1.1 	A bill for an act
1.2 	relating to state government; establishing the
1.3 	Minnesota Health Care Purchasing Authority; requiring
1.4 	a report.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. STATE HEALTH CARE PURCHASING AUTHORITY.
 1.7 		Subdivision 1.Purchasing authority created. By December
1.8 	15, 2005, the commissioner of employee relations, in
1.9 	consultation with the commissioners of health, human services,
1.10 	labor and industry, corrections, commerce, and administration
1.11 	and the Minnesota Comprehensive Health Association board of
1.12 	directors shall enter into interagency agreements regarding the
1.13 	formation of the Minnesota Health Care Purchasing Authority for
1.14 	the purpose of implementing a unified strategy and joint
1.15 	purchasing of health care services for the state of Minnesota.
1.16 	The strategy shall include implementing a process that examines
1.17 	the health care purchasing decisions and coverage in terms of
1.18 	cost and medical efficacy based on reliable research evidence to
1.19 	ensure access to appropriate and necessary health care.  By
1.20 	December 15, 2006, the commissioners shall submit to the
1.21 	legislature a report and proposed legislation for the creation
1.22 	of the purchasing authority as a distinct agency of state
1.23 	government responsible for all state purchasing of health care.
1.24 		Subd. 2.Principles of state purchasing. The purchasing
1.25 	authority shall prepare and submit to the governor and
2.1 	legislature an annual report and plan for the unified purchasing
2.2 	of health care services.  The plan must:
2.3 	(1) promote personal choice and responsibility;
2.4 	(2) encourage and promote better health of patients and
2.5 	residents of the state;
2.6 	(3) provide incentives to privately based health plans and
2.7 	health care delivery systems to improve efficiency and quality;
2.8 	(4) use community standards and measurement methods for
2.9 	determining the value of specific health care services based on
2.10 	quality and performance; and 
2.11 	(5) separate the health care purchasing functions of state
2.12 	government from those activities relating to regulation and
2.13 	delivery of services, but require consistent use of uniform
2.14 	quality and performance standards and methods for purchasing,
2.15 	regulation, and delivery of health care services.
2.16 		Subd. 3.Purchasing and coverage guidelines. The
2.17 	purchasing authority shall convene a panel of health care policy
2.18 	experts to establish a process to select evidence-based
2.19 	guidelines based on sound research evidence and implement an
2.20 	integrated approach using these guidelines for state government
2.21 	purchasing decisions and coverage design.
2.22 		Subd. 4.Public and private purchasers. The purchasing
2.23 	authority shall prepare and submit to the governor and
2.24 	legislature by December 15, 2005, a plan for permitting public
2.25 	employers, including school districts, cities, counties, and
2.26 	other governmental entities; private employers with 49 or fewer
2.27 	employees; nursing homes and other long-term care employers; and
2.28 	individuals to purchase a secure benefit set through the state
2.29 	purchasing authority.  The secure benefit set shall include
2.30 	health care services that are:  (1) essential for the protection
2.31 	of individual and public health; and (2) effective in treating a
2.32 	health condition based on research evidence.
2.33 		Subd. 5.Common standards for state purchasing and
2.34 	regulation. The purchasing authority, in consultation with all
2.35 	state agencies, boards, and commissioners that have
2.36 	responsibility for purchasing or for regulating individuals and
3.1 	organizations that provide health coverage or deliver health
3.2 	care services, shall prepare and submit to the governor and
3.3 	legislature by December 15, 2006, a report and proposed
3.4 	legislation that will require all state purchasing and
3.5 	regulatory requirements to use common standards and measurement
3.6 	methods for quality and performance.
3.7 		Subd. 6.Secure benefit set development. The purchasing
3.8 	authority, in consultation with a panel of health care policy
3.9 	experts, shall define a secure benefit set that includes
3.10 	coverage for preventive health services, as specified in
3.11 	preventive services guidelines for children and adults developed
3.12 	by the Institute for Clinical Systems Improvement, prescription
3.13 	drug coverage, and catastrophic coverage.
3.14 		Subd. 7.Special populations. In developing a plan for
3.15 	the unified purchasing of health care services and a secure
3.16 	benefit set, the purchasing authority must take into account the
3.17 	needs of special populations, including, but not limited to,
3.18 	persons who are elderly or disabled and persons with chronic
3.19 	conditions.
3.20 		Subd. 8.Cost and quality disclosure. The purchasing
3.21 	authority, in cooperation with organizations representing
3.22 	consumers, employers, physicians and other health professionals,
3.23 	hospitals, long-term care facilities, health plan companies,
3.24 	quality improvement organizations, research and education
3.25 	institutions, and other appropriate constituencies, shall
3.26 	identify and contract with a private, nonprofit organization to
3.27 	serve as a statewide source of comparative information on health
3.28 	care costs and quality.

3.29 	Sec. 2. EFFECTIVE DATE.
 3.30 	Section 1 is effective July 1, 2005.