Minnesota

SUMMARY

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.

This year, Minnesota passed its Health Insurance Premium Relief Bill in January. The new 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.

 

LEGISLATION/REGULATION

Legislative Calendar

Minnesota’s legislative session has ended.

 

Recent Legislative Developments

Healthcare Transparency

 

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).

Inactive —Died.

 

Healthcare Cost

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
2017-2018 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. Active —Laid over for next session.

 

Healthcare Markets

  • None identified.

 

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 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.

 

LITIGATION/ENFORCEMENT

  • 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.

 

KEY RESOURCES

Minnesota State Legislature

Minnesota Office of the Attorney General

Minnesota All Payer Claims Database

Minnesota Department of Commerce