1.1                          A bill for an act 
  1.2             relating to health; expanding the use of the rural 
  1.3             hospital planning and transition grant program; 
  1.4             expanding medical assistance coverage to include 
  1.5             telemedicine conferences; changing the hospital 
  1.6             outpatient fee medical assistance payment for 
  1.7             designated critical access hospitals to a cost base; 
  1.8             establishing uniform billing standards for health care 
  1.9             providers; appropriating money; amending Minnesota 
  1.10            Statutes 1998, sections 144.147; 256B.0625, by adding 
  1.11            a subdivision; 256B.75; and 256D.03, subdivision 4; 
  1.12            proposing coding for new law in Minnesota Statutes, 
  1.13            chapter 62J; repealing Minnesota Statutes 1998, 
  1.14            sections 144.1475; and 144.148. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  [62J.535] [UNIFORM BILLING REQUIREMENTS.] 
  1.17     Subdivision 1.  [DEVELOPMENT OF UNIFORM BILLING 
  1.18  TRANSACTIONS.] The commissioners of commerce and health shall 
  1.19  adopt uniform billing standards that comply with Public Law 
  1.20  Number 104-91 enacted by Congress on August 21, 1996.  The 
  1.21  uniform billing standards shall apply to all paper and 
  1.22  electronic claim transactions and shall apply to all Minnesota 
  1.23  payers, including government programs.  
  1.24     Subd. 2.  [COMPLIANCE.] Concurrent with the effective dates 
  1.25  established under Public Law Number 104-91 for uniform 
  1.26  electronic billing standards, all health care providers, except 
  1.27  dental and pharmacy providers, must conform to the uniform 
  1.28  billing standards developed by the commissioners of commerce and 
  1.29  health. 
  1.30     Sec. 2.  Minnesota Statutes 1998, section 144.147, is 
  2.1   amended to read: 
  2.2      144.147 [RURAL HOSPITAL PLANNING AND TRANSITION IMPROVEMENT 
  2.3   GRANT PROGRAM.] 
  2.4      Subdivision 1.  [DEFINITION.] "Eligible rural hospital" 
  2.5   means any nonfederal, general acute care hospital that: 
  2.6      (1) is either located in a rural area, as defined in the 
  2.7   federal Medicare regulations, Code of Federal Regulations, title 
  2.8   42, section 405.1041, or located in a community with a 
  2.9   population of less than 5,000, according to United States Census 
  2.10  Bureau statistics, outside the seven-county metropolitan area; 
  2.11     (2) has 50 or fewer beds; and 
  2.12     (3) is not for profit. 
  2.13     Subd. 2.  [GRANTS AUTHORIZED.] The commissioner shall 
  2.14  establish a program of grants to assist eligible rural 
  2.15  hospitals.  The commissioner shall award grants to hospitals and 
  2.16  communities for the purposes set forth in paragraphs (a) and (b) 
  2.17  to (c). 
  2.18     (a) Grants may be used by hospitals and their communities 
  2.19  to develop strategic plans for preserving or enhancing access to 
  2.20  health services.  At a minimum, a strategic plan must consist of:
  2.21     (1) a needs assessment to determine what health services 
  2.22  are needed and desired by the community.  The assessment must 
  2.23  include interviews with or surveys of area health professionals, 
  2.24  local community leaders, and public hearings; 
  2.25     (2) an assessment of the feasibility of providing needed 
  2.26  health services that identifies priorities and timeliness for 
  2.27  potential changes; and 
  2.28     (3) an implementation plan.  
  2.29     The strategic plan must be developed by a committee that 
  2.30  includes representatives from the hospital, local public health 
  2.31  agencies, other health providers, and consumers from the 
  2.32  community.  
  2.33     (b) The Grants may also be used by eligible rural hospitals 
  2.34  that have developed strategic plans to implement transition 
  2.35  projects to modify the type and extent of services provided, in 
  2.36  order to reflect the needs of that plan.  Grants may be used by 
  3.1   hospitals under this paragraph to develop hospital-based 
  3.2   physician practices that integrate hospital and existing medical 
  3.3   practice facilities that agree to transfer their practices, 
  3.4   equipment, staffing, and administration to the hospital.  The 
  3.5   grants may also be used by the hospital to establish a health 
  3.6   provider cooperative, a telemedicine system, or a rural health 
  3.7   care system.  Not more than one-third of any grant shall be used 
  3.8   to offset losses incurred by physicians agreeing to transfer 
  3.9   their practices to hospitals. for implementation projects that 
  3.10  reflect the needs identified in a strategic plan or similar plan.
  3.11  Implementation projects may include development or enhancement 
  3.12  of telemedicine services, diversification of health services, 
  3.13  collaborative efforts to integrate health services, or critical 
  3.14  access hospital conversion activities. 
  3.15     (c) Grants may be used by hospitals for planning and 
  3.16  implementation of capital improvement projects.  A capital 
  3.17  improvement project is designed to update, remodel, or replace 
  3.18  aging hospital facilities and equipment necessary to maintain 
  3.19  the operations of a hospital.  
  3.20     Subd. 3.  [CONSIDERATION OF GRANTS.] In determining which 
  3.21  hospitals will receive grants under this section, the 
  3.22  commissioner shall take into account:  
  3.23     (1) improving community access to hospital or health 
  3.24  services; 
  3.25     (2) changes in service populations; 
  3.26     (3) demand for availability and upgrading ambulatory and 
  3.27  emergency services; 
  3.28     (4) the extent that the health needs of the community are 
  3.29  not currently being met by other providers in the service area; 
  3.30     (5) the need to recruit and retain health professionals; 
  3.31     (6) the extent of community support; 
  3.32     (7) the integration of health care services and the 
  3.33  coordination with local community organizations, such as 
  3.34  community development and public health agencies; and 
  3.35     (8) the financial condition of the hospital. 
  3.36     Subd. 4.  [ALLOCATION OF GRANTS.] (a) Eligible hospitals 
  4.1   must apply to the commissioner no later than September October 1 
  4.2   of each fiscal year for grants awarded for that fiscal year.  A 
  4.3   grant may be awarded upon signing of a grant contract. 
  4.4      (b) The commissioner must make a final decision on the 
  4.5   funding of each application within 60 days of the deadline for 
  4.6   receiving applications. 
  4.7      (c) Each relevant community health board has 30 days in 
  4.8   which to review and comment to the commissioner on grant 
  4.9   applications from hospitals in their community health service 
  4.10  area. 
  4.11     (d) In determining which hospitals will receive grants 
  4.12  under this section, the commissioner shall consider the 
  4.13  following factors: 
  4.14     (1) Description of the problem, description of the project, 
  4.15  and the likelihood of successful outcome of the project.  The 
  4.16  applicant must explain clearly the nature of the health services 
  4.17  problems in their service area, how the grant funds will be 
  4.18  used, what will be accomplished, and the results expected.  The 
  4.19  applicant should describe achievable objectives, a timetable, 
  4.20  and roles and capabilities of responsible individuals and 
  4.21  organizations. 
  4.22     (2) The extent of community support for the hospital and 
  4.23  this proposed project.  The applicant should demonstrate support 
  4.24  for the hospital and for the proposed project from other local 
  4.25  health service providers and from local community and government 
  4.26  leaders.  Evidence of such support may include past commitments 
  4.27  of financial support from local individuals, organizations, or 
  4.28  government entities; and commitment of financial support, 
  4.29  in-kind services or cash, for this project. 
  4.30     (3) The comments, if any, resulting from a review of the 
  4.31  application by the community health board in whose community 
  4.32  health service area the hospital is located. 
  4.33     (e) In evaluating applications, the commissioner shall 
  4.34  score each application on a 100 point scale, assigning the 
  4.35  maximum of 70 points for an applicant's understanding of the 
  4.36  problem, description of the project, and likelihood of 
  5.1   successful outcome of the project; and a maximum of 30 points 
  5.2   for the extent of community support for the hospital and this 
  5.3   project.  The commissioner may also take into account other 
  5.4   relevant factors. 
  5.5      (f) A grant to a hospital, including hospitals that submit 
  5.6   applications as consortia, may not exceed $50,000 a year and may 
  5.7   not exceed a term of two years.  Prior to the receipt of any 
  5.8   grant, the hospital must certify to the commissioner that at 
  5.9   least one-half of the amount, which may include in-kind 
  5.10  services, is available for the same purposes from nonstate 
  5.11  sources.  A hospital receiving a grant under this section may 
  5.12  use the grant for any expenses incurred in the development of 
  5.13  strategic plans or the implementation of transition projects 
  5.14  with respect to which the grant is made.  Project grants may not 
  5.15  be used to retire debt incurred with respect to any capital 
  5.16  expenditure made prior to the date on which the project is 
  5.17  initiated.  In determining the grant amount a hospital will 
  5.18  receive under this section, the commissioner shall consider the 
  5.19  following factors: 
  5.20     (1) grants to hospitals for planning and implementation 
  5.21  under subdivision 2, paragraphs (a) and (b), may not exceed 
  5.22  $100,000 a year and may not exceed a term of two years.  Prior 
  5.23  to the receipt of any grant, the hospital must certify to the 
  5.24  commissioner that at least one-half of the amount of the total 
  5.25  cost of the planning or implementation project, which may 
  5.26  include in-kind services, is available for the same purposes 
  5.27  from nonstate sources; and 
  5.28     (2) grants to hospitals for planning and implementation 
  5.29  projects under subdivision 2, paragraph (c), may not exceed 
  5.30  $300,000 a year and may not exceed a term of two years.  Prior 
  5.31  to the receipt of any grant, the hospital must certify to the 
  5.32  commissioner that at least one-quarter of the amount of the 
  5.33  total cost of the planning and implementation project, which may 
  5.34  include in-kind services, is available for the same purposes 
  5.35  from nonstate sources.  A hospital receiving a grant under this 
  5.36  section may use the grant for any expenses incurred in the 
  6.1   development of strategic plans or the implementation of 
  6.2   transition projects with respect to which the grant is made.  
  6.3   Project grants may not be used to retire debt incurred with 
  6.4   respect to any capital expenditure made prior to the date on 
  6.5   which the project is initiated.  Hospitals may apply to the 
  6.6   program each year they are eligible. 
  6.7      (g) The commissioner may adopt rules to implement this 
  6.8   section. 
  6.9      Subd. 5.  [EVALUATION.] The commissioner shall evaluate the 
  6.10  overall effectiveness of the grant program.  The commissioner 
  6.11  may collect, from the hospital, and communities receiving 
  6.12  grants, the information necessary quarterly progress reports to 
  6.13  evaluate the grant program.  Information related to the 
  6.14  financial condition of individual hospitals shall be classified 
  6.15  as nonpublic data. 
  6.16     Sec. 3.  Minnesota Statutes 1998, section 256B.0625, is 
  6.17  amended by adding a subdivision to read: 
  6.18     Subd. 8b.  [TELEMEDICINE CONSULTATIONS.] Medical assistance 
  6.19  covers telemedicine consultations.  Telemedicine consultations 
  6.20  may be made via two-way, interactive video or store-and-forward 
  6.21  technology.  Payments will be made to both the referring 
  6.22  provider and the consulting physician specialist.  Physician 
  6.23  specialist includes any physician consulting with an emergency 
  6.24  department provider. 
  6.25     Sec. 4.  Minnesota Statutes 1998, section 256B.75, is 
  6.26  amended to read: 
  6.27     256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
  6.28     (a) For outpatient hospital facility fee payments for 
  6.29  services rendered on or after October 1, 1992, the commissioner 
  6.30  of human services shall pay the lower of (1) submitted charge, 
  6.31  or (2) 32 percent above the rate in effect on June 30, 1992, 
  6.32  except for those services for which there is a federal maximum 
  6.33  allowable payment.  Services for which there is a federal 
  6.34  maximum allowable payment shall be paid at the lower of (1) 
  6.35  submitted charge, or (2) the federal maximum allowable payment.  
  6.36  Total aggregate payment for outpatient hospital facility fee 
  7.1   services shall not exceed the Medicare upper limit.  If it is 
  7.2   determined that a provision of this section conflicts with 
  7.3   existing or future requirements of the United States government 
  7.4   with respect to federal financial participation in medical 
  7.5   assistance, the federal requirements prevail.  The commissioner 
  7.6   may, in the aggregate, prospectively reduce payment rates to 
  7.7   avoid reduced federal financial participation resulting from 
  7.8   rates that are in excess of the Medicare upper limitations. 
  7.9      (b) Notwithstanding paragraph (a), payment for outpatient, 
  7.10  emergency, and ambulatory surgery hospital facility fee services 
  7.11  for critical access hospitals designated under section 144.1483, 
  7.12  clause (11), shall be paid on a cost-based payment system that 
  7.13  is based on the cost-finding methods and allowable costs of the 
  7.14  Medicare program. 
  7.15     Sec. 5.  Minnesota Statutes 1998, section 256D.03, 
  7.16  subdivision 4, is amended to read: 
  7.17     Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
  7.18  For a person who is eligible under subdivision 3, paragraph (a), 
  7.19  clause (3), general assistance medical care covers, except as 
  7.20  provided in paragraph (c): 
  7.21     (1) inpatient hospital services; 
  7.22     (2) outpatient hospital services; 
  7.23     (3) services provided by Medicare certified rehabilitation 
  7.24  agencies; 
  7.25     (4) prescription drugs and other products recommended 
  7.26  through the process established in section 256B.0625, 
  7.27  subdivision 13; 
  7.28     (5) equipment necessary to administer insulin and 
  7.29  diagnostic supplies and equipment for diabetics to monitor blood 
  7.30  sugar level; 
  7.31     (6) eyeglasses and eye examinations provided by a physician 
  7.32  or optometrist; 
  7.33     (7) hearing aids; 
  7.34     (8) prosthetic devices; 
  7.35     (9) laboratory and X-ray services; 
  7.36     (10) physician's services; 
  8.1      (11) medical transportation; 
  8.2      (12) chiropractic services as covered under the medical 
  8.3   assistance program; 
  8.4      (13) podiatric services; 
  8.5      (14) dental services; 
  8.6      (15) outpatient services provided by a mental health center 
  8.7   or clinic that is under contract with the county board and is 
  8.8   established under section 245.62; 
  8.9      (16) day treatment services for mental illness provided 
  8.10  under contract with the county board; 
  8.11     (17) prescribed medications for persons who have been 
  8.12  diagnosed as mentally ill as necessary to prevent more 
  8.13  restrictive institutionalization; 
  8.14     (18) psychological services, medical supplies and 
  8.15  equipment, and Medicare premiums, coinsurance and deductible 
  8.16  payments; 
  8.17     (19) medical equipment not specifically listed in this 
  8.18  paragraph when the use of the equipment will prevent the need 
  8.19  for costlier services that are reimbursable under this 
  8.20  subdivision; 
  8.21     (20) services performed by a certified pediatric nurse 
  8.22  practitioner, a certified family nurse practitioner, a certified 
  8.23  adult nurse practitioner, a certified obstetric/gynecological 
  8.24  nurse practitioner, or a certified geriatric nurse practitioner 
  8.25  in independent practice, if the services are otherwise covered 
  8.26  under this chapter as a physician service, and if the service is 
  8.27  within the scope of practice of the nurse practitioner's license 
  8.28  as a registered nurse, as defined in section 148.171; and 
  8.29     (21) services of a certified public health nurse or a 
  8.30  registered nurse practicing in a public health nursing clinic 
  8.31  that is a department of, or that operates under the direct 
  8.32  authority of, a unit of government, if the service is within the 
  8.33  scope of practice of the public health nurse's license as a 
  8.34  registered nurse, as defined in section 148.171; and 
  8.35     (22) telemedicine consultations, which may be made via 
  8.36  two-way, interactive video or store-and-forward technology.  
  9.1   Payments will be made to both the referring provider and the 
  9.2   consulting physician specialist.  Physician specialist includes 
  9.3   any physician consulting with an emergency department provider. 
  9.4      (b) Except as provided in paragraph (c), for a recipient 
  9.5   who is eligible under subdivision 3, paragraph (a), clause (1) 
  9.6   or (2), general assistance medical care covers the services 
  9.7   listed in paragraph (a) with the exception of special 
  9.8   transportation services. 
  9.9      (c) Gender reassignment surgery and related services are 
  9.10  not covered services under this subdivision unless the 
  9.11  individual began receiving gender reassignment services prior to 
  9.12  July 1, 1995.  
  9.13     (d) In order to contain costs, the commissioner of human 
  9.14  services shall select vendors of medical care who can provide 
  9.15  the most economical care consistent with high medical standards 
  9.16  and shall where possible contract with organizations on a 
  9.17  prepaid capitation basis to provide these services.  The 
  9.18  commissioner shall consider proposals by counties and vendors 
  9.19  for prepaid health plans, competitive bidding programs, block 
  9.20  grants, or other vendor payment mechanisms designed to provide 
  9.21  services in an economical manner or to control utilization, with 
  9.22  safeguards to ensure that necessary services are provided.  
  9.23  Before implementing prepaid programs in counties with a county 
  9.24  operated or affiliated public teaching hospital or a hospital or 
  9.25  clinic operated by the University of Minnesota, the commissioner 
  9.26  shall consider the risks the prepaid program creates for the 
  9.27  hospital and allow the county or hospital the opportunity to 
  9.28  participate in the program in a manner that reflects the risk of 
  9.29  adverse selection and the nature of the patients served by the 
  9.30  hospital, provided the terms of participation in the program are 
  9.31  competitive with the terms of other participants considering the 
  9.32  nature of the population served.  Payment for services provided 
  9.33  pursuant to this subdivision shall be as provided to medical 
  9.34  assistance vendors of these services under sections 256B.02, 
  9.35  subdivision 8, and 256B.0625.  For payments made during fiscal 
  9.36  year 1990 and later years, the commissioner shall consult with 
 10.1   an independent actuary in establishing prepayment rates, but 
 10.2   shall retain final control over the rate methodology.  
 10.3   Notwithstanding the provisions of subdivision 3, an individual 
 10.4   who becomes ineligible for general assistance medical care 
 10.5   because of failure to submit income reports or recertification 
 10.6   forms in a timely manner, shall remain enrolled in the prepaid 
 10.7   health plan and shall remain eligible for general assistance 
 10.8   medical care coverage through the last day of the month in which 
 10.9   the enrollee became ineligible for general assistance medical 
 10.10  care. 
 10.11     (e) The commissioner of human services may reduce payments 
 10.12  provided under sections 256D.01 to 256D.21 and 261.23 in order 
 10.13  to remain within the amount appropriated for general assistance 
 10.14  medical care, within the following restrictions: 
 10.15     (i) For the period July 1, 1985 to December 31, 1985, 
 10.16  reductions below the cost per service unit allowable under 
 10.17  section 256.966, are permitted only as follows:  payments for 
 10.18  inpatient and outpatient hospital care provided in response to a 
 10.19  primary diagnosis of chemical dependency or mental illness may 
 10.20  be reduced no more than 30 percent; payments for all other 
 10.21  inpatient hospital care may be reduced no more than 20 percent.  
 10.22  Reductions below the payments allowable under general assistance 
 10.23  medical care for the remaining general assistance medical care 
 10.24  services allowable under this subdivision may be reduced no more 
 10.25  than ten percent. 
 10.26     (ii) For the period January 1, 1986 to December 31, 1986, 
 10.27  reductions below the cost per service unit allowable under 
 10.28  section 256.966 are permitted only as follows:  payments for 
 10.29  inpatient and outpatient hospital care provided in response to a 
 10.30  primary diagnosis of chemical dependency or mental illness may 
 10.31  be reduced no more than 20 percent; payments for all other 
 10.32  inpatient hospital care may be reduced no more than 15 percent.  
 10.33  Reductions below the payments allowable under general assistance 
 10.34  medical care for the remaining general assistance medical care 
 10.35  services allowable under this subdivision may be reduced no more 
 10.36  than five percent. 
 11.1      (iii) For the period January 1, 1987 to June 30, 1987, 
 11.2   reductions below the cost per service unit allowable under 
 11.3   section 256.966 are permitted only as follows:  payments for 
 11.4   inpatient and outpatient hospital care provided in response to a 
 11.5   primary diagnosis of chemical dependency or mental illness may 
 11.6   be reduced no more than 15 percent; payments for all other 
 11.7   inpatient hospital care may be reduced no more than ten 
 11.8   percent.  Reductions below the payments allowable under medical 
 11.9   assistance for the remaining general assistance medical care 
 11.10  services allowable under this subdivision may be reduced no more 
 11.11  than five percent.  
 11.12     (iv) For the period July 1, 1987 to June 30, 1988, 
 11.13  reductions below the cost per service unit allowable under 
 11.14  section 256.966 are permitted only as follows:  payments for 
 11.15  inpatient and outpatient hospital care provided in response to a 
 11.16  primary diagnosis of chemical dependency or mental illness may 
 11.17  be reduced no more than 15 percent; payments for all other 
 11.18  inpatient hospital care may be reduced no more than five percent.
 11.19  Reductions below the payments allowable under medical assistance 
 11.20  for the remaining general assistance medical care services 
 11.21  allowable under this subdivision may be reduced no more than 
 11.22  five percent. 
 11.23     (v) For the period July 1, 1988 to June 30, 1989, 
 11.24  reductions below the cost per service unit allowable under 
 11.25  section 256.966 are permitted only as follows:  payments for 
 11.26  inpatient and outpatient hospital care provided in response to a 
 11.27  primary diagnosis of chemical dependency or mental illness may 
 11.28  be reduced no more than 15 percent; payments for all other 
 11.29  inpatient hospital care may not be reduced.  Reductions below 
 11.30  the payments allowable under medical assistance for the 
 11.31  remaining general assistance medical care services allowable 
 11.32  under this subdivision may be reduced no more than five percent. 
 11.33     (f) There shall be no copayment required of any recipient 
 11.34  of benefits for any services provided under this subdivision.  A 
 11.35  hospital receiving a reduced payment as a result of this section 
 11.36  may apply the unpaid balance toward satisfaction of the 
 12.1   hospital's bad debts. 
 12.2      (g) Any county may, from its own resources, provide medical 
 12.3   payments for which state payments are not made. 
 12.4      (h) Chemical dependency services that are reimbursed under 
 12.5   chapter 254B must not be reimbursed under general assistance 
 12.6   medical care. 
 12.7      (i) The maximum payment for new vendors enrolled in the 
 12.8   general assistance medical care program after the base year 
 12.9   shall be determined from the average usual and customary charge 
 12.10  of the same vendor type enrolled in the base year. 
 12.11     (j) The conditions of payment for services under this 
 12.12  subdivision are the same as the conditions specified in rules 
 12.13  adopted under chapter 256B governing the medical assistance 
 12.14  program, unless otherwise provided by statute or rule. 
 12.15     Sec. 6.  [APPROPRIATIONS.] 
 12.16     $....... is appropriated for the biennium ending June 30, 
 12.17  2001, from the general fund to the commissioner of health for 
 12.18  rural hospital improvement grant programs.  Of this 
 12.19  appropriation, $....... is to be used for planning and 
 12.20  implementation projects described in Minnesota Statutes, section 
 12.21  144.147, subdivision 2, paragraphs (a) and (b), and $....... is 
 12.22  to be used for capital improvement planning and implementation 
 12.23  projects described in Minnesota Statutes, section 144.147, 
 12.24  subdivision 2, paragraph (c). 
 12.25     Sec. 7.  [REPEALER.] 
 12.26     Minnesota Statutes 1998, sections 144.1475; and 144.148, 
 12.27  are repealed. 
 12.28     Sec. 8.  [EFFECTIVE DATE.] 
 12.29     Sections 3 to 5 are effective for services rendered on or 
 12.30  after July 1, 1999.