1.1                          A bill for an act 
  1.2             relating to health; crediting tobacco settlement 
  1.3             revenues to the health care access fund; eliminating 
  1.4             the MinnesotaCare tax on ambulance services; 
  1.5             eliminating the medical assistance surcharge on 
  1.6             hospitals and HMOs and a hospital intergovernmental 
  1.7             transfer; eliminating the MinnesotaCare provider taxes 
  1.8             and the premium tax on nonprofit health plan companies 
  1.9             on a contingent basis; requiring pass-through of 
  1.10            savings; amending Minnesota Statutes 2000, sections 
  1.11            256L.02, subdivision 3; 295.50, subdivision 4; 295.52, 
  1.12            by adding a subdivision; and 297I.05, subdivision 5; 
  1.13            proposing coding for new law in Minnesota Statutes, 
  1.14            chapters 16A; and 62Q; repealing Minnesota Statutes 
  1.15            2000, sections 16A.76; 256.9657, subdivisions 2 and 3; 
  1.16            and 256B.19, subdivision 1b. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18     Section 1.  [16A.725] [TOBACCO SETTLEMENT REVENUES.] 
  1.19     Subdivision 1.  [ONE-TIME PAYMENTS.] The commissioner shall 
  1.20  credit to the health care access fund the tobacco settlement 
  1.21  payments received by the state on January 2, 2002, and January 
  1.22  2, 2003, as a result of the settlement of the lawsuit styled as 
  1.23  State v. Philip Morris Inc., No. C1-94-8565 (Minnesota District 
  1.24  Court, Second Judicial District). 
  1.25     Subd. 2.  [ONGOING PAYMENTS.] Beginning with the payment 
  1.26  due December 31, 2001, the commissioner shall credit to the 
  1.27  health care access fund all ongoing payments due December 31 of 
  1.28  each year that are received by the state as a result of the 
  1.29  settlement of the lawsuit styled as State v. Philip Morris Inc., 
  1.30  No. C1-94-8565 (Minnesota District Court, Second Judicial 
  1.31  District). 
  2.1      Sec. 2.  [62Q.48] [PASS-THROUGH OF SAVINGS TO PURCHASERS.] 
  2.2      Subdivision 1.  [PREMIUMS TO REFLECT SAVINGS.] Health plan 
  2.3   company premium rates must reflect all savings resulting from:  
  2.4      (1) the contingent elimination of the MinnesotaCare 
  2.5   provider taxes under section 295.52, subdivision 8, and the 
  2.6   resulting reduction in the transfer of additional expenses 
  2.7   generated by section 295.52 obligations to third-party contracts 
  2.8   under section 295.582; and 
  2.9      (2) the contingent elimination of the tax on nonprofit 
  2.10  health plan company premiums under section 297I.05, subdivision 
  2.11  5, paragraph (b). 
  2.12     Subd. 2.  [DOCUMENTING COMPLIANCE.] Each health plan 
  2.13  company shall annually submit documentation indicating 
  2.14  compliance with subdivision 1 to the appropriate commissioner. 
  2.15     Subd. 3.  [ENFORCEMENT.] If the appropriate commissioner 
  2.16  finds that a health plan company has not complied with 
  2.17  subdivision 1, the commissioner may take enforcement action 
  2.18  against that health plan company.  The commissioner may, by 
  2.19  order, require premium rate reductions, fine or censure the 
  2.20  health plan company, or revoke or suspend the certificate of 
  2.21  authority or license of the health plan company to do business 
  2.22  in this state, if the commissioner finds that the health plan 
  2.23  company has not complied with this section.  The health plan 
  2.24  company may appeal the commissioner's order through a contested 
  2.25  case hearing in accordance with chapter 14. 
  2.26     Sec. 3.  Minnesota Statutes 2000, section 256L.02, 
  2.27  subdivision 3, is amended to read: 
  2.28     Subd. 3.  [FINANCIAL MANAGEMENT.] (a) The commissioner 
  2.29  shall manage spending for the MinnesotaCare program in a manner 
  2.30  that maintains a minimum reserve in accordance with section 
  2.31  16A.76.  As part of each state revenue and expenditure forecast, 
  2.32  the commissioner must make an assessment of the expected 
  2.33  expenditures for the covered services for the remainder of the 
  2.34  current biennium and for the following biennium.  The estimated 
  2.35  expenditure, including the reserve requirements described in 
  2.36  section 16A.76, shall be compared to an estimate of the revenues 
  3.1   that will be available in the health care access fund.  Based on 
  3.2   this comparison, and after consulting with the chairs of the 
  3.3   house ways and means committee and the senate finance committee, 
  3.4   and the legislative commission on health care access, the 
  3.5   commissioner shall, as necessary, make the adjustments specified 
  3.6   in paragraph (b) to ensure that expenditures remain within the 
  3.7   limits of available revenues for the remainder of the current 
  3.8   biennium and for the following biennium.  The commissioner shall 
  3.9   not hire additional staff using appropriations from the health 
  3.10  care access fund until the commissioner of finance makes a 
  3.11  determination that the adjustments implemented under paragraph 
  3.12  (b) are sufficient to allow MinnesotaCare expenditures to remain 
  3.13  within the limits of available revenues for the remainder of the 
  3.14  current biennium and for the following biennium. 
  3.15     (b) The adjustments the commissioner shall use must be 
  3.16  implemented in this order:  first, stop enrollment of single 
  3.17  adults and households without children; second, upon 45 days' 
  3.18  notice, stop coverage of single adults and households without 
  3.19  children already enrolled in the MinnesotaCare program; third, 
  3.20  upon 90 days' notice, decrease the premium subsidy amounts by 
  3.21  ten percent for families with gross annual income above 200 
  3.22  percent of the federal poverty guidelines; fourth, upon 90 days' 
  3.23  notice, decrease the premium subsidy amounts by ten percent for 
  3.24  families with gross annual income at or below 200 percent; and 
  3.25  fifth, require applicants to be uninsured for at least six 
  3.26  months prior to eligibility in the MinnesotaCare program.  If 
  3.27  these measures are insufficient to limit the expenditures to the 
  3.28  estimated amount of revenue, the commissioner shall further 
  3.29  limit enrollment or decrease premium subsidies. 
  3.30     Sec. 4.  Minnesota Statutes 2000, section 295.50, 
  3.31  subdivision 4, is amended to read: 
  3.32     Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
  3.33  provider" means: 
  3.34     (1) a person whose health care occupation is regulated or 
  3.35  required to be regulated by the state of Minnesota furnishing 
  3.36  any or all of the following goods or services directly to a 
  4.1   patient or consumer:  medical, surgical, optical, visual, 
  4.2   dental, hearing, nursing services, drugs, laboratory, diagnostic 
  4.3   or therapeutic services; 
  4.4      (2) a person who provides goods and services not listed in 
  4.5   clause (1) that qualify for reimbursement under the medical 
  4.6   assistance program provided under chapter 256B; 
  4.7      (3) a staff model health plan company; or 
  4.8      (4) an ambulance service required to be licensed; or 
  4.9      (5) a person who sells or repairs hearing aids and related 
  4.10  equipment or prescription eyewear. 
  4.11     (b) Health care provider does not include: 
  4.12     (1) hospitals; medical supplies distributors, except as 
  4.13  specified under paragraph (a), clause (5); nursing homes 
  4.14  licensed under chapter 144A or licensed in any other 
  4.15  jurisdiction; pharmacies; surgical centers; ambulance services; 
  4.16  bus and taxicab transportation, or any other providers of 
  4.17  transportation services other than ambulance services required 
  4.18  to be licensed; supervised living facilities for persons with 
  4.19  mental retardation or related conditions, licensed under 
  4.20  Minnesota Rules, parts 4665.0100 to 4665.9900; residential care 
  4.21  homes licensed under chapter 144B; board and lodging 
  4.22  establishments providing only custodial services that are 
  4.23  licensed under chapter 157 and registered under section 157.17 
  4.24  to provide supportive services or health supervision services; 
  4.25  adult foster homes as defined in Minnesota Rules, part 
  4.26  9555.5105; day training and habilitation services for adults 
  4.27  with mental retardation and related conditions as defined in 
  4.28  section 252.41, subdivision 3; and boarding care homes, as 
  4.29  defined in Minnesota Rules, part 4655.0100; 
  4.30     (2) home health agencies as defined in Minnesota Rules, 
  4.31  part 9505.0175, subpart 15; a person providing personal care 
  4.32  services and supervision of personal care services as defined in 
  4.33  Minnesota Rules, part 9505.0335; a person providing private duty 
  4.34  nursing services as defined in Minnesota Rules, part 9505.0360; 
  4.35  and home care providers required to be licensed under chapter 
  4.36  144A; 
  5.1      (3) a person who employs health care providers solely for 
  5.2   the purpose of providing patient services to its employees; and 
  5.3      (4) an educational institution that employs health care 
  5.4   providers solely for the purpose of providing patient services 
  5.5   to its students if the institution does not receive fee for 
  5.6   service payments or payments for extended coverage. 
  5.7      <b>[EFFECTIVE DATE.]</b> This section is effective for payments 
  5.8   received on or after June 30, 2000. 
  5.9      Sec. 5.  Minnesota Statutes 2000, section 295.52, is 
  5.10  amended by adding a subdivision to read: 
  5.11     Subd. 8.  [CONTINGENT ELIMINATION OF TAX.] The commissioner 
  5.12  shall establish tax rates for calendar years beginning on or 
  5.13  after January 1, 2002, based upon determinations made by the 
  5.14  commissioner of finance regarding the actual balance of the 
  5.15  health care access fund.  The commissioner of finance shall, on 
  5.16  September 1 of each year, beginning September 1, 2001, determine 
  5.17  the actual balance of the health care access fund for the fiscal 
  5.18  year that begins the following July 1.  If the commissioner of 
  5.19  finance determines on September 1 that for the following fiscal 
  5.20  year, the actual balance will be equal to or greater than 20 
  5.21  percent of the forecasted direct appropriations for the 
  5.22  MinnesotaCare program, no taxes shall be imposed under 
  5.23  subdivisions 1, 1a, 2, 3, and 4 for the calendar year that 
  5.24  begins immediately following that September 1.  If the 
  5.25  commissioner of finance determines on September 1 that the 
  5.26  actual balance in the fund will be less than 20 percent of the 
  5.27  forecasted direct appropriations for the MinnesotaCare program 
  5.28  for the following fiscal year, then the commissioner, in 
  5.29  consultation with the commissioner of finance, shall determine 
  5.30  the amount needed to eliminate the deficit and shall impose 
  5.31  taxes under subdivisions 1, 1a, 2, 3, and 4 for the calendar 
  5.32  year that begins immediately following that September 1.  The 
  5.33  commissioner shall determine the rate of the tax to the nearest 
  5.34  one-quarter of one percent up to two percent, using the lowest 
  5.35  of the rates that the commissioner determines will produce 
  5.36  sufficient revenue to restore the actual balance in the fund to 
  6.1   20 percent of the forecasted direct appropriations for the 
  6.2   MinnesotaCare program.  The commissioner shall publish in the 
  6.3   State Register by October 1 of each year, beginning October 1, 
  6.4   2001, the amount of the tax to be imposed for the following 
  6.5   calendar year.  In determining the actual balance of the health 
  6.6   care access fund under this subdivision, the commissioner of 
  6.7   finance shall not count revenues resulting from any increase in 
  6.8   the one percent premium tax under section 297I.05, subdivision 
  6.9   5, paragraph (b). 
  6.10     Sec. 6.  Minnesota Statutes 2000, section 297I.05, 
  6.11  subdivision 5, is amended to read: 
  6.12     Subd. 5.  [HEALTH MAINTENANCE ORGANIZATIONS, NONPROFIT 
  6.13  HEALTH SERVICE PLAN CORPORATIONS, AND COMMUNITY INTEGRATED 
  6.14  SERVICE NETWORKS.] (a) Health maintenance organizations, 
  6.15  community integrated service networks, and nonprofit health care 
  6.16  service plan corporations are exempt from the tax imposed under 
  6.17  this section for premiums received in calendar years 2001 and 
  6.18  2002. 
  6.19     (b) For calendar years after 2002, a contingent tax is 
  6.20  imposed on health maintenance organizations, community 
  6.21  integrated service networks, and nonprofit health care service 
  6.22  plan corporations.  The rate of tax is equal to one percent of 
  6.23  gross premiums less return premiums received in the calendar 
  6.24  year.  The commissioner of finance shall establish premium tax 
  6.25  rates for calendar years beginning on or after January 1, 2003, 
  6.26  based upon determinations made by the commissioner regarding the 
  6.27  actual balance of the health care access fund.  The commissioner 
  6.28  of finance shall, on September 1 of each year, beginning 
  6.29  September 1, 2002, determine actual balance of the health care 
  6.30  access fund for the fiscal year that begins the following July 
  6.31  1.  If the commissioner determines on September 1 that for the 
  6.32  following fiscal year, the actual balance will be equal to or 
  6.33  greater than 20 percent of the forecasted direct appropriations 
  6.34  for the MinnesotaCare program, no tax shall be imposed for the 
  6.35  calendar year that begins immediately following that September 
  6.36  1.  If the commissioner determines on September 1 that the 
  7.1   actual balance in the fund will be less than 20 percent of the 
  7.2   forecasted direct appropriations for the MinnesotaCare program 
  7.3   for the following fiscal year, then the commissioner, in 
  7.4   consultation with the commissioner of revenue, shall determine 
  7.5   the amount needed to eliminate the deficit and a tax shall be 
  7.6   imposed for the calendar year that begins immediately following 
  7.7   that September 1.  The commissioner shall determine the rate of 
  7.8   the tax as either one-quarter of one percent, one-half of one 
  7.9   percent, three-quarters of one percent, or one percent of gross 
  7.10  premiums, less return premiums received in the calendar year, 
  7.11  whichever is the lowest of those rates that the commissioner 
  7.12  determines will produce sufficient revenue to restore the actual 
  7.13  balance in the fund to 20 percent of the forecasted direct 
  7.14  appropriations for the MinnesotaCare program.  The commissioner 
  7.15  of finance shall publish in the State Register by October 1 of 
  7.16  each year, beginning October 1, 2002, the amount of tax to be 
  7.17  imposed for the following calendar year.  In determining the 
  7.18  actual balance of the health care access fund under this 
  7.19  paragraph, the commissioner of finance shall count revenues 
  7.20  resulting from any increase in taxes under section 295.52. 
  7.21     (c) In approving the premium rates as required in sections 
  7.22  62L.08, subdivision 8, and 62A.65, subdivision 3, the 
  7.23  commissioners of health and commerce shall ensure that any 
  7.24  exemption from tax as described in paragraph (a) is reflected in 
  7.25  the premium rate. 
  7.26     (d) The commissioner shall deposit all revenues, including 
  7.27  penalties and interest, collected under this chapter from health 
  7.28  maintenance organizations, community integrated service 
  7.29  networks, and nonprofit health service plan corporations in the 
  7.30  health care access fund.  Refunds of overpayments of tax imposed 
  7.31  by this subdivision must be paid from the health care access 
  7.32  fund.  There is annually appropriated from the health care 
  7.33  access fund to the commissioner the amount necessary to make any 
  7.34  refunds of the tax imposed under this subdivision. 
  7.35     Sec. 7.  [REPEALER.] 
  7.36     Minnesota Statutes 2000, sections 16A.76; 256.9657, 
  8.1   subdivisions 2 and 3; and 256B.19, subdivision 1b, are repealed.