1.1                          A bill for an act 
  1.2             relating to insurance; simplifying regulation of 
  1.3             health insurers and health maintenance organizations; 
  1.4             establishing a task force on small business health 
  1.5             insurance; providing appointments; amending Minnesota 
  1.6             Statutes 2000, sections 62D.08, subdivision 5; 62N.25, 
  1.7             subdivision 7; 62Q.19, subdivision 1; 256B.692, 
  1.8             subdivision 2; proposing coding for new law in 
  1.9             Minnesota Statutes, chapter 62D; repealing Minnesota 
  1.10            Statutes 2000, sections 62D.08, subdivision 5; 62Q.07. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 2000, section 62D.08, 
  1.13  subdivision 5, is amended to read: 
  1.14     Subd. 5.  [CHANGES IN PARTICIPATING ENTITIES; PENALTY.] 
  1.15  Every health maintenance organization shall inform the 
  1.16  commissioner of any change in the information described in 
  1.17  section 62D.03, subdivision 4, clause (e), including any change 
  1.18  in address, any modification of the duration of any contract or 
  1.19  agreement, and any addition to the list of participating 
  1.20  entities, within ten working days of the notification of the 
  1.21  change.  Any cancellation or discontinuance of any contract or 
  1.22  agreement listed in section 62D.03, subdivision 4, clause (e), 
  1.23  or listed subsequently in accordance with this subdivision, 
  1.24  shall be reported to the commissioner 120 days before the 
  1.25  effective date.  When the health maintenance organization 
  1.26  terminates a provider for cause, death, disability, or loss of 
  1.27  license, the health maintenance organization must notify the 
  1.28  commissioner within three ten working days of the date the 
  2.1   health maintenance organization sends out or receives the notice 
  2.2   of cancellation, discontinuance, or termination.  Any health 
  2.3   maintenance organization which fails to notify the commissioner 
  2.4   within the time periods prescribed in this subdivision shall be 
  2.5   subject to the levy of a fine up to $200 per contract for each 
  2.6   day the notice is past due, accruing up to the date the 
  2.7   organization notifies the commissioner of the cancellation or 
  2.8   discontinuance.  Any fine levied under this subdivision is 
  2.9   subject to the contested case and judicial review provisions of 
  2.10  chapter 14.  The levy of a fine does not preclude the 
  2.11  commissioner from using other penalties described in sections 
  2.12  62D.15 to 62D.17. 
  2.13     Sec. 2.  [62D.142] [AUDITS.] 
  2.14     The commissioner shall accept the results of a quality 
  2.15  assurance audit conducted by an independent organization and 
  2.16  require no further audit if the results of the independent audit 
  2.17  show that the health maintenance organization meets the 
  2.18  requirements of this chapter.  If the results of the independent 
  2.19  audit show that the health maintenance organization partially 
  2.20  meets the requirements of this chapter, the commissioner may 
  2.21  accept the audit and must limit further auditing to program 
  2.22  areas where fulfillment of the requirements of this chapter has 
  2.23  not been demonstrated.  The health maintenance organization must 
  2.24  demonstrate to the commissioner that the independent 
  2.25  organization that conducted the audit is qualified based upon 
  2.26  audit procedures and standards that are at least as complete as 
  2.27  governmental audit procedures and standards.  If the 
  2.28  commissioner has partially or fully accepted an independent 
  2.29  audit of the health maintenance organization, the commissioner 
  2.30  may use the finding of a deficiency with regard to statutes or 
  2.31  rules by the independent audit as the basis for a targeted audit 
  2.32  or enforcement action.  Nothing in this section may be construed 
  2.33  to preclude the commissioner from initiating and conducting any 
  2.34  investigation deemed necessary to enforce this chapter. 
  2.35     Sec. 3.  Minnesota Statutes 2000, section 62N.25, 
  2.36  subdivision 7, is amended to read: 
  3.1      Subd. 7.  [EXEMPTIONS FROM EXISTING REQUIREMENTS.] 
  3.2   Community integrated service networks are exempt from the 
  3.3   following requirements applicable to health maintenance 
  3.4   organizations: 
  3.5      (1) conducting focused studies under Minnesota Rules, part 
  3.6   4685.1125; 
  3.7      (2) preparing and filing, as a condition of licensure, a 
  3.8   written quality assurance plan, and annually filing such a plan 
  3.9   and a work plan, under Minnesota Rules, parts 4685.1110 and 
  3.10  4685.1130; 
  3.11     (3) maintaining statistics under Minnesota Rules, part 
  3.12  4685.1200; 
  3.13     (4) filing provider contract forms under sections 62D.03, 
  3.14  subdivision 4, and 62D.08, subdivision 1; and 
  3.15     (5) reporting any changes in the address of a network 
  3.16  provider or length of a provider contract or additions to the 
  3.17  provider network to the commissioner within ten days under 
  3.18  section 62D.08, subdivision 5.  Community networks must report 
  3.19  such information to the commissioner on a quarterly basis.  
  3.20  Community networks that fail to make the required quarterly 
  3.21  filing are subject to the penalties set forth in section 62D.08, 
  3.22  subdivision 5; and 
  3.23     (6) preparing and filing, as a condition of licensure, a 
  3.24  marketing plan, and annually filing a marketing plan, under 
  3.25  sections 62D.03, subdivision 4, paragraph (l), and 62D.08, 
  3.26  subdivision 1. 
  3.27     Sec. 4.  Minnesota Statutes 2000, section 62Q.19, 
  3.28  subdivision 1, is amended to read: 
  3.29     Subdivision 1.  [DESIGNATION.] The commissioner shall 
  3.30  designate essential community providers.  The criteria for 
  3.31  essential community provider designation shall be the following: 
  3.32     (1) a demonstrated ability to integrate applicable 
  3.33  supportive and stabilizing services with medical care for 
  3.34  uninsured persons and high-risk and special needs populations as 
  3.35  defined in section 62Q.07, subdivision 2, paragraph (e), 
  3.36  underserved, and other special needs populations; and 
  4.1      (2) a commitment to serve low-income and underserved 
  4.2   populations by meeting the following requirements: 
  4.3      (i) has nonprofit status in accordance with chapter 317A; 
  4.4      (ii) has tax exempt status in accordance with the Internal 
  4.5   Revenue Service Code, section 501(c)(3); 
  4.6      (iii) charges for services on a sliding fee schedule based 
  4.7   on current poverty income guidelines; and 
  4.8      (iv) does not restrict access or services because of a 
  4.9   client's financial limitation; 
  4.10     (3) status as a local government unit as defined in section 
  4.11  62D.02, subdivision 11, a hospital district created or 
  4.12  reorganized under sections 447.31 to 447.37, an Indian tribal 
  4.13  government, an Indian health service unit, or a community health 
  4.14  board as defined in chapter 145A; 
  4.15     (4) a former state hospital that specializes in the 
  4.16  treatment of cerebral palsy, spina bifida, epilepsy, closed head 
  4.17  injuries, specialized orthopedic problems, and other disabling 
  4.18  conditions; or 
  4.19     (5) a rural hospital that has qualified for a sole 
  4.20  community hospital financial assistance grant in the past three 
  4.21  years under section 144.1484, subdivision 1.  For these rural 
  4.22  hospitals, the essential community provider designation applies 
  4.23  to all health services provided, including both inpatient and 
  4.24  outpatient services. 
  4.25     Prior to designation, the commissioner shall publish the 
  4.26  names of all applicants in the State Register.  The public shall 
  4.27  have 30 days from the date of publication to submit written 
  4.28  comments to the commissioner on the application.  No designation 
  4.29  shall be made by the commissioner until the 30-day period has 
  4.30  expired. 
  4.31     The commissioner may designate an eligible provider as an 
  4.32  essential community provider for all the services offered by 
  4.33  that provider or for specific services designated by the 
  4.34  commissioner. 
  4.35     For the purpose of this subdivision, supportive and 
  4.36  stabilizing services include at a minimum, transportation, child 
  5.1   care, cultural, and linguistic services where appropriate. 
  5.2      Sec. 5.  Minnesota Statutes 2000, section 256B.692, 
  5.3   subdivision 2, is amended to read: 
  5.4      Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] (a) 
  5.5   Notwithstanding chapters 62D and 62N, a county that elects to 
  5.6   purchase medical assistance and general assistance medical care 
  5.7   in return for a fixed sum without regard to the frequency or 
  5.8   extent of services furnished to any particular enrollee is not 
  5.9   required to obtain a certificate of authority under chapter 62D 
  5.10  or 62N.  The county board of commissioners is the governing body 
  5.11  of a county-based purchasing program.  In a multicounty 
  5.12  arrangement, the governing body is a joint powers board 
  5.13  established under section 471.59.  
  5.14     (b) A county that elects to purchase medical assistance and 
  5.15  general assistance medical care services under this section must 
  5.16  satisfy the commissioner of health that the requirements for 
  5.17  assurance of consumer protection, provider protection, and 
  5.18  fiscal solvency of chapter 62D, applicable to health maintenance 
  5.19  organizations, or chapter 62N, applicable to community 
  5.20  integrated service networks, will be met.  
  5.21     (c) A county must also assure the commissioner of health 
  5.22  that the requirements of sections 62J.041; 62J.48; 62J.71 to 
  5.23  62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 
  5.24  62Q, including sections 62Q.07; 62Q.075; 62Q.1055; 62Q.106; 
  5.25  62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 
  5.26  62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64; 62Q.68 
  5.27  to 62Q.72; and 72A.201 will be met.  
  5.28     (d) All enforcement and rulemaking powers available under 
  5.29  chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 
  5.30  commissioner of health with respect to counties that purchase 
  5.31  medical assistance and general assistance medical care services 
  5.32  under this section.  
  5.33     (e) The commissioner, in consultation with county 
  5.34  government, shall develop administrative and financial reporting 
  5.35  requirements for county-based purchasing programs relating to 
  5.36  sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 
  6.1   62N.31, and other sections as necessary, that are specific to 
  6.2   county administrative, accounting, and reporting systems and 
  6.3   consistent with other statutory requirements of counties.  
  6.4      Sec. 6.  [TASK FORCE ON SMALL BUSINESS HEALTH INSURANCE.] 
  6.5      (a) The task force on small business health insurance shall 
  6.6   study Minnesota's health coverage market available to small 
  6.7   businesses and make recommendations for private market solutions 
  6.8   that could make group health coverage more accessible and 
  6.9   affordable for small businesses.  The task force shall recommend 
  6.10  any legislative changes needed to permit those private market 
  6.11  solutions. 
  6.12     (b) The task force shall report its recommendations in 
  6.13  writing to the legislature, in compliance with Minnesota 
  6.14  Statutes, section 3.195, no later than December 15, 2001. 
  6.15     (c) The commissioners of commerce and health shall provide 
  6.16  any necessary assistance to the task force. 
  6.17     (d) The task force consists of the following members: 
  6.18     (1) three members of the senate, including at least one 
  6.19  member of the minority, appointed by the subcommittee on 
  6.20  committees of the senate committee on rules and administration; 
  6.21     (2) three members of the house, including at least one 
  6.22  member of the minority, appointed by the speaker of the house; 
  6.23     (3) four persons representing small business owners, three 
  6.24  appointed by the Minnesota chamber of commerce and one appointed 
  6.25  by the national federation of independent business; 
  6.26     (4) two persons appointed by the Minnesota council of 
  6.27  health plans; 
  6.28     (5) one person appointed by the insurance federation of 
  6.29  Minnesota; 
  6.30     (6) one insurance agent, appointed by the Minnesota 
  6.31  association of health underwriters; 
  6.32     (7) the commissioner of commerce or the commissioner's 
  6.33  designee; and 
  6.34     (8) four consumers appointed by the commissioner, two of 
  6.35  whom must reside outside the metropolitan area as defined in 
  6.36  Minnesota Statutes, section 473.121, subdivision 2. 
  7.1      (e) The task force shall not provide compensation or 
  7.2   expense reimbursement to its members. 
  7.3      (f) The task force expires on June 30, 2002. 
  7.4      Sec. 7.  [REPEALER.] 
  7.5      Minnesota Statutes 2000, sections 62D.08, subdivision 5; 
  7.6   and 62Q.07, are repealed. 
  7.7      Sec. 8.  [EFFECTIVE DATE.] 
  7.8      Sections 1 to 7 are effective the day following final 
  7.9   enactment.