1.1 	A bill for an act
1.2 	relating to health; assessing health maintenance
1.3 	organizations for purposes of the insurance fraud
1.4 	prevention account; regulating certain rates, claims,
1.5 	filing, and reporting practices; eliminating expanded
1.6 	provider network requirements; amending Minnesota
1.7 	Statutes 2004, sections 45.0135, subdivision 7;
1.8 	62E.05, subdivision 2; 62L.08, subdivision 8; 62Q.75,
1.9 	subdivision 2, by adding a subdivision; 72A.201,
1.10 	subdivision 4; 256B.692, subdivision 2; 295.582;
1.11 	repealing Minnesota Statutes 2004, sections 62E.035;
1.12 	62Q.095; 62Q.64.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2004, section 45.0135,
1.15 	subdivision 7, is amended to read:
1.16 		Subd. 7.Assessment.  Each insurer authorized to sell
1.17 	insurance in the state of Minnesota shall remit an assessment to
1.18 	the commissioner for deposit in the insurance fraud prevention
1.19 	account on or before June 1 of each year.  The amount of the
1.20 	assessment shall be based on the insurer's total assets and on
1.21 	the insurer's total written Minnesota premium, for the preceding
1.22 	fiscal year, as reported pursuant to section 60A.13.  The
1.23 	assessment is calculated as follows:
1.24 	Total Assets                      Assessment
1.25 	     Less than $100,000,000                   $  200
1.26 	     $100,000,000 to $1,000,000,000           $  750
1.27 	     Over $1,000,000,000                      $2,000
1.28 	
1.29 	     Minnesota Written Premium              Assessment
2.1 	     Less than $10,000,000                    $  200
2.2 	     $10,000,000 to $100,000,000              $  750
2.3 	     Over $100,000,000                        $2,000
2.4 	For purposes of this subdivision, the following entities
2.5 	are not considered to be insurers authorized to sell insurance
2.6 	in the state of Minnesota:  risk retention groups; or township
2.7 	mutuals organized under chapter 67A; or health maintenance
2.8 	organizations organized under chapter 62D.

2.9 	Sec. 2. Minnesota Statutes 2004, section 62E.05,
2.10 	subdivision 2, is amended to read:
2.11 		Subd. 2.Annual report. (a) All health plan companies,
2.12 	as defined in section 62Q.01, shall annually report to the
2.13 	commissioner responsible for their regulation.  The following
2.14 	information shall be reported to the appropriate commissioner on
2.15 	February 1 of each year:
2.16 	(1) the number of individuals and groups who received
2.17 	coverage in the prior year through the qualified plans; and 
2.18 	(2) the number of individuals and groups who received
2.19 	coverage in the prior year through each of the unqualified plans
2.20 	sold by the company.
2.21 	(b) The state of Minnesota or any of its departments,
2.22 	agencies, programs, instrumentalities, or political
2.23 	subdivisions, shall report in writing to the association and to
2.24 	the commissioner of commerce no later than September 15 of each
2.25 	year regarding the number of persons and the amount of premiums,
2.26 	deductibles, co-payments, or coinsurance that it paid for on
2.27 	behalf of enrollees in the Comprehensive Health Association.
2.28 	This report must contain only summary information and must not
2.29 	include any individually identifiable data.  The report must
2.30 	cover the 12-month period ending the preceding June 30.

2.31 	Sec. 3. Minnesota Statutes 2004, section 62L.08,
2.32 	subdivision 8, is amended to read:
2.33 		Subd. 8.Filing requirement. No later than July 1, 1993,
2.34 	and each year thereafter,A health carrier that offers, sells,
2.35 	issues, or renews a health benefit plan for small employers
2.36 	shall file with the commissioner the index rates and must
3.1 	demonstrate that all rates shall be within the rating
3.2 	restrictions defined in this chapter.  Such demonstration must
3.3 	include the allowable range of rates from the index rates and a
3.4 	description of how the health carrier intends to use demographic
3.5 	factors including case characteristics in calculating the
3.6 	premium rates.  The rates shall not be approved, unless the
3.7 	commissioner has determined that the rates are reasonable.  In
3.8 	determining reasonableness, the commissioner shall consider the
3.9 	growth rates applied under section 62J.04, subdivision 1,
3.10 	paragraph (b), to the calendar year or years that the proposed
3.11 	premium rate would be in effect, actuarially valid changes in
3.12 	risk associated with the enrollee population, and actuarially
3.13 	valid changes as a result of statutory changes in Laws 1992,
3.14 	chapter 549. For premium rates proposed to go into effect
3.15 	between July 1, 1993 and December 31, 1993, the pertinent growth
3.16 	rate is the growth rate applied under section 62J.04,
3.17 	subdivision 1, paragraph (b), to calendar year 1994.

3.18 	Sec. 4. Minnesota Statutes 2004, section 62Q.75,
3.19 	subdivision 2, is amended to read:
3.20 		Subd. 2.Claims payments.  (a) This section applies to
3.21 	clean claims submitted to a health plan company or third-party
3.22 	administrator for services provided by any:
3.23 	(1) health care provider, as defined in section 62Q.74, but
3.24 	does not include a provider licensed under chapter 151;
3.25 	(2) home health care provider, as defined in section
3.26 	144A.43, subdivision 4; or
3.27 	(3) health care facility.
3.28 	All health plan companies and third-party administrators must
3.29 	pay or deny claims that are clean claims within 30 calendar days
3.30 	after the date upon which the health plan company or third-party
3.31 	administrator received the claim.
3.32 	(b) The health plan company or third-party administrator
3.33 	shall, upon request, make available to the provider information
3.34 	about the status of a claim submitted by the provider consistent
3.35 	with section 62J.581.
3.36 	(c) If a health plan company or third-party administrator
4.1 	does not pay or deny a clean claim within the period provided in
4.2 	paragraph (a), the health plan company or third-party
4.3 	administrator must pay interest on the claim for the period
4.4 	beginning on the day after the required payment date specified
4.5 	in paragraph (a) and ending on the date on which the health plan
4.6 	company or third-party administrator makes the payment or denies
4.7 	the claim.  In any payment, the health plan company or
4.8 	third-party administrator must itemize any interest payment
4.9 	being made separately from other payments being made for
4.10 	services provided. The health plan company or third-party
4.11 	administrator shall not require the health care provider to bill
4.12 	the health plan company or third-party administrator for the
4.13 	interest required under this section before any interest payment
4.14 	is made.Interest payments must be made to the health care
4.15 	provider no less frequently than quarterly.
4.16 	(d) The rate of interest paid by a health plan company or
4.17 	third-party administrator under this subdivision shall be 1.5
4.18 	percent per month or any part of a month.
4.19 	(e) A health plan company or third-party administrator is
4.20 	not required to make an interest payment on a claim for which
4.21 	payment has been delayed for purposes of reviewing potentially
4.22 	fraudulent or abusive billing practices.
4.23 	(f) The commissioner may assess a financial administrative
4.24 	penalty against a health plan company for violation of this
4.25 	subdivision when there is a pattern of abuse that demonstrates a
4.26 	lack of good faith effort and a systematic failure of the health
4.27 	plan company to comply with this subdivision.

4.28 	Sec. 5. Minnesota Statutes 2004, section 62Q.75, is
4.29 	amended by adding a subdivision to read:
4.30 		Subd. 3.Claims filing. Unless otherwise provided by
4.31 	contract, by section 16A.124, subdivision 4a, or by federal law,
4.32 	the health care providers and facilities specified in
4.33 	subdivision 2, must submit their charges to a health plan
4.34 	company or third-party administrator within six months from the
4.35 	date of service or the date the health care provider knew or was
4.36 	informed of the correct name and address of the responsible
5.1 	health plan company or third-party administrator, whichever is
5.2 	later.  A health care provider or facility that does not submit
5.3 	charges within the six-month period shall not be reimbursed for
5.4 	the charge and may not collect the charge from the recipient of
5.5 	the service or any other payer.  This subdivision also applies
5.6 	to all health care providers and facilities that submit charges
5.7 	to workers' compensation payers for treatment of a workers'
5.8 	compensation injury compensable under chapter 176.

5.9 	Sec. 6. Minnesota Statutes 2004, section 72A.201,
5.10 	subdivision 4, is amended to read:
5.11 		Subd. 4.Standards for claim filing and handling.  The
5.12 	following acts by an insurer, an adjuster, a self-insured, or a
5.13 	self-insurance administrator constitute unfair settlement
5.14 	practices:
5.15 	(1) except for claims made under a health insurance policy
5.16 	of accident and sickness insurance, after receiving notification
5.17 	of claim from an insured or a claimant, failing to acknowledge
5.18 	receipt of the notification of the claim within ten business
5.19 	days, and failing to promptly provide all necessary claim forms
5.20 	and instructions to process the claim, unless the claim is
5.21 	settled within ten business days.  The acknowledgment must
5.22 	include the telephone number of the company representative who
5.23 	can assist the insured or the claimant in providing information
5.24 	and assistance that is reasonable so that the insured or
5.25 	claimant can comply with the policy conditions and the insurer's
5.26 	reasonable requirements.  If an acknowledgment is made by means
5.27 	other than writing, an appropriate notation of the
5.28 	acknowledgment must be made in the claim file of the insurer and
5.29 	dated.  An appropriate notation must include at least the
5.30 	following information where the acknowledgment is by telephone
5.31 	or oral contact:
5.32 	(i) the telephone number called, if any;
5.33 	(ii) the name of the person making the telephone call or
5.34 	oral contact;
5.35 	(iii) the name of the person who actually received the
5.36 	telephone call or oral contact;
6.1 	(iv) the time of the telephone call or oral contact; and
6.2 	(v) the date of the telephone call or oral contact;
6.3 	(2) failing to reply, within ten business days of receipt,
6.4 	to all other communications about a claim from an insured or a
6.5 	claimant that reasonably indicate a response is requested or
6.6 	needed;
6.7 	(3) (i) unless provided otherwise by clause (ii) or (iii),
6.8 	other law,or in the policy, failing to complete its
6.9 	investigation and inform the insured or claimant of acceptance
6.10 	or denial of a claim within 30 business days after receipt of
6.11 	notification of claim unless the investigation cannot be
6.12 	reasonably completed within that time. In the event that the
6.13 	investigation cannot reasonably be completed within that time,
6.14 	the insurer shall notify the insured or claimant within the time
6.15 	period of the reasons why the investigation is not complete and
6.16 	the expected date the investigation will be complete.  For
6.17 	claims made under a health policy of accident and sickness
6.18 	insurance,the notification of claim must be in writing;
6.19 	(ii) for claims submitted under a policy of accident and
6.20 	sickness insurance, the insurer must comply with all of the
6.21 	requirements of section 62Q.75.  The commissioner may not assess
6.22 	a financial administrative penalty against a health plan company
6.23 	for violation of that section;
6.24 	(iii) for claims submitted under a policy of accident and
6.25 	sickness insurance that are accepted, the insurer must notify
6.26 	the insured or claimant no less than semiannually of the
6.27 	disposition of claims of the insured or claimant.  For purposes
6.28 	of this clause, acceptance of a claim means that there is no
6.29 	additional financial liability for the insured or claimant,
6.30 	either because there is a flat co-payment amount specified in
6.31 	the health plan or because there is no co-payment, deductible,
6.32 	or coinsurance owed;
6.33 	(4) where evidence of suspected fraud is present, the
6.34 	requirement to disclose their reasons for failure to complete
6.35 	the investigation within the time period set forth in clause (3)
6.36 	need not be specific.  The insurer must make this evidence
7.1 	available to the Department of Commerce if requested;
7.2 	(5) failing to notify an insured who has made a
7.3 	notification of claim of all available benefits or coverages
7.4 	which the insured may be eligible to receive under the terms of
7.5 	a policy and of the documentation which the insured must supply
7.6 	in order to ascertain eligibility;
7.7 	(6) unless otherwise provided by law or in the policy,
7.8 	requiring an insured to give written notice of loss or proof of
7.9 	loss within a specified time, and thereafter seeking to relieve
7.10 	the insurer of its obligations if the time limit is not complied
7.11 	with, unless the failure to comply with the time limit
7.12 	prejudices the insurer's rights and then only if the insurer
7.13 	gave prior notice to the insured of the potential prejudice;
7.14 	(7) advising an insured or a claimant not to obtain the
7.15 	services of an attorney or an adjuster, or representing that
7.16 	payment will be delayed if an attorney or an adjuster is
7.17 	retained by the insured or the claimant;
7.18 	(8) failing to advise in writing an insured or claimant who
7.19 	has filed a notification of claim known to be unresolved, and
7.20 	who has not retained an attorney, of the expiration of a statute
7.21 	of limitations at least 60 days prior to that expiration.  For
7.22 	the purposes of this clause, any claim on which the insurer has
7.23 	received no communication from the insured or claimant for a
7.24 	period of two years preceding the expiration of the applicable
7.25 	statute of limitations shall not be considered to be known to be
7.26 	unresolved and notice need not be sent pursuant to this clause;
7.27 	(9) demanding information which would not affect the
7.28 	settlement of the claim;
7.29 	(10) unless expressly permitted by law or the policy,
7.30 	refusing to settle a claim of an insured on the basis that the
7.31 	responsibility should be assumed by others;
7.32 	(11) failing, within 60 business days after receipt of a
7.33 	properly executed proof of loss, to advise the insured of the
7.34 	acceptance or denial of the claim by the insurer.  No insurer
7.35 	shall deny a claim on the grounds of a specific policy
7.36 	provision, condition, or exclusion unless reference to the
8.1 	provision, condition, or exclusion is included in the denial.
8.2 	The denial must be given to the insured in writing with a copy
8.3 	filed in the claim file;
8.4 	(12) denying or reducing a claim on the basis of an
8.5 	application which was altered or falsified by the agent or
8.6 	insurer without the knowledge of the insured;
8.7 	(13) failing to notify the insured of the existence of the
8.8 	additional living expense coverage when an insured under a
8.9 	homeowners policy sustains a loss by reason of a covered
8.10 	occurrence and the damage to the dwelling is such that it is not
8.11 	habitable;
8.12 	(14) failing to inform an insured or a claimant that the
8.13 	insurer will pay for an estimate of repair if the insurer
8.14 	requested the estimate and the insured or claimant had
8.15 	previously submitted two estimates of repair.

8.16 	Sec. 7. Minnesota Statutes 2004, section 256B.692,
8.17 	subdivision 2, is amended to read:
8.18 		Subd. 2.Duties of the commissioner of health.  (a)
8.19 	Notwithstanding chapters 62D and 62N, a county that elects to
8.20 	purchase medical assistance and general assistance medical care
8.21 	in return for a fixed sum without regard to the frequency or
8.22 	extent of services furnished to any particular enrollee is not
8.23 	required to obtain a certificate of authority under chapter 62D
8.24 	or 62N.  The county board of commissioners is the governing body
8.25 	of a county-based purchasing program.  In a multicounty
8.26 	arrangement, the governing body is a joint powers board
8.27 	established under section 471.59.
8.28 	(b) A county that elects to purchase medical assistance and
8.29 	general assistance medical care services under this section must
8.30 	satisfy the commissioner of health that the requirements for
8.31 	assurance of consumer protection, provider protection, and
8.32 	fiscal solvency of chapter 62D, applicable to health maintenance
8.33 	organizations, or chapter 62N, applicable to community
8.34 	integrated service networks, will be met.
8.35 	(c) A county must also assure the commissioner of health
8.36 	that the requirements of sections 62J.041; 62J.48; 62J.71 to
9.1 	62J.73; 62M.01 to 62M.16; all applicable provisions of chapter
9.2 	62Q, including sections 62Q.075; 62Q.1055; 62Q.106; 62Q.12;
9.3 	62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 62Q.43;
9.4 	62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64;62Q.68 to
9.5 	62Q.72; and 72A.201 will be met.
9.6 	(d) All enforcement and rulemaking powers available under
9.7 	chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the
9.8 	commissioner of health with respect to counties that purchase
9.9 	medical assistance and general assistance medical care services
9.10 	under this section.
9.11 	(e) The commissioner, in consultation with county
9.12 	government, shall develop administrative and financial reporting
9.13 	requirements for county-based purchasing programs relating to
9.14 	sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and
9.15 	62N.31, and other sections as necessary, that are specific to
9.16 	county administrative, accounting, and reporting systems and
9.17 	consistent with other statutory requirements of counties.

9.18 	Sec. 8. Minnesota Statutes 2004, section 295.582, is
9.19 	amended to read:
9.20 	295.582 AUTHORITY.
9.21 	(a) A hospital, surgical center, or health care provider
9.22 	that is subject to a tax under section 295.52, or a pharmacy
9.23 	that has paid additional expense transferred under this section
9.24 	by a wholesale drug distributor, may transfer additional expense
9.25 	generated by section 295.52 obligations on to all third-party
9.26 	contracts for the purchase of health care services on behalf of
9.27 	a patient or consumer.  The additional expense transferred to
9.28 	the third-party purchaser must not exceed the tax percentage
9.29 	specified in section 295.52 multiplied against the gross
9.30 	revenues received under the third-party contract, and the tax
9.31 	percentage specified in section 295.52 multiplied against
9.32 	co-payments and deductibles paid by the individual patient or
9.33 	consumer.  The expense must not be generated on revenues derived
9.34 	from payments that are excluded from the tax under section
9.35 	295.53.  All third-party purchasers of health care services
9.36 	including, but not limited to, third-party purchasers regulated
10.1 	under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79,
10.2 	or 79A, or under section 471.61 or 471.617, must pay the
10.3 	transferred expense in addition to any payments due under
10.4 	existing contracts with the hospital, surgical center, pharmacy,
10.5 	or health care provider, to the extent allowed under federal
10.6 	law.  A third-party purchaser of health care services includes,
10.7 	but is not limited to, a health carrier or community integrated
10.8 	service network that pays for health care services on behalf of
10.9 	patients or that reimburses, indemnifies, compensates, or
10.10 	otherwise insures patients for health care services.  A
10.11 	third-party purchaser shall comply with this section regardless
10.12 	of whether the third-party purchaser is a for-profit,
10.13 	not-for-profit, or nonprofit entity.  A wholesale drug
10.14 	distributor may transfer additional expense generated by section
10.15 	295.52 obligations to entities that purchase from the
10.16 	wholesaler, and the entities must pay the additional expense.
10.17 	Nothing in this section limits the ability of a hospital,
10.18 	surgical center, pharmacy, wholesale drug distributor, or health
10.19 	care provider to recover all or part of the section 295.52
10.20 	obligation by other methods, including increasing fees or
10.21 	charges.
10.22 	(b) Each third-party purchaser regulated under any chapter
10.23 	cited in paragraph (a) shall include with its annual renewal for
10.24 	certification of authority or licensure documentation indicating
10.25 	compliance with paragraph (a).
10.26 	(c) Any hospital, surgical center, or health care provider
10.27 	subject to a tax under section 295.52 or a pharmacy that has
10.28 	paid additional expense transferred under this section by a
10.29 	wholesale drug distributor may file a complaint with the
10.30 	commissioner responsible for regulating the third-party
10.31 	purchaser if at any time the third-party purchaser fails to
10.32 	comply with paragraph (a).
10.33 	(d) (c) If the commissioner responsible for regulating the
10.34 	third-party purchaser finds at any time that the third-party
10.35 	purchaser has not complied with paragraph (a), the commissioner
10.36 	may take enforcement action against a third-party purchaser
11.1 	which is subject to the commissioner's regulatory jurisdiction
11.2 	and which does not allow a hospital, surgical center, pharmacy,
11.3 	or provider to pass-through the tax.  The commissioner may by
11.4 	order fine or censure the third-party purchaser or revoke or
11.5 	suspend the certificate of authority or license of the
11.6 	third-party purchaser to do business in this state if the
11.7 	commissioner finds that the third-party purchaser has not
11.8 	complied with this section.  The third-party purchaser may
11.9 	appeal the commissioner's order through a contested case hearing
11.10 	in accordance with chapter 14.

11.11 	Sec. 9. REPEALER.
 11.12 	Minnesota Statutes 2004, sections 62E.035; 62Q.095; and
11.13 	62Q.64, are repealed.