1.1 	A bill for an act
1.2 	relating to health; guaranteeing that all necessary health care is available and 
1.3 	affordable for every Minnesotan; establishing the Minnesota Health Plan, 
1.4 	Minnesota Health Board, Minnesota Health Fund, Office of Health Quality 
1.5 	and Planning, ombudsman for patient advocacy, and inspector general for the 
1.6 	Minnesota Health Plan; appropriating money;amending Minnesota Statutes 
1.7 	2006, sections 14.03, subdivision 2; 15A.0815, subdivision 2; proposing coding 
1.8 	for new law as Minnesota Statutes, chapter 62U.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	ARTICLE 1
1.11 	GENERAL PROVISIONS

1.12 	Section 1. [62U.01] HEALTH PLAN REQUIREMENTS.
1.13 	In order to keep Minnesotans healthy and provide the best quality of health care, 
1.14 	the Minnesota Health Plan must:
1.15 	(1) ensure all Minnesotans receive high quality health care, regardless of their 
1.16 	income;
1.17 	(2) not restrict, delay, or deny care or reduce the quality of care to hold down costs, 
1.18 	but instead reduce costs through prevention, efficiency, and reduction of bureaucracy;
1.19 	(3) cover all necessary care, including all coverage currently required by law, 
1.20 	complete mental health services, chemical dependency treatment, prescription drugs, 
1.21 	medical equipment and supplies, dental care, long-term care, and home care services;
1.22 	(4) allow patients to choose their own providers;
1.23 	(5) be funded through premiums based on ability to pay and other revenue sources;
1.24 	(6) focus on preventive care and early intervention to improve the health of all 
1.25 	Minnesota residents and reduce costs from untreated illnesses and diseases;
2.1 	(7) ensure an adequate number of qualified health care professionals and facilities to 
2.2 	guarantee availability of, and timely access to quality care throughout the state;
2.3 	(8) continue Minnesota's leadership in medical education, training, research, and 
2.4 	technology; and
2.5 	(9) provide adequate and timely payments to providers.

2.6 	Sec. 2. [62U.02] MINNESOTA HEALTH PLAN GENERAL PROVISIONS.
2.7 		Subdivision 1.Short title. This chapter may be cited as the "Minnesota Health Act."
2.8 		Subd. 2.Purpose. The Minnesota Health Plan shall provide all medically necessary 
2.9 	health care services for all Minnesota residents in a manner that meets the requirements 
2.10 	in section 62U.01.
2.11 		Subd. 3.Definitions. As used in this chapter, the following terms have the meanings 
2.12 	provided:
2.13 	(a) "Board" means the Minnesota Health Board.
2.14 	(b) "Plan" means the Minnesota Health Plan.
2.15 	(c) "Fund" means the Minnesota Health Fund.
2.16 	(d) "Medically necessary" means a health service that is consistent with the 
2.17 	recipient's diagnosis or condition, is recognized as the prevailing standard or current 
2.18 	practice by the provider's peer group, and is rendered to:
2.19 	(1) treat an injury, illness, infection, or pain;
2.20 	(2) treat a condition that could result in physical or mental disability;
2.21 	(3) care for a mother and child through a maternity period;
2.22 	(4) achieve a level of physical or mental function consistent with prevailing 
2.23 	community standards for the diagnosis or condition; or
2.24 	(5) provide a preventive health service.
2.25 	(e) "Institutional provider" means an inpatient hospital, nursing facility, rehabilitation 
2.26 	facility, and other health care facilities that provide overnight care.
2.27 	(f) "Noninstitutional provider" means group practices, clinics, outpatient surgical 
2.28 	centers, imaging centers, other health facilities that do not provide overnight care, and 
2.29 	individual providers.
2.30 		Subd. 4.Ethics and conflict of interest. (a) All provisions of section 43A.38 apply 
2.31 	to employees and the executive officer of the Minnesota Health Plan, the members and 
2.32 	directors of the Minnesota Health Board, the regional health boards, the director of the 
2.33 	Office of Health Quality and Planning, the director of the Minnesota Health Fund, and 
2.34 	the ombudsman. Failure to comply with section 43A.38 shall be grounds for disciplinary 
2.35 	action including termination of employment or removal from the board.
3.1 	(b) In order to avoid the appearance of political bias or impropriety, the Minnesota 
3.2 	Health Plan executive officer shall not:
3.3 	(1) engage in leadership of, or employment by, a political party or a political 
3.4 	organization;
3.5 	(2) publicly endorse a political candidate;
3.6 	(3) contribute to any political candidates or political parties and political 
3.7 	organizations; or
3.8 	(4) attempt to avoid compliance with this subdivision by making contributions 
3.9 	through a spouse or other family member.
3.10 	(c) In order to avoid a conflict of interest, individuals specified in paragraph (a) shall 
3.11 	not be currently employed by a medical provider or a pharmaceutical, medical insurance, 
3.12 	or medical supply company. This paragraph does not apply to the five provider members 
3.13 	of the board.
3.14 		Subd. 5.Data practice. Notwithstanding chapter 13, other state agencies shall 
3.15 	cooperate with data sharing and provide all requested information to the board or board 
3.16 	designee, the Ombudsman for Patient Advocacy, the director of the Office of Health 
3.17 	Quality and Planning, and the Inspector General.

3.18 	ARTICLE 2
3.19 	ELIGIBILITY

3.20 	Section 1. [62U.03] ELIGIBILITY.
3.21 		Subdivision 1.Residency. All Minnesota residents are eligible for the Minnesota 
3.22 	Health Plan.
3.23 		Subd. 2.Enrollment; identification. The Minnesota Health Board shall establish 
3.24 	a procedure to enroll residents and provide each with identification that may be used by 
3.25 	health care providers to confirm eligibility for services. The application for enrollment 
3.26 	shall be no more than two pages.
3.27 		Subd. 3.Residents temporarily out of state. (a) The Minnesota Health Plan shall 
3.28 	provide health care coverage to Minnesota residents who are temporarily out of the state 
3.29 	who intend to return and reside in Minnesota.
3.30 	(b) Coverage for emergency care obtained out of state shall be at prevailing local 
3.31 	rates. Coverage for nonemergency care obtained out of state shall be according to rates 
3.32 	and conditions established by the board. The board may require that a resident be 
3.33 	transported back to Minnesota when prolonged treatment of an emergency condition is 
3.34 	necessary and when that transport will not adversely affect a patient's care or condition.
4.1 		Subd. 4.Visitors. Nonresidents visiting Minnesota shall be billed for all services 
4.2 	received under the Minnesota Health Plan. The board may enter into intergovernmental 
4.3 	arrangements or contracts with other states and countries to provide reciprocal coverage 
4.4 	for temporary visitors.
4.5 		Subd. 5.Nonresident employed in Minnesota. The board may extend eligibility to 
4.6 	nonresidents employed in Minnesota using a sliding premium scale.
4.7 		Subd. 6.Retiree benefits. (a) All persons who are eligible for retiree medical 
4.8 	benefits under an employer-employee contract, including retirees who elect to reside 
4.9 	outside of Minnesota, shall remain eligible for those benefits provided the contractually 
4.10 	mandated payments for those benefits are made to the Minnesota Health Fund, which shall 
4.11 	assume financial responsibility for care provided under the terms of the contract.
4.12 	(b) The board may establish financial arrangements with states and foreign countries 
4.13 	in order to facilitate meeting the terms of the contracts described in paragraph (a). 
4.14 	Payments for care provided by non-Minnesota providers to Minnesota retirees shall be 
4.15 	reimbursed at rates established by the Minnesota Health Board.
4.16 		Subd. 7.Presumptive eligibility. (a) An individual is presumed eligible for 
4.17 	coverage under the Minnesota Health Plan if the individual arrives at a health facility 
4.18 	unconscious, comatose, or otherwise unable, because of the individual's physical or 
4.19 	mental condition, to document eligibility or to act on the individual's own behalf. If the 
4.20 	patient is a minor, the patient is presumed eligible, and the health facility shall provide 
4.21 	care as if the patient were eligible.
4.22 	(b) Any individual is presumed eligible when brought to a health facility according 
4.23 	to any provision of section 253B.05.
4.24 	(c) Any individual involuntarily committed to an acute psychiatric facility or to a 
4.25 	hospital with psychiatric beds according to any provision of section 253B.05, providing 
4.26 	for involuntary commitment, is presumed eligible.
4.27 	(d) All health facilities subject to state and federal provisions governing emergency 
4.28 	medical treatment must comply with those provisions.

4.29 	ARTICLE 3
4.30 	BENEFITS

4.31 	Section 1. [62U.04] BENEFITS.
4.32 		Subdivision 1.General provisions. Any eligible individual may choose to receive 
4.33 	services under the Minnesota Health Plan from any licensed participating provider. A 
4.34 	provider may not refuse to care for a patient on the basis that is specified in the definition 
4.35 	of unfair employment practice in section 363A.08.
5.1 		Subd. 2.Covered benefits. Covered benefits in this chapter include all medically 
5.2 	necessary care subject to the limitations specified in subdivision 4. Covered benefits 
5.3 	include:
5.4 	(1) inpatient and outpatient health facility services;
5.5 	(2) inpatient and outpatient professional health care provider services by licensed 
5.6 	health care professionals;
5.7 	(3) diagnostic imaging, laboratory services, and other diagnostic and evaluative 
5.8 	services;
5.9 	(4) medical equipment, appliances, and assistive technology, including prosthetics, 
5.10 	eyeglasses, and hearing aids and their repair;
5.11 	(5) inpatient and outpatient rehabilitative care;
5.12 	(6) emergency transportation;
5.13 	(7) necessary transportation for health care services for disabled and indigent 
5.14 	persons;
5.15 	(8) language interpretation and translation for health care services, including sign 
5.16 	language and Braille or other services needed for individuals with communication 
5.17 	disabilities;
5.18 	(9) child and adult immunizations and preventive care;
5.19 	(10) health education;
5.20 	(11) hospice care;
5.21 	(12) home health care;
5.22 	(13) all prescription drugs on the Minnesota Health Plan formulary and additional 
5.23 	drugs as specified by the board;
5.24 	(14) all prescription drugs as determined by the board if the Minnesota Health Plan 
5.25 	does not have a prescription drug formulary;
5.26 	(15) mental health services;
5.27 	(16) dental care;
5.28 	(17) podiatric care;
5.29 	(18) chiropractic care;
5.30 	(19) acupuncture;
5.31 	(20) blood and blood products;
5.32 	(21) emergency care services;
5.33 	(22) vision care;
5.34 	(23) adult day care;
5.35 	(24) case management and coordination to ensure services necessary to enable a 
5.36 	person to remain safely in the least restrictive setting;
6.1 	(25) substance abuse treatment;
6.2 	(26) care in a skilled nursing facility; and
6.3 	(27) dialysis.
6.4 		Subd. 3.Benefit expansion. The Minnesota Health Board may expand benefits 
6.5 	beyond the minimum benefits described in this section when expansion meets the intent of 
6.6 	this chapter and when there are sufficient funds to cover the expansion.
6.7 		Subd. 4.Exclusions. The following health care services shall be excluded from 
6.8 	coverage by the Minnesota Health Plan:
6.9 	(1) health care services determined to have no medical benefit by the board;
6.10 	(2) surgery, dermatology, orthodontia, prescription drugs, and other procedures 
6.11 	primarily for cosmetic purposes, unless required to correct a congenital defect, restore or 
6.12 	correct a part of the body that has been altered as a result of injury, disease, or surgery, or 
6.13 	determined to be medically necessary by a qualified, licensed health care provider in the 
6.14 	Minnesota Health Plan;
6.15 	(3) private rooms in inpatient health facilities where appropriate nonprivate rooms 
6.16 	are available, unless determined to be medically necessary by a qualified, licensed 
6.17 	provider in the Minnesota Health Plan; and
6.18 	(4) services of a health care provider or facility that is not licensed or accredited 
6.19 	by the state, except for approved services provided to a Minnesota resident who is 
6.20 	temporarily out of the state.
6.21 		Subd. 4a.Prohibition. The Minnesota Health Plan shall not pay for prescription 
6.22 	drugs from pharmaceutical companies that directly market the drugs to consumers.
6.23 		Subd. 5.No-cost sharing. No deductible, co-payment, co-insurance, or other 
6.24 	cost-sharing shall be imposed with respect to covered benefits.

6.25 	Sec. 2. [62U.041] CARE COORDINATION.
6.26 	(a) All patients shall have a primary care provider or other provider who shall 
6.27 	coordinate the care a patient receives. A specialist may serve as the care coordinator 
6.28 	if the patient and the specialist agree to this arrangement, and if the specialist agrees 
6.29 	to coordinate the patient's care.
6.30 	(b) Referrals are not required for a patient to see a health care specialist. If a patient 
6.31 	sees a specialist and does not have a care coordinator, the patient must choose a care 
6.32 	coordinator. The Minnesota Health Plan may assist with choosing a primary care provider 
6.33 	to coordinate care.
6.34 	(c) The board may establish or ensure the establishment of a computerized referral 
6.35 	registry to facilitate referrals.

7.1 	ARTICLE 4
7.2 	FUNDING

7.3 	Section 1. [62U.19] MINNESOTA HEALTH FUND.
7.4 		Subdivision 1.General provisions. (a) The board shall establish a Minnesota 
7.5 	Health Fund to implement the Minnesota Health Plan and to receive premiums and 
7.6 	other sources of revenue. The fund shall be administered by a director appointed by the 
7.7 	Minnesota Health Board.
7.8 	(b) All money collected, received, and transferred according to this chapter shall 
7.9 	be deposited in the Minnesota Health Fund for the purpose of financing the Minnesota 
7.10 	Health Plan.
7.11 	(c) Money deposited in the Minnesota Health Fund shall be used exclusively to 
7.12 	implement the purpose of this chapter.
7.13 	(d) All claims for health care services rendered shall be made to the Minnesota 
7.14 	Health Fund.
7.15 	(e) All payments made for health care services shall be disbursed from the Minnesota 
7.16 	Health Fund.
7.17 	(f) Premiums and other revenues collected each year must be sufficient to cover 
7.18 	that year's projected costs.
7.19 		Subd. 2.Accounts. The Minnesota Health Fund shall have operating, capital, and 
7.20 	reserve accounts to provide for all state expenditures for health care.
7.21 		Subd. 3.Budgets within the operating account. The operating account in 
7.22 	the Minnesota Health Fund shall be comprised of the accounts and budgets specified 
7.23 	in paragraphs (a) to (e).
7.24 	(a) Medical services budget and account. The medical services budget and 
7.25 	account must be used to provide for all medical services and benefits covered under the 
7.26 	Minnesota Health Plan.
7.27 	(b) Prevention budget and account. The prevention budget and account must be 
7.28 	used solely to establish and maintain primary community prevention programs, including 
7.29 	preventive screening tests.
7.30 	(c) Program administration, evaluation, planning, and assessment budget and 
7.31 	account.  The program administration, evaluation, planning, and assessment budget and 
7.32 	account must be used to monitor and improve the plan's effectiveness and operations. The 
7.33 	board may establish grant programs including demonstration projects for this purpose.
7.34 	(d) Training, development, and continuing education budget and account. The 
7.35 	training, development, and continuing education budget and account must be used to 
8.1 	support the training, development, and continuing education of health care providers and 
8.2 	the health care workforce needed to meet the health care needs of the population.
8.3 	(e) Medical research budget and account. The medical research budget and 
8.4 	account must be used to support research and innovation as determined by the Minnesota 
8.5 	Health Board, and recommended by the Office of Health Quality and Planning and the 
8.6 	Ombudsman for Patient Advocacy.
8.7 		Subd. 4.Capital account. The capital account must be used solely to pay for capital 
8.8 	expenditures for institutional providers and all capital expenditures requiring approval 
8.9 	from the Minnesota Health Board as specified in section 62U.05, subdivision 4.
8.10 		Subd. 5.Reserve account. (a) The Minnesota Health Plan must at all times hold in 
8.11 	reserve an amount estimated in the aggregate to provide for the payment of all losses and 
8.12 	claims for which the Minnesota Health Plan may be liable and to provide for the expense 
8.13 	of adjustment or settlement of losses and claims.
8.14 	(b) Money currently held in reserve by state, city, and county health programs must 
8.15 	be transferred to the Minnesota Health Fund when the Minnesota Health Plan replaces 
8.16 	those programs.
8.17 	(c) The board shall have provisions in place to insure the Minnesota Health Plan 
8.18 	against unforeseen expenditures or revenue shortfalls not covered by the reserve account 
8.19 	and the board may borrow money to cover temporary shortfalls.

8.20 	Sec. 2. [62U.20] REVENUE SOURCES.
8.21 		Subdivision 1.Minnesota Health Plan premium. (a) The Minnesota Health Board 
8.22 	shall:
8.23 	(1) determine the aggregate costs of providing health care according to this chapter;
8.24 	(2) develop an equitable and affordable premium structure, including unearned 
8.25 	income as part of the premium determination for Minnesota residents, that is progressive 
8.26 	and based on the ability to pay and an employer health premium for businesses that 
8.27 	together will generate adequate revenue for the Minnesota Health Fund;
8.28 	(3) in consultation with the Department of Revenue, develop an efficient means of 
8.29 	collecting premiums and employer health premiums; and
8.30 	(4) coordinate with existing, ongoing funding sources from federal and state 
8.31 	programs.
8.32 	(b) On or before January 15, 2010, the board shall submit to the governor and the 
8.33 	legislature a report on the premium and employer health premium structure established to 
8.34 	finance the Minnesota Health Plan.
9.1 		Subd. 2.Funds from outside sources. Institutional providers operating under 
9.2 	Minnesota Health Plan operating budgets may raise and expend funds from sources other 
9.3 	than the Minnesota Health Plan including private or foundation donors. Contributions to 
9.4 	providers in excess of $500,000 must be reported to the board.
9.5 		Subd. 3.Governmental payments. The executive officer and, if required under 
9.6 	federal law, the commissioners of health and human services shall seek all necessary 
9.7 	waivers, exemptions, agreements, or legislation so that all current federal payments to the 
9.8 	state for health care are paid directly to the Minnesota Health Plan, which shall then assume 
9.9 	responsibility for all benefits and services previously paid for by the federal government 
9.10 	with those funds. In obtaining the waivers, exemptions, agreements, or legislation, the 
9.11 	executive officer and, if required, commissioners shall seek from the federal government a 
9.12 	contribution for health care services in Minnesota that reflects: medical inflation, the state 
9.13 	gross domestic product, the size and age of the population, the number of residents living 
9.14 	below the poverty level, and the number of Medicare and VA eligible individuals, and does 
9.15 	not decrease in relation to the federal contribution to other states as a result of the waivers, 
9.16 	exemptions, agreements, or savings from implementation of the Minnesota Health Plan.
9.17 		Subd. 4.Federal preemption. (a) The board shall pursue all reasonable means to 
9.18 	secure a repeal or a waiver of any provision of federal law that preempts any provision of 
9.19 	this chapter. The commissioners of health and human services shall provide all necessary 
9.20 	assistance.
9.21 	(b) In the event that a repeal or a waiver of law or regulations cannot be secured, 
9.22 	the board shall adopt rules, or seek conforming state legislation, consistent with federal 
9.23 	law, in an effort to best fulfill the purposes of this chapter.
9.24 	(c) The Minnesota Health Plan's responsibility for providing care shall be secondary 
9.25 	to existing federal government programs for health care services to the extent that funding 
9.26 	for these programs is not transferred to the Minnesota Health Fund or that the transfer 
9.27 	is delayed beyond the date on which initial benefits are provided under the Minnesota 
9.28 	Health Plan.

9.29 	Sec. 3. [62U.21] SUBROGATION.
9.30 		Subdivision 1.Collateral source. (a) When other payers for health care have been 
9.31 	terminated, health care costs shall be collected from collateral sources whenever medical 
9.32 	services provided to an individual are, or may be, covered services under a policy of 
9.33 	insurance, or other collateral source available to that individual, or when the individual 
9.34 	has a right of action for compensation permitted under law.
9.35 	(b) As used in this section, collateral source includes:
10.1 	(1) health insurance policies and the medical components of automobile, 
10.2 	homeowners, and other forms of insurance;
10.3 	(2) medical components of worker's compensation;
10.4 	(3) pension plans;
10.5 	(4) employer plans;
10.6 	(5) employee benefit contracts;
10.7 	(6) government benefit programs;
10.8 	(7) a judgment for damages for personal injury; and
10.9 	(8) any third party who is or may be liable to an individual for health care services 
10.10 	or costs.
10.11 	(c) Collateral source does not include:
10.12 	(1) a contract or plan that is subject to federal preemption; or
10.13 	(2) any governmental unit, agency, or service, to the extent that subrogation 
10.14 	is prohibited by law. An entity described in paragraph (b) is not excluded from the 
10.15 	obligations imposed by this section by virtue of a contract or relationship with a 
10.16 	government unit, agency, or service.
10.17 	(d) The board shall negotiate waivers, seek federal legislation, or make other 
10.18 	arrangements to incorporate collateral sources into the Minnesota Health Plan.
10.19 		Subd. 2.Collateral source; negotiation. When an individual who receives health 
10.20 	care services under the Minnesota Health Plan is entitled to coverage, reimbursement, 
10.21 	indemnity, or other compensation from a collateral source, the individual shall notify the 
10.22 	health care provider and provide information identifying the collateral source, the nature 
10.23 	and extent of coverage or entitlement, and other relevant information. The health care 
10.24 	provider shall forward this information to the board. The individual entitled to coverage, 
10.25 	reimbursement, indemnity, or other compensation from a collateral source shall provide 
10.26 	additional information as requested by the board.
10.27 		Subd. 3.Reimbursement. (a) The Minnesota Health Plan shall seek reimbursement 
10.28 	from the collateral source for services provided to the individual and may institute 
10.29 	appropriate action, including legal proceedings, to recover the reimbursement. Upon 
10.30 	demand, the collateral source shall pay to the Minnesota Health Fund the sums it would 
10.31 	have paid or expended on behalf of the individual for the health care services provided by 
10.32 	the Minnesota Health Plan.
10.33 	(b) In addition to any other right to recovery provided in this section, the board shall 
10.34 	have the same right to recover the reasonable value of benefits from a collateral source as 
10.35 	provided to the commissioner of human services under section 256B.37.
11.1 	(c) If a collateral source is exempt from subrogation or the obligation to reimburse 
11.2 	the Minnesota Health Plan, the board may require that an individual who is entitled to 
11.3 	medical services from the source first seek those services from that source before seeking 
11.4 	those services from the Minnesota Health Plan.
11.5 	(d) To the extent permitted by federal law, the board shall have the same right of 
11.6 	subrogation over contractual retiree health benefits provided by employers as other 
11.7 	contracts, allowing the Minnesota Health Plan to recover the cost of services provided to 
11.8 	individuals covered by the retiree benefits, unless arrangements are made to transfer the 
11.9 	revenues of the benefits directly to the Minnesota Health Plan.
11.10 		Subd. 4.Defaults, underpayments, and late payments. (a) Default, underpayment, 
11.11 	or late payment of any tax or other obligation imposed by this chapter shall result in the 
11.12 	remedies and penalties provided by law, except as provided in this section.
11.13 	(b) Eligibility for benefits under section 62U.04 shall not be impaired by any 
11.14 	default, underpayment, or late payment of any premium or other obligation imposed 
11.15 	by this chapter.

11.16 	ARTICLE 5
11.17 	PAYMENTS

11.18 	Section 1. [62U.05] PROVIDER PAYMENTS.
11.19 		Subdivision 1.General provisions. (a) All health care providers licensed to practice 
11.20 	in Minnesota may participate in the Minnesota health plan.
11.21 	(b) A participating health care provider shall comply with all federal laws and 
11.22 	regulations governing referral fees and fee splitting including, but not limited to, United 
11.23 	States Code, title 42, sections 1320a-7b and 1395nn, whether reimbursed by federal funds 
11.24 	or not.
11.25 	(c) A fee schedule or financial incentive may not adversely affect the care a patient 
11.26 	receives or the care a health provider recommends.
11.27 		Subd. 2.Payments to noninstitutional providers. (a) The Minnesota Health Board 
11.28 	shall establish and oversee a uniform fee schedule for noninstitutional providers.
11.29 	(b) The board shall pay noninstitutional providers based on rates negotiated with 
11.30 	providers. Rates may factor in geographic differences to address provider shortages.
11.31 	(c) The board shall examine the need for and methods of paying providers for care 
11.32 	coordination for all patients especially those with chronic illness and complex medical 
11.33 	needs.
12.1 	(d) Providers may request reimbursement of ancillary health care or social services 
12.2 	that were previously funded by money now received and disbursed by the Minnesota 
12.3 	health fund.
12.4 	(e) Providers who accept any payment from the Minnesota health plan for a covered 
12.5 	service shall not bill the patient for the covered service.
12.6 	(f) Providers shall be paid within 30 business days for claims filed following 
12.7 	procedures established by the board.
12.8 		Subd. 3.Payments to institutional providers. (a) The board shall establish annual 
12.9 	budgets for institutional providers. These budgets shall consist of an operating and a 
12.10 	capital budget. An institution's annual budget shall be negotiated to cover its anticipated 
12.11 	services for the next year based on past performance and projected changes in prices 
12.12 	and service levels.
12.13 	(b) Providers who accept any payment from the Minnesota Health Plan for a covered 
12.14 	service shall not bill the patient for the covered service.
12.15 		Subd. 4.Capital management plan. (a) The board shall periodically develop a 
12.16 	capital investment plan that will serve as a guide in determining the annual budgets of 
12.17 	institutional providers and in deciding whether to approve applications for approval of 
12.18 	capital expenditures by noninstitutional providers.
12.19 	(b) Providers who propose to make capital purchases in excess of $500,000 must 
12.20 	obtain board approval. The board may alter the threshold expenditure level that triggers 
12.21 	the requirement to submit information on capital expenditures. Institutional providers 
12.22 	shall propose these expenditures and submit the required information as part of the annual 
12.23 	budget they submit to the board. Noninstitutional providers shall submit applications for 
12.24 	approval of these expenditures to the board.

12.25 	ARTICLE 6
12.26 	GOVERNANCE

12.27 	Section 1. Minnesota Statutes 2006, section 14.03, subdivision 2, is amended to read:
12.28 		Subd. 2.Contested case procedures. The contested case procedures of the 
12.29 	Administrative Procedure Act provided in sections 14.57 to 14.69 do not apply to (a) 
12.30 	proceedings under chapter 414, except as specified in that chapter, (b) the commissioner of 
12.31 	corrections, (c) the unemployment insurance program and the Social Security disability 
12.32 	determination program in the Department of Employment and Economic Development, 
12.33 	(d) the commissioner of mediation services, (e) the Workers' Compensation Division in 
12.34 	the Department of Labor and Industry, (f) the Workers' Compensation Court of Appeals, 
12.35 	or (g) the Board of Pardons, or (h) the Minnesota Health Plan. 

13.1 	Sec. 2. Minnesota Statutes 2006, section 15A.0815, subdivision 2, is amended to read:
13.2 		Subd. 2.Group I salary limits. The salaries for positions in this subdivision may 
13.3 	not exceed 95 percent of the salary of the governor:
13.4 	Commissioner of administration;
13.5 	Commissioner of agriculture;
13.6 	Commissioner of education;
13.7 	Commissioner of commerce;
13.8 	Commissioner of corrections;
13.9 	Commissioner of employee relations;
13.10 	Commissioner of finance;
13.11 	Commissioner of health;
13.12 	Executive officer of the Minnesota Health Plan;
13.13 	Executive director, Minnesota Office of Higher Education;
13.14 	Commissioner, Housing Finance Agency;
13.15 	Commissioner of human rights;
13.16 	Commissioner of human services;
13.17 	Commissioner of labor and industry;
13.18 	Commissioner of natural resources;
13.19 	Director of Office of Strategic and Long-Range Planning;
13.20 	Commissioner, Pollution Control Agency;
13.21 	Commissioner of public safety;
13.22 	Commissioner of revenue;
13.23 	Commissioner of employment and economic development;
13.24 	Commissioner of transportation; and
13.25 	Commissioner of veterans affairs.

13.26 	Sec. 3. [62U.06] MINNESOTA HEALTH BOARD.
13.27 		Subdivision 1.Establishment. The Minnesota Health Board is established to 
13.28 	promote the delivery of high quality, coordinated health care services that enhance health; 
13.29 	prevent illness, disease, and disability; slow the progression of chronic diseases; and 
13.30 	improve personal health management. The board shall administer the Minnesota Health 
13.31 	Plan. The board shall oversee:
13.32 	(1) the Office of Health Quality and Planning under section 62U.09; and
13.33 	(2) the Minnesota Health Fund under section 62U.19.
13.34 		Subd. 2.Board composition. The board shall consist of 15 members, including 
13.35 	a representative selected by each of the five rural regional health planning boards under 
14.1 	section 62U.08 and three representatives selected by the metropolitan regional health 
14.2 	planning board under section 62U.08. These members shall select the following:
14.3 	(1) one consumer member and one employer member appointed by the board 
14.4 	members; and
14.5 	(2) five providers appointed by the board members that include one primary care 
14.6 	physician, one registered nurse, one mental health provider, one dentist, and one facility 
14.7 	director.
14.8 	The board shall select the chair from its membership.
14.9 		Subd. 3.Term and compensation. Board members shall serve four years. Board 
14.10 	members shall set the board's compensation not to exceed the compensation of Public 
14.11 	Utilities Commission members.
14.12 		Subd. 4.General duties. The board shall:
14.13 	(1) ensure that all of the requirements of section 62U.01 are met; 
14.14 	(2) hire an executive officer for the Minnesota Health Plan to administer all aspects 
14.15 	of the plan as directed by the board;
14.16 	(3) hire a director for the Office of Health Quality and Planning;
14.17 	(4) hire a director of the Minnesota Health Fund;
14.18 	(5) provide technical assistance to the regional boards established under section 
14.19 	62U.08;
14.20 	(6) conduct necessary investigations and inquiries and require the submission of 
14.21 	information, documents, and records the board considers necessary to carry out the 
14.22 	purposes of this chapter;
14.23 	(7) establish a process for the board to receive the concerns, opinions, ideas, and 
14.24 	recommendations of the public regarding all aspects of the Minnesota Health Plan and 
14.25 	the means of addressing those concerns;
14.26 	(8) conduct other activities the board considers necessary to carry out the purposes 
14.27 	of this chapter;
14.28 	(9) collaborate with the agencies that license health facilities to ensure that facility 
14.29 	performance is monitored and that deficient practices are recognized and corrected in a 
14.30 	timely manner;
14.31 	(10) adopt rules as necessary to carry out the duties assigned under this chapter;
14.32 	(11) establish conflict of interest standards prohibiting providers from any financial 
14.33 	benefit from their medical decisions outside of board reimbursement; and
14.34 	(12) establish conflict of interest standards related to pharmaceutical marketing to 
14.35 	providers.
14.36 		Subd. 5.Financial duties. The board shall:
15.1 	(1) establish and collect premiums and employer health premiums according to 
15.2 	section 62U.20, subdivision 1;
15.3 	(2) approve statewide and regional budgets that include budgets for the accounts 
15.4 	in section 62U.19;
15.5 	(3) establish payment rates for providers which may reflect regional differences to 
15.6 	address provider shortages;
15.7 	(4) monitor compliance with all budgets and payment rates and take action to 
15.8 	achieve compliance to the extent authorized by law;
15.9 	(5) pay claims for medical products or services as negotiated, and may issue requests 
15.10 	for proposals for a contract to process claims submitted by individual nonprofit providers;
15.11 	(6) negotiate fees, prices, and budgets;
15.12 	(7) administer the Minnesota Health Fund created under section 62U.19;
15.13 	(8) annually determine the appropriate level for the Minnesota Health Plan reserve 
15.14 	account and implement policies needed to establish the appropriate reserve;
15.15 	(9) implement fraud prevention measures necessary to protect the operation of 
15.16 	the Minnesota Health Plan; and
15.17 	(10) work to ensure appropriate cost control by:
15.18 	(i) instituting aggressive public health measures, early intervention and preventive 
15.19 	care, and promotion of personal health improvement;
15.20 	(ii) making changes in the delivery of health care services and administration that 
15.21 	improve efficiency and care quality;
15.22 	(iii) minimizing administrative costs;
15.23 	(iv) ensuring that the delivery system does not contain excess capacity; and
15.24 	(v) negotiating the lowest possible prices for prescription drugs, medical equipment, 
15.25 	and medical services.
15.26 	If the board determines that there will be a revenue shortfall despite the cost control 
15.27 	measures mentioned in clause (10), the board shall implement measures to correct the 
15.28 	shortfall, including an increase in premiums. The board shall report to the legislature on 
15.29 	the causes of the shortfall, reasons for the failure of cost controls, and measures taken to 
15.30 	correct the shortfall.
15.31 		Subd. 6.Minnesota Health Board management duties. The board shall:
15.32 	(1) develop and implement enrollment procedures for providers and persons eligible 
15.33 	for the program and disseminate, to providers of services and to the public, information 
15.34 	concerning the program and the persons eligible to receive benefits under the program;
16.1 	(2) implement eligibility standards for the Minnesota Health Plan, including 
16.2 	standards to prevent an influx of persons to the state for the purpose of obtaining medical 
16.3 	care;
16.4 	(3) make recommendations, when needed, to the legislature about changes in the 
16.5 	geographic boundaries of the health planning regions;
16.6 	(4) establish an electronic claims and payments system for the Minnesota Health 
16.7 	Plan;
16.8 	(5) monitor the operation of the Minnesota Health Plan through consumer surveys 
16.9 	and regular data collection and evaluation activities, including evaluations of the adequacy 
16.10 	and quality of services furnished under the program, the need for changes in the benefit 
16.11 	package, the cost of each type of service, and the effectiveness of cost control measures 
16.12 	under the program;
16.13 	(6) establish a health care Web site that provides information to the public about the 
16.14 	Minnesota Health Plan including access information on providers and facilities, and that 
16.15 	informs the public about state and regional health planning board meetings and activities;
16.16 	(7) collaborate with public health agencies, schools, and community clinics;
16.17 	(8) ensure that Minnesota Health Plan policies and providers, including public 
16.18 	health providers, support all Minnesota residents in achieving and maintaining maximum 
16.19 	physical and mental health functionality; and
16.20 	(9) annually report to the legislature on the performance of the Minnesota Health 
16.21 	Plan, fiscal condition and need for payment adjustments, any needed changes in 
16.22 	geographic boundaries of the health planning regions, recommendations for statutory 
16.23 	changes, receipt of revenue from all sources, whether current year goals and priorities are 
16.24 	met, future goals and priorities, major new technology or prescription drugs, and other 
16.25 	circumstances that may affect the cost of health care.
16.26 		Subd. 7.Policy duties. The board shall:
16.27 	(1) develop and implement cost control and quality assurance procedures, including 
16.28 	a professional peer review system;
16.29 	(2) ensure strong public health services including education and community 
16.30 	prevention and clinical services;
16.31 	(3) ensure a continuum of coordinated high-quality primary to tertiary care to all 
16.32 	Minnesota residents; and
16.33 	(4) implement policies to ensure that all Minnesotans receive culturally and 
16.34 	linguistically competent care.

16.35 	Sec. 4. [62U.07] HEALTH PLANNING REGIONS.
17.1 	A metropolitan health planning region consisting of the seven-county metropolitan 
17.2 	area is established as well as five rural health planning regions from the greater Minnesota 
17.3 	area composed of geographically contiguous counties grouped on the basis of the 
17.4 	following considerations:
17.5 	(1) patterns of utilization of health care services;
17.6 	(2) health care resources, including workforce resources;
17.7 	(3) health needs of the population, including public health needs;
17.8 	(4) geography;
17.9 	(5) population and demographic characteristics; and
17.10 	(6) other considerations as appropriate.
17.11 	The commissioner of health shall designate the health planning regions.

17.12 	Sec. 5. [62U.08] REGIONAL HEALTH PLANNING BOARD.
17.13 		Subdivision 1.Regional planning board composition. (a) Initially, each regional 
17.14 	board shall consist of one county commissioner per county and two county commissioners 
17.15 	per county in the seven-county metropolitan area. A county commissioner may designate 
17.16 	a representative to act as a member of the board in the member's absence. Each board 
17.17 	shall select the chair from among its membership.
17.18 	(b) Board members shall serve for four-year terms and may receive per diems for 
17.19 	meetings at the rate specified in section 15.059, subdivision 3.
17.20 		Subd. 2.Regional health board duties. Regional health planning boards shall:
17.21 	(1) recommend health standards, goals, priorities, and guidelines for the region;
17.22 	(2) prepare an operating and capital budget for the region to recommend to the 
17.23 	Minnesota Health Board;
17.24 	(3) collaborate with local public health care agencies to educate consumers and 
17.25 	providers on public health programs, goals, and the means of reaching those goals;
17.26 	(4) hire a regional health planning director;
17.27 	(5) collaborate with public health care agencies to implement public health and 
17.28 	wellness initiatives; and
17.29 	(6) ensure that all parts of the region have access to a 24-hour nurse hotline and 
17.30 	24-hour urgent care clinics.

17.31 	Sec. 6. [62U.09] OFFICE OF HEALTH QUALITY AND PLANNING.
17.32 		Subdivision 1.Establishment. The Minnesota Health Board shall establish an 
17.33 	Office of Health Quality and Planning to assess the quality, access, and funding adequacy 
17.34 	of the Minnesota Health Plan.
18.1 		Subd. 2.General duties. (a) The Office of Health Quality and Planning shall make 
18.2 	annual recommendations to the board on the overall direction on subjects including:
18.3 	(1) the overall effectiveness of the Minnesota Health Plan in addressing public 
18.4 	health and wellness;
18.5 	(2) access to care;
18.6 	(3) quality improvement;
18.7 	(4) efficiency of administration;
18.8 	(5) adequacy of budget and funding;
18.9 	(6) appropriateness of payments for providers;
18.10 	(7) capital expenditure needs;
18.11 	(8) long-term care;
18.12 	(9) mental health and substance abuse services;
18.13 	(10) staffing levels and working conditions in health care facilities;
18.14 	(11) identification of number and mix of health care facilities and providers required 
18.15 	to best meet the needs of the Minnesota Health Plan;
18.16 	(12) care for chronically ill patients;
18.17 	(13) research needs; and
18.18 	(14) integration of disease management programs into care delivery.
18.19 	(b) Analyze shortages in health care workforce required to meet the needs of the 
18.20 	population and develop plans to meet those needs in collaboration with regional planners 
18.21 	and educational institutions.
18.22 	(c) Assist in coordination of the Minnesota Health Plan and public health programs.
18.23 		Subd. 3.Assessment and evaluation of benefits. The Office of Health Quality 
18.24 	and Planning shall:
18.25 	(1) consider benefit additions to the Minnesota Health Plan and evaluate them based 
18.26 	on evidence of clinical efficacy;
18.27 	(2) establish a process and criteria by which providers may request authorization 
18.28 	to provide services and treatments that are not included in the Minnesota Health Plan 
18.29 	benefit set, including experimental treatments;
18.30 	(3) evaluate proposals to increase the efficiency and effectiveness of the health care 
18.31 	delivery system, and make recommendations to the board based on the cost-effectiveness 
18.32 	of the proposals; and
18.33 	(4) identify complementary and alternative modalities that have been shown to be 
18.34 	safe and effective.

18.35 	Sec. 7. [62U.10] OMBUDSMAN OFFICE FOR PATIENT ADVOCACY.
19.1 		Subdivision 1.Creation of office; generally. (a) The Ombudsman Office for 
19.2 	Patient Advocacy is created to represent the interests of the consumers of health care. 
19.3 	The ombudsman shall help residents of the state secure the health care services and 
19.4 	benefits they are entitled to under the laws administered by the Minnesota Health Board 
19.5 	and advocate on behalf of and represent the interests of enrollees in entities created by 
19.6 	this chapter and in other forums.
19.7 	(b) The ombudsman shall be a patient advocate appointed by the governor, who 
19.8 	serves in the unclassified service and may be removed only for just cause. The ombudsman 
19.9 	must be selected without regard to political affiliation and must be knowledgable about 
19.10 	and have experience in health care services and administration.
19.11 	(c) The ombudsman may gather information about decisions, acts, and other matters 
19.12 	of the Minnesota Health Board, health care organization, or a health care program. A 
19.13 	person may not serve as ombudsman while holding another public office.
19.14 	(d) The budget for the ombudsman's office shall be determined by the legislature and 
19.15 	is independent from the Minnesota Health Board which has no oversight or authority over 
19.16 	the ombudsman for patient advocacy. The ombudsman shall establish offices to provide 
19.17 	convenient access to residents. 
19.18 		Subd. 2.Ombudsman's duties. (a) The ombudsman for patient advocacy shall:
19.19 	(1) ensure that patient advocacy services are available to all Minnesota residents; 
19.20 	(2) establish and maintain the grievance process according to section 62U.11;
19.21 	(3) receive, evaluate, and respond to consumer complaints about the Minnesota 
19.22 	Health Plan;
19.23 	(4) establish a process to receive recommendations from the public about ways to 
19.24 	improve the Minnesota Health Plan;
19.25 	(5) develop educational and informational guides according to communication 
19.26 	services under section 15.441, describing consumer rights and responsibilities;
19.27 	(6) ensure the guides in clause (5) are widely available to consumers and specifically 
19.28 	available in provider offices and health care facilities; and
19.29 	(7) report annually to the public, the board, and the legislature about the consumer 
19.30 	perspective on the performance of the Minnesota Health Plan, including recommendations 
19.31 	for needed improvements.
19.32 	(b) The patient advocate, in carrying out assigned duties, shall have unlimited access 
19.33 	to all nonconfidential and all nonprivileged documents in the custody and control of the 
19.34 	Minnesota Health Board.

19.35 	Sec. 8. [62U.11] GRIEVANCE SYSTEM.
20.1 		Subdivision 1.Grievance system established. The ombudsman for patient 
20.2 	advocacy shall establish a grievance system for all complaints. The system shall provide 
20.3 	reasonable procedures that shall ensure adequate consideration of Minnesota Health Plan 
20.4 	enrollee grievances and appropriate remedies.
20.5 		Subd. 2.Referral of grievances. The ombudsman for patient advocacy may 
20.6 	refer any grievance that does not pertain to compliance with this chapter to the federal 
20.7 	Center for Medicaid or any other appropriate local, state, and federal government entity 
20.8 	for investigation and resolution.
20.9 		Subd. 3.Submittal by designated agents and providers. A provider may join 
20.10 	with, or otherwise assist, a complainant to submit the grievance to the ombudsman 
20.11 	without fear of retribution.
20.12 		Subd. 4.Review of documents. The ombudsman may require additional 
20.13 	information from health care providers or the board.
20.14 		Subd. 5.Written notice of disposition. The ombudsman shall send a written 
20.15 	notice of the final disposition of the grievance, and the reasons for the decision, to the 
20.16 	complainant, to any provider who is assisting the complainant, and to the board, within 30 
20.17 	calendar days of receipt of the request for review unless the ombudsman determines that 
20.18 	additional time is reasonably necessary to fully and fairly evaluate the relevant grievance. 
20.19 	The ombudsman's order of corrective action shall be binding on the Minnesota Health 
20.20 	Plan. Decisions of the ombudsman may be appealed in district court.

20.21 	Sec. 9. [62U.12] INSPECTOR GENERAL FOR THE MINNESOTA HEALTH 
20.22 	PLAN.
20.23 		Subdivision 1.Establishment. There is within the Office of the Attorney General an 
20.24 	inspector general for the Minnesota Health Plan who is appointed by the attorney general.
20.25 		Subd. 2.Duties. The inspector general shall:
20.26 	(1) investigate, audit, and review the financial and business records of individuals, 
20.27 	public and private agencies and institutions, and private corporations that provide services 
20.28 	or products to the Minnesota Health Plan, the costs of which are reimbursed by the 
20.29 	Minnesota Health Plan;
20.30 	(2) investigate allegations of misconduct on the part of an employee or appointee 
20.31 	of the Minnesota Health Board and on the part of any provider of health care services 
20.32 	that is reimbursed by the Minnesota Health Plan, and report any findings of misconduct 
20.33 	to the attorney general;
21.1 	(3) investigate patterns of medical practice that may indicate fraud and abuse 
21.2 	related to over or under utilization or other inappropriate utilization of medical products 
21.3 	and services;
21.4 	(4) arrange for the collection and analysis of data needed to investigate the 
21.5 	inappropriate utilization of these products and services; and 
21.6 	(5) annually report recommendations for improvements to the Minnesota Health 
21.7 	Plan to the board.

21.8 	Sec. 10. [62U.13] EXAMINATION BY LEGISLATIVE AUDITOR.
21.9 	The books and all operating policies and procedures of the Minnesota Health Board 
21.10 	shall be subject to examination by the legislative auditor.

21.11 	ARTICLE 7
21.12 	IMPLEMENTATION

21.13 	Section 1. APPROPRIATION.
 21.14 	$....... is appropriated in fiscal year 2009 from the general fund to the Minnesota 
21.15 	Health Fund under the Minnesota Health Plan to implement the provisions of this act.

21.16 	Sec. 2. REPEALER.
 21.17 	Provider tax .......
21.18 	MNCARE .......
21.19 	Parts of Medical Assistance .......
21.20 	General Assistance medical care .......

21.21 	Sec. 3. EFFECTIVE DATE AND TRANSITION.
 21.22 		Subdivision 1.Notice and effective date. This act is effective the day following 
21.23 	final enactment. The commissioner of finance shall notify the chairs of the house of 
21.24 	representatives and senate committees with jurisdiction over health care when the 
21.25 	Minnesota Health Fund has sufficient revenues to fund the costs of implementing this act.
21.26 		Subd. 2.Timing to implement. The Minnesota Health Plan must be operational 
21.27 	within two years from the date of final enactment of this act.
21.28 		Subd. 3.Prohibition. On and after the day the Minnesota Health Plan becomes 
21.29 	operational, a health plan, as defined in Minnesota Statutes, section 62Q.01, subdivision 3, 
21.30 	may not be sold in Minnesota for services provided by the Minnesota Health Plan.
21.31 		Subd. 4.Transition. (a) The commissioners of health and human services shall 
21.32 	prepare an analysis of the state's capital expenditure needs for the purpose of assisting 
22.1 	the board in adopting the statewide capital budget for the year following implementation. 
22.2 	The commissioners shall submit this analysis to the board.
22.3 	(b) The following timelines shall be implemented:
22.4 	(1) the commissioner of health shall designate the health planning regions utilizing 
22.5 	the criteria specified in Minnesota Statutes, section 62U.07, three months after the date 
22.6 	of enactment of this act;
22.7 	(2) the regional boards shall be established six months after the date of enactment 
22.8 	of this act; and
22.9 	(3) the Minnesota Health Board shall be established nine months after the date 
22.10 	of enactment of this act.