SF 1208

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

  1.1                          A bill for an act 
  1.2             relating to health insurance; limiting the growth 
  1.3             limits; limiting loss ratios; repealing the health 
  1.4             care commission; modifying the regional coordinating 
  1.5             boards; modifying the health technology advisory 
  1.6             committee; expanding the eligibility of the 
  1.7             MinnesotaCare program; modifying the enforcement 
  1.8             mechanisms for the provider tax pass-through; 
  1.9             modifying mandatory Medicare assignment; amending 
  1.10            Minnesota Statutes 1996, sections 62A.021, subdivision 
  1.11            1; 62A.61; 62A.65, subdivision 3; 62J.04, subdivisions 
  1.12            1 and 9; 62J.041; 62J.07, subdivisions 1 and 3; 
  1.13            62J.09, subdivision 1; 62J.15, subdivision 1; 62J.152, 
  1.14            subdivisions 1, 2, 4, and 5; 62J.17, subdivision 6a; 
  1.15            62J.22; 62J.25; 62J.2914, subdivision 1; 62J.2915; 
  1.16            62J.2916, subdivision 1; 62J.2917, subdivision 2; 
  1.17            62J.2921, subdivision 2; 62J.451, subdivision 6b; 
  1.18            62L.02, subdivision 26; 62L.08, subdivision 8; 62N.25, 
  1.19            subdivision 5; 62Q.03, subdivision 5a; 62Q.33, 
  1.20            subdivision 2; 256.9354, subdivision 5; 256.9355, by 
  1.21            adding a subdivision; and 295.582; repealing Minnesota 
  1.22            Statutes 1996, sections 62J.03, subdivision 3; 
  1.23            62J.042; 62J.05; 62J.051; 62J.06; 62J.09, subdivision 
  1.24            3a; 62N.02, subdivision 3; 62Q.165, subdivision 3; 
  1.25            62Q.23; 62Q.25; 62Q.29; and 62Q.41; Laws 1993, chapter 
  1.26            247, article 4, section 8; Laws 1994, chapter 625, 
  1.27            article 5, section 5, subdivision 1, as amended; Laws 
  1.28            1995, chapter 96, section 2; and Laws 1995, First 
  1.29            Special Session chapter 3, article 13, section 2. 
  1.30  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.31     Section 1.  Minnesota Statutes 1996, section 62A.021, 
  1.32  subdivision 1, is amended to read: 
  1.33     Subdivision 1.  [LOSS RATIO STANDARDS.] Notwithstanding 
  1.34  section 62A.02, subdivision 3, relating to loss ratios, health 
  1.35  care policies or certificates shall not be delivered or issued 
  1.36  for delivery to an individual or to a small employer as defined 
  1.37  in section 62L.02, unless the policies or certificates can be 
  2.1   expected, as estimated for the entire period for which rates are 
  2.2   computed to provide coverage, to return to Minnesota 
  2.3   policyholders and certificate holders in the form of aggregate 
  2.4   benefits not including anticipated refunds or credits, provided 
  2.5   under the policies or certificates, (1) at least 75 78 percent 
  2.6   of the aggregate amount of premiums earned in the case of 
  2.7   policies issued in the small employer market, as defined in 
  2.8   section 62L.02, subdivision 27, calculated on an aggregate 
  2.9   basis; and (2) at least 65 68 percent of the aggregate amount of 
  2.10  premiums earned in the case of each policy form or certificate 
  2.11  form issued in the individual market; calculated on the basis of 
  2.12  incurred claims experience or incurred health care expenses 
  2.13  where coverage is provided by a health maintenance organization 
  2.14  on a service rather than reimbursement basis and earned premiums 
  2.15  for the period and according to accepted actuarial principles 
  2.16  and practices.  Assessments by the reinsurance association 
  2.17  created in chapter 62L and any types of taxes, surcharges, or 
  2.18  assessments created by Laws 1992, chapter 549, or created on or 
  2.19  after April 23, 1992, are included in the calculation of 
  2.20  incurred claims experience or incurred health care expenses.  
  2.21  The applicable percentage for policies and certificates issued 
  2.22  in the small employer market, as defined in section 62L.02, by a 
  2.23  nonprofit health service plan corporation operating under 
  2.24  chapter 62C or a health maintenance organization operating under 
  2.25  chapter 62D increases by one percentage point on July 1 of each 
  2.26  year, beginning on July 1, 1994 1997, until an 82 percent loss 
  2.27  ratio is reached on July 1, 2000.  The applicable percentage for 
  2.28  policy forms and certificate forms issued in the individual 
  2.29  market by a nonprofit health service plan corporation operating 
  2.30  under chapter 62C or a health maintenance organization operating 
  2.31  under chapter 62D increases by one percentage point on July 1 of 
  2.32  each year, beginning on July 1, 1994 1997, until a 72 percent 
  2.33  loss ratio is reached on July 1, 2000.  A health 
  2.34  carrier licensed under chapter 62C or 62D that enters a market 
  2.35  after July 1, 1993 1996, does not start at the beginning of the 
  2.36  phase-in schedule and must instead comply with the loss ratio 
  3.1   requirements applicable to other health carriers in that market 
  3.2   for each time period.  Premiums earned and claims incurred in 
  3.3   markets other than the small employer and individual markets are 
  3.4   not relevant for purposes of this section. 
  3.5      Notwithstanding section 645.26, any act enacted at the 1992 
  3.6   regular legislative session that amends or repeals section 
  3.7   62A.135 or that otherwise changes the loss ratios provided in 
  3.8   that section is void. 
  3.9      All filings of rates and rating schedules shall demonstrate 
  3.10  that actual expected claims in relation to premiums comply with 
  3.11  the requirements of this section when combined with actual 
  3.12  experience to date.  Filings of rate revisions shall also 
  3.13  demonstrate that the anticipated loss ratio over the entire 
  3.14  future period for which the revised rates are computed to 
  3.15  provide coverage can be expected to meet the appropriate loss 
  3.16  ratio standards, and aggregate loss ratio from inception of the 
  3.17  policy form or certificate form shall equal or exceed the 
  3.18  appropriate loss ratio standards. 
  3.19     A health carrier that issues health care policies and 
  3.20  certificates to individuals or to small employers, as defined in 
  3.21  section 62L.02, in this state shall file annually its rates, 
  3.22  rating schedule, and supporting documentation including ratios 
  3.23  of incurred losses to earned premiums by policy form or 
  3.24  certificate form duration for approval by the commissioner 
  3.25  according to the filing requirements and procedures prescribed 
  3.26  by the commissioner.  The supporting documentation shall also 
  3.27  demonstrate in accordance with actuarial standards of practice 
  3.28  using reasonable assumptions that the appropriate loss ratio 
  3.29  standards can be expected to be met over the entire period for 
  3.30  which rates are computed.  The demonstration shall exclude 
  3.31  active life reserves.  If the data submitted does not confirm 
  3.32  that the health carrier has satisfied the loss ratio 
  3.33  requirements of this section, the commissioner shall notify the 
  3.34  health carrier in writing of the deficiency.  The health carrier 
  3.35  shall have 30 days from the date of the commissioner's notice to 
  3.36  file amended rates that comply with this section.  If the health 
  4.1   carrier fails to file amended rates within the prescribed time, 
  4.2   the commissioner shall order that the health carrier's filed 
  4.3   rates for the nonconforming policy form or certificate form be 
  4.4   reduced to an amount that would have resulted in a loss ratio 
  4.5   that complied with this section had it been in effect for the 
  4.6   reporting period of the supplement.  The health carrier's 
  4.7   failure to file amended rates within the specified time or the 
  4.8   issuance of the commissioner's order amending the rates does not 
  4.9   preclude the health carrier from filing an amendment of its 
  4.10  rates at a later time.  The commissioner shall annually make the 
  4.11  submitted data available to the public at a cost not to exceed 
  4.12  the cost of copying.  The data must be compiled in a form useful 
  4.13  for consumers who wish to compare premium charges and loss 
  4.14  ratios. 
  4.15     Each sale of a policy or certificate that does not comply 
  4.16  with the loss ratio requirements of this section is an unfair or 
  4.17  deceptive act or practice in the business of insurance and is 
  4.18  subject to the penalties in sections 72A.17 to 72A.32. 
  4.19     For purposes of this section, health care policies issued 
  4.20  as a result of solicitations of individuals through the mail or 
  4.21  mass media advertising, including both print and broadcast 
  4.22  advertising, shall be treated as individual policies.  
  4.23     For purposes of this section, (1) "health care policy" or 
  4.24  "health care certificate" is a health plan as defined in section 
  4.25  62A.011; and (2) "health carrier" has the meaning given in 
  4.26  section 62A.011 and includes all health carriers delivering or 
  4.27  issuing for delivery health care policies or certificates in 
  4.28  this state or offering these policies or certificates to 
  4.29  residents of this state, unless otherwise specified.  
  4.30     Sec. 2.  Minnesota Statutes 1996, section 62A.61, is 
  4.31  amended to read: 
  4.32     62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO 
  4.33  DETERMINE USUAL AND CUSTOMARY FEES.] 
  4.34     (a) A health carrier that bases reimbursement to health 
  4.35  care providers upon a usual and customary fee must maintain in 
  4.36  its office a copy of a description of the methodology used to 
  5.1   calculate fees including at least the following: 
  5.2      (1) the frequency of the determination of usual and 
  5.3   customary fees; 
  5.4      (2) a general description of the methodology used to 
  5.5   determine usual and customary fees; and 
  5.6      (3) the percentile of usual and customary fees that 
  5.7   determines the maximum allowable reimbursement. 
  5.8      (b) A health carrier must provide a copy of the information 
  5.9   described in paragraph (a) to the Minnesota health care 
  5.10  commission, the commissioner of health, or the commissioner of 
  5.11  commerce, upon request. 
  5.12     (c) The commissioner of health or the commissioner of 
  5.13  commerce, as appropriate, may use to enforce this section any 
  5.14  enforcement powers otherwise available to the commissioner with 
  5.15  respect to the health carrier.  The appropriate commissioner 
  5.16  shall enforce compliance with a request made under this section 
  5.17  by the Minnesota health care commission, at the request of the 
  5.18  commissioner.  The commissioner of health or commerce, as 
  5.19  appropriate, may require health carriers to provide the 
  5.20  information required under this section and may use any powers 
  5.21  granted under other laws relating to the regulation of health 
  5.22  carriers to enforce compliance. 
  5.23     (d) For purposes of this section, "health carrier" has the 
  5.24  meaning given in section 62A.011. 
  5.25     Sec. 3.  Minnesota Statutes 1996, section 62A.65, 
  5.26  subdivision 3, is amended to read: 
  5.27     Subd. 3.  [PREMIUM RATE RESTRICTIONS.] No individual health 
  5.28  plan may be offered, sold, issued, or renewed to a Minnesota 
  5.29  resident unless the premium rate charged is determined in 
  5.30  accordance with the following requirements:  
  5.31     (a) Premium rates must be no more than 25 percent above and 
  5.32  no more than 25 percent below the index rate charged to 
  5.33  individuals for the same or similar coverage, adjusted pro rata 
  5.34  for rating periods of less than one year.  The premium 
  5.35  variations permitted by this paragraph must be based only upon 
  5.36  health status, claims experience, and occupation.  For purposes 
  6.1   of this paragraph, health status includes refraining from 
  6.2   tobacco use or other actuarially valid lifestyle factors 
  6.3   associated with good health, provided that the lifestyle factor 
  6.4   and its effect upon premium rates have been determined by the 
  6.5   commissioner to be actuarially valid and have been approved by 
  6.6   the commissioner.  Variations permitted under this paragraph 
  6.7   must not be based upon age or applied differently at different 
  6.8   ages.  This paragraph does not prohibit use of a constant 
  6.9   percentage adjustment for factors permitted to be used under 
  6.10  this paragraph. 
  6.11     (b) Premium rates may vary based upon the ages of covered 
  6.12  persons only as provided in this paragraph.  In addition to the 
  6.13  variation permitted under paragraph (a), each health carrier may 
  6.14  use an additional premium variation based upon age of up to plus 
  6.15  or minus 50 percent of the index rate. 
  6.16     (c) A health carrier may request approval by the 
  6.17  commissioner to establish no more than three geographic regions 
  6.18  and to establish separate index rates for each region, provided 
  6.19  that the index rates do not vary between any two regions by more 
  6.20  than 20 percent.  Health carriers that do not do business in the 
  6.21  Minneapolis/St. Paul metropolitan area may request approval for 
  6.22  no more than two geographic regions, and clauses (2) and (3) do 
  6.23  not apply to approval of requests made by those health 
  6.24  carriers.  The commissioner may grant approval if the following 
  6.25  conditions are met: 
  6.26     (1) the geographic regions must be applied uniformly by the 
  6.27  health carrier; 
  6.28     (2) one geographic region must be based on the 
  6.29  Minneapolis/St. Paul metropolitan area; 
  6.30     (3) for each geographic region that is rural, the index 
  6.31  rate for that region must not exceed the index rate for the 
  6.32  Minneapolis/St. Paul metropolitan area; and 
  6.33     (4) the health carrier provides actuarial justification 
  6.34  acceptable to the commissioner for the proposed geographic 
  6.35  variations in index rates, establishing that the variations are 
  6.36  based upon differences in the cost to the health carrier of 
  7.1   providing coverage. 
  7.2      (d) Health carriers may use rate cells and must file with 
  7.3   the commissioner the rate cells they use.  Rate cells must be 
  7.4   based upon the number of adults or children covered under the 
  7.5   policy and may reflect the availability of Medicare coverage.  
  7.6   The rates for different rate cells must not in any way reflect 
  7.7   generalized differences in expected costs between principal 
  7.8   insureds and their spouses. 
  7.9      (e) In developing its index rates and premiums for a health 
  7.10  plan, a health carrier shall take into account only the 
  7.11  following factors: 
  7.12     (1) actuarially valid differences in rating factors 
  7.13  permitted under paragraphs (a) and (b); and 
  7.14     (2) actuarially valid geographic variations if approved by 
  7.15  the commissioner as provided in paragraph (c). 
  7.16     (f) All premium variations must be justified in initial 
  7.17  rate filings and upon request of the commissioner in rate 
  7.18  revision filings.  All rate variations are subject to approval 
  7.19  by the commissioner. 
  7.20     (g) The loss ratio must comply with the section 62A.021 
  7.21  requirements for individual health plans. 
  7.22     (h) The rates must not be approved, unless the commissioner 
  7.23  has determined that the rates are reasonable.  In determining 
  7.24  reasonableness, the commissioner shall consider the growth rates 
  7.25  applied cost containment goals established under section 62J.04, 
  7.26  subdivision 1, paragraph (b), to the calendar year or years that 
  7.27  the proposed premium rate would be in effect, actuarially valid 
  7.28  changes in risks associated with the enrollee populations, and 
  7.29  actuarially valid changes as a result of statutory changes in 
  7.30  Laws 1992, chapter 549.  If the cost containment goals are not 
  7.31  met by the health carrier, the commissioner shall not approve 
  7.32  the rates. 
  7.33     Sec. 4.  Minnesota Statutes 1996, section 62J.04, 
  7.34  subdivision 1, is amended to read: 
  7.35     Subdivision 1.  [LIMITS ON THE RATE OF GROWTH COST 
  7.36  CONTAINMENT GOALS.] (a) The commissioner of health shall set 
  8.1   annual limits on the rate of growth of cost containment goals 
  8.2   for public and private spending on health care services for 
  8.3   Minnesota residents, as provided in paragraph (b).  The limits 
  8.4   on growth cost containment goals must be set at levels the 
  8.5   commissioner determines to be realistic and achievable but that 
  8.6   will reduce the rate of growth in health care spending by at 
  8.7   least ten percent per year for the next five years.  The 
  8.8   commissioner shall set limits on growth cost containment goals 
  8.9   based on available data on spending and growth trends, including 
  8.10  data from group purchasers, national data on public and private 
  8.11  sector health care spending and cost trends, and trend 
  8.12  information from other states. 
  8.13     (b) The commissioner shall set the following annual limits 
  8.14  on the rate of growth of cost containment goals for public and 
  8.15  private spending on health care services for Minnesota residents:
  8.16     (1) for calendar year 1994, the rate of growth cost 
  8.17  containment goal must not exceed the change in the regional 
  8.18  consumer price index for urban consumers for calendar year 1993 
  8.19  plus 6.5 percentage points; 
  8.20     (2) for calendar year 1995, the rate of growth cost 
  8.21  containment goal must not exceed the change in the regional 
  8.22  consumer price index for urban consumers for calendar year 1994 
  8.23  plus 5.3 percentage points; 
  8.24     (3) for calendar year 1996, the rate of growth cost 
  8.25  containment goal must not exceed the change in the regional 
  8.26  consumer price index for urban consumers for calendar year 1995 
  8.27  plus 4.3 percentage points; 
  8.28     (4) for calendar year 1997, the rate of growth cost 
  8.29  containment goal must not exceed the change in the regional 
  8.30  consumer price index for urban consumers for calendar year 1996 
  8.31  plus 3.4 percentage points; and 
  8.32     (5) for calendar year 1998, the rate of growth cost 
  8.33  containment goal must not exceed the change in the regional 
  8.34  consumer price index for urban consumers for calendar year 1997 
  8.35  plus 2.6 percentage points; and 
  8.36     (6) for calendar years after 1998, the commissioner shall 
  9.1   set annual cost containment goals based on available data on 
  9.2   spending and growth trends, including data from group 
  9.3   purchasers, national data on public and private sector health 
  9.4   care spending and cost trends, and trend information from other 
  9.5   states. 
  9.6      The commissioner shall adjust the growth limit set for 
  9.7   calendar year 1995 to recover savings in health care spending 
  9.8   required for the period July 1, 1993 to December 31, 1993. 
  9.9      (c) The commissioner shall publish: 
  9.10     (1) the projected limits cost containment goal in the State 
  9.11  Register by April 15 of the year immediately preceding the year 
  9.12  in which the limit cost containment goal will be effective 
  9.13  except for the year 1993, in which the limit cost containment 
  9.14  goal shall be published by July 1, 1993; 
  9.15     (2) the quarterly change in the regional consumer price 
  9.16  index for urban consumers; and 
  9.17     (3) the health care financing administration forecast for 
  9.18  total growth in the national health care expenditures.  In 
  9.19  setting an annual limit the cost containment goals, the 
  9.20  commissioner is exempt from the rulemaking requirements of 
  9.21  chapter 14.  The commissioner's decision on an annual limit the 
  9.22  cost containment goals is not appealable. 
  9.23     Sec. 5.  Minnesota Statutes 1996, section 62J.04, 
  9.24  subdivision 9, is amended to read: 
  9.25     Subd. 9.  [GROWTH LIMITS COST CONTAINMENT GOALS; FEDERAL 
  9.26  PROGRAMS.] The commissioners of health and human services shall 
  9.27  establish a rate methodology for Medicare and Medicaid 
  9.28  risk-based contracting with health plan companies that is 
  9.29  consistent with statewide growth limits cost containment goals.  
  9.30  The methodology shall be presented for review by the Minnesota 
  9.31  health care commission and the legislative commission on health 
  9.32  care access prior to the submission of a waiver request to the 
  9.33  health care financing administration and subsequent 
  9.34  implementation of the methodology. 
  9.35     Sec. 6.  Minnesota Statutes 1996, section 62J.041, is 
  9.36  amended to read: 
 10.1      62J.041 [INTERIM HEALTH PLAN COMPANY EXPENDITURE LIMITS.] 
 10.2      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 10.3   section, the following definitions apply. 
 10.4      (b) "Health plan company" has the definition provided in 
 10.5   section 62Q.01. 
 10.6      (c) "Total expenditures" means incurred claims or 
 10.7   expenditures on health care services, administrative expenses, 
 10.8   charitable contributions, and all other payments made by health 
 10.9   plan companies out of premium revenues. 
 10.10     (d) "Net expenditures" means total expenditures minus 
 10.11  exempted taxes and assessments and payments or allocations made 
 10.12  to establish or maintain reserves.  
 10.13     (e) "Exempted taxes and assessments" means direct payments 
 10.14  for taxes to government agencies, contributions to the Minnesota 
 10.15  comprehensive health association, the medical assistance 
 10.16  provider's surcharge under section 256.9657, the MinnesotaCare 
 10.17  provider tax under section 295.52, assessments by the health 
 10.18  coverage reinsurance association, assessments by the Minnesota 
 10.19  life and health insurance guaranty association, assessments by 
 10.20  the Minnesota risk adjustment association, and any new 
 10.21  assessments imposed by federal or state law. 
 10.22     (f) "Consumer cost-sharing or subscriber liability" means 
 10.23  enrollee coinsurance, copayment, deductible payments, and 
 10.24  amounts in excess of benefit plan maximums. 
 10.25     Subd. 2.  [ESTABLISHMENT.] The commissioner of health shall 
 10.26  establish limits on cost containment goals for the increase in 
 10.27  net expenditures by each health carrier plan company for 
 10.28  calendar years 1994, 1995, 1996, and 1997.  The limits cost 
 10.29  containment goals must be the same as the annual rate of growth 
 10.30  in cost containment goals for health care spending established 
 10.31  under section 62J.04, subdivision 1, paragraph (b).  Health plan 
 10.32  companies that are affiliates may elect to meet one 
 10.33  combined expenditure limit cost containment goal. 
 10.34     Subd. 3.  [DETERMINATION OF EXPENDITURES.] Health plan 
 10.35  companies shall submit to the commissioner of health, by April 
 10.36  1, 1994, for calendar year 1993; April 1, 1995, for calendar 
 11.1   year 1994; April 1, 1996, for calendar year 1995; April 1, 1997, 
 11.2   for calendar year 1996; and April 1, 1998, for calendar year 
 11.3   1997 all information the commissioner determines to be necessary 
 11.4   to implement and enforce this section.  The information must be 
 11.5   submitted in the form specified by the commissioner.  The 
 11.6   information must include, but is not limited to, expenditures 
 11.7   per member per month or cost per employee per month, and 
 11.8   detailed information on revenues and reserves.  The 
 11.9   commissioner, to the extent possible, shall coordinate the 
 11.10  submittal of the information required under this section with 
 11.11  the submittal of the financial data required under chapter 62J, 
 11.12  to minimize the administrative burden on health plan companies.  
 11.13  The commissioner may adjust final expenditure figures for 
 11.14  demographic changes, risk selection, changes in basic benefits, 
 11.15  and legislative initiatives that materially change health care 
 11.16  costs, as long as these adjustments are consistent with the 
 11.17  methodology submitted by the health plan company to the 
 11.18  commissioner, and approved by the commissioner as actuarially 
 11.19  justified.  The methodology to be used for adjustments and the 
 11.20  election to meet one expenditure limit cost containment goal for 
 11.21  affiliated health plan companies must be submitted to the 
 11.22  commissioner by September 1, 1994.  Community integrated service 
 11.23  networks may submit the information with their application for 
 11.24  licensure.  The commissioner shall also accept changes to 
 11.25  methodologies already submitted.  The adjustment methodology 
 11.26  submitted and approved by the commissioner must apply to the 
 11.27  data submitted for calendar years 1994 and 1995.  The 
 11.28  commissioner may allow changes to accepted adjustment 
 11.29  methodologies for data submitted for calendar years 1996 and 
 11.30  1997.  Changes to the adjustment methodology must be received by 
 11.31  September 1, 1996, and must be approved by the commissioner. 
 11.32     Subd. 4.  [MONITORING OF RESERVES.] (a) The commissioners 
 11.33  of health and commerce shall monitor health plan company 
 11.34  reserves and net worth as established under chapters 60A, 62C, 
 11.35  62D, 62H, and 64B, with respect to the health plan companies 
 11.36  that each commissioner respectively regulates to ensure 
 12.1   that assess the degree to which savings resulting from the 
 12.2   establishment of expenditure limits cost containment goals are 
 12.3   passed on to consumers in the form of lower premium rates.  
 12.4      (b) Health plan companies shall fully reflect in the 
 12.5   premium rates the savings generated by the expenditure limits 
 12.6   cost containment goals.  No premium rate, currently reviewed by 
 12.7   the departments of health or commerce, may be approved for those 
 12.8   health plan companies unless the health plan company establishes 
 12.9   to the satisfaction of the commissioner of commerce or the 
 12.10  commissioner of health, as appropriate, that the proposed new 
 12.11  rate would comply with this paragraph. 
 12.12     (c) Health plan companies, except those licensed under 
 12.13  chapter 60A to sell accident and sickness insurance under 
 12.14  chapter 62A, shall annually before the end of the fourth fiscal 
 12.15  quarter provide to the commissioner of health or commerce, as 
 12.16  applicable, a projection of the level of reserves the company 
 12.17  expects to attain during each quarter of the following fiscal 
 12.18  year.  These health plan companies shall submit with required 
 12.19  quarterly financial statements a calculation of the actual 
 12.20  reserve level attained by the company at the end of each quarter 
 12.21  including identification of the sources of any significant 
 12.22  changes in the reserve level and an updated projection of the 
 12.23  level of reserves the health plan company expects to attain by 
 12.24  the end of the fiscal year.  In cases where the health plan 
 12.25  company has been given a certificate to operate a new health 
 12.26  maintenance organization under chapter 62D, or been licensed as 
 12.27  an integrated service network or community integrated service 
 12.28  network under chapter 62N, or formed an affiliation with one of 
 12.29  these organizations, the health plan company shall also submit 
 12.30  with its quarterly financial statement, total enrollment at the 
 12.31  beginning and end of the quarter and enrollment changes within 
 12.32  each service area of the new organization.  The reserve 
 12.33  calculations shall be maintained by the commissioners as trade 
 12.34  secret information, except to the extent that such information 
 12.35  is also required to be filed by another provision of state law 
 12.36  and is not treated as trade secret information under such other 
 13.1   provisions. 
 13.2      (d) Health plan companies in paragraph (c) whose reserves 
 13.3   are less than the required minimum or more than the required 
 13.4   maximum at the end of the fiscal year shall submit a plan of 
 13.5   corrective action to the commissioner of health or commerce 
 13.6   under subdivision 7. 
 13.7      (e) The commissioner of commerce, in consultation with the 
 13.8   commissioner of health, shall report to the legislature no later 
 13.9   than January 15, 1995, as to whether the concept of a reserve 
 13.10  corridor or other mechanism for purposes of monitoring reserves 
 13.11  is adaptable for use with indemnity health insurers that do 
 13.12  business in multiple states and that must comply with their 
 13.13  domiciliary state's reserves requirements. 
 13.14     Subd. 5.  [NOTICE.] The commissioner of health shall 
 13.15  publish in the State Register and make available to the public 
 13.16  by July 1, 1995, a list of all health plan companies that 
 13.17  exceeded their expenditure limit cost containment goal for the 
 13.18  1994 calendar year.  The commissioner shall publish in the State 
 13.19  Register and make available to the public by July 1, 1996, a 
 13.20  list of all health plan companies that exceeded their 
 13.21  combined expenditure limit cost containment goal for calendar 
 13.22  years 1994 and 1995.  The commissioner shall notify each health 
 13.23  plan company that the commissioner has determined that the 
 13.24  health plan company exceeded its expenditure limit cost 
 13.25  containment goal, at least 30 days before publishing the list, 
 13.26  and shall provide each health plan company with ten days to 
 13.27  provide an explanation for exceeding the expenditure limit cost 
 13.28  containment goal.  The commissioner shall review the explanation 
 13.29  and may change a determination if the commissioner determines 
 13.30  the explanation to be valid. 
 13.31     Subd. 6.  [ASSISTANCE BY THE COMMISSIONER OF COMMERCE.] The 
 13.32  commissioner of commerce shall provide assistance to the 
 13.33  commissioner of health in monitoring health plan companies 
 13.34  regulated by the commissioner of commerce.  The commissioner of 
 13.35  commerce, in consultation with the commissioner of health, shall 
 13.36  enforce compliance with expenditure limits the cost containment 
 14.1   goals for those health plan companies in which the commissioner 
 14.2   of commerce approves the premium rates. 
 14.3      Subd. 7.  [ENFORCEMENT.] (a) The commissioners of health 
 14.4   and commerce shall enforce the reserve limits referenced in 
 14.5   subdivision 4, with respect to the health plan companies that 
 14.6   each commissioner respectively regulates.  Each commissioner 
 14.7   shall require health plan companies under the commissioner's 
 14.8   jurisdiction to submit plans of corrective action when the 
 14.9   reserve requirement is not met.  The plan of correction must 
 14.10  address the following: 
 14.11     (1) actuarial assumptions used in forecasting future 
 14.12  financial results; 
 14.13     (2) trend assumptions used in setting future premiums; 
 14.14     (3) demographic, geographic, and private and public sector 
 14.15  mix of the population covered by the health plan company; 
 14.16     (4) proposed rate increases or decreases; 
 14.17     (5) growth limits applied cost containment goals 
 14.18  established under section 62J.04, subdivision 1, paragraph (b); 
 14.19  and 
 14.20     (6) other factors deemed appropriate by the health plan 
 14.21  company or commissioner. 
 14.22  If the health plan company's reserves exceed the required 
 14.23  maximum, the plan of correction shall address how the health 
 14.24  plan company will come into compliance and set forth a timetable 
 14.25  within which compliance would be achieved.  The plan of 
 14.26  correction may propose premium refunds, credits for prior 
 14.27  premiums paid, policyholder dividends, or any combination of 
 14.28  these or other methods which will benefit enrollees and/or 
 14.29  Minnesota residents and are such that the reserve requirements 
 14.30  can reasonably be expected to be met.  The commissioner's 
 14.31  evaluation of the plan of correction must consider: 
 14.32     (1) whether implementation of the plan would provide the 
 14.33  company with an unfair advantage in the market; 
 14.34     (2) the extent to which the reserve excess was created by 
 14.35  any movement of enrolled persons to another organization formed 
 14.36  by the company; 
 15.1      (3) whether any proposed premium refund, credit, and/or 
 15.2   dividend represents an equitable allocation to policyholders 
 15.3   covered in prior periods as determined using sound actuarial 
 15.4   practice; and 
 15.5      (4) any other factors deemed appropriate by the applicable 
 15.6   commissioner. 
 15.7      (b) The plan of correction is subject to approval by the 
 15.8   commissioner of health or commerce, as applicable.  If such a 
 15.9   plan is not approved by the applicable commissioner, the 
 15.10  applicable commissioner shall enter an order stating the steps 
 15.11  that the health plan company must take to come into compliance.  
 15.12  Within 30 days of the date of such order, the health plan 
 15.13  company must file a notice of appeal with the applicable 
 15.14  commissioner or comply with the commissioner's order.  If an 
 15.15  appeal is filed, such appeal is governed by chapter 14. 
 15.16     (c) Health plan companies offering products under chapter 
 15.17  62L and section 62A.65 that exceed the expenditure limits cost 
 15.18  containment goals based on two-year average expenditure data 
 15.19  (1994 and 1995, 1996 and 1997, 1998 and 1999) shall be required 
 15.20  by the appropriate commissioner to pay back the amount exceeding 
 15.21  the expenditure limit cost containment goal through an 
 15.22  assessment on the health plan company.  A health plan company 
 15.23  may appeal the commissioner's order to pay back the amount 
 15.24  exceeding the expenditure limit cost containment goal by mailing 
 15.25  to the commissioner a written notice of appeal within 30 days 
 15.26  from the date the commissioner's order was mailed.  The 
 15.27  contested case and judicial review provisions of chapter 14 
 15.28  apply to the appeal.  The health plan company shall pay the 
 15.29  amount specified by the commissioner either to the commissioner 
 15.30  or into an escrow account until final resolution of the appeal.  
 15.31  Notwithstanding sections 15.472 to 15.475, each party is 
 15.32  responsible for its own fees and expenses, including attorneys 
 15.33  fees, for the appeal.  Any amount required to be paid back under 
 15.34  this section shall be deposited in the health care access fund.  
 15.35  The appropriate commissioner may approve a different repayment 
 15.36  method to take into account the health plan company's financial 
 16.1   condition.  Health plan companies shall comply with the limits 
 16.2   but shall also guarantee that their contractual obligations are 
 16.3   met.  Health plan companies are prohibited from meeting spending 
 16.4   obligations by increasing subscriber liability, including 
 16.5   copayments and deductibles and amounts in excess of benefit plan 
 16.6   maximums. 
 16.7      Sec. 7.  Minnesota Statutes 1996, section 62J.07, 
 16.8   subdivision 1, is amended to read: 
 16.9      Subdivision 1.  [LEGISLATIVE OVERSIGHT.] The legislative 
 16.10  commission on health care access reviews the activities of the 
 16.11  commissioner of health, the state health care 
 16.12  commission regional coordinating boards, the health technology 
 16.13  advisory committee, and all other state agencies involved in the 
 16.14  implementation and administration of this chapter, including 
 16.15  efforts to obtain federal approval through waivers and other 
 16.16  means.  
 16.17     Sec. 8.  Minnesota Statutes 1996, section 62J.07, 
 16.18  subdivision 3, is amended to read: 
 16.19     Subd. 3.  [REPORTS TO THE COMMISSION.] The commissioner of 
 16.20  health and the Minnesota health care commission, the regional 
 16.21  coordinating boards, and the health technology advisory 
 16.22  committee shall report on their activities and the activities of 
 16.23  the regional boards annually and at other times at the request 
 16.24  of the legislative commission on health care access.  The 
 16.25  commissioners of health, commerce, and human services shall 
 16.26  provide periodic reports to the legislative commission on the 
 16.27  progress of rulemaking that is authorized or required under this 
 16.28  act and shall notify members of the commission when a draft of a 
 16.29  proposed rule has been completed and scheduled for publication 
 16.30  in the State Register.  At the request of a member of the 
 16.31  commission, a commissioner shall provide a description and a 
 16.32  copy of a proposed rule. 
 16.33     Sec. 9.  Minnesota Statutes 1996, section 62J.09, 
 16.34  subdivision 1, is amended to read: 
 16.35     Subdivision 1.  [GENERAL DUTIES.] (a) The commissioner 
 16.36  shall divide the state into five rural regions, which shall 
 17.1   include all areas of the state, except for the seven-county 
 17.2   metropolitan area. 
 17.3      The (b) Each rural region shall establish a locally 
 17.4   controlled regional coordinating boards are locally controlled 
 17.5   boards board consisting of providers, health plan companies, 
 17.6   employers, consumers, and elected officials.  Regional 
 17.7   coordinating boards may: 
 17.8      (1) undertake voluntary activities to educate consumers, 
 17.9   providers, and purchasers about community plans and projects 
 17.10  promoting health care cost containment, consumer accountability, 
 17.11  access, and quality and efforts to achieve public health goals; 
 17.12     (2) make recommendations to the commissioner regarding ways 
 17.13  of improving affordability, accessibility, and quality of health 
 17.14  care in the region and throughout the state; 
 17.15     (3) provide technical assistance to parties interested in 
 17.16  establishing or operating a community integrated service network 
 17.17  or integrated service network within the region.  This 
 17.18  assistance must complement assistance provided by the 
 17.19  commissioner under section 62N.23; 
 17.20     (4) advise the commissioner on public health goals, taking 
 17.21  into consideration the relevant portions of the community health 
 17.22  service plans, plans required by the Minnesota comprehensive 
 17.23  adult mental health act, the Minnesota comprehensive children's 
 17.24  mental health act, and the community social service act plans 
 17.25  developed by county boards or community health boards in the 
 17.26  region under chapters 145A, 245, and 256E; 
 17.27     (5) prepare an annual regional education plan that is 
 17.28  consistent with and supportive of public health goals identified 
 17.29  by community health boards in the region; and 
 17.30     (6) serve as advisory bodies to identify potential 
 17.31  applicants for federal Health Professional Shortage Area and 
 17.32  federal Medically Underserved Area designation as requested by 
 17.33  the commissioner. 
 17.34     Sec. 10.  Minnesota Statutes 1996, section 62J.15, 
 17.35  subdivision 1, is amended to read: 
 17.36     Subdivision 1.  [HEALTH TECHNOLOGY ADVISORY COMMITTEE.] The 
 18.1   Minnesota health care commission shall convene legislative 
 18.2   commission on health care access shall convene an advisory 
 18.3   committee to conduct evaluations of existing research and 
 18.4   technology assessments conducted by other entities of new and 
 18.5   existing health care technologies.  The advisory committee may 
 18.6   include members of the state commission and other persons 
 18.7   appointed by the commission.  The advisory committee must 
 18.8   include at least one person representing physicians, at least 
 18.9   one person representing hospitals, and at least one person 
 18.10  representing the health care technology industry.  Health care 
 18.11  technologies include high-cost drugs, devices, procedures, or 
 18.12  processes applied to human health care, such as high-cost 
 18.13  transplants and expensive scanners and imagers.  The advisory 
 18.14  committee is governed by section 15.0575, subdivision 3, except 
 18.15  that members do not receive per diem payments. 
 18.16     Sec. 11.  Minnesota Statutes 1996, section 62J.152, 
 18.17  subdivision 1, is amended to read: 
 18.18     Subdivision 1.  [GENERALLY.] The health technology advisory 
 18.19  committee established in section 62J.15 shall: 
 18.20     (1) develop criteria and processes for evaluating health 
 18.21  care technology assessments made by other entities; 
 18.22     (2) conduct evaluations of specific technologies and their 
 18.23  specific use and application; 
 18.24     (3) report the results of the evaluations to the 
 18.25  commissioner and the Minnesota health care 
 18.26  commission legislative commission on health care access; and 
 18.27     (4) carry out other duties relating to health technology 
 18.28  assigned by the commission legislature or the legislative 
 18.29  commission on health care access. 
 18.30     Sec. 12.  Minnesota Statutes 1996, section 62J.152, 
 18.31  subdivision 2, is amended to read: 
 18.32     Subd. 2.  [PRIORITIES FOR DESIGNATING TECHNOLOGIES FOR 
 18.33  ASSESSMENT.] The health technology advisory committee shall 
 18.34  consider the following criteria in designating technologies for 
 18.35  evaluation: 
 18.36     (1) the level of controversy within the medical or 
 19.1   scientific community, including questionable or undetermined 
 19.2   efficacy; 
 19.3      (2) the cost implications; 
 19.4      (3) the potential for rapid diffusion; 
 19.5      (4) the impact on a substantial patient population; 
 19.6      (5) the existence of alternative technologies; 
 19.7      (6) the impact on patient safety and health outcome; 
 19.8      (7) the public health importance; 
 19.9      (8) the level of public and professional demand; 
 19.10     (9) the social, ethical, and legal concerns; and 
 19.11     (10) the prevalence of the disease or condition. 
 19.12  The committee may give different weights or attach different 
 19.13  importance to each of the criteria, depending on the technology 
 19.14  being considered.  The committee shall consider any additional 
 19.15  criteria approved by the commissioner and the Minnesota health 
 19.16  care commission legislative commission on health care access. 
 19.17     Sec. 13.  Minnesota Statutes 1996, section 62J.152, 
 19.18  subdivision 4, is amended to read: 
 19.19     Subd. 4.  [TECHNOLOGY EVALUATION PROCESS.] (a) The health 
 19.20  technology advisory committee shall collect and evaluate studies 
 19.21  and research findings on the technologies selected for 
 19.22  evaluation from as wide of a range of sources as needed, 
 19.23  including, but not limited to:  federal agencies or other units 
 19.24  of government, international organizations conducting health 
 19.25  care technology assessments, health carriers, insurers, 
 19.26  manufacturers, professional and trade associations, nonprofit 
 19.27  organizations, and academic institutions.  The health technology 
 19.28  advisory committee may use consultants or experts and solicit 
 19.29  testimony or other input as needed to evaluate a specific 
 19.30  technology. 
 19.31     (b) When the evaluation process on a specific technology 
 19.32  has been completed, the health technology advisory committee 
 19.33  shall submit a preliminary report to the health care 
 19.34  commission legislative commission on health care access and 
 19.35  publish a summary of the preliminary report in the State 
 19.36  Register with a notice that written comments may be submitted.  
 20.1   The preliminary report must include the results of the 
 20.2   technology assessment evaluation, studies and research findings 
 20.3   considered in conducting the evaluation, and the health 
 20.4   technology advisory committee's summary statement about the 
 20.5   evaluation.  Any interested persons or organizations may submit 
 20.6   to the health technology advisory committee written comments 
 20.7   regarding the technology evaluation within 30 days from the date 
 20.8   the preliminary report was published in the State Register.  The 
 20.9   health technology advisory committee's final report on its 
 20.10  technology evaluation must be submitted to the health care 
 20.11  commission commissioner, to the legislature, and to the 
 20.12  information clearinghouse.  A summary of written comments 
 20.13  received by the health technology advisory committee within the 
 20.14  30-day period must be included in the final report.  The health 
 20.15  care commission shall review the final report and prepare its 
 20.16  comments and recommendations.  Before completing its final 
 20.17  comments and recommendations, the health care commission shall 
 20.18  provide adequate public notice that testimony will be accepted 
 20.19  by the health care commission.  The health care commission shall 
 20.20  then forward the final report, its comments and recommendations, 
 20.21  and a summary of the public's comments to the commissioner and 
 20.22  information clearinghouse. 
 20.23     (c) The reports of the health technology advisory committee 
 20.24  and the comments and recommendations of the health care 
 20.25  commission should not eliminate or bar new technology, and are 
 20.26  not rules as defined in the administrative procedure act. 
 20.27     Sec. 14.  Minnesota Statutes 1996, section 62J.152, 
 20.28  subdivision 5, is amended to read: 
 20.29     Subd. 5.  [USE OF TECHNOLOGY EVALUATION.] (a) The final 
 20.30  report on the technology evaluation and the commission's 
 20.31  comments and recommendations may be used: 
 20.32     (1) by the commissioner in retrospective and prospective 
 20.33  review of major expenditures; 
 20.34     (2) by integrated service networks and other group 
 20.35  purchasers and by employers, in making coverage, contracting, 
 20.36  purchasing, and reimbursement decisions; 
 21.1      (3) by organizations in the development of practice 
 21.2   parameters; 
 21.3      (4) by health care providers in making decisions about 
 21.4   adding or replacing technology and the appropriate use of 
 21.5   technology; 
 21.6      (5) by consumers in making decisions about treatment; 
 21.7      (6) by medical device manufacturers in developing and 
 21.8   marketing new technologies; and 
 21.9      (7) as otherwise needed by health care providers, health 
 21.10  care plans, consumers, and purchasers. 
 21.11     (b) At the request of the commissioner, the health care 
 21.12  commission, in consultation with the health technology advisory 
 21.13  committee, shall submit specific recommendations relating to 
 21.14  technologies that have been evaluated under this section for 
 21.15  purposes of retrospective and prospective review of major 
 21.16  expenditures and coverage, contracting, purchasing, and 
 21.17  reimbursement decisions affecting state programs. 
 21.18     Sec. 15.  Minnesota Statutes 1996, section 62J.17, 
 21.19  subdivision 6a, is amended to read: 
 21.20     Subd. 6a.  [PROSPECTIVE REVIEW AND APPROVAL.] (a) 
 21.21  [REQUIREMENT.] No health care provider subject to prospective 
 21.22  review under this subdivision shall make a major spending 
 21.23  commitment unless:  
 21.24     (1) the provider has filed an application with the 
 21.25  commissioner to proceed with the major spending commitment and 
 21.26  has provided all supporting documentation and evidence requested 
 21.27  by the commissioner; and 
 21.28     (2) the commissioner determines, based upon this 
 21.29  documentation and evidence, that the major spending commitment 
 21.30  is appropriate under the criteria provided in subdivision 5a in 
 21.31  light of the alternatives available to the provider.  
 21.32     (b)  [APPLICATION.] A provider subject to prospective 
 21.33  review and approval shall submit an application to the 
 21.34  commissioner before proceeding with any major spending 
 21.35  commitment.  The application must address each item listed in 
 21.36  subdivision 4a, paragraph (a), and must also include 
 22.1   documentation to support the response to each item.  The 
 22.2   provider may submit information, with supporting documentation, 
 22.3   regarding why the major spending commitment should be excepted 
 22.4   from prospective review under subdivision 7.  The submission may 
 22.5   be made either in addition to or instead of the submission of 
 22.6   information relating to the items listed in subdivision 4a, 
 22.7   paragraph (a).  
 22.8      (c)  [REVIEW.] The commissioner shall determine, based upon 
 22.9   the information submitted, whether the major spending commitment 
 22.10  is appropriate under the criteria provided in subdivision 5a, or 
 22.11  whether it should be excepted from prospective review under 
 22.12  subdivision 7.  In making this determination, the commissioner 
 22.13  may also consider relevant information from other sources.  At 
 22.14  the request of the commissioner, the Minnesota health care 
 22.15  commission health technology advisory committee shall convene an 
 22.16  expert review panel made up of persons with knowledge and 
 22.17  expertise regarding medical equipment, specialized services, 
 22.18  health care expenditures, and capital expenditures to review 
 22.19  applications and make recommendations to the commissioner.  The 
 22.20  commissioner shall make a decision on the application within 60 
 22.21  days after an application is received. 
 22.22     (d)  [PENALTIES AND REMEDIES.] The commissioner of health 
 22.23  has the authority to issue fines, seek injunctions, and pursue 
 22.24  other remedies as provided by law. 
 22.25     Sec. 16.  Minnesota Statutes 1996, section 62J.22, is 
 22.26  amended to read: 
 22.27     62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.] 
 22.28     The commissioner of health shall seek the full 
 22.29  participation of federal health care programs under this 
 22.30  chapter, including Medicare, medical assistance, veterans 
 22.31  administration programs, and other federal programs.  The 
 22.32  commissioner of human services shall under the direction of the 
 22.33  health care commission submit waiver requests and take other 
 22.34  action necessary to obtain federal approval to allow 
 22.35  participation of the medical assistance program.  Other state 
 22.36  agencies shall provide assistance at the request of the 
 23.1   commission.  If federal approval is not given for one or more 
 23.2   federal programs, data on the amount of health care spending 
 23.3   that is collected under section 62J.04 shall be adjusted so that 
 23.4   state and regional spending limits take into account the failure 
 23.5   of the federal program to participate. 
 23.6      Sec. 17.  Minnesota Statutes 1996, section 62J.25, is 
 23.7   amended to read: 
 23.8      62J.25 [MANDATORY MEDICARE ASSIGNMENT.] 
 23.9      (a) Effective January 1, 1993, a health care provider 
 23.10  authorized to participate in the Medicare program shall not 
 23.11  charge to or collect from a Medicare beneficiary who is a 
 23.12  Minnesota resident any amount in excess of 115 percent of the 
 23.13  Medicare-approved amount for any Medicare-covered service 
 23.14  provided. 
 23.15     (b) Effective January 1, 1994, a health care provider 
 23.16  authorized to participate in the Medicare program shall not 
 23.17  charge to or collect from a Medicare beneficiary who is a 
 23.18  Minnesota resident any amount in excess of 110 percent of the 
 23.19  Medicare-approved amount for any Medicare-covered service 
 23.20  provided. 
 23.21     (c) Effective January 1, 1995, a health care provider 
 23.22  authorized to participate in the Medicare program shall not 
 23.23  charge to or collect from a Medicare beneficiary who is a 
 23.24  Minnesota resident any amount in excess of 105 percent of the 
 23.25  Medicare-approved amount for any Medicare-covered service 
 23.26  provided. 
 23.27     (d) Effective January 1, 1996, a health care provider 
 23.28  authorized to participate in the Medicare program shall not 
 23.29  charge to or collect from a Medicare beneficiary who is a 
 23.30  Minnesota resident any amount in excess of the Medicare-approved 
 23.31  amount for any Medicare-covered service provided. 
 23.32     (e) This section does not apply to ambulance services as 
 23.33  defined in section 144.801, subdivision 4, or medical supplies 
 23.34  and equipment. 
 23.35     Sec. 18.  Minnesota Statutes 1996, section 62J.2914, 
 23.36  subdivision 1, is amended to read: 
 24.1      Subdivision 1.  [DISCLOSURE.] An application for approval 
 24.2   must include, to the extent applicable, disclosure of the 
 24.3   following: 
 24.4      (1) a descriptive title; 
 24.5      (2) a table of contents; 
 24.6      (3) exact names of each party to the application and the 
 24.7   address of the principal business office of each party; 
 24.8      (4) the name, address, and telephone number of the persons 
 24.9   authorized to receive notices and communications with respect to 
 24.10  the application; 
 24.11     (5) a verified statement by a responsible officer of each 
 24.12  party to the application attesting to the accuracy and 
 24.13  completeness of the enclosed information; 
 24.14     (6) background information relating to the proposed 
 24.15  arrangement, including: 
 24.16     (i) a description of the proposed arrangement, including a 
 24.17  list of any services or products that are the subject of the 
 24.18  proposed arrangement; 
 24.19     (ii) an identification of any tangential services or 
 24.20  products associated with the services or products that are the 
 24.21  subject of the proposed arrangement; 
 24.22     (iii) a description of the geographic territory involved in 
 24.23  the proposed arrangement; 
 24.24     (iv) if the geographic territory described in item (iii), 
 24.25  is different from the territory in which the applicants have 
 24.26  engaged in the type of business at issue over the last five 
 24.27  years, a description of how and why the geographic territory 
 24.28  differs; 
 24.29     (v) identification of all products or services that a 
 24.30  substantial share of consumers would consider substitutes for 
 24.31  any service or product that is the subject of the proposed 
 24.32  arrangement; 
 24.33     (vi) identification of whether any services or products of 
 24.34  the proposed arrangement are currently being offered, capable of 
 24.35  being offered, utilized, or capable of being utilized by other 
 24.36  providers or purchasers in the geographic territory described in 
 25.1   item (iii); 
 25.2      (vii) identification of the steps necessary, under current 
 25.3   market and regulatory conditions, for other parties to enter the 
 25.4   territory described in item (iii) and compete with the 
 25.5   applicant; 
 25.6      (viii) a description of the previous history of dealings 
 25.7   between the parties to the application; 
 25.8      (ix) a detailed explanation of the projected effects, 
 25.9   including expected volume, change in price, and increased 
 25.10  revenue, of the arrangement on each party's current businesses, 
 25.11  both generally as well as the aspects of the business directly 
 25.12  involved in the proposed arrangement; 
 25.13     (x) the present market share of the parties to the 
 25.14  application and of others affected by the proposed arrangement, 
 25.15  and projected market shares after implementation of the proposed 
 25.16  arrangement; 
 25.17     (xi) a statement of why the projected levels of cost, 
 25.18  access, or quality could not be achieved in the existing market 
 25.19  without the proposed arrangement; and 
 25.20     (xii) an explanation of how the arrangement relates to any 
 25.21  Minnesota health care commission or applicable regional 
 25.22  coordinating board plans for delivery of health care; and 
 25.23     (7) a detailed explanation of how the transaction will 
 25.24  affect cost, access, and quality.  The explanation must address 
 25.25  the factors in section 62J.2917, subdivision 2, paragraphs (b) 
 25.26  to (d), to the extent applicable. 
 25.27     Sec. 19.  Minnesota Statutes 1996, section 62J.2915, is 
 25.28  amended to read: 
 25.29     62J.2915 [NOTICE AND COMMENT.] 
 25.30     Subdivision 1.  [NOTICE.] The commissioner shall cause the 
 25.31  notice described in section 62J.2914, subdivision 2, to be 
 25.32  published in the State Register and sent to the Minnesota health 
 25.33  care commission, the regional coordinating boards for any 
 25.34  regions that include all or part of the territory covered by the 
 25.35  proposed arrangement, and any person who has requested to be 
 25.36  placed on a list to receive notice of applications.  The 
 26.1   commissioner may maintain separate notice lists for different 
 26.2   regions of the state.  The commissioner may also send a copy of 
 26.3   the notice to any person together with a request that the person 
 26.4   comment as provided under subdivision 2.  Copies of the request 
 26.5   must be provided to the applicant. 
 26.6      Subd. 2.  [COMMENTS.] Within 20 days after the notice is 
 26.7   published, any person may mail to the commissioner written 
 26.8   comments with respect to the application.  Within 30 days after 
 26.9   the notice is published, the Minnesota health care commission or 
 26.10  any regional coordinating board may mail to the commissioner 
 26.11  comments with respect to the application.  Persons submitting 
 26.12  comments shall provide a copy of the comments to the applicant.  
 26.13  The applicant may mail to the commissioner written responses to 
 26.14  any comments within ten days after the deadline for mailing such 
 26.15  comments.  The applicant shall send a copy of the response to 
 26.16  the person submitting the comment. 
 26.17     Sec. 20.  Minnesota Statutes 1996, section 62J.2916, 
 26.18  subdivision 1, is amended to read: 
 26.19     Subdivision 1.  [CHOICE OF PROCEDURES.] After the 
 26.20  conclusion of the period provided in section 62J.2915, 
 26.21  subdivision 2, for the applicant to respond to comments, the 
 26.22  commissioner shall select one of the three procedures provided 
 26.23  in subdivision 2.  In determining which procedure to use, the 
 26.24  commissioner shall consider the following criteria: 
 26.25     (1) the size of the proposed arrangement, in terms of 
 26.26  number of parties and amount of money involved; 
 26.27     (2) the complexity of the proposed arrangement; 
 26.28     (3) the novelty of the proposed arrangement; 
 26.29     (4) the substance and quantity of the comments received; 
 26.30     (5) any comments received from the Minnesota health care 
 26.31  commission or regional coordinating boards; and 
 26.32     (6) the presence or absence of any significant gaps in the 
 26.33  factual record. 
 26.34     If the applicant demands a contested case hearing no later 
 26.35  than the conclusion of the period provided in section 62J.2915, 
 26.36  subdivision 2, for the applicant to respond to comments, the 
 27.1   commissioner shall not select a procedure.  Instead, the 
 27.2   applicant shall be given a contested case proceeding as a matter 
 27.3   of right. 
 27.4      Sec. 21.  Minnesota Statutes 1996, section 62J.2917, 
 27.5   subdivision 2, is amended to read: 
 27.6      Subd. 2.  [FACTORS.] (a)  [GENERALLY APPLICABLE FACTORS.] 
 27.7   In making a determination about cost, access, and quality, the 
 27.8   commissioner may consider the following factors, to the extent 
 27.9   relevant: 
 27.10     (1) whether the proposal is compatible with the cost 
 27.11  containment plan or other plan of the Minnesota health care 
 27.12  commission or the applicable regional plans of the regional 
 27.13  coordinating boards; 
 27.14     (2) market structure: 
 27.15     (i) actual and potential sellers and buyers, or providers 
 27.16  and purchasers; 
 27.17     (ii) actual and potential consumers; 
 27.18     (iii) geographic market area; and 
 27.19     (iv) entry conditions; 
 27.20     (3) current market conditions; 
 27.21     (4) the historical behavior of the market; 
 27.22     (5) performance of other, similar arrangements; 
 27.23     (6) whether the proposal unnecessarily restrains 
 27.24  competition or restrains competition in ways not reasonably 
 27.25  related to the purposes of this chapter; and 
 27.26     (7) the financial condition of the applicant. 
 27.27     (b)  [COST.] The commissioner's analysis of cost must focus 
 27.28  on the individual consumer of health care.  Cost savings to be 
 27.29  realized by providers, health carriers, group purchasers, or 
 27.30  other participants in the health care system are relevant only 
 27.31  to the extent that the savings are likely to be passed on to the 
 27.32  consumer.  However, where an application is submitted by 
 27.33  providers or purchasers who are paid primarily by third party 
 27.34  payers unaffiliated with the applicant, it is sufficient for the 
 27.35  applicant to show that cost savings are likely to be passed on 
 27.36  to the unaffiliated third party payers; the applicants do not 
 28.1   have the burden of proving that third party payers with whom the 
 28.2   applicants are not affiliated will pass on cost savings to 
 28.3   individuals receiving coverage through the third party payers.  
 28.4   In making determinations as to costs, the commissioner may 
 28.5   consider: 
 28.6      (1) the cost savings likely to result to the applicant; 
 28.7      (2) the extent to which the cost savings are likely to be 
 28.8   passed on to the consumer and in what form; 
 28.9      (3) the extent to which the proposed arrangement is likely 
 28.10  to result in cost shifting by the applicant onto other payers or 
 28.11  purchasers of other products or services; 
 28.12     (4) the extent to which the cost shifting by the applicant 
 28.13  is likely to be followed by other persons in the market; 
 28.14     (5) the current and anticipated supply and demand for any 
 28.15  products or services at issue; 
 28.16     (6) the representations and guarantees of the applicant and 
 28.17  their enforceability; 
 28.18     (7) likely effectiveness of regulation by the commissioner; 
 28.19     (8) inferences to be drawn from market structure; 
 28.20     (9) the cost of regulation, both for the state and for the 
 28.21  applicant; and 
 28.22     (10) any other factors tending to show that the proposed 
 28.23  arrangement is or is not likely to reduce cost. 
 28.24     (c)  [ACCESS.] In making determinations as to access, the 
 28.25  commissioner may consider: 
 28.26     (1) the extent to which the utilization of needed health 
 28.27  care services or products by the intended targeted population is 
 28.28  likely to increase or decrease.  When a proposed arrangement is 
 28.29  likely to increase access in one geographic area, by lowering 
 28.30  prices or otherwise expanding supply, but limits access in 
 28.31  another geographic area by removing service capabilities from 
 28.32  that second area, the commissioner shall articulate the criteria 
 28.33  employed to balance these effects; 
 28.34     (2) the extent to which the proposed arrangement is likely 
 28.35  to make available a new and needed service or product to a 
 28.36  certain geographic area; and 
 29.1      (3) the extent to which the proposed arrangement is likely 
 29.2   to otherwise make health care services or products more 
 29.3   financially or geographically available to persons who need them.
 29.4      If the commissioner determines that the proposed 
 29.5   arrangement is likely to increase access and bases that 
 29.6   determination on a projected increase in utilization, the 
 29.7   commissioner shall also determine and make a specific finding 
 29.8   that the increased utilization does not reflect overutilization. 
 29.9      (d)  [QUALITY.] In making determinations as to quality, the 
 29.10  commissioner may consider the extent to which the proposed 
 29.11  arrangement is likely to: 
 29.12     (1) decrease morbidity and mortality; 
 29.13     (2) result in faster convalescence; 
 29.14     (3) result in fewer hospital days; 
 29.15     (4) permit providers to attain needed experience or 
 29.16  frequency of treatment, likely to lead to better outcomes; 
 29.17     (5) increase patient satisfaction; and 
 29.18     (6) have any other features likely to improve or reduce the 
 29.19  quality of health care. 
 29.20     Sec. 22.  Minnesota Statutes 1996, section 62J.2921, 
 29.21  subdivision 2, is amended to read: 
 29.22     Subd. 2.  [NOTICE.] The commissioner shall begin a 
 29.23  proceeding to revoke approval by providing written notice to the 
 29.24  applicant describing in detail the basis for the proposed 
 29.25  revocation.  Notice of the proceeding must be published in the 
 29.26  State Register and submitted to the Minnesota health care 
 29.27  commission and the applicable regional coordinating boards.  The 
 29.28  notice must invite the submission of comments to the 
 29.29  commissioner. 
 29.30     Sec. 23.  Minnesota Statutes 1996, section 62J.451, 
 29.31  subdivision 6b, is amended to read: 
 29.32     Subd. 6b.  [CONSUMER SURVEYS.] (a) The health data 
 29.33  institute shall develop and implement a mechanism for collecting 
 29.34  comparative data on consumer perceptions of the health care 
 29.35  system, including consumer satisfaction, through adoption of a 
 29.36  standard consumer survey.  This survey shall include enrollees 
 30.1   in community integrated service networks, integrated service 
 30.2   networks, health maintenance organizations, preferred provider 
 30.3   organizations, indemnity insurance plans, public programs, and 
 30.4   other health plan companies.  The health data institute, in 
 30.5   consultation with the health care commission, shall determine a 
 30.6   mechanism for the inclusion of the uninsured.  This consumer 
 30.7   survey may be conducted every two years.  A focused survey may 
 30.8   be conducted on the off years.  Health plan companies and group 
 30.9   purchasers shall provide to the health data institute roster 
 30.10  data as defined in subdivision 2, including the names, 
 30.11  addresses, and telephone numbers of enrollees and former 
 30.12  enrollees and other data necessary for the completion of this 
 30.13  survey.  This roster data provided by the health plan companies 
 30.14  and group purchasers is classified as provided under section 
 30.15  62J.452.  The health data institute may analyze and prepare 
 30.16  findings from the raw, unaggregated data, and the findings from 
 30.17  this survey may be included in the health plan company 
 30.18  performance reports specified in subdivision 6a, and in other 
 30.19  reports developed and disseminated by the health data institute 
 30.20  and the commissioner.  The raw, unaggregated data is classified 
 30.21  as provided under section 62J.452, and may be made available by 
 30.22  the health data institute to the extent permitted under section 
 30.23  62J.452.  The health data institute shall provide raw, 
 30.24  unaggregated data to the commissioner.  The survey may include 
 30.25  information on the following subjects: 
 30.26     (1) enrollees' overall satisfaction with their health care 
 30.27  plan; 
 30.28     (2) consumers' perception of access to emergency, urgent, 
 30.29  routine, and preventive care, including locations, hours, 
 30.30  waiting times, and access to care when needed; 
 30.31     (3) premiums and costs; 
 30.32     (4) technical competence of providers; 
 30.33     (5) communication, courtesy, respect, reassurance, and 
 30.34  support; 
 30.35     (6) choice and continuity of providers; 
 30.36     (7) continuity of care; 
 31.1      (8) outcomes of care; 
 31.2      (9) services offered by the plan, including range of 
 31.3   services, coverage for preventive and routine services, and 
 31.4   coverage for illness and hospitalization; 
 31.5      (10) availability of information; and 
 31.6      (11) paperwork. 
 31.7      (b) The health data institute shall appoint a consumer 
 31.8   advisory group which shall consist of 13 individuals, 
 31.9   representing enrollees from public and private health plan 
 31.10  companies and programs and two uninsured consumers, to advise 
 31.11  the health data institute on issues of concern to consumers.  
 31.12  The advisory group must have at least one member from each 
 31.13  regional coordinating board region of the state.  The advisory 
 31.14  group expires June 30, 1996. 
 31.15     Sec. 24.  Minnesota Statutes 1996, section 62L.02, 
 31.16  subdivision 26, is amended to read: 
 31.17     Subd. 26.  [SMALL EMPLOYER.] (a) "Small employer" means a 
 31.18  person, firm, corporation, partnership, association, or other 
 31.19  entity actively engaged in business, including a political 
 31.20  subdivision of the state, that, on at least 50 percent of its 
 31.21  working days during the preceding 12 months, employed no fewer 
 31.22  than two nor more than 29, or after June 30, 1995 1998, more 
 31.23  than 49 99, current employees, the majority of whom were 
 31.24  employed in this state.  If an employer has only two eligible 
 31.25  employees and one is the spouse, child, sibling, parent, or 
 31.26  grandparent of the other, the employer must be a Minnesota 
 31.27  domiciled employer and have paid social security or 
 31.28  self-employment tax on behalf of both eligible employees.  If an 
 31.29  employer has only one eligible employee who has not waived 
 31.30  coverage, the sale of a health plan to or for that eligible 
 31.31  employee is not a sale to a small employer and is not subject to 
 31.32  this chapter and may be treated as the sale of an individual 
 31.33  health plan.  A small employer plan may be offered through a 
 31.34  domiciled association to self-employed individuals and small 
 31.35  employers who are members of the association, even if the 
 31.36  self-employed individual or small employer has fewer than two 
 32.1   current employees.  Entities that are eligible to file a 
 32.2   combined tax return for purposes of state tax laws are 
 32.3   considered a single employer for purposes of determining the 
 32.4   number of current employees.  Small employer status must be 
 32.5   determined on an annual basis as of the renewal date of the 
 32.6   health benefit plan.  The provisions of this chapter continue to 
 32.7   apply to an employer who no longer meets the requirements of 
 32.8   this definition until the annual renewal date of the employer's 
 32.9   health benefit plan.  
 32.10     (b) Where an association, as defined in section 62L.045, 
 32.11  comprised of employers contracts with a health carrier to 
 32.12  provide coverage to its members who are small employers, the 
 32.13  association and health benefit plans it provides to small 
 32.14  employers, are subject to section 62L.045, with respect to small 
 32.15  employers in the association, even though the association also 
 32.16  provides coverage to its members that do not qualify as small 
 32.17  employers.  
 32.18     (c) If an employer has employees covered under a trust 
 32.19  specified in a collective bargaining agreement under the federal 
 32.20  Labor-Management Relations Act of 1947, United States Code, 
 32.21  title 29, section 141, et seq., as amended, or employees whose 
 32.22  health coverage is determined by a collective bargaining 
 32.23  agreement and, as a result of the collective bargaining 
 32.24  agreement, is purchased separately from the health plan provided 
 32.25  to other employees, those employees are excluded in determining 
 32.26  whether the employer qualifies as a small employer.  Those 
 32.27  employees are considered to be a separate small employer if they 
 32.28  constitute a group that would qualify as a small employer in the 
 32.29  absence of the employees who are not subject to the collective 
 32.30  bargaining agreement. 
 32.31     Sec. 25.  Minnesota Statutes 1996, section 62L.08, 
 32.32  subdivision 8, is amended to read: 
 32.33     Subd. 8.  [FILING REQUIREMENT.] No later than July 1, 1993, 
 32.34  and each year thereafter, a health carrier that offers, sells, 
 32.35  issues, or renews a health benefit plan for small employers 
 32.36  shall file with the commissioner the index rates and must 
 33.1   demonstrate that all rates shall be within the rating 
 33.2   restrictions defined in this chapter.  Such demonstration must 
 33.3   include the allowable range of rates from the index rates and a 
 33.4   description of how the health carrier intends to use demographic 
 33.5   factors including case characteristics in calculating the 
 33.6   premium rates.  The rates shall not be approved, unless the 
 33.7   commissioner has determined that the rates are reasonable.  In 
 33.8   determining reasonableness, the commissioner shall consider the 
 33.9   growth rates applied cost containment goals established under 
 33.10  section 62J.04, subdivision 1, paragraph (b), to the calendar 
 33.11  year or years that the proposed premium rate would be in effect, 
 33.12  actuarially valid changes in risk associated with the enrollee 
 33.13  population, and actuarially valid changes as a result of 
 33.14  statutory changes in Laws 1992, chapter 549.  For premium rates 
 33.15  proposed to go into effect between July 1, 1993 and December 31, 
 33.16  1993, the pertinent growth rate is the growth rate applied under 
 33.17  section 62J.04, subdivision 1, paragraph (b), to calendar year 
 33.18  1994.  If the cost containment goals established under section 
 33.19  62J.04, subdivision 1, paragraph (b), are not met by the health 
 33.20  plan company, the commissioner shall not approve the rates.  
 33.21     Sec. 26.  Minnesota Statutes 1996, section 62N.25, 
 33.22  subdivision 5, is amended to read: 
 33.23     Subd. 5.  [BENEFITS.] Community integrated service networks 
 33.24  must offer the health maintenance organization benefit set, as 
 33.25  defined in chapter 62D, and other laws applicable to entities 
 33.26  regulated under chapter 62D, except that the community 
 33.27  integrated service network may impose a deductible, not to 
 33.28  exceed $1,000 per person per year, provided that out-of-pocket 
 33.29  expenses on covered services do not exceed $3,000 per person or 
 33.30  $5,000 per family per year.  The deductible must not apply to 
 33.31  preventive health services as described in Minnesota Rules, part 
 33.32  4685.0801, subpart 8.  Community networks and chemical 
 33.33  dependency facilities under contract with a community network 
 33.34  shall use the assessment criteria in Minnesota Rules, parts 
 33.35  9530.6600 to 9530.6660, when assessing enrollees for chemical 
 33.36  dependency treatment. 
 34.1      Sec. 27.  Minnesota Statutes 1996, section 62Q.03, 
 34.2   subdivision 5a, is amended to read: 
 34.3      Subd. 5a.  [PUBLIC PROGRAMS.] (a) A separate risk 
 34.4   adjustment system must be developed for state-run public 
 34.5   programs, including medical assistance, general assistance 
 34.6   medical care, and MinnesotaCare.  The system must be developed 
 34.7   in accordance with the general risk adjustment methodologies 
 34.8   described in this section, must include factors in addition to 
 34.9   age and sex adjustment, and may include additional demographic 
 34.10  factors, different targeted conditions, and/or different payment 
 34.11  amounts for conditions.  The risk adjustment system for public 
 34.12  programs must attempt to reflect the special needs related to 
 34.13  poverty, cultural, or language barriers and other needs of the 
 34.14  public program population. 
 34.15     (b) The commissioners of health and human services shall 
 34.16  jointly convene a public programs risk adjustment work group 
 34.17  responsible for advising the commissioners in the design of the 
 34.18  public programs risk adjustment system.  The commissioner of 
 34.19  health shall work with the risk adjustment association to ensure 
 34.20  coordination between the risk adjustment systems for the public 
 34.21  and private sectors.  The commissioner of human services shall 
 34.22  seek any needed federal approvals necessary for the inclusion of 
 34.23  the medical assistance program in the public programs risk 
 34.24  adjustment system.  
 34.25     (c) The public programs risk adjustment work group must be 
 34.26  representative of the persons served by publicly paid health 
 34.27  programs and providers and health plans that meet their needs.  
 34.28  To the greatest extent possible, the appointing authorities 
 34.29  shall attempt to select representatives that have historically 
 34.30  served a significant number of persons in publicly paid health 
 34.31  programs or the uninsured.  Membership of the work group shall 
 34.32  be as follows: 
 34.33     (1) one provider member appointed by the Minnesota Medical 
 34.34  Association; 
 34.35     (2) two provider members appointed by the Minnesota 
 34.36  Hospital Association, at least one of whom must represent a 
 35.1   major disproportionate share hospital; 
 35.2      (3) five members appointed by the Minnesota Council of 
 35.3   HMOs, one of whom must represent an HMO with fewer than 50,000 
 35.4   enrollees located outside the metropolitan area and one of whom 
 35.5   must represent an HMO with at least 50 percent of total 
 35.6   membership enrolled through a public program; 
 35.7      (4) two representatives of counties appointed by the 
 35.8   Association of Minnesota Counties; 
 35.9      (5) three representatives of organizations representing the 
 35.10  interests of families, children, childless adults, and elderly 
 35.11  persons served by the various publicly paid health programs 
 35.12  appointed by the governor; 
 35.13     (6) two representatives of persons with mental health, 
 35.14  developmental or physical disabilities, chemical dependency, or 
 35.15  chronic illness appointed by the governor; and 
 35.16     (7) three public members appointed by the governor, at 
 35.17  least one of whom must represent a community health board.  The 
 35.18  risk adjustment association may appoint a representative, if a 
 35.19  representative is not otherwise appointed by an appointing 
 35.20  authority. 
 35.21     (d) The commissioners of health and human services, with 
 35.22  the advice of the public programs risk adjustment work group, 
 35.23  shall develop a work plan and time frame and shall coordinate 
 35.24  their efforts with the private sector risk adjustment 
 35.25  association's activities and other state initiatives related to 
 35.26  public program managed care reimbursement.  The commissioners of 
 35.27  health and human services shall report to the health care 
 35.28  commission and to the appropriate legislative committees on 
 35.29  January 15, 1996, and on January 15, 1997, on any policy or 
 35.30  legislative changes necessary to implement the public program 
 35.31  risk adjustment system. 
 35.32     Sec. 28.  Minnesota Statutes 1996, section 62Q.33, 
 35.33  subdivision 2, is amended to read: 
 35.34     Subd. 2.  [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 
 35.35  of health, in consultation with the state community health 
 35.36  services advisory committee and the commissioner of human 
 36.1   services, and representatives of local health departments, 
 36.2   county government, a municipal government acting as a local 
 36.3   board of health, the Minnesota health care commission, area 
 36.4   Indian health services, health care providers, and citizens 
 36.5   concerned about public health, shall coordinate the process for 
 36.6   defining implementation and financing responsibilities of the 
 36.7   local government core public health functions.  The commissioner 
 36.8   shall submit recommendations and an initial and final report on 
 36.9   local government core public health functions according to the 
 36.10  timeline established in subdivision 5. 
 36.11     Sec. 29.  Minnesota Statutes 1996, section 256.9354, 
 36.12  subdivision 5, is amended to read: 
 36.13     Subd. 5.  [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO 
 36.14  CHILDREN.] (a) Beginning October 1, 1994, the definition of 
 36.15  "eligible persons" is expanded to include all individuals and 
 36.16  households with no children who have gross family incomes that 
 36.17  are equal to or less than 125 percent of the federal poverty 
 36.18  guidelines and who are not eligible for medical assistance 
 36.19  without a spenddown under chapter 256B.  
 36.20     (b) After October 1, 1995, the commissioner of human 
 36.21  services may expand the definition of "eligible persons" to 
 36.22  include all individuals and households with no children who have 
 36.23  gross family incomes that are equal to or less than 135 percent 
 36.24  of federal poverty guidelines and are not eligible for medical 
 36.25  assistance without a spenddown under chapter 256B.  This 
 36.26  expansion may occur only if the financial management 
 36.27  requirements of section 256.9352, subdivision 3, can be met. 
 36.28     (c) The commissioners of health and human services, in 
 36.29  consultation with the legislative commission on health care 
 36.30  access, shall make preliminary recommendations to the 
 36.31  legislature by October 1, 1995, and final recommendations to the 
 36.32  legislature by February 1, 1996, on whether a further expansion 
 36.33  of the definition of "eligible persons" to include all 
 36.34  individuals and households with no children who have gross 
 36.35  family incomes that are equal to or less than 150 percent of 
 36.36  federal poverty guidelines and are not eligible for medical 
 37.1   assistance without a spenddown under chapter 256B would be 
 37.2   allowed under the financial management constraints outlined in 
 37.3   section 256.9352, subdivision 3. 
 37.4      (d) (b) Beginning July 1, 1997, the definition of eligible 
 37.5   persons is expanded to include all individuals and households 
 37.6   with no children who have gross family incomes that are equal to 
 37.7   or less than 175 percent of the federal poverty guidelines and 
 37.8   who are not eligible for medical assistance without a spenddown 
 37.9   under chapter 256B. 
 37.10     (c) All eligible persons under paragraphs (a) and (b) are 
 37.11  eligible for coverage through the MinnesotaCare program but must 
 37.12  pay a premium as determined under sections 256.9357 and 
 37.13  256.9358.  Individuals and families whose income is greater than 
 37.14  the limits established under section 256.9358 may not enroll in 
 37.15  the MinnesotaCare program. 
 37.16     Sec. 30.  Minnesota Statutes 1996, section 256.9355, is 
 37.17  amended by adding a subdivision to read: 
 37.18     Subd. 5.  [AVAILABILITY OF PRIVATE INSURANCE.] The 
 37.19  commissioner, in consultation with the commissioners of health 
 37.20  and commerce, shall provide information regarding the 
 37.21  availability of private health insurance coverage to all 
 37.22  families and individuals enrolled in the MinnesotaCare program 
 37.23  whose gross family income is equal to or more than 200 percent 
 37.24  of the federal poverty guidelines.  This information must be 
 37.25  provided upon initial enrollment and annually thereafter. 
 37.26     Sec. 31.  Minnesota Statutes 1996, section 295.582, is 
 37.27  amended to read: 
 37.28     295.582 [AUTHORITY.] 
 37.29     (a) A hospital, surgical center, pharmacy, or health care 
 37.30  provider that is subject to a tax under section 295.52, or a 
 37.31  pharmacy that has paid additional expense transferred under this 
 37.32  section by a wholesale drug distributor, may transfer additional 
 37.33  expense generated by section 295.52 obligations on to all 
 37.34  third-party contracts for the purchase of health care services 
 37.35  on behalf of a patient or consumer.  The additional expense 
 37.36  transferred to the third-party purchaser must not exceed two 
 38.1   percent of the gross revenues received under the third-party 
 38.2   contract, and two percent of copayments and deductibles paid by 
 38.3   the individual patient or consumer.  The expense must not be 
 38.4   generated on revenues derived from payments that are excluded 
 38.5   from the tax under section 295.53.  All third-party purchasers 
 38.6   of health care services including, but not limited to, 
 38.7   third-party purchasers regulated under chapter 60A, 62A, 62C, 
 38.8   62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 
 38.9   471.61 or 471.617, must pay the transferred expense in addition 
 38.10  to any payments due under existing contracts with the hospital, 
 38.11  surgical center, pharmacy, or health care provider, to the 
 38.12  extent allowed under federal law.  A third-party purchaser of 
 38.13  health care services includes, but is not limited to, a health 
 38.14  carrier, integrated service network, or community integrated 
 38.15  service network that pays for health care services on behalf of 
 38.16  patients or that reimburses, indemnifies, compensates, or 
 38.17  otherwise insures patients for health care services.  A 
 38.18  third-party purchaser shall comply with this section regardless 
 38.19  of whether the third-party purchaser is a for-profit, 
 38.20  not-for-profit, or nonprofit entity.  A wholesale drug 
 38.21  distributor may transfer additional expense generated by section 
 38.22  295.52 obligations to entities that purchase from the 
 38.23  wholesaler, and the entities must pay the additional expense.  
 38.24  Nothing in this section limits the ability of a hospital, 
 38.25  surgical center, pharmacy, wholesale drug distributor, or health 
 38.26  care provider to recover all or part of the section 295.52 
 38.27  obligation by other methods, including increasing fees or 
 38.28  charges. 
 38.29     (b) Each third-party purchaser regulated under any chapter 
 38.30  cited in paragraph (a) shall include with its annual renewal for 
 38.31  certification of authority or licensure documentation indicating 
 38.32  compliance with paragraph (a).  
 38.33     (c) Any hospital, surgical center, pharmacy, or health care 
 38.34  provider subject to a tax under section 295.52 or a pharmacy 
 38.35  that has paid additional expense transferred under this section 
 38.36  by a wholesale drug distributor may file a complaint with the 
 39.1   commissioner responsible for regulating the third-party 
 39.2   purchaser if at any time the third-party purchaser fails to 
 39.3   comply with paragraph (a).  
 39.4      (d) If the commissioner responsible for regulating the 
 39.5   third-party purchaser finds at any time that the third-party 
 39.6   purchaser has not complied with paragraph (a), the commissioner 
 39.7   may take enforcement action against a health plan company which 
 39.8   is subject to the commissioner's regulatory jurisdiction and 
 39.9   which does not allow a hospital, surgical center, pharmacy, or 
 39.10  provider to pass-through the tax.  The commissioner may by order 
 39.11  fine or censure the third-party purchaser or revoke or suspend 
 39.12  the certificate of authority or license of the third-party 
 39.13  purchaser to do business in this state if the commissioner finds 
 39.14  that the third-party purchaser has not complied with this 
 39.15  section.  The third-party purchaser may appeal the 
 39.16  commissioner's order through a contested case hearing in 
 39.17  accordance with chapter 14. 
 39.18     Sec. 32.  [REPEALER.] 
 39.19     (a) Minnesota Statutes 1996, sections 62J.03, subdivision 
 39.20  3; 62J.042; 62J.05; 62J.051; 62J.06; 62J.09, subdivision 3a; 
 39.21  62N.02, subdivision 3; 62Q.165, subdivision 3; 62Q.23; 62Q.25; 
 39.22  62Q.29; and 62Q.41, are repealed. 
 39.23     (b) Laws 1993, chapter 247, article 4, section 8; Laws 
 39.24  1995, chapter 96, section 2; and Laws 1995, First Special 
 39.25  Session chapter 3, article 13, section 2, are repealed. 
 39.26     (c) Laws 1994, chapter 625, article 5, section 5, 
 39.27  subdivision 1, as amended by Laws 1995, chapter 234, article 3, 
 39.28  section 8, is repealed.