HF 1658

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; health care providers gross receipts tax; providing for
responsibilities of third-party purchasers; authorizing itemization of tax on certain
billings; amending Minnesota Statutes 2006, section 295.582, subdivision 1.

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

Section 1.

Minnesota Statutes 2006, section 295.582, subdivision 1, is amended to read:

Subdivision 1.

Tax expense transfer.

(a) A hospital, surgical center, or health care
provider that is subject to a tax under section 295.52, or a pharmacy that has paid additional
expense transferred under this section by a wholesale drug distributor, may transfer
additional expense generated by section 295.52 obligations on to all third-party contracts
for the purchase of health care services on behalf of a patient or consumer. Nothing
shall prohibit a pharmacy from transferring the additional expense generated under
section 295.52 to a pharmacy benefits manager. The additional expense transferred to the
third-party purchaser or a pharmacy benefits manager must not exceed the tax percentage
specified in section 295.52 multiplied against the gross revenues received under the
third-party contract, and the tax percentage specified in section 295.52 multiplied against
co-payments and deductibles paid by the individual patient or consumer. new text begin A health care
provider who chooses to transfer the tax specified in section may itemize the tax on
patient billings. new text end The expense must not be generated on revenues derived from payments
that are excluded from the tax under section 295.53. All third-party purchasers of health
care services including, but not limited to, third-party purchasers regulated under chapter
60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 471.61 or
471.617, and pharmacy benefits managers must pay the transferred expense in addition to
any payments due under existing contracts with the hospital, surgical center, pharmacy, or
health care provider, to the extent allowed under federal law. A third-party purchaser of
health care services includes, but is not limited to, a health carrier or community integrated
service network that pays for health care services on behalf of patients or that reimburses,
indemnifies, compensates, or otherwise insures patients for health care services. For
purposes of this section, a pharmacy benefits manager means an entity that performs
pharmacy benefits management. A third-party purchaser or pharmacy benefits manager
shall comply with this section regardless of whether the third-party purchaser or pharmacy
benefits manager is a for-profit, not-for-profit, or nonprofit entity new text begin or whether the health care
provider has chosen to itemize the tax on patient billings. If the third-party purchaser's
contract limits provider payment to a specified amount, such as an usual and customary
fee schedule, the third-party purchaser must still pay the tax transferred or itemized by a
health care provider. A third-party purchaser is also responsible for reimbursing providers
for the percentage tax levied on co-payments or deductibles paid by the insured new text end . A
wholesale drug distributor may transfer additional expense generated by section 295.52
obligations to entities that purchase from the wholesaler, and the entities must pay the
additional expense. Nothing in this section limits the ability of a hospital, surgical center,
pharmacy, wholesale drug distributor, or health care provider to recover all or part of the
section 295.52 obligation by other methods, including increasing fees or charges.

(b) Any hospital, surgical center, or health care provider subject to a tax under
section 295.52 or a pharmacy that has paid additional expense transferred under this
section by a wholesale drug distributor may file a complaint with the commissioner
responsible for regulating the third-party purchaser if at any time the third-party purchaser
fails to comply with paragraph (a). new text begin The documentation shall include information relating
to a third-party purchaser's means for compliance with paragraph (a) for health care
providers who itemize the tax on patient billings.
new text end

(c) If the commissioner responsible for regulating the third-party purchaser finds
at any time that the third-party purchaser has not complied with paragraph (a), the
commissioner may take enforcement action against a third-party purchaser which is
subject to the commissioner's regulatory jurisdiction and which does not allow a hospital,
surgical center, pharmacy, or provider to pass-through the tax. The commissioner may
by order fine or censure the third-party purchaser or revoke or suspend the certificate
of authority or license of the third-party purchaser to do business in this state if the
commissioner finds that the third-party purchaser has not complied with this section.
The third-party purchaser may appeal the commissioner's order through a contested case
hearing in accordance with chapter 14. new text begin If it is found that a third-party purchaser has
violated this section, the third-party purchaser is subject to a civil action by a health care
provider for actual damages incurred because of the failure of the third-party purchaser to
comply with paragraph (a).
new text end