Minnesota Legislature
HF 4573
as introduced - 92nd Legislature (2021 - 2022) Posted on 03/23/2022 10:39am
Bill Text Versions
| Engrossments | ||
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| Introduction | Posted on 03/23/2022 |
Current Version - as introduced
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A bill for an act
relating to health; changing provisions for nursing home change of ownership;
amending Minnesota Statutes 2020, sections 144A.01; 144A.03, subdivision 1;
144A.04, subdivisions 4, 6; 144A.06; proposing coding for new law in Minnesota
Statutes, chapter 144A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2020, section 144A.01, is amended to read:
144A.01 DEFINITIONS.
Subdivision 1.
Scope.
For the purposes of sections 144A.01 to 144A.27, the terms
defined in this section have the meanings given them.
Subd. 2.
Commissioner of health.
"Commissioner of health" means the state
commissioner of health established by section 144.011.
Subd. 3.
Board of Executivesnew text begin for Long Term Services and Supportsnew text end .
"Board of
Executivesnew text begin for Long Term Services and Supportsnew text end " means the Board of Executives for Long
Term Services and Supports established by section 144A.19.
Subd. 3a.
Certified.
"Certified" means certified for participation as a provider in the
Medicare or Medicaid programs under title XVIII or XIX of the Social Security Act.
Subd. 4.
Controlling deleted text begin persondeleted text end new text begin individualnew text end .
(a) "Controlling deleted text begin persondeleted text end new text begin individualnew text end " means deleted text begin any
public body, governmental agency, business entity,deleted text end new text begin an owner and the following individuals
and entities, if applicable:
new text end
new text begin (1) eachnew text end officernew text begin of the organizationnew text end , new text begin including the chief executive officer and the chief
financial officer;
new text end
new text begin (2) the new text end nursing home administratordeleted text begin ,deleted text end new text begin ;new text end or deleted text begin director whose responsibilities include the
direction of the management or policies of a nursing home
deleted text end
new text begin (3) any managerial officialnew text end .
new text begin (b) new text end "Controlling deleted text begin persondeleted text end new text begin individualnew text end " also means any new text begin entity or natural new text end person whodeleted text begin , directly
or indirectly, beneficially owns anydeleted text end new text begin has any direct or indirect ownershipnew text end interest in:
(1) any corporation, partnership or other business association which is a controlling
deleted text begin persondeleted text end new text begin individualnew text end ;
new text begin
(2) any other legal or business entity;
new text end
deleted text begin (2)deleted text end new text begin (3)new text end the land on which a nursing home is located;
deleted text begin (3)deleted text end new text begin (4)new text end the structure in which a nursing home is located;
deleted text begin (4)deleted text end new text begin (5)new text end any new text begin entity with at least a five percent new text end mortgage, contract for deed, new text begin deed of trust,
new text end or other deleted text begin obligation secured in whole or part bydeleted text end new text begin security interest innew text end the land or structure
comprising a nursing home; or
deleted text begin (5)deleted text end new text begin (6)new text end any lease or sublease of the land, structure, or facilities comprising a nursing
home.
deleted text begin (b)deleted text end new text begin (c)new text end "Controlling deleted text begin persondeleted text end new text begin individualnew text end " does not include:
(1) a bank, savings bank, trust company, savings association, credit union, industrial
loan and thrift company, investment banking firm, or insurance company unless the entity
directly or through a subsidiary operates a nursing home;
new text begin
(2) government and government-sponsored entities such as the United States Department
of Housing and Urban Development, Ginnie Mae, Fannie Mae, Freddie Mac, and the
Minnesota Housing Finance Agency which provide loans, financing, and insurance products
for housing sites;
new text end
deleted text begin (2)deleted text end new text begin (3)new text end an individual new text begin who is a new text end state new text begin or federal new text end official deleted text begin ordeleted text end new text begin , anew text end state new text begin or federal new text end employee, or
a member or employee of the governing body of a political subdivision of the state deleted text begin whichdeleted text end new text begin
or federal government thatnew text end operates one or more nursing homes, unless the individual is
also an officer deleted text begin or director of adeleted text end new text begin , owner, or managerial official of thenew text end nursing home, receives
any remuneration from a nursing home, or deleted text begin owns any of the beneficial interestsdeleted text end new text begin who is a
controlling individualnew text end not new text begin otherwise new text end excluded in this subdivision;
deleted text begin (3)deleted text end new text begin (4)new text end a natural person who is a member of a tax-exempt organization under section
290.05, subdivision 2, unless the individual is also deleted text begin an officer or director of a nursing home,
or owns any of the beneficial interestsdeleted text end new text begin a controlling individualnew text end not new text begin otherwise new text end excluded in
this subdivision; and
deleted text begin (4)deleted text end new text begin (5)new text end a natural person who owns less than five percent of the outstanding common
shares of a corporation:
(i) whose securities are exempt by virtue of section 80A.45, clause (6); or
(ii) whose transactions are exempt by virtue of section 80A.46, clause (7).
Subd. 4a.
Emergency.
"Emergency" means a situation or physical condition that creates
or probably will create an immediate and serious threat to a resident's health or safety.
Subd. 5.
Nursing home.
"Nursing home" means a facility or that part of a facility which
provides nursing care to five or more persons. "Nursing home" does not include a facility
or that part of a facility which is a hospital, a hospital with approved swing beds as defined
in section 144.562, clinic, doctor's office, diagnostic or treatment center, or a residential
program licensed pursuant to sections 245A.01 to 245A.16 or 252.28.
Subd. 6.
Nursing care.
"Nursing care" means health evaluation and treatment of patients
and residents who are not in need of an acute care facility but who require nursing supervision
on an inpatient basis. The commissioner of health may by rule establish levels of nursing
care.
Subd. 7.
Uncorrected violation.
"Uncorrected violation" means a violation of a statute
or rule or any other deficiency for which a notice of noncompliance has been issued and
fine assessed and allowed to be recovered pursuant to section 144A.10, subdivision 8.
Subd. 8.
Managerial deleted text begin employeedeleted text end new text begin officialnew text end .
"Managerial deleted text begin employeedeleted text end new text begin officialnew text end " means an
deleted text begin employee of adeleted text end new text begin individual who has the decision-making authority related to the operation of
thenew text end nursing home deleted text begin whose duties includedeleted text end new text begin and the responsibility for either: (1) the ongoing
management of the nursing home; or (2)new text end the direction of deleted text begin some or all of the management ordeleted text end
policiesnew text begin , services, or employeesnew text end of the nursing home.
Subd. 9.
Nursing home administrator.
"Nursing home administrator" means a person
who administers, manages, supervises, or is in general administrative charge of a nursing
home, whether or not the individual has an ownership interest in the home, and whether or
not the person's functions and duties are shared with one or more individuals, and who is
licensed pursuant to section 144A.21.
Subd. 10.
Repeated violation.
"Repeated violation" means the issuance of two or more
correction orders, within a 12-month period, for a violation of the same provision of a statute
or rule.
new text begin Subd. 11. new text end
new text begin Change of ownership. new text end
new text begin
"Change of ownership" means a change in the licensee.
new text end
new text begin Subd. 12. new text end
new text begin Direct ownership interest. new text end
new text begin
"Direct ownership interest" means an individual
or legal entity with the possession of at least five percent equity in capital, stock, or profits
of the licensee or who is a member of a limited liability company of the licensee.
new text end
new text begin Subd. 13. new text end
new text begin Indirect ownership interest. new text end
new text begin
"Indirect ownership interest" means an individual
or legal entity with a direct ownership interest in an entity that has a direct or indirect
ownership interest of at least five percent in an entity that is a licensee.
new text end
new text begin Subd. 14. new text end
new text begin Licensee. new text end
new text begin
"Licensee" means a person or legal entity to whom the commissioner
issues a license for a nursing home and who is responsible for the management, control,
and operation of the nursing home.
new text end
new text begin Subd. 15. new text end
new text begin Management agreement. new text end
new text begin
"Management agreement" means a written, executed
agreement between a licensee and manager regarding the provision of certain services on
behalf of the licensee.
new text end
new text begin Subd. 16. new text end
new text begin Manager. new text end
new text begin
"Manager" means an individual or legal entity designated by the
licensee through a management agreement to act on behalf of the licensee in the on-site
management of the nursing home.
new text end
new text begin Subd. 17. new text end
new text begin Managing control. new text end
new text begin
"Managing control" means any organization that exercises
operational or managerial control over the nursing home or conducts the day-to-day
operations of the nursing home.
new text end
new text begin Subd. 18. new text end
new text begin Owner. new text end
new text begin
"Owner" means: (1) an individual or legal entity that has a direct or
indirect ownership interest of five percent or more in a licensee; and (2) for purposes of this
chapter, owner of a nonprofit corporation means the president and treasurer of the board of
directors; and (3) for an entity owned by an employee stock ownership plan, owner means
the president and treasurer of the entity. A government entity that is issued a license under
this chapter shall be designated the owner.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2022.
new text end
Sec. 2.
Minnesota Statutes 2020, section 144A.03, subdivision 1, is amended to read:
Subdivision 1.
Form; requirements.
new text begin (a) new text end The commissioner of health by rule shall
establish forms and procedures for the processing of nursing home license applications.
new text begin (b) new text end An application for a nursing home license shall include deleted text begin the following informationdeleted text end :
(1) the deleted text begin namesdeleted text end new text begin business namenew text end and deleted text begin addresses of all controlling persons and managerial
employees of the facility to be licenseddeleted text end new text begin legal entity name of the licenseenew text end ;
(2) the new text begin street new text end addressnew text begin , mailing address,new text end and legal property description of the facility;
new text begin
(3) the names, e-mail addresses, telephone numbers, and mailing addresses of all owners,
controlling individuals, managerial officials, and the nursing home administrator;
new text end
new text begin
(4) the name and e-mail address of the managing agent and manager, if applicable;
new text end
new text begin
(5) the licensed bed capacity;
new text end
new text begin
(6) the license fee in the amount specified in section 144.122;
new text end
new text begin
(7) documentation of compliance with the background study requirements in section
144.057 for the owner, controlling individuals, and managerial officials. Each application
for a new license must include documentation for the applicant and for each individual with
five percent or more direct or indirect ownership in the applicant;
new text end
deleted text begin (3)deleted text end new text begin (8)new text end a copy of the architectural and engineering plans and specifications of the facility
as prepared and certified by an architect or engineer registered to practice in this state; deleted text begin and
deleted text end
new text begin
(9) a copy of the executed lease agreement between the landlord and the licensee, if
applicable;
new text end
new text begin
(10) a copy of the management agreement, if applicable;
new text end
new text begin
(11) a copy of the operations transfer agreement or similar agreement, if applicable;
new text end
new text begin
(12) an organizational chart that identifies all organizations and individuals with an
ownership interest in the licensee of five percent or greater and that specifies their relationship
with the licensee and with each other;
new text end
new text begin
(13) whether the applicant, owner, controlling individual, managerial official, or nursing
home administrator of the facility has ever been convicted of:
new text end
new text begin
(i) a crime or found civilly liable for a federal or state felony-level offense that was
detrimental to the best interests of the facility and its residents within the last ten years
preceding submission of the license application. Offenses include: (A) felony crimes against
persons and other similar crimes for which the individual was convicted, including guilty
pleas and adjudicated pretrial diversions; (B) financial crimes such as extortion,
embezzlement, income tax evasion, insurance fraud, and other similar crimes for which the
individual was convicted, including guilty pleas and adjudicated pretrial diversions; (C)
any felonies involving malpractice that resulted in a conviction of criminal neglect or
misconduct; and (D) any felonies that would result in a mandatory exclusion under section
1128(a) of the Social Security Act;
new text end
new text begin
(ii) any misdemeanor under federal or state law related to the delivery of an item or
service under Medicaid or a state health care program or the abuse or neglect of a patient
in connection with the delivery of a health care item or service;
new text end
new text begin
(iii) any misdemeanor under federal or state law related to theft, fraud, embezzlement,
breach of fiduciary duty, or other financial misconduct in connection with the delivery of
a health care item or service;
new text end
new text begin
(iv) any felony or misdemeanor under federal or state law relating to the interference
with or obstruction of any investigation into any criminal offense described in Code of
Federal Regulations, title 42, section 1001.101 or 1001.201;
new text end
new text begin
(v) any felony or misdemeanor under federal or state law relating to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance; or
new text end
new text begin
(vi) any felony or gross misdemeanor that relates to the operation of a nursing home or
assisted living facility or directly affects resident safety or care during that period;
new text end
new text begin
(14) whether the applicant, owner, controlling individual, managerial official, or nursing
home administrator of the facility has had:
new text end
new text begin
(i) any revocation or suspension of a license to provide health care by any state licensing
authority. This includes the surrender of the license while a formal disciplinary proceeding
was pending before a state licensing authority;
new text end
new text begin
(ii) any revocation or suspension of accreditation; or
new text end
new text begin
(iii) any suspension or exclusion from participation in, or any sanction imposed by, a
federal or state health care program or any debarment from participation in any federal
executive branch procurement or nonprocurement program;
new text end
new text begin
(15) whether in the preceding three years the applicant or any owner, controlling
individual, managerial official, or nursing home administrator of the facility has a record
of defaulting in the payment of money collected for others, including the discharge of debts
through bankruptcy proceedings;
new text end
new text begin
(16) the signature of the owner of the licensee or an authorized agent of the licensee;
new text end
new text begin
(17) identification of all states where the applicant or individual having a five percent
or more ownership currently or previously has been licensed as an owner or operator of a
long-term care, community-based, or health care facility or agency where the applicant's or
individual's license or federal certification has been denied, suspended, restricted, conditioned,
refused, not renewed, or revoked under a private or state-controlled receivership or where
these same actions are pending under the laws of any state or federal authority;
new text end
new text begin
(18) statistical information required by the commissioner; and
new text end
deleted text begin (4)deleted text end new text begin (19)new text end any other relevant information which the commissioner of health by rule or
otherwise may determine is necessary to properly evaluate an application for license.
new text begin (c) new text end A controlling deleted text begin persondeleted text end new text begin individualnew text end which is a corporation shall submit copies of its
articles of incorporation and bylaws and any amendments thereto as they occur, together
with the names and addresses of its officers and directors. A controlling deleted text begin persondeleted text end new text begin individualnew text end
which is a foreign corporation shall furnish the commissioner of health with a copy of its
certificate of authority to do business in this state. deleted text begin An application on behalf of a controlling
person which is a corporation, association or a governmental unit or instrumentality shall
be signed by at least two officers or managing agents of that entity.
deleted text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2022.
new text end
Sec. 3.
Minnesota Statutes 2020, section 144A.04, subdivision 4, is amended to read:
Subd. 4.
Controlling deleted text begin persondeleted text end new text begin individualnew text end restrictions.
(a) The new text begin commissioner has discretion
to bar any new text end controlling deleted text begin personsdeleted text end new text begin individualnew text end of a nursing home deleted text begin may not include anydeleted text end new text begin if the new text end
person deleted text begin whodeleted text end was a controlling deleted text begin persondeleted text end new text begin individualnew text end of deleted text begin anotherdeleted text end new text begin any othernew text end nursing home deleted text begin during
any period of timedeleted text end new text begin , assisted living facility, long-term care or health care facility, or agencynew text end
in the previous two-year periodnew text begin andnew text end :
(1) during deleted text begin whichdeleted text end new text begin that period ofnew text end time deleted text begin of control that other nursing homedeleted text end new text begin the facility or
agencynew text end incurred the following number of uncorrected or repeated violations:
(i) two or more uncorrected violations or one or more repeated violations which created
an imminent risk to direct resident new text begin or client new text end care or safety; or
(ii) four or more uncorrected violations or two or more repeated violations deleted text begin of any nature
for which the fines are in the four highest daily fine categories prescribed in ruledeleted text end new text begin that created
an imminent risk to direct resident or client care or safetynew text end ; or
(2) deleted text begin whodeleted text end new text begin during that period of time,new text end was convicted of a felony or gross misdemeanor that
deleted text begin relatesdeleted text end new text begin relatednew text end to operation of the deleted text begin nursing homedeleted text end new text begin facility or agencynew text end or directly deleted text begin affectsdeleted text end new text begin affectednew text end
resident safety or caredeleted text begin , during that perioddeleted text end .
(b) The provisions of this subdivision shall not apply to any controlling deleted text begin persondeleted text end new text begin individualnew text end
who had no legal authority to affect or change decisions related to the operation of the
nursing home which incurred the uncorrected violations.
new text begin
(c) When the commissioner bars a controlling individual under this subdivision, the
controlling individual has the right to appeal under chapter 14.
new text end
Sec. 4.
Minnesota Statutes 2020, section 144A.04, subdivision 6, is amended to read:
Subd. 6.
Managerial deleted text begin employeedeleted text end new text begin officialnew text end or licensed administrator; employment
prohibitions.
A nursing home may not employ as a managerial deleted text begin employeedeleted text end new text begin officialnew text end or as its
licensed administrator any person who was a managerial deleted text begin employeedeleted text end new text begin officialnew text end or the licensed
administrator of another facility during any period of time in the previous two-year period:
(1) during which time of employment that other nursing home incurred the following
number of uncorrected violations which were in the jurisdiction and control of the managerial
deleted text begin employeedeleted text end new text begin officialnew text end or the administrator:
(i) two or more uncorrected violations deleted text begin or one or more repeated violations which created
an imminent risk to direct resident care or safetydeleted text end ; or
(ii) four or more uncorrected violations or two or more repeated violations of any nature
for which the fines are in the four highest daily fine categories prescribed in rule; or
(2) who was convicted of a felony or gross misdemeanor that relates to operation of the
nursing home or directly affects resident safety or care, during that period.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2022.
new text end
Sec. 5.
Minnesota Statutes 2020, section 144A.06, is amended to read:
144A.06 TRANSFER OF deleted text begin INTERESTSdeleted text end new text begin LICENSE PROHIBITEDnew text end .
Subdivision 1.
deleted text begin Notice; expiration of licensedeleted text end new text begin Transfers prohibitednew text end .
deleted text begin
Any controlling
person who makes any transfer of a beneficial interest in a nursing home shall notify the
commissioner of health of the transfer within 14 days of its occurrence. The notification
shall identify by name and address the transferor and transferee and shall specify the nature
and amount of the transferred interest. On determining that the transferred beneficial interest
exceeds ten percent of the total beneficial interest in the nursing home facility, the structure
in which the facility is located, or the land upon which the structure is located, the
commissioner may, and on determining that the transferred beneficial interest exceeds 50
percent of the total beneficial interest in the facility, the structure in which the facility is
located, or the land upon which the structure is located, the commissioner shall require that
the license of the nursing home expire 90 days after the date of transfer. The commissioner
of health shall notify the nursing home by certified mail of the expiration of the license at
least 60 days prior to the date of expiration.
deleted text end
new text begin
A nursing home license may not be transferred.
new text end
Subd. 2.
deleted text begin Relicensuredeleted text end new text begin New license required; change of ownershipnew text end .
new text begin (a) new text end The
commissioner of health by rule shall prescribe procedures for deleted text begin relicensuredeleted text end new text begin licensurenew text end under
this section. deleted text begin The commissioner of health shall relicense a nursing home if the facility satisfies
the requirements for license renewal established by section 144A.05. A facility shall not be
relicensed by the commissioner if at the time of transfer there are any uncorrected violations.
The commissioner of health may temporarily waive correction of one or more violations if
the commissioner determines that:
deleted text end
deleted text begin
(1) temporary noncorrection of the violation will not create an imminent risk of harm
to a nursing home resident; and
deleted text end
deleted text begin
(2) a controlling person on behalf of all other controlling persons:
deleted text end
deleted text begin
(i) has entered into a contract to obtain the materials or labor necessary to correct the
violation, but the supplier or other contractor has failed to perform the terms of the contract
and the inability of the nursing home to correct the violation is due solely to that failure; or
deleted text end
deleted text begin
(ii) is otherwise making a diligent good faith effort to correct the violation.
deleted text end
new text begin
(b) A new license is required and the prospective licensee must apply for a license prior
to operating a currently licensed nursing home. The licensee must change whenever one of
the following events occur:
new text end
new text begin
(1) the form of the licensee's legal entity structure is converted or changed to a different
type of legal entity structure;
new text end
new text begin
(2) the licensee dissolves, consolidates, or merges with another legal organization and
the licensee's legal organization does not survive;
new text end
new text begin
(3) within the previous 24 months, 50 percent or more of the licensee's ownership interest
is transferred, whether by a single transaction or multiple transactions to:
new text end
new text begin
(i) a different person; or
new text end
new text begin
(ii) a person who had less than a five percent ownership interest in the facility at the
time of the first transaction; or
new text end
new text begin
(4) any other event or combination of events that results in a substitution, elimination,
or withdrawal of the licensee's responsibility for the facility.
new text end
new text begin Subd. 3. new text end
new text begin Compliance. new text end
new text begin
The commissioner must consult with the commissioner of human
services regarding the history of financial and cost reporting compliance of the prospective
licensee and prospective licensee's financial operations in any nursing home that the
prospective licensee or any controlling individual listed in the license application has had
an interest in.
new text end
new text begin Subd. 4. new text end
new text begin Facility operation. new text end
new text begin
The current licensee remains responsible for the operation
of the nursing home until the nursing home is licensed to the prospective licensee.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2022.
new text end
Sec. 6.
new text begin
[144A.32] CONSIDERATION OF APPLICATIONS.
new text end
new text begin
(a) Before issuing a provisional license or license or renewing an existing license, the
commissioner shall consider an applicant's compliance history in providing care in a facility
that provides care to children, the elderly, ill individuals, or individuals with disabilities.
new text end
new text begin
(b) The applicant's compliance history shall include repeat violations, rule violations,
and any license or certification involuntarily suspended or terminated during an enforcement
process.
new text end
new text begin
(c) The commissioner may deny, revoke, suspend, restrict, or refuse to renew the license
or impose conditions if:
new text end
new text begin
(1) the applicant fails to provide complete and accurate information on the application
and the commissioner concludes that the missing or corrected information is needed to
determine if a license is granted;
new text end
new text begin
(2) the applicant, knowingly or with reason to know, made a false statement of a material
fact in an application for the license or any data attached to the application or in any matter
under investigation by the department;
new text end
new text begin
(3) the applicant refused to allow agents of the commissioner to inspect the applicant's
books, records, files related to the license application, or any portion of the premises;
new text end
new text begin
(4) the applicant willfully prevented, interfered with, or attempted to impede in any way:
new text end
new text begin
(i) the work of any authorized representative of the commissioner, the ombudsman for
long-term care, or the ombudsman for mental health and developmental disabilities; or
new text end
new text begin
(ii) the duties of the commissioner, local law enforcement, city or county attorneys, adult
protection, county case managers, or other local government personnel;
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(5) the applicant has a history of noncompliance with federal or state regulations that
were detrimental to the health, welfare, or safety of a resident or a client; or
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(6) the applicant violates any requirement in this chapter or chapter 256R.
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(d) If a license is denied, the applicant has the reconsideration rights available under
chapter 14.
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new text begin EFFECTIVE DATE. new text end
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This section is effective August 1, 2022.
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Sec. 7. new text begin REVISOR INSTRUCTION.
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new text begin
The revisor of statutes shall make any necessary cross-reference changes required as a
result of the amendments in sections 1 to 6.
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