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HF 2127

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
  1.1                          A bill for an act 
  1.2             relating to health; modifying requirements for 
  1.3             outpatient surgical centers; requiring licensure of 
  1.4             diagnostic imaging facilities; modifying procedures 
  1.5             for the Board of Medical Practice; requiring rule 
  1.6             amendments; amending Minnesota Statutes 2002, sections 
  1.7             144.55, subdivisions 1, 2, 3, 5, 6, 7; 144.651, 
  1.8             subdivision 2; 144.653, subdivision 4; 144.696, by 
  1.9             adding a subdivision; 144.698, subdivisions 1, 2, 3, 
  1.10            5; 144.699, subdivisions 1, 2; 144.701, subdivisions 
  1.11            1, 2, 3; 144.702, subdivisions 1, 2, 3; 147.091, 
  1.12            subdivision 1; 256B.0644; Minnesota Statutes 2003 
  1.13            Supplement, section 144.7063, subdivision 3; proposing 
  1.14            coding for new law in Minnesota Statutes, chapter 144. 
  1.16     Section 1.  Minnesota Statutes 2002, section 144.55, 
  1.17  subdivision 1, is amended to read: 
  1.18     Subdivision 1.  [ISSUANCE.] The state commissioner of 
  1.19  health is hereby authorized to issue licenses to operate 
  1.20  hospitals, sanitariums, outpatient surgical centers, diagnostic 
  1.21  imaging facilities, or other institutions for the 
  1.22  hospitalization or care of human beings, which are found to 
  1.23  comply with the provisions of sections 144.50 to 144.56 and any 
  1.24  reasonable rules promulgated by the commissioner, or Minnesota 
  1.25  Rules, chapters 4650 and 4675.  All decisions of the 
  1.26  commissioner thereunder may be reviewed in the district court in 
  1.27  the county in which the institution is located or contemplated. 
  1.28     Sec. 2.  Minnesota Statutes 2002, section 144.55, 
  1.29  subdivision 2, is amended to read: 
  1.30     Subd. 2.  [DEFINITION DEFINITIONS.] (a) For the purposes of 
  2.1   this section, the following terms have the meanings given. 
  2.2      (b) "Diagnostic imaging facility" means a health care 
  2.3   facility that provides diagnostic imaging services through the 
  2.4   use of ionizing radiation or other imaging techniques including, 
  2.5   but not limited to, magnetic resonance imaging (MRI) or 
  2.6   computerized tomography (CT) scan, and for which revenues from 
  2.7   these diagnostic services account for more than 50 percent of 
  2.8   the facility's total revenue. 
  2.9      (c) "Joint commission" means the Joint Commission on 
  2.10  Accreditation of Hospitals.  
  2.11     (d) "Outpatient surgical center" or "center," means a 
  2.12  freestanding facility organized for the specific purpose of 
  2.13  providing elective outpatient surgery for preexamined, 
  2.14  prediagnosed, low-risk patients.  Admissions are limited to 
  2.15  procedures that utilize general anesthesia or conscious sedation 
  2.16  and that do not require overnight inpatient care.  An outpatient 
  2.17  surgical center is not organized to provide regular emergency 
  2.18  medical services and does not include a physician's or dentist's 
  2.19  office or clinic for the practice of medicine or the delivery of 
  2.20  primary care.  
  2.21     Sec. 3.  Minnesota Statutes 2002, section 144.55, 
  2.22  subdivision 3, is amended to read: 
  2.23     Subd. 3.  [STANDARDS FOR LICENSURE.] (a) Notwithstanding 
  2.24  the provisions of section 144.56, for the purpose of hospital 
  2.25  licensure, the commissioner of health shall use as minimum 
  2.26  standards the hospital certification regulations promulgated 
  2.27  pursuant to Title XVIII of the Social Security Act, United 
  2.28  States Code, title 42, section 1395, et seq.  The commissioner 
  2.29  may use as minimum standards changes in the federal hospital 
  2.30  certification regulations promulgated after May 7, 1981, if the 
  2.31  commissioner finds that such changes are reasonably necessary to 
  2.32  protect public health and safety.  The commissioner shall also 
  2.33  promulgate in rules additional minimum standards for new 
  2.34  construction.  
  2.35     (b) Each hospital and outpatient surgical center shall 
  2.36  establish policies and procedures to prevent the transmission of 
  3.1   human immunodeficiency virus and hepatitis B virus to patients 
  3.2   and within the health care setting.  The policies and procedures 
  3.3   shall be developed in conformance with the most recent 
  3.4   recommendations issued by the United States Department of Health 
  3.5   and Human Services, Public Health Service, Centers for Disease 
  3.6   Control.  The commissioner of health shall evaluate a hospital's 
  3.7   compliance with the policies and procedures according to 
  3.8   subdivision 4. 
  3.9      Sec. 4.  Minnesota Statutes 2002, section 144.55, 
  3.10  subdivision 5, is amended to read: 
  3.11     Subd. 5.  [COORDINATION OF INSPECTIONS.] Prior to 
  3.12  conducting routine inspections of hospitals, outpatient surgical 
  3.13  centers, and diagnostic imaging facilities, a state agency shall 
  3.14  notify the commissioner of its intention to inspect.  The 
  3.15  commissioner shall then determine whether the inspection is 
  3.16  necessary in light of any previous inspections conducted by the 
  3.17  commissioner, any other state agency, or the joint commission.  
  3.18  The commissioner shall notify the agency of the determination 
  3.19  and may authorize the agency to conduct the inspection.  No 
  3.20  state agency may routinely inspect any hospital, outpatient 
  3.21  surgical center, or diagnostic imaging facility without the 
  3.22  authorization of the commissioner.  The commissioner shall 
  3.23  coordinate, insofar as is possible, routine inspections 
  3.24  conducted by state agencies, so as to minimize the number of 
  3.25  inspections to which hospitals, outpatient surgical centers, and 
  3.26  diagnostic imaging facilities are subject.  
  3.27     Sec. 5.  Minnesota Statutes 2002, section 144.55, 
  3.28  subdivision 6, is amended to read: 
  3.30  The commissioner may refuse to grant or renew, or may suspend or 
  3.31  revoke, a license on any of the following grounds: 
  3.32     (1) Violation of any of the provisions of sections 144.50 
  3.33  to 144.56 or the rules or standards issued pursuant thereto, or 
  3.34  Minnesota Rules, chapters 4650 and 4675; 
  3.35     (2) Permitting, aiding, or abetting the commission of any 
  3.36  illegal act in the institution; 
  4.1      (3) Conduct or practices detrimental to the welfare of the 
  4.2   patient; or 
  4.3      (4) Obtaining or attempting to obtain a license by fraud or 
  4.4   misrepresentation. 
  4.5      (b) The commissioner shall not renew a license for a 
  4.6   boarding care bed in a resident room with more than four beds. 
  4.7      Sec. 6.  Minnesota Statutes 2002, section 144.55, 
  4.8   subdivision 7, is amended to read: 
  4.9      Subd. 7.  [HEARING.] Prior to any suspension, revocation or 
  4.10  refusal to renew a license, the licensee shall be entitled to 
  4.11  notice and a hearing as provided by sections 14.57 to 14.69.  At 
  4.12  each hearing, the commissioner shall have the burden of 
  4.13  establishing that a violation described in subdivision 6 has 
  4.14  occurred.  
  4.15     If a license is revoked, suspended, or not renewed, a new 
  4.16  application for license may be considered by the commissioner if 
  4.17  the conditions upon which revocation, suspension, or refusal to 
  4.18  renew was based have been corrected and evidence of this fact 
  4.19  has been satisfactorily furnished.  A new license may then be 
  4.20  granted after proper inspection has been made and all provisions 
  4.21  of sections 144.50 to 144.56 and any rules promulgated 
  4.22  thereunder, or Minnesota Rules, chapters 4650 and 4675, have 
  4.23  been complied with and recommendation has been made by the 
  4.24  inspector as an agent of the commissioner.  
  4.25     Sec. 7.  [144.565] [OUTPATIENT SURGICAL CENTER AND 
  4.28  APPLICATION.] The commissioner may approve an application for 
  4.29  initial licensure of an outpatient surgical center or diagnostic 
  4.30  imaging facility only if the commissioner, as part of a 
  4.31  prelicensure review, has determined that issuing a license would 
  4.32  be in the public interest.  For purposes of this section, 
  4.33  outpatient surgical center and diagnostic imaging facility have 
  4.34  the meanings given in section 144.55, subdivision 2. 
  4.35     Subd. 2.  [REVIEW PROCESS.] (a) In conducting the review, 
  4.36  the commissioner shall consider: 
  5.1      (1) whether the center or facility is needed to provide 
  5.2   geographic access to care or access to new or improved services; 
  5.3      (2) the effect the center or facility will have on the 
  5.4   standard of medical care and health care costs in the local 
  5.5   community; 
  5.6      (3) the financial impact of the center or facility on 
  5.7   existing acute care and emergency facilities; 
  5.8      (4) employment opportunities and other economic benefits 
  5.9   provided by the center or facility; and 
  5.10     (5) the extent to which the center or facility will provide 
  5.11  services to nonpaying or low-income patients, relative to the 
  5.12  level of services provided to these groups by existing health 
  5.13  care providers in the community. 
  5.14     (b) An entity seeking prelicensure review shall request a 
  5.15  review in writing from the commissioner, and shall submit to the 
  5.16  commissioner the information necessary to conduct the review, 
  5.17  using an application form developed by the commissioner.  The 
  5.18  commissioner shall provide the entity seeking review, and other 
  5.19  interested parties, with an opportunity to provide additional 
  5.20  information related to making a determination of public 
  5.21  interest.  The entity submitting an application must pay an 
  5.22  application fee.  The commissioner shall set the application fee 
  5.23  at a level sufficient to cover the commissioner's actual costs 
  5.24  of conducting the review. 
  5.25     Subd. 3.  [DETERMINATION BY THE COMMISSIONER.] (a) Within 
  5.26  60 days of receiving a complete application for review, the 
  5.27  commissioner shall: 
  5.28     (1) issue a determination that licensure would be in the 
  5.29  public interest; 
  5.30     (2) issue a determination that licensure would not be in 
  5.31  the public interest; or 
  5.32     (3) return the application to the entity with comments and 
  5.33  recommended modifications and provide the entity with an 
  5.34  opportunity for resubmittal. 
  5.35     (b) If the commissioner determines that issuing a license 
  5.36  would be in the public interest, the applicant may apply for a 
  6.1   license according to the procedures established in sections 
  6.2   144.51 to 144.53 and Minnesota Rules, chapter 4675.  The 
  6.3   commissioner shall deny licensure applications for projects 
  6.4   reviewed and found not to be in the public interest. 
  6.5      Sec. 8.  Minnesota Statutes 2002, section 144.651, 
  6.6   subdivision 2, is amended to read: 
  6.7      Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
  6.8   "patient" means a person who is admitted to an acute care 
  6.9   inpatient facility for a continuous period longer than 24 hours, 
  6.10  for the purpose of diagnosis or treatment bearing on the 
  6.11  physical or mental health of that person.  "Patient" also means 
  6.12  a person who receives health care services at an outpatient 
  6.13  surgical center or a diagnostic imaging facility licensed under 
  6.14  section 144.55.  "Patient" also means a minor who is admitted to 
  6.15  a residential program as defined in section 253C.01.  For 
  6.16  purposes of subdivisions 1, 3 to 16, 18, 20 and 30, "patient" 
  6.17  also means any person who is receiving mental health treatment 
  6.18  on an outpatient basis or in a community support program or 
  6.19  other community-based program.  "Resident" means a person who is 
  6.20  admitted to a nonacute care facility including extended care 
  6.21  facilities, nursing homes, and boarding care homes for care 
  6.22  required because of prolonged mental or physical illness or 
  6.23  disability, recovery from injury or disease, or advancing age.  
  6.24  For purposes of all subdivisions except subdivisions 28 and 29, 
  6.25  "resident" also means a person who is admitted to a facility 
  6.26  licensed as a board and lodging facility under Minnesota Rules, 
  6.27  parts 4625.0100 to 4625.2355, or a supervised living facility 
  6.28  under Minnesota Rules, parts 4665.0100 to 4665.9900, and which 
  6.29  operates a rehabilitation program licensed under Minnesota 
  6.30  Rules, parts 9530.4100 to 9530.4450. 
  6.31     Sec. 9.  [144.6521] [DISCLOSURE OF FINANCIAL INTEREST.] 
  6.32     Subdivision 1.  [PROVISION OF WRITTEN NOTICE.] (a) No 
  6.33  health care provider with a financial or economic interest, that 
  6.34  does not include employment, in an outpatient surgical center or 
  6.35  diagnostic imaging facility licensed under section 144.55 shall 
  6.36  refer a patient to that center or facility unless the health 
  7.1   care provider provides written notice to the patient, in advance 
  7.2   of the referral, of the existence of such an interest and 
  7.3   obtains the signature of the patient or the patient's 
  7.4   representative on a written disclosure form.  The written 
  7.5   disclosure form must be printed in letters of at least 12-point 
  7.6   boldface type and must read as follows: 
  7.7      "Your health care provider is referring you to a facility 
  7.8   or service in which there exists a direct financial or economic 
  7.9   interest." 
  7.10     (b) The signed disclosure form shall be maintained in the 
  7.11  files of the health care provider for at least three years. 
  7.12     Subd. 2.  [POSTING OF NOTICE.] In addition to the written 
  7.13  disclosure, each health care provider who makes referrals to an 
  7.14  outpatient surgical center or diagnostic imaging facility in 
  7.15  which the provider has a financial or economic interest, that 
  7.16  does not include employment, shall post a notice of this 
  7.17  interest in a patient reception area or waiting room or other 
  7.18  conspicuous public location within the provider's facility. 
  7.19     Subd. 3.  [DEFINITION.] For purposes of this section, 
  7.20  "financial interest" means:  
  7.21     (1) an equity or debt security issued by an entity, 
  7.22  including, but not limited to, shares of stock in a corporation, 
  7.23  membership in a limited liability company, beneficial interest 
  7.24  in a trust, units or other interests in a partnership, bonds, 
  7.25  debentures, notes or other equity interests or debt instruments, 
  7.26  or any contractual arrangements; 
  7.27     (2) any membership, proprietary interest, or co-ownership 
  7.28  with an individual, group, or organization to which patients, 
  7.29  clients, or customers are referred to; or 
  7.30     (3) any employer-employee or independent contractor 
  7.31  relationship, including, but not limited to, those that may 
  7.32  occur in a limited partnership, profit-sharing arrangement, or 
  7.33  other similar arrangement with any facility to which patients 
  7.34  are referred, including any compensation between a facility and 
  7.35  a health care provider, the group practice of which the provider 
  7.36  is a member or employee or a related party with respect to any 
  8.1   of them. 
  8.2      Sec. 10.  Minnesota Statutes 2002, section 144.653, 
  8.3   subdivision 4, is amended to read: 
  8.4      Subd. 4.  [WITHOUT NOTICE.] One or more unannounced 
  8.5   inspections of each facility required to be licensed under the 
  8.6   provisions of sections 144.50 to 144.58 or Minnesota Rules, 
  8.7   chapter 4675, shall be made annually, except that diagnostic 
  8.8   imaging facilities shall be inspected once every two years. 
  8.9      Sec. 11.  Minnesota Statutes 2002, section 144.696, is 
  8.10  amended by adding a subdivision to read: 
  8.11     Subd. 2a.  [DIAGNOSTIC IMAGING FACILITY.] "Diagnostic 
  8.12  imaging facility" means a health care facility that provides 
  8.13  diagnostic imaging services through the use of ionizing 
  8.14  radiation or other imaging techniques including, but not limited 
  8.15  to, magnetic resonance imaging (MRI) or computerized tomography 
  8.16  (CT) scan, and for which revenues from these diagnostic services 
  8.17  account for more than 50 percent of the facility's total revenue.
  8.18     Sec. 12.  Minnesota Statutes 2002, section 144.698, 
  8.19  subdivision 1, is amended to read: 
  8.20     Subdivision 1.  [YEARLY REPORTS.] Each hospital and each, 
  8.21  outpatient surgical center, or diagnostic imaging facility, 
  8.22  which has not filed the financial information required by this 
  8.23  section with a voluntary, nonprofit reporting organization 
  8.24  pursuant to section 144.702, shall file annually with the 
  8.25  commissioner of health after the close of the fiscal year: 
  8.26     (1) a balance sheet detailing the assets, liabilities, and 
  8.27  net worth of the hospital, outpatient surgical center, or 
  8.28  diagnostic imaging facility; 
  8.29     (2) a detailed statement of income and expenses; 
  8.30     (3) a copy of its most recent cost report, if any, filed 
  8.31  pursuant to requirements of Title XVIII of the United States 
  8.32  Social Security Act; 
  8.33     (4) a copy of all changes to articles of incorporation or 
  8.34  bylaws; 
  8.35     (5) information on services provided to benefit the 
  8.36  community, including services provided at no cost or for a 
  9.1   reduced fee to patients unable to pay, teaching and research 
  9.2   activities, or other community or charitable activities; 
  9.3      (6) information required on the revenue and expense report 
  9.4   form set in effect on July 1, 1989, or as amended by the 
  9.5   commissioner in rule; and 
  9.6      (7) information on changes in ownership or control; and 
  9.7      (8) other information required by the commissioner in rule. 
  9.8      Sec. 13.  Minnesota Statutes 2002, section 144.698, 
  9.9   subdivision 2, is amended to read: 
  9.10     Subd. 2.  [SEPARATE REPORTS FOR FACILITIES.] If more than 
  9.11  one licensed hospital or, outpatient surgical center, or 
  9.12  diagnostic imaging facility is operated by the reporting 
  9.13  organization, the commissioner of health may require that the 
  9.14  information be reported separately for each hospital and each 
  9.15  outpatient surgical center. 
  9.16     Sec. 14.  Minnesota Statutes 2002, section 144.698, 
  9.17  subdivision 3, is amended to read: 
  9.18     Subd. 3.  [ATTESTATION.] The commissioner of health may 
  9.19  require attestation by responsible officials of the hospital or, 
  9.20  outpatient surgical center, or diagnostic imaging facility that 
  9.21  the contents of the reports are true. 
  9.22     Sec. 15.  Minnesota Statutes 2002, section 144.698, 
  9.23  subdivision 5, is amended to read: 
  9.25  commissioner of health shall have the right to inspect 
  9.26  hospital and, outpatient surgical center, and diagnostic imaging 
  9.27  facility books, audits, and records as reasonably necessary to 
  9.28  verify hospital and, outpatient surgical center, and diagnostic 
  9.29  imaging facility reports. 
  9.30     Sec. 16.  Minnesota Statutes 2002, section 144.699, 
  9.31  subdivision 1, is amended to read: 
  9.32     Subdivision 1.  [ACUTE CARE COSTS.] The commissioner of 
  9.33  health may: 
  9.34     (a) Undertake analyses and studies relating to acute care 
  9.35  costs and to the financial status of any hospital or, outpatient 
  9.36  surgical center, or diagnostic imaging facility subject to the 
 10.1   provisions of sections 144.695 to 144.703; and 
 10.2      (b) Publish and disseminate the information relating to 
 10.3   acute care costs. 
 10.4      Sec. 17.  Minnesota Statutes 2002, section 144.699, 
 10.5   subdivision 2, is amended to read: 
 10.6      Subd. 2.  [FOSTERING PRICE COMPETITION.] The commissioner 
 10.7   of health shall:  
 10.8      (a) Encourage hospitals, outpatient surgical 
 10.9   centers, diagnostic imaging facilities, home care providers, and 
 10.10  professionals regulated by the health related licensing boards 
 10.11  as defined in section 214.01, subdivision 2, and by the 
 10.12  commissioner of health under section 214.13, to publish prices 
 10.13  for procedures and services that are representative of the 
 10.14  diagnoses and conditions for which citizens of this state seek 
 10.15  treatment.  
 10.16     (b) Analyze and disseminate available price information and 
 10.17  analyses so as to foster the development of price competition 
 10.18  among hospitals, outpatient surgical centers, diagnostic imaging 
 10.19  facilities, home care providers, and health professionals.  
 10.20     Sec. 18.  Minnesota Statutes 2002, section 144.701, 
 10.21  subdivision 1, is amended to read: 
 10.22     Subdivision 1.  [CONSUMER INFORMATION.] The commissioner of 
 10.23  health shall ensure that the total costs, total revenues, 
 10.24  overall utilization, and total services of each hospital and 
 10.25  each, outpatient surgical center, and diagnostic imaging 
 10.26  facility are reported to the public in a form understandable to 
 10.27  consumers.  
 10.28     Sec. 19.  Minnesota Statutes 2002, section 144.701, 
 10.29  subdivision 2, is amended to read: 
 10.30     Subd. 2.  [DATA FOR POLICY MAKING.] The commissioner of 
 10.31  health shall compile relevant financial and accounting, 
 10.32  utilization, and services data concerning hospitals and, 
 10.33  outpatient surgical centers, and diagnostic imaging facilities 
 10.34  in order to have statistical information available for 
 10.35  legislative policy making. 
 10.36     Sec. 20.  Minnesota Statutes 2002, section 144.701, 
 11.1   subdivision 3, is amended to read: 
 11.2      Subd. 3.  [RATE SCHEDULE.] The commissioner of health shall 
 11.3   obtain from each hospital and, outpatient surgical center, and 
 11.4   diagnostic imaging facility a current rate schedule.  Any 
 11.5   subsequent amendments or modifications of that schedule shall be 
 11.6   filed with the commissioner of health on or before their 
 11.7   effective date.  
 11.8      Sec. 21.  Minnesota Statutes 2002, section 144.702, 
 11.9   subdivision 1, is amended to read: 
 11.10     Subdivision 1.  [REPORTING THROUGH A REPORTING 
 11.11  ORGANIZATION.] A hospital or, outpatient surgical center, or 
 11.12  diagnostic imaging facility may agree to submit its financial, 
 11.13  utilization, and services reports to a voluntary, nonprofit 
 11.14  reporting organization whose reporting procedures have been 
 11.15  approved by the commissioner of health in accordance with this 
 11.16  section.  Each report submitted to the voluntary, nonprofit 
 11.17  reporting organization under this section shall be accompanied 
 11.18  by a filing fee. 
 11.19     Sec. 22.  Minnesota Statutes 2002, section 144.702, 
 11.20  subdivision 2, is amended to read: 
 11.22  PROCEDURES.] The commissioner of health may approve voluntary 
 11.23  reporting procedures consistent with written operating 
 11.24  requirements for the voluntary, nonprofit reporting organization 
 11.25  which shall be established annually by the commissioner.  These 
 11.26  written operating requirements shall specify reports, analyses, 
 11.27  and other deliverables to be produced by the voluntary, 
 11.28  nonprofit reporting organization, and the dates on which those 
 11.29  deliverables must be submitted to the commissioner.  These 
 11.30  written operating requirements shall specify deliverable dates 
 11.31  sufficient to enable the commissioner of health to process and 
 11.32  report health care cost information system data to the 
 11.33  commissioner of human services by August 15 of each year.  The 
 11.34  commissioner of health shall, by rule, prescribe standards for 
 11.35  submission of data by hospitals and, outpatient surgical centers 
 11.36  , and diagnostic imaging facilities to the voluntary, nonprofit 
 12.1   reporting organization or to the commissioner.  These standards 
 12.2   shall provide for: 
 12.3      (a) the filing of appropriate financial, utilization, and 
 12.4   services information with the reporting organization; 
 12.5      (b) adequate analysis and verification of that financial, 
 12.6   utilization, and services information; and 
 12.7      (c) timely publication of the costs, revenues, and rates of 
 12.8   individual hospitals and, outpatient surgical centers, and 
 12.9   diagnostic imaging facilities prior to the effective date of any 
 12.10  proposed rate increase.  The commissioner of health shall 
 12.11  annually review the procedures approved pursuant to this 
 12.12  subdivision. 
 12.13     Sec. 23.  Minnesota Statutes 2002, section 144.702, 
 12.14  subdivision 3, is amended to read: 
 12.16  FILING.] Any voluntary, nonprofit reporting organization which 
 12.17  collects information on costs, revenues, and rates of a hospital 
 12.18  or, outpatient surgical center, or diagnostic imaging facility 
 12.19  located in this state shall file a copy of the information 
 12.20  received for each hospital and, outpatient surgical center, and 
 12.21  diagnostic imaging facility with the commissioner of health 
 12.22  within 30 days of completion of the information collection 
 12.23  process, together with a summary of the financial information 
 12.24  acquired by the organization during the course of its review. 
 12.25     Sec. 24.  Minnesota Statutes 2003 Supplement, section 
 12.26  144.7063, subdivision 3, is amended to read: 
 12.27     Subd. 3.  [FACILITY.] "Facility" means a hospital licensed 
 12.28  under sections 144.50 to 144.58 or an outpatient surgical center 
 12.29  or diagnostic imaging facility licensed under section 144.55. 
 12.30     Sec. 25.  Minnesota Statutes 2002, section 147.091, 
 12.31  subdivision 1, is amended to read: 
 12.32     Subdivision 1.  [GROUNDS LISTED.] The board may refuse to 
 12.33  grant a license, may refuse to grant registration to perform 
 12.34  interstate telemedicine services, or may impose disciplinary 
 12.35  action as described in section 147.141 against any physician.  
 12.36  The following conduct is prohibited and is grounds for 
 13.1   disciplinary action: 
 13.2      (a) Failure to demonstrate the qualifications or satisfy 
 13.3   the requirements for a license contained in this chapter or 
 13.4   rules of the board.  The burden of proof shall be upon the 
 13.5   applicant to demonstrate such qualifications or satisfaction of 
 13.6   such requirements. 
 13.7      (b) Obtaining a license by fraud or cheating, or attempting 
 13.8   to subvert the licensing examination process.  Conduct which 
 13.9   subverts or attempts to subvert the licensing examination 
 13.10  process includes, but is not limited to:  (1) conduct which 
 13.11  violates the security of the examination materials, such as 
 13.12  removing examination materials from the examination room or 
 13.13  having unauthorized possession of any portion of a future, 
 13.14  current, or previously administered licensing examination; (2) 
 13.15  conduct which violates the standard of test administration, such 
 13.16  as communicating with another examinee during administration of 
 13.17  the examination, copying another examinee's answers, permitting 
 13.18  another examinee to copy one's answers, or possessing 
 13.19  unauthorized materials; or (3) impersonating an examinee or 
 13.20  permitting an impersonator to take the examination on one's own 
 13.21  behalf. 
 13.22     (c) Conviction, during the previous five years, of a felony 
 13.23  reasonably related to the practice of medicine or osteopathy.  
 13.24  Conviction as used in this subdivision shall include a 
 13.25  conviction of an offense which if committed in this state would 
 13.26  be deemed a felony without regard to its designation elsewhere, 
 13.27  or a criminal proceeding where a finding or verdict of guilt is 
 13.28  made or returned but the adjudication of guilt is either 
 13.29  withheld or not entered thereon.  
 13.30     (d) Revocation, suspension, restriction, limitation, or 
 13.31  other disciplinary action against the person's medical license 
 13.32  in another state or jurisdiction, failure to report to the board 
 13.33  that charges regarding the person's license have been brought in 
 13.34  another state or jurisdiction, or having been refused a license 
 13.35  by any other state or jurisdiction.  
 13.36     (e) Advertising which is false or misleading, which 
 14.1   violates any rule of the board, or which claims without 
 14.2   substantiation the positive cure of any disease, or professional 
 14.3   superiority to or greater skill than that possessed by another 
 14.4   physician. 
 14.5      (f) Violating a rule promulgated by the board or an order 
 14.6   of the board, a state, or federal law which relates to the 
 14.7   practice of medicine, or in part regulates the practice of 
 14.8   medicine including without limitation sections 148A.02, 609.344, 
 14.9   and 609.345, or a state or federal narcotics or controlled 
 14.10  substance law. 
 14.11     (g) Engaging in any unethical conduct; conduct likely to 
 14.12  deceive, defraud, or harm the public, or demonstrating a willful 
 14.13  or careless disregard for the health, welfare or safety of a 
 14.14  patient; or medical practice which is professionally 
 14.15  incompetent, in that it may create unnecessary danger to any 
 14.16  patient's life, health, or safety, in any of which cases, proof 
 14.17  of actual injury need not be established. 
 14.18     (h) Failure to supervise a physician's assistant or failure 
 14.19  to supervise a physician under any agreement with the board. 
 14.20     (i) Aiding or abetting an unlicensed person in the practice 
 14.21  of medicine, except that it is not a violation of this paragraph 
 14.22  for a physician to employ, supervise, or delegate functions to a 
 14.23  qualified person who may or may not be required to obtain a 
 14.24  license or registration to provide health services if that 
 14.25  person is practicing within the scope of that person's license 
 14.26  or registration or delegated authority. 
 14.27     (j) Adjudication as mentally incompetent, mentally ill or 
 14.28  mentally retarded, or as a chemically dependent person, a person 
 14.29  dangerous to the public, a sexually dangerous person, or a 
 14.30  person who has a sexual psychopathic personality by a court of 
 14.31  competent jurisdiction, within or without this state.  Such 
 14.32  adjudication shall automatically suspend a license for the 
 14.33  duration thereof unless the board orders otherwise. 
 14.34     (k) Engaging in unprofessional conduct.  Unprofessional 
 14.35  conduct shall include any departure from or the failure to 
 14.36  conform to the minimal standards of acceptable and prevailing 
 15.1   medical practice in which proceeding actual injury to a patient 
 15.2   need not be established. 
 15.3      (l) Inability to practice medicine with reasonable skill 
 15.4   and safety to patients by reason of illness, drunkenness, use of 
 15.5   drugs, narcotics, chemicals or any other type of material or as 
 15.6   a result of any mental or physical condition, including 
 15.7   deterioration through the aging process or loss of motor skills. 
 15.8      (m) Revealing a privileged communication from or relating 
 15.9   to a patient except when otherwise required or permitted by law. 
 15.10     (n) Failure by a doctor of osteopathy to identify the 
 15.11  school of healing in the professional use of the doctor's name 
 15.12  by one of the following terms:  osteopathic physician and 
 15.13  surgeon, doctor of osteopathy, or D.O. 
 15.14     (o) Improper management of medical records, including 
 15.15  failure to maintain adequate medical records, to comply with a 
 15.16  patient's request made pursuant to section 144.335 or to furnish 
 15.17  a medical record or report required by law.  
 15.18     (p) Fee splitting, including without limitation: 
 15.19     (1) paying, offering to pay, receiving, or agreeing to 
 15.20  receive, a commission, rebate, or remuneration, directly or 
 15.21  indirectly, primarily for the referral of patients or the 
 15.22  prescription of drugs or devices; 
 15.23     (2) dividing fees with another physician or a professional 
 15.24  corporation, unless the division is in proportion to the 
 15.25  services provided and the responsibility assumed by each 
 15.26  professional and the physician has disclosed the terms of the 
 15.27  division; 
 15.28     (3) referring a patient to any health care provider as 
 15.29  defined in section 144.335 in which the referring physician has 
 15.30  a significant financial interest unless the physician has 
 15.31  disclosed the physician's own financial interest; and 
 15.32     (4) dispensing for profit any drug or device, unless the 
 15.33  physician has disclosed the physician's own profit interest. 
 15.34  The physician must make the disclosures required in this clause 
 15.35  in advance and in writing to the patient and must include in the 
 15.36  disclosure a statement that the patient is free to choose a 
 16.1   different health care provider.  This clause does not apply to 
 16.2   the distribution of revenues from a partnership, group practice, 
 16.3   nonprofit corporation, or professional corporation to its 
 16.4   partners, shareholders, members, or employees if the revenues 
 16.5   consist only of fees for services performed by the physician or 
 16.6   under a physician's direct supervision, or to the division or 
 16.7   distribution of prepaid or capitated health care premiums, or 
 16.8   fee-for-service withhold amounts paid under contracts 
 16.9   established under other state law.  
 16.10     (q) Engaging in abusive or fraudulent billing practices, 
 16.11  including violations of the federal Medicare and Medicaid laws 
 16.12  or state medical assistance laws.  
 16.13     (r) Becoming addicted or habituated to a drug or intoxicant.
 16.14     (s) Prescribing a drug or device for other than medically 
 16.15  accepted therapeutic or experimental or investigative purposes 
 16.16  authorized by a state or federal agency or referring a patient 
 16.17  to any health care provider as defined in section 144.335 for 
 16.18  services or tests not medically indicated at the time of 
 16.19  referral.  
 16.20     (t) Engaging in conduct with a patient which is sexual or 
 16.21  may reasonably be interpreted by the patient as sexual, or in 
 16.22  any verbal behavior which is seductive or sexually demeaning to 
 16.23  a patient.  
 16.24     (u) Failure to make reports as required by section 147.111 
 16.25  or to cooperate with an investigation of the board as required 
 16.26  by section 147.131. 
 16.27     (v) Knowingly providing false or misleading information 
 16.28  that is directly related to the care of that patient unless done 
 16.29  for an accepted therapeutic purpose such as the administration 
 16.30  of a placebo. 
 16.31     (w) Aiding suicide or aiding attempted suicide in violation 
 16.32  of section 609.215 as established by any of the following: 
 16.33     (1) a copy of the record of criminal conviction or plea of 
 16.34  guilty for a felony in violation of section 609.215, subdivision 
 16.35  1 or 2; 
 16.36     (2) a copy of the record of a judgment of contempt of court 
 17.1   for violating an injunction issued under section 609.215, 
 17.2   subdivision 4; 
 17.3      (3) a copy of the record of a judgment assessing damages 
 17.4   under section 609.215, subdivision 5; or 
 17.5      (4) a finding by the board that the person violated section 
 17.6   609.215, subdivision 1 or 2.  The board shall investigate any 
 17.7   complaint of a violation of section 609.215, subdivision 1 or 2. 
 17.8      (x) Practice of a board-regulated profession under lapsed 
 17.9   or nonrenewed credentials. 
 17.10     (y) Failure to repay a state or federally secured student 
 17.11  loan in accordance with the provisions of the loan. 
 17.12     (z) Providing interstate telemedicine services other than 
 17.13  according to section 147.032. 
 17.14     (aa) Failure to provide notice of financial or economic 
 17.15  interests in an outpatient surgical center or diagnostic imaging 
 17.16  facility as required by section 144.6521. 
 17.17     Sec. 26.  Minnesota Statutes 2002, section 256B.0644, is 
 17.18  amended to read: 
 17.21     A vendor of medical care, as defined in section 256B.02, 
 17.22  subdivision 7, and a health maintenance organization, as defined 
 17.23  in chapter 62D, and an outpatient surgical center or diagnostic 
 17.24  imaging facility licensed under section 144.55, must participate 
 17.25  as a provider or contractor in the medical assistance program, 
 17.26  general assistance medical care program, and MinnesotaCare as a 
 17.27  condition of participating as a provider in health insurance 
 17.28  plans and programs or contractor for state employees established 
 17.29  under section 43A.18, the public employees insurance program 
 17.30  under section 43A.316, for health insurance plans offered to 
 17.31  local statutory or home rule charter city, county, and school 
 17.32  district employees, the workers' compensation system under 
 17.33  section 176.135, and insurance plans provided through the 
 17.34  Minnesota Comprehensive Health Association under sections 62E.01 
 17.35  to 62E.19.  The limitations on insurance plans offered to local 
 17.36  government employees shall not be applicable in geographic areas 
 18.1   where provider participation is limited by managed care 
 18.2   contracts with the Department of Human Services.  For providers 
 18.3   other than health maintenance organizations, participation in 
 18.4   the medical assistance program means that (1) the provider 
 18.5   accepts new medical assistance, general assistance medical care, 
 18.6   and MinnesotaCare patients or (2) for providers other than 
 18.7   dental service providers, at least 20 percent of the provider's 
 18.8   patients are covered by medical assistance, general assistance 
 18.9   medical care, and MinnesotaCare as their primary source of 
 18.10  coverage, or (3) for dental service providers, at least ten 
 18.11  percent of the provider's patients are covered by medical 
 18.12  assistance, general assistance medical care, and MinnesotaCare 
 18.13  as their primary source of coverage.  Patients seen on a 
 18.14  volunteer basis by the provider at a location other than the 
 18.15  provider's usual place of practice may be considered in meeting 
 18.16  this participation requirement.  The commissioner shall 
 18.17  establish participation requirements for health maintenance 
 18.18  organizations.  The commissioner shall provide lists of 
 18.19  participating medical assistance providers on a quarterly basis 
 18.20  to the commissioner of employee relations, the commissioner of 
 18.21  labor and industry, and the commissioner of commerce.  Each of 
 18.22  the commissioners shall develop and implement procedures to 
 18.23  exclude as participating providers in the program or programs 
 18.24  under their jurisdiction those providers who do not participate 
 18.25  in the medical assistance program.  The commissioner of employee 
 18.26  relations shall implement this section through contracts with 
 18.27  participating health and dental carriers. 
 18.30     (a) The commissioner of health shall amend Minnesota Rules, 
 18.31  part 4675.0300, subpart 4, so that compliance with Minnesota 
 18.32  Rules, parts 4650.0113 to 4650.0150, and Minnesota Statutes, 
 18.33  sections 144.695 to 144.703, is required for issuance of a 
 18.34  license to an outpatient surgical center or for renewal of a 
 18.35  license. 
 18.36     (b) The commissioner of health shall amend Minnesota Rules, 
 19.1   chapter 4675, so that compliance with Minnesota Rules, parts 
 19.2   4650.0113 to 4650.0150, 4675.0100 to 4675.0400, and 4675.0600, 
 19.3   and Minnesota Statutes, sections 144.695 to 144.703, is required 
 19.4   for issuance of a license to a diagnostic imaging center or for 
 19.5   renewal of a license. 
 19.6      (c) The commissioner of health shall amend Minnesota Rules, 
 19.7   chapter 4650, to require diagnostic imaging facilities as 
 19.8   defined in Minnesota Statutes, section 144.55, subdivision 2, to 
 19.9   comply with Minnesota Rules, parts 4650.0113 to 4650.0150. 
 19.10     (d) The commissioner of health shall amend the definition 
 19.11  of outpatient surgical center in Minnesota Rules, part 
 19.12  4675.0100, subpart 8, to be consistent with the definition 
 19.13  provided in Minnesota Statutes, section 144.55, subdivision 2. 
 19.14     (e) The commissioner of health shall adopt rule amendments 
 19.15  required by this section using the authority of Minnesota 
 19.16  Statutes, section 14.388, subdivision 1, clause (3), and 
 19.17  Minnesota Statutes, section 14.386, does not apply except as 
 19.18  provided under Minnesota Statutes, section 14.388. 
 19.19     Sec. 28.  [EFFECTIVE DATES.] 
 19.20     (a) Sections 1 to 6 and 8 to 26 are effective August 1, 
 19.21  2004, and apply to outpatient surgical centers and diagnostic 
 19.22  imaging facilities that submit applications for initial 
 19.23  licensure on or after that date. 
 19.24     (b) Section 7 is effective the day following final 
 19.25  enactment and applies to applications for initial licensure 
 19.26  submitted on or after that date. 
 19.27     (c) The authority for the commissioner of health to adopt 
 19.28  rules under section 27 is effective the day following final 
 19.29  enactment, except that rules adopted shall take effect August 1, 
 19.30  2004, and shall apply to outpatient surgical centers and 
 19.31  diagnostic imaging facilities that submit applications for 
 19.32  initial licensure on or after that date.