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

                            CHAPTER 295-S.F.No. 3161 
                  An act relating to health; modifying provisions for 
                  health care purchasing alliances; amending Minnesota 
                  Statutes 1998, sections 62T.03; 62T.05; 62T.06, 
                  subdivisions 1 and 2; and 62T.11; Minnesota Statutes 
                  1999 Supplement, section 62T.04; proposing coding for 
                  new law in Minnesota Statutes, chapter 62T; repealing 
                  Minnesota Statutes 1998, section 62T.13. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [62T.025] [EMPLOYER-MEMBER CONTRIBUTION.] 
           If an employer-member of a purchasing alliance can 
        demonstrate that the member has not offered employee health 
        coverage for a year or more, the member may contribute 25 
        percent or more of the cost of employee coverage for up to 36 
        months.  This provision only applies to rural purchasing 
        alliances organized under this chapter and operating prior to 
        May 1, 2000.  The affected purchasing alliances may develop 
        membership criteria which disallow an employer contribution 
        below 50 percent. 
           Sec. 2.  Minnesota Statutes 1998, section 62T.03, is 
        amended to read: 
           62T.03 [APPLICATION OF OTHER LAWS.] 
           Subdivision 1.  [STATE LAW.] An accountable provider 
        network is subject to all requirements applicable to a health 
        plan company licensed in the state, except as otherwise noted in 
        this chapter.  An accountable provider network and a health care 
        purchasing alliance must comply with all requirements of chapter 
        62L, except for modifications and waivers permitted under this 
        chapter.  A contracting arrangement between a health care 
        purchasing alliance and an accountable provider network for 
        provision of health care benefits must provide consumer 
        protection functions comparable to those currently required of a 
        health plan company licensed under section 62N.25, and other 
        statutes referenced in that section, except for modifications 
        and waivers permitted under this chapter. 
           Subd. 2.  [FEDERAL LAW.] A self-insured employer may 
        participate as an affiliate member of a purchasing alliance 
        without participation affecting the employer's standing under 
        the federal Employee Retirement Income Security Act (ERISA) of 
        1974.  An affiliate member is one that may purchase 
        administrative services with the purchasing alliance and may 
        participate in activities undertaken to educate and promote 
        health improvement of the purchasing alliance enrollees or 
        community residents.  
           Sec. 3.  Minnesota Statutes 1999 Supplement, section 
        62T.04, is amended to read: 
           62T.04 [COMPLAINT SYSTEM.] 
           Accountable provider networks must establish and maintain 
        an enrollee complaint system as required under sections 62Q.68 
        to 62Q.72 or as required by a contract with a purchasing 
        alliance.  The contract must be approved by the commissioner.  
        The accountable provider network may contract with the health 
        care purchasing alliance or a vendor for operation of this 
        system.  The commissioner may not waive any enrollee rights 
        relating to external review.  
           Sec. 4.  Minnesota Statutes 1998, section 62T.05, is 
        amended to read: 
           62T.05 [BENEFITS.] 
           An accountable provider network may offer and sell any 
        benefits permitted to be offered and sold by health plan 
        companies under Minnesota law.  An accountable provider network 
        may, after consultation with the purchasing alliance, offer only 
        one benefit plan to employer-members of the alliance. 
           Sec. 5.  Minnesota Statutes 1998, section 62T.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZATION.] The commissioner may grant 
        waivers from the requirements of law for the contracting 
        arrangement between a health care purchasing alliance and an 
        accountable provider network in the areas listed in subdivisions 
        2 to 4.  The commissioner may not waive the following state 
        consumer protection and quality assurance laws:  
           (1) laws requiring that enrollees be informed of any 
        restrictions, requirements, or limitations on coverage, 
        services, or access to specialists and other providers; 
           (2) laws allowing consumers to complain to or appeal to a 
        state regulatory agency if denied benefits or services; 
           (3) laws prohibiting gag clauses and other restrictions on 
        communication between a patient and their physician or provider; 
           (4) laws allowing consumers to obtain information on 
        provider financial incentives, which may affect treatment; 
           (5) laws requiring the submission of information needed to 
        monitor quality of care and enrollee rights, except the 
        submission may be done in a manner approved by the commissioner 
        under subdivision 4; 
           (6) laws protecting enrollee privacy and confidentiality of 
        records; 
           (7) minimum standards for adequate provider network 
        capacity and geographic access to services; 
           (8) laws assuring continuity of care when a patient must 
        change providers; 
           (9) laws governing coverage of emergency services; 
           (10) laws prohibiting excessive or unreasonable 
        administrative fees or expenses; and 
           (11) other laws or rules that are directly related to 
        quality of care, consumer protection, and due process rights. 
           Sec. 6.  Minnesota Statutes 1998, section 62T.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SOLVENCY PROTECTION.] (a) The commissioner may 
        waive the requirements of sections 62N.27 to 62N.32, and may 
        substitute capital and surplus requirements that are reduced 
        from the levels required of other risk-bearing entities in order 
        to reflect its reduced risk exposure.  If risk is being 
        underwritten, the underwriter cannot have more than 25 percent 
        of the representation on the governing board of the accountable 
        provider network.  The reduced requirements must include at 
        least the following levels of capital and surplus:  (i) a 
        deposit of $500,000 plus and (ii) the greater of an estimated 15 
        percent of gross premium revenues or twice the net retained 
        annual risk up to $750,000 on a single enrollee.  Net retained 
        annual risk may be, for example, the lowest annual deductible 
        under a provider stop-loss insurance policy that covers all 
        costs above the deductible.  Assets supporting the deposit must 
        meet the standards for deposits referenced in section 62N.32 or 
        be guaranteed by an entity that is approved and can be monitored 
        by the commissioner.  Assets supporting the capital must meet 
        the investment guidelines referenced in section 62N.27.  Members 
        of a purchasing alliance may assist in meeting the solvency 
        requirements through a subordinated solvency contribution under 
        a contract approved by the commissioner.  For the purposes of 
        this subdivision, "subordinated solvency contribution" means a 
        contribution to the accountable provider network by a purchasing 
        alliance member that is evidenced by a promissory note or other 
        instrument that allows for repayment of the contribution in the 
        manner provided in a contract approved by the commissioner.  
           (b) An accountable provider network may propose a method of 
        reporting income, expenses, claims payments, and other financial 
        information in a manner which adequately demonstrates ongoing 
        compliance with the standards for capital, surplus, and claims 
        reserves agreed to under this waiver. 
           (c) An accountable provider network may demonstrate ability 
        to continue to deliver the contracted health care services to 
        the purchasing alliance through arrangements which ensure that, 
        subject to 60 days' notice of intent to discontinue the 
        contracting arrangement, provider participants will continue to 
        meet their obligation to provide health care services to 
        enrollees for a period of 60 days. 
           Sec. 7.  Minnesota Statutes 1998, section 62T.11, is 
        amended to read: 
           62T.11 [DUTIES OF COMMISSIONER.] 
           (a) By July 1, 1997, the commissioner shall make available 
        application forms for licensure as an accountable provider 
        network.  The accountable provider network may begin doing 
        business after application has been approved. 
           (b) Upon receipt of an application for a certificate of 
        authority, the commissioner shall grant or deny licensure and 
        waivers requested within 90 days of receipt of a complete 
        application if all requirements are substantially met.  For a 
        period of one year six years after the effective date of Laws 
        1997, chapter 225 July 1, 1997, the commissioner may approve up 
        to five applications, none of which may be from health plan 
        companies.  If no written response has been received within 90 
        days, the application is approved.  When the commissioner denies 
        an application or waiver request, the commissioner shall notify 
        the applicant in writing specifically stating the grounds for 
        the denial and specific suggestions for how to remedy the denial.
        The commissioner will entertain reconsiderations.  Within 90 
        days after the denial, the applicant may file a written request 
        for an administrative hearing and review of the commissioner's 
        determination.  The hearing is subject to judicial review as 
        provided by chapter 14. 
           (c) All monitoring, enforcement, and rulemaking powers 
        available under chapter 62N are granted to the commissioner to 
        assure continued compliance with provisions of this 
        chapter.  The commissioner shall honor the intent of this 
        section to foster community-focused, affordable health coverage 
        for small employers and their employees. 
           (d) The commissioner may contract with other entities as 
        necessary to carry out the responsibilities in this chapter. 
           Sec. 8.  [REPEALER.] 
           Minnesota Statutes 1998, section 62T.13, is repealed. 
           Presented to the governor March 24, 2000 
           Signed by the governor March 28, 2000, 2:37 p.m.