1.1                          A bill for an act 
  1.2             relating to human services; modifying provisions for 
  1.3             children's health insurance; amending Minnesota 
  1.4             Statutes 2000, sections 256.01, subdivision 2; 
  1.5             256.9657, subdivision 2; 256B.055, subdivision 3a; 
  1.6             256B.056, subdivision 4; 256B.057, subdivisions 2, 9, 
  1.7             and by adding a subdivision; 256B.0625, subdivisions 
  1.8             13, 13a, 18a, and 30; 256B.0635, subdivisions 1 and 2; 
  1.9             256B.69, subdivision 3a; 256B.75; 256J.31, subdivision 
  1.10            12; 256K.03, subdivision 1; 256K.07; 256L.02, 
  1.11            subdivision 4; 256L.06, subdivision 3; 256L.07, 
  1.12            subdivisions 1 and 3; and 256L.15, subdivision 1; 
  1.13            proposing coding for new law in Minnesota Statutes, 
  1.14            chapter 256B; repealing Minnesota Statutes 2000, 
  1.15            sections 256.01, subdivision 18; 256B.0635, 
  1.16            subdivision 3; 256J.32, subdivision 7a; and 256L.15, 
  1.17            subdivision 3. 
  1.18  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.19     Section 1.  Minnesota Statutes 2000, section 256.01, 
  1.20  subdivision 2, is amended to read: 
  1.21     Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
  1.22  section 241.021, subdivision 2, the commissioner of human 
  1.23  services shall: 
  1.24     (1) Administer and supervise all forms of public assistance 
  1.25  provided for by state law and other welfare activities or 
  1.26  services as are vested in the commissioner.  Administration and 
  1.27  supervision of human services activities or services includes, 
  1.28  but is not limited to, assuring timely and accurate distribution 
  1.29  of benefits, completeness of service, and quality program 
  1.30  management.  In addition to administering and supervising human 
  1.31  services activities vested by law in the department, the 
  2.1   commissioner shall have the authority to: 
  2.2      (a) require county agency participation in training and 
  2.3   technical assistance programs to promote compliance with 
  2.4   statutes, rules, federal laws, regulations, and policies 
  2.5   governing human services; 
  2.6      (b) monitor, on an ongoing basis, the performance of county 
  2.7   agencies in the operation and administration of human services, 
  2.8   enforce compliance with statutes, rules, federal laws, 
  2.9   regulations, and policies governing welfare services and promote 
  2.10  excellence of administration and program operation; 
  2.11     (c) develop a quality control program or other monitoring 
  2.12  program to review county performance and accuracy of benefit 
  2.13  determinations; 
  2.14     (d) require county agencies to make an adjustment to the 
  2.15  public assistance benefits issued to any individual consistent 
  2.16  with federal law and regulation and state law and rule and to 
  2.17  issue or recover benefits as appropriate; 
  2.18     (e) delay or deny payment of all or part of the state and 
  2.19  federal share of benefits and administrative reimbursement 
  2.20  according to the procedures set forth in section 256.017; 
  2.21     (f) make contracts with and grants to public and private 
  2.22  agencies and organizations, both profit and nonprofit, and 
  2.23  individuals, using appropriated funds; and 
  2.24     (g) enter into contractual agreements with federally 
  2.25  recognized Indian tribes with a reservation in Minnesota to the 
  2.26  extent necessary for the tribe to operate a federally approved 
  2.27  family assistance program or any other program under the 
  2.28  supervision of the commissioner.  The commissioner shall consult 
  2.29  with the affected county or counties in the contractual 
  2.30  agreement negotiations, if the county or counties wish to be 
  2.31  included, in order to avoid the duplication of county and tribal 
  2.32  assistance program services.  The commissioner may establish 
  2.33  necessary accounts for the purposes of receiving and disbursing 
  2.34  funds as necessary for the operation of the programs. 
  2.35     (2) Inform county agencies, on a timely basis, of changes 
  2.36  in statute, rule, federal law, regulation, and policy necessary 
  3.1   to county agency administration of the programs. 
  3.2      (3) Administer and supervise all child welfare activities; 
  3.3   promote the enforcement of laws protecting handicapped, 
  3.4   dependent, neglected and delinquent children, and children born 
  3.5   to mothers who were not married to the children's fathers at the 
  3.6   times of the conception nor at the births of the children; 
  3.7   license and supervise child-caring and child-placing agencies 
  3.8   and institutions; supervise the care of children in boarding and 
  3.9   foster homes or in private institutions; and generally perform 
  3.10  all functions relating to the field of child welfare now vested 
  3.11  in the state board of control. 
  3.12     (4) Administer and supervise all noninstitutional service 
  3.13  to handicapped persons, including those who are visually 
  3.14  impaired, hearing impaired, or physically impaired or otherwise 
  3.15  handicapped.  The commissioner may provide and contract for the 
  3.16  care and treatment of qualified indigent children in facilities 
  3.17  other than those located and available at state hospitals when 
  3.18  it is not feasible to provide the service in state hospitals. 
  3.19     (5) Assist and actively cooperate with other departments, 
  3.20  agencies and institutions, local, state, and federal, by 
  3.21  performing services in conformity with the purposes of Laws 
  3.22  1939, chapter 431. 
  3.23     (6) Act as the agent of and cooperate with the federal 
  3.24  government in matters of mutual concern relative to and in 
  3.25  conformity with the provisions of Laws 1939, chapter 431, 
  3.26  including the administration of any federal funds granted to the 
  3.27  state to aid in the performance of any functions of the 
  3.28  commissioner as specified in Laws 1939, chapter 431, and 
  3.29  including the promulgation of rules making uniformly available 
  3.30  medical care benefits to all recipients of public assistance, at 
  3.31  such times as the federal government increases its participation 
  3.32  in assistance expenditures for medical care to recipients of 
  3.33  public assistance, the cost thereof to be borne in the same 
  3.34  proportion as are grants of aid to said recipients. 
  3.35     (7) Establish and maintain any administrative units 
  3.36  reasonably necessary for the performance of administrative 
  4.1   functions common to all divisions of the department. 
  4.2      (8) Act as designated guardian of both the estate and the 
  4.3   person of all the wards of the state of Minnesota, whether by 
  4.4   operation of law or by an order of court, without any further 
  4.5   act or proceeding whatever, except as to persons committed as 
  4.6   mentally retarded.  For children under the guardianship of the 
  4.7   commissioner whose interests would be best served by adoptive 
  4.8   placement, the commissioner may contract with a licensed 
  4.9   child-placing agency to provide adoption services.  A contract 
  4.10  with a licensed child-placing agency must be designed to 
  4.11  supplement existing county efforts and may not replace existing 
  4.12  county programs, unless the replacement is agreed to by the 
  4.13  county board and the appropriate exclusive bargaining 
  4.14  representative or the commissioner has evidence that child 
  4.15  placements of the county continue to be substantially below that 
  4.16  of other counties.  Funds encumbered and obligated under an 
  4.17  agreement for a specific child shall remain available until the 
  4.18  terms of the agreement are fulfilled or the agreement is 
  4.19  terminated. 
  4.20     (9) Act as coordinating referral and informational center 
  4.21  on requests for service for newly arrived immigrants coming to 
  4.22  Minnesota. 
  4.23     (10) The specific enumeration of powers and duties as 
  4.24  hereinabove set forth shall in no way be construed to be a 
  4.25  limitation upon the general transfer of powers herein contained. 
  4.26     (11) Establish county, regional, or statewide schedules of 
  4.27  maximum fees and charges which may be paid by county agencies 
  4.28  for medical, dental, surgical, hospital, nursing and nursing 
  4.29  home care and medicine and medical supplies under all programs 
  4.30  of medical care provided by the state and for congregate living 
  4.31  care under the income maintenance programs. 
  4.32     (12) Have the authority to conduct and administer 
  4.33  experimental projects to test methods and procedures of 
  4.34  administering assistance and services to recipients or potential 
  4.35  recipients of public welfare.  To carry out such experimental 
  4.36  projects, it is further provided that the commissioner of human 
  5.1   services is authorized to waive the enforcement of existing 
  5.2   specific statutory program requirements, rules, and standards in 
  5.3   one or more counties.  The order establishing the waiver shall 
  5.4   provide alternative methods and procedures of administration, 
  5.5   shall not be in conflict with the basic purposes, coverage, or 
  5.6   benefits provided by law, and in no event shall the duration of 
  5.7   a project exceed four years.  It is further provided that no 
  5.8   order establishing an experimental project as authorized by the 
  5.9   provisions of this section shall become effective until the 
  5.10  following conditions have been met: 
  5.11     (a) The secretary of health and human services of the 
  5.12  United States has agreed, for the same project, to waive state 
  5.13  plan requirements relative to statewide uniformity. 
  5.14     (b) A comprehensive plan, including estimated project 
  5.15  costs, shall be approved by the legislative advisory commission 
  5.16  and filed with the commissioner of administration.  
  5.17     (13) According to federal requirements, establish 
  5.18  procedures to be followed by local welfare boards in creating 
  5.19  citizen advisory committees, including procedures for selection 
  5.20  of committee members. 
  5.21     (14) Allocate federal fiscal disallowances or sanctions 
  5.22  which are based on quality control error rates for the aid to 
  5.23  families with dependent children program formerly codified in 
  5.24  sections 256.72 to 256.87, medical assistance, or food stamp 
  5.25  program in the following manner:  
  5.26     (a) One-half of the total amount of the disallowance shall 
  5.27  be borne by the county boards responsible for administering the 
  5.28  programs.  For the medical assistance and the AFDC program 
  5.29  formerly codified in sections 256.72 to 256.87, disallowances 
  5.30  shall be shared by each county board in the same proportion as 
  5.31  that county's expenditures for the sanctioned program are to the 
  5.32  total of all counties' expenditures for the AFDC program 
  5.33  formerly codified in sections 256.72 to 256.87, and medical 
  5.34  assistance programs.  For the food stamp program, sanctions 
  5.35  shall be shared by each county board, with 50 percent of the 
  5.36  sanction being distributed to each county in the same proportion 
  6.1   as that county's administrative costs for food stamps are to the 
  6.2   total of all food stamp administrative costs for all counties, 
  6.3   and 50 percent of the sanctions being distributed to each county 
  6.4   in the same proportion as that county's value of food stamp 
  6.5   benefits issued are to the total of all benefits issued for all 
  6.6   counties.  Each county shall pay its share of the disallowance 
  6.7   to the state of Minnesota.  When a county fails to pay the 
  6.8   amount due hereunder, the commissioner may deduct the amount 
  6.9   from reimbursement otherwise due the county, or the attorney 
  6.10  general, upon the request of the commissioner, may institute 
  6.11  civil action to recover the amount due. 
  6.12     (b) Notwithstanding the provisions of paragraph (a), if the 
  6.13  disallowance results from knowing noncompliance by one or more 
  6.14  counties with a specific program instruction, and that knowing 
  6.15  noncompliance is a matter of official county board record, the 
  6.16  commissioner may require payment or recover from the county or 
  6.17  counties, in the manner prescribed in paragraph (a), an amount 
  6.18  equal to the portion of the total disallowance which resulted 
  6.19  from the noncompliance, and may distribute the balance of the 
  6.20  disallowance according to paragraph (a).  
  6.21     (15) Develop and implement special projects that maximize 
  6.22  reimbursements and result in the recovery of money to the 
  6.23  state.  For the purpose of recovering state money, the 
  6.24  commissioner may enter into contracts with third parties.  Any 
  6.25  recoveries that result from projects or contracts entered into 
  6.26  under this paragraph shall be deposited in the state treasury 
  6.27  and credited to a special account until the balance in the 
  6.28  account reaches $1,000,000.  When the balance in the account 
  6.29  exceeds $1,000,000, the excess shall be transferred and credited 
  6.30  to the general fund.  All money in the account is appropriated 
  6.31  to the commissioner for the purposes of this paragraph. 
  6.32     (16) Have the authority to make direct payments to 
  6.33  facilities providing shelter to women and their children 
  6.34  according to section 256D.05, subdivision 3.  Upon the written 
  6.35  request of a shelter facility that has been denied payments 
  6.36  under section 256D.05, subdivision 3, the commissioner shall 
  7.1   review all relevant evidence and make a determination within 30 
  7.2   days of the request for review regarding issuance of direct 
  7.3   payments to the shelter facility.  Failure to act within 30 days 
  7.4   shall be considered a determination not to issue direct payments.
  7.5      (17) Have the authority to establish and enforce the 
  7.6   following county reporting requirements:  
  7.7      (a) The commissioner shall establish fiscal and statistical 
  7.8   reporting requirements necessary to account for the expenditure 
  7.9   of funds allocated to counties for human services programs.  
  7.10  When establishing financial and statistical reporting 
  7.11  requirements, the commissioner shall evaluate all reports, in 
  7.12  consultation with the counties, to determine if the reports can 
  7.13  be simplified or the number of reports can be reduced. 
  7.14     (b) The county board shall submit monthly or quarterly 
  7.15  reports to the department as required by the commissioner.  
  7.16  Monthly reports are due no later than 15 working days after the 
  7.17  end of the month.  Quarterly reports are due no later than 30 
  7.18  calendar days after the end of the quarter, unless the 
  7.19  commissioner determines that the deadline must be shortened to 
  7.20  20 calendar days to avoid jeopardizing compliance with federal 
  7.21  deadlines or risking a loss of federal funding.  Only reports 
  7.22  that are complete, legible, and in the required format shall be 
  7.23  accepted by the commissioner.  
  7.24     (c) If the required reports are not received by the 
  7.25  deadlines established in clause (b), the commissioner may delay 
  7.26  payments and withhold funds from the county board until the next 
  7.27  reporting period.  When the report is needed to account for the 
  7.28  use of federal funds and the late report results in a reduction 
  7.29  in federal funding, the commissioner shall withhold from the 
  7.30  county boards with late reports an amount equal to the reduction 
  7.31  in federal funding until full federal funding is received.  
  7.32     (d) A county board that submits reports that are late, 
  7.33  illegible, incomplete, or not in the required format for two out 
  7.34  of three consecutive reporting periods is considered 
  7.35  noncompliant.  When a county board is found to be noncompliant, 
  7.36  the commissioner shall notify the county board of the reason the 
  8.1   county board is considered noncompliant and request that the 
  8.2   county board develop a corrective action plan stating how the 
  8.3   county board plans to correct the problem.  The corrective 
  8.4   action plan must be submitted to the commissioner within 45 days 
  8.5   after the date the county board received notice of noncompliance.
  8.6      (e) The final deadline for fiscal reports or amendments to 
  8.7   fiscal reports is one year after the date the report was 
  8.8   originally due.  If the commissioner does not receive a report 
  8.9   by the final deadline, the county board forfeits the funding 
  8.10  associated with the report for that reporting period and the 
  8.11  county board must repay any funds associated with the report 
  8.12  received for that reporting period. 
  8.13     (f) The commissioner may not delay payments, withhold 
  8.14  funds, or require repayment under paragraph (c) or (e) if the 
  8.15  county demonstrates that the commissioner failed to provide 
  8.16  appropriate forms, guidelines, and technical assistance to 
  8.17  enable the county to comply with the requirements.  If the 
  8.18  county board disagrees with an action taken by the commissioner 
  8.19  under paragraph (c) or (e), the county board may appeal the 
  8.20  action according to sections 14.57 to 14.69. 
  8.21     (g) Counties subject to withholding of funds under 
  8.22  paragraph (c) or forfeiture or repayment of funds under 
  8.23  paragraph (e) shall not reduce or withhold benefits or services 
  8.24  to clients to cover costs incurred due to actions taken by the 
  8.25  commissioner under paragraph (c) or (e). 
  8.26     (18) Allocate federal fiscal disallowances or sanctions for 
  8.27  audit exceptions when federal fiscal disallowances or sanctions 
  8.28  are based on a statewide random sample for the foster care 
  8.29  program under title IV-E of the Social Security Act, United 
  8.30  States Code, title 42, in direct proportion to each county's 
  8.31  title IV-E foster care maintenance claim for that period. 
  8.32     (19) Be responsible for ensuring the detection, prevention, 
  8.33  investigation, and resolution of fraudulent activities or 
  8.34  behavior by applicants, recipients, and other participants in 
  8.35  the human services programs administered by the department. 
  8.36     (20) Require county agencies to identify overpayments, 
  9.1   establish claims, and utilize all available and cost-beneficial 
  9.2   methodologies to collect and recover these overpayments in the 
  9.3   human services programs administered by the department. 
  9.4      (21) Have the authority to administer a drug rebate program 
  9.5   for drugs purchased pursuant to the prescription drug program 
  9.6   established under section 256.955 after the beneficiary's 
  9.7   satisfaction of any deductible established in the program.  The 
  9.8   commissioner shall require a rebate agreement from all 
  9.9   manufacturers of covered drugs as defined in section 256B.0625, 
  9.10  subdivision 13.  Rebate agreements for prescription drugs 
  9.11  delivered on or after July 1, 2002, must include rebates for 
  9.12  individuals covered under the prescription drug program who are 
  9.13  under 65 years of age.  For each drug, the amount of the rebate 
  9.14  shall be equal to the basic rebate as defined for purposes of 
  9.15  the federal rebate program in United States Code, title 42, 
  9.16  section 1396r-8(c)(1).  This basic rebate shall be applied to 
  9.17  single-source and multiple-source drugs.  The manufacturers must 
  9.18  provide full payment within 30 days of receipt of the state 
  9.19  invoice for the rebate within the terms and conditions used for 
  9.20  the federal rebate program established pursuant to section 1927 
  9.21  of title XIX of the Social Security Act.  The manufacturers must 
  9.22  provide the commissioner with any information necessary to 
  9.23  verify the rebate determined per drug.  The rebate program shall 
  9.24  utilize the terms and conditions used for the federal rebate 
  9.25  program established pursuant to section 1927 of title XIX of the 
  9.26  Social Security Act. 
  9.27     (21a) Have the authority to administer the federal drug 
  9.28  rebate program for drugs purchased under the medical assistance 
  9.29  program as allowed by section 1927 of title XIX of the Social 
  9.30  Security Act and according to the terms and conditions of 
  9.31  section 1927.  Rebates shall be collected for all drugs that 
  9.32  have been dispensed or administered in an outpatient setting and 
  9.33  that are from manufacturers who have signed a rebate agreement 
  9.34  with the United States Department of Health and Human Services. 
  9.35     (22) Operate the department's communication systems account 
  9.36  established in Laws 1993, First Special Session chapter 1, 
 10.1   article 1, section 2, subdivision 2, to manage shared 
 10.2   communication costs necessary for the operation of the programs 
 10.3   the commissioner supervises.  A communications account may also 
 10.4   be established for each regional treatment center which operates 
 10.5   communications systems.  Each account must be used to manage 
 10.6   shared communication costs necessary for the operations of the 
 10.7   programs the commissioner supervises.  The commissioner may 
 10.8   distribute the costs of operating and maintaining communication 
 10.9   systems to participants in a manner that reflects actual usage. 
 10.10  Costs may include acquisition, licensing, insurance, 
 10.11  maintenance, repair, staff time and other costs as determined by 
 10.12  the commissioner.  Nonprofit organizations and state, county, 
 10.13  and local government agencies involved in the operation of 
 10.14  programs the commissioner supervises may participate in the use 
 10.15  of the department's communications technology and share in the 
 10.16  cost of operation.  The commissioner may accept on behalf of the 
 10.17  state any gift, bequest, devise or personal property of any 
 10.18  kind, or money tendered to the state for any lawful purpose 
 10.19  pertaining to the communication activities of the department.  
 10.20  Any money received for this purpose must be deposited in the 
 10.21  department's communication systems accounts.  Money collected by 
 10.22  the commissioner for the use of communication systems must be 
 10.23  deposited in the state communication systems account and is 
 10.24  appropriated to the commissioner for purposes of this section. 
 10.25     (23) Receive any federal matching money that is made 
 10.26  available through the medical assistance program for the 
 10.27  consumer satisfaction survey.  Any federal money received for 
 10.28  the survey is appropriated to the commissioner for this 
 10.29  purpose.  The commissioner may expend the federal money received 
 10.30  for the consumer satisfaction survey in either year of the 
 10.31  biennium. 
 10.32     (24) Incorporate cost reimbursement claims from First Call 
 10.33  Minnesota into the federal cost reimbursement claiming processes 
 10.34  of the department according to federal law, rule, and 
 10.35  regulations.  Any reimbursement received is appropriated to the 
 10.36  commissioner and shall be disbursed to First Call Minnesota 
 11.1   according to normal department payment schedules. 
 11.2      (25) Develop recommended standards for foster care homes 
 11.3   that address the components of specialized therapeutic services 
 11.4   to be provided by foster care homes with those services. 
 11.5      Sec. 2.  Minnesota Statutes 2000, section 256.9657, 
 11.6   subdivision 2, is amended to read: 
 11.7      Subd. 2.  [HOSPITAL SURCHARGE.] (a) Effective October 1, 
 11.8   1992, each Minnesota hospital except facilities of the federal 
 11.9   Indian Health Service and regional treatment centers shall pay 
 11.10  to the medical assistance account a surcharge equal to 1.4 
 11.11  percent of net patient revenues excluding net Medicare revenues 
 11.12  reported by that provider to the health care cost information 
 11.13  system according to the schedule in subdivision 4.  
 11.14     (b) Effective July 1, 1994, the surcharge under paragraph 
 11.15  (a) is increased to 1.56 percent. 
 11.16     (c) Notwithstanding the Medicare cost finding and allowable 
 11.17  cost principles, the hospital surcharge is not an allowable cost 
 11.18  for purposes of rate setting under sections 256.9685 to 256.9695.
 11.19     Sec. 3.  Minnesota Statutes 2000, section 256B.055, 
 11.20  subdivision 3a, is amended to read: 
 11.21     Subd. 3a.  [MFIP-S FAMILIES; FAMILIES ELIGIBLE UNDER PRIOR 
 11.22  AFDC RULES.] (a) Beginning January 1, 1998, or on the date that 
 11.23  MFIP-S is implemented in counties, medical assistance may be 
 11.24  paid for a person receiving public assistance under the MFIP-S 
 11.25  program.  Beginning July 1, 2002, medical assistance may be paid 
 11.26  for a person who would have been eligible, but for excess income 
 11.27  or assets, under the state's AFDC plan in effect as of July 16, 
 11.28  1996, with the base AFDC standard increased according to section 
 11.29  256B.056, subdivision 4.  
 11.30     (b) Beginning January 1, 1998, July 1, 2002, medical 
 11.31  assistance may be paid for a person who would have been eligible 
 11.32  for public assistance under the income and resource assets 
 11.33  standards, or who would have been eligible but for excess income 
 11.34  or assets, under the state's AFDC plan in effect as of July 16, 
 11.35  1996, as required by the Personal Responsibility and Work 
 11.36  Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
 12.1   Number 104-193 with the base AFDC rate increased according to 
 12.2   section 256B.056, subdivision 4. 
 12.3      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 12.4      Sec. 4.  Minnesota Statutes 2000, section 256B.056, 
 12.5   subdivision 4, is amended to read: 
 12.6      Subd. 4.  [INCOME.] To be eligible for medical assistance, 
 12.7   a person who would be eligible under section 256B.055, 
 12.8   subdivision 7, not receiving supplemental security income 
 12.9   program payments, and 10, but for excess income, may be eligible 
 12.10  under subdivision 5 if the person has expenses for medical care 
 12.11  above 133-1/3 percent of the AFDC income standard in effect 
 12.12  under the July 16, 1996, AFDC state plan.  To be eligible for 
 12.13  medical assistance, families and children may have an income up 
 12.14  to 133-1/3 percent of the AFDC income standard in effect under 
 12.15  the July 16, 1996, AFDC state plan.  Effective July 1, 2000, the 
 12.16  base AFDC standard in effect on July 16, 1996, shall be 
 12.17  increased by three percent. Effective January 1, 2000, and each 
 12.18  successive January, recipients of supplemental security income 
 12.19  may have an income up to the supplemental security income 
 12.20  standard in effect on that date.  In computing income to 
 12.21  determine eligibility of persons who are not residents of 
 12.22  long-term care facilities, the commissioner shall disregard 
 12.23  increases in income as required by Public Law Numbers 94-566, 
 12.24  section 503; 99-272; and 99-509.  Veterans aid and attendance 
 12.25  benefits and Veterans Administration unusual medical expense 
 12.26  payments are considered income to the recipient. 
 12.27     Sec. 5.  Minnesota Statutes 2000, section 256B.057, 
 12.28  subdivision 2, is amended to read: 
 12.29     Subd. 2.  [CHILDREN.] A child one two through five 18 years 
 12.30  of age in a family whose countable income is less no greater 
 12.31  than 133 185 percent of the federal poverty guidelines for the 
 12.32  same family size, is eligible for medical assistance.  A child 
 12.33  six through 18 years of age, who was born after September 30, 
 12.34  1983, in a family whose countable income is less than 100 
 12.35  percent of the federal poverty guidelines for the same family 
 12.36  size is eligible for medical assistance.  Countable income means 
 13.1   gross income minus child support paid according to a court order 
 13.2   and dependent care costs deducted from income under the state's 
 13.3   AFDC plan in effect as of July 16, 1996.  
 13.4      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 13.5      Sec. 6.  Minnesota Statutes 2000, section 256B.057, 
 13.6   subdivision 9, is amended to read: 
 13.7      Subd. 9.  [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 
 13.8   assistance may be paid for a person who is employed and who: 
 13.9      (1) meets the definition of disabled under the supplemental 
 13.10  security income program; 
 13.11     (2) is at least 16 but less than 65 years of age; 
 13.12     (3) meets the asset limits in paragraph (b); and 
 13.13     (4) pays a premium, if required, under paragraph (c).  
 13.14  Any spousal income or assets shall be disregarded for purposes 
 13.15  of eligibility and premium determinations. 
 13.16     (b) For purposes of determining eligibility under this 
 13.17  subdivision, a person's assets must not exceed $20,000, 
 13.18  excluding: 
 13.19     (1) all assets excluded under section 256B.056; 
 13.20     (2) retirement accounts, including individual accounts, 
 13.21  401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 
 13.22     (3) medical expense accounts set up through the person's 
 13.23  employer. 
 13.24     (c) A person whose earned and with unearned income is 
 13.25  greater than 200 percent of federal poverty guidelines for the 
 13.26  applicable family size must pay shall have a monthly premium to 
 13.27  be eligible for medical assistance determined.  The monthly 
 13.28  premium amount shall be equal to ten percent of the person's 
 13.29  gross earned and unearned income above 200 percent of federal 
 13.30  poverty guidelines for the applicable family size up to the 
 13.31  lesser of: 
 13.32     (1) the amount by which the person's unearned income, less 
 13.33  the $20 standard disregard allowed under the supplemental 
 13.34  security income program, exceeds the highest medical assistance 
 13.35  income standard according to family size in effect for a person 
 13.36  with a disability; or 
 14.1      (2) the actual cost of coverage. 
 14.2      (d) A person's eligibility and premium shall be determined 
 14.3   by the local county agency.  Premiums must be paid to the 
 14.4   commissioner.  All premiums are dedicated to the commissioner. 
 14.5      (e) Any required premium shall be determined at application 
 14.6   and redetermined annually at recertification or when a change in 
 14.7   income or family size occurs. 
 14.8      (f) Premium payment is due upon notification from the 
 14.9   commissioner of the premium amount required.  Premiums may be 
 14.10  paid in installments at the discretion of the commissioner. 
 14.11     (g) Nonpayment of the premium shall result in denial or 
 14.12  termination of medical assistance unless the person demonstrates 
 14.13  good cause for nonpayment.  Good cause exists if the 
 14.14  requirements specified in Minnesota Rules, part 9506.0040, 
 14.15  subpart 7, items B to D, are met.  Nonpayment shall include 
 14.16  payment with a returned, refused, or dishonored instrument.  The 
 14.17  commissioner may require a guaranteed form of payment as the 
 14.18  only means to replace a returned, refused, or dishonored 
 14.19  instrument. 
 14.20     Sec. 7.  Minnesota Statutes 2000, section 256B.057, is 
 14.21  amended by adding a subdivision to read: 
 14.22     Subd. 10.  [AGED, BLIND, OR DISABLED.] To be eligible for 
 14.23  medical assistance, a person eligible under sections 256B.055, 
 14.24  subdivision 7, 7a, or 12, and 256B.056, subdivision 1a, may have 
 14.25  an income up to 100 percent of the federal poverty guidelines. 
 14.26     In computing income to determine eligibility of persons who 
 14.27  are not residents of long-term care facilities, the commissioner 
 14.28  shall disregard increases in income as required by Public Law 
 14.29  Numbers 94-566, section 503; 99-272; and 99-509.  Veterans aid 
 14.30  and attendance benefits and Veterans Administration unusual 
 14.31  medical expense payments are considered income to the recipient. 
 14.32     Sec. 8.  Minnesota Statutes 2000, section 256B.0625, 
 14.33  subdivision 13, is amended to read: 
 14.34     Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
 14.35  except for fertility drugs when specifically used to enhance 
 14.36  fertility, if prescribed by a licensed practitioner and 
 15.1   dispensed by a licensed pharmacist, by a physician enrolled in 
 15.2   the medical assistance program as a dispensing physician, or by 
 15.3   a physician or a nurse practitioner employed by or under 
 15.4   contract with a community health board as defined in section 
 15.5   145A.02, subdivision 5, for the purposes of communicable disease 
 15.6   control.  The commissioner, after receiving recommendations from 
 15.7   professional medical associations and professional pharmacist 
 15.8   associations, shall designate a formulary committee to advise 
 15.9   the commissioner on the names of drugs for which payment is 
 15.10  made, recommend a system for reimbursing providers on a set fee 
 15.11  or charge basis rather than the present system, and develop 
 15.12  methods encouraging use of generic drugs when they are less 
 15.13  expensive and equally effective as trademark drugs.  The 
 15.14  formulary committee shall consist of nine members, four of whom 
 15.15  shall be physicians who are not employed by the department of 
 15.16  human services, and a majority of whose practice is for persons 
 15.17  paying privately or through health insurance, three of whom 
 15.18  shall be pharmacists who are not employed by the department of 
 15.19  human services, and a majority of whose practice is for persons 
 15.20  paying privately or through health insurance, a consumer 
 15.21  representative, and a nursing home representative.  Committee 
 15.22  members shall serve three-year terms and shall serve without 
 15.23  compensation.  Members may be reappointed once.  
 15.24     (b) The commissioner shall establish a drug formulary.  Its 
 15.25  establishment and publication shall not be subject to the 
 15.26  requirements of the Administrative Procedure Act, but the 
 15.27  formulary committee shall review and comment on the formulary 
 15.28  contents.  The formulary committee shall review and recommend 
 15.29  drugs which require prior authorization.  The formulary 
 15.30  committee may recommend drugs for prior authorization directly 
 15.31  to the commissioner, as long as opportunity for public input is 
 15.32  provided.  Prior authorization may be requested by the 
 15.33  commissioner based on medical and clinical criteria before 
 15.34  certain drugs are eligible for payment.  Before a drug may be 
 15.35  considered for prior authorization at the request of the 
 15.36  commissioner:  
 16.1      (1) the drug formulary committee must develop criteria to 
 16.2   be used for identifying drugs; the development of these criteria 
 16.3   is not subject to the requirements of chapter 14, but the 
 16.4   formulary committee shall provide opportunity for public input 
 16.5   in developing criteria; 
 16.6      (2) the drug formulary committee must hold a public forum 
 16.7   and receive public comment for an additional 15 days; and 
 16.8      (3) the commissioner must provide information to the 
 16.9   formulary committee on the impact that placing the drug on prior 
 16.10  authorization will have on the quality of patient care and 
 16.11  information regarding whether the drug is subject to clinical 
 16.12  abuse or misuse.  Prior authorization may be required by the 
 16.13  commissioner before certain formulary drugs are eligible for 
 16.14  payment.  The formulary shall not include:  
 16.15     (i) drugs or products for which there is no federal 
 16.16  funding; 
 16.17     (ii) over-the-counter drugs, except for antacids, 
 16.18  acetaminophen, family planning products, aspirin, insulin, 
 16.19  products for the treatment of lice, vitamins for adults with 
 16.20  documented vitamin deficiencies, vitamins for children under the 
 16.21  age of seven and pregnant or nursing women, and any other 
 16.22  over-the-counter drug identified by the commissioner, in 
 16.23  consultation with the drug formulary committee, as necessary, 
 16.24  appropriate, and cost-effective for the treatment of certain 
 16.25  specified chronic diseases, conditions or disorders, and this 
 16.26  determination shall not be subject to the requirements of 
 16.27  chapter 14; 
 16.28     (iii) anorectics, except that medically necessary 
 16.29  anorectics shall be covered for a recipient previously diagnosed 
 16.30  as having pickwickian syndrome and currently diagnosed as having 
 16.31  diabetes and being morbidly obese; 
 16.32     (iv) drugs for which medical value has not been 
 16.33  established; and 
 16.34     (v) drugs from manufacturers who have not signed a rebate 
 16.35  agreement with the Department of Health and Human Services 
 16.36  pursuant to section 1927 of title XIX of the Social Security Act.
 17.1      The commissioner shall publish conditions for prohibiting 
 17.2   payment for specific drugs after considering the formulary 
 17.3   committee's recommendations.  An honorarium of $100 per meeting 
 17.4   and reimbursement for mileage shall be paid to each committee 
 17.5   member in attendance.  
 17.6      (c) The basis for determining the amount of payment shall 
 17.7   be the lower of the actual acquisition costs of the drugs plus a 
 17.8   fixed dispensing fee; the maximum allowable cost set by the 
 17.9   federal government or by the commissioner plus the fixed 
 17.10  dispensing fee; or the usual and customary price charged to the 
 17.11  public.  The pharmacy dispensing fee shall be $3.65, except that 
 17.12  the dispensing fee for intravenous solutions which must be 
 17.13  compounded by the pharmacist shall be $8 per bag, $14 per bag 
 17.14  for cancer chemotherapy products, and $30 per bag for total 
 17.15  parenteral nutritional products dispensed in one liter 
 17.16  quantities, or $44 per bag for total parenteral nutritional 
 17.17  products dispensed in quantities greater than one liter.  Actual 
 17.18  acquisition cost includes quantity and other special discounts 
 17.19  except time and cash discounts.  The actual acquisition cost of 
 17.20  a drug shall be estimated by the commissioner, at average 
 17.21  wholesale price minus nine percent, except that where a drug has 
 17.22  had its wholesale price reduced as a result of the actions of 
 17.23  the National Association of Medicaid Fraud Control Units, the 
 17.24  estimated actual acquisition cost shall be the reduced average 
 17.25  wholesale price, without the nine percent deduction.  The 
 17.26  maximum allowable cost of a multisource drug may be set by the 
 17.27  commissioner and it shall be comparable to, but no higher than, 
 17.28  the maximum amount paid by other third-party payors in this 
 17.29  state who have maximum allowable cost programs.  The 
 17.30  commissioner shall set maximum allowable costs for multisource 
 17.31  drugs that are not on the federal upper limit list as described 
 17.32  in United States Code, title 42, chapter 7, section 1396r-8(e), 
 17.33  the Social Security Act, and Code of Federal Regulations, title 
 17.34  42, part 447, section 447.332.  Establishment of the amount of 
 17.35  payment for drugs shall not be subject to the requirements of 
 17.36  the Administrative Procedure Act.  An additional dispensing fee 
 18.1   of $.30 may be added to the dispensing fee paid to pharmacists 
 18.2   for legend drug prescriptions dispensed to residents of 
 18.3   long-term care facilities when a unit dose blister card system, 
 18.4   approved by the department, is used.  Under this type of 
 18.5   dispensing system, the pharmacist must dispense a 30-day supply 
 18.6   of drug.  The National Drug Code (NDC) from the drug container 
 18.7   used to fill the blister card must be identified on the claim to 
 18.8   the department.  The unit dose blister card containing the drug 
 18.9   must meet the packaging standards set forth in Minnesota Rules, 
 18.10  part 6800.2700, that govern the return of unused drugs to the 
 18.11  pharmacy for reuse.  The pharmacy provider will be required to 
 18.12  credit the department for the actual acquisition cost of all 
 18.13  unused drugs that are eligible for reuse.  Over-the-counter 
 18.14  medications must be dispensed in the manufacturer's unopened 
 18.15  package.  The commissioner may permit the drug clozapine to be 
 18.16  dispensed in a quantity that is less than a 30-day supply.  
 18.17  Whenever a generically equivalent product is available, payment 
 18.18  shall be on the basis of the actual acquisition cost of the 
 18.19  generic drug, unless the prescriber specifically indicates 
 18.20  "dispense as written - brand necessary" on the prescription as 
 18.21  required by section 151.21, subdivision 2. 
 18.22     (d) For purposes of this subdivision, "multisource drugs" 
 18.23  means covered outpatient drugs, excluding innovator multisource 
 18.24  drugs for which there are two or more drug products, which: 
 18.25     (1) are related as therapeutically equivalent under the 
 18.26  Food and Drug Administration's most recent publication of 
 18.27  "Approved Drug Products with Therapeutic Equivalence 
 18.28  Evaluations"; 
 18.29     (2) are pharmaceutically equivalent and bioequivalent as 
 18.30  determined by the Food and Drug Administration; and 
 18.31     (3) are sold or marketed in Minnesota. 
 18.32  "Innovator multisource drug" means a multisource drug that was 
 18.33  originally marketed under an original new drug application 
 18.34  approved by the Food and Drug Administration. 
 18.35     (e) The basis for determining the amount of payment for 
 18.36  drugs administered in an outpatient setting shall be the lower 
 19.1   of the usual and customary cost submitted by the provider; the 
 19.2   average wholesale price minus five percent; or the maximum 
 19.3   allowable cost set by the federal government under United States 
 19.4   Code, title 42, chapter 7, section 1396r-8(e) and Code of 
 19.5   Federal Regulations, title 42, section 447.332, or by the 
 19.6   commissioner under paragraph (c). 
 19.7      Sec. 9.  Minnesota Statutes 2000, section 256B.0625, 
 19.8   subdivision 13a, is amended to read: 
 19.9      Subd. 13a.  [DRUG UTILIZATION REVIEW BOARD.] A nine-member 
 19.10  drug utilization review board is established.  The board is 
 19.11  comprised of at least three but no more than four licensed 
 19.12  physicians actively engaged in the practice of medicine in 
 19.13  Minnesota; at least three licensed pharmacists actively engaged 
 19.14  in the practice of pharmacy in Minnesota; and one consumer 
 19.15  representative; the remainder to be made up of health care 
 19.16  professionals who are licensed in their field and have 
 19.17  recognized knowledge in the clinically appropriate prescribing, 
 19.18  dispensing, and monitoring of covered outpatient drugs.  The 
 19.19  board shall be staffed by an employee of the department who 
 19.20  shall serve as an ex officio nonvoting member of the board.  The 
 19.21  members of the board shall be appointed by the commissioner and 
 19.22  shall serve three-year terms.  The members shall be selected 
 19.23  from lists submitted by professional associations.  The 
 19.24  commissioner shall appoint the initial members of the board for 
 19.25  terms expiring as follows:  three members for terms expiring 
 19.26  June 30, 1996; three members for terms expiring June 30, 1997; 
 19.27  and three members for terms expiring June 30, 1998.  Members may 
 19.28  be reappointed once.  The board shall annually elect a chair 
 19.29  from among the members. 
 19.30     The commissioner shall, with the advice of the board: 
 19.31     (1) implement a medical assistance retrospective and 
 19.32  prospective drug utilization review program as required by 
 19.33  United States Code, title 42, section 1396r-8(g)(3); 
 19.34     (2) develop and implement the predetermined criteria and 
 19.35  practice parameters for appropriate prescribing to be used in 
 19.36  retrospective and prospective drug utilization review; 
 20.1      (3) develop, select, implement, and assess interventions 
 20.2   for physicians, pharmacists, and patients that are educational 
 20.3   and not punitive in nature; 
 20.4      (4) establish a grievance and appeals process for 
 20.5   physicians and pharmacists under this section; 
 20.6      (5) publish and disseminate educational information to 
 20.7   physicians and pharmacists regarding the board and the review 
 20.8   program; 
 20.9      (6) adopt and implement procedures designed to ensure the 
 20.10  confidentiality of any information collected, stored, retrieved, 
 20.11  assessed, or analyzed by the board, staff to the board, or 
 20.12  contractors to the review program that identifies individual 
 20.13  physicians, pharmacists, or recipients; 
 20.14     (7) establish and implement an ongoing process to (i) 
 20.15  receive public comment regarding drug utilization review 
 20.16  criteria and standards, and (ii) consider the comments along 
 20.17  with other scientific and clinical information in order to 
 20.18  revise criteria and standards on a timely basis; and 
 20.19     (8) adopt any rules necessary to carry out this section. 
 20.20     The board may establish advisory committees.  The 
 20.21  commissioner may contract with appropriate organizations to 
 20.22  assist the board in carrying out the board's duties.  The 
 20.23  commissioner may enter into contracts for services to develop 
 20.24  and implement a retrospective and prospective review program. 
 20.25     The board shall report to the commissioner annually on the 
 20.26  date the Drug Utilization Review Annual Report is due to the 
 20.27  Health Care Financing Administration.  This report is to cover 
 20.28  the preceding federal fiscal year.  The commissioner shall make 
 20.29  the report available to the public upon request.  The report 
 20.30  must include information on the activities of the board and the 
 20.31  program; the effectiveness of implemented interventions; 
 20.32  administrative costs; and any fiscal impact resulting from the 
 20.33  program.  An honorarium of $50 $100 per meeting and 
 20.34  reimbursement for mileage shall be paid to each board member in 
 20.35  attendance. 
 20.36     Sec. 10.  Minnesota Statutes 2000, section 256B.0625, 
 21.1   subdivision 18a, is amended to read: 
 21.2      Subd. 18a.  [PAYMENT FOR MEALS AND LODGING ACCESS TO 
 21.3   MEDICAL SERVICES.] (a) Medical assistance reimbursement for 
 21.4   meals for persons traveling to receive medical care may not 
 21.5   exceed $5.50 for breakfast, $6.50 for lunch, or $8 for dinner. 
 21.6      (b) Medical assistance reimbursement for lodging for 
 21.7   persons traveling to receive medical care may not exceed $50 per 
 21.8   day unless prior authorized by the local agency. 
 21.9      (c) Medical assistance direct mileage reimbursement to the 
 21.10  eligible person or the eligible person's driver may not exceed 
 21.11  20 cents per mile. 
 21.12     (d) Medical assistance covers oral language interpreter 
 21.13  services when provided by an enrolled health care provider 
 21.14  during the course of providing a direct, person-to-person 
 21.15  covered health care service to an enrolled recipient with 
 21.16  limited English proficiency. 
 21.17     Sec. 11.  Minnesota Statutes 2000, section 256B.0625, 
 21.18  subdivision 30, is amended to read: 
 21.19     Subd. 30.  [OTHER CLINIC SERVICES.] (a) Medical assistance 
 21.20  covers rural health clinic services, federally qualified health 
 21.21  center services, nonprofit community health clinic services, 
 21.22  public health clinic services, and the services of a clinic 
 21.23  meeting the criteria established in rule by the commissioner.  
 21.24  Rural health clinic services and federally qualified health 
 21.25  center services mean services defined in United States Code, 
 21.26  title 42, section 1396d(a)(2)(B) and (C).  Payment for rural 
 21.27  health clinic and federally qualified health center services 
 21.28  shall be made according to applicable federal law and 
 21.29  regulation, other than the cost-based phase-out and prospective 
 21.30  payment system according to paragraph (e). 
 21.31     (b) A federally qualified health center that is beginning 
 21.32  initial operation shall submit an estimate of budgeted costs and 
 21.33  visits for the initial reporting period in the form and detail 
 21.34  required by the commissioner.  A federally qualified health 
 21.35  center that is already in operation shall submit an initial 
 21.36  report using actual costs and visits for the initial reporting 
 22.1   period.  Within 90 days of the end of its reporting period, a 
 22.2   federally qualified health center shall submit, in the form and 
 22.3   detail required by the commissioner, a report of its operations, 
 22.4   including allowable costs actually incurred for the period and 
 22.5   the actual number of visits for services furnished during the 
 22.6   period, and other information required by the commissioner.  
 22.7   Federally qualified health centers that file Medicare cost 
 22.8   reports shall provide the commissioner with a copy of the most 
 22.9   recent Medicare cost report filed with the Medicare program 
 22.10  intermediary for the reporting year which support the costs 
 22.11  claimed on their cost report to the state. 
 22.12     (c) In order to continue cost-based payment under the 
 22.13  medical assistance program according to paragraphs (a) and (b), 
 22.14  a federally qualified health center or rural health clinic must 
 22.15  apply for designation as an essential community provider within 
 22.16  six months of final adoption of rules by the department of 
 22.17  health according to section 62Q.19, subdivision 7.  For those 
 22.18  federally qualified health centers and rural health clinics that 
 22.19  have applied for essential community provider status within the 
 22.20  six-month time prescribed, medical assistance payments will 
 22.21  continue to be made according to paragraphs (a) and (b) for the 
 22.22  first three years after application.  For federally qualified 
 22.23  health centers and rural health clinics that either do not apply 
 22.24  within the time specified above or who have had essential 
 22.25  community provider status for three years, medical assistance 
 22.26  payments for health services provided by these entities shall be 
 22.27  according to the same rates and conditions applicable to the 
 22.28  same service provided by health care providers that are not 
 22.29  federally qualified health centers or rural health clinics.  
 22.30     (d) Effective July 1, 1999, the provisions of paragraph (c) 
 22.31  requiring a federally qualified health center or a rural health 
 22.32  clinic to make application for an essential community provider 
 22.33  designation in order to have cost-based payments made according 
 22.34  to paragraphs (a) and (b) no longer apply. 
 22.35     (e) Effective January 1, 2000, payments made according to 
 22.36  paragraphs (a) and (b) shall be limited to the cost phase-out 
 23.1   schedule of the Balanced Budget Act of 1997, but shall revert to 
 23.2   cost-based payment July 1, 2001. 
 23.3      Sec. 12.  Minnesota Statutes 2000, section 256B.0635, 
 23.4   subdivision 1, is amended to read: 
 23.5      Subdivision 1.  [INCREASED EMPLOYMENT.] Beginning January 
 23.6   1, 1998 (a) Until June 30, 2002, medical assistance may be paid 
 23.7   for persons who received MFIP-S or medical assistance for 
 23.8   families and children in at least three of six months preceding 
 23.9   the month in which the person became ineligible for MFIP-S or 
 23.10  medical assistance, if the ineligibility was due to an increase 
 23.11  in hours of employment or employment income or due to the loss 
 23.12  of an earned income disregard.  In addition, to receive 
 23.13  continued assistance under this section, persons who received 
 23.14  medical assistance for families and children but did not receive 
 23.15  MFIP-S must have had income less than or equal to the assistance 
 23.16  standard for their family size under the state's AFDC plan in 
 23.17  effect as of July 16, 1996, as required by the Personal 
 23.18  Responsibility and Work Opportunity Reconciliation Act of 1996 
 23.19  (PRWORA), Public Law Number 104-193, increased according to 
 23.20  section 256B.056, subdivision 4, at the time medical assistance 
 23.21  eligibility began.  A person who is eligible for extended 
 23.22  medical assistance is entitled to six 12 months of assistance 
 23.23  without reapplication, unless the assistance unit ceases to 
 23.24  include a dependent child.  For a person under 21 years of 
 23.25  age, except medical assistance may not be discontinued for that 
 23.26  dependent child under 21 years of age within the six-month 
 23.27  12-month period of extended eligibility until it has been 
 23.28  determined that the person is not otherwise eligible for medical 
 23.29  assistance.  Medical assistance may be continued for an 
 23.30  additional six months if the person meets all requirements for 
 23.31  the additional six months, according to title XIX of the Social 
 23.32  Security Act, as amended by section 303 of the Family Support 
 23.33  Act of 1988, Public Law Number 100-485. 
 23.34     (b) Beginning July 1, 2002, medical assistance for families 
 23.35  and children may be paid for persons who were eligible under 
 23.36  section 256B.055, subdivision 3a, paragraph (b), in at least 
 24.1   three of six months preceding the month in which the person 
 24.2   became ineligible under that section if the ineligibility was 
 24.3   due to an increase in hours of employment or employment income 
 24.4   or due to the loss of an earned income disregard.  A person who 
 24.5   is eligible for extended medical assistance is entitled to 12 
 24.6   months of assistance without reapplication, unless the 
 24.7   assistance unit ceases to include a dependent child, except 
 24.8   medical assistance may not be discontinued for that dependent 
 24.9   child under 21 years of age within the 12-month period of 
 24.10  extended eligibility until it has been determined that the 
 24.11  person is not otherwise eligible for medical assistance.  
 24.12     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
 24.13     Sec. 13.  Minnesota Statutes 2000, section 256B.0635, 
 24.14  subdivision 2, is amended to read: 
 24.15     Subd. 2.  [INCREASED CHILD OR SPOUSAL SUPPORT.] Beginning 
 24.16  January 1, 1998 (a) Until June 30, 2002, medical assistance may 
 24.17  be paid for persons who received MFIP-S or medical assistance 
 24.18  for families and children in at least three of the six months 
 24.19  preceding the month in which the person became ineligible for 
 24.20  MFIP-S or medical assistance, if the ineligibility was the 
 24.21  result of the collection of child or spousal support under part 
 24.22  D of title IV of the Social Security Act.  In addition, to 
 24.23  receive continued assistance under this section, persons who 
 24.24  received medical assistance for families and children but did 
 24.25  not receive MFIP-S must have had income less than or equal to 
 24.26  the assistance standard for their family size under the state's 
 24.27  AFDC plan in effect as of July 16, 1996, as required by the 
 24.28  Personal Responsibility and Work Opportunity Reconciliation Act 
 24.29  of 1996 (PRWORA), Public Law Number 104-193 increased according 
 24.30  to section 256B.056, subdivision 4, at the time medical 
 24.31  assistance eligibility began.  A person who is eligible for 
 24.32  extended medical assistance under this subdivision is entitled 
 24.33  to four months of assistance without reapplication, unless the 
 24.34  assistance unit ceases to include a dependent child.  For a 
 24.35  person under 21 years of age, except medical assistance may not 
 24.36  be discontinued for that dependent child under 21 years of age 
 25.1   within the four-month period of extended eligibility until it 
 25.2   has been determined that the person is not otherwise eligible 
 25.3   for medical assistance. 
 25.4      (b) Beginning July 1, 2002, medical assistance for families 
 25.5   and children may be paid for persons who were eligible under 
 25.6   section 256B.055, subdivision 3a, paragraph (b), in at least 
 25.7   three of the six months preceding the month in which the person 
 25.8   became ineligible under that section if the ineligibility was 
 25.9   the result of the collection of child or spousal support under 
 25.10  part D of title IV of the Social Security Act.  A person who is 
 25.11  eligible for extended medical assistance under this subdivision 
 25.12  is entitled to four months of assistance without reapplication, 
 25.13  unless the assistance unit ceases to include a dependent child, 
 25.14  except medical assistance may not be discontinued for that 
 25.15  dependent child under 21 years of age within the four-month 
 25.16  period of extended eligibility until it has been determined that 
 25.17  the person is not otherwise eligible for medical assistance. 
 25.18     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
 25.19     Sec. 14.  Minnesota Statutes 2000, section 256B.69, 
 25.20  subdivision 3a, is amended to read: 
 25.21     Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
 25.22  implementing the general assistance medical care, or medical 
 25.23  assistance prepayment program within a county, must include the 
 25.24  county board in the process of development, approval, and 
 25.25  issuance of the request for proposals to provide services to 
 25.26  eligible individuals within the proposed county.  County boards 
 25.27  must be given reasonable opportunity to make recommendations 
 25.28  regarding the development, issuance, review of responses, and 
 25.29  changes needed in the request for proposals.  The commissioner 
 25.30  must provide county boards the opportunity to review each 
 25.31  proposal based on the identification of community needs under 
 25.32  chapters 145A and 256E and county advocacy activities.  If a 
 25.33  county board finds that a proposal does not address certain 
 25.34  community needs, the county board and commissioner shall 
 25.35  continue efforts for improving the proposal and network prior to 
 25.36  the approval of the contract.  The county board shall make 
 26.1   recommendations regarding the approval of local networks and 
 26.2   their operations to ensure adequate availability and access to 
 26.3   covered services.  The provider or health plan must respond 
 26.4   directly to county advocates and the state prepaid medical 
 26.5   assistance ombudsperson regarding service delivery and must be 
 26.6   accountable to the state regarding contracts with medical 
 26.7   assistance and general assistance medical care funds.  The 
 26.8   county board may recommend a maximum number of participating 
 26.9   health plans after considering the size of the enrolling 
 26.10  population; ensuring adequate access and capacity; considering 
 26.11  the client and county administrative complexity; and considering 
 26.12  the need to promote the viability of locally developed health 
 26.13  plans.  The county board or a single entity representing a group 
 26.14  of county boards and the commissioner shall mutually select 
 26.15  health plans for participation at the time of initial 
 26.16  implementation of the prepaid medical assistance program in that 
 26.17  county or group of counties and at the time of contract renewal. 
 26.18  The commissioner shall also seek input for contract requirements 
 26.19  from the county or single entity representing a group of county 
 26.20  boards at each contract renewal and incorporate those 
 26.21  recommendations into the contract negotiation process.  The 
 26.22  commissioner, in conjunction with the county board, shall 
 26.23  actively seek to develop a mutually agreeable timetable prior to 
 26.24  the development of the request for proposal, but counties must 
 26.25  agree to initial enrollment beginning on or before January 1, 
 26.26  1999, in either the prepaid medical assistance and general 
 26.27  assistance medical care programs or county-based purchasing 
 26.28  under section 256B.692.  At least 90 days before enrollment in 
 26.29  the medical assistance and general assistance medical care 
 26.30  prepaid programs begins in a county in which the prepaid 
 26.31  programs have not been established, the commissioner shall 
 26.32  provide a report to the chairs of senate and house committees 
 26.33  having jurisdiction over state health care programs which 
 26.34  verifies that the commissioner complied with the requirements 
 26.35  for county involvement that are specified in this subdivision. 
 26.36     (b) The commissioner shall seek a federal waiver to allow a 
 27.1   fee-for-service plan option to MinnesotaCare enrollees.  The 
 27.2   commissioner shall develop an increase of the premium fees 
 27.3   required under section 256L.06 up to 20 percent of the premium 
 27.4   fees for the enrollees who elect the fee-for-service option.  
 27.5   Prior to implementation, the commissioner shall submit this fee 
 27.6   schedule to the chair and ranking minority member of the senate 
 27.7   health care committee, the senate health care and family 
 27.8   services funding division, the house of representatives health 
 27.9   and human services committee, and the house of representatives 
 27.10  health and human services finance division. 
 27.11     (c) At the option of the county board, the board may 
 27.12  develop contract requirements related to the achievement of 
 27.13  local public health goals to meet the health needs of medical 
 27.14  assistance and general assistance medical care enrollees.  These 
 27.15  requirements must be reasonably related to the performance of 
 27.16  health plan functions and within the scope of the medical 
 27.17  assistance and general assistance medical care benefit sets.  If 
 27.18  the county board and the commissioner mutually agree to such 
 27.19  requirements, the department shall include such requirements in 
 27.20  all health plan contracts governing the prepaid medical 
 27.21  assistance and general assistance medical care programs in that 
 27.22  county at initial implementation of the program in that county 
 27.23  and at the time of contract renewal.  The county board may 
 27.24  participate in the enforcement of the contract provisions 
 27.25  related to local public health goals. 
 27.26     (d) For counties in which prepaid medical assistance and 
 27.27  general assistance medical care programs have not been 
 27.28  established, the commissioner shall not implement those programs 
 27.29  if a county board submits acceptable and timely preliminary and 
 27.30  final proposals under section 256B.692, until county-based 
 27.31  purchasing is no longer operational in that county.  For 
 27.32  counties in which prepaid medical assistance and general 
 27.33  assistance medical care programs are in existence on or after 
 27.34  September 1, 1997, the commissioner must terminate contracts 
 27.35  with health plans according to section 256B.692, subdivision 5, 
 27.36  if the county board submits and the commissioner accepts 
 28.1   preliminary and final proposals according to that subdivision.  
 28.2   The commissioner is not required to terminate contracts that 
 28.3   begin on or after September 1, 1997, according to section 
 28.4   256B.692 until two years have elapsed from the date of initial 
 28.5   enrollment. 
 28.6      (e) In the event that a county board or a single entity 
 28.7   representing a group of county boards and the commissioner 
 28.8   cannot reach agreement regarding:  (i) the selection of 
 28.9   participating health plans in that county; (ii) contract 
 28.10  requirements; or (iii) implementation and enforcement of county 
 28.11  requirements including provisions regarding local public health 
 28.12  goals, the commissioner shall resolve all disputes after taking 
 28.13  into account the recommendations of a three-person mediation 
 28.14  panel.  The panel shall be composed of one designee of the 
 28.15  president of the association of Minnesota counties, one designee 
 28.16  of the commissioner of human services, and one designee of the 
 28.17  commissioner of health. 
 28.18     (f) If a county which elects to implement county-based 
 28.19  purchasing ceases to implement county-based purchasing, it is 
 28.20  prohibited from assuming the responsibility of county-based 
 28.21  purchasing for a period of five years from the date it 
 28.22  discontinues purchasing. 
 28.23     (g) Notwithstanding the requirement in this subdivision 
 28.24  that a county must agree to initial enrollment on or before 
 28.25  January 1, 1999, the commissioner shall grant a delay in the 
 28.26  implementation of the county-based purchasing authorized in 
 28.27  section 256B.692 until federal waiver authority and approval has 
 28.28  been granted, if the county or group of counties has submitted a 
 28.29  preliminary proposal for county-based purchasing by September 1, 
 28.30  1997, has not already implemented the prepaid medical assistance 
 28.31  program before January 1, 1998, and has submitted a written 
 28.32  request for the delay to the commissioner by July 1, 1998.  In 
 28.33  order for the delay to be continued, the county or group of 
 28.34  counties must also submit to the commissioner the following 
 28.35  information by December 1, 1998.  The information must: 
 28.36     (1) identify the proposed date of implementation, as 
 29.1   determined under section 256B.692, subdivision 5; 
 29.2      (2) include copies of the county board resolutions which 
 29.3   demonstrate the continued commitment to the implementation of 
 29.4   county-based purchasing by the proposed date.  County board 
 29.5   authorization may remain contingent on the submission of a final 
 29.6   proposal which meets the requirements of section 256B.692, 
 29.7   subdivision 5, paragraph (b); 
 29.8      (3) demonstrate actions taken for the establishment of a 
 29.9   governance structure between the participating counties and 
 29.10  describe how the fiduciary responsibilities of county-based 
 29.11  purchasing will be allocated between the counties, if more than 
 29.12  one county is involved in the proposal; 
 29.13     (4) describe how the risk of a deficit will be managed in 
 29.14  the event expenditures are greater than total capitation 
 29.15  payments.  This description must identify how any of the 
 29.16  following strategies will be used: 
 29.17     (i) risk contracts with licensed health plans; 
 29.18     (ii) risk arrangements with providers who are not licensed 
 29.19  health plans; 
 29.20     (iii) risk arrangements with other licensed insurance 
 29.21  entities; and 
 29.22     (iv) funding from other county resources; 
 29.23     (5) include, if county-based purchasing will not contract 
 29.24  with licensed health plans or provider networks, letters of 
 29.25  interest from local providers in at least the categories of 
 29.26  hospital, physician, mental health, and pharmacy which express 
 29.27  interest in contracting for services.  These letters must 
 29.28  recognize any risk transfer identified in clause (4), item (ii); 
 29.29  and 
 29.30     (6) describe the options being considered to obtain the 
 29.31  administrative services required in section 256B.692, 
 29.32  subdivision 3, clauses (3) and (5).  Notwithstanding other 
 29.33  subdivisions under this section, the commissioner shall 
 29.34  implement a prepaid medical assistance program in all counties 
 29.35  that have not gained federal approval for county-based 
 29.36  purchasing by September 1, 2001. 
 30.1      (h) For counties which receive a delay under this 
 30.2   subdivision, the final proposals required under section 
 30.3   256B.692, subdivision 5, paragraph (b), must be submitted at 
 30.4   least six months prior to the requested implementation date.  
 30.5   Authority to implement county-based purchasing remains 
 30.6   contingent on approval of the final proposal as required under 
 30.7   section 256B.692. 
 30.8      (i) If the commissioner is unable to provide 
 30.9   county-specific, individual-level fee-for-service claims to 
 30.10  counties by June 4, 1998, the commissioner shall grant a delay 
 30.11  under paragraph (g) of up to 12 months in the implementation of 
 30.12  county-based purchasing, and shall require implementation not 
 30.13  later than January 1, 2000.  In order to receive an extension of 
 30.14  the proposed date of implementation under this paragraph, a 
 30.15  county or group of counties must submit a written request for 
 30.16  the extension to the commissioner by August 1, 1998, must submit 
 30.17  the information required under paragraph (g) by December 1, 
 30.18  1998, and must submit a final proposal as provided under 
 30.19  paragraph (h). 
 30.20     (j) Notwithstanding other requirements of this subdivision, 
 30.21  the commissioner shall not require the implementation of the 
 30.22  county-based purchasing authorized in section 256B.692 until six 
 30.23  months after federal waiver approval has been obtained for 
 30.24  county-based purchasing, if the county or counties have 
 30.25  submitted the final plan as required in section 256B.692, 
 30.26  subdivision 5.  The commissioner shall allow the county or 
 30.27  counties which submitted information under section 256B.692, 
 30.28  subdivision 5, to submit supplemental or additional information 
 30.29  which was not possible to submit by April 1, 1999.  A county or 
 30.30  counties shall continue to submit the required information and 
 30.31  substantive detail necessary to obtain a prompt response and 
 30.32  waiver approval.  If amendments to the final plan are necessary 
 30.33  due to the terms and conditions of the waiver approval, the 
 30.34  commissioner shall allow the county or group of counties 60 days 
 30.35  to make the necessary amendments to the final plan and shall not 
 30.36  require implementation of the county-based purchasing until six 
 31.1   months after the revised final plan has been submitted. 
 31.2      <b>[EFFECTIVE DATE.]</b> This section is effective September 1, 
 31.3   2001. 
 31.4      Sec. 15.  Minnesota Statutes 2000, section 256B.75, is 
 31.5   amended to read: 
 31.6      256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
 31.7      (a) For outpatient hospital facility fee payments for 
 31.8   services rendered on or after October 1, 1992, the commissioner 
 31.9   of human services shall pay the lower of (1) submitted charge, 
 31.10  or (2) 32 percent above the rate in effect on June 30, 1992, 
 31.11  except for those services for which there is a federal maximum 
 31.12  allowable payment.  Effective for services rendered on or after 
 31.13  January 1, 2000, payment rates for nonsurgical outpatient 
 31.14  hospital facility fees and emergency room facility fees shall be 
 31.15  increased by eight percent over the rates in effect on December 
 31.16  31, 1999, except for those services for which there is a federal 
 31.17  maximum allowable payment.  Services for which there is a 
 31.18  federal maximum allowable payment shall be paid at the lower of 
 31.19  (1) submitted charge, or (2) the federal maximum allowable 
 31.20  payment.  Total aggregate payment for outpatient hospital 
 31.21  facility fee services shall not exceed the Medicare upper 
 31.22  limit.  If it is determined that a provision of this section 
 31.23  conflicts with existing or future requirements of the United 
 31.24  States government with respect to federal financial 
 31.25  participation in medical assistance, the federal requirements 
 31.26  prevail.  The commissioner may, in the aggregate, prospectively 
 31.27  reduce payment rates to avoid reduced federal financial 
 31.28  participation resulting from rates that are in excess of the 
 31.29  Medicare upper limitations. 
 31.30     (b) Notwithstanding paragraph (a), payment for outpatient, 
 31.31  emergency, and ambulatory surgery hospital facility fee services 
 31.32  for critical access hospitals designated under section 144.1483, 
 31.33  clause (11), shall be paid on a cost-based payment system that 
 31.34  is based on the cost-finding methods and allowable costs of the 
 31.35  Medicare program. 
 31.36     (c) Effective for services provided on or after July 1, 
 32.1   2002, rates that are based on the Medicare outpatient 
 32.2   prospective payment system shall be replaced by a budget neutral 
 32.3   prospective payment system that is derived using medical 
 32.4   assistance data.  The department shall provide a proposal to the 
 32.5   2002 legislature to define and implement this provision. 
 32.6      Sec. 16.  [256B.78] [MEDICAL ASSISTANCE DEMONSTRATION 
 32.7   PROJECT FOR FAMILY PLANNING SERVICES.] 
 32.8      (a) The commissioner of human services shall establish a 
 32.9   medical assistance demonstration project to determine whether 
 32.10  improved access to coverage of prepregnancy family planning 
 32.11  services reduces medical assistance and MFIP costs. 
 32.12     (b) This section is effective upon federal approval of the 
 32.13  demonstration project. 
 32.14     Sec. 17.  Minnesota Statutes 2000, section 256J.31, 
 32.15  subdivision 12, is amended to read: 
 32.16     Subd. 12.  [RIGHT TO DISCONTINUE CASH ASSISTANCE.] A 
 32.17  participant who is not in vendor payment status may discontinue 
 32.18  receipt of the cash assistance portion of the MFIP assistance 
 32.19  grant and retain eligibility for child care assistance under 
 32.20  section 119B.05 and for medical assistance under sections 
 32.21  256B.055, subdivision 3a, and 256B.0635.  For the months a 
 32.22  participant chooses to discontinue the receipt of the cash 
 32.23  portion of the MFIP grant, the assistance unit accrues months of 
 32.24  eligibility to be applied toward eligibility for child care 
 32.25  under section 119B.05 and for medical assistance under sections 
 32.26  256B.055, subdivision 3a, and 256B.0635. 
 32.27     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 32.28     Sec. 18.  Minnesota Statutes 2000, section 256K.03, 
 32.29  subdivision 1, is amended to read: 
 32.30     Subdivision 1.  [NOTIFICATION OF PROGRAM.] Except for the 
 32.31  provisions in this section, the provisions for the MFIP 
 32.32  application process shall be followed.  Within two days after 
 32.33  receipt of a completed combined application form, the county 
 32.34  agency must refer to the provider the applicant who meets the 
 32.35  conditions under section 256K.02, and notify the applicant in 
 32.36  writing of the program including the following provisions: 
 33.1      (1) notification that, as part of the application process, 
 33.2   applicants are required to attend orientation, to be followed 
 33.3   immediately by a job search; 
 33.4      (2) the program provider, the date, time, and location of 
 33.5   the scheduled program orientation; 
 33.6      (3) the procedures for qualifying for and receiving 
 33.7   benefits under the program; 
 33.8      (4) the immediate availability of supportive services, 
 33.9   including, but not limited to, child care, transportation, 
 33.10  medical assistance, and other work-related aid; and 
 33.11     (5) the rights, responsibilities, and obligations of 
 33.12  participants in the program, including, but not limited to, the 
 33.13  grounds for exemptions and deferrals, the consequences for 
 33.14  refusing or failing to participate fully, and the appeal process.
 33.15     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 33.16     Sec. 19.  Minnesota Statutes 2000, section 256K.07, is 
 33.17  amended to read: 
 33.18     256K.07 [ELIGIBILITY FOR FOOD STAMPS, MEDICAL ASSISTANCE, 
 33.19  AND CHILD CARE.] 
 33.20     The participant shall be treated as an MFIP recipient for 
 33.21  food stamps, medical assistance, and child care eligibility 
 33.22  purposes.  The participant who leaves the program as a result of 
 33.23  increased earnings from employment shall be eligible for 
 33.24  transitional medical assistance and child care without regard to 
 33.25  MFIP receipt in three of the six months preceding ineligibility. 
 33.26     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 33.27     Sec. 20.  Minnesota Statutes 2000, section 256L.02, 
 33.28  subdivision 4, is amended to read: 
 33.29     Subd. 4.  [FUNDING FOR PREGNANT WOMEN AND CHILDREN UNDER 
 33.30  AGE TWO.] (a) For fiscal years beginning on or after July 1, 
 33.31  1999, the state cost of health care services provided to 
 33.32  MinnesotaCare enrollees who are pregnant women or children under 
 33.33  age two shall be paid out of the general fund rather than the 
 33.34  health care access fund.  If the commissioner of finance decides 
 33.35  to pay for these costs using a source other than the general 
 33.36  fund, the commissioner shall include the change as a budget 
 34.1   initiative in the biennial or supplemental budget, and shall not 
 34.2   change the funding source through a forecast modification.  
 34.3      (b) For fiscal years beginning on or after July 1, 2002, 
 34.4   the state cost of health care services provided to MinnesotaCare 
 34.5   enrollees who are children under age 19 whose gross family 
 34.6   income is equal to or less than 185 percent of the federal 
 34.7   poverty guidelines shall be paid out of the general fund rather 
 34.8   than the health care access fund. 
 34.9      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
 34.10     Sec. 21.  Minnesota Statutes 2000, section 256L.06, 
 34.11  subdivision 3, is amended to read: 
 34.12     Subd. 3.  [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) 
 34.13  Premiums are dedicated to the commissioner for MinnesotaCare. 
 34.14     (b) The commissioner shall develop and implement procedures 
 34.15  to:  (1) require enrollees to report changes in income; (2) 
 34.16  adjust sliding scale premium payments, based upon changes in 
 34.17  enrollee income; and (3) disenroll enrollees from MinnesotaCare 
 34.18  for failure to pay required premiums.  Failure to pay includes 
 34.19  payment with a dishonored check, a returned automatic bank 
 34.20  withdrawal, or a refused credit card or debit card payment.  The 
 34.21  commissioner may demand a guaranteed form of payment, including 
 34.22  a cashier's check or a money order, as the only means to replace 
 34.23  a dishonored, returned, or refused payment. 
 34.24     (c) Premiums are calculated on a calendar month basis and 
 34.25  may be paid on a monthly, quarterly, or annual basis, with the 
 34.26  first payment due upon notice from the commissioner of the 
 34.27  premium amount required.  The commissioner shall inform 
 34.28  applicants and enrollees of these premium payment options. 
 34.29  Premium payment is required before enrollment is complete and to 
 34.30  maintain eligibility in MinnesotaCare.  
 34.31     (d) Nonpayment of the premium will result in disenrollment 
 34.32  from the plan within one calendar month after the due date 
 34.33  effective for the calendar month for which the premium was due.  
 34.34  Persons disenrolled for nonpayment or who voluntarily terminate 
 34.35  coverage from the program may not reenroll until four calendar 
 34.36  months have elapsed.  Persons disenrolled for nonpayment who pay 
 35.1   all past due premiums as well as current premiums due, including 
 35.2   premiums due for the period of disenrollment, within 20 days of 
 35.3   disenrollment, shall be reenrolled retroactively to the first 
 35.4   day of disenrollment.  Persons disenrolled for nonpayment or who 
 35.5   voluntarily terminate coverage from the program may not reenroll 
 35.6   for four calendar months unless the person demonstrates good 
 35.7   cause for nonpayment.  Good cause does not exist if a person 
 35.8   chooses to pay other family expenses instead of the premium.  
 35.9   The commissioner shall define good cause in rule. 
 35.10     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 35.11     Sec. 22.  Minnesota Statutes 2000, section 256L.07, 
 35.12  subdivision 1, is amended to read: 
 35.13     Subdivision 1.  [GENERAL REQUIREMENTS.] (a) Children 
 35.14  enrolled in the original children's health plan as of September 
 35.15  30, 1992, and children who enrolled in the MinnesotaCare program 
 35.16  after September 30, 1992, pursuant to Laws 1992, chapter 549, 
 35.17  article 4, section 17, who have maintained continuous coverage 
 35.18  in the MinnesotaCare program or medical assistance; and children 
 35.19  under two; pregnant women; and children through age 18 who have 
 35.20  family gross incomes that are equal to or less than 150 185 
 35.21  percent of the federal poverty guidelines are eligible without 
 35.22  meeting the requirements of subdivision 2, as long as they 
 35.23  maintain continuous coverage in the MinnesotaCare program or 
 35.24  medical assistance.  Children who apply for MinnesotaCare on or 
 35.25  after the implementation date of the employer-subsidized health 
 35.26  coverage program as described in Laws 1998, chapter 407, article 
 35.27  5, section 45, who have family gross incomes that are equal to 
 35.28  or less than 150 percent of the federal poverty guidelines, must 
 35.29  meet the requirements of subdivision 2 to be eligible for 
 35.30  MinnesotaCare subdivisions 2 and 3. 
 35.31     (b) Families enrolled in MinnesotaCare under section 
 35.32  256L.04, subdivision 1, whose income increases above 275 percent 
 35.33  of the federal poverty guidelines, are no longer eligible for 
 35.34  the program and shall be disenrolled by the commissioner.  
 35.35  Individuals enrolled in MinnesotaCare under section 256L.04, 
 35.36  subdivision 7, whose income increases above 175 percent of the 
 36.1   federal poverty guidelines are no longer eligible for the 
 36.2   program and shall be disenrolled by the commissioner.  For 
 36.3   persons disenrolled under this subdivision, MinnesotaCare 
 36.4   coverage terminates the last day of the calendar month following 
 36.5   the month in which the commissioner determines that the income 
 36.6   of a family or individual exceeds program income limits.  
 36.7      (c) Notwithstanding paragraph (b), individuals and families 
 36.8   may remain enrolled in MinnesotaCare if ten percent of their 
 36.9   annual income is less than the annual premium for a policy with 
 36.10  a $500 deductible available through the Minnesota comprehensive 
 36.11  health association.  Individuals and families who are no longer 
 36.12  eligible for MinnesotaCare under this subdivision shall be given 
 36.13  an 18-month notice period from the date that ineligibility is 
 36.14  determined before disenrollment.  
 36.15     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 36.16     Sec. 23.  Minnesota Statutes 2000, section 256L.07, 
 36.17  subdivision 3, is amended to read: 
 36.18     Subd. 3.  [OTHER HEALTH COVERAGE.] (a) Families and 
 36.19  individuals enrolled in the MinnesotaCare program must have no 
 36.20  health coverage while enrolled or for at least four months prior 
 36.21  to application and renewal.  Children enrolled in the original 
 36.22  children's health plan and children in families with income 
 36.23  equal to or less than 150 percent of the federal poverty 
 36.24  guidelines, who have other health insurance, are eligible if the 
 36.25  coverage: 
 36.26     (1) lacks two or more of the following: 
 36.27     (i) basic hospital insurance; 
 36.28     (ii) medical-surgical insurance; 
 36.29     (iii) prescription drug coverage; 
 36.30     (iv) dental coverage; or 
 36.31     (v) vision coverage; 
 36.32     (2) requires a deductible of $100 or more per person per 
 36.33  year; or 
 36.34     (3) lacks coverage because the child has exceeded the 
 36.35  maximum coverage for a particular diagnosis or the policy 
 36.36  excludes a particular diagnosis. 
 37.1      The commissioner may change this eligibility criterion for 
 37.2   sliding scale premiums in order to remain within the limits of 
 37.3   available appropriations.  The requirement of no health coverage 
 37.4   does not apply to newborns. 
 37.5      (b) Medical assistance, general assistance medical care, 
 37.6   and civilian health and medical program of the uniformed 
 37.7   service, CHAMPUS, are not considered insurance or health 
 37.8   coverage for purposes of the four-month requirement described in 
 37.9   this subdivision. 
 37.10     (c) For purposes of this subdivision, Medicare Part A or B 
 37.11  coverage under title XVIII of the Social Security Act, United 
 37.12  States Code, title 42, sections 1395c to 1395w-4, is considered 
 37.13  health coverage.  An applicant or enrollee may not refuse 
 37.14  Medicare coverage to establish eligibility for MinnesotaCare. 
 37.15     (d) Applicants who were recipients of medical assistance or 
 37.16  general assistance medical care within one month of application 
 37.17  must meet the provisions of this subdivision and subdivision 2. 
 37.18     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 37.19     Sec. 24.  Minnesota Statutes 2000, section 256L.15, 
 37.20  subdivision 1, is amended to read: 
 37.21     Subdivision 1.  [PREMIUM DETERMINATION.] Families with 
 37.22  children and individuals shall pay a premium determined 
 37.23  according to a sliding fee based on a percentage of the family's 
 37.24  gross family income, except that children through age 18 whose 
 37.25  gross family income is equal to or less than 185 percent of the 
 37.26  federal poverty guidelines are exempt from the requirement to 
 37.27  pay premiums.  Pregnant women and children under age two are 
 37.28  exempt from the provisions of section 256L.06, subdivision 3, 
 37.29  paragraph (b), clause (3), requiring disenrollment for failure 
 37.30  to pay premiums.  For pregnant women, this exemption continues 
 37.31  until the first day of the month following the 60th day 
 37.32  postpartum.  Women who remain enrolled during pregnancy or the 
 37.33  postpartum period, despite nonpayment of premiums, shall be 
 37.34  disenrolled on the first of the month following the 60th day 
 37.35  postpartum for the penalty period that otherwise applies under 
 37.36  section 256L.06, unless they begin paying premiums. 
 38.1      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 38.2      Sec. 25.  [REPEALER.] 
 38.3      (a) Minnesota Statutes 2000, sections 256.01, subdivision 
 38.4   18; and 256J.32, subdivision 7a, are repealed effective July 1, 
 38.5   2001. 
 38.6      (b) Minnesota Statutes 2000, sections 256B.0635, 
 38.7   subdivision 3; and 256L.15, subdivision 3, are repealed 
 38.8   effective July 1, 2002.