MN SF2986

Administrative costs for managed care and county-based purchasing plans must not exceed 105 percent of the previous year's actual administrative spending as a percentage of total revenue, with penalties for overage waivable for unexpected enrollment shifts or new program requirements.

Prepaid health plans must maintain a minimum loss ratio of 93.5 percent, calculated as direct patient care expenses divided by total commissioner payments minus taxes and mandatory government assessments.

Financial reporting for health plans, including administrative expenses, must comply with generally accepted accounting principles, with the commissioner authorized to seek federal waivers if necessary.

Providers and enrollees may audit managed care plans' records related to loss ratio calculations within 24 months of the calendar year, after providing 14 days' written notice and at their own expense.

Plans that fail to meet the 93.5 percent loss ratio must repay the commissioner and reimburse providers for audit costs if the shortfall is two percentage points or more; plans cannot require providers to waive audit rights or retaliate against providers exercising them.