1.1                          A bill for an act 
  1.2             relating to human services; modifying the 
  1.3             implementation date for county-based purchasing and 
  1.4             making other changes to county-based purchasing 
  1.5             programs; amending Minnesota Statutes 1998, sections 
  1.6             256B.69, subdivision 3a, and by adding a subdivision; 
  1.7             and 256B.692, subdivisions 2 and 5. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1998, section 256B.69, 
  1.10  subdivision 3a, is amended to read: 
  1.11     Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
  1.12  implementing the general assistance medical care, or medical 
  1.13  assistance prepayment program within a county, must include the 
  1.14  county board in the process of development, approval, and 
  1.15  issuance of the request for proposals to provide services to 
  1.16  eligible individuals within the proposed county.  County boards 
  1.17  must be given reasonable opportunity to make recommendations 
  1.18  regarding the development, issuance, review of responses, and 
  1.19  changes needed in the request for proposals.  The commissioner 
  1.20  must provide county boards the opportunity to review each 
  1.21  proposal based on the identification of community needs under 
  1.22  chapters 145A and 256E and county advocacy activities.  If a 
  1.23  county board finds that a proposal does not address certain 
  1.24  community needs, the county board and commissioner shall 
  1.25  continue efforts for improving the proposal and network prior to 
  1.26  the approval of the contract.  The county board shall make 
  2.1   recommendations regarding the approval of local networks and 
  2.2   their operations to ensure adequate availability and access to 
  2.3   covered services.  The provider or health plan must respond 
  2.4   directly to county advocates and the state prepaid medical 
  2.5   assistance ombudsperson regarding service delivery and must be 
  2.6   accountable to the state regarding contracts with medical 
  2.7   assistance and general assistance medical care funds.  The 
  2.8   county board may recommend a maximum number of participating 
  2.9   health plans after considering the size of the enrolling 
  2.10  population; ensuring adequate access and capacity; considering 
  2.11  the client and county administrative complexity; and considering 
  2.12  the need to promote the viability of locally developed health 
  2.13  plans.  The county board or a single entity representing a group 
  2.14  of county boards and the commissioner shall mutually select 
  2.15  health plans for participation at the time of initial 
  2.16  implementation of the prepaid medical assistance program in that 
  2.17  county or group of counties and at the time of contract renewal. 
  2.18  The commissioner shall also seek input for contract requirements 
  2.19  from the county or single entity representing a group of county 
  2.20  boards at each contract renewal and incorporate those 
  2.21  recommendations into the contract negotiation process.  The 
  2.22  commissioner, in conjunction with the county board, shall 
  2.23  actively seek to develop a mutually agreeable timetable prior to 
  2.24  the development of the request for proposal, but counties must 
  2.25  agree to initial enrollment beginning on or before January 1, 
  2.26  1999, in either the prepaid medical assistance and general 
  2.27  assistance medical care programs or county-based purchasing 
  2.28  under section 256B.692.  At least 90 days before enrollment in 
  2.29  the medical assistance and general assistance medical care 
  2.30  prepaid programs begins in a county in which the prepaid 
  2.31  programs have not been established, the commissioner shall 
  2.32  provide a report to the chairs of senate and house committees 
  2.33  having jurisdiction over state health care programs which 
  2.34  verifies that the commissioner complied with the requirements 
  2.35  for county involvement that are specified in this subdivision. 
  2.36     (b) The commissioner shall seek a federal waiver to allow a 
  3.1   fee-for-service plan option to MinnesotaCare enrollees.  The 
  3.2   commissioner shall develop an increase of the premium fees 
  3.3   required under section 256L.06 up to 20 percent of the premium 
  3.4   fees for the enrollees who elect the fee-for-service option.  
  3.5   Prior to implementation, the commissioner shall submit this fee 
  3.6   schedule to the chair and ranking minority member of the senate 
  3.7   health care committee, the senate health care and family 
  3.8   services funding division, the house of representatives health 
  3.9   and human services committee, and the house of representatives 
  3.10  health and human services finance division. 
  3.11     (c) At the option of the county board, the board may 
  3.12  develop contract requirements related to the achievement of 
  3.13  local public health goals to meet the health needs of medical 
  3.14  assistance and general assistance medical care enrollees.  These 
  3.15  requirements must be reasonably related to the performance of 
  3.16  health plan functions and within the scope of the medical 
  3.17  assistance and general assistance medical care benefit sets.  If 
  3.18  the county board and the commissioner mutually agree to such 
  3.19  requirements, the department shall include such requirements in 
  3.20  all health plan contracts governing the prepaid medical 
  3.21  assistance and general assistance medical care programs in that 
  3.22  county at initial implementation of the program in that county 
  3.23  and at the time of contract renewal.  The county board may 
  3.24  participate in the enforcement of the contract provisions 
  3.25  related to local public health goals. 
  3.26     (d) For counties in which prepaid medical assistance and 
  3.27  general assistance medical care programs have not been 
  3.28  established, the commissioner shall not implement those programs 
  3.29  if a county board submits acceptable and timely preliminary and 
  3.30  final proposals under section 256B.692, until county-based 
  3.31  purchasing is no longer operational in that county.  For 
  3.32  counties in which prepaid medical assistance and general 
  3.33  assistance medical care programs are in existence on or after 
  3.34  September 1, 1997, the commissioner must terminate contracts 
  3.35  with health plans according to section 256B.692, subdivision 5, 
  3.36  if the county board submits and the commissioner accepts 
  4.1   preliminary and final proposals according to that subdivision.  
  4.2   The commissioner is not required to terminate contracts that 
  4.3   begin on or after September 1, 1997, according to section 
  4.4   256B.692 until two years have elapsed from the date of initial 
  4.5   enrollment. 
  4.6      (e) In the event that a county board or a single entity 
  4.7   representing a group of county boards and the commissioner 
  4.8   cannot reach agreement regarding:  (i) the selection of 
  4.9   participating health plans in that county; (ii) contract 
  4.10  requirements; or (iii) implementation and enforcement of county 
  4.11  requirements including provisions regarding local public health 
  4.12  goals, the commissioner shall resolve all disputes after taking 
  4.13  into account the recommendations of a three-person mediation 
  4.14  panel.  The panel shall be composed of one designee of the 
  4.15  president of the association of Minnesota counties, one designee 
  4.16  of the commissioner of human services, and one designee of the 
  4.17  commissioner of health. 
  4.18     (f) If a county which elects to implement county-based 
  4.19  purchasing ceases to implement county-based purchasing, it is 
  4.20  prohibited from assuming the responsibility of county-based 
  4.21  purchasing for a period of five years from the date it 
  4.22  discontinues purchasing. 
  4.23     (g) Notwithstanding the requirement in this subdivision 
  4.24  that a county must agree to initial enrollment on or before 
  4.25  January 1, 1999, the commissioner shall grant a delay of up to 
  4.26  nine months in the implementation of the county-based purchasing 
  4.27  authorized in section 256B.692 until federal waiver authority 
  4.28  and approval has been granted, if the county or group of 
  4.29  counties has submitted a preliminary proposal for county-based 
  4.30  purchasing by September 1, 1997, has not already implemented the 
  4.31  prepaid medical assistance program before January 1, 1998, and 
  4.32  has submitted a written request for the delay to the 
  4.33  commissioner by July 1, 1998.  In order for the delay to be 
  4.34  continued, the county or group of counties must also submit to 
  4.35  the commissioner the following information by December 1, 1998.  
  4.36  The information must: 
  5.1      (1) identify the proposed date of implementation, not later 
  5.2   than October 1, 1999 as determined under section 256B.692, 
  5.3   subdivision 5; 
  5.4      (2) include copies of the county board resolutions which 
  5.5   demonstrate the continued commitment to the implementation of 
  5.6   county-based purchasing by the proposed date.  County board 
  5.7   authorization may remain contingent on the submission of a final 
  5.8   proposal which meets the requirements of section 256B.692, 
  5.9   subdivision 5, paragraph (b); 
  5.10     (3) demonstrate actions taken for the establishment of a 
  5.11  governance structure between the participating counties and 
  5.12  describe how the fiduciary responsibilities of county-based 
  5.13  purchasing will be allocated between the counties, if more than 
  5.14  one county is involved in the proposal; 
  5.15     (4) describe how the risk of a deficit will be managed in 
  5.16  the event expenditures are greater than total capitation 
  5.17  payments.  This description must identify how any of the 
  5.18  following strategies will be used: 
  5.19     (i) risk contracts with licensed health plans; 
  5.20     (ii) risk arrangements with providers who are not licensed 
  5.21  health plans; 
  5.22     (iii) risk arrangements with other licensed insurance 
  5.23  entities; and 
  5.24     (iv) funding from other county resources; 
  5.25     (5) include, if county-based purchasing will not contract 
  5.26  with licensed health plans or provider networks, letters of 
  5.27  interest from local providers in at least the categories of 
  5.28  hospital, physician, mental health, and pharmacy which express 
  5.29  interest in contracting for services.  These letters must 
  5.30  recognize any risk transfer identified in clause (4), item (ii); 
  5.31  and 
  5.32     (6) describe the options being considered to obtain the 
  5.33  administrative services required in section 256B.692, 
  5.34  subdivision 3, clauses (3) and (5). 
  5.35     (h) For counties which receive a delay under this 
  5.36  subdivision, the final proposals required under section 
  6.1   256B.692, subdivision 5, paragraph (b), must be submitted at 
  6.2   least six months prior to the requested implementation date.  
  6.3   Authority to implement county-based purchasing remains 
  6.4   contingent on approval of the final proposal as required under 
  6.5   section 256B.692. 
  6.6      (i) If the commissioner is unable to provide 
  6.7   county-specific, individual-level fee-for-service claims to 
  6.8   counties by June 4, 1998, the commissioner shall grant a delay 
  6.9   under paragraph (g) of up to 12 months in the implementation of 
  6.10  county-based purchasing, and shall require implementation not 
  6.11  later than January 1, 2000.  In order to receive an extension of 
  6.12  the proposed date of implementation under this paragraph, a 
  6.13  county or group of counties must submit a written request for 
  6.14  the extension to the commissioner by August 1, 1998, must submit 
  6.15  the information required under paragraph (g) by December 1, 
  6.16  1998, and must submit a final proposal as provided under 
  6.17  paragraph (h). 
  6.18     Sec. 2.  Minnesota Statutes 1998, section 256B.69, is 
  6.19  amended by adding a subdivision to read: 
  6.20     Subd. 3b.  [PROVISION OF DATA TO COUNTY BOARDS.] The 
  6.21  commissioner shall make available to all county boards, on an 
  6.22  ongoing basis, program information and data necessary for county 
  6.23  boards to:  (1) make recommendations to the commissioner related 
  6.24  to state purchasing under the prepaid medical assistance 
  6.25  program; and (2) effectively administer county-based 
  6.26  purchasing.  This information and data must include, but is not 
  6.27  limited to, county-specific, individual-level fee-for-service 
  6.28  and prepaid health plan claims. 
  6.29     Sec. 3.  Minnesota Statutes 1998, section 256B.692, 
  6.30  subdivision 2, is amended to read: 
  6.31     Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] (a) 
  6.32  Notwithstanding chapters 62D and 62N, a county that elects to 
  6.33  purchase medical assistance and general assistance medical care 
  6.34  in return for a fixed sum without regard to the frequency or 
  6.35  extent of services furnished to any particular enrollee is not 
  6.36  required to obtain a certificate of authority under chapter 62D 
  7.1   or 62N.  The county board of commissioners is the governing body 
  7.2   of a county-based purchasing program.  In a multicounty 
  7.3   arrangement, the governing body is a joint powers board 
  7.4   established under section 471.59.  
  7.5      (b) A county that elects to purchase medical assistance and 
  7.6   general assistance medical care services under this section must 
  7.7   satisfy the commissioner of health that the requirements for 
  7.8   assurance of consumer protection and fiscal solvency of chapter 
  7.9   62D, applicable to health maintenance organizations, or chapter 
  7.10  62N, applicable to community integrated service networks, will 
  7.11  be met.  
  7.12     (c) A county must also assure the commissioner of health 
  7.13  that the requirements of sections 62J.041; 62J.48; 62J.71 to 
  7.14  62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 
  7.15  62Q, including sections 62Q.07; 62Q.075; 62Q.105; 62Q.1055; 
  7.16  62Q.106; 62Q.11; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 
  7.17  62Q.23, paragraph (c); 62Q.30; 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 
  7.18  62Q.56; 62Q.58; 62Q.64; and 72A.201 will be met.  
  7.19     (d) All enforcement and rulemaking powers available under 
  7.20  chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 
  7.21  commissioner of health with respect to counties that purchase 
  7.22  medical assistance and general assistance medical care services 
  7.23  under this section.  
  7.24     (e) The commissioner, in consultation with county 
  7.25  government, shall develop administrative and financial reporting 
  7.26  requirements for county-based purchasing programs relating to 
  7.27  sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 
  7.28  62N.31, and other sections as necessary, that are specific to 
  7.29  county administrative, accounting, and reporting systems and 
  7.30  consistent with other statutory requirements of counties.  The 
  7.31  state auditor shall audit a county-based purchasing program as 
  7.32  part of the annual audit of county records under section 6.48. 
  7.33     Sec. 4.  Minnesota Statutes 1998, section 256B.692, 
  7.34  subdivision 5, is amended to read: 
  7.35     Subd. 5.  [COUNTY PROPOSALS.] (a) On or before September 1, 
  7.36  1997, a county board that wishes to purchase or provide health 
  8.1   care under this section must submit a preliminary proposal that 
  8.2   substantially demonstrates the county's ability to meet all the 
  8.3   requirements of this section in response to criteria for 
  8.4   proposals issued by the department on or before July 1, 1997.  
  8.5   Counties submitting preliminary proposals must establish a local 
  8.6   planning process that involves input from medical assistance and 
  8.7   general assistance medical care recipients, recipient advocates, 
  8.8   providers and representatives of local school districts, labor, 
  8.9   and tribal government to advise on the development of a final 
  8.10  proposal and its implementation.  
  8.11     (b) The county board must submit a final proposal on or 
  8.12  before July 1, 1998, that demonstrates the ability to meet all 
  8.13  the requirements of this section, including beginning enrollment 
  8.14  on January 1, 1999, unless a delay has been granted under 
  8.15  section 256B.69, subdivision 3a, paragraph (g) within 60 days 
  8.16  following notice to a county or group of counties that federal 
  8.17  waiver authority and approval has been granted to the state to 
  8.18  implement this section.  The final proposal must begin 
  8.19  enrollment no later than six months after the submittal date.  
  8.20     (c) After January 1, 1999, for a county in which the 
  8.21  prepaid medical assistance program is in existence, the county 
  8.22  board must submit a preliminary proposal at least 15 months 
  8.23  prior to termination of health plan contracts in that county and 
  8.24  a final proposal six months prior to the health plan contract 
  8.25  termination date in order to begin enrollment after the 
  8.26  termination.  Nothing in this section shall impede or delay 
  8.27  implementation or continuation of the prepaid medical assistance 
  8.28  and general assistance medical care programs in counties for 
  8.29  which the board does not submit a proposal, or submits a 
  8.30  proposal that is not in compliance with this section. 
  8.31     (d) The commissioner is not required to terminate contracts 
  8.32  for the prepaid medical assistance and prepaid general 
  8.33  assistance medical care programs that begin on or after 
  8.34  September 1, 1997, in a county for which a county board has 
  8.35  submitted a proposal under this paragraph, until two years have 
  8.36  elapsed from the date of initial enrollment in the prepaid 
  9.1   medical assistance and prepaid general assistance medical care 
  9.2   programs. 
  9.3      Sec. 5.  [REPORT ON RATE SETTING AND RISK ADJUSTMENT.] 
  9.4      The commissioner of human services shall report to the 
  9.5   legislature, by January 15, 2000, on the current rate setting 
  9.6   process for state prepaid health care programs, rate setting and 
  9.7   risk adjustment methods in other states, and the results of the 
  9.8   application of risk adjustment on a trial basis in Minnesota for 
  9.9   calendar year 1999.  The report must also present an analysis of 
  9.10  the feasibility of requiring prepaid health plans to report 
  9.11  vendor costs rather than charges, an analysis of capitation rate 
  9.12  equalization for MinnesotaCare and the prepaid medical 
  9.13  assistance program, an analysis of the fiscal impact on state 
  9.14  and county government of repealing Minnesota Statutes 1998, 
  9.15  section 256B.69, subdivision 5d, and recommendations for 
  9.16  providing actuarial and market analyses related to setting 
  9.17  prepaid health plan rates to the legislature on a timely basis 
  9.18  that would allow this information to be used in the 
  9.19  appropriations process. 
  9.20     Sec. 6.  [REPORT ON PREPAID MEDICAL ASSISTANCE PROGRAM.] 
  9.21     The commissioner of human services shall present 
  9.22  recommendations to the legislature, by December 15, 1999, on: 
  9.23     (1) methods for implementing county board authority under 
  9.24  the prepaid medical assistance program; 
  9.25     (2) methods for implementing county board authority related 
  9.26  to local public health goals; 
  9.27     (3) consumer protection policies that would facilitate 
  9.28  county advocacy for persons in the areas of consumer choice, 
  9.29  quality assurance, public accountability, and administrative 
  9.30  efficiency; 
  9.31     (4) improving county board access to program information 
  9.32  and data necessary to make policy decisions and develop 
  9.33  recommendations; 
  9.34     (5) county board options to implement outreach, eligibility 
  9.35  determination, and enrollment for the MinnesotaCare program; 
  9.36     (6) methods of improving state and federal funding for 
 10.1   implementation of county government administrative functions 
 10.2   related to outreach, eligibility determination, enrollment, 
 10.3   education, advocacy, and service coordination; 
 10.4      (7) methods to maximize federal and state revenue 
 10.5   allocations, with increased pass-through of federal funding to 
 10.6   counties; 
 10.7      (8) appropriate county responsibilities and functions in 
 10.8   the state medicaid plan; and 
 10.9      (9) county board options to purchase health care services 
 10.10  for MinnesotaCare enrollees under county-based purchasing.