HF 3073

as introduced - 88th Legislature (2013 - 2014) Posted on 03/13/2014 02:54pm

A bill for an act
relating to insurance; modifying certain regulations to reduce the incidence
of insurance fraud; providing an administrative penalty for insurance fraud;
creating a process for deauthorization of the right of health care providers to
receive certain payments under chapter 65B; limiting reimbursement for certain
prescription drugs; regulating batch billing; modifying certain economic benefits
under chapter 65B; establishing a task force on motor vehicle insurance coverage
verification; amending Minnesota Statutes 2012, sections 13.7191, subdivision
16; 60A.952, subdivision 3; 65B.44, subdivisions 2, 3, 4, 6, by adding a
subdivision; 72A.502, subdivision 2; 169.09, subdivision 13; Minnesota Statutes
2013 Supplement, section 45.0135, by adding a subdivision; proposing coding
for new law in Minnesota Statutes, chapter 45; repealing Minnesota Statutes
2012, section 72A.327.

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

Section 1.

Minnesota Statutes 2012, section 13.7191, subdivision 16, is amended to read:

Subd. 16.

Regulation of trade practices new text begin ; insurance contract data new text end .

deleted text begin (a) Insurance
contract data. deleted text end Certain insurance contract data held by the commissioner of commerce are
classified under section 72A.20, subdivision 15.

deleted text begin (b) Health claims appeals. Documents that are part of an appeal from denial of
health care coverage for experimental treatment are classified under section 72A.327.
deleted text end

Sec. 2.

Minnesota Statutes 2013 Supplement, section 45.0135, is amended by adding a
subdivision to read:

new text begin Subd. 9. new text end

new text begin Administrative penalty for insurance fraud. new text end

new text begin (a) In addition to any
criminal penalties that may be imposed under section 609.611, on a showing by a
preponderance of the evidence that a violation of section 609.611 has occurred, the
commissioner may:
new text end

new text begin (1) impose an administrative penalty not exceeding $25,000 for each act of insurance
fraud; and
new text end

new text begin (2) order restitution to an insurer or self-insured employer of any insurance proceeds
paid relating to a fraudulent insurance claim.
new text end

new text begin (b) In determining the amount of the administrative penalty, the commissioner
must consider:
new text end

new text begin (1) the nature, circumstances, extent, gravity, and number of violations;
new text end

new text begin (2) the degree of culpability of the violator;
new text end

new text begin (3) prior offenses and repeated violations of the violator; and
new text end

new text begin (4) any other matter that the commissioner considers appropriate and relevant.
new text end

new text begin (c) If an administrative penalty is not paid after all rights of appeal have been
waived or exhausted, the commissioner may bring a civil action in a court of competent
jurisdiction to collect the administrative penalty, including expenses and litigation costs,
reasonable attorney fees, and interest.
new text end

new text begin (d) This section does not affect an insurer's right to take any independent action to
seek recovery against a person that violates this section.
new text end

Sec. 3.

new text begin [45.0137] DEAUTHORIZATION OF PROVIDERS FROM RECEIVING
CERTAIN PAYMENTS UNDER CHAPTER 65B.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) As used in this section, the following terms have
the meaning given.
new text end

new text begin (b) "Appropriate licensing authority" means the state agency responsible for
licensing and discipline of a provider.
new text end

new text begin (c) "Commissioner" means the commissioner of commerce.
new text end

new text begin (d) "Medical services" means those services eligible for reimbursement under
section 65B.44, subdivision 2.
new text end

new text begin (e) "Provider of medical services" or "provider" means a person or entity that has
provided medical services.
new text end

new text begin Subd. 2. new text end

new text begin Deauthorization of providers. new text end

new text begin The commissioner, or an appropriate
licensing authority, may, by order, remove authorization for a provider of medical services
to demand or request payment for medical services upon finding, after investigation as
provided in subdivision 3, that the provider:
new text end

new text begin (1) has been guilty of professional or other misconduct or incompetency in
connection with medical services rendered;
new text end

new text begin (2) has exceeded the limits of professional competence in providing medical services
or has knowingly made a false statement or representation as to a material fact in any
report made in connection with any claim under chapter 65B;
new text end

new text begin (3) solicited, or has employed another to solicit for the provider or for another,
professional treatment, examination, or care of an injured person in connection with any
claim under chapter 65B;
new text end

new text begin (4) has refused to appear before, or to answer upon request of, the commissioner
or duly authorized officer of an appropriate licensing authority, any legal question, or
to produce any relevant information concerning conduct in connection with providing
medical services; or
new text end

new text begin (5) has engaged in patterns of billing for medical services that were not provided.
new text end

new text begin Subd. 3. new text end

new text begin Investigation. new text end

new text begin (a) The commissioner may investigate any reports made
under section 45.0135, or other information in the commissioner's possession, regarding
providers of medical services engaging in any of the unlawful activities set forth in
subdivision 2. After conducting an investigation, the commissioner must send to the
appropriate licensing authority a list of any providers who the commissioner believes may
have engaged in any of the unlawful activities set forth in subdivision 2 together with a
description of the grounds for inclusion on the list. Within 45 days of receipt of the list,
the appropriate licensing authority shall notify the commissioner in writing whether the
licensing authority confirms that the commissioner has a reasonable basis to proceed
with notice and a hearing for determining whether any of the listed providers should be
deauthorized from demanding or requesting any payment for medical services.
new text end

new text begin (b) An appropriate licensing authority may also investigate any reports, allegations,
or other information in its possession regarding providers engaging in any of the unlawful
activities set forth in subdivision 2. If the appropriate licensing authority conducts an
investigation, then that authority is responsible for providing notice and an opportunity to
be heard to the providers that are subject to deauthorization from demanding or requesting
any payment for medical services.
new text end

new text begin (c) Hearings under this section must be conducted in accordance with chapter 14 and
any other applicable law.
new text end

Sec. 4.

Minnesota Statutes 2012, section 60A.952, subdivision 3, is amended to read:

Subd. 3.

Immunity from liability.

If insurers, new text begin insurance support organizations
as defined in section 72A.491, subdivision 12, new text end agents acting on the insurers' behalf, or
authorized persons release information in good faith under this section, whether orally
or in writing, they are immune from any liability, civil or criminal, for the release or
reporting of the information.

Sec. 5.

Minnesota Statutes 2012, section 65B.44, subdivision 2, is amended to read:

Subd. 2.

Medical expense benefits.

(a) Medical expense benefits shall reimburse
all reasonable expenses for necessary:

(1) medical, surgical, x-ray, optical, dental, chiropractic, and rehabilitative services,
including prosthetic devices;

(2) prescription drugs new text begin , provided that:
new text end

new text begin (i) prescription drugs filled and dispensed outside of a licensed pharmacy shall be
billed at the average wholesale price (AWP), or its equivalent, for that drug on that date
as published in Medispan or Redbook as identified by its National Drug Code, plus a
dispensing fee of $4.18;
new text end

new text begin (ii) if a prescription drug has been repackaged, the average wholesale price used
to determine the maximum reimbursement shall be the average wholesale price for
the underlying drug product, as identified by its National Drug Code from the original
labeler; and
new text end

new text begin (iii) compound drugs shall be billed by listing each drug and its National Drug Code
number included in the compound and calculating the charge for each drug separately.
Reimbursement shall be based on the sum of the fee for each ingredient for which
there is an assigned National Drug Code number plus a single dispensing fee of $4.18.
Compound drugs shall not be dispensed without first obtaining preauthorization from the
reparation obligor new text end ;

(3) ambulance and all other transportation expenses incurred in traveling to receive
other covered medical expense benefits;

(4) sign interpreting and language translation services, other than such services
provided by a family member of the patient, related to the receipt of medical, surgical,
x-ray, optical, dental, chiropractic, hospital, extended care, nursing, and rehabilitative
services; and

(5) hospital, extended care, and nursing services.

(b) Hospital room and board benefits may be limited, except for intensive care
facilities, to the regular daily semiprivate room rates customarily charged by the institution
in which the recipient of benefits is confined.

(c) Such benefits shall also include necessary remedial treatment and services
recognized and permitted under the laws of this state for an injured person who relies
upon spiritual means through prayer alone for healing in accordance with that person's
religious beliefs.

(d) Medical expense loss includes medical expenses accrued prior to the death of a
person notwithstanding the fact that benefits are paid or payable to the decedent's survivors.

(e) Medical expense benefits for rehabilitative services shall be subject to the
provisions of section 65B.45.

Sec. 6.

Minnesota Statutes 2012, section 65B.44, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Billing. new text end

new text begin (a) Providers of goods and services for which a medical expense
benefit claim is submitted shall notify the appropriate reparation obligor of the date the
services were commenced or the goods were first provided within 30 days of determining
the identity of the reparation obligor, but in any event not later than 60 days from the date
services were commenced or goods were first provided. Once the reparation obligor
has been established, all bills must be submitted to the reparation obligor not later than
60 days from the date of service.
new text end

new text begin (b) If the provider of goods and services for which a medical expense benefit claim
is submitted fails to submit a bill and supporting documentation to a reparation obligor as
required in this subdivision, the medical expenses shall not be compensable.
new text end

Sec. 7.

Minnesota Statutes 2012, section 65B.44, subdivision 3, is amended to read:

Subd. 3.

Disability and income loss benefits.

new text begin (a) new text end Disability and income loss
benefits shall provide compensation for 85 percent of the injured person's loss of present
and future gross income from inability to work proximately caused by the nonfatal
injury subject to a maximum of deleted text begin $250 deleted text end new text begin $500 new text end per week. Loss of income includes the costs
incurred by a self-employed person to hire substitute employees to perform tasks which
are necessary to maintain the income of the injured person, which are normally performed
by the injured person, and which cannot be performed because of the injury.

new text begin (b) new text end If the injured person is unemployed at the time of injury and is receiving or is
eligible to receive unemployment benefits under chapter 268, but the injured person loses
eligibility for those benefits because of inability to work caused by the injury, disability
and income loss benefits shall provide compensation for the lost benefits in an amount
equal to the unemployment benefits which otherwise would have been payable, subject to
a maximum of deleted text begin $250 deleted text end new text begin $500 new text end per week.

new text begin (c) new text end Compensation under this subdivision shall be reduced by any income from
substitute work actually performed by the injured person or by income the injured person
would have earned in available appropriate substitute work which the injured person was
capable of performing but unreasonably failed to undertake.

new text begin (d) new text end For the purposes of this section "inability to work" means disability which
prevents the injured person from engaging in any substantial gainful occupation or
employment on a regular basis, for wage or profit, for which the injured person is or may
by training become reasonably qualified. If the injured person returns to employment and
is unable by reason of the injury to work continuously, compensation for lost income shall
be reduced by the income received while the injured person is actually able to work. The
weekly maximums may not be prorated to arrive at a daily maximum, even if the injured
person does not incur loss of income for a full week.

new text begin (e) new text end For the purposes of this section, an injured person who is "unable by reason of
the injury to work continuously" includes, but is not limited to, a person who misses time
from work, including reasonable travel time, and loses income, vacation, or sick leave
benefits, to obtain medical treatment for an injury arising out of the maintenance or use
of a motor vehicle.

Sec. 8.

Minnesota Statutes 2012, section 65B.44, subdivision 4, is amended to read:

Subd. 4.

Funeral and burial expenses.

Funeral and burial benefits shall be
reasonable expenses not in excess of deleted text begin $2,000 deleted text end new text begin $5,000 new text end , including expenses for cremation or
delivery under the Darlene Luther Revised Uniform Anatomical Gift Act, chapter 525A.

Sec. 9.

Minnesota Statutes 2012, section 65B.44, subdivision 6, is amended to read:

Subd. 6.

Survivors economic loss benefits.

Survivors economic loss benefits, in
the event of death occurring within one year of the date of the accident, caused by and
arising out of injuries received in the accident, are subject to a maximum of deleted text begin $200 deleted text end new text begin $500
new text end per week and shall cover loss accruing after decedent's death of contributions of money
or tangible things of economic value, not including services, that surviving dependents
would have received from the decedent for their support during their dependency had the
decedent not suffered the injury causing death.

For the purposes of definition under sections 65B.41 to 65B.71, the following
described persons shall be presumed to be dependents of a deceased person: (a) a wife
is dependent on a husband with whom she lives at the time of his death; (b) a husband
is dependent on a wife with whom he lives at the time of her death; (c) any child while
under the age of 18 years, or while over that age but physically or mentally incapacitated
from earning, is dependent on the parent with whom the child is living or from whom the
child is receiving support regularly at the time of the death of such parent. Questions of
the existence and the extent of dependency shall be questions of fact, considering the
support regularly received from the deceased.

Payments shall be made to the dependent, except that benefits to a dependent who
is a child or an incapacitated person may be paid to the dependent's surviving parent or
guardian. Payments shall be terminated whenever the recipient ceases to maintain a status
which if the decedent were alive would be that of dependency.

Sec. 10.

Minnesota Statutes 2012, section 72A.502, subdivision 2, is amended to read:

Subd. 2.

Prevention of fraud.

Personal or privileged information may be disclosed
without a written authorization to another person if the information is limited to that
which is reasonably necessary to detect or prevent criminal activity, fraud, material
misrepresentation, or material nondisclosure in connection with an insurance transaction,
and that person agrees not to disclose the information further without the individual
written authorization unless the further disclosure is otherwise permitted by this section
if made by an insurer, insurance agent, or insurance-support organization. new text begin Any insurer,
insurance agent, or insurance-support organization making such a disclosure is immune
from liability under section 60A.952, subdivision 3.
new text end

Sec. 11.

Minnesota Statutes 2012, section 169.09, subdivision 13, is amended to read:

Subd. 13.

Reports confidential; evidence, fee, penalty, appropriation.

(a) All
reports and supplemental information required under this section must be for the use of the
commissioner of public safety and other appropriate state, federal, county, and municipal
governmental agencies for accident analysis purposes, except:

(1) upon written request, the commissioner of public safety or any law enforcement
agency shall disclose the report required under subdivision 8 to:

(i) any individual involved in the accident, the representative of the individual's
estate, or the surviving spouse, or one or more surviving next of kin, or a trustee appointed
under section 573.02;

(ii) any other person injured in person, property, or means of support, or who incurs
other pecuniary loss by virtue of the accident;

(iii) legal counsel of a person described in item (i) or (ii); or

(iv) a representative of the insurer of any person described in item (i) or (ii);

(2) the commissioner of public safety shall, upon written request, provide the driver
filing a report under subdivision 7 with a copy of the report filed by the driver;

(3) the commissioner of public safety may verify with insurance companies vehicle
insurance information to enforce sections 65B.48, 169.792, 169.793, 169.796, and 169.797;

(4) the commissioner of public safety shall provide the commissioner of
transportation the information obtained for each traffic accident involving a commercial
motor vehicle, for purposes of administering commercial vehicle safety regulations;

(5) upon specific request, the commissioner of public safety shall provide the
commissioner of transportation the information obtained regarding each traffic accident
involving damage to identified state-owned infrastructure, for purposes of debt collection
under section 161.20, subdivision 4; and

(6) the commissioner of public safety may give to the United States Department of
Transportation commercial vehicle accident information in connection with federal grant
programs relating to safety.

(b) Accident reports and data contained in the reports are not discoverable under any
provision of law or rule of court. No report shall be used as evidence in any trial, civil or
criminal, or any action for damages or criminal proceedings arising out of an accident.
However, the commissioner of public safety shall furnish, upon the demand of any person
who has or claims to have made a report or upon demand of any court, a certificate
showing that a specified accident report has or has not been made to the commissioner
solely to prove compliance or failure to comply with the requirements that the report be
made to the commissioner.

(c) Nothing in this subdivision prevents any individual who has made a report under
this section from providing information to any individuals involved in an accident or their
representatives or from testifying in any trial, civil or criminal, arising out of an accident,
as to facts within the individual's knowledge. It is intended by this subdivision to render
privileged the reports required, but it is not intended to prohibit proof of the facts to
which the reports relate.

(d) Disclosing any information contained in any accident report, except as provided
in this subdivision, section 13.82, subdivision 3 or 6, or other statutes, is a misdemeanor.

(e) The commissioner of public safety shall charge authorized persons as described
in paragraph (a) a $5 fee for a copy of an accident report. Ninety percent of the $5 fee
collected under this paragraph must be deposited in the special revenue fund and credited
to the driver services operating account established in section 299A.705 and ten percent
must be deposited in the general fund. deleted text begin The commissioner may also furnish an electronic
copy of the database of accident records, which must not contain personal or private data
on an individual, to private agencies as provided in paragraph (g), for not less than the cost
of preparing the copies on a bulk basis as provided in section 13.03, subdivision 3.
deleted text end

deleted text begin (f) The fees specified in paragraph (e) notwithstanding, the commissioner and law
enforcement agencies shall charge commercial users who request access to response or
incident data relating to accidents a fee not to exceed 50 cents per record. "Commercial
user" is a user who in one location requests access to data in more than five accident
reports per month, unless the user establishes that access is not for a commercial purpose.
Of the money collected by the commissioner under this paragraph, 90 percent must be
deposited in the special revenue fund and credited to the driver services operating account
established in section 299A.705 and ten percent must be deposited in the general fund.
deleted text end

deleted text begin (g) The fees in paragraphs (e) and (f) notwithstanding, the commissioner shall
provide an electronic copy of the accident records database to the public on a case-by-case
basis using the cost-recovery charges provided for under section 13.03, subdivision
3. The database provided must not contain personal or private data on an individual.
However, unless the accident records database includes the vehicle identification number,
the commissioner shall include the vehicle registration plate number if a private agency
certifies and agrees that the agency:
deleted text end

deleted text begin (1) is in the business of collecting accident and damage information on vehicles;
deleted text end

deleted text begin (2) will use the vehicle registration plate number only for identifying vehicles that
have been involved in accidents or damaged, to provide this information to persons seeking
access to a vehicle's history and not for identifying individuals or for any other purpose; and
deleted text end

deleted text begin (3) will be subject to the penalties and remedies under sections 13.08 and 13.09.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12. new text begin TASK FORCE ON MOTOR VEHICLE INSURANCE COVERAGE
VERIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The task force on motor vehicle insurance coverage
verification is established to review and evaluate approaches to insurance coverage
verification and recommend legislation to create and fund a program in this state.
new text end

new text begin Subd. 2. new text end

new text begin Membership; meetings; staff. new text end

new text begin (a) The task force shall be composed of
13 members, who must be appointed by July 1, 2014, and who serve at the pleasure of
their appointing authorities:
new text end

new text begin (1) the commissioner of public safety or a designee;
new text end

new text begin (2) the commissioner of commerce or a designee;
new text end

new text begin (3) two members of the house of representatives, one appointed by the speaker of the
house and one appointed by the minority leader;
new text end

new text begin (4) two members of the senate, one appointed by the Subcommittee on Committees
of the Committee on Rules and Administration and one appointed by the minority leader;
new text end

new text begin (5) a representative of Minnesota Deputy Registrars Association;
new text end

new text begin (6) a representative of AAA Minnesota;
new text end

new text begin (7) a representative of AARP Minnesota;
new text end

new text begin (8) a representative of the Insurance Federation;
new text end

new text begin (9) a representative of the Minnesota Bankers Association;
new text end

new text begin (10) a representative of the Minnesota Bar Association; and
new text end

new text begin (11) a representative of the Minnesota Police and Peace Officers Association.
new text end

new text begin (b) Compensation and expense reimbursement must be as provided under Minnesota
Statutes, section 15.059, subdivision 3, to members of the task force.
new text end

new text begin (c) The commissioner of public safety shall convene the task force by August
1, 2014, and shall appoint a chair from the membership of the task force. Staffing and
technical assistance must be provided by the Department of Public Safety.
new text end

new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin The task force shall review and evaluate programs established in
other states as well as programs proposed by third parties, identify one or more programs
recommended for implementation in this state, and, as to the recommended programs,
adopt findings concerning:
new text end

new text begin (1) comparative costs of programs;
new text end

new text begin (2) implementation considerations, and in particular, identifying the appropriate
supervising agency and assessing compatibility with existing and planned computer
systems;
new text end

new text begin (3) effectiveness in verifying existence of motor vehicle insurance coverage;
new text end

new text begin (4) identification of categories of authorized users;
new text end

new text begin (5) simplicity of access and use for authorized users;
new text end

new text begin (6) data privacy considerations;
new text end

new text begin (7) data retention policies; and
new text end

new text begin (8) statutory changes necessary for implementation.
new text end

new text begin Subd. 4. new text end

new text begin Report. new text end

new text begin By February 1, 2015, the task force must submit to the
chairs and ranking minority members of the house of representatives and senate
committees and divisions with primary jurisdiction over commerce and transportation its
written recommendations, including any draft legislation necessary to implement the
recommendations.
new text end

new text begin Subd. 5. new text end

new text begin Sunset. new text end

new text begin The task force shall sunset the day after submitting the report
under subdivision 4, or February 2, 2015, whichever is earlier.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 72A.327, new text end new text begin is repealed.
new text end