Bill Text: MN HF2412 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Managed care plan financial reporting changes made, an annual independent third-party audit required, and reporting requirements eliminated and modified.
Spectrum: Slight Partisan Bill (Republican 10-4)
Status: (Introduced - Dead) 2012-04-16 - Author added Fabian [HF2412 Detail]
Download: Minnesota-2011-HF2412-Engrossed.html
1.2relating to health; requiring certain changes in managed care plan financial
1.3reporting; requiring an annual independent third-party audit; eliminating and
1.4modifying reporting requirements;amending Minnesota Statutes 2010, sections
1.572A.201, subdivision 8; 256B.69, by adding a subdivision; Minnesota Statutes
1.62011 Supplement, section 256B.69, subdivision 9c; repealing Minnesota Statutes
1.72010, sections 62M.09, subdivision 9; 62Q.64; Minnesota Rules, part 4685.2000.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2010, section 72A.201, subdivision 8, is amended to
1.10read:
1.11 Subd. 8. Standards for claim denial. The following acts by an insurer, adjuster, or
1.12self-insured, or self-insurance administrator constitute unfair settlement practices:
1.13(1) denying a claim or any element of a claim on the grounds of a specific policy
1.14provision, condition, or exclusion, without informing the insured of the policy provision,
1.15condition, or exclusion on which the denial is based;
1.16(2) denying a claim without having made a reasonable investigation of the claim;
1.17(3) denying a liability claim because the insured has requested that the claim be
1.18denied;
1.19(4) denying a liability claim because the insured has failed or refused to report the
1.20claim, unless an independent evaluation of available information indicates there is no
1.21liability;
1.22(5) denying a claim without including the following information:
1.23(i) the basis for the denial;
2.1(ii) the name, address, and telephone number of the insurer's claim service office
2.2or the claim representative of the insurer to whom the insured or claimant may take any
2.3questions or complaints about the denial;
2.4(iii) the claim number and the policy number of the insured; and
2.5(iv) if the denied claim is a fire claim, the insured's right to file with the Department
2.6of Commerce a complaint regarding the denial, and the address and telephone number
2.7of the Department of Commerce;
2.8(6) denying a claim because the insured or claimant failed to exhibit the damaged
2.9property unless:
2.10(i) the insurer, within a reasonable time period, made a written demand upon the
2.11insured or claimant to exhibit the property; and
2.12(ii) the demand was reasonable under the circumstances in which it was made;
2.13(7) denying a claim by an insured or claimant based on the evaluation of a chemical
2.14dependency claim reviewer selected by the insurer unless the reviewer meets the
2.15qualifications specified under subdivision 8a. An insurer that selects chemical dependency
2.16reviewers to conduct claim evaluations must annually file with the commissioner of
2.17commerce a report containing the specific evaluation standards and criteria used in these
2.18evaluations. The report must be filed at the same time its annual statement is submitted
2.19under section60A.13 . The report must also include the number of evaluations performed
2.20on behalf of the insurer during the reporting period, the types of evaluations performed,
2.21the results, the number of appeals of denials based on these evaluations, the results of
2.22these appeals, and the number of complaints filed in a court of competent jurisdiction.
2.23EFFECTIVE DATE.This section is effective the day following final enactment.
2.24 Sec. 2. Minnesota Statutes 2011 Supplement, section 256B.69, subdivision 9c, is
2.25amended to read:
2.26 Subd. 9c. Managed care financial reporting. (a) The commissioner shall collect
2.27detailed data regarding financials, provider payments, provider rate methodologies, and
2.28other data as determined by the commissioner and managed care and county-based
2.29purchasing plans that are required to be submitted under this section. The commissioner,
2.30in consultation with the commissioners of health and commerce, and in consultation
2.31with managed care plans and county-based purchasing plans, shall set uniform criteria,
2.32definitions, and standards for the data to be submitted, and shall require managed care and
2.33county-based purchasing plans to comply with these criteria, definitions, and standards
2.34when submitting data under this section. In carrying out the responsibilities of this
2.35subdivision, the commissioner shall ensure that the data collection is implemented in an
3.1integrated and coordinated manner that avoids unnecessary duplication of effort. To the
3.2extent possible, the commissioner shall use existing data sources and streamline data
3.3collection in order to reduce public and private sector administrative costs. Nothing in
3.4this subdivision shall allow release of information that is nonpublic data pursuant to
3.5section13.02 .
3.6(b) Each managed care and county-based purchasing plan must annually provide
3.7to the commissioner the following information on state public programs, in the form
3.8and manner specified by the commissioner, according to guidelines developed by the
3.9commissioner in consultation with managed care plans and county-based purchasing
3.10plans under contract:
3.11(1) administrative expenses by category and subcategory consistent with
3.12administrative expense reporting to other state and federal regulatory agencies, by
3.13program;
3.14(2) revenues by program, including investment income;
3.15(3) nonadministrative service payments, provider payments, and reimbursement
3.16rates by provider type or service category, by program, paid by the managed care plan
3.17under this section or the county-based purchasing plan under section256B.692 to
3.18providers and vendors for administrative services under contract with the plan, including
3.19but not limited to:
3.20(i) individual-level provider payment and reimbursement rate data;
3.21(ii) provider reimbursement rate methodologies by provider type, by program,
3.22including a description of alternative payment arrangements and payments outside the
3.23claims process;
3.24(iii) data on implementation of legislatively mandated provider rate changes; and
3.25(iv) individual-level provider payment and reimbursement rate data and plan-specific
3.26provider reimbursement rate methodologies by provider type, by program, including
3.27alternative payment arrangements and payments outside the claims process, provided to
3.28the commissioner under this subdivision are nonpublic data as defined in section13.02 ;
3.29(4) data on the amount of reinsurance or transfer of risk by program; and
3.30(5) contribution to reserve, by program.
3.31(c) In the event a report is published or released based on data provided under
3.32this subdivision, the commissioner shall provide the report to managed care plans and
3.33county-based purchasing plans 30 days prior to the publication or release of the report.
3.34Managed care plans and county-based purchasing plans shall have 30 days to review the
3.35report and provide comment to the commissioner.
4.1(d) The legislative auditor shall contract for the audit required under this paragraph.
4.2The legislative auditor shall require, in the request for bids and the resulting contracts for
4.3coverage to be provided under this section, that each managed care and county-based
4.4purchasing plan submit to and fully cooperate with an annual independent third-party
4.5financial audit of the information required under paragraph (b). For purposes of
4.6this paragraph, "independent third party" means an audit firm that is independent in
4.7accordance with government auditing standards issued by the United State Government
4.8Accountability Office and licensed in accordance with chapter 326A. In no case shall
4.9the audit firm conducting the audit provide services to a managed care or county-based
4.10purchasing plan at the same time as the audit is being conducted or have provided services
4.11to a managed care or county-based purchasing plan during the prior three years.
4.12(e) The audit of the information required under paragraph (b) shall be conducted
4.13by an independent third-party firm in accordance with generally accepted government
4.14auditing standards issued by the United States Government Accountability Office.
4.15(f) A managed care or county-based purchasing plan that provides services under
4.16this section shall provide to the commissioner biweekly encounter and claims data at
4.17a detailed level, and shall participate in a quality assurance program that verifies the
4.18timeliness, completeness, accuracy, and consistency of data provided. The commissioner
4.19shall have written protocols for the quality assurance program that are publicly available.
4.20The commissioner shall contract with an independent third-party auditing firm to evaluate
4.21the quality assurance protocols, the capacity of those protocols to assure complete and
4.22accurate data, and the commissioner's implementation of the protocols.
4.23(g) Contracts awarded under this section to a managed care or county-based
4.24purchasing plan must provide that the commissioner and the contracted auditor shall have
4.25unlimited access to any and all data required to complete the audit and that this access
4.26shall be enforceable in a court of competent jurisdiction through the process of injunctive
4.27or other appropriate relief.
4.28(h) No actuary or actuarial firm providing actuarial services to the commissioner
4.29in connection with this subdivision shall provide services to any managed care or
4.30county-based purchasing plan participating in this subdivision during the term of the
4.31actuary's work for the commissioner under this subdivision.
4.32(i) The actuary or actuarial firm referenced in paragraph (h) shall certify and attest
4.33to the rates paid to managed care plans and county-based purchasing plans under this
4.34section, and the certification and attestation must be auditable.
4.35(j) The independent third-party audit shall include a determination of compliance
4.36with the federal Medicaid rate certification process.
5.1(k) The legislative auditor's contract with the independent third-party auditing firm
5.2shall be designed and administered so as to render the independent third-party audit
5.3eligible for a federal subsidy if available for that purpose.
5.4(l) Upon completion of the audit, and its receipt by the legislative auditor, the
5.5legislative auditor shall provide copies of the audit report to the commissioner, the state
5.6auditor, the attorney general, and the chairs and ranking minority members of the health
5.7finance committees of the legislature.
5.8(m) The commissioner shall annually assess managed care and county-based
5.9purchasing plans for agency costs related to implementing paragraphs (d) to (l), which
5.10have been approved as reasonable by the commissioner of management and budget.
5.11The assessment for each plan shall be in proportion to that plan's share of total medical
5.12assistance and MinnesotaCare enrollment under this section and sections 256B.692 and
5.13256L.12.
5.14EFFECTIVE DATE.This section is effective the day following final enactment
5.15and applies to contracts, and the contracting process, for contracts that are effective
5.16January 1, 2013, and thereafter.
5.17 Sec. 3. Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision
5.18to read:
5.19 Subd. 9d. Savings from report elimination. Managed care and county-based
5.20purchasing plans shall use all savings resulting from the elimination or modification
5.21of reporting requirements under sections 1, 4, and 5 to pay the assessment required by
5.22subdivision 9c, paragraph (m).
5.23EFFECTIVE DATE.This section is effective the day following final enactment.
5.24 Sec. 4. REPORTING REQUIREMENTS.
5.25 Subdivision 1. Evidence-based childbirth program. The commissioner of human
5.26services may discontinue the evidence-based childbirth program and shall discontinue all
5.27affiliated reporting requirements established under Minnesota Statutes, section 256B.0625,
5.28subdivision 3g, once the commissioner determines that hospitals representing at least 90
5.29percent of births covered by medical assistance or MinnesotaCare have approved policies
5.30and processes in place that prohibit elective inductions prior to 39 weeks' gestation.
5.31 Subd. 2. Provider networks. The commissioners of health, commerce, and human
5.32services shall merge reporting requirements for health maintenance organizations and
5.33county-based purchasing plans related to Minnesota Department of Health oversight of
6.1network adequacy under Minnesota Statutes, section 62D.124, and the provider network
6.2list reported to the Department of Human Services under Minnesota Rules, part 4685.2100.
6.3The commissioners shall work with health maintenance organizations and county-based
6.4purchasing plans to ensure that the report merger is done in a manner that simplifies health
6.5maintenance organization and county-based purchasing plan reporting processes.
6.6EFFECTIVE DATE.This section is effective the day following final enactment.
6.7 Sec. 5. REPEALER.
6.8 Subdivision 1. Summary of complaints and grievances. Minnesota Rules, part
6.94685.2000, is repealed effective the day following final enactment.
6.10 Subd. 2. Medical necessity denials and appeals. Minnesota Statutes 2010, section
6.1162M.09, subdivision 9, is repealed effective the day following final enactment.
6.12 Subd. 3. Salary reports. Minnesota Statutes 2010, section 62Q.64, is repealed
6.13effective the day following final enactment.
1.3reporting; requiring an annual independent third-party audit; eliminating and
1.4modifying reporting requirements;amending Minnesota Statutes 2010, sections
1.572A.201, subdivision 8; 256B.69, by adding a subdivision; Minnesota Statutes
1.62011 Supplement, section 256B.69, subdivision 9c; repealing Minnesota Statutes
1.72010, sections 62M.09, subdivision 9; 62Q.64; Minnesota Rules, part 4685.2000.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2010, section 72A.201, subdivision 8, is amended to
1.10read:
1.11 Subd. 8. Standards for claim denial. The following acts by an insurer, adjuster, or
1.12self-insured, or self-insurance administrator constitute unfair settlement practices:
1.13(1) denying a claim or any element of a claim on the grounds of a specific policy
1.14provision, condition, or exclusion, without informing the insured of the policy provision,
1.15condition, or exclusion on which the denial is based;
1.16(2) denying a claim without having made a reasonable investigation of the claim;
1.17(3) denying a liability claim because the insured has requested that the claim be
1.18denied;
1.19(4) denying a liability claim because the insured has failed or refused to report the
1.20claim, unless an independent evaluation of available information indicates there is no
1.21liability;
1.22(5) denying a claim without including the following information:
1.23(i) the basis for the denial;
2.1(ii) the name, address, and telephone number of the insurer's claim service office
2.2or the claim representative of the insurer to whom the insured or claimant may take any
2.3questions or complaints about the denial;
2.4(iii) the claim number and the policy number of the insured; and
2.5(iv) if the denied claim is a fire claim, the insured's right to file with the Department
2.6of Commerce a complaint regarding the denial, and the address and telephone number
2.7of the Department of Commerce;
2.8(6) denying a claim because the insured or claimant failed to exhibit the damaged
2.9property unless:
2.10(i) the insurer, within a reasonable time period, made a written demand upon the
2.11insured or claimant to exhibit the property; and
2.12(ii) the demand was reasonable under the circumstances in which it was made;
2.13(7) denying a claim by an insured or claimant based on the evaluation of a chemical
2.14dependency claim reviewer selected by the insurer unless the reviewer meets the
2.15qualifications specified under subdivision 8a. An insurer that selects chemical dependency
2.16reviewers to conduct claim evaluations must annually file with the commissioner of
2.17commerce a report containing the specific evaluation standards and criteria used in these
2.18evaluations. The report must be filed at the same time its annual statement is submitted
2.19under section
2.20
2.21
2.22
2.23EFFECTIVE DATE.This section is effective the day following final enactment.
2.24 Sec. 2. Minnesota Statutes 2011 Supplement, section 256B.69, subdivision 9c, is
2.25amended to read:
2.26 Subd. 9c. Managed care financial reporting. (a) The commissioner shall collect
2.27detailed data regarding financials, provider payments, provider rate methodologies, and
2.28other data as determined by the commissioner and managed care and county-based
2.29purchasing plans that are required to be submitted under this section. The commissioner,
2.30in consultation with the commissioners of health and commerce, and in consultation
2.31with managed care plans and county-based purchasing plans, shall set uniform criteria,
2.32definitions, and standards for the data to be submitted, and shall require managed care and
2.33county-based purchasing plans to comply with these criteria, definitions, and standards
2.34when submitting data under this section. In carrying out the responsibilities of this
2.35subdivision, the commissioner shall ensure that the data collection is implemented in an
3.1integrated and coordinated manner that avoids unnecessary duplication of effort. To the
3.2extent possible, the commissioner shall use existing data sources and streamline data
3.3collection in order to reduce public and private sector administrative costs. Nothing in
3.4this subdivision shall allow release of information that is nonpublic data pursuant to
3.5section
3.6(b) Each managed care and county-based purchasing plan must annually provide
3.7to the commissioner the following information on state public programs, in the form
3.8and manner specified by the commissioner, according to guidelines developed by the
3.9commissioner in consultation with managed care plans and county-based purchasing
3.10plans under contract:
3.11(1) administrative expenses by category and subcategory consistent with
3.12administrative expense reporting to other state and federal regulatory agencies, by
3.13program;
3.14(2) revenues by program, including investment income;
3.15(3) nonadministrative service payments, provider payments, and reimbursement
3.16rates by provider type or service category, by program, paid by the managed care plan
3.17under this section or the county-based purchasing plan under section
3.18providers and vendors for administrative services under contract with the plan, including
3.19but not limited to:
3.20(i) individual-level provider payment and reimbursement rate data;
3.21(ii) provider reimbursement rate methodologies by provider type, by program,
3.22including a description of alternative payment arrangements and payments outside the
3.23claims process;
3.24(iii) data on implementation of legislatively mandated provider rate changes; and
3.25(iv) individual-level provider payment and reimbursement rate data and plan-specific
3.26provider reimbursement rate methodologies by provider type, by program, including
3.27alternative payment arrangements and payments outside the claims process, provided to
3.28the commissioner under this subdivision are nonpublic data as defined in section
3.29(4) data on the amount of reinsurance or transfer of risk by program; and
3.30(5) contribution to reserve, by program.
3.31(c) In the event a report is published or released based on data provided under
3.32this subdivision, the commissioner shall provide the report to managed care plans and
3.33county-based purchasing plans 30 days prior to the publication or release of the report.
3.34Managed care plans and county-based purchasing plans shall have 30 days to review the
3.35report and provide comment to the commissioner.
4.1(d) The legislative auditor shall contract for the audit required under this paragraph.
4.2The legislative auditor shall require, in the request for bids and the resulting contracts for
4.3coverage to be provided under this section, that each managed care and county-based
4.4purchasing plan submit to and fully cooperate with an annual independent third-party
4.5financial audit of the information required under paragraph (b). For purposes of
4.6this paragraph, "independent third party" means an audit firm that is independent in
4.7accordance with government auditing standards issued by the United State Government
4.8Accountability Office and licensed in accordance with chapter 326A. In no case shall
4.9the audit firm conducting the audit provide services to a managed care or county-based
4.10purchasing plan at the same time as the audit is being conducted or have provided services
4.11to a managed care or county-based purchasing plan during the prior three years.
4.12(e) The audit of the information required under paragraph (b) shall be conducted
4.13by an independent third-party firm in accordance with generally accepted government
4.14auditing standards issued by the United States Government Accountability Office.
4.15(f) A managed care or county-based purchasing plan that provides services under
4.16this section shall provide to the commissioner biweekly encounter and claims data at
4.17a detailed level, and shall participate in a quality assurance program that verifies the
4.18timeliness, completeness, accuracy, and consistency of data provided. The commissioner
4.19shall have written protocols for the quality assurance program that are publicly available.
4.20The commissioner shall contract with an independent third-party auditing firm to evaluate
4.21the quality assurance protocols, the capacity of those protocols to assure complete and
4.22accurate data, and the commissioner's implementation of the protocols.
4.23(g) Contracts awarded under this section to a managed care or county-based
4.24purchasing plan must provide that the commissioner and the contracted auditor shall have
4.25unlimited access to any and all data required to complete the audit and that this access
4.26shall be enforceable in a court of competent jurisdiction through the process of injunctive
4.27or other appropriate relief.
4.28(h) No actuary or actuarial firm providing actuarial services to the commissioner
4.29in connection with this subdivision shall provide services to any managed care or
4.30county-based purchasing plan participating in this subdivision during the term of the
4.31actuary's work for the commissioner under this subdivision.
4.32(i) The actuary or actuarial firm referenced in paragraph (h) shall certify and attest
4.33to the rates paid to managed care plans and county-based purchasing plans under this
4.34section, and the certification and attestation must be auditable.
4.35(j) The independent third-party audit shall include a determination of compliance
4.36with the federal Medicaid rate certification process.
5.1(k) The legislative auditor's contract with the independent third-party auditing firm
5.2shall be designed and administered so as to render the independent third-party audit
5.3eligible for a federal subsidy if available for that purpose.
5.4(l) Upon completion of the audit, and its receipt by the legislative auditor, the
5.5legislative auditor shall provide copies of the audit report to the commissioner, the state
5.6auditor, the attorney general, and the chairs and ranking minority members of the health
5.7finance committees of the legislature.
5.8(m) The commissioner shall annually assess managed care and county-based
5.9purchasing plans for agency costs related to implementing paragraphs (d) to (l), which
5.10have been approved as reasonable by the commissioner of management and budget.
5.11The assessment for each plan shall be in proportion to that plan's share of total medical
5.12assistance and MinnesotaCare enrollment under this section and sections 256B.692 and
5.13256L.12.
5.14EFFECTIVE DATE.This section is effective the day following final enactment
5.15and applies to contracts, and the contracting process, for contracts that are effective
5.16January 1, 2013, and thereafter.
5.17 Sec. 3. Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision
5.18to read:
5.19 Subd. 9d. Savings from report elimination. Managed care and county-based
5.20purchasing plans shall use all savings resulting from the elimination or modification
5.21of reporting requirements under sections 1, 4, and 5 to pay the assessment required by
5.22subdivision 9c, paragraph (m).
5.23EFFECTIVE DATE.This section is effective the day following final enactment.
5.24 Sec. 4. REPORTING REQUIREMENTS.
5.25 Subdivision 1. Evidence-based childbirth program. The commissioner of human
5.26services may discontinue the evidence-based childbirth program and shall discontinue all
5.27affiliated reporting requirements established under Minnesota Statutes, section 256B.0625,
5.28subdivision 3g, once the commissioner determines that hospitals representing at least 90
5.29percent of births covered by medical assistance or MinnesotaCare have approved policies
5.30and processes in place that prohibit elective inductions prior to 39 weeks' gestation.
5.31 Subd. 2. Provider networks. The commissioners of health, commerce, and human
5.32services shall merge reporting requirements for health maintenance organizations and
5.33county-based purchasing plans related to Minnesota Department of Health oversight of
6.1network adequacy under Minnesota Statutes, section 62D.124, and the provider network
6.2list reported to the Department of Human Services under Minnesota Rules, part 4685.2100.
6.3The commissioners shall work with health maintenance organizations and county-based
6.4purchasing plans to ensure that the report merger is done in a manner that simplifies health
6.5maintenance organization and county-based purchasing plan reporting processes.
6.6EFFECTIVE DATE.This section is effective the day following final enactment.
6.7 Sec. 5. REPEALER.
6.8 Subdivision 1. Summary of complaints and grievances. Minnesota Rules, part
6.94685.2000, is repealed effective the day following final enactment.
6.10 Subd. 2. Medical necessity denials and appeals. Minnesota Statutes 2010, section
6.1162M.09, subdivision 9, is repealed effective the day following final enactment.
6.12 Subd. 3. Salary reports. Minnesota Statutes 2010, section 62Q.64, is repealed
6.13effective the day following final enactment.
