HF 1873

2nd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; establishing the Minnesota Health Insurance Exchange;
establishing evidence-based health care guidelines; requiring all hospitals and
health care providers to have an electronic health records system by a certain
date; establishing an electronic health record system revolving account and loan
program; establishing a uniform electronic transactions and implementation
guide standards; establishing a Health Care Transformation Task Force; defining
evaluation parameters for provider performance; establishing a goal of achieving
access to affordable health care by 2011 for all Minnesota residents; requiring
certain hospitals to report on community benefits; encouraging communities
to coordinate health and wellness programs; requiring health care payment
system reform; establishing community collaborative pilot projects to cover the
uninsured; establishing health care payment reform pilot projects; requiring
a study of health care system consolidation; appropriating money; amending
Minnesota Statutes 2006, sections 62A.65, subdivision 3; 62E.141; 62J.04,
subdivision 3; 62J.495; 62J.60, by adding a subdivision; 62J.692, subdivisions 1,
4, 7a, 8, 10; 62J.81, subdivision 1; 62J.82; 62L.12, subdivisions 2, 4; 62Q.165,
subdivisions 1, 2; 62Q.80, subdivisions 3, 4, 13, 14; 144.698, subdivision 1;
144.699, by adding a subdivision; 256.01, subdivision 2b; 256B.0625, by adding
a subdivision; proposing coding for new law in Minnesota Statutes, chapters
62A; 62J; 62Q; 145; repealing Minnesota Statutes 2006, section 62J.052,
subdivision 1.

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

Section 1.

Minnesota Statutes 2006, section 62A.65, subdivision 3, is amended to read:

Subd. 3.

Premium rate restrictions.

No individual health plan may be offered,
sold, issued, or renewed to a Minnesota resident unless the premium rate charged is
determined in accordance with the following requirements:

(a) Premium rates must be no more than 25 percent above and no more than 25
percent below the index rate charged to individuals for the same or similar coverage,
adjusted pro rata for rating periods of less than one year. The premium variations
permitted by this paragraph must be based only upon health status, claims experience,
and occupation. For purposes of this paragraph, health status includes refraining from
tobacco use or other actuarially valid lifestyle factors associated with good health,
provided that the lifestyle factor and its effect upon premium rates have been determined
by the commissioner to be actuarially valid and have been approved by the commissioner.
Variations permitted under this paragraph must not be based upon age or applied
differently at different ages. This paragraph does not prohibit use of a constant percentage
adjustment for factors permitted to be used under this paragraph.

(b) Premium rates may vary based upon the ages of covered persons only as
provided in this paragraph. In addition to the variation permitted under paragraph (a),
each health carrier may use an additional premium variation based upon age new text begin for adults
aged 19 and above new text end of up to plus or minus 50 percent of the index rate. new text begin Premium rates for
children under the age of 19 may not vary based on age, regardless of whether the child is
covered as a dependent or as a primary insured.
new text end

(c) A health carrier may request approval by the commissioner to establish separate
geographic regions determined by the health carrier and to establish separate index rates
for each such region. The commissioner shall grant approval if the following conditions
are met:

(1) the geographic regions must be applied uniformly by the health carrier;

(2) each geographic region must be composed of no fewer than seven counties that
create a contiguous region; and

(3) the health carrier provides actuarial justification acceptable to the commissioner
for the proposed geographic variations in index rates, establishing that the variations are
based upon differences in the cost to the health carrier of providing coverage.

(d) Health carriers may use rate cells and must file with the commissioner the rate
cells they use. Rate cells must be based upon the number of adults or children covered
under the policy and may reflect the availability of Medicare coverage. The rates for
different rate cells must not in any way reflect generalized differences in expected costs
between principal insureds and their spouses.

(e) In developing its index rates and premiums for a health plan, a health carrier shall
take into account only the following factors:

(1) actuarially valid differences in rating factors permitted under paragraphs (a)
and (b); and

(2) actuarially valid geographic variations if approved by the commissioner as
provided in paragraph (c).

(f) All premium variations must be justified in initial rate filings and upon request of
the commissioner in rate revision filings. All rate variations are subject to approval by
the commissioner.

(g) The loss ratio must comply with the section 62A.021 requirements for individual
health plans.

(h) The rates must not be approved, unless the commissioner has determined that the
rates are reasonable. In determining reasonableness, the commissioner shall consider the
growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar
year or years that the proposed premium rate would be in effect, actuarially valid changes
in risks associated with the enrollee populations, and actuarially valid changes as a result
of statutory changes in Laws 1992, chapter 549.

(i) An insurer may, as part of a minimum lifetime loss ratio guarantee filing under
section 62A.02, subdivision 3a, include a rating practices guarantee as provided in this
paragraph. The rating practices guarantee must be in writing and must guarantee that
the policy form will be offered, sold, issued, and renewed only with premium rates and
premium rating practices that comply with subdivisions 2, 3, 4, and 5. The rating practices
guarantee must be accompanied by an actuarial memorandum that demonstrates that the
premium rates and premium rating system used in connection with the policy form will
satisfy the guarantee. The guarantee must guarantee refunds of any excess premiums to
policyholders charged premiums that exceed those permitted under subdivision 2, 3, 4,
or 5. An insurer that complies with this paragraph in connection with a policy form is
exempt from the requirement of prior approval by the commissioner under paragraphs
(c), (f), and (h).

Sec. 2.

new text begin [62A.67] MINNESOTA HEALTH INSURANCE EXCHANGE.
new text end

new text begin Subdivision 1. new text end

new text begin Title; citation. new text end

new text begin This section may be cited as the "Minnesota Health
Insurance Exchange."
new text end

new text begin Subd. 2. new text end

new text begin Creation; tax exemption. new text end

new text begin The Minnesota Health Insurance Exchange
is created for the limited purpose of providing individuals with greater access, choice,
portability, and affordability of health insurance products. The Minnesota Health
Insurance Exchange is a not-for-profit corporation under chapter 317A and section 501(c)
of the Internal Revenue Code.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin The following terms have the meanings given them unless
otherwise provided in text.
new text end

new text begin (a) "Board" means the board of directors of the Minnesota Health Insurance
Exchange under subdivision 13.
new text end

new text begin (b) "Commissioner" means:
new text end

new text begin (1) the commissioner of commerce for health insurers subject to the jurisdiction
of the Department of Commerce;
new text end

new text begin (2) the commissioner of health for health insurers subject to the jurisdiction of the
Department of Health; or
new text end

new text begin (3) either commissioner's designated representative.
new text end

new text begin (c) "Exchange" means the Minnesota Health Insurance Exchange.
new text end

new text begin (d) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996.
new text end

new text begin (e) "Individual market health plans," unless otherwise specified, means individual
market health plans defined in section 62A.011.
new text end

new text begin (f) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125 of
the Internal Revenue Code that allows employees to pay for health insurance premiums
with pretax dollars.
new text end

new text begin Subd. 4. new text end

new text begin Insurer and health plan participation. new text end

new text begin All health plans as defined in
section 62A.011, subdivision 3, issued or renewed in the individual market shall participate
in the exchange. No health plans in the individual market may be issued or renewed
outside of the exchange. Group health plans as defined in section 62A.10 shall not be
offered through the exchange. Health plans offered through the Minnesota Comprehensive
Health Association as defined in section 62E.10 are offered through the exchange to
eligible enrollees as determined by the Minnesota Comprehensive Health Association.
Health plans offered through MinnesotaCare under chapter 256L are offered through the
exchange to eligible enrollees as determined by the commissioner of human services.
new text end

new text begin Subd. 5. new text end

new text begin Approval of health plans. new text end

new text begin No health plan may be offered through the
exchange unless the commissioner has first certified that:
new text end

new text begin (1) the insurer seeking to offer the health plan is licensed to issue health insurance in
the state; and
new text end

new text begin (2) the health plan meets the requirements of this section, and the health plan and the
insurer are in compliance with all other applicable health insurance laws.
new text end

new text begin Subd. 6. new text end

new text begin Individual market health plans. new text end

new text begin Individual market health plans offered
through the exchange continue to be regulated by the commissioner as specified in
chapters 62A, 62C, 62D, 62E, 62Q, and 72A, and must include the following provisions
that apply to all health plans issued or renewed through the exchange:
new text end

new text begin (1) premiums for children under the age of 19 shall not vary by age in the exchange;
and
new text end

new text begin (2) premiums for children under the age of 19 must be excluded from rating factors
under section 62A.65, subdivision 3, paragraph (b).
new text end

new text begin Subd. 7. new text end

new text begin Individual participation and eligibility. new text end

new text begin Individuals are eligible to
purchase health plans directly through the exchange or through an employer Section
125 Plan under section 62A.68. Nothing in this section requires guaranteed issue of
individual market health plans offered through the exchange. Individuals are eligible to
purchase individual market health plans through the exchange by meeting one or more
of the following qualifications:
new text end

new text begin (1) the individual is a Minnesota resident, meaning the individual is physically
residing on a permanent basis in a place that is the person's principal residence and from
which the person is absent only for temporary purposes;
new text end

new text begin (2) the individual is a student attending an institution outside of Minnesota and
maintains Minnesota residency;
new text end

new text begin (3) the individual is not a Minnesota resident but is employed by an employer
physically located within the state and the individual's employer is required to offer a
Section 125 Plan under section 62A.68;
new text end

new text begin (4) the individual is not a Minnesota resident but is self-employed and the
individual's principal place of business is in the state; or
new text end

new text begin (5) the individual is a dependent, as defined in section 62L.02, of another individual
who is eligible to participate in the exchange.
new text end

new text begin Subd. 8. new text end

new text begin Continuation of coverage. new text end

new text begin Enrollment in a health plan may be canceled
for nonpayment of premiums, fraud, or changes in eligibility for MinnesotaCare under
chapter 256L. Enrollment in an individual market health plan may not be canceled or
nonrenewed because of any change in employer or employment status, marital status,
health status, age, residence, or any other change that does not affect eligibility as defined
in this section.
new text end

new text begin Subd. 9. new text end

new text begin Responsibilities of the exchange. new text end

new text begin The exchange shall serve as the sole
entity for enrollment and collection and transfer of premium payments for health plans
sold to individuals through the exchange. The exchange shall be responsible for the
following functions:
new text end

new text begin (1) publicize the exchange, including but not limited to its functions, eligibility
rules, and enrollment procedures;
new text end

new text begin (2) provide assistance to employers to establish Section 125 Plans under section
62A.68;
new text end

new text begin (3) provide education and assistance to employers to help them understand the
requirements of Section 125 Plans and compliance with applicable regulations;
new text end

new text begin (4) create a system to allow individuals to compare and enroll in health plans offered
through the exchange;
new text end

new text begin (5) create a system to collect and transmit to the applicable plans all premium
payments made by individuals, including developing mechanisms to receive and process
automatic payroll deductions for individuals who purchase coverage through employer
Section 125 Plans;
new text end

new text begin (6) not accept premium payments for individual market health plans from an
employer Section 125 Plan if the employer offers a group health plan as defined in section
62A.10 or has offered a group health plan in the last 12 months, or if the employer is a
self-insurer as defined in section 62E.02;
new text end

new text begin (7) provide jointly with health insurers a cancellation notice directly to the primary
insured at least ten days prior to termination of coverage for nonpayment of premium;
new text end

new text begin (8) bill the employer for the premiums payable by an employee, provided that the
employer is not liable for payment except from payroll deductions for that purpose;
new text end

new text begin (9) refer individuals interested in MinnesotaCare under chapter 256L to the
Department of Human Services to determine eligibility;
new text end

new text begin (10) establish a mechanism with the Department of Human Services to transfer
premiums and subsidies for MinnesotaCare to qualify for federal matching payments;
new text end

new text begin (11) upon request, issue certificates of previous coverage according to the provisions
of HIPAA and as referenced in section 62Q.181 to all such individuals who cease to be
covered by a participating health plan through the exchange;
new text end

new text begin (12) establish procedures to account for all funds received and disbursed by the
exchange for individual participants of the exchange;
new text end

new text begin (13) make available to the public, at the end of each calendar year, a report of an
independent audit of the exchange's accounts; and
new text end

new text begin (14) provide copies of written and signed statements from employers stating that
the employer is not contributing to the employee's premiums for health plans purchased
by an employee through the exchange to all health insurers with enrolled employees of
the employer.
new text end

new text begin Health insurers may rely on the employer's statement in clause (14) provided by the
Minnesota Health Insurance Exchange and are not required to guarantee-issue individual
health plans to the employer's employees.
new text end

new text begin Subd. 10. new text end

new text begin State not liable. new text end

new text begin The state of Minnesota shall not be liable for the actions
of the Minnesota Health Insurance Exchange.
new text end

new text begin Subd. 11. new text end

new text begin Powers of the exchange. new text end

new text begin The exchange shall have the power to:
new text end

new text begin (1) contract with insurance producers licensed in accident and health insurance
under chapter 60K and vendors to perform one or more of the functions specified in
subdivision 9;
new text end

new text begin (2) contract with employers to collect premiums through a Section 125 Plan for
eligible individuals who purchase an individual market health plan through the exchange;
new text end

new text begin (3) establish and assess fees on health plan premiums of health plans purchased
through the exchange to fund the cost of administering the exchange;
new text end

new text begin (4) seek and directly receive grant funding from government agencies or private
philanthropic organizations to defray the costs of operating the exchange;
new text end

new text begin (5) establish and administer rules and procedures governing the operations of the
exchange;
new text end

new text begin (6) establish one or more service centers within Minnesota;
new text end

new text begin (7) sue or be sued or otherwise take any necessary or proper legal action;
new text end

new text begin (8) establish bank accounts and borrow money; and
new text end

new text begin (9) enter into agreements with the commissioners of commerce, health, human
services, revenue, employment and economic development, and other state agencies as
necessary for the exchange to implement the provisions of this section.
new text end

new text begin Subd. 12. new text end

new text begin Dispute resolution. new text end

new text begin The exchange shall establish procedures for
resolving disputes with respect to the eligibility of an individual to participate in the
exchange. The exchange does not have the authority or responsibility to intervene in or
resolve disputes between an individual and a health plan or health insurer. The exchange
shall refer complaints from individuals participating in the exchange to the commissioner
of health to be resolved according to sections 62Q.68 to 62Q.73.
new text end

new text begin Subd. 13. new text end

new text begin Governance. new text end

new text begin The exchange shall be governed by a board of directors
with 11 members. The board shall convene on or before July 1, 2007, after the initial board
members have been selected. The initial board membership consists of the following:
new text end

new text begin (1) the commissioner of commerce;
new text end

new text begin (2) the commissioner of human services;
new text end

new text begin (3) the commissioner of health;
new text end

new text begin (4) four members appointed by a joint committee of the Minnesota senate and the
Minnesota house of representatives to serve three-year terms; and
new text end

new text begin (5) four members appointed by the governor to serve three-year terms.
new text end

new text begin Subd. 14. new text end

new text begin Subsequent board membership. new text end

new text begin Ongoing membership of the exchange
consists of the following effective July 1, 2010:
new text end

new text begin (1) the commissioner of commerce;
new text end

new text begin (2) the commissioner of human services;
new text end

new text begin (3) the commissioner of health;
new text end

new text begin (4) two members appointed by the governor with the approval of a joint committee
of the senate and house of representatives to serve two-year terms; and
new text end

new text begin (5) six members elected by the membership of the exchange of which three are
elected to serve two-year terms and three are elected to serve three-year terms. Appointed
and elected members may serve more than one term.
new text end

new text begin Subd. 15. new text end

new text begin Operations of the board. new text end

new text begin Officers of the board of directors are elected by
members of the board and serve one-year terms. Six members of the board constitutes a
quorum, and the affirmative vote of six members of the board is necessary and sufficient
for any action taken by the board. Board members serve without pay, but are reimbursed
for actual expenses incurred in the performance of their duties.
new text end

new text begin Subd. 16. new text end

new text begin Operations of the exchange. new text end

new text begin The board of directors shall appoint an
exchange director who shall:
new text end

new text begin (1) be a full-time employee of the exchange;
new text end

new text begin (2) administer all of the activities and contracts of the exchange; and
new text end

new text begin (3) hire and supervise the staff of the exchange.
new text end

new text begin Subd. 17. new text end

new text begin Insurance producers. new text end

new text begin An individual has the right to choose any
insurance producer licensed in accident and health insurance under chapter 60K to assist
the individual in purchasing an individual market health plan through the exchange.
When a producer licensed in accident and health insurance under chapter 60K enrolls an
eligible individual in the exchange, the health plan chosen by an individual may pay the
producer a commission.
new text end

new text begin Subd. 18. new text end

new text begin Implementation. new text end

new text begin Health plan coverage through the exchange begins on
January 1, 2009. The exchange must be operational to assist employers and individuals
by September 1, 2008, and be prepared for enrollment by December 1, 2008. Enrollees
of individual market health plans, MinnesotaCare, and the Minnesota Comprehensive
Health Association as of December 2, 2008, are automatically enrolled in the exchange
on January 1, 2009, in the same health plan and at the same premium that they were
enrolled as of December 2, 2008, subject to the provisions of this section. As of January 1,
2009, all enrollees of individual market health plans, MinnesotaCare, and the Minnesota
Comprehensive Health Association shall make premium payments to the exchange.
new text end

Sec. 3.

new text begin [62A.68] SECTION 125 PLANS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin The following terms have the meanings given unless
otherwise provided in text.
new text end

new text begin (a) "Current employee" means an employee currently on an employer's payroll other
than a retiree or disabled former employee.
new text end

new text begin (b) "Employer" means a person, firm, corporation, partnership, association, business
trust, or other entity employing one or more persons, including a political subdivision of
the state, filing payroll tax information on the employed person or persons.
new text end

new text begin (c) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125
of the Internal Revenue Code that allows employees to purchase health insurance with
pretax dollars.
new text end

new text begin (d) "Exchange" means the Minnesota Health Insurance Exchange under section
62A.67.
new text end

new text begin (e) "Exchange director" means the appointed director under section 62A.67,
subdivision 16.
new text end

new text begin Subd. 2. new text end

new text begin Section 125 Plan requirement. new text end

new text begin (a) Effective January 1, 2009, all
employers with 11 or more current employees shall establish a Section 125 Plan to
allow their employees to purchase individual market health plan coverage with pretax
dollars. Nothing in this section requires or mandates employers to offer or purchase
health insurance coverage for their employees. The following employers are exempt
from the Section 125 Plan requirement:
new text end

new text begin (1) employers that offer a group health insurance plan as defined in section 62A.10;
new text end

new text begin (2) employers that are self-insurers as defined in section 62E.02; and
new text end

new text begin (3) employers with fewer than 11 current employees, except that employers under
this clause may voluntarily offer a Section 125 Plan.
new text end

new text begin (b) Employers that offer a Section 125 Plan may enter into an agreement with the
exchange to administer the employer's Section 125 Plan.
new text end

new text begin Subd. 3. new text end

new text begin Tracking compliance. new text end

new text begin By July 1, 2008, the exchange, in consultation with
the commissioners of commerce, health, employment and economic development, and
revenue, shall establish a method for tracking employer compliance with the Section 125
Plan requirement.
new text end

new text begin Subd. 4. new text end

new text begin Employer requirements. new text end

new text begin Employers that are required to offer or choose
to offer a Section 125 Plan shall:
new text end

new text begin (1) allow employees to purchase any individual market health plan for themselves
and their dependents through the exchange;
new text end

new text begin (2) allow employees to choose any insurance producer licensed in accident and
health insurance under chapter 60K to assist them in purchasing an individual market
health plan through the exchange;
new text end

new text begin (3) provide a written and signed statement to the exchange stating that the employer
is not contributing to the employee's premiums for health plans purchased by an employee
through the exchange;
new text end

new text begin (4) upon an employee's request, deduct premium amounts on a pretax basis in an
amount not to exceed an employee's wages, and remit these employee payments to the
exchange; and
new text end

new text begin (5) provide notice to employees that individual market health plans purchased
through the exchange are not employer-sponsored or administered. Employers shall be
held harmless from any and all liability claims related to the individual market health
plans purchased through the exchange by employees under a Section 125 Plan.
new text end

new text begin Subd. 5. new text end

new text begin Section 125 eligible health plans. new text end

new text begin Individuals who are eligible to use
an employer Section 125 Plan to pay for health insurance coverage purchased through
the exchange may enroll in any health plan offered through the exchange for which the
individual is eligible, including individual market health plans, MinnesotaCare, and the
Minnesota Comprehensive Health Association.
new text end

Sec. 4.

Minnesota Statutes 2006, section 62E.141, is amended to read:

62E.141 INCLUSION IN EMPLOYER-SPONSORED PLAN.

No employee of an employer that offers a new text begin group new text end health plan, under which the
employee is eligible for coverage, is eligible to enroll, or continue to be enrolled, in
the comprehensive health association, except for enrollment or continued enrollment
necessary to cover conditions that are subject to an unexpired preexisting condition
limitation, preexisting condition exclusion, or exclusionary rider under the employer's
health plan. This section does not apply to persons enrolled in the Comprehensive Health
Association as of June 30, 1993. With respect to persons eligible to enroll in the health
plan of an employer that has more than 29 current employees, as defined in section
62L.02, this section does not apply to persons enrolled in the Comprehensive Health
Association as of December 31, 1994.

Sec. 5.

Minnesota Statutes 2006, section 62J.04, subdivision 3, is amended to read:

Subd. 3.

Cost containment duties.

The commissioner shall:

(1) establish statewide and regional cost containment goals for total health care
spending under this section deleted text begin and deleted text end new text begin , new text end collect data as described in sections 62J.38 to 62J.41 to
monitor statewide achievement of the cost containment goals new text begin , and annually report to the
legislature on whether the goals were achieved and, if not, what action should be taken to
ensure that goals are achieved in the future new text end ;

(2) divide the state into no fewer than four regions, with one of those regions being
the Minneapolis/St. Paul metropolitan statistical area but excluding Chisago, Isanti,
Wright, and Sherburne Counties, for purposes of fostering the development of regional
health planning and coordination of health care delivery among regional health care
systems and working to achieve the cost containment goals;

(3) monitor the quality of health care throughout the state and take action as
necessary to ensure an appropriate level of quality;

(4) issue recommendations regarding uniform billing forms, uniform electronic
billing procedures and data interchanges, patient identification cards, and other uniform
claims and administrative procedures for health care providers and private and public
sector payers. In developing the recommendations, the commissioner shall review the
work of the work group on electronic data interchange (WEDI) and the American National
Standards Institute (ANSI) at the national level, and the work being done at the state and
local level. The commissioner may adopt rules requiring the use of the Uniform Bill
82/92 form, the National Council of Prescription Drug Providers (NCPDP) 3.2 electronic
version, the Centers for Medicare and Medicaid Services 1500 form, or other standardized
forms or procedures;

(5) undertake health planning responsibilities;

(6) authorize, fund, or promote research and experimentation on new technologies
and health care procedures;

(7) within the limits of appropriations for these purposes, administer or contract for
statewide consumer education and wellness programs that will improve the health of
Minnesotans and increase individual responsibility relating to personal health and the
delivery of health care services, undertake prevention programs including initiatives to
improve birth outcomes, expand childhood immunization efforts, and provide start-up
grants for worksite wellness programs;

(8) undertake other activities to monitor and oversee the delivery of health care
services in Minnesota with the goal of improving affordability, quality, and accessibility of
health care for all Minnesotans; and

(9) make the cost containment goal data available to the public in a
consumer-oriented manner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 6.

new text begin [62J.431] EVIDENCE-BASED HEALTH CARE GUIDELINES.
new text end

new text begin Evidence-based guidelines 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 grated;
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. 7.

Minnesota Statutes 2006, section 62J.495, is amended to read:

62J.495 HEALTH INFORMATION TECHNOLOGY AND
INFRASTRUCTURE deleted text begin ADVISORY COMMITTEE deleted text end .

Subdivision 1.

deleted text begin Establishment; members; duties deleted text end new text begin Implementation new text end .

new text begin By January
1, 2012, all hospitals and health care providers must have in place an interoperable
electronic health records system within their hospital system or clinical practice setting.
The commissioner of health, in consultation with the Health Information Technology and
Infrastructure Advisory Committee, shall develop a statewide plan to meet this goal,
including the adoption of uniform standards to be used for the interoperable system for
sharing and synchronizing patient data across systems. The standards must be compatible
with federal efforts. The uniform standards must be refined and adopted for use when
a standard development organization accredited by the American National Standards
Institute completes the development of a standard for sharing and synchronizing patient
data across systems.
new text end

new text begin Subd. 2. new text end

new text begin Health Information Technology and Infrastructure Advisory
Committee. new text end

(a) The commissioner shall establish a Health Information Technology
and Infrastructure Advisory Committee governed by section 15.059 to advise the
commissioner on the following matters:

(1) assessment of the use of health information technology by the state, licensed
health care providers and facilities, and local public health agencies;

(2) recommendations for implementing a statewide interoperable health information
infrastructure, to include estimates of necessary resources, and for determining standards
for administrative data exchange, clinical support programs, patient privacy requirements,
and maintenance of the security and confidentiality of individual patient data; deleted text begin and
deleted text end

new text begin (3) recommendations for encouraging use of innovative health care applications
using information technology and systems to improve patient care and reduce the cost
of care, including applications relating to disease management and personal health
management that enable remote monitoring of patients' conditions, especially those with
chronic conditions; and
new text end

deleted text begin (3) deleted text end new text begin (4) new text end other related issues as requested by the commissioner.

(b) The members of the Health Information Technology and Infrastructure Advisory
Committee shall include the commissioners, or commissioners' designees, of health,
human services, administration, and commerce and additional members to be appointed
by the commissioner to include persons representing Minnesota's local public health
agencies, licensed hospitals and other licensed facilities and providers, private purchasers,
the medical and nursing professions, health insurers and health plans, the state quality
improvement organization, academic and research institutions, consumer advisory
organizations with an interest and expertise in health information technology, and other
stakeholders as identified by the Health Information Technology and Infrastructure
Advisory Committee.

deleted text begin Subd. 2. deleted text end deleted text begin Annual report. deleted text end new text begin (c) new text end The commissioner shall prepare and issue an annual
report not later than January 30 of each year outlining progress to date in implementing a
statewide health information infrastructure and recommending future projects.

deleted text begin Subd. 3. deleted text end deleted text begin Expiration. deleted text end new text begin (d) new text end Notwithstanding section 15.059, this deleted text begin section deleted text end new text begin subdivision
new text end expires June 30, deleted text begin 2009 deleted text end new text begin 2012 new text end .

Sec. 8.

new text begin [62J.496] ELECTRONIC HEALTH RECORD SYSTEM REVOLVING
ACCOUNT AND LOAN PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Account establishment. new text end

new text begin An account is established to provide loans
to eligible borrowers to assist in financing the installation or support of an interoperable
electronic health record system. The system must provide for the interoperable exchange
of health care information between the applicant and, at a minimum, a hospital system,
pharmacy, and a health care clinic or other physician group.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin (a) "Eligible borrower" means one of the following:
new text end

new text begin (1) community clinics, as defined under section 145.9268;
new text end

new text begin (2) hospitals eligible for rural hospital capital improvement grants, as defined
in section 144.148;
new text end

new text begin (3) physician clinics located in a community with a population of less than 50,000
according to United States Census Bureau statistics and outside the seven-county
metropolitan area;
new text end

new text begin (4) nursing facilities licensed under sections 144A.01 to 144A.27; and
new text end

new text begin (5) other providers of health or health care services approved by the commissioner
for which interoperable electronic health record capability would improve quality of
care, patient safety, or community health.
new text end

new text begin (b) To be eligible for a loan under this section, the applicant must submit a loan
application to the commissioner of health on forms prescribed by the commissioner. The
application must include, at a minimum:
new text end

new text begin (1) the amount of the loan requested and a description of the purpose or project
for which the loan proceeds will be used;
new text end

new text begin (2) a quote from a vendor;
new text end

new text begin (3) a description of the health care entities and other groups participating in the
project;
new text end

new text begin (4) evidence of financial stability and a demonstrated ability to repay the loan; and
new text end

new text begin (5) a description of how the system to be financed interconnects or plans in the
future to interconnect with other health care entities and provider groups located in the
same geographical area.
new text end

new text begin Subd. 3. new text end

new text begin Loans. new text end

new text begin (a) The commissioner of health may make a no interest loan
to a provider or provider group who is eligible under subdivision 2 on a first-come,
first-served basis provided that the applicant is able to comply with this section. The total
accumulative loan principal must not exceed $1,500,000 per loan. The commissioner of
health has discretion over the size and number of loans made.
new text end

new text begin (b) The commissioner of health may prescribe forms and establish an application
process and, notwithstanding section 16A.1283, may impose a reasonable nonrefundable
application fee to cover the cost of administering the loan program. Any application
fees imposed and collected under the electronic health records system revolving account
and loan program in this section are appropriated to the commissioner of health for the
duration of the loan program.
new text end

new text begin (c) The borrower must begin repaying the principal no later than two years from the
date of the loan. Loans must be amortized no later than six years from the date of the loan.
new text end

new text begin (d) Repayments must be credited to the account.
new text end

new text begin Subd. 4. new text end

new text begin Data classification. new text end

new text begin Data collected by the commissioner of health on the
application to determine eligibility under subdivision 2 and to monitor borrowers' default
risk or collect payments owed under subdivision 3 are (1) private data on individuals as
defined in section 13.02, subdivision 12; and (2) nonpublic data as defined in section
13.02, subdivision 9. The names of borrowers and the amounts of the loans granted are
public data.
new text end

Sec. 9.

new text begin [62J.536] UNIFORM ELECTRONIC TRANSACTIONS AND
IMPLEMENTATION GUIDE STANDARDS.
new text end

new text begin Subdivision 1. new text end

new text begin Electronic claims and eligibility transactions required. new text end

new text begin (a)
Beginning January 15, 2009, all group purchasers must accept from health care providers
the eligibility for a health plan transaction described under Code of Federal Regulations,
title 45, part 162, subpart L. Beginning July 15, 2009, all group purchasers must accept
from health care providers the health care claims or equivalent encounter information
transaction described under Code of Federal Regulations, title 45, part 162, subpart K.
new text end

new text begin (b) Beginning January 15, 2009, all group purchasers must transmit to providers the
eligibility for a health plan transaction described under Code of Federal Regulations, title
45, part 162, subpart L. Beginning December 1, 2009, all group purchasers must transmit
to providers the health care payment and remittance advice transaction described under
Code of Federal Regulations, title 45, part 162, subpart P.
new text end

new text begin (c) Beginning January 15, 2009, all health care providers must submit to group
purchasers the eligibility for a health plan transaction described under Code of Federal
Regulations, title 45, part 162, subpart L. Beginning July 15, 2009, all health care
providers must submit to group purchasers the health care claims or equivalent encounter
information transaction described under Code of Federal Regulations, title 45, part 162,
subpart K.
new text end

new text begin (d) Beginning January 15, 2009, all health care providers must accept from group
purchasers the eligibility for a health plan transaction described under Code of Federal
Regulations, title 45, part 162, subpart L. Beginning December 15, 2009, all health care
providers must accept from group purchasers the health care payment and remittance
advice transaction described under Code of Federal Regulations, title 45, part 162, subpart
P.
new text end

new text begin (e) Each of the transactions described in paragraphs (a) to (d) shall require the use
of a single, uniform companion guide to the implementation guides described under
Code of Federal Regulations, title 45, part 162. The companion guides will be developed
pursuant to subdivision 2.
new text end

new text begin (f) Notwithstanding any other provisions in sections 62J.50 to 62J.61, all group
purchasers and health care providers must exchange claims and eligibility information
electronically using the transactions, companion guides, implementation guides, and
timelines required under this subdivision. Group purchasers may not impose any fee on
providers for the use of the transactions prescribed in this subdivision.
new text end

new text begin (g) Nothing in this subdivision shall prohibit group purchasers and health care
providers from using a direct data entry, Web-based methodology for complying with
the requirements of this subdivision. Any direct data entry method for conducting
the transactions specified in this subdivision must be consistent with the data content
component of the single, uniform companion guides required in paragraph (e) and the
implementation guides described under Code of Federal Regulations, title 45, part 162.
new text end

new text begin Subd. 2. new text end

new text begin Establishing uniform, standard companion guides. new text end

new text begin (a) At least 12
months prior to the timelines required in subdivision 1, the commissioner of health shall
adopt rules pursuant to section 62J.61 establishing and requiring group purchasers and
health care providers to use the transactions and the uniform, standard companion guides
required under subdivision 1, paragraph (e).
new text end

new text begin (b) The commissioner of health must consult with the Minnesota Administrative
Uniformity Committee on the development of the single, uniform companion guides
required under subdivision 1, paragraph (e), for each of the transactions in subdivision 1.
The single uniform companion guides required under subdivision 1, paragraph (e), must
specify uniform billing and coding standards. The commissioner of health shall base the
companion guides required under subdivision 1, paragraph (e), billing and coding rules,
and standards on the Medicare program, with modifications that the commissioner deems
appropriate after consulting the Minnesota Administrative Uniformity Committee.
new text end

new text begin (c) No group purchaser or health care provider may add to or modify the single,
uniform companion guides defined in subdivision 1, paragraph (e), through additional
companion guides or other requirements.
new text end

new text begin (d) In adopting the rules in paragraph (a), the commissioner shall not require data
content that is not essential to accomplish the purpose of the transactions in subdivision 1.
new text end

Sec. 10.

Minnesota Statutes 2006, section 62J.60, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Required statement. new text end

new text begin An identification card issued to an enrollee by a
health plan company or other entity governed by Minnesota health coverage laws must
contain the following statement: "Subject to Minnesota law."
new text end

Sec. 11.

Minnesota Statutes 2006, section 62J.692, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section, the following definitions
apply:

(a) "Accredited clinical training" means the clinical training provided by a
medical education program that is accredited through an organization recognized by the
Department of Education, the Centers for Medicare and Medicaid Services, or another
national body who reviews the accrediting organizations for multiple disciplines and
whose standards for recognizing accrediting organizations are reviewed and approved by
the commissioner of health in consultation with the Medical Education and Research
Advisory Committee.

(b) "Commissioner" means the commissioner of health.

(c) "Clinical medical education program" means the accredited clinical training of
physicians (medical students and residents), doctor of pharmacy practitioners, doctors
of chiropractic, dentists, advanced practice nurses (clinical nurse specialists, certified
registered nurse anesthetists, nurse practitioners, and certified nurse midwives), and
physician assistants.

(d) "Sponsoring institution" means a hospital, school, or consortium located in
Minnesota that sponsors and maintains primary organizational and financial responsibility
for a clinical medical education program in Minnesota and which is accountable to the
accrediting body.

(e) "Teaching institution" means a hospital, medical center, clinic, or other
organization that conducts a clinical medical education program in Minnesota.

(f) "Trainee" means a student or resident involved in a clinical medical education
program.

(g) "Eligible trainee FTEs" means the number of trainees, as measured by full-time
equivalent counts, that are at training sites located in Minnesota with deleted text begin a deleted text end new text begin currently
active new text end medical assistance deleted text begin provider number deleted text end new text begin enrollment status and a National Provider
Identification (NPI) number new text end where training occurs in either an inpatient or ambulatory
patient care setting and where the training is funded, in part, by patient care revenues.

Sec. 12.

Minnesota Statutes 2006, section 62J.692, subdivision 4, is amended to read:

Subd. 4.

Distribution of funds.

(a) The commissioner shall annually distribute
90 percent of deleted text begin available medical education deleted text end funds new text begin transferred according to section
256B.69, subdivision 5c, paragraph (a), clause (1), new text end to all qualifying applicants based on a
distribution formula that reflects a summation of two factors:

(1) an education factor, which is determined by the total number of eligible trainee
FTEs and the total statewide average costs per trainee, by type of trainee, in each clinical
medical education program; and

(2) a public program volume factor, which is determined by the total volume of
public program revenue received by each training site as a percentage of all public
program revenue received by all training sites in the fund pool.

In this formula, the education factor is weighted at 67 percent and the public program
volume factor is weighted at 33 percent.

Public program revenue for the distribution formula includes revenue from medical
assistance, prepaid medical assistance, general assistance medical care, and prepaid
general assistance medical care. Training sites that receive no public program revenue
are ineligible for funds available under this paragraph. Total statewide average costs per
trainee for medical residents is based on audited clinical training costs per trainee in
primary care clinical medical education programs for medical residents. Total statewide
average costs per trainee for dental residents is based on audited clinical training costs
per trainee in clinical medical education programs for dental students. Total statewide
average costs per trainee for pharmacy residents is based on audited clinical training costs
per trainee in clinical medical education programs for pharmacy students.

(b) The commissioner shall annually distribute ten percent of deleted text begin total available medical
education deleted text end funds new text begin transferred according to section 256B.69, subdivision 5c, paragraph (a),
clause (1), new text end to all qualifying applicants based on the percentage received by each applicant
under paragraph (a). These funds are to be used to offset clinical education costs at
eligible clinical training sites based on criteria developed by the clinical medical education
program. Applicants may choose to distribute funds allocated under this paragraph based
on the distribution formula described in paragraph (a).

new text begin (c) The commissioner shall annually distribute $5,000,000 of the funds dedicated
to the commissioner under section 297F.10, subdivision 1, clause (2), plus any federal
financial participation on these funds and on funds transferred under subdivision 10, to all
qualifying applicants based on a distribution formula that gives 100 percent weight to a
public program volume factor, which is determined by the total volume of public program
revenue received by each training site as a percentage of all public program revenue
received by all training sites in the fund pool. If federal approval is not obtained for
federal financial participation on any portion of funds distributed under this paragraph,
90 percent of the unmatched funds shall be distributed by the commissioner based on
the formula described in paragraph (a) and ten percent of the unmatched funds shall be
distributed by the commissioner based on the formula described in paragraph (b).
new text end

new text begin (d) The commissioner shall annually distribute $3,060,000 of funds dedicated to the
commissioner under section 297F.10, subdivision 1, clause (2), through a formula giving
100 percent weight to an education factor, which is determined by the total number of
eligible trainee full-time equivalents and the total statewide average costs per trainee, by
type of trainee, in each clinical medical education program. If no matching funds are
received on funds distributed under paragraph (c), funds distributed under this paragraph
shall be distributed by the commissioner based on the formula described in paragraph (a).
new text end

new text begin (e) The commissioner shall annually distribute $340,000 of funds dedicated to the
commissioner under section 297F.10, subdivision 1, clause (2), to all qualifying applicants
based on the percentage received by each applicant under paragraph (a). These funds are
to be used to offset clinical education costs at eligible clinical training sites based on
criteria developed by the clinical medical education program. Applicants may choose to
distribute funds allocated under this paragraph based on the distribution formula described
in paragraph (a). If no matching funds are received on funds distributed under paragraph
(c), funds distributed under this paragraph shall be distributed by the commissioner based
on the formula described in paragraph (b).
new text end

deleted text begin (c) deleted text end new text begin (f) new text end Funds distributed shall not be used to displace current funding appropriations
from federal or state sources.

deleted text begin (d) deleted text end new text begin (g) new text end Funds shall be distributed to the sponsoring institutions indicating the amount
to be distributed to each of the sponsor's clinical medical education programs based on
the criteria in this subdivision and in accordance with the commissioner's approval letter.
Each clinical medical education program must distribute funds allocated under paragraph
(a) to the training sites as specified in the commissioner's approval letter. Sponsoring
institutions, which are accredited through an organization recognized by the Department
of Education or the Centers for Medicare and Medicaid Services, may contract directly
with training sites to provide clinical training. To ensure the quality of clinical training,
those accredited sponsoring institutions must:

(1) develop contracts specifying the terms, expectations, and outcomes of the clinical
training conducted at sites; and

(2) take necessary action if the contract requirements are not met. Action may
include the withholding of payments under this section or the removal of students from
the site.

deleted text begin (e) deleted text end new text begin (h) new text end Any funds not distributed in accordance with the commissioner's approval
letter must be returned to the medical education and research fund within 30 days of
receiving notice from the commissioner. The commissioner shall distribute returned funds
to the appropriate training sites in accordance with the commissioner's approval letter.

deleted text begin (f) deleted text end new text begin (i) new text end The commissioner shall distribute by June 30 of each year an amount equal to
the funds transferred under subdivision 10 deleted text begin , plus five percent interest deleted text end to the University of
Minnesota Board of Regents for the instructional costs of health professional programs
at the Academic Health Center and for interdisciplinary academic initiatives within the
Academic Health Center.

deleted text begin (g) deleted text end new text begin (j) new text end A maximum of $150,000 of the funds dedicated to the commissioner
under section 297F.10, subdivision 1, deleted text begin paragraph (b), deleted text end clause (2), may be used by the
commissioner for administrative expenses associated with implementing this section.

Sec. 13.

Minnesota Statutes 2006, section 62J.692, subdivision 7a, is amended to read:

Subd. 7a.

Clinical medical education innovations grants.

(a) The commissioner
shall award grants to teaching institutions and clinical training sites for projects that
increase dental access for underserved populations and promote innovative clinical
training of dental professionals.

new text begin (b) The commissioner shall award grants to teaching institutions and clinical training
sites for projects that increase mental health access for underserved populations, promote
innovative clinical training of mental health professionals, increase the number of mental
health providers in rural or underserved areas, and promote the incorporation of patient
safety principles into clinical medical education programs.
new text end

new text begin (c) new text end In awarding the grants, the commissioner, in consultation with the commissioner
of human services, shall consider the following:

(1) potential to successfully increase access to an underserved population;

(2) the long-term viability of the project to improve access beyond the period
of initial funding;

(3) evidence of collaboration between the applicant and local communities;

(4) the efficiency in the use of the funding; deleted text begin and
deleted text end

(5) the priority level of the project in relation to state clinical education, access,
new text begin patient safety, new text end and workforce goals deleted text begin . deleted text end new text begin ; and
new text end

new text begin (6) the potential of the project to impact the number or distribution of the health
care workforce.
new text end

deleted text begin (b) deleted text end new text begin (d) new text end The commissioner shall periodically evaluate the priorities in awarding the
innovations grants in order to ensure that the priorities meet the changing workforce
needs of the state.

Sec. 14.

Minnesota Statutes 2006, section 62J.692, subdivision 8, is amended to read:

Subd. 8.

Federal financial participation.

(a) The commissioner of human
services shall seek to maximize federal financial participation in payments for medical
education and research costs. deleted text begin If the commissioner of human services determines that
federal financial participation is available for the medical education and research, the
commissioner of health shall transfer to the commissioner of human services the amount
of state funds necessary to maximize the federal funds available. The amount transferred
to the commissioner of human services, plus the amount of federal financial participation,
shall be distributed to medical assistance providers in accordance with the distribution
methodology described in subdivision 4.
deleted text end

(b) For the purposes of paragraph (a), the commissioner shall use physician clinic
rates where possible to maximize federal financial participation.

Sec. 15.

Minnesota Statutes 2006, section 62J.692, subdivision 10, is amended to read:

Subd. 10.

Transfers from University of Minnesota.

Of the funds dedicated to the
Academic Health Center under section 297F.10, subdivision 1, clause (1), $4,850,000
shall be transferred annually to the commissioner of health no later than April 15 of each
year for distribution under subdivision 4, paragraph deleted text begin (f) deleted text end new text begin (i) new text end .

Sec. 16.

Minnesota Statutes 2006, section 62J.81, subdivision 1, is amended to read:

Subdivision 1.

Required disclosure of estimated payment.

(a) A health care
provider, as defined in section 62J.03, subdivision 8, or the provider's designee as agreed
to by that designee, shall, at the request of a consumer, provide that consumer with a good
faith estimate of the deleted text begin reimbursement deleted text end new text begin allowable payment new text end the provider deleted text begin expects to receive
from the health plan company in which the consumer is enrolled deleted text end new text begin has agreed to accept from
the consumer's health plan company for the services specified by the consumer, specifying
the amount of the allowable payment due from the health plan company new text end . Health plan
companies must allow contracted providers, or their designee, to release this information.
deleted text begin A good faith estimate must also be made available at the request of a consumer who
is not enrolled in a health plan company. deleted text end new text begin If a consumer has no applicable public or
private coverage, the health care provider must give the consumer a good faith estimate
of the average allowable reimbursement the provider accepts as payment from private
third-party payers for the services specified by the consumer and the estimated amount
the noncovered consumer will be required to pay. new text end Payment information provided by a
provider, or by the provider's designee as agreed to by that designee, to a patient pursuant
to this subdivision does not constitute a legally binding estimate of the new text begin allowable charge
for or new text end cost new text begin to the consumer new text end of services.

(b) A health plan company, as defined in section 62J.03, subdivision 10, shall, at
the request of an enrollee or the enrollee's designee, provide that enrollee with a good
faith estimate of the deleted text begin reimbursement deleted text end new text begin allowable amount new text end the health plan company deleted text begin would
expect to pay to deleted text end new text begin has contracted for with new text end a specified provider within the network new text begin as total
payment new text end for a health care service specified by the enrollee new text begin and the portion of the allowable
amount due from the enrollee and the enrollee's out-of-pocket costs new text end . deleted text begin If requested by the
enrollee, the health plan company shall also provide to the enrollee a good faith estimate
of the enrollee's out-of-pocket cost for the health care service. deleted text end An estimate provided to
an enrollee under this paragraph is not a legally binding estimate of the deleted text begin reimbursement deleted text end
new text begin allowable amount new text end or new text begin enrollee's new text end out-of-pocket cost.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2007.
new text end

Sec. 17.

Minnesota Statutes 2006, section 62J.82, is amended to read:

62J.82 HOSPITAL deleted text begin CHARGE deleted text end new text begin INFORMATION REPORTING new text end DISCLOSURE.

new text begin Subdivision 1. new text end

new text begin Required information. new text end

The Minnesota Hospital Association shall
develop a Web-based system, available to the public free of charge, for reporting deleted text begin charge
information deleted text end new text begin the following new text end , for Minnesota residents deleted text begin , deleted text end new text begin :
new text end

new text begin (1) hospital-specific performance on the measures of care developed under section
256B.072 for acute myocardial infarction, heart failure, and pneumonia;
new text end

new text begin (2) by January 1, 2009, hospital-specific performance on the public reporting
measures for hospital-acquired infections as published by the National Quality Forum
and collected by the Minnesota Hospital Association and Stratis Health in collaboration
with infection control practitioners; and
new text end

new text begin (3) charge information, new text end including, but not limited to, number of discharges, average
length of stay, average charge, average charge per day, and median charge, for each of the
50 most common inpatient diagnosis-related groups and the 25 most common outpatient
surgical procedures as specified by the Minnesota Hospital Association.

new text begin Subd. 2. new text end

new text begin Web site. new text end

The Web site must provide information that compares
hospital-specific data to hospital statewide data. The Web site must be deleted text begin established by
October 1, 2006, and must be deleted text end updated annually. new text begin The commissioner shall provide a link to
this reporting information on the department's Web site.
new text end

new text begin Subd. 3. new text end

new text begin Enforcement. new text end

new text begin The commissioner shall provide a link to this information
on the department's Web site. new text end If a hospital does not provide this information to the
Minnesota Hospital Association, the commissioner new text begin of health new text end may require the hospital to
do so new text begin in accordance with section 144.55, subdivision 6 new text end . deleted text begin The commissioner shall provide a
link to this information on the department's Web site.
deleted text end

Sec. 18.

new text begin [62J.84] HEALTH CARE TRANSFORMATION TASK FORCE.
new text end

new text begin Subdivision 1. new text end

new text begin Task force. new text end

new text begin The governor shall convene a health care transformation
task force to advise and assist the governor and the Minnesota legislature. The task force
shall consist of:
new text end

new text begin (1) four legislators from the house of representatives appointed by the speaker, two
from the majority party and two from the minority party, and four legislators from the
senate appointed by the Subcommittee on Committees of the Committee on Rules and
Administration, two from the majority party and two from the minority party;
new text end

new text begin (2) four representatives of the governor and state agencies appointed by the governor;
new text end

new text begin (3) at least four persons appointed by the governor who have demonstrated
leadership in health care organizations, health improvement initiatives, health care trade or
professional associations, or other collaborative health system improvement activities; and
new text end

new text begin (4) at least two persons appointed by the governor who have demonstrated leadership
in employer and group purchaser activities related to health system improvement, at least
one of which must be from a labor organization.
new text end

new text begin Subd. 2. new text end

new text begin Public input. new text end

new text begin The commissioner of health shall review available research,
and conduct statewide, regional, and local surveys, focus groups, and other activities as
needed to fill gaps in existing research, to determine Minnesotans' values, preferences,
opinions, and perceptions related to health care and to the issues confronting the task
force, and shall report the findings to the task force.
new text end

new text begin Subd. 3. new text end

new text begin Inventory and assessment of existing activities; action plan. new text end

new text begin The task
force shall complete an inventory and assessment of all public and private organized
activities, coalitions, and collaboratives working on tasks relating to health system
improvement including, but not limited to, patient safety, quality measurement and
reporting, evidence-based practice, adoption of health information technology, disease
management and chronic care coordination, medical homes, access to health care,
cultural competence, prevention and public health, consumer incentives, price and cost
transparency, nonprofit organization community benefits, education, research, and health
care workforce.
new text end

new text begin Subd. 4. new text end

new text begin Action plan. new text end

new text begin By December 15, 2007, the governor, with the advice
and assistance of the task force, shall develop and present to the legislature a statewide
action plan for transforming the health care system to improve affordability, quality,
and access. The plan shall include draft legislation needed to implement the plan. The
plan may consist of legislative actions, administrative actions of governmental entities,
collaborative actions, and actions of individuals and individual organizations. Among
other things, the action plan must include the following, with specific and measurable
goals and deadlines for each:
new text end

new text begin (1) proposed actions that will slow the rate of increase in health care costs to a rate
that does not exceed the increase in the Consumer Price Index for urban consumers for the
preceding calendar year plus two percentage points, and an additional percentage based on
the added costs necessary to implement legislation enacted in 2007;
new text end

new text begin (2) actions that will increase the affordable health coverage options for uninsured
and underinsured Minnesotans and other strategies that will ensure that all Minnesotans
will have health coverage by January 2011;
new text end

new text begin (3) actions to improve the quality and safety of health care and reduce racial and
ethnic disparities in access and quality;
new text end

new text begin (4) actions that will reduce the rate of preventable chronic illness through prevention
and public health and wellness initiatives;
new text end

new text begin (5) proposed changes to state health care purchasing and payment strategies used for
state health care programs and state employees that will promote higher quality, lower
cost health care through incentives that reward prevention and early intervention, use
of cost-effective primary care, effective care coordination, and management of chronic
disease;
new text end

new text begin (6) actions that will promote the appropriate and cost-effective investment in new
facilities, technologies, and drugs;
new text end

new text begin (7) actions to reduce administrative costs; and
new text end

new text begin (8) the results of the inventory completed under subdivision 3 and recommendations
for how these activities can be coordinated and improved.
new text end

new text begin Subd. 5. new text end

new text begin Options for small employers. new text end

new text begin The task force shall study and report back
to the legislature by December 15, 2007, on options for serving small employers and their
employees, and self-employed individuals.
new text end

Sec. 19.

Minnesota Statutes 2006, section 62L.12, subdivision 2, is amended to read:

Subd. 2.

Exceptions.

(a) A health carrier may sell, issue, or renew individual
conversion policies to eligible employees otherwise eligible for conversion coverage under
section 62D.104 as a result of leaving a health maintenance organization's service area.

(b) A health carrier may sell, issue, or renew individual conversion policies to
eligible employees otherwise eligible for conversion coverage as a result of the expiration
of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21,
62C.142, 62D.101, and 62D.105.

(c) A health carrier may sell, issue, or renew conversion policies under section
62E.16 to eligible employees.

(d) A health carrier may sell, issue, or renew individual continuation policies to
eligible employees as required.

(e) A health carrier may sell, issue, or renew individual health plans if the coverage
is appropriate due to an unexpired preexisting condition limitation or exclusion applicable
to the person under the employer's group health plan or due to the person's need for health
care services not covered under the employer's group health plan.

(f) A health carrier may sell, issue, or renew an individual health plan, if the
individual has elected to buy the individual health plan not as part of a general plan to
substitute individual health plans for a group health plan nor as a result of any violation of
subdivision 3 or 4.

(g) Nothing in this subdivision relieves a health carrier of any obligation to provide
continuation or conversion coverage otherwise required under federal or state law.

(h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage
issued as a supplement to Medicare under sections 62A.3099 to 62A.44, or policies or
contracts that supplement Medicare issued by health maintenance organizations, or those
contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social
Security Act, United States Code, title 42, section 1395 et seq., as amended.

(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
health plans necessary to comply with a court order.

(j) A health carrier may offer, issue, sell, or renew an individual health plan to
persons eligible for an employer group health plan, if the individual health plan is a high
deductible health plan for use in connection with an existing health savings account, in
compliance with the Internal Revenue Code, section 223. In that situation, the same or
a different health carrier may offer, issue, sell, or renew a group health plan to cover
the other eligible employees in the group.

(k) A health carrier may offer, sell, issue, or renew an individual health plan to one
or more employees of a small employer if the individual health plan is marketed deleted text begin directly deleted text end new text begin
through the Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 new text end to
all employees of the small employer and the small employer does not contribute directly
or indirectly to the premiums or facilitate the administration of the individual health
plan. The requirement to market an individual health plan to all employees new text begin through the
Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 new text end does not require
the health carrier to offer or issue an individual health plan to any employee. For purposes
of this paragraph, an employer is not contributing to the premiums or facilitating the
administration of the individual health plan if the employer does not contribute to the
premium and merely collects the premiums from an employee's wages or salary through
payroll deductions and submits payment for the premiums of one or more employees deleted text begin in a
lump sum to the health carrier deleted text end new text begin to the Minnesota Health Insurance Exchange under section
62A.67 or 62A.68 new text end . Except for coverage under section 62A.65, subdivision 5, paragraph
(b), or 62E.16, at the request of an employee, the deleted text begin health carrier deleted text end new text begin Minnesota Health Insurance
Exchange under section 62A.67 or 62A.68 new text end may bill the employer for the premiums
payable by the employee, provided that the employer is not liable for payment except
from payroll deductions for that purpose. If an employer is submitting payments under
this paragraph, the health carrier new text begin and the Minnesota Health Insurance Exchange under
section 62A.67 or 62A.68 new text end shall new text begin jointly new text end provide a cancellation notice directly to the primary
insured at least ten days prior to termination of coverage for nonpayment of premium.
Individual coverage under this paragraph may be offered only if the small employer has
not provided coverage under section 62L.03 to the employees within the past 12 months.

The employer must provide a written and signed statement to the deleted text begin health carrier deleted text end new text begin
Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 new text end that the employer
is not contributing directly or indirectly to the employee's premiums. new text begin The Minnesota
Health Insurance Exchange under section 62A.67 or 62A.68 shall provide all health
carriers with enrolled employees of the employer with a copy of the employer's statement.
new text end The health carrier may rely on the employer's statement new text begin provided by the Minnesota Health
Insurance Exchange under section 62A.67 or 62A.68 new text end and is not required to guarantee-issue
individual health plans to the employer's deleted text begin other current or future deleted text end employees.

Sec. 20.

Minnesota Statutes 2006, section 62L.12, subdivision 4, is amended to read:

Subd. 4.

Employer prohibition.

A small employer new text begin offering a health benefit plan
new text end shall not encourage or direct an employee or applicant to:

(1) refrain from filing an application for health coverage when other similarly
situated employees may file an application for health coverage;

(2) file an application for health coverage during initial eligibility for coverage,
the acceptance of which is contingent on health status, when other similarly situated
employees may apply for health coverage, the acceptance of which is not contingent on
health status;

(3) seek coverage from another health carrier, including, but not limited to, MCHA;
or

(4) cause coverage to be issued on different terms because of the health status or
claims experience of that person or the person's dependents.

Sec. 21.

new text begin [62Q.101] EVALUATION OF PROVIDER PERFORMANCE.
new text end

new text begin A health plan company, or a vendor of risk management services as defined under
section 60A.23, subdivision 8, shall, in evaluating the performance of a health care
provider:
new text end

new text begin (1) conduct the evaluation using a bona fide baseline based upon practice experience
of the provider group; and
new text end

new text begin (2) disclose the baseline to the health care provider in writing and prior to the
beginning of the time period used for the evaluation.
new text end

Sec. 22.

Minnesota Statutes 2006, section 62Q.165, subdivision 1, is amended to read:

Subdivision 1.

Definition.

It is the commitment of the state to achieve universal
health coverage for all Minnesotans new text begin by the year 2011 new text end . Universal coverage is achieved
when:

(1) every Minnesotan has access to a full range of quality health care services;

(2) every Minnesotan is able to obtain affordable health coverage which pays for the
full range of services, including preventive and primary care; and

(3) every Minnesotan pays into the health care system according to that person's
ability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 23.

Minnesota Statutes 2006, section 62Q.165, subdivision 2, is amended to read:

Subd. 2.

Goal.

It is the goal of the state to make continuous progress toward
reducing the number of Minnesotans who do not have health coverage so that by January
1, deleted text begin 2000, fewer than four percent of the state's population will be without health coverage deleted text end new text begin
2011, all Minnesota residents have access to affordable health care new text end . The goal will be
achieved by improving access to private health coverage through insurance reforms and
market reforms, by making health coverage more affordable for low-income Minnesotans
through purchasing pools and state subsidies, and by reducing the cost of health coverage
through cost containment programs and methods of ensuring that all Minnesotans are
paying into the system according to their ability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 24.

Minnesota Statutes 2006, section 62Q.80, subdivision 3, is amended to read:

Subd. 3.

Approval.

(a) Prior to the operation of a community-based health care
coverage program, a community-based health initiative shall submit to the commissioner
of health for approval the community-based health care coverage program developed by
the initiative. deleted text begin The commissioner shall only approve a program that has been awarded
a community access program grant from the United States Department of Health and
Human Services. deleted text end The commissioner shall ensure that the program meets the federal grant
requirements and any requirements described in this section and is actuarially sound based
on a review of appropriate records and methods utilized by the community-based health
initiative in establishing premium rates for the community-based health care coverage
program.

(b) Prior to approval, the commissioner shall also ensure that:

(1) the benefits offered comply with subdivision 8 and that there are adequate
numbers of health care providers participating in the community-based health network to
deliver the benefits offered under the program;

(2) the activities of the program are limited to activities that are exempt under this
section or otherwise from regulation by the commissioner of commerce;

(3) the complaint resolution process meets the requirements of subdivision 10; and

(4) the data privacy policies and procedures comply with state and federal law.

Sec. 25.

Minnesota Statutes 2006, section 62Q.80, subdivision 4, is amended to read:

Subd. 4.

Establishment.

deleted text begin (a) deleted text end The initiative shall establish and operate upon approval
by the commissioner of health a community-based health care coverage program. The
operational structure established by the initiative shall include, but is not limited to:

(1) establishing a process for enrolling eligible individuals and their dependents;

(2) collecting and coordinating premiums from enrollees and employers of enrollees;

(3) providing payment to participating providers;

(4) establishing a benefit set according to subdivision 8 and establishing premium
rates and cost-sharing requirements;

(5) creating incentives to encourage primary care and wellness services; and

(6) initiating disease management services, as appropriate.

deleted text begin (b) The payments collected under paragraph (a), clause (2), may be used to capture
available federal funds.
deleted text end

Sec. 26.

Minnesota Statutes 2006, section 62Q.80, subdivision 13, is amended to read:

Subd. 13.

Report.

(a) The initiative shall submit quarterly status reports to the
commissioner of health on January 15, April 15, July 15, and October 15 of each year,
with the first report due January 15, deleted text begin 2007 deleted text end new text begin 2008 new text end . The status report shall include:

(1) the financial status of the program, including the premium rates, cost per member
per month, claims paid out, premiums received, and administrative expenses;

(2) a description of the health care benefits offered and the services utilized;

(3) the number of employers participating, the number of employees and dependents
covered under the program, and the number of health care providers participating;

(4) a description of the health outcomes to be achieved by the program and a status
report on the performance measurements to be used and collected; and

(5) any other information requested by the commissioner of health or commerce or
the legislature.

(b) The initiative shall contract with an independent entity to conduct an evaluation
of the program to be submitted to the commissioners of health and commerce and the
legislature by January 15, deleted text begin 2009 deleted text end new text begin 2010 new text end . The evaluation shall include:

(1) an analysis of the health outcomes established by the initiative and the
performance measurements to determine whether the outcomes are being achieved;

(2) an analysis of the financial status of the program, including the claims to
premiums loss ratio and utilization and cost experience;

(3) the demographics of the enrollees, including their age, gender, family income,
and the number of dependents;

(4) the number of employers and employees who have been denied access to the
program and the basis for the denial;

(5) specific analysis on enrollees who have aggregate medical claims totaling over
$5,000 per year, including data on the enrollee's main diagnosis and whether all the
medical claims were covered by the program;

(6) number of enrollees referred to state public assistance programs;

(7) a comparison of employer-subsidized health coverage provided in a comparable
geographic area to the designated community-based geographic area served by the
program, including, to the extent available:

(i) the difference in the number of employers with 50 or fewer employees offering
employer-subsidized health coverage;

(ii) the difference in uncompensated care being provided in each area; and

(iii) a comparison of health care outcomes and measurements established by the
initiative; and

(8) any other information requested by the commissioner of health or commerce.

Sec. 27.

Minnesota Statutes 2006, section 62Q.80, subdivision 14, is amended to read:

Subd. 14.

Sunset.

This section expires December 31, deleted text begin 2011 deleted text end new text begin 2012 new text end .

Sec. 28.

Minnesota Statutes 2006, section 144.698, subdivision 1, is amended to read:

Subdivision 1.

Yearly reports.

new text begin (a) new text end Each hospital and each outpatient surgical center,
which has not filed the financial information required by this section with a voluntary,
nonprofit reporting organization pursuant to section 144.702, shall file annually with the
commissioner of health after the close of the fiscal year:

(1) a balance sheet detailing the assets, liabilities, and net worth of the hospital or
outpatient surgical center;

(2) a detailed statement of income and expenses;

(3) a copy of its most recent cost report, if any, filed pursuant to requirements of
Title XVIII of the United States Social Security Act;

(4) a copy of all changes to articles of incorporation or bylaws;

(5) information on services provided to benefit the community, including services
provided at no cost or for a reduced fee to patients unable to pay, teaching and research
activities, or other community or charitable activities;

(6) information required on the revenue and expense report form set in effect on
July 1, 1989, or as amended by the commissioner in rule;

(7) information on changes in ownership or control; deleted text begin and
deleted text end

(8) other information required by the commissioner in rule deleted text begin . deleted text end new text begin ;
new text end

new text begin (9) information on the number of available hospital beds that are dedicated to certain
specialized services, as designated by the commissioner, and annual occupancy rates for
those beds, separately for adult and pediatric care;
new text end

new text begin (10) from outpatient surgical centers, the total number of surgeries; and
new text end

new text begin (11) a report on health care capital expenditures during the previous year, as required
by section 62J.17.
new text end

new text begin (b) Beginning with hospital fiscal year 2009, each nonprofit hospital shall report on
community benefits under paragraph (a), clause (5). "Community benefit" means the costs
of community care, underpayment for services provided under state health care programs,
research costs, community health services costs, financial and in-kind contributions, costs
of community building activities, costs of community benefit operations, education, and
the cost of operating subsidized services. The cost of bad debts and underpayment for
Medicare services are not included in the calculation of community benefit.
new text end

Sec. 29.

Minnesota Statutes 2006, section 144.699, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Annual reports on community benefit, community care amounts,
and state program underfunding. new text end

new text begin (a) For each hospital reporting health care cost
information under section 144.698 or 144.702, the commissioner shall report annually
on the hospital's community benefit, community care, and underpayment for state public
health care programs.
new text end

new text begin (b) For purposes of this subdivision, "community benefits" has the definition given
in section 144.698, paragraph (b).
new text end

new text begin (c) For purposes of this subdivision, "community care" means the costs for medical
care for which a hospital has determined is charity care, as defined under Minnesota Rules,
part 4650.0115, or for which the hospital determines after billing for the services that there
is a demonstrated inability to pay. Any costs forgiven under a hospital's community care
plan or under section 62J.83 may be counted in the hospital's calculation of community
care. Bad debt expenses and discounted charges available to the uninsured shall not be
included in the calculation of community care. The amount of community care is the value
of costs incurred and not the charges made for services.
new text end

new text begin (d) For purposes of this subdivision, underpayment for services provided by state
public health care programs is the difference between hospital costs and public program
payments. The information shall be reported in terms of total dollars and as a percentage
of total operating costs for each hospital.
new text end

Sec. 30.

new text begin [145.985] HEALTH PROMOTION AND WELLNESS.
new text end

new text begin Community health boards as defined in section 145A.02, subdivision 5, may work
with schools, health care providers, and others to coordinate health and wellness programs
in their communities. In order to meet the requirements of this section, community
health boards may:
new text end

new text begin (1) provide instruction, technical assistance, and recommendations on how to
evaluate project outcomes;
new text end

new text begin (2) assist with on-site health and wellness programs utilizing volunteers and others
addressing health and wellness topics including smoking, nutrition, obesity, and others; and
new text end

new text begin (3) encourage health and wellness programs consistent with the Centers for Disease
Control and Prevention's Community Guide and goals consistent with the Centers for
Disease Control and Prevention's Healthy People 2010 initiative.
new text end

Sec. 31.

Minnesota Statutes 2006, section 256.01, subdivision 2b, is amended to read:

Subd. 2b.

Performance payments.

new text begin (a) new text end The commissioner shall develop and
implement a pay-for-performance system to provide performance payments to new text begin :
new text end

new text begin (1) eligible new text end medical groups new text begin and clinics new text end that demonstrate optimum care in serving
individuals with chronic diseases who are enrolled in health care programs administered
by the commissioner under chapters 256B, 256D, and 256L deleted text begin . deleted text end new text begin ;
new text end

new text begin (2) medical groups that implement effective medical home models of patient care
that improve quality and reduce costs through effective primary and preventive care, care
coordination, and management of chronic conditions; and
new text end

new text begin (3) eligible medical groups and clinics that evaluate medical provider usage patterns
and provide feedback to individual medical providers on that provider's practice patterns
relative to peer medical providers.
new text end

new text begin (b) The commissioner shall also develop and implement a patient incentive health
program to provide incentives and rewards to patients who are enrolled in health care
programs administered by the commissioner under chapters 256B, 256D, and 256L, and
who have agreed to and meet personal health goals established with their primary care
provider to manage a chronic disease or condition including, but not limited to, diabetes,
high blood pressure, and coronary artery disease.
new text end

new text begin (c) The commissioner may receive any federal matching money that is made
available through the medical assistance program for managed care oversight contracted
through vendors including consumer surveys, studies, and external quality reviews as
required by the Federal Balanced Budget Act of 1997, Code of Federal Regulations,
title 42, part 438, subpart E. Any federal money received for managed care oversight is
appropriated to the commissioner for this purpose. The commissioner may expend the
federal money received in either year of the biennium.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 32.

Minnesota Statutes 2006, section 256B.0625, is amended by adding a
subdivision to read:

new text begin Subd. 49. new text end

new text begin Provider-directed care coordination services. new text end

new text begin The commissioner
shall develop and implement a provider-directed care coordination program for medical
assistance recipients who are not enrolled in the prepaid medical assistance program and
who are receiving services on a fee-for-service basis. This program provides payment
to primary care clinics for care coordination for people who have complex and chronic
medical conditions. Clinics must meet certain criteria such as the capacity to develop care
plans; have a dedicated care coordinator; and have an adequate number of fee-for-service
clients, evaluation mechanisms, and quality improvement processes to qualify for
reimbursement. For purposes of this subdivision, a primary care clinic is a medical clinic
designated as the patient's first point of contact for medical care, available 24 hours a
day, seven days a week, that provides or arranges for the patient's comprehensive health
care needs, and provides overall integration, coordination, and continuity over time and
referrals for specialty care.
new text end

Sec. 33. new text begin HEALTH CARE PAYMENT SYSTEM REFORM.
new text end

new text begin Subdivision 1. new text end

new text begin Payment reform plan. new text end

new text begin The commissioners of employee relations,
human services, commerce, and health shall develop a plan for promoting and facilitating
changes in payment rates and methods for paying for health care services, drugs, devices,
supplies, and equipment in order to:
new text end

new text begin (1) reward the provision of cost-effective primary and preventive care;
new text end

new text begin (2) reward the use of evidence-based care;
new text end

new text begin (3) discourage underutilization, overuse, and misuse;
new text end

new text begin (4) reward the use of the most cost-effective settings, drugs, devices, providers,
and treatments; and
new text end

new text begin (5) encourage consumers to maintain good health and use the health care system
appropriately.
new text end

new text begin In developing the plan, the commissioners shall analyze existing data to determine
specific services and health conditions for which changes in payment rates and methods
would lead to significant improvements in quality of care. The commissioners shall
include a definition of the term "quality" for uniform understanding of the plan's impact.
new text end

new text begin Subd. 2. new text end

new text begin Report. new text end

new text begin The commissioners shall submit a report to the legislature by
December 15, 2007, describing the payment reform plan. The report must include
proposed legislation for implementing those components of the plan requiring legislative
action or appropriations of money.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 34. new text begin COMMUNITY COLLABORATIVE PILOT PROJECTS TO COVER
THE UNINSURED.
new text end

new text begin Subdivision 1. new text end

new text begin Community collaboratives. new text end

new text begin The commissioner of human services
shall provide grants to and authorization for up to three community collaboratives that
satisfy the requirements in this section. To be eligible to receive a grant and authorization
under this section, a community collaborative must include:
new text end

new text begin (1) one or more counties;
new text end

new text begin (2) one or more local hospitals;
new text end

new text begin (3) one or more local employers who collectively provide at least 300 jobs in the
community;
new text end

new text begin (4) one or more health care clinics or physician groups; and
new text end

new text begin (5) a third-party payer, which may be a county-based purchasing plan operating
under Minnesota Statutes, section 256B.692, a self-insured employer, or a health plan
company as defined in Minnesota Statutes, section 62Q.01, subdivision 4.
new text end

new text begin Subd. 2. new text end

new text begin Pilot project requirements. new text end

new text begin (a) Community collaborative pilot projects
must:
new text end

new text begin (1) identify and enroll persons in the community who are uninsured, and who have,
or are at risk of developing, one of the following chronic conditions: mental illness,
diabetes, asthma, hypertension, or other chronic condition designated by the project;
new text end

new text begin (2) assist uninsured persons to obtain private-sector health insurance coverage if
possible or to enroll in any public health care programs for which they are eligible. If the
uninsured individual is unable to obtain health coverage, the community collaborative
must enroll the individual in a local health care assistance program that provides specified
services to prevent or effectively manage the chronic condition;
new text end

new text begin (3) include components to help uninsured persons retain employment or to become
employable, if currently unemployed;
new text end

new text begin (4) ensure that each uninsured person enrolled in the program has a medical home
responsible for providing, or arranging for, health care services and assisting in the
effective management of the chronic condition;
new text end

new text begin (5) coordinate services between all providers and agencies serving an enrolled
individual; and
new text end

new text begin (6) be coordinated with the state's Q-Care initiative and improve the use of
evidence-based treatments and effective disease management programs in the broader
community, beyond those individuals enrolled in the project.
new text end

new text begin (b) Projects established under this section are not insurance and are not subject to
state-mandated benefit requirements or insurance regulations.
new text end

new text begin Subd. 3. new text end

new text begin Criteria. new text end

new text begin Proposals must be evaluated by actuarial, financial, and clinical
experts based on the likelihood that the project would produce a positive return on
investment for the community. In awarding grants, the commissioner of human services
shall give preference to proposals that:
new text end

new text begin (1) have broad community support from local businesses, provider counties, and
other public and private organizations;
new text end

new text begin (2) would provide services to uninsured persons who have, or are at risk of
developing, multiple, co-occurring chronic conditions;
new text end

new text begin (3) integrate or coordinate resources from multiple sources, such as employer
contributions, county funds, social service programs, and provider financial or in-kind
support;
new text end

new text begin (4) provide continuity of treatment and services when uninsured individuals in
the program become eligible for public or private health insurance or when insured
individuals lose their coverage;
new text end

new text begin (5) demonstrate how administrative costs for health plan companies and providers
can be reduced through greater simplification, coordination, consolidation, standardization,
reducing billing errors, or other methods; and
new text end

new text begin (6) involve local contributions to the cost of the pilot projects.
new text end

new text begin Subd. 4. new text end

new text begin Grants. new text end

new text begin The commissioner of human services shall provide
implementation grants of up to one-half of the community collaborative's costs for
planning, administration, and evaluation. The commissioner shall also provide grants to
community collaboratives to develop a fund to pay up to 50 percent of the cost of the
services provided to uninsured individuals. The remaining costs must be paid for through
other sources or by agreement of a health care provider to contribute the cost as charity
care.
new text end

new text begin Subd. 5. new text end

new text begin Evaluation. new text end

new text begin The commissioner of human services shall evaluate the
effectiveness of each community collaborative project awarded a grant, by comparing
actual costs for serving the identified uninsured persons to the predicted costs that would
have been incurred in the absence of early intervention and consistent treatment to manage
the chronic condition, including the costs to medical assistance, MinnesotaCare, and
general assistance medical care. The commissioner shall require community collaborative
projects, as a condition of receipt of a grant award, to provide the commissioner with all
information necessary for this evaluation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 35. new text begin HEALTH CARE PAYMENT REFORM PILOT PROJECTS.
new text end

new text begin Subdivision 1. new text end

new text begin Pilot projects. new text end

new text begin (a) The commissioners of health, human services,
and employee relations shall develop and administer payment reform pilot projects for
state employees and persons enrolled in medical assistance, MinnesotaCare, or general
assistance medical care, to the extent permitted by federal requirements. The purpose of
the projects is to promote and facilitate changes in payment rates and methods for paying
for health care services, drugs, devices, supplies, and equipment in order to:
new text end

new text begin (1) reward the provision of cost-effective primary and preventive care;
new text end

new text begin (2) reward the use of evidence-based care;
new text end

new text begin (3) reward coordination of care for patients with chronic conditions;
new text end

new text begin (4) discourage overuse and misuse;
new text end

new text begin (5) reward the use of the most cost-effective settings, drugs, devices, providers,
and treatments; and
new text end

new text begin (6) encourage consumers to maintain good health and use the health care system
appropriately.
new text end

new text begin (b) The pilot projects must involve the use of designated care professionals or
clinics to serve as a patient's medical home and be responsible for coordinating health
care services across the continuum of care. The pilot projects must evaluate different
payment reform models and must be coordinated with the Minnesota senior health options
program and the Minnesota disability health options program. To the extent possible, the
commissioners shall coordinate state purchasing activities with other public employers
and with private purchasers, self-insured groups, and health plan companies to promote
the use of pilot projects encompassing both public and private purchasers and markets.
new text end

new text begin Subd. 2. new text end

new text begin Payment methods and incentives. new text end

new text begin The commissioners shall modify
existing payment methods and rates for those enrollees and health care providers
participating in the pilot project in order to provide incentives for care management,
team-based care, and practice redesign, and increase resources for primary care, chronic
condition care, and care provided to complex patients. The commissioners may create
financial incentives for patients to select a medical home under the pilot project by
reducing, modifying, or eliminating deductibles and co-payments for certain services, or
through other incentives. The commissioners may require patients to remain with their
designated medical home for a specified period of time. Alternative payment methods
may include complete or partial capitation, fee-for-service payments, or other payment
methodologies. The payment methods may provide for the payment of bonuses to medical
home providers or other providers, or to patients, for the achievement of performance
goals. The payment methods may include allocating a portion of the payment that
would otherwise be paid to health plans under state prepaid health care programs to the
designated medical home for specified services.
new text end

new text begin Subd. 3. new text end

new text begin Requirements. new text end

new text begin In order to be designated a medical home under the pilot
project, health care professionals or clinics must demonstrate their ability to:
new text end

new text begin (1) be the patient's first point of contact by telephone or other means, 24 hours a
day, seven days a week;
new text end

new text begin (2) provide or arrange for patients' comprehensive health care needs, including the
ability to structure planned chronic disease visits and to manage chronic disease through
the use of disease registries;
new text end

new text begin (3) coordinate patients' care when care must be provided outside the medical home;
new text end

new text begin (4) provide longitudinal care, not just episodic care, including meeting long-term
and unique personal needs;
new text end

new text begin (5) utilize an electronic health record and incorporate a plan to develop and make
available to patients that choose a medical home an electronic personal health record that
is prepopulated with the patient's data, consumer-directed, connected to the provider,
24-hour accessible, and owned and controlled by the patient;
new text end

new text begin (6) systematically improve quality of care using, among other inputs, patient
feedback; and
new text end

new text begin (7) create a provider network that provides for increased reimbursement for a
medical home in a cost-neutral manner.
new text end

new text begin Subd. 4. new text end

new text begin Evaluation. new text end

new text begin Pilot projects must be evaluated based on patient satisfaction,
provider satisfaction, clinical process and outcome measures, program costs and savings,
and economic impact on health care providers. Pilot projects must be evaluated based
on the extent to which the medical home:
new text end

new text begin (1) coordinated health care services across the continuum of care and thereby
reduced duplication of services and enhanced communication across providers;
new text end

new text begin (2) provided safe and high-quality care by increasing utilization of effective
treatments, reduced use of ineffective treatments, reduced barriers to essential care and
services, and eliminated barriers to access;
new text end

new text begin (3) reduced unnecessary hospitalizations and emergency room visits and increased
use of cost-effective care and settings;
new text end

new text begin (4) encouraged long-term patient and provider relationships by shifting from
episodic care to consistent, coordinated communication and care with a specified team of
providers or individual providers;
new text end

new text begin (5) engaged and educated consumers by encouraging shared patient and provider
responsibility and accountability for disease prevention, health promotion, chronic
disease management, acute care, and overall well-being, encouraging informed medical
decision-making, ensuring the availability of accurate medical information, and facilitated
the transfer of accurate medical information;
new text end

new text begin (6) encouraged innovation in payment methodologies by using patient and provider
incentives to coordinate care and utilize medical home services and fostering the
expansion of a technology infrastructure that supports collaboration; and
new text end

new text begin (7) reduced overall health care costs as compared to conventional payment methods
for similar patient populations.
new text end

new text begin Subd. 5. new text end

new text begin Rulemaking. new text end

new text begin The commissioners are exempt from administrative
rulemaking under Minnesota Statutes, chapter 14, for purposes of developing,
administering, contracting for, and evaluating pilot projects under this section. The
commissioner shall publish a proposed request for proposals in the State Register and
allow 30 days for comment before issuing the final request for proposals.
new text end

new text begin Subd. 6. new text end

new text begin Regulatory and payment barriers. new text end

new text begin The commissioners shall study state
and federal statutory and regulatory barriers to the creation of medical homes and provide
a report and recommendations to the legislature by December 15, 2007.
new text end

Sec. 36. new text begin HEALTH CARE SYSTEM CONSOLIDATION.
new text end

new text begin (a) The commissioner of health shall study the effect of health care provider and
health plan company consolidation in the four metropolitan statistical areas in Minnesota
on: health care costs, including provider payment rates; quality of care; and access
to care. The commissioner shall separately consider hospitals, specialty groups, and
primary care groups. The commissioner shall include a definition of the terms "quality
of care" and "access to care" to provide uniform understanding of the study's findings.
The commissioner shall present findings and recommendations to the legislature by
December 15, 2007.
new text end

new text begin (b) For purposes of this study, health carriers, provider networks, and other health
care providers shall provide data on network participation, contracted payment rates,
charges, costs, payments received, patient referrals, and other information requested by
the commissioner, in the form and manner specified by the commissioner. Provider-level
information on contracted payment rates and payments from health plans provided to the
commissioner of health for the purposes of this study are (1) private data on individuals as
defined in Minnesota Statutes, section 13.02, subdivision 12, and (2) nonpublic data as
defined in Minnesota Statutes, section 13.02, subdivision 9. The commissioner may not
collect patient-identified data for purposes of this study. Data collected for purposes of
this study may not be used for any other purposes.
new text end

Sec. 37. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, section 62J.052, subdivision 1, new text end new text begin is repealed effective
August 1, 2007.
new text end