1.1                          A bill for an act 
  1.2             relating to health care; clarifying the physician 
  1.3             surcharge; clarifying the health maintenance 
  1.4             organization surcharge; modifying certain hospital and 
  1.5             nursing home payments; amending Minnesota Statutes 
  1.6             1994, sections 147.01, subdivision 6; 256.9657, 
  1.7             subdivision 3; 256.969, subdivision 9; 256B.19, 
  1.8             subdivisions 1c and 1d; and 256B.431, subdivision 23. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1994, section 147.01, 
  1.11  subdivision 6, is amended to read: 
  1.12     Subd. 6.  [LICENSE SURCHARGE.] In addition to any fee 
  1.13  established under section 214.06, the board shall assess an 
  1.14  annual license surcharge of $400 against each physician licensed 
  1.15  under this chapter residing in Minnesota and the states 
  1.16  contiguous to Minnesota.  The surcharge applies to a physician 
  1.17  who is licensed as of or after October 1, 1992, and whose 
  1.18  license is issued or renewed on or after April 1, 1992, and is 
  1.19  assessed as follows: 
  1.20     (1) a physician whose license is issued or renewed between 
  1.21  April 1 and September 30 shall be billed on or before November 
  1.22  15, and the physician must pay the surcharge by December 15; and 
  1.23     (2) a physician whose license is issued or renewed between 
  1.24  October 1 and March 31 shall be billed on or before May 15, and 
  1.25  the physician must pay the surcharge by June 15. 
  1.26     The board shall provide that the surcharge payment must be 
  1.27  remitted to the commissioner of human services to be deposited 
  2.1   in the general fund under section 256.9656.  The board shall not 
  2.2   renew the license of a physician who has not paid the surcharge 
  2.3   required under this section.  The board shall promptly provide 
  2.4   to the commissioner of human services upon request information 
  2.5   available to the board and specifically required by the 
  2.6   commissioner to operate the provider surcharge program.  ~~The~~ 
  2.7   ~~board shall limit the surcharge to physicians residing in~~ 
  2.8   ~~Minnesota and the states contiguous to Minnesota upon~~ 
  2.9   ~~notification from the commissioner of human services that the~~ 
  2.10  ~~federal government has approved a waiver to allow the surcharge~~ 
  2.11  ~~to be applied in that manner.~~ 
  2.12     Sec. 2.  Minnesota Statutes 1994, section 256.9657, 
  2.13  subdivision 3, is amended to read: 
  2.14     Subd. 3.  [HEALTH MAINTENANCE ORGANIZATION; INTEGRATED 
  2.15  SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 1992, each 
  2.16  health maintenance organization with a certificate of authority 
  2.17  issued by the commissioner of health under chapter 62D and each 
  2.18  integrated service network and community integrated service 
  2.19  network licensed by the commissioner under chapter 62N shall pay 
  2.20  to the commissioner of human services a surcharge equal to 
  2.21  six-tenths of one percent of the total premium revenues of the 
  2.22  health maintenance organization, integrated service network, or 
  2.23  community integrated service network as reported to the 
  2.24  commissioner of health according to the schedule in subdivision 
  2.25  4.  
  2.26     (b) For purposes of this subdivision, total premium revenue 
  2.27  means: 
  2.28     (1) premium revenue recognized on a prepaid basis from 
  2.29  individuals and groups for provision of a specified range of 
  2.30  health services over a defined period of time which is normally 
  2.31  one month, excluding premiums paid to a health maintenance 
  2.32  organization, integrated service network, or community 
  2.33  integrated service network from the Federal Employees Health 
  2.34  Benefit Program; 
  2.35     (2) premiums from Medicare wrap-around subscribers for 
  2.36  health benefits which supplement Medicare coverage; 
  3.1      (3) Medicare revenue, as a result of an arrangement between 
  3.2   a health maintenance organization, an integrated service 
  3.3   network, or a community integrated service network and the 
  3.4   health care financing administration of the federal Department 
  3.5   of Health and Human Services, for services to a Medicare 
  3.6   beneficiary; and 
  3.7      (4) medical assistance revenue, as a result of an 
  3.8   arrangement between a health maintenance organization, 
  3.9   integrated service network, or community integrated service 
  3.10  network and a Medicaid state agency, for services to a medical 
  3.11  assistance beneficiary. 
  3.12     If advance payments are made under clause (1) or (2) to the 
  3.13  health maintenance organization, integrated service network, or 
  3.14  community integrated service network for more than one reporting 
  3.15  period, the portion of the payment that has not yet been earned 
  3.16  must be treated as a liability. 
  3.17     (c) The surviving health maintenance organization, 
  3.18  integrated service network, or community integrated service 
  3.19  network, of a merger that occurs on or after July 1, 1995, of 
  3.20  two or more health maintenance organizations, integrated service 
  3.21  networks, or community integrated service networks, shall be 
  3.22  responsible for the surcharges originally assessed to the 
  3.23  entities involved in the merger, regardless of whether the 
  3.24  merging entities retain a certificate of authority under chapter 
  3.25  62D or a license under chapter 62N.  The surcharge assessed to a 
  3.26  health maintenance organization, integrated service network, or 
  3.27  community integrated service network ends when the entity ceases 
  3.28  providing services for premiums and the cessation is not 
  3.29  connected to a merger or acquisition. 
  3.30     Sec. 3.  Minnesota Statutes 1994, section 256.969, 
  3.31  subdivision 9, is amended to read: 
  3.32     Subd. 9.  [DISPROPORTIONATE NUMBERS OF LOW-INCOME PATIENTS 
  3.33  SERVED.] (a) For admissions occurring on or after October 1, 
  3.34  1992, through December 31, 1992, the medical assistance 
  3.35  disproportionate population adjustment shall comply with federal 
  3.36  law and shall be paid to a hospital, excluding regional 
  4.1   treatment centers and facilities of the federal Indian Health 
  4.2   Service, with a medical assistance inpatient utilization rate in 
  4.3   excess of the arithmetic mean.  The adjustment must be 
  4.4   determined as follows: 
  4.5      (1) for a hospital with a medical assistance inpatient 
  4.6   utilization rate above the arithmetic mean for all hospitals 
  4.7   excluding regional treatment centers and facilities of the 
  4.8   federal Indian Health Service but less than or equal to one 
  4.9   standard deviation above the mean, the adjustment must be 
  4.10  determined by multiplying the total of the operating and 
  4.11  property payment rates by the difference between the hospital's 
  4.12  actual medical assistance inpatient utilization rate and the 
  4.13  arithmetic mean for all hospitals excluding regional treatment 
  4.14  centers and facilities of the federal Indian Health Service; and 
  4.15     (2) for a hospital with a medical assistance inpatient 
  4.16  utilization rate above one standard deviation above the mean, 
  4.17  the adjustment must be determined by multiplying the adjustment 
  4.18  that would be determined under clause (1) for that hospital by 
  4.19  1.1.  If federal matching funds are not available for all 
  4.20  adjustments under this subdivision, the commissioner shall 
  4.21  reduce payments on a pro rata basis so that all adjustments 
  4.22  qualify for federal match.  The commissioner may establish a 
  4.23  separate disproportionate population operating payment rate 
  4.24  adjustment under the general assistance medical care program.  
  4.25  For purposes of this subdivision medical assistance does not 
  4.26  include general assistance medical care.  The commissioner shall 
  4.27  report annually on the number of hospitals likely to receive the 
  4.28  adjustment authorized by this paragraph.  The commissioner shall 
  4.29  specifically report on the adjustments received by public 
  4.30  hospitals and public hospital corporations located in cities of 
  4.31  the first class. 
  4.32     (b) For admissions occurring on or after July 1, 1993, the 
  4.33  medical assistance disproportionate population adjustment shall 
  4.34  comply with federal law and shall be paid to a hospital, 
  4.35  excluding regional treatment centers and facilities of the 
  4.36  federal Indian Health Service, with a medical assistance 
  5.1   inpatient utilization rate in excess of the arithmetic mean.  
  5.2   The adjustment must be determined as follows: 
  5.3      (1) for a hospital with a medical assistance inpatient 
  5.4   utilization rate above the arithmetic mean for all hospitals 
  5.5   excluding regional treatment centers and facilities of the 
  5.6   federal Indian Health Service but less than or equal to one 
  5.7   standard deviation above the mean, the adjustment must be 
  5.8   determined by multiplying the total of the operating and 
  5.9   property payment rates by the difference between the hospital's 
  5.10  actual medical assistance inpatient utilization rate and the 
  5.11  arithmetic mean for all hospitals excluding regional treatment 
  5.12  centers and facilities of the federal Indian Health Service; 
  5.13     (2) for a hospital with a medical assistance inpatient 
  5.14  utilization rate above one standard deviation above the mean, 
  5.15  the adjustment must be determined by multiplying the adjustment 
  5.16  that would be determined under clause (1) for that hospital by 
  5.17  1.1.  The commissioner may establish a separate disproportionate 
  5.18  population operating payment rate adjustment under the general 
  5.19  assistance medical care program.  For purposes of this 
  5.20  subdivision, medical assistance does not include general 
  5.21  assistance medical care.  The commissioner shall report annually 
  5.22  on the number of hospitals likely to receive the adjustment 
  5.23  authorized by this paragraph.  The commissioner shall 
  5.24  specifically report on the adjustments received by public 
  5.25  hospitals and public hospital corporations located in cities of 
  5.26  the first class; and 
  5.27     (3) for a hospital that ~~(i)~~ had medical assistance 
  5.28  fee-for-service payment volume during calendar year 1991 in 
  5.29  excess of 13 percent of total medical assistance fee-for-service 
  5.30  payment volume~~; or (ii)~~ medical assistance disproportionate 
  5.31  population adjustment shall be paid in addition to any other 
  5.32  disproportionate payment due under this subdivision as follows:  
  5.33  $1,510,000 due on the 15th of each month after noon, beginning 
  5.34  July 15, 1995.  For a hospital that had medical assistance 
  5.35  fee-for-service payment volume during calendar year 1991 in 
  5.36  excess of eight percent of total medical assistance 
  6.1   fee-for-service payment volume and is affiliated with the 
  6.2   University of Minnesota, a medical assistance disproportionate 
  6.3   population adjustment shall be paid in addition to any other 
  6.4   disproportionate payment due under this subdivision as follows:  
  6.5   ~~$1,010,000~~ $505,000 due on the 15th of each month after noon, 
  6.6   beginning July 15, ~~1993~~ 1995. 
  6.7      (c) The commissioner shall adjust rates paid to a health 
  6.8   maintenance organization under contract with the commissioner to 
  6.9   reflect rate increases provided in paragraph (b), clauses (1) 
  6.10  and (2), on a nondiscounted hospital-specific basis but shall 
  6.11  not adjust those rates to reflect payments provided in clause 
  6.12  (3). 
  6.13     (d) If federal matching funds are not available for all 
  6.14  adjustments under paragraph (b), the commissioner shall reduce 
  6.15  payments under paragraph (b), clauses (1) and (2), on a pro rata 
  6.16  basis so that all adjustments under paragraph (b) qualify for 
  6.17  federal match. 
  6.18     (e) For purposes of this subdivision, medical assistance 
  6.19  does not include general assistance medical care. 
  6.20     Sec. 4.  Minnesota Statutes 1994, section 256B.19, 
  6.21  subdivision 1c, is amended to read: 
  6.22     Subd. 1c.  [ADDITIONAL PORTION OF NONFEDERAL SHARE.] In 
  6.23  addition to any payment required under subdivision 1b, Hennepin 
  6.24  county ~~and the University of Minnesota~~ shall be responsible for 
  6.25  a monthly transfer payment of ~~$1,000,000~~ $1,500,000, due before 
  6.26  noon on the 15th of each month and the University of Minnesota 
  6.27  shall be responsible for a monthly transfer payment of $500,000 
  6.28  due before noon on the 15th of each month, beginning July 15, 
  6.29  ~~1993~~ 1995.  These sums shall be part of the designated 
  6.30  governmental unit's portion of the nonfederal share of medical 
  6.31  assistance costs, but shall not be subject to payback provisions 
  6.32  of section 256.025. 
  6.33     Sec. 5.  Minnesota Statutes 1994, section 256B.19, 
  6.34  subdivision 1d, is amended to read: 
  6.35     Subd. 1d.  [PORTION OF NONFEDERAL SHARE TO BE PAID BY 
  6.36  CERTAIN COUNTIES.] In addition to the percentage contribution 
  7.1   paid by a county under subdivision 1, the governmental units 
  7.2   designated in this subdivision shall be responsible for an 
  7.3   additional portion of the nonfederal share of medical assistance 
  7.4   cost.  For purposes of this subdivision, "designated 
  7.5   governmental unit" means the counties of Becker, Beltrami, 
  7.6   Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, ~~Mahnomen,~~ 
  7.7   Pennington, Pipestone, Ramsey, St. Louis, Steele, Todd, 
  7.8   Traverse, and Wadena. 
  7.9      Beginning in 1994, each of the governmental units 
  7.10  designated in this subdivision shall transfer before noon on May 
  7.11  31 to the state Medicaid agency an amount equal to the number of 
  7.12  licensed beds in any nursing home owned and operated by the 
  7.13  county, with the county named as licensee, multiplied by $5,723. 
  7.14  If two or more counties own and operate a nursing home, the 
  7.15  payment shall be prorated.  These sums shall be part of the 
  7.16  designated governmental unit's portion of the nonfederal share 
  7.17  of medical assistance costs, but shall not be subject to payback 
  7.18  provisions of section 256.025. 
  7.19     Sec. 6.  Minnesota Statutes 1994, section 256B.431, 
  7.20  subdivision 23, is amended to read: 
  7.21     Subd. 23.  [COUNTY NURSING HOME PAYMENT ADJUSTMENTS.] (a) 
  7.22  Beginning in 1994, the commissioner shall pay a nursing home 
  7.23  payment adjustment on May 31 after noon to a county in which is 
  7.24  located a nursing home that, as of January 1 of the previous 
  7.25  year, was county-owned and operated, with the county named as 
  7.26  licensee by the commissioner of health, and had over 40 beds and 
  7.27  medical assistance occupancy in excess of 50 percent during the 
  7.28  reporting year ending September 30, 1991.  The adjustment shall 
  7.29  be an amount equal to $16 per calendar day multiplied by the 
  7.30  number of beds licensed in the facility as of September 30, 1991.
  7.31     (b) Payments under paragraph (a) are excluded from medical 
  7.32  assistance per diem rate calculations.  These payments are 
  7.33  required notwithstanding any rule prohibiting medical assistance 
  7.34  payments from exceeding payments from private pay residents.  A 
  7.35  facility receiving a payment under paragraph (a) may not 
  7.36  increase charges to private pay residents by an amount 
  8.1   equivalent to the per diem amount payments under paragraph (a) 
  8.2   would equal if converted to a per diem. 
  8.3      Sec. 7.  [EFFECTIVE DATE.] 
  8.4      Sections 5 and 6 are effective May 30, 1995.