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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 277-S.F.No. 3126 
                  An act relating to human services; making technical 
                  changes in health care programs; amending Minnesota 
                  Statutes 2000, sections 13.05, subdivision 4; 
                  245.4932, subdivision 3; 253B.045, subdivision 2; 
                  256.01, subdivision 11; 256.023; 256.9685, subdivision 
                  1; 256.9866; 256B.041, subdivision 5; 256B.0575; 
                  256B.0625, subdivision 27; 256B.0629, subdivision 2; 
                  256B.0915, subdivision 1c; 256B.0945, subdivision 4; 
                  256B.19, subdivisions 1, 1d, 2b; 256B.37, subdivision 
                  5a; 256B.692, subdivision 3; 256F.10, subdivision 9; 
                  256F.13, subdivision 1; 256L.05, subdivision 3; 
                  256L.07, subdivision 3; Minnesota Statutes 2001 
                  Supplement, sections 245.474, subdivision 4; 
                  256B.0623, subdivision 14; 256B.0625, subdivisions 13, 
                  20; 256B.0915, subdivision 3; 256B.0924, subdivision 
                  6; 256B.19, subdivision 1c; 256L.06, subdivision 3; 
                  Laws 2001, First Special Session chapter 9, article 2, 
                  section 76; repealing Minnesota Statutes 2000, 
                  sections 256.025; 256B.0635, subdivision 3; 256B.19, 
                  subdivision 1a; 256B.77, subdivision 24. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 13.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LIMITATIONS ON COLLECTION AND USE OF DATA.] 
        Private or confidential data on an individual shall not be 
        collected, stored, used, or disseminated by political 
        subdivisions, statewide systems, or state agencies for any 
        purposes other than those stated to the individual at the time 
        of collection in accordance with section 13.04, except as 
        provided in this subdivision. 
           (a) Data collected prior to August 1, 1975, and which have 
        not been treated as public data, may be used, stored, and 
        disseminated for the purposes for which the data was originally 
        collected or for purposes which are specifically approved by the 
        commissioner as necessary to public health, safety, or welfare. 
           (b) Private or confidential data may be used and 
        disseminated to individuals or agencies specifically authorized 
        access to that data by state, local, or federal law enacted or 
        promulgated after the collection of the data. 
           (c) Private or confidential data may be used and 
        disseminated to individuals or agencies subsequent to the 
        collection of the data when the responsible authority 
        maintaining the data has requested approval for a new or 
        different use or dissemination of the data and that request has 
        been specifically approved by the commissioner as necessary to 
        carry out a function assigned by law. 
           (d) Private data may be used by and disseminated to any 
        person or agency if the individual subject or subjects of the 
        data have given their informed consent.  Whether a data subject 
        has given informed consent shall be determined by rules of the 
        commissioner.  The format for informed consent is as follows, 
        unless otherwise prescribed by the HIPAA, Standards for Privacy 
        of Individually Identifiable Health Information, 65 Fed. Reg. 
        82, 461 (2000) (to be codified as Code of Federal Regulations, 
        title 45, section 164):  informed consent shall not be deemed to 
        have been given by an individual subject of the data by the 
        signing of any statement authorizing any person or agency to 
        disclose information about the individual to an insurer or its 
        authorized representative, unless the statement is: 
           (1) in plain language; 
           (2) dated; 
           (3) specific in designating the particular persons or 
        agencies the data subject is authorizing to disclose information 
        about the data subject; 
           (4) specific as to the nature of the information the 
        subject is authorizing to be disclosed; 
           (5) specific as to the persons or agencies to whom the 
        subject is authorizing information to be disclosed; 
           (6) specific as to the purpose or purposes for which the 
        information may be used by any of the parties named in clause 
        (5), both at the time of the disclosure and at any time in the 
        future; 
           (7) specific as to its expiration date which should be 
        within a reasonable period of time, not to exceed one year 
        except in the case of authorizations given in connection with 
        applications for life insurance or noncancelable or guaranteed 
        renewable health insurance and identified as such, two years 
        after the date of the policy. 
           The responsible authority may require a person requesting 
        copies of data under this paragraph to pay the actual costs of 
        making, certifying, and compiling the copies. 
           (e) Private or confidential data on an individual may be 
        discussed at a meeting open to the public to the extent provided 
        in section 13D.05. 
           Sec. 2.  Minnesota Statutes 2001 Supplement, section 
        245.474, subdivision 4, is amended to read: 
           Subd. 4.  [STAFF SAFETY TRAINING.] The commissioner 
        shall by rule require all staff in mental health and support 
        units at regional treatment centers who have contact with 
        persons with mental illness or severe emotional disturbance to 
        be appropriately trained in violence reduction and violence 
        prevention and shall establish criteria for such training.  
        Training programs shall be developed with input from consumer 
        advocacy organizations and shall employ violence prevention 
        techniques as preferable to physical interaction. 
           Sec. 3.  Minnesota Statutes 2000, section 245.4932, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENTS.] Notwithstanding section 256.025, 
        subdivision 2, Payments under sections 245.493 to 245.496 to 
        providers for services for which the collaborative elects to pay 
        the nonfederal share of medical assistance shall only be made of 
        federal earnings from services provided under sections 245.493 
        to 245.496. 
           Sec. 4.  Minnesota Statutes 2000, section 253B.045, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FACILITIES.] Each county or a group of counties 
        shall maintain or provide by contract a facility for confinement 
        of persons held temporarily for observation, evaluation, 
        diagnosis, treatment, and care.  When the temporary confinement 
        is provided at a regional center, the commissioner shall charge 
        the county of financial responsibility for the costs of 
        confinement of persons hospitalized under section 253B.05, 
        subdivisions 1 and 2, and section 253B.07, subdivision 2b, 
        except that the commissioner shall bill the responsible prepaid 
        plan for medically necessary hospitalizations for individuals 
        enrolled in a prepaid plan under contract to provide medical 
        assistance, general assistance medical care, or MinnesotaCare 
        services.  If the prepaid plan determines under the terms of the 
        medical assistance, general assistance medical care, or 
        MinnesotaCare contract that a hospitalization was not medically 
        necessary health plan first.  If the person has health plan 
        coverage, but the hospitalization does not meet the criteria in 
        subdivision 6 or section 62M.07, 62Q.53, or 62Q.535, the county 
        is responsible.  "County of financial responsibility" means the 
        county in which the person resides at the time of confinement 
        or, if the person has no residence in this state, the county 
        which initiated the confinement.  The charge shall be based on 
        the commissioner's determination of the cost of care pursuant to 
        section 246.50, subdivision 5.  When there is a dispute as to 
        which county is the county of financial responsibility, the 
        county charged for the costs of confinement shall pay for them 
        pending final determination of the dispute over financial 
        responsibility.  Disputes about the county of financial 
        responsibility shall be submitted to the commissioner to be 
        settled in the manner prescribed in section 256G.09. 
           Sec. 5.  Minnesota Statutes 2000, section 256.01, 
        subdivision 11, is amended to read: 
           Subd. 11.  [CENTRALIZED DISBURSEMENT SYSTEM.] The state 
        agency may establish a system for the centralized disbursement 
        of food coupons, assistance payments, and related documents.  
        Benefits shall be issued by the state or county and funded under 
        this section according to section 256.025, subdivision 3, and 
        subject to section 256.017.  
           Sec. 6.  Minnesota Statutes 2000, section 256.023, is 
        amended to read: 
           256.023 [ONE HUNDRED PERCENT COUNTY ASSISTANCE.] 
           The commissioner of human services may maintain client 
        records and issue public assistance benefits that are over state 
        and federal standards or that are not required by state or 
        federal law, providing the cost of benefits is paid by the 
        counties to the department of human services.  Payment methods 
        for this section shall be according to section 256.025, 
        subdivision 3. 
           Sec. 7.  Minnesota Statutes 2000, section 256.9685, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY.] (a) The commissioner shall 
        establish procedures for determining medical assistance and 
        general assistance medical care payment rates under a 
        prospective payment system for inpatient hospital services in 
        hospitals that qualify as vendors of medical assistance.  The 
        commissioner shall establish, by rule, procedures for 
        implementing this section and sections 256.9686, 256.969, and 
        256.9695.  Services must meet the requirements of section 
        256B.04, subdivision 15, or 256D.03, subdivision 7, paragraph 
        (b), to be eligible for payment. 
           (b) The commissioner may reduce the types of inpatient 
        hospital admissions that are required to be certified as 
        medically necessary after notice in the State Register and a 
        30-day comment period. 
           Sec. 8.  Minnesota Statutes 2000, section 256.9866, is 
        amended to read: 
           256.9866 [COMMUNITY SERVICE AS A COUNTY OBLIGATION.] 
           Community service shall be an acceptable sentencing option 
        but shall not reduce the state or federal share of any amount to 
        be repaid or any subsequent recovery.  Any reduction or offset 
        of any such amount ordered by a court shall be treated as 
        follows: 
           (1) any reduction in an overpayment amount, to include the 
        amount ordered as restitution, shall not reduce the underlying 
        amount established as an overpayment by the state or county 
        agency; 
           (2) total overpayments shall continue as a debt owed and 
        may be recovered by any civil or administrative means otherwise 
        available to the state or county agency; and 
           (3) any amount ordered to be offset against any overpayment 
        shall be deducted from the county share only of any recovery and 
        shall be based on the prevailing state minimum wage.  To the 
        extent that any deduction is in fact made against any state or 
        county share, it shall be reimbursed from the county share of 
        payments to be made under section 256.025. 
           Sec. 9.  Minnesota Statutes 2000, section 256B.041, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PAYMENT BY COUNTY TO STATE TREASURER.] If 
        required by federal law or rules promulgated thereunder, or by 
        authorized rule of the state agency, each county shall pay to 
        the state treasurer the portion of medical assistance paid by 
        the state for which it is responsible.  The county's share of 
        cost shall be ten percent of that portion not met by federal 
        funds. 
           The county shall advance ten percent of that portion of 
        medical assistance costs not met by federal funds, based upon 
        estimates submitted by the state agency to the county agency, 
        stating the estimated expenditures for the succeeding month.  
        Upon the direction of the county agency, payment shall be made 
        monthly by the county to the state for the estimated 
        expenditures for each month.  Adjustment of any overestimate or 
        underestimate based on actual expenditures shall be made by the 
        state agency by adjusting the estimate for any succeeding month. 
           Beginning July 1, 1991, the state will reimburse counties 
        according to the payment schedule in section 256.025 for the 
        county share of local agency expenditures under this subdivision 
        from January 1, 1991, on.  Payment to counties under this 
        subdivision is subject to the provisions of section 256.017. 
           Sec. 10.  Minnesota Statutes 2000, section 256B.0575, is 
        amended to read: 
           256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 
        PERSONS.] 
           When an institutionalized person is determined eligible for 
        medical assistance, the income that exceeds the deductions in 
        paragraphs (a) and (b) must be applied to the cost of 
        institutional care.  
           (a) The following amounts must be deducted from the 
        institutionalized person's income in the following order: 
           (1) the personal needs allowance under section 256B.35 or, 
        for a veteran who does not have a spouse or child, or a 
        surviving spouse of a veteran having no child, the amount of an 
        improved pension received from the veteran's administration not 
        exceeding $90 per month; 
           (2) the personal allowance for disabled individuals under 
        section 256B.36; 
           (3) if the institutionalized person has a legally appointed 
        guardian or conservator, five percent of the recipient's gross 
        monthly income up to $100 as reimbursement for guardianship or 
        conservatorship services; 
           (4) a monthly income allowance determined under section 
        256B.058, subdivision 2, but only to the extent income of the 
        institutionalized spouse is made available to the community 
        spouse; 
           (5) a monthly allowance for children under age 18 which, 
        together with the net income of the children, would provide 
        income equal to the medical assistance standard for families and 
        children according to section 256B.056, subdivision 4, for a 
        family size that includes only the minor children.  This 
        deduction applies only if the children do not live with the 
        community spouse and only to the extent that the deduction is 
        not included in the personal needs allowance under section 
        256B.35, subdivision 1, as child support garnished under a court 
        order; 
           (6) a monthly family allowance for other family members, 
        equal to one-third of the difference between 122 percent of the 
        federal poverty guidelines and the monthly income for that 
        family member; 
           (7) reparations payments made by the Federal Republic of 
        Germany and reparations payments made by the Netherlands for 
        victims of Nazi persecution between 1940 and 1945; 
           (8) all other exclusions from income for institutionalized 
        persons as mandated by federal law; and 
           (9) amounts for reasonable expenses incurred for necessary 
        medical or remedial care for the institutionalized spouse person 
        that are not medical assistance covered expenses and that are 
        not subject to payment by a third party.  
           For purposes of clause (6), "other family member" means a 
        person who resides with the community spouse and who is a minor 
        or dependent child, dependent parent, or dependent sibling of 
        either spouse.  "Dependent" means a person who could be claimed 
        as a dependent for federal income tax purposes under the 
        Internal Revenue Code. 
           (b) Income shall be allocated to an institutionalized 
        person for a period of up to three calendar months, in an amount 
        equal to the medical assistance standard for a family size of 
        one if:  
           (1) a physician certifies that the person is expected to 
        reside in the long-term care facility for three calendar months 
        or less; 
           (2) if the person has expenses of maintaining a residence 
        in the community; and 
           (3) if one of the following circumstances apply:  
           (i) the person was not living together with a spouse or a 
        family member as defined in paragraph (a) when the person 
        entered a long-term care facility; or 
           (ii) the person and the person's spouse become 
        institutionalized on the same date, in which case the allocation 
        shall be applied to the income of one of the spouses.  
        For purposes of this paragraph, a person is determined to be 
        residing in a licensed nursing home, regional treatment center, 
        or medical institution if the person is expected to remain for a 
        period of one full calendar month or more. 
           Sec. 11.  Minnesota Statutes 2001 Supplement, section 
        256B.0623, subdivision 14, is amended to read: 
           Subd. 14.  [BILLING WHEN SERVICES ARE PROVIDED BY QUALIFIED 
        STATE STAFF.] When rehabilitative services are provided by 
        qualified state staff who are assigned to pilot projects under 
        section 245.4661, the county or other local entity to which the 
        qualified state staff are assigned may consider these staff part 
        of the local provider entity for which certification is sought 
        under this section and may bill the medical assistance program 
        for qualifying services provided by the qualified state 
        staff.  Notwithstanding section 256.025, subdivision 2, Payments 
        for services provided by state staff who are assigned to adult 
        mental health initiatives shall only be made from federal funds. 
           Sec. 12.  Minnesota Statutes 2001 Supplement, section 
        256B.0625, subdivision 13, is amended to read: 
           Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
        except for fertility drugs when specifically used to enhance 
        fertility, if prescribed by a licensed practitioner and 
        dispensed by a licensed pharmacist, by a physician enrolled in 
        the medical assistance program as a dispensing physician, or by 
        a physician or a nurse practitioner employed by or under 
        contract with a community health board as defined in section 
        145A.02, subdivision 5, for the purposes of communicable disease 
        control.  The commissioner, after receiving recommendations from 
        professional medical associations and professional pharmacist 
        associations, shall designate a formulary committee to advise 
        the commissioner on the names of drugs for which payment is 
        made, recommend a system for reimbursing providers on a set fee 
        or charge basis rather than the present system, and develop 
        methods encouraging use of generic drugs when they are less 
        expensive and equally effective as trademark drugs.  The 
        formulary committee shall consist of nine members, four of whom 
        shall be physicians who are not employed by the department of 
        human services, and a majority of whose practice is for persons 
        paying privately or through health insurance, three of whom 
        shall be pharmacists who are not employed by the department of 
        human services, and a majority of whose practice is for persons 
        paying privately or through health insurance, a consumer 
        representative, and a nursing home representative.  Committee 
        members shall serve three-year terms and shall serve without 
        compensation.  Members may be reappointed once.  
           (b) The commissioner shall establish a drug formulary.  Its 
        establishment and publication shall not be subject to the 
        requirements of the Administrative Procedure Act, but the 
        formulary committee shall review and comment on the formulary 
        contents.  The formulary committee shall review and recommend 
        drugs which require prior authorization.  The formulary 
        committee may recommend drugs for prior authorization directly 
        to the commissioner, as long as opportunity for public input is 
        provided.  Prior authorization may be requested by the 
        commissioner based on medical and clinical criteria before 
        certain drugs are eligible for payment.  Before a drug may be 
        considered for prior authorization at the request of the 
        commissioner:  
           (1) the drug formulary committee must develop criteria to 
        be used for identifying drugs; the development of these criteria 
        is not subject to the requirements of chapter 14, but the 
        formulary committee shall provide opportunity for public input 
        in developing criteria; 
           (2) the drug formulary committee must hold a public forum 
        and receive public comment for an additional 15 days; and 
           (3) the commissioner must provide information to the 
        formulary committee on the impact that placing the drug on prior 
        authorization will have on the quality of patient care and 
        information regarding whether the drug is subject to clinical 
        abuse or misuse.  Prior authorization may be required by the 
        commissioner before certain formulary drugs are eligible for 
        payment.  The formulary shall not include:  
           (i) drugs or products for which there is no federal 
        funding; 
           (ii) over-the-counter drugs, except for antacids, 
        acetaminophen, family planning products, aspirin, insulin, 
        products for the treatment of lice, vitamins for adults with 
        documented vitamin deficiencies, vitamins for children under the 
        age of seven and pregnant or nursing women, and any other 
        over-the-counter drug identified by the commissioner, in 
        consultation with the drug formulary committee, as necessary, 
        appropriate, and cost-effective for the treatment of certain 
        specified chronic diseases, conditions or disorders, and this 
        determination shall not be subject to the requirements of 
        chapter 14; 
           (iii) anorectics, except that medically necessary 
        anorectics shall be covered for a recipient previously diagnosed 
        as having pickwickian syndrome and currently diagnosed as having 
        diabetes and being morbidly obese; 
           (iv) drugs for which medical value has not been 
        established; and 
           (v) drugs from manufacturers who have not signed a rebate 
        agreement with the Department of Health and Human Services 
        pursuant to section 1927 of title XIX of the Social Security Act.
           The commissioner shall publish conditions for prohibiting 
        payment for specific drugs after considering the formulary 
        committee's recommendations.  An honorarium of $100 per meeting 
        and reimbursement for mileage shall be paid to each committee 
        member in attendance.  
           (c) The basis for determining the amount of payment shall 
        be the lower of the actual acquisition costs of the drugs plus a 
        fixed dispensing fee; the maximum allowable cost set by the 
        federal government or by the commissioner plus the fixed 
        dispensing fee; or the usual and customary price charged to the 
        public.  The amount of payment basis must be reduced to reflect 
        all discount amounts applied to the charge by any 
        provider/insurer agreement or contract for submitted charges to 
        medical assistance programs.  The net submitted charge may not 
        be greater than the patient liability for the service.  The 
        pharmacy dispensing fee shall be $3.65, except that the 
        dispensing fee for intravenous solutions which must be 
        compounded by the pharmacist shall be $8 per bag, $14 per bag 
        for cancer chemotherapy products, and $30 per bag for total 
        parenteral nutritional products dispensed in one liter 
        quantities, or $44 per bag for total parenteral nutritional 
        products dispensed in quantities greater than one liter.  Actual 
        acquisition cost includes quantity and other special discounts 
        except time and cash discounts.  The actual acquisition cost of 
        a drug shall be estimated by the commissioner, at average 
        wholesale price minus nine percent, except that where a drug has 
        had its wholesale price reduced as a result of the actions of 
        the National Association of Medicaid Fraud Control Units, the 
        estimated actual acquisition cost shall be the reduced average 
        wholesale price, without the nine percent deduction.  The 
        maximum allowable cost of a multisource drug may be set by the 
        commissioner and it shall be comparable to, but no higher than, 
        the maximum amount paid by other third-party payors in this 
        state who have maximum allowable cost programs.  The 
        commissioner shall set maximum allowable costs for multisource 
        drugs that are not on the federal upper limit list as described 
        in United States Code, title 42, chapter 7, section 1396r-8(e), 
        the Social Security Act, and Code of Federal Regulations, title 
        42, part 447, section 447.332.  Establishment of the amount of 
        payment for drugs shall not be subject to the requirements of 
        the Administrative Procedure Act.  An additional dispensing fee 
        of $.30 may be added to the dispensing fee paid to pharmacists 
        for legend drug prescriptions dispensed to residents of 
        long-term care facilities when a unit dose blister card system, 
        approved by the department, is used.  Under this type of 
        dispensing system, the pharmacist must dispense a 30-day supply 
        of drug.  The National Drug Code (NDC) from the drug container 
        used to fill the blister card must be identified on the claim to 
        the department.  The unit dose blister card containing the drug 
        must meet the packaging standards set forth in Minnesota Rules, 
        part 6800.2700, that govern the return of unused drugs to the 
        pharmacy for reuse.  The pharmacy provider will be required to 
        credit the department for the actual acquisition cost of all 
        unused drugs that are eligible for reuse.  Over-the-counter 
        medications must be dispensed in the manufacturer's unopened 
        package.  The commissioner may permit the drug clozapine to be 
        dispensed in a quantity that is less than a 30-day supply.  
        Whenever a generically equivalent product is available, payment 
        shall be on the basis of the actual acquisition cost of the 
        generic drug, unless the prescriber specifically indicates 
        "dispense as written - brand necessary" on the prescription as 
        required by section 151.21, subdivision 2. 
           (d) For purposes of this subdivision, "multisource drugs" 
        means covered outpatient drugs, excluding innovator multisource 
        drugs for which there are two or more drug products, which: 
           (1) are related as therapeutically equivalent under the 
        Food and Drug Administration's most recent publication of 
        "Approved Drug Products with Therapeutic Equivalence 
        Evaluations"; 
           (2) are pharmaceutically equivalent and bioequivalent as 
        determined by the Food and Drug Administration; and 
           (3) are sold or marketed in Minnesota. 
        "Innovator multisource drug" means a multisource drug that was 
        originally marketed under an original new drug application 
        approved by the Food and Drug Administration. 
           (e) The basis for determining the amount of payment for 
        drugs administered in an outpatient setting shall be the lower 
        of the usual and customary cost submitted by the provider; the 
        average wholesale price minus five percent; or the maximum 
        allowable cost set by the federal government under United States 
        Code, title 42, chapter 7, section 1396r-8(e), and Code of 
        Federal Regulations, title 42, section 447.332, or by the 
        commissioner under paragraph (c). 
           Sec. 13.  Minnesota Statutes 2001 Supplement, section 
        256B.0625, subdivision 20, is amended to read: 
           Subd. 20.  [MENTAL HEALTH CASE MANAGEMENT.] (a) To the 
        extent authorized by rule of the state agency, medical 
        assistance covers case management services to persons with 
        serious and persistent mental illness and children with severe 
        emotional disturbance.  Services provided under this section 
        must meet the relevant standards in sections 245.461 to 
        245.4888, the Comprehensive Adult and Children's Mental Health 
        Acts, Minnesota Rules, parts 9520.0900 to 9520.0926, and 
        9505.0322, excluding subpart 10. 
           (b) Entities meeting program standards set out in rules 
        governing family community support services as defined in 
        section 245.4871, subdivision 17, are eligible for medical 
        assistance reimbursement for case management services for 
        children with severe emotional disturbance when these services 
        meet the program standards in Minnesota Rules, parts 9520.0900 
        to 9520.0926 and 9505.0322, excluding subparts 6 and 10. 
           (c) Medical assistance and MinnesotaCare payment for mental 
        health case management shall be made on a monthly basis.  In 
        order to receive payment for an eligible child, the provider 
        must document at least a face-to-face contact with the child, 
        the child's parents, or the child's legal representative.  To 
        receive payment for an eligible adult, the provider must 
        document: 
           (1) at least a face-to-face contact with the adult or the 
        adult's legal representative; or 
           (2) at least a telephone contact with the adult or the 
        adult's legal representative and document a face-to-face contact 
        with the adult or the adult's legal representative within the 
        preceding two months. 
           (d) Payment for mental health case management provided by 
        county or state staff shall be based on the monthly rate 
        methodology under section 256B.094, subdivision 6, paragraph 
        (b), with separate rates calculated for child welfare and mental 
        health, and within mental health, separate rates for children 
        and adults. 
           (e) Payment for mental health case management provided by 
        Indian health services or by agencies operated by Indian tribes 
        may be made according to this section or other relevant 
        federally approved rate setting methodology. 
           (f) Payment for mental health case management provided by 
        vendors who contract with a county or Indian tribe shall be 
        based on a monthly rate negotiated by the host county or tribe.  
        The negotiated rate must not exceed the rate charged by the 
        vendor for the same service to other payers.  If the service is 
        provided by a team of contracted vendors, the county or tribe 
        may negotiate a team rate with a vendor who is a member of the 
        team.  The team shall determine how to distribute the rate among 
        its members.  No reimbursement received by contracted vendors 
        shall be returned to the county or tribe, except to reimburse 
        the county or tribe for advance funding provided by the county 
        or tribe to the vendor. 
           (g) If the service is provided by a team which includes 
        contracted vendors, tribal staff, and county or state staff, the 
        costs for county or state staff participation in the team shall 
        be included in the rate for county-provided services.  In this 
        case, the contracted vendor, the tribal agency, and the county 
        may each receive separate payment for services provided by each 
        entity in the same month.  In order to prevent duplication of 
        services, each entity must document, in the recipient's file, 
        the need for team case management and a description of the roles 
        of the team members. 
           (h) The commissioner shall calculate the nonfederal share 
        of actual medical assistance and general assistance medical care 
        payments for each county, based on the higher of calendar year 
        1995 or 1996, by service date, project that amount forward to 
        1999, and transfer one-half of the result from medical 
        assistance and general assistance medical care to each county's 
        mental health grants under sections 245.4886 and 256E.12 for 
        calendar year 1999.  The annualized minimum amount added to each 
        county's mental health grant shall be $3,000 per year for 
        children and $5,000 per year for adults.  The commissioner may 
        reduce the statewide growth factor in order to fund these 
        minimums.  The annualized total amount transferred shall become 
        part of the base for future mental health grants for each county.
           (i) Any net increase in revenue to the county or tribe as a 
        result of the change in this section must be used to provide 
        expanded mental health services as defined in sections 245.461 
        to 245.4888, the Comprehensive Adult and Children's Mental 
        Health Acts, excluding inpatient and residential treatment.  For 
        adults, increased revenue may also be used for services and 
        consumer supports which are part of adult mental health projects 
        approved under Laws 1997, chapter 203, article 7, section 25.  
        For children, increased revenue may also be used for respite 
        care and nonresidential individualized rehabilitation services 
        as defined in section 245.492, subdivisions 17 and 23.  
        "Increased revenue" has the meaning given in Minnesota Rules, 
        part 9520.0903, subpart 3.  
           (j) Notwithstanding section 256B.19, subdivision 1, the 
        nonfederal share of costs for mental health case management 
        shall be provided by the recipient's county of responsibility, 
        as defined in sections 256G.01 to 256G.12, from sources other 
        than federal funds or funds used to match other federal funds.  
        If the service is provided by a tribal agency, the nonfederal 
        share, if any, shall be provided by the recipient's tribe.  
           (k) The commissioner may suspend, reduce, or terminate the 
        reimbursement to a provider that does not meet the reporting or 
        other requirements of this section.  The county of 
        responsibility, as defined in sections 256G.01 to 256G.12, or, 
        if applicable, the tribal agency, is responsible for any federal 
        disallowances.  The county or tribe may share this 
        responsibility with its contracted vendors.  
           (l) The commissioner shall set aside a portion of the 
        federal funds earned under this section to repay the special 
        revenue maximization account under section 256.01, subdivision 
        2, clause (15).  The repayment is limited to: 
           (1) the costs of developing and implementing this section; 
        and 
           (2) programming the information systems. 
           (m) Notwithstanding section 256.025, subdivision 2, 
        Payments to counties and tribal agencies for case management 
        expenditures under this section shall only be made from federal 
        earnings from services provided under this section.  Payments to 
        county-contracted vendors shall include both the federal 
        earnings and the county share. 
           (n) Notwithstanding section 256B.041, county payments for 
        the cost of mental health case management services provided by 
        county or state staff shall not be made to the state treasurer.  
        For the purposes of mental health case management services 
        provided by county or state staff under this section, the 
        centralized disbursement of payments to counties under section 
        256B.041 consists only of federal earnings from services 
        provided under this section. 
           (o) Case management services under this subdivision do not 
        include therapy, treatment, legal, or outreach services. 
           (p) If the recipient is a resident of a nursing facility, 
        intermediate care facility, or hospital, and the recipient's 
        institutional care is paid by medical assistance, payment for 
        case management services under this subdivision is limited to 
        the last 180 days of the recipient's residency in that facility 
        and may not exceed more than six months in a calendar year. 
           (q) Payment for case management services under this 
        subdivision shall not duplicate payments made under other 
        program authorities for the same purpose. 
           (r) By July 1, 2000, the commissioner shall evaluate the 
        effectiveness of the changes required by this section, including 
        changes in number of persons receiving mental health case 
        management, changes in hours of service per person, and changes 
        in caseload size. 
           (s) For each calendar year beginning with the calendar year 
        2001, the annualized amount of state funds for each county 
        determined under paragraph (h) shall be adjusted by the county's 
        percentage change in the average number of clients per month who 
        received case management under this section during the fiscal 
        year that ended six months prior to the calendar year in 
        question, in comparison to the prior fiscal year. 
           (t) For counties receiving the minimum allocation of $3,000 
        or $5,000 described in paragraph (h), the adjustment in 
        paragraph (s) shall be determined so that the county receives 
        the higher of the following amounts: 
           (1) a continuation of the minimum allocation in paragraph 
        (h); or 
           (2) an amount based on that county's average number of 
        clients per month who received case management under this 
        section during the fiscal year that ended six months prior to 
        the calendar year in question, times the average statewide grant 
        per person per month for counties not receiving the minimum 
        allocation. 
           (u) The adjustments in paragraphs (s) and (t) shall be 
        calculated separately for children and adults. 
           Sec. 14.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 27, is amended to read: 
           Subd. 27.  [ORGAN AND TISSUE TRANSPLANTS.] Medical 
        assistance coverage for organ and tissue transplant procedures 
        is limited to those procedures covered by the Medicare program; 
        heart-lung transplants for persons with primary pulmonary 
        hypertension and or approved by the Advisory Committee on Organ 
        and Tissue Transplants.  All organ transplants must be performed 
        at Minnesota transplant centers meeting united network for organ 
        sharing criteria to perform heart-lung transplants; lung 
        transplants using cadaveric donors and performed at Minnesota 
        transplant centers meeting united network for organ sharing 
        criteria to perform lung transplants; pancreas transplants for 
        uremic diabetic recipients of kidney transplants and performed 
        at Minnesota facilities meeting united network for organ sharing 
        criteria to perform pancreas transplants; and allogenic bone 
        marrow transplants for persons with stage III or IV Hodgkin's 
        disease or at Medicare-approved organ transplant centers.  Stem 
        cell or bone marrow transplant centers must meet the standards 
        established by the Foundation for the Accreditation of 
        Hematopoietic Cell Therapy or be approved by the Advisory 
        Committee on Organ and Tissue Transplants.  Transplant 
        procedures must comply with all applicable laws, rules, and 
        regulations governing (1) coverage by the Medicare program, (2) 
        federal financial participation by the Medicaid program, and (3) 
        coverage by the Minnesota medical assistance 
        program.  Transplant centers must meet american society of 
        hematology and clinical oncology criteria for bone marrow 
        transplants and be located in Minnesota to receive reimbursement 
        for bone marrow Transplants performed out of Minnesota or the 
        local trade area must be prior authorized. 
           Sec. 15.  Minnesota Statutes 2000, section 256B.0629, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FUNCTION AND OBJECTIVES.] The advisory committee 
        shall meet at least twice a year.  The committee's activities 
        include, but are not limited to: 
           (1) collection of information on the efficacy and 
        experience of various forms of transplantation not approved by 
        Medicare; 
           (2) collection of information from Minnesota transplant 
        providers on available services, success rates, and the current 
        status of transplant activity in the state; 
           (3) development of guidelines for determining when and 
        under what conditions organ and tissue transplants not approved 
        by Medicare should be eligible for reimbursement by medical 
        assistance and general assistance medical care; 
           (4) providing recommendations, at least annually, to the 
        commissioner on:  (i) organ and tissue transplant procedures, 
        beyond those approved by Medicare, that should also be eligible 
        for reimbursement under medical assistance and general 
        assistance medical care; and (ii) which transplant centers 
        should be eligible for reimbursement from medical assistance and 
        general assistance medical care. 
           Sec. 16.  Minnesota Statutes 2000, section 256B.0915, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [CASE MANAGEMENT ACTIVITIES UNDER THE STATE 
        PLAN.] The commissioner shall seek an amendment to the home and 
        community-based services waiver for the elderly to implement the 
        provisions of subdivisions 1a and 1b.  If the commissioner is 
        unable to secure the approval of the secretary of health and 
        human services for the requested waiver amendment by December 
        31, 1993, the commissioner shall amend the medical assistance 
        state plan to provide that case management provided under the 
        home and community-based services waiver for the elderly is 
        performed by counties as an administrative function for the 
        proper and effective administration of the state medical 
        assistance plan.  Notwithstanding section 256.025, subdivision 
        3, The state shall reimburse counties for the nonfederal share 
        of costs for case management performed as an administrative 
        function under the home and community-based services waiver for 
        the elderly. 
           Sec. 17.  Minnesota Statutes 2001 Supplement, section 
        256B.0915, subdivision 3, is amended to read: 
           Subd. 3.  [LIMITS OF CASES, RATES, PAYMENTS, AND 
        FORECASTING.] (a) The number of medical assistance waiver 
        recipients that a county may serve must be allocated according 
        to the number of medical assistance waiver cases open on July 1 
        of each fiscal year.  Additional recipients may be served with 
        the approval of the commissioner. 
           (b) The monthly limit for the cost of waivered services to 
        an individual elderly waiver client shall be the weighted 
        average monthly nursing facility rate of the case mix resident 
        class to which the elderly waiver client would be assigned under 
        Minnesota Rules, parts 9549.0050 to 9549.0059, less the 
        recipient's maintenance needs allowance as described in 
        subdivision 1d, paragraph (a), until the first day of the state 
        fiscal year in which the resident assessment system as described 
        in section 256B.437 for nursing home rate determination is 
        implemented.  Effective on the first day of the state fiscal 
        year in which the resident assessment system as described in 
        section 256B.437 for nursing home rate determination is 
        implemented and the first day of each subsequent state fiscal 
        year, the monthly limit for the cost of waivered services to an 
        individual elderly waiver client shall be the rate of the case 
        mix resident class to which the waiver client would be assigned 
        under Minnesota Rules, parts 9549.0050 to 9549.0059, in effect 
        on the last day of the previous state fiscal year, adjusted by 
        the greater of any legislatively adopted home and 
        community-based services cost-of-living percentage increase or 
        any legislatively adopted statewide percent rate increase for 
        nursing facilities. 
           (c) If extended medical supplies and equipment or 
        environmental modifications are or will be purchased for an 
        elderly waiver client, the costs may be prorated for up to 12 
        consecutive months beginning with the month of purchase.  If the 
        monthly cost of a recipient's waivered services exceeds the 
        monthly limit established in paragraph (b), the annual cost of 
        all waivered services shall be determined.  In this event, the 
        annual cost of all waivered services shall not exceed 12 times 
        the monthly limit of waivered services as described in paragraph 
        (b).  
           (d) For a person who is a nursing facility resident at the 
        time of requesting a determination of eligibility for elderly 
        waivered services, a monthly conversion limit for the cost of 
        elderly waivered services may be requested.  The monthly 
        conversion limit for the cost of elderly waiver services shall 
        be the resident class assigned under Minnesota Rules, parts 
        9549.0050 to 9549.0059, for that resident in the nursing 
        facility where the resident currently resides until July 1 of 
        the state fiscal year in which the resident assessment system as 
        described in section 256B.437 for nursing home rate 
        determination is implemented.  Effective on July 1 of the state 
        fiscal year in which the resident assessment system as described 
        in section 256B.437 for nursing home rate determination is 
        implemented, the monthly conversion limit for the cost of 
        elderly waiver services shall be the per diem nursing facility 
        rate as determined by the resident assessment system as 
        described in section 256B.437 for that resident in the nursing 
        facility where the resident currently resides multiplied by 365 
        and divided by 12, less the recipient's maintenance needs 
        allowance as described in subdivision 1d.  The limit under this 
        clause only applies to persons discharged from a nursing 
        facility after a minimum 30-day stay and found eligible for 
        waivered services on or after July 1, 1997.  The following costs 
        must be included in determining the total monthly costs for the 
        waiver client: 
           (1) cost of all waivered services, including extended 
        medical supplies and equipment and environmental modifications; 
        and 
           (2) cost of skilled nursing, home health aide, and personal 
        care services reimbursable by medical assistance.  
           (e) Medical assistance funding for skilled nursing 
        services, private duty nursing, home health aide, and personal 
        care services for waiver recipients must be approved by the case 
        manager and included in the individual care plan. 
           (f) A county is not required to contract with a provider of 
        supplies and equipment if the monthly cost of the supplies and 
        equipment is less than $250.  
           (g) The adult foster care rate shall be considered a 
        difficulty of care payment and shall not include room and 
        board.  The adult foster care service rate shall be negotiated 
        between the county agency and the foster care provider.  The 
        elderly waiver payment for the foster care service in 
        combination with the payment for all other elderly waiver 
        services, including case management, must not exceed the limit 
        specified in paragraph (b). 
           (h) Payment for assisted living service shall be a monthly 
        rate negotiated and authorized by the county agency based on an 
        individualized service plan for each resident and may not cover 
        direct rent or food costs. 
           (1) The individualized monthly negotiated payment for 
        assisted living services as described in section 256B.0913, 
        subdivision 5, paragraph (g) or (h), and residential care 
        services as described in section 256B.0913, subdivision 5, 
        paragraph (f), shall not exceed the nonfederal share, in effect 
        on July 1 of the state fiscal year for which the rate limit is 
        being calculated, of the greater of either the statewide or any 
        of the geographic groups' weighted average monthly nursing 
        facility rate of the case mix resident class to which the 
        elderly waiver eligible client would be assigned under Minnesota 
        Rules, parts 9549.0050 to 9549.0059, less the maintenance needs 
        allowance as described in subdivision 1d, paragraph (a), until 
        the July 1 of the state fiscal year in which the resident 
        assessment system as described in section 256B.437 for nursing 
        home rate determination is implemented.  Effective on July 1 of 
        the state fiscal year in which the resident assessment system as 
        described in section 256B.437 for nursing home rate 
        determination is implemented and July 1 of each subsequent state 
        fiscal year, the individualized monthly negotiated payment for 
        the services described in this clause shall not exceed the limit 
        described in this clause which was in effect on June 30 of the 
        previous state fiscal year and which has been adjusted by the 
        greater of any legislatively adopted home and community-based 
        services cost-of-living percentage increase or any legislatively 
        adopted statewide percent rate increase for nursing facilities. 
           (2) The individualized monthly negotiated payment for 
        assisted living services described in section 144A.4605 and 
        delivered by a provider licensed by the department of health as 
        a class A home care provider or an assisted living home care 
        provider and provided in a building that is registered as a 
        housing with services establishment under chapter 144D and that 
        provides 24-hour supervision in combination with the payment for 
        other elderly waiver services, including case management, must 
        not exceed the limit specified in paragraph (b). 
           (i) The county shall negotiate individual service rates 
        with vendors and may authorize payment for actual costs up to 
        the county's current approved rate.  Persons or agencies must be 
        employed by or under a contract with the county agency or the 
        public health nursing agency of the local board of health in 
        order to receive funding under the elderly waiver program, 
        except as a provider of supplies and equipment when the monthly 
        cost of the supplies and equipment is less than $250.  
           (j) Reimbursement for the medical assistance recipients 
        under the approved waiver shall be made from the medical 
        assistance account through the invoice processing procedures of 
        the department's Medicaid Management Information System (MMIS), 
        only with the approval of the client's case manager.  The budget 
        for the state share of the Medicaid expenditures shall be 
        forecasted with the medical assistance budget, and shall be 
        consistent with the approved waiver.  
           (k) To improve access to community services and eliminate 
        payment disparities between the alternative care program and the 
        elderly waiver, the commissioner shall establish statewide 
        maximum service rate limits and eliminate county-specific 
        service rate limits. 
           (1) Effective July 1, 2001, for service rate limits, except 
        those described or defined in paragraphs (g) and (h), the rate 
        limit for each service shall be the greater of the alternative 
        care statewide maximum rate or the elderly waiver statewide 
        maximum rate. 
           (2) Counties may negotiate individual service rates with 
        vendors for actual costs up to the statewide maximum service 
        rate limit. 
           (l) Beginning July 1, 1991, the state shall reimburse 
        counties according to the payment schedule in section 256.025 
        for the county share of costs incurred under this subdivision on 
        or after January 1, 1991, for individuals who are receiving 
        medical assistance. 
           Sec. 18.  Minnesota Statutes 2001 Supplement, section 
        256B.0924, subdivision 6, is amended to read: 
           Subd. 6.  [PAYMENT FOR TARGETED CASE MANAGEMENT.] (a) 
        Medical assistance and MinnesotaCare payment for targeted case 
        management shall be made on a monthly basis.  In order to 
        receive payment for an eligible adult, the provider must 
        document at least one contact per month and not more than two 
        consecutive months without a face-to-face contact with the adult 
        or the adult's legal representative. 
           (b) Payment for targeted case management provided by county 
        staff under this subdivision shall be based on the monthly rate 
        methodology under section 256B.094, subdivision 6, paragraph 
        (b), calculated as one combined average rate together with adult 
        mental health case management under section 256B.0625, 
        subdivision 20, except for calendar year 2002.  In calendar year 
        2002, the rate for case management under this section shall be 
        the same as the rate for adult mental health case management in 
        effect as of December 31, 2001.  Billing and payment must 
        identify the recipient's primary population group to allow 
        tracking of revenues. 
           (c) Payment for targeted case management provided by 
        county-contracted vendors shall be based on a monthly rate 
        negotiated by the host county.  The negotiated rate must not 
        exceed the rate charged by the vendor for the same service to 
        other payers.  If the service is provided by a team of 
        contracted vendors, the county may negotiate a team rate with a 
        vendor who is a member of the team.  The team shall determine 
        how to distribute the rate among its members.  No reimbursement 
        received by contracted vendors shall be returned to the county, 
        except to reimburse the county for advance funding provided by 
        the county to the vendor. 
           (d) If the service is provided by a team that includes 
        contracted vendors and county staff, the costs for county staff 
        participation on the team shall be included in the rate for 
        county-provided services.  In this case, the contracted vendor 
        and the county may each receive separate payment for services 
        provided by each entity in the same month.  In order to prevent 
        duplication of services, the county must document, in the 
        recipient's file, the need for team targeted case management and 
        a description of the different roles of the team members. 
           (e) Notwithstanding section 256B.19, subdivision 1, the 
        nonfederal share of costs for targeted case management shall be 
        provided by the recipient's county of responsibility, as defined 
        in sections 256G.01 to 256G.12, from sources other than federal 
        funds or funds used to match other federal funds. 
           (f) The commissioner may suspend, reduce, or terminate 
        reimbursement to a provider that does not meet the reporting or 
        other requirements of this section.  The county of 
        responsibility, as defined in sections 256G.01 to 256G.12, is 
        responsible for any federal disallowances.  The county may share 
        this responsibility with its contracted vendors. 
           (g) The commissioner shall set aside five percent of the 
        federal funds received under this section for use in reimbursing 
        the state for costs of developing and implementing this section. 
           (h) Notwithstanding section 256.025, subdivision 2, 
        Payments to counties for targeted case management expenditures 
        under this section shall only be made from federal earnings from 
        services provided under this section.  Payments to contracted 
        vendors shall include both the federal earnings and the county 
        share. 
           (i) Notwithstanding section 256B.041, county payments for 
        the cost of case management services provided by county staff 
        shall not be made to the state treasurer.  For the purposes of 
        targeted case management services provided by county staff under 
        this section, the centralized disbursement of payments to 
        counties under section 256B.041 consists only of federal 
        earnings from services provided under this section. 
           (j) If the recipient is a resident of a nursing facility, 
        intermediate care facility, or hospital, and the recipient's 
        institutional care is paid by medical assistance, payment for 
        targeted case management services under this subdivision is 
        limited to the last 180 days of the recipient's residency in 
        that facility and may not exceed more than six months in a 
        calendar year. 
           (k) Payment for targeted case management services under 
        this subdivision shall not duplicate payments made under other 
        program authorities for the same purpose. 
           (l) Any growth in targeted case management services and 
        cost increases under this section shall be the responsibility of 
        the counties. 
           Sec. 19.  Minnesota Statutes 2000, section 256B.0945, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PAYMENT RATES.] (a) Notwithstanding sections 
        256.025, subdivision 2; 256B.19; and 256B.041, payments to 
        counties for residential services provided by a residential 
        facility shall only be made of federal earnings for services 
        provided under this section, and the nonfederal share of costs 
        for services provided under this section shall be paid by the 
        county from sources other than federal funds or funds used to 
        match other federal funds.  Payment to counties for services 
        provided according to subdivision 2, paragraph (a), shall be the 
        federal share of the contract rate.  Payment to counties for 
        services provided according to subdivision 2, paragraph (b), 
        shall be a proportion of the per day contract rate that relates 
        to rehabilitative mental health services and shall not include 
        payment for costs or services that are billed to the IV-E 
        program as room and board.  
           (b) The commissioner shall set aside a portion not to 
        exceed five percent of the federal funds earned under this 
        section to cover the state costs of administering this section.  
        Any unexpended funds from the set-aside shall be distributed to 
        the counties in proportion to their earnings under this section. 
           Sec. 20.  Minnesota Statutes 2000, section 256B.19, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DIVISION OF COST.] The state and county 
        share of medical assistance costs not paid by federal funds 
        shall be as follows:  
           (1) ninety percent state funds and ten percent county 
        funds, unless otherwise provided below; 
           (2) beginning January 1, 1992, 50 percent state funds and 
        50 percent county funds for the cost of placement of severely 
        emotionally disturbed children in regional treatment centers.  
           For counties that participate in a Medicaid demonstration 
        project under sections 256B.69 and 256B.71, the division of the 
        nonfederal share of medical assistance expenses for payments 
        made to prepaid health plans or for payments made to health 
        maintenance organizations in the form of prepaid capitation 
        payments, this division of medical assistance expenses shall be 
        95 percent by the state and five percent by the county of 
        financial responsibility.  
           In counties where prepaid health plans are under contract 
        to the commissioner to provide services to medical assistance 
        recipients, the cost of court ordered treatment ordered without 
        consulting the prepaid health plan that does not include 
        diagnostic evaluation, recommendation, and referral for 
        treatment by the prepaid health plan is the responsibility of 
        the county of financial responsibility.  
           Sec. 21.  Minnesota Statutes 2001 Supplement, section 
        256B.19, subdivision 1c, is amended to read: 
           Subd. 1c.  [ADDITIONAL PORTION OF NONFEDERAL SHARE.] (a) 
        Hennepin county shall be responsible for a monthly transfer 
        payment of $1,500,000, due before noon on the 15th of each month 
        and the University of Minnesota shall be responsible for a 
        monthly transfer payment of $500,000 due before noon on the 15th 
        of each month, beginning July 15, 1995.  These sums shall be 
        part of the designated governmental unit's portion of the 
        nonfederal share of medical assistance costs, but shall not be 
        subject to payback provisions of section 256.025. 
           (b) Beginning July 1, 2001, Hennepin county's payment under 
        paragraph (a) shall be $2,066,000 each month. 
           (c) Beginning July 1, 2001, the commissioner shall increase 
        annual capitation payments to the metropolitan health plan under 
        section 256B.69 for the prepaid medical assistance program by 
        approximately $3,400,000, plus any available federal matching 
        funds, to recognize higher than average medical education costs. 
           Sec. 22.  Minnesota Statutes 2000, section 256B.19, 
        subdivision 1d, is amended to read: 
           Subd. 1d.  [PORTION OF NONFEDERAL SHARE TO BE PAID BY 
        CERTAIN COUNTIES.] In addition to the percentage contribution 
        paid by a county under subdivision 1, the governmental units 
        designated in this subdivision shall be responsible for an 
        additional portion of the nonfederal share of medical assistance 
        cost.  For purposes of this subdivision, "designated 
        governmental unit" means the counties of Becker, Beltrami, 
        Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, Pennington, 
        Pipestone, Ramsey, St. Louis, Steele, Todd, Traverse, and Wadena.
           Beginning in 1994, each of the governmental units 
        designated in this subdivision shall transfer before noon on May 
        31 to the state Medicaid agency an amount equal to the number of 
        licensed beds in any nursing home owned and operated by the 
        county, with the county named as licensee, multiplied by $5,723. 
        If two or more counties own and operate a nursing home, the 
        payment shall be prorated.  These sums shall be part of the 
        designated governmental unit's portion of the nonfederal share 
        of medical assistance costs, but shall not be subject to payback 
        provisions of section 256.025. 
           Sec. 23.  Minnesota Statutes 2000, section 256B.19, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [PILOT PROJECT REIMBURSEMENT.] In counties where 
        a pilot or demonstration project is operated under the medical 
        assistance program, the state may pay 100 percent of the 
        administrative costs for the pilot or demonstration project 
        after June 30, 1990.  Reimbursement for these costs is subject 
        to section 256.025. 
           Sec. 24.  Minnesota Statutes 2000, section 256B.37, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [SUPPLEMENTAL PAYMENT BY MEDICAL ASSISTANCE.] 
        Medical assistance payment will not be made when either covered 
        charges are paid in full by a third party or the provider has an 
        agreement to accept payment for less than charges as payment in 
        full.  Payment for patients that are simultaneously covered by 
        medical assistance and a liable third party other than Medicare 
        will be determined as the lesser of clauses (1) to (3): 
           (1) the patient liability according to the provider/insurer 
        agreement; 
           (2) covered charges minus the third party payment amount; 
        or 
           (3) the medical assistance rate minus the third party 
        payment amount. 
        A negative difference will not be implemented. 
           All providers must reduce their submitted charge to medical 
        assistance programs to reflect all discount amounts applied to 
        the charge by any provider/insurer agreement or contract.  The 
        net submitted charge may not be greater than the patient 
        liability for the service. 
           Sec. 25.  Minnesota Statutes 2000, section 256B.692, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REQUIREMENTS OF THE COUNTY BOARD.] A county 
        board that intends to purchase or provide health care under this 
        section, which may include purchasing all or part of these 
        services from health plans or individual providers on a 
        fee-for-service basis, or providing these services directly, 
        must demonstrate the ability to follow and agree to the 
        following requirements: 
           (1) purchase all covered services for a fixed payment from 
        the state that does not exceed the estimated state and federal 
        cost that would have occurred under the prepaid medical 
        assistance and general assistance medical care programs; 
           (2) ensure that covered services are accessible to all 
        enrollees and that enrollees have a reasonable choice of 
        providers, health plans, or networks when possible.  If the 
        county is also a provider of service, the county board shall 
        develop a process to ensure that providers employed by the 
        county are not the sole referral source and are not the sole 
        provider of health care services if other providers, which meet 
        the same quality and cost requirements are available; 
           (3) issue payments to participating vendors or networks in 
        a timely manner; 
           (4) establish a process to ensure and improve the quality 
        of care provided; 
           (5) provide appropriate quality and other required data in 
        a format required by the state; 
           (6) provide a system for advocacy, enrollee protection, and 
        complaints and appeals that is independent of care providers or 
        other risk bearers and complies with section 256B.69; 
           (7) for counties within the seven-county metropolitan area, 
        ensure that the implementation and operation of the Minnesota 
        senior health options demonstration project and the Minnesota 
        disability health options demonstration project, authorized 
        under section 256B.69, subdivision 23, will not be impeded; 
           (8) ensure that all recipients that are enrolled in the 
        prepaid medical assistance or general assistance medical care 
        program will be transferred to county-based purchasing without 
        utilizing the department's fee-for-service claims payment 
        system; 
           (9) ensure that all recipients who are required to 
        participate in county-based purchasing are given sufficient 
        information prior to enrollment in order to make informed 
        decisions; and 
           (10) ensure that the state and the medical assistance and 
        general assistance medical care recipients will be held harmless 
        for the payment of obligations incurred by the county if the 
        county, or a health plan providing services on behalf of the 
        county, or a provider participating in county-based purchasing 
        becomes insolvent, and the state has made the payments due to 
        the county under this section. 
           Sec. 26.  Minnesota Statutes 2000, section 256F.10, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PAYMENTS.] Notwithstanding section 256.025, 
        subdivision 2, Payments to certified providers for child welfare 
        targeted case management expenditures under section 256B.094 and 
        this section shall only be made of federal earnings from 
        services provided under section 256B.094 and this section.  
        Payments to contracted vendors shall include both the federal 
        earnings and the nonfederal share. 
           Sec. 27.  Minnesota Statutes 2000, section 256F.13, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FEDERAL REVENUE ENHANCEMENT.] (a) [DUTIES 
        OF THE COMMISSIONER OF HUMAN SERVICES.] The commissioner of 
        human services may enter into an agreement with one or more 
        family services collaboratives to enhance federal reimbursement 
        under Title IV-E of the Social Security Act and federal 
        administrative reimbursement under Title XIX of the Social 
        Security Act.  The commissioner may contract with the department 
        of children, families, and learning for purposes of transferring 
        the federal reimbursement to the commissioner of children, 
        families, and learning to be distributed to the collaboratives 
        according to clause (2).  The commissioner shall have the 
        following authority and responsibilities regarding family 
        services collaboratives: 
           (1) the commissioner shall submit amendments to state plans 
        and seek waivers as necessary to implement the provisions of 
        this section; 
           (2) the commissioner shall pay the federal reimbursement 
        earned under this subdivision to each collaborative based on 
        their earnings.  Notwithstanding section 256.025, subdivision 2, 
        Payments to collaboratives for expenditures under this 
        subdivision will only be made of federal earnings from services 
        provided by the collaborative; 
           (3) the commissioner shall review expenditures of family 
        services collaboratives using reports specified in the agreement 
        with the collaborative to ensure that the base level of 
        expenditures is continued and new federal reimbursement is used 
        to expand education, social, health, or health-related services 
        to young children and their families; 
           (4) the commissioner may reduce, suspend, or eliminate a 
        family services collaborative's obligations to continue the base 
        level of expenditures or expansion of services if the 
        commissioner determines that one or more of the following 
        conditions apply: 
           (i) imposition of levy limits that significantly reduce 
        available funds for social, health, or health-related services 
        to families and children; 
           (ii) reduction in the net tax capacity of the taxable 
        property eligible to be taxed by the lead county or 
        subcontractor that significantly reduces available funds for 
        education, social, health, or health-related services to 
        families and children; 
           (iii) reduction in the number of children under age 19 in 
        the county, collaborative service delivery area, subcontractor's 
        district, or catchment area when compared to the number in the 
        base year using the most recent data provided by the state 
        demographer's office; or 
           (iv) termination of the federal revenue earned under the 
        family services collaborative agreement; 
           (5) the commissioner shall not use the federal 
        reimbursement earned under this subdivision in determining the 
        allocation or distribution of other funds to counties or 
        collaboratives; 
           (6) the commissioner may suspend, reduce, or terminate the 
        federal reimbursement to a provider that does not meet the 
        reporting or other requirements of this subdivision; 
           (7) the commissioner shall recover from the family services 
        collaborative any federal fiscal disallowances or sanctions for 
        audit exceptions directly attributable to the family services 
        collaborative's actions in the integrated fund, or the 
        proportional share if federal fiscal disallowances or sanctions 
        are based on a statewide random sample; and 
           (8) the commissioner shall establish criteria for the 
        family services collaborative for the accounting and financial 
        management system that will support claims for federal 
        reimbursement. 
           (b)  [FAMILY SERVICES COLLABORATIVE RESPONSIBILITIES.] The 
        family services collaborative shall have the following authority 
        and responsibilities regarding federal revenue enhancement: 
           (1) the family services collaborative shall be the party 
        with which the commissioner contracts.  A lead county shall be 
        designated as the fiscal agency for reporting, claiming, and 
        receiving payments; 
           (2) the family services collaboratives may enter into 
        subcontracts with other counties, school districts, special 
        education cooperatives, municipalities, and other public and 
        nonprofit entities for purposes of identifying and claiming 
        eligible expenditures to enhance federal reimbursement, or to 
        expand education, social, health, or health-related services to 
        families and children; 
           (3) the family services collaborative must continue the 
        base level of expenditures for education, social, health, or 
        health-related services to families and children from any state, 
        county, federal, or other public or private funding source 
        which, in the absence of the new federal reimbursement earned 
        under this subdivision, would have been available for those 
        services, except as provided in subdivision 1, paragraph (a), 
        clause (4).  The base year for purposes of this subdivision 
        shall be the four-quarter calendar year ending at least two 
        calendar quarters before the first calendar quarter in which the 
        new federal reimbursement is earned; 
           (4) the family services collaborative must use all new 
        federal reimbursement resulting from federal revenue enhancement 
        to expand expenditures for education, social, health, or 
        health-related services to families and children beyond the base 
        level, except as provided in subdivision 1, paragraph (a), 
        clause (4); 
           (5) the family services collaborative must ensure that 
        expenditures submitted for federal reimbursement are not made 
        from federal funds or funds used to match other federal funds.  
        Notwithstanding section 256B.19, subdivision 1, for the purposes 
        of family services collaborative expenditures under agreement 
        with the department, the nonfederal share of costs shall be 
        provided by the family services collaborative from sources other 
        than federal funds or funds used to match other federal funds; 
           (6) the family services collaborative must develop and 
        maintain an accounting and financial management system adequate 
        to support all claims for federal reimbursement, including a 
        clear audit trail and any provisions specified in the agreement; 
        and 
           (7) the family services collaborative shall submit an 
        annual report to the commissioner as specified in the agreement. 
           Sec. 28.  Minnesota Statutes 2000, section 256L.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EFFECTIVE DATE OF COVERAGE.] (a) The effective 
        date of coverage is the first day of the month following the 
        month in which eligibility is approved and the first premium 
        payment has been received.  As provided in section 256B.057, 
        coverage for newborns is automatic from the date of birth and 
        must be coordinated with other health coverage.  The effective 
        date of coverage for eligible newly adoptive children added to a 
        family receiving covered health services is the date of entry 
        into the family.  The effective date of coverage for other new 
        recipients added to the family receiving covered health services 
        is the first day of the month following the month in which 
        eligibility is approved or at renewal, whichever the family 
        receiving covered health services prefers.  All eligibility 
        criteria must be met by the family at the time the new family 
        member is added.  The income of the new family member is 
        included with the family's gross income and the adjusted premium 
        begins in the month the new family member is added.  
           (b) The initial premium must be received eight by the last 
        working days prior to the end day of the month for coverage to 
        begin the first day of the following month.  
           (c) Benefits are not available until the day following 
        discharge if an enrollee is hospitalized on the first day of 
        coverage.  
           (d) Notwithstanding any other law to the contrary, benefits 
        under sections 256L.01 to 256L.18 are secondary to a plan of 
        insurance or benefit program under which an eligible person may 
        have coverage and the commissioner shall use cost avoidance 
        techniques to ensure coordination of any other health coverage 
        for eligible persons.  The commissioner shall identify eligible 
        persons who may have coverage or benefits under other plans of 
        insurance or who become eligible for medical assistance. 
           Sec. 29.  Minnesota Statutes 2001 Supplement, section 
        256L.06, subdivision 3, is amended to read: 
           Subd. 3.  [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) 
        Premiums are dedicated to the commissioner for MinnesotaCare. 
           (b) 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.  Failure to pay includes 
        payment with a dishonored check, a returned automatic bank 
        withdrawal, or a refused credit card or debit card payment.  The 
        commissioner may demand a guaranteed form of payment, including 
        a cashier's check or a money order, as the only means to replace 
        a dishonored, returned, or refused payment. 
           (c) 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.  The commissioner shall inform 
        applicants and enrollees of these premium payment options. 
        Premium payment is required before enrollment is complete and to 
        maintain eligibility in MinnesotaCare.  Premium payments 
        received before noon are credited the same day.  Premium 
        payments received after noon are credited on the next working 
        day.  
           (d) Nonpayment of the premium will result in disenrollment 
        from the plan effective for the calendar month for which the 
        premium was due.  Persons disenrolled for nonpayment or who 
        voluntarily terminate coverage from the program may not reenroll 
        until four calendar months have elapsed.  Persons disenrolled 
        for nonpayment who pay all past due premiums as well as current 
        premiums due, including premiums due for the period of 
        disenrollment, within 20 days of disenrollment, shall be 
        reenrolled retroactively to the first day of disenrollment.  
        Persons disenrolled for nonpayment or who voluntarily terminate 
        coverage from the program 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. 30.  Minnesota Statutes 2000, section 256L.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OTHER HEALTH COVERAGE.] (a) Families and 
        individuals enrolled in the MinnesotaCare program must have no 
        health coverage while enrolled or for at least four months prior 
        to application and renewal.  Children enrolled in the original 
        children's health plan and children in families with income 
        equal to or less than 150 percent of the federal poverty 
        guidelines, who have other health insurance, are eligible if the 
        coverage: 
           (1) lacks two or more of the following: 
           (i) basic hospital insurance; 
           (ii) medical-surgical insurance; 
           (iii) prescription drug coverage; 
           (iv) dental coverage; or 
           (v) vision coverage; 
           (2) requires a deductible of $100 or more per person per 
        year; or 
           (3) lacks coverage because the child has exceeded the 
        maximum coverage for a particular diagnosis or the policy 
        excludes a particular diagnosis. 
           The commissioner may change this eligibility criterion for 
        sliding scale premiums in order to remain within the limits of 
        available appropriations.  The requirement of no health coverage 
        does not apply to newborns. 
           (b) Medical assistance, general assistance medical care, 
        and the Civilian Health and Medical Program of the Uniformed 
        Service, CHAMPUS, or other coverage provided under United States 
        Code, title 10, subtitle A, part II, chapter 55, are not 
        considered insurance or health coverage for purposes of the 
        four-month requirement described in this subdivision. 
           (c) For purposes of this subdivision, Medicare Part A or B 
        coverage under title XVIII of the Social Security Act, United 
        States Code, title 42, sections 1395c to 1395w-4, is considered 
        health coverage.  An applicant or enrollee may not refuse 
        Medicare coverage to establish eligibility for MinnesotaCare. 
           (d) Applicants who were recipients of medical assistance or 
        general assistance medical care within one month of application 
        must meet the provisions of this subdivision and subdivision 2. 
           Sec. 31.  Laws 2001, First Special Session chapter 9, 
        article 2, section 76, is amended to read: 
           Sec. 76.  [REPEALER.] 
           (a) Minnesota Statutes 2000, section 256B.0635, subdivision 
        3, and 256B.19, subdivision 1b, are is repealed effective July 
        1, 2001. 
           (b) Minnesota Statutes 2000, section 256L.02, subdivision 
        4, is repealed effective January 1, 2003. 
           Sec. 32.  [REVISOR INSTRUCTION.] 
           In the next edition of Minnesota Statutes and Minnesota 
        Rules, the revisor shall replace the terms "Health Care 
        Financing Administration" and "federal Department of Health, 
        Education and Welfare" with "Centers for Medicare and Medicaid 
        Services" wherever it refers to the federal agency that provides 
        funding for the medical assistance program. 
           Sec. 33.  [REPEALER WITHOUT EFFECT.] 
           The repeal of Minnesota Statutes 2000, section 256B.0635, 
        subdivision 3, by Laws 2001, First Special Session chapter 9, 
        article 2, section 76, with an effective date of July 1, 2001, 
        is without effect and section 256B.0635, subdivision 3, remains 
        in effect after June 30, 2001. 
           Sec. 34.  [REPEALER.] 
           (a) Minnesota Statutes 2000, section 256B.0635, subdivision 
        3, is repealed effective July 1, 2002. 
           (b) Minnesota Statutes 2000, sections 256.025; 256B.19, 
        subdivision 1a; and 256B.77, subdivision 24, are repealed. 
           Presented to the governor March 22, 2002 
           Signed by the governor March 25, 2002, 2:17 p.m.