1.1                          A bill for an act 
  1.2             relating to insurance; simplifying regulation of 
  1.3             health insurers and health maintenance organizations; 
  1.4             amending Minnesota Statutes 1998, sections 62A.0411; 
  1.5             62A.65, subdivision 5; 62D.02, subdivision 8; 62D.11, 
  1.6             subdivision 1; 62E.04, subdivision 4; 62J.09, 
  1.7             subdivision 8; 62J.301, subdivision 4; 62J.321, 
  1.8             subdivision 1; 62J.75; 62M.09, subdivision 3; 62N.25, 
  1.9             subdivision 7; 62Q.075, by adding a subdivision; 
  1.10            62Q.095, subdivision 1; and 62Q.51, subdivision 4; 
  1.11            proposing coding for new law in Minnesota Statutes, 
  1.12            chapters 62D; and 62Q; repealing Minnesota Statutes 
  1.13            1998, sections 16B.93; 16B.94; 16B.95; 16B.96; 62D.04, 
  1.14            subdivision 5; 62D.08, subdivision 5; 62J.17; 62Q.07; 
  1.15            62Q.075; 62Q.105; 62Q.11; 62Q.30; 62Q.64; and 
  1.16            256B.0644; Minnesota Rules, parts 4685.1105; 
  1.17            4685.1110; 4685.1115; 4685.1120; 4685.1125; 4685.1130; 
  1.18            4685.1200; and 4685.1900. 
  1.19  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.20     Section 1.  Minnesota Statutes 1998, section 62A.0411, is 
  1.21  amended to read: 
  1.22     62A.0411 [MATERNITY CARE.] 
  1.23     Every health plan as defined in section 62Q.01, subdivision 
  1.24  3, that provides maternity benefits must, consistent with other 
  1.25  coinsurance, copayment, deductible, and related contract terms, 
  1.26  provide coverage of a minimum of 48 hours of inpatient care 
  1.27  following a vaginal delivery and a minimum of 96 hours of 
  1.28  inpatient care following a caesarean section for a mother and 
  1.29  her newborn.  The health plan shall not provide any compensation 
  1.30  or other nonmedical remuneration to encourage a mother and 
  1.31  newborn to leave inpatient care before the duration minimums 
  1.32  specified in this section consistent with United States Code, 
  2.1   title 29, section 1185. 
  2.2      The health plan must also provide coverage for postdelivery 
  2.3   care to a mother and her newborn if the duration of inpatient 
  2.4   care is less than the minimums provided in this section. 
  2.5      Postdelivery care consists of a minimum of one home visit 
  2.6   by a registered nurse.  Services provided by the registered 
  2.7   nurse include, but are not limited to, parent education, 
  2.8   assistance and training in breast and bottle feeding, and 
  2.9   conducting any necessary and appropriate clinical tests.  The 
  2.10  home visit must be conducted within four days following the 
  2.11  discharge of the mother and her child. 
  2.12     Sec. 2.  Minnesota Statutes 1998, section 62A.65, 
  2.13  subdivision 5, is amended to read: 
  2.14     Subd. 5.  [PORTABILITY OF COVERAGE.] (a) No individual 
  2.15  health plan may be offered, sold, issued, or with respect to 
  2.16  children age 18 or under renewed, to a Minnesota resident that 
  2.17  contains a preexisting condition limitation, preexisting 
  2.18  condition exclusion, or exclusionary rider, unless the 
  2.19  limitation or exclusion is permitted under this subdivision, 
  2.20  provided that, except for children age 18 or under, underwriting 
  2.21  restrictions may be retained on individual contracts that are 
  2.22  issued without evidence of insurability as a replacement for 
  2.23  prior individual coverage that was sold before May 17, 1993.  
  2.24  The individual may be subjected to an 18-month preexisting 
  2.25  condition limitation, unless the individual has maintained 
  2.26  continuous coverage as defined in section 62L.02.  The 
  2.27  individual must not be subjected to an exclusionary rider.  An 
  2.28  individual who has maintained continuous coverage may be 
  2.29  subjected to a one-time preexisting condition limitation of up 
  2.30  to 12 months, with credit for time covered under qualifying 
  2.31  coverage as defined in section 62L.02, at the time that the 
  2.32  individual first is covered under an individual health plan by 
  2.33  any health carrier.  Credit must be given for all qualifying 
  2.34  coverage with respect to all preexisting conditions, regardless 
  2.35  of whether the conditions were preexisting with respect to any 
  2.36  previous qualifying coverage.  The individual must not be 
  3.1   subjected to an exclusionary rider.  Thereafter, the individual 
  3.2   must not be subject to any preexisting condition limitation, 
  3.3   preexisting condition exclusion, or exclusionary rider under an 
  3.4   individual health plan by any health carrier, except an 
  3.5   unexpired portion of a limitation under prior coverage, so long 
  3.6   as the individual maintains continuous coverage as defined in 
  3.7   section 62L.02. 
  3.8      (b) A health carrier must offer an individual health plan 
  3.9   to any individual previously covered under a group health plan 
  3.10  issued by that health carrier, regardless of the size of the 
  3.11  group, so long as the individual maintained continuous coverage 
  3.12  as defined in section 62L.02.  If the individual has available 
  3.13  any continuation coverage provided under sections 62A.146; 
  3.14  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
  3.15  62D.101; or 62D.105, or continuation coverage provided under 
  3.16  federal law, the health carrier need not offer coverage under 
  3.17  this paragraph until the individual has exhausted the 
  3.18  continuation coverage.  The offer must not be subject to 
  3.19  underwriting, except as permitted under this paragraph.  A 
  3.20  health plan issued under this paragraph must be a qualified plan 
  3.21  as defined in section 62E.02 and must not contain any 
  3.22  preexisting condition limitation, preexisting condition 
  3.23  exclusion, or exclusionary rider, except for any unexpired 
  3.24  limitation or exclusion under the previous coverage.  The 
  3.25  individual health plan must cover pregnancy on the same basis as 
  3.26  any other covered illness under the individual health plan.  The 
  3.27  initial premium rate for the individual health plan must comply 
  3.28  with subdivision 3.  The premium rate upon renewal must comply 
  3.29  with subdivision 2.  In no event shall the premium rate exceed 
  3.30  90 percent of the premium charged for comparable individual 
  3.31  coverage by the Minnesota comprehensive health association, and 
  3.32  the premium rate must be less than that amount if necessary to 
  3.33  otherwise comply with this section.  An individual health plan 
  3.34  offered under this paragraph to a person satisfies the health 
  3.35  carrier's obligation to offer conversion coverage under section 
  3.36  62E.16, with respect to that person.  Coverage issued under this 
  4.1   paragraph must provide that it cannot be canceled or nonrenewed 
  4.2   as a result of the health carrier's subsequent decision to leave 
  4.3   the individual, small employer, or other group market.  Section 
  4.4   72A.20, subdivision 28, applies to this paragraph. 
  4.5      Sec. 3.  Minnesota Statutes 1998, section 62D.02, 
  4.6   subdivision 8, is amended to read: 
  4.7      Subd. 8.  "Health maintenance contract" means any contract 
  4.8   whereby a health maintenance organization agrees to provide 
  4.9   comprehensive health maintenance services to enrollees, provided 
  4.10  that the contract may contain reasonable enrollee copayment 
  4.11  provisions.  An individual or group health maintenance contract 
  4.12  may contain the copayment and deductible provisions specified in 
  4.13  this subdivision.  Copayment and deductible provisions in group 
  4.14  contracts shall not discriminate on the basis of age, sex, race, 
  4.15  length of enrollment in the plan, or economic status; and during 
  4.16  every open enrollment period in which all offered health benefit 
  4.17  plans, including those subject to the jurisdiction of the 
  4.18  commissioners of commerce or health, fully participate without 
  4.19  any underwriting restrictions, copayment and deductible 
  4.20  provisions shall not discriminate on the basis of preexisting 
  4.21  health status.  In no event shall the sum of the annual 
  4.22  copayments and deductible exceed the maximum out-of-pocket 
  4.23  expenses allowable for a number three qualified plan under 
  4.24  section 62E.06, nor shall that sum exceed $5,000 per family.  
  4.25  The annual deductible must not exceed $1,000 per person.  The 
  4.26  annual deductible must not apply to preventive health services 
  4.27  as described in Minnesota Rules, part 4685.0801, subpart 8.  
  4.28  Where sections 62D.01 to 62D.30 permit a health maintenance 
  4.29  organization to contain reasonable copayment provisions for 
  4.30  preexisting health status, these provisions may vary with 
  4.31  respect to length of enrollment in the plan.  A health 
  4.32  maintenance contract may include a lifetime maximum benefit 
  4.33  limit.  Any contract may provide for health care services in 
  4.34  addition to those set forth in subdivision 7. 
  4.35     Sec. 4.  [62D.021] [ACCREDITATION.] 
  4.36     A health maintenance organization is deemed to meet the 
  5.1   requirements in this chapter and in related rules if the 
  5.2   organization is accredited and periodically reaccredited by a 
  5.3   national accreditation entity under a process that ensures that 
  5.4   the health maintenance organization, as a condition of 
  5.5   accreditation, applies and enforces standards with respect to 
  5.6   the requirements involved that are no less stringent than like 
  5.7   standards established in Minnesota statute or rule.  National 
  5.8   accreditation entities include, but are not limited to, the 
  5.9   National Committee on Quality Assurance, the Joint Commission on 
  5.10  Accreditation of Health Care Organizations, and the Utilization 
  5.11  Review Accreditation Commission. 
  5.12     Sec. 5.  Minnesota Statutes 1998, section 62D.11, 
  5.13  subdivision 1, is amended to read: 
  5.14     Subdivision 1.  [ENROLLEE COMPLAINT SYSTEM.] Every health 
  5.15  maintenance organization shall establish and maintain a 
  5.16  complaint system, as required under section 62Q.105 to provide 
  5.17  reasonable procedures for the resolution of written complaints 
  5.18  initiated by or on behalf of enrollees concerning the provision 
  5.19  of health care services.  "Provision of health services" 
  5.20  includes, but is not limited to, questions of the scope of 
  5.21  coverage, quality of care, and administrative operations.  The 
  5.22  health maintenance organization must inform enrollees that they 
  5.23  may choose to use arbitration to appeal a health maintenance 
  5.24  organization's internal appeal decision.  The health maintenance 
  5.25  organization must also inform enrollees that they have the right 
  5.26  to use arbitration to appeal a health maintenance organization's 
  5.27  internal appeal decision not to certify an admission, procedure, 
  5.28  service, or extension of stay under section 62M.06.  If an 
  5.29  enrollee chooses to use arbitration, the health maintenance 
  5.30  organization must participate. 
  5.31     Sec. 6.  Minnesota Statutes 1998, section 62E.04, 
  5.32  subdivision 4, is amended to read: 
  5.33     Subd. 4.  [MAJOR MEDICAL COVERAGE.] Each insurer and 
  5.34  fraternal shall affirmatively offer coverage of major medical 
  5.35  expenses to every applicant who applies to the insurer or 
  5.36  fraternal for a new unqualified policy, which has a lifetime 
  6.1   benefit limit of less than $1,000,000, at the time of 
  6.2   application and annually to every holder of such an unqualified 
  6.3   policy of accident and health insurance renewed by the insurer 
  6.4   or fraternal.  The coverage shall provide that when a covered 
  6.5   individual incurs out-of-pocket expenses of $5,000 or more 
  6.6   within a calendar year for services covered in section 62E.06, 
  6.7   subdivision 1, benefits shall be payable, subject to any 
  6.8   copayment authorized by the commissioner, up to a maximum 
  6.9   lifetime limit of $500,000.  The offer of coverage of major 
  6.10  medical expenses may consist of the offer of a rider on an 
  6.11  existing unqualified policy or a new policy which is a qualified 
  6.12  plan.  
  6.13     Sec. 7.  Minnesota Statutes 1998, section 62J.09, 
  6.14  subdivision 8, is amended to read: 
  6.15     Subd. 8.  [REPEALER.] This section is repealed effective 
  6.16  July 1, 2000 1999. 
  6.17     Sec. 8.  Minnesota Statutes 1998, section 62J.301, 
  6.18  subdivision 4, is amended to read: 
  6.19     Subd. 4.  [INFORMATION TO BE COLLECTED.] (a) The data 
  6.20  collected may include health outcomes data, patient functional 
  6.21  status, and health status.  The data collected may include 
  6.22  information necessary to measure and make adjustments for 
  6.23  differences in the severity of patient condition across 
  6.24  different health care providers, and may include data obtained 
  6.25  directly from the patient or from patient medical records, as 
  6.26  provided in section 62J.321, subdivision 1. 
  6.27     (b) The commissioner may: 
  6.28     (1) collect the encounter level data required for the 
  6.29  research and data initiatives of sections 62J.301 to 62J.42, 
  6.30  using, to the greatest extent possible, standardized forms and 
  6.31  procedures; and 
  6.32     (2) process the data collected to ensure validity, 
  6.33  consistency, accuracy, and completeness, and as appropriate, 
  6.34  merge data collected from different sources. 
  6.35     (c) For purposes of estimating total health care spending 
  6.36  and forecasting rates of growth in health care spending, the 
  7.1   commissioner may collect from health care providers data on 
  7.2   patient revenues and health care spending during a time period 
  7.3   specified by the commissioner.  The commissioner may also 
  7.4   collect data on health care revenues and spending from group 
  7.5   purchasers of health care.  Health care providers and group 
  7.6   purchasers doing business in the state shall provide the data 
  7.7   requested by the commissioner at the times and in the form 
  7.8   specified by the commissioner.  Professional licensing boards 
  7.9   and state agencies responsible for licensing, registering, or 
  7.10  regulating providers and group purchasers shall cooperate fully 
  7.11  with the commissioner in achieving compliance with the reporting 
  7.12  requirements. 
  7.13     Sec. 9.  Minnesota Statutes 1998, section 62J.321, 
  7.14  subdivision 1, is amended to read: 
  7.15     Subdivision 1.  [DATA COLLECTION.] (a) The commissioner 
  7.16  shall collect data from health care providers, health plan 
  7.17  companies, and individuals in the most cost-effective manner, 
  7.18  which does not unduly burden them.  Providers, health plan 
  7.19  companies, and individuals may provide the data in the form in 
  7.20  which it was collected.  The commissioner may require health 
  7.21  care providers and health plan companies to collect and provide 
  7.22  patient health records and claim files, and cooperate in other 
  7.23  ways with the data collection process.  The commissioner may 
  7.24  also require health care providers and health plan companies to 
  7.25  provide mailing lists of patients.  Patient consent shall not be 
  7.26  required for the release of data to the commissioner pursuant to 
  7.27  sections 62J.301 to 62J.42 by any group purchaser, health plan 
  7.28  company, health care provider; or agent, contractor, or 
  7.29  association acting on behalf of a group purchaser or health care 
  7.30  provider.  Any group purchaser, health plan company, health care 
  7.31  provider; or agent, contractor, or association acting on behalf 
  7.32  of a group purchaser or health care provider, that releases data 
  7.33  to the commissioner in good faith pursuant to sections 62J.301 
  7.34  to 62J.42 shall be immune from civil liability and criminal 
  7.35  prosecution. 
  7.36     (b) When a group purchaser, health plan company, or health 
  8.1   care provider submits patient identifying data, as defined in 
  8.2   section 62J.451, to the commissioner pursuant to sections 
  8.3   62J.301 to 62J.42, and the data is submitted to the commissioner 
  8.4   in electronic form, or through other electronic means including, 
  8.5   but not limited to, the electronic data interchange system 
  8.6   defined in section 62J.451, the group purchaser, health plan 
  8.7   company, or health care provider shall submit the patient 
  8.8   identifying data in encrypted form, using an encryption method 
  8.9   specified by the commissioner.  Submission of encrypted data as 
  8.10  provided in this paragraph satisfies the requirements of section 
  8.11  144.335, subdivision 3b. 
  8.12     (c) The commissioner shall require all health care 
  8.13  providers, group purchasers, and state agencies to use a 
  8.14  standard patient identifier and a standard identifier for 
  8.15  providers and health plan companies when reporting data under 
  8.16  this chapter.  The commissioner must encrypt patient identifiers 
  8.17  to prevent identification of individual patients and to enable 
  8.18  release of otherwise private data to researchers, providers, and 
  8.19  group purchasers in a manner consistent with chapter 13 and 
  8.20  sections 62J.55 and 144.335.  This encryption must ensure that 
  8.21  any data released must be in a form that makes it impossible to 
  8.22  identify individual patients.  
  8.23     Sec. 10.  Minnesota Statutes 1998, section 62J.75, is 
  8.24  amended to read: 
  8.25     62J.75 [CONSUMER ADVISORY BOARD.] 
  8.26     (a) The consumer advisory board consists of 18 members 
  8.27  appointed in accordance with paragraph (b).  All members must be 
  8.28  public, consumer members who: 
  8.29     (1) do not have and never had a material interest in either 
  8.30  the provision of health care services or in an activity directly 
  8.31  related to the provision of health care services, such as health 
  8.32  insurance sales or health plan administration; 
  8.33     (2) are not registered lobbyists; and 
  8.34     (3) are not currently responsible for or directly involved 
  8.35  in the purchasing of health insurance for a business or 
  8.36  organization. 
  9.1      (b) The governor, the speaker of the house of 
  9.2   representatives, and the subcommittee on committees of the 
  9.3   committee on rules and administration of the senate shall each 
  9.4   appoint six members.  Members may be compensated in accordance 
  9.5   with section 15.059, subdivision 3, except that members shall 
  9.6   not receive per diem compensation or reimbursements for child 
  9.7   care expenses. 
  9.8      (c) The board shall advise the commissioners of health and 
  9.9   commerce on the following: 
  9.10     (1) the needs of health care consumers and how to better 
  9.11  serve and educate the consumers on health care concerns and 
  9.12  recommend solutions to identified problems; and 
  9.13     (2) consumer protection issues in the self-insured market, 
  9.14  including, but not limited to, public education needs. 
  9.15     The board also may make recommendations to the legislature 
  9.16  on these issues. 
  9.17     (d) The board and this section expire June 30, 2001 1999. 
  9.18     Sec. 11.  Minnesota Statutes 1998, section 62M.09, 
  9.19  subdivision 3, is amended to read: 
  9.20     Subd. 3.  [PHYSICIAN REVIEWER INVOLVEMENT.] A physician or 
  9.21  other provider of similar training and specialty as the 
  9.22  attending physician or other provider who recommended the 
  9.23  treatment, must review all cases in which the utilization review 
  9.24  organization has concluded that a determination not to certify 
  9.25  for clinical reasons is appropriate.  The physician reviewer 
  9.26  should be reasonably available by telephone to discuss the 
  9.27  determination with the attending physician or other provider.  
  9.28  This subdivision does not apply to outpatient mental health or 
  9.29  substance abuse services governed by subdivision 3a.  
  9.30     Sec. 12.  Minnesota Statutes 1998, section 62N.25, 
  9.31  subdivision 7, is amended to read: 
  9.32     Subd. 7.  [EXEMPTIONS FROM EXISTING REQUIREMENTS.] 
  9.33  Community integrated service networks are exempt from the 
  9.34  following requirements applicable to health maintenance 
  9.35  organizations: 
  9.36     (1) conducting focused studies under Minnesota Rules, part 
 10.1   4685.1125; 
 10.2      (2) preparing and filing, as a condition of licensure, a 
 10.3   written quality assurance plan, and annually filing such a plan 
 10.4   and a work plan, under Minnesota Rules, parts 4685.1110 and 
 10.5   4685.1130; 
 10.6      (3) maintaining statistics under Minnesota Rules, part 
 10.7   4685.1200; 
 10.8      (4) filing provider contract forms under sections 62D.03, 
 10.9   subdivision 4, and 62D.08, subdivision 1; and 
 10.10     (5) reporting any changes in the address of a network 
 10.11  provider or length of a provider contract or additions to the 
 10.12  provider network to the commissioner within ten days under 
 10.13  section 62D.08, subdivision 5.  Community networks must report 
 10.14  such information to the commissioner on a quarterly basis.  
 10.15  Community networks that fail to make the required quarterly 
 10.16  filing are subject to the penalties set forth in section 62D.08, 
 10.17  subdivision 5; and 
 10.18     (6) (2) preparing and filing, as a condition of licensure, 
 10.19  a marketing plan, and annually filing a marketing plan, under 
 10.20  sections 62D.03, subdivision 4, paragraph (l), and 62D.08, 
 10.21  subdivision 1. 
 10.22     Sec. 13.  Minnesota Statutes 1998, section 62Q.075, is 
 10.23  amended by adding a subdivision to read: 
 10.24     Subd. 1a.  [COOPERATION.] Health maintenance organizations 
 10.25  and community integrated service networks are encouraged to work 
 10.26  together with local public health agencies to achieve public 
 10.27  health goals. 
 10.28     Sec. 14.  Minnesota Statutes 1998, section 62Q.095, 
 10.29  subdivision 1, is amended to read: 
 10.30     Subdivision 1.  [PROVIDER ACCEPTANCE REQUIRED.] Each health 
 10.31  plan company, with the exception of any health plan company with 
 10.32  50,000 or fewer enrollees in its commercial health plan products 
 10.33  and health plan companies that are exempt under subdivision 6, 
 10.34  shall establish an expanded network of allied independent health 
 10.35  providers, in addition to a preferred network.  A health plan 
 10.36  company shall accept as a provider in the expanded network any 
 11.1   allied independent health provider who:  (1) meets the health 
 11.2   plan company's credentialing standards; (2) agrees to the terms 
 11.3   of the health plan company's provider contract; and (3) agrees 
 11.4   to comply with all managed care protocols of the health plan 
 11.5   company.  A preferred network shall be considered an expanded 
 11.6   network if all allied independent health providers who meet the 
 11.7   requirements of clauses (1), (2), and (3) are accepted into the 
 11.8   preferred network.  A community integrated service network may 
 11.9   offer to its enrollees an expanded network of allied independent 
 11.10  health providers as described under this section.  
 11.11     Sec. 15.  Minnesota Statutes 1998, section 62Q.51, 
 11.12  subdivision 4, is amended to read: 
 11.13     Subd. 4.  [EXEMPTION.] This section does not apply to a 
 11.14  health plan company with fewer than 50,000 enrollees in its 
 11.15  commercial health plan products. 
 11.16     Sec. 16.  [62Q.68] [PRODUCT VARIETY PERMITTED.] 
 11.17     A health plan company may offer, sell, issue, and renew 
 11.18  health plans that contain any deductible, copayment, and 
 11.19  coinsurance provisions, without restriction.  A health plan 
 11.20  company may also offer, sell, issue, and renew products that 
 11.21  provide coverage on a per diem, fixed indemnity, or 
 11.22  non-expense-incurred basis.  This section overrides any contrary 
 11.23  provision of chapter 62A, 62C, 62D, 64B, or 72A, or of rules 
 11.24  adopted under any of these chapters. 
 11.25     Sec. 17.  [STUDY OF EFFECTS OF HEALTH REGULATION.] 
 11.26     (a) The commissioners of health and commerce shall jointly 
 11.27  convene an informal study group to study the effects of cost 
 11.28  containment goals and health plan premium regulation.  The study 
 11.29  must address the issues of whether and how cost containment 
 11.30  goals and premium regulation have affected: 
 11.31     (1) the cost of public and private sector health coverage; 
 11.32  and 
 11.33     (2) the number of Minnesota residents who have, and who do 
 11.34  not have, health coverage. 
 11.35     (b) The commissioners of health and commerce shall jointly 
 11.36  select the members of the study group, which must include 
 12.1   legislators, representatives of health plan companies, 
 12.2   purchasers of health care or health coverage, and consumers. 
 12.3      (c) The informal study group must report its findings to 
 12.4   the legislature in writing on or before December 15, 1999. 
 12.5      Sec. 18.  [REPEALER.] 
 12.6      (a) Minnesota Statutes 1998, sections 16B.93; 16B.94; 
 12.7   16B.95; 16B.96; 62D.04, subdivision 5; 62D.08, subdivision 5; 
 12.8   62J.17; 62Q.07; 62Q.075; 62Q.105; 62Q.11; 62Q.30; 62Q.64; and 
 12.9   256B.0644, are repealed. 
 12.10     (b) Minnesota Rules, parts 4685.1105; 4685.1110; 4685.1115; 
 12.11  4685.1120; 4685.1125; 4685.1130; 4685.1200; and 4685.1900, are 
 12.12  repealed.