SF 3227

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; making changes to nursing home moratorium provisions;
amending Minnesota Statutes 2006, section 144A.073, as amended.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 144A.073, as amended by Laws 2007,
chapter 147, article 7, section 1, is amended to read:

144A.073 EXCEPTIONS TO THE MORATORIUM; REVIEW.

Subdivision 1.

Definitions.

For purposes of this section, the following terms have
the meanings given them:

(a) "Conversion" means the relocation of a nursing home bed from a nursing home
to an attached hospital.

(b) "Relocation" means the movement of licensed nursing home beds or certified
boarding care beds as permitted under subdivision 4, clause (3), and subdivision 5.

(c) "Renovation" means extensive remodeling of deleted text begin , or construction of an addition to, a
facility on an existing site deleted text end new text begin an existing facility new text end with a total cost exceeding ten percent of the
appraised value of the facility or $200,000, whichever is less. new text begin A renovation may include
the replacement or upgrade of existing mechanical or electrical systems.
new text end

(d) "Replacement" means the deleted text begin demolition, delicensure, reconstruction, or construction
of an addition to all or part of an existing deleted text end new text begin construction of a complete new new text end facility.

(e) new text begin "Addition" means the construction of new space to an existing facility.
new text end

new text begin (f) new text end "Upgrading" means a change in the level of licensure of a bed from a boarding
care bed to a nursing home bed in a certified boarding care facility.

new text begin (g) "Phased project" means a proposal that identifies construction occurring with
more than one distinct completion date. To be considered a distinct completion, each phase
must have construction that is ready for resident use, as determined by the commissioner,
that is not dependent on similar commissioner approval for future phases of construction.
The commissioner of human services shall only allow rate adjustments for construction
projects in phases if the proposal from a facility identifies construction in phases and each
phase can be approved for use independent of the other phases.
new text end

Subd. 2.

Request for proposals.

At the authorization by the legislature of additional
medical assistance expenditures for exceptions to the moratorium on nursing homes,
the commissioner shall publish in the State Register a request for proposals for nursing
home new text begin and certified boarding care home new text end projects deleted text begin to be licensed or certified under section
144A.071, subdivision 4a, clause (c) deleted text end new text begin for conversion, relocation, renovation, replacement,
upgrading, or addition new text end . The public notice of this funding and the request for proposals
must specify how the approval criteria will be prioritized by the commissioner. The notice
must describe the information that must accompany a request and state that proposals
must be submitted to the commissioner within deleted text begin 90 deleted text end new text begin 150 new text end days of the date of publication. The
notice must include the amount of the legislative appropriation available for the additional
costs to the medical assistance program of projects approved under this section. deleted text begin If no
money is appropriated for a year, the commissioner shall publish a notice to that effect,
and no proposals shall be requested. deleted text end If money is appropriated, the commissioner shall
initiate the application and review process described in this section at least deleted text begin twice deleted text end new text begin once new text end
each biennium deleted text begin and up to four times each biennium, according to dates established by
rule. Authorized funds shall be allocated proportionally to the number of processes deleted text end . new text begin A
second application and review process must occur if remaining funds are either greater
than $300,000 or more than 50 percent of the baseline appropriation for the biennium.
Authorized funds may be awarded in full in the first review process of the biennium.
Appropriated new text end funds not encumbered deleted text begin by an earlier process deleted text end within a biennium shall carry
forward to deleted text begin subsequent iterations of the process. Authorization for expenditures does not
carry forward into deleted text end the following biennium. To be considered for approval, a proposal
must include the following information:

(1) whether the request is for renovation, replacement, upgrading, conversion, new text begin
addition, new text end or relocation;

(2) a description of the deleted text begin problem deleted text end new text begin problems new text end the project is designed to address;

(3) a description of the proposed project;

(4) an analysis of projected costs of the nursing facility deleted text begin proposal, which are not
required to exceed the cost threshold referred to in section 144A.071, subdivision 1, to
be considered under this section deleted text end new text begin proposed project new text end , including new text begin : (i) new text end initial construction and
remodeling costs; new text begin (ii) new text end site preparation costs; new text begin (iii) equipment and new text end technology costs; new text begin (iv) new text end
financing costs, deleted text begin including deleted text end the current estimated long-term financing costs of the proposal,
which deleted text begin consists of deleted text end new text begin is to include details of any proposed funding mechanism already
arranged or being considered, including new text end estimates of the amount and sources of money,
reserves if required deleted text begin under the proposed funding mechanism deleted text end , annual payments schedule,
interest rates, length of term, closing costs and fees, insurance costs, deleted text begin and deleted text end any completed
marketing study or underwriting review; and new text begin (v) new text end estimated operating costs during the first
two years after completion of the project;

(5) for proposals involving replacement of all or part of a facility, the proposed
location of the replacement facility and an estimate of the cost of addressing the problem
through renovation;

(6) for proposals involving renovation, an estimate of the cost of addressing the
problem through replacement;

(7) the proposed timetable for commencing construction and completing the project;

(8) a statement of any licensure or certification issues, such as certification survey
deficiencies;

(9) the proposed relocation plan for current residents if beds are to be closed deleted text begin so that
the Department of Human Services can estimate the total costs of a proposal deleted text end new text begin according
to section 144A.161 new text end ; and

(10) other information required by permanent rule of the commissioner of health
in accordance with subdivisions 4 and 8.

Subd. 3.

Review and approval of proposals.

Within the limits of money
specifically appropriated to the medical assistance program for this purpose, the
commissioner of health may grant exceptions to the nursing home licensure or certification
moratorium for proposals that satisfy the requirements of this section. The commissioner
of health shall approve or disapprove a project. The commissioner of health shall base
approvals or disapprovals on a comparison and ranking of proposals using only the
criteria in subdivision 4 and in rules adopted by the commissioner. The cost to the
medical assistance program of the proposals approved must be within the limits of the
appropriations specifically made for this purpose. Approval of a proposal expires 18
months after approval by the commissioner of health unless the facility has commenced
construction as defined in section 144A.071, subdivision 1a, paragraph (d).

Subd. 3b.

Amendments to approved projects.

(a) Nursing facilities that have
received approval on or after July 1, 1993, for exceptions to the moratorium on nursing
homes through the process described in this section may request amendments to the
designs of the projects by writing the commissioner within deleted text begin 18 deleted text end new text begin 15 new text end months of receiving
approval. Applicants shall submit supporting materials that demonstrate how the amended
projects meet the criteria described in paragraph (b).

(b) The commissioner shall approve requests for amendments for projects approved
on or after July 1, 1993, according to the following criteria:

(1) the amended project designs must provide solutions to all of the problems
addressed by the original application that are at least as effective as the original solutions;

(2) the amended project designs may not reduce the space in each resident's living
area or in the total amount of common space devoted to resident and family uses by
more than five percent;

(3) the costs recognized for reimbursement of amended project designs shall be the
threshold amount of the original proposal as identified according to section 144A.071,
subdivision 2, except under conditions described in clause (4); and

(4) total costs up to ten percent greater than the cost identified in clause (3) may be
recognized for reimbursement if the proposer can document that one of the following
circumstances is true:

(i) changes are needed due to a natural disaster;

(ii) conditions that affect the safety or durability of the project that could not have
reasonably been known prior to approval are discovered;

(iii) state or federal law require changes in project design; or

(iv) documentable circumstances occur that are beyond the control of the owner
and require changes in the design.

(c) Approval of a request for an amendment does not alter the expiration of approval
of the project according to subdivision 3.

Subd. 3c.

Cost neutral relocation projects.

(a) Notwithstanding subdivision 3, the
commissioner may at any time accept proposals, or amendments to proposals previously
approved under this section, for relocations that are cost neutral with respect to state costs
as defined in section 144A.071, subdivision 5a. The commissioner, in consultation with
the commissioner of human services, shall evaluate proposals according to subdivision 4,
clauses (1), (2), deleted text begin and deleted text end (3), new text begin and (9) new text end and other criteria established in rule. The commissioner
shall approve or disapprove a project within 90 days. Proposals and amendments approved
under this subdivision are not subject to the six-mile limit in subdivision 5, paragraph (e).

(b) For the purposes of paragraph (a), cost neutrality shall be measured over the first
three 12-month periods of operation after completion of the project.

deleted text begin Subd. 3d. deleted text end

deleted text begin Project amendment authorized. deleted text end

deleted text begin Notwithstanding the provisions of
subdivision 3b:
deleted text end

deleted text begin (1) the commissioner may approve a request by a nursing facility located in the city
of Duluth with 48 licensed beds as of January 1, 2005, that received approval under this
section in 2002 for a moratorium exception project for amendment of the project design
that:
deleted text end

deleted text begin (i) reduces the total amount of common space devoted to resident and family uses by
more than five percent if the total amount of common space in the facility, including that
added by the project, is at least 175 percent of the state requirement for common space; and
deleted text end

deleted text begin (ii) reduces the space for no more than two residents' living areas by increasing the
size of a majority of the single-bed rooms from the size in the project design as originally
approved and converting two single-bed rooms in the project design as originally
approved to one semi-private room; and
deleted text end

deleted text begin (2) the commissioner may approve a request by a nursing facility located in the city
of Duluth with 129 licensed beds as of January 1, 2005, that received approval under this
section in 2002 for a moratorium exception project for amendment of the project design
that:
deleted text end

deleted text begin (i) reduces the total amount of common space devoted to resident and family uses by
more than five percent if the total amount of common space in the facility, including that
added by the project, is at least 175 percent of the state requirement for common space; and
deleted text end

deleted text begin (ii) reduces the space for no more than four residents' living areas by increasing the
size of a majority of the single-bed rooms from the size in the project design as originally
approved and converting four single-bed rooms in the project design as originally
approved to two semi-private rooms; and
deleted text end

deleted text begin (3) the amended project designs in clauses (1) and (2) must provide solutions to all
of the problems addressed by the original application that are at least as effective as the
original solutions.
deleted text end

Subd. 4.

Criteria for review.

The following criteria shall be used in a consistent
manner to compare, evaluate, and rank all proposals submitted. Except for the criteria
specified in clause (3), the application of criteria listed under this subdivision shall not
reflect any distinction based on the geographic location of the proposed project:

(1) the extent to which the proposal furthers state long-term care goals, including
the goal of enhancing the availability and use of alternative care services and the goal of
reducing the number of long-term care resident rooms with more than two beds;

(2) the proposal's long-term effects on state costs including the cost estimate of the
project according to section 144A.071, subdivision 5a;

(3) the extent to which the proposal promotes equitable access to long-term care
services in nursing homes through redistribution of the nursing home bed supply, as
measured by the number of beds relative to the population 85 or older deleted text begin , projected to
the year 2000 by the state demographer, and according to items (i) to (iv): deleted text end new text begin using data
published according to requirements in section 144A.351;
new text end

deleted text begin (i) reduce beds in counties where the supply is high, relative to the statewide mean,
and increase beds in counties where the supply is low, relative to the statewide mean;
deleted text end

deleted text begin (ii) adjust the bed supply so as to create the greatest benefits in improving the
distribution of beds;
deleted text end

deleted text begin (iii) adjust the existing bed supply in counties so that the bed supply in a county
moves toward the statewide mean; and
deleted text end

deleted text begin (iv) adjust the existing bed supply so that the distribution of beds as projected for the
year 2020 would be consistent with projected need, based on the methodology outlined in
the Interagency Long-Term Care Committee's nursing home bed distribution study;
deleted text end

(4) the extent to which the project improves conditions that affect the health or
safety of residents, such as narrow corridors, narrow door frames, unenclosed fire exits,
and wood frame construction, and similar provisions contained in fire and life safety
codes and licensure and certification rules;

(5) the extent to which the project improves conditions that affect the comfort or
quality of life of residents in a facility or the ability of the facility to provide efficient
care, such as a relatively high number of residents in a room; inadequate lighting or
ventilation; poor access to bathing or toilet facilities; a lack of available ancillary space for
dining rooms, day rooms, or rooms used for other activities; problems relating to heating,
cooling, or energy efficiency; inefficient location of nursing stations; deleted text begin narrow corridors; deleted text end or
other provisions contained in the licensure and certification rules;

(6) the extent to which the applicant demonstrates the delivery of quality care, as
defined in state and federal statutes and rules, to residents as evidenced by the two most
recent state agency certification surveys and the applicants' response to those surveys;

(7) the extent to which the project removes the need for waivers or variances
previously granted by either the licensing agency, certifying agency, fire marshal, or
local government entity;

(8) the extent to which the project increases the number of private or single bed
rooms;

(9) the extent to which the applicant demonstrates the continuing need for nursing
facility care in the community and adjacent communities; and

(10) other factors that may be developed in permanent rule by the commissioner of
health that evaluate and assess how the proposed project will further promote or protect
the health, safety, comfort, treatment, or well-being of the facility's residents.

Subd. 5.

Replacement restrictions.

(a) Proposals submitted or approved under this
section involving replacement must provide for replacement of the facility on the existing
site except as allowed in this subdivision.

(b) Facilities located in a metropolitan statistical area other than the Minneapolis-St.
Paul seven-county metropolitan area may relocate to a site within the same census tract or
a contiguous census tract.

(c) Facilities located in the Minneapolis-St. Paul seven-county metropolitan area
may relocate to a site within the same or contiguous health planning area as adopted in
March 1982 by the Metropolitan Council.

(d) Facilities located outside a metropolitan statistical area may relocate to a site
within the same city or township, or within a contiguous township.

(e) A facility relocated to a different site under paragraph (b), (c), or (d) must not be
relocated to a site more than six miles from the existing site.

(f) The relocation of part of an existing first facility to a second location, under
paragraphs (d) and (e), may include the relocation to the second location of up to four
beds from part of an existing third facility located in a township contiguous to the location
of the first facility. The six-mile limit in paragraph (e) does not apply to this relocation
from the third facility.

(g) For proposals approved on January 13, 1994, under this section involving the
replacement of 102 licensed and certified beds, the relocation of the existing first facility to
the new location under paragraphs (d) and (e) may include the relocation of up to 75 beds
of the existing facility. The six-mile limit in paragraph (e) does not apply to this relocation.

Subd. 6.

Conversion restrictions.

Proposals submitted or approved under this
section involving conversion must satisfy the following conditions:

(a) Conversion is limited to a total of five beds.

(b) An equivalent number of hospital beds must be delicensed.

(c) The average occupancy rate in the existing nursing home beds must be greater
than 96 percent according to the most recent annual statistical new text begin and cost new text end report of the
Department of deleted text begin Health deleted text end new text begin Human Services new text end .

(d) The cost of remodeling the hospital rooms to meet current nursing home
construction standards must not exceed ten percent of the appraised value of the nursing
home or $200,000, whichever is less.

(e) The conversion must not result in an increase in operating costs.

Subd. 7.

Upgrading restrictions.

Proposals submitted or approved under this
section involving upgrading must satisfy the following conditions:

(a) The facility must meet minimum nursing home deleted text begin care standards deleted text end new text begin licensure
requirements new text end .

(b) If beds are upgraded to nursing home beds, the number of boarding care beds in
a facility must not increase in the future.

deleted text begin (c) The average occupancy rate in the existing nursing home beds in an attached
facility must be greater than 96 percent according to the most recent annual statistical
report of the Department of Health.
deleted text end

Subd. 8.

Rulemaking.

The commissioner of health shall adopt rules to implement
this section. The permanent rules must be in accordance with and implement only the
criteria listed in this section. deleted text begin The authority to adopt permanent rules continues until July
1, 1996.
deleted text end

Subd. 9.

Budget request.

The commissioner of human services, in consultation
with the commissioner of finance, shall include in each biennial budget request a line
item for the nursing home moratorium exception process. If the commissioner of human
services does not request funding for this item, the commissioner of human services must
justify the decision in the budget pages.

deleted text begin Subd. 10. deleted text end

deleted text begin Extension of approval of moratorium exception. deleted text end

deleted text begin Notwithstanding
subdivision 3, the commissioner of health shall extend project approval for an additional
36 months for any proposed exception to the nursing home licensure and certification
moratorium if the proposal was approved under this section between July 1, 2001, and
June 30, 2003.
deleted text end

Subd. 11.

Funding from expired and canceled proposals.

The commissioner shall
monitor the status of projects approved under this section to identify, in consultation
with each facility with an approved project, if projects will be canceled or will expire.
For projects that have been canceled or have expired, if originally approved after June 30,
2001, the commissioner's approval authority for the estimated annual state cost to medical
assistance shall carry forward and shall be available for the issuance of a new moratorium
round later in that fiscal year or in either of the following two fiscal years.