SF 3543

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/20/2024 08:34am

A bill for an act
relating to health care; requiring health maintenance organizations to be nonprofit
corporations organized under chapter 317A; amending Minnesota Statutes 2022,
sections 62D.02, subdivision 4; 62D.03, subdivision 1; 62D.05, subdivision 1;
62D.06, subdivision 1; 62D.19; 62E.02, subdivision 3.

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

Section 1.

Minnesota Statutes 2022, section 62D.02, subdivision 4, is amended to read:

Subd. 4.

Health maintenance organization.

"Health maintenance organization" means
a deleted text begin foreign or domestic deleted text end new text begin nonprofit new text end corporation new text begin organized under chapter 317A new text end , or a local
governmental unit as defined in subdivision 11, controlled and operated as provided in
sections 62D.01 to 62D.30, which provides, either directly or through arrangements with
providers or other persons, comprehensive health maintenance services, or arranges for the
provision of these services, to enrollees on the basis of a fixed prepaid sum without regard
to the frequency or extent of services furnished to any particular enrollee.

Sec. 2.

Minnesota Statutes 2022, section 62D.03, subdivision 1, is amended to read:

Subdivision 1.

Certificate of authority required.

Notwithstanding any law of this state
to the contrary, any deleted text begin foreign or domestic deleted text end new text begin nonprofit new text end corporation organized to do so or a local
governmental unit may apply to the commissioner of health for a certificate of authority to
establish and operate a health maintenance organization in compliance with sections 62D.01
to 62D.30. No person shall establish or operate a health maintenance organization in this
state, nor sell or offer to sell, or solicit offers to purchase or receive advance or periodic
consideration in conjunction with a health maintenance organization or health maintenance
contract unless the organization has a certificate of authority under sections 62D.01 to
62D.30.

Sec. 3.

Minnesota Statutes 2022, section 62D.05, subdivision 1, is amended to read:

Subdivision 1.

Authority granted.

Any new text begin nonprofit new text end corporation or local governmental
unit may, upon obtaining a certificate of authority as required in sections 62D.01 to 62D.30,
operate as a health maintenance organization.

Sec. 4.

Minnesota Statutes 2022, section 62D.06, subdivision 1, is amended to read:

Subdivision 1.

Governing body composition; enrollee advisory body.

The governing
body of any health maintenance organization which is a new text begin nonprofit new text end corporation may include
enrollees, providers, or other individuals; provided, however, that after a health maintenance
organization which is a new text begin nonprofit new text end corporation has been authorized under sections 62D.01
to 62D.30 for one year, at least 40 percent of the governing body shall be composed of
enrollees and members elected by the enrollees and members from among the enrollees and
members. For purposes of this section, "member" means a consumer who receives health
care services through a self-insured contract that is administered by the health maintenance
organization or its related third-party administrator. The number of members elected to the
governing body shall not exceed the number of enrollees elected to the governing body. An
enrollee or member elected to the governing board may not be a person:

(1) whose occupation involves, or before retirement involved, the administration of
health activities or the provision of health services;

(2) who is or was employed by a health care facility as a licensed health professional;
or

(3) who has or had a direct substantial financial or managerial interest in the rendering
of a health service, other than the payment of a reasonable expense reimbursement or
compensation as a member of the board of a health maintenance organization.

After a health maintenance organization which is a local governmental unit has been
authorized under sections 62D.01 to 62D.30 for one year, an enrollee advisory body shall
be established. The enrollees who make up this advisory body shall be elected by the enrollees
from among the enrollees.

Sec. 5.

Minnesota Statutes 2022, section 62D.19, is amended to read:

62D.19 UNREASONABLE EXPENSES.

No health maintenance organization shall incur or pay for any expense of any nature
which is unreasonably high in relation to the value of the service or goods provided. The
commissioner of health shall implement and enforce this section by rules adopted under
this section.

In an effort to achieve the stated purposes of sections 62D.01 to 62D.30 new text begin , in order to
safeguard the underlying nonprofit status of health maintenance organizations, new text end and new text begin in order
new text end to ensure that the payment of health maintenance organization money to major participating
entities results in a corresponding benefit to the health maintenance organization and its
enrollees, when determining whether an organization has incurred an unreasonable expense
in relation to a major participating entity, due consideration shall be given to, in addition
to any other appropriate factors, whether the officers and trustees of the health maintenance
organization have acted with good faith and in the best interests of the health maintenance
organization in entering into, and performing under, a contract under which the health
maintenance organization has incurred an expense. The commissioner has standing to sue,
on behalf of a health maintenance organization, officers or trustees of the health maintenance
organization who have breached their fiduciary duty in entering into and performing such
contracts.

Sec. 6.

Minnesota Statutes 2022, section 62E.02, subdivision 3, is amended to read:

Subd. 3.

Health maintenance organization.

"Health maintenance organization" means
a new text begin nonprofit new text end corporation licensed and operated as provided in chapter 62D.

Sec. 7. new text begin TRANSITION.
new text end

new text begin (a) A health maintenance organization that has a certificate of authority under Minnesota
Statutes, chapter 62D, but that is not a nonprofit corporation organized under Minnesota
Statutes, chapter 317A, or a local governmental unit, as defined in Minnesota Statutes,
section 62D.02, subdivision 11:
new text end

new text begin (1) must not offer, sell, issue, or renew any health maintenance contracts on or after
August 1, 2024;
new text end

new text begin (2) may otherwise continue to operate as a health maintenance organization until .......;
and
new text end

new text begin (3) must provide notice to the health maintenance organization's enrollees as of August
1, 2024, of the date the health maintenance organization will cease to operate in this state
and any plans to transition enrollee coverage to another insurer. This notice must be provided
by .......
new text end

new text begin (b) The commissioner of health must not issue or renew a certificate of authority to
operate as a health maintenance organization on or after August 1, 2024, unless the entity
seeking the certificate of authority meets the requirements for a health maintenance
organization under Minnesota Statutes, chapter 62D, in effect on or after August 1, 2024.
new text end