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Minnesota Legislature

Office of the Revisor of Statutes

256B.031 PREPAID HEALTH PLANS.
    Subdivision 1. Contracts. The commissioner may contract with health insurers licensed
and operating under chapters 60A and 62A, nonprofit health service plans licensed and operating
under chapter 62C, health maintenance organizations licensed and operating under chapter
62D, and vendors of medical care and organizations participating in prepaid programs under
section 256D.03, subdivision 4, clause (b), to provide medical services to medical assistance
recipients. Notwithstanding any other law, health insurers may enter into contracts with the
commissioner under this section. As a condition of the contract, health insurers and health
service plan corporations must agree to comply with the requirements of section 62D.04,
subdivision 1
, clauses (a), (b), (c), (d), and (f), and provide a complaint procedure that satisfies
the requirements of section 62D.11. Nothing in this section permits health insurers not licensed
as health maintenance organizations under chapter 62D to offer a prepaid health plan as defined
in section 256B.02, subdivision 12, to persons other than those receiving medical assistance or
general assistance medical care under this section. Contracts between the commissioner and a
prepaid health plan are exempt from the set-aside and preference provisions of section 16C.16,
subdivisions 6, paragraph (a)
, and 7. Contracts must specify the services that are included in
the per capita rate. Contracts must specify those services that are to be eligible for risk sharing
between the prepaid health plan and the state. Contracts must also state that payment must be
made within 60 days after the month of coverage.
    Subd. 2. Services. State contracts for these services must assure recipients of at least the
comprehensive health services defined in sections 256B.02, subdivision 8, and 256B.0625, except
services defined in section 256B.0625, subdivisions 2, 5, 18, and 19a, and except services defined
as chemical dependency services and mental health services.
Contracts under this section must include provision for assessing pregnant women to
determine their risk of poor pregnancy outcome. Contracts must also include provision for
treatment of women found to be at risk of poor pregnancy outcome.
    Subd. 3. Information required. Prepaid health plans under contract must provide
information to the commissioner according to the contract specifications. The information must
include, at a minimum, the number of people receiving services, the number of encounters, the
types of services received, evidence of an operating quality assurance program, and information
about the use of and actual recoveries of available third-party resources. A plan under contract to
provide services in a county must provide the county agency with the most current listing of the
health care providers whose services are covered by the plan.
    Subd. 4. Prepaid health plan rates. For payments made during calendar year 1988,
the monthly maximum allowable rate established by the commissioner of human services for
payment to prepaid health plans must not exceed 90 percent of the projected average monthly per
capita fee-for-service medical assistance costs for state fiscal year 1988 for recipients of the aid to
families with dependent children program formerly codified in sections 256.72 to 256.87. The
base year for projecting the average monthly per capita fee-for-service medical assistance costs
is state fiscal year 1986. A maximum allowable per capita rate must be established collectively
for Anoka, Carver, Dakota, Hennepin, Ramsey, St. Louis, Scott, and Washington Counties.
A separate maximum allowable per capita rate must be established collectively for all other
counties. The maximum allowable per capita rate may be adjusted to reflect utilization differences
among eligible classes of recipients. For payments made during calendar year 1989, the maximum
allowable rate must be calculated in the same way as 1988 rates, except the base year is state
fiscal year 1987. For payments made during calendar year 1990 and later years, the commissioner
shall consult with an independent actuary in establishing prepayment rates, but shall retain final
control over the rate methodology. Rates established for prepaid health plans must be based on the
services that the prepaid health plan provides under contract with the commissioner.
    Subd. 5. Free choice limited. (a) The commissioner may require recipients of the Minnesota
family investment program to enroll in a prepaid health plan and receive services from or through
the prepaid health plan, with the following exceptions:
(1) recipients who are refugees and whose health services are reimbursed 100 percent by
the federal government; and
(2) recipients who are placed in a foster home or facility. If placement occurs before the
seventh day prior to the end of any month, the recipient will be disenrolled from the recipient's
prepaid health plan effective the first day of the following month. If placement occurs after the
seventh day before the end of any month, that recipient will be disenrolled from the prepaid health
plan on the first day of the second month following placement. The prepaid health plan must
provide all services set forth in subdivision 2 during the interim period.
Enrollment in a prepaid health plan is mandatory only when recipients have a choice of at
least two prepaid health plans.
(b) Recipients who become eligible on or after December 1, 1987, must choose a health plan
within 30 days of the date eligibility is determined. At the time of application, the local agency
shall ask the recipient whether the recipient has a primary health care provider. If the recipient has
not chosen a health plan within 30 days but has provided the local agency with the name of a
primary health care provider, the local agency shall determine whether the provider participates in
a prepaid health plan available to the recipient and, if so, the local agency shall select that plan
on the recipient's behalf. If the recipient has not provided the name of a primary health care
provider who participates in an available prepaid health plan, commissioner shall randomly
assign the recipient to a health plan.
(c) If possible, the local agency shall ask whether the recipient has a primary health care
provider and the procedures under paragraph (b) shall apply. If a recipient does not choose a
prepaid health plan by this date, the commissioner shall randomly assign the recipient to a health
plan.
(d) The commissioner shall request a waiver from the federal Centers for Medicare and
Medicaid Services to limit a recipient's ability to change health plans to once every six or 12
months. If such a waiver is obtained, each recipient must be enrolled in the health plan for a
minimum of six or 12 months. A recipient may change health plans once within the first 60
days after initial enrollment.
(e) Women who are receiving medical assistance due to pregnancy and later become eligible
for the Minnesota family investment program are not required to choose a prepaid health plan
until 60 days postpartum. An infant born as a result of that pregnancy must be enrolled in a
prepaid health plan at the same time as the mother.
(f) If third-party coverage is available to a recipient through enrollment in a prepaid health
plan through employment, through coverage by the former spouse, or if a duty of support has
been imposed by law, order, decree, or judgment of a court under chapter 518A, the obligee or
recipient shall participate in the prepaid health plan in which the obligee has enrolled provided
that the commissioner has contracted with the plan.
    Subd. 6. Ombudsman. The commissioner shall designate an ombudsman to advocate for
persons required to enroll in prepaid health plans under this section. The ombudsman shall
advocate for recipients enrolled in prepaid health plans through complaint and appeal procedures
and ensure that necessary medical services are provided either by the prepaid health plan directly
or by referral to appropriate social services. At the time of enrollment in a prepaid health plan,
the local agency shall inform recipients about the ombudsman program and their right to a
resolution of a complaint by the prepaid health plan if they experience a problem with the plan
or its providers.
    Subd. 7. Services pending appeal. If the recipient appeals in writing to the state agency
on or before the tenth day after the decision of the prepaid health plan to reduce, suspend, or
terminate services which the recipient had been receiving, and the treating physician or another
plan physician orders the services to be continued at the previous level, the prepaid health plan
must continue to provide services at a level equal to the level ordered by the plan's physician until
the state agency renders its decision.
    Subd. 8. Case management. The commissioner shall prepare a report to the legislature by
January 1988, that describes the issues involved in successfully implementing a case management
system in counties where the commissioner has fewer than two prepaid health plans under contract
to provide health care services to eligible classes of recipients. In the report the commissioner
shall address which health care providers could be case managers, the responsibilities of the case
manager, the assumption of risk by the case manager, the services to be provided either directly or
by referral, reimbursement concerns, federal waivers that may be required, and other issues that
may affect the quality and cost of care under such a system.
    Subd. 9. Prepayment coordinator. The local agency shall designate a prepayment
coordinator to assist the state agency in implementing this section, section 256B.69, and section
256D.03, subdivision 4. Assistance must include educating recipients about available health care
options, enrolling recipients under subdivision 5, providing necessary eligibility and enrollment
information to health plans and the state agency, and coordinating complaints and appeals with
the ombudsman established in subdivision 6.
    Subd. 10. Impact on public or teaching hospitals and community clinics. (a) Before
implementing prepaid programs in counties with a county operated or affiliated public teaching
hospital or a hospital or clinic operated by the University of Minnesota, the commissioner shall
consider the risks the prepaid program creates for the hospital and allow the county or hospital the
opportunity to participate in the program, provided the terms of participation in the program are
competitive with the terms of other participants.
(b) Prepaid health plans serving counties with a nonprofit community clinic or community
health services agency must contract with the clinic or agency to provide services to clients who
choose to receive services from the clinic or agency, if the clinic or agency agrees to payment rates
that are competitive with rates paid to other health plan providers for the same or similar services.
    Subd. 11. Reimbursement limitation; providers not with prepaid health plan. A prepaid
health plan may limit any reimbursement it may be required to pay to providers not employed
by or under contract with the prepaid health plan to the medical assistance rates for medical
assistance enrollees, and the general assistance medical care rates for general assistance medical
care enrollees, paid by the commissioner of human services to providers for services to recipients
not enrolled in a prepaid health plan.
History: 1987 c 403 art 2 s 76; 1988 c 689 art 2 s 142,268; 1989 c 282 art 3 s 40; 1991 c
292 art 4 s 31,32; 1998 c 386 art 2 s 77; 1999 c 159 s 51,52; 2000 c 260 s 30; 2002 c 277 s 32;
2005 c 164 s 29; 1Sp2005 c 7 s 28