2006 Minnesota Statutes

CHAPTER 62T. COMMUNITY PURCHASING ARRANGEMENTS

62T.01 DEFINITIONS.
    Subdivision 1. Scope. For purposes of this chapter, the terms in this section have the
meanings given.
    Subd. 2. Health care purchasing alliance. "Health care purchasing alliance" means a
business organization created under this chapter to negotiate the purchase of health care services
for employers. Nothing in this chapter shall be deemed to regulate or impose any requirements
on a self-insured employer or labor union. A health care purchasing alliance may include a
grouping of:
(1) businesses, including small businesses with one employee. The businesses may or may
not be organized under section 62Q.17 as a purchasing pool;
(2) trade association members or church organizations under section 60A.02 or union
members who are not in a self-insured benefit plan;
(3) multiple employer welfare associations under chapter 62H;
(4) municipalities, townships, or counties;
(5) other government entities; or
(6) any combination of clauses (1) to (5).
The alliance may determine the definition of a business of one employee, but must adhere to
its definition and show no bias in selection of members based on that definition.
    Subd. 3. Accountable provider network. "Accountable provider network" means a
group of health care providers organized to market health care services on a risk-sharing or
non-risk-sharing basis with a health care purchasing alliance. Accountable provider networks
shall operate as not-for-profit entities or as health care cooperatives, as allowed under chapter
62R. This chapter applies only when an accountable provider network is marketing and selling
services and benefits to the employees of businesses as authorized in section 62T.05.
    Subd. 4. Commissioner. "Commissioner" means the commissioner of health.
History: 1997 c 225 art 5 s 1

62T.02 PURCHASING ALLIANCES.
    Subdivision 1. Registration. Purchasing alliances must register prior to offering coverage,
and annually on July 1 thereafter, with the commissioner on a form prescribed by the
commissioner.
    Subd. 2. Common factors. All participants in a purchasing alliance must live within a
common geographic region, be employed in a similar occupation, or share some other common
factor as approved by the commissioner. The membership criteria must not be designed to include
disproportionately employers, groups, or individuals likely to have low costs of health coverage,
or to exclude disproportionately employers, groups, or individuals likely to have high costs
of health coverage.
    Subd. 3. Seasonal employees. A purchasing alliance may define eligible employees to
include seasonal employees. For purposes of this chapter, "seasonal employee" means an
employee who is employed on a full-time basis for at least six months during the calendar year
and is unemployed for no longer than four months during the calendar year. If seasonal employees
are included:
(1) the alliance must not show bias in the selection of members based on the percentage of
seasonal employees employed by an employer member;
(2) prior to issuance or renewal, the employer must inform the alliance that it will include
seasonal employees;
(3) the employer must cover seasonal employees for the entire term of its plan year; and
(4) the purchasing alliance may require an employer-member contribution of at least 50
percent of the cost of employee coverage during the months the seasonal employee is unemployed.
History: 1997 c 225 art 5 s 2; 2004 c 268 s 10; 2004 c 288 art 6 s 9

62T.025 EMPLOYER-MEMBER CONTRIBUTION.
If an employer-member of a purchasing alliance can demonstrate that the member has not
offered employee health coverage for a year or more, the member may contribute 25 percent
or more of the cost of employee coverage for up to 36 months. This provision only applies to
rural purchasing alliances organized under this chapter and operating prior to May 1, 2000. The
affected purchasing alliances may develop membership criteria which disallow an employer
contribution below 50 percent.
History: 2000 c 295 s 1

62T.03 APPLICATION OF OTHER LAWS.
    Subdivision 1. State law. An accountable provider network is subject to all requirements
applicable to a health plan company licensed in the state, except as otherwise noted in this
chapter. An accountable provider network and a health care purchasing alliance must comply
with all requirements of chapter 62L, except for modifications and waivers permitted under this
chapter. A contracting arrangement between a health care purchasing alliance and an accountable
provider network for provision of health care benefits must provide consumer protection functions
comparable to those currently required of a health plan company licensed under section 62N.25,
and other statutes referenced in that section, except for modifications and waivers permitted
under this chapter.
    Subd. 2. Federal law. A self-insured employer may participate as an affiliate member of
a purchasing alliance without participation affecting the employer's standing under the federal
Employee Retirement Income Security Act (ERISA) of 1974. An affiliate member is one that may
purchase administrative services with the purchasing alliance and may participate in activities
undertaken to educate and promote health improvement of the purchasing alliance enrollees or
community residents.
History: 1997 c 225 art 5 s 3; 2000 c 295 s 2

62T.04 COMPLAINT SYSTEM.
Accountable provider networks must establish and maintain an enrollee complaint system as
required under sections 62Q.68 to 62Q.72 or as required by a contract with a purchasing alliance.
The contract must be approved by the commissioner. The accountable provider network may
contract with the health care purchasing alliance or a vendor for operation of this system. The
commissioner may not waive any enrollee rights relating to external review.
History: 1997 c 225 art 5 s 4; 1999 c 239 s 40; 2000 c 295 s 3

62T.05 BENEFITS.
An accountable provider network may offer and sell any benefits permitted to be offered
and sold by health plan companies under Minnesota law. An accountable provider network may,
after consultation with the purchasing alliance, offer only one benefit plan to employer-members
of the alliance.
History: 1997 c 225 art 5 s 5; 2000 c 295 s 4

62T.06 WAIVERS.
    Subdivision 1. Authorization. The commissioner may grant waivers from the requirements
of law for the contracting arrangement between a health care purchasing alliance and an
accountable provider network in the areas listed in subdivisions 2 to 4. The commissioner may
not waive the following state consumer protection and quality assurance laws:
(1) laws requiring that enrollees be informed of any restrictions, requirements, or limitations
on coverage, services, or access to specialists and other providers;
(2) laws allowing consumers to complain to or appeal to a state regulatory agency if denied
benefits or services;
(3) laws prohibiting gag clauses and other restrictions on communication between a patient
and their physician or provider;
(4) laws allowing consumers to obtain information on provider financial incentives, which
may affect treatment;
(5) laws requiring the submission of information needed to monitor quality of care and
enrollee rights, except the submission may be done in a manner approved by the commissioner
under subdivision 4;
(6) laws protecting enrollee privacy and confidentiality of records;
(7) minimum standards for adequate provider network capacity and geographic access
to services;
(8) laws assuring continuity of care when a patient must change providers;
(9) laws governing coverage of emergency services;
(10) laws prohibiting excessive or unreasonable administrative fees or expenses; and
(11) other laws or rules that are directly related to quality of care, consumer protection,
and due process rights.
    Subd. 2. Solvency protection. (a) The commissioner may waive the requirements of sections
62N.27 to 62N.32, and may substitute capital and surplus requirements that are reduced from the
levels required of other risk-bearing entities in order to reflect its reduced risk exposure. If risk is
being underwritten, the underwriter cannot have more than 25 percent of the representation on the
governing board of the accountable provider network. The reduced requirements must include at
least the following levels of capital and surplus: (i) a deposit of $500,000 and (ii) the greater of
an estimated 15 percent of gross premium revenues or twice the net retained annual risk up to
$750,000 on a single enrollee. Net retained annual risk may be, for example, the lowest annual
deductible under a provider stop-loss insurance policy that covers all costs above the deductible.
Assets supporting the deposit must meet the standards for deposits referenced in section 62N.32
or be guaranteed by an entity that is approved and can be monitored by the commissioner.
Assets supporting the capital must meet the investment guidelines referenced in section 62N.27.
Members of a purchasing alliance may assist in meeting the solvency requirements through a
subordinated solvency contribution under a contract approved by the commissioner. For the
purposes of this subdivision, "subordinated solvency contribution" means a contribution to the
accountable provider network by a purchasing alliance member that is evidenced by a promissory
note or other instrument that allows for repayment of the contribution in the manner provided
in a contract approved by the commissioner.
(b) An accountable provider network may propose a method of reporting income, expenses,
claims payments, and other financial information in a manner which adequately demonstrates
ongoing compliance with the standards for capital, surplus, and claims reserves agreed to under
this waiver.
(c) An accountable provider network may demonstrate ability to continue to deliver the
contracted health care services to the purchasing alliance through arrangements which ensure
that, subject to 60 days' notice of intent to discontinue the contracting arrangement, provider
participants will continue to meet their obligation to provide health care services to enrollees for
a period of 60 days.
    Subd. 3. Marketing and disclosure. The accountable provider network, in conjunction
with the health care purchasing alliance, may propose alternative methods to present marketing
and disclosure information which assure the accountability to consumers who are offered and
who receive their services.
    Subd. 4. Quality assurance. The accountable provider network may propose an alternative
quality assurance program which incorporates effective methods for reviewing and evaluating
data related to quality of care and ways to identify and correct quality problems.
History: 1997 c 225 art 5 s 6; 2000 c 295 s 5,6

62T.07 CRITERIA FOR GRANTING WAIVERS.
The commissioner may approve a request for waiver under section 62T.06 if the applicant
demonstrates that the contracting arrangement between a health care purchasing alliance and an
accountable provider network will meet the following criteria:
(a) The arrangement would be likely to result in:
(1) more choice in benefits and prices;
(2) lower costs;
(3) increased access to health care coverage by small businesses;
(4) increased access to providers who have demonstrated a long-term commitment to the
community being serviced; or
(5) increased quality of health care than would otherwise occur under the existing market
conditions. In the event that a proposed arrangement appears likely to improve one or two of the
criteria at the expense of another one or two of the criteria, the commissioner shall not approve
the waiver.
(b) The proposed alternative methods would provide equal or improved results in consumer
protection than would result under the existing consumer protections requirements.
History: 1997 c 225 art 5 s 7

62T.08 SUPERVISION AND REVOCATION OF WAIVERS.
(a) The commissioner shall appropriately supervise and monitor approved waivers.
(b) The commissioner may revoke approval of a waiver if the contracting arrangement no
longer satisfies the criteria in section 62T.07, paragraphs (a) and (b).
History: 1997 c 225 art 5 s 8

62T.09 MINNESOTA COMPREHENSIVE HEALTH ASSOCIATION.
A health care purchasing alliance must pay the assessment required of contributing members
pursuant to section 62E.11.
History: 1997 c 225 art 5 s 9

62T.10 MINNESOTACARE TAX.
An accountable provider network shall file with the commissioner of revenue all returns and
pay to the commissioner of revenue all amounts required under chapter 297I.
History: 1997 c 225 art 5 s 10; 2000 c 394 art 2 s 17

62T.11 DUTIES OF COMMISSIONER.
(a) By July 1, 1997, the commissioner shall make available application forms for licensure as
an accountable provider network. The accountable provider network may begin doing business
after application has been approved.
(b) Upon receipt of an application for a certificate of authority, the commissioner shall grant
or deny licensure and waivers requested within 90 days of receipt of a complete application if all
requirements are substantially met. For a period of six years after July 1, 1997, the commissioner
may approve up to five applications, none of which may be from health plan companies. If
no written response has been received within 90 days, the application is approved. When the
commissioner denies an application or waiver request, the commissioner shall notify the applicant
in writing specifically stating the grounds for the denial and specific suggestions for how to
remedy the denial. The commissioner will entertain reconsiderations. Within 90 days after the
denial, the applicant may file a written request for an administrative hearing and review of the
commissioner's determination. The hearing is subject to judicial review as provided by chapter 14.
(c) All monitoring, enforcement, and rulemaking powers available under chapter 62N are
granted to the commissioner to assure continued compliance with provisions of this chapter. The
commissioner shall honor the intent of this section to foster community-focused, affordable health
coverage for small employers and their employees.
(d) The commissioner may contract with other entities as necessary to carry out the
responsibilities in this chapter.
History: 1997 c 225 art 5 s 11; 2000 c 295 s 7

62T.12 FEES.
Every accountable provider network subject to this chapter shall pay to the commissioner
fees as prescribed by the commissioner pursuant to section 144.122. The initial fees are:
(1) filing an application for licensure, $500;
(2) filing an amendment to a license, $90;
(3) filing an annual report, $200;
(4) filing of renewal of licensure based on a fee of $1,000 per 1,000 enrollees, with renewal
every three years; and
(5) other filing fees as specified by rule.
History: 1997 c 225 art 5 s 12

62T.13 [Repealed, 2000 c 295 s 8]