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Minnesota Legislature

Oversight for rural cooperatives (new law)

Published (5/29/2009)
By Sue Hegarty
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The Minnesota Rural Health Cooperative was authorized in 1994 to provide better health care access to rural communities, by allowing multiple service providers to contract jointly with healthcare insurers. A new law gives the Department of Health more oversight responsibilities for the 40 hospitals and clinics and 10 specialty clinics that comprise that cooperative and others like them.

For a $2,000 fee, health care providers may submit an application to the department to form a cooperative. The department will have 60 days to review, approve or deny the application. The fee to modify, renew or extend a cooperative agreement is $500.

When considering whether to approve an application, the health commissioner must consider the potential for antitrust violations and may revoke the cooperative privilege if the contract parties do not comply with state regulations.

An active investigation by the Federal Trade Commission is ongoing for allegations that the cooperative engaged in collective negotiations of physician, hospital and pharmacy prices, according to the FTC.

The law, which takes effect Aug. 1, 2009, keeps application data collected on individuals private. Rep. Larry Hosch (DFL-St. Joseph) and Sen. Gary Kubly (DFL-Granite Falls) are the law’s sponsors.

HF120/SF203*/CH97

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