SF 1246

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; gross receipts; providing a
credit to health care providers for services to state
health program recipients; providing for
responsibilities of third-party purchasers;
authorizing itemization of tax on certain billings;
amending Minnesota Statutes 2004, sections 295.54, by
adding a subdivision; 295.582.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 295.54, is
amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Credits; services to state health program
recipients. new text end

new text begin A health care provider subject to the tax in this
section may take a credit against the provider tax owed by that
provider for services provided to state health program
recipients. The credit is 80 percent of the total reimbursement
the provider receives from the state for services provided under
medical assistance, general assistance medical care, and
MinnesotaCare. The tax credit must be based upon services
rendered to the state for fee-for-service or managed care
programs contracted with the state to provide services under
medical assistance, general assistance medical care, or
MinnesotaCare during the calendar year. The maximum credit
against the provider tax may not exceed $25,000.
new text end

Sec. 2.

Minnesota Statutes 2004, section 295.582, is
amended to read:

295.582 AUTHORITY.

(a) A hospital, surgical center, or health care provider
that is subject to a tax under section 295.52, or a pharmacy
that has paid additional expense transferred under this section
by a wholesale drug distributor, may transfer additional expense
generated by section 295.52 obligations on to all third-party
contracts for the purchase of health care services on behalf of
a patient or consumer. The additional expense transferred to
the third-party purchaser must not exceed the tax percentage
specified in section 295.52 multiplied against the gross
revenues received under the third-party contract, and the tax
percentage specified in section 295.52 multiplied against
co-payments and deductibles paid by the individual patient or
consumer. new text begin A health care provider who chooses to transfer the
tax specified in section 295.52 may itemize the tax on patient
billings. new text end The expense must not be generated on revenues derived
from payments that are excluded from the tax under section
295.53. All third-party purchasers of health care services
including, but not limited to, third-party purchasers regulated
under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79,
or 79A, or under section 471.61 or 471.617, must pay the
transferred expense in addition to any payments due under
existing contracts with the hospital, surgical center, pharmacy,
or health care provider, to the extent allowed under federal
law. A third-party purchaser of health care services includes,
but is not limited to, a health carrier or community integrated
service network that pays for health care services on behalf of
patients or that reimburses, indemnifies, compensates, or
otherwise insures patients for health care services. A
third-party purchaser shall comply with this section regardless
of whether the third-party purchaser is a for-profit,
not-for-profit, or nonprofit entity new text begin or whether the health care
provider has chosen to itemize the tax on patient billings. If
the third-party purchaser's contract limits provider payment to
a specified amount, such as an usual and customary fee schedule,
the third-party purchaser must still pay the tax transferred or
itemized by a health care provider. A third-party purchaser is
also responsible for reimbursing providers for the percentage
tax levied on co-payments or deductibles paid by the insured new text end . A
wholesale drug distributor may transfer additional expense
generated by section 295.52 obligations to entities that
purchase from the wholesaler, and the entities must pay the
additional expense. Nothing in this section limits the ability
of a hospital, surgical center, pharmacy, wholesale drug
distributor, or health care provider to recover all or part of
the section 295.52 obligation by other methods, including
increasing fees or charges.

(b) Each third-party purchaser regulated under any chapter
cited in paragraph (a) shall include with its annual renewal for
certification of authority or licensure documentation indicating
compliance with paragraph (a). new text begin The documentation shall include
information relating to a third-party purchaser's means for
compliance with paragraph (a) for health care providers who
itemize the tax on patient billings.
new text end

(c) Any hospital, surgical center, or health care provider
subject to a tax under section 295.52 or a pharmacy that has
paid additional expense transferred under this section by a
wholesale drug distributor may file a complaint with the
commissioner responsible for regulating the third-party
purchaser if at any time the third-party purchaser fails to
comply with paragraph (a).

(d) If the commissioner responsible for regulating the
third-party purchaser finds at any time that the third-party
purchaser has not complied with paragraph (a), the commissioner
may take enforcement action against a third-party purchaser
which is subject to the commissioner's regulatory jurisdiction
and which does not allow a hospital, surgical center, pharmacy,
or provider to pass-through the tax. The commissioner may by
order fine or censure the third-party purchaser or revoke or
suspend the certificate of authority or license of the
third-party purchaser to do business in this state if the
commissioner finds that the third-party purchaser has not
complied with this section. The third-party purchaser may
appeal the commissioner's order through a contested case hearing
in accordance with chapter 14. new text begin If it is found that a
third-party purchaser has violated this section, the third-party
purchaser is subject to a civil action by a health care provider
for actual damages incurred because of the failure of the
third-party purchaser to comply with paragraph (a).
new text end