HF 1862

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; modifying expenditure reporting
requirements; establishing a separate reporting
procedure for expenditures over $5,000,000;
restricting certain medical referrals; appropriating
money; amending Minnesota Statutes 2004, section
62J.17, subdivision 2; proposing coding for new law in
Minnesota Statutes, chapter 62J.

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

Section 1.

Minnesota Statutes 2004, section 62J.17,
subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of this section, the
terms defined in this subdivision have the meanings given.

(a) "Access" means the financial, temporal, and geographic
availability of health care to individuals who need it.

(b) "Capital expenditure" means an expenditure which, under
generally accepted accounting principles, is not properly
chargeable as an expense of operation and maintenance.

(c) "Cost" means the amount paid by consumers or third
party payers for health care services or products.

(d) "Date of the major spending commitment" means the date
the provider formally obligated itself to the major spending
commitment. The obligation may be incurred by entering into a
contract, making a down payment, issuing bonds or entering a
loan agreement to provide financing for the major spending
commitment, or taking some other formal, tangible action
evidencing the provider's intention to make the major spending
commitment.

(e) "Health care service" means:

(1) a service or item that would be covered by the medical
assistance program under chapter 256B if provided in accordance
with medical assistance requirements to an eligible medical
assistance recipient; and

(2) a service or item that would be covered by medical
assistance except that it is characterized as experimental,
cosmetic, or voluntary.

"Health care service" does not include retail,
over-the-counter sales of nonprescription drugs and other retail
sales of health-related products that are not generally paid for
by medical assistance and other third-party coverage.

(f) "Major spending commitment" means an expenditure in
excess of $1,000,000 new text begin , but less than or equal to $5,000,000, new text end for:

(1) acquisition of a unit of medical equipment;

(2) a capital expenditure for a single project for the
purposes of providing health care services, other than for the
acquisition of medical equipment;

(3) offering a new specialized service not offered before;

(4) planning for an activity that would qualify as a major
spending commitment under this paragraph; or

(5) a project involving a combination of two or more of the
activities in clauses (1) to (4).

The cost of acquisition of medical equipment, and the
amount of a capital expenditure, is the total cost to the
provider regardless of whether the cost is distributed over time
through a lease arrangement or other financing or payment
mechanism.

(g) "Medical equipment" means fixed and movable equipment
that is used by a provider in the provision of a health care
service. "Medical equipment" includes, but is not limited to,
the following:

(1) an extracorporeal shock wave lithotripter;

(2) a computerized axial tomography (CAT) scanner;

(3) a magnetic resonance imaging (MRI) unit;

(4) a positron emission tomography (PET) scanner; and

(5) emergency and nonemergency medical transportation
equipment and vehicles.

(h) "New specialized service" means a specialized health
care procedure or treatment regimen offered by a provider that
was not previously offered by the provider, including, but not
limited to:

(1) cardiac catheterization services involving high-risk
patients as defined in the Guidelines for Coronary Angiography
established by the American Heart Association and the American
College of Cardiology;

(2) heart, heart-lung, liver, kidney, bowel, or pancreas
transplantation service, or any other service for
transplantation of any other organ;

(3) megavoltage radiation therapy;

(4) open heart surgery;

(5) neonatal intensive care services; and

(6) any new medical technology for which premarket approval
has been granted by the United States Food and Drug
Administration, excluding implantable and wearable devices.

Sec. 2.

new text begin [62J.18] PROVIDER REPORTING IN EXCESS OF
$5,000,000.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability; definitions. new text end

new text begin (a) This
section applies to providers and to persons who would become
providers after making the expenditures described in subdivision
2.
new text end

new text begin (b) For purposes of this section, the terms used have the
meanings given in section 62J.17, subdivision 2, except that
"major spending commitment" means an expenditure in excess of
$5,000,000.
new text end

new text begin Subd. 2. new text end

new text begin Reporting requirement. new text end

new text begin (a) A provider that
intends to make a major spending commitment in excess of
$5,000,000 for the acquisition, by purchase or lease, of a unit
of medical equipment or in excess of $5,000,000 for a single
capital project for the purposes of providing health care
services must file a report with the commissioner at least 60
days before committing to make the expenditure. The report must
contain the information described in section 62J.17, subdivision
4a, paragraphs (b) and (c).
new text end

new text begin (b) The commissioner shall maintain a database to track
expenditures reported under this subdivision.
new text end

new text begin (c) The commissioner shall maintain a list of all persons
who have registered with the commissioner for the purpose of
receiving notice by electronic mail of a report filed under this
subdivision. The commissioner shall, within 15 days of
receiving an expenditure report, provide notice of the report by
electronic mail to all persons on the list and submit a summary
of the report for publication in the State Register. The notice
must include either the report or an easily understandable
description of the proposed expenditure in the report. The
publication in the State Register must include an easily
understandable description of the proposed expenditure in the
report and information on how to obtain a copy of the report.
In addition, the commissioner shall make reasonable efforts to
notify persons or classes of persons who may be significantly
affected by the proposed expenditure in the report. The
commissioner may recover the reasonable costs incurred in
providing notice under this paragraph through costs paid by
third parties involved in proceedings under this section.
new text end

new text begin (d) No provider may commit to making the expenditure until
the procedures described in this section are completed.
new text end

new text begin Subd. 3. new text end

new text begin Public meeting. new text end

new text begin (a) Within 30 days of the State
Register publication under subdivision 2, a third party may
request a public meeting on expenditures that exceed
$5,000,000. The public meeting shall serve as an informational
forum for the provider to answer inquiries of interested third
parties.
new text end

new text begin (b) The commissioner shall arrange for and coordinate the
meeting on an expedited basis. The party requesting the meeting
shall pay the commissioner for the commissioner's cost of the
meeting, as determined by the commissioner. Money received by
the commissioner for reimbursement under this section is
appropriated to the commissioner for the purpose of
administering this section.
new text end

new text begin Subd. 4. new text end

new text begin Public meeting exceptions. new text end

new text begin (a) Subdivisions 3,
5, and 6 do not apply to an expenditure:
new text end

new text begin (1) to replace existing equipment with comparable equipment
used for direct patient care. Upgrades of equipment beyond the
current model or comparable model are subject to subdivisions 3,
5, and 6;
new text end

new text begin (2) made by a research and teaching institution for
purposes of conducting medical education, medical research
supported or sponsored by a medical school or by a federal or
foundation grant, or clinical trials;
new text end

new text begin (3) to repair, remodel, or replace existing buildings or
fixtures if, in the judgment of the commissioner, the project
does not involve a substantial expansion of service capacity or
a substantial change in the nature of health care services
provided;
new text end

new text begin (4) for building maintenance including heating, water,
electricity, and other maintenance-related expenditures;
new text end

new text begin (5) for activities not directly related to the delivery of
patient care services, including food service, laundry,
housekeeping, and other service-related activities; and
new text end

new text begin (6) for computer equipment or data systems not directly
related to the delivery of patient care services, including
computer equipment or data systems related to medical record
automation.
new text end

new text begin (b) In addition to the exceptions listed in paragraph (a),
subdivisions 3, 5, and 6 do not apply to mergers, acquisitions,
and other changes in ownership or control that, in the judgment
of the commissioner, do not involve a substantial expansion of
service capacity or a substantial change in the nature of health
care services provided.
new text end

new text begin Subd. 5. new text end

new text begin Hearing. new text end

new text begin (a) Within 30 days from the date of a
public meeting under subdivision 3, a third party may request
that the planned expenditure be subject to a hearing before an
administrative law judge. The hearing and review of the planned
expenditure shall be according to the relevant provisions of the
Administrative Procedure Act, except as otherwise provided in
this subdivision.
new text end

new text begin (b) A hearing under this subdivision is a public proceeding.
new text end

new text begin (c) A party to the hearing must pay for the party's
representation before the administrative law judge. The party
requesting the hearing shall pay the costs assessed by the chief
administrative law judge according to section 14.53. Money
received for services rendered by the Office of Administrative
Hearings under this subdivision shall be deposited in the state
Office of Administrative Hearings account and appropriated
according to section 14.54.
new text end

new text begin (d) A hearing requested under this subdivision must proceed
on an expedited basis.
new text end

new text begin Subd. 6. new text end

new text begin Hearing criteria; decision; rules. new text end

new text begin (a) The
administrative law judge shall consider the following criteria:
new text end

new text begin (1) need and access, including, but not limited to:
new text end

new text begin (i) the need of the population served or to be served by
the proposed health services for those services;
new text end

new text begin (ii) the project's contribution to meeting the needs of the
medically underserved, including persons in rural areas,
low-income persons, racial and ethnic minorities, persons with
disabilities, and the elderly, as well as the extent to which
medically underserved residents in the provider's service area
are likely to have access to the proposed health service; and
new text end

new text begin (iii) the distance, convenience, cost of transportation,
and accessibility to health services for those to be served by
the proposed health services;
new text end

new text begin (2) quality of health care, including, but not limited to:
new text end

new text begin (i) the impact of the proposed service on the quality of
health services available to those proposed to be served by the
project; and
new text end

new text begin (ii) the impact of the proposed service on the quality of
health services offered by other providers;
new text end

new text begin (3) cost of health care, including, but not limited to:
new text end

new text begin (i) the financial feasibility of the proposal;
new text end

new text begin (ii) probable impact of the proposal on the costs of and
charges for health services provided by the person proposing the
service;
new text end

new text begin (iii) probable impact of the proposal on the costs of and
charges for health services provided by other providers;
new text end

new text begin (iv) probable impact of the proposal on reimbursement for
the proposed services; and
new text end

new text begin (v) the relationship, including the organizational
relationship, of the proposed health services to ancillary or
support services;
new text end

new text begin (4) alternatives available to the provider, including, but
not limited to:
new text end

new text begin (i) the availability of alternative, less costly, or more
effective methods of providing the proposed health services;
new text end

new text begin (ii) the relationship of the proposed project to the
long-range development plan, if any, of the person or entity
providing or proposing the services; and
new text end

new text begin (iii) possible sharing or cooperative arrangements among
existing facilities and providers; and
new text end

new text begin (5) other considerations, including, but not limited to:
new text end

new text begin (i) the best interests of the patients, including conflicts
of interest that may be present in influencing the utilization
of the services, facility, or equipment relating to the
expenditures;
new text end

new text begin (ii) special needs and circumstances of those entities that
provide a substantial portion of their services or resources, or
both, to individuals not residing in the immediate geographic
area in which the entities are located, which entities may
include, but are not limited to, medical and other health
professional schools, multidisciplinary clinics, and specialty
centers;
new text end

new text begin (iii) the special needs and circumstances of biomedical and
behavioral research projects designed to meet a national need
and for which local conditions offer special advantages; and
new text end

new text begin (iv) the impact of the proposed project on fostering
competition between providers.
new text end

new text begin (b) The commissioner may adopt rules to establish
additional hearing criteria.
new text end

new text begin (c) After applying the criteria under this subdivision, the
administrative law judge shall make findings of fact as to
whether the planned expenditure is needed to ensure quality
health care. If the administrative law judge finds that the
planned expenditure is not needed to ensure quality health care,
the provider may not undertake the planned expenditure. The
order of the administrative law judge constitutes the final
decision in the case as applicable under section 14.62. A final
decision in the case is entitled to judicial review under
sections 14.63 to 14.69. In the event of an appeal, each party
must pay the party's respective costs, except that the party
bringing the appeal must pay all costs if the appeal is
unsuccessful.
new text end

new text begin Subd. 7. new text end

new text begin Enforcement. new text end

new text begin The commissioner may enforce this
section by denying or refusing to reissue the permit, license,
registration, or certificate of a provider that does not comply
with this section, according to section 144.99, subdivision 8.
Compliance with this section is a condition of medical
assistance reimbursement. The commissioner of employee
relations shall not permit a provider that does not comply with
this section to provide services to state employees. The
commissioner may obtain an injunction prohibiting the provider
from making the planned expenditure. In addition, the
commissioner may assess fines against a provider that incurs an
expenditure that is found by the commissioner as not needed to
ensure quality health care according to this section in an
amount up to triple the amount of the expenditure.
new text end

new text begin Subd. 8. new text end

new text begin Retrospective review. new text end

new text begin Nothing in this section
or section 62J.17 shall be construed to prohibit the
commissioner from conducting a retrospective review of an
expenditure in excess of $5,000,000 according to section 62J.17,
subdivision 5a.
new text end

Sec. 3.

new text begin [62J.24] MEDICAL REFERRALS.
new text end

new text begin (a) No individual physician or physician group engaged in a
solo or group practice, whether conducted for profit or not for
profit and however organized, that is wholly owned and
controlled by one or more of the physicians so associated, or,
in the case of a not-for-profit organization, its only members
are one or more of the physicians so associated, shall refer a
patient for services to a health care entity that provides
services through use of magnetic resonance imaging, positron
emission tomography, linear accelerator equipment, or
computerized axial tomography, if:
new text end

new text begin (1) the physician holds a direct or indirect ownership or
investment interest in the entity;
new text end

new text begin (2) the physician's immediate family holds a direct or
indirect ownership or investment interest in the entity; or
new text end

new text begin (3) the physician or member of the physician's immediate
family has any direct or indirect arrangement involving
compensation with the entity.
new text end

new text begin (b) For purposes of this section, the following definitions
have the meanings given them:
new text end

new text begin (1) "control" means the ownership of at least 50 percent of
the equity in an entity or the ability to appoint at least 50
percent of the members of the governing body of the entity;
new text end

new text begin (2) "health care entity" means an entity that provides
health care-related testing, diagnosis, or treatment of
individuals, but does not include a hospital, hospital
affiliate, or a constituent of a hospital system;
new text end

new text begin (3) "hospital affiliate" means any entity that, directly or
indirectly, is controlled by, controls, or is under common
control with a hospital or a joint venture in which the hospital
participates;
new text end

new text begin (4) "hospital system" means an organized group of health
care providers in which at least one constituent is a
not-for-profit hospital; and
new text end

new text begin (5) "investment interest" means an ownership or investment
interest through equity, debt, leasehold interest, or other
means, regardless of whether the interest is direct or indirect.
new text end

new text begin (c) The commissioner shall assess a fine against a person
who violates this section. The amount of the fine shall be not
less than $25,000. Any continuing violation of this section is
punishable by a fine of not less than $25,000 and not more than
$100,000 per day of operation and by one or both of the
following:
new text end

new text begin (1) referral of the physician to the Board of Medical
Practice for appropriate disciplinary action; and
new text end

new text begin (2) revocation of the health care entity's license or
registration.
new text end

new text begin (d) The attorney general may proceed on behalf of the state
to enforce penalties that are due and payable under this section
in any manner provided by law for the collection of debts and
may bring other enforcement action, as described in section
144.991, subdivision 7.
new text end