1.1A bill for an act1.2relating to insurance; modifying certain regulations to reduce the incidence of 1.3insurance fraud; providing licensing authority penalties; regulating no-fault auto 1.4benefits; modifying certain economic benefits under chapter 65B; establishing a 1.5task force on motor vehicle insurance coverage verification; amending Minnesota 1.6Statutes 2012, sections 13.7191, subdivision 16; 60A.952, subdivision 3; 1.765B.44, subdivisions 2, 3, 4, 6; 65B.525, subdivision 1; 72A.502, subdivision 1.82; proposing coding for new law in Minnesota Statutes, chapter 45; repealing 1.9Minnesota Statutes 2012, section 72A.327.1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.11    Section 1. Minnesota Statutes 2012, section 13.7191, subdivision 16, is amended to read:1.12    Subd. 16. Regulation of trade practices; insurance contract data.(a) Insurance 1.13contract data. Certain insurance contract data held by the commissioner of commerce are 1.14classified under section 
         72A.20, subdivision 15.1.15(b) Health claims appeals. Documents that are part of an appeal from denial of 1.16health care coverage for experimental treatment are classified under section 72A.327.1.17    Sec. 2. [45.0137] LICENSING AUTHORITY PENALTIES.1.18    Subdivision 1.Definitions.(a) As used in this section, the following terms have 1.19the meaning given.1.20(b) "Appropriate licensing authority" means the state agency responsible for 1.21licensing and discipline of a provider.1.22(c) "Commissioner" means the commissioner of commerce.1.23(d) "Medical services" means those services eligible for reimbursement under 1.24section 65B.44, subdivision 2.2.1(e) "Provider of medical services" or "provider" means a person or entity that has 2.2provided medical services.2.3    Subd. 2.Authority to impose penalties. In addition to any other disciplinary 2.4authority available, an appropriate licensing authority upon finding, after investigation 2.5as provided in subdivision 5, or referral by the commissioner, that a provider engaged in 2.6prohibited activities set forth in subdivision 4, may, by order:2.7(1) remove authorization for a provider of medical services to demand or request 2.8payment under chapter 65B for medical services;2.9(2) impose an administrative penalty against a provider of medical services not 2.10exceeding $10,000 for each separate violation of engaging in the prohibited activities 2.11set forth in subdivision 4. The amount of the administrative penalty is to be fixed as to 2.12deprive the provider of medical services of any economic advantage gained by reason of 2.13the violation, to reimburse the appropriate licensing authority for the cost of counsel, 2.14investigation, and proceeding, and to discourage repeated violations;2.15(3) order restitution by the provider of medical services of any proceeds received 2.16by the provider of medical services in engaging in the prohibited activities set forth in 2.17subdivision 4.2.18    Subd. 3.Factors to consider in imposing penalties.(a) In determining the 2.19penalties imposed under subdivision 2, the appropriate licensing authority must consider:2.20(1) the nature, circumstances, extent, gravity, and number of violations;2.21(2) the degree of culpability of the violator;2.22(3) prior offenses and repeated violations of the violator; and2.23(4) any other matter that the appropriate licensing authority considers appropriate 2.24and relevant.2.25(b) If an administrative penalty is not paid after all rights of appeal have been 2.26waived or exhausted, the appropriate licensing authority may bring a civil action in a court 2.27of competent jurisdiction to collect the administrative penalty, including expenses and 2.28litigation costs, reasonable attorney fees, and interest.2.29(c) This section does not affect the right to take any independent action to seek 2.30recovery against a provider who violates this section.2.31    Subd. 4.Prohibited activities.A provider may be subject to the penalties as set 2.32forth in subdivision 2, if an appropriate licensing authority has found the provider, in 2.33connection with medical services rendered, to have:2.34(1) committed unprofessional conduct;2.35(2) practiced outside the provider's professional licensure;3.1(3) been found guilty of engaging in activities, including the use of runners, in 3.2violation of section 609.612;3.3(4) unlawfully refused to appear before, or to answer upon request of, a duly 3.4authorized officer of an appropriate licensing authority, any legal question, or to produce 3.5any relevant information concerning conduct in connection with providing medical 3.6services; or3.7(5) been found guilty of engaging in insurance fraud in violation of section 609.611.3.8    Subd. 5.Investigation.(a) An appropriate licensing authority may investigate any 3.9reports, allegations, or other information in its possession regarding a provider of medical 3.10services engaging in any of the prohibited activities set forth in subdivision 4.3.11(b) The commissioner, consistent with the powers granted under section 45.027, 3.12may investigate any reports made under section 45.0135, or other information in the 3.13commissioner's possession, regarding providers of medical services engaging in any of 3.14the prohibited activities set forth in subdivision 4. After conducting an investigation, the 3.15commissioner may refer to the appropriate licensing authority a list of any providers who 3.16the commissioner believes may have engaged in any of the prohibited activities set forth in 3.17subdivision 4 together with a description of the grounds for inclusion on the list. Within 60 3.18days of receipt of the list, the appropriate licensing authority must notify the commissioner 3.19in writing of any action taken with respect to the provider of medical services, including 3.20whether an order was made under subdivision 2. The appropriate licensing authority must 3.21post on the appropriate licensing authority's Web site a list of providers for which an order 3.22was issued under subdivision 2. The appropriate licensing authority must post quarterly 3.23on its Web site the number of complaints filed against licensees, how many of those 3.24complaints were investigated, and how many of the complaints resulted in disciplinary 3.25action by the appropriate licensing authority.3.26(c) Hearings under this section must be conducted in accordance with chapter 14 and 3.27any other applicable law.3.28    Subd. 6.Not compensable.If a provider renders medical services to an insured, 3.29notwithstanding issuance of an order under subdivision 2, clause (1), those medical 3.30services are not compensable under chapter 65B and may not be billed to the insured.3.31    Sec. 3. Minnesota Statutes 2012, section 60A.952, subdivision 3, is amended to read:3.32    Subd. 3. Immunity from liability. If insurers, insurance support organizations 3.33as defined in section 72A.491, subdivision 12, agents acting on the insurers' behalf, or 3.34authorized persons release information in good faith under this section, whether orally 4.1or in writing, they are immune from any liability, civil or criminal, for the release or 4.2reporting of the information.4.3    Sec. 4. Minnesota Statutes 2012, section 65B.44, subdivision 2, is amended to read:4.4    Subd. 2. Medical expense benefits. (a) Medical expense benefits shall reimburse 4.5all reasonable expenses for necessary:4.6(1) medical, surgical, x-ray, optical, dental, chiropractic, and rehabilitative services, 4.7including prosthetic devices;4.8(2) prescription drugs, provided that:4.9(i) prescription drugs filled and dispensed outside of a licensed pharmacy  shall be 4.10billed at the average wholesale price (AWP), or its equivalent, for that drug on that date 4.11as published in Medispan, Redbook, or Gold Standard Drug Database, as identified by 4.12its National Drug Code, plus a dispensing fee of $4.18;4.13(ii) if a prescription drug has been repackaged, the average wholesale price used 4.14to determine the maximum reimbursement shall be the average wholesale price for 4.15the underlying drug product, as identified by its National Drug Code from the original 4.16labeler; and4.17(iii) compound drugs shall be billed by listing each drug and its National Drug Code 4.18number included in the compound and calculating the charge for each drug separately. 4.19Reimbursement shall be based on the sum of the fee for each ingredient for which 4.20there is an assigned National Drug Code number plus a single dispensing fee of $4.18. 4.21Compound drugs shall not be dispensed without first obtaining preauthorization from the 4.22reparation obligor;4.23(3) ambulance and all other transportation expenses incurred in traveling to receive 4.24other covered medical expense benefits;4.25(4) sign interpreting and language translation services, other than such services 4.26provided by a family member of the patient, related to the receipt of medical, surgical, 4.27x-ray, optical, dental, chiropractic, hospital, extended care, nursing, and rehabilitative 4.28services; and4.29(5) hospital, extended care, and nursing services.4.30(b) Hospital room and board benefits may be limited, except for intensive care 4.31facilities, to the regular daily semiprivate room rates customarily charged by the institution 4.32in which the recipient of benefits is confined.4.33(c) Such benefits shall also include necessary remedial treatment and services 4.34recognized and permitted under the laws of this state for an injured person who relies 5.1upon spiritual means through prayer alone for healing in accordance with that person's 5.2religious beliefs.5.3(d) Medical expense loss includes medical expenses accrued prior to the death of a 5.4person notwithstanding the fact that benefits are paid or payable to the decedent's survivors.5.5(e) Medical expense benefits for rehabilitative services shall be subject to the 5.6provisions of section 
         65B.45.5.7    Sec. 5. Minnesota Statutes 2012, section 65B.44, subdivision 3, is amended to read:5.8    Subd. 3. Disability and income loss benefits.(a) Disability and income loss 5.9benefits shall provide compensation for 85 percent of the injured person's loss of present 5.10and future gross income from inability to work proximately caused by the nonfatal 5.11injury subject to a maximum of $250 $500 per week. Loss of income includes the costs 5.12incurred by a self-employed person to hire substitute employees to perform tasks which 5.13are necessary to maintain the income of the injured person, which are normally performed 5.14by the injured person, and which cannot be performed because of the injury.5.15(b) If the injured person is unemployed at the time of injury and is receiving or is 5.16eligible to receive unemployment benefits under chapter 268, but the injured person loses 5.17eligibility for those benefits because of inability to work caused by the injury, disability 5.18and income loss benefits shall provide compensation for the lost benefits in an amount 5.19equal to the unemployment benefits which otherwise would have been payable, subject to 5.20a maximum of $250 $500 per week.5.21(c) Compensation under this subdivision shall be reduced by any income from 5.22substitute work actually performed by the injured person or by income the injured person 5.23would have earned in available appropriate substitute work which the injured person was 5.24capable of performing but unreasonably failed to undertake.5.25(d) For the purposes of this section "inability to work" means disability which 5.26prevents the injured person from engaging in any substantial gainful occupation or 5.27employment on a regular basis, for wage or profit, for which the injured person is or may 5.28by training become reasonably qualified. If the injured person returns to employment and 5.29is unable by reason of the injury to work continuously, compensation for lost income shall 5.30be reduced by the income received while the injured person is actually able to work. The 5.31weekly maximums may not be prorated to arrive at a daily maximum, even if the injured 5.32person does not incur loss of income for a full week.5.33(e) For the purposes of this section, an injured person who is "unable by reason of 5.34the injury to work continuously" includes, but is not limited to, a person who misses time 5.35from work, including reasonable travel time, and loses income, vacation, or sick leave 6.1benefits, to obtain medical treatment for an injury arising out of the maintenance or use 6.2of a motor vehicle.6.3    Sec. 6. Minnesota Statutes 2012, section 65B.44, subdivision 4, is amended to read:6.4    Subd. 4. Funeral and burial expenses. Funeral and burial benefits shall be 6.5reasonable expenses not in excess of $2,000 $5,000, including expenses for cremation or 6.6delivery under the Darlene Luther Revised Uniform Anatomical Gift Act, chapter 525A.6.7    Sec. 7. Minnesota Statutes 2012, section 65B.44, subdivision 6, is amended to read:6.8    Subd. 6. Survivors economic loss benefits. Survivors economic loss benefits, in 6.9the event of death occurring within one year of the date of the accident, caused by and 6.10arising out of injuries received in the accident, are subject to a maximum of $200 $5006.11 per week and shall cover loss accruing after decedent's death of contributions of money 6.12or tangible things of economic value, not including services, that surviving dependents 6.13would have received from the decedent for their support during their dependency had the 6.14decedent not suffered the injury causing death.6.15For the purposes of definition under sections 
         65B.41 to 
         65B.71, the following 6.16described persons shall be presumed to be dependents of a deceased person: (a) a wife 6.17is dependent on a husband with whom she lives at the time of his death; (b) a husband 6.18is dependent on a wife with whom he lives at the time of her death; (c) any child while 6.19under the age of 18 years, or while over that age but physically or mentally incapacitated 6.20from earning, is dependent on the parent with whom the child is living or from whom the 6.21child is receiving support regularly at the time of the death of such parent; or (d) an actual 6.22dependent who lives with the decedent at the time of the decedent's death. Questions of 6.23the existence and the extent of dependency shall be questions of fact, considering the 6.24support regularly received from the deceased.6.25Payments shall be made to the dependent, except that benefits to a dependent who 6.26is a child or an incapacitated person may be paid to the dependent's surviving parent or 6.27guardian. Payments shall be terminated whenever the recipient ceases to maintain a status 6.28which if the decedent were alive would be that of dependency.6.29    Sec. 8. Minnesota Statutes 2012, section 65B.525, subdivision 1, is amended to read:6.30    Subdivision 1. Mandatory submission to binding arbitration.Except as 6.31otherwise provided in section 72A.327, The Supreme Court and the several courts of 6.32general trial jurisdiction of this state shall by rules of court or other constitutionally 6.33allowable device, provide for the mandatory submission to binding arbitration of all cases 7.1at issue where the claim at the commencement of arbitration is in an amount of $10,000 7.2or less against any insured's reparation obligor for no-fault benefits or comprehensive or 7.3collision damage coverage.7.4    Sec. 9. Minnesota Statutes 2012, section 72A.502, subdivision 2, is amended to read:7.5    Subd. 2. Prevention of fraud. Personal or privileged information may be disclosed 7.6without a written authorization to another person if the information is limited to that 7.7which is reasonably necessary to detect or prevent criminal activity, fraud, material 7.8misrepresentation, or material nondisclosure in connection with an insurance transaction, 7.9and that person agrees not to disclose the information further without the individual 7.10written authorization unless the further disclosure is otherwise permitted by this section 7.11if made by an insurer, insurance agent, or insurance-support organization. Any insurer, 7.12insurance agent, or insurance-support organization making such a disclosure is immune 7.13from liability under section 60A.952, subdivision 3.7.14    Sec. 10. TASK FORCE ON MOTOR VEHICLE INSURANCE COVERAGE 7.15VERIFICATION.7.16    Subdivision 1.Establishment.The task force on motor vehicle insurance coverage 7.17verification is established to review and evaluate approaches to insurance coverage 7.18verification and recommend legislation to create and fund a program in this state.7.19    Subd. 2.Membership; meetings; staff.(a) The task force shall be composed of 7.2013 members, who must be appointed by July 1, 2014, and who serve at the pleasure of 7.21their appointing authorities:7.22(1) the commissioner of public safety or a designee;7.23(2) the commissioner of commerce or a designee;7.24(3) two members of the house of representatives, one appointed by the speaker of the 7.25house and one appointed by the minority leader;7.26(4) two members of the senate, one appointed by the Subcommittee on Committees 7.27of the Committee on Rules and Administration and one appointed by the minority leader;7.28(5) a representative of Minnesota Deputy Registrars Association;7.29(6) a representative of AAA Minnesota;7.30(7) a representative of AARP Minnesota;7.31(8) a representative of the Insurance Federation of Minnesota;7.32(9) a representative of the Minnesota Bankers Association;7.33(10) a representative of the Minnesota Association for Justice; 7.34(11) a representative of the Minnesota Police and Peace Officers Association; and8.1(12) a representative of the Minnesota chapter of the International Association of 8.2Special Investigation Units.8.3(b) Compensation and expense reimbursement must be as provided under Minnesota 8.4Statutes, section 15.059, subdivision 3, to members of the task force.8.5(c) The commissioner of public safety shall convene the task force by August 8.61, 2014, and shall appoint a chair from the membership of the task force. Staffing and 8.7technical assistance must be provided by the Department of Public Safety.8.8    Subd. 3.Duties.The task force shall review and evaluate programs established in 8.9other states as well as programs proposed by third parties, identify one or more programs 8.10recommended for implementation in this state, and, as to the recommended programs, 8.11adopt findings concerning:8.12(1) comparative costs of programs;8.13(2) implementation considerations, and in particular, identifying the appropriate 8.14supervising agency and assessing compatibility with existing and planned computer 8.15systems;8.16(3) effectiveness in verifying existence of motor vehicle insurance coverage;8.17(4) identification of categories of authorized users;8.18(5) simplicity of access and use for authorized users;8.19(6) data privacy considerations;8.20(7) data retention policies; and8.21(8) statutory changes necessary for implementation.8.22    Subd. 4.Report.By February 1, 2015, the task force must submit to the 8.23chairs and ranking minority members of the house of representatives and senate 8.24committees and divisions with primary jurisdiction over commerce and transportation its 8.25written recommendations, including any draft legislation necessary to implement the 8.26recommendations.8.27    Subd. 5.Sunset.The task force shall sunset the day after submitting the report 8.28under subdivision 4, or February 2, 2015, whichever is earlier.8.29EFFECTIVE DATE.This section is effective the day following final enactment.8.30    Sec. 11.  REPEALER.8.31Minnesota Statutes 2012, section 72A.327, is repealed.