Journal of the House - 98th Day - Wednesday, April 2, 2008

The motion prevailed and the Committee Report on H. F. No. 1812 was adopted.

CALL OF THE HOUSE LIFTED

Sertich moved that the call of the House be lifted. The motion prevailed and it was so ordered.

REPORTS OF STANDING COMMITTEES AND DIVISIONS, Continued

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 3360, A bill for an act relating to claims against the state; providing for settlement of various claims; appropriating money.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

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Carlson from the Committee on Finance to which was referred:

H. F. No. 3391, A bill for an act relating to health care reform; increasing affordability and continuity of care for state health care programs; modifying health care provisions; providing subsidies for employee share of employer-subsidized insurance; establishing the Minnesota Health Insurance Exchange; requiring certain employers to offer Section 125 Plan; establishing the Health Care Transformation Commission; creating an affordability standard; requiring mandated reports; appropriating money; amending Minnesota Statutes 2006, sections 62A.65, subdivision 3; 62E.141; 62L.12, subdivisions 2, 4; 256.01, by adding subdivisions; 256B.061; 256B.69, by adding a subdivision; 256D.03, by adding a subdivision; 256L.05, by adding a subdivision; 256L.06, subdivision 3; 256L.07, subdivision 3; 256L.15, by adding a subdivision; Minnesota Statutes 2007 Supplement, sections 13.46, subdivision 2; 256B.056, subdivision 10; 256L.03, subdivisions 3, 5; 256L.04, subdivisions 1, 7; 256L.05, subdivision 3a; 256L.07, subdivision 1; 256L.15, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 256B; proposing coding for new law as Minnesota Statutes, chapter 62U; repealing Minnesota Statutes 2006, section 256L.15, subdivision 3.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

HEALTH CARE HOMES

Section 1. Minnesota Statutes 2007 Supplement, section 256.01, subdivision 2b, is amended to read:

Subd. 2b. Performance payments. (a) The commissioner shall develop and implement a pay-for-performance system to provide performance payments to eligible medical groups and clinics that demonstrate optimum care in serving individuals with chronic diseases who are enrolled in health care programs administered by the commissioner under chapters 256B, 256D, and 256L. The commissioner may receive any federal matching money that is made available through the medical assistance program for managed care oversight contracted through vendors, including consumer surveys, studies, and external quality reviews as required by the federal Balanced Budget Act of 1997, Code of Federal Regulations, title 42, part 438-managed care, subpart E-external quality review. Any federal money received for managed care oversight is appropriated to the commissioner for this purpose. The commissioner may expend the federal money received in either year of the biennium.

(b) Effective July 1, 2009, or upon federal approval, whichever is later, the commissioner shall develop and implement a patient incentive health program to provide incentives and rewards to patients who are enrolled in health care programs administered by the commissioner under chapters 256B, 256D, and 256L, and who have agreed to and have met personal health goals established with the patients' primary care providers to manage a chronic disease or condition, including but not limited to diabetes, high blood pressure, and coronary artery disease. The commissioner shall collaborate with the commissioner of health and with community-based organizations that conduct chronic disease consumer education programs targeted at labor, business, faith-based, and health care constituencies to avoid duplication of efforts.

Sec. 2. [256B.0431] ENROLLEE REQUIREMENTS RELATED TO HEALTH CARE HOMES.

Subdivision 1. Selection of primary care clinic. Beginning January 1, 2009, the commissioner shall encourage state health care program enrollees eligible for services under the fee-for-service system to select a primary care clinic or medical group, within two months of enrollment. Beginning July 1, 2009, the commissioner shall encourage enrollees who have a complex or chronic condition to select a primary care clinic or medical group with clinicians who have been certified as health care homes under section 256B.0751, subdivision 3. The commissioner

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and county social service agencies shall provide enrollees with lists of primary care clinics, medical groups, and clinicians certified as health care homes, and shall establish a toll-free number to provide enrollees with assistance in choosing a clinic, medical group, or health care home.

Subd. 2. Initial health assessment. The commissioner shall encourage state health care program enrollees eligible for services under the fee-for-service system to obtain an initial health assessment at their selected primary care clinic or medical group, within one month of selection, in order to identify individuals with complex or chronic health conditions, and to identify preventative health care needs.

Subd. 3. Education and outreach. Beginning January 1, 2009, the commissioner shall provide patient education and outreach to state health care program enrollees and applicants related to the importance of choosing a primary care clinic or medical group and a health care home. Education and outreach must be targeted to underserved or special populations. The commissioner shall also develop and implement an outreach program to enroll eligible persons in state health care programs, by providing a per enrollee bonus to licensed producers under chapter 60K and nonprofit health care or social service organizations who provide assistance in enrolling applicants.

Subd. 4. State health care program. For purposes of this section, "state health care program" means the medical assistance, MinnesotaCare, and general assistance medical care programs.

Sec. 3. [256B.0751] HEALTH CARE HOMES; DEFINITIONS; ESTABLISHMENT.

Subdivision 1. Definitions. (a) For purposes of sections 256B.0751 to 256B.0754, the definitions in this subdivision apply.

(b) "Commissioner" means the commissioner of human services.

(d) "State health care program" means the medical assistance, MinnesotaCare, and general assistance medical care programs.

Subd. 2. Establishment of health care homes. The commissioners shall establish health care homes for state health care program enrollees who have complex or chronic health conditions. In establishing health care homes, the commissioners shall consider and, when appropriate, incorporate features of the medical home model developed for the provider-directed care coordination program authorized under section 256B.0625, subdivision 51. The commissioner shall study the feasibility of expanding health care homes to all enrollees and report to the legislature by January 1, 2011.

Subd. 3. Certification. By July 1, 2009, the commissioners shall begin certification of individual clinicians, who participate as providers in state health care programs and meet the requirements of section 256B.0752, as health care homes. Clinicians may enter into collaborative agreements with other clinicians to develop the components of a health care home. Clinician certification as a health care home is voluntary. Clinicians certified as health care homes shall renew their certification annually, in order to maintain their status as health care homes. The commissioner may waive some requirements in order to certify providers and clinicians with health care home models in existence on March 1, 2008, that serve special patient populations of diverse race, language, or ethnicity.

Sec. 4. [256B.0752] HEALTH CARE HOME REQUIREMENTS.

Subdivision 1. Requirement. In order to be certified as a health care home, a clinician shall meet the criteria specified in this section.

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Subd. 2. Patient-provider relationship; care teams. Each patient of a health care home shall have an ongoing, long-term relationship with a provider trained as a personal clinician to provide first contact, continuous, and comprehensive care for all of a patient's health care needs. Appropriate specialists and other health care professionals who do not practice in a traditional primary care field, and advanced practice registered nurses, shall be allowed to serve as personal clinicians, if they provide care according to this section.

Subd. 3. Care coordination. The personal clinician, in coordination with other health care providers, is responsible for providing for all the patient's health care needs or for arranging appropriate care with other qualified professionals. Health care must be coordinated across all provider types, all care locations, and the greater community. This requirement applies to care for all stages of life, including preventive care, acute care, chronic care, and end-of-life care. Care coordination must include ongoing planning to prepare for patient transitions across different types of care and provider types. The care team shall also coordinate with those providing for the social service needs of the individual, if this is necessary to ensure a successful health outcome. Care coordination must be provided in a manner appropriate to the patient's race, ethnicity, and language.

Subd. 4. Care delivery. (a) A health care home must provide or arrange for access to care 24 hours a day, seven days a week.

(b) Health care homes must encourage the patient, and when authorized and appropriate, the family, to actively participate in decision making as a full member of the primary care team. Health care homes must consider patients and families as partners in decision making, and must provide access to a patient-directed, decision-making process, including appropriate decision aids, when available.

(c) Care delivery must be facilitated by the use of health information technology and through systematic patient follow-up using internal clinic patient registries, according to minimum standards specified by the commissioners.

(d) Care must be provided in a culturally and linguistically appropriate manner.

(e) Within the context of a system of continuous quality improvement, care delivery, whenever possible, must be based on evidence-based medicine and use clinical decision-support tools.

(f) A health care home must provide enhanced access to care, using methods such as open scheduling, expanded hours, and new communication methods, such as e-mail, phone consultations, and e-consults.

(g) Providers certified as health care homes must offer their health care home services to all their patients with complex or chronic health conditions who are interested in participation.

Subd. 5. Quality of care. Health care homes must meet process, outcome, and quality standards as developed and specified by the commissioners. Health care homes must measure and publicly report all data necessary for the commissioners to monitor compliance with these standards.

Subd. 6. Comprehensive care plan. Health care homes must develop, maintain, and ensure the implementation of a comprehensive care plan for each enrollee who has a complex or chronic condition, based upon health history, tests, assessments, and other information. The comprehensive care plan must meet the criteria specified by the commissioners. The comprehensive care plan must be culturally appropriate.

Subd. 7. Care coordinators. Health care homes must employ care coordinators to manage the care provided to patients with complex or chronic conditions. Care coordinators must be trained to provide services that are appropriate for the race, ethnicity, and language of the patient. Care coordination includes:

(1) identifying patients with complex or chronic conditions eligible for care coordination;

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(2) assisting primary care providers in care coordination and education;

(3) helping patients coordinate their care or access needed services, including preventative care;

(4) communicating the care needs and concerns of the patient to the health care home;

(5) collecting data on process and outcome measures;

(6) overseeing the development, maintenance, and implementation of care plans; and

(7) meeting other criteria as specified by the commissioner.

Subd. 8. Health care home collaborative. Health care homes must participate in the health care home collaborative defined in section 256B.0754, subdivision 4, as required by the commissioners for certification.

Sec. 5. [256B.0753] CARE COORDINATION FEE.

Subdivision 1. Care coordination fee. (a) The commissioner shall pay each health care home a per-person per-month care coordination fee for providing care coordination services. The fee must be paid for each fee-for-service state health care program enrollee eligible for a health care home, who is served by a personal clinician certified as a health care home.

(b) Payment of the care coordination fee is contingent on the health care home meeting the certification standards for health care homes. The care coordination fee is in addition to reimbursement received by a health care home under the medical assistance fee-for-service payment system for health care services.

Subd. 2. Amount of fee. The care coordination fee must be determined by the commissioner in contracts with health care homes, and must vary by thresholds of care complexity, with the highest fees being paid for care provided to individuals requiring the most intensive care coordination, such as those with very complex health care needs or several chronic conditions and those who face racial, ethnic, or language barriers.

Subd. 3. Cost neutrality. If initial savings from implementation of health care homes are not sufficient to allow implementation of the care coordination fee in a cost-neutral manner, the commissioner shall reallocate costs within the health care system.

EFFECTIVE DATE. Subdivisions 1 and 2 are effective July 1, 2009, or upon federal approval, whichever is later.

Sec. 6. [256B.0754] DUTIES OF THE COMMISSIONERS.

Subdivision 1. Establishment of certification standards and other criteria. (a) By January 1, 2009, the commissioners shall establish certification standards for health care homes consistent with the criteria in section 256B.0752.

(b) By January 1, 2009, the commissioners shall develop care complexity thresholds and payment amounts for the care coordination fee established under section 256B.0753.

(c) By January 1, 2009, the commissioners shall identify criteria to determine enrollees eligible for and in need of care coordination, and who would benefit from having a comprehensive care plan for their condition.

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(d) By January 1, 2009, the commissioners shall establish criteria and data collection procedures for evaluating health care homes.

(e) By January 1, 2009, the commissioners shall develop health care home requirements for managed care plan contracts, performance incentives, and withholds, and shall develop the methodology for identifying and recapturing managed care savings resulting from implementation of the health care home model.

Subd. 2. Monitoring and evaluation. The commissioners shall ensure the collection from health care homes of data necessary to monitor implementation of the health care home model, measure and evaluate quality of care and outcomes, measure and evaluate patient experience, and determine cost savings from implementation of the health care home model. The commissioners shall collect and evaluate this data directly, but may contract with an appropriate private sector entity for technical assistance. The commissioners shall provide health care homes with practice profiles measuring utilization, cost, and quality. Quality measures must include measures of disparities in treatment, health status, and outcomes based on race, ethnicity, or language.

Subd. 3. Care Coordination Advisory Committee. By July 1, 2008, the commissioners shall establish a Care Coordination Advisory Committee to assist the Departments of Human Services and Health in administering the health care home model, developing the criteria and standards required under subdivision 1, collecting data, and measuring and evaluating health outcomes and cost savings. The commissioners may satisfy this requirement by continuing the advisory committee established for the provider-directed care coordination program. If newly established, the committee must include representatives of: primary care and specialist physicians, advanced practice registered nurses, patients and their families including minority ethnic groups, health plans, providers serving low-income and culturally diverse populations, organizations with expertise in care coordination models, and other relevant entities. If newly established, membership terms and compensation and removal of members are governed by section 15.059. The committee does not expire.

Subd. 4. Health care home collaborative. By July 1, 2009, the commissioners shall establish a health care home collaborative to provide an opportunity for health care homes and state agencies to exchange information related to quality improvement and best practices.

Subd. 5. Patient-directed, decision-making process. By January 1, 2009, the commissioners, in consultation with the Care Coordination Advisory Committee and the Institute of Clinical Systems Improvement, shall develop a patient-directed, decision-making support model to be used by health care homes. The commissioners shall:

(1) establish protocols that include identifying the use of a patient-directed, culturally appropriate decision-making process and effectively incorporating the use of patient-decision aids, when appropriate;

(2) ensure the quality of the patient-decision aids available to the patient;

(3) ensure accessibility and cultural appropriateness of the patient-decision aids, including the use of translators, when necessary; and

(4) ensure that providers are trained to use patient-decision aids effectively.

Subd. 6. Report on standards; annual reports. (a) By November 15, 2008, the commissioners must report drafts of certification standards, care complexity thresholds, and other criteria, procedures, and payment amounts necessary to implement subdivision 1 to the chairs and lead minority members of the legislative committees with jurisdiction over health care policy and finance. These standards, thresholds, criteria, procedures, and payment amount are not subject to chapter 14, and section 14.386 does not apply.

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(b) The commissioners shall report annually to the legislature on the implementation and administration of the health care home model for state health care program enrollees in the fee-for-service, managed care, and county-based purchasing sectors, beginning December 15, 2009, and each December 15 thereafter. The report must include: (1) information on the number of state health care program enrollees in health care homes; (2) the number and characteristics of enrollees with complex or chronic conditions, broken down by income, race, ethnicity, and language whenever possible; (3) the number and geographic distribution of health care home providers; (4) the performance and quality of care of health care homes; (5) measures of preventative care; (6) costs related to implementation and payment of care coordination fees; (7) health care home payment arrangements; (8) the estimated impact on health disparities; and (9) estimates of savings from implementation of the health care home model for the fee-for-service, managed care, and county-based purchasing sectors relative to the health care spending baseline calculated under section 62U.07.

Sec. 7. Minnesota Statutes 2006, section 256B.69, is amended by adding a subdivision to read:

Subd. 29. Health care home model. (a) The commissioner shall require demonstration providers, as a condition of contract, to adopt by July 1, 2009, a health care home model for providing care to state health care program enrollees. The health care home model must meet the criteria specified in this section and section 256B.0752. The commissioner, in consultation with the commissioner of health, may waive or modify criteria for demonstration providers if the commissioners of health and human services determine that performance and quality standards would still be met.

(b) The commissioner, as a condition of contract, shall require demonstration providers, as part of their implementation of the health care home model, to pay providers a care coordination fee. The care coordination fee must meet the requirements of section 256B.0753. Demonstration providers shall fund the care coordination fee through savings that result from implementation of the health care home model and, if necessary, through reductions in administrative costs and reallocation of other payment rates within its network. The commissioner shall not adjust current or future capitation rates for costs related to payment of the care coordination fee.

(c) The commissioners of health and human services shall require demonstration providers to: (1) collect from health care homes the data necessary to monitor implementation of the health care home model, measure and evaluate quality of care and outcomes, measure and evaluate patient experience, and determine cost savings from implementation of the health care home model; and (2) submit this data to the commissioners. The commissioners of health and human services shall provide demonstration providers and health care homes with practice profiles measuring utilization, cost, and quality. Before establishing or amending general standards for data collection under this paragraph, the commissioners must report the draft standards to the chairs and lead minority members of the legislative committees with jurisdiction over health care policy and finance. Standards for data collection are not subject to chapter 14 and section 14.386 does not apply.

(d) The commissioner shall study the feasibility and method of calculating savings from the use of health care homes, as required in section 256B.0754, subdivision 6, paragraph (b). The study must consider the methodology for distribution of savings. Under the methodology, the state must retain one-half of the savings, the demonstration providers may retain up to one-fourth of the savings, and at least one-fourth of the savings must be passed on to health care providers in the form of higher payment rates.

(e) Demonstration providers must encourage state health care program enrollees to complete an initial health assessment within three months from the time of enrollment, in order to identify individuals with complex or chronic health conditions, and to identify preventative health care needs.

(f) Beginning July 1, 2009, the commissioner shall require demonstration providers to require health care homes to develop, maintain, and ensure the implementation of a comprehensive care plan, as defined in section 256B.0752, subdivision 6.

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(g) Beginning July 1, 2009, the commissioner shall implement financial arrangements for demonstration providers to ensure that plans encourage each enrollee who has a complex or chronic condition to choose a certified primary care clinic or medical group to serve as a health care home.

Sec. 8. PAYMENT OF CARE COORDINATION FEE UNDER STATE MANAGED CARE PROGRAMS.

The commissioner of human services shall study the feasibility of paying the care coordination fee required under Minnesota Statutes, section 256B.69, subdivision 29, paragraph (b), directly to health care providers under contract with demonstration providers to serve state health care program enrollees, and shall present recommendations to the legislature by December 15, 2008.

Sec. 9. WORKFORCE SHORTAGE STUDY.

To address health care workforce shortages, the Health Care Transformation Commission, in consultation with health licensing boards and professional associations, shall study changes necessary in health professional licensure and regulation to ensure full utilization of advanced practice registered nurses and other licensed health care professionals in the health care home and primary delivery system. The Health Care Transformation Commission shall make recommendations to the legislature by January 15, 2009.

Sec. 10. HEALTH CARE ACCESS FUND TRANSFER.

On July 1, 2008, the commissioner of finance shall transfer $1,390,000 from the health care access fund to the general fund.

ARTICLE 2

INCREASING ACCESS; CONTINUITY OF CARE

Section 1. Minnesota Statutes 2007 Supplement, section 256B.056, subdivision 10, is amended to read:

Subd. 10. Eligibility verification. (a) The commissioner shall require women who are applying for the continuation of medical assistance coverage following the end of the 60-day postpartum period to update their income and asset information and to submit any required income or asset verification.

(b) The commissioner shall determine the eligibility of private-sector health care coverage for infants less than one year of age eligible under section 256B.055, subdivision 10, or 256B.057, subdivision 1, paragraph (d), and shall pay for private-sector coverage if this is determined to be cost-effective.

(c) The commissioner shall verify ~~assets and~~ income for all applicants, and for all recipients upon renewal. The commissioner shall verify liquid assets for applicants, and for recipients upon renewal, only if the applicant or recipient reports total countable assets. The commissioner may verify nonliquid assets, but is not required to do so. This paragraph does not apply to applicants or recipients applying for or receiving medical assistance payment of long-term care services, including services under section 256B.0915, 256B.092, or 256B.49.

(d) The commissioner shall designate locations where enrollees may submit renewal forms, including but not limited to community clinics and health care providers' offices. The designated sites shall forward the renewal forms to the commissioner.

EFFECTIVE DATE. The amendment to paragraph (c) is effective January 1, 2009.

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Sec. 2. Minnesota Statutes 2006, section 256B.057, subdivision 8, is amended to read:

Subd. 8. Children under age two. Medical assistance may be paid for a child under two years of age whose countable family income is above 275 percent of the federal poverty guidelines for the same size family but less than or equal to ~~280~~ 305 percent of the federal poverty guidelines for the same size family.

EFFECTIVE DATE. This section is effective January 1, 2010, or upon federal approval, whichever is later.

Sec. 3. Minnesota Statutes 2007 Supplement, section 256L.03, subdivision 3, is amended to read:

Subd. 3. Inpatient hospital services. (a) Covered health services shall include inpatient hospital services, including inpatient hospital mental health services and inpatient hospital and residential chemical dependency treatment, subject to those limitations necessary to coordinate the provision of these services with eligibility under the medical assistance spenddown. The inpatient hospital benefit for adult enrollees who qualify under section 256L.04, subdivision 7, or who qualify under section 256L.04, subdivisions 1 and 2, with family gross income that exceeds 200 percent of the federal poverty guidelines or 215 percent of the federal poverty guidelines on or after July 1, 2009, and who are not pregnant, is subject to an annual limit of ~~$10,000~~ $20,000.

(b) Admissions for inpatient hospital services paid for under section 256L.11, subdivision 3, must be certified as medically necessary in accordance with Minnesota Rules, parts 9505.0500 to 9505.0540, except as provided in clauses (1) and (2):

(1) all admissions must be certified, except those authorized under rules established under section 254A.03, subdivision 3, or approved under Medicare; and

(2) payment under section 256L.11, subdivision 3, shall be reduced by five percent for admissions for which certification is requested more than 30 days after the day of admission. The hospital may not seek payment from the enrollee for the amount of the payment reduction under this clause.

EFFECTIVE DATE. This section is effective January 1, 2009, for single adults and households with no children enrolled under section 256L.07, subdivision 4, and is effective July 1, 2009, or upon federal approval, whichever is later, for adults in families with children enrolled under section 256L.04, subdivision 1. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 4. Minnesota Statutes 2007 Supplement, section 256L.03, subdivision 5, is amended to read:

Subd. 5. Co-payments and coinsurance. (a) Except as provided in paragraphs (b) and (c), the MinnesotaCare benefit plan shall include the following co-payments and coinsurance requirements for all enrollees:

(1) ten percent of the paid charges for inpatient hospital services for adult enrollees, subject to an annual inpatient out-of-pocket maximum of $1,000 per individual and $3,000 per family;

(2) $3 per prescription for adult enrollees;

(3) $25 for eyeglasses for adult enrollees;

(4) $3 per nonpreventive visit. For purposes of this subdivision, a "visit" means an episode of service which is required because of a recipient's symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting by a physician or physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist; and

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(5) $6 for nonemergency visits to a hospital-based emergency room.

(b) Paragraph (a), clause (1), does not apply to parents and relative caretakers of children under the age of 21.

(d) Paragraph (a), clause (4), does not apply to mental health services.

(e) Adult enrollees with family gross income that exceeds 200 percent of the federal poverty guidelines or 215 percent of the federal poverty guidelines on or after July 1, 2009, and who are not pregnant shall be financially responsible for the coinsurance amount, if applicable, and amounts which exceed the ~~$10,000~~ $20,000 inpatient hospital benefit limit.

(f) When a MinnesotaCare enrollee becomes a member of a prepaid health plan, or changes from one prepaid health plan to another during a calendar year, any charges submitted towards the ~~$10,000~~ $20,000 annual inpatient benefit limit, and any out-of-pocket expenses incurred by the enrollee for inpatient services, that were submitted or incurred prior to enrollment, or prior to the change in health plans, shall be disregarded.

EFFECTIVE DATE. This section is effective January 1, 2009, for single adults and households with no children enrolled under section 256L.04, subdivision 7, and is effective July 1, 2009, or upon federal approval, whichever is later, for adults in families with children enrolled under section 256L.04, subdivision 1. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 5. Minnesota Statutes 2007 Supplement, section 256L.04, subdivision 1, is amended to read:

Subdivision 1. Families with children. (a) Families with children with family income equal to or less than ~~275~~ 300 percent of the federal poverty guidelines for the applicable family size shall be eligible for MinnesotaCare according to this section. All other provisions of sections 256L.01 to 256L.18, including the insurance-related barriers to enrollment under section 256L.07, shall apply unless otherwise specified.

(b) Parents who enroll in the MinnesotaCare program must also enroll their children, if the children are eligible. Children may be enrolled separately without enrollment by parents. However, if one parent in the household enrolls, both parents must enroll, unless other insurance is available. If one child from a family is enrolled, all children must be enrolled, unless other insurance is available. If one spouse in a household enrolls, the other spouse in the household must also enroll, unless other insurance is available. Families cannot choose to enroll only certain uninsured members.

(c) Beginning October 1, 2003, the dependent sibling definition no longer applies to the MinnesotaCare program. These persons are no longer counted in the parental household and may apply as a separate household.

(d) ~~Beginning July 1, 2003, or upon federal approval, whichever is later, parents are not eligible for MinnesotaCare if their gross income exceeds $50,000.~~

~~(e)~~ Children formerly enrolled in medical assistance and automatically deemed eligible for MinnesotaCare according to section 256B.057, subdivision 2c, are exempt from the requirements of this section until renewal.

EFFECTIVE DATE. This section is effective July 1, 2009, or upon federal approval, whichever is later. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

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Sec. 6. Minnesota Statutes 2007 Supplement, section 256L.04, subdivision 7, is amended to read:

Subd. 7. Single adults and households with no children. The definition of eligible persons includes all individuals and households with no children who have gross family incomes that are equal to or less than 200 percent of the federal poverty guidelines. Effective July 1, 2009, the definition of eligible persons includes all individuals and households with no children who have gross family incomes that are equal to or less than ~~215~~ 300 percent of the federal poverty guidelines.

EFFECTIVE DATE. This section is effective July 1, 2009.

Sec. 7. Minnesota Statutes 2007 Supplement, section 256L.05, subdivision 3a, is amended to read:

Subd. 3a. Renewal of eligibility. (a) Beginning July 1, 2007, an enrollee's eligibility must be renewed every 12 months. The 12-month period begins in the month after the month the application is approved.

(b) Each new period of eligibility must take into account any changes in circumstances that impact eligibility and premium amount. An enrollee must provide all the information needed to redetermine eligibility by the first day of the month that ends the eligibility period. The commissioner shall designate locations where enrollees may submit renewal forms, including but not limited to community clinics and health care providers' offices. The designated sites shall forward the renewal forms to the commissioner. The premium for the new period of eligibility must be received as provided in section 256L.06 in order for eligibility to continue.

(c) For single adults and households with no children formerly enrolled in general assistance medical care and enrolled in MinnesotaCare according to section 256D.03, subdivision 3, the first period of eligibility begins the month the enrollee submitted the application or renewal for general assistance medical care.

(d) An enrollee who fails to submit renewal forms and related documentation necessary for verification of continued eligibility in a timely manner shall remain eligible for one additional month beyond the end of the current eligibility period before being disenrolled. The enrollee remains responsible for MinnesotaCare premiums for the additional month.

EFFECTIVE DATE. This section is effective January 1, 2010, or upon federal approval, whichever is later. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 8. Minnesota Statutes 2006, section 256L.05, is amended by adding a subdivision to read:

Subd. 6. Delayed verification. On the basis of information provided on the completed application, an applicant whose gross income is less than 90 percent of the applicable income standard and meets all other eligibility requirements, including compliance at the time of application with citizenship or nationality documentation requirements under section 256L.04, subdivision 10, must be determined eligible and enrolled upon payment of premiums according to subdivision 3. The applicant shall provide all required verifications within 60 days' notice of the eligibility determination, or eligibility shall be denied or cancelled. Applicants who are denied or cancelled for failure to provide all required verifications are not eligible for coverage using the delayed verification procedures specified in this subdivision for 12 months.

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Sec. 9. Minnesota Statutes 2006, section 256L.06, subdivision 3, is amended to read:

Subd. 3. Commissioner's duties and payment. (a) Premiums are dedicated to the commissioner for MinnesotaCare.

(b) The commissioner shall develop and implement procedures to: (1) require enrollees to report changes in income; (2) adjust sliding scale premium payments, based upon both increases and decreases in enrollee income, at the time the change in income is reported; and (3) disenroll enrollees from MinnesotaCare for failure to pay required premiums. Failure to pay includes payment with a dishonored check, a returned automatic bank withdrawal, or a refused credit card or debit card payment. The commissioner may demand a guaranteed form of payment, including a cashier's check or a money order, as the only means to replace a dishonored, returned, or refused payment.

(c) Premiums are calculated on a calendar month basis and may be paid on a monthly, quarterly, or semiannual basis, with the first payment due upon notice from the commissioner of the premium amount required. The commissioner shall inform applicants and enrollees of these premium payment options. Premium payment is required before enrollment is complete and to maintain eligibility in MinnesotaCare. Premium payments received before noon are credited the same day. Premium payments received after noon are credited on the next working day.

(d) Nonpayment of the premium will result in disenrollment from the plan effective ~~for~~ the first day of the calendar month following the calendar month for which the premium was due. Persons disenrolled for nonpayment or who voluntarily terminate coverage from the program may not reenroll until four calendar months have elapsed. Persons disenrolled for nonpayment who pay all past due premiums as well as current premiums due, including premiums due for the period of disenrollment, within 20 days of disenrollment, shall be reenrolled retroactively to the first day of disenrollment The commissioner shall waive premiums for coverage provided under this paragraph to persons disenrolled for nonpayment who reapply under section 256L.05, subdivision 3b. Persons disenrolled for nonpayment or who voluntarily terminate coverage from the program may not reenroll for four calendar months unless the person demonstrates good cause for nonpayment. Good cause does not exist if a person chooses to pay other family expenses instead of the premium. The commissioner shall define good cause in rule.

Sec. 10. Minnesota Statutes 2007 Supplement, section 256L.07, subdivision 1, is amended to read:

Subdivision 1. General requirements. (a) Children enrolled in the original children's health plan as of September 30, 1992, children who enrolled in the MinnesotaCare program after September 30, 1992, pursuant to Laws 1992, chapter 549, article 4, section 17, and children who have family gross incomes that are equal to or less than 150 percent of the federal poverty guidelines are eligible without meeting the requirements of subdivision 2 ~~and the four-month requirement in subdivision 3~~, as long as they maintain continuous coverage in the MinnesotaCare program or medical assistance. Children who apply for MinnesotaCare on or after the implementation date of the employer-subsidized health coverage program as described in Laws 1998, chapter 407, article 5, section 45, who have family gross incomes that are equal to or less than 150 percent of the federal poverty guidelines, must meet the requirements of subdivision 2 to be eligible for MinnesotaCare.

Families enrolled in MinnesotaCare under section 256L.04, subdivision 1, whose income increases above ~~275~~ 300 percent of the federal poverty guidelines, are no longer eligible for the program and shall be disenrolled by the commissioner. Beginning January 1, 2008, individuals enrolled in MinnesotaCare under section 256L.04, subdivision 7, whose income increases above 200 percent of the federal poverty guidelines or ~~215~~ 300 percent of the federal poverty guidelines on or after ~~July~~ January 1, 2009, are no longer eligible for the program and shall be disenrolled by the commissioner. For persons disenrolled under this subdivision, MinnesotaCare coverage terminates the last day of the calendar month following the month in which the commissioner determines that the income of a family or individual exceeds program income limits.

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(b) Notwithstanding paragraph (a), children may remain enrolled in MinnesotaCare if ten percent of their gross individual or gross family income as defined in section 256L.01, subdivision 4, is less than the annual premium for a policy with a $500 deductible available through the Minnesota Comprehensive Health Association. Children who are no longer eligible for MinnesotaCare under this clause shall be given a 12-month notice period from the date that ineligibility is determined before disenrollment. The premium for children remaining eligible under this clause shall be the maximum premium determined under section 256L.15, subdivision 2, paragraph (b).

~~(c) Notwithstanding paragraphs (a) and (b), parents are not eligible for MinnesotaCare if gross household income exceeds $50,000 for the 12-month period of eligibility.~~

EFFECTIVE DATE. This section is effective July 1, 2009, or upon federal approval, whichever is later, except that the amendment to paragraph (a) related to the four-month requirement is effective January 1, 2010, or upon federal approval, whichever is later. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 11. Minnesota Statutes 2006, section 256L.07, subdivision 3, is amended to read:

Subd. 3. Other health coverage. (a) Families and individuals enrolled in the MinnesotaCare program must have no health coverage while enrolled ~~or for at least four months prior to application and renewal~~. Children enrolled in the original children's health plan and children in families with income equal to or less than 150 percent of the federal poverty guidelines, who have other health insurance, are eligible if the coverage:

(1) lacks two or more of the following:

(i) basic hospital insurance;

(ii) medical-surgical insurance;

(iii) prescription drug coverage;

(iv) dental coverage; or

(v) vision coverage;

(2) requires a deductible of $100 or more per person per year; or

(3) lacks coverage because the child has exceeded the maximum coverage for a particular diagnosis or the policy excludes a particular diagnosis.

The commissioner may change this eligibility criterion for sliding scale premiums in order to remain within the limits of available appropriations. The requirement of no health coverage does not apply to newborns.

(b) Medical assistance, general assistance medical care, and the Civilian Health and Medical Program of the Uniformed Service, CHAMPUS, or other coverage provided under United States Code, title 10, subtitle A, part II, chapter 55, are not considered insurance or health coverage for purposes of ~~the four-month requirement described in~~ this subdivision.

~~(c)~~ For purposes of this subdivision, an applicant or enrollee who is entitled to Medicare Part A or enrolled in Medicare Part B coverage under title XVIII of the Social Security Act, United States Code, title 42, sections 1395c to 1395w-152, is considered to have health coverage. An applicant or enrollee who is entitled to premium-free Medicare Part A may not refuse to apply for or enroll in Medicare coverage to establish eligibility for MinnesotaCare.

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~~(d)~~ (c) Applicants who were recipients of medical assistance or general assistance medical care within one month of application must meet the provisions of this subdivision and subdivision 2.

(e) Cost-effective health insurance that was paid for by medical assistance is not considered health coverage for purposes of the four-month requirement under this section, except if the insurance continued after medical assistance no longer considered it cost-effective or after medical assistance closed.

Sec. 12. Minnesota Statutes 2007 Supplement, section 256L.15, subdivision 2, is amended to read:

Subd. 2. Sliding fee scale; monthly gross individual or family income. (a) The commissioner shall establish a sliding fee scale to determine the percentage of monthly gross individual or family income that households at different income levels must pay to obtain coverage through the MinnesotaCare program. The sliding fee scale must be based on the enrollee's monthly gross individual or family income. The sliding fee scale must contain separate tables based on enrollment of one, two, or three or more persons. Until December 31, 2008, the sliding fee scale begins with a premium of 1.5 percent of monthly gross individual or family income for individuals or families with incomes below the limits for the medical assistance program for families and children in effect on January 1, 1999, and proceeds through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 percent. These percentages are matched to evenly spaced income steps ranging from the medical assistance income limit for families and children in effect on January 1, 1999, to 275 percent of the federal poverty guidelines for the applicable family size, up to a family size of five. The sliding fee scale for a family of five must be used for families of more than five. The sliding fee scale and percentages are not subject to the provisions of chapter 14. If a family or individual reports increased income after enrollment, premiums shall be adjusted at the time the change in income is reported.

(b) ~~Families~~ Children whose gross income is above ~~275~~ 300 percent of the federal poverty guidelines shall pay the maximum premium. The maximum premium is defined as a base charge for one, two, or three or more enrollees so that if all MinnesotaCare cases paid the maximum premium, the total revenue would equal the total cost of MinnesotaCare medical coverage and administration. In this calculation, administrative costs shall be assumed to equal ten percent of the total. The costs of medical coverage for pregnant women and children under age two and the enrollees in these groups shall be excluded from the total. The maximum premium for two enrollees shall be twice the maximum premium for one, and the maximum premium for three or more enrollees shall be three times the maximum premium for one.

(c) Beginning July 1, 2009, MinnesotaCare enrollees shall pay premiums according to the affordability scale established in section 62U.08 with the exception that children in families with income at or below 150 percent of the federal poverty guidelines shall pay a monthly premium of $4.

Sec. 13. Minnesota Statutes 2006, section 256L.15, is amended by adding a subdivision to read:

Subd. 5. First month premium exemption. New enrollee households are exempt from premiums for the first month of MinnesotaCare enrollment. For purposes of this exemption, a "new enrollee household" is a household which has not been enrolled in MinnesotaCare for at least one year prior to application.

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Sec. 14. INSURANCE COVERAGE FOR LONG-TERM CARE WORKERS.

(a) By December 15, 2008, the commissioner of human services shall study and report to the legislature with recommendations for a rate increase to long-term care employers dedicated to the purchase of employee health insurance in the private market. The commissioner shall collect necessary actuarial data, employment data, current coverage data, and other needed information.

(b) The commissioner shall develop cost estimates for three levels of insurance coverage for long-term care workers:

(1) the coverage provided to state employees;

(2) the coverage provided to MinnesotaCare enrollees; and

(3) the benefits provided under an average private market insurance product, but with a deductible limited to $100 per person.

Premium cost sharing, waiting periods for eligibility, definitions of full- and part-time employment, and other parameters under the three options must be identical to those under the state employees' health plan.

(c) For purposes of this section, a long-term care worker is a person employed by a nursing facility, an intermediate care facility for persons with developmental disabilities, or a service provider that:

(1) is eligible under Laws 2007, chapter 147, article 7, section 71; and

(2) provides long-term care services.

The commissioner may recommend a different definition of long-term care worker if this definition presents insurmountable implementation issues.

(d) The recommendations must include measures to:

(1) ensure equitable treatment between employers that currently have different levels of expenditure for employee health insurance costs; and

(2) enforce the requirement that the rate increase be expended for the intended purpose.

Sec. 15. REPEALER.

Minnesota Statutes 2006, section 256L.15, subdivision 3, is repealed.

EFFECTIVE DATE. This section is effective January 1, 2009, or upon federal approval of the amendments to section 11, whichever is later. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 16. APPROPRIATION.

$804,000 is appropriated from the health care access fund to the commissioner of human services for fiscal year 2009, to study insurance coverage for long-term care workers under section 14.

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ARTICLE 3

INSURANCE REFORM

Section 1. UNIFORM OUTCOME MEASURES WORKING GROUP.

(a) The Health Care Transformation Commission, established under Minnesota Statutes, section 62U.04, shall establish an informal working group to create a standardized limited set of measures by which to measure performance of health care providers for use in establishing statewide health improvement goals and in measuring progress on these goals. The group shall focus first on the most common areas of data collection for pay-for-performance systems.

(b) The working group must be known as the Uniform Outcome Measures Working Group. The commission shall determine its members and the number of members. The working group must include representatives of health care providers, health care purchasers, health insurers, public health agencies, and consumers.

(c) The working group shall attempt to determine uniform definitions, measures, and forms for submission of data, to the greatest extent possible.

(d) The working group shall seek to reduce the administrative burden on health care providers and health care purchasers.

(e) The working group shall invite and use the expertise of existing organizations experienced in health care quality measurement.

(f) The working group shall encourage participation by the public.

(g) The commission shall encourage use of the working group recommendations.

(h) By December 15, 2008, the commission shall provide to the legislature a written report under Minnesota Statutes, section 3.195, summarizing the work of the working group. The report must include recommendations for: (1) a standardized set of health care provider performance measures to be enacted by the legislature; and (2) a payment methodology to reduce capitation rates paid by the commissioner of human services under Minnesota Statutes, section 256B.69, to demonstration providers that use provider performance measures other than those included in the standardized set under clause (1).

(i) The working group expires on June 30, 2009, unless the commission determines that the group's continued existence would be beneficial.

Sec. 2. COMMUNITY BENEFIT STANDARDS AND REPORTING; NONPROFIT HEALTH PLAN COMPANIES; RECOMMENDATIONS.

(a) By December 15, 2008, the commissioner of health shall recommend to the legislature community benefit standards to be required by law of nonprofit health plan companies doing business in the state. The expectations of the community benefits provided and reported should be related to the statutory expectations in Minnesota Statutes, sections 62C.01 and 62D.01, and thus focus on advocating public health, improving the art and science of medical care, and addressing the need for financial assistance to access ongoing coverage, and not related to general philanthropic endeavors. The commissioner shall seek public input regarding the range of options to be explored and the accountability measures.

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(b) The recommendations must include a procedure by which each nonprofit health plan company would periodically and uniformly report to the state and to the public regarding the company's compliance with the requirements.

ARTICLE 4

HEALTH INSURANCE PURCHASING AND AFFORDABILITY

Section 1. [62U.01] DEFINITIONS.

Subdivision 1. Applicability. For purposes of this chapter, the terms defined in this section have the meanings given, unless otherwise specified.

Subd. 2. Advisory committee. "Advisory committee" means the Health Benefit Set and Design Advisory Committee established in section 62U.055.

Subd. 3. Clinically effective. "Clinically effective" means that the use of a particular health technology or service improves or prevents a decline in patient clinical status, as measured by medical condition, survival rates, and other variables, and that the use of the particular technology or service demonstrates a clinical or outcome advantage over alternative technologies or services.

Subd. 4. Commission. "Commission" means the Health Care Transformation Commission established in section 62U.04.

Subd. 5. Cost-effective. "Cost-effective" means that the economic costs of using a particular service, device, or health technology to achieve improvement or prevent a decline in a patient's health outcome are justified given the comparison to both the economic costs and the improvement in patient health outcome resulting from the use of an alternative service, device, or technology, or from not providing the service, device, or technology.

Subd. 6. Health plan. "Health plan" means a health plan as defined in section 62A.011.

Subd. 7. Health plan company. "Health plan company" has the meaning provided in section 62Q.01, subdivision 4.

Subd. 8. Health technology. "Health technology" means medical and surgical devices and procedures, medical equipment, and diagnostic tests.

Subd. 9. State health care program. "State health care program" means the medical assistance, MinnesotaCare, and general assistance medical care programs.

Subd. 10. Third-party administrators. "Third-party administrators" means a vendor of risk management services or an entity administering a self-insurance or health insurance plan under section 60A.23.

Sec. 2. [62U.04] HEALTH CARE TRANSFORMATION COMMISSION.

Subdivision 1. Creation. The Health Care Transformation Commission is created for the purpose of coordinating the health care transformation activities within Minnesota.

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Subd. 2. Members. (a) The Health Care Transformation Commission shall consist of ten members who are appointed as follows:

(1) three nonlegislators appointed by the Subcommittee on Committees of the Committee on Rules and Administration of the senate;

(2) three nonlegislators appointed by the speaker of the house of representatives; and

(3) four members appointed by the governor, two of whom shall be state commissioners from the agencies listed in section 15.01.

(b) The appointed members who are not commissioners must have expertise in health care financing, health care delivery, health care quality improvement, health economics, actuarial science, business operations, health disparities, culturally competent care, social services funded through medical assistance and property tax resources, or be an informed consumer representative.

(c) If a member is no longer able or eligible to perform the required duties, a new member shall be appointed by the entity that appointed the outgoing member.

Subd. 3. Operations of the commission. (a) The commission shall convene on or before July 1, 2008, following the initial appointment of the members.

(b) The commission shall elect a chair among its members.

(c) The commission members shall not be compensated for commission activities except for actual expenses incurred in the performance of their duties. Expenses shall be compensated according to section 15.0575.

Subd. 4. Immunity of liability. No member of the commission shall be held civilly liable for an act or omission by that member if the act or omission was in good faith and within the scope of the member's responsibilities under this chapter.

Subd. 5. Responsibilities of the commission. The Health Care Transformation Commission shall:

(1) collect data from providers on health care prices and quality, including measures of process, outcomes, and patient satisfaction, and publish comparative price and quality information in a manner that is easily understandable and accessible to consumers;

(2) develop a design and implementation plan for health care payment system reform as required under sections 62U.11 and 62U.12;

(3) establish a uniform definition and methodology for calculating the relative utilization and health care costs for providers in treating patients, including but not limited to patients with coronary artery and heart disease, diabetes, asthma, chronic obstructive pulmonary disease, depression, and other chronic conditions. The methodology must include risk adjustment mechanisms that address at least the following factors:

(i) the health status of the individual in the year the individual enters the provider's care;

(ii) a worsening of the patient's health condition that was not reasonably preventable by action that the provider could have taken;

(iii) socioeconomic and cultural factors that bear directly on the cost of care; and

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(iv) the percentage of individuals served by the provider or care system whose care is paid for by public health insurance programs;

(4) provide education, technical assistance, and materials necessary for providers to participate in the restructured payment system;

(5) implement and administer the payment system reform;

(6) make recommendations to the governor and legislature as to additional actions that are needed in order to successfully achieve health care transformation in Minnesota;

(7) consult and coordinate with the commissioners of health and human services, health care providers, health plan companies, organizations that work to improve health care quality in Minnesota, consumers, and employers;

(8) establish a Uniform Outcome Measures Working Group and make recommendations on community benefit standards, as required under article 3, section 2;

(9) establish uniform definitions for packages of services used to provide care to patients, including but not limited to patients with coronary artery and heart disease, diabetes, asthma, chronic obstructive pulmonary disease, depression, and other chronic conditions, for the purpose of establishing package pricing; and

(10) carry out other duties assigned in this chapter and this article.

Subd. 6. Powers of the commission. The commission shall have the power to:

(1) advise the commissioner of human services on federal policy changes desirable for furthering transformation of Minnesota's health care system. The commissioner shall also consult with the legislature on any federal changes; and

(2) contract with other organizations to carry out all or part of its responsibilities.

Subd. 7. Standard benefit set and design. (a) Based on the recommendations submitted by the Health Benefit Set and Design Advisory Committee, the commission shall establish a standard benefit set and design by July 1, 2009.

(b) The standard health benefit set and design must meet the requirements described in section 62U.055.

(c) Prior to establishing the standard benefit set and design, the commission shall convene public hearings throughout the state.

Subd. 8. Reports. Beginning January 15, 2010, and each January 15 thereafter, the commission shall submit an annual report to the governor and legislature on the following:

(1) the extent to which health care providers have reduced their costs and fees;

(2) the extent to which costs and cost growth are likely to be maintained or reduced in future years;

(3) the extent to which the quality of health care services has improved;

(4) the extent to which all Minnesotans have access to quality, affordable health care; and

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(5) recommendations on additional actions that are needed in order to successfully achieve health care transformation in Minnesota.

Subd. 9. Expiration. The commission shall expire December 31, 2013.

Sec. 3. [62U.055] STANDARD BENEFIT SET AND DESIGN.

Subdivision 1. Creation. The Health Care Transformation Commission shall convene a health benefit set and design advisory committee to make recommendations to the legislature on a standard benefit set and design. The advisory committee shall consist of seven members. The members shall be appointed by the commission and must have expertise in benefit design and development, actuarial analysis, or knowledge relating to the analysis of the cost impact of coverage of specified benefits.

Subd. 2. Operations of the committee. (a) The advisory committee shall convene on or before September 1, 2008, upon the appointment of the initial committee and must meet at least once a year, and at other times as necessary.

(b) The commission shall provide office space, equipment and supplies, and technical support to the committee.

(c) The committee shall be governed by section 15.059, except the committee shall not expire. Upon the expiration of the Health Care Transformation Commission, the Health Benefit Set and Design Advisory Committee shall continue to exist under the oversight of the commissioner of health.

Subd. 3. Immunity of liability. No member of the committee shall be held civilly liable for an act or omission by that member if the act or omission was in good faith and within the scope of the member's responsibilities under this chapter.

Subd. 4. Duties of the committee. (a) By January 1, 2009, the committee shall develop and submit to the legislature a benefit set and design that provides individuals access to a broad range of health care services, including preventive health care, without incurring severe financial loss as a result of serious illness or injury. The benefit set must include necessary health care services, procedures, and diagnostic tests that are scientifically proven to be both clinically effective and cost effective. In establishing the benefit set, the committee may contract with the Institute for Clinical Systems Improvement (ICSI) to assemble existing scientifically based practice standards. The committee shall consider cultural, ethnic, and religious values and beliefs to ensure that the health care needs of all Minnesota residents will be addressed in the benefit set.

(b) The benefit set must identify and include preventive services, chronic care coordination services, and early diagnostic tests that, if included in the benefit set, with minimal or no cost-sharing requirements, would result in savings that are equal to or greater than the cost of providing the services.

(c) The benefit set must include evidence-based outpatient care for asthma, heart disease, diabetes, and depression with no cost-sharing requirements, or with minimal cost-sharing requirements that would not impose an economic barrier to accessing the care. The committee may consult with ICSI in identifying standards for care.

(d) The benefit design must be the only benefit plan eligible for premium subsidies under section 62U.09. In addition, each health plan company that issues coverage in the individual or small employer market in this state must offer at least one health plan that complies with the benefit design in each of these two markets in which it issues coverage. The benefit design must establish a limited number of maximum cost-sharing variations based upon deductibles and maximum out-of-pocket costs. There must be no maximum lifetime benefit.

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Subd. 5. Continued review. The committee shall review the benefit set and design on an ongoing periodic basis and shall adjust the benefit set and design as necessary, to ensure that the benefit set and design continues to be safe, effective, and scientifically based.

Sec. 4. [62U.06] GOALS FOR UNIVERSAL COVERAGE; CONTINGENT INDIVIDUAL RESPONSIBILITY REQUIREMENT.

Subdivision 1. Phase-in goals. The state's phase-in goals for progress toward universal health coverage for Minnesota residents are:

(1) 94 percent insured by end of fiscal year 2009;

(2) 96 percent insured by end of fiscal year 2011;

(3) 97 percent insured by end of fiscal year 2012; and

(4) 98 percent insured by end of fiscal year 2013 and thereafter.

Subd. 2. Measurement of percent insured. The determination of the percent of Minnesota residents insured must be based on an annual survey of the Minnesota population younger than age 65 to be conducted or contracted for by the commissioner of health which must include questions related to the type of insurance, amount of cost-sharing, and potential barriers to public program enrollment.

Subd. 3. Contingent individual responsibility requirement. (a) If the increased affordability, cost containment, insurance reform, and voluntary efforts provided for under this act fail to achieve universal coverage, an individual responsibility requirement must have been proven to be necessary.

(b) If any one of the phase-in goals specified in subdivision 1 for fiscal year 2011 or later is not met, as determined by the commissioner of health, in spite of implementation of the increased affordability, cost containment, insurance reform, and voluntary efforts provided for under sections 62U.01 to 62U.09, an individual responsibility requirement, requiring every Minnesota resident to obtain and maintain health coverage from a public or private sector source of the person's choice, must become effective 12 months after the end of that fiscal year, provided that the commissioner certifies that health plans that meet the affordability standard under section 62U.08 are available to Minnesotans.

(c) Failure to comply with the individual responsibility requirement is not a crime, but must subject the person to a financial penalty to be specified in law.

(d) An individual need not comply with the individual responsibility requirement if the individual objects to the requirement on the basis of a conscientiously held religious belief or bona fide religious practice. In the case of a minor child, this paragraph applies to the belief or practice of the child's parents. An individual may, but is not required to, apply to the commissioner of health for a written waiver of the requirement based upon this paragraph. The commissioner shall approve the waiver if the applicant provides satisfactory proof of eligibility for the waiver under this paragraph.

(e) An individual with gross household income that exceeds 400 percent of the federal poverty guidelines need not comply with the individual responsibility mandate, if the commissioner certifies that a health plan is not available in the individual's geographic area for which the sum of premiums, deductibles, and other out-of-pocket costs paid for health coverage by the individual does not exceed ten percent of gross income.

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Sec. 5. [62U.07] PROJECTED SPENDING.

Subdivision 1. Projected spending baseline. (a) The commissioner of health shall calculate the annual projected total health care spending for the state and establish a health care spending baseline beginning for the year 2008 and for the next five years based on the annual projected growth in spending.

(b) In establishing the health care spending baseline, the commissioner shall use the Center of Medicare and Medicaid Services forecast for total growth in national health care expenditures, and adjust this forecast to reflect the demographics, health status, and other factors deemed necessary by the commissioner. The commissioner shall contract with an actuarial consultant to make recommendations as to the adjustments needed to specifically reflect projected spending for Minnesota residents.

(c) The commissioner may adjust the projected baseline as necessary to reflect any updated federal projections or account for unanticipated changes in federal policy.

Subd. 2. Actual spending. By February 15 of each year, beginning February 15, 2010, the commissioner shall determine the actual private and public health care spending for the calendar year preceding the current calendar year and shall determine the difference between the projected spending as determined under subdivision 1 and the actual spending for that year. The actual spending must be certified by an independent actuarial consultant.

Subd. 3. Publication of spending. By February 15 of each year, beginning February 15, 2010, the commissioner shall publish in the State Register the projected spending baseline, including any adjustments, and the actual spending for the preceding year.

Sec. 6. [62U.08] AFFORDABILITY STANDARD.

Subdivision 1. Definition of affordability. For purposes of this section, coverage is "affordable" if the sum of premiums, deductibles, and other out-of-pocket costs paid by an individual or family for health coverage does not exceed the applicable percentage of the individual or family's gross monthly income specified in subdivision 2.

Subd. 2. Affordability standard. The following affordability standard is established for individuals and households with gross family incomes of 400 percent of the federal poverty guidelines or less:

AFFORDABILITY STANDARD

Federal Poverty Percent of Average

Guideline Range Gross Monthly Income

0-33% minimum

33-54% 1.1%

55-81% 1.2%

82-109% 1.6%

110-136% 2.4%

137-164% 2.9%

165-191% 3.9%

192-219% 4.6%

220-248% 5.4%

248-274% 6.0%

275-300% 6.0%

301-324% 6.5%

325-349% 7.2%

350-374% 7.8%

375-400% 8.0%

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Sec. 7. [62U.09] EMPLOYEE SUBSIDIES FOR HEALTH COVERAGE.

Subdivision 1. Establishment of subsidy program. The commissioner of human services shall establish a subsidy program for eligible employees and dependents to provide assistance in purchasing health coverage.

Subd. 2. Eligible employees and dependents; incomes not exceeding 300 percent of the federal poverty guidelines. In order to be eligible for a subsidy under this section, an employee or dependent with a gross household income that does not exceed 300 percent of the federal poverty guidelines must:

(1) be covered by employer-subsidized health coverage, as defined in section 256L.07, subdivision 2, paragraph (c), that meets the benefits set and design requirements established under section 62U.04; and

(2) meet all eligibility criteria for the MinnesotaCare program established under chapter 256L, except for the requirements related to:

(i) no access to employer-subsidized coverage under section 256L.07, subdivision 2; and

(ii) no other health coverage under section 256L.07, subdivision 3.

Subd. 3. Eligible employees and dependents; incomes greater than 300 percent but not exceeding 400 percent of the federal poverty guidelines. In order to be eligible for a subsidy under this section, an employee or dependent with a gross household income that is greater than 300 percent but does not exceed 400 percent of the federal poverty guidelines must:

(1) be covered by health coverage that meets the benefits set and design requirements established under section 62U.04; and

(2) meet all eligibility criteria for the MinnesotaCare program established under chapter 256L, except for the requirements related to:

(i) no access to employer-subsidized coverage under section 256L.07, subdivision 2;

(ii) no other health coverage under section 256L.07, subdivision 3; and

(iii) gross household income under section 256L.04, subdivisions 1 and 7.

Subd. 4. Amount of subsidy. The subsidy must equal the amount the employee is required to pay for health coverage for the employee and any dependents, including premiums, deductibles, and other cost sharing, minus an amount based on the affordability standard specified in section 62U.08. The maximum subsidy must not exceed the amount of the subsidy that would have been provided under the MinnesotaCare program, if the employee and any dependents were eligible for that program.

Subd. 5. Payment of subsidy. The commissioner shall pay the subsidy amount for an employee and any dependents to the employee's health plan company, and this payment shall be credited toward the employee's share of premium. Any additional amount paid by the commissioner to the employee's health plan company that exceeds the employee's share of premium must be credited first toward the employee deductible and then toward any employee cost-sharing obligation.

EFFECTIVE DATE. This section is effective July 1, 2010.

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Sec. 8. [62U.11] PAYMENT RESTRUCTURING; PAYMENTS BASED ON QUALITY AND EFFICIENCY OF CARE.

Subdivision 1. Development. By January 15, 2009, the Health Care Transformation Commission shall report to the legislature in the manner specified in section 3.195 on rules to implement a payment system that links the level of payments to providers to the quality and efficiency of care. The payment system must incorporate payments to primary care physicians, specialty care physicians, health care clinics, hospitals, and other providers who provide services included in the evidence-based benefit set and design developed under section 62U.04. Before January 1, 2010, the commission must adopt rules necessary to implement this payment system.

Subd. 2. Payment system criteria. The payment system must meet the following criteria:

(1) providers meeting specified targets, or who demonstrate a significant amount of improvement over time, must be eligible for quality and efficiency-based payments that are in addition to existing payment levels;

(2) priority must be placed on measures of health care outcomes, rather than process measures, wherever possible;

(3) quality measures for primary care providers must focus on preventive services, coronary artery and heart disease, diabetes, asthma, chronic obstructive pulmonary disease, depression, and other conditions or procedures for which, in the determination of the commission, improved outcomes will lead to significant cost savings;

(4) quality measures for specialty care must be designated by the commission, and initially based on quality indicators measured and reported publicly by specialty societies;

(5) hospital payments must be adjusted for quality and efficiency using existing measures where available, which focus on health conditions or procedures for which, in the determination of the commission, improved outcomes will lead to significant cost savings;

(6) to the greatest extent possible, the quality targets used in clause (1) must be adjusted for variation in patient population to reduce incentives for health care providers to locate outside of areas with high rates of poverty, a low patient base, or racial or cultural diversity;

(7) payment methods must adjust for racial, ethnic, or language factors that affect outcomes; and

(8) other indicators of care quality and efficiency must be incorporated where appropriate. These indicators may include care infrastructure, collection and reporting of results, disparities between racial and ethnic populations, and measures of overall cost of care for individuals.

Subd. 3. Uniform measures required. Once the payment system required by this section is established, health plan companies shall not require providers to use and report health plan company-specific quality and outcome measures. This shall not, however, limit the ability of the commissioner of human services to establish by contract and monitor, as part of its quality assurance obligations for state health care programs, outcome and performance measures for nonmedical services and health issues likely to occur in low-income populations or racial or cultural groups disproportionately represented in state health care program enrollment that would likely be underrepresented when using traditional measures that are based on longer-term enrollment.

Subd. 4. Implementation. (a) By January 1, 2010, the commissioner of human services shall implement this payment system for all state health care program enrollees served under fee-for-service, and shall require demonstration providers serving state health care program enrollees to implement this payment system by January 1, 2010, for all state health care program enrollees served under managed care and county-based purchasing.

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(b) By January 1, 2010, the commissioner of employee relations shall implement this payment system for all participants in the State Employee Group Insurance Program.

Sec. 9. [62U.12] PAYMENT RESTRUCTURING; CARE COORDINATION PAYMENTS FOR HEALTH CARE HOMES.

Subdivision 1. Development. The Health Care Transformation Commission, in cooperation with the commissioners of health and human services, shall develop a payment system that provides care coordination payments to health care providers. In order to be eligible for a care coordination payment, a health care provider must be certified as a health care home by the commissioners of human services and health based on the certification standards for health care homes established under section 256B.0754.

Subd. 2. Care coordination fee. (a) Under the payment system, health care homes must receive a per-person per-month care coordination fee for providing care coordination services and utilizing care coordinators, as specified in section 256B.0752, subdivisions 3 and 7.

(b) The care coordination payment system must vary the fees paid by thresholds of care complexity, with the highest fees being paid for care provided to individuals requiring the most intensive care coordination, such as those with very complex health care needs or several chronic conditions.

(c) In setting care coordination fees, group purchasers as defined in section 62J.03, subdivision 6, shall consider the additional time and resources needed by patients with limited English-language skills, cultural differences, or other barriers to health care.

(d) Care coordination fees may be phased in, and must be applied first to persons who have complex or chronic health conditions.

Subd. 3. Quality-based payments. The quality-based payments under section 62U.11, when established, must also be included in the care coordination payment system.

Subd. 4. Implementation. (a) By July 1, 2009, the commissioner of human services shall implement this payment system for all state health care program enrollees served under fee-for-service as provided under section 256B.0753 and shall require demonstration providers serving state health care program enrollees to implement this payment system by July 1, 2009, for all state health care program enrollees served under managed care and county-based purchasing.

(b) By July 1, 2009, the commissioner of employee relations shall implement this payment system for all participants in the State Employee Group Insurance Program.

Sec. 10. [62U.13] COORDINATION WITH THE PRIVATE SECTOR.

In developing the payment systems required under sections 62U.11 and 62U.12, the Health Care Transformation Commission shall consult and coordinate with the commissioners of human services and health, organizations that work to improve health care quality in Minnesota, health care providers, health plan companies, consumers, and employers and other payors. The commissioners shall publicize and promote the payment systems required under sections 62U.11 and 62U.12, and shall make technical assistance available to entities adopting the payment systems.

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Sec. 11. [62U.14] PAYMENT RESTRUCTURING: PROVIDER INNOVATION TO IMPROVE COSTS AND QUALITY.

Subdivision 1. Development. (a) By January 15, 2009, the Health Care Transformation Commission shall report to the legislature recommendations for advancing an innovative payment system for providing necessary services to patients, including but not limited to patients with coronary artery and heart disease, diabetes, asthma, chronic obstructive pulmonary disease, and depression.

(b) By January 1, 2010, the Health Care Transformation Commission shall report to the legislature additional changes necessary to accomplish comprehensive payment reform designed to support an innovative payment system to reduce costs and improve quality.

(c) By January 1, 2010, the Health Care Transformation Commission, in cooperation with the commissioner of human services, shall develop a comparable payment system for nonelderly and nondisabled enrollees in the state's public health care programs. This must include an assessment of the impact on enrollee access to quality care and the financial status of the state's health care programs.

(d) By January 1, 2011, the Health Care Transformation Commission shall develop rules to implement a comprehensive payment system that encourages provider innovation to reduce costs and improve quality.

Subd. 2. Encounter data. (a) Beginning September 1, 2009, and every three months thereafter, all health plan companies and third-party administrators shall submit encounter data to the Health Care Transformation Commission. The data shall be submitted in a form and manner specified by the commission subject to the following requirements:

(1) the data must be de-identified data as described under the Code of Federal Regulations, title 45, section 164.514;

(2) the data for each encounter must include an identifier for the patient's health care home if the patient has selected a health care home; and

(3) except for the identifier described in clause (2), the data must not include information that is not included in a health care claim or equivalent encounter information transaction that is required under section 62J.536.

(b) The commission shall only use the data submitted under paragraph (a) for the purpose of carrying out its responsibilities in designing and implementing a payment restructuring system. If the commission contracts with other organizations or entities to carry out any of its duties or responsibilities described in this chapter, the contract must require that the organization or entity maintain the data that it receives according to the provisions of this section.

(c) Data on providers collected under this subdivision are private data on individuals or nonpublic data, as defined in section 13.02. Notwithstanding the definition of summary data in section 13.02, subdivision 19, summary data prepared under this section may be derived from nonpublic data. The commission shall establish procedures and safeguards to protect the integrity and confidentiality of any data that it maintains.

(d) The commission shall not publish analyses or reports that identify, or could potentially identify, individual patients.

(e) The commission shall report back to providers analyses and reports that identify specific providers. The provider shall have 21 days to review the data for accuracy.

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(f) The commission shall establish an appeals process to resolve disputes from providers regarding the accuracy of the analyses and reports.

Subd. 3. Utilization and health care costs. (a) The commission shall establish a uniform definition and methodology for calculating the relative utilization and health care costs of providers. The methodology must include risk adjustment mechanisms that address at least the following factors:

(1) the health status of the individual in the year the individual enters the provider's care;

(2) a worsening of the patient's health condition that was not reasonably preventable by action that the provider could have taken;

(3) socioeconomic and cultural factors that bear directly on the cost of care; and

(4) the percentage of individuals served by the provider or care system whose care is paid for by public health insurance programs. The risk adjustment must be developed according to generally accepted risk adjustment methodologies.

(b) Beginning April 1, 2010, the commission shall disseminate information to providers on their utilization and cost in comparison to an appropriate peer group.

(c) The commission shall develop a system to index providers based on their risk-adjusted resource use and on quality of care for the conditions specified in subdivision 1, paragraph (a). In developing this system, the commission shall consult and coordinate with health care providers as defined in section 62J.03, subdivision 8, health plan companies, and organizations that work to improve health care quality in Minnesota.

Subd. 4. Care package pricing. (a) The commission shall develop a standard method and format for providers to use for submitting package prices for the conditions specified in subdivision 1, paragraph (a). The method shall be published in the State Register and must be made available to all providers.

(b) Beginning July 1, 2010, using the information developed in subdivision 3, providers may submit package prices to the commission for the cost of providing necessary services for the conditions specified in subdivision 1, paragraph (a), based on their disclosed prices under section 62U.15 combined with their actual risk-adjusted resource use for the most recent analytic period. The package prices submitted must reflect the providers' commitment to manage the providers' treatment of the patients and chronic conditions specified in subdivision 1, paragraph (a).

(c) Until January 1, 2013, no provider shall submit package prices for the risk-adjusted total cost of care for the conditions specified in subdivision 1, paragraph (a), that represents an increase of more than the increase in the previous calendar year's Consumer Price Index for all urban consumers plus two percentage points, or a decrease of more than 15 percent below the providers' risk-adjusted cost of care calculated based on the providers' average pricing levels for the previous calendar year.

(d) Beginning January 1, 2011, the commission shall annually publish the results of the process described in paragraph (b), and shall include only providers who choose to submit package prices. The results that are published must be on a risk-neutral basis.

Subd. 5. Provider assistance. The commissioner shall provide education and technical assistance to providers on how to calculate and submit package prices for the risk-adjusted cost of care for the conditions specified in subdivision 1, paragraph (a).

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Subd. 6. Payments. The commission shall establish a method by which providers who have submitted package prices shall be paid for their cost of care in treating the conditions specified in subdivision 1, paragraph (a), with periodic adjustments to the payment they receive to reflect their actual risk-adjusted cost relative to the package price. The commission shall report to the legislature recommendations on how to implement the adjustments.

Subd. 7. Implementation. By January 1, 2012, or upon federal approval, whichever is later:

(1) the commissioner of human services shall pay providers based on their package prices for all enrollees in the state's public health care programs;

(2) the commissioner of employee relations shall pay providers based on their package prices for all participants in the state employee group insurance program;

(3) all political subdivisions, as defined in section 13.02, subdivision 11, that offer health benefits to their employees must pay providers based on their package prices for all participants, or purchase a health plan that uses this payment system;

(4) all health plan companies shall use the information and methods developed under this section to develop health plans that encourage consumers to use high-quality, low-cost providers; and

(5) health plan companies that issue health plans in the individual market or the small employer market must offer at least one health plan that uses the information developed under subdivision 3 to establish financial incentives for consumers to use high-quality, low-cost providers through enrollee cost-sharing or selective provider networks.

Sec. 12. [62U.15] PROVIDER PRICE AND QUALITY DISCLOSURE.

(a) By January 1, 2009, and annually thereafter, each physician clinic and hospital shall establish a list of prices for each health care procedure, service, package of services, or basket of care the provider provides and provide this information electronically to the Health Care Transformation Commission in the form and manner specified by the commission, and the commission shall provide this information at no cost to the public, upon request. Providers may update this list periodically to reflect new services, supply cost changes, and other factors.

(b) The commission shall develop a plan to expand the provisions of paragraph (a) to all health care providers by January 1, 2010. Notwithstanding this provision, health plan companies shall submit provider price information to the commission for the purposes of paragraph (a), for providers who do not submit prices to the commission for analysis and provider cost performance purposes.

Sec. 13. [62U.16] PROVIDER PRICING.

(a) Effective July 1, 2010, no health care provider subject to the requirements of section 62U.14 shall vary the payment amount that the provider accepts as full payment for a health care service based upon the identity of the payer, a contractual relationship with a payer, the identity of the patient, or whether the patient has coverage through a group purchaser.

(b) This section does not apply to services provided to patients who are enrolled in Medicare, workers' compensation, no fault auto insurance, or a state public health care program.

(c) This section does not affect the right of a provider to provide charity care or care for a reduced price due to financial hardship of the patient or due to the patient being a relative or friend of the provider.

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Sec. 14. AMENDMENTS TO CURRENT HEALTH BENEFIT SETS.

The commissioners of health, commerce, and employee relations shall report to the legislature under Minnesota Statutes, section 3.195, on necessary changes to current mandated benefit sets to align these with the standard benefit set and design developed by the Health Care Transformation Commission established in Minnesota Statutes, section 62U.04.

Sec. 15. RISK ADJUSTMENT.

The Risk Adjustment Advisory Council shall review Minnesota Comprehensive Health Association financing and whether the affordability needs of persons with health problems can be addressed through guaranteed issue, with no premium penalty for health history and not allowing preexisting condition limitations. This must include assessing whether stability of the insurance market could be managed through risk sharing that transfers funds between health plan companies. The goal is to discontinue Minnesota Comprehensive Health Association assessment and replace it with a broader and fairer funding mechanism, preferably one that does not involve a fee-based mechanism. The council shall make recommendations to the legislature by November 1, 2009. The Risk Adjustment Advisory Council shall include representatives of insurance companies, the Minnesota Comprehensive Health Association's board of directors, safety net providers, and consumer representatives. It shall be convened by the commissioner of commerce with staffing from that agency and the Minnesota Department of Health.

Sec. 16. GLOBAL MODELING OF HEALTH CARE REFORMS.

To the extent of available appropriations, the commissioner of health shall award a grant to the University of Minnesota School of Public Health, Health Policy and Management Division, to develop a model that will assess the impact of proposed health care reforms or major health care-related legislation on all sectors of the health care system, including access to the full range of health care, public health, public and private health insurance coverage, long-term and continuing care, programs for persons with disabilities, social services, and other sectors related to Minnesotans' health. The model must be:

(1) developed with safeguards to make sure that the model and its assumptions and formulas are based on valid and objective data, research, and expert opinions;

(2) designed to enable policy makers and state agencies to enter into the model and study each component of health care reform, including access to all aspects of health care services, health care homes, payment reforms, populationwide prevention, health status of Minnesotans, and incidence of chronic disease;

(3) capable of assessing the interaction of different legislative and policy changes to determine the net effect on costs, access, and health status within sectors of the health care system, and the net overall impact across all sectors;

(4) designed to identify risks of unpredictable or unintended consequences, cost shifting between or within sectors of the health care system, and opportunities to make changes in one sector that will produce a benefit to other sectors; and

(5) capable of being adjusted based on both the proposed changes and the resulting impact in the following areas:

(i) access to all aspects of health care services;

(ii) health status of Minnesotans, including the incidence of chronic disease, health disparities, and risk factors such as obesity and smoking;

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(iii) utilization of preventive care services such as screenings, immunizations, and physical examinations; and

(iv) costs and cost distribution, including costs to individuals and families, businesses, and government, including for total cost of health care, health-related services, and social services.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 17. ECONOMIC ANALYSIS OF HEALTH CARE REFORM PLANS.

(a) To the extent of available appropriations, the commissioner of health shall award a grant to the University of Minnesota School of Public Health, Health Policy and Management Division, to conduct a study and economic analysis of costs and benefits of various health care reform proposals, including an analysis of the recommendations of the Legislative Health Care Access Commission, the governor's Health Care Transformation Task Force, and a single statewide plan.

(b) The analysis of each proposal must measure the impact on total public and private health care spending in Minnesota that would result from each proposal, including whether there are savings or additional costs due to:

(1) increased or reduced insurance, billing, underwriting, marketing, and other administrative functions;

(2) timely and appropriate use of medical care;

(3) market-driven or negotiated prices on medical services and products, including pharmaceuticals;

(4) a shortage or excess capacity of medical facilities and equipment;

(5) increased utilization, better health outcomes, increased wellness due to prevention, early intervention, and health-promoting activities;

(6) increases or decreases in administrative expenses and health care expenses due to payment reforms;

(7) increases or decreases in administrative expenses and health care expenses due to coordination of care;

(8) increases or decreases in up-front and long-term utilization due to access to comprehensive medically necessary benefits, including dental care, mental health care, prescription drugs, and other health care; and

(9) non-health care impacts on state and local expenditures such as reduced out-of-home placement or crime costs due to mental health or chemical dependency coverage.

(c) The study must also analyze for each proposal the number of Minnesotans without access to health care, including those lacking access to certain types of medical care, such as dental care, mental health care, and prescription drugs.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 18. APPROPRIATION.

$15,000,000 is appropriated in fiscal year 2009 from the health care access fund to the Health Care Transformation Commission. This is a onetime appropriation.

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ARTICLE 5

PUBLIC HEALTH

Section 1. [145.986] STATEWIDE HEALTH IMPROVEMENT PROGRAM.

Subdivision 1. Goals. The initial goals of the public health improvement program are to reduce the percentage of Minnesotans who are obese or overweight to less than 50 percent by the year 2020 and to reduce tobacco smoking by two percent annually starting in 2011. By 2011, and considering available funding, the commissioner of health, in consultation with the State Community Health Advisory Committee established in section 145A.10, subdivision 10, and other stakeholders, may make recommendations as to future goals related to alcohol use and illegal drug use.

Subd. 2. Funding local communities. Beginning January 1, 2009, the commissioner of health must provide funding to community health boards to convene, coordinate, and lead locally developed programs targeted at achieving measurable health improvement goals. Funding to each community health board will be distributed based on a per capita formula, with a base allocation of $50,000 to each community health board that receives funding. By January 15, 2011, the commissioner of health must recommend whether additional funding should be distributed to community health boards based on health disparities demonstrated in the populations served.

Subd. 3. Outcomes. (a) The commissioner of health must set measurable outcomes to meet the goals specified in subdivision 1, and annually review the progress of local communities in meeting these outcomes. The commissioner of health must provide technical assistance and corrective action plans to ensure that local communities are making sufficient progress.

(b) The commissioner of health must measure current public health data, using existing measures and data collection systems when available, to determine baseline data against which progress shall be monitored.

Subd. 4. Evaluation. The commissioner shall conduct an evaluation of the statewide health improvement program using outcome measures established in subdivision 3. Local communities shall cooperate with the commissioner in the evaluation of this program.

Sec. 2. APPROPRIATIONS.

$20,000,000 is appropriated from the health care access fund in fiscal year 2009 to the commissioner of health to implement the statewide health improvement program under Minnesota Statutes, section 145.986. Beginning January 1, 2009, the commissioner of health shall provide funding to community health boards to implement local public health programs."

Delete the title and insert:

"A bill for an act relating to health care reform; increasing affordability and continuity of care for state health care programs; modifying health care provisions; providing subsidies for employee share of employer-subsidized insurance in certain cases; establishing the Health Care Transformation Commission; creating an affordability standard; implementing a statewide health improvement program; requiring an evaluation of mandated health benefits; requiring a payment system to encourage provider innovation; requiring studies and reports; appropriating money; amending Minnesota Statutes 2006, sections 256B.057, subdivision 8; 256B.69, by adding a subdivision; 256L.05, by adding a subdivision; 256L.06, subdivision 3; 256L.07, subdivision 3; 256L.15, by adding a

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subdivision; Minnesota Statutes 2007 Supplement, sections 256.01, subdivision 2b; 256B.056, subdivision 10; 256L.03, subdivisions 3, 5; 256L.04, subdivisions 1, 7; 256L.05, subdivision 3a; 256L.07, subdivision 1; 256L.15, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 145; 256B; proposing coding for new law as Minnesota Statutes, chapter 62U; repealing Minnesota Statutes 2006, section 256L.15, subdivision 3."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 3569, A bill for an act relating to workers' health; directing the University of Minnesota to study workers' health including lung health; appropriating money.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

H. F. No. 3976, A bill for an act relating to state government; making changes to continuing care; agency management; state-operated services; children and family services; health care programs; Department of Health provisions; appropriating money; amending Minnesota Statutes 2006, sections 144.1222, subdivision 1a, by adding subdivisions; 157.16, as amended; 256.741, subdivisions 2, 2a, 3; 256.969, subdivisions 2b, 20; 256B.0571, subdivisions 8, 9; 256B.0621, subdivisions 2, 6, 10; 256B.0625, subdivisions 3c, 13e; 256B.0924, subdivisions 4, 6; 256B.19, subdivision 1d; 256B.431, subdivision 23; 256B.434, by adding a subdivision; 256B.441, by adding a subdivision; 256B.69, subdivisions 5a, 6; 256D.44, subdivisions 2, 5; 256L.12, subdivision 9; 518A.50; 518A.53, subdivision 5; Minnesota Statutes 2007 Supplement, sections 16A.724, subdivision 2; 256.01, subdivision 2; 256.741, subdivision 1; 256B.0625, subdivision 20; 256B.0631, subdivisions 1, 3; 256B.199; 256J.621; 256L.04, subdivisions 1, 7; 256L.07, subdivision 1; Laws 2006, chapter 282, article 20, section 37, as amended; Laws 2007, chapter 147, article 2, section 21; article 19, sections 3, subdivisions 1, 4, 6; 4, subdivisions 2, 4; proposing coding for new law in Minnesota Statutes, chapters 246B; 256B; repealing Minnesota Statutes 2006, sections 62J.58; 256.741, subdivision 15; 256B.441, subdivision 25; Minnesota Statutes 2007 Supplement, sections 256.962, subdivision 5; 256.969, subdivision 27; 256B.057, subdivision 2c; 256B.441, subdivisions 1, 14a, 30, 31, 48, 49, 50, 51, 52, 53, 54, 55, 56, 58; 256L.07, subdivision 7.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

CONTINUING CARE

Section 1. Minnesota Statutes 2006, section 256B.0621, subdivision 2, is amended to read:

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Subd. 2. Targeted case management; definitions. For purposes of subdivisions 3 to 10, the following terms have the meanings given them:

(1) "home care service recipients" means those individuals receiving the following services under sections 256B.0651 to 256B.0656: skilled nursing visits, home health aide visits, private duty nursing, personal care assistants, or therapies provided through a home health agency;

(2) "home care targeted case management" means the provision of targeted case management services for the purpose of assisting home care service recipients to gain access to needed services and supports so that they may remain in the community;

(3) "institutions" means hospitals, consistent with Code of Federal Regulations, title 42, section 440.10; regional treatment center inpatient services, consistent with section 245.474; nursing facilities; and intermediate care facilities for persons with developmental disabilities;

(4) "relocation targeted case management" includes the provision of both county targeted case management and public or private vendor service coordination services for the purpose of assisting recipients to gain access to needed services and supports if they choose to move from an institution to the community. Relocation targeted case management may be provided during the lesser of:

(i) the last 180 consecutive days of an eligible recipient's institutional stay; or

(ii) the limits and conditions which apply to federal Medicaid funding for this service; and

(5) "targeted case management" means case management services provided to help recipients gain access to needed medical, social, educational, and other services and supports.

Sec. 2. Minnesota Statutes 2006, section 256B.0621, subdivision 6, is amended to read:

Subd. 6. Eligible services. (a) Services eligible for medical assistance reimbursement as targeted case management include:

(1) assessment of the recipient's need for targeted case management services and for persons choosing to relocate, the county must provide service coordination provider options at the first contact and upon request;

(2) development, completion, and regular review of a written individual service plan, which is based upon the assessment of the recipient's needs and choices, and which will ensure access to medical, social, educational, and other related services and supports;

(3) routine contact or communication with the recipient, recipient's family, primary caregiver, legal representative, substitute care provider, service providers, or other relevant persons identified as necessary to the development or implementation of the goals of the individual service plan;

(4) coordinating referrals for, and the provision of, case management services for the recipient with appropriate service providers, consistent with section 1902(a)(23) of the Social Security Act;

(5) coordinating and monitoring the overall service delivery and engaging in advocacy as needed to ensure quality of services, appropriateness, and continued need;

(6) completing and maintaining necessary documentation that supports and verifies the activities in this subdivision;

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(7) assisting individuals in order to access needed services, including travel to conduct a visit with the recipient or other relevant person necessary to develop or implement the goals of the individual service plan; and

(8) coordinating with the institution discharge planner ~~in the 180-day period~~ before the recipient's discharge.

(b) Relocation targeted county case management includes services under paragraph (a), clauses (1), (2), and (4). Relocation service coordination includes services under paragraph (a), clauses (3) and (5) to (8). Home care targeted case management includes services under paragraph (a), clauses (1) to (8).

Sec. 3. Minnesota Statutes 2006, section 256B.0621, subdivision 10, is amended to read:

Subd. 10. Payment rates. The commissioner shall set payment rates for targeted case management under this subdivision. Case managers may bill according to the following criteria:

(1) for relocation targeted case management, case managers may bill for direct case management activities, including face-to-face and telephone contacts, in the lesser of:

(i) 180 days preceding an eligible recipient's discharge from an institution; or

(ii) the limits and conditions which apply to federal Medicaid funding for this service;

(2) for home care targeted case management, case managers may bill for direct case management activities, including face-to-face and telephone contacts; and

(3) billings for targeted case management services under this subdivision shall not duplicate payments made under other program authorities for the same purpose.

Sec. 4. Minnesota Statutes 2007 Supplement, section 256B.0625, subdivision 20, is amended to read:

Subd. 20. Mental health case management. (a) To the extent authorized by rule of the state agency, medical assistance covers case management services to persons with serious and persistent mental illness and children with severe emotional disturbance. Services provided under this section must meet the relevant standards in sections 245.461 to 245.4887, the Comprehensive Adult and Children's Mental Health Acts, Minnesota Rules, parts 9520.0900 to 9520.0926, and 9505.0322, excluding subpart 10.

(b) Entities meeting program standards set out in rules governing family community support services as defined in section 245.4871, subdivision 17, are eligible for medical assistance reimbursement for case management services for children with severe emotional disturbance when these services meet the program standards in Minnesota Rules, parts 9520.0900 to 9520.0926 and 9505.0322, excluding subparts 6 and 10.

(c) Medical assistance and MinnesotaCare payment for mental health case management shall be made on a monthly basis. In order to receive payment for an eligible child, the provider must document at least a face-to-face contact with the child, the child's parents, or the child's legal representative. To receive payment for an eligible adult, the provider must document:

(1) at least a face-to-face contact with the adult or the adult's legal representative; or

(2) at least a telephone contact with the adult or the adult's legal representative and document a face-to-face contact with the adult or the adult's legal representative within the preceding two months.

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(d) Payment for mental health case management provided by county or state staff shall be based on the monthly rate methodology under section 256B.094, subdivision 6, paragraph (b), with separate rates calculated for child welfare and mental health, and within mental health, separate rates for children and adults.

(e) Payment for mental health case management provided by Indian health services or by agencies operated by Indian tribes may be made according to this section or other relevant federally approved rate setting methodology.

(f) Payment for mental health case management provided by vendors who contract with a county or Indian tribe shall be based on a monthly rate negotiated by the host county or tribe. The negotiated rate must not exceed the rate charged by the vendor for the same service to other payers. If the service is provided by a team of contracted vendors, the county or tribe may negotiate a team rate with a vendor who is a member of the team. The team shall determine how to distribute the rate among its members. No reimbursement received by contracted vendors shall be returned to the county or tribe, except to reimburse the county or tribe for advance funding provided by the county or tribe to the vendor.

(g) If the service is provided by a team which includes contracted vendors, tribal staff, and county or state staff, the costs for county or state staff participation in the team shall be included in the rate for county-provided services. In this case, the contracted vendor, the tribal agency, and the county may each receive separate payment for services provided by each entity in the same month. In order to prevent duplication of services, each entity must document, in the recipient's file, the need for team case management and a description of the roles of the team members.

(h) Notwithstanding section 256B.19, subdivision 1, the nonfederal share of costs for mental health case management shall be provided by the recipient's county of responsibility, as defined in sections 256G.01 to 256G.12, from sources other than federal funds or funds used to match other federal funds. If the service is provided by a tribal agency, the nonfederal share, if any, shall be provided by the recipient's tribe. When this service is paid by the state without a federal share through fee-for-service, 50 percent of the cost shall be provided by the recipient's county of responsibility.

(i) Notwithstanding any administrative rule to the contrary, prepaid medical assistance, general assistance medical care, and MinnesotaCare include mental health case management. When the service is provided through prepaid capitation, the nonfederal share is paid by the state and the county pays no share.

(j) The commissioner may suspend, reduce, or terminate the reimbursement to a provider that does not meet the reporting or other requirements of this section. The county of responsibility, as defined in sections 256G.01 to 256G.12, or, if applicable, the tribal agency, is responsible for any federal disallowances. The county or tribe may share this responsibility with its contracted vendors.

(k) The commissioner shall set aside a portion of the federal funds earned for county expenditures under this section to repay the special revenue maximization account under section 256.01, subdivision 2, clause (15). The repayment is limited to:

(1) the costs of developing and implementing this section; and

(2) programming the information systems.

(l) Payments to counties and tribal agencies for case management expenditures under this section shall only be made from federal earnings from services provided under this section. When this service is paid by the state without a federal share through fee-for-service, 50 percent of the cost shall be provided by the state. Payments to county-contracted vendors shall include the federal earnings, the state share, and the county share.

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(m) Case management services under this subdivision do not include therapy, treatment, legal, or outreach services.

(n) If the recipient is a resident of a nursing facility, intermediate care facility, or hospital, and the recipient's institutional care is paid by medical assistance, payment for case management services under this subdivision is limited to the lesser of:

(1) the last 180 days of the recipient's residency in that facility and may not exceed more than six months in a calendar year; or

(2) the limits and conditions which apply to federal Medicaid funding for this service.

(o) Payment for case management services under this subdivision shall not duplicate payments made under other program authorities for the same purpose.

Sec. 5. [256B.0658] HOUSING ACCESS GRANTS.

The commissioner of human services shall award through a competitive process contracts for grants to public and private agencies to support and assist individuals eligible for publicly funded home and community-based services, including state plan home care, to access housing. Grants may be awarded to agencies that may include, but are not limited to, the following supports: assessment to assure suitability of housing, accompanying an individual to look at housing, filling out applications and rental agreements, meeting with landlords, helping with Section 8 or other program applications, helping to develop a budget, obtaining furniture and household goods, if necessary, and assisting with any problems that may arise with housing.

Sec. 6. Minnesota Statutes 2006, section 256B.0924, subdivision 4, is amended to read:

Subd. 4. Targeted case management service activities. (a) For persons with developmental disabilities, targeted case management services must meet the provisions of section 256B.092.

(b) For persons not eligible as a person with a developmental disability, targeted case management service activities include:

(1) an assessment of the person's need for targeted case management services;

(2) the development of a written personal service plan;

(3) a regular review and revision of the written personal service plan with the recipient and the recipient's legal representative, and others as identified by the recipient, to ensure access to necessary services and supports identified in the plan;

(4) effective communication with the recipient and the recipient's legal representative and others identified by the recipient;

(5) coordination of referrals for needed services with qualified providers;

(6) coordination and monitoring of the overall service delivery to ensure the quality and effectiveness of services;

(7) assistance to the recipient and the recipient's legal representative to help make an informed choice of services;

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(8) advocating on behalf of the recipient when service barriers are encountered or referring the recipient and the recipient's legal representative to an independent advocate;

(9) monitoring and evaluating services identified in the personal service plan to ensure personal outcomes are met and to ensure satisfaction with services and service delivery;

(10) conducting face-to-face monitoring with the recipient at least twice a year;

(11) completing and maintaining necessary documentation that supports and verifies the activities in this section;

(12) coordinating with the medical assistance facility discharge planner ~~in the 180-day period~~ prior to the recipient's discharge into the community; and

(13) a personal service plan developed and reviewed at least annually with the recipient and the recipient's legal representative. The personal service plan must be revised when there is a change in the recipient's status. The personal service plan must identify:

(i) the desired personal short and long-term outcomes;

(ii) the recipient's preferences for services and supports, including development of a person-centered plan if requested; and

(iii) formal and informal services and supports based on areas of assessment, such as: social, health, mental health, residence, family, educational and vocational, safety, legal, self-determination, financial, and chemical health as determined by the recipient and the recipient's legal representative and the recipient's support network.

Sec. 7. Minnesota Statutes 2006, section 256B.0924, subdivision 6, is amended to read:

Subd. 6. Payment for targeted case management. (a) Medical assistance and MinnesotaCare payment for targeted case management shall be made on a monthly basis. In order to receive payment for an eligible adult, the provider must document at least one contact per month and not more than two consecutive months without a face-to-face contact with the adult or the adult's legal representative, family, primary caregiver, or other relevant persons identified as necessary to the development or implementation of the goals of the personal service plan.

(b) Payment for targeted case management provided by county staff under this subdivision shall be based on the monthly rate methodology under section 256B.094, subdivision 6, paragraph (b), calculated as one combined average rate together with adult mental health case management under section 256B.0625, subdivision 20, except for calendar year 2002. In calendar year 2002, the rate for case management under this section shall be the same as the rate for adult mental health case management in effect as of December 31, 2001. Billing and payment must identify the recipient's primary population group to allow tracking of revenues.

(c) Payment for targeted case management provided by county-contracted vendors shall be based on a monthly rate negotiated by the host county. The negotiated rate must not exceed the rate charged by the vendor for the same service to other payers. If the service is provided by a team of contracted vendors, the county may negotiate a team rate with a vendor who is a member of the team. The team shall determine how to distribute the rate among its members. No reimbursement received by contracted vendors shall be returned to the county, except to reimburse the county for advance funding provided by the county to the vendor.

(d) If the service is provided by a team that includes contracted vendors and county staff, the costs for county staff participation on the team shall be included in the rate for county-provided services. In this case, the contracted vendor and the county may each receive separate payment for services provided by each entity in the same month. In order to prevent duplication of services, the county must document, in the recipient's file, the need for team targeted case management and a description of the different roles of the team members.

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(e) Notwithstanding section 256B.19, subdivision 1, the nonfederal share of costs for targeted case management shall be provided by the recipient's county of responsibility, as defined in sections 256G.01 to 256G.12, from sources other than federal funds or funds used to match other federal funds.

(f) The commissioner may suspend, reduce, or terminate reimbursement to a provider that does not meet the reporting or other requirements of this section. The county of responsibility, as defined in sections 256G.01 to 256G.12, is responsible for any federal disallowances. The county may share this responsibility with its contracted vendors.

(g) The commissioner shall set aside five percent of the federal funds received under this section for use in reimbursing the state for costs of developing and implementing this section.

(h) Payments to counties for targeted case management expenditures under this section shall only be made from federal earnings from services provided under this section. Payments to contracted vendors shall include both the federal earnings and the county share.

(i) Notwithstanding section 256B.041, county payments for the cost of case management services provided by county staff shall not be made to the commissioner of finance. For the purposes of targeted case management services provided by county staff under this section, the centralized disbursement of payments to counties under section 256B.041 consists only of federal earnings from services provided under this section.

(j) If the recipient is a resident of a nursing facility, intermediate care facility, or hospital, and the recipient's institutional care is paid by medical assistance, payment for targeted case management services under this subdivision is limited to the lesser of:

(1) the last 180 days of the recipient's residency in that facility ~~and may not exceed more than six months in a calendar year~~; or

(2) the limits and conditions which apply to federal Medicaid funding for this service.

(k) Payment for targeted case management services under this subdivision shall not duplicate payments made under other program authorities for the same purpose.

(l) Any growth in targeted case management services and cost increases under this section shall be the responsibility of the counties.

Sec. 8. Minnesota Statutes 2006, section 256B.19, subdivision 1d, is amended to read:

Subd. 1d. Portion of nonfederal share to be paid by certain counties. (a) In addition to the percentage contribution paid by a county under subdivision 1, the governmental units designated in this subdivision shall be responsible for an additional portion of the nonfederal share of medical assistance cost. For purposes of this subdivision, "designated governmental unit" means the counties of Becker, Beltrami, Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, Pennington, Pipestone, Ramsey, St. Louis, Steele, Todd, Traverse, and Wadena.

(b) Beginning in 1994, each of the governmental units designated in this subdivision shall transfer before noon on May 31 to the state Medicaid agency an amount equal to the number of licensed beds in any nursing home owned and operated by the county on that date, with the county named as licensee, multiplied by $5,723. If two or more counties own and operate a nursing home, the payment shall be prorated. These sums shall be part of the designated governmental unit's portion of the nonfederal share of medical assistance costs.

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(c) Beginning in 2002, in addition to any transfer under paragraph (b), each of the governmental units designated in this subdivision shall transfer before noon on May 31 to the state Medicaid agency an amount equal to the number of licensed beds in any nursing home owned and operated by the county on that date, with the county named as licensee, multiplied by $10,784. The provisions of paragraph (b) apply to transfers under this paragraph.

(d) Beginning in 2003, in addition to any transfer under paragraphs (b) and (c), each of the governmental units designated in this subdivision shall transfer before noon on May 31 to the state Medicaid agency an amount equal to the number of licensed beds in any nursing home owned and operated by the county on that date, with the county named as licensee, multiplied by $2,230. The provisions of paragraph (b) apply to transfers under this paragraph.

~~(e)~~ (d) The commissioner may reduce the intergovernmental transfers under ~~paragraphs~~ paragraph (c) ~~and (d)~~ based on the commissioner's determination of the payment rate in section 256B.431, subdivision 23, paragraphs (c), and (d)~~, and (e)~~. Any adjustments must be made on a per-bed basis and must result in an amount equivalent to the total amount resulting from the rate adjustment in section 256B.431, subdivision 23, paragraphs (c), and (d)~~, and (e)~~.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 9. Minnesota Statutes 2006, section 256B.431, subdivision 23, is amended to read:

Subd. 23. County nursing home payment adjustments. (a) Beginning in 1994, the commissioner shall pay a nursing home payment adjustment on May 31 after noon to a county in which is located a nursing home that, on that date, was county-owned and operated, with the county named as licensee by the commissioner of health, and had over 40 beds and medical assistance occupancy in excess of 50 percent during the reporting year ending September 30, 1991. The adjustment shall be an amount equal to $16 per calendar day multiplied by the number of beds licensed in the facility on that date.

(b) Payments under paragraph (a) are excluded from medical assistance per diem rate calculations. These payments are required notwithstanding any rule prohibiting medical assistance payments from exceeding payments from private pay residents. A facility receiving a payment under paragraph (a) may not increase charges to private pay residents by an amount equivalent to the per diem amount payments under paragraph (a) would equal if converted to a per diem.

(c) Beginning in 2002, in addition to any payment under paragraph (a), the commissioner shall pay to a nursing facility described in paragraph (a) an adjustment in an amount equal to $29.55 per calendar day multiplied by the number of beds licensed in the facility on that date. The provisions of paragraphs (a) and (b) apply to payments under this paragraph.

(d) Beginning in 2003, in addition to any payment under paragraphs (a) and (c), the commissioner shall pay to a nursing facility described in paragraph (a) an adjustment in an amount equal to $6.11 per calendar day multiplied by the number of beds licensed in the facility on that date. The provisions of paragraphs (a) and (b) apply to payments under this paragraph.

~~(e)~~ (d) The commissioner may reduce payments under ~~paragraphs~~ paragraph (c) ~~and (d)~~ based on the commissioner's determination of Medicare upper payment limits. Any adjustments must be proportional to adjustments made under section 256B.19, subdivision 1d, paragraph ~~(e)~~ (d).

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 10. Minnesota Statutes 2007 Supplement, section 256B.434, subdivision 19, is amended to read:

Subd. 19. Nursing facility rate increases beginning October 1, 2007, and October 1, 2008. (a) For the rate year beginning October 1, 2007, the commissioner shall make available to each nursing facility reimbursed under this section operating payment rate adjustments equal to 1.87 percent of the operating payment rates in effect on September 30, 2007. For the rate year beginning October 1, 2008, the commissioner shall make available to each nursing facility reimbursed under this section, operating payment rate adjustments equal to 2.0 percent of the operating payment rates in effect on September 30, 2008.

(b) Seventy-five percent of the money resulting from the rate adjustment under paragraph (a) must be used for increases in compensation-related costs for employees directly employed by the nursing facility on or after the effective date of the rate adjustment, except:

(1) the administrator;

(2) persons employed in the central office of a corporation that has an ownership interest in the nursing facility or exercises control over the nursing facility; and

(3) persons paid by the nursing facility under a management contract.

(c) Two-thirds of the money available under paragraph (b) must be used for wage increases for all employees directly employed by the nursing facility on or after the effective date of the rate adjustment, except those listed in paragraph (b), clauses (1) to (3). The wage adjustment that employees receive under this paragraph must be paid as an equal hourly percentage wage increase for all eligible employees. All wage increases under this paragraph must be effective on the same date. Only costs associated with the portion of the equal hourly percentage wage increase that goes to all employees shall qualify under this paragraph. Costs associated with wage increases in excess of the amount of the equal hourly percentage wage increase provided to all employees shall be allowed only for meeting the requirements in paragraph (b). This paragraph shall not apply to employees covered by a collective bargaining agreement.

(d) The commissioner shall allow as compensation-related costs all costs for:

(1) wages and salaries;

(2) FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers' compensation;

(3) the employer's share of health and dental insurance, life insurance, disability insurance, long-term care insurance, uniform allowance, and pensions; and

(4) other benefits provided, subject to the approval of the commissioner.

(e) The portion of the rate adjustment under paragraph (a) that is not subject to the requirements in paragraphs (b) and (c) shall be provided to nursing facilities effective October 1, 2007, or October 1, 2008, as applicable.

(f) Nursing facilities may apply for the portion of the rate adjustment under paragraph (a) that is subject to the requirements in paragraphs (b) and (c). The application must be submitted to the commissioner within six months of the effective date of the rate adjustment, and the nursing facility must provide additional information required by the commissioner within nine months of the effective date of the rate adjustment. The commissioner must respond to all applications within three weeks of receipt. The commissioner may waive the deadlines in this paragraph under extraordinary circumstances, to be determined at the sole discretion of the commissioner. The application must contain:

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(1) an estimate of the amounts of money that must be used as specified in paragraphs (b) and (c);

(2) a detailed distribution plan specifying the allowable compensation-related and wage increases the nursing facility will implement to use the funds available in clause (1);

(3) a description of how the nursing facility will notify eligible employees of the contents of the approved application, which must provide for giving each eligible employee a copy of the approved application, excluding the information required in clause (1), or posting a copy of the approved application, excluding the information required in clause (1), for a period of at least six weeks in an area of the nursing facility to which all eligible employees have access; and

(4) instructions for employees who believe they have not received the compensation-related or wage increases specified in clause (2), as approved by the commissioner, and which must include a mailing address, e-mail address, and the telephone number that may be used by the employee to contact the commissioner or the commissioner's representative.

(g) The commissioner shall ensure that cost increases in distribution plans under paragraph (f), clause (2), that may be included in approved applications, comply with the following requirements:

(1) costs to be incurred during the applicable rate year resulting from wage and salary increases effective after October 1, 2006, and prior to the first day of the nursing facility's payroll period that includes October 1~~, 2007~~ of each year, shall be allowed if they were not used in the prior year's application;

(2) a portion of the costs resulting from tenure-related wage or salary increases may be considered to be allowable wage increases, according to formulas that the commissioner shall provide, where employee retention is above the average statewide rate of retention of direct care employees;

(3) the annualized amount of increases in costs for the employer's share of health and dental insurance, life insurance, disability insurance, and workers' compensation shall be allowable compensation-related increases if they are effective on or after April 1~~, 2007,~~ of the year in which the rate adjustments are effective and prior to April 1~~, 2008~~ of the following year; and

(4) for nursing facilities in which employees are represented by an exclusive bargaining representative, the commissioner shall approve the application only upon receipt of a letter of acceptance of the distribution plan, in regard to members of the bargaining unit, signed by the exclusive bargaining agent and dated after May 25, 2007. Upon receipt of the letter of acceptance, the commissioner shall deem all requirements of this section as having been met in regard to the members of the bargaining unit.

(h) The commissioner shall review applications received under paragraph (f) and shall provide the portion of the rate adjustment under paragraphs (b) and (c) if the requirements of this subdivision have been met. The rate adjustment shall be effective October 1. Notwithstanding paragraph (a), if the approved application distributes less money than is available, the amount of the rate adjustment shall be reduced so that the amount of money made available is equal to the amount to be distributed.

Sec. 11. Minnesota Statutes 2006, section 256B.69, subdivision 6, is amended to read:

Subd. 6. Service delivery. (a) Each demonstration provider shall be responsible for the health care coordination for eligible individuals. Demonstration providers:

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(1) shall authorize and arrange for the provision of all needed health services including but not limited to the full range of services listed in sections 256B.02, subdivision 8, and 256B.0625 in order to ensure appropriate health care is delivered to enrollees. Notwithstanding section 256B.0621, demonstration providers that provide nursing home and community-based services under this section shall provide relocation service coordination to enrolled persons age 65 and over;

(2) shall accept the prospective, per capita payment from the commissioner in return for the provision of comprehensive and coordinated health care services for eligible individuals enrolled in the program;

(3) may contract with other health care and social service practitioners to provide services to enrollees; and

(4) shall institute recipient grievance procedures according to the method established by the project, utilizing applicable requirements of chapter 62D. Disputes not resolved through this process shall be appealable to the commissioner as provided in subdivision 11.

(b) Demonstration providers must comply with the standards for claims settlement under section 72A.201, subdivisions 4, 5, 7, and 8, when contracting with other health care and social service practitioners to provide services to enrollees. A demonstration provider must pay a clean claim, as defined in Code of Federal Regulations, title 42, section 447.45(b), within 30 business days of the date of acceptance of the claim.

Sec. 12. Minnesota Statutes 2006, section 256D.44, subdivision 2, is amended to read:

Subd. 2. Standard of assistance for persons eligible for medical assistance waivers or at risk of placement in a group residential housing facility. The state standard of assistance for a person who: (1) is eligible for a medical assistance home and community-based services waiver ~~or a person who~~; (2) has been determined by the local agency to meet the plan requirements for placement in a group residential housing facility under section 256I.04, subdivision 1a,; or (3) is eligible for a shelter needy payment under subdivision 5, paragraph (f); is the standard established in subdivision 3, paragraph (a) or (b).

EFFECTIVE DATE. This section is effective January 1, 2009.

Sec. 13. Minnesota Statutes 2006, section 256D.44, subdivision 5, is amended to read:

Subd. 5. Special needs. In addition to the state standards of assistance established in subdivisions 1 to 4, payments are allowed for the following special needs of recipients of Minnesota supplemental aid who are not residents of a nursing home, a regional treatment center, or a group residential housing facility.

(a) The county agency shall pay a monthly allowance for medically prescribed diets if the cost of those additional dietary needs cannot be met through some other maintenance benefit. The need for special diets or dietary items must be prescribed by a licensed physician. Costs for special diets shall be determined as percentages of the allotment for a one-person household under the thrifty food plan as defined by the United States Department of Agriculture. The types of diets and the percentages of the thrifty food plan that are covered are as follows:

(1) high protein diet, at least 80 grams daily, 25 percent of thrifty food plan;

(2) controlled protein diet, 40 to 60 grams and requires special products, 100 percent of thrifty food plan;

(3) controlled protein diet, less than 40 grams and requires special products, 125 percent of thrifty food plan;

(4) low cholesterol diet, 25 percent of thrifty food plan;

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(5) high residue diet, 20 percent of thrifty food plan;

(6) pregnancy and lactation diet, 35 percent of thrifty food plan;

(7) gluten-free diet, 25 percent of thrifty food plan;

(8) lactose-free diet, 25 percent of thrifty food plan;

(9) antidumping diet, 15 percent of thrifty food plan;

(10) hypoglycemic diet, 15 percent of thrifty food plan; or

(11) ketogenic diet, 25 percent of thrifty food plan.

(b) Payment for nonrecurring special needs must be allowed for necessary home repairs or necessary repairs or replacement of household furniture and appliances using the payment standard of the AFDC program in effect on July 16, 1996, for these expenses, as long as other funding sources are not available.

(c) A fee for guardian or conservator service is allowed at a reasonable rate negotiated by the county or approved by the court. This rate shall not exceed five percent of the assistance unit's gross monthly income up to a maximum of $100 per month. If the guardian or conservator is a member of the county agency staff, no fee is allowed.

(d) The county agency shall continue to pay a monthly allowance of $68 for restaurant meals for a person who was receiving a restaurant meal allowance on June 1, 1990, and who eats two or more meals in a restaurant daily. The allowance must continue until the person has not received Minnesota supplemental aid for one full calendar month or until the person's living arrangement changes and the person no longer meets the criteria for the restaurant meal allowance, whichever occurs first.

(e) A fee of ten percent of the recipient's gross income or $25, whichever is less, is allowed for representative payee services provided by an agency that meets the requirements under SSI regulations to charge a fee for representative payee services. This special need is available to all recipients of Minnesota supplemental aid regardless of their living arrangement.

(f) (1) Notwithstanding the language in this subdivision, an amount equal to the maximum allotment authorized by the federal Food Stamp Program for a single individual which is in effect on the first day of ~~January~~ July of ~~the previous~~ each year will be added to the standards of assistance established in subdivisions 1 to 4 for ~~individuals~~ adults under the age of 65 who qualify as shelter needy and are: (i) relocating from an institution, or an adult mental health residential treatment program under section 256B.0622~~, and who are shelter needy~~; (ii) eligible for the self-directed supports option as defined under section 256B.0657, subdivision 2; or (iii) home and community-based waiver recipients living in their own home or rented or leased apartment which is not owned, operated, or controlled by a provider of service not related by blood or marriage.

(2) Notwithstanding subdivision 3, paragraph (c), an individual eligible for the shelter needy benefit under this paragraph is considered a household of one. An eligible individual who receives this benefit prior to age 65 may continue to receive the benefit after the age of 65.

(3) "Shelter needy" means that the assistance unit incurs monthly shelter costs that exceed 40 percent of the assistance unit's gross income before the application of this special needs standard. "Gross income" for the purposes of this section is the applicant's or recipient's income as defined in section 256D.35, subdivision 10, or the standard

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specified in subdivision 3, paragraph (a) or (b), whichever is greater. A recipient of a federal or state housing subsidy, that limits shelter costs to a percentage of gross income, shall not be considered shelter needy for purposes of this paragraph.

EFFECTIVE DATE. This section is effective January 1, 2009.

ARTICLE 2

AGENCY MANAGEMENT

Section 1. Minnesota Statutes 2006, section 13.461, is amended by adding a subdivision to read:

Subd. 24a. Managed care plans. Data provided to the commissioner of human services by managed care plans relating to contracts and provider payment rates are classified under section 256B.69, subdivision 9b.

Sec. 2. Minnesota Statutes 2006, section 256.01, is amended by adding a subdivision to read:

Subd. 27. Automation and coordination for state health care programs. (a) For purposes of this subdivision, "state health care program" means the medical assistance, MinnesotaCare, or general assistance medical care programs.

(b) By July 1, 2010, the commissioner shall improve coordination between state health care programs and social service programs including but not limited to WIC, free and reduced-price school lunch programs, and food stamps, and shall develop and use automated systems to identify persons served by social service programs who may be eligible for, but are not enrolled in, a state health care program. The system must also permit enrollees to renew state health care program enrollment through these social services programs. By January 15, 2010, the commissioner shall, as necessary, identify and recommend to the legislature statutory changes to state health care and social service programs necessary to improve coordination and automation of outreach and enrollment efforts, and report estimated local and state costs of implementation and evaluate funding alternatives, including possible federal reimbursement.

(c) By January 15, 2010, the commissioner shall establish and implement an automated process to send out state health care program renewal forms in the most common foreign languages to those state health care program enrollees who request renewal forms in those foreign languages. The commissioner, as part of the initial enrollment process, shall inform applicants of the availability of this option.

(d) Beginning July 1, 2010, the commissioner, county social service agencies, and health care providers shall update state health care program enrollee addresses and related contact information at the time of each enrollee contact. The commissioner shall report the costs of automatically updating contact information across programs to health care providers and county agencies.

Sec. 3. Minnesota Statutes 2006, section 256B.69, subdivision 5a, is amended to read:

Subd. 5a. Managed care contracts. (a) Managed care contracts under this section and sections 256L.12 and 256D.03, shall be entered into or renewed on a calendar year basis beginning January 1, 1996. Managed care contracts which were in effect on June 30, 1995, and set to renew on July 1, 1995, shall be renewed for the period July 1, 1995 through December 31, 1995 at the same terms that were in effect on June 30, 1995. The commissioner may issue separate contracts with requirements specific to services to medical assistance recipients age 65 and older.

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(b) A prepaid health plan providing covered health services for eligible persons pursuant to chapters 256B, 256D, and 256L, is responsible for complying with the terms of its contract with the commissioner. Requirements applicable to managed care programs under chapters 256B, 256D, and 256L, established after the effective date of a contract with the commissioner take effect when the contract is next issued or renewed.

(c) Effective for services rendered on or after January 1, 2003, the commissioner shall withhold five percent of managed care plan payments under this section for the prepaid medical assistance and general assistance medical care programs pending completion of performance targets. Each performance target must be quantifiable, objective, measurable, and reasonably attainable, except in the case of a performance target based on a federal or state law or rule. Criteria for assessment of each performance target must be outlined in writing prior to the contract effective date. The managed care plan must demonstrate, to the commissioner's satisfaction, that the data submitted regarding attainment of the performance target is accurate. The commissioner shall periodically change the administrative measures used as performance targets in order to improve plan performance across a broader range of administrative services. The performance targets must include measurement of plan efforts to contain spending on health care services and administrative activities. The commissioner may adopt plan-specific performance targets that take into account factors affecting only one plan, including characteristics of the plan's enrollee population. The withheld funds must be returned no sooner than July of the following year if performance targets in the contract are achieved. The commissioner may exclude special demonstration projects under subdivision 23. A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this paragraph that is reasonably expected to be returned.

Sec. 4. Minnesota Statutes 2006, section 256B.69, is amended by adding a subdivision to read:

Subd. 5i. Administrative expenses. (a) Managed care plan and county-based purchasing plan administrative costs for a prepaid health plan provided under this section or section 256B.692 must not exceed by more than five percent that prepaid health plan's or county-based purchasing plan's actual calculated administrative spending for the previous calendar year as a percentage of total revenue. The penalty for exceeding this limit must be the amount of administrative spending in excess of 105 percent of the actual calculated amount. The commissioner may waive this penalty if the excess administrative spending is the result of unexpected shifts in enrollment or member needs or new program requirements.

(b) Capitated rate payments for administrative costs must be reduced to exclude onetime or sporadic expenditures in the prior year unless the managed care plan certifies that the expenditure will recur during the contract year. The commissioner shall verify these certifications on an annual basis and recoup any payments made for onetime or sporadic expenditures that did not occur in the prior year.

(c) Expenses under section 62D.12, subdivision 9a, clause (4), are not allowable administrative expenses for rate-setting purposes under this section, unless approved by the commissioner.

Sec. 5. Minnesota Statutes 2006, section 256B.69, is amended by adding a subdivision to read:

Subd. 5j. Treatment of investment earnings. Capitation rates shall treat investment income and interest earnings as income to the same extent that investment-related expenses are treated as administrative expenditures.

Sec. 6. Minnesota Statutes 2006, section 256B.69, is amended by adding a subdivision to read:

Subd. 9a. Administrative expense reporting. Each managed care plan and county-based purchasing plan must provide to the commissioner detailed information on administrative spending, including:

(1) itemized lists of costs for claims processing and provider network management;

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(2) detailed reports of costs for contracts with providers and third-party administrators;

(3) a detailed analysis of administrative spending for each Minnesota health care program;

(4) a detailed analysis of the provider's allocation of administrative expenses among its public and commercial lines of business;

(5) a detailed analysis of administrative costs by service category; and

(6) a detailed analysis of onetime and sporadic expenditures included in the administrative spending category.

Sec. 7. Minnesota Statutes 2006, section 256B.69, is amended by adding a subdivision to read:

Subd. 9b. Reporting of subcontracts and provider payment rates. (a) Each managed care plan and county-based purchasing plan must provide to the commissioner:

(1) detailed information on contracts with health care providers; and

(2) detailed information on reimbursement rates paid by the managed care plan to providers under contract with the plan.

(b) Data provided to the commissioner under this subdivision are nonpublic data as defined in section 13.02.

Sec. 8. Minnesota Statutes 2006, section 256B.692, subdivision 2, is amended to read:

Subd. 2. Duties of commissioner of health. (a) Notwithstanding chapters 62D and 62N, a county that elects to purchase medical assistance and general assistance medical care in return for a fixed sum without regard to the frequency or extent of services furnished to any particular enrollee is not required to obtain a certificate of authority under chapter 62D or 62N. The county board of commissioners is the governing body of a county-based purchasing program. In a multicounty arrangement, the governing body is a joint powers board established under section 471.59.

(b) A county that elects to purchase medical assistance and general assistance medical care services under this section must satisfy the commissioner of health that the requirements for assurance of consumer protection, provider protection, and, effective January 1, 2010, fiscal solvency of chapter 62D, applicable to health maintenance organizations~~, or chapter 62N, applicable to community integrated service networks,~~ will be met. according to the following schedule:

(1) for a county-based purchasing plan approved on or before June 30, 2008, the plan must have in reserve:

(i) at least 50 percent of the minimum amount required under chapter 62D as of January 1, 2010;

(ii) at least 75 percent of the minimum amount required under chapter 62D as of January 1, 2011;

(iii) at least 87.5 percent of the minimum amount required under chapter 62D as of January 1, 2012; and

(iv) at least 100 percent of the minimum amount required under chapter 62D as of January 1, 2013; and

(2) for a county-based purchasing plan first approved after June 30, 2008, the plan must have in reserve:

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(i) at least 50 percent of the minimum amount required under chapter 62D at the time the plan begins enrolling enrollees;

(ii) at least 75 percent of the minimum amount required under chapter 62D after the first full calendar year;

(iii) at least 87.5 percent of the minimum amount required under chapter 62D after the second full calendar year; and

(iv) at least 100 percent of the minimum amount required under chapter 62D after the third full calendar year.

(c) Until a plan is required to have reserves equaling at least 100 percent of the minimum amount required under chapter 62D, the plan may demonstrate its ability to cover any losses by satisfying the requirements of chapter 62N. A ~~county~~ county-based purchasing plan must also assure the commissioner of health that the requirements of sections 62J.041; 62J.48; 62J.71 to 62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 62Q, including sections 62Q.075; 62Q.1055; 62Q.106; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.68 to 62Q.72; and 72A.201 will be met.

(d) All enforcement and rulemaking powers available under chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the commissioner of health with respect to counties that purchase medical assistance and general assistance medical care services under this section.

(e) The commissioner, in consultation with county government, shall develop administrative and financial reporting requirements for county-based purchasing programs relating to sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 62N.31, and other sections as necessary, that are specific to county administrative, accounting, and reporting systems and consistent with other statutory requirements of counties.

Sec. 9. Minnesota Statutes 2006, section 256B.692, is amended by adding a subdivision to read:

Subd. 4a. Expenditure of revenues. (a) A county that has elected to participate in a county-based purchasing plan under this section shall use any excess revenues over expenses that are received by the county and are not needed for capital reserves under subdivision 2, to increase payments to providers, or to repay county investments or contributions to the county-based purchasing plan, for prevention, early intervention, and health care programs, services, or activities.

(b) A county-based purchasing plan under this section is subject to the unreasonable expense provisions of section 62D.19.

Sec. 10. Minnesota Statutes 2006, section 256L.12, subdivision 9, is amended to read:

Subd. 9. Rate setting; performance withholds. (a) Rates will be prospective, per capita, where possible. The commissioner may allow health plans to arrange for inpatient hospital services on a risk or nonrisk basis. The commissioner shall consult with an independent actuary to determine appropriate rates.

(b) For services rendered on or after January 1, 2003, to December 31, 2003, the commissioner shall withhold .5 percent of managed care plan payments under this section pending completion of performance targets. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year if performance targets in the contract are achieved. A managed care plan may include as admitted assets under section 62D.044 any amount withheld under this paragraph that is reasonably expected to be returned.

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(c) For services rendered on or after January 1, 2004, the commissioner shall withhold five percent of managed care plan payments under this section pending completion of performance targets. Each performance target must be quantifiable, objective, measurable, and reasonably attainable, except in the case of a performance target based on a federal or state law or rule. Criteria for assessment of each performance target must be outlined in writing prior to the contract effective date. The managed care plan must demonstrate, to the commissioner's satisfaction, that the data submitted regarding attainment of the performance target is accurate. The commissioner shall periodically change the administrative measures used as performance targets in order to improve plan performance across a broader range of administrative services. The performance targets must include measurement of plan efforts to contain spending on health care services and administrative activities. The commissioner may adopt plan-specific performance targets that take into account factors affecting only one plan, such as characteristics of the plan's enrollee population. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if performance targets in the contract are achieved. A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this paragraph that is reasonably expected to be returned.

Sec. 11. REPORT ON FINANCIAL MANAGEMENT OF HEALTH CARE PROGRAMS.

The commissioner of human services shall report to the legislature under Minnesota Statutes, section 3.195, by January 15, 2009, with the following information regarding financial management of health care programs:

(1) a status report on implementation of the cost containment strategies identified in the 2005 "Strategies for Savings" report. The report must include:

(i) information on progress made towards implementation of cost-saving strategies;

(ii) an explanation of why certain strategies were not implemented; and

(iii) where appropriate, alternative strategies to those recommended in 2005 for containing public health care program costs;

(2) a description of and, to the extent possible, an explanation of recent differences between the health plan net revenue targets established by the commissioner for health plans participating in public health care programs and the actual net revenue realized by the plans from public programs;

(3) the adequacy of public health care programs for fee-for-service rates, including an identification of service areas or geographical regions where enrollees have difficulty accessing providers as the result of inadequate provider payments. This report must include recommendations to increase rates as needed to eliminate identified access problems; and

(4) a progress report on implementation of Minnesota Statutes, section 256B.76, paragraph (e), requiring payments for physician and professional services to be based on Medicare relative value units, and an estimated completion date for implementation of this payment system.

Sec. 12. HEALTH PLAN AND COUNTY-BASED PURCHASING PLAN REQUIREMENTS.

(a) The commissioner of health shall develop and report to the legislature under Minnesota Statutes, section 3.195, by January 15, 2009, guidelines to ensure that health plans, and county-based purchasing plans where applicable, have consistent procedures for allocating administrative expenses and investment income across their commercial and public lines of business and across individual public programs. The guidelines shall be consistent with generally accepted accounting principles and principles from the National Association of Insurance Commissioners. The guidelines shall not have the effect of changing allocation for Medicare-related programs as permitted by federal law and the Centers for Medicare and Medicaid Services.

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(b) The commissioner of health, in cooperation with the commissioners of commerce and human services, shall develop and report to the legislature under Minnesota Statutes, section 3.195, by January 15, 2009, detailed standards and procedures for examining the reasonableness of health plan and county-based purchasing plan administrative expenditures for publicly funded programs. These standards and procedures must include a process for detailed examinations of individual programs and functional areas.

(c) The commissioner of health shall develop and report to the legislature under Minnesota Statutes, section 3.195, by January 15, 2009, a more efficient method for a health plan, and a county-based purchasing plan where appropriate, to demonstrate to the commissioner that providers in the plan's network have appropriate credentials. The commissioner shall review issues regarding:

(1) the duplicate review of credentials at a health care provider by multiple health plans;

(2) the review of the credentials of all staff of a health care provider when only limited staff will be in the plan network; and

(3) other duplicative credentialing issues.

Sec. 13. OMBUDSMAN FOR MANAGED CARE STUDY.

The commissioner of human services, in cooperation with the ombudsman for managed care, shall study and report to the legislature under Minnesota Statutes, section 3.195, by January 15, 2009, with recommendations on whether the duties of the ombudsman should be expanded to include advocating on behalf of public health care programs fee-for-service enrollees. The report must include:

(1) a comparison of recourses available to managed care clients versus fee-for-service clients when service problems occur; and

(2) an estimate of any net cost increase from this change in the ombudsman's duties, taking into account any reduction in the commissioner's duties.

Sec. 14. REPORTING MANAGED CARE PERFORMANCE DATA.

The commissioner of human services, in cooperation with the commissioner of health, shall report to the legislature under Minnesota Statutes, section 3.195, by January 15, 2009, with recommendations on the adoption of a single method to compute and publicly report managed health care performance measures in order to avoid confusion about the plans' performance levels. The study must include recommendations regarding coordinated use by the two agencies of the following data sources:

(1) Healthcare Effectiveness Data and Information Set (HEDIS) from managed care organizations;

(2) data that health plans submit to claim reimbursement for health care procedures; and

(3) data collected from medical record reviews of randomly selected individuals.

Sec. 15. PUBLIC DENTAL COVERAGE PROGRAM STUDY.

(a) The commissioner of human services shall undertake a study to determine whether alternative approaches to offering dental coverage to public programs enrollees would result in:

(1) improved access to dental care;

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(2) cost savings to providers and the department; and

(3) improved quality and outcomes of care.

Alternatives considered must include moving to a single dental plan administrator, retaining the current model, and other innovative approaches. Issues relating to chronic disease management, medical and dental interface, plan payment approaches, and provider payment should also be addressed. The report must make a recommendation on whether to alter the current approach to contracting for dental services, and include a detailed plan on how to implement any changes. The commissioner shall consult with dentists, safety net dental providers, dental plans, health plans and county-based purchasing organizations, patients and advocates, and other interested parties in developing their findings and recommendations.

(b) By December 15, 2008, the commissioner of human services shall report findings and recommendations to the chairs of the house of representatives and senate committees having jurisdiction over health and human services policy and finance.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 16. WORK GROUP; TARGETED CASE MANAGEMENT.

(a) The commissioner of human services shall convene a work group and seek information from counties, juvenile court staff, guardians ad litem, and mental health and child welfare advocates on the impact of federal regulations that cut funding for targeted case management services and the child support administrative collection system. The work group shall consider the impact these cuts will have on child protection, mental health, and housing relocation services.

(b) The commissioner shall issue a report from the work group summarizing the impact of the federal budget cuts on persons eligible for targeted case management services and the impact on county budgets. This report shall include budget and policy strategies to restore service levels to that of the year prior to the effective date of the federal regulations. A preliminary report shall be issued on December 15, 2008.

ARTICLE 3

CHILDREN AND FAMILY SERVICES

Section 1. Minnesota Statutes 2007 Supplement, section 256.741, subdivision 1, is amended to read:

Subdivision 1. ~~Public assistance~~ Definitions. (a) The term "direct support" as used in this chapter and chapters 257, 518, 518A, and 518C refers to an assigned support payment from an obligor which is paid directly to a recipient of ~~TANF or MFIP~~ public assistance.

(b) The term "public assistance" as used in this chapter and chapters 257, 518, 518A, and 518C, includes any form of assistance provided under the AFDC program formerly codified in sections 256.72 to 256.87, MFIP and MFIP-R formerly codified under chapter 256, MFIP under chapter 256J, work first program formerly codified under chapter 256K; child care assistance provided through the child care fund under chapter 119B; any form of medical assistance under chapter 256B; MinnesotaCare under chapter 256L; and foster care as provided under title IV-E of the Social Security Act.

(c) The term "child support agency" as used in this section refers to the public authority responsible for child support enforcement.

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(d) The term "public assistance agency" as used in this section refers to a public authority providing public assistance to an individual.

(e) The terms "child support" and "arrears" as used in this section have the meanings provided in section 518A.26.

(f) The term "maintenance" as used in this section has the meaning provided in section 518.003.

Sec. 2. Minnesota Statutes 2006, section 256.741, subdivision 2, is amended to read:

Subd. 2. Assignment of support and maintenance rights. (a) An individual receiving public assistance in the form of assistance under any of the following programs: the AFDC program formerly codified in sections 256.72 to 256.87, MFIP under chapter 256J, MFIP-R and MFIP formerly codified under chapter 256, or work first program formerly codified under chapter 256K is considered to have assigned to the state at the time of application all rights to child support and maintenance from any other person the applicant or recipient may have in the individual's own behalf or in the behalf of any other family member for whom application for public assistance is made. An assistance unit is ineligible for the Minnesota family investment program unless the caregiver assigns all rights to child support and ~~spousal~~ maintenance benefits according to this section.

(1) An The assignment ~~made according to this section~~ is effective as to:

~~(i)~~ any current child support and current ~~spousal~~ maintenance~~; and~~.

~~(ii) any accrued child support and spousal maintenance arrears.~~

~~(2) An assignment made after September 30, 1997, is effective as to:~~

~~(i) any current child support and current spousal maintenance;~~

~~(ii) any accrued child support and spousal maintenance arrears collected before October 1, 2000, or the date the individual terminates assistance, whichever is later; and~~

~~(iii) any accrued child support and spousal maintenance arrears collected under federal tax intercept.~~

(2) Any child support or maintenance arrears that accrue while an individual is receiving public assistance in the form of assistance under any of the programs listed in this paragraph are permanently assigned to the state.

(3) The assignment of current child support and current maintenance ends on the date the individual ceases to receive or is no longer eligible to receive public assistance under any of the programs listed in this paragraph.

(b) An individual receiving public assistance in the form of medical assistance, including MinnesotaCare, is considered to have assigned to the state at the time of application all rights to medical support from any other person the individual may have in the individual's own behalf or in the behalf of any other family member for whom medical assistance is provided.

(1) An assignment made after September 30, 1997, is effective as to any medical support accruing after the date of medical assistance or MinnesotaCare eligibility.

(2) Any medical support arrears that accrue while an individual is receiving public assistance in the form of medical assistance, including MinnesotaCare, are permanently assigned to the state.

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(3) The assignment of current medical support ends on the date the individual ceases to receive or is no longer eligible to receive public assistance in the form of medical assistance or MinnesotaCare.

(c) An individual receiving public assistance in the form of child care assistance under the child care fund pursuant to chapter 119B is considered to have assigned to the state at the time of application all rights to child care support from any other person the individual may have in the individual's own behalf or in the behalf of any other family member for whom child care assistance is provided.

An (1) The assignment ~~made according to this paragraph~~ is effective as to:

~~(1)~~ any current child care support ~~and any child care support arrears assigned and accruing after July 1, 1997, that are collected before October 1, 2000; and~~.

(2) ~~any accrued child care support arrears collected under federal tax intercept.~~ Any child care support arrears that accrue while an individual is receiving public assistance in the form of child care assistance under the child care fund in chapter 119B are permanently assigned to the state.

(3) The assignment of current child care support ends on the date the individual ceases to receive or is no longer eligible to receive public assistance in the form of child care assistance under the child care fund under chapter 119B.

Sec. 3. Minnesota Statutes 2006, section 256.741, subdivision 2a, is amended to read:

Subd. 2a. ~~Families-first~~ Distribution of child support ~~arrearages~~. (a) The state shall distribute current child support and maintenance received by the state to an individual who assigns the right to that support under subdivision 2, paragraph (a).

(b) When the public authority collects child support arrearages on behalf of an individual who is receiving public assistance provided under MFIP or MFIP-R under this chapter, MFIP under chapter 256J, or work first under chapter 256K, and the public authority has the option of applying the collection to arrears permanently assigned to the state or to arrears temporarily assigned to the state, the public authority shall first apply the collection to satisfy those arrears that are permanently assigned to the state.

(c) When the public authority collects child support arrearages on behalf of an individual who is not receiving public assistance, the public authority shall first apply the collection to satisfy those arrears that are not permanently assigned to the state.

(d) When the public authority collects child support arrearages certified under the federal tax offset, the public authority shall first apply the collection to satisfy those arrears that are permanently assigned to the state.

Sec. 4. Minnesota Statutes 2006, section 256.741, subdivision 3, is amended to read:

Subd. 3. Existing assignments. Assignments based on the receipt of public assistance in existence prior to July 1, 1997, are permanently assigned to the state. Arrears that accrued prior to the receipt of assistance that were assigned to the state between July 1, 1997, and October 1, 2009, must no longer be assigned as of October 1, 2009.

EFFECTIVE DATE. This section is effective October 1, 2009.

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Sec. 5. Minnesota Statutes 2007 Supplement, section 256J.621, is amended to read:

256J.621 WORK PARTICIPATION ~~BONUS~~ FOOD BENEFITS.

(a) Effective March 1, 2010, upon exiting the diversionary work program (DWP) or upon terminating the Minnesota family investment program (MFIP) ~~cash assistance~~ with earnings, a participant who is employed may be eligible for ~~transitional assistance~~ work participation food benefits of $75 per month to assist in meeting the family's basic needs as the participant continues to move toward self-sufficiency.

(b) To be eligible for ~~a transitional assistance payment~~ work participation food benefits, the participant shall not receive MFIP ~~cash assistance~~ or diversionary work program assistance during the month and the participant or participants must meet the following work requirements:

(1) if the participant is a single caregiver and has a child under six years of age, the participant must be employed at least 87 hours per month;

(2) if the participant is a single caregiver and does not have a child under six years of age, the participant must be employed at least 130 hours per month; or

(3) if the household is a two-parent family, at least one of the parents must be employed an average of at least 130 hours per month.

Whenever a participant exits the diversionary work program or is terminated from MFIP ~~cash assistance~~ and meets the other criteria in this section, ~~transitional assistance is~~ work participation food benefits are available for up to 24 consecutive months.

(c) Expenditures on the program are maintenance of effort state funds for participants under paragraph (b), clauses (1) and (2). Expenditures for participants under paragraph (b), clause (3), are nonmaintenance of effort funds. Months in which a participant receives ~~transitional assistance~~ work participation food benefits under this section do not count toward the participant's MFIP 60-month time limit.

Sec. 6. Minnesota Statutes 2006, section 518A.50, is amended to read:

518A.50 PAYMENT TO PUBLIC AGENCY.

(a) This section applies to all proceedings involving a support order, including, but not limited to, a support order establishing an order for past support or reimbursement of public assistance.

(b) The court shall direct that all payments ordered for maintenance or support be made to the public authority responsible for child support enforcement so long as the obligee is receiving or has applied for public assistance, or has applied for child support or maintenance collection services. Public authorities responsible for child support enforcement may act on behalf of other public authorities responsible for child support enforcement, including the authority to represent the legal interests of or execute documents on behalf of the other public authority in connection with the establishment, enforcement, and collection of child support, maintenance, or medical support, and collection on judgments.

(c) Payments made to the public authority ~~other than payments under section 518A.53~~ must be credited as of the date the payment is received by the central collections unit., except that payments made under section 518A.53 may be considered to have been paid as of the date the obligor received the remainder of the income.

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(d) Monthly amounts received by the public agency responsible for child support enforcement from the obligor that are greater than the monthly amount of public assistance granted to the obligee must be remitted to the obligee.

EFFECTIVE DATE. This section is effective October 1, 2009.

Sec. 7. Minnesota Statutes 2006, section 518A.53, subdivision 5, is amended to read:

Subd. 5. Payor of funds responsibilities. (a) An order for or notice of withholding is binding on a payor of funds upon receipt. Withholding must begin no later than the first pay period that occurs after 14 days following the date of receipt of the order for or notice of withholding. In the case of a financial institution, preauthorized transfers must occur in accordance with a court-ordered payment schedule.

(b) A payor of funds shall withhold from the income payable to the obligor the amount specified in the order or notice of withholding and amounts specified under subdivisions 6 and 9 and shall remit the amounts withheld to the public authority within seven business days of the date the obligor is paid the remainder of the income. The payor of funds shall include with the remittance the Social Security number of the obligor, the case type indicator as provided by the public authority and the date the obligor is paid the remainder of the income. ~~The obligor is considered to have paid the amount withheld as of the date the obligor received the remainder of the income.~~ A payor of funds may combine all amounts withheld from one pay period into one payment to each public authority, but shall separately identify each obligor making payment.

(c) A payor of funds shall not discharge, or refuse to hire, or otherwise discipline an employee as a result of wage or salary withholding authorized by this section. A payor of funds shall be liable to the obligee for any amounts required to be withheld. A payor of funds that fails to withhold or transfer funds in accordance with this section is also liable to the obligee for interest on the funds at the rate applicable to judgments under section 549.09, computed from the date the funds were required to be withheld or transferred. A payor of funds is liable for reasonable attorney fees of the obligee or public authority incurred in enforcing the liability under this paragraph. A payor of funds that has failed to comply with the requirements of this section is subject to contempt sanctions under section 518A.73. If the payor of funds is an employer or independent contractor and violates this subdivision, a court may award the obligor twice the wages lost as a result of this violation. If a court finds a payor of funds violated this subdivision, the court shall impose a civil fine of not less than $500. The liabilities in this paragraph apply to intentional noncompliance with this section.

(d) If a single employee is subject to multiple withholding orders or multiple notices of withholding for the support of more than one child, the payor of funds shall comply with all of the orders or notices to the extent that the total amount withheld from the obligor's income does not exceed the limits imposed under the Consumer Credit Protection Act, United States Code, title 15, section 1673(b), giving priority to amounts designated in each order or notice as current support as follows:

(1) if the total of the amounts designated in the orders for or notices of withholding as current support exceeds the amount available for income withholding, the payor of funds shall allocate to each order or notice an amount for current support equal to the amount designated in that order or notice as current support, divided by the total of the amounts designated in the orders or notices as current support, multiplied by the amount of the income available for income withholding; and

(2) if the total of the amounts designated in the orders for or notices of withholding as current support does not exceed the amount available for income withholding, the payor of funds shall pay the amounts designated as current support, and shall allocate to each order or notice an amount for past due support, equal to the amount designated in that order or notice as past due support, divided by the total of the amounts designated in the orders or notices as past due support, multiplied by the amount of income remaining available for income withholding after the payment of current support.

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(e) When an order for or notice of withholding is in effect and the obligor's employment is terminated, the obligor and the payor of funds shall notify the public authority of the termination within ten days of the termination date. The termination notice shall include the obligor's home address and the name and address of the obligor's new payor of funds, if known.

(f) A payor of funds may deduct one dollar from the obligor's remaining salary for each payment made pursuant to an order for or notice of withholding under this section to cover the expenses of withholding.

EFFECTIVE DATE. This section is effective October 1, 2009.

Sec. 8. Laws 2007, chapter 147, article 2, section 21, the effective date, is amended to read:

EFFECTIVE DATE. Subdivision 1 is effective February 1, 2008, and subdivision 2 is effective ~~May 1, 2008~~ March 1, 2009.

Sec. 9. Laws 2007, chapter 147, article 19, section 3, subdivision 1, is amended to read:

Subdivision 1. Total Appropriation $5,294,627,000 $5,695,458,000

Appropriations by Fund

2008 2009

General 4,614,727,000 4,940,293,000

State Government

Special Revenue 549,000 565,000

Health Care Access 426,628,000 492,759,000

Federal TANF 250,537,000 260,051,000

Lottery Prize Fund 2,185,000 1,790,000

The amounts that may be spent for each purpose are specified in the following subdivisions.

Receipts for Systems Projects. Appropriations and federal receipts for information system projects for MAXIS, PRISM, MMIS, and SSIS must be deposited in the state system account authorized in Minnesota Statutes, section 256.014. Money appropriated for computer projects approved by the Minnesota Office of Enterprise Technology, funded by the legislature, and approved by the commissioner of finance, may be transferred from one project to another and from development to operations as the commissioner of human services considers necessary. Any unexpended balance in the appropriation for these projects does not cancel but is available for ongoing development and operations.

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Pay for Performance. (a) Of the general fund appropriation, $272,000 each year is available to the commissioner of human services only under the following circumstances:

(1) $272,000 shall be made available by the commissioner of finance on January 1, 2009, only after notification by the commissioner of human services to the commissioner of finance and to the chairs of the relevant house of representatives and senate finance and policy committees that the average number of days from the receipt of a MinnesotaCare application at the state processing unit until the initial eligibility determination of the application was 30 days or less during the period October 1, 2007, to September 30, 2008. Applications transferred from counties to the state processing unit are excluded from this calculation; and

(2) $272,000 shall be made available by the commissioner of finance on January 1, 2009, only after notification by the commissioner of human services to the commissioner of finance and to the chairs of the relevant house of representatives and senate finance and policy committees that the commissioner initiated a separate treatment program for persons in the Minnesota sex offenders program who are between the ages of 18 and 25 by January 1, 2008.

(b) Regardless of whether these appropriations are made available to the commissioner of human services, they shall be part of base level funding for the biennium beginning July 1, 2009.

Purchasing Alliance Fund Transfer. On September 1, 2007, any remaining balance in the purchasing alliance stop-loss fund account established under Minnesota Statutes, section 256.956, shall transfer to the general fund.

Nonfederal Share Transfers. The nonfederal share of activities for which federal administrative reimbursement is appropriated to the commissioner may be transferred to the special revenue fund.

TANF Maintenance of Effort. (a) In order to meet the basic MOE requirements of the TANF block grant specified under Code of Federal Regulations, title 45, section 263.1, the commissioner may only report nonfederal money expended for allowable activities listed in the following clauses as TANF/MOE expenditures:

(1) MFIP cash, diversionary work program, and food assistance benefits under Minnesota Statutes, chapter 256J;

(2) the child care assistance programs under Minnesota Statutes, sections 119B.03 and 119B.05, and county child care administrative costs under Minnesota Statutes, section 119B.15;

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(3) state and county MFIP administrative costs under Minnesota Statutes, chapters 256J and 256K;

(4) state, county, and tribal MFIP employment services under Minnesota Statutes, chapters 256J and 256K;

(5) expenditures made on behalf of noncitizen MFIP recipients who qualify for the medical assistance without federal financial participation program under Minnesota Statutes, section 256B.06, subdivision 4, paragraphs (d), (e), and (j); and

(6) qualifying working family credit expenditures under Minnesota Statutes, section 290.0671.

(b) The commissioner shall ensure that sufficient qualified nonfederal expenditures are made each year to meet the state's TANF/MOE requirements. For the activities listed in paragraph (a), clauses (2) to (6), the commissioner may only report expenditures that are excluded from the definition of assistance under Code of Federal Regulations, title 45, section 260.31.

(c) The commissioner shall ensure that the MOE used by the commissioner of finance for the February and November forecasts required under Minnesota Statutes, section 16A.103, contains expenditures under paragraph (a), clause (1), equal to at least 16 percent of the total required under Code of Federal Regulations, title 45, section 263.1.

(d) For the federal fiscal year beginning October 1, 2007, the commissioner may not claim an amount of TANF/MOE in excess of the 75 percent standard in Code of Federal Regulations, title 45, section 263.1(a)(2), except:

(1) to the extent necessary to meet the 80 percent standard under Code of Federal Regulations, title 45, section 263.1(a)(1), if it is determined by the commissioner that the state will not meet the TANF work participation target rate for the current year;

(2) to provide any additional amounts under Code of Federal Regulations, title 45, section 264.5, that relate to replacement of TANF funds due to the operation of TANF penalties;

(3) to provide any additional amounts that may contribute to avoiding or reducing TANF work participation penalties through the operation of the excess MOE provisions of Code of Federal Regulations, title 45, section 261.43(a)(2); and

(4) for the purposes of clauses (1) to (3), the commissioner may supplement the MOE claim with working family credit expenditures to the extent such expenditures or other qualified expenditures are otherwise available after considering the expenditures allowed in this section.

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(e) If allowable by the federal Office of Family Assistance, the commissioner may claim excess MOE with respect to federal fiscal years 2006 and 2007 to the extent that working family credit expenditures are otherwise available to supplement the state's MOE claim for those years after considering the expenditures allowed in this subdivision.

If other qualified expenditures are available, the commissioner may use those expenditures as excess MOE and by April 15, 2009, shall report those expenditures to the chairs of the senate and house of representatives Finance Committees, the senate Health and Human Services Budget Division, and house of representatives Health Care and Human Services Finance Division.

~~(d)~~ (f) Minnesota Statutes, section 256.011, subdivision 3, which requires that federal grants or aids secured or obtained under that subdivision be used to reduce any direct appropriations provided by law, does not apply if the grants or aids are federal TANF funds.

~~(e)~~ (g) Notwithstanding any contrary provision in this article, this rider expires June 30, 2011.

Working Family Credit Expenditures as TANF/MOE. The commissioner may claim as TANF/MOE up to $6,707,000 per year for fiscal year 2008 through fiscal year 2011. Notwithstanding any contrary provision in this article, this rider expires June 30, 2011.

Additional Working Family Credit Expenditures to be Claimed for TANF/MOE. In addition to the amounts provided in this section, the commissioner may count the following amounts of working family credit expenditure as TANF/MOE:

(1) fiscal year 2008, ~~$11,097,000~~ $28,222,000;

(2) fiscal year 2009, ~~$25,401,000~~ $42,905,000;

(3) fiscal year 2010, ~~$20,398,000~~ $29,026,000; and

(4) fiscal year 2011, ~~$19,841,000~~ $28,361,000.

Notwithstanding any contrary provision in this article, this rider expires June 30, 2011.

Capitation Rate Increase. Of the health care access fund appropriations to the University of Minnesota in the higher education omnibus appropriation bill, $2,157,000 in fiscal year 2008 and $2,157,000 in fiscal year 2009 are to be used to increase the capitation payments under Minnesota Statutes, section 256B.69.

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Sec. 10. REPEALER.

Minnesota Statutes 2006, sections 256.741, subdivision 15; and 256J.24, subdivision 6, are repealed.

ARTICLE 4

HEALTH CARE

Section 1. Minnesota Statutes 2006, section 256.969, subdivision 2b, is amended to read:

Subd. 2b. Operating payment rates. In determining operating payment rates for admissions occurring on or after the rate year beginning January 1, 1991, and every two years after, or more frequently as determined by the commissioner, the commissioner shall obtain operating data from an updated base year and establish operating payment rates per admission for each hospital based on the cost-finding methods and allowable costs of the Medicare program in effect during the base year. Rates under the general assistance medical care, medical assistance, and MinnesotaCare programs shall not be rebased to more current data on January 1, 1997, ~~and~~ January 1, 2005, and for the first year of the rebased period beginning January 1, 2009. The base year operating payment rate per admission is standardized by the case mix index and adjusted by the hospital cost index, relative values, and disproportionate population adjustment. The cost and charge data used to establish operating rates shall only reflect inpatient services covered by medical assistance and shall not include property cost information and costs recognized in outlier payments.

Sec. 2. Minnesota Statutes 2006, section 256.969, subdivision 20, is amended to read:

Subd. 20. Increases in medical assistance inpatient payments; conditions. (a) Medical assistance inpatient payments shall increase 20 percent for inpatient hospital originally paid admissions, excluding Medicare crossovers, that occurred between July 1, 1988 and December 31, 1990, if: (i) the hospital had 100 or fewer Minnesota medical assistance annualized paid admissions, excluding Medicare crossovers, that were paid by March 1, 1988, for the period January 1, 1987 to June 30, 1987; (ii) the hospital had 100 or fewer licensed beds on March 1, 1988; (iii) the hospital is located in Minnesota; and (iv) the hospital is not located in a city of the first class as defined in section 410.01. For purposes of this paragraph, medical assistance does not include general assistance medical care.

(b) Medical assistance inpatient payments shall increase 15 percent for inpatient hospital originally paid admissions, excluding Medicare crossovers, that occurred between July 1, 1988 and December 31, 1990, if: (i) the hospital had more than 100 but fewer than 250 Minnesota medical assistance annualized paid admissions, excluding Medicare crossovers, that were paid by March 1, 1988, for the period January 1, 1987 to June 30, 1987; (ii) the hospital had 100 or fewer licensed beds on March 1, 1988; (iii) the hospital is located in Minnesota; and (iv) the hospital is not located in a city of the first class as defined in section 410.01. For purposes of this paragraph, medical assistance does not include general assistance medical care.

(c) Medical assistance inpatient payment rates shall increase 20 percent for inpatient hospital originally paid admissions, excluding Medicare crossovers, that occur on or after October 1, 1992, if: (i) the hospital had 100 or fewer Minnesota medical assistance annualized paid admissions, excluding Medicare crossovers, that were paid by March 1, 1988, for the period January 1, 1987 to June 30, 1987; (ii) the hospital had 100 or fewer licensed beds on March 1, 1988; (iii) the hospital is located in Minnesota; and (iv) the hospital is not located in a city of the first class as defined in section 410.01. For a hospital that qualifies for an adjustment under this paragraph and under subdivision 9 or 23, the hospital must be paid the adjustment under subdivisions 9 and 23, as applicable, plus any amount by which the adjustment under this paragraph exceeds the adjustment under those subdivisions. For this paragraph, medical assistance does not include general assistance medical care.

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(d) Medical assistance inpatient payment rates shall increase 15 percent for inpatient hospital originally paid admissions, excluding Medicare crossovers, that occur after September 30, 1992, if: (i) the hospital had more than 100 but fewer than 250 Minnesota medical assistance annualized paid admissions, excluding Medicare crossovers, that were paid by March 1, 1988, for the period January 1, 1987 to June 30, 1987; (ii) the hospital had 100 or fewer licensed beds on March 1, 1988; (iii) the hospital is located in Minnesota; and (iv) the hospital is not located in a city of the first class as defined in section 410.01. For a hospital that qualifies for an adjustment under this paragraph and under subdivision 9 or 23, the hospital must be paid the adjustment under subdivisions 9 and 23, as applicable, plus any amount by which the adjustment under this paragraph exceeds the adjustment under those subdivisions. For purposes of this paragraph, medical assistance does not include general assistance medical care.

(e) For admissions occurring on or after July 1, 2008, fee-for-service inpatient payments must increase eight percent for a hospital with a medical assistance inpatient utilization rate of 17.95 percent of total patient days as of the base year in effect on July 1, 2005, and nine percent for a hospital with a medical assistance inpatient utilization rate of 59.60 percent of total patient days as of the base year in effect on July 1, 2005. Payments made to managed care plans must not be increased to reflect this increase. For purposes of this paragraph, medical assistance does not include general assistance medical care.

Sec. 3. Minnesota Statutes 2006, section 256B.0571, subdivision 8, is amended to read:

Subd. 8. Program established. (a) The commissioner, in cooperation with the commissioner of commerce, shall establish the Minnesota partnership for long-term care program to provide for the financing of long-term care through a combination of private insurance and medical assistance.

(b) An individual who meets the requirements in this paragraph is eligible to participate in the partnership program. The individual must:

(1) be a Minnesota resident at the time coverage first became effective under the partnership policy; and

(2) be a beneficiary of a partnership policy that (i) is issued on or after the effective date of the state plan amendment implementing the partnership program in Minnesota, or (ii) qualifies as a partnership policy under the provisions of subdivision 8a~~; and~~.

(3) have exhausted all of the benefits under the partnership policy as described in this section. Benefits received under a long-term care insurance policy before July 1, 2006, do not count toward the exhaustion of benefits required in this subdivision.

Sec. 4. Minnesota Statutes 2006, section 256B.0571, subdivision 9, is amended to read:

Subd. 9. Medical assistance eligibility. (a) Upon application for medical assistance program payment of long-term care services by an individual who meets the requirements described in subdivision 8, the commissioner shall determine the individual's eligibility for medical assistance according to paragraphs (b) to (i).

(b) After determining assets subject to the asset limit under section 256B.056, subdivision 3 or 3c, or 256B.057, subdivision 9 or 10, the commissioner shall allow the individual to designate assets to be protected from recovery under subdivisions 13 and 15 up to the dollar amount of the benefits utilized under the partnership policy as of the effective date of eligibility for medical assistance program payment of long-term care services. Benefits utilized under a long-term care insurance policy before July 1, 2006, do not count for the purpose of determining the amount of assets that can be designated. Designated assets shall be disregarded for purposes of determining eligibility for payment of long-term care services. The dollar amount of benefits utilized must be equal to the amount of claims paid by the issuer under the policy as verified by the issuer.

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(c) The individual shall identify the designated assets and the full fair market value of those assets and designate them as assets to be protected at the time of ~~initial~~ application for medical assistance payment of long-term care services. The full fair market value of real property or interests in real property shall be based on the most recent full assessed value for property tax purposes for the real property, unless the individual provides a complete professional appraisal by a licensed appraiser to establish the full fair market value. The extent of a life estate in real property shall be determined using the life estate table in the health care program's manual. Ownership of any asset in joint tenancy shall be treated as ownership as tenants in common for purposes of its designation as a disregarded asset. The unprotected value of any protected asset is subject to estate recovery according to subdivisions 13 and 15.

(d) The right to designate assets to be protected is personal to the individual and ends when the individual dies, except as otherwise provided in subdivisions 13 and 15. It does not include the increase in the value of the protected asset and the income, dividends, or profits from the asset. It may be exercised by the individual or by anyone with the legal authority to do so on the individual's behalf. It shall not be sold, assigned, transferred, or given away.

(e) If the dollar amount of the benefits utilized under a partnership policy is greater than the full fair market value of all assets protected at the time of the application for medical assistance long-term care services, As the individual continues to utilize benefits under a partnership policy after eligibility for medical assistance payment of long-term care services begins, the individual may designate, for additional protection, an increase in the value of protected assets and additional assets that become available during the individual's lifetime ~~for protection under this section~~ up to the amount of additional benefits utilized. The individual must make the designation in writing to the county agency no later than the last date on which the individual must report a change in circumstances to the county agency, as provided for under the medical assistance program. ~~Any excess used for this purpose shall not be available to the individual's estate to protect assets in the estate from recovery under section 256B.15 or 524.3-1202, or otherwise.~~ The amount used for this purpose must reduce the unused amount of asset protection available to protect assets in the individual's estate from recovery under section 256B.15 or 524.3-1202, or otherwise.

(f) This section applies only to estate recovery under United States Code, title 42, section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other provisions of federal law, including, but not limited to, recovery from trusts under United States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of the Deficit Reduction Act of 2005, Public Law 109-171.

(g) An individual's protected assets owned by the individual's spouse who applies for payment of medical assistance long-term care services shall not be protected assets or disregarded for purposes of eligibility of the individual's spouse solely because they were protected assets of the individual.

(h) Assets designated under this subdivision shall not be subject to penalty under section 256B.0595.

(i) The commissioner shall otherwise determine the individual's eligibility for payment of long-term care services according to medical assistance eligibility requirements.

Sec. 5. Minnesota Statutes 2007 Supplement, section 256B.0631, subdivision 1, is amended to read:

Subdivision 1. Co-payments. (a) Except as provided in subdivision 2, the medical assistance benefit plan shall include the following co-payments for all recipients, effective for services provided on or after October 1, 2003, and before January 1, 2009:

(1) $3 per nonpreventive visit. For purposes of this subdivision, a visit means an episode of service which is required because of a recipient's symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting by a physician or physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist;

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(2) $3 for eyeglasses;

(3) $6 for nonemergency visits to a hospital-based emergency room; and

(4) $3 per brand-name drug prescription and $1 per generic drug prescription, subject to a $12 per month maximum for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness.

(b) Except as provided in subdivision 2, the medical assistance benefit plan shall include the following co-payments for all recipients, effective for services provided on or after January 1, 2009:

(1) $6 for nonemergency visits to a hospital-based emergency room; ~~and~~

(2) $3 per brand-name drug prescription and $1 per generic drug prescription, subject to a $7 per month maximum for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness.; and

(3) for individuals identified by the commissioner with income at or below 100 percent of the federal poverty guidelines, total monthly co-payments must not exceed five percent of family income. For purposes of this paragraph, family income is the total earned and unearned income of the individual and the individual's spouse, if the spouse is enrolled in medical assistance and also subject to the five percent limit on co-payments.

Sec. 6. Minnesota Statutes 2007 Supplement, section 256B.0631, subdivision 3, is amended to read:

Subd. 3. Collection. (a) The medical assistance reimbursement to the provider shall be reduced by the amount of the co-payment, except that ~~reimbursement for prescription drugs~~ reimbursements shall not be reduced:

(1) once a recipient has reached the $12 per month maximum or the $7 per month maximum effective January 1, 2009, for prescription drug co-payments; or

(2) for a recipient identified by the commissioner under 100 percent of the federal poverty guidelines who has met their monthly five percent co-payment limit.

(b) The provider collects the co-payment from the recipient. Providers may not deny services to recipients who are unable to pay the co-payment.

(c) Medical assistance reimbursement to fee-for-service providers and payments to managed care plans shall not be increased as a result of the removal of the co-payments effective January 1, 2009.

Sec. 7. [256B.194] FEDERAL PAYMENTS.

Subdivision 1. Payments at actual cost. Notwithstanding any other statute or rule to the contrary, for providers that are units of government, the commissioner may limit medical assistance and MinnesotaCare payments to a provider's actual cost of providing services, according to the Centers for Medicare and Medicaid Services (CMS) final rule referenced in this subdivision. The commissioner may also require medical assistance and MinnesotaCare providers to provide any information necessary to determine Medicaid-related costs, and require the cooperation of providers in any audit or review necessary to ensure payments are limited to cost. This section does not apply to providers who are exempt from the provisions of the CMS final rule. This subdivision becomes effective when the CMS final rule, published May 29, 2007, at Federal Register, Vol. 72, No. 100, governing payments to providers that are units of government goes into effect at the end of the moratorium imposed by Congress.

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Subd. 2. Loss of federal financial participation. For all transfers, certified expenditures, and medical assistance payments listed in this subdivision, if the commissioner determines that federal financial participation is no longer available for the medical assistance payments listed, then related obligations for the nonfederal share of payments and the medical assistance payments must terminate. The commissioner shall notify all affected parties of the loss of federal financial participation, and the resulting payments and obligations that are terminated. If the commissioner determines that federal financial participation is no longer available for any medical assistance payments or contributions to the nonfederal share of medical assistance payments that have already been made, the commissioner may collect the medical assistance payments from providers and return contributions of the nonfederal share to its source. The transfers, certified expenditures, and medical assistance payments subject to this section are those specified in section 62J.692, subdivision 7, paragraphs (b) and (c); 256B.19, subdivisions 1c and 1d; 256B.195; 256B.431, subdivision 23; and 256B.69, subdivision 5c, paragraph (a), clauses (2) to (4); Laws 2002, chapter 220, article 17, section 2, subdivision 3; and Laws 2005, First Special Session chapter 4, article 9, section 2, subdivision 1.

Sec. 8. Minnesota Statutes 2007 Supplement, section 256B.199, is amended to read:

256B.199 PAYMENTS REPORTED BY GOVERNMENTAL ENTITIES.

(a) Effective July 1, 2007, the commissioner shall apply for federal matching funds for the expenditures in paragraphs (b) and (c).

(b) The commissioner shall apply for federal matching funds for certified public expenditures as follows:

(1) Hennepin County, and Hennepin County Medical Center~~, Ramsey County, Regions Hospital, the University of Minnesota, and Fairview-University Medical Center~~ shall report quarterly to the commissioner beginning June 1, 2007, payments made during the second previous quarter that may qualify for reimbursement under federal law;

(2) based on these reports, the commissioner shall apply for federal matching funds. These funds are appropriated to the commissioner ~~for the payments under section 256.969, subdivision 27~~ to offset medical assistance expenditures; and

(3) by May 1 of each year, beginning May 1, 2007, the commissioner shall inform the nonstate entities listed in this paragraph ~~(a)~~ of the amount of federal disproportionate share hospital payment money expected to be available in the current federal fiscal year.

(1) for hospital services occurring on or after July 1, 2007, general assistance medical care expenditures for fee-for-service inpatient and outpatient hospital payments made by the department shall be used to apply for federal matching funds, except as limited below:

(i) only those general assistance medical care expenditures made to an individual hospital that would not cause the hospital to exceed its individual hospital limits under section 1923 of the Social Security Act may be considered; and

(ii) general assistance medical care expenditures may be considered only to the extent of Minnesota's aggregate allotment under section 1923 of the Social Security Act; and

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(2) all hospitals must provide any necessary expenditure, cost, and revenue information required by the commissioner as necessary for purposes of obtaining federal Medicaid matching funds for general assistance medical care expenditures.

EFFECTIVE DATE. This section is effective retroactively from July 1, 2007.

Sec. 9. Minnesota Statutes 2006, section 256B.69, subdivision 5a, is amended to read:

(d)(1) Effective for services rendered on or after January 1, 2009, the commissioner shall withhold two percent of managed care plan payments under this section for the prepaid medical assistance and general assistance medical care programs. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.

(2) A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this paragraph. The return of the withhold under this paragraph is not subject to the requirements of paragraph (c).

Sec. 10. Minnesota Statutes 2006, section 256L.12, subdivision 9, is amended to read:

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(d) For services rendered on or after January 1, 2009, the commissioner shall withhold two percent of managed care plan payments under this section. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year. A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this paragraph.

Sec. 11. FEDERAL APPROVAL FOR INCREASED DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

By January 1, 2009, the commissioner of human services, in cooperation with hospitals with high rates of utilization by medical assistance enrollees, shall develop and submit for federal approval a proposal to increase disproportionate share hospital payments to Minnesota hospitals. In developing the proposal, the commissioner shall consider, but is not required to adopt, disproportionate share hospital payment proposals from other states that have received federal approval.

Sec. 12. REPEALER.

Minnesota Statutes 2007 Supplement, section 256.969, subdivision 27, is repealed retroactively from July 1, 2007.

ARTICLE 5

HEALTH AND HUMAN SERVICES APPROPRIATIONS

Section 1. HEALTH AND HUMAN SERVICES APPROPRIATION.

The sums shown in the columns marked "Appropriations" are added to or, if shown in parentheses, subtracted from the appropriations in Laws 2007, chapter 147, or other law to the agencies and for the purposes specified in this article. The appropriations are from the general fund, or another named fund, and are available for the fiscal years indicated for each purpose. The figures "2008" and "2009" used in this article mean that the addition or subtraction from appropriations listed under them are available for the fiscal year ending June 30, 2008, or June 30, 2009, respectively. "The first year" is fiscal year 2008. "The second year" is fiscal year 2009. "The biennium" is fiscal years 2008 and 2009. Supplemental appropriations and reductions for the fiscal year ending June 30, 2008, are effective the day following final enactment.

APPROPRIATIONS

Available for the Year

Ending June 30

2008 2009

Sec. 2. HUMAN SERVICES

Subdivision 1. Total Appropriation $(34,855,000) $(56,265,000)

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APPROPRIATIONS

Available for the Year

Ending June 30

2008 2009

Appropriations by Fund

2008 2009

General (51,980,000) (80,296,000)

Health Care Access 0 (3,292,000)

Federal TANF 17,125,000 27,323,000

Subd. 2. Agency Management

Financial Operations 0 (5,867,000)

The amounts that may be spent from the appropriation for each purpose are as follows:

Base Adjustment. The general fund base is increased $23,000 in fiscal year 2010 and $26,000 in fiscal year 2011.

Subd. 3. Revenue and Pass-Through Revenue Expenditures

Federal TANF 25,000,000 27,039,000

Additional TANF Transfer to Social Services Block Grant. In addition to transfers allowed under prior law, $5,754,000 in fiscal year 2009 is appropriated to the commissioner for the purposes of providing services for families with children whose incomes are at or below 200 percent of the federal poverty guidelines. The commissioner shall authorize a sufficient transfer of funds from the state's federal social services block grant to meet this appropriation. The funds must be distributed to counties for the children and community services grant according to the formula for state appropriations in Minnesota Statutes, chapter 256M.

Subd. 4. Children and Economic Assistance Grants

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) MFIP/DWP Grants

Appropriations by Fund

General (17,125,000) (25,947,000)

Federal TANF 17,125,000 27,311,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2008 2009

(b) MFIP Child Care Assistance Grants 0 0

Base Adjustment. The general fund base is increased $1,726,000 in fiscal year 2010 and $1,742,000 in fiscal year 2011 due to the onetime increase in adoption assistance grants and the onetime decreases in relative custody assistance grants, and county shift for children's mental health grants.

Funding Usage. Up to 75 percent of the fiscal year 2010 appropriation for children's mental health screening grants may be used to fund calendar year 2009 allocations for these programs, with the resulting calendar year funding pattern continuing into the future.

Subd. 4a. Children and Economic Assistance Management

General 0 12,000

Children and Economic Assistance Operations

Appropriations by Fund

General 0 12,000

MAXIS costs. $12,000 is appropriated in fiscal year 2009 for MAXIS systems costs. This appropriation is onetime only.

Subd. 5. Basic Health Care Grants

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) MinnesotaCare Grants

Health Care Access 0 (3,292,000)

Incentive Program and Outreach Grants. Of the appropriation for the Minnesota health care outreach program in Laws 2007, chapter 147, article 19, section 3, subdivision 7, paragraph (b):

(1) $400,000 in fiscal year 2009 from the general fund and $200,000 in fiscal year 2009 from the health care access fund are for the incentive program under Minnesota Statutes, section 256.962, subdivision 5. For the biennium beginning July 1, 2009, base level funding for this activity shall be $360,000 from the general fund and $160,000 from the health care access fund; and

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APPROPRIATIONS

Available for the Year

Ending June 30

2008 2009

(2) $100,000 in fiscal year 2009 from the general fund and $50,000 in fiscal year 2009 from the health care access fund are for the outreach grants under Minnesota Statutes, section 256.962, subdivision 2. For the biennium beginning July 1, 2009, base level funding for this activity shall be $90,000 from the general fund and $40,000 from the health care access fund.

(b) MA Basic Health Care Grants - Families and Children (17,985,000) (24,848,000)

Hospital Payment Delay. Notwithstanding Laws 2005, First Special Session chapter 4, article 9, section 2, subdivision 6, payments from the Medicaid Management Information System that would otherwise have been made for inpatient hospital services for medical assistance enrollees are delayed as follows: (1) for fiscal year 2008, the last payments for the month of June must be included in the first payments in fiscal year 2009; and (2) for fiscal year 2009, the last payments in the month of June must be included in the first payment of fiscal year 2010. The provisions of Minnesota Statutes, section 16A.124, shall not apply to these delayed payments.

Minnesota Disability Health Options Rate Setting Methodology. The commissioner shall develop and implement a methodology for risk adjusting payments for community alternatives for disabled individuals (CADI) and traumatic brain injury (TBI) home and community-based waiver services delivered under the Minnesota disability health options program (MnDHO) effective January 1, 2009. The commissioner shall take into account the weighting system used to determine county waiver allocations in developing the new payment methodology. Growth in the number of enrollees receiving CADI or TBI waiver payments through MnDHO is limited to an increase of 200 enrollees in each calendar year from January 2009 through December 2011. If those limits are reached, additional members may be enrolled in MnDHO for basic care services only as defined under Minnesota Statutes, section 256B.69, subdivision 28, and the commissioner may establish a waiting list for future access of MnDHO members to those waiver services.

Critical Access Dental Reimbursement. Effective for fiscal years beginning on or after July 1, 2009, funding for medical assistance critical access dental reimbursement rates must be paid from the health care access fund.

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APPROPRIATIONS

Available for the Year

Ending June 30

2008 2009

(d) General Assistance Medical Care Grants 0 (3,729,000)

MinnesotaCare Outreach Grants Special Revenue Account. The balance in the MinnesotaCare outreach grants special revenue account at the close of fiscal year 2008 must be transferred to the general fund.

Subd. 6. Health Care Management

The amounts that may be spent from the appropriation for each purpose are as follows:

Health Care Administration 0 100,000

Subd. 7. Continuing Care Grants

The amounts that may be spent from the appropriation for each purpose are as follows:

(a) MA Long-Term Care Facilities Grants (2,306,000) (2,291,000)

(b) MA Long-Term Care Waivers and Home Care Grants 0 (5,397,000)

Manage Growth in TBI and CADI Waiver. During the fiscal years beginning on July 1, 2008, July 1, 2009, and July 1, 2010, the commissioner shall allocate money for home and community-based programs covered under Minnesota Statutes, section 256B.49, to ensure a reduction in state spending that is equivalent to limiting the caseload growth of the traumatic brain injury (TBI) waiver to 200 allocations in each year of the biennium and the community alternatives for disabled individuals (CADI) waiver to 1,500 allocations each year of the biennium. Priorities for the allocation of funds must be for individuals anticipated to be discharged from institutional settings or who are at imminent risk of a placement in an institutional setting. Notwithstanding any contrary section in this article, this provision expires June 30, 2011.

Base Adjustment. The general fund base is increased $5,270,000 in fiscal year 2010 and $5,450,000 in fiscal year 2011 due to the county payment shift for adult mental health grants.

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APPROPRIATIONS

Available for the Year

Ending June 30

2008 2009

Targeted Case Management Work Group. $15,000 is appropriated from the general fund for fiscal year 2009 to the commissioner of human services for administrative costs directly related to the operation of the targeted case management work group.

(d) Chemical Dependency Entitlement Grants 0 (1,503,000)

Payments for Substance Abuse Treatment. For services provided in fiscal year 2009, county-negotiated rates and provider claims to the consolidated chemical dependency fund must not exceed rates charged for services in excess of those in effect on May 31, 2008. If statutes authorize a cost-of-living adjustment during fiscal year 2009, then notwithstanding any law to the contrary, fiscal year 2009 rates may not exceed those in effect on May 31, 2008, plus any authorized cost-of-living adjustments.

Chemical Dependency Treatment Fund Special Revenue Account. The lesser of the balance of the consolidated chemical dependency treatment fund at the close of fiscal year 2008 or $2,650,000 must be transferred and deposited into the general fund.

(e) Chemical Dependency Nonentitlement Grants 0 2,150,000

Base Level Adjustment. The general fund base for chemical dependency nonentitlement treatment grants shall be increased by $150,000 for fiscal years 2010 and 2011 for increased grants for methamphetamine treatment.

American Indian Youth Program. Of the general fund appropriation, $2,000,000 in fiscal year 2009 is for grants to be awarded competitively to American Indian tribes to purchase or develop one or more culturally specific treatment programs designed to serve youth from native cultures. This appropriation is onetime and available until spent.

(f) Other Continuing Care Grants 0 (4,381,000)

Base Level Adjustment. The general fund base is increased $7,633,000 in fiscal year 2010 and $5,332,000 in fiscal year 2011, due to the onetime reduction of HIV grants in fiscal year 2009, an increase each year for housing grants under Minnesota Statutes, section 256B.0658, and the adjustment for the county grant payment shift for developmental disability semi-independent services grants and developmental disability family support grants.

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APPROPRIATIONS

Available for the Year

Ending June 30

2008 2009

Housing Access Grants. Of the general fund appropriation, $250,000 is appropriated in fiscal year 2009 for housing access grants under Minnesota Statutes, section 256B.0658.

Funding Usage. Up to 75 percent of the fiscal year 2010 appropriation for developmental disability semi-independent living services grants and developmental disability family support grants may be used to fund calendar year 2009 allocations for these programs, with the resulting calendar year funding pattern continuing into the future.

Subd. 8. State-Operated Services

County Past Due Receivables. The commissioner is authorized to withhold county federal administrative reimbursement when the county of financial responsibility for cost-of-care payments due to the state under Minnesota Statutes, section 246.54 or 253B.045, is 180 days past due. The commissioner shall deposit the federal administrative withholding into the general fund to settle the claims with the county of financial responsibility.

Mental Health Services (225,000) (300,000)

Sec. 3. Health Department

Federally Qualified Health Centers. Effective for fiscal years beginning on or after July 1, 2009, the general fund appropriation of $1,500,000 each fiscal year for federally qualified health centers under Minnesota Statutes, section 145.9269, is eliminated and is replaced by a $1,500,000 appropriation each fiscal year from the health care access fund.

MERC Federal Compliance. Effective for fiscal years beginning on or after July 1, 2009, the general fund appropriation of $2,000,000 each fiscal year to the Mayo Clinic for the purpose of providing transition funding while federal compliance changes are made to the medical education and research cost funding distribution formula is eliminated and is replaced by a $2,000,000 appropriation each fiscal year from the health care access fund.

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ARTICLE 6

HEALTH AND HUMAN SERVICES FORECAST CHANGES

Section 1. SUMMARY OF APPROPRIATIONS; DEPARTMENT OF HUMAN SERVICES FORECAST ADJUSTMENT.

The dollar amounts shown are added to or, if shown in parentheses, are subtracted from the appropriations in Laws 2007, chapter 147, from the general fund, or any other fund named, to the Department of Human Services for the purposes specified in this article, to be available for the fiscal year indicated for each purpose. The figure "2008" used in this article means that the appropriation or appropriations listed are available for the fiscal year ending June 30, 2008. The figure "2009" used in this article means that the appropriation or appropriations listed are available for the fiscal year ending June 30, 2009.

2008 2009

General $6,739,000 $52,350,000

Health Care Access (84,156,000) (96,019,000)

TANF (28,427,000) (7,441,000)

Total $(105,844,000) $(51,110,000)

Sec. 2. COMMISSIONER OF HUMAN SERVICES

Subdivision 1. Total Appropriation $(105,844,000) $(51,110,000)

Appropriations by Fund

2008 2009

General 6,739,000 52,350,000

Health Care Access (84,156,000) (96,019,000)

TANF (28,427,000) (7,441,000)

Subd. 2. Revenue and Pass-Through

TANF 1,187,000 1,507,000

Subd. 3. Children and Economic Assistance Grants

General (4,960,000) 5,925,000

TANF (29,614,000) (8,948,000)

The amounts that may be spent from this appropriation for each purpose are as follows:

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9604

(a) MFIP/DWP Grants

Appropriations by Fund

General 25,139,000 11,665,000

TANF (29,614,000) (8,948,000)

(b) MFIP Child Care Assistance Grants (26,141,000) (10,710,000)

(d) Minnesota Supplemental Aid Grants 299,000 500,000

(e) Group Residential Housing Grants (6,786,000) (1,563,000)

Subd. 4. Basic Health Care Grants

General 30,075,000 48,389,000

Health Care Access (84,156,000) (96,019,000)

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) MinnesotaCare

Health Care Access (84,156,000) (96,019,000)

(b) MA Basic Health Care - Families and Children 13,525,000 7,005,000

(d) General Assistance Medical Care 18,842,000 35,905,000

Subd. 5. Continuing Care Grants (18,376,000) (1,964,000)

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) MA Long-Term Care Facilities (10,986,000) (2,148,000)

(b) MA Long-Term Care Waivers (18,484,000) (13,598,000)

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9605

ARTICLE 7

APPROPRIATIONS AND TRANSFERS

Section 1. DUPLICATE APPROPRIATIONS.

Unless another act explicitly provides otherwise, appropriations and transfers made in this act and other acts must be implemented only once, even if the provision or a similar provision with the same fiscal effect in the same fiscal year is included in another act. This section applies to laws enacted in the 2008 regular session."

Delete the title and insert:

"A bill for an act relating to state government; making changes to health and human services programs; amending continuing care, agency management, children and family services, and health care; awarding housing access grants; requiring studies and reports; making supplemental appropriations; reducing certain appropriations; making forecast adjustments; clarifying appropriations and transfers; amending Minnesota Statutes 2006, sections 13.461, by adding a subdivision; 256.01, by adding a subdivision; 256.741, subdivisions 2, 2a, 3; 256.969, subdivisions 2b, 20; 256B.0571, subdivisions 8, 9; 256B.0621, subdivisions 2, 6, 10; 256B.0924, subdivisions 4, 6; 256B.19, subdivision 1d; 256B.431, subdivision 23; 256B.69, subdivisions 5a, 6, by adding subdivisions; 256B.692, subdivision 2, by adding a subdivision; 256D.44, subdivisions 2, 5; 256L.12, subdivision 9; 518A.50; 518A.53, subdivision 5; Minnesota Statutes 2007 Supplement, sections 256.741, subdivision 1; 256B.0625, subdivision 20; 256B.0631, subdivisions 1, 3; 256B.199; 256B.434, subdivision 19; 256J.621; Laws 2007, chapter 147, article 2, section 21; article 19, section 3, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 256B; repealing Minnesota Statutes 2006, sections 256.741, subdivision 15; 256J.24, subdivision 6; Minnesota Statutes 2007 Supplement, section 256.969, subdivision 27."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

H. F. No. 4070, A bill for an act relating to capital improvements; appropriating money for public facilities; authorizing the sale and issuance of state bonds.

Reported the same back with the following amendments:

Page 2, after line 33, insert:

"Sec. 3. DUPLICATE APPROPRIATIONS.

Unless another act explicitly provides otherwise, appropriations and transfers made in this act and other acts must be implemented only once even if the provision or a similar provision with the same fiscal effect in the same fiscal year is included in another act. This section applies to laws enacted in the 2008 regular session."

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9606

Page 3, line 2, delete "and 2" and insert "to 3"

Renumber the sections in sequence

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

H. F. No. 4072, A bill for an act relating to capital improvements; appropriating money for asset preservation at the University of Minnesota and Minnesota State Colleges and Universities; authorizing the sale and issuance of state bonds.

Reported the same back with the following amendments:

Page 1, after line 18, insert:

"Sec. 3. DUPLICATE APPROPRIATIONS.

Page 1, line 20, delete "and 2" and insert "to 3"

Renumber the sections in sequence

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

S. F. No. 2564, A bill for an act relating to human services; modifying TANF maintenance of effort programs; amending Laws 2007, chapter 147, article 19, section 3, subdivision 1.

Reported the same back with the recommendation that the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9607

SECOND READING OF HOUSE BILLS

H. F. Nos. 1812, 3360 and 3569 were read for the second time.

INTRODUCTION AND FIRST READING OF HOUSE BILLS

The following House Files were introduced:

Dill introduced:

H. F. No. 4158, A bill for an act relating to taxation; authorizing St. Louis County to impose a mortgage and deed tax; creating an environmental response fund; proposing coding for new law in Minnesota Statutes, chapter 383C.

The bill was read for the first time and referred to the Committee on Taxes.

McFarlane introduced:

H. F. No. 4159, A bill for an act relating to taxation; property; providing that the Vadnais Lake Area Management Organization is a special taxing district; amending Minnesota Statutes 2006, section 275.066, as amended.

The bill was read for the first time and referred to the Committee on Taxes.

Koenen and Demmer introduced:

H. F. No. 4160, A bill for an act relating to property taxation; modifying the definition of property classified as agricultural; defining the classification of rural vacant land; modifying the criteria for property to be enrolled in the Minnesota agricultural property tax law; amending Minnesota Statutes 2006, sections 273.11, by adding a subdivision; 273.111, subdivisions 3, as amended, 4, 8, 9, 11, 11a, by adding a subdivision; 273.13, subdivision 23, as amended; repealing Minnesota Statutes 2006, section 273.111, subdivision 6.

The bill was read for the first time and referred to the Committee on Taxes.

Drazkowski introduced:

H. F. No. 4161, A bill for an act relating to state government; designating English as the official language; proposing coding for new law in Minnesota Statutes, chapter 1.

The bill was read for the first time and referred to the Committee on Governmental Operations, Reform, Technology and Elections.

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9608

Lenczewski introduced:

H. F. No. 4162, A bill for an act relating to taxation; modifying penalties; extending the time to file certain partnership returns; extending the time for filing certain refund claims; amending Minnesota Statutes 2006, sections 270C.56, subdivisions 1, as amended, 2, 3, by adding subdivisions; 289A.19, subdivision 1; 289A.40, subdivision 1.

The bill was read for the first time and referred to the Committee on Taxes.

Thissen introduced:

H. F. No. 4163, A bill for an act relating to health; establishing a health care professionals task force; repealing Minnesota Statutes 2006, sections 147.0001; 147.001; 147.01; 147.011; 147.02, subdivisions 1a, 2a, 5, 6, 6a; 147.025; 147.03; 147.031; 147.032, subdivisions 1, 2, 3; 147.035; 147.037, subdivisions 1a, 2; 147.038; 147.0381; 147.039; 147.0391; 147.04; 147.081; 147.09; 147.091, subdivisions 1a, 1b, 2, 2a, 3, 4, 5, 7, 8; 147.092; 147.111; 147.121; 147.131; 147.141; 147.151; 147.155; 147.161; 147.162; 147.21; 147.22; 147.231; 147.37; 147A.001; 147A.01; 147A.02; 147A.03; 147A.04; 147A.05; 147A.06; 147A.07; 147A.08; 147A.09; 147A.10; 147A.11; 147A.13, subdivisions 2, 3, 4, 5, 7; 147A.14; 147A.15; 147A.155; 147A.16; 147A.17; 147A.18; 147A.19; 147A.20; 147A.21; 147A.22; 147A.23; 147A.24; 147A.26; 147A.27, subdivisions 1, 3; 147B.01; 147B.02; 147B.03; 147B.04; 147B.05, subdivisions 1, 3; 147B.06; 147B.07; 147B.08; 147C.01; 147C.05; 147C.10; 147C.15; 147C.20; 147C.25; 147C.30; 147C.35, subdivisions 1, 3; 147C.40; 147D.01; 147D.03; 147D.05, subdivisions 1, 2, 3, 4; 147D.07; 147D.09; 147D.11; 147D.13; 147D.15; 147D.17; 147D.19; 147D.21; 147D.23; 147D.25, subdivisions 1, 3; 147D.27; 148.01; 148.02; 148.03; 148.031; 148.04; 148.05; 148.06; 148.07; 148.08; 148.09; 148.10, subdivisions 2, 3, 4, 5, 6; 148.102; 148.103; 148.104; 148.105; 148.106; 148.108; 148.171; 148.181; 148.191; 148.211; 148.212; 148.231; 148.232; 148.233; 148.234; 148.235, subdivisions 1, 2, 2a, 4, 4a, 4b, 6, 7, 8, 9, 10; 148.241; 148.251; 148.261, subdivision 4; 148.262; 148.263; 148.264; 148.265; 148.266; 148.267; 148.271; 148.281; 148.283; 148.284; 148.285; 148.511; 148.512; 148.513; 148.514; 148.515, subdivisions 1, 4, 6; 148.516; 148.5161; 148.517; 148.5175; 148.518; 148.519; 148.5191; 148.5192; 148.5193; 148.5194; 148.5195; 148.5196; 148.5197; 148.5198; 148.52; 148.53; 148.54; 148.56; 148.57; 148.571; 148.572; 148.573; 148.574; 148.575; 148.576; 148.577; 148.59; 148.60; 148.603; 148.61; 148.62; 148.621; 148.622; 148.623; 148.624; 148.625; 148.626; 148.627; 148.628; 148.629; 148.630; 148.631; 148.632; 148.633; 148.6401; 148.6402; 148.6403; 148.6404; 148.6405; 148.6408; 148.6410; 148.6412; 148.6415; 148.6418; 148.6420; 148.6423; 148.6425; 148.6428; 148.6430; 148.6432; 148.6435; 148.6438; 148.6440; 148.6443; 148.6445, subdivisions 3, 4, 5, 6, 7, 8, 10, 11; 148.6448; 148.6450; 148.65, subdivisions 1, 4, 5, 6, 7; 148.66; 148.67, subdivision 2; 148.691, subdivisions 1, 2; 148.736, subdivisions 2, 3; 148.737; 148.76, subdivision 2; 148.77; 148.7801; 148.7802; 148.7803; 148.7804; 148.7805; 148.7806; 148.7807; 148.7808; 148.7809; 148.7810; 148.7811; 148.7812; 148.7813; 148.7814; 148.7815; 148.88; 148.881; 148.89; 148.90; 148.905; 148.906; 148.907; 148.908; 148.909; 148.9105; 148.911; 148.915; 148.916; 148.925; 148.941, subdivisions 1, 3, 4, 5, 6, 7, 8; 148.952; 148.96; 148.975; 148.98; Minnesota Statutes 2007 Supplement, sections 147.02, subdivisions 1, 1b; 147.032, subdivision 4; 147.037, subdivision 1; 147.091, subdivisions 1, 6; 147A.13, subdivisions 1, 6; 147A.27, subdivision 2; 147B.05, subdivision 2; 147C.35, subdivision 2; 147D.05, subdivision 5; 147D.25, subdivision 2; 148.10, subdivision 1; 148.235, subdivisions 11, 12; 148.261, subdivisions 1, 5; 148.515, subdivisions 2, 2a; 148.6445, subdivisions 1, 2; 148.65, subdivisions 2, 3, 8; 148.67, subdivision 1; 148.70; 148.705; 148.706; 148.71; 148.715; 148.721; 148.722; 148.723; 148.724; 148.725; 148.73; 148.735; 148.736, subdivision 1; 148.74; 148.75; 148.754; 148.755; 148.76, subdivision 1; 148.78; 148.941, subdivision 2; 148.965; 148.995; 148.996; 148.997.

The bill was read for the first time and referred to the Committee on Health and Human Services.

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9609

Eken introduced:

H. F. No. 4164, A bill for an act relating to natural resources; providing for wildlife disease management; providing civil penalties; amending Minnesota Statutes 2006, section 97A.045, subdivision 11.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

MESSAGES FROM THE SENATE

The following message was received from the Senate:

Madam Speaker:

I hereby announce the passage by the Senate of the following Senate File, herewith transmitted:

S. F. No. 3099.

Colleen J. Pacheco, Second Assistant Secretary of the Senate

FIRST READING OF SENATE BILLS

S. F. No. 3099, A bill for an act relating to health care; establishing a statewide health improvement program; monitoring child obesity; establishing a health improvement fund; establishing a public health improvement assessment; establishing health care homes; increasing continuity of care; modifying outreach efforts; establishing primary care education initiatives; increasing affordability and continuity of care with public health care programs; creating a health insurance exchange; establishing Section 125 Plans; providing for registration of health insurance access brokers; providing for fund transfers; providing for health care payment restructuring system; creating a Health Care Transformation Commission; restructuring the health care payment system; creating a savings reinvestment fund; establishing a savings recapture assessment; establishing cost containment goals; specifying an affordability standard; providing subsidies for employer-subsidized coverage; requiring providers to list prices; establishing an electronic prescription drug program; providing for fees; requiring mandated reports; authorizing rulemaking; appropriating money; amending Minnesota Statutes 2006, sections 13.3806, by adding a subdivision; 62A.65, subdivision 3; 62E.141; 62L.12, subdivision 4; 62Q.735, subdivision 1; 144.1501, subdivision 2, by adding a subdivision; 256.01, by adding a subdivision; 256B.69, by adding a subdivision; 256L.05, by adding a subdivision; 256L.06, subdivision 3; 256L.07, subdivision 3; 256L.15, by adding a subdivision; Minnesota Statutes 2007 Supplement, sections 62J.496, by adding a subdivision; 62J.81, subdivision 1; 62J.82, subdivision 1; 256.962, subdivisions 5, 6; 256B.056, subdivision 10; 256L.03, subdivisions 3, 5; 256L.04, subdivisions 1, 7; 256L.05, subdivision 3a; 256L.07, subdivision 1; 256L.15, subdivisions 1, 2; Laws 2007, chapter 147, article 5, section 19; proposing coding for new law in Minnesota Statutes, chapters 16A; 62J; 145; 256B; proposing coding for new law as Minnesota Statutes, chapter 62U; repealing Minnesota Statutes 2006, sections 62A.63; 62A.64; 62Q.49; 62Q.65; 62Q.736; 256L.15, subdivision 3.

The bill was read for the first time and referred to the Committee on Ways and Means.

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9610

The following Conference Committee Report was received:

CONFERENCE COMMITTEE REPORT ON H. F. NO. 380

A bill for an act relating to capital improvements; authorizing spending to acquire and better public land and buildings and other improvements of a capital nature with certain conditions; establishing new programs and modifying existing programs; authorizing the sale of state bonds; canceling and modifying previous appropriations; appropriating money; amending Minnesota Statutes 2006, sections 16B.32, by adding a subdivision; 16B.325; 16B.335, subdivision 2; 103D.335, subdivision 17; 116.155, subdivisions 2, 3; 116J.423, by adding a subdivision; 119A.45; 462A.21, by adding a subdivision; Minnesota Statutes 2007 Supplement, sections 16A.695, subdivision 3; 103G.222, subdivision 1; Laws 1997, chapter 21, section 1; Laws 2003, First Special Session chapter 20, article 1, section 12, subdivision 3; Laws 2005, chapter 20, article 1, sections 7, subdivision 21; 17; 23, subdivisions 8, 11, as amended, 16; Laws 2006, chapter 258, sections 7, subdivisions 7, 11, 22; 16, subdivision 5; 21, subdivisions 6, 14, 15; 23, subdivision 3; Laws 2006, chapter 282, article 11, section 2, subdivision 6; proposing coding for new law in Minnesota Statutes, chapters 116; 137; 462A.

March 31, 2008

The Honorable Margaret Anderson Kelliher

Speaker of the House of Representatives

The Honorable James P. Metzen

President of the Senate

We, the undersigned conferees for H. F. No. 380 report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 380 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. CAPITAL IMPROVEMENT APPROPRIATIONS.

The sums shown in the column under "Appropriations" are appropriated from the bond proceeds fund, or another named fund, to the state agencies or officials indicated, to be spent for public purposes. Appropriations of bond proceeds must be spent as authorized by the Minnesota Constitution, article XI, section 5, paragraph (a), to acquire and better public land and buildings and other public improvements of a capital nature, or as authorized by the Minnesota Constitution, article XI, section 5, paragraphs (b) to (j), or article XIV. Unless otherwise specified, the appropriations in this act are available until the project is completed or abandoned subject to Minnesota Statutes, section 16A.642.

SUMMARY

University of Minnesota $131,166,000

Minnesota State Colleges and Universities 280,935,000

Education 19,740,000

Minnesota State Academies 2,800,000

Perpich Center for Arts Education 355,000

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9611

Natural Resources 104,805,000

Pollution Control Agency 30,000,000

Board of Water and Soil Resources 30,475,000

Agriculture 20,000

Zoological Garden 2,500,000

Administration 15,725,000

Minnesota Amateur Sports Commission 7,725,000

Military Affairs 6,000,000

Public Safety 13,135,000

Transportation 65,700,000

Metropolitan Council 139,200,000

Human Services 9,505,000

Veterans Affairs 11,282,000

Corrections 32,000,000

Employment and Economic Development 143,125,000

Public Facilities Authority 49,800,000

Housing Finance Agency 1,000,000

Minnesota Historical Society 9,594,000

Bond Sale Expenses 998,000

Cancellations (27,100,000)

Lewis and Clark 5,282,000

TOTAL $1,085,767,000

Bond Proceeds Fund (General Fund Debt Service) 934,098,000

Bond Proceeds Fund (User Financed Debt Service) 72,512,000

Maximum Effort School Loan Fund 16,000,000

State Transportation Fund 2,000,000

Journal of the House - 98th Day - Wednesday, April 2, 2008 - Top of Page 9612

Remediation Fund 25,000,000

General Fund 15,057,000

Trunk Highway Fund 48,200,000

Bond Proceeds Cancellations (27,100,000)

APPROPRIATIONS

Sec. 2. UNIVERSITY OF MINNESOTA

Subdivision 1. Total Appropriation $131,166,000

To the Board of Regents of the University of Minnesota for the purposes specified in this section.

Subd. 2. Higher Education Asset Preservation and Replacement (HEAPR) 35,000,000

To be spent in accordance with Minnesota Statutes, section 135A.046.

Subd. 3. Twin Cities Campus

(a) Scienc