1.1                          A bill for an act 
  1.2             relating to health; modifying requirements for 
  1.3             outpatient surgical centers; requiring reporting 
  1.4             requirements of diagnostic imaging facilities; 
  1.5             modifying procedures for the Board of Medical 
  1.6             Practice; appropriating money; amending Minnesota 
  1.7             Statutes 2002, sections 144.55, subdivisions 1, 2, 3, 
  1.8             5, 6, 7, by adding subdivisions; 144.651, subdivision 
  1.9             2; 144.653, subdivision 4; 144.698, subdivisions 1, 5; 
  1.10            147.091, subdivision 1; 256B.02, subdivision 7; 
  1.11            Minnesota Statutes 2003 Supplement, sections 144.7063, 
  1.12            subdivision 3; 256L.035; proposing coding for new law 
  1.13            in Minnesota Statutes, chapter 144. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 2002, section 144.55, 
  1.16  subdivision 1, is amended to read: 
  1.17     Subdivision 1.  [ISSUANCE.] The state commissioner of 
  1.18  health is hereby authorized to issue licenses to operate 
  1.19  hospitals, sanitariums, outpatient surgical centers, or other 
  1.20  institutions for the hospitalization or care of human beings, 
  1.21  which are found to comply with the provisions of sections 144.50 
  1.22  to 144.56 and any reasonable rules promulgated by the 
  1.23  commissioner.  The commissioner shall not require an outpatient 
  1.24  surgical center licensed as part of a hospital to obtain a 
  1.25  separate outpatient surgical center license.  All decisions of 
  1.26  the commissioner thereunder may be reviewed in the district 
  1.27  court in the county in which the institution is located or 
  1.28  contemplated. 
  1.29     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  2.1      Sec. 2.  Minnesota Statutes 2002, section 144.55, is 
  2.2   amended by adding a subdivision to read: 
  2.3      Subd. 1a.  [LICENSE FEE.] The annual license fee for 
  2.4   outpatient surgical centers is $1,512. 
  2.5      <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  2.6      Sec. 3.  Minnesota Statutes 2002, section 144.55, is 
  2.7   amended by adding a subdivision to read: 
  2.8      Subd. 1b.  [STANDARDS FOR NURSING CARE.] As a condition of 
  2.9   licensure, outpatient surgical centers must provide nursing care 
  2.10  consistent with nationally accepted nursing clinical standards 
  2.11  for perioperative nursing, including, but not limited to 
  2.12  Association of Operating Room Nurses and American Nurses 
  2.13  Association standards, which are generally accepted in the 
  2.14  professional nursing community.  
  2.15     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  2.16     Sec. 4.  Minnesota Statutes 2002, section 144.55, 
  2.17  subdivision 2, is amended to read: 
  2.18     Subd. 2.  [DEFINITION DEFINITIONS.] For the purposes of 
  2.19  this section, the following terms have the meanings given: 
  2.20     (a) "Outpatient surgical center" or "center" means a 
  2.21  freestanding facility organized for the specific purpose of 
  2.22  providing elective outpatient surgery for preexamined, 
  2.23  prediagnosed, low-risk patients.  Admissions are limited to 
  2.24  procedures that utilize general anesthesia or conscious sedation 
  2.25  and that do not require overnight inpatient care.  An outpatient 
  2.26  surgical center is not organized to provide regular emergency 
  2.27  medical services and does not include a physician's or dentist's 
  2.28  office or clinic for the practice of medicine, the practice of 
  2.29  dentistry, or the delivery of primary care. 
  2.30     (b) "Joint commission" means the Joint Commission on 
  2.31  Accreditation of Hospitals Health Care Organizations.  
  2.32     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  2.33     Sec. 5.  Minnesota Statutes 2002, section 144.55, 
  2.34  subdivision 3, is amended to read: 
  2.35     Subd. 3.  [STANDARDS FOR LICENSURE.] (a) Notwithstanding 
  2.36  the provisions of section 144.56, for the purpose of hospital 
  3.1   licensure, the commissioner of health shall use as minimum 
  3.2   standards the hospital certification regulations promulgated 
  3.3   pursuant to Title XVIII of the Social Security Act, United 
  3.4   States Code, title 42, section 1395, et seq.  The commissioner 
  3.5   may use as minimum standards changes in the federal hospital 
  3.6   certification regulations promulgated after May 7, 1981, if the 
  3.7   commissioner finds that such changes are reasonably necessary to 
  3.8   protect public health and safety.  The commissioner shall also 
  3.9   promulgate in rules additional minimum standards for new 
  3.10  construction.  
  3.11     (b) Each hospital and outpatient surgical center shall 
  3.12  establish policies and procedures to prevent the transmission of 
  3.13  human immunodeficiency virus and hepatitis B virus to patients 
  3.14  and within the health care setting.  The policies and procedures 
  3.15  shall be developed in conformance with the most recent 
  3.16  recommendations issued by the United States Department of Health 
  3.17  and Human Services, Public Health Service, Centers for Disease 
  3.18  Control.  The commissioner of health shall evaluate a hospital's 
  3.19  compliance with the policies and procedures according to 
  3.20  subdivision 4. 
  3.21     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  3.22     Sec. 6.  Minnesota Statutes 2002, section 144.55, 
  3.23  subdivision 5, is amended to read: 
  3.24     Subd. 5.  [COORDINATION OF INSPECTIONS.] Prior to 
  3.25  conducting routine inspections of hospitals and outpatient 
  3.26  surgical centers, a state agency shall notify the commissioner 
  3.27  of its intention to inspect.  The commissioner shall then 
  3.28  determine whether the inspection is necessary in light of any 
  3.29  previous inspections conducted by the commissioner, any other 
  3.30  state agency, or the joint commission.  The commissioner shall 
  3.31  notify the agency of the determination and may authorize the 
  3.32  agency to conduct the inspection.  No state agency may routinely 
  3.33  inspect any hospital without the authorization of the 
  3.34  commissioner.  The commissioner shall coordinate, insofar as is 
  3.35  possible, routine inspections conducted by state agencies, so as 
  3.36  to minimize the number of inspections to which hospitals are 
  4.1   subject.  
  4.2      <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  4.3      Sec. 7.  Minnesota Statutes 2002, section 144.55, 
  4.4   subdivision 6, is amended to read: 
  4.5      Subd. 6.  [SUSPENSION, REVOCATION, AND REFUSAL TO RENEW.] 
  4.6   (a) The commissioner may refuse to grant or renew, or may 
  4.7   suspend or revoke, a license on any of the following grounds: 
  4.8      (1) Violation of any of the provisions of sections 144.50 
  4.9   to 144.56 or the rules or standards issued pursuant thereto, or 
  4.10  Minnesota Rules, chapters 4650 and 4675; 
  4.11     (2) Permitting, aiding, or abetting the commission of any 
  4.12  illegal act in the institution; 
  4.13     (3) Conduct or practices detrimental to the welfare of the 
  4.14  patient; or 
  4.15     (4) Obtaining or attempting to obtain a license by fraud or 
  4.16  misrepresentation; or 
  4.17     (5) With respect to hospitals and outpatient surgical 
  4.18  centers, if the commissioner determines that there is a pattern 
  4.19  of conduct that one or more physicians who have a "financial or 
  4.20  economic interest", as defined in section 144.6521, subdivision 
  4.21  3, in the hospital or outpatient surgical center, have not 
  4.22  provided the notice and disclosure of the financial or economic 
  4.23  interest required by section 144.6521. 
  4.24     (b) The commissioner shall not renew a license for a 
  4.25  boarding care bed in a resident room with more than four beds. 
  4.26     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  4.27     Sec. 8.  Minnesota Statutes 2002, section 144.55, 
  4.28  subdivision 7, is amended to read: 
  4.29     Subd. 7.  [HEARING.] Prior to any suspension, revocation or 
  4.30  refusal to renew a license, the licensee shall be entitled to 
  4.31  notice and a hearing as provided by sections 14.57 to 14.69.  At 
  4.32  each hearing, the commissioner shall have the burden of 
  4.33  establishing that a violation described in subdivision 6 has 
  4.34  occurred.  
  4.35     If a license is revoked, suspended, or not renewed, a new 
  4.36  application for license may be considered by the commissioner if 
  5.1   the conditions upon which revocation, suspension, or refusal to 
  5.2   renew was based have been corrected and evidence of this fact 
  5.3   has been satisfactorily furnished.  A new license may then be 
  5.4   granted after proper inspection has been made and all provisions 
  5.5   of sections 144.50 to 144.56 and any rules promulgated 
  5.6   thereunder, or Minnesota Rules, chapters 4650 and 4675, have 
  5.7   been complied with and recommendation has been made by the 
  5.8   inspector as an agent of the commissioner.  
  5.9      <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  5.10     Sec. 9.  [144.565] [DIAGNOSTIC IMAGING FACILITIES.] 
  5.11     Subdivision 1.  [UTILIZATION AND SERVICES DATA; ECONOMIC 
  5.12  AND FINANCIAL INTERESTS.] The commissioner shall require 
  5.13  diagnostic imaging facilities to annually report to the 
  5.14  commissioner, in the form and manner specified by the 
  5.15  commissioner: 
  5.16     (1) utilization data for each health plan company and each 
  5.17  public program, including workers' compensation, as follows: 
  5.18     (i) the number of computerized tomography (CT) procedures 
  5.19  performed; 
  5.20     (ii) the number of magnetic resonance imaging (MRI) 
  5.21  procedures performed; and 
  5.22     (iii) the number of positron emission tomography (PET) 
  5.23  procedures performed; and 
  5.24     (2) the names of all individuals with a financial or 
  5.25  economic interest in the facility. 
  5.26     Subd. 2.  [COMMISSIONER'S RIGHT TO INSPECT RECORDS.] If the 
  5.27  report is not filed or the commissioner of health has reason to 
  5.28  believe the report is incomplete or false, the commissioner 
  5.29  shall have the right to inspect diagnostic imaging facility 
  5.30  books, audits, and records. 
  5.31     Subd. 3.  [SEPARATE REPORTS.] For a diagnostic imaging 
  5.32  facility that is not attached or not contiguous to a hospital or 
  5.33  a hospital affiliate, the commissioner shall require the 
  5.34  information in subdivision 1 be reported separately for each 
  5.35  detached diagnostic imaging facility as part of the report 
  5.36  required under section 144.702.  If any entity owns more than 
  6.1   one diagnostic imaging facility, that entity must report by 
  6.2   individual facility.  
  6.3      Subd. 4.  [DEFINITIONS.] For purposes of this section, the 
  6.4   following terms have the meanings given: 
  6.5      (a) "Diagnostic imaging facility" means a health care 
  6.6   facility that provides diagnostic imaging services through the 
  6.7   use of ionizing radiation or other imaging technique including, 
  6.8   but not limited to magnetic resonance imaging (MRI) or 
  6.9   computerized tomography (CT) scan on a freestanding or mobile 
  6.10  basis. 
  6.11     (b) "Financial or economic interest" means a direct or 
  6.12  indirect: 
  6.13     (1) equity or debt security issued by an entity, including, 
  6.14  but not limited to, shares of stock in a corporation, membership 
  6.15  in a limited liability company, beneficial interest in a trust, 
  6.16  units or other interests in a partnership, bonds, debentures, 
  6.17  notes or other equity interests or debt instruments, or any 
  6.18  contractual arrangements; 
  6.19     (2) membership, proprietary interest, or co-ownership with 
  6.20  an individual, group, or organization to which patients, 
  6.21  clients, or customers are referred to; or 
  6.22     (3) employer-employee or independent contractor 
  6.23  relationship, including, but not limited to, those that may 
  6.24  occur in a limited partnership, profit-sharing arrangement, or 
  6.25  other similar arrangement with any facility to which patients 
  6.26  are referred, including any compensation between a facility and 
  6.27  a health care provider, the group practice of which the provider 
  6.28  is a member or employee or a related party with respect to any 
  6.29  of them. 
  6.30     (c) "Freestanding"  means a diagnostic imaging facility 
  6.31  that is not located within a: 
  6.32     (1) hospital; 
  6.33     (2) location licensed as a hospital; or 
  6.34     (3) physician's office or clinic where the professional 
  6.35  practice of medicine by licensed physicians is the primary 
  6.36  purpose and not the provision of ancillary services such as 
  7.1   diagnostic imaging. 
  7.2      (d) "Mobile" means a diagnostic imaging facility that is 
  7.3   transported to various sites not including movement within a 
  7.4   hospital or a physician's office or clinic. 
  7.5      <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  7.6      Sec. 10.  Minnesota Statutes 2002, section 144.651, 
  7.7   subdivision 2, is amended to read: 
  7.8      Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
  7.9   "patient" means a person who is admitted to an acute care 
  7.10  inpatient facility for a continuous period longer than 24 hours, 
  7.11  for the purpose of diagnosis or treatment bearing on the 
  7.12  physical or mental health of that person.  For purposes of 
  7.13  subdivisions 4 to 9, 12, 13, 15, 16, and 18 to 20, "patient" 
  7.14  also means a person who receives health care services at an 
  7.15  outpatient surgical center.  "Patient" also means a minor who is 
  7.16  admitted to a residential program as defined in section 
  7.17  253C.01.  For purposes of subdivisions 1, 3 to 16, 18, 20 and 
  7.18  30, "patient" also means any person who is receiving mental 
  7.19  health treatment on an outpatient basis or in a community 
  7.20  support program or other community-based program.  "Resident" 
  7.21  means a person who is admitted to a nonacute care facility 
  7.22  including extended care facilities, nursing homes, and boarding 
  7.23  care homes for care required because of prolonged mental or 
  7.24  physical illness or disability, recovery from injury or disease, 
  7.25  or advancing age.  For purposes of all subdivisions except 
  7.26  subdivisions 28 and 29, "resident" also means a person who is 
  7.27  admitted to a facility licensed as a board and lodging facility 
  7.28  under Minnesota Rules, parts 4625.0100 to 4625.2355, or a 
  7.29  supervised living facility under Minnesota Rules, parts 
  7.30  4665.0100 to 4665.9900, and which operates a rehabilitation 
  7.31  program licensed under Minnesota Rules, parts 9530.4100 to 
  7.32  9530.4450. 
  7.33     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  7.34     Sec. 11.  [144.6521] [DISCLOSURE OF FINANCIAL INTEREST.] 
  7.35     Subdivision 1.  [DISCLOSURE.] No health care provider with 
  7.36  a financial or economic interest in, or an employment or 
  8.1   contractual arrangement that limits referral options with, a 
  8.2   hospital, outpatient surgical center or diagnostic imaging 
  8.3   facility, or an affiliate of one of these entities, shall refer 
  8.4   a patient to that hospital, center, or facility, or an affiliate 
  8.5   of one of these entities, unless the health care provider 
  8.6   discloses in writing to the patient, in advance of the referral, 
  8.7   the existence of such an interest, employment, or arrangement.  
  8.8      The written disclosure form must be printed in letters of 
  8.9   at least 12-point boldface type and must read as follows:  "Your 
  8.10  health care provider is referring you to a facility or service 
  8.11  in which your health care provider has a financial or economic 
  8.12  interest."  
  8.13     Hospitals, outpatient surgical centers, and diagnostic 
  8.14  imaging facilities shall promptly report to the commissioner of 
  8.15  health any suspected violations of this section by a health care 
  8.16  provider who has made a referral to such hospital, outpatient 
  8.17  surgical center, or diagnostic imaging facility without 
  8.18  providing the written notice. 
  8.19     Subd. 2.  [POSTING OF NOTICE.] In addition to the 
  8.20  requirement in subdivision 1, each health care provider who 
  8.21  makes referrals to a hospital, outpatient surgical center or 
  8.22  diagnostic imaging facility, or an affiliate of one of these 
  8.23  entities in which the health care provider has a financial or 
  8.24  economic interest, or has an employment or contractual 
  8.25  arrangement with one of these entities that limits referral 
  8.26  options, shall post a notice of this interest, employment, or 
  8.27  arrangement in a patient reception area or waiting room or other 
  8.28  conspicuous public location within the provider's facility. 
  8.29     Subd. 3.  [DEFINITION.] (a) For purposes of this section, 
  8.30  the following definitions apply. 
  8.31     (b) "Affiliate" means an entity that controls, is 
  8.32  controlled by, or is under common control with another entity. 
  8.33     (c) "Diagnostic imaging facility" has the meaning provided 
  8.34  in section 144.565, subdivision 4. 
  8.35     (d) "Employment or contractual arrangement that limits 
  8.36  referral options" means a requirement of, or a financial 
  9.1   incentive, provided to a health care provider to refer a patient 
  9.2   to a specific hospital, outpatient surgical center or diagnostic 
  9.3   imaging facility, or an affiliate of one of these entities even 
  9.4   if other options exist for the patient.  
  9.5      (e) "Freestanding" has the meaning provided in section 
  9.6   144.565, subdivision 4.  
  9.7      (f) "Financial or economic interest" means a direct or 
  9.8   indirect: 
  9.9      (1) equity or debt security issued by an entity, including, 
  9.10  but not limited to, shares of stock in a corporation, membership 
  9.11  in a limited liability company, beneficial interest in a trust, 
  9.12  units or other interests in a partnership, bonds, debentures, 
  9.13  notes or other equity interests or debt instruments, or any 
  9.14  contractual arrangements; 
  9.15     (2) membership, proprietary interest, or co-ownership with 
  9.16  an individual, group, or organization to which patients, 
  9.17  clients, or customers are referred to; or 
  9.18     (3) employer-employee or independent contractor 
  9.19  relationship, including, but not limited to, those that may 
  9.20  occur in a limited partnership, profit-sharing arrangement, or 
  9.21  other similar arrangement with any facility to which patients 
  9.22  are referred, including any compensation between a facility and 
  9.23  a health care provider, the group practice of which the provider 
  9.24  is a member or employee or a related party with respect to any 
  9.25  of them. 
  9.26     (g) "Health care provider" means an individual licensed by 
  9.27  a health licensing board as defined in section 214.01, 
  9.28  subdivision 2, who has the authority, within the individual's 
  9.29  scope of practice, to make referrals to a hospital, outpatient 
  9.30  surgical center, or diagnostic imaging facility. 
  9.31     (h) "Mobile" has the meaning provided in section 144.565, 
  9.32  subdivision 4.  
  9.33     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
  9.34     Sec. 12.  Minnesota Statutes 2002, section 144.653, 
  9.35  subdivision 4, is amended to read: 
  9.36     Subd. 4.  [WITHOUT NOTICE.] One or more unannounced 
 10.1   inspections of each facility required to be licensed under the 
 10.2   provisions of sections 144.50 to 144.58 or Minnesota Rules, 
 10.3   chapter 4675, shall be made annually. 
 10.4      <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
 10.5      Sec. 13.  Minnesota Statutes 2002, section 144.698, 
 10.6   subdivision 1, is amended to read: 
 10.7      Subdivision 1.  [YEARLY REPORTS.] Each hospital and each 
 10.8   outpatient surgical center, which has not filed the financial 
 10.9   information required by this section with a voluntary, nonprofit 
 10.10  reporting organization pursuant to section 144.702, shall file 
 10.11  annually with the commissioner of health after the close of the 
 10.12  fiscal year: 
 10.13     (1) a balance sheet detailing the assets, liabilities, and 
 10.14  net worth of the hospital or outpatient surgical center; 
 10.15     (2) a detailed statement of income and expenses; 
 10.16     (3) a copy of its most recent cost report, if any, filed 
 10.17  pursuant to requirements of Title XVIII of the United States 
 10.18  Social Security Act; 
 10.19     (4) a copy of all changes to articles of incorporation or 
 10.20  bylaws; 
 10.21     (5) information on services provided to benefit the 
 10.22  community, including services provided at no cost or for a 
 10.23  reduced fee to patients unable to pay, teaching and research 
 10.24  activities, or other community or charitable activities; 
 10.25     (6) information required on the revenue and expense report 
 10.26  form set in effect on July 1, 1989, or as amended by the 
 10.27  commissioner in rule; and 
 10.28     (7) information on changes in ownership or control; and 
 10.29     (8) other information required by the commissioner in rule. 
 10.30     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
 10.31     Sec. 14.  Minnesota Statutes 2002, section 144.698, 
 10.32  subdivision 5, is amended to read: 
 10.33     Subd. 5.  [COMMISSIONER'S RIGHT TO INSPECT RECORDS.] If the 
 10.34  report is not filed or the commissioner of health has reason to 
 10.35  believe the report is incomplete or false, the commissioner 
 10.36  shall have the right to inspect hospital and outpatient surgical 
 11.1   center books, audits, and records as reasonably necessary to 
 11.2   verify hospital and outpatient surgical center reports. 
 11.3      Sec. 15.  Minnesota Statutes 2003 Supplement, section 
 11.4   144.7063, subdivision 3, is amended to read: 
 11.5      Subd. 3.  [FACILITY.] "Facility" means a hospital or 
 11.6   outpatient surgical center licensed under sections 144.50 to 
 11.7   144.58. 
 11.8      <b>[EFFECTIVE DATE.]</b> This section is effective on the date of 
 11.9   full implementation of the adverse health care events reporting 
 11.10  system as provided in Laws 2003, chapter 99, section 7, provided 
 11.11  the commissioner has secured sufficient funds from nonstate 
 11.12  sources to operate the adverse health care events reporting 
 11.13  system in fiscal year 2005. 
 11.14     Sec. 16.  Minnesota Statutes 2002, section 147.091, 
 11.15  subdivision 1, is amended to read: 
 11.16     Subdivision 1.  [GROUNDS LISTED.] The board may refuse to 
 11.17  grant a license, may refuse to grant registration to perform 
 11.18  interstate telemedicine services, or may impose disciplinary 
 11.19  action as described in section 147.141 against any physician.  
 11.20  The following conduct is prohibited and is grounds for 
 11.21  disciplinary action: 
 11.22     (a) Failure to demonstrate the qualifications or satisfy 
 11.23  the requirements for a license contained in this chapter or 
 11.24  rules of the board.  The burden of proof shall be upon the 
 11.25  applicant to demonstrate such qualifications or satisfaction of 
 11.26  such requirements. 
 11.27     (b) Obtaining a license by fraud or cheating, or attempting 
 11.28  to subvert the licensing examination process.  Conduct which 
 11.29  subverts or attempts to subvert the licensing examination 
 11.30  process includes, but is not limited to:  (1) conduct which 
 11.31  violates the security of the examination materials, such as 
 11.32  removing examination materials from the examination room or 
 11.33  having unauthorized possession of any portion of a future, 
 11.34  current, or previously administered licensing examination; (2) 
 11.35  conduct which violates the standard of test administration, such 
 11.36  as communicating with another examinee during administration of 
 12.1   the examination, copying another examinee's answers, permitting 
 12.2   another examinee to copy one's answers, or possessing 
 12.3   unauthorized materials; or (3) impersonating an examinee or 
 12.4   permitting an impersonator to take the examination on one's own 
 12.5   behalf. 
 12.6      (c) Conviction, during the previous five years, of a felony 
 12.7   reasonably related to the practice of medicine or osteopathy.  
 12.8   Conviction as used in this subdivision shall include a 
 12.9   conviction of an offense which if committed in this state would 
 12.10  be deemed a felony without regard to its designation elsewhere, 
 12.11  or a criminal proceeding where a finding or verdict of guilt is 
 12.12  made or returned but the adjudication of guilt is either 
 12.13  withheld or not entered thereon.  
 12.14     (d) Revocation, suspension, restriction, limitation, or 
 12.15  other disciplinary action against the person's medical license 
 12.16  in another state or jurisdiction, failure to report to the board 
 12.17  that charges regarding the person's license have been brought in 
 12.18  another state or jurisdiction, or having been refused a license 
 12.19  by any other state or jurisdiction.  
 12.20     (e) Advertising which is false or misleading, which 
 12.21  violates any rule of the board, or which claims without 
 12.22  substantiation the positive cure of any disease, or professional 
 12.23  superiority to or greater skill than that possessed by another 
 12.24  physician. 
 12.25     (f) Violating a rule promulgated by the board or an order 
 12.26  of the board, a state, or federal law which relates to the 
 12.27  practice of medicine, or in part regulates the practice of 
 12.28  medicine including without limitation sections 148A.02, 609.344, 
 12.29  and 609.345, or a state or federal narcotics or controlled 
 12.30  substance law. 
 12.31     (g) Engaging in any unethical conduct; conduct likely to 
 12.32  deceive, defraud, or harm the public, or demonstrating a willful 
 12.33  or careless disregard for the health, welfare or safety of a 
 12.34  patient; or medical practice which is professionally 
 12.35  incompetent, in that it may create unnecessary danger to any 
 12.36  patient's life, health, or safety, in any of which cases, proof 
 13.1   of actual injury need not be established. 
 13.2      (h) Failure to supervise a physician's assistant or failure 
 13.3   to supervise a physician under any agreement with the board. 
 13.4      (i) Aiding or abetting an unlicensed person in the practice 
 13.5   of medicine, except that it is not a violation of this paragraph 
 13.6   for a physician to employ, supervise, or delegate functions to a 
 13.7   qualified person who may or may not be required to obtain a 
 13.8   license or registration to provide health services if that 
 13.9   person is practicing within the scope of that person's license 
 13.10  or registration or delegated authority. 
 13.11     (j) Adjudication as mentally incompetent, mentally ill or 
 13.12  mentally retarded, or as a chemically dependent person, a person 
 13.13  dangerous to the public, a sexually dangerous person, or a 
 13.14  person who has a sexual psychopathic personality by a court of 
 13.15  competent jurisdiction, within or without this state.  Such 
 13.16  adjudication shall automatically suspend a license for the 
 13.17  duration thereof unless the board orders otherwise. 
 13.18     (k) Engaging in unprofessional conduct.  Unprofessional 
 13.19  conduct shall include any departure from or the failure to 
 13.20  conform to the minimal standards of acceptable and prevailing 
 13.21  medical practice in which proceeding actual injury to a patient 
 13.22  need not be established. 
 13.23     (l) Inability to practice medicine with reasonable skill 
 13.24  and safety to patients by reason of illness, drunkenness, use of 
 13.25  drugs, narcotics, chemicals or any other type of material or as 
 13.26  a result of any mental or physical condition, including 
 13.27  deterioration through the aging process or loss of motor skills. 
 13.28     (m) Revealing a privileged communication from or relating 
 13.29  to a patient except when otherwise required or permitted by law. 
 13.30     (n) Failure by a doctor of osteopathy to identify the 
 13.31  school of healing in the professional use of the doctor's name 
 13.32  by one of the following terms:  osteopathic physician and 
 13.33  surgeon, doctor of osteopathy, or D.O. 
 13.34     (o) Improper management of medical records, including 
 13.35  failure to maintain adequate medical records, to comply with a 
 13.36  patient's request made pursuant to section 144.335 or to furnish 
 14.1   a medical record or report required by law.  
 14.2      (p) Fee splitting, including without limitation: 
 14.3      (1) paying, offering to pay, receiving, or agreeing to 
 14.4   receive, a commission, rebate, or remuneration, directly or 
 14.5   indirectly, primarily for the referral of patients or the 
 14.6   prescription of drugs or devices; 
 14.7      (2) dividing fees with another physician or a professional 
 14.8   corporation, unless the division is in proportion to the 
 14.9   services provided and the responsibility assumed by each 
 14.10  professional and the physician has disclosed the terms of the 
 14.11  division; 
 14.12     (3) referring a patient to any health care provider as 
 14.13  defined in section 144.335 in which the referring physician has 
 14.14  a significant "financial or economic interest", as defined in 
 14.15  section 144.6521, subdivision 3, unless the physician has 
 14.16  disclosed the physician's own financial interest financial or 
 14.17  economic interest in accordance with section 144.6521; and 
 14.18     (4) dispensing for profit any drug or device, unless the 
 14.19  physician has disclosed the physician's own profit interest. 
 14.20  The physician must make the disclosures required in this clause 
 14.21  in advance and in writing to the patient and must include in the 
 14.22  disclosure a statement that the patient is free to choose a 
 14.23  different health care provider.  This clause does not apply to 
 14.24  the distribution of revenues from a partnership, group practice, 
 14.25  nonprofit corporation, or professional corporation to its 
 14.26  partners, shareholders, members, or employees if the revenues 
 14.27  consist only of fees for services performed by the physician or 
 14.28  under a physician's direct supervision, or to the division or 
 14.29  distribution of prepaid or capitated health care premiums, or 
 14.30  fee-for-service withhold amounts paid under contracts 
 14.31  established under other state law.  
 14.32     (q) Engaging in abusive or fraudulent billing practices, 
 14.33  including violations of the federal Medicare and Medicaid laws 
 14.34  or state medical assistance laws.  
 14.35     (r) Becoming addicted or habituated to a drug or intoxicant.
 14.36     (s) Prescribing a drug or device for other than medically 
 15.1   accepted therapeutic or experimental or investigative purposes 
 15.2   authorized by a state or federal agency or referring a patient 
 15.3   to any health care provider as defined in section 144.335 for 
 15.4   services or tests not medically indicated at the time of 
 15.5   referral.  
 15.6      (t) Engaging in conduct with a patient which is sexual or 
 15.7   may reasonably be interpreted by the patient as sexual, or in 
 15.8   any verbal behavior which is seductive or sexually demeaning to 
 15.9   a patient.  
 15.10     (u) Failure to make reports as required by section 147.111 
 15.11  or to cooperate with an investigation of the board as required 
 15.12  by section 147.131. 
 15.13     (v) Knowingly providing false or misleading information 
 15.14  that is directly related to the care of that patient unless done 
 15.15  for an accepted therapeutic purpose such as the administration 
 15.16  of a placebo. 
 15.17     (w) Aiding suicide or aiding attempted suicide in violation 
 15.18  of section 609.215 as established by any of the following: 
 15.19     (1) a copy of the record of criminal conviction or plea of 
 15.20  guilty for a felony in violation of section 609.215, subdivision 
 15.21  1 or 2; 
 15.22     (2) a copy of the record of a judgment of contempt of court 
 15.23  for violating an injunction issued under section 609.215, 
 15.24  subdivision 4; 
 15.25     (3) a copy of the record of a judgment assessing damages 
 15.26  under section 609.215, subdivision 5; or 
 15.27     (4) a finding by the board that the person violated section 
 15.28  609.215, subdivision 1 or 2.  The board shall investigate any 
 15.29  complaint of a violation of section 609.215, subdivision 1 or 2. 
 15.30     (x) Practice of a board-regulated profession under lapsed 
 15.31  or nonrenewed credentials. 
 15.32     (y) Failure to repay a state or federally secured student 
 15.33  loan in accordance with the provisions of the loan. 
 15.34     (z) Providing interstate telemedicine services other than 
 15.35  according to section 147.032. 
 15.36     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
 16.1      Sec. 17.  Minnesota Statutes 2002, section 256B.02, 
 16.2   subdivision 7, is amended to read: 
 16.3      Subd. 7.  [VENDOR OF MEDICAL CARE.] (a) "Vendor of medical 
 16.4   care" means any person or persons furnishing, within the scope 
 16.5   of the vendor's respective license, any or all of the following 
 16.6   goods or services:  medical, surgical, hospital, ambulatory 
 16.7   surgical center services, optical, visual, dental and nursing 
 16.8   services; drugs and medical supplies; appliances; laboratory, 
 16.9   diagnostic, and therapeutic services; nursing home and 
 16.10  convalescent care; screening and health assessment services 
 16.11  provided by public health nurses as defined in section 145A.02, 
 16.12  subdivision 18; health care services provided at the residence 
 16.13  of the patient if the services are performed by a public health 
 16.14  nurse and the nurse indicates in a statement submitted under 
 16.15  oath that the services were actually provided; and such other 
 16.16  medical services or supplies provided or prescribed by persons 
 16.17  authorized by state law to give such services and supplies.  The 
 16.18  term includes, but is not limited to, directors and officers of 
 16.19  corporations or members of partnerships who, either individually 
 16.20  or jointly with another or others, have the legal control, 
 16.21  supervision, or responsibility of submitting claims for 
 16.22  reimbursement to the medical assistance program.  The term only 
 16.23  includes directors and officers of corporations who personally 
 16.24  receive a portion of the distributed assets upon liquidation or 
 16.25  dissolution, and their liability is limited to the portion of 
 16.26  the claim that bears the same proportion to the total claim as 
 16.27  their share of the distributed assets bears to the total 
 16.28  distributed assets.  
 16.29     (b) "Vendor of medical care" also includes any person who 
 16.30  is credentialed as a health professional under standards set by 
 16.31  the governing body of a federally recognized Indian tribe 
 16.32  authorized under an agreement with the federal government 
 16.33  according to United States Code, title 25, section 450f, to 
 16.34  provide health services to its members, and who through a tribal 
 16.35  facility provides covered services to American Indian people 
 16.36  within a contract health service delivery area of a Minnesota 
 17.1   reservation, as defined under Code of Federal Regulations, title 
 17.2   42, section 36.22. 
 17.3      (c) A federally recognized Indian tribe that intends to 
 17.4   implement standards for credentialing health professionals must 
 17.5   submit the standards to the commissioner of human services, 
 17.6   along with evidence of meeting, exceeding, or being exempt from 
 17.7   corresponding state standards.  The commissioner shall maintain 
 17.8   a copy of the standards and supporting evidence, and shall use 
 17.9   those standards to enroll tribal-approved health professionals 
 17.10  as medical assistance providers.  For purposes of this section, 
 17.11  "Indian" and "Indian tribe" mean persons or entities that meet 
 17.12  the definition in United States Code, title 25, section 450b. 
 17.13     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2004. 
 17.14     Sec. 18.  Minnesota Statutes 2003 Supplement, section 
 17.15  256L.035, is amended to read: 
 17.16     256L.035 [LIMITED BENEFITS COVERAGE FOR CERTAIN SINGLE 
 17.17  ADULTS AND HOUSEHOLDS WITHOUT CHILDREN.] 
 17.18     (a) "Covered health services" for individuals under section 
 17.19  256L.04, subdivision 7, with income above 75 percent, but not 
 17.20  exceeding 175 percent, of the federal poverty guideline means: 
 17.21     (1) inpatient hospitalization benefits with a ten percent 
 17.22  co-payment up to $1,000 and subject to an annual limitation of 
 17.23  $10,000; 
 17.24     (2) physician services provided during an inpatient stay; 
 17.25  and 
 17.26     (3) physician services not provided during an inpatient 
 17.27  stay, outpatient hospital services, freestanding ambulatory 
 17.28  surgical center services, chiropractic services, lab and 
 17.29  diagnostic services, and prescription drugs, subject to an 
 17.30  aggregate cap of $2,000 per calendar year and the following 
 17.31  co-payments: 
 17.32     (i) $50 co-pay per emergency room visit; 
 17.33     (ii) $3 co-pay per prescription drug; and 
 17.34     (iii) $5 co-pay per nonpreventive physician visit. 
 17.35     For purposes of this subdivision, "a visit" means an 
 17.36  episode of service which is required because of a recipient's 
 18.1   symptoms, diagnosis, or established illness, and which is 
 18.2   delivered in an ambulatory setting by a physician or physician 
 18.3   ancillary. 
 18.4      Enrollees are responsible for all co-payments in this 
 18.5   subdivision. 
 18.6      (b) The November 2006 MinnesotaCare forecast for the 
 18.7   biennium beginning July 1, 2007, shall assume an adjustment in 
 18.8   the aggregate cap on the services identified in paragraph (a), 
 18.9   clause (3), in $1,000 increments up to a maximum of $10,000, but 
 18.10  not less than $2,000, to the extent that the balance in the 
 18.11  health care access fund is sufficient in each year of the 
 18.12  biennium to pay for this benefit level.  The aggregate cap shall 
 18.13  be adjusted according to the forecast. 
 18.14     (c) Reimbursement to the providers shall be reduced by the 
 18.15  amount of the co-payment, except that reimbursement for 
 18.16  prescription drugs shall not be reduced once a recipient has 
 18.17  reached the $20 per month maximum for prescription drug 
 18.18  co-payments.  The provider collects the co-payment from the 
 18.19  recipient.  Providers may not deny services to recipients who 
 18.20  are unable to pay the co-payment, except as provided in 
 18.21  paragraph (d). 
 18.22     (d) If it is the routine business practice of a provider to 
 18.23  refuse service to an individual with uncollected debt, the 
 18.24  provider may include uncollected co-payments under this 
 18.25  section.  A provider must give advance notice to a recipient 
 18.26  with uncollected debt before services can be denied. 
 18.27     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 18.28  following final enactment. 
 18.29     Sec. 19.  [APPROPRIATIONS.] 
 18.30     (a) Any money received by the commissioner of health from 
 18.31  nonstate sources to operate the adverse health care events 
 18.32  reporting system in fiscal year 2005 is appropriated to the 
 18.33  commissioner of health for that purpose. 
 18.34     (b) The annual licensing fee collected under Minnesota 
 18.35  Statutes, section 144.55, subdivision 1a, is appropriated from 
 18.36  the state government special revenue fund to the commissioner of 
 19.1   health for the purposes of regulating outpatient surgical 
 19.2   centers.