1.1                          A bill for an act 
  1.2             relating to health; providing for certain patient 
  1.3             rights and protections; regulating coverages and the 
  1.4             classification of treatment; specifying the duties of 
  1.5             certain carriers and providers; providing remedies; 
  1.6             amending Minnesota Statutes 1998, sections 62A.60; 
  1.7             62J.71, subdivision 3; 62J.72, by adding a 
  1.8             subdivision; 62J.80; 62M.09, subdivisions 2 and 6; and 
  1.9             62Q.58, by adding subdivisions; Minnesota Statutes 
  1.10            1999 Supplement, sections 62M.07; and 62M.09, 
  1.11            subdivision 3; proposing coding for new law in 
  1.12            Minnesota Statutes, chapter 62Q; proposing coding for 
  1.13            new law as Minnesota Statutes, chapter 62U. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1998, section 62A.60, is 
  1.16  amended to read: 
  1.17     62A.60 [RETROACTIVE DENIAL OF EXPENSES.] 
  1.18     In cases where the subscriber or insured is liable for 
  1.19  costs beyond applicable copayments or deductibles, no insurer 
  1.20  may retroactively deny payment to a person who is covered when 
  1.21  the services are provided for health care services that are 
  1.22  otherwise covered, if the insurer or its representative failed 
  1.23  to provide prior or concurrent review or authorization for the 
  1.24  expenses when required to do so under the policy, plan, or 
  1.25  certificate.  If prior or concurrent review or authorization was 
  1.26  provided by the insurer or its representative, and the 
  1.27  preexisting condition limitation provision, the general 
  1.28  exclusion provision and any other coinsurance, or other policy 
  1.29  requirements have been met, the insurer may not deny payment for 
  2.1   the authorized service or time period except in cases where 
  2.2   fraud or substantive misrepresentation occurred.  A health 
  2.3   carrier that has given preauthorization approval for a service 
  2.4   or treatment may not subsequently deny payment for that service 
  2.5   or treatment except in cases of fraud or ineligibility.  At the 
  2.6   time a decision regarding the medical necessity of a service or 
  2.7   treatment is communicated to an enrollee in accordance with 
  2.8   section 62M.05, a health carrier shall also communicate whether 
  2.9   the requested service or treatment is a covered benefit.  
  2.10     Sec. 2.  Minnesota Statutes 1998, section 62J.71, 
  2.11  subdivision 3, is amended to read: 
  2.12     Subd. 3.  [RETALIATION PROHIBITED.] No person, health plan 
  2.13  company, or other organization may take retaliatory action 
  2.14  against a health care provider solely on the grounds that the 
  2.15  provider: 
  2.16     (1) refused to enter into an agreement or provide services 
  2.17  or information in a manner that is prohibited under this section 
  2.18  or took any of the actions listed in subdivision 1; 
  2.19     (2) disclosed accurate information about whether a health 
  2.20  care service or treatment is covered by an enrollee's health 
  2.21  plan company, health insurer, or health coverage plan; 
  2.22     (3) discussed diagnostic, treatment, or referral options 
  2.23  that are not covered or are limited by the enrollee's health 
  2.24  plan company, health insurer, or health coverage plan; 
  2.25     (4) criticized coverage of the enrollee's health plan 
  2.26  company, health insurer, or health coverage plan; or 
  2.27     (5) expressed personal disagreement with a decision made by 
  2.28  a person, organization, or health care provider regarding 
  2.29  treatment or coverage provided to a patient of the provider, or 
  2.30  assisted or advocated for the patient in seeking reconsideration 
  2.31  of such a decision, provided the health care provider makes it 
  2.32  clear that the provider is acting in a personal capacity and not 
  2.33  as a representative of or on behalf of the entity that made the 
  2.34  decision; 
  2.35     (6) disclosed, in good faith, information relating to the 
  2.36  care, services, or conditions affecting an enrollee to an 
  3.1   appropriate public regulatory agency, private accreditation 
  3.2   body, or management personnel of the health plan company as 
  3.3   otherwise allowed by law; 
  3.4      (7) initiates, cooperates, or otherwise participates in a 
  3.5   utilization review under chapter 62M or in an investigation or 
  3.6   proceeding by a public regulatory agency; or 
  3.7      (8) provides, as otherwise allowed by law:  (i) testimony, 
  3.8   evidence, records, or other assistance to an enrollee; or (ii) 
  3.9   advocates on behalf of an enrollee who brings a claim against a 
  3.10  health carrier under chapter 62U. 
  3.11     Sec. 3.  Minnesota Statutes 1998, section 62J.72, is 
  3.12  amended by adding a subdivision to read: 
  3.13     Subd. 3a.  [COVERAGE AGREEMENT OR SUBSCRIBER CONTRACT.] A 
  3.14  health plan company shall provide to a prospective enrollee upon 
  3.15  request a specimen copy of the certificate of coverage, 
  3.16  subscriber contract, or other evidence of coverage required to 
  3.17  be filed with the commissioner of commerce or commissioner of 
  3.18  health under chapter 62A, 62C, 62D, or 62N. 
  3.19     Sec. 4.  Minnesota Statutes 1998, section 62J.80, is 
  3.20  amended to read: 
  3.21     62J.80 [RETALIATION.] 
  3.22     A health plan company or health care provider shall not 
  3.23  retaliate or take adverse action against an enrollee or, patient 
  3.24  , or health care provider who, in good faith, makes a complaint 
  3.25  against a health plan company or health care provider, 
  3.26  participates in a utilization review under chapter 62M, or 
  3.27  brings a claim under chapter 62U.  If retaliation is suspected, 
  3.28  the executive director of a health-related licensing board as 
  3.29  defined in section 214.01, subdivision 2, may report it to the 
  3.30  appropriate regulatory authority.  
  3.31     Sec. 5.  Minnesota Statutes 1999 Supplement, section 
  3.32  62M.07, is amended to read: 
  3.33     62M.07 [PRIOR AUTHORIZATION OF SERVICES.] 
  3.34     (a) Utilization review organizations conducting prior 
  3.35  authorization of services must have written standards that meet 
  3.36  at a minimum the following requirements: 
  4.1      (1) written procedures and criteria used to determine 
  4.2   whether care is appropriate, reasonable, or medically necessary; 
  4.3      (2) a system for providing prompt notification of its 
  4.4   determinations to enrollees and providers and for notifying the 
  4.5   provider, enrollee, or enrollee's designee of appeal procedures 
  4.6   under clause (4); 
  4.7      (3) compliance with section 62M.05, subdivisions 3a and 3b, 
  4.8   regarding time frames for approving and disapproving prior 
  4.9   authorization requests; 
  4.10     (4) written procedures for appeals of denials of prior 
  4.11  authorization which specify the responsibilities of the enrollee 
  4.12  and provider, and which meet the requirements of sections 62M.06 
  4.13  and 72A.285, regarding release of summary review findings; and 
  4.14     (5) procedures to ensure confidentiality of 
  4.15  patient-specific information, consistent with applicable law. 
  4.16     (b) No utilization review organization, health plan 
  4.17  company, or claims administrator may conduct or require prior 
  4.18  authorization of emergency confinement or emergency treatment.  
  4.19  The enrollee or the enrollee's authorized representative may be 
  4.20  required to notify the health plan company, claims 
  4.21  administrator, or utilization review organization as soon after 
  4.22  the beginning of the emergency confinement or emergency 
  4.23  treatment as reasonably possible. 
  4.24     (c) A utilization review organization, health plan company, 
  4.25  or claims administrator, which uses the written procedures 
  4.26  required under paragraph (a), clause (1), in determining that 
  4.27  care is not appropriate, reasonable, or medically necessary, 
  4.28  must provide a copy of the written procedures to the enrollee 
  4.29  seeking the care. 
  4.30     (d) A utilization review organization shall file an annual 
  4.31  report with the commissioner of commerce that includes: 
  4.32     (1) the number and rate of denied prior authorization 
  4.33  requests for each procedure or service; and 
  4.34     (2) the number and rate of denials overturned on appeal for 
  4.35  each procedure or service. 
  4.36     Sec. 6.  Minnesota Statutes 1998, section 62M.09, 
  5.1   subdivision 2, is amended to read: 
  5.2      Subd. 2.  [LICENSURE REQUIREMENT.] Nurses, physicians, and 
  5.3   other Except as provided under subdivision 3, licensed health 
  5.4   professionals conducting reviews of medical services, and other 
  5.5   clinical reviewers conducting specialized reviews in their area 
  5.6   of specialty must be currently licensed or certified by an 
  5.7   approved state licensing agency in the United States. 
  5.8      Sec. 7.  Minnesota Statutes 1999 Supplement, section 
  5.9   62M.09, subdivision 3, is amended to read: 
  5.10     Subd. 3.  [PHYSICIAN REVIEWER INVOLVEMENT.] A physician 
  5.11  must review all cases in which the utilization review 
  5.12  organization has concluded that a determination not to certify 
  5.13  for clinical reasons is appropriate.  The physician conducting 
  5.14  the review must be licensed in Minnesota.  The physician should 
  5.15  must be reasonably available by telephone to discuss the 
  5.16  determination with the attending health care professional 
  5.17  physician and the enrollee or the enrollee's designee.  This 
  5.18  subdivision does not apply to outpatient mental health or 
  5.19  substance abuse services governed by subdivision 3a or to 
  5.20  chiropractic services as defined in section 148.01.  
  5.21     Sec. 8.  Minnesota Statutes 1998, section 62M.09, 
  5.22  subdivision 6, is amended to read: 
  5.23     Subd. 6.  [PHYSICIAN CONSULTANTS.] A utilization review 
  5.24  organization must use physician consultants in the appeal 
  5.25  process described in section 62M.06, subdivision 3.  The 
  5.26  physician consultants should include, as needed and available, 
  5.27  specialists who are must be board-certified, or board-eligible 
  5.28  and working towards certification, in a specialty board approved 
  5.29  by the American Board of Medical Specialists or the American 
  5.30  Board of Osteopathy, licensed in Minnesota, and must practice in 
  5.31  the same or similar specialty or area of practice involved in 
  5.32  the request for treatment. 
  5.33     Sec. 9.  [62Q.535] [MEDICALLY NECESSARY CARE.] 
  5.34     For purposes of coverage under a health plan, "medically 
  5.35  necessary care" means diagnostic testing, preventive services, 
  5.36  and health care services that are appropriate, in terms of 
  6.1   types, frequency, level, setting, and duration, to the 
  6.2   enrollee's diagnosis or condition.  Medically necessary care 
  6.3   must be consistent with generally accepted practice parameters, 
  6.4   as determined by licensed health care providers in the same or 
  6.5   similar general specialty as typically manages the condition, 
  6.6   procedure, or treatment at issue and must: 
  6.7      (1) help restore, establish, maintain, or improve the 
  6.8   enrollee's health condition or function; 
  6.9      (2) prevent deterioration of the enrollee's health 
  6.10  condition or function; or 
  6.11     (3) prevent the reasonably likely onset of a health problem 
  6.12  or detect an incipient problem. 
  6.13     Sec. 10.  Minnesota Statutes 1998, section 62Q.58, is 
  6.14  amended by adding a subdivision to read: 
  6.15     Subd. 1a.  [DEFINITION OF SPECIALIST.] For purposes of this 
  6.16  section, "specialist" means, with respect to a condition or 
  6.17  disease, a health care provider, or health care facility that 
  6.18  has adequate expertise through appropriate training and 
  6.19  practical clinical experience, including appropriate pediatric 
  6.20  expertise in the case of a child, to provide high-quality care 
  6.21  in treating the unique condition or disease of the particular 
  6.22  patient. 
  6.23     Sec. 11.  Minnesota Statutes 1998, section 62Q.58, is 
  6.24  amended by adding a subdivision to read: 
  6.25     Subd. 1b.  [MANDATORY REFERRAL.] (a) A health plan company 
  6.26  must make or provide for a referral to an appropriate 
  6.27  participating specialist who is available and accessible to 
  6.28  provide the treatment, or to a nonparticipating specialist if 
  6.29  the health plan company does not have an appropriate 
  6.30  participating specialist that is available and accessible to 
  6.31  treat the enrollee's condition or disease if the enrollee has a 
  6.32  condition or disease of sufficient seriousness in complexity to 
  6.33  require treatment by a specialist. 
  6.34     (b) If an enrollee receives services from a 
  6.35  nonparticipating specialist because a participating specialist 
  6.36  is not available, services shall be provided at no additional 
  7.1   cost to the enrollee beyond what the enrollee would otherwise 
  7.2   pay for services received from a participating specialist. 
  7.3      Sec. 12.  [62U.01] [SHORT TITLE.] 
  7.4      This chapter may be cited as the "Health Care Liability 
  7.5   Act." 
  7.6      Sec. 13.  [62U.02] [DEFINITIONS.] 
  7.7      Subdivision 1.  [ENROLLEE.] "Enrollee" means an individual 
  7.8   who is covered by a health carrier, health insurance, or health 
  7.9   coverage plan, including an insured, policy holder, subscriber, 
  7.10  contract holder, member-covered person, or certificate holder. 
  7.11     Subd. 2.  [HEALTH CARE PROVIDER.] "Health care provider" or 
  7.12  "provider" means a person defined in section 144.335, 
  7.13  subdivision 1, paragraph (b). 
  7.14     Subd. 3.  [HEALTH CARE TREATMENT DECISION.] "Health care 
  7.15  treatment decision" means a determination or decision made that 
  7.16  affects the quality of the diagnosis, care, or treatment 
  7.17  provided to an enrollee.  A health care treatment decision 
  7.18  includes, but is not limited to, a determination that a service, 
  7.19  treatment, or procedure is not medically necessary. 
  7.20     Subd. 4.  [HEALTH CARRIER.] "Health carrier" means an 
  7.21  insurance company licensed under chapter 60A to offer, sell, or 
  7.22  issue an individual or group policy of accident and sickness 
  7.23  insurance as defined in section 62A.01; a nonprofit health 
  7.24  service plan corporation operating under chapter 62C; a health 
  7.25  maintenance organization operating under chapter 62D; a joint 
  7.26  self-insurance employee health plan operating under chapter 62H; 
  7.27  a community integrated systems network licensed under chapter 
  7.28  62N; a fraternal benefit society operating under chapter 64B; or 
  7.29  an association, partnership, corporation, or limited liability 
  7.30  corporation organized for the purpose of providing, arranging, 
  7.31  or administering health care services or treatment. 
  7.32     Subd. 5.  [MEDICALLY NECESSARY CARE.] "Medically necessary 
  7.33  care" means diagnostic testing, preventative services, and 
  7.34  health care services that are appropriate, in terms of types, 
  7.35  frequency, level, setting, and duration, to the enrollee's 
  7.36  diagnosis or condition.  Medically necessary care must be 
  8.1   consistent with generally accepted practice parameters, as 
  8.2   determined by licensed health care providers in the same or 
  8.3   similar general specialty as typically manages the condition, 
  8.4   procedure, or treatment at issue and must: 
  8.5      (1) help restore, establish, maintain, or improve the 
  8.6   enrollee's health condition or function; 
  8.7      (2) prevent deterioration of the enrollee's health 
  8.8   condition or function; or 
  8.9      (3) prevent the reasonably likely onset of a health problem 
  8.10  or detect an incipient problem. 
  8.11     Subd. 6.  [ORDINARY CARE.] "Ordinary care" means, in the 
  8.12  case of a health carrier, that degree of care that a health 
  8.13  carrier of ordinary prudence would use under the same or similar 
  8.14  circumstances.  In the case of a person who is an employee, 
  8.15  agent, or representative of a health carrier, ordinary care 
  8.16  means that degree of care that a person of ordinary prudence in 
  8.17  the same profession, specialty, or area of practice would use in 
  8.18  the same or similar circumstances. 
  8.19     Sec. 14.  [62U.03] [APPLICATION.] 
  8.20     Subdivision 1.  [DUTY OF ORDINARY CARE.] A health carrier 
  8.21  has the duty to exercise ordinary care when making health care 
  8.22  treatment decisions and is liable for damages to an enrollee for 
  8.23  harm proximately caused by its failure to exercise ordinary care.
  8.24     Subd. 2.  [RESPONSIBILITY FOR ACTIONS OF OTHERS.] A health 
  8.25  carrier is also liable for damages to an enrollee for harm 
  8.26  proximately caused by a health care treatment decision made by 
  8.27  its: 
  8.28     (1) employees; 
  8.29     (2) agents; or 
  8.30     (3) representatives who are acting on its behalf and over 
  8.31  whom it has the right to exercise influence or control or has 
  8.32  actually exercised influence or control that results in the 
  8.33  failure to exercise ordinary care. 
  8.34     In an action against a health carrier, a finding that a 
  8.35  health care provider is an employee, agent, or representative of 
  8.36  the health carrier shall not be based solely on proof that the 
  9.1   person's name appears in a listing of approved health care 
  9.2   providers made available to enrollees under a health plan. 
  9.3      Subd. 3.  [DEFENSES.] It shall be a defense to an action 
  9.4   asserted against a health carrier that: 
  9.5      (1) neither the health carrier, nor any employee, agent, or 
  9.6   representative for whose conduct the health carrier is liable 
  9.7   under subdivision 2, controlled, influenced, or participated in 
  9.8   the health care treatment decision; and 
  9.9      (2) the health carrier did not deny or delay payment for 
  9.10  any service, treatment, or procedure prescribed or recommended 
  9.11  by a provider to the enrollee. 
  9.12     Subd. 4.  [LIMITATIONS.] (a) The standards in subdivisions 
  9.13  1 and 2 create no obligation on the part of the health carrier 
  9.14  to provide to an enrollee a service, treatment, or procedure 
  9.15  that is not covered by the health plan. 
  9.16     (b) This chapter does not create liability on the part of 
  9.17  an employer or an employer group purchasing organization that 
  9.18  purchases coverage or assumes risk on behalf of its employees. 
  9.19     Subd. 5.  [LIMITATION ON DEFENSES.] Nothing in any law of 
  9.20  this state prohibiting a health carrier from practicing medicine 
  9.21  or being licensed to practice medicine may be asserted as a 
  9.22  defense by the health carrier in an action brought against it 
  9.23  pursuant to this section or any other law. 
  9.24     Subd. 6.  [NONAPPLICATION.] This chapter does not apply to 
  9.25  workers' compensation insurance coverage under chapter 79 or 
  9.26  workers' compensation self-insurance under chapter 79A. 
  9.27     Subd. 7.  [RECOVERY OF ATTORNEY FEES AND OTHER 
  9.28  EXPENSES.] If an enrollee is the prevailing party in a 
  9.29  proceeding under this section, the court may award attorney fees 
  9.30  and other reasonable expenses to the enrollee.  This subdivision 
  9.31  does not preclude an enrollee from recovering costs, 
  9.32  disbursements, fees, and expenses under other applicable law. 
  9.33     Subd. 8.  [TRANSFER OF LIABILITY.] Any agreement or 
  9.34  directive that attempts to transfer to a health care provider, 
  9.35  by indemnification or otherwise, any tort liability relating to 
  9.36  the activities, actions, or omissions of a health carrier is 
 10.1   contrary to state public policy and is null and void. 
 10.2      Subd. 9.  [WAIVER OF LIABILITY.] Any agreement or waiver by 
 10.3   an enrollee of the provisions of this section is contrary to 
 10.4   state public policy and is null and void. 
 10.5      Subd. 10.  [EXHAUSTION OF APPEALS.] (a) An enrollee must 
 10.6   exhaust the external review process to the extent authorized by 
 10.7   law before a claim can be brought against a health carrier under 
 10.8   this chapter.  
 10.9      (b) An enrollee of the Minnesota comprehensive health 
 10.10  association or a governmental program, including the prepaid 
 10.11  medical assistance program, the MinnesotaCare program, the 
 10.12  prepaid general assistance medical care program and the federal 
 10.13  Medicare program must exhaust any complaint and appeal process 
 10.14  currently available under those programs before a claim can be 
 10.15  brought against the health carrier administering the program or 
 10.16  the government program under this chapter. 
 10.17     Sec. 15.  [EFFECTIVE DATE.] 
 10.18     Sections 1 to 13 are effective January 1, 2001, and apply 
 10.19  to health plan contracts issued or renewed on or after that date.
 10.20  Section 14 shall apply to claims arising from events that occur 
 10.21  on or after January 1, 2001, for health plan contracts issued or 
 10.22  renewed on or after that date.