SF 328

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to human services; repealing the hospital 
  1.3             surcharge tax for medical assistance; increasing the 
  1.4             MinnesotaCare surcharge tax on hospitals; amending 
  1.5             Minnesota Statutes 1996, sections 295.50, subdivisions 
  1.6             3, 4, and by adding a subdivision; 295.51, subdivision 
  1.7             1; 295.52, subdivisions 1 and 1b; 295.53, subdivisions 
  1.8             3 and 5; 295.54, subdivision 1; 295.58; and 295.582; 
  1.9             repealing Minnesota Statutes 1996, sections 256.9657, 
  1.10            subdivision 2; and 295.54, subdivision 2. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1996, section 295.50, 
  1.13  subdivision 3, is amended to read: 
  1.14     Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
  1.15  amounts received in money or otherwise by: 
  1.16     (1) a hospital for patient services; 
  1.17     (2) a surgical center for patient services; 
  1.18     (3) a health care provider, other than a staff model health 
  1.19  carrier, for patient services; 
  1.20     (4) a wholesale drug distributor for sale or distribution 
  1.21  of legend drugs that are delivered:  (i) to a Minnesota resident 
  1.22  by a wholesale drug distributor who is a nonresident pharmacy 
  1.23  directly, by common carrier, or by mail; or (ii) in Minnesota by 
  1.24  the wholesale drug distributor, by common carrier, or by mail, 
  1.25  unless the legend drugs are delivered to another wholesale drug 
  1.26  distributor who sells legend drugs exclusively at wholesale.  
  1.27  Legend drugs do not include nutritional products as defined in 
  1.28  Minnesota Rules, part 9505.0325; 
  2.1      (5) a staff model health plan company as gross premiums for 
  2.2   enrollees, copayments, deductibles, coinsurance, and fees for 
  2.3   patient services covered under its contracts with groups and 
  2.4   enrollees; and 
  2.5      (6) a pharmacy for medical supplies, appliances, and 
  2.6   equipment medical supplies distributor for the sale, rental, 
  2.7   lease, or repair of hearing aids and equipment, or prescription 
  2.8   eyewear. 
  2.9      Sec. 2.  Minnesota Statutes 1996, section 295.50, 
  2.10  subdivision 4, is amended to read: 
  2.11     Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
  2.12  provider" means: 
  2.13     (1) a person furnishing any or all of the following goods 
  2.14  or services directly to a patient or consumer:  medical, 
  2.15  surgical, optical, visual, dental, hearing, nursing services, 
  2.16  drugs, medical supplies, medical appliances, and equipment when 
  2.17  provided by a hospital, surgical center, or health care 
  2.18  provider, laboratory, diagnostic or therapeutic services, or any 
  2.19  goods and services not listed above that qualify for 
  2.20  reimbursement under the medical assistance program provided 
  2.21  under chapter 256B.  For purposes of this clause, "directly to a 
  2.22  patient or consumer" includes goods and services provided in 
  2.23  connection with independent medical examinations under section 
  2.24  65B.56 or other examinations for purposes of litigation or 
  2.25  insurance claims; 
  2.26     (2) a staff model health plan company; or 
  2.27     (3) an ambulance service required to be licensed. 
  2.28     (b) Health care provider does not include 
  2.29  hospitals, medical supplies distributors, nursing homes licensed 
  2.30  under chapter 144A or licensed in any other jurisdiction, 
  2.31  pharmacies, surgical centers, bus and taxicab transportation, or 
  2.32  any other providers of transportation services other than 
  2.33  ambulance services required to be licensed, supervised living 
  2.34  facilities for persons with mental retardation or related 
  2.35  conditions, licensed under Minnesota Rules, parts 4665.0100 to 
  2.36  4665.9900, residential care homes licensed under chapter 144B, 
  3.1   board and lodging establishments providing only custodial 
  3.2   services that are licensed under chapter 157 and registered 
  3.3   under section 157.17 to provide supportive services or health 
  3.4   supervision services, adult foster homes as defined in Minnesota 
  3.5   Rules, part 9555.5105, day training and habilitation services 
  3.6   for adults with mental retardation and related conditions as 
  3.7   defined in section 252.41, subdivision 3, and boarding care 
  3.8   homes, as defined in Minnesota Rules, part 4655.0100. 
  3.9      Sec. 3.  Minnesota Statutes 1996, section 295.50, is 
  3.10  amended by adding a subdivision to read: 
  3.11     Subd. 7a.  [MEDICAL SUPPLIES DISTRIBUTOR.] A medical 
  3.12  supplies distributor is a person who sells, rents, leases, or 
  3.13  repairs hearing aids and equipment, or prescription eyewear. 
  3.14     Sec. 4.  Minnesota Statutes 1996, section 295.51, 
  3.15  subdivision 1, is amended to read: 
  3.16     Subdivision 1.  [BUSINESS TRANSACTIONS IN MINNESOTA.] A 
  3.17  hospital, surgical center, pharmacy medical supplies 
  3.18  distributor, or health care provider is subject to tax under 
  3.19  sections 295.50 to 295.59 if it is "transacting business in 
  3.20  Minnesota."  A hospital, surgical center, pharmacy medical 
  3.21  supplies distributor, or health care provider is transacting 
  3.22  business in Minnesota if it maintains contacts with or presence 
  3.23  in the state of Minnesota sufficient to permit taxation of gross 
  3.24  revenues received for patient services under the United States 
  3.25  Constitution. 
  3.26     Sec. 5.  Minnesota Statutes 1996, section 295.52, 
  3.27  subdivision 1, is amended to read: 
  3.28     Subdivision 1.  [HOSPITAL TAX.] A tax is imposed on each 
  3.29  hospital equal to two 3.88 percent of its gross revenues. 
  3.30     Sec. 6.  Minnesota Statutes 1996, section 295.52, 
  3.31  subdivision 1b, is amended to read: 
  3.32     Subd. 1b.  [PHARMACY MEDICAL SUPPLIES DISTRIBUTOR TAX.] A 
  3.33  tax is imposed on each pharmacy medical supplies distributor 
  3.34  equal to two percent of its gross revenues. 
  3.35     Sec. 7.  Minnesota Statutes 1996, section 295.53, 
  3.36  subdivision 3, is amended to read: 
  4.1      Subd. 3.  [SEPARATE STATEMENT OF TAX.] A hospital, surgical 
  4.2   center, pharmacy medical supplies distributor, or health care 
  4.3   provider must not state the tax obligation under section 295.52 
  4.4   in a deceptive or misleading manner.  It must not separately 
  4.5   state tax obligations on bills provided to patients, consumers, 
  4.6   or other payers when the amount received for the services or 
  4.7   goods is not subject to tax.  
  4.8      Pharmacies that separately state the tax obligations on 
  4.9   bills provided to consumers or to other payers who purchase 
  4.10  legend drugs may state the tax obligation as two percent of the 
  4.11  wholesale price of the legend drugs.  Pharmacies must not state 
  4.12  the tax obligation as two percent of the retail price.  
  4.13     Whenever the commissioner determines that a person has 
  4.14  engaged in any act or practice constituting a violation of this 
  4.15  subdivision, the commissioner may bring an action in the name of 
  4.16  the state in the district court of the appropriate county to 
  4.17  enjoin the act or practice and to enforce compliance with this 
  4.18  subdivision, or the commissioner may refer the matter to the 
  4.19  attorney general or the county attorney of the appropriate 
  4.20  county.  Upon a proper showing, a permanent or temporary 
  4.21  injunction, restraining order, or other appropriate relief must 
  4.22  be granted.  
  4.23     Sec. 8.  Minnesota Statutes 1996, section 295.53, 
  4.24  subdivision 5, is amended to read: 
  4.25     Subd. 5.  [EXEMPTIONS FOR PHARMACIES MEDICAL SUPPLIES 
  4.26  DISTRIBUTORS.] (a) Pharmacies Medical supplies distributors may 
  4.27  exclude from their gross revenues subject to tax payments 
  4.28  for medical supplies, appliances, and devices hearing aids and 
  4.29  equipment, and prescription eyewear that are exempt under 
  4.30  subdivision 1, clauses (1), (2), (4), (5), (7), (8), and (13). 
  4.31     (b) Pharmacies Medical supplies distributors may exclude 
  4.32  from their gross revenues subject to tax payments received 
  4.33  for medical supplies, appliances, and equipment hearing aids and 
  4.34  equipment, and prescription eyewear delivered outside of 
  4.35  Minnesota. 
  4.36     Sec. 9.  Minnesota Statutes 1996, section 295.54, 
  5.1   subdivision 1, is amended to read: 
  5.2      Subdivision 1.  [TAXES PAID TO ANOTHER STATE.] A hospital, 
  5.3   surgical center, pharmacy medical supplies distributor, or 
  5.4   health care provider that has paid taxes to another state or 
  5.5   province or territory of Canada measured by gross revenues and 
  5.6   is subject to tax under sections 295.52 to 295.59 on the same 
  5.7   gross revenues is entitled to a credit for the tax legally due 
  5.8   and paid to another state or province or territory of Canada to 
  5.9   the extent of the lesser of (1) the tax actually paid to the 
  5.10  other state or province or territory of Canada, or (2) the 
  5.11  amount of tax imposed by Minnesota on the gross revenues subject 
  5.12  to tax in the other taxing jurisdictions. 
  5.13     Sec. 10.  Minnesota Statutes 1996, section 295.58, is 
  5.14  amended to read: 
  5.15     295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.] 
  5.16     The commissioner shall deposit all 48.4536 percent of the 
  5.17  hospital tax revenues, including penalties and interest, derived 
  5.18  from the in the general fund.  The commissioner shall deposit 
  5.19  remaining revenues, including penalties and interest, of the 
  5.20  hospital tax and all other taxes imposed by sections 295.50 
  5.21  to 295.57 295.59 and from the insurance premiums tax on health 
  5.22  maintenance organizations, community integrated service 
  5.23  networks, integrated service networks, and nonprofit health 
  5.24  service plan corporations in the health care access fund in the 
  5.25  state treasury.  Refunds of 48.4536 percent of overpayments of 
  5.26  the hospital tax must be paid from the health care access fund 
  5.27  in the state treasury general fund.  Refunds of overpayments of 
  5.28  remaining revenues of the hospital tax and the other taxes 
  5.29  imposed by sections 295.50 to 295.59 must be paid from the 
  5.30  health care access fund in the state treasury.  There is 
  5.31  annually appropriated from the health care access fund and the 
  5.32  general fund to the commissioner of revenue the amount necessary 
  5.33  to make any refunds required under section 295.54 this chapter. 
  5.34     Sec. 11.  Minnesota Statutes 1996, section 295.582, is 
  5.35  amended to read: 
  5.36     295.582 [AUTHORITY.] 
  6.1      (a) A hospital, surgical center, pharmacy medical supplies 
  6.2   distributor, or health care provider that is subject to a tax 
  6.3   under section 295.52, or a pharmacy that has paid additional 
  6.4   expense transferred under this section by a wholesale drug 
  6.5   distributor, may transfer additional expense generated by 
  6.6   section 295.52 obligations on to all third-party contracts for 
  6.7   the purchase of health care services on behalf of a patient or 
  6.8   consumer.  The additional expense transferred to the third-party 
  6.9   purchaser must not exceed two percent of the gross revenues 
  6.10  received under the third-party contract, and two percent of 
  6.11  copayments and deductibles paid by the individual patient or 
  6.12  consumer.  The expense must not be generated on revenues derived 
  6.13  from payments that are excluded from the tax under section 
  6.14  295.53.  All third-party purchasers of health care services 
  6.15  including, but not limited to, third-party purchasers regulated 
  6.16  under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, 
  6.17  or 79A, or under section 471.61 or 471.617, must pay the 
  6.18  transferred expense in addition to any payments due under 
  6.19  existing contracts with the hospital, surgical center, pharmacy 
  6.20  medical supplies distributor, or health care provider, to the 
  6.21  extent allowed under federal law.  A third-party purchaser of 
  6.22  health care services includes, but is not limited to, a health 
  6.23  carrier, integrated service network, or community integrated 
  6.24  service network that pays for health care services on behalf of 
  6.25  patients or that reimburses, indemnifies, compensates, or 
  6.26  otherwise insures patients for health care services.  A 
  6.27  third-party purchaser shall comply with this section regardless 
  6.28  of whether the third-party purchaser is a for-profit, 
  6.29  not-for-profit, or nonprofit entity.  A wholesale drug 
  6.30  distributor may transfer additional expense generated by section 
  6.31  295.52 obligations to entities that purchase from the 
  6.32  wholesaler, and the entities must pay the additional expense.  
  6.33  Nothing in this section limits the ability of a hospital, 
  6.34  surgical center, pharmacy medical supplies distributor, 
  6.35  wholesale drug distributor, or health care provider to recover 
  6.36  all or part of the section 295.52 obligation by other methods, 
  7.1   including increasing fees or charges. 
  7.2      (b) Each third-party purchaser regulated under any chapter 
  7.3   cited in paragraph (a) shall include with its annual renewal for 
  7.4   certification of authority or licensure documentation indicating 
  7.5   compliance with paragraph (a).  If the commissioner responsible 
  7.6   for regulating the third-party purchaser finds at any time that 
  7.7   the third-party purchaser has not complied with paragraph (a), 
  7.8   the commissioner may by order fine or censure the third-party 
  7.9   purchaser or revoke or suspend the certificate of authority or 
  7.10  license of the third-party purchaser to do business in this 
  7.11  state.  The third-party purchaser may appeal the commissioner's 
  7.12  order through a contested case hearing in accordance with 
  7.13  chapter 14. 
  7.14     Sec. 12.  [REPEALER.] 
  7.15     (a) Minnesota Statutes 1996, section 256.9657, subdivision 
  7.16  2, is repealed.  
  7.17     (b) Minnesota Statutes 1996, section 295.54, subdivision 2, 
  7.18  is repealed. 
  7.19     Sec. 13.  [EFFECTIVE DATE.] 
  7.20     Sections 1 to 4, 6 to 9, 11, and 12, paragraph (b), are 
  7.21  effective for gross revenues received after December 31, 1997. 
  7.22     Sections 5 and 10 are effective for gross revenues received 
  7.23  on or after June 1, 1997. 
  7.24     Section 12, paragraph (a), is effective July 1, 1997.  All 
  7.25  surcharge amounts billed and due prior to July 1, 1997, but 
  7.26  remaining unpaid, are liabilities to be collected by the 
  7.27  commissioner of human services.  Interest and penalties continue 
  7.28  to accrue on unpaid amounts.