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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 198-S.F.No. 2080 
                  An act relating to health; modifying requirements for 
                  outpatient surgical centers; requiring reporting 
                  requirements of diagnostic imaging facilities; 
                  modifying procedures for the Board of Medical 
                  Practice; appropriating money; amending Minnesota 
                  Statutes 2002, sections 144.55, subdivisions 1, 2, 3, 
                  5, 6, 7, by adding subdivisions; 144.651, subdivision 
                  2; 144.653, subdivision 4; 144.698, subdivisions 1, 5; 
                  147.091, subdivision 1; 256B.02, subdivision 7; 
                  Minnesota Statutes 2003 Supplement, sections 144.7063, 
                  subdivision 3; 256L.035; proposing coding for new law 
                  in Minnesota Statutes, chapter 144. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, section 144.55, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ISSUANCE.] The state commissioner of 
        health is hereby authorized to issue licenses to operate 
        hospitals, sanitariums, outpatient surgical centers, or other 
        institutions for the hospitalization or care of human beings, 
        which are found to comply with the provisions of sections 144.50 
        to 144.56 and any reasonable rules promulgated by the 
        commissioner.  The commissioner shall not require an outpatient 
        surgical center licensed as part of a hospital to obtain a 
        separate outpatient surgical center license.  All decisions of 
        the commissioner thereunder may be reviewed in the district 
        court in the county in which the institution is located or 
        contemplated. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 2.  Minnesota Statutes 2002, section 144.55, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [LICENSE FEE.] The annual license fee for 
        outpatient surgical centers is $1,512. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 3.  Minnesota Statutes 2002, section 144.55, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [STANDARDS FOR NURSING CARE.] As a condition of 
        licensure, outpatient surgical centers must provide nursing care 
        consistent with nationally accepted nursing clinical standards 
        for perioperative nursing, including, but not limited to 
        Association of Operating Room Nurses and American Nurses 
        Association standards, which are generally accepted in the 
        professional nursing community.  
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 4.  Minnesota Statutes 2002, section 144.55, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITION DEFINITIONS.] For the purposes of 
        this section, the following terms have the meanings given: 
           (a) "Outpatient surgical center" or "center" means a 
        freestanding facility organized for the specific purpose of 
        providing elective outpatient surgery for preexamined, 
        prediagnosed, low-risk patients.  Admissions are limited to 
        procedures that utilize general anesthesia or conscious sedation 
        and that do not require overnight inpatient care.  An outpatient 
        surgical center is not organized to provide regular emergency 
        medical services and does not include a physician's or dentist's 
        office or clinic for the practice of medicine, the practice of 
        dentistry, or the delivery of primary care. 
           (b) "Joint commission" means the Joint Commission on 
        Accreditation of Hospitals Health Care Organizations.  
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 5.  Minnesota Statutes 2002, section 144.55, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STANDARDS FOR LICENSURE.] (a) Notwithstanding 
        the provisions of section 144.56, for the purpose of hospital 
        licensure, the commissioner of health shall use as minimum 
        standards the hospital certification regulations promulgated 
        pursuant to Title XVIII of the Social Security Act, United 
        States Code, title 42, section 1395, et seq.  The commissioner 
        may use as minimum standards changes in the federal hospital 
        certification regulations promulgated after May 7, 1981, if the 
        commissioner finds that such changes are reasonably necessary to 
        protect public health and safety.  The commissioner shall also 
        promulgate in rules additional minimum standards for new 
        construction.  
           (b) Each hospital and outpatient surgical center shall 
        establish policies and procedures to prevent the transmission of 
        human immunodeficiency virus and hepatitis B virus to patients 
        and within the health care setting.  The policies and procedures 
        shall be developed in conformance with the most recent 
        recommendations issued by the United States Department of Health 
        and Human Services, Public Health Service, Centers for Disease 
        Control.  The commissioner of health shall evaluate a hospital's 
        compliance with the policies and procedures according to 
        subdivision 4. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 6.  Minnesota Statutes 2002, section 144.55, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COORDINATION OF INSPECTIONS.] Prior to 
        conducting routine inspections of hospitals and outpatient 
        surgical centers, a state agency shall notify the commissioner 
        of its intention to inspect.  The commissioner shall then 
        determine whether the inspection is necessary in light of any 
        previous inspections conducted by the commissioner, any other 
        state agency, or the joint commission.  The commissioner shall 
        notify the agency of the determination and may authorize the 
        agency to conduct the inspection.  No state agency may routinely 
        inspect any hospital without the authorization of the 
        commissioner.  The commissioner shall coordinate, insofar as is 
        possible, routine inspections conducted by state agencies, so as 
        to minimize the number of inspections to which hospitals are 
        subject.  
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 7.  Minnesota Statutes 2002, section 144.55, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SUSPENSION, REVOCATION, AND REFUSAL TO RENEW.] 
        (a) The commissioner may refuse to grant or renew, or may 
        suspend or revoke, a license on any of the following grounds: 
           (1) Violation of any of the provisions of sections 144.50 
        to 144.56 or the rules or standards issued pursuant thereto, or 
        Minnesota Rules, chapters 4650 and 4675; 
           (2) Permitting, aiding, or abetting the commission of any 
        illegal act in the institution; 
           (3) Conduct or practices detrimental to the welfare of the 
        patient; or 
           (4) Obtaining or attempting to obtain a license by fraud or 
        misrepresentation; or 
           (5) With respect to hospitals and outpatient surgical 
        centers, if the commissioner determines that there is a pattern 
        of conduct that one or more physicians who have a "financial or 
        economic interest", as defined in section 144.6521, subdivision 
        3, in the hospital or outpatient surgical center, have not 
        provided the notice and disclosure of the financial or economic 
        interest required by section 144.6521. 
           (b) The commissioner shall not renew a license for a 
        boarding care bed in a resident room with more than four beds. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 8.  Minnesota Statutes 2002, section 144.55, 
        subdivision 7, is amended to read: 
           Subd. 7.  [HEARING.] Prior to any suspension, revocation or 
        refusal to renew a license, the licensee shall be entitled to 
        notice and a hearing as provided by sections 14.57 to 14.69.  At 
        each hearing, the commissioner shall have the burden of 
        establishing that a violation described in subdivision 6 has 
        occurred.  
           If a license is revoked, suspended, or not renewed, a new 
        application for license may be considered by the commissioner if 
        the conditions upon which revocation, suspension, or refusal to 
        renew was based have been corrected and evidence of this fact 
        has been satisfactorily furnished.  A new license may then be 
        granted after proper inspection has been made and all provisions 
        of sections 144.50 to 144.56 and any rules promulgated 
        thereunder, or Minnesota Rules, chapters 4650 and 4675, have 
        been complied with and recommendation has been made by the 
        inspector as an agent of the commissioner.  
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 9.  [144.565] [DIAGNOSTIC IMAGING FACILITIES.] 
           Subdivision 1.  [UTILIZATION AND SERVICES DATA; ECONOMIC 
        AND FINANCIAL INTERESTS.] The commissioner shall require 
        diagnostic imaging facilities to annually report to the 
        commissioner, in the form and manner specified by the 
        commissioner: 
           (1) utilization data for each health plan company and each 
        public program, including workers' compensation, as follows: 
           (i) the number of computerized tomography (CT) procedures 
        performed; 
           (ii) the number of magnetic resonance imaging (MRI) 
        procedures performed; and 
           (iii) the number of positron emission tomography (PET) 
        procedures performed; and 
           (2) the names of all individuals with a financial or 
        economic interest in the facility. 
           Subd. 2.  [COMMISSIONER'S RIGHT TO INSPECT RECORDS.] If the 
        report is not filed or the commissioner of health has reason to 
        believe the report is incomplete or false, the commissioner 
        shall have the right to inspect diagnostic imaging facility 
        books, audits, and records. 
           Subd. 3.  [SEPARATE REPORTS.] For a diagnostic imaging 
        facility that is not attached or not contiguous to a hospital or 
        a hospital affiliate, the commissioner shall require the 
        information in subdivision 1 be reported separately for each 
        detached diagnostic imaging facility as part of the report 
        required under section 144.702.  If any entity owns more than 
        one diagnostic imaging facility, that entity must report by 
        individual facility.  
           Subd. 4.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given: 
           (a) "Diagnostic imaging facility" means a health care 
        facility that provides diagnostic imaging services through the 
        use of ionizing radiation or other imaging technique including, 
        but not limited to magnetic resonance imaging (MRI) or 
        computerized tomography (CT) scan on a freestanding or mobile 
        basis. 
           (b) "Financial or economic interest" means a direct or 
        indirect: 
           (1) equity or debt security issued by an entity, including, 
        but not limited to, shares of stock in a corporation, membership 
        in a limited liability company, beneficial interest in a trust, 
        units or other interests in a partnership, bonds, debentures, 
        notes or other equity interests or debt instruments, or any 
        contractual arrangements; 
           (2) membership, proprietary interest, or co-ownership with 
        an individual, group, or organization to which patients, 
        clients, or customers are referred to; or 
           (3) employer-employee or independent contractor 
        relationship, including, but not limited to, those that may 
        occur in a limited partnership, profit-sharing arrangement, or 
        other similar arrangement with any facility to which patients 
        are referred, including any compensation between a facility and 
        a health care provider, the group practice of which the provider 
        is a member or employee or a related party with respect to any 
        of them. 
           (c) "Freestanding"  means a diagnostic imaging facility 
        that is not located within a: 
           (1) hospital; 
           (2) location licensed as a hospital; or 
           (3) physician's office or clinic where the professional 
        practice of medicine by licensed physicians is the primary 
        purpose and not the provision of ancillary services such as 
        diagnostic imaging. 
           (d) "Mobile" means a diagnostic imaging facility that is 
        transported to various sites not including movement within a 
        hospital or a physician's office or clinic. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 10.  Minnesota Statutes 2002, section 144.651, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
        "patient" means a person who is admitted to an acute care 
        inpatient facility for a continuous period longer than 24 hours, 
        for the purpose of diagnosis or treatment bearing on the 
        physical or mental health of that person.  For purposes of 
        subdivisions 4 to 9, 12, 13, 15, 16, and 18 to 20, "patient" 
        also means a person who receives health care services at an 
        outpatient surgical center.  "Patient" also means a minor who is 
        admitted to a residential program as defined in section 
        253C.01.  For purposes of subdivisions 1, 3 to 16, 18, 20 and 
        30, "patient" also means any person who is receiving mental 
        health treatment on an outpatient basis or in a community 
        support program or other community-based program.  "Resident" 
        means a person who is admitted to a nonacute care facility 
        including extended care facilities, nursing homes, and boarding 
        care homes for care required because of prolonged mental or 
        physical illness or disability, recovery from injury or disease, 
        or advancing age.  For purposes of all subdivisions except 
        subdivisions 28 and 29, "resident" also means a person who is 
        admitted to a facility licensed as a board and lodging facility 
        under Minnesota Rules, parts 4625.0100 to 4625.2355, or a 
        supervised living facility under Minnesota Rules, parts 
        4665.0100 to 4665.9900, and which operates a rehabilitation 
        program licensed under Minnesota Rules, parts 9530.4100 to 
        9530.4450. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 11.  [144.6521] [DISCLOSURE OF FINANCIAL INTEREST.] 
           Subdivision 1.  [DISCLOSURE.] No health care provider with 
        a financial or economic interest in, or an employment or 
        contractual arrangement that limits referral options with, a 
        hospital, outpatient surgical center or diagnostic imaging 
        facility, or an affiliate of one of these entities, shall refer 
        a patient to that hospital, center, or facility, or an affiliate 
        of one of these entities, unless the health care provider 
        discloses in writing to the patient, in advance of the referral, 
        the existence of such an interest, employment, or arrangement.  
           The written disclosure form must be printed in letters of 
        at least 12-point boldface type and must read as follows:  "Your 
        health care provider is referring you to a facility or service 
        in which your health care provider has a financial or economic 
        interest."  
           Hospitals, outpatient surgical centers, and diagnostic 
        imaging facilities shall promptly report to the commissioner of 
        health any suspected violations of this section by a health care 
        provider who has made a referral to such hospital, outpatient 
        surgical center, or diagnostic imaging facility without 
        providing the written notice. 
           Subd. 2.  [POSTING OF NOTICE.] In addition to the 
        requirement in subdivision 1, each health care provider who 
        makes referrals to a hospital, outpatient surgical center or 
        diagnostic imaging facility, or an affiliate of one of these 
        entities in which the health care provider has a financial or 
        economic interest, or has an employment or contractual 
        arrangement with one of these entities that limits referral 
        options, shall post a notice of this interest, employment, or 
        arrangement in a patient reception area or waiting room or other 
        conspicuous public location within the provider's facility. 
           Subd. 3.  [DEFINITION.] (a) For purposes of this section, 
        the following definitions apply. 
           (b) "Affiliate" means an entity that controls, is 
        controlled by, or is under common control with another entity. 
           (c) "Diagnostic imaging facility" has the meaning provided 
        in section 144.565, subdivision 4. 
           (d) "Employment or contractual arrangement that limits 
        referral options" means a requirement of, or a financial 
        incentive, provided to a health care provider to refer a patient 
        to a specific hospital, outpatient surgical center or diagnostic 
        imaging facility, or an affiliate of one of these entities even 
        if other options exist for the patient.  
           (e) "Freestanding" has the meaning provided in section 
        144.565, subdivision 4.  
           (f) "Financial or economic interest" means a direct or 
        indirect: 
           (1) equity or debt security issued by an entity, including, 
        but not limited to, shares of stock in a corporation, membership 
        in a limited liability company, beneficial interest in a trust, 
        units or other interests in a partnership, bonds, debentures, 
        notes or other equity interests or debt instruments, or any 
        contractual arrangements; 
           (2) membership, proprietary interest, or co-ownership with 
        an individual, group, or organization to which patients, 
        clients, or customers are referred to; or 
           (3) employer-employee or independent contractor 
        relationship, including, but not limited to, those that may 
        occur in a limited partnership, profit-sharing arrangement, or 
        other similar arrangement with any facility to which patients 
        are referred, including any compensation between a facility and 
        a health care provider, the group practice of which the provider 
        is a member or employee or a related party with respect to any 
        of them. 
           (g) "Health care provider" means an individual licensed by 
        a health licensing board as defined in section 214.01, 
        subdivision 2, who has the authority, within the individual's 
        scope of practice, to make referrals to a hospital, outpatient 
        surgical center, or diagnostic imaging facility. 
           (h) "Mobile" has the meaning provided in section 144.565, 
        subdivision 4.  
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 12.  Minnesota Statutes 2002, section 144.653, 
        subdivision 4, is amended to read: 
           Subd. 4.  [WITHOUT NOTICE.] One or more unannounced 
        inspections of each facility required to be licensed under the 
        provisions of sections 144.50 to 144.58 or Minnesota Rules, 
        chapter 4675, shall be made annually. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 13.  Minnesota Statutes 2002, section 144.698, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [YEARLY REPORTS.] Each hospital and each 
        outpatient surgical center, which has not filed the financial 
        information required by this section with a voluntary, nonprofit 
        reporting organization pursuant to section 144.702, shall file 
        annually with the commissioner of health after the close of the 
        fiscal year: 
           (1) a balance sheet detailing the assets, liabilities, and 
        net worth of the hospital or outpatient surgical center; 
           (2) a detailed statement of income and expenses; 
           (3) a copy of its most recent cost report, if any, filed 
        pursuant to requirements of Title XVIII of the United States 
        Social Security Act; 
           (4) a copy of all changes to articles of incorporation or 
        bylaws; 
           (5) information on services provided to benefit the 
        community, including services provided at no cost or for a 
        reduced fee to patients unable to pay, teaching and research 
        activities, or other community or charitable activities; 
           (6) information required on the revenue and expense report 
        form set in effect on July 1, 1989, or as amended by the 
        commissioner in rule; and 
           (7) information on changes in ownership or control; and 
           (8) other information required by the commissioner in rule. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 14.  Minnesota Statutes 2002, section 144.698, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMMISSIONER'S RIGHT TO INSPECT RECORDS.] If the 
        report is not filed or the commissioner of health has reason to 
        believe the report is incomplete or false, the commissioner 
        shall have the right to inspect hospital and outpatient surgical 
        center books, audits, and records as reasonably necessary to 
        verify hospital and outpatient surgical center reports. 
           Sec. 15.  Minnesota Statutes 2003 Supplement, section 
        144.7063, subdivision 3, is amended to read: 
           Subd. 3.  [FACILITY.] "Facility" means a hospital or 
        outpatient surgical center licensed under sections 144.50 to 
        144.58. 
           [EFFECTIVE DATE.] This section is effective on the date of 
        full implementation of the adverse health care events reporting 
        system as provided in Laws 2003, chapter 99, section 7, provided 
        the commissioner has secured sufficient funds from nonstate 
        sources to operate the adverse health care events reporting 
        system in fiscal year 2005. 
           Sec. 16.  Minnesota Statutes 2002, section 147.091, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GROUNDS LISTED.] The board may refuse to 
        grant a license, may refuse to grant registration to perform 
        interstate telemedicine services, or may impose disciplinary 
        action as described in section 147.141 against any physician.  
        The following conduct is prohibited and is grounds for 
        disciplinary action: 
           (a) Failure to demonstrate the qualifications or satisfy 
        the requirements for a license contained in this chapter or 
        rules of the board.  The burden of proof shall be upon the 
        applicant to demonstrate such qualifications or satisfaction of 
        such requirements. 
           (b) Obtaining a license by fraud or cheating, or attempting 
        to subvert the licensing examination process.  Conduct which 
        subverts or attempts to subvert the licensing examination 
        process includes, but is not limited to:  (1) conduct which 
        violates the security of the examination materials, such as 
        removing examination materials from the examination room or 
        having unauthorized possession of any portion of a future, 
        current, or previously administered licensing examination; (2) 
        conduct which violates the standard of test administration, such 
        as communicating with another examinee during administration of 
        the examination, copying another examinee's answers, permitting 
        another examinee to copy one's answers, or possessing 
        unauthorized materials; or (3) impersonating an examinee or 
        permitting an impersonator to take the examination on one's own 
        behalf. 
           (c) Conviction, during the previous five years, of a felony 
        reasonably related to the practice of medicine or osteopathy.  
        Conviction as used in this subdivision shall include a 
        conviction of an offense which if committed in this state would 
        be deemed a felony without regard to its designation elsewhere, 
        or a criminal proceeding where a finding or verdict of guilt is 
        made or returned but the adjudication of guilt is either 
        withheld or not entered thereon.  
           (d) Revocation, suspension, restriction, limitation, or 
        other disciplinary action against the person's medical license 
        in another state or jurisdiction, failure to report to the board 
        that charges regarding the person's license have been brought in 
        another state or jurisdiction, or having been refused a license 
        by any other state or jurisdiction.  
           (e) Advertising which is false or misleading, which 
        violates any rule of the board, or which claims without 
        substantiation the positive cure of any disease, or professional 
        superiority to or greater skill than that possessed by another 
        physician. 
           (f) Violating a rule promulgated by the board or an order 
        of the board, a state, or federal law which relates to the 
        practice of medicine, or in part regulates the practice of 
        medicine including without limitation sections 148A.02, 609.344, 
        and 609.345, or a state or federal narcotics or controlled 
        substance law. 
           (g) Engaging in any unethical conduct; conduct likely to 
        deceive, defraud, or harm the public, or demonstrating a willful 
        or careless disregard for the health, welfare or safety of a 
        patient; or medical practice which is professionally 
        incompetent, in that it may create unnecessary danger to any 
        patient's life, health, or safety, in any of which cases, proof 
        of actual injury need not be established. 
           (h) Failure to supervise a physician's assistant or failure 
        to supervise a physician under any agreement with the board. 
           (i) Aiding or abetting an unlicensed person in the practice 
        of medicine, except that it is not a violation of this paragraph 
        for a physician to employ, supervise, or delegate functions to a 
        qualified person who may or may not be required to obtain a 
        license or registration to provide health services if that 
        person is practicing within the scope of that person's license 
        or registration or delegated authority. 
           (j) Adjudication as mentally incompetent, mentally ill or 
        mentally retarded, or as a chemically dependent person, a person 
        dangerous to the public, a sexually dangerous person, or a 
        person who has a sexual psychopathic personality by a court of 
        competent jurisdiction, within or without this state.  Such 
        adjudication shall automatically suspend a license for the 
        duration thereof unless the board orders otherwise. 
           (k) Engaging in unprofessional conduct.  Unprofessional 
        conduct shall include any departure from or the failure to 
        conform to the minimal standards of acceptable and prevailing 
        medical practice in which proceeding actual injury to a patient 
        need not be established. 
           (l) Inability to practice medicine with reasonable skill 
        and safety to patients by reason of illness, drunkenness, use of 
        drugs, narcotics, chemicals or any other type of material or as 
        a result of any mental or physical condition, including 
        deterioration through the aging process or loss of motor skills. 
           (m) Revealing a privileged communication from or relating 
        to a patient except when otherwise required or permitted by law. 
           (n) Failure by a doctor of osteopathy to identify the 
        school of healing in the professional use of the doctor's name 
        by one of the following terms:  osteopathic physician and 
        surgeon, doctor of osteopathy, or D.O. 
           (o) Improper management of medical records, including 
        failure to maintain adequate medical records, to comply with a 
        patient's request made pursuant to section 144.335 or to furnish 
        a medical record or report required by law.  
           (p) Fee splitting, including without limitation: 
           (1) paying, offering to pay, receiving, or agreeing to 
        receive, a commission, rebate, or remuneration, directly or 
        indirectly, primarily for the referral of patients or the 
        prescription of drugs or devices; 
           (2) dividing fees with another physician or a professional 
        corporation, unless the division is in proportion to the 
        services provided and the responsibility assumed by each 
        professional and the physician has disclosed the terms of the 
        division; 
           (3) referring a patient to any health care provider as 
        defined in section 144.335 in which the referring physician has 
        a significant "financial or economic interest", as defined in 
        section 144.6521, subdivision 3, unless the physician has 
        disclosed the physician's own financial interest financial or 
        economic interest in accordance with section 144.6521; and 
           (4) dispensing for profit any drug or device, unless the 
        physician has disclosed the physician's own profit interest. 
        The physician must make the disclosures required in this clause 
        in advance and in writing to the patient and must include in the 
        disclosure a statement that the patient is free to choose a 
        different health care provider.  This clause does not apply to 
        the distribution of revenues from a partnership, group practice, 
        nonprofit corporation, or professional corporation to its 
        partners, shareholders, members, or employees if the revenues 
        consist only of fees for services performed by the physician or 
        under a physician's direct supervision, or to the division or 
        distribution of prepaid or capitated health care premiums, or 
        fee-for-service withhold amounts paid under contracts 
        established under other state law.  
           (q) Engaging in abusive or fraudulent billing practices, 
        including violations of the federal Medicare and Medicaid laws 
        or state medical assistance laws.  
           (r) Becoming addicted or habituated to a drug or intoxicant.
           (s) Prescribing a drug or device for other than medically 
        accepted therapeutic or experimental or investigative purposes 
        authorized by a state or federal agency or referring a patient 
        to any health care provider as defined in section 144.335 for 
        services or tests not medically indicated at the time of 
        referral.  
           (t) Engaging in conduct with a patient which is sexual or 
        may reasonably be interpreted by the patient as sexual, or in 
        any verbal behavior which is seductive or sexually demeaning to 
        a patient.  
           (u) Failure to make reports as required by section 147.111 
        or to cooperate with an investigation of the board as required 
        by section 147.131. 
           (v) Knowingly providing false or misleading information 
        that is directly related to the care of that patient unless done 
        for an accepted therapeutic purpose such as the administration 
        of a placebo. 
           (w) Aiding suicide or aiding attempted suicide in violation 
        of section 609.215 as established by any of the following: 
           (1) a copy of the record of criminal conviction or plea of 
        guilty for a felony in violation of section 609.215, subdivision 
        1 or 2; 
           (2) a copy of the record of a judgment of contempt of court 
        for violating an injunction issued under section 609.215, 
        subdivision 4; 
           (3) a copy of the record of a judgment assessing damages 
        under section 609.215, subdivision 5; or 
           (4) a finding by the board that the person violated section 
        609.215, subdivision 1 or 2.  The board shall investigate any 
        complaint of a violation of section 609.215, subdivision 1 or 2. 
           (x) Practice of a board-regulated profession under lapsed 
        or nonrenewed credentials. 
           (y) Failure to repay a state or federally secured student 
        loan in accordance with the provisions of the loan. 
           (z) Providing interstate telemedicine services other than 
        according to section 147.032. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 17.  Minnesota Statutes 2002, section 256B.02, 
        subdivision 7, is amended to read: 
           Subd. 7.  [VENDOR OF MEDICAL CARE.] (a) "Vendor of medical 
        care" means any person or persons furnishing, within the scope 
        of the vendor's respective license, any or all of the following 
        goods or services:  medical, surgical, hospital, ambulatory 
        surgical center services, optical, visual, dental and nursing 
        services; drugs and medical supplies; appliances; laboratory, 
        diagnostic, and therapeutic services; nursing home and 
        convalescent care; screening and health assessment services 
        provided by public health nurses as defined in section 145A.02, 
        subdivision 18; health care services provided at the residence 
        of the patient if the services are performed by a public health 
        nurse and the nurse indicates in a statement submitted under 
        oath that the services were actually provided; and such other 
        medical services or supplies provided or prescribed by persons 
        authorized by state law to give such services and supplies.  The 
        term includes, but is not limited to, directors and officers of 
        corporations or members of partnerships who, either individually 
        or jointly with another or others, have the legal control, 
        supervision, or responsibility of submitting claims for 
        reimbursement to the medical assistance program.  The term only 
        includes directors and officers of corporations who personally 
        receive a portion of the distributed assets upon liquidation or 
        dissolution, and their liability is limited to the portion of 
        the claim that bears the same proportion to the total claim as 
        their share of the distributed assets bears to the total 
        distributed assets.  
           (b) "Vendor of medical care" also includes any person who 
        is credentialed as a health professional under standards set by 
        the governing body of a federally recognized Indian tribe 
        authorized under an agreement with the federal government 
        according to United States Code, title 25, section 450f, to 
        provide health services to its members, and who through a tribal 
        facility provides covered services to American Indian people 
        within a contract health service delivery area of a Minnesota 
        reservation, as defined under Code of Federal Regulations, title 
        42, section 36.22. 
           (c) A federally recognized Indian tribe that intends to 
        implement standards for credentialing health professionals must 
        submit the standards to the commissioner of human services, 
        along with evidence of meeting, exceeding, or being exempt from 
        corresponding state standards.  The commissioner shall maintain 
        a copy of the standards and supporting evidence, and shall use 
        those standards to enroll tribal-approved health professionals 
        as medical assistance providers.  For purposes of this section, 
        "Indian" and "Indian tribe" mean persons or entities that meet 
        the definition in United States Code, title 25, section 450b. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004. 
           Sec. 18.  Minnesota Statutes 2003 Supplement, section 
        256L.035, is amended to read: 
           256L.035 [LIMITED BENEFITS COVERAGE FOR CERTAIN SINGLE 
        ADULTS AND HOUSEHOLDS WITHOUT CHILDREN.] 
           (a) "Covered health services" for individuals under section 
        256L.04, subdivision 7, with income above 75 percent, but not 
        exceeding 175 percent, of the federal poverty guideline means: 
           (1) inpatient hospitalization benefits with a ten percent 
        co-payment up to $1,000 and subject to an annual limitation of 
        $10,000; 
           (2) physician services provided during an inpatient stay; 
        and 
           (3) physician services not provided during an inpatient 
        stay, outpatient hospital services, freestanding ambulatory 
        surgical center services, chiropractic services, lab and 
        diagnostic services, and prescription drugs, subject to an 
        aggregate cap of $2,000 per calendar year and the following 
        co-payments: 
           (i) $50 co-pay per emergency room visit; 
           (ii) $3 co-pay per prescription drug; and 
           (iii) $5 co-pay per nonpreventive physician visit. 
           For purposes of this subdivision, "a visit" means an 
        episode of service which is required because of a recipient's 
        symptoms, diagnosis, or established illness, and which is 
        delivered in an ambulatory setting by a physician or physician 
        ancillary. 
           Enrollees are responsible for all co-payments in this 
        subdivision. 
           (b) The November 2006 MinnesotaCare forecast for the 
        biennium beginning July 1, 2007, shall assume an adjustment in 
        the aggregate cap on the services identified in paragraph (a), 
        clause (3), in $1,000 increments up to a maximum of $10,000, but 
        not less than $2,000, to the extent that the balance in the 
        health care access fund is sufficient in each year of the 
        biennium to pay for this benefit level.  The aggregate cap shall 
        be adjusted according to the forecast. 
           (c) Reimbursement to the providers shall be reduced by the 
        amount of the co-payment, except that reimbursement for 
        prescription drugs shall not be reduced once a recipient has 
        reached the $20 per month maximum for prescription drug 
        co-payments.  The provider collects the co-payment from the 
        recipient.  Providers may not deny services to recipients who 
        are unable to pay the co-payment, except as provided in 
        paragraph (d). 
           (d) If it is the routine business practice of a provider to 
        refuse service to an individual with uncollected debt, the 
        provider may include uncollected co-payments under this 
        section.  A provider must give advance notice to a recipient 
        with uncollected debt before services can be denied. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 19.  [APPROPRIATIONS.] 
           (a) Any money received by the commissioner of health from 
        nonstate sources to operate the adverse health care events 
        reporting system in fiscal year 2005 is appropriated to the 
        commissioner of health for that purpose. 
           (b) The annual licensing fee collected under Minnesota 
        Statutes, section 144.55, subdivision 1a, is appropriated from 
        the state government special revenue fund to the commissioner of 
        health for the purposes of regulating outpatient surgical 
        centers. 
           Presented to the governor May 13, 2004 
           Signed by the governor May 15, 2004, 10:40 p.m.