1.1                          A bill for an act 
  1.2             relating to health; permitting a health maintenance 
  1.3             organization rural demonstration project; modifying 
  1.4             enrollee cost-sharing provisions for health 
  1.5             maintenance organizations; amending Minnesota Statutes 
  1.6             2000, sections 62D.02, subdivision 8; 62D.30, by 
  1.7             adding a subdivision; proposing coding for new law in 
  1.8             Minnesota Statutes, chapter 62D. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 62D.02, 
  1.11  subdivision 8, is amended to read: 
  1.12     Subd. 8.  [HEALTH MAINTENANCE CONTRACT.] "Health 
  1.13  maintenance contract" means any contract whereby a health 
  1.14  maintenance organization agrees to provide to enrollees 
  1.15  comprehensive health maintenance services to enrollees, provided 
  1.16  that and any other health care service set forth in the 
  1.17  contract.  The contract may contain reasonable enrollee 
  1.18  copayment cost-sharing provisions if the provisions meet the 
  1.19  requirements of section 62D.095.  An individual or group health 
  1.20  maintenance contract may contain the copayment and deductible 
  1.21  provisions specified in this subdivision.  Copayment and 
  1.22  deductible provisions in group contracts shall not discriminate 
  1.23  on the basis of age, sex, race, length of enrollment in the 
  1.24  plan, or economic status; and during every open enrollment 
  1.25  period in which all offered health benefit plans, including 
  1.26  those subject to the jurisdiction of the commissioners of 
  1.27  commerce or health, fully participate without any underwriting 
  2.1   restrictions, copayment and deductible provisions shall not 
  2.2   discriminate on the basis of preexisting health status.  In no 
  2.3   event shall the sum of the annual copayments and deductible 
  2.4   exceed the maximum out-of-pocket expenses allowable for a number 
  2.5   three qualified plan under section 62E.06, nor shall that sum 
  2.6   exceed $5,000 per family.  The annual deductible must not exceed 
  2.7   $1,000 per person.  The annual deductible must not apply to 
  2.8   preventive health services as described in Minnesota Rules, part 
  2.9   4685.0801, subpart 8.  Where sections 62D.01 to 62D.30 permit a 
  2.10  health maintenance organization to contain reasonable copayment 
  2.11  provisions for preexisting health status, these provisions may 
  2.12  vary with respect to length of enrollment in the plan.  Any 
  2.13  contract may provide for health care services in addition to 
  2.14  those set forth in subdivision 7. 
  2.15     Sec. 2.  [62D.095] [ENROLLEE COST SHARING.] 
  2.16     Subdivision 1.  [GENERAL APPLICATION.] A health maintenance 
  2.17  contract may contain enrollee cost-sharing provisions as 
  2.18  specified in this section.  Co-payment and deductible provisions 
  2.19  in a group contract must not discriminate on the basis of age, 
  2.20  sex, race, disability, economic status, or length of enrollment 
  2.21  in the health plan.  During an open enrollment period in which 
  2.22  all offered health plans fully participate without any 
  2.23  underwriting restrictions, co-payment and deductible provisions 
  2.24  must not discriminate on the basis of preexisting health status. 
  2.25     Subd. 2.  [CO-PAYMENTS.] (a) A health maintenance contract 
  2.26  may impose a co-payment as authorized under Minnesota Rules, 
  2.27  part 4685.0801, or under this section.  
  2.28     (b) A health maintenance contract may impose a flat fee 
  2.29  co-payment not to exceed 50 percent of the median charges for 
  2.30  all outpatient prescription drugs received by enrollees.  Any 
  2.31  co-payment imposed on outpatient prescription drugs must not 
  2.32  exceed an annual sum of $500 per person.  This paragraph does 
  2.33  not apply to Medicare-related coverage as defined under section 
  2.34  62A.31, subdivision 3, paragraph (q).  
  2.35     (c) If a health maintenance contract is permitted to impose 
  2.36  a co-payment for preexisting health status under sections 62D.01 
  3.1   to 62D.30, these provisions may vary with respect to length of 
  3.2   enrollment in the health plan.  
  3.3      Subd. 3.  [DEDUCTIBLES.] A health maintenance contract may 
  3.4   impose deductibles not to exceed $1,000 per person, per year.  
  3.5      Subd. 4.  [ANNUAL OUT-OF-POCKET MAXIMUMS.] A health 
  3.6   maintenance contract must include a limitation not to exceed 
  3.7   $5,000 per family and $3,000 per person on total annual 
  3.8   out-of-pocket enrollee cost-sharing expenses. 
  3.9      Subd. 5.  [EXCEPTIONS.] No co-payments may be imposed on 
  3.10  preventive health care services as described in Minnesota Rules, 
  3.11  part 4685.0801, subpart 8. 
  3.12     Sec. 3.  Minnesota Statutes 2000, section 62D.30, is 
  3.13  amended by adding a subdivision to read: 
  3.14     Subd. 8.  [RURAL DEMONSTRATION PROJECT.] (a) The 
  3.15  commissioner may permit demonstration projects to allow health 
  3.16  maintenance organizations to extend coverage to a health 
  3.17  improvement and purchasing coalition located in rural Minnesota, 
  3.18  comprised of the health maintenance organization and members 
  3.19  from a geographic area.  For purposes of this subdivision, rural 
  3.20  is defined as greater Minnesota excluding the seven-county 
  3.21  metropolitan area of Anoka, Carver, Dakota, Hennepin, Ramsey, 
  3.22  Scott, and Washington.  The coalition must be designed in such a 
  3.23  way that members will: 
  3.24     (1) become better informed about health care trends and 
  3.25  cost increases; 
  3.26     (2) be actively engaged in the design of health benefit 
  3.27  options that will meet the needs of their community; 
  3.28     (3) pool their insurance risk; 
  3.29     (4) purchase these products from the health maintenance 
  3.30  organization involved in the demonstration project; and 
  3.31     (5) actively participate in health improvement decisions 
  3.32  for their community. 
  3.33     (b) The commissioner must consider the following when 
  3.34  approving applications for rural demonstration projects: 
  3.35     (1) the extent of consumer involvement in development of 
  3.36  the project; 
  4.1      (2) the degree to which the project is likely to reduce the 
  4.2   number of uninsured or to maintain existing coverage; and 
  4.3      (3) a plan to evaluate and report to the commissioner and 
  4.4   legislature as prescribed by paragraph (e). 
  4.5      (c) For purposes of this subdivision, the commissioner must 
  4.6   waive compliance with the following statutes and rules:  the 
  4.7   cost-sharing restrictions under section 62D.095, subdivisions 2 
  4.8   to 5, and Minnesota Rules, part 4685.0801, subparts 1 to 7; for 
  4.9   a period of at least two years, participation in government 
  4.10  programs under section 62D.04, subdivision 5, in the counties of 
  4.11  the demonstration project if that compliance would have been 
  4.12  required solely due to participation in the demonstration 
  4.13  project and shall continue to waive this requirement beyond two 
  4.14  years if the enrollment in the demonstration project is less 
  4.15  than 10,000 enrollees; small employer marketing under section 
  4.16  62L.05, subdivisions 1 to 3; and small employer geographic 
  4.17  premium variations under section 62L.08, subdivision 4.  The 
  4.18  commissioner shall approve enrollee cost-sharing features 
  4.19  desired by the coalition that appropriately share costs between 
  4.20  employers, individuals, and the health maintenance organization. 
  4.21     (d) The health maintenance organization may make the 
  4.22  starting date of the project contingent upon a minimum number of 
  4.23  enrollees as cited in the application, provide for an initial 
  4.24  term of contract with the purchasers of a minimum of three 
  4.25  years, and impose a reasonable penalty for employers who 
  4.26  withdraw early from the project.  For purposes of this 
  4.27  subdivision, loss ratios are to be determined as if the policies 
  4.28  issued under this section are considered individual or small 
  4.29  employer policies pursuant to section 62A.021, subdivision 1, 
  4.30  paragraph (f).  The health maintenance organization may consider 
  4.31  businesses of one to be a small employer under section 62L.02, 
  4.32  subdivision 26.  The health maintenance organization may limit 
  4.33  enrollment and establish enrollment criteria for businesses of 
  4.34  one.  Health improvement and purchasing coalitions under this 
  4.35  subdivision are not associations under section 62L.045, 
  4.36  subdivision 1, paragraph (a). 
  5.1      (e) The health improvement and purchasing coalition must 
  5.2   report to the commissioner and legislature annually on the 
  5.3   progress of the demonstration project and, to the extent 
  5.4   possible, any significant findings in the criteria listed in 
  5.5   clauses (1), (2), and (3) for the final report.  The coalition 
  5.6   must submit a final report five years from the starting date of 
  5.7   the project.  The final report must detail significant findings 
  5.8   from the project and must include, to the extent available, but 
  5.9   should not be limited to, information on the following: 
  5.10     (1) the extent to which the project had an impact on the 
  5.11  number of uninsured in the project area; 
  5.12     (2) the effect on health coverage premiums for groups in 
  5.13  the project's geographic area, including those purchasing health 
  5.14  coverage outside the health improvement and purchasing 
  5.15  coalition; and 
  5.16     (3) the degree to which health care consumers were involved 
  5.17  in the development and implementation of the demonstration 
  5.18  project. 
  5.19     (f) The commissioner must limit the number of demonstration 
  5.20  projects under this subdivision to five projects. 
  5.21     (g) Approval of the application for the demonstration 
  5.22  project is deemed to be in compliance with sections 62E.03 and 
  5.23  62E.06, subdivisions 1, paragraph (a), 2, and 3. 
  5.24     (h) Subdivisions 2 to 7 apply to demonstration projects 
  5.25  under this subdivision.  Waivers permitted under subdivision 1 
  5.26  do not apply to demonstration projects under this subdivision. 
  5.27     (i) If a demonstration project under this subdivision works 
  5.28  in conjunction with a purchasing alliance formed under chapter 
  5.29  62T, that chapter will apply to the purchasing alliance except 
  5.30  to the extent that chapter 62T is inconsistent with this 
  5.31  subdivision. 
  5.32     Sec. 4.  [EFFECTIVE DATE.] 
  5.33     Section 3 is effective the day following final enactment.