1.1                          A bill for an act 
  1.2             relating to health; providing for reporting and review 
  1.3             of certain provider expenditures; providing for audits 
  1.4             of certain referrals; amending Minnesota Statutes 
  1.5             2002, sections 62J.23, by adding a subdivision; 
  1.6             144.99, subdivision 1; proposing coding for new law in 
  1.7             Minnesota Statutes, chapter 62J. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [62J.18] [PROVIDER REPORTING IN EXCESS OF 
  1.10  $1,000,000.] 
  1.11     Subdivision 1.  [APPLICABILITY; DEFINITIONS.] (a) This 
  1.12  section applies to providers and to persons who would become 
  1.13  providers after making the expenditures described in subdivision 
  1.14  2.  
  1.15     (b) For purposes of this section, the terms used have the 
  1.16  meanings given in section 62J.17, subdivision 2. 
  1.17     Subd. 2.  [REPORTING REQUIREMENT.] (a) A provider that 
  1.18  intends to make an expenditure in excess of $1,000,000 for the 
  1.19  acquisition, by purchase or lease, of a unit of medical 
  1.20  equipment or in excess of $1,000,000 for a single capital 
  1.21  project for the purposes of providing health care services must 
  1.22  file a report with the commissioner at least 60 days before 
  1.23  making the expenditure. 
  1.24     (b) The commissioner shall maintain a database to track 
  1.25  expenditures reported under this subdivision. 
  1.26     Subd. 3.  [PUBLIC MEETING.] (a) Within 30 days from the 
  2.1   date of a report filing under subdivision 2, a third party may 
  2.2   request a public meeting on projects that exceed $2,000,000 in 
  2.3   capital cost.  The public meeting shall serve as an 
  2.4   informational forum for the provider to answer inquiries of 
  2.5   interested third parties.  
  2.6      (b) The commissioner shall arrange for and coordinate the 
  2.7   meeting on an expedited basis.  The party requesting the meeting 
  2.8   shall pay all costs related to the meeting.  
  2.9      Subd. 4.  [PUBLIC MEETING EXCEPTIONS.] (a) Subdivisions 3, 
  2.10  5, and 6 do not apply to an expenditure:  
  2.11     (1) to replace existing equipment with comparable equipment 
  2.12  used for direct patient care.  Upgrades of equipment beyond the 
  2.13  current model or comparable model must be reported; 
  2.14     (2) made by a research and teaching institution for 
  2.15  purposes of conducting medical education, medical research 
  2.16  supported or sponsored by a medical school or by a federal or 
  2.17  foundation grant, or clinical trials; 
  2.18     (3) to repair, remodel, or replace existing buildings or 
  2.19  fixtures if, in the judgment of the commissioner, the project 
  2.20  does not involve a substantial expansion of service capacity or 
  2.21  a substantial change in the nature of health care services 
  2.22  provided; 
  2.23     (4) for building maintenance including heating, water, 
  2.24  electricity, and other maintenance-related expenditures; 
  2.25     (5) for activities not directly related to the delivery of 
  2.26  patient care services, including food service, laundry, 
  2.27  housekeeping, and other service-related activities; and 
  2.28     (6) for computer equipment or data systems not directly 
  2.29  related to the delivery of patient care services, including 
  2.30  computer equipment or data systems related to medical record 
  2.31  automation. 
  2.32     (b) In addition to the exceptions listed in paragraph (a), 
  2.33  subdivisions 3, 5, and 6 do not apply to mergers, acquisitions, 
  2.34  and other changes in ownership or control that, in the judgment 
  2.35  of the commissioner, do not involve a substantial expansion of 
  2.36  service capacity or a substantial change in the nature of health 
  3.1   care services provided. 
  3.2      Subd. 5.  [HEARING.] (a) Within 30 days from the date of a 
  3.3   public meeting under subdivision 3, a third party may request 
  3.4   that the planned expenditure be subject to a hearing before the 
  3.5   commissioner.  The hearing and review of the planned expenditure 
  3.6   shall be according to the relevant provisions of the 
  3.7   Administrative Procedure Act, except as otherwise provided in 
  3.8   this subdivision. 
  3.9      (b) A hearing under this subdivision shall be a public 
  3.10  proceeding. 
  3.11     (c) A party to the hearing must pay for the party's 
  3.12  representation before the commissioner.  The party requesting 
  3.13  the hearing must pay the costs of the hearing.  In the event of 
  3.14  an appeal, each party must pay the party's respective costs, 
  3.15  except that the party bringing the appeal must pay all costs if 
  3.16  the appeal is unsuccessful. 
  3.17     (d) A hearing requested under this subdivision must proceed 
  3.18  on an expedited basis. 
  3.19     Subd. 6.  [HEARING CRITERIA; DECISION; RULES.] (a) The 
  3.20  commissioner shall consider the following criteria: 
  3.21     (1) need and access, including but not limited to: 
  3.22     (i) the need of the population served or to be served by 
  3.23  the proposed health services for those services; 
  3.24     (ii) the project's contribution to meeting the needs of the 
  3.25  medically underserved, including persons in rural areas, 
  3.26  low-income persons, racial and ethnic minorities, persons with 
  3.27  disabilities, and the elderly, as well as the extent to which 
  3.28  medically underserved residents in the provider's service area 
  3.29  are likely to have access to the proposed health service; and 
  3.30     (iii) the distance, convenience, cost of transportation, 
  3.31  and accessibility to health services for those to be served by 
  3.32  the proposed health services; 
  3.33     (2) quality of health care, including but not limited to: 
  3.34     (i) the impact of the proposed service on the quality of 
  3.35  health services available to those proposed to be served by the 
  3.36  project; and 
  4.1      (ii) the impact of the proposed service on the quality of 
  4.2   health services offered by other providers; 
  4.3      (3) cost of health care, including but not limited to: 
  4.4      (i) the financial feasibility of the proposal; 
  4.5      (ii) probable impact of the proposal on the costs of and 
  4.6   charges for providing health services by the person proposing 
  4.7   the service; 
  4.8      (iii) probable impact of the proposal on the costs of and 
  4.9   charges for health services provided by other providers; 
  4.10     (iv) probable impact of the proposal on reimbursement for 
  4.11  the proposed services; and 
  4.12     (v) the relationship, including the organizational 
  4.13  relationship, of the proposed health services to ancillary or 
  4.14  support services; 
  4.15     (4) alternatives available to the provider, including but 
  4.16  not limited to: 
  4.17     (i) the availability of alternative, less costly, or more 
  4.18  effective methods of providing the proposed health services; 
  4.19     (ii) the relationship of the proposed project to the 
  4.20  long-range development plan, if any, of the person or entity 
  4.21  providing or proposing the services; and 
  4.22     (iii) possible sharing or cooperative arrangements among 
  4.23  existing facilities and providers; and 
  4.24     (5) other considerations, including but not limited to: 
  4.25     (i) special needs and circumstances of those entities that 
  4.26  provide a substantial portion of their services or resources, or 
  4.27  both, to individuals not residing in the immediate geographic 
  4.28  area in which the entities are located, which entities may 
  4.29  include but are not limited to medical and other health 
  4.30  professional schools, multi-disciplinary clinics, and specialty 
  4.31  centers; 
  4.32     (ii) the special needs and circumstances of biomedical and 
  4.33  behavioral research projects designed to meet a national need 
  4.34  and for which local conditions offer special advantages; and 
  4.35     (iii) the impact of the proposed project on fostering 
  4.36  competition between providers. 
  5.1      (b) The commissioner may adopt rules to establish 
  5.2   additional hearing criteria. 
  5.3      (c) After applying the criteria under this subdivision, the 
  5.4   commissioner shall make findings of fact as to whether the 
  5.5   planned expenditure is needed to ensure quality health care.  If 
  5.6   the commissioner finds that the planned expenditure is not 
  5.7   needed to ensure quality health care, the commissioner shall 
  5.8   enjoin the provider from making the planned expenditure.  The 
  5.9   order of the commissioner constitutes the final decision in the 
  5.10  case. 
  5.11     Subd. 7.  [ENFORCEMENT.] The commissioner may enforce this 
  5.12  section by denying or refusing to reissue the permit, license, 
  5.13  registration, or certificate of a provider that does not comply 
  5.14  with this section, according to section 144.99, subdivision 8.  
  5.15  Compliance with this section is a condition of medical 
  5.16  assistance reimbursement.  The commissioner of employee 
  5.17  relations shall not permit a provider that does not comply with 
  5.18  this section to provide services to state employees.  
  5.19     Sec. 2.  Minnesota Statutes 2002, section 62J.23, is 
  5.20  amended by adding a subdivision to read: 
  5.21     Subd. 5.  [AUDITS OF EXEMPT PROVIDERS.] The commissioner 
  5.22  may audit the referral patterns of providers that are exempt 
  5.23  from the federal Stark Law, United States Code, title 42, 
  5.24  section 1395nn.  The commissioner has access to provider records 
  5.25  according to section 144.99, subdivision 2.  The commissioner 
  5.26  shall report to the legislature any audit results that reveal a 
  5.27  pattern of referrals by a provider for the furnishing of health 
  5.28  services to an entity with which the provider has a direct or 
  5.29  indirect financial relationship. 
  5.30     Sec. 3.  Minnesota Statutes 2002, section 144.99, 
  5.31  subdivision 1, is amended to read: 
  5.32     Subdivision 1.  [REMEDIES AVAILABLE.] The provisions of 
  5.33  chapters 103I and 157 and sections 62J.18; 115.71 to 115.77; 
  5.34  144.12, subdivision 1, paragraphs (1), (2), (5), (6), (10), 
  5.35  (12), (13), (14), and (15); 144.1201 to 144.1204; 144.121; 
  5.36  144.1222; 144.35; 144.381 to 144.385; 144.411 to 144.417; 
  6.1   144.495; 144.71 to 144.74; 144.9501 to 144.9509; 144.992; 326.37 
  6.2   to 326.45; 326.57 to 326.785; 327.10 to 327.131; and 327.14 to 
  6.3   327.28 and all rules, orders, stipulation agreements, 
  6.4   settlements, compliance agreements, licenses, registrations, 
  6.5   certificates, and permits adopted or issued by the department or 
  6.6   under any other law now in force or later enacted for the 
  6.7   preservation of public health may, in addition to provisions in 
  6.8   other statutes, be enforced under this section.