization of its services, the quality, availability and 
  7.13  accessibility of its services, and such other matters as may be 
  7.14  reasonably required by regulation of the commissioner of health; 
  7.15     (d) reasonable provisions for emergency and out of area 
  7.16  health care services; 
  7.17     (e) (a) demonstrated that it is financially responsible and 
  7.18  may reasonably be expected to meet its obligations to enrollees 
  7.19  and prospective enrollees.  In making this determination, the 
  7.20  commissioner of health shall require the amounts of net worth 
  7.21  and working capital required in section 62D.042, the deposit 
  7.22  required in section 62D.041, and in addition shall consider: 
  7.23     (1) the financial soundness of its arrangements for health 
  7.24  care services and the proposed schedule of charges used in 
  7.25  connection therewith; 
  7.26     (2) arrangements which will guarantee for a reasonable 
  7.27  period of time the continued availability or payment of the cost 
  7.28  of health care services in the event of discontinuance of the 
  7.29  health maintenance organization; and 
  7.30     (3) agreements with providers for the provision of health 
  7.31  care services; 
  7.32     (f) (b) demonstrated that it will assume full financial 
  7.33  risk on a prospective basis for the provision of comprehensive 
  7.34  health maintenance services, including hospital care; provided, 
  7.35  however, that the requirement in this paragraph shall not 
  7.36  prohibit the following: 
  8.1      (1) a health maintenance organization from obtaining 
  8.2   insurance or making other arrangements (i) for the cost of 
  8.3   providing to any enrollee comprehensive health maintenance 
  8.4   services, the aggregate value of which exceeds $5,000 in any 
  8.5   year, (ii) for the cost of providing comprehensive health care 
  8.6   services to its members on a nonelective emergency basis, or 
  8.7   while they are outside the area served by the organization, or 
  8.8   (iii) for not more than 95 percent of the amount by which the 
  8.9   health maintenance organization's costs for any of its fiscal 
  8.10  years exceed 105 percent of its income for such fiscal years; 
  8.11  and 
  8.12     (2) a health maintenance organization from having a 
  8.13  provision in a group health maintenance contract allowing an 
  8.14  adjustment of premiums paid based upon the actual health 
  8.15  services utilization of the enrollees covered under the 
  8.16  contract, except that at no time during the life of the contract 
  8.17  shall the contract holder fully self-insure the financial risk 
  8.18  of health care services delivered under the contract.  Risk 
  8.19  sharing arrangements shall be subject to the requirements of 
  8.20  sections 62D.01 to 62D.30; 
  8.21     (g) (c) demonstrated that it has made provisions for and 
  8.22  adopted a conflict of interest policy applicable to all members 
  8.23  of the board of directors and the principal officers of the 
  8.24  health maintenance organization.  The conflict of interest 
  8.25  policy shall include the procedures described in section 
  8.26  317A.255, subdivisions 1 and 2.  However, the commissioner is 
  8.27  not precluded from finding that a particular transaction is an 
  8.28  unreasonable expense as described in section 62D.19 even if the 
  8.29  directors follow the required procedures; and 
  8.30     (h) (d) otherwise met the requirements of sections 62D.01 
  8.31  to 62D.30. 
  8.32     Sec. 7.  Minnesota Statutes 1998, section 62D.04, is 
  8.33  amended by adding a subdivision to read: 
  8.34     Subd. 1a.  [REVIEW BY COMMISSIONER OF HEALTH.] (a) Upon 
  8.35  receipt of an application for a certificate of authority, the 
  8.36  commissioner of health shall determine whether the applicant has:
  9.1      (1) demonstrated the willingness and potential ability to 
  9.2   assure that health care services will be provided in such a 
  9.3   manner so as to enhance and assure both the availability and 
  9.4   accessibility of adequate personnel and facilities; 
  9.5      (2) arrangements for an ongoing evaluation of the quality 
  9.6   of health care; 
  9.7      (3) a procedure to develop, compile, evaluate, and report 
  9.8   statistics relating to the cost of its operations, the pattern 
  9.9   of utilization of its services, the quality, availability and 
  9.10  accessibility of its services, and such other matters as may be 
  9.11  reasonably required by rule of the commissioner; and 
  9.12     (4) reasonable provisions for emergency and out-of-area 
  9.13  health care services. 
  9.14     (b) The commissioner of health shall report this 
  9.15  determination to the commissioner within the time period 
  9.16  specified in subdivision 2. 
  9.17     Sec. 8.  Minnesota Statutes 1998, section 62D.04, 
  9.18  subdivision 2, is amended to read: 
  9.19     Subd. 2.  Within 90 days after the receipt of the 
  9.20  application for a certificate of authority, the commissioner of 
  9.21  health shall determine whether or not the applicant meets the 
  9.22  requirements of this section.  If the commissioner of health 
  9.23  determines that the applicant meets the requirements of sections 
  9.24  62D.01 to 62D.30, the commissioner shall issue a certificate of 
  9.25  authority to the applicant.  If the commissioner of health 
  9.26  determines that the applicant is not qualified, the commissioner 
  9.27  shall so notify the applicant and shall specify the reason or 
  9.28  reasons for such disqualification. 
  9.29     Sec. 9.  Minnesota Statutes 1998, section 62D.04, 
  9.30  subdivision 4, is amended to read: 
  9.31     Subd. 4.  [CONTINUED COMPLIANCE.] Upon being granted a 
  9.32  certificate of authority to operate as a health maintenance 
  9.33  organization, the organization must continue to operate in 
  9.34  compliance with the standards set forth in subdivision 1 
  9.35  subdivisions 1 and 1a.  Noncompliance may result in the 
  9.36  imposition of a fine or the suspension or revocation of the 
 10.1   certificate of authority, in accordance with sections 62D.15 to 
 10.2   62D.17.  The commissioner of health shall inform the 
 10.3   commissioner of any failure to comply with subdivision 1a. 
 10.4      Sec. 10.  Minnesota Statutes 1998, section 62D.05, 
 10.5   subdivision 6, is amended to read: 
 10.6      Subd. 6.  [SUPPLEMENTAL BENEFITS.] (a) A health maintenance 
 10.7   organization may, as a supplemental benefit, provide coverage to 
 10.8   its enrollees for health care services and supplies received 
 10.9   from providers who are not employed by, under contract with, or 
 10.10  otherwise affiliated with the health maintenance organization.  
 10.11  Supplemental benefits may be provided if the following 
 10.12  conditions are met:  
 10.13     (1) a health maintenance organization desiring to offer 
 10.14  supplemental benefits must at all times comply with the 
 10.15  requirements of sections 62D.041 and 62D.042; 
 10.16     (2) a health maintenance organization offering supplemental 
 10.17  benefits must maintain an additional surplus in the first year 
 10.18  supplemental benefits are offered equal to the lesser of 
 10.19  $500,000 or 33 percent of the supplemental benefit expenses.  At 
 10.20  the end of the second year supplemental benefits are offered, 
 10.21  the health maintenance organization must maintain an additional 
 10.22  surplus equal to the lesser of $1,000,000 or 33 percent of the 
 10.23  supplemental benefit expenses.  At the end of the third year 
 10.24  benefits are offered and every year after that, the health 
 10.25  maintenance organization must maintain an additional surplus 
 10.26  equal to the greater of $1,000,000 or 33 percent of the 
 10.27  supplemental benefit expenses.  When in the judgment of the 
 10.28  commissioner the health maintenance organization's surplus is 
 10.29  inadequate, the commissioner may require the health maintenance 
 10.30  organization to maintain additional surplus; 
 10.31     (3) claims relating to supplemental benefits must be 
 10.32  processed in accordance with the requirements of section 
 10.33  72A.201; and 
 10.34     (4) in marketing supplemental benefits, the health 
 10.35  maintenance organization shall fully disclose and describe to 
 10.36  enrollees and potential enrollees the nature and extent of the 
 11.1   supplemental coverage, and any claims filing and other 
 11.2   administrative responsibilities in regard to supplemental 
 11.3   benefits.  
 11.4      (b) The commissioner may, pursuant to chapter 14, adopt, 
 11.5   enforce, and administer rules relating to this subdivision, 
 11.6   including:  rules insuring that these benefits are supplementary 
 11.7   and not substitutes for comprehensive health maintenance 
 11.8   services by addressing percentage of out-of-plan coverage; rules 
 11.9   relating to the establishment of necessary financial reserves; 
 11.10  rules relating to marketing practices; and other rules necessary 
 11.11  for the effective and efficient administration of this 
 11.12  subdivision.  The commissioner, in adopting rules, shall give 
 11.13  consideration to existing laws and rules administered and 
 11.14  enforced by the department of commerce commissioner relating to 
 11.15  health insurance plans.  
 11.16     Sec. 11.  Minnesota Statutes 1998, section 62D.06, 
 11.17  subdivision 2, is amended to read: 
 11.18     Subd. 2.  The governing body shall establish a mechanism to 
 11.19  afford the enrollees an opportunity to express their opinions in 
 11.20  matters of policy and operation through the establishment of 
 11.21  advisory panels, by the use of advisory referenda on major 
 11.22  policy decisions, or through the use of other mechanisms as may 
 11.23  be prescribed or permitted by the commissioner of health. 
 11.24     Sec. 12.  Minnesota Statutes 1998, section 62D.07, 
 11.25  subdivision 2, is amended to read: 
 11.26     Subd. 2.  No evidence of coverage or contract, or amendment 
 11.27  thereto shall be issued or delivered to any person in this state 
 11.28  until a copy of the form of the evidence of coverage or contract 
 11.29  or amendment thereto has been filed with the commissioner of 
 11.30  health pursuant to section 62D.03 or 62D.08. 
 11.31     Sec. 13.  Minnesota Statutes 1998, section 62D.07, 
 11.32  subdivision 3, is amended to read: 
 11.33     Subd. 3.  Contracts and evidences of coverage shall contain:
 11.34     (a) No provisions or statements which are unjust, unfair, 
 11.35  inequitable, misleading, deceptive, or which are untrue, 
 11.36  misleading, or deceptive as defined in section 62D.12, 
 12.1   subdivision 1; 
 12.2      (b) A clear, concise and complete statement of: 
 12.3      (1) the health care services and the insurance or other 
 12.4   benefits, if any, to which the enrollee is entitled under the 
 12.5   health maintenance contract; 
 12.6      (2) any exclusions or limitations on the services, kind of 
 12.7   services, benefits, or kind of benefits, to be provided, 
 12.8   including any deductible or copayment feature and requirements 
 12.9   for referrals, prior authorizations, and second opinions; 
 12.10     (3) where and in what manner information is available as to 
 12.11  how services, including emergency and out of area services, may 
 12.12  be obtained; 
 12.13     (4) the total amount of payment and copayment, if any, for 
 12.14  health care services and the indemnity or service benefits, if 
 12.15  any, which the enrollee is obligated to pay with respect to 
 12.16  individual contracts, or an indication whether the plan is 
 12.17  contributory or noncontributory with respect to group 
 12.18  certificates; and 
 12.19     (5) a description of the health maintenance organization's 
 12.20  method for resolving enrollee complaints and a statement 
 12.21  identifying the commissioner as an external source with whom 
 12.22  complaints may be registered; and 
 12.23     (c) On the cover page of the evidence of coverage and 
 12.24  contract, a clear and complete statement of enrollees' rights.  
 12.25  The statement must be in bold print and captioned "Important 
 12.26  Enrollee Information and Enrollee Bill of Rights" and must 
 12.27  include but not be limited to the following provisions in the 
 12.28  following language or in substantially similar language approved 
 12.29  in advance by the commissioner, except that paragraph (8) does 
 12.30  not apply to prepaid health plans providing coverage for 
 12.31  programs administered by the commissioner of human services:  
 12.32                        ENROLLEE INFORMATION 
 12.33     (1) COVERED SERVICES:  Services provided by (name of health 
 12.34  maintenance organization) will be covered only if services are 
 12.35  provided by participating (name of health maintenance 
 12.36  organization) providers or authorized by (name of health 
 13.1   maintenance organization).  Your contract fully defines what 
 13.2   services are covered and describes procedures you must follow to 
 13.3   obtain coverage. 
 13.4      (2) PROVIDERS:  Enrolling in (name of health maintenance 
 13.5   organization) does not guarantee services by a particular 
 13.6   provider on the list of providers.  When a provider is no longer 
 13.7   part of (name of health maintenance organization), you must 
 13.8   choose among remaining (name of the health maintenance 
 13.9   organization) providers. 
 13.10     (3) REFERRALS:  Certain services are covered only upon 
 13.11  referral.  See section (section number) of your contract for 
 13.12  referral requirements.  All referrals to non-(name of health 
 13.13  maintenance organization) providers and certain types of health 
 13.14  care providers must be authorized by (name of health maintenance 
 13.15  organization). 
 13.16     (4) EMERGENCY SERVICES:  Emergency services from providers 
 13.17  who are not affiliated with (name of health maintenance 
 13.18  organization) will be covered only if proper procedures are 
 13.19  followed.  Your contract explains the procedures and benefits 
 13.20  associated with emergency care from (name of health maintenance 
 13.21  organization) and non-(name of health maintenance organization) 
 13.22  providers. 
 13.23     (5) EXCLUSIONS:  Certain services or medical supplies are 
 13.24  not covered.  You should read the contract for a detailed 
 13.25  explanation of all exclusions. 
 13.26     (6) CONTINUATION:  You may convert to an individual health 
 13.27  maintenance organization contract or continue coverage under 
 13.28  certain circumstances.  These continuation and conversion rights 
 13.29  are explained fully in your contract. 
 13.30     (7) CANCELLATION:  Your coverage may be canceled by you or 
 13.31  (name of health maintenance organization) only under certain 
 13.32  conditions.  Your contract describes all reasons for 
 13.33  cancellation of coverage. 
 13.34     (8) NEWBORN COVERAGE:  If your health plan provides for 
 13.35  dependent coverage, a newborn infant is covered from birth, but 
 13.36  only if services are provided by participating (name of health 
 14.1   maintenance organization) providers or authorized by (name of 
 14.2   health maintenance organization).  Certain services are covered 
 14.3   only upon referral.  (Name of health maintenance organization) 
 14.4   will not automatically know of the infant's birth or that you 
 14.5   would like coverage under your plan.  You should notify (name of 
 14.6   health maintenance organization) of the infant's birth and that 
 14.7   you would like coverage.  If your contract requires an 
 14.8   additional premium for each dependent, (name of health 
 14.9   maintenance organization) is entitled to all premiums due from 
 14.10  the time of the infant's birth until the time you notify (name 
 14.11  of health maintenance organization) of the birth.  (Name of 
 14.12  health maintenance organization) may withhold payment of any 
 14.13  health benefits for the newborn infant until any premiums you 
 14.14  owe are paid. 
 14.15     (9) PRESCRIPTION DRUGS AND MEDICAL EQUIPMENT:  Enrolling in 
 14.16  (name of health maintenance organization) does not guarantee 
 14.17  that any particular prescription drug will be available nor that 
 14.18  any particular piece of medical equipment will be available, 
 14.19  even if the drug or equipment is available at the start of the 
 14.20  contract year. 
 14.21                      ENROLLEE BILL OF RIGHTS 
 14.22     (1) Enrollees have the right to available and accessible 
 14.23  services including emergency services, as defined in your 
 14.24  contract, 24 hours a day and seven days a week; 
 14.25     (2) Enrollees have the right to be informed of health 
 14.26  problems, and to receive information regarding treatment 
 14.27  alternatives and risks which is sufficient to assure informed 
 14.28  choice; 
 14.29     (3) Enrollees have the right to refuse treatment, and the 
 14.30  right to privacy of medical and financial records maintained by 
 14.31  the health maintenance organization and its health care 
 14.32  providers, in accordance with existing law; 
 14.33     (4) Enrollees have the right to file a complaint with the 
 14.34  health maintenance organization and the commissioner of health 
 14.35  commerce and the right to initiate a legal proceeding when 
 14.36  experiencing a problem with the health maintenance organization 
 15.1   or its health care providers; 
 15.2      (5) Enrollees have the right to a grace period of 31 days 
 15.3   for the payment of each premium for an individual health 
 15.4   maintenance contract falling due after the first premium during 
 15.5   which period the contract shall continue in force; 
 15.6      (6) Medicare enrollees have the right to voluntarily 
 15.7   disenroll from the health maintenance organization and the right 
 15.8   not to be requested or encouraged to disenroll except in 
 15.9   circumstances specified in federal law; and 
 15.10     (7) Medicare enrollees have the right to a clear 
 15.11  description of nursing home and home care benefits covered by 
 15.12  the health maintenance organization. 
 15.13     Sec. 14.  Minnesota Statutes 1998, section 62D.07, 
 15.14  subdivision 10, is amended to read: 
 15.15     Subd. 10.  An individual health maintenance organization 
 15.16  contract and an evidence of coverage must contain a department 
 15.17  of health commerce telephone number that the enrollee can call 
 15.18  to register a complaint about a health maintenance organization. 
 15.19     Sec. 15.  Minnesota Statutes 1998, section 62D.08, 
 15.20  subdivision 1, is amended to read: 
 15.21     Subdivision 1.  A health maintenance organization shall, 
 15.22  unless otherwise provided for by rules adopted by the 
 15.23  commissioner of health, file notice with the commissioner of 
 15.24  health prior to any modification of the operations or documents 
 15.25  described in the information submitted under clauses (a), (b), 
 15.26  (e), (f), (g), (i), (j), (l), (m), (n), (o), (p), (q), (r), (s), 
 15.27  and (t) of section 62D.03, subdivision 4.  If the modification 
 15.28  involves the operations or documents described in the 
 15.29  information submitted under section 62D.03, subdivision 4, 
 15.30  clause (o), the notice of modification must be filed with the 
 15.31  commissioner of health at the same time it is filed with the 
 15.32  commissioner.  The commissioner of health shall provide the 
 15.33  commissioner with a recommendation on the approval or 
 15.34  disapproval of the modifications within 60 days of the filing.  
 15.35  If the commissioner of health does not disapprove of the filing 
 15.36  within 60 days, it shall be deemed approved and may be 
 16.1   implemented by the health maintenance organization. 
 16.2      Sec. 16.  Minnesota Statutes 1998, section 62D.08, 
 16.3   subdivision 2, is amended to read: 
 16.4      Subd. 2.  Every health maintenance organization shall 
 16.5   annually, on or before April 1, file a verified report with the 
 16.6   commissioner of health and with the commissioner of health, 
 16.7   covering the preceding calendar year.  However, utilization data 
 16.8   required under subdivision 3, clause (c), shall be filed on or 
 16.9   before July 1. 
 16.10     Sec. 17.  Minnesota Statutes 1998, section 62D.08, 
 16.11  subdivision 3, is amended to read: 
 16.12     Subd. 3.  Such report shall be on forms prescribed by the 
 16.13  commissioner of health, and shall include: 
 16.14     (a) A financial statement of the organization, including 
 16.15  its balance sheet and receipts and disbursements for the 
 16.16  preceding year certified by an independent certified public 
 16.17  accountant, reflecting at least (1) all prepayment and other 
 16.18  payments received for health care services rendered, (2) 
 16.19  expenditures to all providers, by classes or groups of 
 16.20  providers, and insurance companies or nonprofit health service 
 16.21  plan corporations engaged to fulfill obligations arising out of 
 16.22  the health maintenance contract, (3) expenditures for capital 
 16.23  improvements, or additions thereto, including but not limited to 
 16.24  construction, renovation or purchase of facilities and capital 
 16.25  equipment, and (4) a supplementary statement of assets, 
 16.26  liabilities, premium revenue, and expenditures for risk sharing 
 16.27  business under section 62D.04, subdivision 1, on forms 
 16.28  prescribed by the commissioner; 
 16.29     (b) The number of new enrollees enrolled during the year, 
 16.30  the number of group enrollees and the number of individual 
 16.31  enrollees as of the end of the year and the number of enrollees 
 16.32  terminated during the year; 
 16.33     (c) A summary of information compiled pursuant to section 
 16.34  62D.04, subdivision 1, clause (c) subdivision 1a, paragraph (a), 
 16.35  clause (3), in such form as may be required by the 
 16.36  commissioner of health; 
 17.1      (d) A report of the names and addresses of all persons set 
 17.2   forth in section 62D.03, subdivision 4, clause (c), who were 
 17.3   associated with the health maintenance organization or the major 
 17.4   participating entity during the preceding year, and the amount 
 17.5   of wages, expense reimbursements, or other payments to such 
 17.6   individuals for services to the health maintenance organization 
 17.7   or the major participating entity, as those services relate to 
 17.8   the health maintenance organization, including a full disclosure 
 17.9   of all financial arrangements during the preceding year required 
 17.10  to be disclosed pursuant to section 62D.03, subdivision 4, 
 17.11  clause (d); 
 17.12     (e) A separate report addressing health maintenance 
 17.13  contracts sold to individuals covered by Medicare, title XVIII 
 17.14  of the Social Security Act, as amended, including the 
 17.15  information required under section 62D.30, subdivision 6; and 
 17.16     (f) Such other information relating to the performance of 
 17.17  the health maintenance organization as is reasonably necessary 
 17.18  to enable the commissioner of health to carry out the duties 
 17.19  under sections 62D.01 to 62D.30. 
 17.20     Sec. 18.  Minnesota Statutes 1998, section 62D.08, 
 17.21  subdivision 4, is amended to read: 
 17.22     Subd. 4.  Any health maintenance organization which fails 
 17.23  to file a verified report with the commissioner and with the 
 17.24  commissioner of health on or before April 1 of the year due 
 17.25  shall be subject to the levy of a fine up to $500 for each day 
 17.26  the report is past due.  This failure will serve as a basis for 
 17.27  other disciplinary action against the organization, including 
 17.28  suspension or revocation, in accordance with sections 62D.15 to 
 17.29  62D.17 and chapter 45.  The commissioner may grant an extension 
 17.30  of the reporting deadline upon good cause shown by the health 
 17.31  maintenance organization.  Any fine levied or disciplinary 
 17.32  action taken against the organization under this subdivision is 
 17.33  subject to the contested case and judicial review provisions of 
 17.34  sections 14.57 to 14.69.  
 17.35     Sec. 19.  Minnesota Statutes 1998, section 62D.08, 
 17.36  subdivision 5, is amended to read: 
 18.1      Subd. 5.  Every health maintenance organization shall 
 18.2   inform the commissioner of any change in the information 
 18.3   described in section 62D.03, subdivision 4, clause (e), 
 18.4   including any change in address, any modification of the 
 18.5   duration of any contract or agreement, and any addition to the 
 18.6   list of participating entities, within ten working days of the 
 18.7   notification of the change.  Any cancellation or discontinuance 
 18.8   of any contract or agreement listed in section 62D.03, 
 18.9   subdivision 4, clause (e), or listed subsequently in accordance 
 18.10  with this subdivision, shall be reported to the commissioner 120 
 18.11  days before the effective date.  When the health maintenance 
 18.12  organization terminates a provider for cause, death, disability, 
 18.13  or loss of license, the health maintenance organization must 
 18.14  notify the commissioner within three working days of the date 
 18.15  the health maintenance organization sends out or receives the 
 18.16  notice of cancellation, discontinuance, or termination.  Any 
 18.17  health maintenance organization which fails to notify the 
 18.18  commissioner within the time periods prescribed in this 
 18.19  subdivision shall be subject to the levy of a fine up to $200 
 18.20  per contract for each day the notice is past due, accruing up to 
 18.21  the date the organization notifies the commissioner of the 
 18.22  cancellation or discontinuance.  Any fine levied under this 
 18.23  subdivision is subject to the contested case and judicial review 
 18.24  provisions of chapter 14.  The levy of a fine does not preclude 
 18.25  the commissioner from using other penalties described in 
 18.26  sections 62D.15 to 62D.17 and chapter 45. 
 18.27     Sec. 20.  Minnesota Statutes 1998, section 62D.09, 
 18.28  subdivision 1, is amended to read: 
 18.29     Subdivision 1.  (a) Any written marketing materials which 
 18.30  may be directed toward potential enrollees and which include a 
 18.31  detailed description of benefits provided by the health 
 18.32  maintenance organization shall include a statement of enrollee 
 18.33  information and rights as described in section 62D.07, 
 18.34  subdivision 3, paragraphs (b) and (c).  Prior to any oral 
 18.35  marketing presentation, the agent marketing the plan must inform 
 18.36  the potential enrollees that any complaints concerning the 
 19.1   material presented should be directed to the health maintenance 
 19.2   organization, the commissioner of health, or, if applicable, the 
 19.3   employer. 
 19.4      (b) Detailed marketing materials must affirmatively 
 19.5   disclose all exclusions and limitations in the organization's 
 19.6   services or kinds of services offered to the contracting party, 
 19.7   including but not limited to the following types of exclusions 
 19.8   and limitations: 
 19.9      (1) health care services not provided; 
 19.10     (2) health care services requiring copayments or 
 19.11  deductibles paid by enrollees; 
 19.12     (3) the fact that access to health care services does not 
 19.13  guarantee access to a particular provider type; and 
 19.14     (4) health care services that are or may be provided only 
 19.15  by referral of a physician. 
 19.16     (c) No marketing materials may lead consumers to believe 
 19.17  that all health care needs will be covered.  All marketing 
 19.18  materials must alert consumers to possible uncovered expenses 
 19.19  with the following language in bold print:  "THIS HEALTH CARE 
 19.20  PLAN MAY NOT COVER ALL YOUR HEALTH CARE EXPENSES; READ YOUR 
 19.21  CONTRACT CAREFULLY TO DETERMINE WHICH EXPENSES ARE COVERED."  
 19.22  Immediately following the disclosure required under paragraph 
 19.23  (b), clause (3), consumers must be given a telephone number to 
 19.24  use to contact the health maintenance organization for specific 
 19.25  information about access to provider types. 
 19.26     (d) The disclosures required in paragraphs (b) and (c) are 
 19.27  not required on billboards or image, and name identification 
 19.28  advertisement. 
 19.29     Sec. 21.  Minnesota Statutes 1998, section 62D.09, 
 19.30  subdivision 8, is amended to read: 
 19.31     Subd. 8.  Each health maintenance organization shall issue 
 19.32  a membership card to its enrollees.  The membership card must: 
 19.33     (1) identify the health maintenance organization; 
 19.34     (2) include the name, address, and telephone number to call 
 19.35  if the enrollee has a complaint; 
 19.36     (3) include the telephone number to call or the instruction 
 20.1   on how to receive authorization for emergency care; and 
 20.2      (4) include one of the following: 
 20.3      (i) the telephone number to call to appeal to or file a 
 20.4   complaint with the commissioner of health; or 
 20.5      (ii) for persons enrolled under section 256B.69, 256D.03, 
 20.6   or 256L.12, the telephone number to call to file a complaint 
 20.7   with the ombudsperson designated by the commissioner of human 
 20.8   services under section 256B.69 and the address to appeal to the 
 20.9   commissioner of human services.  The ombudsperson shall annually 
 20.10  provide the commissioner of health with a summary of complaints 
 20.11  and actions taken. 
 20.12     Sec. 22.  Minnesota Statutes 1998, section 62D.10, 
 20.13  subdivision 4, is amended to read: 
 20.14     Subd. 4.  A health plan may apply to the commissioner of 
 20.15  health for a waiver of the requirements of this section or for 
 20.16  authorization to impose such underwriting restrictions upon open 
 20.17  enrollment as are necessary (a) to preserve its financial 
 20.18  stability, (b) to prevent excessive adverse selection by 
 20.19  prospective enrollees, or (c) to avoid unreasonably high or 
 20.20  unmarketable charges for enrollee coverage for health care 
 20.21  services.  The commissioner of health upon a showing of good 
 20.22  cause, shall approve or upon failure to show good cause shall 
 20.23  deny such application within 30 days of the receipt thereof from 
 20.24  the health plan.  The commissioner of health may, in accordance 
 20.25  with chapter 14, promulgate rules to implement this section. 
 20.26     Sec. 23.  Minnesota Statutes 1998, section 62D.11, 
 20.27  subdivision 1b, is amended to read: 
 20.28     Subd. 1b.  [EXPEDITED RESOLUTION OF COMPLAINTS ABOUT 
 20.29  MEDICALLY URGENT SERVICES.] In addition to any remedy contained 
 20.30  in subdivision 1a, when a complaint involves a dispute about a 
 20.31  health maintenance organization's coverage of a medically urgent 
 20.32  service, the commissioner or the commissioner of health may also 
 20.33  order the health maintenance organization to use an expedited 
 20.34  system to process the complaint. 
 20.35     Sec. 24.  Minnesota Statutes 1998, section 62D.11, 
 20.36  subdivision 2, is amended to read: 
 21.1      Subd. 2.  The health maintenance organization shall 
 21.2   maintain a record of each written complaint filed with it for 
 21.3   five years and the commissioner of health and the commissioner 
 21.4   of health shall have access to the records. 
 21.5      Sec. 25.  Minnesota Statutes 1998, section 62D.11, 
 21.6   subdivision 3, is amended to read: 
 21.7      Subd. 3.  [DENIAL OF COVERAGE.] Within a reasonable time 
 21.8   after receiving an enrollee's written or oral communication to 
 21.9   the health maintenance organization concerning a denial of 
 21.10  coverage or inadequacy of services, the health maintenance 
 21.11  organization shall provide the enrollee with a written statement 
 21.12  of the reason for the denial of coverage, and a statement 
 21.13  approved by the commissioner of health which explains the health 
 21.14  maintenance organization complaint procedures, and in the case 
 21.15  of Medicare enrollees, which also explains Medicare appeal 
 21.16  procedures. 
 21.17     Sec. 26.  Minnesota Statutes 1998, section 62D.11, is 
 21.18  amended by adding a subdivision to read: 
 21.19     Subd. 5.  [REFERRAL TO COMMISSIONER OF HEALTH.] The 
 21.20  commissioner shall determine whether a complaint relates 
 21.21  primarily to quality of care.  The commissioner shall refer such 
 21.22  complaints to the commissioner of health for information, 
 21.23  recommendation, investigation, or resolution. 
 21.24     Sec. 27.  Minnesota Statutes 1998, section 62D.12, 
 21.25  subdivision 1, is amended to read: 
 21.26     Subdivision 1.  No health maintenance organization or 
 21.27  representative thereof may cause or knowingly permit the use of 
 21.28  advertising or solicitation which is untrue or misleading, or 
 21.29  any form of evidence of coverage which is deceptive.  Each 
 21.30  health maintenance organization shall be subject to sections 
 21.31  72A.17 to 72A.32, relating to the regulation of trade practices, 
 21.32  except (a) to the extent that the nature of a health maintenance 
 21.33  organization renders such sections clearly inappropriate and (b) 
 21.34  that enforcement shall be by the commissioner of health and not 
 21.35  by the commissioner of commerce.  Every health maintenance 
 21.36  organization shall be subject to sections 8.31 and 325F.69. 
 22.1      Sec. 28.  Minnesota Statutes 1998, section 62D.12, 
 22.2   subdivision 2, is amended to read: 
 22.3      Subd. 2.  No health maintenance organization may cancel or 
 22.4   fail to renew the coverage of an enrollee except for (a) failure 
 22.5   to pay the charge for health care coverage; (b) termination of 
 22.6   the health care plan; (c) termination of the group plan; (d) 
 22.7   enrollee moving out of the area served, subject to section 
 22.8   62A.17, subdivisions 1 and 6, and section 62D.104; (e) enrollee 
 22.9   moving out of an eligible group, subject to section 62A.17, 
 22.10  subdivisions 1 and 6, and section 62D.104; (f) failure to make 
 22.11  copayments required by the health care plan; or (g) other 
 22.12  reasons established in rules promulgated by the commissioner of 
 22.13  health. 
 22.14     Sec. 29.  Minnesota Statutes 1998, section 62D.12, 
 22.15  subdivision 9, is amended to read: 
 22.16     Subd. 9.  All net earnings of the health maintenance 
 22.17  organization shall be devoted to the nonprofit purposes of the 
 22.18  health maintenance organization in providing comprehensive 
 22.19  health care.  No health maintenance organization shall provide 
 22.20  for the payment, whether directly or indirectly, of any part of 
 22.21  its net earnings, to any person as a dividend or rebate; 
 22.22  provided, however, that health maintenance organizations may 
 22.23  make payments to providers or other persons based upon the 
 22.24  efficient provision of services or as incentives to provide 
 22.25  quality care.  The commissioner of health shall, pursuant to 
 22.26  sections 62D.01 to 62D.30, revoke the certificate of authority 
 22.27  of any health maintenance organization in violation of this 
 22.28  subdivision. 
 22.29     Sec. 30.  Minnesota Statutes 1998, section 62D.121, 
 22.30  subdivision 3a, is amended to read: 
 22.31     Subd. 3a.  If the replacement coverage is health 
 22.32  maintenance organization coverage, as explained in subdivisions 
 22.33  2 and 2a, the fee shall not exceed 125 percent of the cost of 
 22.34  the average fee charged by health maintenance organizations for 
 22.35  a similar health plan.  The commissioner of health will shall 
 22.36  determine the average cost of the plan on the basis of 
 23.1   information provided annually by the health maintenance 
 23.2   organizations concerning the rates charged by the health 
 23.3   maintenance organizations for the plans offered.  Fees or 
 23.4   premiums charged under this section must be actuarially 
 23.5   justified. 
 23.6      Sec. 31.  Minnesota Statutes 1998, section 62D.121, 
 23.7   subdivision 7, is amended to read: 
 23.8      Subd. 7.  [GEOGRAPHIC ACCESSIBILITY.] If the 
 23.9   commissioner of health determines that there are not enough 
 23.10  providers to assure that enrollees have accessible health 
 23.11  services available in a geographic service area, the 
 23.12  commissioner of health shall institute a plan of corrective 
 23.13  action that shall be followed by the health maintenance 
 23.14  organization.  Such a plan may include but not be limited to 
 23.15  requiring the health maintenance organization to make payments 
 23.16  to nonparticipating providers for health services for enrollees, 
 23.17  requiring the health maintenance organization to discontinue 
 23.18  accepting new enrollees in that service area, and requiring the 
 23.19  health maintenance organization to reduce its geographic service 
 23.20  area.  If a nonparticipating provider has been a participating 
 23.21  provider with the health maintenance organization within the 
 23.22  last year, any payments made under this section must not exceed 
 23.23  the payment level of the previous contract unless the 
 23.24  commissioner of health determines that without adjusting 
 23.25  payments the health maintenance organization will be unable to 
 23.26  meet the health care needs of enrollees in the area. 
 23.27     Sec. 32.  Minnesota Statutes 1998, section 62D.14, 
 23.28  subdivision 1, is amended to read: 
 23.29     Subdivision 1.  The commissioner of health may make an 
 23.30  examination of the affairs of any health maintenance 
 23.31  organization and its contracts, agreements, or other 
 23.32  arrangements with any participating entity as often as the 
 23.33  commissioner of health deems necessary for the protection of the 
 23.34  interests of the people of this state, but not less frequently 
 23.35  than once every three years.  Examinations of participating 
 23.36  entities pursuant to this subdivision shall be limited to their 
 24.1   dealings with the health maintenance organization and its 
 24.2   enrollees, except that examinations of major participating 
 24.3   entities may include inspection of the entity's financial 
 24.4   statements kept in the ordinary course of business.  The 
 24.5   commissioner may require major participating entities to submit 
 24.6   the financial statements directly to the commissioner.  
 24.7   Financial statements of major participating entities are subject 
 24.8   to the provisions of section 13.37, subdivision 1, clause (b), 
 24.9   upon request of the major participating entity or the health 
 24.10  maintenance organization with which it contracts. 
 24.11     Sec. 33.  Minnesota Statutes 1998, section 62D.14, 
 24.12  subdivision 3, is amended to read: 
 24.13     Subd. 3.  In order to accomplish the duties under this 
 24.14  section with respect to the dealings of the participating 
 24.15  entities with the health maintenance organization, the 
 24.16  commissioner of health shall have has the right to: 
 24.17     (a) inspect or otherwise evaluate the quality, 
 24.18  appropriateness, and timeliness of services performed, or 
 24.19  arrange with the commissioner of health for the commissioner of 
 24.20  health to do so; 
 24.21     (b) audit and inspect any books and records of a health 
 24.22  maintenance organization and a participating entity which 
 24.23  pertain to services performed and determinations of amounts 
 24.24  payable under such contract; 
 24.25     (c) require persons or organizations under examination to 
 24.26  be deposed and to answer interrogatories, regardless of whether 
 24.27  an administrative hearing or other civil proceeding has been or 
 24.28  will be initiated; and 
 24.29     (d) employ site visits, public hearings, or any other 
 24.30  procedures considered appropriate to obtain the information 
 24.31  necessary to determine the issues.  
 24.32     Sec. 34.  Minnesota Statutes 1998, section 62D.14, 
 24.33  subdivision 4, is amended to read: 
 24.34     Subd. 4.  Any data or information pertaining to the 
 24.35  diagnosis, treatment, or health of any enrollee, or any 
 24.36  application obtained from any person, shall be private as 
 25.1   defined in chapter 13 and shall not be disclosed to any person 
 25.2   except (a) to the extent necessary to carry out the purposes of 
 25.3   sections 62D.01 to 62D.30, the commissioner and the commissioner 
 25.4   of health and a designee shall have access to the above data or 
 25.5   information but the data removed from the health maintenance 
 25.6   organization or participating entity shall not identify any 
 25.7   particular patient or client by name or contain any other unique 
 25.8   personal identifier; (b) upon the express consent of the 
 25.9   enrollee or applicant; (c) pursuant to statute or court order 
 25.10  for the production of evidence or the discovery thereof; or (d) 
 25.11  in the event of claim or litigation between such person and the 
 25.12  provider or health maintenance organization wherein such data or 
 25.13  information is pertinent.  In any case involving a suspected 
 25.14  violation of a law applicable to health maintenance 
 25.15  organizations in which access to health data maintained by the 
 25.16  health maintenance organization or participating entity is 
 25.17  necessary, the commissioner and the commissioner of health and 
 25.18  agents, while maintaining the privacy rights of individuals and 
 25.19  families, shall be permitted to obtain data that identifies any 
 25.20  particular patient or client by name.  A health maintenance 
 25.21  organization shall be entitled to claim any statutory privileges 
 25.22  against such disclosure which the provider who furnished such 
 25.23  information to the health maintenance organization is entitled 
 25.24  to claim. 
 25.25     Sec. 35.  Minnesota Statutes 1998, section 62D.14, 
 25.26  subdivision 5, is amended to read: 
 25.27     Subd. 5.  The commissioner of health shall and the 
 25.28  commissioner of health have the power to administer oaths to and 
 25.29  examine witnesses, and to issue subpoenas. 
 25.30     Sec. 36.  Minnesota Statutes 1998, section 62D.14, 
 25.31  subdivision 6, is amended to read: 
 25.32     Subd. 6.  Reasonable expenses of examinations under this 
 25.33  section shall be assessed by the commissioner of health against 
 25.34  the organization being examined, and shall be remitted to the 
 25.35  commissioner of health for deposit in the general fund of the 
 25.36  state treasury. 
 26.1      Sec. 37.  Minnesota Statutes 1998, section 62D.15, 
 26.2   subdivision 1, is amended to read: 
 26.3      Subdivision 1.  The commissioner of health may suspend or 
 26.4   revoke any certificate of authority issued to a health 
 26.5   maintenance organization under sections 62D.01 to 62D.30 if the 
 26.6   commissioner finds that: 
 26.7      (a) The health maintenance organization is operating 
 26.8   significantly in contravention of its basic organizational 
 26.9   document, its health maintenance contract, or in a manner 
 26.10  contrary to that described in and reasonably inferred from any 
 26.11  other information submitted under section 62D.03, unless 
 26.12  amendments to such submissions have been filed with and approved 
 26.13  by the commissioner of health; 
 26.14     (b) The health maintenance organization issues evidences of 
 26.15  coverage which do not comply with the requirements of section 
 26.16  62D.07; 
 26.17     (c) The health maintenance organization is unable to 
 26.18  fulfill its obligations to furnish comprehensive health 
 26.19  maintenance services as required under its health maintenance 
 26.20  contract; 
 26.21     (d) The health maintenance organization is no longer 
 26.22  financially responsible and may reasonably be expected to be 
 26.23  unable to meet its obligations to enrollees or prospective 
 26.24  enrollees; 
 26.25     (e) The health maintenance organization has failed to 
 26.26  implement a mechanism affording the enrollees an opportunity to 
 26.27  participate in matters of policy and operation under section 
 26.28  62D.06; 
 26.29     (f) The health maintenance organization has failed to 
 26.30  implement the complaint system required by section 62D.11 in a 
 26.31  manner designed to reasonably resolve valid complaints; 
 26.32     (g) The health maintenance organization, or any person 
 26.33  acting with its sanction, has advertised or merchandised its 
 26.34  services in an untrue, misrepresentative, misleading, deceptive, 
 26.35  or unfair manner; 
 26.36     (h) The continued operation of the health maintenance 
 27.1   organization would be hazardous to its enrollees; or 
 27.2      (i) The health maintenance organization has otherwise 
 27.3   failed to substantially comply with sections 62D.01 to 62D.30 or 
 27.4   with any other statute or administrative rule applicable to 
 27.5   health maintenance organizations, or has submitted false 
 27.6   information in any report required hereunder. 
 27.7      Sec. 38.  Minnesota Statutes 1998, section 62D.15, 
 27.8   subdivision 4, is amended to read: 
 27.9      Subd. 4.  When the certificate of authority of a health 
 27.10  maintenance organization is revoked, the organization shall 
 27.11  proceed, immediately following the effective date of the order 
 27.12  of revocation, to wind up its affairs, and shall conduct no 
 27.13  further business except as may be essential to the orderly 
 27.14  conclusion of the affairs of the organization. It shall engage 
 27.15  in no further advertising or solicitation whatsoever.  The 
 27.16  commissioner of health may, by written order, permit further 
 27.17  operation of the organization as the commissioner may find to be 
 27.18  in the best interest of enrollees, to the end that enrollees 
 27.19  will be afforded the greatest practical opportunity to obtain 
 27.20  continuing health care coverage. 
 27.21     Sec. 39.  Minnesota Statutes 1998, section 62D.16, 
 27.22  subdivision 1, is amended to read: 
 27.23     Subdivision 1.  When the commissioner of health has cause 
 27.24  to believe that grounds for the denial, suspension or revocation 
 27.25  of a certificate of authority exists, the commissioner shall 
 27.26  notify the health maintenance organization in writing 
 27.27  specifically stating the grounds for denial, suspension or 
 27.28  revocation and fixing a time of at least 20 days thereafter for 
 27.29  a hearing on the matter, except in summary proceedings as 
 27.30  provided in section 62D.18. 
 27.31     Sec. 40.  Minnesota Statutes 1998, section 62D.16, 
 27.32  subdivision 2, is amended to read: 
 27.33     Subd. 2.  After such hearing, or upon the failure of the 
 27.34  health maintenance organization to appear at the hearing, the 
 27.35  commissioner of health shall take action as is deemed advisable 
 27.36  and shall issue written findings which shall be mailed to the 
 28.1   health maintenance organization.  The action of the commissioner 
 28.2   of health shall be subject to judicial review pursuant to 
 28.3   chapter 14. 
 28.4      Sec. 41.  Minnesota Statutes 1998, section 62D.17, 
 28.5   subdivision 1, is amended to read: 
 28.6      Subdivision 1.  The commissioner of health may, for any 
 28.7   violation of statute or rule applicable to a health maintenance 
 28.8   organization, or in lieu of suspension or revocation of a 
 28.9   certificate of authority under section 62D.15, levy an 
 28.10  administrative penalty in an amount up to $25,000 for each 
 28.11  violation.  In the case of contracts or agreements made pursuant 
 28.12  to section 62D.05, subdivisions 2 to 4, each contract or 
 28.13  agreement entered into or implemented in a manner which violates 
 28.14  sections 62D.01 to 62D.30 shall be considered a separate 
 28.15  violation.  In determining the level of an administrative 
 28.16  penalty, the commissioner shall consider the following factors: 
 28.17     (1) the number of enrollees affected by the violation; 
 28.18     (2) the effect of the violation on enrollees' health and 
 28.19  access to health services; 
 28.20     (3) if only one enrollee is affected, the effect of the 
 28.21  violation on that enrollee's health; 
 28.22     (4) whether the violation is an isolated incident or part 
 28.23  of a pattern of violations; and 
 28.24     (5) the economic benefits derived by the health maintenance 
 28.25  organization or a participating provider by virtue of the 
 28.26  violation; and 
 28.27     (6) any recommendation made by the commissioner of health. 
 28.28     Reasonable notice in writing to the health maintenance 
 28.29  organization shall be given of the intent to levy the penalty 
 28.30  and the reasons therefor, and the health maintenance 
 28.31  organization may have 15 days within which to file a written 
 28.32  request for an administrative hearing and review of the 
 28.33  commissioner of health's commissioner's determination.  Such 
 28.34  administrative hearing shall be subject to judicial review 
 28.35  pursuant to chapter 14. 
 28.36     Sec. 42.  Minnesota Statutes 1998, section 62D.17, 
 29.1   subdivision 3, is amended to read: 
 29.2      Subd. 3.  (a) If the commissioner of health shall, for any 
 29.3   reason, have cause to believe that any violation of sections 
 29.4   62D.01 to 62D.30 has occurred or is threatened, the commissioner 
 29.5   of health may, before commencing action under sections 62D.15 
 29.6   and 62D.16, and subdivision 1, give notice to the health 
 29.7   maintenance organization and to the representatives, or other 
 29.8   persons who appear to be involved in such suspected violation, 
 29.9   to arrange a voluntary conference with the alleged violators or 
 29.10  their authorized representatives for the purpose of attempting 
 29.11  to ascertain the facts relating to such suspected violation and, 
 29.12  in the event it appears that any violation has occurred or is 
 29.13  threatened, to arrive at an adequate and effective means of 
 29.14  correcting or preventing such violation. 
 29.15     (b) Proceedings under this subdivision shall not be 
 29.16  governed by any formal procedural requirements, and may be 
 29.17  conducted in such manner as the commissioner of health may deem 
 29.18  appropriate under the circumstances. 
 29.19     Sec. 43.  Minnesota Statutes 1998, section 62D.17, 
 29.20  subdivision 4, is amended to read: 
 29.21     Subd. 4.  (a) The commissioner of health may issue an order 
 29.22  directing a health maintenance organization or a representative 
 29.23  of a health maintenance organization to cease and desist from 
 29.24  engaging in any act or practice in violation of the provisions 
 29.25  of sections 62D.01 to 62D.30. 
 29.26     (1) The cease and desist order may direct a health 
 29.27  maintenance organization to pay for or provide a service when 
 29.28  that service is required by statute or rule to be provided. 
 29.29     (2) The commissioner may issue a cease and desist order 
 29.30  directing may direct a health maintenance organization to pay 
 29.31  for a service that is required by statute or rule to be 
 29.32  provided, only if there is a demonstrable and irreparable harm 
 29.33  to the public or an enrollee.  
 29.34     (3) If the cease and desist order involves a dispute over 
 29.35  the medical necessity of a procedure based on its experimental 
 29.36  nature, the commissioner may issue a cease and desist order only 
 30.1   if the following conditions are met:  
 30.2      (i) the commissioner has consulted with appropriate and 
 30.3   identified experts; 
 30.4      (ii) the commissioner has reviewed relevant scientific and 
 30.5   medical literature; and 
 30.6      (iii) the commissioner has considered all other relevant 
 30.7   factors including whether final approval of the technology or 
 30.8   procedure has been granted by the appropriate government agency; 
 30.9   the availability of scientific evidence concerning the effect of 
 30.10  the technology or procedure on health outcomes; the availability 
 30.11  of scientific evidence that the technology or procedure is as 
 30.12  beneficial as established alternatives; and the availability of 
 30.13  evidence of benefit or improvement without the technology or 
 30.14  procedure. 
 30.15     (b) Within 20 days after service of the order to cease and 
 30.16  desist, the respondent may request a hearing on the question of 
 30.17  whether acts or practices in violation of sections 62D.01 to 
 30.18  62D.30 have occurred.  Such hearings shall be subject to 
 30.19  judicial review as provided by chapter 14. 
 30.20     If the acts or practices involve violation of the reporting 
 30.21  requirements of section 62D.08, or if the commissioner has 
 30.22  ordered the rehabilitation, liquidation, or conservation of the 
 30.23  health maintenance organization in accordance with section 
 30.24  62D.18, the health maintenance organization may request an 
 30.25  expedited hearing on the matter.  The hearing shall be held 
 30.26  within 15 days of the request.  Within ten days thereafter, an 
 30.27  administrative law judge shall issue a recommendation on the 
 30.28  matter.  The commissioner shall make a final determination on 
 30.29  the matter within ten days of receipt of the administrative law 
 30.30  judge's recommendation.  
 30.31     When a request for a stay accompanies the hearing request, 
 30.32  the matter shall be referred to the office of administrative 
 30.33  hearings within three working days of receipt of the request. 
 30.34  Within ten days thereafter, an administrative law judge shall 
 30.35  issue a recommendation to grant or deny the stay.  The 
 30.36  commissioner shall grant or deny the stay within five days of 
 31.1   receipt of the administrative law judge's recommendation. 
 31.2      To the extent the acts or practices alleged do not involve 
 31.3   (1) violations of section 62D.08; (2) violations which may 
 31.4   result in the financial insolvency of the health maintenance 
 31.5   organization; (3) violations which threaten the life and health 
 31.6   of enrollees; (4) violations which affect whole classes of 
 31.7   enrollees; or (5) violations of benefits or service requirements 
 31.8   mandated by law; if a timely request for a hearing is made, the 
 31.9   cease and desist order shall be stayed for a period of 90 days 
 31.10  from the date the hearing is requested or until a final 
 31.11  determination is made on the order, whichever is earlier.  
 31.12  During this stay, the respondent may show cause why the order 
 31.13  should not become effective upon the expiration of the stay.  
 31.14  Arguments on this issue shall be made through briefs filed with 
 31.15  the administrative law judge no later than ten days prior to the 
 31.16  expiration of the stay.  
 31.17     Sec. 44.  Minnesota Statutes 1998, section 62D.17, 
 31.18  subdivision 5, is amended to read: 
 31.19     Subd. 5.  In the event of noncompliance with a cease and 
 31.20  desist order issued pursuant to subdivision 4, the commissioner 
 31.21  of health may institute a proceeding to obtain injunctive relief 
 31.22  or other appropriate relief in Ramsey county district court. 
 31.23     Sec. 45.  Minnesota Statutes 1998, section 62D.18, 
 31.24  subdivision 1, is amended to read: 
 31.25     Subdivision 1.  [COMMISSIONER OF HEALTH; COURT ORDER.] The 
 31.26  commissioner of health may apply by verified petition to the 
 31.27  district court of Ramsey county or the county in which the 
 31.28  principal office of the health maintenance organization is 
 31.29  located for an order directing the commissioner of health to 
 31.30  rehabilitate or liquidate a health maintenance organization.  
 31.31  The rehabilitation or liquidation of a health maintenance 
 31.32  organization shall be conducted under the supervision of the 
 31.33  commissioner of health under the procedures, and with the powers 
 31.34  granted to a rehabilitator or liquidator, in chapter 60B, except 
 31.35  to the extent that the nature of health maintenance 
 31.36  organizations renders the procedures or powers clearly 
 32.1   inappropriate and as provided in this subdivision or in chapter 
 32.2   60B.  A health maintenance organization shall be considered an 
 32.3   insurance company for the purposes of rehabilitation or 
 32.4   liquidation as provided in subdivisions 4, 6, and 7. 
 32.5      Sec. 46.  Minnesota Statutes 1998, section 62D.18, 
 32.6   subdivision 7, is amended to read: 
 32.7      Subd. 7.  [EXAMINATION ACCOUNT.] The commissioner of health 
 32.8   shall assess against a health maintenance organization not yet 
 32.9   in rehabilitation or liquidation a fee sufficient to cover the 
 32.10  costs of a special examination.  The fee must be deposited in an 
 32.11  examination account.  Money in the account is appropriated to 
 32.12  the commissioner of health to pay for the examinations.  If the 
 32.13  money in the account is insufficient to pay the initial costs of 
 32.14  examinations, the commissioner may use other money appropriated 
 32.15  to the commissioner, provided the other appropriation is 
 32.16  reimbursed from the examination account when it contains 
 32.17  sufficient money.  Money from the examination account must be 
 32.18  used to pay per diem salaries and expenses of special examiners, 
 32.19  including meals, lodging, laundry, transportation, and mileage.  
 32.20  The salary of regular employees of the health commerce 
 32.21  department must not be paid out of the account. 
 32.22     Sec. 47.  Minnesota Statutes 1998, section 62D.19, is 
 32.23  amended to read: 
 32.24     62D.19 [UNREASONABLE EXPENSES.] 
 32.25     No health maintenance organization shall incur or pay for 
 32.26  any expense of any nature which is unreasonably high in relation 
 32.27  to the value of the service or goods provided.  The commissioner 
 32.28  of health shall implement and enforce this section by rules 
 32.29  adopted under this section. 
 32.30     In an effort to achieve the stated purposes of sections 
 32.31  62D.01 to 62D.30; in order to safeguard the underlying nonprofit 
 32.32  status of health maintenance organizations; and to ensure that 
 32.33  the payment of health maintenance organization money to major 
 32.34  participating entities results in a corresponding benefit to the 
 32.35  health maintenance organization and its enrollees, when 
 32.36  determining whether an organization has incurred an unreasonable 
 33.1   expense in relation to a major participating entity, due 
 33.2   consideration shall be given to, in addition to any other 
 33.3   appropriate factors, whether the officers and trustees of the 
 33.4   health maintenance organization have acted with good faith and 
 33.5   in the best interests of the health maintenance organization in 
 33.6   entering into, and performing under, a contract under which the 
 33.7   health maintenance organization has incurred an expense.  The 
 33.8   commissioner has standing to sue, on behalf of a health 
 33.9   maintenance organization, officers or trustees of the health 
 33.10  maintenance organization who have breached their fiduciary duty 
 33.11  in entering into and performing such contracts. 
 33.12     Sec. 48.  Minnesota Statutes 1998, section 62D.20, 
 33.13  subdivision 1, is amended to read: 
 33.14     Subdivision 1.  [RULEMAKING.] The commissioner of health 
 33.15  may, pursuant to chapter 14, promulgate such reasonable rules as 
 33.16  are necessary or proper to carry out the provisions of sections 
 33.17  62D.01 to 62D.30.  Included among such rules shall be those 
 33.18  which provide minimum requirements for the provision of 
 33.19  comprehensive health maintenance services, as defined in section 
 33.20  62D.02, subdivision 7, and reasonable exclusions therefrom.  
 33.21  Nothing in such rules shall force or require a health 
 33.22  maintenance organization to provide elective, induced abortions, 
 33.23  except as medically necessary to prevent the death of the 
 33.24  mother, whether performed in a hospital, other abortion 
 33.25  facility, or the office of a physician; the rules shall provide 
 33.26  every health maintenance organization the option of excluding or 
 33.27  including elective, induced abortions, except as medically 
 33.28  necessary to prevent the death of the mother, as part of its 
 33.29  comprehensive health maintenance services.  
 33.30     Sec. 49.  Minnesota Statutes 1998, section 62D.21, is 
 33.31  amended to read: 
 33.32     62D.21 [FEES.] 
 33.33     Every health maintenance organization subject to sections 
 33.34  62D.01 to 62D.30 shall pay to the commissioner of health fees as 
 33.35  prescribed by the commissioner of health pursuant to section 
 33.36  144.122 for the following: 
 34.1      (a) Filing an application for a certificate of authority, 
 34.2      (b) Filing an amendment to a certificate of authority, 
 34.3      (c) Filing each annual report, and 
 34.4      (d) Other filings, as specified by rule. 
 34.5      Sec. 50.  Minnesota Statutes 1998, section 62D.211, is 
 34.6   amended to read: 
 34.7      62D.211 [RENEWAL FEE.] 
 34.8      Each health maintenance organization subject to sections 
 34.9   62D.01 to 62D.30 shall submit to the commissioner of health each 
 34.10  year before June 15 a certificate of authority renewal fee in 
 34.11  the amount of $10,000 each plus 20 cents per person enrolled in 
 34.12  the health maintenance organization on December 31 of the 
 34.13  preceding year.  The commissioner may adjust the renewal fee in 
 34.14  rule under the provisions of chapter 14. 
 34.15     Sec. 51.  Minnesota Statutes 1998, section 62D.22, 
 34.16  subdivision 4, is amended to read: 
 34.17     Subd. 4.  To the extent that it furthers the purposes of 
 34.18  sections 62D.01 to 62D.30, the commissioner of health shall 
 34.19  attempt to coordinate the operations of sections 62D.01 to 
 34.20  62D.30 relating to the quality of health care services with the 
 34.21  operations of United States Code, title 42, sections 1320c to 
 34.22  1320c-20.  The commissioner shall seek and consider 
 34.23  recommendations from the commissioner of health regarding this 
 34.24  coordination. 
 34.25     Sec. 52.  Minnesota Statutes 1998, section 62D.22, 
 34.26  subdivision 10, is amended to read: 
 34.27     Subd. 10.  Any person or committee conducting a review of a 
 34.28  health maintenance organization or a participating entity, 
 34.29  pursuant to sections 62D.01 to 62D.30, shall have access to any 
 34.30  data or information necessary to conduct the review.  All data 
 34.31  or information is subject to admission into evidence in any 
 34.32  civil action initiated by the commissioner of health against the 
 34.33  health maintenance organization.  The data and information are 
 34.34  subject to chapter 13.  
 34.35     Sec. 53.  Minnesota Statutes 1998, section 62D.24, is 
 34.36  amended to read: 
 35.1      62D.24 [STATE COMMISSIONER OF HEALTH'S AUTHORITY TO 
 35.2   CONTRACT.] 
 35.3      The commissioner of health, in carrying out the obligations 
 35.4   under sections 62D.01 to 62D.30, may contract with the 
 35.5   commissioner of commerce health or other qualified persons to 
 35.6   make recommendations concerning the determinations required to 
 35.7   be made.  Such recommendations may be accepted in full or in 
 35.8   part by the commissioner of health. 
 35.9      Sec. 54.  Minnesota Statutes 1998, section 62D.30, 
 35.10  subdivision 1, is amended to read: 
 35.11     Subdivision 1.  The commissioner of health may establish 
 35.12  demonstration projects to allow health maintenance organizations 
 35.13  to extend coverage to:  
 35.14     (a) Individuals enrolled in Part A or Part B, or both, of 
 35.15  the Medicare program, Title XVIII of the Social Security Act, 
 35.16  United States Code, title 42, section 1395 et seq.; 
 35.17     (b) Groups of fewer than 50 employees where each group is 
 35.18  covered by a single group health policy; 
 35.19     (c) Individuals who are not eligible for enrollment in any 
 35.20  group health maintenance contracts; and 
 35.21     (d) Low income population groups.  
 35.22     For purposes of this section, the commissioner of health 
 35.23  may waive compliance with minimum benefits pursuant to sections 
 35.24  62A.151 and 62D.02, subdivision 7, full financial risk pursuant 
 35.25  to section 62D.04, subdivision 1, clause (f), open enrollment 
 35.26  pursuant to section 62D.10, and to applicable rules if there is 
 35.27  reasonable evidence that the rules prohibit the operation of the 
 35.28  demonstration project.  The commissioner shall provide for 
 35.29  public comment before any statute or rule is waived.  
 35.30     Sec. 55.  Minnesota Statutes 1998, section 62D.30, 
 35.31  subdivision 3, is amended to read: 
 35.32     Subd. 3.  A health maintenance organization electing to 
 35.33  participate in a demonstration project shall apply to the 
 35.34  commissioner for approval on a form developed by the 
 35.35  commissioner.  The application shall include at least the 
 35.36  following:  
 36.1      (a) A statement identifying the population that the project 
 36.2   is designed to serve; 
 36.3      (b) A description of the proposed project including a 
 36.4   statement projecting a schedule of costs and benefits for the 
 36.5   enrollee; 
 36.6      (c) Reference to the sections of Minnesota Statutes and 
 36.7   department of health commerce rules for which waiver is 
 36.8   requested; 
 36.9      (d) Evidence that application of the requirements of 
 36.10  applicable Minnesota Statutes and department of health commerce 
 36.11  rules would, unless waived, prohibit the operation of the 
 36.12  demonstration project; 
 36.13     (e) Evidence that another arrangement is available for 
 36.14  assumption of full financial risk if full financial risk is 
 36.15  waived under subdivision 1; 
 36.16     (f) An estimate of the number of years needed to adequately 
 36.17  demonstrate the project's effects; and 
 36.18     (g) Other information the commissioner may reasonably 
 36.19  require. 
 36.20     Sec. 56.  [REPORT; UNIFORM REGULATION OF HEALTH PLAN 
 36.21  COMPANIES.] 
 36.22     The commissioners of commerce and health shall study the 
 36.23  issues involved in consistent regulation of health plan 
 36.24  companies of all types and shall provide written recommendations 
 36.25  to the legislature, in accordance with Minnesota Statutes, 
 36.26  section 3.195, no later than February 15, 2000. 
 36.27     Sec. 57.  [EFFECT OF TRANSFER OF RESPONSIBILITIES.] 
 36.28     Minnesota Statutes, section 15.039, applies to this act. 
 36.29     Sec. 58.  [REPEALER.] 
 36.30     Minnesota Statutes 1998, section 62D.18, is repealed. 
 36.31     Sec. 59.  [EFFECTIVE DATE.] 
 36.32     This article is effective July 1, 2000. 
 36.33                             ARTICLE 2 
 36.34           COMMUNITY INTEGRATED SERVICE NETWORKS, HEALTH 
 36.35      CARE COOPERATIVES, AND COMMUNITY PURCHASING ARRANGEMENTS 
 36.36     Section 1.  Minnesota Statutes 1998, section 62N.02, 
 37.1   subdivision 4, is amended to read: 
 37.2      Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 37.3   commissioner of health commerce or the commissioner's designated 
 37.4   representative.  With respect to this chapter, the commissioner 
 37.5   of health has the same role as under chapter 62D. 
 37.6      Sec. 2.  Minnesota Statutes 1998, section 62N.26, is 
 37.7   amended to read: 
 37.8      62N.26 [SHARED SERVICES COOPERATIVE.] 
 37.9      The commissioner of health shall establish, or assist in 
 37.10  establishing, a shared services cooperative organized under 
 37.11  chapter 308A to make available administrative and legal 
 37.12  services, technical assistance, provider contracting and billing 
 37.13  services, and other services to those community integrated 
 37.14  service networks that choose to participate in the cooperative.  
 37.15  The commissioner shall provide, to the extent funds are 
 37.16  appropriated, start-up loans sufficient to maintain the shared 
 37.17  services cooperative until its operations can be maintained by 
 37.18  fees and contributions.  The cooperative must not be staffed, 
 37.19  administered, or supervised by the commissioner of health.  The 
 37.20  cooperative shall make use of existing resources that are 
 37.21  already available in the community, to the extent possible. 
 37.22     Sec. 3.  Minnesota Statutes 1998, section 62N.31, 
 37.23  subdivision 1, is amended to read: 
 37.24     Subdivision 1.  [GENERAL.] Each health care providing 
 37.25  entity seeking initial accreditation as an accredited capitated 
 37.26  provider shall submit to the commissioner of health sufficient 
 37.27  information to establish that the applicant has operational 
 37.28  capacity, facilities, personnel, and financial capability to 
 37.29  provide the contracted covered services to the enrollees of the 
 37.30  network for which it seeks accreditation (1) on an ongoing 
 37.31  basis; and (2) for a period of 120 days following the insolvency 
 37.32  of the network without receiving payment from the network.  
 37.33  Accreditation shall continue until abandoned by the accredited 
 37.34  capitated provider or revoked by the commissioner in accordance 
 37.35  with subdivision 4.  The applicant may establish financial 
 37.36  capability by demonstrating that the provider amount at risk can 
 38.1   be covered by or through any of allocated or restricted funds, a 
 38.2   letter of credit, the taxing authority of the applicant or 
 38.3   governmental sponsor of the applicant, an unrestricted fund 
 38.4   balance at least two times the provider amount at risk, 
 38.5   reinsurance, either purchased directly by the applicant or by 
 38.6   the community network to which it will be accredited, or any 
 38.7   other method accepted by the commissioner.  Accreditation of a 
 38.8   health care providing entity shall not in itself limit the right 
 38.9   of the accredited capitated provider to seek payment of unpaid 
 38.10  capitated amounts from a community network, whether the 
 38.11  community network is solvent or insolvent; provided that, if the 
 38.12  community network is subject to any liquidation, rehabilitation, 
 38.13  or conservation proceedings, the accredited capitated provider 
 38.14  shall have the status accorded creditors under section 60B.44, 
 38.15  subdivision 10. 
 38.16     Sec. 4.  Minnesota Statutes 1998, section 62R.04, 
 38.17  subdivision 5, is amended to read: 
 38.18     Subd. 5.  [COMMISSIONER.] Unless otherwise specified, 
 38.19  "commissioner" means the commissioner of health for a health 
 38.20  care network cooperative licensed under chapter 62D or 62N and 
 38.21  the commissioner of commerce for a health care network 
 38.22  cooperative licensed under chapter 62C.  With respect to this 
 38.23  chapter, the commissioner of health has the same role as under 
 38.24  chapter 62D. 
 38.25     Sec. 5.  Minnesota Statutes 1998, section 62R.25, is 
 38.26  amended to read: 
 38.27     62R.25 [NOTIFICATION OF CONTRACT; REPORT TO LEGISLATURE.] 
 38.28     (a) Each health provider cooperative shall notify the 
 38.29  office of rural health commissioner in writing upon entering a 
 38.30  contract described in section 62R.17. 
 38.31     (b) The department of health, office of rural health, shall 
 38.32  provide an information report to the MinnesotaCare finance 
 38.33  division of the house health and human services committee and 
 38.34  the senate health care committee no later than January 15, 1999, 
 38.35  on the status of direct contracting between health provider 
 38.36  cooperatives and self-insured employer plans or qualified 
 39.1   employers in accordance with sections 62R.17 to 62R.26.  The 
 39.2   report shall consider the effects on public policy and on health 
 39.3   provider cooperatives of a possible requirement that health 
 39.4   provider cooperatives using direct contracting be obligated to 
 39.5   become community integrated service networks. 
 39.6      Sec. 6.  Minnesota Statutes 1998, section 62T.01, 
 39.7   subdivision 4, is amended to read: 
 39.8      Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 39.9   commissioner of health commerce.  With respect to this chapter, 
 39.10  the commissioner of health has the same role as under chapter 
 39.11  62D. 
 39.12     Sec. 7.  [EFFECTIVE DATE.] 
 39.13     This article is effective July 1, 2000. 
 39.14                             ARTICLE 3 
 39.15                         CONFORMING CHANGES 
 39.16     Section 1.  Minnesota Statutes 1998, section 60B.02, is 
 39.17  amended to read: 
 39.18     60B.02 [PERSONS COVERED.] 
 39.19     The proceedings authorized by sections 60B.01 to 60B.61 may 
 39.20  be applied to: 
 39.21     (1) All insurers who are doing, or have done, an insurance 
 39.22  business in this state, and against whom claims arising from 
 39.23  that business may exist now or in the future; 
 39.24     (2) All insurers who purport to do an insurance business in 
 39.25  this state; 
 39.26     (3) All insurers who have insureds resident in this state; 
 39.27     (4) All other persons organized or in the process of 
 39.28  organizing with the intent to do an insurance business in this 
 39.29  state; and 
 39.30     (5) All nonprofit service plan corporations incorporated or 
 39.31  operating under the Nonprofit Health Service Plan Corporation 
 39.32  Act, health maintenance organizations operating under chapter 
 39.33  62D, any health plan incorporated under chapter 317A, all 
 39.34  fraternal benefit societies operating under chapter 64B, except 
 39.35  those associations enumerated in section 64B.38, all township 
 39.36  mutual or other companies operating under chapter 67A, and all 
 40.1   reciprocals or interinsurance exchanges operating under chapter 
 40.2   71A. 
 40.3      Sec. 2.  Minnesota Statutes 1998, section 60B.03, 
 40.4   subdivision 2, is amended to read: 
 40.5      Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 40.6   commissioner of commerce of the state of Minnesota and, in that 
 40.7   commissioner's absence or disability, a deputy or other person 
 40.8   duly designated to act in that commissioner's place.  In the 
 40.9   context of rehabilitation or liquidation of a health maintenance 
 40.10  organization, "commissioner" means the commissioner of health of 
 40.11  the state of Minnesota and, in that commissioner's absence or 
 40.12  disability, a deputy or other person duly designated to act in 
 40.13  that commissioner's place. 
 40.14     Sec. 3.  Minnesota Statutes 1998, section 60B.03, 
 40.15  subdivision 4, is amended to read: 
 40.16     Subd. 4.  [INSURER.] "Insurer" means any person who is 
 40.17  doing, has done, purports to do or is licensed to do an 
 40.18  insurance business and is or has been subject to the authority 
 40.19  of, or to liquidation, rehabilitation, reorganization, or 
 40.20  conservation by, a the commissioner.  For purposes of sections 
 40.21  60B.01 to 60B.61, all other persons included under section 
 40.22  60B.02 shall be deemed to be insurers. 
 40.23     Sec. 4.  Minnesota Statutes 1998, section 60B.15, is 
 40.24  amended to read: 
 40.25     60B.15 [GROUNDS FOR REHABILITATION.] 
 40.26     The commissioner may apply by verified petition to the 
 40.27  district court for Ramsey county or for the county in which the 
 40.28  principal office of the insurer is located for an order 
 40.29  directing the commissioner to rehabilitate a domestic insurer or 
 40.30  an alien insurer domiciled in this state on any one or more of 
 40.31  the following grounds: 
 40.32     (1) Any ground on which the commissioner may apply for an 
 40.33  order of liquidation under section 60B.20, whenever the 
 40.34  commissioner believes that the insurer may be successfully 
 40.35  rehabilitated without substantial increase in the risk of loss 
 40.36  to creditors of the insurer, its policyholders or to the public; 
 41.1      (2) That the commissioner has reasonable cause to believe 
 41.2   that there has been theft from the insurer, wrongful 
 41.3   sequestration or diversion of the insurer's assets, forgery or 
 41.4   fraud affecting the insurer or other illegal conduct in, by or 
 41.5   with respect to the insurer, which endanger assets in an amount 
 41.6   threatening insolvency of the insurer; 
 41.7      (3) That substantial and unexplained discrepancies exist 
 41.8   between the insurer's records and the most recent annual report 
 41.9   or other official company reports; 
 41.10     (4) That the insurer, after written demand by the 
 41.11  commissioner, has failed to remove any person who in fact has 
 41.12  executive authority in the insurer, whether an officer, manager, 
 41.13  general agent, employee, or other person, if the person has been 
 41.14  found by the commissioner after notice and hearing to be 
 41.15  dishonest or untrustworthy in a way affecting the insurer's 
 41.16  business such as is the basis for action under section 60A.052; 
 41.17     (5) That control of the insurer, whether by stock ownership 
 41.18  or otherwise, and whether direct or indirect, is in one or more 
 41.19  persons found by the commissioner after notice and hearing to be 
 41.20  dishonest or untrustworthy such as is the basis for action under 
 41.21  section 60A.052; 
 41.22     (6) That the insurer, after written demand by the 
 41.23  commissioner, has failed within a reasonable period of time to 
 41.24  terminate the employment and status and all influences on 
 41.25  management of any person who in fact has executive authority in 
 41.26  the insurer, whether an officer, manager, general agent, 
 41.27  employee or other person if the person has refused to submit to 
 41.28  lawful examination under oath by the commissioner concerning the 
 41.29  affairs of the insurer, whether in this state or elsewhere; 
 41.30     (7) That after lawful written demand by the commissioner 
 41.31  the insurer has failed to submit promptly any of its own 
 41.32  property, books, accounts, documents, or other records, or those 
 41.33  of any subsidiary or related company within the control of the 
 41.34  insurer, or those of any person having executive authority in 
 41.35  the insurer so far as they pertain to the insurer, to reasonable 
 41.36  inspection or examination by the commissioner or an authorized 
 42.1   representative.  If the insurer is unable to submit the 
 42.2   property, books, accounts, documents, or other records of a 
 42.3   person having executive authority in the insurer, it shall be 
 42.4   excused from doing so if it promptly and effectively terminates 
 42.5   the relationship of the person to the insurer; 
 42.6      (8) That without first obtaining the written consent of the 
 42.7   commissioner, or if required by law, the written consent of the 
 42.8   attorney general, the insurer has transferred, or attempted to 
 42.9   transfer, substantially its entire property or business, or has 
 42.10  entered into any transaction the effect of which is to merge, 
 42.11  consolidate, or reinsure substantially its entire property or 
 42.12  business of any other person; 
 42.13     (9) That the insurer or its property has been or is the 
 42.14  subject of an application for the appointment of a receiver, 
 42.15  trustee, custodian, conservator or sequestrator or similar 
 42.16  fiduciary of the insurer or its property otherwise than as 
 42.17  authorized under sections 60B.01 to 60B.61, and that such 
 42.18  appointment has been made or is imminent, and that such 
 42.19  appointment might divest the courts of this state of 
 42.20  jurisdiction or prejudice orderly delinquency proceedings under 
 42.21  sections 60B.01 to 60B.61; 
 42.22     (10) That within the previous year the insurer has 
 42.23  willfully violated its charter or articles of incorporation or 
 42.24  its bylaws or any applicable insurance law or regulation of any 
 42.25  state, or of the federal government, or any valid order of the 
 42.26  commissioner under section 60B.11 in any manner or as to any 
 42.27  matter which threatens substantial injury to the insurer, its 
 42.28  creditors, it policyholders or the public, or having become 
 42.29  aware within the previous year of an unintentional or willful 
 42.30  violation has failed to take all reasonable steps to remedy the 
 42.31  situation resulting from the violation and to prevent the same 
 42.32  violations in the future; 
 42.33     (11) That the directors of the insurer are deadlocked in 
 42.34  the management of the insurer's affairs and that the members or 
 42.35  shareholders are unable to break the deadlock and that 
 42.36  irreparable injury to the insurer, its creditors, its 
 43.1   policyholders, or the public is threatened by reason thereof; 
 43.2      (12) That the insurer has failed to pay for 60 days after 
 43.3   due date any obligation to this state or any political 
 43.4   subdivision thereof or any judgment entered in this state, 
 43.5   except that such nonpayment shall not be a ground until 60 days 
 43.6   after any good faith effort by the insurer to contest the 
 43.7   obligation or judgment has been terminated, whether it is before 
 43.8   the commissioner or in the courts; 
 43.9      (13) That the insurer has failed to file its annual report 
 43.10  or other report within the time allowed by law, and after 
 43.11  written demand by the commissioner has failed to give an 
 43.12  adequate explanation immediately; 
 43.13     (14) That two-thirds of the board of directors, or the 
 43.14  holders of a majority of the shares entitled to vote, or a 
 43.15  majority of members or policyholders of an insurer subject to 
 43.16  control by its members or policyholders, consent to 
 43.17  rehabilitation under sections 60B.01 to 60B.61; 
 43.18     (15) That the insurer is engaging in a systematic practice 
 43.19  of reaching settlements with and obtaining releases from 
 43.20  policyholders or third party claimants and then unreasonably 
 43.21  delaying payment of or failing to pay the agreed upon 
 43.22  settlements; 
 43.23     (16) That the insurer is in such condition that the further 
 43.24  transaction of business would be hazardous, financially or 
 43.25  otherwise, to its policyholders, its creditors, or the public; 
 43.26     (17) That within the previous 12 months the insurer has 
 43.27  systematically attempted to compromise with its creditors on the 
 43.28  ground that it is financially unable to pay its claims in full; 
 43.29     (18) In the context of a health maintenance organization, 
 43.30  "insurer" when used in clauses (1) to (17) means "health 
 43.31  maintenance organization." In addition to the grounds in clauses 
 43.32  (1) to (17), any one of the following constitutes grounds for 
 43.33  rehabilitation of a health maintenance organization: 
 43.34     (a) the health maintenance organization is unable or is 
 43.35  expected to be unable to meet its debts as they become due; 
 43.36     (b) grounds exist under section 62D.042, subdivision 7; 
 44.1      (c) the health maintenance organization's liabilities 
 44.2   exceed the current value of its assets, exclusive of intangibles 
 44.3   and, where the guaranteeing organization's financial condition 
 44.4   no longer meets the requirements of sections 62D.041 and 
 44.5   62D.042, exclusive of any deposits, letters of credit, or 
 44.6   guarantees provided by any guaranteeing organization under 
 44.7   chapter 62D; 
 44.8      (d) in addition to grounds under clause (16), within the 
 44.9   last year the health maintenance organization has failed, and 
 44.10  the commissioner of health expects such failure to continue in 
 44.11  the future, to make comprehensive medical care adequately 
 44.12  available and accessible to its enrollees and the health 
 44.13  maintenance organization has not successfully implemented a plan 
 44.14  of corrective action pursuant to section 62D.121, subdivision 7; 
 44.15  and 
 44.16     (e) in addition to grounds under clause (16), within the 
 44.17  last year the directors or officers of the health maintenance 
 44.18  organization willfully violated the requirements of section 
 44.19  317A.251, or having become aware within the previous year of an 
 44.20  unintentional or willful violation of section 317A.251, have 
 44.21  failed to take all reasonable steps to remedy the situation 
 44.22  resulting from the violation and to prevent the same violation 
 44.23  in the future; 
 44.24     (19) An affiliate of the insurer has been placed in 
 44.25  conservatorship, rehabilitation, liquidation, or other court 
 44.26  supervision such that the insurer's financial condition may be 
 44.27  jeopardized.  
 44.28     Sec. 5.  Minnesota Statutes 1998, section 60B.20, is 
 44.29  amended to read: 
 44.30     60B.20 [GROUNDS FOR LIQUIDATION.] 
 44.31     The commissioner may apply by verified petition to the 
 44.32  district court for Ramsey county or for the county in which the 
 44.33  principal office of the insurer is located for an order to 
 44.34  liquidate a domestic insurer or an alien insurer domiciled in 
 44.35  this state on any one or more of the following grounds: 
 44.36     (1) Any ground on which the commissioner may apply for an 
 45.1   order of rehabilitation under section 60B.15, whenever the 
 45.2   commissioner believes that attempts to rehabilitate the insurer 
 45.3   would substantially increase the risk of loss to its creditors, 
 45.4   its policyholders, or the public, or would be futile, or that 
 45.5   rehabilitation would serve no useful purpose; 
 45.6      (2) That the insurer is or is about to become insolvent; 
 45.7      (3) That the insurer has not transacted the business for 
 45.8   which it was organized or incorporated during the previous 12 
 45.9   months or has transacted only a token such business during that 
 45.10  period, although authorized to do so throughout that period, or 
 45.11  that more than 12 months after incorporation it has failed to 
 45.12  become authorized to do the business for which it was organized 
 45.13  or incorporated; 
 45.14     (4) That the insurer has commenced, or within the previous 
 45.15  year has attempted to commence, voluntary dissolution or 
 45.16  liquidation otherwise than as provided in section 60B.04, 
 45.17  subdivision 3 in the case of a solvent insurer; 
 45.18     (5) That the insurer has concealed records or assets from 
 45.19  the commissioner or improperly removed them from the 
 45.20  jurisdiction, or the commissioner believes that the insurer is 
 45.21  about to do so; 
 45.22     (6) That the insurer does not satisfy the requirements that 
 45.23  would be applicable if it were seeking initial authorization in 
 45.24  this state to do the business for which it was organized or 
 45.25  incorporated, except for: 
 45.26     (i) Requirements that are intended to apply only at the 
 45.27  time the initial authorization to do business is obtained, and 
 45.28  not thereafter; and 
 45.29     (ii) Requirements that are expressly made inapplicable by 
 45.30  the laws establishing the requirements; 
 45.31     (7) That the holders of two-thirds of the shares entitled 
 45.32  to vote, or two-thirds of the members or policyholders entitled 
 45.33  to vote in an insurer controlled by its members or 
 45.34  policyholders, have consented to a petition; 
 45.35     (8) In the context of a health maintenance organization, 
 45.36  "insurer" when used in clauses (1) to (7) means "health 
 46.1   maintenance organization." In addition to the grounds in clauses 
 46.2   (1) to (7), any one of the following constitutes grounds for 
 46.3   liquidation of a health maintenance organization: 
 46.4      (i) the health maintenance organization is unable or is 
 46.5   expected to be unable to meet its debts as they become due; 
 46.6      (ii) grounds exist under section 62D.042, subdivision 7; 
 46.7      (iii) the health maintenance organization's liabilities 
 46.8   exceed the current value of its assets, exclusive of intangibles 
 46.9   and, where the guaranteeing organization's financial condition 
 46.10  no longer meets the requirements of sections 62D.041 and 
 46.11  62D.042, exclusive of any deposits, letters of credit, or 
 46.12  guarantees provided by any guaranteeing organization under 
 46.13  chapter 62D; 
 46.14     (iv) within the last year the health maintenance 
 46.15  organization has failed, and the commissioner of health expects 
 46.16  failure to continue in the future, to make comprehensive medical 
 46.17  care adequately available and accessible to its enrollees and 
 46.18  the health maintenance organization has not successfully 
 46.19  implemented a plan of corrective action pursuant to section 
 46.20  62D.121, subdivision 7; and 
 46.21     (v) within the last year the directors or officers of the 
 46.22  health maintenance organization willfully violated the 
 46.23  requirements of section 317A.251, or having become aware within 
 46.24  the previous year of an unintentional or willful violation of 
 46.25  section 317A.251, have failed to take all reasonable steps to 
 46.26  remedy the situation resulting from the violation and to prevent 
 46.27  the same violation in the future. 
 46.28     Sec. 6.  Minnesota Statutes 1998, section 60G.01, 
 46.29  subdivision 2, is amended to read: 
 46.30     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 46.31  commissioner of commerce, except that "commissioner" means the 
 46.32  commissioner of health for administrative supervision of health 
 46.33  maintenance organizations. 
 46.34     Sec. 7.  Minnesota Statutes 1998, section 60G.01, 
 46.35  subdivision 4, is amended to read: 
 46.36     Subd. 4.  [DEPARTMENT.] "Department" means the department 
 47.1   of commerce, except that "department" means the department of 
 47.2   health for administrative supervision of health maintenance 
 47.3   organizations. 
 47.4      Sec. 8.  Minnesota Statutes 1998, section 62A.61, is 
 47.5   amended to read: 
 47.6      62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO 
 47.7   DETERMINE USUAL AND CUSTOMARY FEES.] 
 47.8      (a) A health carrier that bases reimbursement to health 
 47.9   care providers upon a usual and customary fee must maintain in 
 47.10  its office a copy of a description of the methodology used to 
 47.11  calculate fees including at least the following: 
 47.12     (1) the frequency of the determination of usual and 
 47.13  customary fees; 
 47.14     (2) a general description of the methodology used to 
 47.15  determine usual and customary fees; and 
 47.16     (3) the percentile of usual and customary fees that 
 47.17  determines the maximum allowable reimbursement. 
 47.18     (b) A health carrier must provide a copy of the information 
 47.19  described in paragraph (a) to the commissioner of health or the 
 47.20  commissioner of commerce, upon request. 
 47.21     (c) The commissioner of health or the commissioner of 
 47.22  commerce, as appropriate, may use to enforce this section any 
 47.23  enforcement powers otherwise available to the commissioner with 
 47.24  respect to the health carrier.  The commissioner of health or 
 47.25  commerce, as appropriate, may require health carriers to provide 
 47.26  the information required under this section and may use any 
 47.27  powers granted under other laws relating to the regulation of 
 47.28  health carriers to enforce compliance. 
 47.29     (d) For purposes of this section, "health carrier" has the 
 47.30  meaning given in section 62A.011. 
 47.31     Sec. 9.  Minnesota Statutes 1998, section 62L.02, 
 47.32  subdivision 8, is amended to read: 
 47.33     Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
 47.34  commissioner of commerce for health carriers subject to the 
 47.35  jurisdiction of the department of commerce or the commissioner 
 47.36  of health for health carriers subject to the jurisdiction of the 
 48.1   department of health, or the relevant commissioner's designated 
 48.2   representative.  For purposes of sections 62L.13 to 62L.22, 
 48.3   "commissioner" means the commissioner of commerce or that 
 48.4   commissioner's designated representative. 
 48.5      Sec. 10.  Minnesota Statutes 1998, section 62L.05, 
 48.6   subdivision 12, is amended to read: 
 48.7      Subd. 12.  [DEMONSTRATION PROJECTS.] Nothing in this 
 48.8   chapter prohibits a health maintenance organization from 
 48.9   offering a demonstration project authorized under section 62D.30.
 48.10  The commissioner of health may approve a demonstration project 
 48.11  which offers benefits that do not meet the requirements of a 
 48.12  small employer plan if the commissioner finds that the 
 48.13  requirements of section 62D.30 are otherwise met. 
 48.14     Sec. 11.  Minnesota Statutes 1998, section 62L.08, 
 48.15  subdivision 10, is amended to read: 
 48.16     Subd. 10.  [RATING REPORT.] Beginning January 1, 1995, and 
 48.17  annually thereafter, the commissioners of health and 
 48.18  commerce commissioner shall provide a joint report to the 
 48.19  legislature on the effect of the rating restrictions required by 
 48.20  this section and the appropriateness of proceeding with 
 48.21  additional rate reform.  Each report must include an analysis of 
 48.22  the availability of health care coverage due to the rating 
 48.23  reform, the equitable and appropriate distribution of risk and 
 48.24  associated costs, the effect on the self-insurance market, and 
 48.25  any resulting or anticipated change in health plan design and 
 48.26  market share and availability of health carriers. 
 48.27     Sec. 12.  Minnesota Statutes 1998, section 62L.08, 
 48.28  subdivision 11, is amended to read: 
 48.29     Subd. 11.  [LOSS RATIO STANDARDS.] Notwithstanding section 
 48.30  62A.02, subdivision 3, relating to loss ratios, each policy or 
 48.31  contract form used with respect to a health benefit plan 
 48.32  offered, or issued in the small employer market, is subject, 
 48.33  beginning July 1, 1993, to section 62A.021.  The commissioner of 
 48.34  health has, with respect to carriers under that commissioner's 
 48.35  jurisdiction, all of the powers of the commissioner of commerce 
 48.36  under that section. 
 49.1      Sec. 13.  Minnesota Statutes 1998, section 62M.11, is 
 49.2   amended to read: 
 49.3      62M.11 [COMPLAINTS TO COMMERCE OR HEALTH.] 
 49.4      Notwithstanding the provisions of sections 62M.01 to 
 49.5   62M.16, an enrollee may file a complaint regarding a 
 49.6   determination not to certify directly to the commissioner 
 49.7   responsible for regulating the utilization review 
 49.8   organization of commerce. 
 49.9      Sec. 14.  Minnesota Statutes 1998, section 62M.16, is 
 49.10  amended to read: 
 49.11     62M.16 [RULEMAKING.] 
 49.12     If it is determined that rules are reasonable and necessary 
 49.13  to accomplish the purpose of sections 62M.01 to 62M.16, the 
 49.14  rules must be adopted through a joint rulemaking process by both 
 49.15  the department of commerce and the department of health by the 
 49.16  commissioner of commerce. 
 49.17     Sec. 15.  Minnesota Statutes 1998, section 62Q.01, 
 49.18  subdivision 2, is amended to read: 
 49.19     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 49.20  commissioner of health for purposes of regulating health 
 49.21  maintenance organizations, and community integrated service 
 49.22  networks, or the commissioner of commerce for purposes of 
 49.23  regulating all other health plan companies.  For all other 
 49.24  purposes, "commissioner" means the commissioner of health. 
 49.25     Sec. 16.  Minnesota Statutes 1998, section 62Q.07, is 
 49.26  amended to read: 
 49.27     62Q.07 [ACTION PLANS.] 
 49.28     Subdivision 1.  [ACTION PLANS REQUIRED.] (a) To increase 
 49.29  public awareness and accountability of health plan companies, 
 49.30  all health plan companies that issue or renew a health plan, as 
 49.31  defined in section 62Q.01, must annually file with the 
 49.32  applicable commissioner an action plan that satisfies the 
 49.33  requirements of this section beginning July 1, 1994, as a 
 49.34  condition of doing business in Minnesota.  For purposes of this 
 49.35  subdivision, "health plan" includes the coverages described in 
 49.36  section 62A.011, subdivision 3, clause (10).  Each health plan 
 50.1   company must also file its action plan with the information 
 50.2   clearinghouse.  Action plans are required solely to provide 
 50.3   information to consumers, purchasers, and the larger community 
 50.4   as a first step toward greater accountability of health plan 
 50.5   companies.  The sole function of the commissioner in relation to 
 50.6   the action plans is to ensure that each health plan company 
 50.7   files a complete action plan, that the action plan is truthful 
 50.8   and not misleading, and that the action plan is reviewed by 
 50.9   appropriate community agencies. 
 50.10     (b) If a the commissioner responsible for regulating a 
 50.11  health plan company required to file an action plan under this 
 50.12  section has reason to believe an action plan is false or 
 50.13  misleading, the commissioner may conduct an investigation to 
 50.14  determine whether the action plan is truthful and not 
 50.15  misleading, and may require the health plan company to submit 
 50.16  any information that the commissioner reasonably deems necessary 
 50.17  to complete the investigation.  If the commissioner determines 
 50.18  that an action plan is false or misleading, the commissioner may 
 50.19  require the health plan company to file an amended plan or may 
 50.20  take any action authorized under chapter 72A. 
 50.21     Subd. 2.  [CONTENTS OF ACTION PLANS.] (a) An action plan 
 50.22  must include a detailed description of all of the health plan 
 50.23  company's methods and procedures, standards, qualifications, 
 50.24  criteria, and credentialing requirements for designating the 
 50.25  providers who are eligible to participate in the health plan 
 50.26  company's provider network, including any limitations on the 
 50.27  numbers of providers to be included in the network.  This 
 50.28  description must be updated by the health plan company and filed 
 50.29  with the applicable agency commissioner on a quarterly basis.  
 50.30     (b) An action plan must include the number of full-time 
 50.31  equivalent physicians, by specialty, nonphysician providers, and 
 50.32  allied health providers used to provide services.  The action 
 50.33  plan must also describe how the health plan company intends to 
 50.34  encourage the use of nonphysician providers, midlevel 
 50.35  practitioners, and allied health professionals, through at least 
 50.36  consumer education, physician education, and referral and 
 51.1   advisement systems.  The annual action plan must also include 
 51.2   data that is broken down by type of provider, reflecting actual 
 51.3   utilization of midlevel practitioners and allied professionals 
 51.4   by enrollees of the health plan company during the previous 
 51.5   year.  Until July 1, 1995, a health plan company may use 
 51.6   estimates if actual data is not available.  For purposes of this 
 51.7   paragraph, "provider" has the meaning given in section 62J.03, 
 51.8   subdivision 8.  
 51.9      (c) An action plan must include a description of the health 
 51.10  plan company's policy on determining the number and the type of 
 51.11  providers that are necessary to deliver cost-effective health 
 51.12  care to its enrollees.  The action plan must also include the 
 51.13  health plan company's strategy, including provider recruitment 
 51.14  and retention activities, for ensuring that sufficient providers 
 51.15  are available to its enrollees. 
 51.16     (d) An action plan must include a description of actions 
 51.17  taken or planned by the health plan company to ensure that 
 51.18  information from report cards, outcome studies, and complaints 
 51.19  is used internally to improve quality of the services provided 
 51.20  by the health plan company. 
 51.21     (e) An action plan must include a detailed description of 
 51.22  the health plan company's policies and procedures for enrolling 
 51.23  and serving high risk and special needs populations.  This 
 51.24  description must also include the barriers that are present for 
 51.25  the high risk and special needs population and how the health 
 51.26  plan company is addressing these barriers in order to provide 
 51.27  greater access to these populations.  "High risk and special 
 51.28  needs populations" includes, but is not limited to, recipients 
 51.29  of medical assistance, general assistance medical care, and 
 51.30  MinnesotaCare; persons with chronic conditions or disabilities; 
 51.31  individuals within certain racial, cultural, and ethnic 
 51.32  communities; individuals and families with low income; 
 51.33  adolescents; the elderly; individuals with limited or no English 
 51.34  language proficiency; persons with high-cost preexisting 
 51.35  conditions; homeless persons; chemically dependent persons; 
 51.36  persons with serious and persistent mental illness; children 
 52.1   with severe emotional disturbance; and persons who are at high 
 52.2   risk of requiring treatment.  For purposes of this paragraph, 
 52.3   "provider" has the meaning given in section 62J.03, subdivision 
 52.4   8. 
 52.5      (f) An action plan must include a general description of 
 52.6   any action the health plan company has taken and those it 
 52.7   intends to take to offer health coverage options to rural 
 52.8   communities and other communities not currently served by the 
 52.9   health plan company. 
 52.10     (g) A health plan company other than a large managed care 
 52.11  plan company may satisfy any of the requirements of the action 
 52.12  plan in paragraphs (a) to (f) by stating that it has no 
 52.13  policies, procedures, practices, or requirements, either written 
 52.14  or unwritten, or formal or informal, and has undertaken no 
 52.15  activities or plans on the issues required to be addressed in 
 52.16  the action plan, provided that the statement is truthful and not 
 52.17  misleading.  For purposes of this paragraph, "large managed care 
 52.18  plan company" means a health maintenance organization or other 
 52.19  health plan company that employs or contracts with health care 
 52.20  providers, that has more than 50,000 enrollees in this state.  
 52.21  If a health plan company employs or contracts with providers for 
 52.22  some of its health plans and does not do so for other health 
 52.23  plans that it offers, the health plan company is a large managed 
 52.24  care plan company if it has more than 50,000 enrollees in this 
 52.25  state in health plans for which it does employ or contract with 
 52.26  providers. 
 52.27     Sec. 17.  Minnesota Statutes 1998, section 62Q.075, 
 52.28  subdivision 4, is amended to read: 
 52.29     Subd. 4.  [REVIEW.] Upon receipt of the plan, the 
 52.30  appropriate commissioner shall provide a copy to the regional 
 52.31  coordinating boards, local community health boards, and other 
 52.32  relevant community organizations within the managed care 
 52.33  organization's service area.  After reviewing the plan, these 
 52.34  community groups may submit written comments on the plan to 
 52.35  either the commissioner of health or commerce, as applicable, 
 52.36  and may advise the commissioner of the managed care 
 53.1   organization's effectiveness in assisting to achieve regional 
 53.2   public health goals.  The plan may be reviewed by the county 
 53.3   boards, or city councils acting as a local board of health in 
 53.4   accordance with chapter 145A, within the managed care 
 53.5   organization's service area to determine whether the plan is 
 53.6   consistent with the goals and objectives of the plans required 
 53.7   under chapters 145A and 256E and whether the plan meets the 
 53.8   needs of the community.  The county board, or applicable city 
 53.9   council, may also review and make recommendations on the 
 53.10  availability and accessibility of services provided by the 
 53.11  managed care organization.  The county board, or applicable city 
 53.12  council, may submit written comments to the appropriate 
 53.13  commissioner, and may advise the commissioner of the managed 
 53.14  care organization's effectiveness in assisting to meet the needs 
 53.15  and goals as defined under the responsibilities of chapters 145A 
 53.16  and 256E.  The commissioner of health shall develop 
 53.17  recommendations to utilize the written comments submitted as 
 53.18  part of the licensure process to ensure local public 
 53.19  accountability.  These recommendations shall be reported to the 
 53.20  legislative commission on health care access by January 15, 
 53.21  1996.  Copies of these written comments must be provided to the 
 53.22  managed care organization.  The plan and any comments submitted 
 53.23  must be filed with the information clearinghouse to be 
 53.24  distributed to the public. 
 53.25     Sec. 18.  Minnesota Statutes 1998, section 62Q.105, 
 53.26  subdivision 6, is amended to read: 
 53.27     Subd. 6.  [RECORDKEEPING.] Health plan companies shall 
 53.28  maintain records of all enrollee complaints and their 
 53.29  resolutions.  These records must be retained for five years, and 
 53.30  must be made available to the appropriate commissioner upon 
 53.31  request. 
 53.32     Sec. 19.  Minnesota Statutes 1998, section 62Q.105, 
 53.33  subdivision 7, is amended to read: 
 53.34     Subd. 7.  [REPORTING.] Each health plan company shall 
 53.35  submit to the appropriate commissioner, as part of the company's 
 53.36  annual filing, data on the number and type of complaints that 
 54.1   are not resolved within 30 days.  A health plan company shall 
 54.2   also make this information available to the public upon request. 
 54.3      Sec. 20.  Minnesota Statutes 1998, section 62Q.11, is 
 54.4   amended to read: 
 54.5      62Q.11 [DISPUTE RESOLUTION.] 
 54.6      Subdivision 1.  [ESTABLISHED.] The commissioners of health 
 54.7   and commerce commissioner shall make dispute resolution 
 54.8   processes available to encourage early settlement of disputes in 
 54.9   order to avoid the time and cost associated with litigation and 
 54.10  other formal adversarial hearings.  For purposes of this 
 54.11  section, "dispute resolution" means the use of negotiation, 
 54.12  mediation, arbitration, mediation-arbitration, neutral fact 
 54.13  finding, and minitrials.  These processes shall be nonbinding 
 54.14  unless otherwise agreed to by all parties to the dispute. 
 54.15     Subd. 2.  [REQUIREMENTS.] (a) If an enrollee, health care 
 54.16  provider, or applicant for network provider status chooses to 
 54.17  use a dispute resolution process prior to the filing of a formal 
 54.18  claim or of a lawsuit, the health plan company must participate. 
 54.19     (b) If an enrollee, health care provider, or applicant for 
 54.20  network provider status chooses to use a dispute resolution 
 54.21  process after the filing of a lawsuit, the health plan company 
 54.22  must participate in dispute resolution, including, but not 
 54.23  limited to, alternative dispute resolution under rule 114 of the 
 54.24  Minnesota general rules of practice. 
 54.25     (c) The commissioners of health and commerce commissioner 
 54.26  shall inform and educate health plan companies' enrollees about 
 54.27  dispute resolution and its benefits, and shall establish 
 54.28  appropriate cost-sharing requirements for parties taking part in 
 54.29  alternative dispute resolution. 
 54.30     (d) A health plan company may encourage but not require an 
 54.31  enrollee to submit a complaint to alternative dispute resolution.
 54.32     Sec. 21.  Minnesota Statutes 1998, section 62Q.22, 
 54.33  subdivision 2, is amended to read: 
 54.34     Subd. 2.  [REGISTRATION.] A community health clinic that 
 54.35  offers a prepaid option under this section must register on an 
 54.36  annual basis with the commissioner of health. 
 55.1      Sec. 22.  Minnesota Statutes 1998, section 62Q.22, 
 55.2   subdivision 6, is amended to read: 
 55.3      Subd. 6.  [INFORMATION TO BE PROVIDED.] (a) A community 
 55.4   health clinic must provide an individual or family who purchases 
 55.5   a prepaid option a clear and concise written statement that 
 55.6   includes the following information: 
 55.7      (1) the health care services that the prepaid option 
 55.8   covers; 
 55.9      (2) any exclusions or limitations on the health care 
 55.10  services offered, including any preexisting condition 
 55.11  limitations, cost-sharing arrangements, or prior authorization 
 55.12  requirements; 
 55.13     (3) where the health care services may be obtained; 
 55.14     (4) a description of the clinic's method for resolving 
 55.15  patient complaints, including a description of how a patient can 
 55.16  file a complaint with the department of health commerce; and 
 55.17     (5) a description of the conditions under which the prepaid 
 55.18  option may be canceled or terminated. 
 55.19     (b) The commissioner of health must approve a copy of the 
 55.20  written statement before the community health clinic may offer 
 55.21  the prepaid option described in this section.  
 55.22     Sec. 23.  Minnesota Statutes 1998, section 62Q.22, 
 55.23  subdivision 7, is amended to read: 
 55.24     Subd. 7.  [COMPLAINT PROCESS.] (a) A community health 
 55.25  clinic that offers a prepaid option under this section must 
 55.26  establish a complaint resolution process.  As an alternative to 
 55.27  establishing its own process, a community health clinic may use 
 55.28  the complaint process of another organization.  
 55.29     (b) A community health clinic must make reasonable efforts 
 55.30  to resolve complaints and to inform complainants in writing of 
 55.31  the clinic's decision within 60 days of receiving the complaint. 
 55.32     (c) A community health clinic that offers a prepaid option 
 55.33  under this section must report all complaints that are not 
 55.34  resolved within 60 days to the commissioner of health. 
 55.35     Sec. 24.  Minnesota Statutes 1998, section 62Q.32, is 
 55.36  amended to read: 
 56.1      62Q.32 [LOCAL OMBUDSPERSON.] 
 56.2      County board or community health service agencies may 
 56.3   establish an office of ombudsperson to provide a system of 
 56.4   consumer advocacy for persons receiving health care services 
 56.5   through a health plan company.  The ombudsperson's functions may 
 56.6   include, but are not limited to: 
 56.7      (a) mediation or advocacy on behalf of a person accessing 
 56.8   the complaint and appeal procedures to ensure that necessary 
 56.9   medical services are provided by the health plan company; and 
 56.10     (b) investigation of the quality of services provided to a 
 56.11  person and determine the extent to which quality assurance 
 56.12  mechanisms are needed or any other system change may be needed.  
 56.13  The commissioner of health shall make recommendations for 
 56.14  funding these functions including the amount of funding needed 
 56.15  and a plan for distribution.  The commissioner shall submit 
 56.16  these recommendations to the legislative commission on health 
 56.17  care access by January 15, 1996. 
 56.18     Sec. 25.  Minnesota Statutes 1998, section 62Q.51, 
 56.19  subdivision 3, is amended to read: 
 56.20     Subd. 3.  [RATE APPROVAL.] The premium rates and cost 
 56.21  sharing requirements for each option must be submitted to the 
 56.22  commissioner of health or the commissioner of commerce as 
 56.23  required by law.  A health plan that includes lower enrollee 
 56.24  cost sharing for services provided by network providers than for 
 56.25  services provided by out-of-network providers, or lower enrollee 
 56.26  cost sharing for services provided with prior authorization or 
 56.27  second opinion than for services provided without prior 
 56.28  authorization or second opinion, qualifies as a point-of-service 
 56.29  option. 
 56.30     Sec. 26.  Minnesota Statutes 1998, section 62Q.525, 
 56.31  subdivision 3, is amended to read: 
 56.32     Subd. 3.  [REQUIRED COVERAGE.] (a) Every type of coverage 
 56.33  included in subdivision 1 that provides coverage for drugs may 
 56.34  not exclude coverage of a drug for the treatment of cancer on 
 56.35  the ground that the drug has not been approved by the federal 
 56.36  Food and Drug Administration for the treatment of cancer if the 
 57.1   drug is recognized for treatment of cancer in one of the 
 57.2   standard reference compendia or in one article in the medical 
 57.3   literature, as defined in subdivision 2.  
 57.4      (b) Coverage of a drug required by this subdivision 
 57.5   includes coverage of medically necessary services directly 
 57.6   related to and required for appropriate administration of the 
 57.7   drug.  
 57.8      (c) Coverage required by this subdivision does not include 
 57.9   coverage of a drug not listed on the formulary of the coverage 
 57.10  included in subdivision 1. 
 57.11     (d) Coverage of a drug required under this subdivision must 
 57.12  not be subject to any copayment, coinsurance, deductible, or 
 57.13  other enrollee cost-sharing greater than the coverage included 
 57.14  in subdivision 1 applies to other drugs. 
 57.15     (e) The commissioner of commerce or health, as appropriate, 
 57.16  may direct a person that issues coverage included in subdivision 
 57.17  1 to make payments required by this section. 
 57.18     Sec. 27.  Minnesota Statutes 1998, section 72A.139, 
 57.19  subdivision 2, is amended to read: 
 57.20     Subd. 2.  [DEFINITIONS.] (a) As used in this section, 
 57.21  "commissioner" means the commissioner of commerce for health 
 57.22  plan companies and other insurers regulated by that commissioner 
 57.23  and the commissioner of health for health plan companies 
 57.24  regulated by that commissioner. 
 57.25     (b) As used in this section, a "genetic test" means a 
 57.26  presymptomatic test of a person's genes, gene products, or 
 57.27  chromosomes for the purpose of determining the presence or 
 57.28  absence of a gene or genes that exhibit abnormalities, defects, 
 57.29  or deficiencies, including carrier status, that are known to be 
 57.30  the cause of a disease or disorder, or are determined to be 
 57.31  associated with a statistically increased risk of development of 
 57.32  a disease or disorder.  "Genetic test" does not include a 
 57.33  cholesterol test or other test not conducted for the purpose of 
 57.34  determining the presence or absence of a person's gene or genes. 
 57.35     (c) As used in this section, "health plan" has the meaning 
 57.36  given in section 62Q.01, subdivision 3. 
 58.1      (d) As used in this section, "health plan company" has the 
 58.2   meaning given in section 62Q.01, subdivision 4. 
 58.3      (e) As used in this section, "individual" means an 
 58.4   applicant for coverage or a person already covered by the health 
 58.5   plan company or other insurer. 
 58.6      Sec. 28.  [REPEALER.] 
 58.7      Minnesota Statutes 1998, sections 62L.11, subdivision 2; 
 58.8   and 62Q.45, subdivision 1, are repealed. 
 58.9      Sec. 29.  [EFFECTIVE DATE.] 
 58.10     This article is effective July 1, 2000.