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Minnesota Legislature

Office of the Revisor of Statutes

295.582 AUTHORITY.
    Subdivision 1. Tax expense transfer. (a) A hospital, surgical center, or health care provider
that is subject to a tax under section 295.52, or a pharmacy that has paid additional expense
transferred under this section by a wholesale drug distributor, may transfer additional expense
generated by section 295.52 obligations on to all third-party contracts for the purchase of health
care services on behalf of a patient or consumer. Nothing shall prohibit a pharmacy from
transferring the additional expense generated under section 295.52 to a pharmacy benefits
manager. The additional expense transferred to the third-party purchaser or a pharmacy benefits
manager must not exceed the tax percentage specified in section 295.52 multiplied against the
gross revenues received under the third-party contract, and the tax percentage specified in section
295.52 multiplied against co-payments and deductibles paid by the individual patient or consumer.
The expense must not be generated on revenues derived from payments that are excluded from
the tax under section 295.53. All third-party purchasers of health care services including, but not
limited to, third-party purchasers regulated under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B,
65A, 65B, 79, or 79A, or under section 471.61 or 471.617, and pharmacy benefits managers must
pay the transferred expense in addition to any payments due under existing contracts with the
hospital, surgical center, pharmacy, or health care provider, to the extent allowed under federal
law. A third-party purchaser of health care services includes, but is not limited to, a health carrier
or community integrated service network that pays for health care services on behalf of patients or
that reimburses, indemnifies, compensates, or otherwise insures patients for health care services.
For purposes of this section, a pharmacy benefits manager means an entity that performs pharmacy
benefits management. A third-party purchaser or pharmacy benefits manager shall comply with
this section regardless of whether the third-party purchaser or pharmacy benefits manager is a
for-profit, not-for-profit, or nonprofit entity. A wholesale drug distributor may transfer additional
expense generated by section 295.52 obligations to entities that purchase from the wholesaler, and
the entities must pay the additional expense. Nothing in this section limits the ability of a hospital,
surgical center, pharmacy, wholesale drug distributor, or health care provider to recover all or part
of the section 295.52 obligation by other methods, including increasing fees or charges.
(b) Any hospital, surgical center, or health care provider subject to a tax under section 295.52
or a pharmacy that has paid additional expense transferred under this section by a wholesale drug
distributor may file a complaint with the commissioner responsible for regulating the third-party
purchaser if at any time the third-party purchaser fails to comply with paragraph (a).
(c) If the commissioner responsible for regulating the third-party purchaser finds at any
time that the third-party purchaser has not complied with paragraph (a), the commissioner may
take enforcement action against a third-party purchaser which is subject to the commissioner's
regulatory jurisdiction and which does not allow a hospital, surgical center, pharmacy, or provider
to pass-through the tax. The commissioner may by order fine or censure the third-party purchaser
or revoke or suspend the certificate of authority or license of the third-party purchaser to do
business in this state if the commissioner finds that the third-party purchaser has not complied
with this section. The third-party purchaser may appeal the commissioner's order through a
contested case hearing in accordance with chapter 14.
    Subd. 2. Agreement. A contracting agreement between a third-party purchaser or a
pharmacy benefits manager and a resident or nonresident pharmacy registered under chapter
151, may not prohibit:
(1) a pharmacy that has paid additional expense transferred under this section by a wholesale
drug distributor from exercising its option under this section to transfer such additional expenses
generated by the section 295.52 obligations on to the third-party purchaser or pharmacy benefits
manager; or
(2) a pharmacy that is subject to tax under section 295.52, subdivision 4, from exercising
its option under this section to recover all or part of the section 295.52 obligations from the
third-party purchaser or a pharmacy benefits manager.
History: 1993 c 345 art 13 s 22; 1Sp1993 c 6 s 29; 1994 c 625 art 13 s 18; 1995 c 234
art 9 s 14; 1997 c 31 art 4 s 12; 1997 c 225 art 3 s 21,23; 1997 c 251 s 28; 2005 c 77 s 7;
1Sp2005 c 4 art 5 s 15