1.1 	A bill for an act
1.2 	relating to human services; making changes to health care program provisions; 
1.3 	making technical and policy changes; clarifying obsolete language; making 
1.4 	federal conformity changes; clarifying eligibility requirements; modifying 
1.5 	pharmaceutical provisions; clarifying certain covered services; eliminating 
1.6 	the elderly waiver payment; providing a right to appeal and appeal processes; 
1.7 	imposing provider requirements; requiring a report on nonemergency medical 
1.8 	transportation; requiring reporting of managed care and county-based purchasing 
1.9 	data; providing civil penalties;amending Minnesota Statutes 2010, sections 
1.10 	13.461, subdivision 24a; 256B.02, by adding a subdivision; 256B.03, by adding 
1.11 	subdivisions; 256B.04, by adding a subdivision; 256B.056, subdivisions 1c, 3, 
1.12 	3c; 256B.057, subdivision 9; 256B.0625, subdivisions 13, 13d, 13e, 17a, 22, 31; 
1.13 	256B.064, subdivision 2; 256B.0641, subdivision 1; 256B.0659, subdivision 
1.14 	30; 256B.199; 256B.27, subdivision 3; 256B.69, subdivisions 5, 28, by adding 
1.15 	a subdivision; 256L.04, subdivision 7b; 256L.05, subdivision 3; 256L.11, 
1.16 	subdivision 6; 256L.15, subdivision 1; Laws 2010, First Special Session chapter 
1.17 	1, article 16, sections 8; 9; 10; repealing Minnesota Statutes 2010, sections 
1.18 	256.01, subdivision 18b; 256B.69, subdivision 9b.
1.19 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.20 	ARTICLE 1
1.21 	REHABILITATION TECHNICAL

1.22 	Section 1. Laws 2010, First Special Session chapter 1, article 16, section 8, the 
1.23 	effective date, is amended to read:

1.24 	EFFECTIVE DATE. This section is effective July 1, 2010, for services provided 
1.25 	through fee-for-service, and January 1, 2011, for services provided through managed care.

1.26 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2011.

2.1 	Sec. 2. Laws 2010, First Special Session chapter 1, article 16, section 9, the effective 
2.2 	date, is amended to read:

2.3 	EFFECTIVE DATE. This section is effective July 1, 2010, for services provided 
2.4 	through fee-for-service, and January 1, 2011, for services provided through managed care.

2.5 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2011.

2.6 	Sec. 3. Laws 2010, First Special Session chapter 1, article 16, section 10, the effective 
2.7 	date, is amended to read:

2.8 	EFFECTIVE DATE. This section is effective July 1, 2010, for services provided 
2.9 	through fee-for-service, and January 1, 2011, for services provided through managed care.

2.10 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2011.

2.11 	ARTICLE 2
2.12 	PERSONAL CARE ASSISTANCE SERVICES

2.13 	Section 1. Minnesota Statutes 2010, section 256B.0659, subdivision 30, is amended to 
2.14 	read:
2.15 		Subd. 30.Notice of service changes to recipients. The commissioner must provide:
2.16 	(1) by October 31, 2009, information to recipients likely to be affected that (i) 
2.17 	describes the changes to the personal care assistance program that may result in the 
2.18 	loss of access to personal care assistance services, and (ii) includes resources to obtain 
2.19 	further information;
2.20 	(2) notice of changes in medical assistance personal care assistance services to each 
2.21 	affected recipient at least 30 days before the effective date of the change.
2.22 	The notice shall include how to get further information on the changes, how to get help to 
2.23 	obtain other services, a list of community resources, and appeal rights. Notwithstanding 
2.24 	section 256.045, a recipient may request continued services pending appeal within the 
2.25 	time period allowed to request an appeal 30 days after the notice of change in personal 
2.26 	care assistance services, or before the effective date of action, whichever is later. A 
2.27 	managed care enrollee may request continuation of services pending an appeal to the state 
2.28 	within ten days after the written resolution of a managed care organization appeal, or 
2.29 	before the effective date of action, whichever is later; and
3.1 	(3) a service agreement authorizing personal care assistance hours of service at 
3.2 	the previously authorized level, throughout the appeal process period, when a recipient 
3.3 	requests services pending an appeal.

3.4 	ARTICLE 3
3.5 	FEDERAL POVERTY GUIDELINES

3.6 	Section 1. Minnesota Statutes 2010, section 256B.056, subdivision 1c, is amended to 
3.7 	read:
3.8 		Subd. 1c.Families with children income methodology. (a)(1) [Expired, 1Sp2003 
3.9 	c 14 art 12 s 17]
3.10 	(2) For applications processed within one calendar month prior to July 1, 2003, 
3.11 	eligibility shall be determined by applying the income standards and methodologies in 
3.12 	effect prior to July 1, 2003, for any months in the six-month budget period before July 
3.13 	1, 2003, and the income standards and methodologies in effect on July 1, 2003, for any 
3.14 	months in the six-month budget period on or after that date. The income standards for 
3.15 	each month shall be added together and compared to the applicant's total countable income 
3.16 	for the six-month budget period to determine eligibility.
3.17 	(3) For children ages one through 18 whose eligibility is determined under section 
3.18 	256B.057, subdivision 2, the following deductions shall be applied to income counted 
3.19 	toward the child's eligibility as allowed under the state's AFDC plan in effect as of July 
3.20 	16, 1996: $90 work expense, dependent care, and child support paid under court order. 
3.21 	This clause is effective October 1, 2003.
3.22 	(b) For families with children whose eligibility is determined using the standard 
3.23 	specified in section 256B.056, subdivision 4, paragraph (c), 17 percent of countable 
3.24 	earned income shall be disregarded for up to four months and the following deductions 
3.25 	shall be applied to each individual's income counted toward eligibility as allowed under 
3.26 	the state's AFDC plan in effect as of July 16, 1996: dependent care and child support paid 
3.27 	under court order.
3.28 	(c) If the four-month disregard in paragraph (b) has been applied to the wage 
3.29 	earner's income for four months, the disregard shall not be applied again until the wage 
3.30 	earner's income has not been considered in determining medical assistance eligibility for 
3.31 	12 consecutive months.
3.32 	(d) The commissioner shall adjust the income standards under this section each July 1 
3.33 	by the annual update of the federal poverty guidelines following publication by the United 
3.34 	States Department of Health and Human Services except that the income standards shall 
3.35 	not go below those the income standards in effect on July 1, 2009 of the preceding year.
4.1 	(e) For children age 18 or under, annual gifts of $2,000 or less by a tax-exempt 
4.2 	organization to or for the benefit of the child with a life-threatening illness must be 
4.3 	disregarded from income.

4.4 	Sec. 2. Minnesota Statutes 2010, section 256L.04, subdivision 7b, is amended to read:
4.5 		Subd. 7b.Annual income limits adjustment. The commissioner shall adjust the 
4.6 	income limits under this section each July 1 by the annual update of the federal poverty 
4.7 	guidelines following publication by the United States Department of Health and Human 
4.8 	Services except that the income standards shall not go below those the income standards
4.9 	in effect on  the preceding July 1, 2009.

4.10 	ARTICLE 4
4.11 	CLARIFICATION OF AMERICAN INDIAN LANGUAGE IN ARRA

4.12 	Section 1. Minnesota Statutes 2010, section 256B.056, subdivision 3, is amended to 
4.13 	read:
4.14 		Subd. 3.Asset limitations for individuals and families. (a) To be eligible for 
4.15 	medical assistance, a person must not individually own more than $3,000 in assets, or if a 
4.16 	member of a household with two family members, husband and wife, or parent and child, 
4.17 	the household must not own more than $6,000 in assets, plus $200 for each additional 
4.18 	legal dependent. In addition to these maximum amounts, an eligible individual or family 
4.19 	may accrue interest on these amounts, but they must be reduced to the maximum at the 
4.20 	time of an eligibility redetermination. The accumulation of the clothing and personal 
4.21 	needs allowance according to section 256B.35 must also be reduced to the maximum at 
4.22 	the time of the eligibility redetermination. The value of assets that are not considered in 
4.23 	determining eligibility for medical assistance is the value of those assets excluded under 
4.24 	the supplemental security income program for aged, blind, and disabled persons, with 
4.25 	the following exceptions:
4.26 	(1) household goods and personal effects are not considered;
4.27 	(2) capital and operating assets of a trade or business that the local agency determines 
4.28 	are necessary to the person's ability to earn an income are not considered;
4.29 	(3) motor vehicles are excluded to the same extent excluded by the supplemental 
4.30 	security income program;
4.31 	(4) assets designated as burial expenses are excluded to the same extent excluded by 
4.32 	the supplemental security income program. Burial expenses funded by annuity contracts 
4.33 	or life insurance policies must irrevocably designate the individual's estate as contingent 
4.34 	beneficiary to the extent proceeds are not used for payment of selected burial expenses; and
5.1 	(5) effective upon federal approval, for a person who no longer qualifies as an 
5.2 	employed person with a disability due to loss of earnings, assets allowed while eligible 
5.3 	for medical assistance under section 256B.057, subdivision 9, are not considered for 12 
5.4 	months, beginning with the first month of ineligibility as an employed person with a 
5.5 	disability, to the extent that the person's total assets remain within the allowed limits of 
5.6 	section 256B.057, subdivision 9, paragraph (c).; and
5.7 	(6) effective July 1, 2009, certain assets owned by American Indians are excluded, 
5.8 	as required by section 5006 of the American Recovery and Reinvestment Act of 2009, 
5.9 	Public Law 111-5. For purposes of this clause, an American Indian is a person who meets 
5.10 	the definition of Indian according to Code of Federal Regulations, title 42, section 447.50.
5.11 	(b) No asset limit shall apply to persons eligible under section 256B.055, subdivision 
5.12 	15.

5.13 	Sec. 2. Minnesota Statutes 2010, section 256B.056, subdivision 3c, is amended to read:
5.14 		Subd. 3c.Asset limitations for families and children. A household of two or more 
5.15 	persons must not own more than $20,000 in total net assets, and a household of one 
5.16 	person must not own more than $10,000 in total net assets. In addition to these maximum 
5.17 	amounts, an eligible individual or family may accrue interest on these amounts, but they 
5.18 	must be reduced to the maximum at the time of an eligibility redetermination. The value of 
5.19 	assets that are not considered in determining eligibility for medical assistance for families 
5.20 	and children is the value of those assets excluded under the AFDC state plan as of July 16, 
5.21 	1996, as required by the Personal Responsibility and Work Opportunity Reconciliation 
5.22 	Act of 1996 (PRWORA), Public Law 104-193, with the following exceptions:
5.23 	(1) household goods and personal effects are not considered;
5.24 	(2) capital and operating assets of a trade or business up to $200,000 are not 
5.25 	considered, except that a bank account that contains personal income or assets, or is used to 
5.26 	pay personal expenses, is not considered a capital or operating asset of a trade or business;
5.27 	(3) one motor vehicle is excluded for each person of legal driving age who is 
5.28 	employed or seeking employment;
5.29 	(4) assets designated as burial expenses are excluded to the same extent they are 
5.30 	excluded by the Supplemental Security Income program;
5.31 	(5) court-ordered settlements up to $10,000 are not considered;
5.32 	(6) individual retirement accounts and funds are not considered; and
5.33 	(7) assets owned by children are not considered.; and
5.34 	(8) effective July 1, 2009, certain assets owned by American Indians are excluded, 
5.35 	as required by section 5006 of the American Recovery and Reinvestment Act of 2009, 
6.1 	Public Law 111-5. For purposes of this clause, an American Indian is a person who meets 
6.2 	the definition of Indian according to Code of Federal Regulations, title 42, section 447.50.
6.3 	The assets specified in clause (2) must be disclosed to the local agency at the time of 
6.4 	application and at the time of an eligibility redetermination, and must be verified upon 
6.5 	request of the local agency.

6.6 	Sec. 3. Minnesota Statutes 2010, section 256B.057, subdivision 9, is amended to read:
6.7 		Subd. 9.Employed persons with disabilities. (a) Medical assistance may be paid 
6.8 	for a person who is employed and who:
6.9 	(1) but for excess earnings or assets, meets the definition of disabled under the 
6.10 	Supplemental Security Income program;
6.11 	(2) is at least 16 but less than 65 years of age;
6.12 	(3) meets the asset limits in paragraph (c); and
6.13 	(4) pays a premium and other obligations under paragraph (e).
6.14 	Any spousal income or assets shall be disregarded for purposes of eligibility and premium 
6.15 	determinations.
6.16 	(b) After the month of enrollment, a person enrolled in medical assistance under 
6.17 	this subdivision who:
6.18 	(1) is temporarily unable to work and without receipt of earned income due to a 
6.19 	medical condition, as verified by a physician, may retain eligibility for up to four calendar 
6.20 	months; or
6.21 	(2) effective January 1, 2004, loses employment for reasons not attributable to the 
6.22 	enrollee, may retain eligibility for up to four consecutive months after the month of job 
6.23 	loss. To receive a four-month extension, enrollees must verify the medical condition or 
6.24 	provide notification of job loss. All other eligibility requirements must be met and the 
6.25 	enrollee must pay all calculated premium costs for continued eligibility.
6.26 	(c) For purposes of determining eligibility under this subdivision, a person's assets 
6.27 	must not exceed $20,000, excluding:
6.28 	(1) all assets excluded under section 256B.056;
6.29 	(2) retirement accounts, including individual accounts, 401(k) plans, 403(b) plans, 
6.30 	Keogh plans, and pension plans; and
6.31 	(3) medical expense accounts set up through the person's employer.
6.32 	(d)(1) Effective January 1, 2004, for purposes of eligibility, there will be a $65 
6.33 	earned income disregard. To be eligible, a person applying for medical assistance under 
6.34 	this subdivision must have earned income above the disregard level.
7.1 	(2) Effective January 1, 2004, to be considered earned income, Medicare, Social 
7.2 	Security, and applicable state and federal income taxes must be withheld. To be eligible, 
7.3 	a person must document earned income tax withholding.
7.4 	(e)(1)  (i) Except as provided in item (ii), a person whose earned and unearned 
7.5 	income is equal to or greater than 100 percent of federal poverty guidelines for the 
7.6 	applicable family size must pay a premium to be eligible for medical assistance under this 
7.7 	subdivision. The premium shall be based on the person's gross earned and unearned 
7.8 	income and the applicable family size using a sliding fee scale established by the 
7.9 	commissioner, which begins at one percent of income at 100 percent of the federal poverty 
7.10 	guidelines and increases to 7.5 percent of income for those with incomes at or above 300 
7.11 	percent of the federal poverty guidelines. Annual adjustments in the premium schedule 
7.12 	based upon changes in the federal poverty guidelines shall be effective for premiums 
7.13 	due in July of each year.
7.14 	(ii) Effective July 1, 2009, American Indians are exempt from paying premiums as 
7.15 	required by section 5006 of the American Recovery and Reinvestment Act of 2009, Public 
7.16 	Law 111-5. For purposes of this paragraph, an American Indian is a person who meets the 
7.17 	definition of Indian according to Code of Federal Regulations, title 42, section 447.50.
7.18 	(2) Effective January 1, 2004, all enrollees must pay a premium to be eligible for 
7.19 	medical assistance under this subdivision. An enrollee shall pay the greater of a $35 
7.20 	premium or the premium calculated in clause (1).
7.21 	(3) Effective November 1, 2003, all enrollees who receive unearned income must 
7.22 	pay one-half of one percent of unearned income in addition to the premium amount.
7.23 	(4) Effective November 1, 2003, for enrollees whose income does not exceed 200 
7.24 	percent of the federal poverty guidelines and who are also enrolled in Medicare, the 
7.25 	commissioner must reimburse the enrollee for Medicare Part B premiums under section 
7.26 	256B.0625, subdivision 15, paragraph (a).
7.27 	(5) Increases in benefits under title II of the Social Security Act shall not be counted 
7.28 	as income for purposes of this subdivision until July 1 of each year.
7.29 	(f) A person's eligibility and premium shall be determined by the local county 
7.30 	agency. Premiums must be paid to the commissioner. All premiums are dedicated to 
7.31 	the commissioner.
7.32 	(g) Any required premium shall be determined at application and redetermined at 
7.33 	the enrollee's six-month income review or when a change in income or household size is 
7.34 	reported. Enrollees must report any change in income or household size within ten days 
7.35 	of when the change occurs. A decreased premium resulting from a reported change in 
7.36 	income or household size shall be effective the first day of the next available billing month 
8.1 	after the change is reported. Except for changes occurring from annual cost-of-living 
8.2 	increases, a change resulting in an increased premium shall not affect the premium amount 
8.3 	until the next six-month review.
8.4 	(h) Premium payment is due upon notification from the commissioner of the 
8.5 	premium amount required. Premiums may be paid in installments at the discretion of 
8.6 	the commissioner.
8.7 	(i) Nonpayment of the premium shall result in denial or termination of medical 
8.8 	assistance unless the person demonstrates good cause for nonpayment. Good cause exists 
8.9 	if the requirements specified in Minnesota Rules, part 9506.0040, subpart 7, items B to 
8.10 	D, are met. Except when an installment agreement is accepted by the commissioner, 
8.11 	all persons disenrolled for nonpayment of a premium must pay any past due premiums 
8.12 	as well as current premiums due prior to being reenrolled. Nonpayment shall include 
8.13 	payment with a returned, refused, or dishonored instrument. The commissioner may 
8.14 	require a guaranteed form of payment as the only means to replace a returned, refused, 
8.15 	or dishonored instrument.
8.16 	(j) The commissioner shall notify enrollees annually beginning at least 24 months 
8.17 	before the person's 65th birthday of the medical assistance eligibility rules affecting 
8.18 	income, assets, and treatment of a spouse's income and assets that will be applied upon 
8.19 	reaching age 65.

8.20 	Sec. 4. Minnesota Statutes 2010, section 256L.05, subdivision 3, is amended to read:
8.21 		Subd. 3.Effective date of coverage. (a) The effective date of coverage is the 
8.22 	first day of the month following the month in which eligibility is approved and either 
8.23 	the first premium payment or documentation of American Indian status according to 
8.24 	section 256L.15, subdivision 1, paragraph (d), has been received. As provided in section 
8.25 	256B.057, coverage for newborns is automatic from the date of birth and must be 
8.26 	coordinated with other health coverage. The effective date of coverage for eligible newly 
8.27 	adoptive children added to a family receiving covered health services is the month of 
8.28 	placement. The effective date of coverage for other new members added to the family 
8.29 	is the first day of the month following the month in which the change is reported. All 
8.30 	eligibility criteria must be met by the family at the time the new family member is added. 
8.31 	The income of the new family member is included with the family's gross income and the 
8.32 	adjusted premium begins in the month the new family member is added.
8.33 	(b) The initial premium must be received by the last working day of the month for 
8.34 	coverage to begin the first day of the following month.
9.1 	(c) Benefits are not available until the day following discharge if an enrollee is 
9.2 	hospitalized on the first day of coverage.
9.3 	(d) Notwithstanding any other law to the contrary, benefits under sections 256L.01 to 
9.4 	256L.18 are secondary to a plan of insurance or benefit program under which an eligible 
9.5 	person may have coverage and the commissioner shall use cost avoidance techniques to 
9.6 	ensure coordination of any other health coverage for eligible persons. The commissioner 
9.7 	shall identify eligible persons who may have coverage or benefits under other plans of 
9.8 	insurance or who become eligible for medical assistance.

9.9 	Sec. 5. Minnesota Statutes 2010, section 256L.15, subdivision 1, is amended to read:
9.10 		Subdivision 1.Premium determination. (a) Families with children and individuals 
9.11 	shall pay a premium determined according to subdivision 2.
9.12 	(b) Pregnant women and children under age two are exempt from the provisions 
9.13 	of section 256L.06, subdivision 3, paragraph (b), clause (3), requiring disenrollment 
9.14 	for failure to pay premiums. For pregnant women, this exemption continues until the 
9.15 	first day of the month following the 60th day postpartum. Women who remain enrolled 
9.16 	during pregnancy or the postpartum period, despite nonpayment of premiums, shall be 
9.17 	disenrolled on the first of the month following the 60th day postpartum for the penalty 
9.18 	period that otherwise applies under section 256L.06, unless they begin paying premiums.
9.19 	(c) Members of the military and their families who meet the eligibility criteria 
9.20 	for MinnesotaCare upon eligibility approval made within 24 months following the end 
9.21 	of the member's tour of active duty shall have their premiums paid by the commissioner. 
9.22 	The effective date of coverage for an individual or family who meets the criteria of this 
9.23 	paragraph shall be the first day of the month following the month in which eligibility is 
9.24 	approved. This exemption applies for 12 months. This paragraph expires June 30, 2010. 
9.25 	If the expiration of this provision is in violation of section 5001 of Public Law 111-5, this 
9.26 	provision will expire on the date when it is no longer subject to section 5001 of Public Law 
9.27 	111-5. The commissioner of human services shall notify the revisor of statutes of that date.
9.28 	(d) Beginning July 1, 2009, American Indians enrolled in MinnesotaCare and their 
9.29 	families must have their premiums waived by the commissioner in accordance with 
9.30 	section 5006 of Public Law 111-5. An individual must document status as an American 
9.31 	Indian, as defined under Code of Federal Regulations, title 42, section 447.50, to qualify 
9.32 	for the exception from premium requirements.

9.33 	Sec. 6.  REPEALER.
 9.34 	Minnesota Statutes 2010, section 256.01, subdivision 18b, is repealed.

10.1 	ARTICLE 5
10.2 	ACTIVE PHARMACEUTICAL INGREDIENTS

10.3 	Section 1. Minnesota Statutes 2010, section 256B.0625, subdivision 13, is amended to 
10.4 	read:
10.5 		Subd. 13.Drugs. (a) Medical assistance covers drugs, except for fertility drugs 
10.6 	when specifically used to enhance fertility, if prescribed by a licensed practitioner and 
10.7 	dispensed by a licensed pharmacist, by a physician enrolled in the medical assistance 
10.8 	program as a dispensing physician, or by a physician, physician assistant, or a nurse 
10.9 	practitioner employed by or under contract with a community health board as defined in 
10.10 	section 145A.02, subdivision 5, for the purposes of communicable disease control.
10.11 	(b) The dispensed quantity of a prescription drug must not exceed a 34-day supply, 
10.12 	unless authorized by the commissioner.
10.13 	(c) For the purpose of this subdivision and subdivision 13d, an "active 
10.14 	pharmaceutical ingredient" is defined as a substance that is represented for use in a drug 
10.15 	and that, when used in the manufacturing, processing, or packaging of a drug, becomes 
10.16 	an active ingredient of the drug product. An excipient is defined as an inert substance 
10.17 	used as a diluent or vehicle for a drug. The commissioner shall establish a list of active 
10.18 	pharmaceutical ingredients and excipients which are included in the medical assistance 
10.19 	formulary. Medical assistance covers selected active pharmaceutical ingredients and 
10.20 	excipients used in compounded prescriptions when the compounded combination is 
10.21 	specifically approved by the commissioner or when:
10.22 	(1) a commercially available product is not a therapeutic option for the patient;
10.23 	(2) a commercially available product does not exist in the same combination of 
10.24 	active ingredients in the same strengths as the compounded prescription; and
10.25 	(3) a commercially available product cannot be used in place of the active 
10.26 	pharmaceutical ingredient in the compounded prescription.
10.27 	(c) (d) Medical assistance covers the following over-the-counter drugs when 
10.28 	prescribed by a licensed practitioner or by a licensed pharmacist who meets standards 
10.29 	established by the commissioner, in consultation with the board of pharmacy: antacids, 
10.30 	acetaminophen, family planning products, aspirin, insulin, products for the treatment of 
10.31 	lice, vitamins for adults with documented vitamin deficiencies, vitamins for children 
10.32 	under the age of seven and pregnant or nursing women, and any other over-the-counter 
10.33 	drug identified by the commissioner, in consultation with the formulary committee, as 
10.34 	necessary, appropriate, and cost-effective for the treatment of certain specified chronic 
10.35 	diseases, conditions, or disorders, and this determination shall not be subject to the 
11.1 	requirements of chapter 14. A pharmacist may prescribe over-the-counter medications as 
11.2 	provided under this paragraph for purposes of receiving reimbursement under Medicaid. 
11.3 	When prescribing over-the-counter drugs under this paragraph, licensed pharmacists must 
11.4 	consult with the recipient to determine necessity, provide drug counseling, review drug 
11.5 	therapy for potential adverse interactions, and make referrals as needed to other health 
11.6 	care professionals.
11.7 	(d) (e) Effective January 1, 2006, medical assistance shall not cover drugs that 
11.8 	are coverable under Medicare Part D as defined in the Medicare Prescription Drug, 
11.9 	Improvement, and Modernization Act of 2003, Public Law 108-173, section 1860D-2(e), 
11.10 	for individuals eligible for drug coverage as defined in the Medicare Prescription 
11.11 	Drug, Improvement, and Modernization Act of 2003, Public Law 108-173, section 
11.12 	1860D-1(a)(3)(A). For these individuals, medical assistance may cover drugs from the 
11.13 	drug classes listed in United States Code, title 42, section 1396r-8(d)(2), subject to this 
11.14 	subdivision and subdivisions 13a to 13g, except that drugs listed in United States Code, 
11.15 	title 42, section 1396r-8(d)(2)(E), shall not be covered.

11.16 	Sec. 2. Minnesota Statutes 2010, section 256B.0625, subdivision 13d, is amended to 
11.17 	read:
11.18 		Subd. 13d.Drug formulary. (a) The commissioner shall establish a drug 
11.19 	formulary. Its establishment and publication shall not be subject to the requirements of the 
11.20 	Administrative Procedure Act, but the Formulary Committee shall review and comment 
11.21 	on the formulary contents.
11.22 	(b) The formulary shall not include:
11.23 	(1) drugs,active pharmaceutical ingredients, or products for which there is no 
11.24 	federal funding;
11.25 	(2) over-the-counter drugs, except as provided in subdivision 13;
11.26 	(3) drugs or active pharmaceutical ingredients used for weight loss, except that 
11.27 	medically necessary lipase inhibitors may be covered for a recipient with type II diabetes;
11.28 	(4) drugs or active pharmaceutical ingredients when used for the treatment of 
11.29 	impotence or erectile dysfunction;
11.30 	(5) drugs or active pharmaceutical ingredients for which medical value has not 
11.31 	been established; and
11.32 	(6) drugs from manufacturers who have not signed a rebate agreement with the 
11.33 	Department of Health and Human Services pursuant to section 1927 of title XIX of the 
11.34 	Social Security Act.
12.1 	(c) If a single-source drug used by at least two percent of the fee-for-service 
12.2 	medical assistance recipients is removed from the formulary due to the failure of the 
12.3 	manufacturer to sign a rebate agreement with the Department of Health and Human 
12.4 	Services, the commissioner shall notify prescribing practitioners within 30 days of 
12.5 	receiving notification from the Centers for Medicare and Medicaid Services (CMS) that a 
12.6 	rebate agreement was not signed.

12.7 	ARTICLE 6
12.8 	MINIMUM QUANTITY OF OVER-THE-COUNTER DRUGS

12.9 	Section 1. Minnesota Statutes 2010, section 256B.0625, subdivision 13, is amended to 
12.10 	read:
12.11 		Subd. 13.Drugs. (a) Medical assistance covers drugs, except for fertility drugs 
12.12 	when specifically used to enhance fertility, if prescribed by a licensed practitioner and 
12.13 	dispensed by a licensed pharmacist, by a physician enrolled in the medical assistance 
12.14 	program as a dispensing physician, or by a physician, physician assistant, or a nurse 
12.15 	practitioner employed by or under contract with a community health board as defined in 
12.16 	section 145A.02, subdivision 5, for the purposes of communicable disease control.
12.17 	(b) The dispensed quantity of a prescription drug must not exceed a 34-day supply, 
12.18 	unless authorized by the commissioner.
12.19 	(c) Medical assistance covers the following over-the-counter drugs when prescribed 
12.20 	by a licensed practitioner or by a licensed pharmacist who meets standards established by 
12.21 	the commissioner, in consultation with the board of pharmacy: antacids, acetaminophen, 
12.22 	family planning products, aspirin, insulin, products for the treatment of lice, vitamins for 
12.23 	adults with documented vitamin deficiencies, vitamins for children under the age of seven 
12.24 	and pregnant or nursing women, and any other over-the-counter drug identified by the 
12.25 	commissioner, in consultation with the formulary committee, as necessary, appropriate, 
12.26 	and cost-effective for the treatment of certain specified chronic diseases, conditions, 
12.27 	or disorders, and this determination shall not be subject to the requirements of chapter 
12.28 	14. A pharmacist may prescribe over-the-counter medications as provided under this 
12.29 	paragraph for purposes of receiving reimbursement under Medicaid. When prescribing 
12.30 	over-the-counter drugs under this paragraph, licensed pharmacists must consult with the 
12.31 	recipient to determine necessity, provide drug counseling, review drug therapy for potential 
12.32 	adverse interactions, and make referrals as needed to other health care professionals.
12.33 	Over-the-counter medications must be dispensed in a quantity that is the lower of:
12.34 	(1) the number of dosage units contained in the manufacturer's original package; and
12.35 	(2) the number of dosage units required to complete the patient's course of therapy.
13.1 	(d) Effective January 1, 2006, medical assistance shall not cover drugs that 
13.2 	are coverable under Medicare Part D as defined in the Medicare Prescription Drug, 
13.3 	Improvement, and Modernization Act of 2003, Public Law 108-173, section 1860D-2(e), 
13.4 	for individuals eligible for drug coverage as defined in the Medicare Prescription 
13.5 	Drug, Improvement, and Modernization Act of 2003, Public Law 108-173, section 
13.6 	1860D-1(a)(3)(A). For these individuals, medical assistance may cover drugs from the 
13.7 	drug classes listed in United States Code, title 42, section 1396r-8(d)(2), subject to this 
13.8 	subdivision and subdivisions 13a to 13g, except that drugs listed in United States Code, 
13.9 	title 42, section 1396r-8(d)(2)(E), shall not be covered.

13.10 	Sec. 2. Minnesota Statutes 2010, section 256B.0625, subdivision 13e, is amended to 
13.11 	read:
13.12 		Subd. 13e.Payment rates. (a) The basis for determining the amount of payment 
13.13 	shall be the lower of the actual acquisition costs of the drugs plus a fixed dispensing fee; 
13.14 	the maximum allowable cost set by the federal government or by the commissioner plus 
13.15 	the fixed dispensing fee; or the usual and customary price charged to the public. The 
13.16 	amount of payment basis must be reduced to reflect all discount amounts applied to the 
13.17 	charge by any provider/insurer agreement or contract for submitted charges to medical 
13.18 	assistance programs. The net submitted charge may not be greater than the patient liability 
13.19 	for the service. The pharmacy dispensing fee shall be $3.65, except that the dispensing fee 
13.20 	for intravenous solutions which must be compounded by the pharmacist shall be $8 per 
13.21 	bag, $14 per bag for cancer chemotherapy products, and $30 per bag for total parenteral 
13.22 	nutritional products dispensed in one liter quantities, or $44 per bag for total parenteral 
13.23 	nutritional products dispensed in quantities greater than one liter. Actual acquisition cost 
13.24 	includes quantity and other special discounts except time and cash discounts. Effective 
13.25 	July 1, 2009, the actual acquisition cost of a drug shall be estimated by the commissioner, 
13.26 	at average wholesale price minus 15 percent. The actual acquisition cost of antihemophilic 
13.27 	factor drugs shall be estimated at the average wholesale price minus 30 percent. The 
13.28 	maximum allowable cost of a multisource drug may be set by the commissioner and it 
13.29 	shall be comparable to, but no higher than, the maximum amount paid by other third-party 
13.30 	payors in this state who have maximum allowable cost programs. Establishment of the 
13.31 	amount of payment for drugs shall not be subject to the requirements of the Administrative 
13.32 	Procedure Act.
13.33 	(b) An additional dispensing fee of $.30 may be added to the dispensing fee paid 
13.34 	to pharmacists for legend drug prescriptions dispensed to residents of long-term care 
13.35 	facilities when a unit dose blister card system, approved by the department, is used. Under 
14.1 	this type of dispensing system, the pharmacist must dispense a 30-day supply of drug. 
14.2 	The National Drug Code (NDC) from the drug container used to fill the blister card must 
14.3 	be identified on the claim to the department. The unit dose blister card containing the 
14.4 	drug must meet the packaging standards set forth in Minnesota Rules, part 6800.2700, 
14.5 	that govern the return of unused drugs to the pharmacy for reuse. The pharmacy provider 
14.6 	will be required to credit the department for the actual acquisition cost of all unused 
14.7 	drugs that are eligible for reuse. Over-the-counter medications must be dispensed in the 
14.8 	manufacturer's unopened package. The commissioner may permit the drug clozapine to be 
14.9 	dispensed in a quantity that is less than a 30-day supply.
14.10 	(c) Whenever a maximum allowable cost has been set for a multisource drug, 
14.11 	payment shall be on the basis of the maximum allowable cost established by the 
14.12 	commissioner unless prior authorization for the brand name product has been granted 
14.13 	according to the criteria established by the Drug Formulary Committee as required by 
14.14 	subdivision 13f, paragraph (a), and the prescriber has indicated "dispense as written" on 
14.15 	the prescription in a manner consistent with section 151.21, subdivision 2.
14.16 	(d) The basis for determining the amount of payment for drugs administered in an 
14.17 	outpatient setting shall be the lower of the usual and customary cost submitted by the 
14.18 	provider or the amount established for Medicare by the United States Department of 
14.19 	Health and Human Services pursuant to title XVIII, section 1847a of the federal Social 
14.20 	Security Act.
14.21 	(e) The commissioner may negotiate lower reimbursement rates for specialty 
14.22 	pharmacy products than the rates specified in paragraph (a). The commissioner may 
14.23 	require individuals enrolled in the health care programs administered by the department 
14.24 	to obtain specialty pharmacy products from providers with whom the commissioner has 
14.25 	negotiated lower reimbursement rates. Specialty pharmacy products are defined as those 
14.26 	used by a small number of recipients or recipients with complex and chronic diseases 
14.27 	that require expensive and challenging drug regimens. Examples of these conditions 
14.28 	include, but are not limited to: multiple sclerosis, HIV/AIDS, transplantation, hepatitis 
14.29 	C, growth hormone deficiency, Crohn's Disease, rheumatoid arthritis, and certain forms 
14.30 	of cancer. Specialty pharmaceutical products include injectable and infusion therapies, 
14.31 	biotechnology drugs, high-cost therapies, and therapies that require complex care. The 
14.32 	commissioner shall consult with the formulary committee to develop a list of specialty 
14.33 	pharmacy products subject to this paragraph. In consulting with the formulary committee 
14.34 	in developing this list, the commissioner shall take into consideration the population 
14.35 	served by specialty pharmacy products, the current delivery system and standard of care in 
15.1 	the state, and access to care issues. The commissioner shall have the discretion to adjust 
15.2 	the reimbursement rate to prevent access to care issues.
15.3 	(f) Home infusion therapy services provided by home infusion therapy pharmacies 
15.4 	must be paid at rates according to subdivision 8d.

15.5 	ARTICLE 7
15.6 	AMBULANCE REIMBURSEMENT

15.7 	Section 1. Minnesota Statutes 2010, section 256B.0625, subdivision 17a, is amended to 
15.8 	read:
15.9 		Subd. 17a.Payment for ambulance services. Medical assistance covers ambulance 
15.10 	services. Providers shall bill ambulance services according to Medicare criteria. using 
15.11 	diagnosis codes indicating the condition that was treated by the ambulance crew. The 
15.12 	list of advanced life support and basic life support covered diagnosis codes must be 
15.13 	updated monthly by the commissioner and made available on the department's Web 
15.14 	site. Nonemergency ambulance services shall not be paid as emergencies. Effective for 
15.15 	services rendered on or after July 1, 2001, medical assistance payments for ambulance 
15.16 	services shall be paid at the Medicare reimbursement rate or at the medical assistance 
15.17 	payment rate in effect on July 1, 2000, whichever is greater.

15.18 	ARTICLE 8
15.19 	HOSPICE AGE

15.20 	Section 1. Minnesota Statutes 2010, section 256B.0625, subdivision 22, is amended to 
15.21 	read:
15.22 		Subd. 22.Hospice care. Medical assistance covers hospice care services under 
15.23 	Public Law 99-272, section 9505 United States Code, title 42, section 1396d(o), to the 
15.24 	extent authorized by rule, except that a recipient age 21 20  or under who elects to receive 
15.25 	hospice services does not waive coverage for services that are related to the treatment of 
15.26 	the condition for which a diagnosis of terminal illness has been made.

15.27 	ARTICLE 9
15.28 	DURABLE MEDICAL EQUIPMENT DEFINITION AND 
15.29 	ACCREDITATION FOR SUPPLIERS

15.30 	Section 1. Minnesota Statutes 2010, section 256B.0625, subdivision 31, is amended to 
15.31 	read:
16.1 		Subd. 31.Medical supplies and equipment.  (a) Medical assistance covers medical 
16.2 	supplies and equipment. Separate payment outside of the facility's payment rate shall 
16.3 	be made for wheelchairs and wheelchair accessories for recipients who are residents 
16.4 	of intermediate care facilities for the developmentally disabled. Reimbursement for 
16.5 	wheelchairs and wheelchair accessories for ICF/MR recipients shall be subject to the same 
16.6 	conditions and limitations as coverage for recipients who do not reside in institutions. A 
16.7 	wheelchair purchased outside of the facility's payment rate is the property of the recipient. 
16.8 	The commissioner may set reimbursement rates for specified categories of medical 
16.9 	supplies at levels below the Medicare payment rate.
16.10 	(b) Vendors of durable medical equipment, prosthetics, orthotics, or medical supplies 
16.11 	must enroll as a Medicare provider.
16.12 	(c) When necessary to ensure access to durable medical equipment, prosthetics, 
16.13 	orthotics, or medical supplies, the commissioner may exempt a vendor from the Medicare 
16.14 	enrollment requirement if:
16.15 	(1) the vendor supplies only one type of durable medical equipment, prosthetic, 
16.16 	orthotic, or medical supply;
16.17 	(2) the vendor serves ten or fewer medical assistance recipients per year;
16.18 	(3) the commissioner finds that other vendors are not available to provide same or 
16.19 	similar durable medical equipment, prosthetics, orthotics, or medical supplies; and
16.20 	(4) the vendor complies with all screening requirements in this chapter and Code of 
16.21 	Federal Regulations, title 42, part 455. The commissioner may also exempt a vendor from 
16.22 	the Medicare enrollment requirement if the vendor is accredited by a Centers for Medicare 
16.23 	and Medicaid Services approved national accreditation organization as complying with 
16.24 	the Medicare program's supplier and quality standards and the vendor serves primarily 
16.25 	pediatric patients.
16.26 	(d) Durable medical equipment means a device or equipment that:
16.27 	(1) can withstand repeated use;
16.28 	(2) is generally not useful in the absence of an illness, injury, or disability; and
16.29 	(3) is provided to correct or accommodate a physiological disorder or physical 
16.30 	condition or is generally used primarily for a medical purpose.

16.31 	ARTICLE 10
16.32 	ELIMINATE ELDERLY WAIVER PAYMENT

16.33 	Section 1. Minnesota Statutes 2010, section 256B.69, subdivision 5, is amended to read:
16.34 		Subd. 5.Prospective per capita payment. The commissioner shall establish the 
16.35 	method and amount of payments for services. The commissioner shall annually contract 
17.1 	with demonstration providers to provide services consistent with these established 
17.2 	methods and amounts for payment.
17.3 	If allowed by the commissioner, a demonstration provider may contract with 
17.4 	an insurer, health care provider, nonprofit health service plan corporation, or the 
17.5 	commissioner, to provide insurance or similar protection against the cost of care provided 
17.6 	by the demonstration provider or to provide coverage against the risks incurred by 
17.7 	demonstration providers under this section. The recipients enrolled with a demonstration 
17.8 	provider are a permissible group under group insurance laws and chapter 62C, the 
17.9 	Nonprofit Health Service Plan Corporations Act. Under this type of contract, the insurer 
17.10 	or corporation may make benefit payments to a demonstration provider for services 
17.11 	rendered or to be rendered to a recipient. Any insurer or nonprofit health service plan 
17.12 	corporation licensed to do business in this state is authorized to provide this insurance or 
17.13 	similar protection.
17.14 	Payments to providers participating in the project are exempt from the requirements 
17.15 	of sections 256.966 and 256B.03, subdivision 2. The commissioner shall complete 
17.16 	development of capitation rates for payments before delivery of services under this section 
17.17 	is begun. For payments made during calendar year 1990 and later years, the commissioner 
17.18 	shall contract with an independent actuary to establish prepayment rates.
17.19 	By January 15, 1996, the commissioner shall report to the legislature on the 
17.20 	methodology used to allocate to participating counties available administrative 
17.21 	reimbursement for advocacy and enrollment costs. The report shall reflect the 
17.22 	commissioner's judgment as to the adequacy of the funds made available and of the 
17.23 	methodology for equitable distribution of the funds. The commissioner must involve 
17.24 	participating counties in the development of the report.
17.25 	Beginning July 1, 2004, the commissioner may include payments for elderly waiver 
17.26 	services and 180 days of nursing home care in capitation payments for the prepaid medical 
17.27 	assistance program for recipients age 65 and older. Payments for elderly waiver services 
17.28 	shall be made no earlier than the month following the month in which services were 
17.29 	received.

17.30 	ARTICLE 11
17.31 	SPECIAL NEEDS BASIC CARE MEDICAID SERVICES

17.32 	Section 1. Minnesota Statutes 2010, section 256B.69, subdivision 28, is amended to 
17.33 	read:
17.34 		Subd. 28.Medicare special needs plans; medical assistance basic health 
17.35 	care. (a) The commissioner may contract with demonstration providers and current or 
18.1 	former sponsors of qualified Medicare-approved special needs plans, to provide medical 
18.2 	assistance basic health care services to persons with disabilities, including those with 
18.3 	developmental disabilities. Basic health care services include:
18.4 	(1) those services covered by the medical assistance state plan except for ICF/MR 
18.5 	services, home and community-based waiver services, case management for persons with 
18.6 	developmental disabilities under section 256B.0625, subdivision 20a, and personal care 
18.7 	and certain home care services defined by the commissioner in consultation with the 
18.8 	stakeholder group established under paragraph (d); and
18.9 	(2) basic health care services may also include risk for up to 100 days of nursing 
18.10 	facility services for persons who reside in a noninstitutional setting and home health 
18.11 	services related to rehabilitation as defined by the commissioner after consultation with 
18.12 	the stakeholder group.
18.13 	The commissioner may exclude other medical assistance services from the basic 
18.14 	health care benefit set. Enrollees in these plans can access any excluded services on the 
18.15 	same basis as other medical assistance recipients who have not enrolled.
18.16 	Unless a person is otherwise required to enroll in managed care, enrollment in these 
18.17 	plans for Medicaid services must be voluntary. For purposes of this subdivision, automatic 
18.18 	enrollment with an option to opt out is not voluntary enrollment.
18.19 	(b) Beginning January 1, 2007, the commissioner may contract with demonstration 
18.20 	providers and sponsors of qualified Medicare special needs plans, to provide basic 
18.21 	health care services under medical assistance to persons who are dually eligible for both 
18.22 	Medicare and Medicaid and those Social Security beneficiaries eligible for Medicaid but 
18.23 	in the waiting period for Medicare. The commissioner shall consult with the stakeholder 
18.24 	group under paragraph (d) in developing program specifications for these services. 
18.25 	The commissioner shall report to the chairs of the house of representatives and senate 
18.26 	committees with jurisdiction over health and human services policy and finance by 
18.27 	February 1, 2007, on implementation of these programs and the need for increased funding 
18.28 	for the ombudsman for managed care and other consumer assistance and protections 
18.29 	needed due to enrollment in managed care of persons with disabilities. Payment for 
18.30 	Medicaid services provided under this subdivision for the months of May and June will 
18.31 	be made no earlier than July 1 of the same calendar year.
18.32 	(c) Beginning January 1, 2008, the commissioner may expand contracting under this 
18.33 	subdivision to all persons with disabilities not otherwise required to enroll in managed 
18.34 	care.
18.35 	(d) The commissioner shall establish a state-level stakeholder group to provide 
18.36 	advice on managed care programs for persons with disabilities, including both MnDHO 
19.1 	and contracts with special needs plans that provide basic health care services as described 
19.2 	in paragraphs (a) and (b). The stakeholder group shall provide advice on program 
19.3 	expansions under this subdivision and subdivision 23, including:
19.4 	(1) implementation efforts;
19.5 	(2) consumer protections; and
19.6 	(3) program specifications such as quality assurance measures, data collection and 
19.7 	reporting, and evaluation of costs, quality, and results.
19.8 	(e) Each plan under contract to provide medical assistance basic health care services 
19.9 	shall establish a local or regional stakeholder group, including representatives of the 
19.10 	counties covered by the plan, members, consumer advocates, and providers, for advice on 
19.11 	issues that arise in the local or regional area.
19.12 	(f) The commissioner is prohibited from providing the names of potential enrollees 
19.13 	to health plans for marketing purposes. The commissioner may mail marketing materials 
19.14 	to potential enrollees on behalf of health plans, in which case the health plans shall cover 
19.15 	any costs incurred by the commissioner for mailing marketing materials.

19.16 	ARTICLE 12
19.17 	HEALTH SERVICES ADVISORY COUNCIL

19.18 	Section 1. REVISOR'S INSTRUCTION.
 19.19 	The revisor shall change the term "Health Services Policy Committee" to "Health 
19.20 	Services Advisory Council" wherever it appears in statutes.

19.21 	ARTICLE 13
19.22 	DISPROPORTIONATE SHARE HOSPITAL PAYMENTS 
19.23 	UNDER MINNESOTACARE

19.24 	Section 1. Minnesota Statutes 2010, section 256B.199, is amended to read:
19.25 	256B.199 PAYMENTS REPORTED BY GOVERNMENTAL ENTITIES.
19.26 	(a) Effective July 1, 2007, the commissioner shall apply for federal matching funds 
19.27 	for the expenditures in paragraphs (b) and (c). Effective July 1, 2011, the commissioner 
19.28 	shall apply for matching funds for expenditures in paragraph (e).
19.29 	(b) The commissioner shall apply for federal matching funds for certified public 
19.30 	expenditures as follows:
19.31 	(1) Hennepin County, Hennepin County Medical Center, Ramsey County, Regions 
19.32 	Hospital, the University of Minnesota, and Fairview-University Medical Center shall 
20.1 	report quarterly to the commissioner beginning June 1, 2007, payments made during the 
20.2 	second previous quarter that may qualify for reimbursement under federal law;
20.3 	 (2) based on these reports, the commissioner shall apply for federal matching 
20.4 	funds. These funds are appropriated to the commissioner for the payments under section 
20.5 	256.969, subdivision 27; and
20.6 	 (3) by May 1 of each year, beginning May 1, 2007, the commissioner shall inform 
20.7 	the nonstate entities listed in paragraph (a) of the amount of federal disproportionate share 
20.8 	hospital payment money expected to be available in the current federal fiscal year.
20.9 	(c) The commissioner shall apply for federal matching funds for general assistance 
20.10 	medical care expenditures as follows:
20.11 	(1) for hospital services occurring on or after July 1, 2007, general assistance medical 
20.12 	care expenditures for fee-for-service inpatient and outpatient hospital payments made by 
20.13 	the department shall be used to apply for federal matching funds, except as limited below:
20.14 	(i) only those general assistance medical care expenditures made to an individual 
20.15 	hospital that would not cause the hospital to exceed its individual hospital limits under 
20.16 	section 1923 of the Social Security Act may be considered; and
20.17 	(ii) general assistance medical care expenditures may be considered only to the extent 
20.18 	of Minnesota's aggregate allotment under section 1923 of the Social Security Act; and
20.19 	(2) all hospitals must provide any necessary expenditure, cost, and revenue 
20.20 	information required by the commissioner as necessary for purposes of obtaining federal 
20.21 	Medicaid matching funds for general assistance medical care expenditures.
20.22 	(d) For the period from April 1, 2009, to September 30, 2010, the commissioner shall 
20.23 	apply for additional federal matching funds available as disproportionate share hospital 
20.24 	payments under the American Recovery and Reinvestment Act of 2009. These funds shall 
20.25 	be made available as the state share of payments under section 256.969, subdivision 28. 
20.26 	The entities required to report certified public expenditures under paragraph (b), clause 
20.27 	(1), shall report additional certified public expenditures as necessary under this paragraph.
20.28 	(e) For services provided on or after July 1, 2011, the commissioner shall apply for 
20.29 	additional federal matching funds available as disproportionate share hospital payments 
20.30 	under the MinnesotaCare program according to the requirements and conditions of 
20.31 	paragraph (c).

20.32 	Sec. 2. Minnesota Statutes 2010, section 256L.11, subdivision 6, is amended to read:
20.33 		Subd. 6.Enrollees 18 or older. Payment by the MinnesotaCare program for 
20.34 	inpatient hospital services provided to MinnesotaCare enrollees eligible under section 
20.35 	256L.04, subdivision 7, or who qualify under section 256L.04, subdivisions 1 and 2, 
21.1 	with family gross income that exceeds 175 percent of the federal poverty guidelines 
21.2 	and who are not pregnant, who are 18 years old or older on the date of admission to the 
21.3 	inpatient hospital must be in accordance with paragraphs (a) and (b). Payment for adults 
21.4 	who are not pregnant and are eligible under section 256L.04, subdivisions 1 and 2, and 
21.5 	whose incomes are equal to or less than 175 percent of the federal poverty guidelines, 
21.6 	shall be as provided for under paragraph (c).
21.7 	(a) If the medical assistance rate minus any co-payment required under section 
21.8 	256L.03, subdivision 4, is less than or equal to the amount remaining in the enrollee's 
21.9 	benefit limit under section 256L.03, subdivision 3, payment must be the medical 
21.10 	assistance rate minus any co-payment required under section 256L.03, subdivision 4. The 
21.11 	hospital must not seek payment from the enrollee in addition to the co-payment. The 
21.12 	MinnesotaCare payment plus the co-payment must be treated as payment in full.
21.13 	(b) If the medical assistance rate minus any co-payment required under section 
21.14 	256L.03, subdivision 4, is greater than the amount remaining in the enrollee's benefit limit 
21.15 	under section 256L.03, subdivision 3, payment must be the lesser of:
21.16 	(1) the amount remaining in the enrollee's benefit limit; or
21.17 	(2) charges submitted for the inpatient hospital services less any co-payment 
21.18 	established under section 256L.03, subdivision 4.
21.19 	The hospital may seek payment from the enrollee for the amount by which usual and 
21.20 	customary charges exceed the payment under this paragraph. If payment is reduced under 
21.21 	section 256L.03, subdivision 3, paragraph (b), the hospital may not seek payment from the 
21.22 	enrollee for the amount of the reduction.
21.23 	(c) For admissions occurring on or after July 1, 2011, for single adults and 
21.24 	households without children who are eligible under section 256L.04, subdivision 7, the 
21.25 	commissioner shall pay hospitals directly, up to the medical assistance payment rate, 
21.26 	for inpatient hospital benefits up to the $10,000 annual inpatient benefit limit, minus 
21.27 	any co-payment required under section 256L.03, subdivision 5. Inpatient services paid 
21.28 	directly by the commissioner under this paragraph do not include chemical dependency 
21.29 	hospital-based and residential treatment.

21.30 	ARTICLE 14
21.31 	MEDICAL ASSISTANCE PROVIDERS

21.32 	Section 1. Minnesota Statutes 2010, section 256B.02, is amended by adding a 
21.33 	subdivision to read:
21.34 		Subd. 16.Termination; terminate. "Termination" or "terminate" for a provider 
21.35 	means a state Medicaid program or state children's health insurance program has taken an 
22.1 	action to revoke the provider's billing privileges, the provider has exhausted all appeal 
22.2 	rights or the timeline for appeal has expired, there is no expectation by the provider, 
22.3 	Medicaid program, or state children's health insurance program that the revocation is 
22.4 	temporary, the provider will be required to reenroll to reinstate billing privileges, and the 
22.5 	termination occurred for cause, including fraud, integrity, or quality. 

22.6 	Sec. 2. Minnesota Statutes 2010, section 256B.03, is amended by adding a subdivision 
22.7 	to read:
22.8 		Subd. 4.Prohibition on payments to providers outside of the United States.
 22.9 	Payments for medical assistance must not be made:
22.10 	(1) for services delivered or items supplied outside of the United States; or
22.11 	(2) to a provider, financial institution, or entity located outside of the United States.

22.12 	Sec. 3. Minnesota Statutes 2010, section 256B.03, is amended by adding a subdivision 
22.13 	to read:
22.14 		Subd. 5.Ordering or referring providers. Claims for payments for supplies or 
22.15 	services that are based on an order or referral of a provider must include the ordering or 
22.16 	referring provider's national provider identifier (NPI). Claims for supplies or services 
22.17 	ordered or referred by a vendor who is not enrolled in medical assistance are not covered.

22.18 	Sec. 4. Minnesota Statutes 2010, section 256B.04, is amended by adding a subdivision 
22.19 	to read:
22.20 		Subd. 20.Provider enrollment. (a) If the commissioner determines that there is a 
22.21 	significant risk of fraudulent activity among a category of providers, the commissioner 
22.22 	may withhold payment from providers within that category upon initial enrollment for 
22.23 	a 90-day period. The withholding for each provider must begin on the date of the first 
22.24 	submission of a claim.
22.25 	(b) The commissioner shall require, as a condition of enrollment in medical 
22.26 	assistance, that a provider within a particular industry sector or category establish a 
22.27 	compliance program that contains the core elements established by the Center for 
22.28 	Medicare and Medicaid Services.
22.29 	(c) The commissioner may terminate the enrollment of an ordering or rendering 
22.30 	provider if the provider fails to maintain and, upon request from the commissioner, 
22.31 	provide access to documentation relating to written orders or requests for payment for 
22.32 	durable medical equipment, certifications for home health services, or referrals for other 
22.33 	items or services written or ordered by such provider.
23.1 	(d) The commissioner shall terminate or deny the enrollment of any individual or 
23.2 	entity if the individual or entity has been terminated from participation in Medicare or 
23.3 	in any other state's health care program.
23.4 	(e)(1) A provider who submits an application for enrollment shall disclose any 
23.5 	current or previous affiliation, direct or indirect, with a provider that has an unpaid debt to 
23.6 	any state or federal health care program, has been or is subject to a payment suspension 
23.7 	under a state or federal health care program, has been or is suspended, terminated, or 
23.8 	excluded from participation in a state or federal health care program, or has had its billing 
23.9 	privileges denied or revoked. "Affiliation" means a relationship where a person or entity 
23.10 	directly, or indirectly through one or more intermediaries, controls, or is controlled by, or 
23.11 	is under common control with the provider.
23.12 	(2) If the commissioner determines that a previous affiliation in clause (1) poses an 
23.13 	undue risk of fraud, waste, or abuse, the commissioner may deny the application for 
23.14 	enrollment. The commissioner may revoke enrollment of a provider if the commissioner 
23.15 	determines that a provider failed to disclose an affiliation.
23.16 	(f) As a condition of enrollment in medical assistance, the commissioner shall 
23.17 	require that a provider permit the Centers for Medicare and Medicaid Services, its agents, 
23.18 	or its designated contractors and the state agency, its agents, or its designated contractors 
23.19 	to conduct unannounced on-site inspections of any provider location.
23.20 	(g) As a condition of enrollment in medical assistance, the commissioner shall 
23.21 	require that a provider consent to criminal background checks, including fingerprinting, 
23.22 	when required to do so under state law or by the level of screening based on risk of fraud, 
23.23 	waste, or abuse as determined for that category of provider.
23.24 	(h) The commissioner may terminate the enrollment of and exclude from 
23.25 	participation any provider or individual for making or causing to be made any false 
23.26 	statement, omission, or misrepresentation of material fact in any application, agreement, 
23.27 	or contract to participate or enroll as a provider. The commissioner may impose civil 
23.28 	monetary penalties not to exceed $50,000 for the conduct described in this paragraph. A 
23.29 	provider who is excluded, terminated, or subjected to civil monetary penalties under this 
23.30 	paragraph may request a contested case proceeding under section 256B.0643.

23.31 	Sec. 5. Minnesota Statutes 2010, section 256B.064, subdivision 2, is amended to read:
23.32 		Subd. 2.Imposition of monetary recovery and sanctions. (a) The commissioner 
23.33 	shall determine any monetary amounts to be recovered and sanctions to be imposed upon 
23.34 	a vendor of medical care under this section. Except as provided in paragraphs (b) and 
23.35 	(d), neither a monetary recovery nor a sanction will be imposed by the commissioner 
24.1 	without prior notice and an opportunity for a hearing, according to chapter 14, on the 
24.2 	commissioner's proposed action, provided that the commissioner may suspend or reduce 
24.3 	payment to a vendor of medical care, except a nursing home or convalescent care facility, 
24.4 	after notice and prior to the hearing if in the commissioner's opinion that action is 
24.5 	necessary to protect the public welfare and the interests of the program.
24.6 	(b) Except for a nursing home or convalescent care facility, when the commissioner 
24.7 	finds good cause to suspend payments under Code of Federal Regulations, title 42, section 
24.8 	455.23(e) or (f), the commissioner may shall withhold or reduce payments to a vendor of 
24.9 	medical care without providing advance notice of such withholding or reduction if either 
24.10 	of the following occurs:
24.11 	(1) the vendor is convicted of a crime involving the conduct described in subdivision 
24.12 	1a; or
24.13 	(2) the commissioner receives reliable evidence of fraud or willful misrepresentation 
24.14 	by the vendor. determines there is a credible allegation of fraud for which an investigation 
24.15 	is pending under the program. A credible allegation of fraud is an allegation which has 
24.16 	been verified by the state, from any source, including but not limited to:
24.17 	(i) fraud hotline complaints;
24.18 	(ii) claims data mining; and
24.19 	(iii) patterns identified through provider audits, civil false claims cases, and law 
24.20 	enforcement investigations.
24.21 	Allegations are considered to be credible when they have an indicia of reliability 
24.22 	and the state agency has reviewed all allegations, facts, and evidence carefully and acts 
24.23 	judiciously on a case-by-case basis. 
24.24 	(c) The commissioner must send notice of the withholding or reduction of payments 
24.25 	under paragraph (b) within five days of taking such action unless requested in writing by a 
24.26 	law enforcement agency to temporarily withhold the notice. The notice must:
24.27 	(1) state that payments are being withheld according to paragraph (b);
24.28 	(2) set forth the general allegations as to the nature of the withholding action, but 
24.29 	need not disclose any specific information concerning an ongoing investigation;
24.30 	(2) (3) except in the case of a conviction for conduct described in subdivision 1a, 
24.31 	state that the withholding is for a temporary period and cite the circumstances under which 
24.32 	withholding will be terminated;
24.33 	(3) (4) identify the types of claims to which the withholding applies; and
24.34 	(4) (5) inform the vendor of the right to submit written evidence for consideration by 
24.35 	the commissioner.
25.1 	The withholding or reduction of payments will not continue after the commissioner 
25.2 	determines there is insufficient evidence of fraud or willful misrepresentation by the 
25.3 	vendor, or after legal proceedings relating to the alleged fraud or willful misrepresentation
25.4 	are completed, unless the commissioner has sent notice of intention to impose monetary 
25.5 	recovery or sanctions under paragraph (a).
25.6 	(d) The commissioner may shall suspend or terminate a vendor's participation in 
25.7 	the program without providing advance notice and an opportunity for a hearing when the 
25.8 	suspension or termination is required because of the vendor's exclusion from participation 
25.9 	in Medicare. Within five days of taking such action, the commissioner must send notice of 
25.10 	the suspension or termination. The notice must:
25.11 	(1) state that suspension or termination is the result of the vendor's exclusion from 
25.12 	Medicare;
25.13 	(2) identify the effective date of the suspension or termination; and
25.14 	(3) inform the vendor of the need to be reinstated to Medicare before reapplying for 
25.15 	participation in the program; and.
25.16 	(4) inform the vendor of the right to submit written evidence for consideration by 
25.17 	the commissioner.
25.18 	(e) Upon receipt of a notice under paragraph (a) that a monetary recovery or 
25.19 	sanction is to be imposed, a vendor may request a contested case, as defined in section 
25.20 	14.02, subdivision 3, by filing with the commissioner a written request of appeal. The 
25.21 	appeal request must be received by the commissioner no later than 30 days after the date 
25.22 	the notification of monetary recovery or sanction was mailed to the vendor. The appeal 
25.23 	request must specify: 
25.24 	(1) each disputed item, the reason for the dispute, and an estimate of the dollar 
25.25 	amount involved for each disputed item;
25.26 	(2) the computation that the vendor believes is correct;
25.27 	(3) the authority in statute or rule upon which the vendor relies for each disputed 
25.28 	item;
25.29 	(4) the name and address of the person or entity with whom contacts may be made 
25.30 	regarding the appeal; and
25.31 	(5) other information required by the commissioner.

25.32 	Sec. 6. Minnesota Statutes 2010, section 256B.0641, subdivision 1, is amended to read:
25.33 		Subdivision 1.Recovery procedures; sources. Notwithstanding section 256B.72
25.34 	or any law or rule to the contrary, when the commissioner or the federal government 
26.1 	determines that an overpayment has been made by the state to any medical assistance 
26.2 	vendor, the commissioner shall recover the overpayment as follows:
26.3 	(1) if the federal share of the overpayment amount is due and owing to the federal 
26.4 	government under federal law and regulations, the commissioner shall recover from the 
26.5 	medical assistance vendor the federal share of the determined overpayment amount paid 
26.6 	to that provider using the schedule of payments required by the federal government;
26.7 	(2) if the overpayment to a medical assistance vendor is due to a retroactive 
26.8 	adjustment made because the medical assistance vendor's temporary payment rate was 
26.9 	higher than the established desk audit payment rate or because of a department error in 
26.10 	calculating a payment rate, the commissioner shall recover from the medical assistance 
26.11 	vendor the total amount of the overpayment within 120 days after the date on which 
26.12 	written notice of the adjustment is sent to the medical assistance vendor or according to a 
26.13 	schedule of payments approved by the commissioner; and
26.14 	(3) a medical assistance vendor is liable for the overpayment amount owed by 
26.15 	a long-term care provider if the vendors or their owners are under common control 
26.16 	or ownership.; and
26.17 	(4) in order to collect past due obligations to the department, the commissioner shall 
26.18 	make any necessary adjustments to payments to a provider or vendor that has the same tax 
26.19 	identification number as is assigned to a provider or vendor with past due obligations.

26.20 	Sec. 7. Minnesota Statutes 2010, section 256B.27, subdivision 3, is amended to read:
26.21 		Subd. 3.Access to medical records. The commissioner of human services, with the 
26.22 	written consent of the recipient, on file with the local welfare agency, shall be allowed 
26.23 	access to all personal medical records of medical assistance recipients solely for the 
26.24 	purposes of investigating whether or not: (a) (1) a vendor of medical care has submitted a 
26.25 	claim for reimbursement, a cost report or a rate application which is duplicative, erroneous, 
26.26 	or false in whole or in part, or which results in the vendor obtaining greater compensation 
26.27 	than the vendor is legally entitled to; or (b) (2) the medical care was medically necessary. 
26.28 	The vendor of medical care shall receive notification from the commissioner at least 
26.29 	24 hours before the commissioner gains access to such records. The determination of 
26.30 	provision of services not medically necessary shall be made by the commissioner. The 
26.31 	commissioner may consult with an advisory task force of vendors the commissioner may 
26.32 	appoint, on the recommendation of appropriate professional organizations. The task 
26.33 	force expires as provided in section 15.059, subdivision 6. Notwithstanding any other 
26.34 	law to the contrary, a vendor of medical care shall not be subject to any civil or criminal 
27.1 	liability for providing access to medical records to the commissioner of human services 
27.2 	pursuant to this section. 

27.3 	ARTICLE 15
27.4 	NONEMERGENCY MEDICAL TRANSPORTATION

27.5 	Section 1. NONEMERGENCY MEDICAL TRANSPORTATION ADVISORY 
27.6 	COMMITTEE.
 27.7 	(a) The commissioner of human services shall establish a nonemergency medical 
27.8 	transportation advisory committee. The nonemergency medical transportation advisory 
27.9 	committee shall advise the commissioner regarding the creation of a single administrative 
27.10 	structure for the coordination and management of nonemergency medical transportation 
27.11 	services provided under this chapter.
27.12 	(b) Members must include, but are not limited to, representatives from the following: 
27.13 	Departments of Human Services and Transportation; Association of Minnesota Counties; 
27.14 	Metropolitan Council; ARC of Minnesota; Minnesota State Council on Disabilities; 
27.15 	transportation providers; managed care plans; skilled nursing facilities; a representative 
27.16 	from a metropolitan county and a rural county; and the National Alliance on Mental 
27.17 	Illness. The commissioner shall submit a proposal with draft legislation to the legislature 
27.18 	by January 15, 2012.

27.19 	ARTICLE 16
27.20 	MANAGED CARE REPORTING

27.21 	Section 1. Minnesota Statutes 2010, section 13.461, subdivision 24a, is amended to 
27.22 	read:
27.23 		Subd. 24a.Managed care plans. Data provided to the commissioner of human 
27.24 	services by managed care plans relating to contracts and provider payment rates are 
27.25 	classified under section 256B.69, subdivisions 9a and 9b 9c.

27.26 	Sec. 2. Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision 
27.27 	to read:
27.28 		Subd. 9c.Managed care financial reporting. (a) The commissioner shall collect 
27.29 	detailed data regarding financials, provider payments, provider rate methodologies, and 
27.30 	other data as determined by the commissioner and managed care and county-based 
27.31 	purchasing plans that are required to be submitted under this section. The commissioner, 
27.32 	in consultation with the commissioners of health and commerce, shall set uniform criteria, 
28.1 	definitions, and standards for the data to be submitted, and shall require managed care and 
28.2 	county-based purchasing plans to comply with these criteria, definitions, and standards 
28.3 	when submitting data under this section.
28.4 	(b) Each managed care and county-based purchasing plan must annually provide to 
28.5 	the commissioner, in the form and manner specified by the commissioner:
28.6 	(1) administrative expenses by category and subcategory, by program;
28.7 	(2) revenues by program, including investment income;
28.8 	(3) nonadministrative service payments, provider payments, and reimbursement 
28.9 	rates by provider type or service category, by program, including but not limited to:
28.10 	(i) individual-level provider payment and reimbursement rate data;
28.11 	(ii) provider reimbursement rate methodologies by provider type, by program, 
28.12 	including health care home and total cost of care rate methodologies and other provider 
28.13 	total cost or risk-based arrangements;
28.14 	(iii) data on legislatively mandated provider rate changes; and
28.15 	(iv) plan-specific provider rate methodologies and individual-level or disaggregated 
28.16 	data provided to the commissioner under this subdivision are nonpublic data as defined in 
28.17 	section 13.02;
28.18 	(4) data on the amount of reinsurance or transfer of risk by program; and
28.19 	(5) contribution to reserve, by program.

28.20 	Sec. 3.  REPEALER.
 28.21 	Minnesota Statutes 2010, section 256B.69, subdivision 9b, is repealed.