SF 1737

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; health; regulating preferred 
  1.3             provider arrangements; authorizing rulemaking; 
  1.4             amending Minnesota Statutes 1994, section 72A.20, 
  1.5             subdivision 15; proposing coding for new law as 
  1.6             Minnesota Statutes, chapter 62K. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [62K.01] [SHORT TITLE.] 
  1.9      This chapter shall be known and may be cited as the 
  1.10  preferred provider arrangements act. 
  1.11     Sec. 2.  [62K.02] [PURPOSE.] 
  1.12     The purpose of this chapter is to encourage health care 
  1.13  cost containment while preserving quality of care by allowing 
  1.14  health care insurers to enter into preferred provider 
  1.15  arrangements and by establishing minimum standards for preferred 
  1.16  provider arrangements and the health benefit plans associated 
  1.17  with those arrangements.  
  1.18     Sec. 3.  [62K.03] [DEFINITIONS.] 
  1.19     Subdivision 1.  [TERMS.] The following terms have the 
  1.20  meanings given them in this section unless the context clearly 
  1.21  indicates otherwise.  
  1.22     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
  1.23  commissioner of commerce.  
  1.24     Subd. 3.  [COVERED PERSON.] "Covered person" means a person 
  1.25  on whose behalf the health care insurer is obligated to pay for 
  1.26  or provide health care services.  
  2.1      Subd. 4.  [COVERED SERVICES.] "Covered services" means 
  2.2   health care services that the health care insurer is obligated 
  2.3   to pay for or provide under the health benefit plan. 
  2.4      Subd. 5.  [EMERGENCY CARE.] "Emergency care" means covered 
  2.5   services delivered to a covered person who has suffered an 
  2.6   accidental bodily injury or contracted a medical condition that 
  2.7   reasonably requires the beneficiary or insured to seek immediate 
  2.8   medical care under circumstances or at locations that reasonably 
  2.9   preclude the beneficiary or insured from obtaining needed 
  2.10  medical care from a preferred provider.  
  2.11     Subd. 6.  [HEALTH BENEFIT PLAN.] "Health benefit plan" 
  2.12  means the health insurance policy or subscriber agreement 
  2.13  between the covered person or the policyholder and the health 
  2.14  care insurer that defines the covered services and benefit 
  2.15  levels available.  
  2.16     Subd. 7.  [HEALTH CARE INSURER.] "Health care insurer" 
  2.17  means an insurance company as defined in section 60A.02, a 
  2.18  service plan corporation as defined in section 62C.02, a health 
  2.19  maintenance organization as defined in section 62D.02, a 
  2.20  fraternal benefit society as defined in section 64B.01, a 
  2.21  community integrated service network as defined in chapter 62N, 
  2.22  or an integrated service network as defined in chapter 62N.  
  2.23     Subd. 8.  [HEALTH CARE PROVIDER.] "Health care provider" 
  2.24  means providers of health care services licensed as required in 
  2.25  this state.  
  2.26     Subd. 9.  [HEALTH CARE SERVICES.] "Health care services" 
  2.27  means services rendered or products sold by a health care 
  2.28  provider within the scope of the provider's license.  The term 
  2.29  includes, but is not limited to, hospital, medical, surgical, 
  2.30  dental, vision, and pharmaceutical services or products.  
  2.31     Subd. 10.  [PREFERRED PROVIDER.] "Preferred provider" means 
  2.32  a health care provider or group of providers who have contracted 
  2.33  to provide specified covered services.  
  2.34     Subd. 11.  [PREFERRED PROVIDER ARRANGEMENT.] "Preferred 
  2.35  provider arrangement" means a contract between or on behalf of 
  2.36  the health care insurer and a preferred provider that complies 
  3.1   with all the requirements of this chapter.  
  3.2      Sec. 4.  [62K.04] [PREFERRED PROVIDER ARRANGEMENTS.] 
  3.3      Notwithstanding any provisions of law to the contrary, any 
  3.4   health care insurer may enter into preferred provider 
  3.5   arrangements. 
  3.6      These arrangements must: 
  3.7      (1) establish the amount and manner of payment to the 
  3.8   preferred provider.  The amount and manner of payment may 
  3.9   include capitation payments for preferred providers; 
  3.10     (2) include mechanisms that are designed to minimize the 
  3.11  cost of the health benefit plan.  These mechanisms may include 
  3.12  among others: 
  3.13     (i) the review or control of utilization of health care 
  3.14  services within the benefit plan as allowed under chapter 62M; 
  3.15  and 
  3.16     (ii) a procedure for determining whether health care 
  3.17  services rendered are medically necessary; and 
  3.18     (3) assure reasonable access to covered services available 
  3.19  under the preferred provider arrangement and an adequate number 
  3.20  of preferred providers to render those services. 
  3.21     These arrangements must not unfairly deny health benefits 
  3.22  for medically necessary covered services. 
  3.23     If an entity enters into a contract providing covered 
  3.24  services with a health care provider, but is not engaged in 
  3.25  activities that would require it to be licensed as a health care 
  3.26  insurer, the entity shall file with the commissioner information 
  3.27  describing its activities and a description of the contract or 
  3.28  agreement it has entered into with the health care providers.  
  3.29  Employers who enter into contracts with health care providers 
  3.30  for the exclusive benefit of their employees and dependents are 
  3.31  exempt from this requirement. 
  3.32     Sec. 5.  [62K.05] [HEALTH BENEFIT PLANS.] 
  3.33     Health care insurers may issue health benefit plans that 
  3.34  provide for incentives for covered persons to use the health 
  3.35  care services of preferred providers.  These policies or 
  3.36  subscriber agreements must contain at least the following 
  4.1   provisions:  
  4.2      (1) a provision that if a covered person receives emergency 
  4.3   care for services specified in the preferred provider 
  4.4   arrangement and cannot reasonably reach a preferred provider 
  4.5   that emergency care rendered during the course of the emergency 
  4.6   will be reimbursed as though the covered person had been treated 
  4.7   by a preferred provider; and 
  4.8      (2) a provision that clearly identifies the differentials 
  4.9   in benefit levels for health care services of preferred 
  4.10  providers and benefit levels for health care services of 
  4.11  nonpreferred providers. 
  4.12     If a health benefit plan provides differences in benefit 
  4.13  levels payable to preferred providers compared to other 
  4.14  providers, the differences shall not unfairly deny payment for 
  4.15  covered services and shall be no greater than necessary to 
  4.16  provide a reasonable incentive for covered persons to use the 
  4.17  preferred provider. 
  4.18     Sec. 6.  [62K.06] [PREFERRED PROVIDER PARTICIPATION 
  4.19  REQUIREMENTS.] 
  4.20     Health care insurers may place reasonable limits on the 
  4.21  number or classes of preferred providers that satisfy the 
  4.22  standards set forth by the health care insurer, provided that 
  4.23  there be no discrimination against providers on the basis of 
  4.24  religion, race, color, national origin, age, sex, or marital 
  4.25  status, and further provided that selection of preferred 
  4.26  providers is primarily based on, but not limited to, cost and 
  4.27  availability of covered services and the quality of services 
  4.28  performed by the providers. 
  4.29     Sec. 7.  [62K.07] [GENERAL REQUIREMENTS.] 
  4.30     Health care insurers complying with this chapter are 
  4.31  subject to and are required to comply with all other applicable 
  4.32  laws and rules of this state. 
  4.33     Sec.  8.  [62K.08] [RULES.] 
  4.34     The commissioner may adopt rules to enforce and administer 
  4.35  this chapter. 
  4.36     Sec. 9.  Minnesota Statutes 1994, section 72A.20, 
  5.1   subdivision 15, is amended to read: 
  5.2      Subd. 15.  [PRACTICES NOT HELD TO BE DISCRIMINATION OR 
  5.3   REBATES.] Nothing in subdivision 8, 9, or 10, or in section 
  5.4   72A.12, subdivisions 3 and 4, shall be construed as including 
  5.5   within the definition of discrimination or rebates any of the 
  5.6   following practices: 
  5.7      (1) in the case of any contract of life insurance or 
  5.8   annuity, paying bonuses to policyholders or otherwise abating 
  5.9   their premiums in whole or in part out of surplus accumulated 
  5.10  from nonparticipating insurance, provided that any bonuses or 
  5.11  abatement of premiums shall be fair and equitable to 
  5.12  policyholders and for the best interests of the company and its 
  5.13  policyholders; 
  5.14     (2) in the case of life insurance policies issued on the 
  5.15  industrial debit plan, making allowance, to policyholders who 
  5.16  have continuously for a specified period made premium payments 
  5.17  directly to an office of the insurer, in an amount which fairly 
  5.18  represents the saving in collection expense; 
  5.19     (3) readjustment of the rate of premium for a group 
  5.20  insurance policy based on the loss or expense experienced 
  5.21  thereunder, at the end of the first or any subsequent policy 
  5.22  year of insurance thereunder, which may be made retroactive only 
  5.23  for such policy year;. 
  5.24     (4) in the case of an individual or group health insurance 
  5.25  policy, the payment of differing amounts of reimbursement to 
  5.26  insureds who elect to receive health care goods or services from 
  5.27  providers designated by the insurer, provided that each insurer 
  5.28  shall on or before August 1 of each year file with the 
  5.29  commissioner summary data regarding the financial reimbursement 
  5.30  offered to providers so designated.  
  5.31     Any insurer which proposes to offer an arrangement 
  5.32  authorized under this clause shall disclose prior to its initial 
  5.33  offering and on or before August 1 of each year thereafter as a 
  5.34  supplement to its annual statement submitted to the commissioner 
  5.35  pursuant to section 60A.13, subdivision 1, the following 
  5.36  information:  
  6.1      (a) the name which the arrangement intends to use and its 
  6.2   business address; 
  6.3      (b) the name, address, and nature of any separate 
  6.4   organization which administers the arrangement on the behalf of 
  6.5   the insurers; and 
  6.6      (c) the names and addresses of all providers designated by 
  6.7   the insurer under this clause and the terms of the agreements 
  6.8   with designated health care providers.  
  6.9      The commissioner shall maintain a record of arrangements 
  6.10  proposed under this clause, including a record of any complaints 
  6.11  submitted relative to the arrangements. 
  6.12     If the commissioner requests copies of contracts with a 
  6.13  provider under this clause and the provider requests a 
  6.14  determination, all information contained in the contracts that 
  6.15  the commissioner determines may place the provider or health 
  6.16  care plan at a competitive disadvantage is nonpublic data.