1.1                          A bill for an act
  1.2             relating to health care access; changing loss ratio 
  1.3             standards; modifying universal coverage provisions; 
  1.4             requiring written certification of coverage; modifying 
  1.5             requirements for continued eligibility under 
  1.6             MinnesotaCare; setting new requirements for parity of 
  1.7             benefits; modifying Minnesota comprehensive health 
  1.8             association coverage for medical assistance enrollees; 
  1.9             establishing a process to review health coverage 
  1.10            mandates; repealing law related to integrated service 
  1.11            networks and certain MinnesotaCare initiatives; 
  1.12            appropriating money; amending Minnesota Statutes 1996, 
  1.13            sections 60A.951, subdivision 5; 62A.021, subdivision 
  1.14            1; 62A.045; 62A.65, subdivision 3; 62E.02, subdivision 
  1.15            13; 62E.04, subdivision 8; 62J.017; 62J.051; 62J.2912, 
  1.16            subdivisions 8 and 9; 62J.301, subdivision 3; 62L.08, 
  1.17            subdivision 8; 62Q.01, subdivisions 4 and 5; 62Q.106; 
  1.18            62Q.165; 62Q.30; 62Q.45, subdivision 2; 256.9355, 
  1.19            subdivision 2; 256.9357, subdivision 1; 256.9363, 
  1.20            subdivision 1; 256B.056, subdivision 8; 256B.0625, 
  1.21            subdivision 15; 256D.03, subdivision 3b; and 289A.09, 
  1.22            by adding a subdivision; proposing coding for new law 
  1.23            in Minnesota Statutes, chapters 62A; and 62Q; 
  1.24            repealing Minnesota Statutes 1996, sections 62J.04; 
  1.25            62J.041; 62J.042; 62J.17; 62J.22; 62J.322; 62J.37; 
  1.26            62L.09, subdivision 3; 62N.01; 62N.02, subdivisions 
  1.27            4b, 4c, 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 
  1.28            62N.06; 62N.065; 62N.071; 62N.072; 62N.073; 62N.074; 
  1.29            62N.076; 62N.077; 62N.078; 62N.10; 62N.11; 62N.12; 
  1.30            62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 62N.38; 
  1.31            62Q.41; and 62Q.47. 
  1.32  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.33                             ARTICLE 1
  1.34                  GENERAL MINNESOTACARE PROVISIONS
  1.35     Section 1.  Minnesota Statutes 1996, section 62A.021, 
  1.36  subdivision 1, is amended to read: 
  1.37     Subdivision 1.  [LOSS RATIO STANDARDS.] Notwithstanding 
  1.38  section 62A.02, subdivision 3, relating to loss ratios, health 
  2.1   care policies or certificates shall not be delivered or issued 
  2.2   for delivery to an individual or to a small employer as defined 
  2.3   in section 62L.02, unless the policies or certificates can be 
  2.4   expected, as estimated for the entire period for which rates are 
  2.5   computed to provide coverage, to return to Minnesota 
  2.6   policyholders and certificate holders in the form of aggregate 
  2.7   benefits not including anticipated refunds or credits, provided 
  2.8   under the policies or certificates, (1) at least ~~75~~ 78 percent 
  2.9   of the aggregate amount of premiums earned in the case of 
  2.10  policies issued in the small employer market, as defined in 
  2.11  section 62L.02, subdivision 27, calculated on an aggregate 
  2.12  basis; and (2) at least ~~65~~ 68 percent of the aggregate amount of 
  2.13  premiums earned in the case of each policy form or certificate 
  2.14  form issued in the individual market; calculated on the basis of 
  2.15  incurred claims experience or incurred health care expenses 
  2.16  where coverage is provided by a health maintenance organization 
  2.17  on a service rather than reimbursement basis and earned premiums 
  2.18  for the period and according to accepted actuarial principles 
  2.19  and practices.  Assessments by the reinsurance association 
  2.20  created in chapter 62L and any types of taxes, surcharges, or 
  2.21  assessments created by Laws 1992, chapter 549, or created on or 
  2.22  after April 23, 1992, are included in the calculation of 
  2.23  incurred claims experience or incurred health care expenses.  
  2.24  ~~The applicable percentage for policies and certificates issued~~ 
  2.25  ~~in the small employer market, as defined in section 62L.02,~~ 
  2.26  ~~increases by one percentage point on July 1 of each year,~~ 
  2.27  ~~beginning on July 1, 1994, until an 82 percent loss ratio is~~ 
  2.28  ~~reached on July 1, 2000.  The applicable percentage for policy~~ 
  2.29  ~~forms and certificate forms issued in the individual market~~ 
  2.30  ~~increases by one percentage point on July 1 of each year,~~ 
  2.31  ~~beginning on July 1, 1994, until a 72 percent loss ratio is~~ 
  2.32  ~~reached on July 1, 2000.  A health carrier that enters a market~~ 
  2.33  ~~after July 1, 1993, does not start at the beginning of the~~ 
  2.34  ~~phase-in schedule and must instead comply with the loss ratio~~ 
  2.35  ~~requirements applicable to other health carriers in that market~~ 
  2.36  ~~for each time period.~~  Premiums earned and claims incurred in 
  3.1   markets other than the small employer and individual markets are 
  3.2   not relevant for purposes of this section. 
  3.3      Notwithstanding section 645.26, any act enacted at the 1992 
  3.4   regular legislative session that amends or repeals section 
  3.5   62A.135 or that otherwise changes the loss ratios provided in 
  3.6   that section is void. 
  3.7      All filings of rates and rating schedules shall demonstrate 
  3.8   that actual expected claims in relation to premiums comply with 
  3.9   the requirements of this section when combined with actual 
  3.10  experience to date.  Filings of rate revisions shall also 
  3.11  demonstrate that the anticipated loss ratio over the entire 
  3.12  future period for which the revised rates are computed to 
  3.13  provide coverage can be expected to meet the appropriate loss 
  3.14  ratio standards, and aggregate loss ratio from inception of the 
  3.15  policy form or certificate form shall equal or exceed the 
  3.16  appropriate loss ratio standards. 
  3.17     A health carrier that issues health care policies and 
  3.18  certificates to individuals or to small employers, as defined in 
  3.19  section 62L.02, in this state shall file annually its rates, 
  3.20  rating schedule, and supporting documentation including ratios 
  3.21  of incurred losses to earned premiums by policy form or 
  3.22  certificate form duration for approval by the commissioner 
  3.23  according to the filing requirements and procedures prescribed 
  3.24  by the commissioner.  The supporting documentation shall also 
  3.25  demonstrate in accordance with actuarial standards of practice 
  3.26  using reasonable assumptions that the appropriate loss ratio 
  3.27  standards can be expected to be met over the entire period for 
  3.28  which rates are computed.  The demonstration shall exclude 
  3.29  active life reserves.  If the data submitted does not confirm 
  3.30  that the health carrier has satisfied the loss ratio 
  3.31  requirements of this section, the commissioner shall notify the 
  3.32  health carrier in writing of the deficiency.  The health carrier 
  3.33  shall have 30 days from the date of the commissioner's notice to 
  3.34  file amended rates that comply with this section.  If the health 
  3.35  carrier fails to file amended rates within the prescribed time, 
  3.36  the commissioner shall order that the health carrier's filed 
  4.1   rates for the nonconforming policy form or certificate form be 
  4.2   reduced to an amount that would have resulted in a loss ratio 
  4.3   that complied with this section had it been in effect for the 
  4.4   reporting period of the supplement.  The health carrier's 
  4.5   failure to file amended rates within the specified time or the 
  4.6   issuance of the commissioner's order amending the rates does not 
  4.7   preclude the health carrier from filing an amendment of its 
  4.8   rates at a later time.  The commissioner shall annually make the 
  4.9   submitted data available to the public at a cost not to exceed 
  4.10  the cost of copying.  The data must be compiled in a form useful 
  4.11  for consumers who wish to compare premium charges and loss 
  4.12  ratios. 
  4.13     Each sale of a policy or certificate that does not comply 
  4.14  with the loss ratio requirements of this section is an unfair or 
  4.15  deceptive act or practice in the business of insurance and is 
  4.16  subject to the penalties in sections 72A.17 to 72A.32. 
  4.17     For purposes of this section, health care policies issued 
  4.18  as a result of solicitations of individuals through the mail or 
  4.19  mass media advertising, including both print and broadcast 
  4.20  advertising, shall be treated as individual policies.  
  4.21     For purposes of this section, (1) "health care policy" or 
  4.22  "health care certificate" is a health plan as defined in section 
  4.23  62A.011; and (2) "health carrier" has the meaning given in 
  4.24  section 62A.011 and includes all health carriers delivering or 
  4.25  issuing for delivery health care policies or certificates in 
  4.26  this state or offering these policies or certificates to 
  4.27  residents of this state.  
  4.28     Sec. 2.  Minnesota Statutes 1996, section 62Q.165, is 
  4.29  amended to read: 
  4.30     62Q.165 [UNIVERSAL ~~COVERAGE~~ ACCESS.] 
  4.31     Subdivision 1.  [DEFINITION.] It is the commitment of the 
  4.32  state to achieve universal access to health coverage for all 
  4.33  Minnesotans.  Universal access to health coverage is achieved 
  4.34  when: 
  4.35     (1) every Minnesotan has access to a full range of quality 
  4.36  health care services; 
  5.1      (2) every Minnesotan is able to obtain affordable health 
  5.2   coverage which pays for the full range of services, including 
  5.3   preventive and primary care; and 
  5.4      (3) every Minnesotan pays into the health care system 
  5.5   according to that person's ability.  
  5.6      Subd. 2.  [GOAL.] It is the goal of the state to make 
  5.7   continuous progress toward reducing the number of Minnesotans 
  5.8   who do not have health coverage so that by January 1, 2000, 
  5.9   fewer than four percent of the state's population will be 
  5.10  without health coverage.  The goal will be achieved by improving 
  5.11  access to private health coverage through insurance reforms and 
  5.12  market reforms, by making health coverage more affordable for 
  5.13  low-income Minnesotans through purchasing pools and state 
  5.14  subsidies, and by reducing the cost of health coverage through 
  5.15  cost containment programs and methods of ensuring that all 
  5.16  Minnesotans are paying into the system according to their 
  5.17  ability. 
  5.18     Subd. 3.  [REPORT ON HEALTH CARE ACCESS.] (a) The health 
  5.19  care commission shall annually report to the legislature 
  5.20  regarding the extent to which the state is making progress 
  5.21  toward the goal of universal access to health coverage described 
  5.22  in this section.  As part of this report, the commission shall 
  5.23  monitor the number of uninsured in the state.  The annual report 
  5.24  must be submitted no later than January 15 of each year in 
  5.25  compliance with section 3.195. 
  5.26     ~~(b) The annual report required under paragraph (a), due~~ 
  5.27  ~~January 15, 1996, shall advise the legislature regarding~~ 
  5.28  ~~possible additional steps in insurance reform that would be~~ 
  5.29  ~~helpful in progressing toward universal coverage.  The~~ 
  5.30  ~~commission shall consider further initiatives involving group~~ 
  5.31  ~~purchasing pools, narrowing premium variations, guaranteed issue~~ 
  5.32  ~~and portability requirements, preexisting condition limitations,~~ 
  5.33  ~~and other provisions that provide greater opportunities to~~ 
  5.34  ~~obtain affordable health coverage.  The commission shall~~ 
  5.35  ~~consider the small employer reforms contained in the model laws~~ 
  5.36  ~~recommended by the National Association of Insurance~~ 
  6.1   ~~Commissioners and shall recommend whether these reforms should~~ 
  6.2   ~~be adopted.~~  
  6.3      ~~(c) The annual report due required under paragraph (a),~~ 
  6.4   ~~required on January 15, 1996, shall advise the legislature~~ 
  6.5   ~~regarding possible changes in the individual insurance market.~~  
  6.6   ~~The report shall consider initiatives regarding purchasing~~ 
  6.7   ~~pools, including specific design details of a state-run or~~ 
  6.8   ~~state-initiated purchasing pool for individuals, specific~~ 
  6.9   ~~legislative reforms needed to encourage the formation of~~ 
  6.10  ~~purchasing pools, and point-by-point consideration of the~~ 
  6.11  ~~obstacles to enactment of these purchasing pools, including~~ 
  6.12  ~~adverse selection.  The report shall consider the creation of a~~ 
  6.13  ~~standard and objective definition of eligibility for the~~ 
  6.14  ~~comprehensive health association, and whether the enactment of~~ 
  6.15  ~~such a definition could be coupled with guaranteed issuance for~~ 
  6.16  ~~the remainder of the individual market.  The report should~~ 
  6.17  ~~include all other considerations of the commission as to the~~ 
  6.18  ~~optimal reforms of the individual market.~~ 
  6.19     ~~(d)~~ (b) The health care commission shall in its annual 
  6.20  report make recommendations regarding any steps toward achieving 
  6.21  universal access to health coverage that became feasible as a 
  6.22  result of changes in federal law that remove barriers to state 
  6.23  efforts to expand health care access. 
  6.24     ~~(e)~~ (c) To the extent possible, the health care commission 
  6.25  shall utilize existing information, including information 
  6.26  collected by other state or federal agencies and organizations, 
  6.27  to complete the studies and reports in this subdivision.  State 
  6.28  agencies and organizations shall provide information, technical 
  6.29  and analytic support, and other assistance to the commission as 
  6.30  possible, to ensure the timely and efficient completion of the 
  6.31  studies and reports in this subdivision.  Staff from the 
  6.32  appropriate state agencies shall participate with the commission 
  6.33  executive director no later than June 15 each year in initial 
  6.34  planning and coordination for the annual reports and studies of 
  6.35  this subdivision.  Following this initial planning, the 
  6.36  executive director shall report to the legislative oversight 
  7.1   commission on health care access by July 1 each year on the 
  7.2   initial study plan, and on any commission tasks or studies which 
  7.3   may not be completed as scheduled due to such constraints as 
  7.4   lack of sufficient available information or resources. 
  7.5      Sec. 3.  [62Q.181] [WRITTEN CERTIFICATION OF COVERAGE.] 
  7.6      A health plan company shall provide the written 
  7.7   certifications of coverage required under United States Code, 
  7.8   title 42, sections 300gg and 300gg-43, as amended through 
  7.9   November 1996.  This section applies only to coverage that is 
  7.10  subject to regulation under state law and only to the extent 
  7.11  that the certification of coverage is required under federal 
  7.12  law.  The commissioner shall enforce this section. 
  7.13     Sec. 4.  [62Q.471] [PARITY IN LIMITS TO MENTAL HEALTH AND 
  7.14  CHEMICAL DEPENDENCY BENEFITS.] 
  7.15     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  7.16  section, the following terms have the meanings given them. 
  7.17     (b) "Aggregate lifetime limit" means a dollar limitation on 
  7.18  the total amount of benefits under a health plan that may be 
  7.19  paid with respect to an individual or other coverage unit. 
  7.20     (c) "Annual limit" means a dollar limitation on the total 
  7.21  amount of benefits under a health plan that may be paid in a 
  7.22  12-month period with respect to an individual or other coverage 
  7.23  unit. 
  7.24     (d) "Medical or surgical benefit" means a benefit with 
  7.25  respect to a medical or surgical service, as defined under the 
  7.26  terms of a health plan, but does not include a mental health 
  7.27  benefit or a chemical dependency benefit. 
  7.28     (e) "Mental health benefit" means a benefit with respect to 
  7.29  a mental health service, as defined under the terms of a health 
  7.30  plan. 
  7.31     (f) "Chemical dependency benefit" means a benefit with 
  7.32  respect to the treatment of substance abuse or chemical 
  7.33  dependency, as defined under the terms of a health plan. 
  7.34     Subd. 2.  [REQUIREMENT.] (a) A health plan that provides 
  7.35  medical and surgical benefits and mental health or chemical 
  7.36  dependency benefits, or both, shall comply with the following 
  8.1   requirements: 
  8.2      (1) if the health plan does not include an aggregate 
  8.3   lifetime limit on substantially all medical and surgical 
  8.4   benefits, the health plan may not impose an aggregate lifetime 
  8.5   limit on mental health or chemical dependency benefits; 
  8.6      (2) if the health plan includes an aggregate lifetime limit 
  8.7   on substantially all medical and surgical benefits, the health 
  8.8   plan shall either: 
  8.9      (i) apply the aggregate lifetime limit to both medical and 
  8.10  surgical benefits to which it otherwise would apply and mental 
  8.11  health or chemical dependency benefits, without distinguishing, 
  8.12  in the application of the limit, between the medical and 
  8.13  surgical benefits and the mental health or chemical dependency 
  8.14  benefits; or 
  8.15     (ii) not include an aggregate lifetime limit on mental 
  8.16  health or chemical dependency benefits that is less than the 
  8.17  aggregate lifetime limit applicable to medical and surgical 
  8.18  benefits; 
  8.19     (3) in the case of a health plan that is not described in 
  8.20  clause (1) or (2) and that includes no or different aggregate 
  8.21  lifetime limits on different categories of medical and surgical 
  8.22  benefits, the health plan shall comply with regulations adopted 
  8.23  by the federal Secretary of Health and Human Services relating 
  8.24  to aggregate lifetime limits on mental health and chemical 
  8.25  dependency benefits; 
  8.26     (4) if the health plan does not include an annual limit on 
  8.27  substantially all medical and surgical benefits, the health plan 
  8.28  may not impose an annual limit on mental health or chemical 
  8.29  dependency benefits; 
  8.30     (5) if the health plan includes an annual limit on 
  8.31  substantially all medical and surgical benefits, the health plan 
  8.32  shall either: 
  8.33     (i) apply the annual limit to both medical and surgical 
  8.34  benefits to which it otherwise would apply and mental health or 
  8.35  chemical dependency benefits, without distinguishing, in the 
  8.36  application of the limit, between the medical and surgical 
  9.1   benefits and the mental health or chemical dependency benefits; 
  9.2   or 
  9.3      (ii) not include an annual limit on mental health or 
  9.4   chemical dependency benefits that is less than the annual limit 
  9.5   applicable to medical and surgical benefits; and 
  9.6      (6) in the case of a health plan that is not described in 
  9.7   clause (4) or (5) and that includes no or different annual 
  9.8   limits on different categories of medical and surgical benefits, 
  9.9   the health plan shall comply with regulations adopted by the 
  9.10  federal Secretary of Health and Human Services relating to 
  9.11  annual limits on mental health and chemical dependency benefits. 
  9.12     Subd. 3.  [CONSTRUCTION.] Nothing in this section shall be 
  9.13  construed: 
  9.14     (1) as requiring a health plan to provide any mental health 
  9.15  or chemical dependency benefits; or 
  9.16     (2) in the case of a health plan that provides mental 
  9.17  health or chemical dependency benefits, as affecting the terms 
  9.18  and conditions relating to the amount, duration, or scope of 
  9.19  mental health or chemical dependency benefits under the health 
  9.20  plan, except as specifically provided in subdivision 1. 
  9.21     Subd. 4.  [EXEMPTIONS.] (a) This section does not apply to 
  9.22  a health plan of a small employer as defined in section 62L.02, 
  9.23  subdivision 26. 
  9.24     (b) This section does not apply to mental health benefits 
  9.25  provided under a health plan if the provision of mental health 
  9.26  benefits in accordance with this section results in an increase 
  9.27  in the cost under the health plan of at least one percent. 
  9.28     (c) This section does not apply to chemical dependency 
  9.29  benefits provided under a health plan if the provision of 
  9.30  chemical dependency benefits in accordance with this section 
  9.31  results in an increase in the cost under the health plan of at 
  9.32  least one percent. 
  9.33     Subd. 5.  [SEPARATE APPLICATION TO EACH OPTION OFFERED.] In 
  9.34  the case of a health plan that offers a participant or 
  9.35  beneficiary two or more benefit package options under the health 
  9.36  plan, the requirements of this section shall be applied 
 10.1   separately with respect to each such option. 
 10.2      Subd. 6.  [SUNSET.] This section shall not apply to 
 10.3   benefits for services furnished on or after September 30, 2001. 
 10.4      Sec. 5.  Minnesota Statutes 1996, section 256.9355, 
 10.5   subdivision 2, is amended to read: 
 10.6      Subd. 2.  [COMMISSIONER'S DUTIES.] The commissioner shall 
 10.7   use individuals' social security numbers as identifiers for 
 10.8   purposes of administering the plan and conduct data matches to 
 10.9   verify income.  Applicants shall submit evidence of family 
 10.10  income, earned and unearned, including the most recent income 
 10.11  tax return and any form W-2 wage and tax statements, wage slips, 
 10.12  or other documentation that is necessary to verify income 
 10.13  eligibility.  The commissioner shall perform random audits to 
 10.14  verify reported income and eligibility.  The commissioner may 
 10.15  execute data sharing arrangements with the department of revenue 
 10.16  and any other governmental agency in order to perform income 
 10.17  verification related to eligibility and premium payment under 
 10.18  the MinnesotaCare program. 
 10.19     Sec. 6.  Minnesota Statutes 1996, section 256.9357, 
 10.20  subdivision 1, is amended to read: 
 10.21     Subdivision 1.  [GENERAL REQUIREMENTS.] Families and 
 10.22  individuals who enroll on or after October 1, 1992, are eligible 
 10.23  for subsidized premium payments based on a sliding scale under 
 10.24  section 256.9358 only if the family or individual meets the 
 10.25  requirements in subdivisions 2 and 3.  Children already enrolled 
 10.26  in the children's health plan as of September 30, 1992, eligible 
 10.27  under section 256.9354, subdivision 1, paragraph (a), children 
 10.28  who enroll in the MinnesotaCare program after September 30, 
 10.29  1992, pursuant to Laws 1992, chapter 549, article 4, section 17, 
 10.30  and children who enroll under section 256.9354, subdivision 4a, 
 10.31  are eligible for subsidized premium payments without meeting 
 10.32  these requirements, as long as they maintain continuous coverage 
 10.33  in the MinnesotaCare plan or medical assistance.  
 10.34     Families and individuals who initially enrolled in 
 10.35  MinnesotaCare under ~~section~~ sections 256.9354 or 256.9366, and 
 10.36  whose income increases above the limits established in ~~section~~ 
 11.1   sections 256.9358 and 256.9366, ~~may continue enrollment and pay~~ 
 11.2   ~~the full cost of coverage~~ are not eligible for the program and 
 11.3   shall be disenrolled by the commissioner.  MinnesotaCare 
 11.4   coverage terminates the last day of the calendar month following 
 11.5   the month in which the commissioner determines that the income 
 11.6   of a family or individual, determined over a four-month period 
 11.7   as required by section 256.9358, exceeds program income limits. 
 11.8      Sec. 7.  Minnesota Statutes 1996, section 289A.09, is 
 11.9   amended by adding a subdivision to read: 
 11.10     Subd. 4.  [EMPLOYER-SUBSIDIZED HEALTH COVERAGE.] An 
 11.11  employer required to deduct and withhold tax under section 
 11.12  290.92 shall report to the employee on the form required by 
 11.13  section 6051 of the Internal Revenue Code whether the employer 
 11.14  provides the employee with access to employer-subsidized health 
 11.15  coverage, as defined in section 256.9357, subdivision 2.  The 
 11.16  commissioner shall provide employers with instructions for 
 11.17  complying with this subdivision. 
 11.18     Sec. 8.  [REPEALER.] 
 11.19     (a) Minnesota Statutes 1996, sections 62J.04; 62J.041; 
 11.20  62J.042; 62J.17; 62J.22; 62J.322; 62J.37; and 62L.09, 
 11.21  subdivision 3, are repealed. 
 11.22     (b) Minnesota Statutes 1996, section 62Q.47, is repealed. 
 11.23     Sec. 9.  [EFFECTIVE DATES.] 
 11.24     (a) Sections 1 and 3 are effective July 1, 1997. 
 11.25     (b) Section 2 is effective the day following final 
 11.26  enactment. 
 11.27     (c) Section 4 applies to health plans issued or renewed on 
 11.28  or after January 1, 1998. 
 11.29     (d) Sections 5 and 7 are effective for tax years beginning 
 11.30  on or after January 1, 1997. 
 11.31     (e) Section 6 is effective January 1, 1998, and applies to 
 11.32  all persons enrolled in or applying for the MinnesotaCare 
 11.33  program on or after that date.  When calculating income over a 
 11.34  four-month period for purposes of implementing section 5, the 
 11.35  commissioner of human services shall, to the extent applicable, 
 11.36  extend the four-month period back to September 1, 1997. 
 12.1      (f) Section 8, paragraph (a), is effective the day 
 12.2   following final enactment.  Section 8, paragraph (b), is 
 12.3   effective January 1, 1998. 
 12.4                              ARTICLE 2
 12.5                         INTEGRATED NETWORKS
 12.6      Section 1.  Minnesota Statutes 1996, section 62J.017, is 
 12.7   amended to read: 
 12.8      62J.017 [IMPLEMENTATION TIMETABLE.] 
 12.9      The state seeks to complete the restructuring of the health 
 12.10  care delivery and financing system.  Beginning July 1, 1994, 
 12.11  measures will be taken to increase the public accountability of 
 12.12  existing health plan companies, to promote the development of 
 12.13  small, community-based integrated service networks, and to 
 12.14  reduce administrative costs by standardizing third-party billing 
 12.15  forms and procedures and utilization review requirements.  
 12.16  ~~Voluntary formation of other integrated service networks will~~ 
 12.17  ~~begin after rules have been adopted, but not before July 1,~~ 
 12.18  ~~1996.  Statutes and rules for the restructured health care~~ 
 12.19  ~~financing and delivery system must be enacted or adopted by~~ 
 12.20  ~~January 1, 1996.~~ 
 12.21     Sec. 2.  Minnesota Statutes 1996, section 62Q.30, is 
 12.22  amended to read: 
 12.23     62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION 
 12.24  PROCESS.] 
 12.25     The commissioner shall establish an expedited fact finding 
 12.26  and dispute resolution process to assist enrollees of health 
 12.27  plan companies with contested treatment, coverage, and service 
 12.28  issues to be in effect July 1, 1997.  ~~The commissioner may order~~ 
 12.29  ~~an integrated service network or an all-payer insurer to provide~~ 
 12.30  ~~or pay for a service that is within the standard health~~ 
 12.31  ~~coverage.~~  If the disputed issue relates to whether a service is 
 12.32  appropriate and necessary, the commissioner shall issue an order 
 12.33  only after consulting with appropriate experts knowledgeable, 
 12.34  trained, and practicing in the area in dispute, reviewing 
 12.35  pertinent literature, and considering the availability of 
 12.36  satisfactory alternatives.  The commissioner shall take steps 
 13.1   including but not limited to fining, suspending, or revoking the 
 13.2   license of a health plan company that is the subject of repeated 
 13.3   orders by the commissioner that suggests a pattern of 
 13.4   inappropriate underutilization. 
 13.5      Sec. 3.  [INSTRUCTION TO REVISOR.] 
 13.6      In the next edition of Minnesota Statutes, the revisor of 
 13.7   statutes shall strike references to "integrated service 
 13.8   networks" and similar terms, but shall retain references to 
 13.9   "community integrated service networks" and shall make any 
 13.10  necessary grammatical changes consistent with this directive. 
 13.11     Sec. 4.  [REPEALER.] 
 13.12     Minnesota Statutes 1996, sections 62N.01; 62N.02, 
 13.13  subdivisions 4b, 4c, 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 
 13.14  62N.06; 62N.065; 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 
 13.15  62N.077; 62N.078; 62N.10; 62N.11; 62N.12; 62N.13; 62N.14; 
 13.16  62N.15; 62N.17; 62N.18; 62N.38; and 62Q.41, are repealed. 
 13.17     Sec. 5.  [EFFECTIVE DATE.] 
 13.18     Sections 1 to 4 are effective the day following final 
 13.19  enactment. 
 13.20                             ARTICLE 3
 13.21             MINNESOTA COMPREHENSIVE HEALTH ASSOCIATION
 13.22     Section 1.  Minnesota Statutes 1996, section 62A.045, is 
 13.23  amended to read: 
 13.24     62A.045 [PAYMENTS ON BEHALF OF WELFARE RECIPIENTS.] 
 13.25     (a) No health plan issued or renewed to provide coverage to 
 13.26  a Minnesota resident shall contain any provision denying or 
 13.27  reducing benefits because services are rendered to a person who 
 13.28  is eligible for or receiving medical benefits pursuant to title 
 13.29  XIX of the Social Security Act (Medicaid) in this or any other 
 13.30  state; chapter 256; 256B; or 256D or services pursuant to 
 13.31  section 252.27; 256.9351 to 256.9361; 260.251, subdivision 1a; 
 13.32  or 393.07, subdivision 1 or 2.  No health carrier providing 
 13.33  benefits under plans covered by this section shall use 
 13.34  eligibility for medical programs named in this section as an 
 13.35  underwriting guideline or reason for nonacceptance of the risk. 
 13.36     (b) If payment for covered expenses has been made under 
 14.1   state medical programs for health care items or services 
 14.2   provided to an individual, and a third party has a legal 
 14.3   liability to make payments, the rights of payment and appeal of 
 14.4   an adverse coverage decision for the individual, or in the case 
 14.5   of a child their responsible relative or caretaker, will be 
 14.6   subrogated to the state and/or its authorized agent.  
 14.7      (c) Notwithstanding any law to the contrary, when a person 
 14.8   covered by a health plan receives medical benefits according to 
 14.9   any statute listed in this section, payment for covered services 
 14.10  or notice of denial for services billed by the provider must be 
 14.11  issued directly to the provider.  If a person was receiving 
 14.12  medical benefits through the department of human services at the 
 14.13  time a service was provided, the provider must indicate this 
 14.14  benefit coverage on any claim forms submitted by the provider to 
 14.15  the health carrier for those services.  If the commissioner of 
 14.16  human services notifies the health carrier that the commissioner 
 14.17  has made payments to the provider, payment for benefits or 
 14.18  notices of denials issued by the health carrier must be issued 
 14.19  directly to the commissioner.  Submission by the department to 
 14.20  the health carrier of the claim on a department of human 
 14.21  services claim form is proper notice and shall be considered 
 14.22  proof of payment of the claim to the provider and supersedes any 
 14.23  contract requirements of the health carrier relating to the form 
 14.24  of submission.  Liability to the insured for coverage is 
 14.25  satisfied to the extent that payments for those benefits are 
 14.26  made by the health carrier to the provider or the commissioner 
 14.27  as required by this section. 
 14.28     (d) When a state agency has acquired the rights of an 
 14.29  individual eligible for medical programs named in this section 
 14.30  and has health benefits coverage through a health carrier, the 
 14.31  health carrier shall not impose requirements that are different 
 14.32  from requirements applicable to an agent or assignee of any 
 14.33  other individual covered. 
 14.34     (e) For the purpose of this section, health plan includes 
 14.35  coverage offered by integrated service networks, community 
 14.36  integrated service networks, any plan governed under the federal 
 15.1   Employee Retirement Income Security Act of 1974 (ERISA), United 
 15.2   States Code, title 29, sections 1001 to 1461, and coverage 
 15.3   offered under the exclusions listed in section 62A.011, 
 15.4   subdivision 3, clauses (2), (6), (9), (10), and (12).  This 
 15.5   section does not apply to coverage issued by the Minnesota 
 15.6   comprehensive health association. 
 15.7      Sec. 2.  Minnesota Statutes 1996, section 62E.02, 
 15.8   subdivision 13, is amended to read: 
 15.9      Subd. 13.  [ELIGIBLE PERSON.] (a) "Eligible person" means 
 15.10  an individual who: 
 15.11     (1) is currently and has been a resident of Minnesota for 
 15.12  the six months immediately preceding the date of receipt by the 
 15.13  association or its writing carrier of a completed certificate of 
 15.14  eligibility; 
 15.15     (2) is not enrolled in medical assistance under chapter 
 15.16  256B or 256D; and 
 15.17     ~~who~~ (3) meets the enrollment requirements of section 62E.14.
 15.18     (b) Individuals who, prior to July 1, 1997, were both 
 15.19  enrolled in medical assistance under chapter 256B or 256D and 
 15.20  covered under a qualified or Medicare supplement plan issued by 
 15.21  the association, remain eligible for a fiscal year only if the 
 15.22  commissioner of finance, upon consultation with the association, 
 15.23  has determined by June 15 of the preceding fiscal year that the 
 15.24  legislature has appropriated sufficient funds to the association 
 15.25  to cover the individuals' total administrative and claims costs, 
 15.26  net of premiums paid, for the upcoming fiscal year. 
 15.27     Sec. 3.  Minnesota Statutes 1996, section 62E.04, 
 15.28  subdivision 8, is amended to read: 
 15.29     Subd. 8.  [REDUCTION OF BENEFITS BECAUSE OF OTHER 
 15.30  SERVICES.] No policy of accident and health insurance shall 
 15.31  contain any provision denying or reducing benefits because 
 15.32  services are rendered to an insured or dependent who is eligible 
 15.33  for or receiving benefits pursuant to chapters 256B and 256D, or 
 15.34  sections 252.27; 260.251, subdivision 1a; 393.07, subdivision 1 
 15.35  or 2.  This subdivision does not apply to coverage issued by the 
 15.36  Minnesota comprehensive health association. 
 16.1      Sec. 4.  Minnesota Statutes 1996, section 256B.056, 
 16.2   subdivision 8, is amended to read: 
 16.3      Subd. 8.  [COOPERATION.] To be eligible for medical 
 16.4   assistance, applicants and recipients must cooperate with the 
 16.5   state and local agency to identify potentially liable 
 16.6   third-party payers and assist the state in obtaining third party 
 16.7   payments, unless good cause for noncooperation is determined 
 16.8   according to Code of Federal Regulations, title 42, part 
 16.9   433.147.  "Cooperation" includes identifying any third party who 
 16.10  may be liable for care and services provided under this chapter 
 16.11  to the applicant, recipient, or any other family member for whom 
 16.12  application is made and providing relevant information to assist 
 16.13  the state in pursuing a potentially liable third party.  
 16.14  Cooperation also includes providing information about a group 
 16.15  health plan for which the person may be eligible and if the plan 
 16.16  is determined cost-effective by the state agency and premiums 
 16.17  are paid by the local agency or there is no cost to the 
 16.18  recipient, they must enroll or remain enrolled with the 
 16.19  group.  For purposes of this subdivision, coverage provided by 
 16.20  the Minnesota comprehensive health association under chapter 62E 
 16.21  shall not be considered group health plan coverage or 
 16.22  cost-effective, nor shall the association be considered a 
 16.23  potentially liable third-party payer, by the state and local 
 16.24  agency.  Cost-effective insurance premiums approved for payment 
 16.25  by the state agency and paid by the local agency are eligible 
 16.26  for reimbursement according to section 256B.19. 
 16.27     Sec. 5.  Minnesota Statutes 1996, section 256B.0625, 
 16.28  subdivision 15, is amended to read: 
 16.29     Subd. 15.  [HEALTH PLAN PREMIUMS AND COPAYMENTS.] (a) 
 16.30  Medical assistance covers health care prepayment plan premiums, 
 16.31  insurance premiums, and copayments if determined to be 
 16.32  cost-effective by the commissioner.  For purposes of obtaining 
 16.33  Medicare part A and part B, and copayments, expenditures may be 
 16.34  made even if federal funding is not available. 
 16.35     (b) The state and local agency shall not pay premiums, 
 16.36  deductibles, coinsurance, or copayments that a recipient is 
 17.1   required to pay under a qualified or Medicare supplement plan 
 17.2   issued by the Minnesota comprehensive health association. 
 17.3      (c) Paragraph (b) shall not apply in a fiscal year to 
 17.4   recipients covered under a qualified or Medicare supplement plan 
 17.5   issued by the Minnesota comprehensive health association prior 
 17.6   to July 1, 1997, and enrolled in medical assistance prior to 
 17.7   that date, if the commissioner of finance, upon consultation 
 17.8   with the association, has determined by June 15 of the preceding 
 17.9   fiscal year that the legislature has appropriated sufficient 
 17.10  funds to the association to cover all such recipients' total 
 17.11  administrative and claims costs, net of premiums paid, for the 
 17.12  upcoming fiscal year. 
 17.13     Sec. 6.  Minnesota Statutes 1996, section 256D.03, 
 17.14  subdivision 3b, is amended to read: 
 17.15     Subd. 3b.  [COOPERATION.] (a) General assistance or general 
 17.16  assistance medical care applicants and recipients must cooperate 
 17.17  with the state and local agency to identify potentially liable 
 17.18  third-party payors and assist the state in obtaining third-party 
 17.19  payments.  Cooperation includes identifying any third party who 
 17.20  may be liable for care and services provided under this chapter 
 17.21  to the applicant, recipient, or any other family member for whom 
 17.22  application is made and providing relevant information to assist 
 17.23  the state in pursuing a potentially liable third party.  General 
 17.24  assistance medical care applicants and recipients must cooperate 
 17.25  by providing information about any group health plan in which 
 17.26  they may be eligible to enroll.  They must cooperate with the 
 17.27  state and local agency in determining if the plan is 
 17.28  cost-effective.  For purposes of this subdivision, coverage 
 17.29  provided by the Minnesota comprehensive health association under 
 17.30  chapter 62E shall not be considered group health plan coverage 
 17.31  or cost-effective, nor shall the association be considered a 
 17.32  potentially liable third-party payer, by the state and local 
 17.33  agency.  If the plan is determined cost-effective and the 
 17.34  premium will be paid by the state or local agency or is 
 17.35  available at no cost to the person, they must enroll or remain 
 17.36  enrolled in the group health plan.  Cost-effective insurance 
 18.1   premiums approved for payment by the state agency and paid by 
 18.2   the local agency are eligible for reimbursement according to 
 18.3   subdivision 6.  
 18.4      (b) The state and local agency shall not pay premiums, 
 18.5   deductibles, coinsurance, or copayments that a recipient is 
 18.6   required to pay under a qualified or Medicare supplement plan 
 18.7   issued by the Minnesota comprehensive health association. 
 18.8      (c) Paragraph (b) shall not apply in a fiscal year to 
 18.9   recipients covered under a qualified or Medicare supplement plan 
 18.10  issued by the Minnesota comprehensive health association prior 
 18.11  to July 1, 1997, and enrolled in medical assistance prior to 
 18.12  that date, if the commissioner of finance, upon consultation 
 18.13  with the association, has determined by June 15 of the preceding 
 18.14  fiscal year that the legislature has appropriated sufficient 
 18.15  funds to the association to cover all such recipients' total 
 18.16  administrative and claims costs, net of premiums paid, for the 
 18.17  upcoming fiscal year. 
 18.18     Sec. 7.  [EFFECTIVE DATE; APPLICATION.] 
 18.19     Sections 1 to 6 are effective July 1, 1997, but do not 
 18.20  apply to persons enrolled in both medical assistance and the 
 18.21  Minnesota comprehensive health association prior to that date. 
 18.22                             ARTICLE 4
 18.23                 REVIEW OF HEALTH COVERAGE MANDATES
 18.24     Section 1.  [62A.3099] [ASSESSMENT OF PROPOSED HEALTH 
 18.25  COVERAGE MANDATES.] 
 18.26     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 18.27  section, the following terms have the meanings given them. 
 18.28     (b) "Mandated health benefit proposal" means a proposal 
 18.29  that would statutorily require a health plan to: 
 18.30     (1) provide coverage, or increase the amount of coverage, 
 18.31  for the treatment of a particular disease, condition, or other 
 18.32  health care need; or 
 18.33     (2) provide coverage, or increase the amount of coverage, 
 18.34  for a particular type of health care treatment or service or for 
 18.35  equipment, supplies, or drugs used in connection with a health 
 18.36  care treatment or service. 
 19.1      (c) "Commissioner" means the commissioner of health. 
 19.2      (d) "Health plan" means a health plan as defined in section 
 19.3   62A.011, subdivision 3, including the coverage under clauses (7) 
 19.4   and (10). 
 19.5      Subd. 2.  [MANDATED HEALTH BENEFIT ASSESSMENT PROCESS.] The 
 19.6   commissioner of health, in consultation with the commissioners 
 19.7   of commerce, human services, and employee relations, shall 
 19.8   establish and administer a process for the review, assessment, 
 19.9   and cost benefit analysis of a mandated health benefit 
 19.10  proposal.  The purpose of the process is to provide the 
 19.11  legislature with a cost benefit analysis of the social and 
 19.12  financial impact of a mandated health benefit proposal before 
 19.13  legislative action is taken.  
 19.14     Subd. 3.  [REQUESTS FOR ASSESSMENT.] Whenever a legislative 
 19.15  measure containing a mandated health benefit proposal is 
 19.16  introduced as a bill or offered as an amendment to a bill, or is 
 19.17  likely to be introduced or offered as an amendment, the chairs 
 19.18  of the standing committees having jurisdiction over the proposal 
 19.19  shall request that the commissioner complete an assessment of 
 19.20  the proposal prior to any committee action by either house of 
 19.21  the legislature.  A person or organization may also request that 
 19.22  the commissioner complete an assessment.  If multiple requests 
 19.23  are received, the commissioner shall consult with the chairs of 
 19.24  the standing legislative committees having jurisdiction over 
 19.25  mandated health benefit proposals to prioritize the requests. 
 19.26     Subd. 4.  [ASSESSMENT OF PROPOSED MANDATES; REPORT TO THE 
 19.27  LEGISLATURE.] The commissioner shall conduct an assessment of 
 19.28  each mandated health benefit proposal selected for assessment 
 19.29  and submit a report to the legislature no later than 180 days 
 19.30  after the request.  The commissioner shall, in consultation with 
 19.31  the chairs of the standing committees having jurisdiction over 
 19.32  the proposal, develop a reporting date for each proposal to be 
 19.33  assessed.  If the commissioners of health and commerce determine 
 19.34  that the assessment of a particular mandated health benefit 
 19.35  proposal should be completed entirely or in part by the 
 19.36  commissioner of commerce, the commissioners may agree to have 
 20.1   the commissioner of commerce complete the assessment and submit 
 20.2   the report to the legislature.  The commissioner responsible for 
 20.3   completing an assessment may seek the assistance and advice of 
 20.4   consultants, contractors, researchers, or other persons or 
 20.5   organizations with relevant expertise and may request advice or 
 20.6   analysis from the health technology advisory committee. 
 20.7      Subd. 5.  [NONLEGISLATIVE SOLUTIONS.] If, in the course of 
 20.8   reviewing a mandated health benefit proposal, the commissioner 
 20.9   determines that the problem can be solved without legislation 
 20.10  through the exercise of existing state regulatory authority or 
 20.11  other actions, the commissioner may take action to resolve the 
 20.12  problem.  The commissioner shall inform the chairs of the 
 20.13  standing committees having jurisdiction over the mandated health 
 20.14  benefit proposal of any nonlegislative action taken. 
 20.15     Subd. 6.  [PUBLIC HEARINGS.] The commissioner shall solicit 
 20.16  comments and recommendations on a mandated health benefit 
 20.17  proposal from interested persons and organizations and may 
 20.18  schedule public hearings.  The commissioner shall also seek the 
 20.19  comments and recommendations of representatives of health care 
 20.20  consumers and employers.  The commissioner shall summarize the 
 20.21  comments and recommendations received in the commissioner's 
 20.22  report to the legislature. 
 20.23     Subd. 7.  [ADVICE AND RECOMMENDATIONS OF THE MINNESOTA 
 20.24  HEALTH CARE COMMISSION.] The commissioner shall seek the advice 
 20.25  and recommendations of the Minnesota health care commission 
 20.26  regarding a mandated health benefit proposal and shall include a 
 20.27  summary of the commission's advice and recommendations in the 
 20.28  commissioner's report to the legislature. 
 20.29     Sec. 2.  [APPROPRIATION.] 
 20.30     $....... is appropriated from the state government special 
 20.31  revenue fund to the commissioner of health to establish and 
 20.32  administer the review process established in section 62A.3099.  
 20.33  The appropriation is available until June 30, 1999. 
 20.34                             ARTICLE 5 
 20.35                       CONFORMING AMENDMENTS 
 20.36     Section 1.  Minnesota Statutes 1996, section 60A.951, 
 21.1   subdivision 5, is amended to read: 
 21.2      Subd. 5.  [INSURER.] "Insurer" means insurance company, 
 21.3   risk retention group as defined in section 60E.02, service plan 
 21.4   corporation as defined in section 62C.02, health maintenance 
 21.5   organization as defined in section 62D.02, ~~integrated service~~ 
 21.6   ~~network as defined in section 62N.02,~~ fraternal benefit society 
 21.7   regulated under chapter 64B, township mutual company regulated 
 21.8   under chapter 67A, joint self-insurance plan or multiple 
 21.9   employer trust regulated under chapter 60F, 62H, or section 
 21.10  471.617, subdivision 2, persons administering a self-insurance 
 21.11  plan as defined in section 60A.23, subdivision 8, clause (2), 
 21.12  paragraphs (a) and (d), and the workers' compensation 
 21.13  reinsurance association established in section 79.34. 
 21.14     Sec. 2.  Minnesota Statutes 1996, section 62A.65, 
 21.15  subdivision 3, is amended to read: 
 21.16     Subd. 3.  [PREMIUM RATE RESTRICTIONS.] No individual health 
 21.17  plan may be offered, sold, issued, or renewed to a Minnesota 
 21.18  resident unless the premium rate charged is determined in 
 21.19  accordance with the following requirements:  
 21.20     (a) Premium rates must be no more than 25 percent above and 
 21.21  no more than 25 percent below the index rate charged to 
 21.22  individuals for the same or similar coverage, adjusted pro rata 
 21.23  for rating periods of less than one year.  The premium 
 21.24  variations permitted by this paragraph must be based only upon 
 21.25  health status, claims experience, and occupation.  For purposes 
 21.26  of this paragraph, health status includes refraining from 
 21.27  tobacco use or other actuarially valid lifestyle factors 
 21.28  associated with good health, provided that the lifestyle factor 
 21.29  and its effect upon premium rates have been determined by the 
 21.30  commissioner to be actuarially valid and have been approved by 
 21.31  the commissioner.  Variations permitted under this paragraph 
 21.32  must not be based upon age or applied differently at different 
 21.33  ages.  This paragraph does not prohibit use of a constant 
 21.34  percentage adjustment for factors permitted to be used under 
 21.35  this paragraph. 
 21.36     (b) Premium rates may vary based upon the ages of covered 
 22.1   persons only as provided in this paragraph.  In addition to the 
 22.2   variation permitted under paragraph (a), each health carrier may 
 22.3   use an additional premium variation based upon age of up to plus 
 22.4   or minus 50 percent of the index rate. 
 22.5      (c) A health carrier may request approval by the 
 22.6   commissioner to establish no more than three geographic regions 
 22.7   and to establish separate index rates for each region, provided 
 22.8   that the index rates do not vary between any two regions by more 
 22.9   than 20 percent.  Health carriers that do not do business in the 
 22.10  Minneapolis/St. Paul metropolitan area may request approval for 
 22.11  no more than two geographic regions, and clauses (2) and (3) do 
 22.12  not apply to approval of requests made by those health 
 22.13  carriers.  The commissioner may grant approval if the following 
 22.14  conditions are met: 
 22.15     (1) the geographic regions must be applied uniformly by the 
 22.16  health carrier; 
 22.17     (2) one geographic region must be based on the 
 22.18  Minneapolis/St. Paul metropolitan area; 
 22.19     (3) for each geographic region that is rural, the index 
 22.20  rate for that region must not exceed the index rate for the 
 22.21  Minneapolis/St. Paul metropolitan area; and 
 22.22     (4) the health carrier provides actuarial justification 
 22.23  acceptable to the commissioner for the proposed geographic 
 22.24  variations in index rates, establishing that the variations are 
 22.25  based upon differences in the cost to the health carrier of 
 22.26  providing coverage. 
 22.27     (d) Health carriers may use rate cells and must file with 
 22.28  the commissioner the rate cells they use.  Rate cells must be 
 22.29  based upon the number of adults or children covered under the 
 22.30  policy and may reflect the availability of Medicare coverage.  
 22.31  The rates for different rate cells must not in any way reflect 
 22.32  generalized differences in expected costs between principal 
 22.33  insureds and their spouses. 
 22.34     (e) In developing its index rates and premiums for a health 
 22.35  plan, a health carrier shall take into account only the 
 22.36  following factors: 
 23.1      (1) actuarially valid differences in rating factors 
 23.2   permitted under paragraphs (a) and (b); and 
 23.3      (2) actuarially valid geographic variations if approved by 
 23.4   the commissioner as provided in paragraph (c). 
 23.5      (f) All premium variations must be justified in initial 
 23.6   rate filings and upon request of the commissioner in rate 
 23.7   revision filings.  All rate variations are subject to approval 
 23.8   by the commissioner. 
 23.9      (g) The loss ratio must comply with the section 62A.021 
 23.10  requirements for individual health plans. 
 23.11     (h) The rates must not be approved, unless the commissioner 
 23.12  has determined that the rates are reasonable.  In determining 
 23.13  reasonableness, the commissioner shall consider ~~the growth rates~~ 
 23.14  ~~applied under section 62J.04, subdivision 1, paragraph (b), to~~ 
 23.15  ~~the calendar year or years that the proposed premium rate would~~ 
 23.16  ~~be in effect,~~ actuarially valid changes in risks associated with 
 23.17  the enrollee populations~~,~~ and actuarially valid changes as a 
 23.18  result of statutory changes in Laws 1992, chapter 549. 
 23.19     Sec. 3.  Minnesota Statutes 1996, section 62J.051, is 
 23.20  amended to read: 
 23.21     62J.051 [DISTRIBUTION OF HEALTH CARE TECHNOLOGY, 
 23.22  FACILITIES, AND FUNCTIONS; PUBLIC FORUMS.] 
 23.23     The commission may promote and facilitate an open, 
 23.24  voluntary, nonregulatory, and public process for regional and 
 23.25  statewide discussion regarding the appropriate distribution of 
 23.26  health care technologies, facilities, and functions.  The 
 23.27  process must include the participation of consumers, employers 
 23.28  and other group purchasers, providers, health plan companies, 
 23.29  and the health care technology industry.  The commission shall 
 23.30  ensure opportunities for broad-based public input from other 
 23.31  interested persons and organizations as well.  The purpose of 
 23.32  the process is to create an open public forum with the goal of 
 23.33  facilitating collaboration for the distribution of a particular 
 23.34  technology, facility, or function to achieve health reform 
 23.35  goals.  Participation in the forums is voluntary and agreements 
 23.36  or distribution plans that may be recommended through this 
 24.1   process are not mandatory or binding on any person or 
 24.2   organization.  The recommendations may be considered by the 
 24.3   commissioner of health for purposes of the antitrust exception 
 24.4   process under sections 62J.2911 to 62J.2921, ~~and the process for~~ 
 24.5   ~~reviewing major spending commitments under section 62J.17,~~ but 
 24.6   are not binding on the commissioner.  The commission may develop 
 24.7   criteria for selecting specific technologies, facilities, and 
 24.8   functions for discussion and may establish procedures and ground 
 24.9   rules for discussion and the development of recommended 
 24.10  agreements or distribution plans.  The commission may appoint 
 24.11  advisory committees to facilitate discussion and planning and 
 24.12  may request that regional coordinating boards serve as or 
 24.13  convene regional public forums. 
 24.14     Sec. 4.  Minnesota Statutes 1996, section 62J.2912, 
 24.15  subdivision 8, is amended to read: 
 24.16     Subd. 8.  [HEALTH CARE PRODUCTS.] "Health care products" 
 24.17  means durable medical equipment and ~~"medical equipment" as~~ 
 24.18  ~~defined in section 62J.17, subdivision 2, paragraph (g).~~ fixed 
 24.19  and movable equipment that is used by a provider in the 
 24.20  provision of a health care service.  Health care products 
 24.21  include: 
 24.22     (1) an extracorporeal shock wave lithotripter; 
 24.23     (2) a computerized axial tomography (CAT) scanner; 
 24.24     (3) a magnetic resonance imaging (MRI) unit; 
 24.25     (4) a positron emission tomography (PET) scanner; and 
 24.26     (5) emergency and nonemergency medical transportation 
 24.27  equipment and vehicles. 
 24.28     Sec. 5.  Minnesota Statutes 1996, section 62J.2912, 
 24.29  subdivision 9, is amended to read: 
 24.30     Subd. 9.  [HEALTH CARE SERVICE.] "Health care service" ~~has~~ 
 24.31  ~~the meaning given in section 62J.17, subdivision 2, paragraph~~ 
 24.32  ~~(e).~~ means: 
 24.33     (1) a service or item that would be covered by the medical 
 24.34  assistance program under chapter 256B if provided in accordance 
 24.35  with medical assistance requirements to an eligible medical 
 24.36  assistance recipient; and 
 25.1      (2) a service or item that would be covered by medical 
 25.2   assistance except that it is characterized as experimental, 
 25.3   cosmetic, or voluntary. 
 25.4      "Health care service" does not include retail, 
 25.5   over-the-counter sales of nonprescription drugs, and other 
 25.6   retail sales of health-related products that are not generally 
 25.7   paid for by medical assistance and other third-party coverage. 
 25.8      Sec. 6.  Minnesota Statutes 1996, section 62J.301, 
 25.9   subdivision 3, is amended to read: 
 25.10     Subd. 3.  [GENERAL DUTIES.] The commissioner shall: 
 25.11     (1) collect and maintain data which enable population-based 
 25.12  monitoring and trending of the access, utilization, quality, and 
 25.13  cost of health care services within Minnesota; 
 25.14     (2) collect and maintain data for the purpose of estimating 
 25.15  total Minnesota health care expenditures and trends; 
 25.16     (3) ~~collect and maintain data for the purposes of setting~~ 
 25.17  ~~limits under section 62J.04, and measuring growth limit~~ 
 25.18  ~~compliance;~~ 
 25.19     ~~(4)~~ conduct applied research using existing and new data 
 25.20  and promote applications based on existing research; 
 25.21     ~~(5)~~ (4) develop and implement data collection procedures to 
 25.22  ensure a high level of cooperation from health care providers 
 25.23  and health plan companies, as defined in section 62Q.01, 
 25.24  subdivision 4; 
 25.25     ~~(6)~~ (5) work closely with health plan companies and health 
 25.26  care providers to promote improvements in health care efficiency 
 25.27  and effectiveness; and 
 25.28     ~~(7)~~ (6) participate as a partner or sponsor of private 
 25.29  sector initiatives that promote publicly disseminated applied 
 25.30  research on health care delivery, outcomes, costs, quality, and 
 25.31  management. 
 25.32     Sec. 7.  Minnesota Statutes 1996, section 62L.08, 
 25.33  subdivision 8, is amended to read: 
 25.34     Subd. 8.  [FILING REQUIREMENT.] No later than July 1, 1993, 
 25.35  and each year thereafter, a health carrier that offers, sells, 
 25.36  issues, or renews a health benefit plan for small employers 
 26.1   shall file with the commissioner the index rates and must 
 26.2   demonstrate that all rates shall be within the rating 
 26.3   restrictions defined in this chapter.  Such demonstration must 
 26.4   include the allowable range of rates from the index rates and a 
 26.5   description of how the health carrier intends to use demographic 
 26.6   factors including case characteristics in calculating the 
 26.7   premium rates.  The rates shall not be approved, unless the 
 26.8   commissioner has determined that the rates are reasonable.  In 
 26.9   determining reasonableness, the commissioner shall consider ~~the~~ 
 26.10  ~~growth rates applied under section 62J.04, subdivision 1,~~ 
 26.11  ~~paragraph (b), to the calendar year or years that the proposed~~ 
 26.12  ~~premium rate would be in effect,~~ actuarially valid changes in 
 26.13  risk associated with the enrollee population~~,~~ and actuarially 
 26.14  valid changes as a result of statutory changes in Laws 1992, 
 26.15  chapter 549.  ~~For premium rates proposed to go into effect~~ 
 26.16  ~~between July 1, 1993 and December 31, 1993, the pertinent growth~~ 
 26.17  ~~rate is the growth rate applied under section 62J.04,~~ 
 26.18  ~~subdivision 1, paragraph (b), to calendar year 1994.~~  
 26.19     Sec. 8.  Minnesota Statutes 1996, section 62Q.01, 
 26.20  subdivision 4, is amended to read: 
 26.21     Subd. 4.  [HEALTH PLAN COMPANY.] "Health plan company" 
 26.22  means: 
 26.23     (1) a health carrier as defined under section 62A.011, 
 26.24  subdivision 2; 
 26.25     ~~(2) an integrated service network as defined under section~~ 
 26.26  ~~62N.02, subdivision 8;~~ or 
 26.27     ~~(3)~~ (2) a community integrated service network as defined 
 26.28  under section 62N.02, subdivision 4a. 
 26.29     Sec. 9.  Minnesota Statutes 1996, section 62Q.01, 
 26.30  subdivision 5, is amended to read: 
 26.31     Subd. 5.  [MANAGED CARE ORGANIZATION.] "Managed care 
 26.32  organization" means: 
 26.33     (1) a health maintenance organization operating under 
 26.34  chapter 62D; 
 26.35     (2) a community integrated service network as defined under 
 26.36  section 62N.02, subdivision 4a; ~~(3) an integrated service~~ 
 27.1   ~~network as defined under section 62N.02, subdivision 8;~~ or 
 27.2      ~~(4)~~ (3) an insurance company licensed under chapter 60A, 
 27.3   nonprofit health service plan corporation operating under 
 27.4   chapter 62C, fraternal benefit society operating under chapter 
 27.5   64B, or any other health plan company, to the extent that it 
 27.6   covers health care services delivered to Minnesota residents 
 27.7   through a preferred provider organization or a network of 
 27.8   selected providers. 
 27.9      Sec. 10.  Minnesota Statutes 1996, section 62Q.106, is 
 27.10  amended to read: 
 27.11     62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER.] 
 27.12     A complainant may at any time submit a complaint to the 
 27.13  appropriate commissioner to investigate.  After investigating a 
 27.14  complaint, or reviewing a company's decision, the appropriate 
 27.15  commissioner may order a remedy as authorized under section 
 27.16  ~~62N.04,~~ 62Q.30~~,~~ or chapter 45, 60A, or 62D. 
 27.17     Sec. 11.  Minnesota Statutes 1996, section 62Q.45, 
 27.18  subdivision 2, is amended to read: 
 27.19     Subd. 2.  [DEFINITION.] For purposes of this section, 
 27.20  "managed care organization" means: 
 27.21     (1) a health maintenance organization operating under 
 27.22  chapter 62D; 
 27.23     (2) a community-integrated service network as defined under 
 27.24  section 62N.02, subdivision 4a; ~~(3) an integrated service~~ 
 27.25  ~~network as defined under section 62N.02, subdivision 8;~~ or 
 27.26     ~~(4)~~ (3) an insurance company licensed under chapter 60A, 
 27.27  nonprofit health service plan corporation operating under 
 27.28  chapter 62C, fraternal benefit society operating under chapter 
 27.29  64B, or any other health plan company, to the extent that it 
 27.30  covers health care services delivered to Minnesota residents 
 27.31  through a preferred provider organization or a network of 
 27.32  selected providers. 
 27.33     Sec. 12.  Minnesota Statutes 1996, section 256.9363, 
 27.34  subdivision 1, is amended to read: 
 27.35     Subdivision 1.  [SELECTION OF VENDORS.] In order to contain 
 27.36  costs, the commissioner of human services shall select vendors 
 28.1   of medical care who can provide the most economical care 
 28.2   consistent with high medical standards and shall, where 
 28.3   possible, contract with organizations on a prepaid capitation 
 28.4   basis to provide these services.  The commissioner shall 
 28.5   consider proposals by counties and vendors for managed care 
 28.6   plans which may include:  prepaid capitation programs, 
 28.7   competitive bidding programs, or other vendor payment mechanisms 
 28.8   designed to provide services in an economical manner or to 
 28.9   control utilization, with safeguards to ensure that necessary 
 28.10  services are provided.  ~~Managed care plans may include~~ 
 28.11  ~~integrated service networks as defined in section 62N.02.~~