1.1.................... moves to amend H.F. No. .... as follows:
1.2Page 9, after line 24, insert:

1.3    "Sec. 4. Minnesota Statutes 2010, section 62U.04, subdivision 1, is amended to read:
1.4    Subdivision 1. Development of tools to improve costs and quality outcomes.
1.5    The commissioner of health shall develop a plan to create transparent prices, encourage
1.6greater provider innovation and collaboration across points on the health continuum
1.7in cost-effective, high-quality care delivery, reduce the administrative burden on
1.8providers and health plans associated with submitting and processing claims, and provide
1.9comparative information to consumers on variation in health care cost and quality across
1.10providers. The development must be complete by January 1, 2010.
1.11EFFECTIVE DATE.This section is effective July 1, 2012.

1.12    Sec. 5. Minnesota Statutes 2010, section 62U.04, subdivision 2, is amended to read:
1.13    Subd. 2. Calculation of health care costs and quality. The commissioner of health
1.14shall develop a uniform method of calculating providers' relative cost of care, defined as a
1.15measure of health care spending including resource use and unit prices, and relative quality
1.16of care. In developing this method, the commissioner must address the following issues:
1.17    (1) provider attribution of costs and quality;
1.18    (2) appropriate adjustment for outlier or catastrophic cases;
1.19    (3) appropriate risk adjustment to reflect differences in the demographics and health
1.20status across provider patient populations, using generally accepted and transparent risk
1.21adjustment methodologies and case mix adjustment;
1.22    (4) specific types of providers that should be included in the calculation;
1.23    (5) specific types of services that should be included in the calculation;
1.24    (6) appropriate adjustment for variation in payment rates;
1.25    (7) the appropriate provider level for analysis;
2.1    (8) payer mix adjustments, including variation across providers in the percentage of
2.2revenue received from government programs; and
2.3    (9) other factors that the commissioner determines and the advisory committee,
2.4established under subdivision 3, determine are needed to ensure validity and comparability
2.5of the analysis.
2.6EFFECTIVE DATE.This section is effective July 1, 2012, and applies to all
2.7information provided or released to the public or to health care providers, pursuant to
2.8Minnesota Statutes section 62U.04, on or after that date.

2.9    Sec. 6. Minnesota Statutes 2011 Supplement, section 62U.04, subdivision 3, is
2.10amended to read:
2.11    Subd. 3. Provider peer grouping; system development; advisory committee.
2.12    (a) The commissioner shall develop a peer grouping system for providers based on a
2.13combined measure that incorporates both provider risk-adjusted cost of care and quality of
2.14care, and for specific conditions as determined by the commissioner. In developing this
2.15system, the commissioner shall consult and coordinate with health care providers, health
2.16plan companies, state agencies, and organizations that work to improve health care quality
2.17in Minnesota. For purposes of the final establishment of the peer grouping system, the
2.18commissioner shall not contract with any private entity, organization, or consortium of
2.19entities that has or will have a direct financial interest in the outcome of the system.
2.20(b) The commissioner shall establish an advisory committee comprised of
2.21representatives of health care providers, health plan companies, consumers, state agencies,
2.22employers, academic researchers, and organizations that work to improve health care
2.23quality in Minnesota. The advisory committee shall meet no fewer than three times
2.24per year. The commissioner shall consult with the advisory committee in developing
2.25and administering the peer grouping system, including but not limited to the following
2.26activities:
2.27(1) establishing peer groups;
2.28(2) selecting quality measures;
2.29(3) recommending thresholds for completeness of data and statistical significance
2.30for the purposes of public release of provider peer grouping results;
2.31(4) considering whether adjustments are necessary for facilities that provide medical
2.32education, level 1 trauma services, neonatal intensive care, or inpatient psychiatric care;
2.33(5) recommending inclusion or exclusion of other costs; and
2.34(6) adopting patient attribution and quality and cost-scoring methodologies.
3.1    Subd. 3a. Provider peer grouping; dissemination of data to providers. (b) By
3.2no later than October 15, 2010, (a) The commissioner shall disseminate information
3.3to providers on their total cost of care, total resource use, total quality of care, and the
3.4total care results of the grouping developed under this subdivision 3 in comparison to an
3.5appropriate peer group. Data used for this analysis must be the most recent data available.
3.6Any analyses or reports that identify providers may only be published after the provider
3.7has been provided the opportunity by the commissioner to review the underlying data in
3.8order to verify, consistent with the findings specified in subdivision 3c, paragraph (d), the
3.9accuracy and representativeness of any analyses or reports and submit comments to the
3.10commissioner or initiate an appeal under subdivision 3b. Providers may Upon request,
3.11providers shall be given any data for which they are the subject of the data. The provider
3.12shall have 30 60 days to review the data for accuracy and initiate an appeal as specified
3.13in paragraph (d) subdivision 3b.
3.14    (c) By no later than January 1, 2011, (b) The commissioner shall disseminate
3.15information to providers on their condition-specific cost of care, condition-specific
3.16resource use, condition-specific quality of care, and the condition-specific results of the
3.17grouping developed under this subdivision 3 in comparison to an appropriate peer group.
3.18Data used for this analysis must be the most recent data available. Any analyses or
3.19reports that identify providers may only be published after the provider has been provided
3.20the opportunity by the commissioner to review the underlying data in order to verify,
3.21consistent with the findings specified in subdivision 3c, paragraph (d), the accuracy and
3.22representativeness of any analyses or reports and submit comments to the commissioner
3.23or initiate an appeal under subdivision 3b. Providers may Upon request, providers shall
3.24be given any data for which they are the subject of the data. The provider shall have 30
3.2560 days to review the data for accuracy and initiate an appeal as specified in paragraph
3.26(d) subdivision 3b.
3.27    Subd. 3b. Provider peer grouping; appeals process. (d) The commissioner shall
3.28establish an appeals a process to resolve disputes from providers regarding the accuracy
3.29of the data used to develop analyses or reports or errors in the application of standards
3.30or methodology established by the commissioner in consultation with the advisory
3.31committee. When a provider appeals the accuracy of the data used to calculate the peer
3.32grouping system results submits an appeal, the provider shall:
3.33(1) clearly indicate the reason they believe the data used to calculate the peer group
3.34system results are not accurate or reasons for the appeal;
3.35(2) provide any evidence and, calculations, or documentation to support the reason
3.36that data was not accurate for the appeal; and
4.1(3) cooperate with the commissioner, including allowing the commissioner access to
4.2data necessary and relevant to resolving the dispute.
4.3The commissioner shall cooperate with the provider during the data review period
4.4specified in subdivisions 3a and 3c by giving the provider information necessary for the
4.5preparation of an appeal.
4.6If a provider does not meet the requirements of this paragraph subdivision, a provider's
4.7appeal shall be considered withdrawn. The commissioner shall not publish peer grouping
4.8results for a specific provider under paragraph (e) or (f) while that provider has an
4.9unresolved appeal until the appeal has been resolved.
4.10    Subd. 3c. Provider peer grouping; publication of information for the public.
4.11    (e) Beginning January 1, 2011, the commissioner shall, no less than annually, publish
4.12information on providers' total cost, total resource use, total quality, and the results of
4.13the total care portion of the peer grouping process. The results that are published must
4.14be on a risk-adjusted basis. (a) The commissioner may publicly release summary data
4.15related to the peer grouping system as long as the data do not contain information or
4.16descriptions from which the identity of individual hospitals, clinics, or other providers
4.17may be discerned.
4.18(f) Beginning March 30, 2011, the commissioner shall no less than annually publish
4.19information on providers' condition-specific cost, condition-specific resource use, and
4.20condition-specific quality, and the results of the condition-specific portion of the peer
4.21grouping process. The results that are published must be on a risk-adjusted basis. (b) The
4.22commissioner may publicly release analyses or results related to the peer grouping system
4.23that identify hospitals, clinics, or other providers only if the following criteria are met:
4.24(1) the results, data, and summaries, including any graphical depictions of provider
4.25performance, have been distributed to providers at least 120 days prior to publication;
4.26(2) the commissioner has provided an opportunity for providers to verify and
4.27review data for which the provider is the subject consistent with the findings specified
4.28in subdivision 3c, paragraph (d);
4.29(3) the results meet thresholds of validity, reliability, statistical significance,
4.30representativeness, and other standards that reflect the recommendations of the advisory
4.31committee, established under subdivision 3; and
4.32(4) any public report or other usage of the analyses, report, or data used by the
4.33state clearly notifies consumers about how to use and interpret the results, including
4.34any limitations of the data and analysis.
4.35(g) (c) After publishing the first public report, the commissioner shall, no less
4.36frequently than annually, publish information on providers' total cost, total resource use,
5.1total quality, and the results of the total care portion of the peer grouping process, as well
5.2as information on providers' condition-specific cost, condition-specific resource use,
5.3and condition-specific quality, and the results of the condition-specific portion of the
5.4peer grouping process. The results that are published must be on a risk-adjusted basis,
5.5including case mix adjustments.
5.6(d) The commissioner shall convene a work group comprised of representatives
5.7of physician clinics, hospitals, their respective statewide associations, and other
5.8relevant stakeholder organizations to make recommendations on data to be made
5.9available to hospitals and physician clinics to allow for verification of the accuracy and
5.10representativeness of the provider peer grouping results.
5.11    Subd. 3d. Provider peer grouping; standards for dissemination and publication.
5.12(a) Prior to disseminating data to providers under paragraph (b) or (c) subdivision 3a or
5.13publishing information under paragraph (e) or (f) subdivision 3c, the commissioner, in
5.14consultation with the advisory committee, shall ensure the scientific and statistical validity
5.15and reliability of the results according to the standards described in paragraph (h) (b).
5.16If additional time is needed to establish the scientific validity, statistical significance,
5.17and reliability of the results, the commissioner may delay the dissemination of data to
5.18providers under paragraph (b) or (c) subdivision 3a, or the publication of information under
5.19paragraph (e) or (f) subdivision 3c. If the delay is more than 60 days, the commissioner
5.20shall report in writing to the chairs and ranking minority members of the legislative
5.21committees with jurisdiction over health care policy and finance the following information:
5.22(1) the reason for the delay;
5.23(2) the actions being taken to resolve the delay and establish the scientific validity
5.24and reliability of the results; and
5.25(3) the new dates by which the results shall be disseminated.
5.26If there is a delay under this paragraph, The commissioner must disseminate the
5.27information to providers under paragraph (b) or (c) subdivision 3a at least 90 120 days
5.28before publishing results under paragraph (e) or (f) subdivision 3c.
5.29(h) (b) The commissioner's assurance of valid, timely, and reliable clinic and hospital
5.30peer grouping performance results shall include, at a minimum, the following:
5.31(1) use of the best available evidence, research, and methodologies; and
5.32(2) establishment of an explicit minimum reliability threshold thresholds for both
5.33quality and costs developed in collaboration with the subjects of the data and the users of
5.34the data, at a level not below nationally accepted standards where such standards exist.
5.35In achieving these thresholds, the commissioner shall not aggregate clinics that are not
5.36part of the same system or practice group. The commissioner shall consult with and
6.1solicit feedback from the advisory committee and representatives of physician clinics
6.2and hospitals during the peer grouping data analysis process to obtain input on the
6.3methodological options prior to final analysis and on the design, development, and testing
6.4of provider reports.
6.5EFFECTIVE DATE.This section is effective July 1, 2012, shall be implemented
6.6within available resources, and applies to all information provided or released to the
6.7public or to health care providers, pursuant to Minnesota Statutes, section 64U.04, on or
6.8after that date.

6.9    Sec. 7. Minnesota Statutes 2010, section 62U.04, subdivision 4, is amended to read:
6.10    Subd. 4. Encounter data. (a) Beginning July 1, 2009, and every six months
6.11thereafter, all health plan companies and third-party administrators shall submit encounter
6.12data to a private entity designated by the commissioner of health. The data shall be
6.13submitted in a form and manner specified by the commissioner subject to the following
6.14requirements:
6.15    (1) the data must be de-identified data as described under the Code of Federal
6.16Regulations, title 45, section 164.514;
6.17    (2) the data for each encounter must include an identifier for the patient's health care
6.18home if the patient has selected a health care home; and
6.19    (3) except for the identifier described in clause (2), the data must not include
6.20information that is not included in a health care claim or equivalent encounter information
6.21transaction that is required under section 62J.536.
6.22    (b) The commissioner or the commissioner's designee shall only use the data
6.23submitted under paragraph (a) for the purpose of carrying out its responsibilities in this
6.24section, and must maintain the data that it receives according to the provisions of this
6.25section to carry out its responsibilities in this section, including supplying the data to
6.26providers so they can verify their results of the peer grouping process consistent with the
6.27findings specified under subdivision 3c, paragraph (d), and, if necessary, submit comments
6.28to the commissioner or initiate an appeal.
6.29    (c) Data on providers collected under this subdivision are private data on individuals
6.30or nonpublic data, as defined in section 13.02. Notwithstanding the definition of summary
6.31data in section 13.02, subdivision 19, summary data prepared under this subdivision
6.32may be derived from nonpublic data. The commissioner or the commissioner's designee
6.33shall establish procedures and safeguards to protect the integrity and confidentiality of
6.34any data that it maintains.
7.1    (d) The commissioner or the commissioner's designee shall not publish analyses or
7.2reports that identify, or could potentially identify, individual patients.
7.3EFFECTIVE DATE.This section is effective July 1, 2012, and applies to all
7.4information provided or released to the public or to health care providers pursuant to
7.5Minnesota Statutes, section 620U.04, on or after that date.

7.6    Sec. 8. Minnesota Statutes 2010, section 62U.04, subdivision 5, is amended to read:
7.7    Subd. 5. Pricing data. (a) Beginning July 1, 2009, and annually on January 1
7.8thereafter, all health plan companies and third-party administrators shall submit data
7.9on their contracted prices with health care providers to a private entity designated by
7.10the commissioner of health for the purposes of performing the analyses required under
7.11this subdivision. The data shall be submitted in the form and manner specified by the
7.12commissioner of health.
7.13    (b) The commissioner or the commissioner's designee shall only use the data
7.14submitted under this subdivision for the purpose of carrying out its responsibilities under
7.15this sectionto carry out its responsibilities under this section, including supplying the
7.16data to providers so they can verify their results of the peer grouping process consistent
7.17with the findings specified under subdivision 3c, paragraph (d), and, if necessary, submit
7.18comments to the commissioner or initiate an appeal.
7.19    (c) Data collected under this subdivision are nonpublic data as defined in section
7.2013.02 . Notwithstanding the definition of summary data in section 13.02, subdivision 19,
7.21summary data prepared under this section may be derived from nonpublic data. The
7.22commissioner shall establish procedures and safeguards to protect the integrity and
7.23confidentiality of any data that it maintains.
7.24EFFECTIVE DATE.This section is effective July 1, 2012, and applies to all
7.25information provided or released to the public or to health care providers pursuant to
7.26Minnesota Statutes, section 62U.04, on or after that date.

7.27    Sec. 9. Minnesota Statutes 2011 Supplement, section 62U.04, subdivision 9, is
7.28amended to read:
7.29    Subd. 9. Uses of information. (a) For product renewals or for new products that
7.30are offered, after 12 months have elapsed from publication by the commissioner of the
7.31information in subdivision 3, paragraph (e):
7.32    (1) the commissioner of management and budget shall may use the information and
7.33methods developed under subdivision 3 subdivisions 3 to 3d to strengthen incentives for
8.1members of the state employee group insurance program to use high-quality, low-cost
8.2providers;
8.3    (2) all political subdivisions, as defined in section 13.02, subdivision 11, that offer
8.4health benefits to their employees must may offer plans that differentiate providers on their
8.5cost and quality performance and create incentives for members to use better-performing
8.6providers;
8.7    (3) all health plan companies shall may use the information and methods developed
8.8under subdivision 3 subdivisions 3 to 3d to develop products that encourage consumers to
8.9use high-quality, low-cost providers; and
8.10    (4) health plan companies that issue health plans in the individual market or the
8.11small employer market must may offer at least one health plan that uses the information
8.12developed under subdivision 3 subdivisions 3 to 3d to establish financial incentives for
8.13consumers to choose higher-quality, lower-cost providers through enrollee cost-sharing
8.14or selective provider networks.
8.15    (b) By January 1, 2011, the commissioner of health shall report to the governor
8.16and the legislature on recommendations to encourage health plan companies to promote
8.17widespread adoption of products that encourage the use of high-quality, low-cost providers.
8.18The commissioner's recommendations may include tax incentives, public reporting of
8.19health plan performance, regulatory incentives or changes, and other strategies.
8.20EFFECTIVE DATE.This section is effective July 1, 2012."
8.21Page 10, after line 31, insert:

8.22    "Sec. ... Minnesota Statutes 2010, section 256B.0754, subdivision 2, is amended to
8.23read:
8.24    Subd. 2. Payment reform. By no later than 12 months after the commissioner of
8.25health publishes the information in section 62U.04, subdivision 3, paragraph (e) 62U.04,
8.26subdivision 3c, paragraph (b), the commissioner of human services shall may use the
8.27information and methods developed under section 62U.04 to establish a payment system
8.28that:
8.29    (1) rewards high-quality, low-cost providers;
8.30    (2) creates enrollee incentives to receive care from high-quality, low-cost providers;
8.31and
8.32    (3) fosters collaboration among providers to reduce cost shifting from one part of
8.33the health continuum to another.
8.34EFFECTIVE DATE.This section is effective July 1, 2012."
8.35Renumber the sections in sequence and correct the internal references
9.1Amend the title accordingly