HF 2826

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; eliminating the medical assistance rate equalization
requirement for nursing facilities; making conforming changes; amending
Minnesota Statutes 2004, sections 256.9657, subdivision 1; 256B.431,
subdivision 34; 256B.433, subdivision 3; 256B.48, subdivision 1.

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

Section 1.

Minnesota Statutes 2004, section 256.9657, subdivision 1, is amended to
read:

Subdivision 1.

Nursing home license surcharge.

(a) Effective July 1, 1993,
each non-state-operated nursing home licensed under chapter 144A shall pay to the
commissioner an annual surcharge according to the schedule in subdivision 4. The
surcharge shall be calculated as $620 per licensed bed. If the number of licensed beds
is reduced, the surcharge shall be based on the number of remaining licensed beds the
second month following the receipt of timely notice by the commissioner of human
services that beds have been delicensed. The nursing home must notify the commissioner
of health in writing when beds are delicensed. The commissioner of health must notify
the commissioner of human services within ten working days after receiving written
notification. If the notification is received by the commissioner of human services by
the 15th of the month, the invoice for the second following month must be reduced
to recognize the delicensing of beds. Beds on layaway status continue to be subject to
the surcharge. The commissioner of human services must acknowledge a medical care
surcharge appeal within 30 days of receipt of the written appeal from the provider.

(b) Effective July 1, 1994, the surcharge in paragraph (a) shall be increased to $625.

(c) Effective August 15, 2002, the surcharge under paragraph (b) shall be increased
to $990.

(d) Effective July 15, 2003, the surcharge under paragraph (c) shall be increased
to $2,815.

(e) The commissioner may reduce, and may subsequently restore, the surcharge
under paragraph (d) based on the commissioner's determination of a permissible surcharge.

(f) Between April 1, 2002, and August 15, 2004, a facility governed by this
subdivision may elect to assume full participation in the medical assistance program
by agreeing to comply with all of the requirements of the medical assistance program,
deleted text begin including the rate equalization law in section 256B.48, subdivision 1, paragraph (a), deleted text end and
all other requirements established in law or rule, and to begin intake of new medical
assistance recipients. Rates will be determined under Minnesota Rules, parts 9549.0010
to 9549.0080. Notwithstanding section 256B.431, subdivision 27, paragraph (i), rate
calculations will be subject to limits as prescribed in rule and law. Other than the
adjustments in sections 256B.431, subdivisions 30 and 32; 256B.437, subdivision 3,
paragraph (b), Minnesota Rules, part 9549.0057, and any other applicable legislation
enacted prior to the finalization of rates, facilities assuming full participation in medical
assistance under this paragraph are not eligible for any rate adjustments until the July 1
following their settle-up period.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
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Sec. 2.

Minnesota Statutes 2004, section 256B.431, subdivision 34, is amended to read:

Subd. 34.

Nursing facility rate increases beginning July 1, 2001, and July 1,
2002.

(a) For the rate years beginning July 1, 2001, and July 1, 2002, two-thirds of the
money resulting from the rate adjustment under subdivision 31 and one-half of the money
resulting from the rate adjustment under subdivisions 32 and 33 must be used to increase
the wages and benefits and pay associated costs of all employees except management fees,
the administrator, and central office staff.

(b) Money received by a facility as a result of the rate adjustments provided in
subdivisions 31 to 33, which must be used as provided in paragraph (a), must be used only
for wage and benefit increases implemented on or after July 1, 2001, or July 1, 2002,
respectively, and must not be used for wage increases implemented prior to those dates.

(c) Nursing facilities may apply for the portions of the rate adjustments under
subdivisions 31 to 33, which must be used as provided in paragraph (a). The application
must be made to the commissioner and contain a plan by which the nursing facility
will distribute to employees of the nursing facility the funds, which must be used as
provided in paragraph (a). 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. 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. The commissioner shall review the plan to
ensure that the rate adjustments are used as provided in paragraph (a). To be eligible, a
facility must submit its plan for the wage and benefit distribution by December 31 each
year. If a facility's plan for wage and benefit distribution is effective for its employees
after July 1 of the year that the funds are available, the portion of the rate adjustments,
which must be used as provided in paragraph (a), are effective the same date as its plan.

(d) A hospital-attached nursing facility may include costs in their distribution plan
for wages and benefits and associated costs of employees in the organization's shared
services departments, provided that:

(1) the nursing facility and the hospital share common ownership; and

(2) adjustments for hospital services using the diagnostic-related grouping payment
rates per admission under Medicare are less than three percent during the 12 months prior
to the effective date of these rate adjustments.

If a hospital-attached facility meets the qualifications in this paragraph, the difference
between the rate adjustments approved for nursing facility services and the rate increase
approved for hospital services may be permitted as a distribution in the hospital-attached
facility's plan regardless of whether the use of those funds is shown as being attributable to
employee hours worked in the nursing facility or employee hours worked in the hospital.

For the purposes of this paragraph, a hospital-attached nursing facility is one that
meets the definition under subdivision 2j, or, in the case of a facility reimbursed under
section 256B.434, met this definition at the time their last payment rate was established
under Minnesota Rules, parts 9549.0010 to 9549.0080, and this section.

(e) 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 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.

(f) deleted text begin Notwithstanding section 256B.48, subdivision 1, clause (a), deleted text end Upon the request
of a nursing facility, the commissioner may authorize the facility to raise per diem
rates for private-pay residents on July 1 by the amount anticipated to be required upon
implementation of the rate adjustments allowable under subdivisions 31 to 33. The
commissioner shall require any amounts collected under this paragraph, which must be
used as provided in paragraph (a), to be placed in an escrow account established for
this purpose with a financial institution that provides deposit insurance until the medical
assistance rate is finalized. The commissioner shall conduct audits as necessary to ensure
that:

(1) the amounts collected are retained in escrow until medical assistance rates are
increased to reflect the wage-related adjustment; and

(2) any amounts collected from private-pay residents in excess of the final medical
assistance rate are repaid to the private-pay residents with interest at the rate used by
the commissioner of revenue for the late payment of taxes and in effect on the date the
distribution plan is approved by the commissioner of human services.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
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Sec. 3.

Minnesota Statutes 2004, section 256B.433, subdivision 3, is amended to read:

Subd. 3.

Separate billings for therapy services.

Until new procedures are
developed under subdivision 4, payment for therapy services provided to nursing facility
residents that are billed separate from nursing facility's payment rate or according
to Minnesota Rules, parts 9505.0170 to 9505.0475, shall be subject to the following
requirements:

(a) The practitioner invoice must include, in a format specified by the commissioner,
the provider number of the nursing facility where the medical assistance recipient resides
regardless of the service setting.

(b) Nursing facilities that are related by ownership, control, affiliation, or
employment status to the vendor of therapy services shall report, in a format specified by
the commissioner, the revenues received during the reporting year for therapy services
provided to residents of the nursing facility. For rate years beginning on or after July 1,
1988, the commissioner shall offset the revenues received during the reporting year for
therapy services provided to residents of the nursing facility to the total payment rate
of the nursing facility by dividing the amount of offset by the nursing facility's actual
resident days. Except as specified in paragraphs (d) and (f), the amount of offset shall be
the revenue in excess of 108 percent of the cost removed from the cost report resulting
from the requirement of the commissioner to ensure the avoidance of double payments
as determined by section 256B.47. Therapy revenues that are specific to mental health
services shall be subject to this paragraph for rate years beginning after June 30, 1993.
In establishing a new base period for the purpose of setting operating cost payment rate
limits and rates, the commissioner shall not include the revenues offset in accordance
with this section.

(c) For rate years beginning on or after July 1, 1987, nursing facilities shall limit
charges in total to vendors of therapy services for renting space, equipment, or obtaining
other services during the rate year to 108 percent of the annualized cost removed from the
reporting year cost report resulting from the requirement of the commissioner to ensure
the avoidance of double payments as determined by section 256B.47. If the arrangement
for therapy services is changed so that a nursing facility is subject to this paragraph instead
of paragraph (b), the cost that is used to determine rent must be adjusted to exclude the
annualized costs for therapy services that are not provided in the rate year. The maximum
charges to the vendors shall be based on the commissioner's determination of annualized
cost and may be subsequently adjusted upon resolution of appeals. Mental health services
shall be subject to this paragraph for rate years beginning after June 30, 1993.

(d) The commissioner shall require reporting of all revenues relating to the provision
of therapy services and shall establish a therapy cost, as determined by section 256B.47, to
revenue ratio for the reporting year ending in 1986. For subsequent reporting years, the
ratio may increase five percentage points in total until a new base year is established under
paragraph (e). Increases in excess of five percentage points may be allowed if adequate
justification is provided to and accepted by the commissioner. Unless an exception is
allowed by the commissioner, the amount of offset in paragraph (b) is the greater of the
amount determined in paragraph (b) or the amount of offset that is imputed based on one
minus the lesser of (1) the actual reporting year ratio or (2) the base reporting year ratio
increased by five percentage points, multiplied by the revenues.

(e) The commissioner may establish a new reporting year base for determining
the cost to revenue ratio.

(f) If the arrangement for therapy services is changed so that a nursing facility is
subject to the provisions of paragraph (b) instead of paragraph (c), an average cost to
revenue ratio based on the ratios of nursing facilities that are subject to the provisions of
paragraph (b) shall be imputed for paragraph (d).

(g) This section does not allow unrelated nursing facilities to reorganize related
organization therapy services and provide services among themselves to avoid offsetting
revenues. Nursing facilities that are found to be in violation of this provision shall be
subject to the penalty requirements of section 256B.48, subdivision 1, paragraph deleted text begin (f) deleted text end new text begin (e) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end

Sec. 4.

Minnesota Statutes 2004, 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:

deleted text begin (a) 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.
deleted text end

deleted text begin (b) deleted text end new text begin (a) new text end (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.

deleted text begin (c) deleted text end new text begin (b) new text end 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.

deleted text begin (d) deleted text end new text begin (c) new text end Providing differential treatment on the basis of status with regard to public
assistance.

deleted text begin (e) deleted text end new text begin (d) new text end 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.

deleted text begin (f) deleted text end new text begin (e) new text end 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.

deleted text begin (g) deleted text end new text begin (f) new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
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