1st Unofficial Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to health; modifying provisions relating to 1.3 MinnesotaCare and general assistance medical care; 1.4 providing for health care reform; modifying 1.5 MinnesotaCare tax provisions; establishing a senior 1.6 citizen drug program; modifying provisions relating to 1.7 the Minnesota comprehensive health association; 1.8 providing for rural health care; providing civil and 1.9 criminal penalties; appropriating money; amending 1.10 Minnesota Statutes 1996, sections 60A.15, subdivision 1.11 1; 60A.951, subdivision 5; 62A.021, by adding a 1.12 subdivision; 62A.61; 62A.65, subdivision 3; 62D.02, 1.13 subdivision 5; 62D.09, subdivision 3; 62E.02, 1.14 subdivisions 13 and 18; 62E.11, by adding a 1.15 subdivision; 62E.13, subdivision 2; 62J.017; 62J.04, 1.16 subdivisions 1, 1a, and 9; 62J.041; 62J.06; 62J.07, 1.17 subdivisions 1 and 3; 62J.09, subdivision 1; 62J.15, 1.18 subdivision 1; 62J.152, subdivisions 1, 2, 4, 5, and 1.19 by adding a subdivision; 62J.17, subdivision 6a; 1.20 62J.22; 62J.25; 62J.2914, subdivision 1; 62J.2915; 1.21 62J.2916, subdivision 1; 62J.2917, subdivision 2; 1.22 62J.2921, subdivision 2; 62J.451, subdivision 6b; 1.23 62L.08, subdivision 8; 62M.02, subdivision 21; 62N.01, 1.24 subdivision 1; 62N.22; 62N.23; 62N.25, subdivision 5; 1.25 62N.26; 62N.40; 62Q.01, subdivisions 3, 4, and 5; 1.26 62Q.03, subdivision 5a; 62Q.106; 62Q.19, subdivision 1.27 1; 62Q.33, subdivision 2; 62Q.45, subdivision 2; 1.28 136A.1355, subdivisions 1, 2, 3, and 5; 144.1465; 1.29 144.147, subdivisions 1, 2, 3, and 4; 144.1484, 1.30 subdivision 1; 256.9352, subdivision 3; 256.9353, 1.31 subdivisions 1, 3, and 7; 256.9354, subdivisions 4, 5, 1.32 6, 7, and by adding a subdivision; 256.9355, 1.33 subdivisions 1, 2, 4, and by adding a subdivision; 1.34 256.9357, subdivisions 1 and 3; 256.9358, subdivision 1.35 4; 256.9359, subdivision 2; 256.9362, subdivision 6; 1.36 256.9363, subdivisions 1 and 5; 256.9657, subdivision 1.37 3; 256B.04, by adding a subdivision; 256B.056, 1.38 subdivision 8; 256B.0625, subdivision 15; 256D.03, 1.39 subdivisions 3 and 3b; 295.50, subdivisions 3, 4, 6, 1.40 7, 13, and 14; 295.51, subdivision 1; 295.52, 1.41 subdivisions 1, 1a, 2, 3, 4, and by adding a 1.42 subdivision; 295.53, subdivisions 1, 3, and 4; 295.54, 1.43 subdivisions 1 and 2; 295.55, subdivision 2; 295.58; 1.44 and 295.582; proposing coding for new law in Minnesota 1.45 Statutes, chapters 16A; 62Q; 144; and 256; repealing 1.46 Minnesota Statutes 1996, sections 62J.03, subdivision 2.1 3; 62J.04, subdivisions 4 and 7; 62J.041, subdivision 2.2 7; 62J.042; 62J.05; 62J.051; 62J.09, subdivision 3a; 2.3 62J.15; 62J.152; 62J.156; 62J.37; 62N.01, subdivision 2.4 2; 62N.02, subdivisions 2, 3, 4b, 4c, 6, 7, 8, 9, 10, 2.5 and 12; 62N.03; 62N.04; 62N.05; 62N.06; 62N.065; 2.6 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 62N.077; 2.7 62N.078; 62N.10; 62N.11; 62N.12; 62N.13; 62N.14; 2.8 62N.15; 62N.17; 62N.18; 62N.24; 62N.38; 62Q.165, 2.9 subdivision 3; 62Q.25; 62Q.29; 62Q.41; 147.01, 2.10 subdivision 6; 295.52, subdivision 1b; and 295.53, 2.11 subdivision 5; Laws 1993, chapter 247, article 4, 2.12 section 8; Laws 1994, chapter 625, article 5, section 2.13 5, as amended; Laws 1995, chapter 96, section 2; and 2.14 Laws 1995, First Special Session chapter 3, article 2.15 13, section 2. 2.16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.17 ARTICLE 1 2.18 MINNESOTACARE PROGRAM/GAMC 2.19 Section 1. Minnesota Statutes 1996, section 256.9353, 2.20 subdivision 1, is amended to read: 2.21 Subdivision 1. [COVERED HEALTH SERVICES.] "Covered health 2.22 services" means the health services reimbursed under chapter 2.23 256B, with the exception of inpatient hospital services, special 2.24 education services, private duty nursing services, adult dental 2.25 care services other than preventive services, orthodontic 2.26 services, nonemergency medical transportation services, personal 2.27 care assistant and case management services, nursing home or 2.28 intermediate care facilities services, inpatient mental health 2.29 services, and chemical dependency services. Effective July 1, 2.30 1998, adult dental care for nonpreventive services with the 2.31 exception of orthodontic services is available to persons who 2.32 qualify under section 256.9354, subdivisions 1 to 5, or 2.33 256.9366, with family gross income equal to or less than 175 2.34 percent of the federal poverty guidelines. Outpatient mental 2.35 health services covered under the MinnesotaCare program are 2.36 limited to diagnostic assessments, psychological testing, 2.37 explanation of findings, medication management by a physician, 2.38 day treatment, partial hospitalization, and individual, family, 2.39 and group psychotherapy. 2.40 No public funds shall be used for coverage of abortion 2.41 under MinnesotaCare except where the life of the female would be 2.42 endangered or substantial and irreversible impairment of a major 2.43 bodily function would result if the fetus were carried to term; 3.1 or where the pregnancy is the result of rape or incest. 3.2 Covered health services shall be expanded as provided in 3.3 this section. 3.4 Sec. 2. Minnesota Statutes 1996, section 256.9353, 3.5 subdivision 3, is amended to read: 3.6 Subd. 3. [INPATIENT HOSPITAL SERVICES.] (a) Beginning July 3.7 1, 1993, covered health services shall include inpatient 3.8 hospital services, including inpatient hospital mental health 3.9 services and inpatient hospital and residential chemical 3.10 dependency treatment, subject to those limitations necessary to 3.11 coordinate the provision of these services with eligibility 3.12 under the medical assistance spenddown. Prior to July 1, 1997, 3.13 the inpatient hospital benefit for adult enrollees is subject to 3.14 an annual benefit limit of $10,000. Effective July 1, 1997, the 3.15 inpatient hospital benefit for adult enrollees who qualify under 3.16 section 256.9354, subdivision 5, is subject to an annual limit 3.17 of $10,000. 3.18 (b) Enrollees who qualify under section 256.9354, 3.19 subdivision 5, and are determined by the commissioner to have a 3.20 basis of eligibility for medical assistance shall apply for and 3.21 cooperate with the requirements of medical assistance by the 3.22 last day of the third month following admission to an inpatient 3.23 hospital. If an enrollee fails to apply for medical assistance 3.24 within this time period, the enrollee and the enrollee's family 3.25 shall be disenrolled from the plan and they may not reenroll 3.26 until 12 calendar months have elapsed. Enrollees and enrollees' 3.27 families disenrolled for not applying for or not cooperating 3.28 with medical assistance may not reenroll. 3.29 (c) Admissions for inpatient hospital services paid for 3.30 under section 256.9362, subdivision 3, must be certified as 3.31 medically necessary in accordance with Minnesota Rules, parts 3.32 9505.0500 to 9505.0540, except as provided in clauses (1) and 3.33 (2): 3.34 (1) all admissions must be certified, except those 3.35 authorized under rules established under section 254A.03, 3.36 subdivision 3, or approved under Medicare; and 4.1 (2) payment under section 256.9362, subdivision 3, shall be 4.2 reduced by five percent for admissions for which certification 4.3 is requested more than 30 days after the day of admission. The 4.4 hospital may not seek payment from the enrollee for the amount 4.5 of the payment reduction under this clause. 4.6 (d) Any enrollee or family member of an enrollee who has 4.7 previously been permanently disenrolled from MinnesotaCare for 4.8 not applying for and cooperating with medical assistance shall 4.9 be eligible to reenroll if 12 calendar months have elapsed since 4.10 the date of disenrollment. 4.11 Sec. 3. Minnesota Statutes 1996, section 256.9353, 4.12 subdivision 7, is amended to read: 4.13 Subd. 7. [COPAYMENTS AND COINSURANCE.] The MinnesotaCare 4.14 benefit plan shall include the following copayments and 4.15 coinsurance requirements: 4.16 (1) ten percent of the paid chargessubmittedfor inpatient 4.17 hospital services for adult enrollees not eligible for medical 4.18 assistance, subject to an annual inpatient out-of-pocket maximum 4.19 of $1,000 per individual and $3,000 per family; 4.20 (2) $3 per prescription for adult enrollees;and4.21 (3) $25 for eyeglasses for adult enrollees; and 4.22 (4) effective July 1, 1998, 50 percent of paid charges for 4.23 adult dental care services other than preventive care services 4.24 for persons eligible under section 256.9354, subdivisions 1 to 4.25 5, or 256.9366 with income equal to or less than 175 percent of 4.26 the federal poverty guidelines. 4.27 Prior to July 1, 1997, enrollees who are not eligible for 4.28 medical assistance with or without a spenddown shall be 4.29 financially responsible for the coinsurance amount and amounts 4.30 which exceed the $10,000 benefit limit.MinnesotaCare shall be4.31financially responsible for the spenddown amount up to the4.32$10,000 benefit limit for enrollees who are eligible for medical4.33assistance with a spenddown; enrollees who are eligible for4.34medical assistance with a spenddown are financially responsible4.35for amounts which exceed the $10,000 benefit limit.Effective 4.36 July 1, 1997, adult enrollees who qualify under section 5.1 256.9354, subdivision 5, and who are not eligible for medical 5.2 assistance with or without a spenddown shall be financially 5.3 responsible for the coinsurance amount and amounts which exceed 5.4 the $10,000 inpatient hospital benefit limit. 5.5 Sec. 4. Minnesota Statutes 1996, section 256.9354, 5.6 subdivision 4, is amended to read: 5.7 Subd. 4. [FAMILIES WITH CHILDREN; ELIGIBILITY BASED ON 5.8 PERCENTAGE OF INCOME PAID FOR HEALTH COVERAGE.] Beginning 5.9 January 1, 1993, "eligible persons" means children, parents, and 5.10 dependent siblings residing in the same householdwho are not5.11eligible for medical assistance without a spenddown under5.12chapter 256B. Children who meet the criteria in subdivision 1 5.13 or 4a shall continue to be enrolled pursuant to those 5.14 subdivisions. Persons who are eligible under this subdivision 5.15 or subdivision 2, 3, or 5 must pay a premium as determined under 5.16 sections 256.9357 and 256.9358, and children eligible under 5.17 subdivision 1 must pay the premium required under section 5.18 256.9356, subdivision 1. Individuals and families whose income 5.19 is greater than the limits established under section 256.9358 5.20 may not enroll in MinnesotaCare. 5.21 Sec. 5. Minnesota Statutes 1996, section 256.9354, 5.22 subdivision 5, is amended to read: 5.23 Subd. 5. [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO 5.24 CHILDREN.] (a) Beginning October 1, 1994, the definition of 5.25 "eligible persons" is expanded to include all individuals and 5.26 households with no children who have gross family incomes that 5.27 are equal to or less than 125 percent of the federal poverty 5.28 guidelines and who are not eligible for medical assistance 5.29 without a spenddown under chapter 256B. 5.30(b) After October 1, 1995, the commissioner of human5.31services may expand the definition of "eligible persons" to5.32include all individuals and households with no children who have5.33gross family incomes that are equal to or less than 135 percent5.34of federal poverty guidelines and are not eligible for medical5.35assistance without a spenddown under chapter 256B. This5.36expansion may occur only if the financial management6.1requirements of section 256.9352, subdivision 3, can be met.6.2(c) The commissioners of health and human services, in6.3consultation with the legislative commission on health care6.4access, shall make preliminary recommendations to the6.5legislature by October 1, 1995, and final recommendations to the6.6legislature by February 1, 1996, on whether a further expansion6.7of the definition of "eligible persons" to include all6.8individuals and households with no children who have gross6.9family incomes that are equal to or less than 150 percent of6.10federal poverty guidelines and are not eligible for medical6.11assistance without a spenddown under chapter 256B would be6.12allowed under the financial management constraints outlined in6.13section 256.9352, subdivision 3.6.14(d)(b) Beginning July 1, 1997, the definition of eligible 6.15 persons is expanded to include all individuals and households 6.16 with no children who have gross family incomes that are equal to 6.17 or less than 175 percent of the federal poverty guidelines and 6.18 who are not eligible for medical assistance without a spenddown 6.19 under chapter 256B. 6.20 (c) All eligible persons under paragraphs (a) and (b) are 6.21 eligible for coverage through the MinnesotaCare program but must 6.22 pay a premium as determined under sections 256.9357 and 6.23 256.9358. Individuals and families whose income is greater than 6.24 the limits established under section 256.9358 may not enroll in 6.25 the MinnesotaCare program. 6.26 Sec. 6. Minnesota Statutes 1996, section 256.9354, 6.27 subdivision 6, is amended to read: 6.28 Subd. 6. [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL 6.29 ASSISTANCE.] Individuals who apply for MinnesotaCare who qualify 6.30 under section 256.9354, subdivision 5, but who are potentially 6.31 eligible for medical assistance without a spenddown shall be 6.32 allowed to enroll in MinnesotaCare for a period of 60 days, so 6.33 long as the applicant meets all other conditions of 6.34 eligibility. The commissioner shall identify and refer such 6.35 individuals to their county social service agency. The enrollee 6.36 must cooperate with the county social service agency in 7.1 determining medical assistance eligibility within the 60-day 7.2 enrollment period. Enrollees who do not apply for and cooperate 7.3 with medical assistance within the 60-day enrollment period, and 7.4 their other family members, shall be disenrolled from the plan 7.5 within one calendar month. Persons disenrolled for 7.6 nonapplication for medical assistance may not reenroll until 7.7 they have obtained a medical assistance eligibility 7.8 determination for the family member or members who were referred 7.9 to the county agency. Persons disenrolled for noncooperation 7.10 with medical assistance may not reenroll until they have 7.11 cooperated with the county agency and have obtained a medical 7.12 assistance eligibility determination. The commissioner shall 7.13 redetermine provider payments made under MinnesotaCare to the 7.14 appropriate medical assistance payments for those enrollees who 7.15 subsequently become eligible for medical assistance. 7.16 Sec. 7. Minnesota Statutes 1996, section 256.9354, 7.17 subdivision 7, is amended to read: 7.18 Subd. 7. [GENERAL ASSISTANCE MEDICAL CARE.] A person 7.19 cannot have coverage under both MinnesotaCare and general 7.20 assistance medical care in the same month, except that a7.21MinnesotaCare enrollee may be eligible for retroactive general7.22assistance medical care according to section 256D.03,7.23subdivision 3, paragraph (b). 7.24 Sec. 8. Minnesota Statutes 1996, section 256.9354, is 7.25 amended by adding a subdivision to read: 7.26 Subd. 8. [MINNESOTACARE OUTREACH.] The commissioner shall 7.27 award grants to public or private organizations to provide 7.28 information on the importance of maintaining insurance coverage 7.29 and on how to obtain coverage through the MinnesotaCare program 7.30 in areas of the state with high uninsured populations. 7.31 Sec. 9. Minnesota Statutes 1996, section 256.9355, 7.32 subdivision 1, is amended to read: 7.33 Subdivision 1. [APPLICATION AND INFORMATION AVAILABILITY.] 7.34 Applications and other information must be made available to 7.35 provider offices, local human services agencies, school 7.36 districts, public and private elementary schools in which 25 8.1 percent or more of the students receive free or reduced price 8.2 lunches, community health offices, and Women, Infants and 8.3 Children (WIC) program sites. These sites may accept 8.4 applications, collect the enrollment fee or initial premium fee,8.5 and forward the formsand feesto the commissioner. Otherwise, 8.6 applicants may apply directly to the commissioner. Beginning 8.7 January 1, 2000, MinnesotaCare enrollment sites will be expanded 8.8 to include local county human services agencies which choose to 8.9 participate. 8.10 Sec. 10. Minnesota Statutes 1996, section 256.9355, 8.11 subdivision 2, is amended to read: 8.12 Subd. 2. [COMMISSIONER'S DUTIES.] The commissioner shall 8.13 use individuals' social security numbers as identifiers for 8.14 purposes of administering the plan and conduct data matches to 8.15 verify income. Applicants shall submit evidence of family 8.16 income, earned and unearned, including the most recent income 8.17 tax return and any form W-2 wage and tax statements, wage slips, 8.18 or other documentation that is necessary to verify income 8.19 eligibility. The commissioner shall perform random audits to 8.20 verify reported income and eligibility. The commissioner may 8.21 execute data sharing arrangements with the department of revenue 8.22 and any other governmental agency in order to perform income 8.23 verification related to eligibility and premium payment under 8.24 the MinnesotaCare program. 8.25 Sec. 11. Minnesota Statutes 1996, section 256.9355, 8.26 subdivision 4, is amended to read: 8.27 Subd. 4. [APPLICATION PROCESSING.] The commissioner of 8.28 human services shall determine an applicant's eligibility for 8.29 MinnesotaCare no more than 30 days from the date that the 8.30 application is received by the department of human services. 8.31This requirement shall be suspended for four months following8.32the dates in which single adults and families without children8.33become eligible for the program.Beginning July 1, 2000, this 8.34 requirement also applies to local county human services agencies 8.35 that determine eligibility for MinnesotaCare. 8.36 Sec. 12. Minnesota Statutes 1996, section 256.9355, is 9.1 amended by adding a subdivision to read: 9.2 Subd. 5. [AVAILABILITY OF PRIVATE INSURANCE.] The 9.3 commissioner, in consultation with the commissioners of health 9.4 and commerce, shall provide information regarding the 9.5 availability of private health insurance coverage to all 9.6 families and individuals enrolled in the MinnesotaCare program 9.7 whose gross family income is equal to or more than 200 percent 9.8 of the federal poverty guidelines. This information must be 9.9 provided upon initial enrollment and annually thereafter. 9.10 Sec. 13. Minnesota Statutes 1996, section 256.9357, 9.11 subdivision 1, is amended to read: 9.12 Subdivision 1. [GENERAL REQUIREMENTS.] Families and 9.13 individuals who enroll on or after October 1, 1992, are eligible 9.14 for subsidized premium payments based on a sliding scale under 9.15 section 256.9358 only if the family or individual meets the 9.16 requirements in subdivisions 2 and 3. Children already enrolled 9.17 in the children's health plan as of September 30, 1992, eligible 9.18 under section 256.9354, subdivision 1, paragraph (a), children 9.19 who enroll in the MinnesotaCare program after September 30, 9.20 1992, pursuant to Laws 1992, chapter 549, article 4, section 17, 9.21 and children who enroll under section 256.9354, subdivision 4a, 9.22 are eligible for subsidized premium payments without meeting 9.23 these requirements, as long as they maintain continuous coverage 9.24 in the MinnesotaCare plan or medical assistance. 9.25 Families and individuals who initially enrolled in 9.26 MinnesotaCare under section 256.9354 or 256.9366, and whose 9.27 income increases above the limits established insection9.28 sections 256.9358 and 256.9366,may continue enrollment and pay9.29the full cost of coverageare no longer eligible for the program 9.30 and shall be disenrolled by the commissioner. MinnesotaCare 9.31 coverage terminates the last day of the calendar month following 9.32 the month in which the department determines that the income of 9.33 a family or individual, determined as required by section 9.34 256.9358, exceeds program income limits. 9.35 Sec. 14. Minnesota Statutes 1996, section 256.9357, 9.36 subdivision 3, is amended to read: 10.1 Subd. 3. [PERIOD UNINSURED.] To be eligible for subsidized 10.2 premium payments based on a sliding scale, families and 10.3 individuals initially enrolled in the MinnesotaCare program 10.4 under section 256.9354, subdivisions 4 and 5, must have had no 10.5 health coverage for at least four months prior to application. 10.6 The commissioner may change this eligibility criterion for 10.7 sliding scale premiums without complying with rulemaking 10.8 requirements in order to remain within the limits of available 10.9 appropriations. The requirement of at least four months of no 10.10 health coverage prior to application for the MinnesotaCare 10.11 program does not apply to: 10.12 (1) families, children, and individuals whowant toapply 10.13 for the MinnesotaCare program upon termination from or as 10.14 required by the medical assistance program, general assistance 10.15 medical care program, or coverage under a regional demonstration 10.16 project for the uninsured funded under section 256B.73, the 10.17 Hennepin county assured care program, or the Group Health, Inc., 10.18 community health plan; 10.19 (2) families and individuals initially enrolled under 10.20 section 256.9354, subdivisions 1, paragraph (a), and 2; 10.21 (3) children enrolled pursuant to Laws 1992, chapter 549, 10.22 article 4, section 17;or10.23 (4) individuals currently serving or who have served in the 10.24 military reserves, and dependents of these individuals, if these 10.25 individuals: (i) reapply for MinnesotaCare coverage after a 10.26 period of active military service during which they had been 10.27 covered by the Civilian Health and Medical Program of the 10.28 Uniformed Services (CHAMPUS); (ii) were covered under 10.29 MinnesotaCare immediately prior to obtaining coverage under 10.30 CHAMPUS; and (iii) have maintained continuous coverage; or 10.31 (5) individuals and families whose only health coverage 10.32 during the four months prior to application was a qualified or 10.33 Medicare supplement plan issued by the Minnesota comprehensive 10.34 health association under chapter 62E. 10.35 Sec. 15. Minnesota Statutes 1996, section 256.9358, 10.36 subdivision 4, is amended to read: 11.1 Subd. 4. [INELIGIBILITY.] Families with children whose 11.2 gross monthly income is above the amount specified in 11.3 subdivision 3 are not eligible for the plan.Beginning October11.41, 1994,An individual or households with no children whose 11.5 gross income is greater than125 percent of the federal poverty11.6guidelinesthe amount specified in section 256.9354, subdivision 11.7 5, are ineligible for the plan. 11.8 Sec. 16. Minnesota Statutes 1996, section 256.9359, 11.9 subdivision 2, is amended to read: 11.10 Subd. 2. [RESIDENCY REQUIREMENT.] (a) Prior to July 1, 11.11 1997, to be eligible for health coverage under the MinnesotaCare 11.12 program, families and individuals must be permanent residents of 11.13 Minnesota. 11.14 (b) Effective July 1, 1997, to be eligible for health 11.15 coverage under the MinnesotaCare program, adults without 11.16 children must be permanent residents of Minnesota. 11.17 (c) Effective July 1, 1997, to be eligible for health 11.18 coverage under the MinnesotaCare program, pregnant women, 11.19 families, and children must meet the residency requirements as 11.20 provided by Code of Federal Regulations, title 42, section 11.21 435.403, except that the provisions of section 256B.056, 11.22 subdivision 1, shall apply upon receipt of federal approval. 11.23 Sec. 17. Minnesota Statutes 1996, section 256.9362, 11.24 subdivision 6, is amended to read: 11.25 Subd. 6. [ENROLLEES 18 OR OLDER.] Payment by the 11.26 MinnesotaCare program for inpatient hospital services provided 11.27 to MinnesotaCare enrollees eligible under section 256.9354, 11.28 subdivision 5, who are 18 years old or older on the date of 11.29 admission to the inpatient hospital must be in accordance with 11.30 paragraphs (a) and (b). For inpatient hospital services 11.31 provided to MinnesotaCare enrollees eligible under section 11.32 256.9366, who are 18 years old or older on the date of admission 11.33 to the inpatient hospital, and who are not pregnant, payment 11.34 must be in accordance with paragraph (c). 11.35 (a) If the medical assistance rate minus any copayment 11.36 required under section 256.9353, subdivision 6, is less than or 12.1 equal to the amount remaining in the enrollee's benefit limit 12.2 under section 256.9353, subdivision 3, payment must be the 12.3 medical assistance rate minus any copayment required under 12.4 section 256.9353, subdivision 6. The hospital must not seek 12.5 payment from the enrollee in addition to the copayment. The 12.6 MinnesotaCare payment plus the copayment must be treated as 12.7 payment in full. 12.8 (b) If the medical assistance rate minus any copayment 12.9 required under section 256.9353, subdivision 6, is greater than 12.10 the amount remaining in the enrollee's benefit limit under 12.11 section 256.9353, subdivision 3, payment must be the lesser of: 12.12 (1) the amount remaining in the enrollee's benefit limit; 12.13 or 12.14 (2) charges submitted for the inpatient hospital services 12.15 less any copayment established under section 256.9353, 12.16 subdivision 6. 12.17 The hospital may seek payment from the enrollee for the 12.18 amount by which usual and customary charges exceed the payment 12.19 under this paragraph. If payment is reduced under section 12.20 256.9353, subdivision 3, paragraph (c), the hospital may not 12.21 seek payment from the enrollee for the amount of the reduction. 12.22 (c) For admissions occurring during the period of July 1, 12.23 1997, through June 30, 1998, for adults eligible under section 12.24 256.9366 who are not pregnant, the commissioner shall pay 12.25 hospitals directly, up to the medical assistance payment rate, 12.26 for inpatient hospital benefits in excess of the $10,000 annual 12.27 inpatient benefit limit. 12.28 Sec. 18. Minnesota Statutes 1996, section 256.9363, 12.29 subdivision 5, is amended to read: 12.30 Subd. 5. [ELIGIBILITY FOR OTHER STATE PROGRAMS.] 12.31 MinnesotaCare enrollees who become eligible for medical 12.32 assistance or general assistance medical care will remain in the 12.33 same managed care plan if the managed care plan has a contract 12.34 for that population. Effective January 1, 1998, MinnesotaCare 12.35 enrollees who were formerly eligible for general assistance 12.36 medical care pursuant to section 256D.03, subdivision 3, within 13.1 six months of MinnesotaCare enrollment and were enrolled in a 13.2 prepaid health plan pursuant to section 256D.03, subdivision 4, 13.3 paragraph (d), must remain in the same managed care plan if the 13.4 managed care plan has a contract for that population. Contracts 13.5 between the department of human services and managed care plans 13.6 must include MinnesotaCare, and medical assistance and may, at 13.7 the option of the commissioner of human services, also include 13.8 general assistance medical care. 13.9 Sec. 19. [256.937] [ASSET REQUIREMENT FOR MINNESOTACARE.] 13.10 Subdivision 1. [DEFINITIONS.] For purposes of this 13.11 section, the following definitions apply. 13.12 (a) "Asset" means cash and other personal property, as well 13.13 as any real property, that a family or individual owns which has 13.14 monetary value. 13.15 (b) "Homestead" means the home that is owned by, and is the 13.16 usual residence of, the family or individual, together with the 13.17 surrounding property which is not separated from the home by 13.18 intervening property owned by others. Public rights-of-way, 13.19 such as roads that run through the surrounding property and 13.20 separate it from the home, will not affect the exemption of the 13.21 property. "Usual residence" includes the home from which the 13.22 family or individual is temporarily absent due to illness, 13.23 employment, or education, or because the home is temporarily not 13.24 habitable due to casualty or natural disaster. 13.25 (c) "Net asset" means the asset's fair market value minus 13.26 any encumbrances including, but not limited to, liens and 13.27 mortgages. 13.28 Subd. 2. [LIMIT ON TOTAL ASSETS.] (a) Effective April 1, 13.29 1997, or upon federal approval, whichever is later, in order to 13.30 be eligible for the MinnesotaCare program, a household of two or 13.31 more persons must not own more than $30,000 in total net assets, 13.32 and a household of one person must not own more than $15,000 in 13.33 total net assets. 13.34 (b) For purposes of this subdivision, total net assets 13.35 include all assets, with the following exceptions: 13.36 (1) a homestead is not considered; 14.1 (2) household goods and personal effects are not 14.2 considered; and 14.3 (3) capital and operating assets of a trade or business up 14.4 to $200,000 in net assets are not considered. 14.5 (c) If an asset excluded under paragraph (b) has a negative 14.6 value, the negative value shall be subtracted from the total net 14.7 assets under paragraph (a). 14.8 Subd. 3. [DOCUMENTATION.] (a) The commissioner of human 14.9 services shall require individuals and families, at the time of 14.10 application or renewal, to indicate on a checkoff form developed 14.11 by the commissioner whether they satisfy the MinnesotaCare asset 14.12 requirement. This form must include the following or similar 14.13 language: "To be eligible for MinnesotaCare, individuals and 14.14 families must not own net assets in excess of $30,000 for a 14.15 household of two or more persons or $15,000 for a household of 14.16 one person, not including a homestead, household goods and 14.17 personal effects, and capital and operating assets of a trade or 14.18 business up to $200,000. Do you and your household own net 14.19 assets in excess of these limits?" 14.20 (b) The commissioner may require individuals and families 14.21 to provide any information the commissioner determines necessary 14.22 to verify compliance with the asset requirement, if the 14.23 commissioner determines that there is reason to believe that an 14.24 individual or family has assets that exceed the program limit. 14.25 Subd. 4. [PENALTIES.] Individuals or families who are 14.26 found to have knowingly misreported the amount of their assets 14.27 as described in this section shall be subject to the penalties 14.28 in section 256.98. The commissioner shall present 14.29 recommendations on additional penalties to the 1998 legislature. 14.30 Sec. 20. [256.9371] [PENALTIES.] 14.31 Whoever obtains or attempts to obtain, or aids or abets any 14.32 person to obtain by means of a willfully false statement or 14.33 representation, or by the intentional withholding or concealment 14.34 of a material fact, or by impersonation, or other fraudulent 14.35 device: 14.36 (1) benefits under the MinnesotaCare program to which the 15.1 person is not entitled; or 15.2 (2) benefits under the MinnesotaCare program greater than 15.3 that to which the person is reasonably entitled; 15.4 shall be considered to have violated section 256.98, and shall 15.5 be subject to both the criminal and civil penalties provided 15.6 under that section. 15.7 Sec. 21. Minnesota Statutes 1996, section 256D.03, 15.8 subdivision 3, is amended to read: 15.9 Subd. 3. [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 15.10 (a) General assistance medical care may be paid for any person 15.11 who is not eligible for medical assistance under chapter 256B, 15.12 including eligibility for medical assistance based on a 15.13 spenddown of excess income according to section 256B.056, 15.14 subdivision 5, or MinnesotaCare as defined in clause (4), except 15.15 as provided in paragraph (b); and: 15.16 (1) who is receiving assistance under section 256D.05,or15.17 except for families with children who are eligible under 15.18 Minnesota family investment program-statewide (MFIP-S), who is 15.19 having a payment made on the person's behalf under sections 15.20 256I.01 to 256I.06, or who resides in group residential housing 15.21 as defined in chapter 256I and can meet a spenddown using the 15.22 cost of remedial services received through group residential 15.23 housing; or 15.24 (2)(i) who is a resident of Minnesota; and whose equity in 15.25 assets is not in excess of $1,000 per assistance unit. No asset 15.26 test shall be applied to children and their parents living in 15.27 the same household. Exempt assets, the reduction of excess 15.28 assets, and the waiver of excess assets must conform to the 15.29 medical assistance program in chapter 256B, with the following 15.30 exception: the maximum amount of undistributed funds in a trust 15.31 that could be distributed to or on behalf of the beneficiary by 15.32 the trustee, assuming the full exercise of the trustee's 15.33 discretion under the terms of the trust, must be applied toward 15.34 the asset maximum; and 15.35 (ii) who has countable income not in excess of the 15.36 assistance standards established in section 256B.056, 16.1 subdivision 4, or whose excess income is spent down pursuant to 16.2 section 256B.056, subdivision 5, using a six-month budget 16.3 period, except that a one-month budget period must be used for16.4recipients residing in a long-term care facility. The method 16.5 for calculating earned income disregards and deductions for a 16.6 person who resides with a dependent child under age 21 shallbe16.7as specified in section 256.74, subdivision 1follow section 16.8 256B.056, subdivision 1a. However, if a disregard of $30 and 16.9 one-third of the remainderdescribed in section 256.74,16.10subdivision 1, clause (4),has been applied to the wage earner's 16.11 income, the disregard shall not be applied again until the wage 16.12 earner's income has not been considered in an eligibility 16.13 determination for general assistance, general assistance medical 16.14 care, medical assistance, oraid to families with dependent16.15childrenMFIP-S for 12 consecutive months. The earned income 16.16 and work expense deductions for a person who does not reside 16.17 with a dependent child under age 21 shall be the same as the 16.18 method used to determine eligibility for a person under section 16.19 256D.06, subdivision 1, except the disregard of the first $50 of 16.20 earned income is not allowed; or 16.21 (3) who would be eligible for medical assistance except 16.22 that the person resides in a facility that is determined by the 16.23 commissioner or the federal health care financing administration 16.24 to be an institution for mental diseases. 16.25 (4) Beginning July 1, 1998, applicants or recipients who 16.26 meet all eligibility requirements of MinnesotaCare as defined in 16.27 sections 256.9351 to 256.9363 and 256.9366 to 256.9369, and are: 16.28 (i) adults with dependent children under 21 whose gross 16.29 family income is equal to or less than 275 percent of the 16.30 federal poverty guidelines; or 16.31 (ii) adults without children with earned income and whose 16.32 family gross income is between 75 percent of the federal poverty 16.33 guidelines and the amount set by section 256.9354, subdivision 16.34 5, shall be terminated from general assistance medical care upon 16.35 enrollment in MinnesotaCare. 16.36 (b)Eligibility is available for the month of application,17.1and for three months prior to application if the person was17.2eligible in those prior months.For services rendered on or 17.3 after July 1, 1997, eligibility is limited to one month prior to 17.4 application if the person is determined eligible in the prior 17.5 month. A redetermination of eligibility must occur every 12 17.6 months. Beginning July 1, 1998, Minnesota health care program 17.7 applications completed by recipients and applicants who are 17.8 persons described in paragraph (a), clause (4), may be returned 17.9 to the county agency to be forwarded to the department of human 17.10 services or sent directly to the department of human services 17.11 for enrollment in MinnesotaCare. If all other eligibility 17.12 requirements of this subdivision are met, eligibility for 17.13 general assistance medical care shall be available in any month 17.14 during which a MinnesotaCare eligibility determination and 17.15 enrollment are pending. Upon notification of eligibility for 17.16 MinnesotaCare, notice of termination for eligibility for general 17.17 assistance medical care shall be sent to an applicant or 17.18 recipient. If all other eligibility requirements of this 17.19 subdivision are met, eligibility for general assistance medical 17.20 care shall be available until enrollment in MinnesotaCare 17.21 subject to the provisions of paragraph (d). 17.22 (c) The date of an initial Minnesota health care program 17.23 application necessary to begin a determination of eligibility 17.24 shall be the date the applicant has provided a name, address, 17.25 and social security number, signed and dated, to the county 17.26 agency or the department of human services. If the applicant is 17.27 unable to provide an initial application when health care is 17.28 delivered due to a medical condition or disability, a health 17.29 care provider may act on the person's behalf to complete the 17.30 initial application. The applicant must complete the remainder 17.31 of the application and provide necessary verification before 17.32 eligibility can be determined. The county agency must assist 17.33 the applicant in obtaining verification if necessary. 17.34 (d) County agencies are authorized to use all automated 17.35 databases containing information regarding recipients' or 17.36 applicants' income in order to determine eligibility for general 18.1 assistance medical care or MinnesotaCare. Such use shall be 18.2 considered sufficient in order to determine eligibility and 18.3 premium payments by the county agency. 18.4(c)(e) General assistance medical care is not available 18.5 for a person in a correctional facility unless the person is 18.6 detained by law for less than one year in a county correctional 18.7 or detention facility as a person accused or convicted of a 18.8 crime, or admitted as an inpatient to a hospital on a criminal 18.9 hold order, and the person is a recipient of general assistance 18.10 medical care at the time the person is detained by law or 18.11 admitted on a criminal hold order and as long as the person 18.12 continues to meet other eligibility requirements of this 18.13 subdivision. 18.14(d)(f) General assistance medical care is not available 18.15 for applicants or recipients who do not cooperate with the 18.16 county agency to meet the requirements of medical 18.17 assistance. General assistance medical care is limited to 18.18 payment of emergency services only for applicants or recipients 18.19 as described in paragraph (a), clause (4), whose MinnesotaCare 18.20 coverage is denied or terminated for nonpayment of premiums as 18.21 required by sections 256.9356 to 256.9358. 18.22(e)(g) In determining the amount of assets of an 18.23 individual, there shall be included any asset or interest in an 18.24 asset, including an asset excluded under paragraph (a), that was 18.25 given away, sold, or disposed of for less than fair market value 18.26 within the 60 months preceding application for general 18.27 assistance medical care or during the period of eligibility. 18.28 Any transfer described in this paragraph shall be presumed to 18.29 have been for the purpose of establishing eligibility for 18.30 general assistance medical care, unless the individual furnishes 18.31 convincing evidence to establish that the transaction was 18.32 exclusively for another purpose. For purposes of this 18.33 paragraph, the value of the asset or interest shall be the fair 18.34 market value at the time it was given away, sold, or disposed 18.35 of, less the amount of compensation received. For any 18.36 uncompensated transfer, the number of months of ineligibility, 19.1 including partial months, shall be calculated by dividing the 19.2 uncompensated transfer amount by the average monthly per person 19.3 payment made by the medical assistance program to skilled 19.4 nursing facilities for the previous calendar year. The 19.5 individual shall remain ineligible until this fixed period has 19.6 expired. The period of ineligibility may exceed 30 months, and 19.7 a reapplication for benefits after 30 months from the date of 19.8 the transfer shall not result in eligibility unless and until 19.9 the period of ineligibility has expired. The period of 19.10 ineligibility begins in the month the transfer was reported to 19.11 the county agency, or if the transfer was not reported, the 19.12 month in which the county agency discovered the transfer, 19.13 whichever comes first. For applicants, the period of 19.14 ineligibility begins on the date of the first approved 19.15 application. 19.16(f)(1)(h) Beginning October 1, 1993, an undocumented alien 19.17 or a nonimmigrant is ineligible for general assistance medical 19.18 care other than emergency services. For purposes of this 19.19 subdivision, a nonimmigrant is an individual in one or more of 19.20 the classes listed in United States Code, title 8, section 19.21 1101(a)(15), and an undocumented alien is an individual who 19.22 resides in the United States without the approval or 19.23 acquiescence of the Immigration and Naturalization Service. 19.24(2)(i) This subdivision does not apply to a child under 19.25 age 18, to a Cuban or Haitian entrant as defined in Public Law 19.26 Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 19.27 is aged, blind, or disabled as defined in United States Code, 19.28 title 42, section 1382c(a)(1). 19.29(3)(j) For purposes ofparagraphparagraphs (f) and (h), 19.30 "emergency services" has the meaning given in Code of Federal 19.31 Regulations, title 42, section 440.255(b)(1), except that it 19.32 also means services rendered because of suspected or actual 19.33 pesticide poisoning. 19.34 Sec. 22. [TRANSITION PLAN FOR MINNESOTACARE ENROLLEES.] 19.35 (a) The commissioner of human services, in consultation 19.36 with the legislative commission on health care access and the 20.1 commissioners of employee relations, health, and commerce, shall 20.2 develop an implementation plan to transition higher-income 20.3 MinnesotaCare enrollees to private sector or other nonsubsidized 20.4 coverage. In developing the plan, the commissioner shall 20.5 examine the feasibility of using the health insurance program 20.6 for state employees administered by the commissioner of employee 20.7 relations as a source of coverage, and shall also examine 20.8 methods to increase the affordability of private sector coverage 20.9 for individuals and families transitioning off MinnesotaCare. 20.10 The commissioner shall submit the implementation plan to the 20.11 legislature by December 15, 1997. 20.12 (b) The commissioner of human services shall also report to 20.13 the legislature by January 15, 1998, on the impact of the 20.14 outreach efforts conducted by the department of human services 20.15 for the MinnesotaCare program, affordability of the 20.16 MinnesotaCare premium schedule, and the reasons why families and 20.17 individuals are leaving the MinnesotaCare program; regarding 20.18 recommendations on the eligibility income level that will result 20.19 in the greatest number of individuals having health insurance; 20.20 what will encourage greater availability of coverage in the 20.21 private market; steps to increase the availability of insurance 20.22 in the small employer market; the need, if any, for increasing 20.23 the MinnesotaCare program eligibility level for single adults 20.24 and households without children; and shall make recommendations 20.25 on the feasibility of increasing the eligibility income level 20.26 for single adults and households without children in the 20.27 MinnesotaCare program. 20.28 Sec. 23. [EFFECTIVE DATE.] 20.29 Section 4 is effective July 1, 1998. Section 14, 20.30 subdivision 3, clause (5), is effective the day following final 20.31 enactment. 20.32 ARTICLE 2 20.33 MISCELLANEOUS CHANGES TO HEALTH CARE REFORM 20.34 Section 1. Minnesota Statutes 1996, section 60A.951, 20.35 subdivision 5, is amended to read: 20.36 Subd. 5. [INSURER.] "Insurer" means insurance company, 21.1 risk retention group as defined in section 60E.02, service plan 21.2 corporation as defined in section 62C.02, health maintenance 21.3 organization as defined in section 62D.02, community integrated 21.4 service network as defined in section 62N.02, fraternal benefit 21.5 society regulated under chapter 64B, township mutual company 21.6 regulated under chapter 67A, joint self-insurance plan or 21.7 multiple employer trust regulated under chapter 60F, 62H, or 21.8 section 471.617, subdivision 2, persons administering a 21.9 self-insurance plan as defined in section 60A.23, subdivision 8, 21.10 clause (2), paragraphs (a) and (d), and the workers' 21.11 compensation reinsurance association established in section 21.12 79.34. 21.13 Sec. 2. Minnesota Statutes 1996, section 62A.021, is 21.14 amended by adding a subdivision to read: 21.15 Subd. 3. [LOSS RATIO DISCLOSURE.] Each health care policy 21.16 form or health care certificate form for which subdivision 1 21.17 requires the commissioner's approval of premium rates shall 21.18 contain on its front page the following statement: 21.19 "Minnesota law requires that this policy or contract 21.20 include this paragraph disclosing the loss ratio. The loss 21.21 ratio is the average percentage of premiums that is expected to 21.22 be paid for health care for the enrollee. This policy or 21.23 contract is expected to have a loss ratio of (fill in estimated 21.24 loss ratio accepted by commissioner). The lowest loss ratio 21.25 permitted by state law for this policy or contract is (fill in 21.26 applicable minimum loss ratio)." 21.27 Sec. 3. Minnesota Statutes 1996, section 62A.61, is 21.28 amended to read: 21.29 62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO 21.30 DETERMINE USUAL AND CUSTOMARY FEES.] 21.31 (a) A health carrier that bases reimbursement to health 21.32 care providers upon a usual and customary fee must maintain in 21.33 its office a copy of a description of the methodology used to 21.34 calculate fees including at least the following: 21.35 (1) the frequency of the determination of usual and 21.36 customary fees; 22.1 (2) a general description of the methodology used to 22.2 determine usual and customary fees; and 22.3 (3) the percentile of usual and customary fees that 22.4 determines the maximum allowable reimbursement. 22.5 (b) A health carrier must provide a copy of the information 22.6 described in paragraph (a) tothe Minnesota health care22.7commission,the commissioner of health,or the commissioner of 22.8 commerce, upon request. 22.9 (c) The commissioner of health or the commissioner of 22.10 commerce, as appropriate, may use to enforce this section any 22.11 enforcement powers otherwise available to the commissioner with 22.12 respect to the health carrier.The appropriate commissioner22.13shall enforce compliance with a request made under this section22.14by the Minnesota health care commission, at the request of the22.15commissioner.The commissioner of health or commerce, as 22.16 appropriate, may require health carriers to provide the 22.17 information required under this section and may use any powers 22.18 granted under other laws relating to the regulation of health 22.19 carriers to enforce compliance. 22.20 (d) For purposes of this section, "health carrier" has the 22.21 meaning given in section 62A.011. 22.22 Sec. 4. Minnesota Statutes 1996, section 62A.65, 22.23 subdivision 3, is amended to read: 22.24 Subd. 3. [PREMIUM RATE RESTRICTIONS.] No individual health 22.25 plan may be offered, sold, issued, or renewed to a Minnesota 22.26 resident unless the premium rate charged is determined in 22.27 accordance with the following requirements: 22.28 (a) Premium rates must be no more than 25 percent above and 22.29 no more than 25 percent below the index rate charged to 22.30 individuals for the same or similar coverage, adjusted pro rata 22.31 for rating periods of less than one year. The premium 22.32 variations permitted by this paragraph must be based only upon 22.33 health status, claims experience, and occupation. For purposes 22.34 of this paragraph, health status includes refraining from 22.35 tobacco use or other actuarially valid lifestyle factors 22.36 associated with good health, provided that the lifestyle factor 23.1 and its effect upon premium rates have been determined by the 23.2 commissioner to be actuarially valid and have been approved by 23.3 the commissioner. Variations permitted under this paragraph 23.4 must not be based upon age or applied differently at different 23.5 ages. This paragraph does not prohibit use of a constant 23.6 percentage adjustment for factors permitted to be used under 23.7 this paragraph. 23.8 (b) Premium rates may vary based upon the ages of covered 23.9 persons only as provided in this paragraph. In addition to the 23.10 variation permitted under paragraph (a), each health carrier may 23.11 use an additional premium variation based upon age of up to plus 23.12 or minus 50 percent of the index rate. 23.13 (c) A health carrier may request approval by the 23.14 commissioner to establish no more than three geographic regions 23.15 and to establish separate index rates for each region, provided 23.16 that the index rates do not vary between any two regions by more 23.17 than 20 percent. Health carriers that do not do business in the 23.18 Minneapolis/St. Paul metropolitan area may request approval for 23.19 no more than two geographic regions, and clauses (2) and (3) do 23.20 not apply to approval of requests made by those health 23.21 carriers. The commissioner may grant approval if the following 23.22 conditions are met: 23.23 (1) the geographic regions must be applied uniformly by the 23.24 health carrier; 23.25 (2) one geographic region must be based on the 23.26 Minneapolis/St. Paul metropolitan area; 23.27 (3) for each geographic region that is rural, the index 23.28 rate for that region must not exceed the index rate for the 23.29 Minneapolis/St. Paul metropolitan area; and 23.30 (4) the health carrier provides actuarial justification 23.31 acceptable to the commissioner for the proposed geographic 23.32 variations in index rates, establishing that the variations are 23.33 based upon differences in the cost to the health carrier of 23.34 providing coverage. 23.35 (d) Health carriers may use rate cells and must file with 23.36 the commissioner the rate cells they use. Rate cells must be 24.1 based upon the number of adults or children covered under the 24.2 policy and may reflect the availability of Medicare coverage. 24.3 The rates for different rate cells must not in any way reflect 24.4 generalized differences in expected costs between principal 24.5 insureds and their spouses. 24.6 (e) In developing its index rates and premiums for a health 24.7 plan, a health carrier shall take into account only the 24.8 following factors: 24.9 (1) actuarially valid differences in rating factors 24.10 permitted under paragraphs (a) and (b); and 24.11 (2) actuarially valid geographic variations if approved by 24.12 the commissioner as provided in paragraph (c). 24.13 (f) All premium variations must be justified in initial 24.14 rate filings and upon request of the commissioner in rate 24.15 revision filings. All rate variations are subject to approval 24.16 by the commissioner. 24.17 (g) The loss ratio must comply with the section 62A.021 24.18 requirements for individual health plans. 24.19 (h) The rates must not be approved, unless the commissioner 24.20 has determined that the rates are reasonable. In determining 24.21 reasonableness, the commissioner shall consider thegrowth rates24.22appliedcost containment goals established under section 62J.04, 24.23 subdivision 1, paragraph (b), to the calendar year or years that 24.24 the proposed premium rate would be in effect, actuarially valid 24.25 changes in risks associated with the enrollee populations, and 24.26 actuarially valid changes as a result of statutory changes in 24.27 Laws 1992, chapter 549. 24.28 Sec. 5. Minnesota Statutes 1996, section 62D.02, 24.29 subdivision 5, is amended to read: 24.30 Subd. 5. "Evidence of coverage" means any certificate, 24.31 agreement or contract, and amendments thereto, issued to an 24.32 enrollee which sets out the coverage to which the enrollee is 24.33 entitled under the health maintenance contract which covers the 24.34 enrollee. 24.35 Sec. 6. Minnesota Statutes 1996, section 62D.09, 24.36 subdivision 3, is amended to read: 25.1 Subd. 3. Every health maintenance organization or its 25.2 representative shall annually, before June 1, provide to its 25.3 enrollees the following: (1) a summary of its most recent 25.4 annual financial statement including a balance sheet and 25.5 statement of receipts and disbursements; (2) a description of 25.6 the health maintenance organization, its health care plan or 25.7 plans, its facilities and personnel, any material changes 25.8 therein since the last report; (3) the current evidence of 25.9 coverage, orcontractamendments thereto; and (4) a statement of 25.10 consumer information and rights as described in section 62D.07, 25.11 subdivision 3, paragraph (c). Under clause (3), a health 25.12 maintenance organization may annually alternate between 25.13 providing enrollees with amendments and providing current 25.14 evidence of coverage. 25.15 Sec. 7. Minnesota Statutes 1996, section 62J.017, is 25.16 amended to read: 25.17 62J.017 [IMPLEMENTATION TIMETABLE.] 25.18 The state seeks to complete the restructuring of the health 25.19 care delivery and financing system. Beginning July 1, 1994, 25.20 measures will be taken to increase the public accountability of 25.21 existing health plan companies, to promote the development of 25.22 small, community-based integrated service networks, and to 25.23 reduce administrative costs by standardizing third-party billing 25.24 forms and procedures and utilization review requirements. 25.25Voluntary formation of other integrated service networks will25.26begin after rules have been adopted, but not before July 1,25.271996. Statutes and rules for the restructured health care25.28financing and delivery system must be enacted or adopted by25.29January 1, 1996.25.30 Sec. 8. Minnesota Statutes 1996, section 62J.04, 25.31 subdivision 1, is amended to read: 25.32 Subdivision 1. [LIMITS ON THE RATE OF GROWTHCOST 25.33 CONTAINMENT GOALS.] (a) The commissioner of health shall set 25.34 annuallimits on the rate of growth ofcost containment goals 25.35 for public and private spending on health care services for 25.36 Minnesota residents, as provided in paragraph (b). Thelimits26.1on growthcost containment goals must be set at levels the 26.2 commissioner determines to be realistic and achievable but that 26.3 will reduce the rate of growth in health care spending by at 26.4 least ten percent per year for the next five years. The 26.5 commissioner shall setlimits on growthcost containment goals 26.6 based on available data on spending and growth trends, including 26.7 data from group purchasers, national data on public and private 26.8 sector health care spending and cost trends, and trend 26.9 information from other states. 26.10 (b) The commissioner shall set the following annuallimits26.11on the rate of growth ofcost containment goals for public and 26.12 private spending on health care services for Minnesota residents: 26.13 (1) for calendar year 1994, therate of growthcost 26.14 containment goal must not exceed the change in the regional 26.15 consumer price index for urban consumers for calendar year 1993 26.16 plus 6.5 percentage points; 26.17 (2) for calendar year 1995, therate of growthcost 26.18 containment goal must not exceed the change in the regional 26.19 consumer price index for urban consumers for calendar year 1994 26.20 plus 5.3 percentage points; 26.21 (3) for calendar year 1996, therate of growthcost 26.22 containment goal must not exceed the change in the regional 26.23 consumer price index for urban consumers for calendar year 1995 26.24 plus 4.3 percentage points; 26.25 (4) for calendar year 1997, therate of growthcost 26.26 containment goal must not exceed the change in the regional 26.27 consumer price index for urban consumers for calendar year 1996 26.28 plus 3.4 percentage points;and26.29 (5) for calendar year 1998, therate of growthcost 26.30 containment goal must not exceed the change in the regional 26.31 consumer price index for urban consumers for calendar year 1997 26.32 plus 2.6 percentage points; and 26.33 (6) for calendar years after 1998, the commissioner shall 26.34 set annual cost containment goals based on available data on 26.35 spending and growth trends, including data from group 26.36 purchasers, national data on public and private sector health 27.1 care spending and cost trends, and trend information from other 27.2 states. 27.3The commissioner shall adjust the growth limit set for27.4calendar year 1995 to recover savings in health care spending27.5required for the period July 1, 1993 to December 31, 1993.27.6 (c) The commissioner shall publish: 27.7 (1) the projectedlimitscost containment goal in the State 27.8 Register by April 15 of the year immediately preceding the year 27.9 in which thelimitcost containment goal will be effective 27.10 except for the year 1993, in which thelimitcost containment 27.11 goal shall be published by July 1, 1993; 27.12 (2) the quarterly change in the regional consumer price 27.13 index for urban consumers; and 27.14 (3) the health care financing administration forecast for 27.15 total growth in the national health care expenditures. In 27.16 settingan annual limitthe cost containment goals, the 27.17 commissioner is exempt from the rulemaking requirements of 27.18 chapter 14. The commissioner's decision onan annual limitthe 27.19 cost containment goals is not appealable. 27.20 Sec. 9. Minnesota Statutes 1996, section 62J.04, 27.21 subdivision 1a, is amended to read: 27.22 Subd. 1a. [ADJUSTED GROWTH LIMITS AND ENFORCEMENTCOST 27.23 CONTAINMENT GOALS.](a)The commissioner shall publish the final 27.24 adjustedgrowth limitcost containment goal in the State 27.25 Register by January 31 of the year that theexpenditure limit27.26 cost containment goal is to be in effect. The adjustedlimit27.27 cost containment goal must reflect the actual regional consumer 27.28 price index for urban consumers for the previous calendar year, 27.29 and may deviate from the previously published projectedgrowth27.30limitscost containment goal to reflect differences between the 27.31 actual regional consumer price index for urban consumers and the 27.32 projected Consumer Price Index for urban consumers. The 27.33 commissioner shall report to the legislature by February 15 of 27.34 each year on the implementation of thegrowth limitscost 27.35 containment goal. This annual report shall describe the 27.36 differences between the projected increase in health care 28.1 expenditures, the actual expenditures based on data collected, 28.2 and the impact and validity ofgrowth limitscost containment 28.3 goals within the overall health care reform strategy. 28.4(b) The commissioner, in consultation with the Minnesota28.5health care commission, shall research and include in the annual28.6report required in paragraph (a) for 1996, recommendations28.7regarding the implementation of growth limits for health plan28.8companies and providers. The commissioner shall:28.9(1) consider both spending and revenue approaches and28.10report on the implementation of the interim limits as defined in28.11sections 62J.041 and 62J.042;28.12(2) make recommendations regarding the enforcement28.13mechanism and consider mechanisms to adjust future growth limits28.14as well as mechanisms to establish financial penalties for28.15noncompliance;28.16(3) address the feasibility of systemwide limits imposed on28.17all integrated service networks; and28.18(4) make recommendations on the most effective way to28.19implement growth limits on the fee-for-service system in the28.20absence of a regulated all-payer system.28.21(c) The commissioner shall enforce limits on growth in28.22spending for health plan companies and revenues for providers.28.23If the commissioner determines that artificial inflation or28.24padding of costs or prices has occurred in anticipation of the28.25implementation of growth limits, the commissioner may adjust the28.26base year spending totals or growth limits or take other action28.27to reverse the effect of the artificial inflation or padding.28.28(d) The commissioner shall impose and enforce overall28.29limits on growth in spending for health plan companies, with28.30adjustments for changes in enrollment, benefits, severity, and28.31risks. If a health plan company exceeds the growth limits, the28.32commissioner may impose financial penalties up to the amount28.33exceeding the applicable growth limit.28.34 Sec. 10. Minnesota Statutes 1996, section 62J.04, 28.35 subdivision 9, is amended to read: 28.36 Subd. 9. [GROWTH LIMITSCOST CONTAINMENT GOALS; FEDERAL 29.1 PROGRAMS.] The commissioners of health and human services shall 29.2 establish a rate methodology for Medicare and Medicaid 29.3 risk-based contracting with health plan companies that is 29.4 consistent with statewidegrowth limitscost containment goals. 29.5 The methodology shall be presented for review bythe Minnesota29.6health care commission andthe legislative commission on health 29.7 care access prior to the submission of a waiver request to the 29.8 health care financing administration and subsequent 29.9 implementation of the methodology. 29.10 Sec. 11. Minnesota Statutes 1996, section 62J.041, is 29.11 amended to read: 29.12 62J.041 [INTERIM HEALTH PLAN COMPANY EXPENDITURE LIMITS.] 29.13 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 29.14 section, the following definitions apply. 29.15 (b) "Health plan company" has the definition provided in 29.16 section 62Q.01. 29.17 (c) "Total expenditures" means incurred claims or 29.18 expenditures on health care services, administrative expenses, 29.19 charitable contributions, and all other payments made by health 29.20 plan companies out of premium revenues. 29.21 (d) "Net expenditures" means total expenditures minus 29.22 exempted taxes and assessments and payments or allocations made 29.23 to establish or maintain reserves. 29.24 (e) "Exempted taxes and assessments" means direct payments 29.25 for taxes to government agencies, contributions to the Minnesota 29.26 comprehensive health association, the medical assistance 29.27 provider's surcharge under section 256.9657, the MinnesotaCare 29.28 provider tax under section 295.52, assessments by the health 29.29 coverage reinsurance association, assessments by the Minnesota 29.30 life and health insurance guaranty association, assessments by 29.31 the Minnesota risk adjustment association, and any new 29.32 assessments imposed by federal or state law. 29.33 (f) "Consumer cost-sharing or subscriber liability" means 29.34 enrollee coinsurance, copayment, deductible payments, and 29.35 amounts in excess of benefit plan maximums. 29.36 Subd. 2. [ESTABLISHMENT.] The commissioner of health shall 30.1 establishlimits oncost containment goals for the increase in 30.2 net expenditures by each health carrier plan company for 30.3 calendar years 1994, 1995, 1996, and 1997. Thelimitscost 30.4 containment goals must be the same as the annualrate of growth30.5incost containment goals for health care spending established 30.6 under section 62J.04, subdivision 1, paragraph (b). Health plan 30.7 companies that are affiliates may elect to meet one 30.8 combinedexpenditure limitcost containment goal. 30.9 Subd. 3. [DETERMINATION OF EXPENDITURES.] Health plan 30.10 companies shall submit to the commissioner of health, by April 30.11 1, 1994, for calendar year 1993; April 1, 1995, for calendar 30.12 year 1994; April 1, 1996, for calendar year 1995; April 1, 1997, 30.13 for calendar year 1996; and April 1, 1998, for calendar year 30.14 1997 all information the commissioner determines to be necessary 30.15 to implement and enforce this section. The information must be 30.16 submitted in the form specified by the commissioner. The 30.17 information must include, but is not limited to, expenditures 30.18 per member per month or cost per employee per month, and 30.19 detailed information on revenues and reserves. The 30.20 commissioner, to the extent possible, shall coordinate the 30.21 submittal of the information required under this section with 30.22 the submittal of the financial data required under chapter 62J, 30.23 to minimize the administrative burden on health plan companies. 30.24 The commissioner may adjust final expenditure figures for 30.25 demographic changes, risk selection, changes in basic benefits, 30.26 and legislative initiatives that materially change health care 30.27 costs, as long as these adjustments are consistent with the 30.28 methodology submitted by the health plan company to the 30.29 commissioner, and approved by the commissioner as actuarially 30.30 justified. The methodology to be used for adjustments and the 30.31 election to meet oneexpenditure limitcost containment goal for 30.32 affiliated health plan companies must be submitted to the 30.33 commissioner by September 1, 1994. Community integrated service 30.34 networks may submit the information with their application for 30.35 licensure. The commissioner shall also accept changes to 30.36 methodologies already submitted. The adjustment methodology 31.1 submitted and approved by the commissioner must apply to the 31.2 data submitted for calendar years 1994 and 1995. The 31.3 commissioner may allow changes to accepted adjustment 31.4 methodologies for data submitted for calendar years 1996 and 31.5 1997. Changes to the adjustment methodology must be received by 31.6 September 1, 1996, and must be approved by the commissioner. 31.7 Subd. 4. [MONITORING OF RESERVES.](a)The commissioners 31.8 of health and commerce shall monitor health plan company 31.9 reserves and net worth as established under chapters 60A, 62C, 31.10 62D, 62H, and 64B, with respect to the health plan companies 31.11 that each commissioner respectively regulates toensure31.12thatassess the degree to which savings resulting from the 31.13 establishment ofexpenditure limitscost containment goals are 31.14 passed on to consumers in the form of lower premium rates. 31.15(b) Health plan companies shall fully reflect in the31.16premium rates the savings generated by the expenditure limits.31.17No premium rate, currently reviewed by the departments of health31.18or commerce, may be approved for those health plan companies31.19unless the health plan company establishes to the satisfaction31.20of the commissioner of commerce or the commissioner of health,31.21as appropriate, that the proposed new rate would comply with31.22this paragraph.31.23(c) Health plan companies, except those licensed under31.24chapter 60A to sell accident and sickness insurance under31.25chapter 62A, shall annually before the end of the fourth fiscal31.26quarter provide to the commissioner of health or commerce, as31.27applicable, a projection of the level of reserves the company31.28expects to attain during each quarter of the following fiscal31.29year. These health plan companies shall submit with required31.30quarterly financial statements a calculation of the actual31.31reserve level attained by the company at the end of each quarter31.32including identification of the sources of any significant31.33changes in the reserve level and an updated projection of the31.34level of reserves the health plan company expects to attain by31.35the end of the fiscal year. In cases where the health plan31.36company has been given a certificate to operate a new health32.1maintenance organization under chapter 62D, or been licensed as32.2an integrated service network or community integrated service32.3network under chapter 62N, or formed an affiliation with one of32.4these organizations, the health plan company shall also submit32.5with its quarterly financial statement, total enrollment at the32.6beginning and end of the quarter and enrollment changes within32.7each service area of the new organization. The reserve32.8calculations shall be maintained by the commissioners as trade32.9secret information, except to the extent that such information32.10is also required to be filed by another provision of state law32.11and is not treated as trade secret information under such other32.12provisions.32.13(d) Health plan companies in paragraph (c) whose reserves32.14are less than the required minimum or more than the required32.15maximum at the end of the fiscal year shall submit a plan of32.16corrective action to the commissioner of health or commerce32.17under subdivision 7.32.18(e) The commissioner of commerce, in consultation with the32.19commissioner of health, shall report to the legislature no later32.20than January 15, 1995, as to whether the concept of a reserve32.21corridor or other mechanism for purposes of monitoring reserves32.22is adaptable for use with indemnity health insurers that do32.23business in multiple states and that must comply with their32.24domiciliary state's reserves requirements.32.25 Subd. 5. [NOTICE.] The commissioner of health shall 32.26 publish in the State Register and make available to the public 32.27 by July 1, 1995, a list of all health plan companies that 32.28 exceeded theirexpenditure limitcost containment goal for the 32.29 1994 calendar year. The commissioner shall publish in the State 32.30 Register and make available to the public by July 1, 1996, a 32.31 list of all health plan companies that exceeded their 32.32 combinedexpenditure limitcost containment goal for calendar 32.33 years 1994 and 1995. The commissioner shall notify each health 32.34 plan company that the commissioner has determined that the 32.35 health plan company exceeded itsexpenditure limitcost 32.36 containment goal, at least 30 days before publishing the list, 33.1 and shall provide each health plan company with ten days to 33.2 provide an explanation for exceeding theexpenditure limitcost 33.3 containment goal. The commissioner shall review the explanation 33.4 and may change a determination if the commissioner determines 33.5 the explanation to be valid. 33.6 Subd. 6. [ASSISTANCE BY THE COMMISSIONER OF COMMERCE.] The 33.7 commissioner of commerce shall provide assistance to the 33.8 commissioner of health in monitoring health plan companies 33.9 regulated by the commissioner of commerce. The commissioner of 33.10 commerce, in consultation with the commissioner of health, shall 33.11 enforce compliance withexpenditure limitsthe cost containment 33.12 goals for those health plan companies in which the commissioner 33.13 of commerce approves the premium rates. 33.14Subd. 7. [ENFORCEMENT.] (a) The commissioners of health33.15and commerce shall enforce the reserve limits referenced in33.16subdivision 4, with respect to the health plan companies that33.17each commissioner respectively regulates. Each commissioner33.18shall require health plan companies under the commissioner's33.19jurisdiction to submit plans of corrective action when the33.20reserve requirement is not met. The plan of correction must33.21address the following:33.22(1) actuarial assumptions used in forecasting future33.23financial results;33.24(2) trend assumptions used in setting future premiums;33.25(3) demographic, geographic, and private and public sector33.26mix of the population covered by the health plan company;33.27(4) proposed rate increases or decreases;33.28(5) growth limits applied under section 62J.04, subdivision33.291, paragraph (b); and33.30(6) other factors deemed appropriate by the health plan33.31company or commissioner.33.32If the health plan company's reserves exceed the required33.33maximum, the plan of correction shall address how the health33.34plan company will come into compliance and set forth a timetable33.35within which compliance would be achieved. The plan of33.36correction may propose premium refunds, credits for prior34.1premiums paid, policyholder dividends, or any combination of34.2these or other methods which will benefit enrollees and/or34.3Minnesota residents and are such that the reserve requirements34.4can reasonably be expected to be met. The commissioner's34.5evaluation of the plan of correction must consider:34.6(1) whether implementation of the plan would provide the34.7company with an unfair advantage in the market;34.8(2) the extent to which the reserve excess was created by34.9any movement of enrolled persons to another organization formed34.10by the company;34.11(3) whether any proposed premium refund, credit, and/or34.12dividend represents an equitable allocation to policyholders34.13covered in prior periods as determined using sound actuarial34.14practice; and34.15(4) any other factors deemed appropriate by the applicable34.16commissioner.34.17(b) The plan of correction is subject to approval by the34.18commissioner of health or commerce, as applicable. If such a34.19plan is not approved by the applicable commissioner, the34.20applicable commissioner shall enter an order stating the steps34.21that the health plan company must take to come into compliance.34.22Within 30 days of the date of such order, the health plan34.23company must file a notice of appeal with the applicable34.24commissioner or comply with the commissioner's order. If an34.25appeal is filed, such appeal is governed by chapter 14.34.26(c) Health plan companies that exceed the expenditure34.27limits based on two-year average expenditure data (1994 and34.281995, 1996 and 1997) shall be required by the appropriate34.29commissioner to pay back the amount exceeding the expenditure34.30limit through an assessment on the health plan company. A34.31health plan company may appeal the commissioner's order to pay34.32back the amount exceeding the expenditure limit by mailing to34.33the commissioner a written notice of appeal within 30 days from34.34the date the commissioner's order was mailed. The contested34.35case and judicial review provisions of chapter 14 apply to the34.36appeal. The health plan company shall pay the amount specified35.1by the commissioner either to the commissioner or into an escrow35.2account until final resolution of the appeal. Notwithstanding35.3sections 15.472 to 15.475, each party is responsible for its own35.4fees and expenses, including attorneys fees, for the appeal.35.5Any amount required to be paid back under this section shall be35.6deposited in the health care access fund. The appropriate35.7commissioner may approve a different repayment method to take35.8into account the health plan company's financial condition.35.9Health plan companies shall comply with the limits but shall35.10also guarantee that their contractual obligations are met.35.11Health plan companies are prohibited from meeting spending35.12obligations by increasing subscriber liability, including35.13copayments and deductibles and amounts in excess of benefit plan35.14maximums.35.15 Sec. 12. Minnesota Statutes 1996, section 62J.06, is 35.16 amended to read: 35.17 62J.06 [IMMUNITY FROM LIABILITY.] 35.18 No member of theMinnesota health care commission35.19established under section 62J.05,regional coordinating boards 35.20 established under section 62J.09,or the health technology 35.21 advisory committee established under section 62J.15,shall be 35.22 held civilly or criminally liable for an act or omission by that 35.23 person if the act or omission was in good faith and within the 35.24 scope of the member's responsibilities under this chapter. 35.25 Sec. 13. Minnesota Statutes 1996, section 62J.07, 35.26 subdivision 1, is amended to read: 35.27 Subdivision 1. [LEGISLATIVE OVERSIGHT.] The legislative 35.28 commission on health care access reviews the activities of the 35.29 commissioner of health, thestate health care35.30commissionregional coordinating boards, the health technology 35.31 advisory committee, and all other state agencies involved in the 35.32 implementation and administration of this chapter, including 35.33 efforts to obtain federal approval through waivers and other 35.34 means. 35.35 Sec. 14. Minnesota Statutes 1996, section 62J.07, 35.36 subdivision 3, is amended to read: 36.1 Subd. 3. [REPORTS TO THE COMMISSION.] The commissioner of 36.2 healthand the Minnesota health care commission, the regional 36.3 coordinating boards, and the health technology advisory 36.4 committee shall report on their activitiesand the activities of36.5the regional boardsannually and at other times at the request 36.6 of the legislative commission on health care access. The 36.7 commissioners of health, commerce, and human services shall 36.8 provide periodic reports to the legislative commission on the 36.9 progress of rulemaking that is authorized or required under this 36.10 act and shall notify members of the commission when a draft of a 36.11 proposed rule has been completed and scheduled for publication 36.12 in the State Register. At the request of a member of the 36.13 commission, a commissioner shall provide a description and a 36.14 copy of a proposed rule. 36.15 Sec. 15. Minnesota Statutes 1996, section 62J.09, 36.16 subdivision 1, is amended to read: 36.17 Subdivision 1. [GENERAL DUTIES.] (a) The commissioner 36.18 shall divide the state into six regions, one of these regions 36.19 being the seven-county metropolitan area. 36.20The(b) Each rural region shall establish a locally 36.21 controlled regional coordinatingboards are locally controlled36.22boardsboard consisting of providers, health plan companies, 36.23 employers, consumers, and elected officials. Regional 36.24 coordinating boards may: 36.25 (1) undertake voluntary activities to educate consumers, 36.26 providers, and purchasers about community plans and projects 36.27 promoting health care cost containment, consumer accountability, 36.28 access, and quality and efforts to achieve public health goals; 36.29 (2) make recommendations to the commissioner regarding ways 36.30 of improving affordability, accessibility, and quality of health 36.31 care in the region and throughout the state; 36.32 (3) provide technical assistance to parties interested in 36.33 establishing or operating a community integrated service network 36.34 or integrated service network within the region. This 36.35 assistance must complement assistance provided by the 36.36 commissioner under section 62N.23; 37.1 (4) advise the commissioner on public health goals, taking 37.2 into consideration the relevant portions of the community health 37.3 service plans, plans required by the Minnesota comprehensive 37.4 adult mental health act, the Minnesota comprehensive children's 37.5 mental health act, and the community social service act plans 37.6 developed by county boards or community health boards in the 37.7 region under chapters 145A, 245, and 256E; 37.8 (5) prepare an annual regional education plan that is 37.9 consistent with and supportive of public health goals identified 37.10 by community health boards in the region; and 37.11 (6) serve as advisory bodies to identify potential 37.12 applicants for federal Health Professional Shortage Area and 37.13 federal Medically Underserved Area designation as requested by 37.14 the commissioner. 37.15 Sec. 16. Minnesota Statutes 1996, section 62J.15, 37.16 subdivision 1, is amended to read: 37.17 Subdivision 1. [HEALTH TECHNOLOGY ADVISORY COMMITTEE.] The 37.18Minnesota health care commission shall convenecommissioner of 37.19 health shall convene an advisory committee to conduct 37.20 evaluations of existing research and technology assessments 37.21 conducted by other entities of new and existing health care 37.22 technologies as designated by the legislative commission on 37.23 health care access, the commissioner, or the advisory 37.24 committee.The advisory committee may include members of the37.25state commission and other persons appointed by the commission.37.26 The advisory committee must include at least one person 37.27 representing physicians, at least one person representing 37.28 hospitals, and at least one person representing the health care 37.29 technology industry. Health care technologies include high-cost 37.30 drugs, devices, procedures, or processes applied to human health 37.31 care, such as high-cost transplants and expensive scanners and 37.32 imagers. The advisory committee is governed by section 15.0575, 37.33 subdivision 3, except that members do not receive per diem 37.34 payments. 37.35 Sec. 17. Minnesota Statutes 1996, section 62J.152, 37.36 subdivision 1, is amended to read: 38.1 Subdivision 1. [GENERALLY.] The health technology advisory 38.2 committee established in section 62J.15 shall: 38.3 (1) develop criteria and processes for evaluating health 38.4 care technology assessments made by other entities; 38.5 (2) conduct evaluations of specific technologies and their 38.6 specific use and application; 38.7 (3) provide the legislature with scientific evaluations of 38.8 proposed benefit mandates that utilize health care technologies 38.9 for a specific use and application; 38.10 (4) report the results of the evaluations to the 38.11 commissioner and theMinnesota health care38.12commissionlegislative commission on health care access; and 38.13(4)(5) carry out other duties relating to health 38.14 technology assigned by thecommissionlegislature or the 38.15 legislative commission on health care access. 38.16 Sec. 18. Minnesota Statutes 1996, section 62J.152, 38.17 subdivision 2, is amended to read: 38.18 Subd. 2. [PRIORITIES FOR DESIGNATING TECHNOLOGIESCRITERIA 38.19 FORASSESSMENTEVALUATION.] The health technology advisory 38.20 committee shall consider the following criteria indesignating38.21 assessing or evaluating technologiesfor evaluation: 38.22 (1) the level of controversy within the medical or 38.23 scientific community, including questionable or undetermined 38.24 efficacy; 38.25 (2) the cost implications; 38.26 (3) the potential for rapid diffusion; 38.27 (4) the impact on a substantial patient population; 38.28 (5) the existence of alternative technologies; 38.29 (6) the impact on patient safety and health outcome; 38.30 (7) the public health importance; 38.31 (8) the level of public and professional demand; 38.32 (9) the social, ethical, and legal concerns; and 38.33 (10) the prevalence of the disease or condition. 38.34 The committee may give different weights or attach different 38.35 importance to each of the criteria, depending on the technology 38.36 being considered. The committee shall consider any additional 39.1 criteria approved by the commissioner and theMinnesota health39.2care commissionlegislative commission on health care access. 39.3 The committee shall present its list of technologies for 39.4 evaluation to the legislative commission on health care access 39.5 for review. 39.6 Sec. 19. Minnesota Statutes 1996, section 62J.152, 39.7 subdivision 4, is amended to read: 39.8 Subd. 4. [TECHNOLOGY EVALUATION PROCESS.] (a) The health 39.9 technology advisory committee shall collect and evaluate studies 39.10 and research findings on the technologies selected for 39.11 evaluation from as wide of a range of sources as needed, 39.12 including, but not limited to: federal agencies or other units 39.13 of government, international organizations conducting health 39.14 care technology assessments, health carriers, insurers, 39.15 manufacturers, professional and trade associations, nonprofit 39.16 organizations, and academic institutions. The health technology 39.17 advisory committee may use consultants or experts and solicit 39.18 testimony or other input as needed to evaluate a specific 39.19 technology. 39.20 (b) When the evaluation process on a specific technology 39.21 has been completed, the health technology advisory committee 39.22 shall submit a preliminary report to thehealth care39.23commissioncommissioner and the legislative commission on health 39.24 care access and publish a summary of the preliminary report in 39.25 the State Register with a notice that written comments may be 39.26 submitted. The preliminary report must include the results of 39.27 the technology assessment evaluation, studies and research 39.28 findings considered in conducting the evaluation, and the health 39.29 technology advisory committee's summary statement about the 39.30 evaluation. Any interested persons or organizations may submit 39.31 to the health technology advisory committee written comments 39.32 regarding the technology evaluation within 30 days from the date 39.33 the preliminary report was published in the State Register. The 39.34 health technology advisory committee's final report on its 39.35 technology evaluation must be submitted to thehealth care39.36commissioncommissioner, to the legislature, and to the 40.1 information clearinghouse. A summary of written comments 40.2 received by the health technology advisory committee within the 40.3 30-day period must be included in the final report.The health40.4care commission shall review the final report and prepare its40.5comments and recommendations. Before completing its final40.6comments and recommendations, the health care commission shall40.7provide adequate public notice that testimony will be accepted40.8by the health care commission. The health care commission shall40.9then forward the final report, its comments and recommendations,40.10and a summary of the public's comments to the commissioner and40.11information clearinghouse.40.12 (c) The reports of the health technology advisory committee 40.13and the comments and recommendations of the health care40.14commissionshould not eliminate or bar new technology, and are 40.15 not rules as defined in the administrative procedure act. 40.16 Sec. 20. Minnesota Statutes 1996, section 62J.152, 40.17 subdivision 5, is amended to read: 40.18 Subd. 5. [USE OF TECHNOLOGY EVALUATION.] (a) The final 40.19 report on the technology evaluationand the commission's40.20comments and recommendationsmay be used: 40.21 (1) by the commissioner in retrospective and prospective 40.22 review of major expenditures; 40.23 (2) byintegrated service networks and othergroup 40.24 purchasers and by employers, in making coverage, contracting, 40.25 purchasing, and reimbursement decisions; 40.26 (3) by organizations in the development of practice 40.27 parameters; 40.28 (4) by health care providers in making decisions about 40.29 adding or replacing technology and the appropriate use of 40.30 technology; 40.31 (5) by consumers in making decisions about treatment; 40.32 (6) by medical device manufacturers in developing and 40.33 marketing new technologies; and 40.34 (7) as otherwise needed by health care providers, health 40.35 care plans, consumers, and purchasers. 40.36 (b) At the request of the commissioner,the health care41.1commission, in consultation withthe health technology advisory 41.2 committee,shall submit specific recommendations relating to 41.3 technologies that have been evaluated under this section for 41.4 purposes of retrospective and prospective review of major 41.5 expenditures and coverage, contracting, purchasing, and 41.6 reimbursement decisions affecting state programs. 41.7 Sec. 21. Minnesota Statutes 1996, section 62J.152, is 41.8 amended by adding a subdivision to read: 41.9 Subd. 8. [REPEALER.] This section and sections 62J.15 and 41.10 62J.156 are repealed effective July 1, 2001. 41.11 Sec. 22. Minnesota Statutes 1996, section 62J.17, 41.12 subdivision 6a, is amended to read: 41.13 Subd. 6a. [PROSPECTIVE REVIEW AND APPROVAL.] (a) 41.14 [REQUIREMENT.] No health care provider subject to prospective 41.15 review under this subdivision shall make a major spending 41.16 commitment unless: 41.17 (1) the provider has filed an application with the 41.18 commissioner to proceed with the major spending commitment and 41.19 has provided all supporting documentation and evidence requested 41.20 by the commissioner; and 41.21 (2) the commissioner determines, based upon this 41.22 documentation and evidence, that the major spending commitment 41.23 is appropriate under the criteria provided in subdivision 5a in 41.24 light of the alternatives available to the provider. 41.25 (b) [APPLICATION.] A provider subject to prospective 41.26 review and approval shall submit an application to the 41.27 commissioner before proceeding with any major spending 41.28 commitment. The application must address each item listed in 41.29 subdivision 4a, paragraph (a), and must also include 41.30 documentation to support the response to each item. The 41.31 provider may submit information, with supporting documentation, 41.32 regarding why the major spending commitment should be excepted 41.33 from prospective review under subdivision 7. The submission may 41.34 be made either in addition to or instead of the submission of 41.35 information relating to the items listed in subdivision 4a, 41.36 paragraph (a). 42.1 (c) [REVIEW.] The commissioner shall determine, based upon 42.2 the information submitted, whether the major spending commitment 42.3 is appropriate under the criteria provided in subdivision 5a, or 42.4 whether it should be excepted from prospective review under 42.5 subdivision 7. In making this determination, the commissioner 42.6 may also consider relevant information from other sources. At 42.7 the request of the commissioner, theMinnesota health care42.8commissionhealth technology advisory committee shall convene an 42.9 expert review panel made up of persons with knowledge and 42.10 expertise regarding medical equipment, specialized services, 42.11 health care expenditures, and capital expenditures to review 42.12 applications and make recommendations to the commissioner. The 42.13 commissioner shall make a decision on the application within 60 42.14 days after an application is received. 42.15 (d) [PENALTIES AND REMEDIES.] The commissioner of health 42.16 has the authority to issue fines, seek injunctions, and pursue 42.17 other remedies as provided by law. 42.18 Sec. 23. Minnesota Statutes 1996, section 62J.22, is 42.19 amended to read: 42.20 62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.] 42.21 The commissioner of health shall seek the full 42.22 participation of federal health care programs under this 42.23 chapter, including Medicare, medical assistance, veterans 42.24 administration programs, and other federal programs. The 42.25 commissioner of human services shallunder the direction of the42.26health care commissionsubmit waiver requests and take other 42.27 action necessary to obtain federal approval to allow 42.28 participation of the medical assistance program.Other state42.29agencies shall provide assistance at the request of the42.30commission.If federal approval is not given for one or more 42.31 federal programs, data on the amount of health care spending 42.32 that is collected under section 62J.04 shall be adjusted so that 42.33 state and regional spending limits take into account the failure 42.34 of the federal program to participate. 42.35 Sec. 24. Minnesota Statutes 1996, section 62J.25, is 42.36 amended to read: 43.1 62J.25 [MANDATORY MEDICARE ASSIGNMENT.] 43.2 (a) Effective January 1, 1993, a health care provider 43.3authorized to participate in the Medicare programshall not 43.4 charge to or collect from a Medicare beneficiary who is a 43.5 Minnesota resident any amount in excess of 115 percent of the 43.6 Medicare-approved amount for any Medicare-covered service 43.7 provided. 43.8 (b) Effective January 1, 1994, a health care provider 43.9authorized to participate in the Medicare programshall not 43.10 charge to or collect from a Medicare beneficiary who is a 43.11 Minnesota resident any amount in excess of 110 percent of the 43.12 Medicare-approved amount for any Medicare-covered service 43.13 provided. 43.14 (c) Effective January 1, 1995, a health care provider 43.15authorized to participate in the Medicare programshall not 43.16 charge to or collect from a Medicare beneficiary who is a 43.17 Minnesota resident any amount in excess of 105 percent of the 43.18 Medicare-approved amount for any Medicare-covered service 43.19 provided. 43.20 (d) Effective January 1, 1996, a health care provider 43.21authorized to participate in the Medicare programshall not 43.22 charge to or collect from a Medicare beneficiary who is a 43.23 Minnesota resident any amount in excess of the Medicare-approved 43.24 amount for any Medicare-covered service provided. 43.25 (e) This section does not apply to ambulance services as 43.26 defined in section 144.801, subdivision 4, or medical supplies 43.27 and equipment. 43.28 Sec. 25. Minnesota Statutes 1996, section 62J.2914, 43.29 subdivision 1, is amended to read: 43.30 Subdivision 1. [DISCLOSURE.] An application for approval 43.31 must include, to the extent applicable, disclosure of the 43.32 following: 43.33 (1) a descriptive title; 43.34 (2) a table of contents; 43.35 (3) exact names of each party to the application and the 43.36 address of the principal business office of each party; 44.1 (4) the name, address, and telephone number of the persons 44.2 authorized to receive notices and communications with respect to 44.3 the application; 44.4 (5) a verified statement by a responsible officer of each 44.5 party to the application attesting to the accuracy and 44.6 completeness of the enclosed information; 44.7 (6) background information relating to the proposed 44.8 arrangement, including: 44.9 (i) a description of the proposed arrangement, including a 44.10 list of any services or products that are the subject of the 44.11 proposed arrangement; 44.12 (ii) an identification of any tangential services or 44.13 products associated with the services or products that are the 44.14 subject of the proposed arrangement; 44.15 (iii) a description of the geographic territory involved in 44.16 the proposed arrangement; 44.17 (iv) if the geographic territory described in item (iii), 44.18 is different from the territory in which the applicants have 44.19 engaged in the type of business at issue over the last five 44.20 years, a description of how and why the geographic territory 44.21 differs; 44.22 (v) identification of all products or services that a 44.23 substantial share of consumers would consider substitutes for 44.24 any service or product that is the subject of the proposed 44.25 arrangement; 44.26 (vi) identification of whether any services or products of 44.27 the proposed arrangement are currently being offered, capable of 44.28 being offered, utilized, or capable of being utilized by other 44.29 providers or purchasers in the geographic territory described in 44.30 item (iii); 44.31 (vii) identification of the steps necessary, under current 44.32 market and regulatory conditions, for other parties to enter the 44.33 territory described in item (iii) and compete with the 44.34 applicant; 44.35 (viii) a description of the previous history of dealings 44.36 between the parties to the application; 45.1 (ix) a detailed explanation of the projected effects, 45.2 including expected volume, change in price, and increased 45.3 revenue, of the arrangement on each party's current businesses, 45.4 both generally as well as the aspects of the business directly 45.5 involved in the proposed arrangement; 45.6 (x) the present market share of the parties to the 45.7 application and of others affected by the proposed arrangement, 45.8 and projected market shares after implementation of the proposed 45.9 arrangement; 45.10 (xi) a statement of why the projected levels of cost, 45.11 access, or quality could not be achieved in the existing market 45.12 without the proposed arrangement; and 45.13 (xii) an explanation of how the arrangement relates to any 45.14Minnesota health care commission orapplicable regional 45.15 coordinating board plans for delivery of health care; and 45.16 (7) a detailed explanation of how the transaction will 45.17 affect cost, access, and quality. The explanation must address 45.18 the factors in section 62J.2917, subdivision 2, paragraphs (b) 45.19 to (d), to the extent applicable. 45.20 Sec. 26. Minnesota Statutes 1996, section 62J.2915, is 45.21 amended to read: 45.22 62J.2915 [NOTICE AND COMMENT.] 45.23 Subdivision 1. [NOTICE.] The commissioner shall cause the 45.24 notice described in section 62J.2914, subdivision 2, to be 45.25 published in the State Register and sent tothe Minnesota health45.26care commission,the regional coordinating boards for any 45.27 regions that include all or part of the territory covered by the 45.28 proposed arrangement, and any person who has requested to be 45.29 placed on a list to receive notice of applications. The 45.30 commissioner may maintain separate notice lists for different 45.31 regions of the state. The commissioner may also send a copy of 45.32 the notice to any person together with a request that the person 45.33 comment as provided under subdivision 2. Copies of the request 45.34 must be provided to the applicant. 45.35 Subd. 2. [COMMENTS.] Within 20 days after the notice is 45.36 published, any person may mail to the commissioner written 46.1 comments with respect to the application. Within 30 days after 46.2 the notice is published,the Minnesota health care commission or46.3 any regional coordinating board may mail to the commissioner 46.4 comments with respect to the application. Persons submitting 46.5 comments shall provide a copy of the comments to the applicant. 46.6 The applicant may mail to the commissioner written responses to 46.7 any comments within ten days after the deadline for mailing such 46.8 comments. The applicant shall send a copy of the response to 46.9 the person submitting the comment. 46.10 Sec. 27. Minnesota Statutes 1996, section 62J.2916, 46.11 subdivision 1, is amended to read: 46.12 Subdivision 1. [CHOICE OF PROCEDURES.] After the 46.13 conclusion of the period provided in section 62J.2915, 46.14 subdivision 2, for the applicant to respond to comments, the 46.15 commissioner shall select one of the three procedures provided 46.16 in subdivision 2. In determining which procedure to use, the 46.17 commissioner shall consider the following criteria: 46.18 (1) the size of the proposed arrangement, in terms of 46.19 number of parties and amount of money involved; 46.20 (2) the complexity of the proposed arrangement; 46.21 (3) the novelty of the proposed arrangement; 46.22 (4) the substance and quantity of the comments received; 46.23 (5) any comments received from theMinnesota health care46.24commission orregional coordinating boards; and 46.25 (6) the presence or absence of any significant gaps in the 46.26 factual record. 46.27 If the applicant demands a contested case hearing no later 46.28 than the conclusion of the period provided in section 62J.2915, 46.29 subdivision 2, for the applicant to respond to comments, the 46.30 commissioner shall not select a procedure. Instead, the 46.31 applicant shall be given a contested case proceeding as a matter 46.32 of right. 46.33 Sec. 28. Minnesota Statutes 1996, section 62J.2917, 46.34 subdivision 2, is amended to read: 46.35 Subd. 2. [FACTORS.] (a) [GENERALLY APPLICABLE FACTORS.] 46.36 In making a determination about cost, access, and quality, the 47.1 commissioner may consider the following factors, to the extent 47.2 relevant: 47.3 (1) whether the proposal is compatible with thecost47.4containment plan or other plan of the Minnesota health care47.5commission or theapplicable regional plans of the regional 47.6 coordinating boards; 47.7 (2) market structure: 47.8 (i) actual and potential sellers and buyers, or providers 47.9 and purchasers; 47.10 (ii) actual and potential consumers; 47.11 (iii) geographic market area; and 47.12 (iv) entry conditions; 47.13 (3) current market conditions; 47.14 (4) the historical behavior of the market; 47.15 (5) performance of other, similar arrangements; 47.16 (6) whether the proposal unnecessarily restrains 47.17 competition or restrains competition in ways not reasonably 47.18 related to the purposes of this chapter; and 47.19 (7) the financial condition of the applicant. 47.20 (b) [COST.] The commissioner's analysis of cost must focus 47.21 on the individual consumer of health care. Cost savings to be 47.22 realized by providers, health carriers, group purchasers, or 47.23 other participants in the health care system are relevant only 47.24 to the extent that the savings are likely to be passed on to the 47.25 consumer. However, where an application is submitted by 47.26 providers or purchasers who are paid primarily by third party 47.27 payers unaffiliated with the applicant, it is sufficient for the 47.28 applicant to show that cost savings are likely to be passed on 47.29 to the unaffiliated third party payers; the applicants do not 47.30 have the burden of proving that third party payers with whom the 47.31 applicants are not affiliated will pass on cost savings to 47.32 individuals receiving coverage through the third party payers. 47.33 In making determinations as to costs, the commissioner may 47.34 consider: 47.35 (1) the cost savings likely to result to the applicant; 47.36 (2) the extent to which the cost savings are likely to be 48.1 passed on to the consumer and in what form; 48.2 (3) the extent to which the proposed arrangement is likely 48.3 to result in cost shifting by the applicant onto other payers or 48.4 purchasers of other products or services; 48.5 (4) the extent to which the cost shifting by the applicant 48.6 is likely to be followed by other persons in the market; 48.7 (5) the current and anticipated supply and demand for any 48.8 products or services at issue; 48.9 (6) the representations and guarantees of the applicant and 48.10 their enforceability; 48.11 (7) likely effectiveness of regulation by the commissioner; 48.12 (8) inferences to be drawn from market structure; 48.13 (9) the cost of regulation, both for the state and for the 48.14 applicant; and 48.15 (10) any other factors tending to show that the proposed 48.16 arrangement is or is not likely to reduce cost. 48.17 (c) [ACCESS.] In making determinations as to access, the 48.18 commissioner may consider: 48.19 (1) the extent to which the utilization of needed health 48.20 care services or products by the intended targeted population is 48.21 likely to increase or decrease. When a proposed arrangement is 48.22 likely to increase access in one geographic area, by lowering 48.23 prices or otherwise expanding supply, but limits access in 48.24 another geographic area by removing service capabilities from 48.25 that second area, the commissioner shall articulate the criteria 48.26 employed to balance these effects; 48.27 (2) the extent to which the proposed arrangement is likely 48.28 to make available a new and needed service or product to a 48.29 certain geographic area; and 48.30 (3) the extent to which the proposed arrangement is likely 48.31 to otherwise make health care services or products more 48.32 financially or geographically available to persons who need them. 48.33 If the commissioner determines that the proposed 48.34 arrangement is likely to increase access and bases that 48.35 determination on a projected increase in utilization, the 48.36 commissioner shall also determine and make a specific finding 49.1 that the increased utilization does not reflect overutilization. 49.2 (d) [QUALITY.] In making determinations as to quality, the 49.3 commissioner may consider the extent to which the proposed 49.4 arrangement is likely to: 49.5 (1) decrease morbidity and mortality; 49.6 (2) result in faster convalescence; 49.7 (3) result in fewer hospital days; 49.8 (4) permit providers to attain needed experience or 49.9 frequency of treatment, likely to lead to better outcomes; 49.10 (5) increase patient satisfaction; and 49.11 (6) have any other features likely to improve or reduce the 49.12 quality of health care. 49.13 Sec. 29. Minnesota Statutes 1996, section 62J.2921, 49.14 subdivision 2, is amended to read: 49.15 Subd. 2. [NOTICE.] The commissioner shall begin a 49.16 proceeding to revoke approval by providing written notice to the 49.17 applicant describing in detail the basis for the proposed 49.18 revocation. Notice of the proceeding must be published in the 49.19 State Register and submitted tothe Minnesota health care49.20commission andthe applicable regional coordinating boards. The 49.21 notice must invite the submission of comments to the 49.22 commissioner. 49.23 Sec. 30. Minnesota Statutes 1996, section 62J.451, 49.24 subdivision 6b, is amended to read: 49.25 Subd. 6b. [CONSUMER SURVEYS.] (a) The health data 49.26 institute shall develop and implement a mechanism for collecting 49.27 comparative data on consumer perceptions of the health care 49.28 system, including consumer satisfaction, through adoption of a 49.29 standard consumer survey. This survey shall include enrollees 49.30 in community integrated service networks, integrated service 49.31 networks, health maintenance organizations, preferred provider 49.32 organizations, indemnity insurance plans, public programs, and 49.33 other health plan companies. The health data institute, in49.34consultation with the health care commission,shall determine a 49.35 mechanism for the inclusion of the uninsured. This consumer 49.36 survey may be conducted every two years. A focused survey may 50.1 be conducted on the off years. Health plan companies and group 50.2 purchasers shall provide to the health data institute roster 50.3 data as defined in subdivision 2, including the names, 50.4 addresses, and telephone numbers of enrollees and former 50.5 enrollees and other data necessary for the completion of this 50.6 survey. This roster data provided by the health plan companies 50.7 and group purchasers is classified as provided under section 50.8 62J.452. The health data institute may analyze and prepare 50.9 findings from the raw, unaggregated data, and the findings from 50.10 this survey may be included in the health plan company 50.11 performance reports specified in subdivision 6a, and in other 50.12 reports developed and disseminated by the health data institute 50.13 and the commissioner. The raw, unaggregated data is classified 50.14 as provided under section 62J.452, and may be made available by 50.15 the health data institute to the extent permitted under section 50.16 62J.452. The health data institute shall provide raw, 50.17 unaggregated data to the commissioner. The survey may include 50.18 information on the following subjects: 50.19 (1) enrollees' overall satisfaction with their health care 50.20 plan; 50.21 (2) consumers' perception of access to emergency, urgent, 50.22 routine, and preventive care, including locations, hours, 50.23 waiting times, and access to care when needed; 50.24 (3) premiums and costs; 50.25 (4) technical competence of providers; 50.26 (5) communication, courtesy, respect, reassurance, and 50.27 support; 50.28 (6) choice and continuity of providers; 50.29 (7) continuity of care; 50.30 (8) outcomes of care; 50.31 (9) services offered by the plan, including range of 50.32 services, coverage for preventive and routine services, and 50.33 coverage for illness and hospitalization; 50.34 (10) availability of information; and 50.35 (11) paperwork. 50.36 (b) The health data institute shall appoint a consumer 51.1 advisory group which shall consist of 13 individuals, 51.2 representing enrollees from public and private health plan 51.3 companies and programs and two uninsured consumers, to advise 51.4 the health data institute on issues of concern to consumers. 51.5 The advisory group must have at least one member from each 51.6 regional coordinating board region of the state. The advisory 51.7 group expires June 30, 1996. 51.8 Sec. 31. Minnesota Statutes 1996, section 62L.08, 51.9 subdivision 8, is amended to read: 51.10 Subd. 8. [FILING REQUIREMENT.] No later than July 1, 1993, 51.11 and each year thereafter, a health carrier that offers, sells, 51.12 issues, or renews a health benefit plan for small employers 51.13 shall file with the commissioner the index rates and must 51.14 demonstrate that all rates shall be within the rating 51.15 restrictions defined in this chapter. Such demonstration must 51.16 include the allowable range of rates from the index rates and a 51.17 description of how the health carrier intends to use demographic 51.18 factors including case characteristics in calculating the 51.19 premium rates. The rates shall not be approved, unless the 51.20 commissioner has determined that the rates are reasonable. In 51.21 determining reasonableness, the commissioner shall consider the 51.22growth rates appliedcost containment goals established under 51.23 section 62J.04, subdivision 1, paragraph (b), to the calendar 51.24 year or years that the proposed premium rate would be in effect, 51.25 actuarially valid changes in risk associated with the enrollee 51.26 population, and actuarially valid changes as a result of 51.27 statutory changes in Laws 1992, chapter 549.For premium rates51.28proposed to go into effect between July 1, 1993 and December 31,51.291993, the pertinent growth rate is the growth rate applied under51.30section 62J.04, subdivision 1, paragraph (b), to calendar year51.311994.51.32 Sec. 32. Minnesota Statutes 1996, section 62M.02, 51.33 subdivision 21, is amended to read: 51.34 Subd. 21. [UTILIZATION REVIEW ORGANIZATION.] "Utilization 51.35 review organization" means an entity including but not limited 51.36 to an insurance company licensed under chapter 60A to offer, 52.1 sell, or issue a policy of accident and sickness insurance as 52.2 defined in section 62A.01; a health service plan licensed under 52.3 chapter 62C; a health maintenance organization licensed under 52.4 chapter 62D; a community integrated service networkor an52.5integrated service networklicensed under chapter 62N; a 52.6 fraternal benefit society operating under chapter 64B; a joint 52.7 self-insurance employee health plan operating under chapter 62H; 52.8 a multiple employer welfare arrangement, as defined in section 3 52.9 of the Employee Retirement Income Security Act of 1974 (ERISA), 52.10 United States Code, title 29, section 1103, as amended; a third 52.11 party administrator licensed under section 60A.23, subdivision 52.12 8, which conducts utilization review and determines 52.13 certification of an admission, extension of stay, or other 52.14 health care services for a Minnesota resident; or any entity 52.15 performing utilization review that is affiliated with, under 52.16 contract with, or conducting utilization review on behalf of, a 52.17 business entity in this state. 52.18 Sec. 33. Minnesota Statutes 1996, section 62N.01, 52.19 subdivision 1, is amended to read: 52.20 Subdivision 1. [CITATION.] This chapter may be cited as 52.21 the "Minnesota community integrated service network act." 52.22 Sec. 34. Minnesota Statutes 1996, section 62N.22, is 52.23 amended to read: 52.24 62N.22 [DISCLOSURE OF COMMISSIONS.] 52.25 Before selling any coverage or enrollment in a community 52.26 integrated service networkor an integrated service network, a 52.27 person selling the coverage or enrollment shall disclose in 52.28 writing to the prospective purchaser the amount of any 52.29 commission or other compensation the person will receive as a 52.30 direct result of the sale. The disclosure may be expressed in 52.31 dollars or as a percentage of the premium. The amount disclosed 52.32 need not include any anticipated renewal commissions. 52.33 Sec. 35. Minnesota Statutes 1996, section 62N.23, is 52.34 amended to read: 52.35 62N.23 [TECHNICAL ASSISTANCE; LOANS.] 52.36 (a) The commissioner shall provide technical assistance to 53.1 parties interested in establishing or operating a community 53.2 integrated service networkor an integrated service network. 53.3 This shall be known as the community integrated service network 53.4 technical assistance program(ISNTAP)(CISNTAP). 53.5 The technical assistance program shall offer seminars on 53.6 the establishment and operation of community integrated service 53.7 networksor integrated service networksin all regions of 53.8 Minnesota. The commissioner shall advertise these seminars in 53.9 local and regional newspapers, and attendance at these seminars 53.10 shall be free. 53.11 The commissioner shall write a guide to establishing and 53.12 operating a community integrated service networkor an53.13integrated service network. The guide must provide basic 53.14 instructions for parties wishing to establish a community 53.15 integrated service networkor an integrated service network. 53.16 The guide must be provided free of charge to interested 53.17 parties. The commissioner shall update this guide when 53.18 appropriate. 53.19 The commissioner shall establish a toll-free telephone line 53.20 that interested parties may call to obtain assistance in 53.21 establishing or operating a community integrated service network 53.22or an integrated service network. 53.23 (b) The commissioner shall grant loans for organizational 53.24 and start-up expenses to entities forming community integrated 53.25 service networksor integrated service networks, or to networks 53.26 less than one year old, to the extent of any appropriation for 53.27 that purpose. The commissioner shall allocate the available 53.28 funds among applicants based upon the following criteria, as 53.29 evaluated by the commissioner within the commissioner's 53.30 discretion: 53.31 (1) the applicant's need for the loan; 53.32 (2) the likelihood that the loan will foster the formation 53.33 or growth of a network; and 53.34 (3) the likelihood of repayment. 53.35 The commissioner shall determine any necessary application 53.36 deadlines and forms and is exempt from rulemaking in doing so. 54.1 Sec. 36. Minnesota Statutes 1996, section 62N.25, 54.2 subdivision 5, is amended to read: 54.3 Subd. 5. [BENEFITS.] Community integrated service networks 54.4 must offer the health maintenance organization benefit set, as 54.5 defined in chapter 62D, and other laws applicable to entities 54.6 regulated under chapter 62D, except that the community54.7integrated service network may impose a deductible, not to54.8exceed $1,000 per person per year, provided that out-of-pocket54.9expenses on covered services do not exceed $3,000 per person or54.10$5,000 per family per year. The deductible must not apply to54.11preventive health services as described in Minnesota Rules, part54.124685.0801, subpart 8. Community networks and chemical 54.13 dependency facilities under contract with a community network 54.14 shall use the assessment criteria in Minnesota Rules, parts 54.15 9530.6600 to 9530.6660, when assessing enrollees for chemical 54.16 dependency treatment. 54.17 Sec. 37. Minnesota Statutes 1996, section 62N.26, is 54.18 amended to read: 54.19 62N.26 [SHARED SERVICES COOPERATIVE.] 54.20 The commissioner of health shall establish, or assist in 54.21 establishing, a shared services cooperative organized under 54.22 chapter 308A to make available administrative and legal 54.23 services, technical assistance, provider contracting and billing 54.24 services, and other services to those community integrated 54.25 service networksand integrated service networksthat choose to 54.26 participate in the cooperative. The commissioner shall provide, 54.27 to the extent funds are appropriated, start-up loans sufficient 54.28 to maintain the shared services cooperative until its operations 54.29 can be maintained by fees and contributions. The cooperative 54.30 must not be staffed, administered, or supervised by the 54.31 commissioner of health. The cooperative shall make use of 54.32 existing resources that are already available in the community, 54.33 to the extent possible. 54.34 Sec. 38. Minnesota Statutes 1996, section 62N.40, is 54.35 amended to read: 54.36 62N.40 [CHEMICAL DEPENDENCY SERVICES.] 55.1 Each community integrated service networkand integrated55.2service networkregulated under this chapter must ensure that 55.3 chemically dependent individuals have access to cost-effective 55.4 treatment options that address the specific needs of 55.5 individuals. These include, but are not limited to, the need 55.6 for: treatment that takes into account severity of illness and 55.7 comorbidities; provision of a continuum of care, including 55.8 treatment and rehabilitation programs licensed under Minnesota 55.9 Rules, parts 9530.4100 to 9530.4410 and 9530.5000 to 9530.6500; 55.10 the safety of the individual's domestic and community 55.11 environment; gender appropriate and culturally appropriate 55.12 programs; and access to appropriate social services. 55.13 Sec. 39. Minnesota Statutes 1996, section 62Q.01, 55.14 subdivision 3, is amended to read: 55.15 Subd. 3. [HEALTH PLAN.] "Health plan" means a health plan 55.16 as defined in section 62A.011; a policy, contract, or 55.17 certificate issued by a community integrated service network; or55.18an integrated service network. 55.19 Sec. 40. Minnesota Statutes 1996, section 62Q.01, 55.20 subdivision 4, is amended to read: 55.21 Subd. 4. [HEALTH PLAN COMPANY.] "Health plan company" 55.22 means: 55.23 (1) a health carrier as defined under section 62A.011, 55.24 subdivision 2; or 55.25 (2)an integrated service network as defined under section55.2662N.02, subdivision 8; or55.27(3)a community integrated service network as defined under 55.28 section 62N.02, subdivision 4a. 55.29 Sec. 41. Minnesota Statutes 1996, section 62Q.01, 55.30 subdivision 5, is amended to read: 55.31 Subd. 5. [MANAGED CARE ORGANIZATION.] "Managed care 55.32 organization" means: (1) a health maintenance organization 55.33 operating under chapter 62D; (2) a community integrated service 55.34 network as defined under section 62N.02, subdivision 55.35 4a; or (3)an integrated service network as defined under55.36section 62N.02, subdivision 8; or (4)an insurance company 56.1 licensed under chapter 60A, nonprofit health service plan 56.2 corporation operating under chapter 62C, fraternal benefit 56.3 society operating under chapter 64B, or any other health plan 56.4 company, to the extent that it covers health care services 56.5 delivered to Minnesota residents through a preferred provider 56.6 organization or a network of selected providers. 56.7 Sec. 42. Minnesota Statutes 1996, section 62Q.03, 56.8 subdivision 5a, is amended to read: 56.9 Subd. 5a. [PUBLIC PROGRAMS.] (a) A separate risk 56.10 adjustment system must be developed for state-run public 56.11 programs, including medical assistance, general assistance 56.12 medical care, and MinnesotaCare. The system must be developed 56.13 in accordance with the general risk adjustment methodologies 56.14 described in this section, must include factors in addition to 56.15 age and sex adjustment, and may include additional demographic 56.16 factors, different targeted conditions, and/or different payment 56.17 amounts for conditions. The risk adjustment system for public 56.18 programs must attempt to reflect the special needs related to 56.19 poverty, cultural, or language barriers and other needs of the 56.20 public program population. 56.21 (b) The commissioners of health and human services shall 56.22 jointly convene a public programs risk adjustment work group 56.23 responsible for advising the commissioners in the design of the 56.24 public programs risk adjustment system. The public programs 56.25 risk adjustment work group is governed by section 15.059 for 56.26 purposes of membership terms and removal of members and shall 56.27 terminate on June 30, 1999. The work group shall meet at the 56.28 discretion of the commissioners of health and human services. 56.29 The commissioner of health shall work with the risk adjustment 56.30 association to ensure coordination between the risk adjustment 56.31 systems for the public and private sectors. The commissioner of 56.32 human services shall seek any needed federal approvals necessary 56.33 for the inclusion of the medical assistance program in the 56.34 public programs risk adjustment system. 56.35 (c) The public programs risk adjustment work group must be 56.36 representative of the persons served by publicly paid health 57.1 programs and providers and health plans that meet their needs. 57.2 To the greatest extent possible, the appointing authorities 57.3 shall attempt to select representatives that have historically 57.4 served a significant number of persons in publicly paid health 57.5 programs or the uninsured. Membership of the work group shall 57.6 be as follows: 57.7 (1) one provider member appointed by the Minnesota Medical 57.8 Association; 57.9 (2) two provider members appointed by the Minnesota 57.10 Hospital Association, at least one of whom must represent a 57.11 major disproportionate share hospital; 57.12 (3) five members appointed by the Minnesota Council of 57.13 HMOs, one of whom must represent an HMO with fewer than 50,000 57.14 enrollees located outside the metropolitan area and one of whom 57.15 must represent an HMO with at least 50 percent of total 57.16 membership enrolled through a public program; 57.17 (4) two representatives of counties appointed by the 57.18 Association of Minnesota Counties; 57.19 (5) three representatives of organizations representing the 57.20 interests of families, children, childless adults, and elderly 57.21 persons served by the various publicly paid health programs 57.22 appointed by the governor; 57.23 (6) two representatives of persons with mental health, 57.24 developmental or physical disabilities, chemical dependency, or 57.25 chronic illness appointed by the governor; and 57.26 (7) three public members appointed by the governor, at 57.27 least one of whom must represent a community health board. The 57.28 risk adjustment association may appoint a representative, if a 57.29 representative is not otherwise appointed by an appointing 57.30 authority. 57.31 (d) The commissioners of health and human services, with 57.32 the advice of the public programs risk adjustment work group, 57.33 shall develop a work plan and time frame and shall coordinate 57.34 their efforts with the private sector risk adjustment 57.35 association's activities and other state initiatives related to 57.36 public program managed care reimbursement.The commissioners of58.1health and human services shall report to the health care58.2commission and to the appropriate legislative committees on58.3January 15, 1996, and on January 15, 1997, on any policy or58.4legislative changes necessary to implement the public program58.5risk adjustment system.58.6 Sec. 43. Minnesota Statutes 1996, section 62Q.106, is 58.7 amended to read: 58.8 62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER.] 58.9 A complainant may at any time submit a complaint to the 58.10 appropriate commissioner to investigate. After investigating a 58.11 complaint, or reviewing a company's decision, the appropriate 58.12 commissioner may order a remedy as authorized under section 58.1362N.04,62Q.30,or chapter 45, 60A, or 62D. 58.14 Sec. 44. Minnesota Statutes 1996, section 62Q.33, 58.15 subdivision 2, is amended to read: 58.16 Subd. 2. [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 58.17 of health, in consultation with the state community health 58.18 services advisory committee and the commissioner of human 58.19 services, and representatives of local health departments, 58.20 county government, a municipal government acting as a local 58.21 board of health,the Minnesota health care commission,area 58.22 Indian health services, health care providers, and citizens 58.23 concerned about public health, shall coordinate the process for 58.24 defining implementation and financing responsibilities of the 58.25 local government core public health functions. The commissioner 58.26 shall submit recommendations and an initial and final report on 58.27 local government core public health functions according to the 58.28 timeline established in subdivision 5. 58.29 Sec. 45. Minnesota Statutes 1996, section 62Q.45, 58.30 subdivision 2, is amended to read: 58.31 Subd. 2. [DEFINITION.] For purposes of this section, 58.32 "managed care organization" means: (1) a health maintenance 58.33 organization operating under chapter 62D; (2) a community 58.34 integrated service network as defined under section 62N.02, 58.35 subdivision 4a; or (3)an integrated service network as defined58.36under section 62N.02, subdivision 8; or (4)an insurance company 59.1 licensed under chapter 60A, nonprofit health service plan 59.2 corporation operating under chapter 62C, fraternal benefit 59.3 society operating under chapter 64B, or any other health plan 59.4 company, to the extent that it covers health care services 59.5 delivered to Minnesota residents through a preferred provider 59.6 organization or a network of selected providers. 59.7 Sec. 46. [62Q.52] [REFERRALS FOR RESIDENTS OF HEALTH CARE 59.8 FACILITIES.] 59.9 If an enrollee is a resident of a health care facility 59.10 licensed under chapter 144A or a housing with services 59.11 establishment registered under chapter 144D, the enrollee's 59.12 primary care physician must refer the enrollee to that 59.13 facility's skilled nursing unit or that facility's appropriate 59.14 care setting, provided that the health plan company and the 59.15 provider can best meet the patient's needs in that setting, if 59.16 the following conditions are met: 59.17 (1) the facility agrees to be reimbursed at that health 59.18 plan company's contract rate negotiated with similar providers 59.19 for the same services and supplies; and 59.20 (2) the facility meets all guidelines established by the 59.21 health plan company related to quality of care, utilization, 59.22 referral authorization, risk assumption, use of health plan 59.23 company network, and other criteria applicable to providers 59.24 under contract for the same services and supplies. 59.25 Sec. 47. [62Q.65] [ACCESS TO PROVIDER DISCOUNTS.] 59.26 Subdivision 1. [REQUIREMENT.] A high deductible health 59.27 plan must, when used in connection with a medical savings 59.28 account, provide the enrollee access to any discounted provider 59.29 fees for services covered by the high deductible health plan, 59.30 regardless of whether the enrollee has satisfied the deductible 59.31 for the high deductible health plan. 59.32 Subd. 2. [DEFINITIONS.] For purposes of this section, the 59.33 following terms have the meanings given: 59.34 (1) "high deductible health plan" has the meaning given 59.35 under the Internal Revenue Code of 1986, section 220(c)(2); 59.36 (2) "medical savings account" has the meaning given under 60.1 the Internal Revenue Code of 1986, section 220(d)(1); and 60.2 (3) "discounted provider fees" means fees contained in a 60.3 provider agreement entered into by the issuer of the high 60.4 deductible health plan, or an affiliate of the issuer, for use 60.5 in connection with the high deductible health plan. 60.6 Sec. 48. Minnesota Statutes 1996, section 256.9363, 60.7 subdivision 1, is amended to read: 60.8 Subdivision 1. [SELECTION OF VENDORS.] In order to contain 60.9 costs, the commissioner of human services shall select vendors 60.10 of medical care who can provide the most economical care 60.11 consistent with high medical standards and shall, where 60.12 possible, contract with organizations on a prepaid capitation 60.13 basis to provide these services. The commissioner shall 60.14 consider proposals by counties and vendors for managed care 60.15 plans which may include: prepaid capitation programs, 60.16 competitive bidding programs, or other vendor payment mechanisms 60.17 designed to provide services in an economical manner or to 60.18 control utilization, with safeguards to ensure that necessary 60.19 services are provided.Managed care plans may include60.20integrated service networks as defined in section 62N.02.60.21 Sec. 49. Minnesota Statutes 1996, section 256.9657, 60.22 subdivision 3, is amended to read: 60.23 Subd. 3. [HEALTH MAINTENANCE ORGANIZATION; COMMUNITY 60.24 INTEGRATED SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 60.25 1992, each health maintenance organization with a certificate of 60.26 authority issued by the commissioner of health under chapter 62D 60.27 and eachintegrated service network andcommunity integrated 60.28 service network licensed by the commissioner under chapter 62N 60.29 shall pay to the commissioner of human services a surcharge 60.30 equal to six-tenths of one percent of the total premium revenues 60.31 of the health maintenance organization, integrated service60.32network,or community integrated service network as reported to 60.33 the commissioner of health according to the schedule in 60.34 subdivision 4. 60.35 (b) For purposes of this subdivision, total premium revenue 60.36 means: 61.1 (1) premium revenue recognized on a prepaid basis from 61.2 individuals and groups for provision of a specified range of 61.3 health services over a defined period of time which is normally 61.4 one month, excluding premiums paid to a health maintenance 61.5 organization, integrated service network,or community 61.6 integrated service network from the Federal Employees Health 61.7 Benefit Program; 61.8 (2) premiums from Medicare wrap-around subscribers for 61.9 health benefits which supplement Medicare coverage; 61.10 (3) Medicare revenue, as a result of an arrangement between 61.11 a health maintenance organization, an integrated service61.12network,or a community integrated service network and the 61.13 health care financing administration of the federal Department 61.14 of Health and Human Services, for services to a Medicare 61.15 beneficiary; and 61.16 (4) medical assistance revenue, as a result of an 61.17 arrangement between a health maintenance organization,61.18integrated service network,or community integrated service 61.19 network and a Medicaid state agency, for services to a medical 61.20 assistance beneficiary. 61.21 If advance payments are made under clause (1) or (2) to the 61.22 health maintenance organization, integrated service network,or 61.23 community integrated service network for more than one reporting 61.24 period, the portion of the payment that has not yet been earned 61.25 must be treated as a liability. 61.26 (c) When a health maintenance organization oran integrated61.27service network orcommunity integrated service network merges 61.28 or consolidates with or is acquired by another health 61.29 maintenance organization, integrated service network,or 61.30 community integrated service network, the surviving corporation 61.31 or the new corporation shall be responsible for the annual 61.32 surcharge originally imposed on each of the entities or 61.33 corporations subject to the merger, consolidation, or 61.34 acquisition, regardless of whether one of the entities or 61.35 corporations does not retain a certificate of authority under 61.36 chapter 62D or a license under chapter 62N. 62.1 (d) Effective July 1 of each year, the surviving 62.2 corporation's or the new corporation's surcharge shall be based 62.3 on the revenues earned in the second previous calendar year by 62.4 all of the entities or corporations subject to the merger, 62.5 consolidation, or acquisition regardless of whether one of the 62.6 entities or corporations does not retain a certificate of 62.7 authority under chapter 62D or a license under chapter 62N until 62.8 the total premium revenues of the surviving corporation include 62.9 the total premium revenues of all the merged entities as 62.10 reported to the commissioner of health. 62.11 (e) When a health maintenance organization, integrated62.12service network,or community integrated service network, which 62.13 is subject to liability for the surcharge under this chapter, 62.14 transfers, assigns, sells, leases, or disposes of all or 62.15 substantially all of its property or assets, liability for the 62.16 surcharge imposed by this chapter is imposed on the transferee, 62.17 assignee, or buyer of the health maintenance organization,62.18integrated service network,or community integrated service 62.19 network. 62.20 (f) In the event a health maintenance organization,62.21integrated service network,or community integrated service 62.22 network converts its licensure to a different type of entity 62.23 subject to liability for the surcharge under this chapter, but 62.24 survives in the same or substantially similar form, the 62.25 surviving entity remains liable for the surcharge regardless of 62.26 whether one of the entities or corporations does not retain a 62.27 certificate of authority under chapter 62D or a license under 62.28 chapter 62N. 62.29 (g) The surcharge assessed to a health maintenance 62.30 organization, integrated service network,or community 62.31 integrated service network ends when the entity ceases providing 62.32 services for premiums and the cessation is not connected with a 62.33 merger, consolidation, acquisition, or conversion. 62.34 Sec. 50. [MEIP STUDY.] 62.35 The commissioner of employee relations shall study the 62.36 current Minnesota employees insurance program (MEIP) and report 63.1 to the legislature by January 15, 1998, on recommendations on 63.2 whether this program provides greater accessibility to small 63.3 employers for purchasing health insurance and on the continued 63.4 viability of the program. 63.5 Sec. 51. [REVISOR INSTRUCTIONS.] 63.6 The revisor of statutes shall delete references to 63.7 "integrated service network," but not "community integrated 63.8 service network," wherever it appears in Minnesota Statutes and 63.9 make conforming changes as necessary. 63.10 Sec. 52. [REPEALER.] 63.11 (a) Minnesota Statutes 1996, sections 62J.03, subdivision 63.12 3; 62J.04, subdivisions 4 and 7; 62J.041, subdivision 7; 63.13 62J.042; 62J.05; 62J.051; 62J.09, subdivision 3a; 62J.37; 63.14 62N.01, subdivision 2; 62N.02, subdivisions 2, 3, 4b, 4c, 6, 7, 63.15 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 62N.06; 62N.065; 63.16 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 62N.077; 62N.078; 63.17 62N.10; 62N.11; 62N.12; 62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 63.18 62N.24; 62N.38; 62Q.165, subdivision 3; 62Q.25; 62Q.29; 62Q.41; 63.19 and 147.01, subdivision 6, are repealed. 63.20 (b) Laws 1993, chapter 247, article 4, section 8; Laws 63.21 1995, chapter 96, section 2; and Laws 1995, First Special 63.22 Session chapter 3, article 13, section 2, are repealed. 63.23 (c) Laws 1994, chapter 625, article 5, section 5, as 63.24 amended by Laws 1995, chapter 234, article 3, section 8, is 63.25 repealed. 63.26 Sec. 53. [EFFECTIVE DATE.] 63.27 Section 24 [62J.25] is effective the day following final 63.28 enactment. Section 47 [62Q.65] is effective January 1, 1998, 63.29 and applies to high deductible health plans issued or renewed on 63.30 or after that date. 63.31 ARTICLE 3 63.32 MINNESOTACARE TAXES 63.33 Section 1. [16A.76] [FEDERAL RESERVE; HEALTH CARE ACCESS 63.34 FUND.] 63.35 Subdivision 1. [ESTABLISH RESERVE.] The federal 63.36 contingency reserve is established within the health care access 64.1 fund for uses necessary to preserve access to basic health care 64.2 services when federal funding is significantly reduced. 64.3 Subd. 2. [RESERVE FINANCING.] The funds in reserve shall 64.4 be equal to the amount of federal financial participation 64.5 received since July 1, 1995, for services and administrative 64.6 activities funded by the health care access fund up to a reserve 64.7 limit of $150,000,000. Investment income attributed to the 64.8 federal contingency reserve balances shall also be included in 64.9 the total reserve amount. 64.10 Subd. 3. [PERMITTED USE.] The federal contingency reserve 64.11 is established to protect access to basic health care services 64.12 that are publicly funded. Funds held in the federal contingency 64.13 reserve are available for appropriation in the event that 64.14 federal funds for basic health care services are significantly 64.15 reduced such as under federal reform or other significant 64.16 changes to federal law. 64.17 Subd. 4. [LIMITS ON USE.] The federal contingency reserve 64.18 is not available for supplementing reductions in federal funding 64.19 resulting from application of current federal law funding 64.20 formulas, for funding long-term care services, or for replacing 64.21 existing general fund commitments. 64.22 Sec. 2. Minnesota Statutes 1996, section 60A.15, 64.23 subdivision 1, is amended to read: 64.24 Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 64.25 before April 1, June 1, and December 1 of each year, every 64.26 domestic and foreign company, including town and farmers' mutual 64.27 insurance companies, domestic mutual insurance companies, marine 64.28 insurance companies, health maintenance organizations, 64.29integrated service networks,community integrated service 64.30 networks, and nonprofit health service plan corporations, shall 64.31 pay to the commissioner of revenue installments equal to 64.32 one-third of the insurer's total estimated tax for the current 64.33 year. Except as provided in paragraphs (d) and (e), 64.34 installments must be based on a sum equal to two percent of the 64.35 premiums described in paragraph (b). 64.36 (b) Installments under paragraph (a), (d), or (e) are 65.1 percentages of gross premiums less return premiums on all direct 65.2 business received by the insurer in this state, or by its agents 65.3 for it, in cash or otherwise, during such year. 65.4 (c) Failure of a company to make payments of at least 65.5 one-third of either (1) the total tax paid during the previous 65.6 calendar year or (2) 80 percent of the actual tax for the 65.7 current calendar year shall subject the company to the penalty 65.8 and interest provided in this section, unless the total tax for 65.9 the current tax year is $500 or less. 65.10 (d) For health maintenance organizations, nonprofit health 65.11 services plan corporations,integrated service networks,and 65.12 community integrated service networks, the installments must be 65.13 based on an amount equal to one percent of premiums described in 65.14 paragraph (b) that are paid after December 31, 1995. 65.15 (e) For purposes of computing installments for town and 65.16 farmers' mutual insurance companies and for mutual property 65.17 casualty companies with total assets on December 31, 1989, of 65.18 $1,600,000,000 or less, the following rates apply: 65.19 (1) for all life insurance, two percent; 65.20 (2) for town and farmers' mutual insurance companies and 65.21 for mutual property and casualty companies with total assets of 65.22 $5,000,000 or less, on all other coverages, one percent; and 65.23 (3) for mutual property and casualty companies with total 65.24 assets on December 31, 1989, of $1,600,000,000 or less, on all 65.25 other coverages, 1.26 percent. 65.26 (f) Premiums under medical assistance, general assistance 65.27 medical care, the MinnesotaCare program, and the Minnesota 65.28 comprehensive health insurance plan and all payments, revenues, 65.29 and reimbursements received from the federal government for 65.30 Medicare-related coverage as defined in section 62A.31, 65.31 subdivision 3, paragraph (e), are not subject to tax under this 65.32 section. 65.33 Sec. 3. Minnesota Statutes 1996, section 256.9352, 65.34 subdivision 3, is amended to read: 65.35 Subd. 3. [FINANCIAL MANAGEMENT.] (a) The commissioner 65.36 shall manage spending for the MinnesotaCare program in a manner 66.1 that maintains a minimum reserveequal to five percent of the66.2expected cost of state premium subsidiesin accordance with 66.3 section 16A.76. The commissioner must make a quarterly 66.4 assessment of the expected expenditures for the covered services 66.5 for the remainder of the current biennium and for the following 66.6 biennium. The estimated expenditure, includingminimumthe 66.7 reserve requirements described in section 16A.76, shall be 66.8 compared to an estimate of the revenues that will be deposited 66.9 in the health care access fund. Based on this comparison, and 66.10 after consulting with the chairs of the house ways and means 66.11 committee and the senate finance committee, and the legislative 66.12 commission on health care access, the commissioner shall, as 66.13 necessary, make the adjustments specified in paragraph (b) to 66.14 ensure that expenditures remain within the limits of available 66.15 revenues for the remainder of the current biennium and for the 66.16 following biennium. The commissioner shall not hire additional 66.17 staff using appropriations from the health care access fund 66.18 until the commissioner of finance makes a determination that the 66.19 adjustments implemented under paragraph (b) are sufficient to 66.20 allow MinnesotaCare expenditures to remain within the limits of 66.21 available revenues for the remainder of the current biennium and 66.22 for the following biennium. 66.23 (b) The adjustments the commissioner shall use must be 66.24 implemented in this order: first, stop enrollment of single 66.25 adults and households without children; second, upon 45 days' 66.26 notice, stop coverage of single adults and households without 66.27 children already enrolled in the MinnesotaCare program; third, 66.28 upon 90 days' notice, decrease the premium subsidy amounts by 66.29 ten percent for families with gross annual income above 200 66.30 percent of the federal poverty guidelines; fourth, upon 90 days' 66.31 notice, decrease the premium subsidy amounts by ten percent for 66.32 families with gross annual income at or below 200 percent; and 66.33 fifth, require applicants to be uninsured for at least six 66.34 months prior to eligibility in the MinnesotaCare program. If 66.35 these measures are insufficient to limit the expenditures to the 66.36 estimated amount of revenue, the commissioner shall further 67.1 limit enrollment or decrease premium subsidies. 67.2The reserve referred to in this subdivision is appropriated67.3to the commissioner but may only be used upon approval of the67.4commissioner of finance, if estimated costs will exceed the67.5forecasted amount of available revenues after all adjustments67.6authorized under this subdivision have been made.67.7By February 1, 1995, the department of human services and67.8the department of health shall develop a plan to adjust benefit67.9levels, eligibility guidelines, or other steps necessary to67.10ensure that expenditures for the MinnesotaCare program are67.11contained within the two percent taxes imposed under section67.12295.52 and the gross premiums tax imposed under section 60A.15,67.13subdivision 1, paragraph (e), for fiscal year 1997.67.14(c) Notwithstanding paragraphs (a) and (b), the67.15commissioner shall proceed with the enrollment of single adults67.16and households without children in accordance with section67.17256.9354, subdivision 5, paragraph (a), even if the expenditures67.18do not remain within the limits of available revenues through67.19fiscal year 1997 to allow the departments of human services and67.20health to develop the plan required under paragraph (b).67.21 Sec. 4. Minnesota Statutes 1996, section 295.50, 67.22 subdivision 3, is amended to read: 67.23 Subd. 3. [GROSS REVENUES.] "Gross revenues" are total 67.24 amounts received in money or otherwise by: 67.25 (1) a hospital for patient services; 67.26 (2) a surgical center for patient services; 67.27 (3) a health care provider, other than a staff model health 67.28 carrier, for patient services; 67.29 (4) a wholesale drug distributor for sale or distribution 67.30 of legend drugs that are delivered: (i) to a Minnesota resident67.31by a wholesale drug distributor who is a nonresident pharmacy67.32directly, by common carrier, or by mail; or (ii)in Minnesota by 67.33 the wholesale drug distributor, by common carrier, or by mail, 67.34 unless the legend drugs are delivered to another wholesale drug 67.35 distributor who sells legend drugs exclusively at wholesale. 67.36 Legend drugs do not include nutritional products as defined in 68.1 Minnesota Rules, part 9505.0325; and 68.2 (5) a staff model health plan company as gross premiums for 68.3 enrollees, copayments, deductibles, coinsurance, and fees for 68.4 patient services covered under its contracts with groups and 68.5 enrollees; and68.6(6) a pharmacy for medical supplies, appliances, and68.7equipment. 68.8 Sec. 5. Minnesota Statutes 1996, section 295.50, 68.9 subdivision 4, is amended to read: 68.10 Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care 68.11 provider" means: 68.12 (1) a person whose health care occupation is regulated or 68.13 required to be regulated by the state of Minnesota furnishing 68.14 any or all of the following goods or services directly to a 68.15 patient or consumer: medical, surgical, optical, visual, 68.16 dental, hearing, nursing services, drugs,medical supplies,68.17medical appliances,or laboratory, diagnostic, or therapeutic 68.18 services, or any; 68.19 (2) a person who provides goods and services not 68.20 listedabovein clause (1) that qualify for reimbursement under 68.21 the medical assistance program provided under chapter 256B. For68.22purposes of this clause, "directly to a patient or consumer"68.23includes goods and services provided in connection with68.24independent medical examinations under section 65B.56 or other68.25examinations for purposes of litigation or insurance claims; 68.26(2)(3) a staff model health plan company;or68.27(3)(4) an ambulance service required to be licensed; or 68.28 (5) a person who sells or repairs hearing aids and related 68.29 equipment or prescription eyewear. 68.30 (b) Health care provider does not include hospitals,; 68.31 medical supplies distributors, except as specified under 68.32 paragraph (a), clause (5); nursing homes licensed under chapter 68.33 144A or licensed in any other jurisdiction,; pharmacies,; 68.34 surgical centers,; bus and taxicab transportation, or any other 68.35 providers of transportation services other than ambulance 68.36 services required to be licensed,; supervised living facilities 69.1 for persons with mental retardation or related conditions, 69.2 licensed under Minnesota Rules, parts 4665.0100 to 4665.9900,; 69.3 residential care homes licensed under chapter 144B,; board and 69.4 lodging establishments providing only custodial services that 69.5 are licensed under chapter 157 and registered under section 69.6 157.17 to provide supportive services or health supervision 69.7 services,; adult foster homes as defined in Minnesota Rules, 69.8 part 9555.5105,; day training and habilitation services for 69.9 adults with mental retardation and related conditions as defined 69.10 in section 252.41, subdivision 3,; and boarding care homes, as 69.11 defined in Minnesota Rules, part 4655.0100. 69.12 (c) For purposes of this subdivision, "directly to a 69.13 patient or consumer" includes goods and services provided in 69.14 connection with independent medical examinations under section 69.15 65B.56 or other examinations for purposes of litigation or 69.16 insurance claims. 69.17 Sec. 6. Minnesota Statutes 1996, section 295.50, 69.18 subdivision 6, is amended to read: 69.19 Subd. 6. [HOME HEALTH CARE SERVICES.] "Home health care 69.20 services" are services: 69.21 (1) defined under the state medical assistance program as 69.22 home health agency services provided by a home health agency, 69.23 personal care services and supervision of personal care 69.24 services, private duty nursing services, and waivered 69.25 services or services by home care providers required to be 69.26 licensed under chapter 144A; and 69.27 (2) provided at a recipient's residence, if the recipient 69.28 does not live in a hospital, nursing facility, as defined in 69.29 section 62A.46, subdivision 3, or intermediate care facility for 69.30 persons with mental retardation as defined in section 256B.055, 69.31 subdivision 12, paragraph (d). 69.32 Sec. 7. Minnesota Statutes 1996, section 295.50, 69.33 subdivision 7, is amended to read: 69.34 Subd. 7. [HOSPITAL.] "Hospital" means a hospital licensed 69.35 under chapter 144, or a hospital licensed by any otherstate or69.36province or territory of Canadajurisdiction. 70.1 Sec. 8. Minnesota Statutes 1996, section 295.50, 70.2 subdivision 13, is amended to read: 70.3 Subd. 13. [SURGICAL CENTER.] "Surgical center" is an 70.4 outpatient surgical center as defined in Minnesota Rules, 70.5 chapter 4675 or a similar facility located in any otherstate or70.6province or territory of Canadajurisdiction. 70.7 Sec. 9. Minnesota Statutes 1996, section 295.50, 70.8 subdivision 14, is amended to read: 70.9 Subd. 14. [WHOLESALE DRUG DISTRIBUTOR.] "Wholesale drug 70.10 distributor" means a wholesale drug distributor required to be 70.11 licensed under sections 151.42 to 151.51or a nonresident70.12pharmacy required to be registered under section 151.19. 70.13 Sec. 10. Minnesota Statutes 1996, section 295.51, 70.14 subdivision 1, is amended to read: 70.15 Subdivision 1. [BUSINESS TRANSACTIONS IN MINNESOTA.] A 70.16 hospital, surgical center,pharmacy,or health care provider is 70.17 subject to tax under sections 295.50 to 295.59 if it is 70.18 "transacting business in Minnesota." A hospital, surgical 70.19 center,pharmacy,or health care provider is transacting 70.20 business in Minnesota if it maintains contacts with or presence 70.21 in the state of Minnesota sufficient to permit taxation of gross 70.22 revenues received for patient services under the United States 70.23 Constitution. 70.24 Sec. 11. Minnesota Statutes 1996, section 295.52, 70.25 subdivision 1, is amended to read: 70.26 Subdivision 1. [HOSPITAL TAX.] A tax is imposed on each 70.27 hospital equal totwo1.50 percent of its gross revenues. 70.28 Sec. 12. Minnesota Statutes 1996, section 295.52, 70.29 subdivision 1a, is amended to read: 70.30 Subd. 1a. [SURGICAL CENTER TAX.] A tax is imposed on each 70.31 surgical center equal totwo1.50 percent of its gross revenues. 70.32 Sec. 13. Minnesota Statutes 1996, section 295.52, 70.33 subdivision 2, is amended to read: 70.34 Subd. 2. [PROVIDER TAX.] A tax is imposed on each health 70.35 care provider equal totwo1.50 percent of its gross revenues. 70.36 Sec. 14. Minnesota Statutes 1996, section 295.52, 71.1 subdivision 3, is amended to read: 71.2 Subd. 3. [WHOLESALE DRUG DISTRIBUTOR TAX.] A tax is 71.3 imposed on each wholesale drug distributor equal totwo1.50 71.4 percent of its gross revenues. 71.5 Sec. 15. Minnesota Statutes 1996, section 295.52, 71.6 subdivision 4, is amended to read: 71.7 Subd. 4. [USE TAX; PRESCRIPTION DRUGS.] A person that 71.8 receives prescription drugs for resale or use in Minnesota, 71.9 other than from a wholesale drug distributor that paid the tax 71.10 under subdivision 3, is subject to a tax equal totwo1.50 71.11 percent of the price paid. Liability for the tax is incurred 71.12 when prescription drugs are received or delivered in Minnesota 71.13 by the person. 71.14 Sec. 16. Minnesota Statutes 1996, section 295.52, is 71.15 amended by adding a subdivision to read: 71.16 Subd. 6. [HEARING AIDS AND PRESCRIPTION EYEWEAR.] The tax 71.17 liability of a person who meets the definition of a health care 71.18 provider solely because the person sells or repairs hearing aids 71.19 and related equipment or prescription eyewear is limited to the 71.20 gross revenues received from the sale or repair of these items. 71.21 Sec. 17. Minnesota Statutes 1996, section 295.53, 71.22 subdivision 1, is amended to read: 71.23 Subdivision 1. [EXEMPTIONS.] (a) The following payments 71.24 are excluded from the gross revenues subject to the hospital, 71.25 surgical center, or health care provider taxes under sections 71.26 295.50 to 295.57: 71.27 (1) payments received for services provided under the 71.28 Medicare program, including payments received from the 71.29 government, and organizations governed by sections 1833 and 1876 71.30 of title XVIII of the federal Social Security Act, United States 71.31 Code, title 42, section 1395, and enrollee deductibles, 71.32 coinsurance, and copayments, whether paid by the Medicare 71.33 enrollee or by a Medicare supplemental coverage as defined in 71.34 section 62A.011, subdivision 3, clause (10). Payments for 71.35 services not covered by Medicare are taxable; 71.36 (2) medical assistance payments including payments received 72.1 directly from the government or from a prepaid plan; 72.2 (3) payments received for home health care services; 72.3 (4) payments received from hospitals or surgical centers 72.4 for goods and services on which liability for tax is imposed 72.5 under section 295.52 or the source of funds for the payment is 72.6 exempt under clause (1), (2), (7), (8), or (10); 72.7 (5) payments received from health care providers for goods 72.8 and services on which liability for tax is imposed under this 72.9 chapter or the source of funds for the payment is exempt under 72.10 clause (1), (2), (7), (8), or (10); 72.11 (6) amounts paid for legend drugs, other than nutritional 72.12 products, to a wholesale drug distributor who is subject to tax 72.13 under section 295.52, subdivision 3, reduced by reimbursements 72.14 received for legend drugs under clauses (1), (2), (7), and (8); 72.15 (7) payments received under the general assistance medical 72.16 care program including payments received directly from the 72.17 government or from a prepaid plan; 72.18 (8) payments received for providing services under the 72.19 MinnesotaCare program including payments received directly from 72.20 the government or from a prepaid plan and enrollee deductibles, 72.21 coinsurance, and copayments. For purposes of this clause, 72.22 coinsurance means the portion of payment that the enrollee is 72.23 required to pay for the covered service; 72.24 (9) payments received by a health care provider or the 72.25 wholly owned subsidiary of a health care provider for care 72.26 provided outside Minnesota to a patient who is not domiciled in 72.27 Minnesota; 72.28 (10) payments received from the chemical dependency fund 72.29 under chapter 254B; 72.30 (11) payments received in the nature of charitable 72.31 donations that are not designated for providing patient services 72.32 to a specific individual or group; 72.33 (12) payments received for providing patient services 72.34 incurred through a formal program of health care research 72.35 conducted in conformity with federal regulations governing 72.36 research on human subjects. Payments received from patients or 73.1 from other persons paying on behalf of the patients are subject 73.2 to tax; 73.3 (13) payments received from any governmental agency for 73.4 services benefiting the public, not including payments made by 73.5 the government in its capacity as an employer or insurer; 73.6 (14) payments received for services provided by community 73.7 residential mental health facilities licensed under Minnesota 73.8 Rules, parts 9520.0500 to 9520.0690, community support programs 73.9 and family community support programs approved under Minnesota 73.10 Rules, parts 9535.1700 to 9535.1760, and community mental health 73.11 centers as defined in section 245.62, subdivision 2; 73.12 (15) government payments received by a regional treatment 73.13 center; 73.14 (16) payments received for hospice care services; 73.15 (17) payments received by a health care provider for 73.16medical supplies, appliances, and equipmenthearing aids and 73.17 related equipment or prescription eyewear delivered outside of 73.18 Minnesota; 73.19 (18) payments received by a post-secondary educational 73.20 institution from student tuition, student activity fees, health 73.21 care service fees, government appropriations, donations, or 73.22 grants. Fee for service payments and payments for extended 73.23 coverage are taxable; and 73.24 (19) payments received for services provided by: assisted 73.25 living programs and congregate housing programs. 73.26 (b) Payments received by wholesale drug distributors for 73.27prescriptionlegend drugs sold directly to veterinarians or 73.28 veterinary bulk purchasing organizations are excluded from the 73.29 gross revenues subject to the wholesale drug distributor tax 73.30 under sections 295.50 to 295.59. 73.31 Sec. 18. Minnesota Statutes 1996, section 295.53, 73.32 subdivision 3, is amended to read: 73.33 Subd. 3. [SEPARATE STATEMENT OF TAX.] A hospital, surgical 73.34 center,pharmacy,or health care provider must not state the tax 73.35 obligation under section 295.52 in a deceptive or misleading 73.36 manner. It must not separately state tax obligations on bills 74.1 provided to patients, consumers, or other payers when the amount 74.2 received for the services or goods is not subject to tax. 74.3 Pharmacies that separately state the tax obligations on 74.4 bills provided to consumers or to other payers who purchase 74.5 legend drugs may state the tax obligation astwo1.50 percent of 74.6 the wholesale price of the legend drugs. Pharmacies must not 74.7 state the tax obligation astwo1.50 percent of the retail price. 74.8 Whenever the commissioner determines that a person has 74.9 engaged in any act or practice constituting a violation of this 74.10 subdivision, the commissioner may bring an action in the name of 74.11 the state in the district court of the appropriate county to 74.12 enjoin the act or practice and to enforce compliance with this 74.13 subdivision, or the commissioner may refer the matter to the 74.14 attorney general or the county attorney of the appropriate 74.15 county. Upon a proper showing, a permanent or temporary 74.16 injunction, restraining order, or other appropriate relief must 74.17 be granted. 74.18 Sec. 19. Minnesota Statutes 1996, section 295.53, 74.19 subdivision 4, is amended to read: 74.20 Subd. 4. [DEDUCTION FOR RESEARCH.] (a) In addition to the 74.21 exemptions allowed under subdivision 1, a hospital or health 74.22 care providerwhich is exempt under section 501(c)(3) of the74.23Internal Revenue Code of 1986 or is owned and operated under74.24authority of a governmental unit,may deduct from its gross 74.25 revenues subject to the hospital or health care provider taxes 74.26 under sections 295.50 to 295.57 revenues equal to expenditures 74.27 for qualifying research conducted by an allowable research 74.28programsprogram. 74.29 (b) For purposes of this subdivision, the following 74.30 requirements apply: 74.31 (1) expendituresfor allowable research programs are the74.32direct and generalmust be for program costsfor activities74.33which are partof qualifying research conducted by an allowable 74.34 research program; 74.35 (2) an allowable research program must be a formal program 74.36 of medical and health care researchapproved by the governing75.1body of the hospital or health care provider which also includes75.2active solicitation of research funds from government and75.3private sources. Allowableconducted by an entity which is 75.4 exempt under section 501(c)(3) of the Internal Revenue Code of 75.5 1986 or is owned and operated under authority of a governmental 75.6 unit; and 75.7 (3) qualifying research must: 75.8 (i) be approved in writing by the governing body of the 75.9 hospital or health care provider which is taking the deduction 75.10 under this subdivision; 75.11(1)(ii) have as its purpose the development of new 75.12 knowledge in basic or applied science relating to the diagnosis 75.13 and treatment of conditions affecting the human body; 75.14(2)(iii) be subject to review by individuals with 75.15 expertise in the subject matter of the proposed study but who 75.16 have no financial interest in the proposed study and are not 75.17 involved in the conduct of the proposed study; and 75.18(3)(iv) be subject to review and supervision by an 75.19 institutional review board operating in conformity with federal 75.20 regulations if the research involves human subjects or an 75.21 institutional animal care and use committee operating in 75.22 conformity with federal regulations if the research involves 75.23 animal subjects. Research expenses are not exempt if the study 75.24 is a routine evaluation of health care methods or products used 75.25 in a particular setting conducted for the purpose of making a 75.26 management decision. Costs of clinical research activities paid 75.27 directly for the benefit of an individual patient are excluded 75.28 from this exemption. Basic research in fields including 75.29 biochemistry, molecular biology, and physiology are also 75.30 included if such programs are subject to a peer review process. 75.31 (c) No deduction shall be allowed under this subdivision 75.32 for any revenue received by the hospital or health care provider 75.33 in the form of a grant, gift, or otherwise, whether from a 75.34 government or nongovernment source, on which the tax liability 75.35 under section 295.52 is not imposedor for which the tax75.36liability under section 295.52 has been received from a third76.1party as provided for in section 295.582. 76.2 (d) Effective beginning with calendar year 1995, the 76.3 taxpayer shall not take the deduction under this section into 76.4 account in determining estimated tax payments or the payment 76.5 made with the annual return under section 295.55. The total 76.6 deduction allowable to all taxpayers under this section for 76.7 calendar years beginning after December 31, 1994, may not exceed 76.8 $65,000,000. To implement this limit, each qualifying hospital 76.9 and qualifying health care provider shall submit to the 76.10 commissioner by March 15 its total expenditures qualifying for 76.11 the deduction under this section for the previous calendar 76.12 year. The commissioner shall sum the total expenditures of all 76.13 taxpayers qualifying under this section for the calendar year. 76.14 If the resulting amount exceeds $65,000,000, the commissioner 76.15 shall allocate a part of the $65,000,000 deduction limit to each 76.16 qualifying hospital and health care provider in proportion to 76.17 its share of the total deductions. The commissioner shall pay a 76.18 refund to each qualifying hospital or provider equal to its 76.19 share of the deduction limit multiplied bytwo1.50 percent. 76.20 The commissioner shall pay the refund no later than May 15 of 76.21 the calendar year. 76.22 Sec. 20. Minnesota Statutes 1996, section 295.54, 76.23 subdivision 1, is amended to read: 76.24 Subdivision 1. [TAXES PAID TO ANOTHER STATE.] A hospital, 76.25 surgical center,pharmacy,or health care provider that has paid 76.26 taxes to anotherstate or province or territory of76.27Canadajurisdiction measured by gross revenues and is subject to 76.28 tax under sections 295.52 to 295.59 on the same gross revenues 76.29 is entitled to a credit for the tax legally due and paid to 76.30 anotherstate or province or territory of Canadajurisdiction to 76.31 the extent of the lesser of (1) the tax actually paid to the 76.32 otherstate or province or territory of Canadajurisdiction, or 76.33 (2) the amount of tax imposed by Minnesota on the gross revenues 76.34 subject to tax in the other taxing jurisdictions. 76.35 Sec. 21. Minnesota Statutes 1996, section 295.54, 76.36 subdivision 2, is amended to read: 77.1 Subd. 2. [PHARMACYCREDITREFUND.] A pharmacy may claima77.2quarterly creditan annual refund against the total amount of 77.3 tax, if any, the pharmacy owes during thatquartercalendar year 77.4 under section 295.52, subdivision1b, as provided in this77.5subdivision2. Thecreditrefund shall equaltwo1.50 77.6 percent of the amount paid by the pharmacy to a wholesale drug 77.7 distributor subject to tax under section 295.52, subdivision 3, 77.8 for legend drugs delivered by the pharmacy outside of Minnesota. 77.9If the amount of the credit exceeds the tax liability of the77.10pharmacy under section 295.52, subdivision 1b, the commissioner77.11shall provide the pharmacy with a refund equal to the excess77.12amount.Each qualifying pharmacy must apply for the refund on 77.13 the annual return as provided under section 295.55, subdivision 77.14 5. The refund must be claimed within one year of the due date 77.15 of the return. Interest on refunds paid under this subdivision 77.16 will begin to accrue 60 days after the date a claim for refund 77.17 is filed. For purposes of this subdivision, the date a claim is 77.18 filed is the due date of the return or the date of the actual 77.19 claim for refund, whichever is later. 77.20 Sec. 22. Minnesota Statutes 1996, section 295.55, 77.21 subdivision 2, is amended to read: 77.22 Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 77.23 Each hospital or surgical center must make estimated payments of 77.24 the taxes for the calendar year in monthly installments to the 77.25 commissioner withinten15 days after the end of the month. 77.26 (b) Estimated tax payments are not required of hospitals or 77.27 surgical centers if the tax for the calendar year is less than 77.28 $500 or if a hospital has been allowed a grant under section 77.29 144.1484, subdivision 2, for the year. 77.30 (c) Underpayment of estimated installments bear interest at 77.31 the rate specified in section 270.75, from the due date of the 77.32 payment until paid or until the due date of the annual return at 77.33 the rate specified in section 270.75. An underpayment of an 77.34 estimated installment is the difference between the amount paid 77.35 and the lesser of (1) 90 percent of one-twelfth of the tax for 77.36 the calendar year or (2) the tax for the actual gross revenues 78.1 received during the month. 78.2 Sec. 23. Minnesota Statutes 1996, section 295.582, is 78.3 amended to read: 78.4 295.582 [AUTHORITY.] 78.5 (a) A hospital, surgical center,pharmacy,or health care 78.6 provider that is subject to a tax under section 295.52, or a 78.7 pharmacy that has paid additional expense transferred under this 78.8 section by a wholesale drug distributor, may transfer additional 78.9 expense generated by section 295.52 obligations on to all 78.10 third-party contracts for the purchase of health care services 78.11 on behalf of a patient or consumer. The additional expense 78.12 transferred to the third-party purchaser must not exceedtwo78.13 1.50 percent of the gross revenues received under the 78.14 third-party contract, andtwo1.50 percent of copayments and 78.15 deductibles paid by the individual patient or consumer. The 78.16 expense must not be generated on revenues derived from payments 78.17 that are excluded from the tax under section 295.53. All 78.18 third-party purchasers of health care services including, but 78.19 not limited to, third-party purchasers regulated under chapter 78.20 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or 78.21 under section 471.61 or 471.617, must pay the transferred 78.22 expense in addition to any payments due under existing contracts 78.23 with the hospital, surgical center, pharmacy, or health care 78.24 provider, to the extent allowed under federal law. A 78.25 third-party purchaser of health care services includes, but is 78.26 not limited to, a health carrier, integrated service network,or 78.27 community integrated service network that pays for health care 78.28 services on behalf of patients or that reimburses, indemnifies, 78.29 compensates, or otherwise insures patients for health care 78.30 services. A third-party purchaser shall comply with this 78.31 section regardless of whether the third-party purchaser is a 78.32 for-profit, not-for-profit, or nonprofit entity. A wholesale 78.33 drug distributor may transfer additional expense generated by 78.34 section 295.52 obligations to entities that purchase from the 78.35 wholesaler, and the entities must pay the additional expense. 78.36 Nothing in this section limits the ability of a hospital, 79.1 surgical center, pharmacy, wholesale drug distributor, or health 79.2 care provider to recover all or part of the section 295.52 79.3 obligation by other methods, including increasing fees or 79.4 charges. 79.5 (b) Each third-party purchaser regulated under any chapter 79.6 cited in paragraph (a) shall include with its annual renewal for 79.7 certification of authority or licensure documentation indicating 79.8 compliance with paragraph (a). 79.9 (c) Any hospital, surgical center, or health care provider 79.10 subject to a tax under section 295.52 or a pharmacy that has 79.11 paid additional expense transferred under this section by a 79.12 wholesale drug distributor may file a complaint with the 79.13 commissioner responsible for regulating the third-party 79.14 purchaser if at any time the third-party purchaser fails to 79.15 comply with paragraph (a). 79.16 (d) If the commissioner responsible for regulating the 79.17 third-party purchaser finds at any time that the third-party 79.18 purchaser has not complied with paragraph (a), the commissioner 79.19 may take enforcement action against a third-party purchaser 79.20 which is subject to the commissioner's regulatory jurisdiction 79.21 and which does not allow a hospital, surgical center, pharmacy, 79.22 or provider to pass-through the tax. The commissioner may by 79.23 order fine or censure the third-party purchaser or revoke or 79.24 suspend the certificate of authority or license of the 79.25 third-party purchaser to do business in this state if the 79.26 commissioner finds that the third-party purchaser has not 79.27 complied with this section. The third-party purchaser may 79.28 appeal the commissioner's order through a contested case hearing 79.29 in accordance with chapter 14. 79.30 Sec. 24. [REPEALER.] 79.31 Minnesota Statutes 1996, sections 295.52, subdivision 1b; 79.32 and 295.53, subdivision 5, are repealed. 79.33 Sec. 25. [EFFECTIVE DATES.] 79.34 Sections 7 [295.50, s.7], 8 [295.50, s.13], 9 [295.50, 79.35 s.14], 15 [295.52, s.4], and 20 [295.54, s.1] are effective the 79.36 day following final enactment. 80.1 Section 19 [295.53, s.4] is effective for research 80.2 expenditures incurred after December 31, 1996. Section 2 80.3 [60A.15, s.1] is effective for payments, revenues, and 80.4 reimbursements received from the federal government after 80.5 December 31, 1996. 80.6 Section 22 [295.55, s.2] is effective for estimated 80.7 payments due after July 1, 1997. 80.8 Section 16 [295.52, s.6] is effective for services rendered 80.9 and revenue received after December 31, 1997. Sections 5 80.10 [295.50, s.4], 11 [295.52, s.1], 12 [295.52, s.1a], 13 [295.52, 80.11 s.2], 14 [295.52, s.3], 15 [295.52, s.4], and 21 [295.54, s.2] 80.12 are effective for gross revenues received after December 31, 80.13 1997. 80.14 Sections 4 [295.50, s.3], 6 [295.50, s.6], 10 [295.51, 80.15 s.1], 17 [295.53, s.1], and 18 [295.53, s.3] are effective 80.16 January 1, 1998. 80.17 ARTICLE 4 80.18 SENIOR CITIZEN DRUG PROGRAM 80.19 Section 1. [256.955] [SENIOR CITIZEN DRUG PROGRAM.] 80.20 Subdivision 1. [ESTABLISHMENT; ELIGIBILITY.] The 80.21 commissioner, in consultation with county social service 80.22 agencies, shall establish and administer a senior citizen drug 80.23 program. Qualified senior citizens shall be eligible for 80.24 prescription drug coverage under the program beginning January 80.25 1, 1998. Persons who initially enroll as qualified senior 80.26 citizens and whose income increases above the limits specified 80.27 in subdivision 2, paragraph (d), may continue enrollment but 80.28 must pay the full cost of coverage. 80.29 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 80.30 the following definitions apply. 80.31 (b) "Health plan" has the meaning provided in section 80.32 62Q.01, subdivision 3. 80.33 (c) "Health plan company" has the meaning provided in 80.34 section 62Q.01, subdivision 4. 80.35 (d) "Qualified senior citizen" means an individual age 65 80.36 or older who: 81.1 (1) has a household income that does not exceed 120 percent 81.2 of the federal poverty guidelines; 81.3 (2) owns assets whose value does not exceed twice the limit 81.4 used to determine eligibility under the supplemental security 81.5 income program; 81.6 (3) is enrolled in Medicare Part A and Part B; 81.7 (4) is not eligible for prescription drug coverage under a 81.8 health plan; 81.9 (5) does not have coverage for prescription drugs under a 81.10 Medicare supplement plan, as defined in sections 62A.31 to 81.11 62A.44, or policies, contracts, or certificates that supplement 81.12 Medicare issued by health maintenance organizations or those 81.13 policies, contracts, or certificates governed by section 1833 or 81.14 1876 of the federal Social Security Act, United States Code, 81.15 title 42, section 1395, et seq., as amended; 81.16 (6) is not eligible for medical assistance without a 81.17 spenddown, general assistance medical care without a spenddown, 81.18 or MinnesotaCare; 81.19 (7) has not had coverage described in clauses (4) and (5) 81.20 for at least four months prior to application for the program; 81.21 and 81.22 (8) is a permanent resident of Minnesota as defined in 81.23 section 256.9359. 81.24 Subd. 3. [PRESCRIPTION DRUG COVERAGE.] (a) Coverage under 81.25 the program is limited to prescription drugs covered under the 81.26 medical assistance program, except as provided in paragraph (b). 81.27 (b) As of the date the commissioner determines that, in a 81.28 given county, at least two health plan companies offer policies, 81.29 contracts, or certificates governed by section 1833 or 1876 of 81.30 the federal Social Security Act that provide a prescription drug 81.31 benefit as part of their standard coverage for Medicare 81.32 enrollees, eligibility for prescription drug coverage under the 81.33 senior drug program for enrollees who are residents of the 81.34 county shall be limited to coverage of prescription drug costs 81.35 in excess of any annual expenditure limit for enrollees of the 81.36 health plan companies. 82.1 Subd. 4. [APPLICATION PROCEDURES AND 82.2 ADMINISTRATION.] Applications and information on the program 82.3 must be made available at county social service agencies, health 82.4 care provider offices, and agencies and organizations serving 82.5 senior citizens. Senior citizens shall submit applications and 82.6 any information specified by the commissioner as being necessary 82.7 to verify eligibility directly to the county social service 82.8 agencies. County social service agencies shall determine an 82.9 applicant's eligibility for the program within 30 days from the 82.10 date the application is received. 82.11 Subd. 5. [DRUG UTILIZATION REVIEW PROGRAM.] The 82.12 commissioner shall implement a drug utilization review program 82.13 for program enrollees. The commissioner shall establish an 82.14 advisory committee to assist the commissioner in developing 82.15 criteria for the utilization review program. The committee 82.16 shall be comprised of an equal number of physicians and 82.17 pharmacists with expertise in treating elderly persons, and 82.18 shall use a consensus process to develop clinically relevant 82.19 standards for drug utilization review designed to improve health 82.20 care outcomes for senior citizens. The advisory committee is 82.21 governed by section 15.059. 82.22 Subd. 6. [PHARMACY ENROLLMENT AND 82.23 REIMBURSEMENT.] Pharmacies may apply to the commissioner to 82.24 participate in the senior citizen drug program. The 82.25 commissioner shall reimburse participating pharmacies for drug 82.26 and dispensing costs at the MinnesotaCare reimbursement level, 82.27 minus the copayment required under subdivision 7. 82.28 Subd. 7. [PREMIUM PAYMENTS AND COST SHARING.] (a) Program 82.29 enrollees shall pay premiums according to the sliding scale 82.30 established under section 256.9358. 82.31 (b) Program enrollees shall pay a copayment of $10 for each 82.32 prescription. 82.33 (c) Program enrollees must satisfy $200 annual deductible, 82.34 based upon expenditures for prescription drugs. 82.35 (d) The commissioner shall include payments or expenditures 82.36 by an enrollee under this subdivision as expenses for medical 83.1 care when determining an enrollee's eligibility for medical 83.2 assistance or general assistance medical care based upon a 83.3 spenddown. 83.4 Subd. 8. [REPORT.] The commissioner shall submit to the 83.5 legislature by December 1, 1998, a report on the senior citizen 83.6 drug program. The report must include demographic information 83.7 on enrollees, per-prescription expenditures, total program 83.8 expenditures, hospital and nursing home costs avoided by 83.9 enrollees, any savings to medical assistance and Medicare 83.10 resulting from the provision of prescription drug coverage under 83.11 Medicare by health maintenance organizations, other public and 83.12 private options for drug assistance to the senior population, 83.13 and any recommendations for changes in the senior drug program. 83.14 Subd. 9. [SUNSET.] The commissioner shall have no 83.15 authority under this section and section 256B.04, subdivision 83.16 19, to pay claims for prescription drugs, accept premiums from 83.17 qualified senior citizens, or impose rebates on manufacturers 83.18 for drugs dispensed to qualified senior citizens, on or after 83.19 the effective date of any waiver approved by the federal Health 83.20 Care Financing Administration that would allow the commissioner 83.21 to provide prescription drug coverage to Medicare beneficiaries 83.22 whose income is less than 150 percent of the federal poverty 83.23 guidelines. 83.24 Sec. 2. Minnesota Statutes 1996, section 256B.04, is 83.25 amended by adding a subdivision to read: 83.26 Subd. 19. [PRESCRIPTION DRUG CONTRACT REQUIREMENT.] The 83.27 commissioner shall include, as part of any medical assistance 83.28 prescription drug contract with a drug manufacturer, a 83.29 requirement that the drug manufacturer provide for payment of a 83.30 15.1 percent rebate on each unit of drug paid for by the senior 83.31 citizen drug program under section 256.955 on behalf of a 83.32 qualified senior citizen enrolled in the program, after 83.33 satisfaction of any deductible and copayment requirements. 83.34 ARTICLE 5 83.35 MINNESOTA COMPREHENSIVE HEALTH ASSOCIATION 83.36 Section 1. Minnesota Statutes 1996, section 62E.02, 84.1 subdivision 13, is amended to read: 84.2 Subd. 13. [ELIGIBLE PERSON.] (a) "Eligible person" means 84.3 an individual who: 84.4 (1) is currently and has been a resident of Minnesota for 84.5 the six months immediately preceding the date of receipt by the 84.6 association or its writing carrier of a completed certificate of 84.7 eligibilityand who; 84.8 (2) meets the enrollment requirements of section 62E.14; 84.9 and 84.10 (3) is not otherwise ineligible under this subdivision. 84.11 (b) No individual is eligible for coverage under a 84.12 qualified or a Medicare supplement plan issued by the 84.13 association for whom a premium is paid or reimbursed by a 84.14 federal, state, or local agency as of the first day of any term 84.15 for which a premium amount is paid or reimbursed. 84.16 Sec. 2. Minnesota Statutes 1996, section 62E.02, 84.17 subdivision 18, is amended to read: 84.18 Subd. 18. [WRITING CARRIER.] "Writing carrier" means the 84.19 insurer or insurers, health maintenance organization or 84.20 organizations, integrated service network or networks,and84.21 community integrated service network or networks, or other 84.22 entity selected by the association and approved by the 84.23 commissioner to administer the comprehensive health insurance 84.24 plan. 84.25 Sec. 3. Minnesota Statutes 1996, section 62E.11, is 84.26 amended by adding a subdivision to read: 84.27 Subd. 13. [REPORT TO LEGISLATURE.] The commissioner shall 84.28 report to the legislature annually on the costs incurred by the 84.29 association in providing coverage to individuals enrolled in 84.30 medical assistance under chapter 256B or general assistance 84.31 medical care under chapter 256D. The report shall be provided 84.32 to the chairs of the house committee on health and human 84.33 services and the senate committee on health and family security 84.34 no later than January 15 of each year. The report's contents 84.35 shall be determined by the commissioner, in consultation with 84.36 the department of human services and the association. At a 85.1 minimum, the report shall provide a breakdown, for the 85.2 association in aggregate and for each category of individuals 85.3 enrolled in medical assistance under chapter 256B or general 85.4 assistance medical care under chapter 256D, of: 85.5 (1) administrative costs; 85.6 (2) claims costs; 85.7 (3) premiums paid; 85.8 (4) deductibles, coinsurance, and copayments paid; 85.9 (5) state payments to providers satisfying deductibles, 85.10 coinsurance, or copayments required to be paid under a qualified 85.11 or Medicare supplement plan issued by the association; 85.12 (6) the number of individuals; 85.13 (7) losses; and 85.14 (8) appropriated state funds. 85.15 The commissioner of human services, the association, and 85.16 the writing carrier shall cooperate with the commissioner and 85.17 provide all information that the commissioner determines is 85.18 necessary to prepare this report. 85.19 Sec. 4. Minnesota Statutes 1996, section 62E.13, 85.20 subdivision 2, is amended to read: 85.21 Subd. 2. The association may select policies and 85.22 contracts, or parts thereof, submitted by a member or members of 85.23 the association, or by the association or others, to develop 85.24 specifications for bids from anymembersentity whichwish85.25 wishes to be selected as a writing carrier to administer the 85.26 state plan. The selection of the writing carrier shall be based 85.27 upon criteriaincludingestablished by the board of directors of 85.28 the association and approved by the commissioner. The criteria 85.29 shall outline specific qualifications that an entity must 85.30 satisfy in order to be selected and, at a minimum, shall include 85.31 themember'sentity's proven ability to handle large group 85.32 accident and health insurance cases, efficient claim paying 85.33 capacity, and the estimate of total charges for administering 85.34 the plan. The association may select separate writing carriers 85.35 for the two types of qualified plans, the qualified medicare 85.36 supplement plan, and the health maintenance organization 86.1 contract. 86.2 Sec. 5. Minnesota Statutes 1996, section 256B.056, 86.3 subdivision 8, is amended to read: 86.4 Subd. 8. [COOPERATION.] To be eligible for medical 86.5 assistance, applicants and recipients must cooperate with the 86.6 state and local agency to identify potentially liable 86.7 third-party payers and assist the state in obtaining third party 86.8 payments, unless good cause for noncooperation is determined 86.9 according to Code of Federal Regulations, title 42, part 86.10 433.147. "Cooperation" includes identifying any third party who 86.11 may be liable for care and services provided under this chapter 86.12 to the applicant, recipient, or any other family member for whom 86.13 application is made and providing relevant information to assist 86.14 the state in pursuing a potentially liable third party. 86.15 Cooperation also includes providing information about a group 86.16 health plan for which the person may be eligible and if the plan 86.17 is determined cost-effective by the state agency and premiums 86.18 are paid by the local agency or there is no cost to the 86.19 recipient, they must enroll or remain enrolled with the group. 86.20 For purposes of this subdivision, coverage provided by the 86.21 Minnesota comprehensive health association under chapter 62E 86.22 shall not be considered group health plan coverage or 86.23 cost-effective by the state and local agency. Cost-effective 86.24 insurance premiums approved for payment by the state agency and 86.25 paid by the local agency are eligible for reimbursement 86.26 according to section 256B.19. 86.27 Sec. 6. Minnesota Statutes 1996, section 256B.0625, 86.28 subdivision 15, is amended to read: 86.29 Subd. 15. [HEALTH PLAN PREMIUMS AND COPAYMENTS.] (a) 86.30 Medical assistance covers health care prepayment plan premiums, 86.31 insurance premiums, and copayments if determined to be 86.32 cost-effective by the commissioner. For purposes of obtaining 86.33 Medicare part A and part B, and copayments, expenditures may be 86.34 made even if federal funding is not available. 86.35 (b) Effective for all premiums due on or after June 30, 86.36 1997, medical assistance does not cover premiums that a 87.1 recipient is required to pay under a qualified or Medicare 87.2 supplement plan issued by the Minnesota comprehensive health 87.3 association. 87.4 Sec. 7. Minnesota Statutes 1996, section 256D.03, 87.5 subdivision 3b, is amended to read: 87.6 Subd. 3b. [COOPERATION.] (a) General assistance or general 87.7 assistance medical care applicants and recipients must cooperate 87.8 with the state and local agency to identify potentially liable 87.9 third-party payors and assist the state in obtaining third-party 87.10 payments. Cooperation includes identifying any third party who 87.11 may be liable for care and services provided under this chapter 87.12 to the applicant, recipient, or any other family member for whom 87.13 application is made and providing relevant information to assist 87.14 the state in pursuing a potentially liable third party. General 87.15 assistance medical care applicants and recipients must cooperate 87.16 by providing information about any group health plan in which 87.17 they may be eligible to enroll. They must cooperate with the 87.18 state and local agency in determining if the plan is 87.19 cost-effective. For purposes of this subdivision, coverage 87.20 provided by the Minnesota comprehensive health association under 87.21 chapter 62E shall not be considered group health plan coverage 87.22 or cost-effective by the state and local agency. If the plan is 87.23 determined cost-effective and the premium will be paid by the 87.24 state or local agency or is available at no cost to the person, 87.25 they must enroll or remain enrolled in the group health plan. 87.26 Cost-effective insurance premiums approved for payment by the 87.27 state agency and paid by the local agency are eligible for 87.28 reimbursement according to subdivision 6. 87.29 (b) Effective for all premiums due on or after June 30, 87.30 1997, general assistance medical care does not cover premiums 87.31 that a recipient is required to pay under a qualified or 87.32 Medicare supplement plan issued by the Minnesota comprehensive 87.33 health association. 87.34 Sec. 8. Minnesota Statutes 1996, section 295.58, is 87.35 amended to read: 87.36 295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.] 88.1 (a) The commissioner shall deposit all revenues, including 88.2 penalties and interest, derived from the taxes imposed by 88.3 sections 295.50 to 295.57and from the insurance premiums tax on88.4health maintenance organizations, community integrated service88.5networks, integrated service networks, and nonprofit health88.6service plan corporationsin the health care access fund in the 88.7 state treasury. Refunds of overpayments must be paid from the 88.8 health care access fund in the state treasury. There is 88.9 annually appropriated from the health care access fund to the 88.10 commissioner of revenue the amount necessary to make any refunds 88.11 required under section 295.54. 88.12 (b) The revenues, including penalties and interest, derived 88.13 from the tax on insurance premiums imposed by section 60A.15 on 88.14 health maintenance organizations, community integrated service 88.15 networks, and nonprofit health service plan corporations must be 88.16 deposited in the general fund and are annually appropriated to 88.17 the Minnesota comprehensive health association to offset 88.18 assessments made to subsidize the costs of the Minnesota 88.19 comprehensive insurance plan established under chapter 62E. 88.20 Sec. 9. [EFFECTIVE DATE.] 88.21 Sections 1 to 7 are effective the day following final 88.22 enactment. Section 8 is effective for revenues attributable to 88.23 taxes due after June 30, 1997. 88.24 ARTICLE 6 88.25 RURAL HEALTH CARE 88.26 Section 1. Minnesota Statutes 1996, section 62Q.19, 88.27 subdivision 1, is amended to read: 88.28 Subdivision 1. [DESIGNATION.] The commissioner shall 88.29 designate essential community providers. The criteria for 88.30 essential community provider designation shall be the following: 88.31 (1) a demonstrated ability to integrate applicable 88.32 supportive and stabilizing services with medical care for 88.33 uninsured persons and high-risk and special needs populations as 88.34 defined in section 62Q.07, subdivision 2, paragraph (e), 88.35 underserved, and other special needs populations; and 88.36 (2) a commitment to serve low-income and underserved 89.1 populations by meeting the following requirements: 89.2 (i) has nonprofit status in accordance with chapter 317A; 89.3 (ii) has tax exempt status in accordance with the Internal 89.4 Revenue Service Code, section 501(c)(3); 89.5 (iii) charges for services on a sliding fee schedule based 89.6 on current poverty income guidelines; and 89.7 (iv) does not restrict access or services because of a 89.8 client's financial limitation; 89.9 (3) status as a local government unit as defined in section 89.10 62D.02, subdivision 11, a hospital district created or 89.11 reorganized under sections 447.31 to 447.37, an Indian tribal 89.12 government, an Indian health service unit, or a community health 89.13 board as defined in chapter 145A;or89.14 (4) status as a former state hospital that specializes in 89.15 the treatment of cerebral palsy, spina bifida, epilepsy, closed 89.16 head injuries, specialized orthopedic problems, and other 89.17 disabling conditions; or 89.18 (5) status as a rural hospital that qualifies for a sole 89.19 community hospital financial assistance grant under section 89.20 144.1484, subdivision 1. 89.21 Prior to designation, the commissioner shall publish the 89.22 names of all applicants in the State Register. The public shall 89.23 have 30 days from the date of publication to submit written 89.24 comments to the commissioner on the application. No designation 89.25 shall be made by the commissioner until the 30-day period has 89.26 expired. 89.27 The commissioner may designate an eligible provider as an 89.28 essential community provider for all the services offered by 89.29 that provider or for specific services designated by the 89.30 commissioner. 89.31 For the purpose of this subdivision, supportive and 89.32 stabilizing services include at a minimum, transportation, child 89.33 care, cultural, and linguistic services where appropriate. 89.34 Sec. 2. Minnesota Statutes 1996, section 136A.1355, 89.35 subdivision 1, is amended to read: 89.36 Subdivision 1. [CREATION OF ACCOUNT.] A rural physician 90.1 education account is established in the health care access 90.2 fund. The higher education services office shall use money from 90.3 the account to establish a loan forgiveness program for 90.4 medicalstudentsresidents agreeing to practice in designated 90.5 rural areas, as defined by the commissioner. 90.6 Sec. 3. Minnesota Statutes 1996, section 136A.1355, 90.7 subdivision 2, is amended to read: 90.8 Subd. 2. [ELIGIBILITY.] To be eligible to participate in 90.9 the program, a prospective physician must submit a letter of 90.10 interest to the higher education services office. Astudent or90.11 resident who is accepted must sign a contract to agree to serve 90.12 at least three of the first five years following residency in a 90.13 designated rural area. 90.14 Sec. 4. Minnesota Statutes 1996, section 136A.1355, 90.15 subdivision 3, is amended to read: 90.16 Subd. 3. [LOAN FORGIVENESS.] For fiscal years beginning on 90.17 and after July 1, 1995, the higher education services office may 90.18 accept up tofour applicants who are fourth year medical90.19students, three12 applicants who are medical residents, four 90.20 applicants who are pediatric residents, andfoursix applicants 90.21 who are family practice residents, andone applicant who is an90.22 two applicants who are internal medicineresidentresidents, per 90.23 fiscal year for participation in the loan forgiveness program. 90.24 If the higher education services office does not receive enough 90.25 applicants per fiscal year to fill the number of residents in 90.26 the specific areas of practice, the resident applicants may be 90.27 from any area of practice. Theeight12 resident applicants may 90.28 be in any year of training; however, priority must be given to 90.29 the following categories of residents in descending order: 90.30 third year residents, second year residents, and first year 90.31 residents. Applicants are responsible for securing their own 90.32 loans. Applicants chosen to participate in the loan forgiveness 90.33 program may designate for each year of medical school, up to a 90.34 maximum of four years, an agreed amount, not to exceed $10,000, 90.35 as a qualified loan. For each year that a participant serves as 90.36 a physician in a designated rural area, up to a maximum of four 91.1 years, the higher education services office shall annually pay 91.2 an amount equal to one year of qualified loans. Participants 91.3 who move their practice from one designated rural area to 91.4 another remain eligible for loan repayment. In addition, if a 91.5 resident participating in the loan forgiveness program serves at 91.6 least four weeks during a year of residency substituting for a 91.7 rural physician to temporarily relieve the rural physician of 91.8 rural practice commitments to enable the rural physician to take 91.9 a vacation, engage in activities outside the practice area, or 91.10 otherwise be relieved of rural practice commitments, the 91.11 participating resident may designate up to an additional $2,000, 91.12 above the $10,000 maximum, for each year of residency during 91.13 which the resident substitutes for a rural physician for four or 91.14 more weeks. 91.15 Sec. 5. Minnesota Statutes 1996, section 136A.1355, 91.16 subdivision 5, is amended to read: 91.17 Subd. 5. [LOAN FORGIVENESS; UNDERSERVED URBAN 91.18 COMMUNITIES.] For fiscal years beginning on and after July 1, 91.19 1995, the higher education services office may accept up to four 91.20 applicants who areeither fourth year medical students, or91.21 residents in family practice, pediatrics, or internal medicine 91.22 per fiscal year for participation in the urban primary care 91.23 physician loan forgiveness program. The resident applicants may 91.24 be in any year of residency training; however, priority will be 91.25 given to the following categories of residents in descending 91.26 order: third year residents, second year residents, and first 91.27 year residents. If the higher education services office does 91.28 not receive enough qualified applicants per fiscal year to fill 91.29 the number of slots for urban underserved communities, the slots 91.30 may be allocated tostudents orresidents who have applied for 91.31 the rural physician loan forgiveness program in subdivision 1. 91.32 Applicants are responsible for securing their own loans. For 91.33 purposes of this provision, "qualifying educational loans" are 91.34 government and commercial loans for actual costs paid for 91.35 tuition, reasonable education expenses, and reasonable living 91.36 expenses related to the graduate or undergraduate education of a 92.1 health care professional. Applicants chosen to participate in 92.2 the loan forgiveness program may designate for each year of 92.3 medical school, up to a maximum of four years, an agreed amount, 92.4 not to exceed $10,000, as a qualified loan. For each year that 92.5 a participant serves as a physician in a designated underserved 92.6 urban area, up to a maximum of four years, the higher education 92.7 services office shall annually pay an amount equal to one year 92.8 of qualified loans. Participants who move their practice from 92.9 one designated underserved urban community to another remain 92.10 eligible for loan repayment. 92.11 Sec. 6. Minnesota Statutes 1996, section 144.1465, is 92.12 amended to read: 92.13 144.1465 [FINDING AND PURPOSE.] 92.14 The legislature finds that rural hospitals are an integral 92.15 part of the health care delivery system and are fundamental to 92.16 the development of a sound rural economy. The legislature 92.17 further finds that access to rural health care must be assured 92.18 to all Minnesota residents. The rural health care system is 92.19 undergoing a restructuring that threatens to jeopardize access 92.20 in rural areas to quality health services. To assure continued 92.21 rural health care access the legislature proposes to establish a 92.22 grant program to assist rural hospitals and their communities 92.23 with the development of strategic plans and transition projects,92.24provide subsidies for geographically isolated hospitals facing92.25closure,that encourage and maintain the development of rural 92.26 health networks, support cooperative efforts among hospitals to 92.27 restructure the delivery of health care services towards 92.28 outpatient care, develop telemedicine relationships, encourage 92.29 the appropriate consolidation of rural hospital emergency 92.30 services, andexamine the problem ofsupport efforts at 92.31 recruitment and retention of rural physicians, nurses, and other 92.32 allied health care professionals. The legislature also proposes 92.33 to establish a grant program to provide subsidies for 92.34 geographically isolated rural hospitals facing closure. 92.35 Sec. 7. Minnesota Statutes 1996, section 144.147, 92.36 subdivision 1, is amended to read: 93.1 Subdivision 1. [DEFINITION.] "Eligible rural hospital" 93.2 means any nonfederal, general acute care hospital that: 93.3 (1) is either located in a rural area, as defined in the 93.4 federal Medicare regulations, Code of Federal Regulations, title 93.5 42, section 405.1041, or located in a community with a 93.6 population of less than 5,000, according to United States Census 93.7 Bureau statistics, outside the seven-county metropolitan area; 93.8 (2) has10050 or fewer beds; and 93.9 (3) is not for profit; and93.10(4) has not been awarded a grant under the federal rural93.11health transition grant program, which would be received93.12concurrently with any portion of the grant period for this93.13program. 93.14 Sec. 8. Minnesota Statutes 1996, section 144.147, 93.15 subdivision 2, is amended to read: 93.16 Subd. 2. [GRANTS AUTHORIZED.] The commissioner shall 93.17 establish a program of grants to assist eligible rural 93.18 hospitals. The commissioner shall award grants to hospitals and 93.19 communities for the purposes set forth in paragraphs (a) and (b). 93.20 (a) Grants may be used by hospitals and their communities 93.21 to develop strategic plans for preserving or enhancing access to 93.22 health services. At a minimum, a strategic plan must consist of: 93.23 (1) a needs assessment to determine what health services 93.24 are needed and desired by the community. The assessment must 93.25 include interviews with or surveys of area health professionals, 93.26 local community leaders, and public hearings; 93.27 (2) an assessment of the feasibility of providing needed 93.28 health services that identifies priorities and timeliness for 93.29 potential changes; and 93.30 (3) an implementation plan. 93.31 The strategic plan must be developed by a committee that 93.32 includes representatives from the hospital, local public health 93.33 agencies, other health providers, and consumers from the 93.34 community. 93.35 (b) The grants may also be used by eligible rural hospitals 93.36 that have developed strategic plans to implement transition 94.1 projects to modify the type and extent of services provided, in 94.2 order to reflect the needs of that plan. Grants may be used by 94.3 hospitals under this paragraph to develop hospital-based 94.4 physician practices that integrate hospital and existing medical 94.5 practice facilities that agree to transfer their practices, 94.6 equipment, staffing, and administration to the hospital. The 94.7 grants may also be used by the hospital to establish a health 94.8 provider cooperative, a telemedicine system, or a rural health 94.9 care system. Not more than one-third of any grant shall be used 94.10 to offset losses incurred by physicians agreeing to transfer 94.11 their practices to hospitals. 94.12 Sec. 9. Minnesota Statutes 1996, section 144.147, 94.13 subdivision 3, is amended to read: 94.14 Subd. 3. [CONSIDERATION OF GRANTS.] In determining which 94.15 hospitals will receive grants under this section, the 94.16 commissioner shall take into account: 94.17 (1) improving community access to hospital or health 94.18 services; 94.19 (2) changes in service populations; 94.20 (3) demand for ambulatory and emergency services; 94.21 (4) the extent that the health needs of the community are 94.22 not currently being met by other providers in the service area; 94.23 (5) the need to recruit and retain health professionals; 94.24 (6) theinvolvement andextent of community supportof the94.25community and local health care providers;and94.26 (7) the coordination with local community organizations, 94.27 such as community development and public health agencies; and 94.28 (8) the financial condition of the hospital. 94.29 Sec. 10. Minnesota Statutes 1996, section 144.147, 94.30 subdivision 4, is amended to read: 94.31 Subd. 4. [ALLOCATION OF GRANTS.] (a) Eligible hospitals 94.32 must apply to the commissioner no later than September 1 of each 94.33 fiscal year for grants awarded for that fiscal year. A grant 94.34 may be awarded upon signing of a grant contract. 94.35 (b) The commissioner must make a final decision on the 94.36 funding of each application within 60 days of the deadline for 95.1 receiving applications. 95.2 (c) Each relevant community health board has 30 days in 95.3 which to review and comment to the commissioner on grant 95.4 applications from hospitals in their community health service 95.5 area. 95.6 (d) In determining which hospitals will receive grants 95.7 under this section, the commissioner shall consider the 95.8 following factors: 95.9 (1) Description of the problem, description of the project, 95.10 and the likelihood of successful outcome of the project. The 95.11 applicant must explain clearly the nature of the health services 95.12 problems in their service area, how the grant funds will be 95.13 used, what will be accomplished, and the results expected. The 95.14 applicant should describe achievable objectives, a timetable, 95.15 and roles and capabilities of responsible individuals and 95.16 organizations. 95.17 (2) The extent of community support for the hospital and 95.18 this proposed project. The applicant should demonstrate support 95.19 for the hospital and for the proposed project from other local 95.20 health service providers and from local community and government 95.21 leaders. Evidence of such support may include past commitments 95.22 of financial support from local individuals, organizations, or 95.23 government entities; and commitment of financial support, 95.24 in-kind services or cash, for this project. 95.25 (3) The comments, if any, resulting from a review of the 95.26 application by the community health board in whose community 95.27 health service area the hospital is located. 95.28 (e) In evaluating applications, the commissioner shall 95.29 score each application on a 100 point scale, assigning the 95.30 maximum of 70 points for an applicant's understanding of the 95.31 problem, description of the project, and likelihood of 95.32 successful outcome of the project; and a maximum of 30 points 95.33 for the extent of community support for the hospital and this 95.34 project. The commissioner may also take into account other 95.35 relevant factors. 95.36 (f) A grant to a hospital, including hospitals that submit 96.1 applications as consortia, may not exceed$37,500$50,000 a year 96.2 and may not exceed a term of two years. Prior to the receipt of 96.3 any grant, the hospital must certify to the commissioner that at 96.4 least one-half of the amount, which may include in-kind 96.5 services, is available for the same purposes from nonstate 96.6 sources. A hospital receiving a grant under this section may 96.7 use the grant for any expenses incurred in the development of 96.8 strategic plans or the implementation of transition projects 96.9 with respect to which the grant is made. Project grants may not 96.10 be used to retire debt incurred with respect to any capital 96.11 expenditure made prior to the date on which the project is 96.12 initiated. 96.13 (g) The commissioner may adopt rules to implement this 96.14 section. 96.15 Sec. 11. [144.1475] [RURAL HOSPITAL DEMONSTRATION 96.16 PROJECT.] 96.17 Subdivision 1. [LEGISLATIVE PURPOSE.] The legislature 96.18 finds that some rural hospitals in close proximity to other like 96.19 hospitals are at risk of either closing or reducing operations. 96.20 The legislature further finds that it is in the interest of all 96.21 Minnesotans to move toward an efficient and cooperative rural 96.22 health care delivery system. Therefore, the legislature 96.23 believes it is important to implement a demonstration project to 96.24 assist rural hospitals in consolidating or cooperating with one 96.25 another. 96.26 Subd. 2. [ESTABLISHMENT.] The commissioner of health, for 96.27 the biennium ending June 30, 1999, shall establish at least 96.28 three demonstration projects per fiscal year to assist rural 96.29 hospitals in the planning and implementation process to either 96.30 consolidate or cooperate with another existing hospital in its 96.31 service area to provide better quality health care to its 96.32 community. A demonstration project must include at least two 96.33 eligible hospitals. For purposes of this section, an "eligible 96.34 hospital" means a hospital that: 96.35 (1) is located outside the seven-county metropolitan area; 96.36 (2) has 50 or fewer licensed beds; and 97.1 (3) is located within a 25-mile radius of another hospital. 97.2 At least one of the eligible hospitals in a demonstration 97.3 project must have had a negative operating margin during one of 97.4 the two years prior to application. 97.5 Subd. 3. [APPLICATION.] (a) An eligible hospital seeking 97.6 to be a participant in a demonstration project must submit an 97.7 application to the commissioner of health detailing the 97.8 hospital's efforts to consolidate health care delivery in its 97.9 service area, cooperate with another hospital in the delivery of 97.10 health care, or both consolidate and cooperate. Applications 97.11 must be submitted by October 15 of each fiscal year for grants 97.12 awarded for that fiscal year. 97.13 (b) Applications must: 97.14 (1) describe the problem that the proposed consolidation or 97.15 cooperation will address, the consolidation or cooperation 97.16 project, how the grant funds will be used, what will be 97.17 accomplished, and the results expected; 97.18 (2) describe achievable objectives, a time table, and the 97.19 roles and capabilities of responsible individuals and 97.20 organizations; 97.21 (3) include written commitments from the applicant hospital 97.22 and at least one other hospital that will participate in the 97.23 consolidation or cooperation demonstration project, that specify 97.24 the activities the organization will undertake during the 97.25 project, the resources the organization will contribute to the 97.26 demonstration project, and the expected role and nature of the 97.27 organization's involvement in proposed consolidation or 97.28 cooperation activities; and 97.29 (4) provide evidence of support for the proposed project 97.30 from other local health service providers and from local 97.31 community and government leaders. 97.32 Subd. 4. [GRANTS.] The commissioner of health shall 97.33 allocate a grant of up to $100,000 to the highest scoring 97.34 applicants each year until available funding is expended. 97.35 Grants may be used by eligible hospitals to: 97.36 (1) conduct consolidation or cooperation negotiations; 98.1 (2) develop consolidation or cooperation plans, including 98.2 financial plans and architectural designs; 98.3 (3) seek community input and conduct community education on 98.4 proposed or planned consolidations or cooperative activities; 98.5 and 98.6 (4) implement consolidation or cooperation plans. 98.7 Subd. 5. [CONSIDERATION OF GRANTS.] In evaluating 98.8 applications, the commissioner shall score each application on a 98.9 100-point scale, assigning: a maximum of 40 points for an 98.10 applicant's understanding of the problem, description of the 98.11 project, and likelihood of successful outcome of the project; a 98.12 maximum of 30 points for explicit and unequivocal written 98.13 commitments from organizations participating in the project; a 98.14 maximum of 20 points for matching funds or in-kind services 98.15 committed by the applicant or others to the project; and a 98.16 maximum of 10 points for the extent of community support for the 98.17 project. The commissioner shall consider the comments, if any, 98.18 resulting from a review of the application by the community 98.19 health board in whose community health service area the 98.20 applicant is located. The commissioner may also take into 98.21 account other relevant factors. 98.22 Subd. 6. [EVALUATION.] The commissioner of health shall 98.23 evaluate the overall effectiveness of the demonstration projects 98.24 and report to the legislature by September 1, 2000. The 98.25 commissioner may collect, from the hospitals receiving grants, 98.26 any information necessary to evaluate the demonstration project. 98.27 Sec. 12. [144.148] [RURAL HOSPITAL CAPITAL IMPROVEMENT 98.28 GRANT AND LOAN PROGRAM.] 98.29 Subdivision 1. [PURPOSE.] The legislature finds that 98.30 Minnesota's rural hospital community is in need of modernization 98.31 to continue providing quality health care to Minnesota 98.32 residents. Furthermore, funds needed for modernization projects 98.33 to update, remodel, and replace aging facilities and equipment 98.34 are scarce due to reductions in reimbursements from both public 98.35 and private payers. Therefore, the legislature finds that it is 98.36 imperative to establish a rural hospital capital improvement 99.1 grant and loan program to ensure all health care delivered in 99.2 Minnesota is of the highest quality. 99.3 Subd. 2. [DEFINITION.] (a) For purposes of this section, 99.4 the following definitions apply. 99.5 (b) "Eligible rural hospital" means a hospital that: 99.6 (1) is located outside the seven-county metropolitan area; 99.7 (2) has 50 or fewer licensed hospital beds with a net 99.8 hospital operating margin not greater than two percent in the 99.9 two fiscal years prior to application; and 99.10 (3) is 25 miles or more from another hospital. 99.11 (c) "Eligible project" means a modernization project to 99.12 update, remodel, or replace aging hospital facilities and 99.13 equipment necessary to maintain the operations of a hospital. 99.14 Subd. 3. [PROGRAM.] The commissioner of health shall award 99.15 rural hospital capital improvement grants or loans to eligible 99.16 rural hospitals. A grant or loan shall not exceed $1,500,000 99.17 per hospital. Grants or loans shall be interest free. An 99.18 eligible rural hospital may apply the funds retroactively to 99.19 capital improvements made during the two fiscal years preceding 99.20 the fiscal year in which the grant or loan was received, 99.21 provided the hospital met the eligibility criteria during that 99.22 time period. 99.23 Subd. 4. [APPLICATIONS.] Eligible hospitals seeking a 99.24 grant or loan shall apply to the commissioner. Applications 99.25 must include a description of the problem that the proposed 99.26 project will address, a description of the project including 99.27 construction and remodeling drawings or specifications, sources 99.28 of funds for the project, uses of funds for the project, the 99.29 results expected, and a plan to maintain or operate any facility 99.30 or equipment included in the project. The applicant must 99.31 describe achievable objectives, a timetable, and roles and 99.32 capabilities of responsible individuals and organizations. 99.33 Applicants must submit to the commissioner evidence that 99.34 competitive bidding was used to select contractors for the 99.35 project. 99.36 Subd. 5. [CONSIDERATION OF APPLICATIONS.] The commissioner 100.1 shall review each application to determine whether or not the 100.2 hospital's application is complete and whether the hospital and 100.3 the project are eligible for a grant or loan. In evaluating 100.4 applications, the commissioner shall score each application on a 100.5 100-point scale, assigning: a maximum of 40 points for an 100.6 applicant's clarity and thoroughness in describing the problem 100.7 and the project; a maximum of 40 points for the extent to which 100.8 the applicant has demonstrated that the applicant has made 100.9 adequate provisions to assure proper and efficient operation of 100.10 the facility once the project is completed; and a maximum of 20 100.11 points for the extent to which the proposed project is 100.12 consistent with the hospital's capital improvement plan or 100.13 strategic plan. The commissioner may also take into account 100.14 other relevant factors. During application review, the 100.15 commissioner may request additional information about a proposed 100.16 project, including information on project cost. Failure to 100.17 provide the information requested disqualifies a loan applicant. 100.18 Subd. 6. [PROGRAM OVERSIGHT.] The commissioner of health 100.19 shall review audited financial information of the hospital to 100.20 assess eligibility. The commissioner shall determine the amount 100.21 of a grant or loan to be given to an eligible rural hospital 100.22 based on the relative score of each eligible hospital's 100.23 application and the funds available to the commissioner. The 100.24 grant or loan shall be used to update, remodel, or replace aging 100.25 facilities and equipment necessary to maintain the operations of 100.26 the hospital. 100.27 Subd. 7. [LOAN PAYMENT.] Loans shall be repaid as provided 100.28 in this subdivision over a period of 15 years. In those years 100.29 when an eligible rural hospital experiences a positive net 100.30 operating margin in excess of two percent, the eligible rural 100.31 hospital shall pay to the state one-half of the excess above two 100.32 percent, up to the yearly payment amount based upon a loan 100.33 period of 15 years. If the amount paid back in any year is less 100.34 than the yearly payment amount, or if no payment is required 100.35 because the eligible rural hospital does not experience a 100.36 positive net operating margin in excess of two percent, the 101.1 amount unpaid for that year shall be forgiven by the state 101.2 without any financial penalty. As a condition of receiving an 101.3 award through this program, eligible hospitals must agree to any 101.4 and all collection activities the commissioner finds necessary 101.5 to collect loan payments in those years a payment is due. 101.6 Subd. 8. [ACCOUNTING TREATMENT.] The commissioner of 101.7 finance shall record as grants in the state accounting system 101.8 funds obligated by this section. Loan payments received under 101.9 this section shall be deposited in the health care access fund. 101.10 Subd. 9. [EXPIRATION.] This section expires June 30, 1998. 101.11 Sec. 13. Minnesota Statutes 1996, section 144.1484, 101.12 subdivision 1, is amended to read: 101.13 Subdivision 1. [SOLE COMMUNITY HOSPITAL FINANCIAL 101.14 ASSISTANCE GRANTS.] The commissioner of health shall award 101.15 financial assistance grants to rural hospitals in isolated areas 101.16 of the state. To qualify for a grant, a hospital must: (1) be 101.17 eligible to be classified as a sole community hospital according 101.18 to the criteria in Code of Federal Regulations, title 42, 101.19 section 412.92 or be located in a community with a population of 101.20 less than 5,000 and located more than 25 miles from a like 101.21 hospital currently providing acute short-term services; (2) have 101.22 experienced net operating income losses inthetwo of the 101.23 previous three most recent consecutive hospital fiscal years for 101.24 which audited financial information is available; (3) consist of 101.25 40 or fewer licensed beds; and (4) demonstrate to the 101.26 commissioner that it has obtained local support for the hospital 101.27 and that any state support awarded under this program will not 101.28 be used to supplant local support for the hospital. The 101.29 commissioner shall review audited financial statements of the 101.30 hospital to assess the extent of local support. Evidence of 101.31 local support may include bonds issued by a local government 101.32 entity such as a city, county, or hospital district for the 101.33 purpose of financing hospital projects; and loans, grants, or 101.34 donations to the hospital from local government entities, 101.35 private organizations, or individuals. The commissioner shall 101.36 determine the amount of the award to be given to each eligible 102.1 hospital based on the hospital's operating loss margin (total 102.2 operating losses as a percentage of total operating revenue) for 102.3thetwo of the previous three most recent consecutive fiscal 102.4 years for which audited financial information is available and 102.5 the total amount of funding available. For purposes of 102.6 calculating a hospital's operating loss margin, total operating 102.7 revenue does not include grant funding provided under this 102.8 subdivision. One hundred percent of the available funds will be 102.9 disbursed proportionately based on the operating loss margins of 102.10 the eligible hospitals. 102.11 Sec. 14. [EFFECTIVE DATE.] 102.12 Sections 11 and 12 are effective July 1, 1997. 102.13 ARTICLE 7 102.14 APPROPRIATIONS 102.15 Section 1. [APPROPRIATIONS.] 102.16 Except as otherwise provided in this act, the sums set 102.17 forth in the columns designated "fiscal year 1998" and "fiscal 102.18 year 1999" are appropriated from the general fund, or other 102.19 named fund, to the agencies for the purposes specified in this 102.20 act for the fiscal years ending June 30, 1998, and June 30, 1999. 102.21 SUMMARY BY FUND 102.22 1998 1999 TOTAL 102.23 Health Care 102.24 Access Fund $109,415,000 $139,192,000 $248,606,000 102.25 Subdivision 1. Department of Human 102.26 Services 102.27 Health Care 102.28 Access Fund $ 92,409,000 $126,542,000 $218,950,000 102.29 Of this appropriation, $1,248,000 in 102.30 fiscal year 1998 is to be transferred 102.31 to the medical assistance program for 102.32 the cost of increased enrollment in the 102.33 Qualified Medicare Beneficiary and 102.34 Services Limited Medicare Beneficiary 102.35 programs resulting from implementation 102.36 of the senior drug program. 102.37 Subd. 2. Department of Health 102.38 Health Care 102.39 Access Fund $ 12,668,000 $ 8,265,000 $ 20,933,000 102.40 Health care access fund appropriations 102.41 for student loan forgiveness programs 102.42 for health care providers are available 102.43 for either year of the biennium. 103.1 Subd. 3. University of Minnesota 103.2 Health Care 103.3 Access Fund 2,592,000 2,592,000 5,184,000 103.4 $470,000 is appropriated to the board 103.5 of regents of the University of 103.6 Minnesota for the biennium ending June 103.7 30, 1999, for primary care physician 103.8 education and training under Minnesota 103.9 Statutes, sections 137.38 to 137.40. 103.10 This appropriation is in addition to 103.11 the current base appropriation for 103.12 these activities and shall become part 103.13 of the base appropriation for the 103.14 fiscal year 2000-2001 biennium. 103.15 Subd. 4. Department of Revenue 103.16 Health Care 103.17 Access Fund 1,621,000 1,668,000 3,289,000 103.18 Subd. 5. Legislative Coordinating 103.19 Commission 103.20 Health Care 103.21 Access Fund 125,000 125,000 250,000 103.22 Sec. 2. TRANSFERS 103.23 $4,112,000 in fiscal year 1998 and 103.24 $4,104,000 in fiscal year 1999 are 103.25 transferred from the health care access 103.26 fund to the general fund to replace the 103.27 revenue lost due to the repeal of the 103.28 $400 physician surcharge. 103.29 Sec. 3. CARRYOVER 103.30 None of the appropriations in this act 103.31 which are allowed to be carried forward 103.32 from fiscal year 1998 to fiscal year 103.33 1999 shall become part of the base 103.34 level funding for the 2000-2001 103.35 biennial budget, unless specifically 103.36 directed by the legislature. 103.37 Sec. 4. SUNSET 103.38 All uncodified language contained in 103.39 this article expires on June 30, 1999, 103.40 unless a different expiration is 103.41 explicit.