1.1                          A bill for an act 
  1.2             relating to insurance; simplifying regulation of 
  1.3             health insurers and health maintenance organizations; 
  1.4             transferring regulatory authority of certain 
  1.5             health-related organizations; establishing a task 
  1.6             force on small business; providing appointments; 
  1.7             amending Minnesota Statutes 2000, sections 62A.021, 
  1.8             subdivision 1; 62D.02, subdivisions 3, 8; 62D.08, by 
  1.9             adding a subdivision; 62D.12, subdivision 1; 62D.15, 
  1.10            subdivision 1; 62D.24; 62E.05, subdivision 2; 62E.11, 
  1.11            subdivision 13; 62E.14, subdivision 6; 62J.041, 
  1.12            subdivision 4; 62J.701; 62J.74, subdivisions 1, 2; 
  1.13            62J.75; 62L.02, subdivision 8; 62L.05, subdivision 12; 
  1.14            62L.08, subdivisions 10, 11; 62L.09, subdivision 3; 
  1.15            62L.10, subdivision 4; 62L.11, subdivision 2; 62M.11; 
  1.16            62M.16; 62N.02, subdivision 4; 62N.25, subdivision 7; 
  1.17            62N.26; 62Q.01, subdivision 2; 62Q.03, subdivision 5a; 
  1.18            62Q.075, subdivision 4; 62Q.106; 62Q.19, subdivision 
  1.19            1; 62Q.22, subdivisions 2, 6, 7; 62Q.33, subdivision 
  1.20            2; 62Q.49, subdivision 2; 62Q.51, subdivision 3; 
  1.21            62Q.525, subdivision 3; 62Q.69, subdivisions 2, 3; 
  1.22            62Q.71; 62Q.72; 62Q.73, subdivisions 3, 4, 5, 6; 
  1.23            62R.04, subdivision 5; 62R.06, subdivision 1; 62T.01, 
  1.24            subdivision 4; 256B.692, subdivisions 2, 7; proposing 
  1.25            coding for new law in Minnesota Statutes, chapter 62D; 
  1.26            repealing Minnesota Statutes 2000, sections 62D.08, 
  1.27            subdivision 5; 62Q.07. 
  1.28  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.29                             ARTICLE 1 
  1.30                      HMO COVERAGE FLEXIBILITY 
  1.31     Section 1.  Minnesota Statutes 2000, section 62D.02, 
  1.32  subdivision 8, is amended to read: 
  1.33     Subd. 8.  [HEALTH MAINTENANCE CONTRACT.] "Health 
  1.34  maintenance contract" means any contract whereby a health 
  1.35  maintenance organization agrees to provide comprehensive health 
  1.36  maintenance services to enrollees, provided that the contract 
  2.1   may contain reasonable enrollee copayment cost-sharing 
  2.2   provisions that comply with section 62D.099.  An individual or 
  2.3   group health maintenance contract may contain the copayment and 
  2.4   deductible provisions specified in this subdivision.  Copayment 
  2.5   and deductible provisions in group contracts shall not 
  2.6   discriminate on the basis of age, sex, race, length of 
  2.7   enrollment in the plan, or economic status; and during every 
  2.8   open enrollment period in which all offered health benefit 
  2.9   plans, including those subject to the jurisdiction of the 
  2.10  commissioners commissioner of commerce or health, fully 
  2.11  participate without any underwriting restrictions, copayment and 
  2.12  deductible provisions shall not discriminate on the basis of 
  2.13  preexisting health status.  In no event shall the sum of the 
  2.14  annual copayments and deductible exceed the maximum 
  2.15  out-of-pocket expenses allowable for a number three qualified 
  2.16  plan under section 62E.06, nor shall that sum exceed $5,000 per 
  2.17  family.  The annual deductible must not exceed $1,000 per 
  2.18  person.  The annual deductible must not apply to preventive 
  2.19  health services as described in Minnesota Rules, part 4685.0801, 
  2.20  subpart 8.  Where sections 62D.01 to 62D.30 permit a health 
  2.21  maintenance organization to contain reasonable copayment 
  2.22  provisions for preexisting health status, these provisions may 
  2.23  vary with respect to length of enrollment in the plan.  Any 
  2.24  contract may provide for health care services in addition to 
  2.25  those set forth in subdivision 7. 
  2.26     Sec. 2.  [62D.021] [ACCREDITATION.] 
  2.27     The commissioner shall accept the results of private 
  2.28  accreditation organizations, professional review organizations, 
  2.29  and other governmental agencies based upon a determination that 
  2.30  the other organization's standards and procedures are no less 
  2.31  stringent than state law.  Documentation of audit procedures and 
  2.32  work papers of these audit organizations must be available to 
  2.33  the commissioner.  The commissioner may use those results in 
  2.34  exercise of regulatory authority.  The commissioner may initiate 
  2.35  and conduct any investigation deemed necessary if there is 
  2.36  suspected violation of law. 
  3.1      Sec. 3.  Minnesota Statutes 2000, section 62D.08, is 
  3.2   amended by adding a subdivision to read: 
  3.3      Subd. 5a.  Every health maintenance organization shall 
  3.4   inform the commissioner of any termination of a provider 
  3.5   contract within ten days after the date that the health 
  3.6   maintenance organization sends out or receives the notice of 
  3.7   cancellation, discontinuance, or termination. 
  3.8      Sec. 4.  [62D.099] [ENROLLEE COST-SHARING.] 
  3.9      Subdivision 1.  [COPAYMENTS.] (a) A health maintenance 
  3.10  contract may provide for copayments that do not exceed 50 
  3.11  percent.  
  3.12     (b) Notwithstanding paragraph (a), a health maintenance 
  3.13  contract may provide for copayments that exceed 50 percent for 
  3.14  noncovered benefits.  Noncovered benefits include covered 
  3.15  services that the enrollee elects without prior approval to 
  3.16  receive out-of-network or from a broader network and 
  3.17  nonformulary prescription drugs.  
  3.18     (c) Copayments may be expressed as percentages or flat fees 
  3.19  as provided in Minnesota Rules, part 4685.0801. 
  3.20     Subd. 2.  [DEDUCTIBLES.] A health maintenance contract may 
  3.21  provide for deductibles of up to: 
  3.22     (1) for group contracts, $4,000 per person per year and 
  3.23  $9,000 per family per year; or 
  3.24     (2) for individual contracts, $10,000 per person per year 
  3.25  and $20,000 per family per year.  
  3.26     Subd. 3.  [ANNUAL OUT-OF-POCKET MAXIMUMS.] A health 
  3.27  maintenance contract may provide for an out-of-pocket maximum on 
  3.28  enrollee cost-sharing not to exceed $10,000 per person per year 
  3.29  on group contracts and $15,000 per person per year on individual 
  3.30  contracts. 
  3.31     Subd. 4.  [LIFETIME MAXIMUM BENEFITS.] A health maintenance 
  3.32  contract may provide for a lifetime maximum benefit limit, which 
  3.33  must not be less than $2,500,000. 
  3.34     Subd. 5.  [EXCEPTIONS.] (a) Subdivisions 1 and 2 do not 
  3.35  apply to the extent that another law requires lower enrollee 
  3.36  cost-sharing for specific services than that specified in 
  4.1   subdivisions 1 and 2 or to preventive services as defined in 
  4.2   Minnesota Rules, part 4685.0801, subpart 8. 
  4.3      (b) This section does not apply to the small employer plans 
  4.4   described in section 62L.05 or to plans described in section 
  4.5   62L.055. 
  4.6      Subd. 6.  [INFLATION ADJUSTMENT.] (a) The dollar amounts 
  4.7   stated in subdivisions 1 and 2 must be adjusted for inflation 
  4.8   annually by the commissioner under this subdivision. 
  4.9      (b) The commissioner shall, no later than June 1 of each 
  4.10  year, cause to be published in the State Register a notice 
  4.11  stating the adjusted dollar amounts to become effective on the 
  4.12  following January 1.  If no adjustment is required under this 
  4.13  section, the notice shall so state. 
  4.14     (c) The commissioner shall calculate the inflation 
  4.15  adjustment based upon the Consumer Price Index for all urban 
  4.16  consumers issued by the United States Bureau of Labor Statistics 
  4.17  for the first quarter of the year in which the notice required 
  4.18  under paragraph (b) is to be published.  For purposes of this 
  4.19  calculation, the base period is the first quarter of 2002.  The 
  4.20  dollar amounts calculated must be rounded off to the nearest 
  4.21  $100.  The first adjustment shall be made by means of a notice 
  4.22  published in 2003. 
  4.23     Sec. 5.  Minnesota Statutes 2000, section 62N.25, 
  4.24  subdivision 7, is amended to read: 
  4.25     Subd. 7.  [EXEMPTIONS FROM EXISTING REQUIREMENTS.] 
  4.26  Community integrated service networks are exempt from the 
  4.27  following requirements applicable to health maintenance 
  4.28  organizations: 
  4.29     (1) conducting focused studies under Minnesota Rules, part 
  4.30  4685.1125; 
  4.31     (2) preparing and filing, as a condition of licensure, a 
  4.32  written quality assurance plan, and annually filing such a plan 
  4.33  and a work plan, under Minnesota Rules, parts 4685.1110 and 
  4.34  4685.1130; 
  4.35     (3) maintaining statistics under Minnesota Rules, part 
  4.36  4685.1200; 
  5.1      (4) filing provider contract forms under sections 62D.03, 
  5.2   subdivision 4, and 62D.08, subdivision 1; and 
  5.3      (5) reporting any changes in the address of a network 
  5.4   provider or length of a provider contract or additions to the 
  5.5   provider network to the commissioner within ten days under 
  5.6   section 62D.08, subdivision 5.  Community networks must report 
  5.7   such information to the commissioner on a quarterly basis.  
  5.8   Community networks that fail to make the required quarterly 
  5.9   filing are subject to the penalties set forth in section 62D.08, 
  5.10  subdivision 5; and 
  5.11     (6) preparing and filing, as a condition of licensure, a 
  5.12  marketing plan, and annually filing a marketing plan, under 
  5.13  sections 62D.03, subdivision 4, paragraph (l), and 62D.08, 
  5.14  subdivision 1. 
  5.15     Sec. 6.  Minnesota Statutes 2000, section 62Q.19, 
  5.16  subdivision 1, is amended to read: 
  5.17     Subdivision 1.  [DESIGNATION.] The commissioner shall 
  5.18  designate essential community providers.  The criteria for 
  5.19  essential community provider designation shall be the following: 
  5.20     (1) a demonstrated ability to integrate applicable 
  5.21  supportive and stabilizing services with medical care for 
  5.22  uninsured persons and high-risk and special needs populations as 
  5.23  defined in section 62Q.07, subdivision 2, paragraph (e), 
  5.24  underserved, and other special needs populations; and 
  5.25     (2) a commitment to serve low-income and underserved 
  5.26  populations by meeting the following requirements: 
  5.27     (i) has nonprofit status in accordance with chapter 317A; 
  5.28     (ii) has tax exempt status in accordance with the Internal 
  5.29  Revenue Service Code, section 501(c)(3); 
  5.30     (iii) charges for services on a sliding fee schedule based 
  5.31  on current poverty income guidelines; and 
  5.32     (iv) does not restrict access or services because of a 
  5.33  client's financial limitation; 
  5.34     (3) status as a local government unit as defined in section 
  5.35  62D.02, subdivision 11, a hospital district created or 
  5.36  reorganized under sections 447.31 to 447.37, an Indian tribal 
  6.1   government, an Indian health service unit, or a community health 
  6.2   board as defined in chapter 145A; 
  6.3      (4) a former state hospital that specializes in the 
  6.4   treatment of cerebral palsy, spina bifida, epilepsy, closed head 
  6.5   injuries, specialized orthopedic problems, and other disabling 
  6.6   conditions; or 
  6.7      (5) a rural hospital that has qualified for a sole 
  6.8   community hospital financial assistance grant in the past three 
  6.9   years under section 144.1484, subdivision 1.  For these rural 
  6.10  hospitals, the essential community provider designation applies 
  6.11  to all health services provided, including both inpatient and 
  6.12  outpatient services. 
  6.13     Prior to designation, the commissioner shall publish the 
  6.14  names of all applicants in the State Register.  The public shall 
  6.15  have 30 days from the date of publication to submit written 
  6.16  comments to the commissioner on the application.  No designation 
  6.17  shall be made by the commissioner until the 30-day period has 
  6.18  expired. 
  6.19     The commissioner may designate an eligible provider as an 
  6.20  essential community provider for all the services offered by 
  6.21  that provider or for specific services designated by the 
  6.22  commissioner. 
  6.23     For the purpose of this subdivision, supportive and 
  6.24  stabilizing services include at a minimum, transportation, child 
  6.25  care, cultural, and linguistic services where appropriate. 
  6.26     Sec. 7.  Minnesota Statutes 2000, section 256B.692, 
  6.27  subdivision 2, is amended to read: 
  6.28     Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] (a) 
  6.29  Notwithstanding chapters 62D and 62N, a county that elects to 
  6.30  purchase medical assistance and general assistance medical care 
  6.31  in return for a fixed sum without regard to the frequency or 
  6.32  extent of services furnished to any particular enrollee is not 
  6.33  required to obtain a certificate of authority under chapter 62D 
  6.34  or 62N.  The county board of commissioners is the governing body 
  6.35  of a county-based purchasing program.  In a multicounty 
  6.36  arrangement, the governing body is a joint powers board 
  7.1   established under section 471.59.  
  7.2      (b) A county that elects to purchase medical assistance and 
  7.3   general assistance medical care services under this section must 
  7.4   satisfy the commissioner of health that the requirements for 
  7.5   assurance of consumer protection, provider protection, and 
  7.6   fiscal solvency of chapter 62D, applicable to health maintenance 
  7.7   organizations, or chapter 62N, applicable to community 
  7.8   integrated service networks, will be met.  
  7.9      (c) A county must also assure the commissioner of health 
  7.10  that the requirements of sections 62J.041; 62J.48; 62J.71 to 
  7.11  62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 
  7.12  62Q, including sections 62Q.07; 62Q.075; 62Q.1055; 62Q.106; 
  7.13  62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 
  7.14  62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64; 62Q.68 
  7.15  to 62Q.72; and 72A.201 will be met.  
  7.16     (d) All enforcement and rulemaking powers available under 
  7.17  chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 
  7.18  commissioner of health with respect to counties that purchase 
  7.19  medical assistance and general assistance medical care services 
  7.20  under this section.  
  7.21     (e) The commissioner, in consultation with county 
  7.22  government, shall develop administrative and financial reporting 
  7.23  requirements for county-based purchasing programs relating to 
  7.24  sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 
  7.25  62N.31, and other sections as necessary, that are specific to 
  7.26  county administrative, accounting, and reporting systems and 
  7.27  consistent with other statutory requirements of counties.  
  7.28     Sec. 8.  [TASK FORCE ON SMALL BUSINESS HEALTH INSURANCE.] 
  7.29     (a) The task force on small business health insurance shall 
  7.30  study Minnesota's health coverage market available to small 
  7.31  businesses and make recommendations for private market solutions 
  7.32  that could make group health coverage more accessible and 
  7.33  affordable for small businesses.  The task force shall recommend 
  7.34  any legislative changes needed to permit those private market 
  7.35  solutions. 
  7.36     (b) The task force shall report its recommendations in 
  8.1   writing to the legislature, in compliance with Minnesota 
  8.2   Statutes, section 3.195, no later than December 15, 2001. 
  8.3      (c) The commissioners of commerce and health shall provide 
  8.4   any necessary assistance to the task force. 
  8.5      (d) The task force consists of the following members: 
  8.6      (1) three members of the senate, including at least one 
  8.7   member of the minority, appointed by the subcommittee on 
  8.8   committees of the senate committee on rules and administration; 
  8.9      (2) three members of the house of representatives, 
  8.10  including at least one member of the minority, appointed by the 
  8.11  speaker of the house; 
  8.12     (3) three persons representing small business owners, 
  8.13  appointed by the Minnesota chamber of commerce; 
  8.14     (4) one person representing small business owners, 
  8.15  appointed by the National Federation of Independent Business; 
  8.16     (5) two persons appointed by the Minnesota council of 
  8.17  health plans; 
  8.18     (6) one person appointed by the insurance federation of 
  8.19  Minnesota; 
  8.20     (7) one insurance agent, appointed by the Minnesota 
  8.21  association of health underwriters; 
  8.22     (8) the commissioner of commerce or a designee; and 
  8.23     (9) one member of the general public, appointed by the 
  8.24  commissioner of commerce. 
  8.25     (e) The task force shall not provide compensation or 
  8.26  expense reimbursement to its members. 
  8.27     (f) The task force expires on June 30, 2002. 
  8.28     Sec. 9.  [REPEALER.] 
  8.29     Minnesota Statutes 2000, sections 62D.08, subdivision 5; 
  8.30  and 62Q.07, are repealed. 
  8.31     Sec. 10.  [EFFECTIVE DATE.] 
  8.32     Sections 1 to 9 are effective the day following final 
  8.33  enactment. 
  8.34                             ARTICLE 2 
  8.35                  TRANSFER OF REGULATORY AUTHORITY 
  8.36     Section 1.  Minnesota Statutes 2000, section 62A.021, 
  9.1   subdivision 1, is amended to read: 
  9.2      Subdivision 1.  [LOSS RATIO STANDARDS.] (a) Notwithstanding 
  9.3   section 62A.02, subdivision 3, relating to loss ratios, health 
  9.4   care policies or certificates shall not be delivered or issued 
  9.5   for delivery to an individual or to a small employer as defined 
  9.6   in section 62L.02, unless the policies or certificates can be 
  9.7   expected, as estimated for the entire period for which rates are 
  9.8   computed to provide coverage, to return to Minnesota 
  9.9   policyholders and certificate holders in the form of aggregate 
  9.10  benefits not including anticipated refunds or credits, provided 
  9.11  under the policies or certificates, (1) at least 75 percent of 
  9.12  the aggregate amount of premiums earned in the case of policies 
  9.13  issued in the small employer market, as defined in section 
  9.14  62L.02, subdivision 27, calculated on an aggregate basis; and 
  9.15  (2) at least 65 percent of the aggregate amount of premiums 
  9.16  earned in the case of each policy form or certificate form 
  9.17  issued in the individual market; calculated on the basis of 
  9.18  incurred claims experience or incurred health care expenses 
  9.19  where coverage is provided by a health maintenance organization 
  9.20  on a service rather than reimbursement basis and earned premiums 
  9.21  for the period and according to accepted actuarial principles 
  9.22  and practices.  Assessments by the reinsurance association 
  9.23  created in chapter 62L and all types of taxes, surcharges, or 
  9.24  assessments created by Laws 1992, chapter 549, or created on or 
  9.25  after April 23, 1992, are included in the calculation of 
  9.26  incurred claims experience or incurred health care expenses.  
  9.27  The applicable percentage for policies and certificates issued 
  9.28  in the small employer market, as defined in section 62L.02, 
  9.29  increases by one percentage point on July 1 of each year, 
  9.30  beginning on July 1, 1994, until an 82 percent loss ratio is 
  9.31  reached on July 1, 2000.  The applicable percentage for policy 
  9.32  forms and certificate forms issued in the individual market 
  9.33  increases by one percentage point on July 1 of each year, 
  9.34  beginning on July 1, 1994, until a 72 percent loss ratio is 
  9.35  reached on July 1, 2000.  A health carrier that enters a market 
  9.36  after July 1, 1993, does not start at the beginning of the 
 10.1   phase-in schedule and must instead comply with the loss ratio 
 10.2   requirements applicable to other health carriers in that market 
 10.3   for each time period.  Premiums earned and claims incurred in 
 10.4   markets other than the small employer and individual markets are 
 10.5   not relevant for purposes of this section. 
 10.6      (b) All filings of rates and rating schedules shall 
 10.7   demonstrate that actual expected claims in relation to premiums 
 10.8   comply with the requirements of this section when combined with 
 10.9   actual experience to date.  Filings of rate revisions shall also 
 10.10  demonstrate that the anticipated loss ratio over the entire 
 10.11  future period for which the revised rates are computed to 
 10.12  provide coverage can be expected to meet the appropriate loss 
 10.13  ratio standards, and aggregate loss ratio from inception of the 
 10.14  policy form or certificate form shall equal or exceed the 
 10.15  appropriate loss ratio standards. 
 10.16     (c) A health carrier that issues health care policies and 
 10.17  certificates to individuals or to small employers, as defined in 
 10.18  section 62L.02, in this state shall file annually its rates, 
 10.19  rating schedule, and supporting documentation including ratios 
 10.20  of incurred losses to earned premiums by policy form or 
 10.21  certificate form duration for approval by the commissioner 
 10.22  according to the filing requirements and procedures prescribed 
 10.23  by the commissioner.  The supporting documentation shall also 
 10.24  demonstrate in accordance with actuarial standards of practice 
 10.25  using reasonable assumptions that the appropriate loss ratio 
 10.26  standards can be expected to be met over the entire period for 
 10.27  which rates are computed.  The demonstration shall exclude 
 10.28  active life reserves.  If the data submitted does not confirm 
 10.29  that the health carrier has satisfied the loss ratio 
 10.30  requirements of this section, the commissioner shall notify the 
 10.31  health carrier in writing of the deficiency.  The health carrier 
 10.32  shall have 30 days from the date of the commissioner's notice to 
 10.33  file amended rates that comply with this section.  If the health 
 10.34  carrier fails to file amended rates within the prescribed time, 
 10.35  the commissioner shall order that the health carrier's filed 
 10.36  rates for the nonconforming policy form or certificate form be 
 11.1   reduced to an amount that would have resulted in a loss ratio 
 11.2   that complied with this section had it been in effect for the 
 11.3   reporting period of the supplement.  The health carrier's 
 11.4   failure to file amended rates within the specified time or the 
 11.5   issuance of the commissioner's order amending the rates does not 
 11.6   preclude the health carrier from filing an amendment of its 
 11.7   rates at a later time.  The commissioner shall annually make the 
 11.8   submitted data available to the public at a cost not to exceed 
 11.9   the cost of copying.  The data must be compiled in a form useful 
 11.10  for consumers who wish to compare premium charges and loss 
 11.11  ratios. 
 11.12     (d) Each sale of a policy or certificate that does not 
 11.13  comply with the loss ratio requirements of this section is an 
 11.14  unfair or deceptive act or practice in the business of insurance 
 11.15  and is subject to the penalties in sections 72A.17 to 72A.32. 
 11.16     (e)(1) For purposes of this section, health care policies 
 11.17  issued as a result of solicitations of individuals through the 
 11.18  mail or mass media advertising, including both print and 
 11.19  broadcast advertising, shall be treated as individual policies. 
 11.20     (2) For purposes of this section, (i) "health care policy" 
 11.21  or "health care certificate" is a health plan as defined in 
 11.22  section 62A.011; and (ii) "health carrier" has the meaning given 
 11.23  in section 62A.011 and includes all health carriers delivering 
 11.24  or issuing for delivery health care policies or certificates in 
 11.25  this state or offering these policies or certificates to 
 11.26  residents of this state.  
 11.27     (f) The loss ratio phase-in as described in paragraph (a) 
 11.28  does not apply to individual policies and small employer 
 11.29  policies issued by a health plan company that is assessed less 
 11.30  than three percent of the total annual amount assessed by the 
 11.31  Minnesota comprehensive health association.  These policies must 
 11.32  meet a 68 percent loss ratio for individual policies, a 71 
 11.33  percent loss ratio for small employer policies with fewer than 
 11.34  ten employees, and a 75 percent loss ratio for all other small 
 11.35  employer policies. 
 11.36     (g) The commissioners commissioner of commerce and health 
 12.1   shall each annually issue a public report listing, by health 
 12.2   plan company, the actual loss ratios experienced in the 
 12.3   individual and small employer markets in this state by the 
 12.4   health plan companies that the commissioners respectively 
 12.5   regulate.  The commissioners shall coordinate release of these 
 12.6   reports so as to release them as a joint report or as separate 
 12.7   reports issued the same day.  The report or reports shall be 
 12.8   released no later than June 1 for loss ratios experienced for 
 12.9   the preceding calendar year.  Health plan companies shall 
 12.10  provide to the commissioners commissioner any information 
 12.11  requested by the commissioners commissioner for purposes of this 
 12.12  paragraph. 
 12.13     Sec. 2.  Minnesota Statutes 2000, section 62D.02, 
 12.14  subdivision 3, is amended to read: 
 12.15     Subd. 3.  [COMMISSIONER OF HEALTH OR COMMISSIONER.] 
 12.16  "Commissioner of health" or "Commissioner" means the state 
 12.17  commissioner of health commerce or a designee. 
 12.18     Sec. 3.  Minnesota Statutes 2000, section 62D.12, 
 12.19  subdivision 1, is amended to read: 
 12.20     Subdivision 1.  [FALSE REPRESENTATIONS.] No health 
 12.21  maintenance organization or representative thereof may cause or 
 12.22  knowingly permit the use of advertising or solicitation which is 
 12.23  untrue or misleading, or any form of evidence of coverage which 
 12.24  is deceptive.  Each health maintenance organization shall be 
 12.25  subject to sections 72A.17 to 72A.32, relating to the regulation 
 12.26  of trade practices, except (a) to the extent that the nature of 
 12.27  a health maintenance organization renders such sections clearly 
 12.28  inappropriate and (b) that enforcement shall be by the 
 12.29  commissioner of health and not by the commissioner of commerce.  
 12.30  Every health maintenance organization shall be subject to 
 12.31  sections 8.31 and 325F.69. 
 12.32     Sec. 4.  Minnesota Statutes 2000, section 62D.15, 
 12.33  subdivision 1, is amended to read: 
 12.34     Subdivision 1.  [GROUNDS FOR SUSPENSION OR REVOCATION.] The 
 12.35  commissioner of health may suspend or revoke any certificate of 
 12.36  authority issued to a health maintenance organization under 
 13.1   sections 62D.01 to 62D.30 if the commissioner finds that: 
 13.2      (a) (1) the health maintenance organization is operating 
 13.3   significantly in contravention of its basic organizational 
 13.4   document, its health maintenance contract, or in a manner 
 13.5   contrary to that described in and reasonably inferred from any 
 13.6   other information submitted under section 62D.03, unless 
 13.7   amendments to such submissions have been filed with and approved 
 13.8   by the commissioner of health; 
 13.9      (b) (2) the health maintenance organization issues 
 13.10  evidences of coverage which do not comply with the requirements 
 13.11  of section 62D.07; 
 13.12     (c) (3) the health maintenance organization is unable to 
 13.13  fulfill its obligations to furnish comprehensive health 
 13.14  maintenance services as required under its health maintenance 
 13.15  contract; 
 13.16     (d) (4) the health maintenance organization is no longer 
 13.17  financially responsible and may reasonably be expected to be 
 13.18  unable to meet its obligations to enrollees or prospective 
 13.19  enrollees; 
 13.20     (e) (5) the health maintenance organization has failed to 
 13.21  implement a mechanism affording the enrollees an opportunity to 
 13.22  participate in matters of policy and operation under section 
 13.23  62D.06; 
 13.24     (f) (6) the health maintenance organization has failed to 
 13.25  implement the complaint system required by section 62D.11 in a 
 13.26  manner designed to reasonably resolve valid complaints; 
 13.27     (g) (7) the health maintenance organization, or any person 
 13.28  acting with its sanction, has advertised or merchandised its 
 13.29  services in an untrue, misrepresentative, misleading, deceptive, 
 13.30  or unfair manner; 
 13.31     (h) (8) the continued operation of the health maintenance 
 13.32  organization would be hazardous to its enrollees; or 
 13.33     (i) (9) the health maintenance organization has otherwise 
 13.34  failed to substantially comply with sections 62D.01 to 62D.30 or 
 13.35  with any other statute or administrative rule applicable to 
 13.36  health maintenance organizations, or has submitted false 
 14.1   information in any report required hereunder. 
 14.2      Sec. 5.  Minnesota Statutes 2000, section 62D.24, is 
 14.3   amended to read: 
 14.4      62D.24 [STATE COMMISSIONER OF HEALTH'S COMMERCE'S AUTHORITY 
 14.5   TO CONTRACT.] 
 14.6      The commissioner of health commerce, in carrying out the 
 14.7   obligations under sections 62D.01 to 62D.30, may contract with 
 14.8   the commissioner of commerce health or other qualified persons 
 14.9   to make recommendations concerning the determinations required 
 14.10  to be made.  Such recommendations may be accepted in full or in 
 14.11  part by the commissioner of health commerce. 
 14.12     Sec. 6.  Minnesota Statutes 2000, section 62E.05, 
 14.13  subdivision 2, is amended to read: 
 14.14     Subd. 2.  [ANNUAL REPORT.] (a) All health plan companies, 
 14.15  as defined in section 62Q.01, shall annually report to the 
 14.16  commissioner responsible for their regulation.  The following 
 14.17  information shall be reported to the appropriate commissioner on 
 14.18  February 1 of each year: 
 14.19     (1) the number of individuals and groups who received 
 14.20  coverage in the prior year through the qualified plans; and 
 14.21     (2) the number of individuals and groups who received 
 14.22  coverage in the prior year through each of the unqualified plans 
 14.23  sold by the company. 
 14.24     (b) The state of Minnesota or any of its departments, 
 14.25  agencies, programs, instrumentalities, or political 
 14.26  subdivisions, shall report in writing to the association and to 
 14.27  the commissioner of commerce no later than September 15 of each 
 14.28  year regarding the number of persons and the amount of premiums, 
 14.29  deductibles, copayments, or coinsurance that it paid for on 
 14.30  behalf of enrollees in the comprehensive health association.  
 14.31  This report must contain only summary information and must not 
 14.32  include any individually identifiable data.  The report must 
 14.33  cover the 12-month period ending the preceding June 30. 
 14.34     Sec. 7.  Minnesota Statutes 2000, section 62E.11, 
 14.35  subdivision 13, is amended to read: 
 14.36     Subd. 13.  [STATE FUNDING; EFFECT ON PREMIUM RATES OF 
 15.1   MEMBERS.] In approving the premium rates as required in sections 
 15.2   62A.65, subdivision 3; and 62L.08, subdivision 8, the 
 15.3   commissioners of health and commissioner of commerce shall 
 15.4   ensure that any appropriation to reduce the annual assessment 
 15.5   made on the contributing members to cover the costs of the 
 15.6   Minnesota comprehensive health insurance plan as required under 
 15.7   this section is reflected in the premium rates charged by each 
 15.8   contributing member. 
 15.9      Sec. 8.  Minnesota Statutes 2000, section 62E.14, 
 15.10  subdivision 6, is amended to read: 
 15.11     Subd. 6.  [TERMINATION OF INDIVIDUAL POLICY OR CONTRACT.] A 
 15.12  Minnesota resident who holds an individual health maintenance 
 15.13  contract, individual nonprofit health service corporation 
 15.14  contract, or an individual insurance policy previously approved 
 15.15  by the commissioners of health or commissioner of commerce, may 
 15.16  enroll in the comprehensive health insurance plan with a waiver 
 15.17  of the preexisting condition as described in subdivision 3, 
 15.18  without interruption in coverage, provided (1) no replacement 
 15.19  coverage that meets the requirements of section 62D.121 was 
 15.20  offered by the contributing member, and (2) the policy or 
 15.21  contract has been terminated for reasons other than (a) 
 15.22  nonpayment of premium; (b) failure to make copayments required 
 15.23  by the health care plan; (c) moving out of the area served; or 
 15.24  (d) a materially false statement or misrepresentation by the 
 15.25  enrollee in the application for membership; and, provided 
 15.26  further, that the option to enroll in the plan is exercised 
 15.27  within 30 days of termination of the existing policy or contract.
 15.28     Coverage allowed under this section is effective when the 
 15.29  contract or policy is terminated and the enrollee has completed 
 15.30  the proper application and paid the required premium or fee. 
 15.31     Expenses incurred from the preexisting conditions of 
 15.32  individuals enrolled in the state plan under this subdivision 
 15.33  must be paid by the contributing member canceling coverage as 
 15.34  set forth in section 62E.11, subdivision 10. 
 15.35     The application must include evidence of termination of the 
 15.36  existing policy or certificate as required in subdivision 1. 
 16.1      Sec. 9.  Minnesota Statutes 2000, section 62J.041, 
 16.2   subdivision 4, is amended to read: 
 16.3      Subd. 4.  [MONITORING OF RESERVES.] (a) The commissioners 
 16.4   of health and commissioner of commerce shall monitor health plan 
 16.5   company reserves and net worth as established under chapters 
 16.6   60A, 62C, 62D, 62H, and 64B, with respect to the health plan 
 16.7   companies that each commissioner respectively regulates to 
 16.8   assess the degree to which savings resulting from the 
 16.9   establishment of cost containment goals are passed on to 
 16.10  consumers in the form of lower premium rates.  
 16.11     (b) Health plan companies shall fully reflect in the 
 16.12  premium rates the savings generated by the cost containment 
 16.13  goals.  No premium rate, currently reviewed by the departments 
 16.14  of health or commissioner of commerce, may be approved for those 
 16.15  health plan companies unless the health plan company establishes 
 16.16  to the satisfaction of the commissioner of commerce or the 
 16.17  commissioner of health, as appropriate, that the proposed new 
 16.18  rate would comply with this paragraph. 
 16.19     (c) Health plan companies, except those licensed under 
 16.20  chapter 60A to sell accident and sickness insurance under 
 16.21  chapter 62A, shall annually before the end of the fourth fiscal 
 16.22  quarter provide to the commissioner of health or commerce, as 
 16.23  applicable, a projection of the level of reserves the company 
 16.24  expects to attain during each quarter of the following fiscal 
 16.25  year.  These health plan companies shall submit with required 
 16.26  quarterly financial statements a calculation of the actual 
 16.27  reserve level attained by the company at the end of each quarter 
 16.28  including identification of the sources of any significant 
 16.29  changes in the reserve level and an updated projection of the 
 16.30  level of reserves the health plan company expects to attain by 
 16.31  the end of the fiscal year.  In cases where the health plan 
 16.32  company has been given a certificate to operate a new health 
 16.33  maintenance organization under chapter 62D, or been licensed as 
 16.34  a community integrated service network under chapter 62N, or 
 16.35  formed an affiliation with one of these organizations, the 
 16.36  health plan company shall also submit with its quarterly 
 17.1   financial statement, total enrollment at the beginning and end 
 17.2   of the quarter and enrollment changes within each service area 
 17.3   of the new organization.  The reserve calculations shall be 
 17.4   maintained by the commissioners commissioner of commerce as 
 17.5   trade secret information, except to the extent that such 
 17.6   information is also required to be filed by another provision of 
 17.7   state law and is not treated as trade secret information under 
 17.8   such other provisions. 
 17.9      (d) Health plan companies in paragraph (c) whose reserves 
 17.10  are less than the required minimum or more than the required 
 17.11  maximum at the end of the fiscal year shall submit a plan of 
 17.12  corrective action to the commissioner of health or commerce 
 17.13  under subdivision 7. 
 17.14     (e) The commissioner of commerce, in consultation with the 
 17.15  commissioner of health, shall report to the legislature no later 
 17.16  than January 15, 1995, as to whether the concept of a reserve 
 17.17  corridor or other mechanism for purposes of monitoring reserves 
 17.18  is adaptable for use with indemnity health insurers that do 
 17.19  business in multiple states and that must comply with their 
 17.20  domiciliary state's reserves requirements. 
 17.21     Sec. 10.  Minnesota Statutes 2000, section 62J.701, is 
 17.22  amended to read: 
 17.23     62J.701 [GOVERNMENTAL PROGRAMS.] 
 17.24     Beginning January 1, 1999, the provisions in paragraphs (a) 
 17.25  to (d) apply. 
 17.26     (a) For purposes of sections 62J.695 to 62J.80, the 
 17.27  requirements and other provisions that apply to health plan 
 17.28  companies also apply to governmental programs. 
 17.29     (b) For purposes of this section, "governmental programs" 
 17.30  means the medical assistance program, the MinnesotaCare program, 
 17.31  the general assistance medical care program, the state employee 
 17.32  group insurance program, the public employees insurance program 
 17.33  under section 43A.316, and coverage provided by political 
 17.34  subdivisions under section 471.617. 
 17.35     (c) Notwithstanding paragraph (a), section 62J.72 does not 
 17.36  apply to the fee-for-service programs under medical assistance, 
 18.1   MinnesotaCare, and general assistance medical care. 
 18.2      (d) If a state commissioner or local unit of government 
 18.3   contracts with a health plan company or a third-party 
 18.4   administrator, the contract may assign any obligations under 
 18.5   paragraph (a) to the health plan company or third-party 
 18.6   administrator.  Nothing in this paragraph shall be construed to 
 18.7   remove or diminish any enforcement responsibilities of the 
 18.8   commissioners of health or commissioner of commerce provided in 
 18.9   sections 62J.695 to 62J.80. 
 18.10     Sec. 11.  Minnesota Statutes 2000, section 62J.74, 
 18.11  subdivision 1, is amended to read: 
 18.12     Subdivision 1.  [AUTHORITY.] The commissioners commissioner 
 18.13  of health and commerce shall each periodically review contracts 
 18.14  and arrangements among health care providing entities and health 
 18.15  plan companies they regulate to determine compliance with 
 18.16  sections 62J.70 to 62J.73.  Any person may submit a contract or 
 18.17  arrangement to the relevant commissioner for review if the 
 18.18  person believes sections 62J.70 to 62J.73 have been violated.  
 18.19  Any provision of a contract or arrangement found by the relevant 
 18.20  commissioner to violate this section is null and void, and the 
 18.21  relevant commissioner may assess civil penalties against the 
 18.22  health plan company in an amount not to exceed $2,500 for each 
 18.23  day the contract or arrangement is in effect, and may use the 
 18.24  enforcement procedures otherwise available to the commissioner.  
 18.25  All due process rights afforded under chapter 14 apply to this 
 18.26  section.  
 18.27     Sec. 12.  Minnesota Statutes 2000, section 62J.74, 
 18.28  subdivision 2, is amended to read: 
 18.29     Subd. 2.  [ASSISTANCE TO LICENSING BOARDS.] A 
 18.30  health-related licensing board as defined under section 214.01, 
 18.31  subdivision 2, shall submit a contract or arrangement to the 
 18.32  relevant commissioner of commerce for review if the board 
 18.33  believes sections 62J.70 to 62J.73 have been violated.  If the 
 18.34  commissioner determines that any provision of a contract or 
 18.35  arrangement violates those sections, the board may take 
 18.36  disciplinary action against any person who is licensed or 
 19.1   regulated by the board who entered into the contract arrangement.
 19.2      Sec. 13.  Minnesota Statutes 2000, section 62J.75, is 
 19.3   amended to read: 
 19.4      62J.75 [CONSUMER ADVISORY BOARD.] 
 19.5      (a) The consumer advisory board consists of 18 members 
 19.6   appointed in accordance with paragraph (b).  All members must be 
 19.7   public, consumer members who: 
 19.8      (1) do not have and never had a material interest in either 
 19.9   the provision of health care services or in an activity directly 
 19.10  related to the provision of health care services, such as health 
 19.11  insurance sales or health plan administration; 
 19.12     (2) are not registered lobbyists; and 
 19.13     (3) are not currently responsible for or directly involved 
 19.14  in the purchasing of health insurance for a business or 
 19.15  organization. 
 19.16     (b) The governor, the speaker of the house of 
 19.17  representatives, and the subcommittee on committees of the 
 19.18  committee on rules and administration of the senate shall each 
 19.19  appoint six members.  Members may be compensated in accordance 
 19.20  with section 15.059, subdivision 3, except that members shall 
 19.21  not receive per diem compensation or reimbursements for child 
 19.22  care expenses. 
 19.23     (c) The board shall advise the commissioners of health and 
 19.24  commissioner of commerce on the following: 
 19.25     (1) the needs of health care consumers and how to better 
 19.26  serve and educate the consumers on health care concerns and 
 19.27  recommend solutions to identified problems; and 
 19.28     (2) consumer protection issues in the self-insured market, 
 19.29  including, but not limited to, public education needs. 
 19.30     The board also may make recommendations to the legislature 
 19.31  on these issues. 
 19.32     (d) The board and this section expire June 30, 2001. 
 19.33     Sec. 14.  Minnesota Statutes 2000, section 62L.02, 
 19.34  subdivision 8, is amended to read: 
 19.35     Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
 19.36  commissioner of commerce for health carriers subject to the 
 20.1   jurisdiction of the department of commerce or the commissioner 
 20.2   of health for health carriers subject to the jurisdiction of the 
 20.3   department of health, or the relevant commissioner's designated 
 20.4   representative.  For purposes of sections 62L.13 to 62L.22, 
 20.5   "commissioner" means the commissioner of commerce or that 
 20.6   commissioner's designated representative. 
 20.7      Sec. 15.  Minnesota Statutes 2000, section 62L.05, 
 20.8   subdivision 12, is amended to read: 
 20.9      Subd. 12.  [DEMONSTRATION PROJECTS.] Nothing in this 
 20.10  chapter prohibits a health maintenance organization from 
 20.11  offering a demonstration project authorized under section 62D.30.
 20.12  The commissioner of health may approve a demonstration project 
 20.13  which offers benefits that do not meet the requirements of a 
 20.14  small employer plan if the commissioner finds that the 
 20.15  requirements of section 62D.30 are otherwise met. 
 20.16     Sec. 16.  Minnesota Statutes 2000, section 62L.08, 
 20.17  subdivision 10, is amended to read: 
 20.18     Subd. 10.  [RATING REPORT.] Beginning January 1, 1995, and 
 20.19  annually thereafter, the commissioners commissioner of health 
 20.20  and commerce shall provide a joint report to the legislature on 
 20.21  the effect of the rating restrictions required by this section 
 20.22  and the appropriateness of proceeding with additional rate 
 20.23  reform.  Each report must include an analysis of the 
 20.24  availability of health care coverage due to the rating reform, 
 20.25  the equitable and appropriate distribution of risk and 
 20.26  associated costs, the effect on the self-insurance market, and 
 20.27  any resulting or anticipated change in health plan design and 
 20.28  market share and availability of health carriers. 
 20.29     Sec. 17.  Minnesota Statutes 2000, section 62L.08, 
 20.30  subdivision 11, is amended to read: 
 20.31     Subd. 11.  [LOSS RATIO STANDARDS.] Notwithstanding section 
 20.32  62A.02, subdivision 3, relating to loss ratios, each policy or 
 20.33  contract form used with respect to a health benefit plan 
 20.34  offered, or issued in the small employer market, is subject, 
 20.35  beginning July 1, 1993, to section 62A.021.  The commissioner of 
 20.36  health has, with respect to carriers under that commissioner's 
 21.1   jurisdiction, all of the powers of the commissioner of commerce 
 21.2   under that section. 
 21.3      Sec. 18.  Minnesota Statutes 2000, section 62L.09, 
 21.4   subdivision 3, is amended to read: 
 21.5      Subd. 3.  [REENTRY PROHIBITION.] (a) Except as otherwise 
 21.6   provided in paragraph (b), a health carrier that ceases to do 
 21.7   business in the small employer market after July 1, 1993, is 
 21.8   prohibited from writing new business in the small employer 
 21.9   market in this state for a period of five years from the date of 
 21.10  notice to the commissioner.  This subdivision applies to any 
 21.11  health maintenance organization that ceases to do business in 
 21.12  the small employer market in one service area with respect to 
 21.13  that service area only.  Nothing in this subdivision prohibits 
 21.14  an affiliated health maintenance organization from continuing to 
 21.15  do business in the small employer market in that same service 
 21.16  area.  
 21.17     (b) The commissioner of commerce or the commissioner of 
 21.18  health may permit a health carrier that ceases to do business in 
 21.19  the small employer market in this state after July 1, 1993, to 
 21.20  begin writing new business in the small employer market if: 
 21.21     (1) since the carrier ceased doing business in the small 
 21.22  employer market, legislative action has occurred that has 
 21.23  significantly changed the effect on the carrier of its decision 
 21.24  to cease doing business in the small employer market; and 
 21.25     (2) the commissioner deems it appropriate. 
 21.26     Sec. 19.  Minnesota Statutes 2000, section 62L.10, 
 21.27  subdivision 4, is amended to read: 
 21.28     Subd. 4.  [REVIEW OF PREMIUM RATES.] The commissioner shall 
 21.29  regulate premium rates charged or proposed to be charged by all 
 21.30  health carriers in the small employer market under section 
 21.31  62A.02.  The commissioner of health has, with respect to 
 21.32  carriers under that commissioner's jurisdiction, all of the 
 21.33  powers of the commissioner of commerce under that section. 
 21.34     Sec. 20.  Minnesota Statutes 2000, section 62L.11, 
 21.35  subdivision 2, is amended to read: 
 21.36     Subd. 2.  [ENFORCEMENT POWERS.] The commissioners 
 22.1   commissioner of health and commerce each has for purposes of 
 22.2   this chapter all of each the commissioner's respective powers 
 22.3   under other chapters that are applicable to their respective the 
 22.4   commissioner's duties under this chapter.  
 22.5      Sec. 21.  Minnesota Statutes 2000, section 62M.11, is 
 22.6   amended to read: 
 22.7      62M.11 [COMPLAINTS TO COMMERCE OR HEALTH.] 
 22.8      Notwithstanding the provisions of sections 62M.01 to 
 22.9   62M.16, an enrollee may file a complaint regarding a 
 22.10  determination not to certify directly to the commissioner 
 22.11  responsible for regulating the utilization review 
 22.12  organization of commerce. 
 22.13     Sec. 22.  Minnesota Statutes 2000, section 62M.16, is 
 22.14  amended to read: 
 22.15     62M.16 [RULEMAKING.] 
 22.16     If it is determined that rules are reasonable and necessary 
 22.17  to accomplish the purpose of sections 62M.01 to 62M.16, the 
 22.18  rules must be adopted through a joint rulemaking process by both 
 22.19  the department commissioner of commerce and the department of 
 22.20  health. 
 22.21     Sec. 23.  Minnesota Statutes 2000, section 62N.02, 
 22.22  subdivision 4, is amended to read: 
 22.23     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 22.24  commissioner of health commerce or the commissioner's designated 
 22.25  representative. 
 22.26     Sec. 24.  Minnesota Statutes 2000, section 62N.26, is 
 22.27  amended to read: 
 22.28     62N.26 [SHARED SERVICES COOPERATIVE.] 
 22.29     The commissioner of health commerce shall establish, or 
 22.30  assist in establishing, a shared services cooperative organized 
 22.31  under chapter 308A to make available administrative and legal 
 22.32  services, technical assistance, provider contracting and billing 
 22.33  services, and other services to those community integrated 
 22.34  service networks that choose to participate in the cooperative.  
 22.35  The commissioner shall provide, to the extent funds are 
 22.36  appropriated, start-up loans sufficient to maintain the shared 
 23.1   services cooperative until its operations can be maintained by 
 23.2   fees and contributions.  The cooperative must not be staffed, 
 23.3   administered, or supervised by the commissioner of health 
 23.4   commerce.  The cooperative shall make use of existing resources 
 23.5   that are already available in the community, to the extent 
 23.6   possible. 
 23.7      Sec. 25.  Minnesota Statutes 2000, section 62Q.01, 
 23.8   subdivision 2, is amended to read: 
 23.9      Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 23.10  commissioner of health for purposes of regulating health 
 23.11  maintenance organizations, and community integrated service 
 23.12  networks, or the commissioner of commerce for purposes of 
 23.13  regulating all other health plan companies.  For all other 
 23.14  purposes, "commissioner" means the commissioner of health. 
 23.15     Sec. 26.  Minnesota Statutes 2000, section 62Q.03, 
 23.16  subdivision 5a, is amended to read: 
 23.17     Subd. 5a.  [PUBLIC PROGRAMS.] (a) A separate risk 
 23.18  adjustment system must be developed for state-run public 
 23.19  programs, including medical assistance, general assistance 
 23.20  medical care, and MinnesotaCare.  The system must be developed 
 23.21  in accordance with the general risk adjustment methodologies 
 23.22  described in this section, must include factors in addition to 
 23.23  age and sex adjustment, and may include additional demographic 
 23.24  factors, different targeted conditions, and/or different payment 
 23.25  amounts for conditions.  The risk adjustment system for public 
 23.26  programs must attempt to reflect the special needs related to 
 23.27  poverty, cultural, or language barriers and other needs of the 
 23.28  public program population. 
 23.29     (b) The commissioners of health and human services shall 
 23.30  jointly convene a public programs risk adjustment work group 
 23.31  responsible for advising the commissioners in the design of the 
 23.32  public programs risk adjustment system.  The public programs 
 23.33  risk adjustment work group is governed by section 15.059 for 
 23.34  purposes of membership terms, expiration, and removal of 
 23.35  members.  The work group shall meet at the discretion of the 
 23.36  commissioners of health and human services.  The commissioner of 
 24.1   health shall work with the risk adjustment association to ensure 
 24.2   coordination between the risk adjustment systems for the public 
 24.3   and private sectors.  The commissioner of human services shall 
 24.4   seek any needed federal approvals necessary for the inclusion of 
 24.5   the medical assistance program in the public programs risk 
 24.6   adjustment system.  
 24.7      (c) The public programs risk adjustment work group must be 
 24.8   representative of the persons served by publicly paid health 
 24.9   programs and providers and health plans that meet their needs.  
 24.10  To the greatest extent possible, the appointing authorities 
 24.11  shall attempt to select representatives that have historically 
 24.12  served a significant number of persons in publicly paid health 
 24.13  programs or the uninsured.  Membership of the work group shall 
 24.14  be as follows: 
 24.15     (1) one provider member appointed by the Minnesota Medical 
 24.16  Association; 
 24.17     (2) two provider members appointed by the Minnesota 
 24.18  Hospital Association, at least one of whom must represent a 
 24.19  major disproportionate share hospital; 
 24.20     (3) five members appointed by the Minnesota Council of 
 24.21  HMOs, one of whom must represent an HMO with fewer than 50,000 
 24.22  enrollees located outside the metropolitan area and one of whom 
 24.23  must represent an HMO with at least 50 percent of total 
 24.24  membership enrolled through a public program; 
 24.25     (4) two representatives of counties appointed by the 
 24.26  Association of Minnesota Counties; 
 24.27     (5) three representatives of organizations representing the 
 24.28  interests of families, children, childless adults, and elderly 
 24.29  persons served by the various publicly paid health programs 
 24.30  appointed by the governor; 
 24.31     (6) two representatives of persons with mental health, 
 24.32  developmental or physical disabilities, chemical dependency, or 
 24.33  chronic illness appointed by the governor; and 
 24.34     (7) three public members appointed by the governor, at 
 24.35  least one of whom must represent a community health board.  The 
 24.36  risk adjustment association may appoint a representative, if a 
 25.1   representative is not otherwise appointed by an appointing 
 25.2   authority. 
 25.3      (d) The commissioners of health and human services, with 
 25.4   the advice of the public programs risk adjustment work group, 
 25.5   shall develop a work plan and time frame and shall coordinate 
 25.6   their efforts with the private sector risk adjustment 
 25.7   association's activities and other state initiatives related to 
 25.8   public program managed care reimbursement. 
 25.9      (e) Before including risk adjustment in a contract for the 
 25.10  prepaid medical assistance program, the prepaid general 
 25.11  assistance medical care program, or the MinnesotaCare program, 
 25.12  the commissioner of human services shall provide to the 
 25.13  contractor an analysis of the expected impact on the contractor 
 25.14  of the implementation of risk adjustment.  This analysis may be 
 25.15  limited by the available data and resources, as determined by 
 25.16  the commissioner of human services, and shall not be binding on 
 25.17  future contract periods.  This paragraph shall not apply if the 
 25.18  contractor has not supplied information to the commissioner of 
 25.19  human services related to the risk adjustment analysis. 
 25.20     (f) The commissioner of human services shall report to the 
 25.21  public program risk adjustment work group on the methodology the 
 25.22  department will use for risk adjustment prior to implementation 
 25.23  of the risk adjustment payment methodology.  Upon completion of 
 25.24  the report to the work group, the commissioner of human services 
 25.25  shall phase in risk adjustment according to the following 
 25.26  schedule: 
 25.27     (1) for the first contract year, no more than ten percent 
 25.28  of reimbursements shall be risk adjusted; and 
 25.29     (2) for the second contract year, no more than 30 percent 
 25.30  of reimbursements shall be risk adjusted. 
 25.31     Sec. 27.  Minnesota Statutes 2000, section 62Q.075, 
 25.32  subdivision 4, is amended to read: 
 25.33     Subd. 4.  [REVIEW.] Upon receipt of the plan, the 
 25.34  appropriate commissioner shall provide a copy to the local 
 25.35  community health boards, and other relevant community 
 25.36  organizations within the managed care organization's service 
 26.1   area.  After reviewing the plan, these community groups may 
 26.2   submit written comments on the plan to either the commissioner 
 26.3   of health or commerce, as applicable, and may advise the 
 26.4   commissioner of the managed care organization's effectiveness in 
 26.5   assisting to achieve regional public health goals.  The plan may 
 26.6   be reviewed by the county boards, or city councils acting as a 
 26.7   local board of health in accordance with chapter 145A, within 
 26.8   the managed care organization's service area to determine 
 26.9   whether the plan is consistent with the goals and objectives of 
 26.10  the plans required under chapters 145A and 256E and whether the 
 26.11  plan meets the needs of the community.  The county board, or 
 26.12  applicable city council, may also review and make 
 26.13  recommendations on the availability and accessibility of 
 26.14  services provided by the managed care organization.  The county 
 26.15  board, or applicable city council, may submit written comments 
 26.16  to the appropriate commissioner, and may advise the commissioner 
 26.17  of the managed care organization's effectiveness in assisting to 
 26.18  meet the needs and goals as defined under the responsibilities 
 26.19  of chapters 145A and 256E.  The commissioner of health shall 
 26.20  develop recommendations to utilize the written comments 
 26.21  submitted as part of the licensure process to ensure local 
 26.22  public accountability.  These recommendations shall be reported 
 26.23  to the legislative commission on health care access by January 
 26.24  15, 1996.  Copies of these written comments must be provided to 
 26.25  the managed care organization.  The plan and any comments 
 26.26  submitted must be filed with the information clearinghouse to be 
 26.27  distributed to the public. 
 26.28     Sec. 28.  Minnesota Statutes 2000, section 62Q.106, is 
 26.29  amended to read: 
 26.30     62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER.] 
 26.31     A complainant may at any time submit a complaint to the 
 26.32  appropriate commissioner to investigate.  After investigating a 
 26.33  complaint, or reviewing a company's decision, the appropriate 
 26.34  commissioner may order a remedy as authorized under chapter 45, 
 26.35  60A, or 62D.  
 26.36     Sec. 29.  Minnesota Statutes 2000, section 62Q.22, 
 27.1   subdivision 2, is amended to read: 
 27.2      Subd. 2.  [REGISTRATION.] A community health clinic that 
 27.3   offers a prepaid option under this section must register on an 
 27.4   annual basis with the commissioner of health. 
 27.5      Sec. 30.  Minnesota Statutes 2000, section 62Q.22, 
 27.6   subdivision 6, is amended to read: 
 27.7      Subd. 6.  [INFORMATION TO BE PROVIDED.] (a) A community 
 27.8   health clinic must provide an individual or family who purchases 
 27.9   a prepaid option a clear and concise written statement that 
 27.10  includes the following information: 
 27.11     (1) the health care services that the prepaid option 
 27.12  covers; 
 27.13     (2) any exclusions or limitations on the health care 
 27.14  services offered, including any preexisting condition 
 27.15  limitations, cost-sharing arrangements, or prior authorization 
 27.16  requirements; 
 27.17     (3) where the health care services may be obtained; 
 27.18     (4) a description of the clinic's method for resolving 
 27.19  patient complaints, including a description of how a patient can 
 27.20  file a complaint with the department of health commissioner of 
 27.21  commerce; and 
 27.22     (5) a description of the conditions under which the prepaid 
 27.23  option may be canceled or terminated. 
 27.24     (b) The commissioner of health commerce must approve a copy 
 27.25  of the written statement before the community health clinic may 
 27.26  offer the prepaid option described in this section.  
 27.27     Sec. 31.  Minnesota Statutes 2000, section 62Q.22, 
 27.28  subdivision 7, is amended to read: 
 27.29     Subd. 7.  [COMPLAINT PROCESS.] (a) A community health 
 27.30  clinic that offers a prepaid option under this section must 
 27.31  establish a complaint resolution process.  As an alternative to 
 27.32  establishing its own process, a community health clinic may use 
 27.33  the complaint process of another organization.  
 27.34     (b) A community health clinic must make reasonable efforts 
 27.35  to resolve complaints and to inform complainants in writing of 
 27.36  the clinic's decision within 60 days of receiving the complaint. 
 28.1      (c) A community health clinic that offers a prepaid option 
 28.2   under this section must report all complaints that are not 
 28.3   resolved within 60 days to the commissioner of health. 
 28.4      Sec. 32.  Minnesota Statutes 2000, section 62Q.33, 
 28.5   subdivision 2, is amended to read: 
 28.6      Subd. 2.  [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 
 28.7   of health, in consultation with the state community health 
 28.8   services advisory committee and the commissioner of human 
 28.9   services, and representatives of local health departments, 
 28.10  county government, a municipal government acting as a local 
 28.11  board of health, area Indian health services, health care 
 28.12  providers, and citizens concerned about public health, shall 
 28.13  coordinate the process for defining implementation and financing 
 28.14  responsibilities of the local government core public health 
 28.15  functions.  The commissioner of health shall submit 
 28.16  recommendations and an initial and final report on local 
 28.17  government core public health functions according to the 
 28.18  timeline established in subdivision 5. 
 28.19     Sec. 33.  Minnesota Statutes 2000, section 62Q.49, 
 28.20  subdivision 2, is amended to read: 
 28.21     Subd. 2.  [DISCLOSURE REQUIRED.] (a) All health plans 
 28.22  included in subdivision 1 must clearly specify how the cost of 
 28.23  health care used to calculate any copayments, coinsurance, or 
 28.24  lifetime benefits will be affected by the arrangements described 
 28.25  in subdivision 1. 
 28.26     (b) Any summary or other marketing material used in 
 28.27  connection with marketing of a health plan that is subject to 
 28.28  this section must prominently disclose and clearly explain the 
 28.29  provisions required under paragraph (a), if the summary or other 
 28.30  marketing material refers to copayments, coinsurance, or maximum 
 28.31  lifetime benefits. 
 28.32     (c) A health plan that is subject to paragraph (a) must not 
 28.33  be used in this state if the commissioner of commerce or health, 
 28.34  as appropriate, has determined that it does not comply with this 
 28.35  section. 
 28.36     Sec. 34.  Minnesota Statutes 2000, section 62Q.51, 
 29.1   subdivision 3, is amended to read: 
 29.2      Subd. 3.  [RATE APPROVAL.] The premium rates and cost 
 29.3   sharing requirements for each option must be submitted to the 
 29.4   commissioner of health or the commissioner of commerce as 
 29.5   required by law.  A health plan that includes lower enrollee 
 29.6   cost sharing for services provided by network providers than for 
 29.7   services provided by out-of-network providers, or lower enrollee 
 29.8   cost sharing for services provided with prior authorization or 
 29.9   second opinion than for services provided without prior 
 29.10  authorization or second opinion, qualifies as a point-of-service 
 29.11  option. 
 29.12     Sec. 35.  Minnesota Statutes 2000, section 62Q.525, 
 29.13  subdivision 3, is amended to read: 
 29.14     Subd. 3.  [REQUIRED COVERAGE.] (a) Every type of coverage 
 29.15  included in subdivision 1 that provides coverage for drugs may 
 29.16  not exclude coverage of a drug for the treatment of cancer on 
 29.17  the ground that the drug has not been approved by the federal 
 29.18  Food and Drug Administration for the treatment of cancer if the 
 29.19  drug is recognized for treatment of cancer in one of the 
 29.20  standard reference compendia or in one article in the medical 
 29.21  literature, as defined in subdivision 2.  
 29.22     (b) Coverage of a drug required by this subdivision 
 29.23  includes coverage of medically necessary services directly 
 29.24  related to and required for appropriate administration of the 
 29.25  drug.  
 29.26     (c) Coverage required by this subdivision does not include 
 29.27  coverage of a drug not listed on the formulary of the coverage 
 29.28  included in subdivision 1. 
 29.29     (d) Coverage of a drug required under this subdivision must 
 29.30  not be subject to any copayment, coinsurance, deductible, or 
 29.31  other enrollee cost-sharing greater than the coverage included 
 29.32  in subdivision 1 applies to other drugs. 
 29.33     (e) The commissioner of commerce or health, as appropriate, 
 29.34  may direct a person that issues coverage included in subdivision 
 29.35  1 to make payments required by this section.  
 29.36     Sec. 36.  Minnesota Statutes 2000, section 62Q.69, 
 30.1   subdivision 2, is amended to read: 
 30.2      Subd. 2.  [PROCEDURES FOR FILING A COMPLAINT.] (a) A 
 30.3   complainant may submit a complaint to a health plan company 
 30.4   either by telephone or in writing.  If a complaint is submitted 
 30.5   orally and the resolution of the complaint, as determined by the 
 30.6   complainant, is partially or wholly adverse to the complainant, 
 30.7   or the oral complaint is not resolved to the satisfaction of the 
 30.8   complainant, by the health plan company within ten days of 
 30.9   receiving the complaint, the health plan company must inform the 
 30.10  complainant that the complaint may be submitted in writing.  The 
 30.11  health plan company must also offer to provide the complainant 
 30.12  with any assistance needed to submit a written complaint, 
 30.13  including an offer to complete the complaint form for a 
 30.14  complaint that was previously submitted orally and promptly mail 
 30.15  the completed form to the complainant for the complainant's 
 30.16  signature.  At the complainant's request, the health plan 
 30.17  company must provide the assistance requested by the 
 30.18  complainant.  The complaint form must include the following 
 30.19  information: 
 30.20     (1) the telephone number of the office of health care 
 30.21  consumer assistance, advocacy, and information, and the health 
 30.22  plan company member services or other departments or persons 
 30.23  equipped to advise complainants on complaint resolution; 
 30.24     (2) the address to which the form must be sent; 
 30.25     (3) a description of the health plan company's internal 
 30.26  complaint procedure and the applicable time limits; and 
 30.27     (4) the toll-free telephone number of either the 
 30.28  commissioner of health or commerce and notification that the 
 30.29  complainant has the right to submit the complaint at any time to 
 30.30  the appropriate commissioner for investigation. 
 30.31     (b) Upon receipt of a written complaint, the health plan 
 30.32  company must notify the complainant within ten business days 
 30.33  that the complaint was received, unless the complaint is 
 30.34  resolved to the satisfaction of the complainant within the ten 
 30.35  business days. 
 30.36     (c) Each health plan company must provide, in the member 
 31.1   handbook, subscriber contract, or certification of coverage, a 
 31.2   clear and concise description of how to submit a complaint and a 
 31.3   statement that, upon request, assistance in submitting a written 
 31.4   complaint is available from the health plan company. 
 31.5      Sec. 37.  Minnesota Statutes 2000, section 62Q.69, 
 31.6   subdivision 3, is amended to read: 
 31.7      Subd. 3.  [NOTIFICATION OF COMPLAINT DECISIONS.] (a) The 
 31.8   health plan company must notify the complainant in writing of 
 31.9   its decision and the reasons for it as soon as practical but in 
 31.10  no case later than 30 days after receipt of a written complaint. 
 31.11  If the health plan company cannot make a decision within 30 days 
 31.12  due to circumstances outside the control of the health plan 
 31.13  company, the health plan company may take up to 14 additional 
 31.14  days to notify the complainant of its decision.  If the health 
 31.15  plan company takes any additional days beyond the initial 30-day 
 31.16  period to make its decision, it must inform the complainant, in 
 31.17  advance, of the extension and the reasons for the extension.  
 31.18     (b) If the decision is partially or wholly adverse to the 
 31.19  complainant, the notification must inform the complainant of the 
 31.20  right to appeal the decision to the health plan company's 
 31.21  internal appeal process described in section 62Q.70 and the 
 31.22  procedure for initiating an appeal.  
 31.23     (c) The notification must also inform the complainant of 
 31.24  the right to submit the complaint at any time to either the 
 31.25  commissioner of health or commerce for investigation and the 
 31.26  toll-free telephone number of the appropriate commissioner. 
 31.27     Sec. 38.  Minnesota Statutes 2000, section 62Q.71, is 
 31.28  amended to read: 
 31.29     62Q.71 [NOTICE TO ENROLLEES.] 
 31.30     Each health plan company shall provide to enrollees a clear 
 31.31  and concise description of its complaint resolution procedure, 
 31.32  if applicable under section 62Q.68, subdivision 1, and the 
 31.33  procedure used for utilization review as defined under chapter 
 31.34  62M as part of the member handbook, subscriber contract, or 
 31.35  certificate of coverage.  If the health plan company does not 
 31.36  issue a member handbook, the health plan company may provide the 
 32.1   description in another written document.  The description must 
 32.2   specifically inform enrollees:  
 32.3      (1) how to submit a complaint to the health plan company; 
 32.4      (2) if the health plan includes utilization review 
 32.5   requirements, how to notify the utilization review organization 
 32.6   in a timely manner and how to obtain certification for health 
 32.7   care services; 
 32.8      (3) how to request an appeal either through the procedures 
 32.9   described in sections 62Q.69 and 62Q.70 or through the 
 32.10  procedures described in chapter 62M; 
 32.11     (4) of the right to file a complaint with either the 
 32.12  commissioner of health or commerce at any time during the 
 32.13  complaint and appeal process; 
 32.14     (5) of the toll-free telephone number of the appropriate 
 32.15  commissioner; and 
 32.16     (6) of the telephone number of the office of consumer 
 32.17  assistance, advocacy, and information; and 
 32.18     (7) of the right to obtain an external review under section 
 32.19  62Q.73 and a description of when and how that right may be 
 32.20  exercised. 
 32.21     Sec. 39.  Minnesota Statutes 2000, section 62Q.72, is 
 32.22  amended to read: 
 32.23     62Q.72 [RECORDKEEPING; REPORTING.] 
 32.24     Subdivision 1.  [RECORDKEEPING.] Each health plan company 
 32.25  shall maintain records of all enrollee complaints and their 
 32.26  resolutions.  These records shall be retained for five years and 
 32.27  shall be made available to the appropriate commissioner upon 
 32.28  request.  An insurance company licensed under chapter 60A may 
 32.29  instead comply with section 72A.20, subdivision 30. 
 32.30     Subd. 2.  [REPORTING.] Each health plan company shall 
 32.31  submit to the appropriate commissioner, as part of the company's 
 32.32  annual filing, data on the number and type of complaints that 
 32.33  are not resolved within 30 days, or 30 business days as provided 
 32.34  under section 72A.201, subdivision 4, clause (3), for insurance 
 32.35  companies licensed under chapter 60A.  The commissioner shall 
 32.36  also make this information available to the public upon request. 
 33.1      Sec. 40.  Minnesota Statutes 2000, section 62Q.73, 
 33.2   subdivision 3, is amended to read: 
 33.3      Subd. 3.  [RIGHT TO EXTERNAL REVIEW.] (a) Any enrollee or 
 33.4   anyone acting on behalf of an enrollee who has received an 
 33.5   adverse determination may submit a written request for an 
 33.6   external review of the adverse determination, if applicable 
 33.7   under section 62Q.68, subdivision 1, or 62M.06, to the 
 33.8   commissioner of health if the request involves a health plan 
 33.9   company regulated by that commissioner or to the commissioner of 
 33.10  commerce if the request involves a health plan company regulated 
 33.11  by that commissioner.  The written request must be accompanied 
 33.12  by a filing fee of $25.  The fee may be waived by the 
 33.13  commissioner of health or commerce in cases of financial 
 33.14  hardship. 
 33.15     (b) Nothing in this section requires the commissioner of 
 33.16  health or commerce to independently investigate an adverse 
 33.17  determination referred for independent external review. 
 33.18     (c) If an enrollee requests an external review, the health 
 33.19  plan company must participate in the external review.  The cost 
 33.20  of the external review in excess of the filing fee described in 
 33.21  paragraph (a) shall be borne by the health plan company.  
 33.22     Sec. 41.  Minnesota Statutes 2000, section 62Q.73, 
 33.23  subdivision 4, is amended to read: 
 33.24     Subd. 4.  [CONTRACT.] Pursuant to a request for proposal, 
 33.25  the commissioner of administration, in consultation with 
 33.26  the commissioners of health and commissioner of commerce, shall 
 33.27  contract with an organization or business entity to provide 
 33.28  independent external reviews of all adverse determinations 
 33.29  submitted for external review.  The contract shall ensure that 
 33.30  the fees for services rendered in connection with the reviews be 
 33.31  reasonable. 
 33.32     Sec. 42.  Minnesota Statutes 2000, section 62Q.73, 
 33.33  subdivision 5, is amended to read: 
 33.34     Subd. 5.  [CRITERIA.] (a) The request for proposal must 
 33.35  require that the entity demonstrate: 
 33.36     (1) no conflicts of interest in that it is not owned, a 
 34.1   subsidiary of, or affiliated with a health plan company or 
 34.2   utilization review organization; 
 34.3      (2) an expertise in dispute resolution; 
 34.4      (3) an expertise in health-related law; 
 34.5      (4) an ability to conduct reviews using a variety of 
 34.6   alternative dispute resolution procedures depending upon the 
 34.7   nature of the dispute; 
 34.8      (5) an ability to provide data to the commissioners of 
 34.9   health and commissioner of commerce on reviews conducted; and 
 34.10     (6) an ability to ensure confidentiality of medical records 
 34.11  and other enrollee information. 
 34.12     (b) The commissioner of administration shall take into 
 34.13  consideration, in awarding the contract according to subdivision 
 34.14  4, any national accreditation standards that pertain to an 
 34.15  external review entity. 
 34.16     Sec. 43.  Minnesota Statutes 2000, section 62Q.73, 
 34.17  subdivision 6, is amended to read: 
 34.18     Subd. 6.  [PROCESS.] (a) Upon receiving a request for an 
 34.19  external review, the external review entity must provide 
 34.20  immediate notice of the review to the enrollee and to the health 
 34.21  plan company.  Within ten business days of receiving notice of 
 34.22  the review, the health plan company and the enrollee must 
 34.23  provide the external review entity with any information that 
 34.24  they wish to be considered.  Each party shall be provided an 
 34.25  opportunity to present its version of the facts and arguments.  
 34.26  An enrollee may be assisted or represented by a person of the 
 34.27  enrollee's choice. 
 34.28     (b) As part of the external review process, any aspect of 
 34.29  an external review involving a medical determination must be 
 34.30  performed by a health care professional with expertise in the 
 34.31  medical issue being reviewed. 
 34.32     (c) An external review shall be made as soon as practical 
 34.33  but in no case later than 40 days after receiving the request 
 34.34  for an external review and must promptly send written notice of 
 34.35  the decision and the reasons for it to the enrollee, the health 
 34.36  plan company, and the commissioner who is responsible for 
 35.1   regulating the health plan company. 
 35.2      Sec. 44.  Minnesota Statutes 2000, section 62R.04, 
 35.3   subdivision 5, is amended to read: 
 35.4      Subd. 5.  [COMMISSIONER.] Unless otherwise specified, 
 35.5   "commissioner" means the commissioner of health for a health 
 35.6   care network cooperative licensed under chapter 62D or 62N and 
 35.7   the commissioner of commerce for a health care network 
 35.8   cooperative licensed under chapter 62C. 
 35.9      Sec. 45.  Minnesota Statutes 2000, section 62R.06, 
 35.10  subdivision 1, is amended to read: 
 35.11     Subdivision 1.  [PROVIDER CONTRACTS.] A health provider 
 35.12  cooperative and its licensed members may execute marketing and 
 35.13  service contracts requiring the provider members to provide some 
 35.14  or all of their health care services through the provider 
 35.15  cooperative to the enrollees, members, subscribers, or insureds, 
 35.16  of a health care network cooperative, community integrated 
 35.17  service network, nonprofit health service plan, health 
 35.18  maintenance organization, accident and health insurance company, 
 35.19  or any other purchaser, including the state of Minnesota and its 
 35.20  agencies, instruments, or units of local government.  Each 
 35.21  purchasing entity is authorized to execute contracts for the 
 35.22  purchase of health care services from a health provider 
 35.23  cooperative in accordance with this section.  A contract between 
 35.24  a provider cooperative and a purchaser may provide for payment 
 35.25  by the purchaser to the health provider cooperative on a 
 35.26  capitated or similar risk-sharing basis, by fee-for-service 
 35.27  arrangements, or by other financial arrangements authorized 
 35.28  under state law.  Each contract between a provider cooperative 
 35.29  and a purchaser shall be filed by the provider network 
 35.30  cooperative with the commissioner of health commerce and is 
 35.31  subject to the provisions of section 62D.19. 
 35.32     Sec. 46.  Minnesota Statutes 2000, section 62T.01, 
 35.33  subdivision 4, is amended to read: 
 35.34     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 35.35  commissioner of health commerce. 
 35.36     Sec. 47.  Minnesota Statutes 2000, section 256B.692, 
 36.1   subdivision 2, is amended to read: 
 36.2      Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH COMMERCE.] 
 36.3   (a) Notwithstanding chapters 62D and 62N, a county that elects 
 36.4   to purchase medical assistance and general assistance medical 
 36.5   care in return for a fixed sum without regard to the frequency 
 36.6   or extent of services furnished to any particular enrollee is 
 36.7   not required to obtain a certificate of authority under chapter 
 36.8   62D or 62N.  The county board of commissioners is the governing 
 36.9   body of a county-based purchasing program.  In a multicounty 
 36.10  arrangement, the governing body is a joint powers board 
 36.11  established under section 471.59.  
 36.12     (b) A county that elects to purchase medical assistance and 
 36.13  general assistance medical care services under this section must 
 36.14  satisfy the commissioner of health commerce that the 
 36.15  requirements for assurance of consumer protection, provider 
 36.16  protection, and fiscal solvency of chapter 62D, applicable to 
 36.17  health maintenance organizations, or chapter 62N, applicable to 
 36.18  community integrated service networks, will be met.  
 36.19     (c) A county must also assure the commissioner of health 
 36.20  commerce that the requirements of sections 62J.041; 62J.48; 
 36.21  62J.71 to 62J.73; 62M.01 to 62M.16; all applicable provisions of 
 36.22  chapter 62Q, including sections 62Q.07; 62Q.075; 62Q.1055; 
 36.23  62Q.106; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, 
 36.24  paragraph (c); 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 
 36.25  62Q.64; 62Q.68 to 62Q.72; and 72A.201 will be met.  
 36.26     (d) All enforcement and rulemaking powers available under 
 36.27  chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 
 36.28  commissioner of health commerce with respect to counties that 
 36.29  purchase medical assistance and general assistance medical care 
 36.30  services under this section.  
 36.31     (e) The commissioner, in consultation with county 
 36.32  government, shall develop administrative and financial reporting 
 36.33  requirements for county-based purchasing programs relating to 
 36.34  sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 
 36.35  62N.31, and other sections as necessary, that are specific to 
 36.36  county administrative, accounting, and reporting systems and 
 37.1   consistent with other statutory requirements of counties.  
 37.2      Sec. 48.  Minnesota Statutes 2000, section 256B.692, 
 37.3   subdivision 7, is amended to read: 
 37.4      Subd. 7.  [DISPUTE RESOLUTION.] In the event the 
 37.5   commissioner rejects a proposal under subdivision 6, the county 
 37.6   board may request the recommendation of a three-person mediation 
 37.7   panel.  The commissioner shall resolve all disputes after taking 
 37.8   into account the recommendations of the mediation panel.  The 
 37.9   panel shall be composed of one designee of the president of the 
 37.10  association of Minnesota counties, one designee of the 
 37.11  commissioner of human services, and one designee of the 
 37.12  commissioner of health commerce. 
 37.13     Sec. 49.  [TRANSFER OF REGULATORY AUTHORITY; CERTAIN 
 37.14  HEALTH-RELATED ORGANIZATIONS.] 
 37.15     (a) Regulatory authority for health maintenance 
 37.16  organizations operating under Minnesota Statutes, chapter 62D; 
 37.17  community integrated service networks, as defined in Minnesota 
 37.18  Statutes, section 62N.02, subdivision 4a; health care 
 37.19  cooperatives operating under Minnesota Statutes, chapter 62R; 
 37.20  and health care purchasing alliances and accountable provider 
 37.21  networks operating under Minnesota Statutes, chapter 62T, is 
 37.22  transferred from the commissioner of health to the commissioner 
 37.23  of commerce effective January 1, 2002. 
 37.24     (b) Minnesota Statutes, section 15.039, applies to the 
 37.25  transfer provided in paragraph (a). 
 37.26     Sec. 50.  [REVISOR INSTRUCTION.] 
 37.27     The revisor of statutes shall change the term "commissioner 
 37.28  of health" and similar references to "commissioner of commerce" 
 37.29  and change the term "department of health" and similar 
 37.30  references to "department of commerce" in Minnesota Statutes, 
 37.31  chapters 62D, but not section 62D.02, subdivision 12; 62E; and 
 37.32  62N.