MN SF3094

Health maintenance organizations must directly allocate administrative expenses to specific lines of business or products when available, with remaining expenses allocated using methods recommended by the Advisory Group on Administrative Expenses, using a reporting template provided by the commissioner of health; effective January 1, 2012.

Health maintenance organizations must allocate investment income based on cumulative net income over time by business line or product and submit this information using the commissioner's reporting template.

The Advisory Group on Administrative Expenses is established to develop standards and procedures for examining reasonableness of administrative expenses by individual publicly funded programs, consisting of nine members including three state commissioners and representatives from HMOs, county-based purchasers, hospitals, physicians, and other health care providers.

The advisory group must report recommendations, including any proposed legislation, to the commissioner of health and relevant legislative committees by February 15, 2012; the group expires after submitting the report or June 30, 2012, whichever is sooner.

$100,000 is appropriated from the general fund to the commissioner of health in fiscal year 2011 for the advisory group.