as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to health; modifying provisions relating to 1.3 spending on health care services; providing for 1.4 monitoring the rate of growth of health care spending; 1.5 modifying the integrated service network act; 1.6 providing for the cancellation of recodification 1.7 efforts; amending Minnesota Statutes 1996, sections 1.8 60A.951, subdivision 5; 62J.04, subdivisions 1, 1a, 3, 1.9 7, and 9; 62J.041, subdivisions 2, 3, 4, 5, and 6; 1.10 62J.042; 62N.01, subdivision 1; 62N.22; 62N.23; 1.11 62N.26; 62N.40; 62Q.01, subdivisions 4 and 5; 62Q.106; 1.12 62Q.45, subdivision 2; 256.9363, subdivision 1; and 1.13 256.9657, subdivision 3; repealing Minnesota Statutes 1.14 1996, sections 62J.041, subdivision 7; 62J.37; 62N.01, 1.15 subdivision 2; 62N.02, subdivisions 4b, 4c, 6, 7, 8, 1.16 9, 10, and 12; 62N.03; 62N.04; 62N.05; 62N.06; 1.17 62N.065; 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 1.18 62N.077; 62N.078; 62N.10; 62N.11; 62N.12; 62N.13; 1.19 62N.14; 62N.15; 62N.17; 62N.18; 62N.24; 62N.26; 1.20 62N.38, subdivisions 1, 2, 3, and 4; and 62Q.41; Laws 1.21 1994, chapter 625, article 5, section 5, as amended. 1.22 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.23 Section 1. Minnesota Statutes 1996, section 60A.951, 1.24 subdivision 5, is amended to read: 1.25 Subd. 5. [INSURER.] "Insurer" means insurance company, 1.26 risk retention group as defined in section 60E.02, service plan 1.27 corporation as defined in section 62C.02, health maintenance 1.28 organization as defined in section 62D.02, community integrated 1.29 service network as defined in section 62N.02, fraternal benefit 1.30 society regulated under chapter 64B, township mutual company 1.31 regulated under chapter 67A, joint self-insurance plan or 1.32 multiple employer trust regulated under chapter 60F, 62H, or 1.33 section 471.617, subdivision 2, persons administering a 2.1 self-insurance plan as defined in section 60A.23, subdivision 8, 2.2 clause (2), paragraphs (a) and (d), and the workers' 2.3 compensation reinsurance association established in section 2.4 79.34. 2.5 Sec. 2. Minnesota Statutes 1996, section 62J.04, 2.6 subdivision 1, is amended to read: 2.7 Subdivision 1. [LIMITS ON THE RATE OF GROWTHCOST 2.8 CONTAINMENT GOALS.] (a) The commissioner of health shall set 2.9 annuallimits on the rate of growth ofcost containment goals 2.10 for public and private spending on health care services for 2.11 Minnesota residents, as provided in paragraph (b). Thelimits2.12on growthcost containment goals must be set at levels the 2.13 commissioner determines to be realistic and achievablebut that2.14will reduce the rate of growth in health care spending by at2.15least ten percent per year for the next five years. The 2.16 commissioner shall setlimits on growthcost containment goals 2.17 based on available data on spending and growth trends, including 2.18 data from group purchasers, national data on public and private 2.19 sector health care spending and cost trends, and trend 2.20 information from other states. 2.21 (b) The commissioner shall set the following annuallimits2.22on the rate of growth ofcost containment goals for public and 2.23 private spending on health care services for Minnesota residents: 2.24 (1)for calendar year 1994, the rate of growth must not2.25exceed the change in the regional consumer price index for urban2.26consumers for calendar year 1993 plus 6.5 percentage points;2.27(2)for calendar year 1995, the rate of growth must not 2.28 exceed the change in the regional consumer price index for urban 2.29 consumers for calendar year 1994 plus 5.3 percentage points; 2.30(3)(2) for calendar year 1996, the rate of growth must not 2.31 exceed the change in the regional consumer price index for urban 2.32 consumers for calendar year 1995 plus 4.3 percentage points; 2.33(4)(3) for calendar year 1997, the rate of growthmust2.34 should not exceed the change in the regional consumer price 2.35 index for urban consumers for calendar year 1996 plus 3.4 2.36 percentage points;and3.1(5)(4) for calendar year 1998, the rate of growthmust3.2 should not exceed the change in the regional consumer price 3.3 index for urban consumers for calendar year 1997 plus 2.6 3.4 percentage points; and 3.5 (5) for calendar years after 1998, the commissioner shall 3.6 set cost containment goals using a method determined by the 3.7 commissioner to be most appropriate. 3.8 The commissioner shall adjust the growth limit set for 3.9 calendar year 1995 to recover savings in health care spending 3.10 required for the period July 1, 1993 to December 31, 1993. 3.11 (c) The commissioner shall publish: 3.12 (1) the projectedlimitscost containment goals in the 3.13 State Register by April 15 of the year immediately preceding the 3.14 year in which thelimitcost containment goal will be 3.15 effectiveexcept for the year 1993, in which the limit shall be3.16published by July 1, 1993; 3.17 (2) the quarterly change in the regional consumer price 3.18 index for urban consumers; and 3.19 (3) the health care financing administration forecast for 3.20 total growth in the national health care expenditures. 3.21 (d) In settingan annual limitthe cost containment goals, 3.22 the commissioner is exempt from the rulemaking requirements of 3.23 chapter 14. The commissioner's decision onan annual limitthe 3.24 cost containment goals is not appealable. 3.25 Sec. 3. Minnesota Statutes 1996, section 62J.04, 3.26 subdivision 1a, is amended to read: 3.27 Subd. 1a. [ADJUSTEDGROWTH LIMITS AND ENFORCEMENTCOST 3.28 CONTAINMENT GOALS.] (a) The commissioner shall publish the final 3.29 adjustedgrowth limitcost containment goal in the State 3.30 Register by January 31 of the year that theexpenditure limit3.31 cost containment goal is to be in effect. The adjustedlimit3.32 cost containment goal must reflect the actual regional consumer 3.33 price index for urban consumers for the previous calendar year, 3.34 and may deviate from the previously published projectedgrowth3.35limitscost containment goals to reflect differences between the 3.36 actual regional consumer price index for urban consumers and the 4.1 projected Consumer Price Index for urban consumers. The 4.2 commissioner shall report to the legislatureby February 15 of4.3each yearon the implementation of thegrowth limitscost 4.4 containment goals as part of the study required under section 4.5 144.70.This annualThe report shall describe the differences 4.6 between the projected increase in health care expenditures, the 4.7 actual expenditures based on data collected, and the impact and4.8validity of growth limits within the overall health care reform4.9strategy. 4.10(b) The commissioner, in consultation with the Minnesota4.11health care commission, shall research and include in the annual4.12report required in paragraph (a) for 1996, recommendations4.13regarding the implementation of growth limits for health plan4.14companies and providers. The commissioner shall:4.15(1) consider both spending and revenue approaches and4.16report on the implementation of the interim limits as defined in4.17sections 62J.041 and 62J.042;4.18(2) make recommendations regarding the enforcement4.19mechanism and consider mechanisms to adjust future growth limits4.20as well as mechanisms to establish financial penalties for4.21noncompliance;4.22(3) address the feasibility of systemwide limits imposed on4.23all integrated service networks; and4.24(4) make recommendations on the most effective way to4.25implement growth limits on the fee-for-service system in the4.26absence of a regulated all-payer system.4.27(c) The commissioner shall enforce limits on growth in4.28spending for health plan companies and revenues for providers.4.29If the commissioner determines that artificial inflation or4.30padding of costs or prices has occurred in anticipation of the4.31implementation of growth limits, the commissioner may adjust the4.32base year spending totals or growth limits or take other action4.33to reverse the effect of the artificial inflation or padding.4.34(d) The commissioner shall impose and enforce overall4.35limits on growth in spending for health plan companies, with4.36adjustments for changes in enrollment, benefits, severity, and5.1risks. If a health plan company exceeds the growth limits, the5.2commissioner may impose financial penalties up to the amount5.3exceeding the applicable growth limit.5.4 Sec. 4. Minnesota Statutes 1996, section 62J.04, 5.5 subdivision 3, is amended to read: 5.6 Subd. 3. [COST CONTAINMENT MONITORING DUTIES.] After 5.7 obtaining the advice and recommendations of the Minnesota health 5.8 care commission, the commissioner shall: 5.9 (1) establish statewide and regionallimits on growth in5.10 cost containment goals for total health care spending under this 5.11 section,monitor statewide compliance with the spending limits,5.12and take action to achieve compliance to the extent authorized5.13by the legislatureand collect data as described in sections 5.14 62J.37 to 62J.41 to monitor statewide achievement of the cost 5.15 containment goals; 5.16 (2) divide the state into no fewer than four regions, with 5.17 one of those regions being the Minneapolis/St. Paul metropolitan 5.18 statistical area but excluding Chisago, Isanti, Wright, and 5.19 Sherburne counties, for purposes of fostering the development of 5.20 regional health planning and coordination of health care 5.21 delivery among regional health care systems and working to 5.22 achievespending limitscost containment goals; 5.23 (3) provide technical assistance to regional coordinating 5.24 boards; 5.25 (4) monitor the quality of health care throughout the state 5.26 and take action as necessary to ensure an appropriate level of 5.27 quality; 5.28 (5) issue recommendations regarding uniform billing forms, 5.29 uniform electronic billing procedures and data interchanges, 5.30 patient identification cards, and other uniform claims and 5.31 administrative procedures for health care providers and private 5.32 and public sector payers. In developing the recommendations, 5.33 the commissioner shall review the work of the work group on 5.34 electronic data interchange (WEDI) and the American National 5.35 Standards Institute (ANSI) at the national level, and the work 5.36 being done at the state and local level. The commissioner may 6.1 adopt rules requiring the use of the Uniform Bill 82/92 form, 6.2 the National Council of Prescription Drug Providers (NCPDP) 3.2 6.3 electronic version, the Health Care Financing Administration 6.4 1500 form, or other standardized forms or procedures; 6.5 (6) undertake health planning responsibilities as provided 6.6 in section 62J.15; 6.7 (7) authorize, fund, or promote research and 6.8 experimentation on new technologies and health care procedures; 6.9 (8) within the limits of appropriations for these purposes, 6.10 administer or contract for statewide consumer education and 6.11 wellness programs that will improve the health of Minnesotans 6.12 and increase individual responsibility relating to personal 6.13 health and the delivery of health care services, undertake 6.14 prevention programs including initiatives to improve birth 6.15 outcomes, expand childhood immunization efforts, and provide 6.16 start-up grants for worksite wellness programs;and6.17 (9) undertake other activities to monitor and oversee the 6.18 delivery of health care services in Minnesota with the goal of 6.19 improving affordability, quality, and accessibility of health 6.20 care for all Minnesotans; and 6.21 (10) make the cost containment goal data available to the 6.22 public in forms that meet the requirements of data privacy and 6.23 that are useful to consumers, providers, and purchasers of 6.24 health care services. 6.25 Sec. 5. Minnesota Statutes 1996, section 62J.04, 6.26 subdivision 7, is amended to read: 6.27 Subd. 7. [PLAN FOR CONTROLLING GROWTH IN SPENDING.] (a) By 6.28 January 15, 1993, the Minnesota health care commission shall 6.29 submit to the legislature and the governor for approval a plan, 6.30 with as much detail as possible, for slowing the growth in 6.31 health care spending to the growth rate identified by the 6.32 commissioner, beginning July 1, 1993. The goal of the plan 6.33 shall be to reduce the growth rate of health care spending, 6.34 adjusted for population changes, so that it declines by at least 6.35 ten percent per year for each of the next five years. The plan 6.36 may include tentative targets for reducing the growth in 7.1 spending for consideration by the legislature. 7.2 (b) In developing the plan, the commission shall consider 7.3 the advisability and feasibility of the following options, but 7.4 is not obligated to incorporate them into the plan: 7.5 (1) data and methods that could be used to calculate 7.6 regional and statewide spendinglimitscost containment goals 7.7 and the various options for expressing spendinglimitscost 7.8 containment goals, such as maximum percentage growth rates or 7.9 actuarially adjusted average per capita rates that reflect the 7.10 demographics of the state or a region of the state; 7.11 (2) methods of adjusting spendinglimitscost containment 7.12 goals to account for patients who are not Minnesota residents, 7.13 to reflect care provided to a person outside the person's 7.14 region, and to adjust for demographic changes over time; 7.15 (3) methods that could be used to monitor compliance with 7.16 thelimitscost containment goals; 7.17 (4) criteria for exempting spending on research and 7.18 experimentation on new technologies and medical practices when 7.19 setting or enforcing spendinglimitscost containment goals; 7.20 (5) methods that could be used to help providers, 7.21 purchasers, consumers, and communities control spending growth; 7.22 (6) methods of identifying activities of consumers, 7.23 providers, or purchasers that contribute to excessive growth in 7.24 spending; 7.25 (7) methods of encouraging voluntary activities that will 7.26 help keep spending within thelimitscost containment goals; 7.27 (8) methods of consulting providers and obtaining their 7.28 assistance and cooperation and safeguards that are necessary to 7.29 protect providers from abrupt changes in revenues or practice 7.30 requirements; 7.31 (9) methods of avoiding, preventing, or recovering spending 7.32 in excess of the rate of growth identified by the commission; 7.33 (10) methods of depriving those who benefit financially 7.34 from overspending of the benefit of overspending, including the 7.35 option of recovering the amount of the excess spending from the 7.36 greater provider community or from individual providers or 8.1 groups of providers through targeted assessments; 8.2 (11) methods of reallocating health care resources among 8.3 provider groups to correct existing inequities, reward desirable 8.4 provider activities, discourage undesirable activities, or 8.5 improve the quality, affordability, and accessibility of health 8.6 care services; 8.7 (12) methods of imposing mandatory requirements relating to 8.8 the delivery of health care, such as practice parameters, 8.9 hospital admission protocols, 24-hour emergency care screening 8.10 systems, or designated specialty providers; 8.11 (13) methods of preventing unfair health care practices 8.12 that give a provider or group purchaser an unfair advantage or 8.13 financial benefit or that significantly circumvent, subvert, or 8.14 obstruct the goals of this chapter; 8.15 (14) methods of providing incentives through special 8.16 spending allowances or other means to encourage and reward 8.17 special projects to improve outcomes or quality of care; and 8.18 (15) the advisability or feasibility of a system of 8.19 permanent, regional coordinating boards to ensure community 8.20 involvement in activities to improve affordability, 8.21 accessibility, and quality of health care in each region. 8.22 Sec. 6. Minnesota Statutes 1996, section 62J.04, 8.23 subdivision 9, is amended to read: 8.24 Subd. 9. [GROWTH LIMITSCOST CONTAINMENT GOALS; FEDERAL 8.25 PROGRAMS.] The commissioners of health and human services shall 8.26 establish a rate methodology for Medicare and Medicaid 8.27 risk-based contracting with health plan companies that is 8.28 consistent with statewidegrowth limitscost containment goals. 8.29 The methodology shall be presented for review by the Minnesota 8.30 health care commission and the legislative commission on health 8.31 care access prior to the submission of a waiver request to the 8.32 health care financing administration and subsequent 8.33 implementation of the methodology. 8.34 Sec. 7. Minnesota Statutes 1996, section 62J.041, 8.35 subdivision 2, is amended to read: 8.36 Subd. 2. [ESTABLISHMENT.] The commissioner of health shall 9.1 establishlimits on the increase in net expenditures by each9.2health carrier plan company for calendar years 1994, 1995, 1996,9.3and 1997cost containment goals for the annual increase in net 9.4 expenditures by each health carrier plan company. Thelimits9.5 cost containment goals must be the same as the annual rate of 9.6 growth in health care spending established under section 62J.04, 9.7 subdivision 1, paragraph (b). Health plan companies that are 9.8 affiliates may elect to meet one combinedexpenditure limitcost 9.9 containment goal. 9.10 Sec. 8. Minnesota Statutes 1996, section 62J.041, 9.11 subdivision 3, is amended to read: 9.12 Subd. 3. [DETERMINATION OF EXPENDITURES.] Health plan 9.13 companies shall submit to the commissioner of health, by April 9.14 1, 1994, for calendar year 1993; April 1, 1995, for calendar 9.15 year 1994; April 1, 1996, for calendar year 1995; April 1, 1997, 9.16 for calendar year 1996; and April 1, 1998, for calendar year 9.17 1997 all information the commissioner determines to be necessary 9.18 to implementand enforcethis section. The information must be 9.19 submitted in the form specified by the commissioner. The 9.20 information must include, but is not limited to, expenditures 9.21 per member per month or cost per employee per month, and 9.22 detailed information on revenues and reserves. The 9.23 commissioner, to the extent possible, shall coordinate the 9.24 submittal of the information required under this section with 9.25 the submittal of the financial data required under chapter 62J, 9.26 to minimize the administrative burden on health plan companies. 9.27 The commissioner may adjust final expenditure figures for 9.28 demographic changes, risk selection, changes in basic benefits, 9.29 and legislative initiatives that materially change health care 9.30 costs, as long as these adjustments are consistent with the 9.31 methodology submitted by the health plan company to the 9.32 commissioner, and approved by the commissioner as actuarially 9.33 justified. The methodology to be used for adjustments and the 9.34 election to meet oneexpenditure limitcost containment goal for 9.35 affiliated health plan companies must be submitted to the 9.36 commissioner by September 1, 1994. Community integrated service 10.1 networks may submit the information with their application for 10.2 licensure. The commissioner shall also accept changes to 10.3 methodologies already submitted.The adjustment methodology10.4submitted and approved by the commissioner must apply to the10.5data submitted for calendar years 1994 and 1995. The10.6commissioner may allow changes to accepted adjustment10.7methodologies for data submitted for calendar years 1996 and10.81997.Changes to the adjustment methodology must be received by 10.9 September 1, 1996,of each year and must be approved by the 10.10 commissioner. 10.11 Sec. 9. Minnesota Statutes 1996, section 62J.041, 10.12 subdivision 4, is amended to read: 10.13 Subd. 4. [MONITORING OF RESERVES.] (a) The commissioners 10.14 of health and commerce shall monitor health plan company 10.15 reserves and net worth as established under chapters 60A, 62C, 10.16 62D, 62H, and 64B, with respect to the health plan companies 10.17 that each commissioner respectively regulates toensure10.18thatassess the degree to which savings resulting from the 10.19 establishment ofexpenditure limitscost containment goals are 10.20 passed on to consumers in the form of lower premium rates. 10.21 (b) Health plan companies shall fully reflect in the 10.22 premium rates the savingsgenerated by the expenditure limits10.23 resulting from cost containment goals. No premium rate, 10.24 currently reviewed by the departments of health or commerce, may 10.25 be approved for those health plan companies unless the health 10.26 plan company establishes to the satisfaction of the commissioner 10.27 of commerce or the commissioner of health, as appropriate, that 10.28 the proposed new rate would comply with this paragraph. 10.29 (c) Health plan companies, except those licensed under 10.30 chapter 60A to sell accident and sickness insurance under 10.31 chapter 62A, shall annually before the end of the fourth fiscal 10.32 quarter provide to the commissioner of health or commerce, as 10.33 applicable, a projection of the level of reserves the company 10.34 expects to attain during each quarter of the following fiscal 10.35 year. These health plan companies shall submit with required 10.36 quarterly financial statements a calculation of the actual 11.1 reserve level attained by the company at the end of each quarter 11.2 including identification of the sources of any significant 11.3 changes in the reserve level and an updated projection of the 11.4 level of reserves the health plan company expects to attain by 11.5 the end of the fiscal year. In cases where the health plan 11.6 company has been given a certificate to operate a new health 11.7 maintenance organization under chapter 62D, or been licensed as 11.8 an integrated service network or community integrated service 11.9 network under chapter 62N, or formed an affiliation with one of 11.10 these organizations, the health plan company shall also submit 11.11 with its quarterly financial statement, total enrollment at the 11.12 beginning and end of the quarter and enrollment changes within 11.13 each service area of the new organization. The reserve 11.14 calculations shall be maintained by the commissioners as trade 11.15 secret information, except to the extent that such information 11.16 is also required to be filed by another provision of state law 11.17 and is not treated as trade secret information under such other 11.18 provisions. 11.19 (d) Health plan companies in paragraph (c) whose reserves 11.20 are less than the required minimum or more than the required 11.21 maximum at the end of the fiscal year shall submit a plan of 11.22 corrective action to the commissioner of health or commerce 11.23 under subdivision 7. 11.24 (e) The commissioner of commerce, in consultation with the 11.25 commissioner of health, shall report to the legislature no later 11.26 than January 15, 1995, as to whether the concept of a reserve 11.27 corridor or other mechanism for purposes of monitoring reserves 11.28 is adaptable for use with indemnity health insurers that do 11.29 business in multiple states and that must comply with their 11.30 domiciliary state's reserves requirements. 11.31 Sec. 10. Minnesota Statutes 1996, section 62J.041, 11.32 subdivision 5, is amended to read: 11.33 Subd. 5. [NOTICE.] The commissioner of health shall 11.34 publish in the State Register and make available to the public 11.35 by July 1, 1995, a list of all health plan companies that 11.36 exceeded theirexpenditure limitcost containment goal for the 12.1 1994 calendar year. The commissioner shall publish in the State 12.2 Register and make available to the public by July 1, 1996,of 12.3 each year a list of all health plan companies that exceeded 12.4 their combinedexpenditure limitcost containment goal for the 12.5 preceding calendaryears 1994 and 1995year. The commissioner 12.6 shall notify each health plan company that the commissioner has 12.7 determined that the health plan company exceeded itsexpenditure12.8limitcost containment goal, at least 30 days before publishing 12.9 the list, and shall provide each health plan company with ten 12.10 days to provide an explanation for exceeding theexpenditure12.11limitcost containment goal. The commissioner shall review the 12.12 explanation and may change a determination if the commissioner 12.13 determines the explanation to be valid. 12.14 Sec. 11. Minnesota Statutes 1996, section 62J.041, 12.15 subdivision 6, is amended to read: 12.16 Subd. 6. [ASSISTANCE BY THE COMMISSIONER OF COMMERCE.] The 12.17 commissioner of commerce shall provide assistance to the 12.18 commissioner of health in monitoring health plan companies 12.19 regulated by the commissioner of commerce.The commissioner of12.20commerce, in consultation with the commissioner of health, shall12.21enforce compliance with expenditure limits for those health plan12.22companies.12.23 Sec. 12. Minnesota Statutes 1996, section 62J.042, is 12.24 amended to read: 12.25 62J.042 [HEALTH CARE PROVIDERREVENUE LIMITSCOST 12.26 CONTAINMENT GOALS.] 12.27 Subdivision 1. [DEFINITION.] For purposes of this section, 12.28 "health care provider" has the definition given in section 12.29 62J.03, subdivision 8. 12.30 Subd. 2. [ESTABLISHMENT.] The commissioner of health shall 12.31 establishlimits oncost containment goals for the annual 12.32 increase in revenue for each health care provider, for calendar12.33years 1994, 1995, 1996, and 1997. Thelimitscost containment 12.34 goals must be the same as theannual rate ofgoals for growth in 12.35 health care spending established under section 62J.04, 12.36 subdivision 1, paragraph (b). The commissioner may adjust final 13.1 revenue figures for case mix complexity, payer mix, 13.2 out-of-period settlements, certain taxes and assessments 13.3 including the MinnesotaCare provider tax and provider surcharge, 13.4 any new assessments imposed by federal or state law, research 13.5 and education costs, donations, grants, and legislative 13.6 initiatives that materially change health care revenues, as long 13.7 as these adjustments are consistent with the methodology 13.8 submitted by the health care provider to the commissioner, and 13.9 approved by the commissioner as actuarially justified.The13.10methodology to be used for adjustments must be submitted to the13.11commissioner by September 1, 1994.The commissioner shall also 13.12 accept changes to methodologies already submitted.The13.13adjustment methodology submitted and approved by the13.14commissioner must apply to the data submitted for calendar years13.151994 and 1995. The commissioner may allow changes to accepted13.16adjustment methodologies for data submitted for calendar years13.171996 and 1997.The commissioner may allow changes to accepted 13.18 adjustment methodologies. Changes to the adjustment methodology 13.19 must be received by September 1, 1996,of each year and must be 13.20 approved by the commissioner. 13.21 Subd. 3. [MONITORING OF REVENUE.] The commissioner of 13.22 health shall monitor health care provider revenue, toensure13.23thatassess the degree to which savings resulting from the 13.24 establishment ofrevenue limitscost containment goals are 13.25 passed on to consumers in the form of lower charges. The 13.26 commissioner shall monitor hospital revenue by examining net 13.27 inpatient revenue per adjusted admission and net outpatient 13.28 revenue per outpatient visit. The commissioner shall monitor 13.29 the revenue of physicians and other health care providers by 13.30 examining revenue per patient per year or revenue per 13.31 encounter. For purposes of this section, definitions related to 13.32 the implementation oflimitscost containment goals for 13.33 providers other than hospitals are included in Minnesota Rules, 13.34 chapter 4650, and definitions related to the implementation 13.35 oflimitscost containment goals for hospitals are included in 13.36 Minnesota Rules, chapter 4651.If this information is not14.1available, the commissioner may enforce an annual limit on the14.2rate of growth of the provider's current fees.14.3 Subd. 4. [MONITORINGAND ENFORCEMENT.] (a) Health care 14.4 providers shall submit to the commissioner of health, in the 14.5 form and at the times required by the commissioner, all 14.6 information the commissioner determines to be necessary to 14.7 implementand enforcethis section.The commissioner shall14.8regularly audit all health clinics employing or contracting with14.9over 100 physicians. The commissioner shall also audit, at14.10times and in a manner that does not interfere with delivery of14.11patient care, a sample of smaller clinics and other health care14.12providers. Providers that exceed revenue limits based on14.13two-year average revenue data shall be required by the14.14commissioner to pay back the amount exceeding the revenue limits14.15during the following calendar year.14.16 (b) Pharmacists may adjust their revenue figures for 14.17 increases in drug product costs that are set by the 14.18 manufacturer. The commissionershallmay consult with pharmacy 14.19 groups, including pharmacies, wholesalers, drug manufacturers, 14.20 health plans, and other interested parties, to determine the 14.21 methodology for measuring and implementing theinterim growth14.22limitscost containment goals while taking into account the 14.23 adjustments for drug product costs. 14.24The commissioner shall monitor providers meeting the growth14.25limits based on their current fees on an annual basis. The fee14.26charged for each service must be based on a weighted average14.27across 12 months and compared to the weighted average for the14.28previous 12-month period. The percentage increase in the14.29average fee from 1993 to 1994, and from 1994 to 1995 is subject14.30to the growth limits established under section 62J.04,14.31subdivision 1, paragraph (b). The percentage increase in the14.32average fee from 1995 to 1996, and from 1996 to 1997 is subject14.33to the change in the regional consumer price index for urban14.34consumers for the previous year published in the State Register14.35in January of the year that the growth limit is in effect. The14.36audit process may include a review of the provider's monthly fee15.1schedule, and a random claims analysis for the provider during15.2different parts of the year to monitor variations in fees. The15.3commissioner shall require providers that exceed growth limits,15.4based on annual fees, to pay back during the following calendar15.5year the amount of fees received exceeding the limit.15.6The commissioner shall notify each provider that has15.7exceeded its revenue or fee limit, at least 30 days before15.8taking action, and shall provide each provider with ten days to15.9provide an explanation for exceeding the revenue or fee limit.15.10The commissioner shall review the explanation and may change a15.11determination if the commissioner determines the explanation to15.12be valid.15.13The commissioner may approve a different repayment schedule15.14for a health care provider that takes into account the15.15provider's financial condition.15.16A provider may appeal the commissioner's order to pay back15.17the amount exceeding the revenue or fee limit by mailing a15.18written notice of appeal to the commissioner within 30 days15.19after the commissioner's order was mailed. The contested case15.20and judicial review provisions of chapter 14 apply to the15.21appeal. The provider shall pay the amount specified by the15.22commissioner either to the commissioner or into an escrow15.23account until final resolution of the appeal. Notwithstanding15.24sections 15.472 to 15.475, each party is responsible for its own15.25fees and expenses, including attorneys fees, for the appeal.15.26Any amount required to be paid back under this section shall be15.27deposited in the health care access fund.15.28Subd. 5. [SMALL RURAL HOSPITALS.] Each small rural15.29hospital shall file information with the commissioner of health15.30and calculate its growth in revenues pursuant to the15.31requirements of this chapter. Small rural hospitals that do not15.32file as part of a hospital system are exempt from the repayment15.33provisions of subdivision 4. However, the commissioner retains15.34the authority to initiate an investigation and order repayment15.35pursuant to this section, if the commissioner believes that15.36there is an unreasonable rate of growth in revenues and if the16.1hospital fails to demonstrate good cause for exceeding the16.2statutory growth limits. For purposes of this subdivision,16.3small rural hospital is defined as a hospital with less than 5016.4licensed beds.16.5 Sec. 13. Minnesota Statutes 1996, section 62N.01, 16.6 subdivision 1, is amended to read: 16.7 Subdivision 1. [CITATION.] This chapter may be cited as 16.8 the "Minnesota community integrated service network act." 16.9 Sec. 14. Minnesota Statutes 1996, section 62N.22, is 16.10 amended to read: 16.11 62N.22 [DISCLOSURE OF COMMISSIONS.] 16.12 Before selling any coverage or enrollment in a community 16.13 integrated service networkor an integrated service network, a 16.14 person selling the coverage or enrollment shall disclose in 16.15 writing to the prospective purchaser the amount of any 16.16 commission or other compensation the person will receive as a 16.17 direct result of the sale. The disclosure may be expressed in 16.18 dollars or as a percentage of the premium. The amount disclosed 16.19 need not include any anticipated renewal commissions. 16.20 Sec. 15. Minnesota Statutes 1996, section 62N.23, is 16.21 amended to read: 16.22 62N.23 [TECHNICAL ASSISTANCE; LOANS.] 16.23 (a) The commissioner shall provide technical assistance to 16.24 parties interested in establishing or operating a community 16.25 integrated service networkor an integrated service network. 16.26 This shall be known as the community integrated service network 16.27 technical assistance program(ISNTAP)(CISNTAP). 16.28 The technical assistance program shall offer seminars on 16.29 the establishment and operation of community integrated service 16.30 networksor integrated service networksin all regions of 16.31 Minnesota. The commissioner shall advertise these seminars in 16.32 local and regional newspapers, and attendance at these seminars 16.33 shall be free. 16.34 The commissioner shall write a guide to establishing and 16.35 operating a community integrated service networkor an16.36integrated service network. The guide must provide basic 17.1 instructions for parties wishing to establish a community 17.2 integrated service networkor an integrated service network. 17.3 The guide must be provided free of charge to interested 17.4 parties. The commissioner shall update this guide when 17.5 appropriate. 17.6 The commissioner shall establish a toll-free telephone line 17.7 that interested parties may call to obtain assistance in 17.8 establishing or operating a community integrated service network 17.9or an integrated service network. 17.10 (b) The commissioner shall grant loans for organizational 17.11 and start-up expenses to entities forming community integrated 17.12 service networksor integrated service networks, or to networks 17.13 less than one year old, to the extent of any appropriation for 17.14 that purpose. The commissioner shall allocate the available 17.15 funds among applicants based upon the following criteria, as 17.16 evaluated by the commissioner within the commissioner's 17.17 discretion: 17.18 (1) the applicant's need for the loan; 17.19 (2) the likelihood that the loan will foster the formation 17.20 or growth of a network; and 17.21 (3) the likelihood of repayment. 17.22 The commissioner shall determine any necessary application 17.23 deadlines and forms and is exempt from rulemaking in doing so. 17.24 Sec. 16. Minnesota Statutes 1996, section 62N.26, is 17.25 amended to read: 17.26 62N.26 [SHARED SERVICES COOPERATIVE.] 17.27 The commissioner of health shall establish, or assist in 17.28 establishing, a shared services cooperative organized under 17.29 chapter 308A to make available administrative and legal 17.30 services, technical assistance, provider contracting and billing 17.31 services, and other services to those community integrated 17.32 service networksand integrated service networksthat choose to 17.33 participate in the cooperative. The commissioner shall provide, 17.34 to the extent funds are appropriated, start-up loans sufficient 17.35 to maintain the shared services cooperative until its operations 17.36 can be maintained by fees and contributions. The cooperative 18.1 must not be staffed, administered, or supervised by the 18.2 commissioner of health. The cooperative shall make use of 18.3 existing resources that are already available in the community, 18.4 to the extent possible. 18.5 Sec. 17. Minnesota Statutes 1996, section 62N.40, is 18.6 amended to read: 18.7 62N.40 [CHEMICAL DEPENDENCY SERVICES.] 18.8 Each community integrated service networkand integrated18.9service networkregulated under this chapter must ensure that 18.10 chemically dependent individuals have access to cost-effective 18.11 treatment options that address the specific needs of 18.12 individuals. These include, but are not limited to, the need 18.13 for: treatment that takes into account severity of illness and 18.14 comorbidities; provision of a continuum of care, including 18.15 treatment and rehabilitation programs licensed under Minnesota 18.16 Rules, parts 9530.4100 to 9530.4410 and 9530.5000 to 9530.6500; 18.17 the safety of the individual's domestic and community 18.18 environment; gender appropriate and culturally appropriate 18.19 programs; and access to appropriate social services. 18.20 Sec. 18. Minnesota Statutes 1996, section 62Q.01, 18.21 subdivision 4, is amended to read: 18.22 Subd. 4. [HEALTH PLAN COMPANY.] "Health plan company" 18.23 means: 18.24 (1) a health carrier as defined under section 62A.011, 18.25 subdivision 2; or 18.26 (2)an integrated service network as defined under section18.2762N.02, subdivision 8; or18.28(3)a community integrated service network as defined under 18.29 section 62N.02, subdivision 4a. 18.30 Sec. 19. Minnesota Statutes 1996, section 62Q.01, 18.31 subdivision 5, is amended to read: 18.32 Subd. 5. [MANAGED CARE ORGANIZATION.] "Managed care 18.33 organization" means: (1) a health maintenance organization 18.34 operating under chapter 62D; (2) a community integrated service 18.35 network as defined under section 62N.02, subdivision 18.36 4a; or (3)an integrated service network as defined under19.1section 62N.02, subdivision 8; or (4)an insurance company 19.2 licensed under chapter 60A, nonprofit health service plan 19.3 corporation operating under chapter 62C, fraternal benefit 19.4 society operating under chapter 64B, or any other health plan 19.5 company, to the extent that it covers health care services 19.6 delivered to Minnesota residents through a preferred provider 19.7 organization or a network of selected providers. 19.8 Sec. 20. Minnesota Statutes 1996, section 62Q.106, is 19.9 amended to read: 19.10 62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER.] 19.11 A complainant may at any time submit a complaint to the 19.12 appropriate commissioner to investigate. After investigating a 19.13 complaint, or reviewing a company's decision, the appropriate 19.14 commissioner may order a remedy as authorized under section 19.1562N.04,62Q.30,or chapter 45, 60A, or 62D. 19.16 Sec. 21. Minnesota Statutes 1996, section 62Q.45, 19.17 subdivision 2, is amended to read: 19.18 Subd. 2. [DEFINITION.] For purposes of this section, 19.19 "managed care organization" means: (1) a health maintenance 19.20 organization operating under chapter 62D; (2) a community 19.21 integrated service network as defined under section 62N.02, 19.22 subdivision 4a; or (3)an integrated service network as defined19.23under section 62N.02, subdivision 8; or (4)an insurance company 19.24 licensed under chapter 60A, nonprofit health service plan 19.25 corporation operating under chapter 62C, fraternal benefit 19.26 society operating under chapter 64B, or any other health plan 19.27 company, to the extent that it covers health care services 19.28 delivered to Minnesota residents through a preferred provider 19.29 organization or a network of selected providers. 19.30 Sec. 22. Minnesota Statutes 1996, section 256.9363, 19.31 subdivision 1, is amended to read: 19.32 Subdivision 1. [SELECTION OF VENDORS.] In order to contain 19.33 costs, the commissioner of human services shall select vendors 19.34 of medical care who can provide the most economical care 19.35 consistent with high medical standards and shall, where 19.36 possible, contract with organizations on a prepaid capitation 20.1 basis to provide these services. The commissioner shall 20.2 consider proposals by counties and vendors for managed care 20.3 plans which may include: prepaid capitation programs, 20.4 competitive bidding programs, or other vendor payment mechanisms 20.5 designed to provide services in an economical manner or to 20.6 control utilization, with safeguards to ensure that necessary 20.7 services are provided.Managed care plans may include20.8integrated service networks as defined in section 62N.02.20.9 Sec. 23. Minnesota Statutes 1996, section 256.9657, 20.10 subdivision 3, is amended to read: 20.11 Subd. 3. [HEALTH MAINTENANCE ORGANIZATION; COMMUNITY 20.12 INTEGRATED SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 20.13 1992, each health maintenance organization with a certificate of 20.14 authority issued by the commissioner of health under chapter 62D 20.15 and eachintegrated service network andcommunity integrated 20.16 service network licensed by the commissioner under chapter 62N 20.17 shall pay to the commissioner of human services a surcharge 20.18 equal to six-tenths of one percent of the total premium revenues 20.19 of the health maintenance organization, integrated service20.20network,or community integrated service network as reported to 20.21 the commissioner of health according to the schedule in 20.22 subdivision 4. 20.23 (b) For purposes of this subdivision, total premium revenue 20.24 means: 20.25 (1) premium revenue recognized on a prepaid basis from 20.26 individuals and groups for provision of a specified range of 20.27 health services over a defined period of time which is normally 20.28 one month, excluding premiums paid to a health maintenance 20.29 organization, integrated service network,or community 20.30 integrated service network from the Federal Employees Health 20.31 Benefit Program; 20.32 (2) premiums from Medicare wrap-around subscribers for 20.33 health benefits which supplement Medicare coverage; 20.34 (3) Medicare revenue, as a result of an arrangement between 20.35 a health maintenance organization, an integrated service20.36network,or a community integrated service network and the 21.1 health care financing administration of the federal Department 21.2 of Health and Human Services, for services to a Medicare 21.3 beneficiary; and 21.4 (4) medical assistance revenue, as a result of an 21.5 arrangement between a health maintenance organization,21.6integrated service network,or community integrated service 21.7 network and a Medicaid state agency, for services to a medical 21.8 assistance beneficiary. 21.9 If advance payments are made under clause (1) or (2) to the 21.10 health maintenance organization, integrated service network,or 21.11 community integrated service network for more than one reporting 21.12 period, the portion of the payment that has not yet been earned 21.13 must be treated as a liability. 21.14 (c) When a health maintenance organization oran integrated21.15service network orcommunity integrated service network merges 21.16 or consolidates with or is acquired by another health 21.17 maintenance organization, integrated service network,or 21.18 community integrated service network, the surviving corporation 21.19 or the new corporation shall be responsible for the annual 21.20 surcharge originally imposed on each of the entities or 21.21 corporations subject to the merger, consolidation, or 21.22 acquisition, regardless of whether one of the entities or 21.23 corporations does not retain a certificate of authority under 21.24 chapter 62D or a license under chapter 62N. 21.25 (d) Effective July 1 of each year, the surviving 21.26 corporation's or the new corporation's surcharge shall be based 21.27 on the revenues earned in the second previous calendar year by 21.28 all of the entities or corporations subject to the merger, 21.29 consolidation, or acquisition regardless of whether one of the 21.30 entities or corporations does not retain a certificate of 21.31 authority under chapter 62D or a license under chapter 62N until 21.32 the total premium revenues of the surviving corporation include 21.33 the total premium revenues of all the merged entities as 21.34 reported to the commissioner of health. 21.35 (e) When a health maintenance organization, integrated21.36service network,or community integrated service network, which 22.1 is subject to liability for the surcharge under this chapter, 22.2 transfers, assigns, sells, leases, or disposes of all or 22.3 substantially all of its property or assets, liability for the 22.4 surcharge imposed by this chapter is imposed on the transferee, 22.5 assignee, or buyer of the health maintenance organization,22.6integrated service network,or community integrated service 22.7 network. 22.8 (f) In the event a health maintenance organization,22.9integrated service network,or community integrated service 22.10 network converts its licensure to a different type of entity 22.11 subject to liability for the surcharge under this chapter, but 22.12 survives in the same or substantially similar form, the 22.13 surviving entity remains liable for the surcharge regardless of 22.14 whether one of the entities or corporations does not retain a 22.15 certificate of authority under chapter 62D or a license under 22.16 chapter 62N. 22.17 (g) The surcharge assessed to a health maintenance 22.18 organization, integrated service network,or community 22.19 integrated service network ends when the entity ceases providing 22.20 services for premiums and the cessation is not connected with a 22.21 merger, consolidation, acquisition, or conversion. 22.22 Sec. 24. [INSTRUCTION TO REVISOR.] 22.23 The revisor of statutes shall delete references to 22.24 "integrated service network," but not "community integrated 22.25 service network," wherever it appears in Minnesota Statutes and 22.26 make conforming changes as necessary. 22.27 Sec. 25. [REPEALER.] 22.28 (a) Minnesota Statutes 1996, sections 62J.041, subdivision 22.29 7; 62J.37; 62N.01, subdivision 2; 62N.02, subdivisions 4b, 4c, 22.30 6, 7, 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 62N.06; 62N.065; 22.31 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 62N.077; 62N.078; 22.32 62N.10; 62N.11; 62N.12; 62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 22.33 62N.24; 62N.26; 62N.38, subdivisions 1, 2, 3, and 4; and 62Q.41, 22.34 are repealed. 22.35 (b) Laws 1994, chapter 625, article 5, section 5, as 22.36 amended by Laws 1995, chapter 234, article 3, section 8, is 23.1 repealed. 23.2 Sec. 26. [EFFECTIVE DATE.] 23.3 Section 25, paragraph (b), is effective the day following 23.4 final enactment.