Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

256.9685 ESTABLISHMENT OF INPATIENT HOSPITAL PAYMENT SYSTEM.
    Subdivision 1. Authority. (a) The commissioner shall establish procedures for determining
medical assistance and general assistance medical care payment rates under a prospective
payment system for inpatient hospital services in hospitals that qualify as vendors of medical
assistance. The commissioner shall establish, by rule, procedures for implementing this section
and sections 256.9686, 256.969, and 256.9695. Services must meet the requirements of section
256B.04, subdivision 15, or 256D.03, subdivision 7, paragraph (b), to be eligible for payment.
(b) The commissioner may reduce the types of inpatient hospital admissions that are required
to be certified as medically necessary after notice in the State Register and a 30-day comment
period.
    Subd. 1a. Administrative reconsideration. Notwithstanding sections 256B.04, subdivision
15
, and 256D.03, subdivision 7, the commissioner shall establish an administrative reconsideration
process for appeals of inpatient hospital services determined to be medically unnecessary. A
physician or hospital may request a reconsideration of the decision that inpatient hospital services
are not medically necessary by submitting a written request for review to the commissioner within
30 days after receiving notice of the decision. The reconsideration process shall take place prior
to the procedures of subdivision 1b and shall be conducted by physicians that are independent
of the case under reconsideration. A majority decision by the physicians is necessary to make a
determination that the services were not medically necessary.
    Subd. 1b. Appeal of reconsideration. Notwithstanding section 256B.72, the commissioner
may recover inpatient hospital payments for services that have been determined to be medically
unnecessary after the reconsideration and determinations. A physician or hospital may appeal
the result of the reconsideration process by submitting a written request for review to the
commissioner within 30 days after receiving notice of the action. The commissioner shall review
the medical record and information submitted during the reconsideration process and the medical
review agent's basis for the determination that the services were not medically necessary for
inpatient hospital services. The commissioner shall issue an order upholding or reversing the
decision of the reconsideration process based on the review.
    Subd. 1c. Judicial review. A hospital or physician aggrieved by an order of the
commissioner under subdivision 1b may appeal the order to the district court of the county in
which the physician or hospital is located by:
(1) serving a written copy of a notice of appeal upon the commissioner within 30 days after
the date the commissioner issued the order; and
(2) filing the original notice of appeal and proof of service with the court administrator of the
district court. The appeal shall be treated as a dispositive motion under the Minnesota General
Rules of Practice, rule 115. The district court scope of review shall be as set forth in section 14.69.
    Subd. 1d. Transmittal of record. Within 30 days after being served with the notice of
appeal, the commissioner shall transmit to the district court the original or certified copy of the
entire record considered by the commissioner in making the final agency decision. The district
court shall not consider evidence that was not included in the record before the commissioner.
    Subd. 2. Federal requirements. If it is determined that a provision of this section or section
256.9686, 256.969, or 256.9695 conflicts with existing or future requirements of the United States
government with respect to federal financial participation in medical assistance, the federal
requirements prevail. The commissioner may, in the aggregate, prospectively reduce payment
rates to avoid reduced federal financial participation resulting from rates that are in excess of
the Medicare limitations.
History: 1989 c 282 art 3 s 36; 1991 c 292 art 4 s 22; 1992 c 513 art 7 s 22; 1Sp1993 c 1
art 5 s 17; 1995 c 207 art 6 s 16-18; 1997 c 187 art 1 s 19; 1998 c 407 art 4 s 8; 1999 c 245
art 4 s 24; 2002 c 277 s 7