1.1.................... moves to amend H.F. No. 1994 as follows:
1.2Page 86, delete section 16 and insert:

1.3    "Sec. 16. Minnesota Statutes 2011 Supplement, section 256B.69, subdivision 5a,
1.4is amended to read:
1.5    Subd. 5a. Managed care contracts. (a) Managed care contracts under this section
1.6and section 256L.12 shall be entered into or renewed on a calendar year basis beginning
1.7January 1, 1996. Managed care contracts which were in effect on June 30, 1995, and set to
1.8renew on July 1, 1995, shall be renewed for the period July 1, 1995 through December
1.931, 1995 at the same terms that were in effect on June 30, 1995. The commissioner may
1.10issue separate contracts with requirements specific to services to medical assistance
1.11recipients age 65 and older.
1.12    (b) A prepaid health plan providing covered health services for eligible persons
1.13pursuant to chapters 256B and 256L is responsible for complying with the terms of its
1.14contract with the commissioner. Requirements applicable to managed care programs
1.15under chapters 256B and 256L established after the effective date of a contract with the
1.16commissioner take effect when the contract is next issued or renewed.
1.17    (c) Effective for services rendered on or after January 1, 2003, the commissioner
1.18shall withhold five percent of managed care plan payments under this section and
1.19county-based purchasing plan payments under section 256B.692 for the prepaid medical
1.20assistance program pending completion of performance targets. Each performance target
1.21must be quantifiable, objective, measurable, and reasonably attainable, except in the case
1.22of a performance target based on a federal or state law or rule. Criteria for assessment
1.23of each performance target must be outlined in writing prior to the contract effective
1.24date. Clinical or utilization performance targets and their related criteria must consider
1.25evidence-based research and reasonable interventions when available or applicable to the
1.26populations served, and must be developed with input from external clinical experts and
1.27stakeholders, including managed care and county-based purchasing plans and providers.
2.1The managed care plan must demonstrate, to the commissioner's satisfaction, that the data
2.2submitted regarding attainment of the performance target is accurate. The commissioner
2.3shall periodically change the administrative measures used as performance targets in
2.4order to improve plan performance across a broader range of administrative services.
2.5The performance targets must include measurement of plan efforts to contain spending
2.6on health care services and administrative activities. The commissioner may adopt
2.7plan-specific performance targets that take into account factors affecting only one plan,
2.8including characteristics of the plan's enrollee population. The withheld funds must be
2.9returned no sooner than July of the following year if performance targets in the contract
2.10are achieved. The commissioner may exclude special demonstration projects under
2.11subdivision 23.
2.12    (d) Effective for services rendered on or after January 1, 2009, through December
2.1331, 2009, the commissioner shall withhold three percent of managed care plan payments
2.14under this section and county-based purchasing plan payments under section 256B.692
2.15for the prepaid medical assistance program. The withheld funds must be returned no
2.16sooner than July 1 and no later than July 31 of the following year. The commissioner may
2.17exclude special demonstration projects under subdivision 23.
2.18(e) Effective for services provided on or after January 1, 2010, the commissioner
2.19shall require that managed care plans use the assessment and authorization processes,
2.20forms, timelines, standards, documentation, and data reporting requirements, protocols,
2.21billing processes, and policies consistent with medical assistance fee-for-service or the
2.22Department of Human Services contract requirements consistent with medical assistance
2.23fee-for-service or the Department of Human Services contract requirements for all
2.24personal care assistance services under section 256B.0659.
2.25(f) Effective for services rendered on or after January 1, 2010, through December
2.2631, 2010, the commissioner shall withhold 4.5 percent of managed care plan payments
2.27under this section and county-based purchasing plan payments under section 256B.692
2.28for the prepaid medical assistance program. The withheld funds must be returned no
2.29sooner than July 1 and no later than July 31 of the following year. The commissioner may
2.30exclude special demonstration projects under subdivision 23.
2.31(g) Effective for services rendered on or after January 1, 2011, through December
2.3231, 2011, the commissioner shall include as part of the performance targets described
2.33in paragraph (c) a reduction in the health plan's emergency room utilization rate for
2.34state health care program enrollees by a measurable rate of five percent from the plan's
2.35utilization rate for state health care program enrollees for the previous calendar year.
2.36Effective for services rendered on or after January 1, 2012, the commissioner shall include
3.1as part of the performance targets described in paragraph (c) a reduction in the health
3.2plan's emergency department utilization rate for medical assistance and MinnesotaCare
3.3enrollees, as determined by the commissioner. For 2012, the reduction shall be based on
3.4the health plan's utilization in 2009. To earn the return of the withhold each year, the
3.5managed care plan or county-based purchasing plan must achieve a qualifying reduction
3.6of no less than ten percent of the plan's emergency department utilization rate for medical
3.7assistance and MinnesotaCare enrollees, excluding Medicare enrollees in programs
3.8described in subdivisions 23 and 28, compared to the previous calendar measurement
3.9 year until the final performance target is reached. When measuring performance, the
3.10commissioner must consider the difference in health risk in a plan's membership in the
3.11baseline year compared to the measurement year, and work with the managed care or
3.12county-based purchasing plan to account for differences that they agree are significant.
3.13The withheld funds must be returned no sooner than July 1 and no later than July
3.1431 of the following calendar year if the managed care plan or county-based purchasing
3.15plan demonstrates to the satisfaction of the commissioner that a reduction in the utilization
3.16rate was achieved.
3.17The withhold described in this paragraph shall continue for each consecutive
3.18contract period until the plan's emergency room utilization rate for state health care
3.19program enrollees is reduced by 25 percent of the plan's emergency room utilization
3.20rate for medical assistance and MinnesotaCare enrollees for calendar year 2011 2009.
3.21Hospitals shall cooperate with the health plans in meeting this performance target and
3.22shall accept payment withholds that may be returned to the hospitals if the performance
3.23target is achieved.
3.24(h) Effective for services rendered on or after January 1, 2012, the commissioner
3.25shall include as part of the performance targets described in paragraph (c) a reduction
3.26in the plan's hospitalization admission rate for medical assistance and MinnesotaCare
3.27enrollees, as determined by the commissioner. To earn the return of the withhold each
3.28year, the managed care plan or county-based purchasing plan must achieve a qualifying
3.29reduction of no less than five percent of the plan's hospital admission rate for medical
3.30assistance and MinnesotaCare enrollees, excluding Medicare enrollees in programs
3.31described in subdivisions 23 and 28, compared to the previous calendar year until the final
3.32performance target is reached. When measuring performance, the commissioner must
3.33evaluate the difference in health risk in a plan's membership in the baseline year compared
3.34to the measurement year, and work with the managed care or county-based purchasing
3.35plan to account for differences that they agree are significant.
4.1The withheld funds must be returned no sooner than July 1 and no later than July
4.231 of the following calendar year if the managed care plan or county-based purchasing
4.3plan demonstrates to the satisfaction of the commissioner that this reduction in the
4.4hospitalization rate was achieved.
4.5The withhold described in this paragraph shall continue until there is a 25 percent
4.6reduction in the hospital admission rate compared to the hospital admission rates in
4.7calendar year 2011, as determined by the commissioner. The hospital admissions in this
4.8performance target do not include the admissions applicable to the subsequent hospital
4.9admission performance target under paragraph (i). Hospitals shall cooperate with the
4.10plans in meeting this performance target and shall accept payment withholds that may be
4.11returned to the hospitals if the performance target is achieved.
4.12(i) Effective for services rendered on or after January 1, 2012, the commissioner
4.13shall include as part of the performance targets described in paragraph (c) a reduction in
4.14the plan's hospitalization admission rates for subsequent hospitalizations within 30 days
4.15of a previous hospitalization of a patient regardless of the reason, for medical assistance
4.16and MinnesotaCare enrollees, as determined by the commissioner. To earn the return of
4.17the withhold each year, the managed care plan or county-based purchasing plan must
4.18achieve a qualifying reduction of the subsequent hospitalization rate for medical assistance
4.19and MinnesotaCare enrollees, excluding Medicare enrollees in programs described in
4.20subdivisions 23 and 28, of no less than five percent compared to the previous calendar
4.21year until the final performance target is reached.
4.22The withheld funds must be returned no sooner than July 1 and no later than July 31
4.23of the following calendar year if the managed care plan or county-based purchasing plan
4.24demonstrates to the satisfaction of the commissioner that a qualifying reduction in the
4.25subsequent hospitalization rate was achieved.
4.26The withhold described in this paragraph must continue for each consecutive
4.27contract period until the plan's subsequent hospitalization rate for medical assistance
4.28and MinnesotaCare enrollees, excluding Medicare enrollees in programs described in
4.29subdivisions 23 and 28, is reduced by 25 percent of the plan's subsequent hospitalization
4.30rate for calendar year 2011. Hospitals shall cooperate with the plans in meeting this
4.31performance target and shall accept payment withholds that must be returned to the
4.32hospitals if the performance target is achieved.
4.33(j) Effective for services rendered on or after January 1, 2011, through December 31,
4.342011, the commissioner shall withhold 4.5 percent of managed care plan payments under
4.35this section and county-based purchasing plan payments under section 256B.692 for the
4.36prepaid medical assistance program. The withheld funds must be returned no sooner than
5.1July 1 and no later than July 31 of the following year. The commissioner may exclude
5.2special demonstration projects under subdivision 23.
5.3(k) Effective for services rendered on or after January 1, 2012, through December
5.431, 2012, the commissioner shall withhold 4.5 percent of managed care plan payments
5.5under this section and county-based purchasing plan payments under section 256B.692
5.6for the prepaid medical assistance program. The withheld funds must be returned no
5.7sooner than July 1 and no later than July 31 of the following year. The commissioner may
5.8exclude special demonstration projects under subdivision 23.
5.9(l) Effective for services rendered on or after January 1, 2013, through December 31,
5.102013, the commissioner shall withhold 4.5 percent of managed care plan payments under
5.11this section and county-based purchasing plan payments under section 256B.692 for the
5.12prepaid medical assistance program. The withheld funds must be returned no sooner than
5.13July 1 and no later than July 31 of the following year. The commissioner may exclude
5.14special demonstration projects under subdivision 23.
5.15(m) Effective for services rendered on or after January 1, 2014, the commissioner
5.16shall withhold three percent of managed care plan payments under this section and
5.17county-based purchasing plan payments under section 256B.692 for the prepaid medical
5.18assistance program. The withheld funds must be returned no sooner than July 1 and
5.19no later than July 31 of the following year. The commissioner may exclude special
5.20demonstration projects under subdivision 23.
5.21(n) A managed care plan or a county-based purchasing plan under section 256B.692
5.22may include as admitted assets under section 62D.044 any amount withheld under this
5.23section that is reasonably expected to be returned.
5.24(o) Contracts between the commissioner and a prepaid health plan are exempt from
5.25the set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph
5.26(a), and 7.
5.27(p) The return of the withhold under paragraphs (d), (f), and (j) to (m) is not subject
5.28to the requirements of paragraph (c)."
5.29Page 92, after line 30, insert:

5.30    "Sec. 19. Minnesota Statutes 2011 Supplement, section 256L.12, subdivision 9,
5.31is amended to read:
5.32    Subd. 9. Rate setting; performance withholds. (a) Rates will be prospective,
5.33per capita, where possible. The commissioner may allow health plans to arrange for
5.34inpatient hospital services on a risk or nonrisk basis. The commissioner shall consult with
5.35an independent actuary to determine appropriate rates.
6.1    (b) For services rendered on or after January 1, 2004, the commissioner shall
6.2withhold five percent of managed care plan payments and county-based purchasing
6.3plan payments under this section pending completion of performance targets. Each
6.4performance target must be quantifiable, objective, measurable, and reasonably attainable,
6.5except in the case of a performance target based on a federal or state law or rule. Criteria
6.6for assessment of each performance target must be outlined in writing prior to the contract
6.7effective date. Clinical or utilization performance targets and their related criteria must
6.8consider evidence-based research and reasonable interventions, when available or
6.9applicable to the populations served, and must be developed with input from external
6.10clinical experts and stakeholders, including managed care and county-based purchasing
6.11plans and providers. The managed care plan must demonstrate, to the commissioner's
6.12satisfaction, that the data submitted regarding attainment of the performance target is
6.13accurate. The commissioner shall periodically change the administrative measures used
6.14as performance targets in order to improve plan performance across a broader range of
6.15administrative services. The performance targets must include measurement of plan
6.16efforts to contain spending on health care services and administrative activities. The
6.17commissioner may adopt plan-specific performance targets that take into account factors
6.18affecting only one plan, such as characteristics of the plan's enrollee population. The
6.19withheld funds must be returned no sooner than July 1 and no later than July 31 of the
6.20following calendar year if performance targets in the contract are achieved.
6.21(c) For services rendered on or after January 1, 2011, the commissioner shall
6.22withhold an additional three percent of managed care plan or county-based purchasing
6.23plan payments under this section. The withheld funds must be returned no sooner than
6.24July 1 and no later than July 31 of the following calendar year. The return of the withhold
6.25under this paragraph is not subject to the requirements of paragraph (b).
6.26(d) Effective for services rendered on or after January 1, 2011, through December
6.2731, 2011, the commissioner shall include as part of the performance targets described in
6.28paragraph (b) a reduction in the plan's emergency room utilization rate for state health
6.29care program enrollees by a measurable rate of five percent from the plan's utilization
6.30rate for the previous calendar year. Effective for services rendered on or after January
6.311, 2012, the commissioner shall include as part of the performance targets described in
6.32paragraph (b) a reduction in the health plan's emergency department utilization rate for
6.33medical assistance and MinnesotaCare enrollees, as determined by the commissioner. For
6.342012, the reduction shall be based on the health plan's utilization in 2009. To earn the
6.35return of the withhold each year, the managed care plan or county-based purchasing plan
6.36must achieve a qualifying reduction of no less than ten percent of the plan's utilization
7.1rate for medical assistance and MinnesotaCare enrollees, excluding Medicare enrollees
7.2in programs described in section 256B.69, subdivisions 23 and 28, compared to the
7.3previous calendar measurement year, until the final performance target is reached. When
7.4measuring performance, the commissioner must evaluate the difference in health risk in
7.5a plan's membership in the baseline year compared to the measurement year, and work
7.6with the managed care or county-based purchasing plan to account for differences that
7.7they agree are significant.
7.8The withheld funds must be returned no sooner than July 1 and no later than July
7.931 of the following calendar year if the managed care plan or county-based purchasing
7.10plan demonstrates to the satisfaction of the commissioner that a reduction in the utilization
7.11rate was achieved.
7.12The withhold described in this paragraph shall continue for each consecutive contract
7.13period until the plan's emergency room utilization rate for state health care program
7.14enrollees is reduced by 25 percent of the plan's emergency room utilization rate for medical
7.15assistance and MinnesotaCare enrollees for calendar year 2011. Hospitals shall cooperate
7.16with the health plans in meeting this performance target and shall accept payment
7.17withholds that may be returned to the hospitals if the performance target is achieved.
7.18(e) Effective for services rendered on or after January 1, 2012, the commissioner
7.19shall include as part of the performance targets described in paragraph (b) a reduction
7.20in the plan's hospitalization admission rate for medical assistance and MinnesotaCare
7.21enrollees, as determined by the commissioner. To earn the return of the withhold each
7.22year, the managed care plan or county-based purchasing plan must achieve a qualifying
7.23reduction of no less than five percent of the plan's hospital admission rate for medical
7.24assistance and MinnesotaCare enrollees, excluding Medicare enrollees in programs
7.25described in section 256B.69, subdivisions 23 and 28, compared to the previous calendar
7.26year, until the final performance target is reached. When measuring performance, the
7.27commissioner must evaluate the difference in health risk in a plan's membership in the
7.28baseline year compared to the measurement year, and work with the managed care or
7.29county-based purchasing plan to account for differences that they agree are significant.
7.30The withheld funds must be returned no sooner than July 1 and no later than July
7.3131 of the following calendar year if the managed care plan or county-based purchasing
7.32plan demonstrates to the satisfaction of the commissioner that this reduction in the
7.33hospitalization rate was achieved.
7.34The withhold described in this paragraph shall continue until there is a 25 percent
7.35reduction in the hospitals admission rate compared to the hospital admission rate for
7.36calendar year 2011 as determined by the commissioner. Hospitals shall cooperate with the
8.1plans in meeting this performance target and shall accept payment withholds that may be
8.2returned to the hospitals if the performance target is achieved. The hospital admissions
8.3in this performance target do not include the admissions applicable to the subsequent
8.4hospital admission performance target under paragraph (f).
8.5(f) Effective for services provided on or after January 1, 2012, the commissioner
8.6shall include as part of the performance targets described in paragraph (b) a reduction
8.7in the plan's hospitalization rate for a subsequent hospitalization within 30 days of a
8.8previous hospitalization of a patient regardless of the reason, for medical assistance and
8.9MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the
8.10withhold each year, the managed care plan or county-based purchasing plan must achieve
8.11a qualifying reduction of the subsequent hospital admissions rate for medical assistance
8.12and MinnesotaCare enrollees, excluding Medicare enrollees described in section 256B.69,
8.13subdivisions 23 and 28, of no less than five percent compared to the previous calendar
8.14year until the final performance target is reached.
8.15The withheld funds must be returned no sooner than July 1 and no later than July 31
8.16of the following calendar year if the managed care plan or county-based purchasing plan
8.17demonstrates to the satisfaction of the commissioner that a reduction in the subsequent
8.18hospitalization rate was achieved.
8.19The withhold described in this paragraph must continue for each consecutive
8.20contract period until the plan's subsequent hospitalization rate for medical assistance and
8.21MinnesotaCare enrollees is reduced by 25 percent of the plan's subsequent hospitalization
8.22rate for calendar year 2011. Hospitals shall cooperate with the plans in meeting this
8.23performance target and shall accept payment withholds that must be returned to the
8.24hospitals if the performance target is achieved.
8.25(g) A managed care plan or a county-based purchasing plan under section 256B.692
8.26may include as admitted assets under section 62D.044 any amount withheld under this
8.27section that is reasonably expected to be returned."
8.28Renumber the sections in sequence and correct the internal references
8.29Amend the title accordingly