Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1994, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 625-S.F.No. 2192
An act relating to health; MinnesotaCare; establishing
and regulating community integrated service networks;
defining terms; creating a reinsurance and risk
adjustment association; classifying data; requiring
reports; mandating studies; modifying provisions
relating to the regulated all-payer option; modifying
provisions relating to nursing facilities; requiring
administrative rulemaking; setting timelines and
requiring plans for implementation; designating
essential community providers; establishing an
expedited fact finding and dispute resolution process;
requiring proposed legislation; establishing task
forces; providing for demonstration models; mandating
universal coverage; requiring insurance reforms;
providing grant programs; establishing the Minnesota
health care administrative simplification act;
implementing electronic data interchange standards;
creating the Minnesota center for health care
electronic data interchange; providing standards for
the Minnesota health care identification card;
appropriating money; providing penalties; amending
Minnesota Statutes 1992, sections 60A.02, subdivision
3; 60A.15, subdivision 1; 62A.303; 62A.48, subdivision
1; 62D.02, subdivision 4; 62D.04, by adding a
subdivision; 62E.02, subdivisions 10, 18, 20, and 23;
62E.10, subdivisions 1, 2, and 3; 62E.141; 62E.16;
62J.03, by adding a subdivision; 62J.04, by adding a
subdivision; 62J.05, subdivision 2; 62L.02,
subdivisions 9, 13, 17, 24, and by adding
subdivisions; 62L.03, subdivisions 1 and 6; 62L.05,
subdivisions 1, 5, and 8; 62L.06; 62L.07, subdivision
2; 62L.08, subdivisions 2, 5, 6, 7, and by adding a
subdivision; 62L.12; 62L.21, subdivision 2; 62M.02,
subdivisions 5 and 21; 62M.03, subdivisions 1, 2, and
3; 62M.05, subdivision 3; 62M.06, subdivision 3;
72A.20, by adding a subdivision; 144.1485; 144.335, by
adding a subdivision; 144.581, subdivision 2; 145.64,
subdivision 1; 256.9355, by adding a subdivision;
256.9358, subdivision 4; 295.50, by adding
subdivisions; 295.55, subdivisions 2 and 3; 308A.005,
by adding a subdivision; 308A.635, by adding a
subdivision; and 318.02, by adding a subdivision;
Minnesota Statutes 1993 Supplement, sections 43A.317,
by adding a subdivision; 60K.14, subdivision 7;
61B.20, subdivision 13; 62A.011, subdivision 3;
62A.31, subdivision 1h; 62A.36, subdivision 1; 62A.65,
subdivisions 2, 3, 4, 5, and by adding a subdivision;
62D.12, subdivision 17; 62J.03, subdivision 6; 62J.04,
subdivisions 1 and 1a; 62J.09, subdivisions 1a and 2;
62J.23, subdivision 4; 62J.2916, subdivision 2;
62J.32, subdivision 4; 62J.33, by adding subdivisions;
62J.35, subdivisions 2 and 3; 62J.38; 62J.41,
subdivision 2; 62J.45, subdivision 11, and by adding
subdivisions; 62L.02, subdivisions 8, 11, 15, 16, 19,
and 26; 62L.03, subdivisions 3, 4, and 5; 62L.04,
subdivision 1; 62L.08, subdivisions 4 and 8; 62N.01;
62N.02, subdivisions 1, 8, and by adding a
subdivision; 62N.06, subdivision 1; 62N.065,
subdivision 1; 62N.10, subdivisions 1 and 2; 62N.22;
62N.23; 62P.01; 62P.03; 62P.04; 62P.05; 144.1464;
144.1486; 144.335, subdivision 3a; 144.802,
subdivision 3b; 144A.071, subdivision 4a, as amended;
151.21, subdivisions 7 and 8; 256.9352, subdivision 3;
256.9353, subdivisions 3 and 7; 256.9354, subdivisions
1, 4, 5, 6, and by adding a subdivision; 256.9356,
subdivision 3; 256.9357, subdivision 2; 256.9362,
subdivision 6; 256.9363, subdivisions 6, 7, and 9;
256.9657, subdivision 3; 256.9695, subdivision 3, as
amended; 256B.0917, subdivision 2; 295.50,
subdivisions 3, 4, and 12b; 295.52, subdivision 5;
295.53, subdivisions 1, 2, and 5; 295.54; 295.58; and
295.582; H.F. 3210, article 1, section 2, subdivision
3; proposing coding for new law in Minnesota Statutes,
chapters 62A; 62J; 62N; 62P; 144; 308A; and 317A;
proposing coding for new law as Minnesota Statutes,
chapters 62Q and 62R; repealing Minnesota Statutes
1992, sections 62A.02, subdivision 5; 62E.51; 62E.52;
62E.53; 62E.531; 62E.54; 62E.55; and 256.362,
subdivision 5; Minnesota Statutes 1993 Supplement,
sections 62J.04, subdivision 8; 62N.07; 62N.075;
62N.08; 62N.085; and 62N.16; Laws 1992, chapter 549,
article 9, section 22.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
COMMUNITY INTEGRATED SERVICE NETWORKS
Section 1. [62J.016] [GOALS OF RESTRUCTURING.]
The state seeks to bring about changes in the health care
delivery and financing system that will assure quality,
affordable, and accessible health care for all Minnesotans.
This goal will be accomplished by restructuring the delivery
system, the financial incentives, and the regulatory environment
in a way that will make health care providers and health plan
companies more accountable to consumers, group purchasers, and
communities for their costs and quality, their effectiveness in
meeting the health care needs of all of their patients and
enrollees, and their contributions to improving the health of
the greater community.
Sec. 2. [62J.017] [IMPLEMENTATION TIMETABLE.]
The state seeks to complete the restructuring of the health
care delivery and financing system by July 1, 1997. The
restructured system will have two options: (1) integrated
service networks, which will be accountable for meeting state
cost containment, quality, and access standards; or (2) a
uniform set of price and utilization controls for all health
care services for Minnesota residents not provided through an
integrated service network. Both systems will operate under the
state's growth limits and will be structured to promote
competition in the health care marketplace.
Beginning July 1, 1994, measures will be taken to increase
the public accountability of existing health plan companies, to
promote the development of small, community-based integrated
service networks, and to reduce administrative costs by
standardizing third-party billing forms and procedures and
utilization review requirements. Voluntary formation of other
integrated service networks will begin after rules have been
adopted, but not before July 1, 1996. Statutes and rules for
the entire restructured health care financing and delivery
system must be enacted or adopted by January 1, 1996, and a
phase-in of the all-payer reimbursement system must begin on
that date. By July 1, 1997, all health coverage must be
regulated under integrated service network or community
integrated service network law pursuant to chapter 62N or
all-payer law pursuant to chapter 62P.
Sec. 3. Minnesota Statutes 1993 Supplement, section
62N.02, is amended by adding a subdivision to read:
Subd. 4a. [COMMUNITY INTEGRATED SERVICE NETWORK.] (a)
"Community integrated service network" or "community network"
means a formal arrangement licensed by the commissioner under
section 62N.25 for providing prepaid health services to enrolled
populations of 50,000 or fewer enrollees, including enrollees
who are residents of other states.
(b) Notwithstanding paragraph (a), an organization licensed
as a community network that accepts payments for health care
services on a capitated basis, or under another similar risk
sharing agreement, from a program of self-insurance as described
in section 60A.02, subdivision 3, paragraph (b), shall not be
regulated as a community network with respect to the receipt of
the payments. The payments are not premium revenues for the
purpose of calculating the community network's liability for
otherwise applicable state taxes, assessments, or surcharges,
with the exception of:
(1) the MinnesotaCare provider tax;
(2) the one percent premium tax imposed in section 60A.15,
subdivision 1, paragraph (d); and
(3) effective July 1, 1995, assessments by the Minnesota
comprehensive health association.
This paragraph applies only where:
(1) the community network does not bear risk in excess of
110 percent of the self-insurance program's expected costs;
(2) the employer does not carry stop loss, excess loss, or
similar coverage with an attachment point lower than 120 percent
of the self-insurance program's expected costs;
(3) the community network and the employer comply with the
data submission and administrative simplification provisions of
chapter 62J;
(4) the community network and the employer comply with the
provider tax pass-through provisions of section 295.582;
(5) the community network's required minimum reserves
reflect the risk borne by the community network under this
paragraph, with an appropriate adjustment for the 110 percent
limit on risk borne by the community network;
(6) on or after July 1, 1994, but prior to January 1, 1995,
the employer has at least 1,500 current employees, as defined in
section 62L.02, or, on or after January 1, 1995, the employer
has at least 750 current employees, as defined in section
62L.02;
(7) the employer does not exclude any eligible employees or
their dependents, both as defined in section 62L.02, from
coverage offered by the employer, under this paragraph or any
other health coverage, insured or self-insured, offered by the
employer, on the basis of the health status or health history of
the person.
This paragraph expires December 31, 1997.
Sec. 4. Minnesota Statutes 1993 Supplement, section
62N.02, subdivision 8, is amended to read:
Subd. 8. [INTEGRATED SERVICE NETWORK.] (a) "Integrated
service network" means a formal arrangement permitted by this
chapter and licensed by the commissioner for providing health
services under this chapter to enrollees for a fixed payment per
time period. Integrated service network does not include a
community integrated service network.
(b) Notwithstanding paragraph (a), an organization licensed
as an integrated service network that accepts payments for
health care services on a capitated basis, or under another
similar risk sharing agreement, from a program of self-insurance
as described in section 60A.02, subdivision 3, paragraph (b),
shall not be regulated as an integrated service network with
respect to the receipt of the payments. The payments are not
premium revenues for the purpose of calculating the integrated
service network's liability for otherwise applicable state
taxes, assessments, or surcharges, with the exception of:
(1) the MinnesotaCare provider tax;
(2) the one percent premium tax imposed in section 60A.15,
subdivision 1, paragraph (d); and
(3) effective July 1, 1995, assessments by the Minnesota
comprehensive health association.
This paragraph applies only where:
(1) the integrated service network does not bear risk in
excess of 110 percent of the self-insurance program's expected
costs;
(2) the employer does not carry stop loss, excess loss, or
similar coverage with an attachment point lower than 120 percent
of the self-insurance program's expected costs;
(3) the integrated service network and the employer comply
with the data submission and administrative simplification
provisions of chapter 62J;
(4) the integrated service network and the employer comply
with the provider tax pass-through provisions of section
295.582;
(5) the integrated service network's required minimum
reserves reflect the risk borne by the integrated service
network under this paragraph, with an appropriate adjustment for
the 110 percent limit on risk borne by the integrated service
network;
(6) on or after July 1, 1994, but prior to January 1, 1995,
the employer has at least 1,500 current employees, as defined in
section 62L.02, or, on or after January 1, 1995, the employer
has at least 750 current employees, as defined in section
62L.02;
(7) the employer does not exclude any eligible employees or
their dependents, both as defined in section 62L.02, from
coverage offered by the employer, under this paragraph or any
other health coverage, insured or self-insured, offered by the
employer, on the basis of the health status or health history of
the person.
This paragraph expires December 31, 1997.
Sec. 5. [62N.25] [COMMUNITY INTEGRATED SERVICE NETWORKS.]
Subdivision 1. [SCOPE OF LICENSURE.] Beginning July 1,
1994, the commissioner shall accept applications for licensure
as a community integrated service network under this section.
Licensed community integrated service networks may begin
providing health coverage to enrollees no earlier than January
1, 1995, and may begin marketing coverage to prospective
enrollees upon licensure.
Subd. 2. [LICENSURE REQUIREMENTS GENERALLY.] To be
licensed and to operate as a community integrated service
network, an applicant must satisfy the requirements of chapter
62D, and all other legal requirements that apply to entities
licensed under chapter 62D, except as exempted or modified in
this section. Community networks must, as a condition of
licensure, comply with rules adopted under section 256B.0644
that apply to entities governed by chapter 62D.
Subd. 3. [REGULATION; APPLICABLE LAW.] Community
integrated service networks are regulated and licensed by the
commissioner under the same authority that applies to entities
licensed under chapter 62D, except as exempted or modified under
this section. All statutes or rules that apply to health
maintenance organizations apply to community networks, unless
otherwise specified. A cooperative organized under chapter 308A
may establish a community integrated service network.
Subd. 4. [GOVERNING BODY.] In addition to the requirements
of section 62D.06, at least 51 percent of the members of the
governing body of the community integrated service network must
be residents of the community integrated service network's
service area. Service area, for purposes of this subdivision,
may include contiguous geographic areas outside the state of
Minnesota.
Subd. 5. [BENEFITS.] Community integrated service networks
must offer the health maintenance organization benefit set, as
defined in chapter 62D, and other laws applicable to entities
regulated under chapter 62D, except that the community
integrated service network may impose a deductible, not to
exceed $1,000 per person per year, provided that out-of-pocket
expenses on covered services do not exceed $3,000 per person or
$5,000 per family per year. The deductible must not apply to
preventive health services as described in Minnesota Rules, part
4685.0801, subpart 8. Community networks and chemical
dependency facilities under contract with a community network
shall use the assessment criteria in Minnesota Rules, parts
9530.6600 to 9530.6660, when assessing enrollees for chemical
dependency treatment.
Subd. 6. [SOLVENCY.] A community integrated service
network is exempt from the deposit, reserve, and solvency
requirements specified in sections 62D.041, 62D.042, 62D.043,
and 62D.044 and shall comply instead with sections 62N.27 to
62N.32. In applying sections 62N.27 to 62N.32, the commissioner
is exempt from the rulemaking requirements of chapter 14.
However, to the extent that there are analogous definitions or
procedures in chapter 62D or in rules promulgated thereunder,
the commissioner shall follow those existing provisions rather
than adopting a contrary approach or interpretation. This
rulemaking exemption shall expire on June 1, 1995.
Subd. 7. [EXEMPTIONS FROM EXISTING REQUIREMENTS.]
Community integrated service networks are exempt from the
following requirements applicable to health maintenance
organizations:
(1) conducting focused studies under Minnesota Rules, part
4685.1125;
(2) preparing and filing, as a condition of licensure, a
written quality assurance plan, and annually filing such a plan
and a work plan, under Minnesota Rules, parts 4685.1110 and
4685.1130;
(3) maintaining statistics under Minnesota Rules, part
4685.1200;
(4) filing provider contract forms under sections 62D.03,
subdivision 4, and 62D.08, subdivision 1;
(5) reporting any changes in the address of a network
provider or length of a provider contract or additions to the
provider network to the commissioner within ten days under
section 62D.08, subdivision 5. Community networks must report
such information to the commissioner on a quarterly basis.
Community networks that fail to make the required quarterly
filing are subject to the penalties set forth in section 62D.08,
subdivision 5; and
(6) preparing and filing, as a condition of licensure, a
marketing plan, and annually filing a marketing plan, under
sections 62D.03, subdivision 4, paragraph (l), and 62D.08,
subdivision 1.
Subd. 8. [PROVIDER CONTRACTS.] The provisions of section
62D.123 are implied in every provider contract or agreement
between a community integrated service network and a provider,
regardless of whether those provisions are expressly included in
the contract. No participating provider, agent, trustee, or
assignee of a participating provider has or may maintain any
cause of action against a subscriber or enrollee to collect sums
owed by the community network.
Subd. 9. [EXCEPTIONS TO ENROLLMENT LIMIT.] A community
integrated service network may enroll enrollees in excess of
50,000 if necessary to comply with guaranteed issue or
guaranteed renewal requirements of chapter 62L or section 62A.65.
Sec. 6. [62N.255] [EXPANDED PROVIDER NETWORKS.]
Subdivision 1. [PROVIDER ACCEPTANCE REQUIRED.] Each health
plan company, with the exception of any health plan company with
50,000 or fewer enrollees and health plan companies that are
exempt under subdivision 6, shall establish an expanded network
of allied independent health providers, in addition to a
preferred network. A health plan company shall accept as a
provider in the expanded network any allied independent health
provider who: (1) meets the health plan company's credentialing
standards; (2) agrees to the terms of the health plan company's
provider contract; and (3) agrees to comply with all managed
care protocols of the health plan company. A preferred network
shall be considered an expanded network if all allied
independent health providers who meet the requirements of
clauses (1), (2), and (3), are accepted into the preferred
network. A community integrated service network may offer to
its enrollees an expanded network of allied independent health
providers as described under this section.
Subd. 2. [MANAGED CARE.] The managed care protocols used
by the health plan company may include: (1) a requirement that
an enrollee obtain a referral from the health plan company
before obtaining services from an allied independent health
provider in the expanded network; (2) limits on the number and
length of visits to allied independent health providers in the
expanded network allowed by each referral, as long as the number
and length of visits allowed is not less than the number and
length allowed for comparable referrals to allied independent
health providers in the preferred network; and (3) ongoing
management and review by the health plan company of the care
provided by an allied independent health provider in the
expanded network after a referral is made.
Subd. 3. [MANDATORY OFFERING TO ENROLLEES.] Each health
plan company shall offer to enrollees the option of receiving
covered services through the expanded network of allied
independent health providers established under subdivisions 1
and 2. This expanded network option may be offered as a
separate health plan. The network may establish separate
premium rates and cost-sharing requirements for this expanded
network plan, as long as these premium rates and cost-sharing
requirements are actuarially justified and approved by the
commissioner. This subdivision does not apply to Medicare,
medical assistance, general assistance medical care, and
MinnesotaCare. This subdivision is effective January 1, 1995,
and applies to health plans issued or renewed, or offers of
health plans to be issued or renewed, on or after January 1,
1995, except that this subdivision is effective January 1, 1996,
for collective bargaining agreements of the department of
employee relations and the University of Minnesota.
Subd. 4. [PROVIDER REIMBURSEMENT.] A health plan company
shall pay each allied independent health provider in the
expanded network the same rate per unit of service as paid to
allied independent health providers in the preferred network.
Subd. 5. [DEFINITIONS.] (a) For purposes of this section,
the following definitions apply.
(b) "Allied independent health provider" means an
independently enrolled audiologist, chiropractor, dietitian,
home health care provider, licensed marriage and family
therapist, nurse practitioner or advanced practice nurse,
occupational therapist, optometrist, optician, outpatient
chemical dependency counselor, pharmacist who is not employed by
and based on the premises of a health plan company, physical
therapist, podiatrist, licensed psychologist, psychological
practitioner, licensed social worker, or speech therapist.
(c) "Home health care provider" means a provider of
personal care assistance, home health aide, homemaker, respite
care, adult day care, or home therapies and home health nursing
services.
(d) "Independently enrolled" means that a provider can
bill, and receive direct payment for services from, a
third-party payer or patient.
Subd. 6. [EXEMPTION.] A health plan company, to the extent
that it operates as a staff model health plan company as defined
in section 295.50, subdivision 12b, by employing allied
independent health care providers to deliver health care
services to enrollees, is exempt from this section.
Sec. 7. [62N.26] [SHARED SERVICES COOPERATIVE.]
The commissioner of health shall establish, or assist in
establishing, a shared services cooperative organized under
chapter 308A to make available administrative and legal
services, technical assistance, provider contracting and billing
services, and other services to those community integrated
service networks and integrated service networks that choose to
participate in the cooperative. The commissioner shall provide,
to the extent funds are appropriated, start-up loans sufficient
to maintain the shared services cooperative until its operations
can be maintained by fees and contributions. The cooperative
must not be staffed, administered, or supervised by the
commissioner of health. The cooperative shall make use of
existing resources that are already available in the community,
to the extent possible.
Sec. 8. [62N.27] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] For purposes of sections
62N.27 to 62N.32, the terms defined in this section have the
meanings given. Other terms used in those sections have the
meanings given in sections 62D.041, 62D.042, 62D.043, and
62D.044.
Subd. 2. [NET WORTH.] "Net worth" means admitted assets as
defined in subdivision 3, minus liabilities. Liabilities do not
include those obligations that are subordinated in the same
manner as preferred ownership claims under section 60B.44,
subdivision 10. For purposes of this subdivision, preferred
ownership claims under section 60B.44, subdivision 10, include
promissory notes subordinated to all other liabilities of the
community integrated service network.
Subd. 3. [ADMITTED ASSETS.] "Admitted assets" means
admitted assets as defined in section 62D.044, except that real
estate investments allowed by section 62D.045 are not admitted
assets. Admitted assets include the deposit required under
section 62N.32.
Subd. 4. [ACCREDITED CAPITATED PROVIDER.] "Accredited
capitated provider" means a health care providing entity that:
(1) receives capitated payments from a community network
under a contract to provide health services to the network's
enrollees. For purposes of this section, a health care
providing entity is "capitated" when its compensation
arrangement with a network involves the provider's acceptance of
material financial risk for the delivery of a predetermined set
of services for a specified period of time;
(2) is licensed to provide and provides the contracted
services, either directly or through an affiliate. For purposes
of this section, an "affiliate" is any person that directly or
indirectly controls, is controlled by, or is under common
control with the health care providing entity, and "control"
exists when any person, directly or indirectly, owns, controls,
or holds the power to vote or holds proxies representing no less
than 80 percent of the voting securities or governance rights of
any other person;
(3) agrees to serve as an accredited capitated provider of
a community network or for the purpose of reducing the network's
net worth and deposit requirements under section 62N.28; and
(4) is approved by the commissioner as an accredited
capitated provider for a community network in accordance with
section 62N.31.
Subd. 5. [PERCENTAGE OF RISK CEDED.] "Percentage of risk
ceded" means the ratio, expressed as a percentage, between
capitated payments made or, in the case of a new entity,
expected to be made by a community network to all accredited
capitated providers during any contract year and the total
premium revenue, adjusted to eliminate expected administrative
costs, received for the same time period by the community
network.
Subd. 6. [PROVIDER AMOUNT AT RISK.] "Provider amount at
risk" means a dollar amount certified by a qualified actuary to
represent the expected direct costs to an accredited capitated
provider for providing the contracted, covered health care
services to the enrollees of the network to which it is
accredited for a period of 120 days.
Sec. 9. [62N.28] [NET WORTH REQUIREMENT.]
Subdivision 1. [REQUIREMENT.] Except as otherwise
permitted by this chapter, each community network must maintain
a minimum net worth equal to the greater of:
(1) $1,000,000;
(2) two percent of the first $150,000,000 of annual premium
revenue plus one percent of annual premium revenue in excess of
$150,000,000;
(3) eight percent of the annual health services costs,
except those paid on a capitated or managed hospital payment
basis, plus four percent of the annual capitation and managed
hospital payment costs; or
(4) four months uncovered health services costs.
Subd. 2. [DEFINITIONS.] For purposes of this section, the
following terms have the meanings given:
(1) "capitated basis" means fixed per member per month
payment or percentage of premium paid to a provider that assumes
the full risk of the cost of contracted services without regard
to the type, value, or frequency of services provided. For
purposes of this definition, capitated basis includes the cost
associated with operating staff model facilities;
(2) "managed hospital payment basis" means agreements in
which the financial risk is primarily related to the degree of
utilization rather than to the cost of services; and
(3) "uncovered health services costs" means the cost to the
community network of health services covered by the community
network for which the enrollee would also be liable in the event
of the community network's insolvency, and that are not
guaranteed, insured, or assumed by a person other than the
community network.
Subd. 3. [REINSURANCE CREDIT.] A community network may use
the subtraction for premiums paid for insurance permitted under
section 62D.042, subdivision 4.
Subd. 4. [PHASE-IN FOR NET WORTH REQUIREMENT.] A community
network may choose to comply with the net worth requirement on a
phase-in basis according to the following schedule:
(1) 50 percent of the amount required under subdivisions 1
to 3 at the time that the community network begins enrolling
enrollees;
(2) 75 percent of the amount required under subdivisions 1
to 3 at the end of the first full calendar year of operation;
(3) 87.5 percent of the amount required under subdivisions
1 to 3 at the end of the second full calendar year of operation;
and
(4) 100 percent of the amount required under subdivisions 1
to 3 at the end of the third full calendar year of operation.
Subd. 5. [NET WORTH CORRIDOR.] A community network shall
not maintain net worth that exceeds two and one-half times the
amount required of the community network under subdivision 1.
Subdivision 4 is not relevant for purposes of this subdivision.
Subd. 6. [NET WORTH REDUCTION.] If a community network has
contracts with accredited capitated providers, and only for so
long as those contracts or successor contracts remain in force,
the net worth requirement of subdivision 1 shall be reduced by
the percentage of risk ceded, but in no event shall the net
worth requirements be reduced by this subdivision to less than
$1,000,000. The phase-in requirements of subdivision 4 shall
not be affected by this reduction.
Sec. 10. [62N.29] [GUARANTEEING ORGANIZATION.]
A community network may satisfy its net worth and deposit
requirements, in whole or in part, through the use of one or
more guaranteeing organizations, with the approval of the
commissioner, under the conditions permitted in chapter 62D.
Governmental entities, such as counties, may serve as
guaranteeing organizations subject to the requirements of
chapter 62D.
Sec. 11. [62N.31] [STANDARDS FOR ACCREDITED CAPITATED
PROVIDER ACCREDITATION.]
Subdivision 1. [GENERAL.] Each health care providing
entity seeking initial accreditation as an accredited capitated
provider shall submit to the commissioner of health sufficient
information to establish that the applicant has operational
capacity, facilities, personnel, and financial capability to
provide the contracted covered services to the enrollees of the
network for which it seeks accreditation (1) on an ongoing
basis; and (2) for a period of 120 days following the insolvency
of the network without receiving payment from the network.
Accreditation shall continue until abandoned by the accredited
capitated provider or revoked by the commissioner in accordance
with subdivision 4. The applicant may establish financial
capability by demonstrating that the provider amount at risk can
be covered by or through any of allocated or restricted funds, a
letter of credit, the taxing authority of the applicant or
governmental sponsor of the applicant, an unrestricted fund
balance at least two times the provider amount at risk,
reinsurance, either purchased directly by the applicant or by
the community network to which it will be accredited, or any
other method accepted by the commissioner. Accreditation of a
health care providing entity shall not in itself limit the right
of the accredited capitated provider to seek payment of unpaid
capitated amounts from a community network, whether the
community network is solvent or insolvent; provided that, if the
community network is subject to any liquidation, rehabilitation,
or conservation proceedings, the accredited capitated provider
shall have the status accorded creditors under chapter 60B.44,
subdivision 10.
Subd. 2. [ANNUAL REPORTING PERIOD.] Each accredited
capitated provider shall submit to the commissioner annually, no
later than April 15, the following information for each network
to which it is accredited: the provider amount at risk for that
year, the number of enrollees for the network, both for the
prior year and estimated for the current year, any material
change in the provider's operational or financial capacity since
its last report, and any other information reasonably requested
by the commissioner.
Subd. 3. [ADDITIONAL REPORTING.] Each accredited capitated
provider shall provide the commissioner with 60 days' advance
written notice of termination of the accredited capitated
provider relationship with a network.
Subd. 4. [REVOCATION OF ACCREDITATION.] The commissioner
may revoke the accreditation of an accredited capitated provider
if the accredited capitated provider's ongoing operational or
financial capabilities fail to meet the requirements of this
section. The revocation shall be handled in the same fashion as
placing a health maintenance organization under administrative
supervision.
Sec. 12. [62N.32] [DEPOSIT REQUIREMENT.]
A community network must satisfy the deposit requirement
provided in section 62D.041. The deposit counts as an admitted
asset and as part of the required net worth. The deposit
requirement cannot be reduced by the alternative means that may
be used to reduce the net worth requirement, other than through
the use of a guaranteeing organization.
Sec. 13. [62N.33] [COVERAGE FOR ENROLLEES OF INSOLVENT
NETWORKS.]
In the event of a community network insolvency, the
commissioner shall determine whether one or more community
networks or health plan companies are willing and able to
provide replacement coverage to all of the failed community
network's enrollees, and if so, the commissioner shall
facilitate the provision of the replacement coverage. If such
replacement coverage is not available, the commissioner shall
randomly assign enrollees of the insolvent community network to
other community networks and health plan companies in the
service area, in proportion to their market share, for the
remaining terms of the enrollees' contracts with the insolvent
network. The other community networks and health plan companies
must accept the allocated enrollees under their policy or
contract most similar to the enrollees' contracts with the
insolvent community network. The allocation must keep groups
together. Enrollees with special continuity of care needs may,
in the commissioner's discretion, be given a choice of
replacement coverage rather than random assignment. Individuals
and groups that are assigned randomly may choose a different
community network or health plan company when their contracts
expire, on the same basis as any other individual or group. The
replacement health plan company must comply with any guaranteed
renewal or other renewal provisions of the prior coverage,
including but not limited to, provisions regarding preexisting
conditions and health conditions that developed during prior
coverage.
Sec. 14. [62N.34] [INSOLVENCY FUNDING.]
(a) In the event of an insolvency of a community network,
all other community networks and health plan companies shall be
assessed a surcharge, if necessary to pay expenses and claims
set forth in paragraph (b), based on average annual premiums on
health plans as defined in section 62A.011. For purposes of
this section, "average annual premiums" means annual premiums
averaged over the three most recent calendar years for which
information is available preceding the calendar year in which
the community network became insolvent. The total of all such
surcharges upon a community network or health plan company shall
not, in any one calendar year, exceed two percent of the
community network's or health plan company's average annual
premium in this state on health plans as defined in section
62A.011.
(b) Money raised by the assessment shall be used to pay for
the following, to the extent that they exceed the community
network's deposit and other remaining assets:
(1) expenses in connection with the insolvency and transfer
of enrollees;
(2) outstanding fee-for-service claims from
nonparticipating providers, discounted by 25 percent of the
claim amount. Claims incurred after the implementation of the
fee schedules provided under chapter 62P will be reimbursed at
the fee schedule amount discounted by 25 percent. Providers may
not seek to recover the unpaid portion of their claim from
enrollees; and
(3) premiums to community networks and health plan
companies that take enrollees of the insolvent community
network, prorated to account for premiums already paid to the
insolvent community network on behalf of those enrollees, to
purchase coverage for time periods for which the insolvent
community network can no longer provide coverage.
(c) In any year in which an assessment is made, the
commissioner, in consultation with community networks and other
health carriers, shall report to the legislature and governor on
the continuing viability of the assessment approach and on the
merits of potential alternative funding sources.
Sec. 15. [62N.35] [BORDER ISSUES.]
To the extent feasible and appropriate, community networks
that also operate under the health maintenance organization or
similar prepaid health care law of another state must be
licensed and regulated by this state in a manner that avoids
unnecessary duplication and expense for the community network.
The commissioner shall communicate with regulatory authorities
in neighboring states to explore the feasibility of cooperative
approaches to streamline regulation of border community
networks, such as joint financial audits, and shall report to
the legislature on any changes to Minnesota law that may be
needed to implement appropriate collaborative approaches to
regulation.
Sec. 16. [STUDY OF SOLVENCY REGULATION OF INTEGRATED
SERVICE NETWORKS.]
The commissioners of health and commerce shall develop the
solvency standards for the integrated service networks created
by Minnesota Statutes, chapter 62N. The solvency standards for
integrated service networks must be effective no later than
January 1, 1996.
The standards may use a risk-based capital standard as an
integral tool to assess solvency of the integrated service
networks. The standards may require that integrated service
networks file the risk based capital calculation as part of the
annual financial statement. The risk-based capital standard for
integrated service networks may be based upon the national
association of insurance commissioners health organization risk
based capital standards currently under development, with any
necessary modifications to reflect the unique risk
characteristics of integrated service networks. Those
modifications must be based upon an actuarial analysis of the
effect on risk.
Sec. 17. [MONITORING OF REINSURANCE ACCESSIBILITY FOR
COMMUNITY NETWORKS.]
The commissioners of commerce and health shall monitor the
private sector market for reinsurance, in order to determine
whether community integrated service networks are able to
purchase reinsurance at competitive rates. If the commissioners
find that the private market for reinsurance is not accessible
or not affordable to community integrated service networks, the
commissioners shall recommend to the legislature a voluntary or
mandatory reinsurance purchasing pool for community integrated
service networks. The commissioners' recommendations shall
address the conditions under which community networks would be
permitted or required to participate in the pool and the role of
the state in overseeing or administering the pool.
Sec. 18. [REVISOR INSTRUCTIONS.]
The revisor of statutes shall recode section 6 establishing
an expanded provider network from Minnesota Statutes, chapter
62N to Minnesota Statutes, chapter 62Q, and change all
references to that section in Minnesota Statutes accordingly.
Sec. 19. [EFFECTIVE DATE.]
Sections 1 to 18 are effective July 1, 1994.
ARTICLE 2
REQUIREMENTS FOR ALL HEALTH PLAN COMPANIES
Section 1. Minnesota Statutes 1993 Supplement, section
62J.33, is amended by adding a subdivision to read:
Subd. 3. [OFFICE OF CONSUMER INFORMATION.] The
commissioner shall create an office of consumer information to
assist health plan company enrollees and to serve as a resource
center for enrollees. The office shall operate within the
information clearinghouse. The functions of the office are:
(1) to assist enrollees in understanding their rights;
(2) to explain and assist in the use of all available
complaint systems, including internal complaint systems within
health carriers, community integrated service networks,
integrated service networks, and the departments of health and
commerce;
(3) to provide information on coverage options in each
regional coordinating board region of the state;
(4) to provide information on the availability of
purchasing pools and enrollee subsidies; and
(5) to help consumers use the health care system to obtain
coverage.
The office of consumer information shall not provide legal
services to consumers and shall not represent a consumer or
enrollee. The office of consumer information shall not serve as
an advocate for consumers in disputes with health plan companies.
Nothing in this subdivision shall interfere with the ombudsman
program established under section 256B.031, subdivision 6, or
other existing ombudsman programs.
Sec. 2. Minnesota Statutes 1993 Supplement, section
62J.33, is amended by adding a subdivision to read:
Subd. 4. [INFORMATION ON HEALTH PLAN COMPANIES.] The
information clearinghouse shall provide information on all
health plan companies operating in a specific geographic area to
consumers and purchasers who request it.
Sec. 3. Minnesota Statutes 1993 Supplement, section
62J.33, is amended by adding a subdivision to read:
Subd. 5. [DISTRIBUTION OF DATA ON QUALITY.] The
commissioner shall make available through the clearinghouse
hospital quality data collected under section 62J.45,
subdivision 4b, and health plan company quality data collected
under section 62J.45, subdivision 4c.
Sec. 4. Minnesota Statutes 1993 Supplement, section
62J.45, is amended by adding a subdivision to read:
Subd. 4a. [EVALUATION OF CONSUMER SATISFACTION; PROVIDER
INFORMATION PILOT STUDY.] (a) The commissioner may make a grant
to the data institute to develop and implement a mechanism for
collecting comparative data on consumer satisfaction through
adoption of a standard consumer satisfaction survey. As a
condition of receiving this grant, the data institute shall
appoint a consumer advisory group which shall consist of 13
individuals, representing enrollees from public and private
health plan companies and programs and two uninsured consumers,
to advise the data institute on issues of concern to consumers.
The advisory group must have at least one member from each
regional coordinating board region of the state. The advisory
group expires June 30, 1997. This survey shall include
enrollees in community integrated service networks, integrated
service networks, health maintenance organizations, preferred
provider organizations, indemnity insurance plans, public
programs, and other health plan companies. The data institute
shall determine a mechanism for the inclusion of the uninsured.
Health plan companies and group purchasers shall provide
enrollment information, including the names, addresses, and
telephone numbers of enrollees and former enrollees and other
data necessary for the completion of this study to the data
institute. This enrollment information provided by the health
plan companies and group purchasers is classified as private
data on individuals, as defined in section 13.02, subdivision
12. The data institute shall provide raw unaggregated data to
the data analysis unit. The data institute may analyze and
prepare findings from the raw, unaggregated data, and the
findings from this survey may be included in the health plan
company report cards, and in other reports developed by the data
analysis unit, in consultation with the data institute, to be
disseminated by the information clearinghouse. The raw
unaggregated data is classified as private data on individuals
as defined in section 13.02, subdivision 12. The survey may
include information on the following subjects:
(1) enrollees' overall satisfaction with their health care
plan;
(2) consumers' perception of access to emergency, urgent,
routine, and preventive care, including locations, hours,
waiting times, and access to care when needed;
(3) premiums and costs;
(4) technical competence of providers;
(5) communication, courtesy, respect, reassurance, and
support;
(6) choice and continuity of providers;
(7) continuity of care;
(8) outcomes of care;
(9) services offered by the plan, including range of
services, coverage for preventive and routine services, and
coverage for illness and hospitalization;
(10) availability of information; and
(11) paperwork.
(b) The commissioner, in consultation with the data
institute, shall develop a pilot study to collect comparative
data from health care providers on opportunities and barriers to
the provision of quality, cost-effective health care. The
provider information pilot study shall include providers in
community integrated service networks, integrated service
networks, health maintenance organizations, preferred provider
organizations, indemnity insurance plans, public programs, and
other health plan companies. Health plan companies and group
purchasers shall provide to the commissioner providers' names,
health plan assignment, and other appropriate data necessary for
the commissioner to conduct the study. The provider information
pilot study shall examine factors that increase and hinder
access to the provision of quality, cost-effective health care.
The study may examine:
(1) administrative barriers and facilitators;
(2) time spent obtaining permission for appropriate and
necessary treatments;
(3) latitude to order appropriate and necessary tests,
pharmaceuticals, and referrals to specialty providers;
(4) assistance available for decreasing administrative and
other routine paperwork activities;
(5) continuing education opportunities provided;
(6) access to readily available information on diagnoses,
diseases, outcomes, and new technologies;
(7) continuous quality improvement activities;
(8) inclusion in administrative decision-making;
(9) access to social services and other services that
facilitate continuity of care;
(10) economic incentives and disincentives;
(11) peer review procedures; and
(12) the prerogative to address public health needs.
In selecting additional data for collection, the
commissioner shall consider the: (1) statistical validity of
the indicator; (2) public need for the information; (3)
estimated expense of collecting and reporting the indicator; and
(4) usefulness of the indicator to identify barriers and
opportunities to improve quality care provision within health
plan companies.
Sec. 5. Minnesota Statutes 1993 Supplement, section
62J.45, is amended by adding a subdivision to read:
Subd. 4b. [HOSPITAL QUALITY INDICATORS.] The commissioner,
in consultation with the data institute, shall develop a system
for collecting data on hospital quality. The commissioner shall
require a licensed hospital to collect and report data as needed
for the system. Data to be collected shall include structural
characteristics including staff-mix and nurse-patient ratios.
In selecting additional data for collection, the commissioner
shall consider: (1) feasibility and statistical validity of the
indicator; (2) purchaser and public demand for the indicator;
(3) estimated expense of collecting and reporting the indicator;
and (4) usefulness of the indicator for internal improvement
purposes.
Sec. 6. Minnesota Statutes 1993 Supplement, section
62J.45, is amended by adding a subdivision to read:
Subd. 4c. [QUALITY REPORT CARDS.] (a) Each health plan
company shall report annually by April 1 to the commissioner
specific quality indicators, in the form specified by the
commissioner in consultation with the data institute. The
quality indicators must be reported using standard definitions
and measurement processes as specified by the commissioner.
Wherever possible, the commissioner's specifications must be
consistent with any outlined in the health plan employer data
and information set (HEDIS 2.0). The commissioner, in
consultation with the data institute, may modify the quality
indicators to be reported to incorporate improvements in quality
measurement tools. When HEDIS 2.0 indicators or health care
financing administration approved quality indicators for medical
assistance and Medicare are used, the commissioner is exempt
from rulemaking. For additions or modifications to the HEDIS
indicators or if other quality indicators are added, the
commissioner shall proceed through rulemaking pursuant to
chapter 14. The data analysis unit shall develop quality report
cards, and these report cards shall be disseminated through the
information clearinghouse.
(b) Data shall be collected by county and high-risk and
special needs populations as well as by health plan but shall
not be reported. The commissioner, in consultation with the
data institute and counties, shall provide this data to a
community health board as defined in section 145A.02 in a manner
that would not allow the identification of individuals.
Sec. 7. Minnesota Statutes 1992, section 62M.02,
subdivision 5, is amended to read:
Subd. 5. [CERTIFICATION.] "Certification" means a
determination by a utilization review organization that an
admission, extension of stay, or other health care service has
been reviewed and that it, based on the information provided,
meets the utilization review requirements of the applicable
health plan and the health carrier will then pay for the covered
benefit, provided the preexisting limitation provisions, the
general exclusion provisions, and any deductible, copayment,
coinsurance, or other policy requirements have been met.
Sec. 8. Minnesota Statutes 1992, section 62M.02,
subdivision 21, is amended to read:
Subd. 21. [UTILIZATION REVIEW ORGANIZATION.] "Utilization
review organization" means an entity including but not limited
to an insurance company licensed under chapter 60A to offer,
sell, or issue a policy of accident and sickness insurance as
defined in section 62A.01; a health service plan licensed under
chapter 62C; a health maintenance organization licensed under
chapter 62D; a community integrated service network or an
integrated service network licensed under chapter 62N; a
fraternal benefit society operating under chapter 64B; a joint
self-insurance employee health plan operating under chapter 62H;
a multiple employer welfare arrangement, as defined in section 3
of the Employee Retirement Income Security Act of 1974 (ERISA),
United States Code, title 29, section 1103, as amended; a third
party administrator licensed under section 60A.23, subdivision
8, which conducts utilization review and determines
certification of an admission, extension of stay, or other
health care services for a Minnesota resident; or any entity
performing utilization review that is affiliated with, under
contract with, or conducting utilization review on behalf of, a
business entity in this state.
Sec. 9. Minnesota Statutes 1992, section 62M.03,
subdivision 1, is amended to read:
Subdivision 1. [LICENSED UTILIZATION REVIEW ORGANIZATION.]
Beginning January 1, 1993, any organization that is licensed in
this state and that meets the definition of utilization review
organization in section 62M.02, subdivision 21, must be licensed
under chapter 60A, 62C, 62D, 62N, or 64B, or registered under
this chapter and must comply with sections 62M.01 to 62M.16 and
section 72A.201, subdivisions 8 and 8a. Each licensed community
integrated service network, integrated service network, or
health maintenance organization that has an employed staff model
of providing health care services shall comply with sections
62M.01 to 62M.16 and section 72A.201, subdivisions 8 and 8a for
any services provided by providers under contract.
Sec. 10. Minnesota Statutes 1992, section 62M.03,
subdivision 2, is amended to read:
Subd. 2. [NONLICENSED UTILIZATION REVIEW ORGANIZATION.] An
organization that meets the definition of a utilization review
organization under section 62M.02, subdivision 21, that is not
licensed in this state that performs utilization review services
for Minnesota residents must register with the commissioner of
commerce and must certify compliance with sections 62M.01 to
62M.16.
Initial registration must occur no later than January 1,
1993. The registration is effective for two years and may be
renewed for another two years by written request. Each
utilization review organization registered under this chapter
shall notify the commissioner of commerce within 30 days of any
change in the name, address, or ownership of the organization.
Sec. 11. Minnesota Statutes 1992, section 62M.03,
subdivision 3, is amended to read:
Subd. 3. [PENALTIES AND ENFORCEMENTS.] If a nonlicensed
utilization review organization fails to comply with sections
62M.01 to 62M.16, the organization may not provide utilization
review services for any Minnesota resident. The commissioner of
commerce may issue a cease and desist order under section
45.027, subdivision 5, to enforce this provision. The cease and
desist order is subject to appeal under chapter 14. A
nonlicensed utilization review organization that fails to comply
with the provisions of sections 62M.01 to 62M.16 is subject to
all applicable penalty and enforcement provisions of section
72A.201. Each utilization review organization licensed under
chapter 60A, 62C, 62D, 62N, or 64B shall comply with sections
62M.01 to 62M.16 as a condition of licensure.
Sec. 12. Minnesota Statutes 1992, section 62M.05,
subdivision 3, is amended to read:
Subd. 3. [NOTIFICATION OF DETERMINATIONS.] A utilization
review organization must have written procedures for providing
notification of its determinations on all certifications in
accordance with the following:
(a) When an initial determination is made to certify,
notification must be provided promptly by telephone to the
provider. The utilization review organization shall send
written notification to the hospital, attending physician, or
applicable service provider within ten business days of the
determination in accordance with section 72A.20, subdivision 4a,
or shall maintain an audit trail of the determination and
telephone notification. For purposes of this subdivision,
"audit trail" includes documentation of the telephone
notification, including the date; the name of the person spoken
to, the enrollee or patient; the service, procedure, or
admission certified; and the date of the service, procedure, or
admission. If the utilization review organization indicates
certification by use of a number, the number must be called the
"certification number."
(b) When a determination is made not to certify a hospital
or surgical facility admission or extension of a hospital stay,
or other service requiring review determination, within one
working day after making the decision the attending physician
and hospital must be notified by telephone and a written
notification must be sent to the hospital, attending physician,
and enrollee or patient. The written notification must include
the principal reason or reasons for the determination and the
process for initiating an appeal of the determination. Upon
request, the utilization review organization shall provide the
attending physician or provider with the criteria used to
determine the necessity, appropriateness, and efficacy of the
health care service and identify the database, professional
treatment parameter, or other basis for the criteria. Reasons
for a determination not to certify may include, among other
things, the lack of adequate information to certify after a
reasonable attempt has been made to contact the attending
physician.
Sec. 13. Minnesota Statutes 1992, 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) Each utilization review organization shall notify in
writing the enrollee or patient, attending physician, and claims
administrator of its determination on the appeal as soon as
practical, but in no case later than 45 days after receiving the
required documentation on the appeal.
(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 health care provider.
(c) Prior to upholding the original decision 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 original determination not to certify.
(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 patient, enrollee, or attending physician
when the initial determination is made.
(e) An attending physician 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 where an of appeal to reverse a determination
not to certify for clinical reasons is unsuccessful, the
utilization review organization must, upon request of the
attending physician, ensure that a physician of the utilization
review organization's choice in the same or a similar general
specialty as typically manages the medical condition, procedure,
or treatment under discussion is reasonably available to review
the case.
Sec. 14. [62Q.01] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] For purposes of this
chapter, the terms defined in this section have the meanings
given.
Subd. 2. [COMMISSIONER.] "Commissioner" means the
commissioner of health.
Subd. 3. [HEALTH PLAN.] "Health plan" means a health plan
as defined in section 62A.011 or a policy, contract, or
certificate issued by a community integrated service network; an
integrated service network; or an all-payer insurer as defined
in section 62P.02.
Subd. 4. [HEALTH PLAN COMPANY.] "Health plan company"
means:
(1) a health carrier as defined under section 62A.011,
subdivision 2;
(2) an integrated service network as defined under section
62N.02, subdivision 8;
(3) an all-payer insurer as defined under section 62P.02;
or
(4) a community integrated service network as defined under
section 62N.02, subdivision 4a.
Sec. 15. [62Q.03] [PROCESS FOR DEFINING, DEVELOPING, AND
IMPLEMENTING A RISK ADJUSTMENT SYSTEM.]
Subdivision 1. [PURPOSE.] Risk adjustment is a vital
element of the state's strategy for achieving a more equitable,
efficient system of health care delivery and financing for all
state residents. Risk adjustment is needed to: remove current
disincentives in the health care system to insure and serve high
risk and special needs populations; promote fair competition
among health plan companies on the basis of their ability to
efficiently and effectively provide services rather than on the
health status of those in a given insurance pool; and help
assure the viability of all health plan companies, including
community integrated service networks. It is the commitment of
the state to develop and implement a risk adjustment system by
July 1, 1997, and to continue to improve and refine risk
adjustment over time. The process for designing and
implementing risk adjustment shall be open, explicit, utilize
resources and expertise from both the private and public
sectors, and include at least the representation described in
subdivision 4. The process shall take into account the
formative nature of risk adjustment as an emerging science, and
shall develop and implement risk adjustment to allow continual
modifications, expansions, and refinements over time. The
process shall have at least two stages, as described in
subdivision 2 and 3.
Subd. 2. [FIRST STAGE OF RISK ADJUSTMENT DEVELOPMENT
PROCESS.] The objective of the first stage is to report to the
legislature by January 15, 1995, with recommendations on the
process, organization, resource needs, and specific work plan to
define, develop, and implement a risk adjustment mechanism by
July 1, 1997, and to continually improve risk adjustment over
time. The report shall address the specific issues listed in
subdivision 5, and shall also identify any additional policy
issues, questions and concerns that must be addressed to
facilitate development and implementation of risk adjustment.
Subd. 3. [SECOND STAGE OF THE RISK ADJUSTMENT DEVELOPMENT
PROCESS.] The second stage of the process, following review and
any modification by the legislature of the January 15, 1995
report, shall be to carry out the work plan to develop and
implement a risk adjustment mechanism by July 1, 1997, and to
continue to improve and refine a risk adjustment over time. The
second stage of the process shall be carried out by the
association created in subdivision 6.
Subd. 4. [EXPERT PANEL.] The commissioners of health and
commerce shall convene an expert advisory panel comprised of,
but not limited to, the board members of the Minnesota risk
adjustment association, as described in subdivision 8, and
experts from the fields of epidemiology, health services
research, and health economics. The commissioners may also
convene technical work groups that may include members of the
expert advisory panel and other persons, all selected in the
sole discretion of the commissioners. The expert advisory panel
and the workgroups shall assist and advise the commissioners of
health and commerce in preparing the implementation report
described in subdivision 5.
Subd. 5. [IMPLEMENTATION REPORT TO THE LEGISLATURE.] The
commissioners of health and commerce shall submit a report to
the legislature by January 15, 1995, with recommendations on the
process, organization, resource needs, and specific work plan to
define, develop, and implement a risk adjustment system by July
1, 1997, and to continually improve risk adjustment over time.
In developing the January 15, 1995 report, the commissioners of
commerce and health must consider and describe the following:
(1) the relationship of risk adjustment to the
implementation of universal coverage and community rating;
(2) the role of reinsurance in the risk adjustment system,
as a short-term alternative in the absence of a risk adjustment
methodology;
(3) the relationship of the risk adjustment system to the
implementation of reforms in underwriting and rating
requirements;
(4) the potential role of the health coverage reinsurance
association in the risk adjustment system;
(5) the need for mandatory participation of all health plan
companies in the risk adjustment system;
(6) current and emerging applications of risk adjustment
methodologies used for reimbursement purposes at the state and
national level and the reliability and validity of current risk
assessment and risk adjustment methodologies;
(7) the levels and types of risk to be distributed through
the risk adjustment system;
(8) the extent to which prepaid contracting by public
programs needs to be addressed by the risk adjustment
methodology;
(9) a plan for testing of the risk adjustment options being
proposed, including simulations using existing health plan data,
and development and testing of models on simulated data to
assess the feasibility and efficacy of specific methodologies;
(10) the appropriate role of the state in the supervision
of the risk adjustment association created pursuant to
subdivision 6;
(11) risk adjustment methodologies that take into account
differences among health plan companies due to their relative
efficiencies, characteristics, and relative to existing insured
contracts, new business, underwriting, or rating restrictions
required or permitted by law; and
(12) methods to encourage health plan companies to enroll
higher risk populations.
To the extent possible, the implementation report shall
identify a specific methodology or methodologies that may serve
as a starting point for risk adjustment, explain the advantages
and disadvantages of each such methodology, and provide a
specific workplan for implementing the methodology.
Subd. 6. [CREATION OF RISK ADJUSTMENT ASSOCIATION.] The
Minnesota risk adjustment association is created on July 1,
1994, and may operate as a nonprofit unincorporated association.
Subd. 7. [PURPOSE OF ASSOCIATION.] The association is
established to carry out the purposes of subdivision 1, as
further elaborated on by the implementation report described in
subdivision 5 and by legislation enacted in 1995 or subsequently.
Subd. 8. [GOVERNANCE.] (a) The association shall be
governed by an interim 19-member board as follows: one provider
member appointed by the Minnesota Hospital Association; one
provider member appointed by the Minnesota Medical Association;
one provider member appointed by the governor; three members
appointed by the Minnesota Council of HMOs to include an HMO
with at least 50 percent of total membership enrolled through a
public program; three members appointed by Blue Cross and Blue
Shield of Minnesota, to include a member from a Blue Cross and
Blue Shield of Minnesota affiliated health plan with fewer than
50,000 enrollees and located outside the Minneapolis-St. Paul
metropolitan area; two members appointed by the Insurance
Federation of Minnesota; one member appointed by the Minnesota
Association of Counties; and three public members appointed by
the governor, to include at least one representative of a public
program. The commissioners of health, commerce, human services,
and employee relations shall be nonvoting ex-officio members.
(b) The board may elect officers and establish committees
as necessary.
(c) A majority of the members of the board constitutes a
quorum for the transaction of business.
(d) Approval by a majority of the board members present is
required for any action of the board.
(e) Interim board members shall be appointed by July 1,
1994, and shall serve until a new board is elected according to
the plan developed by the association.
(f) A member may designate a representative to act as a
member of the interim board in the member's absence.
Subd. 9. [DATA COLLECTION.] The board of the association
shall consider antitrust implications and establish procedures
to assure that pricing and other competitive information is
appropriately shared among competitors in the health care market
or members of the board. Any information shared shall be
distributed only for the purposes of administering or developing
any of the tasks identified in subdivisions 2 and 4. In
developing these procedures, the board of the association may
consider the identification of a state agency or other
appropriate third party to receive information of a confidential
or competitive nature.
Subd. 10. [SUPERVISION.] The association's activities
shall be supervised by the commissioners of health and commerce.
Subd. 11. [REPORTING.] The board of the association shall
provide a status report on its activities to the health care
commission on a quarterly basis.
Sec. 16. [62Q.07] [ACTION PLANS.]
Subdivision 1. [ACTION PLANS REQUIRED.] (a) To increase
public awareness and accountability of health plan companies,
all health plan companies must annually file with the applicable
commissioner an action plan that satisfies the requirements of
this section beginning July 1, 1994, as a condition of doing
business in Minnesota. Each health plan company must also file
its action plan with the information clearinghouse. Action
plans are required solely to provide information to consumers,
purchasers, and the larger community as a first step toward
greater accountability of health plan companies. The sole
function of the commissioner in relation to the action plans is
to ensure that each health plan company files a complete action
plan, that the action plan is truthful and not misleading, and
that the action plan is reviewed by appropriate community
agencies.
(b) If a commissioner responsible for regulating a health
plan company required to file an action plan under this section
has reason to believe an action plan is false or misleading, the
commissioner may conduct an investigation to determine whether
the action plan is truthful and not misleading, and may require
the health plan company to submit any information that the
commissioner reasonably deems necessary to complete the
investigation. If the commissioner determines that an action
plan is false or misleading, the commissioner may require the
health plan company to file an amended plan or may take any
action authorized under chapter 72A.
Subd. 2. [CONTENTS OF ACTION PLANS.] (a) An action plan
must include a detailed description of all of the health plan
company's methods and procedures, standards, qualifications,
criteria, and credentialing requirements for designating the
providers who are eligible to participate in the health plan
company's provider network, including any limitations on the
numbers of providers to be included in the network. This
description must be updated by the health plan company and filed
with the applicable agency on a quarterly basis.
(b) An action plan must include the number of full-time
equivalent physicians, by specialty, nonphysician providers, and
allied health providers used to provide services. The action
plan must also describe how the health plan company intends to
encourage the use of nonphysician providers, midlevel
practitioners, and allied health professionals, through at least
consumer education, physician education, and referral and
advisement systems. The annual action plan must also include
data that is broken down by type of provider, reflecting actual
utilization of midlevel practitioners and allied professionals
by enrollees of the health plan company during the previous
year. Until July 1, 1995, a health plan company may use
estimates if actual data is not available. For purposes of this
paragraph, "provider" has the meaning given in section 62J.03,
subdivision 8.
(c) An action plan must include a description of the health
plan company's policy on determining the number and the type of
providers that are necessary to deliver cost-effective health
care to its enrollees. The action plan must also include the
health plan company's strategy, including provider recruitment
and retention activities, for ensuring that sufficient providers
are available to its enrollees.
(d) An action plan must include a description of actions
taken or planned by the health plan company to ensure that
information from report cards, outcome studies, and complaints
is used internally to improve quality of the services provided
by the health plan company.
(e) An action plan must include a detailed description of
the health plan company's policies and procedures for enrolling
and serving high risk and special needs populations. This
description must also include the barriers that are present for
the high risk and special needs population and how the health
plan company is addressing these barriers in order to provide
greater access to these populations. "High risk and special
needs populations" includes, but is not limited to, recipients
of medical assistance, general assistance medical care, and
MinnesotaCare; persons with chronic conditions or disabilities;
individuals within certain racial, cultural, and ethnic
communities; individuals and families with low income;
adolescents; the elderly; individuals with limited or no English
language proficiency; persons with high-cost preexisting
conditions; homeless persons; chemically dependent persons;
persons with serious and persistent mental illness and children
with severe emotional disturbance; and persons who are at
high-risk of requiring treatment. The action plan must also
reflect actual utilization of providers by enrollees defined by
this section as high risk or special needs populations during
the previous year. For purposes of this paragraph, "provider"
has the meaning given in section 62J.03, subdivision 8.
(f) An action plan must include a general description of
any action the health plan company has taken and those it
intends to take to offer health coverage options to rural
communities and other communities not currently served by the
health plan company.
(g) A health plan company other than a large managed care
plan company may satisfy any of the requirements of the action
plan in paragraphs (a) to (f) by stating that it has no
policies, procedures, practices, or requirements, either written
or unwritten, or formal or informal, and has undertaken no
activities or plans on the issues required to be addressed in
the action plan, provided that the statement is truthful and not
misleading. For purposes of this paragraph, "large managed care
plan company" means a health maintenance organization,
integrated service network, or other health plan company that
employs or contracts with health care providers, that has more
than 50,000 enrollees in this state. If a health plan company
employs or contracts with providers for some of its health plans
and does not do so for other health plans that it offers, the
health plan company is a large managed care plan company if it
has more than 50,000 enrollees in this state in health plans for
which it does employ or contract with providers.
Sec. 17. [62Q.09] [PROHIBITION ON EXCLUSIVE
RELATIONSHIPS.]
Subdivision 1. [PROHIBITION ON EXCLUSIVE CONTRACTS.] No
provider or health plan company shall restrict any person's
right to provide health services or procedures to another
provider or health plan company, unless the person is an
employee.
Subd. 2. [PROHIBITION ON RESTRICTIVE CONTRACT TERMS.] No
provider or person providing goods or health services to a
provider shall enter into any contract or subcontract with any
health plan company on terms that require the provider or person
not to contract with any other health plan company, unless the
provider or person is an employee.
Subd. 3. [ENFORCEMENT.] Either the commissioner of health
or commerce shall periodically review contracts among health
care providing entities and health plan companies to determine
compliance with this section. Any provider may submit a
contract to the commissioner for review if the provider believes
this section has been violated. Any provision of a contract
found to violate this section is null and void, and the
commissioner may seek civil penalties in an amount not to exceed
$25,000 for each such contract.
Subd. 4. [APPLICATION; VOLUNTARY RENEWAL.] This section
applies to contracts entered into on or after the effective date
of this section. This section does not prohibit the voluntary
renewal of exclusive contracts entered into prior to the
effective date of this section.
Subd. 5. [SUNSET.] This section expires January 1, 1997.
Sec. 18. [62Q.10] [NONDISCRIMINATION.]
If a health plan company, with the exception of a community
integrated service network or an indemnity insurer licensed
under chapter 60A who does not offer a product through a
preferred provider network, offers coverage of a health care
service as part of its plan, it may not deny provider network
status to a qualified health care provider type who meets the
credentialing requirements of the health plan company solely
because the provider is an allied independent health care
provider as defined in section 62N.255.
Sec. 19. [62Q.11] [DISPUTE RESOLUTION.]
Subdivision 1. [ESTABLISHED.] The commissioners of health
and commerce shall make dispute resolution processes available
to encourage early settlement of disputes in order to avoid the
time and cost associated with litigation and other formal
adversarial hearings. For purposes of this section, "dispute
resolution" means the use of negotiation, mediation,
arbitration, mediation-arbitration, neutral fact finding, and
minitrials. These processes shall be nonbinding unless
otherwise agreed to by all parties to the dispute.
Subd. 2. [REQUIREMENTS.] (a) If an enrollee, health care
provider, or applicant for network provider status chooses to
use a dispute resolution process prior to the filing of a formal
claim or of a lawsuit, the health plan company must participate.
(b) If an enrollee, health care provider, or applicant for
network provider status chooses to use a dispute resolution
process after the filing of a lawsuit, the health plan company
must participate in dispute resolution, including, but not
limited to, alternative dispute resolution under rule 114 of the
Minnesota general rules of practice.
(c) The commissioners of health and commerce shall inform
and educate health plan companies' enrollees about dispute
resolution and its benefits.
(d) A health plan company may encourage but not require an
enrollee to submit a complaint to alternative dispute resolution.
Sec. 20. [62Q.12] [DENIAL OF ACCESS.]
No health plan company may deny access to a covered health
care service unless the denial is made by, or under the
direction of, or subject to the review of a health care
professional licensed to provide the service in question.
Sec. 21. [62Q.135] [CONTRACTING FOR CHEMICAL DEPENDENCY
SERVICES.]
No health plan company shall contract with a chemical
dependency treatment program, unless the program participates in
the chemical dependency treatment accountability plan
established by the commissioner of human services. The
commissioner of human services shall make data on chemical
dependency services and outcomes collected through this program
available to health plan companies.
Sec. 22. [62Q.14] [RESTRICTIONS ON ENROLLEE SERVICES.]
No health plan company may restrict the choice of an
enrollee as to where the enrollee receives services related to:
(1) the voluntary planning of the conception and bearing of
children, provided that this clause does not refer to abortion
services;
(2) the diagnosis of infertility;
(3) the testing and treatment of a sexually transmitted
disease; and
(4) the testing for AIDS or other HIV-related conditions.
Sec. 23. [62Q.16] [MID-MONTH TERMINATION PROHIBITED.]
The termination of a person's coverage under any health
plan as defined in section 62A.011, subdivision 3, with the
exception of individual health plans, issued or renewed on or
after January 1, 1995, must provide coverage until the end of
the month in which coverage was terminated.
Sec. 24. [UTILIZATION REVIEW STUDY.]
The commissioners of health and commerce shall study means
of funding the registration required by Minnesota Statutes,
section 62M.03, and of monitoring and enforcing the requirements
of Minnesota Statutes, chapter 62M. They shall jointly report
their recommendations to the legislature by January 15, 1995.
Sec. 25. [EFFECTIVE DATE.]
Sections 1, 5, 6, 14 to 17, and 24 are effective the day
following final enactment. Sections 7 to 13 and 23 are
effective January 1, 1995. Section 2 to 4, and 18 to 21 are
effective July 1, 1994. Section 22 is effective January 1,
1995, and applies to policies and contracts issued or renewed on
or after that date.
ARTICLE 3
THE REGULATED ALL-PAYER OPTION
Section 1. Minnesota Statutes 1993 Supplement, section
62P.01, is amended to read:
62P.01 [REGULATED ALL-PAYER SYSTEM OPTION.]
The regulated all-payer system established under this
chapter governs all health care services that are provided
outside of an integrated service network. The regulated
all-payer system is designed to control costs, prices, and
utilization of all health care services not provided through an
integrated service network while maintaining or improving the
quality of services. The commissioner of health shall adopt
rules establishing controls within the system to ensure that the
rate of growth in spending in the system, after adjustments for
population size and risk, remains within the limits set by the
commissioner under section 62J.04. All providers that serve
Minnesota residents and all health carriers that cover Minnesota
residents shall comply with the requirements and rules
established under this chapter for all health care services or
coverage provided to Minnesota residents. The purpose of the
regulated all-payer option is to provide an alternative to
integrated service networks for those consumers, providers,
third-party payers, and group purchasers who prefer to
participate in a fee-for-service system. The initial goal of
the all-payer option is to reduce administrative costs and
burdens by including the all-payer option in a uniform,
standardized system of billing forms and procedures and
utilization review. The longer-term goal of the all-payer
option is to establish a uniform reimbursement system,
reimbursement and utilization controls, and quality standards
and monitoring; to ensure that the annual growth in the costs
for all services not provided through integrated service
networks will remain within the growth limits established under
section 62J.04; and to ensure that quality for these services is
maintained or improved.
Sec. 2. [62P.02] [DEFINITIONS.]
(a) For purposes of this chapter, the following definitions
apply:
(b) "All-payer insurer" means a health carrier as defined
in section 62A.011, subdivision 2. The term does not include
community integrated service networks or integrated service
networks licensed under chapter 62N.
(c) "All-payer reimbursement level" means the reimbursement
amount specified by the all-payer reimbursement system.
(d) "All-payer reimbursement system" means the
Minnesota-specific physician and independent provider fee
schedule, the Minnesota-specific hospital reimbursement system,
and other provider payment methods established under this
chapter or rules adopted under this chapter.
(e) "Commissioner" means the commissioner of health.
(f) "Health care provider" has the meaning given in section
62J.03, subdivision 8.
Sec. 3. Minnesota Statutes 1993 Supplement, section
62P.03, is amended to read:
62P.03 [IMPLEMENTATION.]
(a) By January 1, 1994, the commissioner of health, in
consultation with the Minnesota health care commission, shall
report to the legislature recommendations for the design and
implementation of the all-payer system. The commissioner may
use a consultant or other technical assistance to develop a
design for the all-payer system. The commissioner's
recommendations shall include the following:
(1) methods for controlling payments to providers such as
uniform fee schedules or rate limits to be applied to all health
plans and health care providers with independent billing rights;
(2) methods for controlling utilization of services such as
the application of standardized utilization review criteria,
incentives based on setting and achieving volume targets,
recovery of excess spending due to overutilization, or required
use of practice parameters;
(3) methods for monitoring quality of care and mechanisms
to enforce the quality of care standards;
(4) requirements for maintaining and reporting data on
costs, prices, revenues, expenditures, utilization, quality of
services, and outcomes;
(5) measures to prevent or discourage adverse risk
selection between the regulated all-payer system and integrated
service networks;
(6) measures to coordinate the regulated all-payer system
with integrated service networks to minimize or eliminate
barriers to access to health care services that might otherwise
result;
(7) an appeals process;
(8) measures to encourage and facilitate appropriate use of
midlevel practitioners and eliminate undesirable barriers to
their participation in providing services;
(9) measures to assure appropriate use of technology and to
manage introduction of new technology;
(10) consequences to be imposed on providers whose
expenditures have exceeded the limits established by the
commissioner; and
(11) restrictions on provider conflicts of interest.
(b) On July 1, 1994, the regulated all-payer system option
shall begin to be phased in with full implementation of the
all-payer reimbursement system by July 1, 1996 1997. During the
transition period, expenditure limits for health carriers shall
be established in accordance with section 62P.04 and health care
provider revenue limits shall be established in accordance with
section 62P.05.
Sec. 4. Minnesota Statutes 1993 Supplement, section
62P.04, is amended to read:
62P.04 [EXPENDITURE INTERIM HEALTH PLAN COMPANY EXPENDITURE
LIMITS FOR HEALTH PLAN COMPANY.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the following definitions apply.
(b) "Health carrier plan company" has the definition
provided in section 62A.011 62Q.01.
(c) "Total expenditures" means incurred claims or
expenditures on health care services, administrative expenses,
charitable contributions, and all other payments made by health
plan companies out of premium revenues.
(d) "Total expenditures" mean incurred claims or
expenditures on health care services, administrative expenses,
charitable contributions, and all other payments made by health
carriers out of premium revenues, except taxes and assessments,
and "Net expenditures" means total expenditures minus exempted
taxes and assessments and payments or allocations made to
establish or maintain reserves. Total expenditures are
equivalent to the amount of total revenues minus taxes and
assessments. Taxes and assessments
(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.
(f) "Consumer cost-sharing or subscriber liability" means
enrollee coinsurance, copayment, deductible payments, and
amounts in excess of benefit plan maximums.
Subd. 2. [ESTABLISHMENT.] The commissioner of health shall
establish limits on the increase in total net expenditures by
each health carrier plan company for calendar years 1994 and ,
1995, 1996, and 1997. The limits must be the same as the annual
rate of growth in health care spending established under section
62J.04, subdivision 1, paragraph (b). Health carriers plan
companies that are affiliates may elect to meet one combined
expenditure limit.
Subd. 3. [DETERMINATION OF EXPENDITURES.] Health carriers
plan companies shall submit to the commissioner of health, by
April 1, 1994, for calendar year 1993, and by; 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 all information the commissioner determines
to be necessary to implement and enforce this section. The
information must be submitted in the form specified by the
commissioner. The information must include, but is not limited
to, 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 carriers 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 carrier
plan company to the commissioner, and approved by the
commissioner as actuarially justified. The methodology to be
used for adjustments and the election to meet one expenditure
limit for affiliated health carriers plan companies must be
submitted to the commissioner by September 1, 1993 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.
Subd. 4. [MONITORING OF RESERVES.] (a) The commissioner
commissioners of health and commerce shall monitor health
carrier 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
ensure that savings resulting from the establishment of
expenditure limits are passed on to consumers in the form of
lower premium rates.
(b) Health carriers plan companies shall fully reflect in
the premium rates the savings generated by the expenditure
limits and the health care provider revenue limits. No premium
rate increase, currently reviewed by the departments of health
or commerce, may be approved for those health carriers plan
companies unless the health carrier 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
an integrated service network or 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, 1995, a list of all health carriers plan companies
that exceeded their expenditure target limit for the 1994
calendar year. The commissioner shall publish in the State
Register and make available to the public by July 1, 1996, a
list of all health carriers plan companies that exceeded their
combined expenditure limit for calendar years 1994 and 1995.
The commissioner shall notify each health carrier plan company
that the commissioner has determined that the carrier health
plan company exceeded its expenditure limit, at least 30 days
before publishing the list, and shall provide each carrier
health plan company with ten days to provide an explanation for
exceeding the expenditure target limit. 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 carriers plan
companies regulated by the commissioner of commerce. The
commissioner of commerce, in consultation with the commissioner
of health, shall enforce compliance by with expenditure limits
for those health carriers plan companies.
Subd. 7. [ENFORCEMENT.] (a) The commissioners of health
and commerce shall enforce the reserve limits referenced in
subdivision 4, with respect to the health carriers plan
companies that each commissioner respectively regulates. Each
commissioner shall require health carriers plan companies under
the commissioner's jurisdiction to submit plans of corrective
action when the reserve requirement is not met. Each
commissioner may adopt rules necessary to enforce this section.
Carriers The plan of correction must address the following:
(1) actuarial assumptions used in forecasting future
financial results;
(2) trend assumptions used in setting future premiums;
(3) demographic, geographic, and private and public sector
mix of the population covered by the health plan company;
(4) proposed rate increases or decreases;
(5) growth limits applied under section 62J.04, subdivision
1, paragraph (b); and
(6) other factors deemed appropriate by the health plan
company or commissioner.
If the health plan company's reserves exceed the required
maximum, the plan of correction shall address how the health
plan company will come into compliance and set forth a timetable
within which compliance would be achieved. The plan of
correction may propose premium refunds, credits for prior
premiums paid, policyholder dividends, or any combination of
these or other methods which will benefit enrollees and/or
Minnesota residents and are such that the reserve requirements
can reasonably be expected to be met. The commissioner's
evaluation of the plan of correction must consider:
(1) whether implementation of the plan would provide the
company with an unfair advantage in the market;
(2) the extent to which the reserve excess was created by
any movement of enrolled persons to another organization formed
by the company;
(3) whether any proposed premium refund, credit, and/or
dividend represents an equitable allocation to policyholders
covered in prior periods as determined using sound actuarial
practice; and
(4) any other factors deemed appropriate by the applicable
commissioner.
(b) The plan of correction is subject to approval by the
commissioner of health or commerce, as applicable. If such a
plan is not approved by the applicable commissioner, the
applicable commissioner shall enter an order stating the steps
that the health plan company must take to come into compliance.
Within 30 days of the date of such order, the health plan
company must file a notice of appeal with the applicable
commissioner or comply with the commissioner's order. If an
appeal is filed, such appeal is governed by chapter 14.
(c) Health plan companies that exceed the expenditure
limits based on two-year average expenditure data or whose
reserves exceed the limits referenced in subdivision 4 (1994 and
1995, 1996 and 1997) shall be required by the appropriate
commissioner to pay back the amount overspent exceeding the
expenditure limit through an assessment on the carrier health
plan company. A health plan company may appeal the
commissioner's order to pay back the amount exceeding the
expenditure limit by mailing to the commissioner a written
notice of appeal within 30 days from the date the commissioner's
order was mailed. The contested case and judicial review
provisions of chapter 14 apply to the appeal. The health plan
company shall pay the amount specified by the commissioner
either to the commissioner or into an escrow account until final
resolution of the appeal. Notwithstanding sections 3.762 to
3.765, each party is responsible for its own fees and expenses,
including attorneys fees, for the appeal. Any amount required
to be paid back under this section shall be deposited in the
health care access fund. The appropriate commissioner may
approve a different repayment method to take into account
the carrier's health plan company's financial condition. Health
plan companies shall comply with the limits but shall also
guarantee that their contractual obligations are met. Health
plan companies are prohibited from meeting spending obligations
by increasing subscriber liability, including copayments and
deductibles and amounts in excess of benefit plan maximums.
Sec. 5. Minnesota Statutes 1993 Supplement, section
62P.05, is amended to read:
62P.05 [HEALTH CARE PROVIDER REVENUE LIMITS.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"health care provider" has the definition given in section
62J.03, subdivision 8.
Subd. 2. [ESTABLISHMENT.] The commissioner of health shall
establish limits on the increase in revenue for each health care
provider, for calendar years 1994 and, 1995, 1996, and 1997.
The limits must be the same as the annual rate of growth in
health care spending established under section 62J.04,
subdivision 1, paragraph (b). The commissioner may adjust final
revenue figures for case mix complexity, inpatient to outpatient
conversion, payer mix, out-of-period settlements, certain taxes
and assessments including the MinnesotaCare provider tax and
provider surcharge, any new assessments imposed by federal or
state law, research and education costs, donations, grants, and
legislative initiatives that materially change health care costs
revenues, as long as these adjustments are consistent with the
methodology submitted by the health care provider to the
commissioner, and approved by the commissioner as actuarially
justified. The methodology to be used for adjustments must be
submitted to the commissioner by September 1, 1993 1994. 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. A health care provider's revenues
for purposes of these growth limits are net of the
contributions, surcharges, taxes, and assessments listed in
section 62P.04, subdivision 1, that the health care provider
pays.
Subd. 3. [MONITORING OF REVENUE.] The commissioner of
health shall monitor health care provider revenue, to ensure
that savings resulting from the establishment of revenue limits
are passed on to consumers in the form of lower charges. The
commissioner shall monitor hospital revenue by examining net
patient inpatient revenue per adjusted admission and net
outpatient revenue per outpatient visit. The commissioner shall
monitor the revenue of physicians and other health care
providers by examining revenue per patient per year or revenue
per encounter. For purposes of this section, definitions
related to the implementation of limits for providers other than
hospitals are included in Minnesota Rules, chapter 4650, and
definitions related to the implementation of limits for
hospitals are included in Minnesota Rules, chapter 4651. If this
information is not available, the commissioner may enforce an
annual limit on the rate of growth of the provider's current
fees based on the limits on the rate of growth established for
calendar years 1994 and 1995.
Subd. 4. [MONITORING AND ENFORCEMENT.] Health care
providers shall submit to the commissioner of health, in the
form and at the times required by the commissioner, all
information the commissioner determines to be necessary to
implement and enforce this section. Health care providers shall
submit to audits conducted by the commissioner. The
commissioner shall regularly audit all health clinics employing
or contracting with over 100 physicians. The commissioner shall
also audit, at times and in a manner that does not interfere
with delivery of patient care, a sample of smaller clinics,
hospitals, and other health care providers. Providers that
exceed revenue limits based on two-year average revenue data
shall be required by the commissioner to pay back the
amount overspent exceeding the revenue limits during the
following calendar year.
Pharmacists may adjust their revenue figures for increases
in drug product costs that are set by the manufacturer. The
commissioner shall consult with pharmacy groups, including
pharmacies, wholesalers, drug manufacturers, health plans, and
other interested parties, to determine the methodology for
measuring and implementing the interim growth limits while
taking into account the adjustments for drug product costs.
The commissioner shall monitor providers meeting the growth
limits based on their current fees on an annual basis. The fee
charged for each service must be based on a weighted average
across 12 months and compared to the weighted average for the
previous 12-month period. The percentage increase in the
average fee from 1993 to 1994, from 1994 to 1995, from 1995 to
1996, and from 1996 to 1997 is subject to the growth limits
established under section 62J.04, subdivision 1, paragraph (b).
The audit process may include a review of the provider's monthly
fee schedule, and a random claims analysis for the provider
during different parts of the year to monitor variations in
fees. The commissioner shall require providers that exceed
growth limits, based on annual fees, to pay back during the
following calendar year the amount of fees received exceeding
the limit.
The commissioner shall notify each provider that has
exceeded its revenue or fee limit, at least 30 days before
taking action, and shall provide each provider with ten days to
provide an explanation for exceeding the revenue or fee limit.
The commissioner shall review the explanation and may change a
determination if the commissioner determines the explanation to
be valid.
The commissioner may approve a different repayment schedule
for a health care provider that takes into account the
provider's financial condition. For those providers subject to
fee limits established by the commissioner, the commissioner may
adjust the percentage increase in the fee schedule to account
for changes in utilization. The commissioner may adopt rules in
order to enforce this section.
A provider may appeal the commissioner's order to pay back
the amount exceeding the revenue or fee limit by mailing a
written notice of appeal to the commissioner within 30 days
after the commissioner's order was mailed. The contested case
and judicial review provisions of chapter 14 apply to the
appeal. The provider shall pay the amount specified by the
commissioner either to the commissioner or into an escrow
account until final resolution of the appeal. Notwithstanding
sections 3.762 to 3.765, each party is responsible for its own
fees and expenses, including attorneys fees, for the appeal.
Any amount required to be paid back under this section shall be
deposited in the health care access fund.
Sec. 6. [62P.07] [SCOPE.]
Subdivision 1. [GENERAL APPLICABILITY.] (a) Minnesota
health care providers shall comply with the requirements and
rules established under this chapter for: (1) all health care
services provided to Minnesota residents who are not enrolled in
a community integrated service network or an integrated service
network; (2) all out-of-network services provided to enrollees
of community integrated service networks and integrated service
networks; and (3) all health care services provided to persons
covered by an all-payer insurer.
(b) All-payer insurers shall comply with the requirements
and rules established under this chapter for all coverage
provided.
(c) Community integrated service networks and integrated
service networks shall comply with the requirements and rules
established under this chapter when reimbursing health care
providers for out-of-network services.
Subd. 2. [PROGRAMS EXCLUDED.] This chapter does not apply
to services reimbursed under Medicare, medical assistance,
general assistance medical care, the MinnesotaCare program, or
worker's compensation programs.
Subd. 3. [PAYMENT REQUIRED AT ALL-PAYER LEVEL.] (a) All
reimbursements to Minnesota health care providers from all-payer
insurers, for services provided to covered persons, shall be at
the all-payer reimbursement level.
(b) All-payer insurers shall reimburse out-of-state health
care providers for nonemergency services provided to covered
persons at the all-payer reimbursement level. For purposes of
this paragraph, "nonemergency services" means services that do
not meet the definition of "emergency care" under Minnesota
Rules, part 4685.0100, subpart 5.
(c) Community integrated service networks and integrated
service networks shall reimburse Minnesota health care providers
for out-of-network services at the all-payer reimbursement level.
(d) Community integrated service networks and integrated
service networks shall reimburse out-of-network health care
providers located out-of-state for nonemergency out-of-network
services at the all-payer reimbursement level. For purposes of
this paragraph, "nonemergency out-of-network services" means
out-of-network services that do not meet the definition of
"emergency care" under Minnesota Rules, part 4685.0100, subpart
5.
Subd. 4. [BALANCE BILLING PROHIBITED.] Minnesota health
care providers shall accept reimbursement at the all-payer
reimbursement level, including applicable copayments,
deductibles, and coinsurance, as payment in full for services
provided to Minnesota residents and persons covered by all-payer
insurers, and for out-of-network services provided to enrollees
of community integrated service networks and integrated service
networks.
Sec. 7. [62P.09] [DUTIES OF THE COMMISSIONER.]
Subdivision 1. [GENERAL DUTIES.] The commissioner of
health is responsible for developing and administering the
all-payer option. The commissioner shall:
(1) develop, implement, and administer fee schedules for
physicians and providers with independent billing rights;
(2) develop, implement, and administer a reimbursement
system for hospitals and other institutional providers, but
excluding intermediate care facilities for the mentally
retarded, nursing homes, state-operated community service sites
operated by the commissioner of human services, and regional
treatment centers;
(3) modify and adjust all-payer reimbursement levels so
that health care spending under the all-payer option does not
exceed the growth limits on health care spending established
under section 62J.04;
(4) collect data from all-payer insurers, health care
providers, and patients to monitor revenues, spending, and
quality of care;
(5) provide incentives for the appropriate utilization of
services and the appropriate use and distribution of technology;
(6) coordinate the development and administration of the
all-payer option with the development and administration of the
integrated service network system; and
(7) develop and implement a fair and efficient system for
resolving appeals by providers and insurers.
Subd. 2. [COORDINATION.] The commissioner shall regularly
consult with the commissioner of commerce in developing and
administering the all-payer option and in applying the all-payer
reimbursement system to health carriers regulated by the
commissioner of commerce.
Subd. 3. [TIMELINES FOR IMPLEMENTATION.] In developing and
implementing the all-payer option, the commissioner shall comply
with the following implementation schedule:
(a) The phase-in of standardized billing requirements must
be completed following the timetable set forth in article 9.
(b) The phase-in of the all-payer reimbursement system must
begin January 1, 1996, or upon the date rules for the all-payer
option reimbursement system are adopted, whichever is later.
(c) The all-payer reimbursement system must be fully
implemented by July 1, 1997.
Subd. 4. [ADVISORY COMMITTEE.] The commissioner shall
convene an advisory committee made up of a broad array of health
care professionals that will be affected by the fee schedule.
Recommendations of this committee must be submitted to the
commissioner by November 15, 1994, and may be incorporated in
the implementation report due January 1, 1995.
Subd. 5. [RULEMAKING.] The commissioner shall adopt rules
to establish and administer the all-payer option. The rules
must include, but are not limited to: (1) the reimbursement
methods used in the all-payer option reimbursement system; (2) a
plan and implementation schedule to phase-in the all-payer
reimbursement system, beginning January 1, 1996; and (3)
mechanisms to ensure compliance by all-payer insurers, health
care providers, and patients with the all-payer reimbursement
system and the growth limits established under section 62J.04.
The commissioner shall seek to ensure that the rules for the
all-payer option are adopted by January 1, 1996. The
commissioner shall comply with section 62J.07, subdivision 3,
when adopting rules for the all-payer option.
Sec. 8. [62P.11] [PAYMENT TO PHYSICIANS AND INDEPENDENT
PROVIDERS.]
Subdivision 1. [FEE SCHEDULE.] The commissioner shall
adopt a Minnesota-specific fee schedule, based upon the Medicare
resource based relative value scale, to reimburse physicians and
other independent providers. The fee schedule must assign each
service a relative value unit that measures the relative
resources required to provide the service. Payment levels for
each service must be determined by multiplying relative value
units by a conversion factor that converts relative value units
into monetary payment. The conversion factor used to derive the
fee schedule must be set at a level that is consistent with
current relevant health care spending, subject to the state's
growth limits as defined in section 62J.04. The conversion
factor must be set at a level that equalizes total aggregate
expenditures for a given period before and after implementation
of the all-payer option.
Subd. 2. [DEVELOPMENT AND MODIFICATION OF RELATIVE VALUE
UNITS.] (a) When appropriate, the relative value unit for each
service shall be the Medicare value adjusted to reflect
Minnesota health care costs. The commissioner may assign a
different relative value to a service if, in the judgment of the
commissioner, the Medicare relative value unit is not accurate.
The commissioner may also develop or adopt relative value units
for services not covered under the Medicare resource based
relative value scale. Except as provided in paragraph (b),
modifications or additions to relative value units are subject
to the rulemaking requirements of chapter 14.
(b) The commissioner may modify the relative value units
used in the Minnesota-specific fee schedule, or change the
number of services assigned relative value units, to reflect
changes and improvements in the Medicare resource based relative
value scale. When adopting these federal changes, the
commissioner is exempt from the rulemaking requirements of
chapter 14, but shall publish a notice of modifications and
additions to relative value units in the State Register 30 days
before they take effect.
Subd. 3. [DEVELOPMENT OF THE CONVERSION FACTOR.] The
commissioner shall develop a conversion factor using actual
Minnesota claims data available to the commissioner.
Sec. 9. [62P.13] [VOLUME PERFORMANCE STANDARD FOR
PHYSICIAN AND OUTPATIENT SERVICES.]
Subdivision 1. [DEVELOPMENT.] The commissioner shall
establish an annual, statewide volume performance standard for
physician and outpatient services. The volume performance
standard shall serve as an expenditure target and must be set at
a level that is consistent with achieving the growth limits
pursuant to section 62J.04. The volume performance standard
must combine expenditures for all services provided by
physicians and other independent providers and all ambulatory
care services that are not provided through an integrated
service network. The statewide volume performance standard must
be developed from aggregate and encounter level data reported to
the state, including the claims database established under
section 62J.38, when it becomes operational.
Subd. 2. [APPLICATION.] The commissioner shall compare
actual expenditures for physician and outpatient services with
the volume performance standard in order to keep the all-payer
option expenditures within the statewide growth limits. If
total expenditures during a particular year exceed the
expenditure target for that year, the commissioner shall update
the fee schedule rates for the second year following the year in
which the target was exceeded, by adjusting the conversion
factor, in order to offset this increase.
Sec. 10. [62P.15] [REIMBURSEMENT.]
The commissioner, as part of the implementation report due
January 1, 1995, shall recommend to the legislature and the
governor which health care professionals should be paid at the
full fee schedule rate and which at a partial rate, for services
covered in the fee schedule.
Sec. 11. [62P.17] [PAYMENT FOR SERVICES NOT IN THE FEE
SCHEDULE.]
The commissioner shall examine options for paying for
services not covered in the fee schedule and shall present
recommendations to the legislature and the governor as part of
the implementation report due January 1, 1995. The options
examined by the commissioner must include, but are not limited
to, updates and modifications to the Medicare resource based
relative value scale; development of additional relative value
units; development of a fee schedule based on a percentage of
usual, customary, and reasonable charges; and use of rate of
increase controls.
Sec. 12. [62P.19] [PAYMENT FOR URBAN AND SELECTED RURAL
HOSPITALS.]
Subdivision 1. [ESTABLISHMENT OF RATE.] The commissioner
shall develop a Minnesota-specific hospital reimbursement system
to pay for inpatient services in those acute-care general
hospitals not qualifying for reimbursement under section
62P.25. In developing this system, the commissioner shall
consider the all-patient refined diagnosis related groups system
and other diagnosis related groups systems. Payment rates must
be standardized on a statewide basis based on Minnesota specific
claims level data available to the commissioner. Rates must be
consistent with the overall growth limit for health care
spending. Payment rates may be adjusted for area wage rates and
other factors, including uncompensated care. The commissioner
shall recommend any needed adjustments to the legislature and
governor as part of the implementation report due January 1,
1995.
Subd. 2. [SHORT STAY AND LONG STAY OUTLIERS.] The
reimbursement system must provide, on a budget neutral basis,
lower charges for self-pay patients with short or low cost
stays. The commissioner shall phase out this exception once
universal coverage is achieved. The commissioner, as part of
the implementation report due January 1, 1995, shall recommend
to the legislature and the governor whether an outlier payment
for long stays is needed.
Sec. 13. [62P.21] [STATEWIDE VOLUME PERFORMANCE STANDARD
FOR HOSPITALS.]
Subdivision 1. [DEVELOPMENT.] The commissioner shall
establish an annual, statewide volume performance standard for
inpatient hospital expenditures. The volume performance
standard shall serve as an expenditure target and must be set at
a level that is consistent with meeting the limits on health
care spending growth.
Subd. 2. [APPLICATION.] The commissioner shall compare
actual inpatient hospital expenditures with the volume
performance standard in order to keep all-payer option
expenditures within the statewide growth limits. If aggregate
inpatient hospital expenditures for a particular year exceed the
volume performance standard, the commissioner shall adjust the
annual increase in payment levels for the following year.
Sec. 14. [62P.23] [FLEXIBILITY IN APPLYING THE VOLUME
PERFORMANCE STANDARD; REVIEW.]
Subdivision 1. [REALLOCATION.] The commissioner may
reallocate spending limits between the inpatient hospital
services volume performance standard and the physician and
outpatient services volume performance standard, if this
promotes the efficient use of health care services and does not
cause total health care spending in the all-payer option to
exceed the level allowed by the growth limits on health care
spending.
Subd. 2. [REVIEW.] The commissioner shall review the
effectiveness of the volume performance standard after the first
three years of operation and shall recommend any necessary
changes to the legislature and the governor.
Sec. 15. [62P.25] [REIMBURSEMENT FOR SMALL RURAL
HOSPITALS.]
All-payer insurers shall pay small rural hospitals on the
basis of reasonable charges, subject to a rate of increase
control. For purposes of this requirement, a "small rural
hospital" means a hospital with 40 or fewer licensed beds that
is located at least 25 miles from another facility licensed
under sections 144.50 to 144.58 and operating as an acute care
community hospital. The commissioner shall recommend to the
legislature and the governor a methodology for determining
reasonable charges as part of the implementation report due
January 1, 1995.
Sec. 16. [62P.27] [PAYMENT FOR OUTPATIENT SERVICES.]
Outpatient services provided in acute-care general
hospitals and freestanding ambulatory surgery centers shall be
paid on the basis of approved charges, subject to rate of
increase controls. The rate of increase allowed must be
consistent with the volume performance standard for physician
and outpatient services.
Sec. 17. [62P.29] [OTHER INSTITUTIONAL PROVIDERS.]
Subdivision 1. [SPECIALTY HOSPITALS AND HOSPITAL
UNITS.] The commissioner shall develop payment mechanisms for
specialty hospitals providing pediatric and psychiatric care and
distinct psychiatric and rehabilitation units in hospitals. The
commissioner shall present these recommendations to the
legislature and governor as part of the implementation report
due January 1, 1995.
Subd. 2. [OTHER PROVIDERS.] The commissioner shall apply
rate of increase limits on charges or fees to other nonhospital
institutional providers. These providers include, but are not
limited to, home health agencies, substance abuse treatment
centers, and nursing homes, to the extent their services are
included in the all-payer option. In setting rate of increase
limits for institutional providers, the commissioner shall
consider outcomes, comprehensiveness of services, and the
special needs and severity of illness of patients treated by
individual providers.
Sec. 18. [62P.31] [LIMITATIONS ON ALL-PAYER OPTION.]
Beginning July 1, 1997, all-payer insurers shall not employ
or contract with health care providers, establish a network of
exclusive or preferred providers, or negotiate provider payments
that differ from the all-payer fee schedule. Preferred provider
organizations may continue to provide care to their existing
enrollees, without becoming licensed as an integrated service
network, through December 31, 1997.
Sec. 19. [62P.33] [RECOMMENDATIONS FOR A USER FEE.]
The commissioner of health shall present to the
legislature, as part of the implementation plan due January 1,
1996, recommendations for establishing and collecting a user fee
from all-payer insurers. The user fee must be set at a level
that reflects the state's investment in fee schedules, standard
utilization reviews, quality monitoring, and other regulatory
and administrative functions provided for the regulated
all-payer option. The commissioner may consult actuaries in
developing recommendations for and setting the level of the user
fee. The commissioner may also present recommendations to
establish additional fees and assessments if the commissioner
determines they are needed to assure equal levels of
accountability between the integrated service network system and
the regulated all-payer option in terms of public health goals,
serving high-risk and special needs populations, and other
obligations imposed on the integrated service network system.
Sec. 20. Minnesota Statutes 1992, section 72A.20, is
amended by adding a subdivision to read:
Subd. 31. [REASONABLE, ADEQUATE, AND NOT PREDATORY
PREMIUMS.] Premiums charged by a health plan company, as defined
in section 62Q.01, shall be reasonable, adequate, and not
predatory in relation to the benefits, considering actuarial
projection of the cost of providing or paying for the covered
health services, considering the costs of administration, and in
relation to the reserves and surplus required by law.
Sec. 21. [STUDY OF STANDARD UTILIZATION REVIEW CRITERIA
FOR SERVICES.]
The commissioner of health, after consulting with
providers, utilization review organizations, the practice
parameters advisory committee, and the health technology
advisory committee, shall report to the legislature by July 1,
1995, and recommended clinical criteria for determining the
necessity, appropriateness, and efficacy of five frequently used
health care services for which standard criteria for utilization
review would decrease providers' administrative costs.
Sec. 22. [INSTRUCTION TO THE REVISOR.]
The revisor, in the next edition of Minnesota Statutes,
shall replace the term "regulated all-payer system" and similar
terms with "regulated all-payer option" and similar terms in
sections 62J.04, 62J.09, 62J.152, 62P.01 and 62P.03.
Sec. 23. [EFFECTIVE DATE.]
Sections 1 to 22 are effective the day following final
enactment.
ARTICLE 4
FUTURE REQUIREMENTS FOR HEALTH PLAN COMPANIES
Section 1. [62J.48] [CRITERIA FOR REIMBURSEMENT.]
All ambulance services licensed under section 144.802 are
eligible for reimbursement under the integrated service network
system and the regulated all-payer option. The commissioner
shall require community integrated service networks, integrated
service networks, and all-payer insurers to adopt the following
reimbursement policies.
(1) All scheduled or prearranged air and ground ambulance
transports must be reimbursed if requested by an attending
physician or nurse, and, if the person is an enrollee in an
integrated service network or community integrated service
network, if approved by a designated representative of an
integrated service network or a community service network who is
immediately available on a 24-hour basis. The designated
representative must be a registered nurse or a physician
assistant with at least three years of critical care or trauma
experience, or a licensed physician.
(2) Reimbursement must be provided for all emergency
ambulance calls in which a patient is transported or medical
treatment rendered.
(3) Special transportation services must not be billed or
reimbursed if the patient needs medical attention immediately
before transportation.
Sec. 2. Minnesota Statutes 1993 Supplement, section
62N.06, subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZED ENTITIES.] (a) An integrated
service network may be organized as a separate nonprofit
corporation under chapter 317A or as a cooperative under chapter
308A.
(b) A nonprofit health carrier, as defined in section
62A.011, may establish and operate one or more integrated
service networks without forming a separate corporation or
cooperative, but only if all of the following conditions are met:
(i) a an existing contract between the health carrier and a
health care provider, for a term of less than seven years, that
was executed before June 1, 1993, that does not explicitly
mention the provider's relationship within an integrated service
network, or a future integrated service network, does not bind
the health carrier or provider as applied to integrated service
network services, except with the mutual consent of the health
carrier and provider entered into on or after June 1, 1993.
This clause does not apply to contracts between a health carrier
and its salaried employees;
(ii) the health carrier shall not apply toward the net
worth, working capital, or deposit requirements of this chapter
any assets used to satisfy net worth, working capital, deposit,
or other financial requirements under any other chapter of
Minnesota law;
(iii) the health carrier shall not include in its premiums
for health coverage provided under any other chapter of
Minnesota law, an assessment or surcharge relating to net worth,
working capital, or deposit requirements imposed upon the
integrated service network under this chapter; and
(iv) the health carrier shall not include in its premiums
for integrated service network coverage under this chapter an
assessment or surcharge relating to net worth working capital or
deposit requirements imposed upon health coverage offered under
any other chapter of Minnesota law.
Sec. 3. [62N.14] [OFFICE OF CONSUMER SERVICES.]
Subdivision 1. [DUTIES.] Every integrated service network
must have an office of consumer services which will be
responsible for dealing with all enrollee complaints and
inquiries. The integrated service network, through its office
of consumer services, will be responsible for:
(1) soliciting consumer comment on the quality and
accessibility of services available;
(2) disseminating information to consumers on the
integrated service network's enrollee complaint resolutions
system;
(3) receiving unsolicited comments on and complaints about
services;
(4) taking prompt action upon consumer complaints; and
(5) providing for and participating in alternative dispute
resolution processes including the fact-finding and dispute
resolution process established under section 62Q.30.
Subd. 2. [CONTACT WITH COMMISSIONER.] Each integrated
service network shall designate a contact person for direct
communication with the commissioner. Integrated service network
complaint files must be maintained by the integrated service
network for seven years and must be made available upon the
request of the commissioner. The commissioner shall
periodically summarize the number, type, and resolution of
complaints received by the health department from integrated
service network enrollees, and shall make that information
available through the office of consumer information. The
commissioner may at any time inspect the integrated service
network's office of consumer services complaint files.
Subd. 3. [ENROLLEE MEMBERSHIP CARDS.] Integrated service
networks shall issue enrollee membership cards to each enrollee
of the integrated service network. The enrollee card shall
contain, at minimum, the following information:
(1) the telephone number of the integrated service
network's office of consumer services;
(2) the telephone number of the state's office of consumer
information; and
(3) the telephone number of the department of health or
local ombudsperson.
The membership cards shall also conform to the requirements
set forth in section 62J.60.
Subd. 4. [ENROLLEE DOCUMENTS.] Each integrated service
network, through its office of consumer services, is responsible
for providing enrollees, upon request, with any reasonable
information desired by an enrollee. This information may
include duplicate copies of the evidence of coverage form
required under section 62N.11; an annually updated list of
addresses and telephone numbers of available integrated service
network providers, including midlevel practitioners and allied
professionals; and information on the enrollee complaint system
of the integrated service network.
Sec. 4. [62N.38] [FEDERAL AGENCY PARTICIPATION.]
Subdivision 1. [PARTICIPATION.] An integrated service
network may be organized by a department, agency, or
instrumentality of the United States government.
Subd. 2. [ENROLLEES.] An integrated service network
organized under subdivision 1 may limit its enrollment to those
persons entitled to care under the federal program responsible
for the integrated service network.
Subd. 3. [PARTICIPATION IN STATE PROGRAMS.] An integrated
service network organized under subdivision 1 may request that
the commissioner of health waive the requirement of section
62N.10, subdivision 4 with regard to some or all of the programs
listed in that provision. The commissioner shall grant the
waiver unless the commissioner determines that the applicant
does not plan to provide care to low-income persons who are
otherwise eligible for enrollment in the integrated service
network. The integrated service network may withdraw its waiver
with respect to some or all of the programs listed in section
62N.10, subdivision 4 at any time, as long as it is willing and
able to enroll in the programs previously waived on the same
basis as other integrated service networks.
Subd. 4. [SOLVENCY.] The commissioner shall consult with
federal officials to develop procedures to allow integrated
service networks organized under subdivision 1 to use the United
States government as a guaranteeing organization.
Subd. 5. [VETERANS.] In developing and implementing
initiatives to expand access to health care, the commissioner
shall recognize the unique problems of veterans and consider
methods to reach underserved portions of the veteran population.
Sec. 5. [62N.381] [AMBULANCE SERVICE RATE NEGOTIATION.]
Subdivision 1. [APPLICABILITY.] This section applies to
all reimbursement rate negotiations between ambulance services
and community integrated service networks or integrated service
networks.
Subd. 2. [RANGE OF RATES.] The reimbursement rate
negotiated for a contract period must not be more than 20
percent above or below the individual ambulance service's
current customary charges, plus the rate of growth allowed under
section 62J.04, subdivision 1. If the network and ambulance
service cannot agree on a reimbursement rate, each party shall
submit their rate proposal along with supportive data to the
commissioner.
Subd. 3. [DEVELOPMENT OF CRITERIA.] The commissioner, in
consultation with representatives of the Minnesota Ambulance
Association, regional emergency medical services programs,
community integrated service networks and integrated service
networks, shall develop guidelines to use in reviewing rate
proposals and making a final reimbursement rate determination.
Subd. 4. [REVIEW OF RATE PROPOSALS.] The commissioner,
using the guidelines developed under subdivision 3, shall review
the rate proposals of the ambulance service and community
integrated service network or integrated service network and
shall adopt either the network's or the ambulance service's
proposal. The commissioner shall require the network and
ambulance service to adhere to this reimbursement rate for the
contract period.
Subd. 5. [EXPIRATION.] This section expires July 1, 1996.
Sec. 6. [62Q.19] [ESSENTIAL COMMUNITY PROVIDERS.]
Subdivision 1. [DESIGNATION.] The commissioner shall
designate essential community providers. The criteria for
essential community provider designation shall be the following:
(1) a demonstrated ability to integrate applicable
supportive and stabilizing services with medical care for
uninsured persons and high-risk and special needs populations as
defined in section 62Q.07, subdivision 2, paragraph (e),
underserved, and other special needs populations; and
(2) a commitment to serve low-income and underserved
populations by meeting the following requirements:
(i) has nonprofit status in accordance with chapter 317A;
(ii) has tax exempt status in accordance with the Internal
Revenue Service Code, section 501(c)(3);
(iii) charges for services on a sliding fee schedule based
on current poverty income guidelines; and
(iv) does not restrict access or services because of a
client's financial limitation; or
(3) status as a local government or community health board
as defined in chapter 145A.
The commissioner may designate an eligible provider as an
essential community provider for all the services offered by
that provider or for specific services designated by the
commissioner.
For the purpose of this subdivision, supportive and
stabilizing services include at a minimum, transportation, child
care, cultural, and linguistic services where appropriate.
Subd. 2. [APPLICATION.] Any provider may apply to the
commissioner for designation as an essential community provider
within two years after the effective date of the rules adopted
by the commissioner to implement this section.
Subd. 3. [HEALTH PLAN COMPANY AFFILIATION.] A health plan
company must offer a provider contract to any designated
essential community provider located within the area served by
the health plan company. A health plan company shall not
restrict enrollee access to the essential community provider for
the population that the essential community provider is
certified to serve. A health plan company may also make other
providers available to this same population. A health plan
company may require an essential community provider to meet all
data requirements, utilization review, and quality assurance
requirements on the same basis as other health plan providers.
Subd. 4. [ESSENTIAL COMMUNITY PROVIDER
RESPONSIBILITIES.] Essential community providers must agree to
serve enrollees of all health plan companies operating in the
area that the essential community provider is certified to serve.
Subd. 5. [CONTRACT PAYMENT RATES.] An essential community
provider and a health plan company may negotiate the payment
rate for covered services provided by the essential community
provider. This rate must be competitive with rates paid to
other health plan providers for the same or similar services.
Subd. 6. [TERMINATION.] The designation as an essential
community provider is terminated five years after it is granted,
and the former essential community provider has no rights or
privileges beyond those of any other health care provider.
Subd. 7. [RECOMMENDATIONS AND RULEMAKING ON ESSENTIAL
COMMUNITY PROVIDERS.] (a) As part of the implementation plan due
January 1, 1995, the commissioner shall present proposed rules
and any necessary recommendations for legislation for defining
essential community providers, using the criteria established
under subdivision 1, and defining the relationship between
essential community providers and health plan companies.
(b) By January 1, 1996, the commissioner shall adopt rules
for establishing essential community providers and for governing
their relationship with health plan companies. The commissioner
shall also identify and address any conflict of interest issues
regarding essential community provider designation for local
governments.
Sec. 7. [62Q.21] [UNIVERSAL STANDARD BENEFITS SET.]
Subdivision 1. [MANDATORY OFFERING.] Effective January 1,
1996, each health plan company shall offer the universal
standard benefits set to its enrollees.
Subd. 2. [STANDARD BENEFIT SET.] Effective July 1, 1997,
health plan companies shall offer, sell, issue, or renew only
the universal standard benefits set and the cost-sharing and
supplemental coverage options established in accordance with
sections 62Q.25 and 62Q.27.
Subd. 3. [GENERAL DESCRIPTION.] The universal standard
benefits set must contain all appropriate and necessary health
care services. Benefits necessary to meet public health goals,
adequately serve high risk and special needs populations,
facilitate the utilization of cost effective alternatives to
traditional inpatient acute and extended health care delivery,
or meet other objectives of health care reform shall be
considered by the commissioner for inclusion in the universal
standard benefits set. Appropriate and necessary dental
services must be included.
Subd. 4. [BENEFIT SET RECOMMENDATIONS.] The commissioner
of health, in consultation with the Minnesota health care
commission and the commissioners of human services and commerce,
shall develop the universal standard benefits set and report
these recommendations to the legislature by January 1, 1995.
The commissioners shall include in this report a definition for
appropriate and necessary care, in terms of type, frequency,
level, setting, and duration of services which address the
enrollee's mental and physical condition. In developing this
definition, the commissioners shall consider that a benefit set
that excludes genuinely appropriate and necessary services will
not reduce or contain costs, but will only transfer those costs
onto individuals and the public sector. Therefore, the
definition of appropriate and necessary care must be
sufficiently broad to address the needs of those with chronic
conditions or disabilities, including those who need health
services to improve their functioning, and those for whom
maintenance of health may not be possible and those for whom
preventing deterioration in their health conditions might not be
achievable, and meet other health care reform objectives. In
developing the universal standard benefits set, the
commissioners shall take into account factors including, but not
limited to:
(1) information regarding the benefits, risks, and
cost-effectiveness of health care interventions;
(2) development of practice parameters;
(3) technology assessments;
(4) medical innovations;
(5) health status assessments;
(6) identification of unmet needs or particular barriers to
access;
(7) public health goals;
(8) expenditure limits and available funding;
(9) cost savings resulting from the inclusion of a health
care service that will decrease the utilization of other health
care services in the benefit set;
(10) cost efficient and effective alternatives to inpatient
health care services for acute or extended health care needs,
such as home health care services; and
(11) the desirability of including coverage for all
court-ordered mental health services for juveniles.
Subd. 5. [ADVISORY COMMITTEE ON THE UNIVERSAL BENEFITS
SET.] The commissioner shall appoint an advisory committee to
develop recommendations regarding the services other than dental
services to be included in the universal benefits set. The
committee must include representatives of health care providers,
purchasers, consumers, health plan companies, and counties. The
health care provider representatives must include both
physicians and allied independent health care providers
representing both physical and mental health conditions. The
committee shall report these recommendations to the commissioner
by October 1, 1994.
Subd. 6. [ADVISORY COMMITTEE ON DENTAL SERVICES.] The
commissioner shall appoint an advisory committee to develop
recommendations regarding the level of appropriate and necessary
dental services to be included in the universal standard
benefits set. The committee shall also develop recommendations
on an appropriate system to deliver dental services. In its
analysis the committee shall study the quality and
cost-effectiveness of dental services delivered through
capitated dental networks, discounted dental preferred provider
organizations, and independent practice dentistry. The
committee shall report these recommendations to the commissioner
by October 1, 1994.
Subd. 7. [CHEMICAL DEPENDENCY SERVICES.] If chemical
dependency services are included in the universal standard
benefits set, the commissioner shall consider the cost
effectiveness of requiring health plan companies and chemical
dependency facilities to use the assessment criteria in
Minnesota Rules, parts 9530.6600 to 9530.6660.
Sec. 8. [62Q.23] [GENERAL SERVICES.]
(a) Health plan companies shall comply with all
continuation and conversion of coverage requirements applicable
to health maintenance organizations under state or federal law.
(b) Health plan companies shall comply with sections
62A.047, 62A.27, and any other coverage required under chapter
62A of newborn infants, dependent children who do not reside
with a covered person, handicapped children and dependents, and
adopted children. A health plan company providing dependent
coverage shall comply with section 62A.302.
(c) Health plan companies shall comply with the equal
access requirements of section 62A.15.
Sec. 9. [62Q.25] [SUPPLEMENTAL COVERAGE.]
Health plan companies may choose to offer separate
supplemental coverage for services not covered under the
universal benefits set. Health plan companies may offer any
Medicare supplement, Medicare select, or other Medicare-related
product otherwise permitted for any type of health plan company
in this state. Each Medicare-related product may be offered
only in full compliance with the requirements in chapters 62A,
62D, and 62E that apply to that category of product.
Sec. 10. [62Q.27] [ENROLLEE COST-SHARING.]
(a) The commissioner, as part of the implementation plan
due January 1, 1995, shall present to the legislature
recommendations and draft legislation to establish up to five
standardized benefit plans which may be offered by each health
plan company. The plans must vary only on the basis of enrollee
cost sharing and encompass a range of cost-sharing options from
(1) lower premium costs combined with higher enrollee
cost-sharing, to (2) higher premium costs combined with lower
enrollee cost-sharing. Each plan offered may include
out-of-network coverage options.
(b) For purposes of this section, "enrollee cost-sharing"
or "cost-sharing" means copayments, deductibles, coinsurance,
and other out-of-pocket expenses paid by the individual consumer
of health care services.
(c) The following principles must apply to cost-sharing:
(1) enrollees must have a choice of cost-sharing
arrangements;
(2) enrollee cost-sharing must be administratively feasible
and consistent with efforts to reduce the overall administrative
burden on the health care system;
(3) cost-sharing for recipients of medical assistance,
general assistance medical care, or the MinnesotaCare program
must be determined by applicable law and rules governing these
programs;
(4) cost-sharing must be capped at an annual limit
determined by the commissioner to protect individuals and
families from severe financial hardship and to protect
individuals with substantial health care needs;
(5) cost-sharing must not be applied to preventive health
services as defined in Minnesota Rules, part 4685.0801, subpart
8;
(6) the impact of enrollee cost-sharing requirements on
appropriate utilization must be considered when cost-sharing
requirements are developed;
(7) additional requirements may be established to assist
enrollees for whom an inducement in addition to the elimination
of cost-sharing is necessary in order to encourage them to use
cost-effective preventive services. These requirements may
include the provision of educational information, assistance or
guidance, and opportunities for responsible decision making by
enrollees that minimize potential out-of-pocket costs;
(8) a copayment may be no greater than 25 percent of the
paid charges for the service or product;
(9) cost-sharing requirements and benefit or service
limitations for outpatient mental health and outpatient chemical
dependency services, except for persons placed in chemical
dependency services under Minnesota Rules, parts 9530.6600 to
9530.6660, must not place a greater financial burden on the
insured or enrollee, or be more restrictive than those
requirements and limitations for outpatient medical services;
and
(10) cost-sharing requirements and benefit or service
limitations for inpatient hospital mental health and inpatient
hospital and residential chemical dependency services, except
for persons placed in chemical dependency services under
Minnesota Rules, parts 9530.6600 to 9530.6660, must not place a
greater financial burden on the insured or enrollee, or be more
restrictive than those requirements and limitations for
inpatient hospital medical services.
(d) The commissioner shall consider whether a health plan
company may return to the enrollee all or part of an enrollee's
premium as an incentive for completing preventive care, and may
return all or part of an enrollee's cost-sharing for
participating in health education, improving health, or reducing
health risks.
Sec. 11. [62Q.29] [STATE-ADMINISTERED PUBLIC PROGRAMS.]
Public agencies, in conjunction with the department of
health and the department of human services, on behalf of
eligible recipients enrolled in public programs such as medical
assistance, general assistance medical care, and MinnesotaCare,
may contract with health plan companies to provide services
included in these programs, but not included in the universal
standard benefits set.
Sec. 12. [62Q.30] [EXPEDITED FACT FINDING AND DISPUTE
RESOLUTION PROCESS.]
The commissioner shall establish an expedited fact finding
and dispute resolution process to assist enrollees of integrated
service networks and all-payer insurers with contested
treatment, coverage, and service issues to be in effect July 1,
1997. The commissioner may order an integrated service network
or an all-payer insurer to provide or pay for a service that is
within the universal standard benefits set. If the disputed
issue relates to whether a service is appropriate and necessary,
the commissioner shall issue an order only after consulting with
appropriate experts knowledgeable, trained, and practicing in
the area in dispute, reviewing pertinent literature, and
considering the availability of satisfactory alternatives. The
commissioner shall take steps including but not limited to
fining, suspending, or revoking the license of an integrated
service network or an all-payer insurer that is the subject of
repeated orders by the commissioner that suggests a pattern of
inappropriate underutilization.
Sec. 13. [COMPLAINT PROCEDURE.]
The commissioners of health and commerce shall develop an
internal grievance procedure and appeals process to be used by
all health plan companies. The commissioner shall make a report
of recommendations to the legislature by January 1, 1995. In
developing the report and recommendations, the commissioner
shall consider the current prepaid medical assistance and health
maintenance organization internal grievance procedure as models.
Sec. 14. [EFFECTIVE DATE.]
(a) Sections 2 and 7 are effective the day following final
enactment.
(b) Sections 1, 3, 4, 6, 10, 12, and 13 are effective July
1, 1994.
(c) Section 5 is effective January 1, 1995.
(d) Sections 8, 9, and 11 are effective July 1, 1997.
ARTICLE 5
IMPLEMENTATION AND TRANSITION PLANS
Section 1. [62Q.41] [ANNUAL IMPLEMENTATION REPORT.]
The commissioner of health, in consultation with the
Minnesota health care commission, shall develop an annual
implementation report to be submitted to the legislature each
year beginning January 1, 1995, describing the progress and
status of rule development and implementation of the integrated
service network system and the regulated all-payer option, and
providing recommendations for legislative changes that the
commissioner determines may be needed.
Sec. 2. [TRANSITION PLAN.]
The commissioner of health, in consultation with the
Minnesota health care commission, shall develop a plan to
facilitate the transition from the existing health care delivery
and financing system to the integrated service network system
and the regulated all-payer option. The plan may include
recommendations for integrated service network requirements or
other requirements that should become applicable to some or all
health plan companies prior to July 1, 1997, and recommendations
for requirements that should be modified or waived during a
transition period after July 1, 1997, as health plan companies
convert to integrated service networks or to the regulated
all-payer option. The transition plan must be submitted to the
legislature by January 1, 1995.
Sec. 3. [INTEGRATED STATE ADMINISTERED PUBLIC PROGRAM.]
The commissioner of human services in consultation with
representatives of counties and consumer groups shall develop an
implementation plan for the integration of MinnesotaCare and
general assistance medical care into a single cost effective
program by July 1, 1996, adding medical assistance into this
integrated program under a federal demonstration project waiver
by July 1, 1997. The commissioner shall submit the plan
including necessary implementation legislation to the
legislature by February 1, 1995. The legislation must include:
(1) a definition of services covered by the integrated
program, excluding supplemental and long-term care benefits, and
supporting actuarial data;
(2) a single set of criteria to determine eligibility for
the integrated program;
(3) a request to seek a federal demonstration project
waiver to include medical assistance in the integrated program;
and
(4) a plan to define the scope and delivery of supplemental
long-term care benefits to special populations.
The commissioner will present an update and an initial
budget analysis to the legislative commission on health care
access no later than December 1, 1994.
Sec. 4. [STATE ADMINISTERED PUBLIC PROGRAM PHASE-IN.]
(a) The commissioner of human services shall present to the
legislature and the governor, as part of the implementation
report due January 1, 1996, a plan to incorporate state
administered health programs into the all-payer option and the
integrated service network system. The plan must identify the
federal waivers and approvals required. The plan must also
provide a schedule for phasing in the state administered health
programs beginning July 1, 1997, and for increasing
reimbursement levels in stages over the phase-in period. For
purposes of this section, "state administered health programs"
means the medical assistance, general assistance medical care,
and MinnesotaCare programs.
(b) The commissioners of human services and employee
relations shall include with the plan required under paragraph
(a) recommendations, including proposed legislation, for a
coordinated program for purchasing health care services for the
state employees group insurance program and recipients of state
administered health programs, to be phased in beginning July 1,
1997.
(c) The recommendations shall include a requirement that
health plan companies interested in contracting to serve
enrollees or recipients of the programs listed in paragraph (b)
submit a bid to provide services to all enrollees and recipients
of those programs residing within the plan's service area.
(d) The commissioners of human services and employee
relations must convene an advisory task force to assist with the
preparation of plans, recommendations, and legislation required
by this section. The task force must include representatives of
recipients of the publicly paid health care programs, providers
with substantial experience in providing services to recipients
of these programs, county human services, exclusive
representatives of state employees, and other affected persons.
(e) The commissioners of human services and employee
relations may begin integrating administrative functions
relating to the purchase of health care prior to July 1, 1997,
that do not affect eligibility or coverage policy for medical
assistance, general assistance medical care, or MinnesotaCare
enrollees. All integration shall be included in the report
required under paragraph (a).
Sec. 5. [RECODIFICATION AND HEALTH PLAN COMPANY REGULATORY
REFORM.]
Subdivision 1. [PROPOSED LEGISLATION.] The commissioners
of health and commerce, in consultation with the Minnesota
health care commission and the legislative commission on health
care access, shall draft proposed legislation to recodify,
simplify, and standardize all statutes, rules, regulatory
requirements, and procedures relating to health plan companies.
The recodification and regulatory reform must become effective
simultaneously with the full implementation of the integrated
service network system and the regulated all-payer option on
July 1, 1997. The commissioners of health and commerce shall
submit to the legislature by January 1, 1996, a report on the
recodification and regulatory reform with proposed legislation.
Subd. 2. [ADVISORY TASK FORCE.] The commissioner of health
shall convene an advisory task force to advise the commissioner
on the recodification and reform of regulatory requirements
under this section. The task force must include representatives
of health plan companies, consumers, counties, employers, labor
unions, providers, and other affected persons.
Sec. 6. [HEALTH REFORM DEMONSTRATION MODELS.]
The commissioner of health, in consultation with
appropriate state agencies, is authorized to seek federal and
private foundation grants to supplement any funds appropriated
under this act in order to conduct demonstration models to
develop the implementation strategies for the various components
of health care reform. The model projects may include the
following:
(1) risk adjustment formulas;
(2) integration of special needs populations into
integrated service networks;
(3) organization of health services delivery by
post-secondary educational facilities;
(4) establishment of rural purchasing pools and cooperative
service arrangements;
(5) integration of rural public health nursing agency
services with rural community integrated service networks;
(6) development of appropriate access services which
facilitate enrollment of low-income or special needs populations
into integrated service networks;
(7) evaluation methods for the action plans prepared by
health plan companies; and
(8) integration of services provided by licensed school
nurses into integrated service networks.
Sec. 7. [24-HOUR COVERAGE.]
As part of the implementation report submitted on January
1, 1996, as required under Minnesota Statutes, section 62Q.41,
the commissioners of health and labor and industry shall develop
a 24-hour coverage plan incorporating and coordinating the
health component of workers' compensation with health care
coverage to be offered by an integrated service network. The
commissioners shall also make recommendations of any legislative
changes that may be needed to implement this plan.
Sec. 8. [AMBULANCE RATE STUDY.]
(a) The commissioner of health in consultation with the
Minnesota ambulance association and the regional emergency
medical services systems shall study the feasibility and
desirability of establishing a system of ambulance rate
regulation. The commissioner shall report findings,
conclusions, and recommendations to the legislature by February
1, 1995, as part of the report on the financial condition of
licensed ambulance services in Minnesota required in Laws 1993,
First Special Session chapter 1, article 1, section 3,
subdivision 4.
(b) If the commissioner, under paragraph (a), recommends
establishing a system of ambulance rate regulation, the
commissioner, in consultation with the Minnesota ambulance
association and the regional emergency medical services systems,
shall develop a system of ambulance rate regulations for the
integrated service network and all-payer option systems. The
commissioner shall present recommendations and an implementation
plan for this rate regulation system to the legislature by
January 1, 1996.
Sec. 9. [SINGLE PAYER STUDY.]
The legislative audit commission is requested to direct the
legislative auditor to conduct an evaluation of the
administrative cost of paying Minnesota health care providers
through the multiple payers that currently reimburse the
providers. The legislative auditor shall also analyze the
administrative cost of paying Minnesota health care providers
through one state government agency and, alternatively, through
one private sector health carrier. "Administrative cost"
includes: (1) the difference between all revenues received and
all claims paid out by all publicly financed health programs and
all private sector health carriers; and (2) billing costs for
Minnesota health care providers. The legislative auditor shall
also study the different types of administrative expenses,
including costs that relate to the enhancement of quality of
care. The report must, to the extent possible, rely solely on
data collected from Minnesota health care providers, health
carriers, and other group purchasers. The legislative auditor
shall report findings of this study to the legislature by
January 15, 1995.
Sec. 10. [CONTINUED STUDY OF MEDICAL EDUCATION AND
RESEARCH COSTS.]
Subdivision 1. [PURPOSE.] The legislature finds that
health care research and the preparation of future health care
practitioners are of great importance to the quality of health
care available to the citizens of this state; that medical
education and research must be designed to meet the health needs
of the population and the changing needs of the health care
delivery system; and that the cost of medical education and
research should not place institutions engaged in these
activities at a competitive disadvantage in the marketplace.
Subd. 2. [SCOPE OF STUDY.] The commissioner of health
shall continue the study developed as part of Minnesota
Statutes, section 62J.045, on the impact of state health care
reform on the financing of medical education and research
activities in the state. The study shall address issues related
to the institutions engaged in these activities, including
hospitals, medical centers, and health plan companies, and will
report on the need for alternative funding mechanisms for
medical education and research activities. The commissioner
shall monitor ongoing public and private sector activities
related to the study of the financing of medical education and
research activities and include a description of these
activities in the final report as applicable. The commissioner
shall submit a report on the study findings, including
recommendations on mechanisms to finance medical education and
research activities, to the legislature by February 15, 1995.
Subd. 3. [RECOMMENDATIONS.] The study shall explore both
private and public alternatives for funding medical education
and research activities. The study shall include
recommendations which, when implemented, would:
(1) help to assure the coordination between federal and
state funding mechanisms;
(2) help assure adequate funding to support medical
education and research activities;
(3) create alternative funding mechanisms, if necessary, to
assure that medical education and research are responsive to the
health needs of the population and the needs of Minnesota's
health delivery system;
(4) help to assure that any changes in funding for medical
education and health care research do not destabilize
institutions that currently conduct, sponsor, or otherwise
engage in health care research and medical education; and
(5) allocate the costs of medical education and research
fairly across the health care system.
Subd. 4. [TASK FORCE.] The commissioner may appoint an
advisory task force to provide expertise and advice on the
study. The task force may include up to 20 members. The
commissioner shall take under consideration representation of
the following groups: the Minnesota association of public
teaching hospitals and other nonteaching hospitals; private
academic medical centers; the University of Minnesota medical
school and its primary care residency programs; payer
organizations including managed care, nonprofit health service
plan organizations, and commercial carriers; other providers
including the Minnesota medical association, the Minnesota
nurses association, and others; a representative of the health
technology advisory committee; employers; consumers; and medical
researchers. The task force shall include representation of
rural areas in the state.
Sec. 11. [PREPAID MEDICAL ASSISTANCE PLAN STUDY.]
The commissioners of health and human services shall study
the coordination between health care reform and the prepaid
medical assistance plan. The study must also determine whether
there have been cost savings, cost increases, or cost shifting
under current implementation of the prepaid medical assistance
plan. The commissioners shall jointly report their findings to
the legislature by January 1, 1995.
Sec. 12. [EFFECTIVE DATE.]
Sections 1 to 11 are effective the day following final
enactment.
ARTICLE 6
UNIVERSAL COVERAGE
Section 1. [62Q.165] [UNIVERSAL COVERAGE.]
It is the commitment of the state to achieve universal
health coverage for all Minnesotans by July 1, 1997. In order
to achieve this commitment, the following goals must be met:
(1) every Minnesotan shall have health coverage and shall
contribute to the costs of coverage based on ability to pay;
(2) no Minnesotan shall be denied coverage or forced to pay
more because of health status;
(3) quality health care services must be accessible to all
Minnesotans;
(4) all health care purchasers must be placed on an equal
footing in the health care marketplace; and
(5) a comprehensive and affordable health plan must be
available to all Minnesotans.
Sec. 2. [62Q.17] [VOLUNTARY PURCHASING POOLS.]
Subdivision 1. [PERMISSION TO FORM.] Notwithstanding
section 62A.10, employers, groups, and individuals may
voluntarily form purchasing pools, solely for the purpose of
negotiating and purchasing health plan coverage from health plan
companies for members of the pool.
Subd. 2. [COMMON FACTORS.] All participants in a
purchasing pool must live within a common geographic region, be
employed in a similar occupation, or share some common factor as
approved by the commissioner.
Subd. 3. [GOVERNING STRUCTURE.] Each pool must have a
governing structure controlled by its members. The governing
structure of the pool is responsible for administration of the
pool. The governing structure shall review and evaluate all
bids for coverage from health plan companies, shall determine
criteria for joining and leaving the pool, and may design
incentives for healthy lifestyles and health promotion programs.
The governing structure may design uniform entrance standards
for all employers, except small employers as defined under
section 62L.02. Small employers must be permitted to enter any
pool if the small employer meets the pool's membership
requirements. Pools must provide as much choice in health plans
to members as is financially possible. The governing structure
may charge all members a fee for administrative purposes.
Subd. 4. [ENROLLMENT.] Pools must have an annual open
enrollment period of not less than 15 days, during which all
individuals or groups that qualify for membership may enter the
pool without any preexisting condition limitations or exclusions
or exclusionary riders, except those permitted under chapter 62L
for groups or section 62A.65 for individuals. Pools must reach
and maintain an enrolled population of at least 1,000 members
within six months of formation. If a pool fails to reach or
maintain the minimum enrollment, all coverage subsequently
purchased through the purchasing pool must be regulated through
existing applicable laws and forego all advantages under this
section.
Subd. 5. [MEMBERS.] The governing structure of the pool
shall set a minimum time period for membership. Members must
stay in the purchasing pool for the entire minimum period to
avoid paying a penalty. Penalties for early withdrawal from the
purchasing pool shall be established by the governing structure.
Subd. 6. [EMPLOYER-BASED PURCHASING POOLS.] Employer-based
purchasing pools must, with respect to small employers as
defined in section 62L.02, meet all the requirements of chapter
62L. The experience of the pool must be pooled and the rates
blended across all groups. Pools may decide to create tiers
within the pool, based on experience of group members. These
tiers must be designed within the requirements of section
62L.08. The governing structure may establish criteria limiting
movement between tiers. Tiers must be phased out within two
years of the pool's creation.
Subd. 7. [INDIVIDUAL MEMBERS.] Purchasing pools that
contain individual members must meet all of the underwriting and
rate restrictions found in the individual health plan market.
Subd. 8. [REPORTS.] Prior to the initial effective date of
coverage, and annually thereafter, each pool shall file a report
with the information clearinghouse. The information
clearinghouse must use the report to promote the purchasing
pools. The annual report must contain the following information:
(1) the number of lives in the pool;
(2) the geographic area the pool intends to cover;
(3) the number of health plans offered;
(4) a description of the benefits under each plan;
(5) a description of the premium structure, including any
copayments or deductibles, of each plan offered;
(6) evidence of compliance with chapter 62L;
(7) a sample of marketing information, including a phone
number where the pool may be contacted; and
(8) a list of all administrative fees charged.
Sec. 3. [62Q.18] [UNIVERSAL COVERAGE; INSURANCE REFORMS.]
Subdivision 1. [DEFINITION.] For purposes of this section,
(1) "continuous coverage" has the meaning given in section
62L.02;
(2) "guaranteed issue" means:
(i) for individual health plans, that a health plan company
shall not decline an application by an individual for any
individual health plan offered by that health plan company,
including coverage for a dependent of the individual to whom the
health plan has been or would be issued; and
(ii) for group health plans, that a health plan company
shall not decline an application by a group for any group health
plan offered by that health plan company and shall not decline
to cover under the group health plan any person eligible for
coverage under the group's eligibility requirements, including
persons who become eligible after initial issuance of the group
health plan;
(3) "qualifying coverage" has the meaning given in section
62L.02; and
(4) "underwriting restrictions" has the meaning given in
section 62L.03, subdivision 4.
Subd. 2. [INDIVIDUAL MANDATE.] Effective July 1, 1997,
each Minnesota resident shall obtain and maintain qualifying
coverage.
Subd. 3. [GUARANTEED ISSUE.] (a) Effective July 1, 1997,
each health plan company shall offer, sell, issue, or renew each
of its individual health plan forms on a guaranteed issue basis
to any Minnesota resident.
(b) Effective July 1, 1997, each health plan company shall
offer, sell, issue, or renew each of its group health plan forms
to any employer that has its principal place of business in this
state on a guaranteed issue basis, provided that the guaranteed
issue requirement does not apply to employees, dependents, or
other persons to be covered, who are not residents of this state.
Subd. 4. [UNDERWRITING RESTRICTIONS LIMITED.] Effective
July 1, 1997, no health plan company shall offer, sell, issue,
or renew a health plan that has underwriting restrictions that
apply to a Minnesota resident, except as expressly permitted
under this section.
Subd. 5. [PREEXISTING CONDITION LIMITATIONS.] Effective
July 1, 1997, no health plan company shall offer, sell, issue,
or renew a health plan that contains a preexisting condition
limitation or exclusion or exclusionary rider that applies to a
Minnesota resident, except a limitation which is no longer than
12 months and applies only to a person who has not maintained
continuous coverage. An unexpired preexisting condition
limitation from previous qualifying coverage may be carried over
to new coverage under a health plan, if the unexpired condition
is one permitted under this section. A Minnesota resident who
has not maintained continuous coverage may be subjected to a new
12-month preexisting condition limitation after each break in
continuous coverage.
Subd. 6. [LIMITS ON PREMIUM RATE VARIATIONS.] (a)
Effective July 1, 1995, the premium rate variations permitted
under sections 62A.65 and 62L.08 become:
(1) for factors other than age and geography, 12.5 percent
of the index rate; and
(2) for age, 25 percent of the index rate.
(b) Effective July 1, 1996, the premium variations
permitted under sections 62A.65 and 62L.08 become:
(1) for factors other than age and geography, 7.5 percent
of the index rate; and
(2) for age, 15 percent of the index rate.
(c) Effective July 1, 1997, no health plan company shall
offer, sell, issue, or renew a health plan, that is subject to
section 62A.65 or 62L.08, for which the premium rate varies
between covered persons on the basis of any factor other than:
(1) for individual health plans, differences in benefits or
benefit design, and for group health plans, actuarially valid
differences in benefits or benefit design;
(2) the number of persons to be covered by the health plan;
(3) actuarially valid differences in expected costs between
adults and children;
(4) healthy lifestyle discounts authorized by statute; and
(5) for individual health plans, geographic variations
permitted under section 62A.65, and for group health plans,
geographic variations permitted under section 62L.08.
(d) All premium rate variations permitted under paragraph
(c) are subject to the approval of the commissioner.
(e) Notwithstanding paragraphs (a), (b), and (c), no health
plan company shall renew any individual or group health plan,
except in compliance with this paragraph. No premium rate for
any policy holder or contract holder shall increase or decrease
upon renewal, as a result of this subdivision, by more than 15
percent per year. The increase or decrease described in this
paragraph is in addition to any premium increase or decrease
caused by legally permissible factors other than this
subdivision. If a premium increase or decrease is constrained
by this paragraph, the health plan company may implement the
remaining portion of the increase or decrease at the time of
subsequent annual renewals, but never to exceed 15 percent per
year for paragraphs (a), (b), and (c) combined.
Subd. 7. [PORTABILITY OF COVERAGE.] (a) Effective July 1,
1997, no health plan company shall offer, sell, issue, or renew
any group or individual health plan that does not provide for
guaranteed issue, with full credit for previous qualifying
coverage against any preexisting condition limitation that would
otherwise apply under subdivision 5. No health plan shall be
subject to any other type of underwriting restriction.
(b) Effective July 1, 1995, no health plan company shall
offer, sell, issue, or renew any group or individual health plan
that does not, with respect to individuals who maintain
continuous coverage and whose immediately preceding qualifying
coverage is a health plan issued by medical assistance under
chapter 256B, general assistance medical care under chapter
256D, or the MinnesotaCare plan established under section
256.9352,
(1) make coverage available on a guaranteed issue basis;
and
(2) give full credit for previous continuous coverage
against any applicable preexisting condition limitation or
exclusion.
(c) Paragraph (b) applies to individuals whose immediately
preceding qualifying coverage is medical assistance under
chapter 256B, general assistance medical care under chapter
256D, or the MinnesotaCare plan established under section
256.9352, only if the individual has disenrolled from the public
program or will disenroll upon issuance of the new coverage.
Paragraph (b) does not apply if the public program uses or will
use public funds to pay the premiums for an individual who
remains or will remain enrolled in the public program. No
public funds may be used to purchase private coverage available
under this paragraph. This paragraph does not prohibit public
payment of premiums to continue private sector coverage
originally obtained prior to enrollment in the public program,
where otherwise permitted by state or federal law. Portability
coverage under this paragraph is subject to the provisions of
section 62A.65, subdivision 5, clause (b).
(d) Effective July 1, 1994, no health plan company shall
offer, sell, issue, or renew any group health plan that does
not, with respect to individuals who maintain continuous
coverage:
(1) make coverage available on a guaranteed issue basis;
and
(2) give full credit for previous continuous coverage
against any applicable preexisting condition limitation or
exclusion.
To the extent that this paragraph conflicts with chapter
62L, with respect to small employers as defined in section
62L.02, chapter 62L governs.
Subd. 8. [COMPREHENSIVE HEALTH ASSOCIATION.] Effective
July 1, 1997, the comprehensive health association created in
section 62E.10 shall not accept new applicants for enrollment,
except for medicare-related coverage described in section 62E.12
and for coverage described in section 62E.18.
Subd. 9. [CONTINGENCY; FUTURE LEGISLATION.] This section,
except for subdivision 7, paragraphs (b), (c), and (d), is not
intended to be implemented prior to legislation enacted to
achieve the objectives of sections 1, 5, 6, and 7. Subdivision
6 is not effective until an effective date is specified in 1995
legislation.
Sec. 4. [MARKET REFORM STRATEGIES STUDY.]
The health care commission shall study and recommend to the
legislature by January 1, 1995, insurance market reforms
designed to promote the formation of large purchasing pools to
be available to individuals and small employers by July 1,
1997. The health care commission shall study:
(1) integrating workers' compensation and the medical
component of automobile no-fault coverage with coverage
purchased through a purchasing pool;
(2) integrating public and private sector financing
mechanisms to extend MinnesotaCare subsidies to employees and
dependents who are eligible for employer-based coverage without
eroding existing coverage;
(3) requiring purchasing pools to make available to
consumers all plans that submit bids to the pool;
(4) whether some or all purchasers should be required to
obtain coverage through a public or private pool;
(5) the impact and effectiveness of the Minnesota employees
insurance program under section 43A.317 and the public employees
insurance plan under section 43A.316; and
(6) how statewide or regional purchasing pools could be
developed for all individuals and small groups that do not have
access to a private purchasing pool, and for the MinnesotaCare
program and other state-subsidized health care programs, by
expanding the Minnesota employees insurance program currently
operated by the department of employee relations or by other
means.
Sec. 5. [SURVEY OF THE UNINSURED AND EVALUATION OF
EXISTING REFORMS.]
Subdivision 1. [SURVEY.] The Minnesota health care
commission shall authorize a survey of Minnesota households and
employers to provide current data on the uninsured population
and assess the effectiveness of the existing health care
reforms. As part of this survey, the commissioner of human
services shall conduct a survey of the MinnesotaCare population
to determine the effects of existing health care reforms on this
population. Results of this survey shall be presented to the
legislature by January 15, 1995.
Subd. 2. [EVALUATION.] The commissioner of health, in
consultation with the health care commission and the
commissioners of human services and commerce, shall evaluate the
effect of existing reforms and the effect of the MinnesotaCare
program on the uninsured population. Based on this evaluation,
the commissioners of health, commerce, and human services shall
recommend modifications to existing reforms as necessary to
continue to make progress toward universal coverage by 1997 and
report these modifications to the legislature by January 15,
1996.
Sec. 6. [HEALTH CARE AFFORDABILITY STUDY.]
(a) The commissioner of health, in consultation with the
commissioners of human services, commerce, and revenue, shall
study and report to the Minnesota health care commission by
October 1, 1994, the various factors that affect health care
affordability, including out-of-pocket spending, insurance
premiums, and taxes.
(b) Based on the study in paragraph (a), the Minnesota
health care commission shall recommend to the legislature by
January 15, 1995, a specific percentage of income that overall
health care costs to a family or individual should not exceed.
(c) The recommendations in paragraph (b) must be used by
the commissioners of health and human services to develop an
appropriate premium subsidy and sliding fee scale for a
permanent health care subsidy program.
Sec. 7. [FINANCING STUDY.]
The Minnesota health care commission, in consultation with
the commissioners of health, commerce, human services, and
revenue, and representatives of county government shall report
to the legislature by January 1, 1995, with an implementation
schedule and plan for a stable, long-term health care funding
system for all government health programs. The report must
include recommendations for overhauling the current system,
specific financing methods, and detailed cost estimates for an
expanded, fully-funded subsidy program to guarantee universal
coverage to all Minnesota residents. The report must include an
inventory and analysis of the existing system of government
financing of health care. It must include recommendations for
capturing savings that will accrue under health care reform and
reallocating them to offset additional costs of universal
coverage. The commission may contract for actuarial, finance,
and taxation expertise.
The study must take into account the following goals and
guiding principles:
(a) To the extent possible, universal coverage should be
achieved without a net increase in total health spending, taxes,
or government spending by recapturing savings and reallocating
resources within the system.
(b) To the extent that universal coverage will require
additional funding, revenues may be raised by reducing other
general fund spending or through a variety of funding options,
including broad-based taxes such as income or payroll, as long
as they can be adjusted to provide appropriate offsets for
low-income individuals. Taxing items that are considered to be
health risks and contribute to preventable illness and injury
shall be considered as a possible funding source.
(c) Financing reform should ensure adequate and equitable
financing of all necessary components of the health system.
(d) Activities that benefit the entire community, such as
core public health activities, including collection of data on
health status and community health needs, and medical education
should be financed by broad-based funding sources. Funding
mechanisms should promote collaboration between the public and
private sectors.
(e) Personal health care services for individuals who are
enrolled in a health plan should be provided or paid for by the
health plan.
(f) Government subsidy programs for low-income Minnesotans
should be financed by broad-based funding sources.
(g) Funding mechanisms that are inequitable or create
undesirable incentives, such as the Minnesota comprehensive
health association assessment, should be restructured.
Sec. 8. [PREEXISTING CONDITIONS STUDY.]
The health care commission shall study the feasibility and
impact of the following:
(1) eliminating preexisting condition limitations in steps;
(2) standardizing preexisting condition limitations;
(3) narrowing the preexisting condition limitation period
from 12 months to six months; and
(4) requiring limited coverage of services for preexisting
conditions.
The health care commission shall provide a written report
to the legislature on or before December 15, 1994.
Sec. 9. [REQUIRED OFFER OF INDIVIDUAL HEALTH PLANS.]
The health care commission shall study the effects and
desirability of the requirement that all health plan companies
offer individual health plans. The health care commission shall
provide a written report, including recommendations on
implementation, to the legislature on or before December 15,
1994.
Sec. 10. [EFFECTIVE DATE.]
Sections 1 and 4 to 9 are effective the day following final
enactment. Sections 2 and 3 are effective July 1, 1994.
ARTICLE 7
PUBLIC HEALTH
Section 1. [62Q.075] [LOCAL PUBLIC ACCOUNTABILITY AND
COLLABORATION PLAN.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"managed care organization" means a health maintenance
organization, community integrated service network, or
integrated service network.
Subd. 2. [REQUIREMENT.] Beginning July 1, 1995, all
managed care organizations shall annually file with the action
plans required under section 62Q.07 a plan describing the
actions the managed care organization has taken and those it
intends to take to contribute to achieving public health goals
for each service area in which an enrollee of the managed care
organization resides. This plan must be jointly developed in
collaboration with the local public health units, appropriate
regional coordinating boards, and other community organizations
providing health services within the same service area as the
managed care organization. Local government units with
responsibilities and authority defined under chapters 145A and
256E may designate individuals to participate in the
collaborative planning with the managed care organization to
provide expertise and represent community needs and goals as
identified under chapters 145A and 256E.
Subd. 3. [CONTENTS.] The plan must address the following:
(a) specific measurement strategies and a description of
any activities which contribute to public health goals and needs
of high risk and special needs populations as defined and
developed under chapters 145A and 256E;
(b) description of the process by which the managed care
organization will coordinate its activities with the community
health boards, regional coordinating boards, and other relevant
community organizations servicing the same area;
(c) documentation indicating that local public health units
and local government unit designees were involved in the
development of the plan;
(d) documentation of compliance with the plan filed the
previous year, including data on the previously identified
progress measures.
Subd. 4. [REVIEW.] Upon receipt of the plan, the
appropriate commissioner shall provide a copy to the regional
coordinating boards, local community health boards, and other
relevant community organizations within the managed care
organization's service area. After reviewing the plan, these
community groups may submit written comments on the plan to
either the commissioner of health or commerce, as applicable,
and may advise the commissioner of the managed care
organization's effectiveness in assisting to achieve regional
public health goals. The plan may be reviewed by the county
boards, or city councils acting as a local board of health in
accordance with chapter 145A, within the managed care
organization's service area to determine whether the plan is
consistent with the goals and objectives of the plans required
under chapters 145A and 256E and whether the plan meets the
needs of the community. The county board, or applicable city
council, may also review and make recommendations on the
availability and accessibility of services provided by the
managed care organization. The county board, or applicable city
council, may submit written comments to the appropriate
commissioner, and may advise the commissioner of the managed
care organization's effectiveness in assisting to meet the needs
and goals as defined under the responsibilities of chapters 145A
and 256E. Copies of these written comments must be provided to
the managed care organization. The plan and any comments
submitted must be filed with the information clearinghouse to be
distributed to the public.
Sec. 2. [62Q.32] [LOCAL OMBUDSPERSON.]
County board or community health service agencies may
establish an office of ombudsperson to provide a system of
consumer advocacy for persons receiving health care services
through a health plan company. The ombudsperson's functions may
include, but are not limited to:
(a) mediation or advocacy on behalf of a person accessing
the complaint and appeal procedures to ensure that necessary
medical services are provided by the health plan company; and
(b) investigation of the quality of services provided to a
person and determine the extent to which quality assurance
mechanisms are needed or any other system change may be needed.
Sec. 3. [62Q.33] [LOCAL GOVERNMENT PUBLIC HEALTH
FUNCTIONS.]
Subdivision 1. [FINDINGS.] The legislature finds that the
local government public health functions of community
assessment, policy development, and assurance of service
delivery are essential elements in consumer protection and in
achieving the objectives of health care reform in Minnesota.
The legislature further finds that the site-based and
population-based services provided by state and local health
departments are a critical strategy for the long-term
containment of health care costs. The legislature further finds
that without adequate resources, the local government public
health system will lack the capacity to fulfill these functions
in a manner consistent with the needs of a reformed health care
delivery system.
Subd. 2. [REPORT ON SYSTEM DEVELOPMENT.] The commissioner
of health, in consultation with the state community health
services advisory committee and the commissioner of human
services, and representatives of local health departments,
county government, a municipal government acting as a local
board of health, the Minnesota health care commission, area
Indian health services, health care providers, and citizens
concerned about public health, shall coordinate the process for
defining implementation and financing responsibilities of the
local government core public health functions. The commissioner
shall submit recommendations and an initial and final report on
local government core public health functions according to the
timeline established in subdivision 5.
Subd. 3. [CORE PUBLIC HEALTH FUNCTIONS.] (a) The report
required by subdivision 2 must describe the local government
core public health functions of: assessment of community health
needs; goal-determination, public policy, and program
development for addressing these needs; and assurance of service
availability and accessibility to meet community health goals
and needs. The report must further describe activities for
implementation of these functions that are the continuing
responsibility of the local government public health system,
taking into account the ongoing reform of the health care
delivery system.
(b) The activities to be defined in terms of the local
government core public health functions include, but are not
limited to:
(1) consumer protection and advocacy;
(2) targeted outreach and linkage to personal services;
(3) health status monitoring and disease surveillance;
(4) investigation and control of diseases and injuries;
(5) protection of the environment, work places, housing,
food, and water;
(6) laboratory services to support disease control and
environmental protection;
(7) health education and information;
(8) community mobilization for health-related issues;
(9) training and education of public health professionals;
(10) public health leadership and administration;
(11) emergency medical services;
(12) violence prevention; and
(13) other activities that have the potential to improve
the health of the population or special needs populations and
reduce the need for or cost of health care services.
Subd. 4. [CAPACITY BUILDING, ACCOUNTABILITY AND
FUNDING.] The recommendations required by subdivision 2 shall
include:
(1) a definition of minimum outcomes for implementing core
public health functions, including a local ombudsperson under
the assurance of services function;
(2) the identification of counties and applicable cities
with public health programs that need additional assistance to
meet the minimum outcomes;
(3) a budget for supporting all functions needed to achieve
the minimum outcomes, including the local ombudsperson assurance
of services function;
(4) an analysis of the costs and benefits expected from
achieving the minimum outcomes;
(5) strategies for improving local government public health
functions throughout the state to meet the minimum outcomes
including: (i) funding distribution for local government public
health functions necessary to meet the minimum outcomes; and (ii)
strategies for the financing of personal health care services
within the uniform benefits set and identifying appropriate
mechanisms for the delivery of these services; and
(6) a recommended level of dedicated funding for local
government public health functions in terms of a percentage of
total health service expenditures by the state or in terms of a
per capita basis, including methods of allocating the dedicated
funds to local government.
Subd. 5. [TIMELINE.] (a) By October 1, 1994, the
commissioner shall submit to the legislative commission on
health care access the initial report and recommendations
required by subdivisions 2 to 4.
(b) By February 15, 1995, the commissioner, in cooperation
with the legislative commission on health care access, shall
submit a final report to the legislature, with specific
recommendations for capacity building and financing to be
implemented over the period from January 1, 1996, through
December 31, 1997.
(c) By January 1, 1997, and by January 1 of each
odd-numbered year thereafter, the commissioner shall present to
the legislature an updated report and recommendations.
Sec. 4. [PUBLIC HEALTH GOALS REPORT.]
The commissioner of health shall provide a written report
to the legislature by January 1, 1996, of recommendations on how
providers and payers participating in the regulated all-payer
option shall participate in achieving public health goals.
Sec. 5. [EFFECTIVE DATE.]
Sections 1 to 4 are effective the day following final
enactment.
ARTICLE 8
CONFORMING AND MISCELLANEOUS CHANGES
Section 1. Minnesota Statutes 1992, section 60A.02,
subdivision 3, is amended to read:
Subd. 3. [INSURANCE.] (a) "Insurance" is any agreement
whereby one party, for a consideration, undertakes to indemnify
another to a specified amount against loss or damage from
specified causes, or to do some act of value to the assured in
case of such loss or damage. A program of self-insurance,
self-insurance revolving fund or pool established under section
471.981 is not insurance for purposes of this subdivision.
(b) Notwithstanding paragraph (a), capitation payments to a
capitated entity by an employer that maintains a program of
self-insurance described in this paragraph, do not constitute
insurance with respect to the receipt of the payments. The
payments are not premium revenues for the purpose of calculating
liability for otherwise applicable state taxes, assessments, or
surcharges, with the exception of:
(1) the MinnesotaCare provider tax;
(2) the one percent premium tax imposed in section 60A.15,
subdivision 1, paragraph (d); and
(3) effective July 1, 1995, assessments by the Minnesota
comprehensive health association.
This paragraph applies only where:
(1) the capitated entity does not bear risk in excess of
110 percent of the self-insurance program's expected costs;
(2) the employer does not carry stop loss, excess loss, or
similar coverage with an attachment point lower than 120 percent
of the self-insurance program's expected costs;
(3) the capitated entity and the employer comply with the
data submission and administrative simplification provisions of
chapter 62J;
(4) the capitated entity and the employer comply with the
provider tax pass-through provisions of section 295.582;
(5) the capitated entity's required minimum reserves
reflect the risk borne by the capitated entity under this
paragraph, with an appropriate adjustment for the 110 percent
limit on risk borne by the capitated entity;
(6) on or after July 1, 1994, but prior to January 1, 1995,
the employer has at least 1,500 current employees, as defined in
section 62L.02, or, on or after January 1, 1995, the employer
has at least 750 current employees, as defined in section
62L.02;
(7) the employer does not exclude any eligible employees or
their dependents, both as defined in section 62L.02, from
coverage offered by the employer, under this paragraph or any
other health coverage, insured or self-insured, offered by the
employer, on the basis of the health status or health history of
the person. For purposes of this subdivision, a capitated
entity must be licensed as a health maintenance organization,
integrated service network, or community integrated service
network, or must be a preferred provider organization. For
purposes of this section, a preferred provider organization is a
health plan company that contracts with providers to provide
health care to its enrollees. All other insurance as defined in
paragraph (a), even if maintained by an employer that also
offers programs of self-insurance, continues to be subject to
all applicable state regulations.
This paragraph expires December 31, 1997.
Sec. 2. Minnesota Statutes 1992, section 60A.15,
subdivision 1, is amended to read:
Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or
before April 1, June 1, and December 1 of each year, every
domestic and foreign company, including town and farmers' mutual
insurance companies, domestic mutual insurance companies, marine
insurance companies, health maintenance
organizations, integrated service networks, community integrated
service networks, and nonprofit health service plan
corporations, shall pay to the commissioner of revenue
installments equal to one-third of the insurer's total estimated
tax for the current year. Except as provided in paragraphs (b)
and (e), installments must be based on a sum equal to two
percent of the premiums described in paragraph (c).
(b) For town and farmers' mutual insurance companies and
mutual property and casualty insurance companies other than
those (i) writing life insurance, or (ii) whose total assets on
December 31, 1989, exceeded $1,600,000,000, the installments
must be based on an amount equal to the following percentages of
the premiums described in paragraph (c):
(1) for premiums paid after December 31, 1988, and before
January 1, 1992, one percent; and
(2) for premiums paid after December 31, 1991, one-half of
one percent.
(c) Installments under paragraph (a), (b), or (e) are
percentages of gross premiums less return premiums on all direct
business received by the insurer in this state, or by its agents
for it, in cash or otherwise, during such year.
(d) Failure of a company to make payments of at least
one-third of either (1) the total tax paid during the previous
calendar year or (2) 80 percent of the actual tax for the
current calendar year shall subject the company to the penalty
and interest provided in this section, unless the total tax for
the current tax year is $500 or less.
(e) For health maintenance organizations and, nonprofit
health services plan corporations, integrated service networks,
and community integrated service networks, the installments must
be based on an amount equal to one percent of premiums described
in paragraph (c) that are paid after December 31, 1995.
(f) Premiums under the children's health plan medical
assistance, the health right plan MinnesotaCare program, and the
Minnesota comprehensive health insurance plan are not subject to
tax under this section.
Sec. 3. Minnesota Statutes 1993 Supplement, section
61B.20, subdivision 13, is amended to read:
Subd. 13. [MEMBER INSURER.] "Member insurer" means an
insurer licensed or holding a certificate of authority to
transact in this state any kind of insurance for which coverage
is provided under section 61B.19, subdivision 2, and includes an
insurer whose license or certificate of authority in this state
may have been suspended, revoked, not renewed, or voluntarily
withdrawn. The term does not include:
(1) a nonprofit hospital or medical service organization,
other than a nonprofit health service plan corporation that
operates under chapter 62C;
(2) a health maintenance organization;
(3) a fraternal benefit society;
(4) a mandatory state pooling plan;
(5) a mutual assessment company or an entity that operates
on an assessment basis;
(6) an insurance exchange; or
(7) an integrated service network or a community integrated
service network; or
(8) an entity similar to those listed in clauses (1) to
(6) (7).
Sec. 4. Minnesota Statutes 1992, section 62A.48,
subdivision 1, is amended to read:
Subdivision 1. [POLICY REQUIREMENTS.] No individual or
group policy, certificate, subscriber contract, or other
evidence of coverage of nursing home care or other long-term
care services shall be offered, issued, delivered, or renewed in
this state, whether or not the policy is issued in this state,
unless the policy is offered, issued, delivered, or renewed by a
qualified insurer and the policy satisfies the requirements of
sections 62A.46 to 62A.56. A long-term care policy must cover
prescribed long-term care in nursing facilities and at least the
prescribed long-term home care services in section 62A.46,
subdivision 4, clauses (1) to (5), provided by a home health
agency. Coverage under a long-term care policy AA must
include: a maximum lifetime benefit limit of at least $100,000
for services, and nursing facility and home care coverages must
not be subject to separate lifetime maximums. Coverage under a
long-term care policy A must include: a maximum lifetime
benefit limit of at least $50,000 for services, and nursing
facility and home care coverages must not be subject to separate
lifetime maximums. Prior hospitalization may not be required
under a long-term care policy.
Coverage under either policy designation must cover
preexisting conditions during the first six months of coverage
if the insured was not diagnosed or treated for the particular
condition during the 90 days immediately preceding the effective
date of coverage. Coverage under either policy designation may
include a waiting period of up to 90 days before benefits are
paid, but there must be no more than one waiting period per
benefit period; for purposes of this sentence, "days" means
calendar days. No policy may exclude coverage for mental or
nervous disorders which have a demonstrable organic cause, such
as Alzheimer's and related dementias. No policy may require the
insured to be homebound or house confined to receive home care
services. The policy must include a provision that the plan
will not be canceled or renewal refused except on the grounds of
nonpayment of the premium, provided that the insurer may change
the premium rate on a class basis on any policy anniversary
date. A provision that the policyholder may elect to have the
premium paid in full at age 65 by payment of a higher premium up
to age 65 may be offered. A provision that the premium would be
waived during any period in which benefits are being paid to the
insured during confinement in a nursing facility must be
included. A nongroup policyholder may return a policy within 30
days of its delivery and have the premium refunded in full, less
any benefits paid under the policy, if the policyholder is not
satisfied for any reason.
No individual long-term care policy shall be offered or
delivered in this state until the insurer has received from the
insured a written designation of at least one person, in
addition to the insured, who is to receive notice of
cancellation of the policy for nonpayment of premium. The
insured has the right to designate up to a total of three
persons who are to receive the notice of cancellation, in
addition to the insured. The form used for the written
designation must inform the insured that designation of one
person is required and that designation of up to two additional
persons is optional and must provide space clearly designated
for listing between one and three persons. The designation
shall include each person's full name, home address, and
telephone number. Each time an individual policy is renewed or
continued, the insurer shall notify the insured of the right to
change this written designation.
The insurer may file a policy form that utilizes a plan of
care prepared as provided under section 62A.46, subdivision 5,
clause (1) or (2).
Sec. 5. Minnesota Statutes 1992, section 62D.02,
subdivision 4, is amended to read:
Subd. 4. (a) "Health maintenance organization" means a
nonprofit corporation organized under chapter 317A, or a local
governmental unit as defined in subdivision 11, controlled and
operated as provided in sections 62D.01 to 62D.30, which
provides, either directly or through arrangements with providers
or other persons, comprehensive health maintenance services, or
arranges for the provision of these services, to enrollees on
the basis of a fixed prepaid sum without regard to the frequency
or extent of services furnished to any particular enrollee.
(b) Notwithstanding paragraph (a), an organization licensed
as a health maintenance organization that accepts payments for
health care services on a capitated basis, or under another
similar risk sharing agreement, from a program of self-insurance
as described in section 60A.02, subdivision 3, paragraph (b),
shall not be regulated as a health maintenance organization with
respect to the receipt of the payments. The payments are not
premium revenues for the purpose of calculating the health
maintenance organization's liability for otherwise applicable
state taxes, assessments, or surcharges, with the exception of:
(1) the MinnesotaCare provider tax;
(2) the one percent premium tax imposed in section 60A.15,
subdivision 1, paragraph (d); and
(3) effective July 1, 1995, assessments by the Minnesota
comprehensive health association.
This paragraph applies only where:
(1) the health maintenance organization does not bear risk
in excess of 110 percent of the self-insurance program's
expected costs;
(2) the employer does not carry stop loss, excess loss, or
similar coverage with an attachment point lower than 120 percent
of the self-insurance program's expected costs;
(3) the health maintenance organization and the employer
comply with the data submission and administrative
simplification provisions of chapter 62J;
(4) the health maintenance organization and the employer
comply with the provider tax pass-through provisions of section
295.582;
(5) the health maintenance organization's required minimum
reserves reflect the risk borne by the health maintenance
organization under this paragraph, with an appropriate
adjustment for the 110 percent limit on risk borne by the
community network;
(6) on or after July 1, 1994, but prior to January 1, 1995,
the employer has at least 1,500 current employees, as defined in
section 62L.02, or, on or after January 1, 1995, the employer
has at least 750 current employees, as defined in section
62L.02;
(7) the employer does not exclude any eligible employees or
their dependents, both as defined in section 62L.02, from
coverage offered by the employer, under this paragraph or any
other health coverage, insured or self-insured, offered by the
employer, on the basis of the health status or health history of
the person.
This paragraph expires December 31, 1997.
Sec. 6. Minnesota Statutes 1992, section 62D.04, is
amended by adding a subdivision to read:
Subd. 5. [PARTICIPATION; GOVERNMENT PROGRAMS.] Health
maintenance organizations shall, as a condition of receiving and
retaining a certificate of authority, participate in the medical
assistance, general assistance medical care, and MinnesotaCare
programs. The participation required from health maintenance
organizations shall be pursuant to rules adopted under section
256B.0644.
Sec. 7. Minnesota Statutes 1992, section 62E.02,
subdivision 10, is amended to read:
Subd. 10. [INSURER.] "Insurer" means those companies
operating pursuant to chapter 62A or 62C and offering, selling,
issuing, or renewing policies or contracts of accident and
health insurance. "Insurer" does not include health maintenance
organizations, integrated service networks, or community
integrated service networks.
Sec. 8. Minnesota Statutes 1992, section 62E.02,
subdivision 18, is amended to read:
Subd. 18. [WRITING CARRIER.] "Writing carrier" means the
insurer or insurers and, health maintenance organization or
organizations, integrated service network or networks, and
community integrated service network or networks selected by the
association and approved by the commissioner to administer the
comprehensive health insurance plan.
Sec. 9. Minnesota Statutes 1992, section 62E.02,
subdivision 20, is amended to read:
Subd. 20. [COMPREHENSIVE INSURANCE PLAN OR STATE PLAN.]
"Comprehensive health insurance plan" or "state plan" means
policies of insurance and contracts of health maintenance
organization, integrated service network, or community
integrated service network coverage offered by the association
through the writing carrier.
Sec. 10. Minnesota Statutes 1992, section 62E.02,
subdivision 23, is amended to read:
Subd. 23. [CONTRIBUTING MEMBER.] "Contributing member"
means those companies regulated under chapter 62A and offering,
selling, issuing, or renewing policies or contracts of accident
and health insurance; health maintenance organizations regulated
under chapter 62D; nonprofit health service plan corporations
regulated under chapter 62C; integrated service network and
community integrated service networks regulated under chapter
62N; fraternal benefit societies regulated under chapter 64B;
the private employers insurance program established in section
43A.317, effective July 1, 1993; and joint self-insurance plans
regulated under chapter 62H. For the purposes of determining
liability of contributing members pursuant to section 62E.11
payments received from or on behalf of Minnesota residents for
coverage by a health maintenance organization, integrated
service network, or community integrated service network shall
be considered to be accident and health insurance premiums.
Sec. 11. Minnesota Statutes 1992, section 62E.10,
subdivision 1, is amended to read:
Subdivision 1. [CREATION; TAX EXEMPTION.] There is
established a comprehensive health association to promote the
public health and welfare of the state of Minnesota with
membership consisting of all insurers; self-insurers;
fraternals; joint self-insurance plans regulated under chapter
62H; the private employers insurance program established in
section 43A.317, effective July 1, 1993; and health maintenance
organizations; integrated service networks; and community
integrated service networks licensed or authorized to do
business in this state. The comprehensive health association
shall be exempt from taxation under the laws of this state and
all property owned by the association shall be exempt from
taxation.
Sec. 12. Minnesota Statutes 1992, section 62E.10,
subdivision 2, is amended to read:
Subd. 2. [BOARD OF DIRECTORS; ORGANIZATION.] The board of
directors of the association shall be made up of nine members as
follows: five insurer directors selected by participating
members, subject to approval by the commissioner; four public
directors selected by the commissioner, at least two of whom
must be plan enrollees. Public members may include licensed
insurance agents. In determining voting rights at members'
meetings, each member shall be entitled to vote in person or
proxy. The vote shall be a weighted vote based upon the
member's cost of self-insurance, accident and health insurance
premium, subscriber contract charges, or health maintenance
contract payment, integrated service network, or community
integrated service network payment derived from or on behalf of
Minnesota residents in the previous calendar year, as determined
by the commissioner. In approving directors of the board, the
commissioner shall consider, among other things, whether all
types of members are fairly represented. Insurer directors may
be reimbursed from the money of the association for expenses
incurred by them as directors, but shall not otherwise be
compensated by the association for their services. The costs of
conducting meetings of the association and its board of
directors shall be borne by members of the association.
Sec. 13. Minnesota Statutes 1992, section 62E.10,
subdivision 3, is amended to read:
Subd. 3. [MANDATORY MEMBERSHIP.] All members shall
maintain their membership in the association as a condition of
doing accident and health insurance, self-insurance, or health
maintenance organization, integrated service network, or
community integrated service network business in this state.
The association shall submit its articles, bylaws and operating
rules to the commissioner for approval; provided that the
adoption and amendment of articles, bylaws and operating rules
by the association and the approval by the commissioner thereof
shall be exempt from the provisions of sections 14.001 to 14.69.
Sec. 14. Minnesota Statutes 1993 Supplement, section
62J.03, subdivision 6, is amended to read:
Subd. 6. [GROUP PURCHASER.] "Group purchaser" means a
person or organization that purchases health care services on
behalf of an identified group of persons, regardless of whether
the cost of coverage or services is paid for by the purchaser or
by the persons receiving coverage or services, as further
defined in rules adopted by the commissioner. "Group purchaser"
includes, but is not limited to, integrated service networks;
community integrated service networks; health insurance
companies, health maintenance organizations, nonprofit health
service plan corporations, and other health plan companies;
employee health plans offered by self-insured employers; trusts
established in a collective bargaining agreement under the
federal Labor-Management Relations Act of 1947, United States
Code, title 29, section 141, et seq.; the Minnesota
comprehensive health association; group health coverage offered
by fraternal organizations, professional associations, or other
organizations; state and federal health care programs; state and
local public employee health plans; workers' compensation plans;
and the medical component of automobile insurance coverage.
Sec. 15. Minnesota Statutes 1992, section 62J.03, is
amended by adding a subdivision to read:
Subd. 10. [HEALTH PLAN COMPANY.] "Health plan company"
means a health plan company as defined in section 62Q.01,
subdivision 4.
Sec. 16. Minnesota Statutes 1993 Supplement, section
62J.04, subdivision 1, is amended to read:
Subdivision 1. [LIMITS ON THE RATE OF GROWTH.] (a) The
commissioner of health shall set annual limits on the rate of
growth of public and private spending on health care services
for Minnesota residents, as provided in paragraph (b). The
limits on growth must be set at levels the commissioner
determines to be realistic and achievable but that will reduce
the rate of growth in health care spending by at least ten
percent per year for the next five years. The commissioner
shall set limits on growth based on available data on spending
and growth trends, including data from group purchasers,
national data on public and private sector health care spending
and cost trends, and trend information from other states.
(b) The commissioner shall set the following annual limits
on the rate of growth of public and private spending on health
care services for Minnesota residents:
(1) for calendar year 1994, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1993 plus 6.5 percentage points;
(2) for calendar year 1995, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1994 plus 5.3 percentage points;
(3) for calendar year 1996, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1995 plus 4.3 percentage points;
(4) for calendar year 1997, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1996 plus 3.4 percentage points; and
(5) for calendar year 1998, the rate of growth must not
exceed the change in the regional consumer price index for urban
consumers for calendar year 1997 plus 2.6 percentage points.
If the health care financing administration forecast for
the total growth in national health expenditures for a calendar
year is lower than the rate of growth for the calendar year as
specified in clauses (1) to (5), the commissioner shall adopt
this forecast as the growth limit for that calendar year. The
commissioner shall adjust the growth limit set for calendar year
1995 to recover savings in health care spending required for the
period July 1, 1993 to December 31, 1993. The commissioner
shall publish:
(1) the projected limits in the State Register by April 15
of the year immediately preceding the year in which the limit
will be effective except for the year 1993, in which the limit
shall be published by July 1, 1993;
(2) the quarterly change in the regional consumer price
index for urban consumers; and
(3) the health care financing administration forecast for
total growth in the national health care expenditures. In
setting an annual limit, the commissioner is exempt from the
rulemaking requirements of chapter 14. The commissioner's
decision on an annual limit is not appealable.
Sec. 17. Minnesota Statutes 1993 Supplement, section
62J.04, subdivision 1a, is amended to read:
Subd. 1a. [ADJUSTED GROWTH LIMITS AND ENFORCEMENT.] (a)
The commissioner shall publish the final adjusted growth limit
in the State Register by January 15 31 of the year that the
expenditure limit is to be in effect. The adjusted limit must
reflect the actual regional consumer price index for urban
consumers for the previous calendar year, and may deviate from
the previously published projected growth limits to reflect
differences between the actual regional consumer price index for
urban consumers and the projected Consumer Price Index for urban
consumers. The commissioner shall report to the legislature by
January February 15 of each year on differences between the
projected increase in health care expenditures, the
implementation of growth limits, and the reduction in the trend
in the growth based on the limits imposed the actual
expenditures based on data collected, and the impact and
validity of growth limits within the overall health care reform
strategy.
(b) The commissioner shall enforce limits on growth in
spending and revenues for integrated service networks and for
the regulated all-payer system option. If the commissioner
determines that artificial inflation or padding of costs or
prices has occurred in anticipation of the implementation of
growth limits, the commissioner may adjust the base year
spending totals or growth limits or take other action to reverse
the effect of the artificial inflation or padding.
(c) The commissioner shall impose and enforce overall
limits on growth in revenues and spending for integrated service
networks, with adjustments for changes in enrollment, benefits,
severity, and risks. If an integrated service network exceeds a
spending limit the growth limits, the commissioner may reduce
future limits on growth in aggregate premium revenues for that
integrated service network by up to the amount overspent. If
the integrated service network system exceeds a systemwide
spending limit, the commissioner may reduce future limits on
growth in premium revenues for the integrated service network
system by up to the amount overspent.
(d) The commissioner shall set prices, utilization
controls, and other requirements for the regulated all-payer
system option to ensure that the overall costs of this system,
after adjusting for changes in population, severity, and risk,
do not exceed the growth limits. If spending growth limits for
a calendar year are exceeded, the commissioner may reduce
reimbursement rates or otherwise recoup overspending amounts
exceeding the limit for all or part of the next calendar year,
to recover in savings up to the amount of money overspent. To
the extent possible, the commissioner may reduce reimbursement
rates or otherwise recoup overspending amounts over the limit
from individual providers who exceed the spending growth limits.
(e) The commissioner, in consultation with the Minnesota
health care commission, shall research and make recommendations
to the legislature regarding the implementation of growth limits
for integrated service networks and the regulated all-payer
option. The commissioner must consider both spending and
revenue approaches and will report on the implementation of the
interim limits as defined in sections 62P.04 and 62P.05. The
commissioner must examine and make recommendations on the use of
annual update factors based on volume performance standards as a
mechanism for achieving controls on spending in the all-payer
option. The commissioner must make recommendations regarding
the enforcement mechanism and must consider mechanisms to adjust
future growth limits as well as mechanisms to establish
financial penalties for noncompliance. The commissioner must
also address the feasibility of system-wide limits imposed on
all integrated service networks.
(f) The commissioner shall report to the legislative
commission on health care access by December 1, 1994, on trends
in aggregate spending and premium revenue for health plan
companies. The commissioner shall use data submitted under
section 62P.04 and other available data to complete this report.
Sec. 18. Minnesota Statutes 1992, section 62J.04, is
amended by adding a subdivision to read:
Subd. 9. [GROWTH LIMITS; FEDERAL PROGRAMS.] The
commissioners of health and human services shall establish a
rate methodology for Medicare and Medicaid risk-based
contracting with health plan companies that is consistent with
statewide growth limits. The methodology shall be presented for
review by the Minnesota health care commission and the
legislative commission on health care access prior to the
submission of a waiver request to the health care financing
administration and subsequent implementation of the methodology.
Sec. 19. Minnesota Statutes 1992, section 62J.05,
subdivision 2, is amended to read:
Subd. 2. [MEMBERSHIP.] (a) [NUMBER.] The Minnesota health
care commission consists of 25 27 members, as specified in this
subdivision. A member may designate a representative to act as
a member of the commission in the member's absence. The
governor and legislature shall coordinate appointments under
this subdivision to ensure gender balance and ensure that
geographic areas of the state are represented in proportion to
their population.
(b) [HEALTH PLAN COMPANIES.] The commission includes four
members representing health plan companies, including one member
appointed by the Minnesota Council of Health Maintenance
Organizations, one member appointed by the Insurance Federation
of Minnesota, one member appointed by Blue Cross and Blue Shield
of Minnesota, and one member appointed by the governor.
(c) [HEALTH CARE PROVIDERS.] The commission includes six
members representing health care providers, including one member
appointed by the Minnesota Hospital Association, one member
appointed by the Minnesota Medical Association, one member
appointed by the Minnesota Nurses' Association, one rural
physician appointed by the governor, and two members appointed
by the governor to represent providers other than hospitals,
physicians, and nurses.
(d) [EMPLOYERS.] The commission includes four members
representing employers, including (1) two members appointed by
the Minnesota Chamber of Commerce, including one self-insured
employer and one small employer; and (2) two members appointed
by the governor.
(e) [CONSUMERS.] The commission includes five seven
consumer members, including three members appointed by the
governor, one of whom must represent persons over age 65; one
member appointed by the consortium of citizens with disabilities
to represent consumers with physical disabilities or chronic
illness; one member appointed by the mental health association
of Minnesota, in consultation with the Minnesota chapter of the
society of Americans for recovery, to represent consumers with
mental illness or chemical dependency; one appointed under the
rules of the senate; and one appointed under the rules of the
house of representatives.
(f) [EMPLOYEE UNIONS.] The commission includes three
representatives of labor unions, including two appointed by the
AFL-CIO Minnesota and one appointed by the governor to represent
other unions.
(g) [STATE AGENCIES.] The commission includes the
commissioners of commerce, employee relations, and human
services.
(h) [CHAIR.] The governor shall designate the chair of the
commission from among the governor's appointees.
Sec. 20. [62J.051] [DISTRIBUTION OF HEALTH CARE
TECHNOLOGY, FACILITIES, AND FUNCTIONS; PUBLIC FORUMS.]
The commission may promote and facilitate an open,
voluntary, nonregulatory, and public process for regional and
statewide discussion regarding the appropriate distribution of
health care technologies, facilities, and functions. The
process must include the participation of consumers, employers
and other group purchasers, providers, health plan companies,
and the health care technology industry. The commission shall
ensure opportunities for broadbased public input from other
interested persons and organizations as well. The purpose of
the process is to create an open public forum with the goal of
facilitating collaboration for the distribution of a particular
technology, facility, or function to achieve health reform
goals. Participation in the forums is voluntary and agreements
or distribution plans that may be recommended through this
process are not mandatory or binding on any person or
organization. The recommendations may be considered by the
commissioner of health for purposes of the antitrust exception
process under sections 62J.2911 to 62J.2921, and the process for
reviewing major spending commitments under section 62J.17, but
are not binding on the commissioner. The commission may develop
criteria for selecting specific technologies, facilities, and
functions for discussion and may establish procedures and ground
rules for discussion and the development of recommended
agreements or distribution plans. The commission may appoint
advisory committees to facilitate discussion and planning and
may request that regional coordinating boards serve as or
convene regional public forums.
Sec. 21. Minnesota Statutes 1993 Supplement, section
62J.09, subdivision 1a, is amended to read:
Subd. 1a. [DUTIES RELATED TO COST CONTAINMENT.] (a)
[ALLOCATION OF REGIONAL SPENDING LIMITS.] Regional coordinating
boards may advise the commissioner regarding allocation of
annual regional limits on the rate of growth for providers in
the regulated all-payer system in order to:
(1) achieve communitywide and regional public health goals
consistent with those established by the commissioner; and
(2) promote access to and equitable reimbursement of
preventive and primary care providers.
(b) [TECHNICAL ASSISTANCE.] Regional coordinating boards,
in cooperation with the commissioner, shall provide technical
assistance to parties interested in establishing or operating an
a community integrated service network or integrated service
network within the region. This assistance must complement
assistance provided by the commissioner under section 62N.23.
Sec. 22. Minnesota Statutes 1993 Supplement, section
62J.09, subdivision 2, is amended to read:
Subd. 2. [MEMBERSHIP.] (a) [NUMBER OF MEMBERS.] Each
regional coordinating board consists of 17 members as provided
in this subdivision. A member may designate a representative to
act as a member of the board in the member's absence. The
governor shall appoint the chair of each regional board from
among its members. The appointing authorities under each
paragraph for which there is to be chosen more than one member
shall consult prior to appointments being made to ensure that,
to the extent possible, the board includes a representative from
each county within the region.
(b) [PROVIDER REPRESENTATIVES.] Each regional board must
include four members representing health care providers who
practice in the region. One member is appointed by the
Minnesota Medical Association. One member is appointed by the
Minnesota Hospital Association. One member is appointed by the
Minnesota Nurses' Association. The remaining member is
appointed by the governor to represent providers other than
physicians, hospitals, and nurses.
(c) [HEALTH PLAN COMPANY REPRESENTATIVES.] Each regional
board includes four members representing health plan companies
who provide coverage for residents of the region, including one
member representing health insurers who is elected by a vote of
all health insurers providing coverage in the region, one member
elected by a vote of all health maintenance organizations
providing coverage in the region, and one member appointed by
Blue Cross and Blue Shield of Minnesota. The fourth member is
appointed by the governor.
(d) [EMPLOYER REPRESENTATIVES.] Regional boards include
three members representing employers in the region. Employer
representatives are elected by a vote of the employers who
are appointed by the Minnesota chamber of commerce from
nominations provided by members of chambers of commerce in the
region. At least one member must represent self-insured
employers.
(e) [EMPLOYEE UNIONS.] Regional boards include one member
appointed by the AFL-CIO Minnesota who is a union member
residing or working in the region or who is a representative of
a union that is active in the region.
(f) [PUBLIC MEMBERS.] Regional boards include three
consumer members. One consumer member is elected by the
community health boards in the region, with each community
health board having one vote. One consumer member is elected by
the state legislators with districts in the region. One
consumer member is appointed by the governor.
(g) [COUNTY COMMISSIONER.] Regional boards include one
member who is a county board member. The county board member is
elected by a vote of all of the county board members in the
region, with each county board having one vote.
(h) [STATE AGENCY.] Regional boards include one state
agency commissioner appointed by the governor to represent state
health coverage programs.
Sec. 23. Minnesota Statutes 1993 Supplement, section
62J.23, subdivision 4, is amended to read:
Subd. 4. [INTEGRATED SERVICE CHAPTER 62N NETWORKS.] (a)
The legislature finds that the formation and operation of
integrated service networks and community integrated service
networks will accomplish the purpose of the federal Medicare
antikickback statute, which is to reduce the overutilization and
overcharging that may result from inappropriate provider
incentives. Accordingly, it is the public policy of the state
of Minnesota to support the development of integrated service
networks and community integrated service networks. The
legislature finds that the federal Medicare antikickback laws
should not be interpreted to interfere with the development of
integrated service networks or community integrated service
networks or to impose liability for arrangements between an
integrated service network or a community integrated service
network and its participating entities.
(b) An arrangement between an integrated service network or
a community integrated service network and any or all of its
participating entities is not subject to liability under
subdivisions 1 and 2.
Sec. 24. Minnesota Statutes 1993 Supplement, section
62J.2916, subdivision 2, is amended to read:
Subd. 2. [PROCEDURES AVAILABLE.] (a) [DECISION ON THE
WRITTEN RECORD.] The commissioner may issue a decision based on
the application, the comments, and the applicant's responses to
the comments, to the extent each is relevant. In making the
decision, the commissioner may consult with staff of the
department of health and may rely on department of health data.
(b) [LIMITED HEARING.] (1) The commissioner may order a
limited hearing. A copy of the order must be mailed to the
applicant and to all persons who have submitted comments or
requested to be kept informed of the proceedings involving the
application. The order must state the date, time, and location
of the limited hearing and must identify specific issues to be
addressed at the limited hearing. The issues may include the
feasibility and desirability of one or more alternatives to the
proposed arrangement. The order must require the applicant to
submit written evidence, in the form of affidavits and
supporting documents, addressing the issues identified, within
20 days after the date of the order. The order shall also state
that any person may arrange to receive a copy of the written
evidence from the commissioner, at the person's expense, and may
provide written comments on the evidence within 40 days after
the date of the order. A person providing written comments
shall provide a copy of the comments to the applicant.
(2) The limited hearing must be held before the
commissioner or department of health staff member or members
designated by the commissioner. The commissioner or the
commissioner's designee or designees shall question the
applicant about the evidence submitted by the applicant. The
questions may address relevant issues identified in the comments
submitted in response to the written evidence or identified by
department of health staff or brought to light by department of
health data. At the conclusion of the applicant's responses to
the questions, any person who submitted comments about the
applicant's written evidence may make a statement addressing the
applicant's responses to the questions. The commissioner or the
commissioner's designee or designees may ask questions of any
person making a statement. At the conclusion of all statements,
the applicant may make a closing statement.
(3) The commissioner's decision after a limited hearing
must be based upon the application, the comments, the
applicant's response to the comments, the applicant's written
evidence, the comments in response to the written evidence, and
the information presented at the limited hearing, to the extent
each is relevant. In making the decision, the commissioner may
consult with staff of the department of health and may rely on
department of health data.
(c) [CONTESTED CASE HEARING.] The commissioner may order a
contested case hearing. A contested case hearing shall be tried
before an administrative law judge who shall issue a written
recommendation to the commissioner and shall follow the
procedures in sections 14.57 to 14.62. All factual issues
relevant to a decision must be presented in the contested case.
The attorney general may appear as a party. Additional parties
may appear to the extent permitted under sections 14.57 to
14.62. The record in the contested case includes the
application, the comments, the applicant's response to the
comments, and any other evidence that is part of the record
under sections 14.57 to 14.62.
Sec. 25. Minnesota Statutes 1993 Supplement, section
62J.32, subdivision 4, is amended to read:
Subd. 4. [PRACTICE PARAMETER ADVISORY COMMITTEE.] (a) The
commissioner shall convene a 15-member 17-member practice
parameter advisory committee comprised of eight health care
professionals, and representatives of the research community and
the medical technology industry. One representative of the
research community must be an individual with expertise in
pharmacology or pharmaceutical economics who is familiar with
the results of the pharmaceutical care research project at the
University of Minnesota and the potential cost savings that can
be achieved through use of a comprehensive pharmaceutical care
model. The committee shall present recommendations on the
adoption of practice parameters to the commissioner and the
Minnesota health care commission and provide technical
assistance as needed to the commissioner and the commission.
The advisory committee is governed by section 15.059, except
that its existence does not terminate and members do not receive
per diem compensation.
(b) The commissioner, upon the advice and recommendation of
the practice parameter advisory committee, may convene expert
review panels to assess practice parameters and outcome research
associated with practice parameters.
Sec. 26. Minnesota Statutes 1993 Supplement, section
62J.35, subdivision 2, is amended to read:
Subd. 2. [FAILURE TO PROVIDE DATA.] The intentional
failure to provide the data requested under this chapter is
grounds for revocation of a license or other disciplinary or
regulatory action against a regulated provider or group
purchaser. The commissioner may assess a fine against a
provider or group purchaser who refuses to provide data required
by the commissioner. If a provider or group purchaser refuses
to provide the data required, the commissioner may obtain a
court order requiring the provider or group purchaser to produce
documents and allowing the commissioner to inspect the records
of the provider or group purchaser for purposes of obtaining the
data required.
Sec. 27. Minnesota Statutes 1993 Supplement, section
62J.35, subdivision 3, is amended to read:
Subd. 3. [DATA PRIVACY.] All data received under this
section or under section 62J.04, 62J.37, 62J.38, 62J.41, or
62J.42 is private or nonpublic, as applicable except to the
extent that it is given a different classification elsewhere in
this chapter. The commissioner shall establish procedures and
safeguards to ensure that data released by the commissioner is
in a form that does not identify specific patients, providers,
employers, purchasers, or other specific individuals and
organizations, except with the permission of the affected
individual or organization, or as permitted elsewhere in this
chapter.
Sec. 28. Minnesota Statutes 1993 Supplement, section
62J.38, is amended to read:
62J.38 [DATA FROM GROUP PURCHASERS.]
(a) The commissioner shall require group purchasers to
submit detailed data on total health care spending for calendar
years 1990, 1991, and 1992, and for calendar year 1993 and
successive calendar years. Group purchasers shall submit data
for the 1993 calendar year by February 15 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. Expenditure data, including raw data from claims,
must be provided separately for the following categories:
physician services, dental services, other professional
services, inpatient hospital services, outpatient hospital
services, emergency and out-of-area care, pharmacy services and
prescription drugs, mental health services, chemical dependency
services, other expenditures, subscriber liability, and
administrative costs.
(c) State agencies and all other group purchasers shall
provide the required data using a uniform format and uniform
definitions, as prescribed by the commissioner.
Sec. 29. Minnesota Statutes 1993 Supplement, section
62J.41, subdivision 2, is amended to read:
Subd. 2. [ANNUAL MONITORING AND ESTIMATES.] The
commissioner shall require health care providers to submit the
required data for the period July 1, 1993 to December 31, 1993,
by February 15 April 1, 1994. Health care providers shall
submit data for the 1994 calendar year by February 15 April 1,
1995, and each February 15 April 1 thereafter shall submit data
for the preceding calendar year. The commissioner of revenue
may collect health care service revenue data from health care
providers, if the commissioner of revenue and the commissioner
agree that this is the most efficient method of collecting the
data. The commissioner of revenue shall provide any data
collected to the commissioner of health.
Sec. 30. Minnesota Statutes 1993 Supplement, section
62J.45, subdivision 11, is amended to read:
Subd. 11. [USE OF DATA.] (a) The board of the data
institute, with the advice of the data collection advisory
committee and the practice parameter advisory committee through
the commissioner, is responsible for establishing the
methodology for the collection of the data and is responsible
for providing direction on what data would be useful to the
plans, providers, consumers, and purchasers.
(b) The health care analysis unit is responsible for the
analysis of the data and the development and dissemination of
reports.
(c) The commissioner, in consultation with the board, shall
determine when and under what conditions data disclosure to
group purchasers, health care providers, consumers, researchers,
and other appropriate parties may occur to meet the state's
goals. The commissioner may require users of data to contribute
toward the cost of data collection through the payment of fees.
The commissioner shall require users of data to maintain the
data according to the data privacy provisions applicable to the
data.
(d) The commissioner and the board shall not allow a group
purchaser or health care provider to use or have access to data
collected by the data institute, unless the group purchaser or
health care provider cooperates with the data collection efforts
of the data institute by submitting all data requested in the
form and manner specified by the board. The commissioner and
the board shall prohibit group purchasers and health care
providers from transferring, providing, or sharing data obtained
from the data institute with a group purchaser or health care
provider that does not cooperate with the data collection
efforts of the data institute.
Sec. 31. [62J.47] [MORATORIUM ON MERGERS OR ACQUISITIONS
BY HEALTH CARRIERS.]
Subdivision 1. [DEFINITIONS.] For purposes of this
section, "health carrier" has the meaning given in section
62A.011, subdivision 2.
Subd. 2. [RESTRICTIONS.] Until July 1, 1996, the following
health carriers are prohibited from merging with, or acquiring,
directly or indirectly, any other health carrier:
(1) a health carrier whose number of enrollees residing in
the state in the previous calendar year exceeds five percent of
the total number of insured persons in that year residing in the
state of Minnesota; and
(2) a health carrier whose number of enrollees residing in
the seven-county metropolitan area in the previous calendar year
exceeds ten percent of the total number of insured persons in
that year residing in the seven-county metropolitan area.
Subd. 3. [ENFORCEMENT.] The district court in Ramsey
county has jurisdiction to enjoin an alleged violation of
subdivision 2. The attorney general may bring an action to
enjoin an alleged violation. The commissioner of health or
commerce shall not issue or renew a license or certificate of
authority to any health carrier in violation of subdivision 2.
Subd. 4. [EXCEPTIONS.] This section does not apply to:
(1) any merger or direct or indirect acquisition approved
by the commissioner that is intended to assure continuous
coverage for enrollees and avoid liquidation or insolvency under
chapter 60B;
(2) any merger or direct or indirect acquisition that
develops pursuant to a letter of intent, memorandum of
understanding, or other agreement signed before March 17, 1994;
(3) any merger or direct or indirect acquisition that
develops pursuant to an affiliation for which a letter of
intent, memorandum of understanding, or other agreement was
signed before March 17, 1994; or
(4) any merger or direct or indirect acquisition of health
carriers that are related organizations, as defined in section
317A.011, subdivision 18, as of March 17, 1994.
Sec. 32. [62J.65] [EXEMPTION.]
Patient revenues derived from non-Minnesota patients are
exempt from the regulated all-payer system and Medicare balance
billing prohibition under section 62J.25.
Sec. 33. Minnesota Statutes 1993 Supplement, section
62N.01, is amended to read:
62N.01 [CITATION AND PURPOSE.]
Subdivision 1. [CITATION.] Sections 62N.01 to 62N.24 This
chapter may be cited as the "Minnesota integrated service
network act."
Subd. 2. [PURPOSE.] Sections 62N.01 to 62N.24 allow This
chapter allows the creation of integrated service networks that
will be responsible for arranging for or delivering a full array
of health care services, from routine primary and preventive
care through acute inpatient hospital care, to a defined
population for a fixed price from a purchaser.
Each integrated service network is accountable to keep its
total revenues within the limit of growth set by the
commissioner of health under section 62N.05, subdivision 2.
Integrated service networks can be formed by health care
providers, health maintenance organizations, insurance
companies, employers, or other organizations. Competition
between integrated service networks on the quality and price of
health care services is encouraged.
Sec. 34. Minnesota Statutes 1993 Supplement, section
62N.02, subdivision 1, is amended to read:
Subdivision 1. [APPLICATION.] The definitions in this
section apply to sections 62J.04, subdivision 8, and 62N.01 to
62N.24 this chapter.
Sec. 35. Minnesota Statutes 1993 Supplement, section
62N.065, subdivision 1, is amended to read:
Subdivision 1. [UNREASONABLE EXPENSES.] No integrated
service network shall incur or pay for any expense of any nature
which is unreasonably high in relation to the value of the
service or goods provided. The commissioner shall implement and
enforce this section by rules adopted under this section.
In an effort to achieve the stated purposes of sections
62N.01 to 62N.24 this chapter; in order to safeguard the
underlying nonprofit status of integrated service networks; and
to ensure that payment of integrated service network money to
any person or organization results in a corresponding benefit to
the integrated service network and its enrollees; when
determining whether an integrated service network has incurred
an unreasonable expense in relation to payments made to a person
or organization, due consideration shall be given to, in
addition to any other appropriate factors, whether the officers
and trustees of the integrated service network have acted with
good faith and in the best interests of the integrated service
network in entering into, and performing under, a contract under
which the integrated service network has incurred an expense.
In addition to the compliance powers under subdivision 3, the
commissioner has standing to sue, on behalf of an integrated
service network, officers or trustees of the integrated service
network who have breached their fiduciary duty in entering into
and performing such contracts.
Sec. 36. Minnesota Statutes 1993 Supplement, section
62N.10, subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS.] All integrated service
networks must be licensed by the commissioner. Licensure
requirements are:
(1) the ability to be responsible for the full continuum of
required health care and related costs for the defined
population that the integrated service network will serve;
(2) the ability to satisfy standards for quality of care;
(3) financial solvency; and
(4) the ability to develop and complete the action plans
required by law; and
(5) the ability to fully comply with this chapter and all
other applicable law.
The commissioner may adopt rules to specify licensure
requirements for integrated service networks in greater detail,
consistent with this subdivision.
Sec. 37. Minnesota Statutes 1993 Supplement, section
62N.10, subdivision 2, is amended to read:
Subd. 2. [FEES.] Licensees shall pay an initial fee and a
renewal fee each following year to be established by the
commissioner of health. The fee must be imposed at a rate
sufficient to cover the cost of regulation.
Sec. 38. Minnesota Statutes 1993 Supplement, section
62N.22, is amended to read:
62N.22 [DISCLOSURE OF COMMISSIONS.]
Before selling, or offering to sell, any coverage or
enrollment in a community integrated service network or an
integrated service network, a person selling the coverage or
enrollment shall disclose in writing to the prospective
purchaser the amount of any commission or other compensation the
person will receive as a direct result of the sale. The
disclosure may be expressed in dollars or as a percentage of the
premium. The amount disclosed need not include any anticipated
renewal commissions.
Sec. 39. Minnesota Statutes 1992, section 144.1485, is
amended to read:
144.1485 [DATA BASE ON HEALTH PERSONNEL.]
(a) The commissioner of health shall develop and maintain a
data base on health services personnel. The commissioner shall
use this information to assist local communities and units of
state government to develop plans for the recruitment and
retention of health personnel. Information collected in the
data base must include, but is not limited to, data on levels of
educational preparation, specialty, and place of employment.
The commissioner may collect information through the
registration and licensure systems of the state health licensing
boards.
(b) Health professionals who report their practice or place
of employment address to the commissioner of health under
section 144.052 may request in writing that their practice or
place of employment address be classified as private data on
individuals, as defined in section 13.02, subdivision 12. The
commissioner shall grant the classification upon receipt of a
signed statement by the health professional that the
classification is required for the safety of the health
professional, if the statement also provides a valid, existing
address where the health professional consents to receive
service of process. The commissioner shall use the mailing
address in place of the practice or place of employment address
in all documents available to the general public. The practice
or place of employment address and any information provided in
the classification request, other than the mailing address, are
private data on individuals and may be provided to other state
agencies. The practice or place of employment address may be
used to develop summary reports that show in aggregate the
distribution of health care providers in Minnesota.
Sec. 40. Minnesota Statutes 1993 Supplement, section
144.1486, is amended to read:
144.1486 [RURAL COMMUNITY HEALTH CENTERS.]
The commissioner of health shall develop and implement a
program to establish community health centers in rural areas of
Minnesota that are underserved by health care providers. The
program shall provide rural communities and community
organizations with technical assistance, capital grants for
start-up costs, and short-term assistance with operating costs.
The technical assistance component of the program must provide
assistance in review of practice management, market analysis,
practice feasibility analysis, medical records system analysis,
and scheduling and patient flow analysis. The program must:
(1) include a local match requirement for state dollars
received; (2) require local communities, through
instrumentalities of the state of Minnesota or nonprofit boards
comprised of local residents, to operate and own their
community's health care program; (3) encourage the use of
midlevel practitioners; and (4) incorporate a quality assurance
strategy that provides regular evaluation of clinical
performance and allows peer review comparisons for rural
practices. The commissioner shall report to the legislature on
implementation of the program by February 15, 1994.
Subdivision 1. [COMMUNITY HEALTH CENTER.] "Community
health center" means a community owned and operated primary and
preventive health care practice that meets the unique, essential
health care needs of a specified population.
Subd. 2. [PROGRAM GOALS.] The Minnesota community health
center program shall increase health care access for residents
of rural Minnesota by creating new community health centers in
areas where they are needed and maintaining essential rural
health care services. The program is not intended to duplicate
the work of current health care providers.
Subd. 3. [GRANTS.] (a) The commissioner shall provide
grants to communities for planning and establishing community
health centers through the Minnesota community health center
program. Grant recipients shall develop and implement a
strategy that allows them to become self-sufficient and qualify
for other supplemental funding and enhanced reimbursement. The
commissioner shall coordinate the grant program with the federal
rural health clinic, federally qualified health center, and
migrant and community health center programs to encourage
federal certification. The commissioner may award planning,
project, and initial operating expense grants, as provided in
paragraphs (b) to (d).
(b) Planning grants may be awarded to communities to plan
and develop state funded community health centers, federally
qualified health centers, or migrant and community health
centers.
(c) Project grants may be awarded to communities for
community health center start-up or expansion, and the
conversion of existing practices to community health centers.
Start-up grants may be used for facilities, capital equipment,
moving expenses, initial staffing, and setup. Communities must
provide reasonable assurance of their ability to obtain health
care providers and effectively utilize existing health care
provider resources. Funded community health center projects
must become operational before funding expires. Communities may
obtain funding for conversion of existing health care practices
to community health centers. Communities with existing
community health centers may apply for grants to add sites in
underserved areas. Governing boards must include
representatives of new service areas.
(d) Centers may apply for grants for up to two years to
subsidize initial operating expenses. Applicants for initial
operating expense grants must demonstrate that expenses exceed
revenues by a minimum of ten percent or demonstrate other
extreme need that cannot be met using organizational reserves.
Subd. 4. [ELIGIBILITY REQUIREMENTS.] In order to qualify
for community health center program funding, a project must:
(1) be located in a rural shortage area that is a medically
underserved, federal health professional shortage, or governor
designated shortage area. "Rural" means an area of the state
outside the ten-county Twin Cities metropolitan area and outside
of the Duluth, St. Cloud, East Grand Forks, Moorhead, Rochester,
and LaCrosse census defined urbanized areas;
(2) represent or propose the formation of a nonprofit
corporation with local resident governance, or be a governmental
entity. Applicants in the process of forming a nonprofit
corporation may have a nonprofit coapplicant serve as financial
agent through the remainder of the formation period. With the
exception of governmental entities, all applicants must submit
application for nonprofit incorporation and 501(c)(3) tax-exempt
status within six months of accepting community health center
grant funds;
(3) result in a locally owned and operated community health
center that provides primary and preventive health care
services, and incorporates quality assurance, regular reviews of
clinical performance, and peer review;
(4) seek to employ midlevel professionals, where
appropriate;
(5) demonstrate community and popular support and provide a
20 percent local match of state funding; and
(6) propose to serve an area that is not currently served
by a federally certified medical organization.
Subd. 5. [REVIEW PROCESS, RATING CRITERIA AND POINT
ALLOCATION.] (a) The commissioner shall establish grant
application guidelines and procedures that allow the
commissioner to assess relative need and the applicant's ability
to plan and manage a health care project. Program documentation
must communicate program objectives, philosophy, expectations,
and other conditions of funding to potential applicants.
The commissioner shall establish an impartial review
process to objectively evaluate grant applications. Proposals
must be categorized, ranked, and funded using a 100-point rating
scale. Fifty-two points shall be assigned to relative need and
48 points to project merit.
(b) The scoring of relative need must be based on proposed
service area factors, including but not limited to:
(1) population below 200 percent of poverty;
(2) geographic barriers based on average travel time and
distance to the next nearest source of primary care that is
accessible to Medicaid and Medicare recipients and uninsured
low-income individuals;
(3) a shortage of primary care health professionals, based
on the ratio of the population in the service area to the number
of full-time equivalent primary care physicians in the service
area; and
(4) other community health issues including a high
unemployment rate, high percentage of uninsured population, high
growth rate of minority and special populations, high teenage
pregnancy rate, high morbidity rates due to specific diseases,
late entry into prenatal care, high percentage geriatric
population, high infant mortality rate, high percentage of low
birth weight, cultural and language barriers, high percentage
minority population, excessive average travel time and distance
to next nearest source of subsidized primary care.
(c) Project merit shall be determined based on expected
benefit from the project, organizational capability to develop
and manage the project, and probability of success, including
but not limited to the following factors:
(1) proposed scope of health services;
(2) clinical management plan;
(3) governance;
(4) financial and administrative management; and
(5) community support, integration, collaboration,
resources, and innovation.
The commissioner may elect not to award any of the
community health center grants if applications fail to meet
criteria or lack merit. The commissioner's decision on an
application is final.
Subd. 6. [ELIGIBLE EXPENDITURES.] Grant recipients may use
grant funds for the following types of expenditures:
(1) salaries and benefits for employees, to the extent they
are involved in project planning and implementation;
(2) purchase, repair, and maintenance of necessary medical
and dental equipment and furnishings;
(3) purchase of office, medical, and dental supplies;
(4) in-state travel to obtain training or improve
coordination;
(5) initial operating expenses of community health centers;
(6) programs or plans to improve the coordination,
effectiveness, or efficiency of the primary health care delivery
system;
(7) facilities;
(8) necessary consultant fees; and
(9) reimbursement to rural-based primary care practitioners
for equipment, supplies, and furnishings that are transferred to
community health centers. Up to 65 percent of the grant funds
may be used to reimburse owners of rural practices for the
reasonable market value of usable facilities, equipment,
furnishings, supplies, and other resources that the community
health center chooses to purchase.
Grant funds shall not be used to reimburse applicants for
preexisting debt amortization, entertainment, and lobbying
expenses.
Subd. 7. [SPECIAL CONSIDERATION.] The commissioner,
through the office of rural health, shall make special efforts
to identify areas of the state where need is the greatest,
notify representatives of those areas about grant opportunities,
and encourage them to submit applications.
Subd. 8. [REQUIREMENTS.] The commissioner shall develop a
list of requirements for community health centers and a tracking
and reporting system to assess benefits realized from the
program to ensure that projects are on schedule and effectively
utilizing state funds.
The commissioner shall require community health centers
established through the grant program to:
(1) abide by all federal and state laws, rules,
regulations, and executive orders;
(2) establish policies, procedures, and services equivalent
to those required for federally certified rural health clinics
or federally qualified health centers. Written policies are
required for description of services, medical management, drugs,
biologicals and review of policies;
(3) become a Minnesota nonprofit corporation and apply for
501(c)(3) tax-exempt status within six months of accepting state
funding. Local governmental or tribal entities are exempt from
this requirement;
(4) establish a governing board composed of nine to 25
members who are residents of the area served and representative
of the social, economic, linguistic, ethnic, and racial target
population. At least 35 percent of the board must represent
consumers;
(5) establish corporate bylaws that reflect all functions
and responsibilities of the board;
(6) develop an appropriate management and organizational
structure with clear lines of authority and responsibility to
the board;
(7) provide for adequate patient management and continuity
of care on site and from referral sources;
(8) establish quality assurance and risk management
programs, policies, and procedures;
(9) develop a strategic staffing plan to acquire an
appropriate mix of primary care providers and clinical support
staff;
(10) establish billing policies and procedures to maximize
patient collections, except where federal regulations or
contractual obligations prohibit the use of these measures;
(11) develop and implement policies and procedures,
including a sliding scale fee schedule, that assure that no
person will be denied services because of inability to pay;
(12) establish an accounting and internal control system in
accordance with sound financial management principles;
(13) provide a local match equal to 20 percent of the grant
amount;
(14) work cooperatively with the local community and other
health care organizations, other grant recipients, and the
office of rural health;
(15) obtain an independent annual audit and submit audit
results to the office of rural health;
(16) maintain detailed records and, upon request, make
these records available to the commissioner for examination; and
(17) pursue supplemental funding sources, when practical,
for implementation and initial operating expenses.
Subd. 9. [PRECAUTIONS.] The commissioner may withhold,
delay, or cancel grant funding if a grant recipient does not
comply with program requirements and objectives.
Subd. 10. [TECHNICAL ASSISTANCE.] The commissioner may
provide, contract for, or provide supplemental funding for
technical assistance to community health centers in the areas of
clinical operations, medical practice management, community
development, and program management.
Sec. 41. [144.1492] [STATE RURAL HEALTH NETWORK REFORM
INITIATIVE.]
Subdivision 1. [PURPOSE AND MATCHING FUNDS.] The
commissioner of health shall apply for federal grant funding
under the state rural health network reform initiative, a health
care financing administration program to provide grant funds to
states to encourage innovations in rural health financing and
delivery systems. The commissioner may use state funds
appropriated to the department of health for the provision of
technical assistance for community integrated service network
development as matching funds for the federal grant.
Subd. 2. [USE OF FEDERAL FUNDS.] If the department of
health receives federal funding under the state rural health
network reform initiative, the department shall use these funds
to implement a program to provide technical assistance and
grants to rural communities to establish health care networks
and to develop and test a rural health network reform model.
Subd. 3. [ELIGIBLE APPLICANTS AND CRITERIA FOR AWARDING OF
GRANTS TO RURAL COMMUNITIES.] (a) Funding which the department
receives to award grants to rural communities to establish
health care networks shall be awarded through a request for
proposals process. Planning grant funds may be used for
community facilitation and initial network development
activities including incorporation as a nonprofit organization
or cooperative, assessment of network models, and determination
of the best fit for the community. Implementation grant funds
can be used to enable incorporated nonprofit organizations and
cooperatives to purchase technical services needed for further
network development such as legal, actuarial, financial,
marketing, and administrative services.
(b) In order to be eligible to apply for a planning or
implementation grant under the federally funded health care
network reform program, an organization must be located in a
rural area of Minnesota excluding the seven-county Twin Cities
metropolitan area and the census-defined urbanized areas of
Duluth, Rochester, St. Cloud, and Moorhead. The proposed
network organization must also meet or plan to meet the criteria
for a community integrated service network.
(c) In determining which organizations will receive grants,
the commissioner may consider the following factors:
(1) the applicant's description of their plans for health
care network development, their need for technical assistance,
and other technical assistance resources available to the
applicant. The applicant must clearly describe the service area
to be served by the network, how the grant funds will be used,
what will be accomplished, and the expected results. The
applicant should describe achievable objectives, a timetable,
and roles and capabilities of responsible individuals and
organizations;
(2) the extent of community support for the applicant and
the health care network. The applicant should demonstrate
support from private and public health care providers in the
service area, local community and government leaders, and the
regional coordinating board for the area. Evidence of such
support may include a commitment of financial support, in-kind
services, or cash, for development of the network;
(3) the size and demographic characteristics of the
population in the service area for the proposed network and the
distance of the service area from the nearest metropolitan area;
and
(4) the technical assistance resources available to the
applicant from nonstate sources and the financial ability of the
applicant to purchase technical assistance services with
nonstate funds.
Sec. 42. Minnesota Statutes 1993 Supplement, section
144.335, subdivision 3a, is amended to read:
Subd. 3a. [PATIENT CONSENT TO RELEASE OF RECORDS;
LIABILITY.] (a) A provider, or a person who receives health
records from a provider, may not release a patient's health
records to a person without a signed and dated consent from the
patient or the patient's legally authorized representative
authorizing the release, unless the release is specifically
authorized by law. Except as provided in paragraph (c), a
consent is valid for one year or for a lesser period specified
in the consent or for a different period provided by law.
(b) This subdivision does not prohibit the release of
health records for a medical emergency when the provider is
unable to obtain the patient's consent due to the patient's
condition or the nature of the medical emergency.
(c) Notwithstanding paragraph (a), if a patient explicitly
gives informed consent to the release of health records for the
purposes and pursuant to the restrictions in clauses (1) and
(2), the consent does not expire after one year for:
(1) the release of health records to a provider who is
being advised or consulted with in connection with the current
treatment of the patient;
(2) the release of health records to an accident and health
insurer, health service plan corporation, health maintenance
organization, or third-party administrator for purposes of
payment of claims, fraud investigation, or quality of care
review and studies, provided that:
(i) the use or release of the records complies with
sections 72A.49 to 72A.505;
(ii) further use or release of the records in individually
identifiable form to a person other than the patient without the
patient's consent is prohibited; and
(iii) the recipient establishes adequate safeguards to
protect the records from unauthorized disclosure, including a
procedure for removal or destruction of information that
identifies the patient.
(d) Until June 1, 1994 1996, paragraph (a) does not
prohibit the release of health records to qualified personnel
solely for purposes of medical or scientific research, if the
patient has not objected to a release for research purposes and
the provider who releases the records makes a reasonable effort
to determine that:
(i) the use or disclosure does not violate any limitations
under which the record was collected;
(ii) the use or disclosure in individually identifiable
form is necessary to accomplish the research or statistical
purpose for which the use or disclosure is to be made;
(iii) the recipient has established and maintains adequate
safeguards to protect the records from unauthorized disclosure,
including a procedure for removal or destruction of information
that identifies the patient; and
(iv) further use or release of the records in individually
identifiable form to a person other than the patient without the
patient's consent is prohibited.
(e) A person who negligently or intentionally releases a
health record in violation of this subdivision, or who forges a
signature on a consent form, or who obtains under false
pretenses the consent form or health records of another person,
or who, without the person's consent, alters a consent form, is
liable to the patient for compensatory damages caused by an
unauthorized release, plus costs and reasonable attorney's fees.
(f) Upon the written request of a spouse, parent, child, or
sibling of a patient being evaluated for or diagnosed with
mental illness, a provider shall inquire of a patient whether
the patient wishes to authorize a specific individual to receive
information regarding the patient's current and proposed course
of treatment. If the patient so authorizes, the provider shall
communicate to the designated individual the patient's current
and proposed course of treatment. Paragraph (a) applies to
consents given under this paragraph.
Sec. 43. Minnesota Statutes 1992, section 144.335, is
amended by adding a subdivision to read:
Subd. 5a. [NOTICE OF RIGHTS; INFORMATION ON RELEASE.] A
provider shall provide to patients, in a clear and conspicuous
manner, a written notice concerning practices and rights with
respect to access to health records. The notice must include an
explanation of:
(1) disclosures of health records that may be made without
the written consent of the patient, including the type of
records and to whom the records may be disclosed; and
(2) the right of the patient to have access to and obtain
copies of the patient's health records and other information
about the patient that is maintained by the provider.
The notice requirements of this paragraph are satisfied if
the notice is included with the notice and copy of the patient
and resident bill of rights under section 144.652 or if it is
displayed prominently in the provider's place of business. The
commissioner of health shall develop the notice required in this
subdivision and publish it in the State Register.
Sec. 44. Minnesota Statutes 1992, section 144.581,
subdivision 2, is amended to read:
Subd. 2. [USE OF HOSPITAL FUNDS FOR CORPORATE PROJECTS.]
In the event that the municipality, political subdivision, state
agency, or other governmental entity provides direct financial
subsidy to the hospital from tax revenue at the time an
undertaking authorized under subdivision 1, clauses (a) to (g),
is established or funded, the hospital may not contribute funds
to the undertaking for more than three years and thereafter all
funds must be repaid, with interest in no more than ten years.
Sec. 45. Minnesota Statutes 1993 Supplement, section
144.802, subdivision 3b, is amended to read:
Subd. 3b. [SUMMARY APPROVAL OF PRIMARY SERVICE AREAS.]
Except for submission of a written application to the
commissioner on a form provided by the commissioner, an
application to provide changes in a primary service area shall
be exempt from subdivisions 3, paragraphs (d) to (g); and 4, if:
(1) the application is for a change of primary service area
to improve coverage, to improve coordination with 911 emergency
dispatching, or to improve efficiency of operations;
(2) the application requests redefinition of contiguous or
overlapping primary service areas;
(3) the application shows approval from all the ambulance
licensees whose primary service area is either contiguous,
overlapping, or both, with those of the current and proposed
primary service area of the applicant areas are directly
affected by a change in the applicant's primary service area;
(4) the application shows that the applicant requested
review and comment on the application, and has included those
comments received from: all county boards in the areas of
coverage included in the application; all community health
boards in the areas of coverage included in the application; all
directors of 911 public safety answering point areas in the
areas of coverage included in the application; and all regional
emergency medical systems areas designated under section
144.8093 in the areas of coverage included in the application;
and
(5) the application shows consideration of the factors
listed in subdivision 3, paragraph (g).
Sec. 46. Minnesota Statutes 1993 Supplement, section
144A.071, subdivision 4a, as amended by 1994 H.F. No. 3210,
article 3, section 4, if enacted, is amended to read:
Subd. 4a. [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the
best interest of the state to ensure that nursing homes and
boarding care homes continue to meet the physical plant
licensing and certification requirements by permitting certain
construction projects. Facilities should be maintained in
condition to satisfy the physical and emotional needs of
residents while allowing the state to maintain control over
nursing home expenditure growth.
The commissioner of health in coordination with the
commissioner of human services, may approve the renovation,
replacement, upgrading, or relocation of a nursing home or
boarding care home, under the following conditions:
(a) to license or certify beds in a new facility
constructed to replace a facility or to make repairs in an
existing facility that was destroyed or damaged after June 30,
1987, by fire, lightning, or other hazard provided:
(i) destruction was not caused by the intentional act of or
at the direction of a controlling person of the facility;
(ii) at the time the facility was destroyed or damaged the
controlling persons of the facility maintained insurance
coverage for the type of hazard that occurred in an amount that
a reasonable person would conclude was adequate;
(iii) the net proceeds from an insurance settlement for the
damages caused by the hazard are applied to the cost of the new
facility or repairs;
(iv) the new facility is constructed on the same site as
the destroyed facility or on another site subject to the
restrictions in section 144A.073, subdivision 5;
(v) the number of licensed and certified beds in the new
facility does not exceed the number of licensed and certified
beds in the destroyed facility; and
(vi) the commissioner determines that the replacement beds
are needed to prevent an inadequate supply of beds.
Project construction costs incurred for repairs authorized under
this clause shall not be considered in the dollar threshold
amount defined in subdivision 2;
(b) to license or certify beds that are moved from one
location to another within a nursing home facility, provided the
total costs of remodeling performed in conjunction with the
relocation of beds does not exceed 25 percent of the appraised
value of the facility or $500,000, whichever is less;
(c) to license or certify beds in a project recommended for
approval under section 144A.073;
(d) to license or certify beds that are moved from an
existing state nursing home to a different state facility,
provided there is no net increase in the number of state nursing
home beds;
(e) to certify and license as nursing home beds boarding
care beds in a certified boarding care facility if the beds meet
the standards for nursing home licensure, or in a facility that
was granted an exception to the moratorium under section
144A.073, and if the cost of any remodeling of the facility does
not exceed 25 percent of the appraised value of the facility or
$500,000, whichever is less. If boarding care beds are licensed
as nursing home beds, the number of boarding care beds in the
facility must not increase beyond the number remaining at the
time of the upgrade in licensure. The provisions contained in
section 144A.073 regarding the upgrading of the facilities do
not apply to facilities that satisfy these requirements;
(f) to license and certify up to 40 beds transferred from
an existing facility owned and operated by the Amherst H. Wilder
Foundation in the city of St. Paul to a new unit at the same
location as the existing facility that will serve persons with
Alzheimer's disease and other related disorders. The transfer
of beds may occur gradually or in stages, provided the total
number of beds transferred does not exceed 40. At the time of
licensure and certification of a bed or beds in the new unit,
the commissioner of health shall delicense and decertify the
same number of beds in the existing facility. As a condition of
receiving a license or certification under this clause, the
facility must make a written commitment to the commissioner of
human services that it will not seek to receive an increase in
its property-related payment rate as a result of the transfers
allowed under this paragraph;
(g) to license and certify nursing home beds to replace
currently licensed and certified boarding care beds which may be
located either in a remodeled or renovated boarding care or
nursing home facility or in a remodeled, renovated, newly
constructed, or replacement nursing home facility within the
identifiable complex of health care facilities in which the
currently licensed boarding care beds are presently located,
provided that the number of boarding care beds in the facility
or complex are decreased by the number to be licensed as nursing
home beds and further provided that, if the total costs of new
construction, replacement, remodeling, or renovation exceed ten
percent of the appraised value of the facility or $200,000,
whichever is less, the facility makes a written commitment to
the commissioner of human services that it will not seek to
receive an increase in its property-related payment rate by
reason of the new construction, replacement, remodeling, or
renovation. The provisions contained in section 144A.073
regarding the upgrading of facilities do not apply to facilities
that satisfy these requirements;
(h) to license as a nursing home and certify as a nursing
facility a facility that is licensed as a boarding care facility
but not certified under the medical assistance program, but only
if the commissioner of human services certifies to the
commissioner of health that licensing the facility as a nursing
home and certifying the facility as a nursing facility will
result in a net annual savings to the state general fund of
$200,000 or more;
(i) to certify, after September 30, 1992, and prior to July
1, 1993, existing nursing home beds in a facility that was
licensed and in operation prior to January 1, 1992;
(j) to license and certify new nursing home beds to replace
beds in a facility condemned as part of an economic
redevelopment plan in a city of the first class, provided the
new facility is located within one mile of the site of the old
facility. Operating and property costs for the new facility
must be determined and allowed under existing reimbursement
rules;
(k) to license and certify up to 20 new nursing home beds
in a community-operated hospital and attached convalescent and
nursing care facility with 40 beds on April 21, 1991, that
suspended operation of the hospital in April 1986. The
commissioner of human services shall provide the facility with
the same per diem property-related payment rate for each
additional licensed and certified bed as it will receive for its
existing 40 beds;
(l) to license or certify beds in renovation, replacement,
or upgrading projects as defined in section 144A.073,
subdivision 1, so long as the cumulative total costs of the
facility's remodeling projects do not exceed 25 percent of the
appraised value of the facility or $500,000, whichever is less;
(m) to license and certify beds that are moved from one
location to another for the purposes of converting up to five
four-bed wards to single or double occupancy rooms in a nursing
home that, as of January 1, 1993, was county-owned and had a
licensed capacity of 115 beds;
(n) to allow a facility that on April 16, 1993, was a
106-bed licensed and certified nursing facility located in
Minneapolis to layaway all of its licensed and certified nursing
home beds. These beds may be relicensed and recertified in a
newly-constructed teaching nursing home facility affiliated with
a teaching hospital upon approval by the legislature. The
proposal must be developed in consultation with the interagency
committee on long-term care planning. The beds on layaway
status shall have the same status as voluntarily delicensed and
decertified beds, except that beds on layaway status remain
subject to the surcharge in section 256.9657. This layaway
provision expires July 1, 1995;
(o) to allow a project which will be completed in
conjunction with an approved moratorium exception project for a
nursing home in southern Cass county and which is directly
related to that portion of the facility that must be repaired,
renovated, or replaced, to correct an emergency plumbing problem
for which a state correction order has been issued and which
must be corrected by August 31, 1993; or
(p) to allow a facility that on April 16, 1993, was a
368-bed licensed and certified nursing facility located in
Minneapolis to layaway, upon 30 days prior written notice to the
commissioner, up to 30 of the facility's licensed and certified
beds by converting three-bed wards to single or double
occupancy. Beds on layaway status shall have the same status as
voluntarily delicensed and decertified beds except that beds on
layaway status remain subject to the surcharge in section
256.9657, remain subject to the license application and renewal
fees under section 144A.07 and shall be subject to a $100 per
bed reactivation fee. In addition, at any time within three
years of the effective date of the layaway, the beds on layaway
status may be:
(1) relicensed and recertified upon relocation and
reactivation of some or all of the beds to an existing licensed
and certified facility or facilities located in Pine River,
Brainerd, or International Falls; provided that the total
project construction costs related to the relocation of beds
from layaway status for any facility receiving relocated beds
may not exceed the dollar threshold provided in subdivision 2
unless the construction project has been approved through the
moratorium exception process under section 144A.073.;
(2) relicensed and recertified, upon reactivation of some
or all of the beds within the facility which placed the beds in
layaway status, if the commissioner has determined a need for
the reactivation of the beds on layaway status.
The property-related payment rate of a facility placing
beds on layaway status must be adjusted by the incremental
change in its rental per diem after recalculating the rental per
diem as provided in section 256B.431, subdivision 3a, paragraph
(d). The property-related payment rate for a facility
relicensing and recertifying beds from layaway status must be
adjusted by the incremental change in its rental per diem after
recalculating its rental per diem using the number of beds after
the relicensing to establish the facility's capacity day
divisor, which shall be effective the first day of the month
following the month in which the relicensing and recertification
became effective. Any beds remaining on layaway status more
than three years after the date the layaway status became
effective must be removed from layaway status and immediately
delicensed and decertified;
(q) to license and certify up to 24 nursing home beds in a
facility located in St. Louis county which, as of January 1,
1993, has a licensed capacity of 26 hospital beds and 24 nursing
home beds under the following conditions:
(1) no more than 12 nursing home beds can be licensed and
certified during fiscal year 1995; and
(2) the additional 12 nursing home beds can be licensed and
certified during fiscal year 1996 only if the 1994 occupancy
rate for nursing homes within a 25-mile radius of the facility
exceeds 96 percent.
This facility shall not be required to comply with the new
construction standards contained in the nursing home licensure
rules for resident bedrooms;
(r) to license and certify up to 117 beds that are
relocated from a licensed and certified 138-bed nursing facility
located in St. Paul to a hospital with 130 licensed hospital
beds located in South St. Paul, provided that the nursing
facility and hospital are owned and operated by the same
organization and that prior to the date the relocation is
completed the hospital ceases operation of its inpatient
hospital services at that hospital.
The total project construction cost estimate for the
project must not exceed the cost estimate submitted for the
replacement of the nursing facility in connection with the
moratorium exception process initiated under section 144A.073 in
1993.
At the time of licensure and certification of the 117
nursing facility beds in the new location, the facility may
layaway the remaining 21 nursing facility beds, which shall have
the same status as voluntarily delicensed and decertified beds
except that beds on layaway status remain subject to the
surcharge in section 256.9657. The 21 nursing facility beds on
layaway status may be relicensed and recertified within the
identifiable complex of health care facilities in which the beds
are currently located upon recommendation by the commissioner of
human services;
(s) to license and certify a newly constructed 118-bed
facility in Crow Wing county when the following conditions are
met:
(1) the owner of the new facility delicenses an existing
68-bed facility located in the same county;
(2) the owner of the new facility delicenses 60 beds in
three-bed rooms in other owned facilities located in the
seven-county metropolitan area; and
(3) the project results in a ten-bed reduction in the
number of licensed beds operated statewide by the owner of the
new facility.
All beds in the newly constructed facility shall be
licensed as nursing home beds regardless of the licensure of
beds at the closed facility.;
(t) to license and certify beds in a renovation and
remodeling project to convert 13 three-bed wards into 13 two-bed
rooms and 13 single-bed rooms, expand space, and add
improvements in a nursing home that, as of January 1, 1994, met
the following conditions: the nursing home was located in
Ramsey county; was not owned by a hospital corporation; had a
licensed capacity of 64 beds; and had been ranked among the top
15 applicants by the 1993 moratorium exceptions advisory review
panel. The total project construction cost estimate for this
project must not exceed the cost estimate submitted in
connection with the 1993 moratorium exception process; or
(u) to license and certify beds in a renovation and
remodeling project to convert 12 four-bed wards into 24 two-bed
rooms, expand space, and add improvements in a nursing home
that, as of January 1, 1994, met the following conditions: the
nursing home was located in Ramsey county; had a licensed
capacity of 154 beds; and had been ranked among the top 15
applicants by the 1993 moratorium exceptions advisory review
panel. The total project construction cost estimate for this
project must not exceed the cost estimate submitted in
connection with the 1993 moratorium exception process.
The property-related payment rate of a facility placing
beds on layaway status must be adjusted by the incremental
change in its rental per diem after recalculating the rental per
diem as provided in section 256B.431, subdivision 3a, paragraph
(d). The property-related payment rate for a facility
relicensing and recertifying beds from layaway status must be
adjusted by the incremental change in its rental per diem after
recalculating its rental per diem using the number of beds after
the relicensing to establish the facility's capacity day
divisor, which shall be effective the first day of the month
following the month in which the relicensing and recertification
became effective. Any beds remaining on layaway status more
than three years after the date the layaway status became
effective must be removed from layaway status and immediately
delicensed and decertified.
Sec. 47. Minnesota Statutes 1992, section 145.64,
subdivision 1, is amended to read:
Subdivision 1. [DATA AND INFORMATION.] All data and
information acquired by a review organization, in the exercise
of its duties and functions, shall be held in confidence, shall
not be disclosed to anyone except to the extent necessary to
carry out one or more of the purposes of the review
organization, and shall not be subject to subpoena or
discovery. No person described in section 145.63 shall disclose
what transpired at a meeting of a review organization except to
the extent necessary to carry out one or more of the purposes of
a review organization. The proceedings and records of a review
organization shall not be subject to discovery or introduction
into evidence in any civil action against a professional arising
out of the matter or matters which are the subject of
consideration by the review organization. Information,
documents or records otherwise available from original sources
shall not be immune from discovery or use in any civil action
merely because they were presented during proceedings of a
review organization, nor shall any person who testified before a
review organization or who is a member of it be prevented from
testifying as to matters within the person's knowledge, but a
witness cannot be asked about the witness' testimony before a
review organization or opinions formed by the witness as a
result of its hearings.
The confidentiality protection and protection from
discovery or introduction into evidence provided in this
subdivision shall also apply to the governing body of the review
organization and shall not be waived as a result of referral of
a matter from the review organization to the governing body or
consideration by the governing body of decisions,
recommendations, or documentation of the review organization.
The governing body of a hospital, health maintenance
organization, community integrated service network, or
integrated service network, that is owned or operated by a
governmental entity, may close a meeting to discuss decisions,
recommendations, deliberations, or documentation of the review
organization. A meeting may not be closed except by a majority
vote of the governing body in a public meeting. The closed
meeting must be tape recorded and the tape must be retained by
the governing body for five years.
Sec. 48. Minnesota Statutes 1993 Supplement, section
151.21, subdivision 7, is amended to read:
Subd. 7. This section does not apply to prescription drugs
dispensed to persons covered by a health plan that covers
prescription drugs under a managed care formulary or similar
practices. This section does not apply when a pharmacist is
dispensing a prescribed drug to persons covered under a managed
health care plan that maintains a mandatory or closed drug
formulary.
Sec. 49. Minnesota Statutes 1993 Supplement, section
151.21, subdivision 8, is amended to read:
Subd. 8. The following drugs are excluded from this
section: coumadin, dilantin, lanoxin, premarin, theophylline,
synthroid, tegretol, and phenobarbital. The drug formulary
committee established under section 256B.0625, subdivision 13,
shall establish a list of drug products that are to be excluded
from this section. This list shall be updated on an annual
basis and shall be provided to the board for dissemination to
pharmacists licensed in the state.
Sec. 50. Minnesota Statutes 1993 Supplement, section
256.9353, subdivision 3, is amended to read:
Subd. 3. [INPATIENT HOSPITAL SERVICES.] (a) Beginning July
1, 1993, covered health services shall include inpatient
hospital services, including inpatient hospital mental health
services and inpatient hospital and residential chemical
dependency treatment, subject to those limitations necessary to
coordinate the provision of these services with eligibility
under the medical assistance spend-down. The inpatient hospital
benefit for adult enrollees is subject to an annual benefit
limit of $10,000. The commissioner shall provide enrollees with
at least 60 days' notice of coverage for inpatient hospital
services and any premium increase associated with the inclusion
of this benefit.
(b) Enrollees determined by the commissioner to have a
basis of eligibility for medical assistance shall apply for and
cooperate with the requirements of medical assistance by the
last day of the third month following admission to an inpatient
hospital. If an enrollee fails to apply for medical assistance
within this time period, the enrollee and the enrollee's family
shall be disenrolled from the plan within one calendar month.
Enrollees and enrollees' families disenrolled for not applying
for or not cooperating with medical assistance may not reenroll.
(c) Admissions for inpatient hospital services paid for
under section 256.9362, subdivision 3, must be certified as
medically necessary in accordance with Minnesota Rules, parts
9505.0500 to 9505.0540, except as provided in clauses (1) and
(2):
(1) all admissions must be certified, except those
authorized under rules established under section 254A.03,
subdivision 3, or approved under Medicare; and
(2) payment under section 256.9362, subdivision 3, shall be
reduced by five percent for admissions for which certification
is requested more than 30 days after the day of admission. The
hospital may not seek payment from the enrollee for the amount
of the payment reduction under this clause.
Sec. 51. Minnesota Statutes 1993 Supplement, section
256.9353, subdivision 7, is amended to read:
Subd. 7. [COPAYMENTS AND COINSURANCE.] The MinnesotaCare
benefit plan shall include the following copayments and
coinsurance requirements:
(1) ten percent of the charges submitted for inpatient
hospital services for adult enrollees not eligible for medical
assistance, subject to an annual inpatient out-of-pocket maximum
of $1,000 per individual and $3,000 per family;
(2) $3 per prescription for adult enrollees; and
(3) $25 for eyeglasses for adult enrollees.
Enrollees who would be eligible for medical assistance with
a spend-down shall be financially responsible for the
coinsurance amount up to the spend-down limit or the coinsurance
amount, whichever is less, in order to become eligible for the
medical assistance program. Enrollees who are not eligible for
medical assistance with or without a spenddown shall be
financially responsible for the coinsurance amount and amounts
which exceed the $10,000 benefit limit. MinnesotaCare shall be
financially responsible for the spenddown amount up to the
$10,000 benefit limit for enrollees who are eligible for medical
assistance with a spenddown; enrollees who are eligible for
medical assistance with a spenddown are financially responsible
for amounts which exceed the $10,000 benefit limit.
Sec. 52. Minnesota Statutes 1993 Supplement, section
256.9354, subdivision 1, is amended to read:
Subdivision 1. [CHILDREN; EXPANSION AND CONTINUATION OF
ELIGIBILITY.] (a) [CHILDREN.] "Eligible persons" means children
who are one year of age or older but less than 18 years of age
who have gross family incomes that are equal to or less than 150
percent of the federal poverty guidelines and who are not
eligible for medical assistance without a spenddown under
chapter 256B and who are not otherwise insured for the covered
services. The period of eligibility extends from the first day
of the month in which the child's first birthday occurs to the
last day of the month in which the child becomes 18 years old.
(b) [EXPANSION OF ELIGIBILITY.] Eligibility for
MinnesotaCare shall be expanded as provided in subdivisions 2 to
5, except children who meet the criteria in this subdivision
shall continue to be enrolled pursuant to this subdivision. The
enrollment requirements in this paragraph apply to enrollment
under subdivisions 1 to 5. Parents who enroll in the
MinnesotaCare plan must also enroll their children and dependent
siblings, if the children and their dependent siblings are
eligible. Children and dependent siblings may be enrolled
separately without enrollment by parents. However, if one
parent in the household enrolls, both parents must enroll,
unless other insurance is available. If one child from a family
is enrolled, all children must be enrolled, unless other
insurance is available. If one spouse in a household enrolls,
the other spouse in the household must also enroll, unless other
insurance is available. Families cannot choose to enroll only
certain uninsured members. For purposes of this section, a
"dependent sibling" means an unmarried child who is a full-time
student under the age of 25 years who is financially dependent
upon a parent. Proof of school enrollment will be required.
(c) [CONTINUATION OF ELIGIBILITY.] Individuals who
initially enroll in the MinnesotaCare plan under the eligibility
criteria in subdivisions 2 to 5 remain eligible for the
MinnesotaCare plan, regardless of age, place of residence, or
the presence or absence of children in the same household, as
long as all other eligibility criteria are met and residence in
Minnesota and continuous enrollment in the MinnesotaCare plan or
medical assistance are maintained. In order for either parent
or either spouse in a household to remain enrolled, both must
remain enrolled, unless other insurance is available.
Sec. 53. Minnesota Statutes 1993 Supplement, section
256.9354, subdivision 4, is amended to read:
Subd. 4. [FAMILIES WITH CHILDREN; ELIGIBILITY BASED ON
PERCENTAGE OF INCOME PAID FOR HEALTH COVERAGE.] Beginning
January 1, 1993, "eligible persons" means children, parents, and
dependent siblings residing in the same household who are not
eligible for medical assistance without a spenddown under
chapter 256B. Children who meet the criteria in subdivision 1
shall continue to be enrolled pursuant to subdivision 1.
Persons who are eligible under this subdivision or subdivision
2, 3, or 5 must pay a premium as determined under sections
256.9357 and 256.9358, and children eligible under subdivision 1
must pay the premium required under section 256.9356,
subdivision 1. Individuals and families whose income is greater
than the limits established under section 256.9358 may not
enroll in MinnesotaCare.
Sec. 54. Minnesota Statutes 1993 Supplement, section
256.9354, subdivision 6, is amended to read:
Subd. 6. [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL
ASSISTANCE.] Individuals who apply for MinnesotaCare, but who
are potentially eligible for medical assistance without a
spenddown shall be allowed to enroll in MinnesotaCare for a
period of 60 days, so long as the applicant meets all other
conditions of eligibility. The commissioner shall identify and
refer such individuals to their county social service agency.
The enrollee must cooperate with the county social service
agency in determining medical assistance eligibility within the
60-day enrollment period. Enrollees who do not apply for and
cooperate with medical assistance within the 60-day enrollment
period, and their other family members, shall be disenrolled
from the plan within one calendar month. Persons disenrolled
for nonapplication for medical assistance may not reenroll until
they have obtained a medical assistance eligibility
determination for the family member or members who were referred
to the county agency. Persons disenrolled for noncooperation
with medical assistance may not reenroll until they have
cooperated with the county agency and have obtained a medical
assistance eligibility determination. The commissioner shall
redetermine provider payments made under MinnesotaCare to the
appropriate medical assistance payments for those enrollees who
subsequently become eligible for medical assistance.
Sec. 55. Minnesota Statutes 1993 Supplement, section
256.9354, is amended by adding a subdivision to read:
Subd. 7. [GENERAL ASSISTANCE MEDICAL CARE.] A person
cannot have coverage under both MinnesotaCare and general
assistance medical care in the same month, except that a
MinnesotaCare enrollee may be eligible for retroactive general
assistance medical care according to section 256D.03,
subdivision 3, paragraph (b).
Sec. 56. Minnesota Statutes 1993 Supplement, section
256.9357, subdivision 2, is amended to read:
Subd. 2. [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED
COVERAGE.] (a) To be eligible for subsidized premium payments
based on a sliding scale, a family or individual must not have
access to subsidized health coverage through an employer, and
must not have had access to subsidized health coverage through
an employer for the 18 months prior to application for
subsidized coverage under the MinnesotaCare plan. The
requirement that the family or individual must not have had
access to employer-subsidized coverage during the previous 18
months does not apply if employer-subsidized coverage was lost
for reasons that would not disqualify the individual for
unemployment benefits under section 268.09 and the family or
individual has not had access to employer-subsidized coverage
since the layoff. If employer-subsidized coverage was lost for
reasons that disqualify an individual for unemployment benefits
under section 268.09, children of that individual are exempt
from the requirement of no access to employer subsidized
coverage for the 18 months prior to application, as long as the
children have not had access to employer subsidized coverage
since the disqualifying event.
(b) For purposes of this requirement, subsidized health
coverage means health coverage for which the employer pays at
least 50 percent of the cost of coverage for the employee,
excluding dependent coverage, or a higher percentage as
specified by the commissioner. Children are eligible for
employer-subsidized coverage through either parent, including
the noncustodial parent. The commissioner must treat employer
contributions to Internal Revenue Code Section 125 plans as
qualified employer subsidies toward the cost of health coverage
for employees for purposes of this subdivision.
Sec. 57. Minnesota Statutes 1993 Supplement, section
256.9362, subdivision 6, is amended to read:
Subd. 6. [ENROLLEES 18 OR OLDER.] Payment by the
MinnesotaCare program for inpatient hospital services provided
to MinnesotaCare enrollees who are 18 years old or older on the
date of admission to the inpatient hospital must be in
accordance with paragraphs (a) and (b).
(a) If the medical assistance rate minus any copayment
required under section 256.9353, subdivision 6, is less than or
equal to the amount remaining in the enrollee's benefit limit
under section 256.9353, subdivision 3, payment must be the
medical assistance rate minus any copayment required under
section 256.9353, subdivision 6. The hospital must not seek
payment from the enrollee in addition to the copayment. The
MinnesotaCare payment plus the copayment must be treated as
payment in full.
(b) If the medical assistance rate minus any copayment
required under section 256.9353, subdivision 6, is greater than
the amount remaining in the enrollee's benefit limit under
section 256.9353, subdivision 3, payment must be the lesser of:
(1) the amount remaining in the enrollee's benefit limit;
or
(2) charges submitted for the inpatient hospital services
less any copayment established under section 256.9353,
subdivision 6.
The hospital may seek payment from the enrollee for the
amount by which usual and customary charges exceed the payment
under this paragraph. If payment is reduced under section
256.9353, subdivision 3, paragraph (c), the hospital may not
seek payment from the enrollee for the amount of the reduction.
Sec. 58. Minnesota Statutes 1993 Supplement, section
256.9363, subdivision 6, is amended to read:
Subd. 6. [COPAYMENTS AND BENEFIT LIMITS.] Enrollees are
responsible for all copayments in section 256.9353, subdivision
6, and shall pay copayments to the managed care plan or to its
participating providers. The enrollee is also responsible for
payment of inpatient hospital charges which exceed the
MinnesotaCare benefit limit to the managed care plan or its
participating providers.
Sec. 59. Minnesota Statutes 1993 Supplement, section
256.9363, subdivision 7, is amended to read:
Subd. 7. [MANAGED CARE PLAN VENDOR REQUIREMENTS.] The
following requirements apply to all counties or vendors who
contract with the department of human services to serve
MinnesotaCare recipients. Managed care plan contractors:
(1) shall authorize and arrange for the provision of the
full range of services listed in section 256.9353 in order to
ensure appropriate health care is delivered to enrollees;
(2) shall accept the prospective, per capita payment or
other contractually defined payment from the commissioner in
return for the provision and coordination of covered health care
services for eligible individuals enrolled in the program;
(3) may contract with other health care and social service
practitioners to provide services to enrollees;
(4) shall provide for an enrollee grievance process as
required by the commissioner and set forth in the contract with
the department;
(5) shall retain all revenue from enrollee copayments;
(6) shall accept all eligible MinnesotaCare enrollees,
without regard to health status or previous utilization of
health services;
(7) shall demonstrate capacity to accept financial risk
according to requirements specified in the contract with the
department. A health maintenance organization licensed under
chapter 62D, or a nonprofit health plan licensed under chapter
62C, is not required to demonstrate financial risk capacity,
beyond that which is required to comply with chapters 62C and
62D; and
(8) shall submit information as required by the
commissioner, including data required for assessing enrollee
satisfaction, quality of care, cost, and utilization of
services; and
(9) shall submit to the commissioner claims in the format
specified by the commissioner of human services for all hospital
services provided to enrollees for the purpose of determining
whether enrollees meet medical assistance spend-down
requirements and shall provide to the enrollee, upon the
enrollee's request, information on the cost of services provided
to the enrollee by the managed care plan for the purpose of
establishing whether the enrollee has met medical assistance
spend-down requirements.
Sec. 60. Minnesota Statutes 1993 Supplement, section
256.9363, subdivision 9, is amended to read:
Subd. 9. [RATE SETTING.] Rates will be prospective, per
capita, where possible. The commissioner may allow health plans
to arrange for inpatient hospital services on a risk or nonrisk
basis. The commissioner shall consult with an independent
actuary to determine appropriate rates.
Sec. 61. Minnesota Statutes 1993 Supplement, section
256.9657, subdivision 3, is amended to read:
Subd. 3. [HEALTH MAINTENANCE ORGANIZATION; INTEGRATED
SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 1992, each
health maintenance organization with a certificate of authority
issued by the commissioner of health under chapter 62D and each
integrated service network and community integrated service
network licensed by the commissioner under sections 62N.01 to
62N.22 chapter 62N shall pay to the commissioner of human
services a surcharge equal to six-tenths of one percent of the
total premium revenues of the health maintenance
organization, or integrated service network, or community
integrated service network as reported to the commissioner of
health according to the schedule in subdivision 4.
(b) For purposes of this subdivision, total premium revenue
means:
(1) premium revenue recognized on a prepaid basis from
individuals and groups for provision of a specified range of
health services over a defined period of time which is normally
one month, excluding premiums paid to a health maintenance
organization, integrated service network, or community
integrated service network from the Federal Employees Health
Benefit Program;
(2) premiums from Medicare wrap-around subscribers for
health benefits which supplement Medicare coverage;
(3) Medicare revenue, as a result of an arrangement between
a health maintenance organization, an integrated service
network, or a community integrated service network and the
health care financing administration of the federal Department
of Health and Human Services, for services to a Medicare
beneficiary; and
(4) medical assistance revenue, as a result of an
arrangement between a health maintenance organization,
integrated service network, or community integrated service
network and a Medicaid state agency, for services to a medical
assistance beneficiary.
If advance payments are made under clause (1) or (2) to the
health maintenance organization, integrated service network, or
community integrated service network for more than one reporting
period, the portion of the payment that has not yet been earned
must be treated as a liability.
Sec. 62. Minnesota Statutes 1993 Supplement, section
256.9695, subdivision 3, as amended by 1994 House File No. 3210,
article 3, section 49, if enacted, is amended to read:
Subd. 3. [TRANSITION.] Except as provided in section
256.969, subdivision 8, the commissioner shall establish a
transition period for the calculation of payment rates from July
1, 1989, to the implementation date of the upgrade to the
Medicaid management information system or July 1, 1992,
whichever is earlier.
During the transition period:
(a) Changes resulting from section 256.969, subdivisions 7,
9, 10, 11, and 13, shall not be implemented, except as provided
in section 256.969, subdivisions 12 and 20.
(b) The beginning of the 1991 rate year shall be delayed
and the rates notification requirement shall not be applicable.
(c) Operating payment rates shall be indexed from the
hospital's most recent fiscal year ending prior to January 1,
1991, by prorating the hospital cost index methodology in effect
on January 1, 1989. For payments made for admissions occurring
on or after June 1, 1990, until the implementation date of the
upgrade to the Medicaid management information system the
hospital cost index excluding the technology factor shall not
exceed five percent. This hospital cost index limitation shall
not apply to hospitals that meet the requirements of section
256.969, subdivision 20, paragraphs (a) and (b).
(d) Property and pass-through payment rates shall be
maintained at the most recent payment rate effective for June 1,
1990. However, all hospitals are subject to the hospital cost
index limitation of subdivision 2c, for two complete fiscal
years. Property and pass-through costs shall be retroactively
settled through the transition period. The laws in effect on
the day before July 1, 1989, apply to the retroactive settlement.
(e) If the upgrade to the Medicaid management information
system has not been completed by July 1, 1992, the commissioner
shall make adjustments for admissions occurring on or after that
date as follows:
(1) provide a ten percent increase to hospitals that meet
the requirements of section 256.969, subdivision 20, or, upon
written request from the hospital to the commissioner, 50
percent of the rate change that the commissioner estimates will
occur after the upgrade to the Medicaid management information
system; and
(2) adjust the Minnesota and local trade area rebased
payment rates that are established after the upgrade to the
Medicaid management information system to compensate for a
rebasing effective date of July 1, 1992. The adjustment shall
be determined using claim specific payment changes that result
from the rebased rates and revised methodology in effect after
the systems upgrade. Any adjustment that is greater than zero
shall be ratably reduced by 20 percent. In addition, every
adjustment shall be reduced for payments under clause (1), and
differences in the hospital cost index. Hospitals shall revise
claims so that services provided by rehabilitation units of
hospitals are reported separately. The adjustment shall be in
effect until the amount due to or owed by the hospital is fully
paid over a number of admissions that is equal to the number of
admissions under adjustment multiplied by 1.5, except that a
hospital with a 20 percent or greater negative adjustment that
exceeds $1,000,000 for admissions occurring from July 1, 1992,
to December 31, 1992, must use a schedule that is three times
the number of admissions under adjustment and the adjustment
shall be in effect only over a number of admissions that is
equal to the number of admissions under adjustment multiplied by
1.5. The adjustment for admissions occurring from July 1, 1992
to December 31, 1992, shall be based on claims paid as of August
1, 1993, and the adjustment shall begin with the effective date
of rules governing rebasing. The adjustment for admissions
occurring from January 1, 1993, to the effective date of the
rules shall be based on claims paid as of February 1, 1994, and
shall begin after the first adjustment period is fully paid.
For purposes of appeals under subdivision 1, the adjustment
shall be considered payment at the time of admission.
Sec. 63. Minnesota Statutes 1993 Supplement, section
256B.0917, subdivision 2, is amended to read:
Subd. 2. [DESIGN OF SAIL PROJECTS; LOCAL LONG-TERM CARE
COORDINATING TEAM.] (a) The commissioner of human services in
conjunction with the interagency long-term care planning
committee's long-range strategic plan shall contract with SAIL
projects in four to six counties or groups of counties to
demonstrate the feasibility and cost-effectiveness of a local
long-term care strategy that is consistent with the state's
long-term care goals identified in subdivision 1. The
commissioner shall publish a notice in the State Register
announcing the availability of project funding and giving
instructions for making an application. The instructions for
the application shall identify the amount of funding available
for project components.
(b) To be selected for the project, a county board or
boards must establish a long-term care coordinating team
consisting of county social service agencies, public health
nursing service agencies, local boards of health, a
representative of local nursing home providers, a representative
of local home care providers, and the area agencies on aging in
a geographic area which is responsible for:
(1) developing a local long-term care strategy consistent
with state goals and objectives;
(2) submitting an application to be selected as a project;
(3) coordinating planning for funds to provide services to
elderly persons, including funds received under Title III of the
Older Americans Act, Community Social Services Act, Title XX of
the Social Security Act and the Local Public Health Act; and
(4) ensuring efficient services provision and
nonduplication of funding.
(c) The board or boards shall designate a public agency to
serve as the lead agency. The lead agency receives and manages
the project funds from the state and is responsible for the
implementation of the local strategy. If selected as a project,
the local long-term care coordinating team must semiannually
evaluate the progress of the local long-term care strategy in
meeting state measures of performance and results as established
in the contract.
(d) Each member of the local coordinating team must
indicate its endorsement of the local strategy. The local
long-term care coordinating team may include in its membership
other units of government which provide funding for services to
the frail elderly. The team must cooperate with consumers and
other public and private agencies, including nursing homes, in
the geographic area in order to develop and offer a variety of
cost-effective services to the elderly and their caregivers.
(e) The board or boards shall apply to be selected as a
project. If the project is selected, the commissioner of human
services shall contract with the lead agency for the project and
shall provide additional administrative funds for implementing
the provisions of the contract, within the appropriation
available for this purpose.
(f) Projects shall be selected according to the following
conditions.
No project may be selected unless it demonstrates that:
(i) the objectives of the local project will help to
achieve the state's long-term care goals as defined in
subdivision 1;
(ii) in the case of a project submitted jointly by several
counties, all of the participating counties are contiguous;
(iii) there is a designated local lead agency that is
empowered to make contracts with the state and local vendors on
behalf of all participants;
(iv) the project proposal demonstrates that the local
cooperating agencies have the ability to perform the project as
described and that the implementation of the project has a
reasonable chance of achieving its objectives;
(v) the project will serve an area that covers at least
four counties or contains at least 2,500 persons who are 85
years of age or older, according to the projections of the state
demographer or the census if the data is more recent; and
(vi) the local coordinating team documents efforts of
cooperation with consumers and other agencies and organizations,
both public and private, in planning for service delivery.
Sec. 64. Minnesota Statutes 1993 Supplement, section
295.50, subdivision 4, is amended to read:
Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care
provider" means:
(1) a person furnishing any or all of the following goods
or services directly to a patient or consumer: medical,
surgical, optical, visual, dental, hearing, nursing services,
drugs, medical supplies, medical appliances, laboratory,
diagnostic or therapeutic services, or any goods and services
not listed above that qualifies for reimbursement under the
medical assistance program provided under chapter 256B;
(2) a staff model health carrier plan company; or
(3) a licensed ambulance service.
(b) Health care provider does not include hospitals,
nursing homes licensed under chapter 144A, pharmacies, and
surgical centers.
Sec. 65. Minnesota Statutes 1993 Supplement, section
295.50, subdivision 12b, is amended to read:
Subd. 12b. [STAFF MODEL HEALTH CARRIER PLAN COMPANY.]
"Staff model health carrier plan company" means a health carrier
plan company as defined in section 62L.02, subdivision 16
62Q.01, subdivision 4, which employs one or more types of health
care provider to deliver health care services to the
health carrier's plan company's enrollees.
Sec. 66. [317A.022] [ELECTION BY CERTAIN CHAPTER 318
ASSOCIATIONS.]
Subdivision 1. [GENERAL.] An association described in
section 318.02, subdivision 5, may elect to cease to be an
association subject to and governed by chapter 318 and to become
subject to and governed by this chapter in the same manner and
to the extent provided in this chapter as though it were a
nonprofit corporation by complying with this section.
Subd. 2. [AMENDED TITLE AND OTHER CONFORMING
AMENDMENTS.] The declaration of trust, as defined in section
318.02, subdivision 1, of the association must be amended to
identify it as the "articles of an association electing to be
treated as a nonprofit corporation." All references in this
chapter to "articles" or "articles of incorporation" include the
declaration of trust of an electing association. If the
declaration of trust includes a provision prohibited by this
chapter for inclusion in articles of incorporation, omits a
provision required by this chapter to be included in articles of
incorporation, or is inconsistent with this chapter, the
electing association shall amend its declaration of trust to
conform to the requirements of this chapter. The appropriate
provisions of the association's declaration of trust or bylaws
or chapter 318 control the manner of adoption of the amendments
required by this subdivision.
Subd. 3. [METHOD OF ELECTION.] An election by an
association under subdivision 2 must be made by resolution
approved by the affirmative vote of the trustees of the
association and by the affirmative vote of the members or other
persons with voting rights in the association. The affirmative
vote of both the trustees of the association and of the members
or other persons with voting rights, if any, in the association
must be of the same proportion that is required for an amendment
of the declaration of trust of the association before the
election, in each case upon proper notice that a purpose of the
meeting is to consider an election by the association to cease
to be an association subject to and governed by chapter 318 and
to become and be a nonprofit corporation subject to and governed
by this chapter. The resolution and the articles of the
amendment of the declaration of trust must be filed with the
secretary of state and are effective upon filing, or a later
date as may be set forth in the filed resolution. Upon the
effective date, without any other action or filing by or on
behalf of the association, the association automatically is
subject to this chapter in the same manner and to the same
extent as though it had been formed as a nonprofit corporation
pursuant to this chapter. Upon the effective date of the
election, the association is not considered to be a new entity,
but is considered to be a continuation of the same entity.
Subd. 4. [EFFECTS OF ELECTION.] Upon the effective date of
an association's election under subdivision 3, and consistent
with the continuation of the association under this chapter:
(1) the organization has the rights, privileges,
immunities, powers, and is subject to the duties and
liabilities, of a corporation formed under this chapter;
(2) all real or personal property, debts, including debts
arising from a subscription for membership and interests
belonging to the association, continue to be the real and
personal property, and debts of the organization without further
action;
(3) an interest in real estate possessed by the association
does not revert to the grantor, or otherwise, nor is it in any
way impaired by reason of the election, and the personal
property of the association does not revert by reason of the
election;
(4) except where the will or other instrument provides
otherwise, a devise, bequest, gift, or grant contained in a will
or other instrument, in a trust or otherwise, made before or
after the election has become effective, to or for the
association, inures to the organization;
(5) the debts, liabilities, and obligations of the
association continue to be the debts, liabilities, and
obligations of the organization, just as if the debts,
liabilities, and obligations had been incurred or contracted by
the organization after the election;
(6) existing claims or a pending action or proceeding by or
against the association may be prosecuted to judgment as though
the election had not been affected;
(7) the liabilities of the trustees, members, officers,
directors, or similar groups or persons, however denominated, of
the association, are not affected by the election;
(8) the rights of creditors or liens upon the property of
the association are not impaired by the election;
(9) an electing association may merge with one or more
nonprofit corporations in accordance with the applicable
provisions of this chapter, and either the association or a
nonprofit corporation may be the surviving entity in the merger;
and
(10) the provisions of the bylaws of the association that
are consistent with this chapter remain or become effective and
provisions of the bylaws that are inconsistent with this chapter
are not effective.
Sec. 67. Minnesota Statutes 1992, section 318.02, is
amended by adding a subdivision to read:
Subd. 5. [ELECTION TO BE GOVERNED BY CHAPTER 317A.] An
association may cease to be subject to or governed by this
chapter by filing an election in the manner described in section
317A.022, to be subject to and governed by chapter 317A in the
same manner and to the same extent provided in chapter 317A as
though it were a nonprofit corporation if:
(1) it is not formed for a purpose involving pecuniary gain
to its members, other than to members that are nonprofit
organizations or subdivisions, units, or agencies of the United
States or a state or local government; and
(2) it does not pay dividends or other pecuniary
remuneration, directly or indirectly, to its members, other than
to members that are nonprofit organizations or subdivisions,
units, or agencies of the United States or a state or local
government.
Sec. 68. [CHISAGO COUNTY HOSPITAL PROJECT.]
(a) Notwithstanding the provisions of Minnesota Statutes,
section 144.551, subdivision 1, paragraph (a), a project to
replace a hospital in Chisago county may be commenced if:
(1) the new hospital is located within ten miles of the
current site;
(2) the project will result in a net reduction of licensed
hospital beds; and
(3) all hospitals within ten miles of the project agree to
the general location criteria, or if the hospitals do not agree
by July 1, 1994, the commissioner of health approves the project
through the process described in paragraph (b). The hospitals
may notify the commissioner and request a mutually agreed upon
extension of time not to extend beyond August 15, 1994, for
submission of this project to the commissioner. The
commissioner shall render a decision on the project within 60
days after submission by the parties. The commissioner's
decision is the final administrative decision of the agency.
(b) As expressly authorized under paragraph (a), the
commissioner shall approve a project if it is determined that
replacement of the existing hospital or hospitals will:
(1) promote high quality care and services;
(2) provide improved access to care;
(3) not involve a substantial expansion of inpatient
service capacity; and
(4) benefit the region to be served by the new regional
facility.
(c) Prior to making this determination, the commissioner
shall solicit and review written comments from hospitals and
community service agencies located within ten miles of the new
hospital site and from the regional coordinating board.
(d) For the purposes of pursuing the process established
under this section, Chisago health services and district
memorial hospital may pursue discussions and work cooperatively
with each other, and with another organization mutually agreed
upon, to plan for a new hospital facility to serve the area
presently served by the two hospitals.
Sec. 69. [STUDY OF ANESTHESIA PRACTICES.]
The commissioner of health shall study and report to the
legislature by January 15, 1995, on anesthesia services provided
in health care facilities of this state by nurse anesthetists
and anesthesiologists. The study shall compare different
third-party reimbursement practices and contractual and
employment arrangements between health care facilities, nurse
anesthetists, and anesthesiologists in terms of their effect on:
(1) patient outcomes in this state, including the incidence
of mortality/morbidity as related to provider and practice
methods in urban and rural settings as disclosed by a literature
search of available retrospective or prospective studies;
(2) the cost of the service provided under each arrangement
to health care facilities, third-party purchasers, and patients;
and
(3) the effects on competition under each arrangement.
The report shall also include the commissioner's findings
on the most appropriate methods to provide anesthesia services
to ensure cost-effective delivery of quality anesthesia services.
Sec. 70. [HOSPITAL STUDIES.]
The commissioner of human services must review rebased
hospital payment rates to determine whether hospitals with
exceptionally high cost inpatient admissions are reimbursed at
rates that are reasonable and adequate to meet the costs
associated with each such high cost admission. The commissioner
must report the results of this review, along with
recommendations for any appropriate payment rate modifications.
The commissioners of health and human services shall also
study the distribution and scope of specialized health care
services for children, including the role of all children's
hospitals in the context of health care reform. The
commissioners shall submit a report, including recommendations,
to the legislature and the governor by February 15, 1995.
Sec. 71. [HEALTH CARE ADMINISTRATION.] 1994 House File No.
3210, article 1, section 2, subdivision 3, if enacted, is
amended to read:
Subd. 3. Health Care Administration
General
(37,766,000) 17,756,000
[MORATORIUM EXCEPTION PROPOSALS.] Of
this appropriation, $110,000 is
appropriated to the commissioner of
human services for the fiscal year
ending June 30, 1995, to pay the
medical assistance costs associated
with exceptions to the nursing home
moratorium granted under Minnesota
Statutes, section 144A.073.
Notwithstanding section 144A.073, the
interagency long-term care planning
committee shall issue a request for
proposals by June 6, 1994, and the
commissioner of health shall make a
final decision on project approvals by
October 15, 1994.
[MANAGED CARE CARRYOVER.] Unexpended
money appropriated for grants to
counties for managed care
administration in fiscal year 1994 does
not cancel but is available in fiscal
year 1995 for that purpose.
[HIGH COST INFANT AND YOUNG PEDIATRIC
ADMISSIONS.] The appropriation to the
aid to families with dependent children
program in Laws 1993, First Special
Session chapter 1, article 1, section
2, subdivision 5, for the fiscal year
ending June 30, 1994, is reduced by
$1,165,000. The appropriation to the
medical assistance program is increased
by $1,165,000 for the fiscal year
ending June 30, 1995, for the purpose
of (1) exceptionally high cost
inpatient admissions for infants under
the age of one, and for children under
the age of six receiving services in a
hospital that receives payment under
Minnesota Statutes, section 256.969,
subdivision 9 or 9a; and (2) hospitals
with a 20 percent or greater negative
adjustment that exceeds $1,000,000, as
the adjustment is calculated under
Minnesota Statutes, section 256.9695,
subdivision 3.
[INFLATION ADJUSTMENTS.] The
commissioner of finance shall include,
as a budget change request in the
1996-1997 biennial detailed expenditure
budget submitted to the legislature
under Minnesota Statutes, section
16A.11, annual inflation adjustments in
operating costs for: nursing services
and home health aide services under
Minnesota Statutes, section 256B.0625,
subdivision 6a; nursing supervision of
personal care services, under Minnesota
Statutes, section 256B.0625,
subdivision 19a; private duty nursing
services under Minnesota Statutes,
section 256B.0625, subdivision 7; home
and community-based services waiver for
persons with mental retardation and
related conditions under Minnesota
Statutes, section 256B.501; home and
community-based services waiver for the
elderly under Minnesota Statutes,
section 256B.0915; alternative care
program under Minnesota Statutes,
section 256B.0913; traumatic brain
injury waiver under Minnesota Statutes,
section 256B.093; adult residential
program grants, under rule 12, under
Minnesota Rules, parts 9535.2000 to
9535.3000; adult and family community
support grants, under rules 14 and 78,
under Minnesota Rules, parts 9535.1700
to 9535.1760.
[HOSPITAL TECHNOLOGY FACTOR.] For
admissions occurring on or after April
1, 1994, through June 30, 1995, the
hospital cost index shall be increased
by 0.51 percent for technology.
Notwithstanding the sunset provisions
of this article, this increase shall
become part of the base for the
1996-1997 biennium. For fiscal year
1995 only, the commissioner shall
adjust rates paid to a health
maintenance organization under medical
assistance contract with the
commissioner to reflect the hospital
technology factor in this paragraph,
and the adjustment must be made on an
undiscounted basis.
[ICF/MR RECEIVERSHIP.] If an
intermediate care facility for persons
with mental retardation or related
conditions that is in receivership
under Minnesota Statutes, section
245A.12 or 245A.13, is sold to an
unrelated organization: (1) the
facility shall be considered a newly
established facility for rate setting
purposes notwithstanding any provisions
to the contrary in section 256B.501,
subdivision 11; and (2) the facility's
historical basis for the physical
plant, land, and land improvements for
each facility must not exceed the prior
owner's aggregate historical basis for
these same assets for each facility.
The allocation of the purchase price
between land, land improvements, and
physical plant shall be based on the
real estate appraisal using the
depreciated replacement cost method.
[NEW ICF/MR.] A newly constructed or
newly established intermediate care
facility for persons with mental
retardation or related conditions that
is developed and financed during the
fiscal year ending June 30, 1995, shall
not be subject to the equity
requirements in Minnesota Statutes,
section 256B.501, subdivision 11,
paragraph (d), or Minnesota Rules, part
9553.0060, subpart 3, item F, provided
that the provider's interest rate does
not exceed the interest rate available
through state agency tax-exempt
financing.
Sec. 72. [REVISOR INSTRUCTION.]
The revisor of statutes shall change the term "health right"
to "MinnesotaCare," "health right plan" to "MinnesotaCare
program," and "MinnesotaCare plan" to "MinnesotaCare program,"
wherever these terms are used in Minnesota Statutes or Minnesota
Rules.
Sec. 73. [CONTINGENT REPEALER FOR MINNESOTACARE.]
Notwithstanding section 645.34, the article 13, section 2,
amendment to section 256.9354, subdivision 5, and the article
13, section 5, amendment to section 256.9358, subdivision 4, are
repealed July 1, 1994, and the provisions are revived as they
were before the amendments, if the 1994 Legislature passes and
the governor signs into law a provision that establishes and
provides money for a health care access reserve account to
ensure adequate funding for the MinnesotaCare program through
fiscal year 1996.
Sec. 74. [REPEALER.]
Minnesota Statutes 1992, section 256.362, subdivision 5;
Minnesota Statutes 1993 Supplement, sections 62J.04, subdivision
8; 62N.07; 62N.075; 62N.08; 62N.085; and 62N.16, are repealed.
Sec. 75. [EFFECTIVE DATE.]
Sections 4, 15, 18, 20, 22, 24, 27 to 29, 31 to 35, 39 to
42, 45, 47 to 49, 51 to 55, 62, 64 to 68, and 71 to 74 are
effective the day following final enactment. All other sections
are effective July 1, 1994.
ARTICLE 9
ADMINISTRATIVE SIMPLIFICATION
Section 1. [62J.50] [CITATION AND PURPOSE.]
Subdivision 1. [CITATION.] Sections 62J.50 to 62J.61 may
be cited as the Minnesota health care administrative
simplification act of 1994.
Subd. 2. [PURPOSE.] The legislature finds that significant
savings throughout the health care industry can be accomplished
by implementing a set of administrative standards and simplified
procedures and by setting forward a plan toward the use of
electronic methods of data interchange. The legislature finds
that initial steps have been taken at the national level by the
federal health care financing administration in its
implementation of nationally accepted electronic transaction
sets for its medicare program. The legislature further
recognizes the work done by the workgroup for electronic data
interchange and the American national standards institute and
its accredited standards committee X12, at the national level,
and the Minnesota administrative uniformity committee, a
statewide, voluntary, public-private group representing payers,
hospitals, state programs, physicians, and other health care
providers in their work toward administrative simplification in
the health care industry.
Sec. 2. [62J.51] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of sections 62J.50 to
62J.61, the following definitions apply.
Subd. 2. [ANSI.] "ANSI" means the American national
standards institute.
Subd. 3. [ASCX12] "ASC X12" means the American national
standards institute committee X12.
Subd. 4. [CATEGORY I INDUSTRY PARTICIPANTS.] "Category I
industry participants" means the following: group purchasers,
providers, and other health care organizations doing business in
Minnesota including public and private payers; hospitals; claims
clearinghouses; third-party administrators; billing service
bureaus; value added networks; self-insured plans and employers
with more than 100 employees; clinic laboratories; durable
medical equipment suppliers with a volume of at least 50,000
claims or encounters per year; and group practices with 20 or
more physicians.
Subd. 5. [CATEGORY II INDUSTRY PARTICIPANTS.] "Category II
industry participants" means all group purchasers and providers
doing business in Minnesota not classified as category I
industry participants.
Subd. 6. [CLAIM PAYMENT/ADVICE TRANSACTION SET (ANSI ASC
X12 835).] "Claim payment/advice transaction set (ANSI ASC X12
835)" means the electronic transaction format developed and
approved for implementation in October 1991, and used for
electronic remittance advice and electronic funds transfer.
Subd. 7. [CLAIM SUBMISSION TRANSACTION SET (ANSI ASC X12
837).] "Claim submission transaction set (ANSI ASC X12 837)"
means the electronic transaction format developed and approved
for implementation in October 1992, and used to submit all
health care claims information.
Subd. 8. [EDI.] "EDI" or "electronic data interchange"
means the computer application to computer application exchange
of information using nationally accepted standard formats.
Subd. 9. [ELIGIBILITY TRANSACTION SET (ANSI ASC X12
270/271).] "Eligibility transaction set (ANSI ASC X12 270/271)"
means the transaction format developed and approved for
implementation in February 1993, and used by providers to
request and receive coverage information on the member or
insured.
Subd. 10. [ENROLLMENT TRANSACTION SET (ANSI ASC X12
834).] "Enrollment transaction set (ANSI ASC X12 834)" means the
electronic transaction format developed and approved for
implementation in February 1992, and used to transmit enrollment
and benefit information from the employer to the payer for the
purpose of enrolling in a benefit plan.
Subd. 11. [GROUP PURCHASER.] "Group purchaser" has the
meaning given in section 62J.03, subdivision 6.
Subd. 12. [ISO.] "ISO" means the international
standardization organization.
Subd. 13. [NCPDP.] "NCPDP" means the national council for
prescription drug programs, inc.
Subd. 14. [NCPDP TELECOMMUNICATION STANDARD FORMAT
3.2.] "NCPDP telecommunication standard format 3.2" means the
recommended transaction sets for claims transactions adopted by
the membership of NCPDP in 1992.
Subd. 15. [NCPDP TAPE BILLING AND PAYMENT FORMAT
2.0.] "NCPDP tape billing and payment format 2.0" means the
recommended transaction standards for batch processing claims
adopted by the membership of the NCPDP in 1993.
Subd. 16. [PROVIDER.] "Provider" or "health care provider"
has the meaning given in section 62J.03, subdivision 8.
Subd. 17. [UNIFORM BILLING FORM HCFA 1450.] "Uniform
billing form HCFA 1450" means the uniform billing form known as
the HCFA 1450 or UB92, developed by the national uniform billing
committee in 1992 and approved for implementation in October
1993.
Subd. 18. [UNIFORM BILLING FORM HCFA 1500.] "Uniform
billing form HCFA 1500" means the 1990 version of the health
insurance claim form, HCFA 1500, developed by the uniform claims
form task force of the federal health care financing
administration.
Subd. 19. [UNIFORM DENTAL BILLING FORM.] "Uniform dental
billing form" means the 1990 uniform dental claim form developed
by the American dental association.
Subd. 20. [UNIFORM PHARMACY BILLING FORM.] "Uniform
pharmacy billing form" means the national council for
prescription drug programs/universal claim form (NCPDP/UCF).
Subd. 21. [WEDI.] "WEDI" means the national workgroup for
electronic data interchange report issued in October, 1993.
Sec. 3. [62J.52] [ESTABLISHMENT OF UNIFORM BILLING FORMS.]
Subdivision 1. [UNIFORM BILLING FORM HCFA 1450.] (a) On
and after January 1, 1996, all institutional inpatient hospital
services, ancillary services, and institutionally owned or
operated outpatient services rendered by providers in Minnesota,
that are not being billed using an equivalent electronic billing
format, must be billed using the uniform billing form HCFA 1450,
except as provided in subdivision 5.
(b) The instructions and definitions for the use of the
uniform billing form HCFA 1450 shall be in accordance with the
uniform billing form manual specified by the commissioner. In
promulgating these instructions, the commissioner may utilize
the manual developed by the national uniform billing committee,
as adopted and finalized by the Minnesota uniform billing
committee.
(c) Services to be billed using the uniform billing form
HCFA 1450 include: institutional inpatient hospital services
and distinct units in the hospital such as psychiatric unit
services, physical therapy unit services, swing bed (SNF)
services, inpatient state psychiatric hospital services,
inpatient skilled nursing facility services, home health
services (Medicare part A), and hospice services; ancillary
services, where benefits are exhausted or patient has no
Medicare part A, from hospitals, state psychiatric hospitals,
skilled nursing facilities, and home health (Medicare part B);
and institutional owned or operated outpatient services such as
hospital outpatient services, including ambulatory surgical
center services, hospital referred laboratory services,
hospital-based ambulance services, and other hospital outpatient
services, skilled nursing facilities, home health, including
infusion therapy, freestanding renal dialysis centers,
comprehensive outpatient rehabilitation facilities (CORF),
outpatient rehabilitation facilities (ORF), rural health
clinics, community mental health centers, and any other health
care provider certified by the Medicare program to use this form.
(d) On and after January 1, 1996, a mother and newborn
child must be billed separately, and must not be combined on one
claim form.
Subd. 2. [UNIFORM BILLING FORM HCFA 1500.] (a) On and
after January 1, 1996, all noninstitutional health care services
rendered by providers in Minnesota except dental or pharmacy
providers, that are not currently being billed using an
equivalent electronic billing format, must be billed using the
health insurance claim form HCFA 1500, except as provided in
subdivision 5.
(b) The instructions and definitions for the use of the
uniform billing form HCFA 1500 shall be in accordance with the
manual developed by the administrative uniformity committee
entitled standards for the use of the HCFA 1500 form, dated
February 1994, as further defined by the commissioner.
(c) Services to be billed using the uniform billing form
HCFA 1500 include physician services and supplies, durable
medical equipment, noninstitutional ambulance services,
independent ancillary services including occupational therapy,
physical therapy, speech therapy and audiology, podiatry
services, optometry services, mental health licensed
professional services, substance abuse licensed professional
services, nursing practitioner professional services, certified
registered nurse anesthetists, chiropractors, physician
assistants, laboratories, medical suppliers, and other health
care providers such as home health intravenous therapy
providers, personal care attendants, day activity centers,
waivered services, hospice, and other home health services, and
freestanding ambulatory surgical centers.
Subd. 3. [UNIFORM DENTAL BILLING FORM.] (a) On and after
January 1, 1996, all dental services provided by dental care
providers in Minnesota, that are not currently being billed
using an equivalent electronic billing format, shall be billed
using the American dental association uniform dental billing
form.
(b) The instructions and definitions for the use of the
uniform dental billing form shall be in accordance with the
manual developed by the administrative uniformity committee
dated February 1994, and as amended or further defined by the
commissioner.
Subd. 4. [UNIFORM PHARMACY BILLING FORM.] (a) On and after
January 1, 1996, all pharmacy services provided by pharmacists
in Minnesota that are not currently being billed using an
equivalent electronic billing format shall be billed using the
NCPDP/universal claim form, except as provided in subdivision 5.
(b) The instructions and definitions for the use of the
uniform claim form shall be in accordance with instructions
specified by the commissioner of health, except as provided in
subdivision 5.
Subd. 5. [STATE AND FEDERAL HEALTH CARE PROGRAMS.] (a)
Skilled nursing facilities and ICF-MR services billed to state
and federal health care programs administered by the department
of human services shall use the form designated by the
department of human services.
(b) On and after July 1, 1996, state and federal health
care programs administered by the department of human services
shall accept the HCFA 1450 for community mental health center
services and shall accept the HCFA 1500 for freestanding
ambulatory surgical center services.
(c) State and federal health care programs administered by
the department of human services shall be authorized to use the
forms designated by the department of human services for
pharmacy services and for child and teen checkup services.
(d) State and federal health care programs administered by
the department of human services shall accept the form
designated by the department of human services, and the HCFA
1500 for supplies, medical supplies or durable medical
equipment. Health care providers may choose which form to
submit.
Sec. 4. [62J.53] [ACCEPTANCE OF UNIFORM BILLING FORMS BY
GROUP PURCHASERS.]
On and after January 1, 1996, all category I and II group
purchasers in Minnesota shall accept the uniform billing forms
prescribed under section 62J.52 as the only nonelectronic
billing forms used for payment processing purposes.
Sec. 5. [62J.54] [IDENTIFICATION AND IMPLEMENTATION OF
UNIQUE IDENTIFIERS.]
Subdivision 1. [UNIQUE IDENTIFICATION NUMBER FOR HEALTH
CARE PROVIDER ORGANIZATIONS.] (a) On and after January 1, 1996,
all group purchasers and health care providers in Minnesota
shall use a unique identification number to identify health care
provider organizations, except as provided in paragraph (d).
(b) Following the recommendation of the workgroup for
electronic data interchange, the federal tax identification
number assigned to each health care provider organization by the
internal revenue service of the department of the treasury shall
be used as the unique identification number for health care
provider organizations.
(c) The unique health care provider organization identifier
shall be used for purposes of submitting and receiving claims,
and in conjunction with other data collection and reporting
functions.
(d) The state and federal health care programs administered
by the department of human services shall use the unique
identification number assigned to health care providers for
implementation of the medicaid management information system or
the uniform provider identification number (UPIN) assigned by
the health care financing administration.
Subd. 2. [UNIQUE IDENTIFICATION NUMBER FOR INDIVIDUAL
HEALTH CARE PROVIDERS.] (a) On and after January 1, 1996, all
group purchasers and health care providers in Minnesota shall
use a unique identification number to identify an individual
health care provider, except as provided in paragraph (d).
(b) The uniform provider identification number (UPIN)
assigned by the health care financing administration shall be
used as the unique identification number for individual health
care providers. Providers who do not currently have a UPIN
number shall request one from the health care financing
administration.
(c) The unique individual health care provider identifier
shall be used for purposes of submitting and receiving claims,
and in conjunction with other data collection and reporting
functions.
(d) The state and federal health care programs administered
by the department of human services shall use the unique
identification number assigned to health care providers for
implementation of the medicaid management information system or
the uniform provider identification number (UPIN) assigned by
the health care financing administration.
Subd. 3. [UNIQUE IDENTIFICATION NUMBER FOR GROUP
PURCHASERS.] (a) On and after January 1, 1996, all group
purchasers and health care providers in Minnesota shall use a
unique identification number to identify group purchasers.
(b) The federal tax identification number assigned to each
group purchaser by the internal revenue service of the
department of the treasury shall be used as the unique
identification number for group purchasers. This paragraph
applies until the codes described in paragraph (c) are available
and feasible to use, as determined by the commissioner.
(c) A two-part code, consisting of 11 characters and
modeled after the national association of insurance
commissioners company code shall be assigned to each group
purchaser and used as the unique identification number for group
purchasers. The first six characters, or prefix, shall contain
the numeric code, or company code, assigned by the national
association of insurance commissioners. The last five
characters, or suffix, which is optional, shall contain further
codes that will enable group purchasers to further route
electronic transaction in their internal systems.
(d) The unique group purchaser identifier shall be used for
purposes of submitting and receiving claims, and in conjunction
with other data collection and reporting functions.
Subd. 4. [UNIQUE PATIENT IDENTIFICATION NUMBER.] (a) On
and after January 1, 1996, all group purchasers and health care
providers in Minnesota shall use a unique identification number
to identify each patient who receives health care services in
Minnesota, except as provided in paragraph (e).
(b) Except as provided in paragraph (d), following the
recommendation of the workgroup for electronic data interchange,
the social security number of the patient shall be used as the
unique patient identification number.
(c) The unique patient identification number shall be used
by group purchasers and health care providers for purposes of
submitting and receiving claims, and in conjunction with other
data collection and reporting functions.
(d) The commissioner shall develop an alternate numbering
system for patients who do not have or refuse to provide a
social security number. This provision does not require that
patients provide their social security numbers and does not
require group purchasers or providers to demand that patients
provide their social security numbers. Group purchasers and
health care providers shall establish procedures to notify
patients that they can elect not to have their social security
number used as the unique patient identification number.
(e) The state and federal health care programs administered
by the department of human services shall use the unique person
master index (PMI) identification number assigned to clients
participating in programs administered by the department of
human services.
Sec. 6. [62J.55] [PRIVACY OF UNIQUE IDENTIFIERS.]
(a) When the unique identifiers specified in section 62J.54
are used for data collection purposes, the identifiers must be
encrypted, as required in section 62J.30, subdivision 6.
Encryption must follow encryption standards set by the national
bureau of standards and approved by the American national
standards institute as ANSIX3. 92-1982/R 1987 to protect the
confidentiality of the data. Social security numbers must not
be maintained in unencrypted form in the database, and the data
must never be released in a form that would allow for the
identification of individuals. The encryption algorithm and
hardware used must not use clipper chip technology.
(b) Providers and group purchasers shall treat medical
records, including the social security number if it is used as a
unique patient identifier, in accordance with section 144.335.
The social security number may be disclosed by providers and
group purchasers to the commissioner as necessary to allow
performance of those duties set forth in section 144.05.
Sec. 7. [62J.56] [IMPLEMENTATION OF ELECTRONIC DATA
INTERCHANGE STANDARDS.]
Subdivision 1. [GENERAL PROVISIONS.] (a) The legislature
finds that there is a need to advance the use of electronic
methods of data interchange among all health care participants
in the state in order to achieve significant administrative cost
savings. The legislature also finds that in order to advance
the use of health care electronic data interchange in a
cost-effective manner, the state needs to implement electronic
data interchange standards that are nationally accepted, widely
recognized, and available for immediate use. The legislature
intends to set forth a plan for a systematic phase-in of uniform
health care electronic data interchange standards in all
segments of the health care industry.
(b) The commissioner of health, with the advice of the
Minnesota health data institute and the Minnesota administrative
uniformity committee, shall administer the implementation of and
monitor compliance with, electronic data interchange standards
of health care participants, according to the plan provided in
this section.
(c) The commissioner may grant exemptions to category I and
II industry participants from the requirements to implement some
or all of the provisions in this section if the commissioner
determines that the cost of compliance would place the
organization in financial distress, or if the commissioner
determines that appropriate technology is not available to the
organization.
Subd. 2. [IDENTIFICATION OF CORE TRANSACTION SETS.] (a)
All category I and II industry participants in Minnesota shall
comply with the standards developed by the ANSI ASC X12 for the
following core transaction sets, according to the implementation
plan outlined for each transaction set.
(1) ANSI ASC X12 835 health care claim payment/advice
transaction set.
(2) ANSI ASC X12 837 health care claim transaction set.
(3) ANSI ASC X12 834 health care enrollment transaction set.
(4) ANSI ASC X12 270/271 health care eligibility
transaction set.
(b) The commissioner, with the advice of the Minnesota
health data institute and the Minnesota administrative
uniformity committee, and in coordination with federal efforts,
may approve the use of new ASC X12 standards, or new versions of
existing standards, as they become available, or other
nationally recognized standards, where appropriate ASC X12
standards are not available for use. These alternative
standards may be used during a transition period while ASC X12
standards are developed.
Subd. 3. [IMPLEMENTATION GUIDES.] (a) The commissioner,
with the advice of the Minnesota administrative uniformity
committee, and the Minnesota Center for Health Care Electronic
Data Interchange shall review and recommend the use of guides to
implement the core transaction sets. Implementation guides must
contain the background and technical information required to
allow health care participants to implement the transaction set
in the most cost-effective way.
(b) The commissioner shall promote the development of
implementation guides among health care participants for those
business transaction types for which implementation guides are
not available, to allow providers and group purchasers to
implement electronic data interchange. In promoting the
development of these implementation guides, the commissioner
shall review the work done by the American hospital association
through the national uniform billing committee and its state
representative organization; the american medical association
through the uniform claim task force; the american dental
association; the national council of prescription drug programs;
and the workgroup for electronic data interchange.
Sec. 8. [62J.57] [MINNESOTA CENTER FOR HEALTH CARE
ELECTRONIC DATA INTERCHANGE.]
(a) It is the intention of the legislature to support, to
the extent of funds appropriated for that purpose, the creation
of the Minnesota center for health care electronic data
interchange as a broad-based effort of public and private
organizations representing group purchasers, health care
providers, and government programs to advance the use of health
care electronic data interchange in the state. The center shall
attempt to obtain private sector funding to supplement
legislative appropriations, and shall become self-supporting by
the end of the second year.
(b) The Minnesota center for health care electronic data
interchange shall facilitate the statewide implementation of
electronic data interchange standards in the health care
industry by:
(1) Coordinating and ensuring the availability of quality
electronic data interchange education and training in the state;
(2) Developing an extensive, cohesive health care
electronic data interchange education curriculum;
(3) Developing a communications and marketing plan to
publicize electronic data interchange education activities, and
the products and services available to support the
implementation of electronic data interchange in the state;
(4) Administering a resource center that will serve as a
clearinghouse for information relative to electronic data
interchange, including the development and maintenance of a
health care constituents data base, health care directory and
resource library, and a health care communications network
through the use of electronic bulletin board services and other
network communications applications; and
(5) Providing technical assistance in the development of
implementation guides, and in other issues including
legislative, legal, and confidentiality requirements.
Sec. 9. [62J.58] [IMPLEMENTATION OF STANDARD TRANSACTION
SETS.]
Subdivision 1. [CLAIMS PAYMENT.] (a) By July 1, 1995, all
category I industry participants, except pharmacists, shall be
able to submit or accept, as appropriate, the ANSI ASC X12 835
health care claim payment/advice transaction set (draft standard
for trial use version 3030) for electronic transfer of payment
information.
(b) By July 1, 1996, all category II industry participants,
except pharmacists, shall be able to submit or accept, as
appropriate, the ANSI ASC X12 835 health care claim
payment/advice transaction set (draft standard for trial use
version 3030) for electronic submission of payment information
to health care providers.
Subd. 2. [CLAIMS SUBMISSION.] Beginning July 1, 1995 , all
category I industry participants, except pharmacists, shall be
able to accept or submit, as appropriate, the ANSI ASC X12 837
health care claim transaction set (draft standard for trial use
version 3030) for the electronic transfer of health care claim
information. Category II industry participants, except
pharmacists, shall be able to accept or submit, as appropriate,
this transaction set, beginning July 1, 1996.
Subd. 3. [ENROLLMENT INFORMATION.] Beginning January 1,
1996, all category I industry participants, excluding
pharmacists, shall be able to accept or submit, as appropriate,
the ANSI ASC X12 834 health care enrollment transaction set
(draft standard for trial use version 3030) for the electronic
transfer of enrollment and health benefit information. Category
II industry participants, except pharmacists, shall be able to
accept or submit, as appropriate, this transaction set,
beginning January 1, 1997.
Subd. 4. [ELIGIBILITY INFORMATION.] By January 1, 1996,
all category I industry participants, except pharmacists, shall
be able to accept or submit, as appropriate, the ANSI ASC X12
270/271 health care eligibility transaction set (draft standard
for trial use version 3030) for the electronic transfer of
health benefit eligibility information. Category II industry
participants, except pharmacists, shall be able to accept or
submit, as appropriate, this transaction set, beginning January
1, 1997.
Subd. 5. [APPLICABILITY.] This section does not require a
group purchaser, health care provider, or employer to use
electronic data interchange or to have the capability to do so.
This section applies only to the extent that a group purchaser,
health care provider, or employer chooses to use electronic data
interchange.
Sec. 10. [62J.59] [IMPLEMENTATION OF NCPDP
TELECOMMUNICATIONS STANDARD FOR PHARMACY CLAIMS.]
(a) Beginning January 1, 1996, all category I and II
pharmacists licensed in this state shall accept the NCPDP
telecommunication standard format 3.2 or the NCPDP tape billing
and payment format 2.0 for the electronic submission of claims
as appropriate.
(b) Beginning January 1, 1996, all category I and category
II group purchasers in this state shall use the NCPDP
telecommunication standard format 3.2 or NCPDP tape billing and
payment format 2.0 for electronic submission of payment
information to pharmacists.
Sec. 11. [62J.60] [STANDARDS FOR THE MINNESOTA UNIFORM
HEALTH CARE IDENTIFICATION CARD.]
Subdivision 1. [MINNESOTA HEALTH CARE IDENTIFICATION
CARD.] All individuals with health care coverage shall be issued
health care identification cards by group purchasers as of
January 1, 1998. The health care identification cards shall
comply with the standards prescribed in this section.
Subd. 2. [GENERAL CHARACTERISTICS.] (a) The Minnesota
health care identification card must be a pre-printed card
constructed of plastic, paper, or any other medium that conforms
with ANSI and ISO 7810 physical characteristics standards. The
card dimensions must also conform to ANSI and ISO 7810 physical
characteristics standard. The use of a signature panel is
optional.
(b) The Minnesota health care identification card must have
an essential information window in the front side with the
following data elements left justified in the following top to
bottom sequence: issuer name, issuer number, identification
number, identification name. No optional data may be
interspersed between these data elements. The window must be
left justified.
(c) Standardized labels are required next to human readable
data elements. The card issuer may decide the location of the
standardized label relative to the data element.
Subd. 3. [HUMAN READABLE DATA ELEMENTS.] (a) The following
are the minimum human readable data elements that must be
present on the front side of the Minnesota health care
identification card:
(1) Issuer name or logo, which is the name or logo that
identifies the card issuer. The issuer name or logo may be the
card's front background. No standard label is required for this
data element;
(2) Issuer number, which is the unique card issuer number
consisting of a base number assigned by a registry process
followed by a suffix number assigned by the card issuer. The
use of this element is mandatory within one year of the
establishment of a process for this identifier. The
standardized label for this element is "Issuer";
(3) Identification number, which is the unique
identification number of the individual card holder established
and defined under this section. The standardized label for the
data element is "ID";
(4) Identification name, which is the name of the
individual card holder. The identification name must be
formatted as follows: first name, space, optional middle
initial, space, last name, optional space and name suffix. The
standardized label for this data element is "Name";
(5) Account number(s), which is any other number, such as a
group number, if required for part of the identification or
claims process. The standardized label for this data element is
"Account";
(6) Care type, which is the description of the group
purchaser's plan product under which the beneficiary is
covered. The description shall include the health plan company
name and the plan or product name. The standardized label for
this data element is "Care Type";
(7) Service type, which is the description of coverage
provided such as hospital, dental, vision, prescription, or
mental health. The standard label for this data element is "Svc
Type"; and
(8) Provider/clinic name, which is the name of the primary
care clinic the cardholder is assigned to by the health plan
company. The standard label for this field is "PCP." This
information is mandatory only if the health plan company assigns
a specific primary care provider to the cardholder.
(b) The following human readable data elements shall be
present on the back side of the Minnesota health identification
card. These elements must be left justified, and no optional
data elements may be interspersed between them:
(1) Claims submission name(s) and address(es), which are
the name(s) and address(es) of the entity or entities to which
claims should be submitted. If different destinations are
required for different types of claims, this must be labeled;
(2) Telephone number(s) and name(s); which are the
telephone number(s) and name(s) of the following contact(s) with
a standardized label describing the service function as
applicable:
(i) eligibility and benefit information;
(ii) utilization review;
(iii) pre-certification; or
(iv) customer services.
(c) The following human readable data elements are
mandatory on the back side of the card for health maintenance
organizations and integrated service networks:
(1) emergency care authorization telephone number or
instruction on how to receive authorization for emergency care.
There is no standard label required for this information; and
(2) telephone number to call to appeal to the commissioner
of health. There is no standard label required for this
information.
(d) All human readable data elements not required under
paragraphs (a) to (c) are optional and may be used at the
issuer's discretion.
Subd. 4. [MACHINE READABLE DATA CONTENT.] The Minnesota
health care identification card may be machine readable or
nonmachine readable. If the card is machine readable, the card
must contain a magnetic stripe that conforms to ANSI and ISO
standards for Tracks 1.
Sec. 12. [62J.61] [RULEMAKING; IMPLEMENTATION.]
The commissioner of health is exempt from rulemaking in
implementing sections 62J.50 to 62J.54, subdivision 3, and
62J.56 to 62J.59. The commissioner shall publish proposed rules
in the State Register. Interested parties have 30 days to
comment on the proposed rules. After the commissioner has
considered all comments, the commissioner shall publish the
final rules in the State Register 30 days before they are to
take effect. The commissioner may use emergency and permanent
rulemaking to implement the remainder of this article. The
commissioner shall not adopt any rules requiring patients to
provide their social security numbers unless and until federal
laws are modified to allow or require such action nor shall the
commissioner adopt rules which allow medical records, claims, or
other treatment or clinical data to be included on the health
care identification card, except as specifically provided in
this chapter. The commissioner shall seek comments from the
ethics and confidentiality committee of the Minnesota health
data institute and the department of administration, public
information policy analysis division, before adopting or
publishing final rules relating to issues of patient privacy and
medical records.
Sec. 13. [COMMISSIONER; CONTINUED SIMPLIFICATION.]
The commissioner of health shall continue to develop
additional standard billing and administrative procedure
simplification. These may include reduction or elimination of
payer-required attachments to claims, standard formularies,
standard format for direct patient billing, and increasing
standardization of claims forms and EDI formats.
Sec. 14. [EVALUATIONS.]
Subdivision 1. [UNIQUE EMPLOYER IDENTIFICATION
NUMBER.] The commissioner of health shall evaluate the need for
the development and implementation of unique employer
identification numbers to identify employers or entities that
provide health care coverage.
Subd. 2. [UNIQUE "ISSUER" IDENTIFICATION NUMBER.] The
commissioner of health shall evaluate the need for the
development and implementation of unique identification numbers
to identify issuers of health care identification cards.
Sec. 15. [EFFECTIVE DATE.]
Sections 1 to 14 are effective the day following final
enactment.
ARTICLE 10
INSURANCE REFORM
Section 1. Minnesota Statutes 1993 Supplement, section
43A.317, is amended by adding a subdivision to read:
Subd. 12. [STATUS OF AGENTS.] Notwithstanding section
60K.03, subdivision 5, and 72A.07, the program may use, and pay
referral fees, commissions, or other compensation to, agents
licensed as life and health agents under chapter 60K or licensed
under section 62C.17, regardless of whether the agents are
appointed to represent the particular health carriers,
integrated service networks, or community integrated service
networks that provide the coverage available through the
program. When acting under this subdivision, an agent is not an
agent of the health carrier, integrated service network, or
community integrated service network, with respect to that
transaction.
Sec. 2. Minnesota Statutes 1993 Supplement, section
60K.14, subdivision 7, is amended to read:
Subd. 7. [DISCLOSURE OF COMMISSIONS.] Before selling, or
offering to sell, any health insurance or a health plan as
defined in section 62A.011, subdivision 3, an agent shall
disclose in writing to the prospective purchaser the amount of
any commission or other compensation the agent will receive as a
direct result of the sale. The disclosure may be expressed in
dollars or as a percentage of the premium. The amount disclosed
need not include any anticipated renewal commissions.
Sec. 3. Minnesota Statutes 1993 Supplement, section
62A.011, subdivision 3, is amended to read:
Subd. 3. [HEALTH PLAN.] "Health plan" means a policy or
certificate of accident and sickness insurance as defined in
section 62A.01 offered by an insurance company licensed under
chapter 60A; a subscriber contract or certificate offered by a
nonprofit health service plan corporation operating under
chapter 62C; a health maintenance contract or certificate
offered by a health maintenance organization operating under
chapter 62D; a health benefit certificate offered by a fraternal
benefit society operating under chapter 64B; or health coverage
offered by a joint self-insurance employee health plan operating
under chapter 62H. Health plan means individual and group
coverage, unless otherwise specified. Health plan does not
include coverage that is:
(1) limited to disability or income protection coverage;
(2) automobile medical payment coverage;
(3) supplemental to liability insurance;
(4) designed solely to provide payments on a per diem,
fixed indemnity, or nonexpense-incurred basis;
(5) credit accident and health insurance as defined in
section 62B.02;
(6) designed solely to provide dental or vision care;
(7) blanket accident and sickness insurance as defined in
section 62A.11;
(8) accident-only coverage;
(9) a long-term care policy as defined in section 62A.46;
(10) issued as a supplement to Medicare, 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 through December 31, 1991;
(11) workers' compensation insurance; or
(12) issued solely as a companion to a health maintenance
contract as described in section 62D.12, subdivision 1a, so long
as the health maintenance contract meets the definition of a
health plan.
Sec. 4. Minnesota Statutes 1992, section 62A.303, is
amended to read:
62A.303 [PROHIBITION; SEVERING OF GROUPS.]
Section 62L.12, subdivisions 1, 2, 3, and 4, apply to all
employer group health plans, as defined in section 62A.011,
regardless of the size of the group.
Sec. 5. [62A.306] [USE OF GENDER PROHIBITED.]
Subdivision 1. [APPLICABILITY.] This section applies to
all health plans as defined in section 62A.011 offered, sold,
issued, or renewed, by a health carrier on or after January 1,
1995.
Subd. 2. [PROHIBITION ON USE OF GENDER.] No health plan
described in subdivision 1 shall determine the premium rate or
any other underwriting decision, including initial issuance,
through a method that is in any way based upon the gender of any
person covered or to be covered under the health plan. This
subdivision prohibits use of marital status or generalized
differences in expected costs between employees and spouses or
between principal insureds and their spouses.
Sec. 6. Minnesota Statutes 1993 Supplement, section
62A.31, subdivision 1h, is amended to read:
Subd. 1h. [LIMITATIONS ON DENIALS, CONDITIONS, AND PRICING
OF COVERAGE.] No issuer of Medicare supplement policies,
including policies that supplement Medicare issued by health
maintenance organizations or those policies governed by section
1833 or 1876 of the federal Social Security Act, United States
Code, title 42, section 1395, et seq., in this state may impose
preexisting condition limitations or otherwise deny or condition
the issuance or effectiveness of any Medicare supplement
insurance policy form available for sale in this state, nor may
it discriminate in the pricing of such a policy, because of the
health status, claims experience, receipt of health care, or
medical condition of an applicant where an application for such
insurance is submitted during the six-month period beginning
with the first month in which an individual first enrolled for
benefits under Medicare Part B. This paragraph applies
regardless of whether the individual has attained the age of 65
years. If an individual who is enrolled in Medicare Part B due
to disability status is involuntarily disenrolled due to loss of
disability status, the individual is eligible for the six-month
enrollment period provided under this subdivision if the
individual later becomes eligible for and enrolls again in
Medicare Part B.
Sec. 7. Minnesota Statutes 1993 Supplement, section
62A.36, subdivision 1, is amended to read:
Subdivision 1. [LOSS RATIO STANDARDS.] (a) For purposes of
this section, "Medicare supplement policy or certificate" has
the meaning given in section 62A.31, subdivision 3, but also
includes a policy, contract, or certificate issued under a
contract under section 1833 or 1876 of the federal Social
Security Act, United States Code, title 42, section 1395 et
seq. A Medicare supplement policy form or certificate form
shall not be delivered or issued for delivery unless the policy
form or certificate form can be expected, as estimated for the
entire period for which rates are computed to provide coverage,
to return to policyholders and certificate holders in the form
of aggregate benefits, not including anticipated refunds or
credits, provided under the policy form or certificate form:
(1) at least 75 percent of the aggregate amount of premiums
earned in the case of group policies, and
(2) at least 65 percent of the aggregate amount of premiums
earned in the case of individual policies, calculated on the
basis of incurred claims experience or incurred health care
expenses where coverage is provided by a health maintenance
organization on a service rather than reimbursement basis and
earned premiums for the period and according to accepted
actuarial principles and practices. An insurer shall
demonstrate that the third year loss ratio is greater than or
equal to the applicable percentage.
All filings of rates and rating schedules shall demonstrate
that expected claims in relation to premiums comply with the
requirements of this section when combined with actual
experience to date. Filings of rate revisions shall also
demonstrate that the anticipated loss ratio over the entire
future period for which the revised rates are computed to
provide coverage can be expected to meet the appropriate loss
ratio standards, and aggregate loss ratio from inception of the
policy or certificate shall equal or exceed the appropriate loss
ratio standards.
An application form for a Medicare supplement policy or
certificate, as defined in this section, must prominently
disclose the anticipated loss ratio and explain what it means.
(b) An issuer shall collect and file with the commissioner
by May 31 of each year the data contained in the National
Association of Insurance Commissioners Medicare Supplement
Refund Calculating form, for each type of Medicare supplement
benefit plan.
If, on the basis of the experience as reported, the
benchmark ratio since inception (ratio 1) exceeds the adjusted
experience ratio since inception (ratio 3), then a refund or
credit calculation is required. The refund calculation must be
done on a statewide basis for each type in a standard Medicare
supplement benefit plan. For purposes of the refund or credit
calculation, experience on policies issued within the reporting
year shall be excluded.
A refund or credit shall be made only when the benchmark
loss ratio exceeds the adjusted experience loss ratio and the
amount to be refunded or credited exceeds a de minimis level.
The refund shall include interest from the end of the calendar
year to the date of the refund or credit at a rate specified by
the secretary of health and human services, but in no event
shall it be less than the average rate of interest for 13-week
treasury bills. A refund or credit against premiums due shall
be made by September 30 following the experience year on which
the refund or credit is based.
(c) An issuer of Medicare supplement policies and
certificates in this state shall file annually its rates, rating
schedule, and supporting documentation including ratios of
incurred losses to earned premiums by policy or certificate
duration for approval by the commissioner according to the
filing requirements and procedures prescribed by the
commissioner. The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice
using reasonable assumptions that the appropriate loss ratio
standards can be expected to be met over the entire period for
which rates are computed. The demonstration shall exclude
active life reserves. An expected third-year loss ratio which
is greater than or equal to the applicable percentage shall be
demonstrated for policies or certificates in force less than
three years.
As soon as practicable, but before the effective date of
enhancements in Medicare benefits, every issuer of Medicare
supplement policies or certificates in this state shall file
with the commissioner, in accordance with the applicable filing
procedures of this state:
(1) a premium adjustment that is necessary to produce an
expected loss ratio under the policy or certificate that will
conform with minimum loss ratio standards for Medicare
supplement policies or certificates. No premium adjustment that
would modify the loss ratio experience under the policy or
certificate other than the adjustments described herein shall be
made with respect to a policy or certificate at any time other
than on its renewal date or anniversary date;
(2) if an issuer fails to make premium adjustments
acceptable to the commissioner, the commissioner may order
premium adjustments, refunds, or premium credits considered
necessary to achieve the loss ratio required by this section;
(3) any appropriate riders, endorsements, or policy or
certificate forms needed to accomplish the Medicare supplement
insurance policy or certificate modifications necessary to
eliminate benefit duplications with Medicare. The riders,
endorsements, or policy or certificate forms shall provide a
clear description of the Medicare supplement benefits provided
by the policy or certificate.
(d) The commissioner may conduct a public hearing to gather
information concerning a request by an issuer for an increase in
a rate for a policy form or certificate form if the experience
of the form for the previous reporting period is not in
compliance with the applicable loss ratio standard. The
determination of compliance is made without consideration of a
refund or credit for the reporting period. Public notice of the
hearing shall be furnished in a manner considered appropriate by
the commissioner.
(e) An issuer shall not use or change premium rates for a
Medicare supplement policy or certificate unless the rates,
rating schedule, and supporting documentation have been filed
with, and approved by, the commissioner according to the filing
requirements and procedures prescribed by the commissioner.
Sec. 8. Minnesota Statutes 1993 Supplement, section
62A.65, subdivision 2, is amended to read:
Subd. 2. [GUARANTEED RENEWAL.] No individual health plan
may be offered, sold, issued, or renewed to a Minnesota resident
unless the health plan provides that the plan is guaranteed
renewable at a premium rate that does not take into account the
claims experience or any change in the health status of any
covered person that occurred after the initial issuance of the
health plan to the person. The premium rate upon renewal must
also otherwise comply with this section. A health carrier must
not refuse to renew an individual health plan may be subject to
refusal to renew only under the conditions provided in chapter
62L for health benefit plans prior to enrollment in Medicare
Parts A and B, except for nonpayment of premiums, fraud, or
misrepresentation.
Sec. 9. Minnesota Statutes 1993 Supplement, 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 rating and premium restrictions provided
under chapter 62L, except that the minimum loss ratio applicable
to an individual health plan is as provided in section 62A.021.
All rating and premium restrictions of chapter 62L apply to the
individual market, unless clearly inapplicable to the individual
market. 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) The rates must not be approved, unless the commissioner
has determined that the rates are reasonable. In determining
reasonableness, the commissioner shall consider the growth rates
applied under section 62J.04, subdivision 1, paragraph (b), to
the calendar year or years that the proposed premium rate would
be in effect, actuarially valid changes in risks associated with
the enrollee populations, and actuarially valid changes as a
result of statutory changes in Laws 1992, chapter 549.
Sec. 10. Minnesota Statutes 1993 Supplement, section
62A.65, subdivision 4, is amended to read:
Subd. 4. [GENDER RATING PROHIBITED.] No individual health
plan offered, sold, issued, or renewed to a Minnesota resident
may determine the premium rate or any other underwriting
decision, including initial issuance, on through a method that
is in any way based upon the gender of any person covered or to
be covered under the health plan. This subdivision prohibits
the use of marital status or generalized differences in expected
costs between principal insureds and their spouses.
Sec. 11. Minnesota Statutes 1993 Supplement, section
62A.65, subdivision 5, is amended to read:
Subd. 5. [PORTABILITY OF COVERAGE.] (a) No individual
health plan may be offered, sold, issued, or with respect to
children age 18 or under renewed, to a Minnesota resident that
contains a preexisting condition limitation or exclusion or
exclusionary rider, unless the limitation or exclusion would be
is permitted under chapter 62L this subdivision, provided that,
except for children age 18 or under, underwriting restrictions
may be retained on individual contracts that are issued without
evidence of insurability as a replacement for prior individual
coverage that was sold before May 17, 1993. The individual may
be treated as a late entrant, as defined in chapter
62L subjected to an 18-month preexisting condition limitation,
unless the individual has maintained continuous coverage as
defined in chapter 62L section 62L.02. The individual must not
be subjected to an exclusionary rider. An individual who has
maintained continuous coverage may be subjected to a one-time
preexisting condition limitation as permitted under chapter 62L
for persons who are not late entrants, of up to 12 months, with
credit for time covered under qualifying coverage as defined in
section 62L.02, at the time that the individual first is covered
under an individual health plan by any health carrier. The
individual must not be subjected to an exclusionary rider.
Thereafter, the individual must not be subject to any
preexisting condition limitation or exclusion or exclusionary
rider under an individual health plan by any health carrier,
except an unexpired portion of a limitation under prior
coverage, so long as the individual maintains continuous
coverage.
(b) A health carrier must offer an individual health plan
to any individual previously covered under a group health
benefit plan issued by that health carrier, regardless of the
size of the group, so long as the individual maintained
continuous coverage as defined in chapter 62L section
62L.02. The offer must not be subject to underwriting, except
as permitted under this paragraph. A health plan issued under
this paragraph must be a qualified plan and must not contain any
preexisting condition limitation or exclusion or exclusionary
rider, except for any unexpired limitation or exclusion under
the previous coverage. The individual health plan must cover
pregnancy on the same basis as any other covered illness under
the individual health plan. The initial premium rate for the
individual health plan must comply with subdivision 3. The
premium rate upon renewal must comply with subdivision 2. In no
event shall the premium rate exceed 90 percent of the premium
charged for comparable individual coverage by the Minnesota
comprehensive health association, and the premium rate must be
less than that amount if necessary to otherwise comply with this
section. An individual health plan offered under this paragraph
to a person satisfies the health carrier's obligation to offer
conversion coverage under section 62E.16, with respect to that
person. Section 72A.20, subdivision 28, applies to this
paragraph.
Sec. 12. Minnesota Statutes 1993 Supplement, section
62A.65, is amended by adding a subdivision to read:
Subd. 8. [CESSATION OF INDIVIDUAL BUSINESS.]
Notwithstanding the provisions of subdivisions 1 to 7, a health
carrier may elect to cease doing business in the individual
market if it complies with the requirements of this
subdivision. A health carrier electing to cease doing business
in the individual market shall notify the commissioner 180 days
prior to the effective date of the cessation. The cessation of
business does not include the failure of a health carrier to
offer or issue new business in the individual market or continue
an existing product line, provided that a health carrier does
not terminate, cancel, or fail to renew its current individual
business or other product lines. A health carrier electing to
cease doing business in the individual market shall provide 120
days' written notice to each policyholder covered by a health
plan issued by the health carrier. A health carrier that ceases
to write new business in the individual market shall continue to
be governed by this section with respect to continuing
individual business conducted by the carrier. A health carrier
that ceases to do business in the individual market after July
1, 1994, is prohibited from writing new business in the
individual market in this state for a period of five years from
the date of notice to the commissioner. This subdivision
applies to any health maintenance organization that ceases to do
business in the individual market in one service area with
respect to that service area only. Nothing in this subdivision
prohibits an affiliated health maintenance organization from
continuing to do business in the individual market in that same
service area. The right to cancel or refuse to renew an
individual health plan under this subdivision does not apply to
individual health plans originally issued prior to July 1, 1993,
on a guaranteed renewable basis.
Sec. 13. Minnesota Statutes 1993 Supplement, section
62D.12, subdivision 17, is amended to read:
Subd. 17. [DISCLOSURE OF COMMISSIONS.] Any person
receiving commissions for the sale of coverage or enrollment
in a health plan, as defined in section 62A.011, offered by a
health maintenance organization shall, before selling or
offering to sell coverage or enrollment, disclose in writing to
the prospective purchaser the amount of any commission or other
compensation the person will receive as a direct result of the
sale. The disclosure may be expressed in dollars or as a
percentage of the premium. The amount disclosed need not
include any anticipated renewal commissions.
Sec. 14. Minnesota Statutes 1992, section 62E.141, is
amended to read:
62E.141 [INCLUSION IN EMPLOYER-SPONSORED PLAN.]
No employee, or dependent of an employee, of an employer
who that offers a health benefit plan, under which the employee
or dependent is eligible to enroll under chapter 62L for
coverage, is eligible to enroll, or continue to be enrolled, in
the comprehensive health association, except for enrollment or
continued enrollment necessary to cover conditions that are
subject to an unexpired preexisting condition limitation or
exclusion or exclusionary rider under the employer's
health benefit plan. This section does not apply to persons
enrolled in the comprehensive health association as of June 30,
1993. With respect to persons eligible to enroll in the health
plan of an employer that has more than 29 current employees, as
defined in section 62L.02, this section does not apply to
persons enrolled in the comprehensive health association as of
December 31, 1994.
Sec. 15. Minnesota Statutes 1992, section 62E.16, is
amended to read:
62E.16 [POLICY CONVERSION RIGHTS.]
Every program of self-insurance, policy of group accident
and health insurance or contract of coverage by a health
maintenance organization written or renewed in this state, shall
include, in addition to the provisions required by section
62A.17, the right to convert to an individual coverage qualified
plan without the addition of underwriting restrictions if the
individual insured leaves the group regardless of the reason for
leaving the group or if an employer member of a group ceases to
remit payment so as to terminate coverage for its employees, or
upon cancellation or termination of the coverage for the group
except where uninterrupted and continuous group coverage is
otherwise provided to the group. If the health maintenance
organization has canceled coverage for the group because of a
loss of providers in a service area, the health maintenance
organization shall arrange for other health maintenance or
indemnity conversion options that shall be offered to enrollees
without the addition of underwriting restrictions. The required
conversion contract must treat pregnancy the same as any other
covered illness under the conversion contract. The person may
exercise this right to conversion within 30 days of leaving the
group or within 30 days following receipt of due notice of
cancellation or termination of coverage of the group or of the
employer member of the group and upon payment of premiums from
the date of termination or cancellation. Due notice of
cancellation or termination of coverage for a group or of the
employer member of the group shall be provided to each employee
having coverage in the group by the insurer, self-insurer or
health maintenance organization canceling or terminating the
coverage except where reasonable evidence indicates that
uninterrupted and continuous group coverage is otherwise
provided to the group. Every employer having a policy of group
accident and health insurance, group subscriber or contract of
coverage by a health maintenance organization shall, upon
request, provide the insurer or health maintenance organization
a list of the names and addresses of covered employees. Plans
of health coverage shall also include a provision which, upon
the death of the individual in whose name the contract was
issued, permits every other individual then covered under the
contract to elect, within the period specified in the contract,
to continue coverage under the same or a different contract
without the addition of underwriting restrictions until the
individual would have ceased to have been entitled to coverage
had the individual in whose name the contract was issued lived.
An individual conversion contract issued by a health maintenance
organization shall not be deemed to be an individual enrollment
contract for the purposes of section 62D.10. An individual
health plan offered under section 62A.65, subdivision 5,
paragraph (b), to a person satisfies the health carrier's
obligation to offer conversion coverage under this section with
respect to that person.
Sec. 16. Minnesota Statutes 1993 Supplement, section
62L.02, subdivision 8, is amended to read:
Subd. 8. [COMMISSIONER.] "Commissioner" means the
commissioner of commerce for health carriers subject to the
jurisdiction of the department of commerce or the commissioner
of health for health carriers subject to the jurisdiction of the
department of health, or the relevant commissioner's designated
representative. For purposes of sections 62L.13 to 62L.22,
"commissioner" means the commissioner of commerce or that
commissioner's designated representative.
Sec. 17. Minnesota Statutes 1992, section 62L.02,
subdivision 9, is amended to read:
Subd. 9. [CONTINUOUS COVERAGE.] "Continuous coverage"
means the maintenance of continuous and uninterrupted qualifying
prior coverage by an eligible employee or dependent.
An eligible employee or dependent individual is considered to
have maintained continuous coverage if the individual requests
enrollment in a health benefit plan qualifying coverage within
30 days of termination of the qualifying prior coverage.
Sec. 18. Minnesota Statutes 1992, section 62L.02, is
amended by adding a subdivision to read:
Subd. 9a. [CURRENT EMPLOYEE.] "Current employee" means an
employee, as defined in this section, other than a retiree or
handicapped former employee.
Sec. 19. Minnesota Statutes 1993 Supplement, section
62L.02, subdivision 11, is amended to read:
Subd. 11. [DEPENDENT.] "Dependent" means an eligible
employee's spouse, unmarried child who is under the age of 19
years, unmarried child under the age of 25 years who is a
full-time student as defined in section 62A.301 and financially
dependent upon the eligible employee, or, dependent child of any
age who is handicapped and who meets the eligibility criteria in
section 62A.14, subdivision 2, or any other person whom state or
federal law requires to be treated as a dependent for purposes
of health plans. For the purpose of this definition, a child
may include a child for whom the employee or the employee's
spouse has been appointed legal guardian.
Sec. 20. Minnesota Statutes 1992, section 62L.02,
subdivision 13, is amended to read:
Subd. 13. [ELIGIBLE EMPLOYEE.] "Eligible employee" means
an individual employed by a small employer for at least 20 hours
per week and employee who has satisfied all employer
participation and eligibility requirements, including, but not
limited to, the satisfactory completion of a probationary period
of not less than 30 days but no more than 90 days. The term
includes a sole proprietor, a partner of a partnership, or an
independent contractor, if the sole proprietor, partner, or
independent contractor is included as an employee under a health
benefit plan of a small employer, but does not include employees
who work on a temporary, seasonal, or substitute basis.
Sec. 21. Minnesota Statutes 1992, section 62L.02, is
amended by adding a subdivision to read:
Subd. 13a. [EMPLOYEE.] "Employee" means an individual
employed for at least 20 hours per week and includes a sole
proprietor or a partner of a partnership, if the sole proprietor
or partner is included under a health benefit plan of the
employer, but does not include individuals who work on a
temporary, seasonal, or substitute basis. "Employee" also
includes a retiree or a handicapped former employee required to
be covered under sections 62A.147 and 62A.148.
Sec. 22. Minnesota Statutes 1992, section 62L.02, is
amended by adding a subdivision to read:
Subd. 14a. [GUARANTEED ISSUE.] "Guaranteed issue" means
that a health carrier shall not decline an application by a
small employer for any health benefit plan offered by that
health carrier and shall not decline to cover under a health
benefit plan any eligible employee or eligible dependent,
including persons who become eligible employees or eligible
dependents after initial issuance of the health benefit plan,
subject to the health carrier's right to impose preexisting
condition limitations permitted under this chapter.
Sec. 23. Minnesota Statutes 1993 Supplement, section
62L.02, subdivision 15, is amended to read:
Subd. 15. [HEALTH BENEFIT PLAN.] "Health benefit plan"
means a policy, contract, or certificate offered, sold, issued,
or renewed by a health carrier to a small employer for the
coverage of medical and hospital benefits. Health benefit plan
includes a small employer plan. Health benefit plan does not
include coverage that is:
(1) limited to disability or income protection coverage;
(2) automobile medical payment coverage;
(3) supplemental to liability insurance;
(4) designed solely to provide payments on a per diem,
fixed indemnity, or nonexpense-incurred basis;
(5) credit accident and health insurance as defined in
section 62B.02;
(6) designed solely to provide dental or vision care;
(7) blanket accident and sickness insurance as defined in
section 62A.11;
(8) accident-only coverage;
(9) a long-term care policy as defined in section 62A.46;
(10) issued as a supplement to Medicare, 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 through December 31, 1991;
(11) workers' compensation insurance; or
(12) issued solely as a companion to a health maintenance
contract as described in section 62D.12, subdivision 1a, so long
as the health maintenance contract meets the definition of a
health benefit plan.
For the purpose of this chapter, a health benefit plan
issued to eligible employees of a small employer who meets the
participation requirements of section 62L.03, subdivision 3, is
considered to have been issued to a small employer. A health
benefit plan issued on behalf of a health carrier is considered
to be issued by the health carrier.
Sec. 24. Minnesota Statutes 1993 Supplement, section
62L.02, subdivision 16, is amended to read:
Subd. 16. [HEALTH CARRIER.] "Health carrier" means an
insurance company licensed under chapter 60A to offer, sell, or
issue a policy of accident and sickness insurance as defined in
section 62A.01; a health service plan licensed under chapter
62C; a health maintenance organization licensed under chapter
62D; a fraternal benefit society operating under chapter 64B; a
joint self-insurance employee health plan operating under
chapter 62H; and a multiple employer welfare arrangement, as
defined in United States Code, title 29, section 1002(40), as
amended through December 31, 1991. For purposes of sections
62L.01 to 62L.12, but not for purposes of sections 62L.13 to
62L.22, "health carrier" includes a community integrated service
network or integrated service network licensed under chapter 62N.
Any use of this definition in another chapter by reference does
not include a community integrated service network or integrated
service network, unless otherwise specified. For the purpose of
this chapter, companies that are affiliated companies or that
are eligible to file a consolidated tax return must be treated
as one health carrier, except that any insurance company or
health service plan corporation that is an affiliate of a health
maintenance organization located in Minnesota, or any health
maintenance organization located in Minnesota that is an
affiliate of an insurance company or health service plan
corporation, or any health maintenance organization that is an
affiliate of another health maintenance organization in
Minnesota, may treat the health maintenance organization as a
separate health carrier.
Sec. 25. Minnesota Statutes 1992, section 62L.02,
subdivision 17, is amended to read:
Subd. 17. [HEALTH PLAN.] "Health plan" means a health
benefit plan issued by a health carrier, except that it may be
issued:
(1) to a small employer;
(2) to an employer who does not satisfy the definition of a
small employer as defined under subdivision 26; or
(3) to an individual purchasing an individual or conversion
policy of health care coverage issued by a health carrier as
defined in section 62A.011 and includes individual and group
coverage regardless of the size of the group, unless otherwise
specified.
Sec. 26. Minnesota Statutes 1993 Supplement, section
62L.02, subdivision 19, is amended to read:
Subd. 19. [LATE ENTRANT.] "Late entrant" means an eligible
employee or dependent who requests enrollment in a health
benefit plan of a small employer following the initial
enrollment period applicable to the employee or dependent under
the terms of the health benefit plan, provided that the initial
enrollment period must be a period of at least 30 days.
However, an eligible employee or dependent must not be
considered a late entrant if:
(1) the individual was covered under qualifying existing
coverage at the time the individual was eligible to enroll in
the health benefit plan, declined enrollment on that basis, and
presents to the health carrier a certificate of termination of
the qualifying prior coverage, due to loss of eligibility for
that coverage, provided that the individual maintains continuous
coverage. For purposes of this clause, eligibility for prior
coverage does not include eligibility for an individual is not a
late entrant if the individual elects coverage under the health
benefit plan rather than accepting continuation coverage
required for which the individual is eligible under state or
federal law with respect to the individual's previous qualifying
coverage;
(2) the individual has lost coverage under another group
health plan due to the expiration of benefits available under
the Consolidated Omnibus Budget Reconciliation Act of 1985,
Public Law Number 99-272, as amended, and any state continuation
laws applicable to the employer or health carrier, provided that
the individual maintains continuous coverage;
(3) the individual is a new spouse of an eligible employee,
provided that enrollment is requested within 30 days of becoming
legally married;
(4) the individual is a new dependent child of an eligible
employee, provided that enrollment is requested within 30 days
of becoming a dependent;
(5) the individual is employed by an employer that offers
multiple health benefit plans and the individual elects a
different plan during an open enrollment period; or
(6) a court has ordered that coverage be provided for a
former spouse or dependent child under a covered employee's
health benefit plan and request for enrollment is made within 30
days after issuance of the court order.
Sec. 27. Minnesota Statutes 1992, section 62L.02,
subdivision 24, is amended to read:
Subd. 24. [QUALIFYING PRIOR COVERAGE OR QUALIFYING
EXISTING COVERAGE.] "Qualifying prior coverage" or "qualifying
existing coverage" means health benefits or health coverage
provided under:
(1) a health plan, as defined in this section;
(2) Medicare;
(3) medical assistance under chapter 256B;
(4) general assistance medical care under chapter 256D;
(5) MCHA;
(6) a self-insured health plan;
(7) the health right MinnesotaCare plan program established
under section 256.9352, when the plan includes inpatient
hospital services as provided in section 256.9353;
(8) a plan provided under section 43A.316, 43A.317, or
471.617; or
(9) a plan similar to any of the above plans provided in
this state or in another state as determined by the commissioner.
Sec. 28. Minnesota Statutes 1993 Supplement, section
62L.02, subdivision 26, is amended to read:
Subd. 26. [SMALL EMPLOYER.] (a) "Small employer" means a
person, firm, corporation, partnership, association, or other
entity actively engaged in business who, including a political
subdivision of the state, that, on at least 50 percent of its
working days during the preceding calendar year 12 months,
employed no fewer than two nor more than 29 eligible, or after
June 30, 1995, more than 49, current employees, the majority of
whom were employed in this state. If an employer has only two
eligible employees and one is the spouse, child, sibling,
parent, or grandparent of the other, the employer must be a
Minnesota domiciled employer and have paid social security or
self-employment tax on behalf of both eligible employees. If an
employer has only one eligible employee who has not waived
coverage, the sale of a health plan to or for that eligible
employee is not a sale to a small employer and is not subject to
this chapter and may be treated as the sale of an individual
health plan. A small employer plan may be offered through a
domiciled association to self-employed individuals and small
employers who are members of the association, even if the
self-employed individual or small employer has fewer than two
current employees. Entities that are eligible to file a
combined tax return for purposes of state tax laws are
considered a single employer for purposes of determining the
number of eligible current employees. Small employer status
must be determined on an annual basis as of the renewal date of
the health benefit plan. The provisions of this chapter
continue to apply to an employer who no longer meets the
requirements of this definition until the annual renewal date of
the employer's health benefit plan.
(b) Where an association, described in section 62A.10,
subdivision 1, comprised of employers contracts with a health
carrier to provide coverage to its members who are small
employers, the association shall be considered to be a small
employer, with respect to those employers in the association
that employ no fewer than two nor more than 29 eligible, or
after June 30, 1995, more than 49, current employees, even
though the association provides coverage to its members that do
not qualify as small employers. An association in existence
prior to July 1, 1993, is exempt from this chapter with respect
to small employers that are members as of that date. However,
in providing coverage to new groups employers after July 1,
1993, the existing association must comply with all requirements
of this chapter. Existing associations must register with the
commissioner of commerce prior to July 1, 1993. With respect to
small employers having not fewer than 30 nor more than 49
current employees, the July 1, 1993 date in this paragraph
becomes July 1, 1995, and the reference to "after" that date
becomes "on or after."
(c) If an employer has employees covered under a
trust established specified in a collective bargaining agreement
under the federal Labor-Management Relations Act of 1947, United
States Code, title 29, section 141, et seq., as amended, or
employees whose health coverage is determined by a collective
bargaining agreement and, as a result of the collective
bargaining agreement, is purchased separately from the health
plan provided to other employees, those employees are excluded
in determining whether the employer qualifies as a small
employer. Those employees are considered to be a separate small
employer if they constitute a group that would qualify as a
small employer in the absence of the employees who are not
subject to the collective bargaining agreement.
Sec. 29. Minnesota Statutes 1992, section 62L.03,
subdivision 1, is amended to read:
Subdivision 1. [GUARANTEED ISSUE AND REISSUE.] Every
health carrier shall, as a condition of authority to transact
business in this state in the small employer market,
affirmatively market, offer, sell, issue, and renew any of its
health benefit plans, on a guaranteed issue basis, to any small
employer that meets the participation and contribution
requirements of subdivision 3, as provided in this
chapter. This requirement does not apply to a health benefit
plan designed for a small employer to comply with a collective
bargaining agreement, provided that the health benefit plan
otherwise complies with this chapter and is not offered to other
small employers, except for other small employers that need it
for the same reason. Every health carrier participating in the
small employer market shall make available both of the plans
described in section 62L.05 to small employers and shall fully
comply with the underwriting and the rate restrictions specified
in this chapter for all health benefit plans issued to small
employers. A health carrier may cease to transact business in
the small employer market as provided under section 62L.09.
Sec. 30. Minnesota Statutes 1993 Supplement, section
62L.03, subdivision 3, is amended to read:
Subd. 3. [MINIMUM PARTICIPATION AND CONTRIBUTION.] (a) A
small employer that has at least 75 percent of its eligible
employees who have not waived coverage participating in a health
benefit plan and that contributes at least 50 percent toward the
cost of coverage of eligible employees must be guaranteed
coverage on a guaranteed issue basis from any health carrier
participating in the small employer market. The participation
level of eligible employees must be determined at the initial
offering of coverage and at the renewal date of coverage. A
health carrier may must not increase the participation
requirements applicable to a small employer at any time after
the small employer has been accepted for coverage. For the
purposes of this subdivision, waiver of coverage includes only
waivers due to: (1) coverage under another group health plan;
(2) coverage under Medicare parts A and B; or (3) coverage under
MCHA permitted under section 62E.141.
(b) If a small employer does not satisfy the contribution
or participation requirements under this subdivision, a health
carrier may voluntarily issue or renew individual coverage
health plans, or a health benefit plan which, except for
guaranteed issue, must fully comply with this chapter. A health
carrier that provides group coverage a health benefit plan to a
small employer that does not meet the contribution or
participation requirements of this subdivision must maintain
this information in its files for audit by the commissioner. A
health carrier may not offer an individual coverage health plan,
purchased through an arrangement between the employer and the
health carrier, to any employee unless the health carrier also
offers coverage the individual health plan, on a guaranteed
issue basis, to all other employees of the same employer.
(c) Nothing in this section obligates a health carrier to
issue coverage to a small employer that currently offers
coverage through a health benefit plan from another health
carrier, unless the new coverage will replace the existing
coverage and not serve as one of two or more health benefit
plans offered by the employer.
Sec. 31. Minnesota Statutes 1993 Supplement, section
62L.03, subdivision 4, is amended to read:
Subd. 4. [UNDERWRITING RESTRICTIONS.] Health carriers may
apply underwriting restrictions to coverage for health benefit
plans for small employers, including any preexisting condition
limitations, only as expressly permitted under this chapter.
For purposes of this subdivision section, "underwriting
restrictions" means any refusal of the health carrier to issue
or renew coverage, any premium rate higher than the lowest rate
charged by the health carrier for the same coverage, or any
preexisting condition limitation or exclusion, or any
exclusionary rider. Health carriers may collect information
relating to the case characteristics and demographic composition
of small employers, as well as health status and health history
information about employees, and dependents of employees, of
small employers. Except as otherwise authorized for late
entrants, preexisting conditions may be excluded by a health
carrier for a period not to exceed 12 months from the effective
date of coverage of an eligible employee or dependent, but
exclusionary riders must not be used. When calculating a
preexisting condition limitation, a health carrier shall credit
the time period an eligible employee or dependent was previously
covered by qualifying prior coverage, provided that the
individual maintains continuous coverage. Late entrants may be
subject to a preexisting condition limitation not to exceed 18
months from the effective date of coverage of the late entrant,
but must not be subject to any exclusionary rider or exclusion.
Late entrants may also be excluded from coverage for a period
not to exceed 18 months, provided that if a health carrier
imposes an exclusion from coverage and a preexisting condition
limitation, the combined time period for both the coverage
exclusion and preexisting condition limitation must not exceed
18 months. A health carrier shall, at the time of first
issuance or renewal of a health benefit plan on or after July 1,
1993, credit against any preexisting condition limitation or
exclusion permitted under this section, the time period prior to
July 1, 1993, during which an eligible employee or dependent was
covered by qualifying existing coverage or qualifying prior
coverage, if the person has maintained continuous coverage.
Sec. 32. Minnesota Statutes 1993 Supplement, section
62L.03, subdivision 5, is amended to read:
Subd. 5. [CANCELLATIONS AND FAILURES TO RENEW.] (a) No
health carrier shall cancel, decline to issue, or fail to renew
a health benefit plan as a result of the claim experience or
health status of the persons covered or to be covered by the
health benefit plan. A health carrier may cancel or fail to
renew a health benefit plan:
(1) for nonpayment of the required premium;
(2) for fraud or misrepresentation by the small employer,
or, with respect to coverage of an individual eligible employee
or dependent, fraud or misrepresentation by the eligible
employee or dependent, with respect to eligibility for coverage
or any other material fact;
(3) if eligible employee participation during the preceding
calendar year declines to less than 75 percent, subject to the
waiver of coverage provision in subdivision 3;
(4) if the employer fails to comply with the minimum
contribution percentage legally required by the health carrier
under subdivision 3;
(5) if the health carrier ceases to do business in the
small employer market under section 62L.09; or
(6) if a failure to renew is based upon the health
carrier's decision to discontinue the health benefit plan form
previously issued to the small employer, but only if the health
carrier permits each small employer covered under the prior form
to switch to its choice of any other health benefit plan offered
by the health carrier, without any underwriting restrictions
that would not have been permitted for renewal purposes; or
(7) for any other reasons or grounds expressly permitted by
the respective licensing laws and regulations governing a health
carrier, including, but not limited to, service area
restrictions imposed on health maintenance organizations under
section 62D.03, subdivision 4, paragraph (m), to the extent that
these grounds are not expressly inconsistent with this chapter.
(b) A health carrier need not renew a health benefit plan,
and shall not renew a small employer plan, if an employer ceases
to qualify as a small employer as defined in section 62L.02. If
a health benefit plan, other than a small employer plan,
provides terms of renewal that do not exclude an employer that
is no longer a small employer, the health benefit plan may be
renewed according to its own terms. If a health carrier issues
or renews a health plan to an employer that is no longer a small
employer, without interruption of coverage, the health plan is
subject to section 60A.082.
Sec. 33. Minnesota Statutes 1992, section 62L.03,
subdivision 6, is amended to read:
Subd. 6. [MCHA ENROLLEES.] Health carriers shall offer
coverage to any eligible employee or dependent enrolled in MCHA
at the time of the health carrier's issuance or renewal of a
health benefit plan to a small employer. The health benefit
plan must require that the employer permit MCHA enrollees to
enroll in the small employer's health benefit plan as of the
first date of renewal of a health benefit plan occurring on or
after July 1, 1993, and as of each date of renewal after that,
or, in the case of a new group, as of the initial effective date
of the health benefit plan and as of each date of renewal after
that. Unless otherwise permitted by this chapter, health
carriers must not impose any underwriting restrictions,
including any preexisting condition limitations or exclusions,
on any eligible employee or dependent previously enrolled in
MCHA and transferred to a health benefit plan so long as
continuous coverage is maintained, provided that the health
carrier may impose any unexpired portion of a preexisting
condition limitation under the person's MCHA coverage. An MCHA
enrollee is not a late entrant, so long as the enrollee has
maintained continuous coverage.
Sec. 34. Minnesota Statutes 1993 Supplement, section
62L.04, subdivision 1, is amended to read:
Subdivision 1. [APPLICABILITY OF CHAPTER REQUIREMENTS.]
(a) Beginning July 1, 1993, health carriers participating in the
small employer market must offer and make available on a
guaranteed issue basis any health benefit plan that they offer,
including both of the small employer plans provided in section
62L.05, to all small employers who that satisfy the small
employer participation and contribution requirements specified
in this chapter. Compliance with these requirements is required
as of the first renewal date of any small employer group
occurring after July 1, 1993. For new small employer business,
compliance is required as of the first date of offering
occurring after July 1, 1993.
(b) Compliance with these requirements is required as of
the first renewal date occurring after July 1, 1994, with
respect to employees of a small employer who had been issued
individual coverage prior to July 1, 1993, administered by the
health carrier on a group basis. Notwithstanding any other law
to the contrary, the health carrier shall offer to terminate any
individual coverage for employees of small employers who satisfy
the small employer participation and contribution requirements
specified in section 62L.03 and offer to replace it with a
health benefit plan. If the employer elects not to purchase a
health benefit plan, the health carrier must offer all covered
employees and dependents the option of maintaining their current
coverage, administered on an individual basis, or replacement
individual coverage. Small employer and replacement individual
coverage provided under this subdivision must be without
application of underwriting restrictions, provided continuous
coverage is maintained.
(c) With respect to small employers having no fewer than 30
nor more than 49 current employees, all dates in this
subdivision become July 1, 1995, and any reference to "after" a
date becomes "on or after" July 1, 1995.
Sec. 35. Minnesota Statutes 1992, section 62L.05,
subdivision 1, is amended to read:
Subdivision 1. [TWO SMALL EMPLOYER PLANS.] Each health
carrier in the small employer market must make available, on a
guaranteed issue basis, to any small employer that satisfies the
contribution and participation requirements of section 62L.03,
subdivision 3, both of the small employer plans described in
subdivisions 2 and 3. Under subdivisions 2 and 3, coinsurance
and deductibles do not apply to child health supervision
services and prenatal services, as defined by section 62A.047.
The maximum out-of-pocket costs for covered services must be
$3,000 per individual and $6,000 per family per year. The
maximum lifetime benefit must be $500,000. The out-of-pocket
cost limits and the deductible amounts provided in subdivision 2
must be adjusted on July 1 every two years, based upon changes
in the consumer price index, as of the end of the previous
calendar year, as determined by the commissioner of commerce.
Adjustments must be in increments of $50 and must not be made
unless at least that amount of adjustment is required.
Sec. 36. Minnesota Statutes 1992, section 62L.05,
subdivision 5, is amended to read:
Subd. 5. [PLAN VARIATIONS.] (a) No health carrier shall
offer to a small employer a health benefit plan that differs
from the two small employer plans described in subdivisions 1 to
4, unless the health benefit plan complies with all provisions
of chapters 62A, 62C, 62D, 62E, 62H, 62N, and 64B that otherwise
apply to the health carrier, except as expressly permitted by
paragraph (b).
(b) As an exception to paragraph (a), a health benefit plan
is deemed to be a small employer plan and to be in compliance
with paragraph (a) if it differs from one of the two small
employer plans described in subdivisions 1 to 4 only by
providing benefits in addition to those described in subdivision
4, provided that the health care benefit plan has an actuarial
value that exceeds the actuarial value of the benefits described
in subdivision 4 by no more than two percent. "Benefits in
addition" means additional units of a benefit listed in
subdivision 4 or one or more benefits not listed in subdivision
4.
Sec. 37. Minnesota Statutes 1992, section 62L.05,
subdivision 8, is amended to read:
Subd. 8. [CONTINUATION COVERAGE.] Small employer plans
must include the continuation of coverage provisions required by
the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA), Public Law Number 99-272, as amended through December
31, 1991, and by state law.
Sec. 38. Minnesota Statutes 1992, section 62L.06, is
amended to read:
62L.06 [DISCLOSURE OF UNDERWRITING RATING PRACTICES.]
When offering or renewing a health benefit plan, health
carriers shall disclose in all solicitation and sales materials:
(1) the case characteristics and other rating factors used
to determine initial and renewal rates;
(2) the extent to which premium rates for a small employer
are established or adjusted based upon actual or expected
variation in claim experience;
(3) provisions concerning the health carrier's right to
change premium rates and the factors other than claim experience
that affect changes in premium rates;
(4) provisions relating to renewability of coverage;
(5) the use and effect of any preexisting condition
provisions, if permitted; and
(6) the application of any provider network limitations and
their effect on eligibility for benefits; and
(7) the ability of small employers to insure eligible
employees and dependents currently receiving coverage from the
comprehensive health association through health benefit plans.
Sec. 39. Minnesota Statutes 1992, section 62L.07,
subdivision 2, is amended to read:
Subd. 2. [WAIVERS.] Health benefit plans must require that
small employers offering a health benefit plan maintain written
documentation of a waiver of coverage by an eligible employee or
dependent and provide the documentation indicating that each
eligible employee was informed of the availability of coverage
through the employer and of a waiver of coverage by the eligible
employee. This documentation must be provided to the health
carrier upon reasonable request.
Sec. 40. Minnesota Statutes 1992, section 62L.08,
subdivision 2, is amended to read:
Subd. 2. [GENERAL PREMIUM VARIATIONS.] Beginning July 1,
1993, each health carrier must offer premium rates to small
employers that are no more than 25 percent above and no more
than 25 percent below the index rate charged to small employers
for the same or similar coverage, adjusted pro rata for rating
periods of less than one year. The premium variations permitted
by this subdivision must be based only on health status, claims
experience, industry of the employer, and duration of coverage
from the date of issue. For purposes of this subdivision,
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 to be actuarially valid and approved
by the commissioner. Variations permitted under this
subdivision must not be based upon age or applied differently at
different ages. This subdivision does not prohibit use of a
constant percentage adjustment for factors permitted to be used
under this subdivision.
Sec. 41. Minnesota Statutes 1993 Supplement, section
62L.08, subdivision 4, is amended to read:
Subd. 4. [GEOGRAPHIC PREMIUM VARIATIONS.] 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. A health
carrier may also request approval to establish one or more
additional geographic region regions and a one or more separate
index rate rates for premiums for employees working and residing
outside of Minnesota, and that index rate must not be more than
30 percent higher than the next highest index rate. 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) if one geographic region is rural, the index rate for
the rural region must not exceed the index rate for the
Minneapolis/St. Paul metropolitan area;
(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.
Sec. 42. Minnesota Statutes 1992, section 62L.08,
subdivision 5, is amended to read:
Subd. 5. [GENDER-BASED RATES PROHIBITED.] Beginning July
1, 1993, no health carrier may determine premium rates through a
method that is in any way based upon the gender of eligible
employees or dependents. Rates must not in any way reflect
marital status or generalized differences in expected costs
between employees and spouses.
Sec. 43. Minnesota Statutes 1992, section 62L.08,
subdivision 6, is amended to read:
Subd. 6. [RATE CELLS PERMITTED.] Health carriers may use
rate cells and must file with the commissioner the rate cells
they use. Rate cells must be based on the number of adults and
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 marital status or differences
in expected costs between employees and spouses.
Sec. 44. Minnesota Statutes 1992, section 62L.08,
subdivision 7, is amended to read:
Subd. 7. [INDEX AND PREMIUM RATE DEVELOPMENT.] (a) In
developing its index rates and premiums, a health carrier may
take into account only the following factors:
(1) actuarially valid differences in benefit designs of
health benefit plans;
(2) actuarially valid differences in the rating factors
permitted in subdivisions 2 and 3;
(3) actuarially valid geographic variations if approved by
the commissioner as provided in subdivision 4.
(b) All premium variations permitted under this section
must be based upon actuarially valid differences in expected
cost to the health carrier of providing coverage. The variation
must be justified in initial rate filings and upon request of
the commissioner in rate revision filings. All premium
variations are subject to approval by the commissioner.
Sec. 45. Minnesota Statutes 1992, section 62L.08, is
amended by adding a subdivision to read:
Subd. 7a. [PARTIAL EXEMPTION; POLITICAL SUBDIVISIONS.] (a)
Health coverage provided by a political subdivision of the state
to its employees, officers, retirees, and their dependents, by
participation in group purchasing of health plan coverage by or
through an association of political subdivisions or by or
through an educational cooperative service unit created under
section 123.58 or by participating in a joint self-insurance
pool authorized under section 471.617, subdivision 2, is subject
to this subdivision. Coverage that is subject to this
subdivision may have separate index rates and separate premium
rates, based upon data specific to the association, educational
cooperative service unit, or pool, so long as the rates,
including the rating bands, otherwise comply with this chapter.
The association, educational cooperative service unit, or pool
is not required to offer the small employer plans described in
section 62L.05 and is not required to comply with this chapter
for employers that are not small employers or that are not
eligible for coverage through the association, educational
cooperative service unit, or pool. A health carrier that offers
a health plan only under this subdivision need not offer that
health plan to other small employers on a guaranteed issue basis.
(b) An association, educational cooperative service unit,
or pool described in paragraph (a) may elect to be treated under
paragraph (a) by filing a notice of the election with the
commissioner of commerce no later than January 1, 1995. The
election remains in effect for three years and applies to all
health coverage provided to members of the group. It may be
renewed for subsequent three-year periods. An entity eligible
for treatment under paragraph (a) that forms after January 1,
1995, must make the election prior to provision of coverage, and
the election remains in effect until January 1, 1998, or if
filed after that date, until the next regular renewal date.
Sec. 46. Minnesota Statutes 1993 Supplement, section
62L.08, subdivision 8, is amended to read:
Subd. 8. [FILING REQUIREMENT.] 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. The rates shall not be approved, unless the
commissioner has determined that the rates are reasonable. In
determining reasonableness, the commissioner shall consider the
growth rates applied under section 62J.04, subdivision 1,
paragraph (b), to the calendar year or years that the proposed
premium rate would be in effect, 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. 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. As
provided in section 62A.65, subdivision 3, this subdivision
applies to the individual market, as well as to the small
employer market.
Sec. 47. Minnesota Statutes 1992, section 62L.12, is
amended to read:
62L.12 [PROHIBITED PRACTICES.]
Subdivision 1. [PROHIBITION ON ISSUANCE OF INDIVIDUAL
POLICIES.] A health carrier operating in the small employer
market shall not knowingly offer, issue, or renew an individual
policy, subscriber contract, or certificate health plan to an
eligible employee or dependent of a small employer that meets
the minimum participation and contribution requirements defined
in under section 62L.03, subdivision 3, except as authorized
under subdivision 2.
Subd. 2. [EXCEPTIONS.] (a) A health carrier may sell,
issue, or renew individual conversion policies to eligible
employees and dependents otherwise eligible for conversion
coverage under section 62D.104 as a result of leaving a health
maintenance organization's service area.
(b) A health carrier may sell, issue, or renew individual
conversion policies to eligible employees and dependents
otherwise eligible for conversion coverage as a result of the
expiration of any continuation of group coverage required under
sections 62A.146, 62A.17, 62A.21, 62C.142, 62D.101, and 62D.105.
(c) A health carrier may sell, issue, or renew conversion
policies under section 62E.16 to eligible employees and
dependents.
(d) A health carrier may sell, issue, or renew individual
continuation policies to eligible employees and dependents as
required.
(e) A health carrier may sell, issue, or renew individual
coverage health plans if the coverage is appropriate due to an
unexpired preexisting condition limitation or exclusion
applicable to the person under the employer's group coverage
health plan or due to the person's need for health care services
not covered under the employer's group policy group health plan.
(f) A health carrier may sell, issue, or renew an
individual policy, with the prior consent of the commissioner,
health plan, if the individual has elected to buy the individual
coverage health plan not as part of a general plan to substitute
individual coverage health plans for a group coverage health
plan nor as a result of any violation of subdivision 3 or 4.
(g) Nothing in this subdivision relieves a health carrier
of any obligation to provide continuation or conversion coverage
otherwise required under federal or state law.
(h) Nothing in this chapter restricts the offer, sale,
issuance, or renewal of coverage issued as a supplement to
Medicare under sections 62A.31 to 62A.44, or policies or
contracts that supplement Medicare issued by health maintenance
organizations, or those contracts governed by section 1833 or
1876 of the federal Social Security Act, United States Code,
title 42, section 1395 et. seq., as amended.
(i) Nothing in this chapter restricts the offer, sale,
issuance, or renewal of individual health plans necessary to
comply with a court order.
Subd. 3. [AGENT'S LICENSURE.] An agent licensed under
chapter 60A 60K or section 62C.17 who knowingly and willfully
breaks apart a small group for the purpose of selling individual
policies health plans to eligible employees and dependents of a
small employer that meets the participation and contribution
requirements of section 62L.03, subdivision 3, is guilty of an
unfair trade practice and subject to disciplinary action,
including the revocation or suspension of license, under section
60A.17, subdivision 6c, 60K.11 or 62C.17. The action must be by
order and subject to the notice, hearing, and appeal procedures
specified in section 60A.17, subdivision 6d 60K.11. The action
of the commissioner is subject to judicial review as provided
under chapter 14.
Subd. 4. [EMPLOYER PROHIBITION.] A small employer shall
not encourage or direct an employee or applicant to:
(1) refrain from filing an application for health coverage
when other similarly situated employees may file an application
for health coverage;
(2) file an application for health coverage during initial
eligibility for coverage, the acceptance of which is contingent
on health status, when other similarly situated employees may
apply for health coverage, the acceptance of which is not
contingent on health status;
(3) seek coverage from another health carrier, including,
but not limited to, MCHA; or
(4) cause coverage to be issued on different terms because
of the health status or claims experience of that person or the
person's dependents.
Subd. 5. [SALE OF OTHER PRODUCTS.] A health carrier shall
not condition the offer, sale, issuance, or renewal of a health
benefit plan on the purchase by a small employer of other
insurance products offered by the health carrier or a subsidiary
or affiliate of the health carrier, including, but not limited
to, life, disability, property, and general liability insurance.
This prohibition does not apply to insurance products offered as
a supplement to a health maintenance organization plan,
including, but not limited to, supplemental benefit plans under
section 62D.05, subdivision 6.
Sec. 48. Minnesota Statutes 1992, section 62L.21,
subdivision 2, is amended to read:
Subd. 2. [ADJUSTMENT OF PREMIUM RATES.] The board of
directors shall establish operating rules to allocate
adjustments to the reinsurance premium charge of no more than
minus 25 percent of the monthly reinsurance premium for health
carriers that can demonstrate administrative efficiencies and
cost-effective handling of equivalent risks. The adjustment
must be made annually on a retrospective basis monthly, unless
the board provides for a different interval in its operating
rules. The operating rules must establish objective and
measurable criteria which must be met by a health carrier in
order to be eligible for an adjustment. These criteria must
include consideration of efficiency attributable to case
management, but not consideration of such factors as provider
discounts.
Sec. 49. [REPEALER.]
(a) Minnesota Statutes 1992, sections 62E.51, 62E.52,
62E.53, 62E.531, 62E.54, and 62E.55 are repealed.
(b) Minnesota Statutes 1992, section 62A.02, subdivision 5,
is repealed.
Sec. 50. [REVISOR INSTRUCTIONS.]
(a) The revisor of statutes shall change the name of the
private employers insurance program established in Minnesota
Statutes, section 43A.317 to the Minnesota employees insurance
program, and the private employers insurance trust fund to the
Minnesota employees insurance trust fund, wherever either term
occurs in Minnesota Statutes or Minnesota Rules.
(b) The revisor of statutes shall renumber Minnesota
Statutes 1992, section 62L.23, as section 62L.08, subdivision
11, and shall change all references to that section in Minnesota
Statutes or Minnesota Rules accordingly.
Sec. 51. [EFFECTIVE DATES.]
Sections 1, 3, 4, 6, 8, 10, 16 to 27, 29, 30, 32, 34 to 37,
40 to 45, and 47 to 50 are effective the day following final
enactment. Sections 2, 12, 13, 33, 38, and 39 are effective
July 1, 1994. Sections 5, 7, 9, 11, 14, 15, 28, 31, and 46 are
effective January 1, 1995.
ARTICLE 11
HEALTH CARE COOPERATIVES
Section 1. [62R.01] [STATEMENT OF LEGISLATIVE PURPOSE AND
INTENT.]
The legislature finds that the goals of containing health
care costs, improving the quality of health care, and increasing
the access of Minnesota citizens to health care services
reflected under chapters 62J and 62N may be further enhanced
through the promotion of health care cooperatives. The
legislature further finds that locally based and controlled
efforts among health care providers, local businesses, units of
local government, and health care consumers, can promote the
attainment of the legislature's goals of health care reform, and
takes notice of the long history of successful operations of
cooperative organizations in this state. Therefore, in order to
encourage cooperative efforts which are consistent with the
goals of health care reform, including efforts among health care
providers as sellers of health care services and efforts of
consumers as buyers of health care services and health plan
coverage, and to encourage the formation of and increase the
competition among health plans in Minnesota, the legislature
enacts the Minnesota health care cooperative act.
Sec. 2. [62R.02] [CITATION.]
This chapter may be cited as the "Minnesota health care
cooperative act."
Sec. 3. [62R.03] [APPLICABILITY OF OTHER LAWS.]
Subdivision 1. [MINNESOTA COOPERATIVE LAW.] A health care
cooperative is subject to chapter 308A unless otherwise provided
in this chapter. After incorporation, a health care cooperative
shall enjoy the powers and privileges and shall be subject to
the duties and liabilities of other cooperatives organized under
chapter 308A, to the extent applicable and except as limited or
enlarged by this chapter. If any provision of this chapter
conflicts with a provision of chapter 308A, the provision of
this chapter takes precedence.
Subd. 2. [HEALTH PLAN LICENSURE AND OPERATION.] A health
care network cooperative must be licensed as a health
maintenance organization licensed under chapter 62D, a nonprofit
health service plan corporation licensed under chapter 62C, or a
community integrated service network or an integrated service
network licensed under chapter 62N, at the election of the
health care network cooperative. The health care network
cooperative shall be subject to the duties and liabilities of
health plans licensed pursuant to the chapter under which the
cooperative elects to be licensed, to the extent applicable and
except as limited or enlarged by this chapter. If any provision
of any chapter under which the cooperative elects to be licensed
conflicts with the provisions of this chapter, the provisions of
this chapter take precedence. A health care network
cooperative, upon licensure as provided in this subdivision, is
a contributing member of the Minnesota comprehensive health
association, on the same basis as other entities having the same
licensure.
Subd. 3. [HEALTH PROVIDER COOPERATIVES.] A health provider
cooperative shall not be considered a mutual insurance company
under chapter 60A, a health maintenance organization under
chapter 62D, a nonprofit health services corporation under
chapter 62C, or a community integrated service network or an
integrated service network under chapter 62N. A health provider
network shall not be considered to violate any limitations on
the corporate practice of medicine. Health care service
contracts under section 62R.06 shall not be considered to
violate section 62J.23.
Sec. 4. [62R.04] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of this chapter, the
terms defined in this section have the meanings given.
Subd. 2. [HEALTH CARE COOPERATIVE.] "Health care
cooperative" means a health care network cooperative or a health
provider cooperative.
Subd. 3. [HEALTH CARE NETWORK COOPERATIVE.] "Health care
network cooperative" means a corporation organized under this
chapter and licensed in accordance with section 62R.03,
subdivision 2. A health care network cooperative shall not have
more than 50,000 enrollees, unless exceeding the enrollment
limit is necessary to comply with guaranteed issue or guaranteed
renewal requirements of chapter 62L or section 62A.65.
Subd. 4. [HEALTH PROVIDER COOPERATIVE.] "Health provider
cooperative" means a corporation organized under this chapter
and operated on a cooperative plan to market health care
services to purchasers of those services.
Subd. 5. [COMMISSIONER.] Unless otherwise specified,
"commissioner" means the commissioner of health for a health
care network cooperative licensed under chapter 62D or 62N and
the commissioner of commerce for a health care network
cooperative licensed under chapter 62C.
Subd. 6. [HEALTH CARRIER.] "Health carrier" has the
meaning provided in section 62A.011.
Subd. 7. [HEALTH CARE PROVIDING ENTITY.] "Health care
providing entity" means a participating entity that provides
health care to enrollees of a health care cooperative.
Sec. 5. [62R.05] [POWERS.]
In addition to the powers enumerated under section
308A.201, a health care cooperative shall have all of the powers
granted a nonprofit corporation under section 317A.161, except
to the extent expressly inconsistent with the provisions of
chapter 308A.
Sec. 6. [62R.06] [HEALTH CARE SERVICE CONTRACTS.]
Subdivision 1. [PROVIDER CONTRACTS.] A health provider
cooperative and its licensed members may execute marketing and
service contracts requiring the provider members to provide some
or all of their health care services through the provider
cooperative to the enrollees, members, subscribers, or insureds,
of a health care network cooperative, community integrated
service network, integrated service network, nonprofit health
service plan, health maintenance organization, accident and
health insurance company, or any other purchaser, including the
state of Minnesota and its agencies, instruments, or units of
local government. Each purchasing entity is authorized to
execute contracts for the purchase of health care services from
a health provider cooperative in accordance with this section.
Any contract between a provider cooperative and a purchaser must
provide for payment by the purchaser to the health provider
cooperative on a substantially capitated or similar risk-sharing
basis. Each contract between a provider cooperative and a
purchaser shall be filed by the provider network cooperative
with the commissioner of health and is subject to the provisions
of section 62D.19.
Subd. 2. [NO NETWORK LIMITATION.] A health care network
cooperative may contract with any health provider cooperative
and may contract with any other licensed health care provider to
provide health care services for its enrollees.
Subd. 3. [RESTRAINT OF TRADE.] Subject to section 62R.08,
a health care provider cooperative is not a combination in
restraint of trade, and any contracts or agreements between a
health care provider cooperative and its members regarding the
price the cooperative will charge to purchasers of its services,
or regarding the prices the members will charge to the
cooperative, or regarding the allocation of gains or losses
among the members, or regarding the delivery, quality,
allocation, or location of services to be provided, are not
contracts that unreasonably restrain trade.
Sec. 7. [62R.07] [RELICENSURE.]
(a) A health care network cooperative licensed under
chapter 62C or 62D may relinquish that license and be granted a
new license as a community integrated service network or an
integrated service network under chapter 62N in accordance with
this section, provided that the cooperative meets all
requirements for licensure as a network under chapter 62N, to
the extent not expressly inconsistent with the provisions of
chapter 308A.
(b) The relicensure shall be effective at the time
specified in the plan of relicensure, which must not be earlier
than the date upon which the previous license is surrendered.
(c) Upon the relicensure of the cooperative as a community
integrated service network or an integrated service network:
(1) all existing group and individual enrollee benefit
contracts in force on the effective date of the relicensure
shall continue in effect and with the same terms and conditions,
notwithstanding the cooperative's new licensure as a network,
until the date of each contract's next renewal or amendment, but
no later than one year from the date of the relicensure. At
this time, each benefit contract then in force must be amended
to comply with all statutory and regulatory requirements for
network benefit contracts as of that date; and
(2) all contracts between the cooperative and any health
care providing entity, including a health care provider
cooperative, in force on the effective date of relicensure shall
remain in effect under the cooperative's new licensure as a
network until the date of the next renewal or amendment of that
contract, but no later than one year from the date of
relicensure.
(d) Except as otherwise provided in this section, nothing
in the relicensure of a health care network cooperative shall in
any way affect its corporate existence or any of its contracts,
rights, privileges, immunities, powers or franchises, debts,
duties or other obligations or liabilities.
Sec. 8. [62R.08] [PROHIBITED PRACTICES.]
(a) It shall be unlawful for any person, company, or
corporation, or any agent, officer, or employee thereof, to
coerce or require any person to agree, either in writing or
orally, not to join or become or remain a member of, any health
care provider cooperative, as a condition of securing or
retaining a contract for health care services with the person,
firm, or corporation.
(b) It shall be unlawful for any person, company, or
corporation, or any combination of persons, companies, or
corporations, or any agents, officers, or employees thereof, to
engage in any acts of coercion, intimidation, or boycott of, or
any refusal to deal with, any health care providing entity
arising from that entity's actual or potential participation in
a health care network cooperative or health care provider
cooperative.
(c) It shall be unlawful for any health care network
cooperative, other than a health care network cooperative
operating on an employed, staff model basis, to require that its
participating providers provide health care services exclusively
to or through the health care network cooperative. It shall be
unlawful for any health care provider cooperative to require
that its members provide health care services exclusively to or
through the health care provider cooperative.
(d) It shall be unlawful for any health care provider
cooperative to engage in any acts of coercion, intimidation, or
boycott of, or any concerted refusal to deal with, any health
plan company seeking to contract with the cooperative on a
competitive, reasonable, and nonexclusive basis.
(e) The prohibitions in this section are in addition to any
conduct that violates sections 325D.49 to 325D.66.
(f) This section shall be enforced in accordance with
sections 325D.56 to 325D.65.
Sec. 9. Minnesota Statutes 1992, section 308A.005, is
amended by adding a subdivision to read:
Subd. 8a. [HEALTH CARE COOPERATIVE.] "Health care
cooperative" has the meaning given in section 62R.04,
subdivision 2.
Sec. 10. [308A.503] [HEALTH CARE COOPERATIVE MEMBERS.]
Subdivision 1. [HEALTH CARE NETWORK COOPERATIVE.] For a
health care network cooperative, the policyholder is the member
provided that if the policyholder is an individual enrollee, the
individual enrollee is the member, and if the policyholder is an
employer or other group type, entity, or association, the group
policyholder is the member.
Subd. 2. [HEALTH PROVIDER COOPERATIVE.] For a health
provider cooperative, the licensed health care provider,
professional corporation, partnership, hospital, or other
licensed provider is the member, as provided in the articles or
bylaws.
Subd. 3. [STATE AND HOSPITAL MEMBERS AUTHORIZED.] The
state, or any agency, instrumentality, or political subdivision
of the state, may be a member of a health care cooperative. Any
governmental hospital authorized, organized or operated under
chapters 158, 250, 376, or 397 or under sections 246A.10 to
246A.27, 412.221, 447.05 to 447.13, or 471.50, or under any
special law authorizing or establishing a hospital or hospital
district, may be a member of a health care provider cooperative.
Sec. 11. Minnesota Statutes 1992, section 308A.635, is
amended by adding a subdivision to read:
Subd. 5a. [HEALTH CARE COOPERATIVE.] Notwithstanding the
provisions of this section, the requirements and procedures for
membership voting for a health care cooperative shall be as
provided in the bylaws.
ARTICLE 12
RURAL HEALTH INITIATIVES
Section 1. Minnesota Statutes 1993 Supplement, section
62N.23, is amended to read:
62N.23 [TECHNICAL ASSISTANCE; LOANS.]
(a) The commissioner shall provide technical assistance to
parties interested in establishing or operating a community
integrated service network or an integrated service network.
This shall be known as the integrated service network technical
assistance program (ISNTAP).
The technical assistance program shall offer seminars on
the establishment and operation of community integrated service
networks or integrated service networks in all regions of
Minnesota. The commissioner shall advertise these seminars in
local and regional newspapers, and attendance at these seminars
shall be free.
The commissioner shall write a guide to establishing and
operating a community integrated service network or an
integrated service network. The guide must provide basic
instructions for parties wishing to establish a community
integrated service network or an integrated service network.
The guide must be provided free of charge to interested
parties. The commissioner shall update this guide when
appropriate.
The commissioner shall establish a toll-free telephone line
that interested parties may call to obtain assistance in
establishing or operating a community integrated service network
or an integrated service network.
(b) The commissioner, in consultation with the commission,
shall provide recommendations for the creation of a loan program
that would provide loans or grants to entities forming
integrated service networks or to networks less than one year
old. The commissioner shall propose criteria for the loan
program. shall grant loans for organizational and start-up
expenses to entities forming community integrated service
networks or integrated service networks, or to networks less
than one year old, to the extent of any appropriation for that
purpose. The commissioner shall allocate the available funds
among applicants based upon the following criteria, as evaluated
by the commissioner within the commissioner's discretion:
(1) the applicant's need for the loan;
(2) the likelihood that the loan will foster the formation
or growth of a network; and
(3) the likelihood of repayment.
The commissioner shall determine any necessary application
deadlines and forms and is exempt from rulemaking in doing so.
Sec. 2. Minnesota Statutes 1993 Supplement, section
144.1464, is amended to read:
144.1464 [SUMMER HEALTH CARE INTERNS.]
Subdivision 1. [SUMMER INTERNSHIPS.] The commissioner of
health, through a contract with a nonprofit organization as
required by subdivision 4, shall award grants to hospitals and
clinics to establish a secondary and post-secondary summer
health care intern program. The purpose of the program is to
expose interested high school secondary and post-secondary
pupils to various careers within the health care profession.
Subd. 2. [CRITERIA.] (a) The commissioner, through the
organization under contract, shall award grants to hospitals and
clinics that agree to:
(1) provide secondary and post-secondary summer health care
interns with formal exposure to the health care profession;
(2) provide an orientation for the secondary and
post-secondary summer health care interns;
(3) pay one-half the costs of employing a the secondary and
post-secondary summer health care intern, based on an overall
hourly wage that is at least the minimum wage but does not
exceed $6 an hour; and
(4) interview and hire secondary and post-secondary pupils
for a minimum of six weeks and a maximum of 12 weeks.
(b) In order to be eligible to be hired as a secondary
summer health intern by a hospital or clinic, a pupil must:
(1) intend to complete high school graduation requirements
and be between the junior and senior year of high school;
(2) be from a school district in proximity to the facility;
and
(3) provide the facility with a letter of recommendation
from a health occupations or science educator.
(c) In order to be eligible to be hired as a post-secondary
summer health care intern by a hospital or clinic, a pupil must:
(1) intend to complete a two-year or four-year degree
program and be planning on enrolling in or be enrolled in that
degree program;
(2) be from a school district or attend an educational
institution in proximity to the facility; and
(3) provide the facility with a letter of recommendation
from a health occupations or science educator.
(d) Hospitals and clinics awarded grants may employ pupils
as secondary and post-secondary summer health care interns
beginning on or after June 15, 1993, if they agree to pay the
intern, during the period before disbursement of state grant
money, with money designated as the facility's 50 percent
contribution towards internship costs.
Subd. 3. [GRANTS.] The commissioner, through the
organization under contract, shall award separate grants to
hospitals and clinics meeting the requirements of subdivision
2. The grants must be used to pay one-half of the costs of
employing a pupil secondary and post-secondary pupils in a
hospital or clinic during the course of the program. No more
than five pupils may be selected from any one high
school secondary or post-secondary institution to participate in
the program and no more than one-half of the number of pupils
selected may be from the seven-county metropolitan area.
Subd. 4. [CONTRACT.] The commissioner shall contract with
a statewide, nonprofit organization representing facilities at
which secondary and post-secondary summer health care interns
will serve, to administer the grant program established by this
section. The organization awarded the grant shall provide the
commissioner with any information needed by the commissioner to
evaluate the program, in the form and at the times specified by
the commissioner.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective July 1, 1994.
ARTICLE 13
FINANCING
Section 1. Minnesota Statutes 1993 Supplement, section
256.9352, subdivision 3, is amended to read:
Subd. 3. [FINANCIAL MANAGEMENT.] (a) The commissioner
shall manage spending for the health right plan MinnesotaCare
program in a manner that maintains a minimum reserve equal to
five percent of the expected cost of state premium subsidies.
The commissioner must make a quarterly assessment of the
expected expenditures for the covered services for the remainder
of the current fiscal year and for the following two fiscal
years. The estimated expenditure shall be compared to an
estimate of the revenues that will be deposited in the health
care access fund. Based on this comparison, and after
consulting with the chairs of the house ways and means committee
and the senate finance committee, and the legislative commission
on health care access, the commissioner shall make adjustments
as necessary to ensure that expenditures remain within the
limits of available revenues. The adjustments the commissioner
may use must be implemented in this order: first, stop
enrollment of single adults and households without children;
second, upon 45 days' notice, stop coverage of single adults and
households without children already enrolled in the health right
plan MinnesotaCare program; third, upon 90 days' notice,
decrease the premium subsidy amounts by ten percent for families
with gross annual income above 200 percent of the federal
poverty guidelines; fourth, upon 90 days' notice, decrease the
premium subsidy amounts by ten percent for families with gross
annual income at or below 200 percent; and fifth, require
applicants to be uninsured for at least six months prior to
eligibility in the health right plan MinnesotaCare program. If
these measures are insufficient to limit the expenditures to the
estimated amount of revenue, the commissioner may further limit
enrollment or decrease premium subsidies.
The reserve referred to in this subdivision is appropriated
to the commissioner but may only be used upon approval of the
commissioner of finance, if estimated costs will exceed the
forecasted amount of available revenues after all adjustments
authorized under this subdivision have been made.
By February 1, 1994 1995, the department of human services
and the department of health shall develop a plan to adjust
benefit levels, eligibility guidelines, or other steps necessary
to ensure that expenditures for the MinnesotaCare program are
contained within the two percent provider tax taxes imposed
under section 295.52 and the one percent HMO gross premiums tax
imposed under section 60A.15, subdivision 1, paragraph (e), for
the 1996-1997 biennium fiscal year 1997. Notwithstanding any
law to the contrary, no further enrollment in MinnesotaCare, and
no additional hiring of staff for the departments shall take
place after June 1, 1994, unless a plan to balance the
MinnesotaCare budget for the 1996-1997 biennium has been passed
by the 1994 legislature.
(b) Notwithstanding paragraph (a), the commissioner shall
proceed with the enrollment of single adults and households
without children in accordance with section 256.9354,
subdivision 5, paragraph (a), even if the expenditures do not
remain within the limits of available revenues through fiscal
year 1997 to allow the departments of human services and health
to develop the plan required under paragraph (a).
Sec. 2. Minnesota Statutes 1993 Supplement, section
256.9354, subdivision 5, is amended to read:
Subd. 5. [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO
CHILDREN.] (a) Beginning July October 1, 1994, "eligible persons"
means shall include all families and individuals and households
with no children who have gross family incomes that are equal to
or less than 125 percent of the federal poverty guidelines and
who are not eligible for medical assistance without a spenddown
under chapter 256B.
(b) Beginning October 1, 1995, "eligible persons" means all
individuals and families who are not eligible for medical
assistance without a spenddown under chapter 256B.
(c) These persons All eligible persons under paragraphs (a)
and (b) are eligible for coverage through the MinnesotaCare plan
program but must pay a premium as determined under sections
256.9357 and 256.9358. Individuals and families whose income is
greater than the limits established under section 256.9358 may
not enroll in the MinnesotaCare plan program.
Sec. 3. Minnesota Statutes 1992, section 256.9355, is
amended by adding a subdivision to read:
Subd. 4. [APPLICATION PROCESSING.] The commissioner of
human services shall determine an applicant's eligibility for
MinnesotaCare no more than 30 days from the date that the
application is received by the department of human services.
This requirement shall be suspended for four months following
the dates in which single adults and families without children
become eligible for the program.
Sec. 4. Minnesota Statutes 1993 Supplement, section
256.9356, subdivision 3, is amended to read:
Subd. 3. [ADMINISTRATION AND COMMISSIONER'S DUTIES.]
Premiums are dedicated to the commissioner for MinnesotaCare.
The commissioner shall make an annual redetermination of
continued eligibility and identify people who may become
eligible for medical assistance. The commissioner shall develop
and implement procedures to: (1) require enrollees to report
changes in income; (2) adjust sliding scale premium payments,
based upon changes in enrollee income; and (3) disenroll
enrollees from MinnesotaCare for failure to pay required
premiums. Premiums are calculated on a calendar month basis and
may be paid on a monthly, quarterly, or annual basis, with the
first payment due upon notice from the commissioner of the
premium amount required. Premium payment is required before
enrollment is complete and to maintain eligibility in
MinnesotaCare. Nonpayment of the premium will result in
disenrollment from the plan within one calendar month after the
due date. Persons disenrolled for nonpayment may not reenroll
until four calendar months have elapsed. Persons disenrolled
for nonpayment may not reenroll for four calendar months unless
the person demonstrates good cause for nonpayment. Good cause
does not exist if a person chooses to pay other family expenses
instead of the premium. The commissioner shall define good
cause in rule.
Sec. 5. Minnesota Statutes 1992, section 256.9358,
subdivision 4, is amended to read:
Subd. 4. [INELIGIBILITY.] An individual or family Families
with children whose gross monthly income is above the amount
specified in subdivision 3 is are not eligible for the plan.
Beginning October 1, 1994, an individual or households with no
children whose gross monthly income is greater than $767 for a
single individual and $1,025 for a married couple without
children are ineligible for the plan. Beginning October 1,
1995, an individual or families whose gross monthly income is
above the amount specified in subdivision 3 are not eligible for
the plan.
Sec. 6. Minnesota Statutes 1992, section 295.50, is
amended by adding a subdivision to read:
Subd. 2a. [DELIVERED OUTSIDE OF MINNESOTA.] "Delivered
outside of Minnesota" means property which the seller delivers
to a common carrier for delivery outside Minnesota, places in
the United States mail or parcel post directed to the purchaser
outside Minnesota, or delivers to the purchaser outside
Minnesota by means of the seller's own delivery vehicles, and
which is not later returned to a point within Minnesota, except
in the course of interstate commerce.
Sec. 7. Minnesota Statutes 1993 Supplement, section
295.50, subdivision 3, is amended to read:
Subd. 3. [GROSS REVENUES.] "Gross revenues" are total
amounts received in money or otherwise by:
(1) a resident hospital for patient services;
(2) a resident surgical center for patient services;
(3) a nonresident hospital for patient services provided to
patients domiciled in Minnesota;
(4) a nonresident surgical center for patient services
provided to patients domiciled in Minnesota;
(5) a resident health care provider, other than a staff
model health carrier, for patient services;
(6) a nonresident health care provider for patient services
provided to an individual domiciled in Minnesota;
(7) a wholesale drug distributor for sale or distribution
of prescription legend drugs that are delivered: (i) to a
Minnesota resident by a wholesale drug distributor who is a
nonresident pharmacy directly, by common carrier, or by mail; or
(ii) in Minnesota by the wholesale drug distributor, by common
carrier, or by mail, unless the prescription legend drugs are
delivered to another wholesale drug distributor who sells legend
drugs exclusively at wholesale. Prescription Legend drugs do
not include nutritional products as defined in Minnesota Rules,
part 9505.0325;
(8) a staff model health carrier plan company as gross
premiums for enrollees, copayments, deductibles, coinsurance,
and fees for patient services covered under its contracts with
groups and enrollees;
(9) a resident pharmacy for medical supplies, appliances,
and equipment; and
(10) a nonresident pharmacy for medical supplies,
appliances, and equipment.
Sec. 8. Minnesota Statutes 1992, section 295.50, is
amended by adding a subdivision to read:
Subd. 6a. [HOSPICE CARE SERVICES.] "Hospice care services"
are services:
(1) as defined in Minnesota Rules, part 9505.0297; and
(2) provided at a recipient's residence, if the recipient
does not live in a hospital, nursing facility as defined in
section 62A.46, subdivision 3, or intermediate care facility for
persons with mental retardation as defined in section 256B.055,
subdivision 12, paragraph (d).
Sec. 9. Minnesota Statutes 1992, section 295.50, is
amended by adding a subdivision to read:
Subd. 15. [LEGEND DRUG.] "Legend drug" means a legend drug
as defined in section 151.01, subdivision 17.
Sec. 10. Minnesota Statutes 1993 Supplement, section
295.52, subdivision 5, is amended to read:
Subd. 5. [VOLUNTEER AMBULANCE SERVICES.] Licensed
Volunteer ambulance services for which all the ambulance
attendants are "volunteer ambulance attendants" as defined in
section 144.8091, subdivision 2, are not subject to the tax
under this section. For purposes of this requirement,
"volunteer ambulance service" means an ambulance service in
which all of the individuals whose primary responsibility is
direct patient care meet the definition of volunteer under
section 144.8091, subdivision 2. The ambulance service may
employ administrative and support staff, and remain eligible for
this exemption, if the primary responsibility of these staff is
not direct patient care.
Sec. 11. Minnesota Statutes 1993 Supplement, section
295.53, subdivision 1, is amended to read:
Subdivision 1. [EXEMPTIONS.] The following payments are
excluded from the gross revenues subject to the hospital,
surgical center, or health care provider taxes under sections
295.50 to 295.57:
(1) payments received for services provided under the
Medicare program, including payments received from the
government, and organizations governed by sections 1833 and 1876
of title XVIII of the federal Social Security Act, United States
Code, title 42, section 1395, and enrollee deductibles,
coinsurance, and copayments, whether paid by the individual or
by insurer or other third party. Payments for services not
covered by Medicare are taxable;
(2) medical assistance payments including payments received
directly from the government or from a prepaid plan;
(3) payments received for home health care services;
(4) payments received from hospitals or surgical centers
for goods and services on which liability for tax is imposed
under section 295.52 or the source of funds for the payment is
exempt under clause (1), (2), (7), (8), or (10);
(5) payments received from health care providers for goods
and services on which liability for tax is imposed under
sections 295.52 to 295.57 or the source of funds for the payment
is exempt under clause (1), (2), (7), (8), or (10);
(6) amounts paid for prescription legend drugs, other than
nutritional products, to a wholesale drug distributor reduced by
reimbursements received for prescription legend drugs under
clauses (1), (2), (7), and (8);
(7) payments received under the general assistance medical
care program including payments received directly from the
government or from a prepaid plan;
(8) payments received for providing services under the
MinnesotaCare program including payments received directly from
the government or from a prepaid plan and enrollee deductibles,
coinsurance, and copayments;
(9) payments received by a resident health care provider or
the wholly owned subsidiary of a resident health care provider
for care provided outside Minnesota to a patient who is not
domiciled in Minnesota;
(10) payments received from the chemical dependency fund
under chapter 254B;
(11) payments received in the nature of charitable
donations that are not designated for providing patient services
to a specific individual or group;
(12) payments received for providing patient services if
the services are incidental to conducting medical research;
(13) payments received from any governmental agency for
services benefiting the public, not including payments made by
the government in its capacity as an employer or insurer;
(14) payments received for services provided by community
residential mental health facilities licensed under Minnesota
Rules, parts 9520.0500 to 9520.0690, community support programs
and family community support programs approved under Minnesota
Rules, parts 9535.1700 to 9535.1760, and community mental health
centers as defined in section 245.62, subdivision 2; and
(15) government payments received by a regional treatment
center;
(16) payments received for hospice care services;
(17) payments received by a resident health care provider
or the wholly owned subsidiary of a resident health care
provider for medical supplies, appliances and equipment
delivered outside of Minnesota;
(18) payments received for services provided by community
supervised living facilities for persons with mental retardation
or related conditions licensed under Minnesota Rules, parts
4665.0100 to 4665.9900;
(19) payments received by a post-secondary educational
institution from student tuition, student activity fees, health
care service fees, government appropriations, donations, or
grants. Fee for service payments and payments for extended
coverage are taxable; and
(20) payments received for services provided by:
residential care homes licensed under chapter 144B; board and
lodging establishments providing only custodial services, that
are licensed under chapter 157 and registered under section
157.031 to provide supportive services or health supervision
services; and assisted living programs, congregate housing
programs, and other senior housing options.
Sec. 12. Minnesota Statutes 1993 Supplement, section
295.53, subdivision 2, is amended to read:
Subd. 2. [DEDUCTIONS FOR STAFF MODEL HEALTH CARRIERS PLAN
COMPANY.] In addition to the exemptions allowed under
subdivision 1, a staff model health carrier plan company may
deduct from its gross revenues for the year:
(1) amounts paid to hospitals, surgical centers, and health
care providers that are not employees of the staff model health
carrier plan company for services on which liability for the tax
is imposed under section 295.52;
(2) amounts added to reserves, if total reserves do not
exceed 200 percent of the statutory net worth requirement, the
calculation of which may be determined on a consolidated basis,
taking into account the amounts held in reserve by affiliated
staff model health carriers plan companies;
(3) assessments for the comprehensive health insurance plan
under section 62E.11; and
(4) amounts spent for administration as reported as total
administration to the department of health in the statement of
revenues, expenses, and net worth pursuant to section 62D.08,
subdivision 3, clause (a).
Sec. 13. Minnesota Statutes 1993 Supplement, section
295.53, subdivision 5, is amended to read:
Subd. 5. [DEDUCTIONS FOR PHARMACIES.] (a) Pharmacies may
deduct from their gross revenues subject to tax payments for
medical supplies, appliances, and devices that are exempt under
subdivision 1, except payments under subdivision 1, clauses (3),
(6), (9), (11), and (14).
(b) Resident pharmacies may deduct from their gross
revenues subject to tax payments received for medical supplies,
appliances, and equipment delivered outside of Minnesota.
Sec. 14. Minnesota Statutes 1993 Supplement, section
295.54, is amended to read:
295.54 [CREDIT FOR TAXES PAID TO ANOTHER STATE.]
Subdivision 1. [TAXES PAID TO ANOTHER STATE.] A resident
hospital, resident surgical center, pharmacy, or resident health
care provider who is liable for taxes payable to another state
or province or territory of Canada measured by gross receipts
and is subject to tax under section 295.52 is entitled to a
credit for the tax paid to another state or province or
territory of Canada to the extent of the lesser of (1) the tax
actually paid to the other state or province or territory of
Canada, or (2) the amount of tax imposed by Minnesota on the
gross receipts subject to tax in the other taxing jurisdictions.
Subd. 2. [PHARMACY CREDIT.] A resident pharmacy may claim
a quarterly credit against the total amount of tax the pharmacy
owes during that quarter under section 295.52, subdivision 1b,
as provided in this subdivision. The credit shall equal two
percent of the amount paid by the pharmacy to a wholesale drug
distributor subject to tax under section 295.52, subdivision 3,
for legend drugs delivered by the pharmacy outside of Minnesota.
If the amount of the credit exceeds the tax liability of the
pharmacy under section 295.52, subdivision 1b, the commissioner
shall provide the pharmacy with a refund equal to the excess
amount.
Sec. 15. Minnesota Statutes 1992, section 295.55,
subdivision 2, is amended to read:
Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a)
Each hospital or surgical center must make estimated payments of
the taxes for the calendar year in monthly installments to the
commissioner within ten days after the end of the month.
(b) Estimated tax payments are not required of hospitals or
surgical centers if the tax for the calendar year is less than
$500 or if the a hospital has been allowed a grant under section
144.1484, subdivision 2, for the year.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270.75, from the due date of the
payment until paid or until the due date of the annual return at
the rate specified in section 270.75. An underpayment of an
estimated installment is the difference between the amount paid
and the lesser of (1) 90 percent of one-twelfth of the tax for
the calendar year or (2) the tax for the actual gross revenues
received during the month.
Sec. 16. Minnesota Statutes 1992, section 295.55,
subdivision 3, is amended to read:
Subd. 3. [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each
taxpayer, other than a hospital or surgical center, must make
estimated payments of the taxes for the calendar year in
quarterly installments to the commissioner by April 15, July 15,
October 15, and January 15 of the following calendar year.
(b) Estimated tax payments are not required if the tax for
the calendar year is less than $500.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270.75, from the due date of the
payment until paid or until the due date of the annual return at
the rate specified in section 270.75. An underpayment of an
estimated installment is the difference between the amount paid
and the lesser of (1) 90 percent of one-quarter of the tax for
the calendar year or (2) the tax for the actual gross revenues
received during the quarter.
Sec. 17. Minnesota Statutes 1993 Supplement, section
295.58, is amended to read:
295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.]
The commissioner shall deposit all revenues, including
penalties and interest, derived from the taxes imposed by
sections 295.50 to 295.57 and from the insurance premiums tax on
health maintenance organizations, community integrated service
networks, integrated service networks, and nonprofit health
service plan corporations in the health care access fund in the
state treasury. Refunds of overpayments must be paid from the
health care access fund in the state treasury. There is
annually appropriated from the health care access fund to the
commissioner of revenue the amount necessary to make any refunds
required under section 295.54.
Sec. 18. Minnesota Statutes 1993 Supplement, section
295.582, is amended to read:
295.582 [AUTHORITY.]
(a) A hospital, surgical center, pharmacy, or health care
provider that is subject to a tax under section 295.52, or a
pharmacy that has paid additional expense transferred under this
section by a wholesale drug distributor, may transfer additional
expense generated by section 295.52 obligations on to all
third-party contracts for the purchase of health care services
on behalf of a patient or consumer. The expense must not exceed
two percent of the gross revenues received under the third-party
contract, including plus two percent of copayments and
deductibles paid by the individual patient or consumer. The
expense must not be generated on revenues derived from payments
that are excluded from the tax under section 295.53. All
third-party purchasers of health care services including, but
not limited to, third-party purchasers regulated under chapter
60A, 62A, 62C, 62D, 62H, 62N, 64B, or 62H, 65A, 65B, 79, or 79A,
or under section 471.61 or 471.617, must pay the transferred
expense in addition to any payments due under existing or future
contracts with the hospital, surgical center, pharmacy, or
health care provider, to the extent allowed under federal law.
A third-party purchaser of health care services includes, but is
not limited to, a health carrier, integrated service network, or
community integrated service network that pays for health care
services on behalf of patients or that reimburses, indemnifies,
compensates, or otherwise insures patients for health care
services. A third-party purchaser shall comply with this
section regardless of whether the third-party purchaser is a
for-profit, not-for-profit, or nonprofit entity. A wholesale
drug distributor may transfer additional expense generated by
section 295.52 obligations to entities that purchase from the
wholesaler, and the entities must pay the additional expense.
Nothing in this subdivision section limits the ability of a
hospital, surgical center, pharmacy, wholesale drug distributor,
or health care provider to recover all or part of the section
295.52 obligation by other methods, including increasing fees or
charges.
(b) Each third-party purchaser regulated under any chapter
cited in paragraph (a) shall include with its annual renewal for
certification of authority or licensure documentation indicating
compliance with paragraph (a). If the commissioner responsible
for regulating the third-party purchaser finds at any time that
the third-party purchaser has not complied with paragraph (a)
the commissioner may by order fine or censure the third-party
purchaser or revoke or suspend the certificate of authority or
license of the third-party purchaser to do business in this
state. The third-party purchaser may appeal the commissioner's
order through a contested case hearing in accordance with
chapter 14.
Sec. 19. Laws 1992, chapter 549, article 9, section 22, is
amended to read:
Sec. 22. [GROSS RECEIPTS TAX; EFFECTIVE DATE.]
Sections 1 and 16 to 21 are effective the day following
final enactment. Section 4 is effective for taxable years
beginning after December 31, 1992. Section 7, subdivision 1, is
effective for gross revenues generated by services performed and
goods sold after December 31, 1992. Section 7, subdivisions 2
to 4, are effective for gross revenues generated by services
performed and goods sold after December 31, 1993. Section 8 is
effective for hospitals and surgical centers for gross revenues
generated by services performed and goods sold after December
31, 1992, except the exclusion under subdivision 1, clause (6)
applies to payments for prescription drug purchases made after
December 31, 1993. Section 8 is effective for health care
providers for gross revenues generated by services performed and
goods sold after December 31, 1993, except the exclusion under
subdivision 1, clause (6) applies to payments for prescription
drug purchases made after December 31, 1993. Sections 14 and 15
are effective July 1, 1992.
Sec. 20. [STATEMENT OF INTENT.]
The amendment in section 19 clarifies an effective date in
the 1992 legislation enacting the gross receipts tax on
hospitals and health care providers. This legislation imposed a
gross receipts tax on hospitals effective January 1, 1993, and
on health care providers and wholesale drug distributors
effective January 1, 1994. To avoid double taxation or
pyramiding of the tax burden, hospitals and health care
providers were allowed an exclusion for amounts paid to
wholesale drug distributors for prescription drugs. These
amounts would already be taxed to the wholesale drug
distributors. The section creating this exclusion did not
contain an effective date. As a result, under Minnesota
Statutes, section 645.02, the law may permit hospitals to deduct
these amounts for prescription drugs purchased during 1993, even
though no tax was imposed on the wholesale drug distributor and
no double taxation or pyramiding of the tax could occur.
Section 19 clarifies that the exclusion applies only after the
wholesale drug distributor tax goes into effect.
Sec. 21. [EFFECTIVE DATE.]
Sections 1, 2, 5, 12, 15 to 17, 19, and 20 are effective
the day following final enactment.
Sections 3 and 4 are effective July 1, 1994.
Sections 6 to 11, 13, 14, and 18 are retroactively
effective from January 1, 1994.
ARTICLE 14
APPROPRIATIONS
Section 1. [APPROPRIATIONS; SUMMARY.]
Except as otherwise provided in this act, the sums set
forth in the columns designated "fiscal year 1994" and "fiscal
year 1995" are appropriated from the general fund, or other
named fund, to the agencies for the purposes specified in this
act and are added to or subtracted from the appropriations for
the fiscal years ending June 30, 1994, and June 30, 1995, in
Laws 1993, chapter 345, or another named law.
SUMMARY BY FUND
APPROPRIATIONS
1994 1995
General Fund -0- $4,844,000
Health Care
Access Fund ( 10,828,000) ( 17,562,000)
State Government
Special Revenue -0- 99,000
Subdivision 1. DEPARTMENT OF
HUMAN SERVICES
Health Care Access Fund (8,974,000) (14,436,000)
Of this appropriation, $150,000 the
second year is for administration of
the MinnesotaCare program. The
appropriation for the MinnesotaCare
subsidized health care plan is reduced
by $8,974,000 in the first year and
$14,586,000 in the second year.
Subd. 2. DEPARTMENT OF
EMPLOYEE RELATIONS
Health Care Access Fund (1,854,000) (6,125,000)
This reduction is to the appropriation
in Laws 1993, chapter 345, article 14,
section 9, due to a negotiation of a
third-party carrier contract for
Minnesota employers insurance program.
Subd. 3. DEPARTMENT OF HEALTH
State Government Special Revenue -0- 99,000
Health Care Access Fund -0- 2,999,000
Of this appropriation, $100,000 is for
the purpose of making a grant to the
school of medicine at the Duluth campus
of the University of Minnesota for
planning to meet the increasing need
for rural family physicians.
Of this appropriation, $150,000 shall
be transferred to the general fund and
appropriated from the general fund to
the commissioner of human services for
a consumer satisfaction survey. Any
federal matching money received through
the medical assistance program is
appropriated to the commissioner for
this purpose. The commissioner of
human services shall contract with the
commissioner of health to conduct the
consumer satisfaction survey.
Of this appropriation, $8,000 in fiscal
year 1995 is appropriated to the
commissioner of health to fund a rural
ambulance demonstration project. The
purpose of the project is to reduce the
ambulance response times in the Rail
Prairie and Scandia Valley townships.
The commissioner of health shall grant
the funds to the ambulance license
holder for this area contingent on
receiving a written statement from the
license holder, describing the methods
to be used to implement the
demonstration projects.
Unexpended money appropriated for
summer health care interns for fiscal
year 1994 does not cancel and shall be
available for that purpose in fiscal
year 1995.
At the request of the Minnesota Health
Care Commission, the commissioners of
revenue, finance, health, human
services, commerce, and employee
relations shall provide assistance with
research, policy analysis, modeling,
cost and revenue projections, actuarial
analysis, and other technical support
for the financing study required under
article 6, section 7. Under the
direction of the commission, money from
this appropriation may be transferred
by the commissioner of health to other
state agencies to cover the costs of
technical support provided to the
commission.
Money appropriated before fiscal year
1995 to the commissioner of health for
the administrative functions in
connection with the data institute may
be used by the data institute for the
administration of the consumer
satisfaction survey to the extent that
there are matching financial
contributions from the private sector.
Subd. 4. LEGISLATIVE AUDITOR
General Fund -0- 65,000
This appropriation is in addition to
the appropriation in Laws 1993, chapter
192, section 2, subdivision 5, for the
purpose of conducting a single payer
study.
Subd. 5. ATTORNEY GENERAL
General Fund -0- 200,000
This appropriation is in addition to
the appropriation in Laws 1993, chapter
192, section 11, subdivision 4. The
attorney general shall work
cooperatively with the commissioner of
health in an effort to increase
Minnesota's Medicare reimbursement
rate.\H* (Subdivision 5 was vetoed by the\h
\Hgovernor.)\h
Sec. 2. TRANSFERS
Notwithstanding Laws 1993, chapter 345,
article 14, section 10, the
commissioner of finance shall transfer
$3,963,000 in fiscal year 1994 and
$11,101,000 in fiscal year 1995 from
the health care access fund to the
general fund.\H* (The governor vetoed the\h
\Hpreceding material beginning "Sec." and\h
\Hending "general fund.")\h
Of this amount transferred in fiscal
year 1995, $4,579,000 is appropriated
to the commissioner of human services
for general assistance medical care
grants.
Presented to the governor May 6, 1994
Signed by the governor May 10, 1994, 6:35 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes