1.1 	A bill for an act
1.2 	relating to health; authorizing business organizations to obtain certificates of 
1.3 	authority to operate as health maintenance organizations; providing for hospital 
1.4 	pricing transparency and provider pricing fairness; authorizing small health 
1.5 	plan purchasing pools; providing for a health insurance tax; regulating provider 
1.6 	disclosures of reimbursement;amending Minnesota Statutes 2004, sections 
1.7 	62D.02, subdivision 4, by adding a subdivision; 62D.03, subdivision 1; 62D.05, 
1.8 	subdivision 1; 62J.81, subdivision 1; 297I.01, subdivision 10; Minnesota Statutes 
1.9 	2005 Supplement, sections 62J.052; 297I.05, subdivision 5; proposing coding 
1.10 	for new law in Minnesota Statutes, chapters 62J; 62Q; repealing Minnesota 
1.11 	Statutes 2004, sections 62J.17; 62J.25.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	Section 1. Minnesota Statutes 2004, section 62D.02, is amended by adding a 
1.14 	subdivision to read:
1.15 		Subd. 1a.Authorized entity. "Authorized entity" means a corporation organized 
1.16 	under chapter 302A, 317A, or the similar laws of another state; a limited liability company 
1.17 	organized under chapter 322B or the similar laws of another state; or a local government 
1.18 	unit as defined in subdivision 11.

1.19 	Sec. 2. Minnesota Statutes 2004, section 62D.02, subdivision 4, is amended to read:
1.20 		Subd. 4.Health maintenance organization. (a) "Health maintenance organization" 
1.21 	means a nonprofit corporation organized under chapter 317A, or a local governmental unit 
1.22 	as defined in subdivision 11 an authorized entity, controlled and operated as provided in 
1.23 	sections  62D.01 to  62D.30, which provides, either directly or through arrangements with 
1.24 	providers or other persons, comprehensive health maintenance services, or arranges for 
1.25 	the provision of these services, to enrollees on the basis of a fixed prepaid sum without 
1.26 	regard to the frequency or extent of services furnished to any particular enrollee. 
2.1 	(b) (Expired)

2.2 	Sec. 3. Minnesota Statutes 2004, section 62D.03, subdivision 1, is amended to read:
2.3 		Subdivision 1.Certificate of authority required. Notwithstanding any law of this 
2.4 	state to the contrary, any nonprofit corporation organized to do so or a local governmental 
2.5 	unit an authorized entity may apply to the commissioner of health for a certificate of 
2.6 	authority to establish and operate a health maintenance organization in compliance with 
2.7 	sections  62D.01 to  62D.30. No person shall establish or operate a health maintenance 
2.8 	organization in this state, nor sell or offer to sell, or solicit offers to purchase or receive 
2.9 	advance or periodic consideration in conjunction with a health maintenance organization 
2.10 	or health maintenance contract unless the organization has a certificate of authority under 
2.11 	sections  62D.01 to  62D.30. An out-of-state corporation or out-of-state limited liability 
2.12 	company may qualify to apply for a certificate of authority under this chapter, subject to 
2.13 	obtaining a certificate of authority to do business in this state under section 303.08 or 
2.14 	322B.915, as appropriate, and compliance with this chapter and other applicable state laws.

2.15 	Sec. 4. Minnesota Statutes 2004, section 62D.05, subdivision 1, is amended to read:
2.16 		Subdivision 1.Authority granted. Any nonprofit corporation or local governmental 
2.17 	unitauthorized entity may, upon obtaining a certificate of authority as required in sections  
2.18 	62D.01 to  62D.30, operate as a health maintenance organization. 

2.19 	Sec. 5. Minnesota Statutes 2005 Supplement, section 62J.052, is amended to read:
2.20 	62J.052 PROVIDER COST DISCLOSURE.
2.21 	(a) Each health care provider, as defined by section 62J.03, subdivision 8, except 
2.22 	hospitals and outpatient surgical centers subject to the requirements of section 62J.823, 
2.23 	shall provide the following information:
2.24 	(1) the average allowable payment from private third-party payers for the 20 50
2.25 	services or procedures most commonly performed;
2.26 	(2) the average payment rates for those services and procedures for medical 
2.27 	assistance;
2.28 	(3) the average charge for those services and procedures for individuals who have no 
2.29 	applicable private or public coverage; and
2.30 	(4) the average charge for those services and procedures, including all patients.
2.31 	(b) Each pharmacy, as defined in section 151.01, subdivision 2, shall provide the 
2.32 	following information:
3.1 	(1) the average allowable payment from private third-party payers for the 50 most 
3.2 	commonly prescribed prescription drugs;
3.3 	(2) the average payment rates for those prescription drugs for medical assistance;
3.4 	(3) the average charge for those prescription drugs for individuals who have no 
3.5 	applicable private or public coverage; and
3.6 	(4) the average charge for those services and procedures, including all individuals.
3.7 	(b) (c) This information shall be updated annually and be readily available at no 
3.8 	cost to the public on site.

3.9 	Sec. 6. [62J.823] HOSPITAL PRICING TRANSPARENCY.
3.10 		Subdivision 1.Short title. This section may be cited as the Hospital Pricing 
3.11 	Transparency Act.
3.12 		Subd. 2.Definition. For the purposes of this section, "estimate" means any of 
3.13 	the following: 
3.14 	(1) the actual price expected to be charged to the individual based on the specific 
3.15 	diagnostic related group code or specific procedure code or codes reflecting any discounts 
3.16 	the individual would receive; 
3.17 	(2) the actual price expected to be charged to the individual based on the specific 
3.18 	diagnostic related group code or specific procedure code or codes to be performed without 
3.19 	taking into account any discounts the individual may receive; 
3.20 	(3) the average billed rate of all of the specific diagnostic related group code or 
3.21 	procedure code performed in the last six months; 
3.22 	(4) the average billed rate of the most recently performed services of the same 
3.23 	diagnostic related group code or procedure code; or 
3.24 	(5) any other estimate that will provide a patient with an accurate view of their 
3.25 	potential financial obligations if the services are performed by the hospital.
3.26 		Subd. 3.Applicability and scope. Any hospital, as defined in section 144.696, 
3.27 	subdivision 3, and outpatient surgical center, as defined in section 144.696, subdivision 4, 
3.28 	shall provide a written estimate of the cost of a specific service or stay upon the request of 
3.29 	a patient, doctor, or the patient??a??a??s representative. The request must include: 
3.30 	(1) the specific diagnostic related group code; 
3.31 	(2) the name of the procedure or procedures to be performed; 
3.32 	(3) the type of treatment to be received; or
3.33 	(4) any other information that will allow the hospital or outpatient surgical center to 
3.34 	determine the specific diagnostic related group or procedure code or codes.
4.1 		Subd. 4.Estimate. (a) An estimate provided by the hospital or outpatient surgical 
4.2 	center must contain: 
4.3 	(1) the method used to calculate the estimate; 
4.4 	(2) the specific diagnostic related group or procedure code or codes used to calculate 
4.5 	the estimate; 
4.6 	(3) the name of any network or program that resulted in a discounted rate; and 
4.7 	(4) a statement indicating that the estimate, while accurate, may not reflect the 
4.8 	actual billed charges and that the final bill may be higher or lower depending on the 
4.9 	patient??a??a??s specific circumstances. 
4.10 	(b) The estimate may be provided in any method that meets the needs of the patient 
4.11 	and the hospital or outpatient surgical center, including electronically; however, a paper 
4.12 	copy must be provided if specifically requested.

4.13 	EFFECTIVE DATE. This section is effective January 1, 2007.

4.14 	Sec. 7. Minnesota Statutes 2004, section 62J.81, subdivision 1, is amended to read:
4.15 		Subdivision 1.Required disclosure of estimated payment. (a) A health care 
4.16 	provider, as defined in section  62J.03, subdivision 8, or the provider's designee, shall, 
4.17 	at the request of a consumer, provide that consumer with a good faith estimate of the 
4.18 	reimbursement the provider expects to receive from the health plan company in which the 
4.19 	consumer is enrolled. Health plan companies must allow contracted providers, or their 
4.20 	designee, to release this information. A good faith estimate must also be made available 
4.21 	at the request of a consumer who is not enrolled in a health plan company. Payment 
4.22 	information provided by a provider, or by the provider's designee, to a patient pursuant to 
4.23 	this subdivision does not constitute a legally binding estimate of the cost of services. 
4.24 	(b) A health plan company, as defined in section 62J.03, subdivision 10, shall, 
4.25 	at the request of an enrollee, provide that enrollee with a good faith estimate of the 
4.26 	reimbursement the health plan company would expect to pay to a specified provider for a 
4.27 	health care service specified by the enrollee. An estimate provided to an enrollee under 
4.28 	this paragraph is not a legally binding estimate of the reimbursement.

4.29 	EFFECTIVE DATE. This section is effective the day following final enactment.

4.30 	Sec. 8. [62J.83] PROVIDER PRICING FAIRNESS.
4.31 	(a) No health care provider, as defined in section 62J.03, subdivision 8, shall vary 
4.32 	the payment amount that it accepts as full payment for a health care service based upon 
4.33 	the identity of the payer, upon a contractual relationship with a payer, upon the identity 
5.1 	of the patient, or upon whether the patient has coverage through a group purchaser, as 
5.2 	defined in section 62J.03, subdivision 6.
5.3 	(b) This section does not apply to a variation based upon a payer being a 
5.4 	governmental entity.
5.5 	(c) This section does not affect the right of a provider to provide charity care or care 
5.6 	for a reduced price due to financial hardship of the patient or due to the patient being a 
5.7 	relative or friend of the provider.

5.8 	Sec. 9. [62Q.80] SMALL HEALTH PLAN PURCHASING POOL.
5.9 	(a) Health plan companies whose premium volume is less than ten percent of 
5.10 	total premiums in the Minnesota health plan market may create a purchasing pool for 
5.11 	group contracting for health care from health care providers for purposes of this section. 
5.12 	Membership by a health plan company is voluntary. For purposes of the ten percent 
5.13 	calculation, a health plan company's premiums include those of its affiliates.
5.14 	(b) Members of the pool may use the contracted health care for purposes of meeting 
5.15 	their obligations to their enrollees under health plans.
5.16 	(c) The pool or its members may offer and sell health care discount cards to persons 
5.17 	who have no public sector or private sector health coverage. The discount cards must 
5.18 	entitle the purchasers to discounted charges from health care providers that participate 
5.19 	in the program. The discount cards need not provide their purchasers with the same 
5.20 	discounted prices used under paragraph (b). The discount cards, and advertisements 
5.21 	regarding them, must clearly indicate that the discount card program is not insurance 
5.22 	or health maintenance coverage, and that the purchaser must check with a provider to 
5.23 	determine whether the provider accepts the card. 
5.24 	(d) The commissioner of commerce shall oversee and supervise this purchasing pool 
5.25 	to ensure that it promotes competition in the market for health plan coverage in this state 
5.26 	by enabling its members to participate in the health plan market in this state on a more 
5.27 	equal footing with their larger competitors.

5.28 	Sec. 10. Minnesota Statutes 2004, section 297I.01, subdivision 10, is amended to read:
5.29 		Subd. 10.Health maintenance organization insurance. "Health maintenance 
5.30 	organization" has the meaning given in section  62D.02, subdivision 4. insurance" means 
5.31 	coverage under:
5.32 	(1) a health plan as defined in section 62A.011, subdivision 3, except the exclusions 
5.33 	under clauses (6), (9), (10), and (12) do not apply; and
6.1 	(2) stop-loss insurance purchased in connection with a self-insurance plan for 
6.2 	employee health benefits.

6.3 	EFFECTIVE DATE. This section is effective for premiums received after 
6.4 	December 31, 2006. 

6.5 	Sec. 11. Minnesota Statutes 2005 Supplement, section 297I.05, subdivision 5, is 
6.6 	amended to read:
6.7 		Subd. 5.Health maintenance organizations, nonprofit health service plan 
6.8 	corporations, and community integrated service networks insurance. (a) A tax is 
6.9 	imposed on health maintenance organizations, community integrated service networks, 
6.10 	and nonprofit health care service plan corporations. The rate of tax is insurance equal to 
6.11 	one ... percent of gross premiums less return premiums on all direct business received by 
6.12 	the organization, network, or corporation  health carrier, as defined in section 62A.011, 
6.13 	subdivision 2, or its agents in Minnesota, in cash or otherwise, in the calendar year. The 
6.14 	tax imposed under this subdivision is in lieu of the tax on health insurance that would 
6.15 	otherwise apply under any other subdivision of this section, except subdivision 11.
6.16 	(b) The commissioner shall deposit all revenues, including penalties and interest, 
6.17 	collected under the tax under this chapter from health maintenance organizations, 
6.18 	community integrated service networks, and nonprofit health service plan corporations
6.19 	subdivision in the health care access fund. Refunds of overpayments of tax imposed 
6.20 	by this subdivision must be paid from the health care access fund. There is annually 
6.21 	appropriated from the health care access fund to the commissioner the amount necessary 
6.22 	to make any refunds of the tax imposed under this subdivision.

6.23 	EFFECTIVE DATE. This section is effective for premiums received after 
6.24 	December 31, 2006.

6.25 	Sec. 12.  REPEALER.
 6.26 	(a) Minnesota Statutes 2004, section 62J.17, is repealed effective the day following 
6.27 	final enactment.
6.28 	(b) Minnesota Statutes 2004, section 62J.25, is repealed effective for care provided 
6.29 	on or after January 1, 2007.