HF 1862

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; establishing evidence-based practice standards; requiring a
report on uncompensated care and reporting on acquired infections; authorizing
a study on alternative and complimentary health care; permitting discounted
health care payments under certain circumstances; modifying provisions in
the public employees insurance program and Minnesota employees insurance
program; modifying private sector health coverage provisions; allowing service
cooperatives to contract for goods and services under certain conditions; adding
a provision for medical liability; appropriating money; amending Minnesota
Statutes 2004, sections 43A.316, subdivisions 1, 2, 3, 4, 5, 6, 6a, 7, 8, 10,
by adding subdivisions; 43A.317; 62D.095, subdivisions 3, 4, by adding
a subdivision; 72A.20, by adding a subdivision; 123A.21, subdivision 7;
144.698, by adding a subdivision; 151.214, subdivision 1; 471.61, by adding a
subdivision; 471.617, subdivision 3, by adding a subdivision; Minnesota Statutes
2005 Supplement, section 214.071; proposing coding for new law in Minnesota
Statutes, chapters 62J; 62M; 62Q; 144; 214; 604; repealing Minnesota Statutes
2005 Supplement, section 62Q.251.

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

ARTICLE 1

HEALTH CARE COST-CONTAINMENT

Section 1.

new text begin [62J.431] EVIDENCE-BASED PRACTICE STANDARDS AND
GUIDELINES.
new text end

new text begin Subdivision 1. new text end

new text begin Health-related boards and provider organizations; practice
standards. new text end

new text begin The health-related boards, under chapter 148, or professional provider
organizations may establish practice standards for treating patients within their respective
scopes of practice. The boards or provider organizations may utilize the services of
appropriate public or private entities to facilitate the development or review of practice
standards and evidence-based guidelines. Each board or provider organization that has
established or ratified existing standards shall report these standards to the legislative
committees with jurisdiction over the public health occupations by January 15, 2007, and
shall report subsequent changes annually thereafter. If a board or provider organization
has existing standards, nothing in this section requires a board or provider organization to
establish new standards. Nothing in this section shall require a health plan company to
cover treatments, testing, or imaging, based on standards developed under this section.
new text end

new text begin Subd. 2. new text end

new text begin Criteria for evidence-based guidelines. new text end

new text begin Guidelines identified under this
section must meet the following criteria:
new text end

new text begin (1) the scope and application are clear;
new text end

new text begin (2) authorship is stated and any conflicts of interest disclosed;
new text end

new text begin (3) authors represent all pertinent clinical fields or other means of input have been
used;
new text end

new text begin (4) the development process is explicitly stated;
new text end

new text begin (5) the guideline is grounded in evidence;
new text end

new text begin (6) the evidence is cited and graded;
new text end

new text begin (7) the document itself is clear and practical;
new text end

new text begin (8) the document is flexible in use, with exceptions noted or provided for with
general statements;
new text end

new text begin (9) measures are included for use in systems improvement; and
new text end

new text begin (10) the guideline has scheduled reviews and updating.
new text end

Sec. 2.

new text begin [62J.62] ELECTRONIC BILLING ASSISTANCE.
new text end

new text begin The commissioner of human services shall, out of existing resources, encourage and
assist providers to adopt and use electronic billing for state programs, including but not
limited to the provision of training.
new text end

Sec. 3.

new text begin [62J.85] PROVISION OF INFORMATION ON PHARMACEUTICAL
ASSISTANCE PROGRAMS.
new text end

new text begin A medical clinic must make available to patients, in a public area of the clinic,
brochures on programs offered by pharmaceutical manufacturers that provide free or
discounted drugs or provide coverage for prescription drugs. This requirement applies
only to brochures that are made available to clinics free of charge by pharmaceutical
manufacturers. If a Web site is developed that provides this information, a public posting
describing the Web site complies with this requirement.
new text end

Sec. 4.

new text begin [62M.071] PRIOR AUTHORIZATION.
new text end

new text begin Health plan companies, in cooperation with health care providers, shall review prior
authorization procedures administered by utilization review organizations and health plan
companies, to ensure the cost-effective use of prior authorization and minimization of
provider, clinic, and central office administrative burden.
new text end

Sec. 5.

new text begin [62M.072] USE OF EVIDENCE-BASED STANDARDS.
new text end

new text begin If no independently developed evidence-based standards exist for a particular
treatment, testing, or imaging procedure, then an insurer or utilization review organization
shall not deny coverage of the treatment, testing, or imaging based solely on the grounds
that the treatment, testing, or imaging does not meet an evidence-based standard.
new text end

Sec. 6.

new text begin [62Q.676] MEDICATION THERAPY MANAGEMENT CARE.
new text end

new text begin (a) A health plan company or pharmacy benefit manager that provides prescription
drug coverage must provide or arrange for medication therapy management services for
enrollees taking four or more prescriptions to treat or prevent two or more chronic medical
conditions. For purposes of this section, "medication therapy management" means the
provision of the following pharmaceutical care services by a licensed pharmacist or a
physician licensed under chapter 147 to optimize the therapeutic outcomes of the patient's
medications:
new text end

new text begin (1) performing or obtaining necessary assessments of the patient's health status in
compliance with applicable health data privacy laws;
new text end

new text begin (2) formulating a medication treatment plan;
new text end

new text begin (3) monitoring and evaluating the patient's response to therapy, including safety
and effectiveness;
new text end

new text begin (4) performing a comprehensive medication review to identify, resolve, and prevent
medication related problems, including adverse drug events;
new text end

new text begin (5) documenting the care delivered and communicating essential information to
the patient's other primary care providers;
new text end

new text begin (6) providing verbal education and training designed to enhance patient
understanding and appropriate use of the patient's medications;
new text end

new text begin (7) providing information, support services, and resources designed to enhance
patient adherence with the patient's therapeutic regimens; and
new text end

new text begin (8) coordinating and integrating medication therapy management services within the
broader health care management services being provided to the patient.
new text end

new text begin (b) Nothing in this section shall be construed to expand or modify the scope of
practice of the pharmacist as defined in section 151.01, subdivision 27.
new text end

Sec. 7.

new text begin [144.0506] AGENCY WEB SITES.
new text end

new text begin Subdivision 1. new text end

new text begin Information to be posted. new text end

new text begin The commissioner of health may post the
following information on agency Web sites, including minnesotahealthinfo.com:
new text end

new text begin (1) healthy lifestyle and preventive health care information, organized by sex and
age, with procedures and treatments categorized by level of effectiveness and reliability of
the supporting evidence on effectiveness;
new text end

new text begin (2) health plan company administrative efficiency report cards;
new text end

new text begin (3) health care provider charges for common procedures, based on information
available under section 62J.052;
new text end

new text begin (4) evidence-based medicine guidelines and related information for use as resources
by health care professionals, and summaries of the guidelines and related information for
use by patients and consumers;
new text end

new text begin (5) resources and Web links related to improving efficiency in medical clinics and
health care professional practices; and
new text end

new text begin (6) lists of nonprofit and charitable entities that accept donations of used medical
equipment and supplies, such as crutches and walkers.
new text end

new text begin Subd. 2. new text end

new text begin Other Internet resources. new text end

new text begin The commissioner of health, in implementing
subdivision 1, shall include relevant Web links and materials from private sector and other
government sources, in order to avoid duplication and reduce state administrative costs.
new text end

new text begin Subd. 3. new text end

new text begin Cooperation with commissioner of commerce. new text end

new text begin The commissioner of
health shall consult and work in cooperation with the commissioner of commerce when
posting on the Web site information collected from health plan companies regulated by
the commissioner of commerce.
new text end

Sec. 8.

Minnesota Statutes 2004, section 144.698, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Reporting on uncompensated care. new text end

new text begin (a) A report on the services provided
to benefit the community, as required under subdivision 1, clause (5), must report charity
care in compliance with the following requirements:
new text end

new text begin (1) For a facility to report amounts as charity care adjustments, the facility must:
new text end

new text begin (i) generate and record a charge;
new text end

new text begin (ii) have a policy on the provision of charity care that contains specific eligibility
criteria and is communicated or made available to patients;
new text end

new text begin (iii) have made a reasonable effort to identify a third-party payer, encourage the
patient to enroll in public programs, and, to the extent possible, aid the patient in the
enrollment process; and
new text end

new text begin (iv) ensure that the patient meets the charity care criteria of this subdivision.
new text end

new text begin (2) In determining whether to classify care as charity care, the facility must consider
the following:
new text end

new text begin (i) charity care may include services that the provider is obligated to render
independently of the ability to collect;
new text end

new text begin (ii) charity care may include care provided to patients who meet the facility's charity
care guidelines and have partial coverage, but who are unable to pay the remainder of their
medical bills, but this does not apply to that portion of the bill that has been determined to
be the patient's responsibility after a partial charity care classification by the facility;
new text end

new text begin (iii) charity care may include care provided to low-income patients who may qualify
for a public health insurance program and meet the facility's eligibility criteria for charity
care, but who do not complete the application process for public insurance despite the
facility's reasonable efforts;
new text end

new text begin (iv) charity care may include care to individuals whose eligibility for charity care
was determined through third-party services for information gathering purposes only;
new text end

new text begin (v) charity care does not include contractual allowances, which is the difference
between gross charges and payments received under contractual arrangements with
insurance companies and payers;
new text end

new text begin (vi) charity care does not include bad debt;
new text end

new text begin (vii) charity care does not include what may be perceived as underpayments for
operating public programs;
new text end

new text begin (viii) charity care does not include unreimbursed costs of basic or clinical research
or professional education and training;
new text end

new text begin (ix) charity care does not include professional courtesy discounts;
new text end

new text begin (x) charity care does not include community service or outreach activities; and
new text end

new text begin (xi) charity care does not include services for patients against whom collection
actions were taken that resulted in a financial obligation documented on a patient's credit
report with credit bureaus.
new text end

new text begin (3) When reporting charity care adjustments, the facility must report total dollar
amounts and the number of contacts between a patient and a health care provider during
which a service is provided for the following categories:
new text end

new text begin (i) care to patients with family incomes at or below 275 percent of the federal
poverty guideline;
new text end

new text begin (ii) care to patients with family incomes above 275 percent of the federal poverty
guideline; and
new text end

new text begin (iii) care to patients when the facility, with reasonable effort, is unable to determine
family incomes.
new text end

new text begin (b) For the report required under subdivision 1, clause (5), the facility must, in
determining whether to classify care as a bad debt expense:
new text end

new text begin (1) presume that a patient is able and willing to pay until and unless the facility has
reason to consider the care as a charity care case under its charity care policy and the
facility classifies the care as a charity care case; and
new text end

new text begin (2) include as a bad debt expense any unpaid deductibles, coinsurance, co-payments,
noncovered services, and other unpaid patient responsibilities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for facility fiscal years ending on or
after December 31, 2006.
new text end

Sec. 9.

Minnesota Statutes 2004, section 151.214, subdivision 1, is amended to read:

Subdivision 1.

Explanation of pharmacy benefits.

A pharmacist licensed under
this chapter must provide to a patient, for each prescription dispensed where part or all
of the cost of the prescription is being paid or reimbursed by an employer-sponsored
plan or health plan company, or its contracted pharmacy benefit manager, the patient's
co-payment amount and the new text begin pharmacy's own new text end usual and customary price of the prescription
or the amount the pharmacy will be paid for the prescription drug by the patient's
employer-sponsored plan or health plan company, or its contracted pharmacy benefit
manager.

Sec. 10.

Minnesota Statutes 2005 Supplement, section 214.071, is amended to read:

214.071 HEALTH BOARDS; DIRECTORY OF LICENSEES.

Each deleted text begin health deleted text end new text begin health-related licensing new text end board deleted text begin under chapters 147, 148, 148B, and 150A deleted text end new text begin ,
as defined in section 214.01, subdivision 2 new text end , shall establish a directory of licensees that
includes biographical data for each licensee.

Sec. 11.

new text begin [214.121] PRICE DISCLOSURE REMINDER.
new text end

new text begin Each health-related licensing board shall at least annually inform and remind its
licensees of the price disclosure requirements of section 62J.052 or 151.214, as applicable,
through the board's regular means of communicating with its licensees.
new text end

Sec. 12. new text begin REPORTING OF ACQUIRED INFECTIONS.
new text end

new text begin (a) The commissioner of health may consult with infection control specialists,
health care facility representatives, and consumers, for the purpose of obtaining
recommendations regarding a determination of the need for action to implement health
care associated infection control reporting in hospitals and nursing homes. If the outcome
of the determination warrants, the commissioner shall consult with the group regarding:
new text end

new text begin (1) the selection of reporting measures relating to health care associated infections;
new text end

new text begin (2) design, implementation, validation, and ongoing evaluation of the reporting
system; and
new text end

new text begin (3) ensuring that the reporting measures remain flexible and adaptable to changing
national standards.
new text end

new text begin (b) If the commissioner determines that there is a need for the action described in
paragraph (a), the commissioner shall make written recommendations to the legislature.
new text end

Sec. 13. new text begin COST CONTAINMENT STUDIES.
new text end

new text begin Subdivision 1. new text end

new text begin Alternative and complementary health care. new text end

new text begin The commissioner of
human services, through the medical director and in consultation with the health services
policy committee established under Minnesota Statutes, section 256B.0625, subdivision
3c, shall study the potential for improving quality and obtaining cost savings through
greater use of alternative and complementary treatment methods that are supported by the
findings of evidence-based research, and shall incorporate these methods into the medical
assistance, MinnesotaCare, and general assistance medical care programs as appropriate.
new text end

new text begin Subd. 2. new text end

new text begin Studies related to universal participation and access to care. new text end

new text begin The
commissioners of human services and health shall study the adequacy of the current
system of community health care clinics and centers both statewide, and in urban areas
with significant disparities in health status and access to services across racial and ethnic
groups. The commissioners shall evaluate:
new text end

new text begin (1) methods to provide 24-hour availability of care through the clinics and centers;
new text end

new text begin (2) methods to expand the availability of care through the clinics and centers;
new text end

new text begin (3) the use of health care access fund grants to expand the number of clinics and
centers, the services provided, and the availability of care; and
new text end

new text begin (4) the extent to which increased use of physician assistants, nurse practitioners,
medical residents and interns, and other allied health professionals in clinics and centers
would increase the availability of services.
new text end

ARTICLE 2

CHARITY CARE BY HEALTH CARE PROVIDERS

Section 1.

new text begin [62J.83] REDUCED PAYMENT AMOUNTS PERMITTED.
new text end

new text begin (a) Notwithstanding any provision of chapter 148 or any other provision of law to
the contrary, a health care provider may provide care to a patient at a discounted payment
amount, including care provided for free.
new text end

new text begin (b) This section does not apply in a situation in which the discounted payment
amount is not permitted under federal law.
new text end

Sec. 2.

Minnesota Statutes 2004, section 72A.20, is amended by adding a subdivision
to read:

new text begin Subd. 39. new text end

new text begin Discounted payments by health care providers; effect on use of
usual and customary payments. new text end

new text begin An insurer, including, but not limited to, a health plan
company as defined in section 62Q.01, subdivision 4; a reparation obligor as defined in
section 65B.43, subdivision 9; and a workers' compensation insurer shall not consider in
determining a health care provider's usual and customary payment, standard payment, or
allowable payment used as a basis for determining the provider's payment by the insurer,
the following discounted payment situations:
new text end

new text begin (1) care provided to relatives of the provider;
new text end

new text begin (2) care for which a discount or free care is given in hardship situations; and
new text end

new text begin (3) care for which a discount is given in exchange for cash payment.
new text end

new text begin For purposes of this subdivision, "health care provider" and "provider" have the
meaning given in section 62J.03, subdivision 8.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2005 Supplement, section 62Q.251, new text end new text begin is repealed.
new text end

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective the day following final enactment.
new text end

ARTICLE 3

PUBLIC EMPLOYEES INSURANCE PROGRAM

Section 1.

Minnesota Statutes 2004, section 43A.316, subdivision 1, is amended to
read:

Subdivision 1.

Intent.

The legislature finds that the creation of a statewide program
to provide public employees and other eligible persons with deleted text begin life insurance and deleted text end hospital,
medical, and dental benefit coverage deleted text begin through provider organizations deleted text end would result in a
deleted text begin greater utilization deleted text end new text begin more efficient use new text end of government resources and would advance the
health and welfare of the citizens of the state.

Sec. 2.

Minnesota Statutes 2004, section 43A.316, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For the purpose of this section, the terms defined in this
subdivision have the meaning given them.

(a) Commissioner. "Commissioner" means the commissioner of employee relations.

(b) Employee. "Employee" means:

(1) a person who is a public employee within the definition of section 179A.03,
subdivision 14, who is insurance eligible and is employed by an eligible employer;

(2) an elected public official of an eligible employer who is insurance eligible;

(3) a person employed by a labor organization or employee association certified as
an exclusive representative of employees of an eligible employer or by another public
employer approved by the commissioner, so long as the plan meets the requirements of a
governmental plan under United States Code, title 29, section 1002(32); or

(4) a person employed by a county or municipal hospital.

(c) Eligible employer. "Eligible employer" means:

(1) a public employer within the definition of section 179A.03, subdivision 15, that
is a town, county, city, school district as defined in section 120A.05, service cooperative
as defined in section 123A.21, intermediate district as defined in section 136D.01,
Cooperative Center for Vocational Education as defined in section 123A.22, regional
management information center as defined in section 123A.23, or an education unit
organized under the joint powers action, section 471.59; or

(2) an exclusive representative of employees, as defined in paragraph (b);

(3) a county or municipal hospital; or

(4) another public employer approved by the commissioner.

(d) Exclusive representative. "Exclusive representative" means an exclusive
representative as defined in section 179A.03, subdivision 8.

(e) Labor-Management Committee. "Labor-Management Committee" means the
committee established by subdivision 4.

(f) Program. "Program" means the statewide public deleted text begin employees insurance deleted text end new text begin buyers
group new text end program created by subdivision 3.

Sec. 3.

Minnesota Statutes 2004, section 43A.316, subdivision 3, is amended to read:

Subd. 3.

Public deleted text begin employee insurance deleted text end new text begin buyers group new text end program.

The commissioner
shall be the administrator of the public deleted text begin employee insurance deleted text end new text begin buyers group new text end program
and may determine its funding arrangements. new text begin The commissioner may contract with a
qualified entity to perform the administrative functions. new text end The commissioner shall model
the program after the plan established in section 43A.18, subdivision 2, but may deleted text begin modify deleted text end new text begin
adopt variations from new text end that plan, in consultation with the Labor-Management Committee. new text begin
The variations may include different deductibles, coinsurance, co-pays, or other enrollee
cost-sharing provisions. The commissioner may: new text end

new text begin (1) develop and administer separately or jointly rated programs within the public
buyers group program, including a separately or jointly rated and administered program
for employees of public school districts. Separate programs within the public buyers
group program may be pilot or demonstration programs, or permanent programs;
new text end

new text begin (2) develop, implement, and administer demonstration or pilot programs to help
explore methods for improving the effectiveness and value of the public buyers group
program;
new text end

new text begin (3) conduct evaluations and studies to determine the effectiveness and impact of
pilot, demonstration, or other programs as part of the public buyers group program;
new text end

new text begin (4) develop, adopt, modify, and implement strategies to control health care costs
and to improve health care outcomes, including, but not limited to, health care cost and
quality measurement and reporting strategies, pay-for-performance strategies, value-based
purchasing strategies, use of complementary and alternative care, and other demonstrated
or emerging best practices in health care purchasing;
new text end

new text begin (5) in consultation with the labor management committee in subdivision 4, develop,
adopt, modify, and administer innovative health benefit designs, including possible tiered
arrangements, high deductible plans with health care savings accounts, special provider
networks, incentive programs for healthy behaviors and health improvement, and other
health benefit designs;
new text end

new text begin (6) temporarily suspend or limit new entrant groups into the public buyers group
program if necessary to maintain the quality, effectiveness, and viability of the program;
new text end

new text begin (7) participate as part of broader community, regional, or national alliances or
initiatives, including joint public-private sector efforts to improve health care purchasing,
health care costs, quality, and outcomes; and
new text end

new text begin (8) use and submit additional information to the existing Web site
minnesotahealthinfo.org to provide members and the public with information and a means
to make inquiries to the public buyers group program.
new text end

Sec. 4.

Minnesota Statutes 2004, section 43A.316, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Health improvement programs. new text end

new text begin The commissioner is authorized to plan,
develop, purchase, administer, and evaluate disease management and other programs,
strategies, and incentives to improve the health and health outcomes of members.
new text end

Sec. 5.

Minnesota Statutes 2004, section 43A.316, subdivision 4, is amended to read:

Subd. 4.

Labor-Management Committee.

new text begin (a) new text end The Labor-Management Committee
consists of ten members appointed by the commissioner. The Labor-Management
Committee must comprise five members who represent employees, including at least
one retired employee, and five members who represent eligible employers. Committee
members are eligible for expense reimbursement in the same manner and amount as
authorized by the commissioner's plan adopted under section 43A.18, subdivision 2. The
commissioner shall consult with the labor-management committee in major decisions
that affect the program. The committee shall study issues new text begin and make recommendations new text end
relating to the insurance program including, but not limited to, flexible benefits, utilization
review, quality assessment, and cost efficiency. The committee continues to exist while
the program remains in operation.

new text begin (b) The five members of the Labor-Management Committee who represent
employees must be chosen by the commissioner from among persons nominated
as provided in this paragraph. Exclusive representatives of employees of counties,
cities, school districts, and townships are entitled to nominate two candidates for the
Labor-Management Committee from each of those four categories, and the commissioner
shall appoint one of those two nominees from each category. The commissioner shall
choose the fifth employee to represent retired employees.
new text end

new text begin (c) The five members of the Labor-Management Committee who represent employers
must be chosen by the commissioner from among persons nominated as provided in
this paragraph. The Association of Minnesota Counties, Minnesota League of Cities,
Minnesota School Boards Association, and the Minnesota Association of Townships are
each entitled to nominate two candidates for the committee, and the commissioner shall
appoint one of those from each group. The commissioner shall select the fifth employer
member from an employer participating in the program and not represented by the other
four employer members, if any, or if that is not reasonably possible, the commissioner
may appoint any other person as the fifth employer representative.
new text end

Sec. 6.

Minnesota Statutes 2004, section 43A.316, subdivision 5, is amended to read:

Subd. 5.

Public employee participation.

(a) Participation in the program is subject
to the conditions in this subdivision.

(b) Each exclusive representative for an eligible employer determines whether the
employees it represents will participate in the program. new text begin The exclusive representative
shall make that decision with the advice of a health coverage study group appointed by
the exclusive representative. The group must be appointed no later than 90 days before
the expiration date of the collective bargaining agreement preceding the date of entry
into the program. new text end The exclusive representative shall give the employer notice of intent
to participate at least deleted text begin 30 deleted text end new text begin 60 new text end days before the expiration date of the collective bargaining
agreement preceding the collective bargaining agreement that covers the date of entry
into the program. new text begin Either all or none of the employees represented by an exclusive
representative who participate in the employer's plan must participate in the program. new text end The
deleted text begin exclusive representative and the deleted text end eligible employer shall give notice to the commissioner
of the determination to participate in the program at least deleted text begin 30 deleted text end new text begin 60 new text end days before entry into
the program. Entry into the program is governed by a schedule established by the
commissioner.

(c) Employees not represented by exclusive representatives may become members
of the program upon a determination of an eligible employer to include these employees
in the program. Either all or none of the employer's unrepresented employees new text begin who
participate in the employer's plan new text end must participate new text begin in the program new text end . The eligible employer
shall give at least deleted text begin 30 deleted text end new text begin 60 new text end days' notice to the commissioner before entering the program.
Entry into the program is governed by a schedule established by the commissioner.

(d) Participation in the program is for a deleted text begin two-year deleted text end new text begin three-year new text end term. Participation is
automatically renewed for an additional deleted text begin two-year deleted text end new text begin three-year new text end term unless deleted text begin the exclusive
representative, or deleted text end the employer deleted text begin for unrepresented employees, deleted text end gives the commissioner
notice of withdrawal at least deleted text begin 30 deleted text end new text begin 60 new text end days before expiration of the participation period. A
group that withdraws must wait two years before rejoining new text begin , except with the approval of
the commissioner new text end . An exclusive representative, or employer for unrepresented employees,
may also withdraw if premiums increase deleted text begin 50 percent deleted text end new text begin by more than 20 percent in excess
of the consumer price index for all urban consumers new text end or more from one insurance year
to the next. new text begin The commissioner may modify the participation requirement as part of
a demonstration or pilot effort. Any modifications must be clearly communicated to
all employers who are members of the public buyers group program, and incorporated
into any information about the program, at least 90 days prior to the change becoming
effective. The modifications must apply on an equal basis to all current and prospective
employers enrolled in the program.
new text end

(e) new text begin To improve the stability and effectiveness of the public buyers group program,
the commissioner, in consultation with the Labor-Management Committee and other
experts, may explore mutual gain-sharing arrangements, discounts, incentives, or penalties
for public employers based on the length of their continuous membership in the public
buyers group program and other factors. Any incentives for long-term membership
in the program must be: (1) consistent with the program's goals of maintaining the
overall integrity and viability of the program; (2) consistent with other applicable laws,
rules, and policies; and (3) available to all groups on equal terms. The terms of any
incentives for long-term participation in the program must be clearly communicated to all
employers who are members of the public buyers group program and incorporated into
any information about the program. Any administration of the incentives or changes must
be communicated at least 90 days prior to each employer's renewal date before the change
may become effective. The commissioner, in consultation with the Labor-Management
Committee, shall report to the legislature and the governor by January 15, 2008, and
annually thereafter, on the adequacy of the participation requirement and any special
incentives based on the length of participation in helping maintain the stability and
effectiveness of the public buyers group program.
new text end

new text begin (f) new text end The deleted text begin exclusive representative shall give the deleted text end employer new text begin shall give new text end notice of intent to
withdraw to the commissioner at least deleted text begin 30 deleted text end new text begin 60 new text end days before the expiration date of a collective
bargaining agreement that includes the date on which the term of participation expires.

deleted text begin (f) deleted text end new text begin (g) new text end Each participating eligible employer shall notify the commissioner of new text begin the
new text end names of individuals who will be participating within two weeks deleted text begin of deleted text end new text begin after new text end the commissioner
deleted text begin receiving deleted text end new text begin receives new text end notice of the parties' intent to participate. The employer shall also
submit other information as required by the commissioner for administration of the
program.

new text begin (h) An employer that withdraws from the program under circumstances that do not
permit withdrawal under this subdivision is liable to the board for premiums payable by
the employer until the time that the employer is eligible to withdraw, and the employer
shall pay those premiums voluntarily and no later than their due date. If the premiums are
not paid voluntarily, the board has authority to and shall collect these premiums under any
method permitted by law for a governmental or nongovernmental creditor of the employer.
new text end

Sec. 7.

Minnesota Statutes 2004, section 43A.316, is amended by adding a subdivision
to read:

new text begin Subd. 5a. new text end

new text begin Participating employers. new text end

new text begin Employers participating in the public buyers
group program and employers considering participation in the public buyers group
program shall not be refused or impeded by the program in their efforts to obtain the
utilization or claims data needed by the employer to seek alternative bids for insurance
coverage. The ability of participating employers to secure their data for the purposes of
seeking alternative bids for coverage exists regardless of any other program participation
requirements or incentives for long-term participation in the program. Participating
employers must not be charged for the report generated to satisfy this subdivision.
new text end

Sec. 8.

Minnesota Statutes 2004, section 43A.316, is amended by adding a subdivision
to read:

new text begin Subd. 5b. new text end

new text begin School district's bids. new text end

new text begin School districts eligible for the public buyers
group program must request bids for insurance coverage through the public buyers
group program at least once every four years. This subdivision does not require school
districts eligible for the program to purchase coverage through the program. Other public
employers are encouraged to seek bids from the public buyers group program at least
once every four years.
new text end

Sec. 9.

Minnesota Statutes 2004, section 43A.316, subdivision 6, is amended to read:

Subd. 6.

Coverage.

(a) deleted text begin By January 1, 1989, deleted text end The commissioner shall announce the
benefits of the program. The program shall include employee hospital, medical, new text begin and new text end dental deleted text begin ,
and life deleted text end insurance for employees and deleted text begin hospital and medical benefits for deleted text end dependents. Health
maintenance organization options and other delivery system options may be provided if
they are available, cost-effective, and capable of servicing the number of people covered in
the program. Participation in optional coverages may be provided by collective bargaining
agreements. For employees not represented by an exclusive representative, the employer
may offer the optional coverages to eligible employees and their dependents provided in
the program. new text begin Health coverage must include at least the benefits required of a health plan
company regulated under chapter 62A, 62C, 62D, or 62Q.
new text end

(b) The commissioner, with the assistance of the Labor-Management Committee,
shall periodically assess whether it is financially feasible for the program to offer or to
continue an individual retiree program that has competitive premium rates and benefits.
If the commissioner determines it to be feasible to offer an individual retiree program,
the commissioner shall announce the applicable benefits, premium rates, and terms of
participation. Eligibility to participate in the individual retiree program is governed by
subdivision 8, but applies to retirees of eligible employers that do not participate in the
program and to those retirees' dependents and surviving spouses.

Sec. 10.

Minnesota Statutes 2004, section 43A.316, subdivision 6a, is amended to read:

Subd. 6a.

deleted text begin Chiropractic services deleted text end new text begin Choice of type of provider new text end .

All benefits provided
by the program deleted text begin or a successor program deleted text end relating to expenses incurred for medical treatment
or services of a deleted text begin physician deleted text end new text begin health care provider new text end must also include deleted text begin chiropractic deleted text end treatment
and services of deleted text begin a chiropractor deleted text end new text begin any other type of licensed, certified, or registered health care
provider new text end to the extent that the deleted text begin chiropractic deleted text end services and treatment are within the scope of
deleted text begin chiropractic licensure deleted text end new text begin the provider's licensure, certification, or registration new text end .

deleted text begin This subdivision is intended to provide equal access to benefits for program members
who choose to obtain treatment for illness or injury from a doctor of chiropractic, as long
as the treatment falls within the chiropractor's scope of practice. This subdivision is not
intended to change or add to the benefits provided for in the program.
deleted text end

Sec. 11.

Minnesota Statutes 2004, section 43A.316, subdivision 7, is amended to read:

Subd. 7.

Premiums.

new text begin (a) new text end The proportion of premium paid by the employer and
employee is subject to collective bargaining or personnel policies. If, at the beginning of
the coverage period, no collective bargaining agreement has been finalized, the increased
dollar costs, if any, from the previous year is the sole responsibility of the individual
participant until a collective bargaining agreement states otherwise. Premiums, including
an administration fee, shall be established by the commissioner. new text begin The commissioner may
decide to rate specific employers separately for premium purposes, if the commissioner
determines that doing so is in the best interests of the program. new text end Each employer shall pay
monthly the amounts due for employee benefits including the amounts under subdivision
8 to the commissioner no later than the dates established by the commissioner. If an
employer fails to make the payments as required, the commissioner deleted text begin may deleted text end new text begin shall new text end cancel
program benefits and pursue other civil remedies new text begin , as provided in subdivision 5, paragraph
(d) new text end .

new text begin (b) The premium charged for an employer's first month in the program may be up to
three times the regular monthly premium charged to that employer, to help establish and
maintain the program's financial resources. The extra premiums, if paid, must be refunded
to the employer if the employer leaves the program, if the refund would not reduce the
program's reserves below the level determined to be appropriate by the commissioner.
new text end

new text begin (c) The commissioner must provide bids, including the premiums to be charged, to
eligible employers that request bids, no later than 90 days prior to the date the coverage
would begin or renew.
new text end

Sec. 12.

Minnesota Statutes 2004, section 43A.316, subdivision 8, is amended to read:

Subd. 8.

Continuation of coverage.

(a) A former employee of an employer
participating in the program who is receiving a public pension disability benefit or an
annuity or has met the age and service requirements necessary to receive an annuity under
chapter 353, 353C, 354, 354A, 356, 422A, 423, 423A, or 424, and the former employee's
dependents, are eligible to participate in the program. This participation is at the person's
expense unless a collective bargaining agreement or personnel policy provides otherwise.
Premiums for these participants must be established by the commissioner.

The commissioner may provide policy exclusions for preexisting conditions
only when there is a break in coverage between a participant's coverage under the
employment-based group insurance program and the participant's coverage under this
section. An employer shall notify an employee of the option to participate under this
paragraph no later than the effective date of retirement. The retired employee or the
employer of a participating group on behalf of a current or retired employee shall notify
the commissioner within 30 days of the effective date of retirement of intent to participate
in the program according to the rules established by the commissioner.

(b) The spouse of a deceased employee or former employee may purchase the
benefits provided at premiums established by the commissioner if the spouse was a
dependent under the employee's or former employee's coverage under this section at the
time of the death. The spouse remains eligible to participate in the program as long as
the deleted text begin group that included the deceased employee or former employee participates in the
program deleted text end new text begin spouse chooses to do so new text end . Coverage under this clause must be coordinated with
relevant insurance benefits provided through the federally sponsored Medicare program.

(c) The program benefits must continue in the event of strike permitted by section
179A.18, if the exclusive representative chooses to have coverage continue and the
employee pays the total monthly premiums when due.

deleted text begin (d) A participant who discontinues coverage may not reenroll.
deleted text end

new text begin (d) new text end Persons participating under deleted text begin these paragraphs deleted text end new text begin this subdivision new text end shall make
appropriate premium payments in the time and manner established by the commissioner. new text begin
They are not subject to the payment of extra payments that may be required under
subdivision 7, paragraph (b).
new text end

Sec. 13.

Minnesota Statutes 2004, section 43A.316, is amended by adding a
subdivision to read:

new text begin Subd. 9a. new text end

new text begin Report. new text end

new text begin The commissioner shall report biennially to the governor and
legislature on March 1 of each odd-numbered year. The report must include information
on membership, finances, operations, effectiveness, and impact of the public buyers group
program. The report may include discussion of changes and innovations, particularly with
respect to improving health care costs, quality, and outcomes, and any issues or challenges
faced by the program and how they might be addressed. The report must be posted on a
Web site maintained by or for the public buyers group program, and must be available
to the public.
new text end

Sec. 14.

Minnesota Statutes 2004, section 43A.316, subdivision 10, is amended to read:

Subd. 10.

Exemption.

The public deleted text begin employee insurance deleted text end new text begin buyers group new text end program
and, where applicable, the employers participating in it are exempt from chapters 60A,
62A, 62C, 62D, 62E, and 62H, section 471.617, subdivisions 2 and 3, and the bidding
requirements of section 471.6161 new text begin , except as otherwise provided in subdivision 6,
paragraph (a) new text end .

Sec. 15.

Minnesota Statutes 2004, section 43A.316, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin Reinsurance. new text end

new text begin The commissioner may, on behalf of the program,
participate in an insured or self-insured reinsurance pool.
new text end

ARTICLE 4

MINNESOTA EMPLOYEES INSURANCE PROGRAM

Section 1.

Minnesota Statutes 2004, section 43A.317, is amended to read:

43A.317 MINNESOTA EMPLOYEES INSURANCE PROGRAM.

Subdivision 1.

Intent.

The legislature finds that the creation of a statewide program
to provide employers with the advantages of a large pool for insurance purchasing would
advance the welfare of the citizens of the state.

Subd. 2.

Definitions.

(a) Scope. For the purposes of this section, the terms defined
have the meaning given them.

(b) deleted text begin Commissioner deleted text end new text begin Board new text end . deleted text begin "Commissioner" means the commissioner of employee
relations. deleted text end new text begin "Board" means the board of directors created under subdivision 4. new text end

(c) Eligible employee. "Eligible employee" means an employee eligible to
participate in the program under the terms described in subdivision 6.

(d) Eligible employer. "Eligible employer" means an employer eligible to
participate in the program under the terms described in subdivision 5.

(e) Eligible individual. "Eligible individual" means a person eligible to participate
in the program under the terms described in subdivision 6.

(f) Employee. "Employee" means an employee of an eligible employer. "Employee"
includes a sole proprietor, partner of a partnership, member of a limited liability company,
or independent contractor.

(g) Employer. "Employer" means a private person, firm, corporation, partnership,
limited liability company, association, or other entity actively engaged in business or
public services. "Employer" includes both for-profit and nonprofit entities.

(h) Program. "Program" means the Minnesota employees insurance program
created by this section.

Subd. 3.

new text begin Entity status and new text end administration.

deleted text begin After consulting with the chairs of the
senate Governmental Operations and Veterans Committee and the house of representatives
Governmental Operations and Veterans Affairs Policy Committee, the commissioner
may determine when the program provided under this section is available. When the
commissioner makes the program available, deleted text end new text begin The board is created and may operate as an
unincorporated association and may incorporate as a Minnesota nonprofit corporation
under chapter 317A. The board shall have all powers available under that chapter, except
to the extent inconsistent with this section. new text end The deleted text begin commissioner deleted text end new text begin board new text end shall, consistent
with the provisions of this section, administer the program and determine its coverage
options, funding and premium arrangements, contractual arrangements, and all other
matters necessary to administer the program. deleted text begin The commissioner's contracting authority
for the program, including authority for competitive bidding and negotiations, is governed
by section 43A.23. deleted text end

Subd. 4.

deleted text begin Advisory committee deleted text end new text begin Board of directors new text end .

deleted text begin After the commissioner
consults as required in subdivision 3 and then determines to make the program available, deleted text end
The deleted text begin commissioner deleted text end new text begin governor new text end shall deleted text begin establish a deleted text end new text begin appoint an initial new text end ten-member deleted text begin advisory
committee deleted text end new text begin board of directors new text end that includes five members who represent eligible employers
deleted text begin and five deleted text end new text begin , two new text end members who represent eligible individuals deleted text begin . The committee shall advise
the commissioner on issues related to administration of the program. The committee is
governed by sections 15.014 and 15.059, and continues to exist while the program remains
in operation. deleted text end new text begin , and three public members, for initial terms of two years for five directors
and three years for the other five directors. Subsequent board members shall be appointed
by the governor to serve staggered three-year terms. The governor may decide when to
activate the board and the program by making the initial appointments. new text end

Subd. 5.

Employer eligibility.

(a) Procedures. All employers are eligible for
coverage through the program subject to the terms of this subdivision. The deleted text begin commissioner deleted text end new text begin
board new text end shall establish procedures for an employer to apply for coverage through the
program.

(b) Term. The initial term of an employer's coverage deleted text begin may deleted text end new text begin must new text end be for deleted text begin up to deleted text end new text begin at least new text end
two years from the effective date of the employer's application. After that, coverage
will be automatically renewed for an additional term new text begin of two years new text end unless the employer
gives notice of withdrawal from the program according to procedures established by
the deleted text begin commissioner deleted text end new text begin board new text end or the deleted text begin commissioner deleted text end new text begin board new text end gives notice to the employer of the
discontinuance of the program. The deleted text begin commissioner deleted text end new text begin board new text end may establish conditions under
which an employer may withdraw from the program prior to the expiration of a term,
including by reason of an increase in health coverage premiums of 50 percent or more
from one insurance year to the next. An employer that withdraws from the program may
not reapply for coverage for deleted text begin a period of time equal to its initial term of coverage deleted text end new text begin two years new text end .

(c) Minnesota work force. An employer is not eligible for coverage through the
program if deleted text begin five deleted text end new text begin 50 new text end percent or more of its eligible employees work primarily outside
Minnesota, except that an employer new text begin that either does or does not meet that requirement
new text end may apply to the program on behalf of only those employees who work primarily in
Minnesota new text begin , and the board may accept or reject the application new text end .

(d) Employee participation; aggregation of groups. An employer is not eligible
for coverage through the program unless its application includes all eligible employees
who work primarily in Minnesota, except employees who waive coverage as permitted by
subdivision 6. Private entities that are eligible to file a combined tax return for purposes
of state tax laws are considered a single employer, except as otherwise approved by the
deleted text begin commissioner deleted text end new text begin board new text end .

(e) Private employer. A private employer is not eligible for coverage unless it has
two or more eligible employees new text begin who live new text end in the state of Minnesota. If an employer has
only two eligible employees and one is the spouse, child, sibling, parent, or grandparent of
the other, the employer must be a Minnesota domiciled employer and have paid Social
Security or self-employment tax on behalf of both eligible employees.

(f) Minimum participation. The commissioner must require as a condition of
employer eligibility that at least 75 percent of its eligible employees who have not waived
coverage participate in the program. The participation level of eligible employees must be
determined at the initial offering of coverage and at the renewal date of coverage. For
purposes of this section, waiver of coverage includes only waivers due to coverage deleted text begin under
another group health benefit plan. deleted text end new text begin eligible for waiver under section 62L.03, subdivision 3,
paragraph (a). An employer may not offer any employee health coverage other than that
offered by the board, except with prior approval of the board. new text end

(g) Employer contribution. The deleted text begin commissioner deleted text end new text begin board new text end must require as a condition
of employer eligibility that the employer contribute at least 50 percent toward the cost
of the premium of the employee and may require that the contribution toward the cost
of coverage is structured in a way that promotes price competition among the coverage
options available through the program.

(h) Enrollment cap. The deleted text begin commissioner deleted text end new text begin board new text end may limit employer enrollment in the
program if necessary to avoid exceeding the program's reserve capacity.

Subd. 6.

Individual eligibility.

(a) Procedures. The deleted text begin commissioner deleted text end new text begin board new text end shall
establish procedures for eligible employees and other eligible individuals to apply for
coverage through the program.

(b) Employees. An employer shall determine when it applies to the program the
criteria its employees must meet to be eligible for coverage under its plan. An employer
may subsequently change the criteria annually or at other times with approval of the
deleted text begin commissioner deleted text end new text begin board new text end . The criteria must provide that new employees become eligible for
coverage after a probationary period of at least 30 days, but no more than 90 days.

(c) Other individuals. An employer may elect to cover under its plan:

(1) the spouse, dependent children, and dependent grandchildren of a covered
employee;

(2) a retiree who is eligible to receive a pension or annuity from the employer and a
covered retiree's spouse, dependent children, and dependent grandchildren;

(3) the surviving spouse, dependent children, and dependent grandchildren of a
deceased employee or retiree, if the spouse, children, or grandchildren were covered
at the time of the death;

(4) a covered employee who becomes disabled, as provided in sections 62A.147
and 62A.148; or

(5) any other categories of individuals for whom group coverage is required by
state or federal law.

An employer shall determine when it applies to the program the criteria individuals
in these categories must meet to be eligible for coverage. An employer may subsequently
change the criteria annually, or at other times with approval of the deleted text begin commissioner deleted text end new text begin board new text end .
The criteria for dependent children and dependent grandchildren may be no more
inclusive than the criteria under section 43A.18, subdivision 2. This paragraph shall
not be interpreted as relieving the program from compliance with any federal and state
continuation of coverage requirements.

(d) Waiver and late entrance. An eligible individual may waive coverage at the
time the employer joins the program or when coverage first becomes available. The
deleted text begin commissioner deleted text end new text begin board new text end may establish a preexisting condition exclusion of not more than 18
months for late entrants as defined in section 62L.02, subdivision 19.

(e) Continuation coverage. The program shall provide all continuation coverage
required by state and federal law.

Subd. 7.

Coverage.

Coverage deleted text begin is available through the program beginning on
July 1, 1993. Until an arrangement is in place to provide coverage deleted text end new text begin may be provided new text end
through a transfer of risk to one or more carriers regulated under chapter 62A, 62C, or
62D deleted text begin , the commissioner shall solicit bids under section 43A.23, from carriers regulated
under chapters 62A, 62C, and 62D, to provide coverage of eligible individuals. The
commissioner shall provide coverage through contracts with carriers, unless the
commissioner receives no reasonable bids from carriers deleted text end new text begin ; through a group self-insured
arrangement under chapter 62H; or through a combination of those methods. The board
may, on behalf of the program, participate in an insured or self-insured reinsurance pool new text end .

(a) Health coverage. Health coverage is available to all employers in the program.
The deleted text begin commissioner deleted text end new text begin board new text end shall attempt to establish health coverage options that have
strong care management features to control costs and promote quality and shall attempt to
make a choice of health coverage options available. Health coverage for a retiree who
is eligible for the federal Medicare program must be administered as though the retiree
is enrolled in Medicare parts A deleted text begin and deleted text end new text begin , new text end B new text begin , and D new text end . deleted text begin To the extent feasible as determined by
the commissioner and in the best interests of the program, the commissioner shall model
coverage after the plan established in section 43A.18, subdivision 2. deleted text end Health coverage
must include at least the benefits required of a carrier regulated under chapter 62A, 62C,
or 62D for comparable coverage. deleted text begin Coverage under this paragraph must not be provided
as part of the health plans available to state employees. deleted text end

(b) new text begin Choice of providers. All benefits provided by the program relating to expenses
incurred for medical treatment or services of a health care provider must also include
treatment and services of any other type of licensed, certified, or registered health care
provider to the extent that the services and treatment are within the scope of the provider's
licensure, certification, or registration.
new text end

new text begin (c) new text end Optional coverages. In addition to offering health coverage, the deleted text begin commissioner deleted text end new text begin
board new text end may arrange to offer dental new text begin or other health-related new text end coverage through the program.
Employers with health coverage may choose to offer dental new text begin or other health-related
new text end coverage according to the terms established by the deleted text begin commissioner deleted text end new text begin board new text end .

deleted text begin (c) deleted text end new text begin (d) new text end Open enrollment. The program must meet all underwriting requirements of
chapter 62L and must provide periodic open enrollments for eligible individuals for those
coverages where a choice exists.

deleted text begin (d) deleted text end new text begin (e) new text end Technical assistance. The deleted text begin commissioner deleted text end new text begin board new text end may arrange for technical
assistance and referrals for eligible employers in areas such as health promotion and
wellness, employee benefits structure, tax planning, and health care analysis services
as described in section 62J.2930.

Subd. 8.

Premiums.

(a) Payments. Employers enrolled in the program shall pay
premiums according to terms established by the deleted text begin commissioner deleted text end new text begin board new text end . If an employer
fails to make the required payments, the deleted text begin commissioner deleted text end new text begin board new text end may cancel coverage and
pursue other civil remedies.

(b) Rating method. The deleted text begin commissioner deleted text end new text begin board new text end shall determine the premium rates and
rating method for the program. The rating method for eligible small employers must meet
or exceed the requirements of chapter 62L. The rating methods must recover in premiums
all of the ongoing costs for deleted text begin state deleted text end administration and for maintenance of a premium stability
and claim fluctuation reserve. deleted text begin On June 30, 1999, after paying all necessary and reasonable
expenses, the commissioner must apply up to $2,075,000 of any remaining balance in
the Minnesota employees' insurance trust fund to repayment of any amounts drawn or
expended for this program from the health care access fund. deleted text end new text begin The board may decide to rate
specific employers separately for premium purposes if the board determines that doing
so is in the best interests of the program.
new text end

(c) Taxes and assessments. To the extent that the program operates as a self-insured
group, the premiums paid to the program are not subject to the taxes imposed by chapter
297I, but the program is subject to a Minnesota Comprehensive Health Association
assessment under section 62E.11.

new text begin (d) The board may require that employers entering the program pay a premium of up
to three times the normal monthly premium as a contribution to reserves. If an employer
leaves the program, the board may refund the excess premium if the program's reserves
would remain adequate in the judgment of the board.
new text end

Subd. 9.

deleted text begin Minnesota employees insurance trust fund. deleted text end

deleted text begin (a) deleted text begin Contents. deleted text end The
Minnesota employees insurance trust fund in the state treasury consists of deposits
received from eligible employers and individuals, contractual settlements or rebates
relating to the program, investment income or losses, and direct appropriations.
deleted text end

deleted text begin (b) deleted text begin Appropriation. deleted text end All money in the fund is appropriated to the commissioner to
pay insurance premiums, approved claims, refunds, administrative costs, and other costs
necessary to administer the program.
deleted text end

deleted text begin (c) deleted text end Reserves. new text begin (a) new text end For any coverages for which the program does not contract to
transfer full financial responsibility, the deleted text begin commissioner deleted text end new text begin board new text end shall establish and maintain
reserves:

(1) for claims in process, incomplete and unreported claims, premiums received but
not yet earned, and all other accrued liabilities; and

(2) to ensure premium stability and the timely payment of claims in the event of
adverse claims experience. The reserve for premium stability and claim fluctuations must
be established according to deleted text begin the deleted text end new text begin sound actuarial new text end standards deleted text begin of section 62C.09, subdivision 3,
except that the reserve may exceed the upper limit under this standard until July 1, 1997 deleted text end .

deleted text begin (d) deleted text begin Investments. deleted text end The State Board of Investment shall invest the fund's assets
according to section . Investment income and losses attributable to the fund must
be credited to the fund.
deleted text end

new text begin (b) If the board determines that it needs additional funds for start-up costs, the
board may access additional funds as needed in the form of loans from the health care
access fund, not to exceed a total indebtedness of $1,000,000 at any one time. Such loans
accrue interest at three percent per annum simple interest and must be payable in monthly
installments beginning no later than two years after the board first provides coverage
and must be fully repaid no later than five years after that date. The monthly repayment
installments must be reamortized as needed to reflect repayments and additional loan
amounts accessed so that monthly installments will be sufficient to repay the existing
balance, including accrued interest, at the end of that five-year period. The board may
make additional repayments of principal and interest at any time. The $1,000,000 amount
is available until the end of that five-year period. Amounts of principal repaid are available
to be accessed for new loans within that period.
new text end

Subd. 10.

Program status.

The Minnesota employees insurance program is a
deleted text begin state deleted text end new text begin state-created new text end program to provide the advantages of a large pool to deleted text begin small deleted text end employers
for deleted text begin purchasing deleted text end new text begin providing new text end health coverage, other coverages, and related services from
insurance companies, health maintenance organizations, and other organizations. The
program is not an insurance company. Coverage under this program shall be considered
a certificate of insurance or similar evidence of coverage and is subject to all applicable
requirements of chapters 60A, 62A, 62C, new text begin 62D, new text end 62E, 62H, 62L, and 72A, deleted text begin and is subject to
regulation by the commissioner of commerce deleted text end to the extent applicable.

Subd. 12.

Status of agents.

Notwithstanding sections 60K.49 and 72A.07, the
program may use, and pay referral fees, commissions, or other compensation to, agents
licensed as insurance producers under chapter 60K or licensed under section 62C.17,
regardless of whether the agents are appointed to represent the particular health carriers or
community integrated service networks that provide the coverage available through the
program. When acting under this subdivision, an agent is not an agent of the health carrier
or community integrated service network, with respect to that transaction.

Sec. 2. new text begin APPROPRIATION.
new text end

new text begin $1,000,000 is appropriated from the health care access fund to the commissioner
of employee relations for the as-needed loans to the Minnesota employees insurance
program, as provided in Minnesota Statutes, section 43A.317, subdivision 9, paragraph (b).
new text end

ARTICLE 5

PRIVATE SECTOR HEALTH COVERAGE PROVISIONS

Section 1.

Minnesota Statutes 2004, section 62D.095, subdivision 3, is amended to
read:

Subd. 3.

Deductibles.

deleted text begin (a) deleted text end A health maintenance contract issued by a health
maintenance organization deleted text begin that is assessed less than three percent of the total annual amount
assessed by the Minnesota comprehensive health association deleted text end may impose deductibles not
to exceed deleted text begin $3,000 deleted text end new text begin $5,000 new text end per person, per year and deleted text begin $6,000 deleted text end new text begin $10,000 new text end per family, per year. deleted text begin For
purposes of the percentage calculation, a health maintenance organization's assessments
include those of its affiliates.
deleted text end

deleted text begin (b) All other health maintenance contracts may impose deductibles not to exceed
$2,250 per person, per year and $4,500 per family, per year.
deleted text end

new text begin new text end

Sec. 2.

Minnesota Statutes 2004, section 62D.095, subdivision 4, is amended to read:

Subd. 4.

Annual out-of-pocket maximums.

deleted text begin (a) deleted text end A health maintenance contract
issued by a health maintenance organization deleted text begin that is assessed less than three percent of the
total annual amount assessed by the Minnesota comprehensive health association deleted text end must
include a limitation not to exceed deleted text begin $4,500 deleted text end new text begin $5,000 new text end per person and deleted text begin $7,500 deleted text end new text begin $10,000 new text end per
family on total annual out-of-pocket enrollee cost-sharing expenses. deleted text begin For purposes of the
percentage calculation, a health maintenance organization's assessments include those
of its affiliates.
deleted text end

deleted text begin (b) All other health maintenance contracts must include a limitation not to
exceed $3,000 per person and $6,000 per family on total annual out-of-pocket enrollee
cost-sharing expenses.
deleted text end

Sec. 3.

Minnesota Statutes 2004, section 62D.095, is amended by adding a subdivision
to read:

new text begin Subd. 5a. new text end

new text begin Lifetime maximum benefit. new text end

new text begin A health maintenance contract issued by
a health maintenance organization may impose a lifetime maximum benefit no less
than $3,000,000. At no time shall a health maintenance organization impose a lifetime
maximum lower than the required lifetime maximum of the comprehensive health
insurance plan under section 62E.12.
new text end

Sec. 4.

new text begin [62Q.645] DISTRIBUTION OF INFORMATION; ADMINISTRATIVE
EFFICIENCY AND COVERAGE OPTIONS.
new text end

new text begin (a) The commissioner may use reports submitted by health plan companies, service
cooperatives, and the public employee insurance program created in section 43A.316 to
compile entity specific administrative efficiency report cards; may make these report
cards available on state agency Web sites, including minnesotahealthinfo.com; and may
include information on:
new text end

new text begin (1) number of covered lives;
new text end

new text begin (2) covered services;
new text end

new text begin (3) geographic availability;
new text end

new text begin (4) whom to contact to obtain current premium rates;
new text end

new text begin (5) administrative costs, using the definition of administrative costs developed under
section 62J.38;
new text end

new text begin (6) Internet links to information on the health plan, if available; and
new text end

new text begin (7) any other information about the health plan identified by the commissioner
as being useful for employers, consumers, providers, and others in evaluating health
plan options.
new text end

new text begin (b) This section does not apply to a health plan company unless its annual Minnesota
premiums exceed $50,000,000 based on the most recent assessment base of the Minnesota
Comprehensive Health Association. For purposes of this determination, the premiums of a
health plan company include those of its affiliates.
new text end

Sec. 5. new text begin MEDICAL MALPRACTICE INSURANCE REPORT.
new text end

new text begin (a) The commissioner of commerce shall provide to the legislature, no later than
June 1 each year, a brief written report on the status of the market for medical malpractice
insurance in Minnesota. The report must summarize, interpret, explain, and analyze
information on that subject available to the commissioner, through annual statements filed
by insurance companies, information obtained under paragraph (c), and other sources.
new text end

new text begin (b) The annual report must consider, to the extent possible, Minnesota specific data
on market shares; premiums received; amounts paid to settle claims that were not litigated,
claims that were settled after litigation began, and claims that were litigated to court
judgment; amounts spent on processing, investigation, litigation, and otherwise handling
claims; other sales and administrative costs; and the loss ratios of the insurers.
new text end

new text begin (c) Each insurance company that provides medical malpractice insurance in this state
shall, no later than April 1 each year, file with the commissioner of commerce, on a form
prescribed by the commissioner, the Minnesota specific data referenced in paragraph (b),
other than market share, for the previous calendar year for that insurance company, shown
separately for the categories of coverage provided to hospitals, medical clinics, nursing
homes, physicians who provide emergency medical care, obstetrician gynecologists, and
ambulance services. An insurance company need not comply with this paragraph if its
direct premium written in the state for the previous calendar year is less than $2,000,000.
new text end

ARTICLE 6

SERVICE COOPERATIVES

Section 1.

Minnesota Statutes 2004, section 123A.21, subdivision 7, is amended to
read:

Subd. 7.

Educational programs and services.

new text begin (a) new text end The board of directors of each
SC shall submit annually a plan to the members. The plan shall identify the programs and
services which are suggested for implementation by the SC during the following year and
shall contain components of long-range planning determined by the SC. These programs
and services may include, but are not limited to, the following areas:

(1) administrative services;

(2) curriculum development;

(3) data processing;

(4) distance learning and other telecommunication services;

(5) evaluation and research;

(6) staff development;

(7) media and technology centers;

(8) publication and dissemination of materials;

(9) pupil personnel services;

(10) planning;

(11) secondary, postsecondary, community, adult, and adult vocational education;

(12) teaching and learning services, including services for students with special
talents and special needs;

(13) employee personnel services;

(14) vocational rehabilitation;

(15) health, diagnostic, and child development services and centers;

(16) leadership or direction in early childhood and family education;

(17) community services;

(18) shared time programs;

(19) fiscal services and risk management programs new text begin , including health reinsurance
programs new text end ;

(20) technology planning, training, and support services;

(21) health and safety services;

(22) student academic challenges; and

(23) cooperative purchasing services.

new text begin (b) A service cooperative may contract for goods and services in conjunction with
its health reinsurance programs, including management, actuarial, investment, and legal
services from others within or without this state to ensure the efficient operation of these
programs. It shall rebid its contracts for reinsurance that it purchases at least every two
years.
new text end

new text begin (c) A health reinsurance program operated by one or more service cooperatives may:
new text end

new text begin (1) provide reinsurance or stop-loss coverage to nursing homes licensed under
chapter 144A and boarding care homes licensed under sections 144.50 to 144.56 and
certified for participation in the medical assistance program located in this state; and
new text end

new text begin (2) determine premiums for its reinsurance or stop-loss coverage individually for
specific employers or may determine them on a pooled or other basis established by the SC.
new text end

new text begin (d) A health coverage program provided by one or more service cooperatives:
new text end

new text begin (1) may provide coverage to nursing homes licensed under chapter 144A and
boarding care homes licensed under sections 144.50 to 144.56 and certified for
participation in the medical assistance program located in this state;
new text end

new text begin (2) must rebid contracts for insurance and third-party administration at least every
four years;
new text end

new text begin (3) must comply with section 72.20, subdivision 26, notwithstanding section 13.203,
and must also provide that same information to exclusive representatives of the employees
upon request. A service cooperative shall not terminate coverage, exclude an employer
from future coverage, or otherwise penalize an employer for seeking bids from other
sources of health coverage; and
new text end

new text begin (4) must provide bids for initial issuance or renewal of coverage upon request to
eligible employers no later than 90 days prior to the expected beginning or renewal date of
coverage.
new text end

Sec. 2.

Minnesota Statutes 2004, section 471.61, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Reinsuring health risks. new text end

new text begin Any political subdivision, or any two or more
political subdivisions acting jointly, may provide for the reinsuring of risks incurred as a
result of providing the insurance or protection authorized by this section by participating
in a pool operated by a service cooperative or cooperatives pursuant to section 471.617,
subdivision 3a.
new text end

Sec. 3.

Minnesota Statutes 2004, section 471.617, subdivision 3, is amended to read:

Subd. 3.

Stop-loss coverage.

Any self-insurance plan covering fewer than 1,000
employees shall include excess or stop-loss coverage provided by a licensed insurance
company, an insurance company approved pursuant to sections 60A.195 to 60A.209,
or service plan corporation, but excess or stop-loss coverage need not be obtained for
long-term disability.

This excess or stop-loss coverage shall cover all eligible claims incurred during
the term of the policy or contract. In addition to excess or stop-loss coverage, the
self-insurance plan shall provide for reserving of an appropriate amount of funds to cover
the estimated cost of claims incurred, but unpaid, during the term of the policy or contract
which shall be added to the expected claim level. These funds shall be in addition to funds
reserved to cover the claims paid during the term of the policy or contract. The excess or
stop-loss coverage shall be provided at levels in excess of self-insured retention which is
appropriate, taking into account the number of covered persons in the group.

new text begin Coverage under subdivision 3a qualifies under this subdivision.
new text end

Sec. 4.

Minnesota Statutes 2004, section 471.617, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Reinsurance pools. new text end

new text begin A statutory or home rule charter city, county, school
district, or instrumentality of any of them may provide for the reinsuring of risks incurred
as a result of providing the health benefits authorized by this section through a pool
operated by a service cooperative or cooperatives established pursuant to section 123A.21.
new text end

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 4 are effective the day following final enactment.
new text end

ARTICLE 7

MEDICAL LIABILITY

Section 1.

new text begin [604.111] MEDICAL LIABILITY; USE OF PROVIDER'S APOLOGY.
new text end

new text begin Subdivision 1. new text end

new text begin Apology not admission; medical liability. new text end

new text begin In any civil action
brought by an alleged victim of an unanticipated outcome of medical care, or in any
arbitration proceeding related to such civil action, any and all statements, affirmations,
gestures, or conduct expressing apology, fault, sympathy, commiseration, condolence,
compassion, or a general sense of benevolence, which are made by a health care provider
or an employee of a health care provider to the alleged victim, a relative of the alleged
victim, or a representative of the alleged victim and which relate to the discomfort, pain,
suffering, injury, or death of the alleged victim as a result of the unanticipated outcome of
medical care shall be inadmissible as evidence of an admission of liability or as evidence
of an admission against interest or as an excited utterance.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, unless the context otherwise
requires:
new text end

new text begin (a) "Health care provider" means any person licensed, certified, or registered in this
state to deliver health care and any clinic, pharmacy, hospital, or other health facility
located in this state. The term includes any professional corporation or other professional
entity comprised of such health care providers as permitted by the laws of this state.
new text end

new text begin (b) "Relative" means a victim's spouse, parent, grandparent, stepfather, stepmother,
child, grandchild, brother, sister, half brother, half sister, or spouse's parents. The term
includes those relationships if created as a result of adoption. In addition, relative includes
any person who is a member of the victim's household.
new text end

new text begin (c) "Representative" means a legal guardian, attorney, person designated to make
decisions on behalf of a patient under a health care power of attorney, or any person
recognized in law or custom as a patient's agent.
new text end

new text begin (d) "Unanticipated outcome" means the outcome of a medical treatment or procedure
that differs from an expected result.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2007,
and applies to causes of action arising on or after that date.
new text end