SF 82

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to health; reducing the MinnesotaCare 
  1.3             provider tax rate; eliminating the tax on certain 
  1.4             categories of providers; amending Minnesota Statutes 
  1.5             1996, sections 256.9352, subdivision 3; 295.50, 
  1.6             subdivisions 3, 4, and 9b; 295.51, subdivision 1; 
  1.7             295.52, subdivisions 1, 1a, and 2; 295.53; 295.54, 
  1.8             subdivision 1; 295.56; and 295.582; repealing 
  1.9             Minnesota Statutes 1996, sections 295.50, subdivisions 
  1.10            10a, 14, and 15; 295.51, subdivision 1a; 295.52, 
  1.11            subdivisions 1b, 3, 4, and 4a; and 295.54, 
  1.12            subdivisions 2 and 3. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1996, section 256.9352, 
  1.15  subdivision 3, is amended to read: 
  1.16     Subd. 3.  [FINANCIAL MANAGEMENT.] (a) The commissioner 
  1.17  shall manage spending for the MinnesotaCare program in a manner 
  1.18  that maintains a minimum reserve equal to five percent of the 
  1.19  expected cost of state premium subsidies.  The commissioner must 
  1.20  make a quarterly assessment of the expected expenditures for the 
  1.21  covered services for the remainder of the current biennium and 
  1.22  for the following biennium.  The estimated expenditure, 
  1.23  including minimum reserve requirements, shall be compared to an 
  1.24  estimate of the revenues that will be deposited in the health 
  1.25  care access fund.  Based on this comparison, and after 
  1.26  consulting with the chairs of the house ways and means committee 
  1.27  and the senate finance committee, and the legislative commission 
  1.28  on health care access, the commissioner shall, as necessary, 
  1.29  make the adjustments specified in paragraph (b) to ensure that 
  2.1   expenditures remain within the limits of available revenues for 
  2.2   the remainder of the current biennium and for the following 
  2.3   biennium.  The commissioner shall not hire additional staff 
  2.4   using appropriations from the health care access fund until the 
  2.5   commissioner of finance makes a determination that the 
  2.6   adjustments implemented under paragraph (b) are sufficient to 
  2.7   allow MinnesotaCare expenditures to remain within the limits of 
  2.8   available revenues for the remainder of the current biennium and 
  2.9   for the following biennium. 
  2.10     (b) The adjustments the commissioner shall use must be 
  2.11  implemented in this order:  first, stop enrollment of single 
  2.12  adults and households without children; second, upon 45 days' 
  2.13  notice, stop coverage of single adults and households without 
  2.14  children already enrolled in the MinnesotaCare program; third, 
  2.15  upon 90 days' notice, decrease the premium subsidy amounts by 
  2.16  ten percent for families with gross annual income above 200 
  2.17  percent of the federal poverty guidelines; fourth, upon 90 days' 
  2.18  notice, decrease the premium subsidy amounts by ten percent for 
  2.19  families with gross annual income at or below 200 percent; and 
  2.20  fifth, require applicants to be uninsured for at least six 
  2.21  months prior to eligibility in the MinnesotaCare program.  If 
  2.22  these measures are insufficient to limit the expenditures to the 
  2.23  estimated amount of revenue, the commissioner shall further 
  2.24  limit enrollment or decrease premium subsidies. 
  2.25     The reserve referred to in this subdivision is appropriated 
  2.26  to the commissioner but may only be used upon approval of the 
  2.27  commissioner of finance, if estimated costs will exceed the 
  2.28  forecasted amount of available revenues after all adjustments 
  2.29  authorized under this subdivision have been made. 
  2.30     By February 1, 1995, the department of human services and 
  2.31  the department of health shall develop a plan to adjust benefit 
  2.32  levels, eligibility guidelines, or other steps necessary to 
  2.33  ensure that expenditures for the MinnesotaCare program are 
  2.34  contained within the two percent taxes imposed under section 
  2.35  295.52 and the gross premiums tax imposed under section 60A.15, 
  2.36  subdivision 1, paragraph (e), for fiscal year 1997.  
  3.1      (c) Notwithstanding paragraphs (a) and (b), the 
  3.2   commissioner shall proceed with the enrollment of single adults 
  3.3   and households without children in accordance with section 
  3.4   256.9354, subdivision 5, paragraph (a), even if the expenditures 
  3.5   do not remain within the limits of available revenues through 
  3.6   fiscal year 1997 to allow the departments of human services and 
  3.7   health to develop the plan required under paragraph (b). 
  3.8      Sec. 2.  Minnesota Statutes 1996, section 295.50, 
  3.9   subdivision 3, is amended to read: 
  3.10     Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
  3.11  amounts received in money or otherwise by: 
  3.12     (1) a hospital for patient services; 
  3.13     (2) a surgical center for patient services; 
  3.14     (3) a health care physician services provider, other than a 
  3.15  staff model health carrier, for patient services; and 
  3.16     (4) a wholesale drug distributor for sale or distribution 
  3.17  of legend drugs that are delivered:  (i) to a Minnesota resident 
  3.18  by a wholesale drug distributor who is a nonresident pharmacy 
  3.19  directly, by common carrier, or by mail; or (ii) in Minnesota by 
  3.20  the wholesale drug distributor, by common carrier, or by mail, 
  3.21  unless the legend drugs are delivered to another wholesale drug 
  3.22  distributor who sells legend drugs exclusively at wholesale.  
  3.23  Legend drugs do not include nutritional products as defined in 
  3.24  Minnesota Rules, part 9505.0325; 
  3.25     (5) a staff model health plan company as gross premiums for 
  3.26  enrollees, copayments, deductibles, coinsurance, and fees for 
  3.27  patient services covered under its contracts with groups and 
  3.28  enrollees; and 
  3.29     (6) a pharmacy for medical supplies, appliances, and 
  3.30  equipment. 
  3.31     Sec. 3.  Minnesota Statutes 1996, section 295.50, 
  3.32  subdivision 4, is amended to read: 
  3.33     Subd. 4.  [HEALTH CARE PHYSICIAN SERVICES PROVIDER.] (a) 
  3.34  "Health care provider" "Physician services provider" means: 
  3.35     (1) a person furnishing any or all of the following goods 
  3.36  or physician services directly to a patient or consumer:  
  4.1   medical, surgical, optical, visual, dental, hearing, nursing 
  4.2   services, drugs, medical supplies, medical appliances, 
  4.3   laboratory, diagnostic or therapeutic services, or any goods and 
  4.4   services not listed above that qualify for reimbursement under 
  4.5   the medical assistance program provided under chapter 256B.  For 
  4.6   purposes of this section, "physician services" means patient 
  4.7   services provided by an individual licensed to practice medicine 
  4.8   under chapter 147; licensed prior to May 1, 1963, to practice 
  4.9   osteopathy under Minnesota Statutes 1961, sections 148.11 to 
  4.10  148.16; or licensed to practice medicine or osteopathy under the 
  4.11  laws of another jurisdiction.  For purposes of this clause, 
  4.12  "directly to a patient or consumer" includes goods and services 
  4.13  provided in connection with independent medical examinations 
  4.14  under section 65B.56 or other examinations for purposes of 
  4.15  litigation or insurance claims; or 
  4.16     (2) a staff model health plan company; or 
  4.17     (3) an ambulance service required to be licensed. 
  4.18     (b) Health care Physician services provider does not 
  4.19  include hospitals, nursing homes licensed under chapter 144A or 
  4.20  licensed in any other jurisdiction, pharmacies, surgical 
  4.21  centers, bus and taxicab transportation, or any other providers 
  4.22  of transportation services other than ambulance services 
  4.23  required to be licensed, supervised living facilities for 
  4.24  persons with mental retardation or related conditions, licensed 
  4.25  under Minnesota Rules, parts 4665.0100 to 4665.9900, residential 
  4.26  care homes licensed under chapter 144B, board and lodging 
  4.27  establishments providing only custodial services that are 
  4.28  licensed under chapter 157 and registered under section 157.17 
  4.29  to provide supportive services or health supervision services, 
  4.30  adult foster homes as defined in Minnesota Rules, part 
  4.31  9555.5105, day training and habilitation services for adults 
  4.32  with mental retardation and related conditions as defined in 
  4.33  section 252.41, subdivision 3, and boarding care homes, as 
  4.34  defined in Minnesota Rules, part 4655.0100. 
  4.35     Sec. 4.  Minnesota Statutes 1996, section 295.50, 
  4.36  subdivision 9b, is amended to read: 
  5.1      Subd. 9b.  [PATIENT SERVICES.] "Patient services" means 
  5.2   inpatient and outpatient services and other goods and services 
  5.3   provided by hospitals, surgical centers, or health care 
  5.4   physician services providers.  They include the following health 
  5.5   care goods and services provided to a patient or consumer: 
  5.6      (1) bed and board; 
  5.7      (2) nursing services and other related services; 
  5.8      (3) use of hospitals, surgical centers, or health care 
  5.9   provider facilities; 
  5.10     (4) medical social services; 
  5.11     (5) drugs, biologicals, supplies, appliances, and 
  5.12  equipment; 
  5.13     (6) other diagnostic or therapeutic items or services; 
  5.14     (7) medical or surgical services; 
  5.15     (8) items and services furnished to ambulatory patients not 
  5.16  requiring emergency care; 
  5.17     (9) emergency services; and 
  5.18     (10) covered services listed in section 256B.0625 and in 
  5.19  Minnesota Rules, parts 9505.0170 to 9505.0475. 
  5.20     Sec. 5.  Minnesota Statutes 1996, section 295.51, 
  5.21  subdivision 1, is amended to read: 
  5.22     Subdivision 1.  [BUSINESS TRANSACTIONS IN MINNESOTA.] A 
  5.23  hospital, surgical center, pharmacy, or health care physician 
  5.24  services provider is subject to tax under sections 295.50 to 
  5.25  295.59 if it is "transacting business in Minnesota."  A 
  5.26  hospital, surgical center, pharmacy, or health care physician 
  5.27  services provider is transacting business in Minnesota if it 
  5.28  maintains contacts with or presence in the state of Minnesota 
  5.29  sufficient to permit taxation of gross revenues received for 
  5.30  patient services under the United States Constitution. 
  5.31     Sec. 6.  Minnesota Statutes 1996, section 295.52, 
  5.32  subdivision 1, is amended to read: 
  5.33     Subdivision 1.  [HOSPITAL TAX.] A tax is imposed on each 
  5.34  hospital equal to two one percent of its gross revenues. 
  5.35     Sec. 7.  Minnesota Statutes 1996, section 295.52, 
  5.36  subdivision 1a, is amended to read: 
  6.1      Subd. 1a.  [SURGICAL CENTER TAX.] A tax is imposed on each 
  6.2   surgical center equal to two one percent of its gross revenues. 
  6.3      Sec. 8.  Minnesota Statutes 1996, section 295.52, 
  6.4   subdivision 2, is amended to read: 
  6.5      Subd. 2.  [PROVIDER TAX.] A tax is imposed on each health 
  6.6   care physician services provider equal to two one percent of its 
  6.7   gross revenues. 
  6.8      Sec. 9.  Minnesota Statutes 1996, section 295.53, is 
  6.9   amended to read: 
  6.10     295.53 [EXEMPTIONS; SPECIAL RULES.] 
  6.11     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
  6.12  are excluded from the gross revenues subject to the hospital, 
  6.13  surgical center, or health care physician services provider 
  6.14  taxes under sections 295.50 to 295.57: 
  6.15     (1) payments received for services provided under the 
  6.16  Medicare program, including payments received from the 
  6.17  government, and organizations governed by sections 1833 and 1876 
  6.18  of title XVIII of the federal Social Security Act, United States 
  6.19  Code, title 42, section 1395, and enrollee deductibles, 
  6.20  coinsurance, and copayments, whether paid by the Medicare 
  6.21  enrollee or by a Medicare supplemental coverage as defined in 
  6.22  section 62A.011, subdivision 3, clause (10).  Payments for 
  6.23  services not covered by Medicare are taxable; 
  6.24     (2) medical assistance payments including payments received 
  6.25  directly from the government or from a prepaid plan; 
  6.26     (3) payments received for home health care services; 
  6.27     (4) payments received from hospitals or surgical centers 
  6.28  for goods and services on which liability for tax is imposed 
  6.29  under section 295.52 or the source of funds for the payment is 
  6.30  exempt under clause (1), (2), (7), (8), or (10); 
  6.31     (5) payments received from health care physician services 
  6.32  providers for goods and services on which liability for tax is 
  6.33  imposed under this chapter or the source of funds for the 
  6.34  payment is exempt under clause (1), (2), (7), (8), or (10); 
  6.35     (6) amounts paid for legend drugs, other than nutritional 
  6.36  products, to a wholesale drug distributor reduced by 
  7.1   reimbursements received for legend drugs under clauses (1), (2), 
  7.2   (7), and (8); 
  7.3      (7) payments received under the general assistance medical 
  7.4   care program including payments received directly from the 
  7.5   government or from a prepaid plan; 
  7.6      (8) payments received for providing services under the 
  7.7   MinnesotaCare program including payments received directly from 
  7.8   the government or from a prepaid plan and enrollee deductibles, 
  7.9   coinsurance, and copayments.  For purposes of this clause, 
  7.10  coinsurance means the portion of payment that the enrollee is 
  7.11  required to pay for the covered service; 
  7.12     (9) payments received by a health care physician services 
  7.13  provider or the wholly owned subsidiary of a health care 
  7.14  physician services provider for care provided outside Minnesota 
  7.15  to a patient who is not domiciled in Minnesota; 
  7.16     (10) payments received from the chemical dependency fund 
  7.17  under chapter 254B; 
  7.18     (11) payments received in the nature of charitable 
  7.19  donations that are not designated for providing patient services 
  7.20  to a specific individual or group; 
  7.21     (12) payments received for providing patient services 
  7.22  incurred through a formal program of health care research 
  7.23  conducted in conformity with federal regulations governing 
  7.24  research on human subjects.  Payments received from patients or 
  7.25  from other persons paying on behalf of the patients are subject 
  7.26  to tax; 
  7.27     (13) payments received from any governmental agency for 
  7.28  services benefiting the public, not including payments made by 
  7.29  the government in its capacity as an employer or insurer; 
  7.30     (14) payments received for services provided by community 
  7.31  residential mental health facilities licensed under Minnesota 
  7.32  Rules, parts 9520.0500 to 9520.0690, community support programs 
  7.33  and family community support programs approved under Minnesota 
  7.34  Rules, parts 9535.1700 to 9535.1760, and community mental health 
  7.35  centers as defined in section 245.62, subdivision 2; 
  7.36     (15) government payments received by a regional treatment 
  8.1   center; 
  8.2      (16) payments received for hospice care services; 
  8.3      (17) payments received by a health care physician services 
  8.4   provider for medical supplies, appliances, and equipment 
  8.5   delivered outside of Minnesota; 
  8.6      (18) payments received by a post-secondary educational 
  8.7   institution from student tuition, student activity fees, health 
  8.8   care service fees, government appropriations, donations, or 
  8.9   grants.  Fee for service payments and payments for extended 
  8.10  coverage are taxable; and 
  8.11     (19) payments received for services provided by:  assisted 
  8.12  living programs and congregate housing programs. 
  8.13     (b) Payments received by wholesale drug distributors for 
  8.14  prescription drugs sold directly to veterinarians or veterinary 
  8.15  bulk purchasing organizations are excluded from the gross 
  8.16  revenues subject to the wholesale drug distributor tax under 
  8.17  sections 295.50 to 295.59. 
  8.18     Subd. 2.  [DEDUCTIONS FOR STAFF MODEL HEALTH PLAN COMPANY.] 
  8.19  In addition to the exemptions allowed under subdivision 1, a 
  8.20  staff model health plan company may deduct from its gross 
  8.21  revenues for the year: 
  8.22     (1) amounts paid to hospitals, surgical centers, and health 
  8.23  care physician services providers that are not employees of the 
  8.24  staff model health plan company for services on which liability 
  8.25  for the tax is imposed under section 295.52; 
  8.26     (2) net amounts added to reserves, to the extent that the 
  8.27  amounts added do not cause total reserves to exceed 200 percent 
  8.28  of the statutory net worth requirement, the calculation of which 
  8.29  may be determined on a consolidated basis, taking into account 
  8.30  the amounts held in reserve by affiliated staff model health 
  8.31  plan companies; 
  8.32     (3) assessments for the comprehensive health insurance plan 
  8.33  under section 62E.11; and 
  8.34     (4) amounts spent for administration as reported as total 
  8.35  administration to the department of health in the statement of 
  8.36  revenues, expenses, and net worth pursuant to section 62D.08, 
  9.1   subdivision 3, clause (a); and 
  9.2      (5) gross revenues attributable to coverage for patient 
  9.3   services that would not be taxable if provided by a hospital, 
  9.4   surgical center, or a physician services provider other than a 
  9.5   staff-model health plan company. 
  9.6      Subd. 3.  [SEPARATE STATEMENT OF TAX.] A hospital, surgical 
  9.7   center, pharmacy, or health care physician services provider 
  9.8   must not state the tax obligation under section 295.52 in a 
  9.9   deceptive or misleading manner.  It must not separately state 
  9.10  tax obligations on bills provided to patients, consumers, or 
  9.11  other payers when the amount received for the services or goods 
  9.12  is not subject to tax.  
  9.13     Pharmacies that separately state the tax obligations on 
  9.14  bills provided to consumers or to other payers who purchase 
  9.15  legend drugs may state the tax obligation as two percent of the 
  9.16  wholesale price of the legend drugs.  Pharmacies must not state 
  9.17  the tax obligation as two percent of the retail price.  
  9.18     Whenever the commissioner determines that a person has 
  9.19  engaged in any act or practice constituting a violation of this 
  9.20  subdivision, the commissioner may bring an action in the name of 
  9.21  the state in the district court of the appropriate county to 
  9.22  enjoin the act or practice and to enforce compliance with this 
  9.23  subdivision, or the commissioner may refer the matter to the 
  9.24  attorney general or the county attorney of the appropriate 
  9.25  county.  Upon a proper showing, a permanent or temporary 
  9.26  injunction, restraining order, or other appropriate relief must 
  9.27  be granted.  
  9.28     Subd. 4.  [DEDUCTION FOR RESEARCH.] (a) In addition to the 
  9.29  exemptions allowed under subdivision 1, a hospital or health 
  9.30  care physician services provider which is exempt under section 
  9.31  501(c)(3) of the Internal Revenue Code of 1986 or is owned and 
  9.32  operated under authority of a governmental unit, may deduct from 
  9.33  its gross revenues subject to the hospital or health care 
  9.34  physician services provider taxes under sections 295.50 to 
  9.35  295.57 revenues equal to expenditures for allowable research 
  9.36  programs.  
 10.1      (b) For purposes of this subdivision, expenditures for 
 10.2   allowable research programs are the direct and general program 
 10.3   costs for activities which are part of a formal program of 
 10.4   medical and health care research approved by the governing body 
 10.5   of the hospital or health care physician services provider which 
 10.6   also includes active solicitation of research funds from 
 10.7   government and private sources.  Allowable research must:  
 10.8      (1) have as its purpose the development of new knowledge in 
 10.9   basic or applied science relating to the diagnosis and treatment 
 10.10  of conditions affecting the human body; 
 10.11     (2) be subject to review by individuals with expertise in 
 10.12  the subject matter of the proposed study but who have no 
 10.13  financial interest in the proposed study and are not involved in 
 10.14  the conduct of the proposed study; and 
 10.15     (3) be subject to review and supervision by an 
 10.16  institutional review board operating in conformity with federal 
 10.17  regulations if the research involves human subjects or an 
 10.18  institutional animal care and use committee operating in 
 10.19  conformity with federal regulations if the research involves 
 10.20  animal subjects.  Research expenses are not exempt if the study 
 10.21  is a routine evaluation of health care methods or products used 
 10.22  in a particular setting conducted for the purpose of making a 
 10.23  management decision.  Costs of clinical research activities paid 
 10.24  directly for the benefit of an individual patient are excluded 
 10.25  from this exemption.  Basic research in fields including 
 10.26  biochemistry, molecular biology, and physiology are also 
 10.27  included if such programs are subject to a peer review process. 
 10.28     (c) No deduction shall be allowed under this subdivision 
 10.29  for any revenue received by the hospital or health care 
 10.30  physician services provider in the form of a grant, gift, or 
 10.31  otherwise, whether from a government or nongovernment source, on 
 10.32  which the tax liability under section 295.52 is not imposed or 
 10.33  for which the tax liability under section 295.52 has been 
 10.34  received from a third party as provided for in section 295.582. 
 10.35     (d) Effective beginning with calendar year 1995, the 
 10.36  taxpayer shall not take the deduction under this section into 
 11.1   account in determining estimated tax payments or the payment 
 11.2   made with the annual return under section 295.55.  The total 
 11.3   deduction allowable to all taxpayers under this section for 
 11.4   calendar years beginning after December 31, 1994, may not exceed 
 11.5   $65,000,000.  To implement this limit, each qualifying hospital 
 11.6   and qualifying health care physician services provider shall 
 11.7   submit to the commissioner by March 15 its total expenditures 
 11.8   qualifying for the deduction under this section for the previous 
 11.9   calendar year.  The commissioner shall sum the total 
 11.10  expenditures of all taxpayers qualifying under this section for 
 11.11  the calendar year.  If the resulting amount exceeds $65,000,000, 
 11.12  the commissioner shall allocate a part of the $65,000,000 
 11.13  deduction limit to each qualifying hospital and health care 
 11.14  physician services provider in proportion to its share of the 
 11.15  total deductions.  The commissioner shall pay a refund to each 
 11.16  qualifying hospital or provider equal to its share of the 
 11.17  deduction limit multiplied by two percent.  The commissioner 
 11.18  shall pay the refund no later than May 15 of the calendar year. 
 11.19     Subd. 5.  [EXEMPTIONS FOR PHARMACIES.] (a) Pharmacies may 
 11.20  exclude from their gross revenues subject to tax payments for 
 11.21  medical supplies, appliances, and devices that are exempt under 
 11.22  subdivision 1, clauses (1), (2), (4), (5), (7), (8), and (13). 
 11.23     (b) Pharmacies may exclude from their gross revenues 
 11.24  subject to tax payments received for medical supplies, 
 11.25  appliances, and equipment delivered outside of Minnesota. 
 11.26     Sec. 10.  Minnesota Statutes 1996, section 295.54, 
 11.27  subdivision 1, is amended to read: 
 11.28     Subdivision 1.  [TAXES PAID TO ANOTHER STATE.] A hospital, 
 11.29  surgical center, pharmacy, or health care physician services 
 11.30  provider that has paid taxes to another state or province or 
 11.31  territory of Canada measured by gross revenues and is subject to 
 11.32  tax under sections 295.52 to 295.59 on the same gross revenues 
 11.33  is entitled to a credit for the tax legally due and paid to 
 11.34  another state or province or territory of Canada to the extent 
 11.35  of the lesser of (1) the tax actually paid to the other state or 
 11.36  province or territory of Canada, or (2) the amount of tax 
 12.1   imposed by Minnesota on the gross revenues subject to tax in the 
 12.2   other taxing jurisdictions. 
 12.3      Sec. 11.  Minnesota Statutes 1996, section 295.56, is 
 12.4   amended to read: 
 12.5      295.56 [TRANSFER OF ACCOUNTS RECEIVABLE.] 
 12.6      When a hospital or health care physician services provider 
 12.7   transfers, assigns, or sells accounts receivable to another 
 12.8   person who is subject to tax under this chapter, liability for 
 12.9   the tax on the accounts receivable is imposed on the transferee, 
 12.10  assignee, or buyer of the accounts receivable.  No liability for 
 12.11  these accounts receivable is imposed on the transferor, 
 12.12  assignor, or seller of the accounts receivable.  
 12.13     Sec. 12.  Minnesota Statutes 1996, section 295.582, is 
 12.14  amended to read: 
 12.15     295.582 [AUTHORITY.] 
 12.16     (a) A hospital, surgical center, pharmacy, or health care 
 12.17  physician services provider that is subject to a tax under 
 12.18  section 295.52, or a pharmacy that has paid additional expense 
 12.19  transferred under this section by a wholesale drug distributor, 
 12.20  may transfer additional expense generated by section 295.52 
 12.21  obligations on to all third-party contracts for the purchase of 
 12.22  health care services on behalf of a patient or consumer.  The 
 12.23  additional expense transferred to the third-party purchaser must 
 12.24  not exceed two one percent of the gross revenues received under 
 12.25  the third-party contract, and two one percent of copayments and 
 12.26  deductibles paid by the individual patient or consumer.  The 
 12.27  expense must not be generated on revenues derived from payments 
 12.28  that are excluded from the tax under section 295.53.  All 
 12.29  third-party purchasers of health care services including, but 
 12.30  not limited to, third-party purchasers regulated under chapter 
 12.31  60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or 
 12.32  under section 471.61 or 471.617, must pay the transferred 
 12.33  expense in addition to any payments due under existing contracts 
 12.34  with the hospital, surgical center, pharmacy, or health care 
 12.35  physician services provider, to the extent allowed under federal 
 12.36  law.  A third-party purchaser of health care services includes, 
 13.1   but is not limited to, a health carrier, integrated service 
 13.2   network, or community integrated service network that pays for 
 13.3   health care services on behalf of patients or that reimburses, 
 13.4   indemnifies, compensates, or otherwise insures patients for 
 13.5   health care services.  A third-party purchaser shall comply with 
 13.6   this section regardless of whether the third-party purchaser is 
 13.7   a for-profit, not-for-profit, or nonprofit entity.  A wholesale 
 13.8   drug distributor may transfer additional expense generated by 
 13.9   section 295.52 obligations to entities that purchase from the 
 13.10  wholesaler, and the entities must pay the additional expense.  
 13.11  Nothing in this section limits the ability of a hospital, 
 13.12  surgical center, pharmacy, wholesale drug distributor, or health 
 13.13  care physician services provider to recover all or part of the 
 13.14  section 295.52 obligation by other methods, including increasing 
 13.15  fees or charges. 
 13.16     (b) Each third-party purchaser regulated under any chapter 
 13.17  cited in paragraph (a) shall include with its annual renewal for 
 13.18  certification of authority or licensure documentation indicating 
 13.19  compliance with paragraph (a).  If the commissioner responsible 
 13.20  for regulating the third-party purchaser finds at any time that 
 13.21  the third-party purchaser has not complied with paragraph (a), 
 13.22  the commissioner may by order fine or censure the third-party 
 13.23  purchaser or revoke or suspend the certificate of authority or 
 13.24  license of the third-party purchaser to do business in this 
 13.25  state.  The third-party purchaser may appeal the commissioner's 
 13.26  order through a contested case hearing in accordance with 
 13.27  chapter 14. 
 13.28     Sec. 13.  [REPEALER.] 
 13.29     Minnesota Statutes 1996, sections 295.50, subdivisions 10a, 
 13.30  14, and 15; 295.51, subdivision 1a; 295.52, subdivisions 1b, 3, 
 13.31  4, and 4a; and 295.54, subdivisions 2 and 3, are repealed. 
 13.32     Sec. 14.  [EFFECTIVE DATE.] 
 13.33     Sections 1 to 13 are effective July 1, 1997.