1st Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to insurance; revising certain provisions 1.3 involving state regulation of private health coverage; 1.4 transferring certain regulatory control; establishing 1.5 requirements for managed care plans; amending 1.6 Minnesota Statutes 2000, sections 62A.021, subdivision 1.7 1; 62A.041, subdivisions 1, 2; 62A.042; 62A.043, 1.8 subdivision 1; 62A.105; 62A.14; 62A.149, subdivision 1.9 1; 62A.15, subdivision 1; 62A.152, subdivision 1; 1.10 62A.153; 62A.20; 62A.21; 62A.615; 62A.616; 62A.65, 1.11 subdivision 5; 62D.02, subdivisions 3, 8; 62D.12, 1.12 subdivisions 1, 1a; 62D.15, subdivision 1; 62D.24; 1.13 62E.05, subdivision 2; 62E.11, subdivision 13; 62E.14, 1.14 subdivision 6; 62E.16; 62J.041, subdivision 4; 1.15 62J.701; 62J.74, subdivisions 1, 2; 62J.75; 62L.02, 1.16 subdivision 8; 62L.05, subdivision 12; 62L.08, 1.17 subdivisions 10, 11; 62L.09, subdivision 3; 62L.10, 1.18 subdivision 4; 62L.11, subdivision 2; 62L.12, 1.19 subdivision 2; 62M.11; 62M.16; 62N.02, subdivision 4; 1.20 62N.26; 62Q.01, subdivision 2; 62Q.03, subdivision 5a; 1.21 62Q.07; 62Q.106; 62Q.22, subdivisions 2, 6, 7; 62Q.32; 1.22 62Q.33, subdivision 2; 62Q.49, subdivision 2; 62Q.51, 1.23 subdivision 3; 62Q.525, subdivision 3; 62Q.68, 1.24 subdivision 1; 62Q.69, subdivisions 2, 3; 62Q.71; 1.25 62Q.72; 62Q.73, subdivisions 3, 4, 5, 6; 62R.04, 1.26 subdivision 5; 62R.06, subdivision 1; 62T.01, 1.27 subdivision 4; 256B.692, subdivisions 2, 7; 257.34, 1.28 subdivision 1; proposing coding for new law as 1.29 Minnesota Statutes, chapter 62U; repealing Minnesota 1.30 Statutes 2000, sections 62A.049; 62A.21, subdivision 1.31 3; 62C.14, subdivisions 5, 5a, 5b, 14; 62C.142; 1.32 62D.09, subdivision 3; 62D.101; 62D.105; 62D.12, 1.33 subdivision 19; 62D.123, subdivisions 2, 3, 4; 1.34 62D.124; 62Q.095; 62Q.10; 62Q.45; Minnesota Rules, 1.35 parts 4685.0801, subpart 7; 4685.1010; 4685.1105; 1.36 4685.1110; 4685.1115; 4685.1120; 4685.1125; 4685.1130; 1.37 4685.1300; 4685.1900; 4685.2000; 4685.2200, subpart 3. 1.38 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.39 ARTICLE 1 1.40 CONSISTENT REGULATION OF MANAGED CARE PLANS 1.41 Section 1. [62U.01] [DEFINITIONS.] 2.1 Subdivision 1. [APPLICABILITY.] For purposes of this 2.2 chapter, the terms defined in this section have the meaning 2.3 given. 2.4 Subd. 2. [COMMISSIONER.] "Commissioner" means the 2.5 commissioner of commerce. 2.6 Subd. 3. [COPAYMENT.] "Copayment" means an amount an 2.7 enrollee must pay to receive a specific service that is not 2.8 fully prepaid. Copayment includes coinsurance. 2.9 Subd. 4. [DEDUCTIBLE.] "Deductible" means the amount an 2.10 enrollee is responsible to pay out-of-pocket before the managed 2.11 care organization begins to pay the costs associated with 2.12 treatment. 2.13 Subd. 5. [ENROLLEE.] "Enrollee" means a natural person 2.14 covered by a health plan and includes an insured, policyholder, 2.15 subscriber, contract holder, member, certificate holder, or any 2.16 other natural person covered by a health plan, whether as a 2.17 spouse, dependent, former dependent, or otherwise. 2.18 Subd. 6. [EVIDENCE OF COVERAGE.] "Evidence of coverage" 2.19 means a statement issued to an enrollee by the health plan 2.20 company or by the group policyholder or group contract holder 2.21 that sets out the coverage and other rights to which the 2.22 enrollee is entitled under the health benefit plan. 2.23 Subd. 7. [FACILITY.] "Facility" means an institution 2.24 providing health care services or a health care setting, 2.25 including but not limited to a hospital or other licensed 2.26 inpatient center; an ambulatory surgical or treatment center; a 2.27 skilled nursing center; a residential treatment center; a 2.28 diagnostic, laboratory, or imaging center; or a rehabilitation 2.29 or other therapeutic health setting. 2.30 Subd. 8. [HEALTH PLAN.] "Health plan" means a policy, 2.31 contract, certificate, or agreement offered or issued by a 2.32 health plan company to provide, deliver, arrange for, pay for, 2.33 or reimburse any of the costs of health care services. Health 2.34 plan includes a policy or certificate of accident and sickness 2.35 insurance as defined in section 62A.01 offered by an insurance 2.36 company licensed under chapter 60A; a subscriber contract or 3.1 certificate offered by a nonprofit health service plan 3.2 corporation operating under chapter 62C; a health maintenance 3.3 contract or certificate offered by a health maintenance 3.4 organization operating under chapter 62D; health coverage 3.5 offered by a joint self-insurance employee health plan operating 3.6 under chapter 62H; or a health benefit certificate offered by a 3.7 fraternal benefit society operating under chapter 64B. Health 3.8 plan means individual and group coverage, unless otherwise 3.9 specified. Health plan does not include coverage that is: 3.10 (1) limited to disability or income protection coverage; 3.11 (2) automobile medical payment coverage; 3.12 (3) supplemental to liability insurance; 3.13 (4) designed solely to provide payments on a per diem, 3.14 fixed indemnity, or non-expense-incurred basis; 3.15 (5) credit accident and health insurance as defined in 3.16 section 62B.02; 3.17 (6) designed solely to provide dental or vision care; 3.18 (7) blanket accident and sickness insurance as defined in 3.19 section 62A.11; 3.20 (8) accident-only coverage; 3.21 (9) a long-term care policy as defined in section 62A.46 or 3.22 long-term care insurance as defined in 62S.01; 3.23 (10) issued as a supplement to Medicare, as defined in 3.24 sections 62A.31 to 62A.44, or policies, contracts, or 3.25 certificates that supplement Medicare issued by health 3.26 maintenance organizations or those policies, contracts, or 3.27 certificates governed by section 1833 or 1876 of the federal 3.28 Social Security Act, United States Code, title 42, sections 3.29 1395l and 1395mm, as amended; 3.30 (11) workers' compensation insurance; or 3.31 (12) issued solely as a companion to a health maintenance 3.32 contract as described in section 62D.12, subdivision 1a, so long 3.33 as the health maintenance contract meets the definition of a 3.34 health plan. 3.35 Subd. 9. [HEALTH PLAN COMPANY.] "Health plan company" 3.36 means an entity subject to the insurance laws and regulations of 4.1 this state, or subject to the jurisdiction of the commissioner, 4.2 that contracts or offers to contract to provide, deliver, 4.3 arrange for, pay for, or reimburse any of the costs of health 4.4 care services, including an insurance company licensed under 4.5 chapter 60A; a nonprofit health service plan corporation 4.6 operating under chapter 62C; a health maintenance organization 4.7 operating under chapter 62D; a joint self-insurance employee 4.8 health plan that is subject to chapter 62H; a community 4.9 integrated service network as defined in section 62N.02, 4.10 subdivision 4a; a fraternal benefit society operating under 4.11 chapter 64B; or any other entity providing a plan of health 4.12 insurance, health benefits, or health services. "Health plan 4.13 company" does not include an employer with respect to a 4.14 self-insured employee health benefit plan organized and offered 4.15 by the employer to its employees under the Federal Employee 4.16 Retirement Income Security Act of 1974, and this chapter does 4.17 not apply to those plans. 4.18 Subd. 10. [HEALTH CARE PROFESSIONAL.] "Health care 4.19 professional" means a physician or other health care 4.20 practitioner licensed, accredited, or certified to perform 4.21 specified health care services consistent with state law. 4.22 Subd. 11. [HEALTH CARE PROVIDER OR PROVIDER.] "Health care 4.23 provider" or "provider" means a health care professional or 4.24 facility. 4.25 Subd. 12. [HEALTH CARE SERVICES.] "Health care services" 4.26 means services for the diagnosis, prevention, treatment, cure, 4.27 or relief of a health condition, illness, injury, or disease. 4.28 Subd. 13. [INDIVIDUAL CONTRACT.] "Individual contract" 4.29 means a contract for health care services issued to and covering 4.30 an individual. The individual contract may include dependents 4.31 of the subscriber. 4.32 Subd. 14. [INSOLVENT OR INSOLVENCY.] "Insolvent" or 4.33 "insolvency" means that a managed care organization has been 4.34 declared insolvent and placed under an order of liquidation by a 4.35 court of competent jurisdiction. 4.36 Subd. 15. [MANAGED CARE PLAN.] "Managed care plan" means a 5.1 health plan that either requires an enrollee to use or creates 5.2 incentives, including financial incentives, for an enrollee to 5.3 use health care providers managed, owned, or employed by or 5.4 under contract with the health plan company. A health plan is 5.5 not a managed care plan if the financial incentive to use 5.6 certain health care providers is solely the difference in the 5.7 obligation of the enrollee to pay for the balance of charges 5.8 after the health plan company has paid its usual and customary 5.9 charges. 5.10 Subd. 16. [PARTICIPATING PROVIDER.] "Participating 5.11 provider" means a provider that, under an express contract with 5.12 a health plan company or with its contractor or subcontractor, 5.13 has agreed to provide health care services to enrollees with an 5.14 expectation of receiving payment, other than copayments or 5.15 deductibles, directly or indirectly from the health plan company. 5.16 Subd. 17. [PERSON.] "Person" means an individual, a 5.17 corporation, a partnership, an association, a joint venture, a 5.18 joint stock company, a trust, an unincorporated organization, 5.19 any similar entity, or a combination of the foregoing. 5.20 Sec. 2. [62U.02] [APPLICABILITY AND SCOPE.] 5.21 (a) This chapter applies to all health plan companies 5.22 offering, selling, issuing, or renewing a managed care plan in 5.23 this state or to cover a resident of this state, except that 5.24 this chapter does not apply to health plan companies whose 5.25 annual Minnesota private health premium revenues are less than 5.26 five percent of the total annual Minnesota private health 5.27 premium revenues, as measured by the assessment base of the 5.28 Minnesota comprehensive health association, unless the health 5.29 plan company requests in writing that this chapter apply to it. 5.30 For purposes of this percentage calculation, a health plan 5.31 company's premiums include the Minnesota private health premium 5.32 revenues of its affiliates. 5.33 (b) When this chapter states that a health plan company or 5.34 a managed care plan must comply with a referenced statute or 5.35 rule that by its terms applies only to a specific type of health 5.36 plan company or health plan, the requirement of this chapter is 6.1 that all health plan companies or managed care plans referenced 6.2 in the requirement of this chapter must comply with the 6.3 referenced statute or rule. 6.4 Sec. 3. [62U.03] [APPROVAL OF MANAGED CARE PLANS.] 6.5 (a) No person shall offer, issue, sell, or renew a managed 6.6 care plan in this state or to cover a resident of this state, 6.7 without first obtaining approval to do so from the commissioner 6.8 under this section. Existing managed care plans are deemed 6.9 approved if the health plan company has previously demonstrated 6.10 to either the commissioner of health or the commissioner of 6.11 commerce that the managed care plan complies with this chapter. 6.12 (b) A health plan company may apply to the commissioner 6.13 under this section for approval of a managed care plan. 6.14 (c) The commissioner shall approve an application from a 6.15 health plan company made under this section if the commissioner 6.16 determines, based upon the application and any other information 6.17 available to the commissioner, that the applicant intends to and 6.18 has the capacity to fully comply with this chapter and with all 6.19 other laws of this state that apply to the health plan company 6.20 in connection with the managed care plan. 6.21 (d) The commissioner shall approve, disapprove, or approve 6.22 conditional upon proposed modification, an application no later 6.23 than 60 days after receipt by the commissioner of a completed 6.24 application, including all supporting materials required by law 6.25 or requested by the commissioner. 6.26 Sec. 4. [62U.04] [APPLICATION FORM AND REQUIREMENTS; OTHER 6.27 LAW.] 6.28 (a) The commissioner may prescribe an application form for 6.29 approval of a managed care plan and may specify the items 6.30 required to be submitted in connection with the application 6.31 consistent with the provisions of this chapter. 6.32 (b) The required submissions must include materials 6.33 sufficient to permit the commissioner to determine that the 6.34 proposed managed care plan fully complies with this chapter. 6.35 (c) This section does not limit requirements provided 6.36 elsewhere in law that apply in connection with approval of a 7.1 managed care plan. 7.2 Sec. 5. [62U.05] [COVERED HEALTH CARE SERVICES.] 7.3 Subdivision 1. [REQUIRED COVERAGE.] (a) A group managed 7.4 care plan must cover at least the health care services included 7.5 in the definition of comprehensive health maintenance services 7.6 under section 62D.02, subdivision 7, and Minnesota Rules, part 7.7 4685.0700, subparts 1 and 2. 7.8 (b) An individual managed care plan must comply with the 7.9 benefit requirements that apply to an insurance company licensed 7.10 under chapter 60A and need not comply with additional or 7.11 different benefit requirements that apply to companies licensed 7.12 under chapter 62C, 62D, or 62N. 7.13 (c) A managed care plan must not use a definition of 7.14 "medically necessary," "medical necessity," or similar term that 7.15 is more restrictive than the definition of "medically necessary 7.16 care" provided in Minnesota Rules, part 4685.0100, subpart 9b. 7.17 Subd. 2. [EXCEPTIONS.] (a) Exclusions of and limitations 7.18 on the services required under subdivision 1 are permitted 7.19 subject to prior written approval by the commissioner based on 7.20 the standards in paragraphs (b) to (d). 7.21 (b) Exclusions and limitations based on services being 7.22 experimental, investigative, or unproven must not be more 7.23 restrictive than provided in Minnesota Rules, part 4685.0700, 7.24 subpart 4, item F. 7.25 (c) Exclusions and limitations based on use of a drug 7.26 formulary must not be more restrictive than provided in 7.27 Minnesota Rules, part 4685.0700, subpart 3, item A. 7.28 (d) Exclusions and limitations must not be unjust, unfair, 7.29 or inequitable, as provided in section 62A.02, subdivision 3, or 7.30 have the effect of substantially eliminating or restricting 7.31 services otherwise covered in the plan. 7.32 (e) Exclusions of and limitations on the services required 7.33 under subdivision 1 are permitted at least to the extent 7.34 described in Minnesota Rules, part 4685.0700, subparts 3 and 4. 7.35 Variations on those exclusions and limitations may be requested 7.36 under paragraph (a). 8.1 Subd. 3. [OTHER STATE LAW.] (a) A managed care plan must 8.2 cover all health care services, in addition to those required 8.3 under subdivision 1, that are required under other state law. 8.4 (b) A managed care plan must comply with sections 62D.102 8.5 and 62D.103. 8.6 (c) A managed care plan need not comply with this section 8.7 to the extent permitted under chapter 62L with respect to 8.8 managed care plans offered to small employers in compliance with 8.9 section 62L.05 or 62L.055. 8.10 Sec. 6. [62U.06] [DISPUTE RESOLUTION AND UTILIZATION 8.11 REVIEW.] 8.12 (a) A health plan company must, with respect to its managed 8.13 care plans, comply with chapter 62M, sections 62Q.68 to 62Q.73, 8.14 and all other related applicable state laws. 8.15 (b) A health plan company must not deny or limit coverage 8.16 of a service that an enrollee has already received solely on the 8.17 basis of the lack of prior authorization or second opinion, to 8.18 the extent that the service would otherwise have been covered 8.19 under the enrollee's health plan by the health plan company had 8.20 prior authorization or a second opinion been obtained. 8.21 Sec. 7. [62U.07] [EVIDENCE OF COVERAGE.] 8.22 A health plan company shall, in connection with a managed 8.23 care plan, comply with section 62D.07. 8.24 Sec. 8. [62U.08] [INFORMATION TO ENROLLEES.] 8.25 A health plan company shall, in connection with a managed 8.26 care plan, comply with section 62D.09, subdivisions 1, 2, and 4 8.27 to 8. 8.28 Sec. 9. [62U.09] [ENROLLEES HELD HARMLESS.] 8.29 A health plan company shall, in connection with a managed 8.30 care plan, comply with section 62D.12, subdivision 5. 8.31 Sec. 10. [62U.10] [ENFORCEMENT.] 8.32 The commissioner shall enforce this chapter under sections 8.33 60A.031; 60A.052; 62D.14, subdivisions 3, 4a, and 5; and 62D.15 8.34 to 62D.17. Administrative penalties for violations of this 8.35 chapter are as provided in section 62D.17. 8.36 Sec. 11. [62U.11] [DELEGATION OF RESPONSIBILITY AND 9.1 SHARING OF RISKS.] 9.2 Subdivision 1. [APPROVAL OF DELEGATION AGREEMENT.] (a) 9.3 Before delegating any of its obligations or responsibilities 9.4 under a managed care plan or under this chapter to another 9.5 entity, a health plan company shall file with the commissioner a 9.6 copy of the form of the delegation agreement for written 9.7 approval. 9.8 (b) The delegation agreement must: 9.9 (1) provide for regular monitoring of the delegatee's 9.10 performance by the health plan company; 9.11 (2) permit periodic and other audits of the delegatee by 9.12 the commissioner with respect to this chapter; and 9.13 (3) provide that the delegated functions must be carried 9.14 out in a manner consistent with state law. 9.15 (c) The health plan company retains ultimate responsibility 9.16 for performance of the delegated functions, and the delegatee is 9.17 not subject to the enforcement authority of the commissioner. 9.18 Subd. 2. [PROVIDER AGREEMENTS.] (a) An agreement between a 9.19 health plan company and a provider in which the provider agrees 9.20 to undertake specified responsibilities under this chapter, in 9.21 connection with a managed care plan, is subject to subdivision 1. 9.22 (b) A health plan company, in connection with a managed 9.23 care plan, may enter into an agreement under subdivision 1 with 9.24 a provider, which agreement structures payments to the provider 9.25 based on the efficient provision of services or as incentives to 9.26 provide quality care. 9.27 (c) Assumption of risk by a provider under this section is 9.28 not insurance for purposes of section 60A.02, subdivision 3. 9.29 Sec. 12. [62U.12] [SUBROGATION AND COORDINATION OF 9.30 BENEFITS.] 9.31 (a) A managed care plan may contain subrogation provisions 9.32 as permitted and limited under sections 62A.095 and 62A.096 and 9.33 Minnesota Rules, part 4685.0900. 9.34 (b) A health plan company, in connection with a group 9.35 managed care plan, must comply with Minnesota Rules, chapter 9.36 2742, relating to coordination of benefits. The health plan 10.1 company must not refuse to provide covered health services on 10.2 the basis that it has the right to coordinate benefits. The 10.3 services must be provided prior to coordination. 10.4 Sec. 13. [62U.13] [QUALITY ASSESSMENT AND PERFORMANCE 10.5 IMPROVEMENT.] 10.6 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 10.7 section, the terms defined in this subdivision have the meanings 10.8 given. 10.9 (b) "Outcome or outcome of care" means the end result of 10.10 health care or a change in patient health status. Examples of 10.11 outcomes of care include a hospital admission or readmission, an 10.12 advanced stage of a disease, recovery, alleviation of symptoms, 10.13 or death. 10.14 (c) "Performance improvement" means the effort to improve 10.15 the timeliness, processes, and outcomes related to the provision 10.16 of care within the health plan company. 10.17 (d) "Quality assessment" means the measurement and 10.18 evaluation of the quality and outcomes of care provided to 10.19 individuals, groups, or populations. 10.20 Subd. 2. [HEALTH PLAN COMPANY REQUIREMENTS.] A health plan 10.21 company that provides managed care plans shall develop and 10.22 maintain a quality assessment and performance improvement 10.23 program, which includes the infrastructure and disclosure 10.24 systems and activities necessary to measure and improve the 10.25 quality of health care services provided to covered persons 10.26 under the managed care plan. A health plan company shall: 10.27 (1) establish a program designed to assess the quality of 10.28 health care provided to covered persons and capable of 10.29 identifying opportunities to improve care. The program must 10.30 include systematic collection, analysis, and reporting of 10.31 relevant data. The program must be structured to identify 10.32 practices that result in improved outcomes, identify problematic 10.33 utilization patterns, identify those providers that may be 10.34 responsible for either exemplary or problematic patterns, and 10.35 foster an environment of continuous quality improvement; 10.36 (2) file a written description of the quality assessment 11.1 and performance improvement program with the commissioner, which 11.2 must include a signed certification by a corporate officer of 11.3 the health plan company that the filing meets the requirements 11.4 of this section; 11.5 (3) communicate findings from its quality assessment and 11.6 performance improvement program activities at least annually to 11.7 applicable regulatory agencies, providers, purchasers, and 11.8 consumers, as provided in subdivision 5; 11.9 (4) on a continuing basis, use findings from its quality 11.10 assessment and performance improvement program activities to 11.11 work with participating providers and other staff to improve the 11.12 health care delivered to covered persons; 11.13 (5) report to the appropriate licensing authority any 11.14 persistent pattern of problematic care provided by a provider 11.15 consistent with sections 147.111, 147.121, 148.263, 148.264, and 11.16 other similar laws applicable to credentialed providers; 11.17 (6) design, measure, assess, and improve the processes and 11.18 outcomes of care as identified in the health plan company's 11.19 quality assessment and performance improvement program that is 11.20 filed with the commissioner, meets all requirements of 11.21 subdivision 3, and is otherwise consistent with this section; 11.22 (7) ensure that participating providers have the 11.23 opportunity to participate in developing, implementing, and 11.24 evaluating the quality assessment and performance improvement 11.25 program; and 11.26 (8) include information from covered persons in the 11.27 development of the quality assessment and performance 11.28 improvement program, including satisfaction survey results and 11.29 other general comments. 11.30 Subd. 3. [QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT 11.31 PROGRAM REQUIREMENTS.] (a) A quality assessment and performance 11.32 improvement program required under subdivision 2 must include a 11.33 written statement, including a description of data collection 11.34 activities, information systems, and performance improvement 11.35 activities, and an annual effectiveness review of the quality 11.36 assessment and performance improvement program. 12.1 (b) A quality assessment and performance improvement 12.2 program required under subdivision 2 must include a written plan 12.3 that describes how the health plan company intends to: 12.4 (1) analyze both processes and outcomes of care, including 12.5 focused review of individual cases as appropriate, to discern 12.6 the causes of variation; 12.7 (2) identify topics to be reviewed by the quality 12.8 assessment and performance improvement program each year. In 12.9 determining topics for review, the health plan company shall 12.10 consider problems; potential problems; areas with potential for 12.11 improvements in care; practices and diagnoses that affect a 12.12 substantial number of the plan's covered persons or that could 12.13 place covered persons at serious risk; and illnesses associated 12.14 with increased mortality and morbidity. This clause must not be 12.15 construed to require a health carrier to review every disease, 12.16 illness, and condition that may affect an enrollee of a managed 12.17 care plan offered by the health plan company; 12.18 (3) use a range of appropriate methods to analyze quality, 12.19 including: 12.20 (i) collection and analysis of information on 12.21 overutilization and underutilization of services; 12.22 (ii) evaluation of courses of treatment and outcomes of 12.23 health care, including health status measures, consistent with 12.24 reference databases such as current medical research, knowledge, 12.25 standards, and practice guidelines; 12.26 (iii) collection and analysis of information specific to a 12.27 covered person or provider, gathered from multiple sources 12.28 including but not limited to utilization management, claims 12.29 processing, and documentation of satisfaction surveys; and 12.30 (iv) ongoing evaluation of enrollee complaints that are 12.31 related to quality of and access to care. The data on 12.32 complaints related to quality of and access to care must be 12.33 evaluated by the health plan company at least quarterly; 12.34 (4) compare program findings with past performance, as 12.35 appropriate, and with internal goals and external standards, 12.36 when available, such as those standards developed by recognized 13.1 state and national accreditation organizations; 13.2 (5) establish and implement policies and procedures for 13.3 provider selection, credentialing, and recredentialing that, at 13.4 a minimum, are consistent with accepted community standards; 13.5 (6) measure the performance of participating providers and 13.6 conduct peer review activities, such as: 13.7 (i) identifying practices that do not, at a minimum, meet 13.8 accepted community standards; and 13.9 (ii) taking appropriate action to ensure that participating 13.10 providers meet accepted community standards; 13.11 (7) distribute information and educate providers regarding 13.12 accepted standards, treatment protocols, and practice 13.13 guidelines; 13.14 (8) support and promote population-based health quality 13.15 assessment and improvement through communication with public 13.16 health agencies and participation in regional or statewide 13.17 health quality assessment and improvement activities, including 13.18 the communication and participation required under section 13.19 62Q.075; and 13.20 (9) identify, document, and implement performance 13.21 improvement strategies related to program findings, including: 13.22 (i) measurable objectives for each action, including the 13.23 degree of expected change in persons or situations; 13.24 (ii) time frames for performance improvement activities; 13.25 (iii) persons responsible for implementation of performance 13.26 improvement strategies; and 13.27 (iv) a schedule to monitor the effectiveness of the 13.28 performance improvement strategies. 13.29 Subd. 4. [AUDITS.] The commissioner shall conduct routine 13.30 audits of quality assessment and performance improvement 13.31 programs to ensure compliance with this section. If an 13.32 independent organization has conducted an audit of the quality 13.33 assessment and performance improvement program of the health 13.34 plan company: 13.35 (1) the commissioner may accept the independent audit and 13.36 require no further audit if the results of the independent audit 14.1 show that the quality assessment and performance improvement 14.2 program of the health plan company meets the requirements of 14.3 this section; 14.4 (2) the commissioner may accept the independent audit and 14.5 limit further auditing if the results of the independent audit 14.6 show that the quality assessment and performance improvement 14.7 program of the health plan company partially meets the 14.8 requirements of this section. Auditing by the commissioner must 14.9 be limited to program areas where fulfillment of the 14.10 requirements of this section has not been demonstrated; 14.11 (3) the health plan company must demonstrate to the 14.12 commissioner that the independent organization that conducted 14.13 the audit is qualified and that the results of the audit 14.14 demonstrate that the quality assessment and performance 14.15 improvement program of the health plan company partially or 14.16 fully meets the requirements of this section; and 14.17 (4) if the commissioner has partially or fully accepted an 14.18 independent audit of the quality assessment and performance 14.19 improvement program of the health plan company, the commissioner 14.20 may use the finding of a deficiency with regard to statutes or 14.21 rules by an independent audit as the basis for a targeted audit 14.22 or enforcement action. 14.23 Subd. 5. [REPORTING AND DISCLOSURE.] (a) A health plan 14.24 company shall document and communicate information about its 14.25 quality assessment and performance improvement program according 14.26 to this subdivision. The health plan company shall: 14.27 (1) include a summary of its quality assessment and 14.28 performance improvement program in marketing materials; 14.29 (2) include a description of its quality assessment and 14.30 performance improvement program and a statement of patient 14.31 rights and responsibilities with respect to the program in the 14.32 certificate of coverage or handbook provided to newly enrolled 14.33 enrollees; 14.34 (3) make available annually to providers and enrollees 14.35 findings from its quality assessment and performance improvement 14.36 program and information about its progress in meeting internal 15.1 goals and external standards, when available. The reports shall 15.2 include a description of the methods used to assess each 15.3 specific area and an explanation of how any assumptions affect 15.4 the findings; and 15.5 (4) submit annually to the commissioner a comprehensive 15.6 summary of the activities required by subdivision 3 and the 15.7 findings described in clause (3). 15.8 (b) By July 1 of each year, a health plan company shall 15.9 file a report with the commissioner of health, without a filing 15.10 fee. The commissioner of health may specify the audit 15.11 procedures, format, and content of the report including 15.12 identification of the specific measures related to the outcomes 15.13 of care, effectiveness of care, use of services, access to care, 15.14 medical errors, and patient satisfaction to be included. To 15.15 determine the specific measures to be reported, the commissioner 15.16 of health shall consider: 15.17 (1) current public health goals established under section 15.18 62J.212; and 15.19 (2) measures established by recognized state or national 15.20 health data reporting organizations and accreditation 15.21 organizations. 15.22 Sec. 14. [62U.14] [NETWORK ADEQUACY.] 15.23 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 15.24 section, the terms defined in this subdivision have the meanings 15.25 given. 15.26 (b) "General hospital" has the meaning given in Minnesota 15.27 Rules, part 4640.0100, subpart 4. 15.28 (c) "Service area" means the geographic locations, 15.29 identified according to recognized political subdivisions such 15.30 as cities, counties, and townships, in which the health plan 15.31 company is approved by the commissioner to market its managed 15.32 care product. 15.33 (d) "Specialized hospital" has the meaning given in 15.34 Minnesota Rules, part 4640.0100, subpart 10. 15.35 Subd. 2. [NETWORK ADEQUACY STANDARDS.] (a) Eligible 15.36 persons must not be denied enrollment or continued enrollment in 16.1 a managed care plan solely on the basis that the eligible person 16.2 lives or works outside of the designated service area. Before 16.3 enrolling a person who resides outside of the health plan 16.4 company's approved service area, the health plan company shall 16.5 provide each prospective enrollee with a written notice of the 16.6 consequences of this special enrollment. 16.7 (b) A health plan company providing a managed care plan 16.8 shall maintain a network that is sufficient in numbers and types 16.9 of providers to ensure that all services to enrollees in the 16.10 managed care plan's service area will be accessible without 16.11 unreasonable delay. At a minimum, the health plan company must 16.12 meet the network adequacy standards in paragraphs (c) to (w). 16.13 (c) The health plan company must have available, either 16.14 directly or through arrangements, appropriate and sufficient 16.15 personnel, physical resources, and equipment to meet the 16.16 projected needs of its enrollees for covered health care 16.17 services. The health plan company, in coordination with 16.18 participating providers, shall develop and implement written 16.19 standards or guidelines that assess the capacity of each 16.20 provider network to provide timely access to health care 16.21 services according to the following: the health plan company, 16.22 either directly or through its provider contracts, shall arrange 16.23 for covered health care services, including referrals to 16.24 participating and nonparticipating providers, to be accessible 16.25 to enrollees on a timely basis in accordance with medically 16.26 appropriate guidelines consistent with accepted standards of 16.27 practice. 16.28 (d) Covered persons must have access to emergency services 16.29 24 hours per day, seven days per week. 16.30 (e) Primary care and specialty physician services must be 16.31 available and accessible within the managed care plan's service 16.32 area. The health plan company shall fulfill this requirement 16.33 through written standards for: 16.34 (1) regularly scheduled appointments during normal business 16.35 hours; 16.36 (2) after hours clinics; 17.1 (3) use of a 24-hour answering service with standards for 17.2 maximum allowable call-back times based upon what is medically 17.3 appropriate to each situation; and 17.4 (4) referrals to urgent care centers, where available, and 17.5 to hospital emergency care. 17.6 (f) The health plan company shall provide or contract with 17.7 a sufficient number of primary care physicians to meet the 17.8 projected needs of its enrollees for primary care physician 17.9 services. 17.10 (g) The health plan company shall ensure that there are a 17.11 sufficient number of primary care physicians with hospital 17.12 admitting privileges at one or more participating general 17.13 hospitals within the managed care plan's service area to ensure 17.14 that necessary hospital admissions are made on a timely basis 17.15 consistent with accepted standards of practice. 17.16 (h) The health plan company shall provide directly, 17.17 contract for, or otherwise arrange for, specialty physician 17.18 services that are covered benefits and to which enrollees have 17.19 access in the managed care plan's service area. 17.20 (i) Specialty physician services to which enrollees do not 17.21 have continued access, for example, referrals for consultation 17.22 or second opinions, shall be provided by the health plan company 17.23 through contracts or other arrangements with specialty 17.24 physicians. 17.25 (j) The health plan company shall ensure that there are a 17.26 sufficient number of specialty physicians with hospital 17.27 admitting privileges to ensure that necessary hospital 17.28 admissions are made on a timely basis consistent with accepted 17.29 standards of practice. 17.30 (k) Services of one or more general hospitals licensed 17.31 under sections 144.50 to 144.58 must be provided through 17.32 contracts between the health plan company and hospitals. The 17.33 services must be available and accessible, on a timely basis 17.34 consistent with accepted standards of practice, 24 hours per 17.35 day, seven days per week, within the managed care plan's service 17.36 area. Services of specialized hospitals licensed under sections 18.1 144.50 to 144.58, including chemical dependency and mental 18.2 health services, must be provided through contracts between the 18.3 health plan company or its contracted providers and hospitals, 18.4 either within or outside the managed care plan's service area. 18.5 The services must be available during normal business hours 18.6 consistent with accepted standards of practice. 18.7 (l) The health plan company shall contract with or employ 18.8 sufficient numbers of providers of ancillary services to meet 18.9 the projected needs of its enrollees. The services must be 18.10 available during normal daytime business hours consistent with 18.11 accepted standards of practice. 18.12 (m) The health plan company shall contract with or employ 18.13 sufficient numbers of qualified providers of outpatient mental 18.14 health and chemical dependency services to meet the projected 18.15 needs of its enrollees consistent with accepted standards of 18.16 practice and meeting the following requirements: 18.17 (1) services for enrollees with alcohol and other chemical 18.18 dependency problems must be provided by outpatient treatment 18.19 programs licensed by the commissioner of human services under 18.20 Minnesota Rules, parts 9530.5000 to 9530.6400, or by hospitals 18.21 licensed under Minnesota Rules, chapter 4640; 18.22 (2) outpatient chemical dependency treatment programs 18.23 serving adolescents must meet all of the requirements of the 18.24 commissioner of human services contained in Minnesota Rules, 18.25 part 9530.6400; 18.26 (3) outpatient mental health services must be provided by 18.27 licensed psychiatrists, psychologists, social workers, marriage 18.28 and family therapists, or psychiatric nurses, as appropriate in 18.29 each case, and by mental health centers or mental health clinics 18.30 licensed by the commissioner of human services under Minnesota 18.31 Rules, chapter 9520; and 18.32 (4) the health plan company, either directly or through its 18.33 contracted mental health or chemical dependency provider, shall 18.34 have services available that are culturally specific or 18.35 appropriate to a specific age, gender, or sexual preference. 18.36 If any of the services in items (1) to (4) cannot be 19.1 provided by licensed providers and programs, the health plan 19.2 company shall file a request for an exception to the 19.3 requirements of items (1) to (4). A request for an exception is 19.4 considered a filing under Minnesota Rules, part 4685.3300. The 19.5 health plan company shall submit specific data in support of its 19.6 request. 19.7 (n) The health plan company shall provide directly, 19.8 contract for, or otherwise arrange for residential treatment 19.9 programs licensed by the commissioner of human services under 19.10 Minnesota Rules, parts 9530.4100 to 9530.4450, to provide 19.11 services to enrollees with alcohol and other chemical dependency 19.12 problems. 19.13 (o) In any case where the health plan company has an 19.14 insufficient number or type of participating providers to 19.15 provide a covered benefit, the health plan company shall ensure 19.16 that the enrollee obtains the covered benefit at no greater cost 19.17 to the enrollee than if the benefit were obtained from a 19.18 participating provider or shall make other arrangements 19.19 acceptable to the commissioner. 19.20 (p) If a specific managed care plan provider refuses to 19.21 continue to provide care to a specific managed care plan 19.22 enrollee, the health plan company shall furnish the enrollee 19.23 with the name, address, and telephone number of other 19.24 participating providers in the same area of medical specialty. 19.25 Examples of reasons for refusal to continue to provide care to 19.26 an enrollee are: unpaid bills incurred by that individual 19.27 before enrollment in the managed care plan; unpaid copayments or 19.28 coinsurance incurred by the enrollee after enrollment in the 19.29 managed care plan; an enrollee who is uncooperative or abusive 19.30 toward the provider; and the inability of the enrollee and the 19.31 provider to agree on a course of treatment. 19.32 (q) The health plan company is responsible for implementing 19.33 a system that, to the greatest possible extent, ensures that 19.34 referrals, either by the health plan company or by a 19.35 participating provider, are made to participating providers. An 19.36 enrollee cannot be held liable if the managed care plan 20.1 provider, in error, gives a referral to a nonparticipating 20.2 provider. This issue may be addressed in contracts between the 20.3 health plan company and its providers. 20.4 (r) Referral procedures must be described in an enrollee's 20.5 evidence of coverage and must be available to an enrollee upon 20.6 request for information regarding referral procedures. 20.7 Information regarding referral procedures must clearly describe 20.8 at least the following: 20.9 (1) under what circumstances and for what services a 20.10 referral is necessary; 20.11 (2) how to request a referral; 20.12 (3) how to request a standing referral; and 20.13 (4) how to appeal a referral determination. 20.14 (s) In plans in which referrals to specialty providers and 20.15 ancillary services are required, the health plan company shall 20.16 inform its primary care and other authorized providers of the 20.17 providers' responsibility to provide written referrals and any 20.18 specific procedures that must be followed in providing referrals. 20.19 (t) This paragraph applies to a health plan company that 20.20 arranges for the services of assigned or selected primary care 20.21 providers to provide initial and basic care to enrollees. An 20.22 enrollee who is dissatisfied with the assigned or selected 20.23 primary care provider must be allowed to change primary care 20.24 providers according to the health plan company's procedures and 20.25 policies. If requested by an enrollee or if determined to be 20.26 necessary because of a pattern of inappropriate utilization of 20.27 services, an enrollee's health care may be supervised and 20.28 coordinated by the primary care provider. 20.29 (u) Within the managed care plan's service area, the 20.30 maximum travel distance or time must be the lesser of 30 miles 20.31 or 30 minutes to the nearest provider of each of the following 20.32 services: primary care services, mental health services, and 20.33 general hospital services. The health plan company shall 20.34 designate which method is used. 20.35 (v) Within a managed care plan's service area, the maximum 20.36 travel distance or time must be the lesser of 60 miles or 60 21.1 minutes to the nearest provider of specialty physician services, 21.2 ancillary services, specialized hospital services, and all other 21.3 health services not listed in paragraph (u). The health carrier 21.4 shall designate which method is used. 21.5 (w) The commissioner shall grant an exception to a 21.6 requirement in paragraph (u) or (v) if the health plan company 21.7 can demonstrate with specific data that the requirement of 21.8 paragraph (u) or (v) is not feasible in a particular service 21.9 area or part of a service area. The health plan company shall 21.10 submit specific data in support of its request. Paragraphs (u) 21.11 and (v) do not apply if an enrollee is referred to a referral 21.12 center for health care services. Paragraph (u) does not apply 21.13 if an enrollee has chosen a managed care plan with full 21.14 knowledge that the managed care plan has no participating 21.15 providers within 30 miles or 30 minutes of the enrollee's place 21.16 of residence. 21.17 Subd. 3. [ACCESS PLAN; PRIOR APPROVAL.] Beginning January 21.18 1, 2002, a health plan company shall file for prior approval 21.19 with the commissioner an access plan meeting the requirements of 21.20 this section for each of the managed care plans that the health 21.21 plan company offers in the state. The health plan company shall 21.22 make the access plans available on its business premises and 21.23 shall provide them to any interested party upon request. The 21.24 health plan company shall prepare and file an access plan prior 21.25 to offering a new managed care plan and shall update and file 21.26 changes for an existing access plan whenever it makes any 21.27 material change to an existing managed care plan. The access 21.28 plan must describe or contain at least the following: 21.29 (1) the health plan company's network that is available to 21.30 enrollees under the managed care plan, including a description 21.31 of the available care systems, if applicable; 21.32 (2) the health plan company's procedures for making 21.33 referrals, including standing referrals under section 62Q.58 21.34 within and outside its network; 21.35 (3) the health plan company's process for monitoring and 21.36 ensuring on an ongoing basis the sufficiency of the network to 22.1 meet the health care needs of populations that enroll in the 22.2 managed care plan; 22.3 (4) the health plan company's system for ensuring file 22.4 coordination and continuity of care for enrollees referred to 22.5 specialty physicians; 22.6 (5) the health plan company's process for enabling 22.7 enrollees to change primary care professionals; and 22.8 (6) the health plan company's proposed plan for providing 22.9 continuity of care in the event of contract termination as 22.10 required under section 62Q.56. 22.11 Sec. 15. [62U.15] [PROVIDER CONTRACTS.] 22.12 (a) A health plan company shall, in connection with a 22.13 managed care plan, comply with section 62D.123. 22.14 (b) An agreement to provide health care services between a 22.15 provider and a health plan company must require the provider to 22.16 cooperate with and participate in the health plan company's 22.17 quality assessment and performance improvement program, dispute 22.18 resolution procedure, and utilization review program. 22.19 (c) An agreement to provide health care services between a 22.20 provider and a health plan company must require that if the 22.21 provider terminates the agreement, without cause, the provider 22.22 shall give the health plan company 120 days' advance notice of 22.23 termination. 22.24 (d) The rights and responsibilities under a contract 22.25 between a health plan company and a participating provider must 22.26 not be assigned or delegated by the provider without the prior 22.27 written consent of the health plan company and the contract must 22.28 so provide. 22.29 (e) A health plan company is responsible for ensuring that 22.30 a participating provider furnishes covered benefits to all 22.31 enrollees without regard to the enrollee's enrollment in the 22.32 plan as a private purchaser of the plan or as a participant in 22.33 publicly financed programs of health care services. This 22.34 paragraph does not apply to circumstances when the provider 22.35 should not render services due to limitations arising from lack 22.36 of training, experience, or skill or from licensing restrictions. 23.1 (f) A health plan company shall not penalize a provider 23.2 because the provider, in good faith, reports to state or federal 23.3 authorities any act or practice by the health plan company that 23.4 jeopardizes patient health or welfare. 23.5 (g) A health plan company shall establish a mechanism by 23.6 which the participating providers may determine in a timely 23.7 manner whether or not a person is covered by the health plan 23.8 company. 23.9 (h) A health plan company shall establish procedures for 23.10 resolution of administrative, payment, or other disputes between 23.11 providers and the health plan company. 23.12 (i) A contract between a health plan company and a provider 23.13 must not contain definitions or other provisions that conflict 23.14 with the definitions or provisions contained in the managed care 23.15 plan or this section. 23.16 Sec. 16. [62U.16] [UNIFORM ENROLLEE COST-SHARING.] 23.17 Subdivision 1. [COPAYMENTS.] Copayments in managed care 23.18 plans must not be unfair, unjust, or inequitable, as provided in 23.19 section 62A.02. No managed care plan may provide for copayments 23.20 in excess of 50 percent, except for noncovered benefits. 23.21 Noncovered benefits include covered services that the enrollee 23.22 elects without prior approval to receive out-of-network or from 23.23 a broader network and nonformulary prescription drugs. 23.24 Copayments may be expressed as percentages or flat fees as 23.25 provided in Minnesota Rules, part 4685.0801. The 25 percent 23.26 copayment limitation of Minnesota Rules, part 4685.0700, subpart 23.27 3, item A, subitem (3), unit (b); and part 4685.0801, subparts 1 23.28 and 2, do not apply to a managed care plan that complies with 23.29 this subdivision. 23.30 Subd. 2. [DEDUCTIBLES.] (a) Deductibles included in 23.31 managed care plans must not exceed: 23.32 (1) for group health plans, $5,000 per individual per year 23.33 and $10,000 per family per year; or 23.34 (2) for individual health plans, $10,000 per person per 23.35 year and $20,000 per family per year. 23.36 (b) Covered charges must count toward the deductible for 24.1 individual health plans whether incurred from participating or 24.2 nonparticipating providers. 24.3 Subd. 3. [ANNUAL OUT-OF-POCKET MAXIMUMS.] A managed care 24.4 plan must provide for an out-of-pocket maximum on enrollee 24.5 cost-sharing not to exceed $8,000 per person per year on group 24.6 health plans and $15,000 per person per year on individual 24.7 health plans. Covered charges must count toward the 24.8 out-of-pocket maximum whether incurred from participating or 24.9 nonparticipating providers. 24.10 Subd. 4. [LIFETIME MAXIMUM BENEFITS.] A managed care plan 24.11 must not provide for a lifetime maximum benefit limit less than 24.12 the amount required under section 62E.12 for coverage issued by 24.13 the Minnesota comprehensive health association. If a managed 24.14 care plan includes a lifetime maximum benefit limit, the 24.15 benefits that were provided to the enrollee when the managed 24.16 care plan did not have a lifetime maximum benefit limit may not 24.17 be counted toward that limit. 24.18 Subd. 5. [EXCEPTIONS.] (a) Subdivisions 1 and 2 do not 24.19 apply to the extent that another law requires lower enrollee 24.20 cost-sharing for specific services than that specified in 24.21 subdivisions 1 and 2 or to preventive services as defined in 24.22 Minnesota Rules, part 4685.0801, subpart 8. 24.23 (b) This section does not apply to the two small employer 24.24 plans described in section 62L.05 or to plans described in 24.25 section 62L.055. 24.26 Sec. 17. [REPEALER.] 24.27 (a) Minnesota Statutes 2000, sections 62D.09, subdivision 24.28 3; 62D.12, subdivision 19; 62D.123, subdivisions 2, 3, and 4; 24.29 and 62D.124, are repealed. 24.30 (b) Minnesota Rules, parts 4685.0801, subpart 7; 4685.1010; 24.31 4685.1105; 4685.1110; 4685.1115; 4685.1120; 4685.1125; 24.32 4685.1130; 4685.1300; 4685.1900; 4685.2000; and 4685.2200, 24.33 subpart 3, are repealed. 24.34 Sec. 18. [EFFECTIVE DATE.] 24.35 Sections 1 to 12, 16, and 17 are effective January 1, 2002, 24.36 and apply to managed care plans issued or renewed on or after 25.1 that date. Sections 13 to 15 are effective January 1, 2004, and 25.2 apply to managed care plans issued or renewed on or after that 25.3 date. 25.4 ARTICLE 2 25.5 RELATED AND CONFORMING CHANGES IN MANAGED CARE REGULATION 25.6 Section 1. Minnesota Statutes 2000, section 62A.021, 25.7 subdivision 1, is amended to read: 25.8 Subdivision 1. [LOSS RATIO STANDARDS.] (a) Notwithstanding 25.9 section 62A.02, subdivision 3, relating to loss ratios, health 25.10 care policies or certificates shall not be delivered or issued 25.11 for delivery to an individual or to a small employer as defined 25.12 in section 62L.02, unless the policies or certificates can be 25.13 expected, as estimated for the entire period for which rates are 25.14 computed to provide coverage, to return to Minnesota 25.15 policyholders and certificate holders in the form of aggregate 25.16 benefits not including anticipated refunds or credits, provided 25.17 under the policies or certificates, (1) at least 75 percent of 25.18 the aggregate amount of premiums earned in the case of policies 25.19 issued in the small employer market, as defined in section 25.20 62L.02, subdivision 27, calculated on an aggregate basis; and 25.21 (2) at least 65 percent of the aggregate amount of premiums 25.22 earned in the case of each policy form or certificate form 25.23 issued in the individual market; calculated on the basis of 25.24 incurred claims experience or incurred health care expenses 25.25 where coverage is provided by a health maintenance organization 25.26 on a service rather than reimbursement basis and earned premiums 25.27 for the period and according to accepted actuarial principles 25.28 and practices. Assessments by the reinsurance association 25.29 created in chapter 62L and all types of taxes, surcharges, or 25.30 assessments created by Laws 1992, chapter 549, or created on or 25.31 after April 23, 1992, are included in the calculation of 25.32 incurred claims experience or incurred health care expenses. 25.33 The applicable percentage for policies and certificates issued 25.34 in the small employer market, as defined in section 62L.02, 25.35 increases by one percentage point on July 1 of each year, 25.36 beginning on July 1, 1994, until an 82 percent loss ratio is 26.1 reached on July 1, 2000. The applicable percentage for policy 26.2 forms and certificate forms issued in the individual market 26.3 increases by one percentage point on July 1 of each year, 26.4 beginning on July 1, 1994, until a 72 percent loss ratio is 26.5 reached on July 1, 2000. A health carrier that enters a market 26.6 after July 1, 1993, does not start at the beginning of the 26.7 phase-in schedule and must instead comply with the loss ratio 26.8 requirements applicable to other health carriers in that market 26.9 for each time period. Premiums earned and claims incurred in 26.10 markets other than the small employer and individual markets are 26.11 not relevant for purposes of this section. 26.12 (b) All filings of rates and rating schedules shall 26.13 demonstrate that actual expected claims in relation to premiums 26.14 comply with the requirements of this section when combined with 26.15 actual experience to date. Filings of rate revisions shall also 26.16 demonstrate that the anticipated loss ratio over the entire 26.17 future period for which the revised rates are computed to 26.18 provide coverage can be expected to meet the appropriate loss 26.19 ratio standards, and aggregate loss ratio from inception of the 26.20 policy form or certificate form shall equal or exceed the 26.21 appropriate loss ratio standards. 26.22 (c) A health carrier that issues health care policies and 26.23 certificates to individuals or to small employers, as defined in 26.24 section 62L.02, in this state shall file annually its rates, 26.25 rating schedule, and supporting documentation including ratios 26.26 of incurred losses to earned premiums by policy form or 26.27 certificate form duration for approval by the commissioner 26.28 according to the filing requirements and procedures prescribed 26.29 by the commissioner. The supporting documentation shall also 26.30 demonstrate in accordance with actuarial standards of practice 26.31 using reasonable assumptions that the appropriate loss ratio 26.32 standards can be expected to be met over the entire period for 26.33 which rates are computed. The demonstration shall exclude 26.34 active life reserves. If the data submitted does not confirm 26.35 that the health carrier has satisfied the loss ratio 26.36 requirements of this section, the commissioner shall notify the 27.1 health carrier in writing of the deficiency. The health carrier 27.2 shall have 30 days from the date of the commissioner's notice to 27.3 file amended rates that comply with this section. If the health 27.4 carrier fails to file amended rates within the prescribed time, 27.5 the commissioner shall order that the health carrier's filed 27.6 rates for the nonconforming policy form or certificate form be 27.7 reduced to an amount that would have resulted in a loss ratio 27.8 that complied with this section had it been in effect for the 27.9 reporting period of the supplement. The health carrier's 27.10 failure to file amended rates within the specified time or the 27.11 issuance of the commissioner's order amending the rates does not 27.12 preclude the health carrier from filing an amendment of its 27.13 rates at a later time. The commissioner shall annually make the 27.14 submitted data available to the public at a cost not to exceed 27.15 the cost of copying. The data must be compiled in a form useful 27.16 for consumers who wish to compare premium charges and loss 27.17 ratios. 27.18 (d) Each sale of a policy or certificate that does not 27.19 comply with the loss ratio requirements of this section is an 27.20 unfair or deceptive act or practice in the business of insurance 27.21 and is subject to the penalties in sections 72A.17 to 72A.32. 27.22 (e)(1) For purposes of this section, health care policies 27.23 issued as a result of solicitations of individuals through the 27.24 mail or mass media advertising, including both print and 27.25 broadcast advertising, shall be treated as individual policies. 27.26 (2) For purposes of this section, (i) "health care policy" 27.27 or "health care certificate" is a health plan as defined in 27.28 section 62A.011; and (ii) "health carrier" has the meaning given 27.29 in section 62A.011 and includes all health carriers delivering 27.30 or issuing for delivery health care policies or certificates in 27.31 this state or offering these policies or certificates to 27.32 residents of this state. 27.33 (f) The loss ratio phase-in as described in paragraph (a) 27.34 does not apply to individual policies and small employer 27.35 policies issued by a health plan company that is assessed less 27.36 than three percent of the total annual amount assessed by the 28.1 Minnesota comprehensive health association. These policies must 28.2 meet a 68 percent loss ratio for individual policies, a 71 28.3 percent loss ratio for small employer policies with fewer than 28.4 ten employees, and a 75 percent loss ratio for all other small 28.5 employer policies. 28.6 (g) Thecommissionerscommissioner of commerceand health28.7 shalleachannually issue a public report listing, by health 28.8 plan company, the actual loss ratios experienced in the 28.9 individual and small employer markets in this stateby the28.10health plan companies that the commissioners respectively28.11regulate. The commissioners shall coordinate release of these28.12reports so as to release them as a joint report or as separate28.13reports issued the same day. The reportor reportsshall be 28.14 released no later than June 1 for loss ratios experienced for 28.15 the preceding calendar year. Health plan companies shall 28.16 provide to thecommissionerscommissioner any information 28.17 requested by thecommissionerscommissioner for purposes of this 28.18 paragraph. 28.19 Sec. 2. Minnesota Statutes 2000, section 62A.105, is 28.20 amended to read: 28.21 62A.105 [COVERAGES; TRANSFERS TO SUBSTANTIALLY SIMILAR 28.22 PRODUCTS.] 28.23 Subdivision 1. [SCOPE.] No individual policy of accident 28.24 and sickness regulated under this chapter orsubscriber contract28.25regulated under chapter 62Cindividual health plan shall be 28.26 issued, renewed, or continued to provide coverage to a Minnesota 28.27 resident unless it satisfies the requirements of subdivision 2. 28.28 Subd. 2. [REQUIREMENT.] If an issuer of policies or plans 28.29 referred to in subdivision 1 ceases to offer a particular policy 28.30 orsubscriber contractplan to the general public or otherwise 28.31 stops adding new insureds to the group of covered persons, the 28.32 issuer shall allow any covered person to transfer to another 28.33 substantially similar policy orcontractplan currently being 28.34 sold by the issuer. The issuer shall permit the transfer 28.35 without any preexisting condition limitation, waiting period, or 28.36 other restriction of any type other than those which applied to 29.1 the insured under the prior policy orcontractplan. This 29.2 section does not apply to persons who were covered under an 29.3 individual policy orcontractplan prior to July 1, 1994. 29.4 Sec. 3. Minnesota Statutes 2000, section 62A.615, is 29.5 amended to read: 29.6 62A.615 [PREEXISTING CONDITIONS DISCLOSED AT TIME OF 29.7 APPLICATION.] 29.8 Noinsurerhealth plan company may cancel or rescind a 29.9health insurancepolicy of accident and sickness insurance or a 29.10 health plan for a preexisting condition of which the application 29.11 or other information provided by the insured reasonably gave the 29.12insurerhealth plan company notice. Noinsurerhealth plan 29.13 company may restrict coverage for a preexisting condition of 29.14 which the application or other information provided by the 29.15 insured reasonably gave theinsurerhealth plan company notice 29.16 unless the coverage is restricted at the time the policy or plan 29.17 is issued and the restriction is disclosed in writing to the 29.18 insured at the time the policy or plan is issued. 29.19 Sec. 4. Minnesota Statutes 2000, section 62D.02, 29.20 subdivision 3, is amended to read: 29.21 Subd. 3. [COMMISSIONER OF HEALTH ORCOMMISSIONER.] 29.22"Commissioner of health" or"Commissioner" means the state 29.23 commissioner ofhealthcommerce or a designee. 29.24 Sec. 5. Minnesota Statutes 2000, section 62D.02, 29.25 subdivision 8, is amended to read: 29.26 Subd. 8. [HEALTH MAINTENANCE CONTRACT.] "Health 29.27 maintenance contract" means any contract whereby a health 29.28 maintenance organization agrees to provide comprehensive health 29.29 maintenance services to enrollees, provided that the contract 29.30 may contain reasonable enrollee copayment provisions. An 29.31 individual or group health maintenance contract may contain the 29.32 copayment and deductible provisions specified in this 29.33 subdivision. Copayment and deductible provisions in group 29.34 contracts shall not discriminate on the basis of age, sex, race, 29.35 length of enrollment in the plan, or economic status; and during 29.36 every open enrollment period in which all offered health benefit 30.1 plans, including those subject to the jurisdiction of the 30.2commissioners of commerce or healthcommissioner, fully 30.3 participate without any underwriting restrictions, copayment and 30.4 deductible provisions shall not discriminate on the basis of 30.5 preexisting health status.In no event shall the sum of the30.6annual copayments and deductible exceed the maximum30.7out-of-pocket expenses allowable for a number three qualified30.8plan under section 62E.06, nor shall that sum exceed $5,000 per30.9family. The annual deductible must not exceed $1,000 per30.10person. The annual deductible must not apply to preventive30.11health services as described in Minnesota Rules, part 4685.0801,30.12subpart 8.Where sections 62D.01 to 62D.30 permit a health 30.13 maintenance organization to contain reasonable copayment 30.14 provisions for preexisting health status, these provisions may 30.15 vary with respect to length of enrollment in the plan. Any 30.16 contract may provide for health care services in addition to 30.17 those set forth in subdivision 7. 30.18 Sec. 6. Minnesota Statutes 2000, section 62D.12, 30.19 subdivision 1, is amended to read: 30.20 Subdivision 1. [FALSE REPRESENTATIONS.] No health 30.21 maintenance organization or representative thereof may cause or 30.22 knowingly permit the use of advertising or solicitation which is 30.23 untrue or misleading, or any form of evidence of coverage which 30.24 is deceptive. Each health maintenance organization shall be 30.25 subject to sections 72A.17 to 72A.32, relating to the regulation 30.26 of trade practices, except(a)to the extent that the nature of 30.27 a health maintenance organization renders such sections clearly 30.28 inappropriateand (b) that enforcement shall be by the30.29commissioner of health and not by the commissioner of commerce. 30.30 Every health maintenance organization shall be subject to 30.31 sections 8.31 and 325F.69. 30.32 Sec. 7. Minnesota Statutes 2000, section 62D.15, 30.33 subdivision 1, is amended to read: 30.34 Subdivision 1. [GROUNDS FOR SUSPENSION OR REVOCATION.] The 30.35 commissionerof healthmay suspend or revoke any certificate of 30.36 authority issued to a health maintenance organization under 31.1 sections 62D.01 to 62D.30 if the commissioner finds that: 31.2(a)(1) the health maintenance organization is operating 31.3 significantly in contravention of its basic organizational 31.4 document, its health maintenance contract, or in a manner 31.5 contrary to that described in and reasonably inferred from any 31.6 other information submitted under section 62D.03, unless 31.7 amendments to such submissions have been filed with and approved 31.8 by the commissionerof health; 31.9(b)(2) the health maintenance organization issues 31.10 evidences of coverage which do not comply with the requirements 31.11 of section 62D.07; 31.12(c)(3) the health maintenance organization is unable to 31.13 fulfill its obligations to furnish comprehensive health 31.14 maintenance services as required under its health maintenance 31.15 contract; 31.16(d)(4) the health maintenance organization is no longer 31.17 financially responsible and may reasonably be expected to be 31.18 unable to meet its obligations to enrollees or prospective 31.19 enrollees; 31.20(e)(5) the health maintenance organization has failed to 31.21 implement a mechanism affording the enrollees an opportunity to 31.22 participate in matters of policy and operation under section 31.23 62D.06; 31.24(f)(6) the health maintenance organization has failed to 31.25 implement the complaint system required by section 62D.11 in a 31.26 manner designed to reasonably resolve valid complaints; 31.27(g)(7) the health maintenance organization, or any person 31.28 acting with its sanction, has advertised or merchandised its 31.29 services in an untrue, misrepresentative, misleading, deceptive, 31.30 or unfair manner; 31.31(h)(8) the continued operation of the health maintenance 31.32 organization would be hazardous to its enrollees;or31.33(i)(9) the health maintenance organization has otherwise 31.34 failed to substantially comply with sections 62D.01 to 62D.30 or 31.35 with any other statute or administrative rule applicable to 31.36 health maintenance organizations, or has submitted false 32.1 information in any report required hereunder; 32.2 (10) any situation described in section 60A.052, 32.3 subdivision 1, exists; 32.4 (11) the provider network in the managed care service area 32.5 is inadequate in terms of the number, location, and field of 32.6 specialty of its providers; or 32.7 (12) the health services provided or arranged are 32.8 substantially inappropriate, untimely, or otherwise inconsistent 32.9 with current professional knowledge and accepted standards of 32.10 practice. 32.11 Sec. 8. Minnesota Statutes 2000, section 62D.24, is 32.12 amended to read: 32.13 62D.24 [STATECOMMISSIONER OFHEALTH'SCOMMERCE'S AUTHORITY 32.14 TO CONTRACT.] 32.15 The commissioner ofhealthcommerce, in carrying out the 32.16 obligations under sections 62D.01 to 62D.30, may contract with 32.17 the commissioner ofcommercehealth or other qualified persons 32.18 to make recommendations concerning the determinations required 32.19 to be made. Such recommendations may be accepted in full or in 32.20 part by the commissioner ofhealthcommerce. 32.21 Sec. 9. Minnesota Statutes 2000, section 62E.05, 32.22 subdivision 2, is amended to read: 32.23 Subd. 2. [ANNUAL REPORT.] (a) All health plan companies, 32.24 as defined in section 62Q.01, shall annually report to the 32.25 commissionerresponsible for their regulation. The following 32.26 information shall be reported to theappropriatecommissioner on 32.27 February 1 of each year: 32.28 (1) the number of individuals and groups who received 32.29 coverage in the prior year through the qualified plans; and 32.30 (2) the number of individuals and groups who received 32.31 coverage in the prior year through each of the unqualified plans 32.32 sold by the company. 32.33 (b) The state of Minnesota or any of its departments, 32.34 agencies, programs, instrumentalities, or political 32.35 subdivisions, shall report in writing to the association and to 32.36 the commissioner of commerce no later than September 15 of each 33.1 year regarding the number of persons and the amount of premiums, 33.2 deductibles, copayments, or coinsurance that it paid for on 33.3 behalf of enrollees in the comprehensive health association. 33.4 This report must contain only summary information and must not 33.5 include any individually identifiable data. The report must 33.6 cover the 12-month period ending the preceding June 30. 33.7 Sec. 10. Minnesota Statutes 2000, section 62E.11, 33.8 subdivision 13, is amended to read: 33.9 Subd. 13. [STATE FUNDING; EFFECT ON PREMIUM RATES OF 33.10 MEMBERS.] In approving the premium rates as required in sections 33.11 62A.65, subdivision 3; and 62L.08, subdivision 8, the 33.12commissioners of health andcommissioner of commerce shall 33.13 ensure that any appropriation to reduce the annual assessment 33.14 made on the contributing members to cover the costs of the 33.15 Minnesota comprehensive health insurance plan as required under 33.16 this section is reflected in the premium rates charged by each 33.17 contributing member. 33.18 Sec. 11. Minnesota Statutes 2000, section 62E.14, 33.19 subdivision 6, is amended to read: 33.20 Subd. 6. [TERMINATION OF INDIVIDUAL POLICY OR CONTRACT.] A 33.21 Minnesota resident who holds an individual health maintenance 33.22 contract, individual nonprofit health service corporation 33.23 contract, or an individual insurance policy previously approved 33.24 by thecommissioners of health orcommissioner of commerce, may 33.25 enroll in the comprehensive health insurance plan with a waiver 33.26 of the preexisting condition as described in subdivision 3, 33.27 without interruption in coverage, provided (1) no replacement 33.28 coverage that meets the requirements of section 62D.121 was 33.29 offered by the contributing member, and (2) the policy or 33.30 contract has been terminated for reasons other than (a) 33.31 nonpayment of premium; (b) failure to make copayments required 33.32 by the health care plan; (c) moving out of the area served; or 33.33 (d) a materially false statement or misrepresentation by the 33.34 enrollee in the application for membership; and, provided 33.35 further, that the option to enroll in the plan is exercised 33.36 within 30 days of termination of the existing policy or contract. 34.1 Coverage allowed under this section is effective when the 34.2 contract or policy is terminated and the enrollee has completed 34.3 the proper application and paid the required premium or fee. 34.4 Expenses incurred from the preexisting conditions of 34.5 individuals enrolled in the state plan under this subdivision 34.6 must be paid by the contributing member canceling coverage as 34.7 set forth in section 62E.11, subdivision 10. 34.8 The application must include evidence of termination of the 34.9 existing policy or certificate as required in subdivision 1. 34.10 Sec. 12. Minnesota Statutes 2000, section 62J.041, 34.11 subdivision 4, is amended to read: 34.12 Subd. 4. [MONITORING OF RESERVES.] (a) Thecommissioners34.13of health andcommissioner of commerce shall monitor health plan 34.14 company reserves and net worth as established under chapters 34.15 60A, 62C, 62D, 62H, and 64B, with respect to the health plan34.16companies that each commissioner respectively regulatesto 34.17 assess the degree to which savings resulting from the 34.18 establishment of cost containment goals are passed on to 34.19 consumers in the form of lower premium rates. 34.20 (b) Health plan companies shall fully reflect in the 34.21 premium rates the savings generated by the cost containment 34.22 goals. No premium rate, currently reviewed by thedepartments34.23of health orcommissioner of commerce, may be approved for those 34.24 health plan companies unless the health plan company establishes 34.25 to the satisfaction of the commissioner of commerceor the34.26commissioner of health, as appropriate,that the proposed new 34.27 rate would comply with this paragraph. 34.28 (c) Health plan companies, except those licensed under 34.29 chapter 60A to sell accident and sickness insurance under 34.30 chapter 62A, shall annually before the end of the fourth fiscal 34.31 quarter provide to the commissioner ofhealth orcommerce, as34.32applicable,a projection of the level of reserves the company 34.33 expects to attain during each quarter of the following fiscal 34.34 year. These health plan companies shall submit with required 34.35 quarterly financial statements a calculation of the actual 34.36 reserve level attained by the company at the end of each quarter 35.1 including identification of the sources of any significant 35.2 changes in the reserve level and an updated projection of the 35.3 level of reserves the health plan company expects to attain by 35.4 the end of the fiscal year. In cases where the health plan 35.5 company has been given a certificate to operate a new health 35.6 maintenance organization under chapter 62D, or been licensed as 35.7 a community integrated service network under chapter 62N, or 35.8 formed an affiliation with one of these organizations, the 35.9 health plan company shall also submit with its quarterly 35.10 financial statement, total enrollment at the beginning and end 35.11 of the quarter and enrollment changes within each service area 35.12 of the new organization. The reserve calculations shall be 35.13 maintained by thecommissionerscommissioner of commerce as 35.14 trade secret information, except to the extent that such 35.15 information is also required to be filed by another provision of 35.16 state law and is not treated as trade secret information under 35.17 such other provisions. 35.18 (d) Health plan companies in paragraph (c) whose reserves 35.19 are less than the required minimum or more than the required 35.20 maximum at the end of the fiscal year shall submit a plan of 35.21 corrective action to the commissioner ofhealth orcommerce 35.22 under subdivision 7. 35.23 (e) The commissioner of commerce, in consultation with the35.24commissioner of health,shall report to the legislature no later 35.25 than January 15, 1995, as to whether the concept of a reserve 35.26 corridor or other mechanism for purposes of monitoring reserves 35.27 is adaptable for use with indemnity health insurers that do 35.28 business in multiple states and that must comply with their 35.29 domiciliary state's reserves requirements. 35.30 Sec. 13. Minnesota Statutes 2000, section 62J.701, is 35.31 amended to read: 35.32 62J.701 [GOVERNMENTAL PROGRAMS.] 35.33 Beginning January 1, 1999, the provisions in paragraphs (a) 35.34 to (d) apply. 35.35 (a) For purposes of sections 62J.695 to 62J.80, the 35.36 requirements and other provisions that apply to health plan 36.1 companies also apply to governmental programs. 36.2 (b) For purposes of this section, "governmental programs" 36.3 means the medical assistance program, the MinnesotaCare program, 36.4 the general assistance medical care program, the state employee 36.5 group insurance program, the public employees insurance program 36.6 under section 43A.316, and coverage provided by political 36.7 subdivisions under section 471.617. 36.8 (c) Notwithstanding paragraph (a), section 62J.72 does not 36.9 apply to the fee-for-service programs under medical assistance, 36.10 MinnesotaCare, and general assistance medical care. 36.11 (d) If a state commissioner or local unit of government 36.12 contracts with a health plan company or a third-party 36.13 administrator, the contract may assign any obligations under 36.14 paragraph (a) to the health plan company or third-party 36.15 administrator. Nothing in this paragraph shall be construed to 36.16 remove or diminish any enforcement responsibilities of the 36.17commissioners of health orcommissioner of commerce provided in 36.18 sections 62J.695 to 62J.80. 36.19 Sec. 14. Minnesota Statutes 2000, section 62J.74, 36.20 subdivision 1, is amended to read: 36.21 Subdivision 1. [AUTHORITY.] Thecommissionerscommissioner 36.22 ofhealth andcommerce shalleachperiodically review contracts 36.23 and arrangements among health care providing entities and health 36.24 plan companiesthey regulateto determine compliance with 36.25 sections 62J.70 to 62J.73. Any person may submit a contract or 36.26 arrangement to therelevantcommissioner for review if the 36.27 person believes sections 62J.70 to 62J.73 have been violated. 36.28 Any provision of a contract or arrangement found by therelevant36.29 commissioner to violate this section is null and void, and the 36.30relevantcommissioner may assess civil penalties against the 36.31 health plan company in an amount not to exceed $2,500 for each 36.32 day the contract or arrangement is in effect, and may use the 36.33 enforcement procedures otherwise available to the commissioner. 36.34 All due process rights afforded under chapter 14 apply to this 36.35 section. 36.36 Sec. 15. Minnesota Statutes 2000, section 62J.74, 37.1 subdivision 2, is amended to read: 37.2 Subd. 2. [ASSISTANCE TO LICENSING BOARDS.] A 37.3 health-related licensing board as defined under section 214.01, 37.4 subdivision 2, shall submit a contract or arrangement to the 37.5relevantcommissioner of commerce for review if the board 37.6 believes sections 62J.70 to 62J.73 have been violated. If the 37.7 commissioner determines that any provision of a contract or 37.8 arrangement violates those sections, the board may take 37.9 disciplinary action against any person who is licensed or 37.10 regulated by the board who entered into the contract arrangement. 37.11 Sec. 16. Minnesota Statutes 2000, section 62J.75, is 37.12 amended to read: 37.13 62J.75 [CONSUMER ADVISORY BOARD.] 37.14 (a) The consumer advisory board consists of 18 members 37.15 appointed in accordance with paragraph (b). All members must be 37.16 public, consumer members who: 37.17 (1) do not have and never had a material interest in either 37.18 the provision of health care services or in an activity directly 37.19 related to the provision of health care services, such as health 37.20 insurance sales or health plan administration; 37.21 (2) are not registered lobbyists; and 37.22 (3) are not currently responsible for or directly involved 37.23 in the purchasing of health insurance for a business or 37.24 organization. 37.25 (b) The governor, the speaker of the house of 37.26 representatives, and the subcommittee on committees of the 37.27 committee on rules and administration of the senate shall each 37.28 appoint six members. Members may be compensated in accordance 37.29 with section 15.059, subdivision 3, except that members shall 37.30 not receive per diem compensation or reimbursements for child 37.31 care expenses. 37.32 (c) The board shall advise thecommissioners of health and37.33 commissioner of commerce on the following: 37.34 (1) the needs of health care consumers and how to better 37.35 serve and educate the consumers on health care concerns and 37.36 recommend solutions to identified problems; and 38.1 (2) consumer protection issues in the self-insured market, 38.2 including, but not limited to, public education needs. 38.3 The board also may make recommendations to the legislature 38.4 on these issues. 38.5 (d) The board and this section expire June 30, 2001. 38.6 Sec. 17. Minnesota Statutes 2000, section 62L.02, 38.7 subdivision 8, is amended to read: 38.8 Subd. 8. [COMMISSIONER.] "Commissioner" means the 38.9 commissioner of commercefor health carriers subject to the38.10jurisdiction of the department of commerce or the commissioner38.11of health for health carriers subject to the jurisdiction of the38.12department of health,or therelevantcommissioner's designated 38.13 representative.For purposes of sections 62L.13 to 62L.22,38.14"commissioner" means the commissioner of commerce or that38.15commissioner's designated representative.38.16 Sec. 18. Minnesota Statutes 2000, section 62L.05, 38.17 subdivision 12, is amended to read: 38.18 Subd. 12. [DEMONSTRATION PROJECTS.] Nothing in this 38.19 chapter prohibits a health maintenance organization from 38.20 offering a demonstration project authorized under section 62D.30. 38.21 The commissionerof healthmay approve a demonstration project 38.22 which offers benefits that do not meet the requirements of a 38.23 small employer plan if the commissioner finds that the 38.24 requirements of section 62D.30 are otherwise met. 38.25 Sec. 19. Minnesota Statutes 2000, section 62L.08, 38.26 subdivision 10, is amended to read: 38.27 Subd. 10. [RATING REPORT.] Beginning January 1, 1995, and 38.28 annually thereafter, thecommissionerscommissioner ofhealth38.29andcommerce shall provide ajointreport to the legislature on 38.30 the effect of the rating restrictions required by this section 38.31 and the appropriateness of proceeding with additional rate 38.32 reform. Each report must include an analysis of the 38.33 availability of health care coverage due to the rating reform, 38.34 the equitable and appropriate distribution of risk and 38.35 associated costs, the effect on the self-insurance market, and 38.36 any resulting or anticipated change in health plan design and 39.1 market share and availability of health carriers. 39.2 Sec. 20. Minnesota Statutes 2000, section 62L.08, 39.3 subdivision 11, is amended to read: 39.4 Subd. 11. [LOSS RATIO STANDARDS.] Notwithstanding section 39.5 62A.02, subdivision 3, relating to loss ratios, each policy or 39.6 contract form used with respect to a health benefit plan 39.7 offered, or issued in the small employer market, is subject, 39.8 beginning July 1, 1993, to section 62A.021.The commissioner of39.9health has, with respect to carriers under that commissioner's39.10jurisdiction, all of the powers of the commissioner of commerce39.11under that section.39.12 Sec. 21. Minnesota Statutes 2000, section 62L.09, 39.13 subdivision 3, is amended to read: 39.14 Subd. 3. [REENTRY PROHIBITION.] (a) Except as otherwise 39.15 provided in paragraph (b), a health carrier that ceases to do 39.16 business in the small employer market after July 1, 1993, is 39.17 prohibited from writing new business in the small employer 39.18 market in this state for a period of five years from the date of 39.19 notice to the commissioner. This subdivision applies to any 39.20 health maintenance organization that ceases to do business in 39.21 the small employer market in one service area with respect to 39.22 that service area only. Nothing in this subdivision prohibits 39.23 an affiliated health maintenance organization from continuing to 39.24 do business in the small employer market in that same service 39.25 area. 39.26 (b) The commissioner of commerceor the commissioner of39.27healthmay permit a health carrier that ceases to do business in 39.28 the small employer market in this state after July 1, 1993, to 39.29 begin writing new business in the small employer market if: 39.30 (1) since the carrier ceased doing business in the small 39.31 employer market, legislative action has occurred that has 39.32 significantly changed the effect on the carrier of its decision 39.33 to cease doing business in the small employer market; and 39.34 (2) the commissioner deems it appropriate. 39.35 Sec. 22. Minnesota Statutes 2000, section 62L.10, 39.36 subdivision 4, is amended to read: 40.1 Subd. 4. [REVIEW OF PREMIUM RATES.] The commissioner shall 40.2 regulate premium rates charged or proposed to be charged by all 40.3 health carriers in the small employer market under section 40.4 62A.02.The commissioner of health has, with respect to40.5carriers under that commissioner's jurisdiction, all of the40.6powers of the commissioner of commerce under that section.40.7 Sec. 23. Minnesota Statutes 2000, section 62L.11, 40.8 subdivision 2, is amended to read: 40.9 Subd. 2. [ENFORCEMENT POWERS.] Thecommissioners40.10 commissioner ofhealth andcommerceeachhas for purposes of 40.11 this chapter all ofeachthe commissioner'srespectivepowers 40.12 under other chapters that are applicable totheir respectivethe 40.13 commissioner's duties under this chapter. 40.14 Sec. 24. Minnesota Statutes 2000, section 62M.11, is 40.15 amended to read: 40.16 62M.11 [COMPLAINTS TO COMMERCEOR HEALTH.] 40.17 Notwithstanding the provisions of sections 62M.01 to 40.18 62M.16, an enrollee may file a complaint regarding a 40.19 determination not to certify directly to the commissioner 40.20responsible for regulating the utilization review40.21organizationof commerce. 40.22 Sec. 25. Minnesota Statutes 2000, section 62M.16, is 40.23 amended to read: 40.24 62M.16 [RULEMAKING.] 40.25 If it is determined that rules are reasonable and necessary 40.26 to accomplish the purpose of sections 62M.01 to 62M.16, the 40.27 rules must be adoptedthrough a joint rulemaking processbyboth40.28 thedepartmentcommissioner of commerceand the department of40.29health. 40.30 Sec. 26. Minnesota Statutes 2000, section 62N.02, 40.31 subdivision 4, is amended to read: 40.32 Subd. 4. [COMMISSIONER.] "Commissioner" means the 40.33 commissioner ofhealthcommerce or the commissioner's designated 40.34 representative. 40.35 Sec. 27. Minnesota Statutes 2000, section 62N.26, is 40.36 amended to read: 41.1 62N.26 [SHARED SERVICES COOPERATIVE.] 41.2 The commissioner ofhealthcommerce shall establish, or 41.3 assist in establishing, a shared services cooperative organized 41.4 under chapter 308A to make available administrative and legal 41.5 services, technical assistance, provider contracting and billing 41.6 services, and other services to those community integrated 41.7 service networks that choose to participate in the cooperative. 41.8 The commissioner shall provide, to the extent funds are 41.9 appropriated, start-up loans sufficient to maintain the shared 41.10 services cooperative until its operations can be maintained by 41.11 fees and contributions. The cooperative must not be staffed, 41.12 administered, or supervised by the commissioner ofhealth41.13 commerce. The cooperative shall make use of existing resources 41.14 that are already available in the community, to the extent 41.15 possible. 41.16 Sec. 28. Minnesota Statutes 2000, section 62Q.01, 41.17 subdivision 2, is amended to read: 41.18 Subd. 2. [COMMISSIONER.] "Commissioner" means the 41.19 commissioner ofhealth for purposes of regulating health41.20maintenance organizations, and community integrated service41.21networks, or the commissioner ofcommercefor purposes of41.22regulating all other health plan companies. For all other41.23purposes, "commissioner" means the commissioner of health. 41.24 Sec. 29. Minnesota Statutes 2000, section 62Q.03, 41.25 subdivision 5a, is amended to read: 41.26 Subd. 5a. [PUBLIC PROGRAMS.] (a) A separate risk 41.27 adjustment system must be developed for state-run public 41.28 programs, including medical assistance, general assistance 41.29 medical care, and MinnesotaCare. The system must be developed 41.30 in accordance with the general risk adjustment methodologies 41.31 described in this section, must include factors in addition to 41.32 age and sex adjustment, and may include additional demographic 41.33 factors, different targeted conditions, and/or different payment 41.34 amounts for conditions. The risk adjustment system for public 41.35 programs must attempt to reflect the special needs related to 41.36 poverty, cultural, or language barriers and other needs of the 42.1 public program population. 42.2 (b) The commissioners of health and human services shall 42.3 jointly convene a public programs risk adjustment work group 42.4 responsible for advising the commissioners in the design of the 42.5 public programs risk adjustment system. The public programs 42.6 risk adjustment work group is governed by section 15.059 for 42.7 purposes of membership terms, expiration, and removal of 42.8 members. The work group shall meet at the discretion of the 42.9 commissioners of health and human services. The commissioner of 42.10 health shall work with the risk adjustment association to ensure 42.11 coordination between the risk adjustment systems for the public 42.12 and private sectors. The commissioner of human services shall 42.13 seek any needed federal approvals necessary for the inclusion of 42.14 the medical assistance program in the public programs risk 42.15 adjustment system. 42.16 (c) The public programs risk adjustment work group must be 42.17 representative of the persons served by publicly paid health 42.18 programs and providers and health plans that meet their needs. 42.19 To the greatest extent possible, the appointing authorities 42.20 shall attempt to select representatives that have historically 42.21 served a significant number of persons in publicly paid health 42.22 programs or the uninsured. Membership of the work group shall 42.23 be as follows: 42.24 (1) one provider member appointed by the Minnesota Medical 42.25 Association; 42.26 (2) two provider members appointed by the Minnesota 42.27 Hospital Association, at least one of whom must represent a 42.28 major disproportionate share hospital; 42.29 (3) five members appointed by the Minnesota Council of 42.30 HMOs, one of whom must represent an HMO with fewer than 50,000 42.31 enrollees located outside the metropolitan area and one of whom 42.32 must represent an HMO with at least 50 percent of total 42.33 membership enrolled through a public program; 42.34 (4) two representatives of counties appointed by the 42.35 Association of Minnesota Counties; 42.36 (5) three representatives of organizations representing the 43.1 interests of families, children, childless adults, and elderly 43.2 persons served by the various publicly paid health programs 43.3 appointed by the governor; 43.4 (6) two representatives of persons with mental health, 43.5 developmental or physical disabilities, chemical dependency, or 43.6 chronic illness appointed by the governor; and 43.7 (7) three public members appointed by the governor, at 43.8 least one of whom must represent a community health board. The 43.9 risk adjustment association may appoint a representative, if a 43.10 representative is not otherwise appointed by an appointing 43.11 authority. 43.12 (d) The commissioners of health and human services, with 43.13 the advice of the public programs risk adjustment work group, 43.14 shall develop a work plan and time frame and shall coordinate 43.15 their efforts with the private sector risk adjustment 43.16 association's activities and other state initiatives related to 43.17 public program managed care reimbursement. 43.18 (e) Before including risk adjustment in a contract for the 43.19 prepaid medical assistance program, the prepaid general 43.20 assistance medical care program, or the MinnesotaCare program, 43.21 the commissioner of human services shall provide to the 43.22 contractor an analysis of the expected impact on the contractor 43.23 of the implementation of risk adjustment. This analysis may be 43.24 limited by the available data and resources, as determined by 43.25 the commissioner of human services, and shall not be binding on 43.26 future contract periods. This paragraph shall not apply if the 43.27 contractor has not supplied information to the commissioner of 43.28 human services related to the risk adjustment analysis. 43.29 (f) The commissioner of human services shall report to the 43.30 public program risk adjustment work group on the methodology the 43.31 department will use for risk adjustment prior to implementation 43.32 of the risk adjustment payment methodology. Upon completion of 43.33 the report to the work group, the commissioner of human services 43.34 shall phase in risk adjustment according to the following 43.35 schedule: 43.36 (1) for the first contract year, no more than ten percent 44.1 of reimbursements shall be risk adjusted; and 44.2 (2) for the second contract year, no more than 30 percent 44.3 of reimbursements shall be risk adjusted. 44.4 Sec. 30. Minnesota Statutes 2000, section 62Q.07, is 44.5 amended to read: 44.6 62Q.07 [ACTION PLANS.] 44.7 Subdivision 1. [ACTION PLANS REQUIRED.] (a) To increase 44.8 public awareness and accountability of health plan companies, 44.9 all health plan companies that issue or renew ahealth plan, as44.10defined in section 62Q.01managed care plan, as defined in 44.11 section 62U.01, must annually file with theapplicable44.12 commissioner an action plan that satisfies the requirements of 44.13 this section beginning July 1, 1994, as a condition of doing 44.14 business in Minnesota.For purposes of this subdivision,44.15"health plan" includes the coverages described in section44.1662A.011, subdivision 3, clause (10).Each health plan company 44.17 must also file its action plan with the information 44.18 clearinghouse. Action plans are required solely to provide 44.19 information to consumers, purchasers, and the larger community 44.20 as a first step toward greater accountability of health plan 44.21 companies. The sole function of the commissioner in relation to 44.22 the action plans is to ensure that each health plan company 44.23 files a complete action plan, that the action plan is truthful 44.24 and not misleading, and that the action plan is reviewed by 44.25 appropriate community agencies. 44.26 (b) Ifathe commissionerresponsible for regulating a44.27health plan company required to file an action plan under this44.28sectionhas reason to believe an action plan is false or 44.29 misleading, the commissioner may conduct an investigation to 44.30 determine whether the action plan is truthful and not 44.31 misleading, and may require the health plan company to submit 44.32 any information that the commissioner reasonably deems necessary 44.33 to complete the investigation. If the commissioner determines 44.34 that an action plan is false or misleading, the commissioner may 44.35 require the health plan company to file an amended plan or may 44.36 take any action authorized under chapter 72A. 45.1 Subd. 2. [CONTENTS OF ACTION PLANS.](a) An action plan45.2must include a detailed description of all of the health plan45.3company's methods and procedures, standards, qualifications,45.4criteria, and credentialing requirements for designating the45.5providers who are eligible to participate in the health plan45.6company's provider network, including any limitations on the45.7numbers of providers to be included in the network. This45.8description must be updated by the health plan company and filed45.9with the applicable agency on a quarterly basis.45.10(b) An action plan must include the number of full-time45.11equivalent physicians, by specialty, nonphysician providers, and45.12allied health providers used to provide services. The action45.13plan must also describe how the health plan company intends to45.14encourage the use of nonphysician providers, midlevel45.15practitioners, and allied health professionals, through at least45.16consumer education, physician education, and referral and45.17advisement systems. The annual action plan must also include45.18data that is broken down by type of provider, reflecting actual45.19utilization of midlevel practitioners and allied professionals45.20by enrollees of the health plan company during the previous45.21year. Until July 1, 1995, a health plan company may use45.22estimates if actual data is not available. For purposes of this45.23paragraph, "provider" has the meaning given in section 62J.03,45.24subdivision 8.45.25(c) An action plan must include a description of the health45.26plan company's policy on determining the number and the type of45.27providers that are necessary to deliver cost-effective health45.28care to its enrollees. The action plan must also include the45.29health plan company's strategy, including provider recruitment45.30and retention activities, for ensuring that sufficient providers45.31are available to its enrollees.45.32(d) An action plan must include a description of actions45.33taken or planned by the health plan company to ensure that45.34information from report cards, outcome studies, and complaints45.35is used internally to improve quality of the services provided45.36by the health plan company.46.1(e)An action plan must include a detailed description of 46.2 the health plan company's policies and procedures for enrolling 46.3 and serving high risk and special needs populations. This 46.4 description must also include the barriers that are present for 46.5 the high risk and special needs population and how the health 46.6 plan company is addressing these barriers in order to provide 46.7 greater access to these populations. "High risk and special 46.8 needs populations" includes, but is not limited to, recipients 46.9 of medical assistance, general assistance medical care, and 46.10 MinnesotaCare; persons with chronic conditions or disabilities; 46.11 individuals within certain racial, cultural, and ethnic 46.12 communities; individuals and families with low income; 46.13 adolescents; the elderly; individuals with limited or no English 46.14 language proficiency; persons with high-cost preexisting 46.15 conditions; homeless persons; chemically dependent persons; 46.16 persons with serious and persistent mental illness; children 46.17 with severe emotional disturbance; and persons who are at high 46.18 risk of requiring treatment. For purposes of this paragraph, 46.19 "provider" has the meaning given in section 62J.03, subdivision 46.20 8. 46.21(f) An action plan must include a general description of46.22any action the health plan company has taken and those it46.23intends to take to offer health coverage options to rural46.24communities and other communities not currently served by the46.25health plan company.46.26(g) A health plan company other than a large managed care46.27plan company may satisfy any of the requirements of the action46.28plan in paragraphs (a) to (f) by stating that it has no46.29policies, procedures, practices, or requirements, either written46.30or unwritten, or formal or informal, and has undertaken no46.31activities or plans on the issues required to be addressed in46.32the action plan, provided that the statement is truthful and not46.33misleading. For purposes of this paragraph, "large managed care46.34plan company" means a health maintenance organization or other46.35health plan company that employs or contracts with health care46.36providers, that has more than 50,000 enrollees in this state.47.1If a health plan company employs or contracts with providers for47.2some of its health plans and does not do so for other health47.3plans that it offers, the health plan company is a large managed47.4care plan company if it has more than 50,000 enrollees in this47.5state in health plans for which it does employ or contract with47.6providers.47.7 Sec. 31. Minnesota Statutes 2000, section 62Q.106, is 47.8 amended to read: 47.9 62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER.] 47.10 A complainant may at any time submit a complaint to the 47.11appropriatecommissioner to investigate. After investigating a 47.12 complaint, or reviewing a company's decision, theappropriate47.13 commissioner may order a remedy as authorized under chapter 45, 47.14 60A, or 62D. 47.15 Sec. 32. Minnesota Statutes 2000, section 62Q.22, 47.16 subdivision 2, is amended to read: 47.17 Subd. 2. [REGISTRATION.] A community health clinic that 47.18 offers a prepaid option under this section must register on an 47.19 annual basis with the commissionerof health. 47.20 Sec. 33. Minnesota Statutes 2000, section 62Q.22, 47.21 subdivision 6, is amended to read: 47.22 Subd. 6. [INFORMATION TO BE PROVIDED.] (a) A community 47.23 health clinic must provide an individual or family who purchases 47.24 a prepaid option a clear and concise written statement that 47.25 includes the following information: 47.26 (1) the health care services that the prepaid option 47.27 covers; 47.28 (2) any exclusions or limitations on the health care 47.29 services offered, including any preexisting condition 47.30 limitations, cost-sharing arrangements, or prior authorization 47.31 requirements; 47.32 (3) where the health care services may be obtained; 47.33 (4) a description of the clinic's method for resolving 47.34 patient complaints, including a description of how a patient can 47.35 file a complaint with thedepartment of healthcommissioner of 47.36 commerce; and 48.1 (5) a description of the conditions under which the prepaid 48.2 option may be canceled or terminated. 48.3 (b) The commissioner ofhealthcommerce must approve a copy 48.4 of the written statement before the community health clinic may 48.5 offer the prepaid option described in this section. 48.6 Sec. 34. Minnesota Statutes 2000, section 62Q.22, 48.7 subdivision 7, is amended to read: 48.8 Subd. 7. [COMPLAINT PROCESS.] (a) A community health 48.9 clinic that offers a prepaid option under this section must 48.10 establish a complaint resolution process. As an alternative to 48.11 establishing its own process, a community health clinic may use 48.12 the complaint process of another organization. 48.13 (b) A community health clinic must make reasonable efforts 48.14 to resolve complaints and to inform complainants in writing of 48.15 the clinic's decision within 60 days of receiving the complaint. 48.16 (c) A community health clinic that offers a prepaid option 48.17 under this section must report all complaints that are not 48.18 resolved within 60 days to the commissionerof health. 48.19 Sec. 35. Minnesota Statutes 2000, section 62Q.32, is 48.20 amended to read: 48.21 62Q.32 [LOCAL OMBUDSPERSON.] 48.22 County board or community health service agencies may 48.23 establish an office of ombudsperson to provide a system of 48.24 consumer advocacy for persons receiving health care services 48.25 through a health plan company. The ombudsperson's functions may 48.26 include, but are not limited to:48.27(a), mediation or advocacy on behalf of a person accessing 48.28 the complaint and appeal procedures to ensure that necessary 48.29 medical services are provided by the health plan company; and48.30(b) investigation of the quality of services provided to a48.31person and determine the extent to which quality assurance48.32mechanisms are needed or any other system change may be needed.48.33The commissioner of health shall make recommendations for48.34funding these functions including the amount of funding needed48.35and a plan for distribution. The commissioner shall submit48.36these recommendations to the legislative commission on health49.1care access by January 15, 1996. 49.2 Sec. 36. Minnesota Statutes 2000, section 62Q.33, 49.3 subdivision 2, is amended to read: 49.4 Subd. 2. [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 49.5 of health, in consultation with the state community health 49.6 services advisory committee and the commissioner of human 49.7 services, and representatives of local health departments, 49.8 county government, a municipal government acting as a local 49.9 board of health, area Indian health services, health care 49.10 providers, and citizens concerned about public health, shall 49.11 coordinate the process for defining implementation and financing 49.12 responsibilities of the local government core public health 49.13 functions. The commissioner of health shall submit 49.14 recommendations and an initial and final report on local 49.15 government core public health functions according to the 49.16 timeline established in subdivision 5. 49.17 Sec. 37. Minnesota Statutes 2000, section 62Q.49, 49.18 subdivision 2, is amended to read: 49.19 Subd. 2. [DISCLOSURE REQUIRED.] (a) All health plans 49.20 included in subdivision 1 must clearly specify how the cost of 49.21 health care used to calculate any copayments, coinsurance, or 49.22 lifetime benefits will be affected by the arrangements described 49.23 in subdivision 1. 49.24 (b) Any summary or other marketing material used in 49.25 connection with marketing of a health plan that is subject to 49.26 this section must prominently disclose and clearly explain the 49.27 provisions required under paragraph (a), if the summary or other 49.28 marketing material refers to copayments, coinsurance, or maximum 49.29 lifetime benefits. 49.30 (c) A health plan that is subject to paragraph (a) must not 49.31 be used in this state if the commissioner of commerceor health,49.32as appropriate,has determined that it does not comply with this 49.33 section. 49.34 Sec. 38. Minnesota Statutes 2000, section 62Q.51, 49.35 subdivision 3, is amended to read: 49.36 Subd. 3. [RATE APPROVAL.] The premium rates and cost 50.1 sharing requirements for each option must be submitted to the 50.2 commissionerof health or the commissionerof commerce as 50.3 required by law. A health plan that includes lower enrollee 50.4 cost sharing for services provided by network providers than for 50.5 services provided by out-of-network providers, or lower enrollee 50.6 cost sharing for services provided with prior authorization or 50.7 second opinion than for services provided without prior 50.8 authorization or second opinion, qualifies as a point-of-service 50.9 option. 50.10 Sec. 39. Minnesota Statutes 2000, section 62Q.525, 50.11 subdivision 3, is amended to read: 50.12 Subd. 3. [REQUIRED COVERAGE.] (a) Every type of coverage 50.13 included in subdivision 1 that provides coverage for drugs may 50.14 not exclude coverage of a drug for the treatment of cancer on 50.15 the ground that the drug has not been approved by the federal 50.16 Food and Drug Administration for the treatment of cancer if the 50.17 drug is recognized for treatment of cancer in one of the 50.18 standard reference compendia or in one article in the medical 50.19 literature, as defined in subdivision 2. 50.20 (b) Coverage of a drug required by this subdivision 50.21 includes coverage of medically necessary services directly 50.22 related to and required for appropriate administration of the 50.23 drug. 50.24 (c) Coverage required by this subdivision does not include 50.25 coverage of a drug not listed on the formulary of the coverage 50.26 included in subdivision 1. 50.27 (d) Coverage of a drug required under this subdivision must 50.28 not be subject to any copayment, coinsurance, deductible, or 50.29 other enrollee cost-sharing greater than the coverage included 50.30 in subdivision 1 applies to other drugs. 50.31 (e) The commissioner of commerceor health, as appropriate,50.32 may direct a person that issues coverage included in subdivision 50.33 1 to make payments required by this section. 50.34 Sec. 40. Minnesota Statutes 2000, section 62Q.68, 50.35 subdivision 1, is amended to read: 50.36 Subdivision 1. [APPLICATION.] For purposes of sections 51.1 62Q.68 to 62Q.72, the terms defined in this section have the 51.2 meanings given them. For purposes of sections 62Q.69 and 51.3 62Q.70, the term "health plan company" does not, except with 51.4 respect to managed care plans, as defined in section 62U.01, 51.5 include an insurance company licensed under chapter 60A to 51.6 offer, sell, or issue a policy of accident and sickness 51.7 insurance as defined in section 62A.01 or a nonprofit health 51.8 service plan corporation regulated under chapter 62C that only 51.9 provides dental coverage or vision coverage. 51.10 Sec. 41. Minnesota Statutes 2000, section 62Q.69, 51.11 subdivision 2, is amended to read: 51.12 Subd. 2. [PROCEDURES FOR FILING A COMPLAINT.] (a) A 51.13 complainant may submit a complaint to a health plan company 51.14 either by telephone or in writing. If a complaint is submitted 51.15 orally and the resolution of the complaint, as determined by the 51.16 complainant, is partially or wholly adverse to the complainant, 51.17 or the oral complaint is not resolved to the satisfaction of the 51.18 complainant, by the health plan company within ten days of 51.19 receiving the complaint, the health plan company must inform the 51.20 complainant that the complaint may be submitted in writing. The 51.21 health plan company must also offer to provide the complainant 51.22 with any assistance needed to submit a written complaint, 51.23 including an offer to complete the complaint form for a 51.24 complaint that was previously submitted orally and promptly mail 51.25 the completed form to the complainant for the complainant's 51.26 signature. At the complainant's request, the health plan 51.27 company must provide the assistance requested by the 51.28 complainant. The complaint form must include the following 51.29 information: 51.30 (1) the telephone number of the office of health care 51.31 consumer assistance, advocacy, and information, and the health 51.32 plan company member services or other departments or persons 51.33 equipped to advise complainants on complaint resolution; 51.34 (2) the address to which the form must be sent; 51.35 (3) a description of the health plan company's internal 51.36 complaint procedure and the applicable time limits; and 52.1 (4) the toll-free telephone number ofeitherthe 52.2 commissioner ofhealth orcommerce and notification that the 52.3 complainant has the right to submit the complaint at any time to 52.4 theappropriatecommissioner for investigation. 52.5 (b) Upon receipt of a written complaint, the health plan 52.6 company must notify the complainant within ten business days 52.7 that the complaint was received, unless the complaint is 52.8 resolved to the satisfaction of the complainant within the ten 52.9 business days. 52.10 (c) Each health plan company must provide, in the member 52.11 handbook, subscriber contract, or certification of coverage, a 52.12 clear and concise description of how to submit a complaint and a 52.13 statement that, upon request, assistance in submitting a written 52.14 complaint is available from the health plan company. 52.15 Sec. 42. Minnesota Statutes 2000, section 62Q.69, 52.16 subdivision 3, is amended to read: 52.17 Subd. 3. [NOTIFICATION OF COMPLAINT DECISIONS.] (a) The 52.18 health plan company must notify the complainant in writing of 52.19 its decision and the reasons for it as soon as practical but in 52.20 no case later than 30 days after receipt of a written complaint. 52.21 If the health plan company cannot make a decision within 30 days 52.22 due to circumstances outside the control of the health plan 52.23 company, the health plan company may take up to 14 additional 52.24 days to notify the complainant of its decision. If the health 52.25 plan company takes any additional days beyond the initial 30-day 52.26 period to make its decision, it must inform the complainant, in 52.27 advance, of the extension and the reasons for the extension. 52.28 (b) If the decision is partially or wholly adverse to the 52.29 complainant, the notification must inform the complainant of the 52.30 right to appeal the decision to the health plan company's 52.31 internal appeal process described in section 62Q.70 and the 52.32 procedure for initiating an appeal. 52.33 (c) The notification must also inform the complainant of 52.34 the right to submit the complaint at any time toeitherthe 52.35 commissioner ofhealth orcommerce for investigation and the 52.36 toll-free telephone number of theappropriatecommissioner. 53.1 Sec. 43. Minnesota Statutes 2000, section 62Q.71, is 53.2 amended to read: 53.3 62Q.71 [NOTICE TO ENROLLEES.] 53.4 Each health plan company shall provide to enrollees a clear 53.5 and concise description of its complaint resolution procedure, 53.6 if applicable under section 62Q.68, subdivision 1, and the 53.7 procedure used for utilization review as defined under chapter 53.8 62M as part of the member handbook, subscriber contract, or 53.9 certificate of coverage. If the health plan company does not 53.10 issue a member handbook, the health plan company may provide the 53.11 description in another written document. The description must 53.12 specifically inform enrollees: 53.13 (1) how to submit a complaint to the health plan company; 53.14 (2) if the health plan includes utilization review 53.15 requirements, how to notify the utilization review organization 53.16 in a timely manner and how to obtain certification for health 53.17 care services; 53.18 (3) how to request an appeal either through the procedures 53.19 described in sections 62Q.69 and 62Q.70 or through the 53.20 procedures described in chapter 62M; 53.21 (4) of the right to file a complaint witheitherthe 53.22 commissioner ofhealth orcommerce at any time during the 53.23 complaint and appeal process; 53.24 (5) of the toll-free telephone number of theappropriate53.25 commissioner; and 53.26 (6)of the telephone number of the office of consumer53.27assistance, advocacy, and information; and53.28(7)of the right to obtain an external review under section 53.29 62Q.73 and a description of when and how that right may be 53.30 exercised. 53.31 Sec. 44. Minnesota Statutes 2000, section 62Q.72, is 53.32 amended to read: 53.33 62Q.72 [RECORDKEEPING; REPORTING.] 53.34 Subdivision 1. [RECORDKEEPING.] Each health plan company 53.35 shall maintain records of all enrollee complaints and their 53.36 resolutions. These records shall be retained for five years and 54.1 shall be made available to theappropriatecommissioner upon 54.2 request. An insurance company licensed under chapter 60A may 54.3 instead comply with section 72A.20, subdivision 30, except with 54.4 respect to managed care plans, as defined in section 62U.01. 54.5 Subd. 2. [REPORTING.] Each health plan company shall 54.6 submit to theappropriatecommissioner, as part of the company's 54.7 annual filing, data on the number and type of complaints that 54.8 are not resolved within 30 days, or, except with respect to 54.9 managed care plans, as defined in section 62U.01, 30 business 54.10 days as provided under section 72A.201, subdivision 4, clause 54.11 (3), for insurance companies licensed under chapter 60A. The 54.12 commissioner shall also make this information available to the 54.13 public upon request. 54.14 Sec. 45. Minnesota Statutes 2000, section 62Q.73, 54.15 subdivision 3, is amended to read: 54.16 Subd. 3. [RIGHT TO EXTERNAL REVIEW.] (a) Any enrollee or 54.17 anyone acting on behalf of an enrollee who has received an 54.18 adverse determination may submit a written request for an 54.19 external review of the adverse determination, if applicable 54.20 under section 62Q.68, subdivision 1, or 62M.06, to the 54.21commissioner of health if the request involves a health plan54.22company regulated by that commissioner or to thecommissioner of 54.23 commerceif the request involves a health plan company regulated54.24by that commissioner. The written request must be accompanied 54.25 by a filing fee of $25. The fee may be waived by the 54.26 commissioner ofhealth orcommerce in cases of financial 54.27 hardship. 54.28 (b) Nothing in this section requires the commissioner of 54.29health orcommerce to independently investigate an adverse 54.30 determination referred for independent external review. 54.31 (c) If an enrollee requests an external review, the health 54.32 plan company must participate in the external review. The cost 54.33 of the external review in excess of the filing fee described in 54.34 paragraph (a) shall be borne by the health plan company. 54.35 Sec. 46. Minnesota Statutes 2000, section 62Q.73, 54.36 subdivision 4, is amended to read: 55.1 Subd. 4. [CONTRACT.] Pursuant to a request for proposal, 55.2 the commissioner of administration, in consultation with 55.3 thecommissioners of health andcommissioner of commerce, shall 55.4 contract with an organization or business entity to provide 55.5 independent external reviews of all adverse determinations 55.6 submitted for external review. The contract shall ensure that 55.7 the fees for services rendered in connection with the reviews be 55.8 reasonable. 55.9 Sec. 47. Minnesota Statutes 2000, section 62Q.73, 55.10 subdivision 5, is amended to read: 55.11 Subd. 5. [CRITERIA.] (a) The request for proposal must 55.12 require that the entity demonstrate: 55.13 (1) no conflicts of interest in that it is not owned, a 55.14 subsidiary of, or affiliated with a health plan company or 55.15 utilization review organization; 55.16 (2) an expertise in dispute resolution; 55.17 (3) an expertise in health-related law; 55.18 (4) an ability to conduct reviews using a variety of 55.19 alternative dispute resolution procedures depending upon the 55.20 nature of the dispute; 55.21 (5) an ability to provide data to thecommissioners of55.22health andcommissioner of commerce on reviews conducted; and 55.23 (6) an ability to ensure confidentiality of medical records 55.24 and other enrollee information. 55.25 (b) The commissioner of administration shall take into 55.26 consideration, in awarding the contract according to subdivision 55.27 4, any national accreditation standards that pertain to an 55.28 external review entity. 55.29 Sec. 48. Minnesota Statutes 2000, section 62Q.73, 55.30 subdivision 6, is amended to read: 55.31 Subd. 6. [PROCESS.] (a) Upon receiving a request for an 55.32 external review, the external review entity must provide 55.33 immediate notice of the review to the enrollee and to the health 55.34 plan company. Within ten business days of receiving notice of 55.35 the review, the health plan company and the enrollee must 55.36 provide the external review entity with any information that 56.1 they wish to be considered. Each party shall be provided an 56.2 opportunity to present its version of the facts and arguments. 56.3 An enrollee may be assisted or represented by a person of the 56.4 enrollee's choice. 56.5 (b) As part of the external review process, any aspect of 56.6 an external review involving a medical determination must be 56.7 performed by a health care professional with expertise in the 56.8 medical issue being reviewed. 56.9 (c) An external review shall be made as soon as practical 56.10 but in no case later than 40 days after receiving the request 56.11 for an external review and must promptly send written notice of 56.12 the decision and the reasons for it to the enrollee, the health 56.13 plan company, and the commissionerwho is responsible for56.14regulating the health plan company. 56.15 Sec. 49. Minnesota Statutes 2000, section 62R.04, 56.16 subdivision 5, is amended to read: 56.17 Subd. 5. [COMMISSIONER.] Unless otherwise specified, 56.18 "commissioner" means the commissionerof health for a health56.19care network cooperative licensed under chapter 62D or 62N and56.20the commissionerof commercefor a health care network56.21cooperative licensed under chapter 62C. 56.22 Sec. 50. Minnesota Statutes 2000, section 62R.06, 56.23 subdivision 1, is amended to read: 56.24 Subdivision 1. [PROVIDER CONTRACTS.] A health provider 56.25 cooperative and its licensed members may execute marketing and 56.26 service contracts requiring the provider members to provide some 56.27 or all of their health care services through the provider 56.28 cooperative to the enrollees, members, subscribers, or insureds, 56.29 of a health care network cooperative, community integrated 56.30 service network, nonprofit health service plan, health 56.31 maintenance organization, accident and health insurance company, 56.32 or any other purchaser, including the state of Minnesota and its 56.33 agencies, instruments, or units of local government. Each 56.34 purchasing entity is authorized to execute contracts for the 56.35 purchase of health care services from a health provider 56.36 cooperative in accordance with this section. A contract between 57.1 a provider cooperative and a purchaser may provide for payment 57.2 by the purchaser to the health provider cooperative on a 57.3 capitated or similar risk-sharing basis, by fee-for-service 57.4 arrangements, or by other financial arrangements authorized 57.5 under state law. Each contract between a provider cooperative 57.6 and a purchaser shall be filed by the provider network 57.7 cooperative with the commissioner ofhealthcommerce and is 57.8 subject to the provisions of section 62D.19. 57.9 Sec. 51. Minnesota Statutes 2000, section 62T.01, 57.10 subdivision 4, is amended to read: 57.11 Subd. 4. [COMMISSIONER.] "Commissioner" means the 57.12 commissioner ofhealthcommerce. 57.13 Sec. 52. Minnesota Statutes 2000, section 256B.692, 57.14 subdivision 2, is amended to read: 57.15 Subd. 2. [DUTIES OF THE COMMISSIONER OFHEALTHCOMMERCE.] 57.16 (a) Notwithstanding chapters 62D and 62N, a county that elects 57.17 to purchase medical assistance and general assistance medical 57.18 care in return for a fixed sum without regard to the frequency 57.19 or extent of services furnished to any particular enrollee is 57.20 not required to obtain a certificate of authority under chapter 57.21 62D or 62N. The county board of commissioners is the governing 57.22 body of a county-based purchasing program. In a multicounty 57.23 arrangement, the governing body is a joint powers board 57.24 established under section 471.59. 57.25 (b) A county that elects to purchase medical assistance and 57.26 general assistance medical care services under this section must 57.27 satisfy the commissioner ofhealthcommerce that the 57.28 requirements for assurance of consumer protection, provider 57.29 protection, and fiscal solvency of chapter 62D, applicable to 57.30 health maintenance organizations, or chapter 62N, applicable to 57.31 community integrated service networks, will be met. 57.32 (c) A county must also assure the commissioner ofhealth57.33 commerce that the requirements of sections 62J.041; 62J.48; 57.34 62J.71 to 62J.73; 62M.01 to 62M.16; all applicable provisions of 57.35 chapter 62Q, including sections 62Q.07; 62Q.075; 62Q.1055; 57.36 62Q.106; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, 58.1 paragraph (c); 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 58.2 62Q.64; 62Q.68 to 62Q.72; and 72A.201 will be met. 58.3 (d) All enforcement and rulemaking powers available under 58.4 chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 58.5 commissioner ofhealthcommerce with respect to counties that 58.6 purchase medical assistance and general assistance medical care 58.7 services under this section. 58.8 (e) The commissioner, in consultation with county 58.9 government, shall develop administrative and financial reporting 58.10 requirements for county-based purchasing programs relating to 58.11 sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 58.12 62N.31, and other sections as necessary, that are specific to 58.13 county administrative, accounting, and reporting systems and 58.14 consistent with other statutory requirements of counties. 58.15 Sec. 53. Minnesota Statutes 2000, section 256B.692, 58.16 subdivision 7, is amended to read: 58.17 Subd. 7. [DISPUTE RESOLUTION.] In the event the 58.18 commissioner rejects a proposal under subdivision 6, the county 58.19 board may request the recommendation of a three-person mediation 58.20 panel. The commissioner shall resolve all disputes after taking 58.21 into account the recommendations of the mediation panel. The 58.22 panel shall be composed of one designee of the president of the 58.23 association of Minnesota counties, one designee of the 58.24 commissioner of human services, and one designee of the 58.25 commissioner ofhealthcommerce. 58.26 Sec. 54. [TRANSFER OF REGULATORY AUTHORITY; CERTAIN 58.27 HEALTH-RELATED ORGANIZATIONS.] 58.28 (a) Regulatory authority for health maintenance 58.29 organizations operating under Minnesota Statutes, chapter 62D; 58.30 community integrated service networks, as defined in Minnesota 58.31 Statutes, section 62N.02, subdivision 4a; health care 58.32 cooperatives operating under Minnesota Statutes, chapter 62R; 58.33 and health care purchasing alliances and accountable provider 58.34 networks operating under Minnesota Statutes, chapter 62T; is 58.35 transferred from the commissioner of health to the commissioner 58.36 of commerce, effective January 1, 2002. 59.1 (b) Minnesota Statutes, section 15.039, applies to the 59.2 transfer provided in paragraph (a). 59.3 Sec. 55. [REVISOR INSTRUCTION.] 59.4 The revisor of statutes shall change the term "commissioner 59.5 of health" and similar references to "commissioner of commerce" 59.6 and change the term "department of health" and similar 59.7 references to "department of commerce" in Minnesota Statutes, 59.8 chapters 62D, but not section 62D.02, subdivision 12; 62E; and 59.9 62N. 59.10 Sec. 56. [STUDY AND REPORT.] 59.11 The commissioner of health shall study and report to the 59.12 legislature, no later than January 1, 2004, on premium cost, 59.13 subscriber liability, and health outcomes under different types 59.14 of health plan regulation by the state. The commissioner shall 59.15 use data available to the commissioner under Minnesota Statutes, 59.16 section 62J.38, and otherwise. The reports must be submitted to 59.17 the legislature in compliance with Minnesota Statutes, section 59.18 3.195. 59.19 Sec. 57. [REPEALER.] 59.20 Minnesota Statutes 2000, sections 62Q.095; 62Q.10; and 59.21 62Q.45, are repealed. 59.22 Sec. 58. [EFFECTIVE DATE.] 59.23 Sections 1 to 57 are effective January 1, 2002. Amendments 59.24 involving transfer of regulatory authority to the commissioner 59.25 of commerce are effective on that date. Amendments affecting 59.26 coverage are effective that date and apply to coverage issued or 59.27 renewed on or after that date. 59.28 ARTICLE 3 59.29 MINIMUM BENEFITS CONFORMITY 59.30 Section 1. Minnesota Statutes 2000, section 62A.041, 59.31 subdivision 1, is amended to read: 59.32 Subdivision 1. [DISCRIMINATION PROHIBITED AGAINST 59.33 UNMARRIED WOMEN.] Each group policy of accident and health 59.34 insurance and each group healthmaintenance contractplan shall 59.35 provide the same coverage for maternity benefits to unmarried 59.36 women and minor female dependents that it provides to married 60.1 women including the wives of employees choosing dependent family 60.2 coverage. If an unmarried insured or an unmarried enrollee is a 60.3 parent of a dependent child, each group policy and each group 60.4contracthealth plan shall provide the same coverage for that 60.5 child as that provided for the child of a married employee 60.6 choosing dependent family coverage if the insured or the 60.7 enrollee elects dependent family coverage. 60.8 Each individual policy of accident and health insurance and 60.9 each individual healthmaintenance contractplan shall provide 60.10 the same coverage for maternity benefits to unmarried women and 60.11 minor female dependents as that provided for married women. If 60.12 an unmarried insured or an unmarried enrollee is a parent of a 60.13 dependent child, each individual policy and each individual 60.14contracthealth plan shall also provide the same coverage for 60.15 that child as that provided for the child of a married insured 60.16 or a married enrollee choosing dependent family coverage if the 60.17 insured or the enrollee elects dependent family coverage. 60.18 Sec. 2. Minnesota Statutes 2000, section 62A.041, 60.19 subdivision 2, is amended to read: 60.20 Subd. 2. [LIMITATION ON COVERAGE PROHIBITED.] Each group 60.21 policy of accident and health insurance, except for policies 60.22 which only provide coverage for specified diseases, or each 60.23 groupsubscriber contract of accident and health insurance or60.24health maintenance contract, issued or renewed after August 1,60.251987,health plan shall include maternity benefits in the same 60.26 manner as any other illness covered under the policy orcontract60.27 health plan. 60.28 Sec. 3. Minnesota Statutes 2000, section 62A.042, is 60.29 amended to read: 60.30 62A.042 [FAMILY COVERAGE; COVERAGE OF NEWBORN INFANTS AND 60.31 CLEFT LIP AND CLEFT PALATE.] 60.32 Subdivision 1. [INDIVIDUAL FAMILY POLICIES.] (a) No policy 60.33 of individual accident and sickness insurance which provides for 60.34 insurance for more than one person under section 62A.03, 60.35 subdivision 1, clause (3), and no individual healthmaintenance60.36contractplan which provides for coverage for more than one 61.1 personunder chapter 62D, shall be renewed to insure or cover 61.2 any person in this state or be delivered or issued for delivery 61.3 to any person in this state unless the policy orcontracthealth 61.4 plan includes as insured or covered members of the family any 61.5 newborn infants immediately from the moment of birth and 61.6 thereafter whichinsurance or contractpolicy or health plan 61.7 shall provide coverage for illness, injury, congenital 61.8 malformation, or premature birth. For purposes of this 61.9 paragraph, "newborn infants" includes grandchildren who are 61.10 financially dependent upon a covered grandparent and who reside 61.11 with that covered grandparent continuously from birth. No 61.12 policy orcontracthealth plan covered by this section may 61.13 require notification to a health carrier as a condition for this 61.14 dependent coverage. However, if the policy orcontracthealth 61.15 plan mandates an additional premium for each dependent, the 61.16 health carrier shall be entitled to all premiums that would have 61.17 been collected had the health carrier been aware of the 61.18 additional dependent. The health carrier may withhold payment 61.19 of any health benefits for the new dependent until it has been 61.20 compensated with the applicable premium which would have been 61.21 owed if the health carrier had been informed of the additional 61.22 dependent immediately. 61.23 (b) The coverage under paragraph (a) includes benefits for 61.24 inpatient or outpatient expenses arising from medical and dental 61.25 treatment up to age 18, including orthodontic and oral surgery 61.26 treatment, involved in the management of birth defects known as 61.27 cleft lip and cleft palate. If orthodontic services are 61.28 eligible for coverage under a dental insurance plan and another 61.29 policy orcontracthealth plan, the dental plan shall be primary 61.30 and the other policy orcontracthealth plan shall be secondary 61.31 in regard to the coverage required under paragraph (a). Payment 61.32 for dental or orthodontic treatment not related to the 61.33 management of the congenital condition of cleft lip and cleft 61.34 palate shall not be covered under this provision. 61.35 Subd. 2. [GROUP POLICIES.] (a) No group accident and 61.36 sickness insurance policy and no group healthmaintenance62.1contractplan whichprovideprovides for coverage of family 62.2 members or other dependents of an employee or other member of 62.3 the covered group shall be renewed to cover members of a group 62.4 located in this state or delivered or issued for delivery to any 62.5 person in this state unless the policy orcontracthealth plan 62.6 includes as insured or covered family members or dependents any 62.7 newborn infants immediately from the moment of birth and 62.8 thereafter whichinsurance or contractpolicy or health plan 62.9 shall provide coverage for illness, injury, congenital 62.10 malformation, or premature birth. For purposes of this 62.11 paragraph, "newborn infants" includes grandchildren who are 62.12 financially dependent upon a covered grandparent and who reside 62.13 with that covered grandparent continuously from birth. No 62.14 policy orcontracthealth plan covered by this section may 62.15 require notification to a health carrier as a condition for this 62.16 dependent coverage. However, if the policy orcontracthealth 62.17 plan mandates an additional premium for each dependent, the 62.18 health carrier shall be entitled to all premiums that would have 62.19 been collected had the health carrier been aware of the 62.20 additional dependent. The health carrier may reduce the health 62.21 benefits owed to the insured, certificate holder, member, or 62.22 subscriber by the amount of past due premiums applicable to the 62.23 additional dependent. 62.24 (b) The coverage under paragraph (a) includes benefits for 62.25 inpatient or outpatient expenses arising from medical and dental 62.26 treatment up to age 18, including orthodontic and oral surgery 62.27 treatment, involved in the management of birth defects known as 62.28 cleft lip and cleft palate. If orthodontic services are 62.29 eligible for coverage under a dental insurance plan and another 62.30 policy orcontracthealth plan, the dental plan shall be primary 62.31 and the other policy orcontracthealth plan shall be secondary 62.32 in regard to the coverage required under paragraph (a). Payment 62.33 for dental or orthodontic treatment not related to the 62.34 management of the congenital condition of cleft lip and cleft 62.35 palate shall not be covered under this provision. 62.36 Sec. 4. Minnesota Statutes 2000, section 62A.043, 63.1 subdivision 1, is amended to read: 63.2 Subdivision 1. The provisions of this sectionshallapply 63.3 to all individual or group policies orsubscriber contracts63.4 health plans providing payment for care in this state, which63.5policies or contracts are issued or renewed after August 1, 197663.6by an accident and health insurance company regulated under this63.7chapter, or a nonprofit health service plan corporation63.8regulated under chapter 62C. 63.9 Sec. 5. Minnesota Statutes 2000, section 62A.14, is 63.10 amended to read: 63.11 62A.14 [HANDICAPPED CHILDREN.] 63.12 Subdivision 1. [INDIVIDUAL FAMILY POLICIES.] An individual 63.13 hospital or medical expense insurance policy delivered or issued 63.14 for delivery in this state more than 120 days after May 16, 63.15 1969, or an individualhealth maintenance contracthealth plan 63.16 delivered or issued for delivery in this state after August 1, 63.17 1984, which provides that coverage of a dependent child shall 63.18 terminate upon attainment of the limiting age for dependent 63.19 children specified in the policy orcontracthealth plan shall 63.20 also provide in substance that attainment of such limiting age 63.21 shall not operate to terminate the coverage of such child while 63.22 the child is and continues to be both (a) incapable of 63.23 self-sustaining employment by reason of mental retardation, 63.24 mental illness or disorder, or physical handicap and (b) chiefly 63.25 dependent upon the policyholder for support and maintenance, 63.26 provided proof of such incapacity and dependency is furnished to 63.27 theinsurer orhealthmaintenance organizationcarrier by the 63.28 policyholder or enrollee within 31 days of the child's 63.29 attainment of the limiting age and subsequently as may be 63.30 required by theinsurer or organizationhealth carrier but not 63.31 more frequently than annually after the two-year period 63.32 following the child's attainment of the limiting age. 63.33 Subd. 2. [GROUP POLICIES.] A group hospital or medical 63.34 expense insurance policy delivered or issued for delivery in 63.35 this state more than 120 days after May 16, 1969, or a group 63.36 healthmaintenance contractplan delivered or issued for 64.1 delivery in this state after August 1, 1984, which provides that 64.2 coverage of a dependent child of an employee or other member of 64.3 the covered group shall terminate upon attainment of the 64.4 limiting age for dependent children specified in the policy 64.5 orcontracthealth plan shall also provide in substance that 64.6 attainment of such limiting age shall not operate to terminate 64.7 the coverage of such child while the child is and continues to 64.8 be both (a) incapable of self-sustaining employment by reason of 64.9 mental retardation, mental illness or disorder, or physical 64.10 handicap and (b) chiefly dependent upon the employee or member 64.11 for support and maintenance, provided proof of such incapacity 64.12 and dependency is furnished to theinsurer or organization64.13 health carrier by the employee or member within 31 days of the 64.14 child's attainment of the limiting age and subsequently as may 64.15 be required by theinsurer or organizationhealth carrier but 64.16 not more frequently than annually after the two-year period 64.17 following the child's attainment of the limiting age. 64.18 Sec. 6. Minnesota Statutes 2000, section 62A.149, 64.19 subdivision 1, is amended to read: 64.20 Subdivision 1. With the exception of managed care plans as 64.21 defined in section 62U.01, the provisions of this section apply 64.22 to all group policies of accident and health insurance and group 64.23 subscriber contracts offered by nonprofit health service plan 64.24 corporations regulated under chapter 62C, and to a plan or 64.25 policy that is individually underwritten or provided for a 64.26 specific individual and family members as a nongroup policy 64.27 unless the individual elects in writing to refuse benefits under 64.28 this subdivision in exchange for an appropriate reduction in 64.29 premiums or subscriber charges under the policy or plan, when 64.30 the policies or subscriber contracts are issued or delivered in 64.31 Minnesota or provide benefits to Minnesota residents enrolled 64.32 thereunder. 64.33 This section does not apply to policies designed primarily 64.34 to provide coverage payable on a per diem, fixed indemnity or 64.35 nonexpense incurred basis or policies that provide accident only 64.36 coverage. 65.1 Every insurance policy or subscriber contract included 65.2 within the provisions of this subdivision, upon issuance or 65.3 renewal, shall provide for payment of benefits for the treatment 65.4 of alcoholism, chemical dependency or drug addiction to any 65.5 Minnesota resident entitled to coverage thereunder on the same 65.6 basis as coverage for other benefits when treatment is rendered 65.7 in 65.8 (1) a licensed hospital, 65.9 (2) a residential treatment program as licensed by the 65.10 state of Minnesota pursuant to diagnosis or recommendation by a 65.11 doctor of medicine, 65.12 (3) a nonresidential treatment program approved or licensed 65.13 by the state of Minnesota. 65.14 Sec. 7. Minnesota Statutes 2000, section 62A.15, 65.15 subdivision 1, is amended to read: 65.16 Subdivision 1. [APPLICABILITY.] The provisions of this 65.17 section apply to all group policies orsubscriber contracts65.18 individual or group health plans providing payment for care in 65.19 this state, which are issued by accident and health insurance65.20companies regulated under this chapter and nonprofit health65.21service plan corporations regulated under chapter 62C. 65.22 Sec. 8. Minnesota Statutes 2000, section 62A.152, 65.23 subdivision 1, is amended to read: 65.24 Subdivision 1. [SCOPE.] With the exception of managed care 65.25 plans as defined in section 62U.01, the provisions of this 65.26 section apply (a) to all group policies or subscriber contracts 65.27 which provide benefits for at least 100 certificate holders who 65.28 are residents of this state or groups of which more than 90 65.29 percent are residents of this state and are issued, delivered, 65.30 or renewed by accident and health insurance companies regulated 65.31 under this chapter, or by nonprofit health service plan 65.32 corporations regulated under chapter 62C and (b), unless waived 65.33 by the commissioner to the extent applicable to holders who are 65.34 both nonresidents and employed outside this state, to all group 65.35 policies or subscriber contracts which are issued, delivered, or 65.36 renewed within this state by accident and health insurance 66.1 companies regulated under this chapter, or by nonprofit health 66.2 service plan corporations regulated under chapter 62C. 66.3 Sec. 9. Minnesota Statutes 2000, section 62A.153, is 66.4 amended to read: 66.5 62A.153 [OUTPATIENT MEDICAL AND SURGICAL SERVICES.] 66.6 No policy or plan of health, medical, hospitalization, or 66.7 accident and sickness insurance regulated under this chapter, or 66.8subscriber contract provided by a nonprofit health service plan66.9corporation regulated under chapter 62Chealth plan that 66.10 provides coverage for services in a hospital shall be issued, 66.11 renewed, continued, delivered, issued for delivery or executed 66.12 in this state, or approved for issuance or renewal in this state 66.13by the commissioner of commerceunless the policy, plan, or 66.14contracthealth plan specifically provides coverage for a health 66.15 care treatment or surgery on an outpatient basis at a facility 66.16 equipped to perform these services, whether or not the facility 66.17 is part of a hospital. Coverage shall be on the same basis as 66.18 coverage provided for the same health care treatment or service 66.19 in a hospital. 66.20 Sec. 10. Minnesota Statutes 2000, section 62A.20, is 66.21 amended to read: 66.22 62A.20 [CONTINUATION COVERAGE OF CURRENT SPOUSE AND 66.23 CHILDREN.] 66.24 Subdivision 1. [REQUIREMENT.] Every policy of accident and 66.25 health insurance providing coverage of hospital or medical 66.26 expense on either an expense-incurred basis or other than an 66.27 expense-incurred basis, or health plan, which in addition to 66.28 covering the insured also provides coverage to the spouse and 66.29 dependent children of the insured shall contain: 66.30 (1) a provision which permits the spouse and dependent 66.31 children to elect to continue coverage when the insured becomes 66.32 enrolled for benefits under Title XVIII of the Social Security 66.33 Act (Medicare); and 66.34 (2) a provision which permits the dependent children to 66.35 continue coverage when they cease to be dependent children under 66.36 the generally applicable requirement of the plan. 67.1 Subd. 2. [CONTINUATION PRIVILEGE.] The coverage described 67.2 in subdivision 1 may be continued until the earlier of the 67.3 following dates: 67.4 (1) the date coverage would otherwise terminate under the 67.5 policy or health plan; 67.6 (2) 36 months after continuation by the spouse or dependent 67.7 was elected; or 67.8 (3) the spouse or dependent children become covered under 67.9 another group health plan. 67.10 If coverage is provided under a group policy or group 67.11 health plan, any required premium contributions for the coverage 67.12 shall be paid by the insured on a monthly basis to the group 67.13 policyholder for remittance to theinsurerhealth carrier. In 67.14 no event shall the amount of premium charged exceed 102 percent 67.15 of the cost to the plan for such period of coverage for other 67.16 similarly situated spouse and dependent children to whom 67.17 subdivision 1 is not applicable, without regard to whether such 67.18 cost is paid by the employer or employee. 67.19 Sec. 11. Minnesota Statutes 2000, section 62A.21, is 67.20 amended to read: 67.21 62A.21 [CONTINUATION AND CONVERSION PRIVILEGES FOR INSURED 67.22 FORMER SPOUSES AND CHILDREN.] 67.23 Subdivision 1. No policy of accident and health insurance 67.24 providing coverage of hospital or medical expense on either an 67.25 expense incurred basis or other than an expense incurred basis, 67.26 or health plan, which in addition to covering the insured also 67.27 provides coverage to the spouse of the insured, shall contain a 67.28 provision for termination of coverage for a spouse covered under 67.29 the policy or health plan solely as a result of a break in the 67.30 marital relationship. 67.31 Subd. 2a. [CONTINUATION PRIVILEGE.] Every policy or health 67.32 plan described in subdivision 1 shall contain a provision which 67.33 permits continuation of coverage under the policy or health plan 67.34 for the insured's former spouse and dependent children upon 67.35 entry of a valid decree of dissolution of marriage. The 67.36 coverage shall be continued until the earlier of the following 68.1 dates: 68.2 (a) the date the insured's former spouse becomes covered 68.3 under any other group health plan; or 68.4 (b) the date coverage would otherwise terminate under the 68.5 policy or health plan. 68.6 If the coverage is provided under a group policy or group 68.7 health plan, any required premium contributions for the coverage 68.8 shall be paid by the insured on a monthly basis to the group 68.9 policyholder for remittance to theinsurerhealth carrier. The 68.10 policy or health plan must require the group policyholder to, 68.11 upon request, provide the insured with written verification from 68.12 theinsurerhealth carrier of the cost of this coverage promptly 68.13 at the time of eligibility for this coverage and at any time 68.14 during the continuation period. In no event shall the amount of 68.15 premium charged exceed 102 percent of the cost to the plan for 68.16 such period of coverage for other similarly situated spouses and 68.17 dependent children with respect to whom the marital relationship 68.18 has not dissolved, without regard to whether such cost is paid 68.19 by the employer or employee. 68.20 Subd. 2b. [CONVERSION PRIVILEGE.] Every policy or health 68.21 plan described in subdivision 1 shall contain a provision 68.22 allowing a former spouse and dependent children of an insured, 68.23 without providing evidence of insurability, to obtain from 68.24 theinsurerhealth carrier at the expiration of any continuation 68.25 of coverage required under subdivision 2a or sections 62A.146 68.26 and 62A.20, conversion coverage providing at least the minimum 68.27 benefits of a qualified plan as prescribed by section 62E.06 and 68.28 the option of a number three qualified plan, a number two 68.29 qualified plan, a number one qualified plan as provided by 68.30 section 62E.06, subdivisions 1 to 3, provided application is 68.31 made to theinsurerhealth carrier within 30 days following 68.32 notice of the expiration of the continued coverage and upon 68.33 payment of the appropriate premium. The individual policy or 68.34 individual health plan shall be renewable at the option of the 68.35 covered person as long as the covered person is not covered 68.36 under another qualified plan as defined in section 62E.02, 69.1 subdivision 4. Any revisions in the table of rate for the 69.2 individual policy or individual health plan shall apply to the 69.3 covered person's original age at entry and shall apply equally 69.4 to all similar policies or health plans issued by the 69.5insurerhealth carrier. 69.6 A policy or health plan providing reduced benefits at a 69.7 reduced premium rate may be accepted by the covered person in 69.8 lieu of the optional coverage otherwise required by this 69.9 subdivision. 69.10Subd. 3. Subdivision 1 applies to every policy of accident69.11and health insurance which is delivered, issued for delivery,69.12renewed or amended on or after July 19, 1977.69.13Subdivisions 2a and 2b apply to every policy of accident69.14and health insurance which is delivered, issued for delivery,69.15renewed, or amended on or after August 1, 1981.69.16 Sec. 12. Minnesota Statutes 2000, section 62A.616, is 69.17 amended to read: 69.18 62A.616 [COVERAGE FOR NURSING HOME CARE FOR TERMINALLY ILL 69.19 AND OTHER SERVICES.] 69.20An insurerA health carrier may offer a health plan that 69.21 covers nursing home care for the terminally ill, personal care 69.22 attendants, and hospice care. For the purposes of this section, 69.23 "terminally ill" means a diagnosis certified by a physician that 69.24 a person has less than six months to live. 69.25 Sec. 13. Minnesota Statutes 2000, section 62A.65, 69.26 subdivision 5, is amended to read: 69.27 Subd. 5. [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 69.28 individual health plan may be offered, sold, issued, or with 69.29 respect to children age 18 or under renewed, to a Minnesota 69.30 resident that contains a preexisting condition limitation, 69.31 preexisting condition exclusion, or exclusionary rider, unless 69.32 the limitation or exclusion is permitted under this subdivision 69.33 and under chapter 62L, provided that, except for children age 18 69.34 or under, underwriting restrictions may be retained on 69.35 individual contracts that are issued without evidence of 69.36 insurability as a replacement for prior individual coverage that 70.1 was sold before May 17, 1993. The individual may be subjected 70.2 to an 18-month preexisting condition limitation, unless the 70.3 individual has maintained continuous coverage as defined in 70.4 section 62L.02. The individual must not be subjected to an 70.5 exclusionary rider. An individual who has maintained continuous 70.6 coverage may be subjected to a one-time preexisting condition 70.7 limitation of up to 12 months, with credit for time covered 70.8 under qualifying coverage as defined in section 62L.02, at the 70.9 time that the individual first is covered under an individual 70.10 health plan by any health carrier. Credit must be given for all 70.11 qualifying coverage with respect to all preexisting conditions, 70.12 regardless of whether the conditions were preexisting with 70.13 respect to any previous qualifying coverage. The individual 70.14 must not be subjected to an exclusionary rider. Thereafter, the 70.15 individual must not be subject to any preexisting condition 70.16 limitation, preexisting condition exclusion, or exclusionary 70.17 rider under an individual health plan by any health carrier, 70.18 except an unexpired portion of a limitation under prior 70.19 coverage, so long as the individual maintains continuous 70.20 coverage as defined in section 62L.02. 70.21 (b) A health carrier must offer an individual health plan 70.22 to any individual previously covered under a group health plan 70.23 issued by that health carrier, regardless of the size of the 70.24 group, so long as the individual maintained continuous coverage 70.25 as defined in section 62L.02. If the individual has available 70.26 any continuation coverage provided under sections 62A.146; 70.27 62A.148; 62A.17, subdivisions 1 and 2; 62A.20; or 62A.21;70.2862C.142; 62D.101; or 62D.105, or continuation coverage provided 70.29 under federal law, the health carrier need not offer coverage 70.30 under this paragraph until the individual has exhausted the 70.31 continuation coverage. The offer must not be subject to 70.32 underwriting, except as permitted under this paragraph. A 70.33 health plan issued under this paragraph must be a qualified plan 70.34 as defined in section 62E.02 and must not contain any 70.35 preexisting condition limitation, preexisting condition 70.36 exclusion, or exclusionary rider, except for any unexpired 71.1 limitation or exclusion under the previous coverage. The 71.2 individual health plan must cover pregnancy on the same basis as 71.3 any other covered illness under the individual health plan. The 71.4 initial premium rate for the individual health plan must comply 71.5 with subdivision 3. The premium rate upon renewal must comply 71.6 with subdivision 2. In no event shall the premium rate exceed 71.7 90 percent of the premium charged for comparable individual 71.8 coverage by the Minnesota comprehensive health association, and 71.9 the premium rate must be less than that amount if necessary to 71.10 otherwise comply with this section. An individual health plan 71.11 offered under this paragraph to a person satisfies the health 71.12 carrier's obligation to offer conversion coverage under section 71.13 62E.16, with respect to that person. Coverage issued under this 71.14 paragraph must provide that it cannot be canceled or nonrenewed 71.15 as a result of the health carrier's subsequent decision to leave 71.16 the individual, small employer, or other group market. Section 71.17 72A.20, subdivision 28, applies to this paragraph. 71.18 Sec. 14. Minnesota Statutes 2000, section 62D.12, 71.19 subdivision 1a, is amended to read: 71.20 Subd. 1a. [SWING-OUT PRODUCTS.] Notwithstanding 71.21 subdivision 1, nothing in sections62A.049,62A.60,and 72A.201, 71.22 subdivision 4a, applies to a commercial health policy issued 71.23 under this chapter as a companion to a health maintenance 71.24 contract. 71.25 Sec. 15. Minnesota Statutes 2000, section 62E.16, is 71.26 amended to read: 71.27 62E.16 [POLICY CONVERSION RIGHTS.] 71.28 Every program of self-insurance, policy of group accident 71.29 and health insurance or contract of coverage by a health 71.30 maintenance organization written or renewed in this state, shall 71.31 include, in addition to the provisions required by section 71.32 62A.17, the right to convert to an individual coverage qualified 71.33 plan without the addition of underwriting restrictions after the 71.34 individual insured has exhausted any continuation coverage 71.35 provided under section 62A.146; 62A.148; 62A.17, subdivisions 1 71.36 and 2; 62A.20; or 62A.21; 62C.142; 62D.101; or 62D.105, or 72.1 continuation coverage provided under federal law, if any 72.2 continuation coverage is available to the individual, and then 72.3 leaves the group regardless of the reason for leaving the group 72.4 or if an employer member of a group ceases to remit payment so 72.5 as to terminate coverage for its employees, or upon cancellation 72.6 or termination of the coverage for the group except where 72.7 uninterrupted and continuous group coverage is otherwise 72.8 provided to the group. If the health maintenance organization 72.9 has canceled coverage for the group because of a loss of 72.10 providers in a service area, the health maintenance organization 72.11 shall arrange for other health maintenance or indemnity 72.12 conversion options that shall be offered to enrollees without 72.13 the addition of underwriting restrictions. The required 72.14 conversion contract must treat pregnancy the same as any other 72.15 covered illness under the conversion contract. The person may 72.16 exercise this right to conversion within 30 days of exhausting 72.17 any continuation coverage provided under section 62A.146; 72.18 62A.148; 62A.17, subdivisions 1 and 2; 62A.20; or 62A.21, or 72.19 continuation coverage provided under federal law, and then 72.20 leaving the group or within 30 days following receipt of due 72.21 notice of cancellation or termination of coverage of the group 72.22 or of the employer member of the group and upon payment of 72.23 premiums from the date of termination or cancellation. Due 72.24 notice of cancellation or termination of coverage for a group or 72.25 of the employer member of the group shall be provided to each 72.26 employee having coverage in the group by the insurer, 72.27 self-insurer or health maintenance organization canceling or 72.28 terminating the coverage except where reasonable evidence 72.29 indicates that uninterrupted and continuous group coverage is 72.30 otherwise provided to the group. Every employer having a policy 72.31 of group accident and health insurance, group subscriber or 72.32 contract of coverage by a health maintenance organization shall, 72.33 upon request, provide the insurer or health maintenance 72.34 organization a list of the names and addresses of covered 72.35 employees. Plans of health coverage shall also include a 72.36 provision which, upon the death of the individual in whose name 73.1 the contract was issued, permits every other individual then 73.2 covered under the contract to elect, within the period specified 73.3 in the contract, to continue coverage under the same or a 73.4 different contract without the addition of underwriting 73.5 restrictions until the individual would have ceased to have been 73.6 entitled to coverage had the individual in whose name the 73.7 contract was issued lived. An individual conversion contract 73.8 issued by a health maintenance organization shall not be deemed 73.9 to be an individual enrollment contract for the purposes of 73.10 section 62D.10. An individual health plan offered under section 73.11 62A.65, subdivision 5, paragraph (b), to a person satisfies the 73.12 health carrier's obligation to offer conversion coverage under 73.13 this section with respect to that person. 73.14 Sec. 16. Minnesota Statutes 2000, section 62L.12, 73.15 subdivision 2, is amended to read: 73.16 Subd. 2. [EXCEPTIONS.] (a) A health carrier may sell, 73.17 issue, or renew individual conversion policies to eligible 73.18 employees otherwise eligible for conversion coverage under 73.19 section 62D.104 as a result of leaving a health maintenance 73.20 organization's service area. 73.21 (b) A health carrier may sell, issue, or renew individual 73.22 conversion policies to eligible employees otherwise eligible for 73.23 conversion coverage as a result of the expiration of any 73.24 continuation of group coverage required under sections 62A.146, 73.25 62A.17, and 62A.21, 62C.142, 62D.101, and 62D.105. 73.26 (c) A health carrier may sell, issue, or renew conversion 73.27 policies under section 62E.16 to eligible employees. 73.28 (d) A health carrier may sell, issue, or renew individual 73.29 continuation policies to eligible employees as required. 73.30 (e) A health carrier may sell, issue, or renew individual 73.31 health plans if the coverage is appropriate due to an unexpired 73.32 preexisting condition limitation or exclusion applicable to the 73.33 person under the employer's group health plan or due to the 73.34 person's need for health care services not covered under the 73.35 employer's group health plan. 73.36 (f) A health carrier may sell, issue, or renew an 74.1 individual health plan, if the individual has elected to buy the 74.2 individual health plan not as part of a general plan to 74.3 substitute individual health plans for a group health plan nor 74.4 as a result of any violation of subdivision 3 or 4. 74.5 (g) Nothing in this subdivision relieves a health carrier 74.6 of any obligation to provide continuation or conversion coverage 74.7 otherwise required under federal or state law. 74.8 (h) Nothing in this chapter restricts the offer, sale, 74.9 issuance, or renewal of coverage issued as a supplement to 74.10 Medicare under sections 62A.31 to 62A.44, or policies or 74.11 contracts that supplement Medicare issued by health maintenance 74.12 organizations, or those contracts governed by section 1833 or 74.13 1876 of the federal Social Security Act, United States Code, 74.14 title 42, section 1395 et seq., as amended. 74.15 (i) Nothing in this chapter restricts the offer, sale, 74.16 issuance, or renewal of individual health plans necessary to 74.17 comply with a court order. 74.18 Sec. 17. Minnesota Statutes 2000, section 257.34, 74.19 subdivision 1, is amended to read: 74.20 Subdivision 1. [ACKNOWLEDGMENT BY PARENTS.] The mother and 74.21 father of a child born to a mother who was not married to the 74.22 child's father when the child was conceived nor when the child 74.23 was born may, in a writing signed by both of them before a 74.24 notary public, declare and acknowledge under oath that they are 74.25 the biological parents of the child. The declaration may 74.26 provide that any such child born to the mother at any time 74.27 before or up to ten months after the date of execution of the 74.28 declaration is the biological child of the signatories. 74.29 Execution of the declaration shall: 74.30 (a) have the same consequences as an acknowledgment by the 74.31 signatories of parentage of the child for the purposes of 74.32sectionssection 62A.041and 62C.14, subdivision 5a; 74.33 (b) be conclusive evidence that the signatories are parents 74.34 of the child for the purposes of sections 176.111, 197.75, and 74.35 197.752; 74.36 (c) create a presumption that the signatory is the 75.1 biological father of the child for the purposes of sections 75.2 257.51 to 257.74; 75.3 (d) when timely filed with the department of health as 75.4 provided in section 259.52, qualify as an affidavit stating the 75.5 intention of the signatories to retain parental rights as 75.6 provided in section 259.52 if it contains the information 75.7 required by section 259.52 or rules promulgated thereunder; 75.8 (e) have the same consequences as a writing declaring 75.9 paternity of the child for the purposes of section 524.2-109; 75.10 and 75.11 (f) be conclusive evidence that the signatories are parents 75.12 of the child for the purposes of chapter 573. 75.13 Sec. 18. [REPEALER.] 75.14 Minnesota Statutes 2000, sections 62A.049; 62A.21, 75.15 subdivision 3; 62C.14, subdivisions 5, 5a, 5b, and 14; 62C.142; 75.16 62D.101; and 62D.105, are repealed. 75.17 Sec. 19. [EFFECTIVE DATE.] 75.18 Sections 1 to 18 are effective January 1, 2002, and apply 75.19 to coverage issued on or after that date.