Bill Text: MN HF694 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Managed care and county-based purchasing plan requirements modified, provider payment rate data access provided, managed care and county-based plans serving state health care program enrollees required to annually provide data necessary to conduct cost-effectiveness audits, interagency agreement required between commissioner of human services and commissioner of commerce to conduct a cost-effectiveness audit, payments reduced to managed care plans, loss ratio for managed care and county-based purchasing plans established, additional performance withhold established, and work group on plan regulation and reporting established.
Sponsorship: Partisan Bill (Democrat 5)
Status: (Introduced - Dead) 2011-03-21 - Author added Gauthier [HF694 Detail]
Download: Minnesota-2011-HF694-Introduced.html
1.2relating to human services; modifying requirements for managed care
1.3and county-based purchasing plans; providing access to data on provider
1.4payment rates; requiring managed care and county-based plans serving state
1.5health care program enrollees to annually provide data necessary to conduct
1.6cost-effectiveness audits; requiring the commissioner of human services to
1.7enter into an interagency agreement with the commissioner of commerce to
1.8conduct a cost-effectiveness audit; reducing payments to managed care plans;
1.9establishing a loss ratio for managed care and county-based purchasing plans;
1.10establishing an additional performance withhold; establishing a work group on
1.11plan regulation and reporting; requiring a report; amending Minnesota Statutes
1.122010, sections 256B.69, subdivisions 5a, 5i, 6, 9, 9b, by adding subdivisions;
1.13256L.12, subdivision 9, by adding a subdivision.
1.14BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. Minnesota Statutes 2010, section 256B.69, subdivision 5a, is amended to
1.16read:
1.17 Subd. 5a. Managed care contracts. (a) Managed care contracts under this section
1.18and section256L.12 shall be entered into or renewed on a calendar year basis beginning
1.19January 1, 1996. Managed care contracts which were in effect on June 30, 1995, and set to
1.20renew on July 1, 1995, shall be renewed for the period July 1, 1995 through December
1.2131, 1995 at the same terms that were in effect on June 30, 1995. The commissioner may
1.22issue separate contracts with requirements specific to services to medical assistance
1.23recipients age 65 and older.
1.24 (b) A prepaid health plan providing covered health services for eligible persons
1.25pursuant to chapters 256B and 256L is responsible for complying with the terms of its
1.26contract with the commissioner. Requirements applicable to managed care programs
1.27under chapters 256B and 256L established after the effective date of a contract with the
1.28commissioner take effect when the contract is next issued or renewed.
2.1 (c) Effective for services rendered on or after January 1, 2003, the commissioner
2.2shall withhold five percent of managed care plan payments under this section and
2.3county-based purchasing plan payments under section256B.692 for the prepaid medical
2.4assistance program pending completion of performance targets. Each performance target
2.5must be quantifiable, objective, measurable, and reasonably attainable, except in the case
2.6of a performance target based on a federal or state law or rule. Criteria for assessment
2.7of each performance target must be outlined in writing prior to the contract effective
2.8date. The managed care plan must demonstrate, to the commissioner's satisfaction,
2.9that the data submitted regarding attainment of the performance target is accurate. The
2.10commissioner shall periodically change the administrative measures used as performance
2.11targets in order to improve plan performance across a broader range of administrative
2.12services. The performance targets must include measurement of plan efforts to contain
2.13spending on health care services and administrative activities. The commissioner may
2.14adopt plan-specific performance targets that take into account factors affecting only one
2.15plan, including characteristics of the plan's enrollee population. The withheld funds
2.16must be returned no sooner than July of the following year if performance targets in the
2.17contract are achieved. The commissioner may exclude special demonstration projects
2.18under subdivision 23.
2.19 (d) Effective for services rendered on or after January 1, 2009, through December
2.2031, 2009, the commissioner shall withhold three percent of managed care plan payments
2.21under this section and county-based purchasing plan payments under section256B.692
2.22for the prepaid medical assistance program. The withheld funds must be returned no
2.23sooner than July 1 and no later than July 31 of the following year. The commissioner may
2.24exclude special demonstration projects under subdivision 23.
2.25(e) Effective for services provided on or after January 1, 2010, the commissioner
2.26shall require that managed care plans use the assessment and authorization processes,
2.27forms, timelines, standards, documentation, and data reporting requirements, protocols,
2.28billing processes, and policies consistent with medical assistance fee-for-service or the
2.29Department of Human Services contract requirements consistent with medical assistance
2.30fee-for-service or the Department of Human Services contract requirements for all
2.31personal care assistance services under section256B.0659 .
2.32(f) Effective for services rendered on or after January 1, 2010, through December
2.3331, 2010, the commissioner shall withhold 4.5 percent of managed care plan payments
2.34under this section and county-based purchasing plan payments under section256B.692
2.35for the prepaid medical assistance program. The withheld funds must be returned no
3.1sooner than July 1 and no later than July 31 of the following year. The commissioner may
3.2exclude special demonstration projects under subdivision 23.
3.3(g) Effective for services rendered on or after January 1, 2011, the commissioner
3.4shall include as part of the performance targets described in paragraph (c) a reduction in
3.5the health plan's emergency room utilization rate for state health care program enrollees
3.6by a measurable rate of five percent from the plan's utilization rate for state health care
3.7program enrollees for the previous calendar year.
3.8The withheld funds must be returned no sooner than July 1 and no later than July 31
3.9of the following calendar year if the managed care plan demonstrates to the satisfaction of
3.10the commissioner that a reduction in the utilization rate was achieved.
3.11The withhold described in this paragraph shall continue for each consecutive
3.12contract period until the plan's emergency room utilization rate for state health care
3.13program enrollees is reduced by 25 percent of the plan's emergency room utilization
3.14rate for state health care program enrollees for calendar year 2009. Hospitals shall
3.15cooperate with the health plans in meeting this performance target and shall accept
3.16payment withholds that may be returned to the hospitals if the performance target is
3.17achieved. The commissioner shall structure the withhold so that the commissioner returns
3.18a portion of the withheld funds in amounts commensurate with achieved reductions in
3.19utilization less than the targeted amount. The withhold in this paragraph does not apply to
3.20county-based purchasing plans.
3.21(h) Effective for services rendered on or after January 1, 2011, through December
3.2231, 2011, the commissioner shall withhold 4.5 percent of managed care plan payments
3.23under this section and county-based purchasing plan payments under section256B.692
3.24for the prepaid medical assistance program. The withheld funds must be returned no
3.25sooner than July 1 and no later than July 31 of the following year. The commissioner may
3.26exclude special demonstration projects under subdivision 23.
3.27(i) Effective for services rendered on or after January 1, 2012, through December 31,
3.282012, the commissioner shall withhold 4.5 percent of managed care plan payments under
3.29this section and county-based purchasing plan payments under section256B.692 for the
3.30prepaid medical assistance program. The withheld funds must be returned no sooner than
3.31July 1 and no later than July 31 of the following year. The commissioner may exclude
3.32special demonstration projects under subdivision 23.
3.33(j) Effective for services rendered on or after January 1, 2013, through December 31,
3.342013, the commissioner shall withhold 4.5 percent of managed care plan payments under
3.35this section and county-based purchasing plan payments under section256B.692 for the
3.36prepaid medical assistance program. The withheld funds must be returned no sooner than
4.1July 1 and no later than July 31 of the following year. The commissioner may exclude
4.2special demonstration projects under subdivision 23.
4.3(k) Effective for services rendered on or after January 1, 2014, the commissioner
4.4shall withhold three percent of managed care plan payments under this section and
4.5county-based purchasing plan payments under section256B.692 for the prepaid medical
4.6assistance program. The withheld funds must be returned no sooner than July 1 and
4.7no later than July 31 of the following year. The commissioner may exclude special
4.8demonstration projects under subdivision 23.
4.9(l) A managed care plan or a county-based purchasing plan under section256B.692
4.10may include as admitted assets under section
62D.044 any amount withheld under this
4.11section that is reasonably expected to be returned.
4.12(m) Contracts between the commissioner and a prepaid health plan are exempt from
4.13the set-aside and preference provisions of section16C.16, subdivisions 6 , paragraph
4.14(a), and 7.
4.15(n) The return of the withhold under paragraphs (d), (f), and (h) to (k) is not subject
4.16to the requirements of paragraph (c).
4.17(o) Effective for services provided on or after January 1, 2012, the commissioner
4.18shall withhold ... percent of managed care plan payments under this section and
4.19county-based purchasing plan payments under section 256B.692 for the prepaid
4.20medical assistance program pending completion of outcome-based performance targets
4.21for enrollees with complex or chronic conditions. Criteria for assessment of each
4.22performance target must be outlined in writing by the commissioner prior to the contract
4.23effective date. The managed care or county-based purchasing plan must demonstrate,
4.24to the commissioner's satisfaction, that the data submitted regarding attainment of the
4.25performance target is accurate. The withheld funds must be returned no sooner than July
4.26of the following year if the performance targets in the contract are achieved.
4.27 Sec. 2. Minnesota Statutes 2010, section 256B.69, subdivision 5i, is amended to read:
4.28 Subd. 5i. Administrative expenses. (a) Managed care plan and county-based
4.29purchasing plan administrative costs for a prepaid health plan provided under this section
4.30or section256B.692 must not exceed by more than five percent that prepaid health plan's
4.31or county-based purchasing plan's actual calculated administrative spending for the
4.32previous calendar year as a percentage of total revenue. The penalty for exceeding this
4.33limit must be the amount of administrative spending in excess of 105 percent of the actual
4.34calculated amount. The commissioner may waive this penalty if the excess administrative
5.1spending is the result of unexpected shifts in enrollment or member needs or new program
5.2requirements.
5.3 (b) Expenses listed under section62D.12, subdivision 9a , clause (4), are not
5.4allowable administrative expenses for rate-setting purposes under this section, unless
5.5approved by the commissioner.
5.6(c) Managed care and county-based purchasing plans seeking to include an increase
5.7in administrative costs in their base payment rate must submit information on the
5.8allocation of administrative costs by category and subcategory and reasons for the increase
5.9in administrative costs, in the form and manner specified by the commissioner.
5.10(d) A managed care or county-based purchasing plan must meet a loss ratio of no
5.11less than 92.5 percent for each program it participates in under this section, calculated
5.12as specified in this paragraph. The loss ratio consists of a numerator consisting only
5.13of direct expenses of providing patient care to persons covered under each program,
5.14excluding administrative expenses. The denominator consists of the total amount paid by
5.15the commissioner to the plan, after subtraction of taxes and other mandatory government
5.16assessments directly attributable to the plan's participation as a provider in the program
5.17being reported on. Payments by the plan to unaffiliated third parties or to providers or
5.18other entities that own, are owned by, or under common control with the plan must
5.19be divided into patient care expenses and administrative expenses and included in the
5.20appropriate category for determination of the loss ratio.
5.21 Sec. 3. Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision
5.22to read:
5.23 Subd. 5l. Payment rate reduction. In addition to the reductions in subdivisions 5g
5.24and 5h, the total payment to managed care plans under the medical assistance program is
5.25reduced by 15 percent for services provided on or after January 1, 2012. This provision
5.26excludes payments for nursing home services, home and community-based waivers, and
5.27mental health services added as covered benefits after December 31, 2007. Managed care
5.28plans are prohibited from reducing provider payment rates to reflect this reduction, and the
5.29commissioner shall ensure that the provider payment rates in effect for the contract year
5.30beginning January 1, 2012, are not lower than the provider payment rates in effect for the
5.31contract year beginning January 1, 2011.
5.32 Sec. 4. Minnesota Statutes 2010, section 256B.69, subdivision 6, is amended to read:
5.33 Subd. 6. Service delivery. (a) Each demonstration provider shall be responsible for
5.34the health care coordination for eligible individuals. Demonstration providers:
6.1 (1) shall authorize and arrange for the provision of all needed health services
6.2including but not limited to the full range of services listed in sections256B.02,
6.3subdivision 8 , and
256B.0625 in order to ensure appropriate health care is delivered to
6.4enrollees. Notwithstanding section256B.0621 , demonstration providers that provide
6.5nursing home and community-based services under this section shall provide relocation
6.6service coordination to enrolled persons age 65 and over;
6.7 (2) shall accept the prospective, per capita payment from the commissioner in return
6.8for the provision of comprehensive and coordinated health care services for eligible
6.9individuals enrolled in the program;
6.10 (3)may shall seek to contract with federally qualified health centers and other health
6.11care and social service practitioners to provide coordinated health care and social services
6.12to enrollees from high-risk or medically underserved populations; and
6.13 (4) shall institute recipient grievance procedures according to the method established
6.14by the project, utilizing applicable requirements of chapter 62D. Disputes not resolved
6.15through this process shall be appealable to the commissioner as provided in subdivision 11.
6.16 (b) Demonstration providers must comply with the standards for claims settlement
6.17under section72A.201, subdivisions 4, 5, 7, and 8 , when contracting with other health
6.18care and social service practitioners to provide services to enrollees. A demonstration
6.19provider must pay a clean claim, as defined in Code of Federal Regulations, title 42,
6.20section 447.45(b), within 30 business days of the date of acceptance of the claim.
6.21 Sec. 5. Minnesota Statutes 2010, section 256B.69, subdivision 9, is amended to read:
6.22 Subd. 9. Reporting. (a) Each demonstration provider shall submit information as
6.23required by the commissioner, including data required for assessing client satisfaction,
6.24quality of care, cost, and utilization of services for purposes of project evaluation. The
6.25commissioner shall also develop methods of data reporting and collection in order to
6.26provide aggregate enrollee information on encounters and outcomes to determine access
6.27and quality assurance. Required information shall be specified before the commissioner
6.28contracts with a demonstration provider.
6.29(b) Aggregate nonpersonally identifiable health plan encounter data, aggregate
6.30spending data for major categories of service as reported to the commissioners of
6.31health and commerce under section62D.08 , subdivision 3, clause (a), and criteria for
6.32service authorization and service use are public data that the commissioner shall make
6.33available and use in public reports. The commissioner shall require each health plan and
6.34county-based purchasing plan to provide:
7.1(1) encounter data for each service provided, using standard codes and unit of
7.2service definitions set by the commissioner, in a form that the commissioner can report by
7.3age, eligibility groups, and health plan; and
7.4(2) criteria, written policies, and procedures required to be disclosed under section
7.562M.10
, subdivision 7, and Code of Federal Regulations, title 42, part
438.210 (b)(1), used
7.6for each type of service for which authorization is required.
7.7(c) The commissioner shall require managed care and county-based purchasing
7.8plans to report financial data separately by public and private lines of business.
7.9(d) The commissioner shall contract with an actuary to collect the financial,
7.10utilization, quality, and other data that managed care and county-based purchasing plans
7.11are required to submit under this section. The commissioner, in consultation with the
7.12actuary under contract, shall set uniform criteria, definitions, and standards for the data
7.13to be submitted, and shall require managed care and county-based purchasing plans to
7.14comply with these criteria, definitions, and standards when submitting data to the actuary
7.15under contract.
7.16 Sec. 6. Minnesota Statutes 2010, section 256B.69, subdivision 9b, is amended to read:
7.17 Subd. 9b. Reporting provider payment rates. (a) According to guidelines
7.18developed by the commissioner, in consultation with health care providers, managed care
7.19plans, and county-based purchasing plans, each managed care plan and county-based
7.20purchasing plan must annually provide to the commissioner information on reimbursement
7.21rates paid by the managed care plan under this section or the county-based purchasing
7.22plan under section256B.692 to providers and vendors for administrative services under
7.23contract with the plan.
7.24(b) Each managed care plan and county-based purchasing plan must annually
7.25provide to the commissioner, in the form and manner specified by the commissioner:
7.26(1) the amount of the payment made to the plan under this section that is paid to
7.27health care providers for patient care;
7.28(2) aggregate provider payment data, categorized by inpatient payments and
7.29outpatient payments, with the outpatient payments categorized by payments to primary
7.30care providers and nonprimary care providers;
7.31(3) the process by which increases or decreases in payments made to the plan
7.32under this section, that are based on actuarial analysis related to provider cost increases
7.33or decreases, or that are required by legislative action, are passed through to health care
7.34providers, categorized by payments to primary care providers and nonprimary care
7.35providers; and
8.1(4) specific information on the methodology used to establish provider
8.2reimbursement rates paid by the managed health care plan and county-based purchasing
8.3plan.
8.4Data provided to the commissioner under this subdivision must allow the
8.5commissioner to conduct the analyses required under paragraph (d).
8.6 (c) Data provided to the commissioner under this subdivision arenonpublic public
8.7data as defined in section13.02 .
8.8(d) The commissioner shall analyze data provided under this subdivision to assist the
8.9legislature in providing oversight and accountability related to expenditures under this
8.10section. The analysis must include information on payments to physicians, physician
8.11extenders, and hospitals, and may include other provider types as determined by the
8.12commissioner. The commissioner shall also array aggregate provider reimbursement rates
8.13by health plan, by primary care, and by nonprimary care categories. The commissioner
8.14shall report the analysis to the legislature annually, beginning December 15, 2010,
8.15and each December 15 thereafter. The commissioner shall also make this information
8.16available on the agency's Web site to managed care and county-based purchasing plans,
8.17health care providers, and the public.
8.18 Sec. 7. Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision
8.19to read:
8.20 Subd. 9c. Cost-effectiveness audit. (a) The commissioner shall require each
8.21managed care and county-based purchasing plan, as a condition of contract, to annually
8.22provide to the commissioner, in the form and manner specified by the commissioner, data
8.23necessary for the commissioner or another entity to conduct an audit to determine if the
8.24managed care or county-based purchasing plan provides covered services to medical
8.25assistance and MinnesotaCare program enrollees in a cost-effective and efficient manner,
8.26relative to the capitation payments received and the performance of health plan companies
8.27serving private sector enrollees. Plans shall submit to the commissioner, by July 1 of each
8.28year, data for the preceding contract year.
8.29(b) The data collected must include, but is not limited to:
8.30(1) expenditures by category, including claims and administrative costs by
8.31subcategory;
8.32(2) revenues by category, including capitation payments by enrollee category, return
8.33on investment, and revenues from cost-sharing;
8.34(3) provider payments by provider type;
9.1(4) per-enrollee expenditures and utilization by age, gender, region, and eligibility
9.2basis of the enrollee;
9.3(5) net returns for public and private sector products and contributions to reserves;
9.4(6) quality of care measures, including information on the achievement of
9.5performance targets; and
9.6(7) other data the commissioner determines is necessary to complete a
9.7cost-effectiveness audit.
9.8(c) Data provided to the commissioner under this subdivision are public data as
9.9defined under section 13.02.
9.10(d) The commissioner shall enter into an interagency agreement with the
9.11commissioner of commerce to conduct a cost-effectiveness audit of each managed care and
9.12county-based purchasing plan, using the data submitted by each plan under paragraph (b).
9.13The audit must evaluate the extent to which managed care and county-based purchasing
9.14plans provide covered services to medical assistance and MinnesotaCare program
9.15enrollees in a cost-effective and efficient manner, relative to capitation payments received
9.16and the performance of health plan companies providing coverage to private sector
9.17enrollees. In conducting the audit, the commissioner shall consider differences between
9.18public and private sector coverage, including but not limited to differences in benefit sets,
9.19enrollee characteristics, and the use of underwriting. The commissioner of commerce
9.20shall present audit findings to the commissioner of human services and the legislature by
9.21November 1, 2011, and shall include with these findings recommendations for any changes
9.22in capitation rates or other legislative or administrative changes necessary to improve
9.23cost-effectiveness and efficiency of individual managed care and county-based purchasing
9.24plans, and the prepaid medical assistance and prepaid MinnesotaCare programs.
9.25EFFECTIVE DATE.This section is effective the day following final enactment.
9.26 Sec. 8. Minnesota Statutes 2010, section 256L.12, subdivision 9, is amended to read:
9.27 Subd. 9. Rate setting; performance withholds. (a) Rates will be prospective,
9.28per capita, where possible. The commissioner may allow health plans to arrange for
9.29inpatient hospital services on a risk or nonrisk basis. The commissioner shall consult with
9.30an independent actuary to determine appropriate rates.
9.31 (b) For services rendered on or after January 1, 2004, the commissioner shall
9.32withhold five percent of managed care plan payments and county-based purchasing
9.33plan payments under this section pending completion of performance targets. Each
9.34performance target must be quantifiable, objective, measurable, and reasonably attainable,
9.35except in the case of a performance target based on a federal or state law or rule. Criteria
10.1for assessment of each performance target must be outlined in writing prior to the
10.2contract effective date. The managed care plan must demonstrate, to the commissioner's
10.3satisfaction, that the data submitted regarding attainment of the performance target is
10.4accurate. The commissioner shall periodically change the administrative measures used
10.5as performance targets in order to improve plan performance across a broader range of
10.6administrative services. The performance targets must include measurement of plan
10.7efforts to contain spending on health care services and administrative activities. The
10.8commissioner may adopt plan-specific performance targets that take into account factors
10.9affecting only one plan, such as characteristics of the plan's enrollee population. The
10.10withheld funds must be returned no sooner than July 1 and no later than July 31 of the
10.11following calendar year if performance targets in the contract are achieved.
10.12(c) For services rendered on or after January 1, 2011, the commissioner shall
10.13withhold an additional three percent of managed care plan or county-based purchasing
10.14plan payments under this section. The withheld funds must be returned no sooner than
10.15July 1 and no later than July 31 of the following calendar year. The return of the withhold
10.16under this paragraph is not subject to the requirements of paragraph (b).
10.17(d) Effective for services rendered on or after January 1, 2011, the commissioner
10.18shall include as part of the performance targets described in paragraph (b) a reduction in
10.19the plan's emergency room utilization rate for state health care program enrollees by a
10.20measurable rate of five percent from the plan's utilization rate for the previous calendar
10.21year.
10.22The withheld funds must be returned no sooner than July 1 and no later than July 31
10.23of the following calendar year if the managed care plan demonstrates to the satisfaction of
10.24the commissioner that a reduction in the utilization rate was achieved.
10.25The withhold described in this paragraph shall continue for each consecutive
10.26contract period until the plan's emergency room utilization rate for state health care
10.27program enrollees is reduced by 25 percent of the plan's emergency room utilization rate
10.28for state health care program enrollees for calendar year 2009. Hospitals shall cooperate
10.29with the health plans in meeting this performance target and shall accept payment
10.30withholds that may be returned to the hospitals if the performance target is achieved. The
10.31commissioner shall structure the withhold so that the commissioner returns a portion of
10.32the withheld funds in amounts commensurate with achieved reductions in utilization less
10.33than the targeted amount. The withhold described in this paragraph does not apply to
10.34county-based purchasing plans.
11.1(e) A managed care plan or a county-based purchasing plan under section256B.692
11.2may include as admitted assets under section
62D.044 any amount withheld under this
11.3section that is reasonably expected to be returned.
11.4(f) Effective for services provided on or after January 1, 2012, the commissioner
11.5shall withhold ... percent of managed care plan and county-based purchasing plan
11.6payments for the prepaid MinnesotaCare program pending completion of outcome-based
11.7performance targets for enrollees with complex or chronic conditions. Criteria for
11.8assessment of each performance target must be outlined in writing prior to the contract
11.9effective date. The managed care or county-based purchasing plan must demonstrate,
11.10to the commissioner's satisfaction, that the data submitted regarding attainment of the
11.11performance target is accurate. The withheld funds must be returned no sooner than July
11.12of the following year if the performance targets in the contract are achieved.
11.13 Sec. 9. Minnesota Statutes 2010, section 256L.12, is amended by adding a subdivision
11.14to read:
11.15 Subd. 9c. Rate reduction. In addition to the reductions in subdivisions 9a and 9b,
11.16the total payment to managed care plans under the MinnesotaCare program is reduced
11.17by 15 percent for services provided on or after January 1, 2012. This provision excludes
11.18payments for mental health services added as covered benefits after December 31, 2007.
11.19Managed care plans are prohibited from reducing provider payment rates to reflect this
11.20reduction, and the commissioner shall ensure that the provider payment rates in effect for
11.21the contract year beginning January 1, 2012, are not lower than the provider payment rates
11.22in effect for the contract year beginning January 1, 2011.
11.23 Sec. 10. WORK GROUP ON PLAN REGULATION AND REPORTING.
11.24The commissioner of human services shall convene a work group to study and make
11.25recommendations on managed care plan and county-based purchasing plan regulatory and
11.26reporting requirements under Minnesota Statutes, section 256B.69. The work group
11.27shall consist of representatives of managed care and county-based purchasing plans,
11.28consumers, and health care providers. The work group shall also include two members
11.29of the Minnesota house of representatives appointed by the speaker of the house and
11.30two members of the Minnesota senate appointed by the Subcommittee on Committees
11.31of the senate Committee on Rules and Administration, with no more than one member
11.32of each body being from the majority party. The work group shall recommend to the
11.33legislature and the commissioner of human services, by January 15, 2012, any changes in
11.34plan regulatory and reporting requirements necessary to:
12.1(1) provide state agencies and the legislature with the information necessary to
12.2monitor plan performance and efficiency;
12.3(2) allow state agencies and the legislature to ensure that capitation rates and plan
12.4administrative costs are reasonable and consistent with efficient management by the plan;
12.5(3) avoid unnecessary duplication in reporting; and
12.6(4) reduce plan administrative expenses.
1.3and county-based purchasing plans; providing access to data on provider
1.4payment rates; requiring managed care and county-based plans serving state
1.5health care program enrollees to annually provide data necessary to conduct
1.6cost-effectiveness audits; requiring the commissioner of human services to
1.7enter into an interagency agreement with the commissioner of commerce to
1.8conduct a cost-effectiveness audit; reducing payments to managed care plans;
1.9establishing a loss ratio for managed care and county-based purchasing plans;
1.10establishing an additional performance withhold; establishing a work group on
1.11plan regulation and reporting; requiring a report; amending Minnesota Statutes
1.122010, sections 256B.69, subdivisions 5a, 5i, 6, 9, 9b, by adding subdivisions;
1.13256L.12, subdivision 9, by adding a subdivision.
1.14BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. Minnesota Statutes 2010, section 256B.69, subdivision 5a, is amended to
1.16read:
1.17 Subd. 5a. Managed care contracts. (a) Managed care contracts under this section
1.18and section
1.19January 1, 1996. Managed care contracts which were in effect on June 30, 1995, and set to
1.20renew on July 1, 1995, shall be renewed for the period July 1, 1995 through December
1.2131, 1995 at the same terms that were in effect on June 30, 1995. The commissioner may
1.22issue separate contracts with requirements specific to services to medical assistance
1.23recipients age 65 and older.
1.24 (b) A prepaid health plan providing covered health services for eligible persons
1.25pursuant to chapters 256B and 256L is responsible for complying with the terms of its
1.26contract with the commissioner. Requirements applicable to managed care programs
1.27under chapters 256B and 256L established after the effective date of a contract with the
1.28commissioner take effect when the contract is next issued or renewed.
2.1 (c) Effective for services rendered on or after January 1, 2003, the commissioner
2.2shall withhold five percent of managed care plan payments under this section and
2.3county-based purchasing plan payments under section
2.4assistance program pending completion of performance targets. Each performance target
2.5must be quantifiable, objective, measurable, and reasonably attainable, except in the case
2.6of a performance target based on a federal or state law or rule. Criteria for assessment
2.7of each performance target must be outlined in writing prior to the contract effective
2.8date. The managed care plan must demonstrate, to the commissioner's satisfaction,
2.9that the data submitted regarding attainment of the performance target is accurate. The
2.10commissioner shall periodically change the administrative measures used as performance
2.11targets in order to improve plan performance across a broader range of administrative
2.12services. The performance targets must include measurement of plan efforts to contain
2.13spending on health care services and administrative activities. The commissioner may
2.14adopt plan-specific performance targets that take into account factors affecting only one
2.15plan, including characteristics of the plan's enrollee population. The withheld funds
2.16must be returned no sooner than July of the following year if performance targets in the
2.17contract are achieved. The commissioner may exclude special demonstration projects
2.18under subdivision 23.
2.19 (d) Effective for services rendered on or after January 1, 2009, through December
2.2031, 2009, the commissioner shall withhold three percent of managed care plan payments
2.21under this section and county-based purchasing plan payments under section
2.23sooner than July 1 and no later than July 31 of the following year. The commissioner may
2.24exclude special demonstration projects under subdivision 23.
2.25(e) Effective for services provided on or after January 1, 2010, the commissioner
2.26shall require that managed care plans use the assessment and authorization processes,
2.27forms, timelines, standards, documentation, and data reporting requirements, protocols,
2.28billing processes, and policies consistent with medical assistance fee-for-service or the
2.29Department of Human Services contract requirements consistent with medical assistance
2.30fee-for-service or the Department of Human Services contract requirements for all
2.31personal care assistance services under section
2.32(f) Effective for services rendered on or after January 1, 2010, through December
2.3331, 2010, the commissioner shall withhold 4.5 percent of managed care plan payments
2.34under this section and county-based purchasing plan payments under section
3.1sooner than July 1 and no later than July 31 of the following year. The commissioner may
3.2exclude special demonstration projects under subdivision 23.
3.3(g) Effective for services rendered on or after January 1, 2011, the commissioner
3.4shall include as part of the performance targets described in paragraph (c) a reduction in
3.5the health plan's emergency room utilization rate for state health care program enrollees
3.6by a measurable rate of five percent from the plan's utilization rate for state health care
3.7program enrollees for the previous calendar year.
3.8The withheld funds must be returned no sooner than July 1 and no later than July 31
3.9of the following calendar year if the managed care plan demonstrates to the satisfaction of
3.10the commissioner that a reduction in the utilization rate was achieved.
3.11The withhold described in this paragraph shall continue for each consecutive
3.12contract period until the plan's emergency room utilization rate for state health care
3.13program enrollees is reduced by 25 percent of the plan's emergency room utilization
3.14rate for state health care program enrollees for calendar year 2009. Hospitals shall
3.15cooperate with the health plans in meeting this performance target and shall accept
3.16payment withholds that may be returned to the hospitals if the performance target is
3.17achieved. The commissioner shall structure the withhold so that the commissioner returns
3.18a portion of the withheld funds in amounts commensurate with achieved reductions in
3.19utilization less than the targeted amount. The withhold in this paragraph does not apply to
3.20county-based purchasing plans.
3.21(h) Effective for services rendered on or after January 1, 2011, through December
3.2231, 2011, the commissioner shall withhold 4.5 percent of managed care plan payments
3.23under this section and county-based purchasing plan payments under section
3.25sooner than July 1 and no later than July 31 of the following year. The commissioner may
3.26exclude special demonstration projects under subdivision 23.
3.27(i) Effective for services rendered on or after January 1, 2012, through December 31,
3.282012, the commissioner shall withhold 4.5 percent of managed care plan payments under
3.29this section and county-based purchasing plan payments under section
3.30prepaid medical assistance program. The withheld funds must be returned no sooner than
3.31July 1 and no later than July 31 of the following year. The commissioner may exclude
3.32special demonstration projects under subdivision 23.
3.33(j) Effective for services rendered on or after January 1, 2013, through December 31,
3.342013, the commissioner shall withhold 4.5 percent of managed care plan payments under
3.35this section and county-based purchasing plan payments under section
3.36prepaid medical assistance program. The withheld funds must be returned no sooner than
4.1July 1 and no later than July 31 of the following year. The commissioner may exclude
4.2special demonstration projects under subdivision 23.
4.3(k) Effective for services rendered on or after January 1, 2014, the commissioner
4.4shall withhold three percent of managed care plan payments under this section and
4.5county-based purchasing plan payments under section
4.6assistance program. The withheld funds must be returned no sooner than July 1 and
4.7no later than July 31 of the following year. The commissioner may exclude special
4.8demonstration projects under subdivision 23.
4.9(l) A managed care plan or a county-based purchasing plan under section
4.11section that is reasonably expected to be returned.
4.12(m) Contracts between the commissioner and a prepaid health plan are exempt from
4.13the set-aside and preference provisions of section
4.14(a), and 7.
4.15(n) The return of the withhold under paragraphs (d), (f), and (h) to (k) is not subject
4.16to the requirements of paragraph (c).
4.17(o) Effective for services provided on or after January 1, 2012, the commissioner
4.18shall withhold ... percent of managed care plan payments under this section and
4.19county-based purchasing plan payments under section 256B.692 for the prepaid
4.20medical assistance program pending completion of outcome-based performance targets
4.21for enrollees with complex or chronic conditions. Criteria for assessment of each
4.22performance target must be outlined in writing by the commissioner prior to the contract
4.23effective date. The managed care or county-based purchasing plan must demonstrate,
4.24to the commissioner's satisfaction, that the data submitted regarding attainment of the
4.25performance target is accurate. The withheld funds must be returned no sooner than July
4.26of the following year if the performance targets in the contract are achieved.
4.27 Sec. 2. Minnesota Statutes 2010, section 256B.69, subdivision 5i, is amended to read:
4.28 Subd. 5i. Administrative expenses. (a) Managed care plan and county-based
4.29purchasing plan administrative costs for a prepaid health plan provided under this section
4.30or section
4.31or county-based purchasing plan's actual calculated administrative spending for the
4.32previous calendar year as a percentage of total revenue. The penalty for exceeding this
4.33limit must be the amount of administrative spending in excess of 105 percent of the actual
4.34calculated amount. The commissioner may waive this penalty if the excess administrative
5.1spending is the result of unexpected shifts in enrollment or member needs or new program
5.2requirements.
5.3 (b) Expenses listed under section
5.4allowable administrative expenses for rate-setting purposes under this section, unless
5.5approved by the commissioner.
5.6(c) Managed care and county-based purchasing plans seeking to include an increase
5.7in administrative costs in their base payment rate must submit information on the
5.8allocation of administrative costs by category and subcategory and reasons for the increase
5.9in administrative costs, in the form and manner specified by the commissioner.
5.10(d) A managed care or county-based purchasing plan must meet a loss ratio of no
5.11less than 92.5 percent for each program it participates in under this section, calculated
5.12as specified in this paragraph. The loss ratio consists of a numerator consisting only
5.13of direct expenses of providing patient care to persons covered under each program,
5.14excluding administrative expenses. The denominator consists of the total amount paid by
5.15the commissioner to the plan, after subtraction of taxes and other mandatory government
5.16assessments directly attributable to the plan's participation as a provider in the program
5.17being reported on. Payments by the plan to unaffiliated third parties or to providers or
5.18other entities that own, are owned by, or under common control with the plan must
5.19be divided into patient care expenses and administrative expenses and included in the
5.20appropriate category for determination of the loss ratio.
5.21 Sec. 3. Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision
5.22to read:
5.23 Subd. 5l. Payment rate reduction. In addition to the reductions in subdivisions 5g
5.24and 5h, the total payment to managed care plans under the medical assistance program is
5.25reduced by 15 percent for services provided on or after January 1, 2012. This provision
5.26excludes payments for nursing home services, home and community-based waivers, and
5.27mental health services added as covered benefits after December 31, 2007. Managed care
5.28plans are prohibited from reducing provider payment rates to reflect this reduction, and the
5.29commissioner shall ensure that the provider payment rates in effect for the contract year
5.30beginning January 1, 2012, are not lower than the provider payment rates in effect for the
5.31contract year beginning January 1, 2011.
5.32 Sec. 4. Minnesota Statutes 2010, section 256B.69, subdivision 6, is amended to read:
5.33 Subd. 6. Service delivery. (a) Each demonstration provider shall be responsible for
5.34the health care coordination for eligible individuals. Demonstration providers:
6.1 (1) shall authorize and arrange for the provision of all needed health services
6.2including but not limited to the full range of services listed in sections
6.3subdivision 8
6.4enrollees. Notwithstanding section
6.5nursing home and community-based services under this section shall provide relocation
6.6service coordination to enrolled persons age 65 and over;
6.7 (2) shall accept the prospective, per capita payment from the commissioner in return
6.8for the provision of comprehensive and coordinated health care services for eligible
6.9individuals enrolled in the program;
6.10 (3)
6.11care and social service practitioners to provide coordinated health care and social services
6.12to enrollees from high-risk or medically underserved populations; and
6.13 (4) shall institute recipient grievance procedures according to the method established
6.14by the project, utilizing applicable requirements of chapter 62D. Disputes not resolved
6.15through this process shall be appealable to the commissioner as provided in subdivision 11.
6.16 (b) Demonstration providers must comply with the standards for claims settlement
6.17under section
6.18care and social service practitioners to provide services to enrollees. A demonstration
6.19provider must pay a clean claim, as defined in Code of Federal Regulations, title 42,
6.20section 447.45(b), within 30 business days of the date of acceptance of the claim.
6.21 Sec. 5. Minnesota Statutes 2010, section 256B.69, subdivision 9, is amended to read:
6.22 Subd. 9. Reporting. (a) Each demonstration provider shall submit information as
6.23required by the commissioner, including data required for assessing client satisfaction,
6.24quality of care, cost, and utilization of services for purposes of project evaluation. The
6.25commissioner shall also develop methods of data reporting and collection in order to
6.26provide aggregate enrollee information on encounters and outcomes to determine access
6.27and quality assurance. Required information shall be specified before the commissioner
6.28contracts with a demonstration provider.
6.29(b) Aggregate nonpersonally identifiable health plan encounter data, aggregate
6.30spending data for major categories of service as reported to the commissioners of
6.31health and commerce under section
6.32service authorization and service use are public data that the commissioner shall make
6.33available and use in public reports. The commissioner shall require each health plan and
6.34county-based purchasing plan to provide:
7.1(1) encounter data for each service provided, using standard codes and unit of
7.2service definitions set by the commissioner, in a form that the commissioner can report by
7.3age, eligibility groups, and health plan; and
7.4(2) criteria, written policies, and procedures required to be disclosed under section
7.6for each type of service for which authorization is required.
7.7(c) The commissioner shall require managed care and county-based purchasing
7.8plans to report financial data separately by public and private lines of business.
7.9(d) The commissioner shall contract with an actuary to collect the financial,
7.10utilization, quality, and other data that managed care and county-based purchasing plans
7.11are required to submit under this section. The commissioner, in consultation with the
7.12actuary under contract, shall set uniform criteria, definitions, and standards for the data
7.13to be submitted, and shall require managed care and county-based purchasing plans to
7.14comply with these criteria, definitions, and standards when submitting data to the actuary
7.15under contract.
7.16 Sec. 6. Minnesota Statutes 2010, section 256B.69, subdivision 9b, is amended to read:
7.17 Subd. 9b. Reporting provider payment rates. (a) According to guidelines
7.18developed by the commissioner, in consultation with health care providers, managed care
7.19plans, and county-based purchasing plans, each managed care plan and county-based
7.20purchasing plan must annually provide to the commissioner information on reimbursement
7.21rates paid by the managed care plan under this section or the county-based purchasing
7.22plan under section
7.23contract with the plan.
7.24(b) Each managed care plan and county-based purchasing plan must annually
7.25provide to the commissioner, in the form and manner specified by the commissioner:
7.26(1) the amount of the payment made to the plan under this section that is paid to
7.27health care providers for patient care;
7.28(2) aggregate provider payment data, categorized by inpatient payments and
7.29outpatient payments, with the outpatient payments categorized by payments to primary
7.30care providers and nonprimary care providers;
7.31(3) the process by which increases or decreases in payments made to the plan
7.32under this section, that are based on actuarial analysis related to provider cost increases
7.33or decreases, or that are required by legislative action, are passed through to health care
7.34providers, categorized by payments to primary care providers and nonprimary care
7.35providers; and
8.1(4) specific information on the methodology used to establish provider
8.2reimbursement rates paid by the managed health care plan and county-based purchasing
8.3plan.
8.4Data provided to the commissioner under this subdivision must allow the
8.5commissioner to conduct the analyses required under paragraph (d).
8.6 (c) Data provided to the commissioner under this subdivision are
8.7data as defined in section
8.8(d) The commissioner shall analyze data provided under this subdivision to assist the
8.9legislature in providing oversight and accountability related to expenditures under this
8.10section. The analysis must include information on payments to physicians, physician
8.11extenders, and hospitals, and may include other provider types as determined by the
8.12commissioner. The commissioner shall also array aggregate provider reimbursement rates
8.13by health plan, by primary care, and by nonprimary care categories. The commissioner
8.14shall report the analysis to the legislature annually, beginning December 15, 2010,
8.15and each December 15 thereafter. The commissioner shall also make this information
8.16available on the agency's Web site to managed care and county-based purchasing plans,
8.17health care providers, and the public.
8.18 Sec. 7. Minnesota Statutes 2010, section 256B.69, is amended by adding a subdivision
8.19to read:
8.20 Subd. 9c. Cost-effectiveness audit. (a) The commissioner shall require each
8.21managed care and county-based purchasing plan, as a condition of contract, to annually
8.22provide to the commissioner, in the form and manner specified by the commissioner, data
8.23necessary for the commissioner or another entity to conduct an audit to determine if the
8.24managed care or county-based purchasing plan provides covered services to medical
8.25assistance and MinnesotaCare program enrollees in a cost-effective and efficient manner,
8.26relative to the capitation payments received and the performance of health plan companies
8.27serving private sector enrollees. Plans shall submit to the commissioner, by July 1 of each
8.28year, data for the preceding contract year.
8.29(b) The data collected must include, but is not limited to:
8.30(1) expenditures by category, including claims and administrative costs by
8.31subcategory;
8.32(2) revenues by category, including capitation payments by enrollee category, return
8.33on investment, and revenues from cost-sharing;
8.34(3) provider payments by provider type;
9.1(4) per-enrollee expenditures and utilization by age, gender, region, and eligibility
9.2basis of the enrollee;
9.3(5) net returns for public and private sector products and contributions to reserves;
9.4(6) quality of care measures, including information on the achievement of
9.5performance targets; and
9.6(7) other data the commissioner determines is necessary to complete a
9.7cost-effectiveness audit.
9.8(c) Data provided to the commissioner under this subdivision are public data as
9.9defined under section 13.02.
9.10(d) The commissioner shall enter into an interagency agreement with the
9.11commissioner of commerce to conduct a cost-effectiveness audit of each managed care and
9.12county-based purchasing plan, using the data submitted by each plan under paragraph (b).
9.13The audit must evaluate the extent to which managed care and county-based purchasing
9.14plans provide covered services to medical assistance and MinnesotaCare program
9.15enrollees in a cost-effective and efficient manner, relative to capitation payments received
9.16and the performance of health plan companies providing coverage to private sector
9.17enrollees. In conducting the audit, the commissioner shall consider differences between
9.18public and private sector coverage, including but not limited to differences in benefit sets,
9.19enrollee characteristics, and the use of underwriting. The commissioner of commerce
9.20shall present audit findings to the commissioner of human services and the legislature by
9.21November 1, 2011, and shall include with these findings recommendations for any changes
9.22in capitation rates or other legislative or administrative changes necessary to improve
9.23cost-effectiveness and efficiency of individual managed care and county-based purchasing
9.24plans, and the prepaid medical assistance and prepaid MinnesotaCare programs.
9.25EFFECTIVE DATE.This section is effective the day following final enactment.
9.26 Sec. 8. Minnesota Statutes 2010, section 256L.12, subdivision 9, is amended to read:
9.27 Subd. 9. Rate setting; performance withholds. (a) Rates will be prospective,
9.28per capita, where possible. The commissioner may allow health plans to arrange for
9.29inpatient hospital services on a risk or nonrisk basis. The commissioner shall consult with
9.30an independent actuary to determine appropriate rates.
9.31 (b) For services rendered on or after January 1, 2004, the commissioner shall
9.32withhold five percent of managed care plan payments and county-based purchasing
9.33plan payments under this section pending completion of performance targets. Each
9.34performance target must be quantifiable, objective, measurable, and reasonably attainable,
9.35except in the case of a performance target based on a federal or state law or rule. Criteria
10.1for assessment of each performance target must be outlined in writing prior to the
10.2contract effective date. The managed care plan must demonstrate, to the commissioner's
10.3satisfaction, that the data submitted regarding attainment of the performance target is
10.4accurate. The commissioner shall periodically change the administrative measures used
10.5as performance targets in order to improve plan performance across a broader range of
10.6administrative services. The performance targets must include measurement of plan
10.7efforts to contain spending on health care services and administrative activities. The
10.8commissioner may adopt plan-specific performance targets that take into account factors
10.9affecting only one plan, such as characteristics of the plan's enrollee population. The
10.10withheld funds must be returned no sooner than July 1 and no later than July 31 of the
10.11following calendar year if performance targets in the contract are achieved.
10.12(c) For services rendered on or after January 1, 2011, the commissioner shall
10.13withhold an additional three percent of managed care plan or county-based purchasing
10.14plan payments under this section. The withheld funds must be returned no sooner than
10.15July 1 and no later than July 31 of the following calendar year. The return of the withhold
10.16under this paragraph is not subject to the requirements of paragraph (b).
10.17(d) Effective for services rendered on or after January 1, 2011, the commissioner
10.18shall include as part of the performance targets described in paragraph (b) a reduction in
10.19the plan's emergency room utilization rate for state health care program enrollees by a
10.20measurable rate of five percent from the plan's utilization rate for the previous calendar
10.21year.
10.22The withheld funds must be returned no sooner than July 1 and no later than July 31
10.23of the following calendar year if the managed care plan demonstrates to the satisfaction of
10.24the commissioner that a reduction in the utilization rate was achieved.
10.25The withhold described in this paragraph shall continue for each consecutive
10.26contract period until the plan's emergency room utilization rate for state health care
10.27program enrollees is reduced by 25 percent of the plan's emergency room utilization rate
10.28for state health care program enrollees for calendar year 2009. Hospitals shall cooperate
10.29with the health plans in meeting this performance target and shall accept payment
10.30withholds that may be returned to the hospitals if the performance target is achieved. The
10.31commissioner shall structure the withhold so that the commissioner returns a portion of
10.32the withheld funds in amounts commensurate with achieved reductions in utilization less
10.33than the targeted amount. The withhold described in this paragraph does not apply to
10.34county-based purchasing plans.
11.1(e) A managed care plan or a county-based purchasing plan under section
11.3section that is reasonably expected to be returned.
11.4(f) Effective for services provided on or after January 1, 2012, the commissioner
11.5shall withhold ... percent of managed care plan and county-based purchasing plan
11.6payments for the prepaid MinnesotaCare program pending completion of outcome-based
11.7performance targets for enrollees with complex or chronic conditions. Criteria for
11.8assessment of each performance target must be outlined in writing prior to the contract
11.9effective date. The managed care or county-based purchasing plan must demonstrate,
11.10to the commissioner's satisfaction, that the data submitted regarding attainment of the
11.11performance target is accurate. The withheld funds must be returned no sooner than July
11.12of the following year if the performance targets in the contract are achieved.
11.13 Sec. 9. Minnesota Statutes 2010, section 256L.12, is amended by adding a subdivision
11.14to read:
11.15 Subd. 9c. Rate reduction. In addition to the reductions in subdivisions 9a and 9b,
11.16the total payment to managed care plans under the MinnesotaCare program is reduced
11.17by 15 percent for services provided on or after January 1, 2012. This provision excludes
11.18payments for mental health services added as covered benefits after December 31, 2007.
11.19Managed care plans are prohibited from reducing provider payment rates to reflect this
11.20reduction, and the commissioner shall ensure that the provider payment rates in effect for
11.21the contract year beginning January 1, 2012, are not lower than the provider payment rates
11.22in effect for the contract year beginning January 1, 2011.
11.23 Sec. 10. WORK GROUP ON PLAN REGULATION AND REPORTING.
11.24The commissioner of human services shall convene a work group to study and make
11.25recommendations on managed care plan and county-based purchasing plan regulatory and
11.26reporting requirements under Minnesota Statutes, section 256B.69. The work group
11.27shall consist of representatives of managed care and county-based purchasing plans,
11.28consumers, and health care providers. The work group shall also include two members
11.29of the Minnesota house of representatives appointed by the speaker of the house and
11.30two members of the Minnesota senate appointed by the Subcommittee on Committees
11.31of the senate Committee on Rules and Administration, with no more than one member
11.32of each body being from the majority party. The work group shall recommend to the
11.33legislature and the commissioner of human services, by January 15, 2012, any changes in
11.34plan regulatory and reporting requirements necessary to:
12.1(1) provide state agencies and the legislature with the information necessary to
12.2monitor plan performance and efficiency;
12.3(2) allow state agencies and the legislature to ensure that capitation rates and plan
12.4administrative costs are reasonable and consistent with efficient management by the plan;
12.5(3) avoid unnecessary duplication in reporting; and
12.6(4) reduce plan administrative expenses.
