1.1 	A bill for an act
1.2 	relating to health; removing requirements for implementation of evidence-based 
1.3 	strategies as part of hospital community benefit programs and health maintenance 
1.4 	organizations collaboration plans; changing requirements for development of 
1.5 	health care costs and quality outcome standards; providing for use and public 
1.6 	release of certain health care data;amending Minnesota Statutes 2010, sections 
1.7 	62U.04, subdivisions 1, 2, 4, 5; 256B.0754, subdivision 2; Minnesota Statutes 
1.8 	2011 Supplement, section 62U.04, subdivisions 3, 9; Laws 2011, First Special 
1.9 	Session chapter 9, article 10, section 4, subdivision 2.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Laws 2011, First Special Session chapter 9, article 10, section 4, subdivision 
1.12 	2, is amended to read:

1.13
1.14	Subd. 2.Community and Family Health 
Promotion

1.15	Appropriations by Fund
	
1.16	General
	45,577,000
	46,030,000
	
1.17
1.18	State Government 
Special Revenue
	1,033,000
	1,033,000
	
1.19	Health Care Access
	16,719,000
	1,719,000
	
1.20	Federal TANF
	11,713,000
	11,713,000
	
1.21 	TANF Appropriations. (1) $1,156,000 of 
1.22 	the TANF funds is appropriated each year of 
1.23 	the biennium to the commissioner for family 
1.24 	planning grants under Minnesota Statutes, 
1.25 	section 145.925.
1.26 	(2) $3,579,000 of the TANF funds is 
1.27 	appropriated each year of the biennium to 
2.1 	the commissioner for home visiting and 
2.2 	nutritional services listed under Minnesota 
2.3 	Statutes, section 145.882, subdivision 7, 
2.4 	clauses (6) and (7). Funds must be distributed 
2.5 	to community health boards according to 
2.6 	Minnesota Statutes, section 145A.131, 
2.7 	subdivision 1.
2.8 	(3) $2,000,000 of the TANF funds is 
2.9 	appropriated each year of the biennium to 
2.10 	the commissioner for decreasing racial and 
2.11 	ethnic disparities in infant mortality rates 
2.12 	under Minnesota Statutes, section 145.928, 
2.13 	subdivision 7.
2.14 	(4) $4,978,000 of the TANF funds is 
2.15 	appropriated each year of the biennium to the 
2.16 	commissioner for the family home visiting 
2.17 	grant program according to Minnesota 
2.18 	Statutes, section 145A.17. $4,000,000 of the 
2.19 	funding must be distributed to community 
2.20 	health boards according to Minnesota 
2.21 	Statutes, section 145A.131, subdivision 1. 
2.22 	$978,000 of the funding must be distributed 
2.23 	to tribal governments based on Minnesota 
2.24 	Statutes, section 145A.14, subdivision 2a.
2.25 	(5) The commissioner may use up to 6.23 
2.26 	percent of the funds appropriated each fiscal 
2.27 	year to conduct the ongoing evaluations 
2.28 	required under Minnesota Statutes, section 
2.29 	145A.17, subdivision 7, and training and 
2.30 	technical assistance as required under 
2.31 	Minnesota Statutes, section 145A.17, 
2.32 	subdivisions 4 and 5.
2.33 	TANF Carryforward. Any unexpended 
2.34 	balance of the TANF appropriation in the 
3.1 	first year of the biennium does not cancel but 
3.2 	is available for the second year.
3.3 	Statewide Health Improvement Program.
3.4 	(a) $15,000,000 in the biennium ending June 
3.5 	30, 2013, is appropriated from the health 
3.6 	care access fund for the statewide health 
3.7 	improvement program and is available until 
3.8 	expended. Notwithstanding Minnesota 
3.9 	Statutes, sections 144.396, and 145.928, the 
3.10 	commissioner may use tobacco prevention 
3.11 	grant funding and grant funding under 
3.12 	Minnesota Statutes, section 145.928, to 
3.13 	support the statewide health improvement 
3.14 	program. The commissioner may focus the 
3.15 	program geographically or on a specific 
3.16 	goal of tobacco use reduction or on 
3.17 	reducing obesity. By February 15, 2013, the 
3.18 	commissioner shall report to the chairs of 
3.19 	the health and human services committee 
3.20 	on progress toward meeting the goals of the 
3.21 	program as outlined in Minnesota Statutes, 
3.22 	section 145.986, and estimate the dollar 
3.23 	value of the reduced health care costs for 
3.24 	both public and private payers.
3.25 	(b) By February 15, 2012, the commissioner 
3.26 	shall develop a plan to implement 
3.27 	evidence-based strategies from the statewide 
3.28 	health improvement program as part of 
3.29 	hospital community benefit programs 
3.30 	and health maintenance organizations 
3.31 	collaboration plans. The implementation 
3.32 	plan shall include an advisory board 
3.33 	to determine priority needs for health 
3.34 	improvement in reducing obesity and 
3.35 	tobacco use in Minnesota and to review 
3.36 	and approve hospital community benefit 
4.1 	activities reported under Minnesota Statutes, 
4.2 	section 144.699, and health maintenance 
4.3 	organizations collaboration plans in 
4.4 	Minnesota Statutes, section 62Q.075. The 
4.5 	commissioner shall consult with hospital 
4.6 	and health maintenance organizations in 
4.7 	creating and implementing the plan. The 
4.8 	plan described in this paragraph shall be 
4.9 	implemented by July 1, 2012.
4.10 	(c) The commissioners of Minnesota 
4.11 	management and budget, human services, 
4.12 	and health shall include in each forecast 
4.13 	beginning February of 2013 a report that 
4.14 	identifies an estimated dollar value of the 
4.15 	health care savings in the state health care 
4.16 	programs that are directly attributable to the 
4.17 	strategies funded from the statewide health 
4.18 	improvement program. The report shall 
4.19 	include a description of methodologies and 
4.20 	assumptions used to calculate the estimate.
4.21 	Funding Usage. Up to 75 percent of the 
4.22 	fiscal year 2012 appropriation for local public 
4.23 	health grants may be used to fund calendar 
4.24 	year 2011 allocations for this program and 
4.25 	up to 75 percent of the fiscal year 2013 
4.26 	appropriation may be used for calendar year 
4.27 	2012 allocations. The fiscal year 2014 base 
4.28 	shall be increased by $5,193,000.
4.29 	Base Level Adjustment. The general fund 
4.30 	base is increased by $5,188,000 in fiscal year 
4.31 	2014 and decreased by $5,000 in 2015.

4.32 	Sec. 2. Minnesota Statutes 2010, section 62U.04, subdivision 1, is amended to read:
4.33 		Subdivision 1.Development of tools to improve costs and quality outcomes.
 4.34 	The commissioner of health shall develop a plan to create transparent prices, encourage 
5.1 	greater provider innovation and collaboration across points on the health continuum 
5.2 	in cost-effective, high-quality care delivery, reduce the administrative burden on 
5.3 	providers and health plans associated with submitting and processing claims, and provide 
5.4 	comparative information to consumers on variation in health care cost and quality across 
5.5 	providers. The development must be complete by January 1, 2010.

5.6 	Sec. 3. Minnesota Statutes 2010, section 62U.04, subdivision 2, is amended to read:
5.7 		Subd. 2.Calculation of health care costs and quality. The commissioner of health 
5.8 	shall develop a uniform method of calculating providers' relative cost of care, defined as a 
5.9 	measure of health care spending including resource use and unit prices, and relative quality 
5.10 	of care. In developing this method, the commissioner must address the following issues:
5.11 	(1) provider attribution of costs and quality;
5.12 	(2) appropriate adjustment for outlier or catastrophic cases;
5.13 	(3) appropriate risk adjustment to reflect differences in the demographics and health 
5.14 	status across provider patient populations, using generally accepted and transparent risk 
5.15 	adjustment methodologies and case mix adjustment;
5.16 	(4) specific types of providers that should be included in the calculation;
5.17 	(5) specific types of services that should be included in the calculation;
5.18 	(6) appropriate adjustment for variation in payment rates;
5.19 	(7) the appropriate provider level for analysis;
5.20 	(8) payer mix adjustments, including variation across providers in the percentage of 
5.21 	revenue received from government programs; and
5.22 	(9) other factors that the commissioner determinesand the advisory committee, 
5.23 	established under subdivision 3, determine are needed to ensure validity and comparability 
5.24 	of the analysis.

5.25 	Sec. 4. Minnesota Statutes 2011 Supplement, section 62U.04, subdivision 3, is 
5.26 	amended to read:
5.27 		Subd. 3.Provider peer grouping; system development; advisory committee.
 5.28 	(a) The commissioner shall develop a peer grouping system for providers based on a 
5.29 	combined measure that incorporates both provider risk-adjusted cost of care and quality of 
5.30 	care, and for specific conditions as determined by the commissioner. In developing this 
5.31 	system, the commissioner shall consult and coordinate with health care providers, health 
5.32 	plan companies, state agencies, and organizations that work to improve health care quality 
5.33 	in Minnesota. For purposes of the final establishment of the peer grouping system, the 
6.1 	commissioner shall not contract with any private entity, organization, or consortium of 
6.2 	entities that has or will have a direct financial interest in the outcome of the system.
6.3 	(b) The commissioner shall establish an advisory committee comprised of 
6.4 	representatives of health care providers, health plan companies, consumers, state agencies, 
6.5 	employers, academic researchers, and organizations that work to improve health care 
6.6 	quality in Minnesota. The advisory committee shall meet no fewer than three times 
6.7 	per year. The commissioner shall consult with the advisory committee in developing 
6.8 	and administering the peer grouping system, including but not limited to the following 
6.9 	activities:
6.10 	(1) establishing peer groups;
6.11 	(2) selecting quality measures;
6.12 	(3) recommending thresholds for completeness of data and statistical significance 
6.13 	for the purposes of public release of provider peer grouping results;
6.14 	(4) considering whether adjustments are necessary for facilities that provide medical 
6.15 	education, level 1 trauma services, neonatal intensive care, or inpatient psychiatric care;
6.16 	(5) recommending inclusion or exclusion of other costs; and
6.17 	(6) adopting patient attribution and quality and cost-scoring methodologies.
6.18 		Subd. 3a.Provider peer grouping; dissemination of data to providers. (b) By 
6.19 	no later than October 15, 2010, (a) The commissioner shall disseminate information 
6.20 	to providers on their total cost of care, total resource use, total quality of care, and the 
6.21 	total care results of the grouping developed under this subdivision 3 in comparison to an 
6.22 	appropriate peer group. Data used for this analysis must be the most recent data available. 
6.23 	Any analyses or reports that identify providers may only be published after the provider 
6.24 	has been provided the opportunity by the commissioner to review the underlying data in 
6.25 	order to verify, consistent with the recommendations developed pursuant to subdivision 
6.26 	3c, paragraph (d), and adopted by the commissioner the accuracy and representativeness 
6.27 	of any analyses or reports  and submit comments to the commissioner or initiate an appeal 
6.28 	under subdivision 3b. Providers may Upon request, providers shall be given any data for 
6.29 	which they are the subject of the data. The provider shall have 30 60 days to review the 
6.30 	data for accuracy and initiate an appeal as specified in paragraph (d) subdivision 3b.
6.31 	(c) By no later than January 1, 2011, (b) The commissioner shall disseminate 
6.32 	information to providers on their condition-specific cost of care, condition-specific 
6.33 	resource use, condition-specific quality of care, and the condition-specific results of the 
6.34 	grouping developed under this subdivision 3 in comparison to an appropriate peer group.
6.35 	Data used for this analysis must be the most recent data available. Any analyses or 
6.36 	reports that identify providers may only be published after the provider has been provided 
7.1 	the opportunity by the commissioner to review the underlying data in order to verify, 
7.2 	consistent with the recommendations developed pursuant to subdivision 3c, paragraph (d), 
7.3 	and adopted by the commissioner the accuracy and representativeness of any analyses or 
7.4 	reports  and submit comments to the commissioner or initiate an appeal under subdivision 
7.5 	3b. Providers may Upon request, providers shall be given any data for which they are the 
7.6 	subject of the data. The provider shall have 30 60 days to review the data for accuracy and 
7.7 	initiate an appeal as specified in paragraph (d) subdivision 3b.
7.8 		Subd. 3b.Provider peer grouping; appeals process. (d) The commissioner shall 
7.9 	establish an appeals a process to resolve disputes from providers regarding the accuracy 
7.10 	of the data used to develop analyses or reports or errors in the application of standards 
7.11 	or methodology established by the commissioner in consultation with the advisory 
7.12 	committee. When a provider appeals the accuracy of the data used to calculate the peer 
7.13 	grouping system results submits an appeal, the provider shall:
7.14 	(1) clearly indicate the reason they believe the data used to calculate the peer group 
7.15 	system results are not accurate or reasons for the appeal;
7.16 	(2) provide any evidence and, calculations, or documentation to support the reason 
7.17 	that data was not accurate for the appeal; and
7.18 	(3) cooperate with the commissioner, including allowing the commissioner access to 
7.19 	data necessary and relevant to resolving the dispute.
7.20 	The commissioner shall cooperate with the provider during the data review period 
7.21 	specified in subdivisions 3a and 3c by giving the provider information necessary for the 
7.22 	preparation of an appeal.
7.23 	If a provider does not meet the requirements of this paragraph subdivision, a provider's 
7.24 	appeal shall be considered withdrawn. The commissioner shall not publish peer grouping
7.25 	results for a specific provider under paragraph (e) or (f) while that provider has an 
7.26 	unresolved appeal until the appeal has been resolved.
7.27 		Subd. 3c.Provider peer grouping; publication of information for the public.
 7.28 	(e) Beginning January 1, 2011, the commissioner shall, no less than annually, publish 
7.29 	information on providers' total cost, total resource use, total quality, and the results of 
7.30 	the total care portion of the peer grouping process. The results that are published must 
7.31 	be on a risk-adjusted basis. (a) The commissioner may publicly release summary data 
7.32 	related to the peer grouping system as long as the data do not contain information or 
7.33 	descriptions from which the identity of individual hospitals, clinics, or other providers 
7.34 	may be discerned.
7.35 	(f) Beginning March 30, 2011, the commissioner shall no less than annually publish 
7.36 	information on providers' condition-specific cost, condition-specific resource use, and 
8.1 	condition-specific quality, and the results of the condition-specific portion of the peer 
8.2 	grouping process. The results that are published must be on a risk-adjusted basis. (b) The 
8.3 	commissioner may publicly release analyses or results related to the peer grouping system 
8.4 	that identify hospitals, clinics, or other providers only if the following criteria are met:
8.5 	(1) the results, data, and summaries, including any graphical depictions of provider 
8.6 	performance, have been distributed to providers at least 120 days prior to publication; 
8.7 	(2) the commissioner has provided an opportunity for providers to verify and review 
8.8 	data for which the provider is the subject consistent with the recommendations developed 
8.9 	pursuant to subdivision 3c, paragraph (d), and adopted by the commissioner; 
8.10 	(3) the results meet thresholds of validity, reliability, statistical significance, 
8.11 	representativeness, and other standards that reflect the recommendations of the advisory 
8.12 	committee, established under subdivision 3; and
8.13 	(4) any public report or other usage of the analyses, report, or data used by the 
8.14 	state clearly notifies consumers about how to use and interpret the results, including 
8.15 	any limitations of the data and analysis.
8.16 	(g) (c) After publishing the first public report, the commissioner shall, no less 
8.17 	frequently than annually, publish information on providers' total cost, total resource use, 
8.18 	total quality, and the results of the total care portion of the peer grouping process, as well 
8.19 	as information on providers' condition-specific cost, condition-specific resource use, 
8.20 	and condition-specific quality, and the results of the condition-specific portion of the 
8.21 	peer grouping process. The results that are published must be on a risk-adjusted basis, 
8.22 	including case mix adjustments.
8.23 	(d) The commissioner shall convene a work group comprised of representatives 
8.24 	of physician clinics, hospitals, their respective statewide associations, and other 
8.25 	relevant stakeholder organizations to make recommendations on data to be made 
8.26 	available to hospitals and physician clinics to allow for verification of the accuracy and 
8.27 	representativeness of the provider peer grouping results.
8.28 		Subd. 3d.Provider peer grouping; standards for dissemination and publication.
 8.29 	(a) Prior to disseminating data to providers under paragraph (b) or (c) subdivision 3a or 
8.30 	publishing information under paragraph (e) or (f) subdivision 3c, the commissioner, in 
8.31 	consultation with the advisory committee, shall ensure the scientific and statistical validity 
8.32 	and reliability of the results according to the standards described in paragraph (h) (b). 
8.33 	If additional time is needed to establish the scientific validity, statistical significance,
8.34 	and reliability of the results, the commissioner may delay the dissemination of data to 
8.35 	providers under paragraph (b) or (c) subdivision 3a, or the publication of information under 
8.36 	paragraph (e) or (f) subdivision 3c. If the delay is more than 60 days, the commissioner 
9.1 	shall report in writing to the chairs and ranking minority members of the legislative 
9.2 	committees with jurisdiction over health care policy and finance the following information:
9.3 	(1) the reason for the delay;
9.4 	(2) the actions being taken to resolve the delay and establish the scientific validity 
9.5 	and reliability of the results; and
9.6 	(3) the new dates by which the results shall be disseminated.
9.7 	If there is a delay under this paragraph, The commissioner must disseminate the 
9.8 	information to providers under paragraph (b) or (c) subdivision 3a at least 90 120 days 
9.9 	before publishing results under paragraph (e) or (f) subdivision 3c.
9.10 	(h) (b) The commissioner's assurance of valid, timely, and reliable clinic and hospital 
9.11 	peer grouping performance results shall include, at a minimum, the following:
9.12 	(1) use of the best available evidence, research, and methodologies; and
9.13 	(2) establishment of an explicit minimum reliability threshold thresholds for both 
9.14 	quality and costs developed in collaboration with the subjects of the data and the users of 
9.15 	the data, at a level not below nationally accepted standards where such standards exist.
9.16 	In achieving these thresholds, the commissioner shall not aggregate clinics that are not 
9.17 	part of the same system or practice group. The commissioner shall consult with and 
9.18 	solicit feedback from the advisory committee and representatives of physician clinics 
9.19 	and hospitals during the peer grouping data analysis process to obtain input on the 
9.20 	methodological options prior to final analysis and on the design, development, and testing 
9.21 	of provider reports.

9.22 	Sec. 5. Minnesota Statutes 2010, section 62U.04, subdivision 4, is amended to read:
9.23 		Subd. 4.Encounter data. (a) Beginning July 1, 2009, and every six months 
9.24 	thereafter, all health plan companies and third-party administrators shall submit encounter 
9.25 	data to a private entity designated by the commissioner of health. The data shall be 
9.26 	submitted in a form and manner specified by the commissioner subject to the following 
9.27 	requirements:
9.28 	(1) the data must be de-identified data as described under the Code of Federal 
9.29 	Regulations, title 45, section 164.514;
9.30 	(2) the data for each encounter must include an identifier for the patient's health care 
9.31 	home if the patient has selected a health care home; and
9.32 	(3) except for the identifier described in clause (2), the data must not include 
9.33 	information that is not included in a health care claim or equivalent encounter information 
9.34 	transaction that is required under section 62J.536.
10.1 	(b) The commissioner or the commissioner's designee shall only use the data 
10.2 	submitted under paragraph (a) for thepurpose of carrying out its responsibilities in this 
10.3 	section, and must maintain the data that it receives according to the provisions of this 
10.4 	section. to carry out its responsibilities in this section, including supplying the data to 
10.5 	providers so they can verify their results of the peer grouping process consistent with the 
10.6 	recommendations developed pursuant to subdivision 3c, paragraph (d), and adopted by 
10.7 	the commissioner and, if necessary, submit comments to the commissioner or initiate 
10.8 	an appeal.
10.9 	(c) Data on providers collected under this subdivision are private data on individuals 
10.10 	or nonpublic data, as defined in section 13.02. Notwithstanding the definition of summary 
10.11 	data in section 13.02, subdivision 19, summary data prepared under this subdivision 
10.12 	may be derived from nonpublic data. The commissioner or the commissioner's designee 
10.13 	shall establish procedures and safeguards to protect the integrity and confidentiality of 
10.14 	any data that it maintains.
10.15 	(d) The commissioner or the commissioner's designee shall not publish analyses or 
10.16 	reports that identify, or could potentially identify, individual patients.

10.17 	Sec. 6. Minnesota Statutes 2010, section 62U.04, subdivision 5, is amended to read:
10.18 		Subd. 5.Pricing data. (a) Beginning July 1, 2009, and annually on January 1 
10.19 	thereafter, all health plan companies and third-party administrators shall submit data 
10.20 	on their contracted prices with health care providers to a private entity designated by 
10.21 	the commissioner of health for the purposes of performing the analyses required under 
10.22 	this subdivision. The data shall be submitted in the form and manner specified by the 
10.23 	commissioner of health.
10.24 	(b) The commissioner or the commissioner's designee shall only use the data 
10.25 	submitted under this subdivision for the purpose of carrying out its responsibilities under 
10.26 	this section to carry out its responsibilities under this section, including supplying the 
10.27 	data to providers so they can verify their results of the peer grouping process consistent 
10.28 	with the recommendations developed pursuant to subdivision 3c, paragraph (d), and 
10.29 	adopted by the commissioner and, if necessary, submit comments to the commissioner or 
10.30 	initiate an appeal.
10.31 	(c) Data collected under this subdivision are nonpublic data as defined in section 
10.32 	13.02. Notwithstanding the definition of summary data in section 13.02, subdivision 19, 
10.33 	summary data prepared under this section may be derived from nonpublic data. The 
10.34 	commissioner shall establish procedures and safeguards to protect the integrity and 
10.35 	confidentiality of any data that it maintains.

11.1 	Sec. 7. Minnesota Statutes 2011 Supplement, section 62U.04, subdivision 9, is 
11.2 	amended to read:
11.3 		Subd. 9.Uses of information. (a) For product renewals or for new products that 
11.4 	are offered, after 12 months have elapsed from publication by the commissioner of the 
11.5 	information in subdivision 3, paragraph (e):
11.6 	(1) the commissioner of management and budget shall may use the information and 
11.7 	methods developed under subdivision 3 subdivisions 3 to 3d to strengthen incentives for 
11.8 	members of the state employee group insurance program to use high-quality, low-cost 
11.9 	providers;
11.10 	(2) all political subdivisions, as defined in section 13.02, subdivision 11, that offer 
11.11 	health benefits to their employees must may offer plans that differentiate providers on their 
11.12 	cost and quality performance and create incentives for members to use better-performing 
11.13 	providers;
11.14 	(3) all health plan companies shall may use the information and methods developed 
11.15 	under subdivision 3 subdivisions 3 to 3d to develop products that encourage consumers to 
11.16 	use high-quality, low-cost providers; and
11.17 	(4) health plan companies that issue health plans in the individual market or the 
11.18 	small employer market must may offer at least one health plan that uses the information 
11.19 	developed under subdivision 3 subdivisions 3 to 3d to establish financial incentives for 
11.20 	consumers to choose higher-quality, lower-cost providers through enrollee cost-sharing 
11.21 	or selective provider networks.
11.22 	(b) By January 1, 2011, the commissioner of health shall report to the governor 
11.23 	and the legislature on recommendations to encourage health plan companies to promote 
11.24 	widespread adoption of products that encourage the use of high-quality, low-cost providers. 
11.25 	The commissioner's recommendations may include tax incentives, public reporting of 
11.26 	health plan performance, regulatory incentives or changes, and other strategies.

11.27 	Sec. 8. Minnesota Statutes 2010, section 256B.0754, subdivision 2, is amended to read:
11.28 		Subd. 2.Payment reform. By no later than 12 months after the commissioner of 
11.29 	health publishes the information in section 62U.04, subdivision 3, paragraph (e) 62U.04, 
11.30 	subdivision 3c, paragraph (b), the commissioner of human services shall may use the 
11.31 	information and methods developed under section 62U.04 to establish a payment system 
11.32 	that:
11.33 	(1) rewards high-quality, low-cost providers;
11.34 	(2) creates enrollee incentives to receive care from high-quality, low-cost providers; 
11.35 	and
12.1 	(3) fosters collaboration among providers to reduce cost shifting from one part of 
12.2 	the health continuum to another.

12.3 	Sec. 9. EFFECTIVE DATE.
 12.4 	Sections 2 to 8 are effective July 1, 2012, and apply to all information provided or 
12.5 	released to the public or to health care providers, pursuant to Minnesota Statutes, section 
12.6 	62U.04, on or after that date. Section 4 shall be implemented by the commissioner of 
12.7 	health within available resources.