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Key: (1) language to be deleted (2) new language


                         Laws of Minnesota 1987 

                        CHAPTER 130-H.F.No. 630 
           An act relating to health; allowing health maintenance 
          organizations to adjust premiums based on actual 
          health services utilization; amending Minnesota 
          Statutes 1986, sections 62D.04, subdivision 1; 62D.08, 
          subdivision 3; and 62D.10, by adding a subdivision. 
    Section 1.  Minnesota Statutes 1986, section 62D.04, 
subdivision 1, is amended to read:  
    Subdivision 1.  Upon receipt of an application for a 
certificate of authority, the commissioner of health shall 
determine whether the applicant for a certificate of authority 
    (a) demonstrated the willingness and potential ability to 
assure that health care services will be provided in such a 
manner as to enhance and assure both the availability and 
accessibility of adequate personnel and facilities; 
    (b) arrangements for an ongoing evaluation of the quality 
of health care; 
    (c) a procedure to develop, compile, evaluate, and report 
statistics relating to the cost of its operations, the pattern 
of utilization of its services, the quality, availability and 
accessibility of its services, and such other matters as may be 
reasonably required by regulation of the commissioner of health; 
    (d) reasonable provisions for emergency and out of area 
health care services; 
    (e) demonstrated that it is financially responsible and may 
reasonably be expected to meet its obligations to enrollees and 
prospective enrollees.  In making this determination, the 
commissioner of health may consider: 
    (1) the financial soundness of its arrangements for health 
care services and the proposed schedule of charges used in 
connection therewith; 
    (2) the adequacy of its working capital; 
    (3) arrangements which will guarantee for a reasonable 
period of time the continued availability or payment of the cost 
of health care services in the event of discontinuance of the 
health maintenance organization;  
    (4) agreements with providers for the provision of health 
care services; and 
    (5) any deposit of cash or securities submitted in 
accordance with section 62D.041.  
    (f) demonstrated that it will assume full financial risk on 
a prospective basis for the provision of comprehensive health 
maintenance services, including hospital care; provided, 
however, that the requirement in this paragraph shall not 
prohibit the following: 
     (1) a health maintenance organization from obtaining 
insurance or making other arrangements (i) for the cost of 
providing to any enrollee comprehensive health maintenance 
services, the aggregate value of which exceeds $5,000 in any 
year, (ii) for the cost of providing comprehensive health care 
services to its members on a nonelective emergency basis, or 
while they are outside the area served by the organization, or 
(iii) for not more than 95 percent of the amount by which the 
health maintenance organization's costs for any of its fiscal 
years exceed 105 percent of its income for such fiscal years; 
     (2) a health maintenance organization from having a 
provision in a group health maintenance contract allowing an 
adjustment of premiums paid based upon the actual health 
services utilization of the enrollees covered under the 
contract, except that at no time during the life of the contract 
shall the contract holder fully self-insure the financial risk 
of health care services delivered under the contract.  Risk 
sharing arrangements shall be subject to the requirements of 
sections 62D.01 to 62D.30; 
    (g) otherwise met the requirements of sections 62D.01 to 
    Sec. 2.  Minnesota Statutes 1986, section 62D.08, 
subdivision 3, is amended to read:  
    Subd. 3.  Such report shall be on forms prescribed by the 
commissioner of health, and shall include: 
    (a) A financial statement of the organization, including 
its balance sheet and receipts and disbursements for the 
preceding year certified by an independent certified public 
accountant, reflecting at least (1) all prepayment and other 
payments received for health care services rendered, (2) 
expenditures to all providers, by classes or groups of 
providers, and insurance companies or nonprofit health service 
plan corporations engaged to fulfill obligations arising out of 
the health maintenance contract, and (3) expenditures for 
capital improvements, or additions thereto, including but not 
limited to construction, renovation or purchase of facilities 
and capital equipment, and (4) a supplementary statement of 
assets, liabilities, premium revenue, and expenditures for risk 
sharing business under section 62D.04, subdivision 1, on forms 
prescribed by the commissioner; 
    (b) The number of new enrollees enrolled during the year, 
the number of enrollees as of the end of the year and the number 
of enrollees terminated during the year; 
    (c) A summary of information compiled pursuant to section 
62D.04, subdivision 1, clause (c) in such form as may be 
required by the commissioner of health; 
    (d) A report of the names and addresses of all persons set 
forth in section 62D.03, subdivision 4, clause (c) who were 
associated with the health maintenance organization or the major 
participating entity during the preceding year, and the amount 
of wages, expense reimbursements, or other payments to such 
individuals for services to the health maintenance organization 
or the major participating entity, as those services relate to 
the health maintenance organization, including a full disclosure 
of all financial arrangements during the preceding year required 
to be disclosed pursuant to section 62D.03, subdivision 4, 
clause (d); and 
    (e) Such other information relating to the performance of 
the health maintenance organization as is reasonably necessary 
to enable the commissioner of health to carry out the duties 
under sections 62D.01 to 62D.29. 
    Sec. 3.  Minnesota Statutes 1986, section 62D.10, is 
amended by adding a subdivision to read: 
     Subd. 6.  Health maintenance organization contracts under 
section 62D.04, subdivision 1, shall include a clear statement 
of the risk sharing arrangement. 
    Approved May 14, 1987

Official Publication of the State of Minnesota
Revisor of Statutes