SF 1261

Introduction - 94th Legislature (2025 - 2026)

Posted on 02/14/2025 09:22 a.m.

A bill for an act
relating to human services; establishing a Family Medical Account service delivery
model; requiring reports; proposing coding for new law in Minnesota Statutes,
chapter 256B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [256B.695] FAMILY MEDICAL ACCOUNT SERVICE DELIVERY
MODEL.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner of human services shall establish the
Family Medical Account (FMA) service delivery model under this section. The commissioner
shall place all new and reenrolling medical assistance enrollees eligible under subdivision
4, and not excluded by subdivision 5, on an FMA service delivery model beginning January
1, 2026.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Chronically ill individual" has the meaning given in United States Code, title 26,
section 7702B(c)(2)(A).
new text end

new text begin (c) "Disability" has the meaning given in United States Code, title 42, section 12102.
new text end

new text begin (d) "Enrollee" means an individual enrolled in the FMA service delivery model.
new text end

new text begin (e) "Financial institution" has the meaning given in section 47.59, subdivision 1,
paragraph (k).
new text end

new text begin (f) "FMA debit account" means the debit account to which the monthly installments of
the yearly contribution amount are made and from which costs for service fees are paid.
new text end

new text begin (g) "FMA debit card" means the physical card an FMA enrollee uses to access money
in the enrollee's FMA debit account to pay for service fees.
new text end

new text begin (h) "FMA investment account" means the account to which unspent money in an FMA
enrollee's FMA debit account is deposited at the end of each calendar year.
new text end

new text begin (i) "Medical care" has the meaning given in section 213(d) of the Internal Revenue Code.
new text end

new text begin (j) "Service fee" means the price that the commissioner pays for individual health care
services under the FMA service delivery model.
new text end

new text begin (k) "Yearly contribution amount" means the total annual contribution amount by the
commissioner into the FMA debit account of an enrollee.
new text end

new text begin Subd. 3. new text end

new text begin General model requirements. new text end

new text begin (a) The FMA service delivery model must
provide enrollees with medical assistance benefits according to subdivision 6.
new text end

new text begin (b) The FMA service delivery model must provide:
new text end

new text begin (1) enrollment counseling to enrollees with individual guidance regarding the enrollment
process and related information; and
new text end

new text begin (2) access for enrollees to negotiated provider service fee rates updated monthly.
new text end

new text begin (c) The FMA service delivery model must provide ongoing education to enrollees on:
new text end

new text begin (1) the high cost of medical care;
new text end

new text begin (2) reducing the inappropriate use of health care services; and
new text end

new text begin (3) taking individual enrollee responsibility for health care outcomes.
new text end

new text begin (d) The commissioner shall provide for retrospective medical billing as allowed under
medical assistance guidelines.
new text end

new text begin Subd. 4. new text end

new text begin Enrollee participation requirements. new text end

new text begin (a) The commissioner must require any
new or reenrolling medical assistance enrollee who meets all the following qualifications
to receive medical assistance through the FMA service delivery model:
new text end

new text begin (1) the person is eligible for medical assistance under section 256B.055, subdivision 3a,
9, 10, 15, or 16;
new text end

new text begin (2) the person has an income of 138 percent or less of the federal poverty guideline;
new text end

new text begin (3) the person would otherwise receive medical assistance services under a managed
care organization; and
new text end

new text begin (4) the person is not excluded under subdivision 5.
new text end

new text begin (b) Enrollment in the FMA service delivery model is effective for 12 months and may
be extended for additional 12-month periods. Enrollment is subject to the individual
maintaining eligibility for medical assistance.
new text end

new text begin (c) The commissioner shall provide all eligible persons information for contacting the
Ombudsperson for Managed Care. The Ombudsperson for Managed Care shall fully inform
eligible persons of the comparative attributes of the FMA service delivery model and
fee-for-service or demonstration project service delivery models.
new text end

new text begin Subd. 5. new text end

new text begin Excluded persons. new text end

new text begin (a) A person who, when applying, has a disability or is 65
years of age or older is excluded from enrollment in the FMA service delivery model.
new text end

new text begin (b) A medical assistance enrollee subject to a federal waiver or demonstration project
that requires a specific service delivery model is excluded from enrollment in the FMA
service delivery model.
new text end

new text begin Subd. 6. new text end

new text begin Medical assistance benefits. new text end

new text begin (a) Enrollees in the FMA service delivery model
must be deemed consumers and must receive the following medical assistance benefits:
new text end

new text begin (1) coverage for medical expenses for medical goods and services for which benefits
are otherwise provided under medical assistance after the enrollee fully spends the yearly
contribution amount in the enrollee's FMA debit account;
new text end

new text begin (2) monthly contributions equaling one-twelfth of the total yearly contribution amount
deposited into an FMA debit account for use by the enrollee for medical care expenses; and
new text end

new text begin (3) an FMA investment account to which unspent yearly contributions are transferred
at the end of each calendar year.
new text end

new text begin (b) Use of an FMA debit account is limited to outpatient and emergency room goods
and services, including monthly fees for direct primary care.
new text end

new text begin (c) Any outpatient treatment service is limited to a $300 service fee per occurrence.
new text end

new text begin (d) The following services are covered by medical assistance and not subject to the
yearly contribution amount:
new text end

new text begin (1) preventive services as specified by the commissioner;
new text end

new text begin (2) prescription drugs prescribed for the treatment of diabetes, high blood pressure, high
cholesterol, epilepsy, respiratory diseases, and other health conditions as determined by the
commissioner;
new text end

new text begin (3) lifesaving devices needed for the treatment of anaphylaxis;
new text end

new text begin (4) medical equipment necessary for the treatment of respiratory diseases; and
new text end

new text begin (5) inpatient hospital care and services at surgery centers. The commissioner must not
deduct an FMA emergency room service fee if the enrollee is admitted to inpatient care.
new text end

new text begin (e) After an enrollee spends the full yearly contribution amount, medical assistance
benefits for that enrollee consist of the benefits that would otherwise be provided to that
enrollee under medical assistance had the enrollee not enrolled in the FMA service delivery
model.
new text end

new text begin (f) The commissioner shall contract directly with health care providers as defined in
section 62A.63, subdivision 2, to provide the medical assistance benefits specified in
paragraph (a), clause (1), and may purchase reinsurance through open national bids for the
cost of providing these medical assistance benefits. The commissioner must not purchase
reinsurance from a managed care organization.
new text end

new text begin Subd. 7. new text end

new text begin Operation of accounts. new text end

new text begin (a) The commissioner shall contribute a yearly
contribution amount into the FMA debit account of each enrollee.
new text end

new text begin (b) Enrollees must use an FMA debit card to pay medical expense service fees at the
prices set under the FMA service delivery model.
new text end

new text begin (c) For the initial calendar year of the FMA service delivery model, the full yearly
contribution amount for the FMA debit card is:
new text end

new text begin (1) $1,500 for children;
new text end

new text begin (2) $2,500 for adults with children; and
new text end

new text begin (3) $2,500 for adults without children.
new text end

new text begin (d) The commissioner shall pay a monthly amount into the FMA debit account equal to
one-twelfth of the total yearly contribution amount on the first day of every month as long
as the enrollee is eligible.
new text end

new text begin (e) The commissioner shall annually adjust the amount under paragraph (c) to meet 40
percent of Centers for Medicare and Medicaid Services annual enrollee costs as determined
using data available to the commissioner.
new text end

new text begin (f) The commissioner must transfer unspent FMA debit account money under paragraph
(c) to the enrollee's FMA investment account one year after enrollment, according to
paragraph (i). Accumulated money transferred to an FMA investment account must not be
counted toward the money available in the enrollee's FMA debit account in a subsequent
year.
new text end

new text begin (g) If an enrollee is disenrolled from the FMA service delivery model or otherwise
becomes ineligible for any reason other than fraud, the operation of the FMA debit account
and any associated FMA investment account is controlled by subdivision 9.
new text end

new text begin (h) The commissioner shall contract with a third-party administrator to administer the
FMA service delivery model. The third-party administrator must be audited annually by an
independent auditor under parameters determined by the commissioner. A health plan
company or a financial institution under contract under paragraph (i) must not serve as a
third-party administrator. The commissioner must contract with a nationwide third-party
administrator.
new text end

new text begin (i) The commissioner shall contract with a financial institution to establish FMA
investment accounts for enrollees with unspent FMA debit account money at the end of the
eligibility year. FMA investment accounts do not have a dollar maximum. The commissioner
shall negotiate, as part of the contract, the interest rate to be paid by the financial institution
to an enrollee.
new text end

new text begin (j) The commissioner may contract for private bank services.
new text end

new text begin (k) The commissioner shall not count amounts in or contributed to an FMA debit account
or FMA investment account as income or assets for purposes of determining medical
assistance eligibility.
new text end

new text begin (l) All payments must be made by the commissioner and the third-party administrator
directly to providers of medical goods and services through the FMA debit card.
new text end

new text begin (m) The commissioner shall create a process to coordinate care for high-cost, chronically
ill enrollees with any medical illness, addiction, mental illness, dental care needs, or high
medical costs due to prolonged acute illness or injury. The use of enrollee personal clinical
data for this process must include each enrollee's authorized release of information, except
that no enrollee approval is required for release of information if the chronic illness severity
requires that the enrollee be transferred to a fee-for-service delivery model.
new text end

new text begin Subd. 8. new text end

new text begin Using money in an FMA debit account. new text end

new text begin (a) Except as provided in subdivision
9, enrollees must only use money in an FMA debit account for paying for medical care
service fees.
new text end

new text begin (b) Enrollees must not use money in an FMA debit account to pay a provider for medical
goods and services unless:
new text end

new text begin (1) the provider is licensed or otherwise authorized under state law to provide the goods
or services;
new text end

new text begin (2) the provider meets medical assistance program standards, except there must be no
mandated electronic health records or report requirement for cash clinics; and
new text end

new text begin (3) the provider complies with medical assistance prohibitions related to fraud and abuse.
new text end

new text begin (c) The commissioner shall establish procedures to:
new text end

new text begin (1) penalize or disenroll from the FMA service delivery model enrollees and providers
who make nonqualified withdrawals from an FMA debit account; and
new text end

new text begin (2) recoup costs that derive from nonqualified withdrawals.
new text end

new text begin (d) If the service fee for medical care exceeds the current amount in an enrollee's FMA
debit account, the enrollee may overdraw from the FMA debit account up to the full yearly
contribution amount. Subsequent monthly FMA debit account contributions must be withheld
until the overdrawn amount is fully paid, after which monthly payments must resume.
new text end

new text begin (e) Medical assistance payment rates for medical care service fees only apply if the
enrollee remains on medical assistance in the FMA service delivery model. For those
individuals no longer enrolled in the FMA service delivery model, use of remaining FMA
debit account money for medical goods and services must be at the individual's share of
cost under a different insurance plan or the full cost of service.
new text end

new text begin Subd. 9. new text end

new text begin Maintaining an FMA debit account for enrollees who become ineligible. new text end

new text begin (a)
If an enrollee becomes ineligible for medical assistance, the commissioner must make no
further monthly contributions to the individual's FMA debit account.
new text end

new text begin (b) If an enrollee becomes ineligible for medical assistance, money in the FMA debit
account remains available to the account holder in the FMA debit account for one year from
the date on which the individual became ineligible for medical assistance under the same
terms and conditions that would apply had the individual remained eligible for the FMA
service delivery model, except that the money is not subject to medical assistance rates
pursuant to subdivision 8, paragraph (e). The commissioner must transfer unspent FMA
debit account money remaining after one year from the date on which the individual became
ineligible for medical assistance to the enrollee's FMA investment account subject to all
other requirements under subdivisions 7 and 10.
new text end

new text begin (c) For those individuals no longer enrolled in the FMA service delivery model, money
from an FMA debit account used for medical care must be transferred by the commissioner
or the third-party administrator directly from the FMA debit account to the medical provider
of goods and services.
new text end

new text begin Subd. 10. new text end

new text begin Use of money from FMA investment account new text end

new text begin (a) An individual must only
use money in an FMA investment account for medical care that is not already covered by
the FMA yearly contribution amount and subsequent medical assistance benefit coverage.
new text end

new text begin (b) An individual who is no longer on medical assistance must use money in the FMA
investment account only for medical care. Medical assistance terms, conditions, and rates
do not apply to money in an FMA investment account of an individual who is no longer on
medical assistance. Money from an FMA investment account used for medical care must
be transferred by the third-party administrator directly from the FMA investment account
to the medical provider of goods and services.
new text end

new text begin (c) The money in the FMA investment account is not recoverable by the state.
new text end

new text begin (d) Enrollee use of FMA investment account money after reaching age 65 is governed
by federal health savings account rules.
new text end

new text begin Subd. 11. new text end

new text begin Data. new text end

new text begin All data under the FMA service delivery model, including protected
enrollee identified data, is available to the commissioner. All data except protected health
information is available to any party pursuant to chapter 13, and no such data may be declared
protected data or trade secret by the commissioner.
new text end

new text begin Subd. 12. new text end

new text begin Incentives for preventive care and care coordination. new text end

new text begin The commissioner
may develop and provide positive incentives for enrollees to obtain prenatal care and other
appropriate preventive care. In developing these incentives, the commissioner may consider
various rewards for enrollees demonstrating healthy prevention practices.
new text end

new text begin Subd. 13. new text end

new text begin Electronic transactions required. new text end

new text begin The commissioner shall require all
withdrawals and payments from FMA debit accounts be made electronically through an
FMA debit card. The method developed or selected for the FMA service delivery model
must include photo identification and electronic locks to prevent unauthorized use and must
provide real-time, encounter-level payment to health care providers. The method used must:
new text end

new text begin (1) allow information from an enrollee's medical record to be stored and accessed by
the enrollee and health care providers;
new text end

new text begin (2) allow storage and transfer of encounter-level data for analysis for both provider- and
enrollee-specific and aggregate health care quality measurement and monitoring; and
new text end

new text begin (3) enable the provider to confirm that the electronic means accurately identify the
enrollee.
new text end

new text begin Subd. 14. new text end

new text begin Access to negotiated provider payment rates. new text end

new text begin The commissioner shall allow
enrollees in the FMA service delivery model to obtain medical goods and services from
providers, including cash only clinics, individual clinics, and individual mental health clinics,
that choose to serve enrollees at payment rates that do not exceed the medical assistance
payment rates.
new text end

new text begin Subd. 15. new text end

new text begin Death of current or former enrollee. new text end

new text begin In the event of the death of a current
or former enrollee, the amount in the FMA debit account and the FMA investment account
must be distributed to the primary beneficiary of the estate or, if there is no named
beneficiary, to the estate.
new text end

new text begin Subd. 16. new text end

new text begin Commissioner duties. new text end

new text begin (a) The commissioner shall establish and publish
service fees for the benefits provided to an enrollee under the FMA service delivery model
every month.
new text end

new text begin (b) The commissioner shall provide enrollment counselors and ongoing education for
enrollees. The counseling and education must be designed to:
new text end

new text begin (1) meet the FMA service delivery model requirements specified in subdivision 3,
paragraphs (b) and (c);
new text end

new text begin (2) provide enrollees with assistance accessing providers and obtaining negotiated
provider payment rates; and
new text end

new text begin (3) provide enrollees with information on the benefits of maintaining continuity of care
both before and after enrollees spend the yearly contribution amount.
new text end

new text begin (c) The commissioner shall make the services of the Office of the Ombudsperson for
Managed Care available to enrollees in the FMA service delivery model and shall require
the office to address access, service, and billing problems related to providing medical
assistance benefits under subdivision 6.
new text end

new text begin (d) The commissioner shall provide FMA service delivery model enrollees a monthly
report detailing transactions, including FMA debit account and FMA investment account
balances.
new text end

new text begin (e) The commissioner shall implement a streamlined medical assistance renewal process
for FMA service delivery model enrollees. This process must include:
new text end

new text begin (1) requiring eligibility renewals every 12 months;
new text end

new text begin (2) allowing for passive renewal in which an enrollee receives a completed renewal form
from the commissioner; and
new text end

new text begin (3) allowing enrollees to provide to the commissioner updated information or a signed
statement attesting that the enrollee's eligibility information has not changed.
new text end

new text begin (f) The commissioner may adopt rules under chapter 14 to establish criteria for the
operation of the FMA service delivery model and may establish conditions limiting the use
of money in an FMA debit account, including but not limited to a deduction of $25 from
the enrollee's FMA debit account if the enrollee does not contact the nurse hotline before
going to the emergency room. If the medical event requires hospitalization, this deduction
must not apply. Except for necessary emergency services that do not result in hospitalization,
the commissioner must charge an enrollee an ambulance service fee.
new text end

new text begin (g) To ensure access, the commissioner shall recruit willing medical assistance providers
and shall publish monthly updated provider listings on the department's website, including
location and ordinary office business and call hours and procedure prices that medical
assistance pays for health care services.
new text end

new text begin (h) In implementing the FMA service delivery model, the commissioner shall also raise
all service fees for medical assistance provided under the FMA service delivery model to
levels equivalent to the federal Medicare service fee rates.
new text end

new text begin (i) The commissioner shall present progress reports on the FMA service delivery model
to the legislative committees with jurisdiction over health and human services finance and
policy by October 1, 2026, and October 1, 2027. The commissioner shall include in the
progress reports recommendations for any changes in law necessary to improve operation
of the FMA service delivery model or to comply with federal requirements.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end