Subd. 1. Projects allowed.

The commissioner of health may establish demonstration projects to allow health maintenance organizations to extend coverage to:

1. (a) Individuals enrolled in Part A or Part B, or both, of the Medicare program, Title XVIII of the Social Security Act, United States Code, title 42, section 1395 et seq.;
2. (b) Groups of fewer than 50 employees where each group is covered by a single group health policy;
3. (c) Individuals who are not eligible for enrollment in any group health maintenance contracts; and

4. (d) Low income population groups.

   For purposes of this section, the commissioner of health may waive compliance with minimum benefits pursuant to sections 62A.151 and 62D.02, subdivision 7, full financial risk pursuant to section 62D.04, subdivision 1, clause (f), open enrollment pursuant to section 62D.10, and to applicable rules if there is reasonable evidence that the rules prohibit the operation of the demonstration project. The commissioner shall provide for public comment before any statute or rule is waived.

Subd. 2. Minimum health benefits required.

A demonstration project must provide health benefits equal to or exceeding the level of benefits provided in Title XVIII of the Social Security Act and an out of hospital prescription drug benefit. The out of hospital prescription drug benefit may be waived by the commissioner if the health maintenance organization presents evidence satisfactory to the commissioner that the inclusion of the benefit would restrict the operation of the demonstration project.

Subd. 3. Application.

A health maintenance organization electing to participate in a demonstration project shall apply to the commissioner for approval on a form developed by the commissioner. The application shall include at least the following:

1. (a) A statement identifying the population that the project is designed to serve;
2. (b) A description of the proposed project including a statement projecting a schedule of costs and benefits for the enrollee;
3. (c) Reference to the sections of Minnesota Statutes and department of health rules for which waiver is requested;
4. (d) Evidence that application of the requirements of applicable Minnesota Statutes and department of health rules would, unless waived, prohibit the operation of the demonstration project;
5. (e) Evidence that another arrangement is available for assumption of full financial risk if full financial risk is waived under subdivision 1;
6. (f) An estimate of the number of years needed to adequately demonstrate the project's effects; and
7. (g) Other information the commissioner may reasonably require.

Subd. 4. Consideration of application.

The commissioner shall approve, deny, or refer back to the health maintenance organization for modification, the application for a demonstration project within 60 days of receipt from the health maintenance organization.

Subd. 5. Term of project.

The commissioner may approve an application for a demonstration project for a maximum of six years, with an option to renew.

Subd. 6. Annual report.

Each health maintenance organization for which a demonstration project is approved shall annually file a report with the commissioner summarizing the project's experience at the same time it files its annual report required by section 62D.08. The report shall be on a form developed by the commissioner and shall be separate from the annual report required by section 62D.08.

Subd. 7. Approval rescission.

The commissioner may rescind approval of a demonstration project if the commissioner makes any of the findings listed in section 62D.15, subdivision 1, with respect to the project for which it has not been granted a specific exemption, or if the commissioner finds that the project's operation is contrary to the information contained in the approved application.