Bill Text: MN SF720 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Prepaid health plans administrative expenses medical loss ratio requirement establishment
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2011-03-10 - Referred to Health and Human Services [SF720 Detail]
Download: Minnesota-2011-SF720-Introduced.html
1.2relating to human services; establishing medical loss ratio requirement for
1.3prepaid medical assistance program;amending Minnesota Statutes 2010, section
1.4256B.69, subdivision 5i.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 256B.69, subdivision 5i, is amended to
1.7read:
1.8 Subd. 5i. Administrative expenses. (a) Managed care plan and county-based
1.9purchasing plan administrative costs for a prepaid health plan provided under this section
1.10or section256B.692 must not exceed by more than five percent that prepaid health plan's
1.11or county-based purchasing plan's actual calculated administrative spending for the
1.12previous calendar year as a percentage of total revenue. The penalty for exceeding this
1.13limit must be the amount of administrative spending in excess of 105 percent of the actual
1.14calculated amount. The commissioner may waive this penalty if the excess administrative
1.15spending is the result of unexpected shifts in enrollment or member needs or new program
1.16requirements.
1.17 (b) Expenses listed under section62D.12, subdivision 9a , clause (4), are not
1.18allowable administrative expenses for rate-setting purposes under this section, unless
1.19approved by the commissioner.
1.20(c) A prepaid health plan must meet a medical loss ratio of no less than 90 percent,
1.21calculated as specified in this paragraph. The medical loss ratio consists of a numerator
1.22consisting only of direct expenses of providing patient care to persons covered under
1.23the program, excluding administrative expenses. The denominator consists of the total
1.24amount paid by the commissioner to the prepaid health plan, after subtraction of taxes
2.1and other mandatory government assessments directly attributable to the prepaid health
2.2plan's participation as a provider in the program being reported on. Payments by the
2.3prepaid health plan to unaffiliated third parties or to providers or other entities that own,
2.4are owned by, or are under common control with the prepaid health plan must be divided
2.5into patient care expenses and administrative expenses and included in the appropriate
2.6category for determination of the medical loss ratio.
2.7(d) A bid submitted by a prepaid health plan may include a provision obligating the
2.8bidder to provide extra services specified in the bid if necessary to meet the required
2.9medical loss ratio, to the extent that the medical loss ratio would otherwise exceed 90
2.10percent as the year progresses.
1.3prepaid medical assistance program;amending Minnesota Statutes 2010, section
1.4256B.69, subdivision 5i.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 256B.69, subdivision 5i, is amended to
1.7read:
1.8 Subd. 5i. Administrative expenses. (a) Managed care plan and county-based
1.9purchasing plan administrative costs for a prepaid health plan provided under this section
1.10or section
1.11or county-based purchasing plan's actual calculated administrative spending for the
1.12previous calendar year as a percentage of total revenue. The penalty for exceeding this
1.13limit must be the amount of administrative spending in excess of 105 percent of the actual
1.14calculated amount. The commissioner may waive this penalty if the excess administrative
1.15spending is the result of unexpected shifts in enrollment or member needs or new program
1.16requirements.
1.17 (b) Expenses listed under section
1.18allowable administrative expenses for rate-setting purposes under this section, unless
1.19approved by the commissioner.
1.20(c) A prepaid health plan must meet a medical loss ratio of no less than 90 percent,
1.21calculated as specified in this paragraph. The medical loss ratio consists of a numerator
1.22consisting only of direct expenses of providing patient care to persons covered under
1.23the program, excluding administrative expenses. The denominator consists of the total
1.24amount paid by the commissioner to the prepaid health plan, after subtraction of taxes
2.1and other mandatory government assessments directly attributable to the prepaid health
2.2plan's participation as a provider in the program being reported on. Payments by the
2.3prepaid health plan to unaffiliated third parties or to providers or other entities that own,
2.4are owned by, or are under common control with the prepaid health plan must be divided
2.5into patient care expenses and administrative expenses and included in the appropriate
2.6category for determination of the medical loss ratio.
2.7(d) A bid submitted by a prepaid health plan may include a provision obligating the
2.8bidder to provide extra services specified in the bid if necessary to meet the required
2.9medical loss ratio, to the extent that the medical loss ratio would otherwise exceed 90
2.10percent as the year progresses.
