1.1                          A bill for an act 
  1.2             relating to health plans; regulating network shadow 
  1.3             contracting; providing a remedy; proposing coding for 
  1.4             new law in Minnesota Statutes, chapter 62Q. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [62Q.68] [NETWORK SHADOW CONTRACTING.] 
  1.7      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  1.8   section, the terms defined in this subdivision have the meanings 
  1.9   given. 
  1.10     (b) "Category of coverage" means one of the following types 
  1.11  of health-related coverage: 
  1.12     (1) health; 
  1.13     (2) no-fault automobile medical benefits; or 
  1.14     (3) worker's compensation medical benefits. 
  1.15     (c) "Health care provider" or "provider" has the meaning 
  1.16  given in section 148.01. 
  1.17     (d) "Network organization" means a preferred provider 
  1.18  organization as defined in section 145.61, subdivision 4c; a 
  1.19  managed care organization as defined in section 62Q.01, 
  1.20  subdivision 5; or other entity that uses or consists of a 
  1.21  network of health care providers; but does not include a 
  1.22  nonprofit health service plan corporation operating under 
  1.23  chapter 62C or its affiliates. 
  1.24     Subd. 2.  [PROVIDER CONSENT REQUIRED.] (a) No network 
  1.25  organization shall require a health care provider to participate 
  2.1   in a network under a category of coverage that differs from the 
  2.2   category or categories of coverage to which the existing 
  2.3   contract between the network organization and the provider 
  2.4   applies, without the consent of the provider obtained under 
  2.5   subdivision 3.  
  2.6      (b) This section does not apply to situations in which the 
  2.7   network organization wishes the provider to participate in a new 
  2.8   or different plan or other arrangement within a category of 
  2.9   coverage that is already provided for in an existing contract 
  2.10  between the network organization and the provider. 
  2.11     (c) Compliance with this section may not be waived in a 
  2.12  contract or otherwise. 
  2.13     Subd. 3.  [CONSENT PROCEDURE.] (a) The network 
  2.14  organization, if it wishes to apply an existing contract with a 
  2.15  provider to a different category of coverage, shall first notify 
  2.16  the provider in writing.  The written notice must include at 
  2.17  least the following: 
  2.18     (1) the network organization's name, address, and telephone 
  2.19  number, and the name of the specific network, if it differs from 
  2.20  that of the network organization; 
  2.21     (2) a description of the proposed new category of coverage; 
  2.22     (3) the names of all payers expected by the network 
  2.23  organization to use the network for the new category of 
  2.24  coverage; 
  2.25     (4) the approximate number of current enrollees of the 
  2.26  network organization in that category of coverage within the 
  2.27  provider's geographical area; 
  2.28     (5) a disclosure of all contract terms of the proposed new 
  2.29  category of coverage, including the discount or reduced fees, 
  2.30  care guidelines, utilization review criteria, prior 
  2.31  authorization process, and dispute resolution process; 
  2.32     (6) a form for the provider's convenience in accepting or 
  2.33  declining participation in the proposed new category of 
  2.34  coverage, provided that the provider need not use that form in 
  2.35  responding; and 
  2.36     (7) a statement informing the provider of the provisions of 
  3.1   paragraph (b). 
  3.2      (b) If the provider does not decline participation within 
  3.3   30 days after the postmark date of the notice, the provider is 
  3.4   deemed to have accepted the proposed new category of coverage. 
  3.5      Subd. 4.  [CONTRACT TERMINATION RESTRICTED.] A network 
  3.6   organization must not terminate an existing contract with a 
  3.7   provider, or fail to honor the contract in good faith, based 
  3.8   solely on the provider's decision not to accept a proposed new 
  3.9   category of coverage.  The most recent agreed-upon contractual 
  3.10  obligations remain in force until the existing contract's 
  3.11  renewal or termination date. 
  3.12     Subd. 5.  [REMEDY.] If a network organization violates this 
  3.13  section by reimbursing a provider as if the provider had agreed 
  3.14  under this section to participate in the network under a 
  3.15  category of coverage to which the provider has not agreed, the 
  3.16  provider has a cause of action against the network organization 
  3.17  to recover two times the difference between the reasonable 
  3.18  charges for claims affected by the violation and the amounts 
  3.19  actually paid to the provider.  The provider is also entitled to 
  3.20  recover costs, disbursements, and reasonable attorney fees. 
  3.21     Sec. 2.  [EFFECTIVE DATE.] 
  3.22     Section 1 is effective for contracts entered into or 
  3.23  renewed after August 1, 1999.