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

                             CHAPTER 94-S.F.No. 673 
                  An act relating to health plans; regulating contract 
                  stacking; providing a remedy; proposing coding for new 
                  law in Minnesota Statutes, chapter 62Q. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [62Q.74] [NETWORK SHADOW CONTRACTING.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given. 
           (b) "Category of coverage" means one of the following types 
        of health-related coverage: 
           (1) health; 
           (2) no-fault automobile medical benefits; or 
           (3) workers' compensation medical benefits. 
           (c) "Health care provider" or "provider" has the meaning 
        given in section 148.01. 
           (d) "Network organization" means a preferred provider 
        organization as defined in section 145.61, subdivision 4c; a 
        managed care organization as defined in section 62Q.01, 
        subdivision 5; or other entity that uses or consists of a 
        network of health care providers; but does not include a 
        nonprofit health service plan corporation operating under 
        chapter 62C or its affiliates. 
           Subd. 2.  [PROVIDER CONSENT REQUIRED.] (a) No network 
        organization shall require a health care provider to participate 
        in a network under a category of coverage that differs from the 
        category or categories of coverage to which the existing 
        contract between the network organization and the provider 
        applies, without the consent of the provider obtained under 
        subdivision 3.  
           (b) This section does not apply to situations in which the 
        network organization wishes the provider to participate in a new 
        or different plan or other arrangement within a category of 
        coverage that is already provided for in an existing contract 
        between the network organization and the provider. 
           (c) Compliance with this section may not be waived in a 
        contract or otherwise. 
           Subd. 3.  [CONSENT PROCEDURE.] (a) The network 
        organization, if it wishes to apply an existing contract with a 
        provider to a different category of coverage, shall first notify 
        the provider in writing.  The written notice must include at 
        least the following: 
           (1) the network organization's name, address, and telephone 
        number, and the name of the specific network, if it differs from 
        that of the network organization; 
           (2) a description of the proposed new category of coverage; 
           (3) the names of all payers expected by the network 
        organization to use the network for the new category of 
        coverage; 
           (4) the approximate number of current enrollees of the 
        network organization in that category of coverage within the 
        provider's geographical area; 
           (5) a disclosure of all contract terms of the proposed new 
        category of coverage, including the discount or reduced fees, 
        care guidelines, utilization review criteria, prior 
        authorization process, and dispute resolution process; 
           (6) a form for the provider's convenience in accepting or 
        declining participation in the proposed new category of 
        coverage, provided that the provider need not use that form in 
        responding; and 
           (7) a statement informing the provider of the provisions of 
        paragraph (b). 
           (b) If the provider does not decline participation within 
        30 days after the postmark date of the notice, the provider is 
        deemed to have accepted the proposed new category of coverage. 
           Subd. 4.  [CONTRACT TERMINATION RESTRICTED.] A network 
        organization must not terminate an existing contract with a 
        provider, or fail to honor the contract in good faith, based 
        solely on the provider's decision not to accept a proposed new 
        category of coverage.  The most recent agreed-upon contractual 
        obligations remain in force until the existing contract's 
        renewal or termination date. 
           Subd. 5.  [REMEDY.] If a network organization violates this 
        section by reimbursing a provider as if the provider had agreed 
        under this section to participate in the network under a 
        category of coverage to which the provider has not agreed, the 
        provider has a cause of action against the network organization 
        to recover two times the difference between the reasonable 
        charges for claims affected by the violation and the amounts 
        actually paid to the provider.  The provider is also entitled to 
        recover costs, disbursements, and reasonable attorney fees. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective for contracts entered into or 
        renewed after August 1, 1999. 
           Presented to the governor April 20, 1999 
           Signed by the governor April 23, 1999, 11:17 a.m.