1.1    .................... moves to amend H. F. No. 297, the delete everything amendment
1.2(A07-0645) as follows:
1.3Page 219, after line 1, insert:


1.6    Section 1. Minnesota Statutes 2006, section 62A.65, subdivision 3, is amended to read:
1.7    Subd. 3. Premium rate restrictions. No individual health plan may be offered,
1.8sold, issued, or renewed to a Minnesota resident unless the premium rate charged is
1.9determined in accordance with the following requirements:
1.10    (a) Premium rates must be no more than 25 percent above and no more than 25
1.11percent below the index rate charged to individuals for the same or similar coverage,
1.12adjusted pro rata for rating periods of less than one year. The premium variations
1.13permitted by this paragraph must be based only upon health status, claims experience,
1.14and occupation. For purposes of this paragraph, health status includes refraining from
1.15tobacco use or other actuarially valid lifestyle factors associated with good health,
1.16provided that the lifestyle factor and its effect upon premium rates have been determined
1.17by the commissioner to be actuarially valid and have been approved by the commissioner.
1.18Variations permitted under this paragraph must not be based upon age or applied
1.19differently at different ages. This paragraph does not prohibit use of a constant percentage
1.20adjustment for factors permitted to be used under this paragraph.
1.21    (b) Premium rates may vary based upon the ages of covered persons only as
1.22provided in this paragraph. In addition to the variation permitted under paragraph (a),
1.23each health carrier may use an additional premium variation based upon age for adults
1.24aged 19 and above of up to plus or minus 50 percent of the index rate. Premium rates for
1.25children under the age of 19 may not vary based on age, regardless of whether the child is
1.26covered as a dependent or as a primary insured.
2.1    (c) A health carrier may request approval by the commissioner to establish separate
2.2geographic regions determined by the health carrier and to establish separate index rates
2.3for each such region. The commissioner shall grant approval if the following conditions
2.4are met:
2.5    (1) the geographic regions must be applied uniformly by the health carrier;
2.6    (2) each geographic region must be composed of no fewer than seven counties that
2.7create a contiguous region; and
2.8    (3) the health carrier provides actuarial justification acceptable to the commissioner
2.9for the proposed geographic variations in index rates, establishing that the variations are
2.10based upon differences in the cost to the health carrier of providing coverage.
2.11    (d) Health carriers may use rate cells and must file with the commissioner the rate
2.12cells they use. Rate cells must be based upon the number of adults or children covered
2.13under the policy and may reflect the availability of Medicare coverage. The rates for
2.14different rate cells must not in any way reflect generalized differences in expected costs
2.15between principal insureds and their spouses.
2.16    (e) In developing its index rates and premiums for a health plan, a health carrier shall
2.17take into account only the following factors:
2.18    (1) actuarially valid differences in rating factors permitted under paragraphs (a)
2.19and (b); and
2.20    (2) actuarially valid geographic variations if approved by the commissioner as
2.21provided in paragraph (c).
2.22    (f) All premium variations must be justified in initial rate filings and upon request of
2.23the commissioner in rate revision filings. All rate variations are subject to approval by
2.24the commissioner.
2.25    (g) The loss ratio must comply with the section 62A.021 requirements for individual
2.26health plans.
2.27    (h) The rates must not be approved, unless the commissioner has determined that the
2.28rates are reasonable. In determining reasonableness, the commissioner shall consider the
2.29growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar
2.30year or years that the proposed premium rate would be in effect, actuarially valid changes
2.31in risks associated with the enrollee populations, and actuarially valid changes as a result
2.32of statutory changes in Laws 1992, chapter 549.
2.33    (i) An insurer may, as part of a minimum lifetime loss ratio guarantee filing under
2.34section 62A.02, subdivision 3a, include a rating practices guarantee as provided in this
2.35paragraph. The rating practices guarantee must be in writing and must guarantee that
2.36the policy form will be offered, sold, issued, and renewed only with premium rates and
3.1premium rating practices that comply with subdivisions 2, 3, 4, and 5. The rating practices
3.2guarantee must be accompanied by an actuarial memorandum that demonstrates that the
3.3premium rates and premium rating system used in connection with the policy form will
3.4satisfy the guarantee. The guarantee must guarantee refunds of any excess premiums to
3.5policyholders charged premiums that exceed those permitted under subdivision 2, 3, 4,
3.6or 5. An insurer that complies with this paragraph in connection with a policy form is
3.7exempt from the requirement of prior approval by the commissioner under paragraphs
3.8(c), (f), and (h).

3.9    Sec. 2. [62A.67] MINNESOTA HEALTH INSURANCE EXCHANGE.
3.10    Subdivision 1. Title; citation. This section may be cited as the "Minnesota Health
3.11Insurance Exchange."
3.12    Subd. 2. Creation; tax exemption. The Minnesota Health Insurance Exchange
3.13is created for the limited purpose of providing individuals with greater access, choice,
3.14portability, and affordability of health insurance products. The Minnesota Health
3.15Insurance Exchange is a not-for-profit corporation under chapter 317A and section 501(c)
3.16of the Internal Revenue Code.
3.17    Subd. 3. Definitions. The following terms have the meanings given them unless
3.18otherwise provided in text.
3.19    (a) "Board" means the board of directors of the Minnesota Health Insurance
3.20Exchange under subdivision 13.
3.21    (b) "Commissioner" means:
3.22    (1) the commissioner of commerce for health insurers subject to the jurisdiction
3.23of the Department of Commerce;
3.24    (2) the commissioner of health for health insurers subject to the jurisdiction of the
3.25Department of Health; or
3.26    (3) either commissioner's designated representative.
3.27    (c) "Exchange" means the Minnesota Health Insurance Exchange.
3.28    (d) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996.
3.29    (e) "Individual market health plans," unless otherwise specified, means individual
3.30market health plans defined in section 62A.011.
3.31    (f) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125 of
3.32the Internal Revenue Code that allows employees to pay for health insurance premiums
3.33with pretax dollars.
3.34    Subd. 4. Insurer and health plan participation. All health plans as defined in
3.35section 62A.011, subdivision 3, issued or renewed in the individual market shall participate
4.1in the exchange. No health plans in the individual market may be issued or renewed
4.2outside of the exchange. Group health plans as defined in section 62A.10 shall not be
4.3offered through the exchange. Health plans offered through the Minnesota Comprehensive
4.4Health Association as defined in section 62E.10 are offered through the exchange to
4.5eligible enrollees as determined by the Minnesota Comprehensive Health Association.
4.6Health plans offered through MinnesotaCare under chapter 256L are offered through the
4.7exchange to eligible enrollees as determined by the commissioner of human services.
4.8    Subd. 5. Approval of health plans. No health plan may be offered through the
4.9exchange unless the commissioner has first certified that:
4.10    (1) the insurer seeking to offer the health plan is licensed to issue health insurance in
4.11the state; and
4.12    (2) the health plan meets the requirements of this section, and the health plan and the
4.13insurer are in compliance with all other applicable health insurance laws.
4.14    Subd. 6. Individual market health plans. Individual market health plans offered
4.15through the exchange continue to be regulated by the commissioner as specified in
4.16chapters 62A, 62C, 62D, 62E, 62Q, and 72A, and must include the following provisions
4.17that apply to all health plans issued or renewed through the exchange:
4.18    (1) premiums for children under the age of 19 shall not vary by age in the exchange;
4.19and
4.20    (2) premiums for children under the age of 19 must be excluded from rating factors
4.21under section 62A.65, subdivision 3, paragraph (b).
4.22    Subd. 7. Individual participation and eligibility. Individuals are eligible to
4.23purchase health plans directly through the exchange or through an employer Section
4.24125 Plan under section 62A.68. Nothing in this section requires guaranteed issue of
4.25individual market health plans offered through the exchange. Individuals are eligible to
4.26purchase individual market health plans through the exchange by meeting one or more
4.27of the following qualifications:
4.28    (1) the individual is a Minnesota resident, meaning the individual is physically
4.29residing on a permanent basis in a place that is the person's principal residence and from
4.30which the person is absent only for temporary purposes;
4.31    (2) the individual is a student attending an institution outside of Minnesota and
4.32maintains Minnesota residency;
4.33    (3) the individual is not a Minnesota resident but is employed by an employer
4.34physically located within the state and the individual's employer is required to offer a
4.35Section 125 Plan under section 62A.68;
5.1    (4) the individual is not a Minnesota resident but is self-employed and the
5.2individual's principal place of business is in the state; or
5.3    (5) the individual is a dependent as defined in section 62L.02, of another individual
5.4who is eligible to participate in the exchange.
5.5    Subd. 8. Continuation of coverage. Enrollment in a health plan may be canceled
5.6for nonpayment of premiums, fraud, or changes in eligibility for MinnesotaCare under
5.7chapter 256L. Enrollment in an individual market health plan may not be canceled or
5.8nonrenewed because of any change in employer or employment status, marital status,
5.9health status, age, residence, or any other change that does not affect eligibility as defined
5.10in this section.
5.11    Subd. 9. Responsibilities of the exchange. The exchange shall serve as the sole
5.12entity for enrollment and collection and transfer of premium payments for health plans
5.13sold to individuals through the exchange. The exchange shall be responsible for the
5.14following functions:
5.15    (1) publicize the exchange, including but not limited to its functions, eligibility
5.16rules, and enrollment procedures;
5.17    (2) provide assistance to employers to establish Section 125 Plans under section
5.1862A.68;
5.19    (3) provide education and assistance to employers to help them understand the
5.20requirements of Section 125 Plans and compliance with applicable regulations;
5.21    (4) create a system to allow individuals to compare and enroll in health plans offered
5.22through the exchange;
5.23    (5) create a system to collect and transmit to the applicable plans all premium
5.24payments made by individuals, including developing mechanisms to receive and process
5.25automatic payroll deductions for individuals who purchase coverage through employer
5.26Section 125 Plans;
5.27    (6) refer individuals interested in MinnesotaCare under chapter 256L to the
5.28Department of Human Services to determine eligibility;
5.29    (7) establish a mechanism with the Department of Human Services to transfer
5.30premiums and subsidies for MinnesotaCare to qualify for federal matching payments;
5.31    (8) upon request, issue certificates of previous coverage according to the provisions
5.32of HIPAA and as referenced in section 62Q.181 to all such individuals who cease to be
5.33covered by a participating health plan through the exchange;
5.34    (9) establish procedures to account for all funds received and disbursed by the
5.35exchange for individual participants of the exchange; and
6.1    (10) make available to the public, at the end of each calendar year, a report of an
6.2independent audit of the exchange's accounts. The exchange shall not accept premium
6.3payments for individual market health plans from an employer Section 125 Plan if the
6.4employer offers a group health plan as defined in section 62A.10 or if the employer is a
6.5self-insurer as defined in section 62E.02.
6.6    Subd. 10. Powers of the exchange. The exchange shall have the power to:
6.7    (1) contract with insurance producers licensed in accident and health insurance
6.8under chapter 60K and vendors to perform one or more of the functions specified in
6.9subdivision 10;
6.10    (2) contract with employers to collect premiums through a Section 125 Plan for
6.11eligible individuals who purchase an individual market health plan through the exchange;
6.12    (3) establish and assess fees on health plan premiums of health plans purchased
6.13through the exchange to fund the cost of administering the exchange;
6.14    (4) seek and directly receive grant funding from government agencies or private
6.15philanthropic organizations to defray the costs of operating the exchange;
6.16    (5) establish and administer rules and procedures governing the operations of the
6.17exchange;
6.18    (6) establish one or more service centers within Minnesota;
6.19    (7) sue or be sued or otherwise take any necessary or proper legal action;
6.20    (8) establish bank accounts and borrow money; and
6.21    (9) enter into agreements with the commissioners of commerce, health, human
6.22services, revenue, employment and economic development, and other state agencies as
6.23necessary for the exchange to implement the provisions of this section.
6.24    Subd. 11. Dispute resolution. The exchange shall establish procedures for
6.25resolving disputes with respect to the eligibility of an individual to participate in the
6.26exchange. The exchange does not have the authority or responsibility to intervene in or
6.27resolve disputes between an individual and a health plan or health insurer. The exchange
6.28shall refer complaints from individuals participating in the exchange to the commissioner
6.29to be resolved according to sections 62Q.68 to 62Q.73.
6.30    Subd. 12. Governance. The exchange shall be governed by a board of directors
6.31with 11 members. The board shall convene on or before July 1, 2007, after the initial board
6.32members have been selected. The initial board membership consists of the following:
6.33    (1) the commissioner of commerce;
6.34    (2) the commissioner of human services;
6.35    (3) the commissioner of health;
7.1    (4) four members appointed by a joint committee of the Minnesota senate and the
7.2Minnesota house of representatives to serve three-year terms; and
7.3    (5) four members appointed by the governor to serve three-year terms.
7.4    Subd. 13. Subsequent board membership. Ongoing membership of the exchange
7.5consists of the following effective July 1, 2010:
7.6    (1) the commissioner of commerce;
7.7    (2) the commissioner of human services;
7.8    (3) the commissioner of health;
7.9    (4) four members appointed by the governor with the approval of a joint committee
7.10of the senate and house of representatives to serve two- or three-year terms. Appointed
7.11members may serve more than one term; and
7.12    (5) four members elected by the membership of the exchange of which two are
7.13elected to serve a two-year term and two are elected to serve a three-year term. Elected
7.14members may serve more than one term.
7.15    Subd. 14. Operations of the board. Officers of the board of directors are elected by
7.16members of the board and serve one-year terms. Six members of the board constitutes a
7.17quorum, and the affirmative vote of six members of the board is necessary and sufficient
7.18for any action taken by the board. Board members serve without pay, but are reimbursed
7.19for actual expenses incurred in the performance of their duties.
7.20    Subd. 15. Operations of the exchange. The board of directors shall appoint an
7.21exchange director who shall:
7.22    (1) be a full-time employee of the exchange;
7.23    (2) administer all of the activities and contracts of the exchange; and
7.24    (3) hire and supervise the staff of the exchange.
7.25    Subd. 16. Insurance producers. When a producer licensed in accident and health
7.26insurance under chapter 60K enrolls an eligible individual in the exchange, the health plan
7.27chosen by an individual may pay the producer a commission.
7.28    Subd. 17. Implementation. Health plan coverage through the exchange begins on
7.29January 1, 2009. The exchange must be operational to assist employers and individuals
7.30by September 1, 2008, and be prepared for enrollment by December 1, 2008. Enrollees
7.31of individual market health plans, MinnesotaCare, and the Minnesota Comprehensive
7.32Health Association as of December 2, 2008, are automatically enrolled in the exchange
7.33on January 1, 2009, in the same health plan and at the same premium that they were
7.34enrolled as of December 2, 2008, subject to the provisions of this section. As of January 1,
8.12009, all enrollees of individual market health plans, MinnesotaCare, and the Minnesota
8.2Comprehensive Health Association shall make premium payments to the exchange.

8.3    Sec. 3. [62A.68] SECTION 125 PLANS.
8.4    Subdivision 1. Definitions. The following terms have the meanings given unless
8.5otherwise provided in text:
8.6    (a) "Current employee" means an employee currently on an employer's payroll other
8.7than a retiree or disabled former employee.
8.8    (b) "Employer" means a person, firm, corporation, partnership, association, business
8.9trust, or other entity employing one or more persons, including a political subdivision of
8.10the state, filing payroll tax information on such employed person or persons.
8.11    (c) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125
8.12of the Internal Revenue Code that allows employees to purchase health insurance with
8.13pretax dollars.
8.14    (d) "Exchange" means the Minnesota Health Insurance Exchange under section
8.1562A.67.
8.16    (e) "Exchange director" means the appointed director under section 62A.67,
8.17subdivision 16.
8.18    Subd. 2. Section 125 Plan requirement. (a) Effective January 1, 2009, all
8.19employers with 11 or more current employees shall establish a Section 125 Plan to allow
8.20their employees to purchase individual market health plan coverage with pretax dollars.
8.21The following employers are exempt from the Section 125 Plan requirement:
8.22    (1) employers that offer a group health insurance plan as defined in 62A.10;
8.23    (2) employers that are self-insurers as defined in section 62E.02; and
8.24    (3) employers with fewer than 11 current employees, except that employers under
8.25this clause may voluntarily offer a Section 125 Plan.
8.26    (b) Employers that offer a Section 125 Plan may enter into an agreement with the
8.27exchange to administer the employer's Section 125 Plan.
8.28    Subd. 3. Tracking compliance. By July 1, 2008, the exchange, in consultation with
8.29the commissioners of commerce, health, employment and economic development, and
8.30revenue shall establish a method for tracking employer compliance with the Section 125
8.31Plan requirement.
8.32    Subd. 4. Employer requirements. Employers that are required to offer or choose
8.33to offer a Section 125 Plan shall:
8.34    (1) allow employees to purchase an individual market health plan for themselves
8.35and their dependents through the exchange;
9.1    (2) upon an employee's request, deduct premium amounts on a pretax basis in an
9.2amount not to exceed an employee's wages, and remit these employee payments to the
9.3exchange; and
9.4    (3) provide notice to employees that individual market health plans purchased
9.5through the exchange are not employer-sponsored.
9.6    Subd. 5. Section 125 eligible health plans. Individuals who are eligible to use
9.7an employer Section 125 Plan to pay for health insurance coverage purchased through
9.8the exchange may enroll in any health plan offered through the exchange for which the
9.9individual is eligible including individual market health plans, MinnesotaCare, and the
9.10Minnesota Comprehensive Health Association.

9.11    Sec. 4. Minnesota Statutes 2006, section 62E.141, is amended to read:
9.1262E.141 INCLUSION IN EMPLOYER-SPONSORED PLAN.
9.13    No employee of an employer that offers a group health plan, under which the
9.14employee is eligible for coverage, is eligible to enroll, or continue to be enrolled, in
9.15the comprehensive health association, except for enrollment or continued enrollment
9.16necessary to cover conditions that are subject to an unexpired preexisting condition
9.17limitation, preexisting condition exclusion, or exclusionary rider under the employer's
9.18health plan. This section does not apply to persons enrolled in the Comprehensive Health
9.19Association as of June 30, 1993. With respect to persons eligible to enroll in the health
9.20plan of an employer that has more than 29 current employees, as defined in section
9.2162L.02 , this section does not apply to persons enrolled in the Comprehensive Health
9.22Association as of December 31, 1994.

9.23    Sec. 5. Minnesota Statutes 2006, section 62J.04, subdivision 3, is amended to read:
9.24    Subd. 3. Cost containment duties. The commissioner shall:
9.25    (1) establish statewide and regional cost containment goals for total health care
9.26spending under this section and, collect data as described in sections 62J.38 to 62J.41 to
9.27monitor statewide achievement of the cost containment goals, and annually report to the
9.28legislature on whether the goals were achieved and, if not, what action should be taken to
9.29ensure that goals are achieved in the future;
9.30    (2) divide the state into no fewer than four regions, with one of those regions being
9.31the Minneapolis/St. Paul metropolitan statistical area but excluding Chisago, Isanti,
9.32Wright, and Sherburne Counties, for purposes of fostering the development of regional
9.33health planning and coordination of health care delivery among regional health care
9.34systems and working to achieve the cost containment goals;
10.1    (3) monitor the quality of health care throughout the state and take action as
10.2necessary to ensure an appropriate level of quality;
10.3    (4) issue recommendations regarding uniform billing forms, uniform electronic
10.4billing procedures and data interchanges, patient identification cards, and other uniform
10.5claims and administrative procedures for health care providers and private and public
10.6sector payers. In developing the recommendations, the commissioner shall review the
10.7work of the work group on electronic data interchange (WEDI) and the American National
10.8Standards Institute (ANSI) at the national level, and the work being done at the state and
10.9local level. The commissioner may adopt rules requiring the use of the Uniform Bill
10.1082/92 form, the National Council of Prescription Drug Providers (NCPDP) 3.2 electronic
10.11version, the Centers for Medicare and Medicaid Services 1500 form, or other standardized
10.12forms or procedures;
10.13    (5) undertake health planning responsibilities;
10.14    (6) authorize, fund, or promote research and experimentation on new technologies
10.15and health care procedures;
10.16    (7) within the limits of appropriations for these purposes, administer or contract for
10.17statewide consumer education and wellness programs that will improve the health of
10.18Minnesotans and increase individual responsibility relating to personal health and the
10.19delivery of health care services, undertake prevention programs including initiatives to
10.20improve birth outcomes, expand childhood immunization efforts, and provide start-up
10.21grants for worksite wellness programs;
10.22    (8) undertake other activities to monitor and oversee the delivery of health care
10.23services in Minnesota with the goal of improving affordability, quality, and accessibility of
10.24health care for all Minnesotans; and
10.25    (9) make the cost containment goal data available to the public in a
10.26consumer-oriented manner.
10.27EFFECTIVE DATE.This section is effective July 1, 2007.

10.28    Sec. 6. Minnesota Statutes 2006, section 62J.495, is amended to read:
10.2962J.495 HEALTH INFORMATION TECHNOLOGY AND
10.30INFRASTRUCTURE ADVISORY COMMITTEE.
10.31    Subdivision 1. Establishment; members; duties Implementation. By January
10.321, 2012, all hospitals and health care providers must have in place an interoperable
10.33electronic health records system within their hospital system or clinical practice setting.
10.34The commissioner of health, in consultation with the Health Information Technology and
10.35Infrastructure Advisory Committee, shall develop a statewide plan to meet this goal,
11.1including uniform standards to be used for the interoperable system for sharing and
11.2synchronizing patient data across systems. The standards must be compatible with federal
11.3efforts. The uniform standards must be developed by January 1, 2009, with a status report
11.4on the development of these standards submitted to the legislature by January 15, 2008.
11.5    Subd. 2. Health Information Technology and Infrastructure Advisory
11.6Committee. (a) The commissioner shall establish a Health Information Technology
11.7and Infrastructure Advisory Committee governed by section 15.059 to advise the
11.8commissioner on the following matters:
11.9    (1) assessment of the use of health information technology by the state, licensed
11.10health care providers and facilities, and local public health agencies;
11.11    (2) recommendations for implementing a statewide interoperable health information
11.12infrastructure, to include estimates of necessary resources, and for determining standards
11.13for administrative data exchange, clinical support programs, patient privacy requirements,
11.14and maintenance of the security and confidentiality of individual patient data; and
11.15    (3) other related issues as requested by the commissioner.
11.16    (b) The members of the Health Information Technology and Infrastructure Advisory
11.17Committee shall include the commissioners, or commissioners' designees, of health,
11.18human services, administration, and commerce and additional members to be appointed
11.19by the commissioner to include persons representing Minnesota's local public health
11.20agencies, licensed hospitals and other licensed facilities and providers, private purchasers,
11.21the medical and nursing professions, health insurers and health plans, the state quality
11.22improvement organization, academic and research institutions, consumer advisory
11.23organizations with an interest and expertise in health information technology, and other
11.24stakeholders as identified by the Health Information Technology and Infrastructure
11.25Advisory Committee.
11.26    Subd. 2. Annual report. (c) The commissioner shall prepare and issue an annual
11.27report not later than January 30 of each year outlining progress to date in implementing a
11.28statewide health information infrastructure and recommending future projects.
11.29    Subd. 3. Expiration. (d) Notwithstanding section 15.059, this section subdivision
11.30expires June 30, 2009 2012.

11.31    Sec. 7. [62J.496] ELECTRONIC HEALTH RECORD SYSTEM REVOLVING
11.32ACCOUNT AND LOAN PROGRAM.
11.33    Subdivision 1. Account establishment. The commissioner of finance shall
11.34establish and implement a revolving account in the state government special revenue
11.35fund to provide loans to physicians or physician group practices to assist in financing the
11.36installation or support of an interoperable health record system. The system must provide
12.1for the interoperable exchange of health care information between the applicant and, at a
12.2minimum, a hospital system, pharmacy, and a health care clinic or other physician group.
12.3    Subd. 2. Eligibility. To be eligible for a loan under this section, the applicant
12.4must submit a loan application to the commissioner of health on forms prescribed by the
12.5commissioner. The application must include, at a minimum:
12.6    (1) the amount of the loan requested and a description of the purpose or project
12.7for which the loan proceeds will be used;
12.8    (2) a signed contract with a vendor;
12.9    (3) a description of the health care entities and other groups participating in the
12.10project;
12.11    (4) evidence of financial stability and a demonstrated ability to repay the loan; and
12.12    (5) a description of how the system to be financed interconnects or plans in the
12.13future to interconnect with other health care entities and provider groups located in the
12.14same geographical area.
12.15    Subd. 3. Loans. (a) The commissioner of health may make a no interest loan
12.16to a provider or provider group who is eligible under subdivision 2 on a first-come,
12.17first-served basis provided that the applicant is able to comply with this section. The total
12.18accumulative loan principal must not exceed $....... per loan. The commissioner of health
12.19has discretion over the size and number of loans made.
12.20    (b) The commissioner of health may prescribe forms and establish an application
12.21process and, notwithstanding section 16A.1283, may impose a reasonable nonrefundable
12.22application fee to cover the cost of administering the loan program.
12.23    (c) The borrower must begin repaying the principal no later than two years from the
12.24date of the loan. Loans must be amortized no later than 15 years from the date of the loan.
12.25    (d) Repayments must be credited to the account.

12.26    Sec. 8. [62J.536] UNIFORM ELECTRONIC TRANSACTIONS AND
12.27IMPLEMENTATION GUIDE STANDARDS.
12.28    Subdivision 1. Electronic claims and eligibility transactions required. (a)
12.29Beginning January 15, 2009, all group purchasers must accept from health care providers
12.30the eligibility for a health plan transaction described under Code of Federal Regulations,
12.31title 45, part 162, subpart L. Beginning July 15, 2009, all group purchasers must accept
12.32from health care providers the health care claims or equivalent encounter information
12.33transaction described under Code of Federal Regulations, title 45, part 162, subpart K.
12.34    (b) Beginning January 15, 2009, all group purchasers must transmit to providers the
12.35eligibility for a health plan transaction described under Code of Federal Regulations, title
13.145, part 162, subpart L. Beginning December 1, 2009, all group purchasers must transmit
13.2to providers the health care payment and remittance advice transaction described under
13.3Code of Federal Regulations, title 45, part 162, subpart P.
13.4    (c) Beginning January 15, 2009, all health care providers must submit to group
13.5purchasers the eligibility for a health plan transaction described under Code of Federal
13.6Regulations, title 45, part 162, subpart L. Beginning July 15, 2009, all health care
13.7providers must submit to group purchasers the health care claims or equivalent encounter
13.8information transaction described under Code of Federal Regulations, title 45, part 162,
13.9subpart K.
13.10    (d) Beginning January 15, 2009, all health care providers must accept from group
13.11purchasers the eligibility for a health plan transaction described under Code of Federal
13.12Regulations, title 45, part 162, subpart L. Beginning December 15, 2009, all health care
13.13providers must accept from group purchasers the health care payment and remittance
13.14advice transaction described under Code of Federal Regulations, title 45, part 162, subpart
13.15P.
13.16    (e) Each of the transactions described in paragraphs (a) to (d) shall require the use
13.17of a single, uniform companion guide to the implementation guides described under
13.18Code of Federal Regulations, title 45, part 162. The companion guides will be developed
13.19pursuant to subdivision 2.
13.20    (f) Notwithstanding any other provisions in sections 62J.50 to 62J.61, all group
13.21purchasers and health care providers must exchange claims and eligibility information
13.22electronically using the transactions, companion guides, implementation guides, and
13.23timelines required under this subdivision. Group purchasers may not impose any fee on
13.24providers for the use of the transactions prescribed in this subdivision.
13.25    (g) Nothing in this subdivision shall prohibit group purchasers and health care
13.26providers from using a direct data entry, Web-based methodology for complying with
13.27the requirements of this subdivision. Any direct data entry method for conducting
13.28the transactions specified in this subdivision must be consistent with the data content
13.29component of the single, uniform companion guides required in paragraph (e) and the
13.30implementation guides described under Code of Federal Regulations, title 45, part 162.
13.31    Subd. 2. Establishing uniform, standard companion guides. (a) At least 12
13.32months prior to the timelines required in subdivision 1, the commissioner of health shall
13.33promulgate rules pursuant to section 62J.61 establishing and requiring group purchasers
13.34and health care providers to use the transactions and the uniform, standard companion
13.35guides required under subdivision 1, paragraph (e).
14.1    (b) The commissioner of health must consult with the Minnesota Administrative
14.2Uniformity Committee on the development of the single, uniform companion guides
14.3required under subdivision 1, paragraph (e), for each of the transactions in subdivision 1.
14.4The single uniform companion guides required under subdivision 1, paragraph (e), must
14.5specify uniform billing and coding standards. The commissioner of health shall base the
14.6companion guides required under subdivision 1, paragraph (e), billing and coding rules,
14.7and standards on the Medicare program, with modifications that the commissioner deems
14.8appropriate after consulting the Minnesota Administrative Uniformity Committee.
14.9    (c) No group purchaser or health care provider may add to or modify the single,
14.10uniform companion guides defined in subdivision 1, paragraph (e), through additional
14.11companion guides or other requirements.
14.12    (d) In promulgating the rules in paragraph (a), the commissioner shall not require
14.13data content that is not essential to accomplish the purpose of the transactions in
14.14subdivision 1.

14.15    Sec. 9. Minnesota Statutes 2006, section 62J.692, subdivision 4, is amended to read:
14.16    Subd. 4. Distribution of funds. (a) The commissioner shall annually distribute
14.1790 percent of available medical education funds to all qualifying applicants based on a
14.18distribution formula that reflects a summation of two factors:
14.19    (1) an education factor, which is determined by the total number of eligible trainee
14.20FTEs and the total statewide average costs per trainee, by type of trainee, in each clinical
14.21medical education program; and
14.22    (2) a public program volume factor, which is determined by the total volume of
14.23public program revenue received charges submitted by each training site as a percentage of
14.24all public program revenue received charges submitted by all training sites in the fund pool.
14.25    In this formula, the education factor is weighted at 67 percent and the public program
14.26volume factor is weighted at 33 percent.
14.27    Public program revenue charges for the distribution formula includes revenue from
14.28include charges for medical assistance, prepaid medical assistance, general assistance
14.29medical care, and prepaid general assistance medical care submitted for payment to this
14.30state and to contiguous states. Training sites that receive have no public program revenue
14.31charges are ineligible for funds available under this paragraph. Total statewide average
14.32costs per trainee for medical residents is based on audited clinical training costs per trainee
14.33in primary care clinical medical education programs for medical residents. Total statewide
14.34average costs per trainee for dental residents is based on audited clinical training costs
14.35per trainee in clinical medical education programs for dental students. Total statewide
15.1average costs per trainee for pharmacy residents is based on audited clinical training costs
15.2per trainee in clinical medical education programs for pharmacy students.
15.3    (b) The commissioner shall annually distribute ten percent of total available medical
15.4education funds to all qualifying applicants based on the percentage received by each
15.5applicant under paragraph (a). These funds are to be used to offset clinical education
15.6costs at eligible clinical training sites based on criteria developed by the clinical medical
15.7education program. Applicants may choose to distribute funds allocated under this
15.8paragraph based on the distribution formula described in paragraph (a).
15.9    (c) Funds distributed shall not be used to displace current funding appropriations
15.10from federal or state sources.
15.11    (d) Funds shall be distributed to the sponsoring institutions indicating the amount
15.12to be distributed to each of the sponsor's clinical medical education programs based on
15.13the criteria in this subdivision and in accordance with the commissioner's approval letter.
15.14Each clinical medical education program must distribute funds allocated under paragraph
15.15(a) to the training sites as specified in the commissioner's approval letter. Sponsoring
15.16institutions, which are accredited through an organization recognized by the Department
15.17of Education or the Centers for Medicare and Medicaid Services, may contract directly
15.18with training sites to provide clinical training. To ensure the quality of clinical training,
15.19those accredited sponsoring institutions must:
15.20    (1) develop contracts specifying the terms, expectations, and outcomes of the clinical
15.21training conducted at sites; and
15.22    (2) take necessary action if the contract requirements are not met. Action may
15.23include the withholding of payments under this section or the removal of students from
15.24the site.
15.25    (e) Any funds not distributed in accordance with the commissioner's approval letter
15.26must be returned to the medical education and research fund within 30 days of receiving
15.27notice from the commissioner. The commissioner shall distribute returned funds to the
15.28appropriate training sites in accordance with the commissioner's approval letter.
15.29    (f) The commissioner shall distribute by June 30 of each year an amount equal to
15.30the funds transferred under subdivision 10, plus five percent interest to the University of
15.31Minnesota Board of Regents for the instructional costs of health professional programs
15.32at the Academic Health Center and for interdisciplinary academic initiatives within the
15.33Academic Health Center.
15.34    (g) A maximum of $150,000 of the funds dedicated to the commissioner under
15.35section 297F.10, subdivision 1, paragraph (b), clause (2), may be used by the commissioner
15.36for administrative expenses associated with implementing this section.

16.1    Sec. 10. Minnesota Statutes 2006, section 62J.81, subdivision 1, is amended to read:
16.2    Subdivision 1. Required disclosure of estimated payment. (a) A health care
16.3provider, as defined in section 62J.03, subdivision 8, or the provider's designee as agreed
16.4to by that designee, shall, at the request of a consumer, provide that consumer with a good
16.5faith estimate of the reimbursement allowable payment the provider expects to receive
16.6from the health plan company in which the consumer is enrolled has agreed to accept from
16.7the consumer's health plan company for the services specified by the consumer, specifying
16.8the amount of the allowable payment due from the health plan company. Health plan
16.9companies must allow contracted providers, or their designee, to release this information.
16.10A good faith estimate must also be made available at the request of a consumer who
16.11is not enrolled in a health plan company. If a consumer has no applicable public or
16.12private coverage, the health care provider must give the consumer a good faith estimate
16.13of the average allowable reimbursement the provider accepts as payment from private
16.14third-party payers for the services specified by the consumer and the estimated amount
16.15the noncovered consumer will be required to pay. Payment information provided by a
16.16provider, or by the provider's designee as agreed to by that designee, to a patient pursuant
16.17to this subdivision does not constitute a legally binding estimate of the allowable charge
16.18for or cost to the consumer of services.
16.19    (b) A health plan company, as defined in section 62J.03, subdivision 10, shall, at
16.20the request of an enrollee or the enrollee's designee, provide that enrollee with a good
16.21faith estimate of the reimbursement allowable amount the health plan company would
16.22expect to pay to has contracted for with a specified provider within the network as total
16.23payment for a health care service specified by the enrollee and the portion of the allowable
16.24amount due from the enrollee and the enrollee's out-of-pocket costs. If requested by the
16.25enrollee, the health plan company shall also provide to the enrollee a good faith estimate
16.26of the enrollee's out-of-pocket cost for the health care service. An estimate provided to
16.27an enrollee under this paragraph is not a legally binding estimate of the reimbursement
16.28allowable amount or enrollee's out-of-pocket cost.
16.29EFFECTIVE DATE.This section is effective August 1, 2007.

16.30    Sec. 11. Minnesota Statutes 2006, section 62J.82, is amended to read:
16.3162J.82 HOSPITAL CHARGE INFORMATION REPORTING DISCLOSURE.
16.32    Subdivision 1. Required information. The Minnesota Hospital Association shall
16.33develop a Web-based system, available to the public free of charge, for reporting charge
16.34information the following, for Minnesota residents,:
17.1    (1) hospital-specific performance on the measures of care developed under section
17.2256B.072 for acute myocardial infarction, heart failure, and pneumonia;
17.3    (2) by January 1, 2009, hospital-specific performance on the public reporting
17.4measures for hospital-acquired infections as published by the National Quality Forum
17.5and collected by the Minnesota Hospital Association and Stratis Health in collaboration
17.6with infection control practitioners; and
17.7    (3) charge information, including, but not limited to, number of discharges, average
17.8length of stay, average charge, average charge per day, and median charge, for each of the
17.950 most common inpatient diagnosis-related groups and the 25 most common outpatient
17.10surgical procedures as specified by the Minnesota Hospital Association.
17.11    Subd. 2. Web site. The Web site must provide information that compares
17.12hospital-specific data to hospital statewide data. The Web site must be established by
17.13October 1, 2006, and must be updated annually. The commissioner shall provide a link to
17.14this reporting information on the department's Web site.
17.15    Subd. 3. Enforcement. The commissioner shall provide a link to this information
17.16on the department's Web site. If a hospital does not provide this information to the
17.17Minnesota Hospital Association, the commissioner of health may require the hospital to
17.18do so in accordance with section 144.55, subdivision 6. The commissioner shall provide a
17.19link to this information on the department's Web site.

17.20    Sec. 12. [62J.84] HEALTH CARE TRANSFORMATION TASK FORCE.
17.21    Subdivision 1. Task force. The governor shall convene a health care transformation
17.22task force to advise and assist the governor and the Minnesota legislature. The task force
17.23shall consist of:
17.24    (1) four legislators from the house of representatives, two appointed by the speaker
17.25of the house of representatives and two by the minority leader, and four legislators from
17.26the senate, two appointed by the majority leader and two by the minority leader;
17.27    (2) four representatives of the governor and state agencies appointed by the governor;
17.28    (3) at least four persons appointed by the governor who have demonstrated
17.29leadership in health care organizations, health improvement initiatives, health care trade or
17.30professional associations, or other collaborative health system improvement activities; and
17.31    (4) at least two persons appointed by the governor who have demonstrated leadership
17.32in employer and group purchaser activities related to health system improvement, at least
17.33one of which must be from a labor organization.
17.34    Subd. 2. Public input. The commissioner of health shall review available research,
17.35and conduct statewide, regional, and local surveys, focus groups, and other activities as
18.1needed to fill gaps in existing research, to determine Minnesotans' values, preferences,
18.2opinions, and perceptions related to health care and to the issues confronting the task
18.3force, and shall report the findings to the task force.
18.4    Subd. 3. Inventory and assessment of existing activities; action plan. The task
18.5force shall complete an inventory and assessment of all public and private organized
18.6activities, coalitions, and collaboratives working on tasks relating to health system
18.7improvement including, but not limited to, patient safety, quality measurement and
18.8reporting, evidence-based practice, adoption of health information technology, disease
18.9management and chronic care coordination, medical homes, access to health care,
18.10cultural competence, prevention and public health, consumer incentives, price and cost
18.11transparency, nonprofit organization community benefits, education, research, and health
18.12care workforce.
18.13    Subd. 4. Action plan. By December 15, 2007, the governor, with the advice
18.14and assistance of the task force, shall develop and present to the legislature a statewide
18.15action plan for transforming the health care system to improve affordability, quality,
18.16and access. The plan shall include draft legislation needed to implement the plan. The
18.17plan may consist of legislative actions, administrative actions of governmental entities,
18.18collaborative actions, and actions of individuals and individual organizations. Among
18.19other things, the action plan must include the following, with specific and measurable
18.20goals and deadlines for each:
18.21    (1) proposed actions that will slow the rate of increase in health care costs to a rate
18.22that does not exceed the increase in the Consumer Price Index for urban consumers for the
18.23preceding calendar year plus two percentage points, plus an additional percentage based
18.24on the added costs necessary to implement legislation enacted in 2007;
18.25    (2) actions that will increase the affordable health coverage options for uninsured
18.26and underinsured Minnesotans and other strategies that will ensure that all Minnesotans
18.27will have health coverage by January 2010;
18.28    (3) actions to improve the quality and safety of health care and reduce racial and
18.29ethnic disparities in access and quality;
18.30    (4) actions that will reduce the rate of preventable chronic illness through prevention
18.31and public health and wellness initiatives; and
18.32    (5) proposed changes to state health care purchasing and payment strategies used for
18.33state health care programs and state employees that will promote higher quality, lower
18.34cost health care through incentives that reward prevention and early intervention, use
18.35of cost-effective primary care, effective care coordination, and management of chronic
18.36disease;
19.1    (6) actions that will promote the appropriate and cost-effective investment in new
19.2facilities, technologies, and drugs;
19.3    (7) actions to reduce administrative costs; and
19.4    (8) the results of the inventory completed under subdivision 3 and recommendations
19.5for how these activities can be coordinated and improved.
19.6    Subd. 5. Options for small employers. The task force shall study and report back
19.7to the legislature by December 15, 2008, on options for serving small employers and their
19.8employees, and self-employed individuals.

19.9    Sec. 13. Minnesota Statutes 2006, section 62L.02, subdivision 11, is amended to read:
19.10    Subd. 11. Dependent. "Dependent" means an eligible employee's spouse,
19.11unmarried child who is under the age of 19 years, unmarried child under the age of 25
19.12years who is a full-time student as defined in section 62A.301 regardless of whether
19.13the dependent child is enrolled in an educational institution, dependent child of any age
19.14who is disabled and who meets the eligibility criteria in section 62A.14, subdivision 2,
19.15or any other person whom state or federal law requires to be treated as a dependent for
19.16purposes of health plans. For the purpose of this definition, a child includes a child for
19.17whom the employee or the employee's spouse has been appointed legal guardian and an
19.18adoptive child as provided in section 62A.27.
19.19EFFECTIVE DATE.This section is effective January 1, 2008.

19.20    Sec. 14. Minnesota Statutes 2006, section 62L.12, subdivision 2, is amended to read:
19.21    Subd. 2. Exceptions. (a) A health carrier may sell, issue, or renew individual
19.22conversion policies to eligible employees otherwise eligible for conversion coverage under
19.23section 62D.104 as a result of leaving a health maintenance organization's service area.
19.24    (b) A health carrier may sell, issue, or renew individual conversion policies to
19.25eligible employees otherwise eligible for conversion coverage as a result of the expiration
19.26of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21,
19.2762C.142 , 62D.101, and 62D.105.
19.28    (c) A health carrier may sell, issue, or renew conversion policies under section
19.2962E.16 to eligible employees.
19.30    (d) A health carrier may sell, issue, or renew individual continuation policies to
19.31eligible employees as required.
19.32    (e) A health carrier may sell, issue, or renew individual health plans if the coverage
19.33is appropriate due to an unexpired preexisting condition limitation or exclusion applicable
19.34to the person under the employer's group health plan or due to the person's need for health
19.35care services not covered under the employer's group health plan.
20.1    (f) A health carrier may sell, issue, or renew an individual health plan, if the
20.2individual has elected to buy the individual health plan not as part of a general plan to
20.3substitute individual health plans for a group health plan nor as a result of any violation of
20.4subdivision 3 or 4.
20.5    (g) Nothing in this subdivision relieves a health carrier of any obligation to provide
20.6continuation or conversion coverage otherwise required under federal or state law.
20.7    (h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage
20.8issued as a supplement to Medicare under sections 62A.3099 to 62A.44, or policies or
20.9contracts that supplement Medicare issued by health maintenance organizations, or those
20.10contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social
20.11Security Act, United States Code, title 42, section 1395 et seq., as amended.
20.12    (i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
20.13health plans necessary to comply with a court order.
20.14    (j) A health carrier may offer, issue, sell, or renew an individual health plan to
20.15persons eligible for an employer group health plan, if the individual health plan is a high
20.16deductible health plan for use in connection with an existing health savings account, in
20.17compliance with the Internal Revenue Code, section 223. In that situation, the same or
20.18a different health carrier may offer, issue, sell, or renew a group health plan to cover
20.19the other eligible employees in the group.
20.20    (k) A health carrier may offer, sell, issue, or renew an individual health plan to one
20.21or more employees of a small employer if the individual health plan is marketed directly to
20.22all employees of the small employer and the small employer does not contribute directly
20.23or indirectly to the premiums or facilitate the administration of the individual health plan.
20.24The requirement to market an individual health plan to all employees does not require the
20.25health carrier to offer or issue an individual health plan to any employee. For purposes
20.26of this paragraph, an employer is not contributing to the premiums or facilitating the
20.27administration of the individual health plan if the employer does not contribute to the
20.28premium and merely collects the premiums from an employee's wages or salary through
20.29payroll deductions and submits payment for the premiums of one or more employees in a
20.30lump sum to the health carrier. Except for coverage under section 62A.65, subdivision 5,
20.31paragraph (b), or 62E.16, at the request of an employee, the health carrier may bill the
20.32employer for the premiums payable by the employee, provided that the employer is not
20.33liable for payment except from payroll deductions for that purpose. If an employer is
20.34submitting payments under this paragraph, the health carrier shall provide a cancellation
20.35notice directly to the primary insured at least ten days prior to termination of coverage for
20.36nonpayment of premium. Individual coverage under this paragraph may be offered only
21.1if the small employer has not provided coverage under section 62L.03 to the employees
21.2within the past 12 months.
21.3    The employer must provide a written and signed statement to the health carrier that
21.4the employer is not contributing directly or indirectly to the employee's premiums. The
21.5health carrier may rely on the employer's statement and is not required to guarantee-issue
21.6individual health plans to the employer's other current or future employees.
21.7    (l) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
21.8health plans through the Minnesota Health Insurance Exchange under section 62A.67
21.9or 62A.68.

21.10    Sec. 15. Minnesota Statutes 2006, section 62Q.165, subdivision 1, is amended to read:
21.11    Subdivision 1. Definition. It is the commitment of the state to achieve universal
21.12health coverage for all Minnesotans by the year 2010. Universal coverage is achieved
21.13when:
21.14    (1) every Minnesotan has access to a full range of quality health care services;
21.15    (2) every Minnesotan is able to obtain affordable health coverage which pays for the
21.16full range of services, including preventive and primary care; and
21.17    (3) every Minnesotan pays into the health care system according to that person's
21.18ability.
21.19EFFECTIVE DATE.This section is effective July 1, 2007.

21.20    Sec. 16. Minnesota Statutes 2006, section 62Q.165, subdivision 2, is amended to read:
21.21    Subd. 2. Goal. It is the goal of the state to make continuous progress toward
21.22reducing the number of Minnesotans who do not have health coverage so that by January
21.231, 2000, fewer than four percent of the state's population will be without health coverage
21.242010, all Minnesota residents have access to affordable health care. The goal will be
21.25achieved by improving access to private health coverage through insurance reforms and
21.26market reforms, by making health coverage more affordable for low-income Minnesotans
21.27through purchasing pools and state subsidies, and by reducing the cost of health coverage
21.28through cost containment programs and methods of ensuring that all Minnesotans are
21.29paying into the system according to their ability.
21.30EFFECTIVE DATE.This section is effective July 1, 2007.

21.31    Sec. 17. Minnesota Statutes 2006, section 62Q.80, subdivision 3, is amended to read:
21.32    Subd. 3. Approval. (a) Prior to the operation of a community-based health care
21.33coverage program, a community-based health initiative shall submit to the commissioner
21.34of health for approval the community-based health care coverage program developed by
22.1the initiative. The commissioner shall only approve a program that has been awarded
22.2a community access program grant from the United States Department of Health and
22.3Human Services. The commissioner shall ensure that the program meets the federal grant
22.4requirements and any requirements described in this section and is actuarially sound based
22.5on a review of appropriate records and methods utilized by the community-based health
22.6initiative in establishing premium rates for the community-based health care coverage
22.7program.
22.8    (b) Prior to approval, the commissioner shall also ensure that:
22.9    (1) the benefits offered comply with subdivision 8 and that there are adequate
22.10numbers of health care providers participating in the community-based health network to
22.11deliver the benefits offered under the program;
22.12    (2) the activities of the program are limited to activities that are exempt under this
22.13section or otherwise from regulation by the commissioner of commerce;
22.14    (3) the complaint resolution process meets the requirements of subdivision 10; and
22.15    (4) the data privacy policies and procedures comply with state and federal law.

22.16    Sec. 18. Minnesota Statutes 2006, section 62Q.80, subdivision 4, is amended to read:
22.17    Subd. 4. Establishment. (a) The initiative shall establish and operate upon approval
22.18by the commissioner of health a community-based health care coverage program. The
22.19operational structure established by the initiative shall include, but is not limited to:
22.20    (1) establishing a process for enrolling eligible individuals and their dependents;
22.21    (2) collecting and coordinating premiums from enrollees and employers of enrollees;
22.22    (3) providing payment to participating providers;
22.23    (4) establishing a benefit set according to subdivision 8 and establishing premium
22.24rates and cost-sharing requirements;
22.25    (5) creating incentives to encourage primary care and wellness services; and
22.26    (6) initiating disease management services, as appropriate.
22.27    (b) The payments collected under paragraph (a), clause (2), may be used to capture
22.28available federal funds.

22.29    Sec. 19. Minnesota Statutes 2006, section 62Q.80, subdivision 13, is amended to read:
22.30    Subd. 13. Report. (a) The initiative shall submit quarterly status reports to the
22.31commissioner of health on January 15, April 15, July 15, and October 15 of each year,
22.32with the first report due January 15, 2007 2008. The status report shall include:
22.33    (1) the financial status of the program, including the premium rates, cost per member
22.34per month, claims paid out, premiums received, and administrative expenses;
22.35    (2) a description of the health care benefits offered and the services utilized;
23.1    (3) the number of employers participating, the number of employees and dependents
23.2covered under the program, and the number of health care providers participating;
23.3    (4) a description of the health outcomes to be achieved by the program and a status
23.4report on the performance measurements to be used and collected; and
23.5    (5) any other information requested by the commissioner of health or commerce or
23.6the legislature.
23.7    (b) The initiative shall contract with an independent entity to conduct an evaluation
23.8of the program to be submitted to the commissioners of health and commerce and the
23.9legislature by January 15, 2009 2010. The evaluation shall include:
23.10    (1) an analysis of the health outcomes established by the initiative and the
23.11performance measurements to determine whether the outcomes are being achieved;
23.12    (2) an analysis of the financial status of the program, including the claims to
23.13premiums loss ratio and utilization and cost experience;
23.14    (3) the demographics of the enrollees, including their age, gender, family income,
23.15and the number of dependents;
23.16    (4) the number of employers and employees who have been denied access to the
23.17program and the basis for the denial;
23.18    (5) specific analysis on enrollees who have aggregate medical claims totaling over
23.19$5,000 per year, including data on the enrollee's main diagnosis and whether all the
23.20medical claims were covered by the program;
23.21    (6) number of enrollees referred to state public assistance programs;
23.22    (7) a comparison of employer-subsidized health coverage provided in a comparable
23.23geographic area to the designated community-based geographic area served by the
23.24program, including, to the extent available:
23.25    (i) the difference in the number of employers with 50 or fewer employees offering
23.26employer-subsidized health coverage;
23.27    (ii) the difference in uncompensated care being provided in each area; and
23.28    (iii) a comparison of health care outcomes and measurements established by the
23.29initiative; and
23.30    (8) any other information requested by the commissioner of health or commerce.

23.31    Sec. 20. Minnesota Statutes 2006, section 62Q.80, subdivision 14, is amended to read:
23.32    Subd. 14. Sunset. This section expires December 31, 2011 2012.

23.33    Sec. 21. Minnesota Statutes 2006, section 144.698, subdivision 1, is amended to read:
23.34    Subdivision 1. Yearly reports. (a) Each hospital and each outpatient surgical center,
23.35which has not filed the financial information required by this section with a voluntary,
24.1nonprofit reporting organization pursuant to section 144.702, shall file annually with the
24.2commissioner of health after the close of the fiscal year:
24.3    (1) a balance sheet detailing the assets, liabilities, and net worth of the hospital or
24.4outpatient surgical center;
24.5    (2) a detailed statement of income and expenses;
24.6    (3) a copy of its most recent cost report, if any, filed pursuant to requirements of
24.7Title XVIII of the United States Social Security Act;
24.8    (4) a copy of all changes to articles of incorporation or bylaws;
24.9    (5) information on services provided to benefit the community, including services
24.10provided at no cost or for a reduced fee to patients unable to pay, teaching and research
24.11activities, or other community or charitable activities;
24.12    (6) information required on the revenue and expense report form set in effect on
24.13July 1, 1989, or as amended by the commissioner in rule;
24.14    (7) information on changes in ownership or control; and
24.15    (8) other information required by the commissioner in rule.
24.16    (b) Beginning with hospital fiscal year 2009, each nonprofit hospital shall report on
24.17community benefits under paragraph (a), clause (5). "Community benefit" means the costs
24.18of community care, underpayment for services provided under state health care programs,
24.19research costs, community health services costs, financial and in-kind contributions, costs
24.20of community building activities, costs of community benefit operations, education, and
24.21the cost of operating subsidized services. The cost of bad debts and underpayment for
24.22Medicare services are not included in the calculation of community benefit.

24.23    Sec. 22. Minnesota Statutes 2006, section 144.699, is amended by adding a subdivision
24.24to read:
24.25    Subd. 5. Annual reports on community benefit, community care amounts,
24.26and state program underfunding. (a) For each hospital reporting health care cost
24.27information under section 144.698 or 144.702, the commissioner shall report annually
24.28on the hospital's community benefit, community care, and underpayment for state public
24.29health care programs.
24.30    (b) For purposes of this subdivision, "community benefits" has the definition given
24.31in section 144.698, paragraph (b).
24.32    (c) For purposes of this subdivision, "community care" means the costs for medical
24.33care for which a hospital has determined is charity care, as defined under Minnesota Rules,
24.34part 4650.0115, or for which the hospital determines after billing for the services that there
24.35is a demonstrated inability to pay. Any costs forgiven under a hospital's community care
24.36plan or under section 62J.83 may be counted in the hospital's calculation of community
25.1care. Bad debt expenses and discounted charges available to the uninsured shall not be
25.2included in the calculation of community care. The amount of community care is the value
25.3of costs incurred and not the charges made for services.
25.4    (d) For purposes of this subdivision, underpayment for services provided by state
25.5public health care programs is the difference between hospital costs and public program
25.6payments. The information shall be reported in terms of total dollars and as a percentage
25.7of total operating costs for each hospital.

25.8    Sec. 23. Minnesota Statutes 2006, section 256.01, subdivision 2b, is amended to read:
25.9    Subd. 2b. Performance payments. (a) The commissioner shall develop and
25.10implement a pay-for-performance system to provide performance payments to:
25.11    (1) eligible medical groups and clinics that demonstrate optimum care in serving
25.12individuals with chronic diseases who are enrolled in health care programs administered
25.13by the commissioner under chapters 256B, 256D, and 256L.;
25.14    (2) medical groups that implement effective medical home models of patient care
25.15that improve quality and reduce costs through effective primary and preventive care, care
25.16coordination, and management of chronic conditions; and
25.17    (3) eligible medical groups and clinics that evaluate medical provider usage patterns
25.18and provide feedback to individual medical providers on that provider's practice patterns
25.19relative to peer medical providers.
25.20    (b) The commissioner shall also develop and implement a patient incentive health
25.21program to provide incentives and rewards to patients who are enrolled in health care
25.22programs administered by the commissioner under chapters 256B, 256D, and 256L, and
25.23who have agreed to and meet personal health goals established with their primary care
25.24provider to manage a chronic disease or condition including, but not limited to, diabetes,
25.25high blood pressure, and coronary artery disease.
25.26    (c) The commissioner may receive any federal matching money that is made
25.27available through the medical assistance program for managed care oversight contracted
25.28through vendors including consumer surveys, studies, and external quality reviews as
25.29required by the Federal Balanced Budget Act of 1997, Code of Federal Regulations,
25.30title 42, part 438, subpart E. Any federal money received for managed care oversight is
25.31appropriated to the commissioner for this purpose. The commissioner may expend the
25.32federal money received in either year of the biennium.
25.33EFFECTIVE DATE.This section is effective July 1, 2007.

25.34    Sec. 24. Minnesota Statutes 2006, section 256B.0625, is amended by adding a
25.35subdivision to read:
26.1    Subd. 49. Provider-directed care coordination services. The commissioner
26.2shall develop and implement a provider-directed care coordination program for medical
26.3assistance recipients who are not enrolled in the prepaid medical assistance program and
26.4who are receiving services on a fee-for-service basis. This program provides payment
26.5to primary care clinics for care coordination for people who have complex and chronic
26.6medical conditions. Clinics must meet certain criteria such as the capacity to develop care
26.7plans; have a dedicated care coordinator; and have an adequate number of fee-for-service
26.8clients, evaluation mechanisms, and quality improvement processes to qualify for
26.9reimbursement.

26.10    Sec. 25. Minnesota Statutes 2006, section 256L.01, subdivision 4, is amended to read:
26.11    Subd. 4. Gross individual or gross family income. (a) "Gross individual or gross
26.12family income" for nonfarm self-employed means income calculated for the six-month
26.13period of eligibility using the net profit or loss reported on the applicant's federal income
26.14tax form for the previous year and using the medical assistance families with children
26.15methodology for determining allowable and nonallowable self-employment expenses and
26.16countable income.
26.17    (b) "Gross individual or gross family income" for farm self-employed means income
26.18calculated for the six-month period of eligibility using as the baseline the adjusted gross
26.19income reported on the applicant's federal income tax form for the previous year and
26.20adding back in reported depreciation amounts that apply to the business in which the
26.21family is currently engaged.
26.22    (c) "Gross individual or gross family income" means the total income for all family
26.23members, calculated for the six-month period of eligibility.
26.24EFFECTIVE DATE.This section is effective July 1, 2007.

26.25    Sec. 26. HEALTH CARE PAYMENT SYSTEM REFORM.
26.26    Subdivision 1. Payment reform plan. The commissioners of employee relations,
26.27human services, commerce, and health shall develop a plan for promoting and facilitating
26.28changes in payment rates and methods for paying for health care services, drugs, devices,
26.29supplies, and equipment in order to:
26.30    (1) reward the provision of cost-effective primary and preventive care;
26.31    (2) reward the use of evidence-based care;
26.32    (3) discourage underutilization, overuse, and misuse;
26.33    (4) reward the use of the most cost-effective settings, drugs, devices, providers,
26.34and treatments; and
27.1    (5) encourage consumers to maintain good health and use the health care system
27.2appropriately.
27.3    In developing the plan, the commissioners shall analyze existing data to determine
27.4specific services and health conditions for which changes in payment rates and methods
27.5would lead to significant improvements in quality of care.
27.6    Subd. 2. Report. The commissioners shall submit a report to the legislature by
27.7December 15, 2007, describing the payment reform plan. The report must include
27.8proposed legislation for implementing those components of the plan requiring legislative
27.9action or appropriations of money.
27.10EFFECTIVE DATE.This section is effective July 1, 2007.

27.11    Sec. 27. COMMUNITY COLLABORATIVE PILOT PROJECTS TO COVER
27.12THE UNINSURED.
27.13    Subdivision 1. Community collaboratives. The commissioner of human services
27.14shall provide grants to and authorization for up to three community collaboratives that
27.15satisfy the requirements in this section. To be eligible to receive a grant and authorization
27.16under this section, a community collaborative must include:
27.17    (1) one or more counties;
27.18    (2) one or more local hospitals;
27.19    (3) one or more local employers who collectively provide at least 300 jobs in the
27.20community;
27.21    (4) one or more health care clinics or physician groups; and
27.22    (5) a third-party payer, which may be a county-based purchasing plan operating
27.23under Minnesota Statutes, section 256B.692, a self-insured employer, or a health plan
27.24company as defined in Minnesota Statutes, section 62Q.01, subdivision 4.
27.25    Subd. 2. Pilot project requirements. (a) Community collaborative pilot projects
27.26must:
27.27    (1) identify and enroll persons in the community who are uninsured, and who have,
27.28or are at risk of developing, one of the following chronic conditions: mental illness,
27.29diabetes, asthma, hypertension, or other chronic condition designated by the project;
27.30    (2) assist uninsured persons to obtain private-sector health insurance coverage if
27.31possible or to enroll in any public health care programs for which they are eligible. If the
27.32uninsured individual is unable to obtain health coverage, the community collaborative
27.33must enroll the individual in a local health care assistance program that provides specified
27.34services to prevent or effectively manage the chronic condition;
28.1    (3) include components to help uninsured persons retain employment or to become
28.2employable, if currently unemployed;
28.3    (4) ensure that each uninsured person enrolled in the program has a medical home
28.4responsible for providing, or arranging for, health care services and assisting in the
28.5effective management of the chronic condition;
28.6    (5) coordinate services between all providers and agencies serving an enrolled
28.7individual; and
28.8    (6) be coordinated with the state's Q-Care initiative and improve the use of
28.9evidence-based treatments and effective disease management programs in the broader
28.10community, beyond those individuals enrolled in the project.
28.11    (b) Projects established under this section are not insurance and are not subject to
28.12state-mandated benefit requirements or insurance regulations.
28.13    Subd. 3. Criteria. Proposals must be evaluated by actuarial, financial, and clinical
28.14experts based on the likelihood that the project would produce a positive return on
28.15investment for the community. In awarding grants, the commissioner of human services
28.16shall give preference to proposals that:
28.17    (1) have broad community support from local businesses, provider counties, and
28.18other public and private organizations;
28.19    (2) would provide services to uninsured persons who have, or are at risk of
28.20developing, multiple, co-occurring chronic conditions;
28.21    (3) integrate or coordinate resources from multiple sources, such as employer
28.22contributions, county funds, social service programs, and provider financial or in-kind
28.23support;
28.24    (4) provide continuity of treatment and services when uninsured individuals in
28.25the program become eligible for public or private health insurance or when insured
28.26individuals lose their coverage;
28.27    (5) demonstrate how administrative costs for health plan companies and providers
28.28can be reduced through greater simplification, coordination, consolidation, standardization,
28.29reducing billing errors, or other methods; and
28.30    (6) involve local contributions to the cost of the pilot projects.
28.31    Subd. 4. Grants. The commissioner of human services shall provide
28.32implementation grants of up to one-half of the community collaborative's costs for
28.33planning, administration, and evaluation. The commissioner shall also provide grants to
28.34community collaboratives to develop a fund to pay up to 50 percent of the cost of the
28.35services provided to uninsured individuals. The remaining costs must be paid for through
29.1other sources or by agreement of a health care provider to contribute the cost as charity
29.2care.
29.3    Subd. 5. Evaluation. The commissioner of human services shall evaluate the
29.4effectiveness of each community collaborative project awarded a grant, by comparing
29.5actual costs for serving the identified uninsured persons to the predicted costs that would
29.6have been incurred in the absence of early intervention and consistent treatment to manage
29.7the chronic condition, including the costs to medical assistance, MinnesotaCare, and
29.8general assistance medical care. The commissioner shall require community collaborative
29.9projects, as a condition of receipt of a grant award, to provide the commissioner with all
29.10information necessary for this evaluation.
29.11EFFECTIVE DATE.This section is effective July 1, 2007.

29.12    Sec. 28. HEALTH CARE PAYMENT REFORM PILOT PROJECTS.
29.13    Subdivision 1. Pilot projects. (a) The commissioners of health, human services,
29.14and employee relations shall develop and administer payment reform pilot projects for
29.15state employees and persons enrolled in medical assistance, MinnesotaCare, or general
29.16assistance medical care, to the extent permitted by federal requirements. The purpose of
29.17the projects is to promote and facilitate changes in payment rates and methods for paying
29.18for health care services, drugs, devices, supplies, and equipment in order to:
29.19    (1) reward the provision of cost-effective primary and preventive care;
29.20    (2) reward the use of evidence-based care;
29.21    (3) reward coordination of care for patients with chronic conditions;
29.22    (4) discourage overuse and misuse;
29.23    (5) reward the use of the most cost-effective settings, drugs, devices, providers,
29.24and treatments;
29.25    (6) encourage consumers to maintain good health and use the health care system
29.26appropriately.
29.27    (b) The pilot projects must involve the use of designated care professionals or
29.28clinics to serve as a patient's medical home and be responsible for coordinating health
29.29care services across the continuum of care. The pilot projects must evaluate different
29.30payment reform models and must be coordinated with the Minnesota senior health options
29.31program and the Minnesota disability health options program. To the extent possible, the
29.32commissioners shall coordinate state purchasing activities with other public employers
29.33and with private purchasers, self-insured groups, and health plan companies to promote
29.34the use of pilot projects encompassing both public and private purchasers and markets.
30.1    Subd. 2. Payment methods and incentives. The commissioners shall modify
30.2existing payment methods and rates for those enrollees and health care providers
30.3participating in the pilot project in order to provide incentives for care management,
30.4team-based care, and practice redesign, and increase resources for primary care, chronic
30.5condition care, and care provided to complex patients. The commissioners may create
30.6financial incentives for patients to select a medical home under the pilot project by
30.7reducing, modifying, or eliminating deductibles and co-payments for certain services, or
30.8through other incentives. The commissioners may require patients to remain with their
30.9designated medical home for a specified period of time. Alternative payment methods
30.10may include complete or partial capitation, fee-for-service payments, or other payment
30.11methodologies. The payment methods may provide for the payment of bonuses to medical
30.12home providers or other providers, or to patients, for the achievement of performance
30.13goals. The payment methods may include allocating a portion of the payment that
30.14would otherwise be paid to health plans under state prepaid health care programs to the
30.15designated medical home for specified services.
30.16    Subd. 3. Requirements. In order to be designated a medical home under the pilot
30.17project, health care professionals or clinics must demonstrate their ability to:
30.18    (1) be the patient's first point of contact by telephone or other means, 24 hours a
30.19day, seven days a week;
30.20    (2) provide or arrange for patients' comprehensive health care needs, including the
30.21ability to structure planned chronic disease visits and to manage chronic disease through
30.22the use of disease registries;
30.23    (3) coordinate patients' care when care must be provided outside the medical home;
30.24    (4) provide longitudinal care, not just episodic care, including meeting long-term
30.25and unique personal needs;
30.26    (5) utilize an electronic health record and incorporate a plan to develop and make
30.27available to patients that choose a medical home an electronic personal health record that
30.28is prepopulated with the patient's data, consumer-directed, connected to the provider,
30.2924-hour accessible, and owned and controlled by the patient;
30.30    (6) systematically improve quality of care using, among other inputs, patient
30.31feedback; and
30.32    (7) create a provider network that provides for increased reimbursement for a
30.33medical home in a cost-neutral manner.
30.34    Subd. 4. Evaluation. Pilot projects must be evaluated based on patient satisfaction,
30.35provider satisfaction, clinical process and outcome measures, program costs and savings,
31.1and economic impact on health care providers. Pilot projects must be evaluated based
31.2on the extent to which the medical home:
31.3    (1) coordinated health care services across the continuum of care and thereby
31.4reduced duplication of services and enhanced communication across providers;
31.5    (2) provided safe and high-quality care by increasing utilization of effective
31.6treatments, reduced use of ineffective treatments, reduced barriers to essential care and
31.7services, and eliminated barriers to access;
31.8    (3) reduced unnecessary hospitalizations and emergency room visits and increased
31.9use of cost-effective care and settings;
31.10    (4) encouraged long-term patient and provider relationships by shifting from
31.11episodic care to consistent, coordinated communication and care with a specified team of
31.12providers or individual providers;
31.13    (5) engaged and educated consumers by encouraging shared patient and provider
31.14responsibility and accountability for disease prevention, health promotion, chronic
31.15disease management, acute care, and overall well-being, encouraging informed medical
31.16decision-making, ensuring the availability of accurate medical information, and facilitated
31.17the transfer of accurate medical information;
31.18    (6) encouraged innovation in payment methodologies by using patient and provider
31.19incentives to coordinate care and utilize medical home services and fostering the
31.20expansion of a technology infrastructure that supports collaboration; and
31.21    (7) reduced overall health care costs as compared to conventional payment methods
31.22for similar patient populations.
31.23    Subd. 5. Rulemaking. The commissioners are exempt from administrative
31.24rulemaking under chapter 14 for purposes of developing, administering, contracting
31.25for, and evaluating pilot projects under this section. The commissioner shall publish a
31.26proposed request for proposals in the State Register and allow 30 days for comment
31.27before issuing the final request for proposals.
31.28    Subd. 6. Regulatory and payment barriers. The commissioners shall study state
31.29and federal statutory and regulatory barriers to the creation of medical homes and provide
31.30a report and recommendations to the legislature by December 15, 2007.

31.31    Sec. 29. HEALTH CARE SYSTEM CONSOLIDATION.
31.32    (a) The commissioner of health shall study the effect of health care provider and
31.33health plan company consolidation in the four metropolitan statistical areas in Minnesota
31.34on: health care costs, including provider payment rates; quality of care; and access to care.
31.35The commissioner shall separately consider hospitals, specialty groups, and primary care
32.1groups. The commissioner shall present findings and recommendations to the legislature
32.2by December 15, 2007.
32.3    (b) For purposes of this study, health carriers, provider networks, and other health
32.4care providers shall provide data on network participation, contracted payment rates,
32.5charges, costs, payments received, patient referrals, and other information requested by
32.6the commissioner, in the form and manner specified by the commissioner. Provider-level
32.7information on contracted payment rates and payments from health plans provided to the
32.8commissioner of health for the purposes of this study are (1) private data on individuals as
32.9defined in Minnesota Statutes, section 13.02, subdivision 12, and (2) nonpublic data as
32.10defined in Minnesota Statutes, section 13.02, subdivision 9. The commissioner may not
32.11collect patient-identified data for purposes of this study. Data collected for purposes of
32.12this study may not be used for any other purposes.

32.13    Sec. 30. REPEALER.
32.14Minnesota Statutes 2006, section 62J.052, subdivision 1, is repealed effective
32.15August 1, 2007."
32.16Renumber the articles and sections in sequence
32.17Amend the title as follows:
32.18Page 252, before "providing" insert "instituting health care reform; establishing the
32.19Minnesota Health Insurance Exchange; requiring Section 125 Plans; instituting health care
32.20payment reform; modifying health insurance requirements;"
32.21Correct the title numbers accordingly