1.1                          A bill for an act
  1.2             relating to health; setting requirements for contracts 
  1.3             with managed care organizations serving persons 
  1.4             covered under state health care programs; proposing 
  1.5             coding for new law in Minnesota Statutes, chapter 256B.
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [256B.692] [REQUIREMENTS FOR CONTRACTS WITH 
  1.8   MANAGED CARE ORGANIZATIONS.] 
  1.9      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  1.10  section, the following definitions apply. 
  1.11     (b) "Managed care organization" has the meaning provided in 
  1.12  section 62Q.01, subdivision 5. 
  1.13     (c) "State health care program" means the medical 
  1.14  assistance, general assistance medical care, or MinnesotaCare 
  1.15  program, or any state-administered health care program developed 
  1.16  through consolidating or integrating the medical assistance, 
  1.17  general assistance medical care, and MinnesotaCare programs. 
  1.18     Subd. 2.  [APPLICABILITY.] The commissioner of human 
  1.19  services shall comply with this section when contracting with 
  1.20  managed care organizations to provide health care services to 
  1.21  persons covered under a state health care program.  This section 
  1.22  applies to managed care contracts that take effect on or after 
  1.23  January 1, 1997. 
  1.24     Subd. 3.  [ALTERNATIVE CONTRACT METHODS.] If the 
  1.25  commissioner contracts with managed care organizations to serve 
  2.1   persons covered under a state health care program using a 
  2.2   competitive bid model or a contractual method other than rate 
  2.3   setting under subdivision 4, the commissioner shall: 
  2.4      (1) limit the statewide percentage of persons covered under 
  2.5   a state health care program who are enrolled in any one managed 
  2.6   care organization to not more than 45 percent of the total 
  2.7   number of persons covered under a state health care program who 
  2.8   are enrolled in managed care organizations; 
  2.9      (2) reject bids or compensatory arrangements that are 
  2.10  determined through actuarial analysis to be below cost; and 
  2.11     (3) prohibit managed care organizations awarded a 
  2.12  competitive bid or contract to serve persons covered under a 
  2.13  state health care program from cost-shifting to enrollees not 
  2.14  covered under a state health care program. 
  2.15     Subd. 4.  [RATE SETTING BY COMMISSIONER.] If the 
  2.16  commissioner sets prospective payment rates for managed care 
  2.17  organizations desiring to serve persons covered under a state 
  2.18  health care program, the commissioner shall contract with any 
  2.19  managed care organization that agrees to the prospective payment 
  2.20  rates and other contract terms.