Engrossments
Introduction		Posted on 03/16/2018

ARTICLE 1

COUNTY-BASED PURCHASING

Section 1.

new text begin [62W.01] CITATION AND PURPOSE.
new text end

new text begin Subdivision 1. new text end

new text begin Citation. new text end

new text begin This chapter may be cited as "county-based purchasing."
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin County-based purchasing is a model uniquely designed to serve rural
areas by providing health care services, behavioral health services, public health services,
social services, and other community-based services through local coordination, collaboration,
and integration. County-based purchasing is an effective model to provide:
new text end

new text begin (1) local accountability and transparency in health care financing within a budget;
new text end

new text begin (2) long-term continuity in delivering and receiving health care coverage through federal
and state public health care programs;
new text end

new text begin (3) local innovation in the design, practice, and evaluation of new health care initiatives
to specifically address unique local health care needs involving access, quality, efficiency,
and service delivery while providing value-based accountable care consistent with state and
federal health care reform objectives; and
new text end

new text begin (4) development and maintenance of rural health care infrastructure.
new text end

Sec. 2.

new text begin [62W.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin For purposes of this chapter, the following terms have the
meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of health or the
commissioner's designee.
new text end

new text begin Subd. 3. new text end

new text begin County-based purchasing organization. new text end

new text begin "County-based purchasing
organization" means a rural county or group of rural counties that has elected to operate a
county-based purchasing plan in accordance with this chapter. If only one county is involved,
the county board of commissioners shall be the governing body of the county-based
purchasing organization. If a multicounty arrangement is involved, the governing body of
the county-based purchasing organization shall be a joint powers board established under
section 471.59.
new text end

new text begin Subd. 4. new text end

new text begin County-based purchasing plan. new text end

new text begin "County-based purchasing plan" means a
plan offered by the county-based purchasing organization whereby the organization agrees
to purchase or provide health care services, behavioral health services, public health services,
county social services, community support services, and other community-based services
and resources to address the wellness, health care, and social needs of enrollees as set forth
under the plan and in accordance with this chapter.
new text end

new text begin Subd. 5. new text end

new text begin Enrollee. new text end

new text begin "Enrollee" means an individual who resides within the service area
served by the county-based purchasing organization and who is enrolled in the county-based
purchasing plan.
new text end

new text begin Subd. 6. new text end

new text begin Rural. new text end

new text begin "Rural" means any county designated as micro, rural, or a county with
extreme access considerations (CEAC) under the Medicare Advantage health care delivery
reference table for the most recent reporting period.
new text end

new text begin Subd. 7. new text end

new text begin Service area. new text end

new text begin "Service area" means the geographic area served by the
county-based purchasing organization.
new text end

Sec. 3.

new text begin [62W.03] COUNTY-BASED PURCHASING ORGANIZATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Certificate of authority. new text end

new text begin A county board or group of county boards must
apply to the commissioner of health for a certificate of authority to operate a county-based
purchasing organization in compliance with this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Local planning process. new text end

new text begin A county board or joint powers board that intends to
submit an application under this section must establish a local planning process to advise
the county or counties on the development of the application and its proposed implementation.
The planning process must include input from potential enrollees, consumer advocates,
local providers, and representatives of the local school district, labor force, and tribal
governments.
new text end

new text begin Subd. 3. new text end

new text begin Application review. new text end

new text begin (a) Upon receipt of an application for a certificate of
authority, the commissioner shall determine whether the applicant for the certificate of
authority has substantially demonstrated the applicant's ability to meet the requirements of
this chapter.
new text end

new text begin (b) In reviewing the application, approval shall not be unreasonably withheld and the
commissioner shall take into account the purpose and functions of county-based purchasing
organizations as stated in this chapter. The commissioner may consult with the commissioner
of human services if the county-based purchasing organization intends to provide or purchase
health care services under medical assistance or MinnesotaCare.
new text end

new text begin Subd. 4. new text end

new text begin Certificate of authority requirements. new text end

new text begin (a) Before issuing a certificate of
authority, the county-based purchasing organization must demonstrate to the commissioner
the ability to follow and agree to:
new text end

new text begin (1) authorize and arrange for the provision of all needed health services to ensure all
appropriate health care is delivered to enrollees;
new text end

new text begin (2) ensure that all covered health services are accessible to all enrollees and that enrollees
have a reasonable choice of providers to the extent possible. If the county is also a health
care provider, the county-based purchasing organization must develop a process to ensure
that providers employed by the county are not the sole referral source and are not the sole
provider of health care services if other providers that meet the same quality and cost
requirements are available;
new text end

new text begin (3) meet the fiscal solvency requirements schedule in subdivision 5;
new text end

new text begin (4) comply with the provisions in sections 62J.48, 62J.71 to 62J.73, 62M.01 to 62M.16,
and all applicable provisions of chapter 62Q, including sections 62Q.075, 62Q.1055,
62Q.106, 62Q.12, 62Q.135, 62Q.14, 62Q.145, 62Q.19, 62Q.23, paragraph (c), 62Q.43,
62Q.47, 62Q.50, 62Q.52 to 62Q.56, 62Q.58, and 62Q.68 to 62Q.72;
new text end

new text begin (5) issue payments to participating providers or vendors in a timely manner and comply
with the standards for claim settlement under section 72A.201, subdivisions 4, 5, 7, and 8;
new text end

new text begin (6) establish consumer protection and provider protection requirements that are applicable
to health maintenance organizations under chapter 62D;
new text end

new text begin (7) provide a system for advocacy, enrollee grievance procedures, and complaints and
appeals that is independent of providers or other risk bearers; and
new text end

new text begin (8) provide appropriate quality and other required data in a format required by the
commissioner.
new text end

new text begin (b) The commissioner, in consultation with the county board or joint powers board, shall
develop administrative and financial reporting requirements for the county-based purchasing
organization relating to sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.29, and 62N.31
and other sections that are specific to county administrative, accounting, and reporting
systems and that are consistent with other statutory requirements for counties.
new text end

new text begin Subd. 5. new text end

new text begin Fiscal solvency. new text end

new text begin (a) A county-based purchasing organization must have on
reserve:
new text end

new text begin (1) at least 50 percent of the minimum amount required under chapter 62D at the time
the organization begins operation;
new text end

new text begin (2) at least 75 percent of the minimum amount required under chapter 62D after the first
full calendar year of operation;
new text end

new text begin (3) at least 87.5 percent of the minimum amount required under chapter 62D after the
second full calendar year of operation; and
new text end

new text begin (4) at least 100 percent of the minimum amount required under chapter 62D after the
third full calendar year of operation.
new text end

new text begin (b) Until the county-based purchasing organization is required to have reserves that
equal at least 100 percent of the minimum amount required under chapter 62D, the
organization may demonstrate its ability to cover any losses by satisfying the requirements
of chapter 62N.
new text end

new text begin Subd. 6. new text end

new text begin Issuance; notice. new text end

new text begin (a) Within 90 days after the receipt of the application for
certificate of authority, the commissioner of health shall determine whether or not the
application meets the requirements of this chapter. If the commissioner determines that the
applicant meets the requirements of this chapter, the commissioner shall issue a certificate
of authority. If the commissioner determines that the applicant is not qualified, the
commissioner shall notify the applicant and shall specify the reason or reasons for the
disqualification.
new text end

new text begin (b) In the event the commissioner rejects an application under this chapter, the county
board, the joint powers board, or a single entity representing the county board or joint powers
board may request a review by a three-person mediation panel. The panel shall be composed
of one designee of the president of the Association of Minnesota Counties, one designee of
the commissioner, and one person selected jointly by the designee of the commissioner and
the designee of the Association of Minnesota Counties. The commissioner shall make a
final determination on the application after considering the recommendation of the
three-person mediation panel.
new text end

new text begin Subd. 7. new text end

new text begin Enforcement; rulemaking. new text end

new text begin All enforcement and rulemaking powers available
to the commissioner of health under chapters 62D, 62J, 62M, 62N, and 62Q are granted to
the commissioner with respect to counties that operate a county-based purchasing
organization.
new text end

new text begin Subd. 8. new text end

new text begin Continued compliance. new text end

new text begin (a) Upon being granted a certificate of authority to
operate as a county-based purchasing organization, the organization must continue to comply
with the standards in this chapter. Noncompliance may result in the suspension or revocation
of the certificate of authority.
new text end

new text begin (b) The county-based purchasing organization shall conduct its operations in a publicly
transparent and accountable manner, and in compliance with all regulations applicable to
government entities, including providing enrollees and participating providers opportunities
to be involved in the governance of the county-based purchasing organization.
new text end

new text begin Subd. 9. new text end

new text begin Hold harmless. new text end

new text begin A county-based purchasing organization operating a
county-based purchasing plan must ensure that the state and enrollees are held harmless for
any payment obligations incurred by the county-based purchasing plan if the county-based
purchasing organization becomes insolvent and the state has made capitation payments to
the county-based purchasing organization under section 256B.69 or 256L.12.
new text end

Sec. 4.

new text begin [62W.04] FEES.
new text end

new text begin (a) The commissioner of health shall collect from each county-based purchasing
organization the following fees:
new text end

new text begin (1) fees attributable to the cost of audits and other examinations of the plan's financial
operations. These fees are subject to the provisions in Minnesota Rules, part 4685.2800,
subpart 1, item F; and
new text end

new text begin (2) an annual fee of $21,500 to be paid by June 15 of each calendar year.
new text end

new text begin (b) All fees collected under this section shall be deposited in the state government special
revenue fund.
new text end

Sec. 5.

new text begin [62W.05] EXISTING COUNTY-BASED PURCHASING ORGANIZATIONS.
new text end

new text begin (a) A county-based purchasing plan that was established under section 256B.692 and is
operating on January 1, 2018, is deemed to have met the requirements of this chapter and
is not required to submit a new application to the commissioner. The commissioner shall
issue a certificate of authority to these county-based purchasing organizations.
new text end

new text begin (b) Nothing in paragraph (a) shall be construed to exempt a county-based purchasing
organization from the other provisions of this chapter or section 256B.69.
new text end

Sec. 6.

new text begin [62W.06] EXPENDITURE OF REVENUES.
new text end

new text begin (a) A county-based purchasing organization operating a county-based purchasing plan
must use any excess revenues over expenses that are received by the county-based purchasing
organization:
new text end

new text begin (1) for capital reserves under section 62W.03, subdivision 5;
new text end

new text begin (2) to increase payments to providers;
new text end

new text begin (3) for early intervention and public health services and activities; or
new text end

new text begin (4) to improve economic and geographic access to and the delivery of cost-effective
quality health care.
new text end

new text begin (b) A county-based purchasing organization is subject to the unreasonable expense
provisions of section 62D.19.
new text end

Sec. 7.

new text begin [62W.07] PARTICIPATION IN GOVERNMENT PROGRAMS.
new text end

new text begin Subdivision 1. new text end

new text begin County proposals. new text end

new text begin A county-based purchasing organization may, upon
obtaining a certificate of authority under this chapter, offer a county-based purchasing plan
for the purpose of providing health care services on behalf of eligible individuals in
accordance with sections 256B.69 and 256L.12. The county-based purchasing organization
may purchase all or part of services from a third-party administrator or individual providers
on a fee-for-service basis, or provide these services directly. The county-based purchasing
plan may participate in any contract procurement process under section 256B.69 that includes
the counties within the county-based purchasing plan's service area in accordance with state
and federal procurement laws.
new text end

new text begin Subd. 2. new text end

new text begin Notice. new text end

new text begin If a county-based purchasing organization elects to offer a county-based
purchasing plan in a county or group of counties where a county-based purchasing plan has
not been implemented and plans to participate in the procurement process under section
256B.69, the county-based purchasing organization must provide notice to the commissioner
of human services at least 15 months prior to the termination date of the existing managed
care plan contract that covers eligible individuals in that county or group of counties.
new text end

new text begin Subd. 3. new text end

new text begin Transfer of risk. new text end

new text begin If the county-based purchasing plan contracts with the
commissioner of human services under section 256B.69 or 256L.12, the state of Minnesota
and the United States Department of Health and Human Services are not liable for any costs
incurred by a county or a county-based purchasing plan that exceed the payments to the
county-based purchasing organization made under this section or section 256B.69 or 256L.12.
A county or group of counties whose costs exceed the payments made by the state, an
enrollee of the county-based purchasing plan, or a creditor of that county shall have no
rights under chapter 61B or section 62D.181. A county may assign risk for the cost of care
to a third party.
new text end

Sec. 8.

Minnesota Statutes 2016, section 256B.69, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For the purposes of this section, the following terms have the
meanings given.

(a) "Commissioner" means the commissioner of human services. For the remainder of
this section, the commissioner's responsibilities for methods and policies for implementing
the project will be proposed by the project advisory committees and approved by the
commissioner.

(b) "Demonstration provider" means a health maintenance organization, community
integrated service network, deleted text begin ordeleted text end accountable provider networknew text begin , or county-based purchasing
organizationnew text end authorized and operating under chapter 62D, 62N, deleted text begin ordeleted text end 62Tnew text begin , or 62Wnew text end that
participates in the demonstration project according to criteria, standards, methods, and other
requirements established for the project and approved by the commissioner. deleted text begin For purposes
of this section, a county board, or group of county boards operating under a joint powers
agreement, is considered a demonstration provider if the county or group of county boards
meets the requirements of section 256B.692.
deleted text end

(c) "Eligible individuals" means those persons eligible for medical assistance benefits
as defined in sections 256B.055, 256B.056, and 256B.06.

(d) "Limitation of choice" means suspending freedom of choice while allowing eligible
individuals to choose among the demonstration providers.

Sec. 9.

Minnesota Statutes 2016, section 256B.69, subdivision 3a, is amended to read:

Subd. 3a.

County authority.

(a) The commissioner, when implementing the medical
assistance prepayment program within a county, must include the county board in the process
of development, approval, and issuance of the request for proposals to provide services to
eligible individuals within the proposed county. County boards must be given reasonable
opportunity to make recommendations regarding the development, issuance, review of
responses, and changes needed in the request for proposals. The commissioner must provide
county boards the opportunity to review each proposal based on the identification of
community needs under chapters 145A and 256E and county advocacy activities. If a county
board finds that a proposal does not address certain community needs, the county board and
commissioner shall continue efforts for improving the proposal and network prior to the
approval of the contract. The county board shall make recommendations regarding the
approval of local networks and their operations to ensure adequate availability and access
to covered services. The provider or health plan must respond directly to county advocates
and the state prepaid medical assistance ombudsperson regarding service delivery and must
be accountable to the state regarding contracts with medical assistance funds. The county
board may recommend a maximum number of participating health plans after considering
the size of the enrolling population; ensuring adequate access and capacity; considering the
client and county administrative complexity; and considering the need to promote the
viability of locally developed health plans. The county board or a single entity representing
a group of county boards and the commissioner shall mutually select health plans for
participation at the time of deleted text begin initial implementation of the prepaid medical assistance program
in that county or group of counties and at the time ofdeleted text end new text begin procurement ornew text end contract renewalnew text begin that
involves that county or group of countiesnew text end . The commissioner shall also seek input for contract
requirements from the county or single entity representing a group of county boards at each
contract renewal and incorporate those recommendations into the contract negotiation
process.

(b) At the option of the county board, the board may develop contract requirements
related to the achievement of local public health goals to meet the health needs of medical
assistance enrollees. These requirements must be reasonably related to the performance of
health plan functions and within the scope of the medical assistance benefit set. If the county
board and the commissioner mutually agree to such requirements, the department shall
include such requirements in all health plan contracts governing the prepaid medical
assistance program in that county deleted text begin at initial implementation of the program in that county
anddeleted text end at the time of new text begin a procurement process or new text end contract renewal. The county board may
participate in the enforcement of the contract provisions related to local public health goals.

deleted text begin (c) For counties in which a prepaid medical assistance program has not been established,
the commissioner shall not implement that program if a county board submits an acceptable
and timely preliminary and final proposal under section 256B.692, until county-based
purchasing is no longer operational in that county. For counties in which a prepaid medical
assistance program is in existence on or after September 1, 1997, the commissioner must
terminate contracts with health plans according to section 256B.692, subdivision 5, if the
county board submits and the commissioner accepts a preliminary and final proposal
deleted text end deleted text begin according to that subdivision. The commissioner is not required to terminate contracts that
begin on or after September 1, 1997, according to section 256B.692 until two years have
elapsed from the date of initial enrollment.
deleted text end

deleted text begin (d)deleted text end new text begin (c)new text end In the event that a county board or a single entity representing a group of county
boards and the commissioner cannot reach agreement regarding: (i) the selection of
participating health plans in that county; (ii) contract requirements; or (iii) implementation
and enforcement of county requirements including provisions regarding local public health
goals, the commissioner shall resolve all disputes after taking into account the
recommendations of a three-person mediation panel. The panel shall be composed of one
designee of the president of the Association of Minnesota Counties, one designee of the
commissioner of human services, and one person selected jointly by the designee of the
commissioner of human services and the designee of the Association of Minnesota Counties.
Within a reasonable period of time before the hearing, the panelists must be provided all
documents and information relevant to the mediation. The parties to the mediation must be
given 30 days' notice of a hearing before the mediation panel.

deleted text begin (e) If a county which elects to implement county-based purchasing ceases to implement
county-based purchasing, it is prohibited from assuming the responsibility of county-based
purchasing for a period of five years from the date it discontinues purchasing.
deleted text end

deleted text begin (f) The commissioner shall not require that contractual disputes between county-based
purchasing entities and the commissioner be mediated by a panel that includes a
representative of the Minnesota Council of Health Plans.
deleted text end

deleted text begin (g)deleted text end new text begin (d)new text end At the request of a county-purchasing entity, the commissioner shall adopt a
contract reprocurement or renewal schedule under which all counties included in the entity's
service area are reprocured or renewed at the same time.

deleted text begin (h)deleted text end new text begin (e)new text end The commissioner shall provide a written report under section 3.195 to the chairs
of the legislative committees having jurisdiction over human services in the senate and the
house of representatives describing in detail the activities undertaken by the commissioner
to ensure full compliance with this section. The report must also provide an explanation for
any decisions of the commissioner not to accept the recommendations of a county or group
of counties required to be consulted under this section. The report must be provided at least
30 days prior to the effective date of a new or renewed prepaid or managed care contract
in a county.

Sec. 10. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2016, sections 256B.692, subdivisions 1, 2, 3, 4, 4a, 5, 7, 8, and
9, new text end new text begin are repealed.
new text end

new text begin (b) Minnesota Statutes 2017 Supplement, section 256B.692, subdivision 6, new text end new text begin is repealed.
new text end

ARTICLE 2

CONFORMING CHANGES

Section 1.

Minnesota Statutes 2017 Supplement, section 3.972, subdivision 2b, is amended
to read:

Subd. 2b.

Audits of managed care organizations.

(a) The legislative auditor shall audit
each managed care organization that contracts with the commissioner of human services to
provide health care services under sections 256B.69deleted text begin , 256B.692,deleted text end and 256L.12. The legislative
auditor shall design the audits to determine if a managed care organization used the public
money in compliance with federal and state laws, rules, and in accordance with provisions
in the managed care organization's contract with the commissioner of human services. The
legislative auditor shall determine the schedule and scope of the audit work and may contract
with vendors to assist with the audits. The managed care organization must cooperate with
the legislative auditor and must provide the legislative auditor with all data, documents, and
other information, regardless of classification, that the legislative auditor requests to conduct
an audit. The legislative auditor shall periodically report audit results and recommendations
to the Legislative Audit Commission and the chairs and ranking minority members of the
legislative committees with jurisdiction over health and human services policy and finance.

(b) For purposes of this subdivision, a "managed care organization" means a
demonstration provider as defined under section 256B.69, subdivision 2.

Sec. 2.

Minnesota Statutes 2016, section 62A.045, is amended to read:

62A.045 PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT
HEALTH PROGRAMS.

(a) As a condition of doing business in Minnesota or providing coverage to residents of
Minnesota covered by this section, each health insurer shall comply with the requirements
of the federal Deficit Reduction Act of 2005, Public Law 109-171, including any federal
regulations adopted under that act, to the extent that it imposes a requirement that applies
in this state and that is not also required by the laws of this state. This section does not
require compliance with any provision of the federal act prior to the effective date provided
for that provision in the federal act. The commissioner shall enforce this section.

For the purpose of this section, "health insurer" includes self-insured plans, group health
plans (as defined in section 607(1) of the Employee Retirement Income Security Act of
1974), service benefit plans, managed care organizations, pharmacy benefit managers, or
other parties that are by contract legally responsible to pay a claim for a health-care item
or service for an individual receiving benefits under paragraph (b).

(b) No plan offered by a health insurer issued or renewed to provide coverage to a
Minnesota resident shall contain any provision denying or reducing benefits because services
are rendered to a person who is eligible for or receiving medical benefits pursuant to title
XIX of the Social Security Act (Medicaid) in this or any other state; chapter 256 or 256B;
or services pursuant to section 252.27; 256L.01 to 256L.10; 260B.331, subdivision 2;
260C.331, subdivision 2; or 393.07, subdivision 1 or 2. No health insurer providing benefits
under plans covered by this section shall use eligibility for medical programs named in this
section as an underwriting guideline or reason for nonacceptance of the risk.

(c) If payment for covered expenses has been made under state medical programs for
health care items or services provided to an individual, and a third party has a legal liability
to make payments, the rights of payment and appeal of an adverse coverage decision for
the individual, or in the case of a child their responsible relative or caretaker, will be
subrogated to the state agency. The state agency may assert its rights under this section
within three years of the date the service was rendered. For purposes of this section, "state
agency" includes prepaid health plans under contract with the commissioner according to
sections 256B.69 and 256L.12; children's mental health collaboratives under section 245.493;
demonstration projects for persons with disabilities under section 256B.77; new text begin and new text end nursing
homes under the alternative payment demonstration project under section 256B.434deleted text begin ; and
county-based purchasing entities under section 256B.692deleted text end .

(d) Notwithstanding any law to the contrary, when a person covered by a plan offered
by a health insurer receives medical benefits according to any statute listed in this section,
payment for covered services or notice of denial for services billed by the provider must be
issued directly to the provider. If a person was receiving medical benefits through the
Department of Human Services at the time a service was provided, the provider must indicate
this benefit coverage on any claim forms submitted by the provider to the health insurer for
those services. If the commissioner of human services notifies the health insurer that the
commissioner has made payments to the provider, payment for benefits or notices of denials
issued by the health insurer must be issued directly to the commissioner. Submission by the
department to the health insurer of the claim on a Department of Human Services claim
form is proper notice and shall be considered proof of payment of the claim to the provider
and supersedes any contract requirements of the health insurer relating to the form of
submission. Liability to the insured for coverage is satisfied to the extent that payments for
those benefits are made by the health insurer to the provider or the commissioner as required
by this section.

(e) When a state agency has acquired the rights of an individual eligible for medical
programs named in this section and has health benefits coverage through a health insurer,
the health insurer shall not impose requirements that are different from requirements
applicable to an agent or assignee of any other individual covered.

(f) A health insurer must process a clean claim made by a state agency for covered
expenses paid under state medical programs within 90 business days of the claim's
submission. A health insurer must process all other claims made by a state agency for
covered expenses paid under a state medical program within the timeline set forth in Code
of Federal Regulations, title 42, section 447.45(d)(4).

(g) A health insurer may request a refund of a claim paid in error to the Department of
Human Services within two years of the date the payment was made to the department. A
request for a refund shall not be honored by the department if the health insurer makes the
request after the time period has lapsed.

Sec. 3.

Minnesota Statutes 2016, section 62M.06, subdivision 1, is amended to read:

Subdivision 1.

Procedures for appeal.

(a) A utilization review organization must have
written procedures for appeals of determinations not to certify. The right to appeal must be
available to the enrollee and to the attending health care professional.

(b) The enrollee shall be allowed to review the information relied upon in the course of
the appeal, present evidence and testimony as part of the appeals process, and receive
continued coverage pending the outcome of the appeals process. This paragraph does not
apply to managed care plans or county-based purchasing plans serving state public health
care program enrollees under section 256B.69deleted text begin , 256B.692,deleted text end or chapter 256L, or to
grandfathered plans as defined under section 62A.011, subdivision 1c. Nothing in this
paragraph shall be construed to limit or restrict the appeal rights of state public health care
program enrollees provided under section 256.045 and Code of Federal Regulations, title
42, section 438.420(d).

Sec. 4.

Minnesota Statutes 2016, section 62Q.80, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of this section, the following definitions apply:

(a) "Community-based" means located in or primarily relating to the community, as
determined by the board of a community-based health initiative that is served by the
community-based health care coverage program.

(b) "Community-based health care coverage program" or "program" means a program
administered by a community-based health initiative that provides health care services
through provider members of a community-based health network or combination of networks
to eligible individuals and their dependents who are enrolled in the program.

(c) "Community-based health initiative" or "initiative" means a nonprofit corporation
that is governed by a board that has at least 80 percent of its members residing in the
community and includes representatives of the participating network providers and
employers, or a county-based purchasing organization deleted text begin as defined in section 256B.692deleted text end new text begin
operating under chapter 62Wnew text end .

(d) "Community-based health network" means a contract-based network of health care
providers organized by the community-based health initiative to provide or support the
delivery of health care services to enrollees of the community-based health care coverage
program on a risk-sharing or nonrisk-sharing basis.

(e) "Dependent" means an eligible employee's spouse or child who is under the age of
26 years.

Sec. 5.

Minnesota Statutes 2016, section 62U.01, subdivision 8, is amended to read:

Subd. 8.

Health plan company.

"Health plan company" has the meaning provided in
section 62Q.01, subdivision 4. For the purposes of this chapter, health plan company shall
include new text begin a new text end county-based purchasing deleted text begin arrangements authorized under section 256B.692deleted text end new text begin
organization operating under chapter 62Wnew text end .

Sec. 6.

Minnesota Statutes 2016, section 125A.023, subdivision 3, is amended to read:

Subd. 3.

Definitions.

For purposes of this section and section 125A.027, the following
terms have the meanings given them:

(a) "Health plan" means:

(1) a health plan under section 62Q.01, subdivision 3;

(2) a county-based purchasing plan under deleted text begin section 256B.692deleted text end new text begin chapter 62Wnew text end ;

(3) a self-insured health plan established by a local government under section 471.617;
or

(4) self-insured health coverage provided by the state to its employees or retirees.

(b) For purposes of this section, "health plan company" means an entity that issues a
health plan as defined in paragraph (a).

(c) "Interagency intervention service system" means a system that coordinates services
and programs required in state and federal law to meet the needs of eligible children with
disabilities ages three through 21, including:

(1) services provided under the following programs or initiatives administered by state
or local agencies:

(i) the maternal and child health program under title V of the Social Security Act;

(ii) the Minnesota children with special health needs program under sections 144.05 and
144.07;

(iii) the Individuals with Disabilities Education Act, Part B, section 619, and Part C as
amended;

(iv) medical assistance under title 42, chapter 7, of the Social Security Act;

(v) developmental disabilities services under chapter 256B;

(vi) the Head Start Act under title 42, chapter 105, of the Social Security Act;

(vii) vocational rehabilitation services provided under chapters 248 and 268A and the
Rehabilitation Act of 1973;

(viii) Juvenile Court Act services provided under sections 260.011 to 260.91; 260B.001
to 260B.446; and 260C.001 to 260C.451;

(ix) Minnesota Comprehensive Children's Mental Health Act under section 245.487;

(x) the community health services grants under sections 145.88 to 145.9266;

(xi) the Local Public Health Act under chapter 145A; and

(xii) the Vulnerable Children and Adults Act, sections 256M.60 to 256M.80;

(2) service provision and funding that can be coordinated through:

(i) the children's mental health collaborative under section 245.493;

(ii) the family services collaborative under section 124D.23;

(iii) the community transition interagency committees under section 125A.22; and

(iv) the interagency early intervention committees under section 125A.259;

(3) financial and other funding programs to be coordinated including medical assistance
under title 42, chapter 7, of the Social Security Act, the MinnesotaCare program under
chapter 256L, Supplemental Social Security Income, Developmental Disabilities Assistance,
and any other employment-related activities associated with the Social Security
Administration; and services provided under a health plan in conformity with an individual
family service plan or an individualized education program or an individual interagency
intervention plan; and

(4) additional appropriate services that local agencies and counties provide on an
individual need basis upon determining eligibility and receiving a request from (i) the school
board or county board and (ii) the child's parent.

(d) "Children with disabilities" has the meaning given in section 125A.02.

(e) A "standardized written plan" means those individual services or programs, with
accompanying funding sources, available through the interagency intervention service
system to an eligible child other than the services or programs described in the child's
individualized education program or the child's individual family service plan.

Sec. 7.

Minnesota Statutes 2016, section 245.4682, subdivision 3, is amended to read:

Subd. 3.

Projects for coordination of care.

(a) Consistent with section 256B.69 and
chapter 256L, the commissioner is authorized to solicit, approve, and implement up to three
projects to demonstrate the integration of physical and mental health services within prepaid
health plans and their coordination with social services. The commissioner shall require
that each project be based on locally defined partnerships that include at least one health
maintenance organization, community integrated service network, or accountable provider
network authorized and operating under chapter 62D, 62N, or 62T, or county-based
purchasing deleted text begin entitydeleted text end new text begin organization operatingnew text end under deleted text begin section 256B.692deleted text end new text begin chapter 62Wnew text end that is eligible
to contract with the commissioner as a prepaid health plan, and the county or counties within
the service area. Counties shall retain responsibility and authority for social services in these
locally defined partnerships.

(b) The commissioner, in consultation with consumers, families, and their representatives,
shall:

(1) determine criteria for approving the projects and use those criteria to solicit proposals
for preferred integrated networks. The commissioner must develop criteria to evaluate the
partnership proposed by the county and prepaid health plan to coordinate access and delivery
of services. The proposal must at a minimum address how the partnership will coordinate
the provision of:

(i) client outreach and identification of health and social service needs paired with
expedited access to appropriate resources;

(ii) activities to maintain continuity of health care coverage;

(iii) children's residential mental health treatment and treatment foster care;

(iv) court-ordered assessments and treatments;

(v) prepetition screening and commitments under chapter 253B;

(vi) assessment and treatment of children identified through mental health screening of
child welfare and juvenile corrections cases;

(vii) home and community-based waiver services;

(viii) assistance with finding and maintaining employment;

(ix) housing; and

(x) transportation;

(2) determine specifications for contracts with prepaid health plans to improve the plan's
ability to serve persons with mental health conditions, including specifications addressing:

(i) early identification and intervention of physical and behavioral health problems;

(ii) communication between the enrollee and the health plan;

(iii) facilitation of enrollment for persons who are also eligible for a Medicare special
needs plan offered by the health plan;

(iv) risk screening procedures;

(v) health care coordination;

(vi) member services and access to applicable protections and appeal processes;

(vii) specialty provider networks;

(viii) transportation services;

(ix) treatment planning; and

(x) administrative simplification for providers;

(3) begin implementation of the projects no earlier than January 1, 2009, with not more
than 40 percent of the statewide population included during calendar year 2009 and additional
counties included in subsequent years;

(4) waive any administrative rule not consistent with the implementation of the projects;

(5) allow potential bidders at least 90 days to respond to the request for proposals; and

(6) conduct an independent evaluation to determine if mental health outcomes have
improved in that county or counties according to measurable standards designed in
consultation with the advisory body established under this subdivision and reviewed by the
State Advisory Council on Mental Health.

(c) Notwithstanding any statute or administrative rule to the contrary, the commissioner
may enroll all persons eligible for medical assistance with serious mental illness or emotional
disturbance in the prepaid plan of their choice within the project service area unless:

(1) the individual is eligible for home and community-based services for persons with
developmental disabilities and related conditions under section 256B.092; or

(2) the individual has a basis for exclusion from the prepaid plan under section 256B.69,
subdivision 4, other than disability, mental illness, or emotional disturbance.

(d) The commissioner shall involve organizations representing persons with mental
illness and their families in the development and distribution of information used to educate
potential enrollees regarding their options for health care and mental health service delivery
under this subdivision.

(e) If the person described in paragraph (c) does not elect to remain in fee-for-service
medical assistance, or declines to choose a plan, the commissioner may preferentially assign
that person to the prepaid plan participating in the preferred integrated network. The
commissioner shall implement the enrollment changes within a project's service area on the
timeline specified in that project's approved application.

(f) A person enrolled in a prepaid health plan under paragraphs (c) and (d) may disenroll
from the plan at any time.

(g) The commissioner, in consultation with consumers, families, and their representatives,
shall evaluate the projects begun in 2009, and shall refine the design of the service integration
projects before expanding the projects. The commissioner shall report to the chairs of the
legislative committees with jurisdiction over mental health services by March 1, 2008, on
plans for evaluation of preferred integrated networks established under this subdivision.

(h) The commissioner shall apply for any federal waivers necessary to implement these
changes.

(i) Payment for Medicaid service providers under this subdivision for the months of
May and June will be made no earlier than July 1 of the same calendar year.

Sec. 8.

Minnesota Statutes 2016, section 246.50, subdivision 11, is amended to read:

Subd. 11.

Health plan company.

"Health plan company" has the meaning given deleted text begin itdeleted text end in
section 62Q.01, subdivision 4, and also includes a demonstration provider as defined in
section 256B.69, subdivision 2, paragraph (b), deleted text begin a county or group of counties participating
in county-based purchasing according to section 256B.692,deleted text end and a children's mental health
collaborative under contract to provide medical assistance for individuals enrolled in the
prepaid medical assistance and MinnesotaCare programs under sections 245.493 to 245.495.

Sec. 9.

Minnesota Statutes 2016, section 253B.045, subdivision 5, is amended to read:

Subd. 5.

Health plan company; definition.

For purposes of this section, "health plan
company" has the meaning given it in section 62Q.01, subdivision 4, and also includes a
demonstration provider as defined in section 256B.69, subdivision 2, paragraph (b), a deleted text begin county
or group of counties participating indeleted text end county-based purchasing deleted text begin according to section 256B.692deleted text end new text begin
organization operating under chapter 62Wnew text end , and a children's mental health collaborative
under contract to provide medical assistance for individuals enrolled in the prepaid medical
assistance and MinnesotaCare programs according to sections 245.493 to 245.495.

Sec. 10.

Minnesota Statutes 2016, section 256.015, subdivision 1, is amended to read:

Subdivision 1.

State agency has lien.

When the state agency provides, pays for, or
becomes liable for medical care or furnishes subsistence or other payments to a person, the
agency shall have a lien for the cost of the care and payments on any and all causes of action
or recovery rights under any policy, plan, or contract providing benefits for health care or
injury which accrue to the person to whom the care or payments were furnished, or to the
person's legal representatives, as a result of the occurrence that necessitated the medical
care, subsistence, or other payments. For purposes of this section, "state agency" includes
deleted text begin prepaid healthdeleted text end new text begin managed carenew text end plans new text begin and county-based purchasing plans new text end under contract with
the commissioner according to sections 256B.69, 256L.01, subdivision 7, 256L.03,
subdivision 6, and 256L.12, and Minnesota Statutes 2009 Supplement, section 256D.03,
subdivision 4, paragraph (c); children's mental health collaboratives under section 245.493;
demonstration projects for persons with disabilities under section 256B.77; new text begin and new text end nursing
homes under the alternative payment demonstration project under section 256B.434deleted text begin ; and
county-based purchasing entities under section 256B.692deleted text end .

Sec. 11.

Minnesota Statutes 2016, section 256B.042, subdivision 1, is amended to read:

Subdivision 1.

Lien for cost of care.

When the state agency provides, pays for, or
becomes liable for medical care, it shall have a lien for the cost of the care upon any and
all causes of action or recovery rights under any policy, plan, or contract providing benefits
for health care or injury, which accrue to the person to whom the care was furnished, or to
the person's legal representatives, as a result of the illness or injuries which necessitated the
medical care. For purposes of this section, "state agency" includes deleted text begin prepaid healthdeleted text end new text begin managed
care plans and county-based purchasing new text end plans under contract with the commissioner
according to sections 256B.69 and 256L.12 and Minnesota Statutes 2009 Supplement,
section 256D.03, subdivision 4, paragraph (c); children's mental health collaboratives under
section 245.493; demonstration projects for persons with disabilities under section 256B.77;
new text begin and new text end nursing facilities under the alternative payment demonstration project under section
256B.434deleted text begin ; and county-based purchasing entities under section 256B.692deleted text end .

Sec. 12.

Minnesota Statutes 2016, section 256B.056, subdivision 6, is amended to read:

Subd. 6.

Assignment of benefits.

To be eligible for medical assistance a person must
have applied or must agree to apply all proceeds received or receivable by the person or the
person's legal representative from any third party liable for the costs of medical care. By
accepting or receiving assistance, the person is deemed to have assigned the person's rights
to medical support and third-party payments as required by title 19 of the Social Security
Act. Persons must cooperate with the state in establishing paternity and obtaining third-party
payments. By accepting medical assistance, a person assigns to the Department of Human
Services all rights the person may have to medical support or payments for medical expenses
from any other person or entity on their own or their dependent's behalf and agrees to
cooperate with the state in establishing paternity and obtaining third-party payments. Any
rights or amounts so assigned shall be applied against the cost of medical care paid for under
this chapter. Any assignment takes effect upon the determination that the applicant is eligible
for medical assistance and up to three months prior to the date of application if the applicant
is determined eligible for and receives medical assistance benefits. The application must
contain a statement explaining this assignment. For the purposes of this section, "the
Department of Human Services or the state" includes deleted text begin prepaid healthdeleted text end new text begin managed care plans
and county-based purchasingnew text end plans under contract with the commissioner according to
sections 256B.69 and 256L.12 and Minnesota Statutes 2009 Supplement, section 256D.03,
subdivision 4, paragraph (c); children's mental health collaboratives under section 245.493;
demonstration projects for persons with disabilities under section 256B.77; new text begin and new text end nursing
facilities under the alternative payment demonstration project under section 256B.434deleted text begin ; and
the county-based purchasing entities under section 256B.692deleted text end .

Sec. 13.

Minnesota Statutes 2016, section 256B.0625, subdivision 9, is amended to read:

Subd. 9.

Dental services.

(a) Medical assistance covers dental services.

(b) Medical assistance dental coverage for nonpregnant adults is limited to the following
services:

(1) comprehensive exams, limited to once every five years;

(2) periodic exams, limited to one per year;

(3) limited exams;

(4) bitewing x-rays, limited to one per year;

(5) periapical x-rays;

(6) panoramic x-rays, limited to one every five years except (1) when medically necessary
for the diagnosis and follow-up of oral and maxillofacial pathology and trauma or (2) once
every two years for patients who cannot cooperate for intraoral film due to a developmental
disability or medical condition that does not allow for intraoral film placement;

(7) prophylaxis, limited to one per year;

(8) application of fluoride varnish, limited to one per year;

(9) posterior fillings, all at the amalgam rate;

(10) anterior fillings;

(11) endodontics, limited to root canals on the anterior and premolars only;

(12) removable prostheses, each dental arch limited to one every six years;

(13) oral surgery, limited to extractions, biopsies, and incision and drainage of abscesses;

(14) palliative treatment and sedative fillings for relief of pain; and

(15) full-mouth debridement, limited to one every five years.

(c) In addition to the services specified in paragraph (b), medical assistance covers the
following services for adults, if provided in an outpatient hospital setting or freestanding
ambulatory surgical center as part of outpatient dental surgery:

(1) periodontics, limited to periodontal scaling and root planing once every two years;

(2) general anesthesia; and

(3) full-mouth survey once every five years.

(d) Medical assistance covers medically necessary dental services for children and
pregnant women. The following guidelines apply:

(1) posterior fillings are paid at the amalgam rate;

(2) application of sealants are covered once every five years per permanent molar for
children only;

(3) application of fluoride varnish is covered once every six months; and

(4) orthodontia is eligible for coverage for children only.

(e) In addition to the services specified in paragraphs (b) and (c), medical assistance
covers the following services for adults:

(1) house calls or extended care facility calls for on-site delivery of covered services;

(2) behavioral management when additional staff time is required to accommodate
behavioral challenges and sedation is not used;

(3) oral or IV sedation, if the covered dental service cannot be performed safely without
it or would otherwise require the service to be performed under general anesthesia in a
hospital or surgical center; and

(4) prophylaxis, in accordance with an appropriate individualized treatment plan, but
no more than four times per year.

(f) The commissioner shall not require prior authorization for the services included in
paragraph (e), clauses (1) to (3), and shall prohibit managed care and county-based purchasing
plans from requiring prior authorization for the services included in paragraph (e), clauses
(1) to (3), when provided under sections 256B.69deleted text begin , 256B.692,deleted text end and 256L.12.

Sec. 14.

Minnesota Statutes 2016, section 256B.0631, subdivision 1, is amended to read:

Subdivision 1.

Cost-sharing.

(a) Except as provided in subdivision 2, the medical
assistance benefit plan shall include the following cost-sharing for all recipients, effective
for services provided on or after September 1, 2011:

(1) $3 per nonpreventive visit, except as provided in paragraph (b). For purposes of this
subdivision, a visit means an episode of service which is required because of a recipient's
symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting
by a physician or physician assistant, chiropractor, podiatrist, nurse midwife, advanced
practice nurse, audiologist, optician, or optometrist;

(2) $3.50 for nonemergency visits to a hospital-based emergency room, except that this
co-payment shall be increased to $20 upon federal approval;

(3) $3 per brand-name drug prescription and $1 per generic drug prescription, subject
to a $12 per month maximum for prescription drug co-payments. No co-payments shall
apply to antipsychotic drugs when used for the treatment of mental illness;

(4) a family deductible equal to $2.75 per month per family and adjusted annually by
the percentage increase in the medical care component of the CPI-U for the period of
September to September of the preceding calendar year, rounded to the next higher five-cent
increment; and

(5) total monthly cost-sharing must not exceed five percent of family income. For
purposes of this paragraph, family income is the total earned and unearned income of the
individual and the individual's spouse, if the spouse is enrolled in medical assistance and
also subject to the five percent limit on cost-sharing. This paragraph does not apply to
premiums charged to individuals described under section 256B.057, subdivision 9.

(b) Recipients of medical assistance are responsible for all co-payments and deductibles
in this subdivision.

(c) Notwithstanding paragraph (b), the commissioner, through the contracting process
under deleted text begin sectionsdeleted text end new text begin sectionnew text end 256B.69 deleted text begin and 256B.692deleted text end , may allow managed care plans and
county-based purchasing plans to waive the family deductible under paragraph (a), clause
(4). The value of the family deductible shall not be included in the capitation payment to
managed care plans and county-based purchasing plans. Managed care plans and
county-based purchasing plans shall certify annually to the commissioner the dollar value
of the family deductible.

(d) Notwithstanding paragraph (b), the commissioner may waive the collection of the
family deductible described under paragraph (a), clause (4), from individuals and allow
long-term care and waivered service providers to assume responsibility for payment.

(e) Notwithstanding paragraph (b), the commissioner, through the contracting process
under section 256B.0756 shall allow the pilot program in Hennepin County to waive
co-payments. The value of the co-payments shall not be included in the capitation payment
amount to the integrated health care delivery networks under the pilot program.

Sec. 15.

Minnesota Statutes 2016, section 256B.37, subdivision 2, is amended to read:

Subd. 2.

Civil action for recovery.

To recover under this section, the attorney general
may institute or join a civil action to enforce the subrogation rights of the commissioner
established under this section.

Any deleted text begin prepaid healthdeleted text end new text begin managed care plan or county-based purchasingnew text end plan providing
services under sections 256B.69 and 256L.12 and Minnesota Statutes 2009 Supplement,
section 256D.03, subdivision 4, paragraph (c); children's mental health collaboratives under
section 245.493; demonstration projects for persons with disabilities under section 256B.77;
new text begin or new text end nursing homes under the alternative payment demonstration project under section
256B.434deleted text begin ; or the county-based purchasing entity providing services under section 256B.692deleted text end
may retain legal representation to enforce the subrogation rights created under this section
or, if no action has been brought, may initiate and prosecute an independent action on their
behalf against a person, firm, or corporation that may be liable to the person to whom the
care or payment was furnished.

Sec. 16.

Minnesota Statutes 2016, section 256B.69, subdivision 5a, is amended to read:

Subd. 5a.

Managed care contracts.

(a) Managed care contracts under this section and
section 256L.12 shall be entered into or renewed on a calendar year basis. The commissioner
may issue separate contracts with requirements specific to services to medical assistance
recipients age 65 and older.

(b) A deleted text begin prepaid healthdeleted text end new text begin managed care plan or county-based purchasingnew text end plan providing
covered health services for eligible persons pursuant to chapters 256B and 256L is responsible
for complying with the terms of its contract with the commissioner. Requirements applicable
to managed care programs under chapters 256B and 256L established after the effective
date of a contract with the commissioner take effect when the contract is next issued or
renewed.

(c) The commissioner shall withhold five percent of deleted text begin managed care plandeleted text end new text begin the capitationnew text end
payments new text begin paid to a managed care plan or county-based purchasing plan new text end under this section
deleted text begin and county-based purchasing plan payments under section 256B.692deleted text end for the prepaid medical
assistance program pending completion of performance targets. Each performance target
must be quantifiable, objective, measurable, and reasonably attainable, except in the case
of a performance target based on a federal or state law or rule. Criteria for assessment of
each performance target must be outlined in writing prior to the contract effective date.
Clinical or utilization performance targets and their related criteria must consider
evidence-based research and reasonable interventions when available or applicable to the
populations served, and must be developed with input from external clinical experts and
stakeholders, including managed care plans, county-based purchasing plans, and providers.
The managed care or county-based purchasing plan must demonstrate, to the commissioner's
satisfaction, that the data submitted regarding attainment of the performance target is accurate.
The commissioner shall periodically change the administrative measures used as performance
targets in order to improve plan performance across a broader range of administrative
services. The performance targets must include measurement of plan efforts to contain
spending on health care services and administrative activities. The commissioner may adopt
plan-specific performance targets that take into account factors affecting only one plan,
including characteristics of the plan's enrollee population. The withheld funds must be
returned no sooner than July of the following year if performance targets in the contract are
achieved. The commissioner may exclude special demonstration projects under subdivision
23.

(d) The commissioner shall require that managed care plans use the assessment and
authorization processes, forms, timelines, standards, documentation, and data reporting
requirements, protocols, billing processes, and policies consistent with medical assistance
fee-for-service or the Department of Human Services contract requirements consistent with
medical assistance fee-for-service or the Department of Human Services contract
requirements for all personal care assistance services under section 256B.0659.

(e) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the health
plan's emergency department utilization rate for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. For 2012, the reduction shall be based on
the health plan's utilization in 2009. To earn the return of the withhold each subsequent
year, the managed care plan or county-based purchasing plan must achieve a qualifying
reduction of no less than ten percent of the plan's emergency department utilization rate for
medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described
in subdivisions 23 and 28, compared to the previous measurement year until the final
performance target is reached. When measuring performance, the commissioner must
consider the difference in health risk in a managed care or county-based purchasing plan's
membership in the baseline year compared to the measurement year, and work with the
managed care or county-based purchasing plan to account for differences that they agree
are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate
was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue for each consecutive contract
period until the plan's emergency room utilization rate for state health care program enrollees
is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance
and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the
health plans in meeting this performance target and shall accept payment withholds that
may be returned to the hospitals if the performance target is achieved.

(f) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the plan's
hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as
determined by the commissioner. To earn the return of the withhold each year, the managed
care plan or county-based purchasing plan must achieve a qualifying reduction of no less
than five percent of the plan's hospital admission rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and
28, compared to the previous calendar year until the final performance target is reached.
When measuring performance, the commissioner must consider the difference in health risk
in a managed care or county-based purchasing plan's membership in the baseline year
compared to the measurement year, and work with the managed care or county-based
purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization
rate was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue until there is a 25 percent
reduction in the hospital admission rate compared to the hospital admission rates in calendar
year 2011, as determined by the commissioner. The hospital admissions in this performance
target do not include the admissions applicable to the subsequent hospital admission
performance target under paragraph (g). Hospitals shall cooperate with the plans in meeting
this performance target and shall accept payment withholds that may be returned to the
hospitals if the performance target is achieved.

(g) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the plan's
hospitalization admission rates for subsequent hospitalizations within 30 days of a previous
hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. To earn the return of the withhold each year,
the managed care plan or county-based purchasing plan must achieve a qualifying reduction
of the subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees,
excluding enrollees in programs described in subdivisions 23 and 28, of no less than five
percent compared to the previous calendar year until the final performance target is reached.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a qualifying reduction in the
subsequent hospitalization rate was achieved. The commissioner shall structure the withhold
so that the commissioner returns a portion of the withheld funds in amounts commensurate
with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph must continue for each consecutive contract
period until the plan's subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and
28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar year
2011. Hospitals shall cooperate with the plans in meeting this performance target and shall
accept payment withholds that must be returned to the hospitals if the performance target
is achieved.

(h) Effective for services rendered on or after January 1, 2013, through December 31,
2013, the commissioner shall withhold 4.5 percent of deleted text begin managed care plandeleted text end new text begin the capitationnew text end
payments under this section deleted text begin and county-based purchasing plan payments under section
256B.692deleted text end for the prepaid medical assistance program. The withheld funds must be returned
no sooner than July 1 and no later than July 31 of the following year. The commissioner
may exclude special demonstration projects under subdivision 23.

(i) Effective for services rendered on or after January 1, 2014, the commissioner shall
withhold three percent of deleted text begin managed care plandeleted text end new text begin the capitationnew text end payments under this section deleted text begin and
county-based purchasing plan payments under section 256B.692deleted text end for the prepaid medical
assistance program. The withheld funds must be returned no sooner than July 1 and no later
than July 31 of the following year. The commissioner may exclude special demonstration
projects under subdivision 23.

(j) A managed care plan or a county-based purchasing plan deleted text begin under section 256B.692deleted text end may
include as admitted assets under section 62D.044 any amount withheld under this section
that is reasonably expected to be returned.

(k) Contracts between the commissioner and a deleted text begin prepaid healthdeleted text end new text begin managed care plan or
county-based purchasingnew text end plan are exempt from the set-aside and preference provisions of
section 16C.16, subdivisions 6, paragraph (a), and 7.

(l) The return of the withhold under paragraphs (h) and (i) is not subject to the
requirements of paragraph (c).

(m) Managed care plans and county-based purchasing plans shall maintain current and
fully executed agreements for all subcontractors, including bargaining groups, for
administrative services that are expensed to the state's public health care programs.
Subcontractor agreements determined to be material, as defined by the commissioner after
taking into account state contracting and relevant statutory requirements, must be in the
form of a written instrument or electronic document containing the elements of offer,
acceptance, consideration, payment terms, scope, duration of the contract, and how the
subcontractor services relate to state public health care programs. Upon request, the
commissioner shall have access to all subcontractor documentation under this paragraph.
Nothing in this paragraph shall allow release of information that is nonpublic data pursuant
to section 13.02.

Sec. 17.

Minnesota Statutes 2016, section 256B.69, subdivision 5i, is amended to read:

Subd. 5i.

Administrative expenses.

(a) Administrative costs paid to managed care plans
and county-based purchasing plans under this sectiondeleted text begin , section 256B.692,deleted text end and section 256L.12
must not exceed 6.6 percent of total payments made to all managed care plans and
county-based purchasing plans in aggregate across all state public health care programs,
based on payments expected to be made at the beginning of each calendar year. The
commissioner may reduce or eliminate administrative requirements to meet the administrative
cost limit. For purposes of this paragraph, administrative costs do not include premium
taxes paid under section 297I.05, subdivision 5, provider surcharges paid under section
256.9657, subdivision 3, and health insurance fees under section 9010 of the Affordable
Care Act.

(b) The following expenses are not allowable administrative expenses for rate-setting
purposes under this section:

(1) charitable contributions made by the managed care plan or the county-based
purchasing plan;

(2) compensation of individuals within the organization in excess of $200,000 such that
the allocation of compensation for an individual across all state public health care programs
in total cannot exceed $200,000;

(3) any penalties or fines assessed against the managed care plan or county-based
purchasing plan;

(4) any indirect marketing or advertising expenses of the managed care plan or
county-based purchasing plan, including but not limited to costs to promote the managed
care or county-based purchasing plan, costs of facilities used for special events, and costs
of displays, demonstrations, donations, and promotional items such as memorabilia, models,
gifts, and souvenirs. The commissioner may classify an item listed in this clause as an
allowable administrative expense for rate-setting purposes, if the commissioner determines
that the expense is incidental to an activity related to state public health care programs that
is an allowable cost for purposes of rate setting;

(5) any lobbying and political activities, events, or contributions;

(6) administrative expenses related to the provision of services not covered under the
state plan or waiver;

(7) alcoholic beverages and related costs;

(8) membership in any social, dining, or country club or organization; and

(9) entertainment, including amusement, diversion, and social activities, and any costs
directly associated with these costs, including but not limited to tickets to shows or sporting
events, meals, lodging, rentals, transportation, and gratuities.

For the purposes of this subdivision, compensation includes salaries, bonuses and incentives,
other reportable compensation on an IRS 990 form, retirement and other deferred
compensation, and nontaxable benefits. Charitable contributions under clause (1) include
payments for or to any organization or entity selected by the managed care plan or
county-based purchasing plan that is operated for charitable, educational, political, religious,
or scientific purposes, that are not related to medical and administrative services covered
under state public health care programs.

(c) Payments to a quality improvement organization are an allowable administrative
expense for rate-setting purposes under this section, to the extent they are allocated to a
state public health care program and approved by the commissioner.

(d) Where reasonably possible, expenses for an administrative item shall be directly
allocated so as to assign costs for an item to an individual state public health care program
when the cost can be specifically identified with and benefits the individual state public
health care program. For administrative services expensed to the state's public health care
programs, managed care plans and county-based purchasing plans must clearly identify and
separately record expense items listed under paragraph (b) in their accounting systems in a
manner that allows for independent verification of unallowable expenses for purposes of
determining payment rates for state public health care programs.

(e) Notwithstanding paragraph (a), the commissioner shall reduce administrative expenses
paid to managed care plans and county-based purchasing plans by .50 of a percentage point
for contracts beginning January 1, 2016, and ending December 31, 2017. To meet the
administrative reductions under this paragraph, the commissioner may reduce or eliminate
administrative requirements, exclude additional unallowable administrative expenses
identified under this section and resulting from the financial audits conducted under
subdivision 9d, and utilize competitive bidding to gain efficiencies through economies of
scale from increased enrollment. If the total reduction cannot be achieved through
administrative reduction, the commissioner may limit total rate increases on payments to
managed care plans and county-based purchasing plans.

Sec. 18.

Minnesota Statutes 2016, section 256B.69, subdivision 6b, is amended to read:

Subd. 6b.

Home and community-based waiver services.

(a) For individuals enrolled
in the Minnesota senior health options project authorized under subdivision 23, elderly
waiver services shall be covered according to the terms and conditions of the federal
agreement governing that demonstration project.

(b) For individuals under age 65 enrolled in demonstrations authorized under subdivision
23, home and community-based waiver services shall be covered according to the terms
and conditions of the federal agreement governing that demonstration project.

(c) The commissioner of human services shall issue requests for proposals for
collaborative service models between counties and managed care organizations to integrate
the home and community-based elderly waiver services and additional nursing home services
into the prepaid medical assistance program.

(d) Notwithstanding Minnesota Rules, part 9500.1457, subpart 1, item C, elderly waiver
services shall be covered statewide under the prepaid medical assistance program for all
individuals who are eligible according to section 256B.0915. The commissioner may develop
a schedule to phase in implementation of these waiver services, including collaborative
service models under paragraph (c). The commissioner shall phase in implementation
beginning with those counties participating deleted text begin under section 256B.692deleted text end new text begin in a county-based
purchasing plannew text end , and those counties where a viable collaborative service model has been
developed. In consultation with counties and all managed care organizations that have
expressed an interest in participating in collaborative service models, the commissioner
shall evaluate the models. The commissioner shall consider the evaluation in selecting the
most appropriate models for statewide implementation.

Sec. 19.

Minnesota Statutes 2016, section 256B.69, subdivision 9a, is amended to read:

Subd. 9a.

Administrative expense reporting.

Within the limit of available
appropriations, the commissioner shall work with the commissioner of health to identify
and collect data on administrative spending for state health care programs reported to the
commissioner of health by managed care plans under section 62D.08 and county-based
purchasing plans under section deleted text begin 256B.692deleted text end new text begin 62W.03new text end , provided that such data are consistent
with guidelines and standards for administrative spending that are developed by the
commissioner of health, and reported to the legislature under Laws 2008, chapter 364,
section 12. Data provided to the commissioner under this subdivision are nonpublic data as
defined under section 13.02.

Sec. 20.

Minnesota Statutes 2016, section 256B.69, subdivision 9c, is amended to read:

Subd. 9c.

Managed care financial reporting.

(a) The commissioner shall collect detailed
data regarding financials, provider payments, provider rate methodologies, and other data
as determined by the commissioner. The commissioner, in consultation with the
commissioners of health and commerce, and in consultation with managed care plans and
county-based purchasing plans, shall set uniform criteria, definitions, and standards for the
data to be submitted, and shall require managed care and county-based purchasing plans to
comply with these criteria, definitions, and standards when submitting data under this
section. In carrying out the responsibilities of this subdivision, the commissioner shall ensure
that the data collection is implemented in an integrated and coordinated manner that avoids
unnecessary duplication of effort. To the extent possible, the commissioner shall use existing
data sources and streamline data collection in order to reduce public and private sector
administrative costs. Nothing in this subdivision shall allow release of information that is
nonpublic data pursuant to section 13.02.

(b) Effective January 1, 2014, each managed care and county-based purchasing plan
must quarterly provide to the commissioner the following information on state public
programs, in the form and manner specified by the commissioner, according to guidelines
developed by the commissioner in consultation with managed care plans and county-based
purchasing plans under contract:

(1) an income statement by program;

(2) financial statement footnotes;

(3) quarterly profitability by program and population group;

(4) a medical liability summary by program and population group;

(5) received but unpaid claims report by program;

(6) services versus payment lags by program for hospital services, outpatient services,
physician services, other medical services, and pharmaceutical benefits;

(7) utilization reports that summarize utilization and unit cost information by program
for hospitalization services, outpatient services, physician services, and other medical
services;

(8) pharmaceutical statistics by program and population group for measures of price and
utilization of pharmaceutical services;

(9) subcapitation expenses by population group;

(10) third-party payments by program;

(11) all new, active, and closed subrogation cases by program;

(12) all new, active, and closed fraud and abuse cases by program;

(13) medical loss ratios by program;

(14) administrative expenses by category and subcategory by program that reconcile to
other state and federal regulatory agencies, including Minnesota Supplement Report #1A;

(15) revenues by program, including investment income;

(16) nonadministrative service payments, provider payments, and reimbursement rates
by provider type or service category, by program, paid by the managed care plan new text begin or
county-based purchasing plan new text end under this section deleted text begin or the county-based purchasing plan under
section 256B.692deleted text end to providers and vendors for administrative services under contract with
the plan, including but not limited to:

(i) individual-level provider payment and reimbursement rate data;

(ii) provider reimbursement rate methodologies by provider type, by program, including
a description of alternative payment arrangements and payments outside the claims process;

(iii) data on implementation of legislatively mandated provider rate changes; and

(iv) individual-level provider payment and reimbursement rate data and plan-specific
provider reimbursement rate methodologies by provider type, by program, including
alternative payment arrangements and payments outside the claims process, provided to the
commissioner under this subdivision are nonpublic data as defined in section 13.02;

(17) data on the amount of reinsurance or transfer of risk by program; and

(18) contribution to reserve, by program.

(c) In the event a report is published or released based on data provided under this
subdivision, the commissioner shall provide the report to managed care plans and
county-based purchasing plans 15 days prior to the publication or release of the report.
Managed care plans and county-based purchasing plans shall have 15 days to review the
report and provide comment to the commissioner.

The quarterly reports shall be submitted to the commissioner no later than 60 days after the
end of the previous quarter, except the fourth-quarter report, which shall be submitted by
April 1 of each year. The fourth-quarter report shall include audited financial statements,
parent company audited financial statements, an income statement reconciliation report,
and any other documentation necessary to reconcile the detailed reports to the audited
financial statements.

(d) Managed care plans and county-based purchasing plans shall certify to the
commissioner for the purpose of financial reporting for state public health care programs
under this subdivision that costs reported for state public health care programs include:

(1) only services covered under the state plan and waivers, and related allowable
administrative expenses; and

(2) the dollar value of unallowable and nonstate plan services, including both medical
and administrative expenditures, that have been excluded.

Sec. 21.

Minnesota Statutes 2016, section 256B.69, subdivision 9d, is amended to read:

Subd. 9d.

Financial and quality assurance audits.

(a) The commissioner shall require,
in the request for bids and resulting contracts with managed care plans and county-based
purchasing plans under this section deleted text begin and section 256B.692deleted text end , that each managed care plan and
county-based purchasing plan submit to and fully cooperate with the independent third-party
financial audits by the legislative auditor under subdivision 9e of the information required
under subdivision 9c, paragraph (b). Each contract with a managed care plan or county-based
purchasing plan under this section deleted text begin or section 256B.692deleted text end must provide the commissioner, the
legislative auditor, and vendors contracting with the legislative auditor, access to all data
required to complete audits under subdivision 9e.

(b) Each managed care plan and county-based purchasing plan providing services under
this section shall provide to the commissioner biweekly encounter data and claims data for
state public health care programs and shall participate in a quality assurance program that
verifies the timeliness, completeness, accuracy, and consistency of the data provided. The
commissioner shall develop written protocols for the quality assurance program and shall
make the protocols publicly available. The commissioner shall contract for an independent
third-party audit to evaluate the quality assurance protocols as to the capacity of the protocols
to ensure complete and accurate data and to evaluate the commissioner's implementation
of the protocols.

(c) Upon completion of the evaluation under paragraph (b), the commissioner shall
provide copies of the report to the legislative auditor and the chairs and ranking minority
members of the legislative committees with jurisdiction over health care policy and financing.

(d) Any actuary under contract with the commissioner to provide actuarial services must
meet the independence requirements under the professional code for fellows in the Society
of Actuaries and must not have provided actuarial services to a managed care plan or
county-based purchasing plan that is under contract with the commissioner pursuant to this
section deleted text begin and section 256B.692deleted text end during the period in which the actuarial services are being
provided. An actuary or actuarial firm meeting the requirements of this paragraph must
certify and attest to the rates paid to the managed care plans and county-based purchasing
plans under this section deleted text begin and section 256B.692deleted text end , and the certification and attestation must be
auditable.

(e) The commissioner, to the extent of available funding, shall conduct ad hoc audits of
state public health care program administrative and medical expenses reported by managed
care plans and county-based purchasing plans. This includes: financial and encounter data
reported to the commissioner under subdivision 9c, including payments to providers and
subcontractors; supporting documentation for expenditures; categorization of administrative
and medical expenses; and allocation methods used to attribute administrative expenses to
state public health care programs. These audits also must monitor compliance with data and
financial report certification requirements established by the commissioner for the purposes
of managed care capitation payment rate-setting. The managed care plans and county-based
purchasing plans shall fully cooperate with the audits in this subdivision. The commissioner
shall report to the chairs and ranking minority members of the legislative committees with
jurisdiction over health and human services policy and finance by February 1, 2016, and
each February 1 thereafter, the number of ad hoc audits conducted in the past calendar year
and the results of these audits.

(f) Nothing in this subdivision shall allow the release of information that is nonpublic
data pursuant to section 13.02.

Sec. 22.

Minnesota Statutes 2016, section 256B.69, subdivision 26, is amended to read:

Subd. 26.

American Indian recipients.

(a) For American Indian recipients of medical
assistance who are required to enroll with a demonstration provider under subdivision 4 deleted text begin or
in a county-based purchasing entity, if applicable, under section 256B.692deleted text end , medical assistance
shall cover health care services provided at Indian health services facilities and facilities
operated by a tribe or tribal organization under funding authorized by United States Code,
title 25, sections 450f to 450n, or title III of the Indian Self-Determination and Education
Assistance Act, Public Law 93-638, if those services would otherwise be covered under
section 256B.0625. Payments for services provided under this subdivision shall be made
on a fee-for-service basis, and may, at the option of the tribe or tribal organization, be made
according to rates authorized under sections 256.969, subdivision 16, and 256B.0625,
subdivision 34. Implementation of this purchasing model is contingent on federal approval.

(b) The commissioner of human services, in consultation with the tribal governments,
shall develop a plan for tribes to assist in the enrollment process for American Indian
recipients enrolled in the prepaid medical assistance program under this section. This plan
also shall address how tribes will be included in ensuring the coordination of care for
American Indian recipients between Indian health service or tribal providers and other
providers.

(c) For purposes of this subdivision, "American Indian" has the meaning given to persons
to whom services will be provided for in Code of Federal Regulations, title 42, section
36.12.

Sec. 23.

Minnesota Statutes 2017 Supplement, section 256B.6925, subdivision 4, is
amended to read:

Subd. 4.

Language and accessibility standards.

(a) Managed care contracts entered
into under section 256B.69deleted text begin , 256B.692,deleted text end or 256L.12deleted text begin ,deleted text end must require a managed care deleted text begin organizationdeleted text end new text begin
plan or county-based purchasing plannew text end to provide language assistance, and auxiliary aids and
services, if requested, to ensure access to a managed care organization's programs and
services, as required under United States Code, title 42, sections 18116 and 2000d, and any
other federal regulations or guidance from the United States Department of Health and
Human Services.

(b) The commissioner shall establish a methodology to identify the prevalent non-English
languages spoken by enrollees and potential enrollees throughout Minnesota and in each
managed care organization's service area.

(c) The commissioner shall ensure that oral interpretation is provided in all languages
and written interpretation is provided in each prevalent non-English language, and that both
are available to enrollees and potential enrollees free of charge. Oral interpretation services
shall include the use of auxiliary aids, TTY/TDY, and American sign language.

(d) All written materials that target potential enrollees and are provided to enrollees,
including the provider directory, enrollee handbook, appeals and grievance notices, and
denial and termination notices, must:

(1) use at least 12-point font;

(2) be written at a 7th grade reading level;

(3) be available in alternative formats and through auxiliary aids and services that consider
the special needs of the enrollee, including an enrollee with a disability or limited English
proficiency;

(4) use taglines that consist of short statements in each of the prevalent non-English
languages, in an 18-point font, that explain the availability of language interpreter services
free of charge; and

(5) explain how to request auxiliary aids and services, including the provision of the
materials in alternative formats and the TTY/TDY telephone number of the managed care
organization's customer service unit and the department's enrollee support system.

(e) For purposes of this subdivision, "prevalent non-English language" means a
non-English language that is determined by the commissioner to be spoken by a significant
number or percentage of potential enrollees and enrollees with limited proficiency in English.

Sec. 24.

Minnesota Statutes 2016, section 256B.694, is amended to read:

256B.694 SOLE-SOURCE OR SINGLE-PLAN MANAGED CARE CONTRACT.

The commissioner shall consider, and may approve, contracting on a single-health plan
basis with county-based purchasing plans, or with other qualified health plans that have
coordination arrangements with counties, to serve persons enrolled in state public health
care programs, in order to promote better coordination or integration of health care services,
social services and other community-based services, provided that all requirements applicable
to health plan purchasing, including those in deleted text begin sectionsdeleted text end new text begin sectionnew text end 256B.69 deleted text begin and 256B.692deleted text end , are
satisfied.

Sec. 25.

Minnesota Statutes 2016, section 256B.756, subdivision 3, is amended to read:

Subd. 3.

Health plans.

Payments to managed care and county-based purchasing plans
under deleted text begin sectionsdeleted text end new text begin sectionnew text end 256B.69deleted text begin , 256B.692,deleted text end or 256L.12 shall be reduced for services provided
on or after October 1, 2009, to reflect the adjustments in subdivision 1.

Sec. 26.

Minnesota Statutes 2017 Supplement, section 256B.76, subdivision 1, is amended
to read:

Subdivision 1.

Physician reimbursement.

(a) Effective for services rendered on or after
October 1, 1992, the commissioner shall make payments for physician services as follows:

(1) payment for level one Centers for Medicare and Medicaid Services' common
procedural coding system codes titled "office and other outpatient services," "preventive
medicine new and established patient," "delivery, antepartum, and postpartum care," "critical
care," cesarean delivery and pharmacologic management provided to psychiatric patients,
and level three codes for enhanced services for prenatal high risk, shall be paid at the lower
of (i) submitted charges, or (ii) 25 percent above the rate in effect on June 30, 1992;

(2) payments for all other services shall be paid at the lower of (i) submitted charges,
or (ii) 15.4 percent above the rate in effect on June 30, 1992; and

(3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th
percentile of 1989, less the percent in aggregate necessary to equal the above increases
except that payment rates for home health agency services shall be the rates in effect on
September 30, 1992.

(b) Effective for services rendered on or after January 1, 2000, payment rates for physician
and professional services shall be increased by three percent over the rates in effect on
December 31, 1999, except for home health agency and family planning agency services.
The increases in this paragraph shall be implemented January 1, 2000, for managed care.

(c) Effective for services rendered on or after July 1, 2009, payment rates for physician
and professional services shall be reduced by five percent, except that for the period July
1, 2009, through June 30, 2010, payment rates shall be reduced by 6.5 percent for the medical
assistance and general assistance medical care programs, over the rates in effect on June
30, 2009. This reduction and the reductions in paragraph (d) do not apply to office or other
outpatient visits, preventive medicine visits and family planning visits billed by physicians,
advanced practice nurses, or physician assistants in a family planning agency or in one of
the following primary care practices: general practice, general internal medicine, general
pediatrics, general geriatrics, and family medicine. This reduction and the reductions in
paragraph (d) do not apply to federally qualified health centers, rural health centers, and
Indian health services. Effective October 1, 2009, payments made to managed care plans
and county-based purchasing plans under sections 256B.69deleted text begin , 256B.692,deleted text end and 256L.12 shall
reflect the payment reduction described in this paragraph.

(d) Effective for services rendered on or after July 1, 2010, payment rates for physician
and professional services shall be reduced an additional seven percent over the five percent
reduction in rates described in paragraph (c). This additional reduction does not apply to
physical therapy services, occupational therapy services, and speech pathology and related
services provided on or after July 1, 2010. This additional reduction does not apply to
physician services billed by a psychiatrist or an advanced practice nurse with a specialty in
mental health. Effective October 1, 2010, payments made to managed care plans and
county-based purchasing plans under sections 256B.69deleted text begin , 256B.692,deleted text end and 256L.12 shall reflect
the payment reduction described in this paragraph.

(e) Effective for services rendered on or after September 1, 2011, through June 30, 2013,
payment rates for physician and professional services shall be reduced three percent from
the rates in effect on August 31, 2011. This reduction does not apply to physical therapy
services, occupational therapy services, and speech pathology and related services.

(f) Effective for services rendered on or after September 1, 2014, payment rates for
physician and professional services, including physical therapy, occupational therapy, speech
pathology, and mental health services shall be increased by five percent from the rates in
effect on August 31, 2014. In calculating this rate increase, the commissioner shall not
include in the base rate for August 31, 2014, the rate increase provided under section
256B.76, subdivision 7. This increase does not apply to federally qualified health centers,
rural health centers, and Indian health services. Payments made to managed care plans and
county-based purchasing plans shall not be adjusted to reflect payments under this paragraph.

(g) Effective for services rendered on or after July 1, 2015, payment rates for physical
therapy, occupational therapy, and speech pathology and related services provided by a
hospital meeting the criteria specified in section 62Q.19, subdivision 1, paragraph (a), clause
(4), shall be increased by 90 percent from the rates in effect on June 30, 2015. Payments
made to managed care plans and county-based purchasing plans shall not be adjusted to
reflect payments under this paragraph.

(h) Any ratables effective before July 1, 2015, do not apply to autism early intensive
intervention benefits described in section 256B.0949.

Sec. 27.

Minnesota Statutes 2017 Supplement, section 256B.76, subdivision 2, is amended
to read:

Subd. 2.

Dental reimbursement.

(a) Effective for services rendered on or after October
1, 1992, the commissioner shall make payments for dental services as follows:

(1) dental services shall be paid at the lower of (i) submitted charges, or (ii) 25 percent
above the rate in effect on June 30, 1992; and

(2) dental rates shall be converted from the 50th percentile of 1982 to the 50th percentile
of 1989, less the percent in aggregate necessary to equal the above increases.

(b) Beginning October 1, 1999, the payment for tooth sealants and fluoride treatments
shall be the lower of (1) submitted charge, or (2) 80 percent of median 1997 charges.

(c) Effective for services rendered on or after January 1, 2000, payment rates for dental
services shall be increased by three percent over the rates in effect on December 31, 1999.

(d) Effective for services provided on or after January 1, 2002, payment for diagnostic
examinations and dental x-rays provided to children under age 21 shall be the lower of (1)
the submitted charge, or (2) 85 percent of median 1999 charges.

(e) The increases listed in paragraphs (b) and (c) shall be implemented January 1, 2000,
for managed care.

(f) Effective for dental services rendered on or after October 1, 2010, by a state-operated
dental clinic, payment shall be paid on a reasonable cost basis that is based on the Medicare
principles of reimbursement. This payment shall be effective for services rendered on or
after January 1, 2011, to recipients enrolled in managed care plans or county-based
purchasing plans.

(g) Beginning in fiscal year 2011, if the payments to state-operated dental clinics in
paragraph (f), including state and federal shares, are less than $1,850,000 per fiscal year, a
supplemental state payment equal to the difference between the total payments in paragraph
(f) and $1,850,000 shall be paid from the general fund to state-operated services for the
operation of the dental clinics.

(h) If the cost-based payment system for state-operated dental clinics described in
paragraph (f) does not receive federal approval, then state-operated dental clinics shall be
designated as critical access dental providers under subdivision 4, paragraph (b), and shall
receive the critical access dental reimbursement rate as described under subdivision 4,
paragraph (a).

(i) Effective for services rendered on or after September 1, 2011, through June 30, 2013,
payment rates for dental services shall be reduced by three percent. This reduction does not
apply to state-operated dental clinics in paragraph (f).

(j) Effective for services rendered on or after January 1, 2014, payment rates for dental
services shall be increased by five percent from the rates in effect on December 31, 2013.
This increase does not apply to state-operated dental clinics in paragraph (f), federally
qualified health centers, rural health centers, and Indian health services. Effective January
1, 2014, payments made to managed care plans and county-based purchasing plans under
sections 256B.69deleted text begin , 256B.692,deleted text end and 256L.12 shall reflect the payment increase described in
this paragraph.

(k) Effective for services rendered on or after July 1, 2015, through December 31, 2016,
the commissioner shall increase payment rates for services furnished by dental providers
located outside of the seven-county metropolitan area by the maximum percentage possible
above the rates in effect on June 30, 2015, while remaining within the limits of funding
appropriated for this purpose. This increase does not apply to state-operated dental clinics
in paragraph (f), federally qualified health centers, rural health centers, and Indian health
services. Effective January 1, 2016, through December 31, 2016, payments to managed care
plans and county-based purchasing plans under deleted text begin sectionsdeleted text end new text begin sectionnew text end 256B.69 deleted text begin and 256B.692deleted text end
shall reflect the payment increase described in this paragraph. The commissioner shall
require managed care and county-based purchasing plans to pass on the full amount of the
increase, in the form of higher payment rates to dental providers located outside of the
seven-county metropolitan area.

(l) Effective for services provided on or after January 1, 2017, the commissioner shall
increase payment rates by 9.65 percent for dental services provided outside of the
seven-county metropolitan area. This increase does not apply to state-operated dental clinics
in paragraph (f), federally qualified health centers, rural health centers, or Indian health
services. Effective January 1, 2017, payments to managed care plans and county-based
purchasing plans under deleted text begin sectionsdeleted text end new text begin sectionnew text end 256B.69 deleted text begin and 256B.692deleted text end shall reflect the payment
increase described in this paragraph.

(m) Effective for services provided on or after July 1, 2017, the commissioner shall
increase payment rates by 23.8 percent for dental services provided to enrollees under the
age of 21. This rate increase does not apply to state-operated dental clinics in paragraph (f),
federally qualified health centers, rural health centers, or Indian health centers. This rate
increase does not apply to managed care plans and county-based purchasing plans.

Sec. 28.

Minnesota Statutes 2017 Supplement, section 256B.761, is amended to read:

256B.761 REIMBURSEMENT FOR MENTAL HEALTH SERVICES.

(a) Effective for services rendered on or after July 1, 2001, payment for medication
management provided to psychiatric patients, outpatient mental health services, day treatment
services, home-based mental health services, and family community support services shall
be paid at the lower of (1) submitted charges, or (2) 75.6 percent of the 50th percentile of
1999 charges.

(b) Effective July 1, 2001, the medical assistance rates for outpatient mental health
services provided by an entity that operates: (1) a Medicare-certified comprehensive
outpatient rehabilitation facility; and (2) a facility that was certified prior to January 1, 1993,
with at least 33 percent of the clients receiving rehabilitation services in the most recent
calendar year who are medical assistance recipients, will be increased by 38 percent, when
those services are provided within the comprehensive outpatient rehabilitation facility and
provided to residents of nursing facilities owned by the entity.

(c) The commissioner shall establish three levels of payment for mental health diagnostic
assessment, based on three levels of complexity. The aggregate payment under the tiered
rates must not exceed the projected aggregate payments for mental health diagnostic
assessment under the previous single rate. The new rate structure is effective January 1,
2011, or upon federal approval, whichever is later.

(d) In addition to rate increases otherwise provided, the commissioner may restructure
coverage policy and rates to improve access to adult rehabilitative mental health services
under section 256B.0623 and related mental health support services under section 256B.021,
subdivision 4, paragraph (f), clause (2). For state fiscal years 2015 and 2016, the projected
state share of increased costs due to this paragraph is transferred from adult mental health
grants under sections 245.4661 and 256E.12. The transfer for fiscal year 2016 is a permanent
base adjustment for subsequent fiscal years. Payments made to managed care plans and
county-based purchasing plans under sections 256B.69deleted text begin , 256B.692,deleted text end and 256L.12 shall reflect
the rate changes described in this paragraph.

(e) Any ratables effective before July 1, 2015, do not apply to autism early intensive
intervention benefits described in section 256B.0949.

Sec. 29.

Minnesota Statutes 2016, section 256B.77, subdivision 3, is amended to read:

Subd. 3.

Assurances to commissioner of health.

A county authority that elects to
participate in a demonstration project for people with disabilities under this section is not
required to obtain a certificate of authority under chapter 62D or 62N. A county authority
that elects to participate in a demonstration project for people with disabilities under this
section must assure the commissioner of health that the requirements of chapters 62D deleted text begin anddeleted text end new text begin ,new text end
62N, and deleted text begin section 256B.692, subdivision 2,deleted text end new text begin 62Wnew text end are met. All enforcement and rulemaking
powers available under chapters 62D, 62J, 62M, 62N, and 62Q are granted to the
commissioner of health with respect to the county authorities that contract with the
commissioner to purchase services in a demonstration project for people with disabilities
under this section.

Sec. 30.

Minnesota Statutes 2016, section 256L.01, subdivision 7, is amended to read:

Subd. 7.

Participating entity.

"Participating entity" means a health carrier as defined
in section 62A.01, subdivision 2; a county-based purchasing deleted text begin plan establisheddeleted text end new text begin organization
operatingnew text end under deleted text begin section 256B.692deleted text end new text begin chapter 62Wnew text end ; an accountable care organization or other
entity operating a health care delivery systems demonstration project authorized under
section 256B.0755; an entity operating a county integrated health care delivery network
pilot project authorized under section 256B.0756; or a network of health care providers
established to offer services under MinnesotaCare.

Sec. 31.

Minnesota Statutes 2016, section 256L.12, subdivision 9, is amended to read:

Subd. 9.

Rate setting; performance withholds.

(a) Rates will be prospective, per capita,
where possible. The commissioner may allow health plans to arrange for inpatient hospital
services on a risk or nonrisk basis. The commissioner shall consult with an independent
actuary to determine appropriate rates.

(b) For services rendered on or after January 1, 2004, the commissioner shall withhold
five percent of managed care plan payments and county-based purchasing plan payments
under this section pending completion of performance targets. Each performance target
must be quantifiable, objective, measurable, and reasonably attainable, except in the case
of a performance target based on a federal or state law or rule. Criteria for assessment of
each performance target must be outlined in writing prior to the contract effective date.
Clinical or utilization performance targets and their related criteria must consider
evidence-based research and reasonable interventions, when available or applicable to the
populations served, and must be developed with input from external clinical experts and
stakeholders, including managed care plans, county-based purchasing plans, and providers.
The managed care plan must demonstrate, to the commissioner's satisfaction, that the data
submitted regarding attainment of the performance target is accurate. The commissioner
shall periodically change the administrative measures used as performance targets in order
to improve plan performance across a broader range of administrative services. The
performance targets must include measurement of plan efforts to contain spending on health
care services and administrative activities. The commissioner may adopt plan-specific
performance targets that take into account factors affecting only one plan, such as
characteristics of the plan's enrollee population. The withheld funds must be returned no
sooner than July 1 and no later than July 31 of the following calendar year if performance
targets in the contract are achieved.

(c) For services rendered on or after January 1, 2011, the commissioner shall withhold
an additional three percent of managed care plan or county-based purchasing plan payments
under this section. The withheld funds must be returned no sooner than July 1 and no later
than July 31 of the following calendar year. The return of the withhold under this paragraph
is not subject to the requirements of paragraph (b).

(d) Effective for services rendered on or after January 1, 2011, through December 31,
2011, the commissioner shall include as part of the performance targets described in
paragraph (b) a reduction in the plan's emergency room utilization rate for state health care
program enrollees by a measurable rate of five percent from the plan's utilization rate for
the previous calendar year. Effective for services rendered on or after January 1, 2012, the
commissioner shall include as part of the performance targets described in paragraph (b) a
reduction in the health plan's emergency department utilization rate for medical assistance
and MinnesotaCare enrollees, as determined by the commissioner. For 2012, the reductions
shall be based on the health plan's utilization in 2009. To earn the return of the withhold
each subsequent year, the managed care plan or county-based purchasing plan must achieve
a qualifying reduction of no less than ten percent of the plan's utilization rate for medical
assistance and MinnesotaCare enrollees, excluding enrollees in programs described in
section 256B.69, subdivisions 23 and 28, compared to the previous measurement year, until
the final performance target is reached. When measuring performance, the commissioner
must consider the difference in health risk in a managed care or county-based purchasing
plan's membership in the baseline year compared to the measurement year, and work with
the managed care or county-based purchasing plan to account for differences that they agree
are significant.

(e) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (b) a reduction in the plan's
hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as
determined by the commissioner. To earn the return of the withhold each year, the managed
care plan or county-based purchasing plan must achieve a qualifying reduction of no less
than five percent of the plan's hospital admission rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in section 256B.69,
subdivisions 23 and 28, compared to the previous calendar year, until the final performance
target is reached. When measuring performance, the commissioner must consider the
difference in health risk in a managed care or county-based purchasing plan's membership
in the baseline year compared to the measurement year, and work with the managed care
or county-based purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization
rate was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue until there is a 25 percent
reduction in the hospitals admission rate compared to the hospital admission rate for calendar
year 2011 as determined by the commissioner. Hospitals shall cooperate with the plans in
meeting this performance target and shall accept payment withholds that may be returned
to the hospitals if the performance target is achieved. The hospital admissions in this
performance target do not include the admissions applicable to the subsequent hospital
admission performance target under paragraph (f).

(f) Effective for services provided on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (b) a reduction in the plan's
hospitalization rate for a subsequent hospitalization within 30 days of a previous
hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. To earn the return of the withhold each year,
the managed care plan or county-based purchasing plan must achieve a qualifying reduction
of the subsequent hospital admissions rate for medical assistance and MinnesotaCare
enrollees, excluding enrollees in programs described in section 256B.69, subdivisions 23
and 28, of no less than five percent compared to the previous calendar year until the final
performance target is reached.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a reduction in the subsequent
hospitalization rate was achieved. The commissioner shall structure the withhold so that
the commissioner returns a portion of the withheld funds in amounts commensurate with
achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph must continue for each consecutive contract
period until the plan's subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees is reduced by 25 percent of the plan's subsequent hospitalization
rate for calendar year 2011. Hospitals shall cooperate with the plans in meeting this
performance target and shall accept payment withholds that must be returned to the hospitals
if the performance target is achieved.

(g) A managed care plan or a county-based purchasing plan deleted text begin under section 256B.692deleted text end
may include as admitted assets under section 62D.044 any amount withheld under this
section that is reasonably expected to be returned.

Sec. 32.

Minnesota Statutes 2016, section 256L.121, subdivision 3, is amended to read:

Subd. 3.

Coordination with state-administered health programs.

The commissioner
shall coordinate the administration of the MinnesotaCare program with medical assistance
to maximize efficiency and improve the continuity of care. This includes, but is not limited
to:

(1) establishing geographic areas for MinnesotaCare that are consistent with the
geographic areas of the medical assistance program, within which participating entities may
offer health plans;

(2) requiring, as a condition of participation in MinnesotaCare, participating entities to
also participate in the medical assistance program;

(3) complying with sections 256B.69, subdivision 3adeleted text begin ; 256B.692, subdivision 1;deleted text end new text begin ,new text end and
256B.694deleted text begin ,deleted text end when contracting with MinnesotaCare participating entities;

(4) providing MinnesotaCare enrollees, to the extent possible, with the option to remain
in the same health plan and provider network, if they later become eligible for medical
assistance or coverage through MNsure and if, in the case of becoming eligible for medical
assistance, the enrollee's MinnesotaCare health plan is also a medical assistance health plan
in the enrollee's county of residence; and

(5) establishing requirements and criteria for selection that ensure that covered health
care services will be coordinated with local public health services, social services, long-term
care services, mental health services, and other local services affecting enrollees' health,
access, and quality of care.

SF 3252

Bill Text Versions

ARTICLE 1

COUNTY-BASED PURCHASING

Section 1.

new text begin [62W.01] CITATION AND PURPOSE. new text end

new text begin Subdivision 1. new text end

new text begin Citation. new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

Sec. 2.

new text begin [62W.02] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin Subd. 3. new text end

new text begin County-based purchasing organization. new text end

new text begin Subd. 4. new text end

new text begin County-based purchasing plan. new text end

new text begin Subd. 5. new text end

new text begin Enrollee. new text end

new text begin Subd. 6. new text end

new text begin Rural. new text end

new text begin Subd. 7. new text end

new text begin Service area. new text end

Sec. 3.

new text begin [62W.03] COUNTY-BASED PURCHASING ORGANIZATIONS. new text end

new text begin Subdivision 1. new text end

new text begin Certificate of authority. new text end

new text begin Subd. 2. new text end

new text begin Local planning process. new text end

new text begin Subd. 3. new text end

new text begin Application review. new text end

new text begin Subd. 4. new text end

new text begin Certificate of authority requirements. new text end

new text begin Subd. 5. new text end

new text begin Fiscal solvency. new text end

new text begin Subd. 6. new text end

new text begin Issuance; notice. new text end

new text begin Subd. 7. new text end

new text begin Enforcement; rulemaking. new text end

new text begin Subd. 8. new text end

new text begin Continued compliance. new text end

new text begin Subd. 9. new text end

new text begin Hold harmless. new text end

Sec. 4.

new text begin [62W.04] FEES. new text end

Sec. 5.

new text begin [62W.05] EXISTING COUNTY-BASED PURCHASING ORGANIZATIONS. new text end

Sec. 6.

new text begin [62W.06] EXPENDITURE OF REVENUES. new text end

Sec. 7.

new text begin [62W.07] PARTICIPATION IN GOVERNMENT PROGRAMS. new text end

new text begin Subdivision 1. new text end

new text begin County proposals. new text end

new text begin Subd. 2. new text end

new text begin Notice. new text end

new text begin Subd. 3. new text end

new text begin Transfer of risk. new text end

Sec. 8.

Subd. 2.

Definitions.

Sec. 9.

Subd. 3a.

County authority.

Sec. 10. new text begin REPEALER.new text end

ARTICLE 2

CONFORMING CHANGES

Section 1.

Subd. 2b.

Audits of managed care organizations.

Sec. 2.

62A.045 PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT HEALTH PROGRAMS.

Sec. 3.

Subdivision 1.

Procedures for appeal.

Sec. 4.

Subd. 2.

Definitions.

new text begin [62W.01] CITATION AND PURPOSE.
new text end

new text begin [62W.02] DEFINITIONS.
new text end

new text begin [62W.03] COUNTY-BASED PURCHASING ORGANIZATIONS.
new text end

new text begin [62W.04] FEES.
new text end

new text begin [62W.05] EXISTING COUNTY-BASED PURCHASING ORGANIZATIONS.
new text end

new text begin [62W.06] EXPENDITURE OF REVENUES.
new text end

new text begin [62W.07] PARTICIPATION IN GOVERNMENT PROGRAMS.
new text end

Sec. 10. new text begin REPEALER.
new text end

62A.045 PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT
HEALTH PROGRAMS.