HF 1293

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to human services; changing provisions for 
  1.3             families and children health care; changing provisions 
  1.4             for American Indian chemical dependency tribal 
  1.5             account; modifying state agency hearings on required 
  1.6             mandatory enrollment in a prepaid health plan; 
  1.7             changing eligibility requirements for medical 
  1.8             assistance; providing funding for the medical 
  1.9             education and research trust fund; amending Minnesota 
  1.10            Statutes 1996, sections 62D.04, subdivision 5; 62N.10, 
  1.11            subdivision 4; 254B.02, subdivision 1; 254B.09, 
  1.12            subdivisions 4, 5, and 7; 256.045, subdivisions 3, 5, 
  1.13            and 7; 256.9353, subdivisions 3 and 7; 256.9355, 
  1.14            subdivisions 1, 3, and 4; 256.9356, subdivision 2; 
  1.15            256.9357, subdivisions 2 and 3; 256.9358, subdivisions 
  1.16            1 and 7; 256.9363, subdivision 7; 256.969, subdivision 
  1.17            1; 256.9695, subdivision 1; 256B.02, by adding a 
  1.18            subdivision; 256B.037, subdivision 2; 256B.055, by 
  1.19            adding a subdivision; 256B.056, subdivisions 4, 5, 7, 
  1.20            and by adding subdivisions; 256B.061; 256B.0625, 
  1.21            subdivision 13; 256B.0626; 256B.064, subdivisions 1a, 
  1.22            1c, and 2; 256B.69, subdivision 6, and by adding a 
  1.23            subdivision; 256D.03, subdivisions 3, 3b, and 4; and 
  1.24            256G.05, subdivision 2; repealing Minnesota Statutes 
  1.25            1996, section 256B.0625, subdivision 13b; Minnesota 
  1.26            Rules, part 9505.1000. 
  1.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.28     Section 1.  Minnesota Statutes 1996, section 62D.04, 
  1.29  subdivision 5, is amended to read: 
  1.30     Subd. 5.  [PARTICIPATION; GOVERNMENT PROGRAMS.] Health 
  1.31  maintenance organizations shall, as a condition of receiving and 
  1.32  retaining a certificate of authority, participate in the medical 
  1.33  assistance, general assistance medical care, and MinnesotaCare 
  1.34  programs.  A health maintenance organization is required to 
  1.35  submit proposals in good faith that meet the requirements of the 
  1.36  request for proposal to serve individuals eligible for the above 
  2.1   programs in a geographic region of the state if, at the time of 
  2.2   publication of a request for proposal, the percentage of 
  2.3   recipients in the public programs in the region who are enrolled 
  2.4   in the health maintenance organization is less than the health 
  2.5   maintenance organization's percentage of the total number of 
  2.6   individuals enrolled in health maintenance organizations in the 
  2.7   same region.  Geographic regions shall be defined by the 
  2.8   commissioner of human services in the request for proposals. 
  2.9      Sec. 2.  Minnesota Statutes 1996, section 62N.10, 
  2.10  subdivision 4, is amended to read: 
  2.11     Subd. 4.  [PARTICIPATION; GOVERNMENT PROGRAMS.] Integrated 
  2.12  service networks shall, as a condition of licensure, participate 
  2.13  in the medical assistance, general assistance medical care, and 
  2.14  MinnesotaCare programs.  An integrated service network is 
  2.15  required to submit proposals in good faith that meet the 
  2.16  requirements of the request for proposals to serve persons who 
  2.17  are eligible for the above programs if, at the time of 
  2.18  publication of a request for proposal, the percentage of 
  2.19  recipients in the public programs in the region who are enrolled 
  2.20  in the integrated service network is less than the integrated 
  2.21  service network's percentage of the total number of individuals 
  2.22  enrolled in integrated service networks in the same region.  
  2.23  Geographic regions shall be defined by the commissioner of human 
  2.24  services in the request for proposals.  
  2.25     Sec. 3.  Minnesota Statutes 1996, section 254B.02, 
  2.26  subdivision 1, is amended to read: 
  2.27     Subdivision 1.  [CHEMICAL DEPENDENCY TREATMENT ALLOCATION.] 
  2.28  The chemical dependency funds appropriated for allocation shall 
  2.29  be placed in a special revenue account.  For the fiscal year 
  2.30  beginning July 1, 1987, funds shall be transferred to operate 
  2.31  the vendor payment, invoice processing, and collections system 
  2.32  for one year.  The commissioner shall annually transfer funds 
  2.33  from the chemical dependency fund to pay for operation of the 
  2.34  drug and alcohol abuse normative evaluation system and to pay 
  2.35  for all costs incurred by adding two positions for licensing of 
  2.36  chemical dependency treatment and rehabilitation programs 
  3.1   located in hospitals for which funds are not otherwise 
  3.2   appropriated.  For each year of the biennium ending June 30, 
  3.3   1999, the commissioner shall allocate funds to the American 
  3.4   Indian chemical dependency tribal account under section 254B.05, 
  3.5   equal to the amount allocated in fiscal year 1997.  The 
  3.6   commissioner shall annually divide the money available in the 
  3.7   chemical dependency fund that is not held in reserve by counties 
  3.8   from a previous allocation, or allocated to the American Indian 
  3.9   chemical dependency tribal account.  Twelve Six percent of the 
  3.10  remaining money must be reserved for the nonreservation American 
  3.11  Indian chemical dependency allocation for treatment of American 
  3.12  Indians by eligible vendors under section 254B.05, subdivision 
  3.13  1.  The remainder of the money must be allocated among the 
  3.14  counties according to the following formula, using state 
  3.15  demographer data and other data sources determined by the 
  3.16  commissioner: 
  3.17     (a) For purposes of this formula, American Indians and 
  3.18  children under age 14 are subtracted from the population of each 
  3.19  county to determine the restricted population. 
  3.20     (b) The amount of chemical dependency fund expenditures for 
  3.21  entitled persons for services not covered by prepaid plans 
  3.22  governed by section 256B.69 in the previous year is divided by 
  3.23  the amount of chemical dependency fund expenditures for entitled 
  3.24  persons for all services to determine the proportion of exempt 
  3.25  service expenditures for each county. 
  3.26     (c) The prepaid plan months of eligibility is multiplied by 
  3.27  the proportion of exempt service expenditures to determine the 
  3.28  adjusted prepaid plan months of eligibility for each county. 
  3.29     (d) The adjusted prepaid plan months of eligibility is 
  3.30  added to the number of restricted population fee for service 
  3.31  months of eligibility for aid to families with dependent 
  3.32  children, general assistance, and medical assistance and divided 
  3.33  by the county restricted population to determine county per 
  3.34  capita months of covered service eligibility. 
  3.35     (e) The number of adjusted prepaid plan months of 
  3.36  eligibility for the state is added to the number of fee for 
  4.1   service months of eligibility for aid to families with dependent 
  4.2   children, general assistance, and medical assistance for the 
  4.3   state restricted population and divided by the state restricted 
  4.4   population to determine state per capita months of covered 
  4.5   service eligibility. 
  4.6      (f) The county per capita months of covered service 
  4.7   eligibility is divided by the state per capita months of covered 
  4.8   service eligibility to determine the county welfare caseload 
  4.9   factor. 
  4.10     (g) The median married couple income for the most recent 
  4.11  three-year period available for the state is divided by the 
  4.12  median married couple income for the same period for each county 
  4.13  to determine the income factor for each county. 
  4.14     (h) The county restricted population is multiplied by the 
  4.15  sum of the county welfare caseload factor and the county income 
  4.16  factor to determine the adjusted population. 
  4.17     (i) $15,000 shall be allocated to each county.  
  4.18     (j) The remaining funds shall be allocated proportional to 
  4.19  the county adjusted population. 
  4.20     Sec. 4.  Minnesota Statutes 1996, section 254B.09, 
  4.21  subdivision 4, is amended to read: 
  4.22     Subd. 4.  [TRIBAL ALLOCATION.] Forty-two and one-half 
  4.23  Eighty-five percent of the American Indian chemical dependency 
  4.24  tribal account must be allocated to the federally recognized 
  4.25  American Indian tribal governing bodies that have entered into 
  4.26  an agreement under subdivision 2 as follows:  $10,000 must be 
  4.27  allocated to each governing body and the remainder must be 
  4.28  allocated in direct proportion to the population of the 
  4.29  reservation according to the most recently available estimates 
  4.30  from the federal Bureau of Indian Affairs.  When a tribal 
  4.31  governing body has not entered into an agreement with the 
  4.32  commissioner under subdivision 2, the county may use funds 
  4.33  allocated to the reservation to pay for chemical dependency 
  4.34  services for a current resident of the county and of the 
  4.35  reservation. 
  4.36     Sec. 5.  Minnesota Statutes 1996, section 254B.09, 
  5.1   subdivision 5, is amended to read: 
  5.2      Subd. 5.  [TRIBAL RESERVE ACCOUNT.] The commissioner shall 
  5.3   reserve 7.5 15 percent of the American Indian chemical 
  5.4   dependency tribal account.  The reserve must be allocated to 
  5.5   those tribal units that have used all money allocated under 
  5.6   subdivision 4 according to agreements made under subdivision 2 
  5.7   and to counties submitting invoices for American Indians under 
  5.8   subdivision 1 when all money allocated under subdivision 4 has 
  5.9   been used.  An American Indian tribal governing body or a county 
  5.10  submitting invoices under subdivision 1 may receive not more 
  5.11  than 30 percent of the reserve account in a year.  The 
  5.12  commissioner may refuse to make reserve payments for persons not 
  5.13  eligible under section 254B.04, subdivision 1, if the tribal 
  5.14  governing body responsible for treatment placement has exhausted 
  5.15  its allocation.  Money must be allocated as invoices are 
  5.16  received. 
  5.17     Sec. 6.  Minnesota Statutes 1996, section 254B.09, 
  5.18  subdivision 7, is amended to read: 
  5.19     Subd. 7.  [NONRESERVATION INDIAN ACCOUNT.] Fifty percent of 
  5.20  The nonreservation American Indian chemical dependency 
  5.21  allocation must be held in reserve by the commissioner in an 
  5.22  account for treatment of Indians not residing on lands of a 
  5.23  reservation receiving money under subdivision 4.  This money 
  5.24  must be used to pay for services certified by county invoice to 
  5.25  have been provided to an American Indian eligible recipient.  
  5.26  Money allocated under this subdivision may be used for payments 
  5.27  on behalf of American Indian county residents only if, in 
  5.28  addition to other placement standards, the county certifies that 
  5.29  the placement was appropriate to the cultural orientation of the 
  5.30  client.  Any funds for treatment of nonreservation Indians 
  5.31  remaining at the end of a fiscal year shall be reallocated under 
  5.32  section 254B.02. 
  5.33     Sec. 7.  Minnesota Statutes 1996, section 256.045, 
  5.34  subdivision 3, is amended to read: 
  5.35     Subd. 3.  [STATE AGENCY HEARINGS.] (a) State agency 
  5.36  hearings are available for the following:  (1) any person 
  6.1   applying for, receiving or having received public assistance or 
  6.2   a program of social services granted by the state agency or a 
  6.3   county agency under sections 252.32, 256.031 to 256.036, and 
  6.4   256.72 to 256.879, chapters 256B, 256D, 256E, 261, or the 
  6.5   federal Food Stamp Act whose application for assistance is 
  6.6   denied, not acted upon with reasonable promptness, or whose 
  6.7   assistance is suspended, reduced, terminated, or claimed to have 
  6.8   been incorrectly paid; (2) any patient or relative aggrieved by 
  6.9   an order of the commissioner under section 252.27; (3) a party 
  6.10  aggrieved by a ruling of a prepaid health plan; (4) any 
  6.11  individual or facility determined by a lead agency to have 
  6.12  maltreated a vulnerable adult under section 626.557 after they 
  6.13  have exercised their right to administrative reconsideration 
  6.14  under section 626.557; (5) any person whose claim for foster 
  6.15  care payment pursuant to a placement of the child resulting from 
  6.16  a child protection assessment under section 626.556 is denied or 
  6.17  not acted upon with reasonable promptness, regardless of funding 
  6.18  source; (6) any person to whom a right of appeal pursuant to 
  6.19  this section is given by other provision of law; or (7) an 
  6.20  applicant aggrieved by an adverse decision to an application for 
  6.21  a hardship waiver under section 256B.15.  The failure to 
  6.22  exercise the right to an administrative reconsideration shall 
  6.23  not be a bar to a hearing under this section if federal law 
  6.24  provides an individual the right to a hearing to dispute a 
  6.25  finding of maltreatment.  Individuals and organizations 
  6.26  specified in this section may contest the specified action, 
  6.27  decision, or final disposition before the state agency by 
  6.28  submitting a written request for a hearing to the state agency 
  6.29  within 30 days after receiving written notice of the action, 
  6.30  decision, or final disposition, or within 90 days of such 
  6.31  written notice if the applicant, recipient, patient, or relative 
  6.32  shows good cause why the request was not submitted within the 
  6.33  30-day time limit. 
  6.34     The hearing for an individual or facility under clause (4) 
  6.35  is the only administrative appeal to the final lead agency 
  6.36  disposition specifically, including a challenge to the accuracy 
  7.1   and completeness of data under section 13.04.  Hearings 
  7.2   requested under clause (4) apply only to incidents of 
  7.3   maltreatment that occur on or after October 1, 1995.  Hearings 
  7.4   requested by nursing assistants in nursing homes alleged to have 
  7.5   maltreated a resident prior to October 1, 1995, shall be held as 
  7.6   a contested case proceeding under the provisions of chapter 14. 
  7.7      For purposes of this section, bargaining unit grievance 
  7.8   procedures are not an administrative appeal. 
  7.9      The scope of hearings involving claims to foster care 
  7.10  payments under clause (5) shall be limited to the issue of 
  7.11  whether the county is legally responsible for a child's 
  7.12  placement under court order or voluntary placement agreement 
  7.13  and, if so, the correct amount of foster care payment to be made 
  7.14  on the child's behalf and shall not include review of the 
  7.15  propriety of the county's child protection determination or 
  7.16  child placement decision. 
  7.17     (b) Except for a prepaid health plan, A vendor of medical 
  7.18  care as defined in section 256B.02, subdivision 7, or a vendor 
  7.19  under contract with a county agency to provide social services 
  7.20  under section 256E.08, subdivision 4, is not a party and may not 
  7.21  request a hearing under this section, except if assisting a 
  7.22  recipient as provided in subdivision 4. 
  7.23     (c) An applicant or recipient is not entitled to receive 
  7.24  social services beyond the services included in the amended 
  7.25  community social services plan developed under section 256E.081, 
  7.26  subdivision 3, if the county agency has met the requirements in 
  7.27  section 256E.081. 
  7.28     Sec. 8.  Minnesota Statutes 1996, section 256.045, 
  7.29  subdivision 5, is amended to read: 
  7.30     Subd. 5.  [ORDERS OF THE COMMISSIONER OF HUMAN SERVICES.] 
  7.31  This subdivision does not apply to appeals under subdivision 
  7.32  3b.  A state human services referee shall conduct a hearing on 
  7.33  the appeal and shall recommend an order to the commissioner of 
  7.34  human services.  The recommended order must be based on all 
  7.35  relevant evidence and must not be limited to a review of the 
  7.36  propriety of the state or county agency's action.  A referee may 
  8.1   take official notice of adjudicative facts.  The commissioner of 
  8.2   human services may accept the recommended order of a state human 
  8.3   services referee and issue the order to the county agency and 
  8.4   the applicant, recipient, former recipient, or prepaid health 
  8.5   plan.  The commissioner on refusing to accept the recommended 
  8.6   order of the state human services referee, shall notify the 
  8.7   county agency and the applicant, recipient, former recipient, or 
  8.8   prepaid health plan of that fact and shall state reasons 
  8.9   therefor and shall allow each party ten days' time to submit 
  8.10  additional written argument on the matter.  After the expiration 
  8.11  of the ten-day period, the commissioner shall issue an order on 
  8.12  the matter to the county agency and the applicant, recipient, 
  8.13  former recipient, or prepaid health plan. 
  8.14     A party aggrieved by an order of the commissioner may 
  8.15  appeal under subdivision 7, or request reconsideration by the 
  8.16  commissioner within 30 days after the date the commissioner 
  8.17  issues the order.  The commissioner may reconsider an order upon 
  8.18  request of any party or on the commissioner's own motion.  A 
  8.19  request for reconsideration does not stay implementation of the 
  8.20  commissioner's order.  Upon reconsideration, the commissioner 
  8.21  may issue an amended order or an order affirming the original 
  8.22  order. 
  8.23     Any order of the commissioner issued under this subdivision 
  8.24  shall be conclusive upon the parties unless appeal is taken in 
  8.25  the manner provided by subdivision 7.  Any order of the 
  8.26  commissioner is binding on the parties and must be implemented 
  8.27  by the state agency or, a county agency, or a prepaid health 
  8.28  plan according to subdivision 3a, until the order is reversed by 
  8.29  the district court, or unless the commissioner or a district 
  8.30  court orders monthly assistance or aid or services paid or 
  8.31  provided under subdivision 10. 
  8.32     Except for a prepaid health plan, A vendor of medical care 
  8.33  as defined in section 256B.02, subdivision 7, or a vendor under 
  8.34  contract with a county agency to provide social services under 
  8.35  section 256E.08, subdivision 4, is not a party and may not 
  8.36  request a hearing or seek judicial review of an order issued 
  9.1   under this section, unless assisting a recipient as provided in 
  9.2   subdivision 4.  A prepaid health plan is a party to an appeal 
  9.3   under subdivision 3a, but cannot seek judicial review of an 
  9.4   order issued under this section. 
  9.5      Sec. 9.  Minnesota Statutes 1996, section 256.045, 
  9.6   subdivision 7, is amended to read: 
  9.7      Subd. 7.  [JUDICIAL REVIEW.] Except for a prepaid health 
  9.8   plan, any party who is aggrieved by an order of the commissioner 
  9.9   of human services, or the commissioner of health in appeals 
  9.10  within the commissioner's jurisdiction under subdivision 3b, may 
  9.11  appeal the order to the district court of the county responsible 
  9.12  for furnishing assistance, or, in appeals under subdivision 3b, 
  9.13  the county where the maltreatment occurred, by serving a written 
  9.14  copy of a notice of appeal upon the commissioner and any adverse 
  9.15  party of record within 30 days after the date the commissioner 
  9.16  issued the order, the amended order, or order affirming the 
  9.17  original order, and by filing the original notice and proof of 
  9.18  service with the court administrator of the district court.  
  9.19  Service may be made personally or by mail; service by mail is 
  9.20  complete upon mailing; no filing fee shall be required by the 
  9.21  court administrator in appeals taken pursuant to this 
  9.22  subdivision, with the exception of appeals taken under 
  9.23  subdivision 3b.  The commissioner may elect to become a party to 
  9.24  the proceedings in the district court.  Except for appeals under 
  9.25  subdivision 3b, any party may demand that the commissioner 
  9.26  furnish all parties to the proceedings with a copy of the 
  9.27  decision, and a transcript of any testimony, evidence, or other 
  9.28  supporting papers from the hearing held before the human 
  9.29  services referee, by serving a written demand upon the 
  9.30  commissioner within 30 days after service of the notice of 
  9.31  appeal.  Any party aggrieved by the failure of an adverse party 
  9.32  to obey an order issued by the commissioner under subdivision 5 
  9.33  may compel performance according to the order in the manner 
  9.34  prescribed in sections 586.01 to 586.12. 
  9.35     Sec. 10.  Minnesota Statutes 1996, section 256.9353, 
  9.36  subdivision 3, is amended to read: 
 10.1      Subd. 3.  [INPATIENT HOSPITAL SERVICES.] (a) Beginning July 
 10.2   1, 1993, covered health services shall include inpatient 
 10.3   hospital services, including inpatient hospital mental health 
 10.4   services and inpatient hospital and residential chemical 
 10.5   dependency treatment, subject to those limitations necessary to 
 10.6   coordinate the provision of these services with eligibility 
 10.7   under the medical assistance spenddown.  The inpatient hospital 
 10.8   benefit for adult enrollees is subject to an annual benefit 
 10.9   limit of $10,000 $15,000 of billed charges.  
 10.10     (b) Enrollees determined by the commissioner to have a 
 10.11  basis of eligibility for medical assistance shall apply for and 
 10.12  cooperate with the requirements of medical assistance by the 
 10.13  last day of the third month following admission to an inpatient 
 10.14  hospital.  If an enrollee fails to apply for medical assistance 
 10.15  within this time period, the enrollee and the enrollee's family 
 10.16  shall be disenrolled from the plan and they may not reenroll 
 10.17  until 12 calendar months have elapsed.  Enrollees and enrollees' 
 10.18  families disenrolled for not applying for or not cooperating 
 10.19  with medical assistance may not reenroll. 
 10.20     (c) Admissions for inpatient hospital services paid for 
 10.21  under section 256.9362, subdivision 3, must be certified as 
 10.22  medically necessary in accordance with Minnesota Rules, parts 
 10.23  9505.0500 to 9505.0540, except as provided in clauses (1) and 
 10.24  (2): 
 10.25     (1) all admissions must be certified, except those 
 10.26  authorized under rules established under section 254A.03, 
 10.27  subdivision 3, or approved under Medicare; and 
 10.28     (2) payment under section 256.9362, subdivision 3, shall be 
 10.29  reduced by five percent for admissions for which certification 
 10.30  is requested more than 30 days after the day of admission.  The 
 10.31  hospital may not seek payment from the enrollee for the amount 
 10.32  of the payment reduction under this clause. 
 10.33     (d) Any enrollee or family member of an enrollee who has 
 10.34  previously been permanently disenrolled from MinnesotaCare for 
 10.35  not applying for and cooperating with medical assistance shall 
 10.36  be eligible to reenroll if 12 calendar months have elapsed since 
 11.1   the date of disenrollment. 
 11.2      Sec. 11.  Minnesota Statutes 1996, section 256.9353, 
 11.3   subdivision 7, is amended to read: 
 11.4      Subd. 7.  [COPAYMENTS AND COINSURANCE.] The MinnesotaCare 
 11.5   benefit plan shall include the following copayments and 
 11.6   coinsurance requirements:  
 11.7      (1) ten percent of the charges submitted for inpatient 
 11.8   hospital services for adult enrollees not eligible for medical 
 11.9   assistance, subject to an annual inpatient out-of-pocket maximum 
 11.10  of $1,000 per individual and $3,000 per family; 
 11.11     (2) $3 per prescription for adult enrollees; and 
 11.12     (3) $25 for eyeglasses for adult enrollees.  
 11.13     Enrollees who are not eligible for medical assistance with 
 11.14  or without a spenddown shall be financially responsible for the 
 11.15  coinsurance amount and amounts which exceed the $10,000 $15,000 
 11.16  benefit limit.  MinnesotaCare shall be financially responsible 
 11.17  for the spenddown amount up to the $10,000 $15,000 benefit limit 
 11.18  for enrollees who are eligible for medical assistance with a 
 11.19  spenddown; enrollees who are eligible for medical assistance 
 11.20  with a spenddown are financially responsible for amounts which 
 11.21  exceed the $10,000 $15,000 benefit limit.  When a MinnesotaCare 
 11.22  enrollee becomes a member of a prepaid health plan, or changes 
 11.23  from one prepaid health plan to another during a calendar year, 
 11.24  any charges submitted towards the $15,000 annual inpatient 
 11.25  benefit limit, and any out-of-pocket expenses incurred by the 
 11.26  enrollee for inpatient services, that were submitted or incurred 
 11.27  prior to enrollment, or prior to the change in health plans, 
 11.28  shall be disregarded. 
 11.29     Sec. 12.  Minnesota Statutes 1996, section 256.9355, 
 11.30  subdivision 1, is amended to read: 
 11.31     Subdivision 1.  [APPLICATION AND INFORMATION AVAILABILITY.] 
 11.32  Applications and other information must be made available to 
 11.33  provider offices, local human services agencies, school 
 11.34  districts, public and private elementary schools in which 25 
 11.35  percent or more of the students receive free or reduced price 
 11.36  lunches, community health offices, and Women, Infants and 
 12.1   Children (WIC) program sites.  These sites may accept 
 12.2   applications, collect the enrollment fee or initial premium fee, 
 12.3   and forward the forms and fees to the commissioner.  Otherwise, 
 12.4   applicants may apply directly to the commissioner.  Beginning 
 12.5   January 1, 2000, MinnesotaCare enrollment sites will be expanded 
 12.6   to include local human services agencies. 
 12.7      Sec. 13.  Minnesota Statutes 1996, section 256.9355, 
 12.8   subdivision 3, is amended to read: 
 12.9      Subd. 3.  [EFFECTIVE DATE OF COVERAGE.] The effective date 
 12.10  of coverage is the first day of the month following the month in 
 12.11  which eligibility is approved and the first premium payment has 
 12.12  been received.  The effective date of coverage for eligible 
 12.13  newborns or eligible newly adoptive children added to a family 
 12.14  receiving covered health services is the date of entry into the 
 12.15  family.  The effective date of coverage for other new recipients 
 12.16  added to the family receiving covered health services is the 
 12.17  first day of the month following the month in which eligibility 
 12.18  is approved and the first premium payment has been received.  
 12.19  The premium must be received eight working days prior to the end 
 12.20  of the month for coverage to begin the following month.  
 12.21  Benefits are not available until the day following discharge if 
 12.22  an enrollee is hospitalized on the first day of coverage.  
 12.23  Notwithstanding any other law to the contrary, benefits under 
 12.24  sections 256.9351 to 256.9361 are secondary to a plan of 
 12.25  insurance or benefit program under which an eligible person may 
 12.26  have coverage and the commissioner shall use cost avoidance 
 12.27  techniques to ensure coordination of any other health coverage 
 12.28  for eligible persons.  The commissioner shall identify eligible 
 12.29  persons who may have coverage or benefits under other plans of 
 12.30  insurance or who become eligible for medical assistance. 
 12.31  Effective July 1, 2000, the effective date of coverage for any 
 12.32  person who is receiving a cash payment through the general 
 12.33  assistance program under chapter 256D or the group residential 
 12.34  housing program under chapter 256I is the first day of the first 
 12.35  month for which a general assistance or group residential 
 12.36  housing payment is made. 
 13.1      Sec. 14.  Minnesota Statutes 1996, section 256.9355, 
 13.2   subdivision 4, is amended to read: 
 13.3      Subd. 4.  [APPLICATION PROCESSING.] The commissioner of 
 13.4   human services shall determine an applicant's eligibility for 
 13.5   MinnesotaCare no more than 30 days from the date that the 
 13.6   application is received by the department of human services.  
 13.7   This requirement shall be suspended for four months following 
 13.8   the dates in which single adults and families without children 
 13.9   become eligible for the program.  Effective July 1, 2000, this 
 13.10  requirement also applies to local human services agencies that 
 13.11  determine eligibility for MinnesotaCare. 
 13.12     Sec. 15.  Minnesota Statutes 1996, section 256.9356, 
 13.13  subdivision 2, is amended to read: 
 13.14     Subd. 2.  [PREMIUM PAYMENTS.] (a) The commissioner shall 
 13.15  require MinnesotaCare enrollees eligible under section 256.9354, 
 13.16  subdivisions 2 to 5, to pay a premium based on a sliding scale, 
 13.17  as established under section 256.9358. 
 13.18     Applicants or enrollees who receive payment from the 
 13.19  general assistance or group residential housing program who 
 13.20  would be eligible for medical assistance without a spenddown 
 13.21  shall be required to pay a premium based on a sliding scale as 
 13.22  established under section 256.9368. 
 13.23     (b) The following applicants are exempt from this the 
 13.24  requirement in paragraph (a) until July 1, 1993: 
 13.25     (1) applicants who are eligible under section 256.9354, 
 13.26  subdivision 1, if the application is received by MinnesotaCare 
 13.27  staff on or before September 30, 1992; and 
 13.28     (2) children who enroll in the MinnesotaCare program after 
 13.29  September 30, 1992, pursuant to Laws 1992, chapter 549, article 
 13.30  4, section 17.  
 13.31     (c) Beginning July 1, 2000, applicants or enrollees who 
 13.32  receive payment from the general assistance program under 
 13.33  chapter 256D or the group residential housing program under 
 13.34  chapter 256I who are not eligible for medical assistance under 
 13.35  chapter 256B without a spenddown are exempt from the requirement 
 13.36  in paragraph (a).  These applicants or enrollees are exempt from 
 14.1   premium requirements beginning with the first month for which 
 14.2   payment is made under general assistance or group residential 
 14.3   housing and continue until the first scheduled renewal following 
 14.4   the termination of benefits under general assistance or group 
 14.5   residential housing. 
 14.6      Sec. 16.  Minnesota Statutes 1996, section 256.9357, 
 14.7   subdivision 2, is amended to read: 
 14.8      Subd. 2.  [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED 
 14.9   COVERAGE.] (a) To be eligible for subsidized premium payments 
 14.10  based on a sliding scale, or to be exempt from premium 
 14.11  requirements under section 256.9356, subdivision 2, paragraph 
 14.12  (b), a family or individual must not have access to subsidized 
 14.13  health coverage through an employer, and must not have had 
 14.14  access to subsidized health coverage through an employer for the 
 14.15  18 months prior to application for subsidized coverage under the 
 14.16  MinnesotaCare program.  The requirement that the family or 
 14.17  individual must not have had access to employer-subsidized 
 14.18  coverage during the previous 18 months does not apply if:  (1) 
 14.19  employer-subsidized coverage was lost due to the death of an 
 14.20  employee or divorce; (2) employer-subsidized coverage was lost 
 14.21  because an individual became ineligible for coverage as a child 
 14.22  or dependent; or (3) employer-subsidized coverage was lost for 
 14.23  reasons that would not disqualify the individual for 
 14.24  unemployment benefits under section 268.09 and the family or 
 14.25  individual has not had access to employer-subsidized coverage 
 14.26  since the loss of coverage.  If employer-subsidized coverage was 
 14.27  lost for reasons that disqualify an individual for unemployment 
 14.28  benefits under section 268.09, children of that individual are 
 14.29  exempt from the requirement of no access to employer subsidized 
 14.30  coverage for the 18 months prior to application, as long as the 
 14.31  children have not had access to employer subsidized coverage 
 14.32  since the disqualifying event.  The requirement that the family 
 14.33  or individual must not have had access to employer-subsidized 
 14.34  coverage during the previous 18 months does apply if 
 14.35  employer-subsidized coverage is lost due to an employer 
 14.36  terminating health care coverage as an employee benefit.  
 15.1      (b) For purposes of this requirement, subsidized health 
 15.2   coverage means health coverage for which the employer pays at 
 15.3   least 50 percent of the cost of coverage for the employee, 
 15.4   excluding dependent coverage, or a higher percentage as 
 15.5   specified by the commissioner.  Children are eligible for 
 15.6   employer-subsidized coverage through either parent, including 
 15.7   the noncustodial parent.  The commissioner must treat employer 
 15.8   contributions to Internal Revenue Code Section 125 plans as 
 15.9   qualified employer subsidies toward the cost of health coverage 
 15.10  for employees for purposes of this subdivision. 
 15.11     Sec. 17.  Minnesota Statutes 1996, section 256.9357, 
 15.12  subdivision 3, is amended to read: 
 15.13     Subd. 3.  [PERIOD UNINSURED.] To be eligible for subsidized 
 15.14  premium payments based on a sliding scale, or to be exempt from 
 15.15  premium requirements under section 256.9356, subdivision 2, 
 15.16  paragraph (b), families and individuals initially enrolled in 
 15.17  the MinnesotaCare program under section 256.9354, subdivisions 4 
 15.18  and 5, must have had no health coverage for at least four months 
 15.19  prior to application.  The commissioner may change this 
 15.20  eligibility criterion for sliding scale premiums without 
 15.21  complying with rulemaking requirements in order to remain within 
 15.22  the limits of available appropriations.  The requirement of at 
 15.23  least four months of no health coverage prior to application for 
 15.24  the MinnesotaCare program does not apply to: 
 15.25     (1) families, children, and individuals who want to apply 
 15.26  for the MinnesotaCare program upon termination from the medical 
 15.27  assistance program, general assistance medical care program, or 
 15.28  coverage under a regional demonstration project for the 
 15.29  uninsured funded under section 256B.73, the Hennepin county 
 15.30  assured care program, or the Group Health, Inc., community 
 15.31  health plan; 
 15.32     (2) families and individuals initially enrolled under 
 15.33  section 256.9354, subdivisions 1, paragraph (a), and 2; 
 15.34     (3) children enrolled pursuant to Laws 1992, chapter 549, 
 15.35  article 4, section 17; or 
 15.36     (4) individuals currently serving or who have served in the 
 16.1   military reserves, and dependents of these individuals, if these 
 16.2   individuals:  (i) reapply for MinnesotaCare coverage after a 
 16.3   period of active military service during which they had been 
 16.4   covered by the Civilian Health and Medical Program of the 
 16.5   Uniformed Services (CHAMPUS); (ii) were covered under 
 16.6   MinnesotaCare immediately prior to obtaining coverage under 
 16.7   CHAMPUS; and (iii) have maintained continuous coverage. 
 16.8      Sec. 18.  Minnesota Statutes 1996, section 256.9358, 
 16.9   subdivision 1, is amended to read: 
 16.10     Subdivision 1.  [PREMIUM DETERMINATION.] Each individual or 
 16.11  family enrolled in the MinnesotaCare program shall pay a premium 
 16.12  determined according to a sliding fee based on the cost of 
 16.13  coverage as a percentage of the individual's or family's gross 
 16.14  family income.  
 16.15     Effective July 1, 2000, individuals who are receiving 
 16.16  payment from general assistance under chapter 256D or group 
 16.17  residential housing under chapter 256I and who are not eligible 
 16.18  for medical assistance under chapter 256B without a spenddown 
 16.19  shall not be required to pay a premium. 
 16.20     Sec. 19.  Minnesota Statutes 1996, section 256.9358, 
 16.21  subdivision 7, is amended to read: 
 16.22     Subd. 7.  [MINIMUM PREMIUM PAYMENT.] Beginning with premium 
 16.23  payments due on or after July 1, 1995, the commissioner shall 
 16.24  require all MinnesotaCare enrollees to pay a minimum premium of 
 16.25  $4 per month.  
 16.26     Effective July 1, 2000, individuals who are receiving 
 16.27  payment from general assistance under chapter 256D or group 
 16.28  residential housing under chapter 256I and who are not eligible 
 16.29  for medical assistance under chapter 256B without a spenddown 
 16.30  shall not be required to pay a premium. 
 16.31     Sec. 20.  Minnesota Statutes 1996, section 256.9363, 
 16.32  subdivision 7, is amended to read: 
 16.33     Subd. 7.  [MANAGED CARE PLAN VENDOR REQUIREMENTS.] The 
 16.34  following requirements apply to all counties or vendors who 
 16.35  contract with the department of human services to serve 
 16.36  MinnesotaCare recipients.  Managed care plan contractors: 
 17.1      (1) shall authorize and arrange for the provision of the 
 17.2   full range of services listed in section 256.9353, except dental 
 17.3   services provided under section 256B.037, in order to ensure 
 17.4   appropriate health care is delivered to enrollees; 
 17.5      (2) shall accept the prospective, per capita payment or 
 17.6   other contractually defined payment from the commissioner in 
 17.7   return for the provision and coordination of covered health care 
 17.8   services for eligible individuals enrolled in the program; 
 17.9      (3) may contract with other health care and social service 
 17.10  practitioners to provide services to enrollees; 
 17.11     (4) shall provide for an enrollee grievance process as 
 17.12  required by the commissioner and set forth in the contract with 
 17.13  the department; 
 17.14     (5) shall retain all revenue from enrollee copayments; 
 17.15     (6) shall accept all eligible MinnesotaCare enrollees, 
 17.16  without regard to health status or previous utilization of 
 17.17  health services; 
 17.18     (7) shall demonstrate capacity to accept financial risk 
 17.19  according to requirements specified in the contract with the 
 17.20  department.  A health maintenance organization licensed under 
 17.21  chapter 62D, or a nonprofit health plan licensed under chapter 
 17.22  62C, is not required to demonstrate financial risk capacity, 
 17.23  beyond that which is required to comply with chapters 62C and 
 17.24  62D; and 
 17.25     (8) shall submit information as required by the 
 17.26  commissioner, including data required for assessing enrollee 
 17.27  satisfaction, quality of care, cost, and utilization of services.
 17.28     Sec. 21.  Minnesota Statutes 1996, section 256.969, 
 17.29  subdivision 1, is amended to read: 
 17.30     Subdivision 1.  [HOSPITAL COST INDEX.] (a) The hospital 
 17.31  cost index shall be the change in the Consumer Price Index-All 
 17.32  Items (United States city average) (CPI-U) forecasted by Data 
 17.33  Resources, Inc.  The commissioner shall use the indices as 
 17.34  forecasted in the third quarter of the calendar year prior to 
 17.35  the rate year.  The hospital cost index may be used to adjust 
 17.36  the base year operating payment rate through the rate year on an 
 18.1   annually compounded basis.  
 18.2      (b) For fiscal years beginning on or after July 1, 1993, 
 18.3   the commissioner of human services shall not provide automatic 
 18.4   annual inflation adjustments for hospital payment rates under 
 18.5   medical assistance, nor under general assistance medical care, 
 18.6   except that the inflation adjustments under paragraph (a) for 
 18.7   medical assistance, excluding general assistance medical care, 
 18.8   shall apply through calendar year 1997 1999.  The commissioner 
 18.9   of finance shall include as a budget change request in each 
 18.10  biennial detailed expenditure budget submitted to the 
 18.11  legislature under section 16A.11 annual adjustments in hospital 
 18.12  payment rates under medical assistance and general assistance 
 18.13  medical care, based upon the hospital cost index. 
 18.14     Sec. 22.  Minnesota Statutes 1996, section 256.9695, 
 18.15  subdivision 1, is amended to read: 
 18.16     Subdivision 1.  [APPEALS.] A hospital may appeal a decision 
 18.17  arising from the application of standards or methods under 
 18.18  section 256.9685, 256.9686, or 256.969, if an appeal would 
 18.19  result in a change to the hospital's payment rate or payments.  
 18.20  Both overpayments and underpayments that result from the 
 18.21  submission of appeals shall be implemented.  Regardless of any 
 18.22  appeal outcome, relative values shall not be recalculated.  The 
 18.23  appeal shall be heard by an administrative law judge according 
 18.24  to sections 14.57 to 14.62, or upon agreement by both parties, 
 18.25  according to a modified appeals procedure established by the 
 18.26  commissioner and the office of administrative hearings.  In any 
 18.27  proceeding under this section, the appealing party must 
 18.28  demonstrate by a preponderance of the evidence that the 
 18.29  commissioner's determination is incorrect or not according to 
 18.30  law. 
 18.31     (a) To appeal a payment rate or payment determination or a 
 18.32  determination made from base year information, the hospital 
 18.33  shall file a written appeal request to the commissioner within 
 18.34  60 days of the date the payment rate determination was mailed.  
 18.35  The appeal request shall specify:  (i) the disputed items; (ii) 
 18.36  the authority in federal or state statute or rule upon which the 
 19.1   hospital relies for each disputed item; and (iii) the name and 
 19.2   address of the person to contact regarding the appeal.  Facts to 
 19.3   be considered in any appeal of base year information are limited 
 19.4   to those in existence at the time the payment rates of the first 
 19.5   rate year were established from the base year information.  In 
 19.6   the case of Medicare settled appeals, the 60-day appeal period 
 19.7   shall begin on the mailing date of the notice by the Medicare 
 19.8   program or the date the medical assistance payment rate 
 19.9   determination notice is mailed, whichever is later. 
 19.10     (b) To appeal a payment rate or payment change that results 
 19.11  from a difference in case mix between the base year and a rate 
 19.12  year, the procedures and requirements of paragraph (a) apply.  
 19.13  However, the appeal must be filed with the commissioner within 
 19.14  120 days after the end of a rate year.  A case mix appeal must 
 19.15  apply to the cost of services to all medical assistance patients 
 19.16  that received inpatient services from the hospital during the 
 19.17  rate year appealed.  For case mix appeals filed after January 1, 
 19.18  1997, the difference in case mix and the corresponding payment 
 19.19  adjustment must exceed a threshold of ten percent. 
 19.20     Sec. 23.  Minnesota Statutes 1996, section 256B.02, is 
 19.21  amended by adding a subdivision to read: 
 19.22     Subd. 16.  [FAMILY.] "Family" means a parent and the 
 19.23  parent's biological or adoptive children under age 21; a 
 19.24  stepparent and stepchildren under age 21; and spouses living 
 19.25  together in the same household.  It also includes children and 
 19.26  stepchildren under age 18 who are living out of the home 
 19.27  voluntarily.  This subdivision becomes effective January 1, 
 19.28  1999, or upon federal approval of a required waiver if later. 
 19.29     Sec. 24.  Minnesota Statutes 1996, section 256B.037, 
 19.30  subdivision 2, is amended to read: 
 19.31     Subd. 2.  [ESTABLISHMENT OF PREPAYMENT RATES.] The 
 19.32  commissioner shall consult with an independent actuary to 
 19.33  establish prepayment rates, but shall retain final authority 
 19.34  over the methodology used to establish the rates.  Payment rates 
 19.35  may be adjusted to reflect increased availability of providers 
 19.36  under the demonstration project in subdivision 1.  The 
 20.1   commissioner may negotiate contracts which make payment after 
 20.2   the month of coverage.  The prepayment dental rates under this 
 20.3   section, combined with other prepaid programs, shall not result 
 20.4   in payments that exceed the per capita expenditures that would 
 20.5   have been made for dental services by the programs under a 
 20.6   fee-for-service reimbursement system.  The package of dental 
 20.7   benefits provided to individuals under this subdivision shall 
 20.8   not be less than the package of benefits provided under 
 20.9   the medical assistance fee-for-service reimbursement system for 
 20.10  dental services program for which they are eligible. 
 20.11     Sec. 25.  Minnesota Statutes 1996, section 256B.055, is 
 20.12  amended by adding a subdivision to read: 
 20.13     Subd. 11a.  [PAYMENT OF MEDICAL ASSISTANCE FOR PERSONS 
 20.14  RESIDING IN CERTAIN FACILITIES.] Effective July 1, 2000, medical 
 20.15  assistance without federal financial participation may be paid 
 20.16  for a person who would be eligible for medical assistance with 
 20.17  federal financial participation except that the person resides 
 20.18  in a facility that is determined by the commissioner or the 
 20.19  federal health care financing administration to be an 
 20.20  institution for mental diseases, but no medical assistance 
 20.21  payment shall be made for the cost of care in institutions for 
 20.22  mental diseases under this clause. 
 20.23     Sec. 26.  Minnesota Statutes 1996, section 256B.056, 
 20.24  subdivision 4, is amended to read: 
 20.25     Subd. 4.  [INCOME.] To be eligible for medical assistance, 
 20.26  a person must not have, or anticipate receiving, semiannual 
 20.27  income in excess of 120 percent of the income standards by 
 20.28  family size used in the aid to families with dependent children 
 20.29  program, except that families and children may have an income up 
 20.30  to 133-1/3 percent of the AFDC income standard.  In computing 
 20.31  income to determine eligibility of persons who are not residents 
 20.32  of long-term care facilities, the commissioner shall disregard 
 20.33  increases in income as required by Public Law Numbers 94-566, 
 20.34  section 503; 99-272; and 99-509.  Veterans aid and attendance 
 20.35  benefits and Veterans Administration unusual medical expense 
 20.36  payments are considered income to the recipient. 
 21.1      Sec. 27.  Minnesota Statutes 1996, section 256B.056, 
 21.2   subdivision 5, is amended to read: 
 21.3      Subd. 5.  [EXCESS INCOME.] A person who has excess income 
 21.4   is eligible for medical assistance if the person has expenses 
 21.5   for medical care that are more than the amount of the person's 
 21.6   excess income, computed by deducting incurred medical expenses 
 21.7   from the excess income to reduce the excess to the income 
 21.8   standard specified in subdivision 4.  The person shall elect to 
 21.9   have the medical expenses deducted at the beginning of a 
 21.10  one-month budget period or at the beginning of a six-month 
 21.11  budget period.  Until June 30, 1993, or the date the Medicaid 
 21.12  Management Information System (MMIS) upgrade is implemented, 
 21.13  whichever occurs last, The commissioner shall allow persons 
 21.14  eligible for assistance on a one-month spenddown basis under 
 21.15  this subdivision to elect to pay the monthly spenddown amount in 
 21.16  advance of the month of eligibility to the local state agency in 
 21.17  order to maintain eligibility on a continuous basis.  If the 
 21.18  recipient does not pay the spenddown amount on or before 
 21.19  the 10th 20th of the month, the recipient is ineligible for this 
 21.20  option for the following month.  The local agency must deposit 
 21.21  spenddown payments into its treasury and issue a monthly payment 
 21.22  to the state agency with the necessary individual account 
 21.23  information.  The local agency shall code the client eligibility 
 21.24  Medicaid Management Information System (MMIS) to indicate that 
 21.25  the spenddown obligation has been satisfied for the month 
 21.26  paid recipient has elected this option.  The state agency shall 
 21.27  convey this information recipient eligibility information 
 21.28  relative to the collection of the spenddown to providers through 
 21.29  eligibility cards which list no remaining spenddown obligation.  
 21.30  After the implementation of the MMIS upgrade, the Electronic 
 21.31  Verification System (EVS).  A recipient electing advance payment 
 21.32  must pay the state agency the monthly spenddown amount on or 
 21.33  before the 10th 20th of the month in order to be eligible for 
 21.34  this option in the following month.  This subdivision expires 
 21.35  the day before subdivision 5c becomes effective. 
 21.36     Sec. 28.  Minnesota Statutes 1996, section 256B.056, is 
 22.1   amended by adding a subdivision to read: 
 22.2      Subd. 5c.  [EXCESS INCOME.] (a) Beginning January 1, 1999, 
 22.3   or upon federal approval of a required waiver if later, a person 
 22.4   who has excess income is eligible for medical assistance if the 
 22.5   person has expenses for medical care that are more than the 
 22.6   amount of the person's excess income, computed by deducting 
 22.7   incurred medical expenses from the excess income to reduce the 
 22.8   excess to the income standard specified in subdivision 4.  A 
 22.9   person who is eligible for medical assistance as an elderly, 
 22.10  blind, or disabled person may elect to have the medical expenses 
 22.11  deducted at the beginning of a one-month budget period or at the 
 22.12  beginning of the six-month budget period.  The commissioner 
 22.13  shall allow persons eligible for assistance on a one-month 
 22.14  spenddown basis under this subdivision to elect to pay the 
 22.15  monthly spenddown amount in advance of the month of eligibility 
 22.16  to the state agency in order to maintain eligibility on a 
 22.17  continuous basis.  If the recipient does not pay the spenddown 
 22.18  amount on or before the 20th of the month, the recipient is 
 22.19  ineligible for this option for the following month.  The local 
 22.20  agency shall code the Medicaid Management Information System 
 22.21  (MMIS) to indicate that the recipient has elected this option.  
 22.22  The state agency shall convey recipient eligibility information 
 22.23  relative to the collection of the spenddown to providers through 
 22.24  the Electronic Verification System (EVS).  A recipient electing 
 22.25  advance payment must pay the state agency the monthly spenddown 
 22.26  amount on or before the 20th of the month in order to be 
 22.27  eligible for this option in the following month.  
 22.28     (b) Beginning January 1, 1999, or upon federal approval of 
 22.29  a required waiver if later, a person who is eligible for medical 
 22.30  assistance under a families and children eligibility category 
 22.31  must have the medical expenses deducted at the beginning of the 
 22.32  six-month budget period. 
 22.33     Sec. 29.  Minnesota Statutes 1996, section 256B.056, 
 22.34  subdivision 7, is amended to read: 
 22.35     Subd. 7.  [PERIOD OF ELIGIBILITY.] Eligibility is available 
 22.36  for the month of application and for three months prior to 
 23.1   application if the person was eligible in those prior months.  A 
 23.2   redetermination of eligibility must occur every 12 months.  This 
 23.3   subdivision expires the day before subdivision 7b is effective. 
 23.4      Sec. 30.  Minnesota Statutes 1996, section 256B.056, is 
 23.5   amended by adding a subdivision to read: 
 23.6      Subd. 7a.  [PERIOD OF ELIGIBILITY.] For persons eligible 
 23.7   for medical assistance as an elderly, blind, or disabled person, 
 23.8   eligibility is available for the month of application and for 
 23.9   three months prior to application if the person was eligible in 
 23.10  those prior months.  A redetermination of eligibility must occur 
 23.11  every 12 months.  This subdivision is effective the day 
 23.12  subdivision 7b takes effect. 
 23.13     Sec. 31.  Minnesota Statutes 1996, section 256B.056, is 
 23.14  amended by adding a subdivision to read: 
 23.15     Subd. 7b.  [PERIOD OF ELIGIBILITY.] (a) Beginning January 
 23.16  1, 1998, or upon federal approval of a required waiver if later, 
 23.17  eligibility for people eligible for medical assistance under a 
 23.18  families and children category is available only for the month 
 23.19  of application and for two months prior to application if the 
 23.20  person was eligible in those prior months.  
 23.21     (b) Beginning January 1, 1999, or upon federal approval of 
 23.22  a required waiver if later, eligibility for these categories is 
 23.23  available only for the month of application and one immediately 
 23.24  prior month if the person was eligible in the prior month.  
 23.25     (c) Beginning January 1, 2000, or upon federal approval of 
 23.26  a required waiver if later, covered services for the prior month 
 23.27  shall be limited to inpatient hospitalization, emergency room, 
 23.28  and related physician's services provided during the inpatient 
 23.29  stay.  The state agency shall inform recipients and providers 
 23.30  annually beginning in 1997 through 2000 of the phase-down of 
 23.31  retroactive eligibility. 
 23.32     Sec. 32.  Minnesota Statutes 1996, section 256B.056, is 
 23.33  amended by adding a subdivision to read: 
 23.34     Subd. 9.  [ELIGIBILITY CRITERIA.] Beginning January 1, 
 23.35  1999, or upon federal approval of a waiver if later, the total 
 23.36  countable family income will be applied in determining the 
 24.1   eligibility for each person who applies and is eligible for 
 24.2   medical assistance under a families and children category.  
 24.3   "Family" has the meaning given in section 256B.02, subdivision 
 24.4   16. 
 24.5      Sec. 33.  Minnesota Statutes 1996, section 256B.061, is 
 24.6   amended to read: 
 24.7      256B.061 [ELIGIBILITY; RETROACTIVE EFFECT; RESTRICTIONS.] 
 24.8      Subdivision 1.  If any individual has been determined to be 
 24.9   eligible for medical assistance, it will be made available for 
 24.10  care and services included under the plan and furnished in or 
 24.11  after the third month before the month in which the individual 
 24.12  made application for such assistance, if such individual was, or 
 24.13  upon application would have been, eligible for medical 
 24.14  assistance at the time the care and services were furnished.  
 24.15  The commissioner may limit, restrict, or suspend the eligibility 
 24.16  of an individual for up to one year upon that individual's 
 24.17  conviction of a criminal offense related to application for or 
 24.18  receipt of medical assistance benefits.  This subdivision 
 24.19  expires the day before subdivision 1b becomes effective. 
 24.20     Subd. 1a.  If any person has been determined to be eligible 
 24.21  for medical assistance as an elderly, blind, or disabled person, 
 24.22  medical assistance will be made available for care and services 
 24.23  included under the plan and furnished in or after the third 
 24.24  month before the month in which the person made application for 
 24.25  such assistance, if the person was, or upon application would 
 24.26  have been, eligible for medical assistance at the time the care 
 24.27  and services were furnished.  This subdivision is effective the 
 24.28  day subdivision 1b takes effect. 
 24.29     Subd. 1b.  Beginning January 1, 1998, or upon federal 
 24.30  approval of a required waiver if later, if an individual has 
 24.31  been determined to be eligible for medical assistance under a 
 24.32  families and children category, it will be made available only 
 24.33  for care and services included under the plan and furnished in 
 24.34  or after the second month before the month in which the 
 24.35  individual made application for such assistance, if such 
 24.36  individual was, or upon application would have been, eligible 
 25.1   for medical assistance at the time the care and services were 
 25.2   furnished. 
 25.3      Subd. 1c.  Beginning January 1, 1999, or upon federal 
 25.4   approval of a required waiver if later, if an individual has 
 25.5   been determined to be eligible for medical assistance under a 
 25.6   families and children category, it will be made available only 
 25.7   for care and services included under the plan and furnished in 
 25.8   or after the first month before the month in which the 
 25.9   individual made application for such assistance, if the 
 25.10  individual was, or upon application would have been, eligible 
 25.11  for medical assistance at the time the care and services were 
 25.12  furnished. 
 25.13     Subd. 1d.  Beginning January 1, 2000, or upon federal 
 25.14  approval of a required waiver if later, if an individual has 
 25.15  been determined to be eligible for medical assistance under a 
 25.16  families and children category, it will be made available only 
 25.17  for inpatient hospital, emergency room, and related physician's 
 25.18  services provided during the inpatient stay included under the 
 25.19  plan and furnished in the first month before the month in which 
 25.20  the individual made application for such assistance, if the 
 25.21  individual was, or upon application would have been, eligible 
 25.22  for medical assistance at the time the specified care and 
 25.23  services were furnished.  From the month of application and 
 25.24  continuing as long as eligibility exists, the individual will be 
 25.25  eligible for all care and services included under the plan. 
 25.26     Sec. 34.  Minnesota Statutes 1996, section 256B.0625, 
 25.27  subdivision 13, is amended to read: 
 25.28     Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
 25.29  except for fertility drugs when specifically used to enhance 
 25.30  fertility, if prescribed by a licensed practitioner and 
 25.31  dispensed by a licensed pharmacist, by a physician enrolled in 
 25.32  the medical assistance program as a dispensing physician, or by 
 25.33  a physician or a nurse practitioner employed by or under 
 25.34  contract with a community health board as defined in section 
 25.35  145A.02, subdivision 5, for the purposes of communicable disease 
 25.36  control.  The commissioner, after receiving recommendations from 
 26.1   professional medical associations and professional pharmacist 
 26.2   associations, shall designate a formulary committee to advise 
 26.3   the commissioner on the names of drugs for which payment is 
 26.4   made, recommend a system for reimbursing providers on a set fee 
 26.5   or charge basis rather than the present system, and develop 
 26.6   methods encouraging use of generic drugs when they are less 
 26.7   expensive and equally effective as trademark drugs.  The 
 26.8   formulary committee shall consist of nine members, four of whom 
 26.9   shall be physicians who are not employed by the department of 
 26.10  human services, and a majority of whose practice is for persons 
 26.11  paying privately or through health insurance, three of whom 
 26.12  shall be pharmacists who are not employed by the department of 
 26.13  human services, and a majority of whose practice is for persons 
 26.14  paying privately or through health insurance, a consumer 
 26.15  representative, and a nursing home representative.  Committee 
 26.16  members shall serve three-year terms and shall serve without 
 26.17  compensation.  Members may be reappointed once.  
 26.18     (b) The commissioner shall establish a drug formulary.  Its 
 26.19  establishment and publication shall not be subject to the 
 26.20  requirements of the administrative procedure act, but the 
 26.21  formulary committee shall review and comment on the formulary 
 26.22  contents.  The formulary committee shall review and recommend 
 26.23  drugs which require prior authorization.  The formulary 
 26.24  committee may recommend drugs for prior authorization directly 
 26.25  to the commissioner, as long as opportunity for public input is 
 26.26  provided.  Prior authorization may be requested by the 
 26.27  commissioner based on medical and clinical criteria before 
 26.28  certain drugs are eligible for payment.  Before a drug may be 
 26.29  considered for prior authorization at the request of the 
 26.30  commissioner:  
 26.31     (1) the drug formulary committee must develop criteria to 
 26.32  be used for identifying drugs; the development of these criteria 
 26.33  is not subject to the requirements of chapter 14, but the 
 26.34  formulary committee shall provide opportunity for public input 
 26.35  in developing criteria; 
 26.36     (2) the drug formulary committee must hold a public forum 
 27.1   and receive public comment for an additional 15 days; and 
 27.2      (3) the commissioner must provide information to the 
 27.3   formulary committee on the impact that placing the drug on prior 
 27.4   authorization will have on the quality of patient care and 
 27.5   information regarding whether the drug is subject to clinical 
 27.6   abuse or misuse.  Prior authorization may be required by the 
 27.7   commissioner before certain formulary drugs are eligible for 
 27.8   payment.  The formulary shall not include:  
 27.9      (i) drugs or products for which there is no federal 
 27.10  funding; 
 27.11     (ii) over-the-counter drugs, except for antacids, 
 27.12  acetaminophen, family planning products, aspirin, insulin, 
 27.13  products for the treatment of lice, vitamins for adults with 
 27.14  documented vitamin deficiencies, and vitamins for children under 
 27.15  the age of seven and pregnant or nursing women;, and 
 27.16     (iii) any other over-the-counter drug identified by the 
 27.17  commissioner, in consultation with the drug formulary committee, 
 27.18  as necessary, appropriate, and cost-effective for the treatment 
 27.19  of certain specified chronic diseases, conditions or disorders, 
 27.20  and this determination shall not be subject to the requirements 
 27.21  of chapter 14; 
 27.22     (iv) (iii) anorectics; and 
 27.23     (v) (iv) drugs for which medical value has not been 
 27.24  established. 
 27.25     The commissioner shall publish conditions for prohibiting 
 27.26  payment for specific drugs after considering the formulary 
 27.27  committee's recommendations.  
 27.28     (c) The basis for determining the amount of payment shall 
 27.29  be the lower of the actual acquisition costs of the drugs plus a 
 27.30  fixed dispensing fee; the maximum allowable cost set by the 
 27.31  federal government or by the commissioner plus the fixed 
 27.32  dispensing fee; or the usual and customary price charged to the 
 27.33  public.  The pharmacy dispensing fee shall be $3.85 $3.45.  
 27.34  Actual acquisition cost includes quantity and other special 
 27.35  discounts except time and cash discounts.  The actual 
 27.36  acquisition cost of a drug shall be estimated by the 
 28.1   commissioner, at average wholesale price minus nine percent.  
 28.2   The maximum allowable cost of a multisource drug may be set by 
 28.3   the commissioner and it shall be comparable to, but no higher 
 28.4   than, the maximum amount paid by other third-party payors in 
 28.5   this state who have maximum allowable cost programs.  
 28.6   Establishment of the amount of payment for drugs shall not be 
 28.7   subject to the requirements of the administrative procedure 
 28.8   act.  An additional dispensing fee of $.30 may be added to the 
 28.9   dispensing fee paid to pharmacists for legend drug prescriptions 
 28.10  dispensed to residents of long-term care facilities when a unit 
 28.11  dose blister card system, approved by the department, is used.  
 28.12  Under this type of dispensing system, the pharmacist must 
 28.13  dispense a 30-day supply of drug.  The National Drug Code (NDC) 
 28.14  from the drug container used to fill the blister card must be 
 28.15  identified on the claim to the department.  The unit dose 
 28.16  blister card containing the drug must meet the packaging 
 28.17  standards set forth in Minnesota Rules, part 6800.2700, that 
 28.18  govern the return of unused drugs to the pharmacy for reuse.  
 28.19  The pharmacy provider will be required to credit the department 
 28.20  for the actual acquisition cost of all unused drugs that are 
 28.21  eligible for reuse.  Over-the-counter medications must be 
 28.22  dispensed in the manufacturer's unopened package.  The 
 28.23  commissioner may permit the drug clozapine to be dispensed in a 
 28.24  quantity that is less than a 30-day supply.  Whenever a 
 28.25  generically equivalent product is available, payment shall be on 
 28.26  the basis of the actual acquisition cost of the generic drug, 
 28.27  unless the prescriber specifically indicates "dispense as 
 28.28  written - brand necessary" on the prescription as required by 
 28.29  section 151.21, subdivision 2.  
 28.30     Sec. 35.  Minnesota Statutes 1996, section 256B.0626, is 
 28.31  amended to read: 
 28.32     256B.0626 [ESTIMATION OF 50TH PERCENTILE OF PREVAILING 
 28.33  CHARGES.] 
 28.34     (a) The 50th percentile of the prevailing charge for the 
 28.35  base year identified in statute must be estimated by the 
 28.36  commissioner in the following situations: 
 29.1      (1) there were less than ten five billings in the calendar 
 29.2   year specified in legislation governing maximum payment rates; 
 29.3      (2) the service was not available in the calendar year 
 29.4   specified in legislation governing maximum payment rates; 
 29.5      (3) the payment amount is the result of a provider appeal; 
 29.6      (4) the procedure code description has changed since the 
 29.7   calendar year specified in legislation governing maximum payment 
 29.8   rates, and, therefore, the prevailing charge information 
 29.9   reflects the same code but a different procedure description; or 
 29.10     (5) the 50th percentile reflects a payment which is grossly 
 29.11  inequitable when compared with payment rates for procedures or 
 29.12  services which are substantially similar. 
 29.13     (b) When one of the situations identified in paragraph (a) 
 29.14  occurs, the commissioner shall use the following methodology to 
 29.15  reconstruct a rate comparable to the 50th percentile of the 
 29.16  prevailing rate: 
 29.17     (1) refer to information which exists for the first nine 
 29.18  four billings in the calendar year specified in legislation 
 29.19  governing maximum payment rates; or 
 29.20     (2) refer to surrounding or comparable procedure codes; or 
 29.21     (3) refer to the 50th percentile of years subsequent to the 
 29.22  calendar year specified in legislation governing maximum payment 
 29.23  rates, and reduce that amount by applying an appropriate 
 29.24  Consumer Price Index formula; or 
 29.25     (4) refer to relative value indexes; or 
 29.26     (5) refer to reimbursement information from other third 
 29.27  parties, such as Medicare. 
 29.28     Sec. 36.  Minnesota Statutes 1996, section 256B.064, 
 29.29  subdivision 1a, is amended to read: 
 29.30     Subd. 1a.  [GROUNDS FOR MONETARY RECOVERY AND SANCTIONS 
 29.31  AGAINST VENDORS.] The commissioner may seek monetary recovery 
 29.32  and impose sanctions against vendors of medical care for any of 
 29.33  the following:  fraud, theft, or abuse in connection with the 
 29.34  provision of medical care to recipients of public assistance; a 
 29.35  pattern of presentment of false or duplicate claims or claims 
 29.36  for services not medically necessary; a pattern of making false 
 30.1   statements of material facts for the purpose of obtaining 
 30.2   greater compensation than that to which the vendor is legally 
 30.3   entitled; suspension or termination as a Medicare vendor; and 
 30.4   refusal to grant the state agency access during regular business 
 30.5   hours to examine all records necessary to disclose the extent of 
 30.6   services provided to program recipients; and any reason for 
 30.7   which a vendor could be excluded from participation in the 
 30.8   Medicare program under section 1128, 1128A, or 1866(b)(2) of the 
 30.9   Social Security Act.  The determination of services not 
 30.10  medically necessary may be made by the commissioner in 
 30.11  consultation with a peer advisory task force appointed by the 
 30.12  commissioner on the recommendation of appropriate professional 
 30.13  organizations.  The task force expires as provided in section 
 30.14  15.059, subdivision 5. 
 30.15     Sec. 37.  Minnesota Statutes 1996, section 256B.064, 
 30.16  subdivision 1c, is amended to read: 
 30.17     Subd. 1c.  [METHODS OF MONETARY RECOVERY.] The commissioner 
 30.18  may obtain monetary recovery of the money erroneously paid, 
 30.19  regardless of the party responsible for the error leading to 
 30.20  improper payment, in addition to obtaining monetary recovery for 
 30.21  the conduct described in subdivision 1a.  The commissioner shall 
 30.22  obtain monetary recovery by the following methods:  assessing 
 30.23  and recovering money erroneously improperly paid and debiting 
 30.24  from future payments any money erroneously improperly paid, 
 30.25  except that.  Patterns need not be proven as a precondition to 
 30.26  monetary recovery for of erroneous or false claims, duplicate 
 30.27  claims, claims for services not medically necessary, or claims 
 30.28  based on false statements.  The commissioner may shall charge 
 30.29  interest on money to be recovered if the recovery is to be made 
 30.30  by installment payments or debits.  The interest charged shall 
 30.31  be the rate established by the commissioner of revenue under 
 30.32  section 270.75. 
 30.33     Sec. 38.  Minnesota Statutes 1996, section 256B.064, 
 30.34  subdivision 2, is amended to read: 
 30.35     Subd. 2.  [IMPOSITION OF MONETARY RECOVERY AND SANCTIONS.] 
 30.36  (a) The commissioner shall determine monetary amounts to be 
 31.1   recovered and the sanction to be imposed upon a vendor of 
 31.2   medical care for conduct described by subdivision 1a.  Except in 
 31.3   the case of a conviction for conduct described in subdivision 1a 
 31.4   as provided in paragraph (b), neither a monetary recovery nor a 
 31.5   sanction will be sought imposed by the commissioner without 
 31.6   prior notice and an opportunity for a hearing, pursuant 
 31.7   according to chapter 14, on the commissioner's proposed action, 
 31.8   provided that the commissioner may suspend or reduce payment to 
 31.9   a vendor of medical care, except a nursing home or convalescent 
 31.10  care facility, after notice and prior to the hearing if in the 
 31.11  commissioner's opinion that action is necessary to protect the 
 31.12  public welfare and the interests of the program. 
 31.13     (b) Except for a nursing home or convalescent care 
 31.14  facility, the commissioner may withhold or reduce payments to a 
 31.15  vendor of medical care without providing advance notice of such 
 31.16  withholding or reduction if either of the following occurs: 
 31.17     (1) the vendor is convicted of a crime involving the 
 31.18  conduct described in subdivision 1a; or 
 31.19     (2) the commissioner receives reliable evidence of fraud or 
 31.20  willful misrepresentation by the vendor. 
 31.21     (c) The commissioner must send notice of the withholding or 
 31.22  reduction of payments under paragraph (b) within five days of 
 31.23  taking such action.  The notice must: 
 31.24     (1) state that payments are being withheld according to 
 31.25  paragraph (b); 
 31.26     (2) except in the case of a conviction for conduct 
 31.27  described in subdivision 1a, state that the withholding is for a 
 31.28  temporary period and cite the circumstances under which 
 31.29  withholding will be terminated; 
 31.30     (3) identify the types of claims to which the withholding 
 31.31  applies; and 
 31.32     (4) inform the vendor of the right to submit written 
 31.33  evidence for consideration by the commissioner. 
 31.34     The withholding or reduction of payments will not continue 
 31.35  after the commissioner determines there is insufficient evidence 
 31.36  of fraud or willful misrepresentation by the vendor, or after 
 32.1   legal proceedings relating to the alleged fraud or willful 
 32.2   misrepresentation are completed, unless the commissioner has 
 32.3   sent notice of intention to impose monetary recovery or 
 32.4   sanctions under paragraph (a). 
 32.5      (d) Upon receipt of a notice under paragraph (a) that a 
 32.6   monetary recovery or sanction is to be imposed, a vendor may 
 32.7   request a contested case, as defined in section 14.02, 
 32.8   subdivision 3, by filing with the commissioner a written request 
 32.9   of appeal.  The appeal request must be received by the 
 32.10  commissioner no later than 30 days after the date the 
 32.11  notification of monetary recovery or sanction was mailed to the 
 32.12  vendor.  The appeal request must specify: 
 32.13     (1) each disputed item, the reason for the dispute, and an 
 32.14  estimate of the dollar amount involved for each disputed item; 
 32.15     (2) the computation that the vendor believes is correct; 
 32.16     (3) the authority in statute or rule upon which the vendor 
 32.17  relies for each disputed item; 
 32.18     (4) the name and address of the person or entity with whom 
 32.19  contacts may be made regarding the appeal; and 
 32.20     (5) other information required by the commissioner. 
 32.21     Sec. 39.  Minnesota Statutes 1996, section 256B.69, is 
 32.22  amended by adding a subdivision to read: 
 32.23     Subd. 5c.  [MEDICAL EDUCATION AND RESEARCH TRUST FUND.] (a) 
 32.24  Beginning January 1998 and each month after, the commissioner of 
 32.25  human services shall transfer 4.2 percent of the prepaid medical 
 32.26  assistance and prepaid general assistance medical care payment, 
 32.27  excluding nursing facility and elderly waiver payments, and 2.2 
 32.28  percent of the MinnesotaCare payment made in the same month to 
 32.29  the medical education and research trust fund established under 
 32.30  section 62J.69.  
 32.31     (b) The base rate prior to plan specific adjustments for MA 
 32.32  and GAMC capitation rates shall be reduced 6.3 percent for 
 32.33  Hennepin county, two percent for the remaining metropolitan 
 32.34  counties, and 1.6 percent for the nonmetropolitan Minnesota 
 32.35  counties, and 2.2 percent for MinnesotaCare in all counties.  
 32.36     (c) The payment to the fund shall not be adjusted for 
 33.1   subsequent changes to the capitation payments already paid.  
 33.2   This subdivision shall be effective for the month a federal 
 33.3   waiver allows federal financial participation in the transfer.  
 33.4   If the waiver delays implementation beyond January 1998, the 
 33.5   transfer shall include all payments that would have been made 
 33.6   under this subdivision if approved in the waiver. 
 33.7      Sec. 40.  Minnesota Statutes 1996, section 256B.69, 
 33.8   subdivision 6, is amended to read: 
 33.9      Subd. 6.  [SERVICE DELIVERY.] (a) Each demonstration 
 33.10  provider shall be responsible for the health care coordination 
 33.11  for eligible individuals.  Demonstration providers:  
 33.12     (1) shall authorize and arrange for the provision of all 
 33.13  needed health services including but not limited to the full 
 33.14  range of services listed in sections 256B.02, subdivision 8, and 
 33.15  256B.0625, except dental services provided under section 
 33.16  256B.037, in order to ensure appropriate health care is 
 33.17  delivered to enrollees; 
 33.18     (2) shall accept the prospective, per capita payment from 
 33.19  the commissioner in return for the provision of comprehensive 
 33.20  and coordinated health care services for eligible individuals 
 33.21  enrolled in the program; 
 33.22     (3) may contract with other health care and social service 
 33.23  practitioners to provide services to enrollees; and 
 33.24     (4) shall institute recipient grievance procedures 
 33.25  according to the method established by the project, utilizing 
 33.26  applicable requirements of chapter 62D.  Disputes not resolved 
 33.27  through this process shall be appealable to the commissioner as 
 33.28  provided in subdivision 11.  
 33.29     (b) Demonstration providers must comply with the standards 
 33.30  for claims settlement under section 72A.201, subdivisions 4, 5, 
 33.31  7, and 8, when contracting with other health care and social 
 33.32  service practitioners to provide services to enrollees.  A 
 33.33  demonstration provider must pay a clean claim, as defined in 
 33.34  Code of Federal Regulations, title 42, section 447.45(b), within 
 33.35  30 business days of the date of acceptance of the claim.  
 33.36     Sec. 41.  Minnesota Statutes 1996, section 256D.03, 
 34.1   subdivision 3, is amended to read: 
 34.2      Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
 34.3   (a) General assistance medical care may be paid for any person 
 34.4   who is not eligible for medical assistance under chapter 256B, 
 34.5   including eligibility for medical assistance based on a 
 34.6   spenddown of excess income according to section 256B.056, 
 34.7   subdivision 5, and: 
 34.8      (1) who is receiving assistance under section 256D.05, or 
 34.9   who is having a payment made on the person's behalf under 
 34.10  sections 256I.01 to 256I.06; or 
 34.11     (2)(i) who is a resident of Minnesota; and whose equity in 
 34.12  assets is not in excess of $1,000 per assistance unit.  No asset 
 34.13  test shall be applied to children and their parents living in 
 34.14  the same household.  Exempt assets, the reduction of excess 
 34.15  assets, and the waiver of excess assets must conform to the 
 34.16  medical assistance program in chapter 256B, with the following 
 34.17  exception:  the maximum amount of undistributed funds in a trust 
 34.18  that could be distributed to or on behalf of the beneficiary by 
 34.19  the trustee, assuming the full exercise of the trustee's 
 34.20  discretion under the terms of the trust, must be applied toward 
 34.21  the asset maximum; and 
 34.22     (ii) who has countable income not in excess of the 
 34.23  assistance standards established in section 256B.056, 
 34.24  subdivision 4, or whose excess income is spent down pursuant to 
 34.25  section 256B.056, subdivision 5, using a six-month budget 
 34.26  period, except that a one-month budget period must be used for 
 34.27  recipients residing in a long-term care facility.  The method 
 34.28  for calculating earned income disregards and deductions for a 
 34.29  person who resides with a dependent child under age 21 shall be 
 34.30  as specified in section 256.74, subdivision 1 follow section 
 34.31  256B.056, subdivision 1a.  However, if a disregard of $30 and 
 34.32  one-third of the remainder described in section 256.74, 
 34.33  subdivision 1, clause (4), has been applied to the wage earner's 
 34.34  income, the disregard shall not be applied again until the wage 
 34.35  earner's income has not been considered in an eligibility 
 34.36  determination for general assistance, general assistance medical 
 35.1   care, medical assistance, or aid to families with dependent 
 35.2   children MFIP-S for 12 consecutive months.  The Beginning 
 35.3   January 1, 1999, total countable family income will be applied 
 35.4   in determining the eligibility for each person who applies or is 
 35.5   eligible for general assistance medical care.  For purposes of 
 35.6   this subdivision, "family" means a parent and the parent's 
 35.7   biological or adoptive children under age 21; stepparent and 
 35.8   stepchildren under age 21; and spouses living together in the 
 35.9   same household.  It also includes children and stepchildren 
 35.10  under age 18 who are living out of the home voluntarily.  No 
 35.11  earned income and work expense deductions are permitted for a 
 35.12  person who does not reside with a dependent child under age 
 35.13  21 shall be the same as the method used to determine eligibility 
 35.14  for a person under section 256D.06, subdivision 1, except the 
 35.15  disregard of the first $50 of earned income is not allowed; or 
 35.16     (3) who would be eligible for medical assistance except 
 35.17  that the person resides in a facility that is determined by the 
 35.18  commissioner or the federal health care financing administration 
 35.19  to be an institution for mental diseases. 
 35.20     (b)(i) Eligibility is available for the month of 
 35.21  application, and for three months prior to application if the 
 35.22  person was eligible in those prior months.  A redetermination of 
 35.23  eligibility must occur every 12 months.  This clause expires 
 35.24  December 31, 1997. 
 35.25     (ii) Beginning January 1, 1998, eligibility is available 
 35.26  only for the month of application and for two months prior to 
 35.27  application if the person was eligible in those prior months.  A 
 35.28  redetermination of eligibility must occur every 12 months.  
 35.29     (iii) Beginning January 1, 1999, eligibility is available 
 35.30  only for the month of application and one month immediately 
 35.31  prior to the month of application if the person was eligible in 
 35.32  the prior month.  A redetermination of eligibility must occur 
 35.33  every 12 months.  
 35.34     (iv) Beginning January 1, 2000, covered services for the 
 35.35  month prior to the month of application shall be limited to 
 35.36  inpatient hospitalization, emergency room, and related 
 36.1   physician's services provided during the inpatient stay.  The 
 36.2   state agency shall inform recipients and providers annually 
 36.3   beginning in 1997 through 2000 of the phase-down of retroactive 
 36.4   eligibility.  A redetermination of eligibility must occur every 
 36.5   12 months. 
 36.6      (c) General assistance medical care is not available for a 
 36.7   person in a correctional facility unless the person is detained 
 36.8   by law for less than one year in a county correctional or 
 36.9   detention facility as a person accused or convicted of a crime, 
 36.10  or admitted as an inpatient to a hospital on a criminal hold 
 36.11  order, and the person is a recipient of general assistance 
 36.12  medical care at the time the person is detained by law or 
 36.13  admitted on a criminal hold order and as long as the person 
 36.14  continues to meet other eligibility requirements of this 
 36.15  subdivision.  
 36.16     (d) General assistance medical care is not available for 
 36.17  applicants or recipients who do not cooperate with the county 
 36.18  agency to meet the requirements of medical assistance. 
 36.19     (e) In determining the amount of assets of an individual, 
 36.20  there shall be included any asset or interest in an asset, 
 36.21  including an asset excluded under paragraph (a), that was given 
 36.22  away, sold, or disposed of for less than fair market value 
 36.23  within the 60 months preceding application for general 
 36.24  assistance medical care or during the period of eligibility.  
 36.25  Any transfer described in this paragraph shall be presumed to 
 36.26  have been for the purpose of establishing eligibility for 
 36.27  general assistance medical care, unless the individual furnishes 
 36.28  convincing evidence to establish that the transaction was 
 36.29  exclusively for another purpose.  For purposes of this 
 36.30  paragraph, the value of the asset or interest shall be the fair 
 36.31  market value at the time it was given away, sold, or disposed 
 36.32  of, less the amount of compensation received.  For any 
 36.33  uncompensated transfer, the number of months of ineligibility, 
 36.34  including partial months, shall be calculated by dividing the 
 36.35  uncompensated transfer amount by the average monthly per person 
 36.36  payment made by the medical assistance program to skilled 
 37.1   nursing facilities for the previous calendar year.  The 
 37.2   individual shall remain ineligible until this fixed period has 
 37.3   expired.  The period of ineligibility may exceed 30 months, and 
 37.4   a reapplication for benefits after 30 months from the date of 
 37.5   the transfer shall not result in eligibility unless and until 
 37.6   the period of ineligibility has expired.  The period of 
 37.7   ineligibility begins in the month the transfer was reported to 
 37.8   the county agency, or if the transfer was not reported, the 
 37.9   month in which the county agency discovered the transfer, 
 37.10  whichever comes first.  For applicants, the period of 
 37.11  ineligibility begins on the date of the first approved 
 37.12  application. 
 37.13     (f)(1) Beginning October 1, 1993, an undocumented alien or 
 37.14  a nonimmigrant is ineligible for general assistance medical care 
 37.15  other than emergency services.  For purposes of this 
 37.16  subdivision, a nonimmigrant is an individual in one or more of 
 37.17  the classes listed in United States Code, title 8, section 
 37.18  1101(a)(15), and an undocumented alien is an individual who 
 37.19  resides in the United States without the approval or 
 37.20  acquiescence of the Immigration and Naturalization Service. 
 37.21     (2) This subdivision does not apply to a child under age 
 37.22  18, to a Cuban or Haitian entrant as defined in Public Law 
 37.23  Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 
 37.24  is aged, blind, or disabled as defined in United States Code, 
 37.25  title 42, section 1382c(a)(1). 
 37.26     (3) For purposes of paragraph (f), "emergency services" has 
 37.27  the meaning given in Code of Federal Regulations, title 42, 
 37.28  section 440.255(b)(1), except that it also means services 
 37.29  rendered because of suspected or actual pesticide poisoning. 
 37.30     This subdivision expires June 30, 2000. 
 37.31     Sec. 42.  Minnesota Statutes 1996, section 256D.03, 
 37.32  subdivision 3b, is amended to read: 
 37.33     Subd. 3b.  [COOPERATION.] General assistance or general 
 37.34  assistance medical care applicants and recipients must cooperate 
 37.35  with the state and local agency to identify potentially liable 
 37.36  third-party payors and assist the state in obtaining third-party 
 38.1   payments.  Cooperation includes identifying any third party who 
 38.2   may be liable for care and services provided under this chapter 
 38.3   to the applicant, recipient, or any other family member for whom 
 38.4   application is made and providing relevant information to assist 
 38.5   the state in pursuing a potentially liable third party.  General 
 38.6   assistance medical care applicants and recipients must cooperate 
 38.7   by providing information about any group health plan in which 
 38.8   they may be eligible to enroll.  They must cooperate with the 
 38.9   state and local agency in determining if the plan is 
 38.10  cost-effective.  If the plan is determined cost-effective and 
 38.11  the premium will be paid by the state or local agency or is 
 38.12  available at no cost to the person, they must enroll or remain 
 38.13  enrolled in the group health plan.  Cost-effective insurance 
 38.14  premiums approved for payment by the state agency and paid by 
 38.15  the local agency are eligible for reimbursement according to 
 38.16  subdivision 6.  
 38.17     This subdivision expires June 30, 2000. 
 38.18     Sec. 43.  Minnesota Statutes 1996, section 256D.03, 
 38.19  subdivision 4, is amended to read: 
 38.20     Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
 38.21  For a person who is eligible under subdivision 3, paragraph (a), 
 38.22  clause (3), general assistance medical care covers, except as 
 38.23  provided in paragraph (c): 
 38.24     (1) inpatient hospital services; 
 38.25     (2) outpatient hospital services; 
 38.26     (3) services provided by Medicare certified rehabilitation 
 38.27  agencies; 
 38.28     (4) prescription drugs and other products recommended 
 38.29  through the process established in section 256B.0625, 
 38.30  subdivision 13; 
 38.31     (5) equipment necessary to administer insulin and 
 38.32  diagnostic supplies and equipment for diabetics to monitor blood 
 38.33  sugar level; 
 38.34     (6) eyeglasses and eye examinations provided by a physician 
 38.35  or optometrist; 
 38.36     (7) hearing aids; 
 39.1      (8) prosthetic devices; 
 39.2      (9) laboratory and X-ray services; 
 39.3      (10) physician's services; 
 39.4      (11) medical transportation; 
 39.5      (12) chiropractic services as covered under the medical 
 39.6   assistance program; 
 39.7      (13) podiatric services; 
 39.8      (14) dental services; 
 39.9      (15) outpatient services provided by a mental health center 
 39.10  or clinic that is under contract with the county board and is 
 39.11  established under section 245.62; 
 39.12     (16) day treatment services for mental illness provided 
 39.13  under contract with the county board; 
 39.14     (17) prescribed medications for persons who have been 
 39.15  diagnosed as mentally ill as necessary to prevent more 
 39.16  restrictive institutionalization; 
 39.17     (18) case management services for a person with serious and 
 39.18  persistent mental illness who would be eligible for medical 
 39.19  assistance except that the person resides in an institution for 
 39.20  mental diseases; 
 39.21     (19) psychological services, medical supplies and 
 39.22  equipment, and Medicare premiums, coinsurance and deductible 
 39.23  payments; 
 39.24     (20) medical equipment not specifically listed in this 
 39.25  paragraph when the use of the equipment will prevent the need 
 39.26  for costlier services that are reimbursable under this 
 39.27  subdivision; 
 39.28     (21) services performed by a certified pediatric nurse 
 39.29  practitioner, a certified family nurse practitioner, a certified 
 39.30  adult nurse practitioner, a certified obstetric/gynecological 
 39.31  nurse practitioner, or a certified geriatric nurse practitioner 
 39.32  in independent practice, if the services are otherwise covered 
 39.33  under this chapter as a physician service, and if the service is 
 39.34  within the scope of practice of the nurse practitioner's license 
 39.35  as a registered nurse, as defined in section 148.171; and 
 39.36     (22) services of a certified public health nurse or a 
 40.1   registered nurse practicing in a public health nursing clinic 
 40.2   that is a department of, or that operates under the direct 
 40.3   authority of, a unit of government, if the service is within the 
 40.4   scope of practice of the public health nurse's license as a 
 40.5   registered nurse, as defined in section 148.171.  
 40.6      (b) Except as provided in paragraph (c), for a recipient 
 40.7   who is eligible under subdivision 3, paragraph (a), clause (1) 
 40.8   or (2), general assistance medical care covers the services 
 40.9   listed in paragraph (a) with the exception of special 
 40.10  transportation services. 
 40.11     (c) Gender reassignment surgery and related services are 
 40.12  not covered services under this subdivision unless the 
 40.13  individual began receiving gender reassignment services prior to 
 40.14  July 1, 1995.  
 40.15     (d) In order to contain costs, the commissioner of human 
 40.16  services shall select vendors of medical care who can provide 
 40.17  the most economical care consistent with high medical standards 
 40.18  and shall where possible contract with organizations on a 
 40.19  prepaid capitation basis to provide these services.  The 
 40.20  commissioner shall consider proposals by counties and vendors 
 40.21  for prepaid health plans, competitive bidding programs, block 
 40.22  grants, or other vendor payment mechanisms designed to provide 
 40.23  services in an economical manner or to control utilization, with 
 40.24  safeguards to ensure that necessary services are provided.  
 40.25  Before implementing prepaid programs in counties with a county 
 40.26  operated or affiliated public teaching hospital or a hospital or 
 40.27  clinic operated by the University of Minnesota, the commissioner 
 40.28  shall consider the risks the prepaid program creates for the 
 40.29  hospital and allow the county or hospital the opportunity to 
 40.30  participate in the program in a manner that reflects the risk of 
 40.31  adverse selection and the nature of the patients served by the 
 40.32  hospital, provided the terms of participation in the program are 
 40.33  competitive with the terms of other participants considering the 
 40.34  nature of the population served.  Payment for services provided 
 40.35  pursuant to this subdivision shall be as provided to medical 
 40.36  assistance vendors of these services under sections 256B.02, 
 41.1   subdivision 8, and 256B.0625.  For payments made during fiscal 
 41.2   year 1990 and later years, the commissioner shall consult with 
 41.3   an independent actuary in establishing prepayment rates, but 
 41.4   shall retain final control over the rate methodology.  
 41.5   Notwithstanding the provisions of subdivision 3, an individual 
 41.6   who becomes ineligible for general assistance medical care 
 41.7   because of failure to submit income reports or recertification 
 41.8   forms in a timely manner, shall remain enrolled in the prepaid 
 41.9   health plan and shall remain eligible for general assistance 
 41.10  medical care coverage through the last day of the month in which 
 41.11  the enrollee became ineligible for general assistance medical 
 41.12  care. 
 41.13     (e) The commissioner of human services may reduce payments 
 41.14  provided under sections 256D.01 to 256D.21 and 261.23 in order 
 41.15  to remain within the amount appropriated for general assistance 
 41.16  medical care, within the following restrictions. 
 41.17     For the period July 1, 1985 to December 31, 1985, 
 41.18  reductions below the cost per service unit allowable under 
 41.19  section 256.966, are permitted only as follows:  payments for 
 41.20  inpatient and outpatient hospital care provided in response to a 
 41.21  primary diagnosis of chemical dependency or mental illness may 
 41.22  be reduced no more than 30 percent; payments for all other 
 41.23  inpatient hospital care may be reduced no more than 20 percent.  
 41.24  Reductions below the payments allowable under general assistance 
 41.25  medical care for the remaining general assistance medical care 
 41.26  services allowable under this subdivision may be reduced no more 
 41.27  than ten percent. 
 41.28     For the period January 1, 1986 to December 31, 1986, 
 41.29  reductions below the cost per service unit allowable under 
 41.30  section 256.966 are permitted only as follows:  payments for 
 41.31  inpatient and outpatient hospital care provided in response to a 
 41.32  primary diagnosis of chemical dependency or mental illness may 
 41.33  be reduced no more than 20 percent; payments for all other 
 41.34  inpatient hospital care may be reduced no more than 15 percent.  
 41.35  Reductions below the payments allowable under general assistance 
 41.36  medical care for the remaining general assistance medical care 
 42.1   services allowable under this subdivision may be reduced no more 
 42.2   than five percent. 
 42.3      For the period January 1, 1987 to June 30, 1987, reductions 
 42.4   below the cost per service unit allowable under section 256.966 
 42.5   are permitted only as follows:  payments for inpatient and 
 42.6   outpatient hospital care provided in response to a primary 
 42.7   diagnosis of chemical dependency or mental illness may be 
 42.8   reduced no more than 15 percent; payments for all other 
 42.9   inpatient hospital care may be reduced no more than ten 
 42.10  percent.  Reductions below the payments allowable under medical 
 42.11  assistance for the remaining general assistance medical care 
 42.12  services allowable under this subdivision may be reduced no more 
 42.13  than five percent.  
 42.14     For the period July 1, 1987 to June 30, 1988, reductions 
 42.15  below the cost per service unit allowable under section 256.966 
 42.16  are permitted only as follows:  payments for inpatient and 
 42.17  outpatient hospital care provided in response to a primary 
 42.18  diagnosis of chemical dependency or mental illness may be 
 42.19  reduced no more than 15 percent; payments for all other 
 42.20  inpatient hospital care may be reduced no more than five percent.
 42.21  Reductions below the payments allowable under medical assistance 
 42.22  for the remaining general assistance medical care services 
 42.23  allowable under this subdivision may be reduced no more than 
 42.24  five percent. 
 42.25     For the period July 1, 1988 to June 30, 1989, reductions 
 42.26  below the cost per service unit allowable under section 256.966 
 42.27  are permitted only as follows:  payments for inpatient and 
 42.28  outpatient hospital care provided in response to a primary 
 42.29  diagnosis of chemical dependency or mental illness may be 
 42.30  reduced no more than 15 percent; payments for all other 
 42.31  inpatient hospital care may not be reduced.  Reductions below 
 42.32  the payments allowable under medical assistance for the 
 42.33  remaining general assistance medical care services allowable 
 42.34  under this subdivision may be reduced no more than five percent. 
 42.35     There shall be no copayment required of any recipient of 
 42.36  benefits for any services provided under this subdivision.  A 
 43.1   hospital receiving a reduced payment as a result of this section 
 43.2   may apply the unpaid balance toward satisfaction of the 
 43.3   hospital's bad debts. 
 43.4      (f) Any county may, from its own resources, provide medical 
 43.5   payments for which state payments are not made. 
 43.6      (g) Chemical dependency services that are reimbursed under 
 43.7   chapter 254B must not be reimbursed under general assistance 
 43.8   medical care. 
 43.9      (h) The maximum payment for new vendors enrolled in the 
 43.10  general assistance medical care program after the base year 
 43.11  shall be determined from the average usual and customary charge 
 43.12  of the same vendor type enrolled in the base year. 
 43.13     (i) The conditions of payment for services under this 
 43.14  subdivision are the same as the conditions specified in rules 
 43.15  adopted under chapter 256B governing the medical assistance 
 43.16  program, unless otherwise provided by statute or rule. 
 43.17     This subdivision expires June 30, 2000. 
 43.18     Sec. 44.  Minnesota Statutes 1996, section 256G.05, 
 43.19  subdivision 2, is amended to read: 
 43.20     Subd. 2.  [NON-MINNESOTA RESIDENTS.] State residence is not 
 43.21  required for receiving emergency assistance in the general 
 43.22  assistance, general assistance medical care, and Minnesota 
 43.23  supplemental aid programs only.  The receipt of emergency 
 43.24  assistance must not be used as a factor in determining county or 
 43.25  state residence. 
 43.26     Sec. 45.  [REPEALER.] 
 43.27     (a) Minnesota Statutes 1996, section 256B.0625, subdivision 
 43.28  13b, is repealed the day following final enactment. 
 43.29     (b) Minnesota Rules, part 9505.1000, is repealed July 1, 
 43.30  1997.