2007 Minnesota Statutes

62J.23 PROVIDER CONFLICTS OF INTEREST.
    Subdivision 1. Rules prohibiting conflicts of interest. The commissioner of health shall
adopt rules restricting financial relationships or payment arrangements involving health care
providers under which a person benefits financially by referring a patient to another person,
recommending another person, or furnishing or recommending an item or service. The rules must
be compatible with, and no less restrictive than, the federal Medicare antikickback statute, in
section 1128B(b) of the Social Security Act, United States Code, title 42, section 1320a-7b(b),
and regulations adopted under it. However, the commissioner's rules may be more restrictive
than the federal law and regulations and may apply to additional provider groups and business
and professional arrangements. When the state rules restrict an arrangement or relationship
that is permissible under federal laws and regulations, including an arrangement or relationship
expressly permitted under the federal safe harbor regulations, the fact that the state requirement is
more restrictive than federal requirements must be clearly stated in the rule.
    Subd. 2. Restrictions. (a) From July 1, 1992, until rules are adopted by the commissioner
under this section, the restrictions in the federal Medicare antikickback statutes in section
1128B(b) of the Social Security Act, United States Code, title 42, section 1320a-7b(b), and rules
adopted under the federal statutes, apply to all persons in the state, regardless of whether the
person participates in any state health care program.
(b) Nothing in paragraph (a) shall be construed to prohibit an individual from receiving a
discount or other reduction in price or a limited-time free supply or samples of a prescription drug,
medical supply, or medical equipment offered by a pharmaceutical manufacturer, medical supply
or device manufacturer, health plan company, or pharmacy benefit manager, so long as:
(1) the discount or reduction in price is provided to the individual in connection with
the purchase of a prescription drug, medical supply, or medical equipment prescribed for that
individual;
(2) it otherwise complies with the requirements of state and federal law applicable to
enrollees of state and federal public health care programs;
(3) the discount or reduction in price does not exceed the amount paid directly by the
individual for the prescription drug, medical supply, or medical equipment; and
(4) the limited-time free supply or samples are provided by a physician or pharmacist, as
provided by the federal Prescription Drug Marketing Act.
(c) No benefit, reward, remuneration, or incentive for continued product use may be provided
to an individual or an individual's family by a pharmaceutical manufacturer, medical supply or
device manufacturer, or pharmacy benefit manager, except that this prohibition does not apply to:
(1) activities permitted under paragraph (b);
(2) a pharmaceutical manufacturer, medical supply or device manufacturer, health plan
company, or pharmacy benefit manager providing to a patient, at a discount or reduced price or
free of charge, ancillary products necessary for treatment of the medical condition for which the
prescription drug, medical supply, or medical equipment was prescribed or provided; and
(3) a pharmaceutical manufacturer, medical supply or device manufacturer, health plan
company, or pharmacy benefit manager providing to a patient a trinket or memento of insignificant
value.
(d) Nothing in this subdivision shall be construed to prohibit a health plan company from
offering a tiered formulary with different co-payment or cost-sharing amounts for different drugs.
    Subd. 3. Penalty. The commissioner may assess a fine against a person who violates this
section. The amount of the fine is $1,000 or 110 percent of the estimated financial benefit that
the person realized as a result of the prohibited financial arrangement or payment relationship,
whichever is greater. A person who is in compliance with a transition plan approved by
the commissioner under subdivision 2, or who is making a good faith effort to obtain the
commissioner's approval of a transition plan, is not in violation of this section.
    Subd. 4. Chapter 62N networks. (a) The legislature finds that the formation and operation
of community integrated service networks will accomplish the purpose of the federal Medicare
antikickback statute, which is to reduce the overutilization and overcharging that may result from
inappropriate provider incentives. Accordingly, it is the public policy of the state of Minnesota to
support the development of community integrated service networks. The legislature finds that the
federal Medicare antikickback laws should not be interpreted to interfere with the development
of community integrated service networks or to impose liability for arrangements between an
integrated service network or a community integrated service network and its participating entities.
(b) An arrangement between a community integrated service network and any or all of its
participating entities is not subject to liability under subdivisions 1 and 2.
    Subd. 5. Audits of exempt providers. The commissioner may audit the referral patterns of
providers that qualify for exceptions under the federal Stark Law, United States Code, title 42,
section 1395nn. The commissioner has access to provider records according to section 144.99,
subdivision 2 . The commissioner shall report to the legislature any audit results that reveal a
pattern of referrals by a provider for the furnishing of health services to an entity with which the
provider has a direct or indirect financial relationship.
History: 1992 c 549 art 1 s 12; 1993 c 247 art 1 s 17; 1993 c 345 art 6 s 13; 1994 c 625 art
8 s 23; 1997 c 225 art 2 s 62; 1Sp2003 c 14 art 7 s 12; 2004 c 280 s 1; 2004 c 288 art 6 s 7