SF 65

2nd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health care; modifying premium rate
restrictions; establishing expenditure limits;
modifying cost containment provisions; modifying
utilization review provisions; modifying certain loan
forgiveness programs; modifying medical assistance,
general assistance medical care, and MinnesotaCare
programs; requiring reports; appropriating money;
amending Minnesota Statutes 2004, sections 62A.65,
subdivision 3; 62D.12, subdivision 19; 62J.04,
subdivision 3, by adding a subdivision; 62J.041;
62J.301, subdivision 3; 62J.38; 62J.692, subdivision
3; 62L.08, subdivision 8; 62M.06, subdivisions 2, 3;
144.1501, subdivisions 2, 4; 256.045, subdivision 3a;
256.9693; 256B.0625, subdivision 3b, by adding a
subdivision; 256B.0627, subdivisions 1, 4, 9;
256B.0631, by adding a subdivision; 256D.03,
subdivision 4; 256L.07, subdivision 1; proposing
coding for new law in Minnesota Statutes, chapters
62J; 62Q; 256; 256B; 256L.

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

Section 1.

Minnesota Statutes 2004, section 62A.65,
subdivision 3, is amended to read:

Subd. 3.

Premium rate restrictions.

No individual health
plan may be offered, sold, issued, or renewed to a Minnesota
resident unless the premium rate charged is determined in
accordance with the following requirements:

(a) Premium rates must be no more than 25 percent above and
no more than 25 percent below the index rate charged to
individuals for the same or similar coverage, adjusted pro rata
for rating periods of less than one year. The premium
variations permitted by this paragraph must be based only upon
health status, claims experience, and occupation. For purposes
of this paragraph, health status includes refraining from
tobacco use or other actuarially valid lifestyle factors
associated with good health, provided that the lifestyle factor
and its effect upon premium rates have been determined by the
commissioner to be actuarially valid and have been approved by
the commissioner. Variations permitted under this paragraph
must not be based upon age or applied differently at different
ages. This paragraph does not prohibit use of a constant
percentage adjustment for factors permitted to be used under
this paragraph.

(b) Premium rates may vary based upon the ages of covered
persons only as provided in this paragraph. In addition to the
variation permitted under paragraph (a), each health carrier may
use an additional premium variation based upon age of up to plus
or minus 50 percent of the index rate.

(c) A health carrier may request approval by the
commissioner to establish no more than three geographic regions
and to establish separate index rates for each region, provided
that the index rates do not vary between any two regions by more
than 20 percent. Health carriers that do not do business in the
Minneapolis/St. Paul metropolitan area may request approval for
no more than two geographic regions, and clauses (2) and (3) do
not apply to approval of requests made by those health
carriers. The commissioner may grant approval if the following
conditions are met:

(1) the geographic regions must be applied uniformly by the
health carrier;

(2) one geographic region must be based on the
Minneapolis/St. Paul metropolitan area;

(3) for each geographic region that is rural, the index
rate for that region must not exceed the index rate for the
Minneapolis/St. Paul metropolitan area; and

(4) the health carrier provides actuarial justification
acceptable to the commissioner for the proposed geographic
variations in index rates, establishing that the variations are
based upon differences in the cost to the health carrier of
providing coverage.

(d) Health carriers may use rate cells and must file with
the commissioner the rate cells they use. Rate cells must be
based upon the number of adults or children covered under the
policy and may reflect the availability of Medicare coverage.
The rates for different rate cells must not in any way reflect
generalized differences in expected costs between principal
insureds and their spouses.

(e) In developing its index rates and premiums for a health
plan, a health carrier shall take into account only the
following factors:

(1) actuarially valid differences in rating factors
permitted under paragraphs (a) and (b); and

(2) actuarially valid geographic variations if approved by
the commissioner as provided in paragraph (c).

(f) All premium variations must be justified in initial
rate filings and upon request of the commissioner in rate
revision filings. All rate variations are subject to approval
by the commissioner.

(g) The loss ratio must comply with the section 62A.021
requirements for individual health plans.

(h) new text begin Notwithstanding paragraphs (a) to (g), new text end the rates must
not be approved deleted text begin , deleted text end unless the commissioner has determined that the
rates are reasonable. In determining reasonableness, the
commissioner shall deleted text begin consider the growth rates applied under
section 62J.04, subdivision 1, paragraph (b) deleted text end new text begin apply the premium
growth limits established under section 62J.04, subdivision 1b new text end ,
to the calendar year or years that the proposed premium rate
would be in effect, new text begin and shall consider new text end actuarially valid changes
in risks associated with the enrollee populations deleted text begin , deleted text end and
actuarially valid changes as a result of statutory changes in
Laws 1992, chapter 549.

Sec. 2.

Minnesota Statutes 2004, section 62D.12,
subdivision 19, is amended to read:

Subd. 19.

Coverage of service.

A health maintenance
organization may not deny or limit coverage of a service which
the enrollee has already received solely on the basis of lack of
prior authorization or second opinion, to the extent that the
service would otherwise have been covered under the member's
contract by the health maintenance organization had prior
authorization or second opinion been obtained. new text begin This subdivision
does not apply to health maintenance organizations for services
provided in the prepaid health programs administered under
chapter 256B, 256D, or 256L.
new text end

Sec. 3.

Minnesota Statutes 2004, section 62J.04, is
amended by adding a subdivision to read:

new text begin Subd. 1b. new text end

new text begin Premium growth limits. new text end

new text begin (a) For calendar year
2005 and each year thereafter, the commissioner shall set annual
premium growth limits for health plan companies. The premium
limits set by the commissioner for calendar years 2005 to 2010
shall not exceed the regional Consumer Price Index for urban
consumers for the preceding calendar year plus two percentage
points and an additional one percentage point to be used to
finance the implementation of the electronic medical record
system described under section 62J.565. The commissioner shall
ensure that the additional percentage point is being used to
provide financial assistance to health care providers to
implement electronic medical record systems either directly or
through an increase in reimbursement.
new text end

new text begin (b) For the calendar years beyond 2010, the rate of premium
growth shall be limited to the change in the Consumer Price
Index for urban consumers for the previous calendar year plus
two percentage points. The commissioners of health and commerce
shall make a recommendation to the legislature by January 15,
2009, regarding the continuation of the additional percentage
point to the growth limit described in paragraph (a). The
recommendation shall be based on the progress made by health
care providers in instituting an electronic medical record
system and in creating a statewide interactive electronic health
record system.
new text end

new text begin (c) The commissioner may add additional percentage points
as needed to the premium limit for a calendar year if a major
disaster, bioterrorism, or a public health emergency occurs that
results in higher health care costs. Any additional percentage
points must reflect the additional cost to the health care
system directly attributed to the disaster or emergency.
new text end

new text begin (d) The commissioner shall publish the annual premium
growth limits in the State Register by January 31 of the year
that the limits are to be in effect.
new text end

new text begin (e) For the purpose of this subdivision, premium growth is
measured as the percentage change in per member, per month
premium revenue from the current year to the previous year.
Premium growth rates shall be calculated for the following lines
of business: individual, small group, and large group. Data
used for premium growth rate calculations shall be submitted as
part of the cost containment filing under section 62J.38.
new text end

new text begin (f) For purposes of this subdivision, "health plan company"
has the meaning given in section 62J.041.
new text end

new text begin (g) For coverage that is provided by a health plan company
under the terms of a contract with the Department of Employee
Relations, the commissioner of employee relations shall direct
the contracting health plan companies to reduce reimbursement to
providers in order to meet the premium growth limitations
required by this section.
new text end

Sec. 4.

Minnesota Statutes 2004, section 62J.04,
subdivision 3, is amended to read:

Subd. 3.

Cost containment duties.

The commissioner shall:

(1) establish statewide and regional cost containment goals
for total health care spending under this section and collect
data as described in sections 62J.38 to 62J.41 to monitor
statewide achievement of the cost containment goals new text begin and premium
growth limits new text end ;

(2) divide the state into no fewer than four regions, with
one of those regions being the Minneapolis/St. Paul metropolitan
statistical area but excluding Chisago, Isanti, Wright, and
Sherburne Counties, for purposes of fostering the development of
regional health planning and coordination of health care
delivery among regional health care systems and working to
achieve the cost containment goals;

(3) monitor the quality of health care throughout the state
and take action as necessary to ensure an appropriate level of
quality;

(4) issue recommendations regarding uniform billing forms,
uniform electronic billing procedures and data interchanges,
patient identification cards, and other uniform claims and
administrative procedures for health care providers and private
and public sector payers. In developing the recommendations,
the commissioner shall review the work of the work group on
electronic data interchange (WEDI) and the American National
Standards Institute (ANSI) at the national level, and the work
being done at the state and local level. The commissioner may
adopt rules requiring the use of the Uniform Bill 82/92 form,
the National Council of Prescription Drug Providers (NCPDP) 3.2
electronic version, the Centers for Medicare and Medicaid
Services 1500 form, or other standardized forms or procedures;

(5) undertake health planning responsibilities;

(6) authorize, fund, or promote research and
experimentation on new technologies and health care procedures;

(7) within the limits of appropriations for these purposes,
administer or contract for statewide consumer education and
wellness programs that will improve the health of Minnesotans
and increase individual responsibility relating to personal
health and the delivery of health care services, undertake
prevention programs including initiatives to improve birth
outcomes, expand childhood immunization efforts, and provide
start-up grants for worksite wellness programs;

(8) undertake other activities to monitor and oversee the
delivery of health care services in Minnesota with the goal of
improving affordability, quality, and accessibility of health
care for all Minnesotans; and

(9) make the cost containment goal new text begin and premium growth limit
new text end data available to the public in a consumer-oriented manner.

Sec. 5.

Minnesota Statutes 2004, section 62J.041, is
amended to read:

62J.041 deleted text begin INTERIM deleted text end HEALTH PLAN COMPANY deleted text begin COST CONTAINMENT GOALS
deleted text end new text begin HEALTH CARE EXPENDITURE LIMITS new text end .

Subdivision 1.

Definitions.

(a) For purposes of this
section, the following definitions apply.

(b) "Health plan company" has the definition provided in
section 62Q.01 new text begin and also includes employee health plans offered
by self-insured employers new text end .

(c) " deleted text begin Total deleted text end new text begin Health care new text end expenditures" means incurred claims
or expenditures on health care services deleted text begin , administrative
expenses, charitable contributions, and all other payments deleted text end made
by health plan companies deleted text begin out of premium revenues deleted text end .

(d) deleted text begin "Net expenditures" means total expenditures minus
exempted taxes and assessments and payments or allocations made
to establish or maintain reserves.
deleted text end

deleted text begin (e) "Exempted taxes and assessments" means direct payments
for taxes to government agencies, contributions to the Minnesota
Comprehensive Health Association, the medical assistance
provider's surcharge under section 256.9657, the MinnesotaCare
provider tax under section 295.52, assessments by the Health
Coverage Reinsurance Association, assessments by the Minnesota
Life and Health Insurance Guaranty Association, assessments by
the Minnesota Risk Adjustment Association, and any new
assessments imposed by federal or state law.
deleted text end

deleted text begin (f) deleted text end "Consumer cost-sharing or subscriber liability" means
enrollee coinsurance, co-payment, deductible payments, and
amounts in excess of benefit plan maximums.

Subd. 2.

Establishment.

The commissioner of health shall
establish deleted text begin cost containment goals deleted text end new text begin health care expenditure limits
new text end for deleted text begin the increase in net deleted text end new text begin calendar year 2006, and each year
thereafter, for health care new text end expenditures by each health plan
company deleted text begin for calendar years 1994, 1995, 1996, and 1997. The cost
containment goals must be the same as the annual cost
containment goals for health care spending established under
section 62J.04, subdivision 1, paragraph (b) deleted text end . Health plan
companies that are affiliates may elect to meet one
combined deleted text begin cost containment goal deleted text end new text begin health care expenditure limit.
The limits set by the commissioner shall not exceed the premium
limits established in section 62J.04, subdivision 1b new text end .

Subd. 3.

Determination of expenditures.

Health plan
companies shall submit to the commissioner of health, by April
deleted text begin 1, 1994, for calendar year 1993; April 1, 1995, for calendar
year 1994; April 1, 1996, for calendar year 1995; April 1, 1997,
for calendar year 1996; and April 1, 1998, for calendar year
1997 deleted text end new text begin of each year beginning 2006, new text end all information the
commissioner determines to be necessary to implement this
section. The information must be submitted in the form
specified by the commissioner. The information must include,
but is not limited to, new text begin health care new text end expenditures per member per
month or cost per employee per month, and detailed information
on revenues and reserves. The commissioner, to the extent
possible, shall coordinate the submittal of the information
required under this section with the submittal of the financial
data required under chapter 62J, to minimize the administrative
burden on health plan companies. The commissioner may adjust
final expenditure figures for demographic changes, risk
selection, changes in basic benefits, and legislative
initiatives that materially change health care costs, as long as
these adjustments are consistent with the methodology submitted
by the health plan company to the commissioner, and approved by
the commissioner as actuarially justified. deleted text begin The methodology to
be used for adjustments and the election to meet one cost
containment goal for affiliated health plan companies must be
submitted to the commissioner by September 1, 1994. Community
integrated service networks may submit the information with
their application for licensure. The commissioner shall also
accept changes to methodologies already submitted. The
adjustment methodology submitted and approved by the
commissioner must apply to the data submitted for calendar years
1994 and 1995. The commissioner may allow changes to accepted
adjustment methodologies for data submitted for calendar years
1996 and 1997. Changes to the adjustment methodology must be
received by September 1, 1996, and must be approved by the
commissioner.
deleted text end

Subd. 4.

Monitoring of reserves.

(a) The commissioners
of health and commerce shall monitor health plan company
reserves and net worth as established under chapters 60A, 62C,
62D, 62H, and 64B, with respect to the health plan companies
that each commissioner respectively regulates to assess the
degree to which savings resulting from the establishment of cost
containment goals are passed on to consumers in the form of
lower premium rates.

(b) Health plan companies shall fully reflect in the
premium rates the savings generated by the cost containment
goals. No premium rate, currently reviewed by the Department of
Health or Commerce, may be approved for those health plan
companies unless the health plan company establishes to the
satisfaction of the commissioner of commerce or the commissioner
of health, as appropriate, that the proposed new rate would
comply with this paragraph.

(c) Health plan companies, except those licensed under
chapter 60A to sell accident and sickness insurance under
chapter 62A, shall annually before the end of the fourth fiscal
quarter provide to the commissioner of health or commerce, as
applicable, a projection of the level of reserves the company
expects to attain during each quarter of the following fiscal
year. These health plan companies shall submit with required
quarterly financial statements a calculation of the actual
reserve level attained by the company at the end of each quarter
including identification of the sources of any significant
changes in the reserve level and an updated projection of the
level of reserves the health plan company expects to attain by
the end of the fiscal year. In cases where the health plan
company has been given a certificate to operate a new health
maintenance organization under chapter 62D, or been licensed as
a community integrated service network under chapter 62N, or
formed an affiliation with one of these organizations, the
health plan company shall also submit with its quarterly
financial statement, total enrollment at the beginning and end
of the quarter and enrollment changes within each service area
of the new organization. The reserve calculations shall be
maintained by the commissioners as trade secret information,
except to the extent that such information is also required to
be filed by another provision of state law and is not treated as
trade secret information under such other provisions.

(d) Health plan companies in paragraph (c) whose reserves
are less than the required minimum or more than the required
maximum at the end of the fiscal year shall submit a plan of
corrective action to the commissioner of health or commerce
under subdivision 7.

(e) The commissioner of commerce, in consultation with the
commissioner of health, shall report to the legislature no later
than January 15, 1995, as to whether the concept of a reserve
corridor or other mechanism for purposes of monitoring reserves
is adaptable for use with indemnity health insurers that do
business in multiple states and that must comply with their
domiciliary state's reserves requirements.

Subd. 5.

Notice.

The commissioner of health shall
publish in the State Register and make available to the public
by July 1, deleted text begin 1995 deleted text end new text begin 2007 new text end , new text begin and each year thereafter, new text end a list of all
health plan companies that exceeded their deleted text begin cost containment goal
deleted text end new text begin health care expenditure limit new text end for the deleted text begin 1994 deleted text end new text begin previous new text end calendar
year. deleted text begin The commissioner shall publish in the State Register and
make available to the public by July 1, 1996, a list of all
health plan companies that exceeded their combined cost
containment goal for calendar years 1994 and 1995. deleted text end The
commissioner shall notify each health plan company that the
commissioner has determined that the health plan company
exceeded its deleted text begin cost containment goal, deleted text end new text begin health care expenditure
limit new text end at least 30 days before publishing the list, and shall
provide each health plan company deleted text begin with deleted text end ten days to provide an
explanation for exceeding the deleted text begin cost containment goal deleted text end new text begin health care
expenditure limit new text end . The commissioner shall review the
explanation and may change a determination if the commissioner
determines the explanation to be valid.

Subd. 6.

Assistance by the commissioner of commerce.

The
commissioner of commerce shall provide assistance to the
commissioner of health in monitoring health plan companies
regulated by the commissioner of commerce.

Sec. 6.

new text begin [62J.255] HEALTH RISK INFORMATION SHEET.
new text end

new text begin (a) A health plan company shall provide to each enrollee on
an annual basis information on the increased personal health
risks and the additional costs to the health care system due to
obesity and to the use of tobacco.
new text end

new text begin (b) The commissioner, in consultation with the Minnesota
Medical Association, shall develop an information sheet on the
personal health risks of obesity and smoking and on the
additional costs to the health care system due to obesity and
due to smoking. The information sheet shall be posted on the
Minnesota Department of Health's Web site.
new text end

new text begin (c) When providing the information required in paragraph
(a), the health plan company must also provide each enrollee
with information on the best practices care guidelines and
quality of care measurement criteria identified in section
62J.43 as well as the availability of this information on the
department's Web site.
new text end

new text begin (d) This section does not apply to health plan companies
offering only limited dental or vision plans.
new text end

Sec. 7.

Minnesota Statutes 2004, section 62J.301,
subdivision 3, is amended to read:

Subd. 3.

General duties.

The commissioner shall:

(1) collect and maintain data which enable population-based
monitoring and trending of the access, utilization, quality, and
cost of health care services within Minnesota;

(2) collect and maintain data for the purpose of estimating
total Minnesota health care expenditures and trends;

(3) collect and maintain data for the purposes of setting
cost containment goals new text begin and premium growth limits new text end under section
62J.04, and measuring cost containment goal new text begin and premium growth
limit new text end compliance;

(4) conduct applied research using existing and new data
and promote applications based on existing research;

(5) develop and implement data collection procedures to
ensure a high level of cooperation from health care providers
and health plan companies, as defined in section 62Q.01,
subdivision 4;

(6) work closely with health plan companies and health care
providers to promote improvements in health care efficiency and
effectiveness; and

(7) participate as a partner or sponsor of private sector
initiatives that promote publicly disseminated applied research
on health care delivery, outcomes, costs, quality, and
management.

Sec. 8.

Minnesota Statutes 2004, section 62J.38, is
amended to read:

62J.38 COST CONTAINMENT DATA FROM GROUP PURCHASERS.

(a) The commissioner shall require group purchasers to
submit detailed data on total health care spending for each
calendar year. Group purchasers shall submit data for the 1993
calendar year by April 1, 1994, and each April 1 thereafter
shall submit data for the preceding calendar year.

(b) The commissioner shall require each group purchaser to
submit data on revenue, expenses, and member months, as
applicable. Revenue data must distinguish between premium
revenue and revenue from other sources and must also include
information on the amount of revenue in reserves and changes in
reserves. new text begin Premium revenue data, information on aggregate
enrollment, and data on member months must be broken down to
distinguish between individual market, small group market, and
large group market. Filings under this section for calendar
year 2005 must also include information broken down by
individual market, small group market, and large group market
for calendar year 2004. new text end Expenditure data must distinguish
between costs incurred for patient care and administrative
costs. Patient care and administrative costs must include only
expenses incurred on behalf of health plan members and must not
include the cost of providing health care services for
nonmembers at facilities owned by the group purchaser or
affiliate. Expenditure data must be provided separately for the
following categories and for other categories required by the
commissioner: physician services, dental services, other
professional services, inpatient hospital services, outpatient
hospital services, emergency, pharmacy services and other
nondurable medical goods, mental health, and chemical dependency
services, other expenditures, subscriber liability, and
administrative costs. Administrative costs must include costs
for marketing; advertising; overhead; salaries and benefits of
central office staff who do not provide direct patient care;
underwriting; lobbying; claims processing; provider contracting
and credentialing; detection and prevention of payment for
fraudulent or unjustified requests for reimbursement or
services; clinical quality assurance and other types of medical
care quality improvement efforts; concurrent or prospective
utilization review as defined in section 62M.02; costs incurred
to acquire a hospital, clinic, or health care facility, or the
assets thereof; capital costs incurred on behalf of a hospital
or clinic; lease payments; or any other costs incurred pursuant
to a partnership, joint venture, integration, or affiliation
agreement with a hospital, clinic, or other health care
provider. Capital costs and costs incurred must be recorded
according to standard accounting principles. The reports of
this data must also separately identify expenses for local,
state, and federal taxes, fees, and assessments. The
commissioner may require each group purchaser to submit any
other data, including data in unaggregated form, for the
purposes of developing spending estimates, setting spending
limits, and monitoring actual spending and costs. In addition
to reporting administrative costs incurred to acquire a
hospital, clinic, or health care facility, or the assets
thereof; or any other costs incurred pursuant to a partnership,
joint venture, integration, or affiliation agreement with a
hospital, clinic, or other health care provider; reports
submitted under this section also must include the payments made
during the calendar year for these purposes. The commissioner
shall make public, by group purchaser data collected under this
paragraph in accordance with section 62J.321, subdivision 5.
Workers' compensation insurance plans and automobile insurance
plans are exempt from complying with this paragraph as it
relates to the submission of administrative costs.

(c) The commissioner may collect information on:

(1) premiums, benefit levels, managed care procedures, and
other features of health plan companies;

(2) prices, provider experience, and other information for
services less commonly covered by insurance or for which
patients commonly face significant out-of-pocket expenses; and

(3) information on health care services not provided
through health plan companies, including information on prices,
costs, expenditures, and utilization.

(d) All group purchasers shall provide the required data
using a uniform format and uniform definitions, as prescribed by
the commissioner.

Sec. 9.

Minnesota Statutes 2004, section 62J.692,
subdivision 3, is amended to read:

Subd. 3.

Application process.

(a) A clinical medical
education program conducted in Minnesota by a teaching
institution to train physicians, doctor of pharmacy
practitioners, dentists, chiropractors, or physician assistants
is eligible for funds under subdivision 4 if the program:

(1) is funded, in part, by patient care revenues;

(2) occurs in patient care settings that face increased
financial pressure as a result of competition with nonteaching
patient care entities; and

(3) emphasizes primary care or specialties that are in
undersupply in Minnesota.

new text begin A clinical medical education program that trains
pediatricians is requested to include in its program curriculum
training in case management and medication management for
children suffering from mental illness to be eligible for funds
under subdivision 4.
new text end

(b) A clinical medical education program for advanced
practice nursing is eligible for funds under subdivision 4 if
the program meets the eligibility requirements in paragraph (a),
clauses (1) to (3), and is sponsored by the University of
Minnesota Academic Health Center, the Mayo Foundation, or
institutions that are part of the Minnesota State Colleges and
Universities system or members of the Minnesota Private College
Council.

(c) Applications must be submitted to the commissioner by a
sponsoring institution on behalf of an eligible clinical medical
education program and must be received by October 31 of each
year for distribution in the following year. An application for
funds must contain the following information:

(1) the official name and address of the sponsoring
institution and the official name and site address of the
clinical medical education programs on whose behalf the
sponsoring institution is applying;

(2) the name, title, and business address of those persons
responsible for administering the funds;

(3) for each clinical medical education program for which
funds are being sought; the type and specialty orientation of
trainees in the program; the name, site address, and medical
assistance provider number of each training site used in the
program; the total number of trainees at each training site; and
the total number of eligible trainee FTEs at each site. Only
those training sites that host 0.5 FTE or more eligible trainees
for a program may be included in the program's application; and

(4) other supporting information the commissioner deems
necessary to determine program eligibility based on the criteria
in paragraphs (a) and (b) and to ensure the equitable
distribution of funds.

(d) An application must include the information specified
in clauses (1) to (3) for each clinical medical education
program on an annual basis for three consecutive years. After
that time, an application must include the information specified
in clauses (1) to (3) in the first year of each biennium:

(1) audited clinical training costs per trainee for each
clinical medical education program when available or estimates
of clinical training costs based on audited financial data;

(2) a description of current sources of funding for
clinical medical education costs, including a description and
dollar amount of all state and federal financial support,
including Medicare direct and indirect payments; and

(3) other revenue received for the purposes of clinical
training.

(e) An applicant that does not provide information
requested by the commissioner shall not be eligible for funds
for the current funding cycle.

Sec. 10.

Minnesota Statutes 2004, section 62L.08,
subdivision 8, is amended to read:

Subd. 8.

Filing requirement.

new text begin (a) new text end No later than July 1,
1993, and each year thereafter, a health carrier that offers,
sells, issues, or renews a health benefit plan for small
employers shall file with the commissioner the index rates and
must demonstrate that all rates shall be within the rating
restrictions defined in this chapter. Such demonstration must
include the allowable range of rates from the index rates and a
description of how the health carrier intends to use demographic
factors including case characteristics in calculating the
premium rates.

new text begin (b) Notwithstanding paragraph (a), new text end the rates shall not be
approved deleted text begin , deleted text end unless the commissioner has determined that the rates
are reasonable. In determining reasonableness, the commissioner
shall deleted text begin consider the growth rates applied under section 62J.04,
subdivision 1, paragraph (b) deleted text end new text begin apply the premium growth limits
established under section 62J.04, subdivision 1b new text end , to the
calendar year or years that the proposed premium rate would be
in effect, new text begin and shall consider new text end actuarially valid changes in risk
associated with the enrollee population, and actuarially valid
changes as a result of statutory changes in Laws 1992, chapter
549. deleted text begin For premium rates proposed to go into effect between July
1, 1993 and December 31, 1993, the pertinent growth rate is the
growth rate applied under section 62J.04, subdivision 1,
paragraph (b), to calendar year 1994.
deleted text end

Sec. 11.

Minnesota Statutes 2004, section 62M.06,
subdivision 2, is amended to read:

Subd. 2.

Expedited appeal.

(a) When an initial
determination not to certify a health care service is made prior
to or during an ongoing service requiring review and the
attending health care professional believes that the
determination warrants an expedited appeal, the utilization
review organization must ensure that the enrollee and the
attending health care professional have an opportunity to appeal
the determination over the telephone on an expedited basis. In
such an appeal, the utilization review organization must ensure
reasonable access to its consulting physician or health care
provider. new text begin For review of initial determinations not to certify a
service for prepaid health care programs under chapter 256B,
256D, or 256L, the health care provider must follow published
evidence-based care guidelines as established by a nonprofit
Minnesota quality improvement organization or by the
professional association of the specialty that typically
provides the service.
new text end

(b) The utilization review organization shall notify the
enrollee and attending health care professional by telephone of
its determination on the expedited appeal as expeditiously as
the enrollee's medical condition requires, but no later than 72
hours after receiving the expedited appeal.

(c) If the determination not to certify is not reversed
through the expedited appeal, the utilization review
organization must include in its notification the right to
submit the appeal to the external appeal process described in
section 62Q.73 and the procedure for initiating the process.
This information must be provided in writing to the enrollee and
the attending health care professional as soon as practical.

Sec. 12.

Minnesota Statutes 2004, section 62M.06,
subdivision 3, is amended to read:

Subd. 3.

Standard appeal.

The utilization review
organization must establish procedures for appeals to be made
either in writing or by telephone.

(a) A utilization review organization shall notify in
writing the enrollee, attending health care professional, and
claims administrator of its determination on the appeal within
30 days upon receipt of the notice of appeal. If the
utilization review organization cannot make a determination
within 30 days due to circumstances outside the control of the
utilization review organization, the utilization review
organization may take up to 14 additional days to notify the
enrollee, attending health care professional, and claims
administrator of its determination. If the utilization review
organization takes any additional days beyond the initial 30-day
period to make its determination, it must inform the enrollee,
attending health care professional, and claims administrator, in
advance, of the extension and the reasons for the extension.

(b) The documentation required by the utilization review
organization may include copies of part or all of the medical
record and a written statement from the attending health care
professional.

(c) Prior to upholding the initial determination not to
certify for clinical reasons, the utilization review
organization shall conduct a review of the documentation by a
physician who did not make the initial determination not to
certify. new text begin For review of initial determinations not to certify a
service for prepaid health care programs under chapter 256B,
256D, or 256L, the physician must follow publicly available
evidence-based care guidelines as established by a nonprofit
Minnesota quality improvement organization or by the
professional association of the specialty that typically
provides the service.
new text end

(d) The process established by a utilization review
organization may include defining a period within which an
appeal must be filed to be considered. The time period must be
communicated to the enrollee and attending health care
professional when the initial determination is made.

(e) An attending health care professional or enrollee who
has been unsuccessful in an attempt to reverse a determination
not to certify shall, consistent with section 72A.285, be
provided the following:

(1) a complete summary of the review findings;

(2) qualifications of the reviewers, including any license,
certification, or specialty designation; and

(3) the relationship between the enrollee's diagnosis and
the review criteria used as the basis for the decision,
including the specific rationale for the reviewer's decision.

(f) In cases of appeal to reverse a determination not to
certify for clinical reasons, the utilization review
organization must ensure that a physician of the utilization
review organization's choice in the same or a similar specialty
as typically manages the medical condition, procedure, or
treatment under discussion is reasonably available to review the
case.

(g) If the initial determination is not reversed on appeal,
the utilization review organization must include in its
notification the right to submit the appeal to the external
review process described in section 62Q.73 and the procedure for
initiating the external process.

Sec. 13.

new text begin [62Q.175] COVERAGE EXEMPTIONS.
new text end

new text begin Notwithstanding any law to the contrary, no health plan
company is required to provide coverage for any health care
service included on the list established under section
256B.0625, subdivision 46.
new text end

Sec. 14.

Minnesota Statutes 2004, section 144.1501,
subdivision 2, is amended to read:

Subd. 2.

Creation of account.

new text begin (a) new text end A health professional
education loan forgiveness program account is established. The
commissioner of health shall use money from the account to
establish a loan forgiveness program new text begin :
new text end

new text begin (1) new text end for medical residents agreeing to practice in
designated rural areas or underserved urban communities deleted text begin , deleted text end new text begin or
specializing in the area of pediatric psychiatry;
new text end

new text begin (2) new text end for midlevel practitioners agreeing to practice in
designated rural areas deleted text begin , deleted text end new text begin ; new text end and

new text begin (3) new text end for nurses who agree to practice in a Minnesota nursing
home or intermediate care facility for persons with mental
retardation or related conditions.

new text begin (b) new text end Appropriations made to the account do not cancel and
are available until expended, except that at the end of each
biennium, any remaining balance in the account that is not
committed by contract and not needed to fulfill existing
commitments shall cancel to the fund.

Sec. 15.

Minnesota Statutes 2004, section 144.1501,
subdivision 4, is amended to read:

Subd. 4.

Loan forgiveness.

The commissioner of health
may select applicants each year for participation in the loan
forgiveness program, within the limits of available funding. The
commissioner shall distribute available funds for loan
forgiveness proportionally among the eligible professions
according to the vacancy rate for each profession in the
required geographic area deleted text begin or deleted text end new text begin , new text end facility type new text begin , or specialty area
new text end specified in subdivision 2. The commissioner shall allocate
funds for physician loan forgiveness so that deleted text begin 75 deleted text end new text begin 50 new text end percent of
the funds available are used for rural physician loan
forgiveness deleted text begin and deleted text end new text begin , new text end 25 percent of the funds available are used for
underserved urban communities loan forgiveness new text begin , and 25 percent
of the funds available are used for pediatric psychiatry loan
forgiveness new text end . If the commissioner does not receive enough
qualified applicants each year to use the entire allocation of
funds for urban underserved communities, the remaining funds may
be allocated for rural physician loan forgiveness. Applicants
are responsible for securing their own qualified educational
loans. The commissioner shall select participants based on
their suitability for practice serving the required geographic
area deleted text begin or deleted text end new text begin , new text end facility type new text begin , or specialty area new text end specified in
subdivision 2, as indicated by experience or training. The
commissioner shall give preference to applicants closest to
completing their training. For each year that a participant
meets the service obligation required under subdivision 3, up to
a maximum of four years, the commissioner shall make annual
disbursements directly to the participant equivalent to 15
percent of the average educational debt for indebted graduates
in their profession in the year closest to the applicant's
selection for which information is available, not to exceed the
balance of the participant's qualifying educational loans.
Before receiving loan repayment disbursements and as requested,
the participant must complete and return to the commissioner an
affidavit of practice form provided by the commissioner
verifying that the participant is practicing as required under
subdivisions 2 and 3. The participant must provide the
commissioner with verification that the full amount of loan
repayment disbursement received by the participant has been
applied toward the designated loans. After each disbursement,
verification must be received by the commissioner and approved
before the next loan repayment disbursement is made.
Participants who move their practice remain eligible for loan
repayment as long as they practice as required under subdivision
2.

Sec. 16.

Minnesota Statutes 2004, section 256.045,
subdivision 3a, is amended to read:

Subd. 3a.

Prepaid health plan appeals.

(a) All prepaid
health plans under contract to the commissioner under chapter
256B or 256D must provide for a complaint system according to
section 62D.11. When a prepaid health plan denies, reduces, or
terminates a health service or denies a request to authorize a
previously authorized health service, the prepaid health plan
must notify the recipient of the right to file a complaint or an
appeal. The notice must include the name and telephone number
of the ombudsman and notice of the recipient's right to request
a hearing under paragraph (b). When a complaint is filed, the
prepaid health plan must notify the ombudsman within three
working days. Recipients may request the assistance of the
ombudsman in the complaint system process. The prepaid health
plan must issue a written resolution of the complaint to the
recipient within 30 days after the complaint is filed with the
prepaid health plan. A recipient is not required to exhaust the
complaint system procedures in order to request a hearing under
paragraph (b).

(b) Recipients enrolled in a prepaid health plan under
chapter 256B or 256D may contest a prepaid health plan's denial,
reduction, or termination of health services, a prepaid health
plan's denial of a request to authorize a previously authorized
health service, or the prepaid health plan's written resolution
of a complaint by submitting a written request for a hearing
according to subdivision 3. A state human services referee
shall conduct a hearing on the matter and shall recommend an
order to the commissioner of human services. new text begin The referee may
not overturn a decision by a prepaid health plan to deny or
limit coverage for services if the prepaid health plan has used
evidence-based criteria or guidelines in making the
determination. new text end The commissioner need not grant a hearing if the
sole issue raised by a recipient is the commissioner's authority
to require mandatory enrollment in a prepaid health plan in a
county where prepaid health plans are under contract with the
commissioner. The state human services referee may order a
second medical opinion from the prepaid health plan or may order
a second medical opinion from a nonprepaid health plan provider
at the expense of the prepaid health plan. Recipients may
request the assistance of the ombudsman in the appeal process.

(c) In the written request for a hearing to appeal from a
prepaid health plan's denial, reduction, or termination of a
health service, a prepaid health plan's denial of a request to
authorize a previously authorized service, or the prepaid health
plan's written resolution to a complaint, a recipient may
request an expedited hearing. If an expedited appeal is
warranted, the state human services referee shall hear the
appeal and render a decision within a time commensurate with the
level of urgency involved, based on the individual circumstances
of the case.

Sec. 17.

new text begin [256.9545] PRESCRIPTION DRUG DISCOUNT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment; administration. new text end

new text begin The
commissioner shall establish and administer the prescription
drug discount program, effective July 1, 2005.
new text end

new text begin Subd. 2. new text end [COMMISSIONER'S AUTHORITY.] new text begin The commissioner
shall administer a drug rebate program for drugs purchased
according to the prescription drug discount program. The
commissioner shall require a rebate agreement from all
manufacturers of covered drugs as defined in section 256B.0625,
subdivision 13. For each drug, the amount of the rebate shall
be equal to the rebate as defined for purposes of the federal
rebate program in United States Code, title 42, section
1396r-8. The rebate program shall utilize the terms and
conditions used for the federal rebate program established
according to section 1927 of title XIX of the federal Social
Security Act.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

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

new text begin (a) "Commissioner" means the commissioner of human services.
new text end

new text begin (b) "Manufacturer" means a manufacturer as defined in
section 151.44, paragraph (c).
new text end

new text begin (c) "Covered prescription drug" means a prescription drug
as defined in section 151.44, paragraph (d), that is covered
under medical assistance as described in section 256B.0625,
subdivision 13, and that is provided by a manufacturer that has
a fully executed rebate agreement with the commissioner under
this section and complies with that agreement.
new text end

new text begin (d) "Health carrier" means an insurance company licensed
under chapter 60A to offer, sell, or issue an individual or
group policy of accident and sickness insurance as defined in
section 62A.01; a nonprofit health service plan corporation
operating under chapter 62C; a health maintenance organization
operating under chapter 62D; a joint self-insurance employee
health plan operating under chapter 62H; a community integrated
systems network licensed under chapter 62N; a fraternal benefit
society operating under chapter 64B; a city, county, school
district, or other political subdivision providing self-insured
health coverage under section 471.617 or sections 471.98 to
471.982; and a self-funded health plan under the Employee
Retirement Income Security Act of 1974, as amended.
new text end

new text begin (e) "Participating pharmacy" means a pharmacy as defined in
section 151.01, subdivision 2, that agrees to participate in the
prescription drug discount program.
new text end

new text begin (f) "Enrolled individual" means a person who is eligible
for the program under subdivision 4 and has enrolled in the
program according to subdivision 5.
new text end

new text begin Subd. 4. new text end

new text begin Eligible persons. new text end

new text begin To be eligible for the
program, an applicant must:
new text end

new text begin (1) be a permanent resident of Minnesota as defined in
section 256L.09, subdivision 4;
new text end

new text begin (2) not be enrolled in Medicare, medical assistance,
general assistance medical care, or MinnesotaCare;
new text end

new text begin (3) not be enrolled in and have currently available
prescription drug coverage under a health plan offered by a
health carrier or employer or under a pharmacy benefit program
offered by a pharmaceutical manufacturer; and
new text end

new text begin (4) not be enrolled in and have currently available
prescription drug coverage under a Medicare supplement plan, as
defined in sections 62A.31 to 62A.44, or policies, contracts, or
certificates that supplement Medicare issued by health
maintenance organizations or those policies, contracts, or
certificates governed by section 1833 or 1876 of the federal
Social Security Act, United States Code, title 42, section 1395,
et seq., as amended.
new text end

new text begin Subd. 5. new text end

new text begin Application procedure. new text end

new text begin (a) Applications and
information on the program must be made available at county
social services agencies, health care provider offices, and
agencies and organizations serving senior citizens. Individuals
shall submit applications and any information specified by the
commissioner as being necessary to verify eligibility directly
to the commissioner. The commissioner shall determine an
applicant's eligibility for the program within 30 days from the
date the application is received. Upon notice of approval, the
applicant must submit to the commissioner the enrollment fee
specified in subdivision 10. Eligibility begins the month after
the enrollment fee is received by the commissioner.
new text end

new text begin (b) An enrollee's eligibility must be renewed every 12
months with the 12-month period beginning in the month after the
application is approved.
new text end

new text begin (c) The commissioner shall develop an application form that
does not exceed one page in length and requires information
necessary to determine eligibility for the program.
new text end

new text begin Subd. 6. new text end

new text begin Participating pharmacy. new text end

new text begin According to a valid
prescription, a participating pharmacy must sell a covered
prescription drug to an enrolled individual at the pharmacy's
usual and customary retail price, minus an amount that is equal
to the rebate amount described in subdivision 8, plus the amount
of any switch fee established by the commissioner under
subdivision 10. Each participating pharmacy shall provide the
commissioner with all information necessary to administer the
program, including, but not limited to, information on
prescription drug sales to enrolled individuals and usual and
customary retail prices.
new text end

new text begin Subd. 7. new text end

new text begin Notification of rebate amount. new text end

new text begin The commissioner
shall notify each drug manufacturer, each calendar quarter or
according to a schedule to be established by the commissioner,
of the amount of the rebate owed on the prescription drugs sold
by participating pharmacies to enrolled individuals.
new text end

new text begin Subd. 8. new text end

new text begin Provision of rebate. new text end

new text begin To the extent that a
manufacturer's prescription drugs are prescribed to a resident
of this state, the manufacturer must provide a rebate equal to
the rebate provided under the medical assistance program for any
prescription drug distributed by the manufacturer that is
purchased by an enrolled individual at a participating
pharmacy. The manufacturer must provide full payment within 30
days of receipt of the state invoice for the rebate, or
according to a schedule to be established by the commissioner.
The commissioner shall deposit all rebates received into the
Minnesota prescription drug dedicated fund established under
subdivision 11. The manufacturer must provide the commissioner
with any information necessary to verify the rebate determined
per drug.
new text end

new text begin Subd. 9. new text end

new text begin Payment to pharmacies. new text end

new text begin The commissioner shall
distribute on a biweekly basis an amount that is equal to an
amount collected under subdivision 8 to each participating
pharmacy based on the prescription drugs sold by that pharmacy
to enrolled individuals.
new text end

new text begin Subd. 10. new text end

new text begin Enrollment fee; switch fee. new text end

new text begin (a) The
commissioner shall establish an annual enrollment fee that
covers the commissioner's expenses for enrollment, processing
claims, and distributing rebates under this program.
new text end

new text begin (b) The commissioner shall establish a reasonable switch
fee that covers expenses incurred by pharmacies in formatting
for electronic submission claims for prescription drugs sold to
enrolled individuals.
new text end

new text begin Subd. 11. new text end

new text begin Dedicated fund; creation; use of fund. new text end

new text begin (a) The
Minnesota prescription drug dedicated fund is established as an
account in the state treasury. The commissioner of finance
shall credit to the dedicated fund all rebates paid under
subdivision 8, any federal funds received for the program, all
enrollment fees paid by the enrollees, and any appropriations or
allocations designated for the fund. The commissioner of
finance shall ensure that fund money is invested under section
11A.25. All money earned by the fund must be credited to the
fund. The fund shall earn a proportionate share of the total
state annual investment income.
new text end

new text begin (b) Money in the fund is appropriated to the commissioner
to reimburse participating pharmacies for prescription drug
discounts provided to enrolled individuals under this section;
to reimburse the commissioner for costs related to enrollment,
processing claims, and distributing rebates and for other
reasonable administrative costs related to administration of the
prescription drug discount program; and to repay the
appropriation provided for this section. The commissioner must
administer the program so that the costs total no more than
funds appropriated plus the drug rebate proceeds.
new text end

Sec. 18.

Minnesota Statutes 2004, section 256.9693, is
amended to read:

256.9693 CONTINUING CARE PROGRAM FOR PERSONS WITH MENTAL
ILLNESS.

The commissioner shall establish a continuing care benefit
program for persons with mental illness in which persons with
mental illness may obtain acute care hospital inpatient
treatment for mental illness for up to 45 days beyond that
allowed by section 256.969. Persons with mental illness who are
eligible for medical assistance new text begin or general assistance medical
care new text end may obtain inpatient treatment under this program in
hospital beds for which the commissioner contracts under this
section. The commissioner may selectively contract with
hospitals to provide this benefit through competitive bidding
when reasonable geographic access by recipients can be assured.
Payments under this section shall not affect payments under
section 256.969. The commissioner may contract externally with
a utilization review organization to authorize persons with
mental illness to access the continuing care benefit program.
The commissioner, as part of the contracts with hospitals, shall
establish admission criteria to allow persons with mental
illness to access the continuing care benefit program. If a
court orders acute care hospital inpatient treatment for mental
illness for a person, the person may obtain the treatment under
the continuing care benefit program. The commissioner shall not
require, as part of the admission criteria, any commitment or
petition under chapter 253B as a condition of accessing the
program. This benefit is not available for people who are also
eligible for Medicare and who have not exhausted their annual or
lifetime inpatient psychiatric benefit under Medicare. If a
recipient is enrolled in a prepaid plan, this program is
included in the plan's coverage.

Sec. 19.

Minnesota Statutes 2004, section 256B.0625,
subdivision 3b, is amended to read:

Subd. 3b.

Telemedicine consultations.

Medical assistance
covers telemedicine consultations. Telemedicine consultations
must be made via two-way, interactive video or store-and-forward
technology. Store-and-forward technology includes telemedicine
consultations that do not occur in real time via synchronous
transmissions, and that do not require a face-to-face encounter
with the patient for all or any part of any such telemedicine
consultation. The patient record must include a written opinion
from the consulting physician providing the telemedicine
consultation. A communication between two physicians that
consists solely of a telephone conversation is not a
telemedicine consultation new text begin , unless the communication is between a
pediatrician and psychiatrist for the purpose of managing the
medications of a child with mental health needs new text end . Coverage is
limited to three telemedicine consultations per recipient per
calendar week. Telemedicine consultations shall be paid at the
full allowable rate.

Sec. 20.

Minnesota Statutes 2004, section 256B.0625, is
amended by adding a subdivision to read:

new text begin Subd. 46. new text end

new text begin List of health care services not eligible for
coverage. new text end

new text begin (a) The commissioner of human services, in
consultation with the commissioner of health, shall biennially
establish a list of diagnosis/treatment pairings that are not
eligible for reimbursement under this chapter and chapters 256D
and 256L, effective for services provided on or after July 1,
2007. The commissioner shall review the list in effect for the
prior biennium and shall make any additions or deletions from
the list as appropriate, taking into consideration the following:
new text end

new text begin (1) scientific and medical information;
new text end

new text begin (2) clinical assessment;
new text end

new text begin (3) cost-effectiveness of treatment;
new text end

new text begin (4) prevention of future costs; and
new text end

new text begin (5) medical ineffectiveness.
new text end

new text begin (b) The commissioner may appoint an ad hoc advisory panel
made up of physicians, consumers, nurses, dentists,
chiropractors, and other experts to assist the commissioner in
reviewing and establishing the list. The commissioner shall
solicit comments and recommendations from any interested persons
and organizations and shall schedule at least one public hearing.
new text end

new text begin (c) The list must be established by January 15, 2007, for
the list effective July 1, 2007, and by October 1 of the
even-numbered years beginning October 1, 2008, for the lists
effective the following July 1. The commissioner shall publish
the list in the State Register by November 1 of the
even-numbered years beginning November 1, 2008. The list shall
be submitted to the legislature by January 15 of the
odd-numbered years beginning January 15, 2007.
new text end

Sec. 21.

Minnesota Statutes 2004, section 256B.0627,
subdivision 1, is amended to read:

Subdivision 1.

Definition.

(a) "Activities of daily
living" includes eating, toileting, grooming, dressing, bathing,
transferring, mobility, and positioning.

(b) "Assessment" means a review and evaluation of a
recipient's need for home care services conducted in person.
Assessments for private duty nursing shall be conducted by a
registered private duty nurse. Assessments for home health
agency services shall be conducted by a home health agency
nurse. Assessments for personal care assistant services shall
be conducted by the county public health nurse or a certified
public health nurse under contract with the county. A
face-to-face assessment must include: documentation of health
status, determination of need, evaluation of service
effectiveness, identification of appropriate services, service
plan development or modification, coordination of services,
referrals and follow-up to appropriate payers and community
resources, completion of required reports, recommendation of
service authorization, and consumer education. Once the need
for personal care assistant services is determined under this
section, the county public health nurse or certified public
health nurse under contract with the county is responsible for
communicating this recommendation to the commissioner and the
recipient. A face-to-face assessment for personal care
assistant services is conducted on those recipients who have
never had a county public health nurse assessment. A
face-to-face assessment must occur at least annually or when
there is a significant change in the recipient's condition or
when there is a change in the need for personal care assistant
services. A service update may substitute for the annual
face-to-face assessment when there is not a significant change
in recipient condition or a change in the need for personal care
assistant service. A service update or review for temporary
increase includes a review of initial baseline data, evaluation
of service effectiveness, redetermination of service need,
modification of service plan and appropriate referrals, update
of initial forms, obtaining service authorization, and on going
consumer education. Assessments for medical assistance home
care services for mental retardation or related conditions and
alternative care services for developmentally disabled home and
community-based waivered recipients may be conducted by the
county public health nurse to ensure coordination and avoid
duplication. Assessments must be completed on forms provided by
the commissioner within 30 days of a request for home care
services by a recipient or responsible party. new text begin Assessments shall
not be conducted by the same agency, individual, or organization
providing the care services.
new text end

(c) "Care plan" means a written description of personal
care assistant services developed by the qualified professional
or the recipient's physician with the recipient or responsible
party to be used by the personal care assistant with a copy
provided to the recipient or responsible party.

(d) "Complex and regular private duty nursing care" means:

(1) complex care is private duty nursing provided to
recipients who are ventilator dependent or for whom a physician
has certified that were it not for private duty nursing the
recipient would meet the criteria for inpatient hospital
intensive care unit (ICU) level of care; and

(2) regular care is private duty nursing provided to all
other recipients.

(e) "Health-related functions" means functions that can be
delegated or assigned by a licensed health care professional
under state law to be performed by a personal care attendant.

(f) "Home care services" means a health service, determined
by the commissioner as medically necessary, that is ordered by a
physician and documented in a service plan that is reviewed by
the physician at least once every 60 days for the provision of
home health services, or private duty nursing, or at least once
every 365 days for personal care. Home care services are
provided to the recipient at the recipient's residence that is a
place other than a hospital or long-term care facility or as
specified in section 256B.0625.

(g) "Instrumental activities of daily living" includes meal
planning and preparation, managing finances, shopping for food,
clothing, and other essential items, performing essential
household chores, communication by telephone and other media,
and getting around and participating in the community.

(h) "Medically necessary" has the meaning given in
Minnesota Rules, parts 9505.0170 to 9505.0475.

(i) "Personal care assistant" means a person who:

(1) is at least 18 years old, except for persons 16 to 18
years of age who participated in a related school-based job
training program or have completed a certified home health aide
competency evaluation;

(2) is able to effectively communicate with the recipient
and personal care provider organization;

(3) effective July 1, 1996, has completed one of the
training requirements as specified in Minnesota Rules, part
9505.0335, subpart 3, items A to D;

(4) has the ability to, and provides covered personal care
assistant services according to the recipient's care plan,
responds appropriately to recipient needs, and reports changes
in the recipient's condition to the supervising qualified
professional or physician;

(5) is not a consumer of personal care assistant services;
and

(6) is subject to criminal background checks and procedures
specified in chapter 245C.

(j) "Personal care provider organization" means an
organization enrolled to provide personal care assistant
services under the medical assistance program that complies with
the following: (1) owners who have a five percent interest or
more, and managerial officials are subject to a background study
as provided in chapter 245C. This applies to currently enrolled
personal care provider organizations and those agencies seeking
enrollment as a personal care provider organization. An
organization will be barred from enrollment if an owner or
managerial official of the organization has been convicted of a
crime specified in chapter 245C, or a comparable crime in
another jurisdiction, unless the owner or managerial official
meets the reconsideration criteria specified in chapter 245C;
(2) the organization must maintain a surety bond and liability
insurance throughout the duration of enrollment and provides
proof thereof. The insurer must notify the Department of Human
Services of the cancellation or lapse of policy; and (3) the
organization must maintain documentation of services as
specified in Minnesota Rules, part 9505.2175, subpart 7, as well
as evidence of compliance with personal care assistant training
requirements.

(k) "Responsible party" means an individual who is capable
of providing the support necessary to assist the recipient to
live in the community, is at least 18 years old, actively
participates in planning and directing of personal care
assistant services, and is not the personal care assistant. The
responsible party must be accessible to the recipient and the
personal care assistant when personal care services are being
provided and monitor the services at least weekly according to
the plan of care. The responsible party must be identified at
the time of assessment and listed on the recipient's service
agreement and care plan. Responsible parties new text begin who are parents of
minors or guardians of minors or incapacitated persons new text end may
delegate the responsibility to another adult deleted text begin who is not the
personal care assistant deleted text end new text begin during a temporary absence of at least
24 hours but not more than six months. The person delegated as
a responsible party must be able to meet the definition of
responsible party, except that the delegated responsible party
is required to reside with the recipient only while serving as
the responsible party new text end . The responsible party must assure that
the delegate performs the functions of the responsible party, is
identified at the time of the assessment, and is listed on the
service agreement and the care plan. Foster care license
holders may be designated the responsible party for residents of
the foster care home if case management is provided as required
in section 256B.0625, subdivision 19a. For persons who, as of
April 1, 1992, are sharing personal care assistant services in
order to obtain the availability of 24-hour coverage, an
employee of the personal care provider organization may be
designated as the responsible party if case management is
provided as required in section 256B.0625, subdivision 19a.

(l) "Service plan" means a written description of the
services needed based on the assessment developed by the nurse
who conducts the assessment together with the recipient or
responsible party. The service plan shall include a description
of the covered home care services, frequency and duration of
services, and expected outcomes and goals. The recipient and
the provider chosen by the recipient or responsible party must
be given a copy of the completed service plan within 30 calendar
days of the request for home care services by the recipient or
responsible party.

(m) "Skilled nurse visits" are provided in a recipient's
residence under a plan of care or service plan that specifies a
level of care which the nurse is qualified to provide. These
services are:

(1) nursing services according to the written plan of care
or service plan and accepted standards of medical and nursing
practice in accordance with chapter 148;

(2) services which due to the recipient's medical condition
may only be safely and effectively provided by a registered
nurse or a licensed practical nurse;

(3) assessments performed only by a registered nurse; and

(4) teaching and training the recipient, the recipient's
family, or other caregivers requiring the skills of a registered
nurse or licensed practical nurse.

(n) "Telehomecare" means the use of telecommunications
technology by a home health care professional to deliver home
health care services, within the professional's scope of
practice, to a patient located at a site other than the site
where the practitioner is located.

Sec. 22.

Minnesota Statutes 2004, section 256B.0627,
subdivision 4, is amended to read:

Subd. 4.

Personal care assistant services.

(a) The
personal care assistant services that are eligible for payment
are services and supports furnished to an individual, as needed,
to assist in accomplishing activities of daily living;
instrumental activities of daily living; health-related
functions through hands-on assistance, supervision, and cuing;
and redirection and intervention for behavior including
observation and monitoring.

(b) Payment for services will be made within the limits
approved using the prior authorized process established in
subdivision 5.

(c) The amount and type of services authorized shall be
based on an assessment of the recipient's needs in these areas:

(1) bowel and bladder care;

(2) skin care to maintain the health of the skin;

(3) repetitive maintenance range of motion, muscle
strengthening exercises, and other tasks specific to maintaining
a recipient's optimal level of function;

(4) respiratory assistance;

(5) transfers and ambulation;

(6) bathing, grooming, and hairwashing necessary for
personal hygiene;

(7) turning and positioning;

(8) assistance with furnishing medication that is
self-administered;

(9) application and maintenance of prosthetics and
orthotics;

(10) cleaning medical equipment;

(11) dressing or undressing;

(12) assistance with eating and meal preparation and
necessary grocery shopping;

(13) accompanying a recipient to obtain medical diagnosis
or treatment;

(14) assisting, monitoring, or prompting the recipient to
complete the services in clauses (1) to (13);

(15) redirection, monitoring, and observation that are
medically necessary and an integral part of completing the
personal care assistant services described in clauses (1) to
(14);

(16) redirection and intervention for behavior, including
observation and monitoring;

(17) interventions for seizure disorders, including
monitoring and observation if the recipient has had a seizure
that requires intervention within the past three months;

(18) tracheostomy suctioning using a clean procedure if the
procedure is properly delegated by a registered nurse. Before
this procedure can be delegated to a personal care assistant, a
registered nurse must determine that the tracheostomy suctioning
can be accomplished utilizing a clean rather than a sterile
procedure and must ensure that the personal care assistant has
been taught the proper procedure; and

(19) incidental household services that are an integral
part of a personal care service described in clauses (1) to (18).

For purposes of this subdivision, monitoring and observation
means watching for outward visible signs that are likely to
occur and for which there is a covered personal care service or
an appropriate personal care intervention. For purposes of this
subdivision, a clean procedure refers to a procedure that
reduces the numbers of microorganisms or prevents or reduces the
transmission of microorganisms from one person or place to
another. A clean procedure may be used beginning 14 days after
insertion.

(d) The personal care assistant services that are not
eligible for payment are the following:

(1) services not ordered by the physician;

(2) assessments by personal care assistant provider
organizations or by independently enrolled registered nurses;

(3) services that are not in the service plan;

(4) services provided by the recipient's spouse, legal
guardian for an adult or child recipient, or parent of a
recipient under age 18;

(5) services provided by a foster care provider of a
recipient who cannot direct the recipient's own care, unless
monitored by a county or state case manager under section
256B.0625, subdivision 19a;

(6) services provided by the residential or program license
holder in a residence for more than four persons;

(7) services that are the responsibility of a residential
or program license holder under the terms of a service agreement
and administrative rules;

(8) sterile procedures;

(9) injections of fluids into veins, muscles, or skin;

(10) new text begin services provided by parents of adult recipients,
adult children, or siblings of the recipient, unless these
relatives meet one of the following hardship criteria and the
commissioner waives this requirement:
new text end

new text begin (i) the relative resigns from a part-time or full-time job
to provide personal care for the recipient;
new text end

new text begin (ii) the relative goes from a full-time to a part-time job
with less compensation to provide personal care for the
recipient;
new text end

new text begin (iii) the relative takes a leave of absence without pay to
provide personal care for the recipient;
new text end

new text begin (iv) the relative incurs substantial expenses by providing
personal care for the recipient; or
new text end

new text begin (v) because of labor conditions, special language needs, or
intermittent hours of care needed, the relative is needed in
order to provide an adequate number of qualified personal care
assistants to meet the medical needs of the recipient;
new text end

new text begin (11) new text end homemaker services that are not an integral part of a
personal care assistant services;

deleted text begin (11) deleted text end new text begin (12) new text end home maintenance or chore services;

deleted text begin (12) deleted text end new text begin (13) new text end services not specified under paragraph (a); and

deleted text begin (13) deleted text end new text begin (14) new text end services not authorized by the commissioner or
the commissioner's designee.

(e) The recipient or responsible party may choose to
supervise the personal care assistant or to have a qualified
professional, as defined in section 256B.0625, subdivision 19c,
provide the supervision. As required under section 256B.0625,
subdivision 19c, the county public health nurse, as a part of
the assessment, will assist the recipient or responsible party
to identify the most appropriate person to provide supervision
of the personal care assistant. Health-related delegated tasks
performed by the personal care assistant will be under the
supervision of a qualified professional or the direction of the
recipient's physician. If the recipient has a qualified
professional, Minnesota Rules, part 9505.0335, subpart 4,
applies.

new text begin (f) The commissioner shall establish an ongoing audit
process for potential fraud and abuse for personal care
assistant services.
new text end

Sec. 23.

Minnesota Statutes 2004, section 256B.0627,
subdivision 9, is amended to read:

Subd. 9.

Flexible use of personal care assistant hours.

(a) new text begin The commissioner may allow for the flexible use of personal
care assistant hours. new text end "Flexible use" means the scheduled use of
authorized hours of personal care assistant services, which vary
within the length of the service authorization in order to more
effectively meet the needs and schedule of the recipient.
Recipients may use their approved hours flexibly within the
service authorization period for medically necessary covered
services specified in the assessment required in subdivision 1.
The flexible use of authorized hours does not increase the total
amount of authorized hours available to a recipient as
determined under subdivision 5. The commissioner shall not
authorize additional personal care assistant services to
supplement a service authorization that is exhausted before the
end date under a flexible service use plan, unless the county
public health nurse determines a change in condition and a need
for increased services is established.

(b) new text begin The recipient or responsible party, together with the
county public health nurse, shall determine whether flexible use
is an appropriate option based on the needs and preferences of
the recipient or responsible party, and, if appropriate, must
ensure that the allocation of hours covers the ongoing needs of
the recipient over the entire service authorization period. As
part of the assessment and service planning process, the
recipient or responsible party must work with the county public
health nurse to develop a written month-to-month plan of the
projected use of personal care assistant services that is part
of the service plan and ensures:
new text end

new text begin (1) that the health and safety needs of the recipient will
be met;
new text end

new text begin (2) that the total annual authorization will not exceed
before the end date; and
new text end

new text begin (3) how actual use of hours will be monitored.
new text end

new text begin (c) If the actual use of personal care assistant service
varies significantly from the use projected in the plan, the
written plan must be promptly updated by the recipient or
responsible party and the county public health nurse.
new text end

new text begin (d) new text end The recipient or responsible party, together with the
provider, must work to monitor and document the use of
authorized hours and ensure that a recipient is able to manage
services effectively throughout the authorized period. new text begin The
provider must ensure that the month-to-month plan is
incorporated into the care plan. new text end Upon request of the recipient
or responsible party, the provider must furnish regular updates
to the recipient or responsible party on the amount of personal
care assistant services used.

new text begin (e) The recipient or responsible party may revoke the
authorization for flexible use of hours by notifying the
provider and county public health nurse in writing.
new text end

new text begin (f) If the requirements in paragraphs (a) to (e) have not
substantially been met, the commissioner shall deny, revoke, or
suspend the authorization to use authorized hours flexibly. The
recipient or responsible party may appeal the commissioner's
action according to section 256.045. The denial, revocation, or
suspension to use the flexible hours option shall not affect the
recipient's authorized level of personal care assistant services
as determined under subdivision 5.
new text end

Sec. 24.

Minnesota Statutes 2004, section 256B.0631, is
amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Healthy lifestyle waiver. new text end

new text begin The co-payments
described in subdivision 1 shall be waived by the provider if
the recipient is practicing a healthy lifestyle by refraining
from tobacco use or is participating in a smoking cessation
program. To obtain the waiver, the recipient must sign a
statement stating that the recipient does not use tobacco
products or is currently participating in a smoking cessation
program. The provider shall keep the signed statement on file.
new text end

Sec. 25.

new text begin [256B.072] PERFORMANCE REPORTING AND QUALITY
IMPROVEMENT PAYMENT SYSTEM.
new text end

new text begin (a) The commissioner of human services shall establish a
performance reporting and payment system for health care
providers who provide health care services to public program
recipients covered under chapters 256B, 256D, and 256L.
new text end

new text begin (b) The measures used for the performance reporting and
payment system for medical groups or single-physician practices
shall include, but are not limited to, measures of care for
asthma, diabetes, hypertension, and coronary artery disease and
measures of preventive care services. The measures used for the
performance reporting and payment system for inpatient hospitals
shall include, but are not limited to, measures of care for
acute myocardial infarction, heart failure, and pneumonia, and
measures of care and prevention of surgical infections. In the
case of a medical group or single-physician practice, the
measures used shall be consistent with measures published by
nonprofit Minnesota or national organizations that produce and
disseminate health care quality measures or evidence-based
health care guidelines. In the case of inpatient hospital
measures, the commissioner shall appoint the Minnesota Hospital
Association and Stratis Health to develop the performance
measures to be used for hospital reporting. To enable a
consistent measurement process across the community, the
commissioner may use measures of care provided for patients in
addition to those identified in paragraph (a). The commissioner
shall ensure collaboration with other health care reporting
organizations so that the measures described in this section are
consistent with those reported by those organizations and used
by other purchasers in Minnesota.
new text end

new text begin (c) For recipients seen on or after January 1, 2007, the
commissioner shall provide a performance bonus payment to
providers who have achieved certain levels of performance
established by the commissioner with respect to the measures or
who have achieved certain rates of improvement established by
the commissioner with respect to the measures or whose rates of
achievement have increased over a previous period, as
established by the commissioner. The performance bonus payment
may be a fixed dollar amount per patient, paid quarterly or
annually, or alternatively payment may be made as a percentage
increase over payments allowed elsewhere in statute for the
recipients identified in paragraph (a). In order for providers
to be eligible for a performance bonus payment under this
section, the commissioner may require the providers to submit
information in a required format to a health care reporting
organization or to cooperate with the information collection
procedures of that organization. The commissioner may contract
with a reporting organization to assist with the collection of
reporting information and to prevent duplication of reporting.
The commissioner may limit application of the performance bonus
payment system to providers that provide a sufficiently large
volume of care to permit adequate statistical precision in the
measurement of that care, as established by the commissioner,
after consulting with other health care quality reporting
organizations.
new text end

new text begin (d) The performance bonus payments shall be funded with the
projected savings in the program costs due to improved results
of these measures with the eligible providers.
new text end

new text begin (e) The commissioner shall publish a description of the
proposed performance reporting and payment system for the
calendar year beginning January 1, 2007, and each subsequent
calendar year, at least three months prior to the beginning of
that calendar year.
new text end

new text begin (f) By April 1, 2007, and annually thereafter, the
commissioner shall report through a public Web site the results
by medical group, single-physician practice, and hospital of the
measures and the performance payments under this section, and
shall compare the results by medical group, single-physician
practice, and hospital for patients enrolled in public programs
to patients enrolled in private health plans. To achieve this
reporting, the commissioner may contract with a health care
reporting organization that operates a Web site suitable for
this purpose.
new text end

Sec. 26.

new text begin [256B.0918] EMPLOYEE SCHOLARSHIP COSTS AND
TRAINING IN ENGLISH AS A SECOND LANGUAGE.
new text end

new text begin (a) For the fiscal year beginning July 1, 2005, the
commissioner shall provide to each provider listed in paragraph
(c) a scholarship reimbursement increase of two-tenths percent
of the reimbursement rate for that provider to be used:
new text end

new text begin (1) for employee scholarships that satisfy the following
requirements:
new text end

new text begin (i) scholarships are available to all employees who work an
average of at least 20 hours per week for the provider, except
administrators, department supervisors, and registered nurses;
and
new text end

new text begin (ii) the course of study is expected to lead to career
advancement with the provider or in long-term care, including
home care or care of persons with disabilities, including
medical care interpreter services and social work; and
new text end

new text begin (2) to provide job-related training in English as a second
language.
new text end

new text begin (b) A provider receiving a rate adjustment under this
subdivision with an annualized value of at least $1,000 shall
maintain documentation to be submitted to the commissioner on a
schedule determined by the commissioner and on a form supplied
by the commissioner of the scholarship rate increase received,
including:
new text end

new text begin (1) the amount received from this reimbursement increase;
new text end

new text begin (2) the amount used for training in English as a second
language;
new text end

new text begin (3) the number of persons receiving the training;
new text end

new text begin (4) the name of the person or entity providing the
training; and
new text end

new text begin (5) for each scholarship recipient, the name of the
recipient, the amount awarded, the educational institution
attended, the nature of the educational program, the program
completion date, and a determination of the amount spent as a
percentage of the provider's reimbursement.
new text end

new text begin The commissioner shall report to the legislature annually,
beginning January 15, 2006, with information on the use of these
funds.
new text end

new text begin (c) The rate increases described in this section shall be
provided to home and community-based waivered services for
persons with mental retardation or related conditions under
section 256B.501; home and community-based waivered services for
the elderly under section 256B.0915; waivered services under
community alternatives for disabled individuals under section
256B.49; community alternative care waivered services under
section 256B.49; traumatic brain injury waivered services under
section 256B.49; nursing services and home health services under
section 256B.0625, subdivision 6a; personal care services and
nursing supervision of personal care services under section
256B.0625, subdivision 19a; private duty nursing services under
section 256B.0625, subdivision 7; day training and habilitation
services for adults with mental retardation or related
conditions under sections 252.40 to 252.46; alternative care
services under section 256B.0913; adult residential program
grants under Minnesota Rules, parts 9535.2000 to 9535.3000;
semi-independent living services (SILS) under section 252.275,
including SILS funding under county social services grants
formerly funded under chapter 256I; community support services
for deaf and hard-of-hearing adults with mental illness who use
or wish to use sign language as their primary means of
communication; the group residential housing supplementary
service rate under section 256I.05, subdivision 1a; chemical
dependency residential and nonresidential service providers
under section 254B.03; and intermediate care facilities for
persons with mental retardation under section 256B.5012.
new text end

new text begin (d) These increases shall be included in the provider's
reimbursement rate for the purpose of determining future rates
for the provider.
new text end

Sec. 27.

Minnesota Statutes 2004, section 256D.03,
subdivision 4, is amended to read:

Subd. 4.

General assistance medical care; services.

(a)(i) For a person who is eligible under subdivision 3,
paragraph (a), clause (2), item (i), general assistance medical
care covers, except as provided in paragraph (c):

(1) inpatient hospital services;

(2) outpatient hospital services;

(3) services provided by Medicare certified rehabilitation
agencies;

(4) prescription drugs and other products recommended
through the process established in section 256B.0625,
subdivision 13;

(5) equipment necessary to administer insulin and
diagnostic supplies and equipment for diabetics to monitor blood
sugar level;

(6) eyeglasses and eye examinations provided by a physician
or optometrist;

(7) hearing aids;

(8) prosthetic devices;

(9) laboratory and X-ray services;

(10) physician's services;

(11) medical transportation except special transportation;

(12) chiropractic services as covered under the medical
assistance program;

(13) podiatric services;

(14) dental services and dentures, subject to the
limitations specified in section 256B.0625, subdivision 9;

(15) outpatient services provided by a mental health center
or clinic that is under contract with the county board and is
established under section 245.62;

(16) day treatment services for mental illness provided
under contract with the county board;

(17) prescribed medications for persons who have been
diagnosed as mentally ill as necessary to prevent more
restrictive institutionalization;

(18) psychological services, medical supplies and
equipment, and Medicare premiums, coinsurance and deductible
payments;

(19) medical equipment not specifically listed in this
paragraph when the use of the equipment will prevent the need
for costlier services that are reimbursable under this
subdivision;

(20) services performed by a certified pediatric nurse
practitioner, a certified family nurse practitioner, a certified
adult nurse practitioner, a certified obstetric/gynecological
nurse practitioner, a certified neonatal nurse practitioner, or
a certified geriatric nurse practitioner in independent
practice, if (1) the service is otherwise covered under this
chapter as a physician service, (2) the service provided on an
inpatient basis is not included as part of the cost for
inpatient services included in the operating payment rate, and
(3) the service is within the scope of practice of the nurse
practitioner's license as a registered nurse, as defined in
section 148.171;

(21) services of a certified public health nurse or a
registered nurse practicing in a public health nursing clinic
that is a department of, or that operates under the direct
authority of, a unit of government, if the service is within the
scope of practice of the public health nurse's license as a
registered nurse, as defined in section 148.171; and

(22) telemedicine consultations, to the extent they are
covered under section 256B.0625, subdivision 3b.

(ii) Effective October 1, 2003, for a person who is
eligible under subdivision 3, paragraph (a), clause (2), item
(ii), general assistance medical care coverage is limited to
inpatient hospital services, including physician services
provided during the inpatient hospital stay. A $1,000
deductible is required for each inpatient hospitalization.

(b) Gender reassignment surgery and related services are
not covered services under this subdivision unless the
individual began receiving gender reassignment services prior to
July 1, 1995.

(c) In order to contain costs, the commissioner of human
services shall select vendors of medical care who can provide
the most economical care consistent with high medical standards
and shall where possible contract with organizations on a
prepaid capitation basis to provide these services. The
commissioner shall consider proposals by counties and vendors
for prepaid health plans, competitive bidding programs, block
grants, or other vendor payment mechanisms designed to provide
services in an economical manner or to control utilization, with
safeguards to ensure that necessary services are provided.
Before implementing prepaid programs in counties with a county
operated or affiliated public teaching hospital or a hospital or
clinic operated by the University of Minnesota, the commissioner
shall consider the risks the prepaid program creates for the
hospital and allow the county or hospital the opportunity to
participate in the program in a manner that reflects the risk of
adverse selection and the nature of the patients served by the
hospital, provided the terms of participation in the program are
competitive with the terms of other participants considering the
nature of the population served. Payment for services provided
pursuant to this subdivision shall be as provided to medical
assistance vendors of these services under sections 256B.02,
subdivision 8, and 256B.0625. For payments made during fiscal
year 1990 and later years, the commissioner shall consult with
an independent actuary in establishing prepayment rates, but
shall retain final control over the rate methodology.

(d) Recipients eligible under subdivision 3, paragraph (a),
clause (2), item (i), shall pay the following co-payments for
services provided on or after October 1, 2003:

(1) $3 per nonpreventive visit. 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 ancillary, chiropractor,
podiatrist, nurse midwife, advanced practice nurse, audiologist,
optician, or optometrist;

(2) $25 for eyeglasses;

(3) $25 for nonemergency visits to a hospital-based
emergency room;

(4) $3 per brand-name drug prescription and $1 per generic
drug prescription, subject to a $20 per month maximum for
prescription drug co-payments. No co-payments shall apply to
antipsychotic drugs when used for the treatment of mental
illness; and

(5) 50 percent coinsurance on restorative dental services.

(e) Co-payments shall be limited to one per day per
provider for nonpreventive visits, eyeglasses, and nonemergency
visits to a hospital-based emergency room. Recipients of
general assistance medical care are responsible for all
co-payments in this subdivision. The general assistance medical
care reimbursement to the provider shall be reduced by the
amount of the co-payment, except that reimbursement for
prescription drugs shall not be reduced once a recipient has
reached the $20 per month maximum for prescription drug
co-payments. The provider collects the co-payment from the
recipient. Providers may not deny services to recipients who
are unable to pay the co-payment, except as provided in
paragraph (f).

(f) If it is the routine business practice of a provider to
refuse service to an individual with uncollected debt, the
provider may include uncollected co-payments under this
section. A provider must give advance notice to a recipient
with uncollected debt before services can be denied.

new text begin (g) The co-payments described in paragraph (d) shall be
waived by the provider if the recipient practices a healthy
lifestyle by refraining from tobacco use or is participating in
a smoking cessation program. To obtain the waiver, the
recipient must sign a statement stating that the recipient does
not use tobacco products or is currently participating in a
smoking cessation program. The provider shall keep the signed
statement on file.
new text end

deleted text begin (g) deleted text end new text begin (h) new text end Any county may, from its own resources, provide
medical payments for which state payments are not made.

deleted text begin (h) deleted text end new text begin (i) new text end Chemical dependency services that are reimbursed
under chapter 254B must not be reimbursed under general
assistance medical care.

deleted text begin (i) deleted text end new text begin (j) new text end The maximum payment for new vendors enrolled in the
general assistance medical care program after the base year
shall be determined from the average usual and customary charge
of the same vendor type enrolled in the base year.

deleted text begin (j) deleted text end new text begin (k) new text end The conditions of payment for services under this
subdivision are the same as the conditions specified in rules
adopted under chapter 256B governing the medical assistance
program, unless otherwise provided by statute or rule.

deleted text begin (k) deleted text end new text begin (l) new text end Inpatient and outpatient payments shall be reduced
by five percent, effective July 1, 2003. This reduction is in
addition to the five percent reduction effective July 1, 2003,
and incorporated by reference in paragraph (i).

deleted text begin (l) deleted text end new text begin (m) new text end Payments for all other health services except
inpatient, outpatient, and pharmacy services shall be reduced by
five percent, effective July 1, 2003.

deleted text begin (m) deleted text end new text begin (n) new text end Payments to managed care plans shall be reduced by
five percent for services provided on or after October 1, 2003.

deleted text begin (n) deleted text end new text begin (o) new text end A hospital receiving a reduced payment as a result
of this section may apply the unpaid balance toward satisfaction
of the hospital's bad debts.

Sec. 28.

Minnesota Statutes 2004, section 256L.07,
subdivision 1, is amended to read:

Subdivision 1.

General requirements.

(a) Children
enrolled in the original children's health plan as of September
30, 1992, children who enrolled in the MinnesotaCare program
after September 30, 1992, pursuant to Laws 1992, chapter 549,
article 4, section 17, and children who have family gross
incomes that are equal to or less than 150 percent of the
federal poverty guidelines are eligible without meeting the
requirements of subdivision 2 and the four-month requirement in
subdivision 3, as long as they maintain continuous coverage in
the MinnesotaCare program or medical assistance. Children who
apply for MinnesotaCare on or after the implementation date of
the employer-subsidized health coverage program as described in
Laws 1998, chapter 407, article 5, section 45, who have family
gross incomes that are equal to or less than 150 percent of the
federal poverty guidelines, must meet the requirements of
subdivision 2 to be eligible for MinnesotaCare.

(b) Families enrolled in MinnesotaCare under section
256L.04, subdivision 1, whose income increases above 275 percent
of the federal poverty guidelines, are no longer eligible for
the program and shall be disenrolled by the commissioner.
Individuals enrolled in MinnesotaCare under section 256L.04,
subdivision 7, whose income increases above 175 percent of the
federal poverty guidelines are no longer eligible for the
program and shall be disenrolled by the commissioner. For
persons disenrolled under this subdivision, MinnesotaCare
coverage terminates the last day of the calendar month following
the month in which the commissioner determines that the income
of a family or individual exceeds program income limits.

(c) deleted text begin (1) deleted text end Notwithstanding paragraph (b), new text begin individuals and
new text end families deleted text begin enrolled in MinnesotaCare under section 256L.04,
subdivision 1, deleted text end may remain enrolled in MinnesotaCare if ten
percent of their annual income is less than the annual premium
for a policy with a $500 deductible available through the
Minnesota Comprehensive Health Association. new text begin Individuals and
new text end families who are no longer eligible for MinnesotaCare under this
subdivision shall be given deleted text begin an 18-month deleted text end new text begin a 12-month new text end notice period
from the date that ineligibility is determined before
disenrollment. deleted text begin This clause expires February 1, 2004.
deleted text end

deleted text begin (2) Effective February 1, 2004, notwithstanding paragraph
(b), children may remain enrolled in MinnesotaCare if ten
percent of their annual family income is less than the annual
premium for a policy with a $500 deductible available through
the Minnesota Comprehensive Health Association. Children who
are no longer eligible for MinnesotaCare under this clause shall
be given a 12-month notice period from the date that
ineligibility is determined before disenrollment. deleted text end The premium
for deleted text begin children deleted text end new text begin individuals and families new text end remaining eligible under
this deleted text begin clause deleted text end new text begin paragraph new text end shall be the maximum premium determined
under section 256L.15, subdivision 2, paragraph (b).

(d) Effective July 1, 2003, notwithstanding paragraphs (b)
and (c), parents are no longer eligible for MinnesotaCare if
gross household income exceeds $50,000.

Sec. 29.

new text begin [256L.20] MINNESOTACARE OPTION FOR SMALL
EMPLOYERS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purpose of this
section, the terms used have the meanings given them.
new text end

new text begin (b) "Dependent" means an unmarried child under 21 years of
age.
new text end

new text begin (c) "Eligible employer" means a business that employs at
least two, but not more than 50, eligible employees, the
majority of whom are employed in the state, and includes a
municipality that has 50 or fewer employees.
new text end

new text begin (d) "Eligible employee" means an employee who works at
least 20 hours per week for an eligible employer. Eligible
employee does not include an employee who works on a temporary
or substitute basis or who does not work more than 26 weeks
annually.
new text end

new text begin (e) "Maximum premium" has the meaning given under section
256L.15, subdivision 2, paragraph (b), clause (3).
new text end

new text begin (f) "Participating employer" means an eligible employer who
meets the requirements described in subdivision 3 and applies to
the commissioner to enroll its eligible employees and their
dependents in the MinnesotaCare program.
new text end

new text begin (g) "Program" means the MinnesotaCare program.
new text end

new text begin Subd. 2. new text end

new text begin Option. new text end

new text begin Eligible employees and their dependents
may enroll in MinnesotaCare if the eligible employer meets the
requirements of subdivision 3. The effective date of coverage
is according to section 256L.05, subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Employer requirements. new text end

new text begin The commissioner shall
establish procedures for an eligible employer to apply for
coverage through the program. In order to participate, an
eligible employer must meet the following requirements:
new text end

new text begin (1) agrees to contribute toward the cost of the premium for
the employee and the employee's dependents according to
subdivision 4;
new text end

new text begin (2) certifies that at least 75 percent of its eligible
employees who do not have other creditable health coverage are
enrolled in the program;
new text end

new text begin (3) offers coverage to all eligible employees and the
dependents of eligible employees; and
new text end

new text begin (4) has not provided employer-subsidized health coverage as
an employee benefit during the previous 12 months, as defined in
section 256L.07, subdivision 2, paragraph (c).
new text end

new text begin Subd. 4. new text end

new text begin Premiums. new text end

new text begin (a) The premium for MinnesotaCare
coverage provided under this section is equal to the maximum
premium regardless of the income of the eligible employee.
new text end

new text begin (b) For eligible employees without dependents with income
equal to or less than 175 percent of the federal poverty
guidelines and for eligible employees with dependents with
income equal to or less than 275 percent of the federal poverty
guidelines, the participating employer shall pay 50 percent of
the maximum premium for the eligible employee and any
dependents, if applicable.
new text end

new text begin (c) For eligible employees without dependents with income
over 175 percent of the federal poverty guidelines and for
eligible employees with dependents with income over 275 percent
of the federal poverty guidelines, the participating employer
shall pay the full cost of the maximum premium for the eligible
employee and any dependents, if applicable. The participating
employer may require the employee to pay a portion of the cost
of the premium so long as the employer pays 50 percent of the
cost. If the employer requires the employee to pay a portion of
the premium, the employee shall pay the portion of the cost to
the employer.
new text end

new text begin (d) The commissioner shall collect premium payments from
participating employers for eligible employees and their
dependents who are covered by the program as provided under this
section. All premiums collected shall be deposited in the
health care access fund.
new text end

new text begin Subd. 5. new text end

new text begin Coverage. new text end

new text begin The coverage offered to those
enrolled in the program under this section must include all
health services described under section 256L.03 and all
co-payments and coinsurance requirements described under section
256L.03, subdivision 5, apply.
new text end

new text begin Subd. 6. new text end

new text begin Enrollment. new text end

new text begin Upon payment of the premium, in
accordance with this section and section 256L.06, eligible
employees and their dependents shall be enrolled in
MinnesotaCare. For purposes of enrollment under this section,
income eligibility limits established under sections 256L.04 and
256L.07, subdivision 1, and asset limits established under
section 256L.17 do not apply. The barriers established under
section 256L.07, subdivision 2 or 3, do not apply to enrollees
eligible under this section. The commissioner may require
eligible employees to provide income verification to determine
premiums.
new text end

Sec. 30. new text begin LIMITING COVERAGE OF HEALTH CARE SERVICES FOR
MEDICAL ASSISTANCE, GENERAL ASSISTANCE MEDICAL CARE, AND
MINNESOTACARE PROGRAMS.
new text end

new text begin Subdivision 1. new text end

new text begin Prior authorization of services. new text end

new text begin (a)
Effective July 1, 2005, prior authorization is required for the
services described in subdivision 2.
new text end

new text begin (b) Prior authorization shall be conducted by the medical
director of the Department of Human Services in conjunction with
a medical policy advisory council. To the extent available, the
medical director shall use publicly available evidence-based
guidelines developed by an independent, nonprofit organization
or by the professional association of the specialty that
typically provides the service or by a multistate Medicaid
evidence-based practice center. If the commissioner does not
have a medical director and medical policy director in place,
the commissioner may contract prior authorization to a
Minnesota-licensed utilization review organization.
new text end

new text begin (c) This subdivision expires July 1, 2007, or when a list
is established according to Minnesota Statutes, section
256B.0625, subdivision 46, whichever is earlier.
new text end

new text begin Subd. 2. new text end

new text begin Services requiring prior authorization. new text end

new text begin The
following services require prior authorization:
new text end

new text begin (1) positive emission tomography (PET) scans;
new text end

new text begin (2) electronic beam computed tomography (EBCT);
new text end

new text begin (3) virtual colonoscopy;
new text end

new text begin (4) spinal fusion, unless in an emergency situation related
to trauma;
new text end

new text begin (5) bariatric surgery;
new text end

new text begin (6) chiropractic visits beyond ten visits;
new text end

new text begin (7) circumcision; and
new text end

new text begin (8) orthodontia.
new text end

new text begin Subd. 3. new text end

new text begin Services requiring review before addition to
public programs benefit sets. new text end

new text begin No new medical device, brand
drug, or medical procedure shall be included in the medical
assistance benefit set until a technology assessment has been
completed and the potential benefits are proven to outweigh the
additional costs of the new device, drug, or procedure.
Technology assessments by independent organizations with no
conflict of interest should be used in making these
determinations.
new text end

Sec. 31. new text begin TASK FORCE ON CHILDHOOD OBESITY.
new text end

new text begin (a) The commissioner of health, in consultation with the
commissioners of human services and education, shall convene a
task force to study and make recommendations on reducing the
rate of obesity among the children in Minnesota. The task force
shall determine the number of children who are currently obese
and set a goal, including measurable outcomes for the state in
terms of reducing the rate of childhood obesity. The task force
shall make recommendations on how to achieve this goal,
including, but not limited to, increasing physical activities;
exploring opportunities to promote physical education and
healthy eating programs; improving the nutritional offerings
through breakfast and lunch menus; and evaluating the
availability and choice of nutritional products offered in
public schools. The members of the task force shall include
representatives of the Minnesota Medical Association; the
Minnesota Nurses Association; the Local Public Health
Association of Minnesota; the Minnesota Dietetic Association;
the Minnesota School Food Service Association; the Minnesota
Association of Health, Physical Education, Recreation, and
Dance; the Minnesota School Boards Association; the Minnesota
School Administrators Association; the Minnesota Secondary
Principals Association; the vending industry; and consumers.
The terms and compensation of the members of the task force
shall be in accordance with Minnesota Statutes, section 15.059,
subdivision 6.
new text end

new text begin (b) The commissioner must submit the recommendations of the
task force to the legislature by January 15, 2007.
new text end

Sec. 32. new text begin IMPLEMENTATION OF AN ELECTRONIC HEALTH RECORDS
SYSTEM.
new text end

new text begin The commissioner of health, in consultation with the
electronic health record planning work group established in Laws
2004, chapter 288, article 7, section 7, shall develop a
statewide plan for all hospitals and physician group practices
to have in place an interoperable electronic health records
system by January 1, 2015. In developing the plan, the
commissioner shall consider:
new text end

new text begin (1) creating financial assistance to hospitals and
providers for implementing or updating an electronic health
records system, including, but not limited to, the establishment
of grants, financial incentives, or low-interest loans;
new text end

new text begin (2) addressing specific needs and concerns of safety-net
hospitals, community health clinics, and other health care
providers who serve low-income patients in implementing an
electronic records system within the hospital or practice; and
new text end

new text begin (3) providing assistance in the development of possible
alliances or collaborations among providers.
new text end

new text begin The commissioner shall provide preliminary reports to the
chairs of the senate and house committees with jurisdiction over
health care policy and finance biennially beginning January 15,
2007, on the status of reaching the goal for all hospitals and
physician group practices to have an interoperable electronic
health records system in place by January 1, 2005. The reports
shall include recommendations on statutory language necessary to
implement the plan, including possible financing options.
new text end

Sec. 33. new text begin APPROPRIATION.
new text end

new text begin (a) $....... is appropriated for the biennium beginning
July 1, 2005, from the general fund to the Board of Trustees of
the Minnesota State Colleges and Universities for the nursing
and health care education plan designed to:
new text end

new text begin (1) expand the system's enrollment in registered nursing
education programs;
new text end

new text begin (2) support practical nursing programs in regions of high
need;
new text end

new text begin (3) address the shortage of nursing faculty; and
new text end

new text begin (4) provide accessible learning opportunities to students
through distance education and simulation experiences.
new text end

new text begin (b) $....... is appropriated for the biennium beginning
July 1, 2005, from the general fund to the commissioner of
health for the loan forgiveness program in Minnesota Statutes,
section 144.1501.
new text end