Subd. 1. Definitions.

For purposes of this section, the following definitions apply:

1. (a) "Medical education" means the accredited clinical training of physicians (medical students and residents), doctor of pharmacy practitioners, dentists, advanced practice nurses (clinical nurse specialist, certified registered nurse anesthetists, nurse practitioners, and certified nurse midwives), and physician assistants.
2. (b) "Clinical training" means accredited training that is funded and was historically funded in part by inpatient care revenues and that occurs in both inpatient and ambulatory care settings.
3. (c) "Trainee" means students involved in an accredited clinical training program for medical education as defined in paragraph (a).
4. (d) "Health care research" means approved clinical, outcomes, and health services investigations that are funded by patient out-of-pocket expenses or a third-party payer.
5. (e) "Commissioner" means the commissioner of health.
6. (f) "Teaching institutions" means any hospital, medical center, clinic, or other organization that currently sponsors or conducts accredited medical education programs or clinical research in Minnesota.

Subd. 2. Allocation and funding for medical education and research.

1. (a) The commissioner may establish a trust fund for the purposes of funding medical education and research activities in the state of Minnesota.
2. (b) By January 1, 1997, the commissioner may appoint an advisory committee to provide advice and oversight on the distribution of funds from the medical education and research trust fund. If a committee is appointed, the commissioner shall: (1) consider the interest of all stakeholders when selecting committee members; (2) select members that represent both urban and rural interest; and (3) select members that include ambulatory care as well as inpatient perspectives. The commissioner shall appoint to the advisory committee representatives of the following groups: medical researchers, public and private academic medical centers, managed care organizations, Blue Cross and Blue Shield of Minnesota, commercial carriers, Minnesota Medical Association, Minnesota Nurses Association, medical product manufacturers, employers, and other relevant stakeholders, including consumers. The advisory committee is governed by section 15.059, for membership terms and removal of members and will sunset on June 30, 1999.

3. (c) Eligible applicants for funds are accredited medical education teaching institutions, consortia, and programs operating in Minnesota. Applications must be submitted by the sponsoring institution on behalf of the teaching program, and must be received by September 30 of each year for distribution in January of the following year. An application for funds must include the following:

   1. (1) the official name and address of the sponsoring institution and the official name and address of the facility or program on whose behalf the institution is applying for funding;
   2. (2) the name, title, and business address of those persons responsible for administering the funds;
   3. (3) the total number, type, and specialty orientation of eligible Minnesota-based trainees in each accredited medical education program for which funds are being sought;
   4. (4) audited clinical training costs per trainee for each medical education program;
   5. (5) a description of current sources of funding for medical education costs including a description and dollar amount of all state and federal financial support;
   6. (6) other revenue received for the purposes of clinical training;
   7. (7) a statement identifying unfunded costs; and
   8. (8) other supporting information the commissioner, with advice from the advisory committee, determines is necessary for the equitable distribution of funds.
4. (d) The commissioner shall distribute medical education funds to all qualifying applicants based on the following basic criteria: (1) total medical education funds available; (2) total eligible trainees in each eligible education program; and (3) the statewide average cost per trainee, by type of trainee, in each medical education program. Funds distributed shall not be used to displace current funding appropriations from federal or state sources. Funds shall be distributed to the sponsoring institutions indicating the amount to be paid to each of the sponsor's medical education programs based on the criteria in this paragraph. Sponsoring institutions which receive funds from the trust fund must distribute approved funds to the medical education program according to the commissioner's approval letter. Further, programs must distribute funds among the sites of training based on the percentage of total program training performed at each site.

5. (e) Medical education programs receiving funds from the trust fund must submit annual cost and program reports through the sponsoring institution based on criteria established by the commissioner. The reports must include:

   1. (1) the total number of eligible trainees in the program;
   2. (2) the programs and residencies funded, the amounts of trust fund payments to each program, and within each program, the percentage distributed to each training site;
   3. (3) the average cost per trainee and a detailed breakdown of the components of those costs;
   4. (4) other state or federal appropriations received for the purposes of clinical training;
   5. (5) other revenue received for the purposes of clinical training; and

   6. (6) other information the commissioner, with advice from the advisory committee, deems appropriate to evaluate the effectiveness of the use of funds for clinical training.

      The commissioner, with advice from the advisory committee, will provide an annual summary report to the legislature on program implementation due February 15 of each year.

6. (f) The commissioner is authorized to distribute funds made available through:

   1. (1) voluntary contributions by employers or other entities;
   2. (2) allocations for the department of human services to support medical education and research; and
   3. (3) other sources as identified and deemed appropriate by the legislature for inclusion in the trust fund.

7. (g) The advisory committee shall continue to study and make recommendations on:

   1. (1) the funding of medical research consistent with work currently mandated by the legislature and under way at the department of health; and
   2. (2) the costs and benefits associated with medical education and research.

Subd. 3. Medical assistance and general assistance service.

The commissioner of health, in consultation with the medical education and research costs advisory committee, shall develop a system to recognize those teaching programs which serve higher numbers or high proportions of public program recipients and shall report to the legislative commission on health care access by January 15, 1998, on an allocation formula to implement this system.