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

                            CHAPTER 170-H.F.No. 1155 
                  An act relating to insurance; requiring health plan 
                  companies to provide certain information when 
                  requested by the commissioner; requiring an 
                  affirmative provider consent to participate in a 
                  network under a category of coverage; requiring 
                  disclosure of changes in a provider's contract; 
                  establishing a moratorium on managed care automobile 
                  insurance plans; defining health benefit plan for 
                  certain purposes; establishing a task force on small 
                  business health insurance; repealing the requirement 
                  for an action plan; removing a penalty; amending 
                  Minnesota Statutes 2000, sections 62D.08, subdivision 
                  5; 62N.25, subdivision 7; 62Q.19, subdivision 1; 
                  62Q.74, subdivisions 2, 3; 256B.692, subdivision 2; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapter 62Q; repealing Minnesota Statutes 2000, 
                  section 62Q.07. 
           Section 1.  Minnesota Statutes 2000, section 62D.08, 
        subdivision 5, is amended to read: 
        Every health maintenance organization shall inform the 
        commissioner of any change in the information described in 
        section 62D.03, subdivision 4, clause (e), including any change 
        in address, any modification of the duration of any contract or 
        agreement, and any addition to the list of participating 
        entities, within ten working days of the notification of the 
        change.  Any cancellation or discontinuance of any contract or 
        agreement listed in section 62D.03, subdivision 4, clause (e), 
        or listed subsequently in accordance with this subdivision, 
        shall be reported to the commissioner 120 days before the 
        effective date.  When the health maintenance organization 
        terminates a provider for cause, death, disability, or loss of 
        license, the health maintenance organization must notify the 
        commissioner within three ten working days of the date the 
        health maintenance organization sends out or receives the notice 
        of cancellation, discontinuance, or termination.  Any health 
        maintenance organization which fails to notify the commissioner 
        within the time periods prescribed in this subdivision shall be 
        subject to the levy of a fine up to $200 per contract for each 
        day the notice is past due, accruing up to the date the 
        organization notifies the commissioner of the cancellation or 
        discontinuance.  Any fine levied under this subdivision is 
        subject to the contested case and judicial review provisions of 
        chapter 14.  The levy of a fine does not preclude the 
        commissioner from using other penalties described in sections 
        62D.15 to 62D.17. 
           Sec. 2.  Minnesota Statutes 2000, section 62N.25, 
        subdivision 7, is amended to read: 
        Community integrated service networks are exempt from the 
        following requirements applicable to health maintenance 
           (1) conducting focused studies under Minnesota Rules, part 
           (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 
           (3) maintaining statistics under Minnesota Rules, part 
           (4) filing provider contract forms under sections 62D.03, 
        subdivision 4, and 62D.08, subdivision 1; and 
           (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. 
           Sec. 3.  Minnesota Statutes 2000, section 62Q.19, 
        subdivision 1, is amended to read: 
           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; 
           (3) status as a local government unit as defined in section 
        62D.02, subdivision 11, a hospital district created or 
        reorganized under sections 447.31 to 447.37, an Indian tribal 
        government, an Indian health service unit, or a community health 
        board as defined in chapter 145A; 
           (4) a former state hospital that specializes in the 
        treatment of cerebral palsy, spina bifida, epilepsy, closed head 
        injuries, specialized orthopedic problems, and other disabling 
        conditions; or 
           (5) a rural hospital that has qualified for a sole 
        community hospital financial assistance grant in the past three 
        years under section 144.1484, subdivision 1.  For these rural 
        hospitals, the essential community provider designation applies 
        to all health services provided, including both inpatient and 
        outpatient services. 
           Prior to designation, the commissioner shall publish the 
        names of all applicants in the State Register.  The public shall 
        have 30 days from the date of publication to submit written 
        comments to the commissioner on the application.  No designation 
        shall be made by the commissioner until the 30-day period has 
           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 
           For the purpose of this subdivision, supportive and 
        stabilizing services include at a minimum, transportation, child 
        care, cultural, and linguistic services where appropriate. 
           Sec. 4.  Minnesota Statutes 2000, section 62Q.74, 
        subdivision 2, is amended to read: 
           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 affirmative 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. 
           Sec. 5.  Minnesota Statutes 2000, section 62Q.74, 
        subdivision 3, is amended to read: 
           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 
           (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 Unless the provider has affirmatively agreed to 
        participate within 60 days after the postmark date of the 
        notice, the provider is deemed to have not accepted the proposed 
        new category of coverage. 
           Sec. 6.  [62Q.745] [PROVIDER CONTRACT AMENDMENT 
           (a) Any amendment or change in the terms of an existing 
        contract between a network organization and a health care 
        provider must be disclosed to the provider. 
           (b) Any amendment or change in the contract that alters the 
        financial reimbursement or alters the written contractual 
        policies and procedures governing the relationship between the 
        provider and the network organization must be disclosed to the 
        provider before the amendment or change is deemed to be in 
           (c) For purposes of this section, "network organization" 
        and "health care provider" or "provider" have the meanings given 
        in section 62Q.74. 
           Upon request of the commissioner, a health plan company 
        licensed under chapters 62C and 62D, must provide the following 
           (1) a detailed description 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; 
           (2) the number of full-time equivalent physicians, by 
        specialty, nonphysician providers, and allied health providers 
        used to provide services; and 
           (3) summary data that is broken down by type of provider, 
        reflecting actual utilization of network and non-network 
        practitioners and allied professionals by enrollees of the 
        health plan company. 
           Sec. 8.  Minnesota Statutes 2000, section 256B.692, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] (a) 
        Notwithstanding chapters 62D and 62N, a county that elects to 
        purchase medical assistance and general assistance medical care 
        in return for a fixed sum without regard to the frequency or 
        extent of services furnished to any particular enrollee is not 
        required to obtain a certificate of authority under chapter 62D 
        or 62N.  The county board of commissioners is the governing body 
        of a county-based purchasing program.  In a multicounty 
        arrangement, the governing body is a joint powers board 
        established under section 471.59.  
           (b) A county that elects to purchase medical assistance and 
        general assistance medical care services under this section must 
        satisfy the commissioner of health that the requirements for 
        assurance of consumer protection, provider protection, and 
        fiscal solvency of chapter 62D, applicable to health maintenance 
        organizations, or chapter 62N, applicable to community 
        integrated service networks, will be met.  
           (c) A county must also assure the commissioner of health 
        that the requirements of sections 62J.041; 62J.48; 62J.71 to 
        62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 
        62Q, including sections 62Q.07; 62Q.075; 62Q.1055; 62Q.106; 
        62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 
        62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64; 62Q.68 
        to 62Q.72; and 72A.201 will be met.  
           (d) All enforcement and rulemaking powers available under 
        chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 
        commissioner of health with respect to counties that purchase 
        medical assistance and general assistance medical care services 
        under this section.  
           (e) The commissioner, in consultation with county 
        government, shall develop administrative and financial reporting 
        requirements for county-based purchasing programs relating to 
        sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 
        62N.31, and other sections as necessary, that are specific to 
        county administrative, accounting, and reporting systems and 
        consistent with other statutory requirements of counties.  
           (a) The task force on small business health insurance shall 
        study Minnesota's health coverage market available to small 
        businesses and make recommendations for solutions that could 
        make group health coverage more accessible and affordable for 
        small businesses.  The task force shall recommend any 
        legislative changes needed to permit those solutions. 
           (b) The task force shall report its recommendations in 
        writing to the legislature, in compliance with Minnesota 
        Statutes, section 3.195, no later than December 15, 2001. 
           (c) The commissioners of commerce and health shall provide 
        any necessary assistance to the task force. 
           (d) The task force consists of the following members: 
           (1) three members of the senate, including at least one 
        member of the minority, appointed by the subcommittee on 
        committees of the senate committee on rules and administration; 
           (2) three members of the house, including at least one 
        member of the minority, appointed by the speaker of the house; 
           (3) four persons representing small business owners, three 
        appointed by the Minnesota chamber of commerce and one appointed 
        by the national federation of independent business; 
           (4) two persons appointed by the Minnesota council of 
        health plans; 
           (5) one person appointed by the insurance federation of 
           (6) one insurance agent, appointed by the Minnesota 
        association of health underwriters; 
           (7) the commissioner of commerce or the commissioner's 
        designee; and 
           (8) four consumers appointed by the commissioner, two of 
        whom must reside outside the metropolitan area as defined in 
        Minnesota Statutes, section 473.121, subdivision 2. 
           (e) The task force shall not provide compensation or 
        expense reimbursement to its members. 
           (f) The task force expires on June 30, 2002. 
           Sec. 10.  [MORATORIUM.] 
        INSURANCE PLANS.] No automobile insurance company licensed under 
        Minnesota Statutes, chapter 60A, and authorized to provide 
        automobile no-fault coverage or any health plan company as 
        defined under Minnesota Statutes, section 62Q.01, subdivision 4, 
        may enter into any contracts that provide, or that have the 
        effect of providing, managed care services to no-fault claimants 
        between January 1, 2001, and June 30, 2002.  For the purposes of 
        this section, "managed care services" is defined as any program 
        of medical services that uses health care providers managed, 
        owned, employed by, or under contract with a health plan 
        company.  This subdivision may not be construed to impact the 
        legality of the use of managed care services for no-fault 
           Subd. 2.  [EXISTING MANAGED CARE CONTRACTS.] Any health 
        plan company or automobile insurer that is party to a contract 
        subject to the moratorium set forth in subdivision 1, in 
        existence prior to the moratorium created on January 1, 2001, 
        must comply with the following provisions during the moratorium 
        created under this act: 
           (1) no such contract shall be extended to any additional 
        insurers; and 
           (2) if a provider has declined to participate in a category 
        of coverage, the network organization must permit the provider 
        the opportunity to participate in that category of coverage on a 
        biennial basis. 
           Subd. 3.  [SUNSET.] This section is repealed effective June 
        30, 2002. 
           Sec. 11.  [REPEALER.] 
           Minnesota Statutes 2000, section 62Q.07, is repealed. 
           Sec. 12.  [EFFECTIVE DATE.] 
           Sections 1, 2, 3, 8, 9, 10, and 11 are effective the day 
        following final enactment. 
           Presented to the governor May 21, 2001 
           Signed by the governor May 24, 2001, 1:56 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes