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.04, subdivision 1a; 
  1.6             256B.055, subdivision 3a; 256B.056, subdivisions 1a, 
  1.7             4; 256B.057, subdivisions 2, 9, by adding a 
  1.8             subdivision; 256B.0625, subdivisions 13, 13a, 18a, 30, 
  1.9             34; 256B.0635, subdivisions 1, 2; 256B.69, subdivision 
  1.10            3a; 256B.75; 256J.31, subdivision 12; 256K.03, 
  1.11            subdivision 1; 256K.07; 256L.02, subdivision 4; 
  1.12            256L.04, subdivisions 2, 7; 256L.05, subdivision 5; 
  1.13            256L.06, subdivision 3; 256L.07, subdivisions 1, 3; 
  1.14            256L.12, by adding a subdivision; 256L.15, 
  1.15            subdivisions 1, 2; 256L.16; Laws 1999, chapter 245, 
  1.16            article 4, section 110; proposing coding for new law 
  1.17            in Minnesota Statutes, chapter 256B; repealing 
  1.18            Minnesota Statutes 2000, sections 256.01, subdivision 
  1.19            18; 256B.0635, subdivision 3; 256J.32, subdivision 7a; 
  1.20            256L.15, subdivision 3. 
  1.21  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.22     Section 1.  Minnesota Statutes 2000, section 256.01, 
  1.23  subdivision 2, is amended to read: 
  1.24     Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
  1.25  section 241.021, subdivision 2, the commissioner of human 
  1.26  services shall: 
  1.27     (1) Administer and supervise all forms of public assistance 
  1.28  provided for by state law and other welfare activities or 
  1.29  services as are vested in the commissioner.  Administration and 
  1.30  supervision of human services activities or services includes, 
  1.31  but is not limited to, assuring timely and accurate distribution 
  1.32  of benefits, completeness of service, and quality program 
  1.33  management.  In addition to administering and supervising human 
  2.1   services activities vested by law in the department, the 
  2.2   commissioner shall have the authority to: 
  2.3      (a) require county agency participation in training and 
  2.4   technical assistance programs to promote compliance with 
  2.5   statutes, rules, federal laws, regulations, and policies 
  2.6   governing human services; 
  2.7      (b) monitor, on an ongoing basis, the performance of county 
  2.8   agencies in the operation and administration of human services, 
  2.9   enforce compliance with statutes, rules, federal laws, 
  2.10  regulations, and policies governing welfare services and promote 
  2.11  excellence of administration and program operation; 
  2.12     (c) develop a quality control program or other monitoring 
  2.13  program to review county performance and accuracy of benefit 
  2.14  determinations; 
  2.15     (d) require county agencies to make an adjustment to the 
  2.16  public assistance benefits issued to any individual consistent 
  2.17  with federal law and regulation and state law and rule and to 
  2.18  issue or recover benefits as appropriate; 
  2.19     (e) delay or deny payment of all or part of the state and 
  2.20  federal share of benefits and administrative reimbursement 
  2.21  according to the procedures set forth in section 256.017; 
  2.22     (f) make contracts with and grants to public and private 
  2.23  agencies and organizations, both profit and nonprofit, and 
  2.24  individuals, using appropriated funds; and 
  2.25     (g) enter into contractual agreements with federally 
  2.26  recognized Indian tribes with a reservation in Minnesota to the 
  2.27  extent necessary for the tribe to operate a federally approved 
  2.28  family assistance program or any other program under the 
  2.29  supervision of the commissioner.  The commissioner shall consult 
  2.30  with the affected county or counties in the contractual 
  2.31  agreement negotiations, if the county or counties wish to be 
  2.32  included, in order to avoid the duplication of county and tribal 
  2.33  assistance program services.  The commissioner may establish 
  2.34  necessary accounts for the purposes of receiving and disbursing 
  2.35  funds as necessary for the operation of the programs. 
  2.36     (2) Inform county agencies, on a timely basis, of changes 
  3.1   in statute, rule, federal law, regulation, and policy necessary 
  3.2   to county agency administration of the programs. 
  3.3      (3) Administer and supervise all child welfare activities; 
  3.4   promote the enforcement of laws protecting handicapped, 
  3.5   dependent, neglected and delinquent children, and children born 
  3.6   to mothers who were not married to the children's fathers at the 
  3.7   times of the conception nor at the births of the children; 
  3.8   license and supervise child-caring and child-placing agencies 
  3.9   and institutions; supervise the care of children in boarding and 
  3.10  foster homes or in private institutions; and generally perform 
  3.11  all functions relating to the field of child welfare now vested 
  3.12  in the state board of control. 
  3.13     (4) Administer and supervise all noninstitutional service 
  3.14  to handicapped persons, including those who are visually 
  3.15  impaired, hearing impaired, or physically impaired or otherwise 
  3.16  handicapped.  The commissioner may provide and contract for the 
  3.17  care and treatment of qualified indigent children in facilities 
  3.18  other than those located and available at state hospitals when 
  3.19  it is not feasible to provide the service in state hospitals. 
  3.20     (5) Assist and actively cooperate with other departments, 
  3.21  agencies and institutions, local, state, and federal, by 
  3.22  performing services in conformity with the purposes of Laws 
  3.23  1939, chapter 431. 
  3.24     (6) Act as the agent of and cooperate with the federal 
  3.25  government in matters of mutual concern relative to and in 
  3.26  conformity with the provisions of Laws 1939, chapter 431, 
  3.27  including the administration of any federal funds granted to the 
  3.28  state to aid in the performance of any functions of the 
  3.29  commissioner as specified in Laws 1939, chapter 431, and 
  3.30  including the promulgation of rules making uniformly available 
  3.31  medical care benefits to all recipients of public assistance, at 
  3.32  such times as the federal government increases its participation 
  3.33  in assistance expenditures for medical care to recipients of 
  3.34  public assistance, the cost thereof to be borne in the same 
  3.35  proportion as are grants of aid to said recipients. 
  3.36     (7) Establish and maintain any administrative units 
  4.1   reasonably necessary for the performance of administrative 
  4.2   functions common to all divisions of the department. 
  4.3      (8) Act as designated guardian of both the estate and the 
  4.4   person of all the wards of the state of Minnesota, whether by 
  4.5   operation of law or by an order of court, without any further 
  4.6   act or proceeding whatever, except as to persons committed as 
  4.7   mentally retarded.  For children under the guardianship of the 
  4.8   commissioner whose interests would be best served by adoptive 
  4.9   placement, the commissioner may contract with a licensed 
  4.10  child-placing agency to provide adoption services.  A contract 
  4.11  with a licensed child-placing agency must be designed to 
  4.12  supplement existing county efforts and may not replace existing 
  4.13  county programs, unless the replacement is agreed to by the 
  4.14  county board and the appropriate exclusive bargaining 
  4.15  representative or the commissioner has evidence that child 
  4.16  placements of the county continue to be substantially below that 
  4.17  of other counties.  Funds encumbered and obligated under an 
  4.18  agreement for a specific child shall remain available until the 
  4.19  terms of the agreement are fulfilled or the agreement is 
  4.20  terminated. 
  4.21     (9) Act as coordinating referral and informational center 
  4.22  on requests for service for newly arrived immigrants coming to 
  4.23  Minnesota. 
  4.24     (10) The specific enumeration of powers and duties as 
  4.25  hereinabove set forth shall in no way be construed to be a 
  4.26  limitation upon the general transfer of powers herein contained. 
  4.27     (11) Establish county, regional, or statewide schedules of 
  4.28  maximum fees and charges which may be paid by county agencies 
  4.29  for medical, dental, surgical, hospital, nursing and nursing 
  4.30  home care and medicine and medical supplies under all programs 
  4.31  of medical care provided by the state and for congregate living 
  4.32  care under the income maintenance programs. 
  4.33     (12) Have the authority to conduct and administer 
  4.34  experimental projects to test methods and procedures of 
  4.35  administering assistance and services to recipients or potential 
  4.36  recipients of public welfare.  To carry out such experimental 
  5.1   projects, it is further provided that the commissioner of human 
  5.2   services is authorized to waive the enforcement of existing 
  5.3   specific statutory program requirements, rules, and standards in 
  5.4   one or more counties.  The order establishing the waiver shall 
  5.5   provide alternative methods and procedures of administration, 
  5.6   shall not be in conflict with the basic purposes, coverage, or 
  5.7   benefits provided by law, and in no event shall the duration of 
  5.8   a project exceed four years.  It is further provided that no 
  5.9   order establishing an experimental project as authorized by the 
  5.10  provisions of this section shall become effective until the 
  5.11  following conditions have been met: 
  5.12     (a) The secretary of health and human services of the 
  5.13  United States has agreed, for the same project, to waive state 
  5.14  plan requirements relative to statewide uniformity. 
  5.15     (b) A comprehensive plan, including estimated project 
  5.16  costs, shall be approved by the legislative advisory commission 
  5.17  and filed with the commissioner of administration.  
  5.18     (13) According to federal requirements, establish 
  5.19  procedures to be followed by local welfare boards in creating 
  5.20  citizen advisory committees, including procedures for selection 
  5.21  of committee members. 
  5.22     (14) Allocate federal fiscal disallowances or sanctions 
  5.23  which are based on quality control error rates for the aid to 
  5.24  families with dependent children program formerly codified in 
  5.25  sections 256.72 to 256.87, medical assistance, or food stamp 
  5.26  program in the following manner:  
  5.27     (a) One-half of the total amount of the disallowance shall 
  5.28  be borne by the county boards responsible for administering the 
  5.29  programs.  For the medical assistance and the AFDC program 
  5.30  formerly codified in sections 256.72 to 256.87, disallowances 
  5.31  shall be shared by each county board in the same proportion as 
  5.32  that county's expenditures for the sanctioned program are to the 
  5.33  total of all counties' expenditures for the AFDC program 
  5.34  formerly codified in sections 256.72 to 256.87, and medical 
  5.35  assistance programs.  For the food stamp program, sanctions 
  5.36  shall be shared by each county board, with 50 percent of the 
  6.1   sanction being distributed to each county in the same proportion 
  6.2   as that county's administrative costs for food stamps are to the 
  6.3   total of all food stamp administrative costs for all counties, 
  6.4   and 50 percent of the sanctions being distributed to each county 
  6.5   in the same proportion as that county's value of food stamp 
  6.6   benefits issued are to the total of all benefits issued for all 
  6.7   counties.  Each county shall pay its share of the disallowance 
  6.8   to the state of Minnesota.  When a county fails to pay the 
  6.9   amount due hereunder, the commissioner may deduct the amount 
  6.10  from reimbursement otherwise due the county, or the attorney 
  6.11  general, upon the request of the commissioner, may institute 
  6.12  civil action to recover the amount due. 
  6.13     (b) Notwithstanding the provisions of paragraph (a), if the 
  6.14  disallowance results from knowing noncompliance by one or more 
  6.15  counties with a specific program instruction, and that knowing 
  6.16  noncompliance is a matter of official county board record, the 
  6.17  commissioner may require payment or recover from the county or 
  6.18  counties, in the manner prescribed in paragraph (a), an amount 
  6.19  equal to the portion of the total disallowance which resulted 
  6.20  from the noncompliance, and may distribute the balance of the 
  6.21  disallowance according to paragraph (a).  
  6.22     (15) Develop and implement special projects that maximize 
  6.23  reimbursements and result in the recovery of money to the 
  6.24  state.  For the purpose of recovering state money, the 
  6.25  commissioner may enter into contracts with third parties.  Any 
  6.26  recoveries that result from projects or contracts entered into 
  6.27  under this paragraph shall be deposited in the state treasury 
  6.28  and credited to a special account until the balance in the 
  6.29  account reaches $1,000,000.  When the balance in the account 
  6.30  exceeds $1,000,000, the excess shall be transferred and credited 
  6.31  to the general fund.  All money in the account is appropriated 
  6.32  to the commissioner for the purposes of this paragraph. 
  6.33     (16) Have the authority to make direct payments to 
  6.34  facilities providing shelter to women and their children 
  6.35  according to section 256D.05, subdivision 3.  Upon the written 
  6.36  request of a shelter facility that has been denied payments 
  7.1   under section 256D.05, subdivision 3, the commissioner shall 
  7.2   review all relevant evidence and make a determination within 30 
  7.3   days of the request for review regarding issuance of direct 
  7.4   payments to the shelter facility.  Failure to act within 30 days 
  7.5   shall be considered a determination not to issue direct payments.
  7.6      (17) Have the authority to establish and enforce the 
  7.7   following county reporting requirements:  
  7.8      (a) The commissioner shall establish fiscal and statistical 
  7.9   reporting requirements necessary to account for the expenditure 
  7.10  of funds allocated to counties for human services programs.  
  7.11  When establishing financial and statistical reporting 
  7.12  requirements, the commissioner shall evaluate all reports, in 
  7.13  consultation with the counties, to determine if the reports can 
  7.14  be simplified or the number of reports can be reduced. 
  7.15     (b) The county board shall submit monthly or quarterly 
  7.16  reports to the department as required by the commissioner.  
  7.17  Monthly reports are due no later than 15 working days after the 
  7.18  end of the month.  Quarterly reports are due no later than 30 
  7.19  calendar days after the end of the quarter, unless the 
  7.20  commissioner determines that the deadline must be shortened to 
  7.21  20 calendar days to avoid jeopardizing compliance with federal 
  7.22  deadlines or risking a loss of federal funding.  Only reports 
  7.23  that are complete, legible, and in the required format shall be 
  7.24  accepted by the commissioner.  
  7.25     (c) If the required reports are not received by the 
  7.26  deadlines established in clause (b), the commissioner may delay 
  7.27  payments and withhold funds from the county board until the next 
  7.28  reporting period.  When the report is needed to account for the 
  7.29  use of federal funds and the late report results in a reduction 
  7.30  in federal funding, the commissioner shall withhold from the 
  7.31  county boards with late reports an amount equal to the reduction 
  7.32  in federal funding until full federal funding is received.  
  7.33     (d) A county board that submits reports that are late, 
  7.34  illegible, incomplete, or not in the required format for two out 
  7.35  of three consecutive reporting periods is considered 
  7.36  noncompliant.  When a county board is found to be noncompliant, 
  8.1   the commissioner shall notify the county board of the reason the 
  8.2   county board is considered noncompliant and request that the 
  8.3   county board develop a corrective action plan stating how the 
  8.4   county board plans to correct the problem.  The corrective 
  8.5   action plan must be submitted to the commissioner within 45 days 
  8.6   after the date the county board received notice of noncompliance.
  8.7      (e) The final deadline for fiscal reports or amendments to 
  8.8   fiscal reports is one year after the date the report was 
  8.9   originally due.  If the commissioner does not receive a report 
  8.10  by the final deadline, the county board forfeits the funding 
  8.11  associated with the report for that reporting period and the 
  8.12  county board must repay any funds associated with the report 
  8.13  received for that reporting period. 
  8.14     (f) The commissioner may not delay payments, withhold 
  8.15  funds, or require repayment under paragraph (c) or (e) if the 
  8.16  county demonstrates that the commissioner failed to provide 
  8.17  appropriate forms, guidelines, and technical assistance to 
  8.18  enable the county to comply with the requirements.  If the 
  8.19  county board disagrees with an action taken by the commissioner 
  8.20  under paragraph (c) or (e), the county board may appeal the 
  8.21  action according to sections 14.57 to 14.69. 
  8.22     (g) Counties subject to withholding of funds under 
  8.23  paragraph (c) or forfeiture or repayment of funds under 
  8.24  paragraph (e) shall not reduce or withhold benefits or services 
  8.25  to clients to cover costs incurred due to actions taken by the 
  8.26  commissioner under paragraph (c) or (e). 
  8.27     (18) Allocate federal fiscal disallowances or sanctions for 
  8.28  audit exceptions when federal fiscal disallowances or sanctions 
  8.29  are based on a statewide random sample for the foster care 
  8.30  program under title IV-E of the Social Security Act, United 
  8.31  States Code, title 42, in direct proportion to each county's 
  8.32  title IV-E foster care maintenance claim for that period. 
  8.33     (19) Be responsible for ensuring the detection, prevention, 
  8.34  investigation, and resolution of fraudulent activities or 
  8.35  behavior by applicants, recipients, and other participants in 
  8.36  the human services programs administered by the department. 
  9.1      (20) Require county agencies to identify overpayments, 
  9.2   establish claims, and utilize all available and cost-beneficial 
  9.3   methodologies to collect and recover these overpayments in the 
  9.4   human services programs administered by the department. 
  9.5      (21) Have the authority to administer a drug rebate program 
  9.6   for drugs purchased pursuant to the prescription drug program 
  9.7   established under section 256.955 after the beneficiary's 
  9.8   satisfaction of any deductible established in the program.  The 
  9.9   commissioner shall require a rebate agreement from all 
  9.10  manufacturers of covered drugs as defined in section 256B.0625, 
  9.11  subdivision 13.  Rebate agreements for prescription drugs 
  9.12  delivered on or after July 1, 2002, must include rebates for 
  9.13  individuals covered under the prescription drug program who are 
  9.14  under 65 years of age.  For each drug, the amount of the rebate 
  9.15  shall be equal to the basic rebate as defined for purposes of 
  9.16  the federal rebate program in United States Code, title 42, 
  9.17  section 1396r-8(c)(1).  This basic rebate shall be applied to 
  9.18  single-source and multiple-source drugs.  The manufacturers must 
  9.19  provide full payment within 30 days of receipt of the state 
  9.20  invoice for the rebate within the terms and conditions used for 
  9.21  the federal rebate program established pursuant to section 1927 
  9.22  of title XIX of the Social Security Act.  The manufacturers must 
  9.23  provide the commissioner with any information necessary to 
  9.24  verify the rebate determined per drug.  The rebate program shall 
  9.25  utilize the terms and conditions used for the federal rebate 
  9.26  program established pursuant to section 1927 of title XIX of the 
  9.27  Social Security Act. 
  9.28     (21a) Have the authority to administer the federal drug 
  9.29  rebate program for drugs purchased under the medical assistance 
  9.30  program as allowed by section 1927 of title XIX of the Social 
  9.31  Security Act and according to the terms and conditions of 
  9.32  section 1927.  Rebates shall be collected for all drugs that 
  9.33  have been dispensed or administered in an outpatient setting and 
  9.34  that are from manufacturers who have signed a rebate agreement 
  9.35  with the United States Department of Health and Human Services. 
  9.36     (22) Operate the department's communication systems account 
 10.1   established in Laws 1993, First Special Session chapter 1, 
 10.2   article 1, section 2, subdivision 2, to manage shared 
 10.3   communication costs necessary for the operation of the programs 
 10.4   the commissioner supervises.  A communications account may also 
 10.5   be established for each regional treatment center which operates 
 10.6   communications systems.  Each account must be used to manage 
 10.7   shared communication costs necessary for the operations of the 
 10.8   programs the commissioner supervises.  The commissioner may 
 10.9   distribute the costs of operating and maintaining communication 
 10.10  systems to participants in a manner that reflects actual usage. 
 10.11  Costs may include acquisition, licensing, insurance, 
 10.12  maintenance, repair, staff time and other costs as determined by 
 10.13  the commissioner.  Nonprofit organizations and state, county, 
 10.14  and local government agencies involved in the operation of 
 10.15  programs the commissioner supervises may participate in the use 
 10.16  of the department's communications technology and share in the 
 10.17  cost of operation.  The commissioner may accept on behalf of the 
 10.18  state any gift, bequest, devise or personal property of any 
 10.19  kind, or money tendered to the state for any lawful purpose 
 10.20  pertaining to the communication activities of the department.  
 10.21  Any money received for this purpose must be deposited in the 
 10.22  department's communication systems accounts.  Money collected by 
 10.23  the commissioner for the use of communication systems must be 
 10.24  deposited in the state communication systems account and is 
 10.25  appropriated to the commissioner for purposes of this section. 
 10.26     (23) Receive any federal matching money that is made 
 10.27  available through the medical assistance program for the 
 10.28  consumer satisfaction survey.  Any federal money received for 
 10.29  the survey is appropriated to the commissioner for this 
 10.30  purpose.  The commissioner may expend the federal money received 
 10.31  for the consumer satisfaction survey in either year of the 
 10.32  biennium. 
 10.33     (24) Incorporate cost reimbursement claims from First Call 
 10.34  Minnesota into the federal cost reimbursement claiming processes 
 10.35  of the department according to federal law, rule, and 
 10.36  regulations.  Any reimbursement received is appropriated to the 
 11.1   commissioner and shall be disbursed to First Call Minnesota 
 11.2   according to normal department payment schedules. 
 11.3      (25) Develop recommended standards for foster care homes 
 11.4   that address the components of specialized therapeutic services 
 11.5   to be provided by foster care homes with those services. 
 11.6      Sec. 2.  Minnesota Statutes 2000, section 256.9657, 
 11.7   subdivision 2, is amended to read: 
 11.8      Subd. 2.  [HOSPITAL SURCHARGE.] (a) Effective October 1, 
 11.9   1992, each Minnesota hospital except facilities of the federal 
 11.10  Indian Health Service and regional treatment centers shall pay 
 11.11  to the medical assistance account a surcharge equal to 1.4 
 11.12  percent of net patient revenues excluding net Medicare revenues 
 11.13  reported by that provider to the health care cost information 
 11.14  system according to the schedule in subdivision 4.  
 11.15     (b) Effective July 1, 1994, the surcharge under paragraph 
 11.16  (a) is increased to 1.56 percent. 
 11.17     (c) Notwithstanding the Medicare cost finding and allowable 
 11.18  cost principles, the hospital surcharge is not an allowable cost 
 11.19  for purposes of rate setting under sections 256.9685 to 256.9695.
 11.20     Sec. 3.  Minnesota Statutes 2000, section 256B.04, 
 11.21  subdivision 1a, is amended to read: 
 11.22     Subd. 1a.  [ADMINISTRATIVE SERVICES.] Notwithstanding 
 11.23  subdivision 1, the commissioner may contract with federally 
 11.24  recognized Indian tribes with a reservation in Minnesota for the 
 11.25  provision of early and periodic screening, diagnosis, and 
 11.26  treatment administrative services for American Indian children, 
 11.27  in accordance with the Code of Federal Regulations, title 42, 
 11.28  section 441, subpart B, and Minnesota Rules, part 9505.1693, 
 11.29  when the tribe chooses to provide such services.  For purposes 
 11.30  of this subdivision, "American Indian" has the meaning given to 
 11.31  persons to whom services will be provided in the Code of Federal 
 11.32  Regulations, title 42, section 36.12.  Notwithstanding Minnesota 
 11.33  Rules, part 9505.1748, subpart 1, the commissioner, the local 
 11.34  agency, and the tribe may contract with any entity for the 
 11.35  provision of early and periodic screening, diagnosis, and 
 11.36  treatment administrative services. 
 12.1      Subd. 1a 1b.  [COMPREHENSIVE HEALTH SERVICES SYSTEM.] The 
 12.2   commissioner shall carry out the duties in this section with the 
 12.3   participation of the boards of county commissioners, and with 
 12.4   full consideration for the interests of counties, to plan and 
 12.5   implement a unified, accountable, comprehensive health services 
 12.6   system that: 
 12.7      (1) promotes accessible and quality health care for all 
 12.8   Minnesotans; 
 12.9      (2) assures provision of adequate health care within 
 12.10  limited state and county resources; 
 12.11     (3) avoids shifting funding burdens to county tax 
 12.12  resources; 
 12.13     (4) provides statewide eligibility, benefit, and service 
 12.14  expectations; 
 12.15     (5) manages care, develops risk management strategies, and 
 12.16  contains cost in all health and human services; and 
 12.17     (6) supports effective implementation of publicly funded 
 12.18  health and human services for all areas of the state. 
 12.19     Sec. 4.  Minnesota Statutes 2000, section 256B.055, 
 12.20  subdivision 3a, is amended to read: 
 12.21     Subd. 3a.  [MFIP-S FAMILIES; FAMILIES ELIGIBLE UNDER PRIOR 
 12.22  AFDC RULES.] (a) Beginning January 1, 1998, or on the date that 
 12.23  MFIP-S is implemented in counties, medical assistance may be 
 12.24  paid for a person receiving public assistance under the MFIP-S 
 12.25  program.  Beginning July 1, 2002, medical assistance may be paid 
 12.26  for a person who would have been eligible, but for excess income 
 12.27  or assets, under the state's AFDC plan in effect as of July 16, 
 12.28  1996, with the base AFDC standard increased according to section 
 12.29  256B.056, subdivision 4.  
 12.30     (b) Beginning January 1, 1998, July 1, 2002, medical 
 12.31  assistance may be paid for a person who would have been eligible 
 12.32  for public assistance under the income and resource assets 
 12.33  standards, or who would have been eligible but for excess income 
 12.34  or assets, under the state's AFDC plan in effect as of July 16, 
 12.35  1996, as required by the Personal Responsibility and Work 
 12.36  Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
 13.1   Number 104-193 with the base AFDC rate increased according to 
 13.2   section 256B.056, subdivision 4. 
 13.3      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 13.4      Sec. 5.  Minnesota Statutes 2000, section 256B.056, 
 13.5   subdivision 1a, is amended to read: 
 13.6      Subd. 1a.  [INCOME AND ASSETS GENERALLY.] Unless 
 13.7   specifically required by state law or rule or federal law or 
 13.8   regulation, the methodologies used in counting income and assets 
 13.9   to determine eligibility for medical assistance for persons 
 13.10  whose eligibility category is based on blindness, disability, or 
 13.11  age of 65 or more years, the methodologies for the supplemental 
 13.12  security income program shall be used.  For children eligible 
 13.13  for home and community-based waiver services whose eligibility 
 13.14  for medical assistance is determined without regard to parental 
 13.15  income, or for children eligible under section 256B.055, 
 13.16  subdivision 12, child support payments, including any payments 
 13.17  made by an obligor in satisfaction of or in addition to a 
 13.18  temporary or permanent order for child support, and social 
 13.19  security payments, are not counted as income.  For families and 
 13.20  children, which includes all other eligibility categories, the 
 13.21  methodologies under the state's AFDC plan in effect as of July 
 13.22  16, 1996, as required by the Personal Responsibility and Work 
 13.23  Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
 13.24  Number 104-193, shall be used.  Effective upon federal approval, 
 13.25  in-kind contributions to, and payments made on behalf of, a 
 13.26  recipient, by an obligor, in satisfaction of or in addition to a 
 13.27  temporary or permanent order for child support or maintenance, 
 13.28  shall be considered income to the recipient.  For these 
 13.29  purposes, a "methodology" does not include an asset or income 
 13.30  standard, or accounting method, or method of determining 
 13.31  effective dates. 
 13.32     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001, 
 13.33  or the date upon which federal rules published in the Federal 
 13.34  Register at 66FR2316 become effective, whichever is later. 
 13.35     Sec. 6.  Minnesota Statutes 2000, section 256B.056, 
 13.36  subdivision 4, is amended to read: 
 14.1      Subd. 4.  [INCOME.] (a) To be eligible for medical 
 14.2   assistance, a person eligible under section 256B.055, 
 14.3   subdivision 7, not receiving supplemental security income 
 14.4   program payments 7a, or 12, and may have income up to 100 
 14.5   percent of the federal poverty guidelines for the family size 
 14.6   effective on April 1 of each year and increases in benefits 
 14.7   under title II of the Social Security Act, which shall not be 
 14.8   counted as income for purposes of this subdivision until the 
 14.9   first day of the second full month following publication of the 
 14.10  change in the federal poverty guidelines.  
 14.11     (b) To be eligible for medical assistance, families and 
 14.12  children may have an income up to 133-1/3 percent of the AFDC 
 14.13  income standard in effect under the July 16, 1996, AFDC state 
 14.14  plan.  Effective July 1, 2000, the base AFDC standard in effect 
 14.15  on July 16, 1996, shall be increased by three percent. Effective 
 14.16  January 1, 2000, and each successive January, recipients of 
 14.17  supplemental security income may have an income up to the 
 14.18  supplemental security income standard in effect on that date.  
 14.19     (c) In computing income to determine eligibility of persons 
 14.20  under paragraph (a) or (b) who are not residents of long-term 
 14.21  care facilities, the commissioner shall disregard increases in 
 14.22  income as required by Public Law Numbers 94-566, section 503; 
 14.23  99-272; and 99-509.  Veterans aid and attendance benefits and 
 14.24  Veterans Administration unusual medical expense payments are 
 14.25  considered income to the recipient. 
 14.26     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001, 
 14.27  or the date upon which federal rules published in the Federal 
 14.28  Register at 66FR2316 become effective, whichever is later. 
 14.29     Sec. 7.  Minnesota Statutes 2000, section 256B.057, 
 14.30  subdivision 2, is amended to read: 
 14.31     Subd. 2.  [CHILDREN.] A child one two through five 18 years 
 14.32  of age in a family whose countable income is less no greater 
 14.33  than 133 185 percent of the federal poverty guidelines for the 
 14.34  same family size, is eligible for medical assistance.  A child 
 14.35  six through 18 years of age, who was born after September 30, 
 14.36  1983, in a family whose countable income is less than 100 
 15.1   percent of the federal poverty guidelines for the same family 
 15.2   size is eligible for medical assistance.  Countable income means 
 15.3   gross income minus child support paid according to a court order 
 15.4   and dependent care costs deducted from income under the state's 
 15.5   AFDC plan in effect as of July 16, 1996.  
 15.6      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 15.7      Sec. 8.  Minnesota Statutes 2000, section 256B.057, 
 15.8   subdivision 9, is amended to read: 
 15.9      Subd. 9.  [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 
 15.10  assistance may be paid for a person who is employed and who: 
 15.11     (1) meets the definition of disabled under the supplemental 
 15.12  security income program; 
 15.13     (2) is at least 16 but less than 65 years of age; 
 15.14     (3) meets the asset limits in paragraph (b); and 
 15.15     (4) pays a premium, if required, under paragraph (c).  
 15.16  Any spousal income or assets shall be disregarded for purposes 
 15.17  of eligibility and premium determinations. 
 15.18     (b) For purposes of determining eligibility under this 
 15.19  subdivision, a person's assets must not exceed $20,000, 
 15.20  excluding: 
 15.21     (1) all assets excluded under section 256B.056; 
 15.22     (2) retirement accounts, including individual accounts, 
 15.23  401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 
 15.24     (3) medical expense accounts set up through the person's 
 15.25  employer. 
 15.26     (c) A person whose earned and unearned income is greater 
 15.27  than 200 between 100 and 150 percent of federal poverty 
 15.28  guidelines for the applicable family size must pay a premium of 
 15.29  $10 per month to be eligible for medical assistance.  The 
 15.30  premium shall be equal to ten percent of the person's gross 
 15.31  earned and unearned income above 200 percent of federal poverty 
 15.32  guidelines for the applicable family size up to the cost of 
 15.33  coverage A person whose earned and unearned income is greater 
 15.34  than 150 percent of the federal poverty guidelines for the 
 15.35  applicable family size must pay a monthly premium on a sliding 
 15.36  scale basis beginning with a 1.5 percent of income up to 7.5 
 16.1   percent of income at 300 percent of the federal poverty 
 16.2   guidelines. 
 16.3      (d) A person's eligibility and premium shall be determined 
 16.4   by the local county agency.  Premiums must be paid to the 
 16.5   commissioner.  All premiums are dedicated to the commissioner. 
 16.6      (e) Any required premium shall be determined at application 
 16.7   and redetermined annually at recertification or when a change in 
 16.8   income or family size occurs. 
 16.9      (f) Premium payment is due upon notification from the 
 16.10  commissioner of the premium amount required.  Premiums may be 
 16.11  paid in installments at the discretion of the commissioner. 
 16.12     (g) Nonpayment of the premium shall result in denial or 
 16.13  termination of medical assistance unless the person demonstrates 
 16.14  good cause for nonpayment.  Good cause exists if the 
 16.15  requirements specified in Minnesota Rules, part 9506.0040, 
 16.16  subpart 7, items B to D, are met.  Nonpayment shall include 
 16.17  payment with a returned, refused, or dishonored instrument.  The 
 16.18  commissioner may require a guaranteed form of payment as the 
 16.19  only means to replace a returned, refused, or dishonored 
 16.20  instrument. 
 16.21     <b>[EFFECTIVE DATE.]</b> This section is effective September 1, 
 16.22  2001. 
 16.23     Sec. 9.  Minnesota Statutes 2000, section 256B.057, is 
 16.24  amended by adding a subdivision to read: 
 16.25     Subd. 10.  [AGED, BLIND, OR DISABLED.] To be eligible for 
 16.26  medical assistance, a person eligible under sections 256B.055, 
 16.27  subdivision 7, 7a, or 12, and 256B.056, subdivision 1a, may have 
 16.28  an income up to 100 percent of the federal poverty guidelines. 
 16.29     In computing income to determine eligibility of persons who 
 16.30  are not residents of long-term care facilities, the commissioner 
 16.31  shall disregard increases in income as required by Public Law 
 16.32  Numbers 94-566, section 503; 99-272; and 99-509.  Veterans aid 
 16.33  and attendance benefits and Veterans Administration unusual 
 16.34  medical expense payments are considered income to the recipient. 
 16.35     Sec. 10.  Minnesota Statutes 2000, section 256B.0625, 
 16.36  subdivision 13, is amended to read: 
 17.1      Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
 17.2   except for fertility drugs when specifically used to enhance 
 17.3   fertility, if prescribed by a licensed practitioner and 
 17.4   dispensed by a licensed pharmacist, by a physician enrolled in 
 17.5   the medical assistance program as a dispensing physician, or by 
 17.6   a physician or a nurse practitioner employed by or under 
 17.7   contract with a community health board as defined in section 
 17.8   145A.02, subdivision 5, for the purposes of communicable disease 
 17.9   control.  The commissioner, after receiving recommendations from 
 17.10  professional medical associations and professional pharmacist 
 17.11  associations, shall designate a formulary committee to advise 
 17.12  the commissioner on the names of drugs for which payment is 
 17.13  made, recommend a system for reimbursing providers on a set fee 
 17.14  or charge basis rather than the present system, and develop 
 17.15  methods encouraging use of generic drugs when they are less 
 17.16  expensive and equally effective as trademark drugs.  The 
 17.17  formulary committee shall consist of nine members, four of whom 
 17.18  shall be physicians who are not employed by the department of 
 17.19  human services, and a majority of whose practice is for persons 
 17.20  paying privately or through health insurance, three of whom 
 17.21  shall be pharmacists who are not employed by the department of 
 17.22  human services, and a majority of whose practice is for persons 
 17.23  paying privately or through health insurance, a consumer 
 17.24  representative, and a nursing home representative.  Committee 
 17.25  members shall serve three-year terms and shall serve without 
 17.26  compensation.  Members may be reappointed once.  
 17.27     (b) The commissioner shall establish a drug formulary.  Its 
 17.28  establishment and publication shall not be subject to the 
 17.29  requirements of the Administrative Procedure Act, but the 
 17.30  formulary committee shall review and comment on the formulary 
 17.31  contents.  The formulary committee shall review and recommend 
 17.32  drugs which require prior authorization.  The formulary 
 17.33  committee may recommend drugs for prior authorization directly 
 17.34  to the commissioner, as long as opportunity for public input is 
 17.35  provided.  Prior authorization may be requested by the 
 17.36  commissioner based on medical and clinical criteria before 
 18.1   certain drugs are eligible for payment.  Before a drug may be 
 18.2   considered for prior authorization at the request of the 
 18.3   commissioner:  
 18.4      (1) the drug formulary committee must develop criteria to 
 18.5   be used for identifying drugs; the development of these criteria 
 18.6   is not subject to the requirements of chapter 14, but the 
 18.7   formulary committee shall provide opportunity for public input 
 18.8   in developing criteria; 
 18.9      (2) the drug formulary committee must hold a public forum 
 18.10  and receive public comment for an additional 15 days; and 
 18.11     (3) the commissioner must provide information to the 
 18.12  formulary committee on the impact that placing the drug on prior 
 18.13  authorization will have on the quality of patient care and 
 18.14  information regarding whether the drug is subject to clinical 
 18.15  abuse or misuse.  Prior authorization may be required by the 
 18.16  commissioner before certain formulary drugs are eligible for 
 18.17  payment.  The formulary shall not include:  
 18.18     (i) drugs or products for which there is no federal 
 18.19  funding; 
 18.20     (ii) over-the-counter drugs, except for antacids, 
 18.21  acetaminophen, family planning products, aspirin, insulin, 
 18.22  products for the treatment of lice, vitamins for adults with 
 18.23  documented vitamin deficiencies, vitamins for children under the 
 18.24  age of seven and pregnant or nursing women, and any other 
 18.25  over-the-counter drug identified by the commissioner, in 
 18.26  consultation with the drug formulary committee, as necessary, 
 18.27  appropriate, and cost-effective for the treatment of certain 
 18.28  specified chronic diseases, conditions or disorders, and this 
 18.29  determination shall not be subject to the requirements of 
 18.30  chapter 14; 
 18.31     (iii) anorectics, except that medically necessary 
 18.32  anorectics shall be covered for a recipient previously diagnosed 
 18.33  as having pickwickian syndrome and currently diagnosed as having 
 18.34  diabetes and being morbidly obese; 
 18.35     (iv) drugs for which medical value has not been 
 18.36  established; and 
 19.1      (v) drugs from manufacturers who have not signed a rebate 
 19.2   agreement with the Department of Health and Human Services 
 19.3   pursuant to section 1927 of title XIX of the Social Security Act.
 19.4      The commissioner shall publish conditions for prohibiting 
 19.5   payment for specific drugs after considering the formulary 
 19.6   committee's recommendations.  An honorarium of $100 per meeting 
 19.7   and reimbursement for mileage shall be paid to each committee 
 19.8   member in attendance.  
 19.9      (c) The basis for determining the amount of payment shall 
 19.10  be the lower of the actual acquisition costs of the drugs plus a 
 19.11  fixed dispensing fee; the maximum allowable cost set by the 
 19.12  federal government or by the commissioner plus the fixed 
 19.13  dispensing fee; or the usual and customary price charged to the 
 19.14  public.  The pharmacy dispensing fee shall be $3.65, except that 
 19.15  the dispensing fee for intravenous solutions which must be 
 19.16  compounded by the pharmacist shall be $8 per bag, $14 per bag 
 19.17  for cancer chemotherapy products, and $30 per bag for total 
 19.18  parenteral nutritional products dispensed in one liter 
 19.19  quantities, or $44 per bag for total parenteral nutritional 
 19.20  products dispensed in quantities greater than one liter.  Actual 
 19.21  acquisition cost includes quantity and other special discounts 
 19.22  except time and cash discounts.  The actual acquisition cost of 
 19.23  a drug shall be estimated by the commissioner, at average 
 19.24  wholesale price minus nine percent, except that where a drug has 
 19.25  had its wholesale price reduced as a result of the actions of 
 19.26  the National Association of Medicaid Fraud Control Units, the 
 19.27  estimated actual acquisition cost shall be the reduced average 
 19.28  wholesale price, without the nine percent deduction.  The 
 19.29  maximum allowable cost of a multisource drug may be set by the 
 19.30  commissioner and it shall be comparable to, but no higher than, 
 19.31  the maximum amount paid by other third-party payors in this 
 19.32  state who have maximum allowable cost programs.  The 
 19.33  commissioner shall set maximum allowable costs for multisource 
 19.34  drugs that are not on the federal upper limit list as described 
 19.35  in United States Code, title 42, chapter 7, section 1396r-8(e), 
 19.36  the Social Security Act, and Code of Federal Regulations, title 
 20.1   42, part 447, section 447.332.  Establishment of the amount of 
 20.2   payment for drugs shall not be subject to the requirements of 
 20.3   the Administrative Procedure Act.  An additional dispensing fee 
 20.4   of $.30 may be added to the dispensing fee paid to pharmacists 
 20.5   for legend drug prescriptions dispensed to residents of 
 20.6   long-term care facilities when a unit dose blister card system, 
 20.7   approved by the department, is used.  Under this type of 
 20.8   dispensing system, the pharmacist must dispense a 30-day supply 
 20.9   of drug.  The National Drug Code (NDC) from the drug container 
 20.10  used to fill the blister card must be identified on the claim to 
 20.11  the department.  The unit dose blister card containing the drug 
 20.12  must meet the packaging standards set forth in Minnesota Rules, 
 20.13  part 6800.2700, that govern the return of unused drugs to the 
 20.14  pharmacy for reuse.  The pharmacy provider will be required to 
 20.15  credit the department for the actual acquisition cost of all 
 20.16  unused drugs that are eligible for reuse.  Over-the-counter 
 20.17  medications must be dispensed in the manufacturer's unopened 
 20.18  package.  The commissioner may permit the drug clozapine to be 
 20.19  dispensed in a quantity that is less than a 30-day supply.  
 20.20  Whenever a generically equivalent product is available, payment 
 20.21  shall be on the basis of the actual acquisition cost of the 
 20.22  generic drug, unless the prescriber specifically indicates 
 20.23  "dispense as written - brand necessary" on the prescription as 
 20.24  required by section 151.21, subdivision 2. 
 20.25     (d) For purposes of this subdivision, "multisource drugs" 
 20.26  means covered outpatient drugs, excluding innovator multisource 
 20.27  drugs for which there are two or more drug products, which: 
 20.28     (1) are related as therapeutically equivalent under the 
 20.29  Food and Drug Administration's most recent publication of 
 20.30  "Approved Drug Products with Therapeutic Equivalence 
 20.31  Evaluations"; 
 20.32     (2) are pharmaceutically equivalent and bioequivalent as 
 20.33  determined by the Food and Drug Administration; and 
 20.34     (3) are sold or marketed in Minnesota. 
 20.35  "Innovator multisource drug" means a multisource drug that was 
 20.36  originally marketed under an original new drug application 
 21.1   approved by the Food and Drug Administration. 
 21.2      (e) The basis for determining the amount of payment for 
 21.3   drugs administered in an outpatient setting shall be the lower 
 21.4   of the usual and customary cost submitted by the provider; the 
 21.5   average wholesale price minus five percent; or the maximum 
 21.6   allowable cost set by the federal government under United States 
 21.7   Code, title 42, chapter 7, section 1396r-8(e) and Code of 
 21.8   Federal Regulations, title 42, section 447.332, or by the 
 21.9   commissioner under paragraph (c). 
 21.10     Sec. 11.  Minnesota Statutes 2000, section 256B.0625, 
 21.11  subdivision 13a, is amended to read: 
 21.12     Subd. 13a.  [DRUG UTILIZATION REVIEW BOARD.] A nine-member 
 21.13  drug utilization review board is established.  The board is 
 21.14  comprised of at least three but no more than four licensed 
 21.15  physicians actively engaged in the practice of medicine in 
 21.16  Minnesota; at least three licensed pharmacists actively engaged 
 21.17  in the practice of pharmacy in Minnesota; and one consumer 
 21.18  representative; the remainder to be made up of health care 
 21.19  professionals who are licensed in their field and have 
 21.20  recognized knowledge in the clinically appropriate prescribing, 
 21.21  dispensing, and monitoring of covered outpatient drugs.  The 
 21.22  board shall be staffed by an employee of the department who 
 21.23  shall serve as an ex officio nonvoting member of the board.  The 
 21.24  members of the board shall be appointed by the commissioner and 
 21.25  shall serve three-year terms.  The members shall be selected 
 21.26  from lists submitted by professional associations.  The 
 21.27  commissioner shall appoint the initial members of the board for 
 21.28  terms expiring as follows:  three members for terms expiring 
 21.29  June 30, 1996; three members for terms expiring June 30, 1997; 
 21.30  and three members for terms expiring June 30, 1998.  Members may 
 21.31  be reappointed once.  The board shall annually elect a chair 
 21.32  from among the members. 
 21.33     The commissioner shall, with the advice of the board: 
 21.34     (1) implement a medical assistance retrospective and 
 21.35  prospective drug utilization review program as required by 
 21.36  United States Code, title 42, section 1396r-8(g)(3); 
 22.1      (2) develop and implement the predetermined criteria and 
 22.2   practice parameters for appropriate prescribing to be used in 
 22.3   retrospective and prospective drug utilization review; 
 22.4      (3) develop, select, implement, and assess interventions 
 22.5   for physicians, pharmacists, and patients that are educational 
 22.6   and not punitive in nature; 
 22.7      (4) establish a grievance and appeals process for 
 22.8   physicians and pharmacists under this section; 
 22.9      (5) publish and disseminate educational information to 
 22.10  physicians and pharmacists regarding the board and the review 
 22.11  program; 
 22.12     (6) adopt and implement procedures designed to ensure the 
 22.13  confidentiality of any information collected, stored, retrieved, 
 22.14  assessed, or analyzed by the board, staff to the board, or 
 22.15  contractors to the review program that identifies individual 
 22.16  physicians, pharmacists, or recipients; 
 22.17     (7) establish and implement an ongoing process to (i) 
 22.18  receive public comment regarding drug utilization review 
 22.19  criteria and standards, and (ii) consider the comments along 
 22.20  with other scientific and clinical information in order to 
 22.21  revise criteria and standards on a timely basis; and 
 22.22     (8) adopt any rules necessary to carry out this section. 
 22.23     The board may establish advisory committees.  The 
 22.24  commissioner may contract with appropriate organizations to 
 22.25  assist the board in carrying out the board's duties.  The 
 22.26  commissioner may enter into contracts for services to develop 
 22.27  and implement a retrospective and prospective review program. 
 22.28     The board shall report to the commissioner annually on the 
 22.29  date the Drug Utilization Review Annual Report is due to the 
 22.30  Health Care Financing Administration.  This report is to cover 
 22.31  the preceding federal fiscal year.  The commissioner shall make 
 22.32  the report available to the public upon request.  The report 
 22.33  must include information on the activities of the board and the 
 22.34  program; the effectiveness of implemented interventions; 
 22.35  administrative costs; and any fiscal impact resulting from the 
 22.36  program.  An honorarium of $50 $100 per meeting and 
 23.1   reimbursement for mileage shall be paid to each board member in 
 23.2   attendance. 
 23.3      Sec. 12.  Minnesota Statutes 2000, section 256B.0625, 
 23.4   subdivision 18a, is amended to read: 
 23.5      Subd. 18a.  [PAYMENT FOR MEALS AND LODGING ACCESS TO 
 23.6   MEDICAL SERVICES.] (a) Medical assistance reimbursement for 
 23.7   meals for persons traveling to receive medical care may not 
 23.8   exceed $5.50 for breakfast, $6.50 for lunch, or $8 for dinner. 
 23.9      (b) Medical assistance reimbursement for lodging for 
 23.10  persons traveling to receive medical care may not exceed $50 per 
 23.11  day unless prior authorized by the local agency. 
 23.12     (c) Medical assistance direct mileage reimbursement to the 
 23.13  eligible person or the eligible person's driver may not exceed 
 23.14  20 cents per mile. 
 23.15     (d) Medical assistance covers oral language interpreter 
 23.16  services when provided by an enrolled health care provider 
 23.17  during the course of providing a direct, person-to-person 
 23.18  covered health care service to an enrolled recipient with 
 23.19  limited English proficiency. 
 23.20     Sec. 13.  Minnesota Statutes 2000, section 256B.0625, 
 23.21  subdivision 30, is amended to read: 
 23.22     Subd. 30.  [OTHER CLINIC SERVICES.] (a) Medical assistance 
 23.23  covers rural health clinic services, federally qualified health 
 23.24  center services, nonprofit community health clinic services, 
 23.25  public health clinic services, and the services of a clinic 
 23.26  meeting the criteria established in rule by the commissioner.  
 23.27  Rural health clinic services and federally qualified health 
 23.28  center services mean services defined in United States Code, 
 23.29  title 42, section 1396d(a)(2)(B) and (C).  Payment for rural 
 23.30  health clinic and federally qualified health center services 
 23.31  shall be made according to applicable federal law and regulation.
 23.32     (b) A federally qualified health center that is beginning 
 23.33  initial operation shall submit an estimate of budgeted costs and 
 23.34  visits for the initial reporting period in the form and detail 
 23.35  required by the commissioner.  A federally qualified health 
 23.36  center that is already in operation shall submit an initial 
 24.1   report using actual costs and visits for the initial reporting 
 24.2   period.  Within 90 days of the end of its reporting period, a 
 24.3   federally qualified health center shall submit, in the form and 
 24.4   detail required by the commissioner, a report of its operations, 
 24.5   including allowable costs actually incurred for the period and 
 24.6   the actual number of visits for services furnished during the 
 24.7   period, and other information required by the commissioner.  
 24.8   Federally qualified health centers that file Medicare cost 
 24.9   reports shall provide the commissioner with a copy of the most 
 24.10  recent Medicare cost report filed with the Medicare program 
 24.11  intermediary for the reporting year which support the costs 
 24.12  claimed on their cost report to the state. 
 24.13     (c) In order to continue cost-based payment under the 
 24.14  medical assistance program according to paragraphs (a) and (b), 
 24.15  a federally qualified health center or rural health clinic must 
 24.16  apply for designation as an essential community provider within 
 24.17  six months of final adoption of rules by the department of 
 24.18  health according to section 62Q.19, subdivision 7.  For those 
 24.19  federally qualified health centers and rural health clinics that 
 24.20  have applied for essential community provider status within the 
 24.21  six-month time prescribed, medical assistance payments will 
 24.22  continue to be made according to paragraphs (a) and (b) for the 
 24.23  first three years after application.  For federally qualified 
 24.24  health centers and rural health clinics that either do not apply 
 24.25  within the time specified above or who have had essential 
 24.26  community provider status for three years, medical assistance 
 24.27  payments for health services provided by these entities shall be 
 24.28  according to the same rates and conditions applicable to the 
 24.29  same service provided by health care providers that are not 
 24.30  federally qualified health centers or rural health clinics.  
 24.31     (d) Effective July 1, 1999, the provisions of paragraph (c) 
 24.32  requiring a federally qualified health center or a rural health 
 24.33  clinic to make application for an essential community provider 
 24.34  designation in order to have cost-based payments made according 
 24.35  to paragraphs (a) and (b) no longer apply. 
 24.36     (e) Effective January 1, 2000, payments made according to 
 25.1   paragraphs (a) and (b) shall be limited to the cost phase-out 
 25.2   schedule of the Balanced Budget Act of 1997. 
 25.3      (f) Effective January 1, 2001, each federally qualified 
 25.4   health center and rural health clinic may elect to be paid 
 25.5   either under the prospective payment system established in 
 25.6   United States Code, title 42, section 1396a, (a) or under an 
 25.7   alternative payment methodology consistent with the requirements 
 25.8   of United States Code, title 42, section 1392a, (a) and approved 
 25.9   by the Health Care Financing Administration.  The alternative 
 25.10  payment methodology shall be 100 percent of cost as determined 
 25.11  according to Medicare cost principles. 
 25.12     Sec. 14.  Minnesota Statutes 2000, section 256B.0625, 
 25.13  subdivision 34, is amended to read: 
 25.14     Subd. 34.  [INDIAN HEALTH SERVICES FACILITIES.] Medical 
 25.15  assistance payments to facilities of the Indian health service 
 25.16  and facilities operated by a tribe or tribal organization under 
 25.17  funding authorized by United States Code, title 25, sections 
 25.18  450f to 450n, or title III of the Indian Self-Determination and 
 25.19  Education Assistance Act, Public Law Number 93-638, for 
 25.20  enrollees who are eligible for federal financial participation, 
 25.21  shall be at the option of the facility in accordance with the 
 25.22  rate published by the United States Assistant Secretary for 
 25.23  Health under the authority of United States Code, title 42, 
 25.24  sections 248(a) and 249(b).  General assistance medical care 
 25.25  payments to facilities of the Indian health services and 
 25.26  facilities operated by a tribe or tribal organization for the 
 25.27  provision of outpatient medical care services billed after June 
 25.28  30, 1990, must be in accordance with the general assistance 
 25.29  medical care rates paid for the same services when provided in a 
 25.30  facility other than a facility of the Indian health service or a 
 25.31  facility operated by a tribe or tribal 
 25.32  organization.  MinnesotaCare payments for enrollees who are not 
 25.33  eligible for federal financial participation at facilities of 
 25.34  the Indian health service and facilities operated by a tribe or 
 25.35  tribal organization for the provision of outpatient medical 
 25.36  services must be in accordance with the medical assistance rates 
 26.1   paid for the same services when provided in a facility other 
 26.2   than a facility of the Indian health service or a facility 
 26.3   operated by a tribe or tribal organization. 
 26.4      <b>[EFFECTIVE DATE.]</b> These sections shall be effective 
 26.5   immediately upon enactment. 
 26.6      Sec. 15.  Minnesota Statutes 2000, section 256B.0635, 
 26.7   subdivision 1, is amended to read: 
 26.8      Subdivision 1.  [INCREASED EMPLOYMENT.] Beginning January 
 26.9   1, 1998 (a) Until June 30, 2002, medical assistance may be paid 
 26.10  for persons who received MFIP-S or medical assistance for 
 26.11  families and children in at least three of six months preceding 
 26.12  the month in which the person became ineligible for MFIP-S or 
 26.13  medical assistance, if the ineligibility was due to an increase 
 26.14  in hours of employment or employment income or due to the loss 
 26.15  of an earned income disregard.  In addition, to receive 
 26.16  continued assistance under this section, persons who received 
 26.17  medical assistance for families and children but did not receive 
 26.18  MFIP-S must have had income less than or equal to the assistance 
 26.19  standard for their family size under the state's AFDC plan in 
 26.20  effect as of July 16, 1996, as required by the Personal 
 26.21  Responsibility and Work Opportunity Reconciliation Act of 1996 
 26.22  (PRWORA), Public Law Number 104-193, increased according to 
 26.23  section 256B.056, subdivision 4, at the time medical assistance 
 26.24  eligibility began.  A person who is eligible for extended 
 26.25  medical assistance is entitled to six 12 months of assistance 
 26.26  without reapplication, unless the assistance unit ceases to 
 26.27  include a dependent child.  For a person under 21 years of 
 26.28  age, except medical assistance may not be discontinued for that 
 26.29  dependent child under 21 years of age within the six-month 
 26.30  12-month period of extended eligibility until it has been 
 26.31  determined that the person is not otherwise eligible for medical 
 26.32  assistance.  Medical assistance may be continued for an 
 26.33  additional six months if the person meets all requirements for 
 26.34  the additional six months, according to title XIX of the Social 
 26.35  Security Act, as amended by section 303 of the Family Support 
 26.36  Act of 1988, Public Law Number 100-485. 
 27.1      (b) Beginning July 1, 2002, medical assistance for families 
 27.2   and children may be paid for persons who were eligible under 
 27.3   section 256B.055, subdivision 3a, paragraph (b), in at least 
 27.4   three of six months preceding the month in which the person 
 27.5   became ineligible under that section if the ineligibility was 
 27.6   due to an increase in hours of employment or employment income 
 27.7   or due to the loss of an earned income disregard.  A person who 
 27.8   is eligible for extended medical assistance is entitled to 12 
 27.9   months of assistance without reapplication, unless the 
 27.10  assistance unit ceases to include a dependent child, except 
 27.11  medical assistance may not be discontinued for that dependent 
 27.12  child under 21 years of age within the 12-month period of 
 27.13  extended eligibility until it has been determined that the 
 27.14  person is not otherwise eligible for medical assistance.  
 27.15     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
 27.16     Sec. 16.  Minnesota Statutes 2000, section 256B.0635, 
 27.17  subdivision 2, is amended to read: 
 27.18     Subd. 2.  [INCREASED CHILD OR SPOUSAL SUPPORT.] Beginning 
 27.19  January 1, 1998 (a) Until June 30, 2002, medical assistance may 
 27.20  be paid for persons who received MFIP-S or medical assistance 
 27.21  for families and children in at least three of the six months 
 27.22  preceding the month in which the person became ineligible for 
 27.23  MFIP-S or medical assistance, if the ineligibility was the 
 27.24  result of the collection of child or spousal support under part 
 27.25  D of title IV of the Social Security Act.  In addition, to 
 27.26  receive continued assistance under this section, persons who 
 27.27  received medical assistance for families and children but did 
 27.28  not receive MFIP-S must have had income less than or equal to 
 27.29  the assistance standard for their family size under the state's 
 27.30  AFDC plan in effect as of July 16, 1996, as required by the 
 27.31  Personal Responsibility and Work Opportunity Reconciliation Act 
 27.32  of 1996 (PRWORA), Public Law Number 104-193 increased according 
 27.33  to section 256B.056, subdivision 4, at the time medical 
 27.34  assistance eligibility began.  A person who is eligible for 
 27.35  extended medical assistance under this subdivision is entitled 
 27.36  to four months of assistance without reapplication, unless the 
 28.1   assistance unit ceases to include a dependent child.  For a 
 28.2   person under 21 years of age, except medical assistance may not 
 28.3   be discontinued for that dependent child under 21 years of age 
 28.4   within the four-month period of extended eligibility until it 
 28.5   has been determined that the person is not otherwise eligible 
 28.6   for medical assistance. 
 28.7      (b) Beginning July 1, 2002, medical assistance for families 
 28.8   and children may be paid for persons who were eligible under 
 28.9   section 256B.055, subdivision 3a, paragraph (b), in at least 
 28.10  three of the six months preceding the month in which the person 
 28.11  became ineligible under that section if the ineligibility was 
 28.12  the result of the collection of child or spousal support under 
 28.13  part D of title IV of the Social Security Act.  A person who is 
 28.14  eligible for extended medical assistance under this subdivision 
 28.15  is entitled to four months of assistance without reapplication, 
 28.16  unless the assistance unit ceases to include a dependent child, 
 28.17  except medical assistance may not be discontinued for that 
 28.18  dependent child under 21 years of age within the four-month 
 28.19  period of extended eligibility until it has been determined that 
 28.20  the person is not otherwise eligible for medical assistance. 
 28.21     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
 28.22     Sec. 17.  Minnesota Statutes 2000, section 256B.69, 
 28.23  subdivision 3a, is amended to read: 
 28.24     Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
 28.25  implementing the general assistance medical care, or medical 
 28.26  assistance prepayment program within a county, must include the 
 28.27  county board in the process of development, approval, and 
 28.28  issuance of the request for proposals to provide services to 
 28.29  eligible individuals within the proposed county.  County boards 
 28.30  must be given reasonable opportunity to make recommendations 
 28.31  regarding the development, issuance, review of responses, and 
 28.32  changes needed in the request for proposals.  The commissioner 
 28.33  must provide county boards the opportunity to review each 
 28.34  proposal based on the identification of community needs under 
 28.35  chapters 145A and 256E and county advocacy activities.  If a 
 28.36  county board finds that a proposal does not address certain 
 29.1   community needs, the county board and commissioner shall 
 29.2   continue efforts for improving the proposal and network prior to 
 29.3   the approval of the contract.  The county board shall make 
 29.4   recommendations regarding the approval of local networks and 
 29.5   their operations to ensure adequate availability and access to 
 29.6   covered services.  The provider or health plan must respond 
 29.7   directly to county advocates and the state prepaid medical 
 29.8   assistance ombudsperson regarding service delivery and must be 
 29.9   accountable to the state regarding contracts with medical 
 29.10  assistance and general assistance medical care funds.  The 
 29.11  county board may recommend a maximum number of participating 
 29.12  health plans after considering the size of the enrolling 
 29.13  population; ensuring adequate access and capacity; considering 
 29.14  the client and county administrative complexity; and considering 
 29.15  the need to promote the viability of locally developed health 
 29.16  plans.  The county board or a single entity representing a group 
 29.17  of county boards and the commissioner shall mutually select 
 29.18  health plans for participation at the time of initial 
 29.19  implementation of the prepaid medical assistance program in that 
 29.20  county or group of counties and at the time of contract renewal. 
 29.21  The commissioner shall also seek input for contract requirements 
 29.22  from the county or single entity representing a group of county 
 29.23  boards at each contract renewal and incorporate those 
 29.24  recommendations into the contract negotiation process.  The 
 29.25  commissioner, in conjunction with the county board, shall 
 29.26  actively seek to develop a mutually agreeable timetable prior to 
 29.27  the development of the request for proposal, but counties must 
 29.28  agree to initial enrollment beginning on or before January 1, 
 29.29  1999, in either the prepaid medical assistance and general 
 29.30  assistance medical care programs or county-based purchasing 
 29.31  under section 256B.692.  At least 90 days before enrollment in 
 29.32  the medical assistance and general assistance medical care 
 29.33  prepaid programs begins in a county in which the prepaid 
 29.34  programs have not been established, the commissioner shall 
 29.35  provide a report to the chairs of senate and house committees 
 29.36  having jurisdiction over state health care programs which 
 30.1   verifies that the commissioner complied with the requirements 
 30.2   for county involvement that are specified in this subdivision. 
 30.3      (b) The commissioner shall seek a federal waiver to allow a 
 30.4   fee-for-service plan option to MinnesotaCare enrollees.  The 
 30.5   commissioner shall develop an increase of the premium fees 
 30.6   required under section 256L.06 up to 20 percent of the premium 
 30.7   fees for the enrollees who elect the fee-for-service option.  
 30.8   Prior to implementation, the commissioner shall submit this fee 
 30.9   schedule to the chair and ranking minority member of the senate 
 30.10  health care committee, the senate health care and family 
 30.11  services funding division, the house of representatives health 
 30.12  and human services committee, and the house of representatives 
 30.13  health and human services finance division. 
 30.14     (c) At the option of the county board, the board may 
 30.15  develop contract requirements related to the achievement of 
 30.16  local public health goals to meet the health needs of medical 
 30.17  assistance and general assistance medical care enrollees.  These 
 30.18  requirements must be reasonably related to the performance of 
 30.19  health plan functions and within the scope of the medical 
 30.20  assistance and general assistance medical care benefit sets.  If 
 30.21  the county board and the commissioner mutually agree to such 
 30.22  requirements, the department shall include such requirements in 
 30.23  all health plan contracts governing the prepaid medical 
 30.24  assistance and general assistance medical care programs in that 
 30.25  county at initial implementation of the program in that county 
 30.26  and at the time of contract renewal.  The county board may 
 30.27  participate in the enforcement of the contract provisions 
 30.28  related to local public health goals. 
 30.29     (d) For counties in which prepaid medical assistance and 
 30.30  general assistance medical care programs have not been 
 30.31  established, the commissioner shall not implement those programs 
 30.32  if a county board submits acceptable and timely preliminary and 
 30.33  final proposals under section 256B.692, until county-based 
 30.34  purchasing is no longer operational in that county.  For 
 30.35  counties in which prepaid medical assistance and general 
 30.36  assistance medical care programs are in existence on or after 
 31.1   September 1, 1997, the commissioner must terminate contracts 
 31.2   with health plans according to section 256B.692, subdivision 5, 
 31.3   if the county board submits and the commissioner accepts 
 31.4   preliminary and final proposals according to that subdivision.  
 31.5   The commissioner is not required to terminate contracts that 
 31.6   begin on or after September 1, 1997, according to section 
 31.7   256B.692 until two years have elapsed from the date of initial 
 31.8   enrollment. 
 31.9      (e) In the event that a county board or a single entity 
 31.10  representing a group of county boards and the commissioner 
 31.11  cannot reach agreement regarding:  (i) the selection of 
 31.12  participating health plans in that county; (ii) contract 
 31.13  requirements; or (iii) implementation and enforcement of county 
 31.14  requirements including provisions regarding local public health 
 31.15  goals, the commissioner shall resolve all disputes after taking 
 31.16  into account the recommendations of a three-person mediation 
 31.17  panel.  The panel shall be composed of one designee of the 
 31.18  president of the association of Minnesota counties, one designee 
 31.19  of the commissioner of human services, and one designee of the 
 31.20  commissioner of health. 
 31.21     (f) If a county which elects to implement county-based 
 31.22  purchasing ceases to implement county-based purchasing, it is 
 31.23  prohibited from assuming the responsibility of county-based 
 31.24  purchasing for a period of five years from the date it 
 31.25  discontinues purchasing. 
 31.26     (g) Notwithstanding the requirement in this subdivision 
 31.27  that a county must agree to initial enrollment on or before 
 31.28  January 1, 1999, the commissioner shall grant a delay in the 
 31.29  implementation of the county-based purchasing authorized in 
 31.30  section 256B.692 until federal waiver authority and approval has 
 31.31  been granted, if the county or group of counties has submitted a 
 31.32  preliminary proposal for county-based purchasing by September 1, 
 31.33  1997, has not already implemented the prepaid medical assistance 
 31.34  program before January 1, 1998, and has submitted a written 
 31.35  request for the delay to the commissioner by July 1, 1998.  In 
 31.36  order for the delay to be continued, the county or group of 
 32.1   counties must also submit to the commissioner the following 
 32.2   information by December 1, 1998.  The information must: 
 32.3      (1) identify the proposed date of implementation, as 
 32.4   determined under section 256B.692, subdivision 5; 
 32.5      (2) include copies of the county board resolutions which 
 32.6   demonstrate the continued commitment to the implementation of 
 32.7   county-based purchasing by the proposed date.  County board 
 32.8   authorization may remain contingent on the submission of a final 
 32.9   proposal which meets the requirements of section 256B.692, 
 32.10  subdivision 5, paragraph (b); 
 32.11     (3) demonstrate actions taken for the establishment of a 
 32.12  governance structure between the participating counties and 
 32.13  describe how the fiduciary responsibilities of county-based 
 32.14  purchasing will be allocated between the counties, if more than 
 32.15  one county is involved in the proposal; 
 32.16     (4) describe how the risk of a deficit will be managed in 
 32.17  the event expenditures are greater than total capitation 
 32.18  payments.  This description must identify how any of the 
 32.19  following strategies will be used: 
 32.20     (i) risk contracts with licensed health plans; 
 32.21     (ii) risk arrangements with providers who are not licensed 
 32.22  health plans; 
 32.23     (iii) risk arrangements with other licensed insurance 
 32.24  entities; and 
 32.25     (iv) funding from other county resources; 
 32.26     (5) include, if county-based purchasing will not contract 
 32.27  with licensed health plans or provider networks, letters of 
 32.28  interest from local providers in at least the categories of 
 32.29  hospital, physician, mental health, and pharmacy which express 
 32.30  interest in contracting for services.  These letters must 
 32.31  recognize any risk transfer identified in clause (4), item (ii); 
 32.32  and 
 32.33     (6) describe the options being considered to obtain the 
 32.34  administrative services required in section 256B.692, 
 32.35  subdivision 3, clauses (3) and (5).  Notwithstanding other 
 32.36  subdivisions under this section, the commissioner shall 
 33.1   implement a prepaid medical assistance program in all counties 
 33.2   that have not gained federal approval for county-based 
 33.3   purchasing by September 1, 2001. 
 33.4      (h) For counties which receive a delay under this 
 33.5   subdivision, the final proposals required under section 
 33.6   256B.692, subdivision 5, paragraph (b), must be submitted at 
 33.7   least six months prior to the requested implementation date.  
 33.8   Authority to implement county-based purchasing remains 
 33.9   contingent on approval of the final proposal as required under 
 33.10  section 256B.692. 
 33.11     (i) If the commissioner is unable to provide 
 33.12  county-specific, individual-level fee-for-service claims to 
 33.13  counties by June 4, 1998, the commissioner shall grant a delay 
 33.14  under paragraph (g) of up to 12 months in the implementation of 
 33.15  county-based purchasing, and shall require implementation not 
 33.16  later than January 1, 2000.  In order to receive an extension of 
 33.17  the proposed date of implementation under this paragraph, a 
 33.18  county or group of counties must submit a written request for 
 33.19  the extension to the commissioner by August 1, 1998, must submit 
 33.20  the information required under paragraph (g) by December 1, 
 33.21  1998, and must submit a final proposal as provided under 
 33.22  paragraph (h). 
 33.23     (j) Notwithstanding other requirements of this subdivision, 
 33.24  the commissioner shall not require the implementation of the 
 33.25  county-based purchasing authorized in section 256B.692 until six 
 33.26  months after federal waiver approval has been obtained for 
 33.27  county-based purchasing, if the county or counties have 
 33.28  submitted the final plan as required in section 256B.692, 
 33.29  subdivision 5.  The commissioner shall allow the county or 
 33.30  counties which submitted information under section 256B.692, 
 33.31  subdivision 5, to submit supplemental or additional information 
 33.32  which was not possible to submit by April 1, 1999.  A county or 
 33.33  counties shall continue to submit the required information and 
 33.34  substantive detail necessary to obtain a prompt response and 
 33.35  waiver approval.  If amendments to the final plan are necessary 
 33.36  due to the terms and conditions of the waiver approval, the 
 34.1   commissioner shall allow the county or group of counties 60 days 
 34.2   to make the necessary amendments to the final plan and shall not 
 34.3   require implementation of the county-based purchasing until six 
 34.4   months after the revised final plan has been submitted. 
 34.5      <b>[EFFECTIVE DATE.]</b> This section is effective September 1, 
 34.6   2001. 
 34.7      Sec. 18.  Minnesota Statutes 2000, section 256B.75, is 
 34.8   amended to read: 
 34.9      256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
 34.10     (a) For outpatient hospital facility fee payments for 
 34.11  services rendered on or after October 1, 1992, the commissioner 
 34.12  of human services shall pay the lower of (1) submitted charge, 
 34.13  or (2) 32 percent above the rate in effect on June 30, 1992, 
 34.14  except for those services for which there is a federal maximum 
 34.15  allowable payment.  Effective for services rendered on or after 
 34.16  January 1, 2000, payment rates for nonsurgical outpatient 
 34.17  hospital facility fees and emergency room facility fees shall be 
 34.18  increased by eight percent over the rates in effect on December 
 34.19  31, 1999, except for those services for which there is a federal 
 34.20  maximum allowable payment.  Services for which there is a 
 34.21  federal maximum allowable payment shall be paid at the lower of 
 34.22  (1) submitted charge, or (2) the federal maximum allowable 
 34.23  payment.  Total aggregate payment for outpatient hospital 
 34.24  facility fee services shall not exceed the Medicare upper 
 34.25  limit.  If it is determined that a provision of this section 
 34.26  conflicts with existing or future requirements of the United 
 34.27  States government with respect to federal financial 
 34.28  participation in medical assistance, the federal requirements 
 34.29  prevail.  The commissioner may, in the aggregate, prospectively 
 34.30  reduce payment rates to avoid reduced federal financial 
 34.31  participation resulting from rates that are in excess of the 
 34.32  Medicare upper limitations. 
 34.33     (b) Notwithstanding paragraph (a), payment for outpatient, 
 34.34  emergency, and ambulatory surgery hospital facility fee services 
 34.35  for critical access hospitals designated under section 144.1483, 
 34.36  clause (11), shall be paid on a cost-based payment system that 
 35.1   is based on the cost-finding methods and allowable costs of the 
 35.2   Medicare program. 
 35.3      (c) Effective for services provided on or after July 1, 
 35.4   2002, rates that are based on the Medicare outpatient 
 35.5   prospective payment system shall be replaced by a budget neutral 
 35.6   prospective payment system that is derived using medical 
 35.7   assistance data.  The department shall provide a proposal to the 
 35.8   2002 legislature to define and implement this provision. 
 35.9      Sec. 19.  [256B.78] [MEDICAL ASSISTANCE DEMONSTRATION 
 35.10  PROJECT FOR FAMILY PLANNING SERVICES.] 
 35.11     (a) The commissioner of human services shall establish a 
 35.12  medical assistance demonstration project to determine whether 
 35.13  improved access to coverage of prepregnancy family planning 
 35.14  services reduces medical assistance and MFIP costs. 
 35.15     (b) This section is effective upon federal approval of the 
 35.16  demonstration project. 
 35.17     Sec. 20.  Minnesota Statutes 2000, section 256J.31, 
 35.18  subdivision 12, is amended to read: 
 35.19     Subd. 12.  [RIGHT TO DISCONTINUE CASH ASSISTANCE.] A 
 35.20  participant who is not in vendor payment status may discontinue 
 35.21  receipt of the cash assistance portion of the MFIP assistance 
 35.22  grant and retain eligibility for child care assistance under 
 35.23  section 119B.05 and for medical assistance under sections 
 35.24  256B.055, subdivision 3a, and 256B.0635.  For the months a 
 35.25  participant chooses to discontinue the receipt of the cash 
 35.26  portion of the MFIP grant, the assistance unit accrues months of 
 35.27  eligibility to be applied toward eligibility for child care 
 35.28  under section 119B.05 and for medical assistance under sections 
 35.29  256B.055, subdivision 3a, and 256B.0635. 
 35.30     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 35.31     Sec. 21.  Minnesota Statutes 2000, section 256K.03, 
 35.32  subdivision 1, is amended to read: 
 35.33     Subdivision 1.  [NOTIFICATION OF PROGRAM.] Except for the 
 35.34  provisions in this section, the provisions for the MFIP 
 35.35  application process shall be followed.  Within two days after 
 35.36  receipt of a completed combined application form, the county 
 36.1   agency must refer to the provider the applicant who meets the 
 36.2   conditions under section 256K.02, and notify the applicant in 
 36.3   writing of the program including the following provisions: 
 36.4      (1) notification that, as part of the application process, 
 36.5   applicants are required to attend orientation, to be followed 
 36.6   immediately by a job search; 
 36.7      (2) the program provider, the date, time, and location of 
 36.8   the scheduled program orientation; 
 36.9      (3) the procedures for qualifying for and receiving 
 36.10  benefits under the program; 
 36.11     (4) the immediate availability of supportive services, 
 36.12  including, but not limited to, child care, transportation, 
 36.13  medical assistance, and other work-related aid; and 
 36.14     (5) the rights, responsibilities, and obligations of 
 36.15  participants in the program, including, but not limited to, the 
 36.16  grounds for exemptions and deferrals, the consequences for 
 36.17  refusing or failing to participate fully, and the appeal process.
 36.18     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 36.19     Sec. 22.  Minnesota Statutes 2000, section 256K.07, is 
 36.20  amended to read: 
 36.21     256K.07 [ELIGIBILITY FOR FOOD STAMPS, MEDICAL ASSISTANCE, 
 36.22  AND CHILD CARE.] 
 36.23     The participant shall be treated as an MFIP recipient for 
 36.24  food stamps, medical assistance, and child care eligibility 
 36.25  purposes.  The participant who leaves the program as a result of 
 36.26  increased earnings from employment shall be eligible for 
 36.27  transitional medical assistance and child care without regard to 
 36.28  MFIP receipt in three of the six months preceding ineligibility. 
 36.29     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 36.30     Sec. 23.  Minnesota Statutes 2000, section 256L.02, 
 36.31  subdivision 4, is amended to read: 
 36.32     Subd. 4.  [FUNDING FOR PREGNANT WOMEN AND CHILDREN UNDER 
 36.33  AGE TWO.] (a) For fiscal years beginning on or after July 1, 
 36.34  1999, the state cost of health care services provided to 
 36.35  MinnesotaCare enrollees who are pregnant women or children under 
 36.36  age two shall be paid out of the general fund rather than the 
 37.1   health care access fund.  If the commissioner of finance decides 
 37.2   to pay for these costs using a source other than the general 
 37.3   fund, the commissioner shall include the change as a budget 
 37.4   initiative in the biennial or supplemental budget, and shall not 
 37.5   change the funding source through a forecast modification.  
 37.6      (b) For fiscal years beginning on or after July 1, 2002, 
 37.7   the state cost of health care services provided to MinnesotaCare 
 37.8   enrollees who are children under age 19 whose gross family 
 37.9   income is equal to or less than 185 percent of the federal 
 37.10  poverty guidelines shall be paid out of the general fund rather 
 37.11  than the health care access fund. 
 37.12     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
 37.13     Sec. 24.  Minnesota Statutes 2000, section 256L.04, 
 37.14  subdivision 2, is amended to read: 
 37.15     Subd. 2.  [COOPERATION IN ESTABLISHING THIRD-PARTY 
 37.16  LIABILITY, PATERNITY, AND OTHER MEDICAL SUPPORT.] (a) To be 
 37.17  eligible for MinnesotaCare, individuals and families must 
 37.18  cooperate with the state agency to identify potentially liable 
 37.19  third-party payers and assist the state in obtaining third-party 
 37.20  payments.  "Cooperation" includes, but is not limited to, 
 37.21  identifying any third party who may be liable for care and 
 37.22  services provided under MinnesotaCare to the enrollee, providing 
 37.23  relevant information to assist the state in pursuing a 
 37.24  potentially liable third party, and completing forms necessary 
 37.25  to recover third-party payments.  For a child through age 18 
 37.26  whose gross family income is equal to or less than 185 percent 
 37.27  of the federal poverty guidelines, cooperation also includes 
 37.28  providing information about a group health plan in which the 
 37.29  child is enrolled or eligible to enroll.  If the health plan is 
 37.30  determined cost-effective by the state agency and premiums are 
 37.31  paid by the state or local agency or there is no cost to the 
 37.32  enrollee, the MinnesotaCare enrollee must enroll or remain 
 37.33  enrolled in the group health plan, and the commissioner may 
 37.34  exempt the enrollee from the requirements of section 256L.12.  
 37.35  For purposes of this subdivision, coverage provided by the 
 37.36  Minnesota comprehensive health association under chapter 62E 
 38.1   shall not be considered group health plan coverage or 
 38.2   cost-effective by the state and local agency. 
 38.3      (b) A parent, guardian, relative caretaker, or child 
 38.4   enrolled in the MinnesotaCare program must cooperate with the 
 38.5   department of human services and the local agency in 
 38.6   establishing the paternity of an enrolled child and in obtaining 
 38.7   medical care support and payments for the child and any other 
 38.8   person for whom the person can legally assign rights, in 
 38.9   accordance with applicable laws and rules governing the medical 
 38.10  assistance program.  A child shall not be ineligible for or 
 38.11  disenrolled from the MinnesotaCare program solely because the 
 38.12  child's parent, relative caretaker, or guardian fails to 
 38.13  cooperate in establishing paternity or obtaining medical support.
 38.14     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 38.15     Sec. 25.  Minnesota Statutes 2000, section 256L.04, 
 38.16  subdivision 7, is amended to read: 
 38.17     Subd. 7.  [SINGLE ADULTS AND HOUSEHOLDS WITH NO CHILDREN.] 
 38.18  The definition of eligible persons includes all individuals and 
 38.19  households with no children who have gross family incomes that 
 38.20  are equal to or less than 175 275 percent of the federal poverty 
 38.21  guidelines.  
 38.22     Sec. 26.  Minnesota Statutes 2000, section 256L.05, 
 38.23  subdivision 5, is amended to read: 
 38.24     Subd. 5.  [AVAILABILITY OF PRIVATE INSURANCE.] The 
 38.25  commissioner, in consultation with the commissioners of health 
 38.26  and commerce, shall provide information regarding the 
 38.27  availability of private health insurance coverage and the 
 38.28  possibility of disenrollment under section 256L.07, subdivision 
 38.29  1, paragraphs (b) and (c), to all:  (1) families and individuals 
 38.30  enrolled in the MinnesotaCare program whose gross family income 
 38.31  is equal to or more than 225 percent of the federal poverty 
 38.32  guidelines; and (2) single adults and households without 
 38.33  children enrolled in the MinnesotaCare program whose gross 
 38.34  family income is equal to or more than 165 percent of the 
 38.35  federal poverty guidelines.  This information must be provided 
 38.36  upon initial enrollment and annually thereafter.  The 
 39.1   commissioner shall also include information regarding the 
 39.2   availability of private health insurance coverage in the notice 
 39.3   of ineligibility provided to persons subject to disenrollment 
 39.4   under section 256L.07, subdivision 1, paragraphs (b) and (c). 
 39.5      Sec. 27.  Minnesota Statutes 2000, section 256L.06, 
 39.6   subdivision 3, is amended to read: 
 39.7      Subd. 3.  [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) 
 39.8   Premiums are dedicated to the commissioner for MinnesotaCare. 
 39.9      (b) The commissioner shall develop and implement procedures 
 39.10  to:  (1) require enrollees to report changes in income; (2) 
 39.11  adjust sliding scale premium payments, based upon changes in 
 39.12  enrollee income; and (3) disenroll enrollees from MinnesotaCare 
 39.13  for failure to pay required premiums.  Failure to pay includes 
 39.14  payment with a dishonored check, a returned automatic bank 
 39.15  withdrawal, or a refused credit card or debit card payment.  The 
 39.16  commissioner may demand a guaranteed form of payment, including 
 39.17  a cashier's check or a money order, as the only means to replace 
 39.18  a dishonored, returned, or refused payment. 
 39.19     (c) Premiums are calculated on a calendar month basis and 
 39.20  may be paid on a monthly, quarterly, or annual basis, with the 
 39.21  first payment due upon notice from the commissioner of the 
 39.22  premium amount required.  The commissioner shall inform 
 39.23  applicants and enrollees of these premium payment options. 
 39.24  Premium payment is required before enrollment is complete and to 
 39.25  maintain eligibility in MinnesotaCare.  
 39.26     (d) Nonpayment of the premium will result in disenrollment 
 39.27  from the plan within one calendar month after the due date 
 39.28  effective for the calendar month for which the premium was due.  
 39.29  Persons disenrolled for nonpayment or who voluntarily terminate 
 39.30  coverage from the program may not reenroll until four calendar 
 39.31  months have elapsed.  Persons disenrolled for nonpayment who pay 
 39.32  all past due premiums as well as current premiums due, including 
 39.33  premiums due for the period of disenrollment, within 20 days of 
 39.34  disenrollment, shall be reenrolled retroactively to the first 
 39.35  day of disenrollment.  Persons disenrolled for nonpayment or who 
 39.36  voluntarily terminate coverage from the program may not reenroll 
 40.1   for four calendar months unless the person demonstrates good 
 40.2   cause for nonpayment.  Good cause does not exist if a person 
 40.3   chooses to pay other family expenses instead of the premium.  
 40.4   The commissioner shall define good cause in rule. 
 40.5      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 40.6      Sec. 28.  Minnesota Statutes 2000, section 256L.07, 
 40.7   subdivision 1, is amended to read: 
 40.8      Subdivision 1.  [GENERAL REQUIREMENTS.] (a) Children 
 40.9   enrolled in the original children's health plan as of September 
 40.10  30, 1992, and children who enrolled in the MinnesotaCare program 
 40.11  after September 30, 1992, pursuant to Laws 1992, chapter 549, 
 40.12  article 4, section 17, who have maintained continuous coverage 
 40.13  in the MinnesotaCare program or medical assistance; and children 
 40.14  under two; pregnant women; and children through age 18 who have 
 40.15  family gross incomes that are equal to or less than 150 185 
 40.16  percent of the federal poverty guidelines are eligible without 
 40.17  meeting the requirements of subdivision 2, as long as they 
 40.18  maintain continuous coverage in the MinnesotaCare program or 
 40.19  medical assistance.  Children who apply for MinnesotaCare on or 
 40.20  after the implementation date of the employer-subsidized health 
 40.21  coverage program as described in Laws 1998, chapter 407, article 
 40.22  5, section 45, who have family gross incomes that are equal to 
 40.23  or less than 150 percent of the federal poverty guidelines, must 
 40.24  meet the requirements of subdivision 2 to be eligible for 
 40.25  MinnesotaCare subdivisions 2 and 3. 
 40.26     (b) Families and individuals enrolled in MinnesotaCare 
 40.27  under section 256L.04, subdivision 1 or 7, whose income 
 40.28  increases above 275 percent of the federal poverty guidelines, 
 40.29  are no longer eligible for the program and shall be disenrolled 
 40.30  by the commissioner.  Individuals enrolled in MinnesotaCare 
 40.31  under section 256L.04, subdivision 7, whose income increases 
 40.32  above 175 percent of the federal poverty guidelines are no 
 40.33  longer eligible for the program and shall be disenrolled by the 
 40.34  commissioner.  For persons disenrolled under this subdivision, 
 40.35  MinnesotaCare coverage terminates the last day of the calendar 
 40.36  month following the month in which the commissioner determines 
 41.1   that the income of a family or individual exceeds program income 
 41.2   limits.  
 41.3      (c) Notwithstanding paragraph (b), individuals and families 
 41.4   may remain enrolled in MinnesotaCare if ten percent of their 
 41.5   annual income is less than the annual premium for a policy with 
 41.6   a $500 deductible available through the Minnesota comprehensive 
 41.7   health association.  Individuals and families who are no longer 
 41.8   eligible for MinnesotaCare under this subdivision shall be given 
 41.9   an 18-month notice period from the date that ineligibility is 
 41.10  determined before disenrollment.  
 41.11     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 41.12     Sec. 29.  Minnesota Statutes 2000, section 256L.07, 
 41.13  subdivision 3, is amended to read: 
 41.14     Subd. 3.  [OTHER HEALTH COVERAGE.] (a) Families and 
 41.15  individuals enrolled in the MinnesotaCare program must have no 
 41.16  health coverage while enrolled or for at least four months prior 
 41.17  to application and renewal.  Children enrolled in the original 
 41.18  children's health plan and children in families with income 
 41.19  equal to or less than 150 percent of the federal poverty 
 41.20  guidelines, who have other health insurance, are eligible if the 
 41.21  coverage: 
 41.22     (1) lacks two or more of the following: 
 41.23     (i) basic hospital insurance; 
 41.24     (ii) medical-surgical insurance; 
 41.25     (iii) prescription drug coverage; 
 41.26     (iv) dental coverage; or 
 41.27     (v) vision coverage; 
 41.28     (2) requires a deductible of $100 or more per person per 
 41.29  year; or 
 41.30     (3) lacks coverage because the child has exceeded the 
 41.31  maximum coverage for a particular diagnosis or the policy 
 41.32  excludes a particular diagnosis. 
 41.33     The commissioner may change this eligibility criterion for 
 41.34  sliding scale premiums in order to remain within the limits of 
 41.35  available appropriations.  The requirement of no health coverage 
 41.36  does not apply to newborns. 
 42.1      (b) Medical assistance, general assistance medical care, 
 42.2   and civilian health and medical program of the uniformed 
 42.3   service, CHAMPUS, are not considered insurance or health 
 42.4   coverage for purposes of the four-month requirement described in 
 42.5   this subdivision. 
 42.6      (c) For purposes of this subdivision, Medicare Part A or B 
 42.7   coverage under title XVIII of the Social Security Act, United 
 42.8   States Code, title 42, sections 1395c to 1395w-4, is considered 
 42.9   health coverage.  An applicant or enrollee may not refuse 
 42.10  Medicare coverage to establish eligibility for MinnesotaCare. 
 42.11     (d) Applicants who were recipients of medical assistance or 
 42.12  general assistance medical care within one month of application 
 42.13  must meet the provisions of this subdivision and subdivision 2. 
 42.14     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2002. 
 42.15     Sec. 30.  Minnesota Statutes 2000, section 256L.12, is 
 42.16  amended by adding a subdivision to read: 
 42.17     Subd. 11.  [AMERICAN INDIAN ENROLLEES.] For American Indian 
 42.18  enrollees, MinnesotaCare shall cover health care services 
 42.19  provided at Indian Health Service facilities and facilities 
 42.20  operated by a tribe or tribal organization under funding 
 42.21  authorized by United States Code, title 25, sections 450f to 
 42.22  450n, or title III of the Indian Self-Determination and 
 42.23  Education Assistance Act, Public Law Number 93-638, if those 
 42.24  services would otherwise be covered under section 256L.03.  
 42.25  Payments for services provided under this subdivision shall be 
 42.26  made on a fee-for-service basis, and may, at the option of the 
 42.27  tribe or tribal organization, be made at the rates authorized 
 42.28  under sections 256.969, subdivision 16, and 256B.0625, 
 42.29  subdivision 34, for those MinnesotaCare enrollees eligible for 
 42.30  coverage at medical assistance rates.  For purposes of this 
 42.31  subdivision, "American Indian" has the meaning given to persons 
 42.32  to whom services will be provided in the Code of Federal 
 42.33  Regulations, title 42, section 36.12. 
 42.34     Sec. 31.  Minnesota Statutes 2000, section 256L.15, 
 42.35  subdivision 1, is amended to read: 
 42.36     Subdivision 1.  [PREMIUM DETERMINATION.] (a) Except as 
 43.1   provided in paragraph (b), families with children and 
 43.2   individuals shall pay a premium determined according to a 
 43.3   sliding fee based on a percentage of the family's gross family 
 43.4   income.  
 43.5      (b) Families with children whose gross family income is 
 43.6   equal to or less than 185 percent of the federal poverty 
 43.7   guidelines and single adults and families without children whose 
 43.8   gross family income is equal to or less than 120 percent of the 
 43.9   federal poverty guidelines are exempt from paying a premium.  
 43.10  Pregnant women and children under age two are exempt from the 
 43.11  provisions of section 256L.06, subdivision 3, paragraph (b), 
 43.12  clause (3), requiring disenrollment for failure to pay 
 43.13  premiums.  For pregnant women, this exemption continues until 
 43.14  the first day of the month following the 60th day postpartum.  
 43.15  Women who remain enrolled during pregnancy or the postpartum 
 43.16  period, despite nonpayment of premiums, shall be disenrolled on 
 43.17  the first of the month following the 60th day postpartum for the 
 43.18  penalty period that otherwise applies under section 256L.06, 
 43.19  unless they begin paying premiums. 
 43.20     Sec. 32.  Minnesota Statutes 2000, section 256L.15, 
 43.21  subdivision 2, is amended to read: 
 43.22     Subd. 2.  [SLIDING FEE SCALE TO DETERMINE PERCENTAGE OF 
 43.23  GROSS INDIVIDUAL OR FAMILY INCOME.] (a) The commissioner shall 
 43.24  establish a sliding fee scale to determine the percentage of 
 43.25  gross individual or family income that households at different 
 43.26  income levels must pay to obtain coverage through the 
 43.27  MinnesotaCare program.  The sliding fee scale must be based on 
 43.28  the enrollee's gross individual or family income.  The sliding 
 43.29  fee scale must contain separate tables based on enrollment of 
 43.30  one, two, or three or more persons.  The sliding fee scale 
 43.31  begins with a premium of 1.5 percent of gross individual or 
 43.32  family income for individuals or families with incomes below the 
 43.33  limits for the medical assistance program for families and 
 43.34  children in effect on January 1, 1999, and proceeds through the 
 43.35  following evenly spaced steps:  1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 
 43.36  7.4, and 8.8 and 5.0 percent.  These percentages are matched to 
 44.1   evenly spaced income steps ranging from the medical assistance 
 44.2   income limit for families and children in effect on January 1, 
 44.3   1999, to 275 percent of the federal poverty guidelines for the 
 44.4   applicable family size, up to a family size of five.  The 
 44.5   sliding fee scale for a family of five must be used for families 
 44.6   of more than five.  The sliding fee scale and percentages are 
 44.7   not subject to the provisions of chapter 14.  If a family or 
 44.8   individual reports increased income after enrollment, premiums 
 44.9   shall not be adjusted until eligibility renewal. 
 44.10     (b) Enrolled individuals and families whose gross annual 
 44.11  income increases above 275 percent of the federal poverty 
 44.12  guideline shall pay the maximum premium.  The maximum premium is 
 44.13  defined as a base charge for one, two, or three or more 
 44.14  enrollees so that if all MinnesotaCare cases paid the maximum 
 44.15  premium, the total revenue would equal the total cost of 
 44.16  MinnesotaCare medical coverage and administration.  In this 
 44.17  calculation, administrative costs shall be assumed to equal ten 
 44.18  percent of the total.  The costs of medical coverage for 
 44.19  pregnant women and children under age two and the enrollees in 
 44.20  these groups shall be excluded from the total.  The maximum 
 44.21  premium for two enrollees shall be twice the maximum premium for 
 44.22  one, and the maximum premium for three or more enrollees shall 
 44.23  be three times the maximum premium for one. 
 44.24     Sec. 33.  Minnesota Statutes 2000, section 256L.16, is 
 44.25  amended to read: 
 44.26     256L.16 [PAYMENT RATES; SERVICES FOR FAMILIES AND CHILDREN 
 44.27  UNDER THE MINNESOTACARE HEALTH CARE REFORM WAIVER.] 
 44.28     Section 256L.11, subdivision 2, shall not apply to services 
 44.29  provided to children families with children who are eligible to 
 44.30  receive expanded services according to section 256L.03, 
 44.31  subdivision 1a 256L.04, subdivision 1a. 
 44.32     Sec. 34.  Laws 1999, chapter 245, article 4, section 110, 
 44.33  is amended to read: 
 44.34     Sec. 110.  [PROGRAMS FOR SENIOR CITIZENS.] 
 44.35     The commissioner of human services shall study the 
 44.36  eligibility criteria of and benefits provided to persons age 65 
 45.1   and over through the array of cash assistance and health care 
 45.2   programs administered by the department, and the extent to which 
 45.3   these programs can be combined, simplified, or coordinated to 
 45.4   reduce administrative costs and improve access.  The 
 45.5   commissioner shall also study potential barriers to enrollment 
 45.6   for low-income seniors who would otherwise deplete resources 
 45.7   necessary to maintain independent community living.  At a 
 45.8   minimum, the study must include an evaluation of asset 
 45.9   requirements and enrollment sites.  The commissioner shall 
 45.10  report study findings and recommendations to the legislature by 
 45.11  June 30, 2001 January 15, 2002. 
 45.12     Sec. 35.  [NOTICE OF PREMIUM CHANGES IN THE EMPLOYED 
 45.13  PERSONS WITH DISABILITIES PROGRAM.] 
 45.14     The commissioner of human services shall provide notice to 
 45.15  all medical assistance recipients receiving coverage through the 
 45.16  employed persons with disabilities program under Minnesota 
 45.17  Statutes, section 256B.057, subdivision 9, of the new premium 
 45.18  schedule at least two months before the month in which the first 
 45.19  new premium is due. 
 45.20     Sec. 36.  [REPEALER.] 
 45.21     (a) Minnesota Statutes 2000, sections 256.01, subdivision 
 45.22  18; and 256J.32, subdivision 7a, are repealed effective July 1, 
 45.23  2001. 
 45.24     (b) Minnesota Statutes 2000, sections 256B.0635, 
 45.25  subdivision 3; and 256L.15, subdivision 3, are repealed 
 45.26  effective July 1, 2002.