1.1                          A bill for an act 
  1.2             relating to taxation; requiring certain third-party 
  1.3             purchasers to comply with provisions authorizing 
  1.4             transfer of the health care provider tax; amending 
  1.5             Minnesota Statutes 2002, section 295.582. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 295.582, is 
  1.8   amended to read: 
  1.9      295.582 [AUTHORITY.] 
  1.10     (a) A hospital, surgical center, or health care provider 
  1.11  that is subject to a tax under section 295.52, or a pharmacy 
  1.12  that has paid additional expense transferred under this section 
  1.13  by a wholesale drug distributor, may transfer additional expense 
  1.14  generated by section 295.52 obligations on to all third-party 
  1.15  contracts for the purchase of health care services on behalf of 
  1.16  a patient or consumer.  The additional expense transferred to 
  1.17  the third-party purchaser must not exceed the tax percentage 
  1.18  specified in section 295.52 multiplied against the gross 
  1.19  revenues received under the third-party contract, and the tax 
  1.20  percentage specified in section 295.52 multiplied against 
  1.21  co-payments and deductibles paid by the individual patient or 
  1.22  consumer.  The expense must not be generated on revenues derived 
  1.23  from payments that are excluded from the tax under section 
  1.24  295.53.  All third-party purchasers of health care services 
  1.25  including, but not limited to, third-party purchasers regulated 
  2.1   under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, 
  2.2   or 79A, or under section 471.61 or 471.617, must pay the 
  2.3   transferred expense in addition to any payments due under 
  2.4   existing contracts with the hospital, surgical center, pharmacy, 
  2.5   or health care provider, to the extent allowed under federal 
  2.6   law.  A third-party purchaser of health care services includes, 
  2.7   but is not limited to, a health carrier or community integrated 
  2.8   service network that pays for health care services on behalf of 
  2.9   patients or that reimburses, indemnifies, compensates, or 
  2.10  otherwise insures patients for health care services.  A 
  2.11  third-party purchaser shall comply with this section regardless 
  2.12  of whether the third-party purchaser is a for-profit, 
  2.13  not-for-profit, or nonprofit entity or whether the health care 
  2.14  provider has chosen to itemize the tax on patient billings.  A 
  2.15  wholesale drug distributor may transfer additional expense 
  2.16  generated by section 295.52 obligations to entities that 
  2.17  purchase from the wholesaler, and the entities must pay the 
  2.18  additional expense.  Nothing in this section limits the ability 
  2.19  of a hospital, surgical center, pharmacy, wholesale drug 
  2.20  distributor, or health care provider to recover all or part of 
  2.21  the section 295.52 obligation by other methods, including 
  2.22  increasing fees or charges.  If a provider elects to separately 
  2.23  itemize the tax on the patient's bill, a third-party purchaser 
  2.24  that has already incorporated the tax in its calculation of the 
  2.25  payment amount due to the provider may deduct the additional 
  2.26  itemized tax amount from the payment made to the provider. 
  2.27     (b) Each third-party purchaser regulated under any chapter 
  2.28  cited in paragraph (a) shall include with its annual renewal for 
  2.29  certification of authority or licensure documentation indicating 
  2.30  compliance with paragraph (a).  
  2.31     (c) Any hospital, surgical center, or health care provider 
  2.32  subject to a tax under section 295.52 or a pharmacy that has 
  2.33  paid additional expense transferred under this section by a 
  2.34  wholesale drug distributor may file a complaint with the 
  2.35  commissioner responsible for regulating the third-party 
  2.36  purchaser if at any time the third-party purchaser fails to 
  3.1   comply with paragraph (a).  
  3.2      (d) If the commissioner responsible for regulating the 
  3.3   third-party purchaser finds at any time that the third-party 
  3.4   purchaser has not complied with paragraph (a), the commissioner 
  3.5   may take enforcement action against a third-party purchaser 
  3.6   which is subject to the commissioner's regulatory jurisdiction 
  3.7   and which does not allow a hospital, surgical center, pharmacy, 
  3.8   or provider to pass-through the tax.  The commissioner may by 
  3.9   order fine or censure the third-party purchaser or revoke or 
  3.10  suspend the certificate of authority or license of the 
  3.11  third-party purchaser to do business in this state if the 
  3.12  commissioner finds that the third-party purchaser has not 
  3.13  complied with this section.  The third-party purchaser may 
  3.14  appeal the commissioner's order through a contested case hearing 
  3.15  in accordance with chapter 14.  
  3.16     Sec. 2.  [EFFECTIVE DATE; APPLICATION.] 
  3.17     Section 1 is effective January 1, 2005, and applies to 
  3.18  actions arising from services provided on or after that date.