M.S.A. § 62U.04

Payment reform; health care costs; quality outcomes

The Commissioner of Health must develop plans to promote greater price transparency for consumers.   The Commissioner of Health must develop a uniform method of calculating providers’ relative cost of care, by using resource use and unit prices, and relative quality of care.  The Commissioner must address the following issues:

• Provider attribution of cost and quality;
• Adjustment for outlier cases;
• Risk adjustment to reflect differences in demographics and health status among patient populations;
• Specific types of providers to be included in the calculations;
• Specific services that should be included in the calculations;
• Adjustment in variation for payment rates;
• Appropriate provider level of analysis;
• Payer mix adjustments;
• Other factors needed to enhance reliability and comparability of the data.

The Commissioner must develop a peer grouping system for providers that incorporates provider risk adjusted cost of care and quality of care.  The Commissioner must also establish an advisory committee made up various health care stakeholders.  The Commissioner must consult with the advisory committee in developing and administering the peer grouping system.  The Commissioner must disseminate information from the peer grouping system to providers related to their total cost of care, total resource use, total quality of care, and total care results.   Any analyses or reports that identify the provider based on this data may only be published if the provider has reviewed the information, are able to submit comments, and can initiate an appeal.  The Commissioner must disseminate information to providers on their condition-specific cost of care, condition-specific resource use, condition-specific quality of care, and the condition-specific results of the grouping developed in comparison to a peer group.  Any analyses or reports that identify the provider based on this data may only be published if the provider has reviewed the information, are able to submit comments, and can initiate an appeal.  The Commissioner must develop an appeals process for providers to use regarding the accuracy of the data used in reports and analyses.  The Commissioner may publicly release summary data related to the peer grouping system as long as it does not individually identify the hospital, clinic or other providers.  The Commissioner may only publicly release summary data with provider identifying information if:

• The results and data have been submitted to the providers at least 120 days before publication;
• The Commissioner has provided the providers ample opportunity to review abnd verify the data consistent with the requirements above;
• The results meet the standards for reliability, validity, representativeness, and other recommendations of the advisory committee;
• Public reports put out by the state notify consumers of how to interpret and use the information, including limitations of the results.

The Commissioner must publicly report the providers' total cost, total resource use, total quality, and the results of the total care portion of the peer grouping process and information on providers' condition-specific cost, condition-specific resource use, and condition-specific quality, and the results of the condition-specific portion of the peer grouping process annually. 

Before information is publicly disseminated, the Commissioner with the advisory committee must ensure the scientific and statistical reliability and validity of the results. 

All health plans and third party administrators must submit encounter data to a private entity designated by the Commissioner of Health every six months.  The data must be:

• De-identified;
• Include an identifier for the patient’s health care home, if selected;
• Data must only include information included in a claim or other equivalent transaction information.

Only data that has been specified under this law may be used.

Data collected on providers is private, nonpublic information.  Summary data may be derived from nonpublic data.  The Commissioner must develop safeguards to protect the confidentiality of its data.  The Commissioner must therefore not publish reports that identify or could identify patients. 

All health plans and third party administrators must submit data on their contracted prices with health care providers to a private entity designated by the Commissioner annually.  This data can only be used by the Commissioner to fulfill its duties under this section.  This data is nonpublic information.  Summary data may be derived from nonpublic data.  The Commissioner must develop safeguards to protect the confidentiality of its data. 

The Commissioner must initiate a work group to develop a consumer engagement strategy. 

This law does not prohibit group purchasers and health care providers from entering into arrangements to establish package prices for a set of services or separate services in order to allow providers the flexibility to innovate on ways to reduce costs and improve health care quality.  The Commissioner may also convene work groups on strategies for improving health care while reducing costs. 

For product renewals or new product offerings:

• The Commissioner of management and budget may use the information to incentivize state employees to use high quality low cost providers;
• Political subdivisions that provide insurance coverage can use this information to differentiate providers based on quality and cost and to incentivize the use of high quality low cost providers;
• Health plans may use this information to encourage consumers to use high-quality, low-cost providers;
• Health plans in the individual or small employer market may use the information to establish financial incentives for consumers to choose higher-quality, lower-cost providers through enrollee cost-sharing or selective provider networks.