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Key: (1) language to be deleted (2) new language

CHAPTER 358--S.F.No. 3780
An act
relating to health care; establishing a statewide health improvement
program; establishing health care homes and reporting requirements; establishing
a care coordination payment; requiring a workforce shortage study; establishing
requirements for interoperable health records; establishing electronic prescription
drug program; requiring recommendations for an essential benefit set for health
benefits; providing for health care payment restructuring; requiring uniform
standards; establishing a health care reform review council; establishing
Section 125 Plan; providing for fees; requiring reports; authorizing rulemaking;
appropriating money;amending Minnesota Statutes 2006, sections 256.01,
by adding a subdivision; 256L.06, subdivision 3; Minnesota Statutes 2007
Supplement, sections 43A.23, subdivision 1; 62J.495, by adding a subdivision;
256.962, subdivisions 5, 6; 256B.057, subdivision 2c, as amended; 256L.04,
subdivisions 1, 7; 256L.05, subdivision 3a; 256L.07, subdivision 1; 256L.15,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 62J;
124D; 145; 256B; proposing coding for new law as Minnesota Statutes, chapter
62U; repealing Minnesota Statutes 2006, section 256L.15, subdivision 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1
PUBLIC HEALTH

    Section 1. [145.986] STATEWIDE HEALTH IMPROVEMENT PROGRAM.
    Subdivision 1. Grants to local communities. (a) Beginning July 1, 2009, the
commissioner of health shall award competitive grants to community health boards
established pursuant to section 145A.09 and tribal governments to convene, coordinate,
and implement evidence-based strategies targeted at reducing the percentage of
Minnesotans who are obese or overweight and to reduce the use of tobacco.
    (b) Grantee activities shall:
    (1) be based on scientific evidence;
    (2) be based on community input;
    (3) address behavior change at the individual, community, and systems levels;
    (4) occur in community, school, worksite, and health care settings; and
    (5) be focused on policy, systems, and environmental changes that support healthy
behaviors.
    (c) To receive a grant under this section, community health boards and tribal
governments must submit proposals to the commissioner. A local match of ten percent
of the total funding allocation is required. This local match may include funds donated
by community partners.
    (d) In order to receive a grant, community health boards and tribal governments
must submit a health improvement plan to the commissioner of health for approval. The
commissioner may require the plan to identify a community leadership team, community
partners, and a community action plan that includes an assessment of area strengths and
needs, proposed action strategies, technical assistance needs, and a staffing plan.
    (e) The grant recipient must implement the health improvement plan, evaluate the
effectiveness of the interventions, and modify or discontinue interventions found to be
ineffective.
    (f) By January 15, 2011, the commissioner of health shall recommend whether any
funding should be distributed to community health boards and tribal governments based
on health disparities demonstrated in the populations served.
    (g) Grant recipients shall report their activities and their progress toward the
outcomes established under subdivision 2 to the commissioner in a format and at a time
specified by the commissioner.
    (h) All grant recipients shall be held accountable for making progress toward the
measurable outcomes established in subdivision 2. The commissioner shall require a
corrective action plan and may reduce the funding level of grant recipients that do not
make adequate progress toward the measurable outcomes.
    Subd. 2. Outcomes. (a) The commissioner shall set measurable outcomes to meet
the goals specified in subdivision 1, and annually review the progress of grant recipients
in meeting the outcomes.
    (b) The commissioner shall measure current public health status, using existing
measures and data collection systems when available, to determine baseline data against
which progress shall be monitored.
    Subd. 3. Technical assistance and oversight. The commissioner shall provide
content expertise, technical expertise, and training to grant recipients and advice on
evidence-based strategies, including those based on populations and types of communities
served. The commissioner shall ensure that the statewide health improvement program
meets the outcomes established under subdivision 2 by conducting a comprehensive
statewide evaluation and assisting grant recipients to modify or discontinue interventions
found to be ineffective.
    Subd. 4. Evaluation. Using the outcome measures established in subdivision 3, the
commissioner shall conduct a biennial evaluation of the statewide health improvement
program funded under this section. Grant recipients shall cooperate with the commissioner
in the evaluation and provide the commissioner with the information necessary to conduct
the evaluation.
    Subd. 5. Report. The commissioner shall submit a biennial report to the legislature
on the statewide health improvement program funded under this section. These reports
must include information on grant recipients, activities that were conducted using grant
funds, evaluation data, and outcome measures, if available. In addition, the commissioner
shall provide recommendations on future areas of focus for health improvement. These
reports are due by January 15 of every other year, beginning in 2010. In the report due
on January 15, 2010, the commissioner shall include recommendations on a sustainable
funding source for the statewide health improvement program other than the health care
access fund.
    Subd. 6. Supplantation of existing funds. Community health boards and tribal
governments must use funds received under this section to develop new programs, expand
current programs that work to reduce the percentage of Minnesotans who are obese or
overweight or who use tobacco, or replace discontinued state or federal funds previously
used to reduce the percentage of Minnesotans who are obese or overweight or who use
tobacco. Funds must not be used to supplant current state or local funding to community
health boards or tribal governments used to reduce the percentage of Minnesotans who are
obese or overweight or to reduce tobacco use.

ARTICLE 2
HEALTH CARE HOMES

    Section 1. [256B.0751] HEALTH CARE HOMES.
    Subdivision 1. Definitions. (a) For purposes of sections 256B.0751 to 256B.0753,
the following definitions apply.
    (b) "Commissioner" means the commissioner of human services.
    (c) "Commissioners" means the commissioner of humans services and the
commissioner of health, acting jointly.
    (d) "Health plan company" has the meaning provided in section 62Q.01, subdivision
4.
    (e) "Personal clinician" means a physician licensed under chapter 147, a physician
assistant registered and practicing under chapter 147A, or an advanced practice nurse
licensed and registered to practice under chapter 148.
    (f) "State health care program" means the medical assistance, MinnesotaCare, and
general assistance medical care programs.
    Subd. 2. Development and implementation of standards. (a) By July 1, 2009,
the commissioners of health and human services shall develop and implement standards
of certification for health care homes for state health care programs. In developing these
standards, the commissioners shall consider existing standards developed by national
independent accrediting and medical home organizations. The standards developed by the
commissioners must meet the following criteria:
    (1) emphasize, enhance, and encourage the use of primary care, and include the
use of primary care physicians, advanced practice nurses, and physician assistants as
personal clinicians;
    (2) focus on delivering high-quality, efficient, and effective health care services;
    (3) encourage patient-centered care, including active participation by the patient and
family or a legal guardian, or a health care agent as defined in chapter 145C, as appropriate
in decision making and care plan development, and providing care that is appropriate to
the patient's race, ethnicity, and language;
    (4) provide patients with a consistent, ongoing contact with a personal clinician or
team of clinical professionals to ensure continuous and appropriate care for the patient's
condition;
    (5) ensure that health care homes develop and maintain appropriate comprehensive
care plans for their patients with complex or chronic conditions, including an assessment
of health risks and chronic conditions;
    (6) enable and encourage utilization of a range of qualified health care professionals,
including dedicated care coordinators, in a manner that enables providers to practice to
the fullest extent of their license;
    (7) focus initially on patients who have or are at risk of developing chronic health
conditions;
    (8) incorporate measures of quality, resource use, cost of care, and patient experience;
    (9) ensure the use of health information technology and systematic follow-up,
including the use of patient registries; and
    (10) encourage the use of scientifically based health care, patient decision-making
aids that provide patients with information about treatment options and their associated
benefits, risks, costs, and comparative outcomes, and other clinical decision support tools.
    (b) In developing these standards, the commissioners shall consult with national
and local organizations working on health care home models, physicians, relevant
state agencies, health plan companies, hospitals, other providers, patients, and patient
advocates. The commissioners may satisfy this requirement by continuing the provider
directed care coordination advisory committee.
    (c) For the purposes of developing and implementing these standards, the
commissioners may use the expedited rulemaking process under section 14.389.
    Subd. 3. Requirements for clinicians certified as health care homes. (a) A
personal clinician or a primary care clinic may be certified as a health care home. If a
primary care clinic is certified, all of the primary care clinic's clinicians must meet the
criteria of a health care home. In order to be certified as a health care home, a clinician or
clinic must meet the standards set by the commissioners in accordance with this section.
Certification as a health care home is voluntary. In order to maintain their status as health
care homes, clinicians or clinics must renew their certification annually.
    (b) Clinicians or clinics certified as health care homes must offer their health care
home services to all their patients with complex or chronic health conditions who are
interested in participation.
    (c) Health care homes must participate in the health care home collaborative
established under subdivision 5.
    Subd. 4. Alternative models. Nothing in this section shall preclude the continued
development of existing medical or health care home projects currently operating or under
development by the commissioner of human services or preclude the commissioner from
establishing alternative models and payment mechanisms for persons who are enrolled
in integrated Medicare and Medicaid programs under section 256B.69, subdivisions 23
and 28, are enrolled in managed care long-term care programs under section 256B.69,
subdivision 6b, are dually eligible for Medicare and medical assistance, are in the waiting
period for Medicare, or who have other primary coverage.
    Subd. 5. Health care home collaborative. By July 1, 2009, the commissioners
shall establish a health care home collaborative to provide an opportunity for health care
homes and state agencies to exchange information related to quality improvement and
best practices.
    Subd. 6. Evaluation and continued development. (a) For continued certification
under this section, health care homes must meet process, outcome, and quality standards as
developed and specified by the commissioners. The commissioners shall collect data from
health care homes necessary for monitoring compliance with certification standards and
for evaluating the impact of health care homes on health care quality, cost, and outcomes.
    (b) The commissioners may contract with a private entity to perform an evaluation of
the effectiveness of health care homes. Data collected under this subdivision is classified
as nonpublic data under chapter 13.
    Subd. 7. Outreach. Beginning July 1, 2009, the commissioner shall encourage state
health care program enrollees who have a complex or chronic condition to select a primary
care clinic with clinicians who have been certified as health care homes.

    Sec. 2. [256B.0752] HEALTH CARE HOME REPORTING REQUIREMENTS.
    Subdivision 1. Annual reports on implementation and administration. The
commissioners shall report annually to the legislature on the implementation and
administration of the health care home model for state health care program enrollees in the
fee-for-service, managed care, and county-based purchasing sectors beginning December
15, 2009, and each December 15 thereafter.
    Subd. 2. Evaluation reports. The commissioners shall provide to the legislature
comprehensive evaluations of the health care home model three years and five years after
implementation. The report must include:
    (1) the number of state health care program enrollees in health care homes and the
number and characteristics of enrollees with complex or chronic conditions, identified
by income, race, ethnicity, and language;
    (2) the number and geographic distribution of health care home providers;
    (3) the performance and quality of care of health care homes;
    (4) measures of preventive care;
    (5) health care home payment arrangements, and costs related to implementation
and payment of care coordination fees;
    (6) the estimated impact of health care homes on health disparities; and
    (7) estimated savings from implementation of the health care home model for the
fee-for-service, managed care, and county-based purchasing sectors.

    Sec. 3. [256B.0753] PAYMENT RESTRUCTURING; CARE COORDINATION
PAYMENTS.
    Subdivision 1. Development. The commissioner of human services, in coordination
with the commissioner of health, shall develop a payment system that provides per-person
care coordination payments to health care homes certified under section 256B.0751 for
providing care coordination services and directly managing on-site or employing care
coordinators. The care coordination payments under this section are in addition to the
quality incentive payments in section 256B.0754, subdivision 1. The care coordination
payment system must vary the fees paid by thresholds of care complexity, with the
highest fees being paid for care provided to individuals requiring the most intensive care
coordination. In developing the criteria for care coordination payments, the commissioner
shall consider the feasibility of including the additional time and resources needed by
patients with limited English-language skills, cultural differences, or other barriers to
health care. The commissioner may determine a schedule for phasing in care coordination
fees such that the fees will be applied first to individuals who have, or are at risk of
developing, complex or chronic health conditions. Development of the payment system
must be completed by January 1, 2010.
    Subd. 2. Implementation. The commissioner of human services shall implement
care coordination payments as specified under this section by July 1, 2010, or upon federal
approval, whichever is later. For enrollees served under the fee-for-service system, the
care coordination payment shall be determined by the commissioner in contracts with
certified health care homes. For enrollees served by managed care or county-based
purchasing plans, the commissioner's contracts with these plans shall require the payment
of care coordination fees to certified health care homes.
    Subd. 3. Cost neutrality. If initial savings from implementation of health care
homes are not sufficient to allow implementation of the care coordination fee in a
cost-neutral manner, the commissioner may make recommendations to the legislature on
reallocating costs within the health care system.

    Sec. 4. [256B.0754] PAYMENT REFORM.
    Subdivision 1. Quality incentive payments. By July 1, 2010, the commissioner of
human services shall implement quality incentive payments as established under section
62U.02 for all enrollees in state health care programs consistent with relevant state and
federal statute and rule. This section does not limit the ability of the commissioner
of human services to establish by contract and monitor, as part of its quality assurance
obligations for state health care programs, outcome and performance measures for
nonmedical services and health issues likely to occur in low-income populations or racial
or cultural groups disproportionately represented in state health care program enrollment
that would likely be underrepresented when using traditional measures that are based on
longer-term enrollment.
    Subd. 2. Payment reform. By January 1, 2011, the commissioner of human
services shall use the information and methods developed under section 62U.04 to
establish a payment system that:
    (1) rewards high-quality, low-cost providers;
    (2) creates enrollee incentives to receive care from high-quality, low-cost providers;
and
    (3) fosters collaboration among providers to reduce cost shifting from one part of
the health continuum to another.

    Sec. 5. WORKFORCE SHORTAGE STUDY.
    To address health care workforce shortages, the commissioner of health, in
consultation with the health licensing boards and professional associations, shall study
changes necessary in health professional licensure and regulation to ensure full utilization
of advanced practice registered nurses, physician assistants, and other licensed health care
professionals in the health care home and primary delivery system. The commissioner
shall make recommendations to the legislature by January 15, 2009.

ARTICLE 3
INCREASING ACCESS; CONTINUITY OF CARE

    Section 1. [124D.1115] FREE AND REDUCED SCHOOL LUNCH PROGRAM
DATA SHARING.
    (a) Each school participating in the federal school lunch program shall electronically
send to the Department of Education the eligibility information on each child who is
eligible for the free and reduced lunch program, unless the child's parent or legal guardian
after being notified of the potential disclosure of this information for the limited purpose
stated in paragraph (b) elects not to have the information disclosed.
    (b) Pursuant to United States Code, title 42, section 1758(b)(6)(A), the Department
of Education shall enter into an agreement with the Department of Human Services
to share the eligibility information provided by each school in paragraph (a) for the
limited purpose of identifying children who may be eligible for medical assistance or
MinnesotaCare. The Department of Human Services must ensure that this information
remains confidential and shall only be used for this purpose. Any unauthorized disclosure
shall be subject to a penalty.

    Sec. 2. Minnesota Statutes 2006, section 256.01, is amended by adding a subdivision
to read:
    Subd. 27. Application and renewal forms. The commissioner shall make state
health care program applications and renewals available on the department's Web site
in the most common foreign languages.

    Sec. 3. Minnesota Statutes 2007 Supplement, section 256.962, subdivision 5, is
amended to read:
    Subd. 5. Incentive program. Beginning January 1, 2008, the commissioner shall
establish an incentive program for organizations and licensed insurance producers under
chapter 60K that directly identify and assist potential enrollees in filling out and submitting
an application. For each applicant who is successfully enrolled in MinnesotaCare,
medical assistance, or general assistance medical care, the commissioner, within the
available appropriation, shall pay the organization or licensed insurance producer a $20
$25 application assistance bonus. The organization or licensed insurance producer may
provide an applicant a gift certificate or other incentive upon enrollment.

    Sec. 4. Minnesota Statutes 2007 Supplement, section 256.962, subdivision 6, is
amended to read:
    Subd. 6. School districts. (a) At the beginning of each school year, a school district
shall provide information to each student on the availability of health care coverage
through the Minnesota health care programs.
    (b) For each child who is determined to be eligible for a the free or and reduced
priced school lunch program, the district shall provide the child's family with an
application for the Minnesota health care programs and information on how to obtain an
application for the Minnesota health care programs and application assistance.
    (c) A district shall also ensure that applications and information on application
assistance are available at early childhood education sites and public schools located
within the district's jurisdiction.
    (d) Each district shall designate an enrollment specialist to provide application
assistance and follow-up services with families who are eligible for the reduced or free
lunch program or who have indicated an interest in receiving information or an application
for the Minnesota health care program. A district is eligible for the application assistance
bonus described in subdivision 5.
    (e) Each school district shall provide on their Web site a link to information on how
to obtain an application and application assistance.

    Sec. 5. Minnesota Statutes 2007 Supplement, section 256B.057, subdivision 2c, as
amended by Laws 2008, chapter 286, article 1, section 5, is amended to read:
    Subd. 2c. Extended coverage for Seamless coverage for MinnesotaCare eligible
children. A child receiving medical assistance under subdivision 2, who becomes
ineligible due to excess income, is eligible for two additional months of seamless coverage
between medical assistance and MinnesotaCare. The child shall remain eligible under this
section for two additional months and is deemed automatically eligible for MinnesotaCare
until renewal. MinnesotaCare coverage begins in accordance with section 256L.05,
subdivision 3. Eligibility under this section is effective following any coverage available
under section 256B.0635.
    A child eligible for extended coverage under this section is deemed automatically
eligible for MinnesotaCare until renewal. MinnesotaCare coverage begins in accordance
with section 256L.05, subdivision 3.

    Sec. 6. Minnesota Statutes 2007 Supplement, section 256L.04, subdivision 1, is
amended to read:
    Subdivision 1. Families with children. (a) Families with children with family
income equal to or less than 275 percent of the federal poverty guidelines for the
applicable family size shall be eligible for MinnesotaCare according to this section. All
other provisions of sections 256L.01 to 256L.18, including the insurance-related barriers
to enrollment under section 256L.07, shall apply unless otherwise specified.
    (b) Parents who enroll in the MinnesotaCare program must also enroll their children,
if the children are eligible. Children may be enrolled separately without enrollment by
parents. However, if one parent in the household enrolls, both parents must enroll, unless
other insurance is available. If one child from a family is enrolled, all children must
be enrolled, unless other insurance is available. If one spouse in a household enrolls,
the other spouse in the household must also enroll, unless other insurance is available.
Families cannot choose to enroll only certain uninsured members.
    (c) Beginning October 1, 2003, the dependent sibling definition no longer applies
to the MinnesotaCare program. These persons are no longer counted in the parental
household and may apply as a separate household.
    (d) Beginning July 1, 2003, or upon federal approval, whichever is later, parents are
not eligible for MinnesotaCare if their gross income exceeds $50,000 $57,500.
    (e) Children formerly enrolled in medical assistance and automatically deemed
eligible for MinnesotaCare according to section 256B.057, subdivision 2c, are exempt
from the requirements of this section until renewal.
EFFECTIVE DATE.This section is effective July 1, 2010, or upon federal
approval, whichever is later. The commissioner of human services shall notify the revisor
of statutes when federal approval is obtained.

    Sec. 7. Minnesota Statutes 2007 Supplement, section 256L.04, subdivision 7, is
amended to read:
    Subd. 7. Single adults and households with no children. (a) The definition of
eligible persons includes all individuals and households with no children who have gross
family incomes that are equal to or less than 200 percent of the federal poverty guidelines.
    (b) Effective July 1, 2009, the definition of eligible persons includes all individuals
and households with no children who have gross family incomes that are equal to or less
than 215 250 percent of the federal poverty guidelines.

    Sec. 8. Minnesota Statutes 2007 Supplement, section 256L.05, subdivision 3a, is
amended to read:
    Subd. 3a. Renewal of eligibility. (a) Beginning July 1, 2007, an enrollee's eligibility
must be renewed every 12 months. The 12-month period begins in the month after the
month the application is approved.
    (b) Each new period of eligibility must take into account any changes in
circumstances that impact eligibility and premium amount. An enrollee must provide all
the information needed to redetermine eligibility by the first day of the month that ends
the eligibility period. If there is no change in circumstances, the enrollee may renew
eligibility at designated locations that include community clinics and health care providers'
offices. The designated sites shall forward the renewal forms to the commissioner. The
commissioner may establish criteria and timelines for sites to forward applications to the
commissioner or county agencies. The premium for the new period of eligibility must be
received as provided in section 256L.06 in order for eligibility to continue.
    (c) For single adults and households with no children formerly enrolled in general
assistance medical care and enrolled in MinnesotaCare according to section 256D.03,
subdivision 3
, the first period of eligibility begins the month the enrollee submitted the
application or renewal for general assistance medical care.
    (d) An enrollee who fails to submit renewal forms and related documentation
necessary for verification of continued eligibility in a timely manner shall remain eligible
for one additional month beyond the end of the current eligibility period before being
disenrolled. The enrollee remains responsible for MinnesotaCare premiums for the
additional month.
EFFECTIVE DATE.This section is effective January 1, 2009, or upon federal
approval, whichever is later. The commissioner of human services shall notify the revisor
of statutes when federal approval is obtained.

    Sec. 9. Minnesota Statutes 2006, section 256L.06, subdivision 3, is amended to read:
    Subd. 3. Commissioner's duties and payment. (a) Premiums are dedicated to the
commissioner for MinnesotaCare.
    (b) The commissioner shall develop and implement procedures to: (1) require
enrollees to report changes in income; (2) adjust sliding scale premium payments, based
upon both increases and decreases in enrollee income, at the time the change in income
is reported; and (3) disenroll enrollees from MinnesotaCare for failure to pay required
premiums. Failure to pay includes payment with a dishonored check, a returned automatic
bank withdrawal, or a refused credit card or debit card payment. The commissioner may
demand a guaranteed form of payment, including a cashier's check or a money order, as
the only means to replace a dishonored, returned, or refused payment.
    (c) Premiums are calculated on a calendar month basis and may be paid on a
monthly, quarterly, or semiannual basis, with the first payment due upon notice from the
commissioner of the premium amount required. The commissioner shall inform applicants
and enrollees of these premium payment options. Premium payment is required before
enrollment is complete and to maintain eligibility in MinnesotaCare. Premium payments
received before noon are credited the same day. Premium payments received after noon
are credited on the next working day.
    (d) Nonpayment of the premium will result in disenrollment from the plan effective
for the first day of the calendar month following the calendar month for which the
premium was due. Persons disenrolled for nonpayment or who voluntarily terminate
coverage from the program may not reenroll until four calendar months have elapsed.
Persons disenrolled for nonpayment who pay all past due premiums as well as current
premiums due, including premiums due for the period of disenrollment, within 20 days
of disenrollment, shall be reenrolled retroactively to the first day of disenrollment The
commissioner shall waive premiums for coverage provided under this paragraph to
persons disenrolled for nonpayment who reapply under section 256L.05, subdivision 3b.
Persons disenrolled for nonpayment or who voluntarily terminate coverage from the
program may not reenroll for four calendar months unless the person demonstrates good
cause for nonpayment. Good cause does not exist if a person chooses to pay other family
expenses instead of the premium. The commissioner shall define good cause in rule.
EFFECTIVE DATE.This section is effective January 1, 2009, or upon federal
approval, whichever is later. The commissioner of human services shall notify the revisor
of statutes when federal approval is obtained.

    Sec. 10. Minnesota Statutes 2007 Supplement, section 256L.07, subdivision 1, is
amended to read:
    Subdivision 1. General requirements. (a) Children enrolled in the original
children's health plan as of September 30, 1992, children who enrolled in the
MinnesotaCare program after September 30, 1992, pursuant to Laws 1992, chapter 549,
article 4, section 17, and children who have family gross incomes that are equal to or
less than 150 percent of the federal poverty guidelines are eligible without meeting
the requirements of subdivision 2 and the four-month requirement in subdivision 3, as
long as they maintain continuous coverage in the MinnesotaCare program or medical
assistance. Children who apply for MinnesotaCare on or after the implementation date
of the employer-subsidized health coverage program as described in Laws 1998, chapter
407, article 5, section 45, who have family gross incomes that are equal to or less than 150
percent of the federal poverty guidelines, must meet the requirements of subdivision 2 to
be eligible for MinnesotaCare.
    Families enrolled in MinnesotaCare under section 256L.04, subdivision 1, whose
income increases above 275 percent of the federal poverty guidelines, are no longer
eligible for the program and shall be disenrolled by the commissioner. Beginning January
1, 2008, individuals enrolled in MinnesotaCare under section 256L.04, subdivision 7,
whose income increases above 200 percent of the federal poverty guidelines or 215 250
percent of the federal poverty guidelines on or after July 1, 2009, are no longer eligible for
the program and shall be disenrolled by the commissioner. For persons disenrolled under
this subdivision, MinnesotaCare coverage terminates the last day of the calendar month
following the month in which the commissioner determines that the income of a family or
individual exceeds program income limits.
    (b) Notwithstanding paragraph (a), children may remain enrolled in MinnesotaCare
if ten percent of their gross individual or gross family income as defined in section
256L.01, subdivision 4, is less than the annual premium for a policy with a $500
deductible available through the Minnesota Comprehensive Health Association. Children
who are no longer eligible for MinnesotaCare under this clause shall be given a 12-month
notice period from the date that ineligibility is determined before disenrollment. The
premium for children remaining eligible under this clause shall be the maximum premium
determined under section 256L.15, subdivision 2, paragraph (b).
    (c) Notwithstanding paragraphs (a) and (b), parents are not eligible for
MinnesotaCare if gross household income exceeds $50,000 $57,500 for the 12-month
period of eligibility.
EFFECTIVE DATE.The effective date for the amendment to paragraph (a) is
July 1, 2009, or upon federal approval, whichever is later. The effective date for the
amendment to paragraph (c) is July 1, 2010, or upon federal approval, whichever is later.
The commissioner of human services shall notify the revisor of statutes when federal
approval is obtained.

    Sec. 11. Minnesota Statutes 2007 Supplement, section 256L.15, subdivision 2, is
amended to read:
    Subd. 2. Sliding fee scale; monthly gross individual or family income. (a) The
commissioner shall establish a sliding fee scale to determine the percentage of monthly
gross individual or family income that households at different income levels must pay to
obtain coverage through the MinnesotaCare program. The sliding fee scale must be based
on the enrollee's monthly gross individual or family income. The sliding fee scale must
contain separate tables based on enrollment of one, two, or three or more persons. Until
June 30, 2009, the sliding fee scale begins with a premium of 1.5 percent of monthly gross
individual or family income for individuals or families with incomes below the limits for
the medical assistance program for families and children in effect on January 1, 1999, and
proceeds through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and
8.8 percent. These percentages are matched to evenly spaced income steps ranging from
the medical assistance income limit for families and children in effect on January 1, 1999,
to 275 percent of the federal poverty guidelines for the applicable family size, up to a
family size of five. The sliding fee scale for a family of five must be used for families of
more than five. The sliding fee scale and percentages are not subject to the provisions of
chapter 14. If a family or individual reports increased income after enrollment, premiums
shall be adjusted at the time the change in income is reported.
    (b) Families Children in families whose gross income is above 275 percent
of the federal poverty guidelines shall pay the maximum premium. The maximum
premium is defined as a base charge for one, two, or three or more enrollees so that if all
MinnesotaCare cases paid the maximum premium, the total revenue would equal the
total cost of MinnesotaCare medical coverage and administration. In this calculation,
administrative costs shall be assumed to equal ten percent of the total. The costs of
medical coverage for pregnant women and children under age two and the enrollees in
these groups shall be excluded from the total. The maximum premium for two enrollees
shall be twice the maximum premium for one, and the maximum premium for three or
more enrollees shall be three times the maximum premium for one.
    (c) Beginning July 1, 2009, MinnesotaCare enrollees shall pay premiums according
to the premium scale specified in paragraph (d) with the exception that children in families
with income at or below 150 percent of the federal poverty guidelines shall pay a monthly
premium of $4. For purposes of paragraph (d), "minimum" means a monthly premium
of $4.
    (d) The following premium scale is established for individuals and families with
gross family incomes of 300 percent of the federal poverty guidelines or less:


Federal Poverty Guideline Range
Percent of Average Gross Monthly
Income

0-45%
minimum

46-54%
1.1%

55-81%
1.6%

82-109%
2.2%

110-136%
2.9%

137-164%
3.6%

165-191%
4.6%

192-219%
5.6%

220-248%
6.5%

249-274%
7.2%

275-300%
8.0%
EFFECTIVE DATE.This section is effective January 1, 2009, or upon federal
approval, whichever is later. The commissioner of human services shall notify the revisor
of statutes when federal approval is obtained.

    Sec. 12. AUTOMATION AND COORDINATION FOR STATE HEALTH CARE
PROGRAMS.
    (a) For purposes of this subdivision, "state health care program" means the medical
assistance, MinnesotaCare, or general assistance medical care programs.
    (b) By January 15, 2009, the commissioner of human services shall report to the
legislature on ways to improve coordination between state health care programs and social
service programs, including, but not limited to, WIC and food stamps. This report must
include a review of options for the development of automated systems to identify persons
served by social service programs who may be eligible for, but are not enrolled in, a state
health care program. The report shall identify to the legislature statutory changes to state
health care and social service programs necessary to improve coordination and automation
between state health care programs and social service programs.

    Sec. 13. LONG-TERM CARE WORKER HEALTH COVERAGE STUDY.
    (a) The commissioner of human services shall study and report to the legislature
by December 15, 2008, with recommendations for a rate increase to long-term care
employers dedicated to the purchase of employee health insurance in the private market.
The commissioner shall collect necessary actuarial data, employment data, current
coverage data, and other needed information.
    (b) The commissioner shall develop cost estimates for three levels of insurance
coverage for long-term care workers:
    (1) the coverage provided to state employees;
    (2) the coverage provided to MinnesotaCare enrollees; and
    (3) the benefits provided under an "average" private market insurance product, but
with a deductible limited to $100 per person.
    Premium cost sharing, waiting periods for eligibility, definitions of full- and
part-time employment, and other parameters under the three options must be identical to
those under the state employees health plan.
    (c) For purposes of this section, a long-term care worker is a person employed by a
nursing facility, an intermediate care facility for persons with developmental disabilities,
or a service provider that:
    (1) is eligible under Laws 2007, chapter 147, article 7, section 71; and
    (2) provides long-term care services.
    The commissioner may recommend a different definition of long-term care worker if
this definition presents insurmountable implementation issues.
    (d) The recommendations must include measures to:
    (1) ensure equitable treatment between employers that currently have different levels
of expenditure for employee health insurance costs; and
    (2) enforce the requirement that the rate increase be expended for the intended
purpose.

    Sec. 14. REPEALER.
Minnesota Statutes 2006, section 256L.15, subdivision 3, is repealed.
EFFECTIVE DATE.This section is effective July 1, 2009, or upon federal
approval of the amendments to Minnesota Statutes, section 256L.15, subdivision 2,
paragraphs (c) and (d), whichever is later. The commissioner of human services shall
notify the revisor of statutes when federal approval is obtained.

ARTICLE 4
HEALTH INSURANCE PURCHASING AND AFFORDABILITY REFORM

    Section 1. Minnesota Statutes 2007 Supplement, section 43A.23, subdivision 1,
is amended to read:
    Subdivision 1. General. (a) The commissioner is authorized to request proposals
or to negotiate and to enter into contracts with parties which in the judgment of the
commissioner are best qualified to provide service to the benefit plans. Contracts entered
into are not subject to the requirements of sections 16C.16 to 16C.19. The commissioner
may negotiate premium rates and coverage. The commissioner shall consider the cost of
the plans, conversion options relating to the contracts, service capabilities, character,
financial position, and reputation of the carriers, and any other factors which the
commissioner deems appropriate. Each benefit contract must be for a uniform term of at
least one year, but may be made automatically renewable from term to term in the absence
of notice of termination by either party. A carrier licensed under chapter 62A is exempt
from the taxes imposed by chapter 297I on premiums paid to it by the state.
    (b) All self-insured hospital and medical service products must comply with coverage
mandates, data reporting, and consumer protection requirements applicable to the licensed
carrier administering the product, had the product been insured, including chapters 62J,
62M, and 62Q. Any self-insured products that limit coverage to a network of providers
or provide different levels of coverage between network and nonnetwork providers shall
comply with section 62D.123 and geographic access standards for health maintenance
organizations adopted by the commissioner of health in rule under chapter 62D.
    (c) Notwithstanding paragraph (b), a self-insured hospital and medical product
offered under sections 43A.22 to 43A.30 is not required to extend dependent coverage to
an eligible employee's unmarried child under the age of 25 to the full extent required under
chapters 62A and 62L. Dependent coverage must, at a minimum, extend to an eligible
employee's unmarried child who is under the age of 19 or an unmarried child under the
age of 25 who is a full-time student. The definition of "full-time student" for purposes
of this paragraph includes any student who by reason of illness, injury, or physical or
mental disability as documented by a physician is unable to carry what the educational
institution considers a full-time course load so long as the student's course load is at least
60 percent of what otherwise is considered by the institution to be a full-time course load.
Any notice regarding termination of coverage due to attainment of the limiting age must
include information about this definition of "full-time student."
    (d) Beginning January 1, 2010, the health insurance benefit plans offered in the
commissioner's plan under section 43A.18, subdivision 2, and the managerial plan under
section 43A.18, subdivision 3, must include an option for a health plan that is compatible
with the definition of a high-deductible health plan in section 223 of the United States
Internal Revenue Code.

    Sec. 2. Minnesota Statutes 2007 Supplement, section 62J.495, is amended by adding a
subdivision to read:
    Subd. 3. Interoperable electronic health record requirements. (a) To meet the
requirements of subdivision 1, hospitals and health care providers must meet the following
criteria when implementing an interoperable electronic health records system within their
hospital system or clinical practice setting.
    (b) The electronic health record must be certified by the Certification Commission
for Healthcare Information Technology, or its successor. This criterion only applies to
hospitals and health care providers whose practice setting is a practice setting covered
by Certification Commission for Healthcare Information Technology certifications. This
criterion shall be considered met if a hospital or health care provider is using an electronic
health records system that has been certified within the last three years, even if a more
current version of the system has been certified within the three-year period.
    (c) A health care provider who is a prescriber or dispenser of controlled substances
must have an electronic health record system that meets the requirements of section
62J.497.

    Sec. 3. [62J.497] ELECTRONIC PRESCRIPTION DRUG PROGRAM.
    Subdivision 1. Definitions. For the purposes of this section, the following terms
have the meanings given.
    (a) "Dispense" or "dispensing" has the meaning given in section 151.01, subdivision
30. Dispensing does not include the direct administering of a controlled substance to a
patient by a licensed health care professional.
    (b) "Dispenser" means a person authorized by law to dispense a controlled substance,
pursuant to a valid prescription.
    (c) "Electronic media" has the meaning given under Code of Federal Regulations,
title 45, part 160.103.
    (d) "E-prescribing" means the transmission using electronic media of prescription
or prescription-related information between a prescriber, dispenser, pharmacy benefit
manager, or group purchaser, either directly or through an intermediary, including an
e-prescribing network. E-prescribing includes, but is not limited to, two-way transmissions
between the point of care and the dispenser.
    (e) "Electronic prescription drug program" means a program that provides for
e-prescribing.
    (f) "Group purchaser" has the meaning given in section 62J.03, subdivision 6.
    (g) "HL7 messages" means a standard approved by the standards development
organization known as Health Level Seven.
    (h) "National Provider Identifier" or "NPI" means the identifier described under
Code of Federal Regulations, title 45, part 162.406.
    (i) "NCPDP" means the National Council for Prescription Drug Programs, Inc.
    (j) "NCPDP Formulary and Benefits Standard" means the National Council for
Prescription Drug Programs Formulary and Benefits Standard, Implementation Guide,
Version 1, Release 0, October 2005.
    (k) "NCPDP SCRIPT Standard" means the National Council for Prescription Drug
Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide
Version 8, Release 1 (Version 8.1), October 2005.
    (l) "Pharmacy" has the meaning given in section 151.01, subdivision 2.
    (m) "Prescriber" means a licensed health care professional who is authorized to
prescribe a controlled substance under section 152.12, subdivision 1.
    (n) "Prescription-related information" means information regarding eligibility for
drug benefits, medication history, or related health or drug information.
    (o) "Provider" or "health care provider" has the meaning given in section 62J.03,
subdivision 8.
    Subd. 2. Requirements for electronic prescribing. (a) Effective January 1, 2011,
all providers, group purchasers, prescribers, and dispensers must establish and maintain
an electronic prescription drug program that complies with the applicable standards
in this section for transmitting, directly or through an intermediary, prescriptions and
prescription-related information using electronic media.
    (b) Nothing in this section requires providers, group purchasers, prescribers, or
dispensers to conduct the transactions described in this section. If transactions described in
this section are conducted, they must be done electronically using the standards described
in this section. Nothing in this section requires providers, group purchasers, prescribers,
or dispensers to electronically conduct transactions that are expressly prohibited by other
sections or federal law.
    (c) Providers, group purchasers, prescribers, and dispensers must use either HL7
messages or the NCPDP SCRIPT Standard to transmit prescriptions or prescription-related
information internally when the sender and the recipient are part of the same legal entity. If
an entity sends prescriptions outside the entity, it must use the NCPDP SCRIPT Standard
or other applicable standards required by this section. Any pharmacy within an entity
must be able to receive electronic prescription transmittals from outside the entity using
the adopted NCPDP SCRIPT Standard. This exemption does not supersede any Health
Insurance Portability and Accountability Act (HIPAA) requirement that may require the
use of a HIPAA transaction standard within an organization.
    (d) Entities transmitting prescriptions or prescription-related information where the
prescriber is required by law to issue a prescription for a patient to a nonprescribing
provider that in turn forwards the prescription to a dispenser are exempt from the
requirement to use the NCPDP SCRIPT Standard when transmitting prescriptions or
prescription-related information.
    Subd. 3. Standards for electronic prescribing. (a) Prescribers and dispensers
must use the NCPDP SCRIPT Standard for the communication of a prescription or
prescription-related information. The NCPDP SCRIPT Standard shall be used to conduct
the following transactions:
    (1) get message transaction;
    (2) status response transaction;
    (3) error response transaction;
    (4) new prescription transaction;
    (5) prescription change request transaction;
    (6) prescription change response transaction;
    (7) refill prescription request transaction;
    (8) refill prescription response transaction;
    (9) verification transaction;
    (10) password change transaction;
    (11) cancel prescription request transaction; and
    (12) cancel prescription response transaction.
    (b) Providers, group purchasers, prescribers, and dispensers must use the NCPDP
SCRIPT Standard for communicating and transmitting medication history information.
    (c) Providers, group purchasers, prescribers, and dispensers must use the NCPDP
Formulary and Benefits Standard for communicating and transmitting formulary and
benefit information.
    (d) Providers, group purchasers, prescribers, and dispensers must use the national
provider identifier to identify a health care provider in e-prescribing or prescription-related
transactions when a health care provider's identifier is required.
    (e) Providers, group purchasers, prescribers, and dispensers must communicate
eligibility information and conduct health care eligibility benefit inquiry and response
transactions according to the requirements of section 62J.536.

    Sec. 4. [62U.01] DEFINITIONS.
    Subdivision 1. Applicability. For purposes of this chapter, the terms defined in this
section have the meanings given, unless otherwise specified.
    Subd. 2. Basket or baskets of care. "Basket" or "baskets of care" means a
collection of health care services that are paid separately under a fee-for-service system,
but which are ordinarily combined by a provider in delivering a full diagnostic or
treatment procedure to a patient.
    Subd. 3. Clinically effective. "Clinically effective" means that the use of a
particular health technology or service improves or prevents a decline in patient clinical
status, as measured by medical condition, survival rates, and other variables, and that the
use of the particular technology or service demonstrates a clinical or outcome advantage
over alternative technologies or services. This definition shall not be used to exclude or
deny technology or treatment necessary to preserve life on the basis of an individual's age
or expected length of life or of the individual's present or predicted disability, degree
of medical dependency, or quality of life.
    Subd. 4. Commissioner. "Commissioner" means the commissioner of health unless
otherwise specified.
    Subd. 5. Cost-effective. "Cost-effective" means that the economic costs of using
a particular service, device, or health technology to achieve improvement or prevent
a decline in a patient's health outcome are justified given the comparison to both the
economic costs and the improvement or prevention of decline in patient health outcome
resulting from the use of an alternative service, device, or technology, or from not
providing the service, device, or technology. This definition shall not be used to exclude
or deny technology or treatment necessary to preserve life on the basis of an individual's
age or expected length of life or of the individual's present or predicted disability, degree
of medical dependency, or quality of life.
    Subd. 6. Group purchaser. "Group purchaser" has the meaning provided in
section 62J.03.
    Subd. 7. Health plan. "Health plan" means a health plan as defined in section
62A.011.
    Subd. 8. Health plan company. "Health plan company" has the meaning provided
in section 62Q.01, subdivision 4.
    Subd. 9. Participating provider. "Participating provider" means a provider who
has entered into a service agreement with a health plan company.
    Subd. 10. Provider or health care provider. "Provider" or "health care provider"
means a health care provider as defined in section 62J.03, subdivision 8.
    Subd. 11. Service agreement. "Service agreement" means an agreement, contract,
or other arrangement between a health plan company and a provider under which the
provider agrees that when health services are provided for an enrollee, the provider shall
not make a direct charge against the enrollee for those services or parts of services that
are covered by the enrollee's contract, but shall look to the health plan company for the
payment for covered services, to the extent they are covered.
    Subd. 12. State health care program. "State health care program" means the
medical assistance, MinnesotaCare, and general assistance medical care programs.
    Subd. 13. Third-party administrator. "Third-party administrator" means a
vendor of risk-management services or an entity administering a self-insurance or health
insurance plan under section 60A.23.

    Sec. 5. [62U.02] PAYMENT RESTRUCTURING; INCENTIVE PAYMENTS
BASED ON QUALITY OF CARE.
    Subdivision 1. Development. (a) The commissioner of health shall develop a
standardized set of measures by which to assess the quality of health care services offered
by health care providers, including health care providers certified as health care homes
under section 256B.0751. Quality measures must be based on medical evidence and be
developed through a process in which providers participate. The measures shall be used
for the quality incentive payment system developed in subdivision 2 and must:
    (1) include uniform definitions, measures, and forms for submission of data, to the
greatest extent possible;
    (2) seek to avoid increasing the administrative burden on health care providers;
    (3) be initially based on existing quality indicators for physician and hospital
services, which are measured and reported publicly by quality measurement organizations,
including, but not limited to, Minnesota Community Measurement and specialty societies;
    (4) place a priority on measures of health care outcomes, rather than process
measures, wherever possible; and
    (5) incorporate measures for primary care, including preventive services, coronary
artery and heart disease, diabetes, asthma, depression, and other measures as determined
by the commissioner.
    (b) The measures shall be reviewed at least annually by the commissioner.
    Subd. 2. Quality incentive payments. (a) By July 1, 2009, the commissioner
shall develop a system of quality incentive payments under which providers are eligible
for quality-based payments that are in addition to existing payment levels, based upon
a comparison of provider performance against specified targets, and improvement over
time. The targets must be based upon and consistent with the quality measures established
under subdivision 1.
    (b) To the extent possible, the payment system must adjust for variations in patient
population, in order to reduce incentives to health care providers to avoid high-risk
patients or populations.
    (c) The requirements of section 62Q.101 do not apply under this incentive payment
system.
    Subd. 3. Quality transparency. The commissioner shall establish standards for
measuring health outcomes, establish a system for risk adjusting quality measures, and
issue annual public reports on provider quality beginning July 1, 2010. By January 1,
2010, physician clinics and hospitals shall submit standardized electronic information
on the outcomes and processes associated with patient care to the commissioner or the
commissioner's designee. In addition to measures of care processes and outcomes, the
report may include other measures designated by the commissioner, including, but not
limited to, care infrastructure and patient satisfaction. The commissioner shall ensure
that any quality data reporting requirements established under this subdivision are not
duplicative of publicly reported, communitywide quality reporting activities currently
under way in Minnesota. Nothing in this subdivision is intended to replace or duplicate
current privately supported activities related to quality measurement and reporting in
Minnesota.
    Subd. 4. Contracting. The commissioner may contract with a private entity or
consortium of private entities to complete the tasks in subdivisions 1 to 3. The private
entity or consortium must be nonprofit and have governance that includes representatives
from the following stakeholder groups: health care providers, health plan companies,
consumers, employers or other health care purchasers, and state government. No one
stakeholder group shall have a majority of the votes on any issue or hold extraordinary
powers not granted to any other governance stakeholder.
    Subd. 5. Implementation. (a) By January 1, 2010, health plan companies shall use
the standardized quality measures established under this section and shall not require
providers to use and report health plan company-specific quality and outcome measures.
    (b) By July 1, 2010, the commissioner of finance shall implement this incentive
payment system for all participants in the state employee group insurance program.

    Sec. 6. [62U.03] PAYMENT RESTRUCTURING; CARE COORDINATION
PAYMENTS.
    (a) By January 1, 2010, health plan companies shall include health care homes in
their provider networks and by July 1, 2010, shall pay a care coordination fee for their
members who choose to enroll in health care homes certified by the commissioners
of health and human services under section 256B.0751. Health plan companies shall
develop payment conditions and terms for the care coordination fee for health care homes
participating in their network in a manner that is consistent with the system developed
under section 256B.0753. Nothing in this section shall restrict the ability of health plan
companies to selectively contract with health care providers, including health care homes.
Health plan companies may reduce or reallocate payments to other providers to ensure
that implementation of care coordination payments is cost neutral.
    (b) By July 1, 2010, the commissioner of finance shall implement the care
coordination payments for participants in the state employee group insurance program.
The commissioner of finance may reallocate payments within the health care system in
order to ensure that the implementation of this section is cost neutral.

    Sec. 7. [62U.04] PAYMENT REFORM TO REDUCE HEALTH CARE COSTS
AND IMPROVE QUALITY.
    Subdivision 1. Development of tools to improve costs and quality outcomes.
    The commissioner of health shall develop a plan to create transparent prices, encourage
greater provider innovation and collaboration across points on the health continuum
in cost-effective, high-quality care delivery, reduce the administrative burden on
providers and health plans associated with submitting and processing claims, and provide
comparative information to consumers on variation in health care cost and quality across
providers. The development must be complete by January 1, 2010.
    Subd. 2. Calculation of health care costs and quality. The commissioner of health
shall develop a uniform method of calculating providers' relative cost of care, defined as a
measure of health care spending including resource use and unit prices, and relative quality
of care. In developing this method, the commissioner must address the following issues:
    (1) provider attribution of costs and quality;
    (2) appropriate adjustment for outlier or catastrophic cases;
    (3) appropriate risk adjustment to reflect differences in the demographics and health
status across provider patient populations, using generally accepted and transparent risk
adjustment methodologies;
    (4) specific types of providers that should be included in the calculation;
    (5) specific types of services that should be included in the calculation;
    (6) appropriate adjustment for variation in payment rates;
    (7) the appropriate provider level for analysis;
    (8) payer mix adjustments, including variation across providers in the percentage of
revenue received from government programs; and
    (9) other factors that the commissioner determines are needed to ensure validity
and comparability of the analysis.
    Subd. 3. Provider peer grouping. (a) The commissioner shall develop a peer
grouping system for providers based on a combined measure that incorporates both
provider risk-adjusted cost of care and quality of care, and for specific conditions as
determined by the commissioner. In developing this system, the commissioner shall
consult and coordinate with health care providers, health plan companies, state agencies,
and organizations that work to improve health care quality in Minnesota. For purposes of
the final establishment of the peer grouping system, the commissioner shall not contract
with any private entity, organization, or consortium of entities that has or will have a direct
financial interest in the outcome of the system.
    (b) Beginning June 1, 2010, the commissioner shall disseminate information to
providers on their cost of care, resource use, quality of care, and the results of the grouping
developed under this subdivision in comparison to an appropriate peer group. Any
analyses or reports that identify providers may only be published after the provider has
been provided the opportunity by the commissioner to review the underlying data and
submit comments. The provider shall have 21 days to review the data for accuracy.
    (c) The commissioner shall establish an appeals process to resolve disputes from
providers regarding the accuracy of the data used to develop analyses or reports.
    (d) Beginning September 1, 2010, the commissioner shall, no less than annually,
publish information on providers' cost, quality, and the results of the peer grouping
process. The results that are published must be on a risk-adjusted basis.
    Subd. 4. Encounter data. (a) Beginning July 1, 2009, and every six months
thereafter, all health plan companies and third-party administrators shall submit encounter
data to a private entity designated by the commissioner of health. The data shall be
submitted in a form and manner specified by the commissioner subject to the following
requirements:
    (1) the data must be de-identified data as described under the Code of Federal
Regulations, title 45, section 164.514;
    (2) the data for each encounter must include an identifier for the patient's health care
home if the patient has selected a health care home; and
    (3) except for the identifier described in clause (2), the data must not include
information that is not included in a health care claim or equivalent encounter information
transaction that is required under section 62J.536.
    (b) The commissioner or the commissioner's designee shall only use the data
submitted under paragraph (a) for the purpose of carrying out its responsibilities in this
section, and must maintain the data that it receives according to the provisions of this
section.
    (c) Data on providers collected under this subdivision are private data on individuals
or nonpublic data, as defined in section 13.02. Notwithstanding the definition of summary
data in section 13.02, subdivision 19, summary data prepared under this subdivision
may be derived from nonpublic data. The commissioner or the commissioner's designee
shall establish procedures and safeguards to protect the integrity and confidentiality of
any data that it maintains.
    (d) The commissioner or the commissioner's designee shall not publish analyses or
reports that identify, or could potentially identify, individual patients.
    Subd. 5. Pricing data. (a) Beginning July 1, 2009, and annually on January 1
thereafter, all health plan companies and third-party administrators shall submit data
on their contracted prices with health care providers to a private entity designated by
the commissioner of health for the purposes of performing the analyses required under
this subdivision. The data shall be submitted in the form and manner specified by the
commissioner of health.
    (b) The commissioner or the commissioner's designee shall only use the data
submitted under this subdivision for the purpose of carrying out its responsibilities under
this section.
    (c) Data collected under this subdivision are nonpublic data as defined in section
13.02. Notwithstanding the definition of summary data in section 13.02, subdivision 19,
summary data prepared under this section may be derived from nonpublic data. The
commissioner shall establish procedures and safeguards to protect the integrity and
confidentiality of any data that it maintains.
    Subd. 6. Contracting. The commissioner may contract with a private entity
or consortium of entities to develop the standards. The private entity or consortium
must be nonprofit and have governance that includes representatives from the following
stakeholder groups: health care providers, health plan companies, hospitals, consumers,
employers or other health care purchasers, and state government. The entity or consortium
must ensure that the representatives of stakeholder groups in the aggregate reflect all
geographic areas of the state. No one stakeholder group shall have a majority of the votes
on any issue or hold extraordinary powers not granted to any other governance stakeholder.
    Subd. 7. Consumer engagement. The commissioner of health shall convene a
work group to develop strategies for engaging consumers in understanding the importance
of health care cost and quality, specifically as it relates to health care outcomes, consumer
out-of-pocket costs, and variations in health care cost and quality across providers. The
work group shall develop strategies to assist consumers in becoming advocates for higher
value health care and a more efficient, effective health care system. The work group shall
make recommendations to the commissioner and the legislature by January 1, 2010, and
shall identify specific action steps needed to achieve the recommendations.
    Subd. 8. Provider innovation to reduce health care costs and improve quality.
    (a) Nothing in this section shall prohibit group purchasers and health care providers,
upon mutual agreement, from entering into arrangements that establish package prices
for a comprehensive set of services or separately for the cost of care for specific health
conditions in addition to the baskets of care established in section 62U.05, in order to give
providers the flexibility to innovate on ways to reduce health care costs while improving
overall quality of care and health outcomes.
    (b) The commissioner of health may convene working groups of private sector
payers and health care providers to discuss and develop new strategies for reforming
health care payment systems to promote innovative care delivery that reduces health
care costs and improves quality.
    Subd. 9. Uses of information. (a) By January 1, 2011:
    (1) the commissioner of finance shall use the information and methods developed
under subdivision 3 to strengthen incentives for members of the state employee group
insurance program to use high-quality, low-cost providers;
    (2) all political subdivisions, as defined in section 13.02, subdivision 11, that offer
health benefits to their employees must offer plans that differentiate providers on their
cost and quality performance and create incentives for members to use better-performing
providers;
    (3) all health plan companies shall use the information and methods developed
under subdivision 3 to develop products that encourage consumers to use high-quality,
low-cost providers; and
    (4) health plan companies that issue health plans in the individual market or the
small employer market must offer at least one health plan that uses the information
developed under subdivision 3 to establish financial incentives for consumers to choose
higher-quality, lower-cost providers through enrollee cost-sharing or selective provider
networks.
    (b) By January 1, 2011, the commissioner of health shall report to the governor
and the legislature on recommendations to encourage health plan companies to promote
widespread adoption of products that encourage the use of high-quality, low-cost providers.
The commissioner's recommendations may include tax incentives, public reporting of
health plan performance, regulatory incentives or changes, and other strategies.

    Sec. 8. [62U.05] PROVIDER PRICING FOR BASKETS OF CARE.
    Subdivision 1. Establishment of definitions. (a) By July 1, 2009, the commissioner
of health shall establish uniform definitions for baskets of care beginning with a minimum
of seven baskets of care. In selecting health conditions for which baskets of care should
be defined, the commissioner shall consider coronary artery and heart disease, diabetes,
asthma, and depression. In selecting health conditions, the commissioner shall also
consider the prevalence of the health conditions, the cost of treating the health conditions,
and the potential for innovations to reduce cost and improve quality.
    (b) The commissioner shall convene one or more work groups to assist in
establishing these definitions. Each work group shall include members appointed by
statewide associations representing relevant health care providers and health plan
companies, and organizations that work to improve health care quality in Minnesota.
    (c) To the extent possible, the baskets of care must incorporate a patient-directed,
decision-making support model.
    Subd. 2. Package prices. (a) Beginning January 1, 2010, health care providers may
establish package prices for the baskets of care defined under subdivision 1.
    (b) Beginning January 1, 2010, no health care provider or group of providers that has
established a package price for a basket of care under this section shall vary the payment
amount that the provider accepts as full payment for a health care service based upon
the identity of the payer, upon a contractual relationship with a payer, upon the identity
of the patient, or upon whether the patient has coverage through a group purchaser.
This paragraph applies only to health care services provided to Minnesota residents or
to non-Minnesota residents who obtain health insurance through a Minnesota employer.
This paragraph does not apply to services paid for by Medicare, state public health care
programs through fee-for-service or prepaid arrangements, workers' compensation, or
no-fault automobile insurance. This paragraph does not affect the right of a provider to
provide charity care or care for a reduced price due to financial hardship of the patient or
due to the patient being a relative or friend of the provider.
    Subd. 3. Quality measurements for baskets of care. (a) The commissioner shall
establish quality measurements for the defined baskets of care by December 31, 2009.
The commissioner may contract with an organization that works to improve health care
quality to make recommendations about the use of existing measures or establishing new
measures where no measures currently exist.
    (b) Beginning July 1, 2010, the commissioner or the commissioner's designee shall
publish comparative price and quality information on the baskets of care in a manner that is
easily accessible and understandable to the public, as this information becomes available.

    Sec. 9. [62U.06] COORDINATION; LEGISLATIVE OVERSIGHT ON
PAYMENT RESTRUCTURING.
    Subdivision 1. Coordination. In carrying out the responsibilities of this chapter, the
commissioner of health shall ensure that the activities and data collection are implemented
in an integrated and coordinated manner that avoids unnecessary duplication of effort.
To the extent possible, the commissioner shall use existing data sources and implement
methods to streamline data collection in order to reduce public and private sector
administrative costs.
    Subd. 2. Legislative oversight. Beginning January 15, 2009, the commissioner of
health shall submit to the Legislative Commission on Health Care Access periodic progress
reports on the implementation of this chapter and sections 256B.0751 to 256B.0754.
    Subd. 3. Rulemaking. For purposes of this chapter, the commissioner may use the
expedited rulemaking process under section 14.389.

    Sec. 10. [62U.07] SECTION 125 PLANS.
    Subdivision 1. Definitions. For purposes of this section, the following terms have
the meanings given them.
    (a) "Employee" means an employee currently on an employer's payroll other than a
retiree or disabled former employee.
    (b) "Employer" means a person, firm, corporation, partnership, association, business
trust, or other entity employing one or more persons, including a political subdivision of
the state, filing payroll tax information on the employed person or persons.
    (c) "Section 125 Plan" means a cafeteria or premium-only plan under section 125 of
the Internal Revenue Code that allows employees to pay for health coverage premiums
with pretax dollars.
    (d) "Small employer" means an employer with two to 50 employees.
    Subd. 2. Section 125 Plan requirement. (a) Effective July 1, 2009, all employers
with 11 or more current full-time equivalent employees in this state shall establish and
maintain a Section 125 Plan to allow their employees to purchase individual market or
employer-based health coverage with pretax dollars. Nothing in this section requires
employers to offer or purchase group health coverage for their employees. The following
employers are exempt from the Section 125 Plan requirement:
    (1) employers that offer a health plan as defined in section 62A.011, subdivision
3, that is group coverage;
    (2) employers that provide self-insurance as defined in section 62E.02; or
    (3) employers that have no employees who are eligible to participate in a Section
125 Plan.
    (b) Notwithstanding paragraph (a), an employer may opt out of the requirement to
establish a Section 125 Plan by sending a form to the commissioner of commerce. The
commissioner of commerce shall create a check-box form for employers to opt out. The
form must contain a check box indicating the employer is choosing to opt out and a check
box indicating that the employer certifies they have received education and information
on the advantages of Section 125 Plans. The commissioner of commerce shall make the
form available through their Web site by April 1, 2009.
    Subd. 3. Employer requirements. (a) Employers that do not offer a health plan as
defined in section 62A.011, subdivision 3, that is group coverage and are required to offer
or choose to offer a Section 125 Plan shall:
    (1) allow employees to purchase an individual market health plan for themselves
and their dependents;
    (2) allow employees to choose any insurance producer licensed in accident and health
insurance under chapter 60K to assist them in purchasing an individual market health plan;
    (3) upon an employee's request, deduct premium amounts on a pretax basis in an
amount not to exceed an employee's wages, and remit these employee payments to the
health plan; and
    (4) provide notice to employees that individual market health plans purchased by
employees through payroll deduction are not employer-sponsored or administered.
    (b) Employers shall be held harmless from any and all claims related to the
individual market health plans purchased by employees under a Section 125 Plan.
    Subd. 4. Section 125 Plan employer incentives. (a) The commissioner of
employment and economic development shall award grants to eligible small employers
that establish Section 125 Plans.
    (b) In order to be eligible for a grant, a small employer must:
    (1) not have offered health insurance to employees through a group health insurance
plan as defined in section 62A.10 or through a self-insured plan as defined in section
62E.02 in the 12 months prior to applying for grant funding under this section;
    (2) have established a Section 125 Plan within 90 days prior to applying for grant
funding under this section, and must not have offered a Section 125 Plan to employees
for at least a nine-month period prior to the establishment of the Section 125 Plan under
this section; and
    (3) certify to the commissioner that the employer has established a Section 125 Plan
and meets the requirements of subdivision 3.
    (c) The amount of the grant awarded to a small employer under this section shall
be $350.

    Sec. 11. [62U.08] ESSENTIAL BENEFIT SET.
    Subdivision 1. Work group created. The commissioner of health shall convene a
work group to make recommendations on the design of a health benefit set that provides
coverage for a broad range of services and technologies, is based on scientific evidence
that the services and technologies are clinically effective and cost-effective, and provides
lower enrollee cost sharing for services and technologies that have been determined to
be cost-effective. The work group shall include representatives of health care providers,
health plans, state agencies, and employers. Members of the work group must have
expertise in standards for evidence-based care, benefit design and development, actuarial
analysis, or knowledge relating to the analysis of the cost impact of coverage of specified
benefits. The work group must meet at least once per year and at other times as necessary
to make recommendations to the commissioner on updating the benefit set as necessary to
ensure that the benefit set continues to be safe, effective, and scientifically based.
    Subd. 2. Duties. By October 15, 2009, the work group shall develop and submit
to the commissioner an initial essential benefit set and design that includes coverage
for a broad range of services, is based on scientific evidence that services are clinically
effective and cost-effective, and provides lower enrollee cost sharing for services that
have been determined to be cost-effective. The benefit set must include necessary
evidence-based health care services, procedures, diagnostic tests, and technologies that
are scientifically proven to be both clinically effective and cost-effective. In developing
its recommendations, the work group may consult with the Institute for Clinical Systems
Improvement (ICSI) to assemble existing scientifically based practice standards.
    Subd. 3. Report. By January 15, 2010, the commissioner shall report the
recommendations of the work group to the chairs and ranking minority members of the
legislative committees and divisions with jurisdiction over health care policy and finance.

    Sec. 12. [62U.09] HEALTH CARE REFORM REVIEW COUNCIL.
    Subdivision 1. Establishment. The Health Care Reform Review Council is
established for the purpose of periodically reviewing the progress of implementation of
this chapter and sections 256B.0751 to 256B.0754.
    Subd. 2. Members. (a) The Health Care Reform Review Council shall consist of 14
members who are appointed as follows:
    (1) two members appointed by the Minnesota Medical Association, at least one
of whom must represent rural physicians;
    (2) one member appointed by the Minnesota Nurses Association;
    (3) two members appointed by the Minnesota Hospital Association, at least one of
whom must be a rural hospital administrator;
    (4) one member appointed by the Minnesota Academy of Physician Assistants;
    (5) one member appointed by the Minnesota Business Partnership;
    (6) one member appointed by the Minnesota Chamber of Commerce;
    (7) one member appointed by the SEIU Minnesota State Council;
    (8) one member appointed by the AFL-CIO;
    (9) one member appointed by the Minnesota Council of Health Plans;
    (10) one member appointed by the Smart Buy Alliance;
    (11) one member appointed by the Minnesota Medical Group Management
Association; and
    (12) one consumer member appointed by AARP Minnesota.
    (b) If a member is no longer able or eligible to participate, a new member shall be
appointed by the entity that appointed the outgoing member.
    Subd. 3. Operations of council. (a) The commissioner of health shall convene the
first meeting of the council on or before January 15, 2009, following the initial appointment
of the members and the advisory council must meet at least quarterly thereafter.
    (b) The council is governed by section 15.059, except that members shall not receive
per diems and the council does not expire.

    Sec. 13. STUDY OF UNIFORM CLAIMS REVIEW PROCESS.
    The commissioner of health shall establish a work group including representatives
of the Minnesota Hospital Association, Minnesota Medical Association, and Minnesota
Council of Health Plans to make recommendations on the potential for reducing claims
adjudication costs of health care providers and health plan companies by adopting more
uniform payment methods, and the potential impact of establishing uniform prices that
would replace current prices negotiated individually by providers with separate payers.
The work group shall make its recommendations to the commissioner by January 1, 2010,
and shall identify specific action steps needed to achieve the recommendations.

    Sec. 14. HEALTH CARE AFFORDABILITY PROPOSAL.
    The commissioner of health, in coordination with the commissioner of human
services, shall develop a health care affordability proposal for eligible individuals and
employees with access to employer-subsidized health coverage and with gross family
incomes of 300 percent of the federal poverty guidelines or less. For purposes of this
section, "employer-subsidized health coverage" has the meaning provided in Minnesota
Statutes, section 256L.07, subdivision 2, paragraph (c). The commissioner must evaluate
and report on direct payments to individuals, tax credits, including refundable tax credits,
tax deductions and a combination of direct payments, tax credits, and tax deductions
as mechanisms for providing affordable health coverage to individuals and families.
The proposal must be designed so that qualified individuals and families have access to
affordable coverage. For purposes of this section, coverage is "affordable" if the sum of
premiums, deductibles, and other out-of-pocket costs paid by an individual or family for
health coverage does not exceed the applicable percentage of the individual's or family's
gross monthly income set forth in Minnesota Statutes, section 256L.15, subdivision 2,
paragraph (d). The commissioner shall submit a report and recommendations to the
legislature by January 15, 2009.

ARTICLE 5
APPROPRIATIONS


Section 1. SUMMARY OF APPROPRIATIONS.
    The amounts shown in this section summarize direct appropriations, by fund, made
in this article.

2009
Total

General Fund
$
(3,254,000)
$
(3,254,000)

Health Care Access Fund
14,526,000
14,526,000

Total
$
11,272,000
$
11,272,000


Sec. 2. HEALTH AND HUMAN SERVICES APPROPRIATIONS.
    The sums shown in the columns marked "Appropriations" are added to or, if
shown in parentheses, subtracted from the appropriations in Laws 2007, chapter 147,
article 19, or other law to the agencies and for the purposes specified in this article. The
appropriations are from the general fund, or another named fund, and are available for
the fiscal year indicated for each purpose. The figure "2009" used in this article means
that the addition to or subtraction from the appropriation listed under it is available for the
fiscal year ending June 30, 2009.

APPROPRIATIONS

Available for the Year

Ending June 30

2009


Sec. 3. HUMAN SERVICES

Subdivision 1.Total Appropriation
$
3,063,000

Appropriations by Fund

2009

General
(2,430,000)

Health Care Access
5,493,000
The amounts that may be spent for each
purpose are specified in the following
subdivisions.


Subd. 2.Children and Economic Assistance
Operations

Health Care Access
6,000
This is a onetime appropriation.

Subd. 3.Basic Health Care Grants
The amounts that may be spent from the
appropriation for each purpose are as follows:

(a) MinnesotaCare Grants

Health Care Access
3,657,000
Seamless Coverage for MinnesotaCare
Eligible Children. In the fiscal year
beginning July 1, 2008, the seamless
coverage for MinnesotaCare eligible children
under Minnesota Statutes, section 256B.057,
subdivision 2c, shall be paid for out of the
health care access fund. Notwithstanding
any contrary provision in this article, this
paragraph shall not expire.


(b) MA Basic Health Care Grants Families and
Children

General Fund
(3,657,000)

Subd. 4.Health Care Management
The amounts that may be spent from the
appropriation for each purpose are as follows:

(a) Health Care Policy Administration

General
1,008,000

Health Care Access
1,004,000
Base Adjustment. The health care access
fund is decreased by $954,000 in fiscal year
2010 and decreased by $954,000 in fiscal
year 2011.
Base Adjustment. The general fund base
is decreased by $80,000 in both fiscal years
2010 and 2011.
Department of Education Computer
System. Of the health care access
fund appropriation, $50,000 is for the
commissioner to enter into an agreement
with the Department of Education for the
modification of the department's computer
system to implement Minnesota Statutes,
section 124D.1115. This is a onetime
appropriation.
Health Care Homes. The health care access
fund appropriation to the commissioner
to implement and administer health care
homes under Minnesota Statutes, sections
256B.0751 to 256B.0753, is available
through June 30, 2011. The base funding for
this activity in fiscal year 2012 and beyond
is zero. Notwithstanding any contrary
provision in this article, this paragraph
expires December 31, 2011.

(b) Health Care Operations

General
219,000

Health Care Access
826,000
Incentive Program and Outreach Grants.
Of the appropriation for the Minnesota health
care outreach program in Laws 2007, chapter
147, article 19, section 3, subdivision 7,
paragraph (b):
(1) $400,000 in fiscal year 2009 from the
general fund and $200,000 in fiscal year 2009
from the health care access fund are for the
incentive program under Minnesota Statutes,
section 256.962, subdivision 5. For the
biennium beginning July 1, 2009, base level
funding for this activity shall be $360,000
from the general fund and $160,000 from the
health care access fund; and
(2) $100,000 in fiscal year 2009 from the
general fund and $50,000 in fiscal year 2009
from the health care access fund are for the
outreach grants under Minnesota Statutes,
section 256.962, subdivision 2. For the
biennium beginning July 1, 2009, base level
funding for this activity shall be $90,000
from the general fund and $40,000 from the
health care access fund.
Outreach Funding. (1) The health care
access fund base funding for the incentive
program under Minnesota Statutes, section
256.962, subdivision 5, shall be increased by
$100,000 for the fiscal year beginning July
1, 2009.
(2) Notwithstanding Minnesota Statutes,
section 295.581, the commissioner of finance
shall reimburse the medical assistance
general fund account from the health care
access fund by $701,000 in fiscal year 2010
and $1,527,000 in fiscal year 2011 for the
cost to the general fund for the increase in
enrollment to the medical assistance program
for families with children due to the outreach
efforts.
Base Adjustment. The health care access
fund base is decreased by $379,000 in
fiscal year 2010 and decreased by $340,000
in fiscal year 2011. The general fund
appropriation is onetime.


Sec. 4. COMMISSIONER OF HEALTH

Subdivision 1.Total Appropriation
$
8,209,000

Appropriations by Fund

2009

Health Care Access
9,033,000

General
(824,000)
The amounts that may be spent for each
purpose are specified in the following
subdivisions.


Subd. 2.Community and Family Health
Promotion

Health Care Access
1,188,000
Base Adjustment. The health care access
fund base shall be increased by $20,454,000
in fiscal year 2010 and $27,531,000 in
fiscal year 2011. Of these base adjustments,
$19,587,000 in fiscal year 2010 and
$26,175,000 in fiscal year 2011 is for
grants to local communities in accordance
with Minnesota Statutes, section 145.986,
subdivision 2; $413,000 in fiscal year
2010 and $825,000 in fiscal year 2011 is
for staffing, operating costs, contracts for
evaluation, and administration costs. The
base for this program in fiscal year 2012 is $0.
Notwithstanding any contrary provision in
this article, this paragraph expires December
31, 2012.
Health Care Homes. The commissioner of
health shall coordinate with the commissioner
of human services to maximize federal
financial participation for this activity.

Subd. 3.Policy, Quality, and Compliance

Health Care Access
7,845,000

General
(824,000)
Health Savings Projections and
Measurement. $152,000 in fiscal year 2009
is for statewide health savings research and
measurement.
Open Door Health Center. Of the health
care access fund appropriation, $350,000 is
to be awarded as a grant to the Open Door
Health Center to act as bridge funding to
meet the demand for health care services in
medically underserved areas.
Community Benefit Standards. Of
this appropriation, $84,000 is for the
commissioner to make recommendations
to the legislature on community benefit
standards to be required of nonprofit health
plan companies doing business in the state.
The expectations of the community benefits
provided and reported should be related to the
statutory expectations in Minnesota Statutes,
sections 62C.01 and 62D.01, and focus on
supporting public health, improving the art
and science of medical care, and addressing
the need for financial assistance to access
ongoing coverage, and not related to general
philanthropic endeavors. The commissioner
shall seek public input regarding the range of
options to be explored and the accountability
measures.
The recommendations must include a
procedure by which each nonprofit health
plan company would periodically and
uniformly report to the state and to the public
regarding the company's compliance with
the requirements.
The commissioner shall recommend a fair
and effective enforcement and remediation
mechanism.
Federally Qualified Health Centers. Of
the health care access fund appropriation,
$1,824,000 is for subsidies to federally
qualified health centers under Minnesota
Statutes, section 145.9269. The health care
access fund base for this activity shall be
$2,500,000 for fiscal years 2010 and 2011.
Notwithstanding any contrary provision in
this article, this paragraph expires December
31, 2012.
The general fund appropriation for this
program shall be reduced by $824,000 for
fiscal year 2009, and by $1,500,000 in both
fiscal years 2010 and 2011. The general
fund appropriation for this program shall be
increased by $2,500,000 in both fiscal years
2012 and 2013.
Health Care Reform. Funds appropriated to
the commissioner to implement article 4 shall
be available until expended. Base funding
for these activities in fiscal year 2013 is $0.
Section 125 Employer Incentives.
$1,000,000 from the health care access
fund is appropriated to the commissioner of
health to be transferred to the Department of
Employment and Economic Development
for grants authorized under Minnesota
Statutes, section 62U.07. This appropriation
is available until expended.
Base Adjustment. The health care access
fund base shall be reduced by $1,851,000 in
fiscal year 2010, by $2,419,000 in fiscal year
2011, and by $4,159,000 in fiscal year 2012.


Sec. 5. COMMISSIONER OF REVENUE
The health care access fund base shall be
increased by $27,000 in fiscal year 2010 and
$15,000 in fiscal year 2011 for administrative
costs. The health care access fund base for
fiscal year 2012 and beyond is $0.


Sec. 6. COMMISSIONER OF FINANCE
Health Insurance Premiums Credit. The
commissioner of finance shall report to
the legislature the amount of any funds
transferred from the health care access fund
to the general fund for general fund costs
related to implementation of the health
insurance premiums credit under Minnesota
Statutes, section 290.0678, and shall include
this amount in the health care access fund
balance.

    Sec. 7. SUNSET OF UNCODIFIED LANGUAGE.
    All uncodified language contained in this article expires on June 30, 2009, unless a
different expiration date is specified.

    Sec. 8. EFFECTIVE DATE.
    The provisions in this article are effective July 1, 2008, unless a different effective
date is specified.
Presented to the governor May 19, 2008
Signed by the governor May 29, 2008, 2:20 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569