1.1                          A bill for an act
  1.2             relating to insurance; requiring health plan companies 
  1.3             to disclose certain financial arrangements to 
  1.4             enrollees; proposing coding for new law in Minnesota 
  1.5             Statutes, chapter 62Q. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [62Q.63] [DISCLOSURE OF CERTAIN FINANCIAL 
  1.8   ARRANGEMENTS.] 
  1.9      Subdivision 1.  [GENERAL REQUIREMENT.] No health plan 
  1.10  company as defined in section 62Q.01, subdivision 4, shall 
  1.11  offer, sell, issue, or renew a health plan, as defined in 
  1.12  section 62Q.01, subdivision 3, to an enrollee or prospective 
  1.13  enrollee without providing to the enrollee or prospective 
  1.14  enrollee a disclosure statement that meets the requirements of 
  1.15  subdivision 2.  The disclosure statement must be provided at 
  1.16  least annually.  
  1.17     Subd. 2.  [CONTENTS AND FORM OF DISCLOSURE.] (a) The 
  1.18  disclosure statement required in subdivision 1 must disclose and 
  1.19  explain clearly to the enrollee or prospective enrollee any 
  1.20  financial arrangements between the health plan company and any 
  1.21  health care provider that in any way make it advantageous for 
  1.22  the health care provider to minimize or restrict the health care 
  1.23  provided to enrollees under the health plan.  Financial 
  1.24  arrangements to which this section applies include, but are not 
  1.25  limited to, capitation, withhold arrangements, utilization 
  2.1   standards used to evaluate health care providers, arrangements 
  2.2   in which health care providers are subject to terms of 
  2.3   compensation or contract renewal in a future time period that 
  2.4   penalize the health care providers for providing care to 
  2.5   enrollees in the current time period, and any other arrangement 
  2.6   that may have the potential to create a conflict between the 
  2.7   best interest of the enrollee and the best interest of the 
  2.8   health care provider.  Financial arrangements with health care 
  2.9   providers who are employed by the health plan company, or by an 
  2.10  affiliate, are subject to this section.  
  2.11     (b) The disclosure statement must comply with the 
  2.12  Readability of Insurance Policies Act in chapter 72C and be 
  2.13  approved by the commissioner prior to its use.  A disclosure 
  2.14  statement that has been filed with the commissioner for approval 
  2.15  is deemed approved 30 days after the date of filing unless 
  2.16  approved or disapproved by the commissioner on or before the end 
  2.17  of that 30-day period. 
  2.18     (c) For purposes of this section 
  2.19     (1) "capitation" means a financial arrangement in which a 
  2.20  health plan company compensates a health care provider, 
  2.21  partially or entirely, through a fixed payment per time period 
  2.22  per enrollee served by that health care provider, without regard 
  2.23  to the services actually provided to enrollees by that health 
  2.24  care provider.  The services covered by the capitation may 
  2.25  include the health care providers' own services, referral 
  2.26  services, or all health care services; 
  2.27     (2) "financial arrangement" means an agreement between a 
  2.28  health plan company, or an affiliate of it, and a health care 
  2.29  provider, or an affiliate of it, that determines, or provides a 
  2.30  methodology for determining, the payments to be made by the 
  2.31  health plan company to the health care provider for providing 
  2.32  health care to the health plan company's enrollees; and 
  2.33     (3) "affiliate" has the meaning given in section 60D.15, 
  2.34  subdivision 2; and 
  2.35     (4) "withhold" means a financial arrangement in which a 
  2.36  health plan company deducts amounts from its payments to a 
  3.1   health care provider, where the deducted amounts or a portion of 
  3.2   them may eventually be paid to the health care provider at the 
  3.3   end of a specified time period, based upon specific 
  3.4   predetermined factors. 
  3.5      Subd. 3.  [EXEMPTION.] A health plan company that does not 
  3.6   use any arrangement described in subdivision 2 in connection 
  3.7   with a health plan may apply to the commissioner for an 
  3.8   exemption from subdivision 1 with respect to that health plan.  
  3.9   If the commissioner grants the exemption, the health plan 
  3.10  company need not provide a disclosure statement with respect to 
  3.11  that health plan. 
  3.12     Subd. 4.  [GROUP HEALTH PLANS.] With respect to group 
  3.13  health plans, the health plan company must comply with 
  3.14  subdivision 1 by providing the disclosure statement to the group 
  3.15  policyholder or prospective group policyholder and by requiring 
  3.16  the group policyholder to provide the disclosure statement to 
  3.17  each enrollee or prospective enrollee prior to initial 
  3.18  enrollment, at each renewal of the group health plan, and at 
  3.19  each open enrollment period.  Any literature prepared by the 
  3.20  health plan company for distribution to prospective enrollees 
  3.21  must contain the disclosure statement or state that it is 
  3.22  available from the health plan company or from the group 
  3.23  policyholder upon request.  The health plan company shall retain 
  3.24  in its files, for purposes of compliance audits, proof that the 
  3.25  health plan company and group policyholder complied with this 
  3.26  subdivision. 
  3.27     Subd. 5.  [FAMILY COVERAGE.] With respect to family 
  3.28  coverage, the disclosure statement required under this section 
  3.29  must be provided to the enrollee to whom the policy, contract, 
  3.30  or certificate is issued or is to be issued and need not be 
  3.31  provided to enrollees or prospective enrollees who are that 
  3.32  person's dependents. 
  3.33     Sec. 2.  [EFFECTIVE DATE.] 
  3.34     Section 1 is effective January 1, 1998.