1.1                          A bill for an act 
  1.2             relating to health; prohibiting certain provider 
  1.3             conflicts of interest; providing civil and criminal 
  1.4             penalties; amending Minnesota Statutes 2002, section 
  1.5             62R.03, subdivision 3; proposing coding for new law in 
  1.6             Minnesota Statutes, chapter 62J; repealing Minnesota 
  1.7             Statutes 2002, sections 13.717, subdivision 3; 62J.23, 
  1.8             subdivisions 1, 2, 3, 4; Minnesota Statutes 2003 
  1.9             Supplement, section 62J.23, subdivision 5. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [62J.231] [MEDICAL PROVIDER KICKBACKS.] 
  1.12     Subdivision 1.  [PROHIBITIONS.] It is unlawful for any 
  1.13  person to: 
  1.14     (1) knowingly and intentionally solicit or receive any 
  1.15  remuneration, including any kickback, bribe, or rebate, directly 
  1.16  or indirectly, overtly or covertly, in cash or in kind: 
  1.17     (i) in return for referring an individual to a person for 
  1.18  the furnishing or arranging for the furnishing of any health 
  1.19  care related item or service; or 
  1.20     (ii) in return for purchasing, leasing, ordering, or 
  1.21  arranging for or recommending purchasing, leasing, or ordering 
  1.22  any health care related good, facility, service, or item; 
  1.23     (2) knowingly and intentionally offer or pay any 
  1.24  remuneration, including any kickback, bribe, or rebate, directly 
  1.25  or indirectly, overtly or covertly, in cash or in kind, to any 
  1.26  person to induce the person: 
  1.27     (i) to refer an individual to a person for the furnishing 
  2.1   or arranging for the furnishing of any health care related item 
  2.2   or service; or 
  2.3      (ii) to purchase, lease, order, or arrange for or recommend 
  2.4   purchasing, leasing, or ordering any health care related good, 
  2.5   facility, service, or item; or 
  2.6      (3) issue a receipt or invoice for medical goods or 
  2.7   services containing a false or misleading statement or make any 
  2.8   other misrepresentation or omission with the intent to conceal 
  2.9   the existence of any kickback, bribe, or rebate. 
  2.10     Subd. 2.  [EXCEPTIONS.] The following are not prohibited 
  2.11  under subdivision 1, clause (1) or (2): 
  2.12     (1) exempt conduct set forth in safe harbor regulations in 
  2.13  Code of Federal Regulations, title 42, section 1001.952, 
  2.14  according to United States Code, title 42, section 1320a-7b, 
  2.15  paragraph (b), clause (3); 
  2.16     (2) rebates paid directly to a consumer in connection with 
  2.17  the purchase of prescription drugs prescribed to that consumer, 
  2.18  so long as the rebates otherwise comport with the requirements 
  2.19  of state and federal law and the rebates: 
  2.20     (i) are not paid to consumers who are participating in any 
  2.21  state or federal health care program; and 
  2.22     (ii) do not exceed the amount paid directly by the consumer 
  2.23  for the drug; and 
  2.24     (3) prescription drug samples provided to a medical 
  2.25  provider, which the medical provider gives free of charge to a 
  2.26  patient, provided that the samples are distributed and tracked 
  2.27  according to state and federal law and drug manufacturers 
  2.28  account for the samples in their price reporting to the federal 
  2.29  Medicare program and state Medicaid programs. 
  2.30     Subd. 3.  [DEFINITION.] As used in this section, "person" 
  2.31  means any individual, corporation, firm, partnership, 
  2.32  incorporated and unincorporated association, or any other legal, 
  2.33  professional, or commercial entity. 
  2.34     Subd. 4.  [CRIMINAL PENALTY.] A person who violates 
  2.35  subdivision 1 is guilty of a felony and may be fined not more 
  2.36  than $25,000 or imprisoned for not more than five years.  A 
  3.1   prosecution for violation of this section may be brought by the 
  3.2   Office of the Attorney General or any county attorney's office. 
  3.3      Subd. 5.  [CIVIL REMEDY; COMMISSIONER OF HEALTH.] The 
  3.4   commissioner of health may investigate any alleged violation of 
  3.5   subdivision 1 and may assess a civil fine against a person who 
  3.6   the commissioner determines violates subdivision 1.  The amount 
  3.7   of the fine is $1,000 per violation or 110 percent of the 
  3.8   estimated financial benefit that the person realized as a result 
  3.9   of the prohibited relationship, whichever is greater.  The 
  3.10  commissioner's investigatory powers under this section include, 
  3.11  but are not limited to, the authority to issue subpoenas to 
  3.12  require the attendance and testimony of witnesses and the 
  3.13  production of any documents or other information relevant to the 
  3.14  investigation.  The subpoenas may be served upon any person 
  3.15  anywhere in the state by any person authorized to serve 
  3.16  subpoenas or other processes in civil actions of the district 
  3.17  courts.  If a person does not comply with the subpoena, the 
  3.18  commissioner may apply to the district court in any district and 
  3.19  the court shall order the person to comply with the subpoena. 
  3.20     Subd. 6.  [CIVIL REMEDY; ATTORNEY GENERAL.] The attorney 
  3.21  general may investigate any alleged violation of subdivision 1 
  3.22  and, having reasonable cause to believe a violation is imminent, 
  3.23  is occurring, or has occurred, the attorney general may 
  3.24  institute a court action seeking appropriate relief.  The 
  3.25  investigatory authority of the attorney general under this 
  3.26  section shall include, but not be limited to, the authority 
  3.27  provided in section 8.31.  In any civil action brought by the 
  3.28  attorney general under this section, the court may award 
  3.29  injunctive relief, damages, costs of investigation, reasonable 
  3.30  attorney fees, and equitable relief, including, but not limited 
  3.31  to, disgorgement.  The attorney general may also sue for and 
  3.32  recover for the state, from any person who is found to have 
  3.33  violated this section, a civil penalty in an amount to be 
  3.34  determined by the court, not in excess of $25,000 for each 
  3.35  illegal transaction. 
  3.36     Subd. 7.  [AUDITS OF EXEMPT PROVIDERS.] The commissioner of 
  4.1   health may audit the referral patterns of providers that qualify 
  4.2   for exceptions under the federal Stark Law, United States Code, 
  4.3   title 42, section 1395nn.  The commissioner has access to 
  4.4   provider records according to section 144.99, subdivision 2.  
  4.5   The commissioner shall report to the legislature any audit 
  4.6   results that reveal a pattern of referrals by a provider for the 
  4.7   furnishing of health services to an entity with which the 
  4.8   provider has a direct or indirect financial relationship. 
  4.9      Sec. 2.  Minnesota Statutes 2002, section 62R.03, 
  4.10  subdivision 3, is amended to read: 
  4.11     Subd. 3.  [HEALTH PROVIDER COOPERATIVES.] A health provider 
  4.12  cooperative shall not be considered a mutual insurance company 
  4.13  under chapter 60A, a health maintenance organization under 
  4.14  chapter 62D, a nonprofit health services corporation under 
  4.15  chapter 62C, or a community integrated service network under 
  4.16  chapter 62N.  A health provider network shall not be considered 
  4.17  to violate any limitations on the corporate practice of 
  4.18  medicine.  Health care service contracts under section 62R.06 
  4.19  shall not be considered to violate section ~~62J.23~~ 62J.231. 
  4.20     Sec. 3.  [REPEALER.] 
  4.21     Minnesota Statutes 2002, sections 13.717, subdivision 3; 
  4.22  and 62J.23, subdivisions 1, 2, 3, and 4; and Minnesota Statutes 
  4.23  2003 Supplement, section 62J.23, subdivision 5, are repealed.