HF 1334

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:48am

A bill for an act
relating to human services; modifying medical assistance treatment of certain
life insurance policies; modifying rates nursing facilities may charge private
paying residents; authorizing payment for certain long-term care employer
health insurance costs; amending Minnesota Statutes 2008, sections 245A.11,
subdivision 2; 256B.441, by adding a subdivision; 256B.48, subdivision 1, by
adding a subdivision; proposing coding for new law in Minnesota Statutes,
chapter 256B.

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

Section 1.

Minnesota Statutes 2008, section 245A.11, subdivision 2, is amended to read:

Subd. 2.

Permitted single-family residential use.

new text begin (a) new text end Residential programs with a
licensed capacity of six or fewer persons shall be considered a permitted single-family
residential use of property for the purposes of zoning and other land use regulations,
except that a residential program whose primary purpose is to treat juveniles who have
violated criminal statutes relating to sex offenses or have been adjudicated delinquent on
the basis of conduct in violation of criminal statutes relating to sex offenses shall not
be considered a permitted use. This exception shall not apply to residential programs
licensed before July 1, 1995. Programs otherwise allowed under this subdivision shall not
be prohibited by operation of restrictive covenants or similar restrictions, regardless of
when entered into, which cannot be met because of the nature of the licensed program,
including provisions which require the home's occupants be related, and that the home
must be occupied by the owner, or similar provisions.

new text begin (b) Effective July 1, 2009, to June 30, 2011, the provisions of paragraph (a) shall
apply to residential programs with a licensed capacity of nine or fewer persons. Programs
established during this time period in accordance with this paragraph shall be deemed to
satisfy the requirements of paragraph (a) in subsequent years.
new text end

Sec. 2.

new text begin [256B.0565] LIFE INSURANCE POLICIES.
new text end

new text begin Subdivision 1. new text end

new text begin Option to retain policies. new text end

new text begin (a) The commissioner may allow
individuals applying for medical assistance on the basis of being aged, blind, or disabled,
the option of retaining their permanent life insurance policies as provided under this
section, if:
new text end

new text begin (1) the initial face value of the policy does not exceed $50,000;
new text end

new text begin (2) the cash value of the policy, including dividends, does not exceed $25,000 on the
date of application for medical assistance; and
new text end

new text begin (3) the policy has been in force for at least five years on the date of application for
medical assistance.
new text end

new text begin Permanent life insurance policies retained by applicants under this section shall be
excluded assets for purposes of determining an applicant's initial and continuing eligibility
for medical assistance.
new text end

new text begin (b) The cash surrender value of life insurance policies that applicants retain under
this section shall not be an asset for purposes of determining and setting off any of the
community spouse's allowances under section 256B.059.
new text end

new text begin (c) For purposes of this subdivision, an individual is applying for medical assistance
on the basis of being aged, blind, or disabled if the individual is seeking eligibility under
section 256B.055, subdivision 7; or 256B.057, subdivision 3, 3a, 3b, 4, 5, 6, or 9.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following definitions
apply.
new text end

new text begin (b) "Permanent life insurance policy," "life insurance policy," "policy," or similar
terms mean a nonvariable life insurance policy for which all of the following apply:
new text end

new text begin (1) the applicant is the sole owner of the policy;
new text end

new text begin (2) the applicant is the insured life under the policy;
new text end

new text begin (3) the contestability period has expired;
new text end

new text begin (4) the policy is unencumbered;
new text end

new text begin (5) all of the premiums and other sums due and owing to the insurer under the terms
of the policy have been paid in full or there is sufficient cash value to pay all premiums
and other charges due the insurer under the terms of the policy until the policy is paid in
full; and
new text end

new text begin (6) the applicant has the full and complete right to designate or change the
designation of beneficiaries under the policy and to do all things necessary to comply with
this section, and to do so without the consent or approval of any other person.
new text end

new text begin (c) "Insurer" means the issuer of the permanent life insurance policy or the issuer's
successors and assigns.
new text end

new text begin Subd. 3. new text end

new text begin Agreement with commissioner. new text end

new text begin (a) An applicant who wants to retain a
policy under this section must:
new text end

new text begin (1) enter into an irrevocable written agreement with the commissioner to designate
the commissioner as a beneficiary under the policy to the extent provided for in subdivision
5 and to do all things, take all actions, and sign all documents necessary to comply with
the requirements of this section; and
new text end

new text begin (2) execute and file with the insurer all of the forms and documents necessary to:
new text end

new text begin (i) irrevocably designate the commissioner as the primary beneficiary under the
policy upon the death of the applicant to the extent provided for in this section;
new text end

new text begin (ii) irrevocably waive the applicant's right to cash in, sell, assign, transfer, encumber,
or borrow against the policy or to use it as collateral or security for any purpose except
as otherwise provided for in this section;
new text end

new text begin (iii) direct the insurer to send the commissioner a copy of all notices it sends to the
owner of the policy that the policy will lapse, at the same time and in the same manner as
the policy requires the insurer to give such notices to the owner of the policy; and
new text end

new text begin (iv) direct the insurer to comply with paragraph (d).
new text end

new text begin (b) The agreement with the commissioner must be irrevocable and shall remain in
effect throughout the remainder of the applicant's life, regardless of whether the applicant
remains eligible for or enrolled in the medical assistance program after the date of the
agreement.
new text end

new text begin (c) The agreement must expressly provide that the applicant shall retain the right
to designate or change beneficiaries under the policy, other than the commissioner, with
respect to the portion of the death benefit not payable to the commissioner under this
section and the applicant's written agreement with the commissioner.
new text end

new text begin (d) The agreement must expressly provide that the applicant shall instruct the
insurer to pay all future premiums and other amounts due to the insurer under the terms
of the policy from the cash value of the policy, or to provide the applicant and the
commissioner with written notice that the cash value of the policy is not sufficient to do
so. This paragraph does not prohibit the insurer from applying payments received from
the beneficiary or any other person toward payment of premiums and other amounts
due to the insurer.
new text end

new text begin (e) The commissioner shall prepare a form of agreement for use under this section.
This form must contain the provisions in this section and make requirements as the
commissioner deems necessary or appropriate, consistent with this section.
new text end

new text begin Subd. 4. new text end

new text begin Procedure. new text end

new text begin (a) The applicant shall provide the county social services
agency with a full and complete copy of each of the policies the applicant wishes
to retain under this section, including a full and complete current designation of all
beneficiaries under the policies. The applicant shall execute a separate agreement with
the commissioner in triplicate for each policy. The applicant shall retain one copy. The
county agency shall retain one copy of the executed agreement in the applicant's file. The
applicant shall send the third copy of the executed agreement to the insurer, together with
all of the documents necessary to satisfy the requirements of this section, and shall include
the address of the county agency with these documents.
new text end

new text begin (b) The insurer shall make changes with regard to the policy provided for in this
section and the agreement, and shall notify the applicant and the county agency that the
insurer has done so or that the insurer is unable to do so. If the insurer does not provide
the county with notice that it has made all of the changes to the policy required by the
agreement and this section, the county agency shall require the applicant to cash in the
policy and apply the proceeds it receives according to this chapter.
new text end

new text begin (c) The county agency shall provide the insurer with the name, address, and
telephone number of an individual the insurer can contact upon the death of the applicant,
in order to request a written statement of the total amount of medical assistance paid for
the applicant which could be recovered under section 256B.15.
new text end

new text begin Subd. 5. new text end

new text begin State's share of death benefit. new text end

new text begin (a) Upon the death of the applicant, the
insurer shall pay the applicant's beneficiaries one-half of all amounts payable under the
terms of the permanent life insurance policy. The insurer shall also pay the applicant's
beneficiaries, at a later date, any amount owed the beneficiaries under paragraph (c). If a
beneficiary is the applicant's estate, any policy proceeds received by that beneficiary under
this paragraph and paragraph (c) are not subject to estate recovery under section 256B.15.
new text end

new text begin (b) Upon the death of the applicant, the insurer shall request a written statement of
the total amount of medical assistance paid for the applicant which could be recovered
under section 256B.15. The commissioner shall provide the written statement to the
insurer within 30 days after receipt of the request. If the commissioner fails to provide
a written statement within the 30-day period, all policy proceeds revert to named
beneficiaries other than the commissioner.
new text end

new text begin (c) Upon timely receipt of the written statement of the amount of medical assistance
paid requested under paragraph (b), the insurer shall pay the commissioner the lesser of
one-half of all amounts payable under the terms of the permanent life insurance policy or
the total amount of medical assistance paid for the applicant which could be recovered
under section 256B.15, whichever is less. If the amount of medical assistance paid for
the applicant is less than one-half of all amounts payable under the terms of the policy,
the insurer shall pay the difference between those two amounts to the other beneficiaries
under the policy according to the terms of the policy. Payments made under this paragraph
are exempt from section 72A.201, subdivision 4, clause (3).
new text end

new text begin (d) For purposes of this section and United States Code, title 42, section 1396p, a
recipient shall be deemed to have an interest under the laws of this state in the policies the
recipient retains under this section and the amounts payable under those policies to the
extent of the amounts payable to the commissioner under this subdivision. These policies
and amounts, described in this paragraph, must be part of the recipient's estate solely for
the purposes of United States Code, title 42, section 1396p, and recovery of medical
assistance as provided for by federal law and the laws of this state and shall be payable
directly to the commissioner for that purpose, and shall not be subject to payment of any
of the recipient's debts, charges, or obligations at law, in equity, or otherwise.
new text end

Sec. 3.

Minnesota Statutes 2008, section 256B.441, is amended by adding a
subdivision to read:

new text begin Subd. 59. new text end

new text begin Critical access nursing facilities. new text end

new text begin (a) The commissioner, in consultation
with the commissioner of health, shall designate qualifying nursing facilities as critical
access nursing facilities.
new text end

new text begin (b) A nursing facility may apply to be designated a critical access nursing facility
if it meets the following criteria:
new text end

new text begin (1) it is located more than 20 miles, defined as official mileage as reported by the
Minnesota Department of Transportation, from the nearest licensed and certified nursing
facility or hospital with swing beds;
new text end

new text begin (2) it is located in a county that would be in the lowest quartile of counties measured
in terms of the number of licensed and certified nursing facility beds per 1,000 residents
age 65 or older, if the nursing facility were to close; and
new text end

new text begin (3) it agrees to permanently delicense all beds in layaway status under section
144A.071, subdivision 4b, at the time of designation.
new text end

new text begin (c) The operating payment rates for a nursing facility designated as a critical access
nursing facility shall be the greater of:
new text end

new text begin (1) rates determined by the commissioner under this section, beginning October
1, 2009, without application of the phase-in period in subdivision 55. For purposes of
determining the operating payment rate limits in subdivision 50, the facility shall be
included in peer group 1; or
new text end

new text begin (2) operating payment rates determined by the commissioner for the rate year
beginning October 1, 2009, that are equal for a RUGs rate level with a weight of 1.00 to
the peer group 1 median operating payment rate for that RUGs level. The percentage
of operating payment rate to be case-mix adjusted shall be equal to the percentage of
allowable costs that are case-mix adjusted in the facility's most recent available and
audited annual statistical and cost report.
new text end

new text begin This paragraph applies only if it results in a rate increase.
new text end

new text begin (d) The commissioner shall request applications from eligible nursing facilities for
critical access nursing facility status designation within 60 days of enactment of this
subdivision and may request additional applications at any time.
new text end

new text begin (e) The commissioner of health shall give priority to a critical access nursing facility
for approval of nursing home moratorium exception proposals under section 144A.073.
new text end

Sec. 4.

Minnesota Statutes 2008, section 256B.48, subdivision 1, is amended to read:

Subdivision 1.

Prohibited practices.

A nursing facility is not eligible to receive
medical assistance payments unless it refrains from all of the following:

(a) new text begin Except as provided in subdivision 1d, new text end charging private paying residents rates for
similar services which exceed those which are approved by the state agency for medical
assistance recipients as determined by the prospective desk audit rate, except under the
following circumstances: the nursing facility may (1) charge private paying residents a
higher rate for a private room, and (2) charge for special services which are not included
in the daily rate if medical assistance residents are charged separately at the same rate for
the same services in addition to the daily rate paid by the commissioner. Services covered
by the payment rate must be the same regardless of payment source. Special services, if
offered, must be available to all residents in all areas of the nursing facility and charged
separately at the same rate. Residents are free to select or decline special services. Special
services must not include services which must be provided by the nursing facility in
order to comply with licensure or certification standards and that if not provided would
result in a deficiency or violation by the nursing facility. Services beyond those required
to comply with licensure or certification standards must not be charged separately as a
special service if they were included in the payment rate for the previous reporting year.
A nursing facility that charges a private paying resident a rate in violation of this clause
is subject to an action by the state of Minnesota or any of its subdivisions or agencies
for civil damages. A private paying resident or the resident's legal representative has
a cause of action for civil damages against a nursing facility that charges the resident
rates in violation of this clause. The damages awarded shall include three times the
payments that result from the violation, together with costs and disbursements, including
reasonable attorneys' fees or their equivalent. A private paying resident or the resident's
legal representative, the state, subdivision or agency, or a nursing facility may request a
hearing to determine the allowed rate or rates at issue in the cause of action. Within 15
calendar days after receiving a request for such a hearing, the commissioner shall request
assignment of an administrative law judge under sections 14.48 to 14.56 to conduct the
hearing as soon as possible or according to agreement by the parties. The administrative
law judge shall issue a report within 15 calendar days following the close of the hearing.
The prohibition set forth in this clause shall not apply to facilities licensed as boarding
care facilities which are not certified as skilled or intermediate care facilities level I or II
for reimbursement through medical assistance.

(b)(1) Charging, soliciting, accepting, or receiving from an applicant for admission
to the facility, or from anyone acting in behalf of the applicant, as a condition of
admission, expediting the admission, or as a requirement for the individual's continued
stay, any fee, deposit, gift, money, donation, or other consideration not otherwise required
as payment under the state plan;

(2) requiring an individual, or anyone acting in behalf of the individual, to loan
any money to the nursing facility;

(3) requiring an individual, or anyone acting in behalf of the individual, to promise
to leave all or part of the individual's estate to the facility; or

(4) requiring a third-party guarantee of payment to the facility as a condition of
admission, expedited admission, or continued stay in the facility.

Nothing in this paragraph would prohibit discharge for nonpayment of services in
accordance with state and federal regulations.

(c) Requiring any resident of the nursing facility to utilize a vendor of health care
services chosen by the nursing facility. A nursing facility may require a resident to use
pharmacies that utilize unit dose packing systems approved by the Minnesota Board of
Pharmacy, and may require a resident to use pharmacies that are able to meet the federal
regulations for safe and timely administration of medications such as systems with specific
number of doses, prompt delivery of medications, or access to medications on a 24-hour
basis. Notwithstanding the provisions of this paragraph, nursing facilities shall not restrict
a resident's choice of pharmacy because the pharmacy utilizes a specific system of unit
dose drug packing.

(d) Providing differential treatment on the basis of status with regard to public
assistance.

(e) Discriminating in admissions, services offered, or room assignment on the
basis of status with regard to public assistance or refusal to purchase special services.
Admissions discrimination shall include, but is not limited to:

(1) basing admissions decisions upon assurance by the applicant to the nursing
facility, or the applicant's guardian or conservator, that the applicant is neither eligible for
nor will seek public assistance for payment of nursing facility care costs; and

(2) engaging in preferential selection from waiting lists based on an applicant's
ability to pay privately or an applicant's refusal to pay for a special service.

The collection and use by a nursing facility of financial information of any applicant
pursuant to a preadmission screening program established by law shall not raise an
inference that the nursing facility is utilizing that information for any purpose prohibited
by this paragraph.

(f) Requiring any vendor of medical care as defined by section 256B.02, subdivision
7, who is reimbursed by medical assistance under a separate fee schedule, to pay any
amount based on utilization or service levels or any portion of the vendor's fee to the
nursing facility except as payment for renting or leasing space or equipment or purchasing
support services from the nursing facility as limited by section 256B.433. All agreements
must be disclosed to the commissioner upon request of the commissioner. Nursing
facilities and vendors of ancillary services that are found to be in violation of this provision
shall each be subject to an action by the state of Minnesota or any of its subdivisions or
agencies for treble civil damages on the portion of the fee in excess of that allowed by
this provision and section 256B.433. Damages awarded must include three times the
excess payments together with costs and disbursements including reasonable attorney's
fees or their equivalent.

(g) Refusing, for more than 24 hours, to accept a resident returning to the same
bed or a bed certified for the same level of care, in accordance with a physician's order
authorizing transfer, after receiving inpatient hospital services.

For a period not to exceed 180 days, the commissioner may continue to make
medical assistance payments to a nursing facility or boarding care home which is in
violation of this section if extreme hardship to the residents would result. In these cases
the commissioner shall issue an order requiring the nursing facility to correct the violation.
The nursing facility shall have 20 days from its receipt of the order to correct the violation.
If the violation is not corrected within the 20-day period the commissioner may reduce
the payment rate to the nursing facility by up to 20 percent. The amount of the payment
rate reduction shall be related to the severity of the violation and shall remain in effect
until the violation is corrected. The nursing facility or boarding care home may appeal the
commissioner's action pursuant to the provisions of chapter 14 pertaining to contested
cases. An appeal shall be considered timely if written notice of appeal is received by the
commissioner within 20 days of notice of the commissioner's proposed action.

In the event that the commissioner determines that a nursing facility is not eligible
for reimbursement for a resident who is eligible for medical assistance, the commissioner
may authorize the nursing facility to receive reimbursement on a temporary basis until the
resident can be relocated to a participating nursing facility.

Certified beds in facilities which do not allow medical assistance intake on July 1,
1984, or after shall be deemed to be decertified for purposes of section 144A.071 only.

Sec. 5.

Minnesota Statutes 2008, section 256B.48, is amended by adding a subdivision
to read:

new text begin Subd. 1d. new text end

new text begin Enhanced private pay rate. new text end

new text begin Notwithstanding the provisions of
subdivision 1, a nursing facility may charge private paying residents rates that exceed
those approved by the state agency for medical assistance recipients by the following
percentages:
new text end

new text begin (1) by five percent effective July 1, 2009;
new text end

new text begin (2) by ten percent effective July 1, 2010;
new text end

new text begin (3) by 15 percent effective July 1, 2011; and
new text end

new text begin (4) by 20 percent effective July 1, 2012.
new text end

new text begin Rates charged under this subdivision shall not exceed actual costs.
new text end

Sec. 6.

new text begin [256B.52] PAYMENT FOR LONG-TERM CARE EMPLOYER HEALTH
INSURANCE COSTS.
new text end

new text begin (a) The commissioner may negotiate with long-term care employers who respond
to a request for proposals to insure long-term care employees. The request for proposals
shall be issued by September 1, 2009. Employers shall be selected and insurance coverage
initiated by January 1, 2010. Within the limit of available appropriations, the commissioner
shall provide rate increases to selected employers to reimburse all or a portion of employer
health insurance costs. Rate increases under this section shall remain in effect as long as
the employer continues to expend the added revenue for qualifying purposes.
new text end

new text begin (b) The commissioner shall select employers who demonstrate the ability to provide
the most beneficial coverage, in terms of low premiums and other employee out-of-pocket
costs, at the lowest state cost, to the largest number of employees.
new text end

new text begin (c) Health insurance coverage reimbursed under this section must be at least
actuarially equivalent to a number three qualified plan, as described in section 62E.06,
subdivision 1.
new text end

new text begin (d) For the purposes of this section, long-term care employers are:
new text end

new text begin (1) nursing facilities reimbursed under section 256B.441;
new text end

new text begin (2) intermediate care facilities for persons with developmental disabilities
reimbursed under section 256B.5012;
new text end

new text begin (3) home and community-based waivered services for persons with developmental
disabilities or related conditions, including consumer-directed community supports, under
section 256B.501;
new text end

new text begin (4) home and community-based waivered services for the elderly, including
consumer-directed community supports, under section 256B.0915;
new text end

new text begin (5) waivered services under community alternatives for disabled individuals,
including consumer-directed community supports, under section 256B.49;
new text end

new text begin (6) community alternative care waivered services, including consumer-directed
community supports, under section 256B.49;
new text end

new text begin (7) traumatic brain injury waivered services, including consumer-directed
community supports, under section 256B.49;
new text end

new text begin (8) nursing services and home health services under section 256B.0625, subdivision
6a;
new text end

new text begin (9) personal care services and qualified professional supervision of personal care
services under section 256B.0625, subdivision 19a;
new text end

new text begin (10) private duty nursing services under section 256B.0625, subdivision 7;
new text end

new text begin (11) day training and habilitation services for adults with developmental disabilities
or related conditions under sections 252.40 to 252.46, including the additional cost of
rate adjustments on day training and habilitation services, provided as a social service
under section 256M.60;
new text end

new text begin (12) alternative care services under section 256B.0913;
new text end

new text begin (13) adult residential program grants under section 245.73;
new text end

new text begin (14) children's community-based mental health services grants and adult community
support and case management services grants under Minnesota Rules, parts 9535.1700
to 9535.1760;
new text end

new text begin (15) the group residential housing supplementary service rate under section 256I.05,
subdivision 1a;
new text end

new text begin (16) adult mental health integrated fund grants under section 245.4661;
new text end

new text begin (17) semi-independent living services (SILS) under section 252.275, including SILS
funding under county social services grants formerly funded under chapter 256I;
new text end

new text begin (18) 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 section 256.01, subdivision 2; and deaf and hard-of-hearing grants under sections
256C.233 and 256C.25; Laws 1985, First Special Session chapter 9, article 1; and Laws
1997, First Special Session chapter 5, section 20;
new text end

new text begin (19) 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 (20) physical therapy services under sections 256B.0625, subdivision 8, and
256D.03, subdivision 4;
new text end

new text begin (21) occupational therapy services under sections 256B.0625, subdivision 8a, and
256D.03, subdivision 4;
new text end

new text begin (22) speech-language therapy services under section 256D.03, subdivision 4, and
Minnesota Rules, part 9505.0390;
new text end

new text begin (23) respiratory therapy services under section 256D.03, subdivision 4, and
Minnesota Rules, part 9505.0295;
new text end

new text begin (24) adult rehabilitative mental health services under section 256B.0623;
new text end

new text begin (25) children's therapeutic services and support services under section 256B.0943;
new text end

new text begin (26) tier I chemical health services under chapter 254B;
new text end

new text begin (27) consumer support grants under section 256.476;
new text end

new text begin (28) family support grants under section 252.32;
new text end

new text begin (29) grants for case management services to persons with HIV or AIDS under
section 256.01, subdivision 19; and
new text end

new text begin (30) aging grants under sections 256.975 to 256.977, 256B.0917, and 256B.0928.
new text end