HF 1022

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to insurance; transferring regulatory 
  1.3             authority over health maintenance organizations and 
  1.4             similar entities to the commissioner of commerce; 
  1.5             making conforming changes; amending Minnesota Statutes 
  1.6             1998, sections 60B.02; 60B.03, subdivision 2; 60B.15; 
  1.7             60B.20; 60G.01, subdivisions 2 and 4; 62A.61; 62D.01, 
  1.8             subdivision 2; 62D.02, subdivision 3; 62D.03, 
  1.9             subdivisions 1, 3, and 4; 62D.04, subdivisions 1 and 
  1.10            2; 62D.05, subdivision 6; 62D.06, subdivision 2; 
  1.11            62D.07, subdivisions 2, 3, and 10; 62D.08, 
  1.12            subdivisions 1, 2, 3, 4, and 5; 62D.09, subdivisions 1 
  1.13            and 8; 62D.10, subdivision 4; 62D.11, subdivisions 2 
  1.14            and 3; 62D.12, subdivisions 1, 2, and 9; 62D.121, 
  1.15            subdivision 3a; 62D.14, subdivisions 1, 3, 5, and 6; 
  1.16            62D.15, subdivisions 1 and 4; 62D.16, subdivisions 1 
  1.17            and 2; 62D.17, subdivisions 1, 3, 4, and 5; 62D.18, 
  1.18            subdivisions 1 and 7; 62D.19; 62D.20, subdivision 1; 
  1.19            62D.21; 62D.211; 62D.22, subdivisions 4 and 10; 
  1.20            62D.24; 62D.30, subdivisions 1 and 3; 62L.02, 
  1.21            subdivision 8; 62L.05, subdivision 12; 62L.08, 
  1.22            subdivisions 10 and 11; 62M.11; 62M.16; 62N.02, 
  1.23            subdivision 4; 62N.26; 62N.31, subdivision 1; 62Q.01, 
  1.24            subdivision 2; 62Q.07; 62Q.075, subdivision 4; 
  1.25            62Q.105, subdivisions 6 and 7; 62Q.11; 62Q.22, 
  1.26            subdivisions 2, 6, and 7; 62Q.32; 62Q.51, subdivision 
  1.27            3; 62Q.525, subdivision 3; 62R.04, subdivision 5; 
  1.28            62R.25; 62T.01, subdivision 4; and 72A.139, 
  1.29            subdivision 2; repealing Minnesota Statutes 1998, 
  1.30            sections 62D.18; 62L.11, subdivision 2; and 62Q.45, 
  1.31            subdivision 1. 
  1.32  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.33                             ARTICLE 1 
  1.34                  HEALTH MAINTENANCE ORGANIZATIONS 
  1.35     Section 1.  Minnesota Statutes 1998, section 62D.01, 
  1.36  subdivision 2, is amended to read: 
  1.37     Subd. 2.  (a) Faced with the continuation of mounting costs 
  1.38  of health care coupled with its inaccessibility to large 
  2.1   segments of the population, the legislature has determined that 
  2.2   there is a need to explore alternative methods for the delivery 
  2.3   of health care services, with a view toward achieving greater 
  2.4   efficiency and economy in providing these services. 
  2.5      (b) It is, therefore, the policy of the state to eliminate 
  2.6   the barriers to the organization, promotion, and expansion of 
  2.7   health maintenance organizations; to provide for their 
  2.8   regulation by the state commissioner of health commerce; and to 
  2.9   exempt them from the operation of the insurance and nonprofit 
  2.10  health service plan corporation laws of the state except as 
  2.11  hereinafter provided. 
  2.12     (c) It is further the intention of the legislature to 
  2.13  closely monitor the development of health maintenance 
  2.14  organizations in order to assess their impact on the costs of 
  2.15  health care to consumers, the accessibility of health care to 
  2.16  consumers, and the quality of health care provided to consumers. 
  2.17     Sec. 2.  Minnesota Statutes 1998, section 62D.02, 
  2.18  subdivision 3, is amended to read: 
  2.19     Subd. 3.  "Commissioner of health commerce" or 
  2.20  "commissioner" means the state commissioner of health commerce 
  2.21  or a designee. 
  2.22     Sec. 3.  Minnesota Statutes 1998, section 62D.03, 
  2.23  subdivision 1, is amended to read: 
  2.24     Subdivision 1.  Notwithstanding any law of this state to 
  2.25  the contrary, any nonprofit corporation organized to do so or a 
  2.26  local governmental unit may apply to the commissioner of health 
  2.27  for a certificate of authority to establish and operate a health 
  2.28  maintenance organization in compliance with sections 62D.01 to 
  2.29  62D.30.  No person shall establish or operate a health 
  2.30  maintenance organization in this state, nor sell or offer to 
  2.31  sell, or solicit offers to purchase or receive advance or 
  2.32  periodic consideration in conjunction with a health maintenance 
  2.33  organization or health maintenance contract unless the 
  2.34  organization has a certificate of authority under sections 
  2.35  62D.01 to 62D.30. 
  2.36     Sec. 4.  Minnesota Statutes 1998, section 62D.03, 
  3.1   subdivision 3, is amended to read: 
  3.2      Subd. 3.  The commissioner of health may require any person 
  3.3   providing physician and hospital services with payments made in 
  3.4   the manner set forth in section 62D.02, subdivision 4, to apply 
  3.5   for a certificate of authority under sections 62D.01 to 62D.30.  
  3.6   An applicant may continue to operate until the commissioner of 
  3.7   health acts upon the application.  In the event that an 
  3.8   application is denied, the applicant shall henceforth be treated 
  3.9   as a health maintenance organization whose certificate of 
  3.10  authority has been revoked.  Any person directed to apply for a 
  3.11  certificate of authority shall be subject to the provisions of 
  3.12  this subdivision. 
  3.13     Sec. 5.  Minnesota Statutes 1998, section 62D.03, 
  3.14  subdivision 4, is amended to read: 
  3.15     Subd. 4.  Each application for a certificate of authority 
  3.16  shall be verified by an officer or authorized representative of 
  3.17  the applicant, and shall be in a form prescribed by the 
  3.18  commissioner of health.  Each application shall include the 
  3.19  following: 
  3.20     (a) a copy of the basic organizational document, if any, of 
  3.21  the applicant and of each major participating entity; such as 
  3.22  the articles of incorporation, or other applicable documents, 
  3.23  and all amendments thereto; 
  3.24     (b) a copy of the bylaws, rules and regulations, or similar 
  3.25  document, if any, and all amendments thereto which regulate the 
  3.26  conduct of the affairs of the applicant and of each major 
  3.27  participating entity; 
  3.28     (c) a list of the names, addresses, and official positions 
  3.29  of the following: 
  3.30     (1) all members of the board of directors, or governing 
  3.31  body of the local government unit, and the principal officers 
  3.32  and shareholders of the applicant organization; and 
  3.33     (2) all members of the board of directors, or governing 
  3.34  body of the local government unit, and the principal officers of 
  3.35  the major participating entity and each shareholder beneficially 
  3.36  owning more than ten percent of any voting stock of the major 
  4.1   participating entity; 
  4.2      The commissioner may by rule identify persons included in 
  4.3   the term "principal officers"; 
  4.4      (d) a full disclosure of the extent and nature of any 
  4.5   contract or financial arrangements between the following:  
  4.6      (1) the health maintenance organization and the persons 
  4.7   listed in clause (c)(1); 
  4.8      (2) the health maintenance organization and the persons 
  4.9   listed in clause (c)(2); 
  4.10     (3) each major participating entity and the persons listed 
  4.11  in clause (c)(1) concerning any financial relationship with the 
  4.12  health maintenance organization; and 
  4.13     (4) each major participating entity and the persons listed 
  4.14  in clause (c)(2) concerning any financial relationship with the 
  4.15  health maintenance organization; 
  4.16     (e) the name and address of each participating entity and 
  4.17  the agreed upon duration of each contract or agreement; 
  4.18     (f) a copy of the form of each contract binding the 
  4.19  participating entities and the health maintenance organization.  
  4.20  Contractual provisions shall be consistent with the purposes of 
  4.21  sections 62D.01 to 62D.30, in regard to the services to be 
  4.22  performed under the contract, the manner in which payment for 
  4.23  services is determined, the nature and extent of 
  4.24  responsibilities to be retained by the health maintenance 
  4.25  organization, the nature and extent of risk sharing permissible, 
  4.26  and contractual termination provisions; 
  4.27     (g) a copy of each contract binding major participating 
  4.28  entities and the health maintenance organization.  Contract 
  4.29  information filed with the commissioner shall be confidential 
  4.30  and subject to the provisions of section 13.37, subdivision 1, 
  4.31  clause (b), upon the request of the health maintenance 
  4.32  organization.  
  4.33     Upon initial filing of each contract, the health 
  4.34  maintenance organization shall file a separate document 
  4.35  detailing the projected annual expenses to the major 
  4.36  participating entity in performing the contract and the 
  5.1   projected annual revenues received by the entity from the health 
  5.2   maintenance organization for such performance.  The commissioner 
  5.3   shall disapprove any contract with a major participating entity 
  5.4   if the contract will result in an unreasonable expense under 
  5.5   section 62D.19.  The commissioner shall approve or disapprove a 
  5.6   contract within 30 days of filing.  
  5.7      Within 120 days of the anniversary of the implementation of 
  5.8   each contract, the health maintenance organization shall file a 
  5.9   document detailing the actual expenses incurred and reported by 
  5.10  the major participating entity in performing the contract in the 
  5.11  preceding year and the actual revenues received from the health 
  5.12  maintenance organization by the entity in payment for the 
  5.13  performance; 
  5.14     (h) a statement generally describing the health maintenance 
  5.15  organization, its health maintenance contracts and separate 
  5.16  health service contracts, facilities, and personnel, including a 
  5.17  statement describing the manner in which the applicant proposes 
  5.18  to provide enrollees with comprehensive health maintenance 
  5.19  services and separate health services; 
  5.20     (i) a copy of the form of each evidence of coverage to be 
  5.21  issued to the enrollees; 
  5.22     (j) a copy of the form of each individual or group health 
  5.23  maintenance contract and each separate health service contract 
  5.24  which is to be issued to enrollees or their representatives; 
  5.25     (k) financial statements showing the applicant's assets, 
  5.26  liabilities, and sources of financial support.  If the 
  5.27  applicant's financial affairs are audited by independent 
  5.28  certified public accountants, a copy of the applicant's most 
  5.29  recent certified financial statement may be deemed to satisfy 
  5.30  this requirement; 
  5.31     (l) a description of the proposed method of marketing the 
  5.32  plan, a schedule of proposed charges, and a financial plan which 
  5.33  includes a three-year projection of the expenses and income and 
  5.34  other sources of future capital; 
  5.35     (m) a statement reasonably describing the geographic area 
  5.36  or areas to be served and the type or types of enrollees to be 
  6.1   served; 
  6.2      (n) a description of the complaint procedures to be 
  6.3   utilized as required under section 62D.11; 
  6.4      (o) a description of the procedures and programs to be 
  6.5   implemented to meet the requirements of section 62D.04, 
  6.6   subdivision 1, clauses (b) and (c) and to monitor the quality of 
  6.7   health care provided to enrollees; 
  6.8      (p) a description of the mechanism by which enrollees will 
  6.9   be afforded an opportunity to participate in matters of policy 
  6.10  and operation under section 62D.06; 
  6.11     (q) a copy of any agreement between the health maintenance 
  6.12  organization and an insurer or nonprofit health service 
  6.13  corporation regarding reinsurance, stop-loss coverage, 
  6.14  insolvency coverage, or any other type of coverage for potential 
  6.15  costs of health services, as authorized in sections 62D.04, 
  6.16  subdivision 1, clause (f), 62D.05, subdivision 3, and 62D.13; 
  6.17     (r) a copy of the conflict of interest policy which applies 
  6.18  to all members of the board of directors and the principal 
  6.19  officers of the health maintenance organization, as described in 
  6.20  section 62D.04, subdivision 1, paragraph (g).  All currently 
  6.21  licensed health maintenance organizations shall also file a 
  6.22  conflict of interest policy with the commissioner within 60 days 
  6.23  after August 1, 1990, or at a later date if approved by the 
  6.24  commissioner; 
  6.25     (s) a copy of the statement that describes the health 
  6.26  maintenance organization's prior authorization administrative 
  6.27  procedures; 
  6.28     (t) a copy of the agreement between the guaranteeing 
  6.29  organization and the health maintenance organization, as 
  6.30  described in section 62D.043, subdivision 6; and 
  6.31     (u) other information as the commissioner of health may 
  6.32  reasonably require to be provided. 
  6.33     Sec. 6.  Minnesota Statutes 1998, section 62D.04, 
  6.34  subdivision 1, is amended to read: 
  6.35     Subdivision 1.  Upon receipt of an application for a 
  6.36  certificate of authority, the commissioner of health shall 
  7.1   determine whether the applicant for a certificate of authority 
  7.2   has: 
  7.3      (a) demonstrated the willingness and potential ability to 
  7.4   assure that health care services will be provided in such a 
  7.5   manner as to enhance and assure both the availability and 
  7.6   accessibility of adequate personnel and facilities; 
  7.7      (b) arrangements for an ongoing evaluation of the quality 
  7.8   of health care; 
  7.9      (c) a procedure to develop, compile, evaluate, and report 
  7.10  statistics relating to the cost of its operations, the pattern 
  7.11  of utilization of its services, the quality, availability and 
  7.12  accessibility of its services, and such other matters as may be 
  7.13  reasonably required by regulation of the commissioner of health; 
  7.14     (d) reasonable provisions for emergency and out of area 
  7.15  health care services; 
  7.16     (e) demonstrated that it is financially responsible and may 
  7.17  reasonably be expected to meet its obligations to enrollees and 
  7.18  prospective enrollees.  In making this determination, the 
  7.19  commissioner of health shall require the amounts of net worth 
  7.20  and working capital required in section 62D.042, the deposit 
  7.21  required in section 62D.041, and in addition shall consider: 
  7.22     (1) the financial soundness of its arrangements for health 
  7.23  care services and the proposed schedule of charges used in 
  7.24  connection therewith; 
  7.25     (2) arrangements which will guarantee for a reasonable 
  7.26  period of time the continued availability or payment of the cost 
  7.27  of health care services in the event of discontinuance of the 
  7.28  health maintenance organization; and 
  7.29     (3) agreements with providers for the provision of health 
  7.30  care services; 
  7.31     (f) demonstrated that it will assume full financial risk on 
  7.32  a prospective basis for the provision of comprehensive health 
  7.33  maintenance services, including hospital care; provided, 
  7.34  however, that the requirement in this paragraph shall not 
  7.35  prohibit the following: 
  7.36     (1) a health maintenance organization from obtaining 
  8.1   insurance or making other arrangements (i) for the cost of 
  8.2   providing to any enrollee comprehensive health maintenance 
  8.3   services, the aggregate value of which exceeds $5,000 in any 
  8.4   year, (ii) for the cost of providing comprehensive health care 
  8.5   services to its members on a nonelective emergency basis, or 
  8.6   while they are outside the area served by the organization, or 
  8.7   (iii) for not more than 95 percent of the amount by which the 
  8.8   health maintenance organization's costs for any of its fiscal 
  8.9   years exceed 105 percent of its income for such fiscal years; 
  8.10  and 
  8.11     (2) a health maintenance organization from having a 
  8.12  provision in a group health maintenance contract allowing an 
  8.13  adjustment of premiums paid based upon the actual health 
  8.14  services utilization of the enrollees covered under the 
  8.15  contract, except that at no time during the life of the contract 
  8.16  shall the contract holder fully self-insure the financial risk 
  8.17  of health care services delivered under the contract.  Risk 
  8.18  sharing arrangements shall be subject to the requirements of 
  8.19  sections 62D.01 to 62D.30; 
  8.20     (g) demonstrated that it has made provisions for and 
  8.21  adopted a conflict of interest policy applicable to all members 
  8.22  of the board of directors and the principal officers of the 
  8.23  health maintenance organization.  The conflict of interest 
  8.24  policy shall include the procedures described in section 
  8.25  317A.255, subdivisions 1 and 2.  However, the commissioner is 
  8.26  not precluded from finding that a particular transaction is an 
  8.27  unreasonable expense as described in section 62D.19 even if the 
  8.28  directors follow the required procedures; and 
  8.29     (h) otherwise met the requirements of sections 62D.01 to 
  8.30  62D.30. 
  8.31     Sec. 7.  Minnesota Statutes 1998, section 62D.04, 
  8.32  subdivision 2, is amended to read: 
  8.33     Subd. 2.  Within 90 days after the receipt of the 
  8.34  application for a certificate of authority, the commissioner of 
  8.35  health shall determine whether or not the applicant meets the 
  8.36  requirements of this section.  If the commissioner of health 
  9.1   determines that the applicant meets the requirements of sections 
  9.2   62D.01 to 62D.30, the commissioner shall issue a certificate of 
  9.3   authority to the applicant.  If the commissioner of health 
  9.4   determines that the applicant is not qualified, the commissioner 
  9.5   shall so notify the applicant and shall specify the reason or 
  9.6   reasons for such disqualification. 
  9.7      Sec. 8.  Minnesota Statutes 1998, section 62D.05, 
  9.8   subdivision 6, is amended to read: 
  9.9      Subd. 6.  [SUPPLEMENTAL BENEFITS.] (a) A health maintenance 
  9.10  organization may, as a supplemental benefit, provide coverage to 
  9.11  its enrollees for health care services and supplies received 
  9.12  from providers who are not employed by, under contract with, or 
  9.13  otherwise affiliated with the health maintenance organization.  
  9.14  Supplemental benefits may be provided if the following 
  9.15  conditions are met:  
  9.16     (1) a health maintenance organization desiring to offer 
  9.17  supplemental benefits must at all times comply with the 
  9.18  requirements of sections 62D.041 and 62D.042; 
  9.19     (2) a health maintenance organization offering supplemental 
  9.20  benefits must maintain an additional surplus in the first year 
  9.21  supplemental benefits are offered equal to the lesser of 
  9.22  $500,000 or 33 percent of the supplemental benefit expenses.  At 
  9.23  the end of the second year supplemental benefits are offered, 
  9.24  the health maintenance organization must maintain an additional 
  9.25  surplus equal to the lesser of $1,000,000 or 33 percent of the 
  9.26  supplemental benefit expenses.  At the end of the third year 
  9.27  benefits are offered and every year after that, the health 
  9.28  maintenance organization must maintain an additional surplus 
  9.29  equal to the greater of $1,000,000 or 33 percent of the 
  9.30  supplemental benefit expenses.  When in the judgment of the 
  9.31  commissioner the health maintenance organization's surplus is 
  9.32  inadequate, the commissioner may require the health maintenance 
  9.33  organization to maintain additional surplus; 
  9.34     (3) claims relating to supplemental benefits must be 
  9.35  processed in accordance with the requirements of section 
  9.36  72A.201; and 
 10.1      (4) in marketing supplemental benefits, the health 
 10.2   maintenance organization shall fully disclose and describe to 
 10.3   enrollees and potential enrollees the nature and extent of the 
 10.4   supplemental coverage, and any claims filing and other 
 10.5   administrative responsibilities in regard to supplemental 
 10.6   benefits.  
 10.7      (b) The commissioner may, pursuant to chapter 14, adopt, 
 10.8   enforce, and administer rules relating to this subdivision, 
 10.9   including:  rules insuring that these benefits are supplementary 
 10.10  and not substitutes for comprehensive health maintenance 
 10.11  services by addressing percentage of out-of-plan coverage; rules 
 10.12  relating to the establishment of necessary financial reserves; 
 10.13  rules relating to marketing practices; and other rules necessary 
 10.14  for the effective and efficient administration of this 
 10.15  subdivision.  The commissioner, in adopting rules, shall give 
 10.16  consideration to existing laws and rules administered and 
 10.17  enforced by the department of commerce commissioner relating to 
 10.18  health insurance plans.  
 10.19     Sec. 9.  Minnesota Statutes 1998, section 62D.06, 
 10.20  subdivision 2, is amended to read: 
 10.21     Subd. 2.  The governing body shall establish a mechanism to 
 10.22  afford the enrollees an opportunity to express their opinions in 
 10.23  matters of policy and operation through the establishment of 
 10.24  advisory panels, by the use of advisory referenda on major 
 10.25  policy decisions, or through the use of other mechanisms as may 
 10.26  be prescribed or permitted by the commissioner of health. 
 10.27     Sec. 10.  Minnesota Statutes 1998, section 62D.07, 
 10.28  subdivision 2, is amended to read: 
 10.29     Subd. 2.  No evidence of coverage or contract, or amendment 
 10.30  thereto shall be issued or delivered to any person in this state 
 10.31  until a copy of the form of the evidence of coverage or contract 
 10.32  or amendment thereto has been filed with the commissioner of 
 10.33  health pursuant to section 62D.03 or 62D.08. 
 10.34     Sec. 11.  Minnesota Statutes 1998, section 62D.07, 
 10.35  subdivision 3, is amended to read: 
 10.36     Subd. 3.  Contracts and evidences of coverage shall contain:
 11.1      (a) No provisions or statements which are unjust, unfair, 
 11.2   inequitable, misleading, deceptive, or which are untrue, 
 11.3   misleading, or deceptive as defined in section 62D.12, 
 11.4   subdivision 1; 
 11.5      (b) A clear, concise and complete statement of: 
 11.6      (1) the health care services and the insurance or other 
 11.7   benefits, if any, to which the enrollee is entitled under the 
 11.8   health maintenance contract; 
 11.9      (2) any exclusions or limitations on the services, kind of 
 11.10  services, benefits, or kind of benefits, to be provided, 
 11.11  including any deductible or copayment feature and requirements 
 11.12  for referrals, prior authorizations, and second opinions; 
 11.13     (3) where and in what manner information is available as to 
 11.14  how services, including emergency and out of area services, may 
 11.15  be obtained; 
 11.16     (4) the total amount of payment and copayment, if any, for 
 11.17  health care services and the indemnity or service benefits, if 
 11.18  any, which the enrollee is obligated to pay with respect to 
 11.19  individual contracts, or an indication whether the plan is 
 11.20  contributory or noncontributory with respect to group 
 11.21  certificates; and 
 11.22     (5) a description of the health maintenance organization's 
 11.23  method for resolving enrollee complaints and a statement 
 11.24  identifying the commissioner as an external source with whom 
 11.25  complaints may be registered; and 
 11.26     (c) On the cover page of the evidence of coverage and 
 11.27  contract, a clear and complete statement of enrollees' rights.  
 11.28  The statement must be in bold print and captioned "Important 
 11.29  Enrollee Information and Enrollee Bill of Rights" and must 
 11.30  include but not be limited to the following provisions in the 
 11.31  following language or in substantially similar language approved 
 11.32  in advance by the commissioner, except that paragraph (8) does 
 11.33  not apply to prepaid health plans providing coverage for 
 11.34  programs administered by the commissioner of human services:  
 11.35                        ENROLLEE INFORMATION 
 11.36     (1) COVERED SERVICES:  Services provided by (name of health 
 12.1   maintenance organization) will be covered only if services are 
 12.2   provided by participating (name of health maintenance 
 12.3   organization) providers or authorized by (name of health 
 12.4   maintenance organization).  Your contract fully defines what 
 12.5   services are covered and describes procedures you must follow to 
 12.6   obtain coverage. 
 12.7      (2) PROVIDERS:  Enrolling in (name of health maintenance 
 12.8   organization) does not guarantee services by a particular 
 12.9   provider on the list of providers.  When a provider is no longer 
 12.10  part of (name of health maintenance organization), you must 
 12.11  choose among remaining (name of the health maintenance 
 12.12  organization) providers. 
 12.13     (3) REFERRALS:  Certain services are covered only upon 
 12.14  referral.  See section (section number) of your contract for 
 12.15  referral requirements.  All referrals to non-(name of health 
 12.16  maintenance organization) providers and certain types of health 
 12.17  care providers must be authorized by (name of health maintenance 
 12.18  organization). 
 12.19     (4) EMERGENCY SERVICES:  Emergency services from providers 
 12.20  who are not affiliated with (name of health maintenance 
 12.21  organization) will be covered only if proper procedures are 
 12.22  followed.  Your contract explains the procedures and benefits 
 12.23  associated with emergency care from (name of health maintenance 
 12.24  organization) and non-(name of health maintenance organization) 
 12.25  providers. 
 12.26     (5) EXCLUSIONS:  Certain services or medical supplies are 
 12.27  not covered.  You should read the contract for a detailed 
 12.28  explanation of all exclusions. 
 12.29     (6) CONTINUATION:  You may convert to an individual health 
 12.30  maintenance organization contract or continue coverage under 
 12.31  certain circumstances.  These continuation and conversion rights 
 12.32  are explained fully in your contract. 
 12.33     (7) CANCELLATION:  Your coverage may be canceled by you or 
 12.34  (name of health maintenance organization) only under certain 
 12.35  conditions.  Your contract describes all reasons for 
 12.36  cancellation of coverage. 
 13.1      (8) NEWBORN COVERAGE:  If your health plan provides for 
 13.2   dependent coverage, a newborn infant is covered from birth, but 
 13.3   only if services are provided by participating (name of health 
 13.4   maintenance organization) providers or authorized by (name of 
 13.5   health maintenance organization).  Certain services are covered 
 13.6   only upon referral.  (Name of health maintenance organization) 
 13.7   will not automatically know of the infant's birth or that you 
 13.8   would like coverage under your plan.  You should notify (name of 
 13.9   health maintenance organization) of the infant's birth and that 
 13.10  you would like coverage.  If your contract requires an 
 13.11  additional premium for each dependent, (name of health 
 13.12  maintenance organization) is entitled to all premiums due from 
 13.13  the time of the infant's birth until the time you notify (name 
 13.14  of health maintenance organization) of the birth.  (Name of 
 13.15  health maintenance organization) may withhold payment of any 
 13.16  health benefits for the newborn infant until any premiums you 
 13.17  owe are paid. 
 13.18     (9) PRESCRIPTION DRUGS AND MEDICAL EQUIPMENT:  Enrolling in 
 13.19  (name of health maintenance organization) does not guarantee 
 13.20  that any particular prescription drug will be available nor that 
 13.21  any particular piece of medical equipment will be available, 
 13.22  even if the drug or equipment is available at the start of the 
 13.23  contract year. 
 13.24                      ENROLLEE BILL OF RIGHTS 
 13.25     (1) Enrollees have the right to available and accessible 
 13.26  services including emergency services, as defined in your 
 13.27  contract, 24 hours a day and seven days a week; 
 13.28     (2) Enrollees have the right to be informed of health 
 13.29  problems, and to receive information regarding treatment 
 13.30  alternatives and risks which is sufficient to assure informed 
 13.31  choice; 
 13.32     (3) Enrollees have the right to refuse treatment, and the 
 13.33  right to privacy of medical and financial records maintained by 
 13.34  the health maintenance organization and its health care 
 13.35  providers, in accordance with existing law; 
 13.36     (4) Enrollees have the right to file a complaint with the 
 14.1   health maintenance organization and the commissioner of health 
 14.2   commerce and the right to initiate a legal proceeding when 
 14.3   experiencing a problem with the health maintenance organization 
 14.4   or its health care providers; 
 14.5      (5) Enrollees have the right to a grace period of 31 days 
 14.6   for the payment of each premium for an individual health 
 14.7   maintenance contract falling due after the first premium during 
 14.8   which period the contract shall continue in force; 
 14.9      (6) Medicare enrollees have the right to voluntarily 
 14.10  disenroll from the health maintenance organization and the right 
 14.11  not to be requested or encouraged to disenroll except in 
 14.12  circumstances specified in federal law; and 
 14.13     (7) Medicare enrollees have the right to a clear 
 14.14  description of nursing home and home care benefits covered by 
 14.15  the health maintenance organization. 
 14.16     Sec. 12.  Minnesota Statutes 1998, section 62D.07, 
 14.17  subdivision 10, is amended to read: 
 14.18     Subd. 10.  An individual health maintenance organization 
 14.19  contract and an evidence of coverage must contain a department 
 14.20  of health commerce telephone number that the enrollee can call 
 14.21  to register a complaint about a health maintenance organization. 
 14.22     Sec. 13.  Minnesota Statutes 1998, section 62D.08, 
 14.23  subdivision 1, is amended to read: 
 14.24     Subdivision 1.  A health maintenance organization shall, 
 14.25  unless otherwise provided for by rules adopted by the 
 14.26  commissioner of health, file notice with the commissioner of 
 14.27  health prior to any modification of the operations or documents 
 14.28  described in the information submitted under clauses (a), (b), 
 14.29  (e), (f), (g), (i), (j), (l), (m), (n), (o), (p), (q), (r), (s), 
 14.30  and (t) of section 62D.03, subdivision 4.  If the 
 14.31  commissioner of health does not disapprove of the filing within 
 14.32  60 days, it shall be deemed approved and may be implemented by 
 14.33  the health maintenance organization. 
 14.34     Sec. 14.  Minnesota Statutes 1998, section 62D.08, 
 14.35  subdivision 2, is amended to read: 
 14.36     Subd. 2.  Every health maintenance organization shall 
 15.1   annually, on or before April 1, file a verified report with the 
 15.2   commissioner of health covering the preceding calendar year.  
 15.3   However, utilization data required under subdivision 3, clause 
 15.4   (c), shall be filed on or before July 1. 
 15.5      Sec. 15.  Minnesota Statutes 1998, section 62D.08, 
 15.6   subdivision 3, is amended to read: 
 15.7      Subd. 3.  Such report shall be on forms prescribed by the 
 15.8   commissioner of health, and shall include: 
 15.9      (a) A financial statement of the organization, including 
 15.10  its balance sheet and receipts and disbursements for the 
 15.11  preceding year certified by an independent certified public 
 15.12  accountant, reflecting at least (1) all prepayment and other 
 15.13  payments received for health care services rendered, (2) 
 15.14  expenditures to all providers, by classes or groups of 
 15.15  providers, and insurance companies or nonprofit health service 
 15.16  plan corporations engaged to fulfill obligations arising out of 
 15.17  the health maintenance contract, (3) expenditures for capital 
 15.18  improvements, or additions thereto, including but not limited to 
 15.19  construction, renovation or purchase of facilities and capital 
 15.20  equipment, and (4) a supplementary statement of assets, 
 15.21  liabilities, premium revenue, and expenditures for risk sharing 
 15.22  business under section 62D.04, subdivision 1, on forms 
 15.23  prescribed by the commissioner; 
 15.24     (b) The number of new enrollees enrolled during the year, 
 15.25  the number of group enrollees and the number of individual 
 15.26  enrollees as of the end of the year and the number of enrollees 
 15.27  terminated during the year; 
 15.28     (c) A summary of information compiled pursuant to section 
 15.29  62D.04, subdivision 1, clause (c), in such form as may be 
 15.30  required by the commissioner of health; 
 15.31     (d) A report of the names and addresses of all persons set 
 15.32  forth in section 62D.03, subdivision 4, clause (c), who were 
 15.33  associated with the health maintenance organization or the major 
 15.34  participating entity during the preceding year, and the amount 
 15.35  of wages, expense reimbursements, or other payments to such 
 15.36  individuals for services to the health maintenance organization 
 16.1   or the major participating entity, as those services relate to 
 16.2   the health maintenance organization, including a full disclosure 
 16.3   of all financial arrangements during the preceding year required 
 16.4   to be disclosed pursuant to section 62D.03, subdivision 4, 
 16.5   clause (d); 
 16.6      (e) A separate report addressing health maintenance 
 16.7   contracts sold to individuals covered by Medicare, title XVIII 
 16.8   of the Social Security Act, as amended, including the 
 16.9   information required under section 62D.30, subdivision 6; and 
 16.10     (f) Such other information relating to the performance of 
 16.11  the health maintenance organization as is reasonably necessary 
 16.12  to enable the commissioner of health to carry out the duties 
 16.13  under sections 62D.01 to 62D.30. 
 16.14     Sec. 16.  Minnesota Statutes 1998, section 62D.08, 
 16.15  subdivision 4, is amended to read: 
 16.16     Subd. 4.  Any health maintenance organization which fails 
 16.17  to file a verified report with the commissioner on or before 
 16.18  April 1 of the year due shall be subject to the levy of a fine 
 16.19  up to $500 for each day the report is past due.  This failure 
 16.20  will serve as a basis for other disciplinary action against the 
 16.21  organization, including suspension or revocation, in accordance 
 16.22  with sections 62D.15 to 62D.17 and chapter 45.  The commissioner 
 16.23  may grant an extension of the reporting deadline upon good cause 
 16.24  shown by the health maintenance organization.  Any fine levied 
 16.25  or disciplinary action taken against the organization under this 
 16.26  subdivision is subject to the contested case and judicial review 
 16.27  provisions of sections 14.57 to 14.69.  
 16.28     Sec. 17.  Minnesota Statutes 1998, section 62D.08, 
 16.29  subdivision 5, is amended to read: 
 16.30     Subd. 5.  Every health maintenance organization shall 
 16.31  inform the commissioner of any change in the information 
 16.32  described in section 62D.03, subdivision 4, clause (e), 
 16.33  including any change in address, any modification of the 
 16.34  duration of any contract or agreement, and any addition to the 
 16.35  list of participating entities, within ten working days of the 
 16.36  notification of the change.  Any cancellation or discontinuance 
 17.1   of any contract or agreement listed in section 62D.03, 
 17.2   subdivision 4, clause (e), or listed subsequently in accordance 
 17.3   with this subdivision, shall be reported to the commissioner 120 
 17.4   days before the effective date.  When the health maintenance 
 17.5   organization terminates a provider for cause, death, disability, 
 17.6   or loss of license, the health maintenance organization must 
 17.7   notify the commissioner within three working days of the date 
 17.8   the health maintenance organization sends out or receives the 
 17.9   notice of cancellation, discontinuance, or termination.  Any 
 17.10  health maintenance organization which fails to notify the 
 17.11  commissioner within the time periods prescribed in this 
 17.12  subdivision shall be subject to the levy of a fine up to $200 
 17.13  per contract for each day the notice is past due, accruing up to 
 17.14  the date the organization notifies the commissioner of the 
 17.15  cancellation or discontinuance.  Any fine levied under this 
 17.16  subdivision is subject to the contested case and judicial review 
 17.17  provisions of chapter 14.  The levy of a fine does not preclude 
 17.18  the commissioner from using other penalties described in 
 17.19  sections 62D.15 to 62D.17 and chapter 45. 
 17.20     Sec. 18.  Minnesota Statutes 1998, section 62D.09, 
 17.21  subdivision 1, is amended to read: 
 17.22     Subdivision 1.  (a) Any written marketing materials which 
 17.23  may be directed toward potential enrollees and which include a 
 17.24  detailed description of benefits provided by the health 
 17.25  maintenance organization shall include a statement of enrollee 
 17.26  information and rights as described in section 62D.07, 
 17.27  subdivision 3, paragraphs (b) and (c).  Prior to any oral 
 17.28  marketing presentation, the agent marketing the plan must inform 
 17.29  the potential enrollees that any complaints concerning the 
 17.30  material presented should be directed to the health maintenance 
 17.31  organization, the commissioner of health, or, if applicable, the 
 17.32  employer. 
 17.33     (b) Detailed marketing materials must affirmatively 
 17.34  disclose all exclusions and limitations in the organization's 
 17.35  services or kinds of services offered to the contracting party, 
 17.36  including but not limited to the following types of exclusions 
 18.1   and limitations: 
 18.2      (1) health care services not provided; 
 18.3      (2) health care services requiring copayments or 
 18.4   deductibles paid by enrollees; 
 18.5      (3) the fact that access to health care services does not 
 18.6   guarantee access to a particular provider type; and 
 18.7      (4) health care services that are or may be provided only 
 18.8   by referral of a physician. 
 18.9      (c) No marketing materials may lead consumers to believe 
 18.10  that all health care needs will be covered.  All marketing 
 18.11  materials must alert consumers to possible uncovered expenses 
 18.12  with the following language in bold print:  "THIS HEALTH CARE 
 18.13  PLAN MAY NOT COVER ALL YOUR HEALTH CARE EXPENSES; READ YOUR 
 18.14  CONTRACT CAREFULLY TO DETERMINE WHICH EXPENSES ARE COVERED."  
 18.15  Immediately following the disclosure required under paragraph 
 18.16  (b), clause (3), consumers must be given a telephone number to 
 18.17  use to contact the health maintenance organization for specific 
 18.18  information about access to provider types. 
 18.19     (d) The disclosures required in paragraphs (b) and (c) are 
 18.20  not required on billboards or image, and name identification 
 18.21  advertisement. 
 18.22     Sec. 19.  Minnesota Statutes 1998, section 62D.09, 
 18.23  subdivision 8, is amended to read: 
 18.24     Subd. 8.  Each health maintenance organization shall issue 
 18.25  a membership card to its enrollees.  The membership card must: 
 18.26     (1) identify the health maintenance organization; 
 18.27     (2) include the name, address, and telephone number to call 
 18.28  if the enrollee has a complaint; 
 18.29     (3) include the telephone number to call or the instruction 
 18.30  on how to receive authorization for emergency care; and 
 18.31     (4) include one of the following: 
 18.32     (i) the telephone number to call to appeal to or file a 
 18.33  complaint with the commissioner of health; or 
 18.34     (ii) for persons enrolled under section 256B.69, 256D.03, 
 18.35  or 256L.12, the telephone number to call to file a complaint 
 18.36  with the ombudsperson designated by the commissioner of human 
 19.1   services under section 256B.69 and the address to appeal to the 
 19.2   commissioner of human services.  The ombudsperson shall annually 
 19.3   provide the commissioner of health with a summary of complaints 
 19.4   and actions taken. 
 19.5      Sec. 20.  Minnesota Statutes 1998, section 62D.10, 
 19.6   subdivision 4, is amended to read: 
 19.7      Subd. 4.  A health plan may apply to the commissioner of 
 19.8   health for a waiver of the requirements of this section or for 
 19.9   authorization to impose such underwriting restrictions upon open 
 19.10  enrollment as are necessary (a) to preserve its financial 
 19.11  stability, (b) to prevent excessive adverse selection by 
 19.12  prospective enrollees, or (c) to avoid unreasonably high or 
 19.13  unmarketable charges for enrollee coverage for health care 
 19.14  services.  The commissioner of health upon a showing of good 
 19.15  cause, shall approve or upon failure to show good cause shall 
 19.16  deny such application within 30 days of the receipt thereof from 
 19.17  the health plan.  The commissioner of health may, in accordance 
 19.18  with chapter 14, promulgate rules to implement this section. 
 19.19     Sec. 21.  Minnesota Statutes 1998, section 62D.11, 
 19.20  subdivision 2, is amended to read: 
 19.21     Subd. 2.  The health maintenance organization shall 
 19.22  maintain a record of each written complaint filed with it for 
 19.23  five years and the commissioner of health shall have access to 
 19.24  the records. 
 19.25     Sec. 22.  Minnesota Statutes 1998, section 62D.11, 
 19.26  subdivision 3, is amended to read: 
 19.27     Subd. 3.  [DENIAL OF COVERAGE.] Within a reasonable time 
 19.28  after receiving an enrollee's written or oral communication to 
 19.29  the health maintenance organization concerning a denial of 
 19.30  coverage or inadequacy of services, the health maintenance 
 19.31  organization shall provide the enrollee with a written statement 
 19.32  of the reason for the denial of coverage, and a statement 
 19.33  approved by the commissioner of health which explains the health 
 19.34  maintenance organization complaint procedures, and in the case 
 19.35  of Medicare enrollees, which also explains Medicare appeal 
 19.36  procedures. 
 20.1      Sec. 23.  Minnesota Statutes 1998, section 62D.12, 
 20.2   subdivision 1, is amended to read: 
 20.3      Subdivision 1.  No health maintenance organization or 
 20.4   representative thereof may cause or knowingly permit the use of 
 20.5   advertising or solicitation which is untrue or misleading, or 
 20.6   any form of evidence of coverage which is deceptive.  Each 
 20.7   health maintenance organization shall be subject to sections 
 20.8   72A.17 to 72A.32, relating to the regulation of trade practices, 
 20.9   except (a) to the extent that the nature of a health maintenance 
 20.10  organization renders such sections clearly inappropriate and (b) 
 20.11  that enforcement shall be by the commissioner of health and not 
 20.12  by the commissioner of commerce.  Every health maintenance 
 20.13  organization shall be subject to sections 8.31 and 325F.69. 
 20.14     Sec. 24.  Minnesota Statutes 1998, section 62D.12, 
 20.15  subdivision 2, is amended to read: 
 20.16     Subd. 2.  No health maintenance organization may cancel or 
 20.17  fail to renew the coverage of an enrollee except for (a) failure 
 20.18  to pay the charge for health care coverage; (b) termination of 
 20.19  the health care plan; (c) termination of the group plan; (d) 
 20.20  enrollee moving out of the area served, subject to section 
 20.21  62A.17, subdivisions 1 and 6, and section 62D.104; (e) enrollee 
 20.22  moving out of an eligible group, subject to section 62A.17, 
 20.23  subdivisions 1 and 6, and section 62D.104; (f) failure to make 
 20.24  copayments required by the health care plan; or (g) other 
 20.25  reasons established in rules promulgated by the commissioner of 
 20.26  health. 
 20.27     Sec. 25.  Minnesota Statutes 1998, section 62D.12, 
 20.28  subdivision 9, is amended to read: 
 20.29     Subd. 9.  All net earnings of the health maintenance 
 20.30  organization shall be devoted to the nonprofit purposes of the 
 20.31  health maintenance organization in providing comprehensive 
 20.32  health care.  No health maintenance organization shall provide 
 20.33  for the payment, whether directly or indirectly, of any part of 
 20.34  its net earnings, to any person as a dividend or rebate; 
 20.35  provided, however, that health maintenance organizations may 
 20.36  make payments to providers or other persons based upon the 
 21.1   efficient provision of services or as incentives to provide 
 21.2   quality care.  The commissioner of health shall, pursuant to 
 21.3   sections 62D.01 to 62D.30, revoke the certificate of authority 
 21.4   of any health maintenance organization in violation of this 
 21.5   subdivision. 
 21.6      Sec. 26.  Minnesota Statutes 1998, section 62D.121, 
 21.7   subdivision 3a, is amended to read: 
 21.8      Subd. 3a.  If the replacement coverage is health 
 21.9   maintenance organization coverage, as explained in subdivisions 
 21.10  2 and 2a, the fee shall not exceed 125 percent of the cost of 
 21.11  the average fee charged by health maintenance organizations for 
 21.12  a similar health plan.  The commissioner of health will shall 
 21.13  determine the average cost of the plan on the basis of 
 21.14  information provided annually by the health maintenance 
 21.15  organizations concerning the rates charged by the health 
 21.16  maintenance organizations for the plans offered.  Fees or 
 21.17  premiums charged under this section must be actuarially 
 21.18  justified. 
 21.19     Sec. 27.  Minnesota Statutes 1998, section 62D.14, 
 21.20  subdivision 1, is amended to read: 
 21.21     Subdivision 1.  The commissioner of health may make an 
 21.22  examination of the affairs of any health maintenance 
 21.23  organization and its contracts, agreements, or other 
 21.24  arrangements with any participating entity as often as the 
 21.25  commissioner of health deems necessary for the protection of the 
 21.26  interests of the people of this state, but not less frequently 
 21.27  than once every three years.  Examinations of participating 
 21.28  entities pursuant to this subdivision shall be limited to their 
 21.29  dealings with the health maintenance organization and its 
 21.30  enrollees, except that examinations of major participating 
 21.31  entities may include inspection of the entity's financial 
 21.32  statements kept in the ordinary course of business.  The 
 21.33  commissioner may require major participating entities to submit 
 21.34  the financial statements directly to the commissioner.  
 21.35  Financial statements of major participating entities are subject 
 21.36  to the provisions of section 13.37, subdivision 1, clause (b), 
 22.1   upon request of the major participating entity or the health 
 22.2   maintenance organization with which it contracts. 
 22.3      Sec. 28.  Minnesota Statutes 1998, section 62D.14, 
 22.4   subdivision 3, is amended to read: 
 22.5      Subd. 3.  In order to accomplish the duties under this 
 22.6   section with respect to the dealings of the participating 
 22.7   entities with the health maintenance organization, the 
 22.8   commissioner of health shall have has the right to: 
 22.9      (a) inspect or otherwise evaluate the quality, 
 22.10  appropriateness, and timeliness of services performed; 
 22.11     (b) audit and inspect any books and records of a health 
 22.12  maintenance organization and a participating entity which 
 22.13  pertain to services performed and determinations of amounts 
 22.14  payable under such contract; 
 22.15     (c) require persons or organizations under examination to 
 22.16  be deposed and to answer interrogatories, regardless of whether 
 22.17  an administrative hearing or other civil proceeding has been or 
 22.18  will be initiated; and 
 22.19     (d) employ site visits, public hearings, or any other 
 22.20  procedures considered appropriate to obtain the information 
 22.21  necessary to determine the issues.  
 22.22     Sec. 29.  Minnesota Statutes 1998, section 62D.14, 
 22.23  subdivision 5, is amended to read: 
 22.24     Subd. 5.  The commissioner of health shall have has the 
 22.25  power to administer oaths to and examine witnesses, and to issue 
 22.26  subpoenas. 
 22.27     Sec. 30.  Minnesota Statutes 1998, section 62D.14, 
 22.28  subdivision 6, is amended to read: 
 22.29     Subd. 6.  Reasonable expenses of examinations under this 
 22.30  section shall be assessed by the commissioner of health against 
 22.31  the organization being examined, and shall be remitted to the 
 22.32  commissioner of health for deposit in the general fund of the 
 22.33  state treasury. 
 22.34     Sec. 31.  Minnesota Statutes 1998, section 62D.15, 
 22.35  subdivision 1, is amended to read: 
 22.36     Subdivision 1.  The commissioner of health may suspend or 
 23.1   revoke any certificate of authority issued to a health 
 23.2   maintenance organization under sections 62D.01 to 62D.30 if the 
 23.3   commissioner finds that: 
 23.4      (a) The health maintenance organization is operating 
 23.5   significantly in contravention of its basic organizational 
 23.6   document, its health maintenance contract, or in a manner 
 23.7   contrary to that described in and reasonably inferred from any 
 23.8   other information submitted under section 62D.03, unless 
 23.9   amendments to such submissions have been filed with and approved 
 23.10  by the commissioner of health; 
 23.11     (b) The health maintenance organization issues evidences of 
 23.12  coverage which do not comply with the requirements of section 
 23.13  62D.07; 
 23.14     (c) The health maintenance organization is unable to 
 23.15  fulfill its obligations to furnish comprehensive health 
 23.16  maintenance services as required under its health maintenance 
 23.17  contract; 
 23.18     (d) The health maintenance organization is no longer 
 23.19  financially responsible and may reasonably be expected to be 
 23.20  unable to meet its obligations to enrollees or prospective 
 23.21  enrollees; 
 23.22     (e) The health maintenance organization has failed to 
 23.23  implement a mechanism affording the enrollees an opportunity to 
 23.24  participate in matters of policy and operation under section 
 23.25  62D.06; 
 23.26     (f) The health maintenance organization has failed to 
 23.27  implement the complaint system required by section 62D.11 in a 
 23.28  manner designed to reasonably resolve valid complaints; 
 23.29     (g) The health maintenance organization, or any person 
 23.30  acting with its sanction, has advertised or merchandised its 
 23.31  services in an untrue, misrepresentative, misleading, deceptive, 
 23.32  or unfair manner; 
 23.33     (h) The continued operation of the health maintenance 
 23.34  organization would be hazardous to its enrollees; or 
 23.35     (i) The health maintenance organization has otherwise 
 23.36  failed to substantially comply with sections 62D.01 to 62D.30 or 
 24.1   with any other statute or administrative rule applicable to 
 24.2   health maintenance organizations, or has submitted false 
 24.3   information in any report required hereunder. 
 24.4      Sec. 32.  Minnesota Statutes 1998, section 62D.15, 
 24.5   subdivision 4, is amended to read: 
 24.6      Subd. 4.  When the certificate of authority of a health 
 24.7   maintenance organization is revoked, the organization shall 
 24.8   proceed, immediately following the effective date of the order 
 24.9   of revocation, to wind up its affairs, and shall conduct no 
 24.10  further business except as may be essential to the orderly 
 24.11  conclusion of the affairs of the organization. It shall engage 
 24.12  in no further advertising or solicitation whatsoever.  The 
 24.13  commissioner of health may, by written order, permit further 
 24.14  operation of the organization as the commissioner may find to be 
 24.15  in the best interest of enrollees, to the end that enrollees 
 24.16  will be afforded the greatest practical opportunity to obtain 
 24.17  continuing health care coverage. 
 24.18     Sec. 33.  Minnesota Statutes 1998, section 62D.16, 
 24.19  subdivision 1, is amended to read: 
 24.20     Subdivision 1.  When the commissioner of health has cause 
 24.21  to believe that grounds for the denial, suspension or revocation 
 24.22  of a certificate of authority exists, the commissioner shall 
 24.23  notify the health maintenance organization in writing 
 24.24  specifically stating the grounds for denial, suspension or 
 24.25  revocation and fixing a time of at least 20 days thereafter for 
 24.26  a hearing on the matter, except in summary proceedings as 
 24.27  provided in section 62D.18. 
 24.28     Sec. 34.  Minnesota Statutes 1998, section 62D.16, 
 24.29  subdivision 2, is amended to read: 
 24.30     Subd. 2.  After such hearing, or upon the failure of the 
 24.31  health maintenance organization to appear at the hearing, the 
 24.32  commissioner of health shall take action as is deemed advisable 
 24.33  and shall issue written findings which shall be mailed to the 
 24.34  health maintenance organization.  The action of the commissioner 
 24.35  of health shall be subject to judicial review pursuant to 
 24.36  chapter 14. 
 25.1      Sec. 35.  Minnesota Statutes 1998, section 62D.17, 
 25.2   subdivision 1, is amended to read: 
 25.3      Subdivision 1.  The commissioner of health may, for any 
 25.4   violation of statute or rule applicable to a health maintenance 
 25.5   organization, or in lieu of suspension or revocation of a 
 25.6   certificate of authority under section 62D.15, levy an 
 25.7   administrative penalty in an amount up to $25,000 for each 
 25.8   violation.  In the case of contracts or agreements made pursuant 
 25.9   to section 62D.05, subdivisions 2 to 4, each contract or 
 25.10  agreement entered into or implemented in a manner which violates 
 25.11  sections 62D.01 to 62D.30 shall be considered a separate 
 25.12  violation.  In determining the level of an administrative 
 25.13  penalty, the commissioner shall consider the following factors: 
 25.14     (1) the number of enrollees affected by the violation; 
 25.15     (2) the effect of the violation on enrollees' health and 
 25.16  access to health services; 
 25.17     (3) if only one enrollee is affected, the effect of the 
 25.18  violation on that enrollee's health; 
 25.19     (4) whether the violation is an isolated incident or part 
 25.20  of a pattern of violations; and 
 25.21     (5) the economic benefits derived by the health maintenance 
 25.22  organization or a participating provider by virtue of the 
 25.23  violation. 
 25.24     Reasonable notice in writing to the health maintenance 
 25.25  organization shall be given of the intent to levy the penalty 
 25.26  and the reasons therefor, and the health maintenance 
 25.27  organization may have 15 days within which to file a written 
 25.28  request for an administrative hearing and review of the 
 25.29  commissioner of health's commissioner's determination.  Such 
 25.30  administrative hearing shall be subject to judicial review 
 25.31  pursuant to chapter 14. 
 25.32     Sec. 36.  Minnesota Statutes 1998, section 62D.17, 
 25.33  subdivision 3, is amended to read: 
 25.34     Subd. 3.  (a) If the commissioner of health shall, for any 
 25.35  reason, have cause to believe that any violation of sections 
 25.36  62D.01 to 62D.30 has occurred or is threatened, the commissioner 
 26.1   of health may, before commencing action under sections 62D.15 
 26.2   and 62D.16, and subdivision 1, give notice to the health 
 26.3   maintenance organization and to the representatives, or other 
 26.4   persons who appear to be involved in such suspected violation, 
 26.5   to arrange a voluntary conference with the alleged violators or 
 26.6   their authorized representatives for the purpose of attempting 
 26.7   to ascertain the facts relating to such suspected violation and, 
 26.8   in the event it appears that any violation has occurred or is 
 26.9   threatened, to arrive at an adequate and effective means of 
 26.10  correcting or preventing such violation. 
 26.11     (b) Proceedings under this subdivision shall not be 
 26.12  governed by any formal procedural requirements, and may be 
 26.13  conducted in such manner as the commissioner of health may deem 
 26.14  appropriate under the circumstances. 
 26.15     Sec. 37.  Minnesota Statutes 1998, section 62D.17, 
 26.16  subdivision 4, is amended to read: 
 26.17     Subd. 4.  (a) The commissioner of health may issue an order 
 26.18  directing a health maintenance organization or a representative 
 26.19  of a health maintenance organization to cease and desist from 
 26.20  engaging in any act or practice in violation of the provisions 
 26.21  of sections 62D.01 to 62D.30. 
 26.22     (1) The cease and desist order may direct a health 
 26.23  maintenance organization to pay for or provide a service when 
 26.24  that service is required by statute or rule to be provided. 
 26.25     (2) The commissioner may issue a cease and desist order 
 26.26  directing may direct a health maintenance organization to pay 
 26.27  for a service that is required by statute or rule to be 
 26.28  provided, only if there is a demonstrable and irreparable harm 
 26.29  to the public or an enrollee.  
 26.30     (3) If the cease and desist order involves a dispute over 
 26.31  the medical necessity of a procedure based on its experimental 
 26.32  nature, the commissioner may issue a cease and desist order only 
 26.33  if the following conditions are met:  
 26.34     (i) the commissioner has consulted with appropriate and 
 26.35  identified experts; 
 26.36     (ii) the commissioner has reviewed relevant scientific and 
 27.1   medical literature; and 
 27.2      (iii) the commissioner has considered all other relevant 
 27.3   factors including whether final approval of the technology or 
 27.4   procedure has been granted by the appropriate government agency; 
 27.5   the availability of scientific evidence concerning the effect of 
 27.6   the technology or procedure on health outcomes; the availability 
 27.7   of scientific evidence that the technology or procedure is as 
 27.8   beneficial as established alternatives; and the availability of 
 27.9   evidence of benefit or improvement without the technology or 
 27.10  procedure. 
 27.11     (b) Within 20 days after service of the order to cease and 
 27.12  desist, the respondent may request a hearing on the question of 
 27.13  whether acts or practices in violation of sections 62D.01 to 
 27.14  62D.30 have occurred.  Such hearings shall be subject to 
 27.15  judicial review as provided by chapter 14. 
 27.16     If the acts or practices involve violation of the reporting 
 27.17  requirements of section 62D.08, or if the commissioner has 
 27.18  ordered the rehabilitation, liquidation, or conservation of the 
 27.19  health maintenance organization in accordance with section 
 27.20  62D.18, the health maintenance organization may request an 
 27.21  expedited hearing on the matter.  The hearing shall be held 
 27.22  within 15 days of the request.  Within ten days thereafter, an 
 27.23  administrative law judge shall issue a recommendation on the 
 27.24  matter.  The commissioner shall make a final determination on 
 27.25  the matter within ten days of receipt of the administrative law 
 27.26  judge's recommendation.  
 27.27     When a request for a stay accompanies the hearing request, 
 27.28  the matter shall be referred to the office of administrative 
 27.29  hearings within three working days of receipt of the request. 
 27.30  Within ten days thereafter, an administrative law judge shall 
 27.31  issue a recommendation to grant or deny the stay.  The 
 27.32  commissioner shall grant or deny the stay within five days of 
 27.33  receipt of the administrative law judge's recommendation. 
 27.34     To the extent the acts or practices alleged do not involve 
 27.35  (1) violations of section 62D.08; (2) violations which may 
 27.36  result in the financial insolvency of the health maintenance 
 28.1   organization; (3) violations which threaten the life and health 
 28.2   of enrollees; (4) violations which affect whole classes of 
 28.3   enrollees; or (5) violations of benefits or service requirements 
 28.4   mandated by law; if a timely request for a hearing is made, the 
 28.5   cease and desist order shall be stayed for a period of 90 days 
 28.6   from the date the hearing is requested or until a final 
 28.7   determination is made on the order, whichever is earlier.  
 28.8   During this stay, the respondent may show cause why the order 
 28.9   should not become effective upon the expiration of the stay.  
 28.10  Arguments on this issue shall be made through briefs filed with 
 28.11  the administrative law judge no later than ten days prior to the 
 28.12  expiration of the stay.  
 28.13     Sec. 38.  Minnesota Statutes 1998, section 62D.17, 
 28.14  subdivision 5, is amended to read: 
 28.15     Subd. 5.  In the event of noncompliance with a cease and 
 28.16  desist order issued pursuant to subdivision 4, the commissioner 
 28.17  of health may institute a proceeding to obtain injunctive relief 
 28.18  or other appropriate relief in Ramsey county district court. 
 28.19     Sec. 39.  Minnesota Statutes 1998, section 62D.18, 
 28.20  subdivision 1, is amended to read: 
 28.21     Subdivision 1.  [COMMISSIONER OF HEALTH; COURT ORDER.] The 
 28.22  commissioner of health may apply by verified petition to the 
 28.23  district court of Ramsey county or the county in which the 
 28.24  principal office of the health maintenance organization is 
 28.25  located for an order directing the commissioner of health to 
 28.26  rehabilitate or liquidate a health maintenance organization.  
 28.27  The rehabilitation or liquidation of a health maintenance 
 28.28  organization shall be conducted under the supervision of the 
 28.29  commissioner of health under the procedures, and with the powers 
 28.30  granted to a rehabilitator or liquidator, in chapter 60B, except 
 28.31  to the extent that the nature of health maintenance 
 28.32  organizations renders the procedures or powers clearly 
 28.33  inappropriate and as provided in this subdivision or in chapter 
 28.34  60B.  A health maintenance organization shall be considered an 
 28.35  insurance company for the purposes of rehabilitation or 
 28.36  liquidation as provided in subdivisions 4, 6, and 7. 
 29.1      Sec. 40.  Minnesota Statutes 1998, section 62D.18, 
 29.2   subdivision 7, is amended to read: 
 29.3      Subd. 7.  [EXAMINATION ACCOUNT.] The commissioner of health 
 29.4   shall assess against a health maintenance organization not yet 
 29.5   in rehabilitation or liquidation a fee sufficient to cover the 
 29.6   costs of a special examination.  The fee must be deposited in an 
 29.7   examination account.  Money in the account is appropriated to 
 29.8   the commissioner of health to pay for the examinations.  If the 
 29.9   money in the account is insufficient to pay the initial costs of 
 29.10  examinations, the commissioner may use other money appropriated 
 29.11  to the commissioner, provided the other appropriation is 
 29.12  reimbursed from the examination account when it contains 
 29.13  sufficient money.  Money from the examination account must be 
 29.14  used to pay per diem salaries and expenses of special examiners, 
 29.15  including meals, lodging, laundry, transportation, and mileage.  
 29.16  The salary of regular employees of the health commerce 
 29.17  department must not be paid out of the account. 
 29.18     Sec. 41.  Minnesota Statutes 1998, section 62D.19, is 
 29.19  amended to read: 
 29.20     62D.19 [UNREASONABLE EXPENSES.] 
 29.21     No health maintenance organization shall incur or pay for 
 29.22  any expense of any nature which is unreasonably high in relation 
 29.23  to the value of the service or goods provided.  The commissioner 
 29.24  of health shall implement and enforce this section by rules 
 29.25  adopted under this section. 
 29.26     In an effort to achieve the stated purposes of sections 
 29.27  62D.01 to 62D.30; in order to safeguard the underlying nonprofit 
 29.28  status of health maintenance organizations; and to ensure that 
 29.29  the payment of health maintenance organization money to major 
 29.30  participating entities results in a corresponding benefit to the 
 29.31  health maintenance organization and its enrollees, when 
 29.32  determining whether an organization has incurred an unreasonable 
 29.33  expense in relation to a major participating entity, due 
 29.34  consideration shall be given to, in addition to any other 
 29.35  appropriate factors, whether the officers and trustees of the 
 29.36  health maintenance organization have acted with good faith and 
 30.1   in the best interests of the health maintenance organization in 
 30.2   entering into, and performing under, a contract under which the 
 30.3   health maintenance organization has incurred an expense.  The 
 30.4   commissioner has standing to sue, on behalf of a health 
 30.5   maintenance organization, officers or trustees of the health 
 30.6   maintenance organization who have breached their fiduciary duty 
 30.7   in entering into and performing such contracts. 
 30.8      Sec. 42.  Minnesota Statutes 1998, section 62D.20, 
 30.9   subdivision 1, is amended to read: 
 30.10     Subdivision 1.  [RULEMAKING.] The commissioner of health 
 30.11  may, pursuant to chapter 14, promulgate such reasonable rules as 
 30.12  are necessary or proper to carry out the provisions of sections 
 30.13  62D.01 to 62D.30.  Included among such rules shall be those 
 30.14  which provide minimum requirements for the provision of 
 30.15  comprehensive health maintenance services, as defined in section 
 30.16  62D.02, subdivision 7, and reasonable exclusions therefrom.  
 30.17  Nothing in such rules shall force or require a health 
 30.18  maintenance organization to provide elective, induced abortions, 
 30.19  except as medically necessary to prevent the death of the 
 30.20  mother, whether performed in a hospital, other abortion 
 30.21  facility, or the office of a physician; the rules shall provide 
 30.22  every health maintenance organization the option of excluding or 
 30.23  including elective, induced abortions, except as medically 
 30.24  necessary to prevent the death of the mother, as part of its 
 30.25  comprehensive health maintenance services.  
 30.26     Sec. 43.  Minnesota Statutes 1998, section 62D.21, is 
 30.27  amended to read: 
 30.28     62D.21 [FEES.] 
 30.29     Every health maintenance organization subject to sections 
 30.30  62D.01 to 62D.30 shall pay to the commissioner of health fees as 
 30.31  prescribed by the commissioner of health pursuant to section 
 30.32  144.122 for the following: 
 30.33     (a) Filing an application for a certificate of authority, 
 30.34     (b) Filing an amendment to a certificate of authority, 
 30.35     (c) Filing each annual report, and 
 30.36     (d) Other filings, as specified by rule. 
 31.1      Sec. 44.  Minnesota Statutes 1998, section 62D.211, is 
 31.2   amended to read: 
 31.3      62D.211 [RENEWAL FEE.] 
 31.4      Each health maintenance organization subject to sections 
 31.5   62D.01 to 62D.30 shall submit to the commissioner of health each 
 31.6   year before June 15 a certificate of authority renewal fee in 
 31.7   the amount of $10,000 each plus 20 cents per person enrolled in 
 31.8   the health maintenance organization on December 31 of the 
 31.9   preceding year.  The commissioner may adjust the renewal fee in 
 31.10  rule under the provisions of chapter 14. 
 31.11     Sec. 45.  Minnesota Statutes 1998, section 62D.22, 
 31.12  subdivision 4, is amended to read: 
 31.13     Subd. 4.  To the extent that it furthers the purposes of 
 31.14  sections 62D.01 to 62D.30, the commissioner of health shall 
 31.15  attempt to coordinate the operations of sections 62D.01 to 
 31.16  62D.30 relating to the quality of health care services with the 
 31.17  operations of United States Code, title 42, sections 1320c to 
 31.18  1320c-20.  
 31.19     Sec. 46.  Minnesota Statutes 1998, section 62D.22, 
 31.20  subdivision 10, is amended to read: 
 31.21     Subd. 10.  Any person or committee conducting a review of a 
 31.22  health maintenance organization or a participating entity, 
 31.23  pursuant to sections 62D.01 to 62D.30, shall have access to any 
 31.24  data or information necessary to conduct the review.  All data 
 31.25  or information is subject to admission into evidence in any 
 31.26  civil action initiated by the commissioner of health against the 
 31.27  health maintenance organization.  The data and information are 
 31.28  subject to chapter 13.  
 31.29     Sec. 47.  Minnesota Statutes 1998, section 62D.24, is 
 31.30  amended to read: 
 31.31     62D.24 [STATE COMMISSIONER OF HEALTH'S AUTHORITY TO 
 31.32  CONTRACT.] 
 31.33     The commissioner of health, in carrying out the obligations 
 31.34  under sections 62D.01 to 62D.30, may contract with the 
 31.35  commissioner of commerce health or other qualified persons to 
 31.36  make recommendations concerning the determinations required to 
 32.1   be made.  Such recommendations may be accepted in full or in 
 32.2   part by the commissioner of health. 
 32.3      Sec. 48.  Minnesota Statutes 1998, section 62D.30, 
 32.4   subdivision 1, is amended to read: 
 32.5      Subdivision 1.  The commissioner of health may establish 
 32.6   demonstration projects to allow health maintenance organizations 
 32.7   to extend coverage to:  
 32.8      (a) Individuals enrolled in Part A or Part B, or both, of 
 32.9   the Medicare program, Title XVIII of the Social Security Act, 
 32.10  United States Code, title 42, section 1395 et seq.; 
 32.11     (b) Groups of fewer than 50 employees where each group is 
 32.12  covered by a single group health policy; 
 32.13     (c) Individuals who are not eligible for enrollment in any 
 32.14  group health maintenance contracts; and 
 32.15     (d) Low income population groups.  
 32.16     For purposes of this section, the commissioner of health 
 32.17  may waive compliance with minimum benefits pursuant to sections 
 32.18  62A.151 and 62D.02, subdivision 7, full financial risk pursuant 
 32.19  to section 62D.04, subdivision 1, clause (f), open enrollment 
 32.20  pursuant to section 62D.10, and to applicable rules if there is 
 32.21  reasonable evidence that the rules prohibit the operation of the 
 32.22  demonstration project.  The commissioner shall provide for 
 32.23  public comment before any statute or rule is waived.  
 32.24     Sec. 49.  Minnesota Statutes 1998, section 62D.30, 
 32.25  subdivision 3, is amended to read: 
 32.26     Subd. 3.  A health maintenance organization electing to 
 32.27  participate in a demonstration project shall apply to the 
 32.28  commissioner for approval on a form developed by the 
 32.29  commissioner.  The application shall include at least the 
 32.30  following:  
 32.31     (a) A statement identifying the population that the project 
 32.32  is designed to serve; 
 32.33     (b) A description of the proposed project including a 
 32.34  statement projecting a schedule of costs and benefits for the 
 32.35  enrollee; 
 32.36     (c) Reference to the sections of Minnesota Statutes and 
 33.1   department of health commerce rules for which waiver is 
 33.2   requested; 
 33.3      (d) Evidence that application of the requirements of 
 33.4   applicable Minnesota Statutes and department of health commerce 
 33.5   rules would, unless waived, prohibit the operation of the 
 33.6   demonstration project; 
 33.7      (e) Evidence that another arrangement is available for 
 33.8   assumption of full financial risk if full financial risk is 
 33.9   waived under subdivision 1; 
 33.10     (f) An estimate of the number of years needed to adequately 
 33.11  demonstrate the project's effects; and 
 33.12     (g) Other information the commissioner may reasonably 
 33.13  require. 
 33.14     Sec. 50.  [EFFECT OF TRANSFER OF RESPONSIBILITIES.] 
 33.15     Minnesota Statutes, section 15.039, applies to this act. 
 33.16     Sec. 51.  [REPEALER.] 
 33.17     Minnesota Statutes 1998, section 62D.18, is repealed. 
 33.18     Sec. 52.  [EFFECTIVE DATE.] 
 33.19     Sections 1 to 51 are effective January 1, 2000. 
 33.20                             ARTICLE 2 
 33.21           COMMUNITY INTEGRATED SERVICE NETWORKS, HEALTH 
 33.22      CARE COOPERATIVES, AND COMMUNITY PURCHASING ARRANGEMENTS 
 33.23     Section 1.  Minnesota Statutes 1998, section 62N.02, 
 33.24  subdivision 4, is amended to read: 
 33.25     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 33.26  commissioner of health commerce or the commissioner's designated 
 33.27  representative. 
 33.28     Sec. 2.  Minnesota Statutes 1998, section 62N.26, is 
 33.29  amended to read: 
 33.30     62N.26 [SHARED SERVICES COOPERATIVE.] 
 33.31     The commissioner of health shall establish, or assist in 
 33.32  establishing, a shared services cooperative organized under 
 33.33  chapter 308A to make available administrative and legal 
 33.34  services, technical assistance, provider contracting and billing 
 33.35  services, and other services to those community integrated 
 33.36  service networks that choose to participate in the cooperative.  
 34.1   The commissioner shall provide, to the extent funds are 
 34.2   appropriated, start-up loans sufficient to maintain the shared 
 34.3   services cooperative until its operations can be maintained by 
 34.4   fees and contributions.  The cooperative must not be staffed, 
 34.5   administered, or supervised by the commissioner of health.  The 
 34.6   cooperative shall make use of existing resources that are 
 34.7   already available in the community, to the extent possible. 
 34.8      Sec. 3.  Minnesota Statutes 1998, section 62N.31, 
 34.9   subdivision 1, is amended to read: 
 34.10     Subdivision 1.  [GENERAL.] Each health care providing 
 34.11  entity seeking initial accreditation as an accredited capitated 
 34.12  provider shall submit to the commissioner of health sufficient 
 34.13  information to establish that the applicant has operational 
 34.14  capacity, facilities, personnel, and financial capability to 
 34.15  provide the contracted covered services to the enrollees of the 
 34.16  network for which it seeks accreditation (1) on an ongoing 
 34.17  basis; and (2) for a period of 120 days following the insolvency 
 34.18  of the network without receiving payment from the network.  
 34.19  Accreditation shall continue until abandoned by the accredited 
 34.20  capitated provider or revoked by the commissioner in accordance 
 34.21  with subdivision 4.  The applicant may establish financial 
 34.22  capability by demonstrating that the provider amount at risk can 
 34.23  be covered by or through any of allocated or restricted funds, a 
 34.24  letter of credit, the taxing authority of the applicant or 
 34.25  governmental sponsor of the applicant, an unrestricted fund 
 34.26  balance at least two times the provider amount at risk, 
 34.27  reinsurance, either purchased directly by the applicant or by 
 34.28  the community network to which it will be accredited, or any 
 34.29  other method accepted by the commissioner.  Accreditation of a 
 34.30  health care providing entity shall not in itself limit the right 
 34.31  of the accredited capitated provider to seek payment of unpaid 
 34.32  capitated amounts from a community network, whether the 
 34.33  community network is solvent or insolvent; provided that, if the 
 34.34  community network is subject to any liquidation, rehabilitation, 
 34.35  or conservation proceedings, the accredited capitated provider 
 34.36  shall have the status accorded creditors under section 60B.44, 
 35.1   subdivision 10. 
 35.2      Sec. 4.  Minnesota Statutes 1998, section 62R.04, 
 35.3   subdivision 5, is amended to read: 
 35.4      Subd. 5.  [COMMISSIONER.] Unless otherwise specified, 
 35.5   "commissioner" means the commissioner of health for a health 
 35.6   care network cooperative licensed under chapter 62D or 62N and 
 35.7   the commissioner of commerce for a health care network 
 35.8   cooperative licensed under chapter 62C. 
 35.9      Sec. 5.  Minnesota Statutes 1998, section 62R.25, is 
 35.10  amended to read: 
 35.11     62R.25 [NOTIFICATION OF CONTRACT; REPORT TO LEGISLATURE.] 
 35.12     (a) Each health provider cooperative shall notify the 
 35.13  office of rural health commissioner in writing upon entering a 
 35.14  contract described in section 62R.17. 
 35.15     (b) The department of health, office of rural health, shall 
 35.16  provide an information report to the MinnesotaCare finance 
 35.17  division of the house health and human services committee and 
 35.18  the senate health care committee no later than January 15, 1999, 
 35.19  on the status of direct contracting between health provider 
 35.20  cooperatives and self-insured employer plans or qualified 
 35.21  employers in accordance with sections 62R.17 to 62R.26.  The 
 35.22  report shall consider the effects on public policy and on health 
 35.23  provider cooperatives of a possible requirement that health 
 35.24  provider cooperatives using direct contracting be obligated to 
 35.25  become community integrated service networks. 
 35.26     Sec. 6.  Minnesota Statutes 1998, section 62T.01, 
 35.27  subdivision 4, is amended to read: 
 35.28     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 35.29  commissioner of health commerce. 
 35.30     Sec. 7.  [EFFECTIVE DATE.] 
 35.31     Sections 1 to 6 are effective January 1, 2000. 
 35.32                             ARTICLE 3 
 35.33                         CONFORMING CHANGES 
 35.34     Section 1.  Minnesota Statutes 1998, section 60B.02, is 
 35.35  amended to read: 
 35.36     60B.02 [PERSONS COVERED.] 
 36.1      The proceedings authorized by sections 60B.01 to 60B.61 may 
 36.2   be applied to: 
 36.3      (1) All insurers who are doing, or have done, an insurance 
 36.4   business in this state, and against whom claims arising from 
 36.5   that business may exist now or in the future; 
 36.6      (2) All insurers who purport to do an insurance business in 
 36.7   this state; 
 36.8      (3) All insurers who have insureds resident in this state; 
 36.9      (4) All other persons organized or in the process of 
 36.10  organizing with the intent to do an insurance business in this 
 36.11  state; and 
 36.12     (5) All nonprofit service plan corporations incorporated or 
 36.13  operating under the Nonprofit Health Service Plan Corporation 
 36.14  Act, health maintenance organizations operating under chapter 
 36.15  62D, any health plan incorporated under chapter 317A, all 
 36.16  fraternal benefit societies operating under chapter 64B, except 
 36.17  those associations enumerated in section 64B.38, all township 
 36.18  mutual or other companies operating under chapter 67A, and all 
 36.19  reciprocals or interinsurance exchanges operating under chapter 
 36.20  71A. 
 36.21     Sec. 2.  Minnesota Statutes 1998, section 60B.03, 
 36.22  subdivision 2, is amended to read: 
 36.23     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 36.24  commissioner of commerce of the state of Minnesota and, in that 
 36.25  commissioner's absence or disability, a deputy or other person 
 36.26  duly designated to act in that commissioner's place.  In the 
 36.27  context of rehabilitation or liquidation of a health maintenance 
 36.28  organization, "commissioner" means the commissioner of health of 
 36.29  the state of Minnesota and, in that commissioner's absence or 
 36.30  disability, a deputy or other person duly designated to act in 
 36.31  that commissioner's place. 
 36.32     Sec. 3.  Minnesota Statutes 1998, section 60B.15, is 
 36.33  amended to read: 
 36.34     60B.15 [GROUNDS FOR REHABILITATION.] 
 36.35     The commissioner may apply by verified petition to the 
 36.36  district court for Ramsey county or for the county in which the 
 37.1   principal office of the insurer is located for an order 
 37.2   directing the commissioner to rehabilitate a domestic insurer or 
 37.3   an alien insurer domiciled in this state on any one or more of 
 37.4   the following grounds: 
 37.5      (1) Any ground on which the commissioner may apply for an 
 37.6   order of liquidation under section 60B.20, whenever the 
 37.7   commissioner believes that the insurer may be successfully 
 37.8   rehabilitated without substantial increase in the risk of loss 
 37.9   to creditors of the insurer, its policyholders or to the public; 
 37.10     (2) That the commissioner has reasonable cause to believe 
 37.11  that there has been theft from the insurer, wrongful 
 37.12  sequestration or diversion of the insurer's assets, forgery or 
 37.13  fraud affecting the insurer or other illegal conduct in, by or 
 37.14  with respect to the insurer, which endanger assets in an amount 
 37.15  threatening insolvency of the insurer; 
 37.16     (3) That substantial and unexplained discrepancies exist 
 37.17  between the insurer's records and the most recent annual report 
 37.18  or other official company reports; 
 37.19     (4) That the insurer, after written demand by the 
 37.20  commissioner, has failed to remove any person who in fact has 
 37.21  executive authority in the insurer, whether an officer, manager, 
 37.22  general agent, employee, or other person, if the person has been 
 37.23  found by the commissioner after notice and hearing to be 
 37.24  dishonest or untrustworthy in a way affecting the insurer's 
 37.25  business such as is the basis for action under section 60A.052; 
 37.26     (5) That control of the insurer, whether by stock ownership 
 37.27  or otherwise, and whether direct or indirect, is in one or more 
 37.28  persons found by the commissioner after notice and hearing to be 
 37.29  dishonest or untrustworthy such as is the basis for action under 
 37.30  section 60A.052; 
 37.31     (6) That the insurer, after written demand by the 
 37.32  commissioner, has failed within a reasonable period of time to 
 37.33  terminate the employment and status and all influences on 
 37.34  management of any person who in fact has executive authority in 
 37.35  the insurer, whether an officer, manager, general agent, 
 37.36  employee or other person if the person has refused to submit to 
 38.1   lawful examination under oath by the commissioner concerning the 
 38.2   affairs of the insurer, whether in this state or elsewhere; 
 38.3      (7) That after lawful written demand by the commissioner 
 38.4   the insurer has failed to submit promptly any of its own 
 38.5   property, books, accounts, documents, or other records, or those 
 38.6   of any subsidiary or related company within the control of the 
 38.7   insurer, or those of any person having executive authority in 
 38.8   the insurer so far as they pertain to the insurer, to reasonable 
 38.9   inspection or examination by the commissioner or an authorized 
 38.10  representative.  If the insurer is unable to submit the 
 38.11  property, books, accounts, documents, or other records of a 
 38.12  person having executive authority in the insurer, it shall be 
 38.13  excused from doing so if it promptly and effectively terminates 
 38.14  the relationship of the person to the insurer; 
 38.15     (8) That without first obtaining the written consent of the 
 38.16  commissioner, or if required by law, the written consent of the 
 38.17  attorney general, the insurer has transferred, or attempted to 
 38.18  transfer, substantially its entire property or business, or has 
 38.19  entered into any transaction the effect of which is to merge, 
 38.20  consolidate, or reinsure substantially its entire property or 
 38.21  business of any other person; 
 38.22     (9) That the insurer or its property has been or is the 
 38.23  subject of an application for the appointment of a receiver, 
 38.24  trustee, custodian, conservator or sequestrator or similar 
 38.25  fiduciary of the insurer or its property otherwise than as 
 38.26  authorized under sections 60B.01 to 60B.61, and that such 
 38.27  appointment has been made or is imminent, and that such 
 38.28  appointment might divest the courts of this state of 
 38.29  jurisdiction or prejudice orderly delinquency proceedings under 
 38.30  sections 60B.01 to 60B.61; 
 38.31     (10) That within the previous year the insurer has 
 38.32  willfully violated its charter or articles of incorporation or 
 38.33  its bylaws or any applicable insurance law or regulation of any 
 38.34  state, or of the federal government, or any valid order of the 
 38.35  commissioner under section 60B.11 in any manner or as to any 
 38.36  matter which threatens substantial injury to the insurer, its 
 39.1   creditors, it policyholders or the public, or having become 
 39.2   aware within the previous year of an unintentional or willful 
 39.3   violation has failed to take all reasonable steps to remedy the 
 39.4   situation resulting from the violation and to prevent the same 
 39.5   violations in the future; 
 39.6      (11) That the directors of the insurer are deadlocked in 
 39.7   the management of the insurer's affairs and that the members or 
 39.8   shareholders are unable to break the deadlock and that 
 39.9   irreparable injury to the insurer, its creditors, its 
 39.10  policyholders, or the public is threatened by reason thereof; 
 39.11     (12) That the insurer has failed to pay for 60 days after 
 39.12  due date any obligation to this state or any political 
 39.13  subdivision thereof or any judgment entered in this state, 
 39.14  except that such nonpayment shall not be a ground until 60 days 
 39.15  after any good faith effort by the insurer to contest the 
 39.16  obligation or judgment has been terminated, whether it is before 
 39.17  the commissioner or in the courts; 
 39.18     (13) That the insurer has failed to file its annual report 
 39.19  or other report within the time allowed by law, and after 
 39.20  written demand by the commissioner has failed to give an 
 39.21  adequate explanation immediately; 
 39.22     (14) That two-thirds of the board of directors, or the 
 39.23  holders of a majority of the shares entitled to vote, or a 
 39.24  majority of members or policyholders of an insurer subject to 
 39.25  control by its members or policyholders, consent to 
 39.26  rehabilitation under sections 60B.01 to 60B.61; 
 39.27     (15) That the insurer is engaging in a systematic practice 
 39.28  of reaching settlements with and obtaining releases from 
 39.29  policyholders or third party claimants and then unreasonably 
 39.30  delaying payment of or failing to pay the agreed upon 
 39.31  settlements; 
 39.32     (16) That the insurer is in such condition that the further 
 39.33  transaction of business would be hazardous, financially or 
 39.34  otherwise, to its policyholders, its creditors, or the public; 
 39.35     (17) That within the previous 12 months the insurer has 
 39.36  systematically attempted to compromise with its creditors on the 
 40.1   ground that it is financially unable to pay its claims in full; 
 40.2      (18) In the context of a health maintenance organization, 
 40.3   "insurer" when used in clauses (1) to (17) means "health 
 40.4   maintenance organization."  In addition to the grounds in 
 40.5   clauses (1) to (17), any one of the following constitutes 
 40.6   grounds for rehabilitation of a health maintenance organization: 
 40.7      (a) the health maintenance organization is unable or is 
 40.8   expected to be unable to meet its debts as they become due; 
 40.9      (b) grounds exist under section 62D.042, subdivision 7; 
 40.10     (c) the health maintenance organization's liabilities 
 40.11  exceed the current value of its assets, exclusive of intangibles 
 40.12  and, where the guaranteeing organization's financial condition 
 40.13  no longer meets the requirements of sections 62D.041 and 
 40.14  62D.042, exclusive of any deposits, letters of credit, or 
 40.15  guarantees provided by any guaranteeing organization under 
 40.16  chapter 62D; 
 40.17     (d) in addition to grounds under clause (16), within the 
 40.18  last year the health maintenance organization has failed, and 
 40.19  the commissioner of health expects such failure to continue in 
 40.20  the future, to make comprehensive medical care adequately 
 40.21  available and accessible to its enrollees and the health 
 40.22  maintenance organization has not successfully implemented a plan 
 40.23  of corrective action pursuant to section 62D.121, subdivision 7; 
 40.24  and 
 40.25     (e) in addition to grounds under clause (16), within the 
 40.26  last year the directors or officers of the health maintenance 
 40.27  organization willfully violated the requirements of section 
 40.28  317A.251, or having become aware within the previous year of an 
 40.29  unintentional or willful violation of section 317A.251, have 
 40.30  failed to take all reasonable steps to remedy the situation 
 40.31  resulting from the violation and to prevent the same violation 
 40.32  in the future; 
 40.33     (19) An affiliate of the insurer has been placed in 
 40.34  conservatorship, rehabilitation, liquidation, or other court 
 40.35  supervision such that the insurer's financial condition may be 
 40.36  jeopardized.  
 41.1      Sec. 4.  Minnesota Statutes 1998, section 60B.20, is 
 41.2   amended to read: 
 41.3      60B.20 [GROUNDS FOR LIQUIDATION.] 
 41.4      The commissioner may apply by verified petition to the 
 41.5   district court for Ramsey county or for the county in which the 
 41.6   principal office of the insurer is located for an order to 
 41.7   liquidate a domestic insurer or an alien insurer domiciled in 
 41.8   this state on any one or more of the following grounds: 
 41.9      (1) Any ground on which the commissioner may apply for an 
 41.10  order of rehabilitation under section 60B.15, whenever the 
 41.11  commissioner believes that attempts to rehabilitate the insurer 
 41.12  would substantially increase the risk of loss to its creditors, 
 41.13  its policyholders, or the public, or would be futile, or that 
 41.14  rehabilitation would serve no useful purpose; 
 41.15     (2) That the insurer is or is about to become insolvent; 
 41.16     (3) That the insurer has not transacted the business for 
 41.17  which it was organized or incorporated during the previous 12 
 41.18  months or has transacted only a token such business during that 
 41.19  period, although authorized to do so throughout that period, or 
 41.20  that more than 12 months after incorporation it has failed to 
 41.21  become authorized to do the business for which it was organized 
 41.22  or incorporated; 
 41.23     (4) That the insurer has commenced, or within the previous 
 41.24  year has attempted to commence, voluntary dissolution or 
 41.25  liquidation otherwise than as provided in section 60B.04, 
 41.26  subdivision 3 in the case of a solvent insurer; 
 41.27     (5) That the insurer has concealed records or assets from 
 41.28  the commissioner or improperly removed them from the 
 41.29  jurisdiction, or the commissioner believes that the insurer is 
 41.30  about to do so; 
 41.31     (6) That the insurer does not satisfy the requirements that 
 41.32  would be applicable if it were seeking initial authorization in 
 41.33  this state to do the business for which it was organized or 
 41.34  incorporated, except for: 
 41.35     (i) Requirements that are intended to apply only at the 
 41.36  time the initial authorization to do business is obtained, and 
 42.1   not thereafter; and 
 42.2      (ii) Requirements that are expressly made inapplicable by 
 42.3   the laws establishing the requirements; 
 42.4      (7) That the holders of two-thirds of the shares entitled 
 42.5   to vote, or two-thirds of the members or policyholders entitled 
 42.6   to vote in an insurer controlled by its members or 
 42.7   policyholders, have consented to a petition; 
 42.8      (8) In the context of a health maintenance organization, 
 42.9   "insurer" when used in clauses (1) to (7) means "health 
 42.10  maintenance organization."  In addition to the grounds in 
 42.11  clauses (1) to (7), any one of the following constitutes grounds 
 42.12  for liquidation of a health maintenance organization: 
 42.13     (i) the health maintenance organization is unable or is 
 42.14  expected to be unable to meet its debts as they become due; 
 42.15     (ii) grounds exist under section 62D.042, subdivision 7; 
 42.16     (iii) the health maintenance organization's liabilities 
 42.17  exceed the current value of its assets, exclusive of intangibles 
 42.18  and, where the guaranteeing organization's financial condition 
 42.19  no longer meets the requirements of sections 62D.041 and 
 42.20  62D.042, exclusive of any deposits, letters of credit, or 
 42.21  guarantees provided by any guaranteeing organization under 
 42.22  chapter 62D; 
 42.23     (iv) within the last year the health maintenance 
 42.24  organization has failed, and the commissioner of health expects 
 42.25  failure to continue in the future, to make comprehensive medical 
 42.26  care adequately available and accessible to its enrollees and 
 42.27  the health maintenance organization has not successfully 
 42.28  implemented a plan of corrective action pursuant to section 
 42.29  62D.121, subdivision 7; and 
 42.30     (v) within the last year the directors or officers of the 
 42.31  health maintenance organization willfully violated the 
 42.32  requirements of section 317A.251, or having become aware within 
 42.33  the previous year of an unintentional or willful violation of 
 42.34  section 317A.251, have failed to take all reasonable steps to 
 42.35  remedy the situation resulting from the violation and to prevent 
 42.36  the same violation in the future. 
 43.1      Sec. 5.  Minnesota Statutes 1998, section 60G.01, 
 43.2   subdivision 2, is amended to read: 
 43.3      Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 43.4   commissioner of commerce, except that "commissioner" means the 
 43.5   commissioner of health for administrative supervision of health 
 43.6   maintenance organizations. 
 43.7      Sec. 6.  Minnesota Statutes 1998, section 60G.01, 
 43.8   subdivision 4, is amended to read: 
 43.9      Subd. 4.  [DEPARTMENT.] "Department" means the department 
 43.10  of commerce, except that "department" means the department of 
 43.11  health for administrative supervision of health maintenance 
 43.12  organizations. 
 43.13     Sec. 7.  Minnesota Statutes 1998, section 62A.61, is 
 43.14  amended to read: 
 43.15     62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO 
 43.16  DETERMINE USUAL AND CUSTOMARY FEES.] 
 43.17     (a) A health carrier that bases reimbursement to health 
 43.18  care providers upon a usual and customary fee must maintain in 
 43.19  its office a copy of a description of the methodology used to 
 43.20  calculate fees including at least the following: 
 43.21     (1) the frequency of the determination of usual and 
 43.22  customary fees; 
 43.23     (2) a general description of the methodology used to 
 43.24  determine usual and customary fees; and 
 43.25     (3) the percentile of usual and customary fees that 
 43.26  determines the maximum allowable reimbursement. 
 43.27     (b) A health carrier must provide a copy of the information 
 43.28  described in paragraph (a) to the commissioner of health or the 
 43.29  commissioner of commerce, upon request. 
 43.30     (c) The commissioner of health or the commissioner of 
 43.31  commerce, as appropriate, may use to enforce this section any 
 43.32  enforcement powers otherwise available to the commissioner with 
 43.33  respect to the health carrier.  The commissioner of health or 
 43.34  commerce, as appropriate, may require health carriers to provide 
 43.35  the information required under this section and may use any 
 43.36  powers granted under other laws relating to the regulation of 
 44.1   health carriers to enforce compliance. 
 44.2      (d) For purposes of this section, "health carrier" has the 
 44.3   meaning given in section 62A.011. 
 44.4      Sec. 8.  Minnesota Statutes 1998, section 62L.02, 
 44.5   subdivision 8, is amended to read: 
 44.6      Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
 44.7   commissioner of commerce for health carriers subject to the 
 44.8   jurisdiction of the department of commerce or the commissioner 
 44.9   of health for health carriers subject to the jurisdiction of the 
 44.10  department of health, or the relevant commissioner's designated 
 44.11  representative.  For purposes of sections 62L.13 to 62L.22, 
 44.12  "commissioner" means the commissioner of commerce or that 
 44.13  commissioner's designated representative. 
 44.14     Sec. 9.  Minnesota Statutes 1998, section 62L.05, 
 44.15  subdivision 12, is amended to read: 
 44.16     Subd. 12.  [DEMONSTRATION PROJECTS.] Nothing in this 
 44.17  chapter prohibits a health maintenance organization from 
 44.18  offering a demonstration project authorized under section 62D.30.
 44.19  The commissioner of health may approve a demonstration project 
 44.20  which offers benefits that do not meet the requirements of a 
 44.21  small employer plan if the commissioner finds that the 
 44.22  requirements of section 62D.30 are otherwise met. 
 44.23     Sec. 10.  Minnesota Statutes 1998, section 62L.08, 
 44.24  subdivision 10, is amended to read: 
 44.25     Subd. 10.  [RATING REPORT.] Beginning January 1, 1995, and 
 44.26  annually thereafter, the commissioners of health and 
 44.27  commerce commissioner shall provide a joint report to the 
 44.28  legislature on the effect of the rating restrictions required by 
 44.29  this section and the appropriateness of proceeding with 
 44.30  additional rate reform.  Each report must include an analysis of 
 44.31  the availability of health care coverage due to the rating 
 44.32  reform, the equitable and appropriate distribution of risk and 
 44.33  associated costs, the effect on the self-insurance market, and 
 44.34  any resulting or anticipated change in health plan design and 
 44.35  market share and availability of health carriers. 
 44.36     Sec. 11.  Minnesota Statutes 1998, section 62L.08, 
 45.1   subdivision 11, is amended to read: 
 45.2      Subd. 11.  [LOSS RATIO STANDARDS.] Notwithstanding section 
 45.3   62A.02, subdivision 3, relating to loss ratios, each policy or 
 45.4   contract form used with respect to a health benefit plan 
 45.5   offered, or issued in the small employer market, is subject, 
 45.6   beginning July 1, 1993, to section 62A.021.  The commissioner of 
 45.7   health has, with respect to carriers under that commissioner's 
 45.8   jurisdiction, all of the powers of the commissioner of commerce 
 45.9   under that section. 
 45.10     Sec. 12.  Minnesota Statutes 1998, section 62M.11, is 
 45.11  amended to read: 
 45.12     62M.11 [COMPLAINTS TO COMMERCE OR HEALTH.] 
 45.13     Notwithstanding the provisions of sections 62M.01 to 
 45.14  62M.16, an enrollee may file a complaint regarding a 
 45.15  determination not to certify directly to the commissioner 
 45.16  responsible for regulating the utilization review 
 45.17  organization of commerce. 
 45.18     Sec. 13.  Minnesota Statutes 1998, section 62M.16, is 
 45.19  amended to read: 
 45.20     62M.16 [RULEMAKING.] 
 45.21     If it is determined that rules are reasonable and necessary 
 45.22  to accomplish the purpose of sections 62M.01 to 62M.16, the 
 45.23  rules must be adopted through a joint rulemaking process by both 
 45.24  the department of commerce and the department of health by the 
 45.25  commissioner of commerce. 
 45.26     Sec. 14.  Minnesota Statutes 1998, section 62Q.01, 
 45.27  subdivision 2, is amended to read: 
 45.28     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 45.29  commissioner of health for purposes of regulating health 
 45.30  maintenance organizations, and community integrated service 
 45.31  networks, or the commissioner of commerce for purposes of 
 45.32  regulating all other health plan companies.  For all other 
 45.33  purposes, "commissioner" means the commissioner of health. 
 45.34     Sec. 15.  Minnesota Statutes 1998, section 62Q.07, is 
 45.35  amended to read: 
 45.36     62Q.07 [ACTION PLANS.] 
 46.1      Subdivision 1.  [ACTION PLANS REQUIRED.] (a) To increase 
 46.2   public awareness and accountability of health plan companies, 
 46.3   all health plan companies that issue or renew a health plan, as 
 46.4   defined in section 62Q.01, must annually file with the 
 46.5   applicable commissioner an action plan that satisfies the 
 46.6   requirements of this section beginning July 1, 1994, as a 
 46.7   condition of doing business in Minnesota.  For purposes of this 
 46.8   subdivision, "health plan" includes the coverages described in 
 46.9   section 62A.011, subdivision 3, clause (10).  Each health plan 
 46.10  company must also file its action plan with the information 
 46.11  clearinghouse.  Action plans are required solely to provide 
 46.12  information to consumers, purchasers, and the larger community 
 46.13  as a first step toward greater accountability of health plan 
 46.14  companies.  The sole function of the commissioner in relation to 
 46.15  the action plans is to ensure that each health plan company 
 46.16  files a complete action plan, that the action plan is truthful 
 46.17  and not misleading, and that the action plan is reviewed by 
 46.18  appropriate community agencies. 
 46.19     (b) If a the commissioner responsible for regulating a 
 46.20  health plan company required to file an action plan under this 
 46.21  section has reason to believe an action plan is false or 
 46.22  misleading, the commissioner may conduct an investigation to 
 46.23  determine whether the action plan is truthful and not 
 46.24  misleading, and may require the health plan company to submit 
 46.25  any information that the commissioner reasonably deems necessary 
 46.26  to complete the investigation.  If the commissioner determines 
 46.27  that an action plan is false or misleading, the commissioner may 
 46.28  require the health plan company to file an amended plan or may 
 46.29  take any action authorized under chapter 72A. 
 46.30     Subd. 2.  [CONTENTS OF ACTION PLANS.] (a) An action plan 
 46.31  must include a detailed description of all of the health plan 
 46.32  company's methods and procedures, standards, qualifications, 
 46.33  criteria, and credentialing requirements for designating the 
 46.34  providers who are eligible to participate in the health plan 
 46.35  company's provider network, including any limitations on the 
 46.36  numbers of providers to be included in the network.  This 
 47.1   description must be updated by the health plan company and filed 
 47.2   with the applicable agency commissioner on a quarterly basis.  
 47.3      (b) An action plan must include the number of full-time 
 47.4   equivalent physicians, by specialty, nonphysician providers, and 
 47.5   allied health providers used to provide services.  The action 
 47.6   plan must also describe how the health plan company intends to 
 47.7   encourage the use of nonphysician providers, midlevel 
 47.8   practitioners, and allied health professionals, through at least 
 47.9   consumer education, physician education, and referral and 
 47.10  advisement systems.  The annual action plan must also include 
 47.11  data that is broken down by type of provider, reflecting actual 
 47.12  utilization of midlevel practitioners and allied professionals 
 47.13  by enrollees of the health plan company during the previous 
 47.14  year.  Until July 1, 1995, a health plan company may use 
 47.15  estimates if actual data is not available.  For purposes of this 
 47.16  paragraph, "provider" has the meaning given in section 62J.03, 
 47.17  subdivision 8.  
 47.18     (c) An action plan must include a description of the health 
 47.19  plan company's policy on determining the number and the type of 
 47.20  providers that are necessary to deliver cost-effective health 
 47.21  care to its enrollees.  The action plan must also include the 
 47.22  health plan company's strategy, including provider recruitment 
 47.23  and retention activities, for ensuring that sufficient providers 
 47.24  are available to its enrollees. 
 47.25     (d) An action plan must include a description of actions 
 47.26  taken or planned by the health plan company to ensure that 
 47.27  information from report cards, outcome studies, and complaints 
 47.28  is used internally to improve quality of the services provided 
 47.29  by the health plan company. 
 47.30     (e) An action plan must include a detailed description of 
 47.31  the health plan company's policies and procedures for enrolling 
 47.32  and serving high risk and special needs populations.  This 
 47.33  description must also include the barriers that are present for 
 47.34  the high risk and special needs population and how the health 
 47.35  plan company is addressing these barriers in order to provide 
 47.36  greater access to these populations.  "High risk and special 
 48.1   needs populations" includes, but is not limited to, recipients 
 48.2   of medical assistance, general assistance medical care, and 
 48.3   MinnesotaCare; persons with chronic conditions or disabilities; 
 48.4   individuals within certain racial, cultural, and ethnic 
 48.5   communities; individuals and families with low income; 
 48.6   adolescents; the elderly; individuals with limited or no English 
 48.7   language proficiency; persons with high-cost preexisting 
 48.8   conditions; homeless persons; chemically dependent persons; 
 48.9   persons with serious and persistent mental illness; children 
 48.10  with severe emotional disturbance; and persons who are at high 
 48.11  risk of requiring treatment.  For purposes of this paragraph, 
 48.12  "provider" has the meaning given in section 62J.03, subdivision 
 48.13  8. 
 48.14     (f) An action plan must include a general description of 
 48.15  any action the health plan company has taken and those it 
 48.16  intends to take to offer health coverage options to rural 
 48.17  communities and other communities not currently served by the 
 48.18  health plan company. 
 48.19     (g) A health plan company other than a large managed care 
 48.20  plan company may satisfy any of the requirements of the action 
 48.21  plan in paragraphs (a) to (f) by stating that it has no 
 48.22  policies, procedures, practices, or requirements, either written 
 48.23  or unwritten, or formal or informal, and has undertaken no 
 48.24  activities or plans on the issues required to be addressed in 
 48.25  the action plan, provided that the statement is truthful and not 
 48.26  misleading.  For purposes of this paragraph, "large managed care 
 48.27  plan company" means a health maintenance organization or other 
 48.28  health plan company that employs or contracts with health care 
 48.29  providers, that has more than 50,000 enrollees in this state.  
 48.30  If a health plan company employs or contracts with providers for 
 48.31  some of its health plans and does not do so for other health 
 48.32  plans that it offers, the health plan company is a large managed 
 48.33  care plan company if it has more than 50,000 enrollees in this 
 48.34  state in health plans for which it does employ or contract with 
 48.35  providers. 
 48.36     Sec. 16.  Minnesota Statutes 1998, section 62Q.075, 
 49.1   subdivision 4, is amended to read: 
 49.2      Subd. 4.  [REVIEW.] Upon receipt of the plan, the 
 49.3   appropriate commissioner shall provide a copy to the regional 
 49.4   coordinating boards, local community health boards, and other 
 49.5   relevant community organizations within the managed care 
 49.6   organization's service area.  After reviewing the plan, these 
 49.7   community groups may submit written comments on the plan to 
 49.8   either the commissioner of health or commerce, as applicable, 
 49.9   and may advise the commissioner of the managed care 
 49.10  organization's effectiveness in assisting to achieve regional 
 49.11  public health goals.  The plan may be reviewed by the county 
 49.12  boards, or city councils acting as a local board of health in 
 49.13  accordance with chapter 145A, within the managed care 
 49.14  organization's service area to determine whether the plan is 
 49.15  consistent with the goals and objectives of the plans required 
 49.16  under chapters 145A and 256E and whether the plan meets the 
 49.17  needs of the community.  The county board, or applicable city 
 49.18  council, may also review and make recommendations on the 
 49.19  availability and accessibility of services provided by the 
 49.20  managed care organization.  The county board, or applicable city 
 49.21  council, may submit written comments to the appropriate 
 49.22  commissioner, and may advise the commissioner of the managed 
 49.23  care organization's effectiveness in assisting to meet the needs 
 49.24  and goals as defined under the responsibilities of chapters 145A 
 49.25  and 256E.  The commissioner of health shall develop 
 49.26  recommendations to utilize the written comments submitted as 
 49.27  part of the licensure process to ensure local public 
 49.28  accountability.  These recommendations shall be reported to the 
 49.29  legislative commission on health care access by January 15, 
 49.30  1996.  Copies of these written comments must be provided to the 
 49.31  managed care organization.  The plan and any comments submitted 
 49.32  must be filed with the information clearinghouse to be 
 49.33  distributed to the public. 
 49.34     Sec. 17.  Minnesota Statutes 1998, section 62Q.105, 
 49.35  subdivision 6, is amended to read: 
 49.36     Subd. 6.  [RECORDKEEPING.] Health plan companies shall 
 50.1   maintain records of all enrollee complaints and their 
 50.2   resolutions.  These records must be retained for five years, and 
 50.3   must be made available to the appropriate commissioner upon 
 50.4   request. 
 50.5      Sec. 18.  Minnesota Statutes 1998, section 62Q.105, 
 50.6   subdivision 7, is amended to read: 
 50.7      Subd. 7.  [REPORTING.] Each health plan company shall 
 50.8   submit to the appropriate commissioner, as part of the company's 
 50.9   annual filing, data on the number and type of complaints that 
 50.10  are not resolved within 30 days.  A health plan company shall 
 50.11  also make this information available to the public upon request. 
 50.12     Sec. 19.  Minnesota Statutes 1998, section 62Q.11, is 
 50.13  amended to read: 
 50.14     62Q.11 [DISPUTE RESOLUTION.] 
 50.15     Subdivision 1.  [ESTABLISHED.] The commissioners of health 
 50.16  and commerce commissioner shall make dispute resolution 
 50.17  processes available to encourage early settlement of disputes in 
 50.18  order to avoid the time and cost associated with litigation and 
 50.19  other formal adversarial hearings.  For purposes of this 
 50.20  section, "dispute resolution" means the use of negotiation, 
 50.21  mediation, arbitration, mediation-arbitration, neutral fact 
 50.22  finding, and minitrials.  These processes shall be nonbinding 
 50.23  unless otherwise agreed to by all parties to the dispute. 
 50.24     Subd. 2.  [REQUIREMENTS.] (a) If an enrollee, health care 
 50.25  provider, or applicant for network provider status chooses to 
 50.26  use a dispute resolution process prior to the filing of a formal 
 50.27  claim or of a lawsuit, the health plan company must participate. 
 50.28     (b) If an enrollee, health care provider, or applicant for 
 50.29  network provider status chooses to use a dispute resolution 
 50.30  process after the filing of a lawsuit, the health plan company 
 50.31  must participate in dispute resolution, including, but not 
 50.32  limited to, alternative dispute resolution under rule 114 of the 
 50.33  Minnesota general rules of practice. 
 50.34     (c) The commissioners of health and commerce commissioner 
 50.35  shall inform and educate health plan companies' enrollees about 
 50.36  dispute resolution and its benefits, and shall establish 
 51.1   appropriate cost-sharing requirements for parties taking part in 
 51.2   alternative dispute resolution. 
 51.3      (d) A health plan company may encourage but not require an 
 51.4   enrollee to submit a complaint to alternative dispute resolution.
 51.5      Sec. 20.  Minnesota Statutes 1998, section 62Q.22, 
 51.6   subdivision 2, is amended to read: 
 51.7      Subd. 2.  [REGISTRATION.] A community health clinic that 
 51.8   offers a prepaid option under this section must register on an 
 51.9   annual basis with the commissioner of health. 
 51.10     Sec. 21.  Minnesota Statutes 1998, section 62Q.22, 
 51.11  subdivision 6, is amended to read: 
 51.12     Subd. 6.  [INFORMATION TO BE PROVIDED.] (a) A community 
 51.13  health clinic must provide an individual or family who purchases 
 51.14  a prepaid option a clear and concise written statement that 
 51.15  includes the following information: 
 51.16     (1) the health care services that the prepaid option 
 51.17  covers; 
 51.18     (2) any exclusions or limitations on the health care 
 51.19  services offered, including any preexisting condition 
 51.20  limitations, cost-sharing arrangements, or prior authorization 
 51.21  requirements; 
 51.22     (3) where the health care services may be obtained; 
 51.23     (4) a description of the clinic's method for resolving 
 51.24  patient complaints, including a description of how a patient can 
 51.25  file a complaint with the department of health commerce; and 
 51.26     (5) a description of the conditions under which the prepaid 
 51.27  option may be canceled or terminated. 
 51.28     (b) The commissioner of health must approve a copy of the 
 51.29  written statement before the community health clinic may offer 
 51.30  the prepaid option described in this section.  
 51.31     Sec. 22.  Minnesota Statutes 1998, section 62Q.22, 
 51.32  subdivision 7, is amended to read: 
 51.33     Subd. 7.  [COMPLAINT PROCESS.] (a) A community health 
 51.34  clinic that offers a prepaid option under this section must 
 51.35  establish a complaint resolution process.  As an alternative to 
 51.36  establishing its own process, a community health clinic may use 
 52.1   the complaint process of another organization.  
 52.2      (b) A community health clinic must make reasonable efforts 
 52.3   to resolve complaints and to inform complainants in writing of 
 52.4   the clinic's decision within 60 days of receiving the complaint. 
 52.5      (c) A community health clinic that offers a prepaid option 
 52.6   under this section must report all complaints that are not 
 52.7   resolved within 60 days to the commissioner of health. 
 52.8      Sec. 23.  Minnesota Statutes 1998, section 62Q.32, is 
 52.9   amended to read: 
 52.10     62Q.32 [LOCAL OMBUDSPERSON.] 
 52.11     County board or community health service agencies may 
 52.12  establish an office of ombudsperson to provide a system of 
 52.13  consumer advocacy for persons receiving health care services 
 52.14  through a health plan company.  The ombudsperson's functions may 
 52.15  include, but are not limited to: 
 52.16     (a) mediation or advocacy on behalf of a person accessing 
 52.17  the complaint and appeal procedures to ensure that necessary 
 52.18  medical services are provided by the health plan company; and 
 52.19     (b) investigation of the quality of services provided to a 
 52.20  person and determine the extent to which quality assurance 
 52.21  mechanisms are needed or any other system change may be needed.  
 52.22  The commissioner of health shall make recommendations for 
 52.23  funding these functions including the amount of funding needed 
 52.24  and a plan for distribution.  The commissioner shall submit 
 52.25  these recommendations to the legislative commission on health 
 52.26  care access by January 15, 1996. 
 52.27     Sec. 24.  Minnesota Statutes 1998, section 62Q.51, 
 52.28  subdivision 3, is amended to read: 
 52.29     Subd. 3.  [RATE APPROVAL.] The premium rates and cost 
 52.30  sharing requirements for each option must be submitted to the 
 52.31  commissioner of health or the commissioner of commerce as 
 52.32  required by law.  A health plan that includes lower enrollee 
 52.33  cost sharing for services provided by network providers than for 
 52.34  services provided by out-of-network providers, or lower enrollee 
 52.35  cost sharing for services provided with prior authorization or 
 52.36  second opinion than for services provided without prior 
 53.1   authorization or second opinion, qualifies as a point-of-service 
 53.2   option. 
 53.3      Sec. 25.  Minnesota Statutes 1998, section 62Q.525, 
 53.4   subdivision 3, is amended to read: 
 53.5      Subd. 3.  [REQUIRED COVERAGE.] (a) Every type of coverage 
 53.6   included in subdivision 1 that provides coverage for drugs may 
 53.7   not exclude coverage of a drug for the treatment of cancer on 
 53.8   the ground that the drug has not been approved by the federal 
 53.9   Food and Drug Administration for the treatment of cancer if the 
 53.10  drug is recognized for treatment of cancer in one of the 
 53.11  standard reference compendia or in one article in the medical 
 53.12  literature, as defined in subdivision 2.  
 53.13     (b) Coverage of a drug required by this subdivision 
 53.14  includes coverage of medically necessary services directly 
 53.15  related to and required for appropriate administration of the 
 53.16  drug.  
 53.17     (c) Coverage required by this subdivision does not include 
 53.18  coverage of a drug not listed on the formulary of the coverage 
 53.19  included in subdivision 1. 
 53.20     (d) Coverage of a drug required under this subdivision must 
 53.21  not be subject to any copayment, coinsurance, deductible, or 
 53.22  other enrollee cost-sharing greater than the coverage included 
 53.23  in subdivision 1 applies to other drugs. 
 53.24     (e) The commissioner of commerce or health, as appropriate, 
 53.25  may direct a person that issues coverage included in subdivision 
 53.26  1 to make payments required by this section. 
 53.27     Sec. 26.  Minnesota Statutes 1998, section 72A.139, 
 53.28  subdivision 2, is amended to read: 
 53.29     Subd. 2.  [DEFINITIONS.] (a) As used in this section, 
 53.30  "commissioner" means the commissioner of commerce for health 
 53.31  plan companies and other insurers regulated by that commissioner 
 53.32  and the commissioner of health for health plan companies 
 53.33  regulated by that commissioner. 
 53.34     (b) As used in this section, a "genetic test" means a 
 53.35  presymptomatic test of a person's genes, gene products, or 
 53.36  chromosomes for the purpose of determining the presence or 
 54.1   absence of a gene or genes that exhibit abnormalities, defects, 
 54.2   or deficiencies, including carrier status, that are known to be 
 54.3   the cause of a disease or disorder, or are determined to be 
 54.4   associated with a statistically increased risk of development of 
 54.5   a disease or disorder.  "Genetic test" does not include a 
 54.6   cholesterol test or other test not conducted for the purpose of 
 54.7   determining the presence or absence of a person's gene or genes. 
 54.8      (c) As used in this section, "health plan" has the meaning 
 54.9   given in section 62Q.01, subdivision 3. 
 54.10     (d) As used in this section, "health plan company" has the 
 54.11  meaning given in section 62Q.01, subdivision 4. 
 54.12     (e) As used in this section, "individual" means an 
 54.13  applicant for coverage or a person already covered by the health 
 54.14  plan company or other insurer. 
 54.15     Sec. 27.  [REPEALER.] 
 54.16     Minnesota Statutes 1998, sections 62L.11, subdivision 2; 
 54.17  and 62Q.45, subdivision 1, are repealed. 
 54.18     Sec. 28.  [EFFECTIVE DATE.] 
 54.19     Sections 1 to 27 are effective January 1, 2000.