2006 Minnesota Statutes

256.9657 PROVIDER SURCHARGES.
    Subdivision 1. Nursing home license surcharge. (a) Effective July 1, 1993, each
non-state-operated nursing home licensed under chapter 144A shall pay to the commissioner an
annual surcharge according to the schedule in subdivision 4. The surcharge shall be calculated as
$620 per licensed bed. If the number of licensed beds is reduced, the surcharge shall be based on
the number of remaining licensed beds the second month following the receipt of timely notice
by the commissioner of human services that beds have been delicensed. The nursing home must
notify the commissioner of health in writing when beds are delicensed. The commissioner of
health must notify the commissioner of human services within ten working days after receiving
written notification. If the notification is received by the commissioner of human services by the
15th of the month, the invoice for the second following month must be reduced to recognize
the delicensing of beds. Beds on layaway status continue to be subject to the surcharge. The
commissioner of human services must acknowledge a medical care surcharge appeal within 30
days of receipt of the written appeal from the provider.
(b) Effective July 1, 1994, the surcharge in paragraph (a) shall be increased to $625.
(c) Effective August 15, 2002, the surcharge under paragraph (b) shall be increased to $990.
(d) Effective July 15, 2003, the surcharge under paragraph (c) shall be increased to $2,815.
(e) The commissioner may reduce, and may subsequently restore, the surcharge under
paragraph (d) based on the commissioner's determination of a permissible surcharge.
(f) Between April 1, 2002, and August 15, 2004, a facility governed by this subdivision may
elect to assume full participation in the medical assistance program by agreeing to comply with
all of the requirements of the medical assistance program, including the rate equalization law in
section 256B.48, subdivision 1, paragraph (a), and all other requirements established in law or
rule, and to begin intake of new medical assistance recipients. Rates will be determined under
Minnesota Rules, parts 9549.0010 to 9549.0080. Notwithstanding section 256B.431, subdivision
27 , paragraph (i), rate calculations will be subject to limits as prescribed in rule and law. Other
than the adjustments in sections 256B.431, subdivisions 30 and 32; 256B.437, subdivision 3,
paragraph (b), Minnesota Rules, part 9549.0057, and any other applicable legislation enacted prior
to the finalization of rates, facilities assuming full participation in medical assistance under this
paragraph are not eligible for any rate adjustments until the July 1 following their settle-up period.
    Subd. 1a. Waiver request. The commissioner shall request a waiver from the secretary of
health and human services to: (1) exclude from the surcharge under subdivision 1 a nursing
home that provides all services free of charge; (2) make a pro rata reduction in the surcharge
paid by a nursing home that provides a portion of its services free of charge; and (3) limit the
hospital surcharge to acute care hospitals only. If a waiver is approved under this subdivision, the
commissioner shall adjust the nursing home surcharge accordingly. Any waivers granted by the
federal government shall be effective on or after October 1, 1992.
    Subd. 1b.[Repealed, 1998 c 254 art 1 s 68]
    Subd. 1c. Waiver implementation. If a waiver is approved under subdivision 1b, the
commissioner shall implement subdivision 1b as follows:
(a) The commissioner, in cooperation with the Board of Medical Practice, shall notify each
physician whose license is scheduled to be issued or renewed between April 1 and September 30
that an application to be excused from the surcharge must be received by the commissioner prior
to September 1 of that year for the period of 12 consecutive calendar months beginning December
15. For each physician whose license is scheduled to be issued or renewed between October 1 and
March 31, the application must be received from the physician by March 1 for the period of 12
consecutive calendar months beginning June 15. For each physician whose license is scheduled
to be issued or renewed between April 1 and September 30, the commissioner shall make the
notification required in this paragraph by July 1. For each physician whose license is scheduled
to be issued or renewed between October 1 and March 31, the commissioner shall make the
notification required in this paragraph by January 1.
(b) The commissioner shall establish an application form for waiver applications. Each
physician who applies to be excused from the surcharge under subdivision 1b, paragraph (a),
clause (1), must include with the application:
(1) a statement from the operator of the facility at which the physician provides services, that
the physician provides services without charge; and
(2) a statement by the physician that the physician will not charge for any physician services
during the period for which the exemption from the surcharge is granted.
Each physician who applies to be excused from the surcharge under subdivision 1b,
paragraph (a), clauses (2) to (5), must include with the application:
(i) the physician's own statement certifying that the physician does not intend to practice
medicine and will not charge for any physician services during the period for which the exemption
from the surcharge is granted;
(ii) the physician's own statement describing in general the reason for the leave of absence
from the practice of medicine and the anticipated date when the physician will resume the practice
of medicine, if applicable;
(iii) an attending physician's statement certifying that the applicant has a terminal illness or
permanent disability, if applicable; and
(iv) the physician's own statement indicating on what date the physician retired or became
unemployed, if applicable.
(c) The commissioner shall notify in writing the physicians who are excused from the
surcharge under subdivision 1b.
(d) A physician who decides to charge for physician services prior to the end of the period
for which the exemption from the surcharge has been granted under subdivision 1b, paragraph
(a), clause (1), or to return to the practice of medicine prior to the end of the period for which
the exemption from the surcharge has been granted under subdivision 1b, paragraph (a), clause
(2), (4), or (5), may do so by notifying the commissioner and shall be responsible for payment of
the full surcharge for that period.
(e) Whenever the commissioner determines that the number of physicians likely to be
excused from the surcharge under subdivision 1b may cause the physician surcharge to violate the
requirements of Public Law 102-234 or regulations adopted under that law, the commissioner
shall immediately notify the chairs of the senate Health Care Committee and Health Care and
Family Services Funding Division and the house of representatives Human Services Committee
and Human Services Funding Division.
    Subd. 2. Hospital surcharge. (a) Effective October 1, 1992, each Minnesota hospital except
facilities of the federal Indian Health Service and regional treatment centers shall pay to the
medical assistance account a surcharge equal to 1.4 percent of net patient revenues excluding
net Medicare revenues reported by that provider to the health care cost information system
according to the schedule in subdivision 4.
(b) Effective July 1, 1994, the surcharge under paragraph (a) is increased to 1.56 percent.
(c) Notwithstanding the Medicare cost finding and allowable cost principles, the hospital
surcharge is not an allowable cost for purposes of rate setting under sections 256.9685 to 256.9695.
    Subd. 3. Surcharge on HMOs and community integrated service networks. (a) Effective
October 1, 1992, each health maintenance organization with a certificate of authority issued by
the commissioner of health under chapter 62D and each community integrated service network
licensed by the commissioner under chapter 62N shall pay to the commissioner of human
services a surcharge equal to six-tenths of one percent of the total premium revenues of the
health maintenance organization or community integrated service network as reported to the
commissioner of health according to the schedule in subdivision 4.
(b) For purposes of this subdivision, total premium revenue means:
(1) premium revenue recognized on a prepaid basis from individuals and groups for provision
of a specified range of health services over a defined period of time which is normally one month,
excluding premiums paid to a health maintenance organization or community integrated service
network from the Federal Employees Health Benefit Program;
(2) premiums from Medicare wrap-around subscribers for health benefits which supplement
Medicare coverage;
(3) Medicare revenue, as a result of an arrangement between a health maintenance
organization or a community integrated service network and the Centers for Medicare and
Medicaid Services of the federal Department of Health and Human Services, for services to a
Medicare beneficiary, excluding Medicare revenue that states are prohibited from taxing under
sections 1854, 1860D-12, and 1876 of title XVIII of the federal Social Security Act, codified as
United States Code, title 42, sections 1395mm, 1395w-112, and 1395w-24, respectively, as
they may be amended from time to time; and
(4) medical assistance revenue, as a result of an arrangement between a health maintenance
organization or community integrated service network and a Medicaid state agency, for services
to a medical assistance beneficiary.
If advance payments are made under clause (1) or (2) to the health maintenance organization
or community integrated service network for more than one reporting period, the portion of the
payment that has not yet been earned must be treated as a liability.
(c) When a health maintenance organization or community integrated service network merges
or consolidates with or is acquired by another health maintenance organization or community
integrated service network, the surviving corporation or the new corporation shall be responsible
for the annual surcharge originally imposed on each of the entities or corporations subject to the
merger, consolidation, or acquisition, regardless of whether one of the entities or corporations
does not retain a certificate of authority under chapter 62D or a license under chapter 62N.
(d) Effective July 1 of each year, the surviving corporation's or the new corporation's
surcharge shall be based on the revenues earned in the second previous calendar year by all of the
entities or corporations subject to the merger, consolidation, or acquisition regardless of whether
one of the entities or corporations does not retain a certificate of authority under chapter 62D or a
license under chapter 62N until the total premium revenues of the surviving corporation include
the total premium revenues of all the merged entities as reported to the commissioner of health.
(e) When a health maintenance organization or community integrated service network,
which is subject to liability for the surcharge under this chapter, transfers, assigns, sells, leases, or
disposes of all or substantially all of its property or assets, liability for the surcharge imposed
by this chapter is imposed on the transferee, assignee, or buyer of the health maintenance
organization or community integrated service network.
(f) In the event a health maintenance organization or community integrated service network
converts its licensure to a different type of entity subject to liability for the surcharge under this
chapter, but survives in the same or substantially similar form, the surviving entity remains
liable for the surcharge regardless of whether one of the entities or corporations does not retain a
certificate of authority under chapter 62D or a license under chapter 62N.
(g) The surcharge assessed to a health maintenance organization or community integrated
service network ends when the entity ceases providing services for premiums and the cessation is
not connected with a merger, consolidation, acquisition, or conversion.
    Subd. 3a. ICF/MR license surcharge. Effective July 1, 2003, each non-state-operated
facility as defined under section 256B.501, subdivision 1, shall pay to the commissioner an
annual surcharge according to the schedule in subdivision 4, paragraph (d). The annual surcharge
shall be $1,040 per licensed bed. If the number of licensed beds is reduced, the surcharge shall
be based on the number of remaining licensed beds the second month following the receipt of
timely notice by the commissioner of human services that beds have been delicensed. The facility
must notify the commissioner of health in writing when beds are delicensed. The commissioner of
health must notify the commissioner of human services within ten working days after receiving
written notification. If the notification is received by the commissioner of human services by the
15th of the month, the invoice for the second following month must be reduced to recognize the
delicensing of beds. The commissioner may reduce, and may subsequently restore, the surcharge
under this subdivision based on the commissioner's determination of a permissible surcharge.
    Subd. 4. Payments into the account. (a) Payments to the commissioner under subdivisions
1 to 3 must be paid in monthly installments due on the 15th of the month beginning October 15,
1992. The monthly payment must be equal to the annual surcharge divided by 12. Payments to the
commissioner under subdivisions 2 and 3 for fiscal year 1993 must be based on calendar year
1990 revenues. Effective July 1 of each year, beginning in 1993, payments under subdivisions 2
and 3 must be based on revenues earned in the second previous calendar year.
(b) Effective October 1, 1995, and each October 1 thereafter, the payments in subdivisions 2
and 3 must be based on revenues earned in the previous calendar year.
(c) If the commissioner of health does not provide by August 15 of any year data needed
to update the base year for the hospital and health maintenance organization surcharges, the
commissioner of human services may estimate base year revenue and use that estimate for the
purposes of this section until actual data is provided by the commissioner of health.
(d) Payments to the commissioner under subdivision 3a must be paid in monthly installments
due on the 15th of the month beginning July 15, 2003. The monthly payment must be equal to
the annual surcharge divided by 12.
    Subd. 5.[Repealed, 1992 c 513 art 7 s 135]
    Subd. 6. Notice; appeals. At least 30 days prior to the date the payment is due, the
commissioner shall give each provider a written notice of each payment due. A provider may
request a contested case hearing under chapter 14 within 30 days of receipt of the notice. The
decision of the commissioner regarding the amount due stands until the appeal is decided. The
provider shall pay the contested payment at the time of appeal with settle-up at the time of appeal
resolution.
    Subd. 7. Collection; civil penalties. The provisions of sections 270C.31, except subdivisions
5 and 7; 270C.32, except subdivisions 6 and 10; 270C.33; 270C.61, subdivision 2; and 289A.35
to 289A.50 relating to the authority to audit, assess, collect, and pay refunds of other state taxes
may be implemented by the commissioner of human services with respect to the tax, penalty, and
interest imposed by this section. The commissioner of human services shall impose civil penalties
for violation of this section as provided in section 289A.60, and the tax and penalties are subject
to interest at the rate provided in section 270C.40. The commissioner of human services shall
have the power to abate penalties and interest when discrepancies occur resulting from, but not
limited to, circumstances of error and mail delivery. The commissioner of human services shall
bring appropriate civil actions to collect provider payments due under this section.
    Subd. 7a. Withholding. If any provider obligated to pay an annual surcharge under this
section is more than two months delinquent in the timely payment of a monthly surcharge
installment payment, the provisions in paragraphs (a) to (f) apply.
(a) The department may withhold some or all of the amount of the delinquent surcharge,
together with any interest and penalties due and owing on those amounts, from any money the
department owes to the provider. The department may, at its discretion, also withhold future
surcharge installment payments from any money the department owes the provider as those
installments become due and owing. The department may continue this withholding until the
department determines there is no longer any need to do so.
(b) The department shall give prior notice of the department's intention to withhold by
mailing a written notice to the provider at the address to which remittance advices are mailed
or faxing a copy of the notice to the provider at least ten business days before the date of the
first payment period for which the withholding begins. The notice may be sent by ordinary or
certified mail, or facsimile, and shall be deemed received as of the date of mailing or receipt
of the facsimile. The notice shall:
(i) state the amount of the delinquent surcharge;
(ii) state the amount of the withholding per payment period;
(iii) state the date on which the withholding is to begin;
(iv) state whether the department intends to withhold future installments of the provider's
surcharge payments;
(v) inform the provider of their rights to informally object to the proposed withholding and
to appeal the withholding as provided for in this subdivision;
(vi) state that the provider may prevent the withholding during the pendency of their appeal
by posting a bond; and
(vii) state other contents as the department deems appropriate.
(c) The provider may informally object to the withholding in writing anytime before the
withholding begins. An informal objection shall not stay or delay the commencement of the
withholding. The department may postpone the commencement of the withholding as deemed
appropriate and shall not be required to give another notice at the end of the postponement and
before commencing the withholding. The provider shall have the right to appeal any withholding
from remittances by filing an appeal with Ramsey County District Court and serving notice of
the appeal on the department within 30 days of the date of the written notice of the withholding.
Notice shall be given and the appeal shall be heard no later than 45 days after the appeal is
filed. In a hearing of the appeal, the department's action shall be sustained if the department
proves the amount of the delinquent surcharges or overpayment the provider owes, plus any
accrued interest and penalties, has not been repaid. The department may continue withholding for
delinquent and current surcharge installment payments during the pendency of an appeal unless
the provider posts a bond from a surety company licensed to do business in Minnesota in favor of
the department in an amount equal to two times the provider's total annual surcharge payment for
the fiscal year in which the appeal is filed with the department.
(d) The department shall refund any amounts due to the provider under any final
administrative or judicial order or decree which fully and finally resolves the appeal together with
interest on those amounts at the rate of three percent per annum simple interest computed from
the date of each withholding, as soon as practical after entry of the order or decree.
(e) The commissioner, or the commissioner's designee, may enter into written settlement
agreements with a provider to resolve disputes and other matters involving unpaid surcharge
installment payments or future surcharge installment payments.
(f) Notwithstanding any law to the contrary, all unpaid surcharges, plus any accrued interest
and penalties, shall be overpayments for purposes of section 256B.0641.
    Subd. 8. Commissioner's duties. The commissioner of human services shall report to the
legislature quarterly on the first day of January, April, July, and October regarding the provider
surcharge program. The report shall include information on total billings, total collections, and
administrative expenditures. The report on January 1, 1993, shall include information on all
surcharge billings, collections, federal matching payments received, efforts to collect unpaid
amounts, and administrative costs pertaining to the surcharge program in effect from July 1, 1991,
to September 30, 1992. The surcharge shall be adjusted by inflationary and caseload changes in
future bienniums to maintain reimbursement of health care providers in accordance with the
requirements of the state and federal laws governing the medical assistance program, including
the requirements of the Medicaid moratorium amendments of 1991 found in Public Law No.
102-234. The commissioner shall request the Minnesota congressional delegation to support a
change in federal law that would prohibit federal disallowances for any state that makes a good
faith effort to comply with Public Law 102-234 by enacting conforming legislation prior to the
issuance of federal implementing regulations.
History: 1991 c 292 art 4 s 21; 1992 c 513 art 7 s 16-21,133; 1993 c 345 art 1 s 21; 1Sp1993
c 1 art 5 s 11-16; 1994 c 625 art 8 s 61; 1995 c 207 art 6 s 14,15; 1997 c 225 art 2 s 57; 1998 c
254 art 1 s 67,69; 1998 c 407 art 4 s 7; 1Sp2001 c 9 art 2 s 12; 2002 c 220 art 14 s 5; 2002 c 277
s 32; 2002 c 374 art 10 s 4; 2002 c 375 art 2 s 12; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 2 s
13-15; 2005 c 17 art 3 s 3; 2005 c 151 art 2 s 4; 1Sp2005 c 4 art 8 s 11