1.1 	A bill for an act
1.2 	relating to health; establishing the Minnesota Health Insurance Exchange; 
1.3 	establishing evidence-based health care guidelines; requiring all hospitals and 
1.4 	health care providers to have an electronic health records system by a certain 
1.5 	date; establishing an electronic health record system revolving account and loan 
1.6 	program; establishing a uniform electronic transactions and implementation 
1.7 	guide standards; establishing a Health Care Transformation Task Force; defining 
1.8 	evaluation parameters for provider performance; establishing a goal of achieving 
1.9 	access to affordable health care by 2011 for all Minnesota residents; requiring 
1.10 	certain hospitals to report on community benefits; encouraging communities 
1.11 	to coordinate health and wellness programs; requiring health care payment 
1.12 	system reform; establishing community collaborative pilot projects to cover the 
1.13 	uninsured; establishing health care payment reform pilot projects; requiring 
1.14 	a study of health care system consolidation; appropriating money;amending 
1.15 	Minnesota Statutes 2006, sections 62A.65, subdivision 3; 62E.141; 62J.04, 
1.16 	subdivision 3; 62J.495; 62J.60, by adding a subdivision; 62J.692, subdivisions 1, 
1.17 	4, 7a, 8, 10; 62J.81, subdivision 1; 62J.82; 62L.12, subdivisions 2, 4; 62Q.165, 
1.18 	subdivisions 1, 2; 62Q.80, subdivisions 3, 4, 13, 14; 144.698, subdivision 1; 
1.19 	144.699, by adding a subdivision; 256.01, subdivision 2b; 256B.0625, by adding 
1.20 	a subdivision; proposing coding for new law in Minnesota Statutes, chapters 
1.21 	62A; 62J; 62Q; 145; repealing Minnesota Statutes 2006, section 62J.052, 
1.22 	subdivision 1.
1.23 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.24 	Section 1. Minnesota Statutes 2006, section 62A.65, subdivision 3, is amended to read:
1.25 		Subd. 3.Premium rate restrictions. No individual health plan may be offered, 
1.26 	sold, issued, or renewed to a Minnesota resident unless the premium rate charged is 
1.27 	determined in accordance with the following requirements:
1.28 	(a) Premium rates must be no more than 25 percent above and no more than 25 
1.29 	percent below the index rate charged to individuals for the same or similar coverage, 
1.30 	adjusted pro rata for rating periods of less than one year. The premium variations 
1.31 	permitted by this paragraph must be based only upon health status, claims experience, 
2.1 	and occupation. For purposes of this paragraph, health status includes refraining from 
2.2 	tobacco use or other actuarially valid lifestyle factors associated with good health, 
2.3 	provided that the lifestyle factor and its effect upon premium rates have been determined 
2.4 	by the commissioner to be actuarially valid and have been approved by the commissioner. 
2.5 	Variations permitted under this paragraph must not be based upon age or applied 
2.6 	differently at different ages. This paragraph does not prohibit use of a constant percentage 
2.7 	adjustment for factors permitted to be used under this paragraph.
2.8 	(b) Premium rates may vary based upon the ages of covered persons only as 
2.9 	provided in this paragraph. In addition to the variation permitted under paragraph (a), 
2.10 	each health carrier may use an additional premium variation based upon age for adults 
2.11 	aged 19 and above of up to plus or minus 50 percent of the index rate. Premium rates for 
2.12 	children under the age of 19 may not vary based on age, regardless of whether the child is 
2.13 	covered as a dependent or as a primary insured.
2.14 	(c) A health carrier may request approval by the commissioner to establish separate 
2.15 	geographic regions determined by the health carrier and to establish separate index rates 
2.16 	for each such region. The commissioner shall grant approval if the following conditions 
2.17 	are met: 
2.18 	(1) the geographic regions must be applied uniformly by the health carrier;
2.19 	(2) each geographic region must be composed of no fewer than seven counties that 
2.20 	create a contiguous region; and
2.21 	(3) the health carrier provides actuarial justification acceptable to the commissioner 
2.22 	for the proposed geographic variations in index rates, establishing that the variations are 
2.23 	based upon differences in the cost to the health carrier of providing coverage.
2.24 	(d) Health carriers may use rate cells and must file with the commissioner the rate 
2.25 	cells they use. Rate cells must be based upon the number of adults or children covered 
2.26 	under the policy and may reflect the availability of Medicare coverage. The rates for 
2.27 	different rate cells must not in any way reflect generalized differences in expected costs 
2.28 	between principal insureds and their spouses.
2.29 	(e) In developing its index rates and premiums for a health plan, a health carrier shall 
2.30 	take into account only the following factors:
2.31 	(1) actuarially valid differences in rating factors permitted under paragraphs (a) 
2.32 	and (b); and
2.33 	(2) actuarially valid geographic variations if approved by the commissioner as 
2.34 	provided in paragraph (c).
3.1 	(f) All premium variations must be justified in initial rate filings and upon request of 
3.2 	the commissioner in rate revision filings. All rate variations are subject to approval by 
3.3 	the commissioner.
3.4 	(g) The loss ratio must comply with the section 62A.021 requirements for individual 
3.5 	health plans. 
3.6 	(h) The rates must not be approved, unless the commissioner has determined that the 
3.7 	rates are reasonable. In determining reasonableness, the commissioner shall consider the 
3.8 	growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar 
3.9 	year or years that the proposed premium rate would be in effect, actuarially valid changes 
3.10 	in risks associated with the enrollee populations, and actuarially valid changes as a result 
3.11 	of statutory changes in Laws 1992, chapter 549. 
3.12 	(i) An insurer may, as part of a minimum lifetime loss ratio guarantee filing under 
3.13 	section 62A.02, subdivision 3a, include a rating practices guarantee as provided in this 
3.14 	paragraph. The rating practices guarantee must be in writing and must guarantee that 
3.15 	the policy form will be offered, sold, issued, and renewed only with premium rates and 
3.16 	premium rating practices that comply with subdivisions 2, 3, 4, and 5. The rating practices 
3.17 	guarantee must be accompanied by an actuarial memorandum that demonstrates that the 
3.18 	premium rates and premium rating system used in connection with the policy form will 
3.19 	satisfy the guarantee. The guarantee must guarantee refunds of any excess premiums to 
3.20 	policyholders charged premiums that exceed those permitted under subdivision 2, 3, 4, 
3.21 	or 5. An insurer that complies with this paragraph in connection with a policy form is 
3.22 	exempt from the requirement of prior approval by the commissioner under paragraphs 
3.23 	(c), (f), and (h).

3.24 	Sec. 2. [62A.67] MINNESOTA HEALTH INSURANCE EXCHANGE.
3.25 		Subdivision 1.Title; citation. This section may be cited as the "Minnesota Health 
3.26 	Insurance Exchange."
3.27 		Subd. 2.Creation; tax exemption. The Minnesota Health Insurance Exchange 
3.28 	is created for the limited purpose of providing individuals with greater access, choice, 
3.29 	portability, and affordability of health insurance products. The Minnesota Health 
3.30 	Insurance Exchange is a not-for-profit corporation under chapter 317A and section 501(c) 
3.31 	of the Internal Revenue Code.
3.32 		Subd. 3.Definitions. The following terms have the meanings given them unless 
3.33 	otherwise provided in text.
3.34 	(a) "Board" means the board of directors of the Minnesota Health Insurance 
3.35 	Exchange under subdivision 13.
4.1 	(b) "Commissioner" means: 
4.2 	(1) the commissioner of commerce for health insurers subject to the jurisdiction 
4.3 	of the Department of Commerce; 
4.4 	(2) the commissioner of health for health insurers subject to the jurisdiction of the 
4.5 	Department of Health; or 
4.6 	(3) either commissioner's designated representative.
4.7 	(c) "Exchange" means the Minnesota Health Insurance Exchange.
4.8 	(d) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996.
4.9 	(e) "Individual market health plans," unless otherwise specified, means individual 
4.10 	market health plans defined in section 62A.011.
4.11 	(f) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125 of 
4.12 	the Internal Revenue Code that allows employees to pay for health insurance premiums 
4.13 	with pretax dollars.
4.14 		Subd. 4.Insurer and health plan participation. All health plans as defined in 
4.15 	section 62A.011, subdivision 3, issued or renewed in the individual market shall participate 
4.16 	in the exchange. No health plans in the individual market may be issued or renewed 
4.17 	outside of the exchange. Group health plans as defined in section 62A.10 shall not be 
4.18 	offered through the exchange. Health plans offered through the Minnesota Comprehensive 
4.19 	Health Association as defined in section 62E.10 are offered through the exchange to 
4.20 	eligible enrollees as determined by the Minnesota Comprehensive Health Association. 
4.21 	Health plans offered through MinnesotaCare under chapter 256L are offered through the 
4.22 	exchange to eligible enrollees as determined by the commissioner of human services.
4.23 		Subd. 5.Approval of health plans. No health plan may be offered through the 
4.24 	exchange unless the commissioner has first certified that:
4.25 	(1) the insurer seeking to offer the health plan is licensed to issue health insurance in 
4.26 	the state; and
4.27 	(2) the health plan meets the requirements of this section, and the health plan and the 
4.28 	insurer are in compliance with all other applicable health insurance laws.
4.29 		Subd. 6.Individual market health plans. Individual market health plans offered 
4.30 	through the exchange continue to be regulated by the commissioner as specified in 
4.31 	chapters 62A, 62C, 62D, 62E, 62Q, and 72A, and must include the following provisions 
4.32 	that apply to all health plans issued or renewed through the exchange:
4.33 	(1) premiums for children under the age of 19 shall not vary by age in the exchange; 
4.34 	and
4.35 	(2) premiums for children under the age of 19 must be excluded from rating factors 
4.36 	under section 62A.65, subdivision 3, paragraph (b).
5.1 		Subd. 7.Individual participation and eligibility. Individuals are eligible to 
5.2 	purchase health plans directly through the exchange or through an employer Section 
5.3 	125 Plan under section 62A.68. Nothing in this section requires guaranteed issue of 
5.4 	individual market health plans offered through the exchange. Individuals are eligible to 
5.5 	purchase individual market health plans through the exchange by meeting one or more 
5.6 	of the following qualifications:
5.7 	(1) the individual is a Minnesota resident, meaning the individual is physically 
5.8 	residing on a permanent basis in a place that is the person's principal residence and from 
5.9 	which the person is absent only for temporary purposes;
5.10 	(2) the individual is a student attending an institution outside of Minnesota and 
5.11 	maintains Minnesota residency;
5.12 	(3) the individual is not a Minnesota resident but is employed by an employer 
5.13 	physically located within the state and the individual's employer is required to offer a 
5.14 	Section 125 Plan under section 62A.68;
5.15 	(4) the individual is not a Minnesota resident but is self-employed and the 
5.16 	individual's principal place of business is in the state; or
5.17 	(5) the individual is a dependent, as defined in section 62L.02, of another individual 
5.18 	who is eligible to participate in the exchange.
5.19 		Subd. 8.Continuation of coverage. Enrollment in a health plan may be canceled 
5.20 	for nonpayment of premiums, fraud, or changes in eligibility for MinnesotaCare under 
5.21 	chapter 256L. Enrollment in an individual market health plan may not be canceled or 
5.22 	nonrenewed because of any change in employer or employment status, marital status, 
5.23 	health status, age, residence, or any other change that does not affect eligibility as defined 
5.24 	in this section.
5.25 		Subd. 9.Responsibilities of the exchange. The exchange shall serve as the sole 
5.26 	entity for enrollment and collection and transfer of premium payments for health plans 
5.27 	sold to individuals through the exchange. The exchange shall be responsible for the 
5.28 	following functions:
5.29 	(1) publicize the exchange, including but not limited to its functions, eligibility 
5.30 	rules, and enrollment procedures;
5.31 	(2) provide assistance to employers to establish Section 125 Plans under section 
5.32 	62A.68;
5.33 	(3) provide education and assistance to employers to help them understand the 
5.34 	requirements of Section 125 Plans and compliance with applicable regulations;
5.35 	(4) create a system to allow individuals to compare and enroll in health plans offered 
5.36 	through the exchange;
6.1 	(5) create a system to collect and transmit to the applicable plans all premium 
6.2 	payments made by individuals, including developing mechanisms to receive and process 
6.3 	automatic payroll deductions for individuals who purchase coverage through employer 
6.4 	Section 125 Plans;
6.5 	(6) not accept premium payments for individual market health plans from an 
6.6 	employer Section 125 Plan if the employer offers a group health plan as defined in section 
6.7 	62A.10 or has offered a group health plan in the last 12 months, or if the employer is a 
6.8 	self-insurer as defined in section 62E.02;
6.9 	(7) provide jointly with health insurers a cancellation notice directly to the primary 
6.10 	insured at least ten days prior to termination of coverage for nonpayment of premium;
6.11 	(8) bill the employer for the premiums payable by an employee, provided that the 
6.12 	employer is not liable for payment except from payroll deductions for that purpose;
6.13 	(9) refer individuals interested in MinnesotaCare under chapter 256L to the 
6.14 	Department of Human Services to determine eligibility;
6.15 	(10) establish a mechanism with the Department of Human Services to transfer 
6.16 	premiums and subsidies for MinnesotaCare to qualify for federal matching payments;
6.17 	(11) upon request, issue certificates of previous coverage according to the provisions 
6.18 	of HIPAA and as referenced in section 62Q.181 to all such individuals who cease to be 
6.19 	covered by a participating health plan through the exchange;
6.20 	(12) establish procedures to account for all funds received and disbursed by the 
6.21 	exchange for individual participants of the exchange; 
6.22 	(13) make available to the public, at the end of each calendar year, a report of an 
6.23 	independent audit of the exchange's accounts; and
6.24 	(14) provide copies of written and signed statements from employers stating that 
6.25 	the employer is not contributing to the employee's premiums for health plans purchased 
6.26 	by an employee through the exchange to all health insurers with enrolled employees of 
6.27 	the employer.
6.28 	Health insurers may rely on the employer's statement in clause (14) provided by the 
6.29 	Minnesota Health Insurance Exchange and are not required to guarantee-issue individual 
6.30 	health plans to the employer's employees.
6.31 		Subd. 10.State not liable. The state of Minnesota shall not be liable for the actions 
6.32 	of the Minnesota Health Insurance Exchange.
6.33 		Subd. 11.Powers of the exchange. The exchange shall have the power to:
6.34 	(1) contract with insurance producers licensed in accident and health insurance 
6.35 	under chapter 60K and vendors to perform one or more of the functions specified in 
6.36 	subdivision 9;
7.1 	(2) contract with employers to collect premiums through a Section 125 Plan for 
7.2 	eligible individuals who purchase an individual market health plan through the exchange;
7.3 	(3) establish and assess fees on health plan premiums of health plans purchased 
7.4 	through the exchange to fund the cost of administering the exchange;
7.5 	(4) seek and directly receive grant funding from government agencies or private 
7.6 	philanthropic organizations to defray the costs of operating the exchange;
7.7 	(5) establish and administer rules and procedures governing the operations of the 
7.8 	exchange;
7.9 	(6) establish one or more service centers within Minnesota;
7.10 	(7) sue or be sued or otherwise take any necessary or proper legal action;
7.11 	(8) establish bank accounts and borrow money; and
7.12 	(9) enter into agreements with the commissioners of commerce, health, human 
7.13 	services, revenue, employment and economic development, and other state agencies as 
7.14 	necessary for the exchange to implement the provisions of this section.
7.15 		Subd. 12.Dispute resolution. The exchange shall establish procedures for 
7.16 	resolving disputes with respect to the eligibility of an individual to participate in the 
7.17 	exchange. The exchange does not have the authority or responsibility to intervene in or 
7.18 	resolve disputes between an individual and a health plan or health insurer. The exchange 
7.19 	shall refer complaints from individuals participating in the exchange to the commissioner 
7.20 	of health to be resolved according to sections 62Q.68 to 62Q.73.
7.21 		Subd. 13.Governance. The exchange shall be governed by a board of directors 
7.22 	with 11 members. The board shall convene on or before July 1, 2007, after the initial board 
7.23 	members have been selected. The initial board membership consists of the following:
7.24 	(1) the commissioner of commerce;
7.25 	(2) the commissioner of human services;
7.26 	(3) the commissioner of health;
7.27 	(4) four members appointed by a joint committee of the Minnesota senate and the 
7.28 	Minnesota house of representatives to serve three-year terms; and
7.29 	(5) four members appointed by the governor to serve three-year terms.
7.30 		Subd. 14.Subsequent board membership. Ongoing membership of the exchange 
7.31 	consists of the following effective July 1, 2010:
7.32 	(1) the commissioner of commerce;
7.33 	(2) the commissioner of human services;
7.34 	(3) the commissioner of health;
7.35 	(4) two members appointed by the governor with the approval of a joint committee 
7.36 	of the senate and house of representatives to serve two-year terms; and
8.1 	(5) six members elected by the membership of the exchange of which three are 
8.2 	elected to serve two-year terms and three are elected to serve three-year terms. Appointed 
8.3 	and elected members may serve more than one term.
8.4 		Subd. 15.Operations of the board. Officers of the board of directors are elected by 
8.5 	members of the board and serve one-year terms. Six members of the board constitutes a 
8.6 	quorum, and the affirmative vote of six members of the board is necessary and sufficient 
8.7 	for any action taken by the board. Board members serve without pay, but are reimbursed 
8.8 	for actual expenses incurred in the performance of their duties.
8.9 		Subd. 16.Operations of the exchange. The board of directors shall appoint an 
8.10 	exchange director who shall:
8.11 	(1) be a full-time employee of the exchange;
8.12 	(2) administer all of the activities and contracts of the exchange; and 
8.13 	(3) hire and supervise the staff of the exchange.
8.14 		Subd. 17.Insurance producers. An individual has the right to choose any 
8.15 	insurance producer licensed in accident and health insurance under chapter 60K to assist 
8.16 	the individual in purchasing an individual market health plan through the exchange. 
8.17 	When a producer licensed in accident and health insurance under chapter 60K enrolls an 
8.18 	eligible individual in the exchange, the health plan chosen by an individual may pay the 
8.19 	producer a commission.
8.20 		Subd. 18.Implementation. Health plan coverage through the exchange begins on 
8.21 	January 1, 2009. The exchange must be operational to assist employers and individuals 
8.22 	by September 1, 2008, and be prepared for enrollment by December 1, 2008. Enrollees 
8.23 	of individual market health plans, MinnesotaCare, and the Minnesota Comprehensive 
8.24 	Health Association as of December 2, 2008, are automatically enrolled in the exchange 
8.25 	on January 1, 2009, in the same health plan and at the same premium that they were 
8.26 	enrolled as of December 2, 2008, subject to the provisions of this section. As of January 1, 
8.27 	2009, all enrollees of individual market health plans, MinnesotaCare, and the Minnesota 
8.28 	Comprehensive Health Association shall make premium payments to the exchange.

8.29 	Sec. 3. [62A.68] SECTION 125 PLANS.
8.30 		Subdivision 1.Definitions. The following terms have the meanings given unless 
8.31 	otherwise provided in text.
8.32 	(a) "Current employee" means an employee currently on an employer's payroll other 
8.33 	than a retiree or disabled former employee.
9.1 	(b) "Employer" means a person, firm, corporation, partnership, association, business 
9.2 	trust, or other entity employing one or more persons, including a political subdivision of 
9.3 	the state, filing payroll tax information on the employed person or persons.
9.4 	(c) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125 
9.5 	of the Internal Revenue Code that allows employees to purchase health insurance with 
9.6 	pretax dollars.
9.7 	(d) "Exchange" means the Minnesota Health Insurance Exchange under section 
9.8 	62A.67.
9.9 	(e) "Exchange director" means the appointed director under section 62A.67, 
9.10 	subdivision 16.
9.11 		Subd. 2.Section 125 Plan requirement. (a) Effective January 1, 2009, all 
9.12 	employers with 11 or more current employees shall establish a Section 125 Plan to 
9.13 	allow their employees to purchase individual market health plan coverage with pretax 
9.14 	dollars. Nothing in this section requires or mandates employers to offer or purchase 
9.15 	health insurance coverage for their employees. The following employers are exempt 
9.16 	from the Section 125 Plan requirement:
9.17 	(1) employers that offer a group health insurance plan as defined in section 62A.10;
9.18 	(2) employers that are self-insurers as defined in section 62E.02; and
9.19 	(3) employers with fewer than 11 current employees, except that employers under 
9.20 	this clause may voluntarily offer a Section 125 Plan.
9.21 	(b) Employers that offer a Section 125 Plan may enter into an agreement with the 
9.22 	exchange to administer the employer's Section 125 Plan.
9.23 		Subd. 3.Tracking compliance. By July 1, 2008, the exchange, in consultation with 
9.24 	the commissioners of commerce, health, employment and economic development, and 
9.25 	revenue, shall establish a method for tracking employer compliance with the Section 125 
9.26 	Plan requirement.
9.27 		Subd. 4.Employer requirements. Employers that are required to offer or choose 
9.28 	to offer a Section 125 Plan shall:
9.29 	(1) allow employees to purchase any individual market health plan for themselves 
9.30 	and their dependents through the exchange;
9.31 	(2) allow employees to choose any insurance producer licensed in accident and 
9.32 	health insurance under chapter 60K to assist them in purchasing an individual market 
9.33 	health plan through the exchange;
9.34 	(3) provide a written and signed statement to the exchange stating that the employer 
9.35 	is not contributing to the employee's premiums for health plans purchased by an employee 
9.36 	through the exchange;
10.1 	(4) upon an employee's request, deduct premium amounts on a pretax basis in an 
10.2 	amount not to exceed an employee's wages, and remit these employee payments to the 
10.3 	exchange; and
10.4 	(5) provide notice to employees that individual market health plans purchased 
10.5 	through the exchange are not employer-sponsored or administered. Employers shall be 
10.6 	held harmless from any and all liability claims related to the individual market health 
10.7 	plans purchased through the exchange by employees under a Section 125 Plan.
10.8 		Subd. 5.Section 125 eligible health plans. Individuals who are eligible to use 
10.9 	an employer Section 125 Plan to pay for health insurance coverage purchased through 
10.10 	the exchange may enroll in any health plan offered through the exchange for which the 
10.11 	individual is eligible, including individual market health plans, MinnesotaCare, and the 
10.12 	Minnesota Comprehensive Health Association.

10.13 	Sec. 4. Minnesota Statutes 2006, section 62E.141, is amended to read:
10.14 	62E.141 INCLUSION IN EMPLOYER-SPONSORED PLAN.
10.15 	No employee of an employer that offers a group health plan, under which the 
10.16 	employee is eligible for coverage, is eligible to enroll, or continue to be enrolled, in 
10.17 	the comprehensive health association, except for enrollment or continued enrollment 
10.18 	necessary to cover conditions that are subject to an unexpired preexisting condition 
10.19 	limitation, preexisting condition exclusion, or exclusionary rider under the employer's 
10.20 	health plan. This section does not apply to persons enrolled in the Comprehensive Health 
10.21 	Association as of June 30, 1993. With respect to persons eligible to enroll in the health 
10.22 	plan of an employer that has more than 29 current employees, as defined in section 
10.23 	62L.02, this section does not apply to persons enrolled in the Comprehensive Health 
10.24 	Association as of December 31, 1994. 

10.25 	Sec. 5. Minnesota Statutes 2006, section 62J.04, subdivision 3, is amended to read:
10.26 		Subd. 3.Cost containment duties. The commissioner shall:
10.27 	(1) establish statewide and regional cost containment goals for total health care 
10.28 	spending under this section and, collect data as described in sections 62J.38 to 62J.41 to 
10.29 	monitor statewide achievement of the cost containment goals, and annually report to the 
10.30 	legislature on whether the goals were achieved and, if not, what action should be taken to 
10.31 	ensure that goals are achieved in the future; 
10.32 	(2) divide the state into no fewer than four regions, with one of those regions being 
10.33 	the Minneapolis/St. Paul metropolitan statistical area but excluding Chisago, Isanti, 
10.34 	Wright, and Sherburne Counties, for purposes of fostering the development of regional 
11.1 	health planning and coordination of health care delivery among regional health care 
11.2 	systems and working to achieve the cost containment goals;
11.3 	(3) monitor the quality of health care throughout the state and take action as 
11.4 	necessary to ensure an appropriate level of quality;
11.5 	(4) issue recommendations regarding uniform billing forms, uniform electronic 
11.6 	billing procedures and data interchanges, patient identification cards, and other uniform 
11.7 	claims and administrative procedures for health care providers and private and public 
11.8 	sector payers. In developing the recommendations, the commissioner shall review the 
11.9 	work of the work group on electronic data interchange (WEDI) and the American National 
11.10 	Standards Institute (ANSI) at the national level, and the work being done at the state and 
11.11 	local level. The commissioner may adopt rules requiring the use of the Uniform Bill 
11.12 	82/92 form, the National Council of Prescription Drug Providers (NCPDP) 3.2 electronic 
11.13 	version, the Centers for Medicare and Medicaid Services 1500 form, or other standardized 
11.14 	forms or procedures;
11.15 	(5) undertake health planning responsibilities;
11.16 	(6) authorize, fund, or promote research and experimentation on new technologies 
11.17 	and health care procedures;
11.18 	(7) within the limits of appropriations for these purposes, administer or contract for 
11.19 	statewide consumer education and wellness programs that will improve the health of 
11.20 	Minnesotans and increase individual responsibility relating to personal health and the 
11.21 	delivery of health care services, undertake prevention programs including initiatives to 
11.22 	improve birth outcomes, expand childhood immunization efforts, and provide start-up 
11.23 	grants for worksite wellness programs;
11.24 	(8) undertake other activities to monitor and oversee the delivery of health care 
11.25 	services in Minnesota with the goal of improving affordability, quality, and accessibility of 
11.26 	health care for all Minnesotans; and
11.27 	(9) make the cost containment goal data available to the public in a 
11.28 	consumer-oriented manner.

11.29 	EFFECTIVE DATE. This section is effective July 1, 2007.

11.30 	Sec. 6. [62J.431] EVIDENCE-BASED HEALTH CARE GUIDELINES.
11.31 	Evidence-based guidelines must meet the following criteria:
11.32 	(1) the scope and application are clear;
11.33 	(2) authorship is stated and any conflicts of interest disclosed;
11.34 	(3) authors represent all pertinent clinical fields or other means of input have been 
11.35 	used;
12.1 	(4) the development process is explicitly stated;
12.2 	(5) the guideline is grounded in evidence;
12.3 	(6) the evidence is cited and grated;
12.4 	(7) the document itself is clear and practical;
12.5 	(8) the document is flexible in use, with exceptions noted or provided for with 
12.6 	general statements;
12.7 	(9) measures are included for use in systems improvement; and
12.8 	(10) the guideline has scheduled reviews and updating.

12.9 	Sec. 7. Minnesota Statutes 2006, section 62J.495, is amended to read:
12.10 	62J.495 HEALTH INFORMATION TECHNOLOGY AND 
12.11 	INFRASTRUCTURE ADVISORY COMMITTEE.
12.12 		Subdivision 1.Establishment; members; duties Implementation. By January 
12.13 	1, 2012, all hospitals and health care providers must have in place an interoperable 
12.14 	electronic health records system within their hospital system or clinical practice setting. 
12.15 	The commissioner of health, in consultation with the Health Information Technology and 
12.16 	Infrastructure Advisory Committee, shall develop a statewide plan to meet this goal, 
12.17 	including the adoption of uniform standards to be used for the interoperable system for 
12.18 	sharing and synchronizing patient data across systems. The standards must be compatible 
12.19 	with federal efforts. The uniform standards must be refined and adopted for use when 
12.20 	a standard development organization accredited by the American National Standards 
12.21 	Institute completes the development of a standard for sharing and synchronizing patient 
12.22 	data across systems.
12.23 		Subd. 2. Health Information Technology and Infrastructure Advisory 
12.24 	Committee. (a) The commissioner shall establish a Health Information Technology 
12.25 	and Infrastructure Advisory Committee governed by section 15.059 to advise the 
12.26 	commissioner on the following matters:
12.27 	(1) assessment of the use of health information technology by the state, licensed 
12.28 	health care providers and facilities, and local public health agencies;
12.29 	(2) recommendations for implementing a statewide interoperable health information 
12.30 	infrastructure, to include estimates of necessary resources, and for determining standards 
12.31 	for administrative data exchange, clinical support programs, patient privacy requirements, 
12.32 	and maintenance of the security and confidentiality of individual patient data; and
12.33 	(3) recommendations for encouraging use of innovative health care applications 
12.34 	using information technology and systems to improve patient care and reduce the cost 
12.35 	of care, including applications relating to disease management and personal health 
13.1 	management that enable remote monitoring of patients' conditions, especially those with 
13.2 	chronic conditions; and
13.3 	(3)(4) other related issues as requested by the commissioner.
13.4 	(b) The members of the Health Information Technology and Infrastructure Advisory 
13.5 	Committee shall include the commissioners, or commissioners' designees, of health, 
13.6 	human services, administration, and commerce and additional members to be appointed 
13.7 	by the commissioner to include persons representing Minnesota's local public health 
13.8 	agencies, licensed hospitals and other licensed facilities and providers, private purchasers, 
13.9 	the medical and nursing professions, health insurers and health plans, the state quality 
13.10 	improvement organization, academic and research institutions, consumer advisory 
13.11 	organizations with an interest and expertise in health information technology, and other 
13.12 	stakeholders as identified by the Health Information Technology and Infrastructure 
13.13 	Advisory Committee.
13.14 	Subd. 2.Annual report.(c) The commissioner shall prepare and issue an annual 
13.15 	report not later than January 30 of each year outlining progress to date in implementing a 
13.16 	statewide health information infrastructure and recommending future projects.
13.17 	Subd. 3.Expiration.(d) Notwithstanding section 15.059, this sectionsubdivision 
13.18 	expires June 30, 2009 2012.

13.19 	Sec. 8. [62J.496] ELECTRONIC HEALTH RECORD SYSTEM REVOLVING 
13.20 	ACCOUNT AND LOAN PROGRAM.
13.21 		Subdivision 1.Account establishment. An account is established to provide loans 
13.22 	to eligible borrowers to assist in financing the installation or support of an interoperable 
13.23 	electronic health record system. The system must provide for the interoperable exchange 
13.24 	of health care information between the applicant and, at a minimum, a hospital system, 
13.25 	pharmacy, and a health care clinic or other physician group.
13.26 		Subd. 2.Eligibility. (a) "Eligible borrower" means one of the following:
13.27 	(1) community clinics, as defined under section 145.9268;
13.28 	(2) hospitals eligible for rural hospital capital improvement grants, as defined 
13.29 	in section 144.148;
13.30 	(3) physician clinics located in a community with a population of less than 50,000 
13.31 	according to United States Census Bureau statistics and outside the seven-county 
13.32 	metropolitan area;
13.33 	(4) nursing facilities licensed under sections 144A.01 to 144A.27; and
14.1 	(5) other providers of health or health care services approved by the commissioner 
14.2 	for which interoperable electronic health record capability would improve quality of 
14.3 	care, patient safety, or community health.
14.4 	(b) To be eligible for a loan under this section, the applicant must submit a loan 
14.5 	application to the commissioner of health on forms prescribed by the commissioner. The 
14.6 	application must include, at a minimum:
14.7 	(1) the amount of the loan requested and a description of the purpose or project 
14.8 	for which the loan proceeds will be used;
14.9 	(2) a quote from a vendor;
14.10 	(3) a description of the health care entities and other groups participating in the 
14.11 	project;
14.12 	(4) evidence of financial stability and a demonstrated ability to repay the loan; and
14.13 	(5) a description of how the system to be financed interconnects or plans in the 
14.14 	future to interconnect with other health care entities and provider groups located in the 
14.15 	same geographical area.
14.16 		Subd. 3.Loans. (a) The commissioner of health may make a no interest loan 
14.17 	to a provider or provider group who is eligible under subdivision 2 on a first-come, 
14.18 	first-served basis provided that the applicant is able to comply with this section. The total 
14.19 	accumulative loan principal must not exceed $1,500,000 per loan. The commissioner of 
14.20 	health has discretion over the size and number of loans made.
14.21 	(b) The commissioner of health may prescribe forms and establish an application 
14.22 	process and, notwithstanding section 16A.1283, may impose a reasonable nonrefundable 
14.23 	application fee to cover the cost of administering the loan program. Any application 
14.24 	fees imposed and collected under the electronic health records system revolving account 
14.25 	and loan program in this section are appropriated to the commissioner of health for the 
14.26 	duration of the loan program.
14.27 	(c) The borrower must begin repaying the principal no later than two years from the 
14.28 	date of the loan. Loans must be amortized no later than six years from the date of the loan.
14.29 	(d) Repayments must be credited to the account.
14.30 		Subd. 4.Data classification. Data collected by the commissioner of health on the 
14.31 	application to determine eligibility under subdivision 2 and to monitor borrowers' default 
14.32 	risk or collect payments owed under subdivision 3 are (1) private data on individuals as 
14.33 	defined in section 13.02, subdivision 12; and (2) nonpublic data as defined in section 
14.34 	13.02, subdivision 9. The names of borrowers and the amounts of the loans granted are 
14.35 	public data.

15.1 	Sec. 9. [62J.536] UNIFORM ELECTRONIC TRANSACTIONS AND 
15.2 	IMPLEMENTATION GUIDE STANDARDS.
15.3 		Subdivision 1.Electronic claims and eligibility transactions required. (a) 
15.4 	Beginning January 15, 2009, all group purchasers must accept from health care providers 
15.5 	the eligibility for a health plan transaction described under Code of Federal Regulations, 
15.6 	title 45, part 162, subpart L. Beginning July 15, 2009, all group purchasers must accept 
15.7 	from health care providers the health care claims or equivalent encounter information 
15.8 	transaction described under Code of Federal Regulations, title 45, part 162, subpart K.
15.9 	(b) Beginning January 15, 2009, all group purchasers must transmit to providers the 
15.10 	eligibility for a health plan transaction described under Code of Federal Regulations, title 
15.11 	45, part 162, subpart L. Beginning December 1, 2009, all group purchasers must transmit 
15.12 	to providers the health care payment and remittance advice transaction described under 
15.13 	Code of Federal Regulations, title 45, part 162, subpart P.
15.14 	(c) Beginning January 15, 2009, all health care providers must submit to group 
15.15 	purchasers the eligibility for a health plan transaction described under Code of Federal 
15.16 	Regulations, title 45, part 162, subpart L. Beginning July 15, 2009, all health care 
15.17 	providers must submit to group purchasers the health care claims or equivalent encounter 
15.18 	information transaction described under Code of Federal Regulations, title 45, part 162, 
15.19 	subpart K.
15.20 	(d) Beginning January 15, 2009, all health care providers must accept from group 
15.21 	purchasers the eligibility for a health plan transaction described under Code of Federal 
15.22 	Regulations, title 45, part 162, subpart L. Beginning December 15, 2009, all health care 
15.23 	providers must accept from group purchasers the health care payment and remittance 
15.24 	advice transaction described under Code of Federal Regulations, title 45, part 162, subpart 
15.25 	P.
15.26 	(e) Each of the transactions described in paragraphs (a) to (d) shall require the use 
15.27 	of a single, uniform companion guide to the implementation guides described under 
15.28 	Code of Federal Regulations, title 45, part 162. The companion guides will be developed 
15.29 	pursuant to subdivision 2.
15.30 	(f) Notwithstanding any other provisions in sections 62J.50 to 62J.61, all group 
15.31 	purchasers and health care providers must exchange claims and eligibility information 
15.32 	electronically using the transactions, companion guides, implementation guides, and 
15.33 	timelines required under this subdivision. Group purchasers may not impose any fee on 
15.34 	providers for the use of the transactions prescribed in this subdivision.
15.35 	(g) Nothing in this subdivision shall prohibit group purchasers and health care 
15.36 	providers from using a direct data entry, Web-based methodology for complying with 
16.1 	the requirements of this subdivision. Any direct data entry method for conducting 
16.2 	the transactions specified in this subdivision must be consistent with the data content 
16.3 	component of the single, uniform companion guides required in paragraph (e) and the 
16.4 	implementation guides described under Code of Federal Regulations, title 45, part 162.
16.5 		Subd. 2.Establishing uniform, standard companion guides. (a) At least 12 
16.6 	months prior to the timelines required in subdivision 1, the commissioner of health shall 
16.7 	adopt rules pursuant to section 62J.61 establishing and requiring group purchasers and 
16.8 	health care providers to use the transactions and the uniform, standard companion guides 
16.9 	required under subdivision 1, paragraph (e).
16.10 	(b) The commissioner of health must consult with the Minnesota Administrative 
16.11 	Uniformity Committee on the development of the single, uniform companion guides 
16.12 	required under subdivision 1, paragraph (e), for each of the transactions in subdivision 1. 
16.13 	The single uniform companion guides required under subdivision 1, paragraph (e), must 
16.14 	specify uniform billing and coding standards. The commissioner of health shall base the 
16.15 	companion guides required under subdivision 1, paragraph (e), billing and coding rules, 
16.16 	and standards on the Medicare program, with modifications that the commissioner deems 
16.17 	appropriate after consulting the Minnesota Administrative Uniformity Committee.
16.18 	(c) No group purchaser or health care provider may add to or modify the single, 
16.19 	uniform companion guides defined in subdivision 1, paragraph (e), through additional 
16.20 	companion guides or other requirements.
16.21 	(d) In adopting the rules in paragraph (a), the commissioner shall not require data 
16.22 	content that is not essential to accomplish the purpose of the transactions in subdivision 1.

16.23 	Sec. 10. Minnesota Statutes 2006, section 62J.60, is amended by adding a subdivision 
16.24 	to read:
16.25 		Subd. 3a.Required statement. An identification card issued to an enrollee by a 
16.26 	health plan company or other entity governed by Minnesota health coverage laws must 
16.27 	contain the following statement: "Subject to Minnesota law."

16.28 	Sec. 11. Minnesota Statutes 2006, section 62J.692, subdivision 1, is amended to read:
16.29 		Subdivision 1.Definitions. For purposes of this section, the following definitions 
16.30 	apply:
16.31 	(a) "Accredited clinical training" means the clinical training provided by a 
16.32 	medical education program that is accredited through an organization recognized by the 
16.33 	Department of Education, the Centers for Medicare and Medicaid Services, or another 
16.34 	national body who reviews the accrediting organizations for multiple disciplines and 
17.1 	whose standards for recognizing accrediting organizations are reviewed and approved by 
17.2 	the commissioner of health in consultation with the Medical Education and Research 
17.3 	Advisory Committee.
17.4 	(b) "Commissioner" means the commissioner of health.
17.5 	(c) "Clinical medical education program" means the accredited clinical training of 
17.6 	physicians (medical students and residents), doctor of pharmacy practitioners, doctors 
17.7 	of chiropractic, dentists, advanced practice nurses (clinical nurse specialists, certified 
17.8 	registered nurse anesthetists, nurse practitioners, and certified nurse midwives), and 
17.9 	physician assistants.
17.10 	(d) "Sponsoring institution" means a hospital, school, or consortium located in 
17.11 	Minnesota that sponsors and maintains primary organizational and financial responsibility 
17.12 	for a clinical medical education program in Minnesota and which is accountable to the 
17.13 	accrediting body.
17.14 	(e) "Teaching institution" means a hospital, medical center, clinic, or other 
17.15 	organization that conducts a clinical medical education program in Minnesota.
17.16 	(f) "Trainee" means a student or resident involved in a clinical medical education 
17.17 	program.
17.18 	(g) "Eligible trainee FTEs" means the number of trainees, as measured by full-time 
17.19 	equivalent counts, that are at training sites located in Minnesota with acurrently 
17.20 	active medical assistance provider numberenrollment status and a National Provider 
17.21 	Identification (NPI) number where training occurs in either an inpatient or ambulatory 
17.22 	patient care setting and where the training is funded, in part, by patient care revenues.

17.23 	Sec. 12. Minnesota Statutes 2006, section 62J.692, subdivision 4, is amended to read:
17.24 		Subd. 4.Distribution of funds. (a) The commissioner shall annually distribute 
17.25 	90 percent of available medical education funds transferred according to section 
17.26 	256B.69, subdivision 5c, paragraph (a), clause (1), to all qualifying applicants based on a 
17.27 	distribution formula that reflects a summation of two factors:
17.28 	(1) an education factor, which is determined by the total number of eligible trainee 
17.29 	FTEs and the total statewide average costs per trainee, by type of trainee, in each clinical 
17.30 	medical education program; and
17.31 	(2) a public program volume factor, which is determined by the total volume of 
17.32 	public program revenue received by each training site as a percentage of all public 
17.33 	program revenue received by all training sites in the fund pool.
17.34 	In this formula, the education factor is weighted at 67 percent and the public program 
17.35 	volume factor is weighted at 33 percent.
18.1 	Public program revenue for the distribution formula includes revenue from medical 
18.2 	assistance, prepaid medical assistance, general assistance medical care, and prepaid 
18.3 	general assistance medical care. Training sites that receive no public program revenue 
18.4 	are ineligible for funds available under this paragraph. Total statewide average costs per 
18.5 	trainee for medical residents is based on audited clinical training costs per trainee in 
18.6 	primary care clinical medical education programs for medical residents. Total statewide 
18.7 	average costs per trainee for dental residents is based on audited clinical training costs 
18.8 	per trainee in clinical medical education programs for dental students. Total statewide 
18.9 	average costs per trainee for pharmacy residents is based on audited clinical training costs 
18.10 	per trainee in clinical medical education programs for pharmacy students.
18.11 	(b) The commissioner shall annually distribute ten percent of total available medical 
18.12 	education funds transferred according to section 256B.69, subdivision 5c, paragraph (a), 
18.13 	clause (1), to all qualifying applicants based on the percentage received by each applicant 
18.14 	under paragraph (a). These funds are to be used to offset clinical education costs at 
18.15 	eligible clinical training sites based on criteria developed by the clinical medical education 
18.16 	program. Applicants may choose to distribute funds allocated under this paragraph based 
18.17 	on the distribution formula described in paragraph (a).
18.18 	(c) The commissioner shall annually distribute $5,000,000 of the funds dedicated 
18.19 	to the commissioner under section 297F.10, subdivision 1, clause (2), plus any federal 
18.20 	financial participation on these funds and on funds transferred under subdivision 10, to all 
18.21 	qualifying applicants based on a distribution formula that gives 100 percent weight to a 
18.22 	public program volume factor, which is determined by the total volume of public program 
18.23 	revenue received by each training site as a percentage of all public program revenue 
18.24 	received by all training sites in the fund pool. If federal approval is not obtained for 
18.25 	federal financial participation on any portion of funds distributed under this paragraph, 
18.26 	90 percent of the unmatched funds shall be distributed by the commissioner based on 
18.27 	the formula described in paragraph (a) and ten percent of the unmatched funds shall be 
18.28 	distributed by the commissioner based on the formula described in paragraph (b).
18.29 	(d) The commissioner shall annually distribute $3,060,000 of funds dedicated to the 
18.30 	commissioner under section 297F.10, subdivision 1, clause (2), through a formula giving 
18.31 	100 percent weight to an education factor, which is determined by the total number of 
18.32 	eligible trainee full-time equivalents and the total statewide average costs per trainee, by 
18.33 	type of trainee, in each clinical medical education program. If no matching funds are 
18.34 	received on funds distributed under paragraph (c), funds distributed under this paragraph 
18.35 	shall be distributed by the commissioner based on the formula described in paragraph (a).
19.1 	(e) The commissioner shall annually distribute $340,000 of funds dedicated to the 
19.2 	commissioner under section 297F.10, subdivision 1, clause (2), to all qualifying applicants 
19.3 	based on the percentage received by each applicant under paragraph (a). These funds are 
19.4 	to be used to offset clinical education costs at eligible clinical training sites based on 
19.5 	criteria developed by the clinical medical education program. Applicants may choose to 
19.6 	distribute funds allocated under this paragraph based on the distribution formula described 
19.7 	in paragraph (a). If no matching funds are received on funds distributed under paragraph 
19.8 	(c), funds distributed under this paragraph shall be distributed by the commissioner based 
19.9 	on the formula described in paragraph (b).
19.10 	(c) (f) Funds distributed shall not be used to displace current funding appropriations 
19.11 	from federal or state sources.
19.12 	(d) (g) Funds shall be distributed to the sponsoring institutions indicating the amount 
19.13 	to be distributed to each of the sponsor's clinical medical education programs based on 
19.14 	the criteria in this subdivision and in accordance with the commissioner's approval letter. 
19.15 	Each clinical medical education program must distribute funds allocated under paragraph 
19.16 	(a) to the training sites as specified in the commissioner's approval letter. Sponsoring 
19.17 	institutions, which are accredited through an organization recognized by the Department 
19.18 	of Education or the Centers for Medicare and Medicaid Services, may contract directly 
19.19 	with training sites to provide clinical training. To ensure the quality of clinical training, 
19.20 	those accredited sponsoring institutions must:
19.21 	(1) develop contracts specifying the terms, expectations, and outcomes of the clinical 
19.22 	training conducted at sites; and
19.23 	(2) take necessary action if the contract requirements are not met. Action may 
19.24 	include the withholding of payments under this section or the removal of students from 
19.25 	the site.
19.26 	(e) (h) Any funds not distributed in accordance with the commissioner's approval 
19.27 	letter must be returned to the medical education and research fund within 30 days of 
19.28 	receiving notice from the commissioner. The commissioner shall distribute returned funds 
19.29 	to the appropriate training sites in accordance with the commissioner's approval letter.
19.30 	(f) (i) The commissioner shall distribute by June 30 of each year an amount equal to 
19.31 	the funds transferred under subdivision 10, plus five percent interest to the University of 
19.32 	Minnesota Board of Regents for the instructional costs of health professional programs 
19.33 	at the Academic Health Center and for interdisciplinary academic initiatives within the 
19.34 	Academic Health Center.
20.1 	(g) (j) A maximum of $150,000 of the funds dedicated to the commissioner 
20.2 	under section 297F.10, subdivision 1, paragraph (b), clause (2), may be used by the 
20.3 	commissioner for administrative expenses associated with implementing this section.

20.4 	Sec. 13. Minnesota Statutes 2006, section 62J.692, subdivision 7a, is amended to read:
20.5 		Subd. 7a.Clinical medical education innovations grants. (a) The commissioner 
20.6 	shall award grants to teaching institutions and clinical training sites for projects that 
20.7 	increase dental access for underserved populations and promote innovative clinical 
20.8 	training of dental professionals.
20.9 	(b) The commissioner shall award grants to teaching institutions and clinical training 
20.10 	sites for projects that increase mental health access for underserved populations, promote 
20.11 	innovative clinical training of mental health professionals, increase the number of mental 
20.12 	health providers in rural or underserved areas, and promote the incorporation of patient 
20.13 	safety principles into clinical medical education programs.
20.14 	(c) In awarding the grants, the commissioner, in consultation with the commissioner 
20.15 	of human services, shall consider the following:
20.16 	(1) potential to successfully increase access to an underserved population;
20.17 	(2) the long-term viability of the project to improve access beyond the period 
20.18 	of initial funding;
20.19 	(3) evidence of collaboration between the applicant and local communities;
20.20 	(4) the efficiency in the use of the funding; and
20.21 	(5) the priority level of the project in relation to state clinical education, access, 
20.22 	patient safety, and workforce goals.; and
20.23 	(6) the potential of the project to impact the number or distribution of the health 
20.24 	care workforce.
20.25 	(b) (d) The commissioner shall periodically evaluate the priorities in awarding the 
20.26 	innovations grants in order to ensure that the priorities meet the changing workforce 
20.27 	needs of the state.

20.28 	Sec. 14. Minnesota Statutes 2006, section 62J.692, subdivision 8, is amended to read:
20.29 		Subd. 8.Federal financial participation. (a) The commissioner of human 
20.30 	services shall seek to maximize federal financial participation in payments for medical 
20.31 	education and research costs. If the commissioner of human services determines that 
20.32 	federal financial participation is available for the medical education and research, the 
20.33 	commissioner of health shall transfer to the commissioner of human services the amount 
20.34 	of state funds necessary to maximize the federal funds available. The amount transferred 
21.1 	to the commissioner of human services, plus the amount of federal financial participation, 
21.2 	shall be distributed to medical assistance providers in accordance with the distribution 
21.3 	methodology described in subdivision 4.
21.4 	(b) For the purposes of paragraph (a), the commissioner shall use physician clinic 
21.5 	rates where possible to maximize federal financial participation.

21.6 	Sec. 15. Minnesota Statutes 2006, section 62J.692, subdivision 10, is amended to read:
21.7 		Subd. 10.Transfers from University of Minnesota. Of the funds dedicated to the 
21.8 	Academic Health Center under section 297F.10, subdivision 1, clause (1), $4,850,000 
21.9 	shall be transferred annually to the commissioner of health no later than April 15 of each 
21.10 	year for distribution under subdivision 4, paragraph (f) (i).

21.11 	Sec. 16. Minnesota Statutes 2006, section 62J.81, subdivision 1, is amended to read:
21.12 		Subdivision 1.Required disclosure of estimated payment. (a) A health care 
21.13 	provider, as defined in section 62J.03, subdivision 8, or the provider's designee as agreed 
21.14 	to by that designee, shall, at the request of a consumer, provide that consumer with a good 
21.15 	faith estimate of the reimbursementallowable payment the provider expects to receive 
21.16 	from the health plan company in which the consumer is enrolled has agreed to accept from 
21.17 	the consumer's health plan company for the services specified by the consumer, specifying 
21.18 	the amount of the allowable payment due from the health plan company. Health plan 
21.19 	companies must allow contracted providers, or their designee, to release this information. 
21.20 	A good faith estimate must also be made available at the request of a consumer who 
21.21 	is not enrolled in a health plan company.If a consumer has no applicable public or 
21.22 	private coverage, the health care provider must give the consumer a good faith estimate 
21.23 	of the average allowable reimbursement the provider accepts as payment from private 
21.24 	third-party payers for the services specified by the consumer and the estimated amount 
21.25 	the noncovered consumer will be required to pay. Payment information provided by a 
21.26 	provider, or by the provider's designee as agreed to by that designee, to a patient pursuant 
21.27 	to this subdivision does not constitute a legally binding estimate of the allowable charge 
21.28 	for or cost to the consumer of services. 
21.29 	(b) A health plan company, as defined in section 62J.03, subdivision 10, shall, at 
21.30 	the request of an enrollee or the enrollee's designee, provide that enrollee with a good 
21.31 	faith estimate of the reimbursementallowable amount the health plan company would 
21.32 	expect to pay tohas contracted for with a specified provider within the network as total 
21.33 	payment for a health care service specified by the enrollee and the portion of the allowable 
21.34 	amount due from the enrollee and the enrollee's out-of-pocket costs. If requested by the 
22.1 	enrollee, the health plan company shall also provide to the enrollee a good faith estimate 
22.2 	of the enrollee's out-of-pocket cost for the health care service. An estimate provided to 
22.3 	an enrollee under this paragraph is not a legally binding estimate of the reimbursement
22.4 	allowable amount or enrollee's out-of-pocket cost.

22.5 	EFFECTIVE DATE. This section is effective August 1, 2007.

22.6 	Sec. 17. Minnesota Statutes 2006, section 62J.82, is amended to read:
22.7 	62J.82 HOSPITAL CHARGEINFORMATION REPORTING DISCLOSURE.
22.8 		Subdivision 1.Required information. The Minnesota Hospital Association shall 
22.9 	develop a Web-based system, available to the public free of charge, for reporting charge 
22.10 	information the following, for Minnesota residents,:
22.11 	(1) hospital-specific performance on the measures of care developed under section 
22.12 	256B.072 for acute myocardial infarction, heart failure, and pneumonia; 
22.13 	(2) by January 1, 2009, hospital-specific performance on the public reporting 
22.14 	measures for hospital-acquired infections as published by the National Quality Forum 
22.15 	and collected by the Minnesota Hospital Association and Stratis Health in collaboration 
22.16 	with infection control practitioners; and 
22.17 	(3) charge information, including, but not limited to, number of discharges, average 
22.18 	length of stay, average charge, average charge per day, and median charge, for each of the 
22.19 	50 most common inpatient diagnosis-related groups and the 25 most common outpatient 
22.20 	surgical procedures as specified by the Minnesota Hospital Association. 
22.21 		Subd. 2.Web site. The Web site must provide information that compares 
22.22 	hospital-specific data to hospital statewide data. The Web site must be established by 
22.23 	October 1, 2006, and must be updated annually. The commissioner shall provide a link to 
22.24 	this reporting information on the department's Web site.
22.25 		Subd. 3.Enforcement. The commissioner shall provide a link to this information 
22.26 	on the department's Web site. If a hospital does not provide this information to the 
22.27 	Minnesota Hospital Association, the commissioner of health may require the hospital to 
22.28 	do so in accordance with section 144.55, subdivision 6. The commissioner shall provide a 
22.29 	link to this information on the department's Web site.

22.30 	Sec. 18. [62J.84] HEALTH CARE TRANSFORMATION TASK FORCE.
22.31 		Subdivision 1.Task force. The governor shall convene a health care transformation 
22.32 	task force to advise and assist the governor and the Minnesota legislature. The task force 
22.33 	shall consist of:
23.1 	(1) four legislators from the house of representatives appointed by the speaker, two 
23.2 	from the majority party and two from the minority party, and four legislators from the 
23.3 	senate appointed by the Subcommittee on Committees of the Committee on Rules and 
23.4 	Administration, two from the majority party and two from the minority party;
23.5 	(2) four representatives of the governor and state agencies appointed by the governor;
23.6 	(3) at least four persons appointed by the governor who have demonstrated 
23.7 	leadership in health care organizations, health improvement initiatives, health care trade or 
23.8 	professional associations, or other collaborative health system improvement activities; and
23.9 	(4) at least two persons appointed by the governor who have demonstrated leadership 
23.10 	in employer and group purchaser activities related to health system improvement, at least 
23.11 	one of which must be from a labor organization.
23.12 		Subd. 2.Public input. The commissioner of health shall review available research, 
23.13 	and conduct statewide, regional, and local surveys, focus groups, and other activities as 
23.14 	needed to fill gaps in existing research, to determine Minnesotans' values, preferences, 
23.15 	opinions, and perceptions related to health care and to the issues confronting the task 
23.16 	force, and shall report the findings to the task force.
23.17 		Subd. 3.Inventory and assessment of existing activities; action plan. The task 
23.18 	force shall complete an inventory and assessment of all public and private organized 
23.19 	activities, coalitions, and collaboratives working on tasks relating to health system 
23.20 	improvement including, but not limited to, patient safety, quality measurement and 
23.21 	reporting, evidence-based practice, adoption of health information technology, disease 
23.22 	management and chronic care coordination, medical homes, access to health care, 
23.23 	cultural competence, prevention and public health, consumer incentives, price and cost 
23.24 	transparency, nonprofit organization community benefits, education, research, and health 
23.25 	care workforce.
23.26 		Subd. 4.Action plan. By December 15, 2007, the governor, with the advice 
23.27 	and assistance of the task force, shall develop and present to the legislature a statewide 
23.28 	action plan for transforming the health care system to improve affordability, quality, 
23.29 	and access. The plan shall include draft legislation needed to implement the plan. The 
23.30 	plan may consist of legislative actions, administrative actions of governmental entities, 
23.31 	collaborative actions, and actions of individuals and individual organizations. Among 
23.32 	other things, the action plan must include the following, with specific and measurable 
23.33 	goals and deadlines for each:
23.34 	(1) proposed actions that will slow the rate of increase in health care costs to a rate 
23.35 	that does not exceed the increase in the Consumer Price Index for urban consumers for the 
24.1 	preceding calendar year plus two percentage points, and an additional percentage based on 
24.2 	the added costs necessary to implement legislation enacted in 2007;
24.3 	(2) actions that will increase the affordable health coverage options for uninsured 
24.4 	and underinsured Minnesotans and other strategies that will ensure that all Minnesotans 
24.5 	will have health coverage by January 2011;
24.6 	(3) actions to improve the quality and safety of health care and reduce racial and 
24.7 	ethnic disparities in access and quality;
24.8 	(4) actions that will reduce the rate of preventable chronic illness through prevention 
24.9 	and public health and wellness initiatives;
24.10 	(5) proposed changes to state health care purchasing and payment strategies used for 
24.11 	state health care programs and state employees that will promote higher quality, lower 
24.12 	cost health care through incentives that reward prevention and early intervention, use 
24.13 	of cost-effective primary care, effective care coordination, and management of chronic 
24.14 	disease;
24.15 	(6) actions that will promote the appropriate and cost-effective investment in new 
24.16 	facilities, technologies, and drugs;
24.17 	(7) actions to reduce administrative costs; and
24.18 	(8) the results of the inventory completed under subdivision 3 and recommendations 
24.19 	for how these activities can be coordinated and improved.
24.20 		Subd. 5.Options for small employers. The task force shall study and report back 
24.21 	to the legislature by December 15, 2007, on options for serving small employers and their 
24.22 	employees, and self-employed individuals.

24.23 	Sec. 19. Minnesota Statutes 2006, section 62L.12, subdivision 2, is amended to read:
24.24 		Subd. 2.Exceptions. (a) A health carrier may sell, issue, or renew individual 
24.25 	conversion policies to eligible employees otherwise eligible for conversion coverage under 
24.26 	section 62D.104 as a result of leaving a health maintenance organization's service area.
24.27 	(b) A health carrier may sell, issue, or renew individual conversion policies to 
24.28 	eligible employees otherwise eligible for conversion coverage as a result of the expiration 
24.29 	of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21, 
24.30 	62C.142, 62D.101, and 62D.105.
24.31 	(c) A health carrier may sell, issue, or renew conversion policies under section 
24.32 	62E.16 to eligible employees.
24.33 	(d) A health carrier may sell, issue, or renew individual continuation policies to 
24.34 	eligible employees as required.
25.1 	(e) A health carrier may sell, issue, or renew individual health plans if the coverage 
25.2 	is appropriate due to an unexpired preexisting condition limitation or exclusion applicable 
25.3 	to the person under the employer's group health plan or due to the person's need for health 
25.4 	care services not covered under the employer's group health plan.
25.5 	(f) A health carrier may sell, issue, or renew an individual health plan, if the 
25.6 	individual has elected to buy the individual health plan not as part of a general plan to 
25.7 	substitute individual health plans for a group health plan nor as a result of any violation of 
25.8 	subdivision 3 or 4.
25.9 	(g) Nothing in this subdivision relieves a health carrier of any obligation to provide 
25.10 	continuation or conversion coverage otherwise required under federal or state law.
25.11 	(h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage 
25.12 	issued as a supplement to Medicare under sections 62A.3099 to 62A.44, or policies or 
25.13 	contracts that supplement Medicare issued by health maintenance organizations, or those 
25.14 	contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social 
25.15 	Security Act, United States Code, title 42, section 1395 et seq., as amended.
25.16 	(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual 
25.17 	health plans necessary to comply with a court order.
25.18 	(j) A health carrier may offer, issue, sell, or renew an individual health plan to 
25.19 	persons eligible for an employer group health plan, if the individual health plan is a high 
25.20 	deductible health plan for use in connection with an existing health savings account, in 
25.21 	compliance with the Internal Revenue Code, section 223. In that situation, the same or 
25.22 	a different health carrier may offer, issue, sell, or renew a group health plan to cover 
25.23 	the other eligible employees in the group.
25.24 	(k) A health carrier may offer, sell, issue, or renew an individual health plan to one 
25.25 	or more employees of a small employer if the individual health plan is marketed directly
25.26 	through the Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 to 
25.27 	all employees of the small employer and the small employer does not contribute directly 
25.28 	or indirectly to the premiums or facilitate the administration of the individual health 
25.29 	plan. The requirement to market an individual health plan to all employees through the 
25.30 	Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 does not require 
25.31 	the health carrier to offer or issue an individual health plan to any employee. For purposes 
25.32 	of this paragraph, an employer is not contributing to the premiums or facilitating the 
25.33 	administration of the individual health plan if the employer does not contribute to the 
25.34 	premium and merely collects the premiums from an employee's wages or salary through 
25.35 	payroll deductions and submits payment for the premiums of one or more employees in a 
25.36 	lump sum to the health carrier to the Minnesota Health Insurance Exchange under section 
26.1 	62A.67 or 62A.68. Except for coverage under section 62A.65, subdivision 5, paragraph 
26.2 	(b), or 62E.16, at the request of an employee, the health carrier Minnesota Health Insurance 
26.3 	Exchange under section 62A.67 or 62A.68 may bill the employer for the premiums 
26.4 	payable by the employee, provided that the employer is not liable for payment except 
26.5 	from payroll deductions for that purpose. If an employer is submitting payments under 
26.6 	this paragraph, the health carrier and the Minnesota Health Insurance Exchange under 
26.7 	section 62A.67 or 62A.68 shall jointly provide a cancellation notice directly to the primary 
26.8 	insured at least ten days prior to termination of coverage for nonpayment of premium. 
26.9 	Individual coverage under this paragraph may be offered only if the small employer has 
26.10 	not provided coverage under section 62L.03 to the employees within the past 12 months.
26.11 	The employer must provide a written and signed statement to the health carrier
26.12 	Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 that the employer 
26.13 	is not contributing directly or indirectly to the employee's premiums. The Minnesota 
26.14 	Health Insurance Exchange under section 62A.67 or 62A.68 shall provide all health 
26.15 	carriers with enrolled employees of the employer with a copy of the employer's statement. 
26.16 	The health carrier may rely on the employer's statement provided by the Minnesota Health 
26.17 	Insurance Exchange under section 62A.67 or 62A.68 and is not required to guarantee-issue 
26.18 	individual health plans to the employer's other current or future employees.

26.19 	Sec. 20. Minnesota Statutes 2006, section 62L.12, subdivision 4, is amended to read:
26.20 		Subd. 4.Employer prohibition. A small employer offering a health benefit plan 
26.21 	shall not encourage or direct an employee or applicant to:
26.22 	(1) refrain from filing an application for health coverage when other similarly 
26.23 	situated employees may file an application for health coverage;
26.24 	(2) file an application for health coverage during initial eligibility for coverage, 
26.25 	the acceptance of which is contingent on health status, when other similarly situated 
26.26 	employees may apply for health coverage, the acceptance of which is not contingent on 
26.27 	health status;
26.28 	(3) seek coverage from another health carrier, including, but not limited to, MCHA; 
26.29 	or
26.30 	(4) cause coverage to be issued on different terms because of the health status or 
26.31 	claims experience of that person or the person's dependents.

26.32 	Sec. 21. [62Q.101] EVALUATION OF PROVIDER PERFORMANCE.
27.1 	A health plan company, or a vendor of risk management services as defined under 
27.2 	section 60A.23, subdivision 8, shall, in evaluating the performance of a health care 
27.3 	provider:
27.4 	(1) conduct the evaluation using a bona fide baseline based upon practice experience 
27.5 	of the provider group; and
27.6 	(2) disclose the baseline to the health care provider in writing and prior to the 
27.7 	beginning of the time period used for the evaluation.

27.8 	Sec. 22. Minnesota Statutes 2006, section 62Q.165, subdivision 1, is amended to read:
27.9 		Subdivision 1.Definition. It is the commitment of the state to achieve universal 
27.10 	health coverage for all Minnesotans by the year 2011. Universal coverage is achieved 
27.11 	when:
27.12 	(1) every Minnesotan has access to a full range of quality health care services;
27.13 	(2) every Minnesotan is able to obtain affordable health coverage which pays for the 
27.14 	full range of services, including preventive and primary care; and
27.15 	(3) every Minnesotan pays into the health care system according to that person's 
27.16 	ability.

27.17 	EFFECTIVE DATE. This section is effective July 1, 2007.

27.18 	Sec. 23. Minnesota Statutes 2006, section 62Q.165, subdivision 2, is amended to read:
27.19 		Subd. 2.Goal. It is the goal of the state to make continuous progress toward 
27.20 	reducing the number of Minnesotans who do not have health coverage so that by January 
27.21 	1, 2000, fewer than four percent of the state's population will be without health coverage
27.22 	2011, all Minnesota residents have access to affordable health care. The goal will be 
27.23 	achieved by improving access to private health coverage through insurance reforms and 
27.24 	market reforms, by making health coverage more affordable for low-income Minnesotans 
27.25 	through purchasing pools and state subsidies, and by reducing the cost of health coverage 
27.26 	through cost containment programs and methods of ensuring that all Minnesotans are 
27.27 	paying into the system according to their ability.

27.28 	EFFECTIVE DATE. This section is effective July 1, 2007.

27.29 	Sec. 24. Minnesota Statutes 2006, section 62Q.80, subdivision 3, is amended to read:
27.30 		Subd. 3.Approval.  (a) Prior to the operation of a community-based health care 
27.31 	coverage program, a community-based health initiative shall submit to the commissioner 
27.32 	of health for approval the community-based health care coverage program developed by 
28.1 	the initiative. The commissioner shall only approve a program that has been awarded 
28.2 	a community access program grant from the United States Department of Health and 
28.3 	Human Services. The commissioner shall ensure that the program meets the federal grant 
28.4 	requirements and any requirements described in this section and is actuarially sound based 
28.5 	on a review of appropriate records and methods utilized by the community-based health 
28.6 	initiative in establishing premium rates for the community-based health care coverage 
28.7 	program. 
28.8 	(b) Prior to approval, the commissioner shall also ensure that:
28.9 	(1) the benefits offered comply with subdivision 8 and that there are adequate 
28.10 	numbers of health care providers participating in the community-based health network to 
28.11 	deliver the benefits offered under the program;
28.12 	(2) the activities of the program are limited to activities that are exempt under this 
28.13 	section or otherwise from regulation by the commissioner of commerce;
28.14 	(3) the complaint resolution process meets the requirements of subdivision 10; and 
28.15 	(4) the data privacy policies and procedures comply with state and federal law.

28.16 	Sec. 25. Minnesota Statutes 2006, section 62Q.80, subdivision 4, is amended to read:
28.17 		Subd. 4.Establishment.  (a) The initiative shall establish and operate upon approval 
28.18 	by the commissioner of health a community-based health care coverage program. The 
28.19 	operational structure established by the initiative shall include, but is not limited to: 
28.20 	(1) establishing a process for enrolling eligible individuals and their dependents; 
28.21 	(2) collecting and coordinating premiums from enrollees and employers of enrollees;
28.22 	(3) providing payment to participating providers; 
28.23 	(4) establishing a benefit set according to subdivision 8 and establishing premium 
28.24 	rates and cost-sharing requirements; 
28.25 	(5) creating incentives to encourage primary care and wellness services; and 
28.26 	(6) initiating disease management services, as appropriate. 
28.27 	(b) The payments collected under paragraph (a), clause (2), may be used to capture 
28.28 	available federal funds.

28.29 	Sec. 26. Minnesota Statutes 2006, section 62Q.80, subdivision 13, is amended to read:
28.30 		Subd. 13.Report.  (a) The initiative shall submit quarterly status reports to the 
28.31 	commissioner of health on January 15, April 15, July 15, and October 15 of each year, 
28.32 	with the first report due January 15, 2007 2008. The status report shall include:
28.33 	(1) the financial status of the program, including the premium rates, cost per member 
28.34 	per month, claims paid out, premiums received, and administrative expenses; 
29.1 	(2) a description of the health care benefits offered and the services utilized; 
29.2 	(3) the number of employers participating, the number of employees and dependents 
29.3 	covered under the program, and the number of health care providers participating; 
29.4 	(4) a description of the health outcomes to be achieved by the program and a status 
29.5 	report on the performance measurements to be used and collected; and 
29.6 	(5) any other information requested by the commissioner of health or commerce or 
29.7 	the legislature. 
29.8 	(b) The initiative shall contract with an independent entity to conduct an evaluation 
29.9 	of the program to be submitted to the commissioners of health and commerce and the 
29.10 	legislature by January 15, 2009 2010. The evaluation shall include:
29.11 	(1) an analysis of the health outcomes established by the initiative and the 
29.12 	performance measurements to determine whether the outcomes are being achieved;
29.13 	(2) an analysis of the financial status of the program, including the claims to 
29.14 	premiums loss ratio and utilization and cost experience; 
29.15 	(3) the demographics of the enrollees, including their age, gender, family income, 
29.16 	and the number of dependents; 
29.17 	(4) the number of employers and employees who have been denied access to the 
29.18 	program and the basis for the denial; 
29.19 	(5) specific analysis on enrollees who have aggregate medical claims totaling over 
29.20 	$5,000 per year, including data on the enrollee's main diagnosis and whether all the 
29.21 	medical claims were covered by the program; 
29.22 	(6) number of enrollees referred to state public assistance programs; 
29.23 	(7) a comparison of employer-subsidized health coverage provided in a comparable 
29.24 	geographic area to the designated community-based geographic area served by the 
29.25 	program, including, to the extent available: 
29.26 	(i) the difference in the number of employers with 50 or fewer employees offering 
29.27 	employer-subsidized health coverage; 
29.28 	(ii) the difference in uncompensated care being provided in each area; and
29.29 	(iii) a comparison of health care outcomes and measurements established by the 
29.30 	initiative; and 
29.31 	(8) any other information requested by the commissioner of health or commerce.

29.32 	Sec. 27. Minnesota Statutes 2006, section 62Q.80, subdivision 14, is amended to read:
29.33 		Subd. 14.Sunset. This section expires December 31, 2011 2012.

29.34 	Sec. 28. Minnesota Statutes 2006, section 144.698, subdivision 1, is amended to read:
30.1 		Subdivision 1.Yearly reports. (a) Each hospital and each outpatient surgical center, 
30.2 	which has not filed the financial information required by this section with a voluntary, 
30.3 	nonprofit reporting organization pursuant to section 144.702, shall file annually with the 
30.4 	commissioner of health after the close of the fiscal year: 
30.5 	(1) a balance sheet detailing the assets, liabilities, and net worth of the hospital or 
30.6 	outpatient surgical center;
30.7 	(2) a detailed statement of income and expenses;
30.8 	(3) a copy of its most recent cost report, if any, filed pursuant to requirements of 
30.9 	Title XVIII of the United States Social Security Act;
30.10 	(4) a copy of all changes to articles of incorporation or bylaws;
30.11 	(5) information on services provided to benefit the community, including services 
30.12 	provided at no cost or for a reduced fee to patients unable to pay, teaching and research 
30.13 	activities, or other community or charitable activities;
30.14 	(6) information required on the revenue and expense report form set in effect on 
30.15 	July 1, 1989, or as amended by the commissioner in rule;
30.16 	(7) information on changes in ownership or control; and
30.17 	(8) other information required by the commissioner in rule.;
30.18 	(9) information on the number of available hospital beds that are dedicated to certain 
30.19 	specialized services, as designated by the commissioner, and annual occupancy rates for 
30.20 	those beds, separately for adult and pediatric care;
30.21 	(10) from outpatient surgical centers, the total number of surgeries; and
30.22 	(11) a report on health care capital expenditures during the previous year, as required 
30.23 	by section 62J.17.
30.24 	(b) Beginning with hospital fiscal year 2009, each nonprofit hospital shall report on 
30.25 	community benefits under paragraph (a), clause (5). "Community benefit" means the costs 
30.26 	of community care, underpayment for services provided under state health care programs, 
30.27 	research costs, community health services costs, financial and in-kind contributions, costs 
30.28 	of community building activities, costs of community benefit operations, education, and 
30.29 	the cost of operating subsidized services. The cost of bad debts and underpayment for 
30.30 	Medicare services are not included in the calculation of community benefit.

30.31 	Sec. 29. Minnesota Statutes 2006, section 144.699, is amended by adding a subdivision 
30.32 	to read:
30.33 		Subd. 5.Annual reports on community benefit, community care amounts, 
30.34 	and state program underfunding. (a) For each hospital reporting health care cost 
30.35 	information under section 144.698 or 144.702, the commissioner shall report annually 
31.1 	on the hospital's community benefit, community care, and underpayment for state public 
31.2 	health care programs.
31.3 	(b) For purposes of this subdivision, "community benefits" has the definition given 
31.4 	in section 144.698, paragraph (b).
31.5 	(c) For purposes of this subdivision, "community care" means the costs for medical 
31.6 	care for which a hospital has determined is charity care, as defined under Minnesota Rules, 
31.7 	part 4650.0115, or for which the hospital determines after billing for the services that there 
31.8 	is a demonstrated inability to pay. Any costs forgiven under a hospital's community care 
31.9 	plan or under section 62J.83 may be counted in the hospital's calculation of community 
31.10 	care. Bad debt expenses and discounted charges available to the uninsured shall not be 
31.11 	included in the calculation of community care. The amount of community care is the value 
31.12 	of costs incurred and not the charges made for services.
31.13 	(d) For purposes of this subdivision, underpayment for services provided by state 
31.14 	public health care programs is the difference between hospital costs and public program 
31.15 	payments. The information shall be reported in terms of total dollars and as a percentage 
31.16 	of total operating costs for each hospital.

31.17 	Sec. 30. [145.985] HEALTH PROMOTION AND WELLNESS.
31.18 	Community health boards as defined in section 145A.02, subdivision 5, may work 
31.19 	with schools, health care providers, and others to coordinate health and wellness programs 
31.20 	in their communities. In order to meet the requirements of this section, community 
31.21 	health boards may:
31.22 	(1) provide instruction, technical assistance, and recommendations on how to 
31.23 	evaluate project outcomes;
31.24 	(2) assist with on-site health and wellness programs utilizing volunteers and others 
31.25 	addressing health and wellness topics including smoking, nutrition, obesity, and others; and
31.26 	(3) encourage health and wellness programs consistent with the Centers for Disease 
31.27 	Control and Prevention's Community Guide and goals consistent with the Centers for 
31.28 	Disease Control and Prevention's Healthy People 2010 initiative.

31.29 	Sec. 31. Minnesota Statutes 2006, section 256.01, subdivision 2b, is amended to read:
31.30 		Subd. 2b.Performance payments. (a) The commissioner shall develop and 
31.31 	implement a pay-for-performance system to provide performance payments to:
31.32 	(1) eligible medical groups and clinics that demonstrate optimum care in serving 
31.33 	individuals with chronic diseases who are enrolled in health care programs administered 
31.34 	by the commissioner under chapters 256B, 256D, and 256L.;
32.1 	(2) medical groups that implement effective medical home models of patient care 
32.2 	that improve quality and reduce costs through effective primary and preventive care, care 
32.3 	coordination, and management of chronic conditions; and
32.4 	(3) eligible medical groups and clinics that evaluate medical provider usage patterns 
32.5 	and provide feedback to individual medical providers on that provider's practice patterns 
32.6 	relative to peer medical providers.
32.7 	(b) The commissioner shall also develop and implement a patient incentive health 
32.8 	program to provide incentives and rewards to patients who are enrolled in health care 
32.9 	programs administered by the commissioner under chapters 256B, 256D, and 256L, and 
32.10 	who have agreed to and meet personal health goals established with their primary care 
32.11 	provider to manage a chronic disease or condition including, but not limited to, diabetes, 
32.12 	high blood pressure, and coronary artery disease.
32.13 	(c) The commissioner may receive any federal matching money that is made 
32.14 	available through the medical assistance program for managed care oversight contracted 
32.15 	through vendors including consumer surveys, studies, and external quality reviews as 
32.16 	required by the Federal Balanced Budget Act of 1997, Code of Federal Regulations, 
32.17 	title 42, part 438, subpart E. Any federal money received for managed care oversight is 
32.18 	appropriated to the commissioner for this purpose. The commissioner may expend the 
32.19 	federal money received in either year of the biennium.

32.20 	EFFECTIVE DATE. This section is effective July 1, 2007.

32.21 	Sec. 32. Minnesota Statutes 2006, section 256B.0625, is amended by adding a 
32.22 	subdivision to read:
32.23 		Subd. 49.Provider-directed care coordination services. The commissioner 
32.24 	shall develop and implement a provider-directed care coordination program for medical 
32.25 	assistance recipients who are not enrolled in the prepaid medical assistance program and 
32.26 	who are receiving services on a fee-for-service basis. This program provides payment 
32.27 	to primary care clinics for care coordination for people who have complex and chronic 
32.28 	medical conditions. Clinics must meet certain criteria such as the capacity to develop care 
32.29 	plans; have a dedicated care coordinator; and have an adequate number of fee-for-service 
32.30 	clients, evaluation mechanisms, and quality improvement processes to qualify for 
32.31 	reimbursement. For purposes of this subdivision, a primary care clinic is a medical clinic 
32.32 	designated as the patient's first point of contact for medical care, available 24 hours a 
32.33 	day, seven days a week, that provides or arranges for the patient's comprehensive health 
32.34 	care needs, and provides overall integration, coordination, and continuity over time and 
32.35 	referrals for specialty care.

33.1 	Sec. 33. HEALTH CARE PAYMENT SYSTEM REFORM.
 33.2 		Subdivision 1.Payment reform plan. The commissioners of employee relations, 
33.3 	human services, commerce, and health shall develop a plan for promoting and facilitating 
33.4 	changes in payment rates and methods for paying for health care services, drugs, devices, 
33.5 	supplies, and equipment in order to:
33.6 	(1) reward the provision of cost-effective primary and preventive care;
33.7 	(2) reward the use of evidence-based care;
33.8 	(3) discourage underutilization, overuse, and misuse;
33.9 	(4) reward the use of the most cost-effective settings, drugs, devices, providers, 
33.10 	and treatments; and
33.11 	(5) encourage consumers to maintain good health and use the health care system 
33.12 	appropriately.
33.13 	In developing the plan, the commissioners shall analyze existing data to determine 
33.14 	specific services and health conditions for which changes in payment rates and methods 
33.15 	would lead to significant improvements in quality of care. The commissioners shall 
33.16 	include a definition of the term "quality" for uniform understanding of the plan's impact.
33.17 		Subd. 2.Report. The commissioners shall submit a report to the legislature by 
33.18 	December 15, 2007, describing the payment reform plan. The report must include 
33.19 	proposed legislation for implementing those components of the plan requiring legislative 
33.20 	action or appropriations of money.

33.21 	EFFECTIVE DATE. This section is effective July 1, 2007.

33.22 	Sec. 34. COMMUNITY COLLABORATIVE PILOT PROJECTS TO COVER 
33.23 	THE UNINSURED.
 33.24 		Subdivision 1.Community collaboratives. The commissioner of human services 
33.25 	shall provide grants to and authorization for up to three community collaboratives that 
33.26 	satisfy the requirements in this section. To be eligible to receive a grant and authorization 
33.27 	under this section, a community collaborative must include:
33.28 	(1) one or more counties;
33.29 	(2) one or more local hospitals;
33.30 	(3) one or more local employers who collectively provide at least 300 jobs in the 
33.31 	community;
33.32 	(4) one or more health care clinics or physician groups; and
33.33 	(5) a third-party payer, which may be a county-based purchasing plan operating 
33.34 	under Minnesota Statutes, section 256B.692, a self-insured employer, or a health plan 
33.35 	company as defined in Minnesota Statutes, section 62Q.01, subdivision 4.
34.1 		Subd. 2.Pilot project requirements. (a) Community collaborative pilot projects 
34.2 	must:
34.3 	(1) identify and enroll persons in the community who are uninsured, and who have, 
34.4 	or are at risk of developing, one of the following chronic conditions: mental illness, 
34.5 	diabetes, asthma, hypertension, or other chronic condition designated by the project;
34.6 	(2) assist uninsured persons to obtain private-sector health insurance coverage if 
34.7 	possible or to enroll in any public health care programs for which they are eligible. If the 
34.8 	uninsured individual is unable to obtain health coverage, the community collaborative 
34.9 	must enroll the individual in a local health care assistance program that provides specified 
34.10 	services to prevent or effectively manage the chronic condition;
34.11 	(3) include components to help uninsured persons retain employment or to become 
34.12 	employable, if currently unemployed;
34.13 	(4) ensure that each uninsured person enrolled in the program has a medical home 
34.14 	responsible for providing, or arranging for, health care services and assisting in the 
34.15 	effective management of the chronic condition;
34.16 	(5) coordinate services between all providers and agencies serving an enrolled 
34.17 	individual; and
34.18 	(6) be coordinated with the state's Q-Care initiative and improve the use of 
34.19 	evidence-based treatments and effective disease management programs in the broader 
34.20 	community, beyond those individuals enrolled in the project.
34.21 	(b) Projects established under this section are not insurance and are not subject to 
34.22 	state-mandated benefit requirements or insurance regulations.
34.23 		Subd. 3.Criteria. Proposals must be evaluated by actuarial, financial, and clinical 
34.24 	experts based on the likelihood that the project would produce a positive return on 
34.25 	investment for the community. In awarding grants, the commissioner of human services 
34.26 	shall give preference to proposals that:
34.27 	(1) have broad community support from local businesses, provider counties, and 
34.28 	other public and private organizations;
34.29 	(2) would provide services to uninsured persons who have, or are at risk of 
34.30 	developing, multiple, co-occurring chronic conditions;
34.31 	(3) integrate or coordinate resources from multiple sources, such as employer 
34.32 	contributions, county funds, social service programs, and provider financial or in-kind 
34.33 	support;
34.34 	(4) provide continuity of treatment and services when uninsured individuals in 
34.35 	the program become eligible for public or private health insurance or when insured 
34.36 	individuals lose their coverage;
35.1 	(5) demonstrate how administrative costs for health plan companies and providers 
35.2 	can be reduced through greater simplification, coordination, consolidation, standardization, 
35.3 	reducing billing errors, or other methods; and
35.4 	(6) involve local contributions to the cost of the pilot projects.
35.5 		Subd. 4.Grants. The commissioner of human services shall provide 
35.6 	implementation grants of up to one-half of the community collaborative's costs for 
35.7 	planning, administration, and evaluation. The commissioner shall also provide grants to 
35.8 	community collaboratives to develop a fund to pay up to 50 percent of the cost of the 
35.9 	services provided to uninsured individuals. The remaining costs must be paid for through 
35.10 	other sources or by agreement of a health care provider to contribute the cost as charity 
35.11 	care.
35.12 		Subd. 5.Evaluation. The commissioner of human services shall evaluate the 
35.13 	effectiveness of each community collaborative project awarded a grant, by comparing 
35.14 	actual costs for serving the identified uninsured persons to the predicted costs that would 
35.15 	have been incurred in the absence of early intervention and consistent treatment to manage 
35.16 	the chronic condition, including the costs to medical assistance, MinnesotaCare, and 
35.17 	general assistance medical care. The commissioner shall require community collaborative 
35.18 	projects, as a condition of receipt of a grant award, to provide the commissioner with all 
35.19 	information necessary for this evaluation.

35.20 	EFFECTIVE DATE. This section is effective July 1, 2007.

35.21 	Sec. 35. HEALTH CARE PAYMENT REFORM PILOT PROJECTS.
 35.22 		Subdivision 1.Pilot projects. (a) The commissioners of health, human services, 
35.23 	and employee relations shall develop and administer payment reform pilot projects for 
35.24 	state employees and persons enrolled in medical assistance, MinnesotaCare, or general 
35.25 	assistance medical care, to the extent permitted by federal requirements. The purpose of 
35.26 	the projects is to promote and facilitate changes in payment rates and methods for paying 
35.27 	for health care services, drugs, devices, supplies, and equipment in order to:
35.28 	(1) reward the provision of cost-effective primary and preventive care;
35.29 	(2) reward the use of evidence-based care;
35.30 	(3) reward coordination of care for patients with chronic conditions;
35.31 	(4) discourage overuse and misuse;
35.32 	(5) reward the use of the most cost-effective settings, drugs, devices, providers, 
35.33 	and treatments; and
35.34 	(6) encourage consumers to maintain good health and use the health care system 
35.35 	appropriately.
36.1 	(b) The pilot projects must involve the use of designated care professionals or 
36.2 	clinics to serve as a patient's medical home and be responsible for coordinating health 
36.3 	care services across the continuum of care. The pilot projects must evaluate different 
36.4 	payment reform models and must be coordinated with the Minnesota senior health options 
36.5 	program and the Minnesota disability health options program. To the extent possible, the 
36.6 	commissioners shall coordinate state purchasing activities with other public employers 
36.7 	and with private purchasers, self-insured groups, and health plan companies to promote 
36.8 	the use of pilot projects encompassing both public and private purchasers and markets.
36.9 		Subd. 2.Payment methods and incentives. The commissioners shall modify 
36.10 	existing payment methods and rates for those enrollees and health care providers 
36.11 	participating in the pilot project in order to provide incentives for care management, 
36.12 	team-based care, and practice redesign, and increase resources for primary care, chronic 
36.13 	condition care, and care provided to complex patients. The commissioners may create 
36.14 	financial incentives for patients to select a medical home under the pilot project by 
36.15 	reducing, modifying, or eliminating deductibles and co-payments for certain services, or 
36.16 	through other incentives. The commissioners may require patients to remain with their 
36.17 	designated medical home for a specified period of time. Alternative payment methods 
36.18 	may include complete or partial capitation, fee-for-service payments, or other payment 
36.19 	methodologies. The payment methods may provide for the payment of bonuses to medical 
36.20 	home providers or other providers, or to patients, for the achievement of performance 
36.21 	goals. The payment methods may include allocating a portion of the payment that 
36.22 	would otherwise be paid to health plans under state prepaid health care programs to the 
36.23 	designated medical home for specified services.
36.24 		Subd. 3.Requirements. In order to be designated a medical home under the pilot 
36.25 	project, health care professionals or clinics must demonstrate their ability to:
36.26 	(1) be the patient's first point of contact by telephone or other means, 24 hours a 
36.27 	day, seven days a week;
36.28 	(2) provide or arrange for patients' comprehensive health care needs, including the 
36.29 	ability to structure planned chronic disease visits and to manage chronic disease through 
36.30 	the use of disease registries;
36.31 	(3) coordinate patients' care when care must be provided outside the medical home;
36.32 	(4) provide longitudinal care, not just episodic care, including meeting long-term 
36.33 	and unique personal needs;
36.34 	(5) utilize an electronic health record and incorporate a plan to develop and make 
36.35 	available to patients that choose a medical home an electronic personal health record that 
37.1 	is prepopulated with the patient's data, consumer-directed, connected to the provider, 
37.2 	24-hour accessible, and owned and controlled by the patient;
37.3 	(6) systematically improve quality of care using, among other inputs, patient 
37.4 	feedback; and
37.5 	(7) create a provider network that provides for increased reimbursement for a 
37.6 	medical home in a cost-neutral manner.
37.7 		Subd. 4.Evaluation. Pilot projects must be evaluated based on patient satisfaction, 
37.8 	provider satisfaction, clinical process and outcome measures, program costs and savings, 
37.9 	and economic impact on health care providers. Pilot projects must be evaluated based 
37.10 	on the extent to which the medical home:
37.11 	(1) coordinated health care services across the continuum of care and thereby 
37.12 	reduced duplication of services and enhanced communication across providers;
37.13 	(2) provided safe and high-quality care by increasing utilization of effective 
37.14 	treatments, reduced use of ineffective treatments, reduced barriers to essential care and 
37.15 	services, and eliminated barriers to access;
37.16 	(3) reduced unnecessary hospitalizations and emergency room visits and increased 
37.17 	use of cost-effective care and settings;
37.18 	(4) encouraged long-term patient and provider relationships by shifting from 
37.19 	episodic care to consistent, coordinated communication and care with a specified team of 
37.20 	providers or individual providers;
37.21 	(5) engaged and educated consumers by encouraging shared patient and provider 
37.22 	responsibility and accountability for disease prevention, health promotion, chronic 
37.23 	disease management, acute care, and overall well-being, encouraging informed medical 
37.24 	decision-making, ensuring the availability of accurate medical information, and facilitated 
37.25 	the transfer of accurate medical information;
37.26 	(6) encouraged innovation in payment methodologies by using patient and provider 
37.27 	incentives to coordinate care and utilize medical home services and fostering the 
37.28 	expansion of a technology infrastructure that supports collaboration; and
37.29 	(7) reduced overall health care costs as compared to conventional payment methods 
37.30 	for similar patient populations.
37.31 		Subd. 5.Rulemaking. The commissioners are exempt from administrative 
37.32 	rulemaking under Minnesota Statutes, chapter 14, for purposes of developing, 
37.33 	administering, contracting for, and evaluating pilot projects under this section. The 
37.34 	commissioner shall publish a proposed request for proposals in the State Register and 
37.35 	allow 30 days for comment before issuing the final request for proposals.
38.1 		Subd. 6.Regulatory and payment barriers. The commissioners shall study state 
38.2 	and federal statutory and regulatory barriers to the creation of medical homes and provide 
38.3 	a report and recommendations to the legislature by December 15, 2007.

38.4 	Sec. 36. HEALTH CARE SYSTEM CONSOLIDATION.
 38.5 	(a) The commissioner of health shall study the effect of health care provider and 
38.6 	health plan company consolidation in the four metropolitan statistical areas in Minnesota 
38.7 	on: health care costs, including provider payment rates; quality of care; and access 
38.8 	to care. The commissioner shall separately consider hospitals, specialty groups, and 
38.9 	primary care groups. The commissioner shall include a definition of the terms "quality 
38.10 	of care" and "access to care" to provide uniform understanding of the study's findings. 
38.11 	The commissioner shall present findings and recommendations to the legislature by 
38.12 	December 15, 2007.
38.13 	(b) For purposes of this study, health carriers, provider networks, and other health 
38.14 	care providers shall provide data on network participation, contracted payment rates, 
38.15 	charges, costs, payments received, patient referrals, and other information requested by 
38.16 	the commissioner, in the form and manner specified by the commissioner. Provider-level 
38.17 	information on contracted payment rates and payments from health plans provided to the 
38.18 	commissioner of health for the purposes of this study are (1) private data on individuals as 
38.19 	defined in Minnesota Statutes, section 13.02, subdivision 12, and (2) nonpublic data as 
38.20 	defined in Minnesota Statutes, section 13.02, subdivision 9. The commissioner may not 
38.21 	collect patient-identified data for purposes of this study. Data collected for purposes of 
38.22 	this study may not be used for any other purposes.

38.23 	Sec. 37.  REPEALER.
 38.24 	Minnesota Statutes 2006, section 62J.052, subdivision 1, is repealed effective 
38.25 	August 1, 2007.