HF 721

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; modifying long-term care initiatives; changing
property reimbursements; providing long-term care provider rate increases;
requiring the use of new nursing facility case mix indices; providing an
exemption from the MinnesotaCare program prohibition on employer-subsidized
coverage; requiring workforce initiatives; allowing the authorization of
moratorium exception projects; appropriating money; amending Minnesota
Statutes 2006, sections 144A.073, subdivision 4; 256B.431, subdivisions 2e, 17a,
17e, 32; 256B.434, by adding subdivisions; 256B.438, by adding a subdivision;
256B.441, subdivisions 1, 46; 256B.5012, by adding a subdivision; 256L.07,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 256.

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

ARTICLE 1

LONG-TERM CARE INITIATIVES

Section 1.

new text begin [256.9755] LONG-TERM CARE WORKFORCE TRAINING AND
DEVELOPMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Access to standardized curriculum. new text end

new text begin The commissioner, in
cooperation with the Minnesota job skills partnership program established under chapter
116L, shall subsidize student access to the health care core curriculum developed by the
Health Education-Industry Partnership, using a sliding tuition scale tied to income.
new text end

new text begin Subd. 2. new text end

new text begin Additional workforce initiatives. new text end

new text begin The commissioner shall develop and
implement initiatives to train and increase the supply of long-term caregivers who provide
specialized nursing facility care and community-based care to elderly and disabled persons
with chronic care needs. The commissioner shall present to the legislature by January 15,
2008, a description of the initiatives to be implemented and draft legislation incorporating
any statutory changes necessary to implement the initiatives.
new text end

new text begin Subd. 3. new text end

new text begin Funding. new text end

new text begin The subsidies and initiatives required by this subdivision are
funded using savings to the general fund that result from nursing facility closures and
downsizing.
new text end

Sec. 2.

Minnesota Statutes 2006, section 256B.431, subdivision 2e, is amended to read:

Subd. 2e.

Contracts for services for ventilator-dependent persons new text begin and
persons requiring other specialized services new text end .

The commissioner may negotiate with a
nursing facility eligible to receive medical assistance payments to provide services to a
ventilator-dependent person new text begin ; a person requiring wound vacuum and wound stimulation
equipment and care; a person requiring bariatric care, services, and equipment due to
obesity; a person requiring skilled nursing services and equipment for tracheotomy care;
and a person requiring other commissioner-specified complex clinical care, new text end identified by
the commissioner according to criteria developed by the commissioner, including:

(1) nursing facility care has been recommended for the person by a preadmission
screening team;

(2) the person has been hospitalized and no longer requires inpatient acute care
hospital services; and

(3) the commissioner has determined that necessary services for the person cannot
be provided under existing nursing facility rates.

The commissioner may negotiate an adjustment to the operating cost payment
rate for a nursing facility with a resident who is ventilator-dependent, for that resident.
new text begin The commissioner may also negotiate an adjustment to the operating cost payment
rate for a resident who requires wound vacuum and wound stimulation equipment and
care; bariatric care, services, and equipment due to obesity; skilled nursing services
and equipment for tracheotomy care; or other complex clinical care. new text end The negotiated
adjustment must reflect only the actual additional cost of meeting the specialized care
needs of deleted text begin a ventilator-dependent person deleted text end new text begin the resident new text end identified by the commissioner for
whom necessary services cannot be provided under existing nursing facility rates and
which are not otherwise covered under Minnesota Rules, parts 9549.0010 to 9549.0080 or
9505.0170 to 9505.0475. For persons who are initially admitted to a nursing facility before
July 1, 2001, and have their payment rate under this subdivision negotiated after July 1,
2001, the negotiated payment rate must not exceed 200 percent of the highest multiple
bedroom payment rate for the facility, as initially established by the commissioner for the
rate year for case mix classification K; or, upon implementation of the RUG's-based case
mix system, 200 percent of the highest RUG's rate. For persons initially admitted to a
nursing facility on or after July 1, 2001, the negotiated payment rate must not exceed 300
percent of the facility's multiple bedroom payment rate for case mix classification K; or,
upon implementation of the RUG's-based case mix system, 300 percent of the highest
RUG's rate. The negotiated adjustment shall not affect the payment rate charged to private
paying residents under the provisions of section 256B.48, subdivision 1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, section 256B.431, subdivision 32, is amended to read:

Subd. 32.

Payment during first 90 days.

(a) For rate years beginning on or after
July 1, 2001, the total payment rate for a facility reimbursed under this section, section
256B.434, or any other section for the first 90 paid days after admission shall be:

(1) for the first 30 paid days, the rate shall be 120 percent of the facility's medical
assistance rate for each case mix class;

(2) for the next 60 paid days after the first 30 paid days, the rate shall be 110 percent
of the facility's medical assistance rate for each case mix class;

(3) beginning with the 91st paid day after admission, the payment rate shall be the
rate otherwise determined under this section, section 256B.434, or any other section; and

(4) payments under this paragraph apply to admissions occurring on or after July 1,
2001, and before July 1, 2003, and to resident days occurring before July 30, 2003.

(b) For rate years beginning on or after July 1, 2003, the total payment rate for a
facility reimbursed under this section, section 256B.434, or any other section shall be:

(1) for the first 30 calendar days after admission, the rate shall be 120 percent of
the facility's medical assistance rate for each RUG class;

(2) beginning with the 31st calendar day after admission, the payment rate shall be
the rate otherwise determined under this section, section 256B.434, or any other section;
and

(3) payments under this paragraph apply to admissions occurring on or after July
1, 2003.

(c) Effective January 1, 2004, the enhanced rates under this subdivision shall not be
allowed if a resident has resided during the previous 30 calendar days in:

(1) the same nursing facility;

(2) a nursing facility owned or operated by a related party; or

(3) a nursing facility or part of a facility that closed or was in the process of closing.

new text begin (d) For rate years beginning on or after October 1, 2007, the total payment rate for a
facility reimbursed under this section, section 256B.434, or any other section shall be:
new text end

new text begin (1) for the first 60 calendar days after admission, the rate shall be 120 percent of the
facility's medical assistance rate for each RUG class; and
new text end

new text begin (2) beginning with the 61st calendar day after admission, the payment rate shall be
the rate otherwise determined under this section, section 256B.434, or any other section.
new text end

new text begin (e) Payments under paragraph (d) apply to admissions occurring on or after October
1, 2007.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 4.

Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:

new text begin Subd. 19. new text end

new text begin Rate increases for October 1, 2007, and October 1, 2008. new text end

new text begin (a) For the
rate years beginning October 1, 2007, and October 1, 2008, the commissioner shall make
available to each nursing facility reimbursed under this section an adjustment equal to five
percent of the total operating payment rate.
new text end

new text begin (b) Seventy-five percent of the money resulting from the rate adjustment under
paragraph (a) must be used to increase wages and benefits and pay associated costs
for all employees, except management fees, the administrator, and central office staff.
Seventy-five percent of the money received by a facility as a result of the rate adjustment
provided in paragraph (a) must be used only for wage and benefit increases and payment
of associated costs, implemented on or after the effective date of the rate increase each
year, and must not be used for increases implemented prior to that date.
new text end

new text begin (c) Nursing facilities may apply for the portion of the rate adjustment under
paragraph (a) for employee wages and benefits and associated costs. The application
must be made to the commissioner and contain a plan by which the nursing facility
will distribute the funds according to paragraph (b). For nursing facilities in which the
employees are represented by an exclusive bargaining representative, an agreement
negotiated and agreed to by the employer and the exclusive bargaining representative
constitutes the plan. The commissioner shall not review and shall not require changes
to the portion or portions of the plan covered by collective bargaining agreements. A
negotiated agreement may constitute the plan only if the agreement is finalized after the
date of enactment of all increases for the rate year and signed by both parties prior to
submission to the commissioner. The commissioner shall review the plan to ensure that
the rate adjustments are used as provided in paragraph (b). To be eligible, a facility must
submit its distribution plan by March 31, 2008, and March 31, 2009, respectively. The
commissioner may approve distribution plans on or before June 30, 2008, and June 30,
2009, respectively. If a facility's distribution plan is effective after the first day of the
applicable rate period that the funds are available, the rate adjustments are effective the
same date as the facility's plan.
new text end

new text begin (d) A copy of the approved distribution plan must be made available to all employees
by giving each employee a copy or by posting a copy in an area of the nursing facility
to which all employees have access. If an employee does not receive the wage and
benefit adjustment described in the facility's approved plan and is unable to resolve the
problem with the facility's management or through the employee's union representative,
the employee may contact the commissioner at an address or telephone number provided
by the commissioner and included in the approved plan.
new text end

Sec. 5.

Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:

new text begin Subd. 20. new text end

new text begin Funding for staff increases. new text end

new text begin (a) For the rate year beginning October 1,
2007, the commissioner shall make available to nursing facilities reimbursed under this
section an adjustment equal to one percent of the total operating payment rate.
new text end

new text begin (b) The money resulting from the rate adjustment under paragraph (a) may be used by
a nursing facility only for wages, benefits, and associated costs for direct care employees
hired on or after the effective date of the rate increase. For purposes of this requirement, a
direct care employee means a registered nurse, licensed practical nurse, or certified nursing
assistant for whom at least 75 percent of work hours are spent on direct care to patients.
new text end

new text begin (c) Nursing facilities shall apply to the commissioner for a rate increase by
submitting an application form developed by the commissioner. In granting requests for
rate adjustments, the commissioner shall give preference to nursing facilities that have low
ratios of direct care staff to residents, or that demonstrate that an increase in direct care
staff will lead to a significant improvement in the quality of care provided.
new text end

new text begin (d) The commissioner shall require nursing facilities to report information on the use
of the rate adjustment, and shall monitor nursing facility compliance with the requirements
of paragraph (b). The commissioner may recover money that the commissioner determines
was spent inappropriately by reducing nursing facility operating payment rates in future
rate years.
new text end

Sec. 6.

Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:

new text begin Subd. 21. new text end

new text begin Adjustments for low-payment rate facilities. new text end

new text begin (a) For the rate years
beginning October 1, 2007, and October 1, 2008, the commissioner shall adjust operating
payment rates for low-payment rate nursing facilities reimbursed under this section and
licensed under chapter 144A in accordance with this subdivision.
new text end

new text begin (b) The commissioner shall determine for each rate year a value for an operating
payment rate with a RUG index of 1.00, such that the cost to increase the operating
payment rate for all nursing facilities with operating payment rates less than that value by
an amount equal to 50 percent of the difference between their operating payment rate with
a RUG index equal to 1.00 and the value determined under this paragraph not to exceed an
increase of six percent of a facility's operating payment rate with a RUG index equal to
1.00, does not exceed the amount appropriated for this purpose.
new text end

new text begin (c) Effective September 30, 2007, and September 30, 2008, the commissioner shall
identify all nursing facilities with operating payment rates with a RUG index equal to
1.00, that are less than the value determined in paragraph (b).
new text end

new text begin (d) Effective October 1, 2007, and October 1, 2008, the commissioner shall provide
each nursing facility identified in paragraph (c) with an increase in its operating payment
rate with a RUG index of 1.00 that is equal to 50 percent of the difference between its
operating payment rate with a RUG index equal to 1.00, and the value determined in
paragraph (b), but not to exceed an increase of six percent of the operating payment rate
with a RUG index equal to 1.00.
new text end

new text begin (e) The commissioner shall apportion the amount of the RUG index equal to 1.00
computed in paragraph (d) between case mix and noncase mix per diems in proportion to
the amounts in effect on the September 30 immediately preceding the start of the rate year.
The commissioner shall multiply the case mix portion by the RUG indices and add the
noncase mix portion to that product to determine the other RUG operating rates.
new text end

new text begin (f) The rate adjustment provided in paragraph (d) shall be added after any other
rate adjustments effective on the same day.
new text end

Sec. 7.

Minnesota Statutes 2006, section 256B.438, is amended by adding a
subdivision to read:

new text begin Subd. 8. new text end

new text begin New case mix indices. new text end

new text begin (a) Effective with rates for the rate year beginning
October 1, 2007, the commissioner shall implement the case mix indices recommended
by the time study conducted under Laws 2001, First Special Session chapter 9, article 5,
section 35, paragraph (e). The commissioner shall implement the new case mix indices
as follows:
new text end

new text begin (1) the September 30, 2006, case mix component of the nursing facility operating
payment rate is multiplied by the new case mix indices to create 36 case mix adjusted rates;
new text end

new text begin (2) the 36 case mix adjusted rates determined in clause (1), plus the noncase mix
component, shall be the 36 nursing facility operating payment rates; and
new text end

new text begin (3) any rate increases authorized by the legislature to take effect October 1, 2007,
shall be applied to the rates determined under clause (2).
new text end

new text begin (b) The commissioner shall adjust the October 1, 2007, operating rates in paragraph
(a) for nursing facilities estimated to receive a decrease in operating revenue. The rate
interim adjustment is established as follows:
new text end

new text begin (1) the commissioner shall use the minimum data set to classify private and medical
assistance patient days by resource utilization group (RUG) classification for the rate year
ending June 30, 2007, according to the case mix indices to be used on September 30, 2007,
and the case mix indices to be used on October 1, 2007;
new text end

new text begin (2) the commissioner shall use the resident days in clause (1) and the nursing
facility's October 1, 2007, unadjusted operating payment rate to estimate operating
revenue according to the case mix indices to be used on September 30, 2007, and the case
mix indices to be used on October 1, 2007;
new text end

new text begin (3) the estimated operating revenue determined with the case mix indices to be used
on September 30, 2007, minus the operating revenue determined with the case mix indices
to be used on October 1, 2007, is equal to the difference between the decrease in medical
assistance and private pay operating revenue;
new text end

new text begin (4) facilities with an estimated difference that is negative in clause (3) receive an
interim rate adjustment equal to the value determined in clause (3) divided by the medical
assistance and private pay resident days in clause (1);
new text end

new text begin (5) the interim rate adjustment is in effect from October 1, 2007, through June
30, 2008, and does not become part of a facility's operating payment rate after June 30,
2008. The interim rate adjustment shall be applied to the case mix portion of the facility
operating rate, at a RUG weight of 1.00 and all RUG adjusted by their indices; and
new text end

new text begin (6) the commissioner, by August 15, 2007, shall provide nursing facilities which the
commissioner has estimated will experience a decrease in operating revenue, with written
notice that specifies the amount of the estimated decrease in operating revenue and the
amount of the interim rate adjustment. Nursing facilities have 30 days to decline the
interim rate adjustment.
new text end

new text begin (c) The commissioner shall adjust the July 1, 2008, operating rates of facilities
receiving the interim rate adjustments in paragraph (b) and facilities that demonstrate a
decrease in operating revenue from the implementation of the case mix indices. The
adjustment is calculated as follows:
new text end

new text begin (1) facilities that received the interim rate adjustment in paragraph (b) shall report to
the commissioner the number of medical assistance and private pay resident days by RUG
classification for the six-month period October 1, 2007, through March 31, 2008, according
to the case mix indices used on September 30, 2007, and the case mix indices used on
October 1, 2007. A facility not receiving the rate adjustment in paragraph (b) that had a
decrease in operating revenue resulting from implementation of the new case mix indices
may report to the commissioner the number of medical assistance and private pay resident
days by RUG classification for the six-month period October 1, 2007, through March 31,
2008, according to the case mix indices used on September 30, 2007, and the case mix
indices used on October 1, 2007. Nursing facilities shall submit the required information
to the commissioner by May 15, 2008, in the manner specified by the commissioner;
new text end

new text begin (2) the commissioner shall use the resident days reported in clause (1) and the
nursing facility's October 1, 2007, unadjusted operating payment rate to determine
operating revenue under the case mix indices used on September 30, 2007, and the case
mix indices used on October 1, 2007;
new text end

new text begin (3) the operating revenue determined using the case mix indices used on September
30, 2007, minus the operating revenue determined using the case mix indices used on
October 1, 2007, must equal the difference that is negative in operating revenue;
new text end

new text begin (4) the July 1, 2008, operating payment rate adjustment is the decrease in operating
revenue determined in clause (3) divided by the total medical assistance and private pay
days reported in clause (1) for the six-month period October 1, 2007, through March 31,
2008. The operating payment rate adjustment is applied to the case mix portion of the
facility operating rate; and
new text end

new text begin (5) if the amount determined in clause (4) is greater than the amount determined
under paragraph (b), clause (4), the commissioner shall retroactively pay to nursing
facilities the difference between the two amounts for all paid medical assistance days
between October 1, 2007, and June 30, 2008.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 8.

Minnesota Statutes 2006, section 256B.441, subdivision 1, is amended to read:

Subdivision 1.

Rate deleted text begin determination deleted text end new text begin rebasing new text end .

deleted text begin (a) deleted text end The commissioner shall deleted text begin establish
a value-based nursing facility reimbursement system which will provide facility-specific,
prospective rates for nursing facilities participating in the medical assistance program.
The rates shall be determined using an annual statistical and cost report filed by each
nursing facility. The total payment rate shall be composed of four rate components: direct
care services, support services, external fixed, and property-related rate components.
The payment rate shall be derived from statistical measures of actual costs incurred in
facility operation of nursing facilities. From this cost basis, the components of the total
payment rate shall be adjusted for quality of services provided, recognition of staffing
levels, geographic variation in labor costs, and resident acuity deleted text end new text begin rebase nursing facility rates
for the rate year beginning October 1, 2008, and shall collect all data necessary to rebase
rates. Nursing facilities shall submit this data in the form and manner specified by the
commissioner. The rebasing methodology shall recognize increased expenses incurred
by facilities that are not reflected in current payments and shall not be constrained by a
state budget neutrality factor or method new text end .

deleted text begin (b) Rates shall be rebased annually. Each cost reporting year shall begin on October
1 and end on the following September 30. Beginning in 2006, a statistical and cost report
shall be filed by each nursing facility by January 15. Notice of rates shall be distributed by
August 15 and the rates shall go into effect on October 1 for one year.
deleted text end

deleted text begin (c) The commissioner shall begin to phase in the new reimbursement system
beginning October 1, 2007. Full phase-in shall be completed by October 1, 2011.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 9.

Minnesota Statutes 2006, section 256B.441, subdivision 46, is amended to read:

Subd. 46.

Calculation of quality add-on.

The payment rate for the quality add-on
shall be a variable amount based on each facility's quality score.

(a) For the rate year beginning October 1, 2006, the maximum quality add-on percent
shall be 2.4 percent and this add-on shall not be subject to a phase-in. The determination
of the quality score to be used in calculating the quality add-on for October 1, 2006,
shall be based on a report which must be filed with the commissioner, according to the
requirements in subdivision 43, for a six-month period ending January 31, 2006. This
report shall be filed with the commissioner by February 28, 2006. The commissioner shall
prorate the six months of data to a full year. When new quality measures are incorporated
into the quality score methodology and when existing quality measures are updated or
improved, the commissioner may increase the maximum quality add-on percent.

(b) For each facility, determine the operating payment rate.

(c) For each facility determine a ratio of the quality score of the facility determined
in subdivision 44, less 40 and then divided by 60. If this value is less than zero, use
the value zero.

(d) For each facility, the quality add-on shall be the value determined in paragraph
(b) times the value determined in paragraph (c) times the maximum quality add-on percent.

new text begin (e) For rate years beginning on or after October 1, 2007, the maximum quality
add-on percent shall be four percent. The commissioner shall determine the quality add-on
using the methodology described in paragraphs (b) to (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 10.

Minnesota Statutes 2006, section 256B.5012, is amended by adding a
subdivision to read:

new text begin Subd. 7. new text end

new text begin ICF/MR rate increases October 1, 2007, and October 1, 2008. new text end

new text begin (a)
For the rate periods beginning October 1, 2007, and October 1, 2008, the commissioner
shall make available to each facility reimbursed under this section an adjustment to the
total operating payment rate of five percent.
new text end

new text begin (b) Seventy-five percent of the money resulting from the rate adjustment under
paragraph (a) must be used to increase wages and benefits and pay associated costs for
employees, except for administrative and central office employees. Seventy-five percent
of the money received by a facility as a result of the rate adjustment provided in paragraph
(a) must be used only for wage, benefit, and staff increases implemented on or after
the effective date of the rate increase each year, and must not be used for increases
implemented prior to that date. The wage adjustment eligible employees may receive may
vary based on merit, seniority, or other factors determined by the provider.
new text end

new text begin (c) For each facility, the commissioner shall make available an adjustment, based
on occupied beds, using the percentage specified in paragraph (a) multiplied by the total
payment rate, including variable rate but excluding the property-related payment rate, in
effect on the preceding day. The total payment rate must include the adjustment provided
in section new text begin 256B.501, subdivision 12 new text end .
new text end

new text begin (d) A facility whose payment rates are governed by closure agreements, receivership
agreements, or Minnesota Rules, part , is not eligible for an adjustment
otherwise granted under this subdivision.
new text end

new text begin (e) A facility may apply for the portion of the payment rate adjustment provided
under paragraph (a) for employee wages and benefits and associated costs. The application
must be made to the commissioner and contain a plan by which the facility will distribute
the funds according to paragraph (b). For facilities in which the employees are represented
by an exclusive bargaining representative, an agreement negotiated and agreed to by
the employer and the exclusive bargaining representative constitutes the plan. The
commissioner shall not review, and shall not require changes, to the portion or portions
of the plan covered by collective bargaining agreements. A negotiated agreement may
constitute the plan only if the agreement is finalized after the date of enactment of all rate
increases for the rate year. The commissioner shall review the plan to ensure that the
payment rate adjustment per diem is used as provided in this subdivision. To be eligible, a
facility must submit its plan by March 31, 2008, and December 31, 2008, respectively.
If a facility's plan is effective for its employees after the first day of the applicable rate
period that the funds are available, the payment rate adjustment per diem is effective
the same date as its plan.
new text end

new text begin (f) A copy of the approved distribution plan must be made available to all employees
by giving each employee a copy or by posting it in an area of the facility to which all
employees have access. If an employee does not receive the wage and benefit adjustment
described in the facility's approved plan and is unable to resolve the problem with the
facility's management or through the employee's union representative, the employee
may contact the commissioner at an address or telephone number provided by the
commissioner and included in the approved plan.
new text end

Sec. 11.

Minnesota Statutes 2006, section 256L.07, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Must not have access to deleted text end Employer-subsidized coverage.

(a) To be
eligible, a family or individual must not have access to subsidized health coverage through
an employer and must not have had access to employer-subsidized coverage through
a current employer for 18 months prior to application or reapplication. A family or
individual whose employer-subsidized coverage is lost due to an employer terminating
health care coverage as an employee benefit during the previous 18 months is not eligible.

(b) This subdivision does not apply to a family or individual who was enrolled
in MinnesotaCare within six months or less of reapplication and who no longer has
employer-subsidized coverage due to the employer terminating health care coverage
as an employee benefit.

(c) For purposes of this requirement, subsidized health coverage means health
coverage for which the employer pays at least 50 percent of the cost of coverage for
the employee or dependent, or a higher percentage as specified by the commissioner.
Children are eligible for employer-subsidized coverage through either parent, including
the noncustodial parent. The commissioner must treat employer contributions to Internal
Revenue Code Section 125 plans and any other employer benefits intended to pay
health care costs as qualified employer subsidies toward the cost of health coverage for
employees for purposes of this subdivision.

new text begin (d) The commissioner, for the period July 1, 2007, through June 30, 2008, shall
exempt a family or individual from this subdivision if access to employer-subsidized
insurance is through employment at a nursing facility licensed under chapter 144A that
participates in the medical assistance program. The commissioner shall evaluate the extent
to which this exemption increases access to affordable health coverage, and shall present
recommendations to the legislature by February 1, 2008, as to whether this exemption
should be continued and whether the exemption should be extended to include families
and individuals with access to employer-subsidized insurance through other long-term
care providers.
new text end

Sec. 12. new text begin COMMUNITY SERVICES PROVIDER RATE INCREASES.
new text end

new text begin (a) The commissioner of human services shall increase reimbursement rates or rate
limits, as applicable, by five percent for the rate period beginning October 1, 2007, and
the rate period beginning October 1, 2008, effective for services rendered on or after
those dates.
new text end

new text begin (b) The five percent annual rate increase described in this section must be provided
to:
new text end

new text begin (1) home and community-based waivered services for persons with developmental
disabilities or related conditions under Minnesota Statutes, section 256B.501;
new text end

new text begin (2) home and community-based waivered services for the elderly under Minnesota
Statutes, section 256B.0915;
new text end

new text begin (3) waivered services under community alternatives for disabled individuals under
Minnesota Statutes, section 256B.49;
new text end

new text begin (4) community alternative care waivered services under Minnesota Statutes, section
256B.49;
new text end

new text begin (5) traumatic brain injury waivered services under Minnesota Statutes, section
256B.49;
new text end

new text begin (6) nursing services and home health services under Minnesota Statutes, section
256B.0625, subdivision 6a;
new text end

new text begin (7) personal care services and nursing supervision of personal care services under
Minnesota Statutes, section 256B.0625, subdivision 19a;
new text end

new text begin (8) private duty nursing services under Minnesota Statutes, section 256B.0625,
subdivision 7;
new text end

new text begin (9) day training and habilitation services for adults with developmental disabilities
or related conditions under Minnesota Statutes, sections 252.40 to 252.46;
new text end

new text begin (10) alternative care services under Minnesota Statutes, section 256B.0913;
new text end

new text begin (11) adult residential program grants under Minnesota Statutes, section 245.73;
new text end

new text begin (12) adult and children's mental health grants under Minnesota Rules, parts
9535.1700 to 9535.1760;
new text end

new text begin (13) the group residential housing supplementary service rate under Minnesota
Statutes, section 256I.05, subdivision 1a;
new text end

new text begin (14) adult mental health integrated fund grants under Minnesota Statutes, section
245.4661;
new text end

new text begin (15) semi-independent living services (SILS) under Minnesota Statutes, section
252.275, including SILS funding under county social services grants formerly funded
under Minnesota Statutes, chapter 256I;
new text end

new text begin (16) community support services for deaf and hard-of-hearing adults with mental
illness who use or wish to use sign language as their primary means of communication
under Minnesota Statutes, section 256.01, subdivision 2;
new text end

new text begin (17) living skills training programs for persons with intractable epilepsy who need
assistance in the transition to independent living under Laws 1988, chapter 689;
new text end

new text begin (18) physical therapy services under Minnesota Statutes, sections 256B.0625,
subdivision 8, and 256D.03, subdivision 4;
new text end

new text begin (19) occupational therapy services under Minnesota Statutes, sections 256B.0625,
subdivision 8a, and 256D.03, subdivision 4;
new text end

new text begin (20) speech-language therapy services under Minnesota Statutes, section 256D.03,
subdivision 4, and Minnesota Rules, part 9505.0390;
new text end

new text begin (21) respiratory therapy services under Minnesota Statutes, section 256D.03,
subdivision 4, and Minnesota Rules, part 9505.0295;
new text end

new text begin (22) aging grants under Minnesota Statutes, sections 256.975 to 256.977, 256B.0917,
and 256B.0928;
new text end

new text begin (23) deaf and hard-of-hearing grants under Minnesota Statutes, sections 256C.233;
256C.25; Laws 1985, chapter 9, article 1; and Laws 1997, First Special Session chapter
5, section 20;
new text end

new text begin (24) children's therapeutic services and supports under Minnesota Statutes, section
256B.0943;
new text end

new text begin (25) tier I chemical health services under Minnesota Statutes, chapter 254B;
new text end

new text begin (26) consumer support grants under Minnesota Statutes, section 256.476;
new text end

new text begin (27) family support grants under Minnesota Statutes, section 252.32;
new text end

new text begin (28) continuation coverage for AIDS patients under Minnesota Statutes, section
256.9365; and
new text end

new text begin (29) prepayment demonstration project under Minnesota Statutes, section 256B.69.
new text end

new text begin (c) Providers that receive a rate increase under this section shall use 75 percent of
the additional revenue to increase wages and benefits and pay associated costs for all
employees, except for management fees, the administrator, and central office staff.
new text end

new text begin (d) For public employees, the increase for wages and benefits for certain staff is
available and pay rates must be increased only to the extent that they comply with laws
governing public employees' collective bargaining. Money received by a provider for pay
increases under this section may be used only for increases implemented on or after the
first day of the rate period in which the increase is available and must not be used for
increases implemented prior to that date.
new text end

new text begin (e) A copy of the provider's plan for complying with paragraph (c) must be made
available to all employees by giving each employee a copy or by posting a copy in an area
of the provider's operation to which all employees have access. If an employee does not
receive the adjustment, if any, described in the plan and is unable to resolve the problem
with the provider, the employee may contact the employee's union representative. If the
employee is not covered by a collective bargaining agreement, the employee may contact
the commissioner at a telephone number provided by the commissioner and included in
the provider's plan.
new text end

new text begin (f) The commissioner and each county agency shall take steps necessary to
implement the increases required by this section on the dates specified, and the increases
must be effective on the dates specified, regardless of the client's service authorization date
and notwithstanding the terms of any provider contract, service agreement, or schedule
that limits when a county may increase payment rates.
new text end

Sec. 13. new text begin APPROPRIATION.
new text end

new text begin $....... in the fiscal year beginning July 1, 2007, and $....... in the fiscal year beginning
July 1, 2008, are appropriated from the general fund to the commissioner of human
services to provide rate adjustments to low-payment rate nursing facilities under section 6.
new text end

ARTICLE 2

NURSING HOME MORATORIUM; PROPERTY REIMBURSEMENT

Section 1.

Minnesota Statutes 2006, section 144A.073, subdivision 4, is amended to
read:

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, projected to the
year 2000 by the state demographer, and according to items (i) to (iv):

(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;

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

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

(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;

(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; narrow corridors; 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; deleted text begin and
deleted text end

(9) new text begin the extent to which the applicant demonstrates the continuing need for nursing
facility care in the community and adjoining communities; and
new text end

new text begin (10) new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 2.

Minnesota Statutes 2006, section 256B.431, subdivision 17a, is amended to
read:

Subd. 17a.

Allowable interest expense.

(a) Notwithstanding Minnesota Rules, part
9549.0060, subparts 5, item A, subitems (1) and (3), and 7, item D, allowable interest
expense on debt shall include:

(1) interest expense on debt related to the cost of purchasing or replacing depreciable
equipment, excluding vehicles, not to exceed deleted text begin six deleted text end new text begin ten new text end percent of the total historical cost
of the project; and

(2) interest expense on debt related to financing or refinancing costs, including costs
related to points, loan origination fees, financing charges, legal fees, and title searches; and
issuance costs including bond discounts, bond counsel, underwriter's counsel, corporate
counsel, printing, and financial forecasts. Allowable debt related to items in this clause
shall not exceed seven percent of the total historical cost of the project. To the extent
these costs are financed, the straight-line amortization of the costs in this clause is not an
allowable cost; and

(3) interest on debt incurred for the establishment of a debt reserve fund, net of the
interest earned on the debt reserve fund.

(b) Debt incurred for costs under paragraph (a) is not subject to Minnesota Rules,
part 9549.0060, subpart 5, item A, subitem (5) or (6).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, section 256B.431, subdivision 17e, is amended to
read:

Subd. 17e.

Replacement-costs-new per bed limit effective deleted text begin July 1, 2001 deleted text end new text begin October
1, 2007 new text end .

Notwithstanding Minnesota Rules, part 9549.0060, subpart 11, item C, subitem
(2), for a total replacement, as defined in paragraph (f), authorized under section 144A.071
or 144A.073 after July 1, 1999, or any building project that is deleted text begin a relocation, renovation,
upgrading, or conversion completed on or after July 1, 2001 deleted text end new text begin eligible for reimbursement
under section 256B.434, subdivision 4f new text end , the replacement-costs-new per bed limit new text begin effective
October 1, 2007, new text end shall be deleted text begin $74,280 deleted text end new text begin $165,000 new text end per licensed bed in multiple-bed rooms,
deleted text begin $92,850 deleted text end new text begin $195,000 new text end per licensed bed in semiprivate rooms with a fixed partition separating
the resident beds, and deleted text begin $111,420 deleted text end new text begin $225,000 new text end per licensed bed in single rooms. Minnesota
Rules, part 9549.0060, subpart 11, item C, subitem (2), does not apply. These amounts
must be adjusted annually as specified in subdivision 3f, paragraph (a), beginning deleted text begin January
1, 2000 deleted text end new text begin January 1, 2008 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 4.

Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:

new text begin Subd. 19. new text end

new text begin Reimbursement for mandatory property loss. new text end

new text begin (a) Notwithstanding
the threshold in section 256B.431, subdivision 16, facilities that take action to come into
compliance with existing or expected requirements of the federal certification standards,
life safety code, or other building codes shall receive reimbursement for the property,
equipment, and technology costs associated with compliance if all of the following
circumstances are met:
new text end

new text begin (1) the costs associated with compliance were incurred on or after January 1, 2005;
new text end

new text begin (2) the costs were not otherwise reimbursed under subdivision 4f or section
144A.071 or 144A.073; and
new text end

new text begin (3) the total allowable cost reported under this subdivision during a reporting year
exceeds $50,000.
new text end

new text begin (b) Property rate increases for projects under this subdivision shall be calculated
according to the formula in subdivision 4f, with the exception that any equipment costs
under this subdivision shall be depreciated using the American Hospital Association
useful life guidelines.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 5. new text begin AUTHORIZATION FOR MORATORIUM EXCEPTION PROJECTS.
new text end

new text begin During fiscal year 2008, the commissioner of health may approve moratorium
exception projects under Minnesota Statutes, section 144A.073, for which the full
annualized state share of medical assistance costs does not exceed $10,000,000. During
fiscal year 2009, the commissioner of health may approve moratorium exception projects
under Minnesota Statutes, section 144A.073, for which the full annualized state share of
medical assistance costs does not exceed $10,000,000 less the amount approved during
the first year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end