Minnesota has an active All-Payer Claims Database (APCD), which recently expanded to study cost, quality, and utilization. The state also mandates that the Minnesota Hospital Association provide a hospital specific performance and charge database for the 50 most common inpatient diagnosis-related groups. Minnesota also aims to contain healthcare costs through bans on most favored nation clauses and anticompetitive practices in provider contracts.

In the 2017 legislative session, Minnesota passed the Health Insurance Premium Relief Bill. The bill calls for $310 million in taxpayer money to be spent throughout 2017 to give 25 percent discounts in constituent health insurance premiums. The relief is available only to people who buy insurance on the individual market. Among people on the individual market, the 25 percent state-funded discount applies only to people who don’t get federal tax subsidies. Those federal subsidies are available to people earning up to 400 percent of the poverty limit — $47,520 for an individual, or $97,200 for a family of four.

To help constituents deal with skyrocketing insurance costs, the Minnesota Legislature passed a bill in 2017 that allocated $271 million to form a publicly funded reinsurance pool that would help health insurance companies pay the most expensive medical claims, thereby lowering overall insurance premiums. In Minnesota’s reinsurance program, health insurers are eligible for reimbursements from the state for claims between $50,000 and $250,000. The insurers are responsible for amounts over $250,000. The reinsurance pool has performed exceptionally well and has decreased premiums by 15% in the first year.

The Minnesota Legislature was active throughout the 2018 legislative term, enacting two laws that add price transparency (S.F. 3480) and drug choices (H.F. 3196) to the health care system. SF 3480 requires providers to give consumers a “good faith estimate” of the cost of common medical procedures within 10 days of request, while HF 3196 requires health plans to allow providers to avoid step therapy protocols, which requires a physician to try a cheaper alternative before using a more expensive remedy. The two bills were approved nearly unanimously in both houses.  The laws demonstrate the state’s efforts to improve its health care system, although already considered to be one of the best in the nation.



Legislative Calendar

Minnesota’s most recent legislative session ran from 2/2/2018 – 5/21/2018.


Recent Legislative Developments

Healthcare Transparency

2018 S.F. 3480 DISCLOSURE OF PAYMENTS FOR HEALTH CARE SERVICES: Provider must provide the consumer with information regarding other types of fees or charges that the consumer may be required to pay in conjunction with a visit to the provider, including but not limited to any applicable facility fees. Passed –Signed by Governor on 05/19/18.

Stat. § 62J.81

S.F. 2669/H.F. 3016 HEALTH PLAN COMPANY COMPNY CONTRACTUALLY PREVENTING PHARMACISTS FROM INFORMING PATIENTS OF PRICE DIFFERENTIALS PROHIBITION: No contracting agreement between an employer-sponsored health plan or health plan company, or its contracted pharmacy benefit manager, and a resident or nonresident pharmacy, may prohibit a pharmacy from disclosing to patients information a pharmacy is required or given the option to provide under subdivision; or a pharmacist from informing a patient when the amount the patient is required to pay under the patient’s health plan for a particular drug is greater than the amount the patient would be required to pay for the same drug if purchased out-of-pocket at the pharmacy’s usual and customary price. Inactive/Dead.
S.F. 2671 QUALIFYING PRESCRIPTION DRUG COST DISCLOSURE AND REPORT REQUIREMENTS: Each manufacturer of a prescription drug, made available in Minnesota, that has a wholesale acquisition cost of $10,000 or more
annually or per course of treatment, shall file a report with the commissioner as provided in this subdivision on the costs for each qualifying drug
H.F. 3538 QUALIFYING PRESCRIPTION DRUG COST DISCLOSURES: Each manufacturer of a prescription drug, made available in Minnesota, that has a wholesale acquisition cost of $10,000 or more annually or per course of treatment, shall file a report with the commissioner as provided in this subdivision on the costs for each qualifying drug. Inactive/Dead.
S.F. 593 PRESCRIPTION DRUG COVERAGE PRIOR AUTHORIZATION REQUIREMENTS MODIFICATION: Relates to health care coverage; modifies prior authorization requirements for prescription drug coverage; requires prescription drug benefit transparency and disclosure; amends Minnesota Statutes 2016, §§ 62M.07; 256B.69 subdivision 6; proposed coding for new law in Minnesota Statutes, chapter 62Q Inactive/Dead.
H.F 3396/ S.F. 3033 HEALTH CARE PRICE TRANSPARENCY: Each health care provider shall maintain a list of the services that correspond with the provider’s 25 most frequently billed current procedural terminology (CPT) codes, including the provider’s five most commonly billed evaluation and management codes, that are billed for over $25, and of the ten most frequently billed CPT codes for preventive services. he provider shall disclose the provider’s charge, the reimbursement rate received for the service from the provider’s highest volume health plan payer in the commercial insurance market. Inactive/Dead.
2017 S.F. 593 PRESCRIPTION DRUG COVERAGE PRIOR AUTHORIZATION AND DRUG BENEFIT TRANSPARENCY: A bill for an act relating to health care coverage; modifying prior authorization requirements for prescription drug coverage; requiring prescription drug benefit transparency and disclosure. Inactive –Died in Committee.
2016 S.F. 934/H.F. 1060 PRESCRIPTION DRUG TRANSPARENCY AND MANAGEMENT: would require health plan companies that provide drug benefit coverage and use a formulary to make its formulary and related benefit information available by electronic means, and upon request, in writing at least 30 days prior to annual renewal dates.

A health plan company would be prohibited from removing drugs from its formulary or moving drugs to a benefit category that increases an enrollee’s cost during the enrollee’s contract year. Some exceptions apply (e.g., FDA deems a drug unsafe).



Healthcare Cost

2018 H.F. 3196 STEP THERAPY PROTOCOL AND OVERRIDE FOR PRESCRIPTION DRUG OVERAGE ESTABLISHED: When coverage of a prescription drug for the treatment of any medical condition is restricted for use by the plan sponsor through the use of a step therapy protocol, the prescribing health care provider shall have access to a clear, readily accessible, and convenient process to request a step therapy override. Passed –Signed by Governor 5/19/18.  Stat. § 62Q.184
S.F 2841 DRUG MANUFACTURER OR WHOLESALE DRUG DISTRIBUTOR PRICE GOUGING PROHIBITION: Board of pharmacy, commissioner of human services and health plan companies notification of prescription drug increases to attorney general authorization; attorney general access to drug pricing information and authorization to take action against drug manufacturers and wholesalers related to certain price increases establishment Inactive/Dead.
H.F. 3131 DRUG MANUFACTURER OR WHOLESALE DISTRIBUTOR PROHIBITED FROM PRICE GOUGING:  A manufacturer or wholesale drug distributor may not engage in price gouging in the sale of an essential off-patent or generic drug. It is not a violation of this subdivision for a wholesale drug distributor to increase the price of an essential off-patent or generic drug if the price increase is directly attributable to additional costs for the drug imposed on the wholesale drug distributor by the manufacturer of the drug. Inactive/Dead.
H.F. 3535/ S.F 2674 CO-PAYMENTS FOR PRESCRIPTION DRUGS LIMITED: A health plan that provides prescription drug coverage shall not require an enrollee to pay a co-payment for a prescription drug at the point of sale that is greater than the lesser of: (1) the allowable claim amount the pharmacy dispensing the drug will receive from the health plan company or pharmacy benefit manager; or (2) the amount an individual would pay at the pharmacy for the drug if the individual purchased the drug without using health coverage or any other source of drug coverage benefits or applicable discounts. Inactive/Dead.
H.F 3012/ S.F 2596 PRESCRIPTION MEDICATION PAYMENT MODIFIED:  A health plan company or pharmacy benefits
manager shall not require an individual to make a payment at the point of sale for a covered prescription medication in an amount greater than the allowable cost to consumers. “allowable cost to consumers” means the lowest of (1) the applicable co-payment for the prescription medication, (2) the allowable claim amount for the prescription medication, or (3) the amount an individual would pay for the prescription medication if the individual purchased the prescription medication without using a health plan benefit.
S.F. 3667/H.F. 4069 DEDUCTIBLES FOR SERVICES PROVIDED BY OUT-OF-NETWOR PROVIDERS: If a health plan imposes an annual deductible that the enrollee is responsible for meeting, the health plan company must count any payment made by the enrollee to a provider for a health care service covered under the enrollee’s health plan toward the enrollee’s applicable deductible amount, regardless of whether the provider is in-network or out-of-network. Inactive/Dead.
S.F. 3454 PRESCRIPTION DRUG PURCHASING PROGRAM: The commissioner of administration shall administer and oversee a Minnesota prescription drug purchasing program. The program shall: (1) make prescription drugs available at the lowest possible cost to its participants; 2) promote health through the purchase and provision of discount prescription drugs and coordination of comprehensive prescription benefit services for program participants; and; (3) maintain a list of prescription drugs recommended as the most effective prescription
drugs available at the best possible prices.
S.F. 2801 PRESCRIPTION DRUG COST REVIEW AND RATE SETTING ACT: creates the prescription drug cost review commission and establishes rate-setting requirements. Inactive/Dead.
2017 S.F. 1/H.F. 1 HEALTH INSURANCE PREMIUM RELIEF: Provides 25 percent discounts to Minnesotans who buy their health insurance on the individual marketplace and earn too much money to qualify for existing federal subsidies.

The package includes $15 million to help cover people with serious medical conditions who lose their insurance. In addition, it will help some Minnesotans undergoing treatment for serious conditions keep their doctors even if their network is changing.

Insurance companies will automatically provide the rebates via payments by the state. The passage of the premium-relief bill comes just days before the Jan. 31 enrollment deadline for the state’s MNsure market.

Passed – Signed by Governor on 1/26/17.
S.F. 1623/H.F. 2064 HEALTH INSURANCE PREMIUM PAYMENT INCOME TAX SUBTRACTION AUTHORIZATION: provides a subtraction for health insurance premiums. The proper subtraction is calculated by computing the percent of the amount paid during the taxable year for insurance as defined in section 213(d)(1)(D) of the Internal Revenue Code. Inactive –Died in Committee.


Healthcare Markets

2018 H.F. 3694/S.F 3034 ANY WILLING PROVIDER HEALTH PLAN OPTION PROTECTING CHOICE FOR PATIENTS: A health carrier must offer at least one health plan in individual and small group markets if the health carrier offers products in that market that maintain a provider network that is open to all licensed health care providers in the state who agree to accept the terms and conditions that are offered by the health carrier, so long as the same terms and conditions are offered to all network providers. Inactive/Dead.
H.F. 488/ S.F. 200 MINNESOTA HEALTH PLAN: The Minnesota Health Plan shall provide all medically necessary health care services for all Minnesota residents in a manner that meets the requirements in section 62W.01. Inactive/Dead.
H.F. 4311 OUT OF NETWORK HEALTH CARE PROVIDERS PROHIBITED FROM BALANCE BILLING FOR EMERGENCY SERVICES: If emergency services are provided by a nonparticipating provider, with or without prior authorization, the health plan company shall not impose coverage restrictions or limitations that are more restrictive than apply to emergency services received from a participating provider. Cost-sharing requirements that apply to emergency services received out-of-network must be the same as the cost-sharing requirements that apply to services received in-network. Inactive/Dead.

Key Statutes

We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.


Healthcare Transparency

  • Stat. § 62J.81 provides that upon request, a healthcare provider must give a consumer a good faith estimate of the allowable payment the provider has agreed to accept from the consumer’s health plan company for the service specified by the consumer. If the consumer does not have health insurance, the provider must give a good faith estimate of the average allowable reimbursement the provider accepts as payment from private third-party payers for the service specified and the estimated amount the non-covered consumer will be expected to pay. Furthermore, a health insurance company must provide an enrollee with a good faith estimate of total out-of-pocket costs for a specified health care service.


  • Stat. § 62J.82 directs the Minnesota Hospital Association to develop a an web-based system, available to the public free of charge, containing hospital-specific performance on certain procedures and charge information “including, but not limited to, number of discharges, average length of stay, average charge, average charge per day, and median charge, for each of the 50 most common inpatient diagnosis-related groups and the 25 most common outpatient surgical procedures as specified by the Minnesota Hospital Association.” The website is located here.


  • Stat. § 62J.823 obligates hospitals to provide to a patient, free of charge, a written estimate of the cost of a specific service of stay upon request including the method used to calculate the estimate, the specific diagnostic-related group or procedure code, and a statement indicating that the estimate may not reflect the actual billed charges.


  • Stat. § 62U.04: Authorizes the state’s All Payer Claims Database (implemented in Minn. R. 4653.0100 through .0600). An APCD is a database for aggregating health care claims data from payer sources in order to compare costs among physicians and health care systems;
    • 1: Directs the Commissioner of Health to “develop a plan to create transparent prices, encourage greater provider innovation and collaboration across points on the health continuum in cost-effective, high-quality care delivery, reduce the administrative burden on providers and health plans associated with submitting and processing claims, and provide comparative information to consumers on variation in health care cost and quality across providers.”
    • 2 to 3d, Subd. 10: Directs the Commissioner of Health to develop a uniform method of calculating provider’s relative cost of care, adjusted for quality. The Commissioner must establish provider peer groups and disseminate information to providers on their total cost of care, total resource use, total quality of care, and the total care results of the groupings. Data that cannot be linked to the identity of an individual provider or hospital may be disseminated to the public. Data collection under the foregoing subdivisions has been suspended by the legislature indefinitely.
    • 4: All health plan companies must submit de-identified encounter data to the Commissioner of health.
    • 5: All health plan companies must submit data on their contracted prices with health care providers for the purpose of performing analyses. Such data is treated as nonpublic.
    • 7: The Commissioner must convene a workgroup to develop strategies for engaging consumers on understanding health care cost and quality.
    • 11: Respecting the state’s APCD, applies data collected by subdivisions 4 and 5 above for studies to evaluate the efficacy of home health care programs; hospital readmissions trends; variations in costs, quality, and utilization based on geography; and to evaluate the state innovation model testing.
    • 12: As of 2014, creates a workgroup within the Department of Health to develop a framework for the expanded use of the state’s APCD. A report with findings from the workgroup is expected to be issued to the legislature by Feb. 2015.


  • Stat. § 62J.72 a health insurer must provide enrollees with a description of the general nature of the reimbursement methodologies used by to pay providers.


  • Stat. § 62Q.645 for health plan companies with annual premiums in Minnesota exceeding $50,000,000, the Commissioner of Health is authorized to compile entity specific administrative efficiency reports of the health plan company and publish such information on the web.


  • Stat. § 62Q.746 requires that health plan companies divulge certain information to the commissioner of health upon request, including information respecting utilization of network and non-network providers by enrollees of the health plan company.


  • Stat. § 144.698 obligates hospitals to submit an annual financial report with the commissioner of health at the close of the fiscal year, including a detailed statement of income and expenses.


  • Stat. § 144.699 directs the Commissioner of Health to encourage hospitals and providers “to publish prices for procedures and services that are representative of the diagnoses and conditions for which citizens of this state seek treatment” in order to foster price competition among hospitals and providers.


  • Stat. § 144.701 mandates that hospitals provider to the Commissioner of Health a current rate schedule. Further, the Commissioner must “ensure that the total costs, total revenues, overall utilization, and total services of each hospital and each outpatient surgical center are reported to the public in a form understandable to consumers.”


 Healthcare Contracting

  • Stat. § 62J.71 renders null and void any agreement or directive that prohibits a health care provider from disclosing to an enrollee information with respect to their health status, care, treatment options, or that prohibits a health care provider from informing an enrollee about the nature of the reimbursement methodology used by the enrollee’s health insurer. Furthermore, a health insurer may not retaliate against a provider for criticizing the enrollee’s health insurer or insurance plan.


  • Stat. § 62J.73 prohibits a provider from entering into a contract with a health plan or group of providers on terms that require the provider to not contract with another health plan company. Also, “[n]o health plan company, provider, or group of providers may withhold from its competitors health care services, which are essential for competition between health care providers within the meaning of the essential facilities doctrine as interpreted by the federal courts.”


  • Stat. §62A.64 prohibits the use of most favored nations clauses between a health care provider or facility and a certified health plan. A most favored nations clause is an agreement between a payer (such as an insurance company) and a provider that typically requires a provider to give the payer the lowest rate that it gave to any other comparable payer, which can be anticompetitive by encouraging oligopolistic pricing by large payers and increasing barriers for new entrants.


Healthcare Costs

  • § 62Q.184 establishes a step therapy protocol and override for prescription drug coverage. Doctor may only override if: (1) the health plan’s step-therapy regime would hurt the patient; (2) the patient has followed the plan’s protocol but it failed; or (3) an alternative drug is prescribed and helping the patient, but she changes insurance plans.


  • Stat. § 151.01; 151.21 requires a pharmacist to substitute a biological similar drug if a less expensive one is available as long as the patient has not expressly indicated as otherwise.


Healthcare Markets

  • Stat. § 256B.0755 directs the Commissioner of Health to authorize a demonstration project to test alternative health care delivery systems, including an accountable care organization, to deliver healthcare services to a specified population for an agreed-upon total cost of care.




  • Stat. § 62U.05 authorizes providers to voluntarily use “baskets of care” to offer package pricing for one of seven defined sets of procedures: asthma (children); diabetes; low back pain; obstetric care; preventative care (adults); preventive care (children); and total knee replacement.


  • Stat. § 144.551 in lieu of a certificate of need program, imposes a moratorium on the expansion or relocation of an existing hospital and on the construction of a new hospital facility, subject to certain line exemptions for facilities in specified areas of need.


  • Stat. § 144.552 requires that a hospital seeking to increase the number of beds or an organization seeking to obtain a hospital license must submit a plan to the commissioner and obtain a public interest review in order to obtain an exemption to the new hospital moratorium under § 144.551.


2018-2019 BUDGET

The Minnesota state budget operates on a biennium cycle, covering two fiscal years. Minnesota’s fiscal year begins on July 1 and ends on June 30 of the following year. Minnesota enacted its 2018-2019 Budget in the first special legislative 2017 session. To view Minnesota’s Department of Health and Human Services 2018-2019 budget, click here.



  • On June 29, 2015 the Federal Trade Commission (FTC) responded to a request from two Minnesota state legislators to analyze the competitive impact of recent amendments to the Minnesota Government Data Practices Act (MGDPA). The amendments may require health plans contracting with the state to make information normally deemed competitively sensitive available to the public. The FTC expressed concern that this change would harm consumers by increasing the potential for collusion and decreasing the use of selective contracting. Read the FTC’s Press Release and Blog Post.



Minnesota State Legislature

Minnesota Office of the Attorney General

Minnesota All Payer Claims Database

Minnesota Department of Commerce