HF 682

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to health; modifying organizational 
  1.3             provisions for certain health plan carriers; amending 
  1.4             Minnesota Statutes 1994, sections 62D.02, subdivision 
  1.5             4; 62D.03, subdivision 1; 62D.04, subdivision 1; and 
  1.6             62N.06, subdivision 1. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, section 62D.02, 
  1.9   subdivision 4, is amended to read: 
  1.10     Subd. 4.  [HEALTH MAINTENANCE ORGANIZATION.] (a) "Health 
  1.11  maintenance organization" means a nonprofit domestic or foreign 
  1.12  corporation organized under chapter 317A, or a local 
  1.13  governmental unit as defined in subdivision 11, controlled and 
  1.14  operated as provided in sections 62D.01 to 62D.30, which 
  1.15  provides, either directly or through arrangements with providers 
  1.16  or other persons, comprehensive health maintenance services, or 
  1.17  arranges for the provision of these services, to enrollees on 
  1.18  the basis of a fixed prepaid sum without regard to the frequency 
  1.19  or extent of services furnished to any particular enrollee.  
  1.20     (b) Notwithstanding paragraph (a), an organization licensed 
  1.21  as a health maintenance organization that accepts payments for 
  1.22  health care services on a capitated basis, or under another 
  1.23  similar risk sharing agreement, from a program of self-insurance 
  1.24  as described in section 60A.02, subdivision 3, paragraph (b), 
  1.25  shall not be regulated as a health maintenance organization with 
  1.26  respect to the receipt of the payments.  The payments are not 
  2.1   premium revenues for the purpose of calculating the health 
  2.2   maintenance organization's liability for otherwise applicable 
  2.3   state taxes, assessments, or surcharges, with the exception of: 
  2.4      (1) the MinnesotaCare provider tax; 
  2.5      (2) the one percent premium tax imposed in section 60A.15, 
  2.6   subdivision 1, paragraph (d); and 
  2.7      (3) effective July 1, 1995, assessments by the Minnesota 
  2.8   comprehensive health association. 
  2.9   This paragraph applies only where: 
  2.10     (1) the health maintenance organization does not bear risk 
  2.11  in excess of 110 percent of the self-insurance program's 
  2.12  expected costs; 
  2.13     (2) the employer does not carry stop loss, excess loss, or 
  2.14  similar coverage with an attachment point lower than 120 percent 
  2.15  of the self-insurance program's expected costs; 
  2.16     (3) the health maintenance organization and the employer 
  2.17  comply with the data submission and administrative 
  2.18  simplification provisions of chapter 62J; 
  2.19     (4) the health maintenance organization and the employer 
  2.20  comply with the provider tax pass-through provisions of section 
  2.21  295.582; 
  2.22     (5) the health maintenance organization's required minimum 
  2.23  reserves reflect the risk borne by the health maintenance 
  2.24  organization under this paragraph, with an appropriate 
  2.25  adjustment for the 110 percent limit on risk borne by the 
  2.26  community network; 
  2.27     (6) on or after July 1, 1994, but prior to January 1, 1995, 
  2.28  the employer has at least 1,500 current employees, as defined in 
  2.29  section 62L.02, or, on or after January 1, 1995, the employer 
  2.30  has at least 750 current employees, as defined in section 
  2.31  62L.02; 
  2.32     (7) the employer does not exclude any eligible employees or 
  2.33  their dependents, both as defined in section 62L.02, from 
  2.34  coverage offered by the employer, under this paragraph or any 
  2.35  other health coverage, insured or self-insured, offered by the 
  2.36  employer, on the basis of the health status or health history of 
  3.1   the person.  
  3.2      This paragraph expires December 31, 1997. 
  3.3      Sec. 2.  Minnesota Statutes 1994, section 62D.03, 
  3.4   subdivision 1, is amended to read: 
  3.5      Subdivision 1.  [CERTIFICATE OF AUTHORITY.] Notwithstanding 
  3.6   any law of this state to the contrary, any nonprofit domestic or 
  3.7   foreign corporation organized to do so or a local governmental 
  3.8   unit may apply to the commissioner of health for a certificate 
  3.9   of authority to establish and operate a health maintenance 
  3.10  organization in compliance with sections 62D.01 to 62D.30.  No 
  3.11  person shall establish or operate a health maintenance 
  3.12  organization in this state, nor sell or offer to sell, or 
  3.13  solicit offers to purchase or receive advance or periodic 
  3.14  consideration in conjunction with a health maintenance 
  3.15  organization or health maintenance contract unless the 
  3.16  organization has a certificate of authority under sections 
  3.17  62D.01 to 62D.30. 
  3.18     Sec. 3.  Minnesota Statutes 1994, section 62D.04, 
  3.19  subdivision 1, is amended to read: 
  3.20     Subdivision 1.  [DETERMINATION OF REQUIREMENTS.] Upon 
  3.21  receipt of an application for a certificate of authority, the 
  3.22  commissioner of health shall determine whether the applicant for 
  3.23  a certificate of authority has: 
  3.24     (a) demonstrated the willingness and potential ability to 
  3.25  assure that health care services will be provided in such a 
  3.26  manner as to enhance and assure both the availability and 
  3.27  accessibility of adequate personnel and facilities; 
  3.28     (b) arrangements for an ongoing evaluation of the quality 
  3.29  of health care; 
  3.30     (c) a procedure to develop, compile, evaluate, and report 
  3.31  statistics relating to the cost of its operations, the pattern 
  3.32  of utilization of its services, the quality, availability and 
  3.33  accessibility of its services, and such other matters as may be 
  3.34  reasonably required by regulation of the commissioner of health; 
  3.35     (d) reasonable provisions for emergency and out of area 
  3.36  health care services; 
  4.1      (e) demonstrated that it is financially responsible and may 
  4.2   reasonably be expected to meet its obligations to enrollees and 
  4.3   prospective enrollees.  In making this determination, the 
  4.4   commissioner of health shall require the amounts of net worth 
  4.5   and working capital required in section 62D.042, the deposit 
  4.6   required in section 62D.041, and in addition shall consider: 
  4.7      (1) the financial soundness of its arrangements for health 
  4.8   care services and the proposed schedule of charges used in 
  4.9   connection therewith; 
  4.10     (2) arrangements which will guarantee for a reasonable 
  4.11  period of time the continued availability or payment of the cost 
  4.12  of health care services in the event of discontinuance of the 
  4.13  health maintenance organization; and 
  4.14     (3) agreements with providers for the provision of health 
  4.15  care services; 
  4.16     (f) demonstrated that it will assume full financial risk on 
  4.17  a prospective basis for the provision of comprehensive health 
  4.18  maintenance services, including hospital care; provided, 
  4.19  however, that the requirement in this paragraph shall not 
  4.20  prohibit the following: 
  4.21     (1) a health maintenance organization from obtaining 
  4.22  insurance or making other arrangements (i) for the cost of 
  4.23  providing to any enrollee comprehensive health maintenance 
  4.24  services, the aggregate value of which exceeds $5,000 in any 
  4.25  year, (ii) for the cost of providing comprehensive health care 
  4.26  services to its members on a nonelective emergency basis, or 
  4.27  while they are outside the area served by the organization, or 
  4.28  (iii) for not more than 95 percent of the amount by which the 
  4.29  health maintenance organization's costs for any of its fiscal 
  4.30  years exceed 105 percent of its income for such fiscal years; 
  4.31  and 
  4.32     (2) a health maintenance organization from having a 
  4.33  provision in a group health maintenance contract allowing an 
  4.34  adjustment of premiums paid based upon the actual health 
  4.35  services utilization of the enrollees covered under the 
  4.36  contract, except that at no time during the life of the contract 
  5.1   shall the contract holder fully self-insure the financial risk 
  5.2   of health care services delivered under the contract.  Risk 
  5.3   sharing arrangements shall be subject to the requirements of 
  5.4   sections 62D.01 to 62D.30; 
  5.5      (g) demonstrated that it has made provisions for and 
  5.6   adopted a conflict of interest policy applicable to all members 
  5.7   of the board of directors and the principal officers of the 
  5.8   health maintenance organization.  The conflict of interest 
  5.9   policy shall include the procedures described in 
  5.10  section 302A.255, subdivisions 1 and 2, or section 317A.255, 
  5.11  subdivisions 1 and 2.  However, the commissioner is not 
  5.12  precluded from finding that a particular transaction is an 
  5.13  unreasonable expense as described in section 62D.19 even if the 
  5.14  directors follow the required procedures; and 
  5.15     (h) otherwise met the requirements of sections 62D.01 to 
  5.16  62D.30. 
  5.17     Sec. 4.  Minnesota Statutes 1994, section 62N.06, 
  5.18  subdivision 1, is amended to read: 
  5.19     Subdivision 1.  [AUTHORIZED ENTITIES.] (a) An integrated 
  5.20  service network may be organized as a separate nonprofit 
  5.21  domestic or foreign corporation under chapter 317A or as a 
  5.22  cooperative under chapter 308A.  
  5.23     (b) A nonprofit health carrier, as defined in section 
  5.24  62A.011, may establish and operate one or more integrated 
  5.25  service networks without forming a separate corporation or 
  5.26  cooperative, but only if all of the following conditions are met:
  5.27     (i) an existing contract between the health carrier and a 
  5.28  health care provider, for a term of less than seven years, that 
  5.29  does not explicitly mention the provider's relationship within 
  5.30  an integrated service network, or a future integrated service 
  5.31  network, does not bind the health carrier or provider as applied 
  5.32  to integrated service network services, except with the mutual 
  5.33  consent of the health carrier and provider.  This clause does 
  5.34  not apply to contracts between a health carrier and its salaried 
  5.35  employees; 
  5.36     (ii) the health carrier shall not apply toward the net 
  6.1   worth, working capital, or deposit requirements of this chapter 
  6.2   any assets used to satisfy net worth, working capital, deposit, 
  6.3   or other financial requirements under any other chapter of 
  6.4   Minnesota law; 
  6.5      (iii) the health carrier shall not include in its premiums 
  6.6   for health coverage provided under any other chapter of 
  6.7   Minnesota law, an assessment or surcharge relating to net worth, 
  6.8   working capital, or deposit requirements imposed upon the 
  6.9   integrated service network under this chapter; and 
  6.10     (iv) the health carrier shall not include in its premiums 
  6.11  for integrated service network coverage under this chapter an 
  6.12  assessment or surcharge relating to net worth working capital or 
  6.13  deposit requirements imposed upon health coverage offered under 
  6.14  any other chapter of Minnesota law. 
  6.15     Sec. 5.  [EFFECTIVE DATE.] 
  6.16     Sections 1 to 4 are effective the day following final 
  6.17  enactment.