1.1                          A bill for an act 
  1.2             relating to human services; adding provisions for 
  1.3             health and continuing care related to medical 
  1.4             assistance and general assistance medical care, 
  1.5             long-term care, health plan regulations; making 
  1.6             technical and policy changes; appropriating money; 
  1.7             amending Minnesota Statutes 1994, sections 62D.04, 
  1.8             subdivision 5; 62N.10, subdivision 4; 62Q.075, 
  1.9             subdivision 2; 144.0722, by adding a subdivision; 
  1.10            144.572; 144.71, subdivisions 1 and 2; 144.72, 
  1.11            subdivisions 1 and 2; 144.73, subdivision 1; 144.74; 
  1.12            144A.04, by adding a subdivision; 144A.09, subdivision 
  1.13            1; 144A.20, subdivision 2; 145.61, subdivision 5; 
  1.14            148.235, by adding a subdivision; 148C.01, by adding a 
  1.15            subdivision; 148C.09, by adding a subdivision; 
  1.16            245.462, subdivision 4; 245.4871, subdivision 4; 
  1.17            245.94, subdivisions 2a and 3; 245.95, subdivision 2; 
  1.18            245.97, subdivision 6; 246.57, by adding a 
  1.19            subdivision; 253B.11, subdivision 2; 256.482, by 
  1.20            adding a subdivision; 256.73, subdivision 1, and by 
  1.21            adding a subdivision; 256.9355, subdivision 3; 
  1.22            256B.03, by adding a subdivision; 256B.056, 
  1.23            subdivisions 1 and 1a; 256B.0595, by adding 
  1.24            subdivisions; 256B.0627, subdivisions 1, as amended, 
  1.25            4, as amended, 5, as amended, and by adding a 
  1.26            subdivision; 256B.0913, subdivision 7, and by adding 
  1.27            subdivisions; 256B.0915, subdivision 1b, and by adding 
  1.28            subdivisions; 256B.15, by adding subdivisions; 
  1.29            256B.35, subdivision 1; 256B.37, subdivision 5; 
  1.30            256B.49, by adding a subdivision; 256B.501, by adding 
  1.31            subdivisions; 256B.69, by adding a subdivision; 
  1.32            256G.01, subdivision 3, and by adding subdivisions; 
  1.33            256G.02, subdivisions 4 and 6; 256G.03; 256G.06; 
  1.34            256G.07, subdivisions 1 and 2; 256G.08, subdivision 1; 
  1.35            256G.09, subdivision 2; 256G.10; 256I.04, subdivision 
  1.36            1; 256I.05, subdivision 1c, and by adding a 
  1.37            subdivision; 325F.71, subdivision 2; 327.14, 
  1.38            subdivision 8; 524.2-403; and 524.3-801; Minnesota 
  1.39            Statutes 1995 Supplement, sections 62Q.03, subdivision 
  1.40            8; 62Q.19, subdivisions 1 and 5; 62R.17; 144.122; 
  1.41            144.9503, subdivisions 6, 8, and 9; 144.9504, 
  1.42            subdivisions 2, 7, and 8; 144.9505, subdivision 4; 
  1.43            144A.071, subdivisions 3 and 4a; 148C.01, subdivisions 
  1.44            12 and 13; 148C.02, subdivisions 1 and 2; 148C.03, 
  1.45            subdivision 1; 148C.04, subdivisions 3, 4, and by 
  1.46            adding a subdivision; 148C.05, subdivision 1; 148C.06; 
  2.1             148C.11, subdivisions 1 and 3; 157.011, subdivision 1; 
  2.2             157.15, subdivisions 4, 5, 6, 9, 12, 13, 14, and by 
  2.3             adding subdivisions; 157.16; 157.17, subdivision 2; 
  2.4             157.20, subdivision 1, and by adding a subdivision; 
  2.5             157.21; 252.27, subdivision 2a; 256.045, subdivision 
  2.6             3; 256.969, subdivisions 1, 2b, 9, and 10; 256B.055, 
  2.7             subdivision 12; 256B.0575; 256B.0595, subdivisions 1, 
  2.8             2, 3, and 4; 256B.0625, subdivisions 17, 19a, and 30; 
  2.9             256B.0628, subdivision 2; 256B.0913, subdivisions 5 
  2.10            and 15a; 256B.0915, subdivisions 3 and 3a; 256B.093, 
  2.11            subdivision 3; 256B.15, subdivision 5; 256B.431, 
  2.12            subdivision 25; 256B.432, subdivision 2; 256B.434, 
  2.13            subdivision 10; 256B.49, subdivisions 6 and 7; 
  2.14            256B.501, subdivisions 5b and 5c; 256B.69, 
  2.15            subdivisions 3a, 4, 5b, 6, and 21; 256D.02, 
  2.16            subdivision 12a; 256D.03, subdivision 4; 256D.045; and 
  2.17            256I.04, subdivisions 2b and 3; Laws 1995, chapter 
  2.18            207, article 1, section 2, subdivision 4; proposing 
  2.19            coding for new law in Minnesota Statutes, chapters 
  2.20            62J; 144; 145; 252; 252B; 256; 256B; and 299A; 
  2.21            repealing Minnesota Statutes 1994, sections 144.691, 
  2.22            subdivision 4; 146.14; and 146.20; Minnesota Statutes 
  2.23            1995 Supplement, sections 157.03; 157.15, subdivision 
  2.24            2; 157.18; 157.19; 256B.15, subdivision 5; 256B.69, 
  2.25            subdivision 4a; 256G.05, subdivision 1; and 256G.07, 
  2.26            subdivision 3a; Minnesota Rules, part 9505.5230. 
  2.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.28                             ARTICLE 1 
  2.29                           APPROPRIATIONS 
  2.30  Section 1.  [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 
  2.31     The sums shown in the columns marked "APPROPRIATIONS" are 
  2.32  appropriated from the general fund, or any other fund named, to 
  2.33  the agencies and for the purposes specified in the following 
  2.34  sections of this article, to be available for the fiscal years 
  2.35  indicated for each purpose.  The figures "1996" and "1997" where 
  2.36  used in this article, mean that the appropriation or 
  2.37  appropriations listed under them are available for the fiscal 
  2.38  year ending June 30, 1996, or June 30, 1997, respectively.  
  2.39  Where a dollar amount appears in parentheses, it means a 
  2.40  reduction of an appropriation.  
  2.41                          SUMMARY BY FUND
  2.42                                                      BIENNIAL
  2.43                            1996          1997           TOTAL
  2.44  General           $ (121,000,000) $ (56,710,000) $(177,710,000)
  2.45  State Government
  2.46  Special Revenue           50,000        300,000        350,000
  2.47  TOTAL             $ (120,950,000) $ (56,410,000) $(177,360,000)
  2.48                                             APPROPRIATIONS 
  2.49                                         Available for the Year 
  2.50                                             Ending June 30 
  2.51                                            1996         1997 
  3.1   Sec. 2.  COMMISSIONER OF 
  3.2   HUMAN SERVICES 
  3.3   Subdivision 1.  Total 
  3.4   Appropriation                       (121,000,000)   (59,190,000)
  3.5   This reduction is taken from the 
  3.6   appropriation in Laws 1995, chapter 
  3.7   207, article 1, section 2. 
  3.8   The amounts that are added to or 
  3.9   reduced from the appropriation for each 
  3.10  program are specified in the following 
  3.11  subdivisions. 
  3.12  [DHS SPENDING CAP.] The 1998-1999 
  3.13  general fund spending in the department 
  3.14  of human services is limited to 
  3.15  $2,602,561,000 in fiscal year 1998 and 
  3.16  $2,823,204,000 in fiscal year 1999.  
  3.17  Policy changes made to meet this 
  3.18  spending cap will include the effects 
  3.19  on both revenues and expenditures.  
  3.20  Changes from end of session revenue 
  3.21  estimates shall be counted against this 
  3.22  expenditures limit.  Expenditures in 
  3.23  the department may exceed these 
  3.24  estimates only if forecast caseloads 
  3.25  increase.  After consultation with the 
  3.26  legislature, the commissioner of 
  3.27  finance may also adjust these limits to 
  3.28  recognize any errors or omissions in 
  3.29  the workpapers used to generate the 
  3.30  figure.  
  3.31  Subd. 2.  Life Skills 
  3.32  Self-Sufficiency 
  3.33      (3,462,000)        90,000
  3.34  The amounts that may be spent from this 
  3.35  appropriation for each purpose are as 
  3.36  follows: 
  3.37  (a) Chemical Dependency
  3.38  Consolidated Treatment
  3.39      (3,462,000)    (1,346,000)
  3.40  (b) Deaf and Hard-of-Hearing 
  3.41  Services Grants
  3.42         -0-            100,000
  3.43  (c) Community Social Services Grants
  3.44         -0-             36,000
  3.45  (d) Aging Grants
  3.46         -0-          1,050,000
  3.47  (e) Administration and Other Grants
  3.48         -0-            250,000 
  3.49  [DEAF AND HARD-OF-HEARING PROGRAMS.] Of 
  3.50  this appropriation, $100,000 in fiscal 
  3.51  year 1997 is for a grant to a nonprofit 
  3.52  agency that is currently serving deaf 
  4.1   and hard-of-hearing adults with mental 
  4.2   illness through residential programs 
  4.3   and supported housing outreach 
  4.4   activities.  The grant must be used to 
  4.5   expand the services provided by the 
  4.6   nonprofit agency to include community 
  4.7   support services for deaf and 
  4.8   hard-of-hearing adults with mental 
  4.9   illness.  This appropriation shall not 
  4.10  become part of the base for the 
  4.11  1998-1999 biennial budget. 
  4.12  [ADULT DAY CARE.] Of this 
  4.13  appropriation, $250,000 in fiscal year 
  4.14  1997 is for grants to counties to 
  4.15  expand or upgrade adult day care 
  4.16  services and adult day care 
  4.17  facilities.  This appropriation is 
  4.18  available until expended but shall not 
  4.19  become part of the base appropriation 
  4.20  for the biennium beginning July 1, 
  4.21  1997.  The commissioner shall 
  4.22  distribute grants to counties outside 
  4.23  the metropolitan area where there is a 
  4.24  need for expanded or improved services, 
  4.25  facilities, or other capital assets, 
  4.26  including vans for transporting 
  4.27  clients, and the commissioner shall 
  4.28  require a ten percent local match from 
  4.29  the adult day care agency.  The county 
  4.30  shall award grants to nonprofit or 
  4.31  loans to for-profit adult day care 
  4.32  agencies in order for the agency to 
  4.33  physically upgrade the facility, which 
  4.34  will result in the expansion of the 
  4.35  number of clients served in adult day 
  4.36  care, expand the type of services 
  4.37  offered, or enable programs to service 
  4.38  persons with greater needs.  For-profit 
  4.39  adult day care agencies eligible for 
  4.40  funds under this section receive funds 
  4.41  as a loan.  If a county elects to 
  4.42  provide a loan to a for-profit agency, 
  4.43  the county shall make provisions for 
  4.44  the repayment of the loan within five 
  4.45  years, and redistribute the funds for 
  4.46  additional expansion or upgrading.  A 
  4.47  grant or loan to an adult day care 
  4.48  nonprofit or for-profit agency, 
  4.49  respectively, may not exceed $10,000.  
  4.50  These funds shall not be used to pay 
  4.51  for service costs. 
  4.52  [SENIOR PROGRAMS.] For fiscal year 
  4.53  1997, of this appropriation, $150,000 
  4.54  is for volunteer programs for retired 
  4.55  senior citizens established under 
  4.56  Minnesota Statutes, section 256.9753, 
  4.57  $150,000 is for the foster grandparent 
  4.58  program established under Minnesota 
  4.59  Statutes, section 256.976, and $150,000 
  4.60  is for the senior companion program 
  4.61  established under Minnesota Statutes, 
  4.62  section 256.977.  
  4.63  [SENIOR NUTRITION PROGRAM.] Of this 
  4.64  appropriation, $600,000 in fiscal year 
  4.65  1997 is for senior nutrition programs 
  4.66  under Minnesota Statutes, section 
  4.67  256.9750.  Not less than $400,000 of 
  4.68  this appropriation shall be used for 
  5.1   congregate dining sites and 
  5.2   home-delivered meals, and not more than 
  5.3   $200,000 shall be used for nutritional 
  5.4   support services.  
  5.5   Subd. 3.  Children's Program             -0-          2,400,000
  5.6   The amounts that may be spent from this 
  5.7   appropriation for each purpose are as 
  5.8   follows: 
  5.9   (a) Subsidized Adoption Grants
  5.10         -0-          1,500,000
  5.11  (b) Other Families With Children 
  5.12  Services Administration 
  5.13         -0-            900,000
  5.14  [SOCIAL SERVICES INFORMATION SYSTEM.] 
  5.15  Of this appropriation, $850,000 in 
  5.16  fiscal year 1997 is for the social 
  5.17  services information system.  This 
  5.18  appropriation shall not become part of 
  5.19  the base for the 1998-1999 biennial 
  5.20  budget. 
  5.21  [CHILD WELFARE TECHNOLOGY GRANT.] Of 
  5.22  this appropriation, $50,000 is for 
  5.23  purposes of developing an integrated 
  5.24  child welfare computer system to 
  5.25  connect tribal social services, 
  5.26  counties, nonprofit organizations, and 
  5.27  state agencies that are involved with 
  5.28  child welfare issues, including 
  5.29  adoption, foster care, and out-of-home 
  5.30  placement issues.  The appropriation 
  5.31  will be provided to the commissioner 
  5.32  when the commissioner applies for and 
  5.33  receives a technology grant through the 
  5.34  United States Department of Commerce, 
  5.35  Division of National Technology 
  5.36  Information Administration, to develop 
  5.37  and implement the child welfare 
  5.38  network.  This $50,000 in state funding 
  5.39  is part of the 50 percent match that is 
  5.40  necessary in order to be eligible for 
  5.41  the federal technology grant. 
  5.42  Subd. 4.  Economic Self-Sufficiency
  5.43  General
  5.44     (13,668,000)   (14,350,000)
  5.45  The amounts that may be spent from this 
  5.46  appropriation for each purpose are as 
  5.47  follows: 
  5.48  (a) AFDC Grants              
  5.49     (13,196,000)   (16,000,000)
  5.50  (b) General Assistance Grants
  5.51         878,000      2,593,000
  5.52  (c) Minnesota Supplemental Aid
  5.53        (262,000)      (328,000)
  6.1   (d) Minnesota Family Investment
  6.2   Plan (MFIP) Grants
  6.3          -0-             64,000
  6.4   (e) Child Care Fund Entitlement Grants
  6.5       (1,258,000)    (1,321,000)
  6.6   (f) Administration and Other Grants
  6.7          170,000        642,000
  6.8   [RESIDENCY REQUIREMENT ADMINISTRATIVE 
  6.9   COSTS.] (a) Of this appropriation, 
  6.10  $225,000 in fiscal year 1997 is to 
  6.11  reimburse the counties for the verified 
  6.12  administrative costs of implementing 
  6.13  the 30-day residency requirement in the 
  6.14  general assistance and general 
  6.15  assistance medical care programs. 
  6.16  (b) The commissioner of finance shall 
  6.17  include in the department of human 
  6.18  services biennial budget recommendation 
  6.19  for the 1998-1999 biennium an 
  6.20  appropriation sufficient to reimburse 
  6.21  the counties for the verified 
  6.22  administrative costs of implementing 
  6.23  the 30-day residency requirement in the 
  6.24  medical assistance, aid to families 
  6.25  with dependent children, general 
  6.26  assistance, and general assistance 
  6.27  medical care programs. 
  6.28  [COMBINED MANUAL PRODUCTION COSTS.] For 
  6.29  the biennium ending June 30, 1997, the 
  6.30  commissioner may increase the fee 
  6.31  charged to, and may retain money 
  6.32  received from, individuals and private 
  6.33  entities in order to recover the 
  6.34  difference between the costs of 
  6.35  producing the department of human 
  6.36  services combined manual and the 
  6.37  subsidized price charged to individuals 
  6.38  and private entities on January 1, 
  6.39  1996.  This provision does not apply to 
  6.40  government agencies and nonprofit 
  6.41  agencies serving the legal or social 
  6.42  service needs of clients. 
  6.43  Subd. 5.  Health Care 
  6.44  General
  6.45    (103,430,000)   (47,247,000)
  6.46  The amounts that may be spent from this 
  6.47  appropriation for each purpose are as 
  6.48  follows: 
  6.49  (a) Group Residential Housing Grants
  6.50      (4,562,000)    (3,874,000)
  6.51  (b) MA Long-Term Care Facilities
  6.52     (24,640,000)    (3,231,000)
  6.53  (c) MA Long-Term Care Waivers
  6.54  and Home Care
  7.1       (5,945,000)     2,422,000 
  7.2   (d) MA Managed Care and 
  7.3   Fee-for-Service
  7.4       (3,386,000)    (2,732,000)
  7.5   (e) General Assistance Medical Care
  7.6      (65,367,000)   (47,276,000)
  7.7   (f) Administration and Other Grants
  7.8          470,000        982,000
  7.9   [NEW ICF/MR.] A newly constructed or 
  7.10  newly established intermediate care 
  7.11  facility for persons with mental 
  7.12  retardation that is developed and 
  7.13  financed during fiscal year 1997 shall 
  7.14  not be subject to the equity 
  7.15  requirements in Minnesota Statutes, 
  7.16  section 256B.501, subdivision 11, 
  7.17  paragraph (d), or Minnesota Rules, part 
  7.18  9553.0060, subpart 3, item F, provided 
  7.19  that the provider's interest rate does 
  7.20  not exceed the interest rate available 
  7.21  through state agency tax exempt 
  7.22  financing. 
  7.23  [ICF/MR RECEIVERSHIP.] If a facility 
  7.24  which is in receivership under 
  7.25  Minnesota Statutes, section 245A.12 or 
  7.26  245A.13, is sold during fiscal year 
  7.27  1997 to an unrelated organization:  (1) 
  7.28  the facility shall be considered a 
  7.29  newly established facility for rate 
  7.30  setting purposes notwithstanding any 
  7.31  provisions to the contrary in Minnesota 
  7.32  Statutes, section 256B.501, subdivision 
  7.33  11; and (2) the facility's historical 
  7.34  basis for the physical plant, land, and 
  7.35  land improvements for each facility 
  7.36  must not exceed the prior owner's 
  7.37  aggregate historical basis for these 
  7.38  same assets for each facility.  The 
  7.39  allocation of the purchase price 
  7.40  between land, land improvements, and 
  7.41  physical plant shall be based on the 
  7.42  real estate appraisal using the 
  7.43  depreciated replacement cost method. 
  7.44  [ICF/MR RATE EXEMPTION.] If the 
  7.45  commissioner of human services is 
  7.46  unable to complete the rulemaking 
  7.47  revisions to the ICF/MR reimbursement 
  7.48  rule by September 30, 1996, for the 
  7.49  rate year beginning October 1, 1996, 
  7.50  the commissioner shall exempt ICF/MR 
  7.51  facilities from reductions to the 
  7.52  payment rates under Minnesota Statutes, 
  7.53  section 256B.501, subdivision 5b, 
  7.54  paragraph (d), clause (6), if the 
  7.55  facility:  (1) has had a settle-up 
  7.56  payment rate established in the 
  7.57  reporting year preceding the rate year 
  7.58  for the one-time rate adjustment; (2) 
  7.59  is a newly established facility; (3) is 
  7.60  an A to B conversion under the 
  7.61  reimbursement rule; (4) has a payment 
  8.1   rate subject to a community conversion 
  8.2   project under Minnesota Statutes, 
  8.3   section 252.292; (5) has a payment rate 
  8.4   established under Minnesota Statutes, 
  8.5   section 245A.12 or 245A.13; or (6) is a 
  8.6   facility created by the relocation of 
  8.7   more than 25 percent of the capacity of 
  8.8   a related facility during the reporting 
  8.9   year. 
  8.10  [COUNTY WAIVERED SERVICES RESERVE.] 
  8.11  Notwithstanding the provisions of 
  8.12  Minnesota Statutes, section 256B.092, 
  8.13  subdivision 4, and Minnesota Rules, 
  8.14  part 9525.1830, subpart 2, the 
  8.15  commissioner may approve written 
  8.16  procedures and criteria for the 
  8.17  allocation of home- and community-based 
  8.18  waivered services funding for persons 
  8.19  with mental retardation or related 
  8.20  conditions which enables a county to 
  8.21  maintain a reserve resource account.  
  8.22  The reserve resource account may not 
  8.23  exceed five percent of the county 
  8.24  agency's total annual allocation of 
  8.25  home- and community-based waivered 
  8.26  services funds.  The reserve may be 
  8.27  utilized to ensure the county's ability 
  8.28  to meet the changing needs of current 
  8.29  recipients, to ensure the health and 
  8.30  safety needs of current recipients, or 
  8.31  to provide short-term emergency 
  8.32  intervention care to eligible waiver 
  8.33  recipients. 
  8.34  [PREADMISSION SCREENING TRANSFER.] 
  8.35  Effective the day following final 
  8.36  enactment, up to $40,000 of the 
  8.37  appropriation for preadmission 
  8.38  screening and alternative care for 
  8.39  fiscal year 1996 may be transferred to 
  8.40  the health care administration account 
  8.41  to pay the state's share of county 
  8.42  claims for conducting nursing home 
  8.43  assessments for persons with mental 
  8.44  illness or mental retardation as 
  8.45  required by Public Law Number 100-203. 
  8.46  [SERVICE ALLOWANCE TRANSFER.] For the 
  8.47  fiscal year ending June 30, 1997, the 
  8.48  commissioner may transfer $848,000 from 
  8.49  the medical assistance grants account 
  8.50  to the alternative care grants account 
  8.51  for allocation as service allowances to 
  8.52  counties under Minnesota Statutes 1995 
  8.53  Supplement, section 256B.0913, 
  8.54  subdivision 15. 
  8.55  [DEMONSTRATION PROJECTS.] Of this 
  8.56  appropriation, $342,000 in fiscal year 
  8.57  1997 is for actuarial studies of mental 
  8.58  health services covered by state 
  8.59  prepaid health plans and for 
  8.60  evaluations of county joint purchaser 
  8.61  demonstration projects and of 
  8.62  developmental disabilities pilot 
  8.63  projects authorized under Laws 1995, 
  8.64  chapter 207, article 8, section 42. 
  8.65  [HIV/AIDS DRUG REIMBURSEMENT PROGRAM.] 
  8.66  Of this appropriation, $150,000 in 
  9.1   fiscal year 1997 is for the HIV/AIDS 
  9.2   drug reimbursement program and shall be 
  9.3   added to federal funds available for 
  9.4   that program. 
  9.5   [ICF/MR ALTERNATIVE RATE STRUCTURE.] 
  9.6   The commissioner, in conjunction with 
  9.7   ICF/MR service providers, shall present 
  9.8   to the legislature by January 31, 1997, 
  9.9   recommendations for an alternative rate 
  9.10  structure that recognizes the small 
  9.11  size and individual needs of ICFs/MR.  
  9.12  The system proposed must recognize 
  9.13  costs incurred, must not penalize 
  9.14  facilities converted since 1990 as part 
  9.15  of the A to B conversion project, and 
  9.16  must reimburse the costs associated 
  9.17  with federal active treatment 
  9.18  standards.  As part of developing these 
  9.19  recommendations the commissioner shall 
  9.20  also examine issues related to the 
  9.21  relative size and cost of these 
  9.22  facilities and shall develop 
  9.23  recommendations regarding whether 
  9.24  allowing the development of larger 
  9.25  facilities can be a high-quality, 
  9.26  cost-efficient service option. 
  9.27  [NURSING FACILITY RECEIVERSHIP COSTS.] 
  9.28  Notwithstanding the provisions of 
  9.29  Minnesota Statutes, section 256B.495, 
  9.30  for a nursing facility where the 
  9.31  closure of the facility after resident 
  9.32  relocation and the loss of the nursing 
  9.33  home beds will significantly decrease 
  9.34  the regional average number of 
  9.35  long-term care beds per thousand 
  9.36  elderly over 65 in the year 2000 to 
  9.37  within 11 beds of the hardship standard 
  9.38  as referenced in the study.  The 1993 
  9.39  Distribution of Nursing Home Beds in 
  9.40  Minnesota, prepared by the Interagency 
  9.41  Long-Term Care Planning committee in 
  9.42  March 1994, the commissioner of human 
  9.43  services shall extend the period to 
  9.44  recover receivership costs incurred 
  9.45  during a department of health 
  9.46  receivership of a nursing home that 
  9.47  began on September 15, 1995, over a 
  9.48  period of not more than 12 months, 
  9.49  ending June 30, 1997.  The extension of 
  9.50  time for recovery is contingent on the 
  9.51  following considerations:  
  9.52  (1) the purchaser of the facility has 
  9.53  demonstrated to the satisfaction of the 
  9.54  commissioners of health and human 
  9.55  services that the facility will be 
  9.56  operated in accordance with the 
  9.57  reimbursement system.  The purchaser 
  9.58  must provide documentation to verify 
  9.59  access to funds to purchase the 
  9.60  facility, access to appropriate lines 
  9.61  of credit to cover anticipated and 
  9.62  unanticipated operating costs, cash 
  9.63  flow projections which provide a 
  9.64  realistic estimate of expenses and 
  9.65  income, and other financial information 
  9.66  that might be required by the 
  9.67  commissioners to determine whether a 
  9.68  license should be granted; 
 10.1   (2) the cost of continued operation 
 10.2   under the receivership while residents 
 10.3   are relocated has been estimated to 
 10.4   equal or exceed $500,000; 
 10.5   (3) the purchaser has demonstrated that 
 10.6   the purchase of the facility and the 
 10.7   ongoing operation of the facility will 
 10.8   not occur without the decision to 
 10.9   forego the recovery of the receivership 
 10.10  funds, that the former owner of the 
 10.11  facility does not financially benefit 
 10.12  by the sale of the facility, and that 
 10.13  the entities with financial interests 
 10.14  in the nursing home land and building 
 10.15  have taken substantial losses; and 
 10.16  (4) the closure of the facility will 
 10.17  require the relocation of a majority of 
 10.18  residents to facilities in different 
 10.19  counties. 
 10.20  [TEFRA CRITERIA MODIFICATIONS.] The 
 10.21  commissioner shall report to the 
 10.22  legislature by February 1, 1997, on the 
 10.23  number of children found eligible for 
 10.24  medical assistance under the TEFRA 
 10.25  option as a result of the modifications 
 10.26  in Minnesota Statutes, section 
 10.27  256B.055, subdivision 12, paragraph 
 10.28  (e), adopted in this chapter.  The 
 10.29  report must include information on the 
 10.30  medical condition of the children found 
 10.31  eligible and on the services provided 
 10.32  to them.  The report must include 
 10.33  recommendations on any changes in these 
 10.34  criteria developed in consultation with 
 10.35  interested family, client, provider, 
 10.36  and county representatives. 
 10.37  [TEFRA DENIALS.] Effective the day 
 10.38  following final enactment, for children 
 10.39  found ineligible for medical assistance 
 10.40  under the TEFRA option under criteria 
 10.41  in Minnesota Statutes, section 
 10.42  256B.055, subdivision 12, established 
 10.43  in Laws 1995, chapter 207, article 6, 
 10.44  if the reason for denial is lack of 
 10.45  information on the child's condition, 
 10.46  the commissioner shall notify the 
 10.47  family of the lack of documentation at 
 10.48  least 60 days prior to termination of 
 10.49  eligibility for notices sent between 
 10.50  April 1 and July 1, l996.  All TEFRA 
 10.51  ineligibility notices sent between 
 10.52  April 1 and July 1, 1996, must contain 
 10.53  the telephone number of a department of 
 10.54  human services staff person whom the 
 10.55  family can contact about alternative 
 10.56  sources of health coverage, including 
 10.57  MinnesotaCare, the Minnesota 
 10.58  comprehensive health association, 
 10.59  services for children with special 
 10.60  health care needs, and other types of 
 10.61  assistance for children with 
 10.62  disabilities or chronic illnesses. 
 10.63  [PUBLIC HEALTH NURSE ASSESSMENT.] 
 10.64  Effective for public health nurse 
 10.65  visits on or after July 1, 1996, the 
 10.66  reimbursement for public health nurse 
 11.1   visits relating to the provision of 
 11.2   personal care assistant services under 
 11.3   Minnesota Statutes, sections 256B.0625, 
 11.4   subdivision 19a, and 256B.0627, is 
 11.5   $204.36 for the initial assessment 
 11.6   visit and $102.18 for each reassessment 
 11.7   visit.  
 11.8   [NF PAYMENT INCREASE.] For the rate 
 11.9   year beginning July 1, 1996, the 
 11.10  commissioner shall increase each 
 11.11  nursing facility's payment rate for 
 11.12  those facilities whose rates are 
 11.13  determined under Minnesota Statutes, 
 11.14  section 256B.431, subdivision 25, by 
 11.15  $0.06 per resident per day. 
 11.16  Subd. 6.  Community Mental Health
 11.17  and State-Operated Services
 11.18  General 
 11.19        (440,000)       (83,000)
 11.20  The amounts that are reduced from this 
 11.21  appropriation for each purpose are as 
 11.22  follows: 
 11.23  (a) Mental Health Grants - Children
 11.24        (400,000)       277,000 
 11.25  (b) Mental Health Grants - Adults
 11.26         (40,000)      (360,000)
 11.27  [CRISIS SERVICES.] Crisis services for 
 11.28  developmentally disabled persons in 
 11.29  each regional center catchment area, 
 11.30  including crisis beds and mobile 
 11.31  intervention teams, shall be at 
 11.32  Brainerd, Cambridge, Fergus Falls, St. 
 11.33  Peter, and Willmar regional centers in 
 11.34  accordance with the agreement reached 
 11.35  in 1989, and codified in Minnesota 
 11.36  Statutes, section 252.025.  The program 
 11.37  design must be negotiated and agreed to 
 11.38  by the affected exclusive 
 11.39  representatives.  The parties also must 
 11.40  meet and discuss ways to provide the 
 11.41  highest quality services, while 
 11.42  maintaining or increasing cost 
 11.43  effectiveness. 
 11.44  [COMPULSIVE GAMBLING.] For the fiscal 
 11.45  year beginning July 1, 1996, the state 
 11.46  lottery board shall deposit $800,000 in 
 11.47  the general fund for use by the 
 11.48  commissioner of human services to pay 
 11.49  for compulsive gambling services as 
 11.50  follows:  $500,000 is allocated for 
 11.51  treatment of compulsive gamblers; 
 11.52  $150,000 is allocated for the 
 11.53  compulsive gambling treatment pilot 
 11.54  project for treating individual 
 11.55  compulsive gamblers; and $150,000 is 
 11.56  allocated for education and prevention 
 11.57  efforts, of which $50,000 is for a 
 11.58  grant to a compulsive gambling council 
 11.59  located in St. Louis county for the 
 11.60  extension of the information gathering 
 12.1   and dissemination network and the 
 12.2   establishment of training 
 12.3   scholarships.  The amount deposited by 
 12.4   the board shall be deducted from the 
 12.5   lottery prize fund established under 
 12.6   Minnesota Statutes, section 349A.10, 
 12.7   subdivision 2.  The amount deposited is 
 12.8   appropriated to the commissioner of 
 12.9   human services for this purpose.  None 
 12.10  of the amount appropriated for 
 12.11  compulsive gambling services under this 
 12.12  section may be used to pay 
 12.13  administrative costs of the department 
 12.14  of human services. 
 12.15  [COMPULSIVE GAMBLING GRANT FOR 
 12.16  ADOLESCENT PROGRAMS.] Of this 
 12.17  appropriation, $40,000 in fiscal year 
 12.18  1997 is for a grant to a compulsive 
 12.19  gambling council located in St. Louis 
 12.20  county for a compulsive gambling 
 12.21  prevention and education project for 
 12.22  adolescents.  This appropriation shall 
 12.23  not become part of the base level 
 12.24  funding for the 1998-1999 biennial 
 12.25  budget.  The appropriation in Laws 
 12.26  1995, chapter 207, article 1, section 
 12.27  2, subdivision 7, for compulsive 
 12.28  gambling programs for fiscal year 1996 
 12.29  is reduced by $40,000.  
 12.30  [RTC DENTAL SERVICES REPORT.] The 
 12.31  commissioner shall report to the chairs 
 12.32  of the house health and human services 
 12.33  committee and the senate health care 
 12.34  committee by November 1, 1996, on the 
 12.35  implementation of Minnesota Statutes, 
 12.36  section 246,57, subdivision 6. 
 12.37  Sec. 3.  COMMISSIONER OF HEALTH 
 12.38  Subdivision 1.  Total 
 12.39  Appropriation                            -0-          2,480,000
 12.40                Summary by Fund
 12.41  General                   -0-       2,280,000
 12.42  State Government
 12.43  Special Revenue           -0-         200,000
 12.44  This appropriation is added to the 
 12.45  appropriation in Laws 1995, chapter 
 12.46  207, article 1, section 3. 
 12.47  The amounts that may be spent from this 
 12.48  appropriation for each program are 
 12.49  specified in the following subdivisions.
 12.50  Subd. 2.  Health Systems and 
 12.51  Special Populations                      -0-          2,185,000
 12.52                Summary by Fund
 12.53  General                   -0-       1,985,000
 12.54  State Government 
 12.55  Special Revenue           -0-         200,000
 12.56  [CORE PUBLIC HEALTH FUNCTIONS.] Of this 
 12.57  appropriation, $1,500,000 in fiscal 
 13.1   year 1997 is for core public health 
 13.2   functions.  Of this amount, up to five 
 13.3   percent is available to the 
 13.4   commissioner for administrative and 
 13.5   technical support of community health 
 13.6   boards.  Funds distributed shall not be 
 13.7   used to displace current appropriations 
 13.8   or to provide individual personal 
 13.9   health care services which compete with 
 13.10  or duplicate services otherwise 
 13.11  available through the prepaid medical 
 13.12  assistance program.  These funds shall 
 13.13  be distributed on a pro rata basis 
 13.14  according to the existing community 
 13.15  health services subsidy formula to 
 13.16  those community health service areas 
 13.17  which are participating in the state's 
 13.18  prepaid medical assistance program.  
 13.19  This appropriation shall not become 
 13.20  part of the base for the 1998-1999 
 13.21  biennial budget.  
 13.22  [TECHNICAL ASSISTANCE.] Of this 
 13.23  appropriation, $200,000 is for the 
 13.24  purpose of providing technical 
 13.25  assistance to counties interested in 
 13.26  developing a joint purchaser 
 13.27  demonstration project.  The 
 13.28  commissioner of health shall contract 
 13.29  with consultants selected by the 
 13.30  association of Minnesota counties in 
 13.31  consultation with the advisory 
 13.32  committee established under Minnesota 
 13.33  Statutes, section 256B.78, subdivision 
 13.34  9, to provide this technical assistance.
 13.35  [DIRECT CONTRACTING REPORT.] The 
 13.36  commissioners of health and commerce 
 13.37  shall jointly study and report to the 
 13.38  legislative oversight commission on 
 13.39  health care access by December 15, 
 13.40  1996, on the feasibility of allowing 
 13.41  direct provider contracting of health 
 13.42  care services.  Included in this report 
 13.43  shall be recommendations on the 
 13.44  consumer protections, reserve 
 13.45  requirements, and protections for 
 13.46  consumers who will not have direct 
 13.47  contracting available to them that the 
 13.48  legislature should consider to ensure 
 13.49  protection of persons receiving health 
 13.50  coverage through networks allowed to 
 13.51  conduct direct provider contracting. 
 13.52  [HOSPITAL CONVERSION; SUPPLEMENTAL 
 13.53  ALLOCATION.] Of the appropriation from 
 13.54  the general fund, for the fiscal year 
 13.55  ending June 30, 1997, the commissioner 
 13.56  of health shall provide $25,000 to a 
 13.57  28-bed hospital located in Chisago 
 13.58  county, to enable that facility to plan 
 13.59  for closure and conversion, in 
 13.60  partnership with other entities, in 
 13.61  order to offer outpatient and emergency 
 13.62  services at the site.  This allocation 
 13.63  is in addition to funds authorized by 
 13.64  Laws 1995, article 1, section 3, 
 13.65  subdivision 2. 
 13.66  [MEDICARE INITIAL SURVEYS.] (a) 
 13.67  $200,000 is appropriated to the 
 14.1   commissioner from the general fund for 
 14.2   the fiscal year ending June 30, 1997, 
 14.3   to support initial surveys of Medicare 
 14.4   providers.  This appropriation shall be 
 14.5   available until the federal law 
 14.6   prohibiting the collection of fees for 
 14.7   Medicare initial surveys is repealed. 
 14.8   (b) $200,000 is appropriated to the 
 14.9   commissioner from the state government 
 14.10  special revenue fund for the fiscal 
 14.11  year ending June 30, 1997, to support 
 14.12  initial surveys of Medicare providers 
 14.13  once the federal law prohibiting the 
 14.14  collection of fees for this activity is 
 14.15  repealed.  Upon repeal of the federal 
 14.16  law, the commissioner shall charge fees 
 14.17  as provided under Minnesota Statutes, 
 14.18  section 144.122, paragraph (e).  
 14.19  [PROJECT REVIEW BEFORE CONSTRUCTION.] 
 14.20  Before construction may commence on the 
 14.21  project authorized in Minnesota 
 14.22  Statutes, section 144A.071, subdivision 
 14.23  4a, paragraph (w), the interagency 
 14.24  long-term care planning committee must 
 14.25  review the project to ascertain the 
 14.26  extent to which the project meets the 
 14.27  objectives of Minnesota Statutes, 
 14.28  section 144A.073, subdivision 4, and 
 14.29  approve the project if it meets the 
 14.30  objectives. 
 14.31  [SHARED ADMINISTRATOR.] Notwithstanding 
 14.32  the provisions of Minnesota Statutes, 
 14.33  section 144A.04, subdivision 5, the 
 14.34  administrator of a county owned nursing 
 14.35  home may serve, until September 30, 
 14.36  1996, as the administrator of a nursing 
 14.37  home located in a county owned hospital 
 14.38  provided that the total number of 
 14.39  nursing home beds in both facilities 
 14.40  does not exceed 153 beds.  This 
 14.41  provision is effective the day 
 14.42  following final enactment. 
 14.43  Subd. 3.  Health Protection              -0-            295,000 
 14.44  [BIRTH DEFECTS REGISTRY.] Of this 
 14.45  appropriation, $195,000 in fiscal year 
 14.46  1997 is for the birth defects registry 
 14.47  system under Minnesota Statutes, 
 14.48  section 144.2215.  The startup costs 
 14.49  shall not become part of the base for 
 14.50  the 1998-1999 biennial budget. 
 14.51  [LEAD HAZARD REDUCTION.] Of this 
 14.52  appropriation, $100,000 in fiscal year 
 14.53  1997 is for lead hazard reduction under 
 14.54  Minnesota Statutes, section 144.9504, 
 14.55  subdivisions 1 and 7, and section 
 14.56  144.9503, subdivision 9. 
 14.57  [REPORT ON INSPECTION FEES.] The 
 14.58  commissioner may spend up to $20,000 of 
 14.59  the money appropriated for the fiscal 
 14.60  year ending June 30, 1997, to develop 
 14.61  recommendations for options to reduce 
 14.62  inspection fees for establishments 
 14.63  licensed under Minnesota Statutes, 
 14.64  chapter 157, which are operating in the 
 15.1   category of small establishment with 
 15.2   full menu selection, and which have ten 
 15.3   or fewer employees.  The 
 15.4   recommendations must not include the 
 15.5   option of a general fund appropriation 
 15.6   as a way to reduce inspection fees.  
 15.7   The commissioner must report the 
 15.8   recommendations to the legislature by 
 15.9   October 1, 1996. 
 15.10  Sec. 4.  VETERANS NURSING
 15.11  HOMES BOARD                                -0-          125,000
 15.12  This appropriation is added to the 
 15.13  appropriation in Laws 1995, chapter 
 15.14  207, article 1, section 4. 
 15.15  [VETERANS NURSING HOMES BOARD.] 
 15.16  $125,000 is appropriated from the 
 15.17  general fund to the veterans nursing 
 15.18  homes board for the fiscal year ending 
 15.19  June 30, 1997, for the nursing home in 
 15.20  Fergus Falls.  This appropriation is to 
 15.21  fund positions and support services, to 
 15.22  coordinate and oversee the construction 
 15.23  of the facility, and to begin planning 
 15.24  for the opening of the facility. 
 15.25  Sec. 5.  HEALTH-RELATED BOARDS 
 15.26  Subdivision 1.  Total     
 15.27  Appropriation                             50,000        175,000 
 15.28                Summary by Fund
 15.29  General                   -0-          75,000
 15.30  State Government 
 15.31  Special Revenue         50,000        100,000
 15.32  Subd. 2.  Emergency Medical Services 
 15.33  Regulatory Board 
 15.34  General Fund                               -0-           75,000 
 15.35  [EMS TRANSFER EXPENSES.] $75,000 is 
 15.36  appropriated to the emergency medical 
 15.37  services regulatory board from the 
 15.38  general fund for the fiscal year ending 
 15.39  June 30, 1997, for expenses incurred in 
 15.40  transferring regulatory authority from 
 15.41  the commissioner of health to the board 
 15.42  under Laws 1995, chapter 207, article 
 15.43  9.  This appropriation shall not become 
 15.44  part of the base for the 1998-1999 
 15.45  biennial budget.  
 15.46  Subd. 3.  Board of Medical  
 15.47  Practice                               
 15.48  State Government Special 
 15.49  Fund                                      50,000        100,000 
 15.50  [MEDICAL PRACTICE BOARD.] $50,000 in 
 15.51  fiscal year 1996 and $100,000 in fiscal 
 15.52  year 1997 is appropriated from the 
 15.53  state government special revenue fund 
 15.54  to the board of medical practice for 
 15.55  the health professionals services 
 15.56  program, and is added to the 
 15.57  appropriation in Laws 1995, chapter 
 16.1   207, article 1, section 5, subdivision 
 16.2   6. 
 16.3   This appropriation is added to the 
 16.4   appropriation in Laws 1995, chapter 
 16.5   207, article 1, section 5. 
 16.6   [STATE GOVERNMENT SPECIAL REVENUE 
 16.7   FUND.] The appropriations in this 
 16.8   section are from the state government 
 16.9   special revenue fund. 
 16.10  [NO SPENDING IN EXCESS OF REVENUES.] 
 16.11  The commissioner of finance shall not 
 16.12  permit the allotment, encumbrance, or 
 16.13  expenditure of money appropriated in 
 16.14  this section in excess of the 
 16.15  anticipated biennial revenues or 
 16.16  accumulated surplus revenues from fees 
 16.17  collected by the boards.  Neither this 
 16.18  provision nor Minnesota Statutes, 
 16.19  section 214.06, applies to transfers 
 16.20  from the general contingent account, if 
 16.21  the amount transferred does not exceed 
 16.22  the amount of surplus revenue 
 16.23  accumulated by the transferee during 
 16.24  the previous five years. 
 16.25  Sec. 6.  [CARRYOVER LIMITATION.] 
 16.26  None of the appropriations in this 
 16.27  article which are allowed to be carried 
 16.28  forward from fiscal year 1996 to fiscal 
 16.29  year 1997 shall become part of the base 
 16.30  level funding for the 1998-1999 
 16.31  biennial budget, unless specifically 
 16.32  directed by the legislature. 
 16.33  Sec. 7.  [SUNSET OF UNCODIFIED 
 16.34  LANGUAGE.] 
 16.35  All uncodified language contained in 
 16.36  this article expires on June 30, 1997, 
 16.37  unless a different expiration is 
 16.38  explicit. 
 16.39                             ARTICLE 2
 16.40               HEALTH AND CONTINUING CARE RELATED TO 
 16.41       MEDICAL ASSISTANCE AND GENERAL ASSISTANCE MEDICAL CARE 
 16.42     Section 1.  Minnesota Statutes 1995 Supplement, section 
 16.43  62Q.19, subdivision 1, is amended to read: 
 16.44     Subdivision 1.  [DESIGNATION.] The commissioner shall 
 16.45  designate essential community providers.  The criteria for 
 16.46  essential community provider designation shall be the following: 
 16.47     (1) a demonstrated ability to integrate applicable 
 16.48  supportive and stabilizing services with medical care for 
 16.49  uninsured persons and high-risk and special needs populations as 
 16.50  defined in section 62Q.07, subdivision 2, paragraph (e), 
 16.51  underserved, and other special needs populations; and 
 17.1      (2) a commitment to serve low-income and underserved 
 17.2   populations by meeting the following requirements: 
 17.3      (i) has nonprofit status in accordance with chapter 317A; 
 17.4      (ii) has tax exempt status in accordance with the Internal 
 17.5   Revenue Service Code, section 501(c)(3); 
 17.6      (iii) charges for services on a sliding fee schedule based 
 17.7   on current poverty income guidelines; and 
 17.8      (iv) does not restrict access or services because of a 
 17.9   client's financial limitation; or 
 17.10     (3) status as a local government unit as defined in section 
 17.11  62D.02, subdivision 11, an Indian tribal government, an Indian 
 17.12  health service unit, or community health board as defined in 
 17.13  chapter 145A; or 
 17.14     (4) a former state hospital that specializes in the 
 17.15  treatment of cerebral palsy, spina bifida, epilepsy, closed head 
 17.16  injuries, specialized orthopedic problems, and other disabling 
 17.17  conditions.  
 17.18     Prior to designation, the commissioner shall publish the 
 17.19  names of all applicants in the State Register.  The public shall 
 17.20  have 30 days from the date of publication to submit written 
 17.21  comments to the commissioner on the application.  No designation 
 17.22  shall be made by the commissioner until the 30-day period has 
 17.23  expired. 
 17.24     The commissioner may designate an eligible provider as an 
 17.25  essential community provider for all the services offered by 
 17.26  that provider or for specific services designated by the 
 17.27  commissioner. 
 17.28     For the purpose of this subdivision, supportive and 
 17.29  stabilizing services include at a minimum, transportation, child 
 17.30  care, cultural, and linguistic services where appropriate. 
 17.31     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 17.32  62Q.19, subdivision 5, is amended to read: 
 17.33     Subd. 5.  [CONTRACT PAYMENT RATES.] An essential community 
 17.34  provider and a health plan company may negotiate the payment 
 17.35  rate for covered services provided by the essential community 
 17.36  provider.  This rate must be at least the same rate per unit of 
 18.1   service as is paid to other health plan providers for the same 
 18.2   or similar services. 
 18.3      Sec. 3.  Minnesota Statutes 1995 Supplement, section 
 18.4   252.27, subdivision 2a, is amended to read: 
 18.5      Subd. 2a.  [CONTRIBUTION AMOUNT.] (a) The natural or 
 18.6   adoptive parents of a minor child, including a child determined 
 18.7   eligible for medical assistance without consideration of 
 18.8   parental income, must contribute monthly to the cost of 
 18.9   services, unless the child is married or has been married, 
 18.10  parental rights have been terminated, or the child's adoption is 
 18.11  subsidized according to section 259.67 or through title IV-E of 
 18.12  the Social Security Act. 
 18.13     (b) The parental contribution shall be the greater of a 
 18.14  minimum monthly fee of $25 for households with adjusted gross 
 18.15  income of $30,000 and over, or an amount to be computed by 
 18.16  applying to the adjusted gross income of the natural or adoptive 
 18.17  parents that exceeds 150 percent of the federal poverty 
 18.18  guidelines for the applicable household size, the following 
 18.19  schedule of rates: 
 18.20     (1) on the amount of adjusted gross income over 150 percent 
 18.21  of poverty, but not over $50,000, ten percent; 
 18.22     (2) on the amount of adjusted gross income over 150 percent 
 18.23  of poverty and over $50,000 but not over $60,000, 12 percent; 
 18.24     (3) on the amount of adjusted gross income over 150 percent 
 18.25  of poverty, and over $60,000 but not over $75,000, 14 percent; 
 18.26  and 
 18.27     (4) on all adjusted gross income amounts over 150 percent 
 18.28  of poverty, and over $75,000, 15 percent. 
 18.29     If the child lives with the parent, the parental 
 18.30  contribution is reduced by $200, except that the parent must pay 
 18.31  the minimum monthly $25 fee under this paragraph.  If the child 
 18.32  resides in an institution specified in section 256B.35, the 
 18.33  parent is responsible for the personal needs allowance specified 
 18.34  under that section in addition to the parental contribution 
 18.35  determined under this section.  The parental contribution is 
 18.36  reduced by any amount required to be paid directly to the child 
 19.1   pursuant to a court order, but only if actually paid. 
 19.2      (c) The household size to be used in determining the amount 
 19.3   of contribution under paragraph (b) includes natural and 
 19.4   adoptive parents and their dependents under age 21, including 
 19.5   the child receiving services.  Adjustments in the contribution 
 19.6   amount due to annual changes in the federal poverty guidelines 
 19.7   shall be implemented on the first day of July following 
 19.8   publication of the changes. 
 19.9      (d) For purposes of paragraph (b), "income" means the 
 19.10  adjusted gross income of the natural or adoptive parents 
 19.11  determined according to the previous year's federal tax form. 
 19.12     (e) The contribution shall be explained in writing to the 
 19.13  parents at the time eligibility for services is being 
 19.14  determined.  The contribution shall be made on a monthly basis 
 19.15  effective with the first month in which the child receives 
 19.16  services.  Annually upon redetermination or at termination of 
 19.17  eligibility, if the contribution exceeded the cost of services 
 19.18  provided, the local agency or the state shall reimburse that 
 19.19  excess amount to the parents, either by direct reimbursement if 
 19.20  the parent is no longer required to pay a contribution, or by a 
 19.21  reduction in or waiver of parental fees until the excess amount 
 19.22  is exhausted. 
 19.23     (f) The monthly contribution amount must be reviewed at 
 19.24  least every 12 months; when there is a change in household size; 
 19.25  and when there is a loss of or gain in income from one month to 
 19.26  another in excess of ten percent.  The local agency shall mail a 
 19.27  written notice 30 days in advance of the effective date of a 
 19.28  change in the contribution amount.  A decrease in the 
 19.29  contribution amount is effective in the month that the parent 
 19.30  verifies a reduction in income or change in household size. 
 19.31     (g) Parents of a minor child who do not live with each 
 19.32  other shall each pay the contribution required under paragraph 
 19.33  (a), except that a court-ordered child support payment actually 
 19.34  paid on behalf of the child receiving services shall be deducted 
 19.35  from the contribution of the parent making the payment. 
 19.36     (h) The contribution under paragraph (b) shall be increased 
 20.1   by an additional five percent if the local agency determines 
 20.2   that insurance coverage is available but not obtained for the 
 20.3   child.  For purposes of this section, "available" means the 
 20.4   insurance is a benefit of employment for a family member at an 
 20.5   annual cost of no more than five percent of the family's annual 
 20.6   income.  For purposes of this section, insurance means health 
 20.7   and accident insurance coverage, enrollment in a nonprofit 
 20.8   health service plan, health maintenance organization, 
 20.9   self-insured plan, or preferred provider organization. 
 20.10     Parents who have more than one child receiving services 
 20.11  shall not be required to pay more than the amount for the child 
 20.12  with the highest expenditures.  There shall be no resource 
 20.13  contribution from the parents.  The parent shall not be required 
 20.14  to pay a contribution in excess of the cost of the services 
 20.15  provided to the child, not counting payments made to school 
 20.16  districts for education-related services.  Notice of an increase 
 20.17  in fee payment must be given at least 30 days before the 
 20.18  increased fee is due.  
 20.19     (i) The contribution under paragraph (b) shall be reduced 
 20.20  by $300 per fiscal year if, in the 12 months prior to July 1; 
 20.21     (1) the parent applied for insurance for the child, 
 20.22     (2) the insurer denied insurance, 
 20.23     (3) the parents submitted a complaint or appeal, in writing 
 20.24  to the insurer, submitted a complaint or appeal, in writing, to 
 20.25  the commissioner of health or the commissioner of commerce, or 
 20.26  litigated the complaint or appeal, and 
 20.27     (4) as a result of the dispute, the insurer reversed its 
 20.28  decision and granted insurance. 
 20.29     For purposes of this section, insurance has the meaning 
 20.30  given in paragraph (h). 
 20.31     A parent who has requested a reduction in the contribution 
 20.32  amount under this paragraph shall submit proof in the form and 
 20.33  manner prescribed by the commissioner or county agency, 
 20.34  including, but not limited to, the insurer's denial of 
 20.35  insurance, the written letter or complaint of the parents, court 
 20.36  documents, and the written response of the insurer approving 
 21.1   insurance.  The determinations of the commissioner or county 
 21.2   agency under this paragraph are not rules subject to chapter 14. 
 21.3      Sec. 4.  [252.54] [DAY TRAINING AND HABILITATION SERVICES.] 
 21.4      Day training and habilitation license holders are exempt 
 21.5   from the requirements of Minnesota Rules, part 9525.1630, 
 21.6   subparts 3 (review of progress toward individual habilitation 
 21.7   plan goals), 4 (initial assessment), and 5 (reassessment), for 
 21.8   persons for whom progress reviews, initial assessments, and 
 21.9   reassessments are completed by the license holder according to 
 21.10  requirements established in the person's individual service plan 
 21.11  developed by the county case manager under Minnesota Statutes, 
 21.12  section 256B.092, subdivision 1b. 
 21.13     Sec. 5.  Minnesota Statutes 1995 Supplement, section 
 21.14  256.969, subdivision 9, is amended to read: 
 21.15     Subd. 9.  [DISPROPORTIONATE NUMBERS OF LOW-INCOME PATIENTS 
 21.16  SERVED.] (a) For admissions occurring on or after October 1, 
 21.17  1992, through December 31, 1992, the medical assistance 
 21.18  disproportionate population adjustment shall comply with federal 
 21.19  law and shall be paid to a hospital, excluding regional 
 21.20  treatment centers and facilities of the federal Indian Health 
 21.21  Service, with a medical assistance inpatient utilization rate in 
 21.22  excess of the arithmetic mean.  The adjustment must be 
 21.23  determined as follows: 
 21.24     (1) for a hospital with a medical assistance inpatient 
 21.25  utilization rate above the arithmetic mean for all hospitals 
 21.26  excluding regional treatment centers and facilities of the 
 21.27  federal Indian Health Service but less than or equal to one 
 21.28  standard deviation above the mean, the adjustment must be 
 21.29  determined by multiplying the total of the operating and 
 21.30  property payment rates by the difference between the hospital's 
 21.31  actual medical assistance inpatient utilization rate and the 
 21.32  arithmetic mean for all hospitals excluding regional treatment 
 21.33  centers and facilities of the federal Indian Health Service; and 
 21.34     (2) for a hospital with a medical assistance inpatient 
 21.35  utilization rate above one standard deviation above the mean, 
 21.36  the adjustment must be determined by multiplying the adjustment 
 22.1   that would be determined under clause (1) for that hospital by 
 22.2   1.1.  If federal matching funds are not available for all 
 22.3   adjustments under this subdivision, the commissioner shall 
 22.4   reduce payments on a pro rata basis so that all adjustments 
 22.5   qualify for federal match.  The commissioner may establish a 
 22.6   separate disproportionate population operating payment rate 
 22.7   adjustment under the general assistance medical care program.  
 22.8   For purposes of this subdivision medical assistance does not 
 22.9   include general assistance medical care.  The commissioner shall 
 22.10  report annually on the number of hospitals likely to receive the 
 22.11  adjustment authorized by this paragraph.  The commissioner shall 
 22.12  specifically report on the adjustments received by public 
 22.13  hospitals and public hospital corporations located in cities of 
 22.14  the first class. 
 22.15     (b) For admissions occurring on or after July 1, 1993, the 
 22.16  medical assistance disproportionate population adjustment shall 
 22.17  comply with federal law and shall be paid to a hospital, 
 22.18  excluding regional treatment centers and facilities of the 
 22.19  federal Indian Health Service, with a medical assistance 
 22.20  inpatient utilization rate in excess of the arithmetic mean.  
 22.21  The adjustment must be determined as follows: 
 22.22     (1) for a hospital with a medical assistance inpatient 
 22.23  utilization rate above the arithmetic mean for all hospitals 
 22.24  excluding regional treatment centers and facilities of the 
 22.25  federal Indian Health Service but less than or equal to one 
 22.26  standard deviation above the mean, the adjustment must be 
 22.27  determined by multiplying the total of the operating and 
 22.28  property payment rates by the difference between the hospital's 
 22.29  actual medical assistance inpatient utilization rate and the 
 22.30  arithmetic mean for all hospitals excluding regional treatment 
 22.31  centers and facilities of the federal Indian Health Service; 
 22.32     (2) for a hospital with a medical assistance inpatient 
 22.33  utilization rate above one standard deviation above the mean, 
 22.34  the adjustment must be determined by multiplying the adjustment 
 22.35  that would be determined under clause (1) for that hospital by 
 22.36  1.1.  The commissioner may establish a separate disproportionate 
 23.1   population operating payment rate adjustment under the general 
 23.2   assistance medical care program.  For purposes of this 
 23.3   subdivision, medical assistance does not include general 
 23.4   assistance medical care.  The commissioner shall report annually 
 23.5   on the number of hospitals likely to receive the adjustment 
 23.6   authorized by this paragraph.  The commissioner shall 
 23.7   specifically report on the adjustments received by public 
 23.8   hospitals and public hospital corporations located in cities of 
 23.9   the first class; and 
 23.10     (3) for a hospital that had medical assistance 
 23.11  fee-for-service payment volume during calendar year 1991 in 
 23.12  excess of 13 percent of total medical assistance fee-for-service 
 23.13  payment volume, a medical assistance disproportionate population 
 23.14  adjustment shall be paid in addition to any other 
 23.15  disproportionate payment due under this subdivision as follows:  
 23.16  $1,515,000 due on the 15th of each month after noon, beginning 
 23.17  July 15, 1995.  For a hospital that had medical assistance 
 23.18  fee-for-service payment volume during calendar year 1991 in 
 23.19  excess of eight percent of total medical assistance 
 23.20  fee-for-service payment volume and is was the primary hospital 
 23.21  affiliated with the University of Minnesota, a medical 
 23.22  assistance disproportionate population adjustment shall be paid 
 23.23  in addition to any other disproportionate payment due under this 
 23.24  subdivision as follows:  $505,000 due on the 15th of each month 
 23.25  after noon, beginning July 15, 1995. 
 23.26     (c) The commissioner shall adjust rates paid to a health 
 23.27  maintenance organization under contract with the commissioner to 
 23.28  reflect rate increases provided in paragraph (b), clauses (1) 
 23.29  and (2), on a nondiscounted hospital-specific basis but shall 
 23.30  not adjust those rates to reflect payments provided in clause 
 23.31  (3). 
 23.32     (d) If federal matching funds are not available for all 
 23.33  adjustments under paragraph (b), the commissioner shall reduce 
 23.34  payments under paragraph (b), clauses (1) and (2), on a pro rata 
 23.35  basis so that all adjustments under paragraph (b) qualify for 
 23.36  federal match. 
 24.1      (e) For purposes of this subdivision, medical assistance 
 24.2   does not include general assistance medical care.  
 24.3      Sec. 6.  [256.9692] [EFFECT OF INTEGRATION AGREEMENT ON 
 24.4   DIVISION OF COST.] 
 24.5      Beginning in the first calendar month after there is a 
 24.6   definitive integration agreement affecting the University of 
 24.7   Minnesota hospital and clinics and Fairview hospital and health 
 24.8   care services, Fairview hospital and health care services shall 
 24.9   pay the University of Minnesota $505,000 on the 15th of each 
 24.10  month, after receiving the state payment, provided that the 
 24.11  University of Minnesota has fulfilled the requirements of 
 24.12  section 256B.19, subdivision 1c. 
 24.13     Sec. 7.  Minnesota Statutes 1995 Supplement, section 
 24.14  256B.055, subdivision 12, is amended to read: 
 24.15     Subd. 12.  [DISABLED CHILDREN.] (a) A person is eligible 
 24.16  for medical assistance if the person is under age 19 and 
 24.17  qualifies as a disabled individual under United States Code, 
 24.18  title 42, section 1382c(a), and would be eligible for medical 
 24.19  assistance under the state plan if residing in a medical 
 24.20  institution, and the child requires a level of care provided in 
 24.21  a hospital, nursing facility, or intermediate care facility for 
 24.22  persons with mental retardation or related conditions, for whom 
 24.23  home care is appropriate, provided that the cost to medical 
 24.24  assistance under this section is not more than the amount that 
 24.25  medical assistance would pay for if the child resides in an 
 24.26  institution.  Eligibility under this section must be determined 
 24.27  annually After the child is determined to be eligible under this 
 24.28  section, the commissioner shall review the child's disability 
 24.29  under United States Code, title 42, section 1382c(a) and level 
 24.30  of care defined under this section no more often than annually 
 24.31  and may elect, based on the recommendation of health care 
 24.32  professionals under contract with the state medical review team, 
 24.33  to extend the review of disability and level of care up to a 
 24.34  maximum of four years.  The commissioner's decision on the 
 24.35  frequency of continuing review of disability and level of care 
 24.36  is not subject to administrative appeal under section 256.045.  
 25.1   Nothing in this subdivision shall be construed as affecting 
 25.2   other redeterminations of medical assistance eligibility under 
 25.3   chapter 256B and annual cost effective reviews under this 
 25.4   section.  
 25.5      (b) For purposes of this subdivision, "hospital" means an 
 25.6   institution as defined in section 144.696, subdivision 3, 
 25.7   144.55, subdivision 3, or Minnesota Rules, part 4640.3600, and 
 25.8   licensed pursuant to sections 144.50 to 144.58 .  For purposes 
 25.9   of this subdivision, a child requires a level of care provided 
 25.10  in a hospital if the child is determined by the commissioner to 
 25.11  need an extensive array of health services, including mental 
 25.12  health services, for an undetermined period of time, whose 
 25.13  health condition requires frequent monitoring and treatment by a 
 25.14  health care professional or by a person supervised by a health 
 25.15  care professional, who would reside in a hospital or require 
 25.16  frequent hospitalization if these services were not provided, 
 25.17  and the daily care needs are more complex than a nursing 
 25.18  facility level of care.  
 25.19     A child with serious emotional disturbance requires a level 
 25.20  of care provided in a hospital if the commissioner determines 
 25.21  that the individual requires 24-hour supervision because the 
 25.22  person exhibits recurrent or frequent suicidal or homicidal 
 25.23  ideation or behavior, recurrent or frequent psychosomatic 
 25.24  disorders or somatopsychic disorders that may become life 
 25.25  threatening, recurrent or frequent severe socially unacceptable 
 25.26  behavior associated with psychiatric disorder, ongoing and 
 25.27  chronic psychosis or severe, ongoing and chronic developmental 
 25.28  problems requiring continuous skilled observation, or severe 
 25.29  disabling symptoms for which office-centered outpatient 
 25.30  treatment is not adequate, and which overall severely impact the 
 25.31  individual's ability to function. 
 25.32     (c) For purposes of this subdivision, "nursing facility" 
 25.33  means a facility which provides nursing care as defined in 
 25.34  section 144A.01, subdivision 5, licensed pursuant to sections 
 25.35  144A.02 to 144A.10, which is appropriate if a person is in 
 25.36  active restorative treatment; is in need of special treatments 
 26.1   provided or supervised by a licensed nurse; or has unpredictable 
 26.2   episodes of active disease processes requiring immediate 
 26.3   judgment by a licensed nurse.  For purposes of this subdivision, 
 26.4   a child requires the level of care provided in a nursing 
 26.5   facility if the child is determined by the commissioner to meet 
 26.6   the requirements of the preadmission screening assessment 
 26.7   document under section 256B.0911 and the home care independent 
 26.8   rating document under section 256B.0627, subdivision 5, 
 26.9   paragraph (f), item (iii), adjusted to address age-appropriate 
 26.10  standards for children age 18 and under, pursuant to section 
 26.11  256B.0627, subdivision 5, paragraph (d), clause (2). 
 26.12     (d) For purposes of this subdivision, "intermediate care 
 26.13  facility for persons with mental retardation or related 
 26.14  conditions" or "ICF/MR" means a program licensed to provide 
 26.15  services to persons with mental retardation under section 
 26.16  252.28, and chapter 245A, and a physical plant licensed as a 
 26.17  supervised living facility under chapter 144, which together are 
 26.18  certified by the Minnesota department of health as meeting the 
 26.19  standards in Code of Federal Regulations, title 42, part 483, 
 26.20  for an intermediate care facility which provides services for 
 26.21  persons with mental retardation or persons with related 
 26.22  conditions who require 24-hour supervision and active treatment 
 26.23  for medical, behavioral, or habilitation needs.  For purposes of 
 26.24  this subdivision, a child requires a level of care provided in 
 26.25  an ICF/MR if the commissioner finds that the child has mental 
 26.26  retardation or a related condition in accordance with section 
 26.27  256B.092, is in need of a 24-hour plan of care and active 
 26.28  treatment similar to persons with mental retardation, and there 
 26.29  is a reasonable indication that the child will need ICF/MR 
 26.30  services. 
 26.31     (e) For purposes of this subdivision, a person requires the 
 26.32  level of care provided in a nursing facility if the person 
 26.33  requires 24-hour monitoring or supervision and a plan of mental 
 26.34  health treatment because of specific symptoms or functional 
 26.35  impairments associated with a serious mental illness or disorder 
 26.36  diagnosis, which meet severity criteria for mental health 
 27.1   established by the commissioner based on standards developed for 
 27.2   the Wisconsin Katie Beckett program published in July 1994. 
 27.3      (f) The determination of the level of care needed by the 
 27.4   child shall be made by the commissioner based on information 
 27.5   supplied to the commissioner by the parent or guardian, the 
 27.6   child's physician or physicians , and other professionals as 
 27.7   requested by the commissioner.  The commissioner shall establish 
 27.8   a screening team to conduct the level of care determinations 
 27.9   according to this subdivision. 
 27.10     (f) (g) If a child meets the conditions in paragraph (b), 
 27.11  (c), or (d), or (e), the commissioner must assess the case to 
 27.12  determine whether: 
 27.13     (1) the child qualifies as a disabled individual under 
 27.14  United States Code, title 42, section 1382c(a) and would be 
 27.15  eligible for medical assistance if residing in a medical 
 27.16  institution; and 
 27.17     (2) the cost of medical assistance services for the child, 
 27.18  if eligible under this subdivision, would not be more than the 
 27.19  cost to medical assistance if the child resides in a medical 
 27.20  institution to be determined as follows: 
 27.21     (i) for a child who requires a level of care provided in an 
 27.22  ICF/MR, the cost of care for the child in an institution shall 
 27.23  be determined using the average payment rate established for the 
 27.24  regional treatment centers that are certified as ICFs/MR; 
 27.25     (ii) for a child who requires a level of care provided in 
 27.26  an inpatient hospital setting according to paragraph (b), 
 27.27  cost-effectiveness shall be determined according to Minnesota 
 27.28  Rules, part 9505.3520, items F and G; and 
 27.29     (iii) for a child who requires a level of care provided in 
 27.30  a nursing facility according to paragraph (c) or (e), 
 27.31  cost-effectiveness shall be determined according to Minnesota 
 27.32  Rules, part 9505.3040, except that the nursing facility average 
 27.33  rate shall be adjusted to reflect rates which would be paid for 
 27.34  children under age 16.  The commissioner may authorize an amount 
 27.35  up to the amount medical assistance would pay for a child 
 27.36  referred to the commissioner by the preadmission screening team 
 28.1   under section 256B.0911. 
 28.2      (g) Children eligible for medical assistance services under 
 28.3   section 256B.055, subdivision 12, as of June 30, 1995, must be 
 28.4   screened according to the criteria in this subdivision prior to 
 28.5   January 1, 1996.  Children found to be ineligible may not be 
 28.6   removed from the program until January 1, 1996. 
 28.7      Sec. 8.  Minnesota Statutes 1994, section 256B.056, 
 28.8   subdivision 1, is amended to read: 
 28.9      Subdivision 1.  [RESIDENCY.] To be eligible for medical 
 28.10  assistance, a person must reside have resided in Minnesota for 
 28.11  at least 30 days, or, if absent from the state, be deemed to be 
 28.12  a resident of Minnesota in accordance with the rules of the 
 28.13  state agency. 
 28.14     A person who has resided in the state for less than 30 days 
 28.15  is considered to be a Minnesota resident if the person: 
 28.16     (1) was born in the state; 
 28.17     (2) has in the past resided in the state for at least 365 
 28.18  consecutive days; 
 28.19     (3) has come to the state to join a close relative, which, 
 28.20  for purposes of this subdivision means a parent, grandparent, 
 28.21  brother, sister, spouse, or child; or 
 28.22     (4) has come to this state to accept a bona fide offer of 
 28.23  employment for which the person is eligible. 
 28.24     A county agency shall waive the 30-day residency 
 28.25  requirement in cases of medical emergency or where unusual 
 28.26  hardship would result from denial of assistance.  The county 
 28.27  agency must report to the commissioner within 30 days on any 
 28.28  waiver granted under this section.  The county shall not deny an 
 28.29  application solely because the applicant does not meet at least 
 28.30  one of the criteria in this subdivision, but shall continue to 
 28.31  process the application and leave the application pending until 
 28.32  the residency requirement is met or until eligibility or 
 28.33  ineligibility is established. 
 28.34     Sec. 9.  Minnesota Statutes 1994, section 256B.056, 
 28.35  subdivision 1a, is amended to read: 
 28.36     Subd. 1a.  [INCOME AND ASSETS GENERALLY.] Unless 
 29.1   specifically required by state law or rule or federal law or 
 29.2   regulation, the methodologies used in counting income and assets 
 29.3   to determine eligibility for medical assistance for persons 
 29.4   whose eligibility category is based on blindness, disability, or 
 29.5   age of 65 or more years, the methodologies for the supplemental 
 29.6   security income program shall be used, except that payments made 
 29.7   pursuant to a court order for the support of children shall be 
 29.8   excluded from income in an amount not to exceed the difference 
 29.9   between the applicable income standard used in the state's 
 29.10  medical assistance program for aged, blind, and disabled persons 
 29.11  and the applicable income standard used in the state's medical 
 29.12  assistance program for families with children.  Exclusion of 
 29.13  court-ordered child support payments is subject to the condition 
 29.14  that if there has been a change in the financial circumstances 
 29.15  of the person with the legal obligation to pay support since the 
 29.16  support order was entered, the person with the legal obligation 
 29.17  to pay support has petitioned for modification of the support 
 29.18  order.  For families and children, which includes all other 
 29.19  eligibility categories, the methodologies for the aid to 
 29.20  families with dependent children program under section 256.73 
 29.21  shall be used.  Effective upon federal approval, in-kind 
 29.22  contributions to, and payments made on behalf of, a recipient, 
 29.23  by an obligor, in satisfaction of or in addition to a temporary 
 29.24  or permanent order for child support or maintenance, shall be 
 29.25  considered income to the recipient.  For these purposes, a 
 29.26  "methodology" does not include an asset or income standard, or 
 29.27  accounting method, or method of determining effective dates. 
 29.28     Sec. 10.  Minnesota Statutes 1995 Supplement, section 
 29.29  256B.0575, is amended to read: 
 29.30     256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 
 29.31  PERSONS.] 
 29.32     When an institutionalized person is determined eligible for 
 29.33  medical assistance, the income that exceeds the deductions in 
 29.34  paragraphs (a) and (b) must be applied to the cost of 
 29.35  institutional care.  
 29.36     (a) The following amounts must be deducted from the 
 30.1   institutionalized person's income in the following order: 
 30.2      (1) the personal needs allowance under section 256B.35 or, 
 30.3   for a veteran who does not have a spouse or child, or a 
 30.4   surviving spouse of a veteran having no child, the amount of an 
 30.5   improved pension received from the veteran's administration not 
 30.6   exceeding $90 per month; 
 30.7      (2) the personal allowance for disabled individuals under 
 30.8   section 256B.36; 
 30.9      (3) if the institutionalized person has a legally appointed 
 30.10  guardian or conservator, five percent of the recipient's gross 
 30.11  monthly income up to $100 as reimbursement for guardianship or 
 30.12  conservatorship services; 
 30.13     (4) a monthly income allowance determined under section 
 30.14  256B.058, subdivision 2, but only to the extent income of the 
 30.15  institutionalized spouse is made available to the community 
 30.16  spouse; 
 30.17     (5) a monthly allowance for children under age 18 which, 
 30.18  together with the net income of the children, would provide 
 30.19  income equal to the medical assistance standard for families and 
 30.20  children according to section 256B.056, subdivision 4, for a 
 30.21  family size that includes only the minor children.  This 
 30.22  deduction applies only if the children do not live with the 
 30.23  community spouse and only to the extent that the deduction is 
 30.24  not included in the personal needs allowance under section 
 30.25  256B.35, subdivision 1, as child support garnished under a court 
 30.26  order; 
 30.27     (6) a monthly family allowance for other family members, 
 30.28  equal to one-third of the difference between 122 percent of the 
 30.29  federal poverty guidelines and the monthly income for that 
 30.30  family member; 
 30.31     (7) reparations payments made by the Federal Republic of 
 30.32  Germany and reparations payments made by the Netherlands for 
 30.33  victims of Nazi persecution between 1940 and 1945; and 
 30.34     (8) amounts for reasonable expenses incurred for necessary 
 30.35  medical or remedial care for the institutionalized spouse that 
 30.36  are not medical assistance covered expenses and that are not 
 31.1   subject to payment by a third party.  
 31.2      For purposes of clause (6), "other family member" means a 
 31.3   person who resides with the community spouse and who is a minor 
 31.4   or dependent child, dependent parent, or dependent sibling of 
 31.5   either spouse.  "Dependent" means a person who could be claimed 
 31.6   as a dependent for federal income tax purposes under the 
 31.7   Internal Revenue Code. 
 31.8      (b) Income shall be allocated to an institutionalized 
 31.9   person for a period of up to three calendar months, in an amount 
 31.10  equal to the medical assistance standard for a family size of 
 31.11  one if:  
 31.12     (1) a physician certifies that the person is expected to 
 31.13  reside in the long-term care facility for three calendar months 
 31.14  or less; 
 31.15     (2) if the person has expenses of maintaining a residence 
 31.16  in the community; and 
 31.17     (3) if one of the following circumstances apply:  
 31.18     (i) the person was not living together with a spouse or a 
 31.19  family member as defined in paragraph (a) when the person 
 31.20  entered a long-term care facility; or 
 31.21     (ii) the person and the person's spouse become 
 31.22  institutionalized on the same date, in which case the allocation 
 31.23  shall be applied to the income of one of the spouses.  
 31.24  For purposes of this paragraph, a person is determined to be 
 31.25  residing in a licensed nursing home, regional treatment center, 
 31.26  or medical institution if the person is expected to remain for a 
 31.27  period of one full calendar month or more. 
 31.28     Sec. 11.  Minnesota Statutes 1995 Supplement, section 
 31.29  256B.0595, subdivision 1, is amended to read: 
 31.30     Subdivision 1.  [PROHIBITED TRANSFERS.] (a) For transfers 
 31.31  of assets made on or before August 10, 1993, if a person or the 
 31.32  person's spouse has given away, sold, or disposed of, for less 
 31.33  than fair market value, any asset or interest therein, except 
 31.34  assets other than the homestead that are excluded under the 
 31.35  supplemental security program, within 30 months before or any 
 31.36  time after the date of institutionalization if the person has 
 32.1   been determined eligible for medical assistance, or within 30 
 32.2   months before or any time after the date of the first approved 
 32.3   application for medical assistance if the person has not yet 
 32.4   been determined eligible for medical assistance, the person is 
 32.5   ineligible for long-term care services for the period of time 
 32.6   determined under subdivision 2.  
 32.7      (b) Effective for transfers made after August 10, 1993, a 
 32.8   person, a person's spouse, or any person, court, or 
 32.9   administrative body with legal authority to act in place of, on 
 32.10  behalf of, at the direction of, or upon the request of the 
 32.11  person or person's spouse, may not give away, sell, or dispose 
 32.12  of, for less than fair market value, any asset or interest 
 32.13  therein, except assets other than the homestead that are 
 32.14  excluded under the supplemental security income program, for the 
 32.15  purpose of establishing or maintaining medical assistance 
 32.16  eligibility.  For purposes of determining eligibility for 
 32.17  long-term care services, any transfer of such assets within 36 
 32.18  months before or any time after an institutionalized person 
 32.19  applies for medical assistance, or 36 months before or any time 
 32.20  after a medical assistance recipient becomes institutionalized, 
 32.21  for less than fair market value may be considered.  Any such 
 32.22  transfer is presumed to have been made for the purpose of 
 32.23  establishing or maintaining medical assistance eligibility and 
 32.24  the person is ineligible for long-term care services for the 
 32.25  period of time determined under subdivision 2, unless the person 
 32.26  furnishes convincing evidence to establish that the transaction 
 32.27  was exclusively for another purpose, or unless the transfer is 
 32.28  permitted under subdivision 3 or 4.  Notwithstanding the 
 32.29  provisions of this paragraph, in the case of payments from a 
 32.30  trust or portions of a trust that are considered transfers of 
 32.31  assets under federal law, any transfers made within 60 months 
 32.32  before or any time after an institutionalized person applies for 
 32.33  medical assistance and within 60 months before or any time after 
 32.34  a medical assistance recipient becomes institutionalized, may be 
 32.35  considered. 
 32.36     (c) This section applies to transfers, for less than fair 
 33.1   market value, of income or assets, including assets that are 
 33.2   considered income in the month received, such as inheritances, 
 33.3   court settlements, and retroactive benefit payments or income to 
 33.4   which the person or the person's spouse is entitled but does not 
 33.5   receive due to action by the person, the person's spouse, or any 
 33.6   person, court, or administrative body with legal authority to 
 33.7   act in place of, on behalf of, at the direction of, or upon the 
 33.8   request of the person or the person's spouse.  
 33.9      (d) This section applies to payments for care or personal 
 33.10  services provided by a relative, unless the compensation was 
 33.11  stipulated in a notarized, written agreement which was in 
 33.12  existence when the service was performed, the care or services 
 33.13  directly benefited the person, and the payments made represented 
 33.14  reasonable compensation for the care or services provided.  A 
 33.15  notarized written agreement is not required if payment for the 
 33.16  services was made within 60 days after the service was provided. 
 33.17     (e) This section applies to the portion of any asset or 
 33.18  interest that a person, a person's spouse, or any person, court, 
 33.19  or administrative body with legal authority to act in place of, 
 33.20  on behalf of, at the direction of, or upon the request of the 
 33.21  person or the person's spouse, transfers to any trust, annuity, 
 33.22  or other instrument, that exceeds the value of the benefit 
 33.23  likely to be returned to the person or spouse while alive, based 
 33.24  on estimated life expectancy using the life expectancy tables 
 33.25  employed by the supplemental security income program to 
 33.26  determine the value of an agreement for services for life.  The 
 33.27  commissioner may adopt rules reducing life expectancies based on 
 33.28  the need for long-term care. 
 33.29     (f) For purposes of this section, long-term care services 
 33.30  include services in a nursing facility, services that are 
 33.31  eligible for payment according to section 256B.0625, subdivision 
 33.32  2, because they are provided in a swing bed, intermediate care 
 33.33  facility for persons with mental retardation, and home and 
 33.34  community-based services provided pursuant to sections 
 33.35  256B.0915, 256B.092, and 256B.49.  For purposes of this 
 33.36  subdivision and subdivisions 2, 3, and 4, "institutionalized 
 34.1   person" includes a person who is an inpatient in a nursing 
 34.2   facility or in a swing bed, or intermediate care facility for 
 34.3   persons with mental retardation or who is receiving home and 
 34.4   community-based services under sections 256B.0915, 256B.092, and 
 34.5   256B.49. 
 34.6      (g) Effective for transfers made on or after July 1, 1995, 
 34.7   or upon federal approval, whichever is later, a person, a 
 34.8   person's spouse, or any person, court, or administrative body 
 34.9   with legal authority to act in place of, on behalf of, at the 
 34.10  direction of, or upon the request of the person or person's 
 34.11  spouse, may not give away, sell, or dispose of, for less than 
 34.12  fair market value, any asset or interest therein, for the 
 34.13  purpose of establishing or maintaining medical assistance 
 34.14  eligibility.  For purposes of determining eligibility for 
 34.15  long-term care services, any transfer of such assets within 60 
 34.16  months before, or any time after, an institutionalized person 
 34.17  applies for medical assistance, or 60 months before, or any time 
 34.18  after, a medical assistance recipient becomes institutionalized, 
 34.19  for less than fair market value may be considered.  Any such 
 34.20  transfer is presumed to have been made for the purpose of 
 34.21  establishing or maintaining medical assistance eligibility and 
 34.22  the person is ineligible for long-term care services for the 
 34.23  period of time determined under subdivision 2, unless the person 
 34.24  furnishes convincing evidence to establish that the transaction 
 34.25  was exclusively for another purpose, or unless the transfer is 
 34.26  permitted under subdivision 3 or 4. 
 34.27     Sec. 12.  Minnesota Statutes 1994, section 256B.0595, is 
 34.28  amended by adding a subdivision to read: 
 34.29     Subd. 1a.  [PROHIBITED TRANSFERS.] (a) Notwithstanding any 
 34.30  contrary provisions of this section, this subdivision applies to 
 34.31  transfers involving recipients of medical assistance that are 
 34.32  made on or after its effective date and to all transfers 
 34.33  involving persons who apply for medical assistance on or after 
 34.34  its effective date if the transfer occurred within 72 months 
 34.35  before the person applies for medical assistance, except that 
 34.36  this subdivision does not apply to transfers made prior to March 
 35.1   1, 1996.  A person, a person's spouse, or any person, court, or 
 35.2   administrative body with legal authority to act in place of, on 
 35.3   behalf of, at the direction of, or upon the request of the 
 35.4   person or the person's spouse, may not give away, sell, dispose 
 35.5   of, or reduce ownership or control of any income, asset, or 
 35.6   interest therein for less than fair market value for the purpose 
 35.7   of establishing or maintaining medical assistance eligibility 
 35.8   for the person.  For purposes of determining eligibility for 
 35.9   medical assistance services, any transfer of such income or 
 35.10  assets for less than fair market value within 72 months before 
 35.11  or any time after a person applies for medical assistance may be 
 35.12  considered.  Any such transfer is presumed to have been made for 
 35.13  the purpose of establishing or maintaining medical assistance 
 35.14  eligibility, and the person is ineligible for medical assistance 
 35.15  services for the period of time determined under subdivision 2a, 
 35.16  unless the person furnishes convincing evidence to establish 
 35.17  that the transaction was exclusively for another purpose, or 
 35.18  unless the transfer is permitted under subdivision 3a or 4a. 
 35.19     (b) This section applies to transfers of income or assets 
 35.20  for less than fair market value, including assets that are 
 35.21  considered income in the month received, such as inheritances, 
 35.22  court settlements, and retroactive benefit payments or income to 
 35.23  which the person or the person's spouse is entitled but does not 
 35.24  receive due to action by the person, the person's spouse, or any 
 35.25  person, court, or administrative body with legal authority to 
 35.26  act in place of, on behalf of, at the direction of, or upon the 
 35.27  request of the person or the person's spouse.  
 35.28     (c) This section applies to payments for care or personal 
 35.29  services provided by a relative, unless the compensation was 
 35.30  stipulated in a notarized, written agreement which was in 
 35.31  existence when the service was performed, the care or services 
 35.32  directly benefited the person, and the payments made represented 
 35.33  reasonable compensation for the care or services provided.  A 
 35.34  notarized written agreement is not required if payment for the 
 35.35  services was made within 60 days after the service was provided. 
 35.36     (d) This section applies to the portion of any income, 
 36.1   asset, or interest therein that a person, a person's spouse, or 
 36.2   any person, court, or administrative body with legal authority 
 36.3   to act in place of, on behalf of, at the direction of, or upon 
 36.4   the request of the person or the person's spouse, transfers to 
 36.5   any annuity that exceeds the value of the benefit likely to be 
 36.6   returned to the person or spouse while alive, based on estimated 
 36.7   life expectancy of adults entering long-term care.  The 
 36.8   commissioner shall adopt rules establishing life expectancies of 
 36.9   adults entering long-term care. 
 36.10     Sec. 13.  Minnesota Statutes 1995 Supplement, section 
 36.11  256B.0595, subdivision 2, is amended to read: 
 36.12     Subd. 2.  [PERIOD OF INELIGIBILITY.] (a) For any 
 36.13  uncompensated transfer occurring on or before August 10, 1993, 
 36.14  the number of months of ineligibility for long-term care 
 36.15  services shall be the lesser of 30 months, or the uncompensated 
 36.16  transfer amount divided by the average medical assistance rate 
 36.17  for nursing facility services in the state in effect on the date 
 36.18  of application.  The amount used to calculate the average 
 36.19  medical assistance payment rate shall be adjusted each July 1 to 
 36.20  reflect payment rates for the previous calendar year.  The 
 36.21  period of ineligibility begins with the month in which the 
 36.22  assets were transferred.  If the transfer was not reported to 
 36.23  the local agency at the time of application, and the applicant 
 36.24  received long-term care services during what would have been the 
 36.25  period of ineligibility if the transfer had been reported, a 
 36.26  cause of action exists against the transferee for the cost of 
 36.27  long-term care services provided during the period of 
 36.28  ineligibility, or for the uncompensated amount of the transfer, 
 36.29  whichever is less.  The action may be brought by the state or 
 36.30  the local agency responsible for providing medical assistance 
 36.31  under chapter 256G.  The uncompensated transfer amount is the 
 36.32  fair market value of the asset at the time it was given away, 
 36.33  sold, or disposed of, less the amount of compensation received.  
 36.34     (b) For uncompensated transfers made after August 10, 1993, 
 36.35  the number of months of ineligibility for long-term care 
 36.36  services shall be the total uncompensated value of the resources 
 37.1   transferred divided by the average medical assistance rate for 
 37.2   nursing facility services in the state in effect on the date of 
 37.3   application.  The amount used to calculate the average medical 
 37.4   assistance payment rate shall be adjusted each July 1 to reflect 
 37.5   payment rates for the previous calendar year.  The period of 
 37.6   ineligibility begins with the month in which the assets were 
 37.7   transferred except that if one or more uncompensated transfers 
 37.8   are made during a period of ineligibility, the total assets 
 37.9   transferred during the ineligibility period shall be combined 
 37.10  and a penalty period calculated to begin in the month the first 
 37.11  uncompensated transfer was made.  If the transfer was not 
 37.12  reported to the local agency at the time of application, and the 
 37.13  applicant received medical assistance services during what would 
 37.14  have been the period of ineligibility if the transfer had been 
 37.15  reported, a cause of action exists against the transferee for 
 37.16  the cost of medical assistance services provided during the 
 37.17  period of ineligibility, or for the uncompensated amount of the 
 37.18  transfer, whichever is less.  The action may be brought by the 
 37.19  state or the local agency responsible for providing medical 
 37.20  assistance under chapter 256G.  The uncompensated transfer 
 37.21  amount is the fair market value of the asset at the time it was 
 37.22  given away, sold, or disposed of, less the amount of 
 37.23  compensation received.  
 37.24     (c) If a calculation of a penalty period results in a 
 37.25  partial month, payments for long-term care services shall be 
 37.26  reduced in an amount equal to the fraction, except that in 
 37.27  calculating the value of uncompensated transfers, if the total 
 37.28  value of all uncompensated transfers made in a month not 
 37.29  included in an existing penalty period does not exceed 
 37.30  $1,000 $500, then such transfers shall be disregarded for each 
 37.31  month prior to the month of application for or during receipt of 
 37.32  medical assistance. 
 37.33     Sec. 14.  Minnesota Statutes 1994, section 256B.0595, is 
 37.34  amended by adding a subdivision to read: 
 37.35     Subd. 2a.  [PERIOD OF INELIGIBILITY.] (a) Notwithstanding 
 37.36  any contrary provisions of this section, this subdivision 
 38.1   applies to transfers involving recipients of medical assistance 
 38.2   that are made on or after its effective date and to all 
 38.3   transfers involving persons who apply for medical assistance on 
 38.4   or after its effective date, regardless of when the transfer 
 38.5   occurred, except that this subdivision does not apply to 
 38.6   transfers made prior to March 1, 1996.  For any uncompensated 
 38.7   transfer occurring within 72 months prior to the date of 
 38.8   application, at any time after application, or while eligible, 
 38.9   the number of months of cumulative ineligibility for medical 
 38.10  assistance services shall be the total uncompensated value of 
 38.11  the assets and income transferred divided by the statewide 
 38.12  average per person nursing facility payment made by the state in 
 38.13  effect on the date of application.  The amount used to calculate 
 38.14  the average per person payment shall be adjusted each July 1 to 
 38.15  reflect average payments for the previous calendar year.  For 
 38.16  applicants, the period of ineligibility begins with the month in 
 38.17  which the person applied for medical assistance and satisfied 
 38.18  all other requirements for eligibility, or the month the local 
 38.19  agency becomes aware of the transfer, if later.  For recipients, 
 38.20  the period of ineligibility begins in the month the agency 
 38.21  becomes aware of the transfer, except that penalty periods for 
 38.22  transfers made during a period of ineligibility as determined 
 38.23  under this section shall begin in the month following the 
 38.24  existing period of ineligibility.  If the transfer was not 
 38.25  reported to the local agency at the time of application, and the 
 38.26  applicant received medical assistance services during what would 
 38.27  have been the period of ineligibility if the transfer had been 
 38.28  reported, a cause of action exists against the transferee for 
 38.29  the cost of medical assistance services provided during the 
 38.30  period of ineligibility, or for the uncompensated amount of the 
 38.31  transfer that was not recovered from the transferor through the 
 38.32  implementation of a penalty period under this subdivision, 
 38.33  whichever is less.  The action may be brought by the state or 
 38.34  the local agency responsible for providing medical assistance 
 38.35  under chapter 256G.  The total uncompensated value is the fair 
 38.36  market value of the income or asset at the time it was given 
 39.1   away, sold, or disposed of, less the amount of compensation 
 39.2   received.  No cause of action exists for a transfer, unless:  
 39.3   (1) the transferee knew or should have known that the transfer 
 39.4   was being made by a person who was a resident of a long-term 
 39.5   care facility or was receiving that level of care in the 
 39.6   community at the time of the transfer; (2) the transferee knew 
 39.7   or should have known that the transfer was being made to assist 
 39.8   the person to qualify for or retain medical assistance 
 39.9   eligibility; or (3) the transferee actively solicited the 
 39.10  transfer with intent to assist the person to qualify for or 
 39.11  retain eligibility for medical assistance. 
 39.12     (b) If a calculation of a penalty period results in a 
 39.13  partial month, payments for medical assistance services shall be 
 39.14  reduced in an amount equal to the fraction, except that in 
 39.15  calculating the value of uncompensated transfers, if the total 
 39.16  value of all uncompensated transfers made in a month not 
 39.17  included in an existing penalty period does not exceed $500, 
 39.18  then such transfers shall be disregarded for each month prior to 
 39.19  the month of application for or during receipt of medical 
 39.20  assistance. 
 39.21     Sec. 15.  Minnesota Statutes 1995 Supplement, section 
 39.22  256B.0595, subdivision 3, is amended to read: 
 39.23     Subd. 3.  [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 
 39.24  (a) An institutionalized person is not ineligible for long-term 
 39.25  care services due to a transfer of assets for less than fair 
 39.26  market value if the asset transferred was a homestead and: 
 39.27     (1) title to the homestead was transferred to the 
 39.28  individual's 
 39.29     (i) spouse; 
 39.30     (ii) child who is under age 21; 
 39.31     (iii) blind or permanently and totally disabled child as 
 39.32  defined in the supplemental security income program; 
 39.33     (iv) sibling who has equity interest in the home and who 
 39.34  was residing in the home for a period of at least one year 
 39.35  immediately before the date of the individual's admission to the 
 39.36  facility; or 
 40.1      (v) son or daughter who was residing in the individual's 
 40.2   home for a period of at least two years immediately before the 
 40.3   date of the individual's admission to the facility, and who 
 40.4   provided care to the individual that, as certified by the 
 40.5   individual's attending physician, permitted the individual to 
 40.6   reside at home rather than in an institution or facility; 
 40.7      (2) a satisfactory showing is made that the individual 
 40.8   intended to dispose of the homestead at fair market value or for 
 40.9   other valuable consideration; or 
 40.10     (3) the local agency grants a waiver of the excess 
 40.11  resources created by the uncompensated transfer a penalty 
 40.12  resulting from a transfer for less than fair market value 
 40.13  because denial of eligibility would cause undue hardship for the 
 40.14  individual, based on imminent threat to the individual's health 
 40.15  and well-being.  Whenever an applicant or recipient is denied 
 40.16  eligibility because of a transfer for less than fair market 
 40.17  value, the local agency shall notify the applicant or recipient 
 40.18  that they may request a waiver of the penalty if the denial of 
 40.19  eligibility will cause undue hardship.  In evaluating a waiver, 
 40.20  the local agency shall take into account whether the individual 
 40.21  was the victim of financial exploitation, whether the individual 
 40.22  has made reasonable efforts to recover the transferred property 
 40.23  or resource, and other factors relevant to a determination of 
 40.24  hardship.  If the local agency does not approve a hardship 
 40.25  waiver, the local agency shall issue a written notice to the 
 40.26  individual stating the reasons for the denial and the process 
 40.27  for appealing the local agency's decision. 
 40.28     (b) When a waiver is granted under paragraph (a), clause 
 40.29  (3), a cause of action exists against the person to whom the 
 40.30  homestead was transferred for that portion of long-term care 
 40.31  services granted within: 
 40.32     (1) 30 months of a transfer made on or before August 10, 
 40.33  1993; 
 40.34     (2) 60 months if the homestead was transferred after August 
 40.35  10, 1993, to a trust or portion of a trust that is considered a 
 40.36  transfer of assets under federal law; or 
 41.1      (3) 36 months if transferred in any other manner after 
 41.2   August 10, 1993, 
 41.3   or the amount of the uncompensated transfer, whichever is less, 
 41.4   together with the costs incurred due to the action.  The action 
 41.5   may shall be brought by the state or unless the state delegates 
 41.6   this responsibility to the local agency responsible for 
 41.7   providing medical assistance under chapter 256G. 
 41.8      Sec. 16.  Minnesota Statutes 1994, section 256B.0595, is 
 41.9   amended by adding a subdivision to read: 
 41.10     Subd. 3a.  [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 
 41.11  (a) This subdivision applies to transfers involving recipients 
 41.12  of medical assistance that are made on or after its effective 
 41.13  date and to all transfers involving persons who apply for 
 41.14  medical assistance on or after its effective date, regardless of 
 41.15  when the transfer occurred, except that this subdivision does 
 41.16  not apply to transfers made prior to March 1, 1996.  A person is 
 41.17  not ineligible for medical assistance services due to a transfer 
 41.18  of assets for less than fair market value as described in 
 41.19  subdivision 1a if the asset transferred was a homestead and: 
 41.20     (1) title to the homestead was transferred to the 
 41.21  individual's relatives who are residing in the homestead and are 
 41.22  the individual's 
 41.23     (i) spouse; 
 41.24     (ii) child who is under age 21; 
 41.25     (iii) blind or permanently and totally disabled child as 
 41.26  defined in the supplemental security income program; 
 41.27     (iv) sibling who has equity interest in the home and who 
 41.28  was residing in the home for a period of at least one year 
 41.29  immediately before the date of the individual's admission to the 
 41.30  facility; or 
 41.31     (v) son or daughter who was residing in the individual's 
 41.32  home for a period of at least two years immediately before the 
 41.33  date of the individual's admission to the facility, and who 
 41.34  provided care to the individual that, as certified by the 
 41.35  individual's attending physician, permitted the individual to 
 41.36  reside at home rather than in an institution or facility; 
 42.1      (2) a satisfactory showing is made that the individual 
 42.2   intended to dispose of the homestead at fair market value or for 
 42.3   other valuable consideration; or 
 42.4      (3) the local agency grants a waiver of a penalty resulting 
 42.5   from a transfer for less than fair market value because denial 
 42.6   of eligibility would cause undue hardship for the individual and 
 42.7   there exists an imminent threat to the individual's health and 
 42.8   well-being.  Whenever an applicant or recipient is denied 
 42.9   eligibility because of a transfer for less than fair market 
 42.10  value, the local agency shall notify the applicant or recipient 
 42.11  that they may request a waiver of the penalty if the denial of 
 42.12  eligibility will cause undue hardship.  In evaluating a waiver, 
 42.13  the local agency shall take into account whether the individual 
 42.14  was the victim of financial exploitation, whether the individual 
 42.15  has made reasonable efforts to recover the transferred property 
 42.16  or resource, and other factors relevant to a determination of 
 42.17  hardship.  If the local agency does not approve a hardship 
 42.18  waiver, the local agency shall issue a written notice to the 
 42.19  individual stating the reasons for the denial and the process 
 42.20  for appealing the local agency's decision. 
 42.21     (b) When a waiver is granted under paragraph (a), clause 
 42.22  (3), a cause of action exists against the person to whom the 
 42.23  homestead was transferred for that portion of medical assistance 
 42.24  services granted within 72 months of the date the transferor 
 42.25  applied for medical assistance and satisfied all other 
 42.26  requirements for eligibility, or the amount of the uncompensated 
 42.27  transfer, whichever is less, together with the costs incurred 
 42.28  due to the action.  The action shall be brought by the state 
 42.29  unless the state delegates this responsibility to the local 
 42.30  agency responsible for providing medical assistance under 
 42.31  chapter 256G. 
 42.32     Sec. 17.  Minnesota Statutes 1995 Supplement, section 
 42.33  256B.0595, subdivision 4, is amended to read: 
 42.34     Subd. 4.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] An 
 42.35  institutionalized person who has made, or whose spouse has made 
 42.36  a transfer prohibited by subdivision 1, is not ineligible for 
 43.1   long-term care services if one of the following conditions 
 43.2   applies: 
 43.3      (1) the assets were transferred to the individual's spouse 
 43.4   or to another for the sole benefit of the spouse; or 
 43.5      (2) the institutionalized spouse, prior to being 
 43.6   institutionalized, transferred assets to a spouse, provided that 
 43.7   the spouse to whom the assets were transferred does not then 
 43.8   transfer those assets to another person for less than fair 
 43.9   market value.  (At the time when one spouse is 
 43.10  institutionalized, assets must be allocated between the spouses 
 43.11  as provided under section 256B.059); or 
 43.12     (3) the assets were transferred to the individual's child 
 43.13  who is blind or permanently and totally disabled as determined 
 43.14  in the supplemental security income program; or 
 43.15     (4) a satisfactory showing is made that the individual 
 43.16  intended to dispose of the assets either at fair market value or 
 43.17  for other valuable consideration; or 
 43.18     (5) the local agency determines that denial of eligibility 
 43.19  for long-term care services would work an undue hardship and 
 43.20  grants a waiver of excess assets a penalty resulting from a 
 43.21  transfer for less than fair market value based on an imminent 
 43.22  threat to the individual's health and well-being.  Whenever an 
 43.23  applicant or recipient is denied eligibility because of a 
 43.24  transfer for less than fair market value, the local agency shall 
 43.25  notify the applicant or recipient that they may request a waiver 
 43.26  of the penalty if the denial of eligibility will cause undue 
 43.27  hardship.  In evaluating a waiver, the local agency shall take 
 43.28  into account whether the individual was the victim of financial 
 43.29  exploitation, whether the individual has made reasonable efforts 
 43.30  to recover the transferred property or resource, and other 
 43.31  factors relevant to a determination of hardship.  If the local 
 43.32  agency does not approve a hardship waiver, the local agency 
 43.33  shall issue a written notice to the individual stating the 
 43.34  reasons for the denial and the process for appealing the local 
 43.35  agency's decision.  When a waiver is granted, a cause of action 
 43.36  exists against the person to whom the assets were transferred 
 44.1   for that portion of long-term care services granted within: 
 44.2      (i) 30 months of a transfer made on or before August 10, 
 44.3   1993; 
 44.4      (ii) 60 months of a transfer if the assets were transferred 
 44.5   after August 30, 1993, to a trust or portion of a trust that is 
 44.6   considered a transfer of assets under federal law; or 
 44.7      (iii) 36 months of a transfer if transferred in any other 
 44.8   manner after August 10, 1993, 
 44.9   or the amount of the uncompensated transfer, whichever is less, 
 44.10  together with the costs incurred due to the action.  The action 
 44.11  may shall be brought by the state or unless the state delegates 
 44.12  this responsibility to the local agency responsible for 
 44.13  providing medical assistance under this chapter; or 
 44.14     (6) for transfers occurring after August 10, 1993, the 
 44.15  assets were transferred by the person or person's spouse:  (i) 
 44.16  into a trust established solely for the benefit of a son or 
 44.17  daughter of any age who is blind or disabled as defined by the 
 44.18  Supplemental Security Income program; or (ii) into a trust 
 44.19  established solely for the benefit of an individual who is under 
 44.20  65 years of age who is disabled as defined by the Supplemental 
 44.21  Security Income program. 
 44.22     Sec. 18.  Minnesota Statutes 1994, section 256B.0595, is 
 44.23  amended by adding a subdivision to read: 
 44.24     Subd. 4a.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] This 
 44.25  subdivision applies to transfers involving recipients of medical 
 44.26  assistance that are made on or after its effective date and to 
 44.27  all transfers involving persons who apply for medical assistance 
 44.28  on or after its effective date, regardless of when the transfer 
 44.29  occurred, except that this subdivision does not apply to 
 44.30  transfers made prior to March 1, 1996.  A person or a person's 
 44.31  spouse who has made a transfer prohibited by subdivision 1a is 
 44.32  not ineligible for medical assistance services if one of the 
 44.33  following conditions applies: 
 44.34     (1) the assets or income were transferred to the 
 44.35  individual's spouse or to another for the sole benefit of the 
 44.36  spouse, except that after eligibility is established, transfers 
 45.1   to a spouse are permitted only to comply with the provisions of 
 45.2   section 256B.059; or 
 45.3      (2) the institutionalized spouse, prior to being 
 45.4   institutionalized, transferred assets or income to a spouse, 
 45.5   provided that the spouse to whom the assets or income were 
 45.6   transferred does not then transfer those assets or income to 
 45.7   another person for less than fair market value.  (At the time 
 45.8   when one spouse is institutionalized, assets must be allocated 
 45.9   between the spouses as provided under section 256B.059); or 
 45.10     (3) the assets or income were transferred to a trust for 
 45.11  the sole benefit of the individual's child who is blind or 
 45.12  permanently and totally disabled as determined in the 
 45.13  supplemental security income program and the trust reverts to 
 45.14  the state upon the disabled child's death to the extent medical 
 45.15  assistance has paid for services for the child.  This paragraph 
 45.16  paragraph applies to a trust established after the commissioner 
 45.17  publishes a notice in the State Register that the commissioner 
 45.18  has been authorized to implement this paragraph due to a change 
 45.19  in federal law or the approval of a federal waiver; or 
 45.20     (4) a satisfactory showing is made that the individual 
 45.21  intended to dispose of the assets or income either at fair 
 45.22  market value or for other valuable consideration; or 
 45.23     (5) the local agency determines that denial of eligibility 
 45.24  for medical assistance services would work an undue hardship and 
 45.25  grants a waiver of a penalty resulting from a transfer for less 
 45.26  than fair market value because there exists an imminent threat 
 45.27  to the individual's health and well-being.  Whenever an 
 45.28  applicant or recipient is denied eligibility because of a 
 45.29  transfer for less than fair market value, the local agency shall 
 45.30  notify the applicant or recipient that they may request a waiver 
 45.31  of the penalty if the denial of eligibility will cause undue 
 45.32  hardship.  In evaluating a waiver, the local agency shall take 
 45.33  into account whether the individual was the victim of financial 
 45.34  exploitation, whether the individual has made reasonable efforts 
 45.35  to recover the transferred property or resource, and other 
 45.36  factors relevant to a determination of hardship.  If the local 
 46.1   agency does not approve a hardship waiver, the local agency 
 46.2   shall issue a written notice to the individual stating the 
 46.3   reasons for the denial and the process for appealing the local 
 46.4   agency's decision. When a waiver is granted, a cause of action 
 46.5   exists against the person to whom the assets were transferred 
 46.6   for that portion of medical assistance services granted within 
 46.7   72 months of the date the transferor applied for medical 
 46.8   assistance and satisfied all other requirements for eligibility, 
 46.9   or the amount of the uncompensated transfer, whichever is less, 
 46.10  together with the costs incurred due to the action.  The action 
 46.11  shall be brought by the state unless the state delegates this 
 46.12  responsibility to the local agency responsible for providing 
 46.13  medical assistance under this chapter. 
 46.14     Sec. 19.  Minnesota Statutes 1994, section 256B.0595, is 
 46.15  amended by adding a subdivision to read: 
 46.16     Subd. 8.  [NOTICE OF RIGHTS.] If a period of ineligibility 
 46.17  is imposed under subdivision 2 or 2a, the local agency shall 
 46.18  inform the applicant or recipient subject to the penalty of the 
 46.19  person's rights under section 325F.71, subdivision 2. 
 46.20     Sec. 20.  Minnesota Statutes 1995 Supplement, section 
 46.21  256B.0625, subdivision 19a, is amended to read:  
 46.22     Subd. 19a.  [PERSONAL CARE SERVICES.] Medical assistance 
 46.23  covers personal care services in a recipient's home.  To qualify 
 46.24  for personal care services, recipients or responsible parties 
 46.25  must be able to identify their the recipient's needs, direct and 
 46.26  evaluate task accomplishment, and assure their provide for 
 46.27  health and safety.  Approved hours may be used outside the home 
 46.28  when normal life activities take them outside the home and when, 
 46.29  without the provision of personal care, their health and safety 
 46.30  would be jeopardized.  Total hours for services, whether 
 46.31  actually performed inside or outside the recipient's home, 
 46.32  cannot exceed that which is otherwise allowed for personal care 
 46.33  services in an in-home setting according to section 256B.0627.  
 46.34  Medical assistance does not cover personal care services for 
 46.35  residents of a hospital, nursing facility, intermediate care 
 46.36  facility, health care facility licensed by the commissioner of 
 47.1   health, or unless a resident who is otherwise eligible is on 
 47.2   leave from the facility and the facility either pays for the 
 47.3   personal care services or forgoes the facility per diem for the 
 47.4   leave days that personal care services are used.  All personal 
 47.5   care services must be provided according to section 256B.0627.  
 47.6   Personal care services may not be reimbursed if the personal 
 47.7   care assistant is the spouse or legal guardian of the recipient 
 47.8   or the parent of a recipient under age 18, or the responsible 
 47.9   party or the foster care provider of a recipient who cannot 
 47.10  direct the recipient's own care unless, in the case of a foster 
 47.11  care provider, a county or state case manager visits the 
 47.12  recipient as needed, but not less than every six months, to 
 47.13  monitor the health and safety of the recipient and to ensure the 
 47.14  goals of the care plan are met.  Parents of adult recipients, 
 47.15  adult children of the recipient or adult siblings of the 
 47.16  recipient may be reimbursed for personal care services if they 
 47.17  are not the recipient's legal guardian and are granted a waiver 
 47.18  under section 256B.0627.  
 47.19     Sec. 21.  Minnesota Statutes 1995 Supplement, section 
 47.20  256B.0628, subdivision 2, is amended to read: 
 47.21     Subd. 2.  [DUTIES.] (a) The commissioner may contract with 
 47.22  or employ qualified registered nurses and necessary support 
 47.23  staff, or contract with qualified agencies, to provide home care 
 47.24  prior authorization and review services for medical assistance 
 47.25  recipients who are receiving home care services. 
 47.26     (b) Reimbursement for the prior authorization function 
 47.27  shall be made through the medical assistance administrative 
 47.28  authority.  The state shall pay the nonfederal share.  The 
 47.29  functions will be to: 
 47.30     (1) assess the recipient's individual need for services 
 47.31  required to be cared for safely in the community; 
 47.32     (2) ensure that a service plan that meets the recipient's 
 47.33  needs is developed by the appropriate agency or individual; 
 47.34     (3) ensure cost-effectiveness of medical assistance home 
 47.35  care services; 
 47.36     (4) recommend the approval or denial of the use of medical 
 48.1   assistance funds to pay for home care services; 
 48.2      (5) reassess the recipient's need for and level of home 
 48.3   care services at a frequency determined by the commissioner; and 
 48.4      (6) conduct on-site assessments when determined necessary 
 48.5   by the commissioner and recommend changes to care plans that 
 48.6   will provide more efficient and appropriate home care. 
 48.7      (c) In addition, the commissioner or the commissioner's 
 48.8   designee may: 
 48.9      (1) review service plans and reimbursement data for 
 48.10  utilization of services that exceed community-based standards 
 48.11  for home care, inappropriate home care services, medical 
 48.12  necessity, home care services that do not meet quality of care 
 48.13  standards, or unauthorized services and make appropriate 
 48.14  referrals within the department or to other appropriate entities 
 48.15  based on the findings; 
 48.16     (2) assist the recipient in obtaining services necessary to 
 48.17  allow the recipient to remain safely in or return to the 
 48.18  community; 
 48.19     (3) coordinate home care services with other medical 
 48.20  assistance services under section 256B.0625; 
 48.21     (4) assist the recipient with problems related to the 
 48.22  provision of home care services; and 
 48.23     (5) assure the quality of home care services.; and 
 48.24     (6) assure that all liable third-party payers including 
 48.25  Medicare have been used prior to medical assistance for home 
 48.26  care services, including but not limited to, home health agency, 
 48.27  elected hospice benefit, waivered services, alternative care 
 48.28  program services, and personal care services. 
 48.29     (d) For the purposes of this section, "home care services"  
 48.30  means medical assistance services defined under section 
 48.31  256B.0625, subdivisions 6a, 7, and 19a. 
 48.32     Sec. 22.  [256B.07] [MEDICARE MAXIMIZATION PROGRAM.] 
 48.33     Subdivision 1.  [DEFINITION.] (a) "Dual entitlees" means 
 48.34  recipients eligible for either the medical assistance program or 
 48.35  the alternative care program who are also eligible for the 
 48.36  federal Medicare program.  
 49.1      (b) For purposes of this section "home care services" means 
 49.2   home health agency services, private duty nursing services, 
 49.3   personal care assistant services, waivered services, alternative 
 49.4   care program services, hospice services, rehabilitation therapy 
 49.5   services, and medical supplies and equipment. 
 49.6      Subd. 2.  [TECHNICAL ASSISTANCE TO PROVIDERS.] (a) The 
 49.7   commissioner shall establish a technical assistance program to 
 49.8   require providers of services and equipment under this section 
 49.9   to maximize collections from the federal Medicare program.  The 
 49.10  technical assistance may include the provision of materials to 
 49.11  help providers determine those services and equipment likely to 
 49.12  be reimbursed by Medicare.  The technical assistance may also 
 49.13  include the provision of computer software to providers to 
 49.14  assist in this process.  The commissioner may expand the 
 49.15  technical assistance program to include providers of other 
 49.16  services under this chapter. 
 49.17     (b) Any provider of home care services enrolled in the 
 49.18  medical assistance program, or county public health nursing 
 49.19  agency responsible for personal care assessments, or county case 
 49.20  managers for alternative care or medical assistance waiver 
 49.21  programs, is required to use the method developed and supplied 
 49.22  by the department of human services for determining Medicare 
 49.23  coverage for home care equipment and services provided to dual 
 49.24  entitlees to ensure appropriate billing of Medicare.  The method 
 49.25  will be developed in two phases; the first phase is a manual 
 49.26  system effective July 1, 1996, and the second phase will 
 49.27  automate the manual procedure by expanding the current Medicaid 
 49.28  Management Information System (MMIS) effective January 1, 1997.  
 49.29  Both methods will determine Medicare coverage for the dates of 
 49.30  service, Medicare coverage for home care services, and create an 
 49.31  audit trail including reports.  Both methods will be linked to 
 49.32  prior authorization, therefore, either method must be used 
 49.33  before home care services are authorized and when there is a 
 49.34  change of condition affecting medical assistance authorization.  
 49.35  The department will conduct periodic reviews of participant 
 49.36  performance with the method and upon demonstrating appropriate 
 50.1   referral and billing of Medicare, participants may be determined 
 50.2   exempt from regular performance audits.  
 50.3      Subd. 3.  [REFERRALS TO MEDICARE CERTIFIED PROVIDERS 
 50.4   REQUIRED.] Non-Medicare certified and nonparticipating Medicare 
 50.5   certified home care service providers must refer dual eligible 
 50.6   recipients to Medicare certified providers when Medicare is 
 50.7   determined to be the appropriate payer for supplies and 
 50.8   equipment or services.  Non-Medicare certified and 
 50.9   nonparticipating Medicare certified home care service providers 
 50.10  will be terminated from participation in the medical assistance 
 50.11  program for failure to make such referrals. 
 50.12     Subd. 4.  [MEDICARE CERTIFICATION REQUIREMENT.] Medicare 
 50.13  certification is required of all medical assistance enrolled 
 50.14  home care service providers as defined in subdivision 1 within 
 50.15  one year of the date the Minnesota department of health gives 
 50.16  notice to the department that initial Medicare surveys will 
 50.17  resume. 
 50.18     Subd. 5.  [ADVISORY COMMITTEE.] The commissioner shall 
 50.19  establish an advisory committee comprised of home care services 
 50.20  recipients, providers, county public health nurses, home care 
 50.21  and county nursing associations, and department of human 
 50.22  services staff to make recommendations to the Medicare 
 50.23  maximization program.  The recommendations shall include:  
 50.24  nursing practice issues as they relate to home care services 
 50.25  funded by Medicare and medical assistance; and streamlining 
 50.26  assessment, prior authorization, and up-front payer 
 50.27  determination processes to achieve administrative efficiencies. 
 50.28     Sec. 23.  Minnesota Statutes 1995 Supplement, section 
 50.29  256B.0913, subdivision 15a, is amended to read: 
 50.30     Subd. 15a.  [REIMBURSEMENT RATE; ANOKA COUNTY.] 
 50.31  Notwithstanding subdivision 14, paragraph (e), or any other law 
 50.32  to the contrary, for services rendered on or after effective 
 50.33  January 1, 1996, Anoka county may pay vendors, and the 
 50.34  commissioner shall reimburse the county, for actual costs up to 
 50.35  a limit which is the maximum rate in effect on December 31, 
 50.36  1995, plus half the difference between that rate and the maximum 
 51.1   allowed state county's maximum allowed rate for home health aide 
 51.2   services per 15-minute unit is $4.39, and its maximum allowed 
 51.3   rate for homemaker services per 15-minute unit is $2.90.  Any 
 51.4   adjustments in fiscal year 1997 to the maximum allowed rates for 
 51.5   home health aide or homemaker services for Anoka county shall be 
 51.6   calculated from the maximum rate in effect on January 1, 1996.  
 51.7      Sec. 24.  Minnesota Statutes 1994, section 256B.0913, is 
 51.8   amended by adding a subdivision to read: 
 51.9      Subd. 15b.  [REIMBURSEMENT RATE; AITKIN COUNTY.] 
 51.10  Notwithstanding subdivision 14, paragraph (e), effective April 
 51.11  1, 1996, Aitkin county's maximum allowed rate for in-home 
 51.12  respite care services is $6.62 per 30-minute unit.  Any 
 51.13  adjustments in fiscal year 1997 to the maximum allowed rate for 
 51.14  in-home respite care services for Aitkin county shall be 
 51.15  calculated from the maximum rate in effect on April 1, 1996. 
 51.16     Sec. 25.  Minnesota Statutes 1994, section 256B.0913, is 
 51.17  amended by adding a subdivision to read: 
 51.18     Subd. 15c.  [REIMBURSEMENT RATE; POLK AND PENNINGTON 
 51.19  COUNTIES.] Notwithstanding subdivision 14, paragraph (e), 
 51.20  effective July 1, 1996, Polk and Pennington counties' maximum 
 51.21  allowed rate for homemaker services is $6.18 per 30-minute 
 51.22  unit.  Any adjustments in fiscal year 1997 to the maximum 
 51.23  allowed rate for homemaker services for Polk and Pennington 
 51.24  counties shall be calculated from the maximum rate in effect on 
 51.25  July 1, 1996.  
 51.26     Sec. 26.  Minnesota Statutes 1995 Supplement, section 
 51.27  256B.0915, subdivision 3a, is amended to read: 
 51.28     Subd. 3a.  [REIMBURSEMENT RATE; ANOKA COUNTY.] 
 51.29  Notwithstanding subdivision 3, paragraph (h), or any other law 
 51.30  to the contrary, for services rendered on or after effective 
 51.31  January 1, 1996, Anoka county may pay vendors, and the 
 51.32  commissioner shall reimburse the county, for actual costs up to 
 51.33  a limit which is the maximum rate in effect on December 31, 
 51.34  1995, plus half the difference between that rate and the maximum 
 51.35  allowed state county's maximum allowed rate for home health aide 
 51.36  services per 15-minute unit is $4.43, and its maximum allowed 
 52.1   rate for homemaker services per 15-minute unit is $2.93.  Any 
 52.2   adjustments in fiscal year 1997 to the maximum allowed rates for 
 52.3   home health aide or homemaker services for Anoka county shall be 
 52.4   calculated from the maximum rate in effect on January 1, 1996. 
 52.5      Sec. 27.  Minnesota Statutes 1994, section 256B.0915, is 
 52.6   amended by adding a subdivision to read: 
 52.7      Subd. 3b.  [REIMBURSEMENT RATE; AITKIN COUNTY.] 
 52.8   Notwithstanding subdivision 3, paragraph (h), effective April 1, 
 52.9   1996, Aitkin county's maximum allowed rate for in-home respite 
 52.10  care services is $6.67 per 30-minute unit.  Any adjustments in 
 52.11  fiscal year 1997 to the maximum allowed rate for in-home respite 
 52.12  care services for Aitkin county shall be calculated from the 
 52.13  maximum rate in effect on April 1, 1996. 
 52.14     Sec. 28.  Minnesota Statutes 1994, section 256B.0915, is 
 52.15  amended by adding a subdivision to read: 
 52.16     Subd. 3c.  [REIMBURSEMENT RATE; POLK AND PENNINGTON 
 52.17  COUNTIES.] Notwithstanding subdivision 3, paragraph (h), 
 52.18  effective July 1, 1996, Polk and Pennington counties' maximum 
 52.19  allowed rate for homemaker services is $6.25 per 30-minute 
 52.20  unit.  Any adjustments in fiscal year 1997 to the maximum 
 52.21  allowed rate for homemaker services for Polk and Pennington 
 52.22  counties shall be calculated from the maximum rate in effect on 
 52.23  July 1, 1996.  
 52.24     Sec. 29.  Minnesota Statutes 1994, section 256B.15, is 
 52.25  amended by adding a subdivision to read: 
 52.26     Subd. 1b.  [CLAIMS ON THE ESTATE OF A PREDECEASED 
 52.27  SPOUSE.] Upon the death of a spouse who did not receive medical 
 52.28  assistance and who predeceases a spouse who did or does receive 
 52.29  medical assistance, a claim for the total amount paid for 
 52.30  medical assistance rendered for the surviving spouse through the 
 52.31  date the deceased spouse died shall be filed against the 
 52.32  deceased spouse's estate in the court having jurisdiction to 
 52.33  probate the estate.  The claim shall be filed if medical 
 52.34  assistance was rendered for the surviving spouse under any one 
 52.35  of the circumstances in subdivision 1a, paragraphs (a), (b), or 
 52.36  (c).  Claims under this subdivision shall have the same priority 
 53.1   for purposes of section 524.3-805, and the same exceptions with 
 53.2   respect to statutes of limitations as claims under subdivision 
 53.3   1a. 
 53.4      Sec. 30.  Minnesota Statutes 1994, section 256B.15, is 
 53.5   amended by adding a subdivision to read: 
 53.6      Subd. 2a.  [LIMITATIONS ON CLAIMS ON THE ESTATE OF A 
 53.7   PREDECEASED SPOUSE.] A claim under subdivision 1b shall include 
 53.8   only the total amount of medical assistance rendered after age 
 53.9   55 or during a period of institutionalization described in 
 53.10  subdivision 1a, clause (b), and the total amount of general 
 53.11  assistance medical care rendered, and shall not include 
 53.12  interest.  Claims that have been allowed but not paid shall bear 
 53.13  interest according to section 524.3-806, paragraph (d).  A claim 
 53.14  against the estate of a spouse who did not receive medical 
 53.15  assistance who predeceases the spouse who did receive medical 
 53.16  assistance, for medical assistance rendered for the spouse, is 
 53.17  limited to the value of the assets of the estate that were 
 53.18  marital property or jointly owned property at any time during 
 53.19  the marriage. 
 53.20     Sec. 31.  Minnesota Statutes 1994, section 256B.35, 
 53.21  subdivision 1, is amended to read: 
 53.22     Subdivision 1.  [PERSONAL NEEDS ALLOWANCE.] (a) 
 53.23  Notwithstanding any law to the contrary, welfare allowances for 
 53.24  clothing and personal needs for individuals receiving medical 
 53.25  assistance while residing in any skilled nursing home, 
 53.26  intermediate care facility, or medical institution including 
 53.27  recipients of supplemental security income, in this state shall 
 53.28  not be less than $45 per month from all sources.  When benefit 
 53.29  amounts for social security or supplemental security income 
 53.30  recipients are increased pursuant to United States Code, title 
 53.31  42, sections 415(i) and 1382f, the commissioner shall, effective 
 53.32  in the month in which the increase takes effect, increase by the 
 53.33  same percentage to the nearest whole dollar the clothing and 
 53.34  personal needs allowance for individuals receiving medical 
 53.35  assistance while residing in any skilled nursing home, medical 
 53.36  institution, or intermediate care facility.  The commissioner 
 54.1   shall provide timely notice to local agencies, providers, and 
 54.2   recipients of increases under this provision. 
 54.3      (b) The personal needs allowance may be paid as part of the 
 54.4   Minnesota supplemental aid program, notwithstanding the 
 54.5   provisions of section 256D.37, subdivision 2, and payments to 
 54.6   recipients of Minnesota supplemental aid may be made once each 
 54.7   three months covering liabilities that accrued during the 
 54.8   preceding three months. 
 54.9      (c) The personal needs allowance shall be increased to 
 54.10  include income garnished for child support under a court order, 
 54.11  up to a maximum of $250 per month but only to the extent that 
 54.12  the amount garnished is not deducted as a monthly allowance for 
 54.13  children under section 256B.0575, paragraph (a), clause (5). 
 54.14     Sec. 32.  Minnesota Statutes 1994, section 256B.37, 
 54.15  subdivision 5, is amended to read: 
 54.16     Subd. 5.  [PRIVATE BENEFITS TO BE USED FIRST.] Private 
 54.17  accident and health care coverage including Medicare for medical 
 54.18  services is primary coverage and must be exhausted before 
 54.19  medical assistance is paid for medical services including home 
 54.20  health care, personal care assistant services, hospice, or 
 54.21  services covered under a Health Care Financing Administration 
 54.22  (HCFA) waiver.  When a person who is otherwise eligible for 
 54.23  medical assistance has private accident or health care coverage, 
 54.24  including Medicare or a prepaid health plan, the private health 
 54.25  care benefits available to the person must be used first and to 
 54.26  the fullest extent. 
 54.27     Sec. 33.  Minnesota Statutes 1995 Supplement, section 
 54.28  256B.69, subdivision 3a, is amended to read: 
 54.29     Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
 54.30  implementing the general assistance medical care, or medical 
 54.31  assistance prepayment program within a county, must include the 
 54.32  county board in the process of development, approval, and 
 54.33  issuance of the request for proposals to provide services to 
 54.34  eligible individuals within the proposed county.  County boards 
 54.35  must be given reasonable opportunity to make recommendations 
 54.36  regarding the development, issuance, review of responses, and 
 55.1   changes needed in the request for proposals.  The commissioner 
 55.2   must provide county boards the opportunity to review each 
 55.3   proposal based on the identification of community needs under 
 55.4   chapters 145A and 256E and county advocacy activities.  If a 
 55.5   county board finds that a proposal does not address certain 
 55.6   community needs, the county board and commissioner shall 
 55.7   continue efforts for improving the proposal and network prior to 
 55.8   the approval of the contract.  The county board shall make 
 55.9   recommendations regarding the approval of local networks and 
 55.10  their operations to ensure adequate availability and access to 
 55.11  covered services.  The provider or health plan must respond 
 55.12  directly to county advocates and the state prepaid medical 
 55.13  assistance ombudsperson regarding service delivery and must be 
 55.14  accountable to the state regarding contracts with medical 
 55.15  assistance and general assistance medical care funds.  The 
 55.16  county board may recommend a maximum number of participating 
 55.17  health plans after considering the size of the enrolling 
 55.18  population; ensuring adequate access and capacity; considering 
 55.19  the client and county administrative complexity; and considering 
 55.20  the need to promote the viability of locally developed health 
 55.21  plans.  The commissioner shall actively seek to develop a 
 55.22  mutually agreeable timetable prior to the development of the 
 55.23  request for proposal, there shall be established a mutually 
 55.24  agreed upon timetable.  This process shall in no way delay the 
 55.25  department's ability to secure and finalize contracts for the 
 55.26  medical assistance or general assistance medical care prepayment 
 55.27  program. 
 55.28     (b) The prepaid MinnesotaCare program may be implemented or 
 55.29  expanded by the commissioner without regard to whether or not a 
 55.30  county establishes a joint purchaser demonstration project under 
 55.31  section 256B.78.  In a county that establishes a joint purchaser 
 55.32  demonstration project, MinnesotaCare enrollees must be offered 
 55.33  the option to enroll under the demonstration project once 
 55.34  enrollment in the project begins. 
 55.35     (c) The commissioner shall seek a federal waiver to allow a 
 55.36  fee-for-service plan option to MinnesotaCare enrollees.  The 
 56.1   commissioner shall develop an increase of the premium fees 
 56.2   required under section 256.9356 up to 20 percent of the premium 
 56.3   fees for the enrollees who elect the fee-for-service option.  
 56.4   Prior to implementation, the commissioner shall submit this fee 
 56.5   schedule to the chair and ranking minority member of the senate 
 56.6   health care committee, the senate health care and family 
 56.7   services funding division, the house of representatives health 
 56.8   and human services committee, and the house of representatives 
 56.9   health and human services finance division. 
 56.10     Sec. 34.  Minnesota Statutes 1995 Supplement, section 
 56.11  256B.69, subdivision 4, is amended to read: 
 56.12     Subd. 4.  [LIMITATION OF CHOICE.] The commissioner shall 
 56.13  develop criteria to determine when limitation of choice may be 
 56.14  implemented in the experimental counties.  The criteria shall 
 56.15  ensure that all eligible individuals in the county have 
 56.16  continuing access to the full range of medical assistance 
 56.17  services as specified in subdivision 6.  The commissioner shall 
 56.18  exempt the following persons from participation in the project, 
 56.19  in addition to those who do not meet the criteria for limitation 
 56.20  of choice:  (1) persons eligible for medical assistance 
 56.21  according to section 256B.055, subdivision 1; (2) persons 
 56.22  eligible for medical assistance due to blindness or disability 
 56.23  as determined by the social security administration or the state 
 56.24  medical review team, unless:  (i) they are 65 years of age or 
 56.25  older, or (ii) they are eligible for medical assistance 
 56.26  according to section 256B.055, subdivision 12, or (iii) unless 
 56.27  they reside in Itasca county or they reside in a county in which 
 56.28  the commissioner conducts a pilot project under a waiver granted 
 56.29  pursuant to section 1115 of the Social Security Act; (3) 
 56.30  recipients who currently have private coverage through a health 
 56.31  maintenance organization; (4) recipients who are eligible for 
 56.32  medical assistance by spending down excess income for medical 
 56.33  expenses other than the nursing facility per diem 
 56.34  expense; and (5) recipients who receive benefits under the 
 56.35  Refugee Assistance Program, established under United States 
 56.36  Code, title 8, section 1522(e); (6) children who are both 
 57.1   determined to be severely emotionally disturbed and receiving 
 57.2   case management services according to section 256B.0625, 
 57.3   subdivision 20; and (7) adults who are both determined to be 
 57.4   seriously and persistently mentally ill and received case 
 57.5   management services according to section 256B.0625, subdivision 
 57.6   20.  Children under age 21 who are in foster placement may 
 57.7   enroll in the project on an elective basis. Individuals excluded 
 57.8   under clauses (6) and (7) may choose to enroll on an elective 
 57.9   basis.  The commissioner may allow persons with a one-month 
 57.10  spenddown who are otherwise eligible to enroll to voluntarily 
 57.11  enroll or remain enrolled, if they elect to prepay their monthly 
 57.12  spenddown to the state.  Beginning on or after July 1, 1997, the 
 57.13  commissioner may require those individuals to enroll in the 
 57.14  prepaid medical assistance program who otherwise would have been 
 57.15  excluded under clauses (1) and (3) and under Minnesota Rules, 
 57.16  part 9500.1452, subpart 2, items H, K, and L.  Before limitation 
 57.17  of choice is implemented, eligible individuals shall be notified 
 57.18  and after notification, shall be allowed to choose only among 
 57.19  demonstration providers.  The commissioner may assign an 
 57.20  individual with private coverage through a health maintenance 
 57.21  organization, to the same health maintenance organization for 
 57.22  medical assistance coverage, if the health maintenance 
 57.23  organization is under contract for medical assistance in the 
 57.24  individual's county of residence.  After initially choosing a 
 57.25  provider, the recipient is allowed to change that choice only at 
 57.26  specified times as allowed by the commissioner.  If a 
 57.27  demonstration provider ends participation in the project for any 
 57.28  reason, a recipient enrolled with that provider must select a 
 57.29  new provider but may change providers without cause once more 
 57.30  within the first 60 days after enrollment with the second 
 57.31  provider. 
 57.32     Sec. 35.  Minnesota Statutes 1995 Supplement, section 
 57.33  256B.69, subdivision 5b, is amended to read: 
 57.34     Subd. 5b.  [PROSPECTIVE REIMBURSEMENT RATES.] For prepaid 
 57.35  medical assistance and general assistance medical care program 
 57.36  contract rates set by the commissioner under subdivision 5 and 
 58.1   effective on or after January 1, 1996 1997, through December 31, 
 58.2   1996 1998, capitation rates for nonmetropolitan counties shall 
 58.3   on a weighted average be no less than 85 percent of the 
 58.4   capitation rates for metropolitan counties, excluding Hennepin 
 58.5   county. 
 58.6      Sec. 36.  Minnesota Statutes 1995 Supplement, section 
 58.7   256B.69, subdivision 21, is amended to read: 
 58.8      Subd. 21.  [PREPAYMENT COORDINATOR.] The local agency 
 58.9   county board shall designate a prepayment coordinator to assist 
 58.10  the state agency in implementing this section and section 
 58.11  256D.03, subdivision 4.  Assistance must include educating 
 58.12  recipients about available health care options, enrolling 
 58.13  recipients under subdivision 5, providing necessary eligibility 
 58.14  and enrollment information to health plans and the state agency, 
 58.15  and coordinating complaints and appeals with the ombudsman 
 58.16  established in subdivision 18. 
 58.17     Sec. 37.  Minnesota Statutes 1994, section 256B.69, is 
 58.18  amended by adding a subdivision to read: 
 58.19     Subd. 24.  [SOCIAL SERVICE AND PUBLIC HEALTH COSTS.] The 
 58.20  commissioner shall report on recommendations to the legislature 
 58.21  by January 15, 1997, identifying county social services and 
 58.22  public health administrative costs for each target population 
 58.23  that should be excluded from the overall capitation rate. 
 58.24     Sec. 38.  [256B.78] [JOINT PURCHASER DEMONSTRATION 
 58.25  PROJECTS.] 
 58.26     Subdivision 1.  [OBJECTIVES.] The objectives of the 
 58.27  demonstration project are to promote the development of local 
 58.28  provider networks and retain the availability and accountability 
 58.29  of local service providers; further define the county and state 
 58.30  roles, authorities, and functions related to publicly reimbursed 
 58.31  and publicly provided health and social services, including 
 58.32  services funded by county property tax revenues; promote better 
 58.33  coordination of services for all enrollees and target 
 58.34  populations; further define an outcome-based system, including 
 58.35  definitions of outcomes and processes for collecting, 
 58.36  publicizing, and utilizing outcome data; facilitate appropriate 
 59.1   competition, consumer choice, and entry of providers into the 
 59.2   marketplace while defining appropriate publicly operated safety 
 59.3   net services; identify mechanisms to ensure short-term and 
 59.4   long-term control of costs and avoidance of cost shifting; 
 59.5   define adequate financing within a capitated allocation; develop 
 59.6   risk management and risk adjustment strategies, which may 
 59.7   include stop-loss protection, reinsurance, and retrospective 
 59.8   risk adjustment; and define state-county shares of the cost 
 59.9   savings achieved for a return on the public investment.  
 59.10     Subd. 2.  [AUTHORIZATION.] (a) Subject to federal waiver 
 59.11  approval, a county or group of counties may establish a 
 59.12  county-based joint purchaser demonstration project, for services 
 59.13  provided to eligible individuals under medical assistance, 
 59.14  except medical assistance recipients who are age 65 or older who 
 59.15  reside in the Twin Cities seven-county metropolitan area, 
 59.16  general assistance medical care, MinnesotaCare, state health and 
 59.17  social service grants, and county-funded programs for these or 
 59.18  other participants.  The county must purchase or arrange for the 
 59.19  purchase of all covered services for the targeted populations 
 59.20  served under the demonstration project. 
 59.21     (b) As part of a project, the county may explore the option 
 59.22  of direct contracting with local providers, provider networks, 
 59.23  or public providers.  If a county or group of counties 
 59.24  implements direct contracting, the county or counties shall be 
 59.25  considered a health plan company for purposes of Minnesota 
 59.26  Statutes, section 62Q.19, and must meet the requirements of 
 59.27  Minnesota Statutes, section 62Q.19.  At the option of the county 
 59.28  board, the project may include county employees or employees of 
 59.29  other units of local government.  Groups of counties 
 59.30  participating in a joint purchaser demonstration project must 
 59.31  execute a joint powers agreement in accordance with Minnesota 
 59.32  Statutes, section 471.59, for purposes of the demonstration 
 59.33  project. 
 59.34     Subd. 3.  [LONG-TERM CARE OPTIONS PROJECT EXCEPTION.] 
 59.35  Medical assistance recipients who are age 65 or older who reside 
 59.36  in the seven-county metropolitan area shall not be included in a 
 60.1   joint purchaser demonstration project.  Medical assistance 
 60.2   recipients who are age 65 or older who reside outside the 
 60.3   seven-county metropolitan area may be included in a joint 
 60.4   purchaser demonstration project.  A county board or group of 
 60.5   county boards, other than the seven metropolitan counties, that 
 60.6   notifies the commissioner of intent to participate in a 
 60.7   demonstration project, in accordance with subdivision 8, must 
 60.8   include notice of their intent and preference for participation 
 60.9   in the long-term care options project.  Counties participating 
 60.10  in the long-term care options project must meet all requirements 
 60.11  of the federal waivers governing the long-term care options 
 60.12  project demonstration. 
 60.13     Subd. 4.  [PROJECT SCOPE.] (a) A county or group of 
 60.14  counties may establish a demonstration project or projects to 
 60.15  purchase all covered services to the categorically and medically 
 60.16  needy families with children and adults without children. 
 60.17     (b) A county or group of counties may establish a separate 
 60.18  demonstration project or projects to purchase or coordinate 
 60.19  covered services for disabled individuals, including those with 
 60.20  mental illness, chemical dependency, developmental disabilities 
 60.21  and physical disabilities, and for persons who are seriously and 
 60.22  persistently mentally ill or severely emotionally disturbed who 
 60.23  have county case managers, or any combination thereof, or, if 
 60.24  the county is located outside the Twin Cities seven-county 
 60.25  metropolitan area, services to the elderly.  The demonstration 
 60.26  projects for persons with mental health, chemical dependency, 
 60.27  developmental disabilities, and physical disabilities are 
 60.28  limited, in total, to serving no more than ten counties in which 
 60.29  all of these population groups are included, and no more than 
 60.30  ten additional counties in which not all of these population 
 60.31  groups are included.  If the county establishes a demonstration 
 60.32  project to purchase mental health services and the county is 
 60.33  participating in a mental health collaborative under Minnesota 
 60.34  Statutes, sections 245.491 to 245.496, families must have the 
 60.35  opportunity to be enrolled in one network.  For residential 
 60.36  services, day training and habilitation services, and other 
 61.1   covered nonmedical services for persons with developmental 
 61.2   disabilities, local providers must be offered the opportunity to 
 61.3   contract with a county or counties if the local provider agrees 
 61.4   to the terms of the contract offered other providers or networks.
 61.5      (c) In counties where any specialized services are provided 
 61.6   by one network and other health care services are provided by a 
 61.7   different network, the demonstration project contract must 
 61.8   require a binding agreement between the two provider networks to 
 61.9   share patient records and coordinate patient care.  The enrollee 
 61.10  must agree to these requirements as a condition of enrollment 
 61.11  under the demonstration project. 
 61.12     Subd. 5.  [SERVICE REQUIREMENTS.] A demonstration project 
 61.13  is subject to the current eligibility, benefits, enrollee 
 61.14  protection, and appeal process requirements under the medical 
 61.15  assistance, general assistance medical care, and MinnesotaCare 
 61.16  programs.  The project must institute recipient grievance 
 61.17  procedures utilizing applicable requirements of Minnesota 
 61.18  Statutes, section 256B.69.  
 61.19     Subd. 6.  [CONSUMER CHOICE.] (a) In counties where 
 61.20  enrollment under state prepayment programs has begun as of March 
 61.21  1, 1996, and a county demonstration project has subsequently 
 61.22  been established, the recipients must continue to be offered the 
 61.23  choice of enrolling in a health plan under contract with the 
 61.24  state through state prepayment programs in addition to any 
 61.25  enrollment options established under a county demonstration 
 61.26  project.  This offer must be made for a period of two years 
 61.27  after the county has begun enrollment in the demonstration 
 61.28  project to the recipients enrolled in a state prepayment program 
 61.29  before the date enrollment begins under the demonstration 
 61.30  project.  After this period, the county must contract with all 
 61.31  service delivery networks that satisfy the requirements of the 
 61.32  request for proposals on a nondiscriminatory basis. 
 61.33     (b) In order to maintain an opportunity for choice, a 
 61.34  county or counties must contract with two or more service 
 61.35  delivery networks, unless there are less than two health 
 61.36  maintenance organizations, integrated service networks, 
 62.1   community integrated service networks, or health provider 
 62.2   cooperatives, as defined in Minnesota Statutes, section 62R.04, 
 62.3   willing to provide services in the county or counties.  If only 
 62.4   one network is providing services within the county or counties, 
 62.5   the project must demonstrate that enrollees have a choice of 
 62.6   providers within the existing network.  
 62.7      Subd. 7.  [PROJECT DESIGN AND IMPLEMENTATION.] (a) The 
 62.8   demonstration project must ensure that consumer representatives 
 62.9   and providers are involved in the planning process for the 
 62.10  design of the demonstration projects.  A participating county or 
 62.11  group of counties shall issue a request for proposals to provide 
 62.12  services to eligible individuals residing within the 
 62.13  participating county or counties.  The participating county 
 62.14  board shall review the proposals and shall approve all 
 62.15  contracts.  Individual county staff who are employed by a 
 62.16  publicly owned health plan that intends to respond to a request 
 62.17  for proposal are prohibited from reviewing, critiquing, or 
 62.18  approving any proposals submitted in this subdivision.  Before a 
 62.19  participating county can enter into a contract with a service 
 62.20  delivery network, the commissioner of human services must review 
 62.21  the contract and determine whether the contracting network 
 62.22  offers adequate services to recipients.  If the commissioner 
 62.23  determines that the contract does not provide adequate services, 
 62.24  the commissioner and county board shall continue negotiations 
 62.25  with the network to ensure the provision of all necessary 
 62.26  services.  
 62.27     Subd. 8.  [NOTICE OF INTENT; PROJECT PROPOSALS.] (a) In 
 62.28  counties where the state has entered into a managed care 
 62.29  contract, a county board or a group of county boards shall 
 62.30  notify the commissioner of their intent to participate in a 
 62.31  joint purchaser demonstration project no later than October 1, 
 62.32  1996.  In counties where the prepayment program is not currently 
 62.33  being implemented, a county board or group of county boards 
 62.34  shall notify the commissioner of their intent to participate in 
 62.35  a joint purchaser demonstration project by October 1, 1996.  
 62.36     (b) For any geographic area in which enrollment in the 
 63.1   prepaid medical assistance or prepaid general assistance medical 
 63.2   care program has not begun by March 1, 1996, the commissioner 
 63.3   shall not expand the prepaid medical assistance or the prepaid 
 63.4   general assistance medical care program to that area prior to 
 63.5   October 1, 1996, unless the county board requests earlier 
 63.6   implementation. 
 63.7      (c) For any geographic area, and for any population for 
 63.8   which the state has not received a notice of intent by October 
 63.9   1, 1996, nothing shall prohibit the implementation of the 
 63.10  prepaid medical assistance or prepaid general assistance medical 
 63.11  care programs in accordance with Minnesota Statutes, section 
 63.12  256B.69.  For any geographic area, and for any population for 
 63.13  which the commissioner has received a notice of intent by 
 63.14  October 1, 1996, the commissioner shall be prohibited from 
 63.15  implementing the prepaid medical assistance or prepaid general 
 63.16  assistance medical care programs. 
 63.17     (d) By July 1, 1997, each county board that has submitted a 
 63.18  notice of intent in accordance with this subdivision shall 
 63.19  submit a final proposal that demonstrates the ability to provide 
 63.20  services by January 1, 1998, in accordance with this section.  
 63.21  For any geographic area and for any population for which the 
 63.22  state has not received a final proposal satisfying the 
 63.23  requirements of this section by July 1, 1997, nothing shall 
 63.24  prohibit the implementation of the prepaid medical assistance or 
 63.25  prepaid general assistance medical care programs in accordance 
 63.26  with Minnesota Statutes, section 256B.69.  For any geographic 
 63.27  area and for any population for which the state has received a 
 63.28  final proposal by July 1, 1997, the commissioner shall be 
 63.29  prohibited from implementing the prepaid medical assistance and 
 63.30  prepaid general assistance medical care programs.  The 
 63.31  commissioner must accept or reject final proposals on or before 
 63.32  September 1, 1997.  The commissioner must authorize any proposal 
 63.33  that complies with the requirements of this section and 
 63.34  satisfies the criteria listed in subdivision 15.  The 
 63.35  commissioner must negotiate the contract for the joint purchaser 
 63.36  demonstration project with the appropriate county or counties by 
 64.1   October 1, 1997, for enrollment effective by January 1, 1998. 
 64.2      (e) In counties in which the prepaid medical assistance or 
 64.3   prepaid general assistance medical care programs are not 
 64.4   currently operating, and enrollment in a county demonstration 
 64.5   project does not begin by January 1, 1998, nothing shall 
 64.6   prohibit the implementation of the prepaid medical assistance or 
 64.7   prepaid general assistance medical care programs after January 
 64.8   1, 1998.  
 64.9      (f) In counties in which enrollment under a county 
 64.10  demonstration project has begun by January 1, 1998, beginning 
 64.11  January 1, 2000, the county must contract with all service 
 64.12  delivery networks that satisfy the requirements of the request 
 64.13  for proposals on a nondiscriminatory basis. 
 64.14     Subd. 9.  [PROJECT REPORTING AND EVALUATION.] (a) 
 64.15  County-based purchasing demonstration projects shall report to 
 64.16  the legislature by January 15, 1997, with recommendations for 
 64.17  reserve requirements for local provider networks; county 
 64.18  reporting, including data required to assess client needs, 
 64.19  satisfaction, outcomes, and quality of care, cost, and 
 64.20  utilization of services for purposes of project evaluation; 
 64.21  state and county functions and financing, including funding 
 64.22  recommendations for county eligibility determinations, 
 64.23  enrollment, advocacy, and public health and social services 
 64.24  functions; risk management and risk adjustment strategies; 
 64.25  purchasing arrangements and development of geographic service 
 64.26  areas; future methods of contracting for health care services 
 64.27  for MinnesotaCare enrollees; and other recommendations related 
 64.28  to project objectives.  The data must be collected separately 
 64.29  for different disability categories and major disability 
 64.30  diagnosis, in a manner that allows comparisons on costs, 
 64.31  quality, and utilization across these disability categories and 
 64.32  diagnosis.  Interim reports by the county-based projects shall 
 64.33  be presented to the legislative commission on health care access.
 64.34     (b) The commissioner of human services shall contract for 
 64.35  an independent evaluation of the demonstration projects and 
 64.36  submit the results of the evaluation in a report to the 
 65.1   legislature no later than January 15, 1999.  The evaluation must 
 65.2   determine the impact of each joint purchasing demonstration 
 65.3   project on quality of care, costs, and access to services.  Each 
 65.4   evaluation must also compare demonstration project outcomes to 
 65.5   outcomes under the prepaid medical assistance program. 
 65.6      (c) The commissioner of human services and representatives 
 65.7   of the counties participating in the demonstration project shall 
 65.8   address the issue of risk and shall consider options for 
 65.9   state/county risk management and risk adjustment strategies that 
 65.10  are possible within the limits of the federal regulations or 
 65.11  current waivers.  The commissioner shall report to the 
 65.12  legislature by January 15, 1997, with recommendations on how to 
 65.13  address state/county risk management and risk adjustment 
 65.14  strategies.  
 65.15     (d) The commissioner of health shall provide technical 
 65.16  assistance to counties interested in developing a joint 
 65.17  purchaser demonstration project.  
 65.18     (e) The Minnesota counties research foundation shall 
 65.19  establish a statewide advisory committee to provide assistance 
 65.20  in the development, implementation, and monitoring of the 
 65.21  demonstration projects.  The advisory committee shall include 
 65.22  representatives from various disability populations, families 
 65.23  with children, adults without children, advocacy organizations, 
 65.24  providers of services and counties, as well as, representatives 
 65.25  of the ombudsman for mental health and mental retardation and 
 65.26  ombudsman for managed care authorized under Minnesota Statutes, 
 65.27  section 256B.69, and the ombudsman for long-term care.  The 
 65.28  Minnesota counties research foundation shall report to the 
 65.29  legislative commission on health care access and to the 
 65.30  legislature by January 15, 1997, on the development and 
 65.31  implementation of the joint purchaser demonstration projects. 
 65.32     Subd. 10.  [PAYMENT RATES.] The commissioner shall 
 65.33  determine rates to be paid by the state to county joint 
 65.34  purchaser demonstration projects according to categories in 
 65.35  paragraphs (a) to (c). 
 65.36     (a) For families and children and adults without children, 
 66.1   and medical assistance recipients over age 65, the total payment 
 66.2   shall be determined according to the department's methodology 
 66.3   for determining prepaid medical assistance demonstration rates 
 66.4   for families and children.  The commissioner shall develop per 
 66.5   member, per month, payment rates for each project year, in 
 66.6   consultation with an independent actuary, to ensure that the 
 66.7   cost of services under these demonstration projects does not 
 66.8   exceed the prepaid medical assistance, prepaid general 
 66.9   assistance medical care, and prepaid MinnesotaCare program rates.
 66.10     (b) The payment rate for persons dually eligible for 
 66.11  Medicare and medical assistance shall be determined according to 
 66.12  the methodology of the long-term care options project. 
 66.13     (c) The payment rate for projects involving medical 
 66.14  assistance, general assistance medical care, and MinnesotaCare 
 66.15  program recipients who are disabled or who have severe emotional 
 66.16  disturbance or serious and persistent mental illness, or any 
 66.17  combination thereof, shall be developed in consultation with an 
 66.18  independent actuary to ensure that the costs to the state do not 
 66.19  exceed 95 percent of the estimated cost for medical assistance 
 66.20  and general assistance medical care services for the covered 
 66.21  population under the fee-for-service system.  Payments to 
 66.22  counties shall be made in accordance with Minnesota Statutes, 
 66.23  section 256B.69.  This payment is in addition to the state 
 66.24  administrative allocation to participating counties for 
 66.25  eligibility enrollment and advocacy functions.  Prepaid medical 
 66.26  assistance program administrative funds shall not be used for 
 66.27  county demonstration administrative functions. 
 66.28     Subd. 11.  [ASSURANCES.] If the county chooses to establish 
 66.29  a demonstration project serving more than one category of 
 66.30  disabled persons, the entity must provide assurances to the 
 66.31  commissioner that the established payment rates for each 
 66.32  category of disabled persons are only used to meet the needs of 
 66.33  recipients within that category of persons. 
 66.34     Subd. 12.  [FEDERAL WAIVER.] The commissioner of human 
 66.35  services shall apply by September 15, 1996, for any new federal 
 66.36  waivers required to implement this section.  The commissioner 
 67.1   shall confer with the chairs of the senate health care committee 
 67.2   and health care and family services finance division, house of 
 67.3   representatives health and human services committee and health 
 67.4   and human services finance division, and one minority member 
 67.5   from the house of representatives and senate appointed by the 
 67.6   minority leaders of the house and senate, and a representative 
 67.7   of county commissioners appointed by the association of 
 67.8   Minnesota counties regarding the waiver application and in 
 67.9   waiver negotiations.  No payments shall be made to any county 
 67.10  under this section, and no recipient shall be disenrolled from 
 67.11  the prepaid medical assistance or general assistance medical 
 67.12  care program under this section without prior federal approval. 
 67.13     Subd. 13.  [CONSUMER RIGHTS AND PROTECTIONS.] All services 
 67.14  provided in the demonstration projects shall be provided 
 67.15  according to current eligibility and services laws and rules, 
 67.16  including consumer due process procedures and appeal rights 
 67.17  within the medical assistance program.  For persons with 
 67.18  developmental disabilities, the commissioner shall ensure that 
 67.19  the rights and protections afforded under existing rules and 
 67.20  statutes are not abridged.  The commissioner shall not waive the 
 67.21  rights or procedural protections under Minnesota Statutes, 
 67.22  sections 245.825; 245.91 to 245.97; 252.41, subdivision 9; 
 67.23  256.045; 256B.092; 626.556; and 626.557, including the county 
 67.24  agency's responsibility to arrange for appropriate services and 
 67.25  procedures for the monitoring of psychotropic medications. 
 67.26     Subd. 14.  [ACTUARIAL STUDY; COST-SHARING STUDY.] (a) The 
 67.27  commissioner of human services shall contract with an 
 67.28  independent actuary to prepare an analysis of the amount of 
 67.29  funding for mental health services. 
 67.30     (b) The commissioner of human services and county 
 67.31  representatives shall study the extent of cost shifting from 
 67.32  federal and state Medicaid funding to county property taxes due 
 67.33  to managed care.  The commissioner shall report findings to the 
 67.34  legislature by January 15, 1997. 
 67.35     Subd. 15.  [STANDARDS AND CRITERIA.] Any demonstration 
 67.36  project must demonstrate the ability to: 
 68.1      (1) purchase all covered services for included populations 
 68.2   for a fixed amount that does not exceed the estimated cost to 
 68.3   the state that would have occurred under the prepaid medical 
 68.4   assistance, prepaid general assistance medical care, and prepaid 
 68.5   MinnesotaCare programs; 
 68.6      (2) ensure that covered services are accessible to all 
 68.7   enrollees and that enrollees have a choice of providers whenever 
 68.8   possible; 
 68.9      (3) issue payments to participating vendors or networks in 
 68.10  a timely manner; 
 68.11     (4) establish a process to ensure and improve the quality 
 68.12  of the care received; 
 68.13     (5) provide appropriate quality and other required data in 
 68.14  a format required by the state that will allow comparisons 
 68.15  between plans and providers; and 
 68.16     (6) provide an advocacy and enrollee protection and 
 68.17  complaints and appeals system that is independent from care 
 68.18  providers or other risk bearers and complies with Minnesota 
 68.19  Statutes, section 256B.69. 
 68.20     Sec. 39.  Minnesota Statutes 1995 Supplement, section 
 68.21  256D.02, subdivision 12a, is amended to read: 
 68.22     Subd. 12a.  [RESIDENT.] (a) For purposes of eligibility for 
 68.23  general assistance under section 256D.05, and payments under 
 68.24  section 256D.051 and general assistance medical care, a 
 68.25  "resident" is a person living in the state for at least 30 days 
 68.26  with the intention of making the person's home here and not for 
 68.27  any temporary purpose.  All applicants for these programs are 
 68.28  required to demonstrate the requisite intent and can do so in 
 68.29  any of the following ways: 
 68.30     (1) by showing that the applicant maintains a residence at 
 68.31  a verified address, other than a place of public accommodation.  
 68.32  An applicant may verify a residence address by presenting a 
 68.33  valid state driver's license, a state identification card, a 
 68.34  voter registration card, a rent receipt, a statement by the 
 68.35  landlord, apartment manager, or homeowner verifying that the 
 68.36  individual is residing at the address, or other form of 
 69.1   verification approved by the commissioner; or 
 69.2      (2) by providing written documentation verifying residence 
 69.3   in accordance with Minnesota Rules, part 9500.1219, subpart 3, 
 69.4   item (c). 
 69.5      (b) An applicant who has been in the state for less than 30 
 69.6   days shall be considered a resident if the applicant can provide 
 69.7   documentation: 
 69.8      (1) that the applicant came to was born in the state in 
 69.9   response to an offer of employment; 
 69.10     (3) by providing verification (2) that the applicant has 
 69.11  been a long-time resident of the state or was formerly a 
 69.12  resident of the state for at least 365 days and is returning to 
 69.13  the state from a temporary absence, as those terms are defined 
 69.14  in rules to be adopted by the commissioner; 
 69.15     (3) that the applicant has come to the state to join a 
 69.16  close relative which, for purposes of this subdivision, means a 
 69.17  parent, grandparent, brother, sister, spouse, or child; or 
 69.18     (4) by providing other persuasive evidence to show that the 
 69.19  applicant is a resident of the state, according to rules adopted 
 69.20  by the commissioner that the applicant has come to this state to 
 69.21  accept a bona fide offer of employment for which the applicant 
 69.22  is eligible.  
 69.23     A county agency shall waive the 30-day residency 
 69.24  requirement in cases of emergencies, including medical 
 69.25  emergencies, or where unusual hardship would result from denial 
 69.26  of general assistance medical care.  A county may waive the 
 69.27  30-day residency requirement in cases of emergencies, including 
 69.28  medical emergencies, or where unusual hardship would result from 
 69.29  denial of general assistance.  The county agency must report to 
 69.30  the commissioner within 30 days on any waiver granted under this 
 69.31  section.  The county shall not deny an application solely 
 69.32  because the applicant does not meet at least one of the criteria 
 69.33  in this subdivision, but shall continue to process the 
 69.34  application and leave the application pending until the 
 69.35  residency requirement is met or until eligibility or 
 69.36  ineligibility is established. 
 70.1      Sec. 40.  Minnesota Statutes 1995 Supplement, section 
 70.2   256D.045, is amended to read: 
 70.3      256D.045 [SOCIAL SECURITY NUMBER REQUIRED.] 
 70.4      To be eligible for general assistance under sections 
 70.5   256D.01 to 256D.21, an individual must provide the individual's 
 70.6   social security number to the county agency or submit proof that 
 70.7   an application has been made.  The provisions of this section do 
 70.8   not apply to the determination of eligibility for emergency 
 70.9   general assistance under section 256D.06, subdivision 2.  This 
 70.10  provision applies to eligible children under the age of 18 
 70.11  effective July 1, 1997.  
 70.12     Sec. 41.  Minnesota Statutes 1994, section 256G.01, 
 70.13  subdivision 3, is amended to read: 
 70.14     Subd. 3.  [PROGRAM COVERAGE.] This chapter applies to 
 70.15  all social service programs administered by the commissioner in 
 70.16  which residence is the determining factor in establishing 
 70.17  financial responsibility.  These include, but are not limited 
 70.18  to:  aid to families with dependent children; medical 
 70.19  assistance; general assistance; work readiness; general 
 70.20  assistance medical care; Minnesota supplemental aid; commitment 
 70.21  proceedings, including voluntary admissions; emergency holds; 
 70.22  poor relief funded wholly through local agencies; and social 
 70.23  services, including title XX, IV-E and other components of the 
 70.24  community social services act, sections 256E.01 to 256E.12; 
 70.25  social services programs funded wholly through the resources of 
 70.26  county agencies; social services provided under the Minnesota 
 70.27  Indian family preservation act, sections 257.35 to 257.356; 
 70.28  costs for delinquency confinement under section 393.07, 
 70.29  subdivision 2; service responsibility for these programs; and 
 70.30  group residential housing.  
 70.31     Sec. 42.  Minnesota Statutes 1994, section 256G.01, is 
 70.32  amended by adding a subdivision to read: 
 70.33     Subd. 4.  [ADDITIONAL COVERAGE.] The provisions in sections 
 70.34  256G.02, subdivision 4, paragraphs (a) to (d); 256G.02, 
 70.35  subdivisions 5 to 8; 256G.03; 256G.04; 256G.05; and 256G.07, 
 70.36  subdivisions 1 to 3, apply to the following programs:  aid to 
 71.1   families with dependent children; medical assistance; general 
 71.2   assistance; family general assistance; general assistance 
 71.3   medical care; and Minnesota supplemental aid. 
 71.4      Sec. 43.  Minnesota Statutes 1994, section 256G.01, is 
 71.5   amended by adding a subdivision to read: 
 71.6      Subd. 5.  [SCOPE AND EFFECT.] Unless stated otherwise, the 
 71.7   provisions of this chapter also apply to disputes involving 
 71.8   financial responsibility for social services when another 
 71.9   definition of the county of financial responsibility has been 
 71.10  created in Minnesota Statutes.  
 71.11     Sec. 44.  Minnesota Statutes 1994, section 256G.02, 
 71.12  subdivision 4, is amended to read: 
 71.13     Subd. 4.  [COUNTY OF FINANCIAL RESPONSIBILITY.] (a) "County 
 71.14  of financial responsibility" has the meanings in paragraphs (b) 
 71.15  to (h).  
 71.16     (b) For an applicant who resides in the state and is not in 
 71.17  a facility described in subdivision 6, it means the county in 
 71.18  which the applicant resides at the time of application.  
 71.19     (c) For an applicant who resides in a facility described in 
 71.20  subdivision 6, it means the county in which the applicant last 
 71.21  resided in nonexcluded status immediately before entering the 
 71.22  facility.  
 71.23     (d) For an applicant who has not resided in this state for 
 71.24  any time other than the excluded time, and subject to the 
 71.25  limitations in section 256G.03, subdivision 2, it means the 
 71.26  county in which the applicant resides at the time of making 
 71.27  application.  
 71.28     (e) For medical assistance purposes only, and for an infant 
 71.29  who has resided only in an excluded time facility, it means the 
 71.30  county that would have been responsible for the infant if 
 71.31  eligibility had been established, based on that of the birth 
 71.32  mother, at the time of application. 
 71.33     (f) Notwithstanding paragraphs (b) to (d), the county of 
 71.34  financial responsibility for medical assistance recipients is 
 71.35  the county from which a recipient is receiving a maintenance 
 71.36  grant or money payment under the program of aid to families with 
 72.1   dependent children or Minnesota supplemental aid. 
 72.2      (g) Notwithstanding paragraphs (b) to (f), the county of 
 72.3   financial responsibility for social services for a person 
 72.4   receiving aid to families with dependent children, general 
 72.5   assistance, general assistance medical care, medical assistance, 
 72.6   or Minnesota supplemental aid is the county from which that 
 72.7   person is receiving the aid or assistance.  If more than one 
 72.8   named program is open concurrently For an individual already 
 72.9   having a social service case open in one county, financial 
 72.10  responsibility for any additional social services attaches to 
 72.11  the program case that has the earliest date of application and 
 72.12  has been open without interruption.  
 72.13     (h) (f) Notwithstanding paragraphs (b) to (g) (e), the 
 72.14  county of financial responsibility for semi-independent living 
 72.15  services provided under section 252.275, and Minnesota Rules, 
 72.16  parts 9525.0500 to 9525.0660, is the county of residence in 
 72.17  nonexcluded status immediately before the placement into or 
 72.18  request for those services. 
 72.19     Sec. 45.  Minnesota Statutes 1994, section 256G.02, 
 72.20  subdivision 6, is amended to read: 
 72.21     Subd. 6.  [EXCLUDED TIME.] "Excluded time" means: 
 72.22     (a) any period an applicant spends in a hospital, 
 72.23  sanitarium, nursing home, shelter other than an emergency 
 72.24  shelter, halfway house, foster home, semi-independent living 
 72.25  domicile or services program, residential facility offering 
 72.26  care, board and lodging facility or other institution for the 
 72.27  hospitalization or care of human beings, as defined in section 
 72.28  144.50, 144A.01, or 245A.02, subdivision 14; or in a maternity 
 72.29  home, battered women's shelter, or correctional facility.  
 72.30  "Excluded time" also means that time during which an applicant 
 72.31  participates in a rehabilitation facility as defined in section 
 72.32  268A.01, or is receiving personal care assistant services 
 72.33  pursuant to section 256B.0625, subdivision 19.; or any facility 
 72.34  based on an emergency hold under sections 253B.05, subdivisions 
 72.35  1 and 2, and 253B.07, subdivision 6; 
 72.36     (b) any period an applicant spends on a placement basis in 
 73.1   a training and habilitation program, including a rehabilitation 
 73.2   facility or work or employment program as defined in section 
 73.3   268A.01; or receiving personal care assistant services pursuant 
 73.4   to section 256B.0627, subdivision 4; semi-independent living 
 73.5   services provided under section 252.275, and Minnesota Rules, 
 73.6   parts 9525.0500 to 9525.0660; day training and habilitation 
 73.7   programs, and community-based services and assisted living 
 73.8   services; and 
 73.9      (c) any placement for a person with an indeterminate 
 73.10  commitment, including independent living. 
 73.11     Sec. 46.  Minnesota Statutes 1994, section 256G.03, is 
 73.12  amended to read: 
 73.13     256G.03 [ESTABLISHING RESIDENCE.] 
 73.14     Subdivision 1.  [STATE RESIDENCE.] For purposes of this 
 73.15  chapter, a resident of any Minnesota county is considered a 
 73.16  state resident.  For purposes of eligibility for general 
 73.17  assistance or work readiness, residency must be substantiated 
 73.18  according to section 256D.02, subdivision 12a. 
 73.19     Subd. 2.  [NO DURATIONAL TEST.] Except as otherwise 
 73.20  provided in sections 256.73, subdivisions 1 and 1a; 256B.056, 
 73.21  subdivision 1; and 256D.02, subdivision 12a, for purposes of 
 73.22  this chapter, no waiting period is required before securing 
 73.23  county or state residence.  A person cannot, however, gain 
 73.24  residence while physically present in an excluded time facility 
 73.25  unless otherwise specified in this chapter or in a federal 
 73.26  regulation controlling a federally funded human service program. 
 73.27     Subd. 3.  [USE OF CODE OF FEDERAL REGULATIONS.] In the 
 73.28  event that federal legislation eliminates the federal regulatory 
 73.29  basis for medical assistance, the state shall continue to 
 73.30  determine eligibility for Minnesota's medical assistance program 
 73.31  using the provisions of Code of Federal Regulations, title 42, 
 73.32  as construed on the day prior to their federal repeal, except as 
 73.33  expressly superseded in chapter 256B, or as superseded by 
 73.34  federal law, or as modified by state rule or by regulatory 
 73.35  waiver granted to the state. 
 73.36     Sec. 47.  Minnesota Statutes 1994, section 256G.06, is 
 74.1   amended to read: 
 74.2      256G.06 [DETOXIFICATION SERVICES.] 
 74.3      The county of financial responsibility for detoxification 
 74.4   services is the county where the client is physically present 
 74.5   when the need for services is identified.  If that need is 
 74.6   identified while the client is a resident of a chemical 
 74.7   dependency facility, the provisions of section 256G.02, 
 74.8   subdivision 4, paragraphs (b), (c), and (e) (d), apply. 
 74.9      Sec. 48.  Minnesota Statutes 1994, section 256G.07, 
 74.10  subdivision 1, is amended to read: 
 74.11     Subdivision 1.  [EFFECT OF MOVING.] Except as provided in 
 74.12  subdivision 4, a person who has applied for and is receiving 
 74.13  services or assistance under a program governed by this chapter, 
 74.14  in any county in this state, and who moves to another county in 
 74.15  this state, is entitled to continue to receive that assistance 
 74.16  service from the county from which that person has moved until 
 74.17  that person has resided in nonexcluded status for two full 
 74.18  calendar months in the county to which that person has 
 74.19  moved.  For purposes of general assistance and general 
 74.20  assistance medical care, this time period is, however, one full 
 74.21  calendar month. 
 74.22     Sec. 49.  Minnesota Statutes 1994, section 256G.07, 
 74.23  subdivision 2, is amended to read: 
 74.24     Subd. 2.  [TRANSFER OF RECORDS.] Before the person has 
 74.25  resided in nonexcluded status for two calendar months or one 
 74.26  calendar month in the case of general assistance and general 
 74.27  assistance medical care, in the county to which that person has 
 74.28  moved, the local agency of the county from which the person has 
 74.29  moved shall complete an eligibility review and transfer all 
 74.30  necessary records relating to that person to the local agency of 
 74.31  the county to which the person has moved. 
 74.32     Sec. 50.  Minnesota Statutes 1994, section 256G.08, 
 74.33  subdivision 1, is amended to read: 
 74.34     Subdivision 1.  [COMMITMENTS COMMITMENT ACT PROCEEDINGS.] 
 74.35  In cases of voluntary admission or commitment to state or other 
 74.36  institutions, the committing county shall initially pay for all 
 75.1   costs.  This includes the expenses of the taking into custody, 
 75.2   confinement, emergency holds under sections 253B.05, 
 75.3   subdivisions 1 and 2, and 253B.07, examination, commitment, 
 75.4   conveyance to the place of detention, and rehearing. 
 75.5      Sec. 51.  Minnesota Statutes 1994, section 256G.09, 
 75.6   subdivision 2, is amended to read: 
 75.7      Subd. 2.  [FINANCIAL DISPUTES.] (a) If the county receiving 
 75.8   the transmittal does not believe it is financially responsible, 
 75.9   it should provide to the department and the initially 
 75.10  responsible county a statement of all facts and documents 
 75.11  necessary for the department to make the requested determination 
 75.12  of financial responsibility.  The submission must clearly state 
 75.13  the program area in dispute and must state the specific basis 
 75.14  upon which the submitting county is denying financial 
 75.15  responsibility. 
 75.16     (b) The initially responsible county then has 15 calendar 
 75.17  days to submit its position and any supporting evidence to the 
 75.18  department.  The absence of a submission by the initially 
 75.19  responsible county does not limit the right of the department to 
 75.20  issue a binding opinion based on the evidence actually submitted.
 75.21     (c) A case must not be submitted until the local agency 
 75.22  taking the application or making the commitment has made an 
 75.23  initial determination about eligibility and financial 
 75.24  responsibility, and services or assistance has have been 
 75.25  initiated.  This paragraph does not prohibit the submission of 
 75.26  closed cases that otherwise meet the applicable statute of 
 75.27  limitations. 
 75.28     Sec. 52.  Minnesota Statutes 1994, section 256G.10, is 
 75.29  amended to read: 
 75.30     256G.10 [DERIVATIVE SETTLEMENT ELIMINATED.] 
 75.31     Except as described in section 256G.02, subdivision 4, 
 75.32  paragraph (e), residence under this chapter must be determined 
 75.33  independently for each applicant.  The residence of the parent 
 75.34  of a minor child, with whom that child last lived in a 
 75.35  nonexcluded time setting, or guardian does not of a ward shall 
 75.36  determine the residence of the child or ward for all social 
 76.1   services governed by this chapter. 
 76.2      For purposes of this chapter, a minor child is defined as 
 76.3   being under 18 years of age unless otherwise specified in a 
 76.4   program administered by the commissioner. 
 76.5      Physical or legal custody has no bearing on residence 
 76.6   determinations.  This section does not, however, apply to 
 76.7   situations involving another state or, limit the application of 
 76.8   an interstate compact, or apply to situations involving state 
 76.9   wards where the commissioner is defined by law as the guardian. 
 76.10     Sec. 53.  Minnesota Statutes 1994, section 256I.05, is 
 76.11  amended by adding a subdivision to read: 
 76.12     Subd. 7c.  [DEMONSTRATION PROJECT.] The commissioner is 
 76.13  authorized to pursue a demonstration project under federal food 
 76.14  stamp regulation for the purpose of gaining federal 
 76.15  reimbursement of food and nutritional costs currently paid by 
 76.16  the state group residential housing program.  
 76.17     Sec. 54.  Minnesota Statutes 1994, section 325F.71, 
 76.18  subdivision 2, is amended to read: 
 76.19     Subd. 2.  [SUPPLEMENTAL CIVIL PENALTY.] (a) In addition to 
 76.20  any liability for a civil penalty pursuant to Minnesota 
 76.21  Statutes, sections 325D.43 to 325D.48, regarding deceptive trade 
 76.22  practices; 325F.67, regarding false advertising; and 325F.68 to 
 76.23  325F.70, regarding consumer fraud; a person who engages in any 
 76.24  conduct prohibited by those statutes, and whose conduct is 
 76.25  perpetrated against one or more senior citizens or handicapped 
 76.26  persons, is liable for an additional civil penalty not to exceed 
 76.27  $10,000 for each violation, if one or more of the factors in 
 76.28  paragraph (b) are present. 
 76.29     (b) In determining whether to impose a civil penalty 
 76.30  pursuant to paragraph (a), and the amount of the penalty, the 
 76.31  court shall consider, in addition to other appropriate factors, 
 76.32  the extent to which one or more of the following factors are 
 76.33  present: 
 76.34     (1) whether the defendant knew or should have known that 
 76.35  the defendant's conduct was directed to one or more senior 
 76.36  citizens or handicapped persons; 
 77.1      (2) whether the defendant's conduct caused senior citizens 
 77.2   or handicapped persons to suffer:  loss or encumbrance of a 
 77.3   primary residence, principal employment, or source of income; 
 77.4   substantial loss of property set aside for retirement or for 
 77.5   personal or family care and maintenance; substantial loss of 
 77.6   payments received under a pension or retirement plan or a 
 77.7   government benefits program; or assets essential to the health 
 77.8   or welfare of the senior citizen or handicapped person; 
 77.9      (3) whether one or more senior citizens or handicapped 
 77.10  persons are more vulnerable to the defendant's conduct than 
 77.11  other members of the public because of age, poor health or 
 77.12  infirmity, impaired understanding, restricted mobility, or 
 77.13  disability, and actually suffered physical, emotional, or 
 77.14  economic damage resulting from the defendant's conduct; or 
 77.15     (4) whether the defendant's conduct caused senior citizens 
 77.16  or handicapped persons to make an uncompensated asset transfer 
 77.17  that resulted in the person being found ineligible for medical 
 77.18  assistance. 
 77.19     Sec. 55.  Minnesota Statutes 1994, section 524.2-403, is 
 77.20  amended to read: 
 77.21     524.2-403 [EXEMPT PROPERTY.] 
 77.22     (a) If there is a surviving spouse, then, in addition to 
 77.23  the homestead and family allowance, the surviving spouse is 
 77.24  entitled from the estate to: 
 77.25     (1) property not exceeding $10,000 in value in excess of 
 77.26  any security interests therein, in household furniture, 
 77.27  furnishings, appliances, and personal effects, subject to an 
 77.28  award of sentimental value property under section 525.152; and 
 77.29     (2) one automobile, if any, without regard to value. 
 77.30     (b) If there is no surviving spouse, the decedent's 
 77.31  children are entitled jointly to the same property as provided 
 77.32  in paragraph (a). 
 77.33     (c) If encumbered chattels are selected and the value in 
 77.34  excess of security interests, plus that of other exempt 
 77.35  property, is less than $10,000, or if there is not $10,000 worth 
 77.36  of exempt property in the estate, the surviving spouse or 
 78.1   children are entitled to other personal property of the estate, 
 78.2   if any, to the extent necessary to make up the $10,000 value. 
 78.3      (d) Rights to exempt property and assets needed to make up 
 78.4   a deficiency of exempt property have priority over all claims 
 78.5   against the estate, but the right to any assets to make up a 
 78.6   deficiency of exempt property abates as necessary to permit 
 78.7   earlier payment of the family allowance. 
 78.8      (e) The rights granted by this section are in addition to 
 78.9   any benefit or share passing to the surviving spouse or children 
 78.10  by the decedent's will, unless otherwise provided by intestate 
 78.11  succession or by way of elective share.  
 78.12     (f) A claim under section 246.53, 261.04, 256B.15, or 
 78.13  256D.16 takes precedence over any rights granted to a decedent's 
 78.14  adult children under this section. 
 78.15     Sec. 56.  Minnesota Statutes 1994, section 524.3-801, is 
 78.16  amended to read: 
 78.17     524.3-801 [NOTICE TO CREDITORS.] 
 78.18     (a) Unless notice has already been given under this 
 78.19  section, upon appointment of a general personal representative 
 78.20  in informal proceedings or upon the filing of a petition for 
 78.21  formal appointment of a general personal representative, notice 
 78.22  thereof, in the form prescribed by court rule, shall be given 
 78.23  under the direction of the court administrator by publication 
 78.24  once a week for two successive weeks in a legal newspaper in the 
 78.25  county wherein the proceedings are pending giving the name and 
 78.26  address of the general personal representative and notifying 
 78.27  creditors of the estate to present their claims within four 
 78.28  months after the date of the court administrator's notice which 
 78.29  is subsequently published or be forever barred, unless they are 
 78.30  entitled to further service of notice under paragraph (b) or (c).
 78.31     (b)(1) Within three months after:  (i) the date of the 
 78.32  first publication of the notice; or (ii) June 16, 1989, 
 78.33  whichever is later, the personal representative may determine, 
 78.34  in the personal representative's discretion, that it is or is 
 78.35  not advisable to conduct a reasonably diligent search for 
 78.36  creditors of the decedent who are either not known or not 
 79.1   identified.  If the personal representative determines that a 
 79.2   reasonably diligent search is advisable, the personal 
 79.3   representative shall conduct the search. 
 79.4      (2) If the notice is first published after June 16, 1989, 
 79.5   the personal representative shall, within three months after the 
 79.6   date of the first publication of the notice, serve a copy of the 
 79.7   notice upon each then known and identified creditor in the 
 79.8   manner provided in paragraph (c).  If the decedent or a 
 79.9   predeceased spouse of the decedent received assistance for which 
 79.10  a claim could be filed under section 246.53, 256B.15, 256D.16, 
 79.11  or 261.04, the personal representative shall serve a copy of the 
 79.12  notice on the commissioner of human services in the manner 
 79.13  provided in paragraph (c) on or before the date of the first 
 79.14  publication of the notice.  The copy of the notice served on the 
 79.15  commissioner of human services shall include the full name, date 
 79.16  of birth, and social security number of the decedent or the 
 79.17  predeceased spouse who received assistance for which a claim 
 79.18  could be filed under any of the sections listed in this 
 79.19  paragraph.  Notwithstanding any will or other instrument or law 
 79.20  to the contrary, except as allowed in this paragraph no property 
 79.21  subject to administration by the estate may be distributed by 
 79.22  the estate or the personal representative until 70 days after 
 79.23  the date the notice is served upon the commissioner, as provided 
 79.24  in paragraph (c) unless the local agency consents.  An affidavit 
 79.25  of service shall be prima facie evidence of service and, if it 
 79.26  contains a legal description of the affected real property, may 
 79.27  be filed or recorded in the office of the county recorder or 
 79.28  registrar of titles to establish compliance with the notice 
 79.29  requirement established in this paragraph.  This restriction on 
 79.30  distribution does not apply to the personal representative's 
 79.31  sale of real or personal property while the estate is open but 
 79.32  does apply to the net proceeds the estate receives from the 
 79.33  sale.  If notice was first published under the applicable 
 79.34  provisions of law under the direction of the court administrator 
 79.35  before June 16, 1989, and if a personal representative is 
 79.36  empowered to act at any time after June 16, 1989, the personal 
 80.1   representative shall, within three months after June 16, 1989, 
 80.2   serve upon the then known and identified creditors in the manner 
 80.3   provided in paragraph (c) a copy of the notice as published, 
 80.4   together with a supplementary notice requiring each of the 
 80.5   creditors to present any claim within one month after the date 
 80.6   of the service of the notice or be forever barred. 
 80.7      (3) Under this section, a creditor is "known" if:  (i) the 
 80.8   personal representative knows that the creditor has asserted a 
 80.9   claim that arose during the decedent's life against either the 
 80.10  decedent or the decedent's estate; or (ii) the creditor has 
 80.11  asserted a claim that arose during the decedent's life and the 
 80.12  fact is clearly disclosed in accessible financial records known 
 80.13  and available to the personal representative.  Under this 
 80.14  section, a creditor is "identified" if the personal 
 80.15  representative's knowledge of the name and address of the 
 80.16  creditor will permit service of notice to be made under 
 80.17  paragraph (c).  
 80.18     (c) The personal representative shall serve a copy of any 
 80.19  notice and any supplementary notice required by paragraph (b), 
 80.20  clause (1) or (2), upon each creditor of the decedent who is 
 80.21  then known to the personal representative and identified, except 
 80.22  a creditor whose claim has either been presented to the personal 
 80.23  representative or paid, either by delivery of a copy of the 
 80.24  required notice to the creditor, or by mailing a copy of the 
 80.25  notice to the creditor by certified, registered, or ordinary 
 80.26  first class mail addressed to the creditor at the creditor's 
 80.27  office or place of residence. 
 80.28     Sec. 57.  [INDIVIDUAL COMPULSIVE GAMBLING TREATMENT PILOT 
 80.29  PROJECT.] 
 80.30     Subdivision 1.  [ESTABLISHMENT.] The commissioner of human 
 80.31  services shall establish a pilot project in the southeast area 
 80.32  of the state to provide compulsive gambling treatment services 
 80.33  to individuals seeking treatment.  The pilot project shall 
 80.34  directly reimburse qualified providers for treatment to 
 80.35  individuals on a case-by-case basis.  The pilot project shall 
 80.36  seek to utilize existing qualified providers and shall provide 
 81.1   treatment reimbursement to the maximum number of persons who 
 81.2   qualify for treatment. 
 81.3      Subd. 2.  [PLAN.] The commissioner shall submit to the 
 81.4   legislature by December 15, 1996, a plan for expansion of the 
 81.5   treatment pilot project to all areas of the state.  The plan 
 81.6   shall include the necessary legislative changes needed to move 
 81.7   from a treatment center model to a provider reimbursement model. 
 81.8      Sec. 58.  [REPORT ON COMPENSATING CLIENTS ON PUBLIC HEALTH 
 81.9   CARE PROGRAMS.] 
 81.10     The commissioner of human services shall study and report 
 81.11  to the legislature by January 15, 1997, the advisability and 
 81.12  feasibility of compensating clients on the public health care 
 81.13  programs if a client has successfully reversed a private 
 81.14  insurer's denial of health insurance.  The report shall also 
 81.15  include recommendations on reducing the parental fees under 
 81.16  Minnesota Statutes, section 252.27, subdivision 2a, if a parent 
 81.17  has successfully reversed a private insurer's denial of 
 81.18  insurance.  The commissioner shall ask clients, advocates, other 
 81.19  interested persons, and the parental fee advisory committee to 
 81.20  assist with the study. 
 81.21     Sec. 59.  [WAIVER AUTHORITY.] 
 81.22     The commissioner of human services shall seek federal 
 81.23  waivers as necessary to implement section 8. 
 81.24     Sec. 60.  [SEVERABILITY.] 
 81.25     If any provision of sections 8 and 39 are found to be 
 81.26  unconstitutional or void by a court of competent jurisdiction, 
 81.27  all remaining provisions of the law shall remain valid and shall 
 81.28  be given full effect. 
 81.29     Sec. 61.  [AUGMENTATIVE COMMUNICATION DEVICES.] 
 81.30     Augmentative communication devices that are prior 
 81.31  authorized through pass through vendors during the period July 
 81.32  1, 1995, to December 31, 1996, and have not been delivered shall 
 81.33  be paid under the medical assistance program at the actual price 
 81.34  charged the pass through vendor for the device as limited to the 
 81.35  suggested retail price on March 1, 1996.  For retroactive 
 81.36  periods in which a state plan had not been submitted to reflect 
 82.1   this payment, the state shall not seek a federal share.  The 
 82.2   governor's advisory council on technology for people with 
 82.3   disabilities, in consultation with the commissioner of human 
 82.4   services, shall study alternatives to this payment approach and 
 82.5   make recommendations to the legislature by December 31, 1996, 
 82.6   related to effective methods of cost control and the following: 
 82.7      (1) comparative payment equity between augmentative 
 82.8   communication device vendors and other provider groups that 
 82.9   provide equipment to medical assistance recipients; 
 82.10     (2) methods, including competitive bidding, that create 
 82.11  incentives for dealers and manufacturers to provide augmentative 
 82.12  communication devices at a price that is discounted from retail; 
 82.13     (3) substitution between augmentative communication devices 
 82.14  and alternative methods of access by recipients to augmentative 
 82.15  communication devices; and 
 82.16     (4) payment equity between pass through vendors and 
 82.17  distributors of augmentative communication devices. 
 82.18     Sec. 62.  [REPEALER.] 
 82.19     Minnesota Statutes 1995 Supplement, sections 256B.15, 
 82.20  subdivision 5; 256G.05, subdivision 1; and 256G.07, subdivision 
 82.21  3a, are repealed.  
 82.22     Sec. 63.  [EFFECTIVE DATE; APPLICATION.] 
 82.23     (a) Sections 12, 14, 16, 18, 29, 30, and the portion of 
 82.24  section 62 that repeals section 256B.15, subdivision 5, are 
 82.25  effective the day following final enactment to the extent 
 82.26  permitted by federal law.  If any provisions of these sections 
 82.27  are prohibited by federal law, the provisions shall become 
 82.28  effective when federal law is changed to permit their 
 82.29  application or a waiver is received.  The commissioner of human 
 82.30  services shall notify the revisor of statutes when federal law 
 82.31  is enacted or a waiver is received and publish a notice in the 
 82.32  State Register.  The commissioner must include the notice in the 
 82.33  first State Register published after the effective date of the 
 82.34  federal changes.  
 82.35     (b) If, by July 1, 1996, any provisions of the sections 
 82.36  mentioned in paragraph (a) are not effective because of 
 83.1   prohibitions in federal law, the commissioner shall apply to the 
 83.2   federal government for a waiver of those prohibitions, and those 
 83.3   provisions shall become effective upon receipt of a federal 
 83.4   waiver, notification to the revisor of statutes, and publication 
 83.5   of a notice in the State Register to that effect.  If the 
 83.6   commissioner applies for a waiver of the lookback period, the 
 83.7   commissioner shall seek the longest lookback period the health 
 83.8   care financing administration will approve, not to exceed 72 
 83.9   months. 
 83.10     (c) Section 55 applies to estates of decedents dying on or 
 83.11  after its effective date.  Section 56 applies to estates where 
 83.12  the notice under Minnesota Statutes, section 524.3-801, 
 83.13  paragraph (a), was first published on or after its effective 
 83.14  date.  Section 56 does not affect any right or duty to provide 
 83.15  notice to known creditors, including a local agency, before its 
 83.16  effective date. 
 83.17     (d) Sections 7, 13, 15, 17, 33, 34, 35, 38, and 61 are 
 83.18  effective the day following final enactment. 
 83.19     (e) Section 11 is effective retroactive to October 1, 1993. 
 83.20     (f) Sections 8, 22, subdivision 3, and 34 are effective 
 83.21  upon federal approval. 
 83.22     (g) Sections 10 and 31 are effective upon receipt of 
 83.23  federal approval, retroactive to January 1, 1996. 
 83.24                             ARTICLE 3
 83.25                           LONG-TERM CARE
 83.26     Section 1.  Minnesota Statutes 1995 Supplement, section 
 83.27  144A.071, subdivision 3, is amended to read: 
 83.28     Subd. 3.  [EXCEPTIONS AUTHORIZING AN INCREASE IN BEDS.] The 
 83.29  commissioner of health, in coordination with the commissioner of 
 83.30  human services, may approve the addition of a new certified bed 
 83.31  or the addition of a new licensed nursing home bed, under the 
 83.32  following conditions:  
 83.33     (a) to license or certify a new bed in place of one 
 83.34  decertified after July 1, 1993, as long as the number of 
 83.35  certified plus newly certified or recertified beds does not 
 83.36  exceed the number of beds licensed or certified on July 1, 1993, 
 84.1   or to address an extreme hardship situation, in a particular 
 84.2   county that, together with all contiguous Minnesota counties, 
 84.3   has fewer nursing home beds per 1,000 elderly than the number 
 84.4   that is ten percent higher than the national average of nursing 
 84.5   home beds per 1,000 elderly individuals.  For the purposes of 
 84.6   this section, the national average of nursing home beds shall be 
 84.7   the most recent figure that can be supplied by the federal 
 84.8   health care financing administration and the number of elderly 
 84.9   in the county or the nation shall be determined by the most 
 84.10  recent federal census or the most recent estimate of the state 
 84.11  demographer as of July 1, of each year of persons age 65 and 
 84.12  older, whichever is the most recent at the time of the request 
 84.13  for replacement.  An extreme hardship situation can only be 
 84.14  found after the county documents the existence of unmet medical 
 84.15  needs that cannot be addressed by any other alternatives; 
 84.16     (b) to certify or license new beds in a new facility that 
 84.17  is to be operated by the commissioner of veterans affairs or 
 84.18  when the costs of constructing and operating the new beds are to 
 84.19  be reimbursed by the commissioner of veterans affairs or the 
 84.20  United States Veterans Administration; 
 84.21     (c) to license or certify beds in a facility that has been 
 84.22  involuntarily delicensed or decertified for participation in the 
 84.23  medical assistance program, provided that an application for 
 84.24  relicensure or recertification is submitted to the commissioner 
 84.25  within 120 days after delicensure or decertification; or 
 84.26     (d) to certify two existing beds in a facility with 66 
 84.27  licensed beds on January 1, 1994, that had an average occupancy 
 84.28  rate of 98 percent or higher in both calendar years 1992 and 
 84.29  1993, and which began construction of four attached assisted 
 84.30  living units in April 1993; or 
 84.31     (e) to certify four existing beds in a facility in Winona 
 84.32  with 139 beds, of which 129 beds are certified. 
 84.33     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 84.34  144A.071, subdivision 4a, is amended to read: 
 84.35     Subd. 4a.  [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 
 84.36  best interest of the state to ensure that nursing homes and 
 85.1   boarding care homes continue to meet the physical plant 
 85.2   licensing and certification requirements by permitting certain 
 85.3   construction projects.  Facilities should be maintained in 
 85.4   condition to satisfy the physical and emotional needs of 
 85.5   residents while allowing the state to maintain control over 
 85.6   nursing home expenditure growth. 
 85.7      The commissioner of health in coordination with the 
 85.8   commissioner of human services, may approve the renovation, 
 85.9   replacement, upgrading, or relocation of a nursing home or 
 85.10  boarding care home, under the following conditions: 
 85.11     (a) to license or certify beds in a new facility 
 85.12  constructed to replace a facility or to make repairs in an 
 85.13  existing facility that was destroyed or damaged after June 30, 
 85.14  1987, by fire, lightning, or other hazard provided:  
 85.15     (i) destruction was not caused by the intentional act of or 
 85.16  at the direction of a controlling person of the facility; 
 85.17     (ii) at the time the facility was destroyed or damaged the 
 85.18  controlling persons of the facility maintained insurance 
 85.19  coverage for the type of hazard that occurred in an amount that 
 85.20  a reasonable person would conclude was adequate; 
 85.21     (iii) the net proceeds from an insurance settlement for the 
 85.22  damages caused by the hazard are applied to the cost of the new 
 85.23  facility or repairs; 
 85.24     (iv) the new facility is constructed on the same site as 
 85.25  the destroyed facility or on another site subject to the 
 85.26  restrictions in section 144A.073, subdivision 5; 
 85.27     (v) the number of licensed and certified beds in the new 
 85.28  facility does not exceed the number of licensed and certified 
 85.29  beds in the destroyed facility; and 
 85.30     (vi) the commissioner determines that the replacement beds 
 85.31  are needed to prevent an inadequate supply of beds. 
 85.32  Project construction costs incurred for repairs authorized under 
 85.33  this clause shall not be considered in the dollar threshold 
 85.34  amount defined in subdivision 2; 
 85.35     (b) to license or certify beds that are moved from one 
 85.36  location to another within a nursing home facility, provided the 
 86.1   total costs of remodeling performed in conjunction with the 
 86.2   relocation of beds does not exceed 25 percent of the appraised 
 86.3   value of the facility or $500,000, whichever is less; 
 86.4      (c) to license or certify beds in a project recommended for 
 86.5   approval under section 144A.073; 
 86.6      (d) to license or certify beds that are moved from an 
 86.7   existing state nursing home to a different state facility, 
 86.8   provided there is no net increase in the number of state nursing 
 86.9   home beds; 
 86.10     (e) to certify and license as nursing home beds boarding 
 86.11  care beds in a certified boarding care facility if the beds meet 
 86.12  the standards for nursing home licensure, or in a facility that 
 86.13  was granted an exception to the moratorium under section 
 86.14  144A.073, and if the cost of any remodeling of the facility does 
 86.15  not exceed 25 percent of the appraised value of the facility or 
 86.16  $500,000, whichever is less.  If boarding care beds are licensed 
 86.17  as nursing home beds, the number of boarding care beds in the 
 86.18  facility must not increase beyond the number remaining at the 
 86.19  time of the upgrade in licensure.  The provisions contained in 
 86.20  section 144A.073 regarding the upgrading of the facilities do 
 86.21  not apply to facilities that satisfy these requirements; 
 86.22     (f) to license and certify up to 40 beds transferred from 
 86.23  an existing facility owned and operated by the Amherst H. Wilder 
 86.24  Foundation in the city of St. Paul to a new unit at the same 
 86.25  location as the existing facility that will serve persons with 
 86.26  Alzheimer's disease and other related disorders.  The transfer 
 86.27  of beds may occur gradually or in stages, provided the total 
 86.28  number of beds transferred does not exceed 40.  At the time of 
 86.29  licensure and certification of a bed or beds in the new unit, 
 86.30  the commissioner of health shall delicense and decertify the 
 86.31  same number of beds in the existing facility.  As a condition of 
 86.32  receiving a license or certification under this clause, the 
 86.33  facility must make a written commitment to the commissioner of 
 86.34  human services that it will not seek to receive an increase in 
 86.35  its property-related payment rate as a result of the transfers 
 86.36  allowed under this paragraph; 
 87.1      (g) to license and certify nursing home beds to replace 
 87.2   currently licensed and certified boarding care beds which may be 
 87.3   located either in a remodeled or renovated boarding care or 
 87.4   nursing home facility or in a remodeled, renovated, newly 
 87.5   constructed, or replacement nursing home facility within the 
 87.6   identifiable complex of health care facilities in which the 
 87.7   currently licensed boarding care beds are presently located, 
 87.8   provided that the number of boarding care beds in the facility 
 87.9   or complex are decreased by the number to be licensed as nursing 
 87.10  home beds and further provided that, if the total costs of new 
 87.11  construction, replacement, remodeling, or renovation exceed ten 
 87.12  percent of the appraised value of the facility or $200,000, 
 87.13  whichever is less, the facility makes a written commitment to 
 87.14  the commissioner of human services that it will not seek to 
 87.15  receive an increase in its property-related payment rate by 
 87.16  reason of the new construction, replacement, remodeling, or 
 87.17  renovation.  The provisions contained in section 144A.073 
 87.18  regarding the upgrading of facilities do not apply to facilities 
 87.19  that satisfy these requirements; 
 87.20     (h) to license as a nursing home and certify as a nursing 
 87.21  facility a facility that is licensed as a boarding care facility 
 87.22  but not certified under the medical assistance program, but only 
 87.23  if the commissioner of human services certifies to the 
 87.24  commissioner of health that licensing the facility as a nursing 
 87.25  home and certifying the facility as a nursing facility will 
 87.26  result in a net annual savings to the state general fund of 
 87.27  $200,000 or more; 
 87.28     (i) to certify, after September 30, 1992, and prior to July 
 87.29  1, 1993, existing nursing home beds in a facility that was 
 87.30  licensed and in operation prior to January 1, 1992; 
 87.31     (j) to license and certify new nursing home beds to replace 
 87.32  beds in a facility condemned as part of an economic 
 87.33  redevelopment plan in a city of the first class, provided the 
 87.34  new facility is located within one mile of the site of the old 
 87.35  facility.  Operating and property costs for the new facility 
 87.36  must be determined and allowed under existing reimbursement 
 88.1   rules; 
 88.2      (k) to license and certify up to 20 new nursing home beds 
 88.3   in a community-operated hospital and attached convalescent and 
 88.4   nursing care facility with 40 beds on April 21, 1991, that 
 88.5   suspended operation of the hospital in April 1986.  The 
 88.6   commissioner of human services shall provide the facility with 
 88.7   the same per diem property-related payment rate for each 
 88.8   additional licensed and certified bed as it will receive for its 
 88.9   existing 40 beds; 
 88.10     (l) to license or certify beds in renovation, replacement, 
 88.11  or upgrading projects as defined in section 144A.073, 
 88.12  subdivision 1, so long as the cumulative total costs of the 
 88.13  facility's remodeling projects do not exceed 25 percent of the 
 88.14  appraised value of the facility or $500,000, whichever is less; 
 88.15     (m) to license and certify beds that are moved from one 
 88.16  location to another for the purposes of converting up to five 
 88.17  four-bed wards to single or double occupancy rooms in a nursing 
 88.18  home that, as of January 1, 1993, was county-owned and had a 
 88.19  licensed capacity of 115 beds; 
 88.20     (n) to allow a facility that on April 16, 1993, was a 
 88.21  106-bed licensed and certified nursing facility located in 
 88.22  Minneapolis to layaway all of its licensed and certified nursing 
 88.23  home beds.  These beds may be relicensed and recertified in a 
 88.24  newly-constructed teaching nursing home facility affiliated with 
 88.25  a teaching hospital upon approval by the legislature.  The 
 88.26  proposal must be developed in consultation with the interagency 
 88.27  committee on long-term care planning.  The beds on layaway 
 88.28  status shall have the same status as voluntarily delicensed and 
 88.29  decertified beds, except that beds on layaway status remain 
 88.30  subject to the surcharge in section 256.9657.  This layaway 
 88.31  provision expires July 1, 1997; 
 88.32     (o) to allow a project which will be completed in 
 88.33  conjunction with an approved moratorium exception project for a 
 88.34  nursing home in southern Cass county and which is directly 
 88.35  related to that portion of the facility that must be repaired, 
 88.36  renovated, or replaced, to correct an emergency plumbing problem 
 89.1   for which a state correction order has been issued and which 
 89.2   must be corrected by August 31, 1993; 
 89.3      (p) to allow a facility that on April 16, 1993, was a 
 89.4   368-bed licensed and certified nursing facility located in 
 89.5   Minneapolis to layaway, upon 30 days prior written notice to the 
 89.6   commissioner, up to 30 of the facility's licensed and certified 
 89.7   beds by converting three-bed wards to single or double 
 89.8   occupancy.  Beds on layaway status shall have the same status as 
 89.9   voluntarily delicensed and decertified beds except that beds on 
 89.10  layaway status remain subject to the surcharge in section 
 89.11  256.9657, remain subject to the license application and renewal 
 89.12  fees under section 144A.07 and shall be subject to a $100 per 
 89.13  bed reactivation fee.  In addition, at any time within three 
 89.14  years of the effective date of the layaway, the beds on layaway 
 89.15  status may be: 
 89.16     (1) relicensed and recertified upon relocation and 
 89.17  reactivation of some or all of the beds to an existing licensed 
 89.18  and certified facility or facilities located in Pine River, 
 89.19  Brainerd, or International Falls; provided that the total 
 89.20  project construction costs related to the relocation of beds 
 89.21  from layaway status for any facility receiving relocated beds 
 89.22  may not exceed the dollar threshold provided in subdivision 2 
 89.23  unless the construction project has been approved through the 
 89.24  moratorium exception process under section 144A.073; 
 89.25     (2) relicensed and recertified, upon reactivation of some 
 89.26  or all of the beds within the facility which placed the beds in 
 89.27  layaway status, if the commissioner has determined a need for 
 89.28  the reactivation of the beds on layaway status. 
 89.29     The property-related payment rate of a facility placing 
 89.30  beds on layaway status must be adjusted by the incremental 
 89.31  change in its rental per diem after recalculating the rental per 
 89.32  diem as provided in section 256B.431, subdivision 3a, paragraph 
 89.33  (d).  The property-related payment rate for a facility 
 89.34  relicensing and recertifying beds from layaway status must be 
 89.35  adjusted by the incremental change in its rental per diem after 
 89.36  recalculating its rental per diem using the number of beds after 
 90.1   the relicensing to establish the facility's capacity day 
 90.2   divisor, which shall be effective the first day of the month 
 90.3   following the month in which the relicensing and recertification 
 90.4   became effective.  Any beds remaining on layaway status more 
 90.5   than three years after the date the layaway status became 
 90.6   effective must be removed from layaway status and immediately 
 90.7   delicensed and decertified; 
 90.8      (q) to license and certify beds in a renovation and 
 90.9   remodeling project to convert 13 three-bed wards into 13 two-bed 
 90.10  rooms and 13 single-bed rooms, expand space, and add 
 90.11  improvements in a nursing home that, as of January 1, 1994, met 
 90.12  the following conditions:  the nursing home was located in 
 90.13  Ramsey county; was not owned by a hospital corporation; had a 
 90.14  licensed capacity of 64 beds; and had been ranked among the top 
 90.15  15 applicants by the 1993 moratorium exceptions advisory review 
 90.16  panel.  The total project construction cost estimate for this 
 90.17  project must not exceed the cost estimate submitted in 
 90.18  connection with the 1993 moratorium exception process; 
 90.19     (r) to license and certify beds in a renovation and 
 90.20  remodeling project to convert 12 four-bed wards into 24 two-bed 
 90.21  rooms, expand space, and add improvements in a nursing home 
 90.22  that, as of January 1, 1994, met the following conditions:  the 
 90.23  nursing home was located in Ramsey county; had a licensed 
 90.24  capacity of 154 beds; and had been ranked among the top 15 
 90.25  applicants by the 1993 moratorium exceptions advisory review 
 90.26  panel.  The total project construction cost estimate for this 
 90.27  project must not exceed the cost estimate submitted in 
 90.28  connection with the 1993 moratorium exception process; 
 90.29     (s) to license and certify up to 117 beds that are 
 90.30  relocated from a licensed and certified 138-bed nursing facility 
 90.31  located in St. Paul to a hospital with 130 licensed hospital 
 90.32  beds located in South St. Paul, provided that the nursing 
 90.33  facility and hospital are owned by the same or a related 
 90.34  organization and that prior to the date the relocation is 
 90.35  completed the hospital ceases operation of its inpatient 
 90.36  hospital services at that hospital.  After relocation, the 
 91.1   nursing facility's status under section 256B.431, subdivision 
 91.2   2j, shall be the same as it was prior to relocation.  The 
 91.3   nursing facility's property-related payment rate resulting from 
 91.4   the project authorized in this paragraph shall become effective 
 91.5   no earlier than April 1, 1996.  For purposes of calculating the 
 91.6   incremental change in the facility's rental per diem resulting 
 91.7   from this project, the allowable appraised value of the nursing 
 91.8   facility portion of the existing health care facility physical 
 91.9   plant prior to the renovation and relocation may not exceed 
 91.10  $2,490,000; 
 91.11     (t) to license and certify two beds in a facility to 
 91.12  replace beds that were voluntarily delicensed and decertified on 
 91.13  June 28, 1991; 
 91.14     (u) to allow 16 licensed and certified beds located on July 
 91.15  1, 1994, in a 142-bed nursing home and 21-bed boarding care home 
 91.16  facility in Minneapolis, notwithstanding the licensure and 
 91.17  certification after July 1, 1995, of the Minneapolis facility as 
 91.18  a 147-bed nursing home facility after completion of a 
 91.19  construction project approved in 1993 under section 144A.073, to 
 91.20  be laid away upon 30 days' prior written notice to the 
 91.21  commissioner.  Beds on layaway status shall have the same status 
 91.22  as voluntarily delicensed or decertified beds except that they 
 91.23  shall remain subject to the surcharge in section 256.9657.  The 
 91.24  16 beds on layaway status may be relicensed as nursing home beds 
 91.25  and recertified at any time within five years of the effective 
 91.26  date of the layaway upon relocation of some or all of the beds 
 91.27  to a licensed and certified facility located in Watertown, 
 91.28  provided that the total project construction costs related to 
 91.29  the relocation of beds from layaway status for the Watertown 
 91.30  facility may not exceed the dollar threshold provided in 
 91.31  subdivision 2 unless the construction project has been approved 
 91.32  through the moratorium exception process under section 144A.073. 
 91.33     The property-related payment rate of the facility placing 
 91.34  beds on layaway status must be adjusted by the incremental 
 91.35  change in its rental per diem after recalculating the rental per 
 91.36  diem as provided in section 256B.431, subdivision 3a, paragraph 
 92.1   (d).  The property-related payment rate for the facility 
 92.2   relicensing and recertifying beds from layaway status must be 
 92.3   adjusted by the incremental change in its rental per diem after 
 92.4   recalculating its rental per diem using the number of beds after 
 92.5   the relicensing to establish the facility's capacity day 
 92.6   divisor, which shall be effective the first day of the month 
 92.7   following the month in which the relicensing and recertification 
 92.8   became effective.  Any beds remaining on layaway status more 
 92.9   than five years after the date the layaway status became 
 92.10  effective must be removed from layaway status and immediately 
 92.11  delicensed and decertified; or 
 92.12     (v) to license and certify beds that are moved within an 
 92.13  existing area of a facility or to a newly-constructed addition 
 92.14  which is built for the purpose of eliminating three- and 
 92.15  four-bed rooms and adding space for dining, lounge areas, 
 92.16  bathing rooms, and ancillary service areas in a nursing home 
 92.17  that, as of January 1, 1995, was located in Fridley and had a 
 92.18  licensed capacity of 129 beds; or 
 92.19     (w) to relocate 36 beds in Crow Wing county and four beds 
 92.20  from Hennepin county to a 160-bed facility in Crow Wing county, 
 92.21  provided all the affected beds are under common ownership.  
 92.22     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
 92.23  256B.431, subdivision 25, is amended to read: 
 92.24     Subd. 25.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
 92.25  BEGINNING JULY 1, 1995.] The nursing facility reimbursement 
 92.26  changes in paragraphs (a) to (g) (h) shall apply in the sequence 
 92.27  specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and 
 92.28  this section, beginning July 1, 1995. 
 92.29     (a) The eight-cent adjustment to care-related rates in 
 92.30  subdivision 22, paragraph (e), shall no longer apply. 
 92.31     (b) For rate years beginning on or after July 1, 1995, the 
 92.32  commissioner shall limit a nursing facility's allowable 
 92.33  operating per diem for each case mix category for each rate year 
 92.34  as in clauses (1) to (3). 
 92.35     (1) For the rate year beginning July 1, 1995, the 
 92.36  commissioner shall group nursing facilities into two groups, 
 93.1   freestanding and nonfreestanding, within each geographic group, 
 93.2   using their operating cost per diem for the case mix A 
 93.3   classification.  A nonfreestanding nursing facility is a nursing 
 93.4   facility whose other operating cost per diem is subject to the 
 93.5   hospital attached, short length of stay, or the rule 80 limits.  
 93.6   All other nursing facilities shall be considered freestanding 
 93.7   nursing facilities.  The commissioner shall then array all 
 93.8   nursing facilities in each grouping by their allowable case mix 
 93.9   A operating cost per diem.  In calculating a nursing facility's 
 93.10  operating cost per diem for this purpose, the commissioner shall 
 93.11  exclude the raw food cost per diem related to providing special 
 93.12  diets that are based on religious beliefs, as determined in 
 93.13  subdivision 2b, paragraph (h).  For those nursing facilities in 
 93.14  each grouping whose case mix A operating cost per diem: 
 93.15     (i) is at or below the median minus 1.0 standard deviation 
 93.16  of the array, the commissioner shall limit the nursing 
 93.17  facility's allowable operating cost per diem for each case mix 
 93.18  category to the lesser of the prior reporting year's allowable 
 93.19  operating cost per diems plus the inflation factor as 
 93.20  established in paragraph (f), clause (2), increased by six 
 93.21  percentage points, or the current reporting year's corresponding 
 93.22  allowable operating cost per diem; 
 93.23     (ii) is between minus .5 standard deviation and minus 1.0 
 93.24  standard deviation below the median of the array, the 
 93.25  commissioner shall limit the nursing facility's allowable 
 93.26  operating cost per diem for each case mix category to the lesser 
 93.27  of the prior reporting year's allowable operating cost per diems 
 93.28  plus the inflation factor as established in paragraph (f), 
 93.29  clause (2), increased by four percentage points, or the current 
 93.30  reporting year's corresponding allowable operating cost per 
 93.31  diem; or 
 93.32     (iii) is equal to or above minus .5 standard deviation 
 93.33  below the median of the array, the commissioner shall limit the 
 93.34  nursing facility's allowable operating cost per diem for each 
 93.35  case mix category to the lesser of the prior reporting year's 
 93.36  allowable operating cost per diems plus the inflation factor as 
 94.1   established in paragraph (f), clause (2), increased by three 
 94.2   percentage points, or the current reporting year's corresponding 
 94.3   allowable operating cost per diem. 
 94.4      (2) For the rate year beginning on July 1, 1996, the 
 94.5   commissioner shall limit the nursing facility's allowable 
 94.6   operating cost per diem for each case mix category to the lesser 
 94.7   of the prior reporting year's allowable operating cost per diems 
 94.8   plus the inflation factor as established in paragraph (f), 
 94.9   clause (2), increased by one percentage point or the current 
 94.10  reporting year's corresponding allowable operating cost per 
 94.11  diems; and 
 94.12     (3) For rate years beginning on or after July 1, 1997, the 
 94.13  commissioner shall limit the nursing facility's allowable 
 94.14  operating cost per diem for each case mix category to the lesser 
 94.15  of the reporting year prior to the current reporting year's 
 94.16  allowable operating cost per diems plus the inflation factor as 
 94.17  established in paragraph (f), clause (2), or the current 
 94.18  reporting year's corresponding allowable operating cost per 
 94.19  diems. 
 94.20     (c) For rate years beginning on July 1, 1995, the 
 94.21  commissioner shall limit the allowable operating cost per diems 
 94.22  for high cost nursing facilities.  After application of the 
 94.23  limits in paragraph (b) to each nursing facility's operating 
 94.24  cost per diems, the commissioner shall group nursing facilities 
 94.25  into two groups, freestanding or nonfreestanding, within each 
 94.26  geographic group.  A nonfreestanding nursing facility is a 
 94.27  nursing facility whose other operating cost per diems are 
 94.28  subject to hospital attached, short length of stay, or rule 80 
 94.29  limits.  All other nursing facilities shall be considered 
 94.30  freestanding nursing facilities.  The commissioner shall then 
 94.31  array all nursing facilities within each grouping by their 
 94.32  allowable case mix A operating cost per diems.  In calculating a 
 94.33  nursing facility's operating cost per diem for this purpose, the 
 94.34  commissioner shall exclude the raw food cost per diem related to 
 94.35  providing special diets that are based on religious beliefs, as 
 94.36  determined in subdivision 2b, paragraph (h).  For those nursing 
 95.1   facilities in each grouping whose case mix A operating cost per 
 95.2   diem exceeds 1.0 standard deviation above the median, the 
 95.3   commissioner shall reduce their allowable operating cost per 
 95.4   diems by two percent.  For those nursing facilities in each 
 95.5   grouping whose case mix A operating cost per diem exceeds 0.5 
 95.6   standard deviation above the median but is less than or equal to 
 95.7   1.0 standard deviation above the median, the commissioner shall 
 95.8   reduce their allowable operating cost per diems by one percent. 
 95.9      (d) For rate years beginning on or after July 1, 1996, the 
 95.10  commissioner shall limit the allowable operating cost per diems 
 95.11  for high cost nursing facilities.  After application of the 
 95.12  limits in paragraph (b) to each nursing facility's operating 
 95.13  cost per diems, the commissioner shall group nursing facilities 
 95.14  into two groups, freestanding or nonfreestanding, within each 
 95.15  geographic group.  A nonfreestanding nursing facility is a 
 95.16  nursing facility whose other operating cost per diems are 
 95.17  subject to hospital attached, short length of stay, or rule 80 
 95.18  limits.  All other nursing facilities shall be considered 
 95.19  freestanding nursing facilities.  The commissioner shall then 
 95.20  array all nursing facilities within each grouping by their 
 95.21  allowable case mix A operating cost per diems.  In calculating a 
 95.22  nursing facility's operating cost per diem for this purpose, the 
 95.23  commissioner shall exclude the raw food cost per diem related to 
 95.24  providing special diets that are based on religious beliefs, as 
 95.25  determined in subdivision 2b, paragraph (h).  In those nursing 
 95.26  facilities in each grouping whose case mix A operating cost per 
 95.27  diem exceeds 1.0 standard deviation above the median, the 
 95.28  commissioner shall reduce their allowable operating cost per 
 95.29  diems by three percent.  For those nursing facilities in each 
 95.30  grouping whose case mix A operating cost per diem exceeds 0.5 
 95.31  standard deviation above the median but is less than or equal to 
 95.32  1.0 standard deviation above the median, the commissioner shall 
 95.33  reduce their allowable operating cost per diems by two percent. 
 95.34     (e) For rate years beginning on or after July 1, 1995, the 
 95.35  commissioner shall determine a nursing facility's efficiency 
 95.36  incentive by first computing the allowable difference, which is 
 96.1   the lesser of $4.50 or the amount by which the facility's other 
 96.2   operating cost limit exceeds its nonadjusted other operating 
 96.3   cost per diem for that rate year.  The commissioner shall 
 96.4   compute the efficiency incentive by: 
 96.5      (1) subtracting the allowable difference from $4.50 and 
 96.6   dividing the result by $4.50; 
 96.7      (2) multiplying 0.20 by the ratio resulting from clause 
 96.8   (1), and then; 
 96.9      (3) adding 0.50 to the result from clause (2); and 
 96.10     (4) multiplying the result from clause (3) times the 
 96.11  allowable difference. 
 96.12     The nursing facility's efficiency incentive payment shall 
 96.13  be the lesser of $2.25 or the product obtained in clause (4). 
 96.14     (f) For rate years beginning on or after July 1, 1995, the 
 96.15  forecasted price index for a nursing facility's allowable 
 96.16  operating cost per diems shall be determined under clauses (1) 
 96.17  to (3) using the change in the Consumer Price Index-All Items 
 96.18  (United States city average) (CPI-U) or the change in the 
 96.19  Nursing Home Market Basket, both as forecasted by Data Resources 
 96.20  Inc., whichever is applicable.  The commissioner shall use the 
 96.21  indices as forecasted in the fourth quarter of the calendar year 
 96.22  preceding the rate year, subject to subdivision 2l, paragraph 
 96.23  (c).  If, as a result of federal legislative or administrative 
 96.24  action, the methodology used to calculate the Consumer Price 
 96.25  Index-All Items (United States city average) (CPI-U) changes, 
 96.26  the commissioner shall develop a conversion factor or other 
 96.27  methodology to convert the CPI-U index factor that results from 
 96.28  the new methodology to an index factor that approximates, as 
 96.29  closely as possible, the index factor that would have resulted 
 96.30  from application of the original CPI-U methodology prior to any 
 96.31  changes in methodology.  The commissioner shall use the 
 96.32  conversion factor or other methodology to calculate an adjusted 
 96.33  inflation index.  The adjusted inflation index must be used to 
 96.34  calculate payment rates under this section instead of the CPI-U 
 96.35  index specified in paragraph (d).  If the commissioner is 
 96.36  required to develop an adjusted inflation index, the 
 97.1   commissioner shall report to the legislature as part of the next 
 97.2   budget submission the fiscal impact of applying this index. 
 97.3      (1) The CPI-U forecasted index for allowable operating cost 
 97.4   per diems shall be based on the 21-month period from the 
 97.5   midpoint of the nursing facility's reporting year to the 
 97.6   midpoint of the rate year following the reporting year. 
 97.7      (2) The Nursing Home Market Basket forecasted index for 
 97.8   allowable operating costs and per diem limits shall be based on 
 97.9   the 12-month period between the midpoints of the two reporting 
 97.10  years preceding the rate year. 
 97.11     (3) For rate years beginning on or after July 1, 1996, the 
 97.12  forecasted index for operating cost limits referred to in 
 97.13  subdivision 21, paragraph (b), shall be based on the CPI-U for 
 97.14  the 12-month period between the midpoints of the two reporting 
 97.15  years preceding the rate year. 
 97.16     (g) After applying these provisions for the respective rate 
 97.17  years, the commissioner shall index these allowable operating 
 97.18  costs per diems by the inflation factor provided for in 
 97.19  paragraph (f), clause (1), and add the nursing facility's 
 97.20  efficiency incentive as computed in paragraph (e). 
 97.21     (h) A nursing facility licensed for 302 beds on September 
 97.22  30, 1993, that was approved under the moratorium exception 
 97.23  process in section 144A.073 for a partial replacement, and 
 97.24  completed the replacement project in December 1994, is exempt 
 97.25  from paragraphs (b) to (d) for rate years beginning on or after 
 97.26  July 1, 1995. 
 97.27     (i) Notwithstanding section 11, paragraph (h), for the rate 
 97.28  years beginning on July 1, 1996, July 1, 1997, and July 1, 1998, 
 97.29  a nursing facility licensed for 40 beds effective May 1, 1992, 
 97.30  with a subsequent increase of 20 Medicare/Medicaid certified 
 97.31  beds, effective January 26, 1993, in accordance with an increase 
 97.32  in licensure is exempt from paragraphs (b) to (d). 
 97.33     Sec. 4.  Minnesota Statutes 1995 Supplement, section 
 97.34  256B.501, subdivision 5b, is amended to read: 
 97.35     Subd. 5b.  [ICF/MR OPERATING COST LIMITATION AFTER 
 97.36  SEPTEMBER 30, 1995.] (a) For the rate years year beginning on 
 98.1   October 1, 1995, and October 1, 1996 and for rate years 
 98.2   beginning on or after October 1, 1997, the commissioner shall 
 98.3   limit the allowable operating cost per diems, as determined 
 98.4   under this subdivision and the reimbursement rules, for high 
 98.5   cost ICF's/MR.  Prior to indexing each facility's operating cost 
 98.6   per diems for inflation, the commissioner shall group the 
 98.7   facilities into eight groups.  The commissioner shall then array 
 98.8   all facilities within each grouping by their general operating 
 98.9   cost per service unit per diems. 
 98.10     (b) The commissioner shall annually review and adjust the 
 98.11  general operating costs incurred by the facility during the 
 98.12  reporting year preceding the rate year to determine the 
 98.13  facility's allowable historical general operating costs.  For 
 98.14  this purpose, the term general operating costs means the 
 98.15  facility's allowable operating costs included in the program, 
 98.16  maintenance, and administrative operating costs categories, as 
 98.17  well as the facility's related payroll taxes and fringe 
 98.18  benefits, real estate insurance, and professional liability 
 98.19  insurance.  A facility's total operating cost payment rate shall 
 98.20  be limited according to paragraphs (c) and (d) as follows: 
 98.21     (c) A facility's total operating cost payment rate shall be 
 98.22  equal to its allowable historical operating cost per diems for 
 98.23  program, maintenance, and administrative cost categories 
 98.24  multiplied by the forecasted inflation index in subdivision 3c, 
 98.25  clause (1), subject to the limitations in paragraph (d). 
 98.26     (d) For the rate years beginning on or after October 1, 
 98.27  1995, the commissioner shall establish maximum overall general 
 98.28  operating cost per service unit limits for facilities according 
 98.29  to clauses (1) to (8).  Each facility's allowable historical 
 98.30  general operating costs and client assessment information 
 98.31  obtained from client assessments completed under subdivision 3g 
 98.32  for the reporting year ending December 31, 1994 (the base year), 
 98.33  shall be used for establishing the overall limits.  If a 
 98.34  facility's proportion of temporary care resident days to total 
 98.35  resident days exceeds 80 percent, the commissioner must exempt 
 98.36  that facility from the overall general operating cost per 
 99.1   service unit limits in clauses (1) to (8).  For this purpose, 
 99.2   "temporary care" means care provided by a facility to a client 
 99.3   for less than 30 consecutive resident days. 
 99.4      (1) The commissioner shall determine each facility's 
 99.5   weighted service units for the reporting year by multiplying its 
 99.6   resident days in each client classification level as established 
 99.7   in subdivision 3g, paragraph (d), by the corresponding weights 
 99.8   for that classification level, as established in subdivision 3g, 
 99.9   paragraph (i), and summing the results.  For the reporting year 
 99.10  ending December 31, 1994, the commissioner shall use the service 
 99.11  unit score computed from the client classifications determined 
 99.12  by the Minnesota department of health's annual review, including 
 99.13  those of clients admitted during that year. 
 99.14     (2) The facility's service unit score is equal to its 
 99.15  weighted service units as computed in clause (1), divided by the 
 99.16  facility's total resident days excluding temporary care resident 
 99.17  days, for the reporting year. 
 99.18     (3) For each facility, the commissioner shall determine the 
 99.19  facility's cost per service unit by dividing its allowable 
 99.20  historical general operating costs for the reporting year by the 
 99.21  facility's service unit score in clause (2) multiplied by its 
 99.22  total resident days, or 85 percent of the facility's capacity 
 99.23  days times its service unit score in clause (2), if the 
 99.24  facility's occupancy is less than 85 percent of licensed 
 99.25  capacity.  If a facility reports temporary care resident days, 
 99.26  the temporary care resident days shall be multiplied by the 
 99.27  service unit score in clause (2), and the resulting weighted 
 99.28  resident days shall be added to the facility's weighted service 
 99.29  units in clause (1) prior to computing the facility's cost per 
 99.30  service unit under this clause. 
 99.31     (4) The commissioner shall group facilities based on class 
 99.32  A or class B licensure designation, number of licensed beds, and 
 99.33  geographic location.  For purposes of this grouping, facilities 
 99.34  with six beds or less shall be designated as small facilities 
 99.35  and facilities with more than six beds shall be designated as 
 99.36  large facilities.  If a facility has both class A and class B