SF 1208

  1.1                          A bill for an act 
  1.2             relating to health insurance; repealing the health 
  1.3             care commission; modifying the regional coordinating 
  1.4             boards; modifying the health technology advisory 
  1.5             committee; expanding the eligibility of the 
  1.6             MinnesotaCare program; modifying the enforcement 
  1.7             mechanisms for the provider tax pass-through; 
  1.8             modifying mandatory Medicare assignment; amending 
  1.9             Minnesota Statutes 1996, sections 62A.61; 62J.07, 
  1.10            subdivisions 1 and 3; 62J.09, subdivision 1; 62J.15, 
  1.11            subdivision 1; 62J.152, subdivisions 1, 2, 4, and 5; 
  1.12            62J.17, subdivision 6a; 62J.22; 62J.25; 62J.2914, 
  1.13            subdivision 1; 62J.2915; 62J.2916, subdivision 1; 
  1.14            62J.2917, subdivision 2; 62J.2921, subdivision 2; 
  1.15            62J.451, subdivision 6b; 62N.25, subdivision 5; 
  1.16            62Q.03, subdivision 5a; 62Q.33, subdivision 2; 
  1.17            256.9354, subdivision 5; 256.9355, by adding a 
  1.18            subdivision; and 295.582; repealing Minnesota Statutes 
  1.19            1996, sections 62J.04, subdivisions 4 and 7; 62J.05; 
  1.20            62J.051; 62J.06; 62J.09, subdivision 3a; 62N.02, 
  1.21            subdivision 3; 62Q.165, subdivision 3; 62Q.25; 62Q.29; 
  1.22            and 62Q.41; Laws 1993, chapter 247, article 4, section 
  1.23            8; Laws 1994, chapter 625, article 5, section 5, 
  1.24            subdivision 1, as amended; Laws 1995, chapter 96, 
  1.25            section 2; and Laws 1995, First Special Session 
  1.26            chapter 3, article 13, section 2. 
  1.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.28     Section 1.  Minnesota Statutes 1996, section 62A.61, is 
  1.29  amended to read: 
  1.30     62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO 
  1.31  DETERMINE USUAL AND CUSTOMARY FEES.] 
  1.32     (a) A health carrier that bases reimbursement to health 
  1.33  care providers upon a usual and customary fee must maintain in 
  1.34  its office a copy of a description of the methodology used to 
  1.35  calculate fees including at least the following: 
  1.36     (1) the frequency of the determination of usual and 
  2.1   customary fees; 
  2.2      (2) a general description of the methodology used to 
  2.3   determine usual and customary fees; and 
  2.4      (3) the percentile of usual and customary fees that 
  2.5   determines the maximum allowable reimbursement. 
  2.6      (b) A health carrier must provide a copy of the information 
  2.7   described in paragraph (a) to the Minnesota health care 
  2.8   commission, the commissioner of health, or the commissioner of 
  2.9   commerce, upon request. 
  2.10     (c) The commissioner of health or the commissioner of 
  2.11  commerce, as appropriate, may use to enforce this section any 
  2.12  enforcement powers otherwise available to the commissioner with 
  2.13  respect to the health carrier.  The appropriate commissioner 
  2.14  shall enforce compliance with a request made under this section 
  2.15  by the Minnesota health care commission, at the request of the 
  2.16  commissioner.  The commissioner of health or commerce, as 
  2.17  appropriate, may require health carriers to provide the 
  2.18  information required under this section and may use any powers 
  2.19  granted under other laws relating to the regulation of health 
  2.20  carriers to enforce compliance. 
  2.21     (d) For purposes of this section, "health carrier" has the 
  2.22  meaning given in section 62A.011. 
  2.23     Sec. 2.  Minnesota Statutes 1996, section 62J.07, 
  2.24  subdivision 1, is amended to read: 
  2.25     Subdivision 1.  [LEGISLATIVE OVERSIGHT.] The legislative 
  2.26  commission on health care access reviews the activities of the 
  2.27  commissioner of health, the state health care 
  2.28  commission regional coordinating boards, the health technology 
  2.29  advisory committee, and all other state agencies involved in the 
  2.30  implementation and administration of this chapter, including 
  2.31  efforts to obtain federal approval through waivers and other 
  2.32  means.  
  2.33     Sec. 3.  Minnesota Statutes 1996, section 62J.07, 
  2.34  subdivision 3, is amended to read: 
  2.35     Subd. 3.  [REPORTS TO THE COMMISSION.] The commissioner of 
  2.36  health and the Minnesota health care commission, the regional 
  3.1   coordinating boards, and the health technology advisory 
  3.2   committee shall report on their activities and the activities of 
  3.3   the regional boards annually and at other times at the request 
  3.4   of the legislative commission on health care access.  The 
  3.5   commissioners of health, commerce, and human services shall 
  3.6   provide periodic reports to the legislative commission on the 
  3.7   progress of rulemaking that is authorized or required under this 
  3.8   act and shall notify members of the commission when a draft of a 
  3.9   proposed rule has been completed and scheduled for publication 
  3.10  in the State Register.  At the request of a member of the 
  3.11  commission, a commissioner shall provide a description and a 
  3.12  copy of a proposed rule. 
  3.13     Sec. 4.  Minnesota Statutes 1996, section 62J.09, 
  3.14  subdivision 1, is amended to read: 
  3.15     Subdivision 1.  [GENERAL DUTIES.] (a) The commissioner 
  3.16  shall divide the state into five rural regions, which shall 
  3.17  include all areas of the state, except for the seven-county 
  3.18  metropolitan area. 
  3.19     The (b) Each rural region shall establish a locally 
  3.20  controlled regional coordinating boards are locally controlled 
  3.21  boards board consisting of providers, health plan companies, 
  3.22  employers, consumers, and elected officials.  Regional 
  3.23  coordinating boards may: 
  3.24     (1) undertake voluntary activities to educate consumers, 
  3.25  providers, and purchasers about community plans and projects 
  3.26  promoting health care cost containment, consumer accountability, 
  3.27  access, and quality and efforts to achieve public health goals; 
  3.28     (2) make recommendations to the commissioner regarding ways 
  3.29  of improving affordability, accessibility, and quality of health 
  3.30  care in the region and throughout the state; 
  3.31     (3) provide technical assistance to parties interested in 
  3.32  establishing or operating a community integrated service network 
  3.33  or integrated service network within the region.  This 
  3.34  assistance must complement assistance provided by the 
  3.35  commissioner under section 62N.23; 
  3.36     (4) advise the commissioner on public health goals, taking 
  4.1   into consideration the relevant portions of the community health 
  4.2   service plans, plans required by the Minnesota comprehensive 
  4.3   adult mental health act, the Minnesota comprehensive children's 
  4.4   mental health act, and the community social service act plans 
  4.5   developed by county boards or community health boards in the 
  4.6   region under chapters 145A, 245, and 256E; 
  4.7      (5) prepare an annual regional education plan that is 
  4.8   consistent with and supportive of public health goals identified 
  4.9   by community health boards in the region; and 
  4.10     (6) serve as advisory bodies to identify potential 
  4.11  applicants for federal Health Professional Shortage Area and 
  4.12  federal Medically Underserved Area designation as requested by 
  4.13  the commissioner. 
  4.14     Sec. 5.  Minnesota Statutes 1996, section 62J.15, 
  4.15  subdivision 1, is amended to read: 
  4.16     Subdivision 1.  [HEALTH TECHNOLOGY ADVISORY COMMITTEE.] The 
  4.17  Minnesota health care commission shall convene legislative 
  4.18  commission on health care access shall convene an advisory 
  4.19  committee to conduct evaluations of existing research and 
  4.20  technology assessments conducted by other entities of new and 
  4.21  existing health care technologies.  The advisory committee may 
  4.22  include members of the state commission and other persons 
  4.23  appointed by the commission.  The advisory committee must 
  4.24  include at least one person representing physicians, at least 
  4.25  one person representing hospitals, and at least one person 
  4.26  representing the health care technology industry.  Health care 
  4.27  technologies include high-cost drugs, devices, procedures, or 
  4.28  processes applied to human health care, such as high-cost 
  4.29  transplants and expensive scanners and imagers.  The advisory 
  4.30  committee is governed by section 15.0575, subdivision 3, except 
  4.31  that members do not receive per diem payments. 
  4.32     Sec. 6.  Minnesota Statutes 1996, section 62J.152, 
  4.33  subdivision 1, is amended to read: 
  4.34     Subdivision 1.  [GENERALLY.] The health technology advisory 
  4.35  committee established in section 62J.15 shall: 
  4.36     (1) develop criteria and processes for evaluating health 
  5.1   care technology assessments made by other entities; 
  5.2      (2) conduct evaluations of specific technologies and their 
  5.3   specific use and application; 
  5.4      (3) report the results of the evaluations to the 
  5.5   commissioner and the Minnesota health care 
  5.6   commission legislative commission on health care access; and 
  5.7      (4) carry out other duties relating to health technology 
  5.8   assigned by the commission legislature or the legislative 
  5.9   commission on health care access. 
  5.10     Sec. 7.  Minnesota Statutes 1996, section 62J.152, 
  5.11  subdivision 2, is amended to read: 
  5.12     Subd. 2.  [PRIORITIES FOR DESIGNATING TECHNOLOGIES FOR 
  5.13  ASSESSMENT.] The health technology advisory committee shall 
  5.14  consider the following criteria in designating technologies for 
  5.15  evaluation: 
  5.16     (1) the level of controversy within the medical or 
  5.17  scientific community, including questionable or undetermined 
  5.18  efficacy; 
  5.19     (2) the cost implications; 
  5.20     (3) the potential for rapid diffusion; 
  5.21     (4) the impact on a substantial patient population; 
  5.22     (5) the existence of alternative technologies; 
  5.23     (6) the impact on patient safety and health outcome; 
  5.24     (7) the public health importance; 
  5.25     (8) the level of public and professional demand; 
  5.26     (9) the social, ethical, and legal concerns; and 
  5.27     (10) the prevalence of the disease or condition. 
  5.28  The committee may give different weights or attach different 
  5.29  importance to each of the criteria, depending on the technology 
  5.30  being considered.  The committee shall consider any additional 
  5.31  criteria approved by the commissioner and the Minnesota health 
  5.32  care commission legislative commission on health care access. 
  5.33     Sec. 8.  Minnesota Statutes 1996, section 62J.152, 
  5.34  subdivision 4, is amended to read: 
  5.35     Subd. 4.  [TECHNOLOGY EVALUATION PROCESS.] (a) The health 
  5.36  technology advisory committee shall collect and evaluate studies 
  6.1   and research findings on the technologies selected for 
  6.2   evaluation from as wide of a range of sources as needed, 
  6.3   including, but not limited to:  federal agencies or other units 
  6.4   of government, international organizations conducting health 
  6.5   care technology assessments, health carriers, insurers, 
  6.6   manufacturers, professional and trade associations, nonprofit 
  6.7   organizations, and academic institutions.  The health technology 
  6.8   advisory committee may use consultants or experts and solicit 
  6.9   testimony or other input as needed to evaluate a specific 
  6.10  technology. 
  6.11     (b) When the evaluation process on a specific technology 
  6.12  has been completed, the health technology advisory committee 
  6.13  shall submit a preliminary report to the health care 
  6.14  commission legislative commission on health care access and 
  6.15  publish a summary of the preliminary report in the State 
  6.16  Register with a notice that written comments may be submitted.  
  6.17  The preliminary report must include the results of the 
  6.18  technology assessment evaluation, studies and research findings 
  6.19  considered in conducting the evaluation, and the health 
  6.20  technology advisory committee's summary statement about the 
  6.21  evaluation.  Any interested persons or organizations may submit 
  6.22  to the health technology advisory committee written comments 
  6.23  regarding the technology evaluation within 30 days from the date 
  6.24  the preliminary report was published in the State Register.  The 
  6.25  health technology advisory committee's final report on its 
  6.26  technology evaluation must be submitted to the health care 
  6.27  commission commissioner, to the legislature, and to the 
  6.28  information clearinghouse.  A summary of written comments 
  6.29  received by the health technology advisory committee within the 
  6.30  30-day period must be included in the final report.  The health 
  6.31  care commission shall review the final report and prepare its 
  6.32  comments and recommendations.  Before completing its final 
  6.33  comments and recommendations, the health care commission shall 
  6.34  provide adequate public notice that testimony will be accepted 
  6.35  by the health care commission.  The health care commission shall 
  6.36  then forward the final report, its comments and recommendations, 
  7.1   and a summary of the public's comments to the commissioner and 
  7.2   information clearinghouse. 
  7.3      (c) The reports of the health technology advisory committee 
  7.4   and the comments and recommendations of the health care 
  7.5   commission should not eliminate or bar new technology, and are 
  7.6   not rules as defined in the administrative procedure act. 
  7.7      Sec. 9.  Minnesota Statutes 1996, section 62J.152, 
  7.8   subdivision 5, is amended to read: 
  7.9      Subd. 5.  [USE OF TECHNOLOGY EVALUATION.] (a) The final 
  7.10  report on the technology evaluation and the commission's 
  7.11  comments and recommendations may be used: 
  7.12     (1) by the commissioner in retrospective and prospective 
  7.13  review of major expenditures; 
  7.14     (2) by integrated service networks and other group 
  7.15  purchasers and by employers, in making coverage, contracting, 
  7.16  purchasing, and reimbursement decisions; 
  7.17     (3) by organizations in the development of practice 
  7.18  parameters; 
  7.19     (4) by health care providers in making decisions about 
  7.20  adding or replacing technology and the appropriate use of 
  7.21  technology; 
  7.22     (5) by consumers in making decisions about treatment; 
  7.23     (6) by medical device manufacturers in developing and 
  7.24  marketing new technologies; and 
  7.25     (7) as otherwise needed by health care providers, health 
  7.26  care plans, consumers, and purchasers. 
  7.27     (b) At the request of the commissioner, the health care 
  7.28  commission, in consultation with the health technology advisory 
  7.29  committee, shall submit specific recommendations relating to 
  7.30  technologies that have been evaluated under this section for 
  7.31  purposes of retrospective and prospective review of major 
  7.32  expenditures and coverage, contracting, purchasing, and 
  7.33  reimbursement decisions affecting state programs. 
  7.34     Sec. 10.  Minnesota Statutes 1996, section 62J.17, 
  7.35  subdivision 6a, is amended to read: 
  7.36     Subd. 6a.  [PROSPECTIVE REVIEW AND APPROVAL.] (a) 
  8.1   [REQUIREMENT.] No health care provider subject to prospective 
  8.2   review under this subdivision shall make a major spending 
  8.3   commitment unless:  
  8.4      (1) the provider has filed an application with the 
  8.5   commissioner to proceed with the major spending commitment and 
  8.6   has provided all supporting documentation and evidence requested 
  8.7   by the commissioner; and 
  8.8      (2) the commissioner determines, based upon this 
  8.9   documentation and evidence, that the major spending commitment 
  8.10  is appropriate under the criteria provided in subdivision 5a in 
  8.11  light of the alternatives available to the provider.  
  8.12     (b)  [APPLICATION.] A provider subject to prospective 
  8.13  review and approval shall submit an application to the 
  8.14  commissioner before proceeding with any major spending 
  8.15  commitment.  The application must address each item listed in 
  8.16  subdivision 4a, paragraph (a), and must also include 
  8.17  documentation to support the response to each item.  The 
  8.18  provider may submit information, with supporting documentation, 
  8.19  regarding why the major spending commitment should be excepted 
  8.20  from prospective review under subdivision 7.  The submission may 
  8.21  be made either in addition to or instead of the submission of 
  8.22  information relating to the items listed in subdivision 4a, 
  8.23  paragraph (a).  
  8.24     (c)  [REVIEW.] The commissioner shall determine, based upon 
  8.25  the information submitted, whether the major spending commitment 
  8.26  is appropriate under the criteria provided in subdivision 5a, or 
  8.27  whether it should be excepted from prospective review under 
  8.28  subdivision 7.  In making this determination, the commissioner 
  8.29  may also consider relevant information from other sources.  At 
  8.30  the request of the commissioner, the Minnesota health care 
  8.31  commission health technology advisory committee shall convene an 
  8.32  expert review panel made up of persons with knowledge and 
  8.33  expertise regarding medical equipment, specialized services, 
  8.34  health care expenditures, and capital expenditures to review 
  8.35  applications and make recommendations to the commissioner.  The 
  8.36  commissioner shall make a decision on the application within 60 
  9.1   days after an application is received. 
  9.2      (d)  [PENALTIES AND REMEDIES.] The commissioner of health 
  9.3   has the authority to issue fines, seek injunctions, and pursue 
  9.4   other remedies as provided by law. 
  9.5      Sec. 11.  Minnesota Statutes 1996, section 62J.22, is 
  9.6   amended to read: 
  9.7      62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.] 
  9.8      The commissioner of health shall seek the full 
  9.9   participation of federal health care programs under this 
  9.10  chapter, including Medicare, medical assistance, veterans 
  9.11  administration programs, and other federal programs.  The 
  9.12  commissioner of human services shall under the direction of the 
  9.13  health care commission submit waiver requests and take other 
  9.14  action necessary to obtain federal approval to allow 
  9.15  participation of the medical assistance program.  Other state 
  9.16  agencies shall provide assistance at the request of the 
  9.17  commission.  If federal approval is not given for one or more 
  9.18  federal programs, data on the amount of health care spending 
  9.19  that is collected under section 62J.04 shall be adjusted so that 
  9.20  state and regional spending limits take into account the failure 
  9.21  of the federal program to participate. 
  9.22     Sec. 12.  Minnesota Statutes 1996, section 62J.25, is 
  9.23  amended to read: 
  9.24     62J.25 [MANDATORY MEDICARE ASSIGNMENT.] 
  9.25     (a) Effective January 1, 1993, a health care provider 
  9.26  authorized to participate in the Medicare program shall not 
  9.27  charge to or collect from a Medicare beneficiary who is a 
  9.28  Minnesota resident any amount in excess of 115 percent of the 
  9.29  Medicare-approved amount for any Medicare-covered service 
  9.30  provided. 
  9.31     (b) Effective January 1, 1994, a health care provider 
  9.32  authorized to participate in the Medicare program shall not 
  9.33  charge to or collect from a Medicare beneficiary who is a 
  9.34  Minnesota resident any amount in excess of 110 percent of the 
  9.35  Medicare-approved amount for any Medicare-covered service 
  9.36  provided. 
 10.1      (c) Effective January 1, 1995, a health care provider 
 10.2   authorized to participate in the Medicare program shall not 
 10.3   charge to or collect from a Medicare beneficiary who is a 
 10.4   Minnesota resident any amount in excess of 105 percent of the 
 10.5   Medicare-approved amount for any Medicare-covered service 
 10.6   provided. 
 10.7      (d) Effective January 1, 1996, a health care provider 
 10.8   authorized to participate in the Medicare program shall not 
 10.9   charge to or collect from a Medicare beneficiary who is a 
 10.10  Minnesota resident any amount in excess of the Medicare-approved 
 10.11  amount for any Medicare-covered service provided. 
 10.12     (e) This section does not apply to ambulance services as 
 10.13  defined in section 144.801, subdivision 4, or medical supplies 
 10.14  and equipment. 
 10.15     Sec. 13.  Minnesota Statutes 1996, section 62J.2914, 
 10.16  subdivision 1, is amended to read: 
 10.17     Subdivision 1.  [DISCLOSURE.] An application for approval 
 10.18  must include, to the extent applicable, disclosure of the 
 10.19  following: 
 10.20     (1) a descriptive title; 
 10.21     (2) a table of contents; 
 10.22     (3) exact names of each party to the application and the 
 10.23  address of the principal business office of each party; 
 10.24     (4) the name, address, and telephone number of the persons 
 10.25  authorized to receive notices and communications with respect to 
 10.26  the application; 
 10.27     (5) a verified statement by a responsible officer of each 
 10.28  party to the application attesting to the accuracy and 
 10.29  completeness of the enclosed information; 
 10.30     (6) background information relating to the proposed 
 10.31  arrangement, including: 
 10.32     (i) a description of the proposed arrangement, including a 
 10.33  list of any services or products that are the subject of the 
 10.34  proposed arrangement; 
 10.35     (ii) an identification of any tangential services or 
 10.36  products associated with the services or products that are the 
 11.1   subject of the proposed arrangement; 
 11.2      (iii) a description of the geographic territory involved in 
 11.3   the proposed arrangement; 
 11.4      (iv) if the geographic territory described in item (iii), 
 11.5   is different from the territory in which the applicants have 
 11.6   engaged in the type of business at issue over the last five 
 11.7   years, a description of how and why the geographic territory 
 11.8   differs; 
 11.9      (v) identification of all products or services that a 
 11.10  substantial share of consumers would consider substitutes for 
 11.11  any service or product that is the subject of the proposed 
 11.12  arrangement; 
 11.13     (vi) identification of whether any services or products of 
 11.14  the proposed arrangement are currently being offered, capable of 
 11.15  being offered, utilized, or capable of being utilized by other 
 11.16  providers or purchasers in the geographic territory described in 
 11.17  item (iii); 
 11.18     (vii) identification of the steps necessary, under current 
 11.19  market and regulatory conditions, for other parties to enter the 
 11.20  territory described in item (iii) and compete with the 
 11.21  applicant; 
 11.22     (viii) a description of the previous history of dealings 
 11.23  between the parties to the application; 
 11.24     (ix) a detailed explanation of the projected effects, 
 11.25  including expected volume, change in price, and increased 
 11.26  revenue, of the arrangement on each party's current businesses, 
 11.27  both generally as well as the aspects of the business directly 
 11.28  involved in the proposed arrangement; 
 11.29     (x) the present market share of the parties to the 
 11.30  application and of others affected by the proposed arrangement, 
 11.31  and projected market shares after implementation of the proposed 
 11.32  arrangement; 
 11.33     (xi) a statement of why the projected levels of cost, 
 11.34  access, or quality could not be achieved in the existing market 
 11.35  without the proposed arrangement; and 
 11.36     (xii) an explanation of how the arrangement relates to any 
 12.1   Minnesota health care commission or applicable regional 
 12.2   coordinating board plans for delivery of health care; and 
 12.3      (7) a detailed explanation of how the transaction will 
 12.4   affect cost, access, and quality.  The explanation must address 
 12.5   the factors in section 62J.2917, subdivision 2, paragraphs (b) 
 12.6   to (d), to the extent applicable. 
 12.7      Sec. 14.  Minnesota Statutes 1996, section 62J.2915, is 
 12.8   amended to read: 
 12.9      62J.2915 [NOTICE AND COMMENT.] 
 12.10     Subdivision 1.  [NOTICE.] The commissioner shall cause the 
 12.11  notice described in section 62J.2914, subdivision 2, to be 
 12.12  published in the State Register and sent to the Minnesota health 
 12.13  care commission, the regional coordinating boards for any 
 12.14  regions that include all or part of the territory covered by the 
 12.15  proposed arrangement, and any person who has requested to be 
 12.16  placed on a list to receive notice of applications.  The 
 12.17  commissioner may maintain separate notice lists for different 
 12.18  regions of the state.  The commissioner may also send a copy of 
 12.19  the notice to any person together with a request that the person 
 12.20  comment as provided under subdivision 2.  Copies of the request 
 12.21  must be provided to the applicant. 
 12.22     Subd. 2.  [COMMENTS.] Within 20 days after the notice is 
 12.23  published, any person may mail to the commissioner written 
 12.24  comments with respect to the application.  Within 30 days after 
 12.25  the notice is published, the Minnesota health care commission or 
 12.26  any regional coordinating board may mail to the commissioner 
 12.27  comments with respect to the application.  Persons submitting 
 12.28  comments shall provide a copy of the comments to the applicant.  
 12.29  The applicant may mail to the commissioner written responses to 
 12.30  any comments within ten days after the deadline for mailing such 
 12.31  comments.  The applicant shall send a copy of the response to 
 12.32  the person submitting the comment. 
 12.33     Sec. 15.  Minnesota Statutes 1996, section 62J.2916, 
 12.34  subdivision 1, is amended to read: 
 12.35     Subdivision 1.  [CHOICE OF PROCEDURES.] After the 
 12.36  conclusion of the period provided in section 62J.2915, 
 13.1   subdivision 2, for the applicant to respond to comments, the 
 13.2   commissioner shall select one of the three procedures provided 
 13.3   in subdivision 2.  In determining which procedure to use, the 
 13.4   commissioner shall consider the following criteria: 
 13.5      (1) the size of the proposed arrangement, in terms of 
 13.6   number of parties and amount of money involved; 
 13.7      (2) the complexity of the proposed arrangement; 
 13.8      (3) the novelty of the proposed arrangement; 
 13.9      (4) the substance and quantity of the comments received; 
 13.10     (5) any comments received from the Minnesota health care 
 13.11  commission or regional coordinating boards; and 
 13.12     (6) the presence or absence of any significant gaps in the 
 13.13  factual record. 
 13.14     If the applicant demands a contested case hearing no later 
 13.15  than the conclusion of the period provided in section 62J.2915, 
 13.16  subdivision 2, for the applicant to respond to comments, the 
 13.17  commissioner shall not select a procedure.  Instead, the 
 13.18  applicant shall be given a contested case proceeding as a matter 
 13.19  of right. 
 13.20     Sec. 16.  Minnesota Statutes 1996, section 62J.2917, 
 13.21  subdivision 2, is amended to read: 
 13.22     Subd. 2.  [FACTORS.] (a)  [GENERALLY APPLICABLE FACTORS.] 
 13.23  In making a determination about cost, access, and quality, the 
 13.24  commissioner may consider the following factors, to the extent 
 13.25  relevant: 
 13.26     (1) whether the proposal is compatible with the cost 
 13.27  containment plan or other plan of the Minnesota health care 
 13.28  commission or the applicable regional plans of the regional 
 13.29  coordinating boards; 
 13.30     (2) market structure: 
 13.31     (i) actual and potential sellers and buyers, or providers 
 13.32  and purchasers; 
 13.33     (ii) actual and potential consumers; 
 13.34     (iii) geographic market area; and 
 13.35     (iv) entry conditions; 
 13.36     (3) current market conditions; 
 14.1      (4) the historical behavior of the market; 
 14.2      (5) performance of other, similar arrangements; 
 14.3      (6) whether the proposal unnecessarily restrains 
 14.4   competition or restrains competition in ways not reasonably 
 14.5   related to the purposes of this chapter; and 
 14.6      (7) the financial condition of the applicant. 
 14.7      (b)  [COST.] The commissioner's analysis of cost must focus 
 14.8   on the individual consumer of health care.  Cost savings to be 
 14.9   realized by providers, health carriers, group purchasers, or 
 14.10  other participants in the health care system are relevant only 
 14.11  to the extent that the savings are likely to be passed on to the 
 14.12  consumer.  However, where an application is submitted by 
 14.13  providers or purchasers who are paid primarily by third party 
 14.14  payers unaffiliated with the applicant, it is sufficient for the 
 14.15  applicant to show that cost savings are likely to be passed on 
 14.16  to the unaffiliated third party payers; the applicants do not 
 14.17  have the burden of proving that third party payers with whom the 
 14.18  applicants are not affiliated will pass on cost savings to 
 14.19  individuals receiving coverage through the third party payers.  
 14.20  In making determinations as to costs, the commissioner may 
 14.21  consider: 
 14.22     (1) the cost savings likely to result to the applicant; 
 14.23     (2) the extent to which the cost savings are likely to be 
 14.24  passed on to the consumer and in what form; 
 14.25     (3) the extent to which the proposed arrangement is likely 
 14.26  to result in cost shifting by the applicant onto other payers or 
 14.27  purchasers of other products or services; 
 14.28     (4) the extent to which the cost shifting by the applicant 
 14.29  is likely to be followed by other persons in the market; 
 14.30     (5) the current and anticipated supply and demand for any 
 14.31  products or services at issue; 
 14.32     (6) the representations and guarantees of the applicant and 
 14.33  their enforceability; 
 14.34     (7) likely effectiveness of regulation by the commissioner; 
 14.35     (8) inferences to be drawn from market structure; 
 14.36     (9) the cost of regulation, both for the state and for the 
 15.1   applicant; and 
 15.2      (10) any other factors tending to show that the proposed 
 15.3   arrangement is or is not likely to reduce cost. 
 15.4      (c)  [ACCESS.] In making determinations as to access, the 
 15.5   commissioner may consider: 
 15.6      (1) the extent to which the utilization of needed health 
 15.7   care services or products by the intended targeted population is 
 15.8   likely to increase or decrease.  When a proposed arrangement is 
 15.9   likely to increase access in one geographic area, by lowering 
 15.10  prices or otherwise expanding supply, but limits access in 
 15.11  another geographic area by removing service capabilities from 
 15.12  that second area, the commissioner shall articulate the criteria 
 15.13  employed to balance these effects; 
 15.14     (2) the extent to which the proposed arrangement is likely 
 15.15  to make available a new and needed service or product to a 
 15.16  certain geographic area; and 
 15.17     (3) the extent to which the proposed arrangement is likely 
 15.18  to otherwise make health care services or products more 
 15.19  financially or geographically available to persons who need them.
 15.20     If the commissioner determines that the proposed 
 15.21  arrangement is likely to increase access and bases that 
 15.22  determination on a projected increase in utilization, the 
 15.23  commissioner shall also determine and make a specific finding 
 15.24  that the increased utilization does not reflect overutilization. 
 15.25     (d)  [QUALITY.] In making determinations as to quality, the 
 15.26  commissioner may consider the extent to which the proposed 
 15.27  arrangement is likely to: 
 15.28     (1) decrease morbidity and mortality; 
 15.29     (2) result in faster convalescence; 
 15.30     (3) result in fewer hospital days; 
 15.31     (4) permit providers to attain needed experience or 
 15.32  frequency of treatment, likely to lead to better outcomes; 
 15.33     (5) increase patient satisfaction; and 
 15.34     (6) have any other features likely to improve or reduce the 
 15.35  quality of health care. 
 15.36     Sec. 17.  Minnesota Statutes 1996, section 62J.2921, 
 16.1   subdivision 2, is amended to read: 
 16.2      Subd. 2.  [NOTICE.] The commissioner shall begin a 
 16.3   proceeding to revoke approval by providing written notice to the 
 16.4   applicant describing in detail the basis for the proposed 
 16.5   revocation.  Notice of the proceeding must be published in the 
 16.6   State Register and submitted to the Minnesota health care 
 16.7   commission and the applicable regional coordinating boards.  The 
 16.8   notice must invite the submission of comments to the 
 16.9   commissioner. 
 16.10     Sec. 18.  Minnesota Statutes 1996, section 62J.451, 
 16.11  subdivision 6b, is amended to read: 
 16.12     Subd. 6b.  [CONSUMER SURVEYS.] (a) The health data 
 16.13  institute shall develop and implement a mechanism for collecting 
 16.14  comparative data on consumer perceptions of the health care 
 16.15  system, including consumer satisfaction, through adoption of a 
 16.16  standard consumer survey.  This survey shall include enrollees 
 16.17  in community integrated service networks, integrated service 
 16.18  networks, health maintenance organizations, preferred provider 
 16.19  organizations, indemnity insurance plans, public programs, and 
 16.20  other health plan companies.  The health data institute, in 
 16.21  consultation with the health care commission, shall determine a 
 16.22  mechanism for the inclusion of the uninsured.  This consumer 
 16.23  survey may be conducted every two years.  A focused survey may 
 16.24  be conducted on the off years.  Health plan companies and group 
 16.25  purchasers shall provide to the health data institute roster 
 16.26  data as defined in subdivision 2, including the names, 
 16.27  addresses, and telephone numbers of enrollees and former 
 16.28  enrollees and other data necessary for the completion of this 
 16.29  survey.  This roster data provided by the health plan companies 
 16.30  and group purchasers is classified as provided under section 
 16.31  62J.452.  The health data institute may analyze and prepare 
 16.32  findings from the raw, unaggregated data, and the findings from 
 16.33  this survey may be included in the health plan company 
 16.34  performance reports specified in subdivision 6a, and in other 
 16.35  reports developed and disseminated by the health data institute 
 16.36  and the commissioner.  The raw, unaggregated data is classified 
 17.1   as provided under section 62J.452, and may be made available by 
 17.2   the health data institute to the extent permitted under section 
 17.3   62J.452.  The health data institute shall provide raw, 
 17.4   unaggregated data to the commissioner.  The survey may include 
 17.5   information on the following subjects: 
 17.6      (1) enrollees' overall satisfaction with their health care 
 17.7   plan; 
 17.8      (2) consumers' perception of access to emergency, urgent, 
 17.9   routine, and preventive care, including locations, hours, 
 17.10  waiting times, and access to care when needed; 
 17.11     (3) premiums and costs; 
 17.12     (4) technical competence of providers; 
 17.13     (5) communication, courtesy, respect, reassurance, and 
 17.14  support; 
 17.15     (6) choice and continuity of providers; 
 17.16     (7) continuity of care; 
 17.17     (8) outcomes of care; 
 17.18     (9) services offered by the plan, including range of 
 17.19  services, coverage for preventive and routine services, and 
 17.20  coverage for illness and hospitalization; 
 17.21     (10) availability of information; and 
 17.22     (11) paperwork. 
 17.23     (b) The health data institute shall appoint a consumer 
 17.24  advisory group which shall consist of 13 individuals, 
 17.25  representing enrollees from public and private health plan 
 17.26  companies and programs and two uninsured consumers, to advise 
 17.27  the health data institute on issues of concern to consumers.  
 17.28  The advisory group must have at least one member from each 
 17.29  regional coordinating board region of the state.  The advisory 
 17.30  group expires June 30, 1996. 
 17.31     Sec. 19.  Minnesota Statutes 1996, section 62N.25, 
 17.32  subdivision 5, is amended to read: 
 17.33     Subd. 5.  [BENEFITS.] Community integrated service networks 
 17.34  must offer the health maintenance organization benefit set, as 
 17.35  defined in chapter 62D, and other laws applicable to entities 
 17.36  regulated under chapter 62D, except that the community 
 18.1   integrated service network may impose a deductible, not to 
 18.2   exceed $1,000 per person per year, provided that out-of-pocket 
 18.3   expenses on covered services do not exceed $3,000 per person or 
 18.4   $5,000 per family per year.  The deductible must not apply to 
 18.5   preventive health services as described in Minnesota Rules, part 
 18.6   4685.0801, subpart 8.  Community networks and chemical 
 18.7   dependency facilities under contract with a community network 
 18.8   shall use the assessment criteria in Minnesota Rules, parts 
 18.9   9530.6600 to 9530.6660, when assessing enrollees for chemical 
 18.10  dependency treatment. 
 18.11     Sec. 20.  Minnesota Statutes 1996, section 62Q.03, 
 18.12  subdivision 5a, is amended to read: 
 18.13     Subd. 5a.  [PUBLIC PROGRAMS.] (a) A separate risk 
 18.14  adjustment system must be developed for state-run public 
 18.15  programs, including medical assistance, general assistance 
 18.16  medical care, and MinnesotaCare.  The system must be developed 
 18.17  in accordance with the general risk adjustment methodologies 
 18.18  described in this section, must include factors in addition to 
 18.19  age and sex adjustment, and may include additional demographic 
 18.20  factors, different targeted conditions, and/or different payment 
 18.21  amounts for conditions.  The risk adjustment system for public 
 18.22  programs must attempt to reflect the special needs related to 
 18.23  poverty, cultural, or language barriers and other needs of the 
 18.24  public program population. 
 18.25     (b) The commissioners of health and human services shall 
 18.26  jointly convene a public programs risk adjustment work group 
 18.27  responsible for advising the commissioners in the design of the 
 18.28  public programs risk adjustment system.  The commissioner of 
 18.29  health shall work with the risk adjustment association to ensure 
 18.30  coordination between the risk adjustment systems for the public 
 18.31  and private sectors.  The commissioner of human services shall 
 18.32  seek any needed federal approvals necessary for the inclusion of 
 18.33  the medical assistance program in the public programs risk 
 18.34  adjustment system.  
 18.35     (c) The public programs risk adjustment work group must be 
 18.36  representative of the persons served by publicly paid health 
 19.1   programs and providers and health plans that meet their needs.  
 19.2   To the greatest extent possible, the appointing authorities 
 19.3   shall attempt to select representatives that have historically 
 19.4   served a significant number of persons in publicly paid health 
 19.5   programs or the uninsured.  Membership of the work group shall 
 19.6   be as follows: 
 19.7      (1) one provider member appointed by the Minnesota Medical 
 19.8   Association; 
 19.9      (2) two provider members appointed by the Minnesota 
 19.10  Hospital Association, at least one of whom must represent a 
 19.11  major disproportionate share hospital; 
 19.12     (3) five members appointed by the Minnesota Council of 
 19.13  HMOs, one of whom must represent an HMO with fewer than 50,000 
 19.14  enrollees located outside the metropolitan area and one of whom 
 19.15  must represent an HMO with at least 50 percent of total 
 19.16  membership enrolled through a public program; 
 19.17     (4) two representatives of counties appointed by the 
 19.18  Association of Minnesota Counties; 
 19.19     (5) three representatives of organizations representing the 
 19.20  interests of families, children, childless adults, and elderly 
 19.21  persons served by the various publicly paid health programs 
 19.22  appointed by the governor; 
 19.23     (6) two representatives of persons with mental health, 
 19.24  developmental or physical disabilities, chemical dependency, or 
 19.25  chronic illness appointed by the governor; and 
 19.26     (7) three public members appointed by the governor, at 
 19.27  least one of whom must represent a community health board.  The 
 19.28  risk adjustment association may appoint a representative, if a 
 19.29  representative is not otherwise appointed by an appointing 
 19.30  authority. 
 19.31     (d) The commissioners of health and human services, with 
 19.32  the advice of the public programs risk adjustment work group, 
 19.33  shall develop a work plan and time frame and shall coordinate 
 19.34  their efforts with the private sector risk adjustment 
 19.35  association's activities and other state initiatives related to 
 19.36  public program managed care reimbursement.  The commissioners of 
 20.1   health and human services shall report to the health care 
 20.2   commission and to the appropriate legislative committees on 
 20.3   January 15, 1996, and on January 15, 1997, on any policy or 
 20.4   legislative changes necessary to implement the public program 
 20.5   risk adjustment system. 
 20.6      Sec. 21.  Minnesota Statutes 1996, section 62Q.33, 
 20.7   subdivision 2, is amended to read: 
 20.8      Subd. 2.  [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 
 20.9   of health, in consultation with the state community health 
 20.10  services advisory committee and the commissioner of human 
 20.11  services, and representatives of local health departments, 
 20.12  county government, a municipal government acting as a local 
 20.13  board of health, the Minnesota health care commission, area 
 20.14  Indian health services, health care providers, and citizens 
 20.15  concerned about public health, shall coordinate the process for 
 20.16  defining implementation and financing responsibilities of the 
 20.17  local government core public health functions.  The commissioner 
 20.18  shall submit recommendations and an initial and final report on 
 20.19  local government core public health functions according to the 
 20.20  timeline established in subdivision 5. 
 20.21     Sec. 22.  Minnesota Statutes 1996, section 256.9354, 
 20.22  subdivision 5, is amended to read: 
 20.23     Subd. 5.  [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO 
 20.24  CHILDREN.] (a) Beginning October 1, 1994, the definition of 
 20.25  "eligible persons" is expanded to include all individuals and 
 20.26  households with no children who have gross family incomes that 
 20.27  are equal to or less than 125 percent of the federal poverty 
 20.28  guidelines and who are not eligible for medical assistance 
 20.29  without a spenddown under chapter 256B.  
 20.30     (b) After October 1, 1995, the commissioner of human 
 20.31  services may expand the definition of "eligible persons" to 
 20.32  include all individuals and households with no children who have 
 20.33  gross family incomes that are equal to or less than 135 percent 
 20.34  of federal poverty guidelines and are not eligible for medical 
 20.35  assistance without a spenddown under chapter 256B.  This 
 20.36  expansion may occur only if the financial management 
 21.1   requirements of section 256.9352, subdivision 3, can be met. 
 21.2      (c) The commissioners of health and human services, in 
 21.3   consultation with the legislative commission on health care 
 21.4   access, shall make preliminary recommendations to the 
 21.5   legislature by October 1, 1995, and final recommendations to the 
 21.6   legislature by February 1, 1996, on whether a further expansion 
 21.7   of the definition of "eligible persons" to include all 
 21.8   individuals and households with no children who have gross 
 21.9   family incomes that are equal to or less than 150 percent of 
 21.10  federal poverty guidelines and are not eligible for medical 
 21.11  assistance without a spenddown under chapter 256B would be 
 21.12  allowed under the financial management constraints outlined in 
 21.13  section 256.9352, subdivision 3. 
 21.14     (d) (b) Beginning July 1, 1997, the definition of eligible 
 21.15  persons is expanded to include all individuals and households 
 21.16  with no children who have gross family incomes that are equal to 
 21.17  or less than 175 percent of the federal poverty guidelines and 
 21.18  who are not eligible for medical assistance without a spenddown 
 21.19  under chapter 256B. 
 21.20     (c) All eligible persons under paragraphs (a) and (b) are 
 21.21  eligible for coverage through the MinnesotaCare program but must 
 21.22  pay a premium as determined under sections 256.9357 and 
 21.23  256.9358.  Individuals and families whose income is greater than 
 21.24  the limits established under section 256.9358 may not enroll in 
 21.25  the MinnesotaCare program. 
 21.26     Sec. 23.  Minnesota Statutes 1996, section 256.9355, is 
 21.27  amended by adding a subdivision to read: 
 21.28     Subd. 5.  [AVAILABILITY OF PRIVATE INSURANCE.] The 
 21.29  commissioner, in consultation with the commissioners of health 
 21.30  and commerce, shall provide information regarding the 
 21.31  availability of private health insurance coverage to all 
 21.32  families and individuals enrolled in the MinnesotaCare program 
 21.33  whose gross family income is equal to or more than 200 percent 
 21.34  of the federal poverty guidelines.  This information must be 
 21.35  provided upon initial enrollment and annually thereafter. 
 21.36     Sec. 24.  Minnesota Statutes 1996, section 295.582, is 
 22.1   amended to read: 
 22.2      295.582 [AUTHORITY.] 
 22.3      (a) A hospital, surgical center, pharmacy, or health care 
 22.4   provider that is subject to a tax under section 295.52, or a 
 22.5   pharmacy that has paid additional expense transferred under this 
 22.6   section by a wholesale drug distributor, may transfer additional 
 22.7   expense generated by section 295.52 obligations on to all 
 22.8   third-party contracts for the purchase of health care services 
 22.9   on behalf of a patient or consumer.  The additional expense 
 22.10  transferred to the third-party purchaser must not exceed two 
 22.11  percent of the gross revenues received under the third-party 
 22.12  contract, and two percent of copayments and deductibles paid by 
 22.13  the individual patient or consumer.  The expense must not be 
 22.14  generated on revenues derived from payments that are excluded 
 22.15  from the tax under section 295.53.  All third-party purchasers 
 22.16  of health care services including, but not limited to, 
 22.17  third-party purchasers regulated under chapter 60A, 62A, 62C, 
 22.18  62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 
 22.19  471.61 or 471.617, must pay the transferred expense in addition 
 22.20  to any payments due under existing contracts with the hospital, 
 22.21  surgical center, pharmacy, or health care provider, to the 
 22.22  extent allowed under federal law.  A third-party purchaser of 
 22.23  health care services includes, but is not limited to, a health 
 22.24  carrier, integrated service network, or community integrated 
 22.25  service network that pays for health care services on behalf of 
 22.26  patients or that reimburses, indemnifies, compensates, or 
 22.27  otherwise insures patients for health care services.  A 
 22.28  third-party purchaser shall comply with this section regardless 
 22.29  of whether the third-party purchaser is a for-profit, 
 22.30  not-for-profit, or nonprofit entity.  A wholesale drug 
 22.31  distributor may transfer additional expense generated by section 
 22.32  295.52 obligations to entities that purchase from the 
 22.33  wholesaler, and the entities must pay the additional expense.  
 22.34  Nothing in this section limits the ability of a hospital, 
 22.35  surgical center, pharmacy, wholesale drug distributor, or health 
 22.36  care provider to recover all or part of the section 295.52 
 23.1   obligation by other methods, including increasing fees or 
 23.2   charges. 
 23.3      (b) Each third-party purchaser regulated under any chapter 
 23.4   cited in paragraph (a) shall include with its annual renewal for 
 23.5   certification of authority or licensure documentation indicating 
 23.6   compliance with paragraph (a).  
 23.7      (c) Any hospital, surgical center, pharmacy, or health care 
 23.8   provider subject to a tax under section 295.52 or a pharmacy 
 23.9   that has paid additional expense transferred under this section 
 23.10  by a wholesale drug distributor may file a complaint with the 
 23.11  commissioner responsible for regulating the third-party 
 23.12  purchaser if at any time the third-party purchaser fails to 
 23.13  comply with paragraph (a).  
 23.14     (d) If the commissioner responsible for regulating the 
 23.15  third-party purchaser finds at any time that the third-party 
 23.16  purchaser has not complied with paragraph (a), the commissioner 
 23.17  may take enforcement action against a health plan company which 
 23.18  is subject to the commissioner's regulatory jurisdiction and 
 23.19  which does not allow a hospital, surgical center, pharmacy, or 
 23.20  provider to pass-through the tax.  The commissioner may by order 
 23.21  fine or censure the third-party purchaser or revoke or suspend 
 23.22  the certificate of authority or license of the third-party 
 23.23  purchaser to do business in this state if the commissioner finds 
 23.24  that the third-party purchaser has not complied with this 
 23.25  section.  The third-party purchaser may appeal the 
 23.26  commissioner's order through a contested case hearing in 
 23.27  accordance with chapter 14. 
 23.28     Sec. 25.  [REPEALER.] 
 23.29     (a) Minnesota Statutes 1996, sections 62J.04, subdivisions 
 23.30  4 and 7; 62J.05; 62J.051; 62J.06; 62J.09, subdivision 3a; 
 23.31  62N.02, subdivision 3; 62Q.165, subdivision 3; 62Q.25; 62Q.29; 
 23.32  and 62Q.41, are repealed. 
 23.33     (b) Laws 1993, chapter 247, article 4, section 8; Laws 
 23.34  1995, chapter 96, section 2; and Laws 1995, First Special 
 23.35  Session chapter 3, article 13, section 2, are repealed. 
 23.36     (c) Laws 1994, chapter 625, article 5, section 5, 
 24.1   subdivision 1, as amended by Laws 1995, chapter 234, article 3, 
 24.2   section 8, is repealed. 
 24.3      Sec. 26.  [EFFECTIVE DATE.] 
 24.4      Section 12 [62J.25] is effective the day following final 
 24.5   enactment.