1.1                          A bill for an act 
  1.2             relating to human services; providing a five percent 
  1.3             rate increase for nursing facilities, intermediate 
  1.4             care facilities for persons with mental retardation, 
  1.5             and other programs; appropriating money; amending 
  1.6             Minnesota Statutes 2000, sections 256B.431, by adding 
  1.7             subdivisions; 256B.434, subdivision 4, by adding a 
  1.8             subdivision; 256B.501, by adding a subdivision. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 256B.431, is 
  1.11  amended by adding a subdivision to read: 
  1.12     Subd. 31.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
  1.13  1, 2001, AND JULY 1, 2002.] (a) For the rate years beginning 
  1.14  July 1, 2001, and July 1, 2002, the commissioner shall make 
  1.15  available to each nursing facility reimbursed under this section 
  1.16  or section 256B.434, licensed to provide residential services 
  1.17  for the physically handicapped under Minnesota Rules, parts 
  1.18  9570.2000 to 9570.3600, an adjustment equal to five percent of 
  1.19  the total operating payment rate.  The operating payment rates 
  1.20  in effect on June 30, 2001, and June 30, 2002, respectively, 
  1.21  shall include the adjustment in subdivision 2i, paragraph (c). 
  1.22     (b) Eighty percent of the adjustment must be used to 
  1.23  increase the wages and benefits, including health insurance, of 
  1.24  all employees except management fees, the administrator, and 
  1.25  central office staff and to pay associated costs for FICA, the 
  1.26  Medicare tax, workers' compensation premiums, and federal and 
  1.27  state unemployment insurance. 
  2.1      Money received by a facility as a result of the additional 
  2.2   rate increase provided under this paragraph shall be used only 
  2.3   for wage increases implemented on or after July 1, 2001, or July 
  2.4   1, 2002, respectively, and shall not be used for wage increases 
  2.5   implemented prior to those dates. 
  2.6      (c) Twenty percent of the adjustment may be used for other 
  2.7   operating costs. 
  2.8      (d) A nursing facility may apply for the 
  2.9   compensation-related payment rate adjustment calculated under 
  2.10  paragraph (b).  The application must be made to the commissioner 
  2.11  and contain a plan by which the nursing facility shall 
  2.12  distribute the compensation-related portion of the payment rate 
  2.13  adjustment to employees of the nursing facility.  For nursing 
  2.14  facilities in which the employees are represented by an 
  2.15  exclusive bargaining representative, an agreement negotiated and 
  2.16  agreed to by the employer and the exclusive bargaining 
  2.17  representative constitutes the plan.  A negotiated agreement may 
  2.18  constitute the plan only if the agreement is finalized after the 
  2.19  date of enactment of all increases for the rate year.  The 
  2.20  commissioner shall review the plan to ensure that the payment 
  2.21  rate adjustment per diem is used as provided in paragraph (b).  
  2.22  To be eligible, a facility must submit its plan for the 
  2.23  compensation distribution by December 31 each year.  If a 
  2.24  facility's plan for compensation distribution is effective for 
  2.25  its employees after July 1 of the year that the funds are 
  2.26  available, the payment rate adjustment per diem shall be 
  2.27  effective the same date as its plan. 
  2.28     (e) A copy of the approved distribution plan must be made 
  2.29  available to all employees.  This must be done by giving each 
  2.30  employee a copy or by posting it in an area of the nursing 
  2.31  facility to which all employees have access.  If an employee 
  2.32  does not receive the compensation adjustment described in the 
  2.33  facility's approved plan and is unable to resolve the problem 
  2.34  with the facility's management or through the employee's union 
  2.35  representative, the employee may contact the commissioner at an 
  2.36  address or telephone number provided by the commissioner and 
  3.1   included in the approved plan.  
  3.2      Sec. 2.  Minnesota Statutes 2000, section 256B.431, is 
  3.3   amended by adding a subdivision to read: 
  3.4      Subd. 32.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
  3.5   1, 2001, AND JULY 1, 2002.] (a) For the rate years beginning 
  3.6   July 1, 2001, and July 1, 2002, the commissioner shall make 
  3.7   available to each nursing facility reimbursed under this section 
  3.8   or section 256B.434, except for those facilities licensed to 
  3.9   provide residential services for the physically handicapped 
  3.10  under Minnesota Rules, parts 9570.2000 to 9570.3600, an 
  3.11  adjustment to the total operating payment rate.  For nursing 
  3.12  facilities reimbursed under this section or section 256B.434, 
  3.13  the payment rate increases provided in this subdivision for each 
  3.14  rate year shall be applied to each facility's operating payment 
  3.15  rate in effect on June 30 of the prior rate year.  For each 
  3.16  facility, total operating costs shall be separated into costs 
  3.17  that are compensation-related and all other costs.  
  3.18  Compensation-related costs include salaries, payroll taxes, and 
  3.19  fringe benefits for all employees, except management fees, the 
  3.20  administrator, and central office staff. 
  3.21     (b) For the rate year beginning July 1, 2001, the 
  3.22  commissioner shall make available: 
  3.23     (1) a rate increase for each case mix payment rate, of 
  3.24  which 80 percent must be used to increase the wages and 
  3.25  benefits, including health insurance, of all employees except 
  3.26  management fees, the administrator, and central office staff and 
  3.27  to pay associated costs for FICA, the Medicare tax, workers' 
  3.28  compensation premiums, and federal and state unemployment 
  3.29  insurance, to be calculated according to clauses (i) to (iii): 
  3.30     (i) the commissioner shall calculate the arithmetic mean of 
  3.31  the eleven June 30, 2001, operating rates for each facility; 
  3.32     (ii) the commissioner shall construct an array of nursing 
  3.33  facilities from highest to lowest, according to the arithmetic 
  3.34  mean calculated in clause (i).  A numerical rank shall be 
  3.35  assigned to each facility in the array.  The facility with the 
  3.36  highest mean shall be assigned a numerical rank of one.  The 
  4.1   facility with the lowest mean shall be assigned a numerical rank 
  4.2   equal to the total number of nursing facilities in the array.  
  4.3   All other facilities shall be assigned a numerical rank 
  4.4   according to their position in the array; and 
  4.5      (iii) the amount of the additional rate increase shall be 
  4.6   $2 plus an amount equal to $7.42 multiplied by the ratio of the 
  4.7   facility's numeric rank divided by the number of facilities in 
  4.8   the array; and 
  4.9      (2) 20 percent of the rate increase may be used for other 
  4.10  operating costs. 
  4.11     Money received by a facility as a result of the additional 
  4.12  rate increase provided under clause (1) shall be used only for 
  4.13  wage increases implemented on or after July 1, 2001, and shall 
  4.14  not be used for wage increases implemented prior to that date. 
  4.15     (c) For the rate year beginning July 1, 2002, the 
  4.16  commissioner shall make available: 
  4.17     (1) a rate increase for each case mix payment rate, of 
  4.18  which 80 percent must be used to increase the wages and 
  4.19  benefits, including health insurance, of all employees except 
  4.20  management fees, the administrator, and central office staff and 
  4.21  to pay associated costs for FICA, the Medicare tax, workers' 
  4.22  compensation premiums, and federal and state unemployment 
  4.23  insurance, to be calculated according to clauses (i) to (iii): 
  4.24     (i) the commissioner shall calculate the arithmetic mean of 
  4.25  the eleven June 30, 2002, operating rates for each facility; 
  4.26     (ii) the commissioner shall construct an array of nursing 
  4.27  facilities from highest to lowest, according to the arithmetic 
  4.28  mean calculated in clause (i).  A numerical rank shall be 
  4.29  assigned to each facility in the array.  The facility with the 
  4.30  highest mean shall be assigned a numerical rank of one.  The 
  4.31  facility with the lowest mean shall be assigned a numerical rank 
  4.32  equal to the total number of nursing facilities in the array.  
  4.33  All other facilities shall be assigned a numerical rank 
  4.34  according to their position in the array; and 
  4.35     (iii) the amount of the additional rate increase shall be 
  4.36  $2 plus an amount equal to $8.02 multiplied by the ratio of the 
  5.1   facility's numeric rank divided by the number of facilities in 
  5.2   the array; and 
  5.3      (2) 20 percent of the rate increase may be used for other 
  5.4   operating costs. 
  5.5      Money received by a facility as a result of the additional 
  5.6   rate increase provided under clause (1) shall be used only for 
  5.7   wage increases implemented on or after July 1, 2002, and shall 
  5.8   not be used for wage increases implemented prior to that date. 
  5.9      (d) The payment rate adjustment for each nursing facility 
  5.10  must be determined under clause (1) or (2): 
  5.11     (1) for each nursing facility that reports salaries for 
  5.12  registered nurses, licensed practical nurses, aides, orderlies, 
  5.13  and attendants separately, the commissioner shall determine the 
  5.14  payment rate adjustment using the categories specified in 
  5.15  paragraph (a) multiplied by the rate increases specified in 
  5.16  paragraph (b) or (c), and then dividing the resulting amount by 
  5.17  the nursing facility's actual resident days.  In determining the 
  5.18  amount of a payment rate adjustment for a nursing facility 
  5.19  reimbursed under section 256B.434, the commissioner shall 
  5.20  determine the proportions of the facility's rates that are 
  5.21  compensation-related costs and all other operating costs based 
  5.22  on the facility's most recent cost report; and 
  5.23     (2) for each nursing facility that does not report salaries 
  5.24  for registered nurses, licensed practical nurses, aides, 
  5.25  orderlies, and attendants separately, the payment rate 
  5.26  adjustment shall be computed using the facility's total 
  5.27  operating costs, separated into the categories specified in 
  5.28  paragraph (a) in proportion to the weighted average of all 
  5.29  facilities determined under clause (1), multiplied by the rate 
  5.30  increases specified in paragraph (b) or (c), and then dividing 
  5.31  the resulting amount by the nursing facility's actual resident 
  5.32  days. 
  5.33     (e) A nursing facility may apply for the 
  5.34  compensation-related payment rate adjustment calculated under 
  5.35  this subdivision.  The application must be made to the 
  5.36  commissioner and contain a plan by which the nursing facility 
  6.1   will distribute the compensation-related portion of the payment 
  6.2   rate adjustment to employees of the nursing facility.  For 
  6.3   nursing facilities in which the employees are represented by an 
  6.4   exclusive bargaining representative, an agreement negotiated and 
  6.5   agreed to by the employer and the exclusive bargaining 
  6.6   representative constitutes the plan.  For the second rate year, 
  6.7   a negotiated agreement constitutes the plan only if the 
  6.8   agreement is finalized after the date of enactment of all rate 
  6.9   increases for the second rate year.  The commissioner shall 
  6.10  review the plan to ensure that the payment rate adjustment per 
  6.11  diem is used as provided in paragraphs (b) and (c).  To be 
  6.12  eligible, a facility must submit its plan for the compensation 
  6.13  distribution by December 31 each year.  If a facility's plan for 
  6.14  compensation distribution is effective for its employees after 
  6.15  July 1 of the year that the funds are available, the payment 
  6.16  rate adjustment per diem shall be effective the same date as its 
  6.17  plan. 
  6.18     (f) A copy of the approved distribution plan must be made 
  6.19  available to all employees.  This must be done by giving each 
  6.20  employee a copy or by posting it in an area of the nursing 
  6.21  facility to which all employees have access.  If an employee 
  6.22  does not receive the compensation adjustment described in their 
  6.23  facility's approved plan and is unable to resolve the problem 
  6.24  with the facility's management or through the employee's union 
  6.25  representative, the employee may contact the commissioner at an 
  6.26  address or telephone number provided by the commissioner and 
  6.27  included in the approved plan. 
  6.28     Sec. 3.  Minnesota Statutes 2000, section 256B.434, 
  6.29  subdivision 4, is amended to read: 
  6.30     Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
  6.31  nursing facilities which have their payment rates determined 
  6.32  under this section rather than section 256B.431, the 
  6.33  commissioner shall establish a rate under this subdivision.  The 
  6.34  nursing facility must enter into a written contract with the 
  6.35  commissioner. 
  6.36     (b) A nursing facility's case mix payment rate for the 
  7.1   first rate year of a facility's contract under this section is 
  7.2   the payment rate the facility would have received under section 
  7.3   256B.431. 
  7.4      (c) A nursing facility's case mix payment rates for the 
  7.5   second and subsequent years of a facility's contract under this 
  7.6   section are the previous rate year's contract payment rates plus 
  7.7   an inflation adjustment.  The index for the inflation adjustment 
  7.8   must be based on the change in the Consumer Price Index-All 
  7.9   Items (United States City average) (CPI-U) forecasted by Data 
  7.10  Resources, Inc., as forecasted in the fourth quarter of the 
  7.11  calendar year preceding the rate year.  The inflation adjustment 
  7.12  must be based on the 12-month period from the midpoint of the 
  7.13  previous rate year to the midpoint of the rate year for which 
  7.14  the rate is being determined.  For the rate years beginning on 
  7.15  July 1, 1999, and July 1, 2000, July 1, 2001, and July 1, 2002, 
  7.16  this paragraph shall apply only to the property-related payment 
  7.17  rate.  In determining the amount of the property-related payment 
  7.18  rate adjustment under this paragraph, the commissioner shall 
  7.19  determine the proportion of the facility's rates that are 
  7.20  property-related based on the facility's most recent cost report.
  7.21     (d) The commissioner shall develop additional 
  7.22  incentive-based payments of up to five percent above the 
  7.23  standard contract rate for achieving outcomes specified in each 
  7.24  contract.  The specified facility-specific outcomes must be 
  7.25  measurable and approved by the commissioner.  The commissioner 
  7.26  may establish, for each contract, various levels of achievement 
  7.27  within an outcome.  After the outcomes have been specified the 
  7.28  commissioner shall assign various levels of payment associated 
  7.29  with achieving the outcome.  Any incentive-based payment cancels 
  7.30  if there is a termination of the contract.  In establishing the 
  7.31  specified outcomes and related criteria the commissioner shall 
  7.32  consider the following state policy objectives: 
  7.33     (1) improved cost effectiveness and quality of life as 
  7.34  measured by improved clinical outcomes; 
  7.35     (2) successful diversion or discharge to community 
  7.36  alternatives; 
  8.1      (3) decreased acute care costs; 
  8.2      (4) improved consumer satisfaction; 
  8.3      (5) the achievement of quality; or 
  8.4      (6) any additional outcomes proposed by a nursing facility 
  8.5   that the commissioner finds desirable. 
  8.6      Sec. 4.  Minnesota Statutes 2000, section 256B.434, is 
  8.7   amended by adding a subdivision to read: 
  8.8      Subd. 18.  [RATE INCREASES EFFECTIVE JULY 1, 
  8.9   2001.] Following the determination under this section, or any 
  8.10  other applicable section, of the payment rate for the rate year 
  8.11  beginning July 1, 2001, the case mix class A operating payment 
  8.12  rate for a nursing facility with more than 65 percent of all its 
  8.13  nursing home beds licensed to provide residential rehabilitative 
  8.14  services to young adults under Minnesota Rules, parts 9570.2000 
  8.15  to 9570.3400, shall be increased by ....... and the payment rate 
  8.16  for all other case mix classes shall be increased to the 
  8.17  modified case mix class A rate multiplied by the class weight 
  8.18  for that case mix class established in Minnesota Rules, part 
  8.19  9549.0058, subpart 3.  The increase provided by this subdivision 
  8.20  shall be included in the facility's total payment rate for 
  8.21  purposes of determining future rates under this section or any 
  8.22  other applicable section. 
  8.23     Sec. 5.  Minnesota Statutes 2000, section 256B.501, is 
  8.24  amended by adding a subdivision to read: 
  8.25     Subd. 14.  [ICF/MR RATE INCREASES BEGINNING OCTOBER 1, 
  8.26  2000, AND JANUARY 1, 2002.] (a) For the rate years beginning 
  8.27  October 1, 2000, and January 1, 2002, the commissioner shall 
  8.28  make available to each facility reimbursed under this section, 
  8.29  section 256B.5011, and Laws 1993, First Special Session chapter 
  8.30  1, article 4, section 11, an adjustment to the total operating 
  8.31  payment rate of five percent. 
  8.32     (b) Eighty percent of the adjustment shall be used to 
  8.33  increase the wages and benefits, including health insurance, of 
  8.34  all employees except administrative and central office employees 
  8.35  and to pay associated costs for FICA, Medicare tax, workers' 
  8.36  compensation premiums, and federal and state unemployment 
  9.1   insurance provided that this increase shall be used only for 
  9.2   wage increases implemented on or after the first day of the 
  9.3   fiscal year in which the increase is available, and shall not be 
  9.4   used for wage increases implemented prior to that date. 
  9.5      (c) Twenty percent of the adjustment may be used for other 
  9.6   operating costs. 
  9.7      (d) For each facility, the commissioner shall determine the 
  9.8   payment rate adjustment using the percentage specified in 
  9.9   paragraph (a) multiplied by the total operating payment rate in 
  9.10  effect on the last day of the prior rate year and then dividing 
  9.11  the resulting amount by the facility's actual resident days.  
  9.12  The total operating payment rate shall include the adjustment 
  9.13  provided in subdivision 12. 
  9.14     (e) Any facility whose payment rates are governed by 
  9.15  closure agreements, receivership agreements, or Minnesota Rules, 
  9.16  part 9553.0075, is not eligible for an adjustment otherwise 
  9.17  granted under this subdivision.  
  9.18     (f) A facility may apply for the compensation-related 
  9.19  payment rate adjustment calculated under paragraph (b).  The 
  9.20  application must be made to the commissioner and contain a plan 
  9.21  by which the facility will distribute the compensation-related 
  9.22  portion of the payment rate adjustment to employees of the 
  9.23  facility.  For facilities in which the employees are represented 
  9.24  by an exclusive bargaining representative, an agreement 
  9.25  negotiated and agreed to by the employer and the exclusive 
  9.26  bargaining representative constitutes the plan.  A negotiated 
  9.27  agreement may constitute the plan only if the agreement is 
  9.28  finalized after the date of enactment of all rate increases for 
  9.29  the rate year.  The commissioner shall review the plan to ensure 
  9.30  that the payment rate adjustment per diem is used as provided in 
  9.31  this subdivision.  To be eligible, a facility must submit its 
  9.32  plan for the compensation distribution by December 31, 2000, and 
  9.33  March 31, 2002, respectively.  If a facility's plan for 
  9.34  compensation distribution is effective for its employees after 
  9.35  the first day of the applicable rate year that the funds are 
  9.36  available, the payment rate adjustment per diem shall be 
 10.1   effective the same date as its plan. 
 10.2      (g) A copy of the approved distribution plan must be made 
 10.3   available to all employees.  This must be done by giving each 
 10.4   employee a copy or by posting it in an area of the facility to 
 10.5   which all employees have access.  If an employee does not 
 10.6   receive the compensation adjustment described in their 
 10.7   facility's approved plan and is unable to resolve the problem 
 10.8   with the facility's management or through the employee's union 
 10.9   representative, the employee may contact the commissioner at an 
 10.10  address or telephone number provided by the commissioner and 
 10.11  included in the approved plan. 
 10.12     Sec. 6.  [PROVIDER RATE INCREASES.] 
 10.13     (a) The commissioner shall increase reimbursement rates by 
 10.14  five percent each year of the biennium for the providers listed 
 10.15  in paragraph (b).  The increases shall be effective for services 
 10.16  rendered on or after July 1 of each year. 
 10.17     (b) The rate increases described in this section shall be 
 10.18  provided to home and community-based waivered services for 
 10.19  persons with mental retardation or related conditions under 
 10.20  Minnesota Statutes, section 256B.501; home and community-based 
 10.21  waivered services for the elderly under Minnesota Statutes, 
 10.22  section 256B.0915; waivered services under community 
 10.23  alternatives for disabled individuals under Minnesota Statutes, 
 10.24  section 256B.49; community alternative care waivered services 
 10.25  under Minnesota Statutes, section 256B.49; traumatic brain 
 10.26  injury waivered services under Minnesota Statutes, section 
 10.27  256B.49; nursing services and home health services under 
 10.28  Minnesota Statutes, section 256B.0625, subdivision 6a; personal 
 10.29  care services and nursing supervision of personal care services 
 10.30  under Minnesota Statutes, section 256B.0625, subdivision 19a; 
 10.31  private-duty nursing services under Minnesota Statutes, section 
 10.32  256B.0625, subdivision 7; day training and habilitation services 
 10.33  for adults with mental retardation or related conditions under 
 10.34  Minnesota Statutes, sections 252.40 to 252.46; alternative care 
 10.35  services under Minnesota Statutes, section 256B.0913; adult 
 10.36  residential program grants under Minnesota Rules, parts 
 11.1   9535.2000 to 9535.3000; adult and family community support 
 11.2   grants under Minnesota Rules, parts 9535.1700 to 9535.1760; 
 11.3   semi-independent living services under Minnesota Statutes, 
 11.4   section 252.275, including SILS funding under county social 
 11.5   services grants formerly funded under Minnesota Statutes, 
 11.6   chapter 256I; community support services for deaf and 
 11.7   hard-of-hearing adults with mental illness who use or wish to 
 11.8   use sign language as their primary means of communication; and 
 11.9   living skills training programs for persons with intractable 
 11.10  epilepsy who need assistance in the transition to independent 
 11.11  living. 
 11.12     (c) Providers that receive a rate increase under this 
 11.13  section shall use 80 percent of the additional revenue to 
 11.14  increase the wages and benefits, including health insurance, of 
 11.15  all employees other than the administrator and central office 
 11.16  staff and to pay associated costs for FICA, Medicare tax, 
 11.17  workers' compensation premiums, and federal and state 
 11.18  unemployment insurance; and 20 percent for other operations 
 11.19  costs.  For public employees, the portion of this increase 
 11.20  reserved to increase compensation for certain staff shall be 
 11.21  available and pay rates shall be increased only to the extent 
 11.22  that they comply with laws governing public employees collective 
 11.23  bargaining.  Money for wage increases received by a provider as 
 11.24  a result of the additional rate increase described in this 
 11.25  paragraph shall be used only for wage increases implemented on 
 11.26  or after the first day of the state fiscal year in which the 
 11.27  increase is available and shall not be used for wage increases 
 11.28  implemented prior to that date. 
 11.29     (d) A copy of the provider's plan for complying with 
 11.30  paragraph (c) must be made available to all employees.  This 
 11.31  must be done by giving each employee a copy or by posting it in 
 11.32  an area of the provider's operation to which all employees have 
 11.33  access.  If an employee does not receive the compensation 
 11.34  adjustment described in the plan and is unable to resolve the 
 11.35  problem with the provider, the employee may contact the 
 11.36  employee's union representative.  If the employee is not covered 
 12.1   by a collective bargaining agreement, the employee may contact 
 12.2   the commissioner at a telephone number provided by the 
 12.3   commissioner and included in the provider's plan. 
 12.4      Sec. 7.  [APPROPRIATION.] 
 12.5      $....... is appropriated from the general fund to the 
 12.6   commissioner of human services for the biennium beginning July 
 12.7   1, 2001, for the purposes of sections 1 to 6.