1.1                          A bill for an act
  1.2             relating to human services; creating a children's 
  1.3             health security account; establishing the children's 
  1.4             health security program; specifying eligibility 
  1.5             criteria, covered services, and administrative 
  1.6             procedures; increasing the tax on tobacco products; 
  1.7             appropriating money; amending Minnesota Statutes 2002, 
  1.8             sections 297F.05, subdivisions 3, 4; 297F.10, as 
  1.9             amended; Minnesota Statutes 2003 Supplement, section 
  1.10            297F.05, subdivision 1; proposing coding for new law 
  1.11            in Minnesota Statutes, chapter 16A; proposing coding 
  1.12            for new law as Minnesota Statutes, chapter 256N. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  [16A.725] [CHILDREN'S HEALTH SECURITY ACCOUNT.] 
  1.15     A children's health security account is created in the 
  1.16  state treasury.  The account is a direct appropriated special 
  1.17  revenue account.  The commissioner shall deposit to the credit 
  1.18  of the account money made available to the account.  
  1.19  Notwithstanding section 11A.20, all investment income and all 
  1.20  investment losses attributable to the investment of the 
  1.21  children's health security account not currently needed shall be 
  1.22  credited to the children's health security account. 
  1.23     Sec. 2.  [256N.01] [CITATION.] 
  1.24     This chapter may be cited as the Children's Health Security 
  1.25  Act. 
  1.26     Sec. 3.  [256N.02] [DEFINITIONS.] 
  1.27     Subdivision 1.  [APPLICABILITY.] The terms used in this 
  1.28  chapter have the following meanings unless otherwise provided 
  1.29  for by text. 
  2.1      Subd. 2.  [CHILD.] "Child" means an individual under age 19 
  2.2   or an unmarried child who is a full-time student under the age 
  2.3   of 25 years who is financially dependent upon a parent, 
  2.4   grandparent, foster parent, relative caretaker, or legal 
  2.5   guardian. 
  2.6      Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
  2.7   commissioner of human services. 
  2.8      Sec. 4.  [256N.03] [ESTABLISHMENT.] 
  2.9      The commissioner shall establish the children's health 
  2.10  security program.  The commissioner shall begin implementation 
  2.11  of the program on July 1, 2005. 
  2.12     Sec. 5.  [256N.05] [ELIGIBILITY.] 
  2.13     Subdivision 1.  [GENERAL REQUIREMENTS.] Children meeting 
  2.14  the eligibility requirements of this section are eligible for 
  2.15  the children's health security program. 
  2.16     Subd. 2.  [PHASE-IN OF ELIGIBLE GROUPS.] (a) Children who 
  2.17  are eligible for MinnesotaCare or medical assistance are 
  2.18  eligible to enroll effective July 1, 2005, or upon federal 
  2.19  approval, whichever is later. 
  2.20     (b) Effective July 1, 2007, eligibility is expanded to 
  2.21  include all children, regardless of household income or assets, 
  2.22  who are not eligible for medical assistance or MinnesotaCare. 
  2.23     Subd. 3.  [RESIDENCY.] (a) To be eligible for health 
  2.24  coverage under the children's health security program, children 
  2.25  must be permanent residents of Minnesota.  For purposes of this 
  2.26  requirement, a permanent Minnesota resident is a person who has 
  2.27  demonstrated, through persuasive and objective evidence, that 
  2.28  the person is domiciled in the state and intends to live in the 
  2.29  state permanently. 
  2.30     (b) To be eligible as a permanent resident, an applicant, 
  2.31  or the applicant's parent or guardian as applicable, must 
  2.32  demonstrate the requisite intent to live in the state 
  2.33  permanently by: 
  2.34     (1) showing that the applicant, or the applicant's parent 
  2.35  or guardian as applicable, maintains a residence at a verified 
  2.36  address, through the use of evidence of residence described in 
  3.1   paragraph (c); and 
  3.2      (2) signing an affidavit declaring that the applicant 
  3.3   currently resides in the state and intends to reside in the 
  3.4   state permanently, and the applicant did not come to the state 
  3.5   for the primary purpose of obtaining medical coverage or 
  3.6   treatment. 
  3.7      (c) An applicant, or a parent or guardian of an applicant, 
  3.8   may verify a residence address by presenting a valid state 
  3.9   driver's license, a state identification card, a voter 
  3.10  registration card, a rent receipt, a statement by the landlord, 
  3.11  apartment or emergency shelter manager, or homeowner verifying 
  3.12  that the individual is residing at the address, or other form of 
  3.13  verification approved by the commissioner. 
  3.14     (d) A child who is temporarily absent from the state does 
  3.15  not lose eligibility for the children's health security 
  3.16  program.  "Temporarily absent from the state" means the person 
  3.17  is out of the state for a temporary purpose and intends to 
  3.18  return when the purpose of the absence has been accomplished.  A 
  3.19  person is not temporarily absent from the state if another state 
  3.20  has determined that the person is a resident for any purpose.  
  3.21  If temporarily absent from the state, the person must follow the 
  3.22  requirements of the health plan in which the person is enrolled 
  3.23  to receive services. 
  3.24     (e) A child who moved to Minnesota primarily to obtain 
  3.25  medical treatment or health coverage for a preexisting condition 
  3.26  is not a permanent resident. 
  3.27     Subd. 4.  [ENROLLMENT VOLUNTARY.] Enrollment in the 
  3.28  children's health security program is voluntary.  Parents or 
  3.29  guardians may retain private sector or Medicare coverage for a 
  3.30  child as the sole source of coverage.  Parents or guardians who 
  3.31  have private sector or Medicare coverage for children may also 
  3.32  enroll children in the children's health security program.  If 
  3.33  private sector or Medicare coverage is available, coverage under 
  3.34  the children's health security program is secondary to the 
  3.35  private sector or Medicare coverage. 
  3.36     Sec. 6.  [256N.07] [COVERED SERVICES.] 
  4.1      Covered services under the children's health security 
  4.2   program consist of all services reimbursed under chapter 256B. 
  4.3      Sec. 7.  [256N.09] [NO ENROLLEE PREMIUMS OR COST SHARING.] 
  4.4      In order to ensure broad access to coverage, the children's 
  4.5   health security program has no enrollee premium or cost-sharing 
  4.6   requirements. 
  4.7      Sec. 8.  [256N.11] [APPLICATION PROCEDURES.] 
  4.8      Subdivision 1.  [APPLICATION PROCEDURE.] Applications for 
  4.9   the program must be made available to provider offices, local 
  4.10  human services agencies, school districts, schools, community 
  4.11  health offices, and other sites willing to cooperate in program 
  4.12  outreach.  These sites may accept applications and forward 
  4.13  applications to the commissioner.  Applicants may also apply 
  4.14  directly to the commissioner. 
  4.15     Subd. 2.  [ELIGIBILITY DETERMINATION.] The commissioner 
  4.16  shall determine an applicant's eligibility for the program 
  4.17  within 30 days of the date the application is received by the 
  4.18  Department of Human Services.  The effective date of coverage is 
  4.19  the day upon which eligibility is approved, except in cases of 
  4.20  persons applying under presumptive eligibility. 
  4.21     Subd. 3.  [PRESUMPTIVE ELIGIBILITY.] Coverage under the 
  4.22  program is available during a presumptive eligibility period.  
  4.23  The presumptive eligibility period begins on the date a health 
  4.24  care provider or other entity designated by the commissioner 
  4.25  determines, based on preliminary information, that the person 
  4.26  meets the criteria in section 256N.05.  The presumptive 
  4.27  eligibility period ends on the day on which a determination is 
  4.28  made as to the person's eligibility, except that if an 
  4.29  application is not submitted by the last day of the month 
  4.30  following the month during which the determination based on 
  4.31  preliminary information is made, the presumptive eligibility 
  4.32  period ends on the last day of the month. 
  4.33     Sec. 9.  [256N.13] [SERVICE DELIVERY.] 
  4.34     (a) The commissioner may contract with health maintenance 
  4.35  organizations licensed under chapter 62D, community integrated 
  4.36  service networks licensed under chapter 62N, and accountable 
  5.1   provider networks licensed under chapter 62T to provide health 
  5.2   care services to program enrollees.  Health plan companies under 
  5.3   contract are responsible for coordinating health care services 
  5.4   provided to eligible individuals.  Health plan companies under 
  5.5   contract: 
  5.6      (1) shall authorize and arrange for the provision of all 
  5.7   needed health services reimbursed under chapter 256B, with the 
  5.8   exception of services available only under a medical assistance 
  5.9   home and community-based waiver, in order to ensure appropriate 
  5.10  health care is delivered to enrollees; 
  5.11     (2) shall accept the prospective, per capita payment from 
  5.12  the commissioner in return for the provision of comprehensive 
  5.13  and coordinated health care services for enrollees; 
  5.14     (3) may contract with health care and social service 
  5.15  providers to provide services to enrollees; and 
  5.16     (4) shall institute enrollee grievance procedures according 
  5.17  to the method established by the commissioner, utilizing 
  5.18  applicable requirements of chapter 62D.  Disputes not resolved 
  5.19  through this process may be appealed to the commissioner using 
  5.20  the procedures in section 256.045. 
  5.21     (b) The commissioner may contract with a private sector 
  5.22  entity to administer and manage contracts with health plan 
  5.23  companies under paragraph (a). 
  5.24     (c) The commissioner shall contract with health care and 
  5.25  social service providers, on a fee-for-service basis, to provide 
  5.26  program enrollees with services available only under a medical 
  5.27  assistance home and community-based waiver.  The commissioner 
  5.28  shall determine eligibility for home and community-based waiver 
  5.29  services using the criteria and procedures in chapter 256B.  
  5.30  Disputes related to services provided on a fee-for-service basis 
  5.31  may be appealed to the commissioner using the procedures in 
  5.32  section 256.045. 
  5.33     Sec. 10.  [256N.15] [PAYMENT RATES.] 
  5.34     The commissioner, in consultation with a health care 
  5.35  actuary, shall establish the method and amount of payments for 
  5.36  services.  The commissioner shall annually contract with 
  6.1   eligible entities to provide services to program enrollees.  The 
  6.2   commissioner, in consultation with the risk adjustment 
  6.3   association established under section 62Q.03, subdivision 6, 
  6.4   shall develop and implement a risk adjustment system for the 
  6.5   program. 
  6.6      Sec. 11.  [256N.17] [CONSUMER ASSISTANCE.] 
  6.7      Subdivision 1.  [ASSISTANCE TO APPLICANTS.] The 
  6.8   commissioner shall assist applicants in choosing a health plan 
  6.9   company by: 
  6.10     (1) establishing a Web site to provide information about 
  6.11  health plan companies and to allow on-line enrollment; 
  6.12     (2) make information on health plan companies available at 
  6.13  the sites specified in section 256N.11, subdivision 1; 
  6.14     (3) make applications and information on health plan 
  6.15  companies available in Spanish, Hmong, Laotian, Russian, Somali, 
  6.16  Vietnamese, and Cambodian, and provide language interpreter 
  6.17  services as necessary to assist applicants in choosing a health 
  6.18  plan company; and 
  6.19     (4) make benefit educators available to assist applicants 
  6.20  in choosing a health plan company. 
  6.21     Subd. 2.  [OMBUDSPERSON.] The commissioner shall designate 
  6.22  an ombudsperson to advocate for children enrolled in the 
  6.23  children's health security program.  The ombudsperson shall 
  6.24  assist enrollees in understanding and making use of complaint 
  6.25  and appeal procedures and ensure that necessary medical services 
  6.26  are provided to enrollees.  At the time of enrollment, the 
  6.27  commissioner shall inform enrollees about:  the ombudsperson 
  6.28  program; the right to a resolution of the enrollee's complaint 
  6.29  by the health plan company if the enrollee experiences a problem 
  6.30  with the health plan company or its providers; and appeal rights 
  6.31  under section 256.045. 
  6.32     Sec. 12.  [256N.19] [MONITORING AND EVALUATION OF QUALITY 
  6.33  AND COSTS.] 
  6.34     The commissioner, as a condition of contract, shall require 
  6.35  each participating health plan company and participating 
  6.36  provider to submit, in the form and manner specified by the 
  7.1   commissioner, data required for assessing enrollee satisfaction, 
  7.2   quality of care, cost, and utilization of services.  The 
  7.3   commissioner shall evaluate this data, in order to: 
  7.4      (1) make summary information on the quality of care across 
  7.5   health plan companies, medical clinics, and providers available 
  7.6   to consumers; 
  7.7      (2) require health plan companies and providers, as a 
  7.8   condition of contract, to implement quality improvement plans; 
  7.9   and 
  7.10     (3) compare the cost and quality of services under the 
  7.11  program to the cost and quality of services provided to private 
  7.12  sector enrollees. 
  7.13     Sec. 13.  Minnesota Statutes 2003 Supplement, section 
  7.14  297F.05, subdivision 1, is amended to read: 
  7.15     Subdivision 1.  [RATES; CIGARETTES.] A tax is imposed upon 
  7.16  the sale of cigarettes in this state, upon having cigarettes in 
  7.17  possession in this state with intent to sell, upon any person 
  7.18  engaged in business as a distributor, and upon the use or 
  7.19  storage by consumers, at the following rates: 
  7.20     (1) on cigarettes weighing not more than three pounds per 
  7.21  thousand, ~~24~~ 74 mills on each such cigarette; and 
  7.22     (2) on cigarettes weighing more than three pounds per 
  7.23  thousand, ~~48~~ 148 mills on each such cigarette. 
  7.24     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2005.
  7.25     Sec. 14.  Minnesota Statutes 2002, section 297F.05, 
  7.26  subdivision 3, is amended to read: 
  7.27     Subd. 3.  [RATES; TOBACCO PRODUCTS.] A tax is imposed upon 
  7.28  all tobacco products in this state and upon any person engaged 
  7.29  in business as a distributor, at the rate of ~~35~~ 108 percent of 
  7.30  the wholesale sales price of the tobacco products.  The tax is 
  7.31  imposed at the time the distributor: 
  7.32     (1) brings, or causes to be brought, into this state from 
  7.33  outside the state tobacco products for sale; 
  7.34     (2) makes, manufactures, or fabricates tobacco products in 
  7.35  this state for sale in this state; or 
  7.36     (3) ships or transports tobacco products to retailers in 
  8.1   this state, to be sold by those retailers. 
  8.2      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2005.
  8.3      Sec. 15.  Minnesota Statutes 2002, section 297F.05, 
  8.4   subdivision 4, is amended to read: 
  8.5      Subd. 4.  [USE TAX; TOBACCO PRODUCTS.] A tax is imposed 
  8.6   upon the use or storage by consumers of tobacco products in this 
  8.7   state, and upon such consumers, at the rate of ~~35~~ 108 percent of 
  8.8   the cost to the consumer of the tobacco products. 
  8.9      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2005.
  8.10     Sec. 16.  Minnesota Statutes 2002, section 297F.10, as 
  8.11  amended by Laws 2003, chapter 128, article 1, section 155, and 
  8.12  Laws 2003, First Special Session chapter 21, article 9, section 
  8.13  10, is amended to read: 
  8.14     297F.10 [DEPOSIT OF PROCEEDS.] 
  8.15     Subdivision 1.  [TAX AND USE TAX ON CIGARETTES.] Revenue 
  8.16  received from cigarette taxes, as well as related penalties, 
  8.17  interest, license fees, and miscellaneous sources of revenue 
  8.18  shall be deposited by the commissioner in the state treasury and 
  8.19  credited as follows: 
  8.20     (1) the revenue produced by 3.25 mills of the tax on 
  8.21  cigarettes weighing not more than three pounds a thousand and 
  8.22  6.5 mills of the tax on cigarettes weighing more than three 
  8.23  pounds a thousand must be credited to the Academic Health Center 
  8.24  special revenue fund hereby created and is annually appropriated 
  8.25  to the Board of Regents at the University of Minnesota for 
  8.26  Academic Health Center funding at the University of Minnesota; 
  8.27  and 
  8.28     (2) the revenue produced by 1.25 mills of the tax on 
  8.29  cigarettes weighing not more than three pounds a thousand and 
  8.30  2.5 mills of the tax on cigarettes weighing more than three 
  8.31  pounds a thousand must be credited to the medical education and 
  8.32  research costs account hereby created in the special revenue 
  8.33  fund and is annually appropriated to the commissioner of health 
  8.34  for distribution under section 62J.692, subdivision 4; and 
  8.35     (3) the balance of the revenues derived from taxes, 
  8.36  penalties, and interest (under this chapter) and from license 
  9.1   fees and miscellaneous sources of revenue shall be credited to 
  9.2   the general fund, except that the portion of tax revenue 
  9.3   resulting from the increase in the tax on cigarettes weighing 
  9.4   not more than three pounds per thousand from 24 to 74 mills and 
  9.5   the increase in the tax on cigarettes weighing more than three 
  9.6   pounds per thousand from 48 to 148 mills shall be deposited in 
  9.7   the children's health security account. 
  9.8      Subd. 2.  [TAX AND USE TAX ON TOBACCO PRODUCTS.] Revenue 
  9.9   received from taxes on tobacco products, as well as related 
  9.10  penalties, interest, and license fees shall be deposited by the 
  9.11  commissioner in the state treasury and credited to the general 
  9.12  fund, except that the portion of tax revenue resulting from the 
  9.13  increase in the tax on the wholesale sales price of tobacco 
  9.14  products from 35 to 108 percent shall be deposited in the 
  9.15  children's health security account. 
  9.16     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2005.
  9.17     Sec. 17.  [FLOOR STOCKS TAX.] 
  9.18     Subdivision 1.  [CIGARETTES.] (a) A floor stocks tax is 
  9.19  imposed on every person engaged in business in this state as a 
  9.20  distributor, retailer, subjobber, vendor, manufacturer, or 
  9.21  manufacturer's representative of cigarettes, on the stamped 
  9.22  cigarettes and unaffixed stamps in the person's possession or 
  9.23  under the person's control at 12:01 a.m. on January 1, 2005.  
  9.24  The tax is imposed at the following rates, subject to the 
  9.25  discounts in Minnesota Statutes, section 297F.08, subdivision 7: 
  9.26     (1) on cigarettes weighing not more than three pounds per 
  9.27  thousand, 50 mills on each cigarette; and 
  9.28     (2) on cigarettes weighing more than three pounds per 
  9.29  thousand, 100 mills on each cigarette. 
  9.30     (b) Each distributor, by January 8, 2005, shall file a 
  9.31  report with the commissioner of revenue, in the form the 
  9.32  commissioner prescribes, showing the stamped cigarettes and 
  9.33  unaffixed stamps on hand at 12:01 a.m. on January 1, 2005, and 
  9.34  the amount of tax due on the cigarettes and unaffixed stamps.  
  9.35  The tax imposed by this section is due and payable by February 
  9.36  1, 2005, and after that date bears interest as provided in 
 10.1   Minnesota Statutes, section 270.75.  Each retailer, subjobber, 
 10.2   vendor, manufacturer, or manufacturer's representative shall 
 10.3   file a return with the commissioner, in the form the 
 10.4   commissioner prescribes, showing the cigarettes on hand at 12:01 
 10.5   a.m. on January 1, 2005, and pay the tax due on the cigarettes 
 10.6   by February 1, 2005.  Tax not paid by the due date bears 
 10.7   interest as provided in Minnesota Statutes, section 270.75. 
 10.8      Subd. 2.  [TOBACCO PRODUCTS.] A floor stocks tax is imposed 
 10.9   on every person engaged in business in this state as a 
 10.10  distributor of tobacco products, at the rate of 73 percent of 
 10.11  the wholesale sales price of each tobacco product in the 
 10.12  person's possession or under the person's control at 12:01 a.m. 
 10.13  on January 1, 2005, and the amount of tax due on them.  The tax 
 10.14  imposed by this section, less the discount provided in Minnesota 
 10.15  Statutes, section 297F.09, subdivision 2, is due and payable by 
 10.16  February 1, 2005, and thereafter bears interest as provided in 
 10.17  Minnesota Statutes, section 270.75. 
 10.18     Subd. 3.  [AUDIT AND ENFORCEMENT.] The tax imposed by this 
 10.19  section is subject to the audit, assessment, and collection 
 10.20  provisions applicable to the taxes imposed under Minnesota 
 10.21  Statutes, chapter 297F.  The commissioner of revenue shall 
 10.22  deposit the revenue from the tax imposed under this section in 
 10.23  the health care access fund in the state treasury. 
 10.24     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2005.
 10.25     Sec. 18.  [IMPLEMENTATION PLAN.] 
 10.26     The commissioner shall develop an implementation plan for 
 10.27  the children's health security coverage program and shall 
 10.28  present this plan, any necessary draft legislation, and a draft 
 10.29  of proposed rules to the legislature by December 15, 2004.  The 
 10.30  commissioner shall evaluate the provision of services under the 
 10.31  program to children with disabilities and shall present 
 10.32  recommendations to the legislature by December 15, 2006, for any 
 10.33  program changes necessary to ensure the quality and continuity 
 10.34  of care. 
 10.35     Sec. 19.  [FEDERAL APPROVAL.] 
 10.36     The commissioner shall seek all federal waivers and 
 11.1   approvals necessary to implement this chapter including, but not 
 11.2   limited to, waivers and approvals necessary to: 
 11.3      (1) merge medical assistance and MinnesotaCare coverage for 
 11.4   children into the children's health security program; 
 11.5      (2) use federal medical assistance and MinnesotaCare 
 11.6   dollars to pay for health care services under the children's 
 11.7   health security program; and 
 11.8      (3) maximize receipt of the federal medical assistance 
 11.9   match for covered children, by increasing income standards 
 11.10  through the use of more liberal income methodologies as provided 
 11.11  under United States Code, title 42, sections 1396a and 1396u-1. 
 11.12     Sec. 20.  [RULEMAKING.] 
 11.13     The commissioner shall adopt rules to implement this act. 
 11.14     Sec. 21.  [APPROPRIATION.] 
 11.15     $....... is appropriated from the children's health 
 11.16  security account to the commissioner of human services for the 
 11.17  fiscal year ending June 30, 2005, to develop and implement the 
 11.18  Children's Health Security Act.