1.1    .................... moves to amend H. F. No. 1873 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2006, section 62A.65, subdivision 3, is amended to read:
1.4    Subd. 3. Premium rate restrictions. No individual health plan may be offered,
1.5sold, issued, or renewed to a Minnesota resident unless the premium rate charged is
1.6determined in accordance with the following requirements:
1.7    (a) Premium rates must be no more than 25 percent above and no more than 25
1.8percent below the index rate charged to individuals for the same or similar coverage,
1.9adjusted pro rata for rating periods of less than one year. The premium variations
1.10permitted by this paragraph must be based only upon health status, claims experience,
1.11and occupation. For purposes of this paragraph, health status includes refraining from
1.12tobacco use or other actuarially valid lifestyle factors associated with good health,
1.13provided that the lifestyle factor and its effect upon premium rates have been determined
1.14by the commissioner to be actuarially valid and have been approved by the commissioner.
1.15Variations permitted under this paragraph must not be based upon age or applied
1.16differently at different ages. This paragraph does not prohibit use of a constant percentage
1.17adjustment for factors permitted to be used under this paragraph.
1.18    (b) Premium rates may vary based upon the ages of covered persons only as
1.19provided in this paragraph. In addition to the variation permitted under paragraph (a),
1.20each health carrier may use an additional premium variation based upon age for adults
1.21aged 19 and above of up to plus or minus 50 percent of the index rate. Premium rates for
1.22children under the age of 19 may not vary based on age, regardless of whether the child is
1.23covered as a dependent or as a primary insured.
1.24    (c) A health carrier may request approval by the commissioner to establish separate
1.25geographic regions determined by the health carrier and to establish separate index rates
1.26for each such region. The commissioner shall grant approval if the following conditions
1.27are met:
2.1    (1) the geographic regions must be applied uniformly by the health carrier;
2.2    (2) each geographic region must be composed of no fewer than seven counties that
2.3create a contiguous region; and
2.4    (3) the health carrier provides actuarial justification acceptable to the commissioner
2.5for the proposed geographic variations in index rates, establishing that the variations are
2.6based upon differences in the cost to the health carrier of providing coverage.
2.7    (d) Health carriers may use rate cells and must file with the commissioner the rate
2.8cells they use. Rate cells must be based upon the number of adults or children covered
2.9under the policy and may reflect the availability of Medicare coverage. The rates for
2.10different rate cells must not in any way reflect generalized differences in expected costs
2.11between principal insureds and their spouses.
2.12    (e) In developing its index rates and premiums for a health plan, a health carrier shall
2.13take into account only the following factors:
2.14    (1) actuarially valid differences in rating factors permitted under paragraphs (a)
2.15and (b); and
2.16    (2) actuarially valid geographic variations if approved by the commissioner as
2.17provided in paragraph (c).
2.18    (f) All premium variations must be justified in initial rate filings and upon request of
2.19the commissioner in rate revision filings. All rate variations are subject to approval by
2.20the commissioner.
2.21    (g) The loss ratio must comply with the section 62A.021 requirements for individual
2.22health plans.
2.23    (h) The rates must not be approved, unless the commissioner has determined that the
2.24rates are reasonable. In determining reasonableness, the commissioner shall consider the
2.25growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar
2.26year or years that the proposed premium rate would be in effect, actuarially valid changes
2.27in risks associated with the enrollee populations, and actuarially valid changes as a result
2.28of statutory changes in Laws 1992, chapter 549.
2.29    (i) An insurer may, as part of a minimum lifetime loss ratio guarantee filing under
2.30section 62A.02, subdivision 3a, include a rating practices guarantee as provided in this
2.31paragraph. The rating practices guarantee must be in writing and must guarantee that
2.32the policy form will be offered, sold, issued, and renewed only with premium rates and
2.33premium rating practices that comply with subdivisions 2, 3, 4, and 5. The rating practices
2.34guarantee must be accompanied by an actuarial memorandum that demonstrates that the
2.35premium rates and premium rating system used in connection with the policy form will
2.36satisfy the guarantee. The guarantee must guarantee refunds of any excess premiums to
3.1policyholders charged premiums that exceed those permitted under subdivision 2, 3, 4,
3.2or 5. An insurer that complies with this paragraph in connection with a policy form is
3.3exempt from the requirement of prior approval by the commissioner under paragraphs
3.4(c), (f), and (h).

3.5    Sec. 2. [62A.67] MINNESOTA HEALTH INSURANCE EXCHANGE.
3.6    Subdivision 1. Title; citation. This section may be cited as the "Minnesota Health
3.7Insurance Exchange."
3.8    Subd. 2. Creation; tax exemption. The Minnesota Health Insurance Exchange
3.9is created for the limited purpose of providing individuals with greater access, choice,
3.10portability, and affordability of health insurance products. The Minnesota Health
3.11Insurance Exchange is a not-for-profit corporation under chapter 317A and section 501(c)
3.12of the Internal Revenue Code.
3.13    Subd. 3. Definitions. The following terms have the meanings given them unless
3.14otherwise provided in text.
3.15    (a) "Board" means the board of directors of the Minnesota Health Insurance
3.16Exchange under subdivision 13.
3.17    (b) "Commissioner" means:
3.18    (1) the commissioner of commerce for health insurers subject to the jurisdiction
3.19of the Department of Commerce;
3.20    (2) the commissioner of health for health insurers subject to the jurisdiction of the
3.21Department of Health; or
3.22    (3) either commissioner's designated representative.
3.23    (c) "Exchange" means the Minnesota Health Insurance Exchange.
3.24    (d) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996.
3.25    (e) "Individual market health plans," unless otherwise specified, means individual
3.26market health plans defined in section 62A.011.
3.27    (f) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125 of
3.28the Internal Revenue Code that allows employees to pay for health insurance premiums
3.29with pretax dollars.
3.30    Subd. 4. Insurer and health plan participation. All health plans as defined in
3.31section 62A.011, subdivision 3, issued or renewed in the individual market shall participate
3.32in the exchange. No health plans in the individual market may be issued or renewed
3.33outside of the exchange. Group health plans as defined in section 62A.10 shall not be
3.34offered through the exchange. Health plans offered through the Minnesota Comprehensive
3.35Health Association as defined in section 62E.10 are offered through the exchange to
4.1eligible enrollees as determined by the Minnesota Comprehensive Health Association.
4.2Health plans offered through MinnesotaCare under chapter 256L are offered through the
4.3exchange to eligible enrollees as determined by the commissioner of human services.
4.4    Subd. 5. Approval of health plans. No health plan may be offered through the
4.5exchange unless the commissioner has first certified that:
4.6    (1) the insurer seeking to offer the health plan is licensed to issue health insurance in
4.7the state; and
4.8    (2) the health plan meets the requirements of this section, and the health plan and the
4.9insurer are in compliance with all other applicable health insurance laws.
4.10    Subd. 6. Individual market health plans. Individual market health plans offered
4.11through the exchange continue to be regulated by the commissioner as specified in
4.12chapters 62A, 62C, 62D, 62E, 62Q, and 72A, and must include the following provisions
4.13that apply to all health plans issued or renewed through the exchange:
4.14    (1) premiums for children under the age of 19 shall not vary by age in the exchange;
4.15and
4.16    (2) premiums for children under the age of 19 must be excluded from rating factors
4.17under section 62A.65, subdivision 3, paragraph (b).
4.18    Subd. 7. Individual participation and eligibility. Individuals are eligible to
4.19purchase health plans directly through the exchange or through an employer Section
4.20125 Plan under section 62A.68. Nothing in this section requires guaranteed issue of
4.21individual market health plans offered through the exchange. Individuals are eligible to
4.22purchase individual market health plans through the exchange by meeting one or more
4.23of the following qualifications:
4.24    (1) the individual is a Minnesota resident, meaning the individual is physically
4.25residing on a permanent basis in a place that is the person's principal residence and from
4.26which the person is absent only for temporary purposes;
4.27    (2) the individual is a student attending an institution outside of Minnesota and
4.28maintains Minnesota residency;
4.29    (3) the individual is not a Minnesota resident but is employed by an employer
4.30physically located within the state and the individual's employer is required to offer a
4.31Section 125 Plan under section 62A.68;
4.32    (4) the individual is not a Minnesota resident but is self-employed and the
4.33individual's principal place of business is in the state; or
4.34    (5) the individual is a dependent as defined in section 62L.02, of another individual
4.35who is eligible to participate in the exchange.
5.1    Subd. 8. Continuation of coverage. Enrollment in a health plan may be canceled
5.2for nonpayment of premiums, fraud, or changes in eligibility for MinnesotaCare under
5.3chapter 256L. Enrollment in an individual market health plan may not be canceled or
5.4nonrenewed because of any change in employer or employment status, marital status,
5.5health status, age, residence, or any other change that does not affect eligibility as defined
5.6in this section.
5.7    Subd. 9. Responsibilities of the exchange. The exchange shall serve as the sole
5.8entity for enrollment and collection and transfer of premium payments for health plans
5.9sold to individuals through the exchange. The exchange shall be responsible for the
5.10following functions:
5.11    (1) publicize the exchange, including but not limited to its functions, eligibility
5.12rules, and enrollment procedures;
5.13    (2) provide assistance to employers to establish Section 125 Plans under section
5.1462A.68;
5.15    (3) provide education and assistance to employers to help them understand the
5.16requirements of Section 125 Plans and compliance with applicable regulations;
5.17    (4) create a system to allow individuals to compare and enroll in health plans offered
5.18through the exchange;
5.19    (5) create a system to collect and transmit to the applicable plans all premium
5.20payments made by individuals, including developing mechanisms to receive and process
5.21automatic payroll deductions for individuals who purchase coverage through employer
5.22Section 125 Plans;
5.23    (6) not accept premium payments for individual market health plans from an
5.24employer Section 125 Plan if the employer offers a group health plan as defined in section
5.2562A.10 or has offered a group health plan in the last 12 months, or if the employer is a
5.26self-insurer as defined in section 62E.02;
5.27    (7) provide jointly with health insurers a cancellation notice directly to the primary
5.28insured at least ten days prior to termination of coverage for nonpayment of premium;
5.29    (8) bill the employer for the premiums payable by an employee, provided that the
5.30employer is not liable for payment except from payroll deductions for that purpose;
5.31    (9) refer individuals interested in MinnesotaCare under chapter 256L to the
5.32Department of Human Services to determine eligibility;
5.33    (10) establish a mechanism with the Department of Human Services to transfer
5.34premiums and subsidies for MinnesotaCare to qualify for federal matching payments;
6.1    (11) upon request, issue certificates of previous coverage according to the provisions
6.2of HIPAA and as referenced in section 62Q.181 to all such individuals who cease to be
6.3covered by a participating health plan through the exchange;
6.4    (12) establish procedures to account for all funds received and disbursed by the
6.5exchange for individual participants of the exchange;
6.6    (13) make available to the public, at the end of each calendar year, a report of an
6.7independent audit of the exchange's accounts; and
6.8    (14) provide copies of written and signed statements from employers stating that
6.9the employer is not contributing to the employee's premiums for health plans purchased
6.10by an employee through the exchange to all health insurers with enrolled employees of
6.11the employer.
6.12    Health insurers may rely on the employer's statement in clause (14) provided by the
6.13Minnesota Health Insurance Exchange and are not required to guarantee-issue individual
6.14health plans to the employer's employees.
6.15    Subd. 10. State not liable. The state of Minnesota shall not be liable for the actions
6.16of the Minnesota Health Insurance Exchange.
6.17    Subd. 11. Powers of the exchange. The exchange shall have the power to:
6.18    (1) contract with insurance producers licensed in accident and health insurance
6.19under chapter 60K and vendors to perform one or more of the functions specified in
6.20subdivision 10;
6.21    (2) contract with employers to collect premiums through a Section 125 Plan for
6.22eligible individuals who purchase an individual market health plan through the exchange;
6.23    (3) establish and assess fees on health plan premiums of health plans purchased
6.24through the exchange to fund the cost of administering the exchange;
6.25    (4) seek and directly receive grant funding from government agencies or private
6.26philanthropic organizations to defray the costs of operating the exchange;
6.27    (5) establish and administer rules and procedures governing the operations of the
6.28exchange;
6.29    (6) establish one or more service centers within Minnesota;
6.30    (7) sue or be sued or otherwise take any necessary or proper legal action;
6.31    (8) establish bank accounts and borrow money; and
6.32    (9) enter into agreements with the commissioners of commerce, health, human
6.33services, revenue, employment and economic development, and other state agencies as
6.34necessary for the exchange to implement the provisions of this section.
7.1    Subd. 12. Dispute resolution. The exchange shall establish procedures for
7.2resolving disputes with respect to the eligibility of an individual to participate in the
7.3exchange. The exchange does not have the authority or responsibility to intervene in or
7.4resolve disputes between an individual and a health plan or health insurer. The exchange
7.5shall refer complaints from individuals participating in the exchange to the commissioner
7.6to be resolved according to sections 62Q.68 to 62Q.73.
7.7    Subd. 13. Governance. The exchange shall be governed by a board of directors
7.8with 11 members. The board shall convene on or before July 1, 2007, after the initial board
7.9members have been selected. The initial board membership consists of the following:
7.10    (1) the commissioner of commerce;
7.11    (2) the commissioner of human services;
7.12    (3) the commissioner of health;
7.13    (4) four members appointed by a joint committee of the Minnesota senate and the
7.14Minnesota house of representatives to serve three-year terms; and
7.15    (5) four members appointed by the governor to serve three-year terms.
7.16    Subd. 14. Subsequent board membership. Ongoing membership of the exchange
7.17consists of the following effective July 1, 2010:
7.18    (1) the commissioner of commerce;
7.19    (2) the commissioner of human services;
7.20    (3) the commissioner of health;
7.21    (4) two members appointed by the governor with the approval of a joint committee
7.22of the senate and house of representatives to serve two-year terms; and
7.23    (5) six members elected by the membership of the exchange of which three
7.24are elected to serve a two-year term and three are elected to serve a three-year term.
7.25Appointed and elected members may serve more than one term.
7.26    Subd. 15. Operations of the board. Officers of the board of directors are elected by
7.27members of the board and serve one-year terms. Six members of the board constitutes a
7.28quorum, and the affirmative vote of six members of the board is necessary and sufficient
7.29for any action taken by the board. Board members serve without pay, but are reimbursed
7.30for actual expenses incurred in the performance of their duties.
7.31    Subd. 16. Operations of the exchange. The board of directors shall appoint an
7.32exchange director who shall:
7.33    (1) be a full-time employee of the exchange;
7.34    (2) administer all of the activities and contracts of the exchange; and
7.35    (3) hire and supervise the staff of the exchange.
8.1    Subd. 17. Insurance producers. An individual has the right to choose any
8.2insurance producer licensed in accident and health insurance under chapter 60K to assist
8.3them in purchasing an individual market health plan through the exchange. When a
8.4producer licensed in accident and health insurance under chapter 60K enrolls an eligible
8.5individual in the exchange, the health plan chosen by an individual may pay the producer
8.6a commission.
8.7    Subd. 18. Implementation. Health plan coverage through the exchange begins on
8.8January 1, 2009. The exchange must be operational to assist employers and individuals
8.9by September 1, 2008, and be prepared for enrollment by December 1, 2008. Enrollees
8.10of individual market health plans, MinnesotaCare, and the Minnesota Comprehensive
8.11Health Association as of December 2, 2008, are automatically enrolled in the exchange
8.12on January 1, 2009, in the same health plan and at the same premium that they were
8.13enrolled as of December 2, 2008, subject to the provisions of this section. As of January 1,
8.142009, all enrollees of individual market health plans, MinnesotaCare, and the Minnesota
8.15Comprehensive Health Association shall make premium payments to the exchange.

8.16    Sec. 3. [62A.68] SECTION 125 PLANS.
8.17    Subdivision 1. Definitions. The following terms have the meanings given unless
8.18otherwise provided in text:
8.19    (a) "Current employee" means an employee currently on an employer's payroll other
8.20than a retiree or disabled former employee.
8.21    (b) "Employer" means a person, firm, corporation, partnership, association, business
8.22trust, or other entity employing one or more persons, including a political subdivision of
8.23the state, filing payroll tax information on such employed person or persons.
8.24    (c) "Section 125 Plan" means a cafeteria or Premium Only Plan under section 125
8.25of the Internal Revenue Code that allows employees to purchase health insurance with
8.26pretax dollars.
8.27    (d) "Exchange" means the Minnesota Health Insurance Exchange under section
8.2862A.67.
8.29    (e) "Exchange director" means the appointed director under section 62A.67,
8.30subdivision 16.
8.31    Subd. 2. Section 125 Plan requirement. (a) Effective January 1, 2009, all
8.32employers with 11 or more current employees shall establish a Section 125 Plan to
8.33allow their employees to purchase individual market health plan coverage with pretax
8.34dollars. Nothing in this section requires or mandates employers to offer or purchase
9.1health insurance coverage for their employees. The following employers are exempt
9.2from the Section 125 Plan requirement:
9.3    (1) employers that offer a group health insurance plan as defined in 62A.10;
9.4    (2) employers that are self-insurers as defined in section 62E.02; and
9.5    (3) employers with fewer than 11 current employees, except that employers under
9.6this clause may voluntarily offer a Section 125 Plan.
9.7    (b) Employers that offer a Section 125 Plan may enter into an agreement with the
9.8exchange to administer the employer's Section 125 Plan.
9.9    Subd. 3. Tracking compliance. By July 1, 2008, the exchange, in consultation with
9.10the commissioners of commerce, health, employment and economic development, and
9.11revenue shall establish a method for tracking employer compliance with the Section 125
9.12Plan requirement.
9.13    Subd. 4. Employer requirements. Employers that are required to offer or choose
9.14to offer a Section 125 Plan shall:
9.15    (1) allow employees to purchase any individual market health plan for themselves
9.16and their dependents through the exchange;
9.17    (2) allow employees to choose any insurance producer licensed in accident and
9.18health insurance under chapter 60K to assist them in purchasing an individual market
9.19health plan through the exchange;
9.20    (3) provide a written and signed statement to the exchange stating that the employer
9.21is not contributing to the employee's premiums for health plans purchased by an employee
9.22through the exchange;
9.23    (4) upon an employee's request, deduct premium amounts on a pretax basis in an
9.24amount not to exceed an employee's wages, and remit these employee payments to the
9.25exchange; and
9.26    (5) provide notice to employees that individual market health plans purchased
9.27through the exchange are not employer-sponsored or administered. Employers shall be
9.28held harmless from any and all liability claims related to the individual market health
9.29plans purchased through the exchange by employees under a Section 125 Plan.
9.30    Subd. 5. Section 125 eligible health plans. Individuals who are eligible to use
9.31an employer Section 125 Plan to pay for health insurance coverage purchased through
9.32the exchange may enroll in any health plan offered through the exchange for which the
9.33individual is eligible including individual market health plans, MinnesotaCare, and the
9.34Minnesota Comprehensive Health Association.

9.35    Sec. 4. Minnesota Statutes 2006, section 62E.141, is amended to read:
10.162E.141 INCLUSION IN EMPLOYER-SPONSORED PLAN.
10.2    No employee of an employer that offers a group health plan, under which the
10.3employee is eligible for coverage, is eligible to enroll, or continue to be enrolled, in
10.4the comprehensive health association, except for enrollment or continued enrollment
10.5necessary to cover conditions that are subject to an unexpired preexisting condition
10.6limitation, preexisting condition exclusion, or exclusionary rider under the employer's
10.7health plan. This section does not apply to persons enrolled in the Comprehensive Health
10.8Association as of June 30, 1993. With respect to persons eligible to enroll in the health
10.9plan of an employer that has more than 29 current employees, as defined in section
10.1062L.02 , this section does not apply to persons enrolled in the Comprehensive Health
10.11Association as of December 31, 1994.

10.12    Sec. 5. Minnesota Statutes 2006, section 62J.04, subdivision 3, is amended to read:
10.13    Subd. 3. Cost containment duties. The commissioner shall:
10.14    (1) establish statewide and regional cost containment goals for total health care
10.15spending under this section and, collect data as described in sections 62J.38 to 62J.41 to
10.16monitor statewide achievement of the cost containment goals, and annually report to the
10.17legislature on whether the goals were achieved and, if not, what action should be taken to
10.18ensure that goals are achieved in the future;
10.19    (2) divide the state into no fewer than four regions, with one of those regions being
10.20the Minneapolis/St. Paul metropolitan statistical area but excluding Chisago, Isanti,
10.21Wright, and Sherburne Counties, for purposes of fostering the development of regional
10.22health planning and coordination of health care delivery among regional health care
10.23systems and working to achieve the cost containment goals;
10.24    (3) monitor the quality of health care throughout the state and take action as
10.25necessary to ensure an appropriate level of quality;
10.26    (4) issue recommendations regarding uniform billing forms, uniform electronic
10.27billing procedures and data interchanges, patient identification cards, and other uniform
10.28claims and administrative procedures for health care providers and private and public
10.29sector payers. In developing the recommendations, the commissioner shall review the
10.30work of the work group on electronic data interchange (WEDI) and the American National
10.31Standards Institute (ANSI) at the national level, and the work being done at the state and
10.32local level. The commissioner may adopt rules requiring the use of the Uniform Bill
10.3382/92 form, the National Council of Prescription Drug Providers (NCPDP) 3.2 electronic
10.34version, the Centers for Medicare and Medicaid Services 1500 form, or other standardized
10.35forms or procedures;
10.36    (5) undertake health planning responsibilities;
11.1    (6) authorize, fund, or promote research and experimentation on new technologies
11.2and health care procedures;
11.3    (7) within the limits of appropriations for these purposes, administer or contract for
11.4statewide consumer education and wellness programs that will improve the health of
11.5Minnesotans and increase individual responsibility relating to personal health and the
11.6delivery of health care services, undertake prevention programs including initiatives to
11.7improve birth outcomes, expand childhood immunization efforts, and provide start-up
11.8grants for worksite wellness programs;
11.9    (8) undertake other activities to monitor and oversee the delivery of health care
11.10services in Minnesota with the goal of improving affordability, quality, and accessibility of
11.11health care for all Minnesotans; and
11.12    (9) make the cost containment goal data available to the public in a
11.13consumer-oriented manner.
11.14EFFECTIVE DATE.This section is effective July 1, 2007.

11.15    Sec. 6. [62J.431] EVIDENCE-BASED HEALTH CARE GUIDELINES.
11.16    Evidence-based guidelines must meet the following criteria:
11.17    (1) the scope and application are clear;
11.18    (2) authorship is stated and any conflicts of interest disclosed;
11.19    (3) authors represent all pertinent clinical fields or other means of input have been
11.20used;
11.21    (4) the development process is explicitly stated;
11.22    (5) the guideline is grounded in evidence;
11.23    (6) the evidence is cited and grated;
11.24    (7) the document itself is clear and practical;
11.25    (8) the document is flexible in use, with exceptions noted or provided for with
11.26general statements;
11.27    (9) measures are included for use in systems improvement; and
11.28    (10) the guideline has scheduled reviews and updating.

11.29    Sec. 7. Minnesota Statutes 2006, section 62J.495, is amended to read:
11.3062J.495 HEALTH INFORMATION TECHNOLOGY AND
11.31INFRASTRUCTURE ADVISORY COMMITTEE.
11.32    Subdivision 1. Establishment; members; duties Implementation. By January
11.331, 2012, all hospitals and health care providers must have in place an interoperable
11.34electronic health records system within their hospital system or clinical practice setting.
11.35The commissioner of health, in consultation with the Health Information Technology and
12.1Infrastructure Advisory Committee, shall develop a statewide plan to meet this goal,
12.2including the adoption of uniform standards to be used for the interoperable system for
12.3sharing and synchronizing patient data across systems. The standards must be compatible
12.4with federal efforts. The uniform standards must be refined and adopted for use when
12.5a standard development organization accredited by the American National Standards
12.6Institute completes the development of a standard for sharing and synchronizing patient
12.7data across systems.
12.8    Subd. 2. Health Information Technology and Infrastructure Advisory
12.9Committee. (a) The commissioner shall establish a Health Information Technology
12.10and Infrastructure Advisory Committee governed by section 15.059 to advise the
12.11commissioner on the following matters:
12.12    (1) assessment of the use of health information technology by the state, licensed
12.13health care providers and facilities, and local public health agencies;
12.14    (2) recommendations for implementing a statewide interoperable health information
12.15infrastructure, to include estimates of necessary resources, and for determining standards
12.16for administrative data exchange, clinical support programs, patient privacy requirements,
12.17and maintenance of the security and confidentiality of individual patient data; and
12.18    (3) recommendations for encouraging use of innovative health care applications
12.19using information technology and systems to improve patient care and reduce the cost
12.20of care, including applications relating to disease management and personal health
12.21management that enable remote monitoring of patients' conditions, especially those with
12.22chronic conditions; and
12.23    (3) (4) other related issues as requested by the commissioner.
12.24    (b) The members of the Health Information Technology and Infrastructure Advisory
12.25Committee shall include the commissioners, or commissioners' designees, of health,
12.26human services, administration, and commerce and additional members to be appointed
12.27by the commissioner to include persons representing Minnesota's local public health
12.28agencies, licensed hospitals and other licensed facilities and providers, private purchasers,
12.29the medical and nursing professions, health insurers and health plans, the state quality
12.30improvement organization, academic and research institutions, consumer advisory
12.31organizations with an interest and expertise in health information technology, and other
12.32stakeholders as identified by the Health Information Technology and Infrastructure
12.33Advisory Committee.
12.34    Subd. 2. Annual report. (c) The commissioner shall prepare and issue an annual
12.35report not later than January 30 of each year outlining progress to date in implementing a
12.36statewide health information infrastructure and recommending future projects.
13.1    Subd. 3. Expiration. (d) Notwithstanding section 15.059, this section subdivision
13.2expires June 30, 2009 2012.

13.3    Sec. 8. [62J.496] ELECTRONIC HEALTH RECORD SYSTEM REVOLVING
13.4ACCOUNT AND LOAN PROGRAM.
13.5    Subdivision 1. Account establishment. An account is established to provide loans
13.6to eligible borrowers to assist in financing the installation or support of an interoperable
13.7health record system. The system must provide for the interoperable exchange of health
13.8care information between the applicant and, at a minimum, a hospital system, pharmacy,
13.9and a health care clinic or other physician group.
13.10    Subd. 2. Eligibility. (a) "Eligible borrower" means one of the following:
13.11    (1) community clinics, as defined under section 145.9268;
13.12    (2) hospitals eligible for rural hospital capital improvement grants, as defined
13.13in section 144.148;
13.14    (3) physician clinics located in a community with a population of less than 50,000
13.15according to United States Census Bureau statistics and outside the seven-county
13.16metropolitan area;
13.17    (4) nursing facilities licensed under sections 144A.01 to 144A.27; and
13.18    (5) other providers of health or health care services approved by the commissioner
13.19for which interoperable electronic health record capability would improve quality of
13.20care, patient safety, or community health.
13.21    (b) To be eligible for a loan under this section, the applicant must submit a loan
13.22application to the commissioner of health on forms prescribed by the commissioner. The
13.23application must include, at a minimum:
13.24    (1) the amount of the loan requested and a description of the purpose or project
13.25for which the loan proceeds will be used;
13.26    (2) a quote from a vendor;
13.27    (3) a description of the health care entities and other groups participating in the
13.28project;
13.29    (4) evidence of financial stability and a demonstrated ability to repay the loan; and
13.30    (5) a description of how the system to be financed interconnects or plans in the
13.31future to interconnect with other health care entities and provider groups located in the
13.32same geographical area.
13.33    Subd. 3. Loans. (a) The commissioner of health may make a no interest loan
13.34to a provider or provider group who is eligible under subdivision 2 on a first-come,
13.35first-served basis provided that the applicant is able to comply with this section. The total
14.1accumulative loan principal must not exceed $1,500,000 per loan. The commissioner of
14.2health has discretion over the size and number of loans made.
14.3    (b) The commissioner of health may prescribe forms and establish an application
14.4process and, notwithstanding section 16A.1283, may impose a reasonable nonrefundable
14.5application fee to cover the cost of administering the loan program. Any application
14.6fees imposed and collected under the electronic health records system revolving account
14.7and loan program in this section are appropriated to the commissioner of health for the
14.8duration of the loan program.
14.9    (c) The borrower must begin repaying the principal no later than two years from the
14.10date of the loan. Loans must be amortized no later than six years from the date of the loan.
14.11    (d) Repayments must be credited to the account.
14.12    Subd. 4. Data classification. Data collected by the commissioner of health on the
14.13application to determine eligibility under subdivision 2 and to monitor borrowers' default
14.14risk or collect payments owed under subdivision 3 are (1) private data on individuals as
14.15defined in section 13.02, subdivision 12; and (2) nonpublic data as defined in section
14.1613.02, subdivision 9. The names of borrowers and the amounts of the loans granted are
14.17public data.

14.18    Sec. 9. [62J.536] UNIFORM ELECTRONIC TRANSACTIONS AND
14.19IMPLEMENTATION GUIDE STANDARDS.
14.20    Subdivision 1. Electronic claims and eligibility transactions required. (a)
14.21Beginning January 15, 2009, all group purchasers must accept from health care providers
14.22the eligibility for a health plan transaction described under Code of Federal Regulations,
14.23title 45, part 162, subpart L. Beginning July 15, 2009, all group purchasers must accept
14.24from health care providers the health care claims or equivalent encounter information
14.25transaction described under Code of Federal Regulations, title 45, part 162, subpart K.
14.26    (b) Beginning January 15, 2009, all group purchasers must transmit to providers the
14.27eligibility for a health plan transaction described under Code of Federal Regulations, title
14.2845, part 162, subpart L. Beginning December 1, 2009, all group purchasers must transmit
14.29to providers the health care payment and remittance advice transaction described under
14.30Code of Federal Regulations, title 45, part 162, subpart P.
14.31    (c) Beginning January 15, 2009, all health care providers must submit to group
14.32purchasers the eligibility for a health plan transaction described under Code of Federal
14.33Regulations, title 45, part 162, subpart L. Beginning July 15, 2009, all health care
14.34providers must submit to group purchasers the health care claims or equivalent encounter
14.35information transaction described under Code of Federal Regulations, title 45, part 162,
14.36subpart K.
15.1    (d) Beginning January 15, 2009, all health care providers must accept from group
15.2purchasers the eligibility for a health plan transaction described under Code of Federal
15.3Regulations, title 45, part 162, subpart L. Beginning December 15, 2009, all health care
15.4providers must accept from group purchasers the health care payment and remittance
15.5advice transaction described under Code of Federal Regulations, title 45, part 162, subpart
15.6P.
15.7    (e) Each of the transactions described in paragraphs (a) to (d) shall require the use
15.8of a single, uniform companion guide to the implementation guides described under
15.9Code of Federal Regulations, title 45, part 162. The companion guides will be developed
15.10pursuant to subdivision 2.
15.11    (f) Notwithstanding any other provisions in sections 62J.50 to 62J.61, all group
15.12purchasers and health care providers must exchange claims and eligibility information
15.13electronically using the transactions, companion guides, implementation guides, and
15.14timelines required under this subdivision. Group purchasers may not impose any fee on
15.15providers for the use of the transactions prescribed in this subdivision.
15.16    (g) Nothing in this subdivision shall prohibit group purchasers and health care
15.17providers from using a direct data entry, Web-based methodology for complying with
15.18the requirements of this subdivision. Any direct data entry method for conducting
15.19the transactions specified in this subdivision must be consistent with the data content
15.20component of the single, uniform companion guides required in paragraph (e) and the
15.21implementation guides described under Code of Federal Regulations, title 45, part 162.
15.22    Subd. 2. Establishing uniform, standard companion guides. (a) At least 12
15.23months prior to the timelines required in subdivision 1, the commissioner of health shall
15.24promulgate rules pursuant to section 62J.61 establishing and requiring group purchasers
15.25and health care providers to use the transactions and the uniform, standard companion
15.26guides required under subdivision 1, paragraph (e).
15.27    (b) The commissioner of health must consult with the Minnesota Administrative
15.28Uniformity Committee on the development of the single, uniform companion guides
15.29required under subdivision 1, paragraph (e), for each of the transactions in subdivision 1.
15.30The single uniform companion guides required under subdivision 1, paragraph (e), must
15.31specify uniform billing and coding standards. The commissioner of health shall base the
15.32companion guides required under subdivision 1, paragraph (e), billing and coding rules,
15.33and standards on the Medicare program, with modifications that the commissioner deems
15.34appropriate after consulting the Minnesota Administrative Uniformity Committee.
16.1    (c) No group purchaser or health care provider may add to or modify the single,
16.2uniform companion guides defined in subdivision 1, paragraph (e), through additional
16.3companion guides or other requirements.
16.4    (d) In promulgating the rules in paragraph (a), the commissioner shall not require
16.5data content that is not essential to accomplish the purpose of the transactions in
16.6subdivision 1.

16.7    Sec. 10. Minnesota Statutes 2006, section 62J.60, is amended by adding a subdivision
16.8to read:
16.9    Subd. 3a. Required statement. An identification card issued to an enrollee by a
16.10health plan company or other entity governed by Minnesota health coverage laws must
16.11contain the following statement: "Subject to Minnesota law."

16.12    Sec. 11. Minnesota Statutes 2006, section 62J.692, subdivision 1, is amended to read:
16.13    Subdivision 1. Definitions. For purposes of this section, the following definitions
16.14apply:
16.15    (a) "Accredited clinical training" means the clinical training provided by a
16.16medical education program that is accredited through an organization recognized by the
16.17Department of Education, the Centers for Medicare and Medicaid Services, or another
16.18national body who reviews the accrediting organizations for multiple disciplines and
16.19whose standards for recognizing accrediting organizations are reviewed and approved by
16.20the commissioner of health in consultation with the Medical Education and Research
16.21Advisory Committee.
16.22    (b) "Commissioner" means the commissioner of health.
16.23    (c) "Clinical medical education program" means the accredited clinical training of
16.24physicians (medical students and residents), doctor of pharmacy practitioners, doctors
16.25of chiropractic, dentists, advanced practice nurses (clinical nurse specialists, certified
16.26registered nurse anesthetists, nurse practitioners, and certified nurse midwives), and
16.27physician assistants.
16.28    (d) "Sponsoring institution" means a hospital, school, or consortium located in
16.29Minnesota that sponsors and maintains primary organizational and financial responsibility
16.30for a clinical medical education program in Minnesota and which is accountable to the
16.31accrediting body.
16.32    (e) "Teaching institution" means a hospital, medical center, clinic, or other
16.33organization that conducts a clinical medical education program in Minnesota.
16.34    (f) "Trainee" means a student or resident involved in a clinical medical education
16.35program.
17.1    (g) "Eligible trainee FTEs" means the number of trainees, as measured by full-time
17.2equivalent counts, that are at training sites located in Minnesota with a currently
17.3active medical assistance provider number enrollment status and a National Provider
17.4Identification (NPI) number where training occurs in either an inpatient or ambulatory
17.5patient care setting and where the training is funded, in part, by patient care revenues.

17.6    Sec. 12. Minnesota Statutes 2006, section 62J.692, subdivision 4, is amended to read:
17.7    Subd. 4. Distribution of funds. (a) The commissioner shall annually distribute
17.890 percent of available medical education funds transferred according to section
17.9256B.69, subdivision 5c, paragraph (a), clause (1), to all qualifying applicants based on a
17.10distribution formula that reflects a summation of two factors:
17.11    (1) an education factor, which is determined by the total number of eligible trainee
17.12FTEs and the total statewide average costs per trainee, by type of trainee, in each clinical
17.13medical education program; and
17.14    (2) a public program volume factor, which is determined by the total volume of
17.15public program revenue received by each training site as a percentage of all public
17.16program revenue received by all training sites in the fund pool.
17.17    In this formula, the education factor is weighted at 67 percent and the public program
17.18volume factor is weighted at 33 percent.
17.19    Public program revenue for the distribution formula includes revenue from medical
17.20assistance, prepaid medical assistance, general assistance medical care, and prepaid
17.21general assistance medical care. Training sites that receive no public program revenue
17.22are ineligible for funds available under this paragraph. Total statewide average costs per
17.23trainee for medical residents is based on audited clinical training costs per trainee in
17.24primary care clinical medical education programs for medical residents. Total statewide
17.25average costs per trainee for dental residents is based on audited clinical training costs
17.26per trainee in clinical medical education programs for dental students. Total statewide
17.27average costs per trainee for pharmacy residents is based on audited clinical training costs
17.28per trainee in clinical medical education programs for pharmacy students.
17.29    (b) The commissioner shall annually distribute ten percent of total available medical
17.30education funds transferred according to section 256B.69, subdivision 5c, paragraph (a),
17.31clause (1), to all qualifying applicants based on the percentage received by each applicant
17.32under paragraph (a). These funds are to be used to offset clinical education costs at
17.33eligible clinical training sites based on criteria developed by the clinical medical education
17.34program. Applicants may choose to distribute funds allocated under this paragraph based
17.35on the distribution formula described in paragraph (a).
18.1    (c) The commissioner shall annually distribute $5,000,000 of the funds dedicated
18.2to the commissioner under section 297F.10, subdivision 1, clause (2), plus any federal
18.3financial participation on these funds and on funds transferred under subdivision 10, to all
18.4qualifying applicants based on a distribution formula that gives 100 percent weight to a
18.5public program volume factor, which is determined by the total volume of public program
18.6revenue received by each training site as a percentage of all public program revenue
18.7received by all training sites in the fund pool. If federal approval is not obtained for
18.8federal financial participation on any portion of funds distributed under this paragraph,
18.990 percent of the unmatched funds shall be distributed by the commissioner based on
18.10the formula described in paragraph (a) and ten percent of the unmatched funds shall be
18.11distributed by the commissioner based on the formula described in paragraph (b).
18.12    (d) The commissioner shall annually distribute $3,060,000 of funds dedicated to the
18.13commissioner under section 297F.10, subdivision 1, clause (2), through a formula giving
18.14100 percent weight to an education factor, which is determined by the total number of
18.15eligible trainee full-time equivalents and the total statewide average costs per trainee, by
18.16type of trainee, in each clinical medical education program. If no matching funds are
18.17received on funds distributed under paragraph (c), funds distributed under this paragraph
18.18shall be distributed by the commissioner based on the formula described in paragraph (a).
18.19    (e) The commissioner shall annually distribute $340,000 of funds dedicated to the
18.20commissioner under section 297F.10, subdivision 1, clause (2), to all qualifying applicants
18.21based on the percentage received by each applicant under paragraph (a). These funds are
18.22to be used to offset clinical education costs at eligible clinical training sites based on
18.23criteria developed by the clinical medical education program. Applicants may choose to
18.24distribute funds allocated under this paragraph based on the distribution formula described
18.25in paragraph (a). If no matching funds are received on funds distributed under paragraph
18.26(c), funds distributed under this paragraph shall be distributed by the commissioner based
18.27on the formula described in paragraph (b).
18.28    (c) (f) Funds distributed shall not be used to displace current funding appropriations
18.29from federal or state sources.
18.30    (d) (g) Funds shall be distributed to the sponsoring institutions indicating the amount
18.31to be distributed to each of the sponsor's clinical medical education programs based on
18.32the criteria in this subdivision and in accordance with the commissioner's approval letter.
18.33Each clinical medical education program must distribute funds allocated under paragraph
18.34(a) to the training sites as specified in the commissioner's approval letter. Sponsoring
18.35institutions, which are accredited through an organization recognized by the Department
18.36of Education or the Centers for Medicare and Medicaid Services, may contract directly
19.1with training sites to provide clinical training. To ensure the quality of clinical training,
19.2those accredited sponsoring institutions must:
19.3    (1) develop contracts specifying the terms, expectations, and outcomes of the clinical
19.4training conducted at sites; and
19.5    (2) take necessary action if the contract requirements are not met. Action may
19.6include the withholding of payments under this section or the removal of students from
19.7the site.
19.8    (e) (h) Any funds not distributed in accordance with the commissioner's approval
19.9letter must be returned to the medical education and research fund within 30 days of
19.10receiving notice from the commissioner. The commissioner shall distribute returned funds
19.11to the appropriate training sites in accordance with the commissioner's approval letter.
19.12    (f) (i) The commissioner shall distribute by June 30 of each year an amount equal to
19.13the funds transferred under subdivision 10, plus five percent interest to the University of
19.14Minnesota Board of Regents for the instructional costs of health professional programs
19.15at the Academic Health Center and for interdisciplinary academic initiatives within the
19.16Academic Health Center.
19.17    (g) (j) A maximum of $150,000 of the funds dedicated to the commissioner
19.18under section 297F.10, subdivision 1, paragraph (b), clause (2), may be used by the
19.19commissioner for administrative expenses associated with implementing this section.

19.20    Sec. 13. Minnesota Statutes 2006, section 62J.692, subdivision 7a, is amended to read:
19.21    Subd. 7a. Clinical medical education innovations grants. (a) The commissioner
19.22shall award grants to teaching institutions and clinical training sites for projects that
19.23increase dental access for underserved populations and promote innovative clinical
19.24training of dental professionals.
19.25    (b) The commissioner shall award grants to teaching institutions and clinical training
19.26sites for projects that increase mental health access for underserved populations, promote
19.27innovative clinical training of mental health professionals, increase the number of mental
19.28health providers in rural or underserved areas, and promote the incorporation of patient
19.29safety principles into clinical medical education programs.
19.30    (c) In awarding the grants, the commissioner, in consultation with the commissioner
19.31of human services, shall consider the following:
19.32    (1) potential to successfully increase access to an underserved population;
19.33    (2) the long-term viability of the project to improve access beyond the period
19.34of initial funding;
19.35    (3) evidence of collaboration between the applicant and local communities;
19.36    (4) the efficiency in the use of the funding; and
20.1    (5) the priority level of the project in relation to state clinical education, access,
20.2patient safety, and workforce goals.; and
20.3    (6) the potential of the project to impact the number or distribution of the health
20.4care workforce.
20.5    (b) (d) The commissioner shall periodically evaluate the priorities in awarding the
20.6innovations grants in order to ensure that the priorities meet the changing workforce
20.7needs of the state.

20.8    Sec. 14. Minnesota Statutes 2006, section 62J.692, subdivision 8, is amended to read:
20.9    Subd. 8. Federal financial participation. (a) The commissioner of human
20.10services shall seek to maximize federal financial participation in payments for medical
20.11education and research costs. If the commissioner of human services determines that
20.12federal financial participation is available for the medical education and research, the
20.13commissioner of health shall transfer to the commissioner of human services the amount
20.14of state funds necessary to maximize the federal funds available. The amount transferred
20.15to the commissioner of human services, plus the amount of federal financial participation,
20.16shall be distributed to medical assistance providers in accordance with the distribution
20.17methodology described in subdivision 4.
20.18    (b) For the purposes of paragraph (a), the commissioner shall use physician clinic
20.19rates where possible to maximize federal financial participation.

20.20    Sec. 15. Minnesota Statutes 2006, section 62J.692, subdivision 10, is amended to read:
20.21    Subd. 10. Transfers from University of Minnesota. Of the funds dedicated to the
20.22Academic Health Center under section 297F.10, subdivision 1, clause (1), $4,850,000
20.23shall be transferred annually to the commissioner of health no later than April 15 of each
20.24year for distribution under subdivision 4, paragraph (f) (i).

20.25    Sec. 16. Minnesota Statutes 2006, section 62J.81, subdivision 1, is amended to read:
20.26    Subdivision 1. Required disclosure of estimated payment. (a) A health care
20.27provider, as defined in section 62J.03, subdivision 8, or the provider's designee as agreed
20.28to by that designee, shall, at the request of a consumer, provide that consumer with a good
20.29faith estimate of the reimbursement allowable payment the provider expects to receive
20.30from the health plan company in which the consumer is enrolled has agreed to accept from
20.31the consumer's health plan company for the services specified by the consumer, specifying
20.32the amount of the allowable payment due from the health plan company. Health plan
20.33companies must allow contracted providers, or their designee, to release this information.
20.34A good faith estimate must also be made available at the request of a consumer who
20.35is not enrolled in a health plan company. If a consumer has no applicable public or
21.1private coverage, the health care provider must give the consumer a good faith estimate
21.2of the average allowable reimbursement the provider accepts as payment from private
21.3third-party payers for the services specified by the consumer and the estimated amount
21.4the noncovered consumer will be required to pay. Payment information provided by a
21.5provider, or by the provider's designee as agreed to by that designee, to a patient pursuant
21.6to this subdivision does not constitute a legally binding estimate of the allowable charge
21.7for or cost to the consumer of services.
21.8    (b) A health plan company, as defined in section 62J.03, subdivision 10, shall, at
21.9the request of an enrollee or the enrollee's designee, provide that enrollee with a good
21.10faith estimate of the reimbursement allowable amount the health plan company would
21.11expect to pay to has contracted for with a specified provider within the network as total
21.12payment for a health care service specified by the enrollee and the portion of the allowable
21.13amount due from the enrollee and the enrollee's out-of-pocket costs. If requested by the
21.14enrollee, the health plan company shall also provide to the enrollee a good faith estimate
21.15of the enrollee's out-of-pocket cost for the health care service. An estimate provided to
21.16an enrollee under this paragraph is not a legally binding estimate of the reimbursement
21.17allowable amount or enrollee's out-of-pocket cost.
21.18EFFECTIVE DATE.This section is effective August 1, 2007.

21.19    Sec. 17. Minnesota Statutes 2006, section 62J.82, is amended to read:
21.2062J.82 HOSPITAL CHARGE INFORMATION REPORTING DISCLOSURE.
21.21    Subdivision 1. Required information. The Minnesota Hospital Association shall
21.22develop a Web-based system, available to the public free of charge, for reporting charge
21.23information the following, for Minnesota residents,:
21.24    (1) hospital-specific performance on the measures of care developed under section
21.25256B.072 for acute myocardial infarction, heart failure, and pneumonia;
21.26    (2) by January 1, 2009, hospital-specific performance on the public reporting
21.27measures for hospital-acquired infections as published by the National Quality Forum
21.28and collected by the Minnesota Hospital Association and Stratis Health in collaboration
21.29with infection control practitioners; and
21.30    (3) charge information, including, but not limited to, number of discharges, average
21.31length of stay, average charge, average charge per day, and median charge, for each of the
21.3250 most common inpatient diagnosis-related groups and the 25 most common outpatient
21.33surgical procedures as specified by the Minnesota Hospital Association.
21.34    Subd. 2. Web site. The Web site must provide information that compares
21.35hospital-specific data to hospital statewide data. The Web site must be established by
22.1October 1, 2006, and must be updated annually. The commissioner shall provide a link to
22.2this reporting information on the department's Web site.
22.3    Subd. 3. Enforcement. The commissioner shall provide a link to this information
22.4on the department's Web site. If a hospital does not provide this information to the
22.5Minnesota Hospital Association, the commissioner of health may require the hospital to
22.6do so in accordance with section 144.55, subdivision 6. The commissioner shall provide a
22.7link to this information on the department's Web site.

22.8    Sec. 18. [62J.84] HEALTH CARE TRANSFORMATION TASK FORCE.
22.9    Subdivision 1. Task force. The governor shall convene a health care transformation
22.10task force to advise and assist the governor and the Minnesota legislature. The task force
22.11shall consist of:
22.12    (1) four legislators from the house of representatives appointed by the speaker, two
22.13from the majority party and two from the minority party, and four legislators from the
22.14senate appointed by the Subcommittee on Committees of the senate Committee on Rules
22.15and Administration, two from the majority party and two from the minority party;
22.16    (2) four representatives of the governor and state agencies appointed by the governor;
22.17    (3) at least four persons appointed by the governor who have demonstrated
22.18leadership in health care organizations, health improvement initiatives, health care trade or
22.19professional associations, or other collaborative health system improvement activities; and
22.20    (4) at least two persons appointed by the governor who have demonstrated leadership
22.21in employer and group purchaser activities related to health system improvement, at least
22.22one of which must be from a labor organization.
22.23    Subd. 2. Public input. The commissioner of health shall review available research,
22.24and conduct statewide, regional, and local surveys, focus groups, and other activities as
22.25needed to fill gaps in existing research, to determine Minnesotans' values, preferences,
22.26opinions, and perceptions related to health care and to the issues confronting the task
22.27force, and shall report the findings to the task force.
22.28    Subd. 3. Inventory and assessment of existing activities; action plan. The task
22.29force shall complete an inventory and assessment of all public and private organized
22.30activities, coalitions, and collaboratives working on tasks relating to health system
22.31improvement including, but not limited to, patient safety, quality measurement and
22.32reporting, evidence-based practice, adoption of health information technology, disease
22.33management and chronic care coordination, medical homes, access to health care,
22.34cultural competence, prevention and public health, consumer incentives, price and cost
23.1transparency, nonprofit organization community benefits, education, research, and health
23.2care workforce.
23.3    Subd. 4. Action plan. By December 15, 2007, the governor, with the advice
23.4and assistance of the task force, shall develop and present to the legislature a statewide
23.5action plan for transforming the health care system to improve affordability, quality,
23.6and access. The plan shall include draft legislation needed to implement the plan. The
23.7plan may consist of legislative actions, administrative actions of governmental entities,
23.8collaborative actions, and actions of individuals and individual organizations. Among
23.9other things, the action plan must include the following, with specific and measurable
23.10goals and deadlines for each:
23.11    (1) proposed actions that will slow the rate of increase in health care costs to a rate
23.12that does not exceed the increase in the Consumer Price Index for urban consumers for the
23.13preceding calendar year plus two percentage points, plus an additional percentage based
23.14on the added costs necessary to implement legislation enacted in 2007;
23.15    (2) actions that will increase the affordable health coverage options for uninsured
23.16and underinsured Minnesotans and other strategies that will ensure that all Minnesotans
23.17will have health coverage by January 2011;
23.18    (3) actions to improve the quality and safety of health care and reduce racial and
23.19ethnic disparities in access and quality;
23.20    (4) actions that will reduce the rate of preventable chronic illness through prevention
23.21and public health and wellness initiatives; and
23.22    (5) proposed changes to state health care purchasing and payment strategies used for
23.23state health care programs and state employees that will promote higher quality, lower
23.24cost health care through incentives that reward prevention and early intervention, use
23.25of cost-effective primary care, effective care coordination, and management of chronic
23.26disease;
23.27    (6) actions that will promote the appropriate and cost-effective investment in new
23.28facilities, technologies, and drugs;
23.29    (7) actions to reduce administrative costs; and
23.30    (8) the results of the inventory completed under subdivision 3 and recommendations
23.31for how these activities can be coordinated and improved.
23.32    Subd. 5. Options for small employers. The task force shall study and report back
23.33to the legislature by December 15, 2007, on options for serving small employers and their
23.34employees, and self-employed individuals.

23.35    Sec. 19. Minnesota Statutes 2006, section 62L.12, subdivision 2, is amended to read:
24.1    Subd. 2. Exceptions. (a) A health carrier may sell, issue, or renew individual
24.2conversion policies to eligible employees otherwise eligible for conversion coverage under
24.3section 62D.104 as a result of leaving a health maintenance organization's service area.
24.4    (b) A health carrier may sell, issue, or renew individual conversion policies to
24.5eligible employees otherwise eligible for conversion coverage as a result of the expiration
24.6of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21,
24.762C.142 , 62D.101, and 62D.105.
24.8    (c) A health carrier may sell, issue, or renew conversion policies under section
24.962E.16 to eligible employees.
24.10    (d) A health carrier may sell, issue, or renew individual continuation policies to
24.11eligible employees as required.
24.12    (e) A health carrier may sell, issue, or renew individual health plans if the coverage
24.13is appropriate due to an unexpired preexisting condition limitation or exclusion applicable
24.14to the person under the employer's group health plan or due to the person's need for health
24.15care services not covered under the employer's group health plan.
24.16    (f) A health carrier may sell, issue, or renew an individual health plan, if the
24.17individual has elected to buy the individual health plan not as part of a general plan to
24.18substitute individual health plans for a group health plan nor as a result of any violation of
24.19subdivision 3 or 4.
24.20    (g) Nothing in this subdivision relieves a health carrier of any obligation to provide
24.21continuation or conversion coverage otherwise required under federal or state law.
24.22    (h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage
24.23issued as a supplement to Medicare under sections 62A.3099 to 62A.44, or policies or
24.24contracts that supplement Medicare issued by health maintenance organizations, or those
24.25contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social
24.26Security Act, United States Code, title 42, section 1395 et seq., as amended.
24.27    (i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
24.28health plans necessary to comply with a court order.
24.29    (j) A health carrier may offer, issue, sell, or renew an individual health plan to
24.30persons eligible for an employer group health plan, if the individual health plan is a high
24.31deductible health plan for use in connection with an existing health savings account, in
24.32compliance with the Internal Revenue Code, section 223. In that situation, the same or
24.33a different health carrier may offer, issue, sell, or renew a group health plan to cover
24.34the other eligible employees in the group.
24.35    (k) A health carrier may offer, sell, issue, or renew an individual health plan to one
24.36or more employees of a small employer if the individual health plan is marketed directly
25.1through the Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 to
25.2all employees of the small employer and the small employer does not contribute directly
25.3or indirectly to the premiums or facilitate the administration of the individual health
25.4plan. The requirement to market an individual health plan to all employees through the
25.5Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 does not require
25.6the health carrier to offer or issue an individual health plan to any employee. For purposes
25.7of this paragraph, an employer is not contributing to the premiums or facilitating the
25.8administration of the individual health plan if the employer does not contribute to the
25.9premium and merely collects the premiums from an employee's wages or salary through
25.10payroll deductions and submits payment for the premiums of one or more employees in a
25.11lump sum to the health carrier to the Minnesota Health Insurance Exchange under section
25.1262A.67 or 62A.68. Except for coverage under section 62A.65, subdivision 5, paragraph
25.13(b), or 62E.16, at the request of an employee, the health carrier Minnesota Health Insurance
25.14Exchange under section 62A.67 or 62A.68 may bill the employer for the premiums
25.15payable by the employee, provided that the employer is not liable for payment except
25.16from payroll deductions for that purpose. If an employer is submitting payments under
25.17this paragraph, the health carrier and the Minnesota Health Insurance Exchange under
25.18section 62A.67 or 62A.68 shall jointly provide a cancellation notice directly to the primary
25.19insured at least ten days prior to termination of coverage for nonpayment of premium.
25.20Individual coverage under this paragraph may be offered only if the small employer has
25.21not provided coverage under section 62L.03 to the employees within the past 12 months.
25.22    The employer must provide a written and signed statement to the health carrier
25.23Minnesota Health Insurance Exchange under section 62A.67 or 62A.68 that the employer
25.24is not contributing directly or indirectly to the employee's premiums. The Minnesota
25.25Health Insurance Exchange under section 62A.67 or 62A.68 shall provide all health
25.26carriers with enrolled employees of the employer with a copy of the employer's statement.
25.27The health carrier may rely on the employer's statement provided by the Minnesota Health
25.28Insurance Exchange under section 62A.67 or 62A.68 and is not required to guarantee-issue
25.29individual health plans to the employer's other current or future employees.

25.30    Sec. 20. Minnesota Statutes 2006, section 62L.12, subdivision 4, is amended to read:
25.31    Subd. 4. Employer prohibition. A small employer offering a health benefit plan
25.32shall not encourage or direct an employee or applicant to:
25.33    (1) refrain from filing an application for health coverage when other similarly
25.34situated employees may file an application for health coverage;
25.35    (2) file an application for health coverage during initial eligibility for coverage,
25.36the acceptance of which is contingent on health status, when other similarly situated
26.1employees may apply for health coverage, the acceptance of which is not contingent on
26.2health status;
26.3    (3) seek coverage from another health carrier, including, but not limited to, MCHA;
26.4or
26.5    (4) cause coverage to be issued on different terms because of the health status or
26.6claims experience of that person or the person's dependents.

26.7    Sec. 21. [62Q.101] EVALUATION OF PROVIDER PERFORMANCE.
26.8    A health plan company, or a vendor of risk management services as defined under
26.9section 60A.23, subdivision 8, shall, in evaluating the performance of a health care
26.10provider:
26.11    (1) conduct the evaluation using a bona fide baseline based upon practice experience
26.12of the provider group; and
26.13    (2) disclose the baseline to the health care provider in writing and prior to the
26.14beginning of the time period used for the evaluation.

26.15    Sec. 22. Minnesota Statutes 2006, section 62Q.165, subdivision 1, is amended to read:
26.16    Subdivision 1. Definition. It is the commitment of the state to achieve universal
26.17health coverage for all Minnesotans by the year 2011. Universal coverage is achieved
26.18when:
26.19    (1) every Minnesotan has access to a full range of quality health care services;
26.20    (2) every Minnesotan is able to obtain affordable health coverage which pays for the
26.21full range of services, including preventive and primary care; and
26.22    (3) every Minnesotan pays into the health care system according to that person's
26.23ability.
26.24EFFECTIVE DATE.This section is effective July 1, 2007.

26.25    Sec. 23. Minnesota Statutes 2006, section 62Q.165, subdivision 2, is amended to read:
26.26    Subd. 2. Goal. It is the goal of the state to make continuous progress toward
26.27reducing the number of Minnesotans who do not have health coverage so that by January
26.281, 2000, fewer than four percent of the state's population will be without health coverage
26.292011, all Minnesota residents have access to affordable health care. The goal will be
26.30achieved by improving access to private health coverage through insurance reforms and
26.31market reforms, by making health coverage more affordable for low-income Minnesotans
26.32through purchasing pools and state subsidies, and by reducing the cost of health coverage
26.33through cost containment programs and methods of ensuring that all Minnesotans are
26.34paying into the system according to their ability.
27.1EFFECTIVE DATE.This section is effective July 1, 2007.

27.2    Sec. 24. Minnesota Statutes 2006, section 62Q.80, subdivision 3, is amended to read:
27.3    Subd. 3. Approval. (a) Prior to the operation of a community-based health care
27.4coverage program, a community-based health initiative shall submit to the commissioner
27.5of health for approval the community-based health care coverage program developed by
27.6the initiative. The commissioner shall only approve a program that has been awarded
27.7a community access program grant from the United States Department of Health and
27.8Human Services. The commissioner shall ensure that the program meets the federal grant
27.9requirements and any requirements described in this section and is actuarially sound based
27.10on a review of appropriate records and methods utilized by the community-based health
27.11initiative in establishing premium rates for the community-based health care coverage
27.12program.
27.13    (b) Prior to approval, the commissioner shall also ensure that:
27.14    (1) the benefits offered comply with subdivision 8 and that there are adequate
27.15numbers of health care providers participating in the community-based health network to
27.16deliver the benefits offered under the program;
27.17    (2) the activities of the program are limited to activities that are exempt under this
27.18section or otherwise from regulation by the commissioner of commerce;
27.19    (3) the complaint resolution process meets the requirements of subdivision 10; and
27.20    (4) the data privacy policies and procedures comply with state and federal law.

27.21    Sec. 25. Minnesota Statutes 2006, section 62Q.80, subdivision 4, is amended to read:
27.22    Subd. 4. Establishment. (a) The initiative shall establish and operate upon approval
27.23by the commissioner of health a community-based health care coverage program. The
27.24operational structure established by the initiative shall include, but is not limited to:
27.25    (1) establishing a process for enrolling eligible individuals and their dependents;
27.26    (2) collecting and coordinating premiums from enrollees and employers of enrollees;
27.27    (3) providing payment to participating providers;
27.28    (4) establishing a benefit set according to subdivision 8 and establishing premium
27.29rates and cost-sharing requirements;
27.30    (5) creating incentives to encourage primary care and wellness services; and
27.31    (6) initiating disease management services, as appropriate.
27.32    (b) The payments collected under paragraph (a), clause (2), may be used to capture
27.33available federal funds.

27.34    Sec. 26. Minnesota Statutes 2006, section 62Q.80, subdivision 13, is amended to read:
28.1    Subd. 13. Report. (a) The initiative shall submit quarterly status reports to the
28.2commissioner of health on January 15, April 15, July 15, and October 15 of each year,
28.3with the first report due January 15, 2007 2008. The status report shall include:
28.4    (1) the financial status of the program, including the premium rates, cost per member
28.5per month, claims paid out, premiums received, and administrative expenses;
28.6    (2) a description of the health care benefits offered and the services utilized;
28.7    (3) the number of employers participating, the number of employees and dependents
28.8covered under the program, and the number of health care providers participating;
28.9    (4) a description of the health outcomes to be achieved by the program and a status
28.10report on the performance measurements to be used and collected; and
28.11    (5) any other information requested by the commissioner of health or commerce or
28.12the legislature.
28.13    (b) The initiative shall contract with an independent entity to conduct an evaluation
28.14of the program to be submitted to the commissioners of health and commerce and the
28.15legislature by January 15, 2009 2010. The evaluation shall include:
28.16    (1) an analysis of the health outcomes established by the initiative and the
28.17performance measurements to determine whether the outcomes are being achieved;
28.18    (2) an analysis of the financial status of the program, including the claims to
28.19premiums loss ratio and utilization and cost experience;
28.20    (3) the demographics of the enrollees, including their age, gender, family income,
28.21and the number of dependents;
28.22    (4) the number of employers and employees who have been denied access to the
28.23program and the basis for the denial;
28.24    (5) specific analysis on enrollees who have aggregate medical claims totaling over
28.25$5,000 per year, including data on the enrollee's main diagnosis and whether all the
28.26medical claims were covered by the program;
28.27    (6) number of enrollees referred to state public assistance programs;
28.28    (7) a comparison of employer-subsidized health coverage provided in a comparable
28.29geographic area to the designated community-based geographic area served by the
28.30program, including, to the extent available:
28.31    (i) the difference in the number of employers with 50 or fewer employees offering
28.32employer-subsidized health coverage;
28.33    (ii) the difference in uncompensated care being provided in each area; and
28.34    (iii) a comparison of health care outcomes and measurements established by the
28.35initiative; and
28.36    (8) any other information requested by the commissioner of health or commerce.

29.1    Sec. 27. Minnesota Statutes 2006, section 62Q.80, subdivision 14, is amended to read:
29.2    Subd. 14. Sunset. This section expires December 31, 2011 2012.

29.3    Sec. 28. Minnesota Statutes 2006, section 144.698, subdivision 1, is amended to read:
29.4    Subdivision 1. Yearly reports. (a) Each hospital and each outpatient surgical center,
29.5which has not filed the financial information required by this section with a voluntary,
29.6nonprofit reporting organization pursuant to section 144.702, shall file annually with the
29.7commissioner of health after the close of the fiscal year:
29.8    (1) a balance sheet detailing the assets, liabilities, and net worth of the hospital or
29.9outpatient surgical center;
29.10    (2) a detailed statement of income and expenses;
29.11    (3) a copy of its most recent cost report, if any, filed pursuant to requirements of
29.12Title XVIII of the United States Social Security Act;
29.13    (4) a copy of all changes to articles of incorporation or bylaws;
29.14    (5) information on services provided to benefit the community, including services
29.15provided at no cost or for a reduced fee to patients unable to pay, teaching and research
29.16activities, or other community or charitable activities;
29.17    (6) information required on the revenue and expense report form set in effect on
29.18July 1, 1989, or as amended by the commissioner in rule;
29.19    (7) information on changes in ownership or control; and
29.20    (8) other information required by the commissioner in rule.;
29.21    (9) information on the number of available hospital beds that are dedicated to certain
29.22specialized services, as designated by the commissioner, and annual occupancy rates for
29.23those beds, separately for adult and pediatric care;
29.24    (10) from outpatient surgical centers, the total number of surgeries; and
29.25    (11) a report on health care capital expenditures during the previous year, as required
29.26by section 62J.17.
29.27    (b) Beginning with hospital fiscal year 2009, each nonprofit hospital shall report on
29.28community benefits under paragraph (a), clause (5). "Community benefit" means the costs
29.29of community care, underpayment for services provided under state health care programs,
29.30research costs, community health services costs, financial and in-kind contributions, costs
29.31of community building activities, costs of community benefit operations, education, and
29.32the cost of operating subsidized services. The cost of bad debts and underpayment for
29.33Medicare services are not included in the calculation of community benefit.

29.34    Sec. 29. Minnesota Statutes 2006, section 144.699, is amended by adding a subdivision
29.35to read:
30.1    Subd. 5. Annual reports on community benefit, community care amounts,
30.2and state program underfunding. (a) For each hospital reporting health care cost
30.3information under section 144.698 or 144.702, the commissioner shall report annually
30.4on the hospital's community benefit, community care, and underpayment for state public
30.5health care programs.
30.6    (b) For purposes of this subdivision, "community benefits" has the definition given
30.7in section 144.698, paragraph (b).
30.8    (c) For purposes of this subdivision, "community care" means the costs for medical
30.9care for which a hospital has determined is charity care, as defined under Minnesota Rules,
30.10part 4650.0115, or for which the hospital determines after billing for the services that there
30.11is a demonstrated inability to pay. Any costs forgiven under a hospital's community care
30.12plan or under section 62J.83 may be counted in the hospital's calculation of community
30.13care. Bad debt expenses and discounted charges available to the uninsured shall not be
30.14included in the calculation of community care. The amount of community care is the value
30.15of costs incurred and not the charges made for services.
30.16    (d) For purposes of this subdivision, underpayment for services provided by state
30.17public health care programs is the difference between hospital costs and public program
30.18payments. The information shall be reported in terms of total dollars and as a percentage
30.19of total operating costs for each hospital.

30.20    Sec. 30. [145.985] HEALTH PROMOTION AND WELLNESS.
30.21    Community health boards as defined in section 145A.02, subdivision 5, may work
30.22with schools, health care providers, and others to coordinate health and wellness programs
30.23in their communities. In order to meet the requirements of this section, community
30.24health boards may:
30.25    (1) provide instruction, technical assistance, and recommendations on how to
30.26evaluate project outcomes;
30.27    (2) assist with on-site health and wellness programs utilizing volunteers and others
30.28addressing health and wellness topics including smoking, nutrition, obesity, and others; and
30.29    (3) encourage health and wellness programs consistent with the Centers for Disease
30.30Control and Prevention's Community Guide and goals consistent with the Centers for
30.31Disease Control and Prevention's Healthy People 2010 initiative.

30.32    Sec. 31. Minnesota Statutes 2006, section 256.01, subdivision 2b, is amended to read:
30.33    Subd. 2b. Performance payments. (a) The commissioner shall develop and
30.34implement a pay-for-performance system to provide performance payments to:
31.1    (1) eligible medical groups and clinics that demonstrate optimum care in serving
31.2individuals with chronic diseases who are enrolled in health care programs administered
31.3by the commissioner under chapters 256B, 256D, and 256L.;
31.4    (2) medical groups that implement effective medical home models of patient care
31.5that improve quality and reduce costs through effective primary and preventive care, care
31.6coordination, and management of chronic conditions; and
31.7    (3) eligible medical groups and clinics that evaluate medical provider usage patterns
31.8and provide feedback to individual medical providers on that provider's practice patterns
31.9relative to peer medical providers.
31.10    (b) The commissioner shall also develop and implement a patient incentive health
31.11program to provide incentives and rewards to patients who are enrolled in health care
31.12programs administered by the commissioner under chapters 256B, 256D, and 256L, and
31.13who have agreed to and meet personal health goals established with their primary care
31.14provider to manage a chronic disease or condition including, but not limited to, diabetes,
31.15high blood pressure, and coronary artery disease.
31.16    (c) The commissioner may receive any federal matching money that is made
31.17available through the medical assistance program for managed care oversight contracted
31.18through vendors including consumer surveys, studies, and external quality reviews as
31.19required by the Federal Balanced Budget Act of 1997, Code of Federal Regulations,
31.20title 42, part 438, subpart E. Any federal money received for managed care oversight is
31.21appropriated to the commissioner for this purpose. The commissioner may expend the
31.22federal money received in either year of the biennium.
31.23EFFECTIVE DATE.This section is effective July 1, 2007.

31.24    Sec. 32. Minnesota Statutes 2006, section 256B.0625, is amended by adding a
31.25subdivision to read:
31.26    Subd. 49. Provider-directed care coordination services. The commissioner
31.27shall develop and implement a provider-directed care coordination program for medical
31.28assistance recipients who are not enrolled in the prepaid medical assistance program and
31.29who are receiving services on a fee-for-service basis. This program provides payment
31.30to primary care clinics for care coordination for people who have complex and chronic
31.31medical conditions. Clinics must meet certain criteria such as the capacity to develop care
31.32plans; have a dedicated care coordinator; and have an adequate number of fee-for-service
31.33clients, evaluation mechanisms, and quality improvement processes to qualify for
31.34reimbursement. For purposes of this subdivision, a primary care clinic is a medical clinic
31.35designated as the patient's first point of contact for medical care, available 24 hours a
32.1day, seven days a week, that provides or arranges for the patient's comprehensive health
32.2care needs, and provides overall integration, coordination and continuity over time and
32.3referrals for specialty care.

32.4    Sec. 33. HEALTH CARE PAYMENT SYSTEM REFORM.
32.5    Subdivision 1. Payment reform plan. The commissioners of employee relations,
32.6human services, commerce, and health shall develop a plan for promoting and facilitating
32.7changes in payment rates and methods for paying for health care services, drugs, devices,
32.8supplies, and equipment in order to:
32.9    (1) reward the provision of cost-effective primary and preventive care;
32.10    (2) reward the use of evidence-based care;
32.11    (3) discourage underutilization, overuse, and misuse;
32.12    (4) reward the use of the most cost-effective settings, drugs, devices, providers,
32.13and treatments; and
32.14    (5) encourage consumers to maintain good health and use the health care system
32.15appropriately.
32.16    In developing the plan, the commissioners shall analyze existing data to determine
32.17specific services and health conditions for which changes in payment rates and methods
32.18would lead to significant improvements in quality of care. The commissioners shall
32.19include a definition of the term "quality" for uniform understanding of the plan's impact.
32.20    Subd. 2. Report. The commissioners shall submit a report to the legislature by
32.21December 15, 2007, describing the payment reform plan. The report must include
32.22proposed legislation for implementing those components of the plan requiring legislative
32.23action or appropriations of money.
32.24EFFECTIVE DATE.This section is effective July 1, 2007.

32.25    Sec. 34. COMMUNITY COLLABORATIVE PILOT PROJECTS TO COVER
32.26THE UNINSURED.
32.27    Subdivision 1. Community collaboratives. The commissioner of human services
32.28shall provide grants to and authorization for up to three community collaboratives that
32.29satisfy the requirements in this section. To be eligible to receive a grant and authorization
32.30under this section, a community collaborative must include:
32.31    (1) one or more counties;
32.32    (2) one or more local hospitals;
32.33    (3) one or more local employers who collectively provide at least 300 jobs in the
32.34community;
32.35    (4) one or more health care clinics or physician groups; and
33.1    (5) a third-party payer, which may be a county-based purchasing plan operating
33.2under Minnesota Statutes, section 256B.692, a self-insured employer, or a health plan
33.3company as defined in Minnesota Statutes, section 62Q.01, subdivision 4.
33.4    Subd. 2. Pilot project requirements. (a) Community collaborative pilot projects
33.5must:
33.6    (1) identify and enroll persons in the community who are uninsured, and who have,
33.7or are at risk of developing, one of the following chronic conditions: mental illness,
33.8diabetes, asthma, hypertension, or other chronic condition designated by the project;
33.9    (2) assist uninsured persons to obtain private-sector health insurance coverage if
33.10possible or to enroll in any public health care programs for which they are eligible. If the
33.11uninsured individual is unable to obtain health coverage, the community collaborative
33.12must enroll the individual in a local health care assistance program that provides specified
33.13services to prevent or effectively manage the chronic condition;
33.14    (3) include components to help uninsured persons retain employment or to become
33.15employable, if currently unemployed;
33.16    (4) ensure that each uninsured person enrolled in the program has a medical home
33.17responsible for providing, or arranging for, health care services and assisting in the
33.18effective management of the chronic condition;
33.19    (5) coordinate services between all providers and agencies serving an enrolled
33.20individual; and
33.21    (6) be coordinated with the state's Q-Care initiative and improve the use of
33.22evidence-based treatments and effective disease management programs in the broader
33.23community, beyond those individuals enrolled in the project.
33.24    (b) Projects established under this section are not insurance and are not subject to
33.25state-mandated benefit requirements or insurance regulations.
33.26    Subd. 3. Criteria. Proposals must be evaluated by actuarial, financial, and clinical
33.27experts based on the likelihood that the project would produce a positive return on
33.28investment for the community. In awarding grants, the commissioner of human services
33.29shall give preference to proposals that:
33.30    (1) have broad community support from local businesses, provider counties, and
33.31other public and private organizations;
33.32    (2) would provide services to uninsured persons who have, or are at risk of
33.33developing, multiple, co-occurring chronic conditions;
33.34    (3) integrate or coordinate resources from multiple sources, such as employer
33.35contributions, county funds, social service programs, and provider financial or in-kind
33.36support;
34.1    (4) provide continuity of treatment and services when uninsured individuals in
34.2the program become eligible for public or private health insurance or when insured
34.3individuals lose their coverage;
34.4    (5) demonstrate how administrative costs for health plan companies and providers
34.5can be reduced through greater simplification, coordination, consolidation, standardization,
34.6reducing billing errors, or other methods; and
34.7    (6) involve local contributions to the cost of the pilot projects.
34.8    Subd. 4. Grants. The commissioner of human services shall provide
34.9implementation grants of up to one-half of the community collaborative's costs for
34.10planning, administration, and evaluation. The commissioner shall also provide grants to
34.11community collaboratives to develop a fund to pay up to 50 percent of the cost of the
34.12services provided to uninsured individuals. The remaining costs must be paid for through
34.13other sources or by agreement of a health care provider to contribute the cost as charity
34.14care.
34.15    Subd. 5. Evaluation. The commissioner of human services shall evaluate the
34.16effectiveness of each community collaborative project awarded a grant, by comparing
34.17actual costs for serving the identified uninsured persons to the predicted costs that would
34.18have been incurred in the absence of early intervention and consistent treatment to manage
34.19the chronic condition, including the costs to medical assistance, MinnesotaCare, and
34.20general assistance medical care. The commissioner shall require community collaborative
34.21projects, as a condition of receipt of a grant award, to provide the commissioner with all
34.22information necessary for this evaluation.
34.23EFFECTIVE DATE.This section is effective July 1, 2007.

34.24    Sec. 35. HEALTH CARE PAYMENT REFORM PILOT PROJECTS.
34.25    Subdivision 1. Pilot projects. (a) The commissioners of health, human services,
34.26and employee relations shall develop and administer payment reform pilot projects for
34.27state employees and persons enrolled in medical assistance, MinnesotaCare, or general
34.28assistance medical care, to the extent permitted by federal requirements. The purpose of
34.29the projects is to promote and facilitate changes in payment rates and methods for paying
34.30for health care services, drugs, devices, supplies, and equipment in order to:
34.31    (1) reward the provision of cost-effective primary and preventive care;
34.32    (2) reward the use of evidence-based care;
34.33    (3) reward coordination of care for patients with chronic conditions;
34.34    (4) discourage overuse and misuse;
35.1    (5) reward the use of the most cost-effective settings, drugs, devices, providers,
35.2and treatments;
35.3    (6) encourage consumers to maintain good health and use the health care system
35.4appropriately.
35.5    (b) The pilot projects must involve the use of designated care professionals or
35.6clinics to serve as a patient's medical home and be responsible for coordinating health
35.7care services across the continuum of care. The pilot projects must evaluate different
35.8payment reform models and must be coordinated with the Minnesota senior health options
35.9program and the Minnesota disability health options program. To the extent possible, the
35.10commissioners shall coordinate state purchasing activities with other public employers
35.11and with private purchasers, self-insured groups, and health plan companies to promote
35.12the use of pilot projects encompassing both public and private purchasers and markets.
35.13    Subd. 2. Payment methods and incentives. The commissioners shall modify
35.14existing payment methods and rates for those enrollees and health care providers
35.15participating in the pilot project in order to provide incentives for care management,
35.16team-based care, and practice redesign, and increase resources for primary care, chronic
35.17condition care, and care provided to complex patients. The commissioners may create
35.18financial incentives for patients to select a medical home under the pilot project by
35.19reducing, modifying, or eliminating deductibles and co-payments for certain services, or
35.20through other incentives. The commissioners may require patients to remain with their
35.21designated medical home for a specified period of time. Alternative payment methods
35.22may include complete or partial capitation, fee-for-service payments, or other payment
35.23methodologies. The payment methods may provide for the payment of bonuses to medical
35.24home providers or other providers, or to patients, for the achievement of performance
35.25goals. The payment methods may include allocating a portion of the payment that
35.26would otherwise be paid to health plans under state prepaid health care programs to the
35.27designated medical home for specified services.
35.28    Subd. 3. Requirements. In order to be designated a medical home under the pilot
35.29project, health care professionals or clinics must demonstrate their ability to:
35.30    (1) be the patient's first point of contact by telephone or other means, 24 hours a
35.31day, seven days a week;
35.32    (2) provide or arrange for patients' comprehensive health care needs, including the
35.33ability to structure planned chronic disease visits and to manage chronic disease through
35.34the use of disease registries;
35.35    (3) coordinate patients' care when care must be provided outside the medical home;
36.1    (4) provide longitudinal care, not just episodic care, including meeting long-term
36.2and unique personal needs;
36.3    (5) utilize an electronic health record and incorporate a plan to develop and make
36.4available to patients that choose a medical home an electronic personal health record that
36.5is prepopulated with the patient's data, consumer-directed, connected to the provider,
36.624-hour accessible, and owned and controlled by the patient;
36.7    (6) systematically improve quality of care using, among other inputs, patient
36.8feedback; and
36.9    (7) create a provider network that provides for increased reimbursement for a
36.10medical home in a cost-neutral manner.
36.11    Subd. 4. Evaluation. Pilot projects must be evaluated based on patient satisfaction,
36.12provider satisfaction, clinical process and outcome measures, program costs and savings,
36.13and economic impact on health care providers. Pilot projects must be evaluated based
36.14on the extent to which the medical home:
36.15    (1) coordinated health care services across the continuum of care and thereby
36.16reduced duplication of services and enhanced communication across providers;
36.17    (2) provided safe and high-quality care by increasing utilization of effective
36.18treatments, reduced use of ineffective treatments, reduced barriers to essential care and
36.19services, and eliminated barriers to access;
36.20    (3) reduced unnecessary hospitalizations and emergency room visits and increased
36.21use of cost-effective care and settings;
36.22    (4) encouraged long-term patient and provider relationships by shifting from
36.23episodic care to consistent, coordinated communication and care with a specified team of
36.24providers or individual providers;
36.25    (5) engaged and educated consumers by encouraging shared patient and provider
36.26responsibility and accountability for disease prevention, health promotion, chronic
36.27disease management, acute care, and overall well-being, encouraging informed medical
36.28decision-making, ensuring the availability of accurate medical information, and facilitated
36.29the transfer of accurate medical information;
36.30    (6) encouraged innovation in payment methodologies by using patient and provider
36.31incentives to coordinate care and utilize medical home services and fostering the
36.32expansion of a technology infrastructure that supports collaboration; and
36.33    (7) reduced overall health care costs as compared to conventional payment methods
36.34for similar patient populations.
36.35    Subd. 5. Rulemaking. The commissioners are exempt from administrative
36.36rulemaking under chapter 14 for purposes of developing, administering, contracting
37.1for, and evaluating pilot projects under this section. The commissioner shall publish a
37.2proposed request for proposals in the State Register and allow 30 days for comment
37.3before issuing the final request for proposals.
37.4    Subd. 6. Regulatory and payment barriers. The commissioners shall study state
37.5and federal statutory and regulatory barriers to the creation of medical homes and provide
37.6a report and recommendations to the legislature by December 15, 2007.

37.7    Sec. 36. HEALTH CARE SYSTEM CONSOLIDATION.
37.8    (a) The commissioner of health shall study the effect of health care provider and
37.9health plan company consolidation in the four metropolitan statistical areas in Minnesota
37.10on: health care costs, including provider payment rates; quality of care; and access
37.11to care. The commissioner shall separately consider hospitals, specialty groups, and
37.12primary care groups. The commissioner shall include a definition of the terms "quality
37.13of care" and "access to care" to provide uniform understanding of the study's findings.
37.14The commissioner shall present findings and recommendations to the legislature by
37.15December 15, 2007.
37.16    (b) For purposes of this study, health carriers, provider networks, and other health
37.17care providers shall provide data on network participation, contracted payment rates,
37.18charges, costs, payments received, patient referrals, and other information requested by
37.19the commissioner, in the form and manner specified by the commissioner. Provider-level
37.20information on contracted payment rates and payments from health plans provided to the
37.21commissioner of health for the purposes of this study are (1) private data on individuals as
37.22defined in Minnesota Statutes, section 13.02, subdivision 12, and (2) nonpublic data as
37.23defined in Minnesota Statutes, section 13.02, subdivision 9. The commissioner may not
37.24collect patient-identified data for purposes of this study. Data collected for purposes of
37.25this study may not be used for any other purposes.

37.26    Sec. 37. REPEALER.
37.27Minnesota Statutes 2006, section 62J.052, subdivision 1, is repealed effective
37.28August 1, 2007."
37.29Amend the title accordingly