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Minnesota Legislature

Office of the Revisor of Statutes

SF 1809

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 04/17/2012 09:25am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/10/2012
1st Engrossment Posted on 03/08/2012
2nd Engrossment Posted on 03/29/2012

Current Version - 2nd Engrossment

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A bill for an act
relating to health; removing requirements for implementation of evidence-based
strategies as part of hospital community benefit programs and health maintenance
organizations collaboration plans; changing requirements for development of
health care costs and quality outcome standards; providing for use and public
release of certain health care data; amending Minnesota Statutes 2010, sections
62U.04, subdivisions 1, 2, 4, 5; 256B.0754, subdivision 2; Minnesota Statutes
2011 Supplement, section 62U.04, subdivisions 3, 9; Laws 2011, First Special
Session chapter 9, article 10, section 4, subdivision 2.

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

Section 1.

Laws 2011, First Special Session chapter 9, article 10, section 4, subdivision
2, is amended to read:


Subd. 2.

Community and Family Health
Promotion

Appropriations by Fund
General
45,577,000
46,030,000
State Government
Special Revenue
1,033,000
1,033,000
Health Care Access
16,719,000
1,719,000
Federal TANF
11,713,000
11,713,000

TANF Appropriations. (1) $1,156,000 of
the TANF funds is appropriated each year of
the biennium to the commissioner for family
planning grants under Minnesota Statutes,
section 145.925.

(2) $3,579,000 of the TANF funds is
appropriated each year of the biennium to
the commissioner for home visiting and
nutritional services listed under Minnesota
Statutes, section 145.882, subdivision 7,
clauses (6) and (7). Funds must be distributed
to community health boards according to
Minnesota Statutes, section 145A.131,
subdivision 1
.

(3) $2,000,000 of the TANF funds is
appropriated each year of the biennium to
the commissioner for decreasing racial and
ethnic disparities in infant mortality rates
under Minnesota Statutes, section 145.928,
subdivision 7
.

(4) $4,978,000 of the TANF funds is
appropriated each year of the biennium to the
commissioner for the family home visiting
grant program according to Minnesota
Statutes, section 145A.17. $4,000,000 of the
funding must be distributed to community
health boards according to Minnesota
Statutes, section 145A.131, subdivision 1.
$978,000 of the funding must be distributed
to tribal governments based on Minnesota
Statutes, section 145A.14, subdivision 2a.

(5) The commissioner may use up to 6.23
percent of the funds appropriated each fiscal
year to conduct the ongoing evaluations
required under Minnesota Statutes, section
145A.17, subdivision 7, and training and
technical assistance as required under
Minnesota Statutes, section 145A.17,
subdivisions 4
and 5.

TANF Carryforward. Any unexpended
balance of the TANF appropriation in the
first year of the biennium does not cancel but
is available for the second year.

Statewide Health Improvement Program.
deleted text begin (a)deleted text end $15,000,000 in the biennium ending June
30, 2013, is appropriated from the health
care access fund for the statewide health
improvement program and is available until
expended. Notwithstanding Minnesota
Statutes, sections 144.396, and 145.928, the
commissioner may use tobacco prevention
grant funding and grant funding under
Minnesota Statutes, section 145.928, to
support the statewide health improvement
program. The commissioner may focus the
program geographically or on a specific
goal of tobacco use reduction or on
reducing obesity. deleted text beginBy February 15, 2013, the
commissioner shall report to the chairs of
the health and human services committee
on progress toward meeting the goals of the
program as outlined in Minnesota Statutes,
section
deleted text enddeleted text begin145.986deleted text enddeleted text begin, and estimate the dollar
value of the reduced health care costs for
both public and private payers.
deleted text end

deleted text begin (b) By February 15, 2012, the commissioner
deleted text end deleted text begin shall develop a plan to implement
deleted text end deleted text begin evidence-based strategies from the statewide
deleted text end deleted text begin health improvement program as part of
deleted text end deleted text begin hospital community benefit programs
and
deleted text end deleted text begin health maintenance organizations
deleted text end deleted text begin collaboration plans. deleted text end deleted text begin The implementation
plan shall include an advisory board
to determine priority needs for health
improvement in reducing obesity and
tobacco use in Minnesota and to review
and approve hospital community benefit
activities reported under Minnesota Statutes,
section 144.699, and health maintenance
organizations collaboration plans in
Minnesota Statutes, section deleted text begin62Q.075deleted text end.
deleted text end deleted text begin The
deleted text end deleted text begin commissioner shall consult with deleted text end deleted text begin hospital
and
deleted text end deleted text begin health maintenance organizations in
deleted text end deleted text begin creating and implementing the plan. The
deleted text end deleted text begin plan described in this paragraph shall be
deleted text end deleted text begin implemented by July 1, 2012.
deleted text end

deleted text begin (c) The commissioners of Minnesota
deleted text end deleted text begin management and budget, human services,
deleted text end deleted text begin and health shall include in each forecast
deleted text end deleted text begin beginning February of 2013 a report that
deleted text end deleted text begin identifies an estimated dollar value of the
deleted text end deleted text begin health care savings in the state health care
deleted text end deleted text begin programs that are directly attributable to the
deleted text end deleted text begin strategies funded from the statewide health
deleted text end deleted text begin improvement program. The report shall
deleted text end deleted text begin include a description of methodologies and
deleted text end deleted text begin assumptions used to calculate the estimate.
deleted text end

Funding Usage. Up to 75 percent of the
fiscal year 2012 appropriation for local public
health grants may be used to fund calendar
year 2011 allocations for this program and
up to 75 percent of the fiscal year 2013
appropriation may be used for calendar year
2012 allocations. The fiscal year 2014 base
shall be increased by $5,193,000.

Base Level Adjustment. The general fund
base is increased by $5,188,000 in fiscal year
2014 and decreased by $5,000 in 2015.

Sec. 2.

Minnesota Statutes 2010, section 62U.04, subdivision 1, is amended to read:


Subdivision 1.

Development of tools to improve costs and quality outcomes.

The commissioner of health shall develop a plan to create transparent prices, encourage
greater provider innovation and collaboration across points on the health continuum
in cost-effective, high-quality care delivery, reduce the administrative burden on
providers and health plans associated with submitting and processing claims, and provide
comparative information to consumers on variation in health care cost and quality across
providers. deleted text beginThe development must be complete by January 1, 2010.
deleted text end

Sec. 3.

Minnesota Statutes 2010, section 62U.04, subdivision 2, is amended to read:


Subd. 2.

Calculation of health care costs and quality.

The commissioner of health
shall develop a uniform method of calculating providers' relative cost of care, defined as a
measure of health care spending including resource use and unit prices, and relative quality
of care. In developing this method, the commissioner must address the following issues:

(1) provider attribution of costs and quality;

(2) appropriate adjustment for outlier or catastrophic cases;

(3) appropriate risk adjustment to reflect differences in the demographics and health
status across provider patient populations, using generally accepted and transparent risk
adjustment methodologiesnew text begin and case mix adjustmentnew text end;

(4) specific types of providers that should be included in the calculation;

(5) specific types of services that should be included in the calculation;

(6) appropriate adjustment for variation in payment rates;

(7) the appropriate provider level for analysis;

(8) payer mix adjustments, including variation across providers in the percentage of
revenue received from government programs; and

(9) other factors that the commissioner deleted text begindeterminesdeleted text end new text beginand the advisory committee,
established under subdivision 3, determine
new text endare needed to ensure validity and comparability
of the analysis.

Sec. 4.

Minnesota Statutes 2011 Supplement, section 62U.04, subdivision 3, is
amended to read:


Subd. 3.

Provider peer groupingnew text begin; system development; advisory committeenew text end.

(a) The commissioner shall develop a peer grouping system for providers deleted text beginbased on a
combined measure
deleted text end that incorporates both provider risk-adjusted cost of care and quality of
care, and for specific conditions as determined by the commissioner. deleted text beginIn developing this
system, the commissioner shall consult and coordinate with health care providers, health
plan companies, state agencies, and organizations that work to improve health care quality
in Minnesota.
deleted text end For purposes of the final establishment of the peer grouping system, the
commissioner shall not contract with any private entity, organization, or consortium of
entities that has or will have a direct financial interest in the outcome of the system.

new text begin (b) The commissioner shall establish an advisory committee comprised of
representatives of health care providers, health plan companies, consumers, state agencies,
employers, academic researchers, and organizations that work to improve health care
quality in Minnesota. The advisory committee shall meet no fewer than three times
per year. The commissioner shall consult with the advisory committee in developing
and administering the peer grouping system, including but not limited to the following
activities:
new text end

new text begin (1) establishing peer groups;
new text end

new text begin (2) selecting quality measures;
new text end

new text begin (3) recommending thresholds for completeness of data and statistical significance
for the purposes of public release of provider peer grouping results;
new text end

new text begin (4) considering whether adjustments are necessary for facilities that provide medical
education, level 1 trauma services, neonatal intensive care, or inpatient psychiatric care;
new text end

new text begin (5) recommending inclusion or exclusion of other costs; and
new text end

new text begin (6) adopting patient attribution and quality and cost-scoring methodologies.
new text end

new text begin Subd. 3a. new text end

new text begin Provider peer grouping; dissemination of data to providers. new text end

deleted text begin(b) By
no later than October 15, 2010,
deleted text endnew text begin (a)new text end The commissioner shall disseminate information
to providers on their total cost of care, total resource use, total quality of care, and the
total care results of the grouping developed under deleted text beginthisdeleted text end subdivisionnew text begin 3new text end in comparison to an
appropriate peer group. new text beginData used for this analysis must be the most recent data available.
new text endAny analyses or reports that identify providers may only be published after the provider
has been provided the opportunity by the commissioner to review the underlying datanew text begin in
order to verify, consistent with the recommendations developed pursuant to subdivision
3c, paragraph (d), and adopted by the commissioner the accuracy and representativeness
of any analyses or reports
new text end and submit commentsnew text begin to the commissioner or initiate an appeal
under subdivision 3b
new text end. deleted text beginProviders maydeleted text endnew text begin Upon request, providers shallnew text end be given any data for
which they are the subject of the data. The provider shall have deleted text begin30deleted text endnew text begin 60new text end days to review the
data for accuracy and initiate an appeal as specified in deleted text beginparagraph (d)deleted text endnew text begin subdivision 3bnew text end.

deleted text begin (c) By no later than January 1, 2011,deleted text endnew text begin (b)new text end The commissioner shall disseminate
information to providers on their condition-specific cost of care, condition-specific
resource use, condition-specific quality of care, and the condition-specific results of the
grouping developed under deleted text beginthisdeleted text end subdivisionnew text begin 3new text end in comparison to an appropriate peer group.new text begin
Data used for this analysis must be the most recent data available.
new text end Any analyses or
reports that identify providers may only be published after the provider has been provided
the opportunity by the commissioner to review the underlying datanew text begin in order to verify,
consistent with the recommendations developed pursuant to subdivision 3c, paragraph (d),
and adopted by the commissioner the accuracy and representativeness of any analyses or
reports
new text end and submit commentsnew text begin to the commissioner or initiate an appeal under subdivision
3b
new text end. deleted text beginProviders maydeleted text endnew text begin Upon request, providers shallnew text end be given any data for which they are the
subject of the data. The provider shall have deleted text begin30deleted text endnew text begin 60new text end days to review the data for accuracy and
initiate an appeal as specified in deleted text beginparagraph (d)deleted text endnew text begin subdivision 3bnew text end.

new text begin Subd. 3b. new text end

new text begin Provider peer grouping; appeals process. new text end

deleted text begin(d)deleted text end The commissioner shall
establish deleted text beginan appealsdeleted text endnew text begin anew text end process to resolve disputes from providers regarding the accuracy
of the data used to develop analyses or reportsnew text begin or errors in the application of standards
or methodology established by the commissioner in consultation with the advisory
committee
new text end. When a provider deleted text beginappeals the accuracy of the data used to calculate the peer
grouping system results
deleted text endnew text begin submits an appealnew text end, the provider shall:

(1) clearly indicate the reason deleted text beginthey believe the data used to calculate the peer group
system results are not accurate
deleted text endnew text begin or reasons for the appealnew text end;

(2) providenew text begin anynew text end evidence deleted text beginanddeleted text endnew text begin, calculations, ornew text end documentation to support the reason
deleted text begin that data was not accuratedeleted text endnew text begin for the appealnew text end; and

(3) cooperate with the commissioner, including allowing the commissioner access to
data necessary and relevant to resolving the dispute.

new text begin The commissioner shall cooperate with the provider during the data review period
specified in subdivisions 3a and 3c by giving the provider information necessary for the
preparation of an appeal.
new text end

If a provider does not meet the requirements of this deleted text beginparagraphdeleted text endnew text begin subdivisionnew text end, a provider's
appeal shall be considered withdrawn. The commissioner shall not publishnew text begin peer groupingnew text end
results for a deleted text beginspecificdeleted text end provider deleted text beginunder paragraph (e) or (f) while that provider has an
unresolved appeal
deleted text endnew text begin until the appeal has been resolvednew text end.

new text begin Subd. 3c. new text end

new text begin Provider peer grouping; publication of information for the public.
new text end

deleted text begin (e) Beginning January 1, 2011, the commissioner shall, no less than annually, publish
information on providers' total cost, total resource use, total quality, and the results of
the total care portion of the peer grouping process. The results that are published must
be on a risk-adjusted basis.
deleted text end new text begin (a) The commissioner may publicly release summary data
related to the peer grouping system as long as the data do not contain information or
descriptions from which the identity of individual hospitals, clinics, or other providers
may be discerned.
new text end

deleted text begin (f) Beginning March 30, 2011, the commissioner shall no less than annually publish
information on providers' condition-specific cost, condition-specific resource use, and
condition-specific quality, and the results of the condition-specific portion of the peer
grouping process. The results that are published must be on a risk-adjusted basis.
deleted text end new text begin (b) The
commissioner may publicly release analyses or results related to the peer grouping system
that identify hospitals, clinics, or other providers only if the following criteria are met:
new text end

new text begin (1) the results, data, and summaries, including any graphical depictions of provider
performance, have been distributed to providers at least 120 days prior to publication;
new text end

new text begin (2) the commissioner has provided an opportunity for providers to verify and review
data for which the provider is the subject consistent with the recommendations developed
pursuant to subdivision 3c, paragraph (d), and adopted by the commissioner;
new text end

new text begin (3) the results meet thresholds of validity, reliability, statistical significance,
representativeness, and other standards that reflect the recommendations of the advisory
committee, established under subdivision 3; and
new text end

new text begin (4) any public report or other usage of the analyses, report, or data used by the
state clearly notifies consumers about how to use and interpret the results, including
any limitations of the data and analysis.
new text end

deleted text begin (g)deleted text endnew text begin (c) After publishing the first public report, the commissioner shall, no less
frequently than annually, publish information on providers' total cost, total resource use,
total quality, and the results of the total care portion of the peer grouping process, as well
as information on providers' condition-specific cost, condition-specific resource use,
and condition-specific quality, and the results of the condition-specific portion of the
peer grouping process. The results that are published must be on a risk-adjusted basis,
including case mix adjustments.
new text end

new text begin (d) The commissioner shall convene a work group comprised of representatives
of physician clinics, hospitals, their respective statewide associations, and other
relevant stakeholder organizations to make recommendations on data to be made
available to hospitals and physician clinics to allow for verification of the accuracy and
representativeness of the provider peer grouping results.
new text end

new text begin Subd. 3d. new text end

new text begin Provider peer grouping; standards for dissemination and publication.
new text end

new text begin (a) new text endPrior to disseminating data to providers under deleted text beginparagraph (b) or (c)deleted text endnew text begin subdivision 3anew text end or
publishing information under deleted text beginparagraph (e) or (f)deleted text endnew text begin subdivision 3cnew text end, the commissionernew text begin, in
consultation with the advisory committee,
new text end shall ensure the scientific new text beginand statistical new text endvalidity
and reliability of the results according to the standards described in paragraph deleted text begin(h)deleted text endnew text begin (b)new text end.
If additional time is needed to establish the scientific validitynew text begin, statistical significance,new text end
and reliability of the results, the commissioner may delay the dissemination of data to
providers under deleted text beginparagraph (b) or (c)deleted text endnew text begin subdivision 3anew text end, or the publication of information under
deleted text begin paragraph (e) or (f)deleted text endnew text begin subdivision 3cnew text end. deleted text beginIf the delay is more than 60 days, the commissioner
shall report in writing to the chairs and ranking minority members of the legislative
committees with jurisdiction over health care policy and finance the following information:
deleted text end

deleted text begin (1) the reason for the delay;
deleted text end

deleted text begin (2) the actions being taken to resolve the delay and establish the scientific validity
and reliability of the results; and
deleted text end

deleted text begin (3) the new dates by which the results shall be disseminated.
deleted text end

deleted text begin If there is a delay under this paragraph,deleted text end The commissioner must disseminate the
information to providers under deleted text beginparagraph (b) or (c)deleted text endnew text begin subdivision 3anew text end at least deleted text begin90deleted text endnew text begin 120new text end days
before publishing results under deleted text beginparagraph (e) or (f)deleted text endnew text begin subdivision 3cnew text end.

deleted text begin (h)deleted text endnew text begin (b)new text end The commissioner's assurance of validnew text begin, timely,new text end and reliable clinic and hospital
peer grouping performance results shall include, at a minimum, the following:

(1) use of the best available evidence, research, and methodologies; and

(2) establishment of deleted text beginandeleted text end explicit minimum reliability deleted text beginthresholddeleted text end new text begin thresholds for both
quality and costs
new text enddeveloped in collaboration with the subjects of the data and the users of
the data, at a level not below nationally accepted standards where such standards exist.

In achieving these thresholds, the commissioner shall not aggregate clinics that are not
part of the same system or practice group. The commissioner shall consult with and
solicit feedback fromnew text begin the advisory committee andnew text end representatives of physician clinics
and hospitals during the peer grouping data analysis process to obtain input on the
methodological options prior to final analysis and on the design, development, and testing
of provider reports.

Sec. 5.

Minnesota Statutes 2010, section 62U.04, subdivision 4, is amended to read:


Subd. 4.

Encounter data.

(a) Beginning July 1, 2009, and every six months
thereafter, all health plan companies and third-party administrators shall submit encounter
data to a private entity designated by the commissioner of health. The data shall be
submitted in a form and manner specified by the commissioner subject to the following
requirements:

(1) the data must be de-identified data as described under the Code of Federal
Regulations, title 45, section 164.514;

(2) the data for each encounter must include an identifier for the patient's health care
home if the patient has selected a health care home; and

(3) except for the identifier described in clause (2), the data must not include
information that is not included in a health care claim or equivalent encounter information
transaction that is required under section 62J.536.

(b) The commissioner or the commissioner's designee shall only use the data
submitted under paragraph (a) deleted text beginfor thedeleted text end deleted text beginpurpose of carrying out its responsibilities in this
section, and must maintain the data that it receives according to the provisions of this
section.
deleted text endnew text begin to carry out its responsibilities in this section, including supplying the data to
providers so they can verify their results of the peer grouping process consistent with the
recommendations developed pursuant to subdivision 3c, paragraph (d), and adopted by
the commissioner and, if necessary, submit comments to the commissioner or initiate
an appeal.
new text end

(c) Data on providers collected under this subdivision are private data on individuals
or nonpublic data, as defined in section 13.02. Notwithstanding the definition of summary
data in section 13.02, subdivision 19, summary data prepared under this subdivision
may be derived from nonpublic data. The commissioner or the commissioner's designee
shall establish procedures and safeguards to protect the integrity and confidentiality of
any data that it maintains.

(d) The commissioner or the commissioner's designee shall not publish analyses or
reports that identify, or could potentially identify, individual patients.

Sec. 6.

Minnesota Statutes 2010, section 62U.04, subdivision 5, is amended to read:


Subd. 5.

Pricing data.

(a) Beginning July 1, 2009, and annually on January 1
thereafter, all health plan companies and third-party administrators shall submit data
on their contracted prices with health care providers to a private entity designated by
the commissioner of health for the purposes of performing the analyses required under
this subdivision. The data shall be submitted in the form and manner specified by the
commissioner of health.

(b) The commissioner or the commissioner's designee shall only use the data
submitted under this subdivision deleted text beginfor the purpose of carrying out its responsibilities under
this section
deleted text endnew text begin to carry out its responsibilities under this section, including supplying the
data to providers so they can verify their results of the peer grouping process consistent
with the recommendations developed pursuant to subdivision 3c, paragraph (d), and
adopted by the commissioner and, if necessary, submit comments to the commissioner or
initiate an appeal
new text end.

(c) Data collected under this subdivision are nonpublic data as defined in section
13.02. Notwithstanding the definition of summary data in section 13.02, subdivision 19,
summary data prepared under this section may be derived from nonpublic data. The
commissioner shall establish procedures and safeguards to protect the integrity and
confidentiality of any data that it maintains.

Sec. 7.

Minnesota Statutes 2011 Supplement, section 62U.04, subdivision 9, is
amended to read:


Subd. 9.

Uses of information.

deleted text begin(a)deleted text end For product renewals or for new products that
are offereddeleted text begin, after 12 months have elapsed from publication by the commissioner of the
information in subdivision 3, paragraph (e)
deleted text end:

(1) the commissioner of management and budget deleted text beginshalldeleted text endnew text begin maynew text end use the information and
methods developed under deleted text beginsubdivision 3deleted text endnew text begin subdivisions 3 to 3dnew text end to strengthen incentives for
members of the state employee group insurance program to use high-quality, low-cost
providers;

(2) deleted text beginalldeleted text end political subdivisions, as defined in section 13.02, subdivision 11, that offer
health benefits to their employees deleted text beginmustdeleted text endnew text begin maynew text end offer plans that differentiate providers on their
cost and quality performance and create incentives for members to use better-performing
providers;

(3) deleted text beginalldeleted text end health plan companies deleted text beginshalldeleted text endnew text begin maynew text end use the information and methods developed
under deleted text beginsubdivision 3deleted text endnew text begin subdivisions 3 to 3dnew text end to develop products that encourage consumers to
use high-quality, low-cost providers; and

(4) health plan companies that issue health plans in the individual market or the
small employer market deleted text beginmustdeleted text endnew text begin maynew text end offer at least one health plan that uses the information
developed under deleted text beginsubdivision 3deleted text endnew text begin subdivisions 3 to 3dnew text end to establish financial incentives for
consumers to choose higher-quality, lower-cost providers through enrollee cost-sharing
or selective provider networks.

deleted text begin (b) By January 1, 2011, the commissioner of health shall report to the governor
and the legislature on recommendations to encourage health plan companies to promote
widespread adoption of products that encourage the use of high-quality, low-cost providers.
The commissioner's recommendations may include tax incentives, public reporting of
health plan performance, regulatory incentives or changes, and other strategies.
deleted text end

Sec. 8.

Minnesota Statutes 2010, section 256B.0754, subdivision 2, is amended to read:


Subd. 2.

Payment reform.

By no later than 12 months after the commissioner of
health publishes the information in section deleted text begin62U.04, subdivision 3, paragraph (e)deleted text endnew text begin 62U.04,
subdivision 3c, paragraph (b)
new text end, the commissioner of human services deleted text beginshalldeleted text endnew text begin maynew text end use the
information and methods developed under section 62U.04 to establish a payment system
that:

(1) rewards high-quality, low-cost providers;

(2) creates enrollee incentives to receive care from high-quality, low-cost providers;
and

(3) fosters collaboration among providers to reduce cost shifting from one part of
the health continuum to another.

Sec. 9. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 2 to 8 are effective July 1, 2012, and apply to all information provided or
released to the public or to health care providers, pursuant to Minnesota Statutes, section
62U.04, on or after that date. Section 4 shall be implemented by the commissioner of
health within available resources.
new text end