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Minnesota Legislature

Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1988 

                        CHAPTER 592-S.F.No. 1388 
           An act relating to health; setting forth requirements 
          for statements of exclusions and limitations; 
          requiring detailed statement when coverage is denied; 
          clarifying statement of enrollee bill of rights; 
          setting forth requirements for marketing materials; 
          requiring membership card; requiring written denial of 
          service; prohibiting denial of coverage in certain 
          circumstances; prohibiting retaliatory action; 
          specifying procedures for prior approval; prohibiting 
          a threat of denial of emergency health care services 
          in collection of delinquent accounts; requiring 
          report; amending Minnesota Statutes 1986, sections 
          62D.06, subdivision 1; 62D.07, subdivision 3; 62D.09, 
          subdivision 1, and by adding subdivisions; 62D.11, by 
          adding subdivisions; 62D.12, by adding subdivisions; 
          62D.20 and 325D.44, subdivision 1; Minnesota Statutes 
          1987 Supplement, section 332.37. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 62D.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  The governing body of any health 
maintenance organization which is a nonprofit corporation may 
include enrollees, providers, or other individuals; provided, 
however, that after a health maintenance organization which is a 
nonprofit corporation has been authorized under sections 62D.01 
to 62D.29 for one year, at least 40 percent of the governing 
body shall be composed of consumers elected by the enrollees 
from among the enrollees. 
    After a health maintenance organization which is a local 
governmental unit has been authorized under sections 62D.01 to 
62D.29 for one year, an enrollee advisory body shall be 
established.  The enrollees who make up this advisory body shall 
be elected by the enrollees from among the enrollees. 
    Sec. 2.  Minnesota Statutes 1986, section 62D.07, 
subdivision 3, is amended to read:  
    Subd. 3.  An evidence Contracts and evidences of coverage 
shall contain: 
    (a) No provisions or statements which are unjust, unfair, 
inequitable, misleading, deceptive, or which are untrue, 
misleading or deceptive as defined in section 62D.12, 
subdivision 1; and 
    (b) A clear, concise and complete statement of: 
    (1) The health care services and the insurance or other 
benefits, if any, to which the enrollee is entitled under the 
health maintenance contract; 
    (2) Any exclusions or limitations on the services, kind of 
services, benefits, or kind of benefits, to be provided, 
including any deductible or copayment feature and requirements 
for referrals, prior authorizations, and second opinions; 
    (3) Where and in what manner information is available as to 
how services, including emergency and out of area services, may 
be obtained; 
    (4) The total amount of payment and copayment, if any, for 
health care services and the indemnity or service benefits, if 
any, which the enrollee is obligated to pay with respect to 
individual contracts, or an indication whether the plan is 
contributory or noncontributory with respect to group 
certificates; and 
    (5) A description of the health maintenance organization's 
method for resolving enrollee complaints and a statement 
identifying the commissioner as an external source with whom 
grievances may be registered.  
    (c) On the cover page of the evidence of coverage and 
contract, a clear and complete statement of enrollees' rights as 
consumers, including but not limited to a description of each of 
the following:.  The statement must be in bold print and 
captioned "Important Consumer Information and Enrollee Bill of 
Rights" and must include but not be limited to the following 
provisions in the following language or in substantially similar 
language approved in advance by the commissioner:  
 CONSUMER INFORMATION 
    (1) COVERED SERVICES:  Services provided by (name of health 
maintenance organization) will be covered only if services are 
provided by participating (name of health maintenance 
organization) providers or authorized by (name of health 
maintenance organization).  Your contract fully defines what 
services are covered and describes procedures you must follow to 
obtain coverage. 
    (2) PROVIDERS:  Enrolling in (name of health maintenance 
organization) does not guarantee services by a particular 
provider on the list of providers.  When a provider is no longer 
part of (name of health maintenance organization), you must 
choose among remaining (name of the health maintenance 
organization) providers. 
    (3) REFERRALS:  Certain services are covered only upon 
referral.  See section (section number) of your contract for 
referral requirements.  All referrals to non-(name of health 
maintenance organization) providers and certain types of health 
care providers must be authorized by (name of health maintenance 
organization). 
    (4) EMERGENCY SERVICES:  Emergency services from providers 
who are not affiliated with (name of health maintenance 
organization) will be covered only if proper procedures are 
followed.  Your contract explains the procedures and benefits 
associated with emergency care from (name of health maintenance 
organization) and non-(name of health maintenance organization) 
providers. 
    (5) EXCLUSIONS:  Certain services or medical supplies are 
not covered.  You should read the contract for a detailed 
explanation of all exclusions. 
    (6) CONTINUATION:  You may convert to an individual health 
maintenance organization contract or continue coverage under 
certain circumstances.  These continuation and conversion rights 
are explained fully in your contract. 
    (7) CANCELLATION:  Your coverage may be canceled by you or 
(name of health maintenance organization) only under certain 
conditions.  Your contract describes all reasons for 
cancellation of coverage. 
 ENROLLEE BILL OF RIGHTS 
    (1) based upon the delivery system of each health 
maintenance organization, a statement which describes any type 
of health care professional as defined in section 145.61, whose 
services may be available only by referral of the health 
maintenance organization's participating staff;  
    (2) Enrollees have the right to available and accessible 
services which can be secured as promptly as appropriate for the 
symptoms presented, in a manner which assures continuity and, 
when medically necessary, the right to including emergency 
services available 24 hours a day and seven days a week;  
    (3) (2) Enrollees have the consumer's right to be informed 
of health problems, and to receive information regarding 
treatment alternatives and risks which is sufficient to assure 
informed choice;  
    (4) (3) Enrollees have the right to refuse treatment;, and 
    (5)  the right to privacy of medical and financial records 
maintained by the health maintenance organization and its health 
care providers, in accordance with existing law;  
    (6) (4) Enrollees have the right to file a grievance with 
the health maintenance organization and the commissioner of 
health and the right to initiate a legal proceeding when 
experiencing a problem with the health maintenance organization 
or its health care providers; 
    (7) the right to initiate a legal proceeding when 
dissatisfied with the health maintenance organization's final 
determination regarding a grievance;  
    (8) the right of the enrollee and dependents to continue 
group coverage in the event the enrollee is terminated or laid 
off from employment, provided that the cost of such coverage is 
paid by the enrollee and furthermore, the right of the enrollee 
to convert to an individual contract at the end of the 
continuation period;  
    (9) the right for notification of enrollees regarding the 
cancellation or termination of contracts with participating 
primary care professionals, and the right to choose from among 
remaining participating primary care professionals;  
    (10) the right to cancel an individual health maintenance 
contract within ten days of its receipt and to have premiums 
paid refunded if, after examination of the contract, the 
individual is not satisfied with it for any reason.  The 
individual is responsible for repaying the health maintenance 
organization for any services rendered or claims paid by the 
health maintenance organization during the ten days; and 
    (11) (5) Enrollees have the right to a grace period of 31 
days for the payment of each premium for an individual health 
maintenance contract falling due after the first premium during 
which period the contract shall continue in force;  
    (6) Medicare enrollees have the right to voluntarily 
disenroll from the health maintenance organization and the right 
not to be requested or encouraged to disenroll except in 
circumstances specified in federal law; and 
    (7) Medicare enrollees have the right to a clear 
description of nursing home and home care benefits covered by 
the health maintenance organization. 
    Sec. 3.  Minnesota Statutes 1986, section 62D.09, 
subdivision 1, is amended to read:  
    Subdivision 1.  (a) Any written marketing materials which 
may be directed toward potential enrollees and which include a 
detailed description of benefits provided by the health 
maintenance organization shall include a statement of consumer 
rights as described in section 62D.07 2, subdivision 
3, paragraph paragraphs (b) and (c).  Prior to any oral 
marketing presentation, the agent marketing the plan must inform 
the potential enrollees that any complaints concerning the 
material presented should be directed to the health maintenance 
organization, the commissioner of health, or, if applicable, the 
employer. 
    (b) Detailed marketing materials must affirmatively 
disclose all exclusions and limitations in the organization's 
services or kinds of services offered to the contracting party, 
including but not limited to the following types of exclusions 
and limitations: 
    (1) health care services not provided; 
    (2) health care services requiring copayments or 
deductibles paid by enrollees; 
    (3) the fact that access to health care services does not 
guarantee access to a particular provider type; and 
    (4) health care services that are or may be provided only 
by referral of a physician. 
    (c) No marketing materials may lead consumers to believe 
that all health care needs will be covered.  All marketing 
materials must alert consumers to possible uncovered expenses 
with the following language in bold print:  "THIS HEALTH CARE 
PLAN MAY NOT COVER ALL YOUR HEALTH CARE EXPENSES; READ YOUR 
CONTRACT CAREFULLY TO DETERMINE WHICH EXPENSES ARE COVERED."  
Immediately following the disclosure required under paragraph 
(b), clause (3), consumers must be given a telephone number to 
use to contact the health maintenance organization for specific 
information about access to provider types. 
    (d) The disclosures required in paragraphs (b) and (c) are 
not required on billboards or image, and name identification 
advertisement. 
    Sec. 4.  Minnesota Statutes 1986, section 62D.09, is 
amended by adding a subdivision to read: 
    Subd. 7.  Every health maintenance organization shall 
provide the information described in section 2, subdivision 3, 
paragraphs (b) and (c), to enrollees or their representatives on 
request, within a reasonable time.  Information on how to obtain 
referrals, prior authorization, or second opinion shall be given 
to the enrollee or an enrollee's representative in person or by 
telephone within one business day following the day the health 
maintenance organization or its representative receives the 
request for information. 
    Sec. 5.  Minnesota Statutes 1986, section 62D.09, is 
amended by adding a subdivision to read: 
    Subd. 8.  Each health maintenance organization shall issue 
a membership card to its enrollees.  The membership card must: 
    (1) identify the health maintenance organization; 
    (2) include the name, address, and telephone number to call 
if the enroller has a complaint; 
    (3) include the telephone number to call or the instruction 
on how to receive authorization for emergency care; and 
    (4) include the telephone number to call to appeal to the 
commissioner of health. 
    Sec. 6.  Minnesota Statutes 1986, section 62D.11, is 
amended by adding a subdivision to read: 
    Subd. 3.  [DENIAL OF SERVICE.] Within a reasonable time 
after receiving an enrollee's written or oral communication to 
the health maintenance organization concerning a refusal of 
service or inadequacy of services, the health maintenance 
organization shall provide the enrollee with a written statement 
of the reason for the refusal of service, and a statement 
approved by the commissioner of health which explains the health 
maintenance organization complaint procedures, and in the case 
of Medicare enrollees, which also explains Medicare appeal 
procedures. 
    Sec. 7.  Minnesota Statutes 1986, section 62D.11, is 
amended by adding a subdivision to read: 
    Subd. 4.  [COVERAGE OF SERVICE.] A health maintenance 
organization may not deny or limit coverage of a service which 
the enrollee has already received: 
    (1) 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; or 
    (2) from a nonparticipating provider, if (i) the service 
was ordered or recommended by a participating provider; (ii) the 
service would otherwise be covered, or was part of a discharge 
plan of a participating provider; and (iii) the enrollee was not 
given prior written notice stating that this service by a 
nonparticipating provider would not be covered, and listing the 
participating providers of this service available in the 
enrollee's area. 
    Sec. 8.  Minnesota Statutes 1986, section 62D.12, is 
amended by adding a subdivision to read: 
    Subd. 15.  [RETALIATORY ACTION PROHIBITED.] No health 
maintenance organization may take retaliatory action against a 
provider solely on the grounds that the provider disseminated 
accurate information regarding coverage of benefits or accurate 
benefit limitations of an enrollee's contract or accurate 
interpreted provisions of the provider agreement that limit the 
prescribing, providing, or ordering of care. 
    Sec. 9.  Minnesota Statutes 1986, section 62D.12, is 
amended by adding a subdivision to read: 
    Subd. 16.  [PRIOR AUTHORIZATION AND APPROVAL.] Each health 
maintenance organization shall establish a telephone number, 
which need not be toll-free, that providers may call with 
questions about coverage, prior authorization, and approval of 
medical services.  The telephone number must be staffed by an 
employee of the health maintenance organization during normal 
working hours during the normal work week.  After normal working 
hours, the telephone number must be equipped with an answering 
machine and recorded message to allow the caller an opportunity 
to leave a message.  The health maintenance organization must 
respond to questions within 24 hours after they are received 
excluding weekends and holidays.  At the request of a provider, 
the health maintenance organization shall provide a copy of the 
health maintenance contract for enrollees in the provider's 
service area. 
    Sec. 10.  Minnesota Statutes 1986, section 62D.20, is 
amended to read: 
    62D.20 [RULES.] 
    Subdivision 1.  [RULEMAKING.] The commissioner of health 
may, pursuant to chapter 14, promulgate such reasonable rules as 
are necessary or proper to carry out the provisions of sections 
62D.01 to 62D.29.  Included among such rules shall be those 
which provide minimum requirements for the provision of 
comprehensive health maintenance services, as defined in section 
62D.02, subdivision 7, and reasonable exclusions therefrom.  
Nothing in such rules shall force or require a health 
maintenance organization to provide elective, induced abortions, 
except as medically necessary to prevent the death of the 
mother, whether performed in a hospital, other abortion 
facility, or the office of a physician; the rules shall provide 
every health maintenance organization the option of excluding or 
including elective, induced abortions, except as medically 
necessary to prevent the death of the mother, as part of its 
comprehensive health maintenance services.  
    Subd. 2.  [PRIOR AUTHORIZATION.] The commissioner shall 
adopt rules that address the issue of appropriate prior 
authorization requirements, considering consumer needs, 
administrative concerns, and the nature of the benefit. 
     Sec. 11.  Minnesota Statutes 1986, section 325D.44, 
subdivision 1, is amended to read:  
    Subdivision 1.  A person engages in a deceptive trade 
practice when, in the course of business, vocation, or 
occupation, the person: 
    (1) passes off goods or services as those of another; 
    (2) causes likelihood of confusion or of misunderstanding 
as to the source, sponsorship, approval, or certification of 
goods or services; 
    (3) causes likelihood of confusion or of misunderstanding 
as to affiliation, connection, or association with, or 
certification by, another; 
    (4) uses deceptive representations or designations of 
geographic origin in connection with goods or services; 
    (5) represents that goods or services have sponsorship, 
approval, characteristics, ingredients, uses, benefits, or 
quantities that they do not have or that a person has a 
sponsorship, approval, status, affiliation, or connection that 
the person does not have; 
    (6) represents that goods are original or new if they are 
deteriorated, altered, reconditioned, reclaimed, used, or 
secondhand; 
    (7) represents that goods or services are of a particular 
standard, quality, or grade, or that goods are of a particular 
style or model, if they are of another; 
    (8) disparages the goods, services, or business of another 
by false or misleading representation of fact; 
    (9) advertises goods or services with intent not to sell 
them as advertised; 
    (10) advertises goods or services with intent not to supply 
reasonably expectable public demand, unless the advertisement 
discloses a limitation of quantity; 
    (11) makes false or misleading statements of fact 
concerning the reasons for, existence of, or amounts of price 
reductions; or 
    (12) in attempting to collect delinquent accounts, implies 
or suggests that health care services will be withheld in an 
emergency situation; or 
     (13) engages in any other conduct which similarly creates a 
likelihood of confusion or of misunderstanding.  
    Sec. 12.  Minnesota Statutes 1987 Supplement, section 
332.37, is amended to read:  
    332.37 [PROHIBITED PRACTICES.] 
    No collection agency or collectors shall:  (1) in 
collection letters or publications, or in any communication, 
oral or written threaten wage garnishment or legal suit by a 
particular lawyer, unless it has actually retained the lawyer; 
    (2) use or employ constables, sheriffs or any other officer 
authorized to serve legal papers in connection with the 
collection of a claim, except when performing their legally 
authorized duties; 
    (3) use or threaten to use methods of collection which 
violate Minnesota law; 
    (4) furnish legal advice or otherwise engage in the 
practice of law or represent that it is competent to do so; 
    (5) communicate with debtors in a misleading or deceptive 
manner by using the stationery of a lawyer, forms or instruments 
which only lawyers are authorized to prepare, or instruments 
which simulate the form and appearance of judicial process; 
    (6) exercise authority on behalf of a creditor to employ 
the services of lawyers unless the creditor has specifically 
authorized the agency in writing to do so and the agency's 
course of conduct is at all times consistent with a true 
relationship of attorney and client between the lawyer and the 
creditor; 
    (7) publish or cause to be published any list of debtors 
except for credit reporting purposes, use shame cards or shame 
automobiles, advertise or threaten to advertise for sale any 
claim as a means of forcing payment thereof, or use similar 
devices or methods of intimidation; 
    (8) refuse to return any claim or claims and all valuable 
papers deposited with a claim or claims upon written request of 
the creditor, claimant or forwarder after tender of the amounts 
due and owing to the agency within 30 days after the request; 
refuse or intentionally fail to account to its clients for all 
money collected within 30 days from the last day of the month in 
which the same is collected; or, refuse or fail to furnish at 
intervals of not less than 90 days upon written request of the 
claimant or forwarder, a written report upon claims received 
from the claimant or forwarder; 
    (9) operate under a name or in a manner which implies that 
the agency is a branch of or associated with any department of 
federal, state, county or local government or an agency thereof; 
    (10) commingle money collected for a customer with the 
agency's operating funds or use any part of a customer's money 
in the conduct of the agency's business; 
    (11) transact business or hold itself out as a debt 
prorater, debt adjuster, or any person who settles, adjusts, 
prorates, pools, liquidates or pays the indebtedness of a 
debtor, unless there is no charge to the debtor, or the pooling 
or liquidation is done pursuant to court order or under the 
supervision of a creditor's committee;  
    (12) violate any of the provisions of the Fair Debt 
Collection Practices Act of 1977 while attempting to collect on 
any account, bill or other indebtedness; or 
    (13) communicate with a debtor by use of a recorded message 
utilizing an automatic dialing announcing device unless the 
recorded message is immediately preceded by a live operator who 
discloses prior to the message the name of the collection agency 
and the fact the message intends to solicit payment and the 
operator obtains the consent of the debtor to hearing the 
message; or 
    (14) in collection letters or publications, or in any 
communication, oral or written, imply or suggest that health 
care services will be withheld in an emergency situation. 
    Sec. 13.  [QUALITY ASSURANCE.] 
    The commissioner of health shall prepare a report to the 
legislature before January 15, 1989, that describes the state's 
efforts to assess and to improve quality assurance standards of 
health maintenance organizations licensed under chapter 62D.  
The commissioner of human services shall contribute information 
and data from the state's programs to enroll medical assistance 
recipients in prepayment plans.  The report shall provide 
recommendations for improvement of health maintenance 
organization quality assurance mechanisms and operating 
procedures to the legislature and the health maintenance 
organizations. 
    Sec. 14.  [MANDATED BENEFITS.] 
    The commission on health plan regulatory reform, 
established by Laws 1987, chapter 370, shall address the issues 
related to mandated benefits.  Consumer choice and access to the 
most appropriate and cost-effective health care providers must 
be investigated and considered in light of the structure of 
managed care plans that are being designed and offered 
currently.  The commission shall consider the long-term savings 
associated with a broad choice of provider groups available to 
consumers. 
    Sec. 15.  [EFFECTIVE DATES.] 
    Section 3, subdivision 1, paragraph (a) is effective August 
1, 1988.  Section 2 and the remaining provisions of section 3 
are effective January 1, 1989.  Section 8 is effective the day 
following final enactment. 
    Approved April 21, 1988