1.1 	A bill for an act
1.2 	relating to health care; clarifying the prepaid health plan appeals process;amending 
1.3 	Minnesota Statutes 2020, sections 256.045, subdivision 3a; 256B.0625, subdivisions 
1.4 	13f, 25; 256B.69, by adding a subdivision.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2020, section 256.045, subdivision 3a, is amended to read:
1.7 		Subd. 3a.Prepaid health plan appeals. (a) All prepaid health plans including managed 
1.8 	care plans and county-based purchasing plans under contract to the commissioner under 
1.9 	chapter 256B must provide for a complaint system according to section 62D.11 federal 
1.10 	regulations and this section. When a prepaid health plan denies, reduces, or terminates a 
1.11 	health service or denies a request to authorize a health service or previously authorized 
1.12 	health service, the prepaid health plan must notify the recipient of the right to file a complaint 
1.13 	or an appeal and the recipient's right to request a hearing under paragraph (c). The notice 
1.14 	must include the name and telephone number of the ombudsman and notice of the recipient's 
1.15 	right to request a hearing under paragraph (b). Recipients may request the assistance of the 
1.16 	ombudsman in the complaint system process. The prepaid health plan must issue a written 
1.17 	resolution of the complaint to the recipient within 30 days after the complaint is filed with 
1.18 	the prepaid health plan. A recipient is required to exhaust the complaint system procedures 
1.19 	in order to request a hearing under paragraph (b) (c).
1.20 	(b) If the resolution of the complaint is adverse to the recipient, the prepaid health plan 
1.21 	must provide the recipient with:
1.22 	(1) the reasons for the adverse determination, including the right of the recipient upon 
1.23 	request and free of charge to reasonable access and copies of all documents, records, and 
2.1 	other information relevant to the adverse determination including all medical necessity 
2.2 	criteria and any processes, strategies, or evidentiary standards used to set coverage limits;
2.3 	(2) the qualifications of the reviewer of the complaint, including any license, certification, 
2.4 	or speciality designation held by the reviewer; and
2.5 	(3) the procedures for filing an appeal of the determination and for requesting a hearing 
2.6 	under paragraph (c).
2.7 	(c) Recipients enrolled in a prepaid health plan under chapter 256B may contest a prepaid 
2.8 	health plan's denial, reduction, or termination of health services, a prepaid health plan's 
2.9 	denial of a request to authorize a previously authorized health service, or the prepaid health 
2.10 	plan's written resolution of a complaint by submitting a written request for a hearing 
2.11 	according to subdivision 3. A state human services judge shall conduct a hearing on the 
2.12 	matter and shall recommend an order to the commissioner of human services. The 
2.13 	commissioner need not grant a hearing if the sole issue raised by a recipient is the 
2.14 	commissioner's authority to require mandatory enrollment in a prepaid health plan in a 
2.15 	county where prepaid health plans are under contract with the commissioner. The state 
2.16 	human services judge may order a second medical opinion from a nonprepaid health plan 
2.17 	provider at the expense of the Department of Human Services. Recipients may request the 
2.18 	assistance of the ombudsman in the appeal process.
2.19 	(c) (d) In the written request for a hearing to appeal from a prepaid health plan's denial, 
2.20 	reduction, or termination of a health service, a prepaid health plan's denial of a request to 
2.21 	authorize a previously authorized service, or the prepaid health plan's written resolution to 
2.22 	a complaint, a recipient may request an expedited hearing. If an expedited appeal is 
2.23 	warranted, the state human services judge shall hear the appeal and render a decision within 
2.24 	a time commensurate with the level of urgency involved, based on the individual 
2.25 	circumstances of the case.
2.26 	(d) (e) Beginning January 1, 2018, the requirements of Code of Federal Regulations, 
2.27 	part 42, sections 438.400 to 438.424, take precedence over any conflicting provisions in 
2.28 	this subdivision. All other provisions of this section remain in effect.

2.29 	Sec. 2. Minnesota Statutes 2020, section 256B.0625, subdivision 13f, is amended to read:
2.30 		Subd. 13f.Prior authorization. (a) The Formulary Committee shall review and 
2.31 	recommend drugs which require prior authorization. The Formulary Committee shall 
2.32 	establish general criteria to be used for the prior authorization of brand-name drugs for 
3.1 	which generically equivalent drugs are available, but the committee is not required to review 
3.2 	each brand-name drug for which a generically equivalent drug is available.
3.3 	(b) Prior authorization may be required by the commissioner before certain formulary 
3.4 	drugs are eligible for payment. The Formulary Committee may recommend drugs for prior 
3.5 	authorization directly to the commissioner. The commissioner may also request that the 
3.6 	Formulary Committee review a drug for prior authorization. Before the commissioner may 
3.7 	require prior authorization for a drug:
3.8 	(1) the commissioner must provide information to the Formulary Committee on the 
3.9 	impact that placing the drug on prior authorization may have on the quality of patient care 
3.10 	and on program costs, information regarding whether the drug is subject to clinical abuse 
3.11 	or misuse, and relevant data from the state Medicaid program if such data is available;
3.12 	(2) the Formulary Committee must review the drug, taking into account medical and 
3.13 	clinical data and the information provided by the commissioner; and
3.14 	(3) the Formulary Committee must hold a public forum and receive public comment for 
3.15 	an additional 15 days.
3.16 	The commissioner must provide a 15-day notice period before implementing the prior 
3.17 	authorization and may only update prior authorization requirements on an annual basis 
3.18 	unless a drug has been deemed safe by the Food and Drug Administration, has been 
3.19 	withdrawn by the manufacturer or the Food and Drug Administration, or an independent 
3.20 	source of research, clinical guidelines, or evidence-based standards has issued drug-specific 
3.21 	warnings or recommended changes in drug usage.
3.22 	(c) Except as provided in subdivision 13j, prior authorization shall not be required or 
3.23 	utilized for any atypical antipsychotic drug prescribed for the treatment of mental illness 
3.24 	if:
3.25 	(1) there is no generically equivalent drug available; and
3.26 	(2) the drug was initially prescribed for the recipient prior to July 1, 2003; or
3.27 	(3) the drug is part of the recipient's current course of treatment.
3.28 	This paragraph applies to any multistate preferred drug list or supplemental drug rebate 
3.29 	program established or administered by the commissioner. Prior authorization shall 
3.30 	automatically be granted for 60 days for brand name drugs prescribed for treatment of mental 
3.31 	illness within 60 days of when a generically equivalent drug becomes available, provided 
3.32 	that the brand name drug was part of the recipient's course of treatment at the time the 
3.33 	generically equivalent drug became available.
4.1 	(d) The commissioner may require prior authorization for brand name drugs whenever 
4.2 	a generically equivalent product is available, even if the prescriber specifically indicates 
4.3 	"dispense as written-brand necessary" on the prescription as required by section 151.21, 
4.4 	subdivision 2.
4.5 	(e) Notwithstanding this subdivision, the commissioner may automatically require prior 
4.6 	authorization, for a period not to exceed 180 days, for any drug that is approved by the 
4.7 	United States Food and Drug Administration on or after July 1, 2005. The 180-day period 
4.8 	begins no later than the first day that a drug is available for shipment to pharmacies within 
4.9 	the state. The Formulary Committee shall recommend to the commissioner general criteria 
4.10 	to be used for the prior authorization of the drugs, but the committee is not required to 
4.11 	review each individual drug. In order to continue prior authorizations for a drug after the 
4.12 	180-day period has expired, the commissioner must follow the provisions of this subdivision.
4.13 	(f) Prior authorization under this subdivision shall comply with section 62Q.184.
4.14 	(g) Any step therapy protocol requirements established by the commissioner must comply 
4.15 	with section 62Q.1841.
4.16 	(h) If a recipient has received a prior authorization for a drug in accordance with this 
4.17 	subdivision, the prior authorization shall remain valid for the duration of the recipient's 
4.18 	enrollment or one year, whichever is shorter.

4.19 	Sec. 3. Minnesota Statutes 2020, section 256B.0625, subdivision 25, is amended to read:
4.20 		Subd. 25.Prior authorization required. (a) The commissioner shall publish in the 
4.21 	Minnesota health care programs provider manual and on the department's website a list of 
4.22 	health services that require prior authorization, the criteria and standards used to select 
4.23 	health services on the list, and the criteria and standards used to determine whether certain 
4.24 	providers must obtain prior authorization for their services. The list of services requiring 
4.25 	prior authorization and the criteria and standards used to formulate the list of services or 
4.26 	the selection of providers for whom prior authorization is required are not subject to the 
4.27 	requirements of sections 14.001 to 14.69. The commissioner's decision whether prior 
4.28 	authorization is required for a health service or is required for a provider is not subject to 
4.29 	administrative appeal. Use of criteria or standards to select providers for whom prior 
4.30 	authorization is required shall not impede access to the service involved for any group of 
4.31 	individuals with unique or special needs due to disability or functional condition.
5.1 	(b) The commissioner shall implement a modernized electronic system for providers to 
5.2 	request prior authorization. The modernized electronic system must include at least the 
5.3 	following functionalities:
5.4 	(1) authorizations are recipient-centric, not provider-centric;
5.5 	(2) adequate flexibility to support authorizations for an episode of care, continuous drug 
5.6 	therapy, or for individual onetime services and allows an ordering and a rendering provider 
5.7 	to both submit information into one request;
5.8 	(3) allows providers to review previous authorization requests and determine where a 
5.9 	submitted request is within the authorization process;
5.10 	(4) supports automated workflows that allow providers to securely submit medical 
5.11 	information that can be accessed by medical and pharmacy review vendors as well as 
5.12 	department staff; and
5.13 	(5) supports development of automated clinical algorithms that can verify information 
5.14 	and provide responses in real time.
5.15 	(c) The system described in paragraph (b) shall be completed by March 1, 2012. All 
5.16 	authorization requests submitted on and after March 1, 2012, or upon completion of the 
5.17 	modernized authorization system, whichever is later, must be submitted electronically by 
5.18 	providers, except requests for drugs dispensed by an outpatient pharmacy, services that are 
5.19 	provided outside of the state and surrounding local trade area, and services included on a 
5.20 	service agreement.
5.21 	(d) If prior authorization is obtained for a health care service, the prior authorization 
5.22 	must remain valid for the duration of the recipient's enrollment or one year, whichever is 
5.23 	shorter.

5.24 	Sec. 4. Minnesota Statutes 2020, section 256B.69, is amended by adding a subdivision to 
5.25 	read:
5.26 		Subd. 11a.Prior authorization. If a managed care plan or county-based purchasing 
5.27 	plan requires prior authorization of a health care service, the plan must, at a minimum, 
5.28 	provide prompt notification of the plan's prior authorization decision to the enrollee and the 
5.29 	enrollee's provider and notify the enrollee and the enrollee's provider of the right to appeal 
5.30 	the prior authorization decision in accordance with section 256.045, subdivision 3a. If the 
5.31 	plan or the utilization review organization conducting the prior authorization for the plan 
5.32 	needs more information to complete the prior authorization request, the plan or the utilization 
5.33 	review organization must promptly contact the enrollee or the enrollee's provider and specify 
6.1 	the information necessary to complete the prior authorization. The plan or utilization review 
6.2 	organization may deny the prior authorization request if the plan or utilization review 
6.3 	organization notified the enrollee or the enrollee's provider of the necessary information 
6.4 	and the enrollee or the enrollee's provider failed to provide the information within 15 days 
6.5 	of the notification.